Lake Shore Bancorp 8K Annual Meeting of Shareholders | LSBK 21 May 08

Lake Shore Bancorp, Inc.

Annual Meeting of Shareholders

May 21, 2008

Exhibit 99.1

Lake Shore Bancorp, Inc.

Safe Harbor Statement

This presentation includes "forward looking statements" within the meaning of the

Private Securities Litigation Reform Act of 1995. Such statements include, but are

not limited to, statements concerning future business, revenue and earnings. These

statements are not historical facts or guarantees of future performance, events or

results. There are risks, uncertainties and other factors that could cause the actual

results of the Company to differ materially from the results expressed or implied by

such forward-looking statements. Information on factors that could affect the

Company's business and results is discussed in the Company's periodic reports filed

with the Securities and Exchange Commission. Forward looking statements speak

only as of the date they are made. The Company undertakes no obligation to publicly

update or revise forward looking information, whether as a result of new, updated

information, future events or otherwise.

Lake Shore Bancorp, Inc.

Lake Shore Bancorp Inc.

Corporate Profile

Market

Data

(as

May

19,

2008)

–

(Source

NASDAQ)

Ticker Symbol

LSBK

52 –

week Range

$7.81 -

$12.60

Current Price

$10.05

Market Capitalization

$64.26 million

Shares Outstanding

6.39M shares

50 Day Avg. Trading Vol.

1,414 shares

Dividend Yield 2.103%

Ownership

–

Insider 3.13%

–

Institutional 10.58%

Other Data

Return on Average Equity

3.39%

(as of December 31, 2007)

Lake Shore Bancorp, Inc.

Lake Shore Savings Facts:

Our mission is to be a high quality, well respected

financial institution in the markets that we serve.

We will continue to serve the financial needs of the

communities in our market area by providing

various residential lending and Small Business

Products.

We will create value by providing the best customer

service and developing lasting customer

relationships.

Lake Shore Bancorp, Inc.

Lake Shore Savings Facts:

Continued

We take great pride in the work skills of our

employees.

We have served our community for over 117 years.

Lake Shore Bancorp, Inc.

Positive Signs

Interest rate environment is changing.

Yield curve is moving to a favorable position.

Lower deposit cost will improve earnings.

Strong Mortgage Lending levels.

New Ad agency which is focused on Brand

awareness.

Erie County Offices growing and adding to the

profitability of the bank.

Earnings Enhancement program improves fee

income.

Lake Shore Bancorp, Inc.

New Staff and Directors

Retail Banking Officer -

Nancy LaTulip

Director

Paul Kolkmeyer

Director

Reginald Corsi

(if elected today)

Both Nancy LaTulip

and Paul Kolkmeyer

are well

known in Erie County and will help to improve market

share.

Lake Shore Bancorp, Inc.

New Products 2007

Commercial Overdraft Lines of Credit.

SBA Loans.

Business Debit Card.

New Home Equity Product –

allows borrower to

allocate a portion of a line of credit to a fixed

interest rate, with remainder having a variable

interest rate.

Lake Shore Bancorp, Inc.

Key Events

Announcement of Retirement of two key people at Lake

Shore Savings: Reg

Corsi, Chief Operating Officer and

Thomas Reed, Director.

Implementation of Remote Capture for our Retail

Business Customers.

Reduction in our efficiency ratio.

Earnings continue to improve.

Annual dividend increased to $0.20 cents per share from

$0.12 cents per share at this time last year.

Lake Shore Bancorp, Inc.

•

Financial Presentation

–

Rachel Foley, CFO

Lake Shore Bancorp, Inc.

Total Assets

($ in millions)

$303.5

$329.8

$333.7

$354.2

$357.8

$368.1

$200.0

$250.0

$300.0

$350.0

$400.0

2003

2004

2005

2006

2007

2008

Lake Shore Bancorp, Inc.

Loans, net

($ in millions)

$187.1

$199.5

$206.2

$205.7

$218.7

$222.3

$100.0

$150.0

$200.0

$250.0

2003

2004

2005

2006

2007

2008

Lake Shore Bancorp, Inc.

Loan Composition

(as of December 31, 2007)

Commercial real estate

9.35%

Construction loans

1.27%

Commercial loans

3.78%

One-to-four family

72.36%

Consumer loans

1.06%

Home equity

12.18%

Lake Shore Bancorp, Inc.

Non-performing Loans as a

percentage of Gross Loans

0.56%

0.40%

0.66%

0.64%

0.75%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

2003

2004

2005

2006

2007

Lake Shore Bancorp, Inc.

Loan Loss Reserves as a

percentage of Loans

0.69%

0.65%

0.60%

0.61%

0.56%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

2003

2004

2005

2006

2007

Lake Shore Bancorp, Inc.

Total Deposits

($ in millions)

$230.5

$243.6

$250.9

$249.6

$240.8

$250.3

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2003

2004

2005

2006

2007

2008

Lake Shore Bancorp, Inc.

Deposit Composition

(as of December 31, 2007)

Time

Deposits

> $100,000

13.73%

Noninterest-

Bearing

Demand

8.02%

Interest-

Bearing

Demand

15.75%

Money

Market

Accts

9.63%

Savings

10.50%

Time

Deposits

< $100,000

42.36%

Lake Shore Bancorp, Inc.

Net Interest Income

($ in millions)

$8.1

$9.4

$9.5

$9.7

$9.5

$5.0

$10.0

$15.0

2003

2004

2005

2006

2007

Lake Shore Bancorp, Inc.

Treasury Yield

1.25

1.5

1.72

1.97

2.47

2.64

3.18

3.48

3.89

4.57

4.55

4.95

5.02

4.97

4.86

4.9

4.93

5.09

5.0

5.18

1 mo

3 mo

6 mo

1 yr

2 yr

3 yr

5 yr

7 yr

10 yr

20 yr

30 yr

Treasury Maturities

5/2/2008

7/2/2007

Lake Shore Bancorp, Inc.

Interest Rate Margin & Spread

(in percentages)

3.32

3.15

3.09

3.00

2.92

3.32

3.18

3.03

2.93

2.60

2.42

2.83

0.00

1.00

2.00

3.00

4.00

5.00

2003

2004

2005

2006

2007

Q1 2008

Net Interest Margin

Interest Rate Spread

Lake Shore Bancorp, Inc.

Net Income

($ in millions)

$1.5

$2.2

$2.1

$1.8

$0.5

$1.0

$1.5

$2.0

$2.5

2003

2004

2005

2006

2007

Lake Shore Bancorp, Inc.

Return on Average Assets

(in percentages)

0.58%

0.68%

0.62%

0.52%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

2003

2004

2005

2006

2007

Lake Shore Bancorp, Inc.

Interest Rate Floor

•

Purchased August 2006.

•

Cost $221,000.

•

Covers $10 Million “notional”

amount of variable

rate loans tied to prime rate.

•

Receive interest income if prime rate falls below

8%.

•

Prime rate fell below 8% in September 2007.

•

$78,000 cumulative-to-date interest income

received.

Lake Shore Bancorp, Inc.

Interest Rate Floor (cont.)

•

Floor product is a derivative.

•

Increase or decrease in fair market value is

recorded as interest income.

•

Fair market value increased in 2007.

•

Recorded $298,075 of interest income in 2007.

•

Future increases or decreases in the fair market

value may affect the net interest income

recorded on income statement.

•

The floor will mature in August 2011.

Lake Shore Bancorp, Inc.

Quarter 2008 Results

•

Total

Assets

$10.3

since

Dec

st.

–

Loans, net up $3.6 M.

–

Cash up $5.5M.

•

Total

Deposits

$9.5M

since

Dec

Lake Shore Bancorp, Inc.

Quarter

2008

Results

•

$658,000 net income compared to

$298,000 in 1 quarter of 2007, a 121%

increase.

–

$317,000 increase in interest income due to

increase in fair market value of interest rate

floor (compared to $9,000 increase in 1 Q

2007).

–

$106,000 increase in service charges and

fees (compared to 1 Q 2007).

–

$78,000 decrease in deposit interest expense.

Lake Shore Bancorp, Inc.

Dividends Paid per Share

$0.03

$0.04

$0.05

$0.01

$0.02

$0.03

$0.04

$0.05

$0.06

Q4 2006

Q1 2007

Q2 2007

Q3 2007

Q4 2007

Q1 2008

Q2 2008

Lake Shore Bancorp (LSBK) 8-KAnnual Meeting of Shareholders