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 June 30, 2010 was $139,000, or $0.13
per basic and diluted share, compared to $62,000 or $0.05 per basic
and diluted share for the same period in 2009. Net income for the
six months ended June 30, 2010 was $292,000, or $0.27 per basic and
diluted share compared to $199,000, or $0.17 per basic and diluted
share for the same period in 2009.
Robert T. Strong, President and Chief Executive Officer stated,
"I am pleased to report an increase in earnings for both the
quarter and six months ended June 30, 2010, compared to the prior
year periods. Our loan portfolio has experienced consistent growth
while our cost of funds has continued to decrease
significantly. With the combination of lower cost of funds and
increased loan balances, we have experienced continued improvement
in our net interest margin for the quarter of 34 basis points when
compared to the prior year period. The depressed economy with high
unemployment continues to affect our non performing loans; however,
we have improved the ratio of non-performing loans to total loans
to 3.27% when compared to 3.35% at March 31, 2010. We continue
to work diligently with this customer group as evidenced by the
additional reduction in the troubled debt restructuring class of
loans to $648,000 from $1.5 million at December 31, 2009."
Mr. Strong continued, "As we mark the three year anniversary of
our mutual to stock conversion, we are pleased to note that during
that time frame we have increased assets to over $100 million,
added three active subsidiary companies, opened a bank branch
office, experienced profitable months every month during that
period, paid quarterly dividends as well as increased the dividend
payout since initiating them, and maintained an active stock
repurchase program that at this juncture has repurchased 16% of the
original shares issued. We have notably strengthened our
infrastructure, positioning us to continue the move prudently
forward given the economic landscape."
Mr. Strong added, "Our intention is to continue to move
cautiously ahead with growth and expansion plans always mindful of
long term profitability, payment of dividends, accompanied with an
active stock repurchase program. This focus continues to
reflect the Company's strong commitment to shareholder value."
Net income amounted to $139,000 for the three months ended June
30, 2010, an increase of $77,000, or 124.2%, compared to net income
of $62,000 for the same period in 2009. The increase in net income
on a comparative quarterly basis was primarily the result of
increases in net interest income of $123,000 and non-interest
income of $52,000, which were offset by increases in the provision
for income taxes of $52,000, non-interest expense of $41,000 and
the provision for loan losses of $5,000.
The $123,000, or 17.1%, increase in net interest income for the
three months ended June 30, 2010 over the comparable period in 2009
was driven by a $162,000, or 25.1%, decrease in interest expense,
offset by a $39,000, or 2.9%, decrease in interest income. The
$162,000 decrease in interest expense was primarily attributable to
a 107 basis point decrease in the overall cost of interest-bearing
liabilities to 2.41% for the three months ended June 30, 2010 from
3.48% for the three months ended June 30, 2009 which resulted in a
decrease of $206,000 of interest expense. This decrease in
interest expense due to rate was offset by a $6.1 million increase
in average interest-bearing liabilities, which had the effect of
increasing interest expense by $44,000. The $39,000 decrease
in interest income was primarily attributable to a 53 basis point
decrease in the yield on interest-earning assets to 5.65% for the
three months ended June 30, 2010 from 6.18% for the three months
ended June 30, 2009 which resulted in a $78,000 decrease in
interest income. Contributing to the decrease in yield for the
quarter ended June 30, 2010 was the reversal of $31,000 of accrued
interest income on loans placed on non-accrual status during the
quarter. This decrease in interest income due to yield was
offset by a $5.5 million increase in average interest-earning
assets, which had the effect of increasing interest income by
$39,000. The average interest rate spread increased from 2.70%
for the three months ended June 30, 2009, to 3.24% for the same
period in 2010 while the net interest margin increased from 3.25%
for the three months ended June 30, 2009, to 3.59% for the same
period in 2010.
The $52,000, or 216.7%, increase in non-interest income for the
three months ended June 30, 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 $52,000, or 126.8%, increase in the provision for income
taxes for the three months ended June 30, 2010 over the three month
period ended June 30, 2009 was due primarily to the increase in
pre-tax income.
The $41,000, or 6.6%, increase in non-interest expense for the
three months ended June 30, 2010 compared to the same period in
2009 was primarily attributable to a $95,000 increase in salaries
and employee benefits expense, a $22,000 increase in other
expenses, a $16,000 increase in advertising expense, and a $15,000
increase in occupancy and equipment expense. Offsetting these
increases was a $55,000 decrease in other real estate owned
expense, a $27,000 decrease in FDIC deposit insurance assessment, a
$14,000 decrease in professional fees, and an $11,000 decrease in
directors' fees and expenses. The increase in salaries and employee
benefits expense on a quarter-over-quarter basis was primarily due
to increased staff as the Company expanded its operations,
including the new subsidiaries and the opening of a branch banking
office in Allentown, Pennsylvania in February of 2010.
For the six months ended June 30, 2010, net income amounted to
$292,000 compared to $199,000 for the six months ended June 30,
2009. The $93,000 increase was primarily the result of a
$212,000 increase in net interest income, a $103,000 increase in
non-interest income and a $28,000 decrease in the provision for
loan losses, offset by a $190,000 increase in non-interest expense
and a $60,000 increase in the provision for income taxes.
The $212,000, or 14.6% increase in net interest income for the
six months ended June 30, 2010 over the comparable period in 2009
was driven by a $300,000, or 23.6%, decrease in interest expense,
offset by an $88,000, or 3.2%, decrease in interest income. The
$300,000 decrease in interest expense was primarily attributable to
a 101 basis point decrease in the overall cost of interest-bearing
liabilities to 2.48% for the six months ended June 30, 2010 from
3.49% for the six months ended June 30, 2009 which resulted in a
decrease of $382,000 of interest expense. This decrease in
interest expense due to rate was offset by a $5.6 million increase
in average interest-bearing liabilities, which had the effect of
increasing interest expense by $82,000. The $88,000 decrease
in interest income resulted primarily from a 47 basis point
decrease in the yield on interest-earning assets to 5.74% for the
three months ended June 30, 2010 from 6.21% for the six months
ended June 30, 2009 which resulted in a $152,000 decrease in
interest income. Contributing to the decrease in yield for the
six months ended June 30, 2010 was the reversal of $66,000 of
accrued interest income on loans placed on non-accrual status
during the period. This decrease in interest income due to
yield was offset by a $4.0 million increase in average
interest-earning assets, which had the effect of increasing
interest income by $64,000. The average interest rate spread
increased from 2.72% for the six months ended June 30, 2009, to
3.26% for the same period in 2010 while the net interest margin
increased from 3.30% for the six months ended June 30, 2009, to
3.62% for the same period in 2010.
The $103,000, or 234.1%, increase in non-interest income for the
six months ended June 30, 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 $60,000, or 45.8%, increase in the provision for income
taxes for the six months ended June 30, 2010 over the six month
period ended June 30, 2009 was due primarily to the increase in
pre-tax income.
The $190,000, or 17.6%, increase in non-interest expense for the
six months ended June 30, 2010 compared to the same period in 2009
was primarily attributable to a $186,000 increase in salaries and
employee benefits expense, a $49,000 increase in other expenses, a
$37,000 increase in occupancy and equipment expense, and a $23,000
increase in advertising expense. Offsetting these increases
was a $47,000 decrease in other real estate owned expense, a
$29,000 decrease in directors' fees and expenses, a $22,000
decrease in professional fees, an a $7,000 decrease in FDIC deposit
insurance assessment. The increase in salaries and employee
benefits expense for the six months ended June 30, 2010 over the
same period in 2009 was primarily due to increased staff as the
Company expanded its operations, including the new subsidiaries and
branch banking office.
The Company's total assets at June 30, 2010 were $100.3 million,
an increase of $6.3 million, or 6.8%, from $93.9 million at
December 31, 2009. This increase was primarily due to growth
in loans receivable, net of the allowance for loan losses, of $2.6
million, cash and cash equivalents of $2.3 million, investment
securities available for sale of $1.5 million, and investment in
interest-earning time deposits of $1.0 million. Offsetting
these increases were principal payments from mortgage-backed
securities held to maturity of $1.1 million. Asset growth for the
six months ended June 30, 2010 was funded by a $7.7 million
increase in deposits.
Total interest-bearing deposits increased $7.7 million, or
11.3%, to $76.0 million at June 30, 2010 from $68.3 million at
December 31, 2009. This increase was attributable to increases
of $7.8 million in certificates of deposit and $155,000 in
statement savings accounts, offset by decreases of $195,000 in
eSavings accounts and $18,000 in passbook savings
accounts. The increase in certificates of deposit 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 $876,000 to $16.5 million
at June 30, 2010 from $17.4 million at December 31,
2009. Contributing to the decrease was the purchase of 130,776
shares of the Company's stock in the open-market as part of the
Company's stock repurchase program, as well as other private
repurchases, for an aggregate purchase price of $1.2 million, and
dividends paid of $68,000. These decreases were offset by
$292,000 of net income for the six months ended June 30, 2010,
$59,000 amortization of stock awards and options under our stock
compensation plans, $34,000 related to common stock earned by
participants in the employee stock ownership plan, and $9,000 of
accumulated other comprehensive income.
Non-performing loans amounted to $2.5 million, or 3.27% of net
loans receivable at June 30, 2010, consisting of nineteen loans,
seventeen of which are on non-accrual status and two 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
June 30, 2010 include twelve one-to-four family non-owner occupied
residential loans, four one-to-four family owner occupied
residential loans, and three home equity 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 June 30, 2010, eight
loans were placed on non-accrual status resulting in the reversal
of $31,000 of previously accrued interest income. Not included
in non-performing loans are performing troubled debt restructurings
which totaled $648,000 at June 30, 2010 compared to $1.5 million at
December 31, 2009. The allowance for loan losses as a percent
of total loans receivable was 1.17% at June 30, 2010 and 1.14% at
December 31, 2009. Other real estate owned was $938,000 at
June 30, 2010 compared to $913,000 at December 31,
2009. Non-performing assets amounted to $3.4 million, or 3.39%
of total assets at June 30, 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. |
Consolidated Balance
Sheets |
(In Thousands) |
|
|
|
|
At June 30,
2010 |
At December 31,
2009 |
Assets |
(Unaudited) |
(Unaudited) |
|
|
|
Cash and cash equivalents |
$ 7,748 |
$ 5,420 |
Investment in interest-earning time
deposits |
4,182 |
3,153 |
Investment securities available for sale
(cost-2010 $2,514; 2009 $1,001) |
2,529 |
1,002 |
Mortgage-backed securities held to maturity
(fair value-2010 $7,193; 2009 $8,142) |
6,666 |
7,731 |
Loans receivable, net of allowance for loan
losses June 30, 2010: $892; December 31, 2009: $835 |
75,310 |
72,728 |
Accrued interest receivable |
373 |
397 |
Investment in FHLB stock, at cost |
797 |
797 |
Bank premises and equipment, net |
1,083 |
1,092 |
Other real estate owned, net |
938 |
913 |
Prepaid expenses and other assets |
655 |
704 |
Total Assets |
$100,281 |
$93,937 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
Liabilities |
|
|
Deposits, interest-bearing |
$75,981 |
$68,252 |
Federal Home Loan Bank advances and other
borrowings |
6,783 |
7,292 |
Accrued interest payable |
105 |
117 |
Advances from borrowers for taxes and
insurance |
706 |
763 |
Accrued expenses and other
liabilities |
196 |
127 |
Total Liabilities |
83,771 |
76,551 |
|
|
|
Stockholders' Equity |
16,510 |
17,386 |
Total Liabilities and
Stockholders' Equity |
$100,281 |
$93,937 |
|
|
QUAINT OAK BANCORP,
INC. |
Consolidated Statements
of Income |
(In Thousands, except share
data) |
|
|
|
|
|
|
For the Three
Months Ended June 30, |
For the Six
Months Ended June 30, |
|
2010 |
2009 |
2010 |
2009 |
|
(Unaudited) |
(Unaudited) |
|
|
|
|
|
Interest Income |
$ 1,326 |
$ 1,365 |
$ 2,633 |
$ 2,721 |
Interest Expense |
484 |
646 |
972 |
1,272 |
Net Interest Income |
842 |
719 |
1,661 |
1,449 |
Provision for Loan Losses |
28 |
23 |
57 |
85 |
Net Interest Income after
Provision for Loan Losses |
814 |
696 |
1,604 |
1,364 |
Non-Interest Income |
76 |
24 |
147 |
44 |
Non-Interest Expense |
658 |
617 |
1,268 |
1,078 |
Income before Income
Taxes |
232 |
103 |
483 |
330 |
Income Taxes |
93 |
41 |
191 |
131 |
Net Income |
$ 139 |
$ 62 |
$ 292 |
$ 199 |
|
|
|
Per Common Share Data: |
Three Months
Ended June 30, |
Six Months
Ended June 30, |
|
2010 |
2009 |
2010 |
2009 |
Earnings per share - basic |
$ 0.13 |
$ 0.05 |
$ 0.27 |
$ 0.17 |
Average shares outstanding - basic |
1,042,956 |
1,167,861 |
1,083,942 |
1,178,503 |
Earnings per share - diluted |
$ 0.13 |
$ 0.05 |
$ 0.27 |
$ 0.17 |
Average shares outstanding -
diluted |
1,047,902 |
1,172,715 |
1,089,524 |
1,183,370 |
|
|
|
|
Three Months
Ended June 30, |
Six Months
Ended June 30, |
|
2010 |
2009 |
2010 |
2009 |
Selected Operating
Ratios: |
(Unaudited) |
(Unaudited) |
Average yield on interest-earning
assets |
5.65% |
6.18% |
5.74% |
6.21% |
Average rate on interest-bearing
liabilities |
2.41% |
3.48% |
2.48% |
3.49% |
Average interest rate spread |
3.24% |
2.70% |
3.26% |
2.72% |
Net interest margin |
3.59% |
3.25% |
3.62% |
3.30% |
Average interest-earning assets to
average interest-bearing liabilities |
116.82% |
119.09% |
116.76% |
120.31% |
Efficiency ratio |
71.68% |
83.04% |
70.13% |
72.20% |
|
|
|
|
|
Asset Quality Ratios
(1): |
|
|
|
|
Non-performing loans as a percent of
total loans receivable, net |
3.27% |
1.33% |
3.27% |
1.33% |
Non-performing assets as a percent of
total assets |
3.39% |
2.01% |
3.39% |
2.01% |
Allowance for loan losses as a percent of
non-performing loans |
36.21% |
80.30% |
36.21% |
80.30% |
Allowance for loan losses as a percent of
total loans receivable |
1.17% |
1.06% |
1.17% |
1.06% |
|
|
|
|
|
(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
Quaint Oak Bancorp (QB) (USOTC:QNTO)
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