Earnings per share was calculated for the three and six months ended June 30, 2025 and 2024, in accordance with ASC 260 - Earnings Per Share, which provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Basic earnings per share is based upon the weighted average number of common shares outstanding, exclusive of unearned shares held by the Employee Stock Ownership Plan of Lake Shore Bancorp, Inc. (the “ESOP”). Unvested shares of restricted stock which have voting rights and are eligible to receive dividends are included in the calculation of the weighted average number of common shares outstanding. Diluted earnings per share is based upon the weighted average number of common shares outstanding and common share equivalents that would arise from the exercise of dilutive securities. Stock options are regarded as potential common stock and are

considered in the diluted earnings per share calculations to the extent they would be dilutive and computed using the treasury stock method.

The calculated basic and diluted earnings per share are as follows:


	Three Months Ended June 30,
	2025		2024
Numerator – net income	$	1,919,000	$	1,116,000
Denominator:
Basic weighted average shares outstanding		5,667,176		5,885,764
Increase in weighted average shares outstanding due to:
Stock options(1)		2,796		—
Diluted weighted average shares outstanding(1)		5,669,972		5,885,764

Earnings per share:
Basic	$	0.34	$	0.19
Diluted	$	0.34	$	0.19

	Six Months Ended June 30,
	2025		2024
Numerator – net income	$	2,975,000	$	2,130,000
Denominator:
Basic weighted average shares outstanding		5,656,795		5,865,744
Increase in weighted average shares outstanding due to:
Stock options(1)		3,578		—
Diluted weighted average shares outstanding(1)		5,660,373		5,865,744

Earnings per share:
Basic	$	0.53	$	0.36
Diluted	$	0.53	$	0.36

(1)

All stock options outstanding during the three and six months ended June 30, 2025 were included in the calculation of diluted earnings per share as none had anti-dilutive effects. Weighted average stock options to purchase 29,142 shares under the Company's 2006 Stock Option Plan and 17,750 shares under the Company's 2012 Equity Incentive Plan ("EIP") at $14.38 and $10.69, respectively, were outstanding during the three months ended June 30, 2024, but were not included in the calculation of diluted earnings per share because to do so would have been anti-dilutive. Weighted average stock options to purchase 40,408 shares under the Company's 2006 Stock Option Plan and 15,135 shares under the 2012 Equity Incentive Plan at an exercise price of $14.38 and $10.69, respectively, were outstanding during the six months ended June 30, 2024, but were not included in the calculation of diluted earnings per share because to do so would have been anti-dilutive.