• Chase Bank, but focused on Western New York communities.
• KeyBank, but purely local to Western New York.

• Deposit Accounts: Provides various savings, checking, money market, health savings, and retirement accounts for individuals and businesses.
• Commercial Real Estate Loans: Offers financing for commercial property acquisition and development.
• Commercial Loans: Includes business installment loans, lines of credit, and other financing for small to medium-sized businesses.
• Residential Mortgages: Provides loans for the purchase or refinance of one- to four-family homes.
• Home Equity Loans: Offers loans and lines of credit secured by the equity in a borrower's home.
• Consumer Loans: Provides personal loans, vehicle loans, property improvement loans, and overdraft lines of credit.

Lake Shore Bancorp (LSBK) is a savings and loan holding company that primarily serves individual consumers and small to medium-sized businesses in Western New York. It does not sell products or services to other public companies in a traditional B2B supply chain model; rather, it provides banking services directly to its customer base.

Its major customer categories include:

• Individual Consumers: This category includes individuals utilizing a range of personal banking services such as regular savings, Christmas Club, statement savings, money market accounts, interest-bearing and non-interest-bearing checking accounts, health savings accounts, retirement accounts, time deposits, and various consumer loans (e.g., personal loans, overdraft lines of credit, vehicle loans, and one-to-four-family residential mortgages).
• Small to Medium-Sized Businesses: This category encompasses local businesses that require commercial savings, checking, and money market accounts. It also includes businesses seeking commercial loans such as commercial real estate loans, commercial construction loans, business installment loans, and lines of credit for operational and investment needs.

Kim C. Liddell, President and Chief Executive Officer

Kim C. Liddell was appointed President and Chief Executive Officer of Lake Shore Bancorp in April 2023. He brings over 35 years of banking experience. Prior to joining Lake Shore Bancorp, Mr. Liddell served as Chairman, President, and Chief Executive Officer of 1880 Bank and Delmarva Bancshares, Inc. in Maryland from 2010 until their acquisition by BV Financial in 2020. His career began in 1984 as a Management Trainee at First Virginia Banks, Inc., where he advanced to Senior Vice President and Retail Division Sales Manager. He also held Senior Vice President roles at SequoiaBank and Planters Bank, and served as Executive Vice President and Chief Operating Officer at Cardinal Financial and Cardinal Bank. Mr. Liddell holds a Bachelor of Arts in Economics and Business from Randolph-Macon College and attended the School of Bank Management and the Graduate School of Retail Bank Management at the University of Virginia. He currently serves as a director of BV Financial, Bay Vanguard Bank, and the Federal Home Loan Bank of Atlanta.

Taylor Gilden, Chief Financial Officer/Treasurer

Taylor Gilden was appointed Chief Financial Officer and Treasurer in August 2023. He joined Lake Shore Savings Bank in June 2023 as Chief Strategy Officer and has over a decade of experience in banking and finance. Mr. Gilden earned both a Master of Science in Finance and a Bachelor of Science in Accounting from American University. In 2020, he was recognized as a Maryland Bankers Association Emerging Leader Champion.

Melissa Sprague, Chief Operating Officer

Melissa Sprague serves as the Chief Operating Officer.

Jeffrey M. Werdein, Executive Vice President, Commercial Division

Jeffrey M. Werdein is the Executive Vice President of the Commercial Division.

Tamara Bellanti, Senior Vice President of Human Resources

Tamara Bellanti holds the position of Senior Vice President of Human Resources.

Key Risks to Lake Shore Bancorp (LSBK)

1. Interest Rate Risk: As a savings and loan holding company, Lake Shore Bancorp's profitability is highly sensitive to changes in interest rates. Rising funding costs, influenced by the Federal Reserve's monetary policy, can lead to net interest margin compression, where the interest earned on loans decreases relative to the interest paid on deposits. This is a primary external risk identified for community banks, impacting their financial performance.
2. Credit Risk, particularly Commercial Real Estate Exposure: A significant portion of Lake Shore Bancorp's loan portfolio consists of commercial real estate, commercial construction, and residential mortgages. Community banks often have a higher concentration of loans to small businesses and individuals, increasing their exposure to credit risk, which is the risk that borrowers will default on their loans. Concerns exist about the broader exposure of regional banks to commercial real estate debt, with a substantial volume of loans maturing and potential for defaults, particularly in sectors like office properties.
3. Cybersecurity Risk: Lake Shore Bancorp faces substantial internal risks related to cybersecurity. Community banks are increasingly vulnerable to threats such as ransomware attacks, phishing schemes, and data breaches due to their growing reliance on technology. The costs associated with a cyber incident can be devastating, leading to financial losses, reputational damage, and regulatory penalties. Lake Shore Savings Bank has previously addressed deficiencies in its information technology and security systems, as noted by the termination of an OCC Consent Order, indicating this remains a critical area of concern.

The clear emerging threat for Lake Shore Bancorp is the rapid advancement and adoption of digital banking and FinTech companies. These digital-first competitors, including online-only banks, payment applications, and FinTech lenders, offer customers greater convenience, often lower fees, higher interest rates on deposits, and streamlined online processes for loans and account management. This trend directly challenges Lake Shore Bancorp's traditional branch-based banking model, potentially eroding its customer base for deposit products and various loan types (commercial, residential, consumer) as consumers increasingly prefer digital channels over physical branch visits. This shift mirrors historical disruptions where new, more convenient, and often technology-driven models displaced established businesses, such as Netflix threatening Blockbuster or Uber threatening traditional taxi services.

For Lake Shore Bancorp (LSBK), the following are expected drivers of future revenue growth over the next 2-3 years:

1. Growth in Commercial Loan Portfolio: Lake Shore Bancorp has a stated commitment to driving commercial loan portfolio growth. The bank focuses on commercial and residential real estate lending in its Western New York market area, with recent data showing an increase in total gross loans, particularly commercial real estate loans.
2. Net Interest Margin Expansion: Strategic balance sheet management, including reduced reliance on wholesale funding, has positively impacted the company's net interest income and net interest margin. Continued effective management of interest-earning assets and interest-bearing liabilities is expected to contribute to revenue growth.
3. Strategic Deployment of Capital from Stock Conversion: The completion of its mutual-to-stock conversion in July 2025, which raised approximately $49.5 million, provides a fortified capital position. This capital can be strategically deployed to fund future growth initiatives, such as expanding lending activities or investing in new opportunities.
4. Optimized Operating Efficiency: The company is committed to maintaining an efficient expense profile and optimizing operating expenses. While not a direct revenue driver, improved efficiency can lead to higher profitability, allowing for greater reinvestment into revenue-generating activities and overall financial strength.
5. Sustained Strong Asset Quality: Lake Shore Bancorp has demonstrated significant improvement in credit quality, with a substantial reduction in non-performing assets. Maintaining strong asset quality reduces potential loan losses and frees up capital and resources that can be allocated to expanding the loan portfolio and other revenue-generating ventures.

Share Repurchases

• On October 22, 2025, Lake Shore Bancorp's Board of Directors approved a plan to repurchase up to 5% of its outstanding common stock.
• Repurchases under this plan are anticipated to begin around July 20, 2026.

Share Issuance

• In connection with its mutual-to-stock conversion on July 18, 2025, Lake Shore Bancorp sold 4,950,460 shares of common stock at $10.00 per share, generating approximately $49.5 million.