Lake Shore Bancorp reported net income of $899,000 in the second quarter, up 12.4 percent from a year ago.

The Dunkirk-based parent of Lake Shore Savings Bank said it benefited from higher non-interest income, while its net interest income and non-interest expense held steady during the quarter.

The bank’s diluted earnings per share increased to 16 cents from 14 cents a year ago.

Lake Shore continues to work on building up its commercial loan portfolio, said Daniel P. Reininga, Lake Shore’s president and chief executive officer. “There are many opportunities in the marketplace right now, and obviously all banks are interested that they have a commercial presence for those opportunities,” especially with economic development projects underway in Buffalo, Rochester and in places between those cities, he said.

Lake Shore divides its commercial lending opportunities into market sectors, or “buckets,” evaluates the risk with each and sets concentration limits by sector, based on risk, Reininga said. The bank is also preparing to bring aboard a new executive vice president of its commercial division, effective next week, Reininga said.

During the second quarter, Lake Shore’s net interest income from making loans and taking deposits was $3.7 million, unchanged from a year ago. The bank’s non-interest income was $670,000, up 30 percent from the second quarter of 2013. A substantial part of that increase resulted from $157,000 in net gains from sales of investment securities.

And Lake Shore’s non-interest expense was unchanged at $3.3 million. The bank recorded higher costs for occupancy, equipment and data processing, but that was offset by reduced spending on professional services and other areas.