Lake Shore Bancorp, Inc. (NASDAQ:LSBK), a regional bank with a market capitalization of $74.75 million, has announced the renewal of its employment agreement with Kim C. Liddell, the President and Chief Executive Officer of both the company and its subsidiary, Lake Shore Savings Bank, as per the SEC filing on December 20, 2024.
According to InvestingPro analysis, the bank has maintained profitability over the last twelve months despite challenging market conditions. The new contract, effective from December 16, 2024, replaces the previous agreement dated July 16, 2024.
The renewed agreement spans an initial three-year term with annual reviews by the non-employee board members, who will decide on its extension. The term can be extended annually, maintaining a continuous three-year term, subject to performance evaluation and approval by the board.
Liddell's annual base salary is set at $605,000, with provisions for potential increases and performance-based cash bonuses. His compensation package also includes eligibility for long-term incentives and an executive perquisites allotment.
Under his leadership, the company has achieved a 17% year-to-date stock return, though InvestingPro data indicates the company faces challenges with gross profit margins. The stock currently trades at a price-to-book ratio of 0.85 and offers an attractive dividend yield of 5.48%.
Should Liddell voluntarily leave the company without "good reason," he is entitled to accrued benefits, which include unpaid base salary and reimbursements, unused paid time off, and any unpaid incentive compensation. Involuntary termination or resignation with "good reason" entitles him to a severance payment equivalent to one year's base salary plus the average of the three most recent years' incentive cash compensation, and 12 months' worth of life, medical, and dental coverage costs.
Additionally, the Bank has enacted a supplemental executive retirement plan (SERP) with Liddell, effective April 24, 2023, which stipulates benefits upon his retirement at or after age 67, disability, death, or a qualifying termination post-change in control. With an overall Financial Health score of "FAIR" according to InvestingPro, the bank maintains a conservative approach to financial management, reflected in its moderate P/E ratio of 17.86.
In other recent news, Lake Shore Savings Bank, a subsidiary of Lake Shore Bancorp, Inc., announced the termination of a Consent Order by the Office of the Comptroller of the Currency (OCC). The regulatory directive, addressing issues in information technology, security, and compliance, was lifted along with the bank's Troubled Condition status. This resolution came earlier than anticipated, indicating the bank's swift response to the operational challenges identified by the OCC.
Praising the bank's team for their efforts, Kim C. Liddell, President, CEO, and Director of Lake Shore Savings Bank, stated that the early lifting of the Consent Order reflects significant and speedy progress. The termination of the Consent Order and Troubled Condition status is indicative of improved regulatory compliance and operational stability.
Despite these positive developments, the bank's forward-looking statements caution that there are still various risks and uncertainties that could affect future performance. These include economic conditions and changes in regulatory or legal frameworks.
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