Pioneer Bancorp's Litigation Charge Wipes Out Third-Quarter Profit

The Tip Desk · November 10, 2026 · 4 min read

Net income fell to $85,000 after a $6.2 million litigation-related expense as net interest income reached $23.6 million.

Pioneer Bancorp, Inc. (PBFS), a leading financial institution in New York’s Capital Region, reported net income of $85,000, or about $0.00 a share, for the three months ended September 30, 2026, down from $4.3 million, or $0.18 a share, a year earlier. Income before taxes was $67,000.

The collapse in earnings reflected litigation-related expense of $6.2 million recognized in connection with the resolution of pending litigation involving Southwestern Payroll Services, Inc., Granite Solutions Groupe, Inc. and National Payment Corp. In October 2026, Pioneer and Pioneer Bank, National Association, reached agreements in principle to resolve all claims in that case, subject to definitive settlement agreements and stipulations of dismissal. President and CEO Thomas Amell said the matters dated back to 2019 and that the outcome removes a long-standing source of uncertainty.

Net interest income was $23.6 million, up $3.4 million, or 16.9%, from $20.2 million a year earlier. Average interest-earning assets rose $276.5 million and the average yield on those assets increased 26 basis points to 6.12%. The average cost of interest-bearing liabilities rose five basis points to 2.56% and average interest-bearing liabilities increased $286.2 million. Net interest margin was 4.26%, up 10 basis points from 4.16% a year earlier.

Year-over-year net interest income growth accelerated to 16.9% from 16.5% in the second quarter, when net interest income was $22.9 million. Net interest income rose $0.7 million sequentially. Net interest margin compressed 4 basis points from 4.30% in the second quarter. Interest income was $33.7 million. The company said the increase in interest income was driven by market-related rate increases on new loans and securities, loans acquired on April 24, 2026, when Pioneer completed the acquisition of Targeted Lending Co., LLC, and higher average loan balances. Interest expense was $10.1 million.

Noninterest income was $5.5 million, up $1.7 million, or 44.3%, from $3.8 million a year earlier, and accounted for 14% of revenue. The company attributed the increase primarily to higher insurance and wealth-management services income, bank fees and service charges, and net gain on sale of loans from the Targeted Lending acquisition, offset in part by a net loss on trading securities.

Noninterest expense was $27.7 million, up $10.1 million, or 57.4%, from $17.6 million a year earlier. The company said the increase was primarily due to higher professional fees, litigation-related expense, and salaries and employee benefits from annual merit increases and acquisition headcount. The efficiency ratio widened to 95.24% from 73.38%.

Net loans receivable were $1.94 billion at September 30, 2026, up $290.3 million, or 17.6%, from December 31, 2025. Commercial and industrial loans rose $161.8 million, which the company said was driven by the Targeted Lending acquisition. Commercial construction loans increased $59.9 million, residential mortgages $57.0 million and commercial real estate $11.4 million. Sequential loan growth slowed to $65.5 million from $170.0 million in the second quarter, when net loans were $1.87 billion.

Deposits were $2.13 billion at September 30, 2026, up $391.7 million, or 22.5%, from December 31, 2025. Certificates of deposit increased $240.5 million, including brokered deposits and migration from lower-cost accounts; non-interest-bearing demand deposits rose $80.3 million and money market accounts $65.8 million. Sequential deposit growth accelerated to $160.8 million from $118.7 million in the second quarter. The mix was about 52.9% retail, 16.4% commercial and 30.7% municipal. Estimated uninsured deposits, net of affiliate and collateralized deposits, were 10.6% of total deposits. Total assets were $2.60 billion.

Net charge-offs were $1.1 million, or 0.23% annualized of average loans, versus $4,000, or 0.00%, a year earlier, primarily from commercial and industrial charge-offs on acquired Targeted Lending loans. The provision for credit losses was $1.3 million. Non-performing assets were $10.8 million, or 0.42% of total assets, compared with $11.3 million, or 0.52%, at December 31, 2025. The allowance for credit losses was $28.3 million, or 1.44% of loans.

Shareholders’ equity was $323.3 million. Pioneer Bank’s common equity tier 1 ratio was 12.66% and Tier 1 leverage 9.59%. Amell said the company remains focused on delivering long-term value, serving clients and advancing its “More Than a Bank” strategy.