Quaint Oak Bancorp (QNTO) boosts H1 2026 earnings as assets and deposits decline
Quaint Oak Bancorp, Inc. reported higher profitability for the six months ended June 30, 2026. Net income rose to $647 thousand from $189 thousand a year earlier, and basic EPS increased to $0.24 from $0.07. For the quarter, net income was $481 thousand versus $272 thousand in 2025, with basic EPS of $0.18.
Total assets were $630.3 million at June 30, 2026, down from $675.9 million at December 31, 2025, as loans receivable declined to $527.2 million and deposits fell to $550.8 million from $597.3 million. Net interest income for the six months improved to $9.3 million from $8.6 million, while non-interest income grew to $4.1 million, driven by gains on loan and SBA loan sales. Non-performing loans increased to $9.8 million from $7.3 million, and the allowance for credit losses rose modestly to $6.4 million. Operating cash flow strengthened significantly to $21.4 million from $7.4 million, and stockholders’ equity edged up to $53.0 million, with book value per share of $19.98.
Positive
- Net income for the six months ended June 30, 2026 increased to $647 thousand from $189 thousand, with basic EPS rising to $0.24 from $0.07, indicating materially stronger profitability.
- Net cash provided by operating activities improved to $21.4 million for the six months ended June 30, 2026 from $7.4 million, reflecting stronger cash generation from core operations.
- Net interest income for the six months rose to $9.3 million from $8.6 million, while total non-interest income increased to $4.1 million from $3.7 million, aided by gains on loan and SBA loan sales.
Negative
- Non-performing loans (non-accrual plus 90 days past due and accruing) increased to $9.8 million at June 30, 2026 from $7.3 million at December 31, 2025, signaling some deterioration in credit quality.
- Total deposits declined to $550.8 million at June 30, 2026 from $597.3 million at December 31, 2025, including reductions in interest-bearing checking and certificates of deposit.
- Total assets decreased to $630.3 million from $675.9 million over the same period, with loans receivable down to $527.2 million, indicating balance sheet contraction.
Key Figures
Key Terms
allowance for credit losses financial
non-accrual loans financial
collateral-dependent loans financial
Level 3 financial
stock-based compensation expense financial
Earnings Snapshot
FAQ
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AI-generated analysis. How Rhea-AI works. Not financial advice.
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| SECURITIES AND EXCHANGE COMMISSION | ||||||||||||||||||||
| Washington, D.C. 20549 | ||||||||||||||||||||
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| QUAINT OAK BANCORP, INC. | ||||||||||||||||||||
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 12, 2026, |
INDEX
| PART I - FINANCIAL INFORMATION |
Page |
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| Item 1 - Financial Statements |
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| Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 (Unaudited) |
1 | |||
| Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited) |
2 | |||
| Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited) |
4 | |||
| Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited) |
5 | |||
| Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 (Unaudited) |
7 | |||
| Notes to the Unaudited Consolidated Financial Statements |
8 | |||
| Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations |
32 | |||
| Item 3 - Quantitative and Qualitative Disclosures About Market Risk |
46 | |||
| Item 4 - Controls and Procedures |
46 | |||
| PART II - OTHER INFORMATION |
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| Item 1 - Legal Proceedings |
47 | |||
| Item 1A - Risk Factors |
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| Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds |
47 | |||
| Item 3 - Defaults Upon Senior Securities |
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| Item 4 - Mine Safety Disclosures |
48 | |||
| Item 5 - Other Information |
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| Item 6 - Exhibits |
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| SIGNATURES |
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ITEM 1. FINANCIAL STATEMENTS
Quaint Oak Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
| At June 30, | At December 31, | |||||||
| 2026 | 2025 | |||||||
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| (In thousands, except share and per share data) | |||||||
| Assets | ||||||||
| Due from banks, non-interest-bearing | $ | $ | ||||||
| Due from banks, interest-bearing | ||||||||
| Cash and cash equivalents | ||||||||
| Investment in interest-earning time deposits | ||||||||
| Investment securities available for sale | ||||||||
| Loans held for sale | ||||||||
| Loans receivable, net of allowance for credit losses (2026 $6,440; 2025 $6,166) | ||||||||
| Accrued interest receivable | ||||||||
| Investment in Federal Home Loan Bank stock, at cost | ||||||||
| Bank-owned life insurance | ||||||||
| Premises and equipment, net | ||||||||
| Goodwill | ||||||||
| Other intangible, net of accumulated amortization | ||||||||
| Other real estate owned, net | ||||||||
| Servicing assets | ||||||||
| Prepaid expenses and other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Non-interest bearing | $ | $ | ||||||
| Interest-bearing | ||||||||
| Total deposits | ||||||||
| Senior debt, net of unamortized costs | ||||||||
| Subordinated debt | ||||||||
| Accrued interest payable | ||||||||
| Advances from borrowers for taxes and insurance | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock – $0.01 par value, 1,000,000 shares authorized; none issued or outstanding | ||||||||
| Common stock – $0.01 par value; 9,000,000 shares authorized; 3,108,993 issued as of both June 30, 2026 and December 31, 2025; 2,651,101 and 2,637,978 outstanding at June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost: 457,892 and 471,015 shares at June 30, 2026 and December 31, 2025, respectively | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Retained earnings | ||||||||
| Total Stockholders' Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
| For the Three | For the Six | |||||||||||||||
| Months Ended | Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (In Thousands) | (In Thousands) | |||||||||||||||
| Interest and Dividend Income | ||||||||||||||||
| Interest on loans, including fee | $ | $ | $ | $ | ||||||||||||
| Interest and dividends on time deposits, investment securities, interest-bearing deposits with others, and Federal Home Loan Bank stock | ||||||||||||||||
| Total Interest and Dividend Income | ||||||||||||||||
| Interest Expense | ||||||||||||||||
| Interest on deposits | ||||||||||||||||
| Interest on FHLB borrowings | ||||||||||||||||
| Interest on senior debt | ||||||||||||||||
| Interest on subordinated debt | ||||||||||||||||
| Total Interest Expense | ||||||||||||||||
| Net Interest Income | ||||||||||||||||
| Provision for Credit Losses – Loans | ||||||||||||||||
| (Recovery of) Provision for Credit Losses – Unfunded Commitments | ( | ) | ( | ) | ( | ) | ||||||||||
| Total Provision for Credit Losses | ||||||||||||||||
| Net Interest Income after Provision for Credit Losses | ||||||||||||||||
| Non-Interest Income | ||||||||||||||||
| Mortgage banking and title abstract fees | ||||||||||||||||
| Insurance commissions | ||||||||||||||||
| Other fees and services charges, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loan servicing income | ||||||||||||||||
| Income from bank-owned life insurance | ||||||||||||||||
| Net gain on sale of loans | ||||||||||||||||
| Gain on the sale of SBA loans | ||||||||||||||||
| Total Non-Interest Income | ||||||||||||||||
| Non-Interest Expense | ||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||
| Directors' fees (credit) and expenses | ( | ) | ||||||||||||||
| Occupancy and equipment | ||||||||||||||||
| Data processing | ||||||||||||||||
| SaaS subscription expense | ||||||||||||||||
| Professional fees | ||||||||||||||||
| FDIC deposit insurance assessment | ||||||||||||||||
| Advertising | ||||||||||||||||
| Amortization of other intangible | ||||||||||||||||
| Other | ||||||||||||||||
| Total Non-Interest Expense | ||||||||||||||||
| Income Before Taxes | $ | $ | $ | $ | ||||||||||||
| Income Taxes | ||||||||||||||||
| Net Income | $ | $ | $ | $ | ||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Per Common Share Data: | (Unaudited) | (Unaudited) | ||||||||||||||
| Earnings per share – basic | $ | $ | $ | $ | ||||||||||||
| Average shares outstanding – basic | ||||||||||||||||
| Earnings per share – diluted | $ | $ | $ | $ | ||||||||||||
| Average shares outstanding – diluted | ||||||||||||||||
| Book value per share, end of period | $ | $ | $ | $ | ||||||||||||
| Shares outstanding, end of period | ||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Net Income | $ | $ | $ | $ | ||||||||||||
| Other Comprehensive (Loss) Income: | ||||||||||||||||
| Unrealized (losses) gains on investment securities available-for-sale | ( | ) | ( | ) | ||||||||||||
| Income tax effect | ( | ) | ( | ) | ||||||||||||
| Other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
| Total Comprehensive Income | $ | $ | $ | $ | ||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Consolidated Statements of Stockholders’ Equity (Unaudited)
| For the Three Months Ended June 30, 2026 |
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| Common Stock | ||||||||||||||||||||||||||||
| Number of Shares Outstanding | Amount | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||||||||||
| BALANCE – MARCH 31, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Reissuance of treasury stock under 401(k) plan | ||||||||||||||||||||||||||||
| Treasury stock purchase | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Reissuance of treasury stock under incentive plan | ( | ) | ||||||||||||||||||||||||||
| Reissuance of treasury stock for exercised stock options | ||||||||||||||||||||||||||||
| Stock based compensation expense | ||||||||||||||||||||||||||||
| Cash dividends declared ($0.04 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||
| Other comprehensive loss, net | ( | ) | ( | ) | ||||||||||||||||||||||||
| BALANCE – JUNE 30, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| For the Three Months Ended June 30, 2025 |
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| Common Stock | ||||||||||||||||||||||||||||
| Number of Shares Outstanding | Amount | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||||||||||
| BALANCE – MARCH 31, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Reissuance of treasury stock under 401(k) Plan | ||||||||||||||||||||||||||||
| Treasury stock purchase | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Reissuance of treasury stock under incentive plan | ( | ) | - | |||||||||||||||||||||||||
| Stock based compensation expense | ||||||||||||||||||||||||||||
| Cash dividends declared ($0.13 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||
| Other comprehensive income, net | ||||||||||||||||||||||||||||
| BALANCE – JUNE 30, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Consolidated Statements of Stockholders’ Equity (Unaudited)
| For the Six Months Ended June 30, 2026 |
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| Common Stock | ||||||||||||||||||||||||||||
| Number of Shares Outstanding | Amount | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||||||||||
| BALANCE – DECEMBER 31, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Reissuance of treasury stock under 401(k) plan | ||||||||||||||||||||||||||||
| Treasury stock purchase | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Reissuance of treasury stock under incentive plan | ( | ) | ||||||||||||||||||||||||||
| Reissuance of treasury stock for exercised stock options | ||||||||||||||||||||||||||||
| Stock based compensation expense | ||||||||||||||||||||||||||||
| Cash dividends declared ($0.08 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||
| Other comprehensive loss, net | ( | ) | ( | ) | ||||||||||||||||||||||||
| BALANCE – JUNE 30, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| For the Six Months Ended June 30, 2025 |
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| Common Stock | ||||||||||||||||||||||||||||
| Number of Shares Outstanding | Amount | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||||||||||
| BALANCE – DECEMBER 31, 2024 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Reissuance of treasury stock under 401(k) Plan | ||||||||||||||||||||||||||||
| Treasury stock purchase | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Reissuance of treasury stock under incentive | ( | ) | - | |||||||||||||||||||||||||
| Stock based compensation expense | ||||||||||||||||||||||||||||
| Cash dividends declared ($0.26 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||
| Other comprehensive income, net | ||||||||||||||||||||||||||||
| BALANCE – JUNE 30, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Consolidated Statements of Cash Flows (Unaudited)
| For the Six Months | ||||||||
| Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | (In Thousands) | |||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Provision for credit losses | ||||||||
| Depreciation expense | ||||||||
| Amortization, net | ||||||||
| Accretion of deferred loan fees and costs, net | ( | ) | ( | ) | ||||
| Stock-based compensation expense | ||||||||
| Net gain on sale of loans | ( | ) | ( | ) | ||||
| Loans held for sale-originations | ( | ) | ( | ) | ||||
| Loans held for sale-proceeds | ||||||||
| Gain on the sale of SBA loans | ( | ) | ( | ) | ||||
| Transfer of SBA loans to portfolio | ||||||||
| Servicing assets | ( | ) | ||||||
| Increase in the cash surrender value of bank-owned life insurance | ( | ) | ( | ) | ||||
| Changes in assets and liabilities which provided (used) cash: | ||||||||
| Accrued interest receivable | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accrued interest payable | ( | ) | ||||||
| Accrued expenses and other liabilities | ( | ) | ||||||
| Net Cash Provided by Operating Activities | ||||||||
| Cash Flows from Investing Activities | ||||||||
| Purchases of interest earning time deposits | ( | ) | ||||||
| Principal repayments of investment securities available for sale | ||||||||
| Net decrease (increase) in loans receivable | ( | ) | ||||||
| Purchase of Federal Home Loan Bank stock | ( | ) | ||||||
| Redemption of Federal Home Loan Bank stock | ||||||||
| Purchase of premises and equipment | ( | ) | ( | ) | ||||
| Net Cash Provided by (Used in) Investing Activities | ( | ) | ||||||
| Cash Flows from Financing Activities | ||||||||
| Net decrease in demand deposits, money markets, and savings accounts | ( | ) | ( | ) | ||||
| Net (decrease) increase in certificate accounts | ( | ) | ||||||
| Increase (decrease) in advances from borrowers for taxes and insurance | ( | ) | ||||||
| Net proceeds from Federal Home Loan Bank borrowings | ||||||||
| Net repayments from subordinated debt | ( | ) | ||||||
| Net proceeds from senior debt | ||||||||
| Dividends paid | ( | ) | ( | ) | ||||
| Proceeds from the reissuance of treasury stock under 401(k) plan | ||||||||
| Proceeds from the exercise of stock options | ||||||||
| Acquisition of treasury stock | ( | ) | ( | ) | ||||
| Net Cash Used in Financing Activities | $ | ( | ) | $ | ( | ) | ||
| Net Decrease in Cash and Cash Equivalents | ( | ) | ( | ) | ||||
| Cash and Cash Equivalents – Beginning of Year | ||||||||
| Cash and Cash Equivalents – End of Period | $ | $ | ||||||
| Supplementary Disclosure of Cash Flow and Non-Cash Information: | ||||||||
| Cash payments for interest | $ | $ | ||||||
| Cash payments for income taxes | $ | $ | ||||||
| Transfer of loans into other real estate owned | $ | $ | ||||||
See accompanying notes to the unaudited consolidated financial statements.
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 1 – Financial Statement Presentation and Significant Accounting Policies
Basis of Financial Presentation. The consolidated financial statements include the accounts of Quaint Oak Bancorp, Inc., a Pennsylvania chartered corporation (the “Company” or “Quaint Oak Bancorp”) and its wholly owned subsidiary, Quaint Oak Bank, a Pennsylvania chartered stock savings bank (the “Bank”), along with its wholly owned subsidiaries. At June 30, 2026, the Bank has five wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, each a Pennsylvania limited liability company. Quaint Oak Mortgage offers mortgage banking in the Lehigh Valley, Delaware Valley and Philadelphia County regions of Pennsylvania and began operations in February, 2019. Quaint Oak Abstract offers title abstract services primarily in the Lehigh Valley region of Pennsylvania and began operation in July 2009. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC began operations in August 2016 and provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021 and operates as a nationwide specialty commercial real estate financing company.
The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation. Pursuant to the Bank’s election under Section 10(l) of the Home Owners’ Loan Act, the Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. The market area served by the Bank is principally Bucks, Montgomery and Philadelphia Counties in Pennsylvania and the Lehigh Valley area in Pennsylvania, although the Bank has customers in all fifty states, the District of Columbia and Puerto Rico. The Bank has three regional offices located in the Delaware Valley, Lehigh Valley and Philadelphia markets. The principal deposit products offered by the Bank are money market accounts, certificates of deposit, non-interest bearing checking accounts for businesses and consumers, and savings accounts. The principal loan products offered by the Bank are fixed and adjustable rate residential and commercial mortgages, construction loans, commercial business loans, home equity loans, and lines of credit.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim information and with the instructions to Form 10-Q, as applicable to a smaller reporting company. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements.
The foregoing consolidated financial statements are unaudited; but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation thereof. The balances as of December 31, 2025 have been derived from the audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Quaint Oak Bancorp’s 2025 Annual Report on Form 10-K. The results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
Use of Estimates in the Preparation of Financial Statements. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant estimates are the determination of the allowance for credit losses and the valuation of deferred tax assets.
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)
Critical Accounting Policies. The Company’s critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of June 30, 2026 have remained unchanged from the disclosures presented in our Annual Report on Form 10-K.
Loan Servicing Rights. When loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sale of loans. Fair value is based on market prices for comparable loan servicing contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Loan servicing rights are reported in servicing rights on the Consolidated Balance Sheets. Servicing rights are evaluated for impairment periodically based upon the fair value of the rights as compared to the carrying amount. Significant inputs to the fair value of loan servicing rights include expected net servicing income to be received, the expected life of the underlying loans and the discount rate. Impairment losses of $
Total loans serviced for the benefit of others amounted to $
Accounting Pronouncements Not Yet Adopted. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. This ASU requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Specific disclosures are required for (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities. The amendments in this Update do not change or remove current expense disclosure requirements. However, the amendments affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments. The amendments in ASU 2024-03 apply only to public business entities and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its financial statements.
In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating the impact of this new guidance on its financial statements.
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)
In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326), which amends the guidance in Topic 326 to expand the population of acquired financial assets subject to the gross-up approach to include loans (excluding credit cards) that are acquired without credit deterioration and deemed “seasoned.” All non-purchased credit deteriorated loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-purchased credit deteriorated loans (excluding credit cards) are considered to be seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. ASU 2025-08 should be applied prospectively and is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to clarify interim disclosure requirements, the form and content of interim financial statements, and when ASC Topic 270 applies. The amendments in the ASU provide a list of specific interim disclosures that are required by generally accepted accounting principles (GAAP), which, together with the disclosure principle, represent the complete population of required disclosures in interim reporting periods. The intent of the disclosure principle is to help entities determine whether any disclosures not specified in Topic 270 should be provided in interim reporting periods. ASU 2025-11 may be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements for public business entities for interim periods in fiscal years beginning after December 15, 2027, and all other entities in interim periods in fiscal years beginning after December 15, 2028. The Company is currently evaluating the impact of this new guidance on its financial statements.
Note 2 – Earnings Per Share
Earnings per share (“EPS”) consists of two separate components, basic EPS and diluted EPS. Basic EPS is computed based on the weighted average number of shares of common stock outstanding for each period presented. Diluted EPS is calculated based on the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents (“CSEs”). CSEs consist of shares that are assumed to be purchased with the proceeds from the exercise of stock options, as well as unvested restricted stock (RRP) shares. Common stock equivalents which are considered antidilutive are not included for the purposes of this calculation. For the three and six months ended June 30, 2025, all unvested restricted stock program awards and outstanding stock options representing shares were anti-dilutive. For the three and six months ended June 30, 2026, all unvested restricted stock program awards and outstanding stock options representing shares were dilutive.
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 2 – Earnings Per Share (Continued)
The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computations.
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Income | $ | $ | $ | $ | ||||||||||||
| Weighted average shares outstanding – basic | ||||||||||||||||
| Effect of dilutive common stock equivalents | ||||||||||||||||
| Adjusted weighted average shares outstanding – diluted | ||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | ||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | ||||||||||||
Note 3 – Accumulated Other Comprehensive Income
The following table presents the changes in accumulated other comprehensive income by component, net of tax, for the three and six months ended June 30, 2026 and 2025 (in thousands):
| Unrealized Gains (Losses) on | Unrealized Gains (Losses) on | |||||||||||||||
| Investment Securities | Investment Securities | |||||||||||||||
| Available for Sale (1) | Available for Sale (1) | |||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Balance at the beginning of the period | $ | $ | $ | $ | ||||||||||||
| Other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
| Balance at the end of the period | $ | $ | $ | $ | ||||||||||||
_________________
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
There were
Note 4 – Investment Securities Available for Sale
The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale at June 30, 2026 and December 31, 2025 are summarized below (in thousands):
| June 30, 2026 | ||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
| Available for Sale: | ||||||||||||||||
| Mortgage-backed securities: | ||||||||||||||||
| Government National Mortgage Association securities | $ | $ | $ | $ | ||||||||||||
| Federal National Mortgage Association securities | ||||||||||||||||
| Total available-for-sale-securities | $ | $ | $ | $ | ||||||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 4 – Investment Securities Available for Sale (Continued)
| December 31, 2025 | ||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
| Available for Sale: | ||||||||||||||||
| Mortgage-backed securities: | ||||||||||||||||
| Government National Mortgage Association securities | $ | $ | $ | $ | ||||||||||||
| Federal National Mortgage Association securities | ||||||||||||||||
| Total available-for-sale-securities | $ | $ | $ | $ | ||||||||||||
The amortized cost and fair value of mortgage-backed securities at June 30, 2026, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):
| Available for Sale | ||||||||
| Amortized Cost | Fair Value | |||||||
| Due after ten years | $ | $ | ||||||
There were no securities in a loss position at June 30, 2026 or December 31, 2025.
The Company’s mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. The change in fair value of these securities is attributable to changes in interest rates and not credit quality, and the Company does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost. Therefore, the Company does not have an allowance for credit losses for these investments as of June 30, 2026.
There were
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 - Loans Receivable, Net and Allowance for Credit Losses
The composition of net loans receivable is as follows (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Real estate loans: | ||||||||
| One-to-four family residential: | ||||||||
| Owner occupied | $ | $ | ||||||
| Non-owner occupied | ||||||||
| Total one-to-four family residential | ||||||||
| Multi-family (five or more) residential | ||||||||
| Commercial real estate | ||||||||
| Construction | ||||||||
| Home equity | ||||||||
| Total real estate loans | ||||||||
| Commercial business | ||||||||
| Other consumer | ||||||||
| Total Loans | ||||||||
| Deferred loan costs, net | ||||||||
| Allowance for credit losses | ( | ) | ( | ) | ||||
| Net Loans | $ | $ | ||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of June 30, 2026 (in thousands):
| Term Loans Amortized Cost by Origination Year | ||||||||||||||||||||||||||||||||
| As of June 30, 2026 | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||||||||
| One-to-four family residential owner occupied | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total one-to-four family residential owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| One-to-four family residential non-owner occupied | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total one-to-four family residential non-owner occupied | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Multi-family residential | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total multi-family residential | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total commercial real estate | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total construction | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
| Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
| ||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost by Origination Year | ||||||||||||||||||||||||||||||||
| As of June 30, 2026 | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total home equity | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial business | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total commercial business | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Other consumer | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total other consumer | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of December 31, 2025 (in thousands):
|
| ||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost by Origination Year | ||||||||||||||||||||||||||||||||
| As of December 31, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||||||||
| One-to-four family residential owner | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total one-to-four family residential owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| One-to-four family residential non-owner occupied | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total one-to-four family residential non-owner occupied | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Multi-family residential | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total multi-family residential | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total commercial real estate | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total construction | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 – Loans Receivable, Net and Allowance for Credit Losses (Continued)
| Term Loans Amortized Cost by Origination Year | ||||||||||||||||||||||||||||||||
| As of December 31, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total home equity | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Commercial business | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total commercial business | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Other consumer | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total other consumer | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Risk rating | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Current period gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
The following tables present non-performing loans by classes of the loan portfolio as of June 30, 2026 and December 31, 2025 (in thousands):
| June 30, 2026 | ||||||||||||||||||||
| Non-accrual loans | 90 Days | |||||||||||||||||||
| With a | Without a | or More Past | ||||||||||||||||||
| Related | Related | Due and | Total Non- | |||||||||||||||||
| Allowance | Allowance | Total | Accruing (1) | Performing | ||||||||||||||||
| One-to-four family residential owner occupied | $ | $ | $ | $ | $ | |||||||||||||||
| Commercial real estate | ||||||||||||||||||||
| Commercial business | ||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||
________________________
| (1) | These loans are well secured and in the process of collection. |
As part of the discontinued operations of Oakmont Capital Holdings, LLC (“OCH”), in March 2024, the Bank retained approximately
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
| December 31, 2025 | ||||||||||||||||||||
| Non-accrual loans | 90 Days | |||||||||||||||||||
| With a Related | Without a Related | or More Past Due | Total Non- | |||||||||||||||||
| Allowance | Allowance | Total | and Accruing | Performing | ||||||||||||||||
| One-to-four family residential owner occupied | $ | $ | $ | $ | $ | |||||||||||||||
| Commercial real estate | ||||||||||||||||||||
| Commercial business | ||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||
As part of the discontinued operations of OCH, in March 2024, the Bank retained approximately
For the three and six months ended June 30, 2026 and 2025 there was
Occasionally, the Bank modifies loans to borrowers in financial distress by providing principal forgiveness and term extensions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.
In some cases, the Bank provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.
For the six months ended June 30, 2026, there were
Following is a summary, by loan portfolio class, of changes in the allowance for credit losses for the three and six months ended June 30, 2026 (in thousands):
| June 30, 2026 | ||||||||||||||||||||||||||||||||
| 1-4 Family Residential Owner Occupied | 1-4 Family Residential Non-Owner Occupied | Multi-Family Residential | Commercial Real Estate | Construction | Home Equity | Commercial Business and Other Consumer | Total | |||||||||||||||||||||||||
| For the Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Provision | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
| June 30, 2026 | ||||||||||||||||||||||||||||||||
| 1-4 Family | 1-4 Family | Commercial | ||||||||||||||||||||||||||||||
| Residential | Residential | Multi- | Business | |||||||||||||||||||||||||||||
| Owner | Non-Owner | Family | Commercial | Home | and Other | |||||||||||||||||||||||||||
| Occupied | Occupied | Residential | Residential | Construction | Equity | Consumer | Total | |||||||||||||||||||||||||
| For the Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Provision | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
The Bank allocated increased allowance for credit loss provisions to the commercial business loan portfolio class for the three months and six months ended June 30, 2026, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the construction loan portfolio classes for the three months ended June 30, 2026, due primarily to changes in quantitative factors in this portfolio class. The Bank allocated decreased allowance for credit loss provisions to the construction loan portfolio classes for the six months ended June 30, 2026, due primarily to changes in qualitative factors in this portfolio class. The Bank allocated decreased allowance for credit loss provisions to the commercial real estate loan portfolio class for the three months and six months ended June 30, 2026, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated decreased allowance for credit loss provisions to the multi-family residential loan portfolio classes for the six months ended June 30, 2026, due primarily to changes in quantitative factors and qualitative factors associated with the current economic environment in this portfolio class.
Following is a summary, by loan portfolio class, of changes in the allowance for credit losses for the three and six months ended June 30, 2025 (in thousands):
| June 30, 2025 | ||||||||||||||||||||||||||||||||
| 1-4 Family Residential Owner Occupied | 1-4 Family Residential Non-Owner Occupied | Multi-Family Residential | Commercial Real Estate | Construction | Home Equity | Commercial Business and Other Consumer | Total | |||||||||||||||||||||||||
| For the Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Provision | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| For the Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||||||||
| Provision | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ |
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
The Bank allocated decreased allowance for credit loss provisions to the multi-family residential loan portfolio classes for the three and six months ended June 30, 2025, due primarily to changes in quantitative factors and qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the construction loan portfolio classes for the three and six months ended June 30, 2025, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the commercial business loan portfolio class for the three and six months ended June 30, 2025, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class.
The following tables present the collateral-dependent loans by portfolio segment and collateral type at June 30, 2026 and December 31, 2025:
| June 30, 2026 | ||||||||||||
| Real Estate | Business Assets | Total | ||||||||||
| One-to-four family residential owner occupied | $ | $ | $ | |||||||||
| Commercial real estate | ||||||||||||
| Commercial business | ||||||||||||
| Total | $ | $ | $ | |||||||||
| December 31, 2025 | ||||||||||||
| Real Estate | Business Assets | Total | ||||||||||
| One-to-four family residential owner occupied | $ | $ | $ | |||||||||
| Commercial real estate | ||||||||||||
| Commercial business | ||||||||||||
| Total | $ | $ | $ | |||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
| Note 5 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
The following tables present the classes of the loan portfolio summarized by the past due status as of June 30, 2026 and December 31, 2025 (in thousands): |
| June 30, 2026 | ||||||||||||||||
| 30-89 Days Past Due | 90 Days or More Past Due | Current | Total Loans Receivable | |||||||||||||
| One-to-four family residential owner occupied | $ | $ | $ | $ | ||||||||||||
| One-to-four family residential non-owner occupied | ||||||||||||||||
| Multi-family residential | ||||||||||||||||
| Commercial real estate | ||||||||||||||||
| Construction | ||||||||||||||||
| Home equity | ||||||||||||||||
| Commercial business | ||||||||||||||||
| Other consumer | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2025 | ||||||||||||||||
| 30-89 Days Past Due | 90 Days or More Past Due | Current | Total Loans Receivable | |||||||||||||
| One-to-four family residential owner occupied | $ | $ | $ | $ | ||||||||||||
| One-to-four family residential non-owner occupied | ||||||||||||||||
| Multi-family residential | ||||||||||||||||
| Commercial real estate | ||||||||||||||||
| Construction | ||||||||||||||||
| Home equity | ||||||||||||||||
| Commercial business | ||||||||||||||||
| Other consumer | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| For the delinquent loans in our portfolio, we have considered our ability to collect the past due interest, as well as the principal balance of the loan, in order to determine whether specific loans should be placed on non-accrual status. In cases where our evaluations have determined that the principal and interest balances are collectible, we have continued to accrue interest.
As of June 30, 2026, the Company has not initiated formal foreclosure proceedings on any one-to-four family residential owner occupied loans. |
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 6 – Goodwill and Other Intangible, Net
On August 1, 2016, Quaint Oak Insurance Agency, LLC began operations by acquiring the renewal rights to a book of business produced and serviced by an independent insurance agency located in New Britain, Pennsylvania, that provides a broad range of personal and commercial insurance coverage solutions. The Company paid $
Note 7 – Deposits
Deposits consist of the following classifications (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Non-interest bearing checking accounts | $ | $ | ||||||
| Interest bearing checking accounts(1) | ||||||||
| Savings accounts | ||||||||
| Money market accounts | ||||||||
| Certificates of deposit | ||||||||
| Total deposits | $ | $ | ||||||
________________________
| (1) | The Company has identified one major interest bearing checking account deposit customer that accounted for approximately $ |
Note 8 – Borrowings
The following table presents the balance and unamortized issuance costs of the subordinated debt and senior debt at June 30, 2026 (in thousands):
| Principal | Unamortized Debt Issuance Costs | Net | ||||||||||
| 6.5% subordinated notes, due December 31, 2028 | $ | $ | $ | |||||||||
| 11.0% senior notes, due March 1, 2028 | $ | $ | $ | |||||||||
| 11.0% senior notes, due March 1, 2028 | $ | $ | $ | |||||||||
The balance of senior debt, net of unamortized debt issuance costs, was $
The balance of subordinated debt was $
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 9 – Stock Compensation Plans
Employee Stock Ownership Plan
The Company maintains an Employee Stock Ownership Plan (ESOP) for the benefit of employees who meet the eligibility requirements of the plan. The Bank may make cash contributions to the ESOP on a quarterly basis which are allocated to participant accounts on an annual basis.
During the three and six months ended June 30, 2026 and 2025, the Company did not make a discretionary contribution to the ESOP and
Stock Incentive Plans – Share Awards
In May 2018, the shareholders of Quaint Oak Bancorp approved the adoption of the 2018 Stock Incentive Plan (the “2018 Stock Incentive Plan”). The 2018 Stock Incentive Plan approved by shareholders in May 2018 covered a total of
In May 2023, the shareholders of Quaint Oak Bancorp approved the adoption of the 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”). The 2023 Stock Incentive Plan approved by shareholders in May 2023 covered a total of
As of June 30, 2026, a total of
A summary of share award activity under the Company’s 2018 and 2023 Stock Incentive Plans as of June 30, 2026 and changes during the six months ended June 30, 2026 is as follows:
| June 30, 2026 | ||||||||
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Unvested at the beginning of the period | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Unvested at the end of the period | $ | |||||||
Compensation expense on the restricted stock awards is recognized ratably over the five-year vesting period in an amount which is equal to the fair value of the common stock at the date of grant. During the three months ended June 30, 2026 and 2025, the Company recognized approximately $
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 9 – Stock Compensation Plans (Continued)
Stock Incentive Plans – Stock Options
The 2018 Stock Incentive Plan approved by shareholders in May 2018 covered a total of
All incentive stock options issued under the 2018 and 2023 Stock Incentive Plans are intended to comply with the requirements of Section 422 of the Internal Revenue Code. Options will become vested and exercisable over a five-year period and are generally exercisable for a period of ten years after the grant date.
In September 2025,
A summary of option activity under the Company’s 2018 and 2023 Stock Incentive Plans as of June 30, 2026 and changes during the six months ended June 30, 2026 is as follows:
| June 30, 2026 | ||||||||||||
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | ||||||||||
| Outstanding at the beginning of the period | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | ( | ) | 1.9 | |||||||||
| Forfeited | - | |||||||||||
| Outstanding at end of period | $ | |||||||||||
| Exercisable at end of period | $ | |||||||||||
During the three months ended June 30, 2026 and 2025, the Company recognized approximately $
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 10 – Fair Value Measurements and Fair Values of Financial Instruments
Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair values estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments.
Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities and therefore, the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows.
The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing are as follows:
| Level I: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
| Level II: | Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed. |
| Level III: | Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
This hierarchy requires the use of observable market data when available.
The methods of determining the fair value of assets and liabilities presented in this note are consistent with our methodologies disclosed in Note 19 of the Company’s 2025 Annual Report on Form 10-K, as the fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit and non-performance risk. Loans are considered a Level 3 classification.
The following is a discussion of assets and liabilities measured at fair value on a recurring and non-recurring basis and valuation techniques applied:
Investment Securities Available For Sale: The fair value of securities available for sale are determined by using matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.
We may be required from time to time to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets.
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 10 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)
Individually Evaluated Loans: Individually evaluated loans are carried at the lower of cost or the fair value of the collateral for collateral-dependent loans less estimated costs to sell. The use of independent appraisals, discounted cash flow models and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and impaired loans are therefore classified within Level 3 of the fair value hierarchy.
Other Real Estate Owned: Other real estate owned is carried at the lower of the investment in the real estate or the fair value of the real estate less estimated selling costs. The use of independent appraisals and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and therefore other real estate owned is classified within Level 3 of the fair value hierarchy.
The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of June 30, 2026 (in thousands):
|
| ||||||||||||||||
| June 30, 2026 | ||||||||||||||||
| Fair Value Measurements Using: | ||||||||||||||||
| Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
| Recurring fair value measurements: | ||||||||||||||||
| Investment securities available for sale | ||||||||||||||||
| Government National Mortgage Association mortgage-backed securities | $ | $ | $ | $ | ||||||||||||
| Federal National Mortgage Association mortgage- backed securities | ||||||||||||||||
| Total investment securities available for sale | $ | $ | $ | $ | ||||||||||||
| Servicing rights | $ | $ | $ | $ | ||||||||||||
| Total recurring fair value measurements | $ | $ | $ | $ | ||||||||||||
| Nonrecurring fair value measurements: | ||||||||||||||||
| Collateral dependent loans | $ | $ | $ | $ | ||||||||||||
| Other real estate owned | $ | $ | $ | $ | ||||||||||||
| Total nonrecurring fair value measurements | $ | $ | $ | $ |
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
10 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)
The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of December 31, 2025 (in thousands):
| December 31, 2025 | ||||||||||||||||
| Fair Value Measurements Using: | ||||||||||||||||
| Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
| Recurring fair value measurements: | ||||||||||||||||
| Investment securities available for sale | ||||||||||||||||
| Government National Mortgage Association mortgage-backed securities | $ | $ | $ | $ | ||||||||||||
| Federal National Mortgage Association mortgage- backed securities | ||||||||||||||||
| Total investment securities available for sale | $ | $ | $ | $ | ||||||||||||
| Servicing rights | $ | $ | $ | $ | ||||||||||||
| Total recurring fair value measurements | $ | $ | $ | $ | ||||||||||||
| Nonrecurring fair value measurements: | ||||||||||||||||
| Collateral dependent loans | $ | $ | $ | $ | ||||||||||||
| Other real estate owned | $ | $ | $ | $ | ||||||||||||
| Total nonrecurring fair value measurements | $ | $ | $ | $ |
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used Level 3 inputs to determine fair value as of June 30, 2026 (in thousands):
| June 30, 2026 | |||||||||||||||
| Quantitative Information About Level 3 Fair Value Measurements | |||||||||||||||
| Total Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||||||||
| Collateral-dependent loans | $ | Appraisal of collateral (1) | Appraisal adjustments (2) | 8%(8%) | |||||||||||
| Other real estate owned | $ | Appraisal of collateral (1) | Appraisal adjustments (2) | 8%(8%) | |||||||||||
_______________
| (1) | Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are identifiable. |
| (2) | Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. |
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
10 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used Level 3 inputs to determine fair value as of December 31, 2025 (in thousands):
|
| |||||||||||
|
| |||||||||||
| December 31, 2025 | |||||||||||
| Quantitative Information About Level 3 Fair Value Measurements | |||||||||||
| Total Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) | ||||||||
| Collateral-dependent loans | $ | Appraisal of collateral (1) | Appraisal adjustments (2) | 8%(8%) | |||||||
| Other real estate owned | $ | Appraisal of collateral (1) | Appraisal adjustments (2) | 8%(8%) | |||||||
_______________
| (1) | Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are identifiable. |
| (2) | Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. |
The fair values of the Company’s financial instruments that are not required to be measured or reported at fair value were as follows at June 30, 2026 and December 31, 2025 (in thousands):
| Fair Value Measurements at | ||||||||||||||||||||
| June 30, 2026 | ||||||||||||||||||||
| Carrying Amount | Fair Value Estimate | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||
| Financial Assets | ||||||||||||||||||||
| Investment in interest-earning time deposits | $ | $ | $ | $ | $ | |||||||||||||||
| Loans held for sale | ||||||||||||||||||||
| Loans receivable, net | ||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Senior Debt | ||||||||||||||||||||
| Subordinated debt | ||||||||||||||||||||
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 10 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)
| Fair Value Measurements at | ||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| Carrying Amount | Fair Value Estimate | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||
| Financial Assets | ||||||||||||||||||||
| Investment in interest-earning time deposits | $ | $ | $ | $ | $ | |||||||||||||||
| Loans held for sale | ||||||||||||||||||||
| Loans receivable, net | ||||||||||||||||||||
| Individually evaluated loans | ||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Senior debt | ||||||||||||||||||||
| Subordinated debt | ||||||||||||||||||||
For cash and cash equivalents, accrued interest receivable, investment in Federal Home Loan Bank stock, at cost, bank-owned life insurance, accrued interest payable, and advances from borrowers for taxes and insurance, the carrying value is a reasonable estimate of the fair value and are considered Level 1 measurements.
Note 11 – Operating Segments
ASC Topic 820 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Company’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company has applied the aggregation criterion set forth in this codification to the results of its operations. The Company's operations currently consist of two reportable operating segments: Banking and Oakmont Commercial. The Company offers different products and services through its two segments. The accounting policies of the segments are generally the same as those of the consolidated company.
The Banking Segment generates its revenues primarily from its lending, deposit gathering and fee business activities. The profitability of this segment's operations depends primarily on its net interest income after provision for credit losses, which is the difference between interest earned on interest earning assets and interest paid on interest bearing liabilities less provision for credit losses. The provision for credit losses is almost entirely dependent on changes in the Banking Segment's loan portfolio and management’s assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. The profitability of this segment’s operations also depends on the generation of non-interest income which includes fees and commissions generated by Quaint Oak Bank and its wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, and Quaint Oak Insurance Agency, LLC, which are included in the Banking Segment for segment reporting purposes as the operating results are monitored by the Chief Operating Decision Maker collectively. The Banking Segment is also subject to an extensive system of laws and regulations that are intended primarily for the protection of depositors and other customers, federal deposit insurance funds and the banking system as a whole. These laws and regulations govern such areas as capital, permissible activities, allowance for credit losses, loans and investments, and rates of interest that can be charged on loans. For segment reporting purposes, Quaint Oak Bancorp, Inc. is included as part of the Company’s Banking segment.
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 11 – Operating Segments (Continued)
The Oakmont Commercial Segment originates commercial real estate loans which are sold into the secondary market generally along with the loans’ servicing rights. The profitability of this segment’s operations depends primarily on the gains realized from the sale of loans and processing fees. The Oakmont Commercial Segment is also subject to an extensive system of laws and regulations that are intended primarily for the protection of consumers.
The following table presents summary financial information for the reportable segments (in thousands):
| As of or for the Three Months Ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| Quaint Oak Bank(1) | Oakmont Commercial, LLC | Consolidated | Quaint Oak Bank(1) | Oakmont Commercial, LLC | Consolidated | |||||||||||||||||||
| Net Interest Income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Provision for Credit Losses | ||||||||||||||||||||||||
| Net Interest Income after Provision for Credit Losses | ||||||||||||||||||||||||
| Non-Interest Income | ||||||||||||||||||||||||
| Mortgage banking and title abstract fees | ||||||||||||||||||||||||
| Insurance commissions | ||||||||||||||||||||||||
| Other fees and services charges, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Net loan servicing income | ||||||||||||||||||||||||
| Income from bank-owned life insurance | ||||||||||||||||||||||||
| Net gain on sale of loans | ||||||||||||||||||||||||
| Gain on the sale of SBA loans | ||||||||||||||||||||||||
| Total Non-Interest Income | ||||||||||||||||||||||||
| Non-Interest Expense | ||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||
| Directors’ (credit) fees and expenses | ( | ) | ( | ) | ||||||||||||||||||||
| Occupancy and equipment | ||||||||||||||||||||||||
| Data processing | ||||||||||||||||||||||||
| Professional fees | ||||||||||||||||||||||||
| SaaS subscription expense | ||||||||||||||||||||||||
| FDIC deposit insurance assessment | ||||||||||||||||||||||||
| Advertising | ||||||||||||||||||||||||
| Amortization of other intangible | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||
| Total Non-Interest Expense | ||||||||||||||||||||||||
| Pretax Segment (Loss) Profit | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||
| Segment Assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
________________________
| (1) | Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Abstract, Quaint Oak Insurance Agency, and QOB Properties. |
Quaint Oak Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
Note 11 – Operating Segments (Continued)
| As of or for the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| Quaint Oak Bank(1) | Oakmont Commercial, LLC | Consolidated | Quaint Oak Bank(1) | Oakmont Commercial, LLC | Consolidated | |||||||||||||||||||
| Net Interest Income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Provision for Credit Losses | ||||||||||||||||||||||||
| Net Interest Income after Provision for Credit Losses | ||||||||||||||||||||||||
| Non-Interest Income | ||||||||||||||||||||||||
| Mortgage banking and title abstract fees | ||||||||||||||||||||||||
| Insurance commissions | ||||||||||||||||||||||||
| Other fees and services charges, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Net loan servicing income | ||||||||||||||||||||||||
| Income from bank-owned life insurance | ||||||||||||||||||||||||
| Net gain on sale of loans | ||||||||||||||||||||||||
| Gain on the sale of SBA loans | ||||||||||||||||||||||||
| Total Non-Interest Income | ||||||||||||||||||||||||
| Non-Interest Expense | ||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||
| Directors’ fees and expenses | ||||||||||||||||||||||||
| Occupancy and equipment | ||||||||||||||||||||||||
| Data processing | ||||||||||||||||||||||||
| Professional fees | ||||||||||||||||||||||||
| SaaS subscription expense | ||||||||||||||||||||||||
| FDIC deposit insurance assessment | ||||||||||||||||||||||||
| Advertising | ||||||||||||||||||||||||
| Amortization of other intangible | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||
| Total Non-Interest Expense | ||||||||||||||||||||||||
| Pretax Segment (Loss) Profit | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||
| Segment Assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
________________________
| (1) |
Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Abstract, Quaint Oak Insurance Agency, and QOB Properties. |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements Are Subject to Change
This Quarterly Report contains certain forward-looking statements (as defined in the Securities Exchange Act of 1934 and the regulations thereunder). Forward-looking statements are not historical facts but instead represent only the beliefs, expectations or opinions of the Company and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, or words of similar meaning, or future or conditional terms such as “will”, “would”, “should”, “could”, “may”, “likely”, “probably”, or “possibly.” Forward-looking statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks, uncertainties and assumptions, many of which are difficult to predict and generally are beyond the control of and its management, that could cause actual results to differ materially from those expressed in, or implied or projected by, forward-looking statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) economic and competitive conditions which could affect the volume of loan originations, deposit flows and real estate values; (2) the levels of non-interest income and expense and the amount of credit losses; (3) competitive pressure among depository institutions increasing significantly; (4) changes in the interest rate environment causing reduced interest margins; (5) general economic conditions, either nationally or in the markets in which the Company is or will be doing business, being less favorable than expected; (6) political and social unrest, including acts of war or terrorism or (7) legislation or changes in regulatory requirements adversely affecting the business in which the Company is or will be engaged. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
General
The Company was formed in connection with the Bank’s conversion to a stock savings bank completed on July 3, 2007. The Company’s results of operations are dependent primarily on the results of the Bank, which is a wholly owned subsidiary of the Company, along with the Bank’s wholly owned subsidiaries. The Bank’s results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on its loan and investment portfolios and the cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by provisions for credit losses, fee income and other non-interest income and non-interest expense. Non-interest expense principally consists of compensation, directors’ fees and expenses, office occupancy and equipment expense, data processing expense, professional fees, advertising expense, FDIC deposit insurance assessment, and other expenses. Our results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact our financial condition and results of operations.
At June 30, 2026 the Bank has five wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, each a Pennsylvania limited liability company. Quaint Oak Mortgage offers mortgage banking in the Lehigh Valley, Delaware Valley and Philadelphia County regions of Pennsylvania and began operations in February, 2019. Quaint Oak Abstract offers title abstract services primarily in the Lehigh Valley region of Pennsylvania and began operation in July 2009. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC began operations in August 2016 and provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021 and operates as a nationwide specialty commercial real estate financing company.
Critical Accounting Policies
The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. Accordingly, the consolidated financial statements require certain estimates, judgments, and assumptions, which are believed to be reasonable, based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the periods presented. Critical accounting policies comprise those that management believe are the most critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the current period, or in future periods.
The Company’s critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of June 30, 2026 have remained unchanged from the disclosures presented in our Annual Report on Form 10-K.
Comparison of Financial Condition at June 30, 2026 and December 31, 2025
General. The Company’s total assets at June 30, 2026 were $630.3 million, a decrease of $45.5 million, or 6.7%, from $675.9 million at December 31, 2025. This decrease in total assets was primarily due to a $21.3 million, or 34.9%, decrease in loans held for sale, a $19.3 million, or 3.6%, decrease in loans receivable, net of allowance for credit losses, and a $5.3 million, or 9.9%, decrease in cash and cash equivalents.
Cash and Cash Equivalents. Cash and cash equivalents decreased $5.3 million, or 9.9%, from $53.5 million at December 31, 2025 to $48.3 million at June 30, 2026, due to reduced liquidity needs.
Investment in Interest-Earning Time Deposits. Investment in interest-earning time deposits increase $100,000, or 11.0%, from $912,000 at December 31, 2025 to $1.0 million at June 30, 2026 due primarily to a purchase of these securities during the six months ended June 30, 2026.
Investment Securities Available for Sale. Investment securities available for sale decreased $274,000, or 31.1%, from $882,000 at December 31, 2025 to $608,000 at June 30, 2026, due primarily to the principal repayments on these securities during the six months ended June 30, 2026.
Loans Held for Sale. Loans held for sale decreased $21.3 million, or 34.9%, from $61.0 million at December 31, 2025 to $39.7 million at June 30, 2026 as the Bank’s commercial real estate subsidiary, Oakmont Commercial, LLC, originated $28.2 million of commercial real estate loans during the six months ended June 30, 2026 and sold $47.6 million of loans in the secondary market during this same period. The Bank’s mortgage banking subsidiary, Quaint Oak Mortgage, LLC, originated $48.9 million of one-to-four family residential loans during the six months ended June 30, 2026 and sold $49.2 million of loans in the secondary market. During the six months ended June 30, 2026, the Bank originated $16.4 million of SBA loans and sold $16.2 million of SBA loans in the secondary market during the same period. Due to the timing of disbursements, SBA loans may or may not be classified as held for sale at origination. As of December 31, 2025, the Bank reclassified $1.8 million of undisbursed SBA loans out of loans held for sale into the portfolio of loans receivable.
Loans Receivable, Net. Loans receivable, net, decreased $19.3 million, or 3.6%, to $521.4 million at June 30, 2026 from $540.7 million December 31, 2025. The largest decreases within the loan portfolio occurred in commercial business loans, which decreased $12.7 million, or 13.2%, commercial real estate loans, which decreased $6.5 million, or 2.1%, multi-family residential loans, which decreased $4.6 million, or 11.2%, one-to-four family non-owner occupied loans, which decreased $1.6 million, or 5.5%, and home equity loans, which decreased $349,000, or 6.5%. Partially offsetting these decreases were increases in one-to-four family owner occupied loans of $2.0 million, or 4.8%, and construction loans of $4.7 million, or 20.0%.
The following table summarizes the industry concentrations within the multi-family and commercial real estate portfolios:
| June 30, 2026 |
December 31, 2025 |
|||||||
| (in Thousands) |
||||||||
| Real estate rental and leasing |
$ | 111,794 | $ | 126,316 | ||||
| Accommodation and food services |
34,752 | 33,665 | ||||||
| Health care and social assistance |
34,341 | 37,681 | ||||||
| Construction |
28,267 | 28,131 | ||||||
| Manufacturing |
22,186 | 22,404 | ||||||
| Other services (except public administration) |
18,640 | 21,558 | ||||||
| Arts, entertainment, and recreation |
15,594 | 14,354 | ||||||
| Retail trade |
14,457 | 16,340 | ||||||
| Wholesale trade |
13,986 | 14,166 | ||||||
| Administrative and support and waste services |
13,485 | 9,516 | ||||||
| Finance and insurance |
10,570 | 9,106 | ||||||
| Professional, scientific and technical services |
6,908 | 7,297 | ||||||
| Transportation and warehousing |
4,475 | 4,202 | ||||||
| Other |
9,963 | 5,781 | ||||||
| Total |
$ | 339,418 | $ | 350,517 | ||||
The commercial real estate and multi-family portfolios consist of 61% owner occupied commercial real estate loans and 39% non-owner occupied commercial real estate and multi-family loans as of June 30, 2026.
The following table summarizes the non-owner occupied multi-family and commercial real estate portfolios and the percent of total loans receivable, net.
| June 30, 2026 |
December 31, 2025 |
|||||||||||||||
| Balance |
Percent of Total Loans Receivable, net |
Balance |
Percent of Total Loans Receivable, net |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| Real estate rental and leasing |
$ | 100,326 | 19.2 | % | $ | 115,747 | 21.4 | % | ||||||||
| Construction |
10,839 | 2.1 | 11,002 | 2.0 | ||||||||||||
| Finance and insurance |
4,706 | 0.9 | 4,792 | 0.9 | ||||||||||||
| Other services (except public administration) |
3,977 | 0.8 | 4,135 | 0.8 | ||||||||||||
| Arts, entertainment, and recreation |
3,580 | 0.7 | 3,069 | 0.6 | ||||||||||||
| Other |
8,965 | 1.7 | 11,112 | 2.0 | ||||||||||||
| Total |
$ | 132,393 | 25.4 | % | $ | 149,857 | 27.7 | % | ||||||||
The following table summarizes the non-owner occupied multi-family and commercial real estate rental and leasing loan portfolio outstanding balance, total collateral and loan to value (“LTV”) ratio by geographic location:
| June 30, 2026 |
December 31, 2025 |
|||||||||||||||||||||||
| Balance |
Total Collateral |
Weighted Average LTV |
Balance |
Total Collateral |
Weighted Average LTV |
|||||||||||||||||||
| (Dollars in Thousands) |
||||||||||||||||||||||||
| Pennsylvania (1) |
$ | 33,972 | $ | 64,850 | 52.4 | % | $ | 38,515 | $ | 78,601 | 49.0 | % | ||||||||||||
| Philadelphia |
27,031 | 58,553 | 46.2 | 36,598 | 76,095 | 48.1 | ||||||||||||||||||
| Delaware |
14,989 | 32,125 | 46.7 | 15,187 | 32,125 | 47.3 | ||||||||||||||||||
| New Jersey |
8,929 | 18,467 | 48.4 | 9,156 | 19,145 | 47.8 | ||||||||||||||||||
| Ohio |
6,619 | 10,100 | 65.5 | 6,719 | 10,100 | 66.5 | ||||||||||||||||||
| Other |
8,786 | 17,470 | 50.3 | 9,572 | 16,430 | 58.3 | ||||||||||||||||||
| Total |
$ | 100,326 | $ | 201,565 | 49.8 | % | $ | 115,747 | $ | 232,496 | 49.8 | % | ||||||||||||
________________________
| (1) |
Pennsylvania excluding Philadelphia. |
The following table summarizes the non-owner occupied multi-family and commercial real estate construction loan portfolio outstanding balance, total collateral and LTV ratio by geographic location:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Balance |
Total Collateral |
Weighted Average LTV |
Balance |
Total Collateral |
Weighted Average LTV |
|||||||||||||||||||
| (Dollars in Thousands) |
||||||||||||||||||||||||
| Pennsylvania (1) |
$ | 6,255 | $ | 11,567 | 54.1 | % | $ | 6,351 | $ | 11,567 | 54.9 | % | ||||||||||||
| Philadelphia |
4,584 | 9,685 | 47.3 | 4,651 | 9,685 | 48.0 | ||||||||||||||||||
| Total |
$ | 10,839 | $ | 21,252 | 51.0 | % | $ | 11,002 | $ | 21,252 | 51.8 | % | ||||||||||||
________________________
| (1) |
Pennsylvania excluding Philadelphia |
Deposits. Total deposits decreased $46.5 million, or 7.8%, to $550.8 million at June 30, 2026 from $597.3 million at December 31, 2025, due to the change in amortized debt issuance costs. The decrease in deposits was primarily attributable to a decrease of $28.4 million, or 26.8%, in interest-bearing checking accounts, a decrease of $24.4 million, or 6.9%, in certificates of deposit, a decrease of $1.6 million, or 2.4%, in non-interest-bearing checking accounts, and a $183,000, or 26.2%, decrease in savings accounts. These decreases in deposits were partially offset by an increase of $8.1 million, or 11.5%, in money market accounts. Both retail and non-retail interest-bearing checking account balances decreased at June 30, 2026, compared to December 31, 2025, primarily reflecting increased competition for such deposits.
The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was $227.3 million, or 41.3% of total deposits at June 30, 2026.
Senior debt. Senior debt, net of unamortized debt issuance costs, increased $88,000 to $9.7 million at June 30, 2026 from $9.6 million at December 31, 2025, due to the change in unamortized debt issuance costs. The Company entered into a Senior Unsecured Note Purchase Agreement as of February 21, 2025 with certain institutional accredited investors pursuant to which the Company issued an aggregate of $9.75 million in aggregate principal amount of Fixed Rate Unsecured Senior Notes due March 1, 2028 (the “Senior Debt Notes”) in a private placement. The Company issued to an accredited individual investor an additional $250,000 in principal amount of the Senior Debt Notes as of March 4, 2025 for a total of $10.0 million in aggregate principal amount. The Senior Debt Notes bear interest at a fixed annual rate of 11.00%, payable semi-annually in arrears on March 1 and September 1 of each year, beginning September 1, 2025. The maturity date of the Senior Debt Notes is March 1, 2028.
Subordinated debt. Subordinated debt totaled $8.0 million at both June 30, 2026 and December 31, 2025. The $8.0 million of subordinated debt matures on December 31, 2028.
Stockholders’ Equity. Total stockholders’ equity increased $644,000, or 1.2%, to $53.0 million at June 30, 2026 from $52.3 million at December 31, 2025. Contributing to the increase was net income for the six months ended June 30, 2026 of $647,000, amortization of stock awards and options under our stock compensation plans of $151,000, issuance of treasury stock for exercised stock options of $67,000, and the reissuance of treasury stock under the Bank’s 401(k) Plan of $22,000. The increase in stockholders’ equity was partially offset by dividends paid of $210,000, purchase of treasury stock of $31,000, and other comprehensive loss, net of $2,000.
Asset Quality. Non-performing loans at June 30, 2026 totaled $9.8 million, or 1.88%, of total loans receivable, net of allowance for credit losses, consisting of $8.4 million of loans on non-accrual status and $1.4 million of accruing loans 90-days or more delinquent. Non-accrual loans consist of two one-to-four family residential owner occupied loans, 18 commercial real estate loans, and 22 commercial business loans. Included in the 22 commercial business loans is one pool of equipment loans. Accruing loans 90-days or more past due include one commercial real estate loan and two commercial business loans. All non-performing loans are either well-collateralized or adequately reserved for. During the six month period ended June 30, 2026, 10 commercial business loans totaling $392,000 that were previously on non-accrual were charged-off through the allowance for credit losses. Non-performing loans at December 31, 2025 totaled $7.3 million, or 1.36%, of total loans receivable, net of allowance for credit losses, consisting of $5.8 million of loans on non-accrual status and $1.5 million of accruing loans 90-days or more delinquent. Non-accrual loans consisted of two one-to-four family residential owner occupied loans, 14 commercial real estate loans, and 15 commercial business loans. Included in the 15 commercial business loans is one pool of equipment loans. Accruing loans 90-days or more past due included one one-to-four family residential owner occupied loan, one one-to-four family residential non-owner occupied loan, one commercial real estate loan, and one commercial business loan. During the year ended December 31, 2025, one commercial real estate loan and 11 commercial business loans totaling $1.6 million that were previously on non-accrual were charged-off through the allowance for credit losses.
Comparison of Operating Results for the Three Months Ended June 30, 2026 and 2025
General. Net income amounted to $481,000 for the three months ended June 30, 2026, an increase of $209,000, or 76.8%, compared to net income of $272,000 for the three months ended June 30, 2025. The increase in net income over the comparable quarterly period was primarily the result of a decrease in interest expense of $760,000 and an increase in non-interest income of $361,000, partially offset by a decrease in interest and dividend income of $694,000, an increase in non-interest expense of $112,000, a net increase in the provision for credit losses of $63,000, and an increase in the provision for income taxes of $43,000.
Net Interest Income. Net interest income increased $66,000, or 1.5% to $4.6 million for the three months ended June 30, 2026 from $4.5 million for the three months ended June 30, 2025. The increase was driven by a $760,000, or 13.4%, decrease in interest expense, partially offset by a $694,000, or 6.8%, decrease in interest and dividend income.
Interest and Dividend Income. The $694,000, or 6.8%, decrease in interest and dividend income for the three months ended June 30, 2026 was primarily due to a $17.3 million decrease in the average balance of loans receivable, which decreased from $589.4 million for the three months ended June 30, 2025 to $572.1 million for the three months ended June 30, 2026 and had the effect of decreasing interest income by $284,000, and a 203 basis point decrease in the average yield on due from banks – interest earning, which decreased from 4.21% for the three months ended June 30, 2025 to 2.18% for the three months ended June 30, 2026 and had the effect of decreasing interest income $258,000. Also contributing to the decrease in interest income was a 15 basis point decrease in the average yield on loans receivable, which decreased from 6.58% for the three months ended June 30, 2025 to 6.43% for the three months ended June 30, 2026 and had the effect of decreasing interest income $210,000. Partially offsetting the decrease in interest and dividend income was a $14.0 million increase in the average balance of due from banks – interest earning, which increased from $37.7 million for the three months ended June 30, 2025 to $50.8 million for the three months ended June 30, 2026, and had the effect of increasing interest income $147,000.
Interest Expense. The $760,000, or 13.4%, decrease in interest expense for the three months ended June 30, 2026 over the comparable period in 2025 was driven by a $648,000, or 100.0%, decrease in interest expense on Federal Home Loan Bank (“FHLB”) borrowings, which was attributable to a decrease in the average balance of FHLB borrowings which decreased from $56.3 million for the three months ended June 30, 2025, to none for the three months ended June 30, 2026, a $70.6 million decrease in the average balance of money market deposits which decreased from $142.9 million for the three months ended June 30, 2025 to $72.3 million for the three months ended June 30, 2026 and had the effect of decreasing interest expense by $627,000, a 27 basis point decrease in the average rate of certificates of deposit from 4.27% for the three months ended June 30, 2025 to 4.00% for the three months ended June 30, 2026, which had the effect of decreasing interest expense by $227,000, and a 102 basis point decrease in the average rate of money markets from 3.56% for the three months ended June 30, 2025 to 2.54% for the three months ended June 30, 2026, which had the effect of decreasing interest expense by $182,000. These decreases in interest expense were partially offset by a $57.9 million increase in the average balance of business checking accounts, which increased from $10.7 million for the three months ended June 30, 2025, to $67.9 million for the three months ended June 30, 2026 and had the effect of increasing interest expense by $496,000, a $36.3 million increase in the average balance of certificates of deposit which increased from $305.8 million for the three months ended June 30, 2025 to $342.1 million for the three months ended June 30, 2026 and had the effect of increasing interest expense by $387,000. The average interest rate spread decreased from 2.19% for the three months ended June 30, 2025 to 2.14% for the three months ended June 30, 2026 and the net interest margin increased from 2.85% for the three months ended June 30, 2025 to 2.93% for the three months ended June 30, 2026.
Average Balances, Net Interest Income, Yields Earned and Rates Paid. The following table shows for the periods indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. All average balances are based on daily balances.
| Three Months Ended June 30, |
||||||||||||||||||||||||
| 2026 |
2025 |
|||||||||||||||||||||||
| Average Balance |
Interest |
Average Yield/ Rate |
Average Balance |
Interest |
Average Yield/ Rate |
|||||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Due from banks, interest-earning |
$ | 50,819 | $ | 277 | 2.18 | % | $ | 37,731 | $ | 397 | 4.21 | % | ||||||||||||
| Investment in interest-earning time deposits |
996 | 10 | 4.02 | 912 | 26 | 11.40 | ||||||||||||||||||
| Investment securities available for sale |
681 | 10 | 5.87 | 1,366 | 31 | 9.08 | ||||||||||||||||||
| Loans receivable, net (1) (2) |
572,144 | 9,200 | 6.43 | 589,433 | 9,695 | 6.58 | ||||||||||||||||||
| Investment in FHLB stock |
291 | 3 | 4.12 | 2,618 | 45 | 6.88 | ||||||||||||||||||
| Total interest-earning assets |
624,931 | 9,500 | 6.08 | % | 632,060 | 10,194 | 6.45 | % | ||||||||||||||||
| Non-interest-earning assets |
18,525 | 18,772 | ||||||||||||||||||||||
| Total assets |
$ | 643,456 | 650,832 | |||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| Savings accounts |
$ | 547 | $ | - | 0.00 | % | $ | 559 | $ | - | 0.00 | % | ||||||||||||
| Money market accounts |
72,313 | 460 | 2.54 | 142,880 | 1,270 | 3.56 | ||||||||||||||||||
| Checking accounts |
67,875 | 608 | 3.58 | 10,714 | 66 | 2.46 | ||||||||||||||||||
| Certificate of deposit accounts |
342,114 | 3,424 | 4.00 | 305,769 | 3,262 | 4.27 | ||||||||||||||||||
| Total deposits |
482,849 | 4,492 | 3.72 | 459,922 | 4,598 | 4.00 | ||||||||||||||||||
| FHLB borrowings |
- | - | - | 56,308 | 648 | 4.60 | ||||||||||||||||||
| Subordinated debt |
8,000 | 156 | 7.80 | 8,000 | 168 | 8.40 | ||||||||||||||||||
| Senior debt |
9,681 | 281 | 11.61 | 9,506 | 275 | 11.57 | ||||||||||||||||||
| Total interest-bearing liabilities |
500,530 | 4,929 | 3.94 | % | 533,736 | 5,689 | 4.26 | % | ||||||||||||||||
| Non-interest-bearing liabilities |
89,955 | 64,969 | ||||||||||||||||||||||
| Total liabilities |
590,485 | 598,705 | ||||||||||||||||||||||
| Stockholders’ Equity |
52,971 | 52,127 | ||||||||||||||||||||||
| Total liabilities and Stockholders’ Equity |
$ | 643,456 | $ | 650,832 | ||||||||||||||||||||
| Net interest-earning assets |
$ | 124,401 | $ | 98,324 | ||||||||||||||||||||
| Net interest income; average interest rate spread |
$ | 4,571 | 2.14 | % | $ | 4,505 | 2.19 | % | ||||||||||||||||
| Net interest margin (3) |
2.93 | % | 2.85 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
124.85 | % | 118.42 | % | ||||||||||||||||||||
________________________
(1) Includes loans held for sale.
(2) Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for credit losses.
(3) Equals net interest income divided by average interest-earning assets.
Provision for Credit Losses. The $63,000, or 14.4%, net increase in the provision for credit losses for the three months ended June 30, 2026 over the comparable period in 2025 was primarily due to an increase in the balance of individually evaluated loans and their associated reserve during the period.
Non-Interest Income. The $361,000, or 18.5%, increase in non-interest income for the three months ended June 30, 2026 over the comparable period in 2025 was primarily attributable to a $404,000, or 38.6%, increase in net gain on sale of mortgage and Oakmont Commercial loans, a $136,000 increase in loan servicing income, and a $21,000, or 17.6%, increase in other fees and services charges, net. These increases were partially offset by a $97,000, or 19.0%, decrease in gain on sale of SBA loans, an $86,000, or 30.7%, decrease in mortgage banking and title abstract fees, and a $20,000, or 10.2%, decrease in insurance commissions. The increase in loan servicing income reflects the retention of servicing on certain loan sales during the 2026 period.
Non-Interest Expense. The $112,000, or 2.0%, increase in non-interest expense for the three months ended June 30, 2026 over the comparable period in 2025 was primarily due to a $182,000, or 5.0%, increase in salaries and employee benefits expense, a $119,000, or 68.4%, increase in professional fees, a $40,000, or 14.3%, increase in other expense, and a $16,000, or 11.9%, increase in FDIC deposit insurance assessment. These increases in non-interest expense were partially offset by a $119,000, or 27.1%, decrease in data processing expense, a $75,000, or 115.4%, decrease in directors’ fees and expenses, a $39,000, or 9.0% decrease in occupancy and equipment expenses, a $9,000, or 9.0%, decrease in advertising expense, and a $3,000, or 1.2%, decrease in software as a service (“SaaS”) subscription expense. The increase in professional fees during the quarter was primarily due to international correspondent banking compliance related activities as the Bank is continuing to build out this line of business. The decrease in directors’ fees and expenses reflects a one-time adjustment based on a reassessment of the director fee accrual at June 30, 2026.
Provision for Income Tax. The provision for income tax increased $43,000 from $210,000 for the three months ended June 30, 2025 to $253,000 for the three months ended June 30, 2026, primarily due to an increase in pre-tax income.
Comparison of Operating Results for the Six Months Ended June 30, 2026 and 2025
General. Net income amounted to $647,000 for the six months ended June 30, 2026, an increase of $458,000, or 242.3%, compared to net income of $189,000 for the six months ended June 30, 2025. The increase in net income on a comparative six-month basis was primarily the result of a decrease in interest expense of $1.3 million, a net decrease in the provision for credit losses of $282,000, and an increase in non-interest income of $414,000, partially offset by a decrease in interest and dividend income of $725,000, an increase in non-interest expense of $692,000, and an increase in the provision for income taxes of $161,000.
Net Interest Income. Net interest income increased $615,000, or 7.1% to $9.3 million for the six months ended June 30, 2026 from $8.6 million for the six months ended June 30, 2025. The increase was driven by a $1.3 million, or 11.7%, decrease in interest expense, partially offset by a $725,000, or 3.6%, decrease in interest and dividend income.
Interest and Dividend Income. The $725,000, or 3.6%, decrease in interest and dividend income for the six months ended June 30, 2026 over the comparable period in 2025 was primarily due to an $8.6 million decrease in the average balance of loans receivable, which decreased from $589.1 million for the six months ended June 30, 2025 to $580.5 million for the six months ended June 30, 2026, and had the effect of decreasing interest income $280,000, an 73 basis point decrease in the average yield on due from banks – interest earning, which decreased from 4.03% for the six months ended June 30, 2025 to 3.30% for the six months ended June 30, 2026 and had the effect of decreasing interest income $130,000. Also contributing to the decrease in interest and dividend income for the period was a five basis point decrease in the average yield on loans receivable, which decreased from 6.53% for the six months ended June 30, 2025 to 6.48% for the six months ended June 30, 2026 and had the effect of decreasing interest income $121,000, and a $6.9 million decrease in the average balance of due from banks – interest earning, which decreased from $37.1 million for the six months ended June 30, 2025 to $30.2 million for the six months ended June 30, 2026, and had the effect of decreasing interest income $120,000.
Interest Expense. The $1.3 million, or 11.7%, decrease in interest expense for the six months ended June 30, 2026 over the comparable period in 2025 was driven by a $78.4 million decrease in the average balance of money market deposits which decreased from $151.1 million for the six months ended June 30, 2025 to $72.7 million for the six months ended June 30, 2026 and had the effect of decreasing interest expense by $1.4 million, a $1.1 million, or 100.0% decrease in interest on FHLB borrowings, which was attributable to a decrease in the average balance of FHLB borrowings which decreased from $50.7 million for the six months ended June 30, 2025, to none for the six months ended June 30, 2026, a 27 basis point decrease in the average rate of certificates of deposit from 4.24% for the six months ended June 30, 2025 to 3.97% for the six months ended June 30, 2026, which had the effect of decreasing interest expense by $477,000, and a 114 basis point decrease in the average rate of money markets from 3.58% for the six months ended June 30, 2025 to 2.44% for the six months ended June 30, 2026, which had the effect of decreasing interest expense by $416,000. These decreases in interest expense were partially offset by a $54.2 million increase in the average balance of certificates of deposit which increased from $295.3 million for the six months ended June 30, 2025 to $349.6 million for the six months ended June 30, 2026 and had the effect of increasing interest expense by $1.2 million, a $60.2 million increase in the average balance of business checking accounts, which increased from $19.4 million for the six months ended June 30, 2025, to $79.6 million for the six months ended June 30, 2026 and had the effect of increasing interest expense by $1.1 million. The average interest rate spread increased from 2.13% for the six months ended June 30, 2025 to 2.43% for the six months ended June 30, 2026 and the net interest margin increased from 2.74% for the six months ended June 30, 2025 to 3.02% for the six months ended June 30, 2026.
Average Balances, Net Interest Income, Yields Earned and Rates Paid. The following table shows for the periods indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. All average balances are based on daily balances.
| Six Months Ended June 30, |
||||||||||||||||||||||||
| 2026 |
2025 |
|||||||||||||||||||||||
| Average Balance |
Interest |
Average Yield/ Rate |
Average Balance |
Interest |
Average Yield/ Rate |
|||||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Due from banks, interest-earning |
$ | 30,215 | $ | 498 | 3.30 | % | $ | 37,095 | $ | 747 | 4.03 | % | ||||||||||||
| Investment in interest-earning time deposits |
954 | 18 | 3.77 | 912 | 35 | 7.68 | ||||||||||||||||||
| Investment securities available for sale |
754 | 37 | 9.81 | 1,479 | 64 | 8.65 | ||||||||||||||||||
| Loans receivable, net (1) (2) |
580,486 | 18,817 | 6.48 | 589,055 | 19,218 | 6.53 | ||||||||||||||||||
| Investment in FHLB stock |
291 | 25 | 17.18 | 2,458 | 56 | 4.56 | ||||||||||||||||||
| Total interest-earning assets |
612,700 | 19,395 | 6.34 | % | 630,999 | 20,120 | 6.38 | % | ||||||||||||||||
| Non-interest-earning assets |
19,047 | 18,954 | ||||||||||||||||||||||
| Total assets |
$ | 631,747 | $ | 649,953 | ||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| Savings accounts |
$ | 589 | $ | 1 | 0.34 | % | $ | 505 | $ | 1 | 0.40 | % | ||||||||||||
| Money market accounts |
72,690 | 887 | 2.44 | 151,107 | 2,708 | 3.58 | ||||||||||||||||||
| Checking accounts |
79,595 | 1,438 | 3.61 | 19,444 | 354 | 3.64 | ||||||||||||||||||
| Certificate of deposit accounts |
349,555 | 6,938 | 3.97 | 295,337 | 6,265 | 4.24 | ||||||||||||||||||
| Total deposits |
502,429 | 9,264 | 3.69 | 466,393 | 9,328 | 4.00 | ||||||||||||||||||
| FHLB borrowings |
- | - | - | 50,667 | 1,132 | 4.47 | ||||||||||||||||||
| FRB borrowings |
- | - | - | 25 | 1 | 8.00 | ||||||||||||||||||
| Subordinated debt |
8,000 | 309 | 7.73 | 13,271 | 619 | 9.34 | ||||||||||||||||||
| Senior debt |
9,658 | 558 | 11.56 | 9,607 | 391 | 8.14 | ||||||||||||||||||
| Total interest-bearing liabilities |
520,087 | 10,131 | 3.90 | % | 539,963 | 11,471 | 4.25 | % | ||||||||||||||||
| Non-interest-bearing liabilities |
59,192 | 57,679 | ||||||||||||||||||||||
| Total liabilities |
579,279 | 597,642 | ||||||||||||||||||||||
| Stockholders’ Equity |
52,468 | 52,311 | ||||||||||||||||||||||
| Total liabilities and Stockholders’ Equity |
$ | 631,747 | $ | 649,953 | ||||||||||||||||||||
| Net interest-earning assets |
$ | 92,613 | $ | 91,036 | ||||||||||||||||||||
| Net interest income; average interest rate spread |
$ | 9,264 | 2.44 | % | $ | 8,649 | 2.13 | % | ||||||||||||||||
| Net interest margin (3) |
3.02 | % | 2.74 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
117.81 | % | 116.86 | % | ||||||||||||||||||||
________________________
(1) Includes loans held for sale.
(2) Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for credit losses.
(3) Equals net interest income divided by average interest-earning assets.
Provision for Credit Losses. The $282,000, or 32.1%, net decrease in the provision for credit losses for the six months ended June 30, 2026 over the six months ended June 30, 2025 was primarily due to a decrease in charge-offs and a decrease in the commercial and industrial loan balances, during the six months ended June 30, 2026.
Non-Interest Income. The $414,000, or 11.2%, increase in non-interest income for the six months ended June 30, 2026 over the comparable period in 2025 was primarily attributable to a $413,000, or 50.5%, increase in gain on sale of SBA loans, a $336,000, or 16.0%, increase in net gain on sale of mortgage and Oakmont Commercial loans, and a $219,000 increase in loan servicing income. These increases were partially offset by a $396,000, or 455.2%, decrease in other fees and services charges, net, a $141,000, or 33.1%, decrease in mortgage banking and title abstract fees, and a $23,000, or 6.0%, decrease in insurance commissions. Other fees and services charges, net declined primarily due to SBA lending-related items, including a $152,000 write-down of the SBA servicing asset due to a valuation adjustment and the write-off of $199,000 of certain deferred SBA loan origination costs associated with SBA loan sales completed during the period. Additionally, loan servicing income increased, reflecting the retention of servicing on certain loan sales during the 2026 period.
Non-Interest Expense. The $692,000, or 6.2%, increase in non-interest expense for the six months ended June 30, 2026 over the comparable period in 2025 was primarily due to a $531,000, or 7.3%, increase in salaries and employee benefits expense, a $245,000, or 61.7% increase in professional fees, a $98,000, or 20.7%, increase in SaaS subscription expense, a $69,000, or 11.5% increase in other expense, and a $60,000, or 23.4%, increase in FDIC deposit insurance assessment. These increases in non-interest expense were partially offset by a $182,000, or 21.6%, decrease in data processing expense, a $72,000, or 55.4%, decrease in directors’ fees and expenses, a $40,000, or 4.6%, decrease in occupancy and equipment expenses, and a $17,000, or 8.5%, decrease in advertising expense. The increase in salaries and employee benefits expense was primarily due to a $233,000 increase in salaries, and a $240,000 increase in bonus expense due to a voluntary reduction in discretionary incentive compensation driven by lower performance results for the six months ended June 30, 2025. The increase in professional fees during the period was primarily due to international correspondent banking compliance-related activities as the Bank continues to build out this line of business. The increase in SaaS subscription expense reflects the phased implementation and expanded utilization of third-party software solutions supporting compliance, risk management, and operational infrastructure, partially offset by reductions in traditional data processing costs. The decrease in directors’ fees and expenses reflects a one-time adjustment based on a reassessment of the director fee accrual at June 30, 2026.
Provision for Income Tax. The provision for income tax increased $161,000, or 75.9%, from $212,000 for the six months ended June 30, 2025 to $373,000 for the six months ended June 30, 2026 due primarily to an increase in pre-tax income.
Operating Segments
The Company’s operations consist of two reportable operating segments: Banking and Oakmont Commercial. Our Banking Segment generates revenues primarily from its lending, deposit gathering and fee business activities. Our Oakmont Commercial Segment originates commercial real estate loans which are sold into the secondary market generally along with the loans’ servicing rights. The profitability of this segment’s operations depends primarily on the gains realized from the sale of loans, processing fees, and service fees. Detailed segment information appears in Note 11 in the Notes to Unaudited Consolidated Financial Statements.
Our Banking Segment reported a pre-tax segment loss (“PTSL”) for the three months ended June 30, 2026 of $232,000, a $239,000 increase in PTSL from the same period in 2025. This increase in PTSL was primarily due to a $336,000, or 21.6%, decrease in non-interest income, a $63,000, or 14.4%, increase in the provision for credit losses, and a $27,000, or 0.5%, increase in non-interest expense. This increase in PTSL was partially offset by a $244,000, or 5.9%, increase in net interest income. The decrease in non-interest income is primarily attributable to a $145,000, or 22.0%, decrease in the net gain on sale of mortgage loans, a $127,000 decrease in other fees and service charges, net, a $97,000, or 19.0%, decrease in gain on sale of SBA loans, and an $86,000, or 30.7%, decrease in mortgage banking and title abstract fees, partially offset by a $136,000 increase in net loan servicing income. The increase in non-interest expense was primarily due to a $119,000, or 74.8%, increase in professional fees expense, and a $115,000, or 3.4%, increase in salaries and employee benefits expense, partially offset by a $119,000, or 27.1%, decrease in data processing expense and a $75,000, or 115.4%, decrease in directors’ fees and expenses.
Our Oakmont Commercial, LLC Segment reported a pre-tax segment profit (“PTSP”) for the three months ended June 30, 2026 of $966,000, a $491,000, or 103.4%, increase from the same period in 2025. The increase in PTSP was primarily due to a $697,000, or 178.8%, increase in non-interest income, partially offset by a $121,000, or 31.6%, decrease in net interest income and an $85,000, or 28.6%, increase in non-interest expense. The increase in non-interest income was due to a $549,000, or 141.5%, increase in net gain on sale of loans, and a $148,000 increase in other fees and services charges, net. The increase in non-interest expense was primarily due to a $67,000, or 25.0%, increase in salaries and employee benefits expense, and a $14,000, or 200.0%, increase in other non-interest expense.
Our Banking Segment reported a pre-tax segment loss (“PTSL”) for the six months ended June 30, 2026 of $720,000, a $92,000, or 14.6%, increase in PTSL from the same period in 2025. This increase in PTSL was primarily due to a $640,000, or 6.2%, increase in non-interest expense, and a $396,000, or 15.2%, decrease in non-interest income. This increase in PTSL was partially offset by a $662,000, or 8.3%, decrease in net interest income, and a $282,000, or 32.1%, decrease in the provision for credit losses. The increase in non-interest expense was primarily due to a $503,000, or 7.6%, increase in salaries and employee benefits expense, a $98,000, or 20.7%, increase in SaaS subscription expense, a $245,000, or 66.8%, increase in professional fees expense, and a $60,000, or 23.5%, increase in FDIC deposit insurance assessment, partially offset by a $182,000, or 21.6%, decrease in data processing expense, and a $72,000, or 55.3%, decrease in directors’ fees and expense. The decrease in non-interest income is primarily attributable to a $650,000 decrease in other fees and service charges, net, a $220,000, or 22.0%, decrease in the net gain on sale of mortgage loans, and a $141,000, or 33.1%, decrease in mortgage banking and title abstract fees, partially offset by a $413,000, or 50.5%, increase in gain on sale of SBA loans, and a $219,000 increase in net loan servicing fee income.
Our Oakmont Commercial, LLC Segment reported a pre-tax segment profit (“PTSP”) for the six months ended June 30, 2026 of $1.7 million, a $711,000, or 69.1%, increase from the same period in 2025. The increase in PTSP was primarily due to a $810,000, or 73.3%, increase in non-interest income, partially offset by a $52,000, or 7.3%, increase in non-interest expense, and a $47,000, or 7.4%, decrease in net interest income. The increase in non-interest income was due to $556,000, or 50.5%, increase in net gain on sale of loans, and a $254,000 increase in other fees and service charges, net. The increase in non-interest expense was primarily due to a $28,000, or 4.3%, decrease in salaries and employee benefits expense, and a $20,000, or 117.6%, increase in other non-interest expense.
Liquidity and Capital Resources
The Company’s primary sources of funds are deposits, amortization and prepayment of loans and to a lesser extent, loan sales and other funds provided from operations. While scheduled principal and interest payments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Company sets the interest rates on its deposits to maintain a desired level of total deposits. Borrowings may also be used on a short-term basis to compensate for reductions in the availability of funds from other sources and on a longer-term basis for general business purposes. In addition, the Company invests excess funds in short-term interest-earning assets that provide additional liquidity. At June 30, 2026, the Company's cash and cash equivalents amounted to $48.3 million.
The Company uses its liquidity to fund existing and future loan commitments, to fund deposit outflows, to invest in other interest-earning assets and to meet operating expenses. At June 30, 2026, Quaint Oak Bank had outstanding commitments to originate loans of $12.3 million, commitments under unused lines of credit of $42.1 million, and $1.0 million under standby letters of credit.
At June 30, 2026, certificates of deposit scheduled to mature in one year or less totaled $233.9 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case.
In addition to cash flow from loan payments and prepayments and deposits, the Company has significant borrowing capacity available to fund liquidity needs. If the Company requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Pittsburgh (FHLB), which provide an additional source of funds. As of June 30, 2026, we had no outstanding borrowings from the FHLB and had $215.3 million in borrowing capacity. Under terms of the collateral agreement with the FHLB of Pittsburgh, we pledge residential mortgage loans as well as Quaint Oak Bank’s FHLB stock as collateral for such advances. In addition, as of June 30, 2026, Quaint Oak Bank had $23.4 million in borrowing capacity with the Federal Reserve Bank of Philadelphia. We also use brokered deposits as a funding source. As of June 30, 2026, the Company had $85.2 million of brokered deposits, $35.1 million of which were sourced from one brokered interest-bearing checking account deposit relationship.
The Company identified one major interest bearing brokered checking deposit customer that accounted for approximately 6.4% of total deposits at June 30, 2026. The outstanding balance of the major deposit customers’ interest bearing brokered checking account totaled approximately $35.1 million at June 30, 2026. If these deposits were to be withdrawn in whole or in part, replacement of the funds may require us to pay higher interest rates on retail deposits or brokered deposits which would have an adverse effect on our net interest income and net income. The replacement of these deposits with other sources of funding such as borrowings could also increase our overall cost of funds and would negatively impact our results of operations. The Company has significant borrowing capacity available to fund liquidity needs, including borrowing agreements with the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia described above.
Any requirements that we increase our capital ratios or liquidity could require our seeking additional sources of capital through a capital raise that would necessitate issuing additional securities, which could dilute our outstanding shares of our common stock. We may also raise capital through the issuance of preferred stock and senior or subordinated debt, or liquidate certain assets, perhaps on terms that are unfavorable to us or contrary to our business plan.
The Company and Quaint Oak Bank are subject to the regulation and supervision of the Board of Governors of the Federal Reserve System (the “FRB”), the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking and Securities, each of which may impose restrictions on our ability to pay dividends, repurchase shares or incur additional indebtedness. As the subsidiary of a stock saving and loan holding company, Quaint Oak must file a notice with the appropriate Federal Reserve Bank at least 20 days before a proposed declaration of a dividend to the Company. Under applicable banking regulations, Quaint Oak Bank must file an application for FDIC approval of a capital distribution if: the total capital distributions for the calendar year exceed the sum of Quaint Oak Bank’s net income for that year to date plus the retained net income for the preceding two years; Quaint Oak Bank would not be at least adequately capitalized following the distribution; the distribution would violate any applicable statute, regulation, agreement or FDIC-imposed condition; or Quaint Oak Bank is not otherwise eligible for expedited treatment of its filings with the FDIC. The inability to pay dividends from Quaint Oak Bank to the Company could negatively impact our ability to pay dividends to shareholders, pay interest on our debt or engage in stock repurchases. The Company currently is restricted in declaring or paying dividends, engaging in share repurchases or directly or indirectly, incurring, increasing, or guaranteeing any debt, including any interest payments due on subordinated debentures, without the prior written approval of the FRB. To date, the FRB has approved all requests to pay dividends and interest on subordinated debt, however, no assurance can be given that such approvals will be received in the future.
The following table summarizes the Company's primary and secondary sources of liquidity which were available at June 30, 2026 (dollars in thousands).
| June 30, 2026 |
||||
| (Dollars in thousands) |
||||
| Cash and cash equivalents |
$ | 48,262 | ||
| Unpledged investment securities, amortized cost |
608 | |||
| FHLB advance availability |
215,279 | |||
| Federal Reserve discount window availability |
23,371 | |||
| Total primary and secondary sources of available liquidity |
$ | 287,520 | ||
Quaint Oak Bank is required to maintain regulatory capital sufficient to meet tier 1 leverage, common equity tier 1 capital, tier 1 risk-based and total risk-based capital ratios of at least 4.00%, 4.50%, 6.00%, and 8.00%, respectively. At June 30, 2026, Quaint Oak Bank exceeded each of its capital requirements with ratios of 10.91%, 13.60%, 13.60% and 14.85%, respectively. As a small savings and loan holding company eligible for exemption, the Company is not currently subject to any regulatory capital requirements.
Off-Balance Sheet Arrangements
In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used primarily to manage customers' requests for funding and take the form of loan commitments and lines of credit. Our exposure to credit loss from non-performance by the other party to the above-mentioned financial instruments is represented by the contractual amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. In general, we do not require collateral or other security to support financial instruments with off–balance sheet credit risk.
Commitments. At June 30, 2026, we had unfunded commitments under lines of credit of $42.1 million, $12.3 million of commitments to originate loans, and $1.0 million under standby letters of credit. We had no commitments to advance additional amounts pursuant to outstanding lines of credit or undisbursed construction loans.
The ACL for off balance sheet credit exposures is recorded in other liabilities on the Consolidated Balance Sheet. This ACL represents management’s estimate of expected losses in its unfunded loan commitments and other off balance sheet credit exposures, such as letters of credit and credit recourse on sold residential mortgage loans. The balance of off balance sheet credit exposures was $265,000 at June 30, 2026, and $277,000 at December 31, 2025.
Impact of Inflation and Changing Prices
The consolidated financial statements and related financial data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America which generally require the measurement of financial position and operating results in terms of historical dollars, without considering changes in relative purchasing power over time due to inflation. Unlike most industrial companies, virtually all of the Company’s assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact on the Company’s performance than does the effect of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services, since such prices are affected by inflation to a larger extent than interest rates.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of June 30, 2026. Based on their evaluation of the Company’s disclosure controls and procedures, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and regulations are operating in an effective manner.
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the second fiscal quarter of fiscal 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition and operating results of the Company.
ITEM 1A. RISK FACTORS
There have been no material changes in the Risk Factors previously disclosed in Item 1A of our 2025 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Not applicable.
(b) Not applicable.
(c) Purchases of Equity Securities
The Company’s repurchases of its common stock made during the quarter ended June 30, 2026 including stock-for-stock option exercises of outstanding stock options, are set forth in the table below:
| Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) |
||||||||||||
| April 1, 2026 – April 30, 2026 |
- | $ | - | - | 24,375 | |||||||||||
| May 1, 2026 – May 31, 2026 |
1,125 | 17.54 | - | 24,375 | ||||||||||||
| June 1, 2026 – June 30, 2026 |
- | - | - | 24,375 | ||||||||||||
| Total |
1,125 | $ | 17.54 | - | 24,375 | |||||||||||
Notes to this table:
| (1) |
On December 12, 2018, the Board of Directors of Quaint Oak Bancorp approved its fifth share repurchase program which provides for the repurchase of up to 50,000 shares, or approximately 2.5% of the Company’s then issued and outstanding shares of common stock and announced the fifth repurchase program on Form 8-K filed on December 13, 2018. The repurchase program does not have an expiration date. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
| Not applicable.
ITEM 6. EXHIBITS | |
| No. |
Description |
|
| 31.1 |
Rule 13a-14(d) and 15d-14(d) Certification of the Chief Executive Officer. |
|
| 31.2 |
Rule 13a-14(d) and 15d-14(d) Certification of the Chief Financial Officer. |
|
| 32.0 |
Section 1350 Certification. |
|
| 101.INS |
Inline XBRL Instance Document. |
|
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
|
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
| 101.DEF |
Inline XBRL Taxonomy Extension Definitions Linkbase Document. |
|
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
| 104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| By: | /s/Robert T. Strong | |
| Date: August 14, 2026 |
|
Robert T. Strong Chief Executive Officer |
| By: | /s/John J. Augustine | |
| Date: August 14, 2026 |
|
John J. Augustine Executive Vice President and Chief Financial Officer |