Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2010)
37 slides from Lake Shore Bancorp's shareholder meeting presentation, May 19, 2010
Slide 1: Annual Meeting of Shareholders
L Lake Shore Bancorp, Inc. Annual Meeting of Shareholders May 19, 2010 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. Copyright2010 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. Such statements include, but are not limited to, statements conceming future business, revenue and eamings. These Statements are not historical fa
Slide 3: Corporate Profile
Lake Shore Bancorp Inc. Cormporate Proffe Market Data (as of May 14, 2010) — (Source - NASDAQ) Q Ticker Symbol LSBK Q 52-week Range $6.85 -$ 8.50 Q Current Price $8.00 Q Market Capitalization $48.72 million Q Shares Outstanding 6.1.M shares Q 50 Day Avg. Trading Vol. 16,999 shares QO Dividend Yield
Slide 4: Economic Environment
Economic Environment + Bank Failures: The collapse ofthe housing marketand the increase in mortgage delinquencies and home foreclosures, coupled with the credit crisis has led to a dramatic increase in bank failures over the past few years. Since the start of the financial crisis in 2007, there have
Slide 5: Economic Environment (continued)
Economic Environment couines * Stock Market: The high volatility in the stock market continues, with large swings in market prices.and indices. Good gains were recorded. during 2009, but investors are stilla little jittery. In spite of the current economic environment, our overall performance was st
Slide 6: Lake Shore Savings Facts
Lake Shore Savings Facts: UO Lake Shore Savings has been in business for over 119 years O Current assets as of April.30,2010 exceeds $446.5 million O) New Branch Office opened in Depew, NY on April 5,2010 - deposits at this branch exceeded $16 million'as of May 8, 2010 O Currently we have 10 branche
Slide 7: Lake Shore Savings Facts (cont'd)
Lake Shore Savings Facts (cont'd) QO Loan originations in 2009 were at an all time high. While other banks decreased or completely stopped lending in 2009, we continued to provide loan services to the communities we serve at a record pace. 2009 New Loans CommercialLoans $16.20 million Home Equity Lo
Slide 8: Lake Shore Savings Facts (cont'd.)
Lake Shore Savings Facts (cont’d.) C) 20%+ Deposit Growth in Erie County Erie County Deposits 2008 $ 89,830,309 Erie County Deposits 2009 $108,788,958 Total New Deposits - Erie County 2009 $18,958,649 Growth Percentile 21.1% QC] Marketing Campaigns & Customer Service — Erie County As a result of our
Slide 9: Lake Shore Savings Facts: Growth Opportunities
Lake Shore Savings Facts (cont’d.) GROWTH OPPORTUNITIES/FUTURE Q Developed a 3-5 year Strategic Plan in 2009 to plan for continued growth in the future. Q Branches in Erie County provide great potential for future growth opportunities. Q We take great pride in our employees and continue to add talen
Slide 10: Addition to the Executive Management Team
Lake Shore Savings Facts (cont’d.) Addition to the Executive Management Team Q_sODaniel P. Reininga - named Executive Vice President & Chief Operating Officer on January 4, 2010 QA member of the Lake Shore Savings Bank Board of Directors for 14 years, serving in various capacities, including: - Vice
Slide 11: Review of Operations
Lk Lake Shore.Bancorp, Inc. * Review of Operations Daniel P..Reininga, Executive Vice President and Chief Operating Officer L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. abl Copyright 2010
Slide 12: Operations Review: Strategic Plan for the Future
Operations Review Strategic Plan for the Future UStrategic Planning Process URisk Management UCommercial Lending Strategy UBranch Growth UAdministrative Headquarters UOrchard Park Originating and Underwriting Center g L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 12 Copyright2010
Slide 13: Review of the Strategic Planning Process
Operations Review Review of the Strategic Planning Process OSenior Management and Board of Directors UComprehensive Situational Analysis UBoard Established Strategic Direction OSenior Management Plans Developed to Achieve Strategic Direction ORevised Mission Statement L Lake Shore Bancorp, Inc. Lake
Slide 14: Revised Mission Statement
Operations Review Revised Mission Statement At Lake Shore Savings, “Putting People First” means helping our Customers, energizing our Employees, respecting our Shareholders and serving the Communities in our region! L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 14 Copyright2010
Slide 15: Risk Management
Operations Review Risk Management ORisk Management Policy Developed by the Board of Directors in Fall of 2009 O Policy Driven Risk Management Monitoring Plan Implementation by end of 2010 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 15 Copyright 2010
Slide 16: Commercial Lending Strategy
Operations Review Commercial Lending Strategy OBoard goal to increase Commercial Loan portfolio from $43 Million to $75 Million over the next 3 years UCommercial Loan Department Structure aligned to achieve the Board established goal ORisk Profile Matrix developed L Lake Shore Bancorp, Inc. Lake Sho
Slide 17: Branch Growth
Operations Review Branch Growth UDepew UNew Branch every 12-18 months L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 7 Copyright 2010
Slide 18: Administrative Headquarters
Operations Review Administrative Headquarters UConsolidation of Retail Lending, Accounting, and Administrative Senior Officers under one:roof UState of the art facilities UOffice vacated to be used for MIS Center L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 18 Copyright 2010
Slide 19: Orchard Park Originating and Underwriting Center
Operations Review Orchard Park Originating and Underwriting Center UHired Residential Mortgage Loan Originator = Market focus on areas not currently served by current LSBK Branch network in Erie County OHired Loan Underwriter L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 19 Copyright 2010
Slide 20: Operations Review
Operations Review Operationally, LSBK is positioned to continue to achieve results aimed at managing overall risk while enhancing shareholder value L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 20 Copyright2010
Slide 21: Financial Presentation
L ) Lake Shore Bancorp, Inc. * Financial Presentation — Rachel Foley, Chief Financial Officer L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 21 Copyright 2010
Slide 22: Total Assets
Total Assets ($ in millions) $450.0 5 $432.0 Te] $400.0 KH $354.2 $3578 33500 ae () $300.0 +4 CAGR of 5.04% _ | L $250.0 $200.0 | 2005 2006 2007-2008 ~=— 2009: 192010 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 22 Copyright 2010
Slide 23: Loans, net
Loans, net ($ in millions) $300.0 + $259.2 $257.4 $250.0 B2202 = $218.7 | $206.2 $205.7 4 $200.0 | 4 —— | 4 $150.0 $100.0 2005 2006 2007 2008 2009 1Q2010 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 23 Copyright 2010
Slide 24: Loan Composition
Loan Composition (as of December 31, 2009) . Commercial Home equity loans Consumer 11.67% 442% loans Construction. 0.92% loans 014% @£#; $n Commercial real estate One-to-four 10.96% family 71.88% kK Lake Shore Bancorp, Inc. Lake Shore Bancomp, Inc. 24 Copyright2010
Slide 25: Non-performing Loans as a percentage of Gross Loans
Non-performing Loans as a percentage of Gross Loans 1.00% 0.75% 0.80% + 10.66% 9 649% P 0.69% 9 650% 0.60% 0.40% 0.20% 0.00% — = = <_ : 2005 2006 2007 2008 _2009 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 25 Copyright2010
Slide 26: Loan Loss Reserves as a percentage of Loans
Loan Loss Reserves as a percentage of Loans 1.00% 0.80% ” | 10.60% 0.61% 9 560, 0.61% 0.60% 0.60% 0.40% 0.20% al 0.00% —— ee eel 2005 2006 2007 2008 2009 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 26 Copyright2010
Slide 27: Total Deposits
Total Deposits ($ in millions) $3184 $3206— $293.2 $250.9 $249.6 $240.8 | | ,——| = | = GR of4:73% 2005 2006 2007 2008 2009 1Q2010 L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 27 Copyright 2010
Slide 28: Deposit Composition
Deposit Composition (as of December 31, 2009) Money Savings Market Time 9.12% Accts 11.73% Interest- Deposits < Bearing ee Demand 3.15% joninterest Time -Bearing Deposits > Demand $100,000 664% 17.12% L Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 28 Copyright2010
Slide 29: Net Interest Income
Net Interest Income ($ in millions) $15.0 5 13.0 ee $9-5 $9-7 — $112 sit _ $9.0 i $7.0 $5.0 $3.0 $1.0 $01.0) | 2005 2006 2007 2008 2009 L ) Lake Shore Bancorp, Inc. Lake Shore Bancop, Inc. 29. Copyright2010
Slide 30: Interest Rate Margin & Spread
Interest Rate Margin & Spread (in percentages) SSSR SNOS RA Suobovovous SSSSSSSSSS5 | \ 2005 2006 2007 2008 2009 “Net Interest Margin —*InterestRate Spread_| L Lake Shore Bancorp, Inc. 30 Lake Shore Bancom, Inc. Copyright2010
Slide 31: Treasury Yield
Treasury Yield Percentage ted N _ o 0.13 9-16" Imo 3mo 6mo lyr 2yr 3yr Syr 7yr 10yr 20yr 30yr Treasury Maturities —+-§5/10/2010 -=-5/4/2009 Lake Shore Bancop, Inc. Copyright2010 L Lake Shore Bancorp, Inc. 31
Slide 32: Net Income
Net Income ($ in millions) 2005 2006 2007 2008 2009 Lake Shore Bancom, Inc. Copyright2010 k Lake Shore Bancorp, Inc. 32
Slide 33: Return on Average Assets
Return on Average Assets (in percentages) 100% 5 0.80% 0.60% a 0.62% 0.40% 9, 9, 0.52% ey oT 0.39% 0.20% 0.00% 2005 2006 2007 2008 2009 Lake Shore Bancop, Inc. Copyright2010 L Lake Shore Bancorp, Inc. 33
Slide 34: Regulatory Capital Requirements
Regulatory Capital) Requirements To be Well Capitalized under Prompt Corrective Action Provisions Action Provisions i Amount Ratio @ollars in Thousands) Asof December 31, 2009: ‘Total capital (to risk-weighted assets) $222,815 210.0% ‘Tier 1 capital (to adjusted total assets) 220,974 25.0 ‘Tangible
Slide 35: 1st Quarter 2010 Results
1st Quarter 2010 Results * Total Assets up $6.3M since Dec. 31* — Loans, net down. $1.7M — Investments up $7.7 M * Total Deposits up $2.2M since Dec. 31* * Total Borrowings up'$4.3M since Dec. 31% * Increases primarily due to increase in borrowings as part of program to use FHLBNY advances as a stra
Slide 36: 1st Quarter 2010 vs. 1st Quarter 2009 Results
1st Quarter 2009 vs. 1st Quarter 2008 Results * $721,000 net income in 1% quarter 2010 compared to $405,000 in 1° quarter of 2009, a 78.0% increase. — $76,000 increase in loan interest income due to.increase in loan volume since March 31, 2009 — $534,000 decrease in interest expense due to steady de
Slide 37: Dividends Paid per Share
Dividends Paid per Share $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 CAGR 5.08% $0.01 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Qi Q2 QB Qt QI 200620072007 2007 20072008 2008 2008 2008 20092009 2009 20092010 L Lake Shore Bancorp, Inc. Lake Shore Bancorp, Inc. 37 Copyright2010