QNTO · Quaint Oak Bancorp, Inc.

Quaint Oak Bancorp’s Q1 2026 results mark a material inflection point: the Company reversed a $83,000 net loss in Q1 2025 to report $166,000 in net income — a $249,000 swing driven overwhelmingly by structural improvements in funding costs and credit risk management. Interest expense declined $580,000 (10.0%) year-over-year, primarily due to an $87.1 million reduction in money market deposits, full repayment of $45.0 million in FHLB borrowings, and lower average rates on certificates of deposit and money markets — collectively enhancing the net interest margin (up 27 bps to 2.90%) and interest rate spread (up 13 bps to 2.26%). The $345,000 (78.2%) drop in the provision for credit losses reflects both lower charge-offs and a contraction in commercial and industrial loan balances, reinforcing improved underwriting discipline. Non-interest income rose $53,000 (3.0%), led by a $510,000 surge in SBA loan sale gains — partially offset by $142,000 and $199,000 write-downs related to the SBA servicing asset and deferred origination costs, which management explicitly labeled non-recurring. Meanwhile, non-interest expense increased $580,000 (10.5%), with $126,000 of that attributable to professional fees for international correspondent banking compliance — signaling active investment in a new strategic initiative. Critically, the lifting of the regulatory consent order confirms resolution of prior supervisory concerns, removing a key overhang on capital deployment and strategic flexibility. Though non-performing loans rose to $9.9 million (1.87% of loans), management emphasized they remain well-collateralized or fully reserved — and the $1.6 million in prior-year charge-offs suggests continued portfolio cleanup. With no forward guidance disclosed, investors should focus on the sustainability of the funding cost advantage and whether compliance-related expenses normalize in coming quarters.