Executive Summary

Q2 2024 EPS was $0.19 on net income of $1.12M, up 36.8% YoY on lower professional services and marketing spend; NIM remained pressured at 3.14% given deposit competition despite a better funding mix .
Expenses were a key driver: non-interest expense fell 17% YoY to $4.90M (professional services -53% YoY), improving efficiency to 82.39% vs 87.22% a year ago .
Funding mix improved: in 1H24 LSBK repaid $11M brokered CDs and $12M FHLB while organic deposits grew 1.65%; uninsured deposits remained low at 12% and capital stayed well-capitalized (Tier 1 Leverage 13.02%) .
Shareholder return resumed: post-quarter, the Board declared a $0.18 cash dividend (paid Aug 16) after receiving Fed approval, a potential sentiment catalyst for the stock .
Street estimates were unavailable via S&P Global at time of analysis; no surprise/beat-miss can be computed; we note results vs prior quarter/year and qualitative drivers instead [GetEstimates error: daily limit exceeded].

What Went Well and What Went Wrong

What Went Well

Expense control accelerated: non-interest expense -17% YoY (to $4.90M), led by professional services (-$451K, -53%) and advertising (-$163K, -91%), reflecting reduced consultants and marketing spend .
Funding de-risking and deposit stability: reduced wholesale funding by $23M in 1H24 while growing organic deposits 1.65%; uninsured deposits remained 12% of total—supportive for liquidity/confidence .
Management execution tone: “disciplined and focused on executing our strategic plan and it is beginning to bear results,” said CEO Kim Liddell, highlighting the team’s efforts to enhance shareholder value .

What Went Wrong

Net interest margin and spread compressed YoY (NIM 3.14% vs 3.65%; spread 2.56% vs 3.29%) as deposit competition lifted deposit costs; net interest income fell 16% YoY to $5.21M .
Elevated deposit costs: deposit interest expense rose by ~$1.46M YoY in Q2 on a 117 bps higher average rate and slightly higher average balances; overall interest expense +57% YoY .
Modest uptick in non-performers: NPA/Assets rose to 0.56% (from 0.47% at YE23), and NPL/Loans to 0.73% (from 0.60%), though ACL/Loans remained solid at 1.08% .

Financial Results

Income Statement and Profitability (YoY and QoQ)

Metric	Q2 2023	Q1 2024	Q2 2024
Net Income ($MM)	$0.82	$1.01	$1.12
Diluted EPS ($)	$0.14	$0.17	$0.19
Net Interest Income ($MM)	$6.21	$5.13	$5.21
Non-Interest Income ($MM)	$0.55	$0.71	$0.74
Non-Interest Expense ($MM)	$5.90	$5.00	$4.90
Pre-Tax Income ($MM)	$1.05	$1.20	$1.33
Net Interest Margin (%)	3.65%	3.10%	3.14%
Efficiency Ratio (%)	87.22%	n/a	82.39%

Notes: The company does not present a “total revenue” line; we show net interest income and non-interest income as primary revenue components .

Balance Sheet and Funding (Quarter-End)

Metric	YE 2023	Q1 2024	Q2 2024
Total Assets ($MM)	$725.12	$717.58	$711.04
Deposits ($MM)	$590.92	$594.70	$589.40
Long-term Debt ($MM)	$35.25	$25.25	$23.25
Uninsured Deposits (% of total)	12.8%	12.6%	12.0%
Tier 1 Leverage Ratio (%)	12.68%	13.05%	13.02%
Total Risk-Based Capital (%)	17.77%	18.13%	18.64%

Credit Quality

Metric	YE 2023	Q2 2024
NPL / Net Loans (%)	0.60%	0.73%
NPA / Assets (%)	0.47%	0.56%
ACL / Net Loans (%)	1.16%	1.08%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Common Dividend per Share	Q2 2024	No dividend in Q4 2023 (per-share dividends declared were $—)	$0.18 per share; paid Aug 16, 2024; Fed approval received July 8, 2024	Initiated/Reinstated

Notes: No formal revenue, margin, OpEx, OI&E, or tax-rate guidance provided in Q2 materials . The company’s disclosures focus on operating execution, funding mix, and capital/liquidity metrics.

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 2024 (no transcript found in our document system or public transcript repositories) [ListDocuments: no transcripts; InternetSearch did not surface a call transcript: https://ir.lakeshoresavings.com/news-events/press-releases].

Topic	Q-2 (Q4 2023)	Q-1 (Q1 2024)	Current (Q2 2024)	Trend
Funding mix/wholesale funding	Borrowings modestly reduced YoY; mix refocus underway	Repaid $11M brokered CDs and $10M FHLB in Q1	Repaid +$23M wholesale in 1H24; organic deposits +1.65%	Improving
Deposit competition/costs	Significant rate-driven increase in deposit costs in 2023	Elevated deposit costs persisted; time deposit rates/ balances higher YoY	Deposit interest expense +$1.5M YoY on +117 bps average rate; competition cited	Still a headwind YoY
Expense discipline	Cutting consultants and marketing spend starts to show	Professional services and marketing lower; FDIC and data processing higher	Non-interest expense -17% YoY; professional services -53%	Improving
Capital and liquidity	Well-capitalized; uninsured deposits 12.8%	Well-capitalized; uninsured deposits 12.6%	Well-capitalized; uninsured deposits 12.0%	Stable/Improving
Credit quality	NPA/Assets 0.47%; ACL/Loans 1.16%	NPA/Assets 0.55%; ACL/Loans 1.12%	NPA/Assets 0.56%; ACL/Loans 1.08%	Stable with slight NPA uptick
Shareholder returns	Dividend absent in Q4 2023	MHC approved dividend waiver up to $0.72 pending Fed non-objection	$0.18 dividend declared with Fed approval	Resumed dividends

Management Commentary

“I am pleased with Lake Shore's earnings for the second quarter of 2024 and year-to-date. We continue to remain disciplined and focused on executing our strategic plan and it is beginning to bear results.” — Kim C. Liddell, President & CEO .
“I am proud of our team and their efforts to enhance shareholder value and the overall performance of the organization.” — Kim C. Liddell .
“We continue to transition from regulatory matters to more customer driven performance” — Kim Liddell, Q1 2024 .

Strategy signals from disclosures:

Tight cost control (consulting/marketing cuts) while maintaining data/security investments and absorbing higher FDIC assessments .
Proactive balance sheet management (reducing brokered CDs and FHLB borrowings; growing organic deposits) to stabilize NIM longer-term .
Continued emphasis on capital strength and low uninsured deposits to support confidence and funding resilience .

Q&A Highlights

No analyst Q&A available (no earnings call transcript was found for Q2 2024) [ListDocuments: no transcripts; https://ir.lakeshoresavings.com/news-events/press-releases].

Estimates Context

S&P Global consensus estimates for Q2 2024 were unavailable due to a data access limit at the time of retrieval; as a result, we cannot quantify EPS or revenue beats/misses in this report [GetEstimates error: daily limit exceeded]. We will update this section with beat/miss analysis once S&P Global consensus is accessible.

Key Takeaways for Investors

Expense discipline is the primary earnings lever near-term; professional services and marketing reductions materially improved operating efficiency YoY in Q2 .
NIM remains under YoY pressure from deposit costs, but management’s shift away from wholesale funding and growth in organic deposits are constructive for spread stabilization over time .
Credit remains contained with modestly higher NPAs and a solid reserve ratio; allowance coverage remains conservative relative to current non-performers .
Capital is robust (Tier 1 Leverage 13.02%; Total Risk-Based 18.64%), and uninsured deposits are low (12%), supporting confidence through rate-cycle volatility .
Dividend reinstatement ($0.18/share with Fed approval) signals regulatory progress and confidence, potentially expanding the investor base and providing support to the stock .
With Street estimates unavailable, focus on sequential trends: stable NIM vs Q1 (3.14% vs 3.10%), lower expenses, and funding mix improvement underpinning operating momentum into 2H .
Watch catalysts: continued funding cost normalization, further efficiency gains, and any regulatory updates; a sustained improvement in NIM would be a key driver for multiple expansion and earnings revisions .

Appendix: Additional Data

Average Balance and Margin Detail (Q2 2024 vs Q2 2023)

Total interest-earning assets average balance: $662.7M vs $680.5M; average yield 5.28% vs 4.98% .
Total interest-bearing liabilities average balance: $521.8M vs $534.5M; average rate 2.72% vs 1.69% .
Net interest income: $5.21M vs $6.21M; spread: 2.56% vs 3.29%; NIM: 3.14% vs 3.65% .

Selected Ratios (Q2 2024 vs Q2 2023; 1H comparisons)

ROAA: 0.63% vs 0.45%; ROAE: 5.19% vs 3.92% .
1H24 NIM/Spread: 3.12%/2.55% vs 1H23 3.71%/3.39% .

Sources: Q2 2024 press release and attached tables ; associated 8-K (Item 2.02 and Exhibit 99.1) ; Q1 2024 8-K/press release ; Q4 2023 8-K/press release ; Q2 2024 dividend press release .

LAKE SHORE BANCORP, INC. (LSBK)·Q2 2024 Earnings Summary