Lake Shore Bancorp, Inc., the holding company for Lake Shore Savings Bank, announced Thursday the Board of Directors has adopted a Plan of Conversion and Reorganization pursuant to which Lake Shore will undertake a “second step” conversion from a mutual holding company structure to the stock holding company structure.

In connection with the second step conversion, the Bank intends to seek regulatory approval to convert its charter to a New York-chartered commercial bank.

Lake Shore currently owns approximately 63.4% of the outstanding shares of common stock of the company which it acquired in connection with the reorganization of the Bank into the mutual holding company structure and the related initial public offering by the company in 2006.

As a result of the proposed transaction, a new stock holding company for the Bank (the “New Bank Holding Company”), which will represent Lake Shore, MHC’s ownership interest in the Company, to depositors of the Bank in a subscription offering and, if necessary, a community offering and/or a syndicated community offering.

Eligible account holders of the bank as of the close of business on Dec. 31, 2023 have first priority non-transferable subscription rights to subscribe for shares of common stock of the New Bank Holding Company. The total number of shares of common stock of the New Bank Holding Company to be issued in the proposed stock offering will be based on the aggregate pro forma market value of the common stock of the New Bank Holding Company, as determined by an independent appraisal.

In addition, each share of common stock of the Company owned by persons other than Lake Shore, MHC (the “minority shareholders”) will be converted into and become the right to receive a number of shares of common stock of the New Bank Holding Company pursuant to an exchange ratio established at the completion of the proposed transaction.

The proposed transaction is expected to be completed in the third quarter of 2025, subject to regulatory approval, approval by the members of Lake Shore, MHC (i.e., depositors of the Bank), and approval by the shareholders of the Company, including by a separate vote of approval by the Company’s minority shareholders. Detailed information regarding the proposed transaction, including the stock offering, will be sent to shareholders of the Company and members of Lake Shore, MHC following regulatory approval.