OSWEGO, NY--(Marketwire - April 28, 2008) - Pathfinder Bancorp, Inc., the mid-tier holding
company of Pathfinder Bank, (
"First quarter earnings continued a favorable trend of revenue growth from both net interest income and fee income sources," according to Thomas Schneider, President and Chief Executive Officer. "Additionally," Schneider further stated, "net interest income grew by 13% on a combination of volume increase and spread expansion, while core fee income categories increased by 17% over the first quarter of 2007. These results were slightly mitigated by higher provisioning for loan losses to reflect the growth in the loan portfolio and general economic conditions."
Net interest income for the three months ended March 31, 2008, increased $286,000 when compared to the same period during 2007. Interest income increased $231,000, or 5%, combined with decreased interest expense of $55,000, or 3%. Net interest rate spread increased to 2.99% for the first quarter of 2008 from 2.80% for the same period in 2007. Average interest-earning assets increased 7% to $305.8 million at March 31, 2008 as compared to $284.6 million at March 31, 2007, while the yield on those assets decreased 10 basis points to 5.94% compared to 6.04% for the same period in 2007. The increase in average earning assets is primarily attributable to an $18.6 million increase in the average loan portfolio, a $1.5 million increase in average investment securities and a $1.0 million increase in the average balance of interest earning deposits. Average interest bearing liabilities increased $17.6 million, or 7%, while the cost of funds decreased 28 basis points to 2.95% from 3.23% for the same period in 2007. The increase in the average balance of interest bearing liabilities resulted primarily from a $10.4 million increase in average borrowed funds and a $7.3 million increase in average deposits.
Provision for loan losses for the quarter ended March 31, 2008 increased to $145,000 from $50,000 for the same period in 2007. The increased provision is reflective of a growing loan portfolio and one more heavily weighted to commercial term and commercial real estate, which have higher inherent risk characteristics than a consumer real estate portfolio, as well as a general weakening in economic conditions. The Company's ratio of allowance for loan losses to period end loans increased to 0.83% at March 31, 2008 as compared to 0.76% at December 31, 2007. Nonperforming loans to period end loans increased to 0.96% at March 31, 2008 from 0.71% at December 31, 2007. The increase in total non-performing loans is primarily the result of delinquencies of three commercial loan relationships.
Non-interest income, exclusive of gains and losses from the sale of securities, loans and foreclosed real estate, increased to $698,000 for the quarter ended March 31, 2008 compared to $596,000 for the same quarter in the prior year. The increase in non-interest income is primarily attributable to a $51,000 increase in service charges on deposit accounts, a $26,000 increase in loan servicing fees, a $18,000 increase in the bank's Visa debit card fees and an $11,000 increase in the value of bank owned life insurance.
Net gains and losses from the sale of securities, loans and foreclosed real estate increased to a net gain of $6,000 for the quarter ended March 31, 2008 as compared to a net loss of $10,000 when compared to the same quarter of 2007. The increase was primarily due to the gain recognized on the sale of foreclosed real estate in the first quarter of 2008.
Non-interest expenses remained relatively consistent at $2.5 million for the quarter ended March 31, 2008, when compared to the same period in the prior year. An increase in salaries and employee benefits of $110,000 was primarily due to annual merit increases and other incentive based compensation costs. Building occupancy expenses were $28,000 higher as a result of increased depreciation expenses, property taxes and communication charges. A $36,000 increase in other expenses was primarily the result of higher costs associated with foreclosed real estate properties as the number of properties increased to 8 from 5 in the comparable quarter of 2007. Audits and exams expense increased as a result of year end audit travel related expenses. Offsetting these increases were reductions of $56,000 in amortization expense as the core deposit intangibles became fully amortized in October 2007. Data processing expenses were $33,000 lower than the comparable quarter of 2007 as a result of lower depreciation costs and maintenance expenses on equipment. An $18,000 reduction in professional and other services was primarily due to consulting charges for the SOX 404 review process being lower in the first quarter of 2008 when compared to the first quarter of 2007. This reduction was offset by increased legal fees and investment management expenses.
Pathfinder Bancorp, Inc. is the mid-tier holding company of Pathfinder Bank, a New York chartered savings bank headquartered in Oswego, New York. The Bank has seven full service offices located in its market area consisting of Oswego County. Financial highlights for Pathfinder Bancorp, Inc. are attached. Presently, the only business conducted by Pathfinder Bancorp, Inc. is the 100% ownership of Pathfinder Bank and Pathfinder Statutory Trust I.
This release may contain certain forward-looking statements, which are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products, and services.
PATHFINDER BANCORP, INC.
FINANCIAL HIGHLIGHTS (Unaudited)
(dollars in thousands, except per share amounts)
For the three months
ended March 31,
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2008 2007
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Condensed Income Statement
Interest income $ 4,500 $ 4,269
Interest expense 2,088 2,143
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Net interest income 2,412 2,126
Provision for loan losses 145 50
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Net interest income after
provision for loan losses 2,267 2,076
Other income 698 596
Net gains (losses) on
securities, loans and
foreclosed real estate 6 (10)
Other expense 2,525 2,458
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Income before taxes 446 204
Provision for income taxes 114 39
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Net income $ 332 $ 165
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Key Earnings Ratios
Return on average assets 0.40% 0.21%
Return on average equity 5.94% 3.13%
Net interest margin (tax
equivalent) 3.21% 3.02%
Share and Per Share Data
Basic weighted average shares
outstanding 2,483,732 2,481,572
Basic earnings per share $ 0.13 $ 0.07
Diluted earnings per share 0.13 0.07
Cash dividends per share 0.1025 0.1025
Book value per share 8.85 8.43
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March 31, December 31, March 31,
2008 2007 2007
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Selected Balance Sheet Data
Assets $ 337,145 $ 320,691 $ 317,219
Earning assets 304,985 290,192 290,321
Total loans 223,390 222,749 204,691
Deposits 271,376 251,085 260,461
Borrowed Funds 34,310 38,410 22,010
Trust Preferred Debt 5,155 5,155 10,310
Shareholders' equity 21,972 21,704 20,932
Asset Quality Ratios
Net loan charge-offs
(recoveries) to average loans -0.01% 0.08% 0.13%
Allowance for loan losses to
period end loans 0.83% 0.76% 0.72%
Allowance for loan losses to
nonperforming loans 86.70% 107.04% 109.70%
Nonperforming loans to period
end loans 0.96% 0.71% 0.66%
Nonperforming assets to total
assets 0.87% 0.77% 0.54%
Contact Information: CONTACT: Thomas W. Schneider President, CEO James A. Dowd Vice President, CFO Telephone: (315) 343-0057