Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2009)
29 slides from Lake Shore Bancorp's shareholder meeting presentation, May 20, 2009
Slide 1: Annual Meeting of Shareholders
Annual Meeting of Shareholders May 20, 2009 Exhibit 99.1
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 concerning future business, revenue and earnings. These statements are not historical
Slide 3: Lake Shore Bancorp Inc. Corporate Profile
Lake Shore Bancorp Inc. Corporate Profile Market Data (as of May 18, 2009) – (Source - NASDAQ) Ticker Symbol LSBK 52 – Week Range $4.31 - $10.18 Current Price $7.20 Market Capitalization $44.72 million Shares Outstanding 6.21M shares 50 Day Avg. Trading Vol. 2,288 shares Dividend Yield 2.78% Ownersh
Slide 4: Lake Shore Savings Facts
Lake Shore Savings Facts: We were established in 1891 and have provided over 118 years of service as a community bank. We continue to provide loan services to the communities we serve. We have the funds available to provide residential mortgage loans and commercial loans to consumers and small busin
Slide 5: Lake Shore Savings Facts (cont'd.)
Lake Shore Savings Facts (cont’d.) We continue to have strong earnings. Our net interest income has been growing. We have maintained a steady dividend payment of $0.05 per share, despite economic news and lower interest rates on loans. Branches in Erie County continue to show great potential and gro
Slide 6: Challenges in 2009
Challenges in Lowest mortgage rates in the last 30 years. Loan refinancing is at an all-time high. Large number of applications for residential mortgage loans have been received in 2009, due to lower interest rates. Lower interest rate yields will result in lower earnings. Holding low rate residenti
Slide 7: Challenges in 2009 (cont'd.)
Challenges in (cont’d.) Wait out the storm until rates get to a level where we can again hold loans in our own portfolio. Increase our small business lending in Erie and Chautauqua County. We added two new members to our commercial lending staff. George Gardner in Erie County and Lou Drago in Chauta
Slide 8: Goals for 2009
Goals for Increase our SBA lending for small business loans. Review new technology to provide the best services available to our customers. Continue to grow our deposit and loans in Erie and Chautauqua Counties. Identify and add two new branches in Erie County by the 3 quarter of 2011. rd
Slide 9: Goals for 2009 (cont'd.)
Goals for (cont’d.) Develop a long term Strategic Plan for the future. Continue to improve on our “Branding” in Erie County. Continue to create value for our shareholders. Provide a fair return on investment for our shareholders.
Slide 10: Financial Presentation
• Financial Presentation – Rachel Foley, CFO
Slide 11: Total Assets
Total Assets ($ in millions) $329.8 $333.7 $354.2 $357.8 $407.8 $414.1 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 Q1 2009
Slide 12: Loans, net
Loans, net ($ in millions) $248.2 $240.5 $218.7 $205.7 $206.2 $199.5 $100.0 $150.0 $200.0 $250.0 $300.0 Q1 2009
Slide 13: Loan Composition
Loan Composition (as of December 31, 2008) Commercial real estate 8.14% Construction loans 2.70% Commercial loans 3.09% One-to-four family 73.35% Consumer loans 0.98% Home equity 11.74%
Slide 14: Non-performing Loans as a percentage of Gross Loans
Non-performing Loans as a percentage of Gross Loans 0.40% 0.66% 0.64% 0.75% 0.69% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00%
Slide 15: Loan Loss Reserves as a percentage of Loans
Loan Loss Reserves as a percentage of Loans 0.65% 0.60% 0.61% 0.56% 0.61% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00%
Slide 16: Total Deposits
Total Deposits ($ in millions) $300.7 $243.6 $250.9 $249.6 $293.2 $240.8 $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 Q1
Slide 17: Deposit Composition
Deposit Composition (as of December 31, 2008) Time Deposits < $100,000 46.37% Savings 9.31% Money Market Accts 8.58% Interest- Bearing Demand 12.04% Time Deposits > $100,000 14.90%
Slide 18: Regulatory Capital Requirements
Regulatory Capital Requirements Regulatory Capital Requirements
Slide 19: Net Interest Income
Net Interest Income ($ in millions) $9.4 $9.5 $9.7 $9.5 $11.2 $- $5.0 $10.0 $15.0
Slide 20: Treasury Yield
Treasury Yield 0.52 3.19 1.25 1.5 1.72 1.97 2.47 2.64 3.18 3.48 3.89 4.57 4.57 0.14 0.19 0.33 0.94 1.4 2.03 2.7 4.11 4.06 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr Treasury Maturities 5/2/2008 5/4/2009
Slide 21: Interest Rate Margin & Spread
Interest Rate Margin & Spread (in percentages) 3.15 3.09 3.00 2.92 3.19 2.97 3.03 2.93 2.60 2.42 2.75 2.61 0.00 1.00 2.00 3.00 4.00 5.00 Q1 2009 Net Interest Margin Interest Rate Spread
Slide 22: Net Income
Net Income ($ in millions) $2.2 $2.1 $1.8 $1.8 $1.5 $- $0.5 $1.0 $1.5 $2.0 $2.5
Slide 23: Return on Average Assets
Return on Average Assets (in percentages) 0.68% 0.62% 0.52% 0.52% 0.39% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00%
Slide 24: Investment Impairment
Investment Impairment • Due to disruptions in the security & housing markets during 2008, some of our investments experienced a severe decline in market value. As a result, we recorded a pre-tax impairment loss of $1.9 million ($1.2 million net of tax) on the value of our investment portfolio in 200
Slide 25: Interest Rate Floor
Interest Rate Floor • Purchased August 2006. • Cost $221,000. • Covers $10 Million “notional” amount of variable rate loans tied to prime rate. • Receive interest income if prime rate falls below 8%. • Prime rate fell below 8% in September 2007. • $346,180 interest income received through January 30
Slide 26: Interest Rate Floor (cont'd.)
Interest Rate Floor (cont’d.) • Floor product is a derivative. • Increase or decrease in fair market value is recorded as interest income. • Fair market value increased in 2007 and 2008 due to falling interest rates. • Since inception, we recorded $669,000 in gains in the fair value of this asset. •
Slide 27: 1st Quarter Results
st Quarter Results Total Assets up $6.2M since Dec. 31 st – Loans, net up $7.7M. Total Deposits up $7.4M since Dec. 31 st Increases primarily due to the new branch office that opened in Kenmore, NY on December 1, 2008, and due to low interest rates being offered on residential mortgage loans.
Slide 28: 1st Quarter 2009 vs. 1st Quarter 2008 Results
st Quarter 2009 vs. 1 st Quarter 2008 Results • $405,000 net income compared to $658,000 in 1 st quarter of 2008, a 38.4% decrease. – $302,000 decrease in interest income due to fair value and interest income on interest rate floor being $43,000 prior to sale on January 30, 2009, versus a $345,000 i
Slide 29: Dividends Paid per Share
Dividends Paid per Share $0.03 $0.03 $0.03 $0.03 $0.04 $0.04 $0.05 $0.05 $0.05 $0.05 $0.05 $- $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2