Quaint Oak Bancorp, Inc. Announces First Quarter Earnings
Quaint Oak Bancorp, Inc. announced first quarter earnings with a 55.1% increase in net income compared to the same period last year. The company sold its interest in two subsidiary companies for better productivity, reducing losses. There was a significant reduction in loans held for sale, resulting in a realignment of the balance sheet. Non-performing loans increased, but remain manageable. The Board declared a dividend of $0.13 per share for the first quarter. Total assets increased to $775.5 million, with improvements in total deposits and stockholders' equity.
Significant 55.1% increase in net income for the first quarter compared to the same period last year.
Reduction in investment in two subsidiary companies led to better productivity and reduced losses.
Substantial reduction in loans held for sale resulting in a realignment of the balance sheet.
Board declared a dividend of $0.13 per share for the first quarter.
Total assets increased to $775.5 million, showing positive growth.
Non-performing loans increased from 0.25% to 1.28% and Texas Ratio moved from 2.73% to 12.0%.
Interest expense increased by $1.4 million due to rate increases on deposits.
Provision for credit losses increased by $744,000 due to an increase in non-performing loans.
Net loss from discontinued operations increased by $501,000, impacting overall net income.
Increase in interest rates may have a potential effect on commercial office space and businesses.
Southampton, PA, May 06, 2024 (GLOBE NEWSWIRE) -- Quaint Oak Bancorp, Inc. (the “Company”) (OTCQB: QNTO), the holding company for Quaint Oak Bank (the “Bank”), announced today net income for the quarter ended March 31, 2024 of
Robert T. Strong, President and Chief Executive Officer stated, “I am pleased to report that net income for the three months ended March 31, 2024, was
Mr. Strong added, “As previously reported, our intention to reduce investment in two of our subsidiary companies that had become less productive considering the Federal Reserve rate increases, has culminated in the sale of the Bank’s
Mr. Strong continued, “Additionally, a substantial reduction in loans held for sale during the period has provided a significant realignment of the Bank’s balance sheet when compared to the same period of one year ago. Leveraged financing has been reduced by
Mr. Strong commented, “Much has been written concerning the potential effect of the remote working environment on commercial office space along with the anticipated effect that the significant rise in interest rates would have, within such a short timeframe, on businesses. We have experienced minor delinquencies and minimal default in our loan portfolio, however, well within manageable levels. Comparing March 31, 2023 to March 31, 2024, our non-performing loans as a percent of total loans receivable, net has increased from
Mr. Strong concluded, “As a result of the first quarter performance and as recently announced, the Board of Directors declared a dividend for the first quarter of
On March 29, 2024, Quaint Oak Bank sold its
Also on March 29, 2024, the Company discontinued the operations of Quaint Oak Real Estate, LLC (“Quaint Oak Real Estate”), a
Net income amounted to
The
The
The
The
The
The provision for income tax increased
The Company’s total assets at March 31, 2024 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, 2024 consisted of three equipment loans and one pool of equipment loans on non-accrual status in the aggregate amount of
Quaint Oak Bancorp, Inc., a Financial Services Company, 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, and Oakmont Commercial, LLC, a specialty commercial real estate financing company. All companies are multi-state operations.
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; legislative and regulatory changes; 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, 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, | At December 31, | |||||||||||||
2024 | 2023 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 146,321 | $ | 58,006 | ||||||||||
Investment in interest-earning time deposits | 912 | 1,912 | ||||||||||||
Investment securities available for sale at fair value | 2,201 | 2,341 | ||||||||||||
Loans held for sale | 7,052 | 36,448 | ||||||||||||
Loans receivable, net of allowance for credit losses (2024: | 600,578 | 617,701 | ||||||||||||
Accrued interest receivable | 4,231 | 3,502 | ||||||||||||
Investment in Federal Home Loan Bank stock, at cost | 1,191 | 1,474 | ||||||||||||
Bank-owned life insurance | 4,357 | 4,329 | ||||||||||||
Premises and equipment, net | 2,861 | 2,656 | ||||||||||||
Goodwill | 515 | 515 | ||||||||||||
Other intangible, net of accumulated amortization | 113 | 125 | ||||||||||||
Prepaid expenses and other assets | 5,172 | 5,134 | ||||||||||||
Total Assets | $ | 775,504 | $ | 734,143 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||
Liabilities | ||||||||||||||
Deposits | ||||||||||||||
Non-interest bearing | $ | 112,791 | $ | 92,215 | ||||||||||
Interest-bearing | 560,583 | 539,484 | ||||||||||||
Total deposits | 673,374 | 631,699 | ||||||||||||
Federal Home Loan Bank long-term borrowings | 22,955 | 29,022 | ||||||||||||
Subordinated debt | 22,000 | 21,957 | ||||||||||||
Accrued interest payable | 627 | 541 | ||||||||||||
Advances from borrowers for taxes and insurance | 3,161 | 3,730 | ||||||||||||
Accrued expenses and other liabilities | 3,243 | 2,438 | ||||||||||||
Total Liabilities | 725,360 | 689,387 | ||||||||||||
Total Quaint Oak Bancorp, Inc. Stockholder's Equity | 50,144 | 44,756 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 775,504 | $ | 734,143 |
At December 31, | |||||
2023 | |||||
(Unaudited) | |||||
Assets from Discontinued Operations | |||||
Cash and cash equivalents | $ | 4,121 | |||
Loans held for sale | 23,932 | ||||
Premises and equipment, net | 277 | ||||
Goodwill | 2,058 | ||||
Prepaid expenses and other assets | 3,939 | ||||
Total Assets from Discontinued Operations | $ | 34,327 | |||
Liabilities and Stockholders’ Equity from Discontinued Operations | |||||
Liabilities from Discontinued Operations | |||||
Other short-term borrowings | $ | 19,901 | |||
Accrued interest payable | 565 | ||||
Accrued expenses and other liabilities | 7,052 | ||||
Total Liabilities from Discontinued Operations | 27,158 | ||||
Total Stockholders’ Equity from Discontinued Operations | 6,809 | ||||
Total Liabilities and Stockholders' Equity from Discontinued Operations | $ | 34,327 |
QUAINT OAK BANCORP, INC.
Consolidated Statements of Income
(In Thousands, except share data)
For the Three | ||||||||
Months Ended | ||||||||
March 31, | ||||||||
2024 | 2023 | |||||||
(Unaudited) | ||||||||
Interest and Dividend Income | ||||||||
Interest on loans, including fees | $ | 11,232 | $ | 10,685 | ||||
Interest and dividends on time deposits, investment securities, interest- | ||||||||
bearing deposits with others, and Federal Home Loan Bank stock | 890 | 224 | ||||||
Total Interest and Dividend Income | 12,122 | 10,909 | ||||||
Interest Expense | ||||||||
Interest on deposits | 5,986 | 3,510 | ||||||
Interest on Federal Home Loan Bank short-term borrowings | - | 1,300 | ||||||
Interest on Federal Home Loan Bank long-term borrowings | 242 | 277 | ||||||
Interest on Federal Reserve Bank short-term borrowings | - | 10 | ||||||
Interest on subordinated debt | 484 | 216 | ||||||
Total Interest Expense | 6,712 | 5,313 | ||||||
Net Interest Income | 5,410 | 5,596 | ||||||
Provision for Credit Losses - Loans | 1,084 | 211 | ||||||
Provision for Credit Losses - Unfunded Commitments | 52 | 181 | ||||||
Net Interest Income after Provision for Credit Losses | 4,274 | 5,204 | ||||||
Non-Interest Income | ||||||||
Mortgage banking, equipment lending and title abstract fees | 206 | 137 | ||||||
Real estate sales commissions, net | 4 | 24 | ||||||
Insurance commissions | 152 | 136 | ||||||
Other fees and services charges | 227 | 98 | ||||||
Net loan servicing income | 2 | 143 | ||||||
Income from bank-owned life insurance | 28 | 24 | ||||||
Gain on sale of Oakmont Capital Holdings, LLC | 1,378 | - | ||||||
Net gain on sale of loans | 935 | 391 | ||||||
Gain on the sale of SBA loans | 28 | 50 | ||||||
Total Non-Interest Income | 2,960 | 1,003 |
Non-Interest Expense | ||||||||
Salaries and employee benefits | 3,663 | 3,576 | ||||||
Directors' fees and expenses | 51 | 105 | ||||||
Occupancy and equipment | 250 | 342 | ||||||
Data processing | 263 | 217 | ||||||
Professional fees | 141 | 148 | ||||||
FDIC deposit insurance assessment | 173 | 232 | ||||||
Advertising | 86 | 83 | ||||||
Amortization of other intangible | 12 | 12 | ||||||
Other | 486 | 593 | ||||||
Total Non-Interest Expense | 5,125 | 5,308 | ||||||
Income from continuing operations before income taxes | $ | 2,109 | $ | 899 | ||||
Income Taxes | 650 | 251 | ||||||
Net Income from continuing operations | $ | 1,459 | $ | 648 | ||||
Loss from discontinued operations | $ | (814 | ) | $ | (118 | ) | ||
Income tax benefit from discontinued operations | (228 | ) | (33 | ) | ||||
Net loss from discontinued operations | (586 | ) | (85 | ) | ||||
Net Income | $ | 873 | $ | 563 |
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
(Unaudited) | ||||||||
Per Common Share Data: | ||||||||
Earnings per share from continuing operations – basic | $ | 0.60 | $ | 0.30 | ||||
Earnings per share from discontinued operations – basic | $ | (0.24 | ) | $ | (0.04 | ) | ||
Earnings per share, net – basic | $ | 0.36 | $ | 0.26 | ||||
Average shares outstanding – basic | 2,450,814 | 2,182,597 | ||||||
Earnings per share from continuing operations – diluted | $ | 0.60 | $ | 0.29 | ||||
Earnings per share from discontinued operations – diluted | $ | (0.24 | ) | $ | (0.04 | ) | ||
Earnings per share, net – diluted | $ | 0.36 | $ | 0.25 | ||||
Average shares outstanding - diluted | 2,450,814 | 2,272,530 | ||||||
Book value per share, end of period | $ | 20.84 | $ | 20.66 | ||||
Shares outstanding, end of period | 2,407,048 | 2,192,432 |
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Selected Operating Ratios: | (Unaudited) | |||||||
Average yield on interest-earning assets | 6.63 | % | 5.65 | % | ||||
Average rate on interest-bearing liabilities | 4.57 | % | 3.35 | % | ||||
Average interest rate spread | 2.06 | % | 2.30 | % | ||||
Net interest margin | 2.96 | % | 2.90 | % | ||||
Average interest-earning assets to average interest-bearing liabilities | 124.57 | % | 122.00 | % | ||||
Efficiency ratio | 67.82 | % | 72.55 | % | ||||
Asset Quality Ratios (1):
Non-performing loans as a percent of total loans receivable, net | 1.28 | % | 0.25 | % | ||||
Non-performing assets as a percent of total assets | 1.00 | % | 0.19 | % | ||||
Allowance for credit losses as a percent of non-performing loans | 97.24 | % | 485.70 | % | ||||
Allowance for credit losses as a percent of total loans receivable, net | 1.23 | % | 1.20 | % | ||||
Texas Ratio (2) | 12.0 | % | 2.73 | % |
(1) Asset quality ratios are end of period ratios.
(2) Total non-performing assets divided by tangible common equity plus the allowance for credit losses.
Three Months Ended March 31, 2023 | ||||
(Unaudited) | ||||
Selected Operating Ratios from Discontinued Operations: | ||||
Average yield on interest-earning assets | (0.12 | )% | ||
Average rate on interest-bearing liabilities | 0.07 | % | ||
Average interest rate spread | (0.19 | )% | ||
Net interest margin | (0.18 | )% | ||
Average interest-earning assets to average interest-bearing liabilities | (0.31 | )% | ||
Efficiency ratio | 4.21 | % |
Asset Quality Ratios from Discontinued Operations (1):
Non-performing loans as a percent of total loans receivable, net | 0.00 | % | ||
Non-performing assets as a percent of total assets | 0.00 | % | ||
Allowance for credit losses as a percent of non-performing loans | 0.00 | % | ||
Allowance for credit losses as a percent of total loans receivable, net | 0.00 | % | ||
Texas Ratio (2) | 0.00 | % |
(1) Asset quality ratios are end of period ratios.
(2) Total non-performing assets divided by tangible common equity plus the allowance for credit losses.
FAQ
What was Quaint Oak Bancorp's net income for the quarter ended March 31, 2024?
What was the increase in net income compared to the same period in 2023?
What was the dividend declared by the Board for the first quarter?
How did the total assets of Quaint Oak Bancorp change from December 31, 2023, to March 31, 2024?