Lake Shore Bancorp, MHC to Seek Member Approval for Dividend Waiver
Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the holding company for Lake Shore Savings Bank (the “Bank”), today announced that Lake Shore, MHC (the “MHC”), the mutual holding company that owns 61.4% of the Company's outstanding common stock, will hold a special meeting of its members to vote on a proposal to authorize the MHC to waive its right to receive dividends aggregating up to $0.28 per share that may be declared by the Company in the 12 months subsequent to the approval of the proposal by members. All dividends on the Company's common stock are declared at the discretion of the Company's Board of Directors. The special meeting will be held on February 26, 2013.
Regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) prohibit the waiver of dividends by the MHC unless the waiver has been approved by its members, consisting of depositors of the Bank. As a result of the timing of the member vote, the Company's Board of Directors has determined to delay the declaration of its quarterly cash dividend that normally would have been declared at the end of January to March 2013.
There can be no assurance that the members will approve the dividend waiver or that the Federal Reserve will not object to the waiver even if it is approved by members at the special meeting. If the proposed dividend waiver is not approved by members or the Federal Reserve, the Board of Directors of the Company intends to reduce the proposed quarterly dividend from $0.07 per outstanding share to $0.04 per outstanding share, the amount the Company has most recently paid.
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