Pathfinder Bancorp, Inc. Announces Financial Results for Fourth Quarter and Full Year 2025

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(Moderate)

Rhea-AI Sentiment

(Neutral)

Rhea-AI Summary

Pathfinder Bancorp (NASDAQ: PBHC) reported a Q4 2025 net loss of $7.0M and a full‑year 2025 net loss of $3.4M, driven by an $11.2M credit loss provision tied to a completed comprehensive review of commercial loans.

The company increased its allowance for credit losses to $29.4M (3.28% of loans), transferred $6.3M of substandard loans to held‑for‑sale, reported nonperforming loans of $27.6M, ended the quarter with $896.7M loans and $1.18B deposits, and declared a $0.10 per share quarterly dividend.

Positive

Allowance for credit losses increased to $29.4M (3.28% of loans)
Quarterly dividend declared of $0.10 per common share

Negative

Fourth quarter net loss of $7.0M due to an $11.2M provision expense
Nonperforming loans rose to $27.6M (from $22.1M year‑ago)
Transferred $6.3M of substandard loans to held‑for‑sale with a $398k pre‑tax LOCOM adjustment

Key Figures

Q4 2025 net loss: $7.0 million (−$1.11 per diluted share) Full-year 2025 net loss: $3.4 million (−$0.54 per diluted share) Credit loss provision: $11.2 million +5 more

8 metrics

Q4 2025 net loss $7.0 million (−$1.11 per diluted share) Fourth quarter 2025 attributable to common shareholders

Full-year 2025 net loss $3.4 million (−$0.54 per diluted share) Year ended December 31, 2025

Credit loss provision $11.2 million Provision expense in Q4 2025 to build reserves

Allowance for credit losses $29.4 million (3.28% of loans) ACL balance at December 31, 2025

Nonperforming loans $27.6 million Balance at December 31, 2025

Total loans $896.7 million Loans outstanding at December 31, 2025

Total deposits $1.18 billion Deposits at December 31, 2025

Net interest margin 3.09% Q4 2025, vs 3.34% in Q3 2025 and 3.02% in Q4 2024

Market Reality Check

Price: $13.68 Vol: Volume 330 vs 20-day aver...

low vol

$13.68 Last Close

Volume Volume 330 vs 20-day average 2,228 (relative volume 0.15) shows limited pre-news activity. low

Technical PBHC at 14.25 trades below its 200-day MA of 15.04, about 20.48% under the 52-week high 17.92 and 6.74% above the 52-week low 13.3506.

Peers on Argus

PBHC shows a slight pre-news gain of 0.07% on very low volume, while close peers...

PBHC shows a slight pre-news gain of 0.07% on very low volume, while close peers are mixed: some modestly negative (e.g., AUBN, LSBK, SSBI) and one slightly positive (UBCP 0.21%). This pattern points to stock-specific drivers rather than a broad regional bank move.

Previous Earnings Reports

5 past events · Latest: Oct 30 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Oct 30	Q3 2025 earnings	Positive	-0.8%	Returned to profit with higher allowance after elevated prior-year credit costs.
Jul 30	Q2 2025 earnings	Negative	-3.8%	Earnings nearly wiped out by $3.1M loss on sale of nonperforming loans.
Apr 30	Q1 2025 earnings	Positive	+5.7%	Strong profit growth with higher NIM, better efficiency, and lower nonperformers.
Jan 31	Q4/FY 2024 earnings	Neutral	+0.1%	Profitable quarter aided by insurance sale; full-year earnings down vs 2023.
Oct 30	Q3 2024 earnings	Negative	-2.5%	Quarterly loss driven by $9.0M provision from loan review despite higher NIM.

Pattern Detected

Earnings releases often see PBHC move in the same direction as the underlying results, with only one recent instance of divergence between earnings tone and next-day price.

Recent Company History

Over the last five earnings cycles, PBHC has oscillated between strong profitability and loss periods tied to credit cleanup. Q3 2024 and Q2 2025 featured sizeable provision-driven losses and nonperforming loan sales, while Q1 2025 showed improved earnings, margin expansion, and better asset quality. Q4 and full-year 2024 delivered profitable results but below 2023. The current Q4/FY 2025 report extends this credit-risk focus with a larger reserve build and higher nonperforming balances.

Historical Comparison

earnings

+2.6 %

Average Historical Move

Historical Analysis

In the past five earnings reports, PBHC’s average next-day move was about 2.58%, with most reactions tracking the positive or negative tone of credit and earnings trends.

Typical Pattern

Recent earnings show a credit-cycle narrative: Q3 2024 loss from a large provision, Q1 2025 rebound with stronger profitability, followed by Q2–Q3 actions to sell or reserve against problem credits. The latest Q4/FY 2025 results continue that progression by sharply increasing reserves after a comprehensive commercial portfolio review.

Market Pulse Summary

This announcement highlights a deliberate clean-up of Pathfinder’s commercial portfolio, with a larg...

Analysis

This announcement highlights a deliberate clean-up of Pathfinder’s commercial portfolio, with a large $11.2M provision lifting the allowance to $29.4M and driving a Q4 net loss of $7.0M. Loans and deposits remain sizable at $896.7M and $1.18B, while NIM held at 3.09%. Recent history shows repeated credit actions and shifting profitability, so investors may watch future reserve trends, nonperforming loan levels, and net interest margin stability across 2026 earnings releases.

Key Terms

allowance for credit losses, nonperforming loans, held-for-sale, lower of cost or market, +3 more

7 terms

allowance for credit losses financial

"increase in the Company’s allowance for credit losses (“ACL”) to $29.4 million"

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

nonperforming loans financial

"Nonperforming loans totaled $27.6 million at December 31, 2025"

Nonperforming loans are loans on which borrowers have stopped making the scheduled interest or principal payments for an extended period (commonly 90 days or more) or are otherwise in serious danger of default. Think of them as IOUs that aren’t being repaid: they tie up a lender’s money, reduce future interest income, and force the lender to hold extra reserves or take losses. For investors, a rising share of nonperforming loans signals weakening credit quality, higher potential losses, and greater risk to a bank’s profitability and capital.

held-for-sale financial

"transferred $6.3 million in substandard loans ... to held-for-sale status"

An asset classified as "held-for-sale" is one a company has decided to sell rather than keep using, and expects to complete the sale within a short time frame. Investors care because the asset is removed from normal operations and is reported at the lower of its book value or estimated sale value, which can change the balance sheet, signal a shift in strategy, and affect expected cash proceeds—think of it as marking an item in a garage for immediate sale rather than keeping it in the attic.

lower of cost or market financial

"recorded a pre-tax loss of $398,000, as a fourth quarter 2025 lower of cost or market"

An accounting rule that requires a company to record inventory at the lower of its original purchase cost or its current market value, so unsellable or devalued stock is not overstated on the balance sheet. For investors, it matters because it can reduce reported assets and profits when prices fall or goods become obsolete, offering a more conservative view of a company’s financial health—like marking down items on a store shelf to reflect what they can actually fetch today.

net interest margin financial

"Net interest income was $10.5 million and net interest margin (“NIM”) was 3.09%"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

basis points financial

"an average yield decrease of 30 basis points on all interest-earning assets"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

efficiency ratio financial

"The efficiency ratio was 74.96% for the fourth quarter 2025"

A measure of how much a company spends to produce each dollar of revenue, usually shown as operating expenses divided by revenue and expressed as a percentage. Think of it as a household’s budget: a lower percentage means more of each dollar earned stays as profit, while a higher number means costs are eating into returns. Investors use it to judge cost control and compare how efficiently companies turn revenue into earnings, especially in banks and financial firms.

AI-generated analysis. Not financial advice.

01/29/2026 - 04:18 PM

Pathfinder enters 2026 with improved earnings outlook following a proactive comprehensive commercial loan review and corresponding risk-based reserve build

OSWEGO, N.Y., Jan. 29, 2026 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the fourth quarter and full year ended December 31, 2025.

The holding company for Pathfinder Bank (“the Bank”) reported a net loss attributable to common shareholders of $7.0 million, or $1.11 per diluted share, in the fourth quarter of 2025, and $3.4 million, or $0.54 per diluted share for full year 2025, reflecting an $11.2 million credit loss provision expense taken to build reserves following completion of a previously announced comprehensive review of the Bank’s commercial loan portfolio. Net income attributable to common shareholders was $626,000, or $0.10 per diluted share, in the third quarter of 2025, $3.9 million or $0.63 per diluted share in the fourth quarter of 2024, and $3.4 million, or $0.54 per diluted share for full year 2024.

Fourth Quarter and Full Year 2025 Highlights and Key Developments

The net loss resulted primarily from an $11.2 million credit loss provision expense in the quarter, reflecting a $10.8 million increase in the Company’s allowance for credit losses (“ACL”) to $29.4 million, or 3.28% of loans, at December 31, 2025. The risk-based reserve build reflects the Company’s forward-looking assessment of loans with unique risk characteristics identified through the comprehensive review of all commercial relationships with exposures of $500,000 or more, representing approximately 90% of the commercial portfolio, which was announced in October and completed in December 2025.
The Company transferred $6.3 million in substandard loans associated with one local commercial relationship to held-for-sale status and recorded a pre-tax loss of $398,000, as a fourth quarter 2025 lower of cost or market adjustment (“LOCOM HFS adjustment”), based on active sale negotiations. Nonperforming loans totaled $27.6 million at December 31, 2025, compared to $23.3 million on September 30, 2025 and $22.1 million on December 31, 2024.
Loans totaled $896.7 million at December 31, 2025, following the movement of $6.3 million in substandard loans to held-for-sale status, compared to $898.5 million on September 30, 2025 and $919.0 million on December 31, 2024. Commercial loans were $543.7 million or 60.6% of total loans at December 31, 2025, following the reclassification of loans to held-for-sale, compared to $543.7 million on September 30, 2025 and $539.7 million on December 31, 2024.
Deposits totaled $1.18 billion at December 31, 2025, down from $1.23 billion on September 30, 2025 and $1.20 billion on December 31, 2024, primarily due to runoff of the Bank’s higher-cost brokered, and other time deposits. As a percentage of total deposits, core deposits expanded to 79.78% at December 31, 2025, compared to 78.37% on September 30, 2025 and 76.86% on December 31, 2024.
Net interest income was $10.5 million and net interest margin (“NIM”) was 3.09% in the fourth quarter of 2025. For the linked quarter, net interest income was $11.6 million and NIM was 3.34%, including loan and investment prepayment penalties contributing a combined $260,000 to net interest income and 7 basis points to NIM. In the year-ago period, net interest income was $10.4 million and NIM was 3.02%. For the full year 2025, net interest income was $44.3 million and NIM was 3.21% compared to net interest income of $41.0 million and NIM of 2.98% in 2024.
Noninterest income was $1.3 million for the fourth quarter 2025, including the LOCOM HFS adjustment’s $398,000 impact. Noninterest income was $1.5 million in the linked quarter and $4.9 million in the year-ago quarter including a $3.2 million gain from the insurance agency sold in October 2024.
Noninterest expense of $9.2 million represented 2.51% of average assets on an annualized basis, for the fourth quarter of 2025 compared to $8.9 million or 2.40% of average assets in the linked quarter and $8.5 million or 2.33% of average assets in the year-ago quarter. For full-year 2025 and 2024, noninterest expense represented 2.36% and 2.37% of average assets, respectively.
The efficiency ratio was 74.96% for the fourth quarter 2025, compared to 68.78% in the linked quarter and 72.25% in the year-ago quarter. For full-year 2025 and 2024, the efficiency ratio was 69.12% and 72.82%, respectively⁽¹⁾.
Pre-tax, pre-provision (“PTPP”) net income was $3.1 million for the fourth quarter 2025, compared to $4.1 million in the linked quarter and $3.3 million in the year-ago quarter⁽¹⁾.
Quarterly cash dividends payable to common stockholders of $0.10 per share were declared on December 22, 2025 and payable on February 6, 2026.

“We believe the legacy commercial credit quality issues that have previously contributed to elevated earnings volatility have been substantially addressed following the completion of our comprehensive portfolio review,” President and Chief Executive Officer James Dowd said.

“Our fourth quarter and full-year results reflect a meaningful, risk-based reserve build based on the Company’s forward-looking assessment of expected credit losses, following completion of the comprehensive loan portfolio review announced in October,” Dowd added. “This action is aligned with the more rigorous approach to managing credit risk that our current management team began implementing over a year ago, including enhanced portfolio monitoring, strengthened policy standards, more stringent underwriting criteria, and an increased focus on new commercial originations that emphasize profitable, full-service banking relationships with high-quality small- and mid-sized businesses, complementing our healthy local retail lending operations.

We believe these actions position the Company to generate more consistent earnings during 2026, with reduced incremental reserve pressure, and support growth of the Company’s capital ratios in 2026. These actions also enhance our flexibility to prudently evaluate capital allocation alternatives over time and to deploy the Bank’s ample funding to support Central New York businesses and consumers, ultimately supporting the long-term creation of shareholder value.”

Portfolio Review, Reserve Build, and Credit Culture
Over a year ago, Pathfinder began taking significant steps to enhance its credit risk management processes, including a third quarter 2024 review of nonperforming commercial loans and purchased loan pools. In the third quarter of 2025, the Company recorded an increase in the ACL by 16.7% in conjunction with its decision to initiate a comprehensive review of every performing and nonperforming loan associated with all 198 commercial relationships having exposures of $500,000 or more, representing approximately 90% of the commercial loan portfolio. Upon completion of the comprehensive portfolio review in December 2025, the Company identified 47 legacy commercial relationships, with unique risk characteristics and an average principal balance of $1.9 million. Based on management’s forward-looking assessment of collateral dependent loans with unique risk characteristics and the expected credit losses associated with these relationships, the Company recorded an additional $11.4 million in provision for loans in the fourth quarter of 2025, increasing the ACL to $29.4 million, or 3.28% of total loans, as of December 31, 2025.

Now, with measures taken in the fourth quarter of 2025 to substantially address legacy commercial credit issues, management is confident that it has the team, policies, procedures and culture in place to strengthen its commercial credit quality while maintaining the historic health of its consumer and residential loan portfolio.

“Pathfinder has embraced an important cultural shift through the implementation of systemic changes to improve credit risk management,” explained Senior Vice President and Chief Credit Officer Joseph Serbun. “These changes include a team-based approach to dynamic and proactive monitoring of commercial loans and relationships, adherence to rigorous policy standards with limited exceptions, more stringent underwriting criteria, and enhanced structural processes designed to support stronger decision-making at origination and improve the lifetime performance of loans. In addition, we have dedicated personnel and resources focused exclusively on the loan workout process, enabling more focused and productive resolutions of problem credits, including the legacy relationships identified in our recently completed portfolio review.”

Net Interest Income and Net Interest Margin
Fourth quarter 2025 net interest income was $10.5 million, a decrease of $1.1 million, or 9.4%, from the third quarter of 2025. A decrease in interest and dividend income of $1.4 million in the fourth quarter of 2025 from the linked quarter was primarily attributed to greater interest and dividend income in the third quarter 2025 that benefited from $260,000 in loan and securities prepayment penalties in the linked quarter, as well as what the Company views as a temporary reduction of securities balances in the fourth quarter of 2025 and an average yield decrease of 30 basis points on all interest-earning assets. A 35 basis point decrease in average loan yields comparing the fourth quarter of 2025 to the linked quarter reflected an elevated third quarter 2025 average loan yield that benefited by 9 basis points from loan prepayment penalty income. A 20 basis point decrease in taxable securities average yield when comparing the fourth quarter of 2025 to the linked quarter reflected an elevated third quarter 2025 average yield that benefited by 5 basis points from investment prepayment penalty income. In addition, average balances of loans, taxable securities and tax-exempt securities declined by $1.8 million, $30.6 million and $194,000, respectively when comparing the fourth quarter of 2025 to the linked quarter. Decreases in income from loan interest, taxable securities, and tax-exempt securities of $816,000, $626,000, and $70,000, respectively, were partially offset by increases in income from dividends and federal funds sold of $39,000 and $31,000, respectively when comparing the fourth quarter of 2025 to the linked quarter. A decrease in interest expense in the fourth quarter of 2025 from the third quarter of 2025 of $352,000 was attributed to a 3 basis point decline in the average cost of total interest-bearing liabilities, including reductions of 3 basis points in the average cost of interest-bearing deposits reflecting lower average brokered and other time deposits outstanding, as well as a 3 basis point decrease in the average cost of borrowings and lower average borrowings outstanding.

NIM was 3.09% in the fourth quarter of 2025, compared to 3.34% in the third quarter of 2025. The decrease of 25 basis points reflected an elevated third quarter 2025 NIM that benefited by 7 basis points from loan and investment prepayment penalties, as well as lower average interest-bearing deposit costs in the fourth quarter of 2025 and what the Company views as a temporary reduction of investment securities balances.

Fourth quarter 2025 net interest income was $10.5 million, an increase of $133,000, or 1.3%, from the year-ago period. A decrease in interest and dividend income of $1.2 million was attributed to what management views as a temporary reduction of securities balances, as well as declines in the average yields on total interest-earning assets, loans, taxable investment securities, tax exempt investment securities, and fed funds sold and interest-earning deposits of 31 basis points, 13 basis points, 56 basis points, 54 basis points, and 316 basis points, respectively. Average loan balances also declined by $15.9 million from the year-ago period, with a corresponding decrease in loan interest income of $540,000. A decrease in interest expense of $1.4 million was primarily attributed to a 47 basis point decline in the average cost of total interest-bearing liabilities, including reductions of 44 basis points in the average cost of interest bearing deposits reflecting lower average brokered deposits outstanding, as well as 115 basis points decline in the average cost of borrowings and lower average borrowings outstanding.

NIM was 3.09% in the fourth quarter of 2025, compared to 3.02% in the fourth quarter of 2024. NIM expansion in 2025 over the year-ago period was attributed to deliberate loan and deposit pricing adjustments, core deposit growth, and reduced borrowings, partially offset by lower earning asset yields.

Noninterest Income
Fourth quarter 2025 noninterest income includes a $398,000 lower of cost or market adjustment (“LOCOM HFS adjustment”) in connection with loans reclassified as held-for-sale. The Company is engaged in active sale negotiations with a potential buyer to sell substandard loans associated with one commercial relationship dating back to 2017.

Fourth quarter 2025 noninterest income also includes a loss on the sale of premises and equipment of $37,000 for the disposal of a rental office property that was not occupied by the Bank and recently sold to a non-profit tenant, as well as a reduction of $115,000 for final settlement costs associated with the insurance agency business sold in October 2024.

Fourth quarter 2025 noninterest income totaled $1.3 million, reflecting the LOCOM HFS adjustment, the loss on premises and equipment, and final settlement costs associated with the 2024 insurance agency sale. Third quarter 2025 noninterest income was $1.5 million. Fourth quarter 2024 noninterest income totaled $4.9 million including $3.2 million in pre-tax gains from the 2024 insurance agency sale.

Compared to the linked quarter, fourth quarter 2025 noninterest income reflected decreases of $105,000 in debit card interchange fees, $56,000 in earnings and gain on BOLI, and $23,000 in service charges on deposit accounts. Compared to the linked quarter, fourth quarter 2025 noninterest income also reflected increases of $522,000 in net unrealized gains on marketable equity securities and $12,000 in gains on sales of loans and foreclosed real estate, a decrease of $9,000 in net realized losses on sales and redemptions of investment securities, and a decrease in loan servicing fees of $38,000.

Compared to the year-ago period, fourth quarter 2025 noninterest income reflected an increase of $61,000 in earnings and gains on BOLI and decreases of $153,000 in debit card interchange fees and $24,000 in service charges on deposit accounts. In addition, fourth quarter 2025 noninterest income, compared to the year-ago period, included increases of $501,000 in net unrealized gains on marketable equity securities and $94,000 in gains on sales of loans and foreclosed real estate, an increase of $252,000 in net realized losses on sales and redemptions of investment securities, and a decrease of $21,000 in loan servicing fees.

Noninterest Expense
Noninterest expense totaled $9.2 million in the fourth quarter of 2025, increasing $213,000 from $8.9 million in the third quarter of 2025 and $606,000 from $8.5 million in the fourth quarter of 2024.

Salaries and benefits were $4.9 million in the fourth quarter of 2025, decreasing $81,000 from the linked quarter and increasing $801,000 from the year-ago period. The decrease from the third quarter of 2025 was attributable to a $36,000 increase in FASB91 payroll deferrals resulting from increased loan originations and lower employee benefit expenses in the fourth quarter of 2025. The increase from the fourth quarter of 2024 was primarily driven by general salary increases and a change in workforce composition in 2025, as the Company strategically added more senior, key personnel across the organization.

Building and occupancy costs were $1.3 million in the fourth quarter of 2025, decreasing $62,000 from the linked quarter and increasing $83,000 from the year-ago quarter. The decrease from the linked quarter reflected modest reductions across all building and occupancy expense categories, while the increase from the year-ago period was primarily attributed to higher periodic maintenance, utility and property tax expenses.

Data processing expense was $698,000 in the fourth quarter of 2025, increasing $57,000 from the linked quarter and decreasing $23,000 from the year-ago period. The increase from the linked quarter reflected higher costs primarily associated with check and ATM processing charges, while the decrease from the year-ago period was driven by lower data processing supplies, ATM processing, and internet banking service expenses.

Other expenses were $798,000 in the fourth quarter of 2025, increasing $196,000 from the linked quarter and $54,000 from the year-ago period. The fourth quarter 2025 increase primarily related to fees on the loans held- for-sale.

Annualized noninterest expense represented 2.51% of average assets in the fourth quarter of 2025, compared to 2.40% and 2.33% in the linked and year-ago periods. The efficiency ratio was 74.96% in the fourth quarter of 2025 compared to 68.78% and 72.25% in the linked and year-ago periods, respectively⁽²⁾.

Net Income
For the fourth quarter of 2025, net loss attributable to common shareholders was $7.0 million, or $1.12 per basic share and $1.11 per diluted share, compared to net income available to common shareholders of $626,000, or $0.10 per basic and diluted share, in the linked quarter and $3.9 million or $0.63 per basic and diluted share in the year-ago period.

Statement of Financial Condition
As of December 31, 2025, the Company’s statement of financial condition reflects total assets of $1.43 billion, compared to $1.47 billion on each of September 30, 2025 and December 31, 2024.

Loans totaled $896.7 million on December 31, 2025, following the $6.3 million reclassification of substandard loans to held-for-sale, decreasing $1.9 million or 0.2% during the fourth quarter 2025 and $22.3 million or 2.4% from one year prior. Consumer and residential loans totaled $354.3 million on December 31, 2025, decreasing $1.8 million or 0.5% during the fourth quarter 2025 and $26.6 million or 7.0% from one year prior. Commercial loans totaled $543.7 million on December 31, 2025, following the movement of loans to held-for-sale, in line with outstanding balances on September 30, 2025 and decreasing $4.0 million or 0.7% from one year prior.

Investment securities totaled $413.2 million on December 31, 2025, decreasing $29.2 million or 6.6% in the fourth quarter 2025. The decrease from the linked quarter reflects $10.0 million in calls and $19.2 million of maturities and scheduled amortization. Investment securities decreased by $18.9 million, or 4.4%, from December 31, 2024.

With respect to liabilities, deposits totaled $1.18 billion on December 31, 2025, decreasing $41.2 million or 3.4% during the fourth quarter 2025 and $20.7 million or 1.7% from one year prior. The decrease from the linked quarter reflects runoff of the Bank’s higher-cost brokered deposits, and decreases in both MMDA and time deposits. The decrease from the previous year was primarily driven by runoff of the Bank’s higher-cost brokered deposits and lower time deposits, partially offset by higher MMDA deposits.

Shareholders’ equity totaled $121.0 million on December 31, 2025, decreasing $5.4 million or 4.3% in the fourth quarter 2025 and $516,000 or 0.4% from one year prior. The fourth quarter 2025 decrease primarily reflected a $7.7 million decrease in retained earnings, partially offset by a $1.9 million decrease in accumulated other comprehensive loss (“AOCL”) and a $416,000 increase in additional paid in capital.

Asset Quality
The Company’s asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach.

Nonperforming loans were $27.6 million, or 3.07% of total loans on December 31, 2025, compared to $23.3 million or 2.59% on September 30, 2025, and $22.1 million or 2.40% on December 31, 2024. The increase primarily reflected certain legacy commercial loans moving to nonperforming status, including loans that may have been less than 90 days delinquent but were identified as having unique risk characteristics through the Company’s 2025 portfolio review.

Net charge-offs (“NCOs”) after recoveries declined to $604,000, or an annualized 0.27% of average loans in the fourth quarter of 2025, from $670,000 or 0.30% in the linked quarter and $1.0 million or 0.44% in the year-ago period.

Provision for credit loss expense was $11.2 million in the fourth quarter of 2025, reflecting the $10.8 million increase in the Company’s ACL in the fourth quarter of 2025 in conjunction with December’s completion of the Company’s previously announced portfolio review. The provision was $3.5 million and $988,000 in the linked and year-ago quarters, respectively.

The Company believes it is sufficiently collateralized and reserved, with an ACL of $29.4 million on December 31, 2025, compared to $18.7 million on September 30, 2025 and $17.2 million on December 31, 2024. As a percentage of total loans, ACL represented 3.28% on December 31, 2025, 2.08% on September 30, 2025, and 1.88% on December 31, 2024.

Liquidity
The Company has diligently ensured a strong liquidity profile as of December 31, 2025 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership.

The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.18 billion on December 31, 2025, compared to $1.23 billion on September 30, 2025 and $1.20 billion on December 31, 2024. Core deposits represented 79.78% of total deposits on December 31, 2025, compared to 78.37% of total deposits on September 30, 2025 and 76.86% on December 31, 2024. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability.

On December 31, 2025, Pathfinder Bancorp had an available additional funding capacity of $157.5 million with the Federal Home Loan Bank of New York and $13.5 million with the Federal Reserve Bank, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $15.0 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements.

Cash Dividend Declared
On December 22, 2025, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock.

In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders as of January 16, 2026 will be eligible for the dividend, which is scheduled for disbursement on February 6, 2026. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value.

Evaluating the Company’s market performance, the closing stock price as of December 31, 2025 stood at $14.11 per share. This positions the annualized dividend yield at 2.83%.

About Pathfinder Bancorp, Inc.
Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com.

Forward-Looking Statements
Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, but are not limited to, statements regarding expected earnings normalization, future credit costs, the adequacy of the allowance for credit losses, reduced incremental reserve pressure, potential expansion of regulatory capital ratios, dividend sustainability, liquidity capacity, funding availability, and the Company’s business strategy and outlook for 2026 and beyond.

Forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of numerous factors. Although it is not possible to identify all factors that may cause actual results to differ, such include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in prevailing interested rates; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; the risk that actual credit losses, borrower performance, collateral values, or loan migration patterns differ from management’s forward-looking estimates or assumptions; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels or changes in deposit mix that may necessitate increased borrowing to fund loans and investments; access to wholesale or other funding sources; operational risks including, cybersecurity, fraud, model risk and natural disasters; credit risk management; and the risk that the Company may not be successful in the implementation of its business strategy.

Additional factors that could cause actual results to differ materially are described in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov. While the Company believes it has identified and discussed the material risks affecting its business, there may be additional risks and uncertainties not currently known or considered immaterial that could affect the forward-looking statements made herein.

Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of future results. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable law.

Notes on Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures, including, but not limited to the efficiency ratio, pre-tax, pre-provision net income, tangible common equity, tangible book value per share, and return on average tangible common equity. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable GAAP measure.

The Company believes these non-GAAP financial measures provide useful information to investors by assisting in the evaluation of the Company’s operating performance, operating efficiency, financial condition, and trends, and by facilitating comparisons with prior periods and with peer institutions. In particular, management uses these measures to assess expense control relative to revenue generation, underlying profitability excluding certain non-recurring or non-operational items, and capital strength on a basis that it believes is meaningful for internal planning and external analysis.

These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and should be considered only in conjunction with the Company’s GAAP financial results.

Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures within this release.

PATHFINDER BANCORP, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)

	2025												2024
SELECTED BALANCE SHEET DATA:	December 31,			September 30,			June 30,			March 31,			December 31,
ASSETS:
Cash and due from banks	$	11,521		$	19,317		$	16,183		$	18,606		$	13,963
Interest-earning deposits		19,649			21,255			15,292			32,862			17,609
Total cash and cash equivalents		31,170			40,572			31,475			51,468			31,572
Available-for-sale securities, at fair value		276,815			294,457			300,951			284,051			269,331
Held-to-maturity securities, at amortized cost		130,324			142,538			157,892			155,704			158,683
Marketable equity securities, at fair value		6,034			5,352			4,881			4,401			4,076
Federal Home Loan Bank stock, at cost		2,560			3,488			5,278			2,906			4,590
Loans held-for-sale		5,900			-			3,161			-			-
Loans, net of deferred fees		896,670			898,520			909,723			912,150			918,986
Less: Allowance for credit losses		29,436			18,654			15,983			17,407			17,243
Loans receivable, net		867,234			879,866			893,740			894,743			901,743
Premises and equipment, net		18,008			18,760			19,047			19,233			19,009
Operating lease right-of-use assets		1,098			1,124			1,115			1,356			1,391
Finance lease right-of-use assets		15,885			16,082			16,280			16,478			16,676
Accrued interest receivable		6,328			6,498			6,889			6,748			6,881
Foreclosed real estate		137			137			83			-			-
Intangible assets, net		5,362			5,518			5,675			5,832			5,989
Goodwill		5,056			5,056			5,056			5,056			5,056
Bank owned life insurance		31,374			31,145			31,045			24,889			24,727
Other assets		21,867			21,675			22,551			22,472			25,150
Total assets	$	1,425,152		$	1,472,268		$	1,505,119		$	1,495,337		$	1,474,874

LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Interest-bearing deposits	$	987,471		$	1,028,782		$	1,030,155		$	1,061,166		$	990,805
Noninterest-bearing deposits		196,377			196,299			191,732			203,314			213,719
Total deposits		1,183,848			1,225,081			1,221,887			1,264,480			1,204,524
Short-term borrowings		44,000			38,000			75,500			27,000			61,000
Long-term borrowings		14,074			18,702			20,977			17,628			27,068
Subordinated debt		30,155			30,258			30,206			30,156			30,107
Accrued interest payable		424			1,134			813			844			546
Operating lease liabilities		1,304			1,326			1,313			1,560			1,591
Finance lease liabilities		16,390			16,479			16,566			16,655			16,745
Other liabilities		13,990			14,949			13,444			12,118			11,810
Total liabilities		1,304,185			1,345,929			1,380,706			1,370,441			1,353,391
Shareholders' equity:
Voting common stock shares issued and outstanding		4,805,361			4,794,225			4,788,109			4,761,182			4,745,366
Voting common stock	$	48		$	48		$	48		$	48		$	47
Non-voting common stock		14			14			14			14			14
Additional paid in capital		54,390			53,974			53,645			53,103			52,750
Retained earnings		71,882			79,560			79,564			80,163			77,816
Accumulated other comprehensive loss		(5,367	)		(7,257	)		(8,858	)		(8,432	)		(9,144	)
Total Pathfinder Bancorp, Inc. shareholders' equity		120,967			126,339			124,413			124,896			121,483
Total liabilities and shareholders' equity	$	1,425,152		$	1,472,268		$	1,505,119		$	1,495,337		$	1,474,874

The above information is unaudited and preliminary, based on the Company's data available at the time of presentation.

	Years Ended December 31,						2025												2024
SELECTED INCOME STATEMENT DATA:	2025			2024			Q4			Q3			Q2			Q1			Q4
Interest and dividend income:
Loans, including fees	$	53,560		$	52,705		$	12,983		$	13,799		$	13,106		$	13,672		$	13,523
Debt securities:
Taxable		20,695			22,319			4,681			5,307			5,522			5,185			5,312
Tax-exempt		1,707			1,920			385			455			465			402			445
Dividends		241			620			83			44			21			93			164
Federal funds sold and interest-earning deposits		450			793			162			131			68			89			82
Total interest and dividend income		76,653			78,357			18,294			19,736			19,182			19,441			19,526
Interest expense:
Interest on deposits		27,988			30,493			6,768			6,957			7,318			6,945			7,823
Interest on short-term borrowings		1,971			4,176			365			566			495			545			700
Interest on long-term borrowings		387			733			123			127			72			65			136
Interest on subordinated debt		1,972			1,966			528			486			483			475			490
Total interest expense		32,318			37,368			7,784			8,136			8,368			8,030			9,149
Net interest income		44,335			40,989			10,510			11,600			10,814			11,411			10,377
Provision for (benefit from) credit losses:
Loans		16,403			11,106			11,385			3,341			1,173			504			988
Held-to-maturity securities		(81	)		(95	)		(86	)		-			5			-			(5	)
Unfunded commitments		20			(38	)		(105	)		153			19			(47	)		5
Total provision for credit losses		16,342			10,973			11,194			3,494			1,197			457			988
Net interest income after provision for credit losses		27,993			30,016			(684	)		8,106			9,617			10,954			9,389
Noninterest income:
Service charges on deposit accounts		1,539			1,436			381			404			380			374			405
Earnings and gain on bank owned life insurance		834			854			230			286			156			162			169
Loan servicing fees		386			375			75			113			97			101			96
Net realized (losses) gains on sales and redemptions of investment securities		(23	)		(71	)		(3	)		(12	)		-			(8	)		249
(Loss) gain on asset sale^{1 & 2}		(115	)		3,169			(115	)		-			-			-			3,169
Net unrealized gains on marketable equity securities		1,450			197			667			145			420			218			166
Gains on sales of loans and foreclosed real estate		402			187			133			121			83			65			39
Fair value adjustment to loans held-for-sale³		(3,462	)		-			(398	)		-			(3,064	)		-			-
Loss on sale of premises and equipment		(37	)		(13	)		(37	)		-			-			-			-
Debit card interchange fees		510			875			112			217			180			1			265
Insurance agency revenue¹		-			1,073			-			-			-			-			49
Other charges, commissions & fees		1,011			1,479			268			229			230			284			299
Total noninterest (loss) income		2,495			9,561			1,313			1,503			(1,518	)		1,197			4,906
Noninterest expense:
Salaries and employee benefits		18,904			17,810			4,924			5,005			4,525			4,450			4,123
Building and occupancy		5,313			4,118			1,337			1,399			1,230			1,347			1,254
Data processing		2,672			2,471			698			641			667			666			721
Professional and other services		2,750			3,686			657			709			778			606			608
Advertising		459			604			155			86			77			141			218
FDIC assessments		604			916			204			171			-			229			231
Audits and exams		475			539			169			132			60			114			123
Amortization expense		627			293			157			156			157			157			27
Insurance agency expense¹		-			1,281			-			-			-			-			456
Community service activities		70			130			21			10			28			11			19
Foreclosed real estate expenses		106			102			30			26			29			21			20
Other expenses		2,601			2,467			798			602			510			691			744
Total noninterest expense		34,581			34,417			9,150			8,937			8,061			8,433			8,544
(Loss) income before provision for income taxes		(4,093	)		5,160			(8,521	)		672			38			3,718			5,751
(Benefit) provision for income taxes		(676	)		332			(1,473	)		46			7			744			492
Net (loss) income attributable to noncontrolling interest and Pathfinder Bancorp, Inc.		(3,417	)		4,828			(7,048	)		626			31			2,974			5,259
Net income attributable to noncontrolling interest¹		-			1,445			-			-			-			-			1,352
Net (loss) income attributable to Pathfinder Bancorp Inc.	$	(3,417	)	$	3,383		$	(7,048	)	$	626		$	31		$	2,974		$	3,907
Voting Earnings per common share - basic	$	(0.54	)	$	0.54		$	(1.12	)	$	0.10		$	-		$	0.48		$	0.63
Voting Earnings per common share - diluted⁴	$	(0.54	)	$	0.54		$	(1.11	)	$	0.10		$	-		$	0.47		$	0.63
Series A Non-Voting Earnings per common share- basic	$	(0.54	)	$	0.54		$	(1.12	)	$	0.10		$	-		$	0.48		$	0.63
Series A Non-Voting Earnings per common share- diluted⁴	$	(0.54	)	$	0.54		$	(1.11	)	$	0.10		$	-		$	0.47		$	0.63
Dividends per common share (Voting and Series A Non-Voting)	$	0.40		$	0.40		$	0.10		$	0.10		$	0.10		$	0.10		$	0.10

¹Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC (“Agency”) the Company is required to consolidate 100% of the Agency within the consolidated financial statements. The Company sold its 51% membership interest in the Agency in October 2024.
² The Q4 2024 $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company’s 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest. The Q4 2025 $115,000 consolidated loss on asset sale represents final settlement costs related to the sale of the Agency.
³ The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations.
⁴ Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously.

The above information is unaudited and preliminary, based on the Company's data available at the time of presentation.

	Years Ended December 31,						2025													2024
FINANCIAL HIGHLIGHTS:	2025			2024			Q4			Q3			Q2			Q1			Q4
Selected Ratios:
Return on average assets		-0.23	%		0.23	%		-1.95	%		0.17	%		0.01	%		0.81	%		1.07	%
Return on average common equity		-2.71	%		2.75	%		-21.90	%		1.98	%		0.10	%		9.64	%		12.85	%
Return on average equity		-2.71	%		2.75	%		-21.90	%		1.98	%		0.10	%		9.64	%		12.85	%
Return on average tangible common equity¹		-2.97	%		2.91	%		-23.66	%		2.17	%		0.11	%		10.52	%		14.17	%
Net interest margin		3.21	%		2.98	%		3.09	%		3.34	%		3.11	%		3.31	%		3.02	%
Loans / deposits		75.74	%		76.29	%		75.74	%		73.34	%		74.45	%		72.14	%		76.29	%
Core deposits/deposits²		79.78	%		76.86	%		79.78	%		78.37	%		78.47	%		78.31	%		76.86	%
Annualized non-interest expense / average assets		2.36	%		2.37	%		2.51	%		2.40	%		2.18	%		2.33	%		2.33	%
Commercial real estate / risk-based capital³		191.32	%		186.73	%		191.32	%		174.67	%		183.34	%		182.62	%		186.73	%
Efficiency ratio¹		69.12	%		72.82	%		74.96	%		68.78	%		65.66	%		67.19	%		72.25	%

Other Selected Data:
Average yield on loans		5.89	%		5.83	%		5.74	%		6.09	%		5.75	%		5.97	%		5.87	%
Average cost of interest bearing deposits		2.74	%		3.12	%		2.68	%		2.71	%		2.81	%		2.76	%		3.12	%
Average cost of total deposits, including non-interest bearing		2.30	%		2.63	%		2.24	%		2.28	%		2.37	%		2.29	%		2.59	%
Deposits/branch	$	98,654		$	100,377		$	98,654		$	102,090		$	101,824		$	105,373		$	100,377
Pre-tax, pre-provision net income¹	$	15,447		$	12,848		$	3,056		$	4,057		$	4,216		$	4,118		$	3,282
Total revenue¹	$	50,028		$	47,265		$	12,206		$	12,994		$	12,277		$	12,551		$	11,826

Share and Per Share Data:
Cash dividends per share	$	0.40		$	0.40		$	0.10		$	0.10		$	0.10		$	0.10		$	0.10
Book value per common share	$	19.56		$	19.83		$	19.56		$	20.46		$	20.17		$	20.33		$	19.83
Tangible book value per common share¹	$	17.87		$	18.03		$	17.87		$	18.75		$	18.43		$	18.56		$	18.03
Basic weighted average shares outstanding - Voting		4,777			4,714			4,799			4,790			4,769			4,749			4,733
Diluted weighted average shares outstanding - Voting		4,831			4,714			4,859			4,842			4,811			4,819			4,733
Basic earnings per share - Voting⁴	$	(0.54	)	$	0.54		$	(1.12	)	$	0.10		$	-		$	0.48		$	0.63
Diluted earnings per share - Voting^{4 & 5}	$	(0.54	)	$	0.54		$	(1.11	)	$	0.10		$	-		$	0.47		$	0.63
Basic and diluted weighted average shares outstanding - Series A Non-Voting		1,380			1,380			1,380			1,380			1,380			1,380			1,380
Basic earnings per share - Series A Non-Voting⁴	$	(0.54	)	$	0.54		$	(1.12	)	$	0.10		$	-		$	0.48		$	0.63
Diluted earnings per share - Series A Non-Voting^{4 & 5}	$	(0.54	)	$	0.54		$	(1.11	)	$	0.10		$	-		$	0.47		$	0.63
Common shares outstanding at period end		6,186			6,126			6,186			6,175			6,168			6,141			6,126

Pathfinder Bancorp, Inc. Capital Ratios:
Company tangible common equity to tangible assets¹		7.81	%		7.54	%		7.81	%		7.92	%		7.61	%		7.68	%		7.54	%
Company Total Core Capital (to Risk-Weighted Assets)		15.43	%		15.66	%		15.43	%		15.81	%		15.97	%		15.89	%		15.66	%
Company Tier 1 Capital (to Risk-Weighted Assets)		12.15	%		12.00	%		12.15	%		12.17	%		12.31	%		12.24	%		12.00	%
Company Tier 1 Common Equity (to Risk-Weighted Assets)		11.64	%		11.51	%		11.64	%		11.68	%		11.81	%		11.75	%		11.51	%
Company Tier 1 Capital (to Assets)		8.47	%		8.64	%		8.47	%		8.79	%		8.75	%		8.82	%		8.64	%

Pathfinder Bank Capital Ratios:
Bank Total Core Capital (to Risk-Weighted Assets)		14.66	%		14.65	%		14.66	%		14.71	%		14.87	%		14.86	%		14.65	%
Bank Tier 1 Capital (to Risk-Weighted Assets)		13.39	%		13.40	%		13.39	%		13.45	%		13.62	%		13.61	%		13.40	%
Bank Tier 1 Common Equity (to Risk-Weighted Assets)		13.39	%		13.40	%		13.39	%		13.45	%		13.62	%		13.61	%		13.40	%
Bank Tier 1 Capital (to Assets)		9.36	%		9.64	%		9.36	%		9.72	%		9.68	%		9.80	%		9.64	%

¹ Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
² Non-brokered deposits excluding certificates of deposit of $250,000 or more.
³ Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital.
⁴ Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares.
⁵ Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously.

The above information is unaudited and preliminary, based on the Company's data available at the time of presentation.

	Years Ended December 31,						2025													2024
ASSET QUALITY:	2025			2024			Q4			Q3			Q2			Q1			Q4
Total loan charge-offs	$	5,042		$	10,183		$	767		$	923		$	2,844		$	508		$	1,191
Total recoveries		831			345			163			253			247			168			171
Net loan charge-offs		4,211			9,838			604			670			2,597			340			1,020
Allowance for credit losses at period end		29,436			17,243			29,436			18,654			15,983			17,407			17,243
Nonperforming loans at period end		27,561			22,084			27,561			23,305			11,689			13,232			22,084
Nonperforming assets at period end	$	27,698		$	22,084		$	27,698		$	23,442		$	11,772		$	13,232		$	22,084
Annualized net loan charge-offs to average loans		0.46	%		1.09	%		0.27	%		0.30	%		1.14	%		0.15	%		0.44	%
Allowance for credit losses to period end loans		3.28	%		1.88	%		3.28	%		2.08	%		1.76	%		1.91	%		1.88	%
Allowance for credit losses to nonperforming loans		106.80	%		78.08	%		106.80	%		80.04	%		136.74	%		131.55	%		78.08	%
Nonperforming loans to period end loans		3.07	%		2.40	%		3.07	%		2.59	%		1.28	%		1.45	%		2.40	%
Nonperforming assets to period end assets		1.94	%		1.50	%		1.94	%		1.59	%		0.78	%		0.88	%		1.50	%

	2025												2024
LOAN COMPOSITION:	December 31,			September 30,			June 30,			March 31,			December 31,
1-4 family first-lien residential mortgages	$	239,692		$	238,975		$	240,833		$	243,854		$	251,373
Residential construction		2,039			1,406			3,520			3,162			4,864
Commercial real estate		380,311			371,683			381,575			381,479			377,619
Commercial lines of credit		75,371			79,021			75,487			65,074			67,602
Other commercial and industrial		81,210			86,687			85,578			91,644			89,800
Paycheck protection program loans		63			74			85			96			113
Tax exempt commercial loans		6,716			6,229			6,349			4,446			4,544
Home equity and junior liens		49,783			50,106			49,339			52,315			51,948
Other consumer		62,825			65,694			68,439			71,681			72,710
Subtotal loans		898,010			899,875			911,205			913,751			920,573
Deferred loan fees		(1,340	)		(1,355	)		(1,482	)		(1,601	)		(1,587	)
Total loans	$	896,670		$	898,520		$	909,723		$	912,150		$	918,986

	2025								2024
DEPOSIT COMPOSITION:	December 31,		September 30,		June 30,		March 31,		December 31,
Savings accounts	$	122,669	$	123,958	$	129,252	$	129,898	$	128,753
Time accounts		314,394		333,211		341,063		349,673		360,716
Time accounts in excess of $250,000		137,529		143,026		144,355		149,922		142,473
Money management accounts		9,540		9,539		9,902		10,774		11,583
MMDA accounts		285,564		298,653		278,919		306,281		239,016
Demand deposit interest-bearing		110,807		115,274		120,083		109,941		101,080
Demand deposit noninterest-bearing		196,377		196,299		191,732		203,314		213,719
Mortgage escrow funds		6,968		5,121		6,581		4,677		7,184
Total deposits	$	1,183,848	$	1,225,081	$	1,221,887	$	1,264,480	$	1,204,524

The above information is unaudited and preliminary, based on the Company's data available at the time of presentation.

	Years Ended December 31,						2025						2024
SELECTED AVERAGE BALANCES:	2025			2024			Q4			Q3			Q4
Interest-earning assets:
Loans	$	909,683		$	903,941		$	904,977		$	906,759		$	920,855
Taxable investment securities		420,838			423,475			400,605			431,227			412,048
Tax-exempt investment securities		34,136			30,861			33,786			33,980			34,918
Fed funds sold and interest-earning deposits		14,984			16,379			19,963			16,866			5,115
Total interest-earning assets		1,379,641			1,374,656			1,359,331			1,388,832			1,372,936
Noninterest-earning assets:
Other assets		115,346			102,582			113,409			114,837			112,654
Allowance for credit losses		(17,277	)		(16,670	)		(18,764	)		(15,595	)		(17,145	)
Net unrealized losses on available-for-sale securities		(9,357	)		(9,769	)		(6,723	)		(9,949	)		(8,534	)
Total assets	$	1,468,353		$	1,450,799		$	1,447,253		$	1,478,125		$	1,459,911
Interest-bearing liabilities:
NOW accounts	$	115,555		$	101,336		$	116,184		$	120,696		$	102,862
Money management accounts		10,233			11,679			9,636			10,105			11,371
MMDA accounts		282,650			227,597			298,510			276,599			257,429
Savings and club accounts		127,414			118,965			122,533			127,696			128,169
Time deposits		485,975			517,352			465,032			490,735			504,008
Subordinated loans		30,179			30,002			30,192			30,225			30,076
Borrowings		64,489			114,471			52,125			73,556			68,391
Total interest-bearing liabilities		1,116,495			1,121,402			1,094,212			1,129,612			1,102,306
Noninterest-bearing liabilities:
Demand deposits		196,353			184,572			194,277			192,982			206,521
Other liabilities		29,589			21,924			30,037			29,320			29,491
Total liabilities		1,342,437			1,327,898			1,318,526			1,351,914			1,338,318
Shareholders' equity		125,916			122,901			128,727			126,211			121,593
Total liabilities & shareholders' equity	$	1,468,353		$	1,450,799		$	1,447,253		$	1,478,125		$	1,459,911

	Years Ended December 31,						2025						2024
SELECTED AVERAGE YIELDS:	2025			2024			Q4			Q3			Q4
Interest-earning assets:
Loans		5.89	%		5.83	%		5.74	%		6.09	%		5.87	%
Taxable investment securities		4.97	%		5.42	%		4.76	%		4.96	%		5.32	%
Tax-exempt investment securities		5.00	%		6.22	%		4.56	%		5.36	%		5.10	%
Fed funds sold and interest-earning deposits		3.00	%		4.84	%		3.25	%		3.11	%		6.41	%
Total interest-earning assets		5.56	%		5.70	%		5.38	%		5.68	%		5.69	%
Interest-bearing liabilities:
NOW accounts		1.10	%		1.10	%		1.08	%		1.02	%		1.19	%
Money management accounts		0.12	%		0.11	%		0.17	%		0.12	%		0.11	%
MMDA accounts		3.12	%		3.52	%		2.99	%		3.20	%		3.23	%
Savings and club accounts		0.25	%		0.26	%		0.24	%		0.26	%		0.26	%
Time deposits		3.61	%		4.07	%		3.57	%		3.55	%		4.25	%
Subordinated loans		6.53	%		6.55	%		7.00	%		6.43	%		6.52	%
Borrowings		3.66	%		4.29	%		3.74	%		3.77	%		4.89	%
Total interest-bearing liabilities		2.89	%		3.33	%		2.85	%		2.88	%		3.32	%
Net interest rate spread		2.67	%		2.37	%		2.53	%		2.80	%		2.37	%
Net interest margin		3.21	%		2.98	%		3.09	%		3.34	%		3.02	%
Ratio of average interest-earning assets to average interest-bearing liabilities		123.57	%		122.58	%		124.23	%		122.95	%		124.55	%

The above information is unaudited and preliminary based on the Company's data available at the time of presentation.

	Years Ended December 31,						2025												2024
NON-GAAP RECONCILIATIONS:	2025			2024			Q4			Q3			Q2			Q1			Q4
Tangible book value per common share:
Total equity							$	120,967		$	126,339		$	124,413		$	124,896		$	121,483
Intangible assets								(10,418	)		(10,574	)		(10,731	)		(10,888	)		(11,045	)
Tangible common equity (non-GAAP)								110,549			115,765			113,682			114,008			110,438
Common shares outstanding								6,186			6,175			6,168			6,144			6,126
Tangible book value per common share (non-GAAP)							$	17.87		$	18.75		$	18.43		$	18.56		$	18.03
Tangible common equity to tangible assets:
Tangible common equity (non-GAAP)							$	110,549		$	115,765		$	113,682		$	114,008		$	110,438
Tangible assets								1,414,734			1,461,694			1,494,388			1,484,449			1,463,829
Tangible common equity to tangible assets ratio (non-GAAP)								7.81	%		7.92	%		7.61	%		7.68	%		7.54	%
Return on average tangible common equity:
Average shareholders' equity	$	125,916		$	122,901		$	128,727		$	126,211		$	125,225		$	123,438		$	121,589
Average intangible assets		10,754			6,468			10,520			10,677			10,834			10,991			11,907
Average tangible equity (non-GAAP)		115,162			116,433			118,207			115,534			114,391			112,447			109,682
Net (loss) income		(3,417	)		3,383			(7,048	)		626			31			2,974			3,907
Net (loss) income, annualized	$	(3,417	)	$	3,383		$	(27,962	)	$	2,511		$	124		$	11,831		$	15,543
Return on average tangible common equity (non-GAAP)¹		-2.97	%		2.91	%		-23.66	%		2.17	%		0.11	%		10.52	%		14.17	%
Revenue, pre-tax, pre-provision net income, and efficiency ratio:
Net interest income	$	44,335		$	40,989		$	10,510		$	11,600		$	10,814		$	11,411		$	10,377
Total noninterest income		2,495			9,561			1,313			1,503			(1,518	)		1,197			4,906
Net realized (losses) gains on sales and redemptions of investment securities		(23	)		(71	)		(3	)		(12	)		-			(8	)		249
Gains on sales of loans and foreclosed real estate		402			187			133			121			83			65			39
Fair value adjustment to loans held-for-sale²		(3,462	)		-			(398	)		-			(3,064	)		-			-
(Loss) gain on asset sale		(115	)		3,169			(115	)		-			-			-			3,169
Revenue (non-GAAP)³		50,028			47,265			12,206			12,994			12,277			12,551			11,826
Total non-interest expense		34,581			34,417			9,150			8,937			8,061			8,433			8,544
Pre-tax, pre-provision net income (non-GAAP)⁴	$	15,447		$	12,848		$	3,056		$	4,057		$	4,216		$	4,118		$	3,282
Efficiency ratio (non-GAAP)⁵		69.12	%		72.82	%		74.96	%		68.78	%		65.66	%		67.19	%		72.25	%

¹ Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity
² The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms.
³ Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, and gains/(losses) on sales of assets
⁴ Pre-tax, pre-provision net income equals revenue less total non-interest expense
⁵ Efficiency ratio equals noninterest expense divided by revenue

The above information is unaudited and preliminary based on the Company's data available at the time of presentation.

Investor/Media Contacts
James A. Dowd, President, CEO
Justin K. Bigham, Executive Vice President, CFO
Telephone: (315) 343-0057

FAQ

Why did Pathfinder (PBHC) report a Q4 2025 net loss of $7.0 million?

The net loss primarily reflected an $11.2M credit loss provision taken to build reserves. According to the company, a comprehensive review of commercial loans drove the forward‑looking reserve increase.

How large is Pathfinder's allowance for credit losses after the December 31, 2025 reserve build?

Pathfinder's allowance for credit losses increased to $29.4M, or 3.28% of loans. According to the company, the increase followed a comprehensive review of commercial relationships over $500,000.

What happened to Pathfinder's problem loans in Q4 2025 and what was the accounting impact?

The company moved $6.3M of substandard loans to held‑for‑sale and recorded a $398k pre‑tax LOCOM HFS adjustment. According to the company, these loans are in active sale negotiations.

What were Pathfinder's key balance sheet totals at December 31, 2025 (loans and deposits)?

At December 31, 2025 loans were $896.7M and deposits were $1.18B. According to the company, deposit declines reflected runoff of higher‑cost brokered and other time deposits.

Does Pathfinder expect more stable earnings in 2026 after the Q4 2025 actions?

Management said it expects more consistent earnings in 2026 with reduced incremental reserve pressure. According to the company, strengthened credit controls and reserve builds support this outlook.

Pathfinder Bancorp, Inc. Announces Financial Results for Fourth Quarter and Full Year 2025