Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ Global Market: LSBK), the holding company for Lake Shore Savings Bank (the “Bank”), announced first quarter 2010 net income of $0.72 million, or $0.12 per diluted share, a 78% increase, compared to net income of $0.41 million, or $0.07 per diluted share, for the first quarter of 2009.
Highlights – First Quarter 2010
- Net interest income increased by 21.8% compared to first quarter 2009.
- Net interest margin increased 45 basis points compared to the prior year quarter.
- Average deposits grew by $26 million, or 9.7%, compared to first quarter 2009.
- The Bank’s asset quality remained strong with nonperforming to total loans at 0.84%.
- The Bank developed a new full-service branch in Depew, NY, its fifth Erie County location, which opened for business in April.
“Our first quarter provided a solid start to 2010 with significant earnings growth, improvement in our net interest margin, and the continuation of our strong asset quality standards,” said David C. Mancuso, President and Chief Executive Officer. “We also realized significant deposit growth compared to both the first and fourth quarters of 2009, demonstrating our competitive strength within our market area. We opened our fifth Erie County branch location in Depew, New York during April, reflecting our solid capital position and continued earnings strength.”
First quarter 2010 revenue was $3.9 million, an increase of $0.61 million, or 18.3%, over the prior year quarter, and was primarily a result of net interest income growth in the 2010 period. Net interest income grew to $3.4 million during the first quarter of 2010, an increase of 21.8% from the first quarter 2009, driven by a $0.53 million decrease in total interest expense.
Net interest margin for first quarter 2010 was 3.42% compared to 2.97% for the prior year quarter. Lower market interest rates and disciplined deposit pricing resulted in a 77-basis point reduction in the total cost of funds, compared to the first quarter of 2009. As compared to the fourth quarter 2009, the Company’s net interest margin improved 19 basis points, reflective of a 29-basis point reduction in cost of funds, partially offset by a 4-basis point decline in earning asset yields.