Lake Shore Bancorp(US:LSBK)2022-08-15 19:23Financial Performance - Total interest income for the three months ended June 30, 2022, was $6,431,000, an increase of 4.25% compared to $6,169,000 in the same period of 2021[12]. - Net income for the three months ended June 30, 2022, was $1,684,000, representing a 69.5% increase from $993,000 in the same period of 2021[12]. - Basic and diluted earnings per common share for the three months ended June 30, 2022, were $0.29, compared to $0.17 for the same period in 2021[12]. - Net income for the six months ended June 30, 2022, was $2,745,000, a slight increase from $2,681,000 in the same period of 2021, representing a growth of 2.4%[19]. - For the three months ended June 30, 2022, net income was $1,684,000, compared to $993,000 for the same period in 2021, representing a 69.6% increase[75]. Income and Expenses - Non-interest income for the six months ended June 30, 2022, was $1,452,000, slightly down from $1,503,000 in the same period of 2021[12]. - Total non-interest expense for the three months ended June 30, 2022, was $4,577,000, an increase of 4.13% compared to $4,395,000 in the same period of 2021[12]. - The provision for loan losses decreased to $100,000 for the three months ended June 30, 2022, down from $500,000 in the same period of 2021[12]. - The provision for loan losses was $500,000 for the six months ended June 30, 2022, down from $650,000 in 2021, indicating a decrease of 23.1%[19]. - The provision for income tax expense for the six months ended June 30, 2022, was $2,000, down from $7,000 in 2021[118]. Cash Flow and Investments - Net cash provided by operating activities increased to $4,103,000 for the six months ended June 30, 2022, compared to $3,556,000 in 2021, reflecting a rise of 15.4%[19]. - Net cash used in investing activities was $32,028,000 for the six months ended June 30, 2022, compared to $22,511,000 in 2021, indicating an increase of 42.3%[19]. - Net cash used in financing activities was $12,504,000 for the six months ended June 30, 2022, a decrease from $21,781,000 in 2021, showing a reduction of 42.5%[19]. Securities and Investments - The total amortized cost of debt securities available for sale was $88,407,000, with a fair value of $77,530,000 as of June 30, 2022, reflecting unrealized losses of $11,032,000[33]. - The total debt securities available for sale amounted to $88,797,000, with gross unrealized losses of $1,757,000[34]. - The fair value of securities was $77,540,000 as of June 30, 2022, with a carrying amount of $77,540,000[111]. - The estimated fair value of debt securities available for sale was $77,530,000 as of June 30, 2022, down from $88,797,000 as of December 31, 2021[97][100]. Loan Portfolio and Allowance for Loan Losses - Gross loans receivable totaled $550,218,000 as of June 30, 2022, compared to $519,779,000 at the end of 2021, indicating a growth in the loan portfolio[52]. - The allowance for loan losses increased to $6,747,000 as of June 30, 2022, up from $6,118,000 at the beginning of the year, reflecting a provision of $100,000 for the second quarter[52]. - The ending balance for collectively evaluated loans for impairment was $6,747,000 as of June 30, 2022[52]. - The company reported a total of $4,921,000 in recorded investment for commercial real estate loans with no related allowance as of June 30, 2022[57]. - The total amount of loans classified as substandard as of June 30, 2022, was $6,876,000, compared to $13,653,000 as of December 31, 2021, showing a decrease in risk[64]. Dividends and Stockholder Equity - Cash dividends declared per share increased to $0.16 for the three months ended June 30, 2022, from $0.13 in the same period of 2021[12]. - The Company declared a quarterly cash dividend of $0.18 per share, payable on August 19, 2022, to shareholders of record as of August 2, 2022[119]. - Lake Shore, MHC waived dividends totaling $582,000 and $1.2 million for the three and six months ended June 30, 2022, respectively, cumulatively waiving approximately $17.3 million as of June 30, 2022[119]. Asset Quality and Risk Management - The company maintains conservative underwriting standards for its one- to four-family residential mortgage loans, which are primarily held in the Western New York region[46]. - The company reviews all investment securities on an ongoing basis for the presence of other-than-temporary-impairment (OTTI) with formal reviews performed quarterly[39]. - The total amount of non-accruing loans as of June 30, 2022, was $22,000, with 7 loans in the residential one- to four-family category[70]. - The company's asset classification committee is responsible for monitoring risk ratings and making changes as deemed appropriate, with a focus on individual loan classifications[62]. Miscellaneous - The company expects an increase in the allowance for loan losses due to the adoption of the CECL model, which will require covering the full remaining expected life of the portfolio[26]. - As of June 30, 2022, all Paycheck Protection Program loans originated by the company have been forgiven by the SBA, indicating successful support for small businesses during the pandemic[30]. - The company had $578,268,000 in deposits with an estimated fair value of $579,437,000 as of June 30, 2022[111].