Financial Data and Key Metrics Changes - The company's net income increased over 23% compared to the prior quarter, driven by higher net interest and noninterest income, good expense control, and lower provision expense [7] - Total loans increased by approximately $59 million or 0.4% from the prior quarter, with the largest increase in the C and I portfolio [8] - Total deposits increased slightly in the second quarter, with public deposits growing by $166 million, offsetting declines in commercial and retail deposits [10] - Net interest income was $163.6 million, up $3.1 million from the prior quarter, with a net interest margin (NIM) of 3.11%, an increase of three basis points [11] Business Line Data and Key Metrics Changes - The C and I portfolio saw a $125 million increase in dealer floorplan balances, while payoffs from completed construction projects offset some growth [9] - Retail deposits decreased by $23 million, and commercial deposits fell by $127 million due to normal operational fluctuations [10] - Noninterest income was $54 million in the quarter, with expectations for recurring noninterest income to be around $51 million per quarter [12] Market Data and Key Metrics Changes - The statewide seasonally adjusted unemployment rate was 2.8% in June, compared to the national rate of 4.1% [5] - Visitor arrivals were up 2.8% compared to last year, with year-to-date spending at $9 billion, an increase of 6.5% compared to 2024 [6] Company Strategy and Development Direction - The company plans to maintain its investment portfolio balance and has resumed reinvesting cash flows from the investment portfolio [7] - Capital priorities include organic growth, maintaining a stable dividend, and share repurchases, with $50 million remaining under the approved 2025 stock repurchase plan [7][26] Management Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty regarding tariffs affecting car dealers, tourism spending has remained strong, particularly from the U.S. mainland [24] - The company expects full-year loan growth to be in the low single digits, adjusting guidance due to the performance of construction loans [22] Other Important Information - The bank recorded a $4.5 million provision for credit losses in the second quarter, with classified assets increasing by $31.6 million [13][15] - The allowance for credit losses increased to $167.8 million, with coverage remaining flat at 1.17% of total loans and leases [15] Q&A Session Summary Question: What is the outlook for C and I growth and demand from CRE borrowers? - Most C and I growth came from dealer floor plans, with a current balance of $786 million, up $125 million from the previous quarter. There is uncertainty regarding future balances due to tariffs [20][21] Question: How are capital priorities evolving? - Capital priorities remain focused on organic growth, stable dividends, and share repurchases, with more repurchase authority expected to be utilized in the back half of the year [26] Question: What is the impact of the tax law change on the tax rate outlook? - The effective tax rate outlook for the rest of the year is 23.2%, slightly higher than the previous estimate of 23% [45] Question: What is the outlook for loan growth and competition in the market? - Loan growth is expected to be lower than initially anticipated, with competition primarily from institutional buyers for completed construction loans [52][73]

Financial Data and Key Metrics Changes - The company's net income increased over 23% compared to the prior quarter, driven by higher net interest and noninterest income, good expense control, and lower provision expense [6] - Total loans increased by approximately $59 million or 0.4% from the prior quarter, with the largest increase in the C and I portfolio [7] - Net interest income was $163.6 million, up $3.1 million from the prior quarter, with a net interest margin (NIM) of 3.11%, an increase of three basis points [11] Business Line Data and Key Metrics Changes - The C and I portfolio saw a significant increase of $125 million in dealer floorplan balances, while payoffs from completed construction projects offset some of this growth [7] - Total deposits increased slightly, with public deposits growing by $166 million, while commercial and retail deposits declined [10] - Noninterest income was $54 million in the quarter, with expectations for recurring noninterest income to be around $51 million per quarter [12] Market Data and Key Metrics Changes - The statewide seasonally adjusted unemployment rate was 2.8% in June, compared to the national rate of 4.1% [4] - Visitor arrivals were up 2.8% compared to last year, with year-to-date spending reaching $9 billion, an increase of 6.5% compared to 2024 [5] Company Strategy and Development Direction - The company plans to maintain its investment portfolio balance and has resumed reinvesting cash flows from the investment portfolio [6] - Capital priorities include organic growth, maintaining a stable dividend, and share repurchases, with a focus on deploying capital effectively in the back half of the year [26] Management's Comments on Operating Environment and Future Outlook - Management expects full-year loan growth to be in the low single digits, reflecting a cautious outlook due to uncertainties in the market [8] - The company is not observing broad signs of weakness in credit performance, with credit risk remaining low and stable [13] Other Important Information - The company recorded a $4.5 million provision for credit losses in the second quarter, with the allowance for credit losses increasing to $167.8 million [15] - The effective tax rate outlook for the rest of the year is projected at 23.2%, slightly higher than the previous estimate [47] Q&A Session Summary Question: How is the pipeline in terms of C and I? - Most of the C and I growth came from dealer floor plans, which have normalized, and there is uncertainty regarding future balances due to tariffs [20] Question: Have tariffs impacted tourism spending? - Tariffs have created uncertainty for car dealers but have not significantly impacted tourism spending, which has increased [24] Question: What are the capital priorities moving forward? - Capital priorities include organic growth, maintaining dividends, and share repurchases, with a focus on deploying repurchase authority in the back half of the year [26] Question: What is the outlook for M&A? - The company is open to considering M&A opportunities but currently has no specific targets [34] Question: What impacted loan yields in the second quarter? - The mix of loans, with higher margin loans being paid off and replaced by lower margin loans, affected loan yields [37] Question: What is the outlook for fee income in the third quarter? - Fee income is expected to be in the range of $51 million to $52 million for the third quarter [40] Question: What is driving the increase in residential mortgage non-performers? - The consumer at the lower end is getting stretched, leading to an increase in non-performing loans, but the company is not concerned about loss content [64] Question: How does the company view the increase in commercial criticized assets? - Most criticized assets are expected to cure themselves, and the company remains confident in its credit portfolio [71]

Financial Data and Key Metrics Changes - Net income increased by 36% from the prior quarter, reaching $42.7 million or $0.50 per share, with adjusted net income rising 39% sequentially to $44.5 million or $0.52 per share [4][7] - Return on assets improved to 1.08%, and return on tangible common equity rose to 12.8%, with an efficiency ratio of 55% excluding merger-related charges [8] - Tangible book value per share increased by 12% year over year to $17.19 [9][10] Business Line Data and Key Metrics Changes - Annualized loan growth reached 6.4%, with loan production of $854 million in the second quarter [4][16] - Net interest income rose by 7% from the prior quarter to $126.9 million, with net interest margin expanding by 10 basis points to 3.58% [9][11] - Noninterest income, excluding securities activity, increased by 10% year over year to $24.5 million, driven by treasury management services and wealth management [13] Market Data and Key Metrics Changes - Total deposits decreased by $77 million, reflecting seasonal slowness and a strategic focus on exiting high-rate deposit relationships [21] - Customer transaction accounts represented 47% of total deposits, indicating a strong relationship-focused approach [22] Company Strategy and Development Direction - The company successfully closed the Heartland Bancshares acquisition and is on track to close the Villages Bancorporation acquisition, which is expected to enhance profitability [5][10] - The company aims to maintain a strong capital position and continue organic growth while integrating recent acquisitions [24][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook, citing strong economic conditions and demand for credit, with expectations for mid to high single-digit loan growth [34][36] - The competitive landscape is becoming increasingly competitive, particularly in commercial real estate, but the company remains optimistic about its growth trajectory [35][66] Other Important Information - The allowance for credit losses totaled $142.2 million, or 1.34% of total loans, with net charge-offs at $2.5 million, reflecting strong credit quality [18][19] - The company expects to exit the year with a core net interest margin of approximately 3.35%, with potential upside from acquisitions [12][84] Q&A Session Summary Question: Growth trends and competitive landscape in Florida - Management highlighted that growth is driven by recruiting top talent and strong economic conditions, with a robust pipeline for the upcoming quarters [32][34] Question: Outlook on funding costs and core deposit growth - Management indicated a focus on growing core operating accounts while managing deposit costs, with expectations for seasonal trends to turn favorable [39][41] Question: Loan pricing and spreads in commercial real estate - Management noted increased competition and some spread compression for high-quality assets, but credit quality remains stable [66][68] Question: Charge-off expectations and credit quality outlook - Management expressed confidence in stable credit quality moving forward, with expectations for mid-cycle charge-offs around 20 to 25 basis points [70][71] Question: Balance sheet optimization and margin expectations - Management discussed plans to optimize the balance sheet with the upcoming acquisitions, guiding for a core margin of 3.35% and potential increases from the acquisitions [83][84]

Financial Data and Key Metrics Changes - The company reported net income of $20 million for the second quarter, equating to $0.69 per share, while loan outstandings contracted by $31.9 million during the quarter [3] - Year-to-date commercial loan production was $507 million compared to $422 million in the prior year, but loan outstanding contracted by $25.4 million compared to growth of $117.6 million in the prior year [4] - Deposits decreased by $75.8 million during the quarter, primarily due to seasonal declines in public funds deposits and broker deposits, but excluding these declines, deposits increased by $77.5 million [4] - The net interest margin (NIM) reported was 3.2%, an increase of 11 basis points from the prior quarter, with core NIM at 3.24%, expanding by 12 basis points compared to the first quarter [6] Business Line Data and Key Metrics Changes - Noninterest income increased by $521,000 or 2.5% compared to the second quarter of 2024, driven by increases in investment management fees, gains on sale of SBA loans, and treasury management fees [7] - Noninterest expense increased by $1.6 million or 3.3% compared to the second quarter of 2024, primarily due to compensation costs, including annual merit increases and medical costs [7] Market Data and Key Metrics Changes - The company expects loan growth of approximately 1% to 3% for the full year and net interest income growth of 10% to 12% compared to 2024 [8] - The provision for credit loss guidance remains unchanged at $12 million to $14 million for 2025, with the provision being event-driven [8] Company Strategy and Development Direction - The company will continue to be active in share buybacks, viewing it as a good use of capital, while M&A is not an immediate strategic priority but remains an option for the future [17] - The company is focused on managing expenses prudently, with a revised expense growth forecast of 2% to 4% [15] Management Comments on Operating Environment and Future Outlook - Management noted that loan activity and origination remain strong, despite being impacted by significant payoff activity in the first half of the year [14] - The competitive environment for deposits is tough, with ongoing efforts to grow deposits through targeted campaigns [20] - For the third quarter, core NIM is expected to pull back slightly due to the repricing of sub debt issuance and higher cost public funds [21] Other Important Information - The company reported $7.8 million of net charge-offs predominantly related to one credit, which accounted for $7.3 million of the charge-offs, with credit quality remaining strong overall [5] Q&A Session Summary Question: Update on loan growth and expenses - Loan growth is expected to be 1% to 3%, with interest income growth of 10% to 12%, and expenses are projected to grow by 2% to 4% [12] Question: Changes in loan environment and competition - Loan activity is strong, but significant payoff activity has impacted growth; management anticipates a slowdown in prepayment activity in the second half of the year [14] Question: Strategy for capital deployment - The company will continue share buybacks and is open to M&A opportunities, particularly on the non-bank side [17] Question: Deposit competition outlook - The competitive environment for deposits is challenging, with ongoing efforts to grow deposits through targeted campaigns [20] Question: NIM trajectory outlook - Core NIM is expected to pull back slightly in the third quarter, with a flat to slightly up trend thereafter, assuming stable interest rates [21]

Financial Performance - The company reported a net income of $29.0 million and diluted earnings per share (EPS) of $1.71 for Q2 2025, an increase from $25.8 million and $1.52 in Q1 2025 [1][21] - Adjusted net income for Q2 2025 was $29.4 million with an adjusted diluted EPS of $1.73, compared to $26.0 million and $1.53 in Q1 2025 [2][21] - The net interest income for Q2 2025 was $62.1 million, reflecting a $2.1 million increase or 14% annualized from Q1 2025 [5][21] Net Interest Income and Margin - The net interest margin (NIM) for Q2 2025 was 2.97%, with a tax-equivalent yield (TEY) of 3.46%, up from 2.95% and 3.42% in Q1 2025 [5][6] - The company anticipates continued margin expansion, guiding for a potential increase in Q3 NIM TEY by up to four basis points [6] Noninterest Income - Noninterest income for Q2 2025 was $22.1 million, up from $16.9 million in Q1 2025, driven by a 51% increase in capital markets revenue [8][10] - Wealth management revenue totaled $4.6 million, showing an 8% increase compared to Q2 2024 [8] Loan Growth - Total loans and leases held for investment grew by $102.6 million to $6.9 billion in Q2 2025, representing an 8% annualized growth rate [15] - The company expects gross loan growth in the range of 8% to 10% for the second half of the year [15] Deposit and Asset Quality - Total deposits slightly declined by $19.0 million or 1% annualized from Q1 2025, while average deposit balances increased by $72.0 million [17] - The nonperforming assets (NPAs) to total assets ratio was 0.46%, down seven basis points from the prior quarter, with NPAs totaling $42.7 million [19] Capital and Book Value - Tangible book value per share increased by $1.64 or 13% annualized during Q2 2025 [24] - The tangible common equity to tangible assets (TCE/TA) ratio improved by 22 basis points to 9.92% [25]

Financial Data and Key Metrics Changes - Earnings per share for Q2 2025 were reported at $0.35, with revenues increasing by 21% year-over-year and expenses rising by approximately 6% excluding charitable contributions [4][13]. - Pre-provision net revenue (PPNR) increased by $44 million sequentially, marking a 60% growth since Q1 2024 [4][5]. - Tax equivalent net interest income rose by 4% sequentially and 28% year-over-year, while noninterest income increased by 10% year-over-year [13][19]. Business Line Data and Key Metrics Changes - Commercial loan growth achieved the full-year target of $3 billion by June 30, 2025, with strong backlogs in institutional and middle market segments [5][8]. - Investment banking fees increased by 41% year-over-year, with Q2 2025 being the second-best first half in the company's history [21]. - Assets under management reached a record $64 billion, with commercial mortgage servicing balances also at record levels [7][22]. Market Data and Key Metrics Changes - Average loans increased by $1.4 billion sequentially, with commercial and industrial (C&I) loans growing by $1.7 billion [15]. - Average deposits declined by less than 1% from the previous quarter, but total deposits increased by 2% year-over-year [16][17]. - Noninterest-bearing deposits accounted for 19% of total deposits, remaining stable compared to the first quarter [17]. Company Strategy and Development Direction - The company is focused on maintaining low to mid-single-digit expense growth while investing significantly in frontline bankers and technology [10][12]. - There is a commitment to increasing the number of frontline bankers and client advisers by approximately 10% this year [10][73]. - The company is optimistic about meeting or exceeding full-year financial targets due to strong client engagement and healthy pipelines [8][12]. Management's Comments on Operating Environment and Future Outlook - Management noted that clients are cautiously optimistic, with many seeing the current environment as an opportunity for growth despite macroeconomic concerns [34][36]. - The company is maintaining a strong capital position and ample liquidity, allowing it to take advantage of market dislocations [12][63]. - Future guidance for net interest income growth has been revised to 20% to 22%, reflecting strong first-half performance and encouraging pipelines [26][29]. Other Important Information - The company added $36 million to its loan loss reserves this quarter, with net charge-offs of $102 million [4][14]. - The CET1 ratio was reported at 11.7%, indicating a strong capital position among peers [25]. - The company plans to resume modest share repurchases in Q3 2025, with a more significant increase expected in Q4 [65]. Q&A Session Summary Question: Client sentiment and financial outlook - Management indicated that clients are cautiously optimistic, with many feeling good about their business despite macro concerns. This sentiment is expected to translate into higher net interest income and loan growth [32][34]. Question: Deposit pricing strategy - The company is managing deposit costs effectively, with a slight decline in interest-bearing deposit costs. There is flexibility due to a low loan-to-deposit ratio [56][58]. Question: Capital and share repurchase plans - The company is at the high end of its CET1 target and plans to resume share repurchases modestly in Q3, increasing in Q4 based on market opportunities [62][65]. Question: Loan growth guidance - The company expects average loans to be down 1% to 3% for the full year, with commercial loans projected to grow about 5% [28][111]. Question: Credit quality and reserve ratio - Credit metrics are stable to improving, and there is potential for reserve reductions if the economic environment continues to improve [101][103].

Core Insights - Pathfinder Bancorp, Inc. reported a net income of $3.0 million or $0.41 per diluted share for Q1 2025, an increase from $2.1 million or $0.34 per share in Q1 2024 [2][19] - The company's net interest income rose to $11.4 million, a 10.0% increase from the previous quarter, driven by improved operating efficiency and growth in core deposits and commercial loans [5][6] - Total deposits reached $1.26 billion, reflecting a 5.0% growth in Q1 2025 and a 10.3% increase year-over-year [6][22] Financial Performance - Net interest margin expanded to 3.31% in Q1 2025 from 3.02% in the previous quarter and 2.75% in the same period last year, attributed to reduced deposit and borrowing costs [9][40] - Noninterest income for Q1 2025 totaled $1.2 million, down from $4.9 million in the linked quarter, primarily due to the absence of contributions from the sold insurance agency [10][11] - Noninterest expense was $8.4 million in Q1 2025, slightly down from $8.5 million in the previous quarter but up from $7.7 million in the year-ago period [13][14] Asset Quality - Nonperforming loans decreased to $13.2 million or 1.45% of total loans, improving from $22.1 million or 2.40% in the previous quarter [24][25] - The allowance for credit losses stood at $17.4 million, representing 1.91% of total loans, compared to 1.88% in the previous quarter [26][27] Liquidity and Capital - The company maintained a strong liquidity profile with total deposits of $1.26 billion and additional funding capacity of $133.3 million with the Federal Home Loan Bank of New York [29][30] - Shareholders' equity increased to $124.9 million, reflecting a 2.8% growth in Q1 2025 [23] Dividend Declaration - The Board of Directors declared a cash dividend of $0.10 per share, scheduled for disbursement on May 9, 2025, with an annualized dividend yield of 2.43% based on the closing stock price of $16.44 as of March 31, 2025 [31][32]

Financial Data and Key Metrics Changes - The company reported net income of $11.3 million, or 67 cents per diluted share, for the first quarter of 2025 [10] - Tangible book value increased to $23.61 per share, representing over 9% annualized growth quarter over quarter [10] - Total revenue reached $46.8 million, with net interest income expanding as anticipated [12] Business Line Data and Key Metrics Changes - Loan growth was at a 9% annualized pace for Q1, meeting expectations, while deposit growth was at 10% quarter over quarter annualized [11] - Noninterest income for the quarter totaled $8.6 million, exceeding guidance, driven by strong insurance and mortgage banking revenues [20] - Operating expenses remained stable at just over $32 million, consistent with the previous quarter [20] Market Data and Key Metrics Changes - The average portfolio yield, including fees, was 5.97%, slightly down from the previous quarter [15] - The loan to deposit ratio held steady at 83%, providing flexibility for future growth [15][17] - The company anticipates a net interest margin of around 3.25% for Q2 2025, with expectations of margin expansion of 2 to 3 basis points quarterly throughout the year [19] Company Strategy and Development Direction - The company is focused on leveraging its growth phase, aiming for continued EPS growth and achieving near-term revenue targets [24] - There is an emphasis on recruiting talented team members to enhance revenue-generating capabilities, particularly in private banking and treasury management [26] - The company remains committed to organic growth while being open to potential M&A opportunities if they align with strategic goals [125][126] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth prospects despite market volatility, citing strong client relationships and business performance [34][35] - The company is closely monitoring the impact of tariffs on clients but has received positive feedback regarding order volumes and pricing stability [37][38] - Management believes that credit quality remains strong, with nonperforming assets at 0.19% of total assets [20] Other Important Information - The effective corporate tax rate for the quarter was approximately 17%, with expectations of stabilization between 18% to 19% going forward [21] - The company's consolidated TCE ratio increased to 7.6%, and total risk-based capital ratio remained well above regulatory standards at 11.2% [21] Q&A Session Summary Question: Customer sentiment and loan growth outlook - Management noted strong market conditions and positive client feedback, indicating confidence in maintaining loan growth [34][35] Question: Balance sheet leverage and loan to deposit ratio - The company has room to increase its loan to deposit ratio while ensuring prudent growth and maintaining appropriate credit structures [42][43] Question: Share repurchase plans - The company has approximately $1.5 million left for share repurchases and will consider buying back shares as valuations improve [49][50] Question: Margin expectations with potential Fed rate cuts - Management indicated that they are well-positioned to benefit from Fed rate cuts, with potential upside to margin expansion if cuts occur earlier than expected [58][60] Question: Fee income outlook and performance of investment services - The company expects fee income in the low to mid $8 million range for Q2, with strong performance in insurance and mortgage banking contributing to growth [96][100] Question: Equipment financing and leasing business line - Management expressed satisfaction with the growth of the equipment financing segment, indicating plans for continued expansion in this area [131][132]