Pathfinder Q1 revenue rises 11 percent, but profit is flat

OSWEGO, N.Y. — Pathfinder Bancorp, Inc. (NASDAQ: PBHC), holding company of Pathfinder Bank, on Tuesday reported that its first-quarter revenue rose by $522,000, or 10.8 percent, from a year ago as it grew loans and deposits.

But the Oswego–based banking company’s net income was essentially unchanged at $497,000, or 12 cents per share, compared to $489,000, or 12 cents, in the year-prior quarter, as its expenses rose and net interest margin was squeezed.

“We continued to execute on our strategic priorities in the first quarter of 2015, with a focus on productive deployment of a significant portion of the capital raised near the end of 2014,” Thomas W. Schneider, president and CEO of Pathfinder, said in the company’s earnings report. “Our strong Central New York brand and market presence within our service area helped to drive both loan and deposit growth in the first quarter. Substantive growth in interest-earning assets partially offset margin compression which continues to be an industry-wide challenge. We believe that 2015 will offer continued opportunity for commercial real estate and commercial business lending growth within our existing footprint…”

Pathfinder reported that its first-quarter net interest income jumped by 12 percent to $4.5 million from the year-prior period. It benefitted from a rise in interest income resulting from growth in average interest-earning assets of $73.4 million compared to the year-ago quarter. It generated average loan growth of $43.6 million, or 12.6 percent, comprised mainly of commercial real estate and commercial and residential mortgage loans.

The banking company’s net interest margin in the first quarter was 3.28 percent, a 10 basis point decline from the first quarter of 2014, and down 16 basis points from the fourth quarter of 2014.

Pathfinder took a provision for loan losses of $383,000 in the first quarter, up $138,000 from the prior-year quarter. The banking company said the increase in the provision stemmed from an additional specific reserve it recorded relating to one large commercial loan, combined with continued growth in commercial-lending activities.

The banking company’s noninterest expense for the first quarter totaled $4.2 million, up $317,000, or 8.1 percent, from a year ago. Salary and benefit expenses rose $184,000, primarily from personnel costs associated with staffing its new downtown Syracuse business banking office, and increased ESOP and deferred-compensation plans expenses. It also incurred a $95,000 increase in building-occupancy costs from opening the Syracuse office in the third quarter of 2014.

Pathfinder Bank is a New York state-chartered savings bank with eight branches in Oswego County and northern Onondaga County, as well as the business banking office in downtown Syracuse.

Contact Rombel at arombel@cnybj.com