UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                          _____________________________

                                   FORM 10-QSB

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

               For the quarterly period ending September 30, 2007
                                       OR

     [  ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                For the transition period from _______ to _______

                        Commission File Number: 000-23601
                                                ---------

                            PATHFINDER BANCORP, INC.
                            ------------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)

        FEDERAL                                     16-1540137
-------------------------------          --------------------------------
(State or Other Jurisdiction of          (I.R.S. Employer Identification
 Incorporation or Organization)                        Number)


                     214 West First Street, Oswego, NY 13126
                     ---------------------------------------
               (Address of Principal Executive Office) (Zip Code)

                                 (315) 343-0057
                                 --------------
                 (Issuer's Telephone Number Including Area Code)


Check  whether  the  issuer  (1)  has  filed all reports required to be filed by
Section  13  or  15(d) of the Exchange Act during the past twelve months (or for
such  shorter  period that the issuer was required to file such reports) and (2)
has  been subject to such filing requirements for the past 90 days.
   Yes  [X]     No  [  ].


Indicate  by check mark whether the small business issuer is a shell company (as
defined  in  Rule  12b-2  of  the  Exchange  Act).    Yes  [  ]       No  [X]


State  the number of shares outstanding of  the issuer's class of common equity,
as of the latest practicable date:  As of November 9, 2007, there were 2,970,819
shares  issued  and  2,483,532 shares outstanding of the Small Business Issuer's
Common  Stock.

Transitional  Small  Business Disclosure Format (check one)  Yes [   ]  No  [X ]

<PAGE>


                         PATHFINDER BANCORP, INC.
                                    INDEX



PART I FINANCIAL INFORMATION                                           PAGE NO.

       Item 1.  Consolidated Financial Statements
                  Consolidated Statements of Condition                   1
                  Consolidated Statements of Income                      2-3
                  Consolidated Statements of Changes in
                     Shareholders' Equity                                4
                  Consolidated Statements of Cash Flows                  5-6
                  Notes to Consolidated Financial Statements             7-9


       Item 2.  Management's Discussion and Analysis or Plan of          10-19
                     Operation

       Item 3.  Controls and Procedures                                  20


PART II OTHER INFORMATION                                                21

       Item 1.  Legal proceedings
       Item 2.  Unregistered sales of equity securities and use
                     of proceeds
       Item 3.  Defaults upon senior securities
       Item 4.  Submission of matters to a vote of security
                     holders
       Item 5.  Other information
       Item 6.  Exhibits


SIGNATURES                                                               22

<PAGE>

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION

ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

                                       PATHFINDER  BANCORP, INC.
                                  CONSOLIDATED STATEMENTS OF CONDITION
                               SEPTEMBER 30, 2007 AND DECEMBER 31, 2006
                                              (UNAUDITED)

                                                                               September 30, December 31,
(Dollars in thousands, except per share data)                                          2007         2006
---------------------------------------------------------------------------------------------------------
ASSETS
------
<S>                                                                                <C>        <C>
Cash and due from banks                                                            $ 10,492    $  7,068
Interest earning deposits                                                               317       6,655
-------------------------------------------------------------------------------------------------------
     Total cash and cash equivalents                                                 10,809      13,723
Investment securities, at fair value                                                 65,612      62,640
Federal Home Loan Bank stock, at cost                                                 1,660       1,579
Loans                                                                               215,855     203,209
   Less: Allowance for loan losses                                                    1,645       1,496
-------------------------------------------------------------------------------------------------------
     Loans receivable, net                                                          214,210     201,713

Premises and equipment, net                                                           7,607       7,597
Accrued interest receivable                                                           1,625       1,694
Foreclosed real estate                                                                  310         471
Goodwill                                                                              3,840       3,840
Intangible asset, net                                                                    15         181
Bank owned life insurance                                                             6,381       6,212
Other assets                                                                          1,772       1,732
-------------------------------------------------------------------------------------------------------
     Total assets                                                                  $313,841    $301,382
=======================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Deposits:
  Interest-bearing                                                                 $232,296    $225,003
  Noninterest-bearing                                                                23,623      20,582
-------------------------------------------------------------------------------------------------------
     Total deposits                                                                 255,919     245,585
Short-term borrowings                                                                 9,000           0
Long-term borrowings                                                                 19,010      26,360
Junior subordinated debentures                                                        5,155       5,155
Other liabilities                                                                     3,701       3,432
-------------------------------------------------------------------------------------------------------
     Total liabilities                                                              292,785     280,532

Shareholders' equity:
   Preferred stock, authorized shares 1,000,000; no shares issued or outstanding
   Common stock, par value $0.01; authorized 10,000,000 shares;
    2,970,819 and 2,953,619 shares issued;  and 2,483,532 and 2,466,332
    shares outstanding, respectively                                                     30          29
   Additional paid in capital                                                         7,899       7,786
   Retained earnings                                                                 21,340      21,307
   Accumulated other comprehensive loss                                              (1,711)     (1,770)
   Treasury stock, at cost; 487,287 shares                                           (6,502)     (6,502)
-------------------------------------------------------------------------------------------------------
     Total shareholders' equity                                                      21,056      20,850
-------------------------------------------------------------------------------------------------------

     Total liabilities and shareholders' equity                                    $313,841    $301,382
=======================================================================================================
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                     -1-
<PAGE>

<TABLE>
<CAPTION>

                                          PATHFINDER  BANCORP, INC.
                                      CONSOLIDATED STATEMENTS OF INCOME
                                                 (UNAUDITED)

                                                                          For the three         For the three
                                                                           months ended          months ended
                                                                     September 30, 2007    September 30, 2006
-------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)

<S>                                                                          <C>                 <C>
INTEREST AND DIVIDEND INCOME:
 Loans, including fees                                                        $   3,546           $    3,222
 Debt securities:
  Taxable                                                                           623                  561
  Tax-exempt                                                                         42                   98
 Dividends                                                                           83                   82
 Other                                                                                6                    4
-------------------------------------------------------------------------------------------------------------
       Total interest income                                                      4,300                3,967
-------------------------------------------------------------------------------------------------------------

INTEREST EXPENSE:
  Interest on deposits                                                            1,734                1,368
  Interest on short-term borrowings                                                  99                   78
  Interest on long-term borrowings                                                  314                  456
-------------------------------------------------------------------------------------------------------------
       Total interest expense                                                     2,147                1,902
-------------------------------------------------------------------------------------------------------------
          Net interest income                                                     2,153                2,065
  Provision for loan losses                                                         155                    -
-------------------------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses                     1,998                2,065
-------------------------------------------------------------------------------------------------------------

NONINTEREST INCOME:
  Service charges on deposit accounts                                               366                  330
  Earnings on bank owned life insurance                                              56                   50
  Loan servicing fees                                                                72                   55
  Net gains on sales of investment securities                                       111                    -
  Net gains (losses) on sales of loans and foreclosed real estate                    11                  (29)
  Debit card interchange fees                                                        62                   49
  Other charges, commissions and fees                                               114                   81
-------------------------------------------------------------------------------------------------------------
          Total noninterest income                                                  792                  536
-------------------------------------------------------------------------------------------------------------

NONINTEREST EXPENSE:
  Salaries and employee benefits                                                  1,263                1,307
  Building occupancy                                                                305                  291
  Data processing expenses                                                          339                  328
  Professional and other services                                                   130                  121
  Amortization of intangible asset                                                   55                   55
  Other expenses                                                                    320                  289
-------------------------------------------------------------------------------------------------------------
          Total noninterest expenses                                              2,412                2,391
-------------------------------------------------------------------------------------------------------------

Income before income taxes                                                          378                  210
Provision for income taxes                                                           72                   40
-------------------------------------------------------------------------------------------------------------
NET INCOME                                                                    $     306           $      170
=============================================================================================================

     NET INCOME PER SHARE - BASIC                                             $    0.12           $     0.07
=============================================================================================================
     NET INCOME PER SHARE - DILUTED                                           $    0.12           $     0.07
=============================================================================================================
     DIVIDENDS PER SHARE                                                      $  0.1025           $   0.1025
=============================================================================================================
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                     -2-
<PAGE>

<TABLE>
<CAPTION>
                                            PATHFINDER  BANCORP, INC.
                                        CONSOLIDATED STATEMENTS OF INCOME
                                                   (UNAUDITED)

                                                                               For the nine          For the nine
                                                                               months ended          months ended
                                                                         September 30, 2007    September 30, 2006
                                                                        -------------------  --------------------
(In thousands, except per share data)
<S>                                                                            <C>                  <C>
INTEREST AND DIVIDEND INCOME:
 Loans, including fees                                                            $  10,393            $   9,416
 Debt securities:
  Taxable                                                                             1,937                1,828
  Tax-exempt                                                                            128                  294
 Dividends                                                                              249                  210
 Other                                                                                  199                   16
-----------------------------------------------------------------------------------------------------------------
       Total interest income                                                         12,906               11,764
-----------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Interest on deposits                                                                5,215                3,886
  Interest on short-term borrowings                                                     111                  263
  Interest on long-term borrowings                                                    1,178                1,344
-----------------------------------------------------------------------------------------------------------------
       Total interest expense                                                         6,504                5,493
-----------------------------------------------------------------------------------------------------------------
          Net interest income                                                         6,402                6,271
  Provision for loan losses                                                             280                   23
 ----------------------------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses                         6,122                6,248
-----------------------------------------------------------------------------------------------------------------

NONINTEREST INCOME:
  Service charges on deposit accounts                                                 1,060                1,041
  Earnings on bank owned life insurance                                                 169                  150
  Loan servicing fees                                                                   186                  160
  Net gains (losses) on sales of investment securities                                  108                   (9)
  Net gains (losses) on sales of loans and foreclosed real estate                        42                  (34)
  Debit card interchange fees                                                           178                  138
  Other charges, commissions and fees                                                   317                  279
-----------------------------------------------------------------------------------------------------------------
          Total noninterest income                                                    2,060                1,725
-----------------------------------------------------------------------------------------------------------------

NONINTEREST EXPENSE:
  Salaries and employee benefits                                                      3,764                3,765
  Building occupancy                                                                    935                  913
  Data processing expenses                                                            1,033                  958
  Professional and other services                                                       593                  352
  Amortization of intangible asset                                                      166                  166
  Other expenses                                                                        906                  958
-----------------------------------------------------------------------------------------------------------------
          Total noninterest expenses                                                  7,397                7,112
-----------------------------------------------------------------------------------------------------------------

Income before income taxes                                                              785                  861
Provision for income taxes                                                              148                  148
-----------------------------------------------------------------------------------------------------------------
NET INCOME                                                                        $     637            $     713
=================================================================================================================

     NET INCOME PER SHARE - BASIC                                                 $    0.26            $    0.29
=================================================================================================================
     NET INCOME PER SHARE - DILUTED                                               $    0.26            $    0.29
=================================================================================================================
     DIVIDENDS PER SHARE                                                          $  0.3075            $  0.3075
=================================================================================================================
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                     -3-
<PAGE>

<TABLE>
<CAPTION>
                                                  PATHFINDER BANCORP, INC.
                                 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 NINE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006
                                                         (Unaudited)

                                                                                          Accumulated
                                                                Additional                 Other Com-
                                                 Common Stock      Paid in    Retained     prehensive    Treasury
                                               Shares    Amount   Capital     Earnings        Loss         Stock     Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>        <C>      <C>       <C>         <C>              <C>       <C>
(Dollars in thousands, except per share data)
BALANCE, DECEMBER 31, 2006                     2,953,619  $   29  $  7,786   $  21,307      $ (1,770)    $(6,502)  $20,850
Comprehensive income
 Net income                                                                        637                                 637
 Other comprehensive income, net of tax
   Unrealized net gains on securities                                                             59                    59
                                                                                                                    --------
Total Comprehensive income                                                                                             696

Stock options exercised                           17,200       1       113                                             114
Dividends declared ($.3075 per share)                                             (604)                               (604)
----------------------------------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2007                    2,970,819  $   30  $  7,899   $  21,340      $ (1,711)    $(6,502)  $21,056
============================================================================================================================


BALANCE, DECEMBER 31, 2005                     2,950,419  $   29  $  7,721   $  20,965      $ (1,285)    $(6,502)  $20,928
Comprehensive income
 Net income                                                                        713                                 713
 Other comprehensive income, net of tax
   Unrealized net gains on securities                                                            308                   308
                                                                                                                    --------
Total Comprehensive income                                                                                           1,021

Stock options exercised                            1,400       -        11                                              11
Dividends declared ($.3075 per share)                                             (595)                               (595)
----------------------------------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2006                    2,951,819  $   29  $  7,732   $  21,083      $   (977)    $(6,502)  $21,365
============================================================================================================================
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                     -4-
<PAGE>

<TABLE>
<CAPTION>
                                          PATHFINDER BANCORP, INC.
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Unaudited)

                                                                        For the nine          For the nine
                                                                        months ended           months ends
                                                                        September 30,         September 30,
                                                                                2007                  2006
-----------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                                       <C>                <C>
OPERATING ACTIVITIES
  Net income                                                                 $    637            $    713
  Adjustments to reconcile net income to net cash
    provided by operating activities:
  Provision for loan losses                                                       280                  23
  Proceeds from sales of loans                                                  3,000                   -
  Originations of loans held-for-sale                                          (2,973)                  -
  Realized (gains) losses on sale of:
   Foreclosed real estate                                                         (15)                 34
   Loans                                                                          (27)                  -
   Available-for-sale investment securities                                      (108)                  9
  Premises and equipment                                                            -                 (13)
  Depreciation                                                                    559                 561
  Amortization of intangible asset                                                166                 166
  Amortization of deferred financing costs                                         15                  23
  Amortization of mortgage servicing rights                                        37                  77
  Increase in value of bank owned life insurance                                 (169)               (150)
  Net amortization of premiums and discounts on investment securities              78                 116
  Decrease in accrued interest receivable                                          69                  42
  Net change in other assets and liabilities                                      (18)                 63
------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                       1,531               1,664
------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
  Purchase of investment securities available-for-sale                        (17,352)            (10,985)
  Net (purchase) redemption of Federal Home Loan Bank stock                       (81)                 33
  Proceeds from maturities and principal reductions of
    investment securities available-for-sale                                   14,150              15,792
  Proceeds from sale:
    Available-for-sale investment securities                                      359                 771
    Real estate acquired through foreclosure                                      276                 456
    Premises and equipment                                                         33                 145
  Net increase in loans                                                       (12,886)             (7,114)
  Purchase of premises and equipment                                             (602)               (275)
------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                         (16,103)             (1,177)
------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
  Net increase (decrease) in demand deposits, NOW accounts
    savings accounts, money market deposit accounts, MMDA
    accounts and escrow deposits                                                7,351             (10,226)
  Net increase in time deposits                                                 2,983              11,770
  Net proceeds from short term borrowings                                       9,000               1,300
  Payments on long-term borrowings                                            (11,350)             (2,000)
     Proceeds from long-term borrowings                                         4,000                   -
     Proceeds from trust preferred obligation                                   5,000                   -
     Payments on trust preferred obligation                                    (5,000)                  -
  Proceeds from exercise of stock options                                         114                  11
  Cash dividends paid                                                            (440)               (433)
------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                      11,658                 422
------------------------------------------------------------------------------------------------------------

   (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                            (2,914)                909
 Cash and cash equivalents at beginning of period                              13,723               7,895
------------------------------------------------------------------------------------------------------------
  CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $ 10,809            $  8,804
============================================================================================================

NON-CASH INVESTING ACTIVITY
  Conversion of Holding Company advance to loan receivable                   $     -             $  1,101
  Transfer of loans to foreclosed real estate                                    109                  249

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                     -5-
<PAGE>

                            PATHFINDER BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



(1) BASIS OF PRESENTATION

The  accompanying  unaudited  consolidated  financial  statements  of Pathfinder
Bancorp, Inc. and its wholly owned subsidiaries have been prepared in accordance
with  U.S.  generally  accepted  accounting  principles  for  interim  financial
information  and  the  instructions  for  Form  10-QSB  and  Regulation  S-B.
Accordingly,  they do not include all of the information and footnotes necessary
for  a  complete  presentation  of  consolidated  financial position, results of
operations,  and  cash  flows  in  conformity with generally accepted accounting
principles.  In the opinion of management, all adjustments, consisting of normal
recurring  accruals,  considered  necessary  for  a  fair presentation have been
included.  Certain  amounts  in  the 2006 consolidated financial statements have
been  reclassified  to  conform  to  the  current  period  presentation.  These
reclassifications  had  no  effect  on  net  income  as  previously  reported.

The  following  material under the heading "Management's Discussion and Analysis
or  Plan  of  Operation"  is  written with the presumption that the users of the
interim  financial statements have read, or have access to, the Company's latest
audited  financial  statements  and  notes  thereto,  together with Management's
Discussion and Analysis or Plan of Operation as of December 31, 2006 and for the
three  year  period  then  ended.  Therefore, only material changes in financial
condition  and  results  of operations are discussed in the remainder of Part 1.

Operating results for the three and nine months ended September 30, 2007 are not
necessarily  indicative  of the results that may be expected for the year ending
December  31,  2007.

(2) EARNINGS PER SHARE

Basic  earnings  per  share  has  been  computed  by  dividing net income by the
weighted average number of common shares outstanding throughout the three months
and nine months ended September 30, 2007 and 2006, using 2,483,532 and 2,463,482
weighted  average  common  shares  outstanding  for  the  three months ended and
2,482,886  and  2,463,250  for  the  nine  months ended, respectively.   Diluted
earnings per share for the three months and nine months ended September 30, 2007
and  2006  have been computed using 2,487,732 and 2,483,465 for the three months
ended  and  2,489,292  and  2,482,069  for  the nine months ended, respectively.
Diluted earnings per share gives effect to weighted average shares that would be
outstanding  assuming  the  exercise  of issued stock options using the treasury
stock  method.

                                     -6-
<PAGE>

(3) PENSION BENEFITS

The composition of net periodic benefit plan cost for the three months and nine
months ended September 30, is as follows:


<TABLE>
<CAPTION>



                                 FOR THE THREE MONTHS     FOR THE NINE MONTHS
                                  ENDED SEPTEMBER 30,      ENDED SEPTEMBER 30,
(IN THOUSANDS)                      2007      2006           2007      2006
------------------------------------------------------------------------------
<S>                              <C>        <C>           <C>       <C>
Service cost                      $   49     $  48         $  147     $ 144
Interest cost                         68        63            204       189
Expected return on plan assets       (98)      (92)          (294)     (276)
Amortization of net losses            22        28             66        84
------------------------------------------------------------------------------
NET PERIODIC COST                 $   41     $  47         $  123     $ 141
==============================================================================
</TABLE>

The Company previously disclosed in its consolidated financial statements for
the year ended December 31, 2006, that it expected to contribute $190,000 to its
pension plan in 2007.  As of September 30, 2007, $136,000 had been contributed
to the pension plan.

(4) OTHER COMPREHENSIVE INCOME

The components of other comprehensive income and related tax effects are as
follows:

<TABLE>
<CAPTION>
                                           FOR THE THREE MONTHS     FOR THE NINE MONTHS
                                            ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
(IN THOUSANDS)                                 2007      2006          2007       2006
----------------------------------------------------------------------------------------
<S>                                       <C>        <C>          <C>        <C>
Gross change in unrealized gains
  on securities available for sale          $  516     $ 1,430       $  206     $  513
Reclassification adjustment for
 (gains)  losses included in net income       (111)          -         (108)         9
-----------------------------------------------------------------------------------------
                                               405       1,430           98        522
Tax effect                                    (162)       (572)         (39)      (214)
-----------------------------------------------------------------------------------------
NET OF TAX AMOUNT                           $  243     $   858       $   59     $  308
=========================================================================================
</TABLE>

The components of other comprehensive income and related tax effects are as
follows:

<TABLE>
<CAPTION>
<S>                                                  <C>              <C>
                                                       SEPTEMBER 30,    DECEMBER 31,
(IN THOUSANDS)                                                 2007            2006
---------------------------------------------------  ---------------  --------------

Unrealized losses on available for sale securities         $   (790)       $   (849)
Unrecognized pension and other postretirement
benefit losses                                                 (921)           (921)
------------------------------------------------------------------------------------
                                                           $ (1,711)       $ (1,770)
====================================================================================
</TABLE>

                                     -7-
<PAGE>

(5) GUARANTEES

The  Company  does  not  issue  any  guarantees  that  would  require  liability
recognition  or  disclosure,  other than its standby letters of credit.  Standby
letters of credit are conditional commitments issued by the Company to guarantee
the  performance  of  a  customer  to  a third party.  Generally, all letters of
credit,  when  issued  have  expiration  dates within one year.  The credit risk
involved  in issuing letters of credit is essentially the same as those that are
involved  in  extending  loan  facilities to customers.  The Company, generally,
holds  collateral  and/or personal guarantees supporting these commitments.  The
Company  had $1.7 million of standby letters of credit as of September 30, 2007.
Management  believes  that  the  proceeds  obtained  through  a  liquidation  of
collateral  and  the  enforcement of guarantees would be sufficient to cover the
potential amount of future payments required under the corresponding guarantees.
The  current  amount  of  the  liability as of September 30, 2007 for guarantees
under  standby  letters  of  credit  issued  is  not  material.

(6) NEW ACCOUNTING PRONOUNCEMENTS

In  July  2006,  the  FASB  issued  FASB  Interpretation No. 48, "Accounting for
Uncertainty  in  Income Taxes-an Interpretation of FASB Statement No. 109" ("FIN
48"),  which  clarifies  the  accounting  for uncertainty in tax positions. This
Interpretation  requires  that companies recognize in their financial statements
the  impact of a tax position, if that position is more likely than not of being
sustained  on audit, based on the technical merits of the position. In May 2007,
the  FASB issued FASB Staff Position ("FSP") FIN 48-1, "Definition of Settlement
in FASB Interpretation No. 48" ("FSP FIN 48-1").  FSP FIN 48-1 provides guidance
on  how  to  determine  whether  a  tax  position is effectively settled for the
purpose  of recognizing previously unrecognized tax benefits.  The provisions of
FIN  48  and  FSP  FIN 48-1 are effective for years beginning after December 15,
2006,  with the cumulative effect of the change in accounting principle recorded
as  an  adjustment  to  opening  retained  earnings.  The  Company  adopted  the
provisions  of FIN 48 and FSP FIN 48-1, as required, on January 1, 2007, with no
impact  on  the  Company's  consolidated  financial  position  and  results  of
operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, ("SFAS
157") which defines fair value, establishes a framework for measuring fair value
under  GAAP,  and  expands  disclosures  about fair value measurements. SFAS 157
applies  to  other  accounting  pronouncements that require or permit fair value
measurements.  The new guidance is effective for financial statements issued for
fiscal  years  beginning after November 15, 2007, and for interim periods within
those fiscal years. We are currently evaluating the potential impact, if any, of
the  adoption  of  SFAS  157  on our consolidated financial position, results of
operations  and  cash  flows.

In  February  2007,  the  FASB  issued  SFAS  No. 159, The Fair Value Option for
Financial  Assets  and  Financial  Liabilities  - Including an Amendment of FASB
Statement  No.  115,  ("SFAS 159"). This standard permits an entity to choose to
measure  many  financial instruments and certain other items at fair value. Most
of  the provisions in SFAS 159 are elective; however, the amendment to SFAS 115,
Accounting for Certain Investments in Debt and Equity Securities, applies to all
entities with available-for-sale and trading securities.   The fair value option
established by SFAS 159 permits all entities to choose to measure eligible items
at  fair  value  at  specified  election  dates.  A  business entity will report
unrealized  gains  and  losses on items for which the fair value option has been
elected  in  earnings  at each subsequent reporting date. The fair value option:
(a)  may  be  applied  instrument  by instrument, with a few exceptions, such as
investments  otherwise  accounted  for  by the equity method; (b) is irrevocable
(unless  a  new  election  date  occurs);  and  (c)  is  applied  only to entire
instruments  and  not to portions of instruments.  SFAS 159 is effective for the
Company  as of January 1, 2008, unless early adoption is elected. The Company is

                                     -8-
<PAGE>

currently  analyzing  the effects of this interpretation but does not expect its
implementation  will  have  a  significant  impact on the Company's consolidated
financial  condition  or  results  of  operations.

EITF 06-4

In  September  2006,  the  FASB's  Emerging Issues Task Force (EITF) issued EITF
Issue No. 06-4, "Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split Dollar Life Insurance  Arrangements" ("EITF 06-4").
EITF  06-4 requires the recognition of a liability related to the postretirement
benefits covered by an endorsement split-dollar life insurance arrangement.  The
consensus  highlights  that  the  employer  (who is also the policyholder) has a
liability  for  the  benefit  it  is providing to its employee.  As such, if the
policyholder  has  agreed  to  maintain  the  insurance  policy in force for the
employee's  benefit  during his or her retirement, then the liability recognized
during  the  employee's active service period should be based on the future cost
of insurance to be incurred during the employee's retirement.  Alternatively, if
the  policy holder has agreed to provide the employee with a death benefit, then
the liability for the future death benefit should be recognized by following the
guidance in SFAS No. 106 or Accounting Principles Board (APB) Opinion No. 12, as
appropriate.  For  transition,  an entity can choose to apply the guidance using
either of the following approaches: (a) a change in accounting principle through
retrospective application to all periods presented or (b) a change in accounting
principle  through  a  cumulative-effect  adjustment  to the balance in retained
earnings  at  the  beginning  of the year of adoption.  The EITF is effective in
fiscal  years  beginning after December 15, 2007, with early adoption permitted.
The  Company does not believe that the implementation of this guidance will have
a  material  impact  on  the  Company's  consolidated  financial  statements.

EITF 06-5

On  September  7,  2006,  the  Task Force reached a conclusion on EITF Issue No.
06-5,  "Accounting for Purchases of Life Insurance - Determining the Amount That
Could  Be  Realized  in  Accordance  with  FASB  Technical  Bulletin  No.  85-4,
Accounting  for  Purchases  of  Life Insurance" ("EITF 06-5"). The scope of EITF
06-5  consists  of six separate issues relating to accounting for life insurance
policies purchased by entities protecting against the loss of "key persons." The
six  issues  are  clarifications of previously issued guidance on FASB Technical
Bulletin  No.  85-4.  EITF  06-5  is  effective for fiscal years beginning after
December  15,  2006. The adoption of EITF 06-5 did not have a material impact on
the  Company's  consolidated  financial  statements.

EITF 06-10

In  March  2007,  the  FASB  ratified Emerging Issues Task Force Issue No. 06-10
"Accounting  for  Collateral  Assignment Split-Dollar Life Insurance Agreements"
("EITF 06-10"). EITF 06-10 provides guidance for determining a liability for the
postretirement  benefit obligation as well as recognition and measurement of the
associated  asset  on  the  basis  of  the  terms  of  the collateral assignment
agreement. EITF 06-10 is effective for fiscal years beginning after December 15,
2007.  The  Company  is  currently  assessing  the  impact  of EITF 06-10 on its
consolidated  financial  position  and  results  of  operations.

                                     -9-
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

Throughout  the  Management's  Discussion  and  Analysis ("MD&A") the term, "the
Company",  refers to the consolidated entity of Pathfinder Bancorp, Inc. and its
wholly  owned  subsidiary,  Pathfinder  Bank.  Pathfinder  Commercial  Bank,
Pathfinder  REIT,  Inc.  and  Whispering Oaks Development, Inc. represent wholly
owned  subsidiaries  of  Pathfinder  Bank.  At  September  30,  2007, Pathfinder
Bancorp,  M.H.C.,  the Company's mutual holding company parent, whose activities
are  not included in the MD&A, held  63.7% of the Company's common stock and the
public  held  36.3%.

The  following discussion reviews the Company's financial condition at September
30,  2007  and  the  results  of operations for the three months and nine months
ended  September  30,  2007  and  September  30,  2006.

This  Quarterly  Report contains certain "forward-looking statements" within the
meaning  of  the  Private  Securities  Litigation  Reform  Act  of  1995.  Such
statements  are  subject  to  certain  risks and uncertainties, including, among
other  things,  changes  in  economic  conditions  in the Company's market area,
changes  in  policies  by  regulatory  agencies, fluctuations in interest rates,
demand for loans in the Company's market areas and competition, that could cause
actual results to differ materially from historical earnings and those presently
anticipated  or  projected.  The  Company wishes to caution readers not to place
undue  reliance  on  any such forward-looking statements, which speak only as of
the  date  made.  The  Company  wishes to advise readers that the factors listed
above  could  affect  the  Company's  financial  performance and could cause the
Company's  actual  results  for  future  periods  to  differ materially from any
opinions  or  statements expressed with respect to future periods in any current
statements.

The  Company  does  not  undertake, and specifically declines any obligation, to
publicly  release  the  result  of  any  revisions  that  may  be  made  to  any
forward-looking  statements to reflect events or circumstances after the date of
such  statements  or  to  reflect the occurrence of anticipated or unanticipated
events.

The  Company's  net  income  is  primarily dependent on its net interest income,
which  is  the  difference  between interest income earned on its investments in
mortgage  loans,  investment  securities  and other loans, and its cost of funds
consisting  of  interest  accrued on deposits and borrowed funds.  The Company's
net  income is also affected by its provision for loan losses, as well as by the
amount  of  other  income,  including  income  from  fees and service charges on
deposit  accounts,  net  gains  and  losses  on  sales  of securities, loans and
foreclosed  real  estate,  and  other  expenses  such  as  salaries and employee
benefits,  building  occupancy  and  equipment costs, data processing and income
taxes.  Earnings  of  the  Company  also  are  affected significantly by general
economic  and  competitive  conditions,  particularly changes in market interest
rates,  government  policies and actions of regulatory authorities, which events
are  beyond  the  control  of  the Company.  In particular, the general level of
market interest rates which tend to be highly cyclical have a significant impact
on  our  earnings.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The  Company's consolidated financial statements are prepared in accordance with
accounting  principles  generally  accepted  in the United States of America and
follow  practices  within the banking industry.  Application of these principles
requires management to make estimates, assumptions and judgments that affect the
amounts  reported  in  the  consolidated  financial  statements and accompanying
notes.  These  estimates,  assumptions  and  judgments  are based on information

                                      -10-
<PAGE>

available  as  of  the  date  of  the financial statements; accordingly, as this
information changes, the financial statements could reflect different estimates,
assumptions  and judgments.  Certain policies inherently have a greater reliance
on  the  use  of estimates, assumptions and judgments and as such have a greater
possibility  of  producing  results  that  could  be  materially  different than
originally  reported.  Estimates,  assumptions  and judgments are necessary when
assets  and  liabilities  are  required  to be recorded at fair value or when an
asset  or  liability  needs  to  be  recorded  contingent  upon  a future event.
Carrying  assets  and  liabilities  at  fair  value  inherently  results in more
financial  statement volatility.  The fair values and information used to record
valuation  adjustments  for  certain  assets and liabilities are based on quoted
market  prices  or  are  provided  by other third-party sources, when available.
When  third  party  information  is  not  available,  valuation  adjustments are
estimated  in  good  faith  by  management.

The  most  significant accounting policies followed by the Company are presented
in  Note  1 to the consolidated financial statements included in the 2006 Annual
Report  on Form 10-K ("the Consolidated Financial Statements").   Beginning with
its  quarterly report for the March 31, 2007 quarter, the Company has elected to
file  its  Exchange  Act  reports  under the rules and regulations applicable to
small  business  issuers.

These  policies,  along  with  the  disclosures presented in the other financial
statement  notes  and in this discussion, provide information on how significant
assets  and  liabilities are valued in the consolidated financial statements and
how those values are determined.  Based on the valuation techniques used and the
sensitivity  of  financial  statement  amounts  to  the methods, assumptions and
estimates  underlying those amounts, management has identified the determination
of  the  allowance  for  loan losses to be the accounting area that requires the
most  subjective and complex judgments, and as such could be the most subject to
revision  as  new  information  becomes  available.

The  allowance for loan losses represents management's estimate of probable loan
losses  inherent  in the loan portfolio. Determining the amount of the allowance
for loan losses is considered a critical accounting estimate because it requires
significant  judgment  and the use of estimates related to the amount and timing
of  expected  future  cash flows on impaired loans, estimated losses on pools of
homogeneous  loans  based  on  historical  loss experience, and consideration of
current  economic  trends  and  conditions,  all  of which may be susceptible to
significant  change.  The  loan portfolio also represents the largest asset type
on  the  consolidated  balance  sheet.  Note  1  to  the  Consolidated Financial
Statements  describes  the  methodology used to determine the allowance for loan
losses,  and  a  discussion  of the factors driving changes in the amount of the
allowance  for  loan  losses  is  included  in  this  report.

The  Company  carries  all  of its investments at fair value with any unrealized
gains  or  losses  reported net of tax as an adjustment to shareholders' equity.
Based  on  management's  assessment,  at September 30, 2007, the Company did not
hold any security that had a fair value decline that is currently expected to be
other  than temporary.  Consequently, any declines in a specific security's fair
value below amortized cost have not been provided for in the consolidated income
statement.  The  Company's  ability to fully realize the value of its investment
in  various securities, including corporate debt securities, is dependent on the
underlying  creditworthiness  of  the  issuing  organization.

OVERVIEW

Net  income was $306,000, or $0.12 per diluted share, for the three months ended
September 30, 2007, as compared to $170,000, or $0.07 per diluted share, for the
same  period  in  2006.  During the third quarter of 2007, the Company continued
its  efforts  toward transforming its more traditional thrift balance sheet with
mostly residential loans as earning assets, toward that of a community bank with
a  more diverse mix of residential, consumer and commercial loans. On an average

                                      -11-
<PAGE>

balance  basis,  total  commercial loans comprised 32.3% of the total gross loan
portfolio  for the quarter ended September 30, 2007, as compared to 28.3% of the
portfolio  for  the  year  ended  December  31, 2006.  For the nine months ended
September  30,  2007,  the Company reported net income of $637,000, or $0.26 per
diluted  share as compared to $713,000, or $0.29 per diluted share, for the same
period  in  2006.

On  March  22, 2007, the Company issued a junior subordinated debenture for $5.0
million,  with  interest adjustable quarterly at a 1.65% spread over the 3-month
LIBOR.  The  Company used the proceeds from that issuance to retire its original
junior  subordinated  debenture  on  June 27, 2007, at its first call date.  The
original  obligation  was  for $5.0 million, adjustable quarterly at a spread of
3.45%  over  the 3-month LIBOR.  The new issuance and retirement of the original
junior  subordinated  debenture  will  result  in  an approximate pre-tax annual
savings  of  $90,000  to  the  Company.

Short-term borrowings increased $9.0 million, or 100%, when compared to December
31,  2006,  which  provided  the  bank  some  liquidity and to pay off long-term
borrowings,  which decreased $7.4 million, or 28%, when compared to December 31,
2006.

RESULTS OF OPERATIONS

The  return  on  average  assets and return on average shareholders' equity were
0.39%  and  5.80%,  respectively, for the three months ended September 30, 2007,
compared  with  0.23%  and  3.21%,  respectively,  for  the  three  months ended
September  30,  2006.  During  the  third  quarter of 2007, when compared to the
third quarter of 2006, net interest income and core noninterest income increased
$88,000  and  $105,000,  respectively, offset by increases in provision for loan
losses  and  noninterest  expenses  of  $155,000  and  $21,000,  respectively.

For  the  nine  months  ended  September 30, 2007, net interest income increased
$131,000  and  core  noninterest  income increased $142,000 when compared to the
nine  months ended September 30, 2006.  These increases were offset by increased
provisions  for  loan  losses and noninterest expenses of $257,000 and $285,000,
respectively.

NET INTEREST INCOME

Net  interest  income  is  the  Company's primary source of operating income for
payment  of  operating expenses and providing for loan losses.  It is the amount
by  which  interest  earned  on  loans, interest-earning deposits and investment
securities,  exceeds  the  interest  paid on deposits and other interest-bearing
liabilities.  Changes in net interest income and net interest margin result from
the  interaction  between the volume and composition of interest-earning assets,
interest-bearing  liabilities,  related  yields  and  associated  funding costs.

Net interest income, on a tax-equivalent basis increased $74,000 to $2.2 million
for  the  three  months  ended September 30, 2007 from $2.1 million for the same
period  of 2006. The Company's net interest margin for the third quarter of 2007
decreased  to  3.10%  from  3.12%  when  compared  to  the same quarter in 2006.
Management  anticipates  some  easing in the margin compression that the Company
has  been  experiencing  as short-term deposit product pricing and federal funds
borrowing  costs  are  reduced  to  reflect  recent reductions totaling 75 basis
points  by  the  Federal  Reserve  in  its  benchmark  interest-rate.    Average
interest-earning  assets  increased  5%  to  $282.5 million for the three months
ended  September  30,  2007  as  compared to $270.3 million for the three months
ended  September  30, 2006 and the yield on interest-earning assets increased 19
basis  points  to  6.13%  from 5.94% for the comparable periods. The increase in
average  interest-earning  assets was primarily attributable to a $16.2 million,
or  8.3%,  increase  in  loans  receivable, offset by a $4.0 million decrease in
investment  securities.  For  the three months ended September 30, 2007, average
interest-bearing  liabilities  increased  $8.5  million,  or 3%, and the cost of
funds  increased  26  basis  points

                                      -12-
<PAGE>

to  3.28%  from  3.02%  for the same period in 2006. The increase in the average
balance  of  interest-bearing  liabilities  resulted  primarily  from  an  $18.0
million,  or  9%,  increase  in  deposits,  offset  by  a  $9.6 million, or 24%,
reduction  in  borrowed  funds.

For  the  nine  months  ended  September  30,  2007,  net  interest income, on a
tax-equivalent  basis,  increased  slightly  to  $6.5  million, compared to $6.4
million  for  the  same  period  of  2006. Net interest margin decreased 9 basis
points, to 3.04% at September 30, 2007 from 3.13% at September 30, 2006. Average
interest-earning assets increased 4% to $284.6 million for the nine months ended
September  30,  2007  as  compared  to  $273.1 million for the nine months ended
September  30, 2006, and the yield on interest-earning assets increased 27 basis
points  to  6.08%  from 5.81% for the comparable period. The increase in average
interest-earning  assets was primarily attributable to a $13.8 million, or 7.1%,
increase  in  loans  receivable  and a $4.7 million increase in interest earning
deposits,  partially offset by a $6.9 million decrease in investment securities.

Average  interest-bearing  liabilities  increased  $6.5  million and the cost of
funds increased 44 basis points to 3.29% for the nine months ended September 30,
2007,  from  2.85%  for  the  same  period  in 2006. The increase in the average
balance of interest-bearing liabilities resulted primarily from a $16.5 million,
or  8%,  increase  in  average deposits, partially offset by a $10.1 million, or
25%,  reduction  in  borrowed  funds.

INTEREST  INCOME

Total  interest  income,  on  a  tax-equivalent  basis,  for  the  quarter ended
September 30, 2007, increased $318,000, or 8%, to $4.3 million from $4.0 million
for  the  quarter  ended  September  30,  2006.

The  average  balance  of  loans increased $16.2 million to $211.0 million, with
yields  increasing  11  basis  points  to  6.75%  for the third quarter of 2007.
Average  commercial real estate loans increased $9.8 million, while the yield on
those  loans decreased to 7.64% from 7.77% from the year earlier period. Average
commercial loans increased $3.0 million, and experienced a decrease in the yield
of  12  basis  points,  to  8.47% for the quarter ended September 30, 2007, from
8.59%,  in  the  quarter  ended September 30, 2006. The decrease in the yield on
commercial  loans  was  primarily  the result of new commercial loan origination
activity  taking  place  at  yields slightly lower than the average yield on the
existing  commercial  loan  portfolio.  Average  consumer  loans  increased $3.5
million,  or  17%,  while  the  average  yield decreased by 13 basis points. The
Company's  municipal  loan  portfolio increased $518,000, or 20%, when comparing
the third quarter of 2007 to the same period in 2006. The average tax equivalent
yield on the municipal loan portfolio increased to 6.55% in the third quarter of
2007 from 5.87% for the same period in 2006. Offsetting the above increases, was
a  $544,000,  or  1%, decrease in the average balance of residential real estate
loans.

Average  investment  securities  (taxable  and tax-exempt) for the quarter ended
September  30, 2007 decreased by $4.0 million, with a decrease in tax-equivalent
interest  income  from investments of $12,000, or 2%, when compared to the third
quarter of 2006.  The average tax-equivalent yield of the portfolio increased 16
basis points, to 4.29% from 4.13%. The decrease in average investment securities
was  primarily due to the scheduled maturity of short-term investments that were
acquired  during  the  first  quarter  of  2007  in  connection  with  the
collateralization  of  increasing  municipal  deposit  levels.

Total  interest  income,  on  a  tax-equivalent basis, for the nine months ended
September  30,  2007  increased  $1.1  million, or 9%, when compared to the nine
months  ended  September  30,  2006.

                                      -13-
<PAGE>

Average loans increased $13.8 million, with yields increasing 20 basis points to
6.74%  from  6.54%  for  the  nine months ended September 30, 2007.  The average
balance  of  commercial  real  estate  loans increased $8.8 million, with yields
decreasing slightly to 7.71% from 7.72%, average commercial loans increased $4.0
million,  with  yields increasing to 8.48% from 8.16% and average consumer loans
increased  $2.5 million, with yields increasing to 8.33% from 8.06% for the nine
months  ended September 30, 2007, as compared to the same period in 2006.  These
increases  were  offset  by decreases in the average balance of residential real
estate  loans  of  $1.2  million.

For  the  nine  months  ended September 30, 2007, tax-equivalent interest income
from investment securities decreased $80,000, or 3%, compared to the same period
in  2006.   The average tax-equivalent yield of the portfolio increased 24 basis
points,  to  4.30%  from 4.06%, offset by a $6.9 million decrease in the average
balance of investment securities, due to the scheduled maturities of  investment
securities  mentioned  above.

For  the  nine  months  ended  September  30,  2007, interest income on interest
earning  deposits increased $187,000, as the average balance of interest earning
deposits  increased  $4.7  million  and the yield on those deposits increased to
5.21%  from  4.57%, when compared to the same period of 2006.   The increase was
primarily  due  to  the  short-term  investment  of the proceeds from the second
junior  subordinated  debenture  combined  with liquidity generated from deposit
growth  out  pacing  general  loan  demand.

INTEREST EXPENSE

Total  interest  expense increased $245,000 for the three months ended September
30, 2007 compared to the same quarter in 2006, as the cost of funds increased 26
basis  points  to  3.28%  in  2007  from  3.02%  in 2006.  Average time deposits
increased  $18.6 million, combined with a 41 basis point increase in the cost of
funds  to  4.58%  from  4.17%.  Average  MMDA  accounts  increased $4.4 million,
combined with a 4 basis point increase in the cost of funds to 3.93% from 3.89%.
These increases were offset by decreases in average money management accounts to
$11.3  million  in 2007 from $13.0 million in 2006, and average savings accounts
to  $53.1  million  in  2007  from  $57.4  million in 2006.  Interest expense on
borrowings  decreased  by $121,000, or 23%, from the prior period.  The decrease
in  interest  expense on borrowings was the result of a $9.6 million decrease in
the  average balance of borrowed funds, combined with a 168 basis point decrease
in the cost of funds on the junior subordinated debenture that resulted from the
new  issuance  of  subordinated debentures and retirement of the old higher rate
issuance.

For  the  nine  months ended September 30, 2007, interest expense increased $1.0
million  when  compared  to  the  nine  months ended September 30, 2006. Deposit
interest  expense  for  the  comparable  periods increased $1.3 million, or 34%.
Average  time  deposits  increased $22.0 million, combined with a 59 basis point
increase in the related cost of funds to 4.51% from 3.92%. Average MMDA accounts
increased  $2.1  million,  combined with a 43 basis point increase to 4.09% from
3.66%.  These  increases were offset by decreases in average savings accounts to
$54.1  million  in  2007 from $60.7 million in 2006 and average money management
accounts  to  $11.6 million in 2007 from $13.6 million in 2006. Interest expense
on borrowings decreased by $318,000, or 20%, from the prior period. The decrease
in  interest  expense  on borrowings was the result of an $11.8 million, or 33%,
decrease  in  the average balance of borrowed funds. This decrease was offset by
an  increase in average junior subordinated debt of $1.7 million due to a second
junior  subordinated  debt entered into in March 2007. The original $5.0 million
issuance  was  retired  on  June  27, 2007. The cost of funds for the two junior
subordinated  debentures  decreased to 7.98% for the nine months ended September
30,  2007  as  compared  to  8.49% for the nine months ended September 30, 2006.

                                      -14-
<PAGE>

PROVISION FOR LOAN LOSSES

Provision  for  loan  losses  for the quarter ended September 30, 2007 increased
$155,000 from the same period in 2006.  The increased provision is reflective of
a  growing  loan  portfolio and one more heavily weighted to commercial term and
commercial  real  estate, which have higher inherent risk characteristics than a
consumer  real  estate  portfolio,  combined  with  an  increase  in  general
nonperforming  loan totals.  The Company's ratio of allowance for loan losses to
period  end  loans increased to 0.76% at September 30, 2007 as compared to 0.74%
at  December  31,  2006.  Nonperforming loans to period end loans have increased
to 0.94% at September 30, 2007 from 0.57% at December 31, 2006, primarily due to
the  nonperforming  status of two commercial loans. Management believes that the
existing  reserves  provided  on  these  loans  are  sufficient  to  cover  any
anticipated  losses.

NONINTEREST INCOME

The  Company's  noninterest  income  is  primarily  comprised of fees on deposit
account  balances  and  transactions, loan servicing, commissions, and net gains
(losses)  on  securities,  loans  and  foreclosed  real  estate.

The following table sets forth certain information on noninterest income for the
periods  indicated:

<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                             2007    2006   $CHANGE  % CHANGE
---------------------------------------------------------------------------------------------------
<S>                                                              <C>    <C>     <C>      <C>
Service charges on deposit accounts                              $  366  $  330   $   36      10.9%
Earnings on bank owned life insurance                                56      50        6      12.0%
Loan servicing fees                                                  72      55       17      30.9%
Debit card interchange fees                                          62      49       13      26.5%
Other charges, commissions and fees                                 114      81       33      40.7%
--------------------------------------------------------------------------------------------------
Core noninterest income                                             670     565      105      18.6%
Net gains on sales of investment securities                         111       -      111         -
Net gains (losses) on sale of loans and foreclosed real estate       11     (29)      40    -137.9%
--------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME                                         $  792  $  536   $  256      47.8%
==================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                           FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                             2007    2006   $CHANGE  % CHANGE
---------------------------------------------------------------------------------------------------
<S>                                                              <C>     <C>      <C>      <C>
Service charges on deposit accounts                              $1,060  $1,041   $   19       1.8%
Earnings on bank owned life insurance                               169     150       19      12.7%
Loan servicing fees                                                 186     160       26      16.3%
Debit card interchange fees                                         178     138       40      29.0%
Other charges, commissions and fees                                 317     279       38      13.6%
---------------------------------------------------------------------------------------------------
Core noninterest income                                           1,910   1,768      142       8.0%
Net gains (losses) on sales of investment securities                108      (9)     117   -1300.0%
Net gains (losses) on sale of loans and foreclosed real estate       42     (34)      76    -223.5%
---------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME                                         $2,060  $1,725   $  335      19.4%
===================================================================================================
</TABLE>

For the three months ended September 30, 2007, core noninterest income reflected
an  increase  of  $105,000,  or  18%,  when compared with the three months ended
September  30,  2006.  The  increase  in service charges on deposit accounts was
primarily  attributable to an increase in the number of deposit accounts and the
fees  associated  with deposit accounts. The increase in loan servicing fees was
primarily  due to an increase in commercial and mortgage loan late charges and a
reduction  in  the  amortization  of capitalized mortgage servicing rights.  The

                                      -15-
<PAGE>

increase  in  debit  card  fees  was primarily due to an increase in issued Visa
Debit  cards  and an increase in the usage from the existing customer base.  The
increase in other charges, commissions and fees was primarily due to an increase
in  internal  investment  services  activity  and  related  revenue.

For  the nine months ended September 30, 2007, core noninterest income increased
$142,000  or  8%,  when  compared with the nine months ended September 30, 2006.
The  increase  in core noninterest income for the nine months ended September 30
2007,  was  primarily  due  to  an  increase  in deposit account fees as deposit
related  charges  were  increased  to  be  more  in line with local competition,
increased  revenue  from  in-house  investment  services, increased late fees on
commercial  and mortgage loans and a reduction in capitalized mortgage servicing
rights  amortization,  combined with increased fees from the volume and usage of
the  Bank's  Visa  debit  card  and  an  increase in earnings on bank owned life
insurance.

NONINTEREST EXPENSE

The  following  table  sets forth certain information on noninterest expense for
the  quarters  indicated:

<TABLE>
<CAPTION>
                                 FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                2007     2006   $CHANGE  % CHANGE
------------------------------------------------------------------------
<S>                                 <C>     <C>     <C>       <C>
Salaries and employee benefits      $1,263   $1,307   $  (44)   -3.4%
Building occupancy                     305      291       14     4.8%
Data processing                        339      328       11     3.4%
Professional and other services        130      121        9     7.4%
Amortization of intangible assets       55       55        -     0.0%
Other expenses                         320      289       31    10.7%
------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES          $2,412   $2,391   $   21     0.9%
========================================================================
</TABLE>

<TABLE>
<CAPTION>
                                 FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                2007     2006    $CHANGE % CHANGE
-----------------------------------------------------------------------
<S>                                 <C>     <C>     <C>       <C>
Salaries and employee benefits      $3,764   $3,765   $  (1)     0.0%
Building occupancy                     935      913      22      2.4%
Data processing                      1,033      958      75      7.8%
Professional and other services        593      352     241     68.5%
Amortization of intangible assets      166      166       -      0.0%
Other expenses                         906      958     (52)    -5.4%
-----------------------------------------------------------------------
TOTAL NONINTEREST EXPENSES          $7,397   $7,112   $ 285      4.0%
=======================================================================
</TABLE>

Total  noninterest expense increased $21,000 and $285,000 for the three and nine
months  ended  September  30,  2007  when compared to the same periods for 2006,
respectively.  The  increase  in building occupancy for the three and nine month
periods  was  primarily  due to maintenance and landscaping improvements made to
several  of  the  branches  during  the  third quarter of 2007.  Data processing
expenses  for  the  three and nine month periods increased due to volume related
Internet  banking  costs,  customer check processing and ATM processing charges.
These  increases  were partially offset by decreased depreciation expenses.  The
increase  in  professional  and  other  services  for  the nine month period was
primarily  due  to  consulting  costs  associated  with  preparing  for,  and
implementing the enhanced internal control reporting requirements of Section 404
of  the  Sarbanes  Oxley  Act  and  ensuring  compliance  with  Bank  Secrecy
Act/Anti-Money  Laundering  regulations.  The  decrease in salaries and employee
benefits  for  the  three  month  period  primarily  resulted  from  deferred

                                      -16-
<PAGE>

compensation  costs  incurred in the third quarter of 2006 that did not recur in
2007  and  an  increase  in the deferred payroll expense directly related to the
increase  in  loan  originations.

INCOME TAX EXPENSE

Income  taxes  increased  $32,000  for  the  quarter ended September 30, 2007 as
compared  to  the  same  period  in  2006.  The  increase  in income tax expense
reflected  higher  pre-tax  income during the comparable quarters.  For the nine
months  ended  September  30,  2007,  income  tax  expense  remained constant at
$148,000,  despite  lower  levels of pre-tax income.  The effective tax rate was
18.9%  and  17.2% for the nine months ended September 30, 2007 and September 30,
2006,  respectively.  Although the Company continues to strive to reduce its tax
rate  from  the  statutory  rate  primarily  through the ownership of tax-exempt
investment  securities,  bank  owned  life  insurance  and  other  tax  savings
strategies,  the  increase  in  the effective tax rate is the result of less tax
exempt  interest  income  due  to  a  less  favorable  tax-free  yield  curve.

CHANGES IN FINANCIAL CONDITION

ASSETS

Total  assets increased approximately $12.5 million, or 4%, to $313.8 million at
September  30,  2007, from $301.4 million at December 31, 2006.  The increase in
total assets was primarily the result of an increase of $12.5 million, or 6%, in
net  loans  receivable and an increase in investment securities of $3.0 million,
or  5%,  offset  by a reduction in interest earning deposits of $6.3 million, or
95%.  The  loan  portfolio  growth  is  being driven by increased small business
commercial  loan  originations  occurring  both inside and outside the Company's
direct  market areas.  The Company continues to transform its traditional thrift
balance  sheet  toward  that  of  a  community  bank  with a more diverse mix of
residential, consumer and commercial loans.  The growth in investment securities
was  a  result of securities purchases during January and February 2007 in order
to  obtain  the required collateral for increased municipal deposit levels.  The
reduction  in  interest  earning  deposits was primarily due to excess liquidity
being  utilized  to  pay  off  maturing  long-term  advances.

At  September 30, 2007, the securities balance included a net unrealized loss on
available  for  sale securities of $1.3 million, versus a net unrealized loss of
$1.4  million  at December 31, 2006.  These unrealized losses relate principally
to  changes  in  interest  rates  subsequent  to  the  acquisition  of  specific
securities.  None of the securities in this category had an unrealized loss that
exceeded 8.1% of book value.  The Company has the intent and ability to hold the
individual  securities  to  maturity  or  market  price  recovery.

Management  has  reviewed its loan and mortgage-backed securities portfolios and
determined  that  no exposure exists to sub-prime or other high-risk residential
mortgages.  The  Company  is not in the practice of investing in, or originating
these  types  of  investments  or  loans.

LIABILITIES

Total liabilities increased $12.3 million, or 4%, to $292.8 million at September
30,  2007  from  $280.5 million at December 31, 2006.  Deposits increased  $10.3
million,  or  4%,  and  short-term  borrowings  increased  $9.0  million.  These
increases were offset by a reduction in long-term borrowings of $7.4 million, or
28%.

                                      -17-
<PAGE>

LOAN AND ASSET QUALITY AND ALLOWANCE FOR LOAN LOSSES

The  following  table  represents information concerning the aggregate amount of
nonperforming  assets:

<TABLE>
<CAPTION>

                                         SEPTEMBER    DECEMBER 31,    SEPTEMBER
(DOLLARS IN THOUSANDS)                        2007           2006          2006
--------------------------------------------------------------------------------
<S>                                     <C>          <C>             <C>
Nonaccrual loans:
Commercial real estate and commercial      $ 1,001        $    481      $   468
Consumer                                       143             125          130
Residential real estate mortgage               894             566          749
--------------------------------------------------------------------------------
Total nonaccrual loans                       2,038           1,172        1,347
--------------------------------------------------------------------------------
Total non-performing loans                   2,038           1,172        1,347
Foreclosed real estate                         310             471          497
--------------------------------------------------------------------------------
Total non-performing assets                $ 2,348        $  1,643      $ 1,844
================================================================================
Nonperforming loans to total loans            0.94%           0.57%        0.68%
Nonperforming assets to total assets          0.75%           0.54%        0.62%
================================================================================
</TABLE>

Total  nonperforming  loans increased 74% at September 30, 2007 when compared to
December 31, 2006.  The increase in nonperforming loans was primarily the result
of  the  nonperforming  status  of two commercial loan relationships. Management
believes that the underlying collateral and associated guarantees, combined with
the  existing reserves provided, are adequate to cover any potential losses that
may  occur  from  the  remediation  process.

The  allowance  for  loan losses at September 30, 2007 and December 31, 2006 was
$1.6  million  and  $1.5  million,  or  0.76%  and  0.74%  of  period end loans,
respectively.

CAPITAL

Shareholders'  equity  at  September  30,  2007 was $21.1 million as compared to
$20.9  million  at  December  31,  2006.  The Company added $637,000 to retained
earnings  through  net  income,  which was partially offset by cash dividends of
$604,000.  Additional  paid in capital increased $113,000 due to the exercise of
stock  options  during  the  first quarter of 2007. The Company's mutual holding
company parent, Pathfinder Bancorp, M.H.C, accepted the dividend for the quarter
ended  September  30,  2007,  payable  in  October  2007.

Risk-based capital provides the basis for which all banks are evaluated in terms
of  capital  adequacy.  Capital  adequacy  is  evaluated primarily by the use of
ratios  which  measure  capital  against  total assets, as well as against total
assets  that  are weighted based on defined risk characteristics.  The Company's
goal  is to maintain a strong capital position, consistent with the risk profile
of  its  subsidiary banks that supports growth and expansion activities while at
the same time exceeding regulatory standards.  At September 30, 2007, Pathfinder
Bank  exceeded  all  regulatory  required  minimum  capital  ratios  and met the
regulatory  definition  of  a  "well-capitalized"  institution,  i.e. a leverage
capital ratio exceeding 5%, a Tier 1 risk-based capital ratio exceeding 6% and a
total  risk-based  capital  ratio  exceeding  10%.

LIQUIDITY

Liquidity  management  involves  the  Company's  ability  to  generate  cash  or
otherwise obtain funds at reasonable rates to support asset growth, meet deposit
withdrawals, maintain reserve requirements, and otherwise operate the Company on
an ongoing basis.  The Company's primary sources of funds are deposits, borrowed
funds,  amortization  and  prepayment  of  loans  and  maturities  of investment

                                      -18-
<PAGE>

securities  and  other  short-term  investments, and earnings and funds provided
from operations.  While scheduled principal repayments on loans are a relatively
predictable  source  of  funds,  deposit  flows and loan prepayments are greatly
influenced  by general interest rates, economic conditions and competition.  The
Company  manages  the pricing of deposits to maintain a desired deposit balance.
In addition, the Company invests excess funds in short-term interest-earning and
other  assets,  which  provide  liquidity  to  meet  lending  requirements.

The  Company's liquidity has been enhanced by its membership in the Federal Home
Loan  Bank  of  New York, whose competitive advance programs and lines of credit
provide  the  Company  with  a safe, reliable and convenient source of funds.  A
significant  decrease  in  deposits  in  the  future could result in the Company
having  to  seek  other  sources  of funds for liquidity purposes.  Such sources
could  include,  but  are not limited to, additional borrowings, trust preferred
security  offerings,  brokered  deposits,  negotiated time deposits, the sale of
"available-for-sale"  investment  securities,  the sale of securitized loans, or
the  sale  of whole loans.  Such actions could result in higher interest expense
costs  and/or  losses  on  the  sale  of  securities  or  loans.

The  Company  has  a  number of existing credit facilities available to it.  The
combined  aggregate  amount  of credit available in connection with its existing
facilities  is  approximately  $49.3  million  at  September  30,  2007.

The  Asset  Liability  Management  Committees of the Company are responsible for
implementing  the  policies and guidelines for the maintenance of prudent levels
of  liquidity.  As  of  September  30, 2007, management reported to the Board of
Directors  that  the  Company  is  in  compliance  with  its  liquidity  policy
guidelines.

                                      -19-
<PAGE>

ITEM 3  - CONTROLS AND PROCEDURES

Under  the  supervision  and with the participation of the Company's management,
including  our  Chief Executive Officer and Chief Financial Officer, the Company
has  evaluated  the  effectiveness of the design and operation of its disclosure
controls  and  procedures  (as defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange  Act)  as  of  the  end of the period covered by this quarterly report.
Based  upon  that  evaluation,  the  Chief Executive Officer and Chief Financial
Officer  concluded that, as of the end of the period covered by this report, the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information  required  to  be disclosed in the reports that the Company files or
submits  under  the  Securities  Exchange  Act  of  1934 is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules  and  forms.  There  has  been  no  change  in the
Company's  internal  control  over  financial  reporting  during the most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonable  likely to
materially  affect,  the  Company's  internal  control over financial reporting.

                                      -20-
<PAGE>

PART II - OTHER INFORMATION
---------------------------

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS

Exhibit No.   Description
-----------   ---------------------------------------------------------------

31.1          Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive
                      Officer
31.2          Rule 13a-14(a) / 15d-14(a) Certification of the Chief Financial
                      Officer
32.1          Section 1350 Certification of the Chief Executive Officer
                      and  Chief  Financial Officer

                                      -21-
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the small
business issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

     PATHFINDER BANCORP, INC.
     ------------------------
     (Small business issuer)


November 14, 2007        /s/ Thomas W. Schneider
-----------------        -----------------------
Date:                    Thomas W. Schneider
                         President, Chief Executive Officer

November 14, 2007        /s/ James A. Dowd
-----------------        ----------------
Date:                    James A. Dowd
                         Senior Vice President, Chief Financial Officer

                                     -22-

<PAGE>

EXHIBIT 31.1

     Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer
                    Certification of Chief Executive Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     I, Thomas W. Schneider, certify that:

1.  I  have  reviewed  the September 30, 2007 quarterly report on Form 10-QSB of
Pathfinder  Bancorp,  Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material  fact or omit to state a material fact necessary to make the statements
made,  in  light of the circumstances under which such statements were made, not
misleading  with  respect  to  the  period  covered  by  this  report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information included in this report, fairly present in all material respects the
financial  condition, results of operations and cash flows of the small business
issuer  as  of,  and  for,  the  periods  presented  in  this  report;

4.  The  small  business issuer's other certifying officer and I are responsible
for  establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and
have:

          (a)  Designed  such  disclosure  controls  and  procedures,  or caused
          such  disclosure  controls  and  procedures  to  be designed under our
          supervision, to ensure that material information relating to the small
          business  issuer,  including  its  consolidated  subsidiaries, is made
          known  to  us by others within those entities, particularly during the
          period  in  which  this  report  is  being  prepared;

          (b)  Evaluated  the  effectiveness  of  the  small  business  issuer's
          disclosure  controls  and  procedures and presented in this report our
          conclusions  about  the  effectiveness  of the disclosure controls and
          procedures,  as  of the end of the period covered by this report based
          on  such  evaluation;  and

          (c)  Disclosed  in  this  report  any  change  in  the  small business
          issuer's  internal  control  over  financial  reporting  that occurred
          during  the  small  business  issuer's most recent fiscal quarter (the
          small business issuer's fourth fiscal quarter in the case of an annual
          report)  that  has  materially  affected,  or  is reasonably likely to
          materially  affect,  the small business issuer's internal control over
          financial  reporting;  and

5.  The  small  business issuer's other certifying officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to  the  small business issuer's auditors and the audit committee of
the  small  business  issuer's  board  of  directors  (or persons performing the
equivalent  functions):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
          design or operation of internal control over financial reporting which
          are  reasonably likely to adversely affect the small business issuer's
          ability  to  record,  process,  summarize  and  report  financial
          information;  and

          (b)  Any  fraud,  whether  or  not  material, that involves management
          or  other  employees who have a significant role in the small business
          issuer's  internal  control  over  financial  reporting.


November 14, 2007          /s/ Thomas W. Schneider
-----------------          -----------------------
Date                       Thomas  W. Schneider
                           President  and  Chief  Executive  Officer

<PAGE>



EXHIBIT 31.2

     Rule 13a-14(a) / 15d-14(a) Certification of the Chief Financial Officer
                    Certification of Chief Financial Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     I, James A. Dowd, certify that:

1.  I  have  reviewed  the September 30, 2007 quarterly report on Form 10-QSB of
Pathfinder  Bancorp,  Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material  fact or omit to state a material fact necessary to make the statements
made,  in  light of the circumstances under which such statements were made, not
misleading  with  respect  to  the  period  covered  by  this  report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information included in this report, fairly present in all material respects the
financial  condition, results of operations and cash flows of the small business
issuer  as  of,  and  for,  the  periods  presented  in  this  report;

4.  The  small  business issuer's other certifying officer and I are responsible
for  establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and
have:

          (a)  Designed  such  disclosure  controls  and  procedures,  or caused
          such  disclosure  controls  and  procedures  to  be designed under our
          supervision, to ensure that material information relating to the small
          business  issuer,  including  its  consolidated  subsidiaries, is made
          known  to  us by others within those entities, particularly during the
          period  in  which  this  report  is  being  prepared;

          (b)  Evaluated  the  effectiveness  of  the  small  business  issuer's
          disclosure  controls  and  procedures and presented in this report our
          conclusions  about  the  effectiveness  of the disclosure controls and
          procedures,  as  of the end of the period covered by this report based
          on  such  evaluation;  and

          (c)  Disclosed  in  this  report  any  change  in  the  small business
          issuer's  internal  control  over  financial  reporting  that occurred
          during  the  small  business  issuer's most recent fiscal quarter (the
          small business issuer's fourth fiscal quarter in the case of an annual
          report)  that  has  materially  affected,  or  is reasonably likely to
          materially  affect,  the small business issuer's internal control over
          financial  reporting;  and

5.  The  small  business issuer's other certifying officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to  the  small business issuer's auditors and the audit committee of
the  small  business  issuer's  board  of  directors  (or persons performing the
equivalent  functions):

          (a)  All  significant  deficiencies  and  material  weaknesses  in the
          design or operation of internal control over financial reporting which
          are  reasonably likely to adversely affect the small business issuer's
          ability  to  record,  process,  summarize  and  report  financial
          information;  and

          (b)  Any  fraud,  whether  or  not  material, that involves management
          or  other  employees who have a significant role in the small business
          issuer's  internal  control  over  financial  reporting.


November 14, 2007      /s/ James A. Dowd
-----------------      -----------------
Date                   James A. Dowd
                       Senior Vice President and Chief Financial Officer

<PAGE>

EXHIBIT 32.1

  Section 1350 Certification of the Chief Executive and Chief Financial Officer

                            Certification pursuant to
                             18 U.S.C. Section 1350,
                             as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

Thomas W. Schneider, President and Chief Executive Officer, and James A. Dowd,
Senior Vice President and Chief Financial Officer of Pathfinder Bancorp, Inc.
(the "Company"), each certify in his capacity as an officer of the Company that
he has reviewed the Quarterly Report of the Company on Form 10-QSB for the
quarter ended September 30, 2007 and that to the best of his knowledge:

     1.     the report fully complies with the requirements of Sections 13(a) of
the Securities Exchange Act of 1934; and

     2.     the information contained in the report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.

The purpose of this statement is solely to comply with Title 18, Chapter 63,
Section 1350 of the United States Code, as amended by Section 906 of the
Sarbanes-Oxley Act of 2002.





November 14, 2007        /s/ Thomas W. Schneider
-----------------        -----------------------
Date                     Thomas W. Schneider
                         President and Chief Executive Officer


November 14, 2007        /s/ James A. Dowd
-----------------        -----------------
Date                     James A. Dowd
                         Senior Vice President and Chief Financial
                          Officer