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): February 05, 2007
Pathfinder Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Federal 000-23601 16-1540137
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(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
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Not Applicable
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(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))
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Section 2 - Financial Information
Item 2.02
On February 5, 2007, Pathfinder Bancorp, Inc. issued a press release disclosing
fourth quarter and year end 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: February 5, 2007 By: /s/ Thomas W. Schneider
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Thomas W. Schneider
President and Chief Executive
Officer
EXHIBIT INDEX
Earnings release dated February 5, 2007 announcing December 31, 2006 earnings.
EXHIBIT 99.1
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 FOURTH QUARTER AND YEAR END EARNINGS
Oswego, New York, February 5, 2007 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $315,000, or $0.13 per share, for the
three months ended December 31, 2006 as compared to a net loss of $37,000, or
$(0.02) per share for the same period in 2005. For the year ended December 31,
2006, the Company reported net income of $1.0 million, or $0.42 per share,
compared to $462,000, or $0.19 per share, for the same period in 2005.
"We are pleased with the improved results for 2006 and a positive earnings trend
despite the compression of net interest rate spread that the Company has
experienced as a result of the inverted interest rate yield curve." stated
Thomas W. Schneider, President and CEO.
"The significant improvement in 2006 earnings performance is the result of the
continued execution by our staff and management of the strategic initiatives set
forth by our Board of Directors." according to Schneider. "We experienced
record growth of our commercial loan portfolio of $13.3 million, or 27%. The
growth of these higher yielding assets was funded by deposit growth of $9.2
million, or 4%, as well as a reduction of lower earning investment securities.
Additionally, the Company increased fee source income by 6% and reduced
operating expenses by 4%."
"We look forward to continuing to deliver quality services to our customers and
progressing our strategic plan to enhance franchise value." Schneider stated.
Net interest income for the year ended December 31, 2006 decreased $416,000, or
5%, when compared to the same period during 2005. Interest expense increased
$1.2 million, or 19%, offset by an increase in interest income of $771,000, or
5%. Net interest rate spread decreased to 2.92% for the year ended December 31,
2006 from 3.07% for the same period in 2005. Average interest-earning assets
decreased 2%, to $273.4 million, for the year ended December 31, 2006 as
compared to $278.8 million for the year ended December 31, 2005. The yield on
average interest earning assets increased 37 basis points to 5.86% compared to
5.49% for the same period in 2005. The decrease in average interest earning
assets is primarily attributable to a $10.7 million decrease in the average
balance of investment securities and a $1.3 million decrease in the average
balance of interest-earning deposits, offset by a $6.5 million increase in the
average balance of the loan portfolio. Average interest-bearing liabilities
decreased $6.7 million, while the cost of funds increased 52 basis points to
2.94% from 2.42% for the same period in 2005. The decrease in the average
balance of interest-bearing liabilities resulted primarily from a $3.8 million,
or 9%, decrease in borrowed funds and a $2.9 million, or 1%, decrease in average
deposits.
Provision for loan losses for the year ended December 31, 2006 decreased 93% to
$23,000 from $311,000 for the same period in 2005. The decrease in the
provision primarily resulted from fewer charge-offs and improving asset quality.
The Company's ratio of allowance for loan losses to period end loans has
decreased to 0.74% at December 31, 2006 from 0.89% at December 31, 2005.
Nonperforming loans to period end loans decreased to 0.63% at December 31, 2006,
compared to 0.89% at December 31, 2005.
Non-interest income, exclusive of net gains and losses from the sale of
securities, loans and foreclosed real estate, increased to $2.4 million for the
year ended December 31, 2006 compared to $2.3 million for the same period in the
prior year. The increase in non-interest income is primarily attributable to a
$73,000 increase in service charges on deposit accounts, a $9,000 increase in
loan servicing fees and a $7,000 increase in the earnings on bank owned life
insurance.
Net gains and losses from the sale of securities, loans and foreclosed real
estate increased $512,000, to a net gain of $219,000 for the year ended December
31, 2006, as compared to a net loss of $293,000 for the year ended December 31,
2005.
Operating expenses decreased 4% from the prior year to $9.7 million from $10.1
million. During 2006, salary and employee benefits, professional and other
services and other expenses decreased $116,000, $167,000 and $150,000,
respectively. The decrease in salaries and employee benefits was primarily due
to a reduction in full time equivalent personnel to 96 at year end December 2006
as compared to 105 at year ended December 2005, combined with a reduction in
stock based compensation expenses. The decrease in professional and other
services was primarily due to a reduction in outside consulting charges, offset
by an increase in advertising costs associated with a promotional mailing
campaign. The decrease in other expenses was primarily due to lower expenses
associated with ORE properties, audits and exams, and a write down of property
and equipment at our former Fulton Branch that occurred in 2005.
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 year
ended December 31, ended December 31,
(Unaudited) (Unaudited)
2006 2005 2006 2005
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CONDENSED INCOME STATEMENT
Interest income $ 4,105 $ 3,784 $ 15,869 $ 15,098
Interest expense 2,032 1,704 7,543 6,356
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Net interest income 2,073 2,080 8,326 8,742
Provision for loan losses - 82 23 311
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Net interest income after provision for loan losses 2,073 1,998 8,303 8,431
Other income 892 540 2,635 2,040
Other expense 2,555 2,621 9,667 10,060
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Income before taxes 410 (83) 1,271 411
Provision for income taxes 95 (46) 243 (51)
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Net income $ 315 $ (37) $ 1,028 $ 462
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KEY EARNINGS RATIOS
Return on average assets 0.42% -0.05% 0.34% 0.15%
Return on average equity 5.82% -0.70% 4.86% 2.16%
Return on average tangible equity (A) 7.16% -0.88% 6.04% 2.72%
Net interest margin (tax equivalent) 3.06% 3.13% 3.10% 3.21%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding 2,465,047 2,463,132 2,463,703 2,456,110
Basic earnings per share $ 0.13 $ (0.02) $ 0.42 $ 0.19
Diluted earnings per share 0.13 (0.02) 0.41 0.19
Cash dividends per share 0.1025 0.1025 0.410 0.410
Book value per share - - 8.46 8.50
(Unaudited)
December 31, December 31, December 31, December 31,
2006 2005 2004 2003
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SELECTED BALANCE SHEET DATA
Assets $ 301,382 $ 296,948 $ 302,037 $ 277,940
Earning assets 274,083 266,198 273,532 254,755
Total loans 203,209 189,568 186,952 188,717
Deposits 245,585 236,377 236,672 206,894
Borrowed Funds 26,360 31,360 35,360 40,960
Trust Preferred Debt 5,155 5,155 5,155 5,000
Shareholders' equity 20,850 20,928 21,826 21,785
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans 0.12% 0.24% 0.33% 0.19%
Allowance for loan losses to period end loans 0.74% 0.89% 0.98% 0.91%
Allowance for loan losses to nonperforming loans 116.97% 99.94% 98.76% 57.32%
Nonperforming loans to period end loans 0.63% 0.89% 0.99% 1.59%
Nonperforming assets to total assets 0.58% 0.82% 0.88% 1.15%
(A) Tangible equity excludes intangible assets