Quaint Oak Bancorp, Inc. (the "Company") (OTCBB:QNTO), the holding
company for Quaint Oak Bank (the "Bank"), announced today that net
income for the quarter ended March 31, 2010 was $153,000, or $0.14
per share, basic and diluted, compared to $137,000 or $0.12 per
share, basic and diluted, for the same period in 2009.
Robert T. Strong, President and Chief Executive Officer, stated,
"I am pleased to report that net income for the first quarter of
2010 increased 11.7% over the same quarter one year ago. We
improved our quarterly net income despite the continued
recessionary climate. It is rewarding to note that contributing to
the increased earnings was a $51,000 increase in non-interest
income generated by our new subsidiary companies. Our cost of funds
has continued to decrease providing improved net interest
margins. This combination has provided our highest earning
quarter since our initial public offering in July 2007."
Mr. Strong continued, "As a result, our Board of Directors has
approved an increased dividend payout to our shareholders. We
have been pleased to maintain the payment of dividends throughout
this challenging period and are proud to have achieved the ability
to improve shareholder participation."
Mr. Strong added, "Historically high unemployment combined with
a soft real estate market has been a significant factor in the
ability to originate new loans and the timely payment of existing
loans. In addition, business opportunities were impacted by
reduced temporary holiday employment in the first quarter of the
year and weather conditions locally that were unusually severe this
winter. As a result, our nonperforming loans when compared to total
loans have increased from 1.27% at year end 2009 to 3.35% as of
March 31, 2010. As always, we are working diligently with
those loan customers who may be experiencing financial hardship;
however, as the recessionary period lengthens it becomes
increasingly difficult for affected customers to maintain adequate
cash flow levels. As a result we must pursue more stringent
action. We will continue to take timely action and provide
adequate reserves if and as the marketplace requires for this class
of accounts."
Mr. Strong concluded, "We will continue to work for improved but
prudent loan growth and continued increases in earnings. As
always, our current and continued focus remains on long term
profitability, payment of dividends and an active stock repurchase
program. This focus continues to reflect the Company's strong
commitment to shareholder value."
Net income amounted to $153,000 for the three months ended March
31, 2010, an increase of $16,000, or 11.7%, compared to net income
of $137,000 for three months ended March 31, 2009. The
increase in net income on a comparative quarterly basis was
primarily the result of the increases in net interest income of
$89,000 and non-interest income of $51,000, and a decrease in the
provision for loan losses of $33,000, which were offset by
increases in non-interest expense of $149,000 and the provision for
income taxes of $8,000.
The $89,000, or 12.2%, increase in net interest income for the
three months ended March 31, 2010 over the three months ended March
31, 2009 was driven by a $138,000, or 22.0%, decrease in interest
expense, offset by a $49,000, or 3.6%, decrease in interest income.
The $138,000 decrease in interest expense was primarily
attributable to a 95 basis point decrease in the overall cost of
interest-bearing liabilities to 2.55% for the three months ended
March 31, 2010 from 3.50% for the three months ended March 31, 2009
which resulted in a decrease of $177,000 of interest
expense. This decrease in interest expense due to rate was
offset by a $5.1 million increase in average interest-bearing
liabilities, which had the effect of increasing interest expense by
$39,000. The $49,000 decrease in interest income resulted
primarily from a 44 basis point decrease in the yield on interest
earning assets to 5.80% for the three months ended March 31, 2010
from 6.24% for the three months ended March 31, 2009 which resulted
in a $78,000 decrease in interest income. This decrease in
interest income due to rate was offset by a $3.2 million increase
in average interest-earning assets, which had the effect of
increasing interest income by $29,000. The average interest
rate spread increased from 2.74% for the three months ended March
31, 2009, to 3.25% for the same period in 2010 while the net
interest margin increased from 3.36% for the three months ended
March 31, 2009, to 3.63%, for the same period in 2010.
The $51,000, or 255.0%, increase in non-interest income for the
three months ended March 31, 2010 over the comparable period in
2009 was primarily attributable to the fees generated by Quaint Oak
Bank's mortgage banking, title abstract and real estate sales
subsidiaries which began operation in July of 2009.
The $149,000, or 32.3%, increase in non-interest expense for the
three months ended March 31, 2010 compared to the same period
in 2009 was primarily attributable to a $91,000 increase in
salaries and employee benefits expense, a $22,000 increase in
occupancy and equipment expense, a $20,000 increase in FDIC deposit
insurance assessments, an $8,000 increase in expenses related to
other real estate owned, and a $34,000 increase in other
expenses. Offsetting these increases was an $18,000 decrease
in directors' fees and expenses and an $8,000 decrease in
professional fees. The increase in salaries and employee
benefits expense on a quarter-over-quarter basis was primarily
attributable to increased staff as the Company expanded its
operations. The increase in other expenses was due primarily
to expenses related to the new subsidiaries.
The Company's total assets at March 31, 2010 were $95.8 million,
an increase of $1.8 million, or 1.9%, from $93.9 million at
December 31, 2009. This increase was primarily due to growth
in cash and cash equivalents of $1.5 million, loans receivable, net
of the allowance for loan losses, of $635,000 and investment
securities available for sale of $509,000. Offsetting these
increases were principal payments from mortgage-backed securities
held to maturity of $598,000 and redemptions of investments in
interest-earning time deposits of $235,000. Asset growth for
the three months ended March 31, 2010 was funded by a $2.9 million
increase in deposits.
Total interest-bearing deposits increased $2.9 million, or 4.3%,
to $71.2 million at March 31, 2010 from $68.3 million at December
31, 2009. This increase was attributable to increases of $2.9
million in certificates of deposit, $125,000 in statement savings
accounts and $12,000 in passbook savings accounts, offset by a
decrease of $95,000 in eSavings accounts. The increase in
deposits was primarily due to the competitive interest rates
offered by the Bank and investors seeking the safety of insured
bank deposits.
Total stockholders' equity decreased $837,000 to $16.5 million
at March 31, 2010 from $17.4 million at December 31,
2009. Contributing to the decrease was the purchase of 109,700
shares of the Company's stock in the open-market as part of the
Company's stock repurchase program, as well as other private
transactions, for an aggregate purchase price of $1.0 million, and
dividends paid of $33,000. These decreases were offset by
$153,000 of net income for the three months ended March 31, 2010,
$29,000 amortization of stock awards and options under our stock
compensation plans, $18,000 related to common stock earned by
participants in the employee stock ownership plan, and $3,000 of
accumulated other comprehensive income.
Non-performing loans amounted to $2.5 million or 3.35% of net
loans receivable at March 31, 2010, consisting of nineteen loans,
nine of which are on non-accrual status and ten of which are 90
days or more past due and accruing interest. This compares to
eleven non-performing loans totaling $925,000, or 1.27% of net
loans receivable at December 31, 2009. The non-performing
loans at March 31, 2010 include nine one-to-four family non-owner
occupied residential loans, four home equity loans, three
one-to-four family owner occupied residential loans and three
commercial real estate loans and all are generally
well-collateralized or adequately reserved for. Management
does not anticipate any significant losses on these
loans. During the quarter ended March 31, 2010, nine loans
were placed on non-accrual status resulting in the reversal of
$35,000 of previously accrued interest income. Not included in
non-performing loans are performing troubled debt restructurings
which totaled $1.2 million at March 31, 2010 compared to $1.5
million at December 31, 2009. The allowance for loan losses as
a percent of total loans receivable was 1.16% at March 31, 2010 and
1.14% at December 31, 2009. Other real estate owned was
$938,000 at March 31, 2010 compared to $913,000 at December 31,
2009. Non-performing assets amounted to $3.4 million, or 3.52%
of total assets at March 31, 2010 compared to $1.8 million, or
1.96% of total assets at December 31, 2009.
Quaint Oak Bancorp, Inc. is the holding company for Quaint Oak
Bank. Quaint Oak Bank is a Pennsylvania-chartered stock savings
bank headquartered in Southampton, Pennsylvania and conducts
business through its two banking offices located in Bucks County
and Lehigh County, Pennsylvania.
The Quaint Oak Bancorp, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4654
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.
QUAINT OAK BANCORP, INC.
|
Balance Sheets
|
(In Thousands)
|
|
|
At March 31,
2010
|
At December 31,
2009
|
Assets
|
(Unaudited)
|
(Unaudited)
|
|
|
|
Cash and cash equivalents
|
$ 6,914
|
$ 5,420
|
Investment in interest-earning time deposits
|
2,918
|
3,153
|
Investment securities available for sale (cost-2010 $1,505; 2009
$1,001)
|
1,511
|
1,002
|
Mortgage-backed securities held to maturity (estimated fair
value-2010 $7,594; 2009 $8,142)
|
7,133
|
7,731
|
Loans receivable, net of allowance for loan losses
|
|
|
December 31, 2010: $864; December 31, 2009: $835
|
73,363
|
72,728
|
Accrued interest receivable
|
393
|
397
|
Investment in FHLB stock, at cost
|
797
|
797
|
Premises and equipment, net
|
1,084
|
1,092
|
Other real estate owned, net
|
938
|
913
|
Prepaid expenses and other assets
|
712
|
704
|
Total Assets
|
$95,763
|
$93,937
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
Liabilities
|
|
|
Deposits, interest-bearing
|
$71,153
|
$68,252
|
Federal Home Loan Bank advances and other borrowings
|
7,288
|
7,292
|
Accrued interest payable
|
113
|
117
|
Advances from borrowers for taxes and insurance
|
541
|
763
|
Accrued expenses and other liabilities
|
119
|
127
|
Total Liabilities
|
79,214
|
76,551
|
|
|
|
Stockholders' Equity
|
16,549
|
17,386
|
Total Liabilities and Stockholders'
Equity
|
$95,763
|
$93,937
|
|
QUAINT OAK BANCORP, INC.
|
Statements of Income
|
(In Thousands, except share data)
|
|
|
For the Three Months Ended
March 31,
|
|
2010
|
2009
|
|
(Unaudited)
|
Interest Income
|
$ 1,307
|
$ 1,356
|
Interest Expense
|
488
|
626
|
Net Interest Income
|
819
|
730
|
Provision for Loan Losses
|
29
|
62
|
Net Interest Income after Provision for Loan
Losses
|
790
|
668
|
Non-Interest Income
|
71
|
20
|
Non-Interest Expense
|
610
|
461
|
Income before Income Taxes
|
251
|
227
|
Income Taxes
|
98
|
90
|
Net Income
|
$ 153
|
$ 137
|
|
|
|
Per Common Share Data:
|
Three Months Ended
March 31,
|
|
2010
|
2009
|
Earnings per share - basic
|
$ 0.14
|
$ 0.12
|
Average shares outstanding - basic
|
1,125.384
|
1,189,263
|
Earnings per share - diluted
|
$ 0.14
|
$ 0.12
|
Average shares outstanding - diluted
|
1,131,296
|
1,189,263
|
|
Three Months Ended
March 31,
|
Selected Operating Ratios:
|
2010
|
2009
|
Average yield on interest-earning assets
|
5.80%
|
6.24%
|
Average rate on interest-bearing liabilities
|
2.55%
|
3.50%
|
Average interest rate spread
|
3.25%
|
2.74%
|
Net interest margin
|
3.63%
|
3.36%
|
Average interest-earning assets to average interest-
bearing liabilities
|
117.56%
|
121.59%
|
Efficiency ratio
|
68.54%
|
61.47%
|
|
|
|
Asset Quality Ratios (1):
|
|
|
Non-performing loans as a percent of total loans
receivable, net
|
3.35%
|
0.80%
|
Non-performing assets as a percent of total assets
|
3.52%
|
1.67%
|
Allowance for loan losses as a percent of non-performing
loans
|
35.12%
|
127.59%
|
Allowance for loan losses as a percent of total loans
receivable
|
1.16%
|
1.01%
|
|
|
|
(1) Asset quality ratios are end of period ratios.
|
|
|
CONTACT: Quaint Oak Bancorp, Inc.
Robert T. Strong, President and Chief Executive Officer
(215) 364-4059
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