Pathfinder Bancorp Inc (PBHC, Financial) released its Q3 2023 earnings report on November 1, 2023. The company reported a net income of $2.2 million, reflecting a decrease of $1.0 million compared to the same period in 2022. Despite the decrease in net income, the company reported a 32.0% increase in interest and dividend income, which rose to $17.7 million for Q3 2023. However, total revenue for the quarter, after provision for credit losses, decreased by 7.2% to $10.4 million compared to Q3 2022.
Financial Performance Highlights
For the three months ended September 30, 2023, the company's total interest expense increased to $7.6 million from $2.6 million reported in Q3 2022. Net interest income after provision for credit losses was $9.2 million, representing a decrease of 8.4% from Q3 2022. Noninterest income demonstrated modest growth, with the company reporting $1.2 million for Q3 2023, an increase of 2.8% from Q3 2022. Noninterest expenses for Q3 2023 were $7.7 million, a 5.3% increase compared to Q3 2022.
For the nine months ended September 30, 2023, the company reported substantial growth in its cumulative interest and dividend income, growing to $49.3 million, a 36.8% increase from the same period in 2022. However, net interest income, after the provision for credit losses, for the nine-month period ended September 30, 2023, recorded a marginal decline of 7.7% from the same period in 2022.
Company's Commentary
This quarter, much like what has been observed across the entirety of the banking sector, we encountered several challenges including a volatile interest rate environment, net interest margin compression, and an increase in personnel expenses. Despite these challenging economic conditions, we still performed well, earning $2.2 million for the quarter and a total of $6.8 million in the first nine months of 2023," Mr. Dowd noted.
Our confidence continues to be bolstered by an encouraging increase in our interest and dividend income, thanks to the robust performance of our interest-generating asset portfolios. We remain strategically poised to meet the evolving needs of our customers in an expanding and rapidly changing local and regional market, both now and in the future."
Looking Forward
Despite the prevailing economic uncertainties, the company projects a conservative annual loan growth rate of around 4% for the next 12 to 24 months. The company is also focusing on cost management strategies to offset the challenges of rising labor costs and the initial financial implications from its recently opened branch. The company expects continued pressure on net interest margins but believes its comprehensive set of interest rate risk management tools will provide protection against margin erosion for the rest of the year.
Explore the complete 8-K earnings release (here) from Pathfinder Bancorp Inc for further details.
