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• A hyper-local version of a major bank like Bank of America or Chase, focused on specific New York counties.
• A community financial institution, similar to a smaller, regional M&T Bank or KeyCorp, but also offering insurance brokerage services.
• The long-standing local bank for its communities, much like a venerable M&T Bank but with a tighter geographic focus.

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• Deposit Accounts: The company offers various deposit accounts including checking, savings, money market, certificates of deposit, and demand and time deposits.
• Loan Products: Pathfinder Bancorp provides a diverse range of loans such as commercial real estate, residential, municipal, and consumer loans.
• Insurance Brokerage: The company offers property, casualty, and life insurance brokerage services.

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Major Customers of Pathfinder Bancorp (PBHC)

Pathfinder Bancorp primarily serves the following categories of customers:

• Individuals and Families
• Small to Mid-size Businesses
• Municipalities

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James A. Dowd, President and Chief Executive Officer
Mr. Dowd joined Pathfinder Bank in 1994 as Controller. He was promoted to Chief Financial Officer in 1999 and later to Chief Operating Officer in 2017. He served as Executive Vice President and Chief Operating Officer before being appointed President and Chief Executive Officer in April 2022. Mr. Dowd played a significant role in the Bank's expansion into Onondaga County, deposit growth, and enhanced brand recognition. He began his career with Coopers & Lybrand as a business assurance manager.

Justin K. Bigham, Senior Vice President and Chief Financial Officer
Mr. Bigham joined Pathfinder Bank in 2024 as Senior Vice President and Chief Financial Officer, bringing over 25 years of experience in the financial industry. Prior to joining Pathfinder Bank, he held several key leadership positions at various large public companies, most recently serving as Executive Vice President and Chief Community Banking Officer at Five Star Bank, where he also previously held the role of Chief Financial Officer. His experience also includes Director of Financial Planning and Treasury at HealthNow New York, and senior finance and business line roles at First Niagara and M&T Bank.

Robert G. Butkowski, Senior Vice President and Chief Operating Officer
Mr. Butkowski has been with Pathfinder Bank since 2010 and was appointed Senior Vice President and Chief Operating Officer in 2024. In this role, he is responsible for overseeing the daily operations of the Bank's branch network, including branch administration and business services. He previously served as First Vice President, Branch Administration.

Joseph F. Serbun, Senior Vice President and Chief Credit Officer
Mr. Serbun was appointed Senior Vice President and Chief Credit Officer in 2024. He joined Pathfinder Bank in 2023 as Special Assets Manager, bringing over 40 years of banking experience. Before retiring in September 2022, he was President of Retail Banking at Community Bank, where he also held senior management positions including Chief Credit Officer and Chief Banking Officer.

William D. O'Brien, Senior Vice President, Chief Risk Officer and Corporate Secretary
Mr. O'Brien has been employed by Pathfinder Bank since 1999. During his tenure, he has held various positions, including branch manager and commercial lender, and served as First Vice President of Credit Administration. He was appointed Senior Vice President Chief Risk Officer and Corporate Secretary in January 2020.

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The key risks to Pathfinder Bancorp's business operations and financial performance are primarily centered around its credit risk management, exposure to interest rate fluctuations, and managing liquidity and deposit levels.

1. Credit Risk and Loan Portfolio Quality: Pathfinder Bancorp has faced significant challenges related to the quality of its loan portfolio, particularly within its commercial lending segment. The company reported net losses in recent quarters, including the third and fourth quarters of 2024 and the fourth quarter of 2025, largely due to substantial provision expenses for credit losses. For instance, a comprehensive review of its commercial loan portfolio in Q4 2025 led to an $11.2 million credit loss provision and identified "legacy commercial relationships with unique risk characteristics." This resulted in a significant increase in the allowance for credit losses to 3.28% of total loans by December 31, 2025. Additionally, nonperforming loans have shown volatility, increasing to 2.59% of total loans by September 30, 2025. While management has stated that these legacy credit quality issues are being addressed, the recent financial impact highlights this as a primary business risk.
2. Interest Rate Risk: As a financial institution, Pathfinder Bancorp is highly susceptible to changes in prevailing interest rates. The company has explicitly cited that rapidly rising interest rates, an inverted Treasury yield curve, and heightened inflation in 2023 led to increased funding costs and downward pressure on its net interest margin. This environment caused a 29-basis point drop in net interest margin from 3.24% in 2022 to 2.95% in 2023, as customers sought higher yields, prompting deposit outflows or transfers to higher-interest accounts within the bank. Fluctuations in net interest income and net interest margin continued into 2025, impacting profitability.
3. Liquidity Risk and Deposit Management: The banking industry experienced heightened liquidity challenges in 2023, exacerbated by the failures of other regional banks, which prompted Pathfinder Bancorp to prioritize liquidity and customer retention. The company's ability to maintain and grow its deposit base is crucial for funding its loan and investment activities. Decreases in deposit levels, particularly from higher-cost time and money market accounts, can necessitate increased borrowing to fund operations. For example, total deposits decreased to $1.18 billion by December 31, 2025, from $1.23 billion on September 30, 2025, and similar reductions were observed earlier in 2025. While the bank emphasizes a strong liquidity profile and robust management, managing deposit outflows and funding costs remains a significant operational consideration.

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• The increasing prevalence of digital-only banks (neobanks) and specialized online lending platforms that offer competitive banking and loan products with lower overhead and greater digital convenience, directly challenging Pathfinder Bancorp's traditional branch-based model for attracting deposits and originating loans from individuals and small businesses.
• The aggressive digital transformation and expanding online service offerings of larger regional and national financial institutions, enabling them to compete effectively for customers within Pathfinder Bancorp's primary service areas (Oswego and Onondaga Counties, New York) without requiring a physical branch presence, thereby eroding the community bank's localized competitive advantage.

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For Pathfinder Bancorp (symbol: PBHC), the addressable market for its main products and services can be partially identified for its primary operating region.

Deposits

The total deposit market size for the Syracuse Metropolitan Statistical Area (MSA), which encompasses Oswego, Onondaga, and Madison counties in New York, was approximately $15.33 billion as of June 30, 2024. This region represents Pathfinder Bank's primary deposit-generating area, particularly Oswego County and the areas surrounding its Onondaga County branches.

Loans and Insurance Brokerage

Information on the specific addressable market sizes for Pathfinder Bancorp's various loan products (including commercial real estate loans, commercial loans, residential real estate and construction loans, tax-exempt loans, home equity loans and junior liens, municipal loans, and consumer loans) within Oswego and Onondaga Counties, New York, is not available in the provided data. Similarly, detailed addressable market sizes for property, casualty, and life insurance brokerage services specifically within these counties could not be determined from the available information.

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Pathfinder Bancorp, Inc. (PBHC) is expected to drive future revenue growth over the next two to three years through several strategic initiatives and improved operational conditions:

1. Strategic Expansion through Acquisitions: The acquisition of Berkshire Bank's East Syracuse branch, which was anticipated to finalize by the end of the third quarter of 2024, is a significant growth driver. This deal is set to add approximately $198 million in deposits and $32 million in consumer and residential loans to Pathfinder's portfolio. The acquisition strategically expands Pathfinder Bank's market footprint, significantly increasing its presence in the Syracuse market and is expected to be accretive to earnings per share.
2. Enhanced Market Penetration and Product Offerings: Following the branch acquisition, Pathfinder Bank plans to extend its comprehensive consumer and business products and services to an expanded market area within the attractive Syracuse market. This expansion of offerings to a new customer base is anticipated to fuel business growth.
3. Improved Credit Quality and Consistent Earnings: After a comprehensive review of its commercial loan portfolio in the fourth quarter of 2025, Pathfinder Bancorp's management believes that past commercial credit quality issues have been largely resolved. This resolution is expected to lead to reduced incremental reserve pressure, enabling the company to generate more consistent earnings in 2026. While not a direct revenue driver, improved credit quality reduces provisions for credit losses, freeing up capital and enhancing overall profitability, which can then be reinvested into revenue-generating activities.
4. Growth of Capital Ratios and Capital Allocation Flexibility: Pathfinder Bancorp's management is focused on supporting the growth of its capital ratios. Increased capital provides the company with greater flexibility in evaluating capital allocation alternatives, which can include funding new loan growth, making further strategic investments, or pursuing additional expansion opportunities that ultimately drive revenue.

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Share Repurchases

• Pathfinder Bancorp had a stock repurchase program authorized to repurchase up to 217,692 shares of its common stock, or approximately 5% of its outstanding shares.
• Despite the authorization, the number of outstanding shares generally increased between 2021 and 2025, suggesting no significant net share repurchases during this period.

Share Issuance

• The company's shares outstanding increased from 4.51 million in 2021 to 4.79 million in 2025.
• Pathfinder Bancorp entered into a Securities Purchase Agreement with Castle Creek Capital Partners VII, L.P. on May 8, 2019, for a private placement of certain securities. The company has since amended the related Registration Rights Agreement multiple times, with the latest amendment on April 26, 2025, extending the deadline for filing a resale registration statement for these securities to May 8, 2026.

Outbound Investments

• In the fourth quarter of 2024, Pathfinder Bancorp recorded a gain of approximately $1.4 million from the sale of its insurance agency.
• The company incurred $1.6 million in costs related to a branch acquisition in July 2024.

Capital Expenditures

• Pathfinder Bancorp invested $126,000 in capital expenditures during the third quarter of 2025, funding long-term assets and infrastructure. This represented a 43.8% decrease from the prior quarter.