Pathfinder Bancorp, Inc. Announces Second Quarter 2025 Results

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 ExpenseNoninterest 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 IncomeFor 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 ConditionAs 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 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 $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 DeclaredOn 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 equity2 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 asset4 Pre-tax, pre-provision net income equals revenue less total non-interest expense5 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, CEOJustin K. Bigham, Senior Vice President, CFOTelephone: (315) 343-0057

Pathfinder Bancorp, Inc. Announces Second Quarter 2025 Results

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