OSWEGO — Pathfinder Bancorp, Inc. (NASDAQ: PBHC), holding company for Pathfinder Bank, recently reported third-quarter net income of $820,000, down nearly 4 percent from $852,000 in the year-earlier period. Pathfinder’s earnings per share was 20 cents for both the third quarter of 2016 and third quarter of 2015. The Oswego–based banking company’s revenue (net interest […]
OSWEGO — Pathfinder Bancorp, Inc. (NASDAQ: PBHC), holding company for Pathfinder Bank, recently reported third-quarter net income of $820,000, down nearly 4 percent from $852,000 in the year-earlier period.
Pathfinder’s earnings per share was 20 cents for both the third quarter of 2016 and third quarter of 2015.
The Oswego–based banking company’s revenue (net interest income plus total noninterest income) rose almost 5 percent to $6.3 million in this year’s third quarter from $6 million a year prior.
Pathfinder’s net interest income increased 10.5 percent to $5.3 million from $4.8 million in the year-ago quarter. The improvement was led by an $802,000 rise in interest income, produced by a rise of $55 million in average loans compared to the prior-year quarter, Pathfinder said in its earnings report. The higher interest income was partially offset by a $300,000 increase in interest expense to $952,000 — primarily from a rise in the balance of subordinated loans and a 0.22 percent increase in the interest rate paid for time deposits.
Pathfinder’s noninterest income in the third quarter totaled $963,000, down 19 percent from $1.2 million in the prior-year quarter. The decrease was due primarily to a $156,000 reduction in earnings from bank-owned life insurance and an $84,000 decline in net gains on sales and redemptions of investment securities compared to the prior-year period, the banking company said in the earnings report. This was partially offset by a $31,000 increase in other charges, commissions, and fees, reflecting higher commission income from Pathfinder’s 51 percent ownership stake in FitzGibbons Agency, LLC and from investment services.
Noninterest expense for Pathfinder totaled $4.8 million in the third quarter, up more than 5 percent from $4.6 million in the prior-year quarter. The increase was mainly led by the company’s $210,000 rise in salary and benefit expenses.
“Our team produced another strong operating performance for the third quarter with loan growth of 5 percent, significant deposit inflows coming from multiple sources, and continued improvement to the bank’s already stable asset quality metrics,” Thomas W. Schneider, president and CEO of Pathfinder Bancorp, said in the earnings report. “We maintained a positive trajectory for our third quarter lending activity by continuing to develop solid commercial banking relationships and expanding upon our growing presence in Onondaga County. We continued to function as an effective deposit gatherer of retail, commercial and municipal accounts, as evidenced by an increase of $29.1 million in deposit balances in the quarter.”
Schneider indicated that Pathfinder Bank could benefit from customers rethinking their banking relationships in the wake of area mergers and acquisitions and branch closures.
“Of even greater long-term significance, we continue to be well positioned to compete for quality lending and deposit relationships within our service area as customers increasingly evaluate their options in the wake of the ongoing consolidation activities of certain in-market peers,” he said in the report.
Pathfinder’s net interest margin for the three months ending Sept. 30 was 3.28 percent, down from 3.39 percent in the comparable period in 2015. The lower net interest margin was primarily due to the addition of $10 million in subordinated loans in October 2015, the banking company said.
Pathfinder took a $322,000 provision for loan losses in the third quarter, up from $220,000 in the year-ago quarter. It said that reflects significant growth in the bank’s commercial-lending portfolio. The bank’s asset quality has been improving.
Year-to-date, Pathfinder’s 2016 net income totaled $2.3 million, up from $2 million for the first nine months of 2015. Earnings per share for the nine months of 2016 totaled 55 cents, compared to 49 cents in the comparable period of 2015.
Pathfinder had $473.4 million in total loans as of Sept. 30, up 10 percent from the start of the year. The increase was led by commercial real-estate lending.
The banking company had total deposits of $555.1 million as of Sept. 30, up 13 percent from the beginning of the year.
Pathfinder had total assets of $717.1 million as of Sept. 30, up 15 percent from Dec. 31, 2015.
Pathfinder Bank is a New York State chartered commercial bank that has nine branch offices in its market areas of Oswego and Onondaga counties. The branches are in Oswego (3), Fulton, Mexico, Lacona, Central Square, Cicero, and Syracuse.
Contact Rombel at arombel@cnybj.com