Pathfinder Bancorp | research notes

Pathfinder Bancorp: A Leading Independent Community Bank

Pathfinder Bancorp, Inc. is an independent community bank holding company headquartered in Syracuse, New York. With assets of approximately $6.3 billion, it is one of the largest independent banks in the Northeast.

History and Overview

Pathfinder Bancorp was founded in 1989 as a mutual savings bank. In 2015, it converted to a stock holding company and completed an initial public offering. The company operates through its wholly-owned subsidiary, Pathfinder Bank.

Pathfinder Bank serves individuals, businesses, and municipalities in Central and Northern New York, as well as parts of Pennsylvania and Vermont. It offers a full range of banking services, including checking and savings accounts, loans, mortgages, and wealth management.

Financial Performance

Pathfinder Bancorp has consistently delivered strong financial performance. In 2022, the company reported:

• Net income of $121.7 million
• Return on assets (ROA) of 1.24%
• Return on equity (ROE) of 10.39%

Community Involvement

Pathfinder Bancorp is deeply committed to giving back to the communities it serves. The company supports various local organizations and initiatives, including:

• Education: Scholarships, teacher grants, and funding for educational programs
• Healthcare: Donations to hospitals and health clinics
• Arts and culture: Sponsorship of cultural events and support for local artists
• Community development: Affordable housing initiatives and economic development programs

Leadership

Pathfinder Bancorp is led by an experienced management team with deep roots in the banking industry:

• President and CEO: Thomas J. Schneider
• Executive Vice President and CFO: Robert A. Bradley
• Chief Risk Officer: Michael T. Hickey
• Chief Credit Officer: David M. Gibeau

Strategic Focus

Pathfinder Bancorp's strategic priorities include:

• Expanding its branch network and digital capabilities
• Enhancing its loan portfolio
• Growing its wealth management business
• Maintaining its strong financial performance

Conclusion

Pathfinder Bancorp is a highly respected community bank that has played a vital role in the economic development of the Northeast for over three decades. With its strong financial performance, commitment to community, and experienced leadership, the company is well-positioned for continued growth and success in the years to come.

Pathfinder Bancorp Business Model

Pathfinder Bancorp is a regional bank holding company that provides a range of financial services to individuals, businesses, and municipalities in Upstate New York. Its primary business model involves:

• Net interest income: Pathfinder generates the majority of its revenue by lending money to borrowers at a higher interest rate than it pays on deposits.
• Non-interest income: Pathfinder also earns revenue from fees for services such as trust administration, mortgage servicing, and investment advisory.

Advantages to Competitors

Pathfinder Bancorp has several advantages over its competitors, including:

• Local focus: Pathfinder has a strong presence in Upstate New York, giving it a deep understanding of the local economy and customer base.
• Personalized service: Pathfinder prides itself on providing personalized service to its customers, fostering long-term relationships.
• Strong financial performance: Pathfinder has a history of consistent financial performance, with strong profitability and a conservative lending posture.
• Conservative lending practices: Pathfinder maintains a disciplined approach to lending, which has contributed to its low loan loss rates and high credit quality.
• Technology investments: Pathfinder has invested in technology to enhance customer experience and streamline operations.
• Community involvement: Pathfinder积极参与当地社区活动，建立了强大的声誉和客户忠诚度。
• Specialized services: Pathfinder offers specialized services, such as commercial real estate lending and wealth management, which differentiate it from its competitors.
• Long-tenured management team: Pathfinder has a long-tenured management team with extensive experience in the banking industry.
• Prudent risk management: Pathfinder has a comprehensive risk management framework that helps it mitigate financial risks.
• Strong capital position: Pathfinder maintains a strong capital position, providing it with financial resilience and flexibility.

Pathfinder Bancorp

Overview

Pathfinder Bancorp, Inc. is a bank holding company that provides a range of banking and financial services to commercial, retail, and municipal customers. The company operates through its subsidiaries, Pathfinder Bank and Pathfinder Mortgage Company.

Key Financial Metrics

• Assets: $1.9 billion (as of December 2021)
• Deposits: $1.6 billion
• Loans: $1.4 billion
• Net Income: $24 million (2021)
• Return on Assets (ROA): 1.25%

Outlook

Pathfinder Bancorp's outlook is generally positive. The company has a strong market position in its primary markets in upstate New York and Vermont. It also benefits from its diversified revenue base, which includes commercial lending, retail banking, and mortgage origination.

Strengths

• Strong Capitalization: Pathfinder Bancorp maintains a strong capital position, with a Tier 1 capital ratio of 11.7% as of December 2021. This provides a cushion against potential shocks.
• Experienced Management: The company's management team has decades of banking experience and a proven track record of success.
• Diversified Revenue Base: Pathfinder Bancorp's revenue is well-diversified across its various business lines, reducing its exposure to any one sector.
• Strong Customer Relationships: The company has built strong customer relationships in its local markets, which has contributed to consistent growth in deposits and loans.
• Technological Investments: Pathfinder Bancorp has made significant investments in technology to enhance its online banking services and improve its efficiency.

Challenges

• Competition: The banking industry is highly competitive, with both national and regional banks vying for customers.
• Low Interest Rates: The low interest rate environment has dampened net interest margins for banks.
• Regulatory Compliance: Banks are subject to a complex regulatory environment, which can increase costs and operational risks.
• Credit Risk: Pathfinder Bancorp faces credit risk associated with its lending activities, particularly in the event of an economic downturn.
• Technological Disruption: The rise of fintech and other disruptive technologies could challenge the traditional banking model.

Opportunities

• Market Expansion: Pathfinder Bancorp has the potential to expand its market share through acquisitions or by entering new geographic markets.
• Fee-Based Services: The company can increase its revenue by expanding its fee-based services, such as wealth management and advisory services.
• Cross-Selling: Pathfinder Bancorp can leverage its customer base to cross-sell products and services, increasing its revenue per customer.
• Small Business Lending: The company has a strong focus on small business lending, which is a growing market.
• Mortgage Origination: Pathfinder Mortgage Company is a significant contributor to the company's revenue, and there is potential for further growth in this area.

Overall

Pathfinder Bancorp is a well-positioned bank holding company with a strong outlook. The company's strengths and opportunities outweigh its challenges, providing it with a solid foundation for continued growth and profitability. Investors should monitor the company's progress in key areas such as market expansion, fee-based services, and credit risk management.

Similar Companies to Pathfinder Bancorp that Customers May Also Like:

1. KeyCorp: Key.com

• KeyCorp is a large regional bank with a strong presence in the Midwest and Northeast.
• Customers appreciate its extensive branch network, competitive interest rates, and personalized financial advice.

2. First Citizens Bank: Firstcitizens.com

• First Citizens Bank is a privately-owned bank with a focus on community banking.
• Customers value its local decision-making, community involvement, and flexible lending options.

3. Truist Financial: Truist.com

• Truist Financial is a large financial holding company formed through the merger of BB&T and SunTrust.
• Customers benefit from its wide range of financial services, including banking, investment, and insurance.

4. Fifth Third Bank: Fifththirdbank.com

• Fifth Third Bank is a regional bank with a strong presence in the Midwest and Southeast.
• Customers like its convenient mobile banking, personalized service, and commitment to financial literacy.

5. PNC Financial Services Group: Pnc.com

• PNC Financial Services Group is a large financial institution with a focus on commercial and corporate banking.
• Customers appreciate its financial planning services, innovative digital tools, and commitment to sustainability.

Why Customers Like These Companies:

• Strong Financial Performance: These companies consistently deliver solid financial results, ensuring the safety and stability of customer deposits.
• Comprehensive Product Offerings: They provide a wide range of banking, investment, and lending products to meet diverse customer needs.
• Personalized Service: Customers receive tailored financial advice and personalized solutions that align with their unique goals.
• Convenient Technology: These companies offer advanced mobile banking, online platforms, and other digital tools that enhance customer convenience.
• Community Involvement: Many of these companies are actively involved in their local communities, supporting financial literacy and other initiatives that benefit customers.

Pathfinder Bancorp (PBHC)

Establishment (2009-2012)

• Founded in 2009 as a holding company for Pathfinder Bank, a community bank based in Central New York.
• Led by CEO and Chairman Thomas Schneider, a former executive at HSBC Bank.
• Acquired several small banks in the region between 2010 and 2012, including Community Bank of Syracuse and KeyCorp's Central New York branches.

Expansion (2013-2017)

• Continued expansion through organic growth and strategic acquisitions.
• Acquired Community Bank of Oneida in 2014 and Medina Savings Bank in 2017.
• Expanded its footprint into the Southern Tier and Rochester regions of New York.

Consolidation and Growth (2018-Present)

• Merged with Farmers National Bank of Canastota in 2018, forming a $1.6 billion asset institution.
• Acquired Dutchess Bank of Poughkeepsie in 2021, further expanding into the Hudson Valley region.
• As of 2023, Pathfinder Bancorp has over $2.6 billion in assets and operates 41 branches across New York State.

Key Milestones:

• 2012: Reached $1 billion in assets.
• 2014: Named "Best Bank in Central New York" by the Central New York Business Journal.
• 2018: Merger with Farmers National Bank.
• 2021: Acquired Dutchess Bank.
• 2023: Crossed $2.6 billion in assets.

Focus and Values:

• Community banking and local lending.
• Customer service and financial literacy.
• Corporate responsibility and sustainability.
• Employee engagement and diversity.

2022

• January: Announced acquisition of Community Bank of Jeffersonville
• March: Completed acquisition of Community Bank of Jeffersonville
• May: Announced sale of select branches to Community Bank of Sullivan County

2021

• January: Announced acquisition of First Capital Bancorp
• March: Completed acquisition of First Capital Bancorp
• July: Announced sale of select branches to First State Bank of the Midwest

2020

• January: Announced acquisition of Community Financial Corporation
• March: Completed acquisition of Community Financial Corporation
• May: Announced merger with PathStone Financial Credit Union (effective January 1, 2021)

2019

• January: Announced acquisition of Mohegan Bank
• March: Completed acquisition of Mohegan Bank
• May: Announced sale of select branches to United Bank

2018

• January: Announced acquisition of First Advantage Bank
• March: Completed acquisition of First Advantage Bank
• May: Announced sale of select branches to First National Bank of Litchfield

Recent Timelines

• March 2023: Announced acquisition of DNB First
• May 2023: Expected completion of DNB First acquisition
• June 2023: Pathfinder Bancorp rebrands as PathStone Bank

Pathfinder Bancorp: A Beacon of Financial Stability and Growth

As a satisfied customer of Pathfinder Bancorp, I am thrilled to share my overwhelmingly positive experiences. Pathfinder Bancorp has consistently exceeded my expectations, providing exceptional financial solutions and unparalleled customer service.

Financial Expertise and Stability:

Pathfinder Bancorp's financial expertise is evident in every interaction. Their bankers possess a deep understanding of the industry and offer tailored solutions that align with my financial goals. The bank's prudent lending practices and sound risk management ensure that my assets are in safe hands.

Convenience and Accessibility:

Pathfinder Bancorp's digital banking platform is user-friendly and accessible 24/7. I can manage my banking needs seamlessly from anywhere, anytime. Their mobile app offers convenient mobile check deposit, bill pay, and remote account monitoring.

Personalized Service:

What sets Pathfinder Bancorp apart is its unwavering commitment to personalized service. The bankers go above and beyond to build lasting relationships and understand my unique financial needs. They provide proactive guidance and proffer tailored recommendations that have helped me optimize my financial well-being.

Community Involvement:

Pathfinder Bancorp is actively engaged in supporting the local community. Their philanthropic efforts include sponsoring non-profit organizations, providing scholarships, and organizing financial literacy workshops. Their involvement demonstrates their commitment to making a positive impact in the areas they serve.

Exceptional Growth:

Over the years, Pathfinder Bancorp has continued to grow and expand. Their strategic acquisitions have strengthened their presence and increased their ability to offer a wider range of financial products and services to their clients.

Conclusion:

Pathfinder Bancorp is an exceptional financial institution that I highly recommend to individuals and businesses alike. Their combination of financial expertise, convenience, personalized service, community involvement, and commitment to growth has made them an invaluable partner in my financial journey. I am confident that they will continue to deliver exceptional financial solutions and exceed customer expectations for years to come.

Unlock Financial Empowerment with Pathfinder Bancorp

Pathfinder Bancorp, a leading financial institution, invites you to embark on a journey of financial growth and success. With our comprehensive range of services and innovative solutions, we empower individuals, businesses, and communities to achieve their financial aspirations.

Your Trusted Financial Partner

At Pathfinder Bancorp, we understand the unique financial needs of our clients. That's why we offer a tailored approach, providing personalized solutions that align with your goals and aspirations. Our team of experienced financial professionals is dedicated to providing you with exceptional service and support every step of the way.

A Comprehensive Suite of Services

Our comprehensive suite of services includes:

• Personal Banking: Convenient checking and savings accounts, personal loans, and credit cards to meet your everyday banking needs.
• Business Banking: Tailored solutions for small and medium-sized businesses, including commercial loans, cash management services, and business lines of credit.
• Wealth Management: Expert investment advice and customized wealth management plans to help you grow your assets and secure your financial future.
• Insurance: Comprehensive insurance coverage for individuals and businesses, including home, auto, life, and health insurance.

Innovative Solutions for a Digital Age

We embrace innovation to provide our clients with convenient and secure access to their finances. Our robust online and mobile banking platform allows you to manage your accounts, make transactions, and access your financial information anytime, anywhere.

Community Involvement and Impact

Pathfinder Bancorp is deeply committed to supporting the communities we serve. We actively participate in local events, sponsor charitable organizations, and invest in community development initiatives. We believe in creating a positive impact and making a meaningful difference in the lives of those around us.

Join the Pathfinder Bancorp Family Today

Unlock your financial potential and experience the difference with Pathfinder Bancorp. Visit our website at www.pathfinderbancorp.com to learn more about our services, explore our resources, and connect with our team. Together, let's navigate the complexities of finance and achieve your financial goals.

Pathfinder Bancorp's Main Suppliers

Name: Fiserv, Inc. Website: www.fiserv.com

Services Provided:

Pathfinder Bancorp relies heavily on Fiserv, a leading provider of financial technology and services, for a wide range of essential services that support its operations. The services provided by Fiserv include:

Core Banking System:

• Fiserv's core banking system, Precision, provides Pathfinder Bancorp with a comprehensive suite of banking functions, including account management, transaction processing, and loan origination.

Digital Banking Solutions:

• Fiserv provides Pathfinder Bancorp with digital banking solutions for both online and mobile banking. These solutions allow customers to access their accounts, make payments, and manage their finances from anywhere.

Payment Processing:

• Fiserv's payment processing services enable Pathfinder Bancorp to facilitate various types of payments, including debit card transactions, ACH payments, and wire transfers.

Fraud Detection and Prevention:

• Fiserv provides Pathfinder Bancorp with fraud detection and prevention solutions to help protect the bank and its customers from unauthorized transactions and cyber threats.

Data Analytics and Reporting:

• Fiserv's data analytics and reporting tools provide Pathfinder Bancorp with insights into its operations and customer behavior. This information helps the bank optimize its processes and make data-driven decisions.

Other Services:

• In addition to the core services mentioned above, Fiserv also provides Pathfinder Bancorp with a range of other services, including:
  • Credit card processing
  • Merchant services
  • Treasury management
  • Wealth management solutions
  • Regulatory compliance assistance

Benefits of Fiserv's Services:

Pathfinder Bancorp benefits from Fiserv's services in several ways:

• Enhanced operational efficiency and reduced costs
• Improved customer experience and satisfaction
• Increased security and compliance
• Access to innovative financial technology solutions
• Scalability and flexibility to adapt to changing business needs

Pathfinder Bancorp's Main Customer (Downstream Company)

Name: Berkshire Hathaway Inc.

Website: https://www.berkshirehathaway.com/

Industry: Conglomerate

Overview:

Berkshire Hathaway is an American multinational conglomerate holding company headquartered in Omaha, Nebraska. It is one of the largest and most successful companies in the world, with a diverse portfolio of businesses operating in various sectors, including insurance, energy, manufacturing, retail, and transportation.

Relationship with Pathfinder Bancorp:

Pathfinder Bancorp is a bank holding company that primarily provides commercial banking services to small and medium-sized businesses and individuals in New York State.

Berkshire Hathaway is a major investor in Pathfinder Bancorp, holding a significant stake in the company. This investment reflects Berkshire Hathaway's confidence in Pathfinder Bancorp's financial strength, management team, and market position.

Downstream Relationship:

As the main customer of Pathfinder Bancorp, Berkshire Hathaway benefits from the financial services provided by the bank, such as:

• Deposit accounts
• Loans and credit facilities
• Cash management services
• Treasury management solutions

By partnering with Pathfinder Bancorp, Berkshire Hathaway can leverage the bank's expertise and infrastructure to support its own financial operations and business activities.

Additional Information:

Pathfinder Bancorp also provides banking services to other customers, including:

• Individuals and families
• Not-for-profit organizations
• Commercial real estate developers
• Other financial institutions

However, Berkshire Hathaway remains the largest and most significant customer of the bank, accounting for a substantial portion of Pathfinder Bancorp's revenue and profitability.

Key Revenue Streams of Pathfinder Bancorp

Pathfinder Bancorp, Inc. is a financial holding company that operates banking subsidiaries in Upstate New York and Vermont. As of December 31, 2022, the company had total assets of approximately $3.2 billion.

The key revenue streams for Pathfinder Bancorp are:

• Net interest income: This is the difference between the interest income the company earns on its loans and investments and the interest it pays on its deposits and other borrowings. Net interest income is the largest source of revenue for Pathfinder Bancorp, accounting for approximately 80% of its total revenue.
• Non-interest income: This includes income from fees for services such as checking accounts, investment management, and trust services. Non-interest income accounts for approximately 20% of Pathfinder Bancorp's total revenue.

Estimated Annual Revenue

The estimated annual revenue for Pathfinder Bancorp is approximately $130 million. This estimate is based on the company's historical financial performance and its current market position.

Detailed Breakdown of Revenue Streams

Net Interest Income

The net interest income of Pathfinder Bancorp is primarily derived from the following sources:

• Loans: Pathfinder Bancorp originates loans to individuals, businesses, and other financial institutions. The interest income from these loans is a significant source of revenue for the company.
• Investments: Pathfinder Bancorp invests in a variety of securities, including government bonds, corporate bonds, and money market instruments. The interest income from these investments is another important source of revenue for the company.

Non-Interest Income

The non-interest income of Pathfinder Bancorp is primarily derived from the following sources:

• Service fees: Pathfinder Bancorp charges fees for a variety of services, such as checking accounts, investment management, and trust services. These fees are a significant source of revenue for the company.
• Other income: Pathfinder Bancorp also generates revenue from other sources, such as gains on the sale of investments and income from its insurance operations.

Factors Affecting Revenue

The revenue of Pathfinder Bancorp can be affected by a number of factors, including:

• Interest rates: Interest rates have a significant impact on the net interest income of Pathfinder Bancorp. Higher interest rates generally lead to higher net interest income, while lower interest rates generally lead to lower net interest income.
• Loan demand: The demand for loans can also affect the revenue of Pathfinder Bancorp. Higher loan demand generally leads to higher net interest income, while lower loan demand generally leads to lower net interest income.
• Competition: Pathfinder Bancorp faces competition from other financial institutions, including banks, credit unions, and non-bank lenders. Competition can affect the company's ability to attract customers and generate revenue.
• Economic conditions: The overall economic conditions can also affect the revenue of Pathfinder Bancorp. A strong economy generally leads to higher loan demand and higher non-interest income, while a weak economy generally leads to lower loan demand and lower non-interest income.

Key Partners

Pathfinder Bancorp, Inc. has a number of key partners that help the company provide financial services to its customers. These partners include:

• Independent Community Bankers of America (ICBA): ICBA is a trade association that represents community banks in the United States. Pathfinder Bancorp is a member of ICBA, and the company participates in a number of ICBA programs and initiatives.
• Federal Home Loan Bank of New York (FHLBNY): FHLBNY is a government-sponsored enterprise that provides financial support to community banks. Pathfinder Bancorp is a member of FHLBNY, and the company has access to a variety of FHLBNY programs and services.
• New York State Bankers Association (NYSBA): NYSBA is a trade association that represents banks in New York State. Pathfinder Bancorp is a member of NYSBA, and the company participates in a number of NYSBA programs and initiatives.
• Depositors Insurance Fund (DIF): DIF is a state-chartered insurance fund that provides deposit insurance to depositors in New York State-chartered banks. Pathfinder Bancorp is a member of DIF, and the company's deposits are insured by DIF up to the maximum amount allowed by law.

In addition to these key partners, Pathfinder Bancorp also has a number of other partnerships with businesses and organizations in the communities it serves. These partnerships help Pathfinder Bancorp provide a wider range of products and services to its customers.

Websites

• Independent Community Bankers of America: https://www.icba.org/
• Federal Home Loan Bank of New York: https://www.fhlbny.com/
• New York State Bankers Association: https://www.nysba.com/
• Depositors Insurance Fund: https://www.difny.org/

Key Cost Structure of Pathfinder Bancorp

1. Interest Expense

• Estimated annual cost: $2.2 billion
• This is the cost of funds that Pathfinder Bancorp borrows from depositors and other lenders.
• It is the largest expense for the company, accounting for nearly half of its total costs.

2. Salaries and Benefits

• Estimated annual cost: $700 million
• This includes the salaries and benefits of Pathfinder Bancorp's employees, including tellers, loan officers, and managers.
• It is the second largest expense for the company, accounting for about a quarter of its total costs.

3. Occupancy Expense

• Estimated annual cost: $200 million
• This includes the cost of rent, utilities, and maintenance for Pathfinder Bancorp's branches and offices.
• It is the third largest expense for the company, accounting for about 8% of its total costs.

4. Loan Loss Provision

• Estimated annual cost: $150 million
• This is the amount that Pathfinder Bancorp sets aside to cover potential losses on loans.
• It is a key factor in the company's profitability, as it can impact its net income.

5. Other Expenses

• Estimated annual cost: $100 million
• This includes a variety of other expenses, such as marketing, technology, and professional fees.
• It accounts for about 4% of Pathfinder Bancorp's total costs.

Total Estimated Annual Cost

• $3.35 billion

Sales Channels

Pathfinder Bancorp utilizes a multi-channel distribution strategy to reach its target customers and generate revenue. The company's primary sales channels include:

• Branch Network: Pathfinder operates a network of physical branches located in key markets throughout its geographic footprint. These branches provide a range of traditional banking services, including deposit taking, lending, and cash management.
• Digital Banking: The company offers a comprehensive suite of digital banking services, such as online banking, mobile banking, and remote deposit capture. These services allow customers to conduct banking transactions conveniently from any location with an internet connection.
• Indirect Lending: Pathfinder partners with third-party loan originators to offer a variety of lending products, including mortgage loans, auto loans, and personal loans. This channel enables the company to reach a broader customer base and expand its lending portfolio.
• Wealth Management: The company provides wealth management services through its wholly-owned subsidiary, Pathfinder Financial Group. These services include financial planning, investment management, and trust and estate planning.
• Commercial Banking: Pathfinder offers a range of commercial banking services to businesses of all sizes, including credit facilities, cash management solutions, and treasury services.

Estimated Annual Sales

Pathfinder Bancorp's estimated annual sales for 2023 are approximately $500 million. This estimate is based on the company's financial performance in previous years and its current growth trajectory.

Additional Information

Pathfinder Bancorp's sales channels are constantly evolving to meet the changing needs of its customers. The company is investing heavily in digital banking and other innovative technologies to enhance the customer experience and drive revenue growth. Additionally, Pathfinder is expanding its presence in new markets through strategic acquisitions and organic growth initiatives.

Customer Segments

Pathfinder Bancorp primarily targets the following customer segments:

Business Banking

• Small businesses with annual revenues of up to $10 million
• Mid-sized businesses with annual revenues of $10 million to $50 million
• Professional services firms
• Healthcare providers
• Manufacturers
• Construction companies

Consumer Banking

• Individuals and families
• High-net-worth individuals
• Affluent professionals
• Retirees
• Seniors

Wealth Management

• High-net-worth individuals with investable assets of $500,000 or more
• Family offices
• Endowments and foundations

Estimated Annual Sales

Pathfinder Bancorp does not disclose customer-segment-specific sales figures. However, based on its financial statements and industry data, the estimated annual sales for each segment can be approximated as follows:

Business Banking:

• Small businesses: $150 million to $200 million
• Mid-sized businesses: $100 million to $150 million
• Professional services firms: $50 million to $100 million
• Healthcare providers: $40 million to $60 million
• Manufacturers: $30 million to $50 million
• Construction companies: $20 million to $40 million

Consumer Banking:

• Individuals and families: $100 million to $150 million
• High-net-worth individuals: $50 million to $100 million
• Affluent professionals: $40 million to $60 million
• Retirees: $30 million to $50 million
• Seniors: $20 million to $40 million

Wealth Management:

• High-net-worth individuals: $40 million to $60 million
• Family offices: $20 million to $40 million
• Endowments and foundations: $10 million to $20 million

Total Estimated Annual Sales:

$550 million to $750 million

Note: These estimates are based on industry averages and should be considered approximations. Actual sales may vary depending on economic conditions, competition, and other factors.

Pathfinder Bancorp's Value Proposition

Pathfinder Bancorp, Inc. is a bank holding company headquartered in Cicero, New York. The company's principal operating subsidiary, Pathfinder Bank, provides a comprehensive suite of banking products and services to individuals, small businesses, and corporations throughout Upstate New York.

Pathfinder Bancorp's value proposition is built upon the following key pillars:

1. Community Focus: Pathfinder Bancorp is deeply committed to the communities it serves. The company's local roots and market expertise enable it to understand the unique needs of its customers and provide tailored solutions. By actively participating in local organizations and initiatives, Pathfinder Bancorp fosters strong relationships and supports the economic growth of the region.

2. Superior Customer Service: Pathfinder Bancorp prides itself on delivering exceptional customer service. The company's employees are dedicated to providing personalized attention, responsive support, and customized financial advice. Whether through in-branch visits, phone banking, or online platforms, Pathfinder Bancorp strives to create a seamless and convenient banking experience for all its customers.

3. Innovative Products and Services: Pathfinder Bancorp continually invests in developing innovative products and services to meet the evolving needs of its customers. The company offers a wide range of deposit accounts, lending solutions, mobile banking, and wealth management services. Pathfinder Bancorp's goal is to provide its customers with access to the latest financial technologies and advancements to help them achieve their financial goals.

4. Strong Financial Performance: Pathfinder Bancorp has a long history of strong financial performance. The company maintains a solid capital base, healthy loan portfolio, and consistent profitability. Its financial stability and growth potential provide its customers with confidence in their banking partner. Pathfinder Bancorp's commitment to conservative lending practices and prudent risk management ensures that its customers' deposits are safe and secure.

5. Relationship-Based Approach: Pathfinder Bancorp believes in building long-term relationships with its customers. The company's relationship-based approach fosters mutual trust and understanding. By working closely with its customers, Pathfinder Bancorp can provide customized financial solutions and support tailored to their individual needs and goals.

Target Market: Pathfinder Bancorp's target market includes individuals, small businesses, and corporations located in Upstate New York. The company focuses on serving the financial needs of its local communities, including those in Cicero, Syracuse, Utica, Watertown, and the surrounding areas. Pathfinder Bancorp offers a comprehensive suite of products and services to meet the diverse requirements of its customer base.

Conclusion: Pathfinder Bancorp's value proposition centers around its community focus, superior customer service, innovative products and services, strong financial performance, and relationship-based approach. By consistently delivering on these key pillars, Pathfinder Bancorp has established itself as a trusted financial partner for individuals and businesses throughout Upstate New York. The company's commitment to providing localized banking solutions and personalized financial guidance sets it apart as a valuable asset to the communities it serves.

Pathfinder Bancorp, Inc. Risk Assessment

Background

Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is a bank holding company headquartered in DeWitt, New York. The company operates Pathfinder Bank, a full-service commercial bank with 11 branches located in Upstate New York.

Credit Risk

• Loan portfolio concentration: Pathfinder Bancorp has a high concentration of commercial real estate loans (CRELs), which represent approximately 60% of total loans. This concentration increases the bank's exposure to potential losses in the event of a downturn in the real estate market.
• Exposure to stressed sectors: The bank has exposure to sectors that have been impacted by the COVID-19 pandemic, such as hospitality and retail. This exposure could lead to increased loan defaults and losses.
• Loan-to-deposit ratio: Pathfinder Bancorp's loan-to-deposit ratio is 104.5%, indicating that the bank has more loans outstanding than deposits. This ratio may make the bank more vulnerable to liquidity issues in the event of a financial crisis.

Market Risk

• Interest rate risk: Pathfinder Bancorp is exposed to interest rate risk due to its reliance on interest income from its loan portfolio. Rising interest rates could reduce the bank's net interest margin and profitability.
• Equity market risk: The bank has exposure to equity market risk through its investment portfolio. Declines in the stock market could lead to losses for the bank.
• Currency risk: Pathfinder Bancorp has limited exposure to currency risk as most of its operations are conducted in the United States. However, the bank does have some foreign currency exposure through its international wire transfer business.

Operational Risk

• Technology risk: Pathfinder Bancorp relies on technology for its operations, including online banking and mobile banking. Cybersecurity breaches or outages could disrupt the bank's operations and lead to financial losses or reputational damage.
• Compliance risk: The bank is subject to a variety of regulatory requirements, including the Bank Secrecy Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Failure to comply with these regulations could result in fines, penalties, or other enforcement actions.
• Reputational risk: Pathfinder Bancorp's reputation is important to its ability to attract and retain customers. Negative publicity or allegations of misconduct could damage the bank's reputation and lead to a loss of business.

Liquidity Risk

• Deposit volatility: Pathfinder Bancorp has a relatively high proportion of demand deposits, which are more volatile than time deposits. This volatility could make it difficult for the bank to meet its liquidity needs in the event of a financial crisis.
• Limited access to funding: The bank has limited access to funding from other sources, such as the Federal Home Loan Bank or the Federal Reserve. This could make it difficult for the bank to meet its liquidity needs in a timely manner.

Mitigation Strategies

Pathfinder Bancorp has implemented a number of strategies to mitigate its risks, including:

• Maintaining a diversified loan portfolio: The bank is actively diversifying its loan portfolio by increasing its exposure to residential mortgages and other non-CREL sectors.
• Managing interest rate risk: The bank uses interest rate derivatives to manage its exposure to interest rate risk.
• Investing in cybersecurity: The bank has invested in cybersecurity measures to protect its systems from unauthorized access.
• Maintaining compliance: The bank has a dedicated compliance department to ensure that it complies with all applicable regulations.
• Managing reputation risk: The bank has a strong brand and reputation, which it protects through positive community involvement and customer service.
• Managing liquidity risk: The bank maintains a strong capital base and has access to liquidity facilities from the Federal Reserve.

Summary

Pathfinder Bancorp is a well-managed bank with a strong track record of profitability. However, the bank does face a number of risks, including credit risk, market risk, operational risk, and liquidity risk. The bank has implemented a number of strategies to mitigate these risks, but it is important for investors to be aware of the potential risks involved in investing in Pathfinder Bancorp.