PBHC Pathfinder Bancorp Inc

Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the fourth quarter and year ended December 31, 2024.

The holding company for Pathfinder Bank (“the Bank”) earned net income attributable to common shareholders of $4.3 million or $0.69 per share in the fourth quarter of 2024, including a benefit of approximately $1.4 million from a gain on the previously announced sale of its insurance agency, net of taxes and transaction-related expenses.

The Company reported a net loss of $4.6 million or $0.75 per share in the third quarter of 2024, reflecting $9.0 million in provision expense that primarily resulted from a comprehensive loan portfolio review the Bank elected to undertake as part of its ongoing commitment to continuously improve its credit risk management approach, and net income of $2.5 million or $0.41 per share in the fourth quarter of 2023. For the full year, the Company earned net income of $3.8 million or $0.60 per share in 2024 and $9.3 million or $1.51 per share in 2023.

Fourth Quarter and Full Year 2024 Highlights and Key Developments

• Provision expense was $988,000 in the fourth quarter of 2024, compared to $9.0 million in the linked quarter and $265,000 in the fourth quarter of 2023, while the allowance for credit losses (“ACL) increased to 1.88% of loans from 1.87% on September 30, 2024 and 1.78% on December 31, 2023.
• Net interest income was $10.8 million, compared to the $11.7 million in the linked quarter that benefited from a $887,000 catch-up interest payment, and $9.2 million in the fourth quarter of 2023. Full-year net interest income was $41.4 million in 2024 and $38.9 million in 2023.
• Net interest margin (“NIM”) was 3.15% in the fourth quarter of 2024, compared to the 3.34% in the third quarter that benefited by 25 basis points from the catch-up interest payment, and 2.74% in the year-ago period.
• Non-interest income was $4.9 million, including a gross, pre-tax gain of $3.2 million on the October 2024 sale of the Company’s insurance agency, compared to $1.7 million in the linked quarter and $1.3 million in the year-ago period. Full-year non-interest income was $9.6 million in 2024 and $5.2 million in 2023.
• Non-interest expense was $8.5 million with $155,000 in October 2024 insurance agency transaction-related costs, $10.3 million in the linked quarter with $1.6 million in July 2024 branch acquisition-related costs, and $7.0 million in the year-ago period. Full-year non-interest expense was $34.4 million in 2024 and $29.4 million in 2023.
• Pre-tax, pre-provision (“PTPP”) net income grew to $3.8 million, compared to $3.4 million in the linked and year-ago periods. PTPP net income, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses. Full-year PTPP net income was $13.5 million in 2024 and $14.7 million in 2023.
• Total deposits were $1.20 billion at period end, growing by $8.1 million or 2.7% annualized from September 30, 2024 and $84.3 million or 7.5% from December 31, 2023. The Bank’s loan-to-deposit ratio was 76.3% on December 31, 2024.
• Total loans were $919.0 million at period end, compared to $921.7 million on September 30, 2024 and $897.2 million on December 31, 2023. Commercial loans were $539.7 million at period end, $534.5 million on September 30, 2024 and $524.2 million on December 31, 2023.

“Pathfinder’s core net interest income growth and net interest margin expansion were key contributors to fourth quarter earnings, and are a product of disciplined asset and liability pricing, the Bank’s valuable core deposit franchise, and our relationship-based commercial and retail lending in Central New York,” said President and Chief Executive Officer James A. Dowd. “In addition, we continue to invest in talent to serve middle market businesses throughout the Syracuse area, building on our foundation in this community. The East Syracuse branch acquired last summer, and our operations throughout the area, made important contributions to Pathfinder’s performance in the fourth quarter, and we look forward to further enhancing the breadth and depth of our commercial and other customer relationships in this important growth market.”

Dowd added, “We also intend to maintain a sharp focus on managing operating expenses, along with our ongoing efforts to continuously enhance the Company’s proactive credit risk management approach. While there may be short-term variability in measures of operating efficiency and asset quality, our leadership team is fully committed to taking the steps necessary to make sustainable improvements over the long term and continue building franchise value for the benefit of our shareholders.”

Net Interest Income and Net Interest Margin Fourth quarter 2024 net interest income was $10.8 million, a decrease of 7.8% from the third quarter of 2024, or a decrease of 0.2% when excluding an $887,000 third quarter catch-up interest payment associated with purchased loan pool positions. A decrease in interest and dividend income of $1.7 million was primarily attributed to average yield decreases of 44 basis points on loans including 39 basis points from the catch-up interest payment, 108 basis points on tax-exempt investment securities, and 28 basis points on taxable investment securities. The corresponding decreases in income from loan interest, tax-exempt investment securities, and taxable investment securities were $902,000, $24,000, and $337,000, respectively. A decrease in interest expense of $761,000 was attributed to intentional reductions in the cost of time deposits and other interest-bearing deposits, as well as reductions in borrowings expense.

Net interest margin was 3.15% in the fourth quarter of 2024, compared to 3.34% in the linked quarter. The decrease was due to the 25 basis points of linked quarter NIM attributed to the third quarter 2024 catch-up interest payment.

Fourth quarter 2024 net interest income was $10.8 million, an increase of 18.1% from the fourth quarter of 2023. An increase in interest and dividend income of $1.2 million was primarily attributed to average yield increases of 33 basis points on loans, 4 basis points on taxable investment securities, and 404 basis points on fed funds sold and interest-earning deposits. The corresponding increase in loan interest income, taxable investment securities, and federal funds sold and interest-earning deposits was $1.1 million, $152,000, and $13,000, respectively. A decrease in interest expense of $463,000 was attributed to changes in the Bank’s deposit mix, repricing of deposits in a lower rate environment, and reductions in borrowings expense.

Net interest margin was 3.15% in the fourth quarter of 2024 compared to 2.74% in the same period the year prior. The increase of 41 basis points was driven by reductions in borrowing and funding costs.

Noninterest Income Noninterest income totaled $4.9 million in the fourth quarter of 2024, including the $3.2 million pre-tax gain on the insurance agency sale, which represents the gross amount that is required to be 100% consolidated within the Company's financial statements, despite Pathfinder's 51% interest in the business sold in October 2024. Noninterest income growth from the third quarter of 2024 was $3.2 million, or $30,000 when excluding the agency sale gain. Noninterest income growth from the fourth quarter of 2023 was $3.6 million, or $419,000 when excluding the agency sale gain.

The insurance agency sold in October contributed $49,000 in revenue to noninterest income in the fourth quarter of 2024, $367,000 in the third quarter of 2024 and $303,000 in the fourth quarter of 2023.

Compared to the linked quarter, fourth quarter 2024 noninterest income also included increases of $16,000 in loan servicing fees and $12,000 in service charges on deposit accounts, a decrease of $194,000 in earnings and gain on bank owned life insurance ("BOLI") after recording a $175,000 third quarter net death benefit on BOLI, and a $36,000 decrease in debit card interchange fees. Noninterest income growth from the linked quarter also reflected an increase of $438,000 in net realized gains on sales and redemptions of investment securities and $104,000 in net realized gains on sales of marketable equity securities, as well as a decrease of $51,000 in gains on sales of loans and foreclosed real estate.

Compared to the year-ago period, fourth quarter 2024 noninterest income also included increases of $103,000 in interchange fees, $68,000 in service charges on deposit accounts, $26,000 in loan servicing fees, and $3,000 in earnings and gain on BOLI. Noninterest income growth from the year-ago quarter also reflected increases of $248,000 increase in net realized losses on sales and redemptions of investment securities, $213,000 in net realized gains on sales of marketable equity securities, and $41,000 in gains on sales of loans and foreclosed real estate.

Noninterest Expense Noninterest expense totaled $8.5 million in the fourth quarter of 2024, decreasing $1.7 million from the linked quarter and increasing $1.5 million from the year-ago period.

Fourth quarter 2024 noninterest expense included $456,000 associated with the Company’s insurance agency sale in October 2024, including $155,000 in transaction-related items. The insurance agency incurred $308,000 of noninterest expense in the third quarter of 2024 and $216,000 in the fourth quarter of 2023.

Third quarter 2024 noninterest expense included $1.6 million in transaction-related expenses for Pathfinder’s acquisition of the East Syracuse branch acquisition in July 2024.

Salaries and benefits were $4.1 million in the fourth quarter of 2024, decreasing $839,000 from the linked quarter and increasing $446,000 from the year-ago period. The decrease from the linked quarter reflected elevated non-exempt-employee hours for projects related to the successful third quarter closing and integration of the East Syracuse branch acquisition, as well as some personnel vacancies that were open in the fourth quarter. The increase from the fourth quarter of 2023 was primarily attributed to increased headcount and lower salary deferrals than in the prior year period.

Building and occupancy was $1.3 million in the fourth quarter of 2024, increasing $117,000 and $390,000 from the linked and year-ago quarters, respectively. These increases were due to ongoing facilities-related costs of approximately $322,000 associated with operating the branch acquired in July 2024.

Professional and other services expense was $608,000 in the fourth quarter of 2024, decreasing $1.2 million from the linked quarter and increasing $120,000 from the year-ago period. The decrease from the third quarter of 2024 was primarily attributed to one-time costs associated with the East Syracuse branch acquisition. The increase from the fourth quarter of 2023 was primarily attributed to a $136,000 increase in technology project implementation services and other outsourced consulting services.

Annualized noninterest expense, including transaction-related costs, represented 2.33% of average assets in the fourth quarter of 2024, compared to 2.75% and 2.01% in the linked and year-ago periods. The efficiency ratio, including transaction-related costs, was 69.42% in the fourth quarter of 2024, compared to 75.28% and 67.25% in the linked and year-ago periods. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue.

Statement of Financial Condition As of December 31, 2024, the Company’s statement of financial condition reflects total assets of $1.47 billion, compared to $1.48 billion and $1.47 billion recorded on September 30, 2024 and December 31, 2023, respectively.

Loans totaled $919.0 million on December 31, 2024, decreasing 0.3% during the fourth quarter and increasing 2.4% from one year prior. Consumer and residential loans totaled $380.9 million, decreasing 2.0% during the fourth quarter and increasing 1.9% from one year prior. Commercial loans totaled $539.7 million, increasing 1.0% during the fourth quarter and 3.0% from one year prior.

With respect to liabilities, deposits totaled $1.20 billion on December 31, 2024, increasing 0.7% during the fourth quarter and 7.5% from one year prior. The Company also utilized its lower cost liquidity to reduce total borrowings, which were $88.1 million on December 31, 2024 as compared to $100.1 million on September 30, 2024 and $175.6 million on December 31, 2023.

Shareholders' equity totaled $121.9 million on December 31, 2024, increasing $1.6 million or 1.3% in the fourth quarter and increasing $2.4 million or 2.0% from one year prior. The fourth quarter 2024 increase primarily reflects a $4.5 million increase in retained earnings, partially offset by a $2.4 million increase in accumulated other comprehensive loss (“AOCL”) and a $481,000 decrease in additional paid in capital. The full-year 2024 increase in shareholders' equity primarily reflects a $2.1 increase in retained earnings and a $461,000 decrease in AOCL, partially offset by a $364,000 decrease in additional paid in capital.  The noncontrolling interest included in equity on the Statements of Financial Condition was eliminated with the October 2024 sale of the 51% ownership interest in the Company’s insurance agency.

Asset Quality Pathfinder’s asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach.

Nonperforming loans were $22.1 million or 2.40% of total loans on December 31, 2024, $16.2 million or 1.75% of total loans on September 30, 2024 and $17.2 million or 1.92% of total loans on December 31, 2023.

Net charge offs (“NCOs”) after recoveries were $1.0 million or an annualized 0.44% of average loans in the fourth quarter of 2024, with gross charge offs for consumer loans, purchased loan pools, and one commercial loan offsetting recoveries in each of these categories. NCOs were $8.7 million or an annualized 3.82% of average loans in the linked quarter, following the loan portfolio review completed in September, and $108,000 or 0.05% in the prior year period.

Provision for credit loss expense was $988,000 in the fourth quarter of 2024, reflecting NCOs in the period and qualitative factors in the Company’s reserve model. Third quarter of 2024 provision was $9.0 million, primarily to replenish commercial loan reserves and adjust the lifetime loss estimate for solar purchased loan pool positions following the loan portfolio review completed in September. Fourth quarter 2023 provision was $265,000.

The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses (“ACL”) of $17.2 million on December 31, 2024, compared to $17.3 million on September 30, 2024 and $16.0 million on December 31, 2023. As a percentage of total loans, ACL represented 1.88% on December 31, 2024, 1.87% on September 30, 2024, and 1.78% on December 31, 2023.

Liquidity The Company has diligently ensured a strong liquidity profile as of December 31, 2024 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership.

The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.20 billion on December 31, 2024, $1.20 billion on September 30, 2024, and $1.12 billion on December 31, 2023. Core deposits represented 76.87% of total deposits on December 31, 2024, 77.45% on September 30, 2024, and 69.83% on December 31, 2023. The Bank’s continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability.

At the end of the current quarter, Pathfinder Bancorp had an available additional funding capacity of $113.8 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $43.3 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements.

Cash Dividend Declared On December 23, 2024, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock.

In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by January 17, 2025 will be eligible for the dividend, which is scheduled for disbursement on February 7, 2025. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value.

Evaluating the Company’s market performance, the closing stock price as of December 31, 2024 stood at $17.50 per share. This positions the dividend yield at an attractive 2.29%.

About Pathfinder Bancorp, Inc.

Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the commercial bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches averaging over $100 million in deposits per location, as well as diversified consumer, mortgage and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. At December 31, 2024, the Oswego-headquartered Company had assets of $1.47 billion, loans of $919.0 million, and deposits of $1.20 billion. More information is available at pathfinderbank.com and ir.pathfinderbank.com.

Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov.

This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial.

Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Senior Vice President, CFO Telephone: (315) 343-0057

PATHFINDER BANCORP, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)
		2024																2023
SELECTED BALANCE SHEET DATA:		December 31,				September 30,				June 30,				March 31,				December 31,
ASSETS:
Cash and due from banks		$	13,963			$	18,923			$	12,022			$	13,565			$	12,338
Interest-earning deposits			17,609				16,401				19,797				15,658				36,394
Total cash and cash equivalents			31,572				35,324				31,819				29,223				48,732
Available-for-sale securities, at fair value			269,331				271,977				274,977				279,012				258,716
Held-to-maturity securities, at amortized cost			158,683				161,385				166,271				172,648				179,286
Marketable equity securities, at fair value			4,076				3,872				3,793				3,342				3,206
Federal Home Loan Bank stock, at cost			4,590				5,401				8,702				7,031				8,748
Loans			918,986				921,660				888,263				891,531				897,207
Less: Allowance for credit losses			17,243				17,274				16,892				16,655				15,975
Loans receivable, net			901,743				904,386				871,371				874,876				881,232
Premises and equipment, net			19,009				18,989				18,878				18,332				18,441
Assets held-for-sale			-				-				3,042				3,042				3,042
Operating lease right-of-use assets			1,391				1,425				1,459				1,493				1,526
Finance lease right-of-use assets			16,676				16,873				4,004				4,038				4,073
Accrued interest receivable			6,881				6,806				7,076				7,170				7,286
Foreclosed real estate			-				-				60				82				151
Intangible assets, net			5,989				6,217				76				80				85
Goodwill			5,056				5,752				4,536				4,536				4,536
Bank owned life insurance			24,727				24,560				24,967				24,799				24,641
Other assets			25,150				20,159				25,180				23,968				22,097
Total assets		$	1,474,874			$	1,483,126			$	1,446,211			$	1,453,672			$	1,465,798
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Interest-bearing deposits		$	990,674			$	986,103			$	932,132			$	969,692			$	949,898
Noninterest-bearing deposits			213,719				210,110				169,145				176,421				170,169
Total deposits			1,204,393				1,196,213				1,101,277				1,146,113				1,120,067
Short-term borrowings			61,000				60,315				127,577				91,577				125,680
Long-term borrowings			27,068				39,769				45,869				45,869				49,919
Subordinated debt			30,107				30,057				30,008				29,961				29,914
Accrued interest payable			234				236				2,092				1,963				2,245
Operating lease liabilities			1,591				1,621				1,652				1,682				1,711
Finance lease liabilities			16,745				16,829				4,359				4,370				4,381
Other liabilities			11,876				16,986				9,203				9,505				11,625
Total liabilities			1,353,014				1,362,026				1,322,037				1,331,040				1,345,542
Shareholders' equity:
Voting common stock shares issued and outstanding			4,742,841				4,719,788				4,719,788				4,719,788				4,719,288
Voting common stock			47				47				47				47				47
Non-Voting common stock			14				14				14				14				14
Additional paid in capital			52,750				53,231				53,182				53,151				53,114
Retained earnings			78,193				73,670				78,936				77,558				76,060
Accumulated other comprehensive loss			(9,144	)			(6,716	)			(8,786	)			(8,862	)			(9,605	)
Unearned ESOP shares			-				-				(45	)			(90	)			(135	)
Total Pathfinder Bancorp, Inc. shareholders' equity			121,860				120,246				123,348				121,818				119,495
Noncontrolling interest			-				854				826				814				761
Total equity			121,860				121,100				124,174				122,632				120,256
Total liabilities and shareholders' equity		$	1,474,874			$	1,483,126			$	1,446,211			$	1,453,672			$	1,465,798

The above information is preliminary and based on the Company's data available at the time of presentation.

		Years Ended December 31,								2024																2023
SELECTED INCOME STATEMENT DATA:		2024				2023				Q4				Q3				Q2				Q1				Q4
Interest and dividend income:
Loans, including fees		$	52,705			$	47,348			$	13,523			$	14,425			$	12,489			$	12,268			$	12,429
Debt securities:
Taxable			22,319				17,500				5,312				5,664				5,736				5,607				5,092
Tax-exempt			1,920				1,947				445				469				498				508				506
Dividends			620				573				164				149				178				129				232
Federal funds sold and interest-earning deposits			793				295				82				492				121				98				69
Total interest and dividend income			78,357				67,663				19,526				21,199				19,022				18,610				18,328
Interest expense:
Interest on deposits			30,050				23,265				7,380				7,633				7,626				7,411				7,380
Interest on short-term borrowings			4,176				2,688				700				1,136				1,226				1,114				1,064
Interest on long-term borrowings			733				850				136				202				201				194				231
Interest on subordinated debt			1,966				1,941				490				496				489				491				494
Total interest expense			36,925				28,744				8,706				9,467				9,542				9,210				9,169
Net interest income			41,432				38,919				10,820				11,732				9,480				9,400				9,159
Provision for (benefit from) credit losses:
Loans			11,106				2,991				988				9,104				304				710				316
Held-to-maturity securities			(94	)			(98	)			(4	)			(31	)			(74	)			15				(74	)
Unfunded commitments			(39	)			37				4				(104	)			60				1				23
Total provision for credit losses			10,973				2,930				988				8,969				290				726				265
Net interest income after provision for credit losses			30,459				35,989				9,832				2,763				9,190				8,674				8,894
Noninterest income:
Service charges on deposit accounts			1,436				1,249				405				392				330				309				336
Earnings and gain on bank owned life insurance			854				630				169				361				167				157				164
Loan servicing fees			375				307				96				79				112				88				69
Net realized (losses) gains on sales and redemptions of investment securities			(71	)			62				249				(188	)			16				(148	)			2
Gain on asset sale 1 & 2			3,169				-				3,169				-				-				-				-
Net realized gains (losses) on sales of marketable equity securities			197				(255	)			166				62				(139	)			108				(47	)
Gains on sales of loans and foreclosed real estate			187				181				39				90				40				18				(2	)
Loss on sale of premises and equipment			(13	)			-				-				(36	)			-				-				-
Debit card interchange fees			875				616				265				300				191				119				161
Insurance agency revenue 1			1,073				1,304				49				367				260				397				303
Other charges, commissions & fees			1,479				1,096				299				280				234				689				332
Total noninterest income			9,561				5,190				4,906				1,707				1,211				1,737				1,318
Noninterest expense:
Salaries and employee benefits			17,810				15,920				4,123				4,959				4,399				4,329				3,677
Building and occupancy			4,118				3,563				1,254				1,134				914				816				864
Data processing			2,471				2,018				721				672				550				528				499
Professional and other services			3,686				2,019				608				1,820				696				562				488
Advertising			604				671				218				165				116				105				155
FDIC assessments			916				885				231				228				228				229				222
Audits and exams			539				735				123				123				123				170				259
Insurance agency expense 1			1,281				1,033				456				308				232				285				216
Community service activities			130				200				19				20				39				52				49
Foreclosed real estate expenses			102				111				20				27				30				25				35
Other expenses			2,760				2,240				771				803				581				605				580
Total noninterest expense			34,417				29,395				8,544				10,259				7,908				7,706				7,044
Income (loss) before provision for income taxes			5,603				11,784				6,194				(5,789	)			2,493				2,705				3,168
Provision (benefit) for income taxes			398				2,362				558				(1,173	)			481				532				590
Net income (loss) attributable to noncontrolling interest and Pathfinder Bancorp, Inc.			5,205				9,422				5,636				(4,616	)			2,012				2,173				2,578
Net income attributable to noncontrolling interest 1			1,445				129				1,352				28				12				53				42
Net income (loss) attributable to Pathfinder Bancorp Inc.		$	3,760			$	9,293			$	4,284			$	(4,644	)		$	2,000			$	2,120			$	2,536
Voting Earnings per common share - basic and diluted		$	0.60			$	1.51			$	0.69			$	(0.75	)		$	0.32			$	0.34			$	0.41
Series A Non-Voting Earnings per common share- basic and diluted		$	0.60			$	1.51			$	0.69			$	(0.75	)		$	0.32			$	0.34			$	0.41
Dividends per common share (Voting and Series A Non-Voting)		$	0.40			$	0.36			$	0.10			$	0.10			$	0.10			$	0.10			$	0.09

1 Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC (“Agency”) the Company is required to consolidate 100% of the Agency within the consolidated financial statements. 2 The $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company’s 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest.

The above information is preliminary and based on the Company's data available at the time of presentation.

		Years Ended December 31,								2024																2023
FINANCIAL HIGHLIGHTS:		2024				2023				Q4				Q3				Q2				Q1				Q4
Selected Ratios:
Return on average assets			0.26	%			0.67	%			1.17	%			-1.25	%			0.56	%			0.59	%			0.72	%
Return on average common equity			3.06	%			8.09	%			14.09	%			-14.79	%			6.49	%			7.01	%			8.72	%
Return on average equity			3.06	%			8.09	%			14.09	%			-14.79	%			6.49	%			7.01	%			8.72	%
Return on average tangible common equity 1			3.23	%			8.43	%			15.54	%			-15.28	%			6.78	%			7.32	%			9.01	%
Net interest margin			3.01	%			2.95	%			3.15	%			3.34	%			2.78	%			2.75	%			2.74	%
Loans / deposits			76.30	%			80.10	%			76.30	%			77.05	%			80.66	%			77.79	%			80.10	%
Core deposits/deposits 2			76.87	%			69.83	%			76.87	%			77.45	%			67.98	%			69.17	%			69.83	%
Annualized non-interest expense / average assets			3.17	%			2.11	%			2.33	%			2.75	%			2.19	%			2.16	%			2.01	%
Commercial real estate / risk-based capital 3			186.73	%			162.21	%			186.73	%			189.47	%			169.73	%			163.93	%			162.21	%
Efficiency ratio 1			71.86	%			66.74	%			69.42	%			75.28	%			74.08	%			68.29	%			67.25	%
Other Selected Data:
Average yield on loans			5.83	%			5.26	%			5.87	%			6.31	%			5.64	%			5.48	%			5.55	%
Average cost of interest bearing deposits			3.08	%			2.45	%			2.94	%			3.11	%			3.21	%			3.07	%			3.10	%
Average cost of total deposits, including non-interest bearing			2.59	%			2.07	%			2.44	%			2.59	%			2.72	%			2.61	%			2.63	%
Deposits/branch 4		$	100,366			$	101,824			$	100,366			$	99,684			$	100,116			$	104,192			$	101,824
Pre-tax, pre-provision net income 1		$	13,478			$	14,652			$	3,764			$	3,368			$	2,767			$	3,579			$	3,431
Total revenue 1		$	47,895			$	44,047			$	12,308			$	13,627			$	10,675			$	11,285			$	10,475
Share and Per Share Data:
Cash dividends per share		$	0.40			$	0.36			$	0.10			$	0.10			$	0.10			$	0.10			$	0.09
Book value per common share		$	19.90			$	19.59			$	19.90			$	19.71			$	20.22			$	19.97			$	19.59
Tangible book value per common share 1		$	18.10			$	18.83			$	18.10			$	17.75			$	19.46			$	19.21			$	18.83
Basic and diluted weighted average shares outstanding - Voting			4,714				4,653				4,732				4,714				4,708				4,701				4,693
Basic and diluted earnings per share - Voting 5		$	0.60			$	1.51			$	0.69			$	(0.75	)		$	0.32			$	0.34			$	0.41
Basic and diluted weighted average shares outstanding - Series A Non-Voting			1,380				1,380				1,380				1,380				1,380				1,380				1,380
Basic and diluted earnings per share - Series A Non-Voting 5		$	0.60			$	1.51			$	0.69			$	(0.75	)		$	0.32			$	0.34			$	0.41
Common shares outstanding at period end			6,123				6,100				6,123				6,100				6,100				6,100				6,100
Pathfinder Bancorp, Inc. Capital Ratios:
Company tangible common equity to tangible assets 1			7.57	%			7.86	%			7.57	%			7.36	%			8.24	%			8.09	%			7.86	%
Company Total Core Capital (to Risk-Weighted Assets)			15.70	%			16.17	%			15.70	%			15.55	%			16.19	%			16.23	%			16.17	%
Company Tier 1 Capital (to Risk-Weighted Assets)			12.04	%			12.30	%			12.04	%			11.84	%			12.31	%			12.33	%			12.30	%
Company Tier 1 Common Equity (to Risk-Weighted Assets)			11.55	%			11.81	%			11.55	%			11.33	%			11.83	%			11.85	%			11.81	%
Company Tier 1 Capital (to Assets)			8.69	%			9.35	%			8.69	%			8.29	%			9.16	%			9.16	%			9.35	%
Pathfinder Bank Capital Ratios:
Bank Total Core Capital (to Risk-Weighted Assets)			14.70	%			15.05	%			14.70	%			14.52	%			16.04	%			15.65	%			15.05	%
Bank Tier 1 Capital (to Risk-Weighted Assets)			13.44	%			13.80	%			13.44	%			13.26	%			14.79	%			14.39	%			13.80	%
Bank Tier 1 Common Equity (to Risk-Weighted Assets)			13.44	%			13.80	%			13.44	%			13.26	%			14.79	%			14.39	%			13.80	%
Bank Tier 1 Capital (to Assets)			9.69	%			10.11	%			9.69	%			9.13	%			10.30	%			10.13	%			10.11	%

1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures. 2 Non-brokered deposits excluding certificates of deposit of $250,000 or more. 3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital. 4 Includes 11 full-service branches and one motor bank for December 31 and September 30, 2024, respectively. Includes 10 full-service branches and one motor bank for all periods prior. 5 Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares.

The above information is preliminary and based on the Company's data available at the time of presentation.

		Years Ended December 31,								2024																2023
ASSET QUALITY:		2024				2023				Q4				Q3				Q2				Q1				Q4
Total loan charge-offs		$	10,183			$	4,221			$	1,191			$	8,812			$	112			$	68			$	211
Total recoveries			345				355				171				90				46				38				103
Net loan charge-offs			9,838				3,866				1,020				8,722				66				30				108
Allowance for credit losses at period end			17,243				15,975				17,243				17,274				16,892				16,655				15,975
Nonperforming loans at period end			22,084				17,227				22,084				16,170				24,490				19,652				17,227
Nonperforming assets at period end		$	22,084			$	17,378			$	22,084			$	16,170			$	24,550			$	19,734			$	17,378
Annualized net loan charge-offs to average loans			1.09	%			0.43	%			0.44	%			3.82	%			0.03	%			0.01	%			0.05	%
Allowance for credit losses to period end loans			1.88	%			1.78	%			1.88	%			1.87	%			1.90	%			1.87	%			1.78	%
Allowance for credit losses to nonperforming loans			78.08	%			92.73	%			78.08	%			106.83	%			68.98	%			84.75	%			92.73	%
Nonperforming loans to period end loans			2.40	%			1.92	%			2.40	%			1.75	%			2.76	%			2.20	%			1.92	%
Nonperforming assets to period end assets			1.50	%			1.19	%			1.50	%			1.09	%			1.70	%			1.36	%			1.19	%

		2024																	2023
LOAN COMPOSITION:		December 31,				September 30,				June 30,				March 31,				December 31,
1-4 family first-lien residential mortgages		$	251,373			$	255,235			$	250,106			$	252,026			$	257,604
Residential construction			4,864				4,077				309				1,689				1,355
Commercial real estate			377,619				378,805				370,361				363,467				358,707
Commercial lines of credit			67,602				64,672				62,711				67,416				72,069
Other commercial and industrial			89,800				88,247				90,813				91,178				89,803
Paycheck protection program loans			113				125				136				147				158
Tax exempt commercial loans			4,544				2,658				3,228				3,374				3,430
Home equity and junior liens			51,948				52,709				35,821				35,723				34,858
Other consumer			72,710				76,703				75,195				77,106				79,797
Subtotal loans			920,573				923,231				888,680				892,126				897,781
Deferred loan fees			(1,587	)			(1,571	)			(417	)			(595	)			(574	)
Total loans		$	918,986			$	921,660			$	888,263			$	891,531			$	897,207

		2024																2023
DEPOSIT COMPOSITION:		December 31,				September 30,				June 30,				March 31,				December 31,
Savings accounts		$	128,752			$	129,053			$	106,048			$	111,465			$	113,543
Time accounts			360,586				352,729				368,262				378,103				377,570
Time accounts in excess of $250,000			142,473				140,181				117,021				114,514				95,272
Money management accounts			11,583				11,520				12,154				11,676				12,364
MMDA accounts			239,016				250,007				193,915				215,101				224,707
Demand deposit interest-bearing			101,080				97,344				128,168				134,196				119,321
Demand deposit noninterest-bearing			213,719				210,110				169,145				176,434				170,169
Mortgage escrow funds			7,184				5,269				6,564				4,624				7,121
Total deposits		$	1,204,393			$	1,196,213			$	1,101,277			$	1,146,113			$	1,120,067

The above information is preliminary and based on the Company's data available at the time of presentation.

		Years Ended December 31,								2024								2023
SELECTED AVERAGE BALANCES:		2024				2023				Q4				Q3				Q4
Interest-earning assets:
Loans		$	903,941			$	899,605			$	920,855			$	914,467			$	896,439
Taxable investment securities			423,475				379,600				412,048				415,751				403,411
Tax-exempt investment securities			30,861				30,318				34,918				30,382				27,941
Fed funds sold and interest-earning deposits			16,379				11,730				5,115				42,897				11,630
Total interest-earning assets			1,374,656				1,321,253				1,372,936				1,403,497				1,339,421
Noninterest-earning assets:
Other assets			102,582				100,319				112,654				103,856				102,940
Allowance for credit losses			(16,670	)			(17,870	)			(17,145	)			(16,537	)			(17,359	)
Net unrealized losses on available-for-sale securities			(9,769	)			(13,600	)			(8,534	)			(9,161	)			(15,653	)
Total assets		$	1,450,799			$	1,390,102			$	1,459,911			$	1,481,655			$	1,409,349
Interest-bearing liabilities:
NOW accounts		$	101,336			$	92,223			$	102,862			$	102,868			$	87,210
Money management accounts			11,679				14,116				11,371				11,828				12,518
MMDA accounts			227,597				239,182				257,429				227,247				231,957
Savings and club accounts			118,965				124,617				128,169				127,262				115,984
Time deposits			517,352				480,867				504,008				514,049				505,554
Subordinated loans			30,002				29,815				30,076				30,025				29,883
Borrowings			114,471				105,471				68,391				122,129				124,780
Total interest-bearing liabilities			1,121,402				1,086,291				1,102,306				1,135,408				1,107,886
Noninterest-bearing liabilities:
Demand deposits			184,572				172,950				206,521				195,765				169,340
Other liabilities			21,923				16,037				29,491				24,856				15,858
Total liabilities			1,327,897				1,275,278				1,338,318				1,356,029				1,293,084
Shareholders' equity			122,902				114,824				121,593				125,626				116,265
Total liabilities & shareholders' equity		$	1,450,799			$	1,390,102			$	1,459,911			$	1,481,655			$	1,409,349

		Years Ended December 31,								2024								2023
SELECTED AVERAGE YIELDS:		2024				2023				Q4				Q3				Q4
Interest-earning assets:
Loans			5.83	%			5.26	%			5.87	%			6.31	%			5.55	%
Taxable investment securities			5.42	%			4.76	%			5.32	%			5.59	%			5.28	%
Tax-exempt investment securities			6.22	%			6.42	%			5.10	%			6.17	%			7.24	%
Fed funds sold and interest-earning deposits			4.84	%			2.51	%			6.41	%			4.59	%			2.37	%
Total interest-earning assets			5.70	%			5.12	%			5.69	%			6.04	%			5.47	%
Interest-bearing liabilities:
NOW accounts			1.10	%			0.58	%			1.19	%			1.09	%			1.02	%
Money management accounts			0.11	%			0.11	%			0.11	%			0.10	%			0.10	%
MMDA accounts			3.52	%			2.80	%			3.23	%			3.54	%			3.72	%
Savings and club accounts			0.26	%			0.22	%			0.26	%			0.25	%			0.26	%
Time deposits			3.98	%			3.27	%			3.90	%			4.09	%			3.89	%
Subordinated loans			6.55	%			6.51	%			6.52	%			6.61	%			6.61	%
Borrowings			4.29	%			3.35	%			4.89	%			4.38	%			4.15	%
Total interest-bearing liabilities			3.29	%			2.65	%			3.16	%			3.34	%			3.31	%
Net interest rate spread			2.41	%			2.47	%			2.53	%			2.70	%			2.16	%
Net interest margin			3.01	%			2.95	%			3.15	%			3.34	%			2.74	%
Ratio of average interest-earning assets to average interest-bearing liabilities			122.58	%			121.63	%			124.55	%			123.61	%			120.90	%

The above information is preliminary and based on the Company's data available at the time of presentation.

		Years Ended December 31,								2024																2023
NON-GAAP RECONCILIATIONS:		2024				2023				Q4				Q3				Q2				Q1				Q4
Tangible book value per common share:
Total equity										$	121,860			$	120,246			$	123,348			$	121,818			$	119,495
Intangible assets											(11,045	)			(11,969	)			(4,612	)			(4,616	)			(4,621	)
Tangible common equity (non-GAAP)											110,815				108,277				118,736				117,202				114,874
Common shares outstanding											6,123				6,100				6,100				6,100				6,100
Tangible book value per common share (non-GAAP)										$	18.10			$	17.75			$	19.46			$	19.21			$	18.83
Tangible common equity to tangible assets:
Tangible common equity (non-GAAP)										$	110,815			$	108,277			$	118,736			$	117,202			$	114,874
Tangible assets											1,463,829				1,471,157				1,441,599				1,449,056				1,461,177
Tangible common equity to tangible assets ratio (non-GAAP)											7.57	%			7.36	%			8.24	%			8.09	%			7.86	%
Return on average tangible common equity:
Average shareholders' equity		$	122,902			$	114,824			$	121,593			$	125,626			$	123,211			$	121,031			$	116,265
Average intangible assets			6,468				4,629				11,907				4,691				4,614				4,619				4,623
Average tangible equity (non-GAAP)			116,434				110,195				109,686				120,935				118,597				116,412				111,642
Net income (loss)			3,760				9,293				4,284				(4,644	)			2,000				2,120				2,536
Net income (loss), annualized		$	3,760			$	9,293			$	17,043			$	(18,475	)		$	8,044			$	8,527			$	10,061
Return on average tangible common equity (non-GAAP) 1			3.23	%			8.43	%			15.54	%			-15.28	%			6.78	%			7.32	%			9.01	%
Revenue, pre-tax, pre-provision net income, and efficiency ratio:
Net interest income		$	41,432			$	38,919			$	10,820			$	11,732			$	9,480			$	9,400			$	9,159
Total noninterest income			9,561				5,190				4,906				1,707				1,211				1,737				1,318
Net realized (gains) losses on sales and redemptions of investment securities			(71	)			62				249				(188	)			16				(148	)			2
Gain on asset sale			3,169				-				3,169				-				-				-				-
Revenue (non-GAAP) 2			47,895				44,047				12,308				13,627				10,675				11,285				10,475
Total non-interest expense			34,417				29,395				8,544				10,259				7,908				7,706				7,044
Pre-tax, pre-provision net income (non-GAAP) 3		$	13,478			$	14,652			$	3,764			$	3,368			$	2,767			$	3,579			$	3,431
Efficiency ratio (non-GAAP) 4			71.86	%			66.74	%			69.42	%			75.28	%			74.08	%			68.29	%			67.25	%

1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity 2 Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities and gain on sale of insurance agency 3 Pre-tax, pre-provision net income equals revenue less total non-interest expense 4 Efficiency ratio equals noninterest expense divided by revenue

The above information is preliminary and based on the Company's data available at the time of presentation.