SOUTHAMPTON, PA — Quaint Oak Bancorp, Inc. (OTCQB: QNTO), the holding company for Quaint Oak Bank, reported a third-quarter net loss of $41,000, or $0.02 per share, compared to net income of $243,000, or $0.09 per share, in the same period last year. The decline reflected higher operating costs tied to the company’s effort to build a new international correspondent banking line — a move management said is key to long-term growth and diversification.
“For the third quarter ended September 30, 2025, we reported a net loss of $41,000, compared to net income of $243,000 in the same period last year,” said Chief Executive Officer Robert T. Strong. “This decline is due in part to our continued strategic investment in building a new business line in international correspondent banking. This new line when fully launched, we anticipate, will provide both sources of lower cost funding and additional non-interest income. The investment requires upfront costs, primarily in staffing, infrastructure, and professional services, which materially increased our non-interest expenses. These investments are essential to positioning the Company for long-term growth and diversification.”
Strong noted that early signs from the expansion have been positive. “Despite the short-term impact of this buildout, we saw encouraging signs: quarter over quarter non-interest income rose 44.5%, and our net interest margin improved to 2.77% for the three months ended September 30, 2025. Each of our subsidiary companies has produced positive results, year to date and our SBA initiative has gained momentum throughout the year.”
The company reported a 16.3% rise in non-interest expense, primarily due to higher salaries, professional fees, data processing, and occupancy costs related to the new banking initiative. Salaries and employee benefits increased $510,000, while professional fees rose 415.4%.
Credit quality remained stable. “Additionally, our non-performing loans as a percent of total loans receivable, net, at this period end was 1.16% along with our non-performing assets as a percent of total assets at this period end was 0.93%. Also, our Texas Ratio registered at 9.80% at September 30, 2025,” Strong said. “Although, these ratios slightly increased from the prior period, they remain at manageable levels.”
At quarter-end, total assets were $677.1 million, down 1.2% from year-end 2024. Loans receivable increased $12.4 million, offset by lower cash balances and loans held for sale. Total deposits were steady at $554.2 million, while Federal Home Loan Bank borrowings declined to $45.0 million.
During the period, Quaint Oak issued $10 million of fixed-rate senior notes at 11.00%, using the proceeds to retire $14 million in subordinated debt that matured in March. Stockholders’ equity declined slightly to $52.2 million, reflecting dividends and modest share repurchases.
“As a significant stockholder, I understand the concern of depressed earnings and their effect on market value; however, we remain confident that investment in our initiative of building out a new business line, can fulfill the goal of driving future value for our shareholders,” Strong said.
He added, “As always, our current and continued business strategy focuses on long term profitability and maintaining healthy capital ratios both of which reflect our strong commitment to shareholder value.”
Quaint Oak Bancorp operates through regional offices in the Delaware Valley, Lehigh Valley, and Philadelphia markets, along with subsidiaries in mortgage, insurance, title, and commercial real estate financing.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.