Pathfinder Bancorp, Inc. Announces Financial Results for the Third Quarter of 2026

Pathfinder reported earnings of $0.32 per diluted share, with continued progress resolving previously identified commercial credits, disciplined deposit pricing, a focus on relationship-based deposits, and sequential-quarter net interest income growth.

OSWEGO, N.Y., Nov. 02, 2026 (GLOBE NEWSWIRE) — Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the third quarter ended September 30, 2026.

The holding company for Pathfinder Bank (“the Bank”) reported net income of $2.1 million, or $0.32 per diluted share, in the third quarter of 2026, compared to $2.7 million, or $0.42 per diluted share, in the second quarter of 2026, and $626,000, or $0.10 per diluted share, in the third quarter of 2025.

Third Quarter 2026 Highlights and Key Developments

• Third quarter 2026 net income reflected provision expense of $231,000, attributed to quantitative and qualitative factor adjustments to the allowance for credit losses (“ACL”), compared to a provision benefit of $155,000 in the second quarter of 2026 and provision expense of $3.5 million in the third quarter of 2025.
• The Company’s ACL, which reflects the risk-based reserve build undertaken in the second half of 2025 to absorb future loss resolution activity related to commercial individually analyzed loans (“IALs”), was $22.7 million, or 2.60% of total loans, on September 30, 2026, $26.9 million, or 3.03% of loans, on June 30, 2026, and $18.7 million, or 2.08%, on September 30, 2025. Specific reserves, including those previously established in conjunction with last year’s comprehensive commercial portfolio review, represented 57.4% of the ACL at the end of the third quarter of 2026. Net charge-offs (“NCOs”) were $4.3 million in the third quarter of 2026, driven primarily by commercial IALs and fully covered by previously established specific reserves. NCOs were $1.9 million in the second quarter of 2026 and $670,000 in the third quarter of 2025.
• Loans totaled $873.0 million at September 30, 2026, compared to $889.0 million at June 30, 2026, and $898.5 million at September 30, 2025. Commercial loans were $531.6 million or 60.9% of total loans at September 30, 2026, compared to $544.6 million at June 30, 2026 and $543.7 million at September 30, 2025.
• Deposits totaled $1.16 billion at September 30, 2026, compared to $1.17 billion at June 30, 2026, and $1.23 billion at September 30, 2025, reflecting intentional runoff of higher-cost time and brokered deposits, as well as municipal deposit seasonality. Core deposits were $957.1 million or 82.6% of total deposits on September 30, 2026, compared to $961.6 million on June 30, 2026, and $960.1 million on September 30, 2025.
• Net interest income was $10.7 million in the third quarter of 2026, compared to $10.5 million in the second quarter of 2026 and $11.6 million in the third quarter of 2025. Net interest margin (“NIM”) was 3.07% in the third quarter of 2026, compared to 3.08% in the second quarter of 2026 and 3.34% in the year-ago period. In the third quarter of 2025, prepayment penalty income contributed $260,000 and 7 basis points to net interest income and NIM, respectively.
• The average cost of total deposits improved to 2.04% in the third quarter of 2026, down 3 basis points from the second quarter of 2026 and 24 basis points from the third quarter of 2025, while the average cost of interest-bearing deposits was 2.48%, unchanged from the linked quarter and down 23 basis points from the year-ago period.
• Noninterest expense was $9.4 million, or 2.51% of average assets on an annualized basis in the third quarter of 2026. Noninterest expense was $8.7 million or 2.39% of average assets in the second quarter of 2026 and $8.9 million or 2.40% of average assets in the third quarter of 2025.
• The efficiency ratio was 78.13% in the third quarter of 2026, compared to 74.26% in the second quarter of 2026 and 68.78% in the third quarter of 2025⁽¹⁾.
• Pre-tax, pre-provision (“PTPP”) net income was $2.6 million in the third quarter of 2026, compared to $3.0 million in the second quarter of 2026 and $4.1 million in the third quarter of 2025⁽¹⁾.  
• Quarterly cash dividends payable to common stockholders of $0.10 per share were declared on September 28, 2026 and are payable on November 6, 2026.

“Third quarter results demonstrate continued execution of our strategy for strengthening our relationship-focused community bank,” President and Chief Executive Officer James Dowd said. “Credit performance continued to reflect the orderly resolution of previously identified commercial credits, with net charge-offs fully covered by specific reserves previously established for those exposures. In addition, recent investments in seasoned commercial banking talent have already introduced Pathfinder to growing numbers of proven borrowers and sponsors, providing a new pipeline of commercial real estate loan production that we expect to begin funding in the fourth quarter. We also remain encouraged by our region’s economic momentum, with construction well underway for the largest semiconductor manufacturing facility in the United States near two of our existing branches, as well as this month’s announcement that New York State and Micron Technology have started the process of injecting $500 million into Central New York housing, education, workforce development, and community investments through the Green CHIPS Community Investment Fund.”

Dowd added, “Our focus on Pathfinder’s valuable core deposit franchise was also evident in the third quarter. Even as we facilitate intentional runoff of higher-cost non-relationship accounts, Pathfinder maintained its leading deposit market share position among all local banks serving Oswego and Onondaga counties combined. With core deposits representing over 82% of all deposits, and six consecutive quarters of reductions in our average cost of total deposits, Pathfinder is well positioned for a rising rate environment. While we are not immune to the upward pressure the industry is widely expected to see in deposit costs, we believe Pathfinder’s market position, customer relationships, and pricing discipline provide a solid foundation for building on our core deposit base going forward.”

_{⁽¹⁾ Non-GAAP financial metric. See “Notes on Non-GAAP Financial Measures” and non-GAAP reconciliation included herein for the most directly comparable financial measures.}

Net Interest Income and Net Interest Margin
Net interest income in the third quarter of 2026 reflected a full three months’ benefit of the reallocation of underutilized liquidity into the available-for-sale (“AFS”) securities portfolio, which was primarily undertaken late in the second quarter of 2026.

Third quarter 2026 net interest income was $10.7 million, an increase of $175,000, or 1.7%, from the second quarter of 2026. An increase in total interest and dividend income of $576,000 in the third quarter of 2026, from the linked quarter, was primarily attributed to a $27.3 million increase in average earning assets, as well as an average yield increase of 6 basis points on all interest-earning assets. A 13 basis points increase in average loan yields in the third quarter of 2026, from the linked quarter, was primarily attributable to new originations of commercial real estate loans at higher rates, which offset the impact of portfolio runoff from maturities and payoffs, in addition to the transfer of two commercial relationships to nonperforming status in the third quarter of 2026. A 3 basis points increase in taxable securities average yield in the third quarter of 2026, from the linked quarter, reflected a $36.6 million increase in average taxable investment securities balances resulting from AFS securities purchases. During the third quarter of 2026, compared to the linked quarter, average balances of federal funds sold and interest-earning deposits increased by $5.2 million, while average balances of loans and tax-exempt securities declined by $14.0 million and $500,000, respectively. An increase in total interest expense in the third quarter of 2026, from the linked quarter, of $401,000 was primarily attributed to a $682,000 increase in interest on borrowings that were utilized to support recent AFS securities purchases, which more than offset a $293,000 reduction in interest paid on deposits. During the third quarter of 2026, compared to the linked quarter, the 10 basis points increase in the average cost of total interest-bearing liabilities included increases of 16 basis points in the average cost of borrowings and 16 basis points in the average cost of subordinated debt, while the average cost of interest-bearing deposits remained unchanged.

Third quarter 2026 NIM was 3.07%, compared to 3.08% in the linked quarter. The 1 basis point decrease from the linked quarter primarily resulted from an increase in the cost of borrowings, which more than offset stable interest-bearing deposit costs and higher earning asset yields.

Third quarter 2026 net interest income was $10.7 million, a decrease of $889,000 or 7.7%, from the year-ago period when the Company benefited from $260,000 in loan and investment prepayment penalty income. A decrease in total interest and dividend income of $1.1 million in the third quarter of 2026, from the year-ago period, was primarily attributed to a $20.8 million decline in average loan balances and an average yield decrease of 34 basis points on all interest-earning assets, as well as the elevated loan and investment prepayment income recorded in the third quarter of 2025. Average loan yields decreased 37 basis points from the year-ago period, driven by maturities and payoffs of higher-yielding loans, and elevated nonperforming loans for which specific reserves were established as appropriate prior to the third quarter of 2026. A 16 basis points decrease in taxable securities average yield in the third quarter of 2026, from the year-ago period, reflected payoffs of higher-yielding taxable securities in conjunction with higher average balances from recent AFS securities purchases. In addition, comparing the third quarter of 2026 to the year-ago period, the average balance of taxable securities increased by $25.6 million while average balances of loans and tax-exempt securities declined by $20.8 million and $1.4 million, respectively. Compared to the year-ago period, third quarter 2026 income from loan interest, tax-exempt securities, and federal funds sold and interest earning deposits decreased by $1.1 million, $84,000 and $15,000, respectively, while income from taxable securities and dividends increased by $71,000 and $56,000, respectively. A decrease in total interest expense in the third quarter of 2026, from the year-ago period, of $203,000 was attributed to a $1.1 million decrease in interest paid on deposits, partially offset by a $692,000 increase in interest on borrowings that were utilized to support recent AFS securities purchases. During the third quarter of 2026, compared to the year-ago period, the 5 basis points decline in the average cost of total interest-bearing liabilities included increases of 13 basis points in the average cost of borrowings and 231 basis points in the average cost of subordinated debt that reset from bearing fixed to floating-rate interest after October 15, 2025, as well as a decrease of 23 basis points in the average cost of interest-bearing deposits.

Third quarter 2026 NIM was 3.07%, compared to 3.34% in the year-ago period. The decrease of 27 basis points reflected a decline in earning asset yields and an increase in borrowing costs that more than offset lower interest-bearing deposit costs, as well as third quarter 2025 NIM that benefited by 7 basis points from elevated loan and investment prepayment penalty income.

Noninterest Income
Noninterest income totaled $1.4 million in the third quarter of 2026, compared to $1.2 million in the second quarter of 2026, and $1.5 million in the third quarter of 2025.

Compared to the linked quarter, third quarter 2026 noninterest income reflected increases of $11,000 in debit card interchange fees and $10,000 in service charges on deposit accounts, as well as decreases of $49,000 in earnings and gain on bank owned life insurance (“BOLI”) and $4,000 in loan servicing fees. In addition, compared to the linked quarter, third quarter 2026 noninterest income reflected increases of $39,000 in net realized gains on sales and redemptions of investment securities and $1,000 in gains on sales of loans and foreclosed real estate. Net unrealized gains on marketable equity securities, which include three limited partnership equity method investments, remains a variable contributor to noninterest income, increasing $125,000 in the third quarter of 2026 from the linked quarter.

Compared to the year-ago period, third quarter 2026 noninterest income reflected decreases of $49,000 in loan servicing fees, $18,000 in debit card interchange fees, $13,000 in service charges on deposit accounts, and $5,000 in earnings and gains on BOLI attributed to a $32,000 net death benefit recorded in the third quarter of 2025. In addition, compared to the year-ago period, third quarter 2026 noninterest income included an increase of $51,000 in net realized gains on sales and redemptions of investment securities and a $25,000 decrease in gains on sales of loans and foreclosed real estate. Net unrealized gains on marketable equity securities, which include three limited partnership equity method investments, remains a variable contributor to noninterest income, decreasing $73,000 in the third quarter of 2026 from the year-ago period.

Noninterest Expense
Noninterest expense totaled $9.4 million in the third quarter of 2026, compared to $8.7 million in the second quarter of 2026 and $8.9 million in the third quarter of 2025.

Salaries and benefits expense was $5.6 million in the third quarter of 2026, increasing $958,000 from the linked quarter and $606,000 from the year-ago quarter. The increase from comparable periods reflects selective senior hires including client-facing commercial banking talent, and moderate increases in salaries. Comparisons to prior periods were also affected by non-cash compensation-related costs, partially offset by the favorable impact of non-operating recoveries from medical claim refunds under the Company’s self-insured health plan.

Building and occupancy expense was $1.4 million in the third quarter of 2026, decreasing $29,000 from the linked quarter and $48,000 from the year-ago quarter. The decreases from the linked and year-ago quarters reflected lower facility-related maintenance and repair expenses, including ATM servicing, branch maintenance and various property improvement activities.

Data processing expense was $705,000 in the third quarter of 2026, decreasing $69,000 from the linked quarter and increasing $64,000 from the year-ago period. The decrease from the linked quarter reflected lower data, ATM, and other technology maintenance costs. The increase from the year-ago period primarily reflected higher technology maintenance costs.

Other noninterest expenses were $301,000 in the third quarter of 2026, decreasing $313,000 from the linked quarter and $301,000 from the year-ago quarter. The decreases from both the linked and year-ago quarters were primarily attributable to non-cash compensation-related costs.

As a percentage of average assets, annualized noninterest expense represented 2.51% in the third quarter of 2026, compared to 2.39% and 2.40% in the linked and year-ago periods. The efficiency ratio was 78.13% in the third quarter of 2026, compared to 74.26% and 68.78% in the linked and year-ago periods, respectively⁽²⁾. While noninterest expense reflects strategic investments in personnel and growth initiatives, the efficiency ratio was elevated in the first nine months of 2026, primarily due to lower revenue when compared to the prior-year period, which the Company views as temporary.

_{⁽²⁾ Non-GAAP financial metric. See “Notes on Non-GAAP Financial Measures” and non-GAAP reconciliation included herein for the most directly comparable financial measures.}

Net Income
Net income was $2.1 million, or $0.33 per basic share and $0.32 per diluted share, in the third quarter of 2026, compared to $2.7 million, or $0.42 per basic and diluted share, in the second quarter of 2026, and $626,000, or $0.10 per basic and diluted share, in the third quarter of 2025.

Statement of Financial Condition
As of September 30, 2026, the Company’s statement of financial condition reflects total assets of $1.49 billion, compared to $1.49 billion on June 30, 2026, and $1.47 billion on September 30, 2025.

Loans totaled $873.0 million on September 30, 2026, decreasing $16.0 million or 1.8% during the third quarter of 2026 and $25.5 million or 2.8% from one year prior. Consumer and residential loans totaled $342.1 million on September 30, 2026, decreasing $3.1 million or 0.9% during the third quarter of 2026 and $14.1 million or 4.0% from one year prior. Commercial loans totaled $531.6 million on September 30, 2026, decreasing $13.0 million or 2.4% during the third quarter of 2026 and $12.1 million or 2.2% from one year prior.

Investment securities totaled $465.6 million on September 30, 2026, decreasing $11.9 million or 2.5% during the third quarter of 2026 and increasing $28.6 million or 6.6% from one year prior. The increase from September 30, 2025 was primarily due to the purchase of AFS securities late in the second quarter of 2026, enabling the Company to generate incremental earnings while preserving the flexibility to use core deposits to fund future loan growth, even as the held-to maturity (“HTM”) portfolio experienced runoff from maturities, calls, and paydowns.

With respect to liabilities, deposits totaled $1.16 billion on September 30, 2026, decreasing $15.8 million or 1.3% during the third quarter of 2026 and $66.6 million or 5.4% from one year prior, as the Bank utilizes deliberate pricing and account management to facilitate intentional runoff of higher-cost brokered deposits and non-relationship time deposits. The decrease from the prior three and twelve months was primarily due to reductions in brokered and time deposits, which were partially offset by growth in MMDA balances. The decrease also reflected municipal deposit seasonality.

Core deposits totaled $957.1 million, or 82.62% of total deposits, on September 30, 2026, decreasing $4.5 million or 0.5% during the third quarter of 2026 and $3.0 million or 0.3% from one year prior.

Borrowings were utilized in the third quarter of 2026 to fund purchases of AFS securities at rates below those of wholesale funding alternatives, including brokered deposits. As a result, borrowings grew to $155.5 million on September 30, 2026, increasing $22.2 million during the third quarter of 2026 and $98.9 million from one year prior.

Shareholders’ equity totaled $118.8 million on September 30, 2026, decreasing $7.0 million or 5.6% during the third quarter of 2026 and $7.6 million or 6.0% from one year prior. The decrease from June 30, 2026 primarily reflected an $8.7 million increase in accumulated other comprehensive loss (“AOCL”), driven by the decline in fair value of AFS mortgage-backed securities in a rising interest rate environment, which was partially offset by favorable interest rate hedging activity, as well as a $1.4 million increase in retained earnings and a $277,000 increase in additional paid in capital.

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.

The Company believes it is sufficiently collateralized and reserved, with an ACL of $22.7 million on September 30, 2026, compared to $26.9 million on June 30, 2026, and $18.7 million on September 30, 2025. During the third quarter of 2026, the Company charged off $3.7 million in commercial loans with unique risk characteristics (“LURCs”) that had been identified through last year’s comprehensive commercial portfolio review. The charge-off was fully covered by previously established ACL reserves. As a percentage of total loans, the ACL represented 2.60% on September 30, 2026, 3.03% on June 30, 2026, and 2.08% on September 30, 2025.

The ACL continues to reflect the $11.4 million risk-based reserve build recorded at the end of 2025, following a forward-looking assessment of LURCs identified through a comprehensive review of approximately 90% of the Bank’s commercial portfolio. Specific reserves, including those established in conjunction with 2025’s comprehensive commercial portfolio review, represented 57.4% of the Company’s ACL at the end of the third quarter of 2026.

Individually analyzed loans (“IALs”) including LURCs totaled $73.5 million on September 30, 2026, improving from $78.6 million on June 30, 2026. At the end of the third quarter of 2026, LURCs consisted of 70% commercial real estate (“CRE”) loans, which had a weighted average loan-to-value (“LTV”) ratio of 66%⁽³⁾.

Nonperforming loan (“NPL”) levels may fluctuate near term as IALs progress through resolution activities. NPLs were $30.3 million, or 3.47% of total loans, on September 30, 2026, compared to $35.7 million, or 4.02% of total loans on June 30, 2026, and $23.3 million or 2.59% of total loans on September 30, 2025.

The Company recorded third quarter 2026 NCOs of $4.3 million, or an annualized 1.96% of average loans, primarily related to previously identified commercial IALs and charged against reserves established in prior periods, with gross charge-offs partially offset by $197,000 in recoveries.

Provision for credit loss expense was $231,000 in the third quarter of 2026, attributed primarily to quantitative and qualitative factor adjustments to the ACL. A credit loss provision benefit of $155,000 was recorded in the second quarter of 2026 and the provision for credit loss expense was $3.5 million in the third quarter of 2025.

_{⁽³⁾ Weighted average LTV is the loan principal balance as a percentage of book balance for commercial real estate (CRE) individually analyzed loans, excluding two loans with LTVs >100% based on collateral that is expected to be sold to new owners or sponsors intending to reposition these transitional or value-add properties. Collateral values are determined using most-recent appraisals, purchase offers, auction bids, broker opinions, and business financials.}

Liquidity
The Company has diligently ensured a strong liquidity profile as of September 30, 2026 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 $1.16 billion on September 30, 2026, compared to $1.17 billion on June 30, 2026, and $1.23 billion on September 30, 2025. Core deposits, as a percentage of total deposits, represented 82.62% on September 30, 2026, compared to 81.89% on June 30, 2026, and 78.37% on September 30, 2025. 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 September 30, 2026, the Bank had an available additional funding capacity of $90.6 million with the Federal Home Loan Bank of New York and $31.2 million with the Federal Reserve Bank, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $15.0 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 September 28, 2026, 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.

Shareholders registered by October 16, 2026 will be eligible for the dividend, which is scheduled for disbursement on November 6, 2026. 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 September 30, 2026 stood at $16.88 per share. This positions the annualized dividend yield at 2.37%.

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 concern the financial condition, results of operations, plans, objectives, future performance and business of the Company and its subsidiaries, including, but not limited to, the Bank, and include statements regarding future credit costs and asset quality; the resolution of previously identified commercial credits; the adequacy of the allowance for credit losses; loan growth and anticipated commercial loan originations; deposit levels, deposit mix and deposit pricing; funding costs and access to funding; and the potential effects of economic conditions, interest rates and regional economic development on the Company’s business.

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, competitive and regulatory 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 expressed or implied by the forward-looking statements as a result of numerous factors. Although it is not possible to identify all factors that may cause actual results to differ, such factors 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 prevailing interest rates; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; the risk that actual credit losses, borrower performance, collateral values, or loan migration patterns differ from management’s forward-looking estimates or assumptions; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels or changes in deposit mix that may necessitate increased borrowing to fund loans and investments; access to wholesale or other funding sources; operational risks including, cybersecurity, fraud, model risk and natural disasters; credit risk management; volatility or adverse trends in the securities markets that could affect the value of the Company’s investment portfolio or broader financial conditions; and the risk that the Company may not be successful in the implementation of its business strategy.

Additional factors that could cause actual results to differ materially are described in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov.  While the Company believes it has identified and discussed the material risks affecting its business, there may be additional risks and uncertainties not currently known or considered immaterial that could affect the forward-looking statements made herein.

Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of future results. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable law.

Notes on Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures, including, but not limited to the efficiency ratio, pre-tax, pre-provision net income, tangible common equity, tangible book value per share, and return on average tangible common equity. For purposes of SEC 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 generally accepted accounting principles in the United States (“GAAP”), or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable GAAP measure.

The Company believes these non-GAAP financial measures provide useful information to investors by assisting in the evaluation of the Company’s operating performance, operating efficiency, financial condition, and trends, and by facilitating comparisons with prior periods and with peer institutions. In particular, management uses these measures to assess expense control relative to revenue generation, underlying profitability excluding certain non-recurring or non-operational items, and capital strength on a basis that it believes is meaningful for internal planning and external analysis.

These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and should be considered only in conjunction with the Company’s GAAP financial results.

Pursuant to the requirements of SEC Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures within this release.  

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

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

_{¹ 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.}

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

_{¹ Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
² Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital.
³ Basic and diluted earnings per share are calculated based upon the two-class method.}

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

_{¹ Nonbrokered deposits excluding certificates of deposit of $250,000 or more.}

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

_{The above information is unaudited and preliminary based on the Company’s data available at the time of presentation.}

_{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, fair value adjustment to loans held-for-sale, and sales of assets.
⁴ Pre-tax, pre-provision net income equals revenue less total noninterest 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.}

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Pathfinder Bancorp, Inc.