Lake Shore Bancorp(LSBK) - 2021 Q3 - Quarterly Report

Financial Performance - Total interest income for the three months ended September 30, 2021, increased to $6,465,000, up 9.2% from $5,922,000 in the same period of 2020[12] - Net interest income after provision for loan losses for the nine months ended September 30, 2021, was $15,888,000, a 15.9% increase from $13,717,000 in 2020[12] - Non-interest income for the three months ended September 30, 2021, was $707,000, a decrease of 8.3% compared to $771,000 in 2020[12] - Net income for the three months ended September 30, 2021, was $1,691,000, representing a 37.4% increase from $1,231,000 in 2020[12] - Net income for the nine months ended September 30, 2021, was $4,372,000, an increase from $3,315,000 in the same period of 2020, representing a growth of 31.9%[17] - Basic and diluted earnings per common share for the three months ended September 30, 2021, were $0.29, up from $0.21 in the same period of 2020[12] Expenses and Losses - Total non-interest expense for the nine months ended September 30, 2021, rose to $12,842,000, an increase of 10.2% from $11,655,000 in 2020[12] - The provision for loan losses for the three months ended September 30, 2021, was $0, down from $300,000 in 2020[12] - The provision for loan losses was $650,000 for the nine months ended September 30, 2021, down from $1,125,000 in the same period of 2020, reflecting improved asset quality[17] Dividends - Dividends declared per share increased to $0.14 for the three months ended September 30, 2021, from $0.12 in 2020[12] - Cash dividends declared were $0.13 per share for the first half of 2021, totaling $268,000, and increased to $0.14 per share for the third quarter, maintaining a consistent payout[17] - The Board of Directors declared a quarterly cash dividend of $0.14 per share on October 27, 2021, payable on November 19, 2021[114] - Lake Shore, MHC waived dividends totaling $509,000 and $1.5 million during the three and nine months ended September 30, 2021, respectively[114] - Cumulatively, Lake Shore, MHC has waived approximately $15.6 million of cash dividends as of September 30, 2021[114] Assets and Securities - The total cash and cash equivalents at the end of September 30, 2021, were $60,980,000, a decrease from $71,139,000 at the end of September 30, 2020[17] - The amortized cost of total securities as of September 30, 2021, was $82.458 million, with a fair value of $83.698 million, reflecting unrealized losses of $569,000[33] - The fair value of total securities as of September 30, 2021, was $83,698,000, including $2,257,000 in Level 1 and $81,441,000 in Level 2[97] - The estimated fair value of loans receivable, net, was $514,174,000 as of September 30, 2021[106] - The fair value of deposits was estimated at $595,245,000 as of September 30, 2021[106] Loan Portfolio - The company reported total gross loans receivable of $527,256,000 as of September 30, 2021, which does not include the allowance for loan losses[49] - The balance of one- to four-family real estate loans was $159,286,000 as of September 30, 2021, with an allowance for loan losses of $417,000[49] - The total past due loans as of September 30, 2021, were $3.137 million, with $1.978 million classified as 30-59 days past due and $190,000 as 60-89 days past due[55] - The total loans receivable as of September 30, 2021, were $527.256 million, with $9.855 million classified as non-accrual[55] - The Company’s policies classify loans based on performance, with consumer loans classified by delinquency status, where loans more than 90 days past due are placed in non-accrual[59] Troubled Debt Restructurings (TDRs) - The Company identifies potential Troubled Debt Restructurings (TDRs) through direct communication with borrowers and evaluation of their financial conditions[64] - The Company’s TDRs are considered impaired loans, which may lead to specific allocations and charge-offs if necessary[64] - As of September 30, 2021, the total recorded investment in loans classified as TDRs (Troubled Debt Restructurings) was $7,346,000, with 10 loans in total[65] Stock Repurchase and Compensation - The company repurchased 60,000 shares of common stock at an average cost of $14.95 per share during the three months ended September 30, 2021[109] - As of September 30, 2021, the company had 46,327 shares remaining to be repurchased under the existing stock repurchase program[109] - Compensation expense related to unvested restricted stock awards under the EIP was $60,000 for Q3 2021, compared to $45,000 for Q3 2020[88] - The intrinsic value of stock options outstanding under the EIP was $11,000 as of September 30, 2021, with 20,000 options outstanding[89] Other Comprehensive Income - The total other comprehensive loss for the three months ended September 30, 2021, was $725,000, compared to a loss of $175,000 for the same period in 2020[112] - For the nine months ended September 30, 2021, the total other comprehensive loss was $1,475,000, compared to a gain of $880,000 for the same period in 2020[112]