Lake Shore Bancorp (LSBK) AI Stock Analysis

• Market Cap: $112.45M
• Dividend Yield: 2.12%
• Average Volume (3M): 10.60K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.40
• Revenue Growth: 2.27%
• EPS Growth: 66.15%
• Country: US
• Employees: 93
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.25
• Shares Outstanding: 7,836,100
• 10 Day Avg. Volume: 14,582
• 30 Day Avg. Volume: 10,599
• PEG Ratio: 0.31
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 2.76
• P/FCF Ratio: 14.66
• Enterprise Value/Market Cap: 0.46
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 1.84
• Enterprise Value/Ebitda: 5.61
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $15.50 ▲(8.16% Upside)
• Action: Downgraded Date: 03/20/26
• Date: Action: Downgraded 03/20/26

The score is led by improving financial performance and a de-risked balance sheet (very low leverage and higher equity), partly offset by inconsistent free cash flow. Technical indicators are the main drag, with bearish trend signals despite oversold readings. Valuation is fair with a modest dividend, and recent corporate actions are mildly supportive.

Positive Factors

Very conservative balance sheet / low leverage

Extremely low leverage and a materially stronger equity base increase the bank's resilience to credit losses and rate shocks. Over the next several months this supports lending flexibility, regulatory cushion and capacity to sustain operations without urgent external financing.

Improving revenue and net margins

Sustained TTM revenue growth alongside rising operating and net margins indicates the core banking franchise is regaining profitability. This trend points to structural improvement in loan and fee income generation that can persist across the next 2–6 months if credit and deposit trends remain stable.

Stronger cash generation and free cash flow

A large rebound in operating and free cash flow, nearly matching reported earnings, signals higher earnings quality and internal funding capacity. Durable cash generation supports dividends, loan growth or capital build-up without heavy reliance on external funding in the medium term.

Negative Factors

Profitability below earlier-cycle peaks

Despite recent improvement, profits and margins remain meaningfully below peak-cycle levels seen in 2021–2022. That structural gap limits long-term return potential and suggests the bank may face headwinds restoring prior profitability absent material revenue mix or scale changes.

Year-to-year cash flow volatility

Pronounced annual swings in operating and free cash flow increase uncertainty around sustaining dividends and loan funding. Volatile cash generation reduces predictability of internal capital deployment and heightens reliance on conservative buffers or external liquidity during stress periods.

Modest return on equity / limited scale

A mid-single-digit ROE reflects constrained profitability relative to larger peers and suggests limited scale. Over months this can cap shareholder returns and reinvestment capacity absent efficiency gains, higher margins, or meaningful balance-sheet expansion.

Lake Shore Bancorp Business Overview & Revenue Model

Company Description

Lake Shore Bancorp, Inc. operates as the savings and loan holding company for Lake Shore Savings Bank that provides banking products and services. It accepts various deposit products, such as regular savings deposits, including Christmas Club and statement savings accounts; money market savings and checking accounts; interest bearing and non-interest bearing checking accounts, such as demand deposits; health savings accounts; retirement accounts; time deposits; interest on lawyer accounts; and accounts for individuals, as well as commercial savings, checking, and money market accounts for small to medium sized businesses. The company's loan portfolio consists of commercial real estate, commercial construction, and home equity loans and lines of credit; commercial loans comprising business installment loans, lines of credit, and other commercial loans; one- to four-family residential mortgages; and consumer loans, such as personal consumer loans, overdraft lines of credit, vehicle loans, secured and unsecured property improvement loans, and other secured loans, as well as loans secured by certificates of deposit. As of February 11, 2022, it had eleven full-service branch locations in Western New York, including five locations in Chautauqua County and six locations in Erie County, New York. The company was founded in 1891 and is headquartered in Dunkirk, New York. Lake Shore Bancorp, Inc. is a subsidiary of Lake Shore, MHC.

How the Company Makes Money

Lake Shore Bancorp primarily makes money through its banking subsidiary by earning net interest income and generating noninterest income. Net interest income is the spread between (1) interest and fees earned on interest-earning assets—principally loans (such as commercial, consumer, and residential real estate loans) and investment securities—and (2) interest paid on funding sources, mainly customer deposits (including checking, savings, and time deposits) and any borrowings. The level of net interest income is driven by loan and deposit volumes, the mix between higher- and lower-yielding assets, the cost and mix of deposits (e.g., noninterest-bearing and low-cost transaction accounts versus higher-rate time deposits), and broader interest-rate conditions. Noninterest income typically comes from banking-related fees and service charges, which may include deposit account service charges, interchange and card-related fees, fees for certain loan or deposit services, and other recurring banking fees to the extent applicable. The company’s profitability is also influenced by credit performance (provision for credit losses and net charge-offs), operating expenses, and the performance of its securities portfolio. Specific material partnerships or unusually significant noninterest revenue sources are not available in the provided context; therefore, null.

Lake Shore Bancorp Financial Statement Overview

Summary

Fundamentals are strengthening: revenue growth accelerated into 2025 with improved profitability (net margin ~18.4%). The balance sheet is a major positive with leverage reduced to near-zero and equity up sharply, lowering financial risk. The key offset is uneven cash-flow momentum, with free cash flow declining in 2025 despite stronger operating cash flow.

Income Statement

Revenue has expanded steadily from $27.3M (2020) to $39.6M (2025), with 2025 showing a sharp acceleration in growth. Profitability is solid: net margin improved to ~18.4% in 2025 (vs. ~12.9% in 2024) and operating profitability also strengthened. The main watch-out is that margins were higher earlier in the period (notably 2021–2022), indicating some historical pressure/volatility even though the latest year rebounded well.

Balance Sheet

Leverage has been materially reduced, with debt-to-equity improving from ~0.41–0.46 (2022–2023) to ~0.11 (2024) and ~0.01 (2025), which meaningfully lowers financial risk. Equity also increased substantially to $141.6M in 2025 from $89.9M in 2024, strengthening the capital base. Returns on equity are steady but modest (~5% range recently), suggesting improved safety has come with only moderate profitability on the equity base.

Cash Flow

Cash generation is generally supportive of earnings, with free cash flow tracking close to net income across years (about 0.93–1.00x). 2025 operating cash flow jumped to $8.0M (from $2.5M in 2024), signaling better cash conversion. However, free cash flow growth has been negative in most years and fell ~14% in 2025 versus 2024, indicating inconsistency in underlying cash flow momentum despite the earnings improvement.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	39.55M	38.11M	36.39M	29.46M	27.85M
Gross Profit	28.06M	25.85M	28.04M	26.32M	24.53M
EBITDA	9.21M	6.61M	7.03M	7.73M	8.34M
Net Income	7.27M	4.93M	4.82M	5.71M	6.19M
Balance Sheet
Total Assets	727.32M	685.50M	725.12M	699.91M	713.74M
Cash, Cash Equivalents and Short-Term Investments	64.28M	89.63M	114.17M	82.68M	156.38M
Total Debt	1.33M	10.25M	35.25M	37.55M	21.95M
Total Liabilities	0.00	595.64M	638.85M	618.73M	625.76M
Stockholders Equity	141.64M	89.87M	86.27M	81.18M	87.98M
Cash Flow
Free Cash Flow	7.44M	2.51M	5.81M	7.80M	7.92M
Operating Cash Flow	8.00M	2.51M	6.21M	8.21M	8.55M
Investing Cash Flow	-8.13M	21.12M	19.52M	-57.20M	-5.74M
Financing Cash Flow	31.28M	-44.22M	18.37M	-8.95M	21.80M

Lake Shore Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LSBK, the sentiment is Negative. The current price of 14.33 is below the 20-day moving average (MA) of 15.34, below the 50-day MA of 15.31, and above the 200-day MA of 13.54, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 23.59 is Positive, neither overbought nor oversold. The STOCH value of 3.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LSBK.

Lake Shore Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGYR	75 Outperform	$112.10M	8.58	9.18%	1.81%	12.08%	27.88%
UNB	74 Outperform	$104.07M	9.78	14.80%	6.08%	14.52%	27.90%
PROV	69 Neutral	$102.64M	17.90	4.68%	3.50%	0.99%	-16.23%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LSBK	63 Neutral	$112.45M	15.00	6.26%	2.12%	2.27%	66.15%
RVSB	57 Neutral	$105.21M	18.92	2.98%	1.51%	8.77%	369.81%
PBHC	54 Neutral	$82.95M	-25.99	-2.75%	2.86%	0.84%	―

Lake Shore Bancorp Corporate Events

Lake Shore Bancorp Reaches Standstill Deal With Activist Investor

On March 17, 2026, Lake Shore Bancorp entered into a multiyear standstill agreement with the activist investor Stilwell Group that will run through the 2029 annual meeting, as part of which the company appointed veteran banker Dennis Pollack to the boards of both the holding company and Lake Shore Bank. Pollack will stand for election at the 2026 annual meetings of the company and the bank for terms expiring in 2029, and the Stilwell Group has withdrawn its planned board nomination and business proposal for the 2026 meeting while accepting wide-ranging limits on share accumulation, proxy contests, change-of-control campaigns and litigation.

To facilitate Pollack’s appointment, the board amended and restated its bylaws on March 17, 2026 to allow a supermajority of directors to waive director qualification requirements when deemed in the company’s best interests, a move that underscores the board’s willingness to adjust governance rules to accommodate strategic appointments. The company emphasized that Pollack’s extensive banking and public board experience should strengthen oversight and support its long-term strategy, signaling a détente with an activist shareholder that could reduce near-term governance friction while giving Stilwell a voice in board composition via Pollack and any potential successor during the term of the agreement.

The most recent analyst rating on (LSBK) stock is a Buy with a $17.50 price target. To see the full list of analyst forecasts on Lake Shore Bancorp stock, see the LSBK Stock Forecast page.

Lake Shore Bancorp Declares Quarterly Cash Dividend to Shareholders

On January 21, 2026, Lake Shore Bancorp’s board of directors declared a cash dividend of $0.09 per share on its outstanding common stock, with payment scheduled for February 11, 2026, to shareholders of record as of February 2, 2026. The announcement underscores the community bank’s continued return of capital to investors and signals management’s confidence in the company’s financial position and ability to maintain shareholder distributions.

The most recent analyst rating on (LSBK) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Lake Shore Bancorp stock, see the LSBK Stock Forecast page.