Pathfinder Bancorp, Inc. :PBHC-US: Earnings Analysis: Q3, 2016 By the Numbers : November 1, 2016

Pathfinder Bancorp, Inc. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of Pathfinder Bancorp, Inc. – Greene County Bancorp, Inc., Elmira Savings Bank, Flushing Financial Corporation, Dime Community Bancshares, Inc., TrustCo Bank Corp NY and Astoria Financial Corporation (GCBC-US, ESBK-US, FFIC-US, DCOM-US, TRST-US and AF-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 6.26 million, Net Earnings of USD 0.82 million.
  • Net interest income margins widened from 84.16% to 84.62% compared to the same period last year.
  • Net loan assets changed 14.24% compared to same period last year and 5.09% from previous period, total deposits changed 11.84% compared to same period last year and 5.52% from previous period.
  • Earnings decline from worsening in operating margins as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2015-09-30 2015-12-31 2016-03-31 2016-06-30 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 5.85 6.09 5.84 6.02 6.26
Revenue Growth (%YOY) 10.54 6.68 8.81 6.89 6.97
Earnings (mil) 0.89 0.78 0.66 0.83 0.82
Earnings Growth (%YOY) 18.63 -6.35 24.95 19.88 -7.34
Net Margin (%) 15.12 12.83 11.32 13.82 13.09
EPS 0.2 0.18 0.15 0.2 0.2
Return on Equity (%) 4.83 4.2 3.96 5.58 5.51
Return on Assets (%) 0.59 0.51 0.41 0.5 0.47

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Market Share Versus Profits

Revenues History
Earnings History

PBHC-US‘s change in revenue this period compared to the same period last year of 6.97% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that PBHC-US is holding onto its market share. Also, for comparison purposes, revenues changed by 4.04% and earnings by -1.44% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

{arg3)’s earnings declined year-on-year because of the increases in loan loss provisions. Its net interest income after provisions margins went from 80.41% to 79.48%. The fall in earnings would have been worse were it not for the fact that the company’s net interest income margins improved, from 84.16% to 84.62%. For comparison, net interest income margins were 82.95% and net interest income after provisions margins 80.46% in the immediate last period.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (Qtr YOY)
Total Deposits Growth Rate History (Qtr YOY)

The firm’s improvement in net interest income margins was influenced by both the relative increase in the levels of net loan assets and the level of total deposits as a percentage of equity. On an absolute basis, net loan assets changed 14.24% compared to the same period last year and 5.09% from the previous period. Total deposits changed 11.84% compared to the same period last year and 5.52% from the previous period.


The company’s decline in earnings has been influenced by the following factors: (1) Contraction of operating margins from 18.38% to 18.17% and (2) One-time items that contributed to a decrease in pretax margins from 20.69% to 18.17%

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

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Company Profile

Pathfinder Bancorp, Inc. is a holding company, which engages in the investment on its subsidiary, Pathfinder Bank. The Bank attracts deposits from the general public in the bank’s area, and investing such deposits, together with other sources of funds, in loans secured by family residential real estate, commercial real estate, small business loans, and consumer loans. It also invest in securities, which consist of securities issued by the United States Government and its agencies and sponsored enterprises, state and municipal obligations, corporate debt securities, mutual funds, and equity securities. The company was founded on June 11, 2014 and is headquartered in Oswego, NY.

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