Core Viewpoint - Lake Shore Bancorp, Inc. is undergoing a "second step" conversion from a mutual holding company structure to a stock holding company structure, which will involve regulatory approval and a stock offering to depositors [1][4]. Group 1: Company Structure and Ownership - Lake Shore, MHC currently owns approximately 63.4% of the outstanding shares of common stock of Lake Shore Bancorp, Inc., acquired during the initial public offering in 2006 [2]. - The proposed transaction will create a new stock holding company for the Bank, which will succeed Lake Shore Bancorp, Inc. and offer shares of common stock to depositors in a subscription offering [3]. Group 2: Stock Offering Details - Eligible account holders of the Bank as of December 31, 2023, will have first priority non-transferable subscription rights to subscribe for shares of the new stock holding company [3]. - The total number of shares to be issued will be based on the pro forma market value determined by an independent appraisal, and minority shareholders will receive shares based on an established exchange ratio [3]. Group 3: Timeline and Approvals - The transaction is expected to be completed in the third quarter of 2025, pending regulatory approval and approval from both the members of Lake Shore, MHC and the shareholders of Lake Shore Bancorp, Inc. [4].

Financial Performance - Net income for Q4 2024 was $1.5 million, a 96.1% increase from $749,000 in Q4 2023, and for the full year, net income was $4.9 million, a 2.3% increase from $4.8 million in 2023[1][3] - Net income for the year ended December 31, 2024, was $4.9 million, compared to $4.8 million for the year ended December 31, 2023[31] - Net income for the three months ended December 31, 2024, was $1,469 thousand, an increase of 10.3% from $1,332 thousand in the previous quarter[34] - Basic and diluted earnings per share increased to $0.26 in Q4 2024, up from $0.24 in Q3 2024[34] Income and Expenses - Net interest income for Q4 2024 decreased by $42,000, or 0.8%, to $5.3 million compared to Q3 2024, and decreased by $217,000, or 3.9%, compared to Q4 2023[3][5] - Non-interest income for Q4 2024 was $1.1 million, a 35.0% increase from $791,000 in Q3 2024, and a 15.7% increase from $923,000 in Q4 2023[15] - Non-interest income for the year ended December 31, 2024, was $3.3 million, a 25.4% increase from $2.6 million in 2023[16] - Non-interest expense for the year ended December 31, 2024, was $20.0 million, a decrease of $1.8 million, or 8.4%, compared to $21.8 million in 2023[18] - Interest expense for the year ended December 31, 2024, was $13.7 million, an increase of $4.3 million, or 46.2%, from $9.4 million in 2023[14] Asset and Capital Management - Total assets were $685.5 million at December 31, 2024, a decrease of $39.6 million, or 5.5%, from $725.1 million at December 31, 2023[25] - Stockholders' equity increased to $89.9 million at December 31, 2024, a $3.6 million increase, or 4.2%, compared to $86.3 million at December 31, 2023[26] - The Tier 1 Leverage ratio was 13.83% and the Total Risk-Based Capital ratio was 18.79% at December 31, 2024, indicating a well-capitalized position[3] - The total risk-based capital ratio remained stable at 18.79% in Q4 2024, slightly down from 18.85% in Q3 2024[34] Funding and Liquidity - The company's reliance on wholesale funding was reduced by $41.0 million, including the non-renewal of $16.0 million in brokered CDs and repayment of $25.0 million in FHLBNY borrowings[1][3] - Total deposits decreased to $573.0 million at December 31, 2024, a decrease of $17.9 million, or 3.0%, from $590.9 million at December 31, 2023[25] - Cash and cash equivalents decreased by $20.6 million, or 38.3%, from $53.7 million at December 31, 2023, to $33.1 million at December 31, 2024[25] - Total borrowings decreased to $10.3 million at December 31, 2024, a decrease of $25.0 million, or 70.9%, compared to $35.3 million as of December 31, 2023[26] Credit Quality - The allowance for credit losses on loans decreased to $5.1 million as of December 31, 2024, down from $6.5 million as of December 31, 2023[22] - Non-performing assets as a percentage of total assets increased to 0.55% at December 31, 2024, compared to 0.47% at December 31, 2023, due to a decrease in total assets of $39.6 million, or 5.5%[22] - Non-performing loans as a percentage of total net loans rose to 0.80% in Q4 2024 from 0.74% in Q3 2024[34] - The company recorded a credit to the provision for credit losses of $613,000 for the fourth quarter of 2024[23] Operational Efficiency - The efficiency ratio for Q4 2024 was 82.30%, compared to 77.96% in Q3 2024, indicating a decline in operational efficiency[34] - The return on average assets improved to 0.85% in Q4 2024 from 0.76% in Q3 2024[34] Future Outlook - The company anticipates a challenging earnings environment in 2025 while continuing efforts to increase shareholder value[2]

Core Viewpoint - Lake Shore Bancorp, Inc. reported a significant increase in net income for the fourth quarter and the full year of 2024, driven by reduced non-interest expenses and improved operational efficiency [1][2]. Financial Performance - The company reported unaudited net income of $1.5 million, or $0.26 per diluted share, for Q4 2024, compared to $749,000, or $0.13 per diluted share, for Q4 2023, marking a 96.1% increase [1][7]. - For the year ended December 31, 2024, net income was $4.9 million, or $0.88 per diluted share, compared to $4.8 million, or $0.82 per diluted share, for 2023, reflecting a 2.3% increase [1][7]. Net Interest Income - Net interest income for Q4 2024 decreased by $42,000, or 0.8%, to $5.3 million compared to Q3 2024, and decreased by $217,000, or 3.9%, compared to Q4 2023 [3][4]. - For the year ended December 31, 2024, net interest income decreased by $3.3 million, or 13.5%, to $21.1 million compared to $24.4 million for 2023 [4][9]. Non-Interest Income - Non-interest income for Q4 2024 was $1.1 million, an increase of $277,000, or 35.0%, compared to Q3 2024, and an increase of $145,000, or 15.7%, compared to Q4 2023 [14]. - For the year ended December 31, 2024, non-interest income was $3.3 million, an increase of $669,000, or 25.4%, compared to 2023 [15]. Non-Interest Expense - Non-interest expense for Q4 2024 was $5.3 million, an increase of $72,000, or 1.4%, compared to Q4 2023 [16]. - For the year ended December 31, 2024, non-interest expense decreased by $1.8 million, or 8.4%, to $20.0 million compared to $21.8 million for 2023 [17]. Balance Sheet Summary - Total assets as of December 31, 2024, were $685.5 million, a decrease of $39.6 million, or 5.5%, compared to $725.1 million at December 31, 2023 [24]. - Total deposits decreased to $573.0 million, a decrease of $17.9 million, or 3.0%, compared to $590.9 million at December 31, 2023 [24]. - Stockholders' equity increased to $89.9 million, a $3.6 million increase, or 4.2%, compared to $86.3 million at December 31, 2023 [25]. Credit Quality - The allowance for credit losses on loans was $5.1 million as of December 31, 2024, down from $6.5 million as of December 31, 2023 [20]. - Non-performing assets as a percentage of total assets increased to 0.55% at December 31, 2024, compared to 0.47% at December 31, 2023 [20][21].

Financial Performance - Net income for the three months ended September 30, 2024, was $1,332 thousand, down from $1,571 thousand for the same period in 2023, a decrease of about 15.2%[10] - Basic and diluted earnings per share for the three months ended September 30, 2024, were $0.24, down from $0.27 in the same period of 2023, a decline of about 11.1%[10] - Total comprehensive income for the three months ended September 30, 2024, was $3,197 thousand, compared to a loss of $(1,599) thousand in the same period of 2023, showing a significant improvement[11] - Net income for the nine months ended September 30, 2024, was $3,462,000, a decrease of 15% compared to $4,071,000 for the same period in 2023[17] - Net income for the quarter ending March 31, 2024, was $1,116,000, an increase from $1,014,000 in the previous quarter[14] Assets and Liabilities - Total assets decreased from $725,118 thousand as of December 31, 2023, to $697,596 thousand as of September 30, 2024, representing a decline of approximately 3.5%[6] - Total liabilities decreased from $638,845 thousand as of December 31, 2023, to $607,719 thousand as of September 30, 2024, a reduction of approximately 4.9%[7] - Total stockholders' equity increased from $86,273 thousand as of December 31, 2023, to $89,877 thousand as of September 30, 2024, an increase of approximately 3.0%[8] Income Sources - Total interest income increased to $8,851 thousand for the three months ended September 30, 2024, compared to $8,721 thousand in the same period of 2023, reflecting a growth of approximately 1.5%[10] - Non-interest income rose to $791 thousand for the three months ended September 30, 2024, up from $605 thousand in the same period of 2023, an increase of about 30.7%[10] Dividends and Stockholder Returns - Dividends declared per share increased to $0.18 for the three months ended September 30, 2024, compared to no dividends declared in the same period of 2023[10] - Cash dividends declared were $0.18 per share, totaling $361,000 for the quarter ending September 30, 2024[14] Credit Losses and Provisions - The provision for credit losses for the three months ended September 30, 2024, was $(229) thousand, compared to $(199) thousand for the same period in 2023, indicating a slight increase in credit loss provisions[10] - The allowance for credit losses on loans decreased to $5.5 million as of September 30, 2024, down from $6.5 million as of December 31, 2023, indicating a reduction of about 14.9%[33] - The company recorded a provision for credit losses of $(129) million for the nine months ended September 30, 2024, compared to $(220) million for the same period in 2023[47] Cash Flow and Investments - Net cash used in operating activities was $(875,000) for the nine months ended September 30, 2024, compared to $4,625,000 for the same period in 2023[17] - Net cash provided by investing activities increased to $27,950,000 for the nine months ended September 30, 2024, up from $19,943,000 in 2023[17] - Cash and cash equivalents at the end of the period were $49,981,000, an increase from $45,999,000 at the end of September 30, 2023[17] Loan Portfolio - As of September 30, 2024, the total gross loans amounted to $541.0 million, a decrease from $558.5 million as of December 31, 2023, reflecting a decline of approximately 3.0%[33] - The total gross loans receivable reached $541,048 million as of September 30, 2024, reflecting a significant portfolio size[43] - The total past due loans as of September 30, 2024, amounted to $4,330 million, with $1,212 million past due by 30-59 days and $502 million past due by 60-89 days[50] Stock Options and Compensation - As of September 30, 2024, there were 29,142 stock options outstanding with a weighted average exercise price of $14.38, down from 58,857 at the beginning of the year[80] - The company granted 9,306 stock options under the Equity Incentive Plan at an exercise price of $10.69 during the nine months ended September 30, 2024[87] - Stock-based compensation costs for the three months ended September 30, 2024, were $109,000, an increase of 75.8% from $62,000 in the same period of 2023[78] Securities and Unrealized Losses - The company reported a gross unrealized loss of $11,089,000 on total securities as of September 30, 2024[24] - The fair value of mortgage-backed securities was reported at $23.8 million as of September 30, 2024, down from an amortized cost of $27.1 million[32] - The company considers noncredit-related factors, such as changes in interest rates, as the primary reason for unrealized losses on securities[28]

Financial Performance - Net income for Q3 2024 was $1.3 million, an increase of $216,000, or 19.4%, compared to Q2 2024, but a decrease of $300,000, or 18.8%, compared to Q3 2023[1][2]. - Non-interest income for Q3 2024 was $791,000, an increase of $53,000, or 7.2%, compared to Q2 2024, and an increase of $186,000, or 30.7%, compared to Q3 2023[10]. - Net income for the three months ended September 30, 2024, was $1,332 thousand, compared to $1,571 thousand for the same period in 2023, reflecting a decline of approximately 15.2%[22]. - Basic and diluted earnings per share for the three months ended September 30, 2024, were $0.24, down from $0.27 for the same period in 2023, a decrease of approximately 11.1%[22]. Interest Income and Margin - Net interest income increased by $177,000, or 3.4%, to $5.4 million in Q3 2024 compared to Q2 2024, but decreased by $912,000, or 14.5%, compared to Q3 2023[3]. - Net interest income for the three months ended September 30, 2024, was $5,383 thousand, down from $6,295 thousand for the same period in 2023, a decrease of about 14.5%[22]. - Net interest margin improved to 3.28% in Q3 2024, up 14 basis points from 3.14% in Q2 2024[2]. - The net interest margin for the three months ended September 30, 2024, was 3.28%, compared to 3.74% for the same period in 2023, reflecting a decline of about 12.3%[23]. Assets and Liabilities - Total assets decreased by $27.5 million, or 3.8%, to $697.6 million as of September 30, 2024, compared to $725.1 million at December 31, 2023[16]. - Total assets decreased from $725,118 thousand as of December 31, 2023, to $697,596 thousand as of September 30, 2024, representing a decline of approximately 3.5%[21]. - Total borrowings decreased by $25.0 million, or 70.9%, to $10.3 million as of September 30, 2024, as the company reduced its FHLBNY borrowings[17]. - Long-term debt decreased significantly from $35,250 thousand as of December 31, 2023, to $10,250 thousand as of September 30, 2024, a reduction of approximately 70.1%[21]. Deposits and Equity - Total deposits, excluding brokered CDs, increased by $12.6 million, or 2.2%, to $587.6 million as of September 30, 2024[17]. - Total deposits as of September 30, 2024, were $587,563 thousand, a slight decrease from $590,924 thousand as of December 31, 2023, indicating a reduction of about 0.6%[21]. - Stockholders' equity increased by $3.6 million, or 4.2%, to $89.9 million as of September 30, 2024, primarily due to $3.5 million in net income earned during the first nine months of 2024[17]. Credit Quality - The allowance for credit losses on loans was $5.5 million at September 30, 2024, down from $6.5 million at December 31, 2023[14]. - The provision for credit losses for the three months ended September 30, 2024, was $(229) thousand, compared to $(199) thousand for the same period in 2023, showing an increase in credit loss provisions[22]. - Non-performing loans as a percentage of net loans increased to 0.74% in September 2024 from 0.60% in December 2023[25]. - Non-performing assets as a percentage of total assets rose to 0.57% in September 2024 from 0.47% in December 2023[25]. - Allowance for credit losses as a percentage of net loans decreased to 1.01% in September 2024 from 1.16% in December 2023[25]. Efficiency and Returns - Non-interest expense decreased to $4.8 million in Q3 2024, a decrease of $84,000, or 1.7%, compared to Q2 2024, and a decrease of $383,000, or 7.4%, compared to Q3 2023[12]. - Return on average assets decreased to 0.76% in September 2024 from 0.87% in September 2023[25]. - Return on average equity declined to 6.03% in September 2024 compared to 7.48% in September 2023[25]. - Efficiency ratio worsened to 77.96% in September 2024 compared to 75.30% in September 2023[25]. Capital Ratios - Tier 1 leverage ratio improved to 13.37% in September 2024 from 12.68% in December 2023[27]. - Total risk-based capital ratio increased to 18.85% in September 2024 from 17.77% in December 2023[27]. - Book value per share increased to $15.67 in September 2024 from $15.17 in December 2023[27].

Financial Performance - Net income for the three months ended June 30, 2024, was $1,116 thousand, an increase of 36.8% compared to $816 thousand for the same period in 2023[10]. - Net income for the second quarter of 2024 was $1,116,000, up from $1,014,000 in the previous quarter, reflecting a growth of 10.1%[13]. - Net income for the six months ended June 30, 2024, was $2,130,000, a decrease of 14.8% compared to $2,500,000 for the same period in 2023[16]. - Net income for the three months ended June 30, 2024, was $2,130,000, down from $2,500,000 in the same period of 2023, representing a decrease of approximately 14.8%[65]. - Basic and diluted earnings per common share for the three months ended June 30, 2024, were $0.19, compared to $0.14 for the same period in 2023, reflecting a growth of 35.7%[10]. - Basic and diluted earnings per share decreased from $0.43 in 2023 to $0.36 in 2024, reflecting a decline of 16.3%[65]. Assets and Liabilities - Total assets decreased from $725,118 thousand as of December 31, 2023, to $711,042 thousand as of June 30, 2024, representing a decline of approximately 1.9%[6]. - Total liabilities decreased from $638,845 thousand at December 31, 2023, to $624,110 thousand at June 30, 2024, a reduction of approximately 2.3%[7]. - Total stockholders' equity increased from $86,273 thousand at December 31, 2023, to $86,932 thousand at June 30, 2024, an increase of 0.8%[8]. - As of June 30, 2024, total stockholders' equity was $86,932,000, an increase from $86,510,000 at March 31, 2024[13]. - Total deposits decreased slightly from $590,924 thousand at December 31, 2023, to $589,395 thousand at June 30, 2024, a decrease of 0.3%[7]. Income and Expenses - Net interest income after provision for credit losses for the six months ended June 30, 2024, was $10,976 thousand, down 17.4% from $13,317 thousand for the same period in 2023[10]. - Non-interest income increased to $738 thousand for the three months ended June 30, 2024, compared to $553 thousand for the same period in 2023, reflecting a growth of 33.5%[10]. - The company declared dividends of $0.18 per share for the three months ended June 30, 2024, consistent with the previous period[10]. - The company declared cash dividends of $0.18 per share, totaling $361,000 for the second quarter of 2024[13]. - Other comprehensive loss for the second quarter of 2024 was $421,000, net of tax benefit[13]. Cash Flow - Net cash provided by operating activities was $542,000, significantly down from $3,422,000 in the prior year, indicating a decline of 84.2%[16]. - Net cash provided by investing activities increased to $20,598,000 from $11,809,000, representing a growth of 74.5% year-over-year[16]. - Cash and cash equivalents at the end of the period were $60,987,000, up from $35,582,000, reflecting a growth of 71.2%[16]. Loans and Credit Quality - The total gross loans amounted to $546.7 million as of June 30, 2024, a decrease from $558.5 million as of December 31, 2023, representing a decline of approximately 2.0%[30]. - The allowance for credit losses on loans was $5.9 million as of June 30, 2024, down from $6.5 million as of December 31, 2023, indicating a reduction of about 8.5%[30]. - The company did not have any loans past due 90 days or more and still accruing as of June 30, 2024[42]. - The company reported charge-offs of $(5) for the quarter ending June 30, 2024, reflecting improved credit quality[37]. - The total amount of residential, one- to four-family loans classified as pass was $2,210 million for the year-to-date 2024, down from $11,992 million in 2023, indicating a significant decline[51]. Securities and Investments - Total debt securities available for sale had an amortized cost of $70,701,000 with gross unrealized losses of $13,451,000, resulting in a fair value of $57,279,000[22]. - The fair value of municipal bonds pledged as collateral for customer deposits was $31.7 million as of June 30, 2024, with gross unrealized losses of $9.1 million[25]. - The company recognized an unrealized gain of $11,000 on equity securities during the six months ended June 30, 2024, compared to $2,000 in the same period of 2023[29]. - The total fair value of securities as of June 30, 2024, was $57,309,000, with equity securities contributing $30,000[79][80]. - The company did not sell any debt securities during the three and six months ended June 30, 2024, while in the same period of 2023, it sold 23 municipal bonds and 2 mortgage-backed securities resulting in gross realized losses of $49,000[27]. Employee Compensation and Stock Options - Compensation expense related to stock-based compensation plans for the three months ended June 30, 2024, was $88,000, compared to $53,000 for the same period in 2023, reflecting a rise of 66.0%[69]. - The Employee Stock Ownership Plan (ESOP) compensation expense for the three months ended June 30, 2024, was $23,000, slightly up from $22,000 in the same period in 2023[75]. - The Company had no remaining options available for grant under the 2006 Stock Option Plan as of June 30, 2024, following its expiration on October 24, 2016[70]. - The Company’s stock options under the 2006 Stock Option Plan decreased from 58,857 options at the beginning of the year to 29,142 options at the end of the period, a reduction of 50.5%[70]. Miscellaneous - The company did not repurchase any shares of common stock during the three and six months ended June 30, 2024, with 30,626 shares remaining to be repurchased[88]. - A cash dividend of $0.18 per share was declared on July 31, 2024, expected to be paid on August 16, 2024[94]. - The total other comprehensive loss for the six months ended June 30, 2024, was $(1,542,000), with a net of tax amount of $(1,219,000)[91].

DUNKIRK, N.Y., July 31, 2024 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (the "Company") (NASDAQ: LSBK), the holding company for Lake Shore Savings Bank (the "Bank"), announced today that the Board of Directors declared a cash dividend of $0.18 per share on its outstanding common stock. The dividend is expected to be paid on August 16, 2024 to stockholders of record as of August 12, 2024. The Company received the written approval from the Federal Reserve Bank of Philadelphia (the "Reserve Bank") on July 8, ...

Core Insights - Lake Shore Bancorp, Inc. reported a net income of $1.1 million for Q2 2024, a 36.8% increase from $816,000 in Q2 2023, primarily due to reduced non-interest expenses [1][18] - For the first half of 2024, net income was $2.1 million, down from $2.5 million in the same period of 2023 [1] - The company reduced reliance on wholesale funding by $23 million while growing organic deposits by 1.65% in the first half of 2024 [1][18] Financial Performance - Net interest income for the first half of 2024 decreased by $2.2 million, or 17.3%, to $10.3 million compared to $12.5 million in the first half of 2023 [3] - Interest income for the first half of 2024 was $17.4 million, an increase of $942,000, or 5.7%, compared to $16.4 million in the first half of 2023 [4] - Non-interest income increased by $338,000, or 30.5%, to $1.4 million in the first half of 2024 compared to the same period in 2023 [6] Expense Management - Non-interest expense for Q2 2024 was $4.9 million, a decrease of $1.0 million, or 17.0%, from $5.9 million in Q2 2023 [7] - The decrease in non-interest expenses was attributed to a reduction in professional services expense by $451,000, or 53.2%, and a significant drop in advertising costs by $163,000, or 91.1% [7][25] Credit Quality - Non-performing assets as a percentage of total assets increased to 0.56% at June 30, 2024, from 0.47% at December 31, 2023 [8][41] - The allowance for credit losses on loans was $5.9 million at June 30, 2024, down from $6.5 million at December 31, 2023 [26] Balance Sheet Highlights - Total assets decreased by $14.1 million, or 1.9%, to $711 million at June 30, 2024, compared to $725.1 million at December 31, 2023 [28] - Stockholders' equity increased to $86.9 million at June 30, 2024, up $658,000, or 0.8%, from $86.3 million at December 31, 2023 [10] - Total deposits were $589.4 million at June 30, 2024, a slight decrease of $1.5 million, or 0.3%, from $590.9 million at December 31, 2023 [28] Capital Ratios - The company's Tier 1 Leverage ratio was 13.02% and the Total Risk-Based capital ratio was 18.64% at June 30, 2024, indicating a well-capitalized position [18][36]

Lake Shore Bancorp, Inc. Announces Second Quarter 2024 Financial Results "I am pleased with Lake Shore's earnings for the second quarter of 2024 and year-to-date. We continue to remain disciplined and focused on executing our strategic plan and it is beginning to bear results," stated Kim C. Liddell, President, CEO, and Director. "I am proud of our team and their efforts to enhance shareholder value and the overall performance of the organization." • Net income increased to $1.1 million during the second qu ...

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 000-51821 LAKE SHORE BANCORP, INC. (Exact name of registrant as specified in its charter) | United States | 20-4729288 | | --- | --- | | (State or other jurisdiction of inco ...