Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2014)
34 slides from Lake Shore Bancorp's shareholder meeting presentation, May 21, 2014
Slide 1: Annual Meeting of Shareholders
Lake Shore Bancorp, Inc. Annual Meeting of Shareholders May 21, 2014 Lake Shore Bancorp, Inc. Copyright 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward- looking statements to be covered by the Safe Harbor Provision and are including this statement for the purpose of such Saf
Slide 3: Stock Profile
Lake Shore Bancorp Inc. Stock Profile Market Data (as of May 19, 2014) - (Source - NASDAQ) » Ticker Symbol LSBK > 52- week Range $10.93 - $12.52 >» Current Price $12.35 >» Market Capitalization $28.1 million >» Minority Shares Outst. 2.3 million shares » 50 Day Avg. Trading Vol. 520 shares >» Annual
Slide 4: Lake Shore Savings Fast Facts
Lake Shore Savings Fast Facts (> Lake Shore Savings has been in business \ for over 123 years. > As of March 31, 2014 Total Assets $488.0 million *Total Deposits $393.3 million *Total Loans Receivable, net $275.5 million > 11 branch locations throughout \. Chautauqua and Erie Counties. at rakjonsaam
Slide 5: Loan Originations 2013
Loan Originations 2013 New Loans 2013 2012 ($’s in millions) Residential Mortgage - New & Modified $41.32 $32.31 Commercial Mortgage - New & Modified 16.73 17.13 Commercial Loans 3.03 5.11 Home Equity Loans 6.63 6.82 Consumer Loans 0.44 0.47 Total New Loans $68.15 $61.84 Loan Originations increased
Slide 6: 2013 Deposits and Earnings
2013 Deposits and Earnings » Year End 2013 Deposits of $388.2 million, a $9.7 million increase since 2012 8.7% Growth in Core Deposits (includes all deposits except time deposits) Core Deposits 2012 $ 180.0 million Core Deposits 2013 $ 195.7 million > Earnings increased 3.2% to $3.7 million rakjonsa
Slide 7: Operational and Strategic Review
Operational and Strategic Review > Regulatory Oversight. > Fundamental Banking Practices. » 2013 Operational Highlights. > 2014 and Beyond. » 2012 Equity Incentive Plan. rakjonsaamaecrcne Ute shore Bancorp, ne Copyright 2014 7
Slide 8: Regulatory Oversight
Regulatory Oversight > OCC is the Primary Regulator of Lake Shore Savings Bank. > Federal Reserve is the Primary Regulator of: Lake Shore Bancorp, Inc. Lake Shore, MHC rakeonermmaneoeonie Ute shore Bancorp, ne Copyright 2014 8
Slide 9: Regulatory Environment 2013
Regulatory Environment 2013 > Ever Changing Regulatory Environment OCC, FDIC, CFPB, The Federal Reserve, The State of New York > Implementation of the Qualified Mortgage Rules as created by the Consumer Financial Protection Bureau. Lake Shore Best Practices ks Lake Shore Bancorp, Inc. Lake Shore Ban
Slide 10: Fundamental Banking Practices
Fundamental Banking Practices > Corporate Mission > Board of Directors and Management are Proactive >» Comprehensive Strategic Planning » Sound Policies and Procedures > Effective Risk Management Systems > Continue to Accumulate Capital rakjonsaamaecrcne Ute shore Bancorp, ne Copyright 2014 10
Slide 11: 2013 Operational Highlights
2013 Operational Highlights The Measure of Our Success vY New Branch Opening: 4950 Main Street, Snyder, New York. Y Core Processor Contract Negotiations and Contract Renewal. ¥ Loan Origination System Requirements Definition and Vendor Selection. Y On-Line Mortgage Application Y Roll-out of the LSBK
Slide 12: 2013 & 2014 Operational Highlights
2013 & 2014 Operational Highlights The Measure of Our Success > Retail On-line Banking Y Bill Pay and Account Management > Expense Tracking/ Categorization > Mobile Banking App Y Balance Inquiry Y Account Transfer Management > Bill Pay >» Consumer Deposit Capture > Business On-Line Banking Y Bill Pa
Slide 13: 2014 and Beyond
2014 and Beyond > Digital Banking Efficiencies > Data Center Hot Site > Commercial Loan Portfolio Growth > Interest Rate Risk > COSO 2013 Framework Certification > Enterprise Risk Management > Dividend Waiver > Regulatory Changes > ALLL > Basel III Capital > Protecting the Shareholders’ Investment i
Slide 14: Summary
Summary Putting People First is not simply our Bank’s Mission Statement, it is a fundamental belief shared by all of Lake Shore Savings Bank Associates! rakeonermmaneoeonie Ute shore Bancorp, ne Copyright 2014 1“
Slide 15: Financial Presentation
Lake Shore Bancorp, Inc. Financial Presentation lc Lake Shore Bancorp, Inc. Rachel Foley Chief Financial Officer Lake Shore Bancorp, Inc. Copyright 2014
Slide 16: Total Assets
Total Assets ($ in millions) $550.0 $500.0 $450.0 $400.0 $350.0 $300.0 $250.0 $200.0 2009 2010 2011 2012 2013 1Q2014 Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc. 16
Slide 17: Loans, net
Loans, net ($ in millions) $300.0 $250.0 $200.0 $150.0 $100.0 $275.1 $272.9 $277.3 $275.5 2009 2010 = 2011 2012 2013 1Q2014 Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc. v7
Slide 18: Loan Composition
Loan Composition (as of December 31st) Homecquity Homecquity 11.79%. Commercial 115%. Commercial Toans 4 Toans onsumer ee aes loans 09% Construction. Construction aie Tans 0.1% 039% Commercial realestate 11% Commercial realestate One-to-four ag 213% 719% Lake Shore Bancorp, Ine. Copyright 2014 ks La
Slide 19: Non-performing Loans as a Percentage of Loans
Non-performing Loans as a Percentage of Loans Source: SNL.com 6.00% see 4.74% 507% 400% 8.77% 460% 401% 3.00% 2.00% 1 089% 192% 0.89% 1.00% aaas 0.65% 2009 2010 2011 2012 2018 National Average* Be LakeShore “Average of publicly radedb ants thoughout the U.S.undey$1 bill in total assets rakjonsaamaec
Slide 20: Loan Loss Reserves as a Percentage of Loans
Loan Loss Reserves as a Percentage of Loans 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 0.60% 0.66% 0.65% 2009 2010 2011 2013 Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc. 20
Slide 21: Total Deposits
Total Deposits ($ in millions) 2009 2010 2011 2012 2013 1Q2014 Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc. 21
Slide 22: Deposit Composition
Deposit Composition (as of March 31, 2014) 4 Money . Savings y ‘Seuss . 10.5% Marketstects .' 0 $100,000. Interest- 31.0% Bearing Time emand Deposits > ULB $100,000 i 2 Noninterest- 17.8% Bearing Demand 9.0% Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc, 22
Slide 23: Deposit Mix
Deposit Mix (as of December 31st) 2009 Deposit Mix 2013 Deposit Mix Lake Shore Bancorp, Ine. Is Lake Shore Bancorp, Ine. Copyright 2014 23
Slide 24: Net Interest Income
Net Interest Income ($ in millions) $13.6 $15.1 $15.0 $15.1 orls \ \ 2009 2010 2011 2012 2013 Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc. 24
Slide 25: Treasury Yield
Treasury Yield BP ss Percentage WwW 0 3.1 s 3.10 0.02 0.0p, 0.04 0.08 3yr Syr Tyr lO yr20yr30yr lmo3mo6mo lyr 2yr Treasury Maturities 5/10/2013 -* 5/9/2014 EaReSHE me BaRKCep TRH ls Lake Shore Bancorp, Inc. Copyright2014 25
Slide 26: Net Income
Net Income ($ in millions) 2009 2010 2011 2012 2013 Lake Shore Bancorp, Ine. bs Lake Shore Bancorp, Ine. Copyright 2014 26
Slide 27: Efficiency Ratio
Efficiency Ratio Source: SNL.com 90.00% 84.84% 85.00% 80.00% 75.00% 70.00% 65.00% 65.78% 60.00% 2009 2010 2011 2012 2013 National Average* = - Lake Shore * Average of publicly traded banks throughout the U.S. under $1 billion in total assets rakjonsaamaecrcne Ute shore Bancorp, ne Copyright 2014 yy
Slide 28: Regulatory Capital Requirements
Regulatory Capital Requirements Asof December 31, 2013: Total capital (to risk-weighted assets) Tier 1 capital (to adjusted total assets) Tangible equity (to tangible assets) Tier 1 capital (to risk-weighted assets) Asof December 31, 2012: Total capital (to risk-weighted assets) Tier 1 capital (to a
Slide 29: 1st Quarter 2014 Balances vs. 2013 Year End Balances
1%* Quarter 2014 Balances vs. 2013 Year End Balances (> Total Assets up $5.8 million » Cash & Cash Equivalents up $10.9 million > Investments down $2.6 million > Loans, net down $1.9 million > Total Deposits up $5.1 million S / rakjonsaamaecrcne Ute shore Bancorp, ne Copyright 2014 29
Slide 30: 1st Quarter 2014 vs. 1st Quarter 2013 Results
15 Quarter 2014 vs. 1% Quarter 2013 Results /52014 1* Quarter Net Income > > $775,000 - a 14.5%, or $131,000 decrease over same period in 2013 Decrease in 1*t Q Net Income primarily due to: » $135,000 increase in non-interest expense > $123,000 decrease in net interest income > $ 35,000 decrease in
Slide 31: 1st Quarter 2014 vs. 1st Quarter 2013 Results (cont.)
15 Quarter 2014 vs. 1% Quarter 2013 Results (cont.) > Decrease offset by: > $86,000 decrease in interest expense > $45,000 decrease in provision for loan loss > $31,000 decrease in income tax expe! > 1% Quarter 2014 Asset Quality >1.91% - Nonperforming Loans as a % of Net Loans Ss \ nse / Lake Shore
Slide 32: LSBK Closing Stock Price
LSBK Closing Stock Price December 31, 2009 thru May 1, 2014 Source: Nasdaq.com $12.39 $12.00 $11.42 $10.21 $12.20 $12.40 $10.00 ee $1027 $10.29 $8.00 $8.20 $8.03 $6.00 $4.00 $2.00 ‘. is as soso *» oo » = oo 2 se oe s “ Ss iy “” a os Y SY eS hE hE PE A PE Al hh” oe ey £ e & & g ey Lake Shore Bancorp,
Slide 33: Total Return
Lake Shore Bancorp, Inc. Total Return Source: SNL.com Index Value 280 —e-Lake Shore Bancorp, Inc. 225 (MHC) -@SNL Thrift MHCs 200 “SNL Thrift $250M-$500M A771 175 150 a 128 4 100 = we 12/81/09 12/31/10 12/34/11 12181112 12181113 Lake Shore Bancorp, Ine. Copyright 2014 ks Lake Shore Bancorp, Inc. 33,
Slide 34: Conclusion
Conclusion Questions? Thank you for your continued confidence in Lake Shore Bancorp, Inc.! rakeonermmaneoeonie Ute shore Bancorp, ne Copyright 2014 34