Pathfinder Bancorp, Inc. Announces Second Quarter 2025 Results

Rhea-AI Summary

Pathfinder Bancorp (NASDAQ: PBHC) reported Q2 2025 net income of $31,000 (less than $0.01 per share), down from $3.0 million ($0.47/share) in Q1 2025 and $2.0 million ($0.32/share) in Q2 2024. The significant decline was primarily due to a $3.1 million pre-tax loss from the July 2025 sale of $9.3 million in nonperforming loans.

Key metrics include: Net interest income of $10.8 million with 3.11% net interest margin, total deposits of $1.22 billion, and total loans of $909.7 million. The company's efficiency ratio improved to 65.66%. Notably, nonperforming loans decreased to $11.7 million (1.28% of total loans), showing a 52.3% improvement from June 2024.

The bank demonstrated strong core deposit growth, reaching 78.47% of total deposits, while maintaining focus on commercial lending which grew to $549.1 million, representing 60.4% of total loans.

Positive

• Nonperforming loans significantly reduced by 52.3% year-over-year to $11.7 million
• Core deposits improved to 78.47% of total deposits from 67.98% year-over-year
• Commercial loan portfolio grew to $549.1 million, up 4.1% year-over-year
• Efficiency ratio improved to 65.66% from 74.36% year-over-year
• Net interest margin increased to 3.11% from 2.78% year-over-year

Negative

• Net income dropped to $31,000 from $3.0 million in previous quarter
• $3.1 million pre-tax loss from sale of nonperforming loans
• Net charge-offs increased to $2.6 million (1.14% of average loans)
• Total deposits decreased 3.4% quarter-over-quarter
• Net interest income declined 5.2% from previous quarter to $10.8 million

Results reflect July 2025 sale of $9.3 million in nonperforming and classified loans, undertaken as part of the Company’s ongoing efforts to mitigate credit risk and enhance asset quality metrics for the long term, as well as operating expense discipline, commercial loan growth and an improved core deposit ratio

OSWEGO, N.Y., July 30, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the second quarter ended June 30, 2025.

The holding company for Pathfinder Bank (“the Bank”) reported net income attributable to common shareholders of $31,000, or less than $0.01 per diluted share in the second quarter of 2025, compared to $3.0 million or $0.47 per diluted share in the first quarter of 2025 and $2.0 million or $0.32 per share in the second quarter of 2024.

Second Quarter 2025 Highlights and Key Developments

• The Company continued to undertake proactive measures in the second quarter to mitigate credit risk and enhance asset quality metrics for the long term. These included the July 2025 sale of $9.3 million in nonperforming and classified loans associated with one local commercial relationship for a pre-tax loss of $3.1 million recorded as a second quarter 2025 lower of cost or market adjustment to loans held for sale (“LOCOM HFS adjustment”), representing $0.40 per diluted share net of tax, as well as $2.6 million in net charge offs (“NCOs”) that are reflected in provision expense of $1.2 million.
• Nonperforming loans declined to $11.7 million at period end, improving by 11.7% during the second quarter and 52.3% from June 30, 2024. Nonperforming loans also declined to 1.28% of total loans at period end, improving from 1.45% on March 31, 2025 and 2.76% on June 30, 2024.
• Total deposits were $1.22 billion at period end, compared to $1.26 billion on March 31, 2025 and $1.10 billion on June 30, 2024. During the second quarter of 2025, total balances declined on reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality. Core deposits grew to 78.47% of total deposits at period end from 78.31% on March 31, 2025 and 67.98% on June 30, 2024.
• Total loans were $909.7 million at period end, reflecting the move of $3.2 million in balances to held-for-sale status for the July 2025 sale of nonperforming and classified loans, compared to $912.2 million on March 31, 2025 and $888.3 million on June 30, 2024. Commercial loans grew to $549.1 million or 60.4% of total loans at period end, compared to $542.7 million on March 31, 2025 and $527.2 million on June 30, 2024.
• Net interest income was $10.8 million and net interest margin (“NIM”) was 3.11% in the second quarter of 2025. Linked quarter results reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees, adding approximately $347,000 to net interest income of $11.4 million and 10 basis points to NIM of 3.31%. Second quarter 2024 net interest income was $9.5 million and NIM was 2.78%.
• The efficiency ratio was 65.66%, compared to 67.19% in the linked quarter and 74.36% in the year-ago period. The efficiency ratio, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue.
• Pre-tax, pre-provision (“PTPP”) net income was $4.2 million, compared to $4.2 million in the linked quarter and $2.8 million in the year-ago period. PTPP net income, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses.  

“Pathfinder’s more exacting approach to proactive credit risk mitigation continues to be implemented, with measures taken to proactively address certain loans experiencing credit deterioration resulting in elevated charge offs and the sale of nonperforming and classified commercial loans associated with a single in-market commercial relationship,” said President and Chief Executive Officer James A. Dowd. “These steps were taken as part of our ongoing efforts to enhance Pathfinder’s asset quality and resilience over the long term.”

Dowd added, “Growing our Central New York core deposit franchise remains an ongoing area of focus, as it continues to serve as a valuable source of low-cost funding for local, relationship-based lending opportunities with small- and middle-market businesses and consumers in our attractive regional markets.”

Net Interest Income and Net Interest Margin
Second quarter 2025 net interest income was $10.8 million, a decrease of $597,000, or 5.2%, from the first quarter of 2025. The decrease from the linked quarter was due in part to approximately $347,000 of first quarter 2025 net interest income attributed to 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees.

A decrease in interest and dividend income of $259,000 from the linked quarter was attributed to average yield decreases of 22 basis points on loans, which benefited by 15 basis points from 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees in the first quarter of 2025. The interest and dividend income decrease was also attributed to 5 basis points on fed funds sold and interest-earning deposits, and 11 basis points on all interest-earning assets, partially offset by average yield increases on taxable and tax-exempt securities of 3 and 76 basis points, respectively. In addition, average loan balances declined by $4.9 million, while average balances of lower-yielding taxable securities increased by $18.5 million. The corresponding decrease in loan interest income and federal funds sold and interest-earning deposits was $566,000 and $21,000, respectively, partially offset by increases in taxable and tax-exempt securities income of $337,000 and $63,000, respectively. An increase in interest expense from the first quarter of 2025 of $338,000 was primarily attributed to a 5 basis point increase in the average cost of interest bearing deposits.

Net interest margin was 3.11% in the second quarter of 2025 compared to 3.31% in the first quarter 2025. The decrease of 20 basis points reflected lower average loan yields and higher average interest bearing deposit costs in the second quarter of 2025, as well as approximately 10 basis points of first quarter 2025 margin attributed to 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees.

Second quarter 2025 net interest income was $10.8 million, an increase of $1.3 million, or 14.1%, from the second quarter of 2024. An increase in interest and dividend income of $160,000 was primarily attributed to average yield increases of 11 basis points on loans and a $25.9 million increase in average loan balances. The corresponding increase in loan interest income was $617,000. A decrease in interest expense of $1.2 million was attributed to reductions in the average cost of interest bearing deposits and total interest-bearing liabilities of 40 basis points and 45 basis points, respectively, as well as reductions in brokered deposits and short-term borrowings expense associated with paydowns of brokered deposits and borrowings utilizing a portion of the low-cost liquidity provided by core deposit growth.

Net interest margin was 3.11% in the second quarter of 2025 compared to 2.78% in the second quarter of 2024. The increase of 33 basis points reflected higher average loan yields and lower average deposit and borrowing costs in the second quarter of 2025, as compared to the year-ago period.

Noninterest Income
Second quarter 2025 noninterest income includes the $3.1 million LOCOM HFS adjustment, with an after-tax effect of $2.5 million or $0.40 per diluted share. Nonperforming and classified loans associated with one local commercial relationship dating back to 2013, with an original principal balance of $9.3 million and a June 30, 2025 principal balance of $6.3 million were sold in July 2025 for $3.2 million to an undisclosed financial buyer.

Second quarter 2025 noninterest income totaled negative $1.5 million, reflecting the $3.1 million LOCOM HFS adjustment, and no longer includes contributions from the insurance agency business sold in October 2024. Noninterest income was $1.2 million in the linked quarter and $1.2 million, including $260,000 in insurance revenue, in the year-ago period.

Compared to the linked quarter, second quarter 2025 noninterest income reflected increases of $179,000 in debit card interchange fees and $6,000 in service charges on deposit accounts, as well as a decrease of $6,000 in earnings and gain on bank owned life insurance (“BOLI”). Compared to the linked quarter, second quarter 2025 noninterest income also reflected increases of $202,000 in net unrealized gains on marketable equity securities, as well as decreases of $8,000 in net realized losses on sales and redemptions of investment securities and $4,000 in loan servicing fees.

Compared to the year-ago period, second quarter 2025 noninterest income included increases of $50,000 in service charges on deposit accounts, as well as decreases of $11,000 in earnings and gain on BOLI, and $11,000 in debit card interchange fees. Compared to the year-ago period, second quarter 2025 noninterest income also reflected an increase of $559,000 in net unrealized gains on marketable equity securities, as well as decreases of $16,000 in net realized gains on sales and redemptions of investment securities and $15,000 in loan servicing fees.

Noninterest Expense
Noninterest expense totaled $8.1 million in the second quarter of 2025, including $595,000 in costs associated with the East Syracuse branch acquired in July 2024 and excluding costs for the insurance agency business sold in October 2024. Noninterest expense was $8.4 million in the linked quarter, including East Syracuse branch costs of $577,000, and $7.9 million in the year-ago period, including insurance agency costs of $232,000.

Salaries and benefits were $4.5 million in the second quarter of 2025, in line with the linked quarter and increased $126,000 from the year-ago period. The increase from the second quarter of 2024 was primarily attributed to the July 2024 East Syracuse Branch Acquisition, which had $116,000 of total salary and benefit expenses in the second quarter of 2025. Excluding the East Syracuse branch, salaries and benefits increased $10,000 from the year-ago period. This increase from the second quarter of 2024 was primarily attributed to a $183,000 increase in stock-based compensation, partially offset by a $106,000 decrease in employee benefits, a $51,000 decrease in salaries and benefits expenses, and a $16,000 decrease in director compensation.  

Building and occupancy was $1.2 million in the second quarter of 2025, decreasing $117,000 from the linked quarter and increasing $316,000 from the year-ago quarter. The decrease from the linked quarter reflected lower costs associated with building maintenance primarily related to snow removal. The increase from the first quarter of last year was primarily due to ongoing facilities-related costs associated with operating the East Syracuse branch acquired in July 2024.

Data processing expense was $667,000 in the second quarter of 2025, in line with the linked quarter and increasing $117,000 from the year-ago period. The increase from the second quarter of 2024 was primarily attributed to the ongoing operations of the East Syracuse branch acquired in July 2024.

No FDIC assessment expense was recorded in the second quarter of 2025, due to modest over-accruals in prior periods, compared to $229,000 and $228,000 in the linked and year-ago periods, respectively. The Company anticipates more normalized FDIC assessments in the future and expects this expense to range between $220,000 to $230,000 per quarter in the second half of 2025.

Annualized noninterest expense represented 2.18% of average assets in the second quarter of 2025, compared to 2.33% and 2.19% in the linked and year-ago periods. The efficiency ratio was 65.66%, compared to 67.19% and 74.36% in the linked and year-ago periods, respectively. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue.

Net Income
For the second quarter of 2025, net income attributable to common shareholders was $31,000, or less than $0.01 per basic and diluted share. Linked quarter net income was $3.0 million, or $0.48 per basic share and $0.47 per diluted share. Second quarter 2024 net income totaled $2.0 million or $0.32 per basic and diluted share.

Statement of Financial Condition
As of June 30, 2025, the Company’s statement of financial condition reflects total assets of $1.51 billion, compared to $1.50 billion and $1.45 billion recorded on March 31, 2025 and June 30, 2024, respectively.

Loans totaled $909.7 million on June 30, 2025, after $3.2 million in balances were moved to held-for-sale status for the July 2025 sale of nonperforming and classified loans, resulting in a decrease of $2.4 million or 0.3% from March 31, 2025. Total loans increased $21.5 million or 2.4% from one year prior. Consumer and residential loans totaled $362.1 million, decreasing 2.4% during the second quarter and increasing 0.2% from one year prior. Commercial loans totaled $549.1 million, increasing 1.2% during the second quarter and 4.1% from one year prior, despite the recent loan sale.

With respect to liabilities, deposits totaled $1.22 billion on June 30, 2025, decreasing 3.4% on reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality, during the second quarter and increasing 11.0% from one year prior. 

Shareholders' equity totaled $124.4 million on June 30, 2025, decreasing $483,000 or 0.4% in the second quarter and increasing $1.1 million or 0.9% from one year prior. The second quarter 2025 decrease primarily reflects a $599,000 decrease in retained earnings, a $426,000 decrease in accumulated other comprehensive loss (“AOCL”), and a $542,000 increase in additional paid in capital. Noncontrolling interest, previously included in equity on the Statements of Financial Condition, was eliminated in October 2024 upon the sale of the Company's 51% insurance agency ownership interest.

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 $11.7 million, or 1.28% of total loans on June 30, 2025, compared to $13.2 million or 1.45% on March 31, 2025 and $24.5 million or 2.76% on June 30, 2024. Continued improvement in nonperforming loans in the second quarter of 2025 primarily resulted from the recent sale of loans associated with one local commercial relationship dating to 2013.

NCOs after recoveries were $2.6 million or an annualized 1.14% of average loans in the second quarter of 2025, with gross charge offs for consumer loans, purchased loan pools, and commercial loans, offsetting recoveries in each of these categories. NCOs were $340,000 or an annualized 0.15% of average loans in the linked quarter and $66,000 or 0.03% in the prior year period.

Provision for credit loss expense was $1.2 million in the second quarter of 2025 primarily reflecting NCOs in the period, partially offset by reductions related to quantitative and qualitative factors in the Company’s reserve model. The provision was $457,000 and $290,000 in the linked and year-ago quarters, respectively.

The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses (“ACL”) of $16.0 million on June 30, 2025, compared to $17.4 million on March 31, 2025 and $16.9 million on June 30, 2024. As a percentage of total loans, ACL represented 1.76% on June 30, 2025, 1.91% on March 31, 2025, and 1.90% on June 30, 2024.

Liquidity
The Company has diligently ensured a strong liquidity profile as of June 30, 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 $1.22 billion on June 30, 2025, compared to $1.26 billion on March 31, 2025 and $1.10 billion on June 30, 2024. Decreases in total deposits primarily reflect reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality. Core deposits grew to 78.47% of total deposits on June 30, 2025, compared to 78.31% on March 31, 2025 and 67.98% on June 30, 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 June 30, 2025, Pathfinder Bancorp had an available additional funding capacity of $124.5 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $46.5 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 June 30, 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 registered by July 18, 2025 will be eligible for the dividend, which is scheduled for disbursement on August 8, 2025. 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 June 30, 2025 stood at $15.34 per share. This positions the annualized dividend yield at 2.61%.

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 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 and competitive 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 set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist 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 government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov. 

This release contains non-GAAP financial measures. 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 GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial measure.

PATHFINDER BANCORP, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)
		2025								2024
SELECTED BALANCE SHEET DATA:		June 30,				March 31,				December 31,				September 30,				June 30,
ASSETS:
Cash and due from banks		$	16,183			$	18,606			$	13,963			$	18,923			$	12,022
Interest-earning deposits			15,292				32,862				17,609				16,401				19,797
Total cash and cash equivalents			31,475				51,468				31,572				35,324				31,819
Available-for-sale securities, at fair value			300,951				284,051				269,331				271,977				274,977
Held-to-maturity securities, at amortized cost			157,892				155,704				158,683				161,385				166,271
Marketable equity securities, at fair value			4,881				4,401				4,076				3,872				3,793
Federal Home Loan Bank stock, at cost			5,278				2,906				4,590				5,401				8,702
Loans held-for-sale			3,161				-				-				-				-
Loans, net of deferred fees			909,723				912,150				918,986				921,660				888,263
Less: Allowance for credit losses			15,983				17,407				17,243				17,274				16,892
Loans receivable, net			893,740				894,743				901,743				904,386				871,371
Premises and equipment, net			19,047				19,233				19,009				18,989				18,878
Assets held-for-sale			-				-				-				-				3,042
Operating lease right-of-use assets			1,115				1,356				1,391				1,425				1,459
Finance lease right-of-use assets			16,280				16,478				16,676				16,873				4,004
Accrued interest receivable			6,889				6,748				6,881				6,806				7,076
Foreclosed real estate			83				-				-				-				60
Intangible assets, net			5,675				5,832				5,989				6,217				76
Goodwill			5,056				5,056				5,056				5,752				4,536
Bank owned life insurance			31,045				24,889				24,727				24,560				24,967
Other assets			22,551				22,472				25,150				20,159				25,180
Total assets		$	1,505,119			$	1,495,337			$	1,474,874			$	1,483,126			$	1,446,211
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Interest-bearing deposits		$	1,030,155			$	1,061,166			$	990,805			$	986,103			$	932,132
Noninterest-bearing deposits			191,732				203,314				213,719				210,110				169,145
Total deposits			1,221,887				1,264,480				1,204,524				1,196,213				1,101,277
Short-term borrowings			75,500				27,000				61,000				60,315				127,577
Long-term borrowings			20,977				17,628				27,068				39,769				45,869
Subordinated debt			30,206				30,156				30,107				30,057				30,008
Accrued interest payable			813				844				546				236				2,092
Operating lease liabilities			1,313				1,560				1,591				1,621				1,652
Finance lease liabilities			16,566				16,655				16,745				16,829				4,359
Other liabilities			13,444				12,118				11,810				16,986				9,203
Total liabilities			1,380,706				1,370,441				1,353,391				1,362,026				1,322,037
Shareholders' equity:
Voting common stock shares issued and outstanding			4,788,109				4,761,182				4,745,366				4,719,788				4,719,788
Voting common stock		$	48			$	48			$	47			$	47			$	47
Non-voting common stock			14				14				14				14				14
Additional paid in capital			53,645				53,103				52,750				53,231				53,182
Retained earnings			79,564				80,163				77,816				73,670				78,936
Accumulated other comprehensive loss			(8,858	)			(8,432	)			(9,144	)			(6,716	)			(8,786	)
Unearned ESOP shares			-				-				-				-				(45	)
Total Pathfinder Bancorp, Inc. shareholders' equity			124,413				124,896				121,483				120,246				123,348
Noncontrolling interest			-				-				-				854				826
Total equity			124,413				124,896				121,483				121,100				124,174
Total liabilities and shareholders' equity		$	1,505,119			$	1,495,337			$	1,474,874			$	1,483,126			$	1,446,211

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

		Six Months Ended June 30,								2025								2024
SELECTED INCOME STATEMENT DATA:		2025				2024				Q2				Q1				Q4				Q3				Q2
Interest and dividend income:
Loans, including fees		$	26,778			$	24,757			$	13,106			$	13,672			$	13,523			$	14,425			$	12,489
Debt securities:
Taxable			10,707				11,343				5,522				5,185				5,312				5,664				5,736
Tax-exempt			867				1,006				465				402				445				469				498
Dividends			114				307				21				93				164				149				178
Federal funds sold and interest-earning deposits			157				219				68				89				82				492				121
Total interest and dividend income			38,623				37,632				19,182				19,441				19,526				21,199				19,022
Interest expense:
Interest on deposits			14,263				15,037				7,318				6,945				7,823				7,633				7,626
Interest on short-term borrowings			1,040				2,340				495				545				700				1,136				1,226
Interest on long-term borrowings			137				395				72				65				136				202				201
Interest on subordinated debt			958				980				483				475				490				496				489
Total interest expense			16,398				18,752				8,368				8,030				9,149				9,467				9,542
Net interest income			22,225				18,880				10,814				11,411				10,377				11,732				9,480
Provision for (benefit from) credit losses:
Loans			1,677				1,014				1,173				504				988				9,104				304
Held-to-maturity securities			5				(59	)			5				-				(5	)			(31	)			(74	)
Unfunded commitments			(28	)			61				19				(47	)			5				(104	)			60
Total provision for credit losses			1,654				1,016				1,197				457				988				8,969				290
Net interest income after provision for credit losses			20,571				17,864				9,617				10,954				9,389				2,763				9,190
Noninterest income:
Service charges on deposit accounts			754				639				380				374				405				392				330
Earnings and gain on bank owned life insurance			318				324				156				162				169				361				167
Loan servicing fees			198				200				97				101				96				79				112
Net realized (losses) gains on sales and redemptions of investment securities			(8	)			(132	)			-				(8	)			249				(188	)			16
Gain on asset sale 1 & 2			-				-				-				-				3,169				-				-
Net unrealized gains (losses) on marketable equity securities			638				(31	)			420				218				166				62				(139	)
Gains on sales of loans and foreclosed real estate			148				58				83				65				39				90				40
LOCOM HFS adjustment 3			(3,064	)			-				(3,064	)			-				-				-				-
Loss on sale of premises and equipment			-				-				-				-				-				(36	)			-
Debit card interchange fees			181				310				180				1				265				300				191
Insurance agency revenue 1			-				657				-				-				49				367				260
Other charges, commissions & fees			514				923				230				284				299				280				234
Total noninterest (loss) income			(321	)			2,948				(1,518	)			1,197				4,906				1,707				1,211
Noninterest expense:
Salaries and employee benefits			8,975				8,728				4,525				4,450				4,123				4,959				4,399
Building and occupancy			2,577				1,730				1,230				1,347				1,254				1,134				914
Data processing			1,333				1,078				667				666				721				672				550
Professional and other services			1,384				1,258				778				606				608				1,820				696
Advertising			218				221				77				141				218				165				116
FDIC assessments			229				457				-				229				231				228				228
Audits and exams			174				293				60				114				123				123				123
Amortization expense			314				8				157				157				27				124				5
Insurance agency expense 1			-				517				-				-				456				308				232
Community service activities			39				91				28				11				19				20				39
Foreclosed real estate expenses			50				55				29				21				20				27				30
Other expenses			1,201				1,178				510				691				744				679				576
Total noninterest expense			16,494				15,614				8,061				8,433				8,544				10,259				7,908
Income (loss) before provision for income taxes			3,756				5,198				38				3,718				5,751				(5,789	)			2,493
Provision (benefit) for income taxes			751				1,013				7				744				492				(1,173	)			481
Net income (loss) attributable to noncontrolling interest and Pathfinder Bancorp, Inc.			3,005				4,185				31				2,974				5,259				(4,616	)			2,012
Net income attributable to noncontrolling interest 1			-				65				-				-				1,352				28				12
Net income (loss) attributable to Pathfinder Bancorp Inc.		$	3,005			$	4,120			$	31			$	2,974			$	3,907			$	(4,644	)		$	2,000
Voting Earnings per common share - basic		$	0.48			$	0.66			$	-			$	0.48			$	0.63			$	(0.75	)		$	0.32
Voting Earnings per common share - diluted 4		$	0.47			$	0.66			$	-			$	0.47			$	0.63			$	(0.75	)		$	0.32
Series A Non-Voting Earnings per common share- basic		$	0.48			$	0.66			$	-			$	0.48			$	0.63			$	(0.75	)		$	0.32
Series A Non-Voting Earnings per common share- diluted 4		$	0.47			$	0.66			$	-			$	0.47			$	0.63			$	(0.75	)		$	0.32
Dividends per common share (Voting and Series A Non-Voting)		$	0.20			$	0.20			$	0.10			$	0.10			$	0.10			$	0.10			$	0.10

¹ Although 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 $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.
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.

		Six Months Ended June 30,								2025								2024
FINANCIAL HIGHLIGHTS:		2025				2024				Q2				Q1				Q4				Q3				Q2
Selected Ratios:
Return on average assets			0.41	%			0.58	%			0.01	%			0.81	%			1.07	%			-1.25	%			0.56	%
Return on average common equity			4.83	%			6.74	%			0.10	%			9.64	%			12.85	%			-14.79	%			6.49	%
Return on average equity			4.83	%			6.74	%			0.10	%			9.64	%			12.85	%			-14.79	%			6.49	%
Return on average tangible common equity 1			5.34	%			7.05	%			0.11	%			10.52	%			14.17	%			-15.28	%			6.78	%
Net interest margin			3.21	%			2.77	%			3.11	%			3.31	%			3.02	%			3.34	%			2.78	%
Loans / deposits			74.45	%			80.66	%			74.45	%			72.14	%			76.29	%			77.05	%			80.66	%
Core deposits/deposits 2			78.47	%			67.98	%			78.47	%			78.31	%			76.86	%			77.45	%			67.98	%
Annualized non-interest expense / average assets			2.26	%			2.20	%			2.18	%			2.33	%			2.33	%			2.75	%			2.19	%
Commercial real estate / risk-based capital 3			183.34	%			169.73	%			183.34	%			182.62	%			186.73	%			189.47	%			169.73	%
Efficiency ratio 1			66.43	%			71.29	%			65.66	%			67.19	%			72.25	%			75.78	%			74.36	%
Other Selected Data:
Average yield on loans			5.86	%			5.56	%			5.75	%			5.97	%			5.87	%			6.31	%			5.64	%
Average cost of interest bearing deposits			2.78	%			3.14	%			2.81	%			2.76	%			3.12	%			3.11	%			3.21	%
Average cost of total deposits, including non-interest bearing			2.33	%			2.67	%			2.37	%			2.29	%			2.59	%			2.59	%			2.72	%
Deposits/branch 4		$	101,824			$	100,116			$	101,824			$	105,373			$	100,377			$	99,684			$	100,116
Pre-tax, pre-provision net income 1		$	8,334			$	6,288			$	4,216			$	4,183			$	3,321			$	3,368			$	2,767
Total revenue 1		$	24,828			$	21,902			$	12,277			$	12,616			$	11,865			$	13,627			$	10,675
Share and Per Share Data:
Cash dividends per share		$	0.20			$	0.20			$	0.10			$	0.10			$	0.10			$	0.10			$	0.10
Book value per common share		$	20.17			$	20.22			$	20.17			$	20.33			$	19.83			$	19.71			$	20.22
Tangible book value per common share 1		$	18.43			$	19.46			$	18.43			$	18.56			$	18.03			$	17.75			$	19.46
Basic and diluted weighted average shares outstanding - Voting			4,759				4,704				4,769				4,749				4,733				4,714				4,708
Basic earnings per share - Voting  5		$	0.48			$	0.66			$	-			$	0.48			$	0.63			$	(0.75	)		$	0.32
Diluted earnings per share - Voting  5 & 6		$	0.47			$	0.66			$	-			$	0.47			$	0.63			$	(0.75	)		$	0.32
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-Voting  5		$	0.48			$	0.66			$	-			$	0.48			$	0.63			$	(0.75	)		$	0.32
Diluted earnings per share - Series A Non-Voting  5 & 6		$	0.47			$	0.66			$	-			$	0.47			$	0.63			$	(0.75	)		$	0.32
Common shares outstanding at period end			6,168				6,100				6,168				6,141				6,126				6,100				6,100
Pathfinder Bancorp, Inc. Capital Ratios:
Company tangible common equity to tangible assets 1			7.61	%			8.24	%			7.61	%			7.68	%			7.54	%			7.36	%			8.24	%
Company Total Core Capital (to Risk-Weighted Assets)			15.97	%			16.19	%			15.97	%			15.89	%			15.66	%			15.55	%			16.19	%
Company Tier 1 Capital (to Risk-Weighted Assets)			12.31	%			12.31	%			12.31	%			12.24	%			12.00	%			11.84	%			12.31	%
Company Tier 1 Common Equity (to Risk-Weighted Assets)			11.81	%			11.83	%			11.81	%			11.75	%			11.51	%			11.33	%			11.83	%
Company Tier 1 Capital (to Assets)			8.75	%			9.16	%			8.75	%			8.82	%			8.64	%			8.29	%			9.16	%
Pathfinder Bank Capital Ratios:
Bank Total Core Capital (to Risk-Weighted Assets)			14.87	%			16.04	%			14.87	%			14.86	%			14.65	%			14.52	%			16.04	%
Bank Tier 1 Capital (to Risk-Weighted Assets)			13.62	%			14.79	%			13.62	%			13.61	%			13.40	%			13.26	%			14.79	%
Bank Tier 1 Common Equity (to Risk-Weighted Assets)			13.62	%			14.79	%			13.62	%			13.61	%			13.40	%			13.26	%			14.79	%
Bank Tier 1 Capital (to Assets)			9.68	%			10.30	%			9.68	%			9.80	%			9.64	%			9.13	%			10.30	%

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 Includes 11 full-service branches and one motor bank for periods after June 30, 2024. Includes 10 full-service branches and one motor bank for all periods prior.
⁵ Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares.
⁶ 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.

		Six Months Ended June 30,								2025								2024
ASSET QUALITY:		2025				2024				Q2				Q1				Q4				Q3				Q2
Total loan charge-offs		$	3,352			$	180			$	2,844			$	508			$	1,191			$	8,812			$	112
Total recoveries			415				84				247				168				171				90				46
Net loan charge-offs			2,937				96				2,597				340				1,020				8,722				66
Allowance for credit losses at period end			15,983				16,892				15,983				17,407				17,243				17,274				16,892
Nonperforming loans at period end			11,689				24,490				11,689				13,232				22,084				16,170				24,490
Nonperforming assets at period end		$	11,772			$	24,550			$	11,772			$	13,232			$	22,084			$	16,170			$	24,550
Annualized net loan charge-offs to average loans			0.64	%			0.02	%			1.14	%			0.15	%			0.44	%			3.82	%			0.03	%
Allowance for credit losses to period end loans			1.76	%			1.90	%			1.76	%			1.91	%			1.88	%			1.87	%			1.90	%
Allowance for credit losses to nonperforming loans			136.74	%			68.98	%			136.74	%			131.55	%			78.08	%			106.83	%			68.98	%
Nonperforming loans to period end loans			1.28	%			2.76	%			1.28	%			1.45	%			2.40	%			1.75	%			2.76	%
Nonperforming assets to period end assets			0.78	%			1.70	%			0.78	%			0.88	%			1.50	%			1.09	%			1.70	%

		2025								2024
LOAN COMPOSITION:		June 30,				March 31,				December 31,				September 30,				June 30,
1-4 family first-lien residential mortgages		$	240,833			$	243,854			$	251,373			$	255,235			$	250,106
Residential construction			3,520				3,162				4,864				4,077				309
Commercial real estate			381,575				381,479				377,619				378,805				370,361
Commercial lines of credit			75,487				65,074				67,602				64,672				62,711
Other commercial and industrial			85,578				91,644				89,800				88,247				90,813
Paycheck protection program loans			85				96				113				125				136
Tax exempt commercial loans			6,349				4,446				4,544				2,658				3,228
Home equity and junior liens			49,339				52,315				51,948				52,709				35,821
Other consumer			68,439				71,681				72,710				76,703				75,195
Subtotal loans			911,205				913,751				920,573				923,231				888,680
Deferred loan fees			(1,482	)			(1,601	)			(1,587	)			(1,571	)			(417	)
Total loans		$	909,723			$	912,150			$	918,986			$	921,660			$	888,263

		2025								2024
DEPOSIT COMPOSITION:		June 30,				March 31,				December 31,				September 30,				June 30,
Savings accounts		$	129,252			$	129,898			$	128,753			$	129,053			$	106,048
Time accounts			341,063				349,673				360,716				352,729				368,262
Time accounts in excess of $250,000			144,355				149,922				142,473				140,181				117,021
Money management accounts			9,902				10,774				11,583				11,520				12,154
MMDA accounts			278,919				306,281				239,016				250,007				193,915
Demand deposit interest-bearing			120,083				109,941				101,080				97,344				128,168
Demand deposit noninterest-bearing			191,732				203,314				213,719				210,110				169,145
Mortgage escrow funds			6,581				4,677				7,184				5,269				6,564
Total deposits		$	1,221,887			$	1,264,480			$	1,204,524			$	1,196,213			$	1,101,277

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

		Six Months Ended June 30,								2025									2024
SELECTED AVERAGE BALANCES:		2025				2024				Q2				Q1				Q2
Interest-earning assets:
Loans		$	913,658			$	889,988			$	911,347			$	916,207			$	885,384
Taxable investment securities			425,841				433,156				435,022				416,558				434,572
Tax-exempt investment securities			34,394				29,053				34,314				34,475				28,944
Fed funds sold and interest-earning deposits			11,497				8,669				10,070				12,939				13,387
Total interest-earning assets			1,385,390				1,360,866				1,390,753				1,380,179				1,362,287
Noninterest-earning assets:
Other assets			116,590				96,772				118,280				114,882				98,746
Allowance for credit losses			(17,377	)			(16,498	)			(17,342	)			(17,413	)			(16,905	)
Net unrealized losses on available-for-sale securities			(10,395	)			(10,701	)			(10,838	)			(9,947	)			(10,248	)
Total assets		$	1,474,208			$	1,430,439			$	1,480,853			$	1,467,701			$	1,433,880
Interest-bearing liabilities:
NOW accounts		$	112,720			$	97,213			$	113,994			$	111,643			$	92,918
Money management accounts			10,602				11,759				10,302				10,906				12,076
MMDA accounts			277,664				212,693				298,907				256,186				214,364
Savings and club accounts			129,752				110,119				129,736				129,769				107,558
Time deposits			494,200				525,767				489,490				498,963				524,276
Subordinated loans			30,149				29,954				30,173				30,123				29,977
Borrowings			66,165				133,894				61,803				70,575				141,067
Total interest-bearing liabilities			1,121,252				1,121,399				1,134,405				1,108,165				1,122,236
Noninterest-bearing liabilities:
Demand deposits			199,123				170,313				192,186				206,137				171,135
Other liabilities			29,497				16,542				29,037				29,961				17,298
Total liabilities			1,349,872				1,308,254				1,355,628				1,344,263				1,310,669
Shareholders' equity			124,336				122,185				125,225				123,438				123,211
Total liabilities & shareholders' equity		$	1,474,208			$	1,430,439			$	1,480,853			$	1,467,701			$	1,433,880

		Six Months Ended June 30,								2025									2024
SELECTED AVERAGE YIELDS:		2025				2024				Q2				Q1				Q2
Interest-earning assets:
Loans			5.86	%			5.56	%			5.75	%			5.97	%			5.64	%
Taxable investment securities			5.08	%			5.38	%			5.10	%			5.07	%			5.44	%
Tax-exempt investment securities			5.04	%			6.93	%			5.42	%			4.66	%			6.88	%
Fed funds sold and interest-earning deposits			2.73	%			5.05	%			2.70	%			2.75	%			3.62	%
Total interest-earning assets			5.58	%			5.53	%			5.52	%			5.63	%			5.59	%
Interest-bearing liabilities:
NOW accounts			1.16	%			1.08	%			1.25	%			1.07	%			1.14	%
Money management accounts			0.09	%			0.11	%			0.12	%			0.11	%			0.10	%
MMDA accounts			3.16	%			3.70	%			3.25	%			3.06	%			3.74	%
Savings and club accounts			0.25	%			0.26	%			0.25	%			0.25	%			0.26	%
Time deposits			3.66	%			3.97	%			3.64	%			3.69	%			4.03	%
Subordinated loans			6.36	%			6.54	%			6.40	%			6.31	%			6.53	%
Borrowings			3.56	%			4.09	%			3.67	%			3.46	%			4.05	%
Total interest-bearing liabilities			2.92	%			3.34	%			2.95	%			2.90	%			3.40	%
Net interest rate spread			2.66	%			2.19	%			2.57	%			2.73	%			2.19	%
Net interest margin			3.21	%			2.77	%			3.11	%			3.31	%			2.78	%
Ratio of average interest-earning assets to average interest-bearing liabilities			123.56	%			121.35	%			122.60	%			124.55	%			121.39	%

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

		Six Months Ended June 30,								2025								2024
NON-GAAP RECONCILIATIONS:		2025				2024				Q2				Q1				Q4				Q3				Q2
Tangible book value per common share:
Total equity										$	124,413			$	124,896			$	121,483			$	120,246			$	123,348
Intangible assets											(10,731	)			(10,888	)			(11,045	)			(11,969	)			(4,612	)
Tangible common equity (non-GAAP)											113,682				114,008				110,438				108,277				118,736
Common shares outstanding											6,168				6,144				6,126				6,100				6,100
Tangible book value per common share (non-GAAP)										$	18.43			$	18.56			$	18.03			$	17.75			$	19.46
Tangible common equity to tangible assets:
Tangible common equity (non-GAAP)										$	113,682			$	114,008			$	110,438			$	108,277			$	118,736
Tangible assets											1,494,388				1,484,449				1,463,829				1,471,157				1,441,599
Tangible common equity to tangible assets ratio (non-GAAP)											7.61	%			7.68	%			7.54	%			7.36	%			8.24	%
Return on average tangible common equity:
Average shareholders' equity		$	124,336			$	122,185			$	125,225			$	123,438			$	121,589			$	125,626			$	123,211
Average intangible assets			10,912				4,617				10,834				10,991				11,907				4,691				4,614
Average tangible equity (non-GAAP)			113,424				117,568				114,391				112,447				109,682				120,935				118,597
Net income (loss)			3,005				4,120				31				2,974				3,907				(4,644	)			2,000
Net income (loss), annualized		$	6,060			$	8,285			$	124			$	11,831			$	15,543			$	(18,475	)		$	8,044
Return on average tangible common equity (non-GAAP) 1			5.34	%			7.05	%			0.11	%			10.52	%			14.17	%			-15.28	%			6.78	%
Revenue, pre-tax, pre-provision net income, and efficiency ratio:
Net interest income		$	22,225			$	18,880			$	10,814			$	11,411			$	10,377			$	11,732			$	9,480
Total noninterest income			(321	)			2,948				(1,518	)			1,197				4,906				1,707				1,211
Net realized (gains) losses on sales and redemptions of investment securities			(8	)			(132	)			-				(8	)			249				(188	)			16
Gains on sales of loans and foreclosed real estate			148				58				83				65				39				90				40
LOCOM HFS adjustment 2			(3,064	)			-				(3,064	)			-				-				-				-
Gain on asset sale			-				-				-				-				3,169				-				-
Revenue (non-GAAP) 3			24,828				21,902				12,277				12,551				11,826				13,537				10,635
Total non-interest expense			16,494				15,614				8,061				8,433				8,544				10,259				7,908
Pre-tax, pre-provision net income (non-GAAP) 4		$	8,334			$	6,288			$	4,216			$	4,183			$	3,321			$	3,368			$	2,767
Efficiency ratio (non-GAAP) 5			66.43	%			71.29	%			65.66	%			67.19	%			72.25	%			75.78	%			74.36	%

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 a gain on the October 2024 sale of the Company's insurance agency asset
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, Senior Vice President, CFO
Telephone: (315) 343-0057

FAQ

What caused PBHC's significant earnings decline in Q2 2025?

The earnings decline was primarily due to a $3.1 million pre-tax loss from the July 2025 sale of $9.3 million in nonperforming loans, and $2.6 million in net charge-offs.

How much did Pathfinder Bancorp earn per share in Q2 2025?

Pathfinder earned less than $0.01 per diluted share in Q2 2025, compared to $0.47 in Q1 2025 and $0.32 in Q2 2024.

What is PBHC's current asset quality status?

Nonperforming loans decreased to $11.7 million (1.28% of total loans) as of June 30, 2025, improving from 1.45% in March 2025 and 2.76% in June 2024.

What was Pathfinder's net interest margin in Q2 2025?

Net interest margin was 3.11% in Q2 2025, down from 3.31% in Q1 2025 but up from 2.78% in Q2 2024.

How much are PBHC's total deposits and loans as of Q2 2025?

Total deposits were $1.22 billion and total loans were $909.7 million as of June 30, 2025.