Lake Shore Bancorp(LSBK) - 2022 Q3 - Quarterly Report

Financial Performance - Total interest income for the three months ended September 30, 2022, was $6,918,000, an increase of 7% compared to $6,465,000 in the same period of 2021[12] - Net income for the three months ended September 30, 2022, was $1,771,000, up from $1,691,000 in the same period of 2021, representing a growth of 4.7%[12] - Basic and diluted earnings per common share for the three months ended September 30, 2022, were $0.30, compared to $0.29 for the same period in 2021, reflecting a 3.4% increase[12] - Net income for the nine months ended September 30, 2022, was $4,516,000, compared to $4,372,000 for the same period in 2021, reflecting a year-over-year increase of 3.3%[18] - Diluted earnings per share for the nine months ended September 30, 2022, was $0.77, compared to $0.74 for the same period in 2021[76] Income and Expenses - Non-interest income for the nine months ended September 30, 2022, totaled $2,120,000, a decrease of 4.1% from $2,210,000 in the same period of 2021[12] - Total non-interest expense for the three months ended September 30, 2022, was $4,870,000, an increase of 8.4% compared to $4,494,000 in the same period of 2021[12] - Total interest expense for the three months ended September 30, 2022, was $573,000, a decrease of 8.8% from $628,000 in the same period of 2021[12] Dividends - Dividends declared per share increased to $0.18 for the three months ended September 30, 2022, from $0.14 in the same period of 2021[12] - Cash dividends declared were $0.16 per share for the first half of 2022, totaling $625,000, and increased to $0.18 per share for the third quarter, totaling $353,000[18] - The Company declared a quarterly cash dividend of $0.18 per share on October 21, 2022, with Lake Shore, MHC waiving $546,000 of this dividend[115] - The MHC has cumulatively waived approximately $17.9 million of cash dividends as of September 30, 2022, which is considered a restriction on the retained earnings of the Company[115] Loan Losses and Provisions - The provision for loan losses for the nine months ended September 30, 2022, was $500,000, down from $650,000 in the same period of 2021[12] - The allowance for loan losses at the end of the reporting period was $150,000, down from $162,000 at the beginning of the period[39] - The allowance for loan losses increased to $6,849,000 as of September 30, 2022, from $6,118,000 at the beginning of the year, reflecting a provision of $500,000 during the nine months[51] - The company experienced charge-offs of $17,000 in the third quarter of 2022, primarily from consumer loans[51] - The provision for loan losses included a credit of $23,000 for consumer loans, reflecting a cautious approach to potential defaults[51] Securities and Investments - The company reported unrealized holding losses on securities available for sale for the three months ended September 30, 2022, were $(3,954,000), compared to $(559,000) in the same period of 2021[13] - As of September 30, 2022, the total amortized cost of debt securities available for sale was $87,144,000, with a fair value of $71,261,000, reflecting unrealized losses of $15,991,000[32] - The total debt securities available for sale included U.S. government agencies valued at $1,821,000 and municipal bonds valued at $39,819,000[32] - The fair value of debt securities available for sale was $71,261,000, with total securities valued at $71,273,000[95] - The total estimated fair value of financial liabilities, including deposits, was $585,028,000[108] Cash and Deposits - The company reported a net cash provided by operating activities of $6,351,000 for the nine months ended September 30, 2022, slightly down from $6,427,000 in the same period of 2021[18] - Total cash and cash equivalents at the end of September 30, 2022, were $19,676,000, a decrease from $60,980,000 at the end of September 30, 2021[18] - The company experienced a net decrease in deposits of $9,824,000 during the nine months ended September 30, 2022, compared to an increase of $31,495,000 in the same period of 2021[18] Loan Portfolio - The gross loans receivable reached $564,147,000 as of September 30, 2022, with a significant portion in real estate loans totaling $171,570,000[51] - The total loans receivable as of September 30, 2022, were $564.147 million, compared to $519.779 million as of December 31, 2021, representing an increase of approximately 8.5%[58] - The total past due loans as of September 30, 2022, were $3.396 million, compared to $3.189 million on December 31, 2021, indicating an increase of about 6.5%[58] - The residential one- to four-family loans classified as pass/performing increased to $169.319 million as of September 30, 2022, from $156.931 million as of December 31, 2021, reflecting a growth of approximately 7.3%[63] Stock and Compensation - The Company recorded stock-based compensation costs of $85,000 for the three months ended September 30, 2022, down from $106,000 for the same period in 2021[78] - For the nine months ended September 30, 2022, 27,132 restricted stock awards were granted at a weighted average grant price of $14.97, increasing unvested shares outstanding to 50,373[86] - Compensation expense related to unvested restricted stock awards under the EIP was $59,000 for Q3 2022 and $60,000 for Q3 2021, totaling $175,000 for the nine months ended September 30, 2022, compared to $146,000 for the same period in 2021[86] Other Comprehensive Income - For the nine months ended September 30, 2022, the total other comprehensive loss was $13,526, with net unrealized losses on securities available for sale amounting to $17,109[113] - For the three months ended September 30, 2022, the net unrealized losses arising during the period were $5,004, with a tax benefit of $1,050[113]