Lake Shore Bancorp, Inc. reported its financial results for the first quarter of 2025, revealing a net income of $1.1 million, or $0.19 per diluted share, which represents a 4.2% increase from the $1.0 million, or $0.17 per diluted share, recorded in the same period of 2024. The company's total interest income for the quarter was $8.4 million, a decrease of 2.8% compared to $8.6 million in the prior year, primarily due to a reduction in the average balance of interest-earning assets. However, net interest income rose to $5.5 million, up 6.5% from $5.1 million a year earlier, driven by a decrease in interest expense and an increase in the average yield on loans.
In terms of operational changes, Lake Shore Bancorp has transitioned its allowance for credit losses methodology from a vintage model to a discounted cash flow model, which is expected to provide a more accurate assessment of expected losses. As of March 31, 2025, the allowance for credit losses on loans was $5.2 million, slightly up from $5.1 million at the end of 2024. The company also reported a decrease in non-performing assets, which fell to $3.5 million from $3.8 million, reflecting improved asset quality.
The bank's total assets increased to $689.0 million, a modest rise of 0.5% from $685.5 million at the end of 2024. This growth was attributed to a $7.0 million increase in net loans, which reached $551.6 million, while cash and cash equivalents decreased by $2.7 million. Total deposits rose by $9.8 million, or 1.7%, driven by increases in time deposits and money market accounts, although non-interest-bearing deposits saw a decline.
Looking ahead, Lake Shore Bancorp is in the process of a significant reorganization, transitioning from a two-tier mutual holding company structure to a fully-public stock holding company. This conversion is expected to be completed in the third quarter of 2025, pending regulatory and shareholder approvals. The company has also suspended dividend payments during this transition period. Management remains focused on organic growth and enhancing customer relationships, particularly in the competitive interest rate environment.
About LAKE SHORE BANCORP, INC.
Lake Shore Bancorp, Inc. is a holding company for Lake Shore Savings Bank, a community-focused financial institution serving Western New York. It offers retail banking, residential and commercial real estate loans, small business financing, and investment securities. The bank emphasizes asset quality, local market expertise, and personalized service, competing with larger banks and fintechs through community engagement, tailored products, and prudent risk management.
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