LSBK

DUNKIRK, N.Y., July 22, 2026 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the holding company for Lake Shore Bank (the “Bank”), reported unaudited net income of $2.2 million, or $0.29 per diluted share, for the second quarter of 2026 compared to net income of $1.9 million, or $0.25 per diluted share, for the second quarter of 2025.  For the first six months of 2026, the Company reported unaudited net income of $4.1 million, or $0.56 per diluted share, as compared to $3.0 million, or $0.39 per diluted share, for the first six months of 2025. The Company's financial performance for the second quarter of 2026 was positively impacted primarily by higher net interest income. "I am pleased with our second quarter results, which reflect disciplined expense management, improved net interest income, and our team’s focused execution of strategic initiatives,” stated Kim C. Liddell, President, CEO, and Director. “These results provide a strong foundation as we continue serving our customers, communities, and shareholders." Second Quarter 2026 and Year-to-Date Financial Highlights: Net income increased to $2.2 million during the second quarter of 2026, an increase of $254,000, or 13.2%, when compared to the second quarter of 2025. Net income was positively impacted by an increase in net interest income of $771,000, or 12.6%, when compared to the second quarter of 2025; Net income increased to $4.1 million during the first half of 2026, an increase of $1.1 million, or 37.7%, when compared to the first half of 2025. Net income was positively impacted by an increase in net interest income of $2.0 million, or 17.0%, when compared to the first half of 2025; Net interest margin increased to 4.06% during the second quarter of 2026, an increase of four basis points when compared to net interest margin of 4.02% during the first quarter of 2026 and an increase of 22 basis points when compared to net interest margin of 3.84% during the second quarter of 2025; Efficiency ratio improved to 63.77% for the quarter ended June 30, 2026, a decrease of 5.81% as compared to 69.58% for the quarter ended March 31, 2026 and a decrease of 3.05% when compared to 66.82% for the quarter ended June 30, 2025; Annualized return on average assets increased to 1.19% for the quarter ended June 30, 2026, an increase of 12 basis points as compared to 1.07% for the quarter ended March 31, 2026, and an increase of eight basis points when compared to 1.11% for the quarter ended June 30, 2025; Book value per share increased 1.7% to $18.41 per share at June 30, 2026, as compared to $18.10 per share at December 31, 2025; Non-performing assets as a percentage of total assets decreased to 0.20% at June 30, 2026, as compared to 0.23% at December 31, 2025; and The Bank's capital position remains "well capitalized" with a Tier 1 Leverage ratio of 17.43% and a Total Risk-Based Capital ratio of 24.04% at June 30, 2026. Net Interest Income Net interest income for the second quarter of 2026 increased by $233,000, or 3.5%, to $6.9 million as compared to $6.7 million for the first quarter of 2026 and increased $771,000, or 12.6%, as compared to $6.1 million for the second quarter of 2025. Annualized net interest margin was 4.06% for the second quarter of 2026, as compared to 4.02% for the first quarter of 2026 and 3.84% for the second quarter of 2025. Net interest income for the first half of 2026 increased $2.0 million, or 17.0%, to $13.6 million as compared to $11.6 million for the first half of 2025. Annualized net interest margin was 4.04% for the first half of 2026, as compared to 3.67% for the first half of 2025. Interest income for the second quarter of 2026 was $9.4 million, an increase of $333,000, or 3.7%, compared to $9.1 million for the first quarter of 2026, and an increase of $281,000, or 3.1%, compared to $9.1 million for the second quarter of 2025.  Interest income was $18.4 million for the first six months of 2026, an increase of $1.0 million, or 5.5%, when compared to $17.5 million for the first six months of 2025. The increase in interest income from the prior quarter was primarily due to a six basis point increase in the average yield on interest-earning assets and a $16.7 million, or 2.5%, increase in the average balance of interest-earning assets. Interest earned on loans increased by $232,000, or 2.8%, due to an eight basis point increase in the average yield on loans and an $8.1 million, or 1.5%, increase in the average balance of loans. Interest earned on interest-earning deposits increased by $107,000, or 22.8%, due to a $10.7 million, or 19.9%, increase in the average balance of interest-earning deposits and a nine basis point increase in the average yield earned on interest-earning deposits. The increase in interest income from the prior year quarter was primarily due to a $42.0 million, or 6.6%, increase in the average balance of interest-earning assets, partially offset by a 19 basis point decrease in the average yield on interest-earning assets. During the second quarter of 2026 as compared to the same period in 2025, there was a $306,000, or 113.3%, increase in interest income on interest-earning deposits due to a $37.6 million increase in the average balance of interest-earning deposits. This increase was partially offset by a 42 basis point decrease in the average yield on interest-earning deposits. Interest income for the first half of 2026 was $18.4 million, an increase of $968,000, or 5.5%, compared to $17.5 million, for the first half of 2025. This increase was primarily due to an increase in the average balance of interest-earning assets of $38.7 million, or 6.1%, when compared to the previous year period. Interest earned on interest-earning deposits increased by $541,000, or 107.3%, primarily due to a $34.1 million, or 134.4%, increase in the average balance of interest-earning deposits. Interest earned on loans increased by $474,000, or 2.9%, due to an increase in the average balance of loans of $5.6 million, or 1.0%, along with an 11 basis points increase in the average yield earned on loans. Interest expense for the second quarter of 2026 was $2.5 million, an increase of $100,000, or 4.2%, from $2.4 million in the first quarter of 2026, and a decrease of $490,000, or 16.4%, from $3.0 million for the second quarter of 2025. Interest expense for the first six months of 2026 was $4.9 million, a decrease of $1.0 million, or 16.9%, from $5.9 million for the first six months of 2025. The increase in interest expense when compared to the previous quarter was primarily due to an increase in the average balance of interest-bearing liabilities of $11.6 million, or 2.5%, along with an increase in the average interest rate paid on interest-bearing liabilities of three basis points. During the second quarter of 2026, as compared to the previous quarter, interest expense on deposits increased by $100,000, or 4.2%, due to a $10.9 million, or 2.3% increase in the average balance of interest-bearing deposits and a three basis point increase in the average interest rate paid on interest-bearing deposit accounts. The increase in interest paid on interest-bearing deposit accounts was impacted by a $12.7 million, or 6.4%, increase in the average balance of time deposits, partially offset by a $2.4 million, or 1.5%, decrease in the average balance of money market accounts. The average interest rate paid on deposit accounts increased three basis points during the second quarter of 2026, when compared to the previous quarter primarily due to a two basis point increase in the average interest rate paid on money market accounts. The decrease in interest expense when compared to the prior year quarter was primarily due to a 33 basis points decrease in average interest rate paid on interest-bearing liabilities and a $15.1 million, or 3.0%, decrease in the average balance of interest-bearing liabilities. During the second quarter of 2026 as compared to the same period in 2025, interest expense on deposits decreased by $476,000, or 16.1%, due to a 33 basis points decrease in the average interest rate paid on interest-bearing deposit accounts and a $14.3 million, or 2.9%, decrease in the average balance of interest-bearing deposits. The decrease in the average interest rate paid on deposit accounts was primarily due to the decrease in market interest rates, time deposit repricing, and a marginal shift in deposit composition. Average interest-bearing deposit balances decreased 2.9% during the second quarter of 2026 when compared to the second quarter of 2025 due to a decrease in all deposit categories except money market accounts. Interest expense for the first half of 2026 was $4.9 million, a decrease of $997,000, or 16.9%, from $5.9 million for the first half of 2025. The decrease in interest expense was primarily due to a 35 basis points decrease in average interest rate paid on interest-bearing liabilities and a decrease in the average balance of interest-bearing liabilities of $14.3 million, or 2.9%. During the first half of 2026, there was a $946,000 decrease in interest expense on interest-bearing deposit accounts when compared to the first half of 2025 due to a 33 basis points decrease in the average interest rate paid on interest-bearing deposits along with a decrease in the average balance of interest-bearing deposits of $12.0 million, or 2.5%. The decrease in the average interest rate paid on deposit accounts was primarily due to the decrease in market interest rates, time deposit repricing, and a marginal shift in deposit composition. Non-Interest Income Non-interest income was $749,000 for the second quarter of 2026, an increase of $46,000, or 6.5%, as compared to $703,000 for the first quarter of 2026, and a decrease of $51,000, or 6.4%, as compared to $800,000 for the second quarter of 2025. The increase from the prior quarter was primarily due to a $22,000 increase in service charges and fees and a $16,000 increase in debit card fees. The decrease from the prior year quarter was primarily due to a $65,000 decrease in gain on equity securities that were held in the prior year, partially offset by a $28,000 increase in earnings on bank-owned life insurance. Non-interest income was $1.5 million for the first half of 2026, a decrease of $72,000, or 4.7%, as compared to the first half of 2025. The decrease was primarily due to a $111,000 decrease in gain on equity securities that were held in the prior year and a $14,000 decrease in earnings on annuity assets, partially offset by a $53,000 increase in earnings on bank-owned life insurance and a $12,000 increase in service charges and fees. Non-Interest Expense Non-interest expense was $4.9 million for the second quarter of 2026, a decrease of $250,000, or 4.9%, as compared to $5.1 million for the first quarter of 2026, and an increase of $248,000, or 5.4%, as compared to $4.6 million for the second quarter of 2025. The decrease from the prior quarter was primarily due to a decrease in salaries and employee benefits of $216,000, or 6.5%, along with decreases in occupancy and equipment of $77,000, or 10.7%, partially offset by an increase in data processing costs of $65,000, or 18.0%. The increase from the second quarter of 2025 was primarily related to an increase in the cost of health insurance, taxes, and other non-salary benefits of $236,000, or 8.3%, and an increase in occupancy and equipment of $27,000, or 4.4%, partially offset by a decrease in data processing of $31,000, or 6.8%. Non-interest expense was $10.0 million for the first half of 2026, an increase of $493,000, or 5.2%, as compared to $9.5 million for the first half of 2025. The increase related primarily to an increase in the cost of health insurance, taxes, and other non-salary benefits of $628,000, or 10.9%, partially offset by a decrease in data processing costs of $130,000, or 14.2% and professional services of $37,000, or 6.5%, as a result of management's efforts to optimize operating expenses. Income Tax Expense Income tax expense was $477,000 for the second quarter of 2026, an increase of $47,000, or 10.9%, as compared to $430,000 for the first quarter of 2026, and an increase of $99,000, or 26.2%, as compared to $378,000 for the second quarter of 2025. The effective tax rate was 18.0% for the second quarter of 2026 as compared to 18.3% for the first quarter of 2026 and 16.5% for the second quarter of 2025. The increase in income tax expense from the prior quarter and prior year quarter was primarily related to the increase in pre-tax income earned during the current quarter. The increase from the prior year quarter was also due to an increase in the effective tax rate, which was primarily due to an increase in taxable income earned during the second quarter of 2026. Income tax expense was $907,000 for the first half of 2026, an increase of $322,000, or 55.0%, as compared to $585,000 for the first half of 2025. The effective tax rate was 18.1% for the first half of 2026 and 16.4% for the first half of 2025. The increase in income tax expense from the first half of 2025 was primarily related to the increase in pre-tax income earned during the first half of 2026. The increase in the effective tax rate during the first half of 2026 was primarily due to an increase in taxable income earned during the first half of 2026. Credit Quality The Company’s allowance for credit losses on loans was $4.7 million as of June 30, 2026 as compared to $4.9 million as of December 31, 2025. The Company’s allowance for credit losses on unfunded commitments was $495,000 as of June 30, 2026 as compared to $361,000 as of December 31, 2025. Non-performing assets as a percent of total assets decreased to 0.20% at June 30, 2026 as compared to 0.23% at December 31, 2025, primarily due to a decrease in non-performing assets of $250,000, or 14.9%. The Company’s allowance for credit losses on loans as a percent of loans at amortized cost was 0.84% and 0.87% and its allowance for credit losses on loans as a percent of non-performing loans was 331.85% and 290.71% at June 30, 2026 and December 31, 2025, respectively. The Company recorded $119,000 provision for credit losses during the second quarter of 2026 and recorded a net provision for credit losses of $5,000 for the first half of 2026. Of the amount recorded for the second quarter of 2026, $170,000 related to a provision recorded to the allowance for credit losses for unfunded commitments, and $51,000 related to a credit recorded to the allowance for credit losses on the loan portfolio. For the first half of 2026, $134,000 related to a provision recorded to the allowance for credit losses for unfunded commitments, and $137,000 related to a credit recorded to the allowance for credit losses on the loan portfolio, net of charge-offs and recoveries. The increase in the allowance for credit losses on unfunded commitments and the corresponding provision for credit losses recognized during the first half of 2026 was primarily the result of an increase in outstanding unfunded commitments between the periods. The decrease in the allowance for credit losses on the loan portfolio was primarily related to a decrease in the calculated reserve rates, including the expected quantitative losses inclusive of forecasted economic trends, and the qualitative factor loss rates related to economic factors. The decrease primarily related to the commercial real estate and residential mortgage loan pools, partially offset by an increase in the calculation of expected losses for the commercial loan pool. Balance Sheet Summary Total assets at June 30, 2026 were $736.7 million, a $9.3 million increase, or 1.3%, as compared to $727.3 million at December 31, 2025. Cash and cash equivalents increased by $8.0 million, or 12.4%, from $64.3 million at December 31, 2025 to $72.2 million at June 30, 2026. The increase in cash and cash equivalents was primarily due to an increase in deposits of $5.0 million, or 0.9%, partially offset by an increase in loans receivable of $2.9 million, or 0.5%. Securities available for sale were $53.6 million at June 30, 2026 as compared to $56.1 million at December 31, 2025 representing a decrease primarily due to a decrease in the market value of the portfolio and paydowns received during the first half of 2026. Net loans receivable at June 30, 2026 and December 31, 2025 were $558.3 million and $555.4 million, respectively. Total deposits at June 30, 2026 were $578.2 million, an increase of $5.0 million, or 0.9%, compared to $573.3 million at December 31, 2025. The Company's uninsured deposits as a percentage of total deposits were 10.9% and 11.3%, at June 30, 2026 and December 31, 2025, respectively. Stockholders’ equity at June 30, 2026 was $144.8 million, a $3.1 million increase, or 2.2%, as compared to $141.6 million at December 31, 2025. The increase in stockholders’ equity was primarily attributed to net income of $4.1 million, partially offset by dividends declared and paid of $1.3 million during the first half of 2026. About Lake Shore Lake Shore Bancorp is the holding company of Lake Shore Bank, a New York chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. Lake Shore Bancorp’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about Lake Shore Bancorp is available at  www.mylsbank.com. Safe-Harbor This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the Company’s and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, tariffs, unanticipated changes in our liquidity position, climate change, public health issues, geopolitical conflict, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized. Source: Lake Shore Bancorp, Inc.Category: Financial Investor Relations/Media ContactKim C. LiddellPresident, CEO, and DirectorLake Shore Bancorp, Inc.31 East Fourth StreetDunkirk, New York 14048(716) 366-4070 ext. 1012 Selected Financial Condition Data Statements of Income (1) Per share information reflects the effects of the Company's conversion and related stock offering for all periods presented, as applicable.(2) Annualized Average Balance Sheets, Interest, and Rates (Quarterly Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.92% and 3.03% for the three months ended June 30, 2026 and 2025, respectively. Yields above are not presented on a tax equivalent basis.(2) Annualized.(3) Included within savings accounts as of June 30, 2025 is $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's completed second-step conversion and stock offering. The average rate paid on these funds was 5 basis points and the collection of these funds resulted in a $3.8 million increase in the average balance of savings accounts during the three months ended June 30, 2025. Average Balance Sheets, Interest, and Rates (Year-to-Date Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.88% and 3.03% for the six months ended June 30, 2026 and 2025, respectively. Yields above are not presented on a tax equivalent basis.(2) Annualized.(3) Included within savings accounts as of June 30, 2025 is $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's completed second step conversion and stock offering. The average rate paid on these funds was 5 basis points and the collection of these funds resulted in a $1.9 million increase in the average balance of savings accounts during the six months ended June 30, 2025. Average Balance Sheets, Interest, and Rates (Prior Quarter Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.92% and 2.85% for the three months ended June 30, 2026 and March 31, 2026, respectively. Yields above are not presented on a tax equivalent basis.(2) Annualized. Selected Quarterly Financial Data (1) Share and per share information reflects the effects of the Company's conversion and related stock offering for all periods presented, as applicable.(2) Annualized

DUNKIRK, N.Y., April 22, 2026 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the holding company for Lake Shore Bank (the “Bank”), reported unaudited net income of $1.9 million, or $0.26 per diluted share, for the first quarter of 2026 compared to net income of $1.1 million, or $0.14 per diluted share, for the first quarter of 2025. The Company's financial performance for the first quarter of 2026 was positively impacted primarily by an increase in net interest income. "The results from the first quarter reflected a typical beginning of the year for our company," stated Kim C. Liddell, President, CEO, and Director. "Despite intense competition and challenging loan pricing environments, we remain dedicated to optimizing our balance sheet and operational efficiencies to enhance the Company’s overall performance." First Quarter 2026 Financial Highlights: Net income increased to $1.9 million during the first quarter of 2026, an increase of $866,000, or 81.9%, when compared to the first quarter of 2025. Net income was positively impacted by an increase in net interest income of $1.2 million, or 21.9%, when compared to the first quarter of 2025; Net interest margin increased to 4.02% during the first quarter of 2026, an increase of 17 basis points when compared to net interest margin of 3.85% during the fourth quarter of 2025 and an increase of 53 basis points when compared to net interest margin of 3.49% during the first quarter of 2025; Efficiency ratio improved to 69.58% for the quarter ended March 31, 2026, a decrease of 924 basis points as compared to 78.82% for the quarter ended March 31, 2025; Return on average assets increased to 1.07% for the quarter ended March 31, 2026, an increase of 45 basis points as compared to 0.62% for the quarter ended March 31, 2025; Book value per share increased to $18.11 per share at March 31, 2026, as compared to $18.10 per share at December 31, 2025; Non-performing assets as a percentage of total assets decreased to 0.22% at March 31, 2026, as compared to 0.23% at December 31, 2025; and The Bank's capital position remains "well capitalized" with a Tier 1 Leverage ratio of 17.54% and a Total Risk-Based Capital ratio of 23.81% at March 31, 2026. Net Interest Income Net interest income for the first quarter of 2026 increased by $38,000, or 0.6%, to $6.7 million as compared to $6.6 million for the fourth quarter of 2025 and increased $1.2 million, or 21.9%, as compared to $5.5 million for the first quarter of 2025. Net interest margin and interest rate spread were 4.02% and 3.43%, respectively, for the first quarter of 2026 as compared to 3.85% and 3.22%, respectively, for the fourth quarter of 2025 and 3.49% and 2.94%, respectively, for the first quarter of 2025. Interest income for the first quarter of 2026 was $9.1 million, a decrease of $402,000, or 4.3%, compared to $9.5 million for the fourth quarter of 2025, and an increase of $688,000, or 8.2%, compared to $8.4 million for the first quarter of 2025. The decrease in interest income from the prior quarter was primarily due to a $26.1 million, or 3.8%, decrease in the average balance of interest-earning assets and a three basis point decrease in the average yield on interest-earning assets. Interest earned on interest-earning deposits decreased by $283,000, or 37.6%, due to a $23.1 million decrease in the average balance of interest-earning deposits and a 43 basis point decrease in average yield on interest-earning deposits during the first quarter of 2026 as compared to the prior quarter. The increase in interest income from the prior year quarter was primarily due to a $35.3 million, or 5.6%, increase in the average balance of interest-earning assets and a 13 basis point increase in the average yield of interest-earning assets. During the first quarter of 2026 as compared to the same period in 2025, there was a $480,000 increase in interest income on loans due to a 29 basis point increase in the average yield earned on loans and a $5.6 million, or 1.0%, increase in the average balance of loans. Further, interest income on interest-earning deposits increased by $235,000, or 100.4%, primarily due to a $30.5 million, or 129.4%, increase in the average balance of interest-earning deposits. These increases were partially offset by a $27,000 decrease in interest income on securities due to a 16 basis point decrease in the average yield of securities and a $752,000 decrease in the average balance of the securities portfolio due to paydowns. Interest expense for the first quarter of 2026 was $2.4 million, a decrease of $440,000, or 15.5%, from $2.8 million for the fourth quarter of 2025, and a decrease of $507,000, or 17.5%, from $2.9 million for the first quarter of 2025. The decrease in interest expense when compared to the previous quarter was primarily due to a $26.1 million, or 5.3%, decrease in the average balance of interest-bearing liabilities. During the first quarter of 2026 as compared to the previous quarter, interest expense on interest-bearing deposits decreased by $422,000, or 15.1%, due to a 24 basis point decrease in the average interest rate paid on deposit accounts. The decrease in average interest rate paid on interest-bearing accounts was primarily due to the decrease in market interest rates and proactive management of deposit funding costs. Average interest-bearing deposit balances were $468.1 million, a 5.0% decrease during the first quarter of 2026 when compared to the previous quarter due to a decrease in the average balance of all deposit account types. Interest expense on borrowed funds and other interest-bearing liabilities decreased by $18,000 due to a $1.7 million, or 41.7%, decrease in the average balance of borrowed funds and other interest-bearing liabilities due to a decrease in the average balance of outstanding borrowings. The decrease in interest expense when compared to the prior year quarter was primarily due to a 36 basis point decrease in average interest rate paid on interest-bearing liabilities, and a $13.6 million, or 2.8% decrease in the average balance of interest-bearing liabilities. During the first quarter of 2026 as compared to the first quarter of 2025, interest expense on interest-bearing deposits decreased by $470,000, or 16.5%, due to a 35 basis point decrease in the average interest rate paid on interest-bearing deposit accounts, along with a $9.7 million, or 2.0% decrease in the average balance of interest-bearing deposits. The decrease in average interest-bearing deposits accounts was due to a decrease in the average balance of all deposit account types except money market accounts. During the first quarter of 2026 as compared to the same period in 2025, there was a $337,000 decrease in interest paid on time deposit accounts due to a 48 basis point decrease in the average interest rate paid on time deposits. The decrease in the average interest rate paid on time deposit accounts was primarily due to the decrease in market interest rates and proactive management of deposit funding costs. During the first quarter of 2026, interest expense on borrowed funds and other interest-bearing liabilities decreased by $37,000, or 61.7%, compared to the first quarter of 2025, primarily due to a $3.9 million, or 62.4% decrease in average borrowed funds and other interest-bearing liabilities outstanding due to the repayment of our borrowings during 2025. Non-Interest Income Non-interest income was $703,000 for the first quarter of 2026, an increase of $20,000, or 2.9%, as compared to $683,000 for the fourth quarter of 2025. The increase from the prior quarter was primarily due to the $40,000 loss on the sale of equity securities during the prior quarter, and a $27,000 increase in earnings on annuity assets. Non-interest income during the first quarter of 2026 decreased $21,000, or 2.9%, as compared to $724,000 for the first quarter of 2025. The decrease from the prior year quarter was primarily due to a $46,000 gain on equity securities during the first quarter of 2025, partially offset by a $26,000 increase in earnings on bank-owned life insurance when compared to the first quarter of 2025. Non-Interest Expense Non-interest expense was $5.1 million for the first quarter of 2026, an increase of $203,000, or 4.1%, as compared to $4.9 million for the fourth quarter of 2025 and an increase of $245,000, or 5.0%, as compared to $4.9 million for the first quarter of 2025. The increase from the previous quarter was primarily related to an increase in the cost of health insurance, taxes, and other non-salary benefits, of $322,000, or 33.3%, and an increase in occupancy and equipment expenses of $50,000, or 7.5%. These increases were partially offset by a $144,000 decrease in data processing costs as we renegotiated our primary data processing contract. The increase from the prior year quarter was also primarily related to an increase in the cost of health insurance, taxes, and other non-salary benefits, of $300,000, or 30.3%, and an increase in occupancy and equipment expenses of $43,000, or 6.4%. These increases were partially offset by a $98,000 decrease in data processing costs as we renegotiated our primary data processing contract, and a $53,000 decrease in professional services. Income Tax Expense Income tax expense was $430,000 for the first quarter of 2026, an increase of $19,000, or 4.6%, as compared to $411,000 for the fourth quarter of 2025, and an increase of $224,000, or 108.7%, as compared to $206,000 for the first quarter of 2025. The increase in income tax expense from the prior quarter and prior year quarter was primarily related to the increase in taxable income earned during the current quarter. Credit Quality The Company’s allowance for credit losses on loans was $4.8 million as of March 31, 2026 as compared to $4.9 million as of December 31, 2025. The Company’s allowance for credit losses on unfunded commitments was $325,000 as of March 31, 2026 as compared to $361,000 as of December 31, 2025. Non-performing assets as a percent of total assets decreased to 0.22% at March 31, 2026 as compared to 0.23% at December 31, 2025, due to a decrease in non-performing assets of $95,000, or 5.7%. The Company’s allowance for credit losses on loans as a percent of loans at amortized cost was 0.86% and 0.87% and its allowance for credit losses on loans as a percent of non-performing loans was 302.76% and 290.71%, at March 31, 2026, and December 31, 2025, respectively. The Company recorded a credit to provision for credit losses of $113,000 for the first quarter of 2026, of which $77,000 related to the loan portfolio and $36,000 related to the reserve for unfunded commitments. The decrease in the allowance for credit losses on loans and the corresponding credit to the provision for credit losses recognized during the first quarter of 2026 was the result of a decrease in the quantitative and qualitative loss rates, inclusive of forecasted economic trends, primarily for the commercial real estate and home equity loan pools. Balance Sheet Summary Total assets at March 31, 2026 were $722.0 million, a $5.3 million decrease, or 0.7%, as compared to $727.3 million at December 31, 2025. Cash and cash equivalents decreased by $2.7 million, or 4.2%, from $64.3 million at December 31, 2025 to $61.6 million at March 31, 2026. The decrease in cash and cash equivalents was primarily due to a decrease in deposits of $6.7 million, or 1.2%, partially offset by a decrease in loans receivable of $1.6 million, or 0.3%. Securities available for sale were $54.2 million at March 31, 2026 as compared to $56.1 million at December 31, 2025, representing a decrease primarily due to a decrease in the market value of the portfolio and paydowns received during the first quarter of 2026. Net loans receivable at March 31, 2026 and December 31, 2025 were $553.9 million and $555.4 million, respectively. Total deposits at March 31, 2026 were $566.6 million, a decrease of $6.7 million, or 1.2%, compared to $573.3 million at December 31, 2025. The Company’s percentage of uninsured deposits to total deposits was 10.0% and 11.3%, at March 31, 2026 and December 31, 2025, respectively. Stockholders’ equity at March 31, 2026 was $142.4 million, a $739,000 increase, or 0.5%, as compared to $141.6 million at December 31, 2025. The increase in stockholders’ equity was primarily attributed to net income of $1.9 million earned during the first quarter of 2026, partially offset by a $689,000 increase in accumulated other comprehensive losses and dividends declared and paid of $661,000. About Lake Shore Lake Shore Bancorp is the holding company of Lake Shore Bank, a New York chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. Lake Shore Bancorp’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about Lake Shore Bancorp is available at www.mylsbank.com. Safe-Harbor This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the Company’s and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, tariffs, unanticipated changes in our liquidity position, climate change, public health issues, geopolitical conflict, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, dividend policy changes, and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized. Source: Lake Shore Bancorp, Inc. Category: Financial Investor Relations/Media Contact Kim C. Liddell President, CEO, and Director Lake Shore Bancorp, Inc. 31 East Fourth Street Dunkirk, New York 14048 (716) 366-4070 ext. 1012 Selected Financial Condition Data Statements of Income (1) Per share information reflects the effects of the Company's conversion and related stock offering for all periods presented, as applicable. (2) Annualized. Average Balance Sheets, Interest, and Rates (Quarterly Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.85% and 3.04% for the three months ended March 31, 2026 and March 31, 2025, respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. Average Balance Sheets, Interest, and Rates (Prior Quarter Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.85% and 2.90% for the three months ended March 31, 2026 and December 31, 2025, respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. Selected Quarterly Financial Data (1) Share and per share information reflects the effects of the Company's conversion and related stock offering for all periods presented, as applicable. (2) Annualized.

DUNKIRK, N.Y., Jan. 21, 2026 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the holding company for Lake Shore Bank (the “Bank”), reported unaudited net income of $1.9 million, or $0.26 per diluted share, for the fourth quarter of 2025 compared to net income of $1.5 million, or $0.19 per diluted share, for the fourth quarter of 2024. For the year ended December 31, 2025, the Company reported unaudited net income of $7.3 million, or $0.97 per diluted share, as compared to $4.9 million, or $0.65 per diluted share, for the year ended December 31, 2024. The Company's 2025 financial performance was positively impacted by an increase in net interest income and a decrease in non-interest expenses. "Our fourth quarter and 2025 year-end results reflect the effectiveness of our strategies," stated Kim C. Liddell, President, CEO, and Director. "We increased core earnings, improved margins, strengthened the balance sheet, reduced borrowings and non-performing assets, and grew tangible book value. Our disciplined focus on prudent loan growth and core deposits positions us well for 2026 and delivering shareholder value." Fourth Quarter 2025 and Full Year Financial Highlights: Net income increased to $1.9 million during the fourth quarter of 2025, an increase of $465,000, or 31.7%, when compared to the fourth quarter of 2024 and increased to $7.3 million during the year ended December 31, 2025, an increase of $2.3 million, or 47.4%, when compared to the year ended December 31, 2024; Net interest margin increased to 3.85% during the fourth quarter of 2025, an increase of 13 basis points when compared to net interest margin of 3.72% during the third quarter of 2025. Net interest margin increased to 3.73% for the year ended December 31, 2025, an increase of 52 basis points when compared to net interest margin of 3.21% for the year ended December 31, 2024; Efficiency ratio improved to 69.21% for the year ended December 31, 2025, a decrease of 12.79% as compared to 82.00% for the year ended December 31, 2024; Reduced reliance on wholesale funding by repaying all outstanding borrowings at December 31, 2024 of $10.3 million during the year ended December 31, 2025; Book value per share increased 56.4% to $18.10 per share at December 31, 2025, as compared to $11.57 per share at December 31, 2024; Non-performing assets as a percentage of total assets decreased to 0.23% at December 31, 2025, as compared to 0.55% at December 31, 2024, primarily due to a decrease in non-performing assets of $2.1 million, or 55.8% during 2025; and The Bank's capital position remains "well capitalized" with a Tier 1 Leverage ratio of 16.65% and a Total Risk-Based Capital ratio of 23.51% at December 31, 2025. Net Interest Income Net interest income for the fourth quarter of 2025 increased by $267,000, or 4.2%, to $6.6 million as compared to $6.4 million for the third quarter of 2025 and increased $1.3 million, or 24.0%, as compared to $5.3 million for the fourth quarter of 2024. Net interest margin and interest rate spread were 3.85% and 3.21%, respectively, for the fourth quarter of 2025 as compared to 3.72% and 3.02%, respectively, for the third quarter of 2025 and 3.31% and 2.72%, respectively, for the fourth quarter of 2024. Net interest income for the year ended December 31, 2025 increased $3.5 million, or 16.6%, to $24.6 million as compared to $21.1 million for the year ended December 31, 2024. Net interest margin and interest rate spread were 3.73% and 3.13%, respectively, for the year ended December 31, 2025 as compared to 3.21% and 2.62%, respectively, for the year ended December 31, 2024. Interest income for the fourth quarter of 2025 was $9.5 million, an increase of $106,000, or 1.1%, compared to $9.4 million for the third quarter of 2025, and an increase of $867,000, or 10.1%, compared to $8.6 million for the fourth quarter of 2024. The increase in interest income from the prior quarter was primarily due to a three basis points increase in the average yield on interest-earning assets. Interest income on loans increased by $152,000, or 1.9%, due to an 11 basis points increase in average yield during the fourth quarter of 2025. The increase in interest income from the prior year quarter was primarily due to a $43.4 million, or 6.7%, increase in the average balance of interest-earning assets and a 17 basis points increase in the average yield of interest-earning assets. During the fourth quarter of 2025 as compared to the same period in 2024, there was a $642,000 increase in interest income on loans due to a 32 basis points increase in the average yield earned on loans and a $13.8 million, or 2.6%, increase in the average balance of loans. Further, interest income on interest-earning deposits increased by $253,000, or 50.7%, primarily due to a $33.8 million, or 77.9%, increase in the average balance of interest-earning deposits. These increases were partially offset by a $28,000 decrease in interest income on securities due to a $4.1 million decrease in the average balance of the securities portfolio due to paydowns. Interest income for the year ended December 31, 2025 was $36.3 million, an increase of $1.5 million, or 4.2%, compared to $34.8 million for the year ended December 31, 2024. The increase was due to a 20 basis points increase in the average yield on interest-earning assets primarily due to an increase in the average yield earned on loans. During the year ended December 31, 2025 as compared to 2024, there was a $2.1 million increase in interest income on loans due to a 32 basis points increase in the average yield on loans and a $4.5 million, or 0.8%, increase in the average balance of loans, partially offset by a decrease in interest income on interest earning deposits. Interest income on interest-earning deposits decreased to $2.1 million in 2025, a decrease of $410,000, or 16.7%, from $2.5 million in 2024, due to a 100 basis points decrease in average yield of interest-earning deposits, partially offset by a $1.8 million, or 3.8%, increase in the average balance of interest-earning deposits. Interest expense for the fourth quarter of 2025 was $2.8 million, a decrease of $161,000, or 5.4%, from the third quarter of 2025, and a decrease of $414,000, or 12.7%, from $3.2 million for the fourth quarter of 2024. The decrease in interest expense when compared to the previous quarter was primarily due to a 17 basis points decrease in the average interest rate paid on interest-bearing liabilities. During the fourth quarter of 2025 as compared to the previous quarter, interest expense on deposits decreased by $172,000, or 5.8%, due to a 17 basis points decrease in the average interest rate paid on deposit accounts. Average interest-bearing deposit balances were $492.6 million, a 1.2% increase during the fourth quarter of 2025 when compared to the previous quarter due to an increase in the average balance of money market and savings accounts. Interest expense on borrowed funds and other interest-bearing liabilities increased by $11,000 due to a $1.7 million, or 73.4%, increase in the average balance of borrowed funds and other interest-bearing liabilities due to an increase in the average balance of advances from borrowers for taxes and insurance. The decrease in interest expense when compared to the prior year quarter was primarily due to a 33 basis points decrease in average interest rate paid on interest-bearing liabilities. During the fourth quarter of 2025 as compared to the same period in 2024, there was a $354,000 decrease in interest paid on time deposit accounts due to a 57 basis points decrease in the average interest rate paid on time deposits. The decrease in the average interest rate paid on time deposit accounts was primarily due to the decrease in market interest rates and proactive management of deposit funding costs. Average interest-bearing deposit balances increased $5.1 million, or 1.1% during the fourth quarter of 2025 from the fourth quarter of 2024, due to an increase in average money market accounts when compared to the same period of 2024. During the fourth quarter of 2025, interest expense on borrowed funds and other interest-bearing liabilities decreased by $65,000, or 61.3%, compared to the fourth quarter of 2024, primarily due to a $6.6 million decrease in average borrowed funds and other interest-bearing liabilities outstanding due to the repayment of our borrowings during 2025. Interest expense for the year ended December 31, 2025 was $11.7 million, a decrease of $2.0 million, or 14.7%, from $13.7 million for the year ended December 31, 2024. The decrease in interest expense was primarily due to a 31 basis points decrease in average interest rate paid on interest-bearing liabilities and a $19.6 million, or 3.8%, decrease in the average balance of interest-bearing liabilities. During the year ended December 31, 2025 as compared to 2024, there was a $1.5 million decrease in interest paid on time deposit accounts due to a 53 basis points decrease in the average interest rate paid on time deposits along with a decrease in average time deposit balances of $9.4 million, or 4.3%. The decrease in the average interest rate paid on time deposit accounts was primarily due to the decrease in market interest rates and proactive management of deposit funding costs over the course of 2025. Average interest-bearing deposit balances were $487.6 million, a 0.9% decrease during the year ended December 31, 2025, resulting from a decrease in all deposit categories except money market accounts since December 31, 2024. During the year ended December 31, 2025, interest expense on borrowed funds and other interest-bearing liabilities decreased by $496,000, or 74.7%, compared to the year ended December 31, 2024, primarily due to a $15.3 million decrease in average borrowed funds and other interest-bearing liabilities outstanding due to the repayment of our borrowings during 2025. Non-Interest Income Non-interest income was $683,000 for the fourth quarter of 2025, a decrease of $382,000, or 35.9%, as compared to $1.1 million for the third quarter of 2025. The decrease from the prior quarter was primarily due to a $228,000 decrease in earnings on bank owned life insurance which resulted from the recognition of a death benefit in the third quarter of 2025 and a $119,000 change in realized losses on the sale of equity securities. Non-interest income during the fourth quarter of 2025 decreased $385,000, or 36.0%, as compared to $1.1 million for the fourth quarter of 2024. The decrease from the prior year quarter was primarily due to a $172,000 decrease in earnings on annuity assets in connection with a one-time earnings enhancement realized from the purchase of annuities during the fourth quarter of 2024. Additionally, earnings on bank owned life insurance decreased by $111,000 from the prior year quarter as a result of the recognition of a death benefit in the fourth quarter of 2024. Non-interest income was $3.3 million for the year ended December 31, 2025, a decrease of $31,000, or 0.9%, as compared to the year ended December 31, 2024. The decrease was primarily due to a $103,000 decrease in earnings on annuity assets in connection with a one-time earnings enhancement realized from the purchase of annuities during the fourth quarter of 2024, as well as a $49,000 decrease in service charges and fees and a $36,000 decrease in debit card fees. These decreases were partially offset by an increase in realized gains on sale of equity securities of $96,000, or 177.8%, during the year ended December 31, 2025 when compared to the year ended December 31, 2024. Non-Interest Expense Non-interest expense was $4.9 million for the fourth quarter of 2025, a decrease of $355,000, or 6.7%, as compared to $5.3 million for the fourth quarter of 2024. The decrease from the prior year quarter was primarily related to a decrease in salaries and employee benefits of $311,000, or 9.4%, which was partially offset by a $54,000 increase in data processing primarily due to costs related to core system maintenance and a $52,000 increase in other non-interest expense. Non-interest expense during the fourth quarter of 2025, when compared to the third quarter of 2025, remained relatively consistent, increasing $77,000, or 1.6%. Non-interest expense was $19.3 million for the year ended December 31, 2025, a decrease of $714,000, or 3.6%, as compared to $20.0 million for the year ended December 31, 2024. The decrease primarily related to a decline in FDIC insurance expense of $493,000, or 61.9%, as a result of a decrease in premium assessments. Additionally, as a result of management's efforts to decrease the use of external consultants and optimize operating expenses, professional services decreased by $312,000, or 21.5%, occupancy and equipment expense decreased by $127,000, or 4.7%, and telephone and communications expense decreased by $113,000, or 26.0%, for the year ended December 31, 2025 as compared to the prior year. These decreases were partially offset by an increase in salaries and employee benefits expense of $157,000, or 1.4%, as well as an increase in data processing costs of $147,000, or 8.2%, for the year ended December 31, 2025 when compared to the year ended December 31, 2024. Income Tax Expense Income tax expense was $411,000 for the fourth quarter of 2025, a decrease of $76,000, or 15.6%, as compared to $487,000 for the third quarter of 2025, and an increase of $133,000, or 47.8%, as compared to $278,000 for the fourth quarter of 2024. The decrease in income tax expense from the prior quarter was primarily related to the decrease in taxable income earned during the current quarter. The increase in income tax expense from the prior year quarter was primarily related to the increase in taxable income earned during the current quarter. Income tax expense was $1.5 million for the year ended December 31, 2025, an increase of $548,000, or 58.6%, as compared to $935,000 for the year ended December 31, 2024. The increase in income tax expense for the year ended December 31, 2025 when compared to the year ended December 31, 2024 was due to an increase in taxable income earned during 2025 when compared to 2024. The annual effective tax rate was 16.9% for the year ended December 31, 2025 as compared to 15.9% for the year ended December 31, 2024. Credit Quality The Company’s allowance for credit losses on loans was $4.9 million as of December 31, 2025 as compared to $5.1 million as of December 31, 2024. The Company’s allowance for credit losses on unfunded commitments was $361,000 as of December 31, 2025 as compared to $314,000 as of December 31, 2024. Non-performing assets as a percent of total assets decreased to 0.23% at December 31, 2025 as compared to 0.55% at December 31, 2024, due to a decrease in non-performing assets of $2.1 million, or 55.8%. The Company’s allowance for credit losses on loans as a percent of net loans was 0.87% and 0.93% and its allowance for credit losses on loans as a percent of non-performing loans was 290.71% and 134.91%, at December 31, 2025, and 2024, respectively. The Company recorded a provision for credit losses of $40,000 for the fourth quarter of 2025 and a $180,000 credit to provision for credit losses for the year ended December 31, 2025. For the year ended December 31, 2025, the $180,000 credit to the provision for credit losses was comprised of a $227,000 credit related to the loan portfolio, partially offset by a $47,000 provision related to the reserve for unfunded commitments. The decrease in the allowance for credit losses on loans and the corresponding credit to the provision for credit losses recognized during the year ended December 31, 2025 was the result of a decrease in the qualitative loss rates, partially offset by an increase in the expected loss rates derived from quantitative losses, which are inclusive of forecasted economic trends. Balance Sheet Summary Total assets at December 31, 2025 were $727.3 million, a $41.8 million increase, or 6.1%, as compared to $685.5 million at December 31, 2024. Cash and cash equivalents increased by $31.1 million, or 94.0%, from $33.1 million at December 31, 2024 to $64.3 million at December 31, 2025. The increase in cash and cash equivalents was primarily due to an increase in interest earning deposits of $30.8 million, or 101.3%, as the result of the second step conversion and offering that was completed during 2025. Securities available for sale were $56.1 million at December 31, 2025 as compared to $56.5 million at December 31, 2024, representing a decrease primarily due to paydowns during 2025. Net loans receivable at December 31, 2025 and December 31, 2024 were $555.4 million and $544.6 million, respectively. Total deposits at December 31, 2025 were $573.3 million, an increase of $299,000, or 0.1%, compared to $573.0 million at December 31, 2024. The Company’s percentage of uninsured deposits to total deposits was 11.3% and 13.5%, at December 31, 2025 and December 31, 2024, respectively. Total borrowings decreased $10.3 million, or 100%, to $0 at December 31, 2025 as all borrowings were paid off. Stockholders’ equity at December 31, 2025 was $141.6 million, a $51.8 million increase, or 57.6%, as compared to $89.9 million at December 31, 2024. The increase in stockholders’ equity was primarily attributed to the completion of the second step conversion and offering during 2025, net income of $7.3 million earned during 2025, and a $2.3 million decrease in accumulated other comprehensive losses. About Lake Shore Lake Shore Bancorp is the holding company of Lake Shore Bank, a New York chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. Lake Shore Bancorp’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about Lake Shore Bancorp is available at www.mylsbank.com. Safe-Harbor This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the Company’s and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, tariffs, unanticipated changes in our liquidity position, climate change, public health issues, geopolitical conflict, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, dividend policy changes, and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized. Source: Lake Shore Bancorp, Inc. Category: Financial Investor Relations/Media Contact Kim C. Liddell President, CEO, and Director Lake Shore Bancorp, Inc. 31 East Fourth Street Dunkirk, New York 14048 (716) 366-4070 ext. 1012 Selected Financial Condition Data Statements of Income (1) Per share information reflects the effects of the Company's conversion and related stock offering for all periods presented, as applicable. (2) Annualized. Average Balance Sheets, Interest, and Rates (Quarterly Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.90% and 2.91% for the three months ended December 31, 2025 and 2024, respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. Average Balance Sheets, Interest, and Rates (Annual Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.99% and 3.08% for the year ended December 31, 2025 and 2024, respectively. Yields above are not presented on a tax equivalent basis. Average Balance Sheets, Interest, and Rates (Prior Quarter Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 2.90% and 3.00% for the three months ended December 31, 2025 and September 30, 2025, respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. Selected Quarterly Financial Data (1) Share and per share information reflects the effects of the Company's conversion and related stock offering for all periods presented, as applicable. (2) Annualized.

DUNKIRK, N.Y., Oct. 22, 2025 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the holding company for Lake Shore Bank (the “Bank”), reported unaudited net income of $2.4 million, or $0.32 per diluted share, for the third quarter of 2025 compared to net income of $1.3 million, or $0.18 per diluted share, for the third quarter of 2024. For the first nine months of 2025, the Company reported unaudited net income of $5.3 million, or $0.70 per diluted share, as compared to $3.5 million, or $0.46 per diluted share, for the first nine months of 2024. Earnings per share and other share information disclosed throughout reflect the effect of the Company's conversion and related stock offering. The Company's financial performance for the third quarter of 2025, when compared to the third quarter of 2024, was positively impacted by an increase in net interest income and non-interest income. "Our third-quarter and year-to-date 2025 financial results show ongoing improvements in efficiency and progress on strategic initiatives such as completion of the second step conversion," stated Kim C. Liddell, President, CEO, and Director. "The current economic volatility has the potential to affect future market conditions and consumer confidence, and we stand committed to providing ongoing support to the communities we serve." Third Quarter 2025 and Year-to-Date Financial Highlights: Net income increased to $2.4 million during the third quarter of 2025, an increase of $1.0 million, or 77.1%, when compared to the third quarter of 2024. Net income was positively impacted by an increase in net interest income of $972,000, or 18.1%, when compared to the third quarter of 2024; Net income increased to $5.3 million during the first nine months of 2025, an increase of $1.9 million, or 54.1%, when compared to the first nine months of 2024. Net income was positively impacted by an increase in net interest income of $2.2 million, or 14.1%, and a decrease in non-interest expense of $360,000, or 2.4%, when compared to the first nine months of 2024; Net interest margin increased to 3.72% during the third quarter of 2025, an increase of 44 basis points when compared to net interest margin of 3.28% during the third quarter of 2024; Reduced reliance on wholesale funding by repaying $8.3 million of Federal Home Loan Bank of New York ("FHLBNY") borrowings during the first nine months of 2025 with only $2.0 million outstanding as of September 30, 2025; At September 30, 2025 and December 31, 2024, the Company’s percentage of uninsured deposits to total deposits was 13.3% and 13.5%, respectively. Book value per share increased 53.9% to $17.80 per share at September 30, 2025, as compared to $11.57 per share at December 31, 2024; Non-performing assets as a percentage of total assets decreased to 0.25% at September 30, 2025, as compared to 0.55% at December 31, 2024, primarily due to a decrease in non-performing assets of $2.0 million, or 51.8%; and The Bank's capital position remains "well capitalized" with a Tier 1 Leverage ratio of 16.34% and a Total Risk-Based Capital ratio of 22.76% at September 30, 2025. Net Interest Income Net interest income for the third quarter of 2025 increased by $233,000, or 3.8%, to $6.4 million as compared to $6.1 million for the second quarter of 2025 and increased $972,000, or 18.1%, as compared to $5.4 million for the third quarter of 2024. Net interest margin and interest rate spread were 3.72% and 3.02%, respectively, for the third quarter of 2025 as compared to 3.84% and 3.32%, respectively, for the second quarter of 2025 and 3.28% and 2.67%, respectively, for the third quarter of 2024. Net interest income for the first nine months of 2025 increased $2.2 million, or 14.1%, to $17.9 million as compared to $15.7 million for the first nine months of 2024. Net interest margin and interest rate spread were 3.68% and 3.09%, respectively, for the first nine months of 2025 as compared to 3.17% and 2.59%, respectively, for the first nine months of 2024. Interest income for the third quarter of 2025 was $9.4 million, an increase of $244,000, or 2.7%, compared to $9.1 million for the second quarter of 2025, and an increase of $500,000, or 5.6%, compared to $8.9 million for the third quarter of 2024. The increase in interest income from the prior quarter was primarily due to an increase in interest earned on interest-earning deposits of $523,000, or 193.7%, as a result of an increase in the average balance of interest-earning deposits of $46.0 million, or 169.4%, and an increase in the average yield on interest-earning deposits of 35 basis points with additional funds maintained at the Federal Reserve Bank. The increase in the average balance of interest-earning deposits from the prior quarter was primarily due to the receipt of funds raised in connection with the second step conversion and offering. This increase in interest income was partially offset by a decrease in interest earned on loans of $276,000, or 3.3%, resulting primarily from a decrease in the average yield on loans of 21 basis points. During the prior quarter, the average yield on loans was positively impacted by the recognition of $461,000 of interest income associated with the payoff of three loans on nonaccrual status. The increase in interest income from the prior year quarter was primarily due to an increase in interest earned on loans of $463,000, or 6.0%, as a result of an increase in the average balance of loans of $12.0 million, or 2.2%, and an increase in the average yield on loans of 21 basis points. The increase in the average yield on loans was primarily attributable to the origination and repricing of loans at higher interest rates since the third quarter of 2024. Interest income for the first nine months of 2025 was $26.8 million, an increase of $610,000, or 2.3%, compared to $26.2 million, for the first nine months of 2024. This increase was primarily due to an increase in the interest earned on loans of $1.4 million, or 6.1%, as a result of an increase in the average yield on loans of 33 basis points and an increase in the average balance of loans of $1.4 million. The increase in the average yield on loans was primarily attributable to the origination and repricing of loans at higher interest rates since the third quarter of 2024. This increase in interest income was primarily offset by a decrease in interest earned on interest-earning deposits of $665,000, or 33.9%, resulting from a decrease in the average yield on interest-earning deposits of 102 basis points and a decrease in the average balance of interest-earning deposits of $8.9 million, or 17.7%. Interest expense for the third quarter of 2025 was $3.0 million, an increase of $11,000, or 0.4%, from the second quarter of 2025, and a decrease of $472,000, or 13.6%, from $3.5 million for the third quarter of 2024. The marginal increase in interest expense for the third quarter of 2025 when compared to the previous quarter was primarily due to an increase in the average interest rate paid on deposits of five basis points as a result of a shift in deposit composition. During the third quarter of 2025 as compared to the previous quarter, interest expense on deposits increased by $18,000, or 0.6%. The average interest rate paid on deposit accounts was impacted by a nine basis point increase in the average interest rate paid on money market accounts, partially offset by a five basis points decrease in the average interest rate paid on time deposits. Average interest-bearing deposit balances were $486.7 million, a 1.3% decrease during the third quarter of 2025 when compared to the previous quarter due to a decrease in average balances for savings accounts and time deposits, partially offset by an increase in average balances for money market accounts. The decrease in interest expense for the third quarter of 2025 when compared to the prior year quarter was primarily due to a 27 basis point decrease in average interest rate paid on interest-bearing liabilities and a $20.8 million, or 4.1%, decrease in the average balance of interest-bearing liabilities. During the third quarter of 2025 as compared to the same period in 2024, interest expense on deposits decreased by $353,000, or 10.6%, due to a 27 basis points decrease in the average interest rate paid on deposit accounts and a $2.6 million, or 0.5%, decrease in the average balance of deposits. The decrease in the average interest rate paid on deposit accounts was primarily due to the decrease in market interest rates, time deposit repricing, and a marginal shift in deposit composition. Average interest-bearing deposit balances decreased during the third quarter of 2025 when compared to the third quarter of 2024 due to a decrease in all deposit categories except money market accounts. During the third quarter of 2025, interest expense on borrowed funds and other interest-bearing liabilities decreased by $119,000, or 79.9%, compared to the third quarter of 2024, primarily due to a $18.2 million, or 88.7%, decrease in average borrowed funds and other interest-bearing liabilities outstanding due to the repayment of $8.3 million in borrowed funds during the first nine months of 2025. Interest expense for the first nine months of 2025 was $8.9 million, a decrease of $1.6 million, or 15.3%, from $10.5 million for the first nine months of 2024. The decrease in interest expense was primarily due to a 28 basis points decrease in average interest rate paid on interest-bearing liabilities and a decrease in the average balance of interest-bearing liabilities of $28.4 million, or 5.5%. During the first nine months of 2025, there was a $1.2 million decrease in interest expense on total deposit accounts when compared to the first nine months of 2024 due to a 28 basis points decrease in the average interest rate paid on total deposits along with a decrease in average total deposit balance of $7.4 million, or 1.5%. The decrease in the average interest rate paid on deposit accounts was primarily due to the decrease in market interest rates, time deposit repricing, and a marginal shift in deposit composition. Interest expense on borrowed funds and other interest-bearing liabilities also decreased $431,000, or 77.2%, during the first nine months of 2025 when compared to the first nine months of 2024, primarily due to a $21.0 million, or 83.6%, decrease in the average balance of borrowed funds and other interest-bearing liabilities outstanding as we reduced our FHLBNY borrowings. Non-Interest Income Non-interest income was $1.1 million for the third quarter of 2025, an increase of $265,000, or 33.1%, as compared to $800,000 for the second quarter of 2025, and an increase of $274,000, or 34.6%, as compared to $791,000 for the third quarter of 2024. The increase from the prior quarter was primarily due to a $248,000 increase in earnings on bank-owned life insurance as a result of the recognition of a death benefit and a $14,000 increase in unrealized gain on equity securities during the third quarter of 2025. The increase from the prior year quarter was primarily due to a $182,000 increase in earnings on bank-owned life insurance as a result of a death benefit, an $83,000 increase in unrealized gain on equity securities, and a $24,000 increase in earnings on annuity assets in connection with the purchase of annuities during the fourth quarter of 2024, partially offset by a $14,000 decrease in debit card fees. Non-interest income was $2.6 million for the first nine months of 2025, an increase of $354,000, or 15.8%, as compared to the first nine months of 2024. The increase was primarily due to a $185,000 increase in earnings on bank owned life insurance as a result of the recognition of a death benefit during the third quarter of 2025, a $182,000 increase in unrealized gain on equity securities, and a $69,000 increase in earnings on annuity assets in connection with the purchase of annuities during the fourth quarter of 2024, partially offset by a $49,000 decrease in service charges and fees and a $31,000 decrease in debit card fees. Non-Interest Expense Non-interest expense was $4.8 million for the third quarter of 2025, an increase of $218,000, or 4.7%, as compared to $4.6 million for the second quarter of 2025. The increase from the prior quarter was primarily due to an increase in data processing expense of $57,000, or 12.5%, along with increases in professional services expense of $52,000, or 20.7%, and postage and supplies expense of $37,000, or 64.9%. Non-interest expense during the third quarter of 2025, when compared to the third quarter of 2024, remained relatively consistent, increasing $30,000, or 0.6%. Non-interest expense was $14.3 million for the first nine months of 2025, a decrease of $360,000, or 2.4%, as compared to $14.7 million for the first nine months of 2024. The decrease related primarily to a decline in FDIC insurance expense of $469,000, or 67.7%, due to a decrease in premium assessments related to remediating regulatory matters. As a result of management's efforts to decrease the use of external consultants and optimize operating expenses, professional services decreased by $217,000, or 20.0% and occupancy and equipment expenses decreased by $143,000, or 6.9%. These decreases were partially offset by an increase in salaries and employee benefits of $469,000, or 5.8%, and a $94,000, or 7.0%, increase in data processing primarily due to an increase in costs related to core system maintenance when compared to the prior year period. Income Tax Expense Income tax expense was $487,000 for the third quarter of 2025, an increase of $109,000, or 28.8%, as compared to $378,000 for the second quarter of 2025, and an increase of $229,000, or 88.8%, as compared to $258,000 for the third quarter of 2024. The increase in income tax expense from the prior quarter and prior year quarter was primarily related to the increase in pre-tax income earned during the current quarter, and an increase in the effective tax rate during the third quarter of 2025. The effective tax rate was 17.1% for the third quarter of 2025 as compared to 16.5% for the second quarter of 2025 and 16.2% for the third quarter of 2024, as a result of an increase to pre-tax, taxable income. Income tax expense was $1.1 million for the first nine months of 2025, an increase of $415,000, or 63.2%, as compared to $657,000 for the first nine months of 2024. The increase in income tax expense from the first nine months of 2024 was primarily related to the increase in pre-tax income earned during the first nine months of 2025 and an increase in the effective tax rate during the first nine months of 2025. The effective tax rate was 16.7% for the first nine months of 2025 and 16.0% for the first nine months of 2024, as a result of an increase to pre-tax, taxable income. Credit Quality The Company’s allowance for credit losses on loans was $4.9 million as of September 30, 2025 as compared to $5.1 million as of December 31, 2024. The Company’s allowance for credit losses on unfunded commitments was $342,000 as of September 30, 2025 as compared to $314,000 as of December 31, 2024. Non-performing assets as a percentage of total assets decreased to 0.25% at September 30, 2025 as compared to 0.55% at December 31, 2024, primarily due to a decrease in non-performing assets of $2.0 million, or 51.8%. The Company’s allowance for credit losses on loans as a percentage of loans at amortized cost was 0.87% at September 30, 2025 and 0.93% at December 31, 2024. The Company recorded a credit to the provision for credit losses of $269,000 during the third quarter of 2025, which was comprised of a $288,000 credit related to the loan portfolio, partially offset by a provision of $19,000 related to the reserve for unfunded commitments. For the nine months ended September 30, 2025, the Company recorded a credit to the provision for credit losses of $221,000, which was comprised of a $249,000 credit related to the loan portfolio, partially offset by a provision of $28,000 related to the reserve for unfunded commitments. The decrease in the allowance for credit losses on loans and corresponding credit to the provision for credit losses recognized was the result of a decrease in expected loss rates derived from expected quantitative losses inclusive of forecasted economic trend and qualitative considerations as of the valuation date. Balance Sheet Summary Total assets at September 30, 2025 were $742.8 million, a $57.3 million increase, or 8.4%, as compared to $685.5 million at December 31, 2024. Cash and cash equivalents increased by $50.5 million, or 152.4%, from $33.1 million at December 31, 2024 to $83.6 million at September 30, 2025. The increase in cash and cash equivalents was primarily due to an increase in interest earning deposits of $49.9 million, or 164.1%, as the result of the second step conversion and offering that was completed during the third quarter of 2025. Securities were $56.0 million at September 30, 2025 as compared to $56.5 million at December 31, 2024 with the decrease primarily due to repayments during the first nine months of 2025. Net loans receivable at September 30, 2025 and December 31, 2024 were $552.6 million and $544.6 million, respectively. Total deposits at September 30, 2025 were $590.3 million, an increase of $17.4 million, or 3.0%, compared to $573.0 million at December 31, 2024. Total borrowings decreased to $2.0 million at September 30, 2025, a decrease of $8.3 million, or 80.5%, as compared to $10.3 million as of December 31, 2024. Stockholders’ equity at September 30, 2025 was $139.3 million, an increase of $49.4 million, or 55.0%, compared to $89.9 million at December 31, 2024. The increase in stockholders’ equity was primarily attributed to the completion of the second step conversion and offering during the third quarter of 2025 as well as $5.3 million in net income earned during the first nine months of 2025. About Lake Shore Lake Shore Bancorp is the holding company of Lake Shore Bank, a New York chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. Lake Shore Bancorp’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about Lake Shore Bancorp is available at www.mylsbank.com. Safe-Harbor This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the Company’s and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, tariffs, unanticipated changes in our liquidity position, climate change, public health issues, geopolitical conflict, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized. Source: Lake Shore Bancorp, Inc. Category: Financial Investor Relations/Media Contact Kim C. Liddell President, CEO, and Director Lake Shore Bancorp, Inc. 31 East Fourth Street Dunkirk, New York 14048 (716) 366-4070 ext. 1012

DUNKIRK, N.Y., July 23, 2025 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the new holding company for Lake Shore Bank (the “Bank”), reported unaudited net income of $1.9 million, or $0.34 per diluted share, for the second quarter of 2025 compared to net income of $1.1 million, or $0.19 per diluted share, for the second quarter of 2024. For the first six months of 2025, the Company reported unaudited net income of $3.0 million, or $0.53 per diluted share, as compared to $2.1 million, or $0.36 per diluted share, for the first six months of 2024. The Company's financial performance for the second quarter of 2025 was positively impacted by an increase in net interest income and non-interest income along with a decrease in non-interest expenses as a result of strategic balance sheet management, continuing efforts to optimize operating expenses, and reducing reliance on wholesale funding. On July 18, 2025, the Company announced that the conversion of Lake Shore, MHC from mutual to stock form, the related stock offering by the Company and the Bank’s conversion from a federal savings bank to a New York chartered commercial bank was completed. As a result of the subscription offering, the Company sold a total of 4,950,460 shares of its common stock (approximately the midpoint of the offering range) at a price of $10.00 per share for total gross proceeds of $49.5 million. Earnings per share and other share information disclosed throughout do not reflect the effect of the Company's conversion and related stock offering. "I am pleased with the Company’s Second Quarter and Six Month 2025 financial results. The strategic actions taken throughout the past two years are beginning to bear quality earnings momentum,” stated Kim C. Liddell, President, CEO, and Director. “I am grateful for our depositors’ support as we raised $49.5 million to provide the Company with capital needed to prudently and strategically grow. We are excited about what the future holds." Second Quarter 2025 and Year-to-Date Financial Highlights: Net income increased to $1.9 million during the second quarter of 2025, an increase of $803,000, or 72.0%, when compared to the second quarter of 2024. Net income was positively impacted by an increase in net interest income of $916,000, or 17.6%, when compared to the second quarter of 2024; Net income increased to $3.0 million during the first half of 2025, an increase of $845,000, or 39.7%, when compared to the first half of 2024. Net income was positively impacted by an increase in net interest income of $1.2 million, or 12.1%, when compared to the first half of 2024; Net interest margin increased to 3.84% during the second quarter of 2025, an increase of 35 basis points when compared to net interest margin of 3.49% during the first quarter of 2025 and an increase of 70 basis points when compared to net interest margin of 3.14% during the second quarter of 2024; Reduced reliance on wholesale funding by repaying $8.3 million of Federal Home Loan Bank of New York ("FHLBNY") borrowings during the first half of 2025 with only $2.0 million outstanding as of June 30, 2025; At June 30, 2025 and December 31, 2024, the Company’s percentage of uninsured deposits to total deposits was 18.1% and 13.5%, respectively. Excluding the $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's stock offering in the second quarter of 2025, the Company's uninsured deposits to total deposits totaled 12.0% at June 30, 2025; Book value per share increased 3.0% to $16.13 per share at June 30, 2025, as compared to $15.67 per share at December 31, 2024; Non-performing assets as a percentage of total assets decreased to 0.24% at June 30, 2025, as compared to 0.55% at December 31, 2024, primarily due to a decrease in non-performing assets of $2.0 million, or 53.3%; and The Bank's capital position remains "well capitalized" with a Tier 1 Leverage ratio of 14.37% and a Total Risk-Based Capital ratio of 18.94% at June 30, 2025. Net Interest Income Net interest income for the second quarter of 2025 increased by $657,000, or 12.0%, to $6.1 million as compared to $5.5 million for the first quarter of 2025 and increased $916,000, or 17.6%, as compared to $5.2 million for the second quarter of 2024. Net interest margin and interest rate spread were 3.84% and 3.32%, respectively, for the second quarter of 2025 as compared to 3.49% and 2.94%, respectively, for the first quarter of 2025 and 3.14% and 2.56%, respectively, for the second quarter of 2024. Net interest income for the first half of 2025 increased $1.2 million, or 12.1%, to $11.6 million as compared to $10.3 million for the first half of 2024. Net interest margin and interest rate spread were 3.67% and 3.13%, respectively, for the first half of 2025 as compared to 3.12% and 2.55%, respectively for the first half of 2024. Interest income for the second quarter of 2025 was $9.1 million, an increase of $740,000, or 8.8%, compared to $8.4 million for the first quarter of 2025, and an increase of $353,000, or 4.0%, compared to $8.8 million for the second quarter of 2024. The increase in interest income from the prior quarter was primarily due to an increase in interest earned on loans of $717,000, or 9.2%, with an increase in the average yield on loans of 44 basis points. The increase in the average yield on loans was positively impacted by the recognition of $461,000 of interest income associated with the payoff of three loans on nonaccrual status during the second quarter of 2025. Interest earned on securities decreased by $13,000, or 3.4%, due to a $1.6 million decrease in the average balance of securities during the second quarter of 2025 as compared to the prior quarter. The increase in interest income from the prior year quarter was primarily due to an increase in interest earned on loans of $776,000, or 10.1%, with an increase in the average yield on loans of 54 basis points. The increase in the average yield on loans was positively impacted by the recognition of $461,000 of interest income associated with the payoff of three loans on nonaccrual status during the second quarter of 2025. The increase was partially offset by a $377,000, or 58.3% decrease in interest earned on interest-earning deposits resulting primarily from a decrease in the average balance of interest earning deposits of $25.5 million, or 48.4%. The decrease in the average balance of interest earning deposits from the prior year was primarily due to the repayment of FHLBNY borrowings during the period. Additionally, during the second quarter of 2025 as compared to the same period in 2024, there was a $46,000 decrease in interest earned on securities due to decreases in the average balance and average yield of securities of $2.8 million, or 4.7%, and 19 basis points, respectively. Interest income for the first half of 2025 was $17.5 million, an increase of $111,000, or 0.6%, compared to $17.4 million, for the first half of 2024. This increase was primarily due to an increase in the interest earned on loans of $943,000, or 6.2%, with a 38 basis points increase in the average yield on loans. This was partially offset by a $742,000, or 59.6% decrease in interest earned on interest earning deposits resulting from a $23.0 million, or 47.5% decrease in the average balance of interest-earning deposits and a 119 basis points decrease in the average yield of interest earning deposits. Interest expense for the second quarter of 2025 was $3.0 million, an increase of $83,000, or 2.9%, from $2.9 million in the first quarter of 2025, and a decrease of $563,000, or 15.9%, from $3.5 million for the second quarter of 2024. The increase in interest expense when compared to the previous quarter was primarily due to an increase in the average balance of interest-bearing liabilities of $13.1 million, or 2.7% which was mostly driven by an increase in the average balance of time deposits of $8.3 million, or 4.0%. During the second quarter of 2025 as compared to the previous quarter, interest expense on deposits increased by $106,000, or 3.7%, due to a $15.5 million, or 3.2% increase in the average balance of deposits and a 1 basis point increase in the average interest rate paid on deposit accounts. The average interest rate paid on deposit accounts was impacted by a 22 basis points increase in the average interest rate paid on money market accounts, partially offset by an 11 basis points decrease in the average interest rate paid on time deposits. Average interest-bearing deposit balances were $493.3 million, a 3.2% increase during the second quarter of 2025 when compared to the previous quarter due to an increase in the average balance of all deposit categories. Interest expense on borrowed funds and other interest-bearing liabilities decreased by $23,000 primarily due to a $2.4 million, or 38.0%, decrease in the average balance of borrowed funds and other interest-bearing liabilities as the result of the repayment of $2.0 million of our FHLBNY borrowings during the second quarter of 2025. The decrease in interest expense when compared to the prior year quarter was primarily due to a 32 basis points decrease in average interest rate paid on interest-bearing liabilities and a $24.7 million, or 4.7%, decrease in the average balance of interest-bearing liabilities. During the second quarter of 2025 as compared to the same period in 2024, interest expense on deposits decreased by $423,000, or 12.5%, due to a 33 basis points decrease in the average interest rate paid on deposit accounts and a $3.2 million, or 0.6%, decrease in the average balance of deposits. The decrease in the average interest rate paid on deposit accounts was primarily due to the decrease in market interest rates, time deposit repricing, and a marginal shift in deposit composition. Average interest-bearing deposit balances decreased 0.6% during the second quarter of 2025 when compared to the second quarter of 2024 due to a decrease in all deposit categories except money market accounts. During the second quarter of 2025, interest expense on borrowed funds and other interest-bearing liabilities decreased by $140,000, or 79.1%, compared to the second quarter of 2024, primarily due to a $21.4 million, or 84.7%, decrease in average borrowed funds and other interest-bearing liabilities outstanding due to the repayment of $25.0 million of FHLBNY borrowings during 2024 and $8.3 million during the first half of 2025. Interest expense for the first half of 2025 was $5.9 million, a decrease of $1.1 million, or 16.2%, from $7.0 million for the first half of 2024. The decrease in interest expense was primarily due to a 29 basis points decrease in average interest rate paid on interest-bearing liabilities and a decrease in the average balance of interest-bearing liabilities of $32.2 million, or 6.2%. During the first half of 2025, there was a $825,000 decrease in interest expense on total deposit accounts when compared to the first half of 2024 due to a 29 basis points decrease in the average interest rate paid on total deposits along with a decrease in average total deposit balance of $9.9 million, or 2.0%. The decrease in the average interest rate paid on deposit accounts was primarily due to the decrease in market interest rates, time deposit repricing, and a marginal shift in deposit composition. Interest expense on borrowed funds and other interest-bearing liabilities also decreased $312,000, or 76.3%, during the first half of 2025 when compared to the first half of 2024, primarily due to a $22.4 million, or 81.6%, decrease in the average balance of borrowed funds and other interest-bearing liabilities outstanding as we reduced our FHLBNY borrowings. Non-Interest Income Non-interest income was $800,000 for the second quarter of 2025, an increase of $76,000, or 10.5%, as compared to $724,000 for the first quarter of 2025, and an increase of $62,000, or 8.4%, as compared to $738,000 for the second quarter of 2024. The increase from the prior quarter was primarily due to a $36,000 increase in service charges and fees, a $19,000 increase in unrealized gain on equity securities, and a $14,000 increase in debit card fees during the second quarter of 2025. The increase from the prior year quarter was primarily due to a $65,000 increase in unrealized gain on equity securities and a $23,000 increase in earnings on annuity assets in connection with the purchase of annuities during the fourth quarter of 2024, partially offset by a $14,000 decrease in service charges and fees. Non-interest income was $1.5 million for the first half of 2025, an increase of $79,000, or 5.5%, as compared to the first half of 2024. The increase was primarily due to a $100,000 increase in unrealized gain on equity securities and a $46,000 increase in earnings on annuity assets in connection with the purchase of annuities during the fourth quarter of 2024, partially offset by a $42,000 decrease in service charges and fees and a $17,000 decrease in debit card fees. Non-Interest Expense Non-interest expense was $4.6 million for the second quarter of 2025, a decrease of $253,000, or 5.2%, as compared to $4.9 million for the first quarter of 2025, and a decrease of $272,000, or 5.6%, as compared to $4.9 million for the second quarter of 2024. The decrease from the prior quarter was primarily due to a decrease in professional services expense of $63,000, or 20.1%, along with decreases in salaries and employee benefits of $61,000, or 2.1%, and occupancy and equipment of $61,000, or 9.0%. The decrease from the second quarter of 2024 was primarily related to a decrease in FDIC insurance of $210,000, or 73.9%, and a decrease in professional services expense of $146,000, or 36.8%, partially offset by an increase in salaries and employee benefits of $198,000, or 7.5%. Non-interest expense was $9.5 million for the first half of 2025, a decrease of $389,000, or 3.9%, as compared to $9.9 million for the first half of 2024. The decrease related primarily to a decline in FDIC insurance expense of $417,000, or 74.1%, due to a decrease in premium assessments related to remediating regulatory matters. As a result of management's efforts to decrease the use of external consultants and optimize operating expenses, professional services decreased by $159,000, or 22.0% and occupancy and equipment expenses decreased by $93,000, or 6.7%. These decreases were partially offset by an increase in salaries and employee benefits of $355,000, or 6.6%, and a $17,000, or 1.9%, increase in data processing primarily due to an increase in costs related to core system maintenance when compared to the prior year period. Income Tax Expense Income tax expense was $378,000 for the second quarter of 2025, an increase of $172,000, or 83.5%, as compared to $206,000 for the first quarter of 2025, and an increase of $162,000, or 75.0%, as compared to $216,000 for the second quarter of 2024. The increase in income tax expense from the prior quarter and prior year quarter was primarily related to the increase in pre-tax income earned during the current quarter, and an increase in the effective tax rate during the second quarter of 2025. The effective tax rate was 16.5% for the second quarter of 2025 as compared to 16.3% for the first quarter of 2025 and 16.2% for the second quarter of 2024. Income tax expense was $585,000 for the first half of 2025, an increase of $186,000, or 46.6%, as compared to $399,000 for the first half of 2024. The increase in income tax expense from the first half of 2024 was primarily related to the increase in pre-tax income earned during the first half of 2025 and an increase in the effective tax rate during the first half of 2025. The effective tax rate was 16.4% for the first half of 2025 and 15.8% for the first half of 2024. Credit Quality The Company’s allowance for credit losses on loans was $5.2 million as of June 30, 2025 as compared to $5.1 million as of December 31, 2024. The Company’s allowance for credit losses on unfunded commitments was $323,000 as of June 30, 2025 as compared to $314,000 as of December 31, 2024. Non-performing assets as a percent of total assets decreased to 0.24% at June 30, 2025 as compared to 0.55% at December 31, 2024, primarily due to a decrease in non-performing assets of $2.0 million, or 53.3%. Contributing to this decrease was one commercial relationship representing two loans with a total amortized cost of $1.2 million being sold at foreclosure and one nonaccrual home equity loan with an amortized cost of $545,000 being paid off in full during the second quarter of 2025. The Company’s allowance for credit losses on loans as a percent of loans at amortized cost was 0.93% at June 30, 2025 and December 31, 2024. The Company recorded no provision for credit losses during the second quarter of 2025 and recorded a provision for credit losses of $48,000 for the first half of 2025. Of this amount, $39,000 related to the loan portfolio and $9,000 related to the reserve for unfunded commitments. The increase in the allowance for credit losses on loans and unfunded commitments and the corresponding provision for credit losses recognized during the first half of 2025 was the result of an increase in the calculation of expected quantitative losses inclusive of forecasted economic trends, primarily related to the residential mortgage loan pool, partially offset by a decrease in the calculation of expected losses for the commercial loan pool. Balance Sheet Summary Total assets at June 30, 2025 were $734.8 million, a $49.3 million increase, or 7.2%, as compared to $685.5 million at December 31, 2024. Cash and cash equivalents increased by $42.2 million, or 127.5%, from $33.1 million at December 31, 2024 to $75.4 million at June 30, 2025. The increase in cash and cash equivalents was primarily due to an increase in interest earning deposits of $42.0 million, or 138.1%, as the result of $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's stock offering in the second quarter of 2025. Securities were $55.3 million at June 30, 2025 as compared to $56.5 million at December 31, 2024 with the decrease primarily due to repayments during the first half of 2025. Net loans receivable at June 30, 2025 and December 31, 2024 were $552.4 million and $544.6 million, respectively. Total deposits at June 30, 2025 were $627.5 million, an increase of $54.5 million, or 9.5%, compared to $573.0 million at December 31, 2024. The increase in deposits was primarily due to the collection of $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's stock offering in the second quarter of 2025. Total borrowings decreased to $2.0 million at June 30, 2025, a decrease of $8.3 million, or 80.5%, as compared to $10.3 million as of December 31, 2024. Stockholders’ equity at June 30, 2025 was $92.9 million, an increase $3.0 million, or 3.4%, compared to $89.9 million at December 31, 2024. The increase in stockholders’ equity was primarily attributed to $3.0 million in net income earned during the first half of 2025. About Lake Shore Lake Shore Bancorp is the holding company of Lake Shore Bank, a New York chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. Lake Shore Bancorp’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about Lake Shore Bancorp is available at www.mylsbank.com. Safe-Harbor This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the Company’s and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, tariffs, unanticipated changes in our liquidity position, climate change, public health issues, geopolitical conflict, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized. Source: Lake Shore Bancorp, Inc. Category: Financial Investor Relations/Media Contact Kim C. Liddell President, CEO, and Director Lake Shore Bancorp, Inc. 31 East Fourth Street Dunkirk, New York 14048 (716) 366-4070 ext. 1012 Selected Financial Condition Data Statements of Income (1) Annualized Average Balance Sheets, Interest, and Rates (Quarterly Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 3.03% and 3.20% for the three months ended June 30, 2025 and 2024, respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. (3) Included within savings accounts as of June 30, 2025 is $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's stock offering. The average rate paid on these funds was 5 basis points and the collection of these funds resulted in a $3.8 million increase in the average balance of savings accounts during the three months ended June 30, 2025. Average Balance Sheets, Interest, and Rates (Year-to-Date Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 3.03% and 3.16% for the six months ended June 30, 2025 and 2024, respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. (3) Included within savings accounts as of June 30, 2025 is $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's stock offering. The average rate paid on these funds was 5 basis points and the collection of these funds resulted in a $1.9 million increase in the average balance of savings accounts during the six months ended June 30, 2025. Average Balance Sheets, Interest, and Rates (Prior Quarter Comparison) (1) The tax equivalent adjustment for bank qualified tax exempt municipal securities, using a federal statutory rate of 21%, results in rates of 3.03% and 3.04% for the three months ended June 30, 2025 and March 31, 2025 respectively. Yields above are not presented on a tax equivalent basis. (2) Annualized. (3) Included within savings accounts as of June 30, 2025 is $43.7 million of funds collected and held on deposit in a segregated account in connection with the Company's stock offering. The average rate paid on these funds was 5 basis points and the collection of these funds resulted in a $3.8 million increase in the average balance of savings accounts during the three months ended June 30, 2025. Selected Quarterly Financial Data (1) Annualized

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term Lake Shore Bancorp, Inc. (NASDAQ:LSBK) shareholders, since the share price is down 13% in the last three years, falling well short of the market return of around 67%. The last week also saw the share price slip down another 24%. With the stock having lost 24% in the past week, it's worth taking a look at business performance and seeing if there's any red flags. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. Lake Shore Bancorp saw its EPS decline at a compound rate of 2.6% per year, over the last three years. The share price decline of 5% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past. The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image). We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.. Investors should note that there's a difference between Lake Shore Bancorp's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Lake Shore Bancorp shareholders, and that cash payout explains why its total shareholder loss of 5.7%, over the last 3 years, isn't as bad as the share price return. Lake Shore Bancorp shareholders are up 0.8% for the year. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 4% per year for five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Lake Shore Bancorp has 2 warning signs (and 1 which is significant) we think you should know about. Lake Shore Bancorp is not the only stock that insiders are buying. For those who like to find lesser know companies this free list of growing companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.