Pathfinder Bancorp renews CEO contract, CFO gets new terms

Pathfinder Bancorp, Inc. (NASDAQ:PBHC), a state commercial bank headquartered in Oswego, New York, announced on Monday significant executive employment updates. The bank, which operates under Maryland incorporation, disclosed the renewal of an employment agreement with its President and CEO, James A. Dowd, and a new change in control agreement with Senior Vice President and CFO, Justin Bigham.

The agreement with Dowd, effective as of September 4, 2024, extends his tenure for an initial term of three years with automatic annual extensions, ensuring a continuous three-year horizon unless notice is given by either party. Dowd's annual base salary is set at $415,000, with eligibility for bonus and incentive programs akin to senior management. The agreement also includes provisions for an automobile and outlines severance terms.

Notably, upon involuntary termination excluding cause, disability, or death, or resignation for "good reason," Dowd may receive a severance equal to the remaining salary and average annual bonuses he would have earned during the employment term. Post-termination, Dowd is subject to a one-year non-compete and non-solicitation clause, and must protect the company's confidential information.

Concurrently, Bigham's change in control agreement, effective the same day, sets forth conditions that would apply if a change in control of the bank occurs. The agreement spans an initial term through January 1, 2025, with automatic two-year renewals.

Should Bigham's employment end within two years following a change in control, he is entitled to a lump-sum severance payment, continued insurance coverage, and immediate vesting of stock options and restricted stock. This agreement also includes a provision to reduce payments to avoid penalties under Section 280G of the Internal Revenue Code.

The information provided is based on a press release statement.

In other recent news, Pathfinder Bancorp has reported notable developments in its financial strategies and executive leadership. The company's recent earnings report highlighted the declaration of a quarterly cash dividend of $0.10 per share for both its voting and non-voting common stock, reflecting the company's performance for the fiscal quarter ending June 30, 2024.

In addition, Pathfinder Bancorp has announced the retirement of its Senior Vice President and Chief Financial Officer, Walter F. Rusnak, set for June 28, 2024, with Justin K. Bigham named as his successor.

The company has also gained approval to acquire a branch of Berkshire Bank located in East Syracuse, New York, a strategic expansion expected to enhance its business growth. The transaction includes approximately $198 million in deposits and $32 million in consumer and residential loans. The purchase agreement is set to close in the third quarter of 2024, with the East Syracuse branch transitioning to operate under the Pathfinder Bank brand.

These recent developments highlight Pathfinder Bancorp's strategic moves in its executive leadership and financial operations. The incoming CFO, Bigham, brings over 25 years of experience in financial services, potentially driving the company's future strategy and growth. Meanwhile, the increased dividend underscores the company's financial health and its capacity to generate value for its shareholders.

InvestingPro Insights

Pathfinder Bancorp, Inc. (NASDAQ:PBHC) has demonstrated a commitment to shareholder returns, as evidenced by its impressive track record of maintaining dividend payments for 29 consecutive years. The recent announcement of a quarterly cash dividend is a continuation of this trend, and aligns with the InvestingPro Tip that the company has raised its dividend for 3 consecutive years. Moreover, the company has seen a strong return over the last three months, with a 25.71% price total return, showcasing its robust performance in the short-term market.

On the financial metrics front, Pathfinder Bancorp's market capitalization stands at $97.75 million, reflecting its position in the market. The P/E ratio, a measure of the company's current share price relative to its per-share earnings, is 14.85, suggesting that investors are willing to pay about $14.85 for every dollar of earnings. This is in line with the adjusted P/E ratio for the last twelve months as of Q2 2024, which is 14.87. Moreover, the company's price to book ratio for the same period is 0.79, indicating that the stock may be undervalued based on the book value of the company's assets.

These financial metrics, combined with the strategic executive appointments and the expansion through the acquisition of a Berkshire Bank branch, position Pathfinder Bancorp as a potentially strong player in the banking industry. For investors looking to delve deeper into the company's performance and prospects, there are additional InvestingPro Tips available at https://www.investing.com/pro/PBHC, which can provide more nuanced insights into Pathfinder Bancorp's financial health and strategic direction.

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