| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 125.81 | 722 |
| Intrinsic value (DCF) | 12.89 | -16 |
| Graham-Dodd Method | 12.90 | -16 |
| Graham Formula | 8.24 | -46 |
Lake Shore Bancorp, Inc. (NASDAQ: LSBK) is a regional banking institution operating as the holding company for Lake Shore Savings Bank. Founded in 1891 and headquartered in Dunkirk, New York, the company provides a comprehensive suite of banking products and services to individuals and small-to-medium-sized businesses across Western New York. With eleven full-service branches in Chautauqua and Erie counties, LSBK offers deposit products including savings, checking, money market, and retirement accounts, alongside a diversified loan portfolio featuring commercial real estate, residential mortgages, and consumer loans. The bank maintains a strong community focus, leveraging its long-standing local presence to serve its customer base. As a subsidiary of Lake Shore, MHC, LSBK operates in the competitive regional banking sector, emphasizing personalized service and relationship banking. With a market capitalization of approximately $87 million, the company plays a niche role in the Financial Services sector, catering to the banking needs of its regional market.
Lake Shore Bancorp presents a conservative investment opportunity with its stable regional banking operations and low beta of 0.227, indicating lower volatility compared to the broader market. The company reported $34.8 million in revenue and $4.9 million in net income for the latest fiscal period, with a diluted EPS of $0.87. Its dividend yield, supported by a $0.54 annual dividend per share, may appeal to income-focused investors. However, the bank's small market cap and limited geographic footprint pose concentration risks, and its growth prospects are constrained by its regional focus. The low beta suggests resilience in downturns but may also imply limited upside during market rallies. Investors should weigh the stability of its community banking model against the challenges of competing with larger regional and national banks.
Lake Shore Bancorp operates in a highly competitive regional banking landscape dominated by both larger regional players and community banks. Its competitive advantage lies in its deep community roots, personalized customer service, and localized decision-making, which larger banks often struggle to replicate. The bank's long-standing presence in Western New York (since 1891) provides brand loyalty and customer retention benefits. However, its small scale limits its ability to compete on technology investments, product breadth, and pricing with larger regional competitors. The bank's loan portfolio is concentrated in commercial real estate and residential mortgages, which aligns with its market but exposes it to local economic cycles. Its funding base is primarily composed of core deposits, providing a stable, low-cost source of funds—a key advantage in rising rate environments. While its efficiency ratio is not disclosed, its small branch network suggests higher operational efficiency than larger peers with extensive physical footprints. The bank's challenge lies in balancing growth with maintaining its community bank identity, particularly as digital banking reduces the advantage of physical proximity.