-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T3c0pd/5vzMKmt/HWizcT6c6cfyrsh1jGnNcPP2iL6e+GxzPnXfMUxmuhfJo00W6 6PhH5eKD8p79vemF5g9Lgg== 0001046188-06-000032.txt : 20061027 0001046188-06-000032.hdr.sgml : 20061027 20061027093448 ACCESSION NUMBER: 0001046188-06-000032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060930 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20061027 DATE AS OF CHANGE: 20061027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PATHFINDER BANCORP INC CENTRAL INDEX KEY: 0001046188 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 161540137 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23601 FILM NUMBER: 061167369 BUSINESS ADDRESS: STREET 1: 214 W FIRST ST CITY: OSWEGO STATE: DE ZIP: 13126 BUSINESS PHONE: 3153430057 MAIL ADDRESS: STREET 1: 214 W FIRST ST CITY: OSWEGO STATE: DE ZIP: 13126 8-K 1 thirdquarterearningsrelease.txt PATHFINDER BANCORP, INC. THIRD QUARTER EARNINGS RELEASE SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 27, 2006 Pathfinder Bancorp, Inc. ------------------------------------------------------------- (Exact name of registrant as specified in its charter) Federal 000-23601 16-1540137 - ---------------------------- --------------------- ------------------ (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation) Identification No.) Registrant's telephone number, including area code: (315) 343-0057 --------------- Not Applicable -------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - ----------------------------- Section 2 - Financial Information Item 2.02 On October 27, 2006, Pathfinder Bancorp, Inc. issued a press release disclosing third quarter 2006 financial results. A copy of the press release is included as Exhibit 99.1 to this report. The information in Item 2.02 to this Form 8-K and Exhibit 99.1 in accordance with general instruction B.2 of Form 8-K, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except shall be expressly set forth by specific in such filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. PATHFINDER BANCORP, INC. Date: October 27, 2006 By: /s/ Thomas W. Schneider ------------------------------- Thomas W. Schneider President and Chief Executive Officer EXHIBIT INDEX Earnings release dated October 27, 2006 announcing September 30, 2006 earnings. EXHIBIT 99.1 FOR IMMEDIATE RELEASE CONTACT: Thomas W. Schneider - President, CEO James A. Dowd - Vice President, CFO Telephone: (315) 343-0057 PATHFINDER BANCORP, INC. ANNOUNCES THIRD QUARTER EARNINGS Oswego, New York, October 27, 2006 Pathfinder Bancorp, Inc., the mid-tier holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC, listing: PathBcp) reported net income of $170,000, or $0.07 per share, for the three months ended September 30, 2006 as compared to $116,000, or $0.05 per share for the same period in 2005. For the nine months ended September 30, 2006, the Company reported net income of $713,000, or $0.29 per share, compared to $499,000, or $0.20 per share, for the same period in 2005. "An earnings improvement of approximately 43% over the first nine months of 2006 is a result of the positive execution of a number of our strategic initiatives", stated Thomas W. Schneider, President and CEO. "We are progressing with our plans to restructure our balance sheet through the growth of commercial loans; control our costs; and increase our non-interest income. Over the past 9 months, commercial loans have risen 15%, operating expenses have been reduced 4% and core non-interest income has grown 9%." "Earnings, however, are still well below our performance objectives and expectations," Mr. Schneider continued. "Even with a pause by the Federal Reserve Bank in raising Fed Fund target rates, we expect net-interest margin compression to continue over the next 6 months and we expect to progress in our strategic plan to combat these forces in the near term and produce added value over the intermediate and long term." Net interest income for the quarter ended September 30, 2006 decreased 7% when compared to the same period during 2005. Interest expense increased $283,000, or 17%, partially offset by an increase in interest income of $138,000, or 4%. Net interest rate spread decreased to 2.91% for the third quarter of 2006 from 3.06% for the same period in 2005. Average interest-earning assets decreased 3% to $270.3 million in the quarter ended September 30, 2006 as compared to $279.6 million in the quarter ended September 30, 2005, while the yield on those assets increased 40 basis points to 5.94% compared to 5.54% for the same period in 2005. The decrease in average earning assets is primarily attributable to a $14.4 million decrease in average investment securities, partially offset by a $5.0 million, or 3%, increase in average loans receivable. Average interest-bearing liabilities decreased $9.7 million, while the cost of funds increased 54 basis points to 3.03% from 2.49% for the same period in 2005. The decrease in the average balance of interest-bearing liabilities resulted primarily from an $8.3 million, or 19%, reduction in borrowed funds, and a $4.8 million, or 6%, reduction in average deposits. The reduction in borrowed funds is primarily attributable to the pay off of several short-term advances in the fourth quarter of 2005 and the third quarter of 2006. The reduction in deposits principally occurred in the municipal money management accounts due to the cyclical nature of the tax collections and expenditures of local municipal entities. The sharp increase in cost of funds can be attributed to the 175 basis point increase in short-term interest rates over the past 12 months, combined with a $8.2 million deposit migration from lower earning savings accounts to higher yielding certificates of deposit. Provision for loan losses for the quarter ended September 30, 2006 decreased 100% from the same period in 2005. The Company's ratio of allowance for loan losses to period end loans has decreased to 0.83% at September 30, 2006 from 0.97% at September 30, 2005. Nonperforming loans to period end loans have decreased to 0.69% at September 30, 2006, compared to 0.88% at September 30, 2005. Overall, asset quality has improved significantly over the past two years through a combination of tightened credit administration and more robust collection activities. Non-interest income, net of gains and losses from the sale of securities, loans and foreclosed real estate, decreased 4% to $573,000 for the quarter ended September 30, 2006 compared to $599,000 for the same period in the prior year. The decrease in non-interest income is primarily attributable to decreases in service charges on deposit accounts, loan servicing fees and other charges, commissions and fees of $18,000, $6,000, $8,000, respectively. These decreases were offset by an increase in earnings on bank owned life insurance of $6,000. Operating expenses decreased 4% to $2.4 million for the quarter ended September 30, 2006 compared to $2.5 million for the quarter ended September 30, 2005. During the third quarter of 2006, professional and other services, other expenses and building occupancy decreased $51,000, $44,000 and $27,000, respectively. These decreases were offset by increases of $17,000 and $3,000 in salaries and employee benefits and data processing expenses, respectively. The decrease in professional and other expenses was primarily due to costs associated with a company wide leadership training program and process improvement initiatives that occurred in 2005. The decrease in other expenses was primarily attributable to lower expenses on other real estate owned, a reduction in office supplies and a reduction in costs associated with no cost closing loans. The decrease in building occupancy was primarily due to a reduction of machine maintenance expenses and expenses associated with branch facility improvements that did not recur in 2006. 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 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) For the three months For the nine months ended September 30, ended September 30, (Unaudited) (Unaudited) - ----------------------------------------------------------------------------------------------------------------------- 2006 2005 2006 2005 - ----------------------------------------------------------------------------------------------------------------------- CONDENSED INCOME STATEMENT Interest income $ 3,967 $ 3,829 $ 11,764 $ 11,314 Interest expense 1,910 1,627 5,511 4,652 --------------- -------------- --------------- --------------- Net interest income 2,057 2,202 6,253 6,662 Provision for loan losses - 91 23 229 --------------- -------------- --------------- --------------- Net interest income after provision for loan losses 2,057 2,111 6,230 6,433 Other income 544 449 1,743 1,484 Other expense 2,391 2,493 7,112 7,423 --------------- -------------- --------------- --------------- Income before taxes 210 67 861 494 Provision for income taxes 40 (49) 148 (5) --------------- -------------- --------------- --------------- Net income $ 170 $ 116 $ 713 $ 499 =============== ============== =============== =============== KEY EARNINGS RATIOS Return on average assets 0.23% 0.15% 0.32% 0.22% Return on average equity 3.21% 2.16% 4.53% 3.10% Return on average tangible equity (A) 3.98% 2.71% 5.64% 3.90% Net interest margin (tax equivalent) 3.11% 3.21% 3.12% 3.24% SHARE AND PER SHARE DATA Basic weighted average shares outstanding 2,463,482 2,461,328 2,463,250 2,453,744 Basic earnings per share $ 0.07 $ 0.05 $ 0.29 $ 0.20 Diluted earnings per share 0.07 0.05 0.29 0.20 Cash dividends per share 0.1025 0.1025 0.3075 3.075 Book value per share - - 8.67 8.76 (Unaudited) (Unaudited) (Unaudited) September 30, December 31, September 30, September 30, 2006 2005 2005 2004 --------------- -------------- --------------- --------------- SELECTED BALANCE SHEET DATA Assets $ 298,003 $ 296,948 $ 303,076 $ 303,029 Earning assets 268,550 266,198 272,290 274,207 Total loans 197,463 189,568 185,459 187,788 Deposits 237,921 236,377 240,852 236,731 Borrowed Funds 30,660 31,360 32,360 35,360 Trust Preferred Debt 5,155 5,155 5,155 5,155 Shareholders' equity 21,365 20,928 21,578 21,953 ASSET QUALITY RATIOS Net loan charge-offs (annualized) to average loans 0.06% 0.24% 0.18% 0.17% Allowance for loan losses to period end loans 0.83% 0.89% 0.97% 1.00% Allowance for loan losses to nonperforming loans 120.58% 99.94% 109.75% 63.94% Nonperforming loans to period end loans 0.69% 0.89% 0.88% 1.57% Nonperforming assets to total assets 0.62% 0.82% 0.85% 1.06% (A) Tangible equity excludes intangible assets
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