Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2015)
43 slides from Lake Shore Bancorp's shareholder meeting presentation, May 20, 2015
Slide 1: Annual Meeting of Shareholders May 20, 2015
Annual Meeting of Shareholders May 20, 2015 1 LSS Bancorp logo.epsLake Shore Bancorp, Inc. Copyright 2015
Slide 2: Welcoming Remarks
Welcoming Remarks Gary W. Winger Chairman of the Board 2 Lake Shore Bancorp, Inc. Copyright 2015
Slide 3: Agenda
Agenda 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 3 Lake Shore Bancorp, Inc. Copyright 2015
Slide 4: Board of Directors
Board of Directors 4 Lake Shore Bancorp, Inc. Copyright 2015 M:\Users\Bank Sketches and other pics\LSS Logo\Lake Shore Bancorp\LSBANCORP CMYK.jpgM:\Users\Bank Sketches and other pics\LSS Logo\Lake Shore Savings\LS only.JPG Director Since Susan C. Ballard 2012 Tracy S. Bennett 2010 Sharon E. Brautiga
Slide 5: Business of Annual Shareholders Meeting
Business of Annual Shareholders Meeting 5 Lake Shore Bancorp, Inc. Copyright 2015 •Election of Three Directors: David C. Mancuso Gary W. Winger Nancy L. Yocum • An advisory vote on executive compensation (“Say-on-Pay”) •Ratification of the appointment of Baker Tilly Virchow Krause, LLP as independen
Slide 6: Executive Management Presentation
Executive Management Presentation 6 Lake Shore Bancorp, Inc. M:\Users\Bank Sketches and other pics\LSS Logo\Lake Shore Savings\LS only.JPG Daniel P. Reininga President and Chief Executive Officer
Slide 7: Safe Harbor Statement
Safe Harbor Statement 7 Lake Shore Bancorp, Inc. Copyright 2015 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 t
Slide 8: Lake Shore Bancorp Inc. Stock Profile
Lake Shore Bancorp Inc. Stock Profile 8 Lake Shore Bancorp, Inc. Copyright 2015 Market Data (as of May 15, 2015) – (Source - NASDAQ) .Ticker Symbol LSBK .52 – week Range $11.95 - $14.00 .Current Price $13.63 .Market Capitalization $32.1 million - minority shares only .Minority Shares Outst . 2.4 mil
Slide 9: Lake Shore Savings Fast Facts
Lake Shore Savings Fast Facts 9 Lake Shore Bancorp, Inc. Copyright 2015 .Lake Shore Savings has been in business for over 124 years. .As of March 31, 2015 •Total Assets $482.9 million •Total Deposits $382.7 million •Total Loans Receivable, net $286.6 million .11 branch locations throughout Chautauqu
Slide 10: Lake Shore Balance Sheet Strategy
Lake Shore Balance Sheet Strategy 10 Lake Shore Bancorp, Inc. Copyright 2015 Manage Interest Rate Risk .Extended low interest rate environment Reduce Interest Rate Risk exposure: . Change Balance Sheet Mix .Sold $10.3 million of long-term, fixed-rate securities in 2014 .Increased Commercial Loan ori
Slide 11: Strategic Impact of Managing Interest Rate Risk
Lake Shore Balance Sheet Strategy 11 Lake Shore Bancorp, Inc. Copyright 2015 Strategic Impact of Managing Interest Rate Risk .Positioning of Balance Sheet for rising interest rate environment .Effectively manage Net Interest Margin .Short term decrease in Net Income, offset by strong capital positio
Slide 12: Loan Originations 2014
Loan Originations 2014 New Loans 2014 2013 ($’s in millions) Residential Mortgage - New & Modified $ 15.98 $41.32 Commercial Mortgage - New & Modified 19.13 16.73 Commercial Loans 7.64 3.03 Home Equity Loans 6.08 6.63 Consumer Loans 0.38 0.44 Total New Loans $ 49.21 $68.15 35.5% Increase in Total Co
Slide 13: 2014 Deposits and Earnings
2014 Deposits and Earnings 13 Lake Shore Bancorp, Inc. Copyright 2015 4.7% Growth in Core Deposits (includes all deposits except time deposits) Core Deposits 2014 $ 204.8 million Core Deposits 2013 $ 195.7 million .Year End 2014 Deposits of $386.9 million, a $1.3 million decrease since 2013 . Earnin
Slide 14: Operational and Strategic Review
Operational and Strategic Review 14 Lake Shore Bancorp, Inc. Copyright 2015 .Regulatory Update .Fundamental Banking Practices .2014 Operational Highlights .Banking for the Future
Slide 15: Regulatory Oversight
Regulatory Oversight 15 Lake Shore Bancorp, Inc. Copyright 2015 .OCC is the Primary Regulator of Lake Shore Savings Bank. .Federal Reserve is the Primary Regulator of: Lake Shore Bancorp, Inc. Lake Shore, MHC
Slide 16: Regulatory Environment
Regulatory Environment 16 Lake Shore Bancorp, Inc. Copyright 2015 .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 .2014
Slide 17: Fundamental Banking Practices
Fundamental Banking Practices 17 Lake Shore Bancorp, Inc. Copyright 2015 .Corporate Mission .Board of Directors and Management are Proactive .Comprehensive Strategic Planning .Sound Policies and Procedures .Effective Risk Management Systems .Continue to Accumulate Capital
Slide 18: 2014 Operating Highlights
2014 Operating Highlights 18 Lake Shore Bancorp, Inc. Copyright 2015 .Continued Focus on Digital Banking Efficiencies .Implemented in 2014: .Mobile Banking App for cell phones and tablets .Upgraded Retail Online Banking •New Bill Pay features •e-Alerts .Introduced Business Online Banking with integr
Slide 19: 2014 Operating Highlights (cont.)
2014 Operating Highlights (cont.) 19 Lake Shore Bancorp, Inc. Copyright 2015 .Converted to new Item Processing vendor •New statement format •Upgraded e-statements and e-notices .Constructed Data Center Back-up Hot Site .Focused on Commercial Loan Portfolio Growth .Implemented Strategy to Reduce Inte
Slide 20: 2014 Operating Highlights (cont.)
2014 Operating Highlights (cont.) 20 Lake Shore Bancorp, Inc. Copyright 2015 .Continued focus on Enterprise Risk Management .Dividend Waiver .Protecting the Shareholder’s Investment in LSBK
Slide 21: Commercial Lending
Commercial Lending .Commercial Division Activities in 2014 .Executive Vice President, Commercial Division .Growth of the Commercial Lending Portfolio .New Originations Totaled $25.55 Million .Portfolio Outstandings Grew to $81.7 Million, a 14.4 percent YOY increase .The Right Kind of Interest. 21 La
Slide 22: 2015 Operating Highlights
2015 Operating Highlights 22 Lake Shore Bancorp, Inc. .Implemented in 1st Quarter of 2015 •Mobile Deposit Capture •Converted to new vendor for Record Management and Document Imaging •Regulatory Changes •Basel III Capital Standards I mplemented
Slide 23: Future Strategy
Future Strategy .Operational Focus on Managing Interest Rate Risk .Commitment to an efficient Operating Profile .Solid Community Banking core business .Focusing on increasing market share in Western New York. .Developing Brand Awareness .Maximize customer’s use of our digital capabilities .Solid ass
Slide 24: Summary
Summary 24 Lake Shore Bancorp, Inc. Copyright 2015 Putting People First is not simply our Bank’s Mission Statement, it is a fundamental belief shared by all of Lake Shore Savings Bank Associates!
Slide 25: Financial Presentation
Rachel Foley Chief Financial Officer Lake Shore Bancorp, Inc. Copyright 2015 Lake Shore Bancorp, Inc. Financial Presentation 25
Slide 26: Total Assets
Total Assets ($ in millions) 26 Lake Shore Bancorp, Inc. Copyright 2015 $479.0 $488.6 $482.4 $482.2 $487.5 $482.9 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $500.0 $550.0201020112012201320141Q2015
Slide 27: Loans, net
Loans, net ($ in millions) 27 Lake Shore Bancorp, Inc. Copyright 2015 $263.0 $275.1 $272.9 $277.3 $284.9 $286.6 $100.0 $150.0 $200.0 $250.0 $300.0201020112012201320141Q2015
Slide 28: Loan Composition
Loan Composition (as of December 31st) 28 Lake Shore Bancorp, Inc. Copyright 2015 2010 2014 One-to-four family 70.3% Commercial real estate 12.9% Construction loans 0.2% Home equity 11.7% Commercial loans 4.0% Consumer loans 0.9% One-to-four family 59.1% Commercial real estate 24.0% Construction loa
Slide 29: Non-performing Loans as a Percentage of Loans
Non-performing Loans as a Percentage of Loans (as of December 31st) Source: FDIC 29 Lake Shore Bancorp, Inc. Copyright 2015 4.12% 3.67% 3.32% 2.44% 2.04% 0.89% 1.02% 0.89% 1.66% 1.66% 0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%4.00%4.50%20102011201220132014National Average*Lake Shore*Average of all sav
Slide 30: Loan Loss Reserves as a Percentage of Loans
Loan Loss Reserves as a Percentage of Loans (as of December 31st ) 30 Lake Shore Bancorp, Inc. Copyright 2015 0.00%0.20%0.40%0.60%0.80%1.00%201020112012201320140.36% 0.50% 0.66% 0.65% 0.67%
Slide 31: Total Deposits
Total Deposits ($ in millions) 31 Lake Shore Bancorp, Inc. Copyright 2015 $375.8 $379.8 $378.5 $388.2 $386.9 $382.7 $- $100.0 $200.0 $300.0 $400.020102011201220132014 1Q2015
Slide 32: Deposit Composition
Deposit Composition (as of December 31, 2014) 32 Lake Shore Bancorp, Inc. Copyright 2015 Savings 11.0% Money Market Accts 20.3% Interest-Bearing Demand 12.1% Noninterest-Bearing Demand 9.6% Time Deposits > $100,000 17.7% Time Deposits < $100,000 29.3%
Slide 33: Deposit Mix
Deposit Mix (as of December 31st) 33 Lake Shore Bancorp, Inc. Copyright 2015 38.56% 61.44% 2010 Deposit Mix 52.94% 47.06% 2014 Deposit Mix CoreDepositsTimeDeposits
Slide 34: Net Interest Income
Net Interest Income ($ in millions, as of December 31st) 34 Lake Shore Bancorp, Inc. Copyright 2015 $13.6 $15.1 $15.0 $15.1 $14.5 $- $5.0 $10.0 $15.0 $20.020102011201220132014
Slide 35: Treasury Yield
Treasury Yield 35 Lake Shore Bancorp, Inc. Copyright 2015 0.02 0.03 0.05 0.10 0.40 0.86 1.63 2.17 2.62 3.18 3.47 0.01 0.03 0.09 0.25 0.61 1.00 1.58 2.00 2.28 2.62 3.18 012341 mo3 mo6 mo1 yr2 yr3 yr5 yr7 yr10 yr20 yr30 yrPercentage Treasury Maturities 5/9/20145/12/2015
Slide 36: Net Income
Net Income ($ in millions, as of December 31st) 36 Lake Shore Bancorp, Inc. Copyright 2015 $- $1.0 $2.0 $3.0 $4.020102011201220132014 $3.0 $3.7 $3.6 $3.7 $3.2 CAGR of 7.78%
Slide 37: Efficiency Ratio
Efficiency Ratio (as of December 31st) Source: SNL.com 37 Lake Shore Bancorp, Inc. Copyright 2015 74.29% 74.34% 73.75% 78.69% 79. 25 % 67.59% 67.32% 69.16% 71.92% 76.46% 60.00%65.00%70.00%75.00%80.00%85.00%90.00%20102011201220132014National Average*Lake Shore *SNL U.S. Thrift < $500M : Includes all
Slide 38: Capital Levels – Bank Only
Capital Levels – Bank Only (as of December 31st) 38 Lake Shore Bancorp, Inc. Copyright 2015 Well-Capitalized 2014 2013 (Regulatory Definition) Total capital (to risk-weighted assets) 25.71% 25.08% >10.00% Tier 1 capital (to adjusted total assets) 13.16% 12.75% >5.00%
Slide 39: 1st Quarter 2015 Balances vs. 2014 Year End Balances
1st Quarter 2015 Balances vs. 2014 Year End Balances 39 Lake Shore Bancorp, Inc. Copyright 2015 .Total Assets of $482.9 million .Cash & Cash Equivalents decrease d $2.9 million .Investments decrease d $3.2 million .Loans, net increase d $1.8 million .Total Deposits decrease d $4.3 million
Slide 40: 1st Quarter 2015 vs. 1st Quarter 2014 Results
1st Quarter 2015 vs. 1st Quarter 2014 Results 40 Lake Shore Bancorp, Inc. Copyright 2015 .2015 1st Quarter Net Income .$569,000 - a 26.6% decrease .Impacted by $128,000 one-time tax expense Decrease in 1st Q Net Income primarily due to: . $99,000 decrease in net interest income . $69,000 increase in
Slide 41: LSBK Closing Stock Price December 31, 2010 thru May 15, 2015
LSBK Closing Stock Price December 31, 2010 thru May 15, 2015 41 Lake Shore Bancorp, Inc. Copyright 2015 Source: Nasdaq.com $9.23 $10.21 $10.26 $9.50 $9.55 $10.00 $10.27 $10.40 $10.29 $11.09 $11.70 $11.42 $12.20 $12.39 $12.45 $12.60 $13.56 $13.75 13.63 $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00
Slide 42: Conclusion: Questions?
Conclusion 42 Lake Shore Bancorp, Inc. Copyright 2015 Questions? Thank you for your continued confidence in Lake Shore Bancorp, Inc.!
Slide 43: Lake Shore, MHC Annual Meeting of Members
Lake Shore, MHC Annual Meeting of Members 43 Lake Shore Bancorp, Inc. Copyright 2015 •Call to Order • Introduction of Proposal to Elect Directors •Tabulation of Votes •Adjournment