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 June 30, 2013 was $173,000, or $0.20
per basic and $0.19 per diluted share, compared to $373,000, or
$0.42 per basic and diluted share for the same period in 2012. Net
income for the six months ended June 30, 2013 was $313,000, or
$0.35 per basic and $0.34 diluted share, compared to $549,000 or
$0.62 per basic and diluted share for the same period in 2012. The
decrease in net income for the three and six months ended June 30,
2013 was attributable in part to a one-time $331,000 gain on the
sale of investment securities during the quarter ended June 30,
2012.
Robert T. Strong, President and Chief Executive Officer stated,
"Recognizing that the one-time net after tax gain in the second
quarter of 2012, described above, provided non-recurring income,
our net income for the second quarter of 2013 is otherwise on track
with the same period of one year ago, absent that transaction.
Additionally, the 2013 second quarter after tax net income of
$173,000 is an improvement over the first quarter after tax net
income of $140,000."
Mr. Strong continued, "Lending opportunities available in our
home market and the competitive rates they command have been a
continued challenge. We have, however, held our focus on increasing
our loan balances and have year to date increased balances of net
loans outstanding by over $8.1 million. This should provide a
continued positive impact through subsequent periods of the year.
Additionally, we are pleased to note the continued reduction in
non-performing loans as a percent of total loans from 3.56% to
2.10% and of non-performing assets as a percent of total assets
from 2.64% to 1.71% for the comparable year over year periods.
Also, our Texas ratio stood at 13.17% as of this period end. This
is the lowest rate since initiating its calculation and tracking in
2009."
Mr. Strong added, "We are pleased to continue to see the
benefits of our expanding mortgage banking business. Compared to
the same quarter a year ago mortgage banking fees, including net
gain on sales of loans and fee income, increased by $217,000."
In closing, Mr. Strong commented, as always, in conjunction with
our stock repurchase plan, our current and continued business
strategy includes long term profitability and payment of dividends
reflecting our strong commitment to shareholder value.
Net income amounted to $173,000 for the three months ended June
30, 2013, a decrease of $200,000, or 53.6%, compared to net income
of $373,000 for three months ended June 30, 2012. The decrease in
net income on a comparative quarterly basis was primarily the
result of an increase in non-interest expense of $310,000 and a
decrease in non-interest income of $123,000, offset by an increase
in net interest income of $73,000, and decreases in the provision
for loan losses of $24,000 and the provision for income taxes of
$136,000.
The $73,000, or 7.0% increase in net interest income for the
three months ended June 30, 2013 over the comparable period in 2012
was driven by an $84,000, or 5.7% increase in interest income,
offset by an $11,000, or 2.6% increase in interest expense. The
increase in interest income was primarily due to an $11.9 million
increase in average loans receivable, net, including loans held for
sale, which increased from an average balance of $81.9 million for
the three months ended June 30, 2012 to an average balance of $93.8
million for the three months ended June 30, 2013, which had the
effect of increasing net interest income $200,000. Also
contributing to the increase was a $7.0 million increase in average
short-term investments and investment securities available for sale
from $19.7 million for the three months ended June 30, 2012
to $26.7 million for the comparable period in 2013, which had the
effect of increasing interest income by $30,000. Offsetting
these increases was a 39 basis point decline in the yield on
average loans receivable, net, including loans held for sale, from
6.72% for the three months ended June 30, 2012 to 6.33% for the
three months ended June 30, 2013, which had the effect of
decreasing interest income by $91,000, and a 73 basis point decline
in average short-term investments and investment securities
available for sale from 1.73% for the three months ended June 30,
2012 to 1.00% for the same period in 2013, which had the effect of
decreasing interest income $48,000. The increase in interest
expense was primarily attributable to a $16.0 million increase in
average interest-bearing liabilities, which increased from an
average balance of $89.8 million for the three months ended June
30, 2012 to an average balance of $105.8 million for the three
months ended June 30, 2013, which had the effect of increasing
interest expense $53,000. Offsetting this increase was a
decrease in the cost of interest-bearing liabilities, which
decreased 25 basis points from 1.89% for the three months ended
June 30, 2012 to 1.64% for the three months ended June 30, 2013,
which had the effect of decreasing interest expense
$42,000. The average interest rate spread decreased from 3.85%
for the three months ended June 30, 2012, to 3.51% for the same
period in 2013 while the net interest margin decreased from 4.08%
for the three months ended June 30, 2012 to 3.71% for the three
months ended June 30, 2013.
The $24,000, or 30.4% decrease in the provision for loan losses
for the three months ended June 30, 2013 over the three months
ended June 30, 2012 was based on an evaluation of the allowance
relative to such factors as volume of the loan portfolio,
concentrations of credit risk, prevailing economic conditions,
prior loan loss experience and amount of non-performing loans.
The $123,000, or 23.6% decrease in non-interest income for the
three months ended June 30, 2013 over the comparable period in 2012
was primarily attributable to a $331,000 decrease in the gains on
sale of investment securities and a $10,000 increase in the loss on
the sale of other real estate owned. These decreases were
offset by a $168,000 increase in the net gain on the sales of loans
held for sale and a $49,000 increase in fee income generated by
Quaint Oak Bank's mortgage banking and title abstract
subsidiaries.
The $310,000, or 35.3% increase in non-interest expense for the
three months ended June 30, 2013 compared to the same period in
2012 was primarily attributable to a $226,000 increase in salaries
and employee benefits expense, a $42,000 increase in occupancy and
equipment expense, a $38,000 increase in other expense, an $18,000
increase in other real estate owned expense, and a $16,000 increase
in professional fees. Offsetting these increases was a $28,000
decrease in FDIC deposit insurance expense primarily attributable
to a refund of unused prepaid assessment credits during the quarter
ended June 30, 2013. The increase in salaries and employee
benefits expense for the 2013 period compared to 2012 was primarily
attributable to increased staff as the Company expanded its
mortgage banking and lending operations. The increase in
occupancy and equipment expense was primarily related to the move
of our Delaware Valley office from 607 Lakeside Office Park,
Southampton, PA to a larger facility at 501 Knowles Avenue,
Southampton, PA and computer system upgrades. The increase in
professional fees was primarily due to costs related to compliance
and loan collections.
The $136,000, or 57.6% decrease in the provision for income
taxes for the three months ended June 30, 2013 over the three month
period ended June 30, 2012 was due primarily to the decrease in
pre-tax income. Our effective tax rate declined to 36.6%
during the three months ended June 30, 2013 from 38.8% for the
comparable period in 2012 primarily due to the utilization of a
state tax credit during the 2013 period.
For the six months ended June 30, 2013, net income decreased
$236,000, or 43.0% from $549,000 for the six months ended June 30,
2012 to $313,000 for the six months ended June 30, 2012. This
decrease in net income was primarily the result of an increase in
non-interest expense of $615,000, offset by increases in net
interest income of $148,000 and non-interest income of $25,000, and
decreases in the provision for loan losses of $43,000 and the
provision for income taxes of $163,000.
The $148,000, or 7.3% increase in net interest income for the
six months ended June 30, 2013 over the comparable period in 2012
was driven by a $143,000, or 4.9% increase in interest income and a
$5,000, or 0.6% decrease in interest expense. The increase in
interest income was primarily due to a $12.6 million increase in
average loans receivable, net, including loans held for sale, which
increased from an average balance of $80.3 million for the six
months ended June 30, 2012 to an average balance of $92.9 million
for the six months ended June 30, 2013, which had the effect of
increasing interest income $423,000. Also contributing to the
increase was a $5.2 million increase in average short-term
investments and investment securities available for sale from $20.7
million for the six months ended June 30, 2012 to $25.9 million for
the same period in 2013, which had the effect of increasing
interest income by $43,000. Offsetting these increases was a 41
basis point decline in the yield on average loans receivable, net,
including loans held for sale, from 6.68% for the six months ended
June 30, 2012 to 6.27% for the six months ended June 30, 2013,
which had the effect of decreasing interest income by $187,000, and
a 64 basis point decline in average short-term investments and
investment securities available for sale from 1.65% for the
six months ended June 30, 2012 to 1.01% for same period in 2013,
which had the effect of decreasing interest income
$84,000. Also contributing to offsetting the increases in
interest income was the $2.2 million decrease in average
mortgage-backed securities held to maturity which had the effect of
decreasing interest income $53,000. The decrease in average
mortgage-backed securities held to maturity was due to the sale of
mortgage-backed securities in the second quarter of 2012 after
their transfer to the available for sale category at the end of the
first quarter of 2012. The average interest rate spread
decreased from 3.68% for the six months ended June 30, 2012, to
3.46% for the same period in 2013 while the net interest margin
decreased from 3.93% for the six months ended June 30, 2012 to
3.66% for the six months ended June 30, 2013.
As was the case for the quarter, the $43,000, or 28.7% decrease
in the provision for loan losses for the six months ended June 30,
2013 compared to the six months ended June 30, 2012 was based on an
evaluation of the allowance relative to such factors as volume of
the loan portfolio, concentrations of credit risk, prevailing
economic conditions, prior loan loss experience and amount of
non-performing loans.
The $25,000, or 3.5% increase in non-interest income for the six
months ended June 30, 2013 over the comparable period in 2012 was
primarily attributable to a $274,000 increase in net gains on the
sales of loans and a $123,000 increase in fee income generated by
Quaint Oak Bank's mortgage banking and title abstract
subsidiaries. These increases were offset by a $331,000
decrease in the gains on sale of investment securities, a $32,000
decrease in the gain on the sale of an SBA loan, and a $4,000
increase in loss on the sale of other real estate owned.
The $615,000, or 36.2% increase in non-interest expense for the
six months ended June 30, 2013 compared to the same period in 2012
was primarily attributable to a $438,000 increase in salaries and
employee benefits expense, a $75,000 increase in occupancy and
equipment expense, a $61,000 increase in other expense, a $38,000
increase in professional fees, a $19,000 increase in other real
estate owned expense, and a $9,000 increase in advertising
expense. Offsetting these increases was a $30,000 decrease in
FDIC deposit insurance expense primarily attributable to a refund
of unused prepaid assessment credits. As was the case with the
quarter, the increase in salaries and employee benefits expense for
the 2013 period compared to 2012 was primarily attributable to
increased staff as the Company expanded its mortgage banking and
lending operations. The increase in occupancy and equipment
expense was primarily related to the move of our Delaware Valley
office from 607 Lakeside Office Park, Southampton, PA to a larger
facility at 501 Knowles Avenue, Southampton, PA and computer system
upgrades. The increase in professional fees was primarily due to
costs related to compliance and loan collections.
The $163,000, or 46.7% decrease in the provision for income
taxes for the six months ended June 30, 2013 over the six month
period ended June 30, 2012 was due primarily to the decrease in
pre-tax income as our effective tax rate remained relatively
consistent at 37.3% for the 2013 period compared to 38.9% for the
comparable period in 2012.
The Company's total assets at June 30, 2013 were $123.8 million,
an increase of $6.4 million, or 5.4%, from $117.4 million at
December 31, 2012. This growth in total assets was primarily
due to increases in loans receivable, net of $8.1 million and cash
and cash equivalents of $877,000. Offsetting these increases were
decreases in loans held for sale of $1.7 million, investment
securities available for sale of $516,000, and investment in
interest-earning time deposits of $212,000.
Total interest-bearing deposits increased $7.5 million, or 7.7%,
to $104.5 million at June 30, 2013 from $97.0 million at December
31, 2012. This increase in deposits was primarily attributable to
increases of $4.7 million in certificates of deposit and $3.1
million in eSavings accounts. In addition to funding loan growth,
the increase in deposits was used to pay off Federal Home Loan Bank
term borrowings in the amount of $1.0 million.
Total stockholders' equity increased $62,000 to $16.9 million at
June 30, 2013 from $16.8 million at December 31, 2012. Contributing
to the increase was net income for the six months ended June 30,
2013 of $313,000, amortization of stock awards and options under
our stock compensation plans of $60,000, and common stock earned by
participants in the employee stock ownership plan of
$85,000. These increases were offset by the purchase of 18,447
shares of the Company's stock as part of the Company's stock
repurchase programs, for an aggregate purchase price of $281,000,
dividends paid of $88,000, and a decrease in accumulated other
comprehensive income of $27,000.
Non-performing loans amounted to $1.9 million, or 2.10% of net
loans receivable at June 30, 2013, consisting of twenty-one loans,
eighteen of which are on non-accrual status and three of which are
90 days or more past due and accruing interest. Comparably,
non-performing loans amounted to $2.1 million, or 2.54% of net
loans receivable at December 31, 2012, consisting of twenty-six
loans, seventeen of which were on non-accrual status and nine of
which were 90 days or more past due and accruing interest. The
non-performing loans at June 30, 2013 include ten one-to-four
family non-owner occupied residential loans, four home equity
loans, three commercial real estate loans, three one-to-four family
owner-occupied residential loans, and one consumer non-real estate
loan, and all are generally well-collateralized or adequately
reserved for. During the quarter ended June 30, 2013, three
loans were placed on non-accrual status resulting in the reversal
of approximately $1,000 of previously accrued interest income, and
five loans that were on non-accrual were returned to accrual
status. At June 30, 2013, the Company had seven loans totaling
$430,000 that were identified as troubled debt
restructurings. None of these loans were delinquent and were
all performing in accordance with their modified terms. During
the quarter ended June 30, 2013, one loan in the amount of $179,000
that was previously identified as a TDR was removed from TDR status
as the borrower is current and making regular payments since April
2012. The allowance for loan losses as a percent of total loans
receivable was 1.02% at June 30, 2013 and 1.01% at December 31,
2012.
Other real estate owned (OREO) amounted to $187,000 at June 30,
2013, consisting of three properties. This compares to three
properties that totaled $170,000 at December 31, 2012. During
the quarter-ended June 30, 2013, an OREO property that had been
collateral for a loan in the amount of $46,000, previously
classified as non-accrual, was transferred to OREO. In
conjunction with this transfer, $15,000 of the outstanding loan
balance was charged-off through the allowance for loan
losses. Also during the quarter, the Company sold one OREO
property and realized a loss of approximately $10,000 on the
transaction. For the six months ended, the Company
transferred one property into OREO totaling $31,000, made $41,000
of capital improvements to the properties, and sold one property
totaling $55,000. Non-performing assets amounted to $2.1
million, or 1.71% of total assets at June 30, 2013 compared to $2.3
million, or 1.97% of total assets at December 31, 2012.
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.
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. |
Consolidated Balance
Sheets |
(In Thousands) |
|
|
|
|
At June 30,
2013 |
At December 31,
2012 |
Assets |
(Unaudited) |
(Unaudited) |
Cash and cash equivalents |
$13,277 |
$12,400 |
Investment in interest-earning
time deposits |
7,920 |
8,132 |
Investment securities available
for sale at fair value |
3,478 |
3,994 |
Loans held for sale |
3,153 |
4,875 |
Loans receivable, net of
allowance for loan losses (2013: $952; 2012: $860) |
92,434 |
84,291 |
Accrued interest
receivable |
678 |
657 |
Investment in Federal Home Loan
Bank stock, at cost |
260 |
437 |
Premises and equipment,
net |
1,670 |
1,608 |
Other real estate owned,
net |
187 |
170 |
Prepaid expenses and other
assets |
712 |
811 |
Total
Assets |
$123,769 |
$117,375 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Liabilities |
|
|
Deposits, interest-bearing |
$104,548 |
$97,038 |
Federal Home Loan Bank
advances |
1,000 |
2,000 |
Accrued interest payable |
75 |
81 |
Advances from borrowers for
taxes and insurance |
991 |
991 |
Accrued expenses and other
liabilities |
256 |
428 |
Total
Liabilities |
106,870 |
100,538 |
|
|
|
Stockholders' Equity |
16,899 |
16,837 |
Total Liabilities and
Stockholders' Equity |
$123,769 |
$117,375 |
|
|
|
QUAINT OAK BANCORP,
INC. |
Consolidated Statements
of Income |
(In Thousands, except share
data) |
|
|
|
|
|
|
For the Three
Months |
For the Six
Months |
|
Ended
June 30, |
Ended
June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(Unaudited) |
(Unaudited) |
Interest Income |
$1,552 |
$1,468 |
$3,046 |
$2,903 |
Interest Expense |
435 |
424 |
870 |
875 |
Net Interest
Income |
1,117 |
1,044 |
2,176 |
2,028 |
Provision for Loan Losses |
55 |
79 |
107 |
150 |
Net Interest Income
after Provision for Loan Losses |
1,062 |
965 |
2,069 |
1,878 |
Non-Interest Income |
399 |
522 |
746 |
721 |
Non-Interest Expense |
1,188 |
878 |
2,316 |
1,701 |
Income before Income
Taxes |
273 |
609 |
499 |
898 |
Income Taxes |
100 |
236 |
186 |
349 |
Net
Income |
$173 |
$373 |
$313 |
$549 |
|
|
|
|
|
Per Common Share Data: |
Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
|
2013 |
2012 |
2013 |
2012 |
|
(Unaudited) |
(Unaudited) |
Earnings per share –
basic |
$0.20 |
$0.42 |
$0.35 |
$0.62 |
Average shares
outstanding – basic |
886,437 |
886,437 |
889,534 |
883,408 |
Earnings per share –
diluted |
$0.19 |
$0.42 |
$0.34 |
$0.62 |
Average shares
outstanding - diluted |
926,817 |
891,204 |
925,486 |
888,835 |
|
|
|
|
|
Tangible book value per
share, end of period |
$17.51 |
$16.55 |
$17.51 |
$16.55 |
Shares outstanding, end
of period |
965,374 |
983,821 |
965,374 |
983,821 |
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
|
2013 |
2012 |
2013 |
2012 |
Selected Operating
Ratios: |
(Unaudited) |
(Unaudited) |
Average yield on
interest-earning assets |
5.15% |
5.74% |
5.13% |
5.62% |
Average rate on
interest-bearing liabilities |
1.64% |
1.89% |
1.67% |
1.94% |
Average interest rate
spread |
3.51% |
3.85% |
3.46% |
3.68% |
Net interest margin |
3.71% |
4.08% |
3.66% |
3.93% |
Average interest-earning
assets to average interest-bearing liabilities |
113.98% |
113.93% |
114.29% |
114.11% |
Efficiency ratio |
78.41% |
56.07% |
79.27% |
61.88% |
|
|
|
|
|
Asset Quality Ratios
(1): |
|
|
|
|
Non-performing loans as a
percent of total loans receivable, net |
2.10% |
3.56% |
2.10% |
3.56% |
Non-performing assets as
a percent of total assets |
1.71% |
2.64% |
1.71% |
2.64% |
Allowance for loan losses
as a percent of non-performing loans |
49.02% |
33.78% |
49.02% |
33.78% |
Allowance for loan losses
as a percent of total loans receivable |
1.02% |
1.19% |
1.02% |
1.19% |
Texas Ratio (2) |
13.17% |
18.08% |
13.17% |
18.08% |
|
|
|
|
|
(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.
CONTACT: Quaint Oak Bancorp, Inc.
Robert T. Strong, President and Chief Executive Officer
(215) 364-4059
Quaint Oak Bancorp (QB) (USOTC:QNTO)
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