OSWEGO, N.Y., July 30, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. ("Pathfinder" or the "Company") (NASDAQ:PBHC) announced its financial results for the second quarter ended June 30, 2025.

The holding company for Pathfinder Bank ("the Bank") reported net income attributable to common shareholders of $31,000, or less than $0.01 per diluted share in the second quarter of 2025, compared to $3.0 million or $0.47 per diluted share in the first quarter of 2025 and $2.0 million or $0.32 per share in the second quarter of 2024.

Second Quarter 2025 Highlights and Key Developments

The Company continued to undertake proactive measures in the second quarter to mitigate credit risk and enhance asset quality metrics for the long term. These included the July 2025 sale of $9.3 million in nonperforming and classified loans associated with one local commercial relationship for a pre-tax loss of $3.1 million recorded as a second quarter 2025 lower of cost or market adjustment to loans held for sale ("LOCOM HFS adjustment"), representing $0.40 per diluted share net of tax, as well as $2.6 million in net charge offs ("NCOs") that are reflected in provision expense of $1.2 million.
Nonperforming loans declined to $11.7 million at period end, improving by 11.7% during the second quarter and 52.3% from June 30, 2024. Nonperforming loans also declined to 1.28% of total loans at period end, improving from 1.45% on March 31, 2025 and 2.76% on June 30, 2024.
Total deposits were $1.22 billion at period end, compared to $1.26 billion on March 31, 2025 and $1.10 billion on June 30, 2024. During the second quarter of 2025, total balances declined on reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality. Core deposits grew to 78.47% of total deposits at period end from 78.31% on March 31, 2025 and 67.98% on June 30, 2024.
Total loans were $909.7 million at period end, reflecting the move of $3.2 million in balances to held-for-sale status for the July 2025 sale of nonperforming and classified loans, compared to $912.2 million on March 31, 2025 and $888.3 million on June 30, 2024. Commercial loans grew to $549.1 million or 60.4% of total loans at period end, compared to $542.7 million on March 31, 2025 and $527.2 million on June 30, 2024.
Net interest income was $10.8 million and net interest margin ("NIM") was 3.11% in the second quarter of 2025. Linked quarter results reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees, adding approximately $347,000 to net interest income of $11.4 million and 10 basis points to NIM of 3.31%. Second quarter 2024 net interest income was $9.5 million and NIM was 2.78%.
The efficiency ratio was 65.66%, compared to 67.19% in the linked quarter and 74.36% in the year-ago period. The efficiency ratio, which is not a financial metric under generally accepted accounting principles ("GAAP"), is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue.
Pre-tax, pre-provision ("PTPP") net income was $4.2 million, compared to $4.2 million in the linked quarter and $2.8 million in the year-ago period. PTPP net income, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses.

"Pathfinder's more exacting approach to proactive credit risk mitigation continues to be implemented, with measures taken to proactively address certain loans experiencing credit deterioration resulting in elevated charge offs and the sale of nonperforming and classified commercial loans associated with a single in-market commercial relationship," said President and Chief Executive Officer James A. Dowd. "These steps were taken as part of our ongoing efforts to enhance Pathfinder's asset quality and resilience over the long term."

Dowd added, "Growing our Central New York core deposit franchise remains an ongoing area of focus, as it continues to serve as a valuable source of low-cost funding for local, relationship-based lending opportunities with small- and middle-market businesses and consumers in our attractive regional markets."

Net Interest Income and Net Interest Margin

Second quarter 2025 net interest income was $10.8 million, a decrease of $597,000, or 5.2%, from the first quarter of 2025. The decrease from the linked quarter was due in part to approximately $347,000 of first quarter 2025 net interest income attributed to 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees.

A decrease in interest and dividend income of $259,000 from the linked quarter was attributed to average yield decreases of 22 basis points on loans, which benefited by 15 basis points from 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees in the first quarter of 2025. The interest and dividend income decrease was also attributed to 5 basis points on fed funds sold and interest-earning deposits, and 11 basis points on all interest-earning assets, partially offset by average yield increases on taxable and tax-exempt securities of 3 and 76 basis points, respectively. In addition, average loan balances declined by $4.9 million, while average balances of lower-yielding taxable securities increased by $18.5 million. The corresponding decrease in loan interest income and federal funds sold and interest-earning deposits was $566,000 and $21,000, respectively, partially offset by increases in taxable and tax-exempt securities income of $337,000 and $63,000, respectively. An increase in interest expense from the first quarter of 2025 of $338,000 was primarily attributed to a 5 basis point increase in the average cost of interest bearing deposits.

Net interest margin was 3.11% in the second quarter of 2025 compared to 3.31% in the first quarter 2025. The decrease of 20 basis points reflected lower average loan yields and higher average interest bearing deposit costs in the second quarter of 2025, as well as approximately 10 basis points of first quarter 2025 margin attributed to 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees.

Second quarter 2025 net interest income was $10.8 million, an increase of $1.3 million, or 14.1%, from the second quarter of 2024. An increase in interest and dividend income of $160,000 was primarily attributed to average yield increases of 11 basis points on loans and a $25.9 million increase in average loan balances. The corresponding increase in loan interest income was $617,000. A decrease in interest expense of $1.2 million was attributed to reductions in the average cost of interest bearing deposits and total interest-bearing liabilities of 40 basis points and 45 basis points, respectively, as well as reductions in brokered deposits and short-term borrowings expense associated with paydowns of brokered deposits and borrowings utilizing a portion of the low-cost liquidity provided by core deposit growth.

Net interest margin was 3.11% in the second quarter of 2025 compared to 2.78% in the second quarter of 2024. The increase of 33 basis points reflected higher average loan yields and lower average deposit and borrowing costs in the second quarter of 2025, as compared to the year-ago period.

Noninterest Income

Second quarter 2025 noninterest income includes the $3.1 million LOCOM HFS adjustment, with an after-tax effect of $2.5 million or $0.40 per diluted share. Nonperforming and classified loans associated with one local commercial relationship dating back to 2013, with an original principal balance of $9.3 million and a June 30, 2025 principal balance of $6.3 million were sold in July 2025 for $3.2 million to an undisclosed financial buyer.

Second quarter 2025 noninterest income totaled negative $1.5 million, reflecting the $3.1 million LOCOM HFS adjustment, and no longer includes contributions from the insurance agency business sold in October 2024. Noninterest income was $1.2 million in the linked quarter and $1.2 million, including $260,000 in insurance revenue, in the year-ago period.

Compared to the linked quarter, second quarter 2025 noninterest income reflected increases of $179,000 in debit card interchange fees and $6,000 in service charges on deposit accounts, as well as a decrease of $6,000 in earnings and gain on bank owned life insurance ("BOLI"). Compared to the linked quarter, second quarter 2025 noninterest income also reflected increases of $202,000 in net unrealized gains on marketable equity securities, as well as decreases of $8,000 in net realized losses on sales and redemptions of investment securities and $4,000 in loan servicing fees.

Compared to the year-ago period, second quarter 2025 noninterest income included increases of $50,000 in service charges on deposit accounts, as well as decreases of $11,000 in earnings and gain on BOLI, and $11,000 in debit card interchange fees. Compared to the year-ago period, second quarter 2025 noninterest income also reflected an increase of $559,000 in net unrealized gains on marketable equity securities, as well as decreases of $16,000 in net realized gains on sales and redemptions of investment securities and $15,000 in loan servicing fees.

Noninterest Expense

Noninterest expense totaled $8.1 million in the second quarter of 2025, including $595,000 in costs associated with the East Syracuse branch acquired in July 2024 and excluding costs for the insurance agency business sold in October 2024. Noninterest expense was $8.4 million in the linked quarter, including East Syracuse branch costs of $577,000, and $7.9 million in the year-ago period, including insurance agency costs of $232,000.

Salaries and benefits were $4.5 million in the second quarter of 2025, in line with the linked quarter and increased $126,000 from the year-ago period. The increase from the second quarter of 2024 was primarily attributed to the July 2024 East Syracuse Branch Acquisition, which had $116,000 of total salary and benefit expenses in the second quarter of 2025. Excluding the East Syracuse branch, salaries and benefits increased $10,000 from the year-ago period. This increase from the second quarter of 2024 was primarily attributed to a $183,000 increase in stock-based compensation, partially offset by a $106,000 decrease in employee benefits, a $51,000 decrease in salaries and benefits expenses, and a $16,000 decrease in director compensation.

Building and occupancy was $1.2 million in the second quarter of 2025, decreasing $117,000 from the linked quarter and increasing $316,000 from the year-ago quarter. The decrease from the linked quarter reflected lower costs associated with building maintenance primarily related to snow removal. The increase from the first quarter of last year was primarily due to ongoing facilities-related costs associated with operating the East Syracuse branch acquired in July 2024.

Data processing expense was $667,000 in the second quarter of 2025, in line with the linked quarter and increasing $117,000 from the year-ago period. The increase from the second quarter of 2024 was primarily attributed to the ongoing operations of the East Syracuse branch acquired in July 2024.

No FDIC assessment expense was recorded in the second quarter of 2025, due to modest over-accruals in prior periods, compared to $229,000 and $228,000 in the linked and year-ago periods, respectively. The Company anticipates more normalized FDIC assessments in the future and expects this expense to range between $220,000 to $230,000 per quarter in the second half of 2025.

Annualized noninterest expense represented 2.18% of average assets in the second quarter of 2025, compared to 2.33% and 2.19% in the linked and year-ago periods. The efficiency ratio was 65.66%, compared to 67.19% and 74.36% in the linked and year-ago periods, respectively. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue.

Net Income

For the second quarter of 2025, net income attributable to common shareholders was $31,000, or less than $0.01 per basic and diluted share. Linked quarter net income was $3.0 million, or $0.48 per basic share and $0.47 per diluted share. Second quarter 2024 net income totaled $2.0 million or $0.32 per basic and diluted share.

Statement of Financial Condition

As of June 30, 2025, the Company's statement of financial condition reflects total assets of $1.51 billion, compared to $1.50 billion and $1.45 billion recorded on March 31, 2025 and June 30, 2024, respectively.

Loans totaled $909.7 million on June 30, 2025, after $3.2 million in balances were moved to held-for-sale status for the July 2025 sale of nonperforming and classified loans, resulting in a decrease of $2.4 million or 0.3% from March 31, 2025. Total loans increased $21.5 million or 2.4% from one year prior. Consumer and residential loans totaled $362.1 million, decreasing 2.4% during the second quarter and increasing 0.2% from one year prior. Commercial loans totaled $549.1 million, increasing 1.2% during the second quarter and 4.1% from one year prior, despite the recent loan sale.

With respect to liabilities, deposits totaled $1.22 billion on June 30, 2025, decreasing 3.4% on reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality, during the second quarter and increasing 11.0% from one year prior.

Shareholders' equity totaled $124.4 million on June 30, 2025, decreasing $483,000 or 0.4% in the second quarter and increasing $1.1 million or 0.9% from one year prior. The second quarter 2025 decrease primarily reflects a $599,000 decrease in retained earnings, a $426,000 decrease in accumulated other comprehensive loss ("AOCL"), and a $542,000 increase in additional paid in capital. Noncontrolling interest, previously included in equity on the Statements of Financial Condition, was eliminated in October 2024 upon the sale of the Company's 51% insurance agency ownership interest.

Asset Quality

The Company's asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach.

Nonperforming loans were $11.7 million, or 1.28% of total loans on June 30, 2025, compared to $13.2 million or 1.45% on March 31, 2025 and $24.5 million or 2.76% on June 30, 2024. Continued improvement in nonperforming loans in the second quarter of 2025 primarily resulted from the recent sale of loans associated with one local commercial relationship dating to 2013.

NCOs after recoveries were $2.6 million or an annualized 1.14% of average loans in the second quarter of 2025, with gross charge offs for consumer loans, purchased loan pools, and commercial loans, offsetting recoveries in each of these categories. NCOs were $340,000 or an annualized 0.15% of average loans in the linked quarter and $66,000 or 0.03% in the prior year period.

Provision for credit loss expense was $1.2 million in the second quarter of 2025 primarily reflecting NCOs in the period, partially offset by reductions related to quantitative and qualitative factors in the Company's reserve model. The provision was $457,000 and $290,000 in the linked and year-ago quarters, respectively.

The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses ("ACL") of $16.0 million on June 30, 2025, compared to $17.4 million on March 31, 2025 and $16.9 million on June 30, 2024. As a percentage of total loans, ACL represented 1.76% on June 30, 2025, 1.91% on March 31, 2025, and 1.90% on June 30, 2024.

Liquidity

The Company has diligently ensured a strong liquidity profile as of June 30, 2025 to meet its ongoing financial obligations. The Bank's liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution's leadership.

The Bank's analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.22 billion on June 30, 2025, compared to $1.26 billion on March 31, 2025 and $1.10 billion on June 30, 2024. Decreases in total deposits primarily reflect reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality. Core deposits grew to 78.47% of total deposits on June 30, 2025, compared to 78.31% on March 31, 2025 and 67.98% on June 30, 2024. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability.

On June 30, 2025, Pathfinder Bancorp had an available additional funding capacity of $124.5 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $46.5 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve's Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements.

Cash Dividend Declared

On June 30, 2025, Pathfinder's Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock.

In addition, this dividend also extends to the notional shares of the Company's warrants. Shareholders registered by July 18, 2025 will be eligible for the dividend, which is scheduled for disbursement on August 8, 2025. This distribution aligns with Pathfinder Bancorp's philosophy of consistent and reliable delivery of shareholder value.

Evaluating the Company's market performance, the closing stock price as of June 30, 2025 stood at $15.34 per share. This positions the annualized dividend yield at 2.61%.

About Pathfinder Bancorp, Inc.

Pathfinder Bancorp, Inc. (NASDAQ:PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank's commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com.

Forward-Looking Statements

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

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

PATHFINDER BANCORP, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)

	2025						2024
SELECTED BALANCE SHEET DATA:	June 30,			March 31,			December 31,			September 30,			June 30,
ASSETS:
Cash and due from banks	$	16,183		$	18,606		$	13,963		$	18,923		$	12,022
Interest-earning deposits		15,292			32,862			17,609			16,401			19,797
Total cash and cash equivalents		31,475			51,468			31,572			35,324			31,819
Available-for-sale securities, at fair value		300,951			284,051			269,331			271,977			274,977
Held-to-maturity securities, at amortized cost		157,892			155,704			158,683			161,385			166,271
Marketable equity securities, at fair value		4,881			4,401			4,076			3,872			3,793
Federal Home Loan Bank stock, at cost		5,278			2,906			4,590			5,401			8,702
Loans held-for-sale		3,161			-			-			-			-
Loans, net of deferred fees		909,723			912,150			918,986			921,660			888,263
Less: Allowance for credit losses		15,983			17,407			17,243			17,274			16,892
Loans receivable, net		893,740			894,743			901,743			904,386			871,371
Premises and equipment, net		19,047			19,233			19,009			18,989			18,878
Assets held-for-sale		-			-			-			-			3,042
Operating lease right-of-use assets		1,115			1,356			1,391			1,425			1,459
Finance lease right-of-use assets		16,280			16,478			16,676			16,873			4,004
Accrued interest receivable		6,889			6,748			6,881			6,806			7,076
Foreclosed real estate		83			-			-			-			60
Intangible assets, net		5,675			5,832			5,989			6,217			76
Goodwill		5,056			5,056			5,056			5,752			4,536
Bank owned life insurance		31,045			24,889			24,727			24,560			24,967
Other assets		22,551			22,472			25,150			20,159			25,180
Total assets	$	1,505,119		$	1,495,337		$	1,474,874		$	1,483,126		$	1,446,211

LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Interest-bearing deposits	$	1,030,155		$	1,061,166		$	990,805		$	986,103		$	932,132
Noninterest-bearing deposits		191,732			203,314			213,719			210,110			169,145
Total deposits		1,221,887			1,264,480			1,204,524			1,196,213			1,101,277
Short-term borrowings		75,500			27,000			61,000			60,315			127,577
Long-term borrowings		20,977			17,628			27,068			39,769			45,869
Subordinated debt		30,206			30,156			30,107			30,057			30,008
Accrued interest payable		813			844			546			236			2,092
Operating lease liabilities		1,313			1,560			1,591			1,621			1,652
Finance lease liabilities		16,566			16,655			16,745			16,829			4,359
Other liabilities		13,444			12,118			11,810			16,986			9,203
Total liabilities		1,380,706			1,370,441			1,353,391			1,362,026			1,322,037
Shareholders' equity:
Voting common stock shares issued and outstanding		4,788,109			4,761,182			4,745,366			4,719,788			4,719,788
Voting common stock	$	48		$	48		$	47		$	47		$	47
Non-voting common stock		14			14			14			14			14
Additional paid in capital		53,645			53,103			52,750			53,231			53,182
Retained earnings		79,564			80,163			77,816			73,670			78,936
Accumulated other comprehensive loss		(8,858	)		(8,432	)		(9,144	)		(6,716	)		(8,786	)
Unearned ESOP shares		-			-			-			-			(45	)
Total Pathfinder Bancorp, Inc. shareholders' equity		124,413			124,896			121,483			120,246			123,348
Noncontrolling interest		-			-			-			854			826
Total equity		124,413			124,896			121,483			121,100			124,174
Total liabilities and shareholders' equity	$	1,505,119		$	1,495,337		$	1,474,874		$	1,483,126		$	1,446,211

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

	Six Months Ended June 30,						2025						2024
SELECTED INCOME STATEMENT DATA:	2025			2024			Q2			Q1			Q4			Q3			Q2
Interest and dividend income:
Loans, including fees	$	26,778		$	24,757		$	13,106		$	13,672		$	13,523		$	14,425		$	12,489
Debt securities:
Taxable		10,707			11,343			5,522			5,185			5,312			5,664			5,736
Tax-exempt		867			1,006			465			402			445			469			498
Dividends		114			307			21			93			164			149			178
Federal funds sold and interest-earning deposits		157			219			68			89			82			492			121
Total interest and dividend income		38,623			37,632			19,182			19,441			19,526			21,199			19,022
Interest expense:
Interest on deposits		14,263			15,037			7,318			6,945			7,823			7,633			7,626
Interest on short-term borrowings		1,040			2,340			495			545			700			1,136			1,226
Interest on long-term borrowings		137			395			72			65			136			202			201
Interest on subordinated debt		958			980			483			475			490			496			489
Total interest expense		16,398			18,752			8,368			8,030			9,149			9,467			9,542
Net interest income		22,225			18,880			10,814			11,411			10,377			11,732			9,480
Provision for (benefit from) credit losses:
Loans		1,677			1,014			1,173			504			988			9,104			304
Held-to-maturity securities		5			(59	)		5			-			(5	)		(31	)		(74	)
Unfunded commitments		(28	)		61			19			(47	)		5			(104	)		60
Total provision for credit losses		1,654			1,016			1,197			457			988			8,969			290
Net interest income after provision for credit losses		20,571			17,864			9,617			10,954			9,389			2,763			9,190
Noninterest income:
Service charges on deposit accounts		754			639			380			374			405			392			330
Earnings and gain on bank owned life insurance		318			324			156			162			169			361			167
Loan servicing fees		198			200			97			101			96			79			112
Net realized (losses) gains on sales and redemptions of investment securities		(8	)		(132	)		-			(8	)		249			(188	)		16
Gain on asset sale ^{1 & 2}		-			-			-			-			3,169			-			-
Net unrealized gains (losses) on marketable equity securities		638			(31	)		420			218			166			62			(139	)
Gains on sales of loans and foreclosed real estate		148			58			83			65			39			90			40
LOCOM HFS adjustment ³		(3,064	)		-			(3,064	)		-			-			-			-
Loss on sale of premises and equipment		-			-			-			-			-			(36	)		-
Debit card interchange fees		181			310			180			1			265			300			191
Insurance agency revenue ¹		-			657			-			-			49			367			260
Other charges, commissions & fees		514			923			230			284			299			280			234
Total noninterest (loss) income		(321	)		2,948			(1,518	)		1,197			4,906			1,707			1,211
Noninterest expense:
Salaries and employee benefits		8,975			8,728			4,525			4,450			4,123			4,959			4,399
Building and occupancy		2,577			1,730			1,230			1,347			1,254			1,134			914
Data processing		1,333			1,078			667			666			721			672			550
Professional and other services		1,384			1,258			778			606			608			1,820			696
Advertising		218			221			77			141			218			165			116
FDIC assessments		229			457			-			229			231			228			228
Audits and exams		174			293			60			114			123			123			123
Amortization expense		314			8			157			157			27			124			5
Insurance agency expense ¹		-			517			-			-			456			308			232
Community service activities		39			91			28			11			19			20			39
Foreclosed real estate expenses		50			55			29			21			20			27			30
Other expenses		1,201			1,178			510			691			744			679			576
Total noninterest expense		16,494			15,614			8,061			8,433			8,544			10,259			7,908
Income (loss) before provision for income taxes		3,756			5,198			38			3,718			5,751			(5,789	)		2,493
Provision (benefit) for income taxes		751			1,013			7			744			492			(1,173	)		481
Net income (loss) attributable to noncontrolling interest and Pathfinder Bancorp, Inc.		3,005			4,185			31			2,974			5,259			(4,616	)		2,012
Net income attributable to noncontrolling interest ¹		-			65			-			-			1,352			28			12
Net income (loss) attributable to Pathfinder Bancorp Inc.	$	3,005		$	4,120		$	31		$	2,974		$	3,907		$	(4,644	)	$	2,000
Voting Earnings per common share - basic	$	0.48		$	0.66		$	-		$	0.48		$	0.63		$	(0.75	)	$	0.32
Voting Earnings per common share - diluted⁴	$	0.47		$	0.66		$	-		$	0.47		$	0.63		$	(0.75	)	$	0.32
Series A Non-Voting Earnings per common share- basic	$	0.48		$	0.66		$	-		$	0.48		$	0.63		$	(0.75	)	$	0.32
Series A Non-Voting Earnings per common share- diluted ⁴	$	0.47		$	0.66		$	-		$	0.47		$	0.63		$	(0.75	)	$	0.32
Dividends per common share (Voting and Series A Non-Voting)	$	0.20		$	0.20		$	0.10		$	0.10		$	0.10		$	0.10		$	0.10

¹Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC ("Agency") the Company is required to consolidate 100% of the Agency within the consolidated financial statements. The Company sold its 51% membership interest in the Agency in October 2024.

² The $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company's 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest.

³ The loss reflects a valuation adjustment "Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations.

⁴ Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously.

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

	Six Months Ended June 30,						2025						2024
FINANCIAL HIGHLIGHTS:	2025			2024			Q2			Q1			Q4			Q3			Q2
Selected Ratios:
Return on average assets		0.41	%		0.58	%		0.01	%		0.81	%		1.07	%		-1.25	%		0.56	%
Return on average common equity		4.83	%		6.74	%		0.10	%		9.64	%		12.85	%		-14.79	%		6.49	%
Return on average equity		4.83	%		6.74	%		0.10	%		9.64	%		12.85	%		-14.79	%		6.49	%
Return on average tangible common equity ¹		5.34	%		7.05	%		0.11	%		10.52	%		14.17	%		-15.28	%		6.78	%
Net interest margin		3.21	%		2.77	%		3.11	%		3.31	%		3.02	%		3.34	%		2.78	%
Loans / deposits		74.45	%		80.66	%		74.45	%		72.14	%		76.29	%		77.05	%		80.66	%
Core deposits/deposits ²		78.47	%		67.98	%		78.47	%		78.31	%		76.86	%		77.45	%		67.98	%
Annualized non-interest expense / average assets		2.26	%		2.20	%		2.18	%		2.33	%		2.33	%		2.75	%		2.19	%
Commercial real estate / risk-based capital ³		183.34	%		169.73	%		183.34	%		182.62	%		186.73	%		189.47	%		169.73	%
Efficiency ratio ¹		66.43	%		71.29	%		65.66	%		67.19	%		72.25	%		75.78	%		74.36	%

Other Selected Data:
Average yield on loans		5.86	%		5.56	%		5.75	%		5.97	%		5.87	%		6.31	%		5.64	%
Average cost of interest bearing deposits		2.78	%		3.14	%		2.81	%		2.76	%		3.12	%		3.11	%		3.21	%
Average cost of total deposits, including non-interest bearing		2.33	%		2.67	%		2.37	%		2.29	%		2.59	%		2.59	%		2.72	%
Deposits/branch ⁴	$	101,824		$	100,116		$	101,824		$	105,373		$	100,377		$	99,684		$	100,116
Pre-tax, pre-provision net income ¹	$	8,334		$	6,288		$	4,216		$	4,183		$	3,321		$	3,368		$	2,767
Total revenue ¹	$	24,828		$	21,902		$	12,277		$	12,616		$	11,865		$	13,627		$	10,675

Share and Per Share Data:
Cash dividends per share	$	0.20		$	0.20		$	0.10		$	0.10		$	0.10		$	0.10		$	0.10
Book value per common share	$	20.17		$	20.22		$	20.17		$	20.33		$	19.83		$	19.71		$	20.22
Tangible book value per common share ¹	$	18.43		$	19.46		$	18.43		$	18.56		$	18.03		$	17.75		$	19.46
Basic and diluted weighted average shares outstanding - Voting		4,759			4,704			4,769			4,749			4,733			4,714			4,708
Basic earnings per share - Voting⁵	$	0.48		$	0.66		$	-		$	0.48		$	0.63		$	(0.75	)	$	0.32
Diluted earnings per share - Voting^{5 & 6}	$	0.47		$	0.66		$	-		$	0.47		$	0.63		$	(0.75	)	$	0.32
Basic and diluted weighted average shares outstanding - Series A Non-Voting		1,380			1,380			1,380			1,380			1,380			1,380			1,380
Basic earnings per share - Series A Non-Voting ⁵	$	0.48		$	0.66		$	-		$	0.48		$	0.63		$	(0.75	)	$	0.32
Diluted earnings per share - Series A Non-Voting^{5 & 6}	$	0.47		$	0.66		$	-		$	0.47		$	0.63		$	(0.75	)	$	0.32
Common shares outstanding at period end		6,168			6,100			6,168			6,141			6,126			6,100			6,100

Pathfinder Bancorp, Inc. Capital Ratios:
Company tangible common equity to tangible assets¹		7.61	%		8.24	%		7.61	%		7.68	%		7.54	%		7.36	%		8.24	%
Company Total Core Capital (to Risk-Weighted Assets)		15.97	%		16.19	%		15.97	%		15.89	%		15.66	%		15.55	%		16.19	%
Company Tier 1 Capital (to Risk-Weighted Assets)		12.31	%		12.31	%		12.31	%		12.24	%		12.00	%		11.84	%		12.31	%
Company Tier 1 Common Equity (to Risk-Weighted Assets)		11.81	%		11.83	%		11.81	%		11.75	%		11.51	%		11.33	%		11.83	%
Company Tier 1 Capital (to Assets)		8.75	%		9.16	%		8.75	%		8.82	%		8.64	%		8.29	%		9.16	%

Pathfinder Bank Capital Ratios:
Bank Total Core Capital (to Risk-Weighted Assets)		14.87	%		16.04	%		14.87	%		14.86	%		14.65	%		14.52	%		16.04	%
Bank Tier 1 Capital (to Risk-Weighted Assets)		13.62	%		14.79	%		13.62	%		13.61	%		13.40	%		13.26	%		14.79	%
Bank Tier 1 Common Equity (to Risk-Weighted Assets)		13.62	%		14.79	%		13.62	%		13.61	%		13.40	%		13.26	%		14.79	%
Bank Tier 1 Capital (to Assets)		9.68	%		10.30	%		9.68	%		9.80	%		9.64	%		9.13	%		10.30	%

¹ Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.

² Non-brokered deposits excluding certificates of deposit of $250,000 or more.

³ Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital.

⁴ Includes 11 full-service branches and one motor bank for periods after June 30, 2024. Includes 10 full-service branches and one motor bank for all periods prior.

⁵ Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares.

⁶ Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously.

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

	Six Months Ended June 30,						2025						2024
ASSET QUALITY:	2025			2024			Q2			Q1			Q4			Q3			Q2
Total loan charge-offs	$	3,352		$	180		$	2,844		$	508		$	1,191		$	8,812		$	112
Total recoveries		415			84			247			168			171			90			46
Net loan charge-offs		2,937			96			2,597			340			1,020			8,722			66
Allowance for credit losses at period end		15,983			16,892			15,983			17,407			17,243			17,274			16,892
Nonperforming loans at period end		11,689			24,490			11,689			13,232			22,084			16,170			24,490
Nonperforming assets at period end	$	11,772		$	24,550		$	11,772		$	13,232		$	22,084		$	16,170		$	24,550
Annualized net loan charge-offs to average loans		0.64	%		0.02	%		1.14	%		0.15	%		0.44	%		3.82	%		0.03	%
Allowance for credit losses to period end loans		1.76	%		1.90	%		1.76	%		1.91	%		1.88	%		1.87	%		1.90	%
Allowance for credit losses to nonperforming loans		136.74	%		68.98	%		136.74	%		131.55	%		78.08	%		106.83	%		68.98	%
Nonperforming loans to period end loans		1.28	%		2.76	%		1.28	%		1.45	%		2.40	%		1.75	%		2.76	%
Nonperforming assets to period end assets		0.78	%		1.70	%		0.78	%		0.88	%		1.50	%		1.09	%		1.70	%

	2025						2024
LOAN COMPOSITION:	June 30,			March 31,			December 31,			September 30,			June 30,
1-4 family first-lien residential mortgages	$	240,833		$	243,854		$	251,373		$	255,235		$	250,106
Residential construction		3,520			3,162			4,864			4,077			309
Commercial real estate		381,575			381,479			377,619			378,805			370,361
Commercial lines of credit		75,487			65,074			67,602			64,672			62,711
Other commercial and industrial		85,578			91,644			89,800			88,247			90,813
Paycheck protection program loans		85			96			113			125			136
Tax exempt commercial loans		6,349			4,446			4,544			2,658			3,228
Home equity and junior liens		49,339			52,315			51,948			52,709			35,821
Other consumer		68,439			71,681			72,710			76,703			75,195
Subtotal loans		911,205			913,751			920,573			923,231			888,680
Deferred loan fees		(1,482	)		(1,601	)		(1,587	)		(1,571	)		(417	)
Total loans	$	909,723		$	912,150		$	918,986		$	921,660		$	888,263

	2025				2024
DEPOSIT COMPOSITION:	June 30,		March 31,		December 31,		September 30,		June 30,
Savings accounts	$	129,252	$	129,898	$	128,753	$	129,053	$	106,048
Time accounts		341,063		349,673		360,716		352,729		368,262
Time accounts in excess of $250,000		144,355		149,922		142,473		140,181		117,021
Money management accounts		9,902		10,774		11,583		11,520		12,154
MMDA accounts		278,919		306,281		239,016		250,007		193,915
Demand deposit interest-bearing		120,083		109,941		101,080		97,344		128,168
Demand deposit noninterest-bearing		191,732		203,314		213,719		210,110		169,145
Mortgage escrow funds		6,581		4,677		7,184		5,269		6,564
Total deposits	$	1,221,887	$	1,264,480	$	1,204,524	$	1,196,213	$	1,101,277

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

	Six Months Ended June 30,						2025							2024
SELECTED AVERAGE BALANCES:	2025			2024			Q2			Q1			Q2
Interest-earning assets:
Loans	$	913,658		$	889,988		$	911,347		$	916,207		$	885,384
Taxable investment securities		425,841			433,156			435,022			416,558			434,572
Tax-exempt investment securities		34,394			29,053			34,314			34,475			28,944
Fed funds sold and interest-earning deposits		11,497			8,669			10,070			12,939			13,387
Total interest-earning assets		1,385,390			1,360,866			1,390,753			1,380,179			1,362,287
Noninterest-earning assets:
Other assets		116,590			96,772			118,280			114,882			98,746
Allowance for credit losses		(17,377	)		(16,498	)		(17,342	)		(17,413	)		(16,905	)
Net unrealized losses on available-for-sale securities		(10,395	)		(10,701	)		(10,838	)		(9,947	)		(10,248	)
Total assets	$	1,474,208		$	1,430,439		$	1,480,853		$	1,467,701		$	1,433,880
Interest-bearing liabilities:
NOW accounts	$	112,720		$	97,213		$	113,994		$	111,643		$	92,918
Money management accounts		10,602			11,759			10,302			10,906			12,076
MMDA accounts		277,664			212,693			298,907			256,186			214,364
Savings and club accounts		129,752			110,119			129,736			129,769			107,558
Time deposits		494,200			525,767			489,490			498,963			524,276
Subordinated loans		30,149			29,954			30,173			30,123			29,977
Borrowings		66,165			133,894			61,803			70,575			141,067
Total interest-bearing liabilities		1,121,252			1,121,399			1,134,405			1,108,165			1,122,236
Noninterest-bearing liabilities:
Demand deposits		199,123			170,313			192,186			206,137			171,135
Other liabilities		29,497			16,542			29,037			29,961			17,298
Total liabilities		1,349,872			1,308,254			1,355,628			1,344,263			1,310,669
Shareholders' equity		124,336			122,185			125,225			123,438			123,211
Total liabilities & shareholders' equity	$	1,474,208		$	1,430,439		$	1,480,853		$	1,467,701		$	1,433,880

	Six Months Ended June 30,						2025							2024
SELECTED AVERAGE YIELDS:	2025			2024			Q2			Q1			Q2
Interest-earning assets:
Loans		5.86	%		5.56	%		5.75	%		5.97	%		5.64	%
Taxable investment securities		5.08	%		5.38	%		5.10	%		5.07	%		5.44	%
Tax-exempt investment securities		5.04	%		6.93	%		5.42	%		4.66	%		6.88	%
Fed funds sold and interest-earning deposits		2.73	%		5.05	%		2.70	%		2.75	%		3.62	%
Total interest-earning assets		5.58	%		5.53	%		5.52	%		5.63	%		5.59	%
Interest-bearing liabilities:
NOW accounts		1.16	%		1.08	%		1.25	%		1.07	%		1.14	%
Money management accounts		0.09	%		0.11	%		0.12	%		0.11	%		0.10	%
MMDA accounts		3.16	%		3.70	%		3.25	%		3.06	%		3.74	%
Savings and club accounts		0.25	%		0.26	%		0.25	%		0.25	%		0.26	%
Time deposits		3.66	%		3.97	%		3.64	%		3.69	%		4.03	%
Subordinated loans		6.36	%		6.54	%		6.40	%		6.31	%		6.53	%
Borrowings		3.56	%		4.09	%		3.67	%		3.46	%		4.05	%
Total interest-bearing liabilities		2.92	%		3.34	%		2.95	%		2.90	%		3.40	%
Net interest rate spread		2.66	%		2.19	%		2.57	%		2.73	%		2.19	%
Net interest margin		3.21	%		2.77	%		3.11	%		3.31	%		2.78	%
Ratio of average interest-earning assets to average interest-bearing liabilities		123.56	%		121.35	%		122.60	%		124.55	%		121.39	%

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

	Six Months Ended June 30,						2025						2024
NON-GAAP RECONCILIATIONS:	2025			2024			Q2			Q1			Q4			Q3			Q2
Tangible book value per common share:
Total equity							$	124,413		$	124,896		$	121,483		$	120,246		$	123,348
Intangible assets								(10,731	)		(10,888	)		(11,045	)		(11,969	)		(4,612	)
Tangible common equity (non-GAAP)								113,682			114,008			110,438			108,277			118,736
Common shares outstanding								6,168			6,144			6,126			6,100			6,100
Tangible book value per common share (non-GAAP)							$	18.43		$	18.56		$	18.03		$	17.75		$	19.46
Tangible common equity to tangible assets:
Tangible common equity (non-GAAP)							$	113,682		$	114,008		$	110,438		$	108,277		$	118,736
Tangible assets								1,494,388			1,484,449			1,463,829			1,471,157			1,441,599
Tangible common equity to tangible assets ratio (non-GAAP)								7.61	%		7.68	%		7.54	%		7.36	%		8.24	%
Return on average tangible common equity:
Average shareholders' equity	$	124,336		$	122,185		$	125,225		$	123,438		$	121,589		$	125,626		$	123,211
Average intangible assets		10,912			4,617			10,834			10,991			11,907			4,691			4,614
Average tangible equity (non-GAAP)		113,424			117,568			114,391			112,447			109,682			120,935			118,597
Net income (loss)		3,005			4,120			31			2,974			3,907			(4,644	)		2,000
Net income (loss), annualized	$	6,060		$	8,285		$	124		$	11,831		$	15,543		$	(18,475	)	$	8,044
Return on average tangible common equity (non-GAAP) ¹		5.34	%		7.05	%		0.11	%		10.52	%		14.17	%		-15.28	%		6.78	%
Revenue, pre-tax, pre-provision net income, and efficiency ratio:
Net interest income	$	22,225		$	18,880		$	10,814		$	11,411		$	10,377		$	11,732		$	9,480
Total noninterest income		(321	)		2,948			(1,518	)		1,197			4,906			1,707			1,211
Net realized (gains) losses on sales and redemptions of investment securities		(8	)		(132	)		-			(8	)		249			(188	)		16
Gains on sales of loans and foreclosed real estate		148			58			83			65			39			90			40
LOCOM HFS adjustment ²		(3,064	)		-			(3,064	)		-			-			-			-
Gain on asset sale		-			-			-			-			3,169			-			-
Revenue (non-GAAP) ³		24,828			21,902			12,277			12,551			11,826			13,537			10,635
Total non-interest expense		16,494			15,614			8,061			8,433			8,544			10,259			7,908
Pre-tax, pre-provision net income (non-GAAP) ⁴	$	8,334		$	6,288		$	4,216		$	4,183		$	3,321		$	3,368		$	2,767
Efficiency ratio (non-GAAP) ⁵		66.43	%		71.29	%		65.66	%		67.19	%		72.25	%		75.78	%		74.36	%

¹ Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity

² The loss reflects a valuation adjustment "Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms.

³ Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, and a gain on the October 2024 sale of the Company's insurance agency asset

⁴ Pre-tax, pre-provision net income equals revenue less total non-interest expense

⁵ Efficiency ratio equals noninterest expense divided by revenue

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

Investor/Media Contacts

James A. Dowd, President, CEO

Justin K. Bigham, Senior Vice President, CFO

Telephone: (315) 343-0057