Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2012)
40 slides from Lake Shore Bancorp's shareholder meeting presentation, May 23, 2012
Slide 1: Annual Meeting of Shareholders
Annual Meeting of Shareholders May 23, 2012 Lake Shore Bancorp, Inc. Copyright 2012 Lake Shore Bancorp, Inc. 1
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 Sa
Slide 3: Lake Shore Bancorp Inc. Stock Profile
Lake Shore Bancorp Inc. Stock Profile 3 Lake Shore Bancorp, Inc. Copyright 2012 Market Data (as of May 15, 2012) – (Source - NASDAQ) » Ticker Symbol LSBK » 52 – week Range $ 8.29 - $ 10.88 » Current Price $10.00 » Market Capitalization $59.4 million » Minority Shares Outst . 2.3 million shares » 50
Slide 4: Lake Shore Savings Fast Facts
Lake Shore Savings Fast Facts 4 Lake Shore Bancorp, Inc. Copyright 2012 □ Lake Shore Savings has been in business for over 121 years. □ As of March 31, 2012 x Total Assets $494.1 million x Total Deposits $388.0 million x Total Loans Receivable, net $270.4 million □ 10 branch locations throughout Cha
Slide 5: Loan Originations 2011
Loan Originations 2011 2011 New Loans ($’s in millions) Residential Mortgage – New & Modified $ 25.80 Commercial Mortgage – New & Modified 15.08 Commercial Loans 4.61 Home Equity Loans 6.20 Consumer Loans 0.58 Total New Loans in 2011 $ 52.27 million Our strategy is to originate and serve. 5 Lake Sho
Slide 6: 2011 Deposits, Earnings, Dividends
2011 Deposits, Earnings, Dividends 6 Lake Shore Bancorp, Inc. Copyright 2012 10.4% Growth in Core Deposits (includes all deposits except time deposits) Core Deposits 2010 $ 144.9 million Core Deposits 2011 $ 159.9 million » 2011 Deposit Growth of $4.0 million » Record Earnings of $3.7 million in 201
Slide 7: Operational and Strategic Review
Operational and Strategic Review 7 Lake Shore Bancorp, Inc. Copyright 2012 » Regulatory Oversight Transition from the OTS to OCC and Federal Reserve. » Enterprise Risk Management. » 2011 Operational Highlights. » 2012 Goals and Objectives. » 2012 Equity Incentive Plan.
Slide 8: Regulatory Oversight Transition from the OTS to OCC and Federal Reserve
Regulatory Oversight Transition from the OTS to OCC and Federal Reserve » Dissolution of OTS □ OCC is the primary regulator for the Bank. □ Federal Reserve is the primary regulator for the Holding Companies. » Dodd Frank Act □ Many rules are not yet finalized. □ Dodd Frank Act preservation of the MH
Slide 9: Enterprise Risk Management
Enterprise Risk Management 9 Lake Shore Bancorp, Inc. Copyright 2012 » Formalized an extensive model to … x Identify x Measure x Monitor x Control …Enterprise Risk.
Slide 10: 2011 Operational Highlights
2011 Operational Highlights 10 Lake Shore Bancorp, Inc. Copyright 2012 » Evaluate potential branch locations: □ Opportunities from First Niagara’s acquisition of local HSBC branches. □ Develop customer base with new advertising campaign, “Discover the Bank You Have Always Wanted!” □ Clicks instead o
Slide 11: 2011 Operational Highlights (cont.)
2011 Operational Highlights (cont.) 11 Lake Shore Bancorp, Inc. Copyright 2012 » Implemented formal procedures to evaluate new products. » 5 Year Comprehensive Technology Plan □ Incorporate into our Strategic Business Plan. » Research software for Human Resource Information System, Vendor Compliance
Slide 12: 2012 Goals and Objectives
2012 Goals and Objectives 12 Lake Shore Bancorp, Inc. Copyright 2012 » Systems Implementation – Operational Efficiencies. » Digital Interaction Customer Relationship. » Commercial Division Activities. » Continued Leadership Development.
Slide 13: Operational Efficiencies
Operational Efficiencies 13 Lake Shore Bancorp, Inc. Copyright 2012 » Implementation of … x Human Resource Information System x Vendor Compliance Software x AML/BSA Tracking Software x Asset Liability Model Creating efficiencies in these processes and establishing a digital foundation to leverage th
Slide 14: Digital Interaction – Customer Relationship
Digital Interaction – Customer Relationship 14 Lake Shore Bancorp, Inc. Copyright 2012 » Clicks instead of bricks. » Considering the experience our customers want. » Energize the Lake Shore Savings Bank Electronic Banking Experience.
Slide 15: Digital Interaction – Customer Relationship (cont.)
Digital Interaction – Customer Relationship (cont.) 15 Lake Shore Bancorp, Inc. Copyright 2012 » Digital experience may include … □ Various Components of Mobile Banking □ Website Upgrade: • Desktop • Tablets • Smart Phones □ Online Account Opening □ Person to Person Payment Systems □ Social Media St
Slide 16: Commercial Division Activities
Commercial Division Activities 16 Lake Shore Bancorp, Inc. Copyright 2012 » Small Business relationship banking □ Flexibility created by Dodd Frank Act. » Growth of our commercial lending portfolio □ The right kind of interest!
Slide 17: 2012 Equity Incentive Plan
2012 Equity Incentive Plan 17 Lake Shore Bancorp, Inc. Copyright 2012 » Promote the long term financial success of the organization. » Attract, retain and reward individuals who contribute to the success of our organization and align their interest with those of the Company’s shareholders.
Slide 18: Financial Presentation
Financial Presentation Rachel Foley Chief Financial Officer Lake Shore Bancorp, Inc. Copyright 2012 Lake Shore Bancorp, Inc. 18
Slide 19: Total Assets
Total Assets ($ in millions) 19 Lake Shore Bancorp, Inc. Copyright 2012 $357.8 $407.8 $425.7 $479.0 $488.6 $494.1 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $500.0 $550.0 2007 2008 2009 2010 2011 1Q 2012
Slide 20: Loans, net
Loans, net ($ in millions) 20 Lake Shore Bancorp, Inc. Copyright 2012 $218.7 $240.5 $259.2 $263.0 $275.1 $270.4 $100.0 $150.0 $200.0 $250.0 $300.0 2007 2008 2009 2010 2011 1Q 2012
Slide 21: Loan Composition
Loan Composition (as of March 31, 2012) 21 Lake Shore Bancorp, Inc. Copyright 2012 One - to - four family 65.5% Commercial real estate 17.9% Construction loans 0.2% Home equity 11.3% Commercial loans 4.5% Consumer loans 0.7%
Slide 22: Non-performing Loans as a Percentage of Loans
Non - performing Loans as a Percentage of Loans Source: SNL.com 22 Lake Shore Bancorp, Inc. Copyright 2012 0.87% 1.90% 3.64% 4.54% 4.65% 0.52% 0.43% 1.27% 0.80% 0.84% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2007 2008 2009 2010 2011 National Average* Lake Shore *Average of p
Slide 23: Loan Loss Reserves as a Percentage of Loans
Loan Loss Reserves as a Percentage of Loans 23 Lake Shore Bancorp, Inc. Copyright 2012 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2007 2008 2009 2010 2011 0.56% 0.61% 0.60% 0.36% 0.50%
Slide 24: Total Deposits
Total Deposits ($ in millions) 24 Lake Shore Bancorp, Inc. Copyright 2012 $240.8 $293.2 $318.4 $375.8 $379.8 $388.0 $ - $100.0 $200.0 $300.0 $400.0 2007 2008 2009 2010 2011 1Q 2012
Slide 25: Deposit Composition
Deposit Composition (as of March 31, 2012) 25 Lake Shore Bancorp, Inc. Copyright 2012 Savings 9.1% Money Market Accts 15.9% Interest - Bearing Demand 11.2% Noninterest - Bearing Demand 7.9% Time Deposits > $100,000 20.4% Time Deposits < $100,000 35.5%
Slide 26: Net Interest Income
Net Interest Income ($ in millions) 26 Lake Shore Bancorp, Inc. Copyright 2012 $9.5 $11.2 $11.8 $13.6 $15.1 $ - $5.0 $10.0 $15.0 $20.0 2007 2008 2009 2010 2011
Slide 27: Interest Rate Margin & Spread
Interest Rate Margin & Spread (in percentages) 27 Lake Shore Bancorp, Inc. Copyright 2012 2.92 3.19 3.03 3.21 3.34 2.42 2.75 2.70 2.98 3.14 0.00 1.00 2.00 3.00 4.00 5.00 2007 2008 2009 2010 2011 Net Interest Margin Interest Rate Spread
Slide 28: Percentage Change in Net Interest Margin
Percentage Change in Net Interest Margin Source: SNL.com 28 Lake Shore Bancorp, Inc. Copyright 2012 - 6.00% - 4.00% - 2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 2007 2008 2009 2010 2011 National Average* Lake Shore *Average of publicly traded banks throughout the U.S. under $1 billion in total asset
Slide 29: Treasury Yield
Treasury Yield 29 Lake Shore Bancorp, Inc. Copyright 2012 0 1 2 3 4 5 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr Percentage Treasury Maturities 5/10/2012 5/10/2011
Slide 30: Net Income
Net Income ($ in millions) 30 Lake Shore Bancorp, Inc. Copyright 2012 $ - $1.0 $2.0 $3.0 $4.0 2007 2008 2009 2010 2011 $1.8 $1.5 $2.2 $3.0 $3.7
Slide 31: Efficiency Ratio
Efficiency Ratio Source: SNL.com (in percentages) 31 Lake Shore Bancorp, Inc. Copyright 2012 80.84% 82.32% 81.36% 77.95% 77.72% 79.38% 69.92% 76.80% 72.74% 65.78% 60.00% 65.00% 70.00% 75.00% 80.00% 85.00% 90.00% 2007 2008 2009 2010 2011 National Average* Lake Shore *Average of publicly traded banks
Slide 32: Return on Average Assets
Return on Average Assets (in percentages) 32 Lake Shore Bancorp, Inc. Copyright 2012 0.52% 0.39% 0.52% 0.67% 0.76% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2007 2008 2009 2010 2011
Slide 33: Return on Average Equity
Return on Average Equity (in percentages) 33 Lake Shore Bancorp, Inc. Copyright 2012 3.39% 2.76% 3.93% 5.32% 6.15% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2007 2008 2009 2010 2011
Slide 34: Regulatory Capital Requirements
Regulatory Capital Requirements 34 Lake Shore Bancorp, Inc. Copyright 2012 To be Well Capitalized under Prompt Corrective Actual Action Provisions Amount Ratio Amount Ratio (Dollars in Thousands) As of December 31, 2011: Total capital (to risk - weighted assets) $54,773 21.81 % $ ≥ 25,118 ≥ 10.0 % T
Slide 35: 1st Quarter 2012 Balances vs. 2011 Year End Balances
1 st Quarter 2012 Balances vs. 2011 Year End Balances 35 Lake Shore Bancorp, Inc. Copyright 2012 » Total Assets up $5.5 million □ Cash & Cash Equivalents up $6.0 million □ Investments up $3.9 million ▪ Increases primarily due to increased deposits. □ Loans, net down $4.7 million ▪ Decrease primarily
Slide 36: 1st Quarter 2012 vs. 1st Quarter 2011 Results
1 st Quarter 2012 vs. 1 st Quarter 2011 Results 36 Lake Shore Bancorp, Inc. Copyright 2012 » Net Income □ $1.0 million - 1 st quarter 2012, a 6%, or $50,000 increase over same period in 2011. Increase primarily due to: □ $92,000 increase in Interest Income earned on Loan portfolio □ $238,000 decreas
Slide 37: 1st Quarter 2012 vs. 1st Quarter 2011 Results (cont.)
1 st Quarter 2012 vs. 1 st Quarter 2011 Results (cont.) 37 Lake Shore Bancorp, Inc. Copyright 2012 » Increase offset by: □ $142,000 decrease in Interest Income earned on our investment portfolio due to low interest rates. □ $59,000 decrease in non - interest income. □ $65,000 increase in non - inter
Slide 38: LSBK Closing Stock Price December 31, 2006 thru May 15, 2012
LSBK Closing Stock Price December 31, 2006 thru May 15, 2012 38 Lake Shore Bancorp, Inc. Copyright 2012 $12.56 $12.72 $12.00 $10.30 $8.61 $9.30 $8.57 $9.50 $7.00 $6.89 $7.25 $8.25 $7.86 $8.20 $7.90 $8.03 $9.23 $10.21 $10.26 $9.50 $9.55 $10.00 $10.00 $ - $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 S
Slide 39: Lake Shore Bancorp, Inc. Total Return
Lake Shore Bancorp, Inc. Total Return Source: SNL.com 39 Lake Shore Bancorp, Inc. Copyright 2012 25 50 75 100 125 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 Index Value Lake Shore Bancorp, Inc. (MHC) SNL Thrift MHCs SNL Thrift $250M - $500M
Slide 40: Conclusion: Questions?
Conclusion 40 Lake Shore Bancorp, Inc. Copyright 2012 Questions? Thank you for your continued confidence in Lake Shore Bancorp, Inc.!