Quaint Oak Bancorp, Inc. Announces First Quarter Earnings
Quaint Oak Bancorp, Inc. (OTCQB: QNTO) reported a net income of $2.2 million for Q1 2022, marking a 118.3% increase from $1.0 million in Q1 2021. Earnings per share rose to $1.12 basic and $1.05 diluted. Key contributors to this growth included a $2.1 million increase in net interest income and a $2.5 million rise in gross non-interest income. The net interest margin improved to 4.15% from 2.78%, driven by higher loan volumes and yields. Additionally, stockholders’ equity increased by $3.1 million, or 8.3%.
- Net income increased by $1.2 million or 118.3% year-over-year.
- Net interest income rose by $2.1 million indicating strong loan activity.
- Increase in gross non-interest income by $2.5 million primarily from loans held for sale.
- Net interest margin improved to 4.15% from 2.78% year-over-year.
- Stockholders’ equity increased by $3.1 million or 8.3%.
- Non-interest expense increased by $1.5 million, primarily due to higher salaries and employee benefits.
- Provision for loan losses rose by $425,000 or 167.3% due to economic conditions.
Southampton, PA, April 28, 2022 (GLOBE NEWSWIRE) -- Southampton, PA – Quaint Oak Bancorp, Inc. (the “Company”) (OTCQB: QNTO), the holding company for Quaint Oak Bank (the “Bank”), announced today that net income for the quarter ended March 31, 2022 was
Robert T. Strong, President and Chief Executive Officer stated, “It is my pleasure to present our earnings release for the first quarter of 2022. Our net income for the quarter ended March 31, 2022, was
Mr. Strong added, “Quarter over quarter, increases in average loan volume and loan yields, combined with lower interest rates on deposits contributed to the improvement of our net interest margin to
Mr. Strong continued, “During 2021, the Bank invested in a national equipment lending company and organized a new subsidiary company focused on national commercial real estate lending. As both companies expand into 2022, the current strategic focus of the Company looks to increase the potential collaboration of the Bank with outside Fintech companies. This avenue potentially offers increased deposit funding as the Bank provides “Banking as a service” to these companies. It also offers expansion opportunities that otherwise would not fit within our current size and structure. Needless to say, this potential may offer growth opportunities otherwise not available in a more traditional banking environment.”
Mr. Strong commented, “As we move forward with the expansion of our continually diversified financial services Company, we may expect that the future offers challenges as well. We have accordingly, invested in platform upgrades, realignment of service areas and expansion of well-suited Team Members to meet these challenges. We intend to continue the reinvestment in our Company in order to maintain a competitive edge as we move into the future of banking.”
Mr. Strong concluded, “We are very pleased to have increased the dividend rate by
As it has since the start of the COVID-19 pandemic, the Company continues to assess the effects of the pandemic on its employees, customers and the communities we serve. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted. The CARES Act contains many provisions related to banking, lending, mortgage forbearance and taxation. Since March 2020, the Company has continued to work diligently to help support its existing and new customers through the SBA Paycheck Protection Program (“PPP”), loan modifications, loan deferrals and fee waivers. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) became law. The Economic Aid Act opened a new PPP loan period for first loans and implemented a second loan draw for certain PPP borrowers, each through May 31, 2021. Under the first round, the Company funded 854 PPP loans totaling
On January 4, 2021, Quaint Oak Bank, the wholly-owned subsidiary of Quaint Oak Bancorp, Inc., invested
Net income amounted to
The
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The provision for income tax increased
The Company’s total assets at March 31, 2022 were
Loans held for sale decreased
Total deposits increased
Total Federal Home Loan Bank (FHLB) borrowings decreased
Total stockholders’ equity increased
Non-performing loans at March 31, 2022 consisted of one loan on non-accrual status in the amount of
Quaint Oak Bancorp, Inc. is the parent company for the Quaint Oak Family of Companies. Quaint Oak Bank, a Pennsylvania-chartered stock savings bank and wholly-owned subsidiary of the Company, is headquartered in Southampton, Pennsylvania and conducts business through three regional offices located in the Delaware Valley, Lehigh Valley and Philadelphia markets. Quaint Oak Bank’s subsidiary companies include Quaint Oak Abstract, LLC, Quaint Oak Insurance Agency, LLC, Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC, and Oakmont Commercial, LLC. Oakmont Commercial, LLC was formed in October 2021 and operates as a multi-state specialty commercial real estate financing company. These subsidiary companies conduct business from numerous locations within the Bank’s market area. The Bank holds a majority equity position in Oakmont Capital Holdings, LLC, a multi-state equipment finance company based in West Chester, Pennsylvania with a second significant facility located in Albany, Minnesota. Oakmont’s first quarter results are incorporated in the financial statements below.
Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Factors which could result in material variations include, but are not limited to, changes in interest rates which could affect net interest margins and net interest income, competitive factors which could affect net interest income and noninterest income, changes in demand for loans, deposits and other financial services in the Company's market area; changes in asset quality, general economic conditions as well as other factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. 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.
In addition to factors previously disclosed in the reports filed by the Company with the Securities and Exchange Commission and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations; general economic conditions; the scope and duration of the COVID-19 pandemic; the effects of the COVID-19 pandemic, including on the Company’s credit quality and operations as well as its impact on general economic conditions; legislative and regulatory changes including actions taken by governmental authorities in response to the COVID-19 pandemic; monetary and fiscal policies of the federal government; changes in tax policies, rates and regulations of federal, state and local tax authorities including the effects of the Tax Reform Act; changes in interest rates, deposit flows, the cost of funds, demand for loan products and the demand for financial services, in each case as may be affected by the COVID-19 pandemic, competition, changes in the quality or composition of the Company’s loan, investment and mortgage-backed securities portfolios; geographic concentration of the Company’s business; fluctuations in real estate values; the adequacy of loan loss reserves; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and fees.
QUAINT OAK BANCORP, INC.
Consolidated Balance Sheets
(In Thousands)
At March 31, 2022 | At December 31, 2021 | |||||||||||
(Unaudited) | (Unaudited) | |||||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 44,014 | $ | 10,705 | ||||||||
Investment in interest-earning time deposits | 6,961 | 7,924 | ||||||||||
Investment securities available for sale at fair value | 3,774 | 4,033 | ||||||||||
Loans held for sale | 56,867 | 107,823 | ||||||||||
Loans receivable, net of allowance for loan losses (2022: | 437,307 | 403,966 | ||||||||||
Accrued interest receivable | 2,776 | 3,139 | ||||||||||
Investment in Federal Home Loan Bank stock, at cost | 3,098 | 2,178 | ||||||||||
Bank-owned life insurance | 4,158 | 4,137 | ||||||||||
Premises and equipment, net | 2,703 | 2,653 | ||||||||||
Goodwill | 2,573 | 2,573 | ||||||||||
Other intangible, net of accumulated amortization | 210 | 222 | ||||||||||
Prepaid expenses and other assets | 3,694 | 4,762 | ||||||||||
$ | 568,135 | $ | 554,115 | |||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Liabilities | ||||||||||||
Deposits | ||||||||||||
Non-interest bearing | $ | 76,309 | $ | 64,731 | ||||||||
Interest-bearing | 382,326 | 382,435 | ||||||||||
Total deposits | 458,635 | 447,166 | ||||||||||
Federal Home Loan Bank advances | 46,193 | 49,193 | ||||||||||
Federal Reserve Bank advances | 3,349 | 3,895 | ||||||||||
Subordinated debt | 7,941 | 7,933 | ||||||||||
Other short-term borrowings | 916 | - | ||||||||||
Accrued interest payable | 298 | 174 | ||||||||||
Advances from borrowers for taxes and insurance | 2,497 | 2,856 | ||||||||||
Accrued expenses and other liabilities | 8,342 | 5,989 | ||||||||||
Total Liabilities | 528,171 | 517,206 | ||||||||||
Total Quaint Oak Bancorp, Inc. Stockholders’ Equity | 36,945 | 34,789 | ||||||||||
Noncontrolling Interest | 3,019 | 2,120 | ||||||||||
Total Stockholders’ Equity | 39,964 | 36,909 | ||||||||||
Total Liabilities and Stockholders’ Equity | $ | 568,135 | $ | 554,115 |
QUAINT OAK BANCORP, INC.
Consolidated Statements of Income
(In Thousands, except share data)
For the Three Months Ended March 31, | |||||||
2022 | 2021 | ||||||
(Unaudited) | |||||||
Interest Income | |||||||
Interest on loans, including fees | $ | 6,570 | $ | 4,743 | |||
Interest and dividends on time deposits, investment securities, interest-bearing deposits | |||||||
with others, and Federal Home Loan Bank stock | 73 | 146 | |||||
Total Interest Income | 6,643 | 4,889 | |||||
Interest Expense | |||||||
Interest on deposits | 620 | 876 | |||||
Interest on Federal Home Loan Bank short-term borrowings | 22 | 6 | |||||
Interest on Federal Home Loan Bank long-term borrowings | 112 | 139 | |||||
Interest on Federal Reserve Bank long-term borrowings | 3 | 40 | |||||
Interest on subordinated debt | 130 | 130 | |||||
Interest on other short-term borrowings | 9 | 70 | |||||
Total Interest Expense | 896 | 1,261 | |||||
Net Interest Income | 5,747 | 3,628 | |||||
Provision for Loan Losses | 679 | 254 | |||||
Net Interest Income after Provision for Loan Losses | 5,068 | 3,374 | |||||
Non-Interest Income | |||||||
Mortgage banking, equipment lending and title abstract fees | 637 | 531 | |||||
Real estate sales commissions, net | 61 | 31 | |||||
Insurance commissions | 116 | 107 | |||||
Other fees and services charges | 171 | 345 | |||||
Income from bank-owned life insurance | 21 | 19 | |||||
Net gain on loans held for sale | 4,101 | 1,215 | |||||
Gain on the sale of SBA loans | 133 | 201 | |||||
Gain on the sale of investment securities available for sale | - | 317 | |||||
Total Non-Interest Income | 5,240 | 2,766 | |||||
Non-Interest Expense | |||||||
Salaries and employee benefits | 4,591 | 3,400 | |||||
Directors' fees and expenses | 71 | 68 | |||||
Occupancy and equipment | 420 | 377 | |||||
Data processing | 197 | 205 | |||||
Professional fees | 184 | 163 | |||||
FDIC deposit insurance assessment | 116 | 51 | |||||
Other real estate owned expenses | - | 9 | |||||
Advertising | 208 | 105 | |||||
Amortization of other intangible | 12 | 12 | |||||
Other | 384 | 329 | |||||
Total Non-Interest Expense | 6,183 | 4,719 | |||||
Income before Income Taxes | $ | 4,125 | $ | 1,421 | |||
Income Taxes | 861 | 424 | |||||
Net Income | $ | 3,264 | $ | 997 | |||
Net Income (Loss) Attributable to Noncontrolling Interest | $ | 1,016 | $ | (33 | ) | ||
Net Income Attributable to Quaint Oak Bancorp, Inc. | $ | 2,248 | $ | 1,030 | |||
Per Common Share Data: | |||||||
Earnings per share – basic | $ | 1.12 | $ | 0.52 | |||
Average shares outstanding – basic | 2,013,638 | 1,980,007 | |||||
Earnings per share – diluted | $ | 1.05 | $ | 0.50 | |||
Average shares outstanding - diluted | 2,137,122 | 2,066,411 | |||||
Book value per share, end of period | $ | 18.32 | $ | 14.90 | |||
Shares outstanding, end of period | 2,016,517 | 1,989,483 |
Three Months Ended March 31, | |||||||
2022 | 2021 | ||||||
Selected Operating Ratios: | (Unaudited) | ||||||
Average yield on interest-earning assets | 4.79 | % | |||||
Average rate on interest-bearing liabilities | 0.79 | % | |||||
Average interest rate spread | 4.00 | % | |||||
Net interest margin | 4.15 | % | |||||
Average interest-earning assets to average interest-bearing liabilities | 122.17 | % | |||||
Efficiency ratio | 59.97 | % | |||||
Asset Quality Ratios (1): | |||||||
Non-performing loans as a percent of total loans receivable, net | 0.40 | % | 0.05 % | ||||
Non-performing assets as a percent of total assets | 0.30 | % | 0.10 % | ||||
Allowance for loan losses as a percent of non-performing loans | 343.08 | % | 1,521.50 % | ||||
Allowance for loan losses as a percent of total loans receivable | 1.34 | % | 0.78 % | ||||
Texas Ratio (2) | 3.45 | % | 1.62 % |
(1) Asset quality ratios are end of period ratios.
(2) Total non-performing assets divided by tangible common equity plus the allowance for loan losses.
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