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QO

QUAINT OAK BANCORP, INC. (QNTO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 posted a net loss of $41,000 and diluted EPS of $-0.02, down from $0.10 in Q2 2025 and $0.09 in Q3 2024, driven by higher non-interest expenses tied to the buildout of an international correspondent banking initiative and a larger provision for credit losses .
  • Total operating revenue (net interest income after provision plus non-interest income) was $5.72M, up 7.2% year over year and down 4.9% quarter over quarter; non-interest income rose 44.5% YoY on stronger loan sale gains and SBA sales .
  • Net interest margin improved YoY to 2.77% (vs 2.59% in Q3 2024) but slipped from 2.85% in Q2 2025; efficiency ratio deteriorated to 93.26% on higher operating costs .
  • Asset quality remained manageable but ticked up: NPL ratio 1.16% and Texas Ratio 9.80% vs Q2’s 1.10% and 9.24%; management emphasized confidence in the long-term value of the new business line .
  • Dividend was maintained at $0.04 per share in October; deposit mix continued shifting toward CDs while correspondent banking activity was reduced, impacting money market and business checking balances .

What Went Well and What Went Wrong

What Went Well

  • Non-interest income increased 44.5% YoY, led by net gain on sale of loans (+88.9% YoY) and gain on sale of SBA loans (+114.5% YoY) .
  • Net interest margin improved YoY to 2.77% and average interest rate spread to 2.05%, reflecting deposit repricing and mix changes; management noted “encouraging signs” despite the buildout costs .
  • Management reiterated that “each of our subsidiary companies has produced positive results, year to date and our SBA initiative has gained momentum,” underlining diversified fee generation .

What Went Wrong

  • EPS swung to a loss at $-0.02, with non-interest expense up 16.3% YoY (+$804K), mainly from salaries, occupancy/data processing, and professional fees to support the international correspondent banking initiative .
  • Provision for credit losses rose 245.5% YoY (+$302K), and interest & dividend income declined 2.9% YoY (-$302K) on lower balances and yields in interest-earning deposits and slightly lower average loans .
  • Efficiency ratio worsened to 93.26% vs 85.75% in Q2 2025, and asset quality metrics ticked higher (NPL ratio 1.16%, Texas Ratio 9.80%) from Q2 levels .

Financial Results

Definition note: “Total operating revenue” below equals Net Interest Income after Provision for Credit Losses + Total Non-Interest Income (bank “revenue” often mapped by S&P to this definition) .

MetricQ3 2024Q2 2025Q3 2025
EPS (Diluted)$0.09 $0.10 $-0.02
Total Operating Revenue ($USD Millions)$5.335 $6.015 $5.717
Net Interest Income after Provision ($USD Millions)$4.125 $4.068 $3.969
Total Non-Interest Income ($USD Millions)$1.210 $1.947 $1.748
Net Interest Margin (%)2.59% 2.85% 2.77%
Avg Interest Rate Spread (%)1.87% 2.19% 2.05%
Efficiency Ratio (%)90.22% 85.75% 93.26%

Actual vs Wall Street consensus (S&P Global):

MetricQ3 2025 ActualQ3 2025 Consensus
Revenue ($USD Millions)$5.717*N/A*
EPS ($USD)$-0.02N/A*

Values with “*” retrieved from S&P Global. Consensus figures appear unavailable for this micro-cap bank.

Segment/non-interest income breakdown:

Non-Interest Income Component ($USD Thousands)Q3 2024Q2 2025Q3 2025
Net Gain on Sale of Loans503 1,046 950
Gain on Sale of SBA Loans124 511 266
Mortgage Banking/Equipment Lending/Title Fees237 280 289
Insurance Commissions198 196 196
Other Fees & Service Charges116 -119 14
Net Loan Servicing Income2 1 0
Bank-Owned Life Insurance30 32 33
Total Non-Interest Income1,210 1,947 1,748

KPIs (end-of-period and operating ratios):

KPIQ3 2024Q2 2025Q3 2025
NPL Ratio (% of Net Loans)0.99% 1.10% 1.16%
NPA Ratio (% of Total Assets)0.77% 0.89% 0.93%
Texas Ratio (%)8.42% 9.24% 9.80%
Total Deposits ($USD Millions)$553.3 $532.2 $554.2
CDs ($USD Millions, end-period)$223.2 (Dec’24) $252.8 (Jun’25 change +$29.6) $280.1 (Dec’24 +$56.9)
FHLB Borrowings ($USD Millions)$47.9 (Dec’24) $60.0 $45.0
Senior Debt ($USD Millions)$0.0 (Dec’24) $9.53 $9.58
Subordinated Debt ($USD Millions)$22.0 (Dec’24) $8.0 $8.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareQ4 2025$0.04 (July 2025) $0.04 (Oct 2025) Maintained
Operating Expenses (qualitative)H2 2025“Certain one-time costs expected in H2 2025” (Q2 mgmt) “Upfront costs” continue from correspondent banking buildout (Q3 mgmt) Maintained qualitative view
Revenue/EPS/Tax RateN/ANone providedNone providedN/A

No formal quantitative guidance was issued for revenue, margins, OpEx ranges, OI&E, or tax rate .

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our document set [List: 0 results].

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
International Correspondent Banking InitiativeNoted expense build; strategic investment beginning; one-time H2 costs expected Explicitly cited as cause of higher non-interest costs; expected to drive lower-cost funding and fee income over time Execution progressing; near-term expense drag; long-term diversification
Deposit Mix & Correspondent BankingExited a correspondent relationship; declines in interest-bearing checking and money market Money market and business checking down; CDs up on competitive rates Shift to term funding; potentially supporting NIM improvement
SBA & Loan Sale ActivitySBA gains and loan sale gains improving vs early 2024 SBA sales and loan sale gains higher YoY, supporting non-interest income Positive momentum sustained
Asset QualityQ1: NPL/NPA up vs Dec’24; improving vs Mar’24; Q2: Texas Ratio improved NPL/NPA and Texas Ratio higher vs Q2 but within “manageable” levels per mgmt Mixed; watchlist elevated but controlled
Margin/SpreadQ1: NIM 2.63%, spread 2.13%; Q2: NIM 2.85%, spread 2.19% NIM 2.77%, spread 2.05% YoY better, QoQ softer
Capital & Debt StructureSenior notes issued; sub debt paid at maturity Senior debt outstanding $~9.6M; sub debt at $8M Leverage optimized; cost of funds trade-offs

Management Commentary

  • “The decline is due in part to our continued strategic investment in building a new business line in international correspondent banking… [which] will provide both sources of lower cost funding and additional non-interest income… [but] requires upfront costs” .
  • “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” (YoY improvement) .
  • “Our non-performing loans… 1.16%… non-performing assets… 0.93%… Texas Ratio 9.80%… although these ratios slightly increased from the prior period, they remain at manageable levels” .
  • “We remain confident that investment… can fulfill the goal of driving future value for our shareholders” .

Q&A Highlights

No Q3 2025 earnings call transcript was found; therefore no Q&A insights or clarifications were available from an analyst call [List: 0 results].

Estimates Context

  • S&P Global shows Q3 2025 “Revenue” actual at $5.717M*, consistent with operating revenue (NII after provision + non-interest income) computed from the company’s financials .
  • S&P Global consensus estimates for EPS and revenue appear unavailable for QNTO for Q3 2025; as a result, we cannot assess beats/misses relative to consensus at this time*.
  • Given micro-cap coverage constraints, near-term estimate revisions likely hinge on expense trajectory for the correspondent banking initiative, NIM durability, and fee momentum in SBA and loan sales .

Values with “*” retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term earnings pressure from the correspondent banking buildout is real; watch non-interest expense normalization and operating leverage into 2026 as the new line begins contributing lower-cost funding and fees .
  • Margin trajectory remains constructive YoY (NIM 2.77% vs 2.59%); QoQ softness suggests monitoring deposit cost trends, CD repricing, and FHLB utilization to sustain spreads .
  • Fee engines (SBA and loan sales) are gaining momentum; durability here can offset net interest income variability as loan balances and deposit mix evolve .
  • Asset quality is manageable but slightly worse QoQ (NPL 1.16%, Texas Ratio 9.80%); continued charge-offs in small business/equipment pools bear watching for further provisioning .
  • Deposit mix shift toward CDs and away from money market/business checking aligns with reduced correspondent banking activity; funding stability improves, but discipline on pricing is key for NIM .
  • Capital actions (senior notes; sub debt reduction) reshaped the liability stack; interest expense on senior debt and FHLB borrowings is a headwind—focus on refinancing optionality and asset yields .
  • Dividend held at $0.04; future actions likely reflect capital preservation vs growth investments—track Board signals and expense cadence .
Sources: Q3 2025 8-K results release and attached financials **[1391933_0000927089-25-000199_ex_879198.htm:0]** **[1391933_0000927089-25-000199_ex_879198.htm:1]** **[1391933_0000927089-25-000199_ex_879198.htm:2]** **[1391933_0000927089-25-000199_ex_879198.htm:3]** **[1391933_0000927089-25-000199_ex_879198.htm:4]** **[1391933_0000927089-25-000199_ex_879198.htm:5]** **[1391933_0000927089-25-000199_ex_879198.htm:6]** **[1391933_0000927089-25-000199_ex_879198.htm:7]** **[1391933_0000927089-25-000199_ex_879198.htm:8]** **[1391933_0000927089-25-000199_ex_879198.htm:9]**; Q3 2025 press release **[1391933_06846575d19a443da4cd3cc8726332a2_0]** **[1391933_06846575d19a443da4cd3cc8726332a2_1]** **[1391933_06846575d19a443da4cd3cc8726332a2_2]** **[1391933_06846575d19a443da4cd3cc8726332a2_3]** **[1391933_06846575d19a443da4cd3cc8726332a2_4]** **[1391933_06846575d19a443da4cd3cc8726332a2_5]** **[1391933_06846575d19a443da4cd3cc8726332a2_6]** **[1391933_06846575d19a443da4cd3cc8726332a2_7]** **[1391933_06846575d19a443da4cd3cc8726332a2_8]** **[1391933_06846575d19a443da4cd3cc8726332a2_9]** **[1391933_06846575d19a443da4cd3cc8726332a2_10]** **[1391933_06846575d19a443da4cd3cc8726332a2_11]** **[1391933_06846575d19a443da4cd3cc8726332a2_12]** **[1391933_06846575d19a443da4cd3cc8726332a2_13]** **[1391933_06846575d19a443da4cd3cc8726332a2_14]**; Q2 2025 press release **[1391933_f7743cab296d4600aab3cb7b2779497a_0]** **[1391933_f7743cab296d4600aab3cb7b2779497a_1]** **[1391933_f7743cab296d4600aab3cb7b2779497a_2]** **[1391933_f7743cab296d4600aab3cb7b2779497a_3]** **[1391933_f7743cab296d4600aab3cb7b2779497a_4]** **[1391933_f7743cab296d4600aab3cb7b2779497a_5]** **[1391933_f7743cab296d4600aab3cb7b2779497a_6]** **[1391933_f7743cab296d4600aab3cb7b2779497a_7]** **[1391933_f7743cab296d4600aab3cb7b2779497a_8]** **[1391933_f7743cab296d4600aab3cb7b2779497a_9]** **[1391933_f7743cab296d4600aab3cb7b2779497a_10]** **[1391933_f7743cab296d4600aab3cb7b2779497a_11]**; Q1 2025 press release **[1391933_9a97a594baae4e93af2e86526b997505_0]** **[1391933_9a97a594baae4e93af2e86526b997505_1]** **[1391933_9a97a594baae4e93af2e86526b997505_2]** **[1391933_9a97a594baae4e93af2e86526b997505_3]** **[1391933_9a97a594baae4e93af2e86526b997505_4]** **[1391933_9a97a594baae4e93af2e86526b997505_5]** **[1391933_9a97a594baae4e93af2e86526b997505_6]** **[1391933_9a97a594baae4e93af2e86526b997505_7]** **[1391933_9a97a594baae4e93af2e86526b997505_8]** **[1391933_9a97a594baae4e93af2e86526b997505_9]** **[1391933_9a97a594baae4e93af2e86526b997505_10]**; Dividend PRs **[1391933_97e5d8f9892e40209e380c369a31b274_0]** **[1391933_32f773f3b9a840ce994cc07f4a36f4ae_0]**.