Quaint Oak Bancorp Inc (QNTO) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

FOR RELEASE: Wednesday, October 24, 2018 at 4:30 PM (Eastern)

QUAINT OAK BANCORP, INC. ANNOUNCES THIRD QUARTER EARNINGS

Southampton, PA – Quaint Oak Bancorp, Inc. (the "Company") (OTCQX: QNTO), the holding company for Quaint Oak Bank (the "Bank"), announced today that net income for the quarter ended September 30, 2018 was $658,000, or $0.34 per basic and $0.33 per diluted share, compared to $595,000, or $0.32 per basic and $0.30 per diluted share for the same period in 2017.  Net income for the nine months ended September 30, 2018 was $1.5 million, or $0.77 per basic and $0.75 per diluted share, compared to $1.3 million, or $0.69 per basic and $0.65 per diluted share for the same period in 2017.

Robert T. Strong, President and Chief Executive Officer stated, "We are pleased to report that our total assets increased over 8% to $259.0 million at September 30, 2018 when compared to December 31, 2017, largely funded by a $22.8 million increase in total deposits over the same period.  We achieved this increase in assets while reducing our Federal Home Loan Bank advances by $4.0 million or over 14%."

Mr. Strong continued, "As we move into the closing quarter of 2018, our continued focus is on increasing the loan volume at both our bank and our mortgage company subsidiary.  Through September 30, 2018, the Bank's net loan portfolio increased over 6% and our mortgage company subsidiary's loan production year to date is more than 20% ahead of 2017's loan production over the same period."

Mr. Strong added, "The Bank's Texas Ratio decreased to 12.89% over the nine month period when compared to the same period of one year ago of 16.34%; the Bank's non-performing loans as a percent of total loans receivable, net, decreased to 0.73% at September 30, 2018 compared to 1.83% for the same period of one year ago. We are pleased that loan quality remains high within the Bank's portfolio."

Mr. Strong commented, "As always, in conjunction with having maintained a continuing repurchase plan that has repurchased over 38% of our original shares issued in our initial public offering, our current and continued business strategy includes long term profitability and payment of dividends reflecting our strong commitment to shareholder value."

Net income amounted to $658,000 for the three months ended September 30, 2018, an increase of $63,000, or 10.6%, compared to net income of $595,000 for three months ended September 30, 2017.  The increase in net income on a comparative quarterly basis was primarily the result of an increase in net interest income of $224,000, a decrease in the provision for income taxes of $141,000, and an increase in non-interest income of $125,000, partially offset by an increase in non-interest expense of $327,000 and an increase in the provision for loan losses of $100,000.

The $224,000, or 11.9%, increase in net interest income for the three months ended September 30, 2018 over the comparable period in 2017 was driven by a $440,000, or 16.5%, increase in interest income, partially offset by a $216,000, or 27.5%, increase in interest expense.  The increase in interest income was primarily due to a $17.1 million increase in average loans receivable, net, including loans held for sale, which increased from an average balance of $198.8 million for the three months ended September 30, 2017 to an average balance of $215.9 million for the three months ended September 30, 2018, and had the effect of increasing interest income $222,000.  Also contributing to this increase was a