Lake Shore Bancorp, Inc. · NASDAQ:LSBK
Lake Shore Bancorp — Shareholder Meeting (May 2018)
37 slides from Lake Shore Bancorp's shareholder meeting presentation, May 16, 2018
Slide 1: Annual Shareholders' Meeting May 16, 2018
Annual Shareholders’ Meeting Annual Shareholders’ Meeting May 16, 2018May 16, 2018
Slide 2: 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.AdjournmentAgenda 2
Slide 3: Board of Directors
Director Since Susan C. Ballard2012Tracy S. Bennett2010Sharon E. Brautigam, Nominating and Corporate Governance Committee Chairperson2004David C. Mancuso, Asset/Liability Committee Chairman1998John (“Jack”) L. Mehltretter2016Daniel P. Reininga, President and Chief Executive Officer and Loan Committe
Slide 4: Business of Annual Shareholders Meeting
Business of Annual Shareholders Meeting. Election of Three Directors for a 3-year term ending in 2021 and One Director for a 2-year term ending in 2020:.David C. Mancuso (2021).Jack L. Mehltretter (2020).Gary W. Winger (2021).Nancy L. Yocum (2021).An advisory vote on executive compensation (“Say-on-
Slide 5: Executive Management Presentation
Executive Management Presentation Daniel P. Reininga President and Chief Executive Officer RIGHT PLACE RIGHT TIME RIGHT BANK 5
Slide 6: Safe Harbor Statement
6RIGHT PLACE RIGHT TIME RIGHT BANK 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 sta
Slide 7: An Overview of Lake Shore
An Overview of Lake Shore7.Lake Shore Savings Bank is a federally chartered, community-oriented financial institution headquartered in Western New York, with a longstanding history of community banking since 1891.Current focus on organic growth of loan portfolio primarily through commercial real est
Slide 8: An Overview of Lake Shore (Cont.)
An Overview of Lake Shore (Cont.)8Ownership information based on Proxy Statement and S&P Global, Inc. as of 3/31/2018. Market Information and Dividends as of 5/8/2018.*Includes 3.28% of the shares of common stock outstanding owned by the ESOP. Dividends Market Information Dividend Yield2.37%Total Ma
Slide 9: We are this community's bank
We are this community’s bank Serving Western New York for over 126 Years RIGHT PLACE RIGHT TIME RIGHT BANK 9
Slide 10: Assets topped $500 million for the first time in 2017
RIGHT PLACE RIGHT TIME RIGHT BANK. Assets topped $500 million for the first time in 2017! Currently stand at $530 million at the end of the first quarter of 2018 ! Continue to capitalize on merger related disruptions in the Western New York marketplace. We are a local bank, operated locally. New ent
Slide 11: Western New York is clearly the RIGHT PLACE
RIGHT PLACE RIGHT TIME RIGHT BANK With continued opportunity for growth Western New York is clearly the RIGHT PLACE for a locally headquartered, service oriented financial institution like Lake Shore Savings Bank 11
Slide 12: Executing On Our Strategy for Growth
Executing On Our Strategy for Growth. Continued focus on sustainable profitable growth. Commercial loan portfolio growth. Strategically focused on gathering core, low cost deposits. Manage (Mitigate) Enterprise Risk and Interest Rate Risk. Effective Enterprise Risk Management process. Shorter durati
Slide 13: We have been here for Western New York's businesses and families
We have been here for Western New York’s businesses and families through it all –in challenging economic times and in times of growth and prosperity. As always, we’re here at the RIGHT TIME to help our customers and community members benefit from the region’s current economic upswing. RIGHT PLACE RI
Slide 14: Deployed Unique Products and Services Responding to Customers' Changing Needs
Deployed Unique Products and Services Responding to Customers’ Changing Needs. Business Money Market Savings was introduced in May.LS Ultimate Money Market Savings was introduced in August.LS Premium Money Market Savings was introduced in November .Continue with highly successful HELOC product. Impl
Slide 15: Branch Delivery Channel Activities
Branch Delivery Channel Activities. Solid community based customer relationship approach to develop core business. Richard Greco: Snyder Branch Sales Manager. Been in banking since 1997.A graduate of University at Buffalo and currently lives in Snyder. Scott Swan: Kenton Branch Sales Manager.US Army
Slide 16: Branch Delivery Channel Activities (cont.)
Branch Delivery Channel Activities (cont.).Universal Banker Concierge Approach. Committed to providing financial solutions tailored to each customer’s needs. There is no one size fits all, there is no incentivized pressure sale of the day. WHAT IS BEST FOR THE CUSTOMER IS BEST FOR LAKE SHORE SAVINGS
Slide 17: Secure and Up to Date Technology
Secure and Up to Date Technology. Online banking enhancements support branch business development efforts and meet customers’ technology needs, while maintaining superior customer service. Security Upgrades. Completed conversion to EMV chip cards for debit cards. Password Upgrades for online banking
Slide 18: Customer solutions and one-to-one interactions
Customer solutions and one-to-one interactions are a defining factor of a true community bank such as Lake Shore Savings Bank. By “Putting People First” in all we do, we become the RIGHT BANK for Western New York businesses and consumers. RIGHT PLACE RIGHT TIME RIGHT BANK 18
Slide 19: Governance and Diversity
Governance and Diversity. Board of Directors have strong governance controls and complete internal self- assessments. Diverse board with 30% female representation. First female director appointed 13 years ago in 1995.Board member backgrounds are diverse –have directors with Information Security, Leg
Slide 20: Summary
summary We are well positioned to achieve continued success : . Ample Business Opportunities in Western New York. Strong loan pipelines. Talented , service-oriented team this is the RIGHT PLACE and the RIGHT TIME. And Lake Shore Savings Banks the RIGHT BANK.RIGHT PLACE RIGHT TIME RIGHT BANK 20
Slide 21: Financial Highlights
Financial Highlights Rachel A. Foley Chief Financial Officer and Treasurer RIGHT PLACE RIGHT TIME RIGHT BANK 21
Slide 22: Financial Highlights
Financial Highlights22Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year or for Lake Shore’s quarter ended March 31 for each respective quarter. Dollars in Thousands(except per share amounts)FY 2017FY 2016YoY ChangeAssets$518,977$489,1746.1%Net Loans$
Slide 23: Total Assets
Total Assets23.Focused on asset diversification to improve margins. Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year and for the three months ended March 31, 2018..$482.4M$482.2M$487.5M$473.4M$489.2M$519.0M$530.1 B$0$100,000$200,000$300,000$400,000$
Slide 24: Loan Growth
Loan Growth24.Lake Shore continues to execute its strategic plan of organic growth primarily through loan originations. .From December 31, 2016 through March 31, 2018, net loans increased 13.7% primarily due to net organic commercial loan growth of 30%.Financial data is presented for Lake Shore’s Fi
Slide 25: Loan Originations
Loan Originations2532.5% YOY Increase as of December 31, 2017Dollars in millions. Data is presented for Lake Shore’s Fiscal Year ended December 31, 2014, 2015, 2016, 2017 and for the three months ended March 31, 2018.New Loans20142015201620173/31/2018Residential Mortgage - New & Modified$15.98$21.37
Slide 26: NPLs/Total Net Loans
NPLs/Total Net Loans26.Lake Shore’s nonaccrual loans have consistently remained at lower levels compared to its peers. Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year. Peer group detailed on page36.0.89%1.66%1.66%1.57%1.80%1.05%2.70%4.31%3.75%3.30%
Slide 27: Loan Loss Reserves / Total Net Loans
Loan Loss Reserves / Total Net Loans27Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year and for the three months ended March 31, 2018.0.66%0.65%0.67%0.67%0.88%0.90%0.91%0.00%0.20%0.40%0.60%0.80%1.00%2012201320142015201620171Q 2018RIGHT PLACE RIGHT TI
Slide 28: Continued Focus on Deposit Growth
Continued Focus on Deposit Growth28.Our focus has been on reducing our cost of funds by concentrating our efforts on growing core deposits. Core Deposits as of March 31, 2018 were 64.2% of total deposits, an increase of 48.9% since 2012.Financial data is presented for Lake Shore’s Fiscal Year Ended
Slide 29: Strong Net Interest Margin
Strong Net Interest Margin29.Despite operating in an environment that places significant pressure on spread and margin, Lake Shore’s margin has been increasing due to changes to the loan/deposit mix. Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 and for the three months
Slide 30: Net Income Trends
Net Income Trends30Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year and for the three months ended March 31, 2018.Dollars in thousands except per share amounts. In the first quarter of 2016, Lake Shore sold $14.4 million of U.S. Treasury Bonds resul
Slide 31: Comparison of ROAA Results to Peers
Comparison of ROAA Results to Peers31Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year and for the three months ended March 31, 2018. Peer group is detailed on page 36.* In the first quarter of 2016, Lake Shore sold $14.4 million of U.S. Treasury Bon
Slide 32: Continued Focus on Cost Control
Continued Focus on Cost Control32.Lake Shore’s efficiency ratio is generally below the peer group. Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year and for the three months ended March 31, 2018. Peer group is detailed on page 36.69.2%71.9%76.5%74.6%
Slide 33: LSBK Price / Volume Chart Since IPO
LSBK Price / Volume Chart Since IPO33Price on 5/8/18 -$16.90Source: SNL Financial. As of May 8, 2018.4.006.008.0010.0012.0014.0016.0018.00255075100125150175200Price ($ ) Volume (shares 000's ) Volume Price RIGHT PLACE RIGHT TIME RIGHT BANK
Slide 34: Creating Shareholder Value
Creating Shareholder Value34.High Capital Ratios enable organic growth without diluting shareholder value. Consistent dividend payment history. Stock buyback program currently in place Financial data is presented for Lake Shore’s Fiscal Year Ended December 31 for each respective year and for the thr
Slide 35: Questions & Answers
QUESTIONS & ANSWERS L Lake Shore Bancorp, Inc.
Slide 36: Appendix: Lake Shore Peer Data
Appendix: Lake Shore Peer Data36Source: SNL Financial as of the most recent reported quarter. MHCs located in the Mid-Atlantic and Northeast Regions. Excludes merger targets. Institution Name Ticker City, State Total Assets ($mm) Harbor One Bancorp, Inc. (MHC) HONE Brockton , MA$2,685 Greene County
Slide 37: Lake Shore, MHC Annual Meeting of Members
.Call to Order. Introduction of Proposal to Elect Directors. Tabulation of Votes.AdjournmentLake Shore, MHC Annual Meeting of Members 37