Pathfinder Bancorp Inc. has a market cap of $16.8 million; its shares were traded at around $6.7401 with a P/E ratio of 11.6 and P/S ratio of 0.8. The dividend yield of Pathfinder Bancorp Inc. stocks is 1.8%.
Highlight of Business Operations:Net interest income, on a tax-equivalent basis increased to $3.3 million for the three months ended March 31, 2010, from $2.8 million for the three months ended March 31, 2009. The Company's net interest margin for the first quarter of 2010 increased to 3.71% from 3.37% when compared to the same quarter in 2009. Significant reductions in short-term interest rates have resulted in a positively sloped yield curve. Reductions in the Company s cost of funds, combined with efforts to maintain the current levels of earning asset yields have resulted in an expansion of the Company s net interest margin. The increase in net interest income is attributable to a decrease of 76 basis points in the average cost of interest bearing liabilities, and was partially offset by a decrease of 38 basis points in the average yield earned on earning assets. Average interest-earning assets increased 6.6% to $356.5 million for the three months ended March 31, 2010, as compared to $334.3 million for the three months ended March 31, 2009. The increase in average earning assets is primarily attributable to a $14.6 million increase in loans receivable, a $4.6 million increase in interest earning deposits and a $2.9 million increase in investment securities. Average interest-bearing liabilities increased $15.9 million to $322.4 million from $306.5 million for the three months ended March 31, 2009. The increase in the average balance of interest-bearing liabilities resulted primarily from a $22.9 million increase in average deposits, offset by a decrease of $7.0 million in average borrowings.
The average balance of loans increased $14.6 million to $262.8 million, with yields decreasing 9 basis points to 5.78% for the first quarter of 2010. Average residential real estate loans increased $1.0 million, or 0.7%, and experienced an increase in the average yield to 5.68% from 5.61% in the comparable quarter of 2009. Average commercial real estate loans increased $7.2 million, while the average yield on those loans decreased to 6.36% from 6.76% in the comparable quarter. Average commercial loans increased $4.1 million and experienced a decrease in the average yield of 4 basis points, to 5.04% for the quarter ended March 31, 2010, from 5.08%, in the quarter ended March 31, 2009. Average municipal loans increased approximately $349,000, but experienced a decrease in yield of 82 basis points. Average consumer loans increased $2.0 million, or 7.1%, while the average yield decreased by 23 basis points.
Total interest expense decreased $527,000 for the three months ended March 31, 2010, compared to the same quarter in 2009, as the cost of funds decreased 76 basis points to 1.48% in 2010 from 2.24% in 2009. Although each deposit product line s average balance increased in 2010 over the first quarter of 2009, the associated cost of funds decreased sufficiently to lower the overall interest expense incurred. The largest decrease in interest expense came from time deposits. The average balance of time deposits increased $218,000, and was offset by a 127 basis point reduction in the cost of funds. Time deposits with longer original maturities continue to reprice into the current low rate environment as they renew providing relief in the related cost of funds. Additionally, the average balance of money market demand accounts increased to $46.3 million for the three months ended March 31, 2010 from $34.2 million for the three months ended March 31, 2009 but was offset by a decrease in the cost of funds to 0.54% from 0.92%. The other deposit categories, NOW accounts, money management and savings, experienced an increased average combined balance of $10.6 million, but the small reductions in cost of funds (ranging from 1 to 5 basis points) was enough to reduce interest expense on these deposits by $3,000 from the same quarter in 2009. The average balance of total borrowings decreased $7.0 million. Interest expense on borrowings decreased by $73,000, or 17.4%, from the prior period as a result of a 24 basis point decrease in the cost of funds on the junior subordinated debenture that resulted from a reduction in its index rate which is based on 3-month LIBOR, combined with the cost of funds on other borrowings decreasing 6 basis points to 3.68% for the three months ended March 31, 2010.
Total assets increased approximately $15.0 million, or 4.0%, to $386.7 million at March 31, 2010, from $371.7 million at December 31, 2009. The increase in total assets was primarily the result of an increase of $6.8 million, or 46.3%, in cash and cash equivalents, a $7.3 million increase in investment securities, and a $941,000 increase in other assets resulting from a $1.0 million pension contribution. The increase in cash and cash equivalents was primarily the result of an increase in interest earning overnight funds held at the Federal Home Loan Bank, which were generated from increased deposits. Investment securities portfolio growth is being driven by the purchase of agency securities and tax-exempt investment securities with the excess liquidity generated by deposit growth.
Total liabilities increased $14.2 million, or 4.1%, to $356.6 million at March 31, 2010, from $342.4 million at December 31, 2009. Deposits increased $17.8 million, or 6.0%. This increase was offset by a reduction in long-term borrowings of $3.0 million, or 8.3%. The increase in deposits was the result of an increase of $22.7 million in municipal customer deposits and an increase in business deposits of $3.4 million, partially offset by decreased retail and escrow deposits. The large municipal deposit increase was driven by the receipt of tax revenues by our municipal customers.
Shareholders' equity at March 31, 2010, was $30.1 million as compared to $29.2 million at December 31, 2009. The Company added $600,000 to retained earnings through net income. The increase to retained earnings was combined with a decrease of $436,000 in accumulated other comprehensive loss, which decreased to $989,000 from $1.4 million at December 31, 2009. Unrealized holding gains on securities, net of tax, resulted in a decrease in accumulated other comprehensive loss of $370,000. In addition, $33,000 of amortization of retirement plan losses and transition obligation, net of tax expense, and another $33,000 in unrealized gains on the interest rate derivative, net of tax expense, decreased accumulated other comprehensive loss. Common stock dividends declared reduced capital by $74,000. Preferred stock dividends paid to the United States Treasury, under the terms of the agreement entered into in 2009 as part of the Capital Purchase Plan, reduced capital by $85,000.
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