Lake Shore Bancorp said Thursday that its second-quarter profits soared 83 percent as revenues grew, the bank added more deposits from its newest branch and credit quality remained stable.

The Dunkirk-based parent of Lake Shore Savings Bank reported profits of $649,000, or 11 cents per share, up from $354,000, or 6 cents per share, a year ago.

Pre-tax income nearly doubled, while total revenues rose 16 percent to $4 million, driven by a 20 percent increase in net interest income from taking deposits and making loans.

Additionally, the bank’s newest branch, which opened in Depew in April, already has $17 million in deposits, exceeding management’s initial expectations.

“The momentum we developed early in the year continued through the second quarter with strong year-on-year revenue and earnings growth and continuation of our strong and stable asset quality,” President and CEO David C. Mancuso said in a statement.

Mancuso has previously said the bank plans to continue its Erie County branch expansion, opening another office every 12 to 18 months for three to five years, beginning with a Williamsville location next year.

Separately, Mancuso on Wednesday notified the board of directors that he will retire as of Jan. 28, 2011, according to a company filing with the Securities and Exchange Commission. He plans to remain a director and will be eligible for re-election in 2012.

Mancuso, who joined the bank as a teller in 1965, has been CEO since 1993, and has overseen the savings bank’s rapid growth from two branches to 10, as well as its conversion to a partially shareholder- owned company.

The company said it will name a successor before his retirement, and Mancuso will cooperate in an orderly transition.

The filing did not identify any candidates, but longtime independent director and board vice chairman Daniel P. Reininga was hired in January as executive vice president and chief operating officer, putting him first in line to succeed Mancuso. The board also elected director Gary W. Winger as vice chairman, filling Reininga’s seat.

Chief Financial Officer Rachel Foley could also be a candidate, and former Chief Operating Officer Reginald Corsi, who retired in 2008, is on the board.

During the quarter, the company bought back 10,000 shares of stock under a stock buyback plan approved in February for up to 122,642 shares.

Net interest income for the quarter totaled $3.42 million, up from $2.84 million a year ago, as the profit margin widened because the bank paid a lot less for its funds. The bank set aside $200,000 for loan losses, up fivefold from $40,000 a year ago, because of an expected loss on a single commercial loan. Otherwise, bad debts and losses remained low.

During the quarter, the bank added nearly $27 million in deposits, mostly in Depew, as total deposits rose 9 percent to $347.5 million. But loans fell very slightly, to $258 million.

Non-interest income fell 3 percent to $581,000 because of loan sales a year ago that generated $27,000 in added income. Expenses also fell by less than 1 percent to $2.9 million, as higher staffing and occupancy costs for the new branch were offset by lower professional services expenses and lower Federal Deposit Insurance Corp. payments.

jepstein@buffnews.comnull