Pathfinder Bancorp(PBHC) - 2025 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2025, net income was $626,000 compared to a net loss of $4,616,000 for the same period in 2024, representing a significant turnaround [14]. - For the nine months ended September 30, 2025, net income reached $3,631,000, a substantial increase from a net loss of $431,000 in the prior year [14]. - Comprehensive income for the three months ended September 30, 2025, totaled $2,227,000, contrasting with a comprehensive loss of $2,546,000 in the prior year [14]. - Basic earnings per common share for voting stock was $0.58 for the nine months ended September 30, 2025, compared to a loss of $0.09 in 2024 [34]. Shareholders' Equity and Dividends - Total shareholders' equity as of September 30, 2025, was $126,339,000, an increase from $121,100,000 as of September 30, 2024 [19]. - The company declared dividends of $0.10 per share for both voting and non-voting common stock during the three months ended September 30, 2025 [17]. Cash Flow and Investments - Net cash inflows from operating activities were $9,008,000 for the nine months ended September 30, 2025, down from $13,864,000 in 2024 [23]. - The company reported a net cash inflow from investing activities of $12,152,000 for the nine months ended September 30, 2025, compared to an outflow of $26,195,000 in 2024 [23]. - Cash and cash equivalents at the end of the period increased to $40,572,000 as of September 30, 2025, from $35,324,000 at the end of the same period in 2024 [23]. Credit Quality and Losses - The provision for credit losses decreased to $5,148,000 for the nine months ended September 30, 2025, from $9,985,000 in 2024, indicating improved credit quality [23]. - The allowance for credit losses on loans is $18.7 million as of September 30, 2025, compared to $17.2 million as of December 31, 2024, indicating an increase of approximately 8.5% [53]. - The total allowance for credit losses (ACL) as of September 30, 2025, was $19.6 million, up from $16.8 million at the end of Q3 2024 [81]. Loan Portfolio and Performance - The total residential mortgage loans decreased to $240.4 million as of September 30, 2025, from $256.2 million as of December 31, 2024, reflecting a decline of approximately 6.1% [53]. - Total loans as of September 30, 2025, amounted to $898,520 thousand, a decrease from $1,134,188 thousand in 2024 [61]. - The commercial real estate loan portfolio totaled $371,683 thousand, with a pass rating of $328,969 thousand, representing approximately 88.5% of the total [61]. Securities and Fair Value - As of September 30, 2025, the total amortized cost of available-for-sale investment securities is $301,979,000, with an estimated fair value of $294,457,000, reflecting a gross unrealized loss of $9,319,000 [36]. - The fair value of available-for-sale securities was $294,457,000 as of September 30, 2025, with $290,049,000 classified under Level 2 valuation techniques [103]. - The fair value of investment securities - available-for-sale was $290,049,000 as of September 30, 2025, compared to $264,880,000 as of December 31, 2024 [118]. Nonperforming Loans and Charge-offs - Nonaccrual loans increased to $36,894,000 as of September 30, 2025, compared to $23,305,000 as of December 31, 2024, reflecting a rise of 58.5% [67]. - The total past due loans reached $35,101,000 as of December 31, 2024, with 90 days or more past due loans at $22,084,000, indicating a significant concern for collectability [66]. - Charge-offs for the nine months ended September 30, 2024, amounted to $8,993 million, while recoveries were $174 million, resulting in a net charge-off of $8,819 million [82]. Interest Rate and Derivative Activities - The fair value of derivatives resulted in a net asset position of $1.2 million at September 30, 2025, compared to $3.2 million at December 31, 2024 [124]. - The Company manages credit exposure on interest rate swap transactions through bilateral credit support agreements, ensuring minimal credit risk [130]. - Participation in fair value hedging transactions increased investment security interest income by $879,000 for the nine months ended September 30, 2025 [126]. Noninterest Income and Expenses - For the three months ended September 30, 2025, the total noninterest income was $1,503,000, a decrease from $1,707,000 in the same period of 2024, representing a decline of approximately 12% [138]. - Service charges on deposit accounts increased to $404,000 for the three months ended September 30, 2025, compared to $392,000 in 2024, reflecting a growth of about 3% [138]. - Operating lease cost for the three months ended September 30, 2025, was $39,000, down from $49,000 in 2024, indicating a decrease of approximately 20% [140].