Lake Shore Bancorp(LSBK) - 2022 Q1 - Quarterly Report

Financial Performance - Total interest income for the three months ended March 31, 2022, was $5,934,000, a decrease of 2.03% from $6,057,000 in the same period of 2021[12]. - Net interest income after provision for loan losses was $5,068,000 for Q1 2022, compared to $5,120,000 in Q1 2021, reflecting a decrease of 1.02%[12]. - Non-interest income decreased to $732,000 in Q1 2022 from $820,000 in Q1 2021, a decline of 10.73%[12]. - Net income for the three months ended March 31, 2022, was $1,061,000, down 37.04% from $1,688,000 in the same period of 2021[12]. - Basic and diluted earnings per common share decreased to $0.18 in Q1 2022 from $0.29 in Q1 2021, a decline of 37.93%[12]. - Total comprehensive loss for Q1 2022 was $(5,073,000), compared to a comprehensive income of $885,000 in Q1 2021[13]. Expenses and Losses - Total non-interest expense increased to $4,532,000 in Q1 2022, up 14.66% from $3,953,000 in Q1 2021[12]. - The provision for loan losses increased to $400,000 in Q1 2022 from $150,000 in Q1 2021, indicating a higher risk assessment[12]. - The allowance for loan losses increased to $6,500,000 as of March 31, 2022, compared to $6,118,000 at the beginning of the year[49]. - The total past due loans as of March 31, 2022, were $4,250,000, with residential one- to four-family loans accounting for $2,219,000 of this amount[55]. - The total number of loans classified as Troubled Debt Restructurings (TDRs) was 10, with a recorded investment of $7.226 million as of March 31, 2022[65]. Assets and Securities - Cash and cash equivalents at the end of Q1 2022 were $30,766,000, down from $51,960,000 at the end of Q1 2021[17]. - The Company reported total debt securities available for sale with an amortized cost of $91.068 million and a fair value of $84.542 million as of March 31, 2022, reflecting unrealized losses of $6.991 million[31]. - The fair value of municipal bonds with gross unrealized losses was $29.948 million as of March 31, 2022, with total gross unrealized losses of $4.857 million[36]. - The estimated fair value of loans receivable, net, was $525,832,000, compared to a carrying amount of $550,286,000[100]. - The fair value of interest rate swaps was $124,000 as of March 31, 2022[88]. Loan Portfolio - The gross loans receivable totaled $553,230,000 as of March 31, 2022, with real estate loans making up $160,052,000 of that total[49]. - The Company had commitments to grant loans totaling $43.541 million as of March 31, 2022, a decrease from $61.234 million as of December 31, 2021[72]. - The Company reported a provision for loan losses of $400,000 for the three months ended March 31, 2022[49]. - The Company’s mortgage-backed securities had a fair value of $35,190,000 as of March 31, 2022[41]. - The Company evaluated the impact of the COVID-19 pandemic, which has resulted in lower interest rates and may materially affect future results and operations[29]. Dividends and Shareholder Information - Cash dividends declared per share increased to $0.16 in Q1 2022 from $0.13 in Q1 2021[15]. - The Board of Directors declared a quarterly cash dividend of $0.16 per share on April 27, 2022, payable on May 23, 2022[108]. - Lake Shore, MHC waived receipt of dividends on its 3,636,875 shares, representing approximately 63.6% of the Company's total outstanding stock[108]. - Cumulatively, the MHC has waived approximately $16.7 million of cash dividends as of March 31, 2022[109]. - The dividends waived by the MHC are considered a restriction on the retained earnings of the Company[109]. Compensation and Stock Information - Stock-based compensation expense for the three months ended March 31, 2022, was $72,000, slightly up from $71,000 in the same period of 2021[74]. - The balance of the loan to the ESOP was $1.4 million as of March 31, 2022, with 90,135 allocated shares and 103,154 unallocated shares[83]. - The ESOP compensation expense was $30,000 for the three months ended March 31, 2022, compared to $29,000 for the same period in 2021[83]. - The weighted average shares outstanding for basic earnings per share decreased from 5,913,111 in 2021 to 5,832,170 in 2022[70]. - The Company did not repurchase any shares of common stock during the three months ended March 31, 2022, with 36,327 shares remaining under the stock repurchase program[104].