Pathfinder Bancorp, Inc. · NASDAQ:PBHC
Pathfinder Bancorp — Shareholder Meeting (May 2019)
45 slides from Pathfinder Bancorp's shareholder meeting presentation, May 9, 2019
Slide 1: 2019 Annual Meeting of Shareholders
2019 Annual Meeting of Shareholders 10:00 A.M. | May 9th, 2019 The Lake Ontario Conference and Events Center Oswego, New York
Slide 2: Welcoming Remarks
Welcoming Remarks Chris R. Burritt Chairman of the Board
Slide 3: Agenda – 2019 Annual Meeting of Shareholders
Agenda – 2019 Annual Meeting of Shareholders Introduction of Directors, Management and Guests Conduct of the Meeting Notice and proxy Report of Inspector of Elections Meeting proposals Call for vote Management Presentation and Q & A to Follow Results of Shareholder Vote Meeting Adjourned
Slide 4: Board of Directors
Board of Directors Director Since David A. Ayoub 2012 William A. Barclay 2011 Chris R. Burritt, Chairman 1986 John P. Funiciello 2011 Adam C. Gagas 2014 George P. Joyce 2000 Melanie Littlejohn 2016 Thomas W. Schneider, President & CEO 2001 John F. Sharkey, III 2014 Lloyd “Buddy” Stemple 2005
Slide 5: Executive Officers
Executive Officers Current Position Since Thomas W. Schneider President & CEO 2000 James A. Dowd, CPA Executive Vice President & Chief Operations Officer 2016 Ronald Tascarella Executive Vice President & Chief Banking Officer 2006 Daniel R. Phillips Senior Vice President & Chief Information Officer
Slide 6: Welcome to Past Directors and Other Guests
Welcome to Past Directors and Other Guests
Slide 7: Independent Registered Public Accounting Firm
Independent Registered Public Accounting Firm Tamara L. Gamble, CPA Partner Bonadio & Company, LLP
Slide 8: Executive Management Presentation
Executive Management Presentation This presentation may contain the words or phrases “will likely result”, “are expected to”, “will continue”, “is anticipated”, “estimate”, ”project” or similar expressions that are intended to identify “forward-looking statements” within the meaning of the Private S
Slide 9: Capitalizing on Our Growth: Private Placement Equity Offering
Capitalizing on Our Growth PRIVATE PLACEMENT EQUITY OFFERING Commenced late January Two targets: Primarily-institutional investors Supplemental, yet substantive, contribution from Board of Directors, Executive Officers and local accredited investors (“Friends of the Bank”) Offering price - $14.25 Cl
Slide 10: Capitalizing on Our Growth: Institutional Investor – Castle Creek Capital
Capitalizing on Our Growth INSTITUTIONAL INVESTOR – CASTLE CREEK CAPITAL Now owns 9.9% of our voting shares through a combination of a privately-negotiated purchase from a now-former institutional holder ($6.1 million) Approximately $500,000 of common stock (voting) Approximately $16.5 million in ne
Slide 11: Capitalizing on Our Growth: Castle Creek Warrants
Capitalizing on Our Growth Additionally, Castle Creek Capital was issued 125,000 warrants with a strike price of $14.25 per share The warrants expire in seven years
Slide 12: Castle Creek Capital is investing in our Forward Plan
Castle Creek Capital is investing in our Forward Plan to Capitalize on our Growth to enhance our franchise value to the benefit of our shareholders Castle Creek Capital is an alternative asset management firm focused on the community banking industry Nationally-recognized institutional investor, loc
Slide 13: Capitalizing on Our Growth: Pro Forma
Capitalizing on Our Growth Pro Forma $ in Thousands Dec. 31, 2018 Mar. 31, 2019 $20.8 Million Actual Actual Capital Raise Voting Common Shares Outstanding 4,362,328 4,387,244 4,694,221 Preferred Shares Outstanding (non-voting) - - 1,155,283 Common Equity $64,221 $66,180 $86,090 Book Value per Common
Slide 14: Business of 2019 Annual Meeting of Shareholders
Business of 2019 Annual Meeting of Shareholders The Election of Four Directors David A. Ayoub Adam C. Gagas Melanie Littlejohn John F. Sharkey, III The ratification of the appointment of Bonadio & Co., LLP as the Bank’s independent registered public accounting firm for the year ending December 31, 2
Slide 15: Executive Management Presentation
Executive Management Presentation James A. Dowd, CPA, Executive Vice President, and Chief Operating Officer Walter F. Rusnak, CPA, CGMA, Senior Vice President and Chief Financial Officer Thomas W. Schneider, President and Chief Executive Officer
Slide 16: Key Milestones
Key Milestones 2012 2013 2014 2015 2014 Converted from MHC to 100% publicly-owned institution through “second step” transaction 2015 Issued $10 million subordinated loan agreement maturing in 2025 with 6.25% coupon 2011 Opened first branch in Onondaga County (Syracuse market) 2018 Total assets incre
Slide 17: Branch Growth Strategy 2017 – 2020
Branch Growth Strategy 2017 – 2020 Branch Additions Utica Loan Production Office Route 31, Town of Clay Southwest Corridor – Syracuse Applying for Banking Development District
Slide 18: Positioned for Continued Growth: Strong Competitive Market Position
Positioned for Continued Growth Strong Competitive Market Position Main Office 214 West First Street, Oswego Plaza Office 291 State Route 104 East, Oswego Downtown Drive-Thru 34 East Bridge Street, Oswego Mexico Office 3361 Main Street, Mexico Fulton Office 5 West First Street South, Fulton Lacona O
Slide 19: Five-Year Loan and Deposit Growth
5 -Year Loan and Deposit Growth (in millions) *Deposits include one way borrowings through Promontory Network
Slide 20: Strong Competitive Market Position in Onondaga and Oswego Counties
Positioned for Continued Growth Strong Competitive Market Position in Onondaga and Oswego Counties 6-30-18 Rank Institution (ST) Total Deposits ($000) Market Share (%) 1 Manufacturers and Traders Trust Company $3,017,436 26.0% 2 KeyBank National Association 2,325,614 20.0% 3 JPMorgan Chase Bank, Nat
Slide 21: Deposit Portfolio Composition
Deposit Portfolio Composition December 31, 2008 $269.4 Million December 31, 2018 $727.1 Million Includes brokered deposits
Slide 22: Loan Portfolio Diversification
Loan Portfolio Diversification
Slide 23: Improved Asset Quality Metrics
Improved Asset Quality Metrics Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Non-performing Loans to Total Loans 1.61% 1.24% 0.98% 0.84% 0.35% Non-performing Assets to Total Assets 1.16% 0.94% 0.72% 0.61% 0.36% Allowance for Loan Losses to Total Loans 1.38% 1.33% 1.27% 1.23% 1.18% Allowance for Loan
Slide 24: Executive Management Presentation
Executive Management Presentation James A. Dowd, CPA, Executive Vice President, and Chief Operating Officer Walter F. Rusnak, CPA, CGMA, Senior Vice President and Chief Financial Officer Thomas W. Schneider, President and Chief Executive Officer
Slide 25: Financial Statement Highlights: Statement of Condition
Financial Statement Highlights ($in thousands) Statement of Condition December 2018 December 2017 $ Change % Change Total Assets $933,115 $881,257 $51,858 5.9% Total Loans 620,270 580,831 39,439 6.8 Total Investments 232,025 237,334 (5,309) (2.2) Total Deposits 727,060 723,603 3,457 0.5 Shareholders
Slide 26: Financial Statements Highlights: Income Statement
Financial Statements Highlights ($ in thousands) Income Statement December 2018 December 2017 $ Change % Change Net Income $4,009 $3,423 $586 17% Net Interest Income 25,766 23,123 2,643 11 Provision for Loan Losses 1,497 1,769 (272) (15) Core Noninterest Income* 4,029 3,559 470 13 Noninterest Expens
Slide 27: 2- and 10-Year Treasury Curve
2- and 10- Year Treasury Curve
Slide 28: Net Interest Margin
Net Interest Margin 4.00% 3.50% 3.40% 3.00% 2.50% 2014 3.31% 3.14% 297% 3.02% 2015 2016 2017 2018 thFinder 'BANCORE INC.
Slide 29: Return on Average Assets
Return on Average Assets 0.55% 0.50% 0.45% 0.40% 0.35% 0.30% 0.25% 0.20% 0.51% 0.48% 0.48% 2014 2015 2016 2017 2018 thFinder 'BANCORE INC. 29
Slide 30: Return on Average Equity
Return on Average Equity 7.00% 6.33% 9 9 6.00% 5.50% 5.35% 5.69% 5.00% 4.08% 4.00% 3.00% 2.00% 2014 2015 2016 2017 2018 thFinder 'BANCORE INC.
Slide 31: Earnings Per Share (Diluted) Growth
Earnings Per Share (Diluted) Growth
Slide 32: Revenue and Operating Expense Trends
Revenue and Operating Expense Trends (in thousands)
Slide 33: 2019 1st Quarter Summary Financial Condition
2019 1st Quarter Summary Financial Condition ($ In Thousands) March 2019 December 2018 Inc./(Dec.) Total Loans $657,590 $620,270 $37,320 Total Investments 234,657 232,025 2,632 Total Assets 975,072 933,115 41,957 Total Deposits 805,528 727,060 78,468 Shareholders’ Equity 66,180 64,221 1,959 Tier 1 C
Slide 34: 2019 1st Quarter Summary Financial Performance
2019 1st Quarter Summary Financial Performance ($ In thousands, except per share data) March 2019 March 2018 Inc./(Dec.) Total Interest Income $9,669 $8,209 $1,460 Total Interest Expense 3,122 1,816 1,306 Net Interest Income 6,547 6,393 154 Provision for Loan Losses 144 613 (469) Total Noninterest E
Slide 35: Executive Management Presentation
Executive Management Presentation James A. Dowd, CPA, Executive Vice President, and Chief Operating Officer Walter F. Rusnak, CPA, CGMA, Senior Vice President and Chief Financial Officer Thomas W. Schneider, President and Chief Executive Officer
Slide 36: Capitalizing on Our Growth: Build to $1.0 Billion
Capitalizing on Our Growth BUILD TO $1.0 BILLION Strategy initiated concurrently with the October 2014 capital raise/second step demutualization Establish market position Communicate our Value Proposition Lead with lending; follow with deposits Located directly in downtown Syracuse
Slide 37: Capitalizing on Our Growth: Outcomes
Capitalizing on Our Growth OUTCOMES Strong loan growth: Urban revitalization and city living Diversified loan portfolio with emphasis on solutions for commercial customers Deposits striving to keep pace with loan growth Capacity/ability to convert commercial loan relationships into core commercial d
Slide 38: Capitalizing on Our Growth: Emphasis on Value Proposition
Capitalizing on Our Growth EMPHASIS ON VALUE PROPOSITION Achieved excellent brand recognition and significance in Greater Syracuse markets Built capacity: Service capabilities Risk management systems and processes Strong revenue growth Disproportionally high operating expense directed towards: Peopl
Slide 39: Shifting Focus: Re-balance Deposit Mix
Capitalizing on Our Growth SHIFTING FOCUS Re-balance Deposit Mix Emphasis on commercial demand deposits Accessibility Treasury Management services Our Value Proposition remains Lower cost of funds to support assets with strong yields Offset margin compression
Slide 40: Shifting Focus: Control Operating Expenses
Capitalizing on Our Growth SHIFTING FOCUS Control operating expenses: Emphasis on reducing operating expenses as a percentage of revenue Emphasis on improving the Bank’s Efficiency Ratio Continued revenue growth Appropriate levels of expense growth
Slide 41: Shifting Focus: Improve Noninterest Income
Capitalizing on Our Growth SHIFTING FOCUS Improve noninterest income: Service fees moving toward market rates Value added services as net contributors: Investment services Insurance services
Slide 42: Shifting Focus: Self-Capitalize Through Retained Earnings
Capitalizing on Our Growth SHIFTING FOCUS Self-capitalize through retained earnings supporting a more moderate rate of asset growth ROA – Capital Levels – ROE Enhance tangible book value per share Enhance earnings per share Shift in focal emphasis: From the balance sheet To the income statement
Slide 43: Questions and Discussion
Questions and Discussion -PPathFinder ‘BANCORE INC. 43
Slide 44: Voting Results
Voting Results Chris R. Burritt, Chairman Inspector of Elections Report, James A. Dowd
Slide 45: Meeting Adjourned – Thank You for Attending
2018 Annual Meeting of Shareholders Meeting Adjourned Thank You for Attending 2019 Annual Meeting of Shareholders