Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2019)
36 slides from Lake Shore Bancorp's shareholder meeting presentation, May 15, 2019
Slide 1: Annual Shareholders Meeting May 15, 2019
Annual Shareholders MeetingMay 15, 2019LS Bancorp JPG.png
Slide 2: Agenda
AgendaLS Bancorp JPG.pngGenerations of Success.Call to Order -Gary W. Winger, Chairman.Introduction of Officers, Directors and Director Nominees.Secretary’s Report.Presentation of Proposals.Executive Management Report to Shareholders.Vote Report.Adjournment
Slide 3: Board of Directors
Board of DirectorsLS Bancorp JPG.pngGenerations of SuccessDirector SinceSusan C. Ballard2012Tracy S. Bennett2010Sharon E. BrautigamNominating and Corporate Governance Committee Chairperson2004David C. MancusoAssetLiability Committee Chairman1998JackL. Mehltretter2016Daniel P. ReiningaPresident and C
Slide 4: Business of Annual Shareholders Meeting
Business of Annual Shareholders MeetingLS Bancorp JPG.pngGenerations of Success.Election of Three Directors: Tracy S. BennettSharon E. BrautigamKevin M. Sanvidge.An advisory vote on executive compensation (“Say-on-Pay”).A vote on the frequency of the “say on pay” advisory vote..Ratification of the a
Slide 5: Executive Management Presentation
Executive Management PresentationLS Bancorp JPG.pngGenerations of SuccessDaniel P. Reininga President and Chief Executive Officer
Slide 6: Safe Harbor Statement
Safe Harbor StatementLS Bancorp JPG.pngGenerations of SuccessThis 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
Slide 7: An Overview of Lake Shore
An Overview of Lake ShoreLS Bancorp JPG.pngGenerations of Success.Lake Shore Savings Bank is a federally chartered, community-oriented financial institution headquartered in Dunkirk, New York, with a longstanding history of community banking since 1891.Current focus on organic growth of loan portfol
Slide 8: An Overview of Lake Shore (cont'd)
An Overview of Lake Shore (cont’d)LS Bancorp JPG.pngGenerations of Success Stockholder Information (NASDAQ:LSBK) Dividends Dividend Yield 3.18% Ownership Mutual Holding Company 60.59% Institutional 12.34% Insider* 8.06% Market Information Total Market Cap (mm) $90.6 Minority Market Cap (mm) $35.7 Bo
Slide 9: 2018 Financial Highlights
2018 Financial HighlightsLS Bancorp JPG.pngGenerations of SuccessImprovement noted in following:.Earnings per Share -20.0% increase .Total Assets -5.2% increase to $545.7 million.Loans Receivable, net -7.5% increase .Core deposits -8.1% increase .Asset Quality -non-performing loans as a percentage o
Slide 10: Serving multiple generations of Western New Yorkers for over 128 years
We have had the honorof serving multiple generations of Western New Yorkers for over 128 Years.LS Bancorp JPG.pngGenerations of Success
Slide 11: Corporate Strategy
Corporate StrategyLS Bancorp JPG.pngGenerations of Success.Prudent and conservative approach to growth and risk management..Experienced management with thorough knowledge of market area..Commitment to an efficient operating profile..Solid community banking model as our core business..Continued inves
Slide 12: Commercial Lending Team
Commercial Lending TeamLS Bancorp JPG.pngGenerations of Success.Commercial lending team shifted Loan Portfolio Mix .% of Commercial Real Estate Loans & Commercial Business Loans in Total Loan Portfolio.9/30/2014 –25.7% .3/31/19 –50.6% .2018 YOY Growth –7.4% and 24.2% CAGR since January 2015 2018/Q1
Slide 13: 2018 Millennial Advisory Board Activities
2018 Millennial Advisory Board ActivitiesLS Bancorp JPG.pngGenerations of SuccessBoard Members:.Brandon Ihrig, Math Teacher, Amherst High School.Kale Mann, President, Soar Into Your Destiny, Inc..Dr. Sue McNamara, Associate Professor and Internship Coordinator, SUNY Fredonia School of Business.Chris
Slide 14: Digital Platform and Technology Initiatives
Digital Platform and Technology InitiativesLS Bancorp JPG.pngGenerations of Success.Enhanced Online Business Banking (February 2019).Customer customization.Improved functionality.Faster payment processing (via ACH).Enhanced Fraud Protection.Upgraded Retail Loan Origination System.Improved processing
Slide 15: Digital Platform and Technology Initiatives (cont'd)
Digital Platform and Technology Initiatives (cont’d)LS Bancorp JPG.pngGenerations of Success.Enhanced Company Website.Modern layout.Informative.Responsible Design.Actionable.Mobile Optimized.Banking Service videos –for online banking and mobile banking as well as videos related to Bill Pay, Remote D
Slide 16: Personal Service is the hallmark of our banking model
Personal Service is the hallmark of our banking model. It’s all about what we do best.LS Bancorp JPG.pngGenerations of Success.Human Connection and Accessibility.Processing of residential mortgages in each branch, customers are not going to be transferred to someone out of the market area.We service
Slide 17: Governance and Diversity in Banking
Governance and Diversity in BankingLS Bancorp JPG.pngGenerations of Success.Diverse board with 30% female representation.First female director appointed 23 years ago in 1995.Board member backgrounds are diverse –have directors with Information Security, Legal, Banking, Real Estate, Business and Acco
Slide 18: Community Contributions
Community ContributionsLS Bancorp JPG.pngGenerations of Success
Slide 19: Summary
SummaryLS Bancorp JPG.pngGenerations of SuccessWe are well positioned to achieve continued success and are dedicated to serving the financial needs of consumers and businesses in Western New York..Ample Business Opportunities in Western New York.Strong loan pipelines.Talented, service-oriented team
Slide 20: Financial Highlights
Financial HighlightsLS Bancorp JPG.pngGenerations of SuccessRachel A. Foley Chief Financial Officer and Treasurer
Slide 21: Financial Highlights
Financial Highlights Dollars in Thousands (except per share amounts) FY 2018 FY 2017 Yoy Change Assets $545,708 $518,977 5.2% Net Loans $392,471 $365,063 7.5% Deposits $432,458 $405,153 6.7% Net Income $4,000 $3,378 18.4% Basic Earnings Per Share $0.66 $0.55 20.0% Book value Per Share $13.29 $12.85
Slide 22: Total Assets
Total Assets$600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $482.4M $482.2M $487.5M $473.4M $489.2M $519.0M $545.7M $554.5M 2012 2013 2014 2015 2016 2017 2018 1Q 2019 Loans Receivable, Net Securities – AFS Cash and Cash Equivalents Bank Owned Life Insurance Premises and Equipment, Net FHLB
Slide 23: Loan Growth
Loan GrowthLS Bancorp JPG.pngGenerations of Success$272.9M$277.3M$284.9M$297.1M$326.4M$365.1M$392.5M$401.0 M$0$50,000$100,000$150,000$200,000$250,000$300,000$350,000$400,000$450,00020122013201420152016201720181Q 2019Residential One-to Four-FamilyCommercial Real EstateHome EquityConstruction and Land
Slide 24: Loan Originations
Loan OriginationsLS Bancorp JPG.pngGenerations of SuccessNew Loans201420152016201720183/31/2019Residential Mortgage - New & Modified$15.98$21.37$16.48$18.65$28.58$4.41Commercial Mortgage - New & Modified19.1327.5539.0649.6460.687.91Commercial Loans7.6411.697.2814.638.371.20Home Equity Loans6.086.401
Slide 25: NPLs/Total Net Loans
NPLs/Total Net Loans4.50% 4.25% 4.00% 3.75% 3.50% 3.25% 3.00% 2.75% 2.50% 2.25% 2.00% 1.75% 1.50% 1.25% 1.00% 0.75% 0.50% 0.25% 2.70% 4.12% 3.44% 3.16% 1.63% 1.71% 1.44% 0.89% 1.66% 1.66% 1.57% 1.80% 1.05% 0.82% 2012Y 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y LSBK NPLs/Net Loans Peer Median NPLs/Net Loans
Slide 26: Loan Loss Reserves/Total Net Loans
Loan Loss Reserves/Total Net Loans1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 0.66% 0.65% 0.67% 0.67% 0.88% 0.90% 0.88% 0.88% 2012 2013 2014 2015 2016 2017 2018 1Q 2019LS Bancorp JPG.pngGenerations of SuccessFinancial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year
Slide 27: Continued Focus on Deposit Growth
Continued Focus on Deposit Growth$500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $50,000 1.04% 0.83% 0.76% 0.60% 0.49% 0.61% 0.81% 1.02% $378.4M $388.2M $386.9M $369.2M $385.9M $405.2M $432.5M $440.5M 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2012 2013 2014 2015 2016 2017 201
Slide 28: Strong Net Interest Margin
Strong Net Interest Margin4.0% 3.50% 3.00% 2.50% 2.00% 3.26% 3.73% 3.34% 3.48% 3.21% 3.51% 3.34% 3.55% 3.44% 3.62% 3.61% 3.63% 3.61% 3.51% 2012Y 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y LSBK Net Interest margin Peer Median Net Interest MarginLS Bancorp JPG.pngGenerations of Success.Despite operating in a
Slide 29: Net Income Trends
Net Income Trends$5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $0.63 $0.66 $0.55 $0.57 $0.58 $0.55 $0.66 $3,626 $3,743 $3,158 $3,338 $3,515 $3,378 $4,000 $898 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2012 2013 2014 2015 2016* 2017 2018 1Q2019 Net Income Basic E
Slide 30: Comparison of ROAA Results to Peers
Comparison of ROAA Results to Peers1.00% 0.75% 0.50% 0.25% 0.74% 0.77% 0.65% 0.70% 0.74% 0.67% 0.75% 0.47% 0.38% 0.42% 0.40% 0.41% 0.41% 0.41% 2012 2013 2014 2015 2016* 2017 2018 LSBK ROAA Median Per ROAALS Bancorp JPG.pngGenerations of SuccessFinancial data is presented for Lake Shore’s Fiscal Year
Slide 31: Continued Focus on Cost Control
Continued Focus on Cost Control90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 69.2.% 72.1% 71.9% 77.3% 76.5% 72.7% 74.6% 79.3% 71.9% 79.0% 73.9% 78.7% 75.6% 79.8% 2012 2013 2014 2015 2016 2017 2018 LSBK Efficiency Ratio Median Peer Efficiency RatioLS Bancorp JPG.pngGenerations of SuccessFinancial data is
Slide 32: LSBK Price/Volume Chart since IPO
LSBK Price/Volume Chart since IPOPrice on 5/10/19 - $15.09 Price ($) Volume Price Volume (shares 000’s) 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 200 175 150 125 100 75 50 25 07/18/06 11/01/06 02/22/07 09/26/07 01/14/08 05/01/08 08/18/08 12/03/08 03/24/09 07/10/09 10/26/09 02/12/10 06/02/10
Slide 33: Creating Shareholder Value
Creating Shareholder Value2012 2013 2014 2015 2016 2017 2018 3/31/2019 Tier 1 Ratio 23.0% 24.4% 25.0% 24.2% 22.2% 20.8% 19.7% 19.3% Total RBC Ratio 23.8% 25.1% 25.7% 24.9% 23.2% 21.8% 20.6% 20.2% Leverage Ratio 12.1% 12.8% 13.2% 14.3% 14.7% 14.4% 14.0% 14.2% Equity / Total Assets 13.9% 13.5% 14.7% 1
Slide 34: Appendix: Lake Shore Peer Data
Appendix: Lake Shore Peer DataInstitution Name Ticker City, State Total Assets ($mm) Columbia Financial, Inc (MHC) CLBK Fair Lawn, NJ $6,692 HarborOne Bancorp, Inc. (MHC) HONE Brockton, MA $3,656 Greene County Bancorp, Inc (MHC) GCBC Catskill, NY $1,195 PDL Community Bancorp (MHC) PDLB Bronx, NY $1,
Slide 35: Questions & Answers
Appendix: Lake Shore Peer DataLS Bancorp JPG.pngGenerations of Success Questions & Answers
Slide 36: Lake Shore, MHC Annual Meeting of Members
Lake Shore, MHC Annual Meeting of MembersLS Bancorp JPG.pngGenerations of Success.Call to Order.Introduction of Proposal to Elect Directors.Tabulation of Votes.Adjournment