Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2013)
34 slides from Lake Shore Bancorp's shareholder meeting presentation, May 22, 2013
Slide 1: Annual Meeting of Shareholders
= ms 2 Annu al Meeting of eave rem May 22, 2013 ih Jancorp, Ine. Copyright 2013
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 17, 2013) - (Source - NASDAQ) » Ticker Symbol LSBK > 52- week Range $ 8.55 - $14.69 >» Current Price $11.75 >» Market Capitalization $26.8 million >» Minority Shares Outst. 2.3 million shares » 50 Day Avg. Trading Vol. 349 shares >» Annual
Slide 4: Lake Shore Savings Fast Facts
Lake Shore Savings Fast Facts “*Lake Shore Savings has been in business for over 122 years. “As of March 31, 2013 Y¥ Total Assets $488.2 million Y¥ Total Deposits $384.3 million ¥ Total Loans Receivable, net $272.1 million “11 branch locations throughout \ Chautauqua and Erie Counties. at rakgjonsam
Slide 5: Loan Originations 2012
Loan Originations 2012 2012 New Loans ($’s in millions) Residential Mortgage - New & Modified $32.31 Commercial Mortgage - New & Modified 17.13 Commercial Loans 5.11 Home Equity Loans 7.31 Consumer Loans 0.47 Total New Loans in 2012 $ 62.33 million Our strategy is to originate and serve. rakgjonsama
Slide 6: 2012 Deposits and Earnings
2012 Deposits and Earnings > Deposits as of December 31, 2012 equaled $378.5 million 12.6% Growth in Core Deposits (includes all deposits except time deposits) Core Deposits 2011 $ 159.9 million Core Deposits 2012 $ 180.0 million > Earnings of $3.626 million in 2012 rakgjonsamaecrmone Ute shore Banc
Slide 7: Operational and Strategic Review
Operational and Strategic Review > Regulatory Update. > Fundamental Banking Practices. >» 2012 Operational Highlights. > 2013 and Beyond. » 2012 Equity Incentive Plan. rakgjonsamaecrmone Ute shore Bancorp, ne Copyright 2013 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 rakeonermmaneoese Ute shore Bancorp, ne Copyright 2013 8
Slide 9: Regulatory Environment 2013
Regulatory Environment 2013 >» Continued Implementation of Regulations Q0cc QFDIC OCFPB OThe Federal Reserve OThe State of New York rakgjonsamaecrmone Ute shore Bancorp, ne Copyright 2013 A
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 > High Levels of Capital rakgjonsamaecrmone Ute shore Bancorp, ne Copyright 2013 10
Slide 11: 2012 Operational Highlights
2012 Operational Highlights > New Branch Location: ONovember 2012 Acquired New Branch Building 04950 Main Street, Snyder, New York O Opened April 2013, Total Deposits of $4.7 million as of May 17, 2013 OBranch Specific Advertising Campaign: “Growing to be your Bank!” ORe-Tree WNY rakgjonsamaecrmone
Slide 12: 2012 Operational Highlights (cont.)
2012 Operational Highlights (ou, » Clicks Instead of Bricks ORedesigned Website- Increased Accessibility Tablets Smart Phones Traditional Devices OImplementation of Social Media Strategy OOn-Line Mortgage Application OCore Systems Provider Contract Negotiations Reduced pricing Enhanced services rakg
Slide 13: 2012 Operational Highlights (cont.)
2012 Operational Highlights (ou, > Completed the Implementation of ... ¥ Human Resource Information System ¥ Vendor Compliance Software ¥ AML/BSA Tracking Software v Interest Rate Risk Modeling rakgjonsamaecrmone Ute shore Bancorp, ne Copyright 2013 B
Slide 14: 2012 Operational Highlights (cont.)
2012 Operational Highlights (ou, > Commercial Division Activities Y Growth of the Commercial Lending Portfolio Y Originations Totaled $22.2 Million Y Portfolio Grew to $71.3 Million ¥ The Right Kind of Interest. rakgjonsamaecrmone Ute shore Bancorp, ne Copyright 2013 1“
Slide 15: 2013 and Beyond
2013 and Beyond > Digital Banking Initiative, Efficiencies >» Continued Growth- Commercial Loan Portfolio > Enterprise Risk Management; Identify, Measure, Monitor and Control > Mitigation of Interest Rate Risk » Sales Education- Best Practices > Dividend Waiver >» Myriad of Regulatory Changes > ALLL
Slide 16: Rachel Foley, Chief Financial Officer
ae 5) Rachel Foley — | Am ¢ Chief Faget ae 4 Lake Share Bancorp, Inc. Copyright 2013
Slide 17: Total Assets
Total Assets ($ in millions) $550.0 $500.0 $450.0 $400.0 $350.0 $300.0 $250.0 $200.0 2008 2009 2010 2011 2012 1Q2013 ks Lake Shore Bancorp, Inc. v7 Lake Shore Bancorp, Ine. Copyright 2013
Slide 18: Loans, net
Loans, net ($ in millions) $300.0 et $263.0 1 $272.9 $272.1 $250.0 4 $200.0 $150.0 $100.0 T T T T T 2008 2009 2010 2011 2012 1Q2013 Lake Shore Bancorp, Ine. bs Lake Shore Bancorp, Inc. Copyright 2013 48
Slide 19: Loan Composition
Loan Composition (as of March 31, 2013) Commercial loans 4.9% Home equity. 11.2% Consumer loans 0.6% Construction. loans 0.2% One-to four - family Commercial 61.7% real estate 21.4% Lake Shore Bancorp, Inc. bs Lake Shore Bancorp, Inc. Copyright 2013 19
Slide 20: Non-performing Loans as a Percentage of Loans
6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Non-performing Loans as a Percentage of Loans Source: SNL.com 8.77% Brees 2009 2010 2011 National Average” “BLakeShore “Average of publicly radedb ants thoughout the U.S.undey$1 bill in total assets Lake Shore Bancorp, Ine. Copyright 2013 ks Lake Shore Banco
Slide 21: Loan Loss Reserves as a Percentage of Loans
Loan Loss Reserves as a Percentage of Loans 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2008 2009 = 2010 2011 2012 Lake Shore Bancorp, Ine. Copyright 2013 ks Lake Shore Bancorp, Inc. 21
Slide 22: Total Deposits
Total Deposits ($ in millions) $384.3 5 2008 2009 2010 2011 2012 1Q2013 Lake Shore Bancorp, Ine. Copyright 2013 ks Lake Shore Bancorp, Inc. 22
Slide 23: Deposit Composition
Deposit Composition (as of March 31, 2013) Money — Savings Market 9.9% Accts Deposits < 19.2% $100,000. , Interest- Bearing 33.5% ee Time Deposits > 11.1% $100,000 oninterest 18.4% -Bearing Demand 7.9% Lake Shore Bancorp, Ine. Copyright 2013 ks Lake Shore Bancorp, Inc, 23
Slide 24: Net Interest Income
Net Interest Income ($ in millions) A $15.1 $15.0 : : \ \ \ 2008 2009 2010 2011 2012 ks Lake Shore Bancorp, Inc. 24 Lake Shore Bancorp, Ine. Copyright 2013
Slide 25: Treasury Yield
Treasury Yield Percentage w to 0 lmo 3mo 6mo Treasury Maturities lyr 2yr 3yr Syr Tyr lOyr 20yr 30yr 5/10/2012 —® 5/10/2013 Lake Shore Bancorp, Ine. Copyright 2013 ks Lake Shore Bancorp, Inc, 35
Slide 26: Net Income
Net Income ($ in millions) 2008 2009 2010 2011 2012 Lake Shore Bancorp, Ine. ks Lake Shore Bancorp, Inc. Copyright 2013 26
Slide 27: Efficiency Ratio
90.00% 85.00% 80.00% 75.00% 70.00% 65.00% 60.00% Efficiency Ratio Source: SNL.com 84.84% 69.92% Sa 2008 2009 2010 2011 2012 National Average* = - Lake Shore * Average of publicly traded banks throughout the U.S. under $1 billion in total assets Lake Shore Bancorp, Ine. Copyright 2013 ks Lake Shore B
Slide 28: Regulatory Capital Requirements
Regulatory Capital Requirements Asof December 31, 2012: 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, 2011: Total capital (to risk-weighted assets) Tier 1 capital (to a
Slide 29: 1st Quarter 2013 Balances vs. 2012 Year End Balances
1%* Quarter 2013 Balances vs. 2012 Year End Balances > Total Assets up $5.8 million “Cash & Cash Equivalents up $6.7 million “*Investments up $747 thousand =Increases primarily due to increased deposits. Loans, net down $839 thousand =Decrease primarily due to strategic decision made by the Company
Slide 30: 1st Quarter 2013 vs. 1st Quarter 2012 Results
15 Quarter 2013 vs. 1% Quarter 2012 Results [one Income >» $906 thousand - 1% quarter 2013, a 10%, or $101,000 decrease over same period in 2012. Decrease primarily due to: $419,000 decrease in interest income + $80,000 increase in provision for loan losses + $36,000 increase in non-interest expense
Slide 31: 1st Quarter 2013 vs. 1st Quarter 2012 Results (cont.)
15 Quarter 2013 vs. 1*%t Quarter 2012 Results (cont) roe offset by: $353,000 decrease in interest expense paid on our deposits and borrowings due to low interest rates. + $87,000 decrease in income tax expense. > Asset Quality remains strong S *Nonperforming Loans as a % of Net Loans — 0.93% A Lake
Slide 32: LSBK Closing Stock Price
LSBK Closing Stock Price December 31, 2008 thru May 17, 2013 Source: Nasdaq.com $14.00 § $1175 1200 S10 2h $10.00 $10.00 $9.50 aie $8.25 $8.20 $8.03 $10.26 $10.27 $10.40 $10.29 $3.00 4 4 BS $7.86 $7.90 $600 +—s $4.00 $2.00 : eo S ¥ co 8 8 Oo & a srs se er sr Ff Sf SF YF Fr FY KY KF TS YS SS hh SPP P
Slide 33: Lake Shore Bancorp, Inc. Total Return
Lake Shore Bancorp, Inc. Total Return Source: SNL.com 150 —e-Lake Shore Bancorp, Inc. (MHC) -@SNLThriftMHCs 125 5 SNL Thrift $250M-$500M Index Value 100 =, ZO 75 A A fl 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 rakgjonsamaecrmone Ute shore Bancorp, ne Copyright 2013 33
Slide 34: Conclusion
Conclusion Questions? Thank you for your continued confidence in Lake Shore Bancorp, Inc.! rakeonermmaneoese Ute shore Bancorp, ne Copyright 2013 34