Quaint Oak Bancorp, Inc. (the "Company") (OTCQB: QNTO), the holding
company for Quaint Oak Bank (the "Bank"), announced today that net
income for the quarter ended June 30, 2014 was $325,000, or $0.38
per basic and $0.36 per diluted share, compared to $173,000, or
$0.20 per basic and $0.19 per diluted share for the same period in
2013. Net income for the six months ended June 30, 2014 was
$525,000, or $0.62 per basic and $0.58 per diluted share, compared
to $313,000, or $0.35 per basic and $0.34 per diluted share for the
same period in 2013.
Robert T. Strong, President and Chief Executive Officer stated,
"I am pleased to provide our shareholders with this quarterly
earnings report which delivers both positive earnings and asset
growth. In lieu of my usual comments on performance, I would
like to take this opportunity to share with our valued shareholders
another exciting accomplishment."
Mr. Strong continued. "It is with great pleasure that I
share our recognition by the Independent Banker ("IB") magazine, a
monthly publication of The Independent Community Bankers of America
("ICBA"). The July issue highlights five of the most
productive lenders in the banking industry with a cover feature on
Quaint Oak Bank. Of the approximately 6,800 banks across the
country at December 31, 2013, nearly 5,000 are members of
ICBA. Among ICBA members Quaint Oak Bank, with total loans as
a percentage of assets of 87% for 2013, tied for 55th place of the
top 100 lenders - nationwide!"
Mr. Strong added, "We are very gratified by the ICBA's
recognition of Quaint Oak Bank on a national platform. I take
this opportunity to celebrate this success with our customers, our
community and our shareholders. To read the IB article please
access it on our home page at www.Quaintoak.com."
In closing, Mr. Strong commented, "This accomplishment provides
our entire team added incentive to forge forward. As always,
in conjunction with our stock repurchase plan, 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 $325,000 for the three months ended June
30, 2014, an increase of $152,000, or 87.9%, compared to net income
of $173,000 for three months ended June 30, 2013. The
increase in net income on a comparative quarterly basis was
primarily the result of an increase in net interest income of
$251,000 and an increase in non-interest income of $158,000, offset
by increases in the provision for income taxes of $98,000,
non-interest expense of $88,000, and the provision for loan losses
of $71,000.
The $251,000, or 22.5% increase in net interest income for the
three months ended June 30, 2014 over the comparable period in 2013
was driven by a $226,000, or 14.6% increase in interest income and
a $25,000, or 5.7% decrease in interest expense. The increase in
interest income was primarily due to a $23.2 million increase in
average loans receivable, net, including loans held for sale, which
increased from an average balance of $93.8 million for the three
months ended June 30, 2013 to an average balance of $117.0 million
for the three months ended June 30, 2014. The decrease in
interest expense was primarily attributable to a 25 basis point
decrease in the overall cost of interest-bearing liabilities from
1.64% for the three months ended June 30, 2013 to 1.39% for the
same period in 2014. The average interest rate spread
increased from 3.51% for the three months ended June 30, 2013, to
4.12% for the same period in 2014 while the net interest margin
increased from 3.71% for the three months ended June 30, 2013 to
4.24% for the three months ended June 30, 2014.
The $71,000, or 129.1% increase in the provision for loan losses
for the three months ended June 30, 2014 over the three months
ended June 30, 2013 was based on an evaluation of the allowance
relative to such factors as volume of the loan portfolio,
concentrations of credit risk, prevailing economic conditions,
prior loan loss experience and amount of non-performing loans.
The $158,000, or 39.6% increase in non-interest income for the
three months ended June 30, 2014 over the comparable period in 2013
was primarily attributable to a $162,000 increase in net gains on
the sales of residential mortgage loans, a $16,000 increase in the
gain on the sale of SBA loans, $4,000 in income from bank-owned
life insurance, and a $4,000 increase in other income. These
increases were partially offset by a $17,000 decrease in fee income
generated by Quaint Oak Bank's mortgage banking and title abstract
subsidiaries, a $6,000 decrease in other banking and fee service
charges, and a $5,000 increase in the loss on the sales of other
real estate owned.
The $88,000, or 7.4% increase in non-interest expense for the
three months ended June 30, 2014 compared to the same period in
2013 was primarily attributable to a $72,000 increase in salaries
and employee benefits expense, a $21,000 increase in FDIC deposit
insurance assessment, a $14,000 increase in advertising expense,
and a $9,000 increase in occupancy and equipment expense.
These increases were partially offset by a $14,000 decrease in
other expense, an $11,000 decrease in other real estate owned
expense, and a $3,000 decrease in directors' fees and
expenses. The increase in salaries and employee benefits
expense for the 2014 period compared to 2013 was primarily
attributable to increased staff as the Company continues to expand
its mortgage banking and lending operations. The increase in
FDIC deposit insurance assessment was primarily attributable to a
refund of unused prepaid assessment credits during the quarter
ended June 30, 2013.
The $98,000, or 98.0% increase in the provision for income taxes
for the three months ended June 30, 2014 over the three month
period ended June 30, 2013 was due primarily to the increase in
pre-tax income as our effective tax rate remained relatively
consistent at 37.9% for the 2014 period compared to 36.6% for the
comparable period in 2013.
For the six months ended June 30, 2014, net income increased
$212,000, or 67.7% from $313,000 for the six months ended June 30,
2013 to $525,000 for the six months ended June 30, 2014. This
increase in net income was primarily the result of an increase in
net interest income of $562,000 and an increase in non-interest
income of $122,000, offset by increases in non-interest expense of
$205,000, the provision for income taxes of $148,000, and the
provision for loan losses of $119,000.
The $562,000, or 25.8% increase in net interest income for the
six months ended June 30, 2014 over the comparable period in 2013
was driven by a $491,000, or 16.1% increase in interest income and
a $71,000, or 8.2% decrease in interest expense. The increase in
interest income was primarily due to a $21.0 million increase in
average loans receivable, net, including loans held for sale, which
increased from an average balance of $92.9 million for the six
months ended June 30, 2013 to an average balance of $113.9 million
for the six months ended June 30, 2014. The decrease in
interest expense was primarily attributable to a 28 basis point
decrease in the overall cost of interest-bearing liabilities from
1.67% for the six months ended June 30, 2013 to 1.39% for the same
period in 2014. The average interest rate spread increased
from 3.46% for the six months ended June 30, 2013, to 4.21% for the
same period in 2014 while the net interest margin increased from
3.66% for the six months ended June 30, 2013 to 4.34% for the six
months ended June 30, 2014.
As was the case for the quarter, the $119,000, or 111.2%
increase in the provision for loan losses for the six months ended
June 30, 2014 compared to the six months ended June 30, 2013 was
based on an evaluation of the allowance relative to such factors as
volume of the loan portfolio, concentrations of credit risk,
prevailing economic conditions, prior loan loss experience and
amount of non-performing loans.
The $122,000, or 16.4% increase in non-interest income for the
six months ended June 30, 2014 over the comparable period in 2013
was primarily attributable to a $209,000 increase in net gains on
the sales of loans, a $16,000 increase in the gain on the sale of
SBA loans, a $10,000 increase in other banking and fee service
charges, and $4,000 in income from bank-owned life insurance.
These increases were partially offset by an $89,000 decrease in fee
income generated by Quaint Oak Bank's mortgage banking and title
abstract subsidiaries and a $28,000 increase in the loss on the
sales of other real estate owned.
The $205,000, or 8.9% increase in non-interest expense for
the six months ended June 30, 2014 compared to the same period in
2013 was primarily attributable to an $187,000 increase in salaries
and employee benefits expense, a $35,000 increase in occupancy and
equipment expense, a $19,000 increase in FDIC deposit insurance
assessment, and a $14,000 increase in advertising expense.
Offsetting these increases was a $22,000 decrease in professional
fees, a $12,000 decrease in other real estate owned expense, a
$9,000 decrease in directors' fees and expenses, and a $7,000
decrease in other expense. As was the case with the
quarter, the increase in salaries and employee benefits expense for
the 2014 period compared to 2013 was primarily attributable to
increased staff as the Company continues to expand its mortgage
banking and lending operations. The increase in occupancy and
equipment expense was primarily attributable to computer system
upgrades.
The $148,000, or 79.6% increase in the provision for income
taxes for the six months ended June 30, 2014 over the six month
period ended June 30, 2013 was due primarily to the increase in
pre-tax income as our effective tax rate remained relatively
consistent at 38.9% for the 2014 period compared to 37.3% for the
comparable period in 2013.
The Company's total assets at June 30, 2014 were $140.6 million,
an increase of $13.2 million, or 10.4%, from $127.4 million at
December 31, 2013. This growth in total assets was primarily
due to increases in loans receivable, net of $9.9 million, loans
held for sale of $2.8 million, and a $3.5 million investment in
bank-owned life insurance, partially offset by a decrease in cash
and cash equivalents of $3.1 million and a decrease of $335,000 in
other real estate owned, net.
Total interest-bearing deposits increased $9.3 million, or 9.0%,
to $112.6 million at June 30, 2014 from $103.3 million at December
31, 2013. This increase in deposits was primarily attributable to
increases of $8.4 million in certificates of deposit, $537,000 in
statement savings accounts, and $287,000 in eSavings
accounts.
Total Federal Home Loan Bank advances increased $4.0 million, or
72.7%, to $9.5 million at June 30, 2014 from $5.5 million at
December 31, 2013. During the six months ended June 30, 2014,
the Company made no repayments and borrowed $4.0 million in
overnight funding to fund loan demand.
Total stockholders' equity decreased $70,000 to $16.9 million at
June 30, 2014 from $17.0 million at December 31, 2013. Contributing
to the decrease was the purchase of 38,225 shares of the Company's
stock as part of the Company's stock repurchase program for an
aggregate purchase price of $640,000 and dividends paid of
$101,000. These decreases were partially offset by net income
for the six months ended June 30, 2014 of $525,000, common
stock earned by participants in the employee stock ownership plan
of $77,000, amortization of stock awards and options under our
stock compensation plans of $66,000, and a decrease in accumulated
other comprehensive income of $3,000.
Non-performing loans amounted to $2.4 million, or 2.05% of net
loans receivable at June 30, 2014, consisting of sixteen loans,
seven of which are on non-accrual status and nine of which are 90
days or more past due and accruing interest. Comparably,
non-performing loans amounted to $1.9 million, or 1.79% of net
loans receivable at December 31, 2013, consisting of seventeen
loans, ten of which were on non-accrual status and seven of which
were 90 days or more past due and accruing interest. The
non-performing loans at June 30, 2014 include nine one-to-four
family non-owner occupied residential loans, four commercial real
estate loans, and three one-to-four family owner-occupied
residential loans, and all are generally well-collateralized or
adequately reserved for. During the quarter ended June 30,
2014, two loans were placed on non-accrual status resulting in the
reversal of approximately $21,000 of previously accrued interest
income, and a property that had been collateral for one loan that
was on non-accrual was transferred to other real estate
owned. At June 30, 2014, the Company had twelve loans
totaling $1.0 million that were identified as troubled debt
restructurings. Eleven of these loans totaling $918,000 were
performing in accordance with their modified terms, and one loan in
the amount of $102,000 was 61 days delinquent. The allowance
for loan losses as a percent of total loans receivable was 0.99% at
June 30, 2014 and 0.87% at December 31, 2013.
Other real estate owned (OREO) amounted to $239,000 at June 30,
2014, consisting of three properties. This compares to six
properties that totaled $574,000 at December 31, 2013. During
the quarter-ended on June 30, 2014, the Company made $10,000 of
capital improvements to the properties, sold two properties
totaling $290,000, and realized an aggregate loss of $15,000 on the
sales. Also during the quarter ended June 30, 2014, a property that
had been collateral for a loan in the amount of $112,000 previously
on non-accrual, was transferred to OREO. In conjunction with
this transfer, $1,000 of the outstanding loan balance was
charged-off though the allowance for loan losses.
Non-performing assets amounted to $2.6 million, or 1.87% of total
assets at June 30, 2014 compared to $2.5 million, or 1.95% of total
assets at December 31, 2013.
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.
Statements contained in this news release which
are not historical facts may be forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. The Company undertakes no obligation to update these
forward-looking statements to reflect events or circumstances that
occur after the date on which such statements were made.
QUAINT OAK BANCORP, INC. |
Consolidated Balance
Sheets |
(In Thousands) |
|
At June 30,
2014 |
|
At December 31,
2013 |
Assets |
(Unaudited) |
|
(Unaudited) |
Cash and cash equivalents |
$ 3,087 |
|
$ 6,184 |
Investment in interest-earning time deposits |
7,411 |
|
7,633 |
Investment securities available for sale at fair value |
1,711 |
|
1,680 |
Loans held for sale |
3,855 |
|
1,098 |
Loans receivable, net of allowance for loan losses (2014: $1,166;
2013: $941) |
116,790 |
|
106,887 |
Accrued interest receivable |
804 |
|
735 |
Investment in Federal Home Loan Bank stock, at cost |
615 |
|
421 |
Bank-owned life insurance |
3,504 |
|
-- |
Premises and equipment, net |
1,604 |
|
1,637 |
Other real estate owned, net |
239 |
|
574 |
Prepaid expenses and other assets |
1,024 |
|
578 |
Total Assets |
$140,644 |
|
$127,427 |
|
|
|
|
Liabilities and
Stockholders' Equity |
Liabilities |
|
|
|
|
Deposits, interest-bearing |
|
$
112,597 |
|
$ 103,324 |
|
Federal Home Loan Bank
advances |
9,500 |
|
5,500 |
|
Accrued interest payable |
97 |
|
77 |
|
Advances from borrowers for taxes
and insurance |
1,181 |
|
1,224 |
|
Accrued expenses and other
liabilities |
353 |
|
316 |
Total Liabilities |
123,728 |
|
110,441 |
|
|
|
|
Stockholders'
Equity |
16,916 |
|
16,986 |
Total Liabilities and Stockholders' Equity |
$140,644 |
|
$127,427 |
|
|
|
|
|
|
|
QUAINT OAK BANCORP, INC. |
Consolidated Statements of
Income |
(In Thousands, except share
data) |
|
For the Three
Months Ended June 30, |
|
For the Six
Months Ended June 30, |
2014 |
2013 |
|
2014 |
2013 |
(Unaudited) |
|
(Unaudited) |
Interest Income |
$ 1,778 |
$ 1,552 |
|
$ 3,537 |
$ 3,046 |
Interest Expense |
410 |
435 |
|
799 |
870 |
|
|
Net Interest Income |
1,368 |
1,117 |
|
2,738 |
2,176 |
Provision for Loan Losses |
126 |
55 |
|
226 |
107 |
|
|
Net Interest Income after Provision
for Loan Losses |
1,242 |
1,062 |
|
2,512 |
2,069 |
Non-Interest Income |
557 |
399 |
|
868 |
746 |
Non-Interest Expense |
1,276 |
1,188 |
|
2,521 |
2,316 |
|
Income before Income
Taxes |
523 |
273 |
|
859 |
499 |
Income Taxes |
198 |
100 |
|
334 |
186 |
|
|
Net Income |
$ 325 |
$ 173 |
|
$ 525 |
$ 313 |
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
2014 |
2013 |
|
2014 |
2013 |
Per Common Share Data: |
(Unaudited) |
|
(Unaudited) |
Earnings per share - basic |
$
0.38 |
$ 0.20 |
|
$
0.62 |
$ 0.35 |
Average shares outstanding - basic |
845,612 |
886,437 |
|
851,753 |
889,534 |
Earnings per share - diluted |
$
0.36 |
$ 0.19 |
|
$
0.58 |
$ 0.34 |
Average shares outstanding -
diluted |
896,142 |
926,817 |
|
897,961 |
925,486 |
|
|
|
|
|
|
Tangible book value per share,
end of period |
$ 18.54 |
$ 17.51 |
|
$ 18.54 |
$ 17.51 |
Shares outstanding, end of period |
912,362 |
965,374 |
|
912,362 |
965,374 |
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
2014 |
2013 |
|
2014 |
2013 |
Selected Operating
Ratios: |
(Unaudited) |
|
(Unaudited) |
Average yield on interest-earning
assets |
5.51% |
5.15% |
|
5.60% |
5.13% |
Average rate on interest-bearing
liabilities |
1.39% |
1.64% |
|
1.39% |
1.67% |
Average interest rate spread |
4.12% |
3.51% |
|
4.21% |
3.46% |
Net interest margin |
4.24% |
3.71% |
|
4.34% |
3.66% |
Average interest-earning assets to
average interest-bearing liabilities |
109.31% |
113.98% |
|
110.00% |
114.29% |
Efficiency ratio |
66.31% |
78.41% |
|
69.91% |
79.27% |
|
|
|
|
|
|
Asset Quality Ratios
(1): |
|
|
|
|
|
Non-performing loans as a percent of
total loans receivable, net |
2.05% |
2.10% |
|
2.05% |
2.10% |
Non-performing assets as a percent of
total assets |
1.87% |
1.71% |
|
1.87% |
1.71% |
Allowance for loan losses as a percent
of non-performing loans |
48.76% |
49.02% |
|
48.76% |
49.02% |
Allowance for loan losses as a percent
of total loans receivable |
0.99% |
1.02% |
|
0.99% |
1.02% |
Texas Ratio (2) |
14.55% |
11.83% |
|
14.55% |
11.83% |
|
|
|
|
|
|
(1) Asset quality ratios are end of period
ratios. |
|
|
|
|
|
(2) Total non-performing assets
divided by tangible common equity plus the allowance for loan
losses. |
CONTACT:
Quaint Oak Bancorp, Inc.
Robert T. Strong, President and Chief Executive Officer
(215) 364-4059
Quaint Oak Bancorp (QB) (USOTC:QNTO)
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