EXHIBIT 99.1
[QUAINT OAK IMMEDIATE RELEASE
BANCORP INC logo] October 25, 2007
QUAINT OAK BANCORP, INC. ANNOUNCES THIRD QUARTER EARNINGS
Southampton, PA - Quaint Oak Bancorp, Inc. (OTCBB: QNTO) the
holding company for Quaint Oak Bank, announced today earnings for
the third quarter of fiscal 2007. Net income for the quarter
ended September 30, 2007 was $182,000, or $0.14 per basic share,
compared to $141,000 for the same period in 2006. The results
for the quarter reflect the net proceeds of $13.3 million
generated through the Company's initial public offering which was
completed July 3, 2007.
Robert T. Strong, President and Chief Executive Officer,
stated, "The increase in the Company's earnings for the third
quarter was fueled by the deployment of the net proceeds of our
initial public offering primarily into short-term, liquid
investments. The current interest rate environment and market
for loans continues to be challenging. However, our balance sheet
remains strong with quality assets, and capital that we intend to
leverage to grow the Company as market conditions improve."
Net income amounted to $182,000 for the three months ended
September 30, 2007, an increase of $41,000 or 29.1% compared to
net income of $141,000 for the three months ended September 30,
2006. The increase was primarily due to an increase in net
interest income of $146,000 and a decrease in the provision for
loan losses of $22,000, offset by an increase in non-interest
expense of $103,000 and a $26,000 increase in income taxes. The
increase in non-interest expense was primarily due to a $67,000
increase in salaries expense for the three months ended September
30, 2007 compared to the three months ended September 30, 2006.
The $146,000, or 31.5%, increase in net interest income for
the three months ended September 30, 2007 over the comparable
period in 2006 was due to an increase in interest income of
$185,000 attributable to an increase in average interest-earning
assets of $12.9 million, as the proceeds from the Company's stock
offering were invested primarily into short-term investments.
This increase in interest income was offset by a $39,000 increase
in the interest expense on average interest-bearing liabilities.
The average net interest margin improved from 3.15% for the three
months ended September 30, 2006 to 3.40% for the three months
ended September 30, 2007 as average net interest-earning assets
increased from $4.2 million to $17.9 million for the same
periods.
Total assets increased $11.7 million or 19.1% to $72.9
million at September 30, 2007 compared to $61.2 million at
December 31, 2006, mainly due to net proceeds received from the
Company's stock offering completed on July 3, 2007.
Cash and cash equivalents increased $8.5 million or 202.2%
to $12.7 million at September 30, 2007 compared to $4.2 million
at December 31, 2006 as proceeds from the stock offering were
invested in short-term, liquid investments.
Loans receivable, net, increased $2.0 million or 3.7% to
$56.6 million at September 30, 2007 from $54.6 million at
December 31, 2006. The increase was due primarily to a $1.8
million or 12.7% increase in commercial real estate loans, and a
$614,000 or 17.4% increase in home equity loans, partially offset
by a $614,000 or 2.0% decrease in one-to-four family residential
loans, which is consistent with our strategy of diversifying the
loan portfolio into higher yielding commercial loan products.
Total interest-bearing deposits decreased $1.4 million or
2.6% to $54.3 million at September 30, 2007 compared to $55.8
million at December 31, 2006. The decrease in interest-bearing
deposits was primarily attributed to a $1.6 million decrease in
passbook and statement savings accounts, offset by a $167,000
increase in certificates of deposits, as the Company continued
its policy to control deposit growth due to moderate loan demand.
Total stockholders' equity increased $13.2 million or 278.5%
to $17.9 million at September 30, 2007 compared to $4.7 million
at December 31, 2006. The increase was due primarily to the
$13.3 million of net proceeds received in the stock offering and
net income of $354,000 for the nine months ended September 30,
2007, offset by the repurchase of 57,000 shares of common stock
in the open-market to fund our Employee Stock Ownership Plan
(ESOP) for an aggregate purchase price of $514,000. The ESOP,
which is authorized to purchase up to $1.1 million of common
stock, expects to purchase the remaining shares in the open-
market over time depending upon, among other things, market
conditions.
Non-performing loans amounted to $2.0 million or 3.53% of
net loans receivable at September 30, 2007, consisting of nine
loans, four of which are 90 days or more past due and still
accruing interest and five of which are on non-accrual status.
The non-performing loans are primarily one-to-four family owner
occupied residential loans and all are well-collateralized. We
do not anticipate any significant losses on these loans. One of
the five loans was placed on non-accrual status during the
quarter ended September 30, 2007, resulting in the reversal of
$3,000 of previously accrued interest income. The allowance for
loan losses as a percent of total loans receivable was 1.06% at
September 30, 2007 and 1.04% at December 31, 2006.
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 banking office located in Bucks
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.
Contacts
Quaint Oak Bancorp, Inc.
Robert T. Strong, President and Chief Executive Officer
(215) 364-4059
2
QUAINT OAK BANCORP, INC.
Balance Sheets
(In Thousands)
At September 30, 2007 At December 31, 2006
_______________________ ______________________
ASSETS (Unaudited) (Unaudited)
Cash and cash equivalents $12,685 $ 4,197
Investment in interest-earning time deposits 1,816 1,711
Investment securities held to maturity 1,004 -
Investment in FHLB stock, at cost 232 263
Loans receivable, net of allowance for loan losses
September 30, 2007: $606; December 31, 2006: $575 56,589 54,553
Bank premises and equipment, net 52 46
Accrued interest receivable and other assets 502 436
______ ______
Total Assets $72,880 $61,206
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits, interest-bearing $54,318 $55,750
Advances from borrowers for taxes and insurance 345 587
Accrued interest payable and other liabilities 289 132
______ ______
Total Liabilities 55,952 56,469
Stockholder's Equity 17,928 4,737
______ ______
Total Liabilities and Stockholders' Equity $72,880 $61,206
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QUAINT OAK BANCORP, INC.
Statements of Income
(In Thousands, except share data)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
____________________ ____________________
2007 2006 2007 2006
________ ________ _________ _________
(Unaudited) (Unaudited)
Interest Income $ 1,195 $ 1,010 $ 3,221 $ 2,905
Interest Expense 586 547 1,767 1,513
______ ______ ______ ______
Net Interest Income 609 463 1,454 1,392
Provision for Loan Losses 14 36 32 108
______ ______ ______ ______
Net Interest Income after Provision for
Loan Losses 595 427 1,422 1,284
Non-Interest Income - Fees and service charges 9 7 26 18
Non-Interest Expense 307 204 870 596
______ ______ ______ ______
Income before Income Taxes 297 230 578 706
Income Taxes 115 89 224 273
______ ______ ______ ______
Net Income $ 182 $ 141 $ 354 $ 433
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Per Common Share Data: Three Months Ended Nine Months Ended
September 30, September 30,
____________________ ___________________
2007 2006 2007 2006
__________ _________ __________ ________
Earnings per share - basic $ 0.14 NA NM* NA
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Average shares outstanding-basic 1,334,018 NA NM* NA
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Ratios: Three Months Ended Nine Months Ended
September 30, September 30,
____________________ ___________________
2007 2006 2007 2006
__________ _________ _________ _________
Average interest rate spread 2.32% 2.87% 2.31% 2.95%
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Net interest margin 3.40% 3.15% 2.98% 3.21%
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Average interest-earning assets to average
interest-bearing liabilities 133.19% 107.77% 118.57% 107.39%
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* Not Meaningful