PBHC

Pathfinder grew earnings to $0.42 per share in the second quarter of 2026 with stable credit performance, disciplined loan and deposit pricing, and incremental net interest income generated by deploying underutilized liquidity into the bank’s AFS securities portfolio OSWEGO, N.Y., July 30, 2026 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the second quarter ended June 30, 2026. The holding company for Pathfinder Bank (“the Bank”) reported net income attributable to common shareholders of $2.7 million, or $0.42 per diluted share, in the second quarter of 2026, compared to $2.4 million, or $0.38 per diluted share, in the first quarter of 2026, and $31,000, or less than $0.01 per share, in the second quarter of 2025. Second Quarter 2026 Highlights and Key Developments Second quarter 2026 net income reflected a $155,000 provision benefit attributed to the level of average loans outstanding in the period and the risk-based reserve build undertaken in the second half of 2025 to absorb future loss resolution activity related to individually analyzed commercial loans. The Company recorded a $168,000 provision benefit in the first quarter of 2026 and a $1.2 million provision expense in the second quarter of 2025. The Company’s allowance for credit losses (“ACL”) fully absorbed a second quarter 2026 charge-off of a previously reserved commercial loan associated with a single relationship identified through last year’s comprehensive commercial portfolio review. Net charge-offs were $1.9 million in the second quarter of 2026, compared to $284,000 in the first quarter of 2026 and $2.6 million in the second quarter of 2025. The ACL was $26.9 million, or 3.03% of total loans, on June 30, 2026, compared to $29.0 million, or 3.24% of total loans, on March 31, 2026, and $16.0 million, or 1.76% of loans, on June 30, 2025. Specific reserves, including those previously established in conjunction with last year’s comprehensive commercial portfolio review, represented 62.0% of the ACL at the end of the second quarter of 2026. Loans totaled $889.0 million at June 30, 2026, compared to $895.2 million at March 31, 2026, and $909.7 million at June 30, 2025. Commercial loans were $544.6 million or 61.3% of total loans at June 30, 2026, compared to $549.5 million at March 31, 2026 and $549.1 million at June 30, 2025. Deposits totaled $1.17 billion at June 30, 2026, compared to $1.21 billion at March 31, 2026, and $1.22 billion at June 30, 2025. Core deposits were $961.6 million or $81.9% of total deposits on June 30, 2026, compared to $993.7 million at March 31, 2026 and $958.8 million on June 30, 2025. Net interest income was $10.5 million in the second quarter of 2026, benefiting from the reallocation of underutilized liquidity into the available-for-sale (“AFS”) securities portfolio, compared to $10.3 million in the first quarter of 2026 and $10.8 million in the second quarter of 2025. Net interest margin (“NIM”) was 3.08% in the second quarter of 2026, compared to 3.10% in the linked quarter and 3.11% in the year-ago period. Noninterest expense was $8.7 million or 2.39% of average assets on an annualized basis in the second quarter of 2026, compared to $8.7 million or 2.48% of average assets in the first quarter of 2026 and $8.1 million or 2.18% of average assets in the second quarter of 2025. The efficiency ratio was 74.26% in the second quarter of 2026, compared to 75.65% in the first quarter of 2026 and 65.66% in the second quarter of 2025(1). Pre-tax, pre-provision (“PTPP”) net income was $3.0 million in the second quarter of 2026, compared to $2.8 million in the first quarter of 2026 and $4.2 million in the second quarter of 2025(1). Quarterly cash dividends payable to common stockholders of $0.10 per share were declared on June 29, 2026 and are payable on August 7, 2026. “Pathfinder’s financial results reflect continued progression toward more consistent, durable profitability, with meaningful improvement in second quarter earnings and returns on assets and equity,” President and Chief Executive Officer James Dowd said. “Sequential growth in net interest income reflected an opportunistic reallocation of underutilized liquidity into the AFS securities portfolio, and third quarter results are expected to benefit more fully from these securities purchases undertaken in late May, utilizing borrowings at rates below those of wholesale funding alternatives. This approach enabled us to generate incremental earnings while preserving the flexibility to leverage Pathfinder’s low-cost core deposit franchise to fund future lending to our community bank’s businesses and consumers.” Dowd added, “Performance was also supported by a modest net credit to provision, underscoring the benefits of the proactive, risk-based reserve build we completed last year and the ongoing stabilization of credit costs. The resolution of previously reserved commercial loans with unique risk characteristics improved overall portfolio quality without the need for incremental provision expense. Our second quarter 2026 asset quality metrics further reflects the comprehensive commercial portfolio review and reserve build completed at the end of last year, as well as the broad-based credit discipline initiatives implemented since mid-2024.” (1) Non-GAAP financial metric. See “Notes on Non-GAAP Financial Measures” and non-GAAP reconciliation included herein for the most directly comparable financial measures. Net Interest Income and Net Interest Margin Second quarter 2026 net interest income was $10.5 million, an increase of $196,000, or 1.9%, from the first quarter of 2026. An increase in total interest and dividend income of $566,000 in the second quarter of 2026, from the linked quarter, was primarily attributed to a $34.9 million increase in average earning assets, as well as an average yield increase of 3 basis points on all interest-earning assets. An 11 basis points increase in average loan yields in the second quarter of 2026, from the linked quarter, was primarily attributable to the transfer of three commercial relationships to nonperforming status in the first quarter of 2026, in addition to originations of commercial real estate loans, which offset the impact of portfolio runoff from maturities and payoffs. A 16 basis points decrease in taxable securities average yield in the second quarter of 2026, from the linked quarter, reflected a $43.0 million increase in average taxable investment securities balances resulting from AFS securities purchases undertaken in the second quarter of 2026. In addition, average balances of loans, tax-exempt securities, and federal funds sold and interest-earning deposits declined in the second quarter of 2026, from the linked quarter, by $2.2 million, $384,000, and $5.5 million, respectively. Compared to the linked quarter, second quarter 2026 income from loan interest, taxable securities, tax-exempt securities and dividends increased by $213,000, $321,000, $33,000, and $38,000, respectively, while income from federal funds sold and interest earning deposits declined by $39,000. An increase in total interest expense in the second quarter of 2026, from the linked quarter, of $370,000 was attributed to a 5 basis points increase in the average cost of total interest-bearing liabilities, including an increase of 3 basis points in the average cost of interest-bearing deposits that was partially offset by decreases of 6 basis points in the average cost of borrowings and 3 basis points in the average cost of subordinated debt. Second quarter 2026 NIM was 3.08%, compared to 3.10% in the linked quarter. The 2 basis points decrease from the linked quarter resulted from an increase in the cost of interest-bearing deposits, which more than offset higher earning asset yields. Second quarter 2026 net interest income was $10.5 million, a decrease of $278,000, or 2.6%, from the year-ago period. A decrease in total interest and dividend income of $1.1 million in the second quarter of 2026, from the year-ago period, was primarily attributed to a $21.9 million decline in average earning asset balances and an average yield decrease of 24 basis points on all interest-earning assets. Average loan yields decreased 16 basis points from the year-ago period, driven by maturities and payoffs of higher-yielding loans, and elevated nonperforming loans for which specific reserves were established as appropriate prior to the second quarter of 2026. A 33 basis points decrease in taxable securities average yield in the second quarter of 2026, from the year-ago period, reflected a decline in average taxable investment securities balances and a declining rate environment. In addition, average balances of loans, taxable securities and tax-exempt securities declined in the second quarter of 2026, from the year-ago period, by $11.4 million, $14.8 million, and $1.2 million, respectively. Compared to the year-ago period, second quarter 2026 decreases in income from loan interest, taxable securities, and tax-exempt securities of $536,000, $602,000, and $97,000, respectively, were partially offset by increases in income from dividends of $66,000 and federal funds sold and interest earning deposits of $55,000. A decrease in total interest expense in the second quarter of 2026, from the year-ago period, of $836,000 was attributed to a 22 basis points decline in the average cost of total interest-bearing liabilities, including a reduction of 33 basis points in the average cost of interest-bearing deposits that was partially offset by an increase of 7 basis points in the average cost of borrowings, as well as an increase of 218 basis points in the average cost of subordinated debt that reset from bearing fixed to floating-rate interest after October 15, 2025. Second quarter 2026 NIM was 3.08%, compared to 3.11% in the year-ago period. The decrease of 3 basis points primarily reflected lower earning asset yields that more than offset the reduction in the cost of interest-bearing deposits and other liabilities. Noninterest Income Second quarter 2026 noninterest income totaled $1.2 million. First quarter 2026 noninterest income totaled $1.1 million, which was reduced by $203,000 for fair value adjustments made in that period to $6.3 million in substandard loans that were transferred to held-for-sale status in the fourth quarter of 2025. Second quarter 2025 noninterest income totaled negative $1.5 million, including $3.1 million in fair value adjustments made in the year-ago period in connection with the sale of certain nonperforming and classified loans. Compared to the linked quarter, second quarter 2026 noninterest income reflected increases of $74,000 in earnings and gain on bank owned life insurance (“BOLI”) and $49,000 in debit card interchange fees. In addition, compared to the linked quarter, second quarter 2026 noninterest income also reflected a decrease of $5,000 in net realized losses on sales and redemptions of investment securities, as well as decreases of $91,000 in gains on sales of loans and foreclosed real estate and $21,000 in loan servicing fees. Net unrealized gains on marketable equity securities, which include three limited partnership equity method investments, remains a variable contributor to noninterest income, decreasing $129,000 in the second quarter of 2026 from the linked quarter. Compared to the year-ago period, second quarter 2026 noninterest income reflected increases of $174,000 in earnings and gains on BOLI, $8,000 in debit card interchange fees, and $1,000 in service charges on deposit accounts. In addition, compared to the year-ago period, second quarter 2026 noninterest income included an increase of $12,000 in gains on sales of loans and foreclosed real estate, as well as a decrease of $29,000 in loan servicing fees. Net unrealized gains on marketable equity securities, which include three limited partnership equity method investments, remains a variable contributor to noninterest income, decreasing $473,000 in the second quarter of 2026 from the year-ago period. Noninterest ExpenseNoninterest expense totaled $8.7 million in the second quarter of 2026, compared to $8.7 million in the first quarter of 2026 and $8.1 million in the second quarter of 2025. Salaries and benefits expense was $4.7 million in the second quarter of 2026, decreasing $204,000 from the linked quarter and increasing $128,000 from the year-ago quarter. The Company recorded moderate increases in salaries, stock-based compensation, and payroll taxes compared to both periods, with the year-over-year increase also reflecting higher staffing levels. These increases were offset by the favorable impact of several non-operating items, including recoveries from medical claim refunds under the Company's self-insured health plan in the second quarter of 2026. Building and occupancy expense was $1.4 million in the second quarter of 2026, increasing $53,000 from the linked quarter and $150,000 from the year-ago quarter. The increases from the linked and year-ago quarters reflected higher facility-related maintenance and repair expenses, including ATM servicing, branch maintenance and various property improvement activities. Data processing expense was $774,000 in the second quarter of 2026, increasing $41,000 from the linked quarter and $107,000 from the year-ago period. The increases from the linked and year-ago quarters reflected higher costs primarily associated with data, ATM, and other technology maintenance costs. Other expenses were $614,000 in the second quarter of 2026, increasing $139,000 from the linked quarter and $104,000 from the year-ago quarter. The increases from both the linked and year-ago quarters were primarily attributable to higher employee travel, training, and professional development expenses, as well as higher mortgage recording tax, liability insurance, and business development-related expenses. The year-over-year increase was also influenced by certain favorable accrual and expense reclassification adjustments recognized in the year-ago period. Total noninterest expense comparisons also reflect FDIC assessments, which were zero in the second quarter of 2025, due to modest over-accruals in prior periods. Normalized FDIC assessment accruals have been recorded since June 30, 2025, including $204,000 and $232,000 in first and second quarters of 2026, respectively. As a percentage of average assets, annualized noninterest expense represented 2.39% in the second quarter of 2026, compared to 2.48% and 2.18% in the linked and year-ago periods. The efficiency ratio was 74.26% in the second quarter of 2026, compared to 75.65% and 65.66% in the linked and year-ago periods, respectively(2). As the Company continues to maintain well controlled noninterest expenses, the efficiency ratio was elevated in the second quarter of 2026 by a reduction in revenues in the period, which the Company views as temporary. In addition, the absence of FDIC assessment expense in the second quarter of 2025, due to modest over-accruals in prior periods, lowered the efficiency ratio for the three months ended June 30, 2025. (2) Non-GAAP financial metric. See “Notes on Non-GAAP Financial Measures” and non-GAAP reconciliation included herein for the most directly comparable financial measures. Net IncomeNet income attributable to common shareholders was $2.7 million, or $0.42 per basic and diluted share, in the second quarter of 2026, compared to $2.4 million, or $0.38 per basic and diluted share, in the first quarter of 2026, and $31,000, or less than $0.01 per basic and diluted share, in the second quarter of 2025. Statement of Financial ConditionAs of June 30, 2026, the Company’s statement of financial condition reflects total assets of $1.49 billion, compared to $1.42 billion on March 31, 2026, and $1.51 billion on June 30, 2025. Loans totaled $889.0 million on June 30, 2026, decreasing $6.2 million or 0.7% during the second quarter of 2026 and $20.7 million or 2.3% from one year prior. Consumer and residential loans totaled $345.2 million on June 30, 2026, decreasing $1.8 million or 0.5% during the second quarter of 2026 and $16.9 or 4.7% from one year prior. Commercial loans totaled $544.6 million on June 30, 2026, decreasing $4.9 million or 0.9% during the second quarter of 2026 and $4.5 million or 0.8% from one year prior. Investment securities totaled $483.7 million on June 30, 2026, increasing $82.1 million or 20.4% during the second quarter of 2026 and $20.0 million or 4.3% from one year prior. The increase from March 31, 2026 was primarily due to the purchase of AFS securities during the second quarter of 2026, enabling the Company to generate incremental earnings while preserving the flexibility to use core deposits to fund future loan growth, even as the held-to maturity (“HTM”) portfolio experienced runoff from maturities, calls, and paydowns. With respect to liabilities, deposits totaled $1.17 billion on June 30, 2026, decreasing $37.5 million or 3.1% during the second quarter of 2026 and $47.6 million or 3.9% from one year prior, as the Bank utilizes deliberate pricing and account management to facilitate intentional runoff of higher-cost brokered deposits and non-relationship time deposits. The decrease from March 31, 2026 reflected a shift in deposit mix toward noninterest-bearing demand deposits, while other deposit categories declined, including higher-cost time deposits with balances of less than $250,000. The decrease from June 30, 2025 reflects growth in MMDA deposits and both interest- and noninterest-bearing demand deposits, offset by runoff of higher-cost time deposits. Core deposits totaled $961.6 million, or 81.9% of total deposits, on June 30, 2026, decreasing $32.1 million or 3.2% during the second quarter of 2026 and increasing $2.8 million or 0.3% from one year prior. Borrowings were utilized in the second quarter of 2026 to fund purchases of AFS securities at rates below those of wholesale funding alternatives, including brokered deposits. As a result, borrowings grew to $133.4 million on June 30, 2026, increasing $106.0 million during the second quarter of 2026 and $36.9 million from one year prior. Shareholders’ equity totaled $125.7 million on June 30, 2026, increasing $2.2 million or 1.7% during the second quarter of 2026 and $1.3 million or 1.1% from one year prior. The increase from March 31, 2026 primarily reflected a $2.0 million increase in retained earnings and a $529,000 increase in additional paid in capital, which more than offset a $408,000 increase in accumulated other comprehensive loss (“AOCL”). Asset QualityThe Company’s asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach. The Company believes it is sufficiently collateralized and reserved, with an ACL of $26.9 million on June 30, 2026, compared to $29.0 million on March 31, 2026, and $16.0 million on June 30, 2025. During the second quarter of 2026, the Company charged off a $1.6 million commercial loan with unique risk characteristics ("LURC") that had been identified through last year's comprehensive commercial portfolio review. The charge-off was fully covered by previously established ACL reserves. As a percentage of total loans, ACL represented 3.03% on June 30, 2026, 3.24% on March 31, 2026, and 1.76% on June 30, 2025. The ACL continues to reflect a $11.4 million risk-based reserve build at the end of 2025, following a forward-looking assessment of LURCs identified through a comprehensive review of approximately 90% of the Bank’s commercial portfolio. Specific reserves, including those established in conjunction with 2025’s comprehensive commercial portfolio review, represented 62.0% of the Company’s ACL at the end of the second quarter of 2026. Individually analyzed loans (“IALs”) including LURCs totaled $78.6 million on June 30, 2026, improving from $84.7 million on March 31, 2026. At the end of the second quarter of 2026, LURCs consisted of 67% commercial real estate (“CRE”) loans, which had a weighted average loan-to-value (“LTV”) ratio of 66%(3). Nonperforming loan (“NPL”) levels may fluctuate near term as IALs progress through resolution activities. NPLs were $35.7 million, or 4.02% of total loans on June 30, 2026, compared to $38.2 million, or 4.26% of total loans on March 31, 2026, and $11.7 million or 1.28% of total loans on June 30, 2025. NPLs decreased in the second quarter of 2026, largely as the result of the $1.6 million charge-off of the aforementioned LURC associated with a single commercial relationship. The Company’s ACL fully absorbed second quarter 2026 net charge-offs (“NCOs”) of $1.9 million, or an annualized 0.83% of average loans, with gross charge-offs partially offset by $298,000 in recoveries. A credit loss provision benefit of $155,000 was recorded in the second quarter of 2026, attributed to the level of average loans outstanding in the period and the risk-based reserve build undertaken in the second half of 2025 to absorb future loss resolution activity related to commercial IALs. A credit loss provision benefit of $168,000 was recorded in the first quarter of 2026 and the provision for credit loss expense was $1.2 million in the year-ago period. (3) Weighted average LTV is the loan principal balance as a percentage of book balance for commercial real estate (CRE) individually analyzed loans, excluding two loans with LTVs >100% based on collateral that is expected to be sold to new owners or sponsors intending to reposition these transitional or value-add properties. Collateral values are determined using most-recent appraisals, purchase offers, auction bids, broker opinions, and business financials. Liquidity The Company has diligently ensured a strong liquidity profile as of June 30, 2026 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership. The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.17 billion on June 30, 2026, compared to $1.21 billion on March 31, 2026, and $1.22 billion on June 30, 2025. Core deposits, as a percentage of total deposits, represented 81.89% on June 30, 2026, compared to 82.01% on March 31, 2026, and 78.47% on June 30, 2025. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability. On June 30, 2026, the Bank had an available additional funding capacity of $81.7 million with the Federal Home Loan Bank of New York and $54.3 million with the Federal Reserve Bank, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $15.0 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend DeclaredOn June 29, 2026, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock. Shareholders registered by July 17, 2026 will be eligible for the dividend, which is scheduled for disbursement on August 7, 2026. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value. Evaluating the Company’s market performance, the closing stock price as of June 30, 2026 stood at $15.88 per share. This positions the annualized dividend yield at 2.52%. About Pathfinder Bancorp, Inc.Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com. Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, but are not limited to, statements regarding expected earnings normalization, future credit costs, the adequacy of the allowance for credit losses, reduced incremental reserve pressure, potential expansion of regulatory capital ratios, dividend sustainability, liquidity capacity, funding availability, and the Company’s business strategy and outlook for 2026 and beyond. Forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of numerous factors. Although it is not possible to identify all factors that may cause actual results to differ, such include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in prevailing interested rates; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; the risk that actual credit losses, borrower performance, collateral values, or loan migration patterns differ from management’s forward-looking estimates or assumptions; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels or changes in deposit mix that may necessitate increased borrowing to fund loans and investments; access to wholesale or other funding sources; operational risks including, cybersecurity, fraud, model risk and natural disasters; credit risk management; and the risk that the Company may not be successful in the implementation of its business strategy. Additional factors that could cause actual results to differ materially are described in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov. While the Company believes it has identified and discussed the material risks affecting its business, there may be additional risks and uncertainties not currently known or considered immaterial that could affect the forward-looking statements made herein. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of future results. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable law. Notes on Non-GAAP Financial Measures This release contains certain non-GAAP financial measures, including, but not limited to the efficiency ratio, pre-tax, pre-provision net income, tangible common equity, tangible book value per share, and return on average tangible common equity. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable GAAP measure. The Company believes these non-GAAP financial measures provide useful information to investors by assisting in the evaluation of the Company’s operating performance, operating efficiency, financial condition, and trends, and by facilitating comparisons with prior periods and with peer institutions. In particular, management uses these measures to assess expense control relative to revenue generation, underlying profitability excluding certain non-recurring or non-operational items, and capital strength on a basis that it believes is meaningful for internal planning and external analysis. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and should be considered only in conjunction with the Company’s GAAP financial results. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures within this release. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.2 Non-brokered deposits excluding certificates of deposit of $250,000 or more.3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital.4 Basic and diluted earnings per share are calculated based upon the two-class method. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity.2 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms.3 Revenue equals net interest income plus total noninterest income, less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, fair value adjustment to loans held-for-sale, and sales of assets.4 Pre-tax, pre-provision net income equals revenue less total noninterest expense.5 Efficiency ratio equals noninterest expense divided by revenue. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. Investor/Media Contacts James A. Dowd, President, CEOJustin K. Bigham, Executive Vice President, CFOTelephone: (315) 343-0057

Pathfinder earns $0.38 per share in the first quarter of 2026 while growing core deposits and commercial loans, expanding net interest margin from the fourth quarter of 2025, and reporting credit performance that benefited from last year’s loan portfolio review and reserve build OSWEGO, N.Y., April 29, 2026 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the first quarter ended March 31, 2026. The holding company for Pathfinder Bank (“the Bank”) reported net income attributable to common shareholders of $2.4 million or $0.38 per diluted share in the first quarter of 2026, compared to a net loss of $5.6 million, or $0.88 per diluted share in the fourth quarter of 2025 and net income of $3.0 million or $0.47 per diluted share in the first quarter of 2025. First Quarter 2026 Highlights and Key Developments First quarter 2026 net income reflected a $168,000 provision benefit attributed to lower net charge offs and overall credit performance that resulted in a small reserve reduction for loans in the first three months of this year. Fourth quarter 2025’s net loss resulted primarily from an $11.2 million credit loss provision expense, reflecting a risk-based reserve build that increased the allowance for credit losses (“ACL”) following a forward-looking assessment of loans with unique risk characteristics identified through a comprehensive review of approximately 90% of the Bank’s commercial portfolio. First quarter 2025 provision expense was $457,000. Specific reserves, including those previously established in conjunction with last year’s comprehensive commercial portfolio review, represented 63.8% of the Company’s ACL at the end of the first quarter of 2026. The ACL was $29.0 million, or 3.24% of total loans, on March 31, 2026, compared to $29.4 million, or 3.28% of loans, on December 31, 2025, and $17.4 million, or 1.91% of loans, on March 31, 2025. Loans totaled $895.2 million at March 31, 2026, compared to $896.7 million at December 31, 2025, and $912.2 million on March 31, 2025. Commercial loans grew to $549.5 million or 61.4% of total loans at March 31, 2026, compared to $543.7 million at December 31, 2025, and $542.7 million at March 31, 2025. Deposits totaled $1.21 billion at March 31, 2026, compared to $1.18 billion at December 31, 2025, and $1.26 billion at March 31, 2025. Core deposits grew to $993.7 million or 82.01% of total deposits at March 31, 2026, compared to $947.2 million at December 31, 2025, and $990.2 million at March 31, 2025. Net interest income was $10.3 million in the first quarter of 2026, compared to $10.5 million in the fourth quarter of 2025 and $11.4 million in the first quarter of 2025. Net interest margin (“NIM”) was 3.10% in the first quarter of 2026, compared to 3.09% in the linked quarter and 3.31% in the year-ago period. Approximately $347,000 of net interest income and 10 basis points of NIM in the year-ago period reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees in the first quarter of 2025. Noninterest expense of $8.7 million represented 2.48% of average assets on an annualized basis in the first quarter of 2026, compared to $9.2 million or 2.51% of average assets in the fourth quarter of 2025 and $8.4 million or 2.33% of average assets in the first quarter of 2025. The efficiency ratio was 75.65% in the first quarter of 2026, compared to 74.96% for the fourth quarter of 2025 and 67.19% in the first quarter of 2025(1). Pre-tax, pre-provision (“PTPP”) net income was $2.8 million in the first quarter of 2026, compared to $3.1 million for the fourth quarter 2025 and $4.1 million in the first quarter of 2025(1). Quarterly cash dividends payable to common stockholders of $0.10 per share were declared on March 30, 2026 and are payable on May 8, 2026. “We’re pleased to report first quarter results that included positive earnings momentum, core-deposit and commercial-loan growth, and sequential-quarter NIM expansion, as well as lower net charge offs and overall credit performance that benefited from the comprehensive portfolio review and meaningful risk-based reserve build completed last year,” President and Chief Executive Officer James Dowd said. “We believe that the Company is appropriately reserved for potential exposures to the commercial credits with unique risk characteristics that we identified in 2025’s portfolio review.” Dowd added, “Throughout 2026, we intend to continue strengthening Pathfinder’s relationship-based core deposit base and driving high-quality commercial loan growth, while intensifying efforts to prudently increase local residential and consumer lending within in our Central New York markets, supported by significant liquidity, a strong balance sheet, and a robust credit framework.” (1) Non-GAAP financial metric. See “Notes on Non-GAAP Financial Measures” and non-GAAP reconciliation included herein for the most directly comparable financial measures. Net Interest Income and Net Interest Margin First quarter 2026 net interest income was $10.3 million, a decrease of $170,000, or 1.6%, from the fourth quarter of 2025. A decrease in total interest and dividend income of $792,000 in the first quarter of 2026, from the linked quarter, was primarily attributed to an average yield decrease of 13 basis points on all interest-earning assets. A 26 basis point decrease in average loan yields in the first quarter of 2026, from the linked quarter, is primarily driven by the transfer of three commercial relationships to nonperforming status as well as maturities and payoffs of higher yielding loans and their replacement with new originations at lower rates. A 17 basis point increase in taxable securities average yield in the first quarter of 2026, from the linked quarter, reflected a decline in average taxable investment securities balances which the Company views as temporary. In addition, average balances of loans, taxable securities and tax-exempt securities declined in the first quarter of 2026, from the linked quarter, by $2.8 million, $23.4 million and $314,000, respectively. Compared to the linked quarter, first quarter 2026 income from loan interest, taxable securities, tax-exempt securities and dividends decreased by $626,000, $82,000, $50,000, and $34,000, respectively, while income from federal funds sold remained flat. A decrease in total interest expense in the first quarter of 2026, from the linked quarter, of $622,000 was attributed to a 17 basis point decline in the average cost of total interest-bearing liabilities, including a reduction of 23 basis points in the average cost of interest-bearing deposits that was partially offset by increases of 6 basis points in the average cost of borrowings and 161 basis points in the average cost of subordinated loans. Fourth quarter 2025 average cost of subordinated loans benefited by 136 basis points, or $103,000, from a reversal of deferred expenses related to subordinated notes that reset from fixed to floating-rate interest after October 15, 2025. First quarter 2026 NIM was 3.10%, compared to 3.09% in the linked quarter. The 1 basis point increase from the linked quarter resulted from a reduction in the cost of interest-bearing deposits and other liabilities, which more than offset lower earning asset yields. First quarter 2026 net interest income was $10.3 million, a decrease of $1.1 million, or 9.4%, from the year-ago period. Approximately $347,000 of first quarter 2025 net interest income reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees. A decrease in total interest and dividend income of $1.9 million in the first quarter of 2026, from the year-ago period, was primarily attributed to an average yield decrease of 38 basis points on all interest-earning assets. Average loan yields decreased 49 basis points from the year-ago period, reflecting in part a 15 basis point benefit recognized in the first quarter of 2025 attributable to 2024 interest recovered on loans removed from nonaccrual status and income from prepayment fees. The remaining decrease was driven by maturities and payoffs of higher-yielding loans, new originations at lower rates, and elevated nonperforming loans for which specific reserves were established as appropriate prior to the first quarter of 2026. A 14 basis point decrease in taxable securities average yield in the first quarter of 2026, from the year-ago period, reflected a decline in average taxable investment securities balances which the Company views as temporary, as well as decrease in average yield due to a declining rate environment. In addition, average balances of loans, taxable securities and tax-exempt securities declined in the first quarter of 2026, from the year-ago period, by $14.1 million, $39.3 million, and $1.0 million, respectively. Compared to the year-ago period, first quarter 2026 decreases in income from loan interest, taxable securities, tax-exempt securities, and dividends of $1.3 million, $586,000, $67,000, and $44,000, respectively, were partially offset by an increase in income from federal funds sold of $73,000. A decrease in total interest expense in the first quarter of 2026, from the year-ago period, of $868,000 was attributed to a 22 basis point decline in the average cost of total interest-bearing liabilities, including a reduction of 31 basis points in the average cost of interest-bearing deposits that was partially offset by an increase of 34 basis points in the average cost of borrowings, as well as an increase of 230 basis points in the average cost of subordinated loans that reset from bearing fixed to floating-rate interest after October 15, 2025. First quarter 2026 NIM was 3.10%, compared to 3.31% in the year-ago period. The decrease of 21 basis points primarily reflected lower earning asset yields that more than offset the reduction in the cost of interest-bearing deposits and other liabilities. In addition, approximately 10 basis points of NIM in the year-ago period reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees in the first quarter of 2025. Noninterest Income First quarter 2026 noninterest income totaled $1.1 million, including a loss of $203,000 for fair value adjustments made in the period to $6.3 million in substandard loans that were transferred to held-for-sale status in the fourth quarter of 2025. Active sale negotiations remain ongoing. Fourth quarter 2025 noninterest income of $1.3 million included a loss of $398,000 that was recorded with the initial transfer of these same loans to held-for-sale status, as well as a loss of $37,000 on the sale of premises and equipment, and a reduction of $115,000 for final settlement costs associated with the insurance agency business sold in October 2024. First quarter 2025 noninterest income totaled $1.2 million. Compared to the linked quarter, first quarter 2026 noninterest income reflected increases of $27,000 in debit card interchange fees and $26,000 in earnings and gain on BOLI, as well as a decrease of $5,000 in service charges on deposit accounts. In addition, compared to the linked quarter, first quarter 2026 noninterest income also reflected increases of $53,000 in gains on sales of loans and foreclosed real estate and $14,000 in loan servicing fees, as well as decreases of $591,000 in net unrealized gains on marketable equity securities and $2,000 in net realized losses on sales and redemptions of investment securities. Net unrealized gains on marketable equity securities, which include two limited partnership equity method investments, remains a variable contributor to noninterest income, decreasing $591,000 in the first quarter of 2026 from the linked quarter. Compared to the year-ago period, first quarter 2026 noninterest income reflected increases of $94,000 in earnings and gains on BOLI, $138,000 in debit card interchange fees, and $2,000 in service charges on deposit accounts. In addition, compared to the year-ago period, first quarter 2026 noninterest income included increases of $121,000 in gains on sales of loans and foreclosed real estate and $3,000 in net realized losses on sales and redemptions of investment securities, as well as decreases of $142,000 in net unrealized gains on marketable equity securities and $12,000 in loan servicing fees. Net unrealized gains on marketable equity securities, which include two limited partnership equity method investments, remains a variable contributor to noninterest income, decreasing $142,000 in the first quarter of 2026 from the year-ago quarter. Noninterest Expense Noninterest expense totaled $8.7 million in the first quarter of 2026, compared to $9.2 million in the fourth quarter of 2025 and $8.4 million in the first quarter of 2025. Salaries and benefits expense was $4.9 million in the first quarter of 2026, decreasing $67,000 from the linked quarter and increasing $407,000 from the year-ago period. The decrease from the linked period primarily reflected seasonally higher employee benefit expenses and a year-end pension plan expense adjustment in the fourth quarter of 2025, partially offset by general increases in salaries and seasonal payroll tax fluctuations recognized during the first quarter of 2026. The increase from the year-ago period was primarily driven by general increases in salaries and strategic changes in workforce composition since early 2025, with the addition of more senior, key personnel across the organization, as well as higher payroll taxes and stock-based compensation in the first quarter of 2026. Building and occupancy expense was $1.3 million in the first quarter of 2026, decreasing $10,000 from the linked quarter and decreasing $20,000 from the year-ago quarter. The decreases from the linked and year-ago quarters reflected modest reductions across multiple building and occupancy expense categories, partially offset by higher utilities costs. Data processing expense was $733,000 in the first quarter of 2026, increasing $35,000 from the linked quarter and increasing $67,000 from the year-ago period. The increases from the linked and year-ago quarters reflected higher costs primarily associated with data, ATM, and other technology maintenance costs. Other expenses were $475,000 in the first quarter of 2026, decreasing $323,000 from the linked quarter and $216,000 from the year-ago period. The decrease from the linked quarter reflected a one-time $100,000 charitable contribution and $162,000 in fees related to the aforementioned loans held-for-sale during the fourth quarter of 2025. The year-over-year decrease reflected a heightened focus on practices and procedures as they relate to procurement, vendors, and accounts-payable, as well as a general emphasis on operating expense discipline. Annualized noninterest expense represented 2.48% of average assets in the first quarter of 2026, compared to 2.51% and 2.33% in the linked and year-ago periods. The efficiency ratio was 75.65% in the first quarter of 2026 compared to 74.96% and 67.19% in the linked and year-ago periods, respectively(2). (2) Non-GAAP financial metric. See “Notes on Non-GAAP Financial Measures” and non-GAAP reconciliation included herein for the most directly comparable financial measures. Net Income First quarter 2026 net income attributable to common shareholders was $2.4 million, or $0.38 per basic and diluted share, compared to a fourth quarter 2025 net loss attributable to common shareholders of $5.6 million, or $0.89 per basic share and $0.88 per diluted share, and first quarter 2025 net income of $3.0 million, or $0.48 per basic share and $0.47 per diluted share. Statement of Financial Condition As of March 31, 2026, the Company’s statement of financial condition reflects total assets of $1.42 billion, compared to $1.43 billion on December 31, 2025, and $1.50 billion on March 31, 2025. Loans totaled $895.2 million on March 31, 2026, decreasing $1.5 million or 0.2% during the first quarter of 2026 and $16.9 million or 1.9% from one year prior. Consumer and residential loans totaled $347.0 million on March 31, 2026, decreasing $7.3 million or 2.1% during the first quarter of 2026 and $24.0 million or 6.5% from one year prior. Commercial loans totaled $549.5 million on March 31, 2026, increasing $5.8 million or 1.1% during the first quarter of 2026 and $6.7 million or 1.2% from one year prior. Investment securities totaled $401.6 million on March 31, 2026, decreasing $11.6 million or 2.8% from the linked quarter and $42.5 million or 9.6% from the year-ago period. The decrease from December 31, 2025 was primarily due to $16.6 million of prepayments in mortgage obligation securities and $2.1 million of calls. The decrease from March 31, 2025 was primarily driven by $47.4 million in prepayments and $17.2 million in calls. With respect to liabilities, deposits totaled $1.21 billion on March 31, 2026, increasing $27.9 million or 2.4% during the first quarter of 2026 and decreasing $52.8 million or 4.2% from one year prior. The increase from December 31, 2025 reflects growth in MMDA deposits and both interest- and non-interest-bearing demand deposits, partially offset by runoff of higher-cost time deposits. The decrease from March 31, 2025 was primarily driven by runoff of higher-cost brokered deposits and time deposits, partially offset by growth in MMDA deposits and both interest- and non-interest-bearing demand deposits. Core deposits totaled $993.7 million on March 31, 2026, increasing $46.5 million or 4.9% during the first quarter of 2026 and increasing $3.5 million or 0.4% from one year prior. Shareholders’ equity totaled $123.6 million on March 31, 2026, increasing $1.1 million or 0.9% during the first quarter of 2026 and decreasing $1.3 million or 1.1% from one year prior. The increase from December 31, 2025 primarily reflected a $1.8 million increase in retained earnings, a $1.3 million decrease in accumulated other comprehensive loss (“AOCL”) and a $705,000 increase in additional paid in capital. Asset Quality The Company’s asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach. Nonperforming loans were $38.2 million, or 4.26% of total loans on March 31, 2026, compared to $27.6 million, or 3.07%, of total loans on December 31, 2025, and $13.2 million or 1.45% of total loans on March 31, 2025. The increase primarily reflected certain legacy loans associated with two commercial relationships that may have been less than 90 days delinquent but were identified as having unique risk characteristics through the Company’s 2025 portfolio review, and specific reserves for these exposures were established as appropriate prior to the first quarter of 2026. Net charge-offs (“NCOs”) after recoveries declined to $284,000, or an annualized 0.13% of average loans in the first quarter of 2026, from $604,000, or 0.27%, in the linked quarter and $340,000, or 0.15% in the year-ago period. First quarter 2026 NCOs benefited from $481,000 in recoveries in the first three months of the year, primarily attributed to one commercial loan relationship recovery of $312,500. A credit loss provision benefit of $168,000 was recorded in the first quarter of 2026, reflecting lower net charge offs and overall credit performance that resulted in a small reserve release in the first three months of this year. Provision for credit loss expense was $11.2 million in the linked quarter, reflecting a $10.8 million increase in the Company’s ACL in the period in conjunction with December 2025’s completion of the Company’s comprehensive commercial loan portfolio review. Provision expense was $457,000 in the year-ago period. The Company believes it is sufficiently collateralized and reserved, with an ACL of $29.0 million on March 31, 2026, compared to $29.4 million on December 31, 2025, and $17.4 million on March 31, 2025. As a percentage of total loans, ACL represented 3.24% on March 31, 2026, 3.28% on December 31, 2025, and 1.91% on March 31, 2025. Specific reserves, including those established in conjunction with 2025’s comprehensive commercial portfolio review, represented 63.8% of the Company’s ACL at the end of the first quarter of 2026. Liquidity The Company has diligently ensured a strong liquidity profile as of March 31, 2026 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership. The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.21 billion on March 31, 2026, compared to $1.18 billion on December 31, 2025, and $1.26 billion on March 31, 2026. Core deposits, as a percentage of total deposits, represented 82.01% on March 31, 2026, compared to 79.78% on December 31, 2025, and 78.31% on March 31, 2025. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability. On March 31, 2026, Pathfinder Bancorp had an available additional funding capacity of $138.5 million with the Federal Home Loan Bank of New York and $45.0 million with the Federal Reserve Bank, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $15.0 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend Declared On March 30, 2026, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock. In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by April 17, 2026 will be eligible for the dividend, which is scheduled for disbursement on May 8, 2026. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value. Evaluating the Company’s market performance, the closing stock price as of March 31, 2026 stood at $12.76 per share. This positions the annualized dividend yield at 3.13%. About Pathfinder Bancorp, Inc. Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com. Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, but are not limited to, statements regarding expected earnings normalization, future credit costs, the adequacy of the allowance for credit losses, reduced incremental reserve pressure, potential expansion of regulatory capital ratios, dividend sustainability, liquidity capacity, funding availability, and the Company’s business strategy and outlook for 2026 and beyond. Forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of numerous factors. Although it is not possible to identify all factors that may cause actual results to differ, such include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in prevailing interested rates; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; the risk that actual credit losses, borrower performance, collateral values, or loan migration patterns differ from management’s forward-looking estimates or assumptions; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels or changes in deposit mix that may necessitate increased borrowing to fund loans and investments; access to wholesale or other funding sources; operational risks including, cybersecurity, fraud, model risk and natural disasters; credit risk management; and the risk that the Company may not be successful in the implementation of its business strategy. Additional factors that could cause actual results to differ materially are described in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov. While the Company believes it has identified and discussed the material risks affecting its business, there may be additional risks and uncertainties not currently known or considered immaterial that could affect the forward-looking statements made herein. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of future results. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable law. Notes on Non-GAAP Financial Measures This release contains certain non-GAAP financial measures, including, but not limited to the efficiency ratio, pre-tax, pre-provision net income, tangible common equity, tangible book value per share, and return on average tangible common equity. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable GAAP measure. The Company believes these non-GAAP financial measures provide useful information to investors by assisting in the evaluation of the Company’s operating performance, operating efficiency, financial condition, and trends, and by facilitating comparisons with prior periods and with peer institutions. In particular, management uses these measures to assess expense control relative to revenue generation, underlying profitability excluding certain non-recurring or non-operational items, and capital strength on a basis that it believes is meaningful for internal planning and external analysis. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and should be considered only in conjunction with the Company’s GAAP financial results. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures within this release. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures. 2 Non-brokered deposits excluding certificates of deposit of $250,000 or more. 3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital. 4 Basic and diluted earnings per share are calculated based upon the two-class method. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity. 2 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms. 3 Revenue equals net interest income plus total noninterest income, less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, fair value adjustment to loans held-for-sale, and sales of assets. 4 Pre-tax, pre-provision net income equals revenue less total non-interest expense. 5 Efficiency ratio equals noninterest expense divided by revenue. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Executive Vice President, CFO Telephone: (315) 343-0057

Pathfinder enters 2026 with improved earnings outlook following a proactive comprehensive commercial loan review and corresponding risk-based reserve build OSWEGO, N.Y., Jan. 29, 2026 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the fourth quarter and full year ended December 31, 2025. The holding company for Pathfinder Bank (“the Bank”) reported a net loss attributable to common shareholders of $7.0 million, or $1.11 per diluted share, in the fourth quarter of 2025, and $3.4 million, or $0.54 per diluted share for full year 2025, reflecting an $11.2 million credit loss provision expense taken to build reserves following completion of a previously announced comprehensive review of the Bank’s commercial loan portfolio. Net income attributable to common shareholders was $626,000, or $0.10 per diluted share, in the third quarter of 2025, $3.9 million or $0.63 per diluted share in the fourth quarter of 2024, and $3.4 million, or $0.54 per diluted share for full year 2024. Fourth Quarter and Full Year 2025 Highlights and Key Developments The net loss resulted primarily from an $11.2 million credit loss provision expense in the quarter, reflecting a $10.8 million increase in the Company’s allowance for credit losses (“ACL”) to $29.4 million, or 3.28% of loans, at December 31, 2025. The risk-based reserve build reflects the Company’s forward-looking assessment of loans with unique risk characteristics identified through the comprehensive review of all commercial relationships with exposures of $500,000 or more, representing approximately 90% of the commercial portfolio, which was announced in October and completed in December 2025. The Company transferred $6.3 million in substandard loans associated with one local commercial relationship to held-for-sale status and recorded a pre-tax loss of $398,000, as a fourth quarter 2025 lower of cost or market adjustment (“LOCOM HFS adjustment”), based on active sale negotiations. Nonperforming loans totaled $27.6 million at December 31, 2025, compared to $23.3 million on September 30, 2025 and $22.1 million on December 31, 2024. Loans totaled $896.7 million at December 31, 2025, following the movement of $6.3 million in substandard loans to held-for-sale status, compared to $898.5 million on September 30, 2025 and $919.0 million on December 31, 2024. Commercial loans were $543.7 million or 60.6% of total loans at December 31, 2025, following the reclassification of loans to held-for-sale, compared to $543.7 million on September 30, 2025 and $539.7 million on December 31, 2024. Deposits totaled $1.18 billion at December 31, 2025, down from $1.23 billion on September 30, 2025 and $1.20 billion on December 31, 2024, primarily due to runoff of the Bank’s higher-cost brokered, and other time deposits. As a percentage of total deposits, core deposits expanded to 79.78% at December 31, 2025, compared to 78.37% on September 30, 2025 and 76.86% on December 31, 2024. Net interest income was $10.5 million and net interest margin (“NIM”) was 3.09% in the fourth quarter of 2025. For the linked quarter, net interest income was $11.6 million and NIM was 3.34%, including loan and investment prepayment penalties contributing a combined $260,000 to net interest income and 7 basis points to NIM. In the year-ago period, net interest income was $10.4 million and NIM was 3.02%. For the full year 2025, net interest income was $44.3 million and NIM was 3.21% compared to net interest income of $41.0 million and NIM of 2.98% in 2024. Noninterest income was $1.3 million for the fourth quarter 2025, including the LOCOM HFS adjustment’s $398,000 impact. Noninterest income was $1.5 million in the linked quarter and $4.9 million in the year-ago quarter including a $3.2 million gain from the insurance agency sold in October 2024. Noninterest expense of $9.2 million represented 2.51% of average assets on an annualized basis, for the fourth quarter of 2025 compared to $8.9 million or 2.40% of average assets in the linked quarter and $8.5 million or 2.33% of average assets in the year-ago quarter. For full-year 2025 and 2024, noninterest expense represented 2.36% and 2.37% of average assets, respectively. The efficiency ratio was 74.96% for the fourth quarter 2025, compared to 68.78% in the linked quarter and 72.25% in the year-ago quarter. For full-year 2025 and 2024, the efficiency ratio was 69.12% and 72.82%, respectively(1). Pre-tax, pre-provision (“PTPP”) net income was $3.1 million for the fourth quarter 2025, compared to $4.1 million in the linked quarter and $3.3 million in the year-ago quarter(1). Quarterly cash dividends payable to common stockholders of $0.10 per share were declared on December 22, 2025 and payable on February 6, 2026. “We believe the legacy commercial credit quality issues that have previously contributed to elevated earnings volatility have been substantially addressed following the completion of our comprehensive portfolio review,” President and Chief Executive Officer James Dowd said. “Our fourth quarter and full-year results reflect a meaningful, risk-based reserve build based on the Company’s forward-looking assessment of expected credit losses, following completion of the comprehensive loan portfolio review announced in October,” Dowd added. “This action is aligned with the more rigorous approach to managing credit risk that our current management team began implementing over a year ago, including enhanced portfolio monitoring, strengthened policy standards, more stringent underwriting criteria, and an increased focus on new commercial originations that emphasize profitable, full-service banking relationships with high-quality small- and mid-sized businesses, complementing our healthy local retail lending operations. We believe these actions position the Company to generate more consistent earnings during 2026, with reduced incremental reserve pressure, and support growth of the Company’s capital ratios in 2026. These actions also enhance our flexibility to prudently evaluate capital allocation alternatives over time and to deploy the Bank’s ample funding to support Central New York businesses and consumers, ultimately supporting the long-term creation of shareholder value.” Portfolio Review, Reserve Build, and Credit Culture Over a year ago, Pathfinder began taking significant steps to enhance its credit risk management processes, including a third quarter 2024 review of nonperforming commercial loans and purchased loan pools. In the third quarter of 2025, the Company recorded an increase in the ACL by 16.7% in conjunction with its decision to initiate a comprehensive review of every performing and nonperforming loan associated with all 198 commercial relationships having exposures of $500,000 or more, representing approximately 90% of the commercial loan portfolio. Upon completion of the comprehensive portfolio review in December 2025, the Company identified 47 legacy commercial relationships, with unique risk characteristics and an average principal balance of $1.9 million. Based on management’s forward-looking assessment of collateral dependent loans with unique risk characteristics and the expected credit losses associated with these relationships, the Company recorded an additional $11.4 million in provision for loans in the fourth quarter of 2025, increasing the ACL to $29.4 million, or 3.28% of total loans, as of December 31, 2025. Now, with measures taken in the fourth quarter of 2025 to substantially address legacy commercial credit issues, management is confident that it has the team, policies, procedures and culture in place to strengthen its commercial credit quality while maintaining the historic health of its consumer and residential loan portfolio. “Pathfinder has embraced an important cultural shift through the implementation of systemic changes to improve credit risk management,” explained Senior Vice President and Chief Credit Officer Joseph Serbun. “These changes include a team-based approach to dynamic and proactive monitoring of commercial loans and relationships, adherence to rigorous policy standards with limited exceptions, more stringent underwriting criteria, and enhanced structural processes designed to support stronger decision-making at origination and improve the lifetime performance of loans. In addition, we have dedicated personnel and resources focused exclusively on the loan workout process, enabling more focused and productive resolutions of problem credits, including the legacy relationships identified in our recently completed portfolio review.” Net Interest Income and Net Interest Margin Fourth quarter 2025 net interest income was $10.5 million, a decrease of $1.1 million, or 9.4%, from the third quarter of 2025. A decrease in interest and dividend income of $1.4 million in the fourth quarter of 2025 from the linked quarter was primarily attributed to greater interest and dividend income in the third quarter 2025 that benefited from $260,000 in loan and securities prepayment penalties in the linked quarter, as well as what the Company views as a temporary reduction of securities balances in the fourth quarter of 2025 and an average yield decrease of 30 basis points on all interest-earning assets. A 35 basis point decrease in average loan yields comparing the fourth quarter of 2025 to the linked quarter reflected an elevated third quarter 2025 average loan yield that benefited by 9 basis points from loan prepayment penalty income. A 20 basis point decrease in taxable securities average yield when comparing the fourth quarter of 2025 to the linked quarter reflected an elevated third quarter 2025 average yield that benefited by 5 basis points from investment prepayment penalty income. In addition, average balances of loans, taxable securities and tax-exempt securities declined by $1.8 million, $30.6 million and $194,000, respectively when comparing the fourth quarter of 2025 to the linked quarter. Decreases in income from loan interest, taxable securities, and tax-exempt securities of $816,000, $626,000, and $70,000, respectively, were partially offset by increases in income from dividends and federal funds sold of $39,000 and $31,000, respectively when comparing the fourth quarter of 2025 to the linked quarter. A decrease in interest expense in the fourth quarter of 2025 from the third quarter of 2025 of $352,000 was attributed to a 3 basis point decline in the average cost of total interest-bearing liabilities, including reductions of 3 basis points in the average cost of interest-bearing deposits reflecting lower average brokered and other time deposits outstanding, as well as a 3 basis point decrease in the average cost of borrowings and lower average borrowings outstanding. NIM was 3.09% in the fourth quarter of 2025, compared to 3.34% in the third quarter of 2025. The decrease of 25 basis points reflected an elevated third quarter 2025 NIM that benefited by 7 basis points from loan and investment prepayment penalties, as well as lower average interest-bearing deposit costs in the fourth quarter of 2025 and what the Company views as a temporary reduction of investment securities balances. Fourth quarter 2025 net interest income was $10.5 million, an increase of $133,000, or 1.3%, from the year-ago period. A decrease in interest and dividend income of $1.2 million was attributed to what management views as a temporary reduction of securities balances, as well as declines in the average yields on total interest-earning assets, loans, taxable investment securities, tax exempt investment securities, and fed funds sold and interest-earning deposits of 31 basis points, 13 basis points, 56 basis points, 54 basis points, and 316 basis points, respectively. Average loan balances also declined by $15.9 million from the year-ago period, with a corresponding decrease in loan interest income of $540,000. A decrease in interest expense of $1.4 million was primarily attributed to a 47 basis point decline in the average cost of total interest-bearing liabilities, including reductions of 44 basis points in the average cost of interest bearing deposits reflecting lower average brokered deposits outstanding, as well as 115 basis points decline in the average cost of borrowings and lower average borrowings outstanding. NIM was 3.09% in the fourth quarter of 2025, compared to 3.02% in the fourth quarter of 2024. NIM expansion in 2025 over the year-ago period was attributed to deliberate loan and deposit pricing adjustments, core deposit growth, and reduced borrowings, partially offset by lower earning asset yields. Noninterest Income Fourth quarter 2025 noninterest income includes a $398,000 lower of cost or market adjustment (“LOCOM HFS adjustment”) in connection with loans reclassified as held-for-sale. The Company is engaged in active sale negotiations with a potential buyer to sell substandard loans associated with one commercial relationship dating back to 2017. Fourth quarter 2025 noninterest income also includes a loss on the sale of premises and equipment of $37,000 for the disposal of a rental office property that was not occupied by the Bank and recently sold to a non-profit tenant, as well as a reduction of $115,000 for final settlement costs associated with the insurance agency business sold in October 2024. Fourth quarter 2025 noninterest income totaled $1.3 million, reflecting the LOCOM HFS adjustment, the loss on premises and equipment, and final settlement costs associated with the 2024 insurance agency sale. Third quarter 2025 noninterest income was $1.5 million. Fourth quarter 2024 noninterest income totaled $4.9 million including $3.2 million in pre-tax gains from the 2024 insurance agency sale. Compared to the linked quarter, fourth quarter 2025 noninterest income reflected decreases of $105,000 in debit card interchange fees, $56,000 in earnings and gain on BOLI, and $23,000 in service charges on deposit accounts. Compared to the linked quarter, fourth quarter 2025 noninterest income also reflected increases of $522,000 in net unrealized gains on marketable equity securities and $12,000 in gains on sales of loans and foreclosed real estate, a decrease of $9,000 in net realized losses on sales and redemptions of investment securities, and a decrease in loan servicing fees of $38,000. Compared to the year-ago period, fourth quarter 2025 noninterest income reflected an increase of $61,000 in earnings and gains on BOLI and decreases of $153,000 in debit card interchange fees and $24,000 in service charges on deposit accounts. In addition, fourth quarter 2025 noninterest income, compared to the year-ago period, included increases of $501,000 in net unrealized gains on marketable equity securities and $94,000 in gains on sales of loans and foreclosed real estate, an increase of $252,000 in net realized losses on sales and redemptions of investment securities, and a decrease of $21,000 in loan servicing fees. Noninterest Expense Noninterest expense totaled $9.2 million in the fourth quarter of 2025, increasing $213,000 from $8.9 million in the third quarter of 2025 and $606,000 from $8.5 million in the fourth quarter of 2024. Salaries and benefits were $4.9 million in the fourth quarter of 2025, decreasing $81,000 from the linked quarter and increasing $801,000 from the year-ago period. The decrease from the third quarter of 2025 was attributable to a $36,000 increase in FASB91 payroll deferrals resulting from increased loan originations and lower employee benefit expenses in the fourth quarter of 2025. The increase from the fourth quarter of 2024 was primarily driven by general salary increases and a change in workforce composition in 2025, as the Company strategically added more senior, key personnel across the organization. Building and occupancy costs were $1.3 million in the fourth quarter of 2025, decreasing $62,000 from the linked quarter and increasing $83,000 from the year-ago quarter. The decrease from the linked quarter reflected modest reductions across all building and occupancy expense categories, while the increase from the year-ago period was primarily attributed to higher periodic maintenance, utility and property tax expenses. Data processing expense was $698,000 in the fourth quarter of 2025, increasing $57,000 from the linked quarter and decreasing $23,000 from the year-ago period. The increase from the linked quarter reflected higher costs primarily associated with check and ATM processing charges, while the decrease from the year-ago period was driven by lower data processing supplies, ATM processing, and internet banking service expenses. Other expenses were $798,000 in the fourth quarter of 2025, increasing $196,000 from the linked quarter and $54,000 from the year-ago period. The fourth quarter 2025 increase primarily related to fees on the loans held- for-sale. Annualized noninterest expense represented 2.51% of average assets in the fourth quarter of 2025, compared to 2.40% and 2.33% in the linked and year-ago periods. The efficiency ratio was 74.96% in the fourth quarter of 2025 compared to 68.78% and 72.25% in the linked and year-ago periods, respectively(2). Net Income For the fourth quarter of 2025, net loss attributable to common shareholders was $7.0 million, or $1.12 per basic share and $1.11 per diluted share, compared to net income available to common shareholders of $626,000, or $0.10 per basic and diluted share, in the linked quarter and $3.9 million or $0.63 per basic and diluted share in the year-ago period. Statement of Financial Condition As of December 31, 2025, the Company’s statement of financial condition reflects total assets of $1.43 billion, compared to $1.47 billion on each of September 30, 2025 and December 31, 2024. Loans totaled $896.7 million on December 31, 2025, following the $6.3 million reclassification of substandard loans to held-for-sale, decreasing $1.9 million or 0.2% during the fourth quarter 2025 and $22.3 million or 2.4% from one year prior. Consumer and residential loans totaled $354.3 million on December 31, 2025, decreasing $1.8 million or 0.5% during the fourth quarter 2025 and $26.6 million or 7.0% from one year prior. Commercial loans totaled $543.7 million on December 31, 2025, following the movement of loans to held-for-sale, in line with outstanding balances on September 30, 2025 and decreasing $4.0 million or 0.7% from one year prior. Investment securities totaled $413.2 million on December 31, 2025, decreasing $29.2 million or 6.6% in the fourth quarter 2025. The decrease from the linked quarter reflects $10.0 million in calls and $19.2 million of maturities and scheduled amortization. Investment securities decreased by $18.9 million, or 4.4%, from December 31, 2024. With respect to liabilities, deposits totaled $1.18 billion on December 31, 2025, decreasing $41.2 million or 3.4% during the fourth quarter 2025 and $20.7 million or 1.7% from one year prior. The decrease from the linked quarter reflects runoff of the Bank’s higher-cost brokered deposits, and decreases in both MMDA and time deposits. The decrease from the previous year was primarily driven by runoff of the Bank’s higher-cost brokered deposits and lower time deposits, partially offset by higher MMDA deposits. Shareholders’ equity totaled $121.0 million on December 31, 2025, decreasing $5.4 million or 4.3% in the fourth quarter 2025 and $516,000 or 0.4% from one year prior. The fourth quarter 2025 decrease primarily reflected a $7.7 million decrease in retained earnings, partially offset by a $1.9 million decrease in accumulated other comprehensive loss (“AOCL”) and a $416,000 increase in additional paid in capital. Asset Quality The Company’s asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach. Nonperforming loans were $27.6 million, or 3.07% of total loans on December 31, 2025, compared to $23.3 million or 2.59% on September 30, 2025, and $22.1 million or 2.40% on December 31, 2024. The increase primarily reflected certain legacy commercial loans moving to nonperforming status, including loans that may have been less than 90 days delinquent but were identified as having unique risk characteristics through the Company’s 2025 portfolio review. Net charge-offs (“NCOs”) after recoveries declined to $604,000, or an annualized 0.27% of average loans in the fourth quarter of 2025, from $670,000 or 0.30% in the linked quarter and $1.0 million or 0.44% in the year-ago period. Provision for credit loss expense was $11.2 million in the fourth quarter of 2025, reflecting the $10.8 million increase in the Company’s ACL in the fourth quarter of 2025 in conjunction with December’s completion of the Company’s previously announced portfolio review. The provision was $3.5 million and $988,000 in the linked and year-ago quarters, respectively. The Company believes it is sufficiently collateralized and reserved, with an ACL of $29.4 million on December 31, 2025, compared to $18.7 million on September 30, 2025 and $17.2 million on December 31, 2024. As a percentage of total loans, ACL represented 3.28% on December 31, 2025, 2.08% on September 30, 2025, and 1.88% on December 31, 2024. Liquidity The Company has diligently ensured a strong liquidity profile as of December 31, 2025 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership. The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.18 billion on December 31, 2025, compared to $1.23 billion on September 30, 2025 and $1.20 billion on December 31, 2024. Core deposits represented 79.78% of total deposits on December 31, 2025, compared to 78.37% of total deposits on September 30, 2025 and 76.86% on December 31, 2024. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability. On December 31, 2025, Pathfinder Bancorp had an available additional funding capacity of $157.5 million with the Federal Home Loan Bank of New York and $13.5 million with the Federal Reserve Bank, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $15.0 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend Declared On December 22, 2025, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock. In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders as of January 16, 2026 will be eligible for the dividend, which is scheduled for disbursement on February 6, 2026. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value. Evaluating the Company’s market performance, the closing stock price as of December 31, 2025 stood at $14.11 per share. This positions the annualized dividend yield at 2.83%. About Pathfinder Bancorp, Inc. Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com. Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, but are not limited to, statements regarding expected earnings normalization, future credit costs, the adequacy of the allowance for credit losses, reduced incremental reserve pressure, potential expansion of regulatory capital ratios, dividend sustainability, liquidity capacity, funding availability, and the Company’s business strategy and outlook for 2026 and beyond. Forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of numerous factors. Although it is not possible to identify all factors that may cause actual results to differ, such include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in prevailing interested rates; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; the risk that actual credit losses, borrower performance, collateral values, or loan migration patterns differ from management’s forward-looking estimates or assumptions; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels or changes in deposit mix that may necessitate increased borrowing to fund loans and investments; access to wholesale or other funding sources; operational risks including, cybersecurity, fraud, model risk and natural disasters; credit risk management; and the risk that the Company may not be successful in the implementation of its business strategy. Additional factors that could cause actual results to differ materially are described in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website, www.sec.gov. While the Company believes it has identified and discussed the material risks affecting its business, there may be additional risks and uncertainties not currently known or considered immaterial that could affect the forward-looking statements made herein. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of future results. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable law. Notes on Non-GAAP Financial Measures This release contains certain non-GAAP financial measures, including, but not limited to the efficiency ratio, pre-tax, pre-provision net income, tangible common equity, tangible book value per share, and return on average tangible common equity. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable GAAP measure. The Company believes these non-GAAP financial measures provide useful information to investors by assisting in the evaluation of the Company’s operating performance, operating efficiency, financial condition, and trends, and by facilitating comparisons with prior periods and with peer institutions. In particular, management uses these measures to assess expense control relative to revenue generation, underlying profitability excluding certain non-recurring or non-operational items, and capital strength on a basis that it believes is meaningful for internal planning and external analysis. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and should be considered only in conjunction with the Company’s GAAP financial results. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures within this release. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC (“Agency”) the Company is required to consolidate 100% of the Agency within the consolidated financial statements. The Company sold its 51% membership interest in the Agency in October 2024. 2 The Q4 2024 $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company’s 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest. The Q4 2025 $115,000 consolidated loss on asset sale represents final settlement costs related to the sale of the Agency. 3 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations. 4 Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures. 2 Non-brokered deposits excluding certificates of deposit of $250,000 or more. 3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital. 4 Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares. 5 Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity 2 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms. 3 Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, and gains/(losses) on sales of assets 4 Pre-tax, pre-provision net income equals revenue less total non-interest expense 5 Efficiency ratio equals noninterest expense divided by revenue The above information is unaudited and preliminary based on the Company's data available at the time of presentation. Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Executive Vice President, CFO Telephone: (315) 343-0057

Results reflect ongoing efforts to mitigate credit risk and enhance asset quality metrics for the long term, as well as the continued growth of Pathfinder’s core deposit franchise, deliberate liability pricing, net interest margin resilience, and operating expense discipline OSWEGO, N.Y., Oct. 30, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the third quarter ended September 30, 2025. The holding company for Pathfinder Bank (“the Bank”) reported net income attributable to common shareholders of $626,000, or $0.10 per diluted share in the third quarter of 2025, compared to $31,000 or less than $0.01 per diluted share in the second quarter of 2025. The Company recorded a net loss attributable to common shareholders of $4.6 million or $0.75 per share in the third quarter of 2024. Third Quarter 2025 Highlights and Key Developments Provision expense was $3.5 million, compared to $1.2 million in the quarter ended June 30, 2025 (the "linked quarter") and $9.0 million in the year-ago period, reflecting proactive measures that remain ongoing to mitigate credit risk and enhance asset quality metrics for the long term. These include a prudent increase in reserves during the third quarter of 2025, in conjunction with an ongoing comprehensive portfolio review that the Company initiated in September, encompassing performing and nonperforming loans of $500,000 or more, representing approximately 90% of all outstandings. This review is expected to be completed by the end of 2025. Allowance for credit losses increased to $18.7 million at period end, increasing $2.7 million during the third quarter and $1.4 million from September 30, 2024. Net charge offs (“NCOs”) were $670,000 in the third quarter of 2025, declining 74.2% from the linked quarter and 92.3% from the year-ago period. Loans totaled $898.5 million at period end, compared to $909.7 million on June 30, 2025, and $921.7 million on September 30, 2024. Commercial loans were $543.7 million or 60.5% of total loans at period end, compared to $549.1 million on June 30, 2025, and $534.5 million on September 30, 2024. Total deposits grew to $1.23 billion at period end, compared to $1.22 billion on June 30, 2025, and $1.20 billion on September 30, 2024. During the third quarter of 2025, total balances increased on growth in core deposits, more than offsetting reductions in higher-cost time deposits. Core deposits grew to $960.1 million, or 78.37% of total deposits at period end, from $958.8 million on June 30, 2025, and $926.4 million on September 30, 2024. Net interest income was $11.6 million and net interest margin (“NIM”) was 3.34%, including loan and investment prepayment penalties contributing a combined $260,000 to net interest income and 7 basis points to NIM. For the linked quarter, net interest income and NIM were $10.8 million and 3.11%, respectively. In the year-ago period, a catch-up interest payment contributed $887,000 to net interest income of $11.7 million and 25 basis points to NIM of 3.34%. Noninterest income was $1.5 million, including a net death benefit of $32,000 on bank owned life insurance (“BOLI”). For the linked quarter, noninterest income was negative $1.5 million, including a pre-tax loss of $3.1 million recorded as a lower of cost or market adjustment to loans held for sale (“LOCOM HFS adjustment”). In the year-ago period, noninterest income was $1.7 million, including a net death benefit of $175,000 on BOLI. The efficiency ratio was 68.77%, compared to 65.66% in the linked quarter and 75.78% in the year-ago period. The efficiency ratio, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. Pre-tax, pre-provision (“PTPP”) net income was $4.1 million, compared to $4.2 million in the linked quarter and $3.3 million in the year-ago period. PTPP net income, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses. “Recent asset quality related to certain legacy loans has resulted in unacceptable levels of credit volatility,” said President and Chief Executive Officer James A. Dowd. “We’re committed to advancing our dynamic credit risk management framework, emphasizing enhanced portfolio analytics, rigorous policy standards, stringent underwriting criteria, and a measured approach to new loan production that favors local consumer and small and mid-sized businesses lending over highly concentrated credit relationships. In addition, we initiated a new, comprehensive review of the entire loan portfolio, scheduled to be completed by year end, which we believe will enable us to make significant strides toward reducing the volatility of credit costs in 2026 and beyond, clearing a path for consistent and sustainable improvement in earnings over time.” Dowd added, “Third quarter results also underscore the benefits of our disciplined approach to balance sheet management. We’ve made steady progress in expanding Pathfinder’s core deposit base across our Oswego and Onondaga county markets with a deliberate approach to pricing, providing the Bank with a stable, relationship-driven source of funding to support community-based lending.” Net Interest Income and Net Interest Margin Third quarter 2025 net interest income was $11.6 million, an increase of $786,000, or 7.3%, from the second quarter of 2025. An increase in interest and dividend income of $554,000 from the linked quarter was attributed to an average yield increase of 16 basis points on all interest-earning assets. A 34 basis point increase in loan yields included a 9 basis point benefit from $200,000 in loan prepayment penalty income in the third quarter of 2025. An overall 14 basis point decrease in taxable securities yield included a 5 basis point benefit from $60,000 in investment prepayment penalty income in the third quarter of 2025. In addition, average balances of loans, taxable securities and tax-exempt securities declined by $4.6 million, $3.8 million and $334,000, respectively. The increases in loan interest income, dividends, and federal funds sold and interest-earning deposits were $693,000, $23,000, and $63,000, respectively, partially offset by decreases in taxable and tax-exempt securities income of $215,000 and $10,000, respectively. A decrease in interest expense from the second quarter of 2025 of $232,000 was primarily attributed to a 7 basis point decline in the average cost of total interest-bearing liabilities, highlighted by a 10 basis point reduction in the cost of interest-bearing deposits that resulted from the Bank’s deliberate pricing adjustments. NIM was 3.34% in the third quarter of 2025, compared to 3.11% in the second quarter of 2025. The increase of 23 basis points reflected lower average interest-bearing deposit costs in the third quarter of 2025, as well as 7 basis points attributed to prepayment penalty income. Third quarter 2025 net interest income was $11.6 million, a decrease of $132,000, or 1.1%, from the year-ago period, or an increase of $755,000, or 7.0%, when excluding an $887,000 third quarter 2024 catch-up interest payment associated with purchased loan pool positions. A decrease in interest and dividend income of $1.5 million was attributed to the third quarter 2024 catch-up interest payment, as well as declines in the average yield on total interest-bearing assets, loans, and fed funds sold and interest-bearing deposits of 36 basis points, 22 basis points, and 148 basis points, respectively. Average loan balances also declined by $7.7 million from the year-ago period, with a corresponding decrease in loan interest income of $626,000. A decrease in interest expense of $1.3 million was primarily attributed to a 45 basis point decline in the average cost of total interest-bearing liabilities, highlighted by a 39 basis point reduction in the cost of interest bearing deposits, as well as paydowns of brokered deposits and borrowings utilizing a portion of the low-cost liquidity provided by core deposits acquired as part of last year’s East Syracuse branch transaction. NIM was 3.34% in the third quarter of 2025 with 7 basis points attributed to prepayment penalty income, compared to 3.34% in the third quarter of 2024 with 25 basis points from the catch-up interest payment received in the third quarter of 2024. As a result of the declining rate environment and the 2024 East Syracuse branch acquisition, NIM reflected lower average deposit and borrowing costs in the third quarter of 2025, offset by lower average yields on earning assets, as compared to the year-ago period. Noninterest Income Third quarter 2025 noninterest income totaled $1.5 million. In the linked quarter, noninterest income was negative $1.5 million, reflecting a pre-tax loss of $3.1 million on the sale of nonperforming and classified loans recorded as a second quarter 2025 LOCOM HFS adjustment. In the year-ago period, noninterest income was $1.7 million, including $367,000 in third quarter 2024 revenue from the insurance agency business sold in October 2024. Compared to the linked quarter, third quarter 2025 noninterest income reflected increases of $130,000 in earnings and gain on BOLI driven by a $32,000 net death benefit, as well as the timing of new policy purchases and like-kind exchanges of existing policies. In addition, third quarter 2025 noninterest income, compared to the linked quarter, included increases in debit card interchange fees of $37,000 and service charges on deposit accounts of $24,000. Compared to the linked quarter, third quarter 2025 noninterest income also reflected gains on sales of loans and foreclosed real estate of $38,000, an increase in loan servicing fees of $16,000, a decrease of $275,000 in net unrealized gains on marketable equity securities, and a $12,000 increase in net realized losses on sales and redemptions of investment securities. Compared to the third quarter of 2024, noninterest income reflected a decrease of $75,000 in earnings and gains on BOLI. The decline reflects the impact of new BOLI policy purchases made during the current year and differences in net death benefits recorded in the third quarter of 2025 and the year-ago period of $32,000 and $175,000, respectively. In addition, third quarter 2025 noninterest income, compared to the year-ago period, included a $12,000 increase in service charges on deposit accounts and a decrease of $83,000 in debit card interchange fees. Compared to the year-ago period, third quarter 2025 noninterest income also reflected increases of $83,000 in net unrealized gains on marketable equity securities, $34,000 in loan servicing fees, and $31,000 in gains on sales of loans and foreclosed real estate, as well as a decrease of $176,000 in net realized losses on sales and redemptions of investment securities. Noninterest Expense Noninterest expense totaled $8.9 million in the third quarter of 2025, increasing $875,000 from $8.1 million in the linked quarter and decreasing $1.3 million from $10.3 million in the year-ago period. The decrease from the year-ago period was primarily due to $1.6 million in one-time transaction-related expenses for last year’s East Syracuse branch acquisition, in addition to $308,000 in costs associated with the insurance agency business sold in October 2024. Salaries and benefits were $5.0 million in the third quarter of 2025, increasing $480,000 from the linked quarter and $46,000 from the year-ago period. The increase from the second quarter of 2025 was due to one additional workday in the quarter driving an additional $100,000 of salaries, an increase in medical claims of $146,000 expected to be reimbursed by stop loss insurance, an increase in retirement plan costs of $89,000, as well as an increase of $152,000 related to reduced salary deferrals linked to reduced loan origination activities. The increase of $46,000 from the year-ago period was primarily due to an increase in medical claims expected to be reimbursed by stop loss insurance. Building and occupancy was $1.4 million in the third quarter of 2025, increasing $169,000 from the linked quarter and $265,000 from the year-ago quarter. The increase from the linked quarter reflected a $133,000 increase due to periodic building maintenance, as well as increases in property taxes of $17,000 and utilities costs of $7,000. The increase from the year-ago period was primarily due to a $121,000 increase in building maintenance during the third quarter of 2025, and higher costs related to building and land leases, property taxes, and utilities of $54,000, $46,000, and $27,000, respectively. These increases from the year-ago period were primarily due to timing of ongoing facilities-related costs associated with operating the East Syracuse branch acquired early in the third quarter of 2024. Data processing expense was $641,000 in the third quarter of 2025, decreasing $26,000 from the linked quarter and $31,000 from the year-ago period. The decrease from the linked quarter reflects lower costs primarily associated with check and ATM processing charges. The decrease from the year-ago period was driven by decreases of $78,000 in data processing supplies and $24,000 in ATM processing costs, partially offset by year-over-year increases in recurring data processing costs amounting to $71,000, primarily due to software upgrades completed as part of the Company’s ongoing technology modernization initiatives. FDIC assessment expense was $171,000 in the third quarter of 2025 and zero in the linked quarter due to modest over-accruals in prior periods, compared to $228,000 in the year-ago period. Annualized noninterest expense represented 2.40% of average assets in the third quarter of 2025, compared to 2.18% and 2.75% in the linked and year-ago periods. The efficiency ratio was 68.77%, compared to 65.66% and 75.78% in the linked and year-ago periods, respectively. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. Net Income For the third quarter of 2025, net income attributable to common shareholders was $626,000, or $0.10 per basic and diluted share. Linked quarter net income was $31,000, or less than $0.01 per basic and diluted share. For the third quarter of 2024 the company reported a net loss of $4.6 million or $0.75 per basic and diluted share. Statement of Financial Condition As of September 30, 2025, the Company’s statement of financial condition reflects total assets of $1.47 billion, compared to $1.51 billion and $1.48 billion recorded on June 30, 2025, and September 30, 2024, respectively. Loans totaled $898.5 million on September 30, 2025, decreasing $11.2 million or 1.2% during the third quarter and $23.1 million or 2.5% from one year prior. Consumer and residential loans totaled $356.2 million on September 30, 2025, decreasing $6.0 million or 1.6% during the third quarter and $32.5 million or 8.4% from one year prior. Commercial loans totaled $543.7 million on September 30, 2025, decreasing $5.4 million or 1.0% during the third quarter and increasing $9.2 million or 1.7% from one year prior. With respect to liabilities, deposits totaled $1.23 billion on September 30, 2025, increasing 0.3% during the third quarter and 2.4% from one year prior. Shareholders’ equity totaled $126.3 million on September 30, 2025, increasing $1.9 million or 1.5% in the third quarter and increasing $6.1 million or 5.1% from one year prior. The third quarter 2025 increase primarily reflects a $1.6 million decrease in accumulated other comprehensive loss (“AOCL”), a $4,000 decrease in retained earnings, and a $329,000 increase in additional paid in capital. Noncontrolling interest, previously included in equity in the Statements of Financial Condition, was eliminated in October 2024 upon the sale of the Company’s 51% insurance agency ownership interest. Asset Quality The Company’s asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach. Nonperforming loans were $23.3 million, or 2.59% of total loans on September 30, 2025, compared to $11.7 million or 1.28% on June 30, 2025, and $16.2 million or 1.75% on September 30, 2024. The increase is the result of two loans associated with two local commercial relationships dating back to 2021 moving to nonperforming status. NCOs after recoveries declined to $670,000, or an annualized 0.30% of average loans in the third quarter of 2025, from $2.6 million or 1.14% in the linked quarter and $8.7 million or 3.82% in the year-ago period. Provision for credit loss expense was $3.5 million in the third quarter of 2025, reflecting an increase in credit loss reserves in the period. The increase is the result of two large commercial real estate relationships. The provision was $1.2 million and $9.0 million in the linked and year-ago quarters, respectively. The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses (“ACL”) of $18.7 million on September 30, 2025, compared to $16.0 million on June 30, 2025, and $17.3 million on September 30, 2024. As a percentage of total loans, ACL represented 2.08% on September 30, 2025, 1.76% on June 30, 2025, and 1.87% on September 30, 2024. Liquidity The Company has diligently ensured a strong liquidity profile as of September 30, 2025 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership. The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.23 billion on September 30, 2025, compared to $1.22 billion on June 30, 2025, and $1.20 billion on September 30, 2024. Core deposits represented 78.37% of total deposits on September 30, 2025, compared to 78.47% on June 30, 2025, and 77.45% on September 30, 2024. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability. On September 30, 2025, Pathfinder Bancorp had an available additional funding capacity of $138.3 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $53.3 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend Declared On September 29, 2025, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock. In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by October 17, 2025 will be eligible for the dividend, which is scheduled for disbursement on November 7, 2025. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value. Evaluating the Company’s market performance, the closing stock price as of September 30, 2025 stood at $15.68 per share. This positions the annualized dividend yield at 2.55%. About Pathfinder Bancorp, Inc. Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com. Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov. This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial measure. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC (“Agency”) the Company is required to consolidate 100% of the Agency within the consolidated financial statements. The Company sold its 51% membership interest in the Agency in October 2024. 2 The $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company’s 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest. 3 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations. 4 Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures. 2 Non-brokered deposits excluding certificates of deposit of $250,000 or more. 3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital. 4 Includes 11 full-service branches and one motor bank for periods after June 30, 2024. Includes 10 full-service branches and one motor bank for all periods prior. 5 Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares. 6 Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity 2 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms. 3 Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, and a gain on the October 2024 sale of the Company's insurance agency asset 4 Pre-tax, pre-provision net income equals revenue less total non-interest expense 5 Efficiency ratio equals noninterest expense divided by revenue The above information is unaudited and preliminary based on the Company's data available at the time of presentation. Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Senior Vice President, CFO Telephone: (315) 343-0057

Results reflect July 2025 sale of $9.3 million in nonperforming and classified loans, undertaken as part of the Company’s ongoing efforts to mitigate credit risk and enhance asset quality metrics for the long term, as well as operating expense discipline, commercial loan growth and an improved core deposit ratio OSWEGO, N.Y., July 30, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the second quarter ended June 30, 2025. The holding company for Pathfinder Bank (“the Bank”) reported net income attributable to common shareholders of $31,000, or less than $0.01 per diluted share in the second quarter of 2025, compared to $3.0 million or $0.47 per diluted share in the first quarter of 2025 and $2.0 million or $0.32 per share in the second quarter of 2024. Second Quarter 2025 Highlights and Key Developments The Company continued to undertake proactive measures in the second quarter to mitigate credit risk and enhance asset quality metrics for the long term. These included the July 2025 sale of $9.3 million in nonperforming and classified loans associated with one local commercial relationship for a pre-tax loss of $3.1 million recorded as a second quarter 2025 lower of cost or market adjustment to loans held for sale (“LOCOM HFS adjustment”), representing $0.40 per diluted share net of tax, as well as $2.6 million in net charge offs (“NCOs”) that are reflected in provision expense of $1.2 million. Nonperforming loans declined to $11.7 million at period end, improving by 11.7% during the second quarter and 52.3% from June 30, 2024. Nonperforming loans also declined to 1.28% of total loans at period end, improving from 1.45% on March 31, 2025 and 2.76% on June 30, 2024. Total deposits were $1.22 billion at period end, compared to $1.26 billion on March 31, 2025 and $1.10 billion on June 30, 2024. During the second quarter of 2025, total balances declined on reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality. Core deposits grew to 78.47% of total deposits at period end from 78.31% on March 31, 2025 and 67.98% on June 30, 2024. Total loans were $909.7 million at period end, reflecting the move of $3.2 million in balances to held-for-sale status for the July 2025 sale of nonperforming and classified loans, compared to $912.2 million on March 31, 2025 and $888.3 million on June 30, 2024. Commercial loans grew to $549.1 million or 60.4% of total loans at period end, compared to $542.7 million on March 31, 2025 and $527.2 million on June 30, 2024. Net interest income was $10.8 million and net interest margin (“NIM”) was 3.11% in the second quarter of 2025. Linked quarter results reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees, adding approximately $347,000 to net interest income of $11.4 million and 10 basis points to NIM of 3.31%. Second quarter 2024 net interest income was $9.5 million and NIM was 2.78%. The efficiency ratio was 65.66%, compared to 67.19% in the linked quarter and 74.36% in the year-ago period. The efficiency ratio, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. Pre-tax, pre-provision (“PTPP”) net income was $4.2 million, compared to $4.2 million in the linked quarter and $2.8 million in the year-ago period. PTPP net income, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses. “Pathfinder’s more exacting approach to proactive credit risk mitigation continues to be implemented, with measures taken to proactively address certain loans experiencing credit deterioration resulting in elevated charge offs and the sale of nonperforming and classified commercial loans associated with a single in-market commercial relationship,” said President and Chief Executive Officer James A. Dowd. “These steps were taken as part of our ongoing efforts to enhance Pathfinder’s asset quality and resilience over the long term.” Dowd added, “Growing our Central New York core deposit franchise remains an ongoing area of focus, as it continues to serve as a valuable source of low-cost funding for local, relationship-based lending opportunities with small- and middle-market businesses and consumers in our attractive regional markets.” Net Interest Income and Net Interest Margin Second quarter 2025 net interest income was $10.8 million, a decrease of $597,000, or 5.2%, from the first quarter of 2025. The decrease from the linked quarter was due in part to approximately $347,000 of first quarter 2025 net interest income attributed to 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees. A decrease in interest and dividend income of $259,000 from the linked quarter was attributed to average yield decreases of 22 basis points on loans, which benefited by 15 basis points from 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees in the first quarter of 2025. The interest and dividend income decrease was also attributed to 5 basis points on fed funds sold and interest-earning deposits, and 11 basis points on all interest-earning assets, partially offset by average yield increases on taxable and tax-exempt securities of 3 and 76 basis points, respectively. In addition, average loan balances declined by $4.9 million, while average balances of lower-yielding taxable securities increased by $18.5 million. The corresponding decrease in loan interest income and federal funds sold and interest-earning deposits was $566,000 and $21,000, respectively, partially offset by increases in taxable and tax-exempt securities income of $337,000 and $63,000, respectively. An increase in interest expense from the first quarter of 2025 of $338,000 was primarily attributed to a 5 basis point increase in the average cost of interest bearing deposits. Net interest margin was 3.11% in the second quarter of 2025 compared to 3.31% in the first quarter 2025. The decrease of 20 basis points reflected lower average loan yields and higher average interest bearing deposit costs in the second quarter of 2025, as well as approximately 10 basis points of first quarter 2025 margin attributed to 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees. Second quarter 2025 net interest income was $10.8 million, an increase of $1.3 million, or 14.1%, from the second quarter of 2024. An increase in interest and dividend income of $160,000 was primarily attributed to average yield increases of 11 basis points on loans and a $25.9 million increase in average loan balances. The corresponding increase in loan interest income was $617,000. A decrease in interest expense of $1.2 million was attributed to reductions in the average cost of interest bearing deposits and total interest-bearing liabilities of 40 basis points and 45 basis points, respectively, as well as reductions in brokered deposits and short-term borrowings expense associated with paydowns of brokered deposits and borrowings utilizing a portion of the low-cost liquidity provided by core deposit growth. Net interest margin was 3.11% in the second quarter of 2025 compared to 2.78% in the second quarter of 2024. The increase of 33 basis points reflected higher average loan yields and lower average deposit and borrowing costs in the second quarter of 2025, as compared to the year-ago period. Noninterest Income Second quarter 2025 noninterest income includes the $3.1 million LOCOM HFS adjustment, with an after-tax effect of $2.5 million or $0.40 per diluted share. Nonperforming and classified loans associated with one local commercial relationship dating back to 2013, with an original principal balance of $9.3 million and a June 30, 2025 principal balance of $6.3 million were sold in July 2025 for $3.2 million to an undisclosed financial buyer. Second quarter 2025 noninterest income totaled negative $1.5 million, reflecting the $3.1 million LOCOM HFS adjustment, and no longer includes contributions from the insurance agency business sold in October 2024. Noninterest income was $1.2 million in the linked quarter and $1.2 million, including $260,000 in insurance revenue, in the year-ago period. Compared to the linked quarter, second quarter 2025 noninterest income reflected increases of $179,000 in debit card interchange fees and $6,000 in service charges on deposit accounts, as well as a decrease of $6,000 in earnings and gain on bank owned life insurance (“BOLI”). Compared to the linked quarter, second quarter 2025 noninterest income also reflected increases of $202,000 in net unrealized gains on marketable equity securities, as well as decreases of $8,000 in net realized losses on sales and redemptions of investment securities and $4,000 in loan servicing fees. Compared to the year-ago period, second quarter 2025 noninterest income included increases of $50,000 in service charges on deposit accounts, as well as decreases of $11,000 in earnings and gain on BOLI, and $11,000 in debit card interchange fees. Compared to the year-ago period, second quarter 2025 noninterest income also reflected an increase of $559,000 in net unrealized gains on marketable equity securities, as well as decreases of $16,000 in net realized gains on sales and redemptions of investment securities and $15,000 in loan servicing fees. Noninterest Expense Noninterest expense totaled $8.1 million in the second quarter of 2025, including $595,000 in costs associated with the East Syracuse branch acquired in July 2024 and excluding costs for the insurance agency business sold in October 2024. Noninterest expense was $8.4 million in the linked quarter, including East Syracuse branch costs of $577,000, and $7.9 million in the year-ago period, including insurance agency costs of $232,000. Salaries and benefits were $4.5 million in the second quarter of 2025, in line with the linked quarter and increased $126,000 from the year-ago period. The increase from the second quarter of 2024 was primarily attributed to the July 2024 East Syracuse Branch Acquisition, which had $116,000 of total salary and benefit expenses in the second quarter of 2025. Excluding the East Syracuse branch, salaries and benefits increased $10,000 from the year-ago period. This increase from the second quarter of 2024 was primarily attributed to a $183,000 increase in stock-based compensation, partially offset by a $106,000 decrease in employee benefits, a $51,000 decrease in salaries and benefits expenses, and a $16,000 decrease in director compensation. Building and occupancy was $1.2 million in the second quarter of 2025, decreasing $117,000 from the linked quarter and increasing $316,000 from the year-ago quarter. The decrease from the linked quarter reflected lower costs associated with building maintenance primarily related to snow removal. The increase from the first quarter of last year was primarily due to ongoing facilities-related costs associated with operating the East Syracuse branch acquired in July 2024. Data processing expense was $667,000 in the second quarter of 2025, in line with the linked quarter and increasing $117,000 from the year-ago period. The increase from the second quarter of 2024 was primarily attributed to the ongoing operations of the East Syracuse branch acquired in July 2024. No FDIC assessment expense was recorded in the second quarter of 2025, due to modest over-accruals in prior periods, compared to $229,000 and $228,000 in the linked and year-ago periods, respectively. The Company anticipates more normalized FDIC assessments in the future and expects this expense to range between $220,000 to $230,000 per quarter in the second half of 2025. Annualized noninterest expense represented 2.18% of average assets in the second quarter of 2025, compared to 2.33% and 2.19% in the linked and year-ago periods. The efficiency ratio was 65.66%, compared to 67.19% and 74.36% in the linked and year-ago periods, respectively. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. Net Income For the second quarter of 2025, net income attributable to common shareholders was $31,000, or less than $0.01 per basic and diluted share. Linked quarter net income was $3.0 million, or $0.48 per basic share and $0.47 per diluted share. Second quarter 2024 net income totaled $2.0 million or $0.32 per basic and diluted share. Statement of Financial Condition As of June 30, 2025, the Company’s statement of financial condition reflects total assets of $1.51 billion, compared to $1.50 billion and $1.45 billion recorded on March 31, 2025 and June 30, 2024, respectively. Loans totaled $909.7 million on June 30, 2025, after $3.2 million in balances were moved to held-for-sale status for the July 2025 sale of nonperforming and classified loans, resulting in a decrease of $2.4 million or 0.3% from March 31, 2025. Total loans increased $21.5 million or 2.4% from one year prior. Consumer and residential loans totaled $362.1 million, decreasing 2.4% during the second quarter and increasing 0.2% from one year prior. Commercial loans totaled $549.1 million, increasing 1.2% during the second quarter and 4.1% from one year prior, despite the recent loan sale. With respect to liabilities, deposits totaled $1.22 billion on June 30, 2025, decreasing 3.4% on reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality, during the second quarter and increasing 11.0% from one year prior. Shareholders' equity totaled $124.4 million on June 30, 2025, decreasing $483,000 or 0.4% in the second quarter and increasing $1.1 million or 0.9% from one year prior. The second quarter 2025 decrease primarily reflects a $599,000 decrease in retained earnings, a $426,000 decrease in accumulated other comprehensive loss (“AOCL”), and a $542,000 increase in additional paid in capital. Noncontrolling interest, previously included in equity on the Statements of Financial Condition, was eliminated in October 2024 upon the sale of the Company's 51% insurance agency ownership interest. Asset Quality The Company's asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach. Nonperforming loans were $11.7 million, or 1.28% of total loans on June 30, 2025, compared to $13.2 million or 1.45% on March 31, 2025 and $24.5 million or 2.76% on June 30, 2024. Continued improvement in nonperforming loans in the second quarter of 2025 primarily resulted from the recent sale of loans associated with one local commercial relationship dating to 2013. NCOs after recoveries were $2.6 million or an annualized 1.14% of average loans in the second quarter of 2025, with gross charge offs for consumer loans, purchased loan pools, and commercial loans, offsetting recoveries in each of these categories. NCOs were $340,000 or an annualized 0.15% of average loans in the linked quarter and $66,000 or 0.03% in the prior year period. Provision for credit loss expense was $1.2 million in the second quarter of 2025 primarily reflecting NCOs in the period, partially offset by reductions related to quantitative and qualitative factors in the Company’s reserve model. The provision was $457,000 and $290,000 in the linked and year-ago quarters, respectively. The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses (“ACL”) of $16.0 million on June 30, 2025, compared to $17.4 million on March 31, 2025 and $16.9 million on June 30, 2024. As a percentage of total loans, ACL represented 1.76% on June 30, 2025, 1.91% on March 31, 2025, and 1.90% on June 30, 2024. Liquidity The Company has diligently ensured a strong liquidity profile as of June 30, 2025 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership. The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.22 billion on June 30, 2025, compared to $1.26 billion on March 31, 2025 and $1.10 billion on June 30, 2024. Decreases in total deposits primarily reflect reductions in higher-cost time and money market accounts, as well as regular municipal deposit seasonality. Core deposits grew to 78.47% of total deposits on June 30, 2025, compared to 78.31% on March 31, 2025 and 67.98% on June 30, 2024. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability. On June 30, 2025, Pathfinder Bancorp had an available additional funding capacity of $124.5 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $46.5 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend Declared On June 30, 2025, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock. In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by July 18, 2025 will be eligible for the dividend, which is scheduled for disbursement on August 8, 2025. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value. Evaluating the Company’s market performance, the closing stock price as of June 30, 2025 stood at $15.34 per share. This positions the annualized dividend yield at 2.61%. About Pathfinder Bancorp, Inc. Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. More information is available at pathfinderbank.com and ir.pathfinderbank.com. Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov. This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial measure. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC (“Agency”) the Company is required to consolidate 100% of the Agency within the consolidated financial statements. The Company sold its 51% membership interest in the Agency in October 2024. 2 The $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company’s 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest. 3 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to their estimated market value based on active sale negotiations. 4 Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures. 2 Non-brokered deposits excluding certificates of deposit of $250,000 or more. 3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital. 4 Includes 11 full-service branches and one motor bank for periods after June 30, 2024. Includes 10 full-service branches and one motor bank for all periods prior. 5 Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares. 6 Diluted earnings per share for the first quarter of 2025 has been updated to $0.47, from the $0.41 reported previously. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity 2 The loss reflects a valuation adjustment “Lower-of-cost-or-market" adjustment on loans held for sale to the estimated market value based on sale negotiation terms. 3 Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities, sales of loans and foreclosed real estate, and a gain on the October 2024 sale of the Company's insurance agency asset 4 Pre-tax, pre-provision net income equals revenue less total non-interest expense 5 Efficiency ratio equals noninterest expense divided by revenue The above information is unaudited and preliminary based on the Company's data available at the time of presentation. Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Senior Vice President, CFO Telephone: (315) 343-0057

Pathfinder Bank’s parent company earned $0.41 per diluted share on improving operating efficiency and growth in net interest income, net interest margin, core deposits and commercial loans OSWEGO, N.Y., April 30, 2025 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the first quarter ended March 31, 2025. The holding company for Pathfinder Bank (“the Bank”) earned net income attributable to common shareholders of $3.0 million or $0.41 per diluted share in the first quarter of 2025, compared to $2.1 million or $0.34 per share in the first quarter of 2024. In the fourth quarter of 2024, the Company reported net income attributable to common shareholders of $3.9 million or $0.63 per share, and included a benefit of approximately $1.4 million from a gain on the sale of its insurance agency, net of taxes and transaction-related expenses. First Quarter 2025 Highlights and Key Developments Total deposits were $1.26 billion at period end, and grew by 5.0% in the first quarter and 10.3% from March 31, 2024. Core deposits also grew to 78.31% of total deposits at period end from 76.86% on December 31, 2024 and 69.17% on March 31, 2024. In addition to funding lending activity in the quarter, the Company's low-cost deposits enabled reductions in higher-cost borrowings to $44.6 million at period end, down 49.3% in the first quarter and 67.5% from March 31, 2024. Total loans were $912.2 million at period end, compared to $919.0 million on December 31, 2024 and $891.5 million on March 31, 2024. Commercial loans were $542.7 million or 59.5% of total loans at period end, compared to $539.7 million on December 31, 2024 and $525.6 million on March 31, 2024. Nonperforming loans declined to $13.2 million at period end, and improved by 40.1% during the first quarter and 32.7% from March 31, 2024. Nonperforming loans also declined to 1.45% of total loans at period end, and improved from 2.40% on December 31, 2024 and 2.20% on March 31, 2024. Net interest income was $11.4 million, and increased $1.0 million from the linked quarter and $2.0 million from the first quarter of 2024, while net interest margin (“NIM”) expanded to 3.31% from 3.02% in the fourth quarter of 2024 and 2.75% in the year-ago period. Approximately $347,000 of net interest income and 10 basis points of NIM in the first quarter of 2025 reflected 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees. Pre-tax, pre-provision (“PTPP”) net income grew to $4.2 million, and increased 26.0% from the linked quarter and 16.9% from the year-ago period. PTPP net income, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses. The efficiency ratio improved to 66.84%, down from 72.01% in the linked quarter and 68.29% in the year-ago period. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. “Pathfinder’s solid first quarter results reflect the strength of our balance sheet and our growing core deposit franchise. Our continued focus on disciplined loan and deposit pricing has helped expand net interest margin in a challenging economic environment while our efforts toward optimizing non-interest expenses have improved our efficiency measures,” said President and Chief Executive Officer James A. Dowd. “We remain deeply committed to strengthening our proactive credit risk management practices and view our current efforts as the beginning of a sustained, long-term strategy to enhance the quality of our loan portfolio.” Dowd added, “Our strong results this year and the close relationships we’ve built with businesses and neighbors throughout Central New York give us good reason to feel optimistic. Major investments in our region’s growing tech sector are creating new opportunities, and we’re proud to be part of that momentum. At the same time, we’re staying close to our customers and keeping a careful eye on how recent economic changes and national policy decisions are affecting families and local businesses across our communities.” Net Interest Income and Net Interest Margin First quarter 2025 net interest income was $11.4 million, an increase of $1.0 million, or 10.0%, from the fourth quarter of 2024. A decrease in interest and dividend income of $85,000 from the linked quarter was primarily attributed to average yield decreases of 43 basis points on tax-exempt investment securities and 25 basis points on taxable investment securities, partially offset by a 10 basis points increase in the average yield on loans that included 15 basis points from 2024 interest recovered from loans removed from nonaccrual status and income from prepayment fees. The corresponding decreases in income from tax-exempt and taxable investment securities from the linked quarter were $43,000 and $198,000, respectively. The increase in interest from loans of $149,000 from the prior quarter reflected a benefit of approximately $347,000, including $247,000 of 2024 interest recovered from loans removed from nonaccrual status and $100,000 of first quarter 2025 prepayment fees. A decrease in interest expense of $1.1 million from the linked quarter was primarily attributed to average cost decreases of 36 basis points for interest-bearing deposits and 143 basis points for borrowings. The corresponding decreases in deposits and borrowings expense from the linked quarter were $878,000 and $226,000, respectively. These reductions reflect continued changes in the Bank’s funding mix, including growing core deposits, as well as deliberate deposit pricing adjustments and significant reductions in borrowings. Net interest margin was 3.31% in the first quarter of 2025 compared to 3.02% in the linked quarter. The increase reflected significant reductions in deposit and borrowing costs, as well as a benefit of 10 basis points from 2024 recovered interest and first quarter 2025 prepayment fees. Noninterest Income First quarter 2025 noninterest income totaled $1.2 million and no longer includes contributions from the insurance agency business sold in October 2024. Linked quarter noninterest income totaled $4.9 million, including $3.2 million in non-recurring pre-tax gains and revenues associated with the sale of the Company's insurance agency in 2024. First quarter 2024 noninterest income totaled $1.7 million, including $397,000 in insurance revenue. Compared to the linked quarter, first quarter 2025 noninterest income reflected a reduction of $264,000 in debit card interchange fees driven by $158,000 of non-recurring catch up expenses and seasonal reductions estimated at $100,000, as well as decreases of $31,000 in service charges on deposit accounts and $7,000 in earnings and gain on bank owned life insurance (“BOLI”). Compared to the linked quarter, first quarter 2025 noninterest income also reflected increases of $52,000 in net realized gains on sales of marketable equity securities and $26,000 in gains on sales of loans and foreclosed real estate, as well as a decrease of $257,000 in net realized gains on sales and redemptions of investment securities. Compared to the year-ago period, first quarter 2025 noninterest income included increases of $65,000 in service charges on deposit accounts, $13,000 in loan servicing fees, and $5,000 in earnings and gain on BOLI, as well as a decline of $118,000 in debit card interchange fees driven by $158,000 of non-recurring catch up expenses related to prior periods. Noninterest income growth from the year-ago quarter also reflected a $140,000 decrease in net realized losses on sales and redemptions of investment securities and increases of $110,000 in net realized gains on sales of marketable equity securities and $47,000 in gains on sales of loans and foreclosed real estate. Noninterest Expense Noninterest expense totaled $8.4 million in the first quarter of 2025 and no longer includes costs for the insurance agency business sold in October 2024. Noninterest expense was $8.5 million in the linked quarter and $7.7 million in the year-ago period, including expenses associated with the insurance agency of $456,000 and $285,000, respectively. Salaries and benefits were $4.5 million in the first quarter of 2025, increasing $327,000 from the linked quarter and $121,000 from the year-ago period. The increase from the linked quarter reflected a $174,000 increase in stock-based compensation and a $96,000 increase in payroll tax. The increase from the first quarter of 2024 was primarily attributed to a $95,000 increase in stock-based compensation and $123,000 in other salary and benefits expenses associated with personnel in the East Syracuse branch acquired in July 2024. Building and occupancy was $1.3 million in the first quarter of 2025, increasing $93,000 and $531,000 from the linked and year-ago quarters, respectively. The increase from the linked quarter reflected an $89,000 seasonal increase in utilities and snow removal expenses. The increase from the first quarter of last year was primarily due to ongoing facilities-related costs associated with operating the East Syracuse branch acquired in July 2024. Data processing expense was $666,000 in the first quarter of 2025, decreasing $55,000 from the linked quarter and increasing $138,000 from the year-ago period. The decrease from the fourth quarter of 2024 was primarily attributed to a $42,000 ATM processing expense for new customer card issuances. The increase from the first quarter of 2024 was primarily attributed to the ongoing operations of the East Syracuse branch acquired in July 2024. Annualized noninterest expense represented 2.33% of average assets in the first quarter of 2025, compared to 2.33% and 2.16% in the linked and year-ago periods, including costs associated with transactions of the divested insurance agency business. The efficiency ratio was 66.84% in the first quarter of 2025, compared to 72.01% and 68.29% in the linked and year-ago periods. The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. Net Income For the first quarter of 2025, net income attributable to common shareholders was $3.0 million, or $0.48 per basic share and $0.41 per diluted share. The difference between basic and diluted earnings per share reflects the accounting impact of restricted stock units granted to senior executive officers during the period under the 2024 Equity Incentive Plan, which was approved by shareholders at the 2024 annual meeting. Linked quarter net income was $3.9 million, including a net benefit of approximately $1.4 million from the gain on the sale of its insurance agency, or $0.63 per basic and diluted share. First quarter 2024 net income totaled $2.2 million or $0.34 per basic and diluted share. Statement of Financial Condition As of March 31, 2025, the Company’s statement of financial condition reflects total assets of $1.50 billion, compared to $1.47 billion and $1.45 billion recorded on December 31, 2024 and March 31, 2024, respectively. Loans totaled $912.2 million on March 31, 2025, decreasing 0.7% during the first quarter and increasing 2.3% from one year prior. Consumer and residential loans totaled $371.0 million on March 31, 2025, decreasing 2.6% during the first quarter and increasing 1.2% from one year prior. Commercial loans totaled $542.7 million on March 31, 2025, increasing 0.6% during the first quarter and 3.3% from one year prior. With respect to liabilities, deposits totaled $1.26 billion on March 31, 2025, increasing 5.0% during the first quarter and 10.3% from one year prior. The Company also utilized its lower cost liquidity to reduce total borrowings, which were $44.6 million on March 31, 2025 as compared to $88.1 million on December 31 and $137.4 million on March 31, 2024. Shareholders' equity totaled $124.9 million on March 31, 2025, increasing $3.4 million or 2.8% in the first quarter and increasing $3.1 million or 2.5% from one year prior. Compared to the prior quarter, the first quarter 2025 increase primarily reflects a $2.3 million increase in retained earnings, a $712,000 decrease in accumulated other comprehensive loss (“AOCL”), and a $353,000 increase in additional paid in capital. The noncontrolling interest, previously included in equity on the Statements of Financial Condition, was eliminated in October 2024 upon the sale of the Company's 51% ownership interest in the insurance agency. Asset Quality The Company's asset quality metrics reflect ongoing efforts the Bank is undertaking as part of its commitment to continuously improve its credit risk management approach. Nonperforming loans were $13.2 million or 1.45% of total loans on March 31, 2025, improving from $22.1 million or 2.40% of total loans on December 31, 2024 and $19.7 million or 2.20% of total loans on March 31, 2024. Net charge offs (“NCOs”) after recoveries were $340,000 or an annualized 0.15% of average loans in the first quarter of 2025, with gross charge offs for consumer loans, purchased loan pools, and commercial loans offsetting recoveries in each of these categories. NCOs were $1.0 million or an annualized 0.44% of average loans in the linked quarter and $30,000 or 0.01% in the prior year period. Provision for credit loss expense was $457,000 in the first quarter of 2025 reflecting lower levels of nonperforming loans and NCOs in the period and qualitative factors in the Company’s reserve model. The provision was $988,000 and $726,000 in the linked and year-ago quarters, respectively. The Company believes it is sufficiently collateralized and reserved, with an Allowance for Credit Losses (“ACL”) of $17.4 million on March 31, 2025, compared to $17.2 million on December 31, 2024 and $16.7 million on March 31, 2024. As a percentage of total loans, ACL represented 1.91% on March 31, 2025, 1.88% on December 31, 2024, and 1.87% on March 31, 2024. Liquidity The Company has diligently ensured a strong liquidity profile as of March 31, 2025 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership. The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations. Total deposits were $1.26 billion on March 31, 2025, $1.20 billion on December 31, 2024, and $1.15 billion on March 31, 2024. Core deposits represented 78.31% of total deposits on March 31, 2025, 76.86% on December 31, 2024, and 69.17% on March 31, 2024. The Bank continues to implement strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability. At the end of the current quarter, Pathfinder Bancorp had an available additional funding capacity of $133.3 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $46.6 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements. Cash Dividend Declared On March 31, 2025, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock. In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by April 18, 2025 will be eligible for the dividend, which is scheduled for disbursement on May 9, 2025. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value. Evaluating the Company’s market performance, the closing stock price as of March 31, 2025 stood at $16.44 per share. This positions the annualized dividend yield at 2.43%. About Pathfinder Bancorp, Inc. Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the commercial bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse, and their neighboring communities. Strategically located branches averaging over $100 million in deposits per location, as well as diversified consumer, mortgage, and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. At March 31, 2025, the Oswego-headquartered Company had assets of $1.50 billion, loans of $912.2 million, and deposits of $1.26 billion. More information is available at pathfinderbank.com and ir.pathfinderbank.com. Forward-Looking Statements Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov. This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial measure. Investor/Media Contacts James A. Dowd, President, CEO Justin K. Bigham, Senior Vice President, CFO Telephone: (315) 343-0057 The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Although the Company owned 51% of its membership interest in FitzGibbons Agency, LLC (“Agency”) the Company is required to consolidate 100% of the Agency within the consolidated financial statements. The Company sold its 51% membership interest in the Agency in October 2024. 2 The $3,169,000 consolidated gain on asset sale equals $1,616,000 associated with the Company’s 51% interest in the Agency plus $1,553,000 associated with the 49% noncontrolling interest. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. 1 Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures. 2 Non-brokered deposits excluding certificates of deposit of $250,000 or more. 3 Construction and development, multifamily, and non-owner occupied CRE loans as a percentage of Pathfinder Bank total capital. 4 Includes 11 full-service branches and one motor bank for December 31 and September 30, 2024, respectively. Includes 10 full-service branches and one motor bank for all periods prior. 5 Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary, based on the Company's data available at the time of presentation. The above information is unaudited and preliminary based on the Company's data available at the time of presentation. 1 Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity 2 Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities and gain on sale of insurance agency 3 Pre-tax, pre-provision net income equals revenue less total non-interest expense 4 Efficiency ratio equals noninterest expense divided by revenue The above information is unaudited and preliminary based on the Company's data available at the time of presentation.