Pathfinder Bancorp, Inc. Announces Financial Results for Fourth Quarter and Full Year 2024

Fourth quarter results include EPS of $0.69, deposit growth, commercial loan growth, a gain on the sale of its insurance agency, and strong contributions from new and established Pathfinder Bank teams across Central New York OSWEGO, N.Y., Jan. 31, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the fourth quarter and year ended December 31, 2024. The holding company for Pathfinder Bank (“the Bank”) earned net income attributable to common shareholders of $4.3 million or $0.69 per share in the fourth quarter of 2024, including a benefit of approximately $1.4 million from a gain on the previously announced sale of its insurance agency, net of taxes and transaction-related expenses. The Company reported a net loss of $4.6 million or $0.75 per share in the third quarter of 2024, reflecting $9.0 million in provision expense that primarily resulted from a comprehensive loan portfolio review the Bank elected to undertake as part of its ongoing commitment to continuously improve its credit risk management approach, and net income of $2.5 million or $0.41 per share in the fourth quarter of 2023. For the full year, the Company earned net income of $3.8 million or $0.60 per share in 2024 and $9.3 million or $1.51 per share in 2023. Fourth Quarter and Full Year 2024 Highlights and Key Developments Provision expense was $988,000 in the fourth quarter of 2024, compared to $9.0 million in the linked quarter and $265,000 in the fourth quarter of 2023, while the allowance for credit losses (“ACL) increased to 1.88% of loans from 1.87% on September 30, 2024 and 1.78% on December 31, 2023.Net interest income was $10.8 million, compared to the $11.7 million in the linked quarter that benefited from a $887,000 catch-up interest payment, and $9.2 million in the fourth quarter of 2023. Full-year net interest income was $41.4 million in 2024 and $38.9 million in 2023.Net interest margin (“NIM”) was 3.15% in the fourth quarter of 2024, compared to the 3.34% in the third quarter that benefited by 25 basis points from the catch-up interest payment, and 2.74% in the year-ago period.Non-interest income was $4.9 million, including a gross, pre-tax gain of $3.2 million on the October 2024 sale of the Company’s insurance agency, compared to $1.7 million in the linked quarter and $1.3 million in the year-ago period. Full-year non-interest income was $9.6 million in 2024 and $5.2 million in 2023.Non-interest expense was $8.5 million with $155,000 in October 2024 insurance agency transaction-related costs, $10.3 million in the linked quarter with $1.6 million in July 2024 branch acquisition-related costs, and $7.0 million in the year-ago period. Full-year non-interest expense was $34.4 million in 2024 and $29.4 million in 2023.Pre-tax, pre-provision (“PTPP”) net income grew to $3.8 million, compared to $3.4 million in the linked and year-ago periods. 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. Full-year PTPP net income was $13.5 million in 2024 and $14.7 million in 2023.Total deposits were $1.20 billion at period end, growing by $8.1 million or 2.7% annualized from September 30, 2024 and $84.3 million or 7.5% from December 31, 2023. The Bank’s loan-to-deposit ratio was 76.3% on December 31, 2024.Total loans were $919.0 million at period end, compared to $921.7 million on September 30, 2024 and $897.2 million on December 31, 2023. Commercial loans were $539.7 million at period end, $534.5 million on September 30, 2024 and $524.2 million on December 31, 2023. “Pathfinder’s core net interest income growth and net interest margin expansion were key contributors to fourth quarter earnings, and are a product of disciplined asset and liability pricing, the Bank’s valuable core deposit franchise, and our relationship-based commercial and retail lending in Central New York,” said President and Chief Executive Officer James A. Dowd. “In addition, we continue to invest in talent to serve middle market businesses throughout the Syracuse area, building on our foundation in this community. The East Syracuse branch acquired last summer, and our operations throughout the area, made important contributions to Pathfinder’s performance in the fourth quarter, and we look forward to further enhancing the breadth and depth of our commercial and other customer relationships in this important growth market.” Dowd added, “We also intend to maintain a sharp focus on managing operating expenses, along with our ongoing efforts to continuously enhance the Company’s proactive credit risk management approach. While there may be short-term variability in measures of operating efficiency and asset quality, our leadership team is fully committed to taking the steps necessary to make sustainable improvements over the long term and continue building franchise value for the benefit of our shareholders.” Net Interest Income and Net Interest Margin Fourth quarter 2024 net interest income was $10.8 million, a decrease of 7.8% from the third quarter of 2024, or a decrease of 0.2% when excluding an $887,000 third quarter catch-up interest payment associated with purchased loan pool positions. A decrease in interest and dividend income of $1.7 million was primarily attributed to average yield decreases of 44 basis points on loans including 39 basis points from the catch-up interest payment, 108 basis points on tax-exempt investment securities, and 28 basis points on taxable investment securities. The corresponding decreases in income from loan interest, tax-exempt investment securities, and taxable investment securities were $902,000, $24,000, and $337,000, respectively. A decrease in interest expense of $761,000 was attributed to intentional reductions in the cost of time deposits and other interest-bearing deposits, as well as reductions in borrowings expense. Net interest margin was 3.15% in the fourth quarter of 2024, compared to 3.34% in the linked quarter. The decrease was due to the 25 basis points of linked quarter NIM attributed to the third quarter 2024 catch-up interest payment. Fourth quarter 2024 net interest income was $10.8 million, an increase of 18.1% from the fourth quarter of 2023. An increase in interest and dividend income of $1.2 million was primarily attributed to average yield increases of 33 basis points on loans, 4 basis points on taxable investment securities, and 404 basis points on fed funds sold and interest-earning deposits. The corresponding increase in loan interest income, taxable investment securities, and federal funds sold and interest-earning deposits was $1.1 million, $152,000, and $13,000, respectively. A decrease in interest expense of $463,000 was attributed to changes in the Bank’s deposit mix, repricing of deposits in a lower rate environment, and reductions in borrowings expense. Net interest margin was 3.15% in the fourth quarter of 2024 compared to 2.74% in the same period the year prior. The increase of 41 basis points was driven by reductions in borrowing and funding costs. Noninterest Income Noninterest income totaled $4.9 million in the fourth quarter of 2024, including the $3.2 million pre-tax gain on the insurance agency sale, which represents the gross amount that is required to be 100% consolidated within the Company's financial statements, despite Pathfinder's 51% interest in the business sold in October 2024. Noninterest income growth from the third quarter of 2024 was $3.2 million, or $30,000 when excluding the agency sale gain. Noninterest income growth from the fourth quarter of 2023 was $3.6 million, or $419,000 when excluding the agency sale gain. The insurance agency sold in October contributed $49,000 in revenue to noninterest income in the fourth quarter of 2024, $367,000 in the third quarter of 2024 and $303,000 in the fourth quarter of 2023. Compared to the linked quarter, fourth quarter 2024 noninterest income also included increases of $16,000 in loan servicing fees and $12,000 in service charges on deposit accounts, a decrease of $194,000 in earnings and gain on bank owned life insurance ("BOLI") after recording a $175,000 third quarter net death benefit on BOLI, and a $36,000 decrease in debit card interchange fees. Noninterest income growth from the linked quarter also reflected an increase of $438,000 in net realized gains on sales and redemptions of investment securities and $104,000 in net realized gains on sales of marketable equity securities, as well as a decrease of $51,000 in gains on sales of loans and foreclosed real estate. Compared to the year-ago period, fourth quarter 2024 noninterest income also included increases of $103,000 in interchange fees, $68,000 in service charges on deposit accounts, $26,000 in loan servicing fees, and $3,000 in earnings and gain on BOLI. Noninterest income growth from the year-ago quarter also reflected increases of $248,000 increase in net realized losses on sales and redemptions of investment securities, $213,000 in net realized gains on sales of marketable equity securities, and $41,000 in gains on sales of loans and foreclosed real estate. Noninterest Expense Noninterest expense totaled $8.5 million in the fourth quarter of 2024, decreasing $1.7 million from the linked quarter and increasing $1.5 million from the year-ago period. Fourth quarter 2024 noninterest expense included $456,000 associated with the Company’s insurance agency sale in October 2024, including $155,000 in transaction-related items. The insurance agency incurred $308,000 of noninterest expense in the third quarter of 2024 and $216,000 in the fourth quarter of 2023. Third quarter 2024 noninterest expense included $1.6 million in transaction-related expenses for Pathfinder’s acquisition of the East Syracuse branch acquisition in July 2024. Salaries and benefits were $4.1 million in the fourth quarter of 2024, decreasing $839,000 from the linked quarter and increasing $446,000 from the year-ago period. The decrease from the linked quarter reflected elevated non-exempt-employee hours for projects related to the successful third quarter closing and integration of the East Syracuse branch acquisition, as well as some personnel vacancies that were open in the fourth quarter. The increase from the fourth quarter of 2023 was primarily attributed to increased headcount and lower salary deferrals than in the prior year period. Building and occupancy was $1.3 million in the fourth quarter of 2024, increasing $117,000 and $390,000 from the linked and year-ago quarters, respectively. These increases were due to ongoing facilities-related costs of approximately $322,000 associated with operating the branch acquired in July 2024. Professional and other services expense was $608,000 in the fourth quarter of 2024, decreasing $1.2 million from the linked quarter and increasing $120,000 from the year-ago period. The decrease from the third quarter of 2024 was primarily attributed to one-time costs associated with the East Syracuse branch acquisition. The increase from the fourth quarter of 2023 was primarily attributed to a $136,000 increase in technology project implementation services and other outsourced consulting services. Annualized noninterest expense, including transaction-related costs, represented 2.33% of average assets in the fourth quarter of 2024, compared to 2.75% and 2.01% in the linked and year-ago periods. The efficiency ratio, including transaction-related costs, was 69.42% in the fourth quarter of 2024, compared to 75.28% and 67.25% 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. Statement of Financial Condition As of December 31, 2024, the Company’s statement of financial condition reflects total assets of $1.47 billion, compared to $1.48 billion and $1.47 billion recorded on September 30, 2024 and December 31, 2023, respectively. Loans totaled $919.0 million on December 31, 2024, decreasing 0.3% during the fourth quarter and increasing 2.4% from one year prior. Consumer and residential loans totaled $380.9 million, decreasing 2.0% during the fourth quarter and increasing 1.9% from one year prior. Commercial loans totaled $539.7 million, increasing 1.0% during the fourth quarter and 3.0% from one year prior. With respect to liabilities, deposits totaled $1.20 billion on December 31, 2024, increasing 0.7% during the fourth quarter and 7.5% from one year prior. The Company also utilized its lower cost liquidity to reduce total borrowings, which were $88.1 million on December 31, 2024 as compared to $100.1 million on September 30, 2024 and $175.6 million on December 31, 2023. Shareholders' equity totaled $121.9 million on December 31, 2024, increasing $1.6 million or 1.3% in the fourth quarter and increasing $2.4 million or 2.0% from one year prior. The fourth quarter 2024 increase primarily reflects a $4.5 million increase in retained earnings, partially offset by a $2.4 million increase in accumulated other comprehensive loss (“AOCL”) and a $481,000 decrease in additional paid in capital. The full-year 2024 increase in shareholders' equity primarily reflects a $2.1 increase in retained earnings and a $461,000 decrease in AOCL, partially offset by a $364,000 decrease in additional paid in capital. The noncontrolling interest included in equity on the Statements of Financial Condition was eliminated with the October 2024 sale of the 51% ownership interest in the Company’s insurance agency. Asset Quality Pathfinder’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 $22.1 million or 2.40% of total loans on December 31, 2024, $16.2 million or 1.75% of total loans on September 30, 2024 and $17.2 million or 1.92% of total loans on December 31, 2023. Net charge offs (“NCOs”) after recoveries were $1.0 million or an annualized 0.44% of average loans in the fourth quarter of 2024, with gross charge offs for consumer loans, purchased loan pools, and one commercial loan offsetting recoveries in each of these categories. NCOs were $8.7 million or an annualized 3.82% of average loans in the linked quarter, following the loan portfolio review completed in September, and $108,000 or 0.05% in the prior year period. Provision for credit loss expense was $988,000 in the fourth quarter of 2024, reflecting NCOs in the period and qualitative factors in the Company’s reserve model. Third quarter of 2024 provision was $9.0 million, primarily to replenish commercial loan reserves and adjust the lifetime loss estimate for solar purchased loan pool positions following the loan portfolio review completed in September. Fourth quarter 2023 provision was $265,000. The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses (“ACL”) of $17.2 million on December 31, 2024, compared to $17.3 million on September 30, 2024 and $16.0 million on December 31, 2023. As a percentage of total loans, ACL represented 1.88% on December 31, 2024, 1.87% on September 30, 2024, and 1.78% on December 31, 2023. Liquidity The Company has diligently ensured a strong liquidity profile as of December 31, 2024 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 $1.20 billion on December 31, 2024, $1.20 billion on September 30, 2024, and $1.12 billion on December 31, 2023. Core deposits represented 76.87% of total deposits on December 31, 2024, 77.45% on September 30, 2024, and 69.83% on December 31, 2023. The Bank’s 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 $113.8 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $43.3 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend Declared On December 23, 2024, 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 January 17, 2025 will be eligible for the dividend, which is scheduled for disbursement on February 7, 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 December 31, 2024 stood at $17.50 per share. This positions the dividend yield at an attractive 2.29%. 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 December 31, 2024, the Oswego-headquartered Company had assets of $1.47 billion, loans of $919.0 million, and deposits of $1.20 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. Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Senior Vice President, CFO Telephone: (315) 343-0057 PATHFINDER BANCORP, INC. Selected Financial Information (Unaudited) (Amounts in thousands, except per share amounts) 2024 2023 SELECTED BALANCE SHEET DATA: December 31, September 30, June 30, March 31, December 31, ASSETS: Cash and due from banks $13,963 $18,923 $12,022 $13,565 $12,338 Interest-earning deposits 17,609 16,401 19,797 15,658 36,394 Total cash and cash equivalents 31,572 35,324 31,819 29,223 48,732 Available-for-sale securities, at fair value 269,331 271,977 274,977 279,012 258,716 Held-to-maturity securities, at amortized cost 158,683 161,385 166,271 172,648 179,286 Marketable equity securities, at fair value 4,076 3,872 3,793 3,342 3,206 Federal Home Loan Bank stock, at cost 4,590 5,401 8,702 7,031 8,748 Loans 918,986 921,660 888,263 891,531 897,207 Less: Allowance for credit losses 17,243 17,274 16,892 16,655 15,975 Loans receivable, net 901,743 904,386 871,371 874,876 881,232 Premises and equipment, net 19,009 18,989 18,878 18,332 18,441 Assets held-for-sale - - 3,042 3,042 3,042 Operating lease right-of-use assets 1,391 1,425 1,459 1,493 1,526 Finance lease right-of-use assets 16,676 16,873 4,004 4,038 4,073 Accrued interest receivable 6,881 6,806 7,076 7,170 7,286 Foreclosed real estate - - 60 82 151 Intangible assets, net 5,989 6,217 76 80 85 Goodwill 5,056 5,752 4,536 4,536 4,536 Bank owned life insurance 24,727 24,560 24,967 24,799 24,641 Other assets 25,150 20,159 25,180 23,968 22,097 Total assets $1,474,874 $1,483,126 $1,446,211 $1,453,672 $1,465,798 LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits: Interest-bearing deposits $990,674 $986,103 $932,132 $969,692 $949,898 Noninterest-bearing deposits 213,719 210,110 169,145 176,421 170,169 Total deposits 1,204,393 1,196,213 1,101,277 1,146,113 1,120,067 Short-term borrowings 61,000 60,315 127,577 91,577 125,680 Long-term borrowings 27,068 39,769 45,869 45,869 49,919 Subordinated debt 30,107 30,057 30,008 29,961 29,914 Accrued interest payable 234 236 2,092 1,963 2,245 Operating lease liabilities 1,591 1,621 1,652 1,682 1,711 Finance lease liabilities 16,745 16,829 4,359 4,370 4,381 Other liabilities 11,876 16,986 9,203 9,505 11,625 Total liabilities 1,353,014 1,362,026 1,322,037 1,331,040 1,345,542 Shareholders' equity: Voting common stock shares issued and outstanding 4,742,841 4,719,788 4,719,788 4,719,788 4,719,288 Voting common stock 47 47 47 47 47 Non-Voting common stock 14 14 14 14 14 Additional paid in capital 52,750 53,231 53,182 53,151 53,114 Retained earnings 78,193 73,670 78,936 77,558 76,060 Accumulated other comprehensive loss (9,144) (6,716) (8,786) (8,862) (9,605)Unearned ESOP shares - - (45) (90) (135)Total Pathfinder Bancorp, Inc. shareholders' equity 121,860 120,246 123,348 121,818 119,495 Noncontrolling interest - 854 826 814 761 Total equity 121,860 121,100 124,174 122,632 120,256 Total liabilities and shareholders' equity $1,474,874 $1,483,126 $1,446,211 $1,453,672 $1,465,798 The above information is preliminary and based on the Company's data available at the time of presentation. Years Ended December 31, 2024 2023 SELECTED INCOME STATEMENT DATA: 2024 2023 Q4 Q3 Q2 Q1 Q4 Interest and dividend income: Loans, including fees $52,705 $47,348 $13,523 $14,425 $12,489 $12,268 $12,429 Debt securities: Taxable 22,319 17,500 5,312 5,664 5,736 5,607 5,092 Tax-exempt 1,920 1,947 445 469 498 508 506 Dividends 620 573 164 149 178 129 232 Federal funds sold and interest-earning deposits 793 295 82 492 121 98 69 Total interest and dividend income 78,357 67,663 19,526 21,199 19,022 18,610 18,328 Interest expense: Interest on deposits 30,050 23,265 7,380 7,633 7,626 7,411 7,380 Interest on short-term borrowings 4,176 2,688 700 1,136 1,226 1,114 1,064 Interest on long-term borrowings 733 850 136 202 201 194 231 Interest on subordinated debt 1,966 1,941 490 496 489 491 494 Total interest expense 36,925 28,744 8,706 9,467 9,542 9,210 9,169 Net interest income 41,432 38,919 10,820 11,732 9,480 9,400 9,159 Provision for (benefit from) credit losses: Loans 11,106 2,991 988 9,104 304 710 316 Held-to-maturity securities (94) (98) (4) (31) (74) 15 (74)Unfunded commitments (39) 37 4 (104) 60 1 23 Total provision for credit losses 10,973 2,930 988 8,969 290 726 265 Net interest income after provision for credit losses 30,459 35,989 9,832 2,763 9,190 8,674 8,894 Noninterest income: Service charges on deposit accounts 1,436 1,249 405 392 330 309 336 Earnings and gain on bank owned life insurance 854 630 169 361 167 157 164 Loan servicing fees 375 307 96 79 112 88 69 Net realized (losses) gains on sales and redemptions of investment securities (71) 62 249 (188) 16 (148) 2 Gain on asset sale 1 & 2 3,169 - 3,169 - - - - Net realized gains (losses) on sales of marketable equity securities 197 (255) 166 62 (139) 108 (47)Gains on sales of loans and foreclosed real estate 187 181 39 90 40 18 (2)Loss on sale of premises and equipment (13) - - (36) - - - Debit card interchange fees 875 616 265 300 191 119 161 Insurance agency revenue 1 1,073 1,304 49 367 260 397 303 Other charges, commissions & fees 1,479 1,096 299 280 234 689 332 Total noninterest income 9,561 5,190 4,906 1,707 1,211 1,737 1,318 Noninterest expense: Salaries and employee benefits 17,810 15,920 4,123 4,959 4,399 4,329 3,677 Building and occupancy 4,118 3,563 1,254 1,134 914 816 864 Data processing 2,471 2,018 721 672 550 528 499 Professional and other services 3,686 2,019 608 1,820 696 562 488 Advertising 604 671 218 165 116 105 155 FDIC assessments 916 885 231 228 228 229 222 Audits and exams 539 735 123 123 123 170 259 Insurance agency expense 1 1,281 1,033 456 308 232 285 216 Community service activities 130 200 19 20 39 52 49 Foreclosed real estate expenses 102 111 20 27 30 25 35 Other expenses 2,760 2,240 771 803 581 605 580 Total noninterest expense 34,417 29,395 8,544 10,259 7,908 7,706 7,044 Income (loss) before provision for income taxes 5,603 11,784 6,194 (5,789) 2,493 2,705 3,168 Provision (benefit) for income taxes 398 2,362 558 (1,173) 481 532 590 Net income (loss) attributable to noncontrolling interest and Pathfinder Bancorp, Inc. 5,205 9,422 5,636 (4,616) 2,012 2,173 2,578 Net income attributable to noncontrolling interest 1 1,445 129 1,352 28 12 53 42 Net income (loss) attributable to Pathfinder Bancorp Inc. $3,760 $9,293 $4,284 $(4,644) $2,000 $2,120 $2,536 Voting Earnings per common share - basic and diluted $0.60 $1.51 $0.69 $(0.75) $0.32 $0.34 $0.41 Series A Non-Voting Earnings per common share- basic and diluted $0.60 $1.51 $0.69 $(0.75) $0.32 $0.34 $0.41 Dividends per common share (Voting and Series A Non-Voting) $0.40 $0.36 $0.10 $0.10 $0.10 $0.10 $0.09 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. 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 preliminary and based on the Company's data available at the time of presentation. Years Ended December 31, 2024 2023 FINANCIAL HIGHLIGHTS: 2024 2023 Q4 Q3 Q2 Q1 Q4 Selected Ratios: Return on average assets 0.26% 0.67% 1.17% -1.25% 0.56% 0.59% 0.72%Return on average common equity 3.06% 8.09% 14.09% -14.79% 6.49% 7.01% 8.72%Return on average equity 3.06% 8.09% 14.09% -14.79% 6.49% 7.01% 8.72%Return on average tangible common equity 1 3.23% 8.43% 15.54% -15.28% 6.78% 7.32% 9.01%Net interest margin 3.01% 2.95% 3.15% 3.34% 2.78% 2.75% 2.74%Loans / deposits 76.30% 80.10% 76.30% 77.05% 80.66% 77.79% 80.10%Core deposits/deposits 2 76.87% 69.83% 76.87% 77.45% 67.98% 69.17% 69.83%Annualized non-interest expense / average assets 3.17% 2.11% 2.33% 2.75% 2.19% 2.16% 2.01%Commercial real estate / risk-based capital 3 186.73% 162.21% 186.73% 189.47% 169.73% 163.93% 162.21%Efficiency ratio 1 71.86% 66.74% 69.42% 75.28% 74.08% 68.29% 67.25% Other Selected Data: Average yield on loans 5.83% 5.26% 5.87% 6.31% 5.64% 5.48% 5.55%Average cost of interest bearing deposits 3.08% 2.45% 2.94% 3.11% 3.21% 3.07% 3.10%Average cost of total deposits, including non-interest bearing 2.59% 2.07% 2.44% 2.59% 2.72% 2.61% 2.63%Deposits/branch 4 $100,366 $101,824 $100,366 $99,684 $100,116 $104,192 $101,824 Pre-tax, pre-provision net income 1 $13,478 $14,652 $3,764 $3,368 $2,767 $3,579 $3,431 Total revenue 1 $47,895 $44,047 $12,308 $13,627 $10,675 $11,285 $10,475 Share and Per Share Data: Cash dividends per share $0.40 $0.36 $0.10 $0.10 $0.10 $0.10 $0.09 Book value per common share $19.90 $19.59 $19.90 $19.71 $20.22 $19.97 $19.59 Tangible book value per common share 1 $18.10 $18.83 $18.10 $17.75 $19.46 $19.21 $18.83 Basic and diluted weighted average shares outstanding - Voting 4,714 4,653 4,732 4,714 4,708 4,701 4,693 Basic and diluted earnings per share - Voting 5 $0.60 $1.51 $0.69 $(0.75) $0.32 $0.34 $0.41 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 and diluted earnings per share - Series A Non-Voting 5 $0.60 $1.51 $0.69 $(0.75) $0.32 $0.34 $0.41 Common shares outstanding at period end 6,123 6,100 6,123 6,100 6,100 6,100 6,100 Pathfinder Bancorp, Inc. Capital Ratios: Company tangible common equity to tangible assets 1 7.57% 7.86% 7.57% 7.36% 8.24% 8.09% 7.86%Company Total Core Capital (to Risk-Weighted Assets) 15.70% 16.17% 15.70% 15.55% 16.19% 16.23% 16.17%Company Tier 1 Capital (to Risk-Weighted Assets) 12.04% 12.30% 12.04% 11.84% 12.31% 12.33% 12.30%Company Tier 1 Common Equity (to Risk-Weighted Assets) 11.55% 11.81% 11.55% 11.33% 11.83% 11.85% 11.81%Company Tier 1 Capital (to Assets) 8.69% 9.35% 8.69% 8.29% 9.16% 9.16% 9.35% Pathfinder Bank Capital Ratios: Bank Total Core Capital (to Risk-Weighted Assets) 14.70% 15.05% 14.70% 14.52% 16.04% 15.65% 15.05%Bank Tier 1 Capital (to Risk-Weighted Assets) 13.44% 13.80% 13.44% 13.26% 14.79% 14.39% 13.80%Bank Tier 1 Common Equity (to Risk-Weighted Assets) 13.44% 13.80% 13.44% 13.26% 14.79% 14.39% 13.80%Bank Tier 1 Capital (to Assets) 9.69% 10.11% 9.69% 9.13% 10.30% 10.13% 10.11% 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 preliminary and based on the Company's data available at the time of presentation. Years Ended December 31, 2024 2023 ASSET QUALITY: 2024 2023 Q4 Q3 Q2 Q1 Q4 Total loan charge-offs $10,183 $4,221 $1,191 $8,812 $112 $68 $211 Total recoveries 345 355 171 90 46 38 103 Net loan charge-offs 9,838 3,866 1,020 8,722 66 30 108 Allowance for credit losses at period end 17,243 15,975 17,243 17,274 16,892 16,655 15,975 Nonperforming loans at period end 22,084 17,227 22,084 16,170 24,490 19,652 17,227 Nonperforming assets at period end $22,084 $17,378 $22,084 $16,170 $24,550 $19,734 $17,378 Annualized net loan charge-offs to average loans 1.09% 0.43% 0.44% 3.82% 0.03% 0.01% 0.05%Allowance for credit losses to period end loans 1.88% 1.78% 1.88% 1.87% 1.90% 1.87% 1.78%Allowance for credit losses to nonperforming loans 78.08% 92.73% 78.08% 106.83% 68.98% 84.75% 92.73%Nonperforming loans to period end loans 2.40% 1.92% 2.40% 1.75% 2.76% 2.20% 1.92%Nonperforming assets to period end assets 1.50% 1.19% 1.50% 1.09% 1.70% 1.36% 1.19% 2024 2023 LOAN COMPOSITION: December 31, September 30, June 30, March 31, December 31, 1-4 family first-lien residential mortgages $251,373 $255,235 $250,106 $252,026 $257,604 Residential construction 4,864 4,077 309 1,689 1,355 Commercial real estate 377,619 378,805 370,361 363,467 358,707 Commercial lines of credit 67,602 64,672 62,711 67,416 72,069 Other commercial and industrial 89,800 88,247 90,813 91,178 89,803 Paycheck protection program loans 113 125 136 147 158 Tax exempt commercial loans 4,544 2,658 3,228 3,374 3,430 Home equity and junior liens 51,948 52,709 35,821 35,723 34,858 Other consumer 72,710 76,703 75,195 77,106 79,797 Subtotal loans 920,573 923,231 888,680 892,126 897,781 Deferred loan fees (1,587) (1,571) (417) (595) (574)Total loans $918,986 $921,660 $888,263 $891,531 $897,207 2024 2023 DEPOSIT COMPOSITION: December 31, September 30, June 30, March 31, December 31, Savings accounts $128,752 $129,053 $106,048 $111,465 $113,543 Time accounts 360,586 352,729 368,262 378,103 377,570 Time accounts in excess of $250,000 142,473 140,181 117,021 114,514 95,272 Money management accounts 11,583 11,520 12,154 11,676 12,364 MMDA accounts 239,016 250,007 193,915 215,101 224,707 Demand deposit interest-bearing 101,080 97,344 128,168 134,196 119,321 Demand deposit noninterest-bearing 213,719 210,110 169,145 176,434 170,169 Mortgage escrow funds 7,184 5,269 6,564 4,624 7,121 Total deposits $1,204,393 $1,196,213 $1,101,277 $1,146,113 $1,120,067 The above information is preliminary and based on the Company's data available at the time of presentation. Years Ended December 31, 2024 2023 SELECTED AVERAGE BALANCES: 2024 2023 Q4 Q3 Q4 Interest-earning assets: Loans $903,941 $899,605 $920,855 $914,467 $896,439 Taxable investment securities 423,475 379,600 412,048 415,751 403,411 Tax-exempt investment securities 30,861 30,318 34,918 30,382 27,941 Fed funds sold and interest-earning deposits 16,379 11,730 5,115 42,897 11,630 Total interest-earning assets 1,374,656 1,321,253 1,372,936 1,403,497 1,339,421 Noninterest-earning assets: Other assets 102,582 100,319 112,654 103,856 102,940 Allowance for credit losses (16,670) (17,870) (17,145) (16,537) (17,359)Net unrealized losses on available-for-sale securities (9,769) (13,600) (8,534) (9,161) (15,653)Total assets $1,450,799 $1,390,102 $1,459,911 $1,481,655 $1,409,349 Interest-bearing liabilities: NOW accounts $101,336 $92,223 $102,862 $102,868 $87,210 Money management accounts 11,679 14,116 11,371 11,828 12,518 MMDA accounts 227,597 239,182 257,429 227,247 231,957 Savings and club accounts 118,965 124,617 128,169 127,262 115,984 Time deposits 517,352 480,867 504,008 514,049 505,554 Subordinated loans 30,002 29,815 30,076 30,025 29,883 Borrowings 114,471 105,471 68,391 122,129 124,780 Total interest-bearing liabilities 1,121,402 1,086,291 1,102,306 1,135,408 1,107,886 Noninterest-bearing liabilities: Demand deposits 184,572 172,950 206,521 195,765 169,340 Other liabilities 21,923 16,037 29,491 24,856 15,858 Total liabilities 1,327,897 1,275,278 1,338,318 1,356,029 1,293,084 Shareholders' equity 122,902 114,824 121,593 125,626 116,265 Total liabilities & shareholders' equity $1,450,799 $1,390,102 $1,459,911 $1,481,655 $1,409,349 Years Ended December 31, 2024 2023 SELECTED AVERAGE YIELDS: 2024 2023 Q4 Q3 Q4 Interest-earning assets: Loans 5.83% 5.26% 5.87% 6.31% 5.55%Taxable investment securities 5.42% 4.76% 5.32% 5.59% 5.28%Tax-exempt investment securities 6.22% 6.42% 5.10% 6.17% 7.24%Fed funds sold and interest-earning deposits 4.84% 2.51% 6.41% 4.59% 2.37%Total interest-earning assets 5.70% 5.12% 5.69% 6.04% 5.47%Interest-bearing liabilities: NOW accounts 1.10% 0.58% 1.19% 1.09% 1.02%Money management accounts 0.11% 0.11% 0.11% 0.10% 0.10%MMDA accounts 3.52% 2.80% 3.23% 3.54% 3.72%Savings and club accounts 0.26% 0.22% 0.26% 0.25% 0.26%Time deposits 3.98% 3.27% 3.90% 4.09% 3.89%Subordinated loans 6.55% 6.51% 6.52% 6.61% 6.61%Borrowings 4.29% 3.35% 4.89% 4.38% 4.15%Total interest-bearing liabilities 3.29% 2.65% 3.16% 3.34% 3.31%Net interest rate spread 2.41% 2.47% 2.53% 2.70% 2.16%Net interest margin 3.01% 2.95% 3.15% 3.34% 2.74%Ratio of average interest-earning assets to average interest-bearing liabilities 122.58% 121.63% 124.55% 123.61% 120.90% The above information is preliminary and based on the Company's data available at the time of presentation. Years Ended December 31, 2024 2023 NON-GAAP RECONCILIATIONS: 2024 2023 Q4 Q3 Q2 Q1 Q4 Tangible book value per common share: Total equity $121,860 $120,246 $123,348 $121,818 $119,495 Intangible assets (11,045) (11,969) (4,612) (4,616) (4,621)Tangible common equity (non-GAAP) 110,815 108,277 118,736 117,202 114,874 Common shares outstanding 6,123 6,100 6,100 6,100 6,100 Tangible book value per common share (non-GAAP) $18.10 $17.75 $19.46 $19.21 $18.83 Tangible common equity to tangible assets: Tangible common equity (non-GAAP) $110,815 $108,277 $118,736 $117,202 $114,874 Tangible assets 1,463,829 1,471,157 1,441,599 1,449,056 1,461,177 Tangible common equity to tangible assets ratio (non-GAAP) 7.57% 7.36% 8.24% 8.09% 7.86%Return on average tangible common equity: Average shareholders' equity $122,902 $114,824 $121,593 $125,626 $123,211 $121,031 $116,265 Average intangible assets 6,468 4,629 11,907 4,691 4,614 4,619 4,623 Average tangible equity (non-GAAP) 116,434 110,195 109,686 120,935 118,597 116,412 111,642 Net income (loss) 3,760 9,293 4,284 (4,644) 2,000 2,120 2,536 Net income (loss), annualized $3,760 $9,293 $17,043 $(18,475) $8,044 $8,527 $10,061 Return on average tangible common equity (non-GAAP) 1 3.23% 8.43% 15.54% -15.28% 6.78% 7.32% 9.01%Revenue, pre-tax, pre-provision net income, and efficiency ratio: Net interest income $41,432 $38,919 $10,820 $11,732 $9,480 $9,400 $9,159 Total noninterest income 9,561 5,190 4,906 1,707 1,211 1,737 1,318 Net realized (gains) losses on sales and redemptions of investment securities (71) 62 249 (188) 16 (148) 2 Gain on asset sale 3,169 - 3,169 - - - - Revenue (non-GAAP) 2 47,895 44,047 12,308 13,627 10,675 11,285 10,475 Total non-interest expense 34,417 29,395 8,544 10,259 7,908 7,706 7,044 Pre-tax, pre-provision net income (non-GAAP) 3 $13,478 $14,652 $3,764 $3,368 $2,767 $3,579 $3,431 Efficiency ratio (non-GAAP) 4 71.86% 66.74% 69.42% 75.28% 74.08% 68.29% 67.25% 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity 2 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 agency 3 Pre-tax, pre-provision net income equals revenue less total non-interest expense 4 Efficiency ratio equals noninterest expense divided by revenue The above information is preliminary and based on the Company's data available at the time of presentation.

Pathfinder Bancorp, Inc. Announces Financial Results for Fourth Quarter and Full Year 2024

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