Lake Shore Bancorp, Inc. (NASDAQ: LSBK) reported unaudited net income of $2.3 million, or $0.31 per diluted share, for the third quarter of 2026. This figure represents a decrease of $45,000, or 1.9%, compared to the $2.4 million, or $0.32 per diluted share, reported for the same period in 2025. For the first nine months of 2026, net income totaled $6.4 million, or $0.87 per diluted share, an increase of $1.1 million, or 20.1%, over the $5.3 million, or $0.70 per diluted share, earned in the first nine months of 2025.
The company attributes the modest year-over-year decline in the third quarter to a higher provision for credit losses of $559,000 and a decrease in non-interest income of $273,000, which included a one-time death benefit on bank-owned life insurance. These factors were partially offset by an increase in net interest income of $786,000, or 12.4%. Net interest margin increased to 4.17% for the third quarter of 2026, up 11 basis points from the 4.06% margin recorded in the second quarter of 2026 and 45 basis points from the 3.72% margin in the third quarter of 2025.
Efficiency ratio improved to 60.95% for the quarter ended September 30, 2026, a decrease of 282 basis points from 63.77% in the second quarter of 2026. The company repurchased 105,090 shares of common stock during the third quarter at an average cost of $17.92 per share. Non-performing assets increased slightly to 0.24% of total assets at September 30, 2026, compared to 0.23% at December 31, 2025. The bank's capital position remains well capitalized, with a Tier 1 Leverage ratio of 17.56% and a Total Risk-Based Capital ratio of 23.89%.
