QO
QUAINT OAK BANCORP, INC. (QNTO)·Q2 2025 Earnings Summary
Executive Summary
- Q2 2025 delivered a return to profitability: net income $0.272M and $0.10 EPS, up from Q1’s net loss of $(0.083)M and $(0.03) EPS, and above Q2 2024’s $0.100M and $0.04 EPS; net interest margin expanded to 2.85% and spread to 2.19% as funding costs eased while loan yields improved .
- Non-interest income rose sharply, led by net gain on loan sales ($1.046M) and SBA loan gains ($0.511M), offsetting lower interest and dividend income; provision for credit losses increased on higher charge-offs .
- Balance sheet actions included exiting a correspondent banking relationship (deposit mix shift), adding $10.0M senior notes at 11% and reducing subordinated debt to $8.0M; FHLB borrowings rose to $60.0M for liquidity .
- The quarterly dividend was cut to $0.04 from $0.13 to enhance capital and liquidity, a likely near-term stock reaction catalyst given income sensitivity to funding costs and capital priorities .
- Street consensus estimates (S&P Global) for EPS and revenue were unavailable for Q2 2025; comparisons to estimates cannot be made (values retrieved from S&P Global).*
What Went Well and What Went Wrong
What Went Well
- Net interest margin expanded to 2.85% and spread to 2.19% as deposits repriced lower and loan yields improved; efficiency ratio improved to 85.75% versus 97.37% in Q2 2024 .
- Robust fee generation: “our mortgage banking company improved in its performance. Our SBA production is now generally on target, along with commercial loan sales becoming more productive.” — CEO Robert T. Strong .
- Asset quality metrics stabilized/improved: non-performing assets 0.89% of total assets; NPLs 1.10% of loans; Texas Ratio 9.24% as of June 30, 2025 .
What Went Wrong
- Interest and dividend income decreased $0.703M YoY on lower balances in interest-earning cash and loans; loan balances decreased $15.9M YoY, and yields on interest-earning cash fell .
- Provision for credit losses increased $0.478M YoY on higher charge-offs, partially offset by lower net loans .
- Funding mix remained challenging: total deposits fell $21.1M since year-end; reliance on FHLB (+$12.1M to $60.0M) and new 11% senior notes added interest expense (FHLB interest expense up $0.481M YoY; senior debt interest $0.275M) .
Financial Results
Core Financials vs prior year and prior quarter
Note: Total Revenue is calculated as Net Interest Income plus Total Non-Interest Income using reported figures .
Non-Interest Income breakdown
KPIs and Asset Quality
Guidance Changes
Earnings Call Themes & Trends
No earnings call transcript was available for Q2 2025; themes are derived from management press releases.
Management Commentary
- “I am pleased to report that our earnings for the second quarter ended June 30, 2025, were measurably improved over the prior quarter. We anticipate that we have generally stabilized expenses except for certain one-time costs expected to be incurred during the second half of 2025 as we rectify and complete the build out of our business lines.” — Robert T. Strong, CEO .
- “Despite the housing market still not thriving, our mortgage banking company improved in its performance. Our SBA production is now generally on target, along with commercial loan sales becoming more productive.” — Robert T. Strong .
- “Loan closings are more consistent while asset growth is well contained as a result of regular loan sales into a secondary market.” — Robert T. Strong .
- “Our non-performing assets as a percent of total assets are reported at 0.89%, [and] our non-performing loans as a percentage of total loans receivable, net is reported at 1.10%… Additionally, our Texas Ratio is reported at 9.24%.” — Robert T. Strong .
- Dividend strategy: “the Board decided to reduce the quarterly cash dividend as part of our continued efforts to enhance capital levels, strengthen liquidity, and allow for continued reinvestment in strategic initiatives” — Robert T. Strong .
Q&A Highlights
No Q2 2025 earnings call transcript was available; therefore, there are no Q&A highlights, guidance clarifications, or tone changes to report for the quarter (we searched earnings-call-transcript and found none).
Estimates Context
- S&P Global consensus estimates for QNTO were unavailable for Q2 2025 for EPS and revenue; as a result, we cannot compute beats/misses versus consensus (values retrieved from S&P Global).*
- Actual results: diluted EPS $0.10 and Total Revenue (NII + non-interest income) $6.452M as reported; without consensus, we recommend monitoring for coverage updates by local/regional bank analysts .
Key Takeaways for Investors
- Sequential earnings recovery supported by margin expansion and stronger fee income (loan sale and SBA gains); watch sustainability as deposit costs and FHLB usage normalize .
- Asset quality metrics improved modestly (NPLs 1.10%; NPAs 0.89%; Texas Ratio 9.24%), though management still flags small business portfolio weakness; provision sensitivity remains given recent charge-off activity .
- Strategic capital actions (11% senior notes; sub debt reduction) reshape funding but add fixed interest burden; improved NIM suggests partial offset from deposit remix and yield lift .
- Deposit base stabilized post-correspondent banking exit with mix shift toward CDs and non-interest-bearing checking; near-term liquidity supported by FHLB capacity .
- Dividend policy tightened ($0.04 vs $0.13) to protect capital and liquidity amid growth investments; income investors may reassess positioning near-term .
- With no Street coverage available this quarter, price discovery may hinge on company-reported margin/asset quality trajectory and further disclosure on H2 one-time costs; monitor upcoming filings for expanded commentary .
- Tactical: near-term trading may react to dividend cut and NIM expansion; medium-term thesis depends on fee income durability (mortgage/SBA/commercial loan sales), stable credit costs, and deposit cost discipline .
*Values retrieved from S&P Global.