Equibles

10-Q

QUAINT OAK BANCORP, INC. (QNTO)

10-Q 2025-08-14 For: 2025-06-30
View Original
Added on April 06, 2026
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2025
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OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission file number: 000-52694
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QUAINT OAK BANCORP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania 35-2293957
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(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
501 Knowles Avenue, Southampton, Pennsylvania 18966
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(Address of Principal Executive Offices) (Zip Code)
(215) 364-4059
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(Registrant’s Telephone Number, Including Area Code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each Class Trading Symbol(s) Name of each exchange on which registered
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ☒  Yes   ☐  No
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☐    Accelerated filer  ☐    Non-accelerated filer  ☒    Smaller reporting company  ☒    Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ☐  Yes   ☒  No<br> <br>Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 12, 2025, 2,635,914 shares of the issuer’s common stock were issued and outstanding.

INDEX

PART I - FINANCIAL INFORMATION Page
Item 1 -         Financial Statements
Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 (Unaudited) 1
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) 2
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and<br> <br>2024 (Unaudited) 4
Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and<br> <br>2024 (Unaudited) 5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited) 7
Notes to the Unaudited Consolidated Financial Statements 9
Item 2 -         Management’s Discussion and Analysis of Financial Condition and Results of Operations 32
Item 3 -         Quantitative and Qualitative Disclosures About Market Risk 45
Item 4 -         Controls and Procedures 45
PART II - OTHER INFORMATION
Item 1 -         Legal Proceedings 45
Item 1A -       Risk Factors 45
Item 2 -         Unregistered Sales of Equity Securities and Use of Proceeds 46
Item 3 -         Defaults Upon Senior Securities 46
Item 4 -         Mine Safety Disclosures 46
Item 5 -         Other Information 46
Item 6 -         Exhibits 47
SIGNATURES

ITEM 1. FINANCIAL STATEMENTS

Quaint Oak Bancorp, Inc.

Consolidated Balance Sheets (Unaudited)

At December 31,
2024
Assets
Due from banks, non-interest-bearing 219 $ 345
Due from banks, interest-bearing 48,672 62,644
Cash and cash equivalents 48,891 62,989
Investment in interest-earning time deposits 912 912
Investment securities available for sale 1,236 1,666
Loans held for sale 56,013 64,281
Loans receivable, net of allowance for credit losses (2025 6,326; 2024 6,476) 541,690 534,693
Accrued interest receivable 4,655 3,961
Investment in Federal Home Loan Bank stock, at cost 2,691 2,214
Bank-owned life insurance 4,508 4,447
Premises and equipment, net 1,581 1,626
Goodwill 515 515
Other intangible, net of accumulated amortization 53 77
Prepaid expenses and other assets 8,015 7,787
Total Assets 670,760 $ 685,168
Liabilities and Stockholders’ Equity
Liabilities **** **** **** **** ****
Deposits:
Non-interest bearing 97,432 $ 59,783
Interest-bearing 434,744 493,469
Total deposits 532,176 553,252
Federal Home Loan Bank borrowings 60,000 47,855
Senior debt, net of unamortized costs 9,531 -
Subordinated debt 8,000 22,000
Accrued interest payable 1,026 937
Advances from borrowers for taxes and insurance 2,915 3,122
Accrued expenses and other liabilities 4,855 5,385
Total Liabilities 618,503 632,551
Stockholders’ Equity **** **** **** **** ****
Preferred stock – 0.01 par value, 1,000,000 shares authorized; none issued or outstanding - -
Common stock – 0.01 par value; 9,000,000 shares authorized; 3,108,993 issued as of both June 30, 2025 and December 31, 2024; 2,635,866 and 2,626,535 outstanding at June 30, 2025 and December 31, 2024, respectively 31 31
Additional paid-in capital 23,057 22,976
Treasury stock, at cost: 473,127 and 482,458 shares at June 30, 2025 and December 31, 2024, respectively (3,538 ) (3,588 )
Accumulated other comprehensive income 3 -
Retained earnings 32,704 33,198
Total Stockholders' Equity 52,257 $ 52,617
Total Liabilities and Stockholders’ Equity 670,760 $ 685,168

All values are in US Dollars.

See accompanying notes to the unaudited consolidated financial statements.

1

Quaint Oak Bancorp, Inc.

Consolidated Statements of Operations (Unaudited)

For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2025 2024 2025 2024
(Unaudited) (Unaudited)
Interest and Dividend Income **** **** **** **** **** **** **** **** **** **** ****
Interest on loans, including fees $ 9,695 $ 9,317 $ 19,218 $ 20,550
Interest and dividends on time deposits, investment securities,<br> <br>interest-bearing deposits with others, and Federal Home Loan Bank stock 499 1,580 902 2,469
Total Interest and Dividend Income 10,194 10,897 20,120 23,019
Interest Expense **** **** **** **** **** **** **** **** **** **** ****
Interest on deposits 4,598 6,168 9,328 12,154
Interest on FHLB borrowings 648 167 1,132 409
Interest on senior debt 275 - 391 -
Interest on subordinated debt 168 488 620 972
Total Interest Expense 5,689 6,823 11,471 13,535
Net Interest Income $ 4,505 $ 4,074 $ 8,649 $ 9,484
Provision for Credit Losses – Loans 464 - 790 1,084
(Recovery of) Provision for Credit Losses – Unfunded Commitments (27 ) (41 ) 88 11
Total Provision for (Recovery of) Credit Losses 437 (41 ) 878 1,095
Net Interest Income after Provision for (Recovery of) Credit Losses 4,068 4,115 7,771 8,389
Non-Interest Income **** **** **** **** **** **** **** **** **** **** ****
Mortgage banking, equipment lending and title abstract fees 280 183 426 390
Real estate sales commissions, net - 16 - 20
Insurance commissions 196 176 381 328
Other fees and services charges (119 ) 240 (87 ) 466
Net loan servicing income 1 2 5 3
Income from bank-owned life insurance 32 28 62 57
Net gain on sale of loans 1,046 561 2,102 1,495
Gain on the sale of SBA loans 511 98 818 127
Total Non-Interest Income 1,947 1,304 3,707 2,886
Non-Interest Expense
Salaries and employee benefits 3,642 3,673 7,292 7,335
Directors' fees and expenses 65 50 130 101
Occupancy and equipment 432 416 863 666
Data processing 439 311 841 573
Professional fees 174 156 397 297
FDIC deposit insurance assessment 135 163 256 336
Advertising 100 73 199 160
Amortization of other intangible 12 12 24 24
Other 534 382 1,075 869
Total Non-Interest Expense 5,533 5,236 11,077 10,361
Income from Continuing Operations Before Income Taxes $ 482 $ 183 $ 401 $ 914
Income Taxes 210 83 212 347
Net Income from Continuing Operations $ 272 $ 100 $ 189 $ 567
Income from Discontinued Operations - - - 564
Income Taxes - - - 158
Net Income from Discontinued Operations $ - $ - $ - $ 406
Net Income $ 272 $ 100 $ 189 $ 973

See accompanying notes to the unaudited consolidated financial statements.

2

Quaint Oak Bancorp, Inc.

Consolidated Statements of Operations (Unaudited)

Three Months Ended<br> <br>June 30, Six Months Ended<br> <br>June 30,
2025 2024 2025 2024
(Unaudited) (Unaudited)
Per Common Share Data:
Earnings per share from continuing operations – basic $ 0.10 $ 0.04 $ 0.07 $ 0.23
Earnings per share from discontinued operations – basic $ - $ - $ - $ 0.16
Earnings per share, net – basic $ 0.10 $ 0.04 $ 0.07 $ 0.39
Average shares outstanding – basic 2,630,585 2,600,346 2,628,786 2,525,580
Earnings per share from continuing operations – diluted $ 0.10 $ 0.04 $ 0.07 $ 0.23
Earnings per share from discontinued operations – diluted $ - $ - $ - $ 0.16
Earnings per share, net – diluted $ 0.10 $ 0.04 $ 0.07 $ 0.39
Average shares outstanding - diluted 2,630,585 2,600,346 2,628,786 2,525,580
Book value per share, end of period $ 19.83 $ 19.54 $ 19.83 $ 19.54
Shares outstanding, end of period 2,635,866 2,629,289 2,635,866 2,629,289

See accompanying notes to the unaudited consolidated financial statements.

3

Quaint Oak Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

For the Three<br> <br>Months Ended For the Six<br> <br>Months Ended
June 30, June 30,
2025 2024 2025 2024
(In thousands)
Net Income from Continuing Operations $ 272 $ 100 $ 189 $ 567
Other Comprehensive Income: **** **** **** **** **** **** **** **** **** **** **** ****
Unrealized gains on investment securities available-for-sale 3 3 4 10
Income tax effect (1 ) (1 ) (1 ) (2 )
Other comprehensive income 2 2 3 8
Total Comprehensive Income $ 274 $ 102 $ 192 $ 575
Comprehensive Income from Discontinued Operations $ - $ - $ - $ 406
Comprehensive Income Attributable to Quaint Oak Bancorp, Inc. $ 274 $ 102 $ 192 $ 981

See accompanying notes to the unaudited consolidated financial statements.

4

Quaint Oak Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

For the Three Months Ended June 30, 2025
Common Stock Accumulated
Number of Additional Other Total
Shares Paid-in Treasury Comprehensive Retained Stockholders'
Outstanding Amount Capital Stock Income Earnings Equity
(In thousands, except share and per share data)
BALANCE – MARCH 31, 2025 2,627,397 $ 31 $ 23,040 $ (3,582 ) $ 1 $ 32,774 $ 52,264
Reissuance of treasury stock under 401(k) plan 2,889 12 19 31
Purchase of treasury stock (2,920 ) (31 ) (31 )
Reissuance of treasury stock under incentive plan 8,500 (56 ) 56
Stock based compensation expense 61 61
Cash dividends declared (0.13 per share) (342 ) (342 )
Net Income 272 272
Other comprehensive income 2 2
BALANCE – JUNE 30, 2025 2,635,866 $ 31 $ 23,057 $ (3,538 ) $ 3 $ 32,704 $ 52,257
For the Three Months Ended June 30, 2024 **** **** ****
**** **** **** **** **** **** **** Accumulated **** **** **** **** **** **** ****
Additional Other Total
Paid-in Treasury Comprehensive Retained Stockholders’
Amount Capital Stock Income (Loss) Earnings Equity
BALANCE – MARCH 31, 2024 2,493,975 $ 30 $ 21,370 $ (3,554 ) $ (4 ) $ 32,302 $ 50,144
Treasury stock purchase (4,242 ) (44 ) (44 )
Issued from authorized and unallocated 128,500 1 1,447 1,448
Reissuance of treasury stock under 401(k) plan 2,056 8 13 21
Reissuance of treasury stock under incentive plan 9,000 (58 ) 58
Stock based compensation expense 61 61
Cash dividends declared (0.13 per share) (342 ) (342 )
Net income 100 100
Other comprehensive income 2 2
BALANCE – JUNE 30, 2024 2,629,289 $ 31 $ 22,828 $ (3,527 ) $ (2 ) $ 32,060 $ 51,390

All values are in US Dollars.

See accompanying notes to the unaudited consolidated financial statements.

5

Quaint Oak Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

For the Six Months Ended June 30, 2025
Accumulated
Additional Other Total
Paid-in Treasury Comprehensive Retained Stockholders'
Amount Capital Stock Income Earnings Equity
BALANCE – DECEMBER 31, 2024 $ 31 $ 22,976 $ (3,588 ) $ - $ 33,198 $ 52,617
Reissuance of treasury stock under 401(k) Plan 16 25 41
Purchase of treasury stock ) (31 ) (31 )
Reissuance of treasury stock under incentive plan (56 ) 56
Stock based compensation expense 121 121
Cash dividends declared (0.26 per share) (683 ) (683 )
Net Income 189 189
Other comprehensive income 3 3
BALANCE – JUNE 30, 2025 $ 31 $ 23,057 $ (3,538 ) $ 3 $ 32,704 $ 52,257

All values are in US Dollars.

For the Six Months Ended June 30, 2024
Accumulated
Additional Other Total
Paid-in Treasury Comprehensive Retained Stockholders'
Amount Capital Stock Income (Loss) Earnings Equity
BALANCE – DECEMBER 31, 2023 $ 29 $ 20,299 $ (3,568 ) $ (10 ) $ 31,741 $ 48,491
Treasury stock purchase ) (44 ) (44 )
Issued from authorized and unallocated 2 2,446 2,448
Reissuance of treasury stock under 401(k) Plan 19 27 46
Reissuance of treasury stock under incentive plan (58 ) 58
Stock based compensation expense 122 122
Cash dividends declared (0.26 per share) (654 ) (654 )
Net income 973 973
Other comprehensive income 8 8
BALANCE – JUNE 30, 2024 $ 31 $ 22,828 $ (3,527 ) $ (2 ) $ 32,060 $ 51,390

All values are in US Dollars.

See accompanying notes to the unaudited consolidated financial statements.

6

Quaint Oak Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

For the Six Months
Ended June 30,
2025 2024
Cash Flows from Operating Activities (In Thousands)
Net income from continuing operations $ 189 $ 567
Net income from discontinued operations - 406
Net income $ 189 $ 973
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses 878 1,095
Depreciation expense 346 280
Amortization, net 146 67
Accretion of deferred loan fees and costs, net (185 ) (288 )
Stock-based compensation expense 121 122
Net gain sale of loans (2,102 ) (1,495 )
Loans held for sale-originations (82,711 ) (64,029 )
Loans held for sale-proceeds 93,081 58,995
Gain on the sale of SBA loans (818 ) (127 )
Increase in the cash surrender value of bank-owned life insurance (62 ) (56 )
Changes in assets and liabilities which provided (used) cash:
Accrued interest receivable (694 ) (662 )
Prepaid expenses and other assets (350 ) (356 )
Accrued interest payable 89 316
Accrued expenses and other liabilities (530 ) 77
Net Cash Provided by (Used in) Operating Activities of Continuing Operations 7,398 (5,088 )
Net Cash Provided by Operating Activities of Discontinued Operations - 32,350
Net Cash Provided by (Used in) Operating Activities 7,398 27,262
Cash Flows from Investing Activities **** **** **** **** **** ****
Redemption of interest-earning time deposits - 1,000
Principal repayments of investment securities available for sale 434 331
Net (decrease) increase in loans receivable (6,872 ) 23,246
Proceeds from the sale of Oakmont Capital Holdings, LLC - 4,300
Purchase of Federal Home Loan Bank stock (4,006 ) (1,227 )
Redemption of Federal Home Loan Bank stock 3,529 603
Purchase of premises and equipment (301 ) (414 )
Net Cash (Used in) Provided by Investing Activities (7,216 ) 27,839
Cash Flows from Financing Activities **** **** **** **** **** ****
Net (decrease) increase in demand deposits, money markets, and savings accounts (50,660 ) (61,757 )
Net increase in certificate accounts 29,584 6,499
Decrease in advances from borrowers for taxes and insurance (207 ) (3 )
Proceeds from Federal Home Loan Bank borrowings 12,145 15,933
Proceeds from Federal Reserve Bank long-term borrowings 4,500 -
Repayments of Federal Reserve Bank long-term borrowings (4,500 ) -
Net repayments from subordinated debt (14,000 ) -
Net proceeds from senior debt 9,531 -
Dividends paid (683 ) (654 )
Proceeds from the reissuance of treasury stock under 401(k) plan 41 46
Proceeds from shares issued from authorized and unallocated - 2,448
Acquisition of treasury stock (31 ) (44 )

See accompanying notes to the unaudited consolidated financial statements.

7

Quaint Oak Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

For the Six Months
Ended June 30,
2025 2024
(In Thousands)
Net Cash Used in Financing Activities from Continuing Operations $ (14,280 ) $ (37,532 )
Net (Decrease) Increase in Cash and Cash Equivalents (14,098 ) 17,569
Cash and Cash Equivalents – Beginning of Year 62,989 58,006
Cash and Cash Equivalents – End of Year $ 48,891 $ 75,575
Supplementary Disclosure of Cash Flow and Non-Cash Information: **** **** **** **** **** ****
Cash payments for interest $ 11,381 $ 13,219
Cash payments for income taxes $ 455 $ 420
Transfer of loans from Oakmont Capital Holdings, LLC - $ 4,388
Transfer of loans held for investment to loans held for sale $ 45,987 $ -
Net decrease in loans receivable from transfer of loans held for investment to loans held for sale $ (45,987 ) $ -

See accompanying notes to the unaudited consolidated financial statements.

8

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1 – Financial Statement Presentation and Significant Accounting Policies

Basis of Financial Presentation. The consolidated financial statements include the accounts of Quaint Oak Bancorp, Inc., a Pennsylvania chartered corporation (the “Company” or “Quaint Oak Bancorp”) and its wholly owned subsidiary, Quaint Oak Bank, a Pennsylvania chartered stock savings bank (the “Bank”), along with its wholly owned subsidiaries. At June 30, 2025, the Bank has five wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, each a Pennsylvania limited liability company. Quaint Oak Mortgage offers mortgage banking in the Lehigh Valley, Delaware Valley and Philadelphia County regions of Pennsylvania and began operations in  February, 2019.Quaint Oak Abstract offers title abstract services primarily in the Lehigh Valley region of Pennsylvania and began operation in July 2009. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC began operations in August 2016 and provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021 and operates as a nationwide specialty commercial real estate financing company. On March 29, 2024, Quaint Oak Bank sold its 51% interest in Oakmont Capital Holdings, LLC (“OCH”), a multi-state equipment finance company based in West Chester, Pennsylvania. The decision was based on a number of strategic priorities and other factors. As a result of this action, Quaint Oak Bancorp classified the operations of OCH as discontinued operations under ASC 205-20 and ceased all equipment loan originations. Also on March 29, 2024, the Company discontinued the operations of Quaint Oak Real Estate, LLC (“Quaint Oak Real Estate”), a 100% wholly owned subsidiary of the Bank. Quaint Oak Real Estate was engaged in the real estate brokerage business. All significant intercompany balances and transactions have been eliminated.

The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation. Pursuant to the Bank’s election under Section 10(l) of the Home Owners’ Loan Act, the Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. The market area served by the Bank is principally Bucks, Montgomery and Philadelphia Counties in Pennsylvania and the Lehigh Valley area in Pennsylvania, although the Bank has customers in all fifty states, the District of Columbia and Puerto Rico. The Bank has three regional offices located in the Delaware Valley, Lehigh Valley and Philadelphia markets The principal deposit products offered by the Bank are money market accounts, certificates of deposit, non-interest bearing checking accounts for businesses and consumers, and savings accounts. The principal loan products offered by the Bank are fixed and adjustable rate residential and commercial mortgages, construction loans, commercial business loans, home equity loans, and lines of credit.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim information and with the instructions to Form 10-Q, as applicable to a smaller reporting company. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements.

The foregoing consolidated financial statements are unaudited; but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation thereof. The balances as of December 31, 2024 have been derived from the audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Quaint Oak Bancorp’s 2024 Annual Report on Form 10-K. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

9

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)

Use of Estimates in the Preparation of Financial Statements. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant estimates are the determination of the allowance for credit losses and the valuation of deferred tax assets.

Critical Accounting Policies. The Company’s critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of June 30, 2025 have remained unchanged from the disclosures presented in our Annual Report on Form 10-K.

Accounting Pronouncements Not Yet Adopted. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for public business entities for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this new guidance on its financial statements.

Reclassifications. Certain items in the prior period consolidated financial statements have been reclassified to conform to the presentation in the current period consolidated financial statements. Such reclassifications did not have a material impact on the presentation of the overall financial statements. The reclassifications had no effect on net income or stockholders’ equity.

Note 2 – Discontinued Operations

On March 29, 2024, Quaint Oak Bank sold its 51% interest in OCH. The decision was based on a number of strategic priorities and other factors. As a result of this action, the Company classified the operations of OCH as discontinued operations under ASC 205-20. The Consolidated Statements of Operations and Consolidated Statements of Cash Flows present discontinued operations for the current period and retrospectively for prior periods.

10

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 2 – Discontinued Operations (Continued)

The following presents operating results of the discontinued operations OCH for the six months ended June 30, 2025 and *June 30, 2024 (*in thousands):

For the Six Months Ended
June 30,
2025 2024
(In thousands, except for share data)
Interest and Dividend Income **** **** **** **** ****
Interest on loans, including fees $ - $ 70
Interest and dividends on time deposits, investment securities, interest-bearing deposits with others, and Federal Home Loan Bank stock - -
Total Interest and Dividend Income - 70
Interest Expense **** **** **** **** ****
Interest on other borrowings - 295
Total Interest Expense - 295
Net Interest Loss - (225 )
Non-Interest Income **** **** **** **** ****
Mortgage banking, equipment lending and title abstract fees - 404
Other fees and services charges - 197
Net loan servicing income - 726
Net gain on sale of loans - 366
Gain on sale of OCH ^(1)^ - 1,378
Total Non-Interest Income - 3,071
Non-Interest Expense **** **** **** **** ****
Salaries and employee benefits - 1,681
Occupancy and equipment - 219
Professional fees - 31
Advertising - 146
Other - 987
Total Non-Interest Expense - 3,064
Total net loss from discontinued operations $ - $ (218 )
Income attributable to non-controlling interest - 782
Net income from discontinued operations $ - $ 564
(1) Gain on sale of OCH has been reclassified from prior periods from continuing operations to discontinued operations.
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11

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 3 – Earnings Per Share

Earnings per share (“EPS”) consists of two separate components, basic EPS and diluted EPS. Basic EPS is computed based on the weighted average number of shares of common stock outstanding for each period presented. Diluted EPS is calculated based on the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents (“CSEs”). CSEs consist of shares that are assumed to be purchased with the proceeds from the exercise of stock options, as well as unvested restricted stock (RRP) shares. Common stock equivalents which are considered antidilutive are not included for the purposes of this calculation. For the three and six months ended June 30, 2025 and June 30, 2024, all unvested restricted stock program awards and outstanding stock options representing shares were anti-dilutive.

The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computations.

For the Three Months Ended June 30, For the Six Months Ended June 30,
2025 2024 2025 2024
Net Income Attributable to Quaint Oak Bancorp, Inc. $ 272,000 $ 100,000 $ 189,000 $ 973,000
Weighted average shares outstanding – basic 2,630,585 2,600,346 2,628,786 2,525,580
Effect of dilutive common stock equivalents - - - -
Adjusted weighted average shares outstanding – diluted 2,630,585 2,600,346 2,628,786 2,525,580
Basic earnings per share from continuing operations $ 0.10 $ 0.04 $ 0.07 $ 0.23 (1)
Basic earnings per share from discontinued operations $ - $ - $ - $ 0.16 (1)
Basic earnings per share, net $ 0.10 $ 0.04 $ 0.07 $ 0.39
Diluted earnings per share from continuing operations $ 0.10 $ 0.04 $ 0.07 $ 0.23 (1)
Diluted earnings per share from discontinued operations $ - $ - $ - $ 0.16 (1)
Diluted earnings per share, net $ 0.10 $ 0.04 $ 0.07 $ 0.39
(1) Earnings per share from continuing operations and discontinued operations for the six months ended June 30, 2024 reflect the reclassification of the gain on sale of OCH.
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Note 4 – Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and six months ended June 30, 2025 and 2024 (in thousands):

Unrealized Gains (Losses) on Investment Securities Available for Sale (1)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2025 2024 2025 2024
Balance at the beginning of the period $ 1 $ (4 ) $ - $ (10 )
Other comprehensive income 2 2 3 8
Balance at the end of the period $ 3 $ (2 ) $ 3 $ (2 )

_________________

(1)    All amounts are net of tax. Amounts in parentheses indicate debits.

There were no reclassifications from accumulated other comprehensive income by component for the three or six months ended June 30, 2025 and 2024.

12

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 5 – Investment Securities Available for Sale

The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale at June 30, 2025 and December 31, 2024 are summarized below (in thousands):

June 30, 2025
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available for Sale:
Mortgage-backed securities:
Government National Mortgage Association securities $ 1,199 $ 3 $ - $ 1,202
Federal National Mortgage Association securities 34 - - 34
Total available-for-sale-securities $ 1,233 $ 3 $ - $ 1,236
December 31, 2024
--- --- --- --- --- --- --- --- --- ---
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available for Sale:
Mortgage-backed securities:
Government National Mortgage Association securities $ 1,631 $ 1 $ (2 ) $ 1,630
Federal National Mortgage Association securities 35 1 - 36
Total available-for-sale-securities $ 1,666 $ 2 $ (2 ) $ 1,666

The amortized cost and fair value of mortgage-backed securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):

Available for Sale
Amortized Cost Fair Value
Due after ten years $ 1,233 $ 1,236
Total $ 1,233 $ 1,236

At June 30, 2025, there were no securities in an unrealized loss position.

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at *December 31, 2024 (*in thousands):

December 31, 2024
**** Less than Twelve Months Twelve Months or Greater Total
Number of <br> Securities Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses
Government National Mortgage Association securities 8 $ 376 $ - $ 718 $ (2 ) $ 1,094 $ (2 )

13

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 5 – Investment Securities Available for Sale (Continued)

The Company’s mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. The change in fair value of these securities is attributable to changes in interest rates and not credit quality, and the Company does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost. Therefore, the Company does not have an allowance for credit losses for these investments as of June 30, 2025 and 2024.

There were no credit losses recognized during the three and six months ended June 30, 2025 and 2024. There were no sales during the three and six months ended June 30, 2025 and 2024.

Note 6 - Loans Receivable, Net and Allowance for Credit Losses

The composition of net loans receivable is as follows (in thousands):

June 30,<br> <br>2025 December 31,<br> <br>2024
Real estate loans:
One-to-four family residential:
Owner occupied $ 36,815 $ 25,927
Non-owner occupied 31,523 33,573
Total one-to-four family residential 68,338 59,500
Multi-family (five or more) residential 41,448 45,412
Commercial real estate 297,999 297,627
Construction 20,205 18,320
Home equity 8,731 5,739
Total real estate loans 436,721 426,598
Commercial business 110,979 114,921
Other consumer 40 46
Total Loans 547,740 541,565
Deferred loan (fees) and costs, net 276 (396 )
Allowance for credit losses (6,326 ) (6,476 )
Net Loans $ 541,690 $ 534,693

14

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Credit Losses (Continued)

The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of *June 30, 2025 (*in thousands):

Term Loans Amortized Cost by Origination Year
As of June 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total
One-to-four family residential owner occupied<br> <br>Risk rating
Pass $ 11,856 $ 7,168 $ 5,472 $ 4,795 $ 3,275 $ 3,950 $ - $ 36,516
Special mention - - - - - - - -
Substandard - - - - - 299 - 299
Doubtful - - - - - - - -
Total one-to-four family residential owner occupied $ 11,856 $ 7,168 $ 5,472 $ 4,795 $ 3,275 $ 4,249 $ - $ 36,815
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied<br> <br>Risk rating
Pass $ 358 $ 1,289 $ 1,906 $ 5,959 $ 11,753 $ 10,258 $ - $ 31,523
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total one-to-four family residential non-owner occupied $ 358 $ 1,289 $ 1,906 $ 5,959 $ 11,753 $ 10,258 - $ 31,523
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Multi-family residential<br> <br>Risk rating
Pass $ - $ 5,272 $ 914 $ 12,546 $ 10,217 $ 12,499 $ - $ 41,448
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total multi-family residential $ - $ 5,272 $ 914 $ 12,546 $ 10,217 $ 12,499 $ - $ 41,448
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Commercial real estate<br> <br>Risk rating
Pass $ 17,195 $ 34,231 $ 41,969 $ 77,483 $ 56,598 $ 57,931 $ 6,336 $ 291,743
Special mention - 124 - 439 - 2,605 - 3,168
Substandard - - 1,859 791 264 - 174 3,088
Doubtful - - - - - - - -
Total commercial real estate $ 17,195 $ 34,355 $ 43,828 $ 78,713 $ 56,862 $ 60,536 $ 6,510 $ 297,999
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Construction<br> <br>Risk rating
Pass $ 3,645 $ 6,283 $ 2,870 $ 3,114 $ - $ - $ - $ 15,912
Special mention - - 97 - 4,196 - - 4,293
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total construction $ 3,645 $ 6,283 $ 2,967 $ 3,114 $ 4,196 $ - $ - $ 20,205
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -

15

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Credit Losses (Continued)
Term Loans Amortized Cost by Origination Year
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
As of June 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total
Home equity<br> <br>Risk rating
Pass $ 680 $ 526 $ 3,084 $ - $ 110 $ 152 $ 4,179 $ 8,731
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total home equity $ 680 $ 526 $ 3,084 $ - $ 110 $ 152 $ 4,179 $ 8,731
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Commercial business<br> <br>Risk rating
Pass $ 11,275 $ 13,621 $ 3,505 $ 37,433 $ 13,075 $ 4,250 $ 20,014 $ 103,173
Special mention - 575 - - 707 542 100 1,924
Substandard - 1,377 - 2,034 2,123 3 345 5,882
Doubtful - - - - - - - -
Total commercial business $ 11,275 $ 15,573 $ 3,505 $ 39,467 $ 15,905 $ 4,795 $ 20,459 $ 110,979
Current period gross charge-offs $ - $ 599 $ - $ 394 $ - $ 29 $ - $ 1,022
Other consumer<br> <br>Risk rating
Pass $ - $ - $ 40 $ - $ - $ - $ - $ 40
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total other consumer $ - $ - $ 40 $ - $ - $ - $ - $ 40
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Total<br> <br>Risk rating
Pass $ 45,009 $ 68,390 $ 59,760 $ 141,330 $ 95,028 $ 89,040 $ 30,529 $ 529,086
Special mention - 699 97 439 4,903 3,147 100 9,385
Substandard - 1,377 1,859 2,825 2,387 302 519 9,269
Doubtful - - - - - - - -
Total $ 45,009 $ 70,466 $ 61,716 $ 144,594 $ 102,318 $ 92,489 $ 31,148 $ 547,740
Current period gross charge-offs $ - $ 599 $ - $ 394 $ - $ 29 $ - $ 1,022

16

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Credit Losses (Continued)

The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of *December 31, 2024 (*in thousands):

Term Loans Amortized Cost by Origination Year
As of December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total
One-to-four family residential owner occupied<br> <br>Risk rating
Pass $ 7,290 $ 5,508 $ 5,078 $ 3,719 $ 1,632 $ 2,401 $ - $ 25,628
Special mention - - - - - - - -
Substandard - - 299 - - - - 299
Doubtful - - - - - - - -
Total one-to-four family residential owner occupied $ 7,290 $ 5,508 $ 5,377 $ 3,719 $ 1,632 $ 2,401 $ - $ 25,927
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
One-to-four family residential non- owner occupied<br> <br>Risk rating
Pass $ 1,363 $ 1,920 $ 6,049 $ 11,949 $ 1,835 $ 10,457 $ - $ 33,573
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total one-to-four family residential non-owner occupied $ 1,363 $ 1,920 $ 6,049 $ 11,949 $ 1,835 $ 10,457 - $ 33,573
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Multi-family residential<br> <br>Risk rating
Pass $ 5,274 $ 923 $ 12,713 $ 13,087 $ 4,068 $ 9,347 $ - $ 45,412
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total multi-family residential $ 5,274 $ 923 $ 12,713 $ 13,087 $ 4,068 $ 9,347 $ - $ 45,412
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Commercial real estate<br> <br>Risk rating
Pass $ 35,478 $ 47,329 $ 80,933 $ 57,927 $ 22,637 $ 46,912 $ 4,394 $ 295,610
Special mention - 746 333 116 - - 50 1,245
Substandard - - 772 - - - - 772
Doubtful - - - - - - - -
Total commercial real estate $ 35,478 $ 48,075 $ 82,038 $ 58,043 $ 22,637 $ 46,912 $ 4,444 $ 297,627
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Construction<br> <br>Risk rating
Pass $ 4,498 $ 3,748 $ 5,546 $ 4,113 $ - $ - $ - $ 17,905
Special mention - 415 - - - - - 415
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total construction $ 4,498 $ 4,163 $ 5,546 $ 4,113 $ - $ - $ - $ 18,320
Current period gross charge-offs $ - $ - $ - $ - $ - $ 187 $ - $ 187

17

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 – Loans Receivable, Net and Allowance for Credit Losses (Continued)

Term Loans Amortized Cost by Origination Year
As of December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total
Home equity<br> <br>Risk rating
Pass $ 529 $ 364 $ - $ 114 $ - $ 169 $ 4,563 $ 5,739
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total home equity $ 529 $ 364 $ - $ 114 $ - $ 169 $ 4,563 $ 5,739
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Commercial business<br> <br>Risk rating
Pass $ 16,655 $ 4,056 $ 48,619 $ 18,554 $ 3,205 $ 1,826 $ 17,854 $ 110,769
Special mention - - - - 574 - 100 674
Substandard 296 - 702 2,387 33 - 60 3,478
Doubtful - - - - - - - -
Total commercial business $ 16,951 $ 4,056 $ 49,321 $ 20,941 $ 3,812 $ 1,826 $ 18,014 $ 114,921
Current period gross charge-offs $ 388 $ - $ 1,167 $ 56 $ - $ - $ - $ 1,611
Other consumer<br> <br>Risk rating
Pass $ 46 $ - $ - $ - $ - $ - $ - $ 46
Special mention - - - - - - - -
Substandard - - - - - - - -
Doubtful - - - - - - - -
Total other consumer $ 46 $ - $ - $ - $ - $ - $ - $ 46
Current period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ -
Total<br> <br>Risk rating
Pass $ 71,133 $ 63,848 $ 158,938 $ 109,463 $ 33,377 $ 71,112 $ 26,811 $ 534,682
Special mention - 1,161 333 116 574 - 150 2,334
Substandard 296 - 1,773 2,387 33 - 60 4,549
Doubtful - - - - - - - -
Total $ 71,429 $ 65,009 $ 161,044 $ 111,966 $ 33,984 $ 71,112 $ 27,021 $ 541,565
Current period gross charge-offs $ 388 $ - $ 1,167 $ 56 $ - $ 187 $ - $ 1,798

The following tables present non-performing loans by classes of the loan portfolio as of June 30, 2025 and *December 31, 2024 (*in thousands):

June 30, 2025
Non-accrual loans 90 Days
With a Without a or More Past
Related Related Due and Total Non-
Allowance Allowance Total **** Accruing **** Performing
One-to-four family residential owner-occupied $ - $ 299 $ 299 $ 391 $ 690
One-to-four family residential non owner-occupied - - - 100 100
Commercial real estate - 1,844 1,844 - 1,844
Commercial business 269 2,344 2,613 687 3,300
Total $ 269 $ 4,487 $ 4,756 $ 1,178 $ 5,934

As part of the discontinued operations of OCH, the Bank retained approximately 60 commercial business loans totaling $4.4 million, which were classified as non-accrual. As of June 30, 2025, the value of these total $1.1 million, made up of approximately 28 loans.  The Bank continues to monitor these loans for collectability.

18

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Credit Losses (Continued)

December 31, 2024
Non-accrual loans 90 Days
With a Without a or More Past
Related Related Due and Total Non-
Allowance Allowance Total Accruing Performing
One-to-four family residential owner occupied $ - $ 299 $ 299 $ 395 $ 694
Commercial real estate - 1,519 1,519 167 1,686
Commercial business 1,097 2,680 3,777 164 3,941
Total $ 1,097 $ 4,498 $ 5,595 $ 726 $ 6,321

For the three and six months ended June 30, 2025 and June 30, 2024 there was no interest income recognized on non-accrual loans on a cash basis. There was $176,000 and $312,000 of interest income foregone on non-accrual loans for the three and six months ended June 30, 2025, and $97,000 and $251,000 for the three and six months ended June 30, 2024.

Occasionally, the Bank modifies loans to borrowers in financial distress by providing principal forgiveness and term extensions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Bank provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

As of June 30, 2025, there was one commercial business loan with an amortized cost of $34,000 which was granted a term extension resulting in a change in the maturity date, from August 2027 to February 2030 in addition to principal forgiveness of $2,000. This loan represented 0.01% of loans receivable, net.

Following is a summary, by loan portfolio class, of changes in the allowance for credit losses for the three and six months ended *June 30, 2025 (*in thousands):

June 30, 2025
1-4 Family<br> <br>Residential Owner Occupied 1-4 Family<br> <br>Residential Non-Owner Occupied Multi-Family<br> <br>Residential Commercial Real Estate Construction Home Equity Commercial Business and Other Consumer Total
For the Three Months Ended June 30, 2025<br> <br>Allowance for credit losses: **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Beginning balance $ 219 $ 175 $ 341 $ 2,351 $ 225 $ 76 $ 3,001 $ 6,388
Charge-offs - - - - - - (604 ) (604 )
Recoveries - - - - - - 78 78
Provision 51 (7 ) (30 ) 13 178 (1 ) 260 464
Ending balance $ 270 $ 168 $ 311 $ 2,364 $ 403 $ 75 $ 2,735 $ 6,326
For the Six Months Ended June 30, 2025<br> <br>Allowance for credit losses: **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Beginning balance $ 177 $ 178 $ 442 $ 2,337 $ 156 $ 56 $ 3,130 $ 6,476
Charge-offs - - - - - - (1,022 ) (1,022 )
Recoveries - - - - - - 82 82
Provision 93 (10 ) (131 ) 27 247 19 545 790
Ending balance $ 270 $ 168 $ 311 $ 2,364 $ 403 $ 75 $ 2,735 $ 6,326

19

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Credit Losses (Continued)

The Bank allocated decreased allowance for credit loss provisions to the multi-family residential loan portfolio classes for the three and six months ended June 30, 2025, due primarily to changes in quantitative factors and qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the construction loan portfolio classes for the three and six months ended June 30, 2025, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the commercial business loan portfolio class for the three and six months ended June 30, 2025, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class.

Following is a summary, by loan portfolio class, of changes in the allowance for credit losses for the three and six months ended *June 30, 2024 (*in thousands):

June 30, 2024
1-4 Family<br> <br>Residential Owner Occupied 1-4 Family<br> <br>Residential Non-Owner Occupied Multi-Family<br> <br>Residential Commercial Real Estate Construction Home Equity Commercial Business and Other Consumer Total
For the Three Months Ended June 30, 2024 **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Allowance for credit losses:
Beginning balance $ 166 $ 210 $ 427 $ 2,881 $ 563 $ 66 $ 3,191 $ 7,504
Charge-offs - - - - - - (114 ) (114 )
Recoveries - - - - - - 3 3
Provision 13 (4 ) 374 (112 ) (104 ) (3 ) (164 ) -
Ending balance $ 179 $ 206 $ 801 $ 2,769 $ 459 $ 63 $ 2,916 $ 7,393
For the Six Months Ended June 30, 2024 **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Allowance for credit losses:
Beginning balance $ 153 $ 219 $ 420 $ 2,784 $ 583 $ 61 $ 2,538 $ 6,758
Charge-offs - - - - - - (452 ) (452 )
Recoveries - - - - - - 3 3
Provision 26 (13 ) 381 (15 ) (124 ) 2 827 1,084
Ending balance $ 179 $ 206 $ 801 $ 2,769 $ 459 $ 63 $ 2,916 $ 7,393

The Bank allocated decreased allowance for credit loss provisions to the commercial real estate loan portfolio classes for the three and six months ended June 30, 2024, due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated decreased allowance for credit loss provisions to the construction loan portfolio class for the three and six months ended June 30, 2024, due primarily to decrease in loan balances and changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the commercial business loan portfolio classes for the six months ended June 30, 2024, due primarily to changes in qualitative factors in this portfolio class. The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due.

20

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Credit Losses (Continued)

The following tables present the classes of the loan portfolio summarized by the past due status as of June 30, 2025 and *December 31, 2024 (*in thousands):

June 30, 2025
30-89 Days Past Due 90 Days or More Past Due Current Total Loans Receivable
One-to-four family residential owner occupied $ 1,707 $ 391 $ 34,717 $ 36,815
One-to-four family residential non-owner occupied 300 100 31,123 31,523
Multi-family residential 1,668 - 39,780 41,448
Commercial real estate 5,750 - 292,249 297,999
Construction 4,196 - 16,009 20,205
Home equity - - 8,731 8,731
Commercial business 402 687 109,890 110,979
Other consumer - - 40 40
Total $ 14,023 $ 1,178 $ 532,539 $ 547,740
December 31, 2024
--- --- --- --- --- --- --- --- ---
30-89 Days Past Due 90 Days or More Past Due Current Total Loans Receivable
One-to-four family residential owner occupied $ 209 $ 694 $ 25,024 $ 25,927
One-to-four family residential non-owner occupied 569 - 33,004 33,573
Multi-family residential 85 - 45,327 45,412
Commercial real estate 10,063 1,686 285,878 297,627
Construction 4,528 - 13,792 18,320
Home equity 35 - 5,704 5,739
Commercial business 873 3,941 110,107 114,921
Other consumer - - 46 46
Total $ 16,362 $ 6,321 $ 518,882 $ 541,565

For the delinquent loans in our portfolio, we have considered our ability to collect the past due interest, as well as the principal balance of the loan, in order to determine whether specific loans should be placed on non-accrual status. In cases where our evaluations have determined that the principal and interest balances are collectible, we have continued to accrue interest.

Note 7 – Goodwill and Other Intangible, Net

On August 1, 2016, Quaint Oak Insurance Agency, LLC began operations by acquiring the renewal rights to a book of business produced and serviced by an independent insurance agency located in New Britain, Pennsylvania, that provides a broad range of personal and commercial insurance coverage solutions. The Company paid $1.0 million for these rights. Based on a valuation, $515,000 of the purchase price was determined to be goodwill and $485,000 was determined to be related to the renewal rights to the book of business and deemed to be an other intangible asset. This other intangible asset is being amortized over a ten year period based upon the annual retention rate of the book of business. The balance of other intangible asset at June 30, 2025 and 2024 was $53,000, and $101,000, respectively, which is net of accumulated amortization of $432,000 and $384,000, respectively. Amortization expense for both the three and six months ended June 30, 2025 and 2024 amounted to approximately $12,000 and $24,000, respectively.

21

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 8 – Deposits

Deposits consist of the following classifications (in thousands):

June 30,<br> <br>2025 December 31,<br> <br>2024
Non-interest bearing checking accounts $ 72,431 $ 59,783
Interest bearing checking accounts^(1)^ 25,000 47,802
Savings accounts 760 492
Money market accounts^(2)^ 121,511 162,285
Certificates of deposit 312,474 282,890
Total deposits $ 532,176 $ 553,252
(1) The Company has identified one major interest bearing brokered checking account deposit customer that accounted for approximately 4.7% of total deposits at June 30, 2025, and one major interest bearing checking account deposit customer, a different customer than the brokered checking account deposit customer, that accounted for approximately 8.6% of total deposits at December 31, 2024. At June 30, 2025, the outstanding balance of the major deposit customer’s interest bearing brokered checking account totaled approximately $25.0 million. At December 31, 2024, the outstanding balance of the major deposit customer’s interest bearing checking account totaled approximately $47.8 million.
--- ---
(2) The Company has identified one major money market deposit customer, a separate customer than the interest bearing checking account deposit customer referred to above in footnote (1), that accounted for approximately 11.3% and 18.1% of total deposits at June 30, 2025 and December 31, 2024, respectively. At June 30, 2025 and December 31, 2024, the combined outstanding balances of the major deposit customer’s money market accounts totaled approximately $60.0 million and $100.0 million, respectively.
--- ---

Note 9 – Borrowings

Federal Home Loan Bank (“FHLB”) advances consist of the following at June 30, 2025 and *December 31, 2024 (*in thousands):

The following table presents the balance and unamortized issuance costs of the subordinated debt and senior debt at June 30, 2025 are as follows (in thousands):

June 30, 2025 December 31, 2024
Amount Weighted Interest Rate Amount Weighted Interest Rate
FHLB Borrowings $ 60,000 4.67 % $ 47,855 4.50 %

The following table presents the balance and unamortized issuance costs of the subordinated debt and senior debt at June 30, 2025 are as follows (in thousands):

Principal Unamortized Debt Issuance Costs Net
6.5% subordinated notes, due December 31, 2028 $ 8,000 $ - $ 8,000
11.0% senior notes, due March 1, 2028 $ 9,750 $ 457 $ 9,293
11.0% senior notes, due March 1, 2028 $ 250 $ 12 $ 238

The balance of senior debt, net of unamortized debt issuance costs, was $9.5 million at June 30, 2025.

The balance of subordinated debt was $8.0 million and $22.0 million at June 30, 2025 and December 31, 2024, respectively.

22

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 10 – Stock Compensation Plans

Employee Stock Ownership Plan ****

The Company maintains an Employee Stock Ownership Plan (ESOP) for the benefit of employees who meet the eligibility requirements of the plan. The Bank may make cash contributions to the ESOP on a quarterly basis which are allocated to participant accounts on an annual basis.

During the three and six months ended June 30, 2025 and 2024, the Company did not make a discretionary contribution of shares to the ESOP and no expense was recognized.

Stock Incentive Plans – Share Awards ****

In May 2018, the shareholders of Quaint Oak Bancorp approved the adoption of the 2018 Stock Incentive Plan (the “2018 Stock Incentive Plan”). The 2018 Stock Incentive Plan approved by shareholders in May 2018 covered a total of 155,000 shares, of which 38,750, or 25%, may be restricted stock awards, for a balance of 116,250 stock options assuming all the restricted shares are awarded.

In May 2023, the shareholders of Quaint Oak Bancorp approved the adoption of the 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”). The 2023 Stock Incentive Plan approved by shareholders in May 2023 covered a total of 175,000 shares, of which 43,750, or 25%, may be restricted stock awards, for a balance of 131,250 stock options assuming all the restricted shares are awarded.

As of June 30, 2025, a total of 34,000 share awards were unvested under the 2018 and 2023 Stock Incentive Plan and up to 12,500 share awards were available for future grant under the 2023 Stock Incentive Plan and none under the 2018 Stock Incentive Plan. The 2018 and 2023 Stock Incentive Plan share awards have vesting periods of five years.

23

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements ****

Note 10 – Stock Compensation Plans

Stock Incentive Plans – Share Awards ****

A summary of share award activity under the Company’s 2018 and 2023 Stock Incentive Plans as of June 30, 2025 and changes during the six months ended June 30, 2025 is as follows:

June 30, 2025
Number of Shares Weighted<br> <br>Average Grant Date Fair Value
Unvested at the beginning of the period 36,000 $ 18.00
Granted - -
Vested - -
Forfeited (2,000 ) 18.00
Unvested at the end of the period 34,000 $ 18.00

Compensation expense on the restricted stock awards is recognized ratably over the five-year vesting period in an amount which is equal to the fair value of the common stock at the date of grant. During both the three months ended June 30, 2025 and 2024, the Company recognized approximately $40,000 of compensation expense. During both the three months ended June 30, 2025 and 2024, the Company recognized a tax benefit of approximately $8,000. During both the six months ended June 30, 2025 and 2024, the Company recognized approximately $81,000 of compensation expense. During both the six months ended June 30, 2025 and 2024, the Company recognized a tax benefit of approximately $17,000. As of June 30, 2025, approximately $466,000 in additional compensation expense will be recognized over the remaining service period of approximately 2.9 years.

Stock Incentive Plans – Stock Options ****

The 2018 Stock Incentive Plan approved by shareholders in May 2018 covered a total of 155,000 shares, of which 116,250 may be stock options assuming all the restricted shares are awarded. The outstanding options granted in 2018 remain exercisable until May 2028, to the extent still outstanding. In May 2023, the shareholders of Quaint Oak Bancorp approved the adoption of the 2023 Stock Incentive Plan. The 2023 Stock Incentive Plan approved by shareholders in May 2018 covered a total of 175,000 shares, of which 131,250 may be stock options assuming all the restricted shares are awarded.

All incentive stock options issued under the 2018 and 2023 Stock Incentive Plans are intended to comply with the requirements of Section 422 of the Internal Revenue Code. Options will become vested and exercisable over a five-year period and are generally exercisable for a period of ten years after the grant date.

As of June 30, 2025, a total of 213,033 grants of stock options were outstanding under the 2018 and 2023 Stock Incentive Plans and 47,000 stock options were available for future grant under the 2023 Stock Incentive Plan. Options will become vested and exercisable over a five-year period and are generally exercisable for a period of ten years after the grant date.

24

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements ****

Note 10 – Stock Compensation Plans (Continued)

Stock Incentive Plans – Stock Options ****

A summary of option activity under the Company’s 2018 and 2023 Stock Incentive Plans as of June 30, 2025 and changes during the six months ended June 30, 2025 is as follows:

June 30, 2025
Number of<br> <br>Shares Weighted<br> <br>Average Exercise Price Weighted<br> <br>Average Remaining Contractual Life (in years)
Outstanding at the beginning of the period 224,033 $ 15.98 6.3
Granted - - -
Exercised - - -
Forfeited (11,000 ) 16.01 6.3
Outstanding at end of period 213,033 $ 16.01 5.9
Exercisable at end of period 136,533 $ 15.06 4.7

During both the three months ended June 30, 2025 and 2024, the Company recognized approximately $21,000 of compensation expense on stock options. During both three months ended June 30, 2025 and 2024, the Company recognized a tax benefit of approximately $1,000. During both the six months ended June 30, 2025 and 2024, the Company recognized approximately $40,000 of compensation expense on stock options. During both the six months ended June 30, 2025 and 2024, the Company recognized a tax benefit of approximately $3,000. As of June 30, 2025, approximately $231,000 in additional compensation expense will be recognized over the remaining service period of approximately 2.9 years.

Note 11 – Fair Value Measurements and Fair Values of Financial Instruments

Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair values estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments.

Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities and therefore, the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows.

25

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements ****

Note 11 – Fair Value Measurements and Fair Values of Financial Instruments

The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing are as follows:

Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level II: Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
--- ---
Level III: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
--- ---

This hierarchy requires the use of observable market data when available.

The methods of determining the fair value of assets and liabilities presented in this note are consistent with our methodologies disclosed in Note 20 of the Company’s 2024 Form 10-K, as the fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit and non-performance risk. Loans are considered a Level 3 classification.

The following is a discussion of assets and liabilities measured at fair value on a recurring and non-recurring basis and valuation techniques applied:

Investment Securities Available For Sale: The fair value of securities available for sale are determined by using matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

We may be required from time to time to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets.

26

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements ****

Note 11 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Individually Evaluated Loans: Individually evaluated loans are carried at the lower of cost or the fair value of the collateral for collateral-dependent loans less estimated costs to sell. Collateral is primarily in the form of real estate. The use of independent appraisals, discounted cash flow models and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and impaired loans are therefore classified within Level 3 of the fair value hierarchy.

The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of *June 30, 2025 (*in thousands):

June 30, 2025
Fair Value Measurements Using:
Total Fair Value Quoted Prices in Active Markets for Identical Assets<br> <br>(Level 1) Significant Other Observable Inputs<br> <br>(Level 2) Unobservable Inputs<br> <br>(Level 3)
Recurring fair value measurements: **** **** **** **** **** **** **** ****
Investment securities available for sale
Government National Mortgage Association mortgage-backed securities $ 1,202 $ - $ 1,202 $ -
Federal National Mortgage Association mortgage- backed securities 34 - 34 -
Total investment securities available for sale $ 1,236 $ - $ 1,236 $ -
Total recurring fair value measurements $ 1,236 $ - $ 1,236 $ -
Nonrecurring fair value measurements **** **** **** **** **** **** **** ****
Collateral-dependent loans $ 3,415 $ - $ - $ 3,415
Total nonrecurring fair value measurements $ 3,415 $ - $ - $ 3,415

The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of *December 31, 2024 (*in thousands):

December 31, 2024
Fair Value Measurements Using:
Total Fair Value Quoted Prices in Active Markets for Identical Assets<br> <br>(Level 1) Significant Other Observable Inputs<br> <br>(Level 2) Unobservable Inputs<br> <br>(Level 3)
Recurring fair value measurements:
Investment securities available for sale
Government National Mortgage Association  mortgage-backed securities $ 1,630 $ - $ 1,630 $ -
Federal National Mortgage Association mortgage- backed securities 36 - 36 -
Total investment securities available for sale $ 1,666 $ - $ 1,666 $ -
Total recurring fair value measurements $ 1,666 $ - $ 1,666 $ -

27

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements ****

Note 11 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used Level 3 inputs to determine fair value as of *June 30, 2025 (*in thousands):

June 30, 2025
Quantitative Information About Level 3 Fair Value Measurements
Total Fair Value Valuation Techniques Unobservable Input Range (Weighted Average)
Collateral-dependent loans $ 3,415 Appraisal of collateral (1) Appraisal adjustments (2) 8% (8%)

_______________

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are identifiable.
(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal.
--- ---

The fair values of the Company’s financial instruments that are not required to be measured or reported at fair value were as follows at June 30, 2025 and December 31, 2024 (in thousands):

**** **** **** **** Fair Value Measurements at
**** **** **** **** June 30, 2025
Carrying Amount Fair Value Estimate Quoted Prices in Active Markets for Identical Assets<br> <br>(Level 1) Significant Other Observable Inputs<br> <br>(Level 2) Unobservable Inputs<br> <br>(Level 3)
Financial Assets **** **** **** **** **** **** **** **** **** ****
Investment in interest-earning time deposits $ 912 $ 952 $ - $ - $ 952
Loans held for sale 56,013 58,253 - 58,253 -
Loans receivable, net 541,690 534,894 - - 534,894
Financial Liabilities **** **** **** **** **** **** **** **** **** ****
Deposits 532,176 539,018 219,701 - 319,317
Subordinated debt 8,000 7,780 - - 7,780
Senior Debt 9,531 9,841 - - 9,841

28

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements ****

Note 11 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Fair Value Measurements at
December 31, 2024
Carrying Amount Fair Value Estimate Quoted Prices in Active Markets for Identical Assets<br> <br>(Level 1) Significant Other Observable Inputs<br> <br>(Level 2) Unobservable Inputs<br> <br>(Level 3)
Financial Assets
Investment in interest-earning time deposits $ 912 $ 964 $ - $ - $ 964
Loans held for sale 64,281 65,624 - 65,624 -
Loans receivable, net 534,693 518,295 - - 518,295
Financial Liabilities
Deposits 553,252 560,701 270,361 - 290,340
FHLB long-term borrowings 2,855 2,848 - - 2,848
Subordinated debt 22,000 21,733 - - 21,733

For cash and cash equivalents, accrued interest receivable, investment in FHLB stock, bank-owned life insurance, accrued interest payable, FHLB short term borrowings, and advances from borrowers for taxes and insurance, the carrying value is a reasonable estimate of the fair value and are considered Level 1 measurements.

Note 12 – Operating Segments

ASC Topic 820 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Company’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company has applied the aggregation criterion set forth in this codification to the results of its operations. The Company's operations currently consist of two reportable operating segments: Banking and Oakmont Commercial. The Company offers different products and services through its two segments. The accounting policies of the segments are generally the same as those of the consolidated company.

The Banking Segment generates its revenues primarily from its lending, deposit gathering and fee business activities. The profitability of this segment's operations depends primarily on its net interest income after provision for credit losses, which is the difference between interest earned on interest earning assets and interest paid on interest bearing liabilities less provision for credit losses. The provision for credit losses is almost entirely dependent on changes in the Banking Segment's loan portfolio and management’s assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. The profitability of this segment’s operations also depends on the generation of non-interest income which includes fees and commissions generated by Quaint Oak Bank and its wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, and Quaint Oak Insurance Agency, LLC, which are included in the Banking Segment for segment reporting purposes as the operating results are monitored by the Chief Operating Decision Maker collectively. The Banking Segment is also subject to an extensive system of laws and regulations that are intended primarily for the protection of depositors and other customers, federal deposit insurance funds and the banking system as a whole. These laws and regulations govern such areas as capital, permissible activities, allowance for loan and lease losses, loans and investments, and rates of interest that can be charged on loans. For segment reporting purposes, Quaint Oak Bancorp, Inc. is included as part of the Company’s Banking segment.

29

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 12 – Operating Segments (Continued)

The Oakmont Commercial Segment originates commercial real estate loans which are sold into the secondary market along with the loans’ servicing rights. The profitability of this segment’s operations depends primarily on the gains realized from the sale of loans and processing fees. The Oakmont Commercial Segment is also subject to an extensive system of laws and regulations that are intended primarily for the protection of consumers.

The following tables presents summary financial information for the reportable segments (in thousands):

As of or for the Three Months Ended June 30,
2025 2024
Quaint Oak Bank(1) Oakmont Commercial, LLC Consolidated Quaint Oak Bank(2) Oakmont Commercial, LLC Consolidated
Net Interest Income $ 4,123 $ 382 $ 4,505 $ 3,853 $ 221 $ 4,074
Provision for (Recovery of) Credit Losses 437 - 437 **** (115 ) 74 **** (41 )
Net Interest Income after Provision for Credit Losses 3,686 382 4,068 **** 3,968 **** 147 **** 4,115
Non-Interest Income **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Mortgage banking, equipment lending and title abstract fees 280 - 280 183 - 183
Real estate sales commissions, net - - - 16 - 16
Insurance commissions 196 - 196 176 - 176
Other fees and services charges (121 ) 2 (119 ) 127 113 240
Net loan servicing income 1 - 1 2 - 2
Income from bank-owned life insurance 32 - 32 28 - 28
Net gain on loans held for sale 658 388 1,046 561 - 561
Gain on the sale of SBA loans 511 - 511 98 - 98
Total Non-Interest Income 1,557 390 1,947 1,191 113 1,304
Non-Interest Expense **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Salaries and employee benefits 3,374 268 3,642 3,313 360 3,673
Directors’ fees and expenses 65 - 65 50 - 50
Occupancy and equipment 432 - 432 416 - 416
Data processing 439 - 439 311 - 311
Professional fees 159 15 174 149 7 156
FDIC deposit insurance assessment 135 - 135 163 - 163
Advertising 93 7 100 69 4 73
Amortization of other intangible 12 - 12 12 - 12
Other 527 7 534 378 4 382
Total Non-Interest Expense 5,236 297 5,533 4,861 375 5,236
Pretax Segment Profit (Loss) $ 7 $ 475 $ 482 $ 298 $ (115 ) $ 183
Segment Assets $ 626,596 $ 44,164 $ 670,760 $ 636,374 $ 65,512 $ 701,886
(1) Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Abstract, Quaint Oak Insurance Agency, QOB Properties, and Oakmont Commercial.
--- ---
(2) Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Real Estate, Quaint Oak Abstract, Quaint Oak Insurance Agency, QOB Properties, and Oakmont Commercial.
--- ---

30

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 12 – Operating Segments (Continued)

As of or for the Six Months Ended June 30,
2025 2024
Quaint Oak Bank(1) Oakmont Commercial, LLC Consolidated Quaint Oak Bank(2) Oakmont Commercial, LLC Consolidated
Net Interest Income $ 8,015 $ 634 $ 8,649 $ 9,109 $ 375 $ 9,484
Provision for Credit Losses 878 - 878 **** 1,010 **** 85 **** 1,095
Net Interest Income after Provision for Credit Losses 7,137 634 7,771 **** 8,099 **** 290 **** 8,389
Non-Interest Income **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Mortgage banking, equipment lending and title abstract fees 426 - 426 390 - 390
Real estate sales commissions, net - - - 20 - 20
Insurance commissions 381 - 381 328 - 328
Other fees and services charges (90 ) 3 (87 ) 346 120 466
Net loan servicing income 5 - 5 3 - 3
Income from bank-owned life insurance 62 - 62 57 - 57
Net gain on loans held for sale 1,000 1,102 2,102 1,166 329 1,495
Gain on the sale of SBA loans 818 - 818 127 - 127
Total Non-Interest Income 2,602 1,105 3,707 2,437 449 2,886
Non-Interest Expense **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Salaries and employee benefits 6,645 647 7,292 6,615 720 7,335
Directors’ fees and expenses 130 - 130 101 - 101
Occupancy and equipment 862 1 863 666 - 666
Data processing 841 - 841 573 - 573
Professional fees 367 30 397 281 16 297
FDIC deposit insurance assessment 256 - 256 336 - 336
Advertising 184 15 199 152 8 160
Amortization of other intangible 24 - 24 24 - 24
Other 1,058 17 1,075 853 16 869
Total Non-Interest Expense 10,367 710 11,077 9,601 760 10,361
Pretax Segment (Loss) Profit $ (628 ) $ 1,029 $ 401 $ 935 $ (21 ) $ 914
Net Loss Attributable to Noncontrolling Interest $ - $ - $ - $ (406 ) $ - $ (406 )
Segment Assets $ 626,596 $ 44,164 $ 670,760 $ 636,374 $ 65,512 $ 701,886
1. Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Abstract, Quaint Oak Insurance Agency, QOB Properties, and Oakmont Commercial.
--- ---
2. Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Real Estate, Quaint Oak Abstract, Quaint Oak Insurance Agency, QOB Properties, and Oakmont Commercial.
--- ---

31

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements Are Subject to Change

This Quarterly Report contains certain forward-looking statements (as defined in the Securities Exchange Act of 1934 and the regulations thereunder). Forward-looking statements are not historical facts but instead represent only the beliefs, expectations or opinions of the Company and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, or words of similar meaning, or future or conditional terms such as “will”, “would”, “should”, “could”, “may”, “likely”, “probably”, or “possibly.” Forward-looking statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks, uncertainties and assumptions, many of which are difficult to predict and generally are beyond the control of and its management, that could cause actual results to differ materially from those expressed in, or implied or projected by, forward-looking statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) economic and competitive conditions which could affect the volume of loan originations, deposit flows and real estate values; (2) the levels of non-interest income and expense and the amount of credit losses; (3) competitive pressure among depository institutions increasing significantly; (4) changes in the interest rate environment causing reduced interest margins; (5) general economic conditions, either nationally or in the markets in which the Company is or will be doing business, being less favorable than expected; (6) political and social unrest, including acts of war or terrorism or (7) legislation or changes in regulatory requirements adversely affecting the business in which the Company is or will be engaged. 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.

General

The Company was formed in connection with the Bank’s conversion to a stock savings bank completed on July 3, 2007. The Company’s results of operations are dependent primarily on the results of the Bank, which is a wholly owned subsidiary of the Company, along with the Bank’s wholly owned subsidiaries. The Bank’s results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on its loan and investment portfolios and the cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by provisions for credit losses, fee income and other non-interest income and non-interest expense. Non-interest expense principally consists of compensation, directors’ fees and expenses, office occupancy and equipment expense, data processing expense, professional fees, advertising expense, FDIC deposit insurance assessment, and other expenses. Our results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact our financial condition and results of operations.

At June 30, 2025 the Bank has five wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, each a Pennsylvania limited liability company. Quaint Oak Mortgage offers mortgage banking in the Lehigh Valley, Delaware Valley and Philadelphia County regions of Pennsylvania and began operations in February, 2019. Quaint Oak Abstract offers title abstract services primarily in the Lehigh Valley region of Pennsylvania and began operation in July 2009. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC began operations in August 2016 and provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021 and operates as a nationwide specialty commercial real estate financing company. On March 29, 2024, Quaint Oak Bank sold its 51% interest in Oakmont Capital Holdings, LLC (“OCH”), a multi-state equipment finance company based in West Chester, Pennsylvania. The decision was based on a number of strategic priorities and other factors. As a result of this action, Quaint Oak Bancorp classified the operations of OCH as discontinued operations under ASC 205-20 and ceased all equipment loan originations.  Also on March 29, 2024, the Company discontinued the operations of Quaint Oak Real Estate, LLC (“Quaint Oak Real Estate”), a 100% wholly owned subsidiary of the Bank. Quaint Oak Real Estate was engaged in the real estate brokerage business. All significant intercompany balances and transactions have been eliminated.

32

Critical Accounting Policies

The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. Accordingly, the consolidated financial statements require certain estimates, judgments, and assumptions, which are believed to be reasonable, based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the periods presented. Critical accounting policies comprise those that management believe are the most critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the current period, or in future periods.

Our critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of June 30, 2025 have remained unchanged from the disclosures presented in our Annual Report on Form 10-K.

Comparison of Financial Condition at June 30, 2025 and December 31, 2024

General. The Company’s total assets at June 30, 2025 were $670.8 million, a decrease of $14.4 million, or 2.1%, from $685.2 million at December 31, 2024. This decrease in total assets was primarily due to a $14.1 million, or 22.4%, decrease in cash and cash equivalents, an $8.3 million, or 12.9%, decrease in loans held for sale, and a $430,000, or 25.8%, decrease in investment securities available for sale. Also contributing to the decrease in assets was a $45,000, or 2.8%, decrease in premises and equipment, net, and a $24,000, or 31.2%, decrease in other intangible, net of accumulated amortization. Partially offsetting the decrease in total assets was a $7.0 million, or 1.3%, increase in loans receivable, net of allowance for credit losses, a $694,000, or 17.5%, increase in accrued interest receivable, a $477,000, or 21.5%, increase in investment in Federal Home Loan Bank stock, at cost, a $228,000, or 2.9%, increase in prepaid expenses and other assets, and a $61,000, or 1.4%, increase in bank-owned life insurance.

Cash and Cash Equivalents. Cash and cash equivalents decreased $14.1 million, or 22.4%, from $63.0 million at December 31, 2024 to $48.9 million at June 30, 2025, due to a decrease in deposits.

Investment in Interest-Earning Time Deposits. Investment in interest-earning time deposits remained at $912,000 at both June 30, 2025 and December 31, 2024.

33

Investment Securities Available for Sale. Investment securities available for sale decreased $430,000, or 25.8%, from $1.7 million at December 31, 2024 to $1.2 million at June 30, 2025, due primarily to the principal repayments on these securities during the six months ended June 30, 2025.

Loans Held for Sale. Loans held for sale decreased $8.3 million, or 12.9%, from $64.3 million at December 31, 2024 to $56.0 million at June 30, 2025 as the Bank’s mortgage banking subsidiary, Quaint Oak Mortgage, LLC, originated $55.3 million of one-to-four family residential loans during the six months ended June 30, 2025 and sold $51.2 million of loans in the secondary market. The Bank’s commercial real estate subsidiary, Oakmont Commercial, LLC, originated $19.0 million of commercial real estate loans during the six months ended June 30, 2025 and sold $28.7 million of loans in the secondary market during this same period. Additionally, the Bank originated $6.0 million of SBA loans and sold $8.7 million of SBA loans in the secondary market in the same period.

Loans Receivable, Net. Loans receivable, net, increased $7.0 million, or 1.3%, to $541.7 million at June 30, 2025 from $534.7 million December 31, 2024. The largest increases within the loan portfolio occurred in one-to-four family owner occupied loans which increased $10.9 million, or 42.0%, home equity loans which increased $3.0 million, or 52.1%, construction loans which increased $1.9 million, or 10.3%, and commercial real estate loans, which increased $372,000, or 0.1%. Partially offsetting these increases were multi-family residential loans which decreased $4.0, or 8.7%, commercial business loans which decreased $3.9 million, or 3.4%, and one-to-four family non-owner occupied loans which decreased $2.1 million, or 6.1%.

The following table summarizes the industry concentrations within the multi-family and commercial real estate portfolios:

June 30,<br> <br>2025 December 31,<br> <br>2024
(in Thousands)
Real Estate Rental and Leasing $ 131,562 $ 135,874
Health Care and Social Assistance **** 36,116 35,864
Accommodation and food services **** 33,295 33,811
Construction **** 22,703 25,087
Retail trade **** 22,664 24,657
Manufacturing **** 22,627 16,515
Other services (except public administration) **** 20,032 21,321
Arts, entertainment, and recreation **** 13,625 14,497
Finance and insurance **** 8,356 6,162
Wholesale trade **** 8,201 8,349
Transportation and warehousing **** 6,049 5,901
Administrative and support – waste services **** 5,376 4,612
Professional, scientific and technical services **** 5,002 5,686
Other **** 3,839 4,703
Total $ 339,447 $ 343,039

The commercial real estate and multi-family portfolio consists of 55% owner occupied commercial real estate loans and 45% of non-owner occupied commercial real estate loans as of June 30, 2025.

34

The following table summarizes the non-owner occupied commercial real estate portfolio and the percent of total loans receivable, net.

June 30, 2025 December 31, 2024
Balance Percent of<br> <br>Total Loans Receivable, net Balance Percent of<br> <br>Total Loans Receivable, net
(Dollars in Thousands)
Real estate rental and leasing $ 119,696 22.4 % $ 123,103 23.0 %
Construction 12,071 2.3 14,987 2.8
Health care and social assistance 5,039 0.9 8,345 1.6
Finance and insurance 4,876 0.9 4,948 0.9
Other services (except public administration) 4,254 0.8 4,347 0.8
Retail Trade 2,575 0.5 2,153 0.4
Accommodation and Food Services 1,681 0.3 1,733 0.3
Other 2,122 0.4 2,172 0.5
Total $ 152,314 28.5 % $ 161,788 30.3 %

The following table summarizes the non-owner occupied commercial real estate rental and leasing loan portfolio outstanding balance, total commitment and loan to value (“LTV”) ratio by geographic location:

June 30, 2025 December 31, 2024
Balance Total Commitment Weighted Average LTV Balance Total Commitment Weighted Average LTV
(Dollars in Thousands)
Pennsylvania ^(1)^ $ 42,869 $ 84,313 50.8 % $ 44,959 $ 86,035 52.3 %
Philadelphia 34,712 75,760 45.8 36,142 77,810 46.4
Delaware 15,387 32,125 47.9 15,583 32,125 48.5
New Jersey 9,481 19,315 49.1 9,705 19,315 50.2
New York 6,050 10,410 58.1 6,133 10,410 58.9
Ohio 6,817 10,100 67.5 6,914 10,100 68.5
Other 4,380 7,570 57.9 3,667 6,020 60.9
Total $ 119,696 $ 239,593 50.0 % $ 123,103 $ 241,815 50.9 %
(1) Pennsylvania excluding Philadelphia
--- ---

The following table summarizes the non-owner occupied commercial real estate construction loan portfolio outstanding balance, total commitment and LTV ratio by geographic location:

June 30, 2025 **** December 31, 2024
Balance Total Commitment Weighted Average LTV Balance Total Commitment Weighted Average LTV
(Dollars in Thousands)
Pennsylvania ^(1)^ $ 7,353 $ 13,996 52.5 % $ 7,477 $ 13,996 53.4 %
Philadelphia 4,718 9,685 48.7 4,782 9,685 49.4
New Jersey - - - 2,728 8,200 33.3
Total $ 12,071 $ 23,681 51.0 % $ 14,987 $ 31,881 47.0 %
(1) Pennsylvania excluding Philadelphia
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Deposits. Total deposits decreased $21.1 million, or 3.8%, to $532.2 million at June 30, 2025 from $553.3 million at December 31, 2024. This decrease in deposits was primarily attributable to a decrease of $40.8 million, or 25.1%, in money market accounts, and a decrease of $22.8 million, or 47.7%, in interest bearing checking accounts as the Company exited one of its correspondent banking relationships. These decreases in deposits were partially offset by an increase of $29.6 million, or 10.5%, in certificates of deposit, an increase of $12.6 million, or 21.2%, in non-interest bearing checking accounts, and a $268,000, or 54.5%, increase in savings accounts.

The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was $239.5 million, or 45.0% of total deposits at June 30, 2025.

Borrowings. Total Federal Home Loan Bank (FHLB) borrowings increased $12.1 million, or 25.4%, to $60.0 million at June 30, 2025 from $47.9 million at December 31, 2024 as the Bank utilized a portion of its borrowing capacity for liquidity purposes.

Senior debt. Senior debt, net of unamortized debt issuance costs, increased $9.5 million from none at December 31, 2024 as the Company entered into a Senior Unsecured Note Purchase Agreement with certain institutional accredited investors pursuant to which the Company issued an aggregate of $9.75 million in aggregate principal amount of Fixed Rate Unsecured Senior Notes due March 1, 2028 (the “Senior Debt Notes”) in a private placement. The Company issued to an accredited individual investor an additional $250,000 in principal amount of the Senior Debt Notes as of March 4, 2025 for a total of $10.0 million in aggregate principal amount. The Senior Debt Notes bear interest at a fixed annual rate of 11.00%, payable semi-annually in arrears on March 1 and September 1 of each year, beginning September 1, 2025.

Subordinated debt. Subordinated debt, net of unamortized debt issuance costs, decreased $14.0 million, or 63.6%, to $8.0 million at June 30, 2025 from $22.0 million at December 31, 2024 as the Company used the net proceeds from the sale of the Senior Debt Notes to repay a portion of the outstanding $14.0 million aggregate principal amount of its 8.5% Fixed Rate Subordinated Notes upon their maturity on March 15, 2025.

Stockholders’ Equity. Total stockholders’ equity from continuing operations decreased $360,000, or 0.7%, to $52.3 million at June 30, 2025 from $52.6 million at December 31, 2024. Contributing to the decrease were dividends paid of $683,000, and purchase of treasury stock of $31,000. The decrease in stockholders’ equity was partially offset by net income for the six months ended June 30, 2025 of $189,000, amortization of stock awards and options under our stock compensation plans of $121,000, the reissuance of treasury stock under the Bank’s 401(k) Plan of $41,000, and other comprehensive income of $3,000.

Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024

General. Net income amounted to $272,000 for the three months ended June 30, 2025, an increase of $172,000, or 172.0%, compared to net income of $100,000 for the three months ended June 30, 2024. The increase in net income on a comparative quarterly basis was primarily the result of a decrease in interest expense of $1.1 million, and an increase in non-interest income of $643,000, partially offset by a decrease in interest and dividend income of $703,000, an increase in the provision for credit losses of $478,000, an increase in non-interest expense of $297,000, and an increase in the net provision for income taxes from continuing operations of $127,000.

Net Interest Income. Net interest income increased $431,000, or 10.6% to $4.5 million for the three months ended June 30, 2025 from $4.1 million for the three months ended June 30, 2024. The increase was driven by a $1.1 million, or 16.6%, decrease in interest expense, partially offset by a $703,000, or 6.5%, decrease in interest and dividend income.

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Interest and Dividend Income. The $703,000, or 6.5%, decrease in interest and dividend income for the quarter was primarily due to a $66.2 million decrease in the average balance of due from banks – interest earning, which decreased from $103.9 million for the three months ended June 30, 2024 to $37.7 million for the three months ended June 30, 2025, and had the effect of decreasing interest income $960,000, a decrease in the average balance of loans receivable, net, which decreased $15.9 million from $605.3 million for the three months ended June 30, 2024 to $589.4 million for the three months ended June 30, 2025 and had the effect of decreasing interest income $245,000, and a decrease in the average yield on due from banks – interest earning, which decreased from 5.80% for the three months ended June 30, 2024 to 4.21% for the three months ended June 30, 2025 and had the effect of decreasing interest income $150,000. Partially offsetting the decrease in interest and dividend income was a 42 basis point increase in the average yield on loans receivable, net from 6.16% for the three months ended June 30, 2024 to 6.58% for the three months ended June 30, 2025, and had the effect of increasing interest income $622,000.

Interest Expense. The $1.1 million, or 16.6%, decrease in interest expense for the three months ended June 30, 2025 over the comparable period in 2024 was driven by a $1.6 million, or 25.5%, decrease in interest expense on deposits, which was primarily attributable to a decrease in average balances of interest-bearing checking account deposits as a result of reduced correspondent banking activity and reduction in a money market deposit through a deposit placement agreement. Also contributing to the decrease in interest expense for the three months ended June 30, 2025 was a $320,000, or 65.6%, decrease in interest expense on subordinated debt. These decreases in interest expense were partially offset by a $481,000, or 288.0%, increase in the interest expense on Federal Home Loan Bank borrowings due to a $38.3 million, or 212.1%, increase in the average balance of Federal Home Loan Bank borrowings which increased from $18.0 million for the three months ended June 30, 2024 to $56.3 million for the three months ended June 30, 2025, and a $275,000 increase in interest expense on senior debt. The average interest rate spread increased from 1.57% for the three months ended June 30, 2024 to 2.19% for the three months ended June 30, 2025 and the net interest margin increased from 2.28% for the three months ended June 30, 2024 to 2.85% for the three months ended June 30, 2025.

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Average Balances, Net Interest Income, Yields Earned and Rates Paid. The following table shows for the periods indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. All average balances are based on daily balances.

Three Months Ended June 30,
2025 2024
Average<br> <br>Balance Interest Average<br> <br>Yield/<br> <br>Rate Average<br> <br>Balance Interest Average<br> <br>Yield/<br> <br>Rate
(Dollars in thousands)
Interest-earning assets:
Due from banks, interest-earning $ 37,731 $ 397 4.21 % $ 103,930 $ 1,507 5.80 %
Investment in interest-earning time deposits 912 26 11.40 912 9 3.95
Investment securities available for sale 1,366 31 9.08 2,141 39 7.29
Loans receivable, net (1) (2) 589,433 9,695 6.58 605,337 9,317 6.16
Investment in FHLB stock 2,618 45 6.88 1,084 25 9.23
Total interest-earning assets 632,060 10,194 6.45 % 713,404 10,897 6.11 %
Non-interest-earning assets 18,772 15,585
Total assets $ 650,832 $ 728,989
Interest-bearing liabilities:
Savings accounts $ 559 $ - 0.00 % $ 805 $ 1 0.50 %
Money market accounts 142,880 1,270 3.56 215,795 2,450 4.54
Checking accounts 10,714 66 2.46 120,215 1,448 4.82
Certificate of deposit accounts 305,769 3,262 4.27 223,755 2,269 4.06
Total deposits 459,922 4,598 4.00 560,570 6,168 4.40
FHLB borrowings 56,308 648 4.60 18,043 167 3.70
Subordinated debt 8,000 168 8.40 22,002 488 8.89
Senior debt 9,506 275 11.57 - - -
Total interest-bearing liabilities 533,736 5,689 4.26 % 600,615 6,823 4.54 %
Non-interest-bearing liabilities 64,969 77,328
Total liabilities 598,705 677,943
Stockholders’ Equity 52,127 51,046
Total liabilities and Stockholders’ Equity $ 650,832 $ 728,989
Net interest-earning assets $ 98,324 $ 112,789
Net interest income; average interest rate spread $ 4,505 2.19 % $ 4,074 1.57 %
Net interest margin (3) 2.85 % 2.28 %
Average interest-earning assets to average interest-bearing liabilities 118.42 % 118.78 %

________________________

(1)         Includes loans held for sale.

(2)         Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for credit losses.

(3)         Equals net interest income divided by average interest-earning assets.

Provision for Credit Losses. The $478,000, or 1,165.9%, increase in the provision for credit losses for the three months ended June 30, 2025 over the three months ended June 30, 2024 was primarily due to an increase in charge-offs during the three months ended June 30, 2025, partially offset by a decrease in loans receivable, net.

Non-Interest Income. The $643,000, or 49.3%, increase in non-interest income for the three months ended June 30, 2025 over the comparable period in 2024 was primarily attributable to a $485,000, or 86.5%, increase in net gain on sale of loans, a $413,000, or 421.4%, increase in gain on sale of SBA loans, a $97,000, or 53.0%, increase in mortgage banking, equipment lending and title abstract fees, and a $20,000, or 11.4%, increase in insurance commissions. These increases were partially offset by a $359,000, or 149.6%, decrease in other fees and service charges, and a $16,000, or 100.0%, decrease in real estate sales commissions, net. The reduction in other fees and service charges is attributable to reduced correspondent banking activities.

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Non-Interest Expense. The $297,000, or 5.7%, increase in non-interest expense for the three months ended June 30, 2025 over the comparable period in 2024 was primarily due to a $152,000, or 39.8%, increase in other expense, a $128,000, or 41.2%, increase in data processing expense, a $27,000, or 37.0%, increase in advertising expense, an $18,000, or 11.5%, increase in professional fees, a $16,000, or 3.9%, increase in occupancy and equipment expense, and a $15,000, or 30.0%, increase in directors’ fees and expenses. These increases were partially offset by a $31,000, or 0.8%, decrease in salaries and employee benefits expense, and a $28,000, or 17.2%, decrease in FDIC deposit insurance assessment.

Provision for Income Tax. The provision for income tax from continuing operations increased $127,000, or 153.0%, from $83,000 for the three months ended June 30, 2024 to $210,000 for the three months ended June 30, 2025 due primarily to an increase in pre-tax income.

Comparison of Operating Results for the Six Months Ended June 30, 2025 and 2024

General. Net income amounted to $189,000 for the six months ended June 30, 2025, a decrease of $784,000, or 80.6%, compared to net income of $973,000 for the six months ended June 30, 2024. The decrease in net income on a comparative quarterly basis was primarily the result of a decrease in interest and dividend income of $2.9 million, an increase in non-interest expense of $716,000, and a decrease in net income from discontinued operations of $406,000, partially offset by a decrease in interest expense of $2.1 million, an increase in non-interest income of $821,000, a decrease in the provision for credit losses of $217,000, and a decrease in the net provision for income taxes from continuing operations of $135,000.

Net Interest Income. Net interest income decreased $835,000, or 8.8% to $8.6 million for the six months ended June 30, 2025 from $9.5 million for the six months ended June 30, 2024. The decrease was driven by a $2.9 million, or 12.6%, decrease in interest and dividend income, partially offset by a $2.1 million, or 15.2%, decrease in interest expense.

Interest and Dividend Income. The $2.9 million, or 12.6%, decrease in interest and dividend income was primarily due to a decrease in the average balance of loans receivable, net, which decreased $42.8 million from $631.9 million for the six months ended June 30, 2024 to $589.1 million for the six months ended June 30, 2025 and had the effect of decreasing interest income $1.4 million, a $49.7 million decrease in the average balance of due from banks – interest earning, which decreased from $86.8 million for the six months ended June 30, 2024 to $37.1 million for the six months ended June 30, 2025, and had the effect of decreasing interest income $1.3 million, and a 124 basis point decrease in the average yield on due from banks - interest earning from 5.27% for the six months ended June 30, 2024 to 4.03% for the six months ended June 30, 2025, and had the effect of decreasing interest income $230,000.

Interest Expense. The $2.1 million, or 15.2%, decrease in interest expense for the six months ended June 30, 2025 over the comparable period in 2024 was driven by a $2.8 million, or 23.3%, decrease in interest expense on deposits, which was primarily attributable to a decrease in the average balance of interest-bearing deposits as a result of reduced correspondent banking activity and reduction in a money market deposit through a deposit placement agreement. Also contributing to the decrease in interest expense for the six months ended June 30, 2025 was a $352,000, or 36.2% decrease in interest expense on subordinated debt. These decreases in interest expense were partially offset by $723,000 increase in the interest expense on Federal Home Loan Bank borrowings due to a $29.1 million, or 135.1%, increase in the average balance of Federal Home Loan Bank borrowings which increased from $21.6 million for the six months ended June 30, 2024 to $50.7 million for the six months ended June 30, 2025, and a $391,000 increase in interest expense on senior debt for the six months ended June 30, 2025. The average interest rate spread increased from 1.82% for the six months ended June 30, 2024 to 2.13% for the six months ended June 30, 2025 while the net interest margin increased from 2.62% for the six months ended June 30, 2024 to 2.74% for the six months ended June 30, 2025.

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Average Balances, Net Interest Income, Yields Earned and Rates Paid. The following table shows for the periods indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. All average balances are based on daily balances.

Six Months Ended June 30,
2025 2024
Average<br> <br>Balance Interest Average<br> <br>Yield/<br> <br>Rate Average<br> <br>Balance Interest Average<br> <br>Yield/<br> <br>Rate
(Dollars in thousands)
Interest-earning assets:
Due from banks, interest-earning $ 37,095 $ 747 4.03 % $ 86,762 $ 2,288 5.27 %
Investment in interest-earning time deposits 912 35 7.68 1,158 26 4.49
Investment securities available for sale 1,479 64 8.65 2,220 77 6.94
Loans receivable, net (1) (2) 589,055 19,218 6.53 631,881 20,550 6.50
Investment in FHLB stock 2,458 56 4.56 1,198 78 13.02
Total interest-earning assets 630,999 20,120 6.38 % 723,219 23,019 6.37 %
Non-interest-earning assets 18,954 17,735
Total assets $ 649,953 $ 740,954
Interest-bearing liabilities:
Savings accounts $ 505 $ 1 0.40 % $ 863 $ 1 0.23 %
Money market accounts 151,107 2,708 3.58 216,519 4,906 4.53
Checking accounts 19,444 354 3.64 110,912 2,796 5.04
Certificate of deposit accounts 295,337 6,265 4.24 222,937 4,451 3.99
Total deposits 466,393 9,328 4.00 551,231 12,154 4.41
FHLB short-term borrowings 50,667 1,132 4.47 21,556 409 3.79
FRB long-term borrowings 25 1 8.00 - - -
Subordinated debt 13,271 619 9.34 21,991 972 8.84
Senior debt 9,607 391 8.14 - - -
Total interest-bearing liabilities 539,963 11,471 4.25 % 594,778 13,535 4.55 %
Non-interest-bearing liabilities 57,679 95,851
Total liabilities 597,642 690,629
Stockholders’ Equity 52,311 50,325
Total liabilities and Stockholders’ Equity $ 649,953 $ 740,954
Net interest-earning assets $ 91,036 $ 128,441
Net interest income; average interest rate spread $ 8,649 2.13 % $ 9,484 1.82 %
Net interest margin (3) 2.74 % 2.62 %
Average interest-earning assets to average interest-bearing liabilities 116.86 % 121.59 %

________________________

(1)         Includes loans held for sale.

(2)         Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for credit losses.

(3)         Equals net interest income divided by average interest-earning assets.

Provision for Credit Losses. The $217,000, or 19.8%, decrease in the provision for credit losses for the six months ended June 30, 2025 over the six months ended June 30, 2024 was primarily due to a decrease in loans receivable, net, partially offset by an increase in charge-offs during the six months ended June 30, 2025.

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Non-Interest Income. The $821,000, or 28.4%, increase in non-interest income for the six months ended June 30, 2025 over the comparable period in 2024 was primarily attributable to a $691,000, or 544.1%, increase in gain on sale of SBA loans, a $607,000, or 40.6%, increase in net gain on sale of loans, a $53,000, or 16.2%, increase in insurance commissions, and a $36,000, or 9.2%, increase in mortgage banking, equipment lending and title abstract fees. These increases were partially offset by a $553,000, or 118.7%, decrease in other fees and service charges, and a $20,000, or 100.0%, decrease in real estate sales commissions, net.

Non-Interest Expense. The $716,000, or 6.9%, increase in non-interest expense for the six months ended June 30, 2025 over the comparable period in 2024 was primarily due to a $268,000, or 46.8%, increase in data processing expense, a $206,000, or 23.7%, increase in other expense, a $197,000, or 29.6%, increase in occupancy and equipment expense, a $100,000, or 33.7%, increase in professional fees, a $39,000, or 24.4%, increase in advertising expense, and a $29,000, or 28.7%, increase in directors’ fees and expenses. These increases were partially offset by an $80,000, or 23.8%, decrease in FDIC deposit insurance assessment, and a $43,000, or 0.6%, decrease in salaries and employee benefits expense.

Provision for Income Tax. The provision for income tax from continuing operations decreased $135,000, or 38.9%, from $347,000 for the six months ended June 30, 2024 to $212,000 for the six months ended June 30, 2025 due primarily to a decrease in pre-tax income.

Operating Segments

The Company’s operations consist of two reportable operating segments: Banking and Oakmont Commercial. Our Banking Segment generates revenues primarily from its lending, deposit gathering and fee business activities. Our Oakmont Commercial Segment originates commercial real estate loans which are sold into the secondary market along with the loans’ servicing rights. The profitability of this segment’s operations depends primarily on the gains realized from the sale of loans, processing fees, and service fees. Detailed segment information appears in Note 12 in the Notes to Unaudited Consolidated Financial Statements.

Our Banking Segment reported a pre-tax segment profit (“PTSP”) for the three months ended June 30, 2025 of $7,000, a $291,000, or 97.7%, decrease from the same period in 2024.  This decrease in PTSP was primarily due to a $552,000, or 480.0%, increase in the provision for credit losses, and a $375,000, or 7.7%, increase in non-interest expense. This decrease was partially offset by a $366,000, or 30.7%, increase in non-interest income, and a $270,000, or 7.0%, increase in net interest income. The increase in non-interest expense was primarily due to a $149,000, or 39.4% increase in other expense, a $128,000, or 41.2%, increase in data processing expense, a $24,000, or 34.8%, increase in advertising expense, a $16,000, or 3.8%, increase in occupancy and equipment expense, and a $15,000, or 30.0%, increase in directors’ fees and expenses. The increase in non-interest income is primarily attributable to a $413,000, or 421.4%, increase in gain on sale of SBA loans,  a $97,000, or 17.3%, increase in the net gain on loans held for sale, and a $97,000, or 53.0%, increase in mortgage banking, equipment lending and title abstract fees, partially offset by a $248,000, or 195.3% decrease in other fees and service charges.

Our Oakmont Commercial, LLC Segment reported a pre-tax segment profit (“PTSP”) for the three months ended June 30, 2025 of $475,000, a $590,000, or 513.0%, increase from the same period in 2024.  The increase in PTSP was primarily due to a $277,000, or 245.1%, increase in non-interest income, a $161,000, or 72.9%, increase in net interest income, a $78,000, or 20.8%, decrease in non-interest expense, and an $74,000, or 100.0%, decrease in the provision for credit losses. The increase in non-interest income was primarily due to a $388,000, or 100.0%, increase net gain on loans held for sale, partially offset by a $111,000, or 98.2%, decrease in other fees and service charges. The decrease in non-interest expense was primarily due to a $92,000, 25.6%, decrease in salaries and employee benefits expense, partially offset by an $8,000, or 114.3% increase in professional fees, a $3,000, or 75.0%, increase in advertising expense, and a $3,000, or 75.0%, increase in other non-interest expense.

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Our Banking Segment reported a pre-tax segment loss (“PTSL”) for the six months ended June 30, 2025 of $628,000, a $1.6 million, or 167.2%, decrease from the same period in 2024.  This increase in PTSL was primarily due to a $1.1 million, or 12.0%, decrease in net interest income, and a $766,000, or 8.0%, increase in non-interest expense, partially offset by a $165,000, or 6.8%, increase in non-interest income, and a $132,000, or 13.1%, decrease in the provision for credit losses. The increase in non-interest expense was primarily due to a $268,000, or 46.8%, increase in data processing expense, a $205,000, or 24.0% increase in other expense, a $196,000, or 29.4%, increase in occupancy and equipment expense, and a $29,000, or 28.7%, increase in directors’ fees and expenses. The increase in non-interest income is primarily attributable to a $691,000, or 544.1%, increase in gain on sale of SBA loans, a $53,000, or 16.2%, increase in insurance commissions, and a $36,000, or 9.2%, increase in mortgage banking, equipment lending and title abstract fees, partially offset by a $166,000, or 14.2%, decrease in the net gain on loans held for sale, and a $436,000, or 126.0% decrease in other fees and service charges.

Our Oakmont Commercial, LLC Segment reported a pre-tax segment profit (“PTSP”) for the six months ended June 30, 2025 of $1.0 million, a $1.1 million increase from the same period in 2024.  The increase in PTSP was primarily due to a $656,000, or 146.1%, increase in non-interest income, a $259,000, or 69.1%, increase in net interest income, an $85,000, or 100.0%, decrease in the provision for credit losses, and a $50,000, or 6.6%, decrease in non-interest expense.  The increase in non-interest income was primarily due to a $773,000, or 235.0%, increase net gain on loans held for sale, partially offset by a $117,000, or 97.5%, decrease in other fees and service charges. The decrease in non-interest expense was primarily due to a $73,000, 10.1%, decrease in salaries and employee benefits expense, partially offset by a $14,000, or 87.5% increase in professional fees, a $7,000, or 87.5%, increase in advertising expense, a $1,000, or 100.0%, increase in occupancy and equipment expense, and a $1,000, or 6.3%, increase in other non-interest expense.

Liquidity and Capital Resources

The Company’s primary sources of funds are deposits, amortization and prepayment of loans and to a lesser extent, loan sales and other funds provided from operations.  While scheduled principal and interest payments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition.  The Company sets the interest rates on its deposits to maintain a desired level of total deposits.  Borrowings may also be used on a short-term basis to compensate for reductions in the availability of funds from other sources and on a longer-term basis for general business purposes. In addition, the Company invests excess funds in short-term interest-earning assets that provide additional liquidity. At June 30, 2025, the Company's cash and cash equivalents amounted to $48.9 million.

The Company uses its liquidity to fund existing and future loan commitments, to fund deposit outflows, to invest in other interest-earning assets and to meet operating expenses. At June 30, 2025, Quaint Oak Bank had outstanding commitments to originate loans of $32.4 million, commitments under unused lines of credit of $52.8 million, and $1.1 million under standby letters of credit.

At June 30, 2025, certificates of deposit scheduled to mature in one year or less totaled $206.0 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case.

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In addition to cash flow from loan payments and prepayments and deposits, the Company has significant borrowing capacity available to fund liquidity needs. If the Company requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Pittsburgh (FHLB), which provide an additional source of funds. As of June 30, 2025, we had $60.0 million of borrowings from the FHLB and had $260.6 million in borrowing capacity. Under terms of the collateral agreement with the FHLB of Pittsburgh, we pledge residential mortgage loans as well as Quaint Oak Bank’s FHLB stock as collateral for such advances. In addition, as of June 30, 2025, Quaint Oak Bank had $21.0 million in borrowing capacity with the Federal Reserve Bank of Philadelphia. We also use brokered deposits as a funding source. As of June 30, 2025, the Company had $57.0 million of brokered deposits, $25.0 million of which were sourced from one brokered interest-bearing checking account deposit relationship.

The Company identified one major money market deposit customer that accounted for approximately 11.3% of total deposits at June 30, 2025. The outstanding balance of the major deposit customer totaled approximately $60.0 million at June 30, 2025.  The Company identified one major interest bearing brokered checking deposit customer that accounted for approximately 4.7% of total deposits at June 30, 2025. The outstanding balance of the major deposit customer's interest bearing brokered checking account totaled approximately $25.0 million at June 30, 2025. If these deposits were to be withdrawn in whole or in part, replacement of the funds may require us to pay higher interest rates on retail deposits or brokered deposits which would have an adverse effect on our net interest income and net income.  The replacement of these deposits with other sources of funding such as borrowings could also increase our overall cost of funds and would negatively impact our results of operations. The Company has significant borrowing capacity available to fund liquidity needs, including borrowing agreements with the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia described above.

Any requirements that we increase our capital ratios or liquidity could require our seeking additional sources of capital through a capital raise that would necessitate issuing additional securities, which could dilute our outstanding shares of our common stock.  We may also raise capital through the issuance of preferred stock and senior or subordinated debt, or liquidate certain assets, perhaps on terms that are unfavorable to us or contrary to our business plan.  In March 2024, we sold our 51% ownership interest in OCH, and recognized a $1.4 million gain on sale. In December 2024, the Company recorded a pre-tax gain, after deduction of transaction-related expenses, of $1.5 million in connection with a sale/leaseback transaction on its property that it owned at 1710 Union Blvd, Allentown, PA 18109.

The Company and Quaint Oak Bank are subject to the regulation and supervision of the Board of Governors of the Federal Reserve System (the “FRB”), the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking and Securities, each of which may impose restrictions on our ability to pay dividends, repurchase shares or incur additional indebtedness. As the subsidiary of a stock saving and loan holding company, Quaint Oak must file a notice with the appropriate Federal Reserve Bank at least 20 days before a proposed declaration of a dividend to the Company. Under applicable banking regulations, Quaint Oak Bank must file an application for FDIC approval of a capital distribution if: the total capital distributions for the calendar year exceed the sum of Quaint Oak Bank’s net income for that year to date plus the retained net income for the preceding two years; Quaint Oak Bank would not be at least adequately capitalized following the distribution; the distribution would violate any applicable statute, regulation, agreement or FDIC-imposed condition; or Quaint Oak Bank is not otherwise eligible for expedited treatment of its filings with the FDIC. The inability to pay dividends from Quaint Oak Bank to the Company could negatively impact our ability to pay dividends to shareholders, pay interest on our debt or engage in stock repurchases. The Company currently is restricted in declaring or paying dividends, engaging in share repurchases or directly or indirectly, incurring, increasing, or guaranteeing any debt, including any interest payments due on subordinated debentures, without the prior written approval of the FRB. To date, the FRB has approved all requests to pay dividends and interest on subordinated debt, however, no assurance can be given that such approvals will be received in the future.

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The following table summarizes the Company's primary and secondary sources of liquidity which were available at June 30, 2025 (dollars in thousands).

June 30, 2025
(Dollars in thousands)
Cash and cash equivalents $ 48,891
Unpledged investment securities, amortized cost 1,236
FHLB advance availability 200,539
Federal Reserve discount window availability 20,971
Total primary and secondary sources of available liquidity $ 271,637

Total stockholders’ equity from continuing operations decreased $360,000, or 0.7%, to $52.3 million at June 30, 2025 from $52.6 million at December 31, 2024. Contributing to the decrease were dividends paid of $683,000, and purchase of treasury stock of $31,000. The decrease in stockholders’ equity was partially offset by net income for the six months ended June 30, 2025 of $189,000, amortization of stock awards and options under our stock compensation plans of $121,000, the reissuance of treasury stock under the Bank’s 401(k) Plan of $41,000, and other comprehensive income of $3,000.

For further discussion of the stock compensation plans, see Note 10 in the Notes to Unaudited Consolidated Financial Statements contained elsewhere herein.

Quaint Oak Bank is required to maintain regulatory capital sufficient to meet tier 1 leverage, common equity tier 1 capital, tier 1 risk-based and total risk-based capital ratios of at least 4.00%, 4.50%, 6.00%, and 8.00%, respectively. At June 30, 2025, Quaint Oak Bank exceeded each of its capital requirements with ratios of 10.41%, 12.49%, 12.49% and 13.73%, respectively. As a small savings and loan holding company eligible for exemption, the Company is not currently subject to any regulatory capital requirements.

Off-Balance Sheet Arrangements

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used primarily to manage customers' requests for funding and take the form of loan commitments and lines of credit. Our exposure to credit loss from non-performance by the other party to the above-mentioned financial instruments is represented by the contractual amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. In general, we do not require collateral or other security to support financial instruments with off–balance sheet credit risk.

Commitments. At June 30, 2025, we had unfunded commitments under lines of credit of $52.8 million, $32.4 million of commitments to originate loans, and $1.1 million under standby letters of credit. We had no commitments to advance additional amounts pursuant to outstanding lines of credit or undisbursed construction loans.

The ACL for off balance sheet credit exposures is recorded in other liabilities on the Consolidated Balance Sheet. This ACL represents management’s estimate of expected losses in its unfunded loan commitments and other off balance sheet credit exposures, such as letters of credit and credit recourse on sold residential mortgage loans. The balance of off balance sheet credit exposures was a provision of $88,000 at June 30, 2025.

44

Impact of Inflation and Changing Prices

The consolidated financial statements and related financial data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America which generally require the measurement of financial position and operating results in terms of historical dollars, without considering changes in relative purchasing power over time due to inflation. Unlike most industrial companies, virtually all of the Company’s assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact on the Company’s performance than does the effect of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services, since such prices are affected by inflation to a larger extent than interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of June 30, 2025. Based on their evaluation of the Company’s disclosure controls and procedures, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and regulations are operating in an effective manner.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the second fiscal quarter of fiscal 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition and operating results of the Company.

ITEM 1A. RISK FACTORS

There have been no material changes in the Risk Factors previously disclosed in Item 1A of our 2024 Form 10-K.

45

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)         Not applicable.

(b)         Not applicable.

(c)         Purchases of Equity Securities

The Company’s repurchases of its common stock made during the quarter ended June 30, 2025 including stock-for-stock option exercises of outstanding stock options, are set forth in the table below:

Period Total Number of Shares<br> <br>Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
April 1, 2025 – April 30, 2025 1,864 $ 10.80 - 24,375
May 1, 2025 – May 31, 2025 1,056 10.27 - 24,375
June 1, 2025 – June 30, 2025 - - - 24,375
Total 2,920 $ 10.61 - 24,375

Notes to this table:

(1) On December 12, 2018, the Board of Directors of Quaint Oak Bancorp approved its fifth share repurchase program which provides for the repurchase of up to 50,000 shares, or approximately 2.5% of the Company’s then issued and outstanding shares of common stock and announced the fifth repurchase program on Form 8-K filed on December 13, 2018. The repurchase program does not have an expiration date.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

46

ITEM 6. EXHIBITS
No. Description
--- ---
31.1 Rule 13a-14(d) and 15d-14(d) Certification of the Chief Executive Officer.
31.2 Rule 13a-14(d) and 15d-14(d) Certification of the Chief Financial Officer.
32.0 Section 1350 Certification.
101.INS Inline XBRL Instance Document.
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definitions Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

47

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 14, 2025 By: /s/Robert T. Strong
Robert T. Strong<br> <br>Chief Executive Officer
Date: August 14, 2025 By: /s/John J. Augustine
John J. Augustine<br> <br>Executive Vice President and Chief Financial Officer

48

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EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Robert T. Strong, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Quaint Oak Bancorp, Inc. (the "registrant");

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)         Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2025 /s/Robert T. Strong
Robert T. Strong<br><br> <br>Chief Executive Officer

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EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, John J. Augustine certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Quaint Oak Bancorp, Inc. (the "registrant");

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.         The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)         Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2025 /s/John J. Augustine
John J. Augustine<br><br> <br>Executive Vice President and Chief Financial Officer

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EXHIBIT 32.0

SECTION 1350 CERTIFICATION

Each of Robert T. Strong, President and Chief Executive Officer and John J. Augustine, Executive Vice President and Chief Financial Officer of Quaint Oak Bancorp, Inc. (the "Company"), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)         The quarterly report on Form 10-Q of the Company for the period ended June 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m(a) or 78o(d); and

(2)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2025 By: /s/Robert T. Strong
Robert T. Strong<br><br> <br>Chief Executive Officer
Date: August 14, 2025 By: /s/John J. Augustine
John J. Augustine<br><br> <br>Executive Vice President and Chief Financial Officer

Note: A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to Quaint Oak Bancorp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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