FEDERAL
|
16-1540137
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification Number)
|
PART
I - FINANCIAL INFORMATION
|
PAGE
NO.
|
||
Item
1.
|
Consolidated
Financial Statements (Unaudited)
|
||
Consolidated
Statements of Condition
|
3
|
||
Consolidated
Statements of Income
|
4
|
||
Consolidated
Statements of Changes in Shareholders' Equity
|
5
|
||
Consolidated
Statements of Cash Flows
|
6
|
||
Notes
to Consolidated Financial Statements
|
7
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition
|
17
|
|
and
Results of Operations
|
|||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
23
|
|
Item
4T.
|
Controls
and Procedures
|
23
|
|
PART
II - OTHER INFORMATION
|
24
|
||
Item
1.
|
Legal
proceedings
|
||
Item
1A.
|
Risk
Factors
|
||
Item
2.
|
Unregistered
sales of equity securities and use of proceeds
|
||
Item
3.
|
Defaults
upon senior securities
|
||
Item
4.
|
Removed
and Reserved
|
||
Item
5.
|
Other
information
|
||
Item
6.
|
Exhibits
|
||
SIGNATURES
|
25
|
||
EXHIBITS
|
26
|
March
31,
|
December
31,
|
|||||||
(In
thousands, except share data)
|
2010
|
2009
|
||||||
ASSETS:
|
||||||||
Cash
and due from banks
|
$ | 8,258 | $ | 8,678 | ||||
Interest
earning deposits
|
13,144 | 5,953 | ||||||
Total
cash and cash equivalents
|
21,402 | 14,631 | ||||||
Investment
securities, at fair value
|
80,072 | 72,754 | ||||||
Federal
Home Loan Bank stock, at cost
|
1,764 | 1,899 | ||||||
Loans
|
262,214 | 262,465 | ||||||
Less:
Allowance for loan losses
|
3,280 | 3,078 | ||||||
Loans
receivable, net
|
258,934 | 259,387 | ||||||
Premises
and equipment, net
|
7,631 | 7,173 | ||||||
Accrued
interest receivable
|
1,588 | 1,482 | ||||||
Foreclosed
real estate
|
141 | 181 | ||||||
Goodwill
|
3,840 | 3,840 | ||||||
Bank
owned life insurance
|
7,039 | 6,956 | ||||||
Other
assets
|
4,331 | 3,389 | ||||||
Total
assets
|
$ | 386,742 | $ | 371,692 | ||||
LIABILITIES AND SHAREHOLDERS'
EQUITY:
|
||||||||
Deposits:
|
||||||||
Interest-bearing
|
$ | 285,541 | $ | 269,539 | ||||
Noninterest-bearing
|
29,055 | 27,300 | ||||||
Total
deposits
|
314,596 | 296,839 | ||||||
Long-term
borrowings
|
33,000 | 36,000 | ||||||
Junior
subordinated debentures
|
5,155 | 5,155 | ||||||
Other
liabilities
|
3,876 | 4,460 | ||||||
Total
liabilities
|
356,627 | 342,454 | ||||||
Shareholders'
equity:
|
||||||||
Preferred
stock, par value $0.01 per share; $1,000 liquidation
preference;
|
||||||||
1,000,000
shares authorized; 6,771 shares issued and outstanding
|
6,131 | 6,101 | ||||||
Common
stock, par value $0.01; authorized 10,000,000 shares;
|
||||||||
2,972,119 and 2,484,832 shares issued and outstanding
respectively
|
30 | 30 | ||||||
Additional
paid in capital
|
8,615 | 8,615 | ||||||
Retained
earnings
|
22,830 | 22,419 | ||||||
Accumulated
other comprehensive loss
|
(989 | ) | (1,425 | ) | ||||
Treasury
stock, at cost; 487,287 shares
|
(6,502 | ) | (6,502 | ) | ||||
Total
shareholders' equity
|
30,115 | 29,238 | ||||||
Total
liabilities and shareholders' equity
|
$ | 386,742 | $ | 371,692 | ||||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
For
the three
|
For
the three
|
|||||||
|
months
ended
|
months
ended
|
||||||
(In
thousands, except per share data)
|
March
31, 2010
|
March
31, 2009
|
||||||
Interest
and dividend income:
|
||||||||
Loans,
including fees
|
$ | 3,783 | $ | 3,627 | ||||
Debt
securities:
|
||||||||
Taxable
|
544 | 711 | ||||||
Tax-exempt
|
48 | 10 | ||||||
Dividends
|
83 | 81 | ||||||
Federal
funds sold and interest earning deposits
|
2 | 1 | ||||||
Total
interest income
|
4,460 | 4,430 | ||||||
Interest
expense:
|
||||||||
Interest
on deposits
|
843 | 1,297 | ||||||
Interest
on short-term borrowings
|
- | 14 | ||||||
Interest
on long-term borrowings
|
347 | 406 | ||||||
Total
interest expense
|
1,190 | 1,717 | ||||||
Net
interest income
|
3,270 | 2,713 | ||||||
Provision
for loan losses
|
263 | 135 | ||||||
Net
interest income after provision for loan losses
|
3,007 | 2,578 | ||||||
Noninterest
income:
|
||||||||
Service
charges on deposit accounts
|
389 | 351 | ||||||
Earnings
on bank owned life insurance
|
83 | 56 | ||||||
Loan
servicing fees
|
57 | 56 | ||||||
Net
gains on sales of investment securities
|
11 | 87 | ||||||
Net
(losses) gains on sales of loans and foreclosed real
estate
|
(19 | ) | 80 | |||||
Debit
card interchange fees
|
72 | 64 | ||||||
Other
charges, commissions & fees
|
117 | 105 | ||||||
Total
noninterest income
|
710 | 799 | ||||||
Noninterest
expense:
|
||||||||
Salaries
and employee benefits
|
1,563 | 1,372 | ||||||
Building
occupancy
|
314 | 323 | ||||||
Data
processing expenses
|
328 | 339 | ||||||
Professional
and other services
|
192 | 172 | ||||||
FDIC
assessment
|
128 | 47 | ||||||
Other
expenses
|
337 | 320 | ||||||
Total
noninterest expenses
|
2,862 | 2,573 | ||||||
Income
before income taxes
|
855 | 804 | ||||||
Provision
for income taxes
|
255 | 225 | ||||||
Net income
|
600 | 579 | ||||||
Preferred
stock dividends and discount accretion
|
115 | - | ||||||
Net
income available to common shareholders
|
$ | 485 | $ | 579 | ||||
Earnings
per common share - basic
|
$ | 0.20 | $ | 0.23 | ||||
Earnings
per common share - diluted
|
$ | 0.20 | $ | 0.23 | ||||
Dividends
per common share
|
$ | 0.03 | $ | - |
Pathfinder
Bancorp, Inc.
|
Consolidated
Statements of Changes in Shareholders' Equity
|
Three
Months Ended March 31, 2010 and March 31, 2009
|
(Unaudited)
|
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
Other
Com-
|
|||||||||||||||||||||||||||
Preferred
|
Common
|
Paid
in
|
Retained
|
prehensive
|
Treasury
|
|||||||||||||||||||||||
(In
thousands, except share data)
|
Stock
|
Stock
|
Capital
|
Earnings
|
Loss
|
Stock
|
Total
|
|||||||||||||||||||||
Balance,
January 1, 2010
|
$ | 6,101 | $ | 30 | $ | 8,615 | $ | 22,419 | $ | (1,425 | ) | $ | (6,502 | ) | $ | 29,238 | ||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
600 | 600 | ||||||||||||||||||||||||||
Other
comprehensive income, net of tax:
|
||||||||||||||||||||||||||||
Unrealized
holding gains on securities
|
||||||||||||||||||||||||||||
available
for sale (net of $247 tax expense)
|
370 | 370 | ||||||||||||||||||||||||||
Unrealized
holding gains on financial
|
||||||||||||||||||||||||||||
derivative
(net of $22 tax expense)
|
33 | 33 | ||||||||||||||||||||||||||
Retirement
plan net gains and transition
|
||||||||||||||||||||||||||||
obligation
recognized in plan expenses
|
||||||||||||||||||||||||||||
(net
of $22 tax expense)
|
33 | 33 | ||||||||||||||||||||||||||
Total
Comprehensive income
|
1,036 | |||||||||||||||||||||||||||
Preferred
stock discount accretion
|
30 | (30 | ) | - | ||||||||||||||||||||||||
Preferred
stock dividends
|
(85 | ) | (85 | ) | ||||||||||||||||||||||||
Common
stock dividends declared ($0.03 per share)
|
(74 | ) | (74 | ) | ||||||||||||||||||||||||
Balance,
March 31, 2010
|
$ | 6,131 | $ | 30 | $ | 8,615 | $ | 22,830 | $ | (989 | ) | $ | (6,502 | ) | $ | 30,115 | ||||||||||||
Balance,
January 1, 2009
|
- | $ | 30 | $ | 7,909 | $ | 21,198 | $ | (3,140 | ) | $ | (6,502 | ) | $ | 19,495 | |||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
579 | 579 | ||||||||||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||||||
Unrealized
holding losses on securities
|
||||||||||||||||||||||||||||
available
for sale (net of $1 tax benefit)
|
(306 | ) | (306 | ) | ||||||||||||||||||||||||
Retirement
plan net losses and transition
|
||||||||||||||||||||||||||||
obligation
recognized in plan expenses
|
||||||||||||||||||||||||||||
(net
of $28 tax expense)
|
42 | 42 | ||||||||||||||||||||||||||
Total
Comprehensive income
|
315 | |||||||||||||||||||||||||||
Balance,
March 31, 2009
|
- | $ | 30 | $ | 7,909 | $ | 21,777 | $ | (3,404 | ) | $ | (6,502 | ) | $ | 19,810 |
The
accompanying notes are an integral part of the consolidated financial
statements.
|
For
the three
|
For
the three
|
|||||||
|
months
ended
|
months
ended
|
||||||
(In
thousands)
|
March
31, 2010
|
March
31, 2009
|
||||||
OPERATING
ACTIVITIES
|
||||||||
Net
income
|
$ | 600 | $ | 579 | ||||
Adjustments
to reconcile net income to net cash (used in) provided by operating
activities:
|
||||||||
Provision
for loan losses
|
263 | 135 | ||||||
Proceeds
from sales of loans
|
145 | 5,590 | ||||||
Originations
of loans held-for-sale
|
(146 | ) | (5,510 | ) | ||||
Realized
losses (gains) on sales of:
|
||||||||
Real
estate acquired through foreclosure
|
18 | - | ||||||
Premises
and equipment
|
1 | - | ||||||
Loans
|
1 | (80 | ) | |||||
Available-for-sale
investment securities
|
(11 | ) | (87 | ) | ||||
Depreciation
|
160 | 163 | ||||||
Amortization
of mortgage servicing rights
|
8 | 6 | ||||||
Amortization
of deferred loan costs
|
54 | 50 | ||||||
Earnings
on bank owned life insurance
|
(83 | ) | (56 | ) | ||||
Net
amortization (accretion) of premiums and discounts on investment
securities
|
79 | (214 | ) | |||||
(Increase)
decrease in accrued interest receivable
|
(106 | ) | 117 | |||||
Net
change in other assets and liabilities
|
(1,715 | ) | (340 | ) | ||||
Net
cash (used in) provided by operating activities
|
(732 | ) | 353 | |||||
INVESTING
ACTIVITIES
|
||||||||
Purchase
of investment securities available-for-sale
|
(17,163 | ) | (12,627 | ) | ||||
Net
proceeds from the redemption of Federal Home Loan Bank
stock
|
135 | 656 | ||||||
Proceeds
from maturities and principal reductions of
|
||||||||
investment
securities available-for-sale
|
9,356 | 3,633 | ||||||
Proceeds
from sale of:
|
||||||||
Available-for-sale
investment securities
|
1,038 | 6,559 | ||||||
Real
estate acquired through foreclosure
|
22 | - | ||||||
Premises
and equipment
|
24 | - | ||||||
Net
decrease in loans
|
136 | 1,744 | ||||||
Purchase
of premises and equipment
|
(643 | ) | (28 | ) | ||||
Net
cash used in investing activities
|
(7,095 | ) | (63 | ) | ||||
FINANCING
ACTIVITIES
|
||||||||
Net
increase in demand deposits, NOW accounts, savings
accounts,
|
||||||||
money
management deposit accounts, MMDA accounts and escrow
deposits
|
24,829 | 16,425 | ||||||
Net
(decrease) increase in time deposits
|
(7,072 | ) | 7,167 | |||||
Net
repayments on short-term borrowings
|
- | (16,575 | ) | |||||
Payments
on long-term borrowings
|
(3,000 | ) | - | |||||
Proceeds
from long-term borrowings
|
- | 2,000 | ||||||
Cash
dividends paid to preferred shareholders
|
(85 | ) | - | |||||
Cash
dividends paid to common shareholders
|
(74 | ) | (255 | ) | ||||
Net
cash provided by financing activities
|
14,598 | 8,762 | ||||||
Increase
in cash and cash equivalents
|
6,771 | 9,052 | ||||||
Cash
and cash equivalents at beginning of period
|
14,631 | 7,678 | ||||||
Cash
and cash equivalents at end of period
|
$ | 21,402 | $ | 16,730 | ||||
CASH
PAID DURING THE PERIOD FOR:
|
||||||||
Interest
|
$ | 1,199 | $ | 1,700 | ||||
Income
taxes
|
401 | 521 | ||||||
NON-CASH
INVESTING ACTIVITY
|
||||||||
Transfer
of loans to foreclosed real estate
|
- | 45 | ||||||
|
||||||||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
(In
thousands)
|
2010
|
2009
|
||||||
|
||||||||
Service
cost
|
$ | 65 | $ | 57 | ||||
Interest
cost
|
94 | 83 | ||||||
Expected
return on plan assets
|
(126 | ) | (68 | ) | ||||
Amortization
of net losses
|
50 | 65 | ||||||
Net
periodic benefit cost
|
$ | 83 | $ | 137 |
(In
thousands)
|
2010
|
2009
|
||||||
|
||||||||
Service
cost
|
$ | - | $ | 1 | ||||
Interest
cost
|
5 | 5 | ||||||
Amortization
of transition obligation
|
5 | 5 | ||||||
Net
periodic benefit cost
|
$ | 10 | $ | 11 |
(In
thousands)
|
2010
|
2009
|
||||||
Unrealized
holding gains (losses) on securities available for sale:
|
||||||||
Unrealized
holding gains (losses) arising during the period
|
$ | 628 | $ | (220 | ) | |||
Reclassification
adjustment for net gains included in net income
|
(11 | ) | (87 | ) | ||||
Net
unrealized gains (losses) on securities available for sale
|
617 | (307 | ) | |||||
Unrealized
holding gains on financial derivative:
|
||||||||
Unrealized
holding gains arising during the period
|
55 | - | ||||||
Net
unrealized gains on financial derivative
|
55 | - | ||||||
Defined
benefit pension and post retirement plans:
|
||||||||
Reclassification
adjustment for amortization of benefit plans' net loss
|
||||||||
and
transition obligation recognized in net periodic expense
|
55 | 70 | ||||||
Net
change in defined benefit plan
|
55 | 70 | ||||||
Other
comprehensive income (loss) before tax
|
727 | (237 | ) | |||||
Tax
effect
|
(291 | ) | (27 | ) | ||||
Other
comprehensive income (loss)
|
$ | 436 | $ | (264 | ) |
March
31,
|
December
31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Unrealized
gains on securities available for sale
|
||||||||
(net
of tax expense 2010 - $413; 2009 - $166)
|
$ | 619 | $ | 249 | ||||
Unrealized
gains on financial derivative
|
||||||||
(net
of tax expense 2010 - $22; 2009 - $0)
|
33 | - | ||||||
Net
pension losses
|
||||||||
(net
of tax benefit 2010 - $1,080; 2009 - $1,100)
|
(1,619 | ) | (1,649 | ) | ||||
Net
post-retirement transition obligation
|
||||||||
(net
of tax benefit 2010 - $15; 2009 - $17)
|
(22 | ) | (25 | ) | ||||
$ | (989 | ) | $ | (1,425 | ) |
March
31, 2010
|
||||||||||||||||
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
(In
thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Bond investment securities:
|
||||||||||||||||
US
Treasury and Agencies
|
$ | 21,131 | $ | 39 | $ | (62 | ) | $ | 21,108 | |||||||
State
and political subdivisions
|
13,440 | 322 | (38 | ) | 13,724 | |||||||||||
Corporate
|
5,324 | 235 | (527 | ) | 5,032 | |||||||||||
Residential
mortgage-backed
|
33,975 | 1,031 | (96 | ) | 34,910 | |||||||||||
Total
|
73,870 | 1,627 | (723 | ) | 74,774 | |||||||||||
Equity investment
securities:
|
||||||||||||||||
Mutual
funds
|
4,790 | 125 | - | 4,915 | ||||||||||||
Common
stock
|
380 | 3 | - | 383 | ||||||||||||
Total
|
5,170 | 128 | - | 5,298 | ||||||||||||
Total
investment securities
|
$ | 79,040 | $ | 1,755 | $ | (723 | ) | $ | 80,072 |
December
31, 2009
|
||||||||||||||||
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
(In
thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Bond investment securities:
|
||||||||||||||||
US
Treasury and Agencies
|
$ | 14,528 | $ | 30 | $ | (26 | ) | $ | 14,532 | |||||||
State
and political subdivisions
|
8,989 | 20 | (81 | ) | 8,928 | |||||||||||
Corporate
|
5,333 | 194 | (562 | ) | 4,965 | |||||||||||
Residential
mortgage-backed
|
36,124 | 989 | (173 | ) | 36,940 | |||||||||||
Total
|
64,974 | 1,233 | (842 | ) | 65,365 | |||||||||||
Equity investment
securities:
|
||||||||||||||||
Mutual
funds
|
4,790 | 24 | - | 4,814 | ||||||||||||
Common
stock
|
372 | - | - | 372 | ||||||||||||
Total
|
5,162 | 24 | - | 5,186 | ||||||||||||
Other
investments
|
2,203 | - | - | 2,203 | ||||||||||||
Total
investment securities
|
$ | 72,339 | $ | 1,257 | $ | (842 | ) | $ | 72,754 |
Amortized
|
Estimated
|
|||||||
Cost
|
Fair
Value
|
|||||||
(In
thousands)
|
||||||||
Due
in one year or less
|
$ | 595 | $ | 597 | ||||
Due
after one year through five years
|
22,930 | 23,180 | ||||||
Due
after five years through ten years
|
6,725 | 6,833 | ||||||
Due
after ten years
|
9,645 | 9,254 | ||||||
Mortgage-backed
securities
|
33,975 | 34,910 | ||||||
Totals
|
$ | 73,870 | $ | 74,774 |
March
31, 2010
|
||||||||||||||||||||||||
|
Less
than Twelve Months
|
Twelve
Months or More
|
Total
|
|||||||||||||||||||||
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|||||||||||||||||||
Losses
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
|||||||||||||||||||
(In
thousands)
|
|
|||||||||||||||||||||||
US
Treasury and Agencies
|
$ | (62 | ) | $ | 10,571 | $ | - | $ | - | $ | (62 | ) | $ | 10,571 | ||||||||||
State
and political subdivisions
|
(38 | ) | 2,345 | - | - | (38 | ) | 2,345 | ||||||||||||||||
Corporate
|
- | - | (527 | ) | 1,438 | (527 | ) | 1,438 | ||||||||||||||||
Residential
mortgage-backed
|
(84 | ) | 3,859 | (12 | ) | 340 | (96 | ) | 4,199 | |||||||||||||||
$ | (184 | ) | $ | 16,775 | $ | (539 | ) | $ | 1,778 | $ | (723 | ) | $ | 18,553 | ||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
December
31, 2009
|
||||||||||||||||||||||||
|
Less
than Twelve Months
|
Twelve
Months or More
|
Total
|
|||||||||||||||||||||
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|||||||||||||||||||
Losses
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
US
Treasury and Agencies
|
$ | (26 | ) | $ | 4,996 | $ | - | $ | - | $ | (26 | ) | $ | 4,996 | ||||||||||
State
and political subdivisions
|
(81 | ) | 2,988 | - | - | (81 | ) | 2,988 | ||||||||||||||||
Corporate
|
- | - | (562 | ) | 1,402 | (562 | ) | 1,402 | ||||||||||||||||
Residential
mortgage-backed
|
(149 | ) | 9,665 | (24 | ) | 545 | (173 | ) | 10,210 | |||||||||||||||
$ | (256 | ) | $ | 17,649 | $ | (586 | ) | $ | 1,947 | $ | (842 | ) | $ | 19,596 |
(In
thousands)
|
Total
|
|||
Beginning
balance – January 1, 2010
|
$ | 875 | ||
Initial
credit impairment
|
- | |||
Subsequent
credit impairments
|
- | |||
Reductions
for amounts recognized in earnings due to intent or requirement to
sell
|
- | |||
Reductions
for securities sold
|
- | |||
Reductions
for increases in cash flows expected to be collected
|
- | |||
Ending
balance - March 31, 2010
|
$ | 875 |
(In
thousands)
|
2010
|
2009
|
||||||
Realized
gains
|
$ | 11 | $ | 96 | ||||
Realized
losses
|
- | (9 | ) | |||||
$ | 11 | $ | 87 |
·
|
Level
1 – Quoted prices (unadjusted) for identical assets or liabilities in
active markets that the entity has the ability to access as of the
measurement date.
|
·
|
Level
2 – Quoted prices for similar assets and liabilities in active markets;
quoted prices for identical or similar assets or liabilities in markets
that are not active; and model-derived valuations in which all significant
inputs and significant value drivers are observable in active
markets.
|
·
|
Level
3 – Model derived valuations in which one or more significant inputs or
significant value drivers are
unobservable.
|
At
March 31, 2010
|
||||||||||||||||
Total
Fair
|
||||||||||||||||
(In
thousands)
|
Level
1
|
Level
2
|
Level
3
|
Value
|
||||||||||||
Investment
securities available for sale
|
$ | 2,192 | $ | 77,880 | $ | - | $ | 80,072 | ||||||||
Interest
rate swap derivative
|
- | 56 | - | 56 | ||||||||||||
At
December 31, 2009
|
||||||||||||||||
Total
Fair
|
||||||||||||||||
(In
thousands)
|
Level
1
|
Level
2
|
Level
3
|
Value
|
||||||||||||
Investment
securities available for sale
|
$ | 2,088 | $ | 70,666 | $ | - | $ | 72,754 | ||||||||
Interest
rate swap derivative
|
- | 1 | - | 1 |
At
March 31, 2010
|
||||||||||||||||
Total
Fair
|
||||||||||||||||
(In
thousands)
|
Level
1
|
Level
2
|
Level
3
|
Value
|
||||||||||||
Impaired
loans
|
$ | - | $ | - | $ | 799 | $ | 799 | ||||||||
At
December 31, 2009
|
||||||||||||||||
Total
Fair
|
||||||||||||||||
(In
thousands)
|
Level
1
|
Level
2
|
Level
3
|
Value
|
||||||||||||
Impaired
loans
|
$ | - | $ | - | $ | 907 | $ | 907 |
March
31, 2010
|
December
31, 2009
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
(Dollars
in thousands)
|
Amounts
|
Fair
Values
|
Amounts
|
Fair
Values
|
||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 21,402 | $ | 21,402 | $ | 14,631 | $ | 14,631 | ||||||||
Investment
securities
|
80,072 | 80,072 | 72,754 | 72,754 | ||||||||||||
Net
loans
|
258,934 | 266,358 | 259,387 | 266,290 | ||||||||||||
Federal
Home Loan Bank stock
|
1,764 | 1,764 | 1,899 | 1,899 | ||||||||||||
Accrued
interest receivable
|
1,588 | 1,588 | 1,482 | 1,482 | ||||||||||||
Mortgage
servicing rights
|
53 | 53 | 61 | 61 | ||||||||||||
Interest
rate swap derivative
|
56 | 56 | 1 | 1 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Deposits
|
$ | 314,596 | $ | 317,286 | $ | 296,839 | $ | 299,613 | ||||||||
Borrowed
funds
|
33,000 | 34,125 | 36,000 | 37,116 | ||||||||||||
Junior
subordinated debentures
|
5,155 | 5,155 | 5,155 | 5,155 | ||||||||||||
Accrued
interest payable
|
181 | 181 | 189 | 189 | ||||||||||||
Off-balance
sheet instruments:
|
||||||||||||||||
Standby
letters of credit
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Commitments
to extend credit
|
- | - | - | - |
March
31,
|
December
31,
|
||||||||
(In
thousands)
|
2010
|
2009
|
|||||||
Cash
flow hedge:
|
|||||||||
Interest
rate swap
|
Other
assets
|
$ | 56 | $ | 1 |
(In
thousands)
|
2010
|
|||
Balance
as of January 1:
|
$ | 1 | ||
Amount
of gain recognized in other comprehensive income
|
33 | |||
Amount
of gain (loss) recognized in earnings
|
- | |||
Change
in deferred taxes
|
22 | |||
Balance
as of March 31:
|
$ | 56 |
·
|
A
reporting entity to disclose separately the amounts of significant
transfers in and out of Level 1 and Level 2 fair value measurements and
describe the reasons for the transfers;
and
|
·
|
In
the reconciliation for fair value measurements using significant
unobservable inputs, a reporting entity should present separately
information about purchases, sales, issuances, and
settlements.
|
·
|
For
purposes of reporting fair value measurement for each class of assets and
liabilities, a reporting entity needs to use judgment in determining the
appropriate classes of assets and liabilities;
and
|
·
|
A
reporting entity should provide disclosures about the valuation techniques
and inputs used to measure fair value for both recurring and nonrecurring
fair value measurements.
|
Three
Months Ended March 31,
|
||||||||||||||||
(in
thousands)
|
2010
|
2009
|
Change
|
|||||||||||||
Service
charges on deposit accounts
|
$ | 389 | $ | 351 | $ | 38 | 10.8 | % | ||||||||
Earnings
on bank owned life insurance
|
83 | 56 | 27 | 48.2 | % | |||||||||||
Loan
servicing fees
|
57 | 56 | 1 | 1.8 | % | |||||||||||
Debit
card interchange fees
|
72 | 64 | 8 | 12.5 | % | |||||||||||
Other
charges, commissions and fees
|
117 | 105 | 12 | 11.4 | % | |||||||||||
Noninterest
income before gains (losses)
|
718 | 632 | 86 | 13.6 | % | |||||||||||
Net
gains on sales of investment securities
|
11 | 87 | (76 | ) | -87.4 | % | ||||||||||
Net
gains (losses) on sales of loans and foreclosed real
estate
|
(19 | ) | 80 | (99 | ) | -123.8 | % | |||||||||
Total
noninterest income
|
$ | 710 | $ | 799 | $ | (89 | ) | -11.1 | % |
Three
Months Ended March 31,
|
||||||||||||||||
(In
thousands)
|
2010
|
2009
|
Change
|
|||||||||||||
Salaries
and employee benefits
|
$ | 1,563 | $ | 1,372 | $ | 191 | 13.9 | % | ||||||||
Building
occupancy
|
314 | 323 | (9 | ) | -2.8 | % | ||||||||||
Data
processing
|
328 | 339 | (11 | ) | -3.2 | % | ||||||||||
Professional
and other services
|
192 | 172 | 20 | 11.6 | % | |||||||||||
FDIC
assessments
|
128 | 47 | 81 | 172.3 | % | |||||||||||
Other
operating
|
337 | 320 | 17 | 5.3 | % | |||||||||||
Total
noninterest expenses
|
$ | 2,862 | $ | 2,573 | $ | 289 | 11.2 | % |
March
31,
|
December
31,
|
|||||||
(In
thousands)
|
2010
|
2009
|
||||||
Nonaccrual
loans:
|
||||||||
Commercial
real estate and commercial
|
$ | 2,704 | $ | 1,021 | ||||
Consumer
|
329 | 111 | ||||||
Real
estate - residential
|
943 | 1,181 | ||||||
Total
nonaccrual loans
|
3,976 | 2,313 | ||||||
Foreclosed
real estate
|
141 | 181 | ||||||
Total
non-performing assets
|
$ | 4,117 | $ | 2,494 | ||||
Non-performing
loans to total loans
|
1.52 | % | 0.88 | % | ||||
Non-performing
assets to total assets
|
1.06 | % | 0.67 | % | ||||
Interest
income that would have been recorded
|
||||||||
under
the original terms of the loans
|
$ | 176 | $ | 113 |
Certification
of Chief Executive Officer
Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
|
|||
I,
Thomas W. Schneider, certify that:
|
|||
1. I
have reviewed this Quarterly Report on Form 10-Q of Pathfinder Bancorp,
Inc.;
|
|||
2. Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|||
3. Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|||
4. The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
(a) Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Designed
such internal control over financial reporting, or caused such internal
control over financial reporting, to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|||
(c) Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|||
(d) Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|||
5. The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors:
|
|||
(a) All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|||
(b) Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
|||
May 14, 2010
|
/s/ Thomas W. Schneider
Thomas
W. Schneider
President
and Chief Executive Officer
|
Certification
of Chief Financial Officer
Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
|
|||
I,
James A. Dowd, certify that:
|
|||
1. I
have reviewed this Quarterly Report on Form 10-Q of Pathfinder Bancorp,
Inc.;
|
|||
2. Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
|
|||
3. Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|||
4. The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
(a)
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b)
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting, to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
|
|||
(c)
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such
evaluation; and
|
|||
(d)
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
|
|||
5. The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors:
|
|||
(a)
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|||
(b)
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
|||
May 14, 2010
|
/s/ James A. Dowd
James
A. Dowd
Senior
Vice President and Chief Financial Officer
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
|
|
Thomas
W. Schneider, President and Chief Executive Officer, and James A. Dowd,
Senior Vice President and Chief Financial Officer of Pathfinder Bancorp,
Inc. (the "Company"), each certify in his capacity as an officer of the
Company that he has reviewed the Quarterly Report of the Company on Form
10-Q for the quarter ended March 31, 2010 and that to the best of his
knowledge:
|
|
1. the
report fully complies with the requirements of Sections 13(a) of the
Securities Exchange Act of 1934; and
|
|
2. the
information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
The
purpose of this statement is solely to comply with Title 18, Chapter 63,
Section 1350 of the United States Code, as amended by Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
May 14, 2010
|
/s/ Thomas W. Schneider
Thomas
W. Schneider
President
and Chief Executive Officer
|
May 14, 2010
|
/s/ James A. Dowd
James
A. Dowd
Senior
Vice President and Chief Financial
Officer
|