LSBKHIGH SIGNALMANAGEMENT10-Q

LSBK completed a major Second Step Conversion on July 18, 2025, transforming from a federal savings bank structure to a Maryland-incorporated bank holding company with a New York commercial bank subsidiary.

This represents a fundamental corporate restructuring that changes LSBK's regulatory framework, charter type, and organizational structure. The conversion included $4.0 million in proceeds used to fund additional ESOP share purchases at $10.00 per share, indicating management's commitment to employee ownership while accessing capital markets in a new corporate form.

Comparing 2025-11-12 vs 2025-08-12View on EDGAR →
FINANCIAL ANALYSIS

The quarter showed mixed financial performance with net income declining to $1.9M from $2.4M in the prior period. Capital expenditures dropped dramatically from $150K to just $8K, likely reflecting the completion of major infrastructure investments or a pause in spending during the corporate conversion process. The overall financial picture suggests a transitional period as the company adjusts to its new structure.

FINANCIAL STATEMENT CHANGES
Capital Expenditure
Cash Flow
-94.7%
$150K$8K

Capex reduced 94.7% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Net Income
P&L
-18.5%
$2.4M$1.9M

Net income declined 18.5% — review whether driven by operations, interest costs, or non-recurring items.

LANGUAGE CHANGES
NEW — 2025-11-12
PRIOR — 2025-08-12
ADDED
and Subsidiary Notes to Unaudited Consolidated Financial Statements Note 1 Basis of Presentation and Significant Accounting Policies and Estimates The interim unaudited consolidated financial statements include the accounts of Lake Shore Bancorp, Inc.
(the Company , "Lake Shore Bancorp," us , our , or we ), and Lake Shore Bank (the Bank ), its wholly owned subsidiary.
On July 18, 2025, the Company underwent a Second Step Conversion, as more fully described below.
In addition, Lake Shore Savings Bank would convert its charter from a federal savings bank to a New York commercial bank renamed Lake Shore Bank.
Effective July 18, 2025, Lake Shore Bancorp, Inc., a new corporation incorporated under the laws of the State of Maryland, became the bank holding company of Lake Shore Bank, a New York commercial bank and its only wholly-owned subsidiary in connection with the completion of Conversion.
The Company used $ 4.0 million of the proceeds to fund an addition to its Employee Stock Ownership Plan ("ESOP") loan for the acquisition of an additional 396,036 shares at $ 10.00 per share.
Expenses incurred related to the offering were approximately $ 2.3 million and have been recorded against offering proceeds.
9 Share and per share amounts related to periods prior to the date of Conversion (July 18, 2025) have been adjusted to give the retroactive recognition to the exchange ratio applied in the Conversion ( 1.3549 ).
The dividend is expected to be paid on November 12, 2025 to stockholders of record as of November 3, 2025 .
As previously disclosed on a Current Report on Form 8-K , on October 22, 2025, the Board of Directors of the Company adopted a plan to repurchase up to 5 % of its outstanding shares of common stock, which may commence following the one-year anniversary of the Conversion, or on July 20, 2026.
REMOVED
and Subsidiary Notes to Unaudited Consolidated Financial Statements Note 1 Basis of Presentation and Significant Accounting Policies and Estimates The interim unaudited consolidated financial statements include the accounts of Lake Shore Bancorp, Inc., a federal corporation (the Company , "Lake Shore Bancorp," us , our , or we ), and Lake Shore Savings Bank (the Bank ), its wholly owned subsidiary.
On July 18, 2025, the Company was succeeded by Lake Shore Bancorp, Inc., a Maryland corporation and the Bank became Lake Shore Bank, a New York chartered commercial bank as more fully described below.
The Company refers to Lake Shore Bancorp, Inc., a Maryland corporation on and after July 18, 2025.
Corporate Structure Effective July 18, 2025, Lake Shore Bancorp, Inc.
( Lake Shore Bancorp ) incorporated under the laws of the State of Maryland became the banking holding company of Lake Shore Bank, a New York commercial bank and its only wholly-owned subsidiary.
The number and price of shares of Lake Shore Bancorp common stock sold in the offering and the exchange ratio were based on Lake Shore Bancorp's pro forma market value on a fully converted basis, as determined by an independent appraisal.
The Plan was subject to regulatory approval as well as approval by the depositors of Lake Shore Savings Bank and by Lake Shore Federal Bancorp stockholders (including approval by the holders of a majority of the outstanding shares of Lake Shore Federal Bancorp's common stock held by persons other than the MHC).
The Plan received all required regulatory, depositor and stockholder approval, and the conversion and offering were consummated on July 18, 2025.
Earnings per share and other share information disclosed herein do not reflect the effect of Lake Shore Bancorp's conversion and related stock offering.
The dividend is expected to be paid on August 13, 2025 to stockholders of record as of August 4, 2025 .
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