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Step One Creative Peewees Split Pair in Recent Action

OSWEGO, NY – The Step One Creative Peewee Red Hockey Team of the Oswego Minor Hockey Association split a pair of games on home ice in recent action.

Step One Creative Peewee Keith Vivlamore chases down the puck in recent action against the visiting Auburn Red. Vivlamore had the lone goal in the 4-1 loss at home. Oswego’s Aidan Taylor is shown pictured in the background.

Step One Creative Peewee Keith Vivlamore chases down the puck in recent action against the visiting Auburn Red. Vivlamore had the lone goal in the 4-1 loss at home. Oswego’s Aidan Taylor is shown pictured in the background.

Step One Creative lost 4-1 against Auburn, and then captured a 2-0 win in a Snowbelt League game against Ithaca 2.

Step One Creative is now 6-1 overall and 3-0 in the Snowbelt Red Division.

Auburn 4 Step One Creative 1
In this non-league matchup at Cullinan Ice Rink in Oswego, Auburn defeated Step One Creative 4-1.

The Bucs jumped out to an early 1-0 lead, when Keith Vivlamore scored off a feed from Bryson Bush and Spencer Stepien. Auburn would answer the scoring, however, with two goals that followed in the first period, and then two more tallies later in the game to pick up the road win.

Despite the loss, Oswego outshot Auburn 28-20.

Step One Creative goalie Hunter Lawton had 16 saves in the game.

“This game really could have gone either way,” said Step One Creative Head Coach Frank Brosch. “Auburn took full advantage of their opportunities, whereas we could not capitalize on our 28 shots on net.”

“The kids played hard but just didn’t get the breaks we needed against a strong team,” he added.

Step One Creative Peewees 2 Ithaca 0


In their second game of the day, Step One Creative took on the visiting Ithaca 2 team at Crisafulli Rink, and won 2-0 in the Snowbelt League matchup.

Both teams had entered the game undefeated in the league play, and without giving up a goal against their league rivals.

After a scoreless first period, the Bucs found the net against the Ithaca net minder, when Aidan Taylor scored off an assist from Marcus Baker.

Oswego added another goal with just a few seconds left in the second period to close out the scoring 2-0, when Lukas Cady picked up the score off a Bryson Bush assist.

Lawton had 16 saves in the win.

Oswego had 48 shots on net in the game, to Ithaca’s 18.

“The kids started off a little slow in the first period, but played well the remainder of the game to get the win,” said Step One Creative Assistant Coach Andy DiBlasi. “Our team continues to work hard, and they showed relentless pressure on the Ithaca goalie throughout the matchup, and benefited with two goals in the second period.”

The Bucs travel to Ithaca and Clinton this weekend for Snowbelt League games.

The Step One Creative Peewee coaching staff includes: Head Coach Frank Brosch, and Assistants Andy DiBlasi, Pete Cullinan, and Phil Cady.

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Former OMHA Board Members Invited To 50th Anniversary Welcome Back Event

OSWEGO, NY – The Oswego Minor Hockey Association will hold a 50th Anniversary “Welcome Back” event for former OMHA board members, according to OMHA president Dan Bartlett.

The reunion for OMHA board members is scheduled for December 14 at the Oswego Hibernians, on Munn Street, in Oswego. A cocktail hour will start at 5 p.m. and food will be served at 6 p.m.

Former board members who attend the event will also receive a 50th Anniversary commemorative gift.

Individuals interested in attending should RSVP to Bartlett by December 6 at (315) 529-1437 or by email at Dan.Bartlett@oswegohockey.com

“We are excited to continue our year-long 50th anniversary celebration by recognizing our past OMHA board members,” said Bartlett. “The foundation of our hockey program’s success today, was a result of the hard work and efforts of so many board members in the past. The welcome back event will be a great opportunity to celebrate the accomplishments and growth of our organization over the past 50 years, and for us to show our appreciation for everyone’s longstanding commitment to Oswego hockey.”

For more information regarding the Oswego Minor Hockey Association, please visit www.oswegohockey.com

Step One Creative Peewees Sweep Recent Games

Oswego, NY – The Step One Creative Peewee Red Hockey Team of the Oswego Minor Hockey Association swept all of its games recently against Syracuse Blazers, Camillus 1 and Skaneateles Red.

In a three-game home stand, the Bucs won 5-4 over the Blazers, and then defeated Camillus 5-1, and Skaneateles 6-0 the following day.

Step One Creative Peewee Goalie Hunter Lawton defends the net in action against Camillus 1. Lawton recorded a shutout and had 59 saves combined in the team’s three wins over the Syracuse Blazers, Camillus 1 and Skaneateles Red.

Step One Creative Peewee Goalie Hunter Lawton defends the net in action against Camillus 1. Lawton recorded a shutout and had 59 saves combined in the team’s three wins over the Syracuse Blazers, Camillus 1 and Skaneateles Red.

The team improved to a record of 5-0 on the season, and 2-0 in its  Snowbelt League Red Division.

Step One Creative Peewees 5 Syracuse Blazers 4

In a great non-league matchup with the Syracuse Blazers, the Bucs used a strong offensive attack led by Marcus Baker’s three-goal hat trick, and solid defense and goaltending to capture the 5-4 win at home. Oswego took a 2-0 lead early in the first when Keith Vivlamore found the net off a feed from Patrick Galvin, and then Baker tallied an unassisted goal.

After a late first period goal by the Blazers, and an early marker in the second to make it 2-2, the Step One Peewees scored again when Baker notched his second netter of the game, off a pass from Lukas Cady.

Both teams would score 2 more goals each within minutes of each other in the third period, including the game winner for Step One Creative at the 7:56 mark, when Baker got his hat trick goal, off a Noah Delaney assist.

The strong play of Spencer Stepien on offense, and the defensive efforts of Tommy Back, Bryson Bush, Cole Cullinan, Joe DiBlasi, and Tyler May helped secure the win.

Lawton captured the victory in net recording 18 saves.

“This was a great hockey game and a great matchup early in the season for our team,” said Step One Creative Head Coach Frank Brosch. “The players worked hard throughout and we were very happy to get this win against the Blazers.”

Step One Creative Peewees 5 Camillus 1
Step One Creative’s strong offense was too much for Camillus 1 in their non-league contest at Cullinan Ice Rink.

The Bucs jumped out early scoring four goals in the first, and one in the second to take a commanding 5-0 lead, before a late goal was scored for Camillus. Step One’s Stepien, Baker, DiBlasi, Vivlamore, and Galvin all registered scores. Stepien added two assists and Delaney and Back each picked up one.

Lawton had 18 saves in the win.

“We just jumped on Camillus early in first period, and it was tough for them to get anything going after that,” said Brosch. “We pressured their zone the entire game, and made plays when we had to.”

Step One Creative Peewees 6 Skaneateles 0

In their second game of the day, Step One once again jumped on their opponent early, scoring their first goal just seconds into the game, when Stepien found Baker in front of the Skaneateles net.

The strong offensive effort would continue in this Snowbelt League matchup, when Bush, Galvin, Vivlamore and Cady (2) each added to the scoring. Diblasi, Delaney and Galvin added the assists.

Lawton captured his second shutout of the season, playing strong and stopping 23 shots in the game.

“It was a great weekend of hockey for our team,” said Brosch. “Our kids really play well together and just continue to be relentless in either zone.”

The Step One Creative Peewee coaching staff includes: Head Coach Frank Brosch, and Assistants Andy DiBlasi, Pete Cullinan, and Phil Cady.

‘Prisoner of the Truck’, ‘Yes Pa’ Author and WW II Veteran Visits Volney Elementary School

VOLNEY, NY – Fred Sarkis was 12 years old and working 15-hour days on his family’s fruit and vegetable truck, when he learned three important life lessons from his immigrant father.

Fred Sarkis shares a laugh with Volney Elementary student Angel Ortiz.

Fred Sarkis shares a laugh with Volney Elementary student Angel Ortiz.

The lessons of enthusiasm, education, and integrity or “The Golden Rule,” each stemmed from his personal, daily experiences he shared with his father.

It was the 1930s, and America was feeling the crippling effects of the most significant economic challenge of its history, the Great Depression, while even more uncertainty loomed, with the realities of the Second World War.

Sarkis, a Rochester, NY, native, who is now 88, is the founder of the Yes Pa Foundation; author of Prisoner of the Truck and Yes Pa; and a World War II Navy Veteran. He is also the motivational speaker for the foundation’s instructional program, which he shared recently with students in Bill Cahill’s sixth grade classroom at Volney Elementary School.

Fred Sarkis and Volney Elementary School student Destiny Miller

Fred Sarkis and Volney Elementary School student Destiny Miller

It was Sarkis’ eighth annual visit to Volney Elementary and he once again provided the lessons learned from his own personal adversities and the harsh disciplines of growing up as kid during the Depression Era.

According to Sarkis, his Lebanese-born father, an uneducated “huckster,” wanted more for his eldest son, and offered three important teachings that would shape him, and his life journey.

A self-proclaimed “prisoner” of his father’s fruit and vegetable truck, Sarkis would use the time working on the truck, as a study center, educating himself by the light of his lantern.

The lantern has now become iconic within the Yes Pa Foundation, and Sarkis’ learned lessons are now shared at more than 500 schools throughout the country, as well as in numerous prisons, and other educational settings.

Volney Elementary’s Cahill, along with fellow team teachers, Daniel Bartlett, and Stephanie Zimmerman, have worked with Sarkis for years, introducing his Yes Pa program to their students, while building a curriculum around Sarkis’ lessons.

“The enthusiasm that stems from the Yes Pa curriculum and Fred’s visit is incredible,” said Cahill. “We always welcome the opportunity have Fred work with our students, and have him teach them the importance of establishing goals, character traits, personal accountability, and other keys towards happiness and success.”

Fred1

Fred Sarkis

The smiles are contagious from both Fred and the students as a result, he added.

Sarkis tells the story of how his own lack of enthusiasm selling strawberries at aged 12, led to a confrontation with father and in turn led to the three powerful five-minute lessons.

“My father would have my eight-year-old brother and I go door-to-door selling strawberries out of the back of the truck,” Sarkis explained. “I began every sales pitch with the words ‘You probably don’t want to buy any strawberries, do you ma’am?’ which resulted in very few sales compared to my younger brother.”

According to Sarkis his father’s advice on taking a smarter, more positive and enthusiastic approach to the sale, was something he embraced.

“My father’s approach was, “These strawberries were picked early this morning on a farm in Webster. See how fresh they are. They are only 10 cents a quart or three quarts for a quarter. Do you want one or three, ma’am?”

According to Sarkis, it was this simple change in approach that shaped his success going forward.

At age 16, Fred graduated from a business school, first in a class of 70. At age 17, earning five times minimum wage, he bought his mother of eight children a home on Park Avenue in Rochester. At age 18, during World War II, he enlisted in the Navy. After discharge, at age 20, he worked full-time while attending the University of Rochester at night focusing on business courses.

He started a coffee vending business at age 24, and with his brother Joe’s help, expanded it into a full line of vending machines and an automatic cafeteria. He later expanded into the management of employee cafeterias for major corporations including Xerox and Eastman Kodak.

At 34, he became a multi-millionaire and invested in numerous high-risk investments – including a major ski area and a lakeside village in his hometown of Canandaigua, which today, although he is no longer involved, employ hundreds of people and provide recreational service to thousands.

It was 15 years ago that Sarkis founded the Prisoner of the Truck Foundation, now called the Yes Pa Foundation.

Since then, through the assistance of volunteer regional and national educators, more than 500 schools throughout the United States (including Volney Elementary) have downloaded this character education program that uniquely connects the parent, or mentor, with the teacher and the child.

“Growing up I was small, knock-kneed, pigeon-toed, dark-skinned, and a prisoner of my father’s truck,” said Sarkis. “Feeling bullied, I lacked confidence, self-esteem and many character traits that kids struggle with today. It has been my personal and foundation’s mission to help and serve others to overcome their own inhibitions or obstacles, offer advise on how to embrace failure, admit mistakes, learn from it, and move on to reach their full potential, strive for greatness, and achieve a lifetime of goals.”

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Step One Creative Peewees Open Season with Two Wins

Oswego, NY – The Step One Creative Peewee Red Hockey Team, of the Oswego Minor Hockey Association, opened their season at Meachem Rink in Syracuse, against the Onondaga White and Valley White teams.

Patrick Galvin breaks out against Valley in recent Snowbelt League action. The Step One Creative Peewee Red team defeated Onondaga White 4-1 and the Valley White team 3-0 to open their season. Galvin tallied five assists in the two games.

Patrick Galvin breaks out against Valley in recent Snowbelt League action. The Step One Creative Peewee Red team defeated Onondaga White 4-1 and the Valley White team 3-0 to open their season. Galvin tallied five assists in the two games.

The Bucs defeated Onondaga 4-1 in a non-league game, and then shutout Valley 3-0 the following day to open up their Snowbelt League schedule.

In the game against Onondaga, the Step One Creative Peewees jumped out to a 1-0 lead at the 7:36 mark of the first period, when Patrick Galvin set up Keith Vivlamore.

Step One Peewee forwards Lucas Cady and Marcus Baker then each assisted on one another’s goals in the second period and early in third, to put the Bucs up 3-0.

Vivlamore would add his second tally of the game at 7:32 of the third, off an assist from Galvin, before the Thunder’s Keegan Barry scored late in the third to finish out the scoring.

The Bucs pressured the Onondaga zone throughout the game, registering 37 shots on goal. Step One Creative goalie Hunter Lawton captured the win with 11 saves.

In the second game of the weekend, the Bucs visited Valley White in their Snowbelt League opener, and captured a 3-0 victory.

After a scoreless first period, the Step One Peewees began to pressure the Valley zone, and quickly found some scoring opportunities.

Vivlamore once again got the scoring started for the Bucs, this time early in the second period, off assists from Cole Cullinan and Galvin. The Bucs would add two more goals just minutes later in the period, when Baker and Vivlamore notched tallies, off assists from Galvin, Cullinan and Bryson Bush.

Once again, it was a relentless offensive attack that led the Bucs, outshooting the Valley team 25-6.

Lawton had 6 saves for Step One in the win.

“The team really worked well together in these season opening wins,” said Oswego Head Coach Frank Brosch. “They really came out and played some strong hockey, and were awarded because of their play on both ends of the ice.”

The Step One Creative Peewee coaching staff includes: Head Coach Frank Brosch, and Assistants Andy DiBlasi, Pete Cullinan, and Phil Cady.

Pathfinder Bancorp Announces Closing of Reorganization, Stock Offering

Oswego, NY – Pathfinder Bancorp, Inc. (Nasdaq Capital: PBHC), announced today (Oct. 16) that it has completed the conversion and reorganization pursuant to which Pathfinder Bancorp, MHC has converted to the stock holding company form of organization. Pathfinder Bancorp, Inc., a Maryland corporation (“New Pathfinder”) and the new stock holding company for Pathfinder Bank, has sold 2,636,053 shares of common stock at $10 per share, for gross offering proceeds of $26.4 million in its stock offering.

Concurrent with the completion of the offering, shares of common stock of Pathfinder Bancorp, Inc., a Federal corporation (“Pathfinder-Federal”) owned by the public have been exchanged for shares of New Pathfinder’s common stock so that Pathfinder-Federal’s existing shareholders now own approximately the same percentage of New Pathfinder’s common stock as they owned of Pathfinder-Federal’s common stock immediately prior to the conversion, subject to adjustment as disclosed in the prospectus.

Shareholders of Pathfinder-Federal will receive 1.6472 shares of New Pathfinder’s common stock for each share of Pathfinder-Federal’s common stock they owned immediately prior to completion of the transaction.

Cash in lieu of fractional shares will be paid based on the offering price of $10 per share. As a result of the offering and the exchange of shares, New Pathfinder has 4,352,306 shares outstanding, subject to adjustment for fractional shares.

The shares of common stock sold in the offering and issued in the exchange are expected to begin trading on the Nasdaq Capital Market on October 17, 2014, under the trading symbol “PBHC.”

Direct Registration Statements reflecting the shares purchased in the subscription offering are expected to be mailed to subscribers on or about October 17, 2014.

Shareholders of Pathfinder-Federal holding shares in street name will automatically receive shares of New Pathfinder common stock and cash in lieu of fractional shares within their accounts. Shareholders of Pathfinder-Federal holding shares in certificated form will be mailed a letter of transmittal on or about October 17, 2014.

After submitting their stock certificates and a properly completed letter of transmittal to New Pathfinder’s transfer agent, shareholders will receive Direct Registration Statements reflecting their shares of New Pathfinder common stock and will receive cash in lieu of fractional shares.

Subscribers can confirm their stock allocations by contacting the Stock Information Center at (877) 643-8198. The Stock Information Center is open Monday through Friday from 10 a.m. until 4 p.m. Eastern Time.   Alternatively, subscribers may confirm allocations online, at https://allocations.kbw.com

Keefe, Bruyette & Woods, Inc. served as financial advisor to Pathfinder-Federal and New Pathfinder in connection with the transaction. Luse Gorman Pomerenk & Schick, P.C. served as legal counsel to Pathfinder-Federal and New Pathfinder. Goodwin Procter LLP served as legal counsel to KBW.

About Pathfinder Bancorp, Inc.

Pathfinder Bancorp, Inc. is the holding company of Pathfinder Bank, a New York chartered savings bank headquartered in Oswego, New York.  The bank has eight full service offices located in its market area consisting of Oswego County and northern Onondaga County and a business banking office located in downtown Syracuse, which opened for business on September 9, 2014.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein.

These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, and market disruptions.

Pathfinder Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

Pathfinder Bancorp, Inc. Announces Third Quarter and Year to Date Earnings

Oswego, New York, October 15, 2014 – Pathfinder Bancorp, Inc. (“Company”), the mid-tier holding company of Pathfinder Bank (“Bank”), (NASDAQ: PBHC) announced its results for the three and nine month periods ended September 30, 2014.

Highlights for the three and nine month periods ended September 30, 2014

  • Net income for the third quarter of 2014 was $746,000 as compared to $528,000 for the comparable prior year period. The increase in net income of $218,000 was primarily the result of the increase in net interest income due to the increase of average interest-earning asset balances and the decrease in the average cost of interest-bearing liabilities between the third quarter of 2014 and the third quarter of 2013, offset by a $194,000 increase in the provision for loan losses. Net income for the nine month period ended September 30, 2014 was unchanged at $1.9 million as compared to the same period in 2013.
  • Basic and diluted earnings per share were $0.28 for the third quarter of 2014, as compared to basic and diluted earnings per share of $0.21 and $0.20, respectively, for the third quarter of 2013. The increase in basic and diluted earnings per share between these two periods was due principally to the increase in net income available to common shareholders. Basic and diluted earnings per share for the nine month period ended September 30, 2014 were $0.73 and $0.72, respectively, as compared to basic and diluted earnings per share of $0.74 and $0.73, respectively, for the nine month period ended September 30, 2013.
  • Return on average assets was 0.52% for the three month period ended September 30, 2014 compared to 0.43% for the corresponding period in 2013. The increase was due principally to the increase in net income for the three months ended September 30, 2014 as compared to the prior year period. Return on average assets was 0.47% for the nine month period in 2014 as compared to 0.50% for the comparable prior year period. This decrease was principally due to the increase in average assets for the nine month period ended September 30, 2014 as compared to the prior year period.
  • Return on average equity was 6.29% for the three month period ended September 30, 2014, compared to 5.25% for the same period in 2013. This increase was due principally to an increase in net income for the three months ended September 30, 2014 as compared to the three months ended September 30, 2013. For the nine month period ended September 30, 2014, return on average equity was 5.55%, compared to 6.04% for the same period in 2013. This decrease was due principally to an increase in average equity for the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013.
  • Total loans were $374.3 million at September 30, 2014, compared to total loans of $341.6 million at December 31, 2013, representing an increase of 9.6%. This growth of $32.7 million in loans resulted largely from an increase in the commercial real estate loan portfolio and, to a lesser extent, the commercial and industrial loan portfolio.
  • Total deposits were $483.0 million at September 30, 2014, compared to total deposits of $410.1 million at December 31, 2013. The increase of $72.9 million, or 17.8% in deposits, was primarily due to a $37.6 million increase in retail demand deposits as a result of subscription orders received for our second-step conversion targeted to close on October 16, 2014. The remaining increase was due to an additional $24.2 million in municipal deposits and $13.1 million in business deposits.

“Earnings have demonstrated positive trends primarily driven by organic loan growth and a stable to slightly increasing net interest margin,” according to Tom Schneider, President and CEO. “Loan growth of 9.6% over the first nine months of 2014 is primarily the result of strong market acceptance of our community bank model in our expanding footprint within Central New York. Loans continue to be principally funded by local deposits. The recently released FDIC market share data shows our leading position in Oswego County increased to 33.5%, while our share of market in Onondaga County has increased by 24.0%,” Schneider continued.

“Higher provision for loan losses, enhanced charge-off policies, and an increase in non-performing loans both mitigated some of the earnings growth and reflect stronger risk management practices required of a growing commercial loan portfolio,” Schneider added.

“On September 9th, we opened our Business Banking Office in downtown Syracuse located at 109 W. Fayette Street in the historic Pike Block building. This office will allow us to better serve our growing customer base in the greater Syracuse market,” Schneider said.

“On October 16th, we will close our stock offering and Plan of Conversion,” stated Schneider. “We are extremely pleased with the positive market and depositor response to our offering as we were oversubscribed by eligible account holders of the bank at record date of March 31, 2013, our first tier of subscription. We plan to use this increased capital to support our continued organic growth in Central New York.”

Income Statement

For the three months ended September 30, 2014, net interest income, on a tax-equivalent basis, increased $491,000, or 12.2% to $4.5 million from $4.0 million for the three months ended September 30, 2013. The increase in net interest income was due principally to the $368,000 increase in interest income caused by the increase in average balances of commercial real estate loans and increases in both average balances and yields on commercial loans and taxable investment securities, offset in part by a decrease in the average yield of commercial real estate loans. Additionally, interest expense decreased $123,000 between the year over year third quarter periods as the average cost of time deposits decreased due principally to the decrease in rates paid of 43 basis points on this interest-bearing liability product. The decrease in average rates paid on time deposits was the result of maturing certificates of deposits reinvested in shorter duration certificate of deposit as consumers opted to improve their liquidity given the current uncertain low rate environment. As a result, our interest spread for the three months ended September 30, 2014 increased to 3.46% from 3.34% during the three months ended September 30, 2013.

For the nine months ended September 30, 2014, net interest income, on a tax-equivalent basis, increased $888,000, or 7.4% to $12.9 million from $12.0 million for the comparable prior year period due primarily to the decrease in average rates paid on time deposits and Federal Home Loan Bank of New York borrowings between the year over year nine month periods. Significant reductions were recorded in average rates paid on time deposits and borrowings of 32 basis points and 52 basis points, respectively, between these same two periods. As a result, our interest rate spread for the nine months ended September 30, 2014 increased to 3.40% from 3.30% for the nine months ended September 30, 2013.

Noninterest income for the three months ended September 30, 2014 increased to $900,000 from $704,000 for the three months ended September 30, 2013. This increase of $196,000 between these two periods was due primarily to an increase of $170,000 in other charges, commissions and fees, the majority of which were from the commissions earned from Pathfinder Risk Management Company, Inc., which owns a 51% membership interest in FitzGibbons Agency, LLC (“Insurance Agency”) which we acquired in the fourth quarter of 2013. Accounting guidance requires the Company to consolidate 100% of the Insurance Agency within the consolidated financial statements. The 49% of which the Company does not own is accounted for separately as a noncontrolling interest within the consolidated financial statements. Additionally, loan servicing fees increased $51,000 due to the recognition of income from guarantee fees of the Federal National Mortgage Association (“FNMA”).

Noninterest income for the nine months ended September 30, 2014 increased $119,000, or 4.8%, to $2.6 million as compared to $2.5 million for the same prior year period. This increase was driven by the increase in commissions of $480,000 during the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013. The commissions of the Insurance Agency were responsible for $430,000 of this increase. Additionally, loan servicing fees increased $90,000 and service charges on deposit accounts increased $38,000, during the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013. Loan servicing fees increased due to the previously mentioned FNMA guarantee fees. Service charges on deposit accounts increased primarily due to the increase in deposit accounts. These increases in noninterest income were offset by a $448,000 decrease in net gains on sales of loans and foreclosed real estate. During the nine months ended September 30, 2013, we recorded $395,000 in net gains from the sale of residential loans as a means of mitigating interest rate risk. Additionally, we recorded a decrease of $87,000 in net gains on sales and redemptions of investment securities between the nine months ended September 30, 2014 and the nine months ended September 30, 2013. A limited investment portfolio restructuring resulted in modest gains being recognized during the nine months ended September 30, 2013 that was not repeated during the first three quarters of 2014.

Total noninterest expense for the three months ended September 30, 2014 increased $145,000, or 4.0%, to $3.8 million from $3.7 million for the three months ended September 30, 2013. The increase in noninterest expense was due principally to increases in personnel expenses of $108,000 and building occupancy expenses of $39,000. Personnel expenses increased due in part to wage increases, increased deferred compensation expenses of $67,000, and the inclusion of $81,000 in personnel expenses of the Insurance Agency. Offsetting the other components within personnel expenses was a $97,000 improvement in the pension benefit which offset other increases in employee benefits such as payroll taxes and 401(k) contributions.

Total noninterest expense for the nine months ended September 30, 2014 increased $710,000, or 6.6%, to $11.5 million from $10.8 million for the same prior year period due largely to the $642,000 increase in personnel expenses and $84,000 in building occupancy expenses. The increase in personnel expenses reflected wage increases, $197,000 related to increased deferred compensation costs, and $111,000 related to commissions and accrued expenses for corporate incentive. Additionally, $234,000 of the increase in personnel expenses related to those of the Insurance Agency, which was not acquired until the fourth quarter of 2013. Offsetting the other components within personnel expenses was a $293,000 improvement in the pension benefit which was able to offset other increases in employee benefits such as payroll taxes and 401(k) contributions. Partially offsetting the increase in the above expenses was a reduction in other operating expenses of $70,000 due principally to the $65,000 write-off of a repossessed asset which occurred in the second quarter of 2013.

We recorded $410,000 in provision for loan losses for the three month period ended September 30, 2014, as compared to $216,000 for the three month period ended September 30, 2013. One large commercial relationship with two loan facilities was charged off in the amount of $336,000 in the third quarter of 2014, with a specific reserve allocated through the provision for loan losses in prior periods of $243,000. The $177,000 decrease in specific reserves between June 30, 2014 and September 30, 2014 was largely due to the charge-offs associated with this commercial relationship. The increase in the provision for loan losses was a direct result of the $406,000 in net charge-offs in the third quarter of 2014 and the $15.5 million growth in gross loans between the second quarter and the third quarter of 2014. Management deems the amount of the provision recorded during the third quarter of 2014 to be adequate in support of the current level of allowance for loan losses.

We recorded a $930,000 provision for loan losses through the first nine months of 2014 as compared to $816,000 for the same prior year period. Net charge-offs for the nine months ended September 30, 2014 were $801,000 as compared to $232,000 for the prior year period, an increase of $569,000. The year over year increase in net charge-offs was due to certain first quarter 2014 non-recurring portfolio charge-offs recorded in order to conform more closely to FDIC guidance and the previously mentioned $336,000 charge-off recorded in the third quarter of 2014. Management deems the amount of the provision recorded during the first nine months of 2014 to be adequate in support of the current level of allowance for loan losses.

Balance Sheet as of September 30, 2014

Total assets increased to $66.2 million, or 13.1%, to $570.0 million at September 30, 2014 as compared to $503.8 million at December 31, 2013. This increase was due primarily to an increase in investment securities, loans, bank owned life insurance, and total cash and cash equivalents.

Investment securities increased to $136.6 million at September 30, 2014 from $115.4 million at December 31, 2013 due principally to the need to collateralize the increase in municipal deposits between these same two time periods. Of the total increase of $21.2 million in investment securities, 62.0% was classified within the available-for-sale portfolio, centered largely in residential mortgage backed securities. The remaining increase was recorded in the held-to-maturity investment securities portfolio. When new investment securities are acquired, management reviews certain security characteristics  and determines the company’s intent and ability to hold the security to maturity.  Based on the security characteristics and management’s intentions, the security is classified as either available-for-sale or held-to-maturity.

Total loans receivable increased $32.7 million, or 9.6%, to $374.3 million at September 30, 2014 from $341.6 million at December 31, 2013 primarily due to a $23.9 million, or 25.0%, increase in commercial real estate loans. This increase was a direct result of our growth in the greater Syracuse marketplace. Additionally, commercial and industrial loans and lines of credit increased $6.4 million or 13.7%. Residential mortgage loans increased $4.0 million, or 2.4%, between December 31, 2013 and September 30, 2014. During the third quarter of 2014, the Company has achieved modest residential loan portfolio growth as we gained market share in the greater Syracuse marketplace. As a result of our effort to diversify our loan portfolio with an increased emphasis on our commercial loan and commercial real estate products, the percent of our portfolio from these loan products grew from 43.3% to 47.0% between December 31, 2013 and September 30, 2014.

Bank owned life insurance increased $2.0 million during the first nine months of 2014 to $10.2 million at September 30, 2014 due principally to additional purchases of single premium life insurance policies on selected participants. These purchases will provide income that will assist in the funding of optional deferred compensation and supplemental executive retirement plans.

The increase in total assets was largely funded by increases in deposits within our market area, totaling $72.9 million, or 17.8%, to $483.0 million at September 30, 2014 from $410.1 million at December 31, 2013. The increase was due largely to a $37.6 million increase in retail demand deposits as a result of subscription orders received from our second-step conversion expected to close on October 16, 2014. Additionally, municipal deposit accounts increased $24.2 million and business deposit accounts increased $13.1 million between these two time periods as a direct result of the Company’s strategy to gather deposits across all markets.

The Company’s shareholders’ equity increased $2.3 million, or 5.4%, to $45.0 million at September 30, 2014 from $42.7 million at December 31, 2013. This increase was principally due to a $1.6 million increase in retained earnings, resulting from $1.9 million in net income through the nine months ended September 30, 2014 offset by dividends declared on our common stock totaling $229,000, preferred stock dividends declared of $63,000, and a reduction of $415,000 in accumulated other comprehensive loss due principally to an increase in the market value of our available-for-sale investment portfolio.

Asset Quality

Non-performing assets at September 30, 2014 were $7.9 million, or 1.38% of total assets, as compared to $6.0 million, or 1.18% of total assets, at December 31, 2013. The $1.9 million increase in non-performing assets between December 31, 2013 and September 30, 2014 was principally due to the addition of two commercial relationships. One large commercial relationship became non-performing during the second quarter of 2014 with a total present balance of $970,000, including related commercial business and personal residential loans extended to this relationship at September 30, 2014. The borrower brought all loans current within this relationship through the third quarter of 2014, but we will maintain this relationship on non-performing status while monitoring the borrower’s payment performance. Once management has concluded that payment of contractual principal and interest is no longer in doubt, the relationship may be reclassified as performing. A second commercial relationship totaling six loans, whose total aggregate balance is $1.5 million, was placed on non-performing status as of September 30, 2014. Partially offsetting these increases was a charge-off in the amount of $336,000 due to a commercial relationship totaling two loans that were previously in non-performing status. As a result, the ratio of nonperforming loans to period end loans increased from 1.57% to 1.99% between these two time periods.

The ratio of annualized net loan charge-offs to average loans increased from 0.15% for the full year 2013 to 0.30% for the first nine months of 2014. Net loan charge-offs for the first nine months of 2014 were $801,000 as compared to $232,000 for the same prior year period. A portion of the increase in net loan charge offs was a result of certain non-recurring portfolio charge-offs recorded in order to conform more closely to FDIC guidance. Additionally, $336,000 of the net charge-offs for the first nine months of 2014 was due to the previously mentioned charge-off of two loans within a commercial relationship in the third quarter. We had a $243,000 specific reserve against these two loans from a provision for loan losses recorded in prior periods. Net charge-offs during the third quarter of 2014 were $406,000 as compared to $5,000 in net recoveries in the third quarter of 2013, and due principally to the previously mentioned charge-off.

The ratio of the allowance for loan losses to period end loans decreased from 1.48% at December 31, 2013 to 1.38% at September 30, 2014 due largely to the previously mentioned charge-offs and management’s quarterly re-evaluation of the environmental factors impacting our borrowers in our markets. Management reviews trends in historical loss rates and environmental factors on a quarterly basis, in addition to assessing the specific allowance needs on impaired loans, and judges the current level of allowance for loan losses to be adequate to absorb the estimable and probable losses inherent in the loan portfolio.

About Pathfinder Bancorp, Inc.

Pathfinder Bancorp, Inc. is the mid-tier holding company of Pathfinder Bank, a New York chartered savings bank headquartered in Oswego, New York. The Bank has eight full service offices located in its market area consisting of Oswego County and northern Onondaga County and a business banking office located in downtown Syracuse that opened in the third quarter of 2014. Through its subsidiary, Pathfinder Risk Management Company, Inc., the Bank owns a 51% interest in the Fitzgibbons Agency, LLC. Financial highlights for Pathfinder Bancorp, Inc. are attached. Presently, the only business conducted by Pathfinder Bancorp, Inc. is the 100% ownership of Pathfinder Bank and Pathfinder Statutory Trust II.

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. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, as described in our SEC filings, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity. 

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Pathfinder Bancorp, Inc. Announces Results Of Stock Offering, Closing Date Of Conversion

OSWEGO, NY – Pathfinder Bancorp, Inc., a federal corporation (“Pathfinder-Federal”) (Nasdaq Capital: PBHC), announced that Pathfinder Bancorp, Inc., a Maryland corporation (“New Pathfinder”) expects to sell 2,636,053 shares of common stock (including 105,442 shares to be issued to the employee stock ownership plan) at $10 per share, for gross offering proceeds of $26.4 million in the offering.

The subscription offering was oversubscribed by eligible account holders which were the depositors of Pathfinder Bank (the “Bank”) as of March 31, 2013.

Valid stock orders from these eligible depositors will be filled in accordance with the allocation procedures described in the prospectus and set forth in Pathfinder Bancorp, MHC’s (the “MHC”) plan of conversion and reorganization.

No other priority groups will have their orders filled. Keefe, Bruyette & Woods, Inc., a Stifel Company (“KBW”) acted as selling agent in the subscription offering.

If you are a first category subscriber and would like to confirm your allocation, allocation information is available online at https://allocations.kbw.com

You may also contact the stock information center, toll-free, at (877) 643-8198 from 10 a.m. until 4 p.m., Eastern Time, Monday through Friday.

Concurrent with the completion of the offering, shares of Pathfinder-Federal’s common stock owned by the public will be exchanged for shares of New Pathfinder’s common stock so that Pathfinder-Federal’s existing shareholders will own approximately the same percentage of New Pathfinder’s common stock as they owned of Pathfinder-Federal’s common stock immediately prior to the conversion, subject to adjustment as disclosed in the prospectus.

As a result, shareholders of Pathfinder-Federal will receive 1.6472 shares of New Pathfinder’s common stock for each share of Pathfinder-Federal common stock they own immediately prior to completion of the transaction. Cash in lieu of fractional shares will be paid at a rate of $10 per share.

As a result of the offering and the exchange of shares, New Pathfinder will have 4,352,306 shares outstanding after giving effect to the transaction, subject to adjustment for fractional shares.

The transaction is scheduled to close on or about October 16, 2014, at which time the MHC and Pathfinder-Federal will cease to exist and New Pathfinder will become the fully public stock holding company of the Bank.

The shares of common stock of Pathfinder-Federal will cease being traded under the trading symbol “PBHC” on the Nasdaq Capital Market at the close of trading on or about October 16, 2014.

The shares of common stock sold in the offering and issued in the exchange of New Pathfinder are expected to begin being trading on the Nasdaq Capital Market on or about October 17, 2014. It is expected that New Pathfinder’s trading symbol will continue to be “PBHC.”

Direct Registration Statements reflecting the shares purchased in the offering are expected to be mailed to subscribers on or about October 16, 2014. Shareholders of Pathfinder-Federal holding shares in street name will receive shares of New Pathfinder common stock and cash in lieu of fractional shares within their accounts.

Shareholders of Pathfinder-Federal holding shares in certificated form will be mailed a letter of transmittal on or about October 17, 2014. After submitting their stock certificates and a properly completed letter of transmittal to Pathfinder-Federal’s transfer agent, shareholders will receive Direct Registration Statements reflecting their shares of New Pathfinder common stock and cash in lieu of fractional shares.

KBW is serving as financial advisor to Pathfinder-Federal and New Pathfinder in connection with the transaction. Luse Gorman Pomerenk & Schick, P.C. is serving as legal counsel to Pathfinder-Federal and New Pathfinder. Goodwin Procter LLP is serving as legal counsel to KBW.

About Pathfinder Bancorp, Inc.

Pathfinder-Federal is the mid-tier holding company of Pathfinder Bank, a New York chartered savings bank headquartered in Oswego, New York.  The bank has eight full service offices located in its market area consisting of Oswego County and northern Onondaga County and a business banking office located in downtown Syracuse, which opened for business on September 9, 2014.

Forward-Looking Statements

This press release contains forward-looking statements about the offering. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.”

Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include delays in consummation of the offering, delays in receiving final regulatory approvals, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which Pathfinder Bancorp, Inc. and the bank are engaged.

A registration statement relating to these securities has been filed with the United States Securities and Exchange Commission.

This press release is neither an offer to sell nor a solicitation of an offer to buy common stock. The offer will be made only by means of the written prospectus forming part of the registration statement.

The shares of common stock are not savings accounts or savings deposits, may lose value and are not insured by the Federal Deposit Insurance Corporation or any other government agency.

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