Lake Shore Bancorp Announces Closing Date of Conversion Transaction and Results of Stock Offering

Rhea-AI Summary

Lake Shore Bancorp (NASDAQ: LSBK) has announced the closing of its mutual-to-stock conversion and related stock offering, scheduled for July 18, 2025. The company will sell 4,950,460 shares at $10.00 per share, raising gross proceeds of $49.5 million.

As part of the conversion, existing public stockholders' shares will be converted at an exchange ratio of 1.3549 shares of Lake Shore Bancorp common stock for each Lake Shore Federal Bancorp share. Trading under the symbol "LSBK" on Nasdaq Global Market is expected to begin on July 21, 2025, with approximately 7,825,877 shares outstanding post-conversion.

Positive

• Successfully raised $49.5 million through stock offering at $10.00 per share
• All valid stock orders in subscription offering will be filled in full
• Received all necessary regulatory approvals for conversion
• Maintains strong presence with 10 full-service branch locations in Western New York

Negative

• Potential dilution for existing shareholders through new share issuance
• Complex conversion process may cause temporary operational adjustments

Insights

Banking and Financial Restructuring Expert

Lake Shore completes $49.5M stock offering and mutual-to-stock conversion, maintaining existing shareholder ownership percentage through 1.3549 exchange ratio.

Lake Shore Bancorp has received all necessary regulatory approvals to complete its conversion from a mutual holding company structure to a full stock company, with the transaction expected to close on July 18, 2025. The bank has successfully raised $49.5 million in gross proceeds by selling approximately 4,950,460 shares at $10.00 per share in its subscription offering. This capital raise hit near the midpoint of their target range, indicating reasonable investor interest in the institution.

This transaction represents a significant structural transformation for Lake Shore. The conversion will change the company from a partially public entity (where Lake Shore, MHC owned a controlling interest) to a fully public company. Current public shareholders will maintain their proportional ownership through an exchange ratio of 1.3549 new shares for each existing share they hold.

The bank is simultaneously converting from a federal savings bank to a New York chartered commercial bank. This charter change gives Lake Shore more flexibility in its lending activities, as commercial banks typically have broader lending powers than savings institutions. Following the conversion, approximately 7,825,877 shares will be outstanding, establishing the bank's initial market capitalization at around $78.3 million.

For current shareholders, this conversion provides enhanced liquidity and a cleaner corporate structure by eliminating the mutual holding company layer. All valid stock orders from eligible account holders and members will be filled completely, demonstrating that the offering wasn't oversubscribed to the point of requiring allocation adjustments - a positive sign of balanced demand.

DUNKIRK, N.Y., July 08, 2025 (GLOBE NEWSWIRE) -- Lake Shore Bancorp, Inc. (“Lake Shore Federal Bancorp”) (NASDAQ: LSBK), the holding company for Lake Shore Savings Bank (the “Bank”), announced today that all regulatory approvals have been received to close the conversion of Lake Shore, MHC from mutual to stock form and the related stock offering by Lake Shore Bancorp, Inc. (“Lake Shore Bancorp”), the proposed new stock holding company for Lake Shore Bank and the Bank’s conversion from a federal savings bank to a New York chartered commercial bank.

Closing is expected to occur after the close of business on July 18, 2025. Lake Shore Bancorp’s common stock is expected to begin trading on the Nasdaq Global Market under the trading symbol “LSBK” on July 21, 2025.

As a result of the subscription offering, Lake Shore Bancorp expects to sell a total of 4,950,460 shares of its common stock (approximately the midpoint of the offering range) at a price of $10.00 per share for total gross proceeds of $49.5 million. All valid stock orders submitted by eligible account holders, supplemental eligible account holders and voting members in the subscription offering will be filled in full. Lake Shore Bancorp’s transfer agent, Computershare Trust Company, N.A. (“Computershare”), expects to mail Direct Registration System (“DRS”) Book-Entry statements for shares purchased in the subscription offering and interest checks, on or about July 21, 2025.

As part of the conversion transaction, each outstanding share of Lake Shore Federal Bancorp common stock owned by the public stockholders of Lake Shore Federal Bancorp (stockholders other than Lake Shore, MHC) as of the closing date will be converted into shares of Lake Shore Bancorp common stock based on an exchange ratio of 1.3549 shares of Lake Shore Bancorp common stock for each share of Lake Shore Federal Bancorp common stock so that Lake Shore Federal Bancorp’s existing public stockholders will own approximately the same percentage of Lake Shore Bancorp’s common stock as they owned of Lake Shore Federal Bancorp’s common stock immediately prior to the conversion, subject to adjustment as disclosed in the prospectus. Cash will be issued in lieu of a fractional share of Lake Shore Bancorp common stock based on the offering price of $10.00 per share. Upon the completion of the conversion and stock offering, approximately 7,825,877 shares of Lake Shore Bancorp common stock are expected to be outstanding before adjustment for fractional shares.

Stockholders of Lake Shore Federal Bancorp holding shares in street name will receive shares of Lake Shore Bancorp common stock and cash in lieu of fractional shares within their accounts. Stockholders of Lake Shore Federal Bancorp holding shares in certificated form will be mailed a letter of transmittal on or about July 21, 2025. After submitting their stock certificates and a properly completed letter of transmittal to Computershare, stockholders will receive DRS Book-Entry statements reflecting their shares of Lake Shore Bancorp common stock and checks for cash in lieu of fractional shares.

Luse Gorman, PC has acted as legal counsel to Lake Shore Bancorp and Lake Shore Federal Bancorp. Raymond James & Associates, Inc. has acted as marketing agent for Lake Shore Bancorp in the subscription offering. Kilpatrick Townsend & Stockton LLP has acted as legal counsel to Raymond James & Associates, Inc.

About Lake Shore
  
Lake Shore Federal Bancorp is the mid-tier holding company of Lake Shore Savings Bank, a federally chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. Lake Shore Federal Bancorp’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about Lake Shore Federal Bancorp is available at www.lakeshoresavings.com.

Safe-Harbor

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about Lake Shore Federal Bancorp’s, Lake Shore Bancorp, Inc.’s (collectively, the “Company”) and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, delays in closing the conversion and stock offering; possible unforeseen delays in delivering DRS Book-Entry statements or interest checks; and/or delays in the start of trading due to market disruptions or otherwise, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, tariffs, unanticipated changes in our liquidity position, climate change, geopolitical conflicts, public health issues, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, dividend policy changes and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized.

Legal Disclosures

The shares of common stock of Lake Shore Bancorp, Inc. are not savings accounts or deposit accounts and are not insured by the Federal Deposit Insurance Corporation or by any other governmental agency.

Source: Lake Shore Bancorp, Inc.
Category: Financial

Investor Relations/Media Contact
Kim C. Liddell
President, CEO, and Director
Lake Shore Bancorp, Inc.
31 East Fourth Street
Dunkirk, New York 14048
(716) 366-4070 ext. 1012

FAQ

When will Lake Shore Bancorp (LSBK) begin trading after its conversion?

Lake Shore Bancorp will begin trading on the Nasdaq Global Market under symbol LSBK on July 21, 2025.

How much money did Lake Shore Bancorp raise in its stock offering?

Lake Shore Bancorp raised $49.5 million by selling 4,950,460 shares at $10.00 per share.

What is the exchange ratio for Lake Shore Bancorp's conversion?

Existing shares will be converted at a ratio of 1.3549 new shares of Lake Shore Bancorp stock for each Lake Shore Federal Bancorp share.

How many shares of Lake Shore Bancorp (LSBK) will be outstanding after the conversion?

Approximately 7,825,877 shares of Lake Shore Bancorp common stock will be outstanding after the conversion.

When will Lake Shore Bancorp shareholders receive their new shares?

DRS Book-Entry statements and interest checks are expected to be mailed on or about July 21, 2025.