Pathfinder Bancorp, Inc. Announces Financial Results for First Quarter 2025

OSWEGO, N.Y., April 30, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the first quarter ended March 31, 2025. The holding company for Pathfinder Bank (“the Bank”) earned net income attributable to common shareholders of $3.0 million or $0.41 per diluted share in the first quarter of 2025, compared to $2.1 million or $0.34 per share in the first quarter of 2024. In the fourth quarter of 2024, the Company reported net income attributable to common shareholders of $3.9 million or $0.63 per share, and included a benefit of approximately $1.4 million from a gain on the sale of its insurance agency, net of taxes and transaction-related expenses. First Quarter 2025 Highlights and Key Developments Total deposits were $1.26 billion at period end, and grew by 5.0% in the first quarter and 10.3% from March 31, 2024. Core deposits also grew to 78.31% of total deposits at period end from 76.86% on December 31, 2024 and 69.17% on March 31, 2024. In addition to funding lending activity in the quarter, the Company's low-cost deposits enabled reductions in higher-cost borrowings to $44.6 million at period end, down 49.3% in the first quarter and 67.5% from March 31, 2024.Total loans were $912.2 million at period end, compared to $919.0 million on December 31, 2024 and $891.5 million on March 31, 2024. Commercial loans were $542.7 million or 59.5% of total loans at period end, compared to $539.7 million on December 31, 2024 and $525.6 million on March 31, 2024.Nonperforming loans declined to $13.2 million at period end, and improved by 40.1% during the first quarter and 32.7% from March 31, 2024. Nonperforming loans also declined to 1.45% of total loans at period end, and improved from 2.40% on December 31, 2024 and 2.20% on March 31, 2024.Net interest income was $11.4 million, and increased $1.0 million from the linked quarter and $2.0 million from the first quarter of 2024, while net interest margin (“NIM”) expanded to 3.31% from 3.02% in the fourth quarter of 2024 and 2.75% in the year-ago period. Approximately $347,000 of net interest income and 10 basis points of NIM in the first quarter of 2025 reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees.Pre-tax, pre-provision (“PTPP”) net income grew to $4.2 million, and increased 26.0% from the linked quarter and 16.9% from the year-ago period. PTPP net income, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses. The efficiency ratio improved to 66.84%, down from 72.01% in the linked quarter and 68.29% in the year-ago period. 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. “Pathfinder’s solid first quarter results reflect the strength of our balance sheet and our growing core deposit franchise. Our continued focus on disciplined loan and deposit pricing has helped expand net interest margin in a challenging economic environment while our efforts toward optimizing non-interest expenses have improved our efficiency measures,” said President and Chief Executive Officer James A. Dowd. “We remain deeply committed to strengthening our proactive credit risk management practices and view our current efforts as the beginning of a sustained, long-term strategy to enhance the quality of our loan portfolio.” Dowd added, “Our strong results this year and the close relationships we’ve built with businesses and neighbors throughout Central New York give us good reason to feel optimistic. Major investments in our region’s growing tech sector are creating new opportunities, and we’re proud to be part of that momentum. At the same time, we’re staying close to our customers and keeping a careful eye on how recent economic changes and national policy decisions are affecting families and local businesses across our communities.” Net Interest Income and Net Interest Margin First quarter 2025 net interest income was $11.4 million, an increase of $1.0 million, or 10.0%, from the fourth quarter of 2024. A decrease in interest and dividend income of $85,000 from the linked quarter was primarily attributed to average yield decreases of 43 basis points on tax-exempt investment securities and 25 basis points on taxable investment securities, partially offset by a 10 basis points increase in the average yield on loans that included 15 basis points from 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees. The corresponding decreases in income from tax-exempt and taxable investment securities from the linked quarter were $43,000 and $198,000, respectively. The increase in interest from loans of $149,000 from the prior quarter reflected a benefit of approximately $347,000, including $247,000 of 2024 interest recovered from loans removed from nonaccrual status and $100,000 of first quarter 2025 prepayment fees. A decrease in interest expense of $1.1 million from the linked quarter was primarily attributed to average cost decreases of 36 basis points for interest-bearing deposits and 143 basis points for borrowings. The corresponding decreases in deposits and borrowings expense from the linked quarter were $878,000 and $226,000, respectively. These reductions reflect continued changes in the Bank’s funding mix, including growing core deposits, as well as deliberate deposit pricing adjustments and significant reductions in borrowings. Net interest margin was 3.31% in the first quarter of 2025 compared to 3.02% in the linked quarter. The increase reflected significant reductions in deposit and borrowing costs, as well as a benefit of 10 basis points from 2024 recovered interest and first quarter 2025 prepayment fees. Noninterest Income First quarter 2025 noninterest income totaled $1.2 million and no longer includes contributions from the insurance agency business sold in October 2024. Linked quarter noninterest income totaled $4.9 million, including $3.2 million in non-recurring pre-tax gains and revenues associated with the sale of the Company's insurance agency in 2024. First quarter 2024 noninterest income totaled $1.7 million, including $397,000 in insurance revenue. Compared to the linked quarter, first quarter 2025 noninterest income reflected a reduction of $264,000 in debit card interchange fees driven by $158,000 of non-recurring catch up expenses and seasonal reductions estimated at $100,000, as well as decreases of $31,000 in service charges on deposit accounts and $7,000 in earnings and gain on bank owned life insurance (“BOLI”). Compared to the linked quarter, first quarter 2025 noninterest income also reflected increases of $52,000 in net realized gains on sales of marketable equity securities and $26,000 in gains on sales of loans and foreclosed real estate, as well as a decrease of $257,000 in net realized gains on sales and redemptions of investment securities. Compared to the year-ago period, first quarter 2025 noninterest income included increases of $65,000 in service charges on deposit accounts, $13,000 in loan servicing fees, and $5,000 in earnings and gain on BOLI, as well as a decline of $118,000 in debit card interchange fees driven by $158,000 of non-recurring catch up expenses related to prior periods. Noninterest income growth from the year-ago quarter also reflected a $140,000 decrease in net realized losses on sales and redemptions of investment securities and increases of $110,000 in net realized gains on sales of marketable equity securities and $47,000 in gains on sales of loans and foreclosed real estate. Noninterest ExpenseNoninterest expense totaled $8.4 million in the first quarter of 2025 and no longer includes costs for the insurance agency business sold in October 2024. Noninterest expense was $8.5 million in the linked quarter and $7.7 million in the year-ago period, including expenses associated with the insurance agency of $456,000 and $285,000, respectively. Salaries and benefits were $4.5 million in the first quarter of 2025, increasing $327,000 from the linked quarter and $121,000 from the year-ago period. The increase from the linked quarter reflected a $174,000 increase in stock-based compensation and a $96,000 increase in payroll tax. The increase from the first quarter of 2024 was primarily attributed to a $95,000 increase in stock-based compensation and $123,000 in other salary and benefits expenses associated with personnel in the East Syracuse branch acquired in July 2024. Building and occupancy was $1.3 million in the first quarter of 2025, increasing $93,000 and $531,000 from the linked and year-ago quarters, respectively. The increase from the linked quarter reflected an $89,000 seasonal increase in utilities and snow removal expenses. 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 $666,000 in the first quarter of 2025, decreasing $55,000 from the linked quarter and increasing $138,000 from the year-ago period. The decrease from the fourth quarter of 2024 was primarily attributed to a $42,000 ATM processing expense for new customer card issuances. The increase from the first quarter of 2024 was primarily attributed to the ongoing operations of the East Syracuse branch acquired in July 2024. Annualized noninterest expense represented 2.33% of average assets in the first quarter of 2025, compared to 2.33% and 2.16% in the linked and year-ago periods, including costs associated with transactions of the divested insurance agency business. The efficiency ratio was 66.84% in the first quarter of 2025, compared to 72.01% and 68.29% in the linked and year-ago periods. 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 IncomeFor the first quarter of 2025, net income attributable to common shareholders was $3.0 million, or $0.48 per basic share and $0.41 per diluted share. The difference between basic and diluted earnings per share reflects the accounting impact of restricted stock units granted to senior executive officers during the period under the 2024 Equity Incentive Plan, which was approved by shareholders at the 2024 annual meeting. Linked quarter net income was $3.9 million, including a net benefit of approximately $1.4 million from the gain on the sale of its insurance agency, or $0.63 per basic and diluted share. First quarter 2024 net income totaled $2.2 million or $0.34 per basic and diluted share. Statement of Financial ConditionAs of March 31, 2025, the Company’s statement of financial condition reflects total assets of $1.50 billion, compared to $1.47 billion and $1.45 billion recorded on December 31, 2024 and March 31, 2024, respectively. Loans totaled $912.2 million on March 31, 2025, decreasing 0.7% during the first quarter and increasing 2.3% from one year prior. Consumer and residential loans totaled $371.0 million on March 31, 2025, decreasing 2.6% during the first quarter and increasing 1.2% from one year prior. Commercial loans totaled $542.7 million on March 31, 2025, increasing 0.6% during the first quarter and 3.3% from one year prior. With respect to liabilities, deposits totaled $1.26 billion on March 31, 2025, increasing 5.0% during the first quarter and 10.3% from one year prior. The Company also utilized its lower cost liquidity to reduce total borrowings, which were $44.6 million on March 31, 2025 as compared to $88.1 million on December 31 and $137.4 million on March 31, 2024. Shareholders' equity totaled $124.9 million on March 31, 2025, increasing $3.4 million or 2.8% in the first quarter and increasing $3.1 million or 2.5% from one year prior. Compared to the prior quarter, the first quarter 2025 increase primarily reflects a $2.3 million increase in retained earnings, a $712,000 decrease in accumulated other comprehensive loss (“AOCL”), and a $353,000 increase in additional paid in capital. The 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% ownership interest in the insurance agency. Asset QualityThe 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 $13.2 million or 1.45% of total loans on March 31, 2025, improving from $22.1 million or 2.40% of total loans on December 31, 2024 and $19.7 million or 2.20% of total loans on March 31, 2024. Net charge offs (“NCOs”) after recoveries were $340,000 or an annualized 0.15% of average loans in the first 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 $1.0 million or an annualized 0.44% of average loans in the linked quarter and $30,000 or 0.01% in the prior year period. Provision for credit loss expense was $457,000 in the first quarter of 2025 reflecting lower levels of nonperforming loans and NCOs in the period and qualitative factors in the Company’s reserve model. The provision was $988,000 and $726,000 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 $17.4 million on March 31, 2025, compared to $17.2 million on December 31, 2024 and $16.7 million on March 31, 2024. As a percentage of total loans, ACL represented 1.91% on March 31, 2025, 1.88% on December 31, 2024, and 1.87% on March 31, 2024. Liquidity The Company has diligently ensured a strong liquidity profile as of March 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 $1.26 billion on March 31, 2025, $1.20 billion on December 31, 2024, and $1.15 billion on March 31, 2024. Core deposits represented 78.31% of total deposits on March 31, 2025, 76.86% on December 31, 2024, and 69.17% on March 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. At the end of the current quarter, Pathfinder Bancorp had an available additional funding capacity of $133.3 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $46.6 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 DeclaredOn March 31, 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 April 18, 2025 will be eligible for the dividend, which is scheduled for disbursement on May 9, 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 March 31, 2025 stood at $16.44 per share. This positions the annualized dividend yield at 2.43%. About Pathfinder Bancorp, Inc. Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the commercial bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches averaging over $100 million in deposits per location, 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. At March 31, 2025, the Oswego-headquartered Company had assets of $1.50 billion, loans of $912.2 million, and deposits of $1.26 billion. 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. Investor/Media Contacts James A. Dowd, President, CEOJustin K. Bigham, Senior Vice President, CFOTelephone: (315) 343-0057 PATHFINDER BANCORP, INC. Selected Financial Information (Unaudited) (Amounts in thousands, except per share amounts) 2025 2024SELECTED BALANCE SHEET DATA: March 31, December 31, September 30, June 30, March 31, ASSETS: Cash and due from banks $18,606 $13,963 $18,923 $12,022 $13,565 Interest-earning deposits 32,862 17,609 16,401 19,797 15,658 Total cash and cash equivalents 51,468 31,572 35,324 31,819 29,223 Available-for-sale securities, at fair value 284,051 269,331 271,977 274,977 279,012 Held-to-maturity securities, at amortized cost 155,704 158,683 161,385 166,271 172,648 Marketable equity securities, at fair value 4,401 4,076 3,872 3,793 3,342 Federal Home Loan Bank stock, at cost 2,906 4,590 5,401 8,702 7,031 Loans 912,150 918,986 921,660 888,263 891,531 Less: Allowance for credit losses 17,407 17,243 17,274 16,892 16,655 Loans receivable, net 894,743 901,743 904,386 871,371 874,876 Premises and equipment, net 19,233 19,009 18,989 18,878 18,332 Assets held-for-sale - - - 3,042 3,042 Operating lease right-of-use assets 1,356 1,391 1,425 1,459 1,493 Finance lease right-of-use assets 16,478 16,676 16,873 4,004 4,038 Accrued interest receivable 6,748 6,881 6,806 7,076 7,170 Foreclosed real estate - - - 60 82 Intangible assets, net 5,832 5,989 6,217 76 80 Goodwill 5,056 5,056 5,752 4,536 4,536 Bank owned life insurance 24,889 24,727 24,560 24,967 24,799 Other assets 22,472 25,150 20,159 25,180 23,968 Total assets $1,495,337 $1,474,874 $1,483,126 $1,446,211 $1,453,672 LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits: Interest-bearing deposits $1,061,166 $990,805 $986,103 $932,132 $969,692 Noninterest-bearing deposits 203,314 213,719 210,110 169,145 176,421 Total deposits 1,264,480 1,204,524 1,196,213 1,101,277 1,146,113 Short-term borrowings 27,000 61,000 60,315 127,577 91,577 Long-term borrowings 17,628 27,068 39,769 45,869 45,869 Subordinated debt 30,156 30,107 30,057 30,008 29,961 Accrued interest payable 844 546 236 2,092 1,963 Operating lease liabilities 1,560 1,591 1,621 1,652 1,682 Finance lease liabilities 16,655 16,745 16,829 4,359 4,370 Other liabilities 12,118 11,810 16,986 9,203 9,505 Total liabilities 1,370,441 1,353,391 1,362,026 1,322,037 1,331,040 Shareholders' equity: Voting common stock shares issued and outstanding 4,761,182 4,745,366 4,719,788 4,719,788 4,719,788 Voting common stock 48 47 47 47 47 Non-Voting common stock 14 14 14 14 14 Additional paid in capital 53,103 52,750 53,231 53,182 53,151 Retained earnings 80,163 77,816 73,670 78,936 77,558 Accumulated other comprehensive loss (8,432) (9,144) (6,716) (8,786) (8,862)Unearned ESOP shares - - - (45) (90)Total Pathfinder Bancorp, Inc. shareholders' equity 124,896 121,483 120,246 123,348 121,818 Noncontrolling interest - - 854 826 814 Total equity 124,896 121,483 121,100 124,174 122,632 Total liabilities and shareholders' equity $1,495,337 $1,474,874 $1,483,126 $1,446,211 $1,453,672 The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 2025 2024SELECTED INCOME STATEMENT DATA: Q1 Q4 Q3 Q2 Q1 Interest and dividend income: Loans, including fees $13,672 $13,523 $14,425 $12,489 $12,268 Debt securities: Taxable 5,185 5,312 5,664 5,736 5,607 Tax-exempt 402 445 469 498 508 Dividends 93 164 149 178 129 Federal funds sold and interest-earning deposits 89 82 492 121 98 Total interest and dividend income 19,441 19,526 21,199 19,022 18,610 Interest expense: Interest on deposits 6,945 7,823 7,633 7,626 7,411 Interest on short-term borrowings 545 700 1,136 1,226 1,114 Interest on long-term borrowings 65 136 202 201 194 Interest on subordinated debt 475 490 496 489 491 Total interest expense 8,030 9,149 9,467 9,542 9,210 Net interest income 11,411 10,377 11,732 9,480 9,400 Provision for (benefit from) credit losses: Loans 504 988 9,104 304 710 Held-to-maturity securities - (5) (31) (74) 15 Unfunded commitments (47) 5 (104) 60 1 Total provision for credit losses 457 988 8,969 290 726 Net interest income after provision for credit losses 10,954 9,389 2,763 9,190 8,674 Noninterest income: Service charges on deposit accounts 374 405 392 330 309 Earnings and gain on bank owned life insurance 162 169 361 167 157 Loan servicing fees 101 96 79 112 88 Net realized (losses) gains on sales and redemptions of investment securities (8) 249 (188) 16 (148)Gain on asset sale 1 & 2 - 3,169 - - - Net realized gains (losses) on sales of marketable equity securities 218 166 62 (139) 108 Gains on sales of loans and foreclosed real estate 65 39 90 40 18 Loss on sale of premises and equipment - - (36) - - Debit card interchange fees 1 265 300 191 119 Insurance agency revenue 1 - 49 367 260 397 Other charges, commissions & fees 284 299 280 234 689 Total noninterest income 1,197 4,906 1,707 1,211 1,737 Noninterest expense: Salaries and employee benefits 4,450 4,123 4,959 4,399 4,329 Building and occupancy 1,347 1,254 1,134 914 816 Data processing 666 721 672 550 528 Professional and other services 606 608 1,820 696 562 Advertising 141 218 165 116 105 FDIC assessments 229 231 228 228 229 Audits and exams 114 123 123 123 170 Insurance agency expense 1 - 456 308 232 285 Community service activities 11 19 20 39 52 Foreclosed real estate expenses 21 20 27 30 25 Other expenses 691 771 803 581 605 Total noninterest expense 8,433 8,544 10,259 7,908 7,706 Income (loss) before provision for income taxes 3,718 5,751 (5,789) 2,493 2,705 Provision (benefit) for income taxes 744 492 (1,173) 481 532 Net income (loss) attributable to noncontrolling interest and Pathfinder Bancorp, Inc. 2,974 5,259 (4,616) 2,012 2,173 Net income attributable to noncontrolling interest 1 - 1,352 28 12 53 Net income (loss) attributable to Pathfinder Bancorp Inc. $2,974 $3,907 $(4,644) $2,000 $2,120 Voting Earnings per common share - basic $0.48 $0.63 $(0.75) $0.32 $0.34 Voting Earnings per common share - diluted $0.41 $0.63 $(0.75) $0.32 $0.34 Series A Non-Voting Earnings per common share- basic $0.48 $0.63 $(0.75) $0.32 $0.34 Series A Non-Voting Earnings per common share- diluted $0.41 $0.63 $(0.75) $0.32 $0.34 Dividends per common share (Voting and Series A Non-Voting) $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. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 2025 2024FINANCIAL HIGHLIGHTS: Q1 Q4 Q3 Q2 Q1 Selected Ratios: Return on average assets 0.81% 1.07% -1.25% 0.56% 0.59%Return on average common equity 9.64% 12.85% -14.79% 6.49% 7.01%Return on average equity 9.64% 12.85% -14.79% 6.49% 7.01%Return on average tangible common equity 1 10.52% 14.17% -15.28% 6.78% 7.32%Net interest margin 3.31% 3.02% 3.34% 2.78% 2.75%Loans / deposits 72.14% 76.29% 77.05% 80.66% 77.79%Core deposits/deposits 2 78.31% 76.86% 77.45% 67.98% 69.17%Annualized non-interest expense / average assets 2.33% 2.33% 2.75% 2.19% 2.16%Commercial real estate / risk-based capital 3 182.62% 186.73% 189.47% 169.73% 163.93%Efficiency ratio 1 66.84% 72.01% 75.28% 74.08% 68.29% Other Selected Data: Average yield on loans 5.97% 5.87% 6.31% 5.64% 5.48%Average cost of interest bearing deposits 2.76% 3.12% 3.11% 3.21% 3.07%Average cost of total deposits, including non-interest bearing 2.29% 2.59% 2.59% 2.72% 2.61%Deposits/branch 4 $105,373 $100,377 $99,684 $100,116 $104,192 Pre-tax, pre-provision net income 1 $4,183 $3,321 $3,368 $2,767 $3,579 Total revenue 1 $12,616 $11,865 $13,627 $10,675 $11,285 Share and Per Share Data: Cash dividends per share $0.10 $0.10 $0.10 $0.10 $0.10 Book value per common share $20.33 $19.83 $19.71 $20.22 $19.97 Tangible book value per common share 1 $18.56 $18.03 $17.75 $19.46 $19.21 Basic and diluted weighted average shares outstanding - Voting 4,749 4,733 4,714 4,708 4,701 Basic earnings per share - Voting 5 $0.48 $0.63 $(0.75) $0.32 $0.34 Diluted earnings per share - Voting 5 $0.41 $0.63 $(0.75) $0.32 $0.34 Basic and diluted weighted average shares outstanding - Series A Non-Voting 1,380 1,380 1,380 1,380 1,380 Basic earnings per share - Series A Non-Voting 5 $0.48 $0.63 $(0.75) $0.32 $0.34 Diluted earnings per share - Series A Non-Voting 5 $0.41 $0.63 $(0.75) $0.32 $0.34 Common shares outstanding at period end 6,144 6,126 6,100 6,100 6,100 Pathfinder Bancorp, Inc. Capital Ratios: Company tangible common equity to tangible assets 1 7.68% 7.54% 7.36% 8.24% 8.09%Company Total Core Capital (to Risk-Weighted Assets) 15.89% 15.66% 15.55% 16.19% 16.23%Company Tier 1 Capital (to Risk-Weighted Assets) 12.24% 12.00% 11.84% 12.31% 12.33%Company Tier 1 Common Equity (to Risk-Weighted Assets) 11.75% 11.51% 11.33% 11.83% 11.85%Company Tier 1 Capital (to Assets) 8.82% 8.64% 8.29% 9.16% 9.16% Pathfinder Bank Capital Ratios: Bank Total Core Capital (to Risk-Weighted Assets) 14.86% 14.65% 14.52% 16.04% 15.65%Bank Tier 1 Capital (to Risk-Weighted Assets) 13.61% 13.40% 13.26% 14.79% 14.39%Bank Tier 1 Common Equity (to Risk-Weighted Assets) 13.61% 13.40% 13.26% 14.79% 14.39%Bank Tier 1 Capital (to Assets) 9.80% 9.64% 9.13% 10.30% 10.13% 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 December 31 and September 30, 2024, respectively. 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. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 2025 2024ASSET QUALITY: Q1 Q4 Q3 Q2 Q1 Total loan charge-offs $508 $1,191 $8,812 $112 $68 Total recoveries 168 171 90 46 38 Net loan charge-offs 340 1,020 8,722 66 30 Allowance for credit losses at period end 17,407 17,243 17,274 16,892 16,655 Nonperforming loans at period end 13,232 22,084 16,170 24,490 19,652 Nonperforming assets at period end $13,232 $22,084 $16,170 $24,550 $19,734 Annualized net loan charge-offs to average loans 0.15% 0.44% 3.82% 0.03% 0.01%Allowance for credit losses to period end loans 1.91% 1.88% 1.87% 1.90% 1.87%Allowance for credit losses to nonperforming loans 131.55% 78.08% 106.83% 68.98% 84.75%Nonperforming loans to period end loans 1.45% 2.40% 1.75% 2.76% 2.20%Nonperforming assets to period end assets 0.88% 1.50% 1.09% 1.70% 1.36% 2025 2024LOAN COMPOSITION: March 31, December 31, September 30, June 30, March 31, 1-4 family first-lien residential mortgages $243,854 $251,373 $255,235 $250,106 $252,026 Residential construction 3,162 4,864 4,077 309 1,689 Commercial real estate 381,479 377,619 378,805 370,361 363,467 Commercial lines of credit 65,074 67,602 64,672 62,711 67,416 Other commercial and industrial 91,644 89,800 88,247 90,813 91,178 Paycheck protection program loans 96 113 125 136 147 Tax exempt commercial loans 4,446 4,544 2,658 3,228 3,374 Home equity and junior liens 52,315 51,948 52,709 35,821 35,723 Other consumer 71,681 72,710 76,703 75,195 77,106 Subtotal loans 913,751 920,573 923,231 888,680 892,126 Deferred loan fees (1,601) (1,587) (1,571) (417) (595)Total loans $912,150 $918,986 $921,660 $888,263 $891,531 2025 2024DEPOSIT COMPOSITION: March 31, December 31, September 30, June 30, March 31, Savings accounts $129,898 $128,753 $129,053 $106,048 $111,465 Time accounts 349,673 360,716 352,729 368,262 378,103 Time accounts in excess of $250,000 149,922 142,473 140,181 117,021 114,514 Money management accounts 10,774 11,583 11,520 12,154 11,676 MMDA accounts 306,281 239,016 250,007 193,915 215,101 Demand deposit interest-bearing 109,941 101,080 97,344 128,168 134,196 Demand deposit noninterest-bearing 203,314 213,719 210,110 169,145 176,434 Mortgage escrow funds 4,677 7,184 5,269 6,564 4,624 Total deposits $1,264,480 $1,204,524 $1,196,213 $1,101,277 $1,146,113 The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 2025 2024SELECTED AVERAGE BALANCES: Q1 Q4 Q1 Interest-earning assets: Loans $916,207 $920,855 $895,335 Taxable investment securities 416,558 412,048 431,114 Tax-exempt investment securities 34,475 34,918 29,171 Fed funds sold and interest-earning deposits 12,939 5,115 13,873 Total interest-earning assets 1,380,179 1,372,936 1,369,493 Noninterest-earning assets: Other assets 114,882 112,654 94,677 Allowance for credit losses (17,413) (17,145) (16,081)Net unrealized losses on available-for-sale securities (9,947) (8,534) (11,187)Total assets $1,467,701 $1,459,911 $1,436,902 Interest-bearing liabilities: NOW accounts $111,643 $102,862 $99,688 Money management accounts 10,906 11,371 11,653 MMDA accounts 256,186 257,429 213,897 Savings and club accounts 129,769 128,169 112,719 Time deposits 498,963 504,009 524,368 Subordinated loans 30,123 30,076 29,930 Borrowings 70,575 68,391 137,882 Total interest-bearing liabilities 1,108,165 1,102,307 1,130,137 Noninterest-bearing liabilities: Demand deposits 206,137 206,521 169,748 Other liabilities 29,961 29,494 15,986 Total liabilities 1,344,263 1,338,322 1,315,871 Shareholders' equity 123,438 121,589 121,031 Total liabilities & shareholders' equity $1,467,701 $1,459,911 $1,436,902 2025 2024SELECTED AVERAGE YIELDS: Q1 Q4 Q1 Interest-earning assets: Loans 5.97% 5.87% 5.48%Taxable investment securities 5.07% 5.32% 5.32%Tax-exempt investment securities 4.66% 5.10% 6.97%Fed funds sold and interest-earning deposits 2.75% 6.41% 2.83%Total interest-earning assets 5.63% 5.69% 5.44%Interest-bearing liabilities: NOW accounts 1.07% 1.19% 1.06%Money management accounts 0.11% 0.11% 0.10%MMDA accounts 3.06% 3.23% 3.61%Savings and club accounts 0.25% 0.26% 0.26%Time deposits 3.69% 4.25% 3.92%Subordinated loans 6.31% 6.52% 6.56%Borrowings 3.46% 4.89% 3.79%Total interest-bearing liabilities 2.90% 3.32% 3.26%Net interest rate spread 2.73% 2.37% 2.18%Net interest margin 3.31% 3.02% 2.75%Ratio of average interest-earning assets to average interest-bearing liabilities 124.55% 124.55% 121.18% The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 2025 2024NON-GAAP RECONCILIATIONS: Q1 Q4 Q3 Q2 Q1 Tangible book value per common share: Total equity $124,896 $121,483 $120,246 $123,348 $121,818 Intangible assets (10,888) (11,045) (11,969) (4,612) (4,616)Tangible common equity (non-GAAP) 114,008 110,438 108,277 118,736 117,202 Common shares outstanding 6,144 6,126 6,100 6,100 6,100 Tangible book value per common share (non-GAAP) $18.56 $18.03 $17.75 $19.46 $19.21 Tangible common equity to tangible assets: Tangible common equity (non-GAAP) $114,008 $110,438 $108,277 $118,736 $117,202 Tangible assets 1,484,449 1,463,829 1,471,157 1,441,599 1,449,056 Tangible common equity to tangible assets ratio (non-GAAP) 7.68% 7.54% 7.36% 8.24% 8.09%Return on average tangible common equity: Average shareholders' equity $123,438 $121,589 $125,626 $123,211 $121,031 Average intangible assets 10,991 11,907 4,691 4,614 4,619 Average tangible equity (non-GAAP) 112,447 109,682 120,935 118,597 116,412 Net income (loss) 2,974 3,907 (4,644) 2,000 2,120 Net income (loss), annualized $11,831 $15,543 $(18,475) $8,044 $8,527 Return on average tangible common equity (non-GAAP)1 10.52% 14.17% -15.28% 6.78% 7.32%Revenue, pre-tax, pre-provision net income, and efficiency ratio: Net interest income $11,411 $10,377 $11,732 $9,480 $9,400 Total noninterest income 1,197 4,906 1,707 1,211 1,737 Net realized (gains) losses on sales and redemptions of investment securities (8) 249 (188) 16 (148)Gain on asset sale - 3,169 - - - Revenue (non-GAAP)2 12,616 11,865 13,627 10,675 11,285 Total non-interest expense 8,433 8,544 10,259 7,908 7,706 Pre-tax, pre-provision net income (non-GAAP)3 $4,183 $3,321 $3,368 $2,767 $3,579 Efficiency ratio (non-GAAP)4 66.84% 72.01% 75.28% 74.08% 68.29% 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity2 Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities and gain on sale of insurance agency3 Pre-tax, pre-provision net income equals revenue less total non-interest expense4 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.

Pathfinder Bancorp, Inc. Announces Financial Results for First Quarter 2025

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