Lake Shore Bancorp, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a decline in net income and net interest income compared to the same periods in 2023. For Q3 2024, net income was $1.332 million, or $0.24 per diluted share, down from $1.571 million, or $0.27 per diluted share in Q3 2023. For the nine months ended September 30, 2024, net income totaled $3.462 million, a decrease from $4.071 million in the prior year.
Total interest income for Q3 2024 increased slightly to $8.851 million from $8.721 million in Q3 2023, while interest expense rose significantly to $3.468 million from $2.426 million, leading to a net interest income of $5.383 million, down from $6.295 million in the same quarter last year. The net interest margin also decreased to 3.28% from 3.74% year-over-year. For the nine-month period, net interest income was $15.723 million, down from $18.800 million in 2023.
The company experienced a notable increase in interest expense, primarily due to rising rates on deposits, which increased the average interest rate paid on interest-bearing liabilities from 1.61% to 2.70%. The average yield on loans improved to 5.58% from 5.25%, despite a decrease in the average loan portfolio balance.
Non-interest income for Q3 2024 increased by $186,000 to $791,000, while non-interest expenses decreased by $383,000 to $4.8 million. The decrease in non-interest expenses was attributed to reduced professional services and advertising costs. The effective tax rate for the nine months ended September 30, 2024, was 16.0%, down from 17.1% in the previous year.
As of September 30, 2024, total assets decreased to $697.6 million, down from $725.1 million at the end of 2023. Total deposits also saw a decline, falling to $587.6 million from $590.9 million. The allowance for credit losses on loans decreased to $5.494 million from $6.463 million at the end of 2023, reflecting a reduction in the commercial mortgage loan portfolio.
The company remains under a Consent Order from the OCC, which requires remediation in various operational areas, potentially impacting future financial performance. Additionally, Lake Shore Bancorp has suspended its stock repurchase program, which had previously authorized the repurchase of up to 106,327 shares.
About LAKE SHORE BANCORP, INC.
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