SOUTHAMPTON, Pa., July 28, 2010 (GLOBE NEWSWIRE) -- Quaint Oak Bancorp,
Inc. (the "Company") (OTCBB:QNTO), the holding company for Quaint Oak
Bank (the "Bank"), announced today that net income for the quarter
ended June 30, 2010 was $139,000, or $0.13 per basic and diluted share,
compared to $62,000 or $0.05 per basic and diluted share for the same
period in 2009. Net income for the six months ended June 30, 2010 was
$292,000, or $0.27 per basic and diluted share compared to $199,000, or
$0.17 per basic and diluted share for the same period in 2009.
Robert T. Strong, President and Chief Executive Officer stated, "I am
pleased to report an increase in earnings for both the quarter and six
months ended June 30, 2010, compared to the prior year periods. Our
loan portfolio has experienced consistent growth while our cost of
funds has continued to decrease significantly. With the combination of
lower cost of funds and increased loan balances, we have experienced
continued improvement in our net interest margin for the quarter of 34
basis points when compared to the prior year period. The depressed
economy with high unemployment continues to affect our non performing
loans; however, we have improved the ratio of non-performing loans to
total loans to 3.27% when compared to 3.35% at March 31, 2010. We
continue to work diligently with this customer group as evidenced by
the additional reduction in the troubled debt restructuring class of
loans to $648,000 from $1.5 million at December 31, 2009."
Mr. Strong continued, "As we mark the three year anniversary of our
mutual to stock conversion, we are pleased to note that during that
time frame we have increased assets to over $100 million, added three
active subsidiary companies, opened a bank branch office, experienced
profitable months every month during that period, paid quarterly
dividends as well as increased the dividend payout since initiating
them, and maintained an active stock repurchase program that at this
juncture has repurchased 16% of the original shares issued. We have
notably strengthened our infrastructure, positioning us to continue the
move prudently forward given the economic landscape."
Mr. Strong added, "Our intention is to continue to move cautiously
ahead with growth and expansion plans always mindful of long term
profitability, payment of dividends, accompanied with an active stock
repurchase program. This focus continues to reflect the Company's
strong commitment to shareholder value."
Net income amounted to $139,000 for the three months ended June 30,
2010, an increase of $77,000, or 124.2%, compared to net income of
$62,000 for the same period in 2009. The increase in net income on a
comparative quarterly basis was primarily the result of increases in
net interest income of $123,000 and non-interest income of $52,000,
which were offset by increases in the provision for income taxes of
$52,000, non-interest expense of $41,000 and the provision for loan
losses of $5,000.
The $123,000, or 17.1%, increase in net interest income for the three
months ended June 30, 2010 over the comparable period in 2009 was
driven by a $162,000, or 25.1%, decrease in interest expense, offset by
a $39,000, or 2.9%, decrease in interest income. The $162,000 decrease
in interest expense was primarily attributable to a 107 basis point
decrease in the overall cost of interest-bearing liabilities to 2.41%
for the three months ended June 30, 2010 from 3.48% for the three
months ended June 30, 2009 which resulted in a decrease of $206,000 of
interest expense. This decrease in interest expense due to rate was
offset by a $6.1 million increase in average interest-bearing
liabilities, which had the effect of increasing interest expense by
$44,000. The $39,000 decrease in interest income was primarily
attributable to a 53 basis point decrease in the yield on
interest-earning assets to 5.65% for the three months ended June 30,
2010 from 6.18% for the three months ended June 30, 2009 which resulted
in a $78,000 decrease in interest income. Contributing to the decrease
in yield for the quarter ended June 30, 2010 was the reversal of
$31,000 of accrued interest income on loans placed on non-accrual
status during the quarter. This decrease in interest income due to
yield was offset by a $5.5 million increase in average interest-earning
assets, which had the effect of increasing interest income by $39,000.
The average interest rate spread increased from 2.70% for the three
months ended June 30, 2009, to 3.24% for the same period in 2010 while
the net interest margin increased from 3.25% for the three months ended
June 30, 2009, to 3.59% for the same period in 2010.
The $52,000, or 216.7%, increase in non-interest income for the three
months ended June 30, 2010 over the comparable period in 2009 was
primarily attributable to the fees generated by Quaint Oak Bank's
mortgage banking, title abstract and real estate sales subsidiaries
which began operation in July of 2009.
The $52,000, or 126.8%, increase in the provision for income taxes for
the three months ended June 30, 2010 over the three month period ended
June 30, 2009 was due primarily to the increase in pre-tax income.
The $41,000, or 6.6%, increase in non-interest expense for the three
months ended June 30, 2010 compared to the same period in 2009 was
primarily attributable to a $95,000 increase in salaries and employee
benefits expense, a $22,000 increase in other expenses, a $16,000
increase in advertising expense, and a $15,000 increase in occupancy
and equipment expense. Offsetting these increases was a $55,000
decrease in other real estate owned expense, a $27,000 decrease in FDIC
deposit insurance assessment, a $14,000 decrease in professional fees,
and an $11,000 decrease in directors' fees and expenses. The increase
in salaries and employee benefits expense on a quarter-over-quarter
basis was primarily due to increased staff as the Company expanded its
operations, including the new subsidiaries and the opening of a branch
banking office in Allentown, Pennsylvania in February of 2010.
For the six months ended June 30, 2010, net income amounted to $292,000
compared to $199,000 for the six months ended June 30, 2009. The
$93,000 increase was primarily the result of a $212,000 increase in net
interest income, a $103,000 increase in non-interest income and a
$28,000 decrease in the provision for loan losses, offset by a $190,000
increase in non-interest expense and a $60,000 increase in the
provision for income taxes.
The $212,000, or 14.6% increase in net interest income for the six
months ended June 30, 2010 over the comparable period in 2009 was
driven by a $300,000, or 23.6%, decrease in interest expense, offset by
an $88,000, or 3.2%, decrease in interest income. The $300,000 decrease
in interest expense was primarily attributable to a 101 basis point
decrease in the overall cost of interest-bearing liabilities to 2.48%
for the six months ended June 30, 2010 from 3.49% for the six months
ended June 30, 2009 which resulted in a decrease of $382,000 of
interest expense. This decrease in interest expense due to rate was
offset by a $5.6 million increase in average interest-bearing
liabilities, which had the effect of increasing interest expense by
$82,000. The $88,000 decrease in interest income resulted primarily
from a 47 basis point decrease in the yield on interest-earning assets
to 5.74% for the three months ended June 30, 2010 from 6.21% for the
six months ended June 30, 2009 which resulted in a $152,000 decrease in
interest income. Contributing to the decrease in yield for the six
months ended June 30, 2010 was the reversal of $66,000 of accrued
interest income on loans placed on non-accrual status during the
period. This decrease in interest income due to yield was offset by a
$4.0 million increase in average interest-earning assets, which had the
effect of increasing interest income by $64,000. The average interest
rate spread increased from 2.72% for the six months ended June 30,
2009, to 3.26% for the same period in 2010 while the net interest
margin increased from 3.30% for the six months ended June 30, 2009, to
3.62% for the same period in 2010.
The $103,000, or 234.1%, increase in non-interest income for the six
months ended June 30, 2010 over the comparable period in 2009 was
primarily attributable to the fees generated by Quaint Oak Bank's
mortgage banking, title abstract and real estate sales subsidiaries
which began operation in July of 2009.
The $60,000, or 45.8%, increase in the provision for income taxes for
the six months ended June 30, 2010 over the six month period ended June
30, 2009 was due primarily to the increase in pre-tax income.
The $190,000, or 17.6%, increase in non-interest expense for the six
months ended June 30, 2010 compared to the same period in 2009 was
primarily attributable to a $186,000 increase in salaries and employee
benefits expense, a $49,000 increase in other expenses, a $37,000
increase in occupancy and equipment expense, and a $23,000 increase in
advertising expense. Offsetting these increases was a $47,000 decrease
in other real estate owned expense, a $29,000 decrease in directors'
fees and expenses, a $22,000 decrease in professional fees, an a $7,000
decrease in FDIC deposit insurance assessment. The increase in salaries
and employee benefits expense for the six months ended June 30, 2010
over the same period in 2009 was primarily due to increased staff as
the Company expanded its operations, including the new subsidiaries and
branch banking office.
The Company's total assets at June 30, 2010 were $100.3 million, an
increase of $6.3 million, or 6.8%, from $93.9 million at December 31,
2009. This increase was primarily due to growth in loans receivable,
net of the allowance for loan losses, of $2.6 million, cash and cash
equivalents of $2.3 million, investment securities available for sale
of $1.5 million, and investment in interest-earning time deposits of
$1.0 million. Offsetting these increases were principal payments from
mortgage-backed securities held to maturity of $1.1 million. Asset
growth for the six months ended June 30, 2010 was funded by a $7.7
million increase in deposits.
Total interest-bearing deposits increased $7.7 million, or 11.3%, to
$76.0 million at June 30, 2010 from $68.3 million at December 31, 2009.
This increase was attributable to increases of $7.8 million in
certificates of deposit and $155,000 in statement savings accounts,
offset by decreases of $195,000 in eSavings accounts and $18,000 in
passbook savings accounts. The increase in certificates of deposit was
primarily due to the competitive interest rates offered by the Bank and
investors seeking the safety of insured bank deposits.
Total stockholders' equity decreased $876,000 to $16.5 million at June
30, 2010 from $17.4 million at December 31, 2009. Contributing to the
decrease was the purchase of 130,776 shares of the Company's stock in
the open-market as part of the Company's stock repurchase program, as
well as other private repurchases, for an aggregate purchase price of
$1.2 million, and dividends paid of $68,000. These decreases were
offset by $292,000 of net income for the six months ended June 30,
2010, $59,000 amortization of stock awards and options under our stock
compensation plans, $34,000 related to common stock earned by
participants in the employee stock ownership plan, and $9,000 of
accumulated other comprehensive income.
Non-performing loans amounted to $2.5 million, or 3.27% of net loans
receivable at June 30, 2010, consisting of nineteen loans, seventeen of
which are on non-accrual status and two of which are 90 days or more
past due and accruing interest. This compares to eleven non-performing
loans totaling $925,000, or 1.27% of net loans receivable at December
31, 2009. The non-performing loans at June 30, 2010 include twelve
one-to-four family non-owner occupied residential loans, four
one-to-four family owner occupied residential loans, and three home
equity loans, and all are generally well-collateralized or adequately
reserved for. Management does not anticipate any significant losses on
these loans. During the quarter ended June 30, 2010, eight loans were
placed on non-accrual status resulting in the reversal of $31,000 of
previously accrued interest income. Not included in non-performing
loans are performing troubled debt restructurings which totaled
$648,000 at June 30, 2010 compared to $1.5 million at December 31,
2009. The allowance for loan losses as a percent of total loans
receivable was 1.17% at June 30, 2010 and 1.14% at December 31, 2009.
Other real estate owned was $938,000 at June 30, 2010 compared to
$913,000 at December 31, 2009. Non-performing assets amounted to $3.4
million, or 3.39% of total assets at June 30, 2010 compared to $1.8
million, or 1.96% of total assets at December 31, 2009.
Quaint Oak Bancorp, Inc. is the holding company for Quaint Oak Bank.
Quaint Oak Bank is a Pennsylvania-chartered stock savings bank
headquartered in Southampton, Pennsylvania and conducts business
through its two banking offices located in Bucks County and Lehigh
County, Pennsylvania.
