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Here are 1-3 brief analogies to describe Lake Shore Bancorp (LSBK):

• A local, community-focused version of Bank of America for Western New York.
• Like PNC Bank, but hyper-local, serving only a few counties in Western New York.
• The neighborhood savings bank equivalent of Wells Fargo.

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• Deposit Accounts: Offers a variety of checking, savings, money market, and certificate of deposit accounts for individuals and businesses.
• Residential Mortgage Loans: Provides financing primarily for the purchase or refinance of one-to-four family residential properties.
• Commercial Real Estate Loans: Originates loans secured by commercial real estate properties for businesses and investors.
• Commercial Business Loans: Offers loans to businesses for operational needs, equipment purchases, expansion, and other commercial purposes.
• Consumer Loans: Provides personal lending options, such as home equity loans and lines of credit, to individual customers.

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Lake Shore Bancorp (LSBK) is a community bank and a financial institution that primarily serves individuals and businesses within its operational footprint, mainly in Western New York. As such, it does not have "major customers" in the traditional sense of a company selling goods or services to a few large corporate clients. Instead, it serves a diverse customer base, which can be categorized as follows:

• Individual and Household Customers: This category includes consumers who utilize a range of personal banking services such as checking accounts, savings accounts, money market accounts, certificates of deposit, residential mortgage loans, home equity loans, and various other consumer loans.

• Business and Commercial Customers: This category encompasses small to medium-sized businesses, commercial enterprises, and local real estate investors within its market area. These customers typically use business checking and savings accounts, commercial real estate loans, commercial and industrial loans, and other business banking services.

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• Crowe LLP
• Luse Gorman, PC

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Kim Liddell President and Chief Executive Officer

Kim Liddell was appointed President and Chief Executive Officer of Lake Shore Bancorp in April 2023. He brings over 35 years of banking experience to the role. Prior to joining Lake Shore Savings, Mr. Liddell served as Chairman, President, and Chief Executive Officer of 1880 Bank and Delmarva Bancshares, Inc. in Maryland. He was named Executive Vice President and Chief Operating Officer of Cardinal Financial and Cardinal Bank in 2005, before becoming Chairman, President, and CEO at 1880 Bank and Delmarva Bancshares, Inc. in 2010. His banking career began in 1984 as a Management Trainee at First Virginia Banks, Inc. Mr. Liddell also held senior leadership positions at SequoiaBank and Planters Bank.

Taylor Gilden Chief Financial Officer/Treasurer

Taylor Gilden serves as the Chief Financial Officer and Treasurer for Lake Shore Bancorp. In this capacity, Mr. Gilden is responsible for the organization's financial and risk management and reporting. He also held the role of Principal Accounting Officer. Mr. Gilden also serves as the investor relations contact for the company.

Melissa Sprague Chief Operating Officer

Melissa Sprague is the Chief Operating Officer of Lake Shore Bancorp.

Jeffrey M. Werdein Executive Vice President, Commercial Division

Jeffrey M. Werdein serves as the Executive Vice President, Commercial Division at Lake Shore Bancorp.

Tamara Bellanti Senior Vice President of Human Resources

Tamara Bellanti holds the position of Senior Vice President of Human Resources at Lake Shore Bancorp.

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The key risks to Lake Shore Bancorp's business include:

1. Interest Rate and Liquidity Risks: Lake Shore Bancorp is significantly affected by changes in interest rates, which directly impact the spread between interest earned on assets and interest paid on liabilities. Rising interest rates have historically had an adverse impact on earnings, particularly because the majority of its interest-earning assets are long-term, fixed-rate, while its liabilities re-price more quickly. The company also faces liquidity risks, including potential challenges in raising funds through deposits, borrowings, or the sale of loans and securities.
2. Lending and Credit Risks: The company faces substantial risks related to its lending activities, especially due to a high concentration of commercial real estate and business loans. This exposes Lake Shore Bancorp to greater credit risks compared to a more diversified residential loan portfolio. Construction loans also present additional risks due to uncertain property values prior to completion and the dependence of repayment on successful and timely project completion. Deterioration in the credit quality of the loan portfolio could adversely affect the company's future performance.
3. Regulatory Risks and Competition: Lake Shore Bancorp is subject to extensive regulation by various bodies, including the OCC and the Federal Reserve Board. Changes in laws and regulations can lead to increased operational costs and impact profitability. Non-compliance with regulations such as the USA PATRIOT Act and the Bank Secrecy Act could result in fines or sanctions. Additionally, the company operates in a highly competitive market, facing intense competition from larger financial institutions and online service providers, which may limit its growth and profitability.

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Lake Shore Bancorp (LSBK), as a traditional community bank, faces a clear emerging threat from the ongoing disruption caused by financial technology (fintech) companies and neobanks. These digital-first challengers offer streamlined, often lower-cost, and more convenient banking services, directly competing for customers' deposits and loan business.

Specifically:

• Neobanks and Challenger Banks: Companies like Chime, Ally Bank, and others operate entirely online or via mobile apps, providing banking services with often fewer fees, higher interest rates on deposits, and superior digital user experiences. These attract tech-savvy customers and younger demographics who might otherwise utilize a local community bank for their primary banking needs, eroding LSBK's potential deposit base.
• Online Lenders: Specialized online lenders for mortgages, personal loans, and small business loans offer quicker application processes, faster approvals, and competitive rates. This can divert potential lending business away from LSBK, particularly from customers seeking efficiency over traditional in-person banking relationships.
• Payment and Financial Service Platforms: Companies like Square, PayPal, and Stripe, while often starting with payment processing, are increasingly expanding into small business lending, debit cards, and other financial services, encroaching on traditional banking relationships with small and medium-sized enterprises (SMEs) – a key customer segment for community banks.

This trend parallels historical disruptions where more agile, technology-driven models (like Netflix challenging Blockbuster or the iPhone challenging BlackBerry) fundamentally change customer expectations and competitive landscapes, putting significant pressure on incumbents to adapt their technology, services, and business models.

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Lake Shore Bancorp (LSBK) operates as a community-oriented financial institution primarily serving Western New York, specifically Chautauqua and Erie counties, through its Lake Shore Savings Bank branches. The company offers a broad range of retail and commercial lending and deposit services.

The addressable markets for Lake Shore Bancorp's main products and services in the United States are as follows:

• Community Banking Market: The U.S. community banking market was valued at approximately USD 6.35 billion in 2024, with a projected compound annual growth rate (CAGR) of 3.8%.
• Mortgage Lending Market: The U.S. home mortgage market is a substantial sector, with various estimates for its size. The US home loan market reached USD 2.29 trillion in 2025 and is forecasted to grow to USD 3.02 trillion by 2030. Another estimate indicates the US home mortgage market size was worth around USD 180.91 billion in 2023 and is predicted to grow to around USD 501.67 billion by 2032. Furthermore, the US mortgage lending market is estimated to have a total value exceeding USD 2.5 trillion annually, with a projected CAGR exceeding 5% from 2025 to 2033.
• Commercial Lending Market: For North America, the commercial lending market was estimated at USD 2,987.59 billion in 2024 and is projected to grow to USD 8,248.51 billion by 2035, exhibiting a CAGR of 9.67% from 2025 to 2035. The U.S. holds approximately 75% of this North American market share.

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Here are 3-5 expected drivers of future revenue growth for Lake Shore Bancorp (LSBK) over the next 2-3 years:

1. Net Interest Margin Expansion and Effective Interest Rate Management: Lake Shore Bancorp has demonstrated a material increase in net interest income and an expansion of its net interest margin, reaching 3.72% in Q3 2025. This growth is attributed to higher interest income on deposits and loan repricing, along with reduced interest expense from lower borrowed funds. The company's ability to maintain or further improve its net interest margin through strategic asset and liability management will be a key driver of future revenue.
2. Growth in Commercial Loan Portfolio: A strategic focus for Lake Shore Bancorp is driving commercial loan portfolio growth. Increasing originations in commercial loans, which often carry higher yields, is expected to directly contribute to the expansion of net interest income.
3. Diversification and Growth of Non-Interest Income: The company experienced a significant increase in non-interest income, particularly in Q3 2025, driven by higher earnings on bank-owned life insurance and unrealized gains on equity securities. Continued diversification and growth in these and other non-interest income streams will provide a more robust and varied revenue base.
4. Improved Funding Mix and Reduced Reliance on Wholesale Funding: Lake Shore Bancorp has successfully reduced its dependence on more expensive wholesale funding sources, opting instead for lower-cost retail deposits. This improvement in its funding mix enhances liquidity, reduces interest expenses, and consequently boosts net interest income. Sustaining this optimized funding strategy will support overall revenue growth.

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Share Repurchases

• Lake Shore Bancorp announced a plan on October 22, 2025, to repurchase up to 5% of its outstanding shares.
• The share repurchases are scheduled to commence after July 20, 2026.
• This repurchase plan has no specified expiration date and can be modified at any time, with no obligation to acquire a fixed number of shares.

Share Issuance

• Lake Shore Bancorp completed a "second step" mutual-to-stock conversion and a related stock offering, which closed after July 18, 2025.
• In the subscription offering, the company sold 4,950,460 shares of common stock at $10.00 per share, resulting in total gross proceeds of $49.5 million.
• Public stockholders of the former Lake Shore Federal Bancorp had their existing shares converted into shares of the new Lake Shore Bancorp at an exchange ratio of 1.3549 shares for each old share. Approximately 7,825,877 shares of common stock were outstanding following the conversion.

Inbound Investments

• No significant inbound investments by third parties, such as strategic partners or private equity firms, were identified within the specified timeframe.

Outbound Investments

• No information regarding strategic investments made by Lake Shore Bancorp in other companies was found within the specified timeframe.

Capital Expenditures

• No specific dollar values or primary focus of capital expenditures for Lake Shore Bancorp were available within the specified timeframe.