The depositor-controlled company that owns the majority of shares of Lake Shore Bancorp will hold a special meeting of its depositor members next month to consider a proposal to waive the rights of the “mutual holding company” to receive Lake Shore dividends over the next 12 months.

Lake Shore MHC, which owns 61.4 pecent of Lake Shore Bancorp’s stock, will convene the meeting Feb. 26, at which time depositors of Dunkirk-based Lake Shore Savings Bank will vote on whether to authorize the company to waive dividends totaling 28 cents per share for the year. That waiver would save the company significant money, since it would only have to pay dividends to a minority of its shareholder base.

Lake Shore MHC has historically waived its right to the dividend, but a new Federal Reserve Board regulation now bars mutual holding companies from waiving the dividend unless that action was approved by its members – the bank’s depositors.

As the company was unable to arrange for such a vote in recent quarters, it instead cut the dividend to reduce its spending.

Because the vote will be held after the savings bank would normally declare the dividend, Lake Shore Bancorp’s board of directors delayed its quarterly cash dividend from the end of January until March.

If the waiver is not approved by the depositors, or if the Fed still objects, the Lake Shore board will slash the quarterly dividend from 7 cents per share each quarter to 4 cents per share, which is what the company has been paying since the regulation was approved. That means an annual dividend of 16 cents per share, not 28 cents.

Lake Shore Bancorp, with 10 branches in Erie and Chautauqua counties, had $498.7 million in assets and $392.6 million in deposits at Sept. 30. The bank will be reporting its fourth-quarter earnings in the next couple of weeks.