See accompanying notes to the unaudited consolidated financial statements.

~~ITEM 1. FINANCIAL STATEMENTS~~

Quaint Oak Bancorp, Inc.

Consolidated Statements of Income (Unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
	(In thousands, except for share data)
Interest Income
Interest on loans, including fees	$	8,671	$	5,944	$	22,171	$	16,422
Interest and dividends on time deposits, investment securities, interest-bearing deposits with others, and Federal Home Loan Bank stock		325		73		506		327
Total Interest Income		8,996		6,017		22,677		16,749

Interest Expense
Interest on deposits		1,672		702		3,199		2,370
Interest on Federal Home Loan Bank short-term borrowings		58		8		133		14
Interest on Federal Home Loan Bank long-term borrowings		457		124		958		392
Interest on Federal Reserve Bank long-term borrowings		-		8		4		77
Interest on subordinated debt		130		130		390		390
Interest on other short-term borrowings		22		31		49		127
Total Interest Expense		2,339		1,003		4,733		3,370
Net Interest Income		6,657		5,014		17,944		13,379
Provision for Loan Losses		655		557		1,933		1,259
Net Interest Income after Provision for Loan Losses		6,002		4,457		16,011		12,120

Non-Interest Income
Mortgage banking, equipment lending and title abstract fees		760		604		2,221		1,657
Real estate sales commissions, net		88		79		213		143
Insurance commissions		152		133		407		373
Other fees and services charges		131		38		379		211
Net loan servicing income		480		475		954		1,026
Income from bank-owned life insurance		23		21		66		61
Net gain on loans held for sale		4,281		1,866		11,349		4,416
Gain on the sale of SBA loans		58		369		225		636
Gain on the sale of investment securities available for sale		-		-		-		362
Total Non-Interest Income		5,973		3,585		15,814		8,885

Non-Interest Expense
Salaries and employee benefits		5,335		4,100		14,817		10,939
Directors' fees and expenses		67		58		210		186
Occupancy and equipment		477		379		1,363		1,143
Data processing		140		234		500		641
Professional fees		257		107		669		488
FDIC deposit insurance assessment		225		97		454		221
Other real estate owned expenses		-		2		-		14
Advertising		169		110		531		337
Amortization of other intangible		12		12		36		36
Other		636		326		1,509		974
Total Non-Interest Expense		7,318		5,425		20,089		14,979

For the Three
Months Ended

For the Nine
Months Ended

   September 30, September 30,
2017 2016 2017 2016
(In thousands, except for share data)
Interest Income
  Interest on loans $ 2,577 $ 2,213 $ 7,530 $ 6,497
  Interest and dividends on short-term investments and investment securities
96

96

262

244

Total Interest Income 2,673 2,309 7,792 6,741

Interest Expense
  Interest on deposits 685 638 1,987 1,774
  Interest on Federal Home Loan Bank borrowings 100 34 207 100
Total Interest Expense 785 672 2,194 1,874

Net Interest Income 1,888 1,637 5,598 4,867

Provision for Loan Losses 83 61 189 172

Net Interest Income after Provision for Loan Losses 1,805 1,576 5,409 4,695

Non-Interest Income
  Mortgage banking and title abstract fees 229 129 487 409
  Other fees and services charges 5 (20 ) 49 32
  Insurance commissions 90 60 256 60
  Income from bank-owned life insurance 21 23 65 67
  Net gain on the sale of residential mortgage loans
687 531 1,511 1,289
  Gain on sale of SBA loans 32 51 48 108
  Loss on sales and write-downs on other real estate owned - (54 ) (63 ) (126 )
  Other 32 13 61 36
Total Non-Interest Income 1,096 733 2,414 1,875

Non-Interest Expense
  Salaries and employee benefits 1,324 1,132 3,994 3,321
  Directors' fees and expenses 52 48 154 155
  Occupancy and equipment 137 143 427 413
  Data processing 86 52 219 137
  Professional fees 105 94 289 291
  FDIC deposit insurance assessment 44 35 131 103
  Other real estate owned expense 4 13 12 32
  Advertising 39 23 117 84
  Amortization of other intangible 13 8 37 8
  Other 144 109 447 333
Total Non-Interest Expense 1,948 1,657 5,827 4,877

Income before Income Taxes 953 652 1,996 1,693
Income Taxes 358 250 706 650
Net Income $ 595 $ 402 $ 1,290 $ 1,043

Earnings per share - basic $ 0.32 $ 0.22 $ 0.69 $ 0.59
Average shares outstanding - basic 1,868,969 1,792,673 1,857,682 1,774,343
Earnings per share - diluted $ 0.30 $ 0.21 $ 0.65 $ 0.54
Average shares outstanding - diluted 2,007,819 1,950,413 1,998,138 1,935,757

See accompanying notes to the unaudited consolidated financial statements.

~~ITEM 1. FINANCIAL STATEMENTS~~

Quaint Oak Bancorp, Inc.

Consolidated Statements of ~~Comprehensive~~ Income (Unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
	(In thousands, except for share data)
Income before Income Taxes	$	4,657	$	2,617	$	11,736	$	6,026
Income Taxes		1,012		702		2,531		1,693
Net Income	$	3,645	$	1,915	$	9,205	$	4,333
Net Income Attributable to Noncontrolling Interest	$	1,010	$	133	$	2,551	$	12
Net Income Attributable to Quaint Oak Bancorp, Inc.	$	2,635	$	1,782	$	6,654	$	4,321

Earnings per share - basic	$	1.29	$	0.89	$	3.27	$	2.17
Average shares outstanding - basic		2,050,650		2,002,816		2,034,153		1,991,336
Earnings per share - diluted	$	1.22	$	0.85	$	3.09	$	2.07
Average shares outstanding - diluted		2,168,732		2,100,026		2,150,944		2,085,286

For the Three
Months Ended

For the Nine
Months Ended

September 30, September 30,
2017 2016 2017 2016
(In thousands)
Net Income $ 595 $ 402 $ 1,290 $ 1,043

Other Comprehensive Income (Loss):
Unrealized gains (losses) on investment securities available-for-sale 11 (5 ) 56 15
Income tax effect (4 ) 2 (19 ) (5 )

Other comprehensive income (loss) 7 (3 ) 37 10

Total Comprehensive Income $ 602 $ 399 $ 1,327 $ 1,053

See accompanying notes to the unaudited consolidated financial statements.

~~ITEM 1. FINANCIAL STATEMENTS~~

Quaint Oak Bancorp, Inc.

Consolidated Statements of ~~Stockholders' Equity~~Comprehensive Income (Unaudited)

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2022			2021		2022			2021
	(In thousands)
Net Income	$	3,645		$	1,915	$	9,205		$	4,333

Other Comprehensive Income (Loss):
Unrealized gains (losses) on investment securities available-for-sale		(1	)		-		(54	)		257
Income tax effect		-			-		12			(55	)
Reclassification adjustment for gain on sale of investment securities included in net income		-			-		-			(362	)
Income tax effect		-			-		-			76
Other comprehensive loss		(1	)		-		(42	)		(84	)

Total Comprehensive Income	$	3,644		$	1,915	$	9,163		$	4,249
Comprehensive Income Attributable to Noncontrolling Interest	$	1,010		$	133	$	2,551		$	12
Comprehensive Income Attributable to Quaint Oak Bancorp, Inc.	$	2,634		$	1,782	$	6,612		$	4,237

For the Nine Months Ended September 30, 2017

Unallocated
Common Stock Common Accumulated
Number of Additional Stock Held Other Total
Shares Paid-in Treasury by Benefit Comprehensive Retained Stockholders'
Outstanding Amount Capital Stock Plans Income (Loss) Earnings Equity
(In thousands, except share data)
BALANCE –DECEMBER 31, 2016 1,891,150 $ 28 $ 14,240 $ (4,611 ) $ (367 ) $ (38 ) $ 11,538 $ 20,790

Common stock allocated by ESOP
87 51 138

Treasury stock purchase (27,363 ) (341 ) (341 )

Reissuance of treasury stock
under 401(k) Plan
6,502 49 34 83

Reissuance of treasury stock
under stock incentive plan
5,397 (28 ) 28 -

Reissuance of treasury stock
for exercised stock options
38,800 (8 ) 201 193

Stock based compensation expense 97 97

Release of 4,864 vested RRP shares (22 ) 22 -

Cash dividends declared ($0.14 per share)
(269 ) (269 )

Net income 1,290 1,290

Other comprehensive income, net
37 37

BALANCE – SEPTEMBER 30, 2017 1,914,486 $ 28 $ 14,415 $ (4,689 ) $ (294 ) $ (1 ) $ 12,559 $ 22,018

See accompanying notes to the unaudited consolidated financial statements.

~~ITEM 1. FINANCIAL STATEMENTS~~

Quaint Oak Bancorp, Inc.

Consolidated Statements of ~~Cash Flows~~Stockholders' Equity (Unaudited)

For the Three Months Ended September 30, 2022
	Common Stock										Accumulated
	Number of					Additional					Other									Total
	Shares					Paid-in		Treasury			Comprehensive			Retained			Noncontrolling			Stockholders'
	Outstanding			Amount		Capital		Stock			Income (Loss)			Earnings			Interest			Equity
						(In thousands, except share and per share data)
BALANCE - JUNE 30, 2022	2,045,721		$	28	$	15,904	$	(4,784	)	$	(18	)	$	27,564		$	3,485		$	42,179

Common stock allocated by ESOP (4,000 shares)	4,000					59		25												84
Treasury stock purchase	(760	)						(18	)											(18	)
Reissuance of treasury stock under stock incentive plan																				-
Reissuance of treasury stock under 401(k) Plan	593					11		4												15

Reissuance of treasury stock for exercised stock options	4,000					8		25												33

Stock based compensation expense						42														42

Cash dividends declared ($0.13 per share)														(266	)					(266	)

Noncontrolling interest member distribution																	(103	)		(103	)

Net income														2,635			1,010			3,645

Other comprehensive loss, net											(1	)								(1	)

BALANCE – SEPTEMBER 30, 2022	2,053,554		$	28	$	16,024	$	(4,748	)	$	(19	)	$	29,933		$	4,392		$	45,610

For the Three Months Ended September 30, 2021
										Unallocated
										Common			Accumulated
	*Number of*				*Additional*					*Stock Held*			*Other*							*Total*
	*Shares*				*Paid-in*		*Treasury*			*by Benefit*			*Comprehensive*		*Retained*			*Noncontrolling*		*Stockholders'*
	*Outstanding*		*Amount*		*Capital*		*Stock*			*Plans*			*Income*		*Earnings*			*Interest*		*Equity*
							(In thousands, except share and per share data)
BALANCE – JUNE 30, 2021	2,004,015	$	28	$	15,457	$	(5,022	)	$	(17	)	$	34	$	20,606		$	2,115	$	33,201

Common stock allocated by ESOP (3,607 shares)					48					17										65
Reissuance of treasury stock under 401(k) Plan	1,080				14		6													20

Stock based compensation expense					42															42

Cash dividends declared ($0.11 per share)															(220	)				(220	)

Net income															1,782			133		1,915

Other comprehensive income, net													-							-

BALANCE – SEPTEMBER 30, 2021	2,005,095	$	28	$	15,561	$	(5,016	)	$	-		$	34	$	22,168		$	2,248	$	35,023

For the Nine Months
Ended September 30,

2017 2016
(In thousands)
Cash Flows from Operating Activities
Net income $ 1,290 $ 1,043
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses 189 172
Depreciation expense 121 140
Amortization of intangibles 37 8
Net amortization of securities premiums 15 14
Accretion of deferred loan fees and costs, net (253 ) (227 )
Stock-based compensation expense 235 225
Net gain on the sale of loans (1,511 ) (1,289 )
Gain on the sale of SBA loans (48 ) (108 )
Net loss on sale and write-downs of other real estate owned 63 126
Increase in the cash surrender value of bank-owned life insurance (65 ) (67 )
Changes in assets and liabilities which provided (used) cash:
Loans held for sale-originations (62,106 ) (47,942 )
Loans held for sale-proceeds 61,856 50,048
Accrued interest receivable (63 ) 51
Prepaid expenses and other assets (243 ) (166 )
Accrued interest payable 5 13
Accrued expenses and other liabilities (152 ) 45
Net Cash Provided by (Used in) Operating Activities (630 ) 2,086
Cash Flows from Investing Activities
Net decrease in investment in interest-earning time deposits 1,219 73
Purchase of investment securities available for sale - (7,833 )
Principal repayments of investment securities available for sale 1,162 784
Net increase in loans receivable (16,852 ) (18,159 )
Net increase (decrease) in investment in Federal Home Loan Bank stock (421 ) 25
Proceeds from the sale of other real estate owned 210 844
Capitalized expenditures on other real estate owned (23 ) (280 )
Purchase of premises and equipment (364 ) (50 )
Purchase of insurance agency - (1,000 )
Net Cash Used in Investing Activities (15,069 ) (25,596 )
Cash Flows from Financing Activities
Net increase in demand deposits and savings accounts 43 3,273
Net increase in certificate accounts 5,348 22,149
Net proceeds from Federal Home Loan Bank short-term borrowings 4,500 -
Proceeds from Federal Home Loan Bank long-term borrowings 8,000 -
Repayment of Federal Home Loan Bank long-term borrowings (2,500 ) (1,000 )
Dividends paid (269 ) (218 )
Purchase of treasury stock (341 ) (13 )
Proceeds from the reissuance of treasury stock 83 82
Proceeds from the exercise of stock options 193 133
Decrease in advances from borrowers for taxes and insurance (429 ) (422 )
Net Cash Provided by Financing Activities 14,628 23,984
Net Increase (Decrease) in Cash and Cash Equivalents (1,071 ) 474
Cash and Cash Equivalents – Beginning of Period 9,300 17,206
Cash and Cash Equivalents – End of Period $ 8,229 $ 17,680

Cash payments for interest $ 2,189 $ 1,861
Cash payments for income taxes $ 789 $ 560

See accompanying notes to the unaudited consolidated financial statements.

Quaint Oak Bancorp, Inc.

Consolidated Statements of Stockholders' Equity (Unaudited)

For the Nine Months Ended September 30, 2022
	Common Stock											Accumulated
	Number of					Additional						Other									Total
	Shares					Paid-in			Treasury			Comprehensive			Retained			Noncontrolling			Stockholders'
	Outstanding			Amount		Capital			Stock			Income (Loss)			Earnings			Interest			Equity
						(In thousands, except share and per share data)
BALANCE – DECEMBER 31, 2021	2,011,313		$	28	$	15,685		$	(4,977	)	$	23		$	24,030		$	2,120		$	36,909

Common stock allocated by ESOP (12,000 shares)	12,000					184			75												259
Treasury stock purchase	(1,969	)							(46	)											(46	)
Reissuance of treasury stock under stock incentive plan	9,123					(57	)		57												-
Reissuance of treasury stock under 401(k) Plan	2,087					35			13												48

Reissuance of treasury stock for exercised stock options	21,000					51			130												181

Stock based compensation expense						126															126

Cash dividends declared ($0.37 per share)															(751	)					(751	)

Noncontrolling interest member distribution																		(279	)		(279	)

Net income															6,654			2,551			9,205

Other comprehensive loss, net												(42	)								(42	)

BALANCE – SEPTEMBER 30, 2022	2,053,554		$	28	$	16,024		$	(4,748	)	$	(19	)	$	29,933		$	4,392		$	45,610

See accompanying notes to the unaudited consolidated financial statements.

Quaint Oak Bancorp, Inc.

Consolidated Statements of Stockholders' Equity (Unaudited)

For the Nine Months Ended September , 2021												Unallocated
												Common			Accumulated
	*Number of*					*Additional*						*Stock Held*			*Other*								*Total*
	*Shares*					*Paid-in*			*Treasury*			*by Benefit*			*Comprehensive*			*Retained*			*Noncontrolling*		*Stockholders'*
	*Outstanding*			*Amount*		*Capital*			*Stock*			*Plans*			*Income*			*Earnings*			*Interest*		*Equity*
									(In thousands, except share and per share data)
BALANCE – DECEMBER 31, 2020	1,986,528		$	28	$	15,282		$	(5,114	)	$	(51	)	$	118		$	18,465		$	-	$	28,728

Common stock allocated by ESOP (10,821 shares)						136						51											187

Treasury stock purchase	(1,398	)							(25	)													(25	)

Reissuance of treasury stock under 401(k) Plan	3,044					35			18														53

Reissuance of treasury stock under stock incentive plan	9,421					(58	)		58														-

Reissuance of treasury stock for exercised stock options	7,500					40			47														87

Stock based compensation expense						126																	126

Noncontrolling interest initial contribution																					2,236		2,236

Cash dividends declared ($0.31 per share)																		(618	)				(618	)

Net income																		4,321			12		4,333

Other comprehensive loss, net															(84	)							(84	)
BALANCE – SEPTEMBER 30, 2021	2,005,095		$	28	$	15,561		$	(5,016	)	$	-		$	34		$	22,168		$	2,248	$	35,023

See accompanying notes to the unaudited consolidated financial statements.

Quaint Oak Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	For the Nine Months
	Ended September 30,
	2022			2021
	(In Thousands)
Cash Flows from Operating Activities
Net income	$	9,205		$	4,333
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses		1,933			1,259
Depreciation of premises and equipment		244			228
Amortization of operating right-of-use assets		151			122
Amortization of subordinated debt issuance costs		25			25
Amortization of other intangible		36			36
Net amortization of securities premiums		-			6
Accretion of deferred loan fees and costs, net		(1,629	)		(3,482	)
Stock-based compensation expense		385			313
Gain on the sale of investment securities available for sale		-			(362	)
Net gain on loans held for sale		(11,349	)		(4,416	)
Loans held for sale-originations		(377,608	)		(276,705	)
Loans held for sale-proceeds		408,381			238,398
Gain on the sale of SBA loans		(225	)		(636	)
Increase in the cash surrender value of bank-owned life insurance		(66	)		(61	)
Changes in assets and liabilities which provided (used) cash:
Accrued interest receivable		(519	)		(284	)
Prepaid expenses and other assets		(493	)		1,093
Accrued interest payable		238			(52	)
Accrued expenses and other liabilities		3,540			(224	)
Net Cash Provided by (Used in) Operating Activities		32,249			(40,409	)
Cash Flows from Investing Activities
Purchase of interest-earning time deposits		(2,132	)		(2,141	)
Redemption of interest-earning time deposits		4,487			3,712
Principal repayments on investment securities available for sale		787			801
Proceeds from the sale of investment securities available for sale		-			5,862
Net increase in loans receivable		(175,266	)		(21,335	)
Purchase of Federal Home Loan Bank stock		(8,331	)		(913	)
Redemption of Federal Home Loan Bank stock		6,556			560
Acquisition of Oakmont Capital Holdings, net of cash acquired		-			1,259
Capitalized expenditures on other real estate owned		-			(203	)
Purchase of premises and equipment		(507	)		(400	)
Net Cash Used in Investing Activities		(174,406	)		(12,798	)
Cash Flows from Financing Activities
Net increase in demand deposits, money markets, and savings accounts		103,630			111,258
Net decrease in certificate accounts		(3,682	)		(30,596	)
Increase (decrease) in advances from borrowers for taxes and insurance		756			(423	)
Repayments of Federal Home Loan Bank short-term borrowings		(131,300	)		(10,000	)
Proceeds from Federal Home Loan Bank short-term borrowings		115,300			21,000
Repayments of Federal Home Loan Bank long-term borrowings		(20,171	)		(4,000	)
Proceeds from Federal Home Loan Bank long-term borrowings		80,000			-
Repayments of Federal Reserve Bank long-term borrowings		(3,895	)		(43,170	)
Repayments of other borrowings		-			(9,956	)
Dividends paid		(751	)		(618	)
Noncontrolling interest capital distribution		(279	)		-
Purchase of treasury stock		(46	)		(25	)
Proceeds from the reissuance of treasury stock		48			53
Proceeds from the exercise of stock options		181			87
Net Cash Provided by Financing Activities		139,791			33,610
Net Decrease in Cash and Cash Equivalents		(2,366	)		(19,597	)
Cash and Cash Equivalents – Beginning of Year		10,705			33,913
Cash and Cash Equivalents – End of Year	$	8,339		$	14,316

See accompanying notes to the unaudited consolidated financial statements.

Quaint Oak Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	For the Nine Months
	Ended September 30,
	2022		2021
	(In Thousands)
Supplementary Disclosure of Cash Flow and Non-Cash Information:
Cash payments for interest	$	4,496	$	3,348
Cash payments for income taxes	$	2,892	$	2,405
Initial recognition of operating lease right-of use assets	$	560	$	670
Initial recognition of operating lease obligations	$	502	$	670

See accompanying notes to the unaudited consolidated financial statements.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1– Financial Statement Presentation and Significant Accounting Policies

Basis of Financial Presentation.The consolidated financial statements include the accounts of Quaint Oak Bancorp, Inc., a Pennsylvania chartered corporation (the ~~"Company"~~“Company” or ~~"Quaint~~“Quaint Oak ~~Bancorp"~~Bancorp”) and its wholly owned subsidiary, Quaint Oak Bank, a Pennsylvania chartered stock savings bank ~~("Bank"~~(the Bank”), along with its wholly owned subsidiaries. At September 30, ~~2017,~~ 2022, the Bank has ~~five~~six wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, ~~and~~ Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, each a Pennsylvania limited liability company. The mortgage, real estate and abstract companies offer mortgage banking, real estate sales and title abstract services, respectively, primarily in the Lehigh Valley, ~~region~~Delaware Valley and Philadelphia County regions of ~~Pennsylvania, and~~Pennsylvania. These companies began operation in July 2009.In February, 2019, Quaint Oak Mortgage opened a mortgage banking office in Philadelphia, Pennsylvania. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. ~~On August 1, 2016,~~ Quaint Oak Insurance Agency, LLC began operations ~~by acquiring the renewal rights to the book of business produced and serviced by Signature Insurance Services, LLC, an independent insurance agency located~~ in ~~New Britain, Pennsylvania, that~~August 2016 and provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021 and operates as a multi-state specialty commercial real estate financing company. On April 29, 2022, Oakmont Commercial, LLC, a wholly owned subsidiary of Quaint Oak Bank, purchased all the stock of KCMI Capital, Inc., a Pennsylvania corporation and subsidiary of Wilmington Savings Fund Society, FSB. The purchase price for the shares totaled approximately $55.5 million, which represented the unpaid principal balance of the loan portfolio, the primary asset of KCMI Capital, Inc. As of January 4, 2021, the Bank holds a majority equity position in Oakmont Capital Holdings, LLC, a multi-state equipment finance company based in West Chester, Pennsylvania with a second significant facility located in Albany, Minnesota. All significant intercompany balances and transactions have been eliminated.

The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation. Pursuant to the ~~Bank's~~Bank’s election under Section ~~10(l)~~10(l) of the Home ~~Owners'~~Owners’ Loan Act, the Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. The market area served by the Bank is principally Bucks, ~~County, Pennsylvania and to a lesser extent,~~ Montgomery and Philadelphia Counties and the Lehigh Valley area in Pennsylvania. The Bank has ~~two~~three banking locations: the main office location in Southampton, Pennsylvania and a regional banking ~~office~~offices in the Lehigh Valley ~~area of~~and Philadelphia. The Bank also has a mortgage office in Philadelphia and an insurance agency office in New Britain Township, Pennsylvania. The principal deposit products offered by the Bank are certificates of deposit, money market accounts, ~~savings accounts and, beginning in December 2014,~~ non-interest bearing checking accounts for businesses and ~~consumers.~~consumers, and savings accounts. The principal loan products offered by the Bank are fixed and adjustable rate residential and commercial mortgages, construction loans, commercial business loans, home equity loans, and lines of ~~credit, and commercial business loans.~~

credit.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim information and with the instructions to Form ~~10-Q,~~10-Q, as applicable to a smaller reporting company. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements.

The foregoing consolidated financial statements are unaudited; but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation thereof. The balances as of December 31, ~~2016~~ 2021 have been derived from the audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Quaint Oak ~~Bancorp's 2016~~Bancorp’s 2021 Annual Report on Form ~~10-K.~~10-K. The results of operations for the ~~three or~~ nine months ended September 30, ~~2017~~ 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2022.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1– Financial Statement Presentation and Significant Accounting Policies (Continued)

Use of Estimates in the Preparation of Financial Statements. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The ~~Company's~~Company’s most significant estimates are the determination of the allowance for loan losses and the valuation of deferred tax assets.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 1 – Financial Statement Presentation~~

Critical Accounting Policies. The Company’s critical accounting policies involving significant judgments and ~~Significant Accounting Policies (Continued)~~

~~Loans Receivable.~~ Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees and costs. Interest income is accrued on the unpaid principal balance. Loan origination fees and costs are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Bank is generally amortizing these amounts over the contractual life of the loan.

The loans receivable portfolio is segmented into residential loans, commercial real estate loans, construction loans and consumer loans. The residential loan segment has two classes: one-to-four family residential owner occupied loans and one-to-four residential family non-owner occupied loans. The commercial real estate loan segment consists of the following classes: multi-family (five or more) residential, commercial real estate and commercial lines of credit. Construction loans are generally granted for the purpose of building a single residential home. Commercial business loans are loans to businesses for working capital, purchase of a business, tenant improvements, receivables, purchase of inventory, and for the purchase of business essential equipment. Business essential equipment is equipment necessary for a business to support or assist with the day-to-day operation or profitability of the business. The consumer loan segment consists of the following classes: home equity loans and other consumer loans. Included in the home equity class are home equity loans and home equity lines of credit. Included in the other consumer are loans secured by saving accounts.

The accrual of interest is generally discontinued when principal or interest has become 90 days past due unless the loan is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management's judgment as to the collectability of principal. Generally, a loan is restored to accrual status when the obligation is brought current, it has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

~~Allowance for Loan Losses.~~ The allowance for loan losses represents management's estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans receivable. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)~~

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are designated as impaired. For loans that are designated as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary lending areas, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio, duration of the current business cycle and bank regulatory examination results. The applied loss factors are reevaluated quarterly to ensure their relevance in the current economic environment. Residential owner occupied mortgage lending generally entails a lower risk of default than other types of lending. Consumer loans and commercial real estate loans generally involve more risk of collectability because of the type and nature of the collateral and, in certain cases, the absence of collateral. It is the Company's policy to establish a specific reserve for loss on any delinquent loan when it determines that a loss is probable. An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the ~~methodologies for estimating specific and general losses in the portfolio.~~

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company's impaired loans are measured based on the estimated fair value of the loan's collateral.

A loan is identified as a troubled debt restructuring ("TDR") if the Company, for economic or legal reasons related to a debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider. Concessions granted under a TDR typically involve a temporary or permanent reduction in payments or interest rate or an extension of a loan's stated maturity date at less than a current market rate of interest. Loans identified as TDRs are designated as impaired.

For loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)~~

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower's overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for all loans (except one-to-four family residential owner-occupied loans) where the total amount outstanding to any borrower or group of borrowers exceeds $500,000, or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans criticized as special mention have potential weaknesses that deserve management's close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management's comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

~~Loans Held for Sale~~. Loans originated by the Bank's mortgage banking subsidiary, Quaint Oak Mortgage, LLC, are intended for sale in the secondary market and are carried at the lower of cost or fair value (LOCOM). Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income, and direct loan origination costs, commissions and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan.

~~Federal Home Loan Bank Stock~~. Federal law requires a member institution of the Federal Home Loan Bank (FHLB) system to hold restricted stock of its district Federal Home Loan Bank according to a predetermined formula. FHLB stock is carried at cost and evaluated for impairment. When evaluating FHLB stock for impairment, its value is determined based on the ultimate recoverability of the par value of the stock. We evaluate our holdings of FHLB stock for impairment each reporting period. No impairment charges were recognized on FHLB stock during the three or nine months ended September 30, 2017 and 2016.

~~Bank Owned Life Insurance (BOLl).~~ The Company purchases bank owned life insurance as a mechanism for funding various employee benefit costs. The Company is the beneficiary of these policies that insure the lives of certain officers of its subsidiaries. The Company has recognized the cash surrender value under the insurance policies as an asset in the consolidated balance sheets. Changes in the cash surrender value are recorded in non-interest income in the consolidated statements of income.

~~Intangible Assets.~~ Intangible assets on the consolidated balance sheets represent the acquisition by Quaint Oak Insurance Agency of the renewal rights to the book of business produced and serviced by Signature Insurance Services, LLC on August 1, 2016 at a total cost of $1.0 million. Based on a valuation, $515,000 of the purchase price was determined to be goodwill and $485,000 was determined to be related to the renewal rights to the book of business and deemed an other intangible asset. The renewal rights are being amortized over a ten year period based upon the annual retention rate of the book of business.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)~~

~~The Company will complete a goodwill and other intangible asset analysis at least on an annual basis or more often if events and circumstances indicate that there may be impairment.~~

~~Other Real Estate Owned, Net~~. Other real estate owned or foreclosed assets are comprised of property acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure and loans classified as in-substance foreclosures. A loan is classified as in-substance foreclosure when the Bank has taken possession of the collateral regardless of whether formal foreclosure proceedings take place. Other real estate properties are initially recorded at fair value, net of estimated selling costs at the date of foreclosure, establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of cost or fair value less estimated costs to sell. Net revenue and expenses from operations and additions to the valuation allowance are included in other expenses. The Company had no one-to-four family residential properties for which foreclosure proceedings are in process at September 30, 2017.

~~Share-Based Compensation.~~ Compensation expense for share-based compensation awards is based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award.

At September 30, 2017, the Company has three share-based plans: the 2008 Recognition and Retention Plan ("RRP"), the 2008 Stock Option Plan, and the 2013 Stock Incentive Plan. Awards under these plans were made in May 2008 and 2013. These plans are more fully described in Note 10.

The Company also has an employee stock ownership plan ("ESOP"). This plan is more fully described in Note 10. As ESOP shares are committed to be released and allocated among participants, the Company recognizes compensation expense equal to the average market price of the shares over the period earned.

~~Comprehensive Income (Loss).~~ Accounting principles generally accepted in the United States of America require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity sectionpreparation of the consolidated ~~balance sheet and along with net income, are components~~financial statements as of ~~comprehensive income.~~

~~Earnings per Share.~~ ~~Amounts reported~~September 30, 2022 have remained unchanged from the disclosures presented in earnings per share reflect earnings available to common stockholders' for the period divided by the weighted average number of shares of common stock outstanding during the period, exclusive of undeserved ESOP shares, unvested restricted stock (RRP) shares and treasury shares. Stock options and unvested restricted stock are regarded as potential common stock and are considered in the diluted earnings per share calculations to the extent they would have a dilutive effect if converted to common stock, computed using the "treasury stock" method.

our Annual Report on Form 10-K.

Recent Accounting ~~Pronouncements.~~Pronouncements Not Yet Adopted. In ~~May 2014,~~ June 2016, the FASB issued ASU ~~2014-09,~~ ~~Revenue from Contracts with Customers~~ (a new revenue recognition standard). The Update's core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company's financial instruments are not within the scope of Topic 606. However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 1 – Financial Statement Presentation and Significant Accounting Policies (Continued)~~

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (g) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact to the financial statements. Based on the Company's preliminary analysis of its current portfolio, the impact to the Company's balance sheet is estimated to result in less than a 1% increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

~~In June 2016, the FASB issued ASU 2016-13,~~-13,Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect ~~management's~~management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU ~~2016-13~~2016-13 is effective for annual and interim periods beginning after December 15, ~~2019,~~ 2022, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is ~~adopted..~~adopted. We expect to recognize a ~~one-time~~one-time cumulative-effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective.

The Company has contracted with a third-party software vendor to assist with the implementation of CECL. The Company is actively working on preliminary test calculations, data validation, as well as process and procedural documentation. The Company is currently conducting runs of the CECL model and the incurred-loss model in parallel. The new model will include additional assumptions used to calculate credit losses over the estimated life of financial assets and will include the impact of forecasted economic conditions. While the total impact of CECL to the Company’s financial statements is unknown at this time, the Company recognizes it may be material.

In November 2019, the FASB issued ASU 2019-10,Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This Update defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such ~~one-time~~one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1– Financial Statement Presentation and Significant Accounting Policies (Continued)

In ~~August 2016,~~ January 2017, the FASB issued ASU ~~2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~, which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company's statement of cash flows.

~~In December 2016, the FASB issued ASU 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customer~~. This Update, among others things, clarifies that guarantee fees within the scope of Topic 460, Guarantees, (other than product or service warranties) are not within the scope of Topic 606. The effective date and transition requirements for ASU 2016-20 are the same as the effective date and transition requirements for the new revenue recognition guidance. For public entities with a calendar year-end, the new guidance is effective in the quarter and year beginning January 1, 2018. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations.

~~In January 2017, the FASB issued ASU 2017-04,~~ -04,Simplifying the Test for Goodwill ~~Impairment~~.Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting ~~units~~unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission ~~("SEC"~~(“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date for ASC 350, Intangibles – Goodwill and Other, for smaller reporting companies to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the ~~Company's~~Company’s financial ~~statements~~statements.

In May 2019, the FASB issued ASU 2019-05,Financial Instruments – Credit Losses, Topic 326, which allows entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost upon adoption of the new credit losses standard. To be eligible for the transition election, the existing financial asset must otherwise be both within the scope of the new credit losses standard and eligible for the applying the fair value option in ASC 825-10.3. The election must be applied on an instrument-by-instrument basis and is not available for either available-for-sale or held-to-maturity debt securities. For entities that elect the fair value option, the difference between the carrying amount and the fair value of the financial asset would be recognized through a cumulative-effect adjustment to opening retained earnings as of the date an entity adopted ASU 2016-13. Changes in fair value of that financial asset would subsequently be reported in current earnings. For entities that have not yet adopted ASU 2016-13, the effective dates and transition requirements are the same as those in ASU 2016-13. For entities that have adopted ASU 2016-13, ASU 2019-05 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted once ASU 2016-13 has been adopted. In November, 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date for ASC 944,Financial Services – Insurance, for public business entities that are SEC filers, except for smaller reporting companies, to fiscal years beginning after December 15, 2021, and interim periods within those fiscal years and for all other entities, including smaller reporting companies, to fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. This Update is not expected to have a significant impact on the Company’s financial statements.

In March 2020, the FASB issued ASU 2020-03,Codification Improvements to Financial Instruments. This ASU was issued to improve and clarify various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. The ASU includes seven issues that describe the areas of improvement and the related amendments to GAAP; they are intended to make the standards easier to understand and apply and to eliminate inconsistencies, and they are narrow in scope and are not expected to significantly change practice for most entities. Among its provisions, the ASU clarifies that all entities, other than public business entities that elected the fair value option, are required to provide certain fair value disclosures under ASC 825,Financial Instruments, in both interim and annual financial statements. It also clarifies that the contractual term of a net investment in a lease under Topic 842 should be the contractual term used to measure expected credit losses under Topic 326. Amendments related to ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is not permitted before an entity’s adoption of ASU 2016-01. Amendments related to ASU 2016-13 for entities that have not yet adopted that guidance are effective upon adoption of the amendments in ASU 2016-13. Early adoption is not permitted before an entity’s adoption of ASU 2016-13. Amendments related to ASU 2016-13 for entities that have adopted that guidance are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Other amendments are effective upon issuance of this ASU. This Update is not expected to have a significant impact on the Company’s financial statements.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1– Financial Statement Presentation and Significant Accounting Policies (Continued)

In March ~~2017,~~ 2020, the FASB issued ASU ~~2017-08,~~ ~~Receivables – Nonrefundable Fees~~2020-04,Reference Rate Reform (Topic 848):Facilitation of the Effects of Reference Rate Reform on Financial Reporting,March 2020, to provide temporary optional expedients and ~~Other Costs (Subtopic 310-20).~~exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to re-measure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ~~Update shorten~~ASU are effective for all entities upon issuance through December 31, 2022. The Company is currently evaluating the ~~amortization period~~impact the adoption of the standard will have on the Company’s financial position or results of operations.

In January 2021, the FASB issued ASU 2021-01,Reference Rate Reform (Topic 848), which provides optional temporary guidance for entities transitioning away from the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) to new references rates so that derivatives affected by the discounting transition are explicitly eligible for certain ~~callable debt securities held at a premium. Specifically,~~optional expedients and exceptions within Topic 848. ASU 2021-01 clarifies that the derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2021-01 is effective immediately for all entities. Entities may elect to apply the amendments ~~require~~on a full retrospective basis as of any date from the ~~premium~~beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be ~~amortized to the earliest call date.~~issued. The amendments in this update do not apply to contract modifications made, as well as new hedging relationships entered into, after December 31, 2022, and to existing hedging relationships evaluated for effectiveness for periods after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2022, the FASB issued ASU 2022-02,Financial Instruments - Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an ~~accounting change~~entity disclose current-period gross write-offs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for ~~securities held at a discount; the discount continues to be amortized to maturity. For public business~~ entities that have adopted the amendments in ~~this~~ Update ~~are effective~~2016-13 for fiscal years, and interim periods within those fiscal years, ~~beginning~~beginning after December 15, ~~2018.~~ 2022. Early adoption ~~is permitted,~~using prospective application, including adoption in an interim ~~period. If an entity early adopts~~period where the ~~amendments in an interim period, any adjustments~~guidance should be ~~reflected~~applied as of the beginning of the fiscal ~~year that includes that interim period. An entity should apply~~year. The Company is currently evaluating the ~~amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as~~impact the adoption of the ~~beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. This Update is not expected to~~standard will have ~~a significant impact~~ on the ~~Company's~~Company’s financial ~~statements~~.position or results of operations.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation~~

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1– ~~Stock Compensation (Topic 718)~~, which affects any entity that changes the terms or conditions of a share-based payment award. This Update amends the definition of modification by qualifying that modification accounting does not apply to changes to outstanding share-based payment awards that do not affect the total fair value, vesting requirements, or equity/liability classification of the awards. The amendments in this Update are effective for all entities for annual periods, Financial Statement Presentation and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. ~~This Update is not expected to have a significant impact on the Company's financial statements~~.

Significant Accounting Policies (Continued)

Reclassifications. Certain items in the ~~2016~~2021 consolidated financial statements have been reclassified to conform to the presentation in the ~~2017~~2022 consolidated financial statements. Such reclassifications did not have a material impact on the presentation of the overall financial statements. The reclassifications had no effect on net income or ~~stockholders'~~stockholders’ equity.

Note 2– Earnings Per Share

Earnings per share ~~("EPS"~~(“EPS”) consists of two separate components, basic EPS and diluted EPS. Basic EPS is computed based on the weighted average number of shares of common stock outstanding for each period presented. Diluted EPS is calculated based on the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents ~~("CSEs"~~(“CSEs”). CSEs consist of shares that are assumed to have been purchased with the proceeds from the exercise of stock options, as well as unvested restricted Earnings per share (“EPS”) consists of two separate components, basic EPS and diluted EPS. Basic EPS is computed based on the weighted average number of shares of common stock outstanding for each period presented. Diluted EPS is calculated based on the weighted average number of shares of common stock outstanding plus dilutive common stock equivalents (“CSEs”). CSEs consist of shares that are assumed to have been purchased with the proceeds from the exercise of stock options, as well as unvested restricted stock ~~(RRP) shares.~~awards. Common stock equivalents which are considered antidilutive are not included for the purposes of this calculation. For the three and nine months ended September 30, ~~2017~~ 2022 and ~~2016,~~2021, all ~~unvested restricted stock program awards and~~ outstanding stock options granted under the 2008 Stock Option Plan, the 2013 Stock Incentive Plan and the 2018 Stock Incentive Plan representing shares were dilutive.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computations.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Net Income Attributable to Quaint Oak Bancorp, Inc.	$	2,635,000	$	1,782,000	$	6,654,000	$	4,321,000

Weighted average shares outstanding – basic		2,050,650		2,002,816		2,034,153		1,991,336
Effect of dilutive common stock equivalents		118,082		97,211		116,791		93,950
Adjusted weighted average shares outstanding – diluted		2,168,732		2,100,026		2,150,944		2,085,286

Basic earnings per share	$	1.29	$	0.89	$	3.27	$	2.17
Diluted earnings per share	$	1.22	$	0.85	$	3.09	$	2.07

For the Three Months Ended
September 30,

For the Nine Months Ended
September 30,

2017 2016 2017 2016
Net Income $
595,000
$ 402,000 $ 1,290,000 $ 1,043,000

Weighted average shares outstanding – basic 1,868,969 1,792,673 1,857,682 1,774,343
Effect of dilutive common stock equivalents 138,850 157,740 140,456 161,414
Adjusted weighted average shares outstanding – diluted 2,007,819 1,950,413 1,998,138 1,935,757

Basic earnings per share $ 0.32 $ 0.22 $ 0.69 $ 0.59
Diluted earnings per share $ 0.30 $ 0.21 $ 0.65 $ 0.54

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 3– Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, ~~2017~~ 2022 and ~~2016~~2021 (in thousands):

Unrealized Gains (Losses) on Investment Securities
Available for Sale (1)

For the Three Months Ended
September 30,

For the Nine Months Ended
September 30,

2017 2016 2017 2016
Balance at the beginning of the period $ (8 ) $ 1 $ (38 ) $ (12 )
Other comprehensive income (loss) before classifications 7 (3 ) 37 10
Amount reclassified from accumulated other comprehensive income (loss)
-

-

-

-

Total other comprehensive income (loss) 7
(3
) 37 10
Balance at the end of the period $
(1
) $ (2 ) $ (1 ) $ (2 )

~~_______________~~

~~(1)~~

	Unrealized Gains (Losses) on Investment Securities Available for Sale (1)
	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2022			2021		2022			2021
Balance at the beginning of the period	$	(18	)	$	34	$	23		$	118
Other comprehensive income (loss) before classifications		(1	)		-		(42	)		202
Amount reclassified from accumulated other comprehensive loss		-			-		-			(286	)
Total other comprehensive loss		(1	)		-		(42	)		(84	)
Balance at the end of the period	$	(19	)	$	34	$	(19	)	$	34

_________________

(1) All amounts are net of tax. Amounts in parentheses indicate debits.

The following table presents significant amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2022 and 2021 (in thousands):

Details About Other Comprehensive Loss	Amount Reclassified from Accumulated Other Comprehensive (Loss) Income (1)									Affected Line Item in the Statement of Income
	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Unrealized losses on investment securities available for sale	$	-	$	-	$	-	$	362		Gain on sales of investment securities available for sale
		-		-		-		(76	)	Income taxes
	$	-	$	-	$	-	$	286

(1)

Amounts in parentheses indicate debits to net income.

Note 4– Investment in Interest-Earning Time Deposits

The investment in interest-earning time deposits as of September 30, ~~2017~~ 2022 and December 31, ~~2016,~~2021, by contractual maturity, are shown below ~~(in~~(in thousands):

	September 30, 2022		December 31, 2021
Due in one year or less	$	3,111	$	4,487
Due after one year through five years		2,458		3,437
Total	$	5,569	$	7,924

September 30,
2017

December 31,
2016

Investment in interest-earning time deposits
Due in one year or less $ 761 $ 2,849
Due after one year through five years 4,118 3,249
Total $ 4,879 $ 6,098

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 5– Investment Securities Available for Sale

The amortized cost, gross unrealized gains and losses, and fair value of investment securities available for sale at September 30, ~~2017~~ 2022 and December 31, ~~2016~~ 2021 are summarized below (in thousands):

September 30, 2017

Amortized Cost
Gross Unrealized Gains Gross Unrealized (Losses)
Fair Value

    Available for Sale:
   Mortgage-backed securities:
      Governmental National Mortgage Association securities $ 5,884 $ 20 $ - $ 5,904
      Federal Home Loan Mortgage Corporation securities 1,605 - (15 ) 1,590
          Federal National Mortgage Association securities 586 - (3 ) 583
             Total mortgage-backed securities 8,075 20 (18 ) 8,077
      Debt securities:
          U.S. government agency 360 - (3 ) 357
             Total available-for-sale securities $ 8,435 $ 20 $ (21 ) $ 8,434

December 31, 2016

Amortized Cost
Gross Unrealized Gains Gross Unrealized (Losses)
Fair Value

    Available for Sale:
   Mortgage-backed securities:
      Governmental National Mortgage Association securities $ 6,608 $ 1 $ (19 ) $ 6,590
      Federal Home Loan Mortgage Corporation securities 1,892 - (21 ) 1,871
          Federal National Mortgage Association securities 752 - (12 ) 740
             Total mortgage-backed securities 9,252 1 (52 ) 9,201
      Debt securities:
          U.S. government agency 360 - (6 ) 354
             Total available-for-sale securities $ 9,612 $ 1 $ (58 ) $ 9,555

	September 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Available for Sale:
Mortgage-backed securities:
Government National Mortgage Association securities	$	3,100	$	-	$	(26	)	$	3,074
Federal National Mortgage Association securities		117		2		-			119
Total available-for-sale-securities	$	3,217	$	2	$	(26	)	$	3,193

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Available for Sale:
Mortgage-backed securities:
Government National Mortgage Association securities	$	3,860	$	22	$	-	$	3,882
Federal National Mortgage Association securities		144		7		-		151
Total available-for-sale-securities	$	4,004	$	29	$	-	$	4,033

The amortized cost and fair value of ~~debt~~mortgage-backed securities at September 30, ~~2017,~~ 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):

Available for Sale
Amortized Cost Fair Value
Debt securities
Due after one year through five years $ 360 $ 357
Due after ten years 8,075 8,077
Total $ 8,435 $ 8,434

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 5 – Investment Securities Available for Sale (Continued)~~

	Available for Sale
	Amortized Cost		Fair Value
Due after five years through ten years	$	-	$	-
Due after ten years	$	3,217	$	3,193
Total	$	3,217	$	3,193

The following tables show the ~~Company's~~Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at September 30, ~~2017 and~~ 2022 (in thousands):

		September 30, 2022
		Less than Twelve Months					Twelve Months or Greater				Total
					Gross					Gross				Gross
	*Number of*				*Unrealized*					*Unrealized*				*Unrealized*
	*Securities*		*Fair Value*		*Loss*			*Fair Value*		*Losses*		*Fair Value*		*Losses*
Government National Mortgage Association securities	11	$	3,074	$	(26	)	$	-	$	-	$	3,074	$	(26	)

At December 31, ~~2016 (in thousands):~~

September 30, 2017
Less than Twelve Months Twelve Months or Greater Total

Number of
Securities
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses

Federal Home Loan
    Mortgage Corporation mortgage-backed
     securities
2 $ 768 $ (8 ) $ 822 $ (7 ) $ 1,590 $ (15 )
Federal National Mortgage Association mortgage-backed securities 1 - - 583 (3 ) 583 (3 )
Debt securities, U.S. government agency 1 - - 357 (3 ) 357 (3 )
        Total 4 $ 768 $ (8 ) $ 1,762 $ (13 ) $ 2,530 $ (21 )

December 31, 2016
Less than Twelve Months Twelve Months or Greater Total

Number of
Securities
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses

Governmental National Mortgage Association mortgage-backed securities 8 $ 5,874 $ (19 ) $ - $ - $ 5,874 $ (19 )
Federal Home Loan Mortgage Corporation mortgage-backed securities 2 1,871 (21 ) - - 1,871 (21 )
Federal National Mortgage Association mortgage-backed securities 1 740 (12 ) - - 740 (12 )
Debt securities, U.S. government agency 1 354 (6 ) - - 354 (6 )
        Total 12 $ 8,839 $ (58 ) $ - $ - $ 8,839 $ (58 )

~~At September 30, 2017,~~ 2021, there were ~~four~~no securities in an unrealized loss position that at such date had an aggregate depreciation of 0.80% from the Company's amortized cost basis. Management believes that the estimated fair value of the securities disclosed above is primarily dependent on the movement of market interest rates. Management evaluated the length of time and the extent to which the fair value has been less than cost and the financial condition and near term prospects of the issuer, including any specific events which may influence the operations of the issuer. The Company has the ability and intent to hold the securities until the anticipated recovery of fair value occurs. Management does not believe any individual unrealized loss as of September 30, 2017 represents an other-than-temporary impairment.position. There were no impairment charges recognized during the three ~~and~~ or nine months ended September 30, ~~2017~~ 2022 or ~~2016.~~2021.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses

The composition of net loans receivable is as follows (in thousands):

September 30,
2017

December 31,
2016

Real estate loans:
One-to-four family residential:
Owner occupied $ 5,434 $ 5,389
Non-owner occupied 52,501 51,893
Total one-to-four family residential 57,935 57,282
Multi-family (five or more) residential 20,326 14,641
Commercial real estate 86,800 77,730
Construction 15,387 15,355
Home equity 4,201 4,775
Total real estate loans 184,649 169,783

Commercial business 11,571 9,295
Other consumer 43 26
Total Loans 196,263 179,104

Deferred loan fees and costs (757 ) (692 )
Allowance for loan losses (1,735 ) (1,605 )
Net Loans $ 193,771 $ 176,807

	September 30, 2022			December 31, 2021
Real estate loans:
One-to-four family residential:
Owner occupied	$	17,424		$	9,779
Non-owner occupied		39,410			38,752
Total one-to-four family residential		56,834			48,531
Multi-family (five or more) residential		48,468			29,344
Commercial real estate		313,160			183,822
Construction		25,838			15,843
Home equity		5,265			4,706
Total real estate loans		449,565			282,246

Commercial business⁽¹⁾		138,133			129,608
Other consumer		3			12
Total Loans		587,701			411,866

Deferred loan fees and costs		(1,406	)		(2,638	)
Allowance for loan losses		(7,141	)		(5,262	)
Net Loans	$	579,154		$	403,966

__________________

⁽¹⁾Includes $3.0 million and $42.6 million of PPP loans at September 30, 2022 and December 31, 2021, respectively.

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the ~~Company's~~Company’s internal risk rating system as of September 30, ~~2017~~ 2022 and December 31, ~~2016~~2021 (in thousands):

	September 30, 2022
	Pass		Special Mention		Substandard		Doubtful		Total
One-to-four family residential owner occupied	$	17,014	$	410	$	-	$	-	$	17,424
One-to-four family residential non-owner occupied		39,402		-		8		-		39,410
Multi-family residential		46,760		-		1,708		-		48,468
Commercial real estate		312,163		-		997		-		313,160
Construction		25,838		-		-		-		25,838
Home equity		5,265		-		-		-		5,265
Commercial business		136,310		103		1,720		-		138,133
Other consumer		3		-		-		-		3
Total	$	582,755	$	513	$	4,433	$	-	$	587,701

	December 31, 2021
	Pass		Special Mention		Substandard		Doubtful		Total
One-to-four family residential owner occupied	$	9,365	$	414	$	-	$	-	$	9,779
One-to-four family residential non-owner occupied		38,743		-		9		-		38,752
Multi-family residential		27,621		1,723		-		-		29,344
Commercial real estate		181,914		-		1,908		-		183,822
Construction		15,843		-		-		-		15,843
Home equity		4,706		-		-		-		4,706
Commercial business		125,725		-		3,883		-		129,608
Other consumer		12		-		-		-		12
Total	$	403,929	$	2,137	$	5,800	$	-	$	411,866

September 30, 2017
Pass
Special
Mention
Substandard Doubtful Total
One-to-four family residential owner occupied $ 5,434 $ - $ - $ - $ 5,434
One-to-four family residential non-owner occupied 51,963 - 538 - 52,501
Multi-family residential 20,326 - - - 20,326
Commercial real estate 85,716 117 967 - 86,800
Construction 13,318 - 2,069 - 15,387
Home equity 4,201 - - - 4,201
Commercial business 11,535 36 - - 11,571
Other consumer 43 - - - 43
Total $ 192,536 $ 153 $ 3,574 $ - $ 196,263

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)

December 31, 2016
Pass
Special
Mention
Substandard Doubtful Total
One-to-four family residential owner occupied $ 5,389 $ - $ - $ - $ 5,389
One-to-four family residential non-owner occupied 50,864 122 907 - 51,893
Multi-family residential 14,641 - - - 14,641
Commercial real estate 76,281 117 1,332 - 77,730
Construction 13,355 - 2,000 - 15,355
Home equity 4,775 - - - 4,775
Commercial business 9,295 - - - 9,295
Other consumer 26 - - - 26
Total $ 174,626 $ 239 $ 4,239 $ - $ 179,104

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of September 30, ~~2017~~ 2022 as well as the average recorded investment and related interest income for the period then ended (in thousands):

	September 30, 2022
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		8		9		-		9		-
Multi-family residential		1,708		1,723		-		1,723		-
Commercial real estate		130		130		-		130		9
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
								-
With an allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		-		-		-		-		-
Multi-family residential		-		-		-		-		-
Commercial real estate		-		-		-		-		-
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

Total:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		8		9		-		9		-
Multi-family residential		1,708		1,723		-		1,723		-
Commercial real estate		130		130		-		130		9
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	1,846	$	1,862	$	-	$	1,862	$	9

September 30, 2017

Recorded
Investment

Unpaid
Principal
Balance

Related
Allowance

Average
Recorded
Investment

Interest
Income
Recognized

With no related allowance recorded:
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 565 565 - 1,058 18
Multi-family residential - - - - -
Commercial real estate 398 398 - 398 -
Construction 2,069 2,069 - 2,061 58
Home equity 46 46 - 48 4
Commercial business - - - - -
Other consumer - - - - -

With an allowance recorded:
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 170 170 38 95 4
Multi-family residential - - - - -
Commercial real estate 133 133 1 395 7
Construction - - - - -
Home equity - - - - -
Commercial business - - - - -
Other consumer - - - - -

Total:
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 735 735 38 1,153 22
Multi-family residential - - - - -
Commercial real estate 531 531 1 793 7
Construction 2,069 2,069 - 2,061 58
Home equity 46 46 - 48 4
Commercial business - - - - -
Other consumer - - - - -
Total $ 3,381 $ 3,381 $ 39 $ 4,055 $ 91

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of December 31, ~~2016~~ 2021 as well as the average recorded investment and related interest income for the year then ended (in thousands):

December 31, 2016

Recorded
Investment

Unpaid
Principal
Balance

Related
Allowance

Average
Recorded
Investment

Interest
Income
Recognized

With no related allowance recorded:
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 925 925 - 1,208 56
Multi-family residential - - - - -
Commercial real estate 660 660 - 660 7
Construction - - - - -
Home equity 49 49 - 82 6
Commercial business - - - - -
Other consumer - - - - -

With an allowance recorded:
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 167 167 28 169 8
Multi-family residential - - - - -
Commercial real estate 133 133 11 133 9
Construction - - - - -
Home equity - - - - -
Commercial business - - - - -
Other consumer - - - - -

Total:
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 1,092 1,092 28 1,377 64
Multi-family residential - - - - -
Commercial real estate 793 793 11 793 16
Construction - - - - -
Home equity 49 49 - 82 6
Commercial business - - - - -
Other consumer - - - - -
Total $ 1,934 $ 1,934 $ 39 $ 2,252 $ 86

	December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	66	$	-
One-to-four family residential non-owner occupied		9		9		-		9		-
Multi-family residential		-		-		-		-		-
Commercial real estate		131		131		-		131		12
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		18		-
Other consumer		-		-		-		-		-

With an allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		-		-		-		-		-
Multi-family residential		-		-		-		-		-
Commercial real estate		-		-		-		-		-
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

Total:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	66	$	-
One-to-four family residential non-owner occupied		9		9		-		9		-
Multi-family residential		-		-		-		-		-
Commercial real estate		131		131		-		131		12
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		18		-
Other consumer		-		-		-		-		-
Total	$	140	$	140	$	-	$	224	$	12

The loan portfolio also includes certain loans that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from loss mitigation activities and could include reductions in the interest rate, payment extensions, forbearance, or other actions. At ~~September 30, 2017,~~September30,2022, the Company had ~~eight~~two loans totaling ~~$719,000~~$138,000 that were identified as troubled debt restructurings. ~~All eight~~One of these loans ~~were~~was performing in accordance with ~~their~~its modified ~~terms.~~terms and one was on non-accrual as of September 30, 2022. During the nine month period ended September 30, 2022, no new loans were identified as TDRs. At December 31, ~~2016,~~ 2021, the Company had ~~eight~~two loans totaling ~~$733,000~~$140,000 that were identified as troubled debt ~~restructurings ("TDR").~~ restructurings. One of these loans was performing in accordance with its modified terms and one was on non-accrual as of December 31, 2021. If a TDR is placed on non-accrual it is not reverted back to accruing status until the borrower makes timely payments as contracted for at least ~~nine~~six months and future collection under the revised terms is probable. ~~During the nine months ended September 30, 2017, no new loans were identified as TDRs.~~

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)

~~The following tables present the Company's TDR loans as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands):~~

September 30, 2017

Number of
Contracts

Recorded
Investment

Non-
Accrual
Accruing
Related
Allowance

One-to-four family residential owner occupied - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 5 540 - 540 21
Multi-family residential - - - - -
Commercial real estate 1 133 - 133 1
Construction - - - - -
Home equity 2 46 - 46 -
Commercial business - - - - -
Other consumer - - - - -
Total 8 $ 719 $ - $ 719 $ 22

December 31, 2016

Number of
Contracts

Recorded
Investment

Non-
Accrual
Accruing
Related
Allowance

One-to-four family residential owner occupied - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 5 551 - 551 28
Multi-family residential - - - - -
Commercial real estate 1 133 - 133 11
Construction - - - - -
Home equity 2 49 - 49 -
Commercial business - - - - -
Other consumer - - - - -
Total 8 $ 733 $ - $ 733 $ 39

~~The contractual aging of the TDRs in the table above as of September 30, 2017 and December 31, 2016 is as follows (in thousands):~~

September 30, 2017

Accruing
Past Due
Less than 30
Days

Past Due
30-89 Days

90 Days or
More Past
Due

Non-
Accrual
Total
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 540 - - - 540
Multi-family residential - - - - -
Commercial real estate 133 - - - 133
Construction - - - - -
Home equity 46 - - - 46
Commercial business - - - - -
Other consumer - - - - -
Total $ 719 $ - $ - $ - $ 719

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)~~

December 31, 2016

Accruing
Past Due
Less than 30
Days

Past Due
30-89 Days

90 Days or
More Past
Due

Non-
Accrual
Total
One-to-four family residential owner occupied $ - $ - $ - $ - $ -
One-to-four family residential non-owner occupied 551 - - - 551
Multi-family residential - - - - -
Commercial real estate 133 - - - 133
Construction - - - - -
Home equity 49 - - - 49
Commercial business - - - - -
Other consumer - - - - -
Total $ 733 $ - $ - $ - $ 733

Any reserve for an impaired TDR loan is based upon the present value of the future expected cash flows discounted at the ~~loan's~~loan’s original effective rate or upon the fair value of the collateral less costs to sell, if the loan is deemed collateral dependent. At September 30, ~~2017~~ 2022 there were no commitments to lend additional funds to debtors whose loan terms have been modified as TDRs.

The general practice of the Bank is to work with borrowers so that they are able to pay back their loan in full. If a borrower continues to be delinquent or cannot meet the terms of a TDR modification and the loan is determined to be uncollectible, the loan will be charged off.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)~~

Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the three and nine months ended September 30, ~~2017~~ 2022 and recorded investment in loans receivable as of September 30, ~~2017 (in~~2022 (in thousands):

September 30, 2017

1-4 Family
Residential
Owner
Occupied

1-4 Family
Residential
Non-Owner
Occupied

Multi-Family
Residential

Commercial
Real Estate
Construction Home Equity
Commercial
Business
and Other
Consumer

Unallocated
Total
For the Three Months Ended September 30, 2017
Allowance for loan losses:
Beginning balance $ 45 $ 465 $ 156 $ 645 $ 137 $ 41 $ 111 $ 90 $ 1,690
Charge-offs - (38 ) - - - - - - (38 )
Recoveries - - - - - - - - -
Provision (2 ) 93 (14 ) 10 (4 ) (18 ) 18 - 83
Ending balance $ 43 $ 520 $ 142 $ 655 $ 133 $ 23 $ 129 $ 90 $ 1,735

For the Nine Months Ended September 30, 2017
Allowance for loan losses:
Beginning balance $ 41 $ 503 $ 103 $ 616 $ 138 $ 37 $ 87 $ 80 $ 1,605
Charge-offs - (38 ) - (24 ) - - - - (62 )
Recoveries - - - 3 - - - - 3
Provision 2 55 39 60 (5 )
(14
) 42 10 189
Ending balance $ 43 $ 520 $ 142 $ 655 $ 133 $ 23 $ 129 $ 90 $ 1,735

Ending balance evaluated
for impairment:
Individually $ - $ 38 $ - $ 1 $ - $ - $ - $ - $ 39
Collectively $ 43 $ 482 $ 142 $ 654 $ 133 $ 23 $ 129 $ 90 $ 1,696

Loans receivable:
Ending balance: $ 5,434 $ 52,501 $ 20,326 $ 86,800 $ 15,387 $ 4,201 $ 11,614 $ - $ 196,263

Ending balance evaluated
for impairment:
Individually $ - $ 735 $ - $ 531 $ 2,069 $ 46 $ - $ - $ 3,381
Collectively $ 5,434 $ 51,766 $ 20,326 $ 86,269 $ 13,318 $ 4,155 $ 11,614 $ - $ 192,882

	September 30, 2022
	1-4 Family Residential Owner Occupied		1-4 Family Residential Non-Owner Occupied			Multi-Family Residential		Commercial Real Estate		Construction			Home Equity		Commercial Business and Other Consumer			Unallocated			Total
*For the Three Months Ended September 30, 2022*
*Allowance for loan losses:*
Beginning balance	$	104	$	276		$	377	$	3,383	$	283		$	32	$	1,735		$	350		$	6,540
Charge-offs		-		-			-		-		-			-		(54	)		-			(54	)
Recoveries		-		-			-		-		-			-		-			-			-
Provision		15		7			90		187		(76	)		3		379			50			655
Ending balance	$	119	$	283		$	467	$	3,570	$	207		$	35	$	2,060		$	400		$	7,141

*For the Nine Months Ended September 30, 2022*
*Allowance for loan losses:*
Beginning balance	$	73	$	292		$	249	$	2,475	$	119		$	29	$	1,625		$	400		$	5,262
Charge-offs		-		-			-		-		-			-		(54	)		-			(54	)
Recoveries		-		-			-		-		-			-		-			-			-
Provision		46		(9	)		218		1,095		88			6		489			-			1,933
Ending balance	$	119	$	283		$	467	$	3,570	$	207		$	35	$	2,060		$	400		$	7,141

*Ending balance evaluated*
for impairment:
Individually	$	-	$	-		$	-	$	-	$	-		$	-	$	-		$	-		$	-
Collectively	$	119	$	283		$	467	$	3,570	$	207		$	35	$	2,060		$	400		$	7,141

*Loans receivable:*
Ending balance:	$	17,424	$	39,410		$	48,468	$	313,160	$	25,838		$	5,265	$	138,136					$	587,701

*Ending balance evaluated*																				��
for impairment:
Individually	$	-	$	8		$	1,708	$	130	$	-		$	-	$	-					$	1,846
Collectively	$	17,424	$	39,402		$	46,760	$	313,030	$	25,838		$	5,265	$	138,136					$	585,855

The Bank allocated increased allowance for loan loss provisions to the ~~1-4 family residential non-owner occupied~~commercial real estate loan portfolio class for the three and nine months ended September 30, ~~2017,~~ 2022, due primarily to ~~charge-offs~~changes in quantitative factors in this portfolio class. The Bank allocated increased allowance for loan loss provisions to the commercial business loan portfolio class for the nine months ended September 30, 2022, due primarily to changes in quantitative factors in this portfolio class. The Bank allocated increased allowance for loan loss provisions to the multi-family residential loan portfolio class for the nine months ended September 30, 2022, due primarily to changes in qualitative and quantitative factors in this portfolio class.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)

Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the three and nine months ended September 30, 2021 and recorded investment in loans receivable as of September 30, 2021 (in thousands):

	September 30, 2021
	1-4 Family Residential Owner Occupied			1-4 Family Residential Non-Owner Occupied		Multi-Family Residential		Commercial Real Estate		Construction			Home Equity			Commercial Business and Other Consumer			Unallocated			Total
*For the Three Months Ended September 30, 2021*
*Allowance for loan losses:*
Beginning balance	$	72		$	356	$	242	$	1,617	$	163		$	26		$	970		$	300		$	3,746
Charge-offs		-			-		-		-		-			-			-			-			-
Recoveries		-			-		-		-		-			-			-			-			-
Provision		-			22		5		407		(28	)		(4	)		205			(50	)		557
Ending balance	$	72		$	378	$	247	$	2,024	$	135		$	22		$	1,175		$	250		$	4,303

*For the Nine Months Ended September 30, 2021*
*Allowance for loan losses:*
Beginning balance	$	88		$	362	$	229	$	1,287	$	62		$	20		$	763		$	250		$	3,061
Charge-offs		-			-		-		-		-			-			(17	)		-			(17	)
Recoveries		-			-		-		-		-			-			-			-			-
Provision		(16	)		16		18		737		73			2			429			-			1,259
Ending balance	$	72		$	378	$	247	$	2,024	$	135		$	22		$	1,175		$	250		$	4,303
*Ending balance evaluated*
for impairment:
Individually	$	-		$	-	$	-	$	-	$	-		$	-		$	-		$	-		$	-
Collectively	$	72		$	378	$	247	$	2,024	$	135		$	22		$	1,175		$	250		$	4,303

The Bank allocated increased allowance for loan loss provisions to the commercial real estate loan portfolio class for the three months ended September 30, 2021, due primarily to changes in quantitative and qualitative factors in this portfolio class. The Bank allocated increased allowance for loan loss provisions to the commercial real estate loan portfolio class for the ~~three and~~ nine months ended September 30, ~~2017,~~ 2021, due primarily to ~~increased balances and delinquencies~~changes in quantitative factors in this portfolio ~~class.~~class The Bank allocated increased allowance for loan loss provisions to the commercial business loan portfolio class for the three and nine months ended September 30, ~~2017,~~ 2021, due primarily to ~~increased balances~~changes in qualitative and ~~changes to qualitative~~quantitative factors in this portfolio class. ~~The Bank allocated increased allowance for loan loss provisions to~~In general, the ~~multi-family residential portfolio class for~~primary driver of the ~~nine months ended September 30, 2017, due primarily to increased balances~~increase in ~~this portfolio class. The Bank allocated decreased allowance for loan loss provisions to~~qualitative factors was the ~~home equity portfolio class for~~economic trends factor associated with the ~~three and nine months ended September 30, 2017, due primarily to decreased balances and delinquencies in this portfolio class.~~

COVID-19 pandemic.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)

~~Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the three and nine months ended September 30, 2016 (in thousands):~~

September 30, 2016

1-4 Family
Residential
Owner
Occupied

1-4 Family
Residential
Non-Owner
Occupied

Multi-Family
Residential

Commercial
Real Estate
Construction
Home
Equity

Commercial
Business
and Other
Consumer

Unallocated
Total
For the Three Months Ended September 30, 2016
Allowance for loan losses:
Beginning balance $ 46 $ 525 $ 66 $ 484 $ 115 $ 51 $ 37 $ 100 $ 1,424
Charge-offs - - - - - - - - -
Recoveries - - - - - - - - -
Provision (9 ) 25 (11 ) 63 28 (19 ) 14 (30 ) 61
Ending balance $ 37 $ 550 $ 55 $ 547 $ 143 $ 32 $ 51 $ 70 $ 1,485

For the Nine Months Ended September 30, 2016
Allowance for loan losses:
Beginning balance $ 55 $ 486 $ 81 $ 389 $ 153 $ 50 $ 18 $ 81 $ 1,313
Charge-offs - - - - - - - - -
Recoveries - - - - - - - - -
Provision (18 ) 64 (26 ) 158 (10 ) (18 ) 33 (11 ) 172
Ending balance $ 37 $ 550 $ 55 $ 547 $ 143 $ 32 $ 51 $ 70 $ 1,485

Ending balance evaluated
for impairment:
Individually $ - $ 30 $ - $ 11 $ - $ - $ - $ - $ 41
Collectively $ 37 $ 520 $ 55 $ 536 $ 143 $ 32 $ 51 $ 70 $ 1,444

The Bank allocated increased allowance for loan loss provisions to the commercial real estate and lines of credit, the 1-4 family residential non-owner occupied, and the commercial business loans portfolio classes for the three and nine months ended September 30, 2016, due primarily to increased balances in these portfolio classes. The Bank allocated increased allowance for loan loss provisions to the construction loan portfolio class for the three months ended September 30, 2016, due primarily to an increase in delinquencies in this portfolio class.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)~~

Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the year ended December 31, ~~2016~~ 2021 and recorded investment in loans receivable based on impairment evaluation as of December 31, ~~2016 (in~~2021 (in thousands):

December 31, 2016

1-4 Family
Residential
Owner
Occupied

1-4 Family
Residential
Non-Owner
Occupied

Multi-
Family
Residential

Commercial
Real Estate
Construction
Home
Equity

Commercial
Business
and Other
Consumer

Unallocated
Total
Allowance for loan losses:
Beginning balance $ 55 $ 486 $ 81 $ 389 $ 153 $ 50 $ 18 $ 81 $ 1,313
    Charge-offs - - - - - - - - -
    Recoveries - - - - - - - - -
    Provision (14 ) 17 22 227 (15 ) (13 ) 69 (1 ) 292
Ending balance $ 41 $ 503 $ 103 $ 616 $ 138 $ 37 $ 87 $ 80 $ 1,605
Ending balance evaluated
  for impairment:
    Individually $ - $ 28 $ - $ 11 $ - $ - $ - $ - $ 39
    Collectively $ 41 $ 475 $ 103 $ 605 $ 138 $ 37 $ 87 $ 80 $ 1,566
Loans receivable:
Ending balance $ 5,389 $ 51,893 $ 14,641 $ 77,730 $ 15,355 $ 4,775 $ 9,321 $ - $ 179,104
Ending balance evaluated
  for impairment:
    Individually $ - $ 1,092 $ - $ 793 $ - $ 49 $ - $ - $ 1,934
   Collectively $ 5,389 $ 50,801 $ 14,641 $ 76,937 $ 15,355 $ 4,726 $ 9,321 $ - $ 177,170

	December 31, 2021
	1-4 Family Residential Owner Occupied			1-4 Family Residential Non-Owner Occupied			Multi- Family Residential		Commercial Real Estate		Construction		Home Equity		Commercial Business and Other Consumer			Unallocated		Total
*Allowance for loan losses:*
Beginning balance	$	88		$	362		$	229	$	1,287	$	62	$	20	$	763		$	250	$	3,061
Charge-offs		-			-			-		-		-		-		(17	)		-		(17	)
Recoveries		-			-			-		-		-		-		17			-		17
Provision		(15	)		(70	)		20		1,188		57		9		862			150		2,201
Ending balance	$	73		$	292		$	249	$	2,475	$	119	$	29	$	1,625		$	400	$	5,262
Ending balance evaluated
for impairment:
Individually	$	-		$	-		$	-	$	-	$	-	$	-	$	-		$	-	$	-
Collectively	$	73		$	292		$	249	$	2,475	$	119	$	29	$	1,625		$	400	$	5,262

Loans receivable:
Ending balance	$	9,779		$	38,752		$	29,344	$	183,822	$	15,843	$	4,706	$	129,620				$	411,866
Ending balance evaluated
for impairment:
Individually	$			$	9		$	-	$	131	$	-	$	-	$	-				$	140
Collectively	$	9,779		$	38,743		$	29,344	$	183,691	$	15,843	$	4,706	$	129,620				$	411,726

The Bank allocated increased allowance for loan loss provisions to the commercial real estate ~~commercial business, and multi-family~~loan portfolio ~~classes~~class for the year ended December 31, ~~2016,~~ 2021, due primarily to ~~increased balances~~changes in ~~these~~volume and qualitative factors in this portfolio ~~classes.~~class. The Bank allocated increased allowance for loan loss provisions to the ~~one-to-four family residential non-owner occupied~~commercial business loan portfolio class for the year ended December 31, ~~2016,~~ 2021, due primarily to ~~increased specific reserves~~changes in qualitative factors in this portfolio class. The Bank allocated ~~decreased~~increased allowance for loan loss provisions to the multi-family loan portfolio class for the year ended December 31, 2021, due primarily to changes in qualitative factors in this portfolio class. The Bank allocated increased allowance for loan loss provisions to the construction ~~home equity, and one-to-four family owner occupied classes~~loan portfolio class for the year ended December 31, ~~2016~~ 2021, due ~~decreased balances or~~primarily to changes toin quantitative and qualitative factors in ~~these~~this portfolio ~~classes.~~class. In general, the primary driver of the increase in qualitative factors was the economic trends factor associated with the COVID-19 pandemic. In this regard, the Bank increased the unallocated component of the allowance for the year ended December 31, 2021 to cover uncertainties that could affect management’s estimate of probable losses primarily associated with the COVID-19 pandemic.

The following table presents non-accrual loans by classes of the loan portfolio as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022		December 31, 2021
One-to-four family residential owner occupied	$	-	$	-
One-to-four family residential non-owner occupied		8		9
Multi-family residential		1,708		-
Commercial real estate		-		-
Construction		-		-
Home equity		-		-
Commercial business		-		-
Other consumer		-		-
Total	$	1,716	$	9

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following ~~table presents~~ ~~nonaccrual loans by~~tables present the classes of the loan portfolio summarized by the past due status as of September 30, ~~2017~~ 2022 and December 31, ~~2016 (in~~2021 (in thousands):

September 30,
2017

December 31,
2016

One-to-four family residential owner occupied $ - $ -
One-to-four family residential non-owner occupied 195 541
Multi-family residential - --
Commercial real estate 398 660
Construction 2,069 -
Home equity - -
Commercial business - -
Other consumer - -
Total $ 2,662 $ 1,201

	September 30, 2022
	30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable 90 Days or More Past Due and Accruing
One-to-four family residential owner occupied	$	556	$	-	$	556	$	16,868	$	17,424	$	-
One-to-four family residential non-owner occupied		57		8		65		39,345		39,410		-
Multi-family residential		873		1,708		2,581		45,887		48,468		-
Commercial real estate		2,133		-		2,133		311,027		313,160		-
Construction		-		-		-		25,838		25,838		-
Home equity		40		-		40		5,225		5,265		-
Commercial business		2,129		-		2,129		136,004		138,133		-
Other consumer		-		-		-		3		3		-
Total	$	5,788	$	1,716	$	7,504	$	580,197	$	587,701	$	-

	*December 31, 2021*
	30-89 Days Past Due		90 Days or More Past Due		Total Past Due		*Current*		Total Loans Receivable		Loans Receivable 90 Days or More Past Due and Accruing
One-to-four family residential owner occupied	$	809	$	-	$	809	$	8,970	$	9,779	$	-
One-to-four family residential non-owner occupied		285		9		294		38,458		38,752		-
Multi-family residential		-		-		-		29,344		29,344		-
Commercial real estate		-		-		-		183,822		183,822		-
Construction		-		-		-		15,843		15,843		-
Home equity		-		-		-		4,706		4,706		-
Commercial business		367		-		367		129,241		129,608		-
Other consumer		-		-		-		12		12		-
Total	$	1,461	$	9	$	1,470	$	410,396	$	411,866	$	-

Non-performing loans, which consist of non-accruing loans plus accruing loans 90 days or more past due, amounted to ~~$3.5 million and $1.9~~$1.7 million at September 30, ~~2017~~ 2022 and $9,000 at December 31, ~~2016, respectively.~~ 2021. For the delinquent loans in our portfolio, we have considered our ability to collect the past due interest, as well as the principal balance of the loan, in order to determine whether specific loans should be placed on non-accrual status. In cases where our evaluations have determined that the principal and interest balances are collectible, we have continued to accrue interest.

For the three ~~and nine~~ months ended September 30, ~~2017~~ 2022 and ~~2016~~2021 there was no interest income recognized on non-accrual loans on a cash basis. ~~Interest~~There was $43,000 and $122,000 of interest income foregone on non-accrual loans ~~was approximately $63,000 and $103,000~~ for the three and nine months ended September 30, ~~2017,~~ 2022, respectively. ~~Interest~~There was $1,000 of interest income foregone on non-accrual loans ~~was approximately $26,000~~for both the three and ~~$82,000 for the three and~~ nine months ended September 30, ~~2016, respectively.~~2021.

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status as of September 30, 2017 and December 31, 2016 (in thousands):

September 30, 2017

30-89
Days Past
Due

90 Days
or More
Past Due

Total
Past Due

Current

Total Loans
Receivable

Loans
Receivable
90 Days or
More Past
Due and
Accruing

One-to-four family residential owner occupied $ 468 $ 417 $ 885 $ 4,549 $ 5,434 $ 417
One-to-four family residential non-owner
occupied

611

439

1,050

51,451

52,501

244

Multi-family residential 81 - 81 20,245 20,326 -
Commercial real estate 2,603 617 3,220 83,580 86,800 219
Construction 509 2,069 2,578 12,809 15,387 -
Home equity 34 - 34 4,167 4,201 -
Commercial business - - - 11,571 11,571 -
Other consumer - - - 43 43 -
Total $ 4,306 $ 3,542 $ 7,848 $ 188,415 $ 196,263 $ 880

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note ~~6 - Loans Receivable, Net and Allowance for Loan Losses (Continued)~~

December 31, 2016

30-89
Days Past
Due

90 Days
or More
Past Due

Total
Past Due

Current

Total Loans
Receivable

Loans
Receivable
90 Days or
More Past
Due and
Accruing

One-to-four family residential owner occupied $ 310 $ 9 $ 319 $ 5,070 $ 5,389 $ 9
One-to-four family residential non-owner
occupied

271

778

1,049

50,844

51,893

237

Multi-family residential - - - 14,641 14,641 -
Commercial real estate 385 777 1,162 76,568 77,730 117
Construction 596 308 904 14,451 15,355 308
Home equity 115 - 115 4,660 4,775 -
Commercial business 43 - 43 9,252 9,295 -
Other consumer - - - 26 26 -
Total $ 1,720 $ 1,872 $ 3,592 $ 175,512 $ 179,104 $ 671

~~Note~~ 7– Goodwill and Other Intangible, Net

On January 4, 2021, the Bank acquired a majority ownership interest in Oakmont Capital Holdings, LLC, a multi-state equipment finance company based in West Chester, Pennsylvania with a second significant facility located in Albany, Minnesota. The Bank recognized $2.1 million of goodwill as part of the acquisition of Oakmont Capital Holdings, LLC. On August 1, 2016, Quaint Oak Insurance Agency, LLC began operations by acquiring the renewal rights to ~~the~~a book of business produced and serviced by ~~Signature Insurance Services, LLC,~~ an independent insurance agency located in New Britain, Pennsylvania, that provides a broad range of personal and commercial insurance coverage solutions. The Company paid $1.0 million for these rights. Based on a valuation, $515,000 of the purchase price was determined to be goodwill and $485,000 was determined to be related to the renewal rights to the book of business and deemed to be an other intangible asset. This other intangible asset is being amortized over a ten year period based upon the annual retention rate of the book of business. The balance of other intangible ~~assets~~asset at September 30, ~~2017~~ 2022 was ~~$428,000~~$186,000, which is net of accumulated amortization of ~~$57,000.~~$299,000. Amortization expense for the three and nine months ended September 30, ~~2017~~2022 and 2021 amounted to ~~$13,000~~approximately $12,000 and ~~$37,000,~~$36,000, respectively.

Note 8– Deposits

Deposits consist of the following classifications (in thousands):

September 30,
2017

December 31,
2016

Non-interest bearing checking accounts $ 7,713 $ 5,852
Passbook accounts 534 1,189
Savings accounts 1,584 1,784
Money market accounts 30,151 31,114
Certificates of deposit 142,416 137,068
Total deposits $ 182,398 $ 177,007

	September 30, 2022		December 31, 2021
Non-interest bearing checking accounts	$	79,825	$	64,731
Passbook accounts		4		10
Savings accounts		1,662		1,828
Money market accounts		289,395		200,687
Certificates of deposit		176,228		179,910
Total deposits	$	547,114	$	447,166

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

Note 9– Borrowings

Federal Home Loan Bank advances consist of the following at September 30, ~~2017~~ 2022 and December 31, ~~2016 (in~~2021 (in thousands):

	September 30, 2022					December 31, 2021
	Amount		Weighted Interest Rate			Amount		Weighted Interest Rate
Short-term borrowings	$	10,000		3.11	%	$	26,000		0.28	%

Fixed rate borrowings maturing:
2022		17,000		1.72			7,171		2.10
2023		57,000		2.22			7,000		2.16
2024		6,167		2.05			6,167		2.05
2025		2,855		1.25			2,855		1.25
Total FHLB long-term debt	$	83,022		2.07	%	$	23,193		2.00	%

September 30, 2017 December 31, 2016
Amount
Weighted
Interest
Rate
Amount
Weighted
Interest
Rate

Short-term borrowings $ 11,500 1.27 % $ 7,000 0.54 %

Fixed rate borrowings maturing:
2017 $ - - % $ 2,500 1.15 %
2018 3,000 1.46 3,000 1.46
2019 3,000 1.86 2,000 1.95
2020 2,000 2.00 1,000 2.15
2021 2,000 1.96 - -
2022 2,000 2.12 - -
2023 2,000 2.28 - -
Total FHLB long-term debt $ 14,000 1.90 % $ 8,500 1.56 %

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 9 – Borrowings (Continued)

Federal Reserve Bank long-term borrowings decreased $3.9 million, or 100.0%, to none at September 30, 2022 from $3.9 million at December 31, 2021 as the Company paid off first round PPP loans pledged as collateral under the FRB’s Paycheck Protection Program Liquidity Facility (PPPLF). The Company did not utilize the FRB’s PPPLF to fund second round PPP loans. Under the PPPLF the Company pledged certain PPP loans as collateral and borrowed from the Federal Reserve at a rate of 0.35% that was fixed for two years.

There were no other short-term borrowings representing outstanding balances on two lines of credit that Oakmont Capital Holdings, LLC has with a credit union which are used to fund equipment loans. Borrowing capacity on the two lines of credit total $15.0 million at September 30, 2022.

Note 10– Stock Compensation Plans

Employee Stock Ownership Plan

The Company maintains an Employee Stock Ownership Plan (ESOP) for the benefit of employees who meet the eligibility requirements of the plan. Using proceeds from a loan from the Company, the ESOP purchased 8%, or 222,180 shares of the ~~Company's~~Company’s then outstanding common stock in the open market during 2007. The Bank ~~makes~~made cash contributions to the ESOP on a quarterly basis sufficient to enable the ESOP to make the required loan payments to the ~~Company.~~ Company until the loan was repaid in full as of September 30, 2021. The loan ~~bears~~bore an interest rate of 7.75% per annum, with principal and interest ~~to be~~ paid quarterly in equal installments over 15 ~~years.~~years pursuant to the terms of the original note. The loan iswas secured by the unallocated shares of common stock held by the ESOP.

~~Shares of the Company's common stock purchased by~~ The Bank made cash contributions to the ESOP ~~are held in~~on a ~~suspense account and reported as unallocated common stock held by~~quarterly basis sufficient to enable the ESOP to make the required loan payments to the Company until the loan was repaid in ~~stockholders' equity until released for allocation~~full as of September 30, 2021.

During the third quarter of 2022, the Company made a discretionary contribution of 4,000 shares to ~~participants. As~~ the ~~debt is repaid,~~ESOP. These shares ~~are~~were released from ~~collateral and are allocated to each eligible participant based on the ratio~~Treasury Stock at a cost of each such participant's base compensation to the total base compensation of eligible plan participants. As the unearned shares are committed to be released and allocated among participants, the Company recognizes compensation expense equal to the average market value of the shares, and the shares become outstanding for earnings per share computations.approximately $84,000. During the three and nine months ended September 30, ~~2017,~~ 2022, the Company recognized ~~$46,000~~$84,000 and ~~$138,000~~$259,000 of ESOP expense, respectively. During the three and nine months ended September 30, ~~2016,~~ 2021, the Company recognized ~~$43,000~~$65,000 and ~~$129,000~~$187,000 of ESOP expense, respectively.

~~Recognition & Retention and~~

Stock Incentive Plans

– Share Awards

In May ~~2008,~~ 2013, the shareholders of Quaint Oak Bancorp approved the adoption of the ~~2008 Recognition and Retention~~2013 Stock Incentive Plan (the ~~"RRP"~~“2013 Stock Incentive Plan”) ~~and Trust Agreement. In order to fund the RRP, the 2008 Recognition and Retention~~. The 2013 Stock Incentive Plan ~~Trust acquired 111,090~~approved by shareholders in May 2013 covered a total of 195,000 shares, of which 48,750, or 25%, may be restricted stock awards, for a balance of 146,250 stock options assuming all the ~~Company's stock in the open market at an average price of $4.68 totaling $520,000.~~restricted shares are awarded. In May ~~2013,~~ 2018, the shareholders of Quaint Oak Bancorp approved the adoption of the ~~2013~~2018 Stock Incentive Plan (the ~~"Stock~~“2018 Stock Incentive ~~Plan"~~Plan”). The2018 Stock Incentive Plan ~~provides that no more than 48,750,~~approved by shareholders in May 2018 covered a total of 155,000 shares, of which 38,750, or 25%, ~~of the shares~~ may be ~~granted as~~ restricted stock ~~awards.~~

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

awards, for a balance of 116,250 stock options assuming all the restricted shares are awarded.

As of September 30, ~~2017,~~ 2022 a total of ~~10,261~~9,122 share awards were unvested under the ~~RRP~~2013 and2018 Stock Incentive ~~Plan~~Plans and up to ~~21,968~~11,750 share awards were available for future grant under the 2018Stock Incentive Plan and ~~none~~1,800 share awards under the ~~RRP.~~2013 Stock Incentive Plan. The ~~RRP~~2013 and2018 Stock Incentive Plan share awards have vesting periods of five years.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 10– Stock Compensation Plans (Continued)

Stock Incentive Plans – Share Awards (Continued)

A summary of the status of the share awards under the ~~RRP~~2013 and2018 Stock Incentive ~~Plan~~Plans as of September 30, ~~2017~~ 2022 and ~~2016~~2021 and changes during the nine months ended September 30, ~~2017~~ 2022 and ~~2016~~2021 is as follows:

September 30, 2017 September 30, 2016

Number of
Shares

Weighted
Average Grant
Date Fair Value

Number of
Shares

Weighted
Average Grant
Date Fair Value

Unvested at the beginning of the period 20,524 $ 8.10 30,784 $ 8.10
Granted - - - -
Vested (10,263 ) 8.10 (10,260 ) 8.10
Forfeited - - - -
Unvested at the end of the period 10,261 $ 8.10 20,524 $ 8.10

	September 30, 2022					September 30, 2021
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Unvested at the beginning of the period		18,845		$	13.30		28,266		$	13.30
Granted		-			-		-			-
Vested		(9,123	)		13.30		(9,421	)		13.30
Forfeited		(600	)		13.30		-			-
Unvested at the end of the period		9,122		$	13.30		18,845		$	13.30

Compensation expense on the restricted stock awards is recognized ratably over the five year vesting period in an amount which is equal to the fair value of the common stock at the date of grant. During both the three ~~and nine~~ months ended September 30, ~~2017and 2016,~~2022 and 2021, the Company recognized approximately ~~$21,000 and $63,000 in~~$31,000 of compensation ~~expense was recognized, respectively.~~expense. A tax benefit of approximately $7,000 was recognized during each of these periods. During both the nine months ended September 30, 2022 and ~~$21,000, respectively,~~2021, the Company recognized approximately $93,000 of compensation expense. A tax benefit of approximately $20,000 was recognized during each of these periods. As of September 30, ~~2017,~~ 2022, approximately ~~$52,000~~$74,000 in additional compensation expense will be recognized over the remaining service period of approximately 0.6 years.

Stock Option and Stock Incentive Plans

– Stock Options

In May 2008, the shareholders of Quaint Oak Bancorp approved the adoption of the 2008 Stock Option Plan (the ~~"Option Plan"~~“Option Plan”). The Option Plan ~~authorizes~~authorized the grant of stock options to officers, employees and directors of the Company to acquire 277,726 shares of common stock with an exercise price no less than the fair market value on the date of the grant. The Option Plan expired February 13, 2018, however, outstanding options granted in 2013 remain valid and existing for the remainder of their 10 year terms. As described above under “Stock Incentive Plans – Share Awards”, the 2013Stock Incentive Plan approved by shareholders in May 2013 covered a total of 195,000 shares, of which ~~48,750~~ 146,250 may be ~~restricted stock awards, for a balance of 146,250~~ stock options assuming all the restricted shares are awarded.

~~For grants~~ The 2018 Stock Incentive Plan approved by shareholders in May ~~2008, the Compensation Committee~~2018 covered a total of ~~the Board~~155,000 shares, of ~~Directors determined to grant the~~which 116,250 may be stock options ~~at an exercise price equal to $5.00 per share (split-adjusted) which is higher than~~assuming all the ~~fair market value of the common stock on the grant date.~~ restricted shares are awarded.

All incentive stock options issued under the Option Plan and the 2013 and 2018Stock Incentive ~~Plan~~Plans are intended to comply with the requirements of Section 422 of the Internal Revenue Code.

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 10 – Stock Compensation Plans (Continued)~~

~~Stock Option~~ Options will become vested and ~~Stock Incentive Plans~~ ~~(Continued)~~

exercisable over a five year period and are generally exercisable for a period of ten years after the grant date.

As of September 30, ~~2017,~~ 2022, a total of ~~277,548~~205,936 grants of stock options were outstanding under the Option Plan and 2013 and 2018Stock Incentive ~~Plan~~Plans and ~~56,276~~40,250 stock options were available for future grant under the2018 Stock Incentive Plan, 7,400 stock options under the 2013 Stock Incentive Plan and none under the Option Plan. Options will become vested and exercisable over a five year period and are generally exercisable for a period of ten years after the grant date.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 10– Stock Compensation Plans (Continued)

Stock Option and Stock Incentive Plans – Stock Options (Continued)

A summary of option activity under the ~~Company~~'sCompany’s Option Plan and 2013 and 2018Stock Incentive ~~Plan~~Plans as of September 30, ~~2017~~ 2022 and ~~2016~~2021 and changes during the ~~nine~~three months ended September 30, ~~2017~~2022 and ~~2016~~ 2021is as follows:

2017 2016

Number
of
Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life (in
years)

Number
of
Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life (in
years)

Outstanding at the beginning of the year
316,348
$ 6.49
3.8

354,266
$ 6.33
4.7

Granted - - - - - -
Exercised (38,800 ) 5.00 - (26,518 ) 5.00 -
Forfeited - - - - - -
Outstanding at end of period 277,548 $ 6.70 3.4 327,748 $ 6.44 4.0
Exercisable at end of period 247,228 $ 6.53 3.1 266,148 $ 6.06 1.6

	2022							2021
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at the beginning of the period		233,136		$	10.96		4.2		240,636		$	10.98		5.2
Granted		-			-		-		-			-		-
Exercised		(21,000	)		8.60		-		(7,500	)		11.57		-
Forfeited		(6,200	)		10.62		-		-			-		-
Outstanding at end of period		205,936		$	11.21		3.7		233,136		$	10.96		4.5
Exercisable at end of period		175,009		$	10.96		6.3		180,081		$	10.28		5.6

During both the three ~~and nine~~ months ended September 30, ~~2017~~ 2022 and ~~2016,~~2021, approximately ~~$12,000 and $34,000~~$11,000 in compensation expense on stock options was ~~recognized, respectively.~~recognized. A tax benefit of approximately ~~$1,000~~ $1,000, was recognized during each of these periods. During both the nine months ended September 30, 2022 and ~~$3,000, respectively,~~2021, approximately $33,000 in compensation expense on stock options was recognized. A tax benefit of approximately $2,000, was recognized during each of these periods. As of September 30, ~~2017,~~ 2022, approximately $28,000 in additional compensation expense will be recognized over the remaining service period of approximately 0.6 years.

Note 11– Fair Value Measurements and Fair Values of Financial Instruments

Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair ~~value~~values estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments.

Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities and therefore, the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows.

The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing are as follows:

~~Quaint Oak Bancorp, Inc.~~

~~Notes to Unaudited Consolidated Financial Statements~~

~~Note 11 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)~~

Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 11– Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Level II: Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.

Level III: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

The methods of determining the fair value of assets and liabilities presented in this note are consistent with our methodologies disclosed in Note 19 of the Company’s 2021 Form 10-K, as the fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit and non-performance risk. Loans are considered a Level 3 classification.

The following is a discussion of assets and liabilities measured at fair value on a recurring and non-recurring basis and valuation techniques applied:

Investment Securities ~~Available-For-Sale:~~Available For Sale: The fair value of securities available for sale are determined by ~~obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or~~using matrix pricing (Level 2)2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the ~~securities'~~securities’ relationship to other benchmark quoted prices.

We may be required from time to time to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets.

Impaired Loans: Impaired loans are carried at the lower of cost or the fair value of the collateral for collateral-dependent loans less estimated costs to sell. Collateral is primarily in the form of real estate. The use of independent appraisals, discounted cash flow models and ~~management's~~management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and impaired loans are therefore classified within ~~level~~ Level 3 of the fair value hierarchy.

Other Real Estate Owned: Other real estate owned is carried at the lower of the investment in the real estate or the fair value of the real estate less estimated selling costs. The use of independent appraisals and ~~management's~~management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and therefore other real estate owned is classified within ~~level~~ Level 3 of the fair value hierarchy.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 11– Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of September 30, ~~2017 (in~~2022 (in thousands):

September 30, 2017
Fair Value Measurements Using:

Total Fair
Value

Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)

Significant Other
Observable
Inputs
(Level 2)

Unobservable
Inputs
(Level 3)

Recurring fair value measurements
Investment securities available for sale
   Governmental National Mortgage Association
      mortgage-backed securities
$ 5,904 $ - $ 5,904 $ -
Federal Home Loan Mortgage Corporation
  mortgage-backed securities

1,590

-

1,590

-

   Federal National Mortgage Association mortgage-backed securities
583

-

583

-

   Debt securities, U.S. government agency 357 - 357 -
      ��     Total investment securities available for sale $ 8,434 $ - $ 8,434 $ -

Nonrecurring fair value measurements
Impaired loans $ 3,342 $ - $ - $ 3,342
Other real estate owned 185 - - 185

	September 30, 2022
			Fair Value Measurements Using:
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring fair value measurements:
Investment securities available for sale
Government National Mortgage Association mortgage-backed securities	$	3,074	$	-	$	3,074	$	-
Federal National Mortgage Association mortgage- backed securities		119		-		119		-
Total investment securities available for sale	$	3,193	$	-	$	3,193	$	-
Total recurring fair value measurements	$	3,193	$	-	$	3,193	$	-

Nonrecurring fair value measurements
Impaired loans	$	1,846	$	-	$	-	$	1,846
Total nonrecurring fair value measurements	$	1,846	$	-	$	-	$	1,846

The table below sets forth the financial assets and liabilities that were accounted for on a recurring and nonrecurring basis by level within the fair value hierarchy as of December 31, ~~2016 (in~~2021 (in thousands):

			December 31, 2021
			Fair Value Measurements Using:
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring fair value measurements:
Investment securities available for sale
Government National Mortgage Association mortgage-backed securities	$	3,882	$	-	$	3,882	$	-
Federal National Mortgage Association mortgage- backed securities		151		-		151		-
Total investment securities available for sale	$	4,033	$	-	$	4,033	$	-
Total recurring fair value measurements	$	4,033	$	-	$	4,033	$	-

Nonrecurring fair value measurements
Impaired loans	$	140	$	-	$	-	$	140
Total nonrecurring fair value measurements	$	140	$	-	$	-	$	140

December 31, 2016
Fair Value Measurements Using:

Total Fair
Value

Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)

Significant Other Observable
Inputs
(Level 2)

Unobservable
Inputs
(Level 3)

Recurring fair value measurements
Investment securities available for sale
   Governmental National Mortgage Association
      mortgage-backed securities
$ 6,590 $ - $ 6,590 $ -
Federal Home Loan Mortgage Corporation
  mortgage-backed securities

1,871

-

1,871

-

   Federal National Mortgage Association mortgage-backed securities
740

-

740

-

   Debt securities, U.S. government agency 354 - 354 -
            Total investment securities available for sale $ 9,555 $ - $ 9,555 $ -

Nonrecurring fair value measurements
Impaired loans $ 1,895 $ - $ - $ 1,895
Other real estate owned 435 - - 435

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 11– Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used Level 3 inputs to determine fair value as of September 30, ~~2017~~ 2022 and December 31, ~~2016 (in~~2021 (in thousands):

September 30, 2017
Quantitative Information About Level 3 Fair Value Measurements

Total Fair
Value

Valuation
Techniques

Unobservable
Input

Range (Weighted
Average)

Impaired loans $ 3,342
Appraisal of collateral (1)

Appraisal adjustments (2)
0%-23% (1 %)

Other real estate owned $ 185
Appraisal of collateral (1)

Appraisal adjustments (2)
0%-10% (10 %)

December 31, 2016
Quantitative Information About Level 3 Fair Value Measurements

Total Fair
Value

Valuation
Techniques

Unobservable
Input

Range (Weighted
Average)

Impaired loans $ 1,895
Appraisal of collateral (1)

Appraisal adjustments (2)
0%-22% (2 %)

Other real estate owned $ 435
Appraisal of collateral (1)

Appraisal adjustments (2)
0%-29% (12 %)

September 30, 2022

Quantitative Information About Level 3 Fair Value Measurements

Total Fair

Value

Valuation

Techniques

Unobservable

Input

Range (Weighted

Average)

Impaired loans

1,846

Appraisal of collateral (1)

Appraisal adjustments (2)

8%(8%)

December 31, 2021

Quantitative Information About Level 3 Fair Value Measurements

Total Fair

Value

Valuation

Techniques

Unobservable

Input

Range (Weighted

Average)

Impaired loans

140

Appraisal of collateral (1)

Appraisal adjustments (2)

8%(8%)

________________

~~(1)~~

(1)

Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are identifiable.

~~(2)~~

(2)

Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal.

The estimated fair values of the ~~Company's~~Company’s financial instruments that are not required to be measured or reported at fair value were as follows at September 30, ~~2017~~ 2022 and December 31, ~~2016~~2021 (in thousands):

					Fair Value Measurements at
					September 30, 2022
	Carrying Amount		Fair Value Estimate		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Financial Assets
Investment in interest-earning time deposits	$	5,569	$	5,635	$	-	$	-	$	5,635
Loans held for sale		88,400		95,437		-		95,437		-
Loans receivable, net		579,154		553,379		-		-		553,379

Financial Liabilities
Deposits		547,114		547,151		370,886		-		176,265
FHLB long-term borrowings		83,022		82,791		-		-		82,791
Subordinated debt		7,958		7,911		-		-		7,911

Fair Value Measurements at
September 30, 2017

Carrying
Amount

Fair Value
Estimate

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Unobservable
Inputs
(Level 3)

Financial Assets
Cash and cash equivalents $ 8,229 $ 8,229 $ 8,229 $ - $ -
Investment in interest-earning time deposits 4,879 4,935 - - 4,935
Investment securities available for sale 8,434 8,434 - 8,434 -
Loans held for sale 6,473 6,741 - 6,741 -
Loans receivable, net 193,771 194,955 - - 194,955
Accrued interest receivable 925 925 925 - -
Investment in FHLB stock 1,134 1,134 1,134 - -
Bank-owned life insurance 3,793 3,793 3,793 - -

Financial Liabilities
Deposits 182,398 183,882 39,982 - 143,900
FHLB short-term borrowings 11,500 11,500 11,500 - -
FHLB long-term borrowings 14,000 13,997 - - 13,997
Accrued interest payable 147 147 147 - -

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 11– Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Fair Value Measurements at
December 31, 2016

Carrying
Amount

Fair Value
Estimate

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Unobservable
Inputs
(Level 3)

Financial Assets
Cash and cash equivalents $ 9,300 $ 9,300 $ 9,300 $ - $ -
Investment in interest-earning time deposits 6,098 6,163 - - 6,163
Investment securities available for sale 9,555 9,555 - 9,555 -
Loans held for sale 4,712 4,879 - 4,879 -
Loans receivable, net 176,807 177,870 - - 177,870
Accrued interest receivable 862 862 862 - -
Investment in FHLB stock 713 713 713 - -
Bank-owned life insurance 3,728 3,728 3,728 - -

Financial Liabilities
Deposits 177,007 179,050 39,939 - 139,111
FHLB short-term borrowings 7,000 7,000 7,000 - -
FHLB long-term borrowings 8,500 8,507 - - 8,507
Accrued interest payable 142 142 142 - -

~~The following methods~~

					Fair Value Measurements at
					December 31, 2021
	Carrying Amount		Fair Value Estimate		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Financial Assets
Investment in interest-earning time deposits	$	7,924	$	8,091	$	-	$	-	$	8,091
Loans held for sale		107,823		112,843		-		112,843		-
Loans receivable, net		403,966		409,203		-		-		409,203

Financial Liabilities
Deposits		447,166		446,576		267,255		-		179,321
FHLB long-term borrowings		23,193		23,231		-		-		23,231
FRB long-term borrowings		3,895		3,895		-		-		3,895
Subordinated debt		7,933		8,312		-		-		8,312

For cash and ~~assumptions were used to measure~~cash equivalents, accrued interest receivable, investment in FHLB stock, bank-owned life insurance, FHLB short-term borrowings, accrued interest payable, and advances from borrowers for taxes and insurance, the carrying value is a reasonable estimate of the fair value and are considered Level 1 measurements.

Note 12– Operating Segments

The Company's operations currently consist of ~~financial instruments recorded at cost~~two reportable operating segments: Banking and Oakmont Capital Holdings, LLC. The Company offers different products and services through its two segments. The accounting policies of the segments are generally the same as those of the consolidated company.

The Banking Segment generates its revenues primarily from its lending, deposit gathering and fee business activities. The profitability of this segment's operations depends primarily on its net interest income after provision for credit losses, which is the ~~Company's consolidated balance sheets:~~

~~Cash~~difference between interest earned on interest earning assets and ~~Cash Equivalents.~~ interest paid on interest bearing liabilities less provision for credit losses. The ~~carrying amounts reported~~provision for credit losses is almost entirely dependent on changes in the ~~consolidated balance sheets for cash~~Banking Segment's loan portfolio and ~~short-term instruments approximate those assets' fair values.~~

~~Interest-Earning Time Deposits.~~ ~~Fair values for interest-earning time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered in~~management’s assessment of the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. The Company generally purchases amounts below the insured limit, limiting the amount of credit risk on these time deposits.

~~Loans Held for Sale. Fair values of loans held for sale are based on commitments on hand from investors at prevailing market rates.~~

~~Loans Receivable, Net.~~ The fair values of loans are estimated using discounted cash flow methodology. The discount rates take into account interest rates currently being offered to customers for loans with similar terms, the credit risk associated with the loan and market factors, including liquidity. The valuationcollectability of the loan portfolio ~~reflects discounts that~~as well as prevailing economic and market conditions. The profitability of this segment’s operations also depends on the ~~Company believes~~generation of non-interest income which includes fees and commissions generated by Quaint Oak Bank and its wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC, Quaint Oak Abstract, LLC, Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, which are ~~consistent with transactions occurring~~included in the ~~market place~~Banking Segment for ~~both performing~~segment reporting purposes. The Banking Segment is also subject to an extensive system of laws and ~~distressed loan types. The carrying value~~regulations that ~~fair value is compared to is net~~are intended primarily for the protection of depositors and other customers, federal deposit insurance funds and the banking system as a whole. These laws and regulations govern such areas as capital, permissible activities, allowance for loan and lease losses, loans and ~~other associated premiums~~investments, and ~~discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified with Level 3~~rates of interest that can be charged on loans. For segment reporting purposes, Quaint Oak Bancorp, Inc. is included as part of the ~~fair value hierarchy.~~

~~Accrued Interest Receivable.~~ Company’s Banking segment.

The ~~carrying amount~~Oakmont Capital Holdings, LLC Segment originates equipment loans which are generally sold to third party institutions with the loans’ servicing rights retained. The profitability of ~~accrued interest receivable approximates its fair value.~~

this segment’s operations depends primarily on the gains realized from the sale of loans, processing fees, and service fees. The Oakmont Capital Holdings, LLC Segment is also subject to an extensive system of laws and regulations that are intended primarily for the protection of commercial customers.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 12– Operating Segments (Continued)

The following table presents summary financial information for the reportable segments (in thousands):

	As of or for the Three Months Ended September 30,
	2022							2021
	Quaint Oak Bank(1)		Oakmont Capital Holdings, LLC			Consolidated		Quaint Oak Bank(1)		Oakmont Capital Holdings, LLC			Consolidated
Net Interest Income (Loss)	$	6,766	$	(109	)	$	6,657	$	5,022	$	(8	)	$	5,014
Provision for Loan Losses		655		-			655		557		-			557
Net Interest Income (Loss) after Provision for Loan Losses		6,111		(109	)		6,002		4,465		(8	)		4,457

Non-Interest Income
Mortgage banking, equipment lending and title abstract fees		173		587			760		332		272			604
Real estate sales commissions, net		88		-			88		79		-			79
Insurance commissions		152		-			152		133		-			133
Other fees and services charges		57		74			131		36		2			38
Net loan servicing income		6		474			480		62		413			475
Income from bank-owned life insurance		23		-			23		21		-			21
Net gain on loans held for sale		891		3,390			4,281		843		1,023			1,866
Gain on the sale of SBA loans		58		-			58		369		-			369
Total Non-Interest Income		1,448		4,525			5,973		1,875		1,710			3,585

Non-Interest Expense
Salaries and employee benefits		3,547		1,788			5,335		2,867		1,233			4,100
Directors’ fees and expenses		67		-			67		58		-			58
Occupancy and equipment		323		154			477		295		84			379
Data processing		140		-			140		234		-			234
Professional fees		240		17			257		67		40			107
FDIC deposit insurance assessment		225		-			225		97		-			97
Other real estate owned expenses		-		-			-		2		-			2
Advertising		95		74			169		75		35			110
Amortization of other intangible		12		-			12		12		-			12
Other		314		322			636		288		38			326
Total Non-Interest Expense		4,963		2,355			7,318		3,995		1,430			5,425
Pretax Segment Profit	$	2,596	$	2,061		$	4,657	$	2,345	$	272		$	2,617
Segment Assets	$	683,882	$	23,378		$	707,260	$	520,005	$	15,861		$	535,866

_______________________

(1)

Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Real Estate, Quaint Oak Abstract, Quaint Oak Insurance Agency, QOB Properties, and Oakmont Commercial.

Quaint Oak Bancorp, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 12– Operating Segments (Continued)

	As of or for the Nine Months Ended September 30,
	2022							2021
	Quaint Oak Bank(1)		Oakmont Capital Holdings, LLC			Consolidated		Quaint Oak Bank(1)		Oakmont Capital Holdings, LLC			Consolidated
Net Interest Income (Loss)	$	18,160	$	(216	)	$	17,944	$	13,476	$	(97	)	$	13,379
Provision for Loan Losses		1,933		-			1,933		1,259		-			1,259
Net Interest Income (Loss) after Provision for Loan Losses		16,227		(216	)		16,011		12,217		(97	)		12,120

Non-Interest Income
Mortgage banking, equipment lending and title abstract fees		600		1,621			2,221		990		667			1,657
Real estate sales commissions, net		213		-			213		143		-			143
Insurance commissions		407		-			407		373		-			373
Other fees and services charges		221		158			379		182		29			211
Net loan servicing income		11		943			954		128		898			1,026
Income from bank-owned life insurance		66		-			66		61		-			61
Net gain on loans held for sale		2,828		8,521			11,349		2,283		2,133			4,416
Gain on sale of investment securities available for sale		-		-			-		362		-			362
Gain on the sale of SBA loans		225		-			225		636		-			636
Total Non-Interest Income		4,571		11,243			15,814		5,158		3,727			8,885

Non-Interest Expense
Salaries and employee benefits		10,213		4,604			14,817		7,942		2,997			10,939
Directors’ fees and expenses		210		-			210		186		-			186
Occupancy and equipment		975		388			1,363		895		248			1,143
Data processing		500		-			500		641		-			641
Professional fees		625		44			669		356		132			488
FDIC deposit insurance assessment		454		-			454		221		-			221
Other real estate owned expenses		-		-			-		14		-			14
Advertising		265		266			531		224		113			337
Amortization of other intangible		36		-			36		36		-			36
Other		990		519			1,509		858		116			974
Total Non-Interest Expense		14,268		5,821			20,089		11,373		3,606			14,979
Pretax Segment Profit	$	6,530	$	5,206		$	11,736	$	6,002	$	24		$	6,026
Segment Assets	$	683,882	$	23,378		$	707,260	$	520,005	$	15,861		$	535,866

____________________

(2)

Includes Quaint Oak Bancorp, Inc. and the Bank’s subsidiaries, Quaint Oak Mortgage, Quaint Oak Real Estate, Quaint Oak Abstract, Quaint Oak Insurance Agency, QOB Properties, and Oakmont Commercial.

~~Note 11 – Fair Value Measurements and Fair Values of Financial Instruments (Continued)~~

~~Investment in Federal Home Loan Bank Stock.~~ ~~The carrying amount of restricted investment in Federal Home Loan Bank stock approximates fair value, and considers the limited marketability of such securities.~~

~~Bank-Owned Life Insurance.~~ ~~The carrying amount of the investment in bank-owned life insurance approximates its cash surrender value under the insurance policies.~~

~~Deposits.~~ The carrying amount is considered a reasonable estimate of fair value for demand savings deposit accounts. The fair value of fixed maturity certificates of deposit is estimated by a discounted cash flow method using the rates currently offered for deposits of similar maturities.

~~Federal Home Loan Bank Borrowings.~~ ~~Fair values of FHLB borrowings are estimated based on rates currently available to the Company for similar terms and remaining maturities.~~

~~Accrued Interest Payable.~~ ~~The carrying amount of accrued interest payable approximates its fair value.~~

~~Off-Balance Sheet Financial Instruments.~~ Off-balance sheet financial instruments consist of commitments to extend credit. Fair values for commitments to extend credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreement and the present credit standing of the counterparties. The estimated fair value of the commitments to extend credit are insignificant and therefore are not presented in the above table.33

ITEM 2. ~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements Are Subject to Change

~~We make~~

This Quarterly Report contains certain forward-looking statements ~~in this document as to what we expect may happen~~(as defined in the ~~future. These~~Securities Exchange Act of 1934 and the regulations thereunder). Forward-looking statements ~~usually contain~~are not historical facts but instead represent only the beliefs, expectations or opinions of the Company and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words "~~believe," "estimate," "project," "expect," "anticipate," "intend~~"as: “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, or words of similar ~~expressions. Because these~~meaning, or future or conditional terms such as “will”, “would”, “should”, “could”, “may”, “likely”, “probably”, or “possibly.” Forward-looking statements ~~look~~include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks, uncertainties and assumptions, many of which are difficult to predict and generally are beyond the ~~future, they are based on our current expectations~~control of and ~~beliefs. Actual~~its management, that could cause actual results ~~or events may~~to differ materially from those ~~reflected~~expressed in, or implied or projected by, forward-looking statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking ~~statements. You should~~statements: (1) economic and competitive conditions which could affect the volume of loan originations, deposit flows and real estate values; (2) the levels of non-interest income and expense and the amount of loan losses; (3) competitive pressure among depository institutions increasing significantly; (4) changes in the interest rate environment causing reduced interest margins; (5) general economic conditions, either nationally or in the markets in which the Company is or will be ~~aware~~doing business, being less favorable than expected;(6) political and social unrest, including acts of war or terrorism; (7) the impact of the current outbreak of the novel coronavirus (COVID-19) or (8) legislation or changes in regulatory requirements adversely affecting the business in which the Company is or will be engaged. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that ~~our current expectations and beliefs as to future events are subject to change at any time, and we can give you no assurances that~~occur after the ~~future events will actually occur.~~

date on which such statements were made.

General

The Company was formed in connection with the ~~Bank's~~Bank’s conversion to a stock savings bank completed on July 3, 2007. The ~~Company's~~Company’s results of operations are dependent primarily on the results of the Bank, which is a wholly owned subsidiary of the ~~Company.~~Company, along with the Bank’s wholly owned subsidiaries. The ~~Bank's~~Bank’s results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on its loan and investment portfolios and the cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by provisions for loan losses, fee income and other non-interest income and non-interest expense. Non-interest expense principally consists of compensation, ~~directors'~~directors’ fees and expenses, office occupancy and equipment expense, data processing expense, professional fees, advertising expense, FDIC deposit insurance assessment, and other expenses. Our results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact our financial condition and results of operations.

At September 30, ~~2017~~2022, the Bank ~~had five~~has six wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, Quaint Oak Insurance Agency, LLC, and ~~QOB Properties,~~Oakmont Commercial, LLC, each a Pennsylvania limited liability company. The mortgage company offers mortgage banking primarily in the Lehigh Valley, Delaware Valley and Philadelphia County regions of Pennsylvania. The real estate and abstract companies offer ~~mortgage banking,~~ real estate sales and title abstract services, respectively, ~~and~~primarily in the Lehigh Valley region of Pennsylvania. These companies began operation in July 2009. In February, 2019, Quaint Oak Mortgage opened a mortgage banking office in Philadelphia, Pennsylvania. QOB Properties, LLC began operations in July 2012 and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. ~~On August 1, 2016,~~ Quaint Oak Insurance Agency, LLC began operations ~~by acquiring the renewal rights to the book of business produced~~in August 2016 and ~~serviced by Signature Insurance Services, LLC, an independent insurance agency located in New Britain, Pennsylvania, that~~ provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021 and operates as a multi-state specialty commercial real estate financing company. As of January 4, 2021, the Bank holds a majority equity position in Oakmont Capital Holdings, LLC, a multi-state equipment finance company based in West Chester, Pennsylvania with a second significant facility located in Albany, Minnesota. All significant intercompany balances and transactions have been eliminated.

COVID-19

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The effects of COVID-19 did not have a material impact on the financial results of the Company as of September 30, 2022. Due to orders issued by the governor of Pennsylvania and for the health of our customers and employees, the Bank closed lobbies to all three branch offices but remained fully operational. Other immediate responses to the pandemic included some of the following actions by the Company:

• Moved more than 92% of its employees to remote work-from-home status.

• Waived fees on deposit accounts and cash management services.

In response to the COVID-19 crisis, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was passed by Congress and signed into law on March 27, 2020. The CARES Act provides an estimated $2.2 trillion of economy-wide financial stimulus to combat the pandemic and stimulate the economy in the form of financial aid to individuals, businesses, nonprofits, states, and municipalities through loans, grants, tax changes, and other types of relief.

The following describes some of our responses to COVID-19 relative to the CARES Act, and other effects of the pandemic on our business.

Paycheck Protection Program. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, we were automatically authorized to originate PPP loans and chose to participate. Since March 2020, the Company has continued to work diligently to help support its existing and new customers through the SBA Paycheck Protection Program (“PPP”), loan modifications, loan deferrals and fee waivers. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) became law. The Economic Aid Act opened a new PPP loan period for first loans and implemented a second loan draw for certain PPP borrowers, each through May 31, 2021. Under the first round, the Company funded 854 PPP loans totaling $95.1 million. As of September 30, 2022, 853 of these first round PPP loans totaling $95.1 million were forgiven under the SBA forgiveness program. Under the second round of PPP the Company funded 985 PPP loans totaling $88.4 million. As of September 30, 2022, 922 of the second round PPP loans totaling $85.4 million have been forgiven under the SBA forgiveness program. The Company recognized approximately $1.1 million and $4.4 million of deferred loan fees amortization related to PPP loans for the nine months ended September 30, 2022 and the year ended December 31, 2021, respectively.

Paycheck Protection Program Liquidity Facility. The CARES Act also allocated a limited amount of funds to the Federal Reserve Board (FRB) with a broad mandate to provide liquidity to eligible businesses, states or municipalities in light of COVID-19. On April 9, 2020, the U.S. Department of the Treasury announced several new or expanded lending programs to provide relief for businesses and governments. One of these programs was the Paycheck Protection Program Liquidity Facility (PPPLF). Under the PPPLF, all depository institutions that originate PPP loans are eligible to borrow on a non-recourse basis from their regional Federal Reserve Bank using SBA PPP loans as collateral. The principal amount of loans will be equal to the PPP loans pledged as collateral. There are no fees associated with these loans and the interest rate is 35 basis points. The maturity date of PPPLF loans will be the same as the maturity date of the PPP loans pledged as collateral. The PPPLF loan maturity date will be accelerated if the underlying PPP loan goes into default and the lender sells the PPP loan to the SBA under the SBA guarantee. The PPPLF loan maturity date also will be accelerated for any loan forgiveness reimbursement received by the lender from the SBA.

In April 2020, the Bank received approval to borrow from the FRB under the PPPLF program to assist in funding PPP loans. Through September 30, 2022, the Bank used the FRB program to fund $52.1 million of PPP loans. The Bank paid all PPP loans pledged as collateral under the PPPLF program and had no outstanding advances with the FRB at September 30, 2022. Through September 30, 2022 the Bank has not used the PPPLF program to fund any round two PPP loans.

Loan Modifications/Troubled Debt Restructurings. Under the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a troubled debt restructuring (“TDR”), and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Financial institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either January 1, 2022 or the 60th day after the end of the COVID-19 national emergency. Quaint Oak Bank has made that election. Similarly, the Financial Accounting Standards Board has confirmed that short-term modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief will not be considered TDRs.

Prior to the enactment of the CARES Act, the banking regulatory agencies provided guidance as to how certain short-term modifications would not be considered TDRs, and have subsequently confirmed that such guidance could be applicable for loans that do not qualify for favorable accounting treatment under Section 4013 of the CARES Act.

The Bank addresses loan payment modification requests on a case-by-case basis considering the effects of the COVID-19 pandemic, related economic slow-down and stay-at-home orders on our customer and their current and projected cash flows through the term of the loan. Through September 30, 2022, the Bank modified 231 loans with principal balances totaling $90.6 million representing approximately 15.6% of our September 30, 2022 loan balances. A majority of deferrals are two-month payment deferrals of principal and interest, with payments after deferral increased to collect amounts deferred. In some cases, certain loans were granted additional deferrals. As of September 30, 2022 there are no loans that are still on deferral.

Critical Accounting Policies

The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. Accordingly, the consolidated financial statements require certain estimates, judgments, and assumptions, which are believed to be reasonable, based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the periods presented. ~~The following~~Critical accounting policies comprise those that management believes are the most critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the period or in future periods.

~~Allowance for Loan Losses.~~ ~~The allowance for loan losses represents management's estimate of losses inherent in the loan portfolio as of the balance sheet date~~

Our critical accounting policies involving significant judgments and is recorded as a reduction to loans receivable. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual termspreparation of the ~~loan agreement. Factors considered by management~~unaudited consolidated financial statements as of September 30, 2022 have remained unchanged from the disclosures presented in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfallsour Annual Report on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company's impaired loans are measured based on the estimated fair value of the loan's collateral.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower's overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for all loans (except one-to-four family residential owner-occupied loans) where the ~~total amount outstanding to any borrower or group of borrowers exceeds $500,000,~~ or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans criticized special mention have potential weaknesses that deserve management's close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management's comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

~~Income Taxes~~. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various assets and liabilities and net operating loss carryforwards and gives current recognition to changes in tax rates and laws. The realization of our deferred tax assets principally depends upon our achieving projected future taxable income. We may change our judgments regarding future profitability due to future market conditions and other factors. We may adjust our deferred tax asset balances if our judgments change.

Form 10-K.

Comparison of Financial Condition at September30, ~~2017~~2022 and December 31, ~~2016~~

2021

General. The ~~Company's~~Company’s total assets at September 30, ~~2017~~2022 were ~~$232.2~~$707.3 million, an increase of ~~$16.0~~$153.1 million, or ~~7.4%~~27.6%, from ~~$216.2~~$554.1 million at December 31, ~~2016.~~2021. This growth in total assets was primarily due to a ~~$17.0~~$175.2 million, or ~~9.6%~~43.4%, increase in loans receivable, ~~net, and~~net. This increase was partially offset by a ~~$1.8~~$19.4 million, or ~~37.4%~~18.0%, ~~increase~~decrease in loans held for sale. ~~These~~The largest increases ~~were partially offset by a $1.2~~within the loan portfolio occurred in commercial real estate loans which increased $129.3 million, or ~~20.0%~~70.4%, ~~decrease in investment in interest-earning time deposits, a $1.1~~multi-family residential loans which increased $19.1 million, or ~~11.7%~~65.2%, ~~decrease in investment securities available for sale, and a $1.1~~construction loans which increased $10.0 million, or ~~11.5%~~63.1%, ~~decrease~~commercial business loans which increased $8.5 million, or 6.6%, and one-to-four family owner occupied loans which increased $7.6 million, or 78.2%, The increase in ~~cash and cash equivalents.~~

commercial real estate loans was primarily due to the purchase of a $55.5 million loan portfolio by the Bank’s wholly-owned subsidiary, Oakmont Commercial, LLC in April, 2022.

Cash and Cash Equivalents. Cash and cash equivalents decreased ~~$1.1~~$2.4 million, or ~~11.5%~~22.1%, from ~~$9.3~~$10.7 million at December 31, ~~2016~~2021 to ~~$8.2~~$8.3 million at September 30, ~~2017~~2022, as excess liquidity was used primarily ~~used~~ to fund loans.

Investment in Interest-Earning Time ~~Deposits~~. Deposits. Investment in interest-earning time deposits decreased ~~$1.2~~$2.4 million, or ~~20.0%~~29.7%, from ~~$6.1~~$7.9 million at December 31, ~~2016~~2021 to ~~$4.9~~$5.6 million at September 30, ~~2017 primarily due to~~2022 as 14 interest-earning time deposits matured and were not renewed and six interest-earning time deposits were purchased during the ~~maturity and redemption of time deposits. The proceeds were used primarily to fund loans.~~

nine months ended September 30, 2022.

Investment Securities Available for Sale. Investment securities available for sale decreased ~~$1.1 million,~~$840,000, or ~~11.7%~~20.8%, from ~~$9.6~~$4.0 million at December 31, ~~2016~~2021 to ~~$8.4~~$3.2 million at September 30, ~~2017~~2022, due primarily to the principal repayments on these securities during the nine months ended September 30, ~~2017.~~

2022.

Loans Held for Sale. Loans held for sale ~~increased $1.8~~decreased $19.4 million, or ~~37.4%~~18.0%, from ~~$4.7~~$107.8 million at December 31, ~~2016~~2021 to ~~$6.5~~$88.4 million at September 30, ~~2017~~2022 as the ~~Bank's~~Bank originated $277.6 million in equipment loans held for sale and sold $274.4 million of equipment loans during the nine months ended September 30, 2022. Also contributing to the decrease in loans held for sale is $11.2 million of loan amortization and prepayments. Additionally, the Bank’s mortgage banking subsidiary, Quaint Oak Mortgage, LLC, originated ~~$62.1~~$100.0 million of one-to-four family residential loans during the nine months ended September 30, ~~2017~~2022 and sold ~~$60.3~~$111.4 million of loans in the secondary market during this same period.

Loans Receivable, Net. Loans receivable, net, increased ~~$17.0~~$175.2 million, or ~~9.6%~~43.4%, to ~~$193.8~~$579.2 million at September 30, ~~2017~~2022 from ~~$176.8~~$404.0 million December 31, ~~2016.~~2021. This increase was funded primarily from ~~Federal Home Loan Bank borrowings and~~ deposits. Increases within the portfolio occurred in commercial real estate ~~loans~~ which increased ~~$9.1~~$129.3 million, or ~~11.7%~~70.4%, multi-family residential loans which increased ~~$5.7~~$19.1 million, or ~~38.8%~~65.2%, construction loans which increased $10.0 million, or 63.1%, commercial business loans which increased ~~$2.3~~$8.5 million, or ~~24.5%~~6.6%, ~~one-to-four~~and one -to-four family ~~residential non-owner occupied loans which increased $608,000, or 1.2%, one-to-four family residential~~ owner occupied loans which increased ~~$45,000,~~$7.6 million, or ~~0.8%, construction~~78.2%. However, by excluding PPP loans ~~which increases $32,000,~~from commercial business loans, the balance of commercial business loans increased $46.3 million, or ~~0.2%, and other consumer~~52.1%. The increase in commercial real estate loans ~~which increased $17,000, or 65.4%. These increases were partially offset~~was primarily due to the purchase of a $55.5 million loan portfolio by ~~a $574,000, or 12.0%, decrease~~the Bank's wholly-owned subsidiary, Oakmont Commercial, LLC in ~~home equity loans.~~April, 2022. The Company continues its strategy of diversifying its loan portfolio with higher yielding and shorter-term loan products and selling substantially all of its newly originated one-to-four family owner-occupied loans into the secondary market.

~~Other Real Estate Owned, Net.~~ ~~Other real estate owned, net amounted to $185,000 at September 30, 2017, consisting of one property. This compares to three properties totaling $435,000 at December 31, 2016.~~ For the nine months ended September 30, 2017, $23,000 of capital improvements were made to the properties, one of the properties incurred a write-down totaling $48,000, and two properties with a carrying value of $225,000 were sold. Following the end of the quarter, the Company sold the remaining property and a loss of $6,000 was realized on the transaction. Non-performing assets amounted to $3.7 million, or 1.60%, of total assets at September 30, 2017 compared to $2.3 million, or 1.07%, of total assets at December 31, 2016.

~~Deposits~~.

Deposits. Total deposits increased ~~$5.4~~$99.9 million, or ~~3.0%~~22.4%, to ~~$182.4~~$547.1 million at September 30, ~~2017~~2022 from ~~$177.0~~$447.2 million at December 31, ~~2016.~~2021. This increase in deposits was primarily attributable to increases of ~~$5.3~~$88.7 million, or ~~3.9%~~44.2%, in ~~certificates of deposit~~money market accounts, and ~~$1.9~~$15.1 million, or ~~31.8%~~23.3%, in non-interest bearing checking ~~accounts,~~accounts. The increase in deposits was partially offset by a ~~$963,000,~~$3.7 million, or ~~3.1%~~2.0%, decrease in certificates of deposit, a $166,000, or 9.0%, decrease in savings accounts and a $6,000, or 60.0%, decrease in passbook accounts. The increase in money market accounts was primarily due to a ~~$655,000, or 55.1%, decrease~~$150.0 million deposit in ~~passbook accounts, and~~May, 2022 through a ~~$200,000, or 11.2%, decrease in savings accounts.~~

~~Federal Home Loan bank~~ deposit placement agreement with a third party bank.

Borrowings. Total Federal Home Loan Bank (FHLB) borrowings increased ~~$10.0~~$43.8 million, or ~~64.5%~~89.1%, to $93.0 million at September 30, 2022 from ~~$15.5~~$49.2 million at December 31, ~~2016 to $25.5 million at September 30, 2017.~~2021. During the nine months ended September 30, ~~2017,~~2022, the Company borrowed ~~$4.5~~$115.3 million of FHLB short-term borrowings and ~~$8.0~~$80.0 million of FHLB long-term ~~fixed rate~~ borrowings ~~primarily~~and paid down $131.3 million of FHLB short-term borrowings and $20.2 million of FHLB long-term borrowings. Federal Reserve Bank (FRB) long-term borrowings decreased $3.9 million, or 100.0%, to none at September 30, 2022 from $3.9 million at December 31, 2021 as the Company paid off first round PPP loans pledged as collateral under the FRB’s Paycheck Protection Program Liquidity Facility (PPPLF). The Company did not utilize the FRB’s PPPLF to fund ~~loan growth. During the same time period, the Company repaid $2.5 million of long-term fixed rate borrowings.~~

~~Stockholders' Equity. Total stockholders' equity~~second round PPP loans.

Accrued Expenses and Other Liabilities. Accrued expenses and other liabilities increased ~~$1.2~~$3.5 million, or ~~5.9%~~59.2%, to ~~$22.0~~$9.5 million at September 30, ~~2017~~2022 from ~~$20.8~~$6.0 million at December 31, ~~2016.~~2021, due primarily to an increase in tax and other expense accruals.

Stockholders’ Equity. Total stockholders’ equity increased $8.7 million, or 23.6%, to $45.6 million at September 30, 2022 from $36.9 million at December 31, 2021. Contributing to the increase was net income for the nine months ended September 30, ~~2017~~2022 of ~~$1.3~~$6.7 million, net income attributable to noncontrolling interest of $2.6 million, common stock earned by participants in the employee stock ownership plan of ~~$138,000,~~$259,000, amortization of stock awards and options under our stock compensation plans of ~~$97,000,~~$126,000, the reissuance of treasury stock under the Bank’s 401(k) Plan of $48,000 and the reissuance of treasury stock for exercised stock options of ~~$193,000, the reissuance of treasury stock under the Bank's 401(k) Plan of $83,000, and other comprehensive income of $37,000.~~$181,000. These increases were partially offset by dividends paid of $751,000, noncontrolling interest distribution of $279,000, the purchase of treasury stock of ~~$341,000~~$46,000, and ~~by dividends paid~~other comprehensive loss, net of ~~$269,000.~~$42,000.

Comparison of Operating Results for the Three Months Ended September 30, ~~2017~~2022 and ~~2016~~

2021

General. Net income amounted to ~~$595,000~~$2.6 million for the three months ended September 30, ~~2017,~~2022, an increase of ~~$193,000,~~$853,000, or ~~48.0%~~47.9%, compared to net income of ~~$402,000~~$1.8 million for the three months ended September 30, ~~2016.~~2021. The increase in net income on a comparative quarterly basis was primarily the result of ~~increases~~an increase in non-interest income of ~~$363,000~~$2.4 million, and an increase in net interest income of ~~$251,000,~~$1.6 million, partially offset by ~~increases~~an increase in non-interest expense of ~~$291,000,~~$1.9 million, an increase in the provision for loan losses of $98,000, and an increase in the provision for income taxes of ~~$108,000, and the provision for loan losses of $22,000.~~

$310,000.

Net Interest Income. Net interest income increased ~~$251,000,~~$1.6 million, or ~~15.3%,~~32.8% to ~~$1.9~~$6.7 million for the three months ended September 30, ~~2017~~2022 from ~~$1.6~~$5.0 million for the three months ended September 30, ~~2016.~~2021. The increase was driven by a ~~$364,000,~~$3.0 million, or ~~15.8%~~49.5%, increase in interest income. This increase in net interest income was partially offset by a ~~$113,000,~~$1.3 million, or ~~16.8%~~133.2%, increase in interest expense.

Interest Income. ~~Interest income increased $364,000,~~ The $3.0 million, or ~~15.8%~~49.5%, ~~to $2.7 million for the three months ended September 30, 2017 from $2.3 million for the three months ended September 30, 2016. The~~ increase in interest income was primarily due to a ~~$37.0~~$178.0 million increase in average loans receivable, net, including loans held for sale, which increased from an average balance of ~~$161.8~~$488.5 million for the three months ended September 30, ~~2016~~2021 to an average balance of ~~$198.8~~$666.5 million for the three months ended September 30, ~~2017,~~2022, and had the effect of increasing interest income ~~$505,000. Partially offsetting this~~$2.2 million. Also contributing to the increase in interest income was a 2833 basis point ~~decline~~increase in the ~~average~~ yield on average loans receivable, net, including loans held for sale, which increased from ~~5.47%~~4.87% for the three months ended September 30, ~~2016~~2021 to ~~5.19%~~5.20% for the three months ended September 30, ~~2017, which~~2022, and had the effect of ~~decreasing~~increasing interest income ~~by $142,000.~~

$561,000.

Interest Expense. ~~Interest~~ The $1.3 million, or 133.2%, increase in interest expense ~~increased $113,000, or 16.8%, to $785,000~~ for the three months ended September 30, ~~2017~~2022 over the comparable period in 2021 was primarily attributable to a 95 basis point increase in the rate on average money market accounts, which increased from ~~$672,000~~0.55% for the three months ended September 30, ~~2016. The increase in interest expense was primarily attributable~~2021 to ~~a $19.3 million increase in average interest-bearing liabilities, which increased from an average balance of $180.4 million~~1.50% for the three months ended September 30, 2016 to an average balance of $199.7 million for the three months ended September 30, 2017, and had the effect of increasing interest expense $61,000. This increase in average interest-bearing liabilities was primarily attributable to a $5.8 million increase in average certificate of deposit accounts which increased from an average balance of $134.1 million for the three months ended September 30, 2016 to an average balance of $139.9 million for the three months ended September 30, 2017, and had the effect of increasing interest expense $25,000, and a $12.2 million increase in average Federal Home Loan Bank borrowings which increased from $13.3 million for the three months ended September 30, 2016 to an average balance of $25.5 million for the three months ended September 30, 2016, and had the effect of increasing interest expense $32,000. Also contributing to this increase was an eight basis point increase in the average rate on interest-bearing liabilities, from 1.49% for the three months ended September 30, 2016 to 1.57% for the three months ended September 30, 2017, which had the effect of increasing interest expense by $52,000. This increase in rate was primarily attributable to a five basis point increase in rate on average certificate of deposit accounts, which increased from 1.72% for the three months ended September 30, 2016 to 1.77% for the three months ended September 30, 2017,2022, and had the effect of increasing interest expense by ~~$18,000, and a 55 basis point~~$736,000. Also contributing to the increase in ~~rate on~~money market interest expense was a $117.2 million increase in average ~~Federal Home Loan Bank borrowings,~~money market accounts which increased from ~~1.02%~~$192.5 million for the three months ended September 30, ~~2016~~2021 to ~~1.57%~~an average balance of $309.7 million for the three months ended September 30, ~~2017, which~~2022, and had the effect of increasing interest expense by ~~$33,000.~~$160,000. Both the increase in money market average balance and rate was impacted by a $150.0 million deposit in May, 2022 through a deposit placement agreement with a third party bank. Also contributing to the increase in interest expense was a $64.1 million increase in average FHLB long-term borrowings which increased from an average balance of $24.2 million for the three months ended September 30, 2021 to an average balance of $88.3 million for the three months ended September 30, 2022, and had the effect of increasing interest expense by $329,000. The average interest rate spread decreased from 3.62% for the three months ended September 30, 2021 to 3.50% for the three months ended September 30, 2022 while the net interest margin decreased from 3.82% for the three months ended September 30, 2021 to 3.75% for the three months ended September 30, 2022.

Average Balances, Net Interest Income, Yields Earned and Rates Paid. The following table shows for the periods indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. All average balances are based on daily balances.

Three Months Ended September 30,
2017 2016

Average
Balance
Interest
Average
Yield/
Rate

Average
Balance
Interest
Average
Yield/
Rate

Interest-earning assets: (Dollars in thousands)
  Due from banks, interest-bearing $ 8,247 $ 30 1.46 % $ 18,833 $ 26 0.55 %
  Investment in interest-earning time deposits 5,370 21 1.56 6,120 32 2.09
  Investment securities available for sale 8,774 36 1.64 8,547 30 1.40
  Loans receivable, net (1) (2) (3) 198,780 2,577 5.19 161,840 2,214 5.47
  Investment in FHLB stock 1,134 9 3.17 633 7 4.42
     Total interest-earning assets 222,305 2,673 4.81 % 195,973 2,309 4.71 %
Non-interest-earning assets 9,159 9,425
     Total assets $ 231,464 $ 205,398
Interest-bearing liabilities:
   Passbook accounts $ 671 $ * * % $ 1,182 $ * * %
   Savings accounts 1,550 1 0.26 2,173 1 0.18
   Money market accounts 32,070 65 0.81 29,614 60 0.81
   Certificate of deposit accounts 139,918 619 1.77 134,099 577 1.72
      Total deposits 174,209 685 1.57 167,068 638 1.53
FHLB short-term borrowings 9,875 32 1.30 6,000 8 0.53
FHLB long-term borrowings 15,625 68 1.74 7,294 26 1.43
     Total interest-bearing liabilities 199,709 785 1.57 % 180,362 672 1.49 %
Non-interest-bearing liabilities 9,787 5,038
     Total liabilities 209,496 185,400
Stockholders' Equity 21,968 19,998
     Total liabilities and Stockholders' Equity $ 231,464 $ 205,398
Net interest-earning assets $ 22,596 $ 15,661
Net interest income; average interest rate spread $ 1,888 3.24 % $ 1,637 3.22 %
Net interest margin (4) 3.40 % 3.34 %
Average interest-earning assets to average interest-bearing liabilities 111.31 % 108.66 %

*	~~Not meaningful.~~

~~(1)~~

~~Includes loans held for sale.~~

~~(2)~~

~~Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.~~

~~(3)~~

Includes tax free municipal leases with an aggregate average balance of $64,000 and an average yield of 3.98% for the three months ended September 30, 2017 and an aggregate average balance of $111,000 and an average yield of 4.02% for the three months ended September 30, 2016. The tax-exempt income from such loans has not been calculated on a tax equivalent basis.

~~(4)~~

~~Equals net interest income divided by average interest-earning assets.~~

	Three Months Ended September 30,
	2022							2021
	Average Balance		Interest		Average Yield/ Rate			Average Balance		Interest		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Due from banks, interest-bearing	$	29,437	$	196		2.66	%	$	23,162	$	5		0.09	%
Investment in interest-earning time deposits		7,202		46		2.55			7,917		46		2.32
Investment securities available for sale		3,357		19		2.26			4,487		7		0.62
Loans receivable, net (1) (2)		666,501		8,671		5.20			488,518		5,944		4.87
Investment in FHLB stock		4,348		64		5.89			1,648		15		3.64
Total interest-earning assets		710,845		8,996		5.06	%		525,732		6,017		4.58	%
Non-interest-earning assets		21,988							15,013
Total assets	$	732,833						$	540,745

Interest-bearing liabilities:
Passbook accounts	$	3	$	-	*	%	$	14	$	-	*	%
Savings accounts		1,611		1	0.25			1,766		1	0.23
Money market accounts		309,742		1,159	1.50			192,515		263	0.55
Certificate of deposit accounts		183,740		512	1.11			168,204		438	1.04
Total deposits		495,096		1,672	1.35			362,499		702	0.77
FHLB short-term borrowings		9,065		58	2.56			13,163		8	0.24
FHLB long-term borrowings		88,269		457	2.07			24,193		124	2.05
FRB long-term borrowings		130		-	0.00			8,976		8	0.36
Subordinated debt		7,953		130	6.54			7,919		130	6.57
Other short-term borrowings		458		22	19.21			1,071		31	11.58
Total interest-bearing liabilities		600,971		2,339	1.56	%		417,821		1,003	0.96	%

Non-interest-bearing liabilities		92,048						94,725
Total liabilities		693,019						512,546
Stockholders’ Equity		39,814						28,199
Total liabilities and Stockholders’ Equity	$	732,833					$	540,745
Net interest-earning assets	$	109,874					$	107,911
Net interest income; average interest rate spread			$	6,657	3.50	%			$	5,014	3.62	%
Net interest margin (3)					3.75	%					3.82	%
Average interest-earning assets to average interest-bearing liabilities					118.28	%					125.83	%

________________________

* Not meaningful.

(1) Includes loans held for sale.

(2) Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.

(3) Equals net interest income divided by average interest-earning assets.

Provision for Loan Losses. The Company’s provision for loan losses increased ~~$22,000,~~$98,000, or ~~36.1%~~17.6%, ~~from $61,000~~to $655,000 for the three months ended September 30, ~~2016 to $83,000~~2022 from $557,000 for the three months ended September 30, ~~2017.~~2021. The increase in the provision for loan losses for the three months ended September 30, 2022 over the three months ended September 30, 2021 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 at September 30, ~~2017.~~2022.

Non-performing loans ~~amounted to $3.5 million, or 1.83%, of net loans receivable~~ at September 30, ~~2017, consisting~~2022 consisted of ~~thirteen~~two loans ~~five of which are~~ on non-accrual status ~~and eight~~in the aggregate amount of which are 90 days or more past due and accruing interest. Comparably, non-performing loans amounted to $1.9 million, or 1.06%, of net loans receivable at December 31, 2016, consisting of fourteen loans, seven of which were on non-accrual status and seven of which were 90 days or more past due and accruing interest.$1.7 million. The non-performing loans at September 30, 2017 include six one-to-four family non-owner occupied residential loans, three commercial real estate loans, two one-to-four family owner occupied residential loans, and two construction loans, and all2022 are generally well-collateralized or adequately reserved for. During the quarter ended September 30, 2017, one new loan was placed on non-accrual status resulting in the reversal of approximately $48,000 of previously accrued interest income and two loans previously on non-accrual status were paid-off. The allowance for loan losses as a percent of total loans receivable, net was ~~0.89%~~1.22% at September 30, ~~2017,~~2022 and ~~0.90%~~1.30% at December 31, ~~2016.~~

Other real estate owned, net amounted to $185,000 at September 30, 2017, consisting of one property. This compares to three properties totaling $435,000 at December 31, 2016. Following the end of the quarter, the Company sold the remaining property and a loss of $6,000 was realized on the transaction.2021. Non-performing assets amounted to ~~$3.7~~$1.7 million, or ~~1.60%,~~0.24% of ~~total~~ assets at September 30, ~~2017~~2022 compared to ~~$2.3 million, or 1.07%, of total assets~~$9,000 at December 31, ~~2016.~~

2021.

Non-Interest Income. Non-interest income increased ~~$363,000,~~$2.4 million, or ~~49.5%~~66.6%, from ~~$733,000 for the three months ended September 30, 2016 to $1.1~~$3.6 million for the three months ended September 30, ~~2017 due primarily~~2021 to a $156,000, or 29.4%, increase in net gain on the sales of residential mortgage loans, a $100,000, or 77.5%, increase in mortgage banking and title abstract fees, a $54,000 decrease in loss on sales and write-downs on other real estate owned, a $30,000, or 50.0%, increase in insurance commissions earned by Quaint Oak Insurance Agency, a wholly owned insurance subsidiary of Quaint Oak Bank which began operations on August 1, 2016, a $25,000, or 125.0%, increase in other fees and services charges, and a $19,000, or 146.2%, increase in other non-interest income, partially offset by a $19,000, or 37.3%, decrease in gain on the sale of SBA loans and a $2,000, or 8.7%, decrease in income from bank-owned life insurance.

~~Non-Interest Expense.~~ ~~Non-interest expense increased $291,000, or 17.6%, from $1.7~~$6.0 million for the three months ended September 30, ~~2016~~2022. The increase was primarily attributable to a $2.4 million, or 129.4%, increase in net gain on loans held for sale, a $156,000, or 25.8%, increase in mortgage banking, equipment lending, and title abstract fees, a $93,000, or 244.7%, increase in other fees and service charges, a $19,000, or 14.3%, increase in insurance commissions, and a $9,000, or 11.4%, increase in real estate sales commissions, net. The increase in net gain on loans held for sale was primarily due to the sale of $97.5 million of equipment loans during the three months ended September 30, 2022. These increases were partially offset by a $311,000, or 84.3%, decrease in gain on sale of SBA loans.

Non-Interest Expense. Total non-interest expense increased $1.9 million, or 34.9%, from $5.4 million for the three months ended September 30, ~~2017. Salaries and employee benefits expense accounted for $192,000 of the change as this expense increased 17.0%, from $1.1~~2021 to $7.3 million for the three months ended September 30, ~~2016~~2022, primarily due to ~~$1.3~~a $1.2 million, or 30.1%, increase in salaries and employee benefits expense, a $310,000, or 95.1%, increase in other expense, a $150,000, or 140.2%, increase in professional fees, a $128,000, or 132.0%, increase in FDIC deposit insurance assessment, a $98,000, or 25.9%, increase in occupancy and equipment expense, a $59,000, or 53.6%, increase in advertising expense, and a $9,000, or 15.5%, increase in Directors’ fees and expenses. The increase in salaries and employee benefits expense is primarily due to expanding and improving the level of staff at the Bank and its subsidiary companies, including Oakmont Capital Holdings, LLC. Oakmont Capital Holdings, LLC’s results for the three months ended September 30, 2022 also contributed to the increases in occupancy and equipment expense, professional fees, advertising expense, and other expense. The increase in non-interest expense was partially offset by a $94,000, or 40.2%, decrease in data processing expense, and a $2,000, or 100.0%, decrease in other real estate owned expenses.

Provision for Income Tax. The provision for income tax increased $310,000, or 44.2%, from $702,000 for the three months ended September 30, 2021 to $1.0 million for the three months ended September 30, 2017 due primarily to increased staff related to the continued expansion of the Company's mortgage banking and lending operations and the launch of Quaint Oak Insurance Agency on August 1, 2016. Also contributing to the increase was a $35,000, or 32.1%, increase in other expense, a $34,000, or 65.4%, increase in data processing expense, a $16,000, or 69.6%, increase in advertising expense, an $11,000, or 11.7%, increase in professional fees, a $9,000, or 25.7%, increase in FDIC insurance assessment, a $4,000, or 8.3%, increase in directors' fees and expenses, and a $5,000, or 62.5%, increase in amortization of other intangible related to the renewal rights of the book of business acquired from Signature Insurance Services, LLC on August 1, 2016. These increases were partially offset by a $9,000, or 69.2%, decease in other real estate owned expense and a $6,000, or 4.2%, decrease in occupancy and equipment expense.

~~Provision for Income Tax.~~ ~~The provision for income tax increased $108,000, or 43.2%, from $250,000 for the three months ended September 30, 2016 to $358,000 for the three months ended September 30, 2017~~2022 due primarily to the increase in pre-tax income. ~~Our effective tax rate decreased from 38.3% for the three months ended September 30, 2016 to 37.6% for the three months ended September 30, 2017.~~

Comparison of Operating Results for the Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~

2021

General. Net income amounted to ~~$1.3~~$6.7 million for the nine months ended September 30, ~~2017,~~2022, an increase of ~~$247,000,~~$2.3 million, or ~~23.7%~~54.0%, compared to net income of $1.0 million for nine months ended September 30, 2016. The increase in net income was primarily the result of increases in net interest income of $731,000 and non-interest income of $539,000, partially offset by increases in non-interest expense of $950,000, the provision for income taxes of $56,000, and the provision for loan losses of $17,000.

~~Net Interest Income.~~ ~~Net interest income increased $731,000, or 15.0%, to $5.6~~$4.3 million for the nine months ended September 30, ~~2017 from $4.9~~2021. The increase in net income on a comparative nine-month basis was primarily the result of an increase in non-interest income of $6.9 million, and an increase in net interest income of $4.6 million, partially offset by an increase in non-interest expense of $5.1 million, an increase in the provision for income taxes of $838,000, and an increase in the provision for loan losses of $674,000.

Net Interest Income. Net interest income increased $4.6 million, or 34.1% to $17.9 million for the nine months ended September 30, ~~2016 due primarily to~~2022 from $13.4 million for the nine months ended September 30, 2021. The increase was driven by a ~~$1.1~~$5.9 million, or ~~15.6%~~35.4%, increase in interest income, partially offset by a ~~$320,000,~~$1.4 million, or ~~17.1%~~40.4%, increase in interest expense.

Interest Income. ~~Interest income increased $1.1~~ The $5.9 million, or ~~15.6%~~35.4%, ~~to $7.8 million for the nine months ended September 30, 2017 from $6.7 million for the nine months ended September 30, 2016. The~~ increase in interest income was primarily due to a ~~$34.1~~$116.5 million increase in average loans receivable, net, including loans held for sale, which increased from an average balance of ~~$155.4~~$478.9 million for the nine months ended September 30, ~~2016~~2021 to an average balance of ~~$189.5~~$595.4 million for the nine months ended September 30, ~~2017,~~2022, and had the effect of increasing interest income ~~$1.4~~$4.0 million. ~~Partially offsetting this~~Also contributing to the increase in interest income was a 2740 basis point ~~decline~~increase in the ~~average~~ yield on average loans receivable, net, including loans held for sale, which increased from ~~5.57%~~4.57% for the nine months ended September 30, ~~2016~~2021 to ~~5.30%~~4.97% for the nine months ended September 30, ~~2017, which~~2022, and had the effect of ~~decreasing~~increasing interest income $1.8 million. Contributing to both the increase in average balance of loans receivable, net and yield was the purchase of a $55.5 million commercial real estate loan portfolio by ~~$391,000.~~

the Bank’s wholly-owned subsidiary, Oakmont Commercial, LLC in April, 2022.

Interest Expense. ~~Interest expense increased $320,000,~~ The $1.4 million, or ~~17.1%~~40.4%, ~~to $2.2 million for the nine months ended September 30, 2017 from $1.9 million for the nine months ended September 30, 2016. The~~ increase in interest expense was primarily attributable to a ~~$21.4 million~~33 basis point increase in the rate on average ~~interest-bearing liabilities,~~money market accounts, which increased from ~~an average balance of $170.9 million~~0.63% for the nine months ended September 30, ~~2016~~2021 to ~~an average balance of $192.3 million~~0.96% for the nine months ended September 30, 2017, and had the effect of increasing interest expense $228,000. This increase in average interest-bearing liabilities was primarily attributable to a $12.4 million increase in average certificate of deposit accounts which increased from an average balance of $125.6 million for the nine months ended September 30, 2016 to an average balance of $138.0 million for the nine months ended September 30, 2017, and had the effect of increasing interest expense $158,000, and a $5.9 million increase in average Federal Home Loan Bank borrowings which increased from $13.4 million for the nine months ended September 30, 2016 to an average balance of $19.4 million for the nine months ended September 30, 2017, and had the effect of increasing interest expense $44,000. Also contributing to this increase was a six basis point increase in the average rate on interest-bearing liabilities, from 1.46% for the nine months ended September 30, 2016 to 1.52% for the nine months ended September 30, 2017, which had the effect of increasing interest expense by $92,000. This increase in rate was primarily attributable to a three basis point increase in rate on average certificate of deposit accounts, which increased from 1.70% for the nine months ended September 30, 2016 to 1.73% for the nine months ended September 30, 2017,2022, and had the effect of increasing interest expense by ~~$30,000, and a 44 basis point~~$633,000. Also contributing to the increase in ~~rate on~~interest expense was an $87.9 million increase in average ~~Federal Home Loan Bank borrowings,~~money market accounts which increased from ~~0.99%~~an average balance of $166.8 million for the nine months ended September 30, ~~2016~~2021 to ~~1.43%~~an average balance of $254.7 million for the nine months ended September 30, ~~2017, which~~2022, and had the effect of increasing interest expense by ~~$62,000.~~$417,000. The increase in money market average balance was impacted by a $150.0 million deposit in May, 2022 through a deposit placement agreement with a third party bank. Also contributing to the increase in interest expense was a $37.5 million increase in average FHLB long-term borrowings which increased from $26.3 million for the nine months ended September 30, 2021 to $63.7 million for the nine months ended September 30, 2022, and had the effect of increasing interest expense by $560,000. This increase in interest expense was partially offset by a 19 basis point decrease in the rate on average certificate of deposit accounts, which decreased from 1.17% for the nine months ended September 30, 2021 to 0.98% for the nine months ended September 30, 2022, and had the effect of decreasing interest expense by $259,000. The average interest rate spread increased from 3.20% for the nine months ended September 30, 2021 to 3.54% for the nine months ended September 30, 2022, while the net interest margin increased from 3.41% for the nine months ended September 30, 2021 to 3.73% for the nine months ended September 30, 2022.

Nine Months Ended September 30,
2017 2016

Average
Balance
Interest
Average
Yield/
Rate

Average
Balance
Interest
Average
Yield/
Rate

Interest-earning assets: (Dollars in thousands)
  Due from banks, interest-bearing $ 8,428 $ 70 1.11 % $ 17,994 $ 70 0.52 %
  Investment in interest-earning time deposits 5,597 67 1.60 6,135 82 1.78
  Investment securities available for sale 9,092 101 1.48 6,080 70 1.54
  Loans receivable, net (1) (2) (3) 189,527 7,530 5.30 155,459 6,497 5.57
  Investment in FHLB stock 883 24 3.62 631 22 4.65
     Total interest-earning assets 213,527 7,792 4.87 % 186,299 6,741 4.82 %
Non-interest-earning assets 9,143 8,995
     Total assets $ 222,670 $ 195,294
Interest-bearing liabilities:
   Passbook accounts $ 768 $ 1 0.17 % $ 1,268 $ 1 0.11 %
   Savings accounts 1,588 2 0.17 2,527 4 0.21
   Money market accounts 32,687 196 0.80 28,099 169 0.80
   Certificate of deposit accounts 137,957 1,788 1.73 125,589 1,600 1.70
      Total deposits 173,000 1,987 1.53 157,483 1,774 1.50
FHLB short-term borrowings 8,350 68 1.09 6,000 24 0.53
FHLB long-term borrowings 10,996 139 1.69 7,434 76 1.36
     Total interest-bearing liabilities 192,346 2,194 1.52 % 170,917 1,874 1.46 %
Non-interest-bearing liabilities 8,820 4,791
     Total liabilities 201,166 175,708
Stockholders' Equity 21,504 19,586
     Total liabilities and Stockholders' Equity $ 222,670 $ 195,294
Net interest-earning assets $ 21,181 $ 15,382
Net interest income; average interest rate spread $ 5,598 3.35 % $ 4,867 3.36 %
Net interest margin (4) 3.50 % 3.48 %
Average interest-earning assets to average interest-bearing liabilities 111.01 % 109.00 %

~~_______________________~~

~~(1)~~

~~Includes loans held for sale.~~

~~(2)~~

~~Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.~~

~~(3)~~

Includes tax free municipal leases with an aggregate average balance of $74,000 and an average yield of 4.02% for the nine months ended September 30, 2017 and an aggregate average balance of $104,000 and an average yield of 4.02% for the nine months ended September 30, 2016. The tax-exempt income from such loans has not been calculated on a tax equivalent basis.

~~(4)~~

~~Equals net interest income divided by average interest-earning assets.~~

	Nine Months Ended September 30,
	2022							2021
	Average Balance		Interest		Average Yield/ Rate			Average Balance		Interest		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Due from banks, interest-bearing	$	30,668	$	241		1.05	%	$	27,624	$	23		0.11	%
Investment in interest-earning time deposits		7,237		107		1.97			8,154		155		2.53
Investment securities available for sale		3,656		35		1.28			6,553		92		1.87
Loans receivable, net (1) (2)		595,354		22,171		4.97			478,864		16,422		4.57
Investment in FHLB stock		3,751		123		4.37			1,483		57		5.12
Total interest-earning assets		640,666		22,677		4.72	%		522,678		16,749		4.27	%
Non-interest-earning assets		19,225							15,232
Total assets	$	659,891							537,910

Interest-bearing liabilities:
Passbook accounts	$	6	$	-	*	%	$	11	$	-	*	%
Savings accounts		1,672		3	0.24			1,605		2	0.17
Money market accounts		254,701		1,840	0.96			166,791		791	0.63
Certificate of deposit accounts		183,987		1,356	0.98			179,589		1,577	1.17
Total deposits		440,366		3,199	0.97			347,996		2,370	0.91
FHLB short-term borrowings		21,391		133	0.83			5,462		14	0.34
FHLB long-term borrowings		63,746		958	2.00			26,255		392	1.99
FRB long-term borrowings		1,776		4	0.30			29,733		77	0.35
Subordinated debt		7,944		390	6.55			7,910		390	6.57
Other short-term borrowings		229		49	28.53			4,022		127	4.21
Total interest-bearing liabilities		535,452		4,733	1.18	%		421,378		3,370	1.07	%

Non-interest-bearing liabilities		86,585						89,534
Total liabilities		622,037						510,912
Stockholders’ Equity		37,854						26,998
Total liabilities and Stockholders’ Equity	$	659,891					$	537,910
Net interest-earning assets	$	105,214					$	101,300
Net interest income; average interest rate spread			$	17,944	3.54	%			$	13,379	3.20	%
Net interest margin (3)					3.73	%					3.41	%
Average interest-earning assets to average interest-bearing liabilities					119.65	%					124.04	%

________________________

* Not meaningful.

(1) Includes loans held for sale.

(2) Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.

(3) Equals net interest income divided by average interest-earning assets.

Provision for Loan Losses. The ~~Company increased its~~Company’s provision for loan losses ~~by $17,000,~~increased $674,000, or ~~9.9%~~53.5%, ~~from $172,000~~to $1.9 million for the nine months ended September 30, ~~2016 to $189,000~~2022 from $1.3 million for the nine months ended September 30, ~~2017. As was~~2021. The increase in the ~~case~~provision for loan losses for the ~~quarter,~~nine months ended September 30, 2022 over the ~~increase~~nine months ended September 30, 2021 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. See additional discussion under "Comparison of Operating Results for the Three Months Ended~~loans at September 30, ~~2017~~2022.

Non-performing loans at September 30, 2022 consisted of two loans on non-accrual status in the aggregate amount of $1.7 million. The non-performing loans at September 30, 2022 are generally well-collateralized or adequately reserved for. The allowance for loan losses as a percent of total loans receivable, net was 1.22% at September 30, 2022 and ~~2016-Provision for Loan Losses."~~1.30% at December 31, 2021. Non-performing assets amounted to $1.7 million, or 0.24% of assets at September 30, 2022 compared to $9,000 at December 31, 2021.

Non-Interest Income. Non-interest income increased ~~$539,000,~~$6.9 million, or ~~28.7%~~78.0%, from $8.9 million for the nine months ended September 30, ~~2017 over~~2021 to $15.8 million for the ~~comparable period in 2016~~nine months ended September 30, 2022. The increase was primarily ~~due~~attributable to a ~~$222,000,~~$6.9 million, or ~~17.2%~~157.0%, increase in net gain on ~~the sales of residential~~loans held for sale, a $564,000, or 34.0%, increase in mortgage ~~loans,~~banking, equipment lending, and title abstract fees, a ~~$196,000,~~$168,000, or ~~326.7%~~79.6%, increase in other fees and service charges, a $70,000, or 49.0%, increase in real estate commissions, net, and a $34,000, or 9.1%, increase in insurance ~~commissions earned~~commissions. The increase in net gain on loans held for sale was primarily due to the sale of $274.4 million of equipment loans during the nine months ended September 30, 2022. These increases were partially offset by ~~Quaint Oak Insurance Agency,~~ a ~~wholly owned insurance subsidiary~~$411,000, or 64.6%, decrease in gain on sale of ~~Quaint Oak Bank which began operations~~SBA loans, a $362,000, or 100.0%, decrease in gain on ~~August 1, 2016,~~sale of investment securities available for sale, and a ~~$78,000,~~$72,000, or ~~19.1%~~7.0%, decrease in net loan servicing income.

Non-Interest Expense. Total non-interest expense increased $5.1 million, or 34.1%, from $15.0 million for the nine months ended September 30, 2021 to $20.1 million for the nine months ended September 30, 2022, primarily due to a $3.9 million, or 35.5%, increase in salaries and employee benefits expense, a $535,000, or 54.9%, increase in other expense, a $233,000, or 105.4%, increase in FDIC deposit insurance assessment, a $220,000, or 19.2%, increase in occupancy and equipment expense, a $194,000, or 57.6%, increase in advertising expense, a $181,000, or 37.1%, increase in professional fees, and a $24,000, or 12.9%, increase in Directors’ fees and expenses. The increase in salaries and employee benefits is primarily due to expanding and improving the level of staff at the Bank and its subsidiary companies, including Oakmont Capital Holdings, LLC. Oakmont Capital Holdings, LLC’s results for the nine months ended September 30, 2022 also contributed to the increases in occupancy and equipment expense, professional fees, advertising expense, and other expense. The increase in non-interest expense was partially offset by a $141,000, or 22.0%, decrease in data processing expense, and a $14,000, or 100.0%, decrease in other real estate owned expenses.

Provision for Income Tax. The provision for income tax increased $838,000, or 49.5%, from $1.7 million for the nine months ended September 30, 2021 to $2.5 million for the nine months ended September 30, 2022 due primarily to the increase in pre-tax income.

Operating Segments

The Company's operations consist of two reportable operating segments: Banking and Oakmont Capital Holdings, LLC. Our Banking Segment generates revenues primarily from its lending, deposit gathering and fee business activities. Our Oakmont Capital Holdings, LLC Segment originates equipment loans which are generally sold to third party institutions with the loans’ servicing rights retained. Detailed segment information appears in Note 12 in the Notes to Unaudited Consolidated Financial Statements.

Our Banking Segment reported a pre-tax segment profit (“PTSP”) for the three months ended September 30, 2022 of $2.6 million, a $251,000, or 10.7%, increase from the same period in 2021. This increase in PTSP was primarily due to a $1.7 million or 34.7%, increase in net interest income. This increase was partially offset by a $968,000, or 24.2%, increase in non-interest expense, a $427,000, or 22.8%, decrease in non-interest income and $98,000, or 17.6%, increase in the provision for loan losses. The decrease in non-interest income was primarily due to a $311,000, or 84.3%, decrease in the gain on sale of SBA loans, and a $159,000, or 47.9%, decrease in mortgage banking and title abstract fees, partially offset by a ~~$63,000,~~$48,000, or ~~50.0%~~5.7%, increase in gain on loans held for sale. The increase in non-interest expense was primarily due to a $680,000, or 23.7%, increase in salaries and employee benefits expense, a $173,000, or 258.2%, increase in professional fees, a $128,000, or 132.0%, increase in FDIC deposit insurance assessment expense, and a $28,000, or 9.5%, increase in occupancy and equipment expense.

Our Oakmont Capital Holdings, LLC Segment reported a pre-tax segment profit (“PTSP”) for the three months ended September 30, 2022 of $2.1 million, a $1.8 million, or 657.7%, increase from the same period in 2021. The increase in PTSP was primarily due to a $2.8 million, or 164.6%, increase in non-interest income partially offset by a $925,000, or 64.7%, increase in non-interest expense, and a $101,000, or 1,262.5%, decrease in ~~loss~~net interest income. The increase in non-interest income was primarily due to a $2.4 million, or 231.4%, increase net gain on ~~sales~~loans held for sale, and ~~write-downs on other real estate owned,~~ a ~~$25,000,~~$315,000, or ~~69.4%~~115.8%, increase in equipment lending fees. The increase in non-interest expense was primarily due to a $555,000, 45.0%, increase in salaries and employee benefits expense, a $284,000, or 747.4%, increase in other non-interest ~~income,~~expenses, and a ~~$17,000,~~$70,000, or ~~53.1%~~83.3%, increase in occupancy and equipment expense.

Our Banking Segment reported a pre-tax segment profit (“PTSP”) for the nine months ended September 30, 2022 of $6.5 million, a $528,000, or 8.9%, increase from the same period in 2021. This increase in PTSP was primarily due to a $4.7 million, or 34.8%, increase in net interest income. This increase was partially offset by a $2.9 million, or 25.5%, increase in non-interest expense, a $674,000, or 53.5% increase in the provision for loan losses, and a $587,000, or 11.4%, decrease in non-interest income. The increase in non-interest expense was primarily due to a $2.3 million, or 28.6%, increase in salaries and employee benefits expense, a $269,000, or 75.6%, increase in professional fees, a $233,000, or 105.4%, increase in FDIC deposit insurance assessment, a $132,000, or 15.4%, increase in other ~~fees~~non-interest expenses, and ~~services charges, partially offset by~~an $80,000, or 8.9%, increase in occupancy and equipment expense. The decrease in non-interest income was primarily due to a ~~$60,000,~~$411,000, or ~~55.6%~~64.6%, decrease in gain on the sale of SBA loans, ~~and~~ a ~~$2,000,~~$390,000, or ~~3.0%~~39.4%, decrease in ~~income from bank-owned life insurance.~~

~~Non-Interest Expense.~~ ~~Non-interest expense increased $950,000,~~mortgage banking and title abstract fees, and a $362,000, or ~~19.5%~~100.0%, ~~from $4.9 million~~decrease in gain on sale of investment securities available for sale, partially offset by a $545,000, or 23.9%, increase in gain on loans held for sale.

Our Oakmont Capital Holdings, LLC Segment reported a pre-tax segment profit (“PTSP”) for the nine months ended September 30, ~~2016~~2022 of $5.2 million, a $5.2 million, increase from the same period in 2021. The increase in PTSP was primarily due to ~~$5.8~~a $7.5 million, or 201.7%, increase in non-interest income, partially offset by a $2.2 million, or 61.4%, increase in non-interest expense, and a $119,000, or 122.7%, decrease in net interest income. The increase in non-interest income was primarily due to a $6.4 million, or 299.5%, increase in net gain on loans held for ~~the nine months ended September 30, 2017. Salaries~~sale, and a $954,000, or 143.0%, increase in equipment lending fees. The increase in non-interest expense was primarily due to a $1.6 million, or 53.6%, increase in salaries and employee benefits expense, accounted for $673,000 of the change as this expense increased 20.3%, from $3.3 million for the nine months ended September 30, 2016 to $4.0 million for the nine months ended September 30, 2017 due primarily to increased staff related to the continued expansion of the Company's mortgage banking and lending operations and the launch of Quaint Oak Insurance Agency on August 1, 2016. Also contributing to the increase was a ~~$114,000,~~$403,000, or ~~34.2%~~347.4%, increase in other ~~expense due primarily to a $76,000 increase in recruiting fees, an $82,000, or 59.9%, increase in data processing~~non-interest expense, a ~~$33,000,~~$153,000, or ~~39.3%~~135.4%, increase in advertising expense, a $28,000, or 27.2%, increase in FDIC insurance assessment, a $29,000, or 362.5% increase in amortization of other intangible related to the renewal rights of the book of business acquired from Signature Insurance Services, LLC on August 1, 2016, and a ~~$14,000,~~$140,000, or ~~3.4%~~56.5%, increase in occupancy and equipment ~~expense. These increases were~~expense, partially offset by ~~a $20,000,~~an $88,000, or ~~62.5% decrease in other real estate owned expense, a $2,000, or 0.7%~~66.7%, decrease in professional ~~fees, and a $1,000, or 0.6% decrease in directors' fees and expenses.~~

~~Provision for Income Tax.~~ The provision for income tax increased $56,000, or 8.6%, from $650,000 for the nine months ended September 30, 2016 to $706,000 for the nine months ended September 30, 2017 due primarily to the increase in pre-tax income. Our effective tax rate decreased from 38.4% for the nine months ended September 30, 2016 to 35.4% for the nine months ended September 30, 2017 primarily due to a tax deduction taken in the second quarter of 2017 related to the exercise of non-qualified stock options during the nine months ended September 30, 2017.

fees.

Liquidity and Capital Resources

The ~~Company's~~Company’s primary sources of funds are deposits, amortization and prepayment of loans and to a lesser extent, loan sales and other funds provided from operations. While scheduled principal and interest payments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Company sets the interest rates on its deposits to maintain a desired level of total deposits. In addition, the Company invests excess funds in short-term interest-earning assets that provide additional liquidity. At September 30, ~~2017,~~2022, the Company's cash and cash equivalents amounted to ~~$8.2~~$8.3 million. At such date, the Company also had ~~$761,000~~$3.1 million invested in interest-earning time deposits maturing in one year or less.

The Company uses its liquidity to fund existing and future loan commitments, to fund deposit outflows, to invest in other interest-earning assets and to meet operating expenses. At September 30, ~~2017,~~2022, Quaint Oak Bank had outstanding commitments to originate loans of ~~$9.5~~$20.3 million, ~~and~~ commitments under unused lines of credit of ~~$18.8 million.~~

$49.0 million, and $3.3 million under standby letters of credit.

At September 30, ~~2017,~~2022, certificates of deposit scheduled to mature in ~~less than~~ one year or less totaled ~~$42.1~~$85.8 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case.

In addition to cash flow from loan payments and prepayments and deposits, the Company has significant borrowing capacity available to fund liquidity needs. If the Company requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Pittsburgh (FHLB), which provide an additional source of funds. As of September 30, ~~2017,~~2022, we had ~~$25.5~~$93.0 million of borrowings from the FHLB and had ~~$114.0~~$344.2 million in borrowing capacity. Under terms of the collateral agreement with the FHLB of Pittsburgh, we pledge residential mortgage loans as well as Quaint Oak ~~Bank's~~Bank’s FHLB stock as collateral for such advances. In addition, as of September 30, ~~2017~~2022 Quaint Oak Bank had ~~$539,000~~$5.3 million in borrowing capacity with the Federal Reserve Bank of Philadelphia. There were no borrowings under this facility at September 30, ~~2017.~~

~~Our stockholders' equity amounted~~2022. Oakmont Capital Holdings, LLC has two lines of credit with a credit union which are used to ~~$22.0~~fund equipment loans totaling $15.0 million at September 30, ~~2017, an increase~~2022. As of ~~$1.2~~September 30, 2022, there were no outstanding balances on these two lines of credit.

Total stockholders’ equity increased $8.7 million, or ~~5.9%~~23.6%, to $45.6 million at September 30, 2022 from ~~$20.8~~$36.9 million at December 31, ~~2016.~~2021. Contributing to the increase was net income for the nine months ended September 30, ~~2017~~2022 of ~~$1.3~~$6.7 million, net income attributable to noncontrolling interest of $2.6 million, common stock earned by participants in the employee stock ownership plan of ~~$138,000,~~$259,000, amortization of stock awards and options under our stock compensation plans of ~~$97,000,~~$126,000, the reissuance of treasury stock under the Bank’s 401(k) Plan of $48,000 and the reissuance of treasury stock for exercised stock options of ~~$193,000, the reissuance of treasury stock under the Bank's 401(k) Plan of $83,000, and other comprehensive income of $37,000.~~$181,000. These increases were partially offset by dividends paid of $751,000, noncontrolling interest distribution of $279,000, the purchase of treasury stock of ~~$341,000~~$46,000, and ~~by dividends paid~~other comprehensive loss, net of ~~$269,000.~~$42,000. For further discussion of the stock compensation plans, see Note 10 in the Notes to Unaudited Consolidated Financial Statements contained elsewhere herein.

Quaint Oak Bank is required to maintain regulatory capital sufficient to meet tier 1 leverage, common equity tier 1 capital, tier 1 risk-based and total risk-based capital ratios of at least 4.00%, 4.50%, 6.00%, and 8.00%, respectively. At September 30, ~~2017,~~2022, Quaint Oak Bank exceeded each of its capital requirements with ratios of ~~8.61%~~6.82%, ~~11.72%~~8.45%, ~~11.72%~~8.45% and ~~12.77%~~9.67%, respectively. As a small savings and loan holding company eligible for exemption, the Company is not currently subject to any regulatory capital requirements.

Off-Balance Sheet Arrangements

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used primarily to manage customers' requests for funding and take the form of loan commitments and lines of credit. Our exposure to credit loss from non-performance by the other party to the above-mentioned financial instruments is represented by the contractual amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. In general, we do not require collateral or other security to support financial instruments with off–balance sheet credit risk.

Commitments. At September 30, ~~2017,~~2022, we had unfunded commitments under lines of credit of ~~$18.8~~$49.0 million, ~~and $9.5~~$20.3 million of commitments to originate ~~loans.~~loans, and $3.3 million under standby letters of credit. We had no commitments to advance additional amounts pursuant to outstanding lines of credit or undisbursed construction loans.

Impact of Inflation and Changing Prices

The consolidated financial statements and related financial data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America which generally require the measurement of financial position and operating results in terms of historical dollars, without considering changes in relative purchasing power over time due to inflation. Unlike most industrial companies, virtually all of the ~~Company's~~Company’s assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact on the ~~Company's~~Company’s performance than does the effect of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services, since such prices are affected by inflation to a larger extent than interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the ~~"Exchange Act"~~“Exchange Act”)) as of September 30, ~~2017.~~2022. Based on their evaluation of the ~~Company's~~Company’s disclosure controls and procedures, the ~~Company's~~Company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and regulations are operating in an effective manner.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the third fiscal quarter of fiscal ~~2017~~2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1.

LEGAL PROCEEDINGS

The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition and operating results of the Company.

ITEM 1A.

RISK FACTORS

Not applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)Not applicable.

(b)Not applicable.

(c)Purchases of Equity Securities

The ~~Company's~~Company’s repurchases of its common stock made during the quarter ended September 30, ~~2017~~2022 including stock-for-stock option exercises of outstanding stock options, are set forth in the table below:

Period
Total Number
of Shares
Purchased

Average
Price
Paid per
Share

Total Number of
Shares Purchased
as Part of Publicly Announced Plans
or Programs

Maximum
Number of Shares
that May Yet Be
Purchased Under
the Plans or
Programs (1)

July 1, 2017 – July 31, 2017 - $ - - 38,344
August 1, 2017 – August 31, 2017 4,440 13.00 - 38,344
September 1, 2017 – September 30, 2017 22,538 12.34 15,000 23,344
Total 26,978 $ 12.46 15,000 23,344

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1, 2022 – July 31, 2022		-	$	-		-		24,375

August 1, 2022 – August 31, 2022		-		-		-		24,375

September 1, 2022 – September 30, 2022		760		23.00		-		24,375

Total		760	$	23.00		-		24,375

Notes to this table:

~~(1)~~

(1)

On ~~February 21, 2014,~~December 12, 2018, the Board of Directors of Quaint Oak Bancorp approved its ~~fourth~~fifth share repurchase program which provides for the repurchase of up to ~~69,432~~50,000 shares, ~~(adjusted to reflect the two-for-one stock split),~~ or approximately 2.5% of the ~~Company's~~Company’s then issued and outstanding shares of common stock, and announced the ~~fourth~~fifth repurchase program on Form 8-K filed on ~~February 26, 2014.~~December 13, 2018. The repurchase program does not have an expiration date.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

Not applicable.

~~ITEM 5.~~

~~OTHER INFORMATION~~

~~Not applicable.~~

ITEM 6.

EXHIBITS

No.		Description
31.1		Rule 13a-14(d) and 15d-14(d) Certification of the Chief Executive Officer.
31.2		Rule 13a-14(d) and 15d-14(d) Certification of the Chief Financial Officer.
32.0		Section 1350 Certification.
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
~~101.LAB~~ 101.DEF		Inline XBRL Taxonomy Extension Definitions Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
~~101.DEF~~ 104		Cover Page Interactive Data File (formatted as inline XBRL ~~Taxonomy Extension Definitions Linkbase Document.~~and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


~~Date: November 13, 2017~~	~~By:~~	/s/Robert T. Strong
Date: November 14, 2022	By:	Robert T. Strong
		President and Chief Executive Officer



~~Date: November 13, 2017~~	~~By:~~	/s/John J. Augustine
Date: November 14, 2022	By:	John J. Augustine
		Executive Vice President and Chief Financial Officer

~~Pennsylvania~~		~~35-2293957~~
Pennsylvania	35-2293957
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

501 Knowles Avenue, Southampton, Pennsylvania		18966
(Address of Principal Executive Offices)		(Zip Code)

	Large accelerated filer	☐	Accelerated filer	☐

~~Large accelerated filer~~	~~[ ]~~	~~Accelerated filer~~	~~[ ]~~
Non-accelerated filer		~~[ ]~~☒	~~(Do not check if a smaller reporting company)~~
Smaller reporting company		~~[X]~~	~~Emerging growth company~~	~~[ ]~~☒
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ~~[ ]~~☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
~~[ ]~~☐ Yes ~~[X]~~☒ No

Indicate the number of shares outstanding of each of the ~~issuer's~~issuer’s classes of common stock, as of the latest practicable date: As of November ~~8, 2017, 1,917,223~~ 9, 2022, 2,053,527 shares of the ~~Registrant's~~Registrant’s common stock were issued and outstanding.

Title of each Class	Trading Symbol(s)	Name of each exchange on which registered

PART I - FINANCIAL INFORMATION		Page

Item 1 -	Financial Statements

	Consolidated Balance Sheets as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 (Unaudited)	1

	Consolidated Statements of Income for the Three and Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~2021 (Unaudited)	2

	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, ~~2017~~ 2022 and ~~2016~~2021 (Unaudited)	3 4

	Consolidated ~~Statement~~Statements of ~~Stockholders'~~Stockholders’ Equity for the Three and Nine Months Ended September 30, ~~2017~~2022 and 2021 (Unaudited)	4 5

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~2021 (Unaudited)	5 8

	Notes to the Unaudited Consolidated Financial Statements	6 10

Item 2 - M~~anagement's~~	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35 34

Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	47

Item 4 -	Controls and Procedures	47

PART II - OTHER INFORMATION

Item 1 -	Legal Proceedings	48 47

Item 1A -	Risk Factors	48

Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3 -	Defaults Upon Senior Securities	48

Item 4 -	Mine Safety Disclosures	48

Item 5 -	Other Information	49 48

Item 6 -	Exhibits	49

~~SIGNATURES~~

	At September 30,			At December 31,
	2022			2021
	(In thousands, except share data)
Assets
Due from banks, non-interest-bearing	$	830		$	854
Due from banks, interest-bearing		7,509			9,851
Cash and cash equivalents		8,339			10,705
Investment in interest-earning time deposits		5,569			7,924
Investment securities available for sale		3,193			4,033
Loans held for sale		88,400			107,823
Loans receivable, net of allowance for loan losses (2022 $7,141; 2021 $5,262)		579,154			403,966
Accrued interest receivable		3,658			3,139
Investment in Federal Home Loan Bank stock, at cost		3,953			2,178
Bank-owned life insurance		4,203			4,137
Premises and equipment, net		2,916			2,653
Goodwill		2,573			2,573
Other intangible, net of accumulated amortization		186			222
Prepaid expenses and other assets		5,116			4,762
Total Assets	$	707,260		$	554,115
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	79,825		$	64,731
Interest-bearing		467,289			382,435
Total deposits		547,114			447,166
Federal Home Loan Bank short-term borrowings		10,000			26,000
Federal Home Loan Bank long-term borrowings		83,022			23,193
Federal Reserve Bank long-term borrowings		-			3,895
Subordinated debt		7,958			7,933
Accrued interest payable		412			174
Advances from borrowers for taxes and insurance		3,612			2,856
Accrued expenses and other liabilities		9,532			5,989
Total Liabilities		661,650			517,206
Stockholders’ Equity
Preferred stock – $0.01 par value, 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock – $0.01 par value; 9,000,000 shares authorized; 2,777,250 issued; 2,053,554 and 2,011,313 outstanding at
September 30, 2022 and December 31, 2021, respectively		28			28
Additional paid-in capital		16,024			15,685
Treasury stock, at cost: 723,696 and 765,937 shares at September 30, 2022 and December 31, 2021, respectively		(4,748	)		(4,977	)
Accumulated other comprehensive (loss) income		(19	)		23
Retained earnings		29,933			24,030
Total Quaint Oak Bancorp, Inc. Stockholders' Equity		41,218			34,789
Noncontrolling Interest		4,392			2,120
Total Stockholders' Equity	$	45,610		$	36,909
Total Liabilities and Stockholders’ Equity	$	707,260		$	554,115

	At September 30,			At December 31,
	2017			2016
	(In thousands, except share data)
Assets
Due from banks, non-interest-bearing	$	547		$	399
Due from banks, interest-bearing		7,682			8,901
Cash and cash equivalents		8,229			9,300
Investment in interest-earning time deposits		4,879			6,098
Investment securities available for sale		8,434			9,555
Loans held for sale		6,473			4,712
Loans receivable, net of allowance for loan losses (2017 $1,735; 2016 $1,605)		193,771			176,807
Accrued interest receivable		925			862
Investment in Federal Home Loan Bank stock, at cost		1,134			713
Bank-owned life insurance		3,793			3,728
Premises and equipment, net		1,973			1,730
Goodwill		515			515
Other intangible, net of accumulated amortization		428			465
Other real estate owned, net		185			435
Prepaid expenses and other assets		1,467			1,243
Total Assets	$	232,206		$	216,163

Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest bearing	$	7,713		$	5,852
Interest-bearing		174,685			171,155
Total deposits		182,398			177,007
Federal Home Loan Bank short-term borrowings		11,500			7,000
Federal Home Loan Bank long-term borrowings		14,000			8,500
Accrued interest payable		147			142
Advances from borrowers for taxes and insurance		1,781			2,210
Accrued expenses and other liabilities		362			514
Total Liabilities		210,188			195,373

Stockholders' Equity
Preferred stock – $0.01 par value, 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock – $0.01 par value; 9,000,000 shares authorized; 2,777,250
issued; 1,914,486 and 1,891,150 outstanding at September 30, 2017 and December 31, 2016, respectively		28			28
Additional paid-in capital		14,415			14,240
Treasury stock, at cost: 2017 862,764 shares; 2016 886,100 shares		(4,689	)		(4,611	)
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP)		(270	)		(320	)
Recognition & Retention Plan Trust (RRP)		(24	)		(47	)
Accumulated other comprehensive loss		(1	)		(38	)
Retained earnings		12,559			11,538
Total Stockholders' Equity		22,018			20,790
Total Liabilities and Stockholders' Equity	$	232,206		$	216,163

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2017		2016			2017			2016
	(In thousands, except for share data)
Interest Income
Interest on loans	$	2,577	$	2,213		$	7,530		$	6,497
Interest and dividends on short-term investments and investment securities		96		96			262			244
Total Interest Income		2,673		2,309			7,792			6,741

Interest Expense
Interest on deposits		685		638			1,987			1,774
Interest on Federal Home Loan Bank borrowings		100		34			207			100
Total Interest Expense		785		672			2,194			1,874

Net Interest Income		1,888		1,637			5,598			4,867

Provision for Loan Losses		83		61			189			172

Net Interest Income after Provision for Loan Losses		1,805		1,576			5,409			4,695

Non-Interest Income
Mortgage banking and title abstract fees		229		129			487			409
Other fees and services charges		5		(20	)		49			32
Insurance commissions		90		60			256			60
Income from bank-owned life insurance		21		23			65			67
Net gain on the sale of residential mortgage loans		687		531			1,511			1,289
Gain on sale of SBA loans		32		51			48			108
Loss on sales and write-downs on other real estate owned		-		(54	)		(63	)		(126	)
Other		32		13			61			36
Total Non-Interest Income		1,096		733			2,414			1,875

Non-Interest Expense
Salaries and employee benefits		1,324		1,132			3,994			3,321
Directors' fees and expenses		52		48			154			155
Occupancy and equipment		137		143			427			413
Data processing		86		52			219			137
Professional fees		105		94			289			291
FDIC deposit insurance assessment		44		35			131			103
Other real estate owned expense		4		13			12			32
Advertising		39		23			117			84
Amortization of other intangible		13		8			37			8
Other		144		109			447			333
Total Non-Interest Expense		1,948		1,657			5,827			4,877

Income before Income Taxes		953		652			1,996			1,693
Income Taxes		358		250			706			650
Net Income	$	595	$	402		$	1,290		$	1,043

Earnings per share - basic	$	0.32	$	0.22		$	0.69		$	0.59
Average shares outstanding - basic		1,868,969		1,792,673			1,857,682			1,774,343
Earnings per share - diluted	$	0.30	$	0.21		$	0.65		$	0.54
Average shares outstanding - diluted		2,007,819		1,950,413			1,998,138			1,935,757

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Net Income	$	595,000	$	402,000	$	1,290,000	$	1,043,000

Weighted average shares outstanding – basic		1,868,969		1,792,673		1,857,682		1,774,343
Effect of dilutive common stock equivalents		138,850		157,740		140,456		161,414
Adjusted weighted average shares outstanding – diluted		2,007,819		1,950,413		1,998,138		1,935,757

Basic earnings per share	$	0.32	$	0.22	$	0.69	$	0.59
Diluted earnings per share	$	0.30	$	0.21	$	0.65	$	0.54

	September 30, 2017		December 31, 2016
Investment in interest-earning time deposits
Due in one year or less	$	761	$	2,849
Due after one year through five years		4,118		3,249
Total	$	4,879	$	6,098

	September 30, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Available for Sale:
Mortgage-backed securities:
Governmental National Mortgage Association securities	$	5,884	$	20	$	-		$	5,904
Federal Home Loan Mortgage Corporation securities		1,605		-		(15	)		1,590
Federal National Mortgage Association securities		586		-		(3	)		583
Total mortgage-backed securities		8,075		20		(18	)		8,077
Debt securities:
U.S. government agency		360		-		(3	)		357
Total available-for-sale securities	$	8,435	$	20	$	(21	)	$	8,434

	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Available for Sale:
Mortgage-backed securities:
Governmental National Mortgage Association securities	$	6,608	$	1	$	(19	)	$	6,590
Federal Home Loan Mortgage Corporation securities		1,892		-		(21	)		1,871
Federal National Mortgage Association securities		752		-		(12	)		740
Total mortgage-backed securities		9,252		1		(52	)		9,201
Debt securities:
U.S. government agency		360		-		(6	)		354
Total available-for-sale securities	$	9,612	$	1	$	(58	)	$	9,555

	Available for Sale
	Amortized Cost		Fair Value
Debt securities
Due after one year through five years	$	360	$	357
Due after ten years		8,075		8,077
Total	$	8,435	$	8,434

Commission file number:	000-52694

	September 30, 2017
			Less than Twelve Months					Twelve Months or Greater					Total
	Number of Securities		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Federal Home Loan Mortgage Corporation mortgage-backed securities		2	$	768	$	(8	)	$	822	$	(7	)	$	1,590	$	(15	)
Federal National Mortgage Association mortgage-backed securities		1		-		-			583		(3	)		583		(3	)
Debt securities, U.S. government agency		1		-		-			357		(3	)		357		(3	)
Total		4	$	768	$	(8	)	$	1,762	$	(13	)	$	2,530	$	(21	)

	September 30, 2017
	Pass		Special Mention		Substandard		Doubtful		Total
One-to-four family residential owner occupied	$	5,434	$	-	$	-	$	-	$	5,434
One-to-four family residential non-owner occupied		51,963		-		538		-		52,501
Multi-family residential		20,326		-		-		-		20,326
Commercial real estate		85,716		117		967		-		86,800
Construction		13,318		-		2,069		-		15,387
Home equity		4,201		-		-		-		4,201
Commercial business		11,535		36		-		-		11,571
Other consumer		43		-		-		-		43
Total	$	192,536	$	153	$	3,574	$	-	$	196,263

	September 30, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		565		565		-		1,058		18
Multi-family residential		-		-		-		-		-
Commercial real estate		398		398		-		398		-
Construction		2,069		2,069		-		2,061		58
Home equity		46		46		-		48		4
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

With an allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		170		170		38		95		4
Multi-family residential		-		-		-		-		-
Commercial real estate		133		133		1		395		7
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

Total:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		735		735		38		1,153		22
Multi-family residential		-		-		-		-		-
Commercial real estate		531		531		1		793		7
Construction		2,069		2,069		-		2,061		58
Home equity		46		46		-		48		4
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	3,381	$	3,381	$	39	$	4,055	$	91

	September 30, 2017
	Number of Contracts		Recorded Investment		Non- Accrual		Accruing		Related Allowance
One-to-four family residential owner occupied		-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		5		540		-		540		21
Multi-family residential		-		-		-		-		-
Commercial real estate		1		133		-		133		1
Construction		-		-		-		-		-
Home equity		2		46		-		46		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total		8	$	719	$	-	$	719	$	22

	September 30, 2017
	Accruing Past Due Less than 30 Days		Past Due 30-89 Days		90 Days or More Past Due		Non- Accrual		Total
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		540		-		-		-		540
Multi-family residential		-		-		-		-		-
Commercial real estate		133		-		-		-		133
Construction		-		-		-		-		-
Home equity		46		-		-		-		46
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	719	$	-	$	-	$	-	$	719

	September 30, 2017
	1-4 Family Residential Owner Occupied			1-4 Family Residential Non-Owner Occupied			Multi-Family Residential			Commercial Real Estate			Construction			Home Equity			Commercial Business and Other Consumer		Unallocated		Total
For the Three Months Ended September 30, 2017
Allowance for loan losses:
Beginning balance	$	45		$	465		$	156		$	645		$	137		$	41		$	111	$	90	$	1,690
Charge-offs		-			(38	)		-			-			-			-			-		-		(38	)
Recoveries		-			-			-			-			-			-			-		-		-
Provision		(2	)		93			(14	)		10			(4	)		(18	)		18		-		83
Ending balance	$	43		$	520		$	142		$	655		$	133		$	23		$	129	$	90	$	1,735

For the Nine Months Ended September 30, 2017
Allowance for loan losses:
Beginning balance	$	41		$	503		$	103		$	616		$	138		$	37		$	87	$	80	$	1,605
Charge-offs		-			(38	)		-			(24	)		-			-			-		-		(62	)
Recoveries		-			-			-			3			-			-			-		-		3
Provision		2			55			39			60			(5	)		(14	)		42		10		189
Ending balance	$	43		$	520		$	142		$	655		$	133		$	23		$	129	$	90	$	1,735

Ending balance evaluated
for impairment:
Individually	$	-		$	38		$	-		$	1		$	-		$	-		$	-	$	-	$	39
Collectively	$	43		$	482		$	142		$	654		$	133		$	23		$	129	$	90	$	1,696

Loans receivable:
Ending balance:	$	5,434		$	52,501		$	20,326		$	86,800		$	15,387		$	4,201		$	11,614	$	-	$	196,263

Ending balance evaluated
for impairment:
Individually	$	-		$	735		$	-		$	531		$	2,069		$	46		$	-	$	-	$	3,381
Collectively	$	5,434		$	51,766		$	20,326		$	86,269		$	13,318		$	4,155		$	11,614	$	-	$	192,882

	September 30, 2016
	1-4 Family Residential Owner Occupied			1-4 Family Residential Non-Owner Occupied		Multi-Family Residential			Commercial Real Estate		Construction			Home Equity			Commercial Business and Other Consumer		Unallocated			Total
For the Three Months Ended September 30, 2016
Allowance for loan losses:
Beginning balance	$	46		$	525	$	66		$	484	$	115		$	51		$	37	$	100		$	1,424
Charge-offs		-			-		-			-		-			-			-		-			-
Recoveries		-			-		-			-		-			-			-		-			-
Provision		(9	)		25		(11	)		63		28			(19	)		14		(30	)		61
Ending balance	$	37		$	550	$	55		$	547	$	143		$	32		$	51	$	70		$	1,485

For the Nine Months Ended September 30, 2016
Allowance for loan losses:
Beginning balance	$	55		$	486	$	81		$	389	$	153		$	50		$	18	$	81		$	1,313
Charge-offs		-			-		-			-		-			-			-		-			-
Recoveries		-			-		-			-		-			-			-		-			-
Provision		(18	)		64		(26	)		158		(10	)		(18	)		33		(11	)		172
Ending balance	$	37		$	550	$	55		$	547	$	143		$	32		$	51	$	70		$	1,485

Ending balance evaluated
for impairment:
Individually	$	-		$	30	$	-		$	11	$	-		$	-		$	-	$	-		$	41
Collectively	$	37		$	520	$	55		$	536	$	143		$	32		$	51	$	70		$	1,444

	September 30, 2017
	30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable 90 Days or More Past Due and Accruing

One-to-four family residential owner occupied	$	468	$	417	$	885	$	4,549	$	5,434	$	417
One-to-four family residential non-owner occupied		611		439		1,050		51,451		52,501		244
Multi-family residential		81		-		81		20,245		20,326		-
Commercial real estate		2,603		617		3,220		83,580		86,800		219
Construction		509		2,069		2,578		12,809		15,387		-
Home equity		34		-		34		4,167		4,201		-
Commercial business		-		-		-		11,571		11,571		-
Other consumer		-		-		-		43		43		-
Total	$	4,306	$	3,542	$	7,848	$	188,415	$	196,263	$	880

	September 30, 2017					September 30, 2016
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Unvested at the beginning of the period		20,524		$	8.10		30,784		$	8.10
Granted		-			-		-			-
Vested		(10,263	)		8.10		(10,260	)		8.10
Forfeited		-			-		-			-
Unvested at the end of the period		10,261		$	8.10		20,524		$	8.10

	2017							2016
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at the beginning of the year		316,348		$	6.49		3.8		354,266		$	6.33		4.7
Granted		-			-		-		-			-		-
Exercised		(38,800	)		5.00		-		(26,518	)		5.00		-
Forfeited		-			-		-		-			-		-
Outstanding at end of period		277,548		$	6.70		3.4		327,748		$	6.44		4.0
Exercisable at end of period		247,228		$	6.53		3.1		266,148		$	6.06		1.6

	September 30, 2017
	Fair Value Measurements Using:
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring fair value measurements
Investment securities available for sale
Governmental National Mortgage Association mortgage-backed securities	$	5,904	$	-	$	5,904	$	-
Federal Home Loan Mortgage Corporation mortgage-backed securities		1,590		-		1,590		-
Federal National Mortgage Association mortgage-backed securities		583		-		583		-
Debt securities, U.S. government agency		357		-		357		-
�� Total investment securities available for sale	$	8,434	$	-	$	8,434	$	-

Nonrecurring fair value measurements
Impaired loans	$	3,342	$	-	$	-	$	3,342
Other real estate owned		185		-		-		185

					Fair Value Measurements at
					September 30, 2017
	Carrying Amount		Fair Value Estimate		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Financial Assets
Cash and cash equivalents	$	8,229	$	8,229	$	8,229	$	-	$	-
Investment in interest-earning time deposits		4,879		4,935		-		-		4,935
Investment securities available for sale		8,434		8,434		-		8,434		-
Loans held for sale		6,473		6,741		-		6,741		-
Loans receivable, net		193,771		194,955		-		-		194,955
Accrued interest receivable		925		925		925		-		-
Investment in FHLB stock		1,134		1,134		1,134		-		-
Bank-owned life insurance		3,793		3,793		3,793		-		-

Financial Liabilities
Deposits		182,398		183,882		39,982		-		143,900
FHLB short-term borrowings		11,500		11,500		11,500		-		-
FHLB long-term borrowings		14,000		13,997		-		-		13,997
Accrued interest payable		147		147		147		-		-

	Three Months Ended September 30,
	2017							2016
	Average Balance		Interest		Average Yield/ Rate			Average Balance		Interest		Average Yield/ Rate
Interest-earning assets:	(Dollars in thousands)
Due from banks, interest-bearing	$	8,247	$	30		1.46	%	$	18,833	$	26		0.55	%
Investment in interest-earning time deposits		5,370		21		1.56			6,120		32		2.09
Investment securities available for sale		8,774		36		1.64			8,547		30		1.40
Loans receivable, net (1) (2) (3)		198,780		2,577		5.19			161,840		2,214		5.47
Investment in FHLB stock		1,134		9		3.17			633		7		4.42
Total interest-earning assets		222,305		2,673		4.81	%		195,973		2,309		4.71	%
Non-interest-earning assets		9,159							9,425
Total assets	$	231,464						$	205,398
Interest-bearing liabilities:
Passbook accounts	$	671	$	*		*	%	$	1,182	$	*		*	%
Savings accounts		1,550		1		0.26			2,173		1		0.18
Money market accounts		32,070		65		0.81			29,614		60		0.81
Certificate of deposit accounts		139,918		619		1.77			134,099		577		1.72
Total deposits		174,209		685		1.57			167,068		638		1.53
FHLB short-term borrowings		9,875		32		1.30			6,000		8		0.53
FHLB long-term borrowings		15,625		68		1.74			7,294		26		1.43
Total interest-bearing liabilities		199,709		785		1.57	%		180,362		672		1.49	%
Non-interest-bearing liabilities		9,787							5,038
Total liabilities		209,496							185,400
Stockholders' Equity		21,968							19,998
Total liabilities and Stockholders' Equity	$	231,464						$	205,398
Net interest-earning assets	$	22,596						$	15,661
Net interest income; average interest rate spread			$	1,888		3.24	%			$	1,637		3.22	%
Net interest margin (4)						3.40	%						3.34	%
Average interest-earning assets to average interest-bearing liabilities						111.31	%						108.66	%

	Nine Months Ended September 30,
	2017							2016
	Average Balance		Interest		Average Yield/ Rate			Average Balance		Interest		Average Yield/ Rate
Interest-earning assets:	(Dollars in thousands)
Due from banks, interest-bearing	$	8,428	$	70		1.11	%	$	17,994	$	70		0.52	%
Investment in interest-earning time deposits		5,597		67		1.60			6,135		82		1.78
Investment securities available for sale		9,092		101		1.48			6,080		70		1.54
Loans receivable, net (1) (2) (3)		189,527		7,530		5.30			155,459		6,497		5.57
Investment in FHLB stock		883		24		3.62			631		22		4.65
Total interest-earning assets		213,527		7,792		4.87	%		186,299		6,741		4.82	%
Non-interest-earning assets		9,143							8,995
Total assets	$	222,670						$	195,294
Interest-bearing liabilities:
Passbook accounts	$	768	$	1		0.17	%	$	1,268	$	1		0.11	%
Savings accounts		1,588		2		0.17			2,527		4		0.21
Money market accounts		32,687		196		0.80			28,099		169		0.80
Certificate of deposit accounts		137,957		1,788		1.73			125,589		1,600		1.70
Total deposits		173,000		1,987		1.53			157,483		1,774		1.50
FHLB short-term borrowings		8,350		68		1.09			6,000		24		0.53
FHLB long-term borrowings		10,996		139		1.69			7,434		76		1.36
Total interest-bearing liabilities		192,346		2,194		1.52	%		170,917		1,874		1.46	%
Non-interest-bearing liabilities		8,820							4,791
Total liabilities		201,166							175,708
Stockholders' Equity		21,504							19,586
Total liabilities and Stockholders' Equity	$	222,670						$	195,294
Net interest-earning assets	$	21,181						$	15,382
Net interest income; average interest rate spread			$	5,598		3.35	%			$	4,867		3.36	%
Net interest margin (4)						3.50	%						3.48	%
Average interest-earning assets to average interest-bearing liabilities						111.01	%						109.00	%

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1, 2017 – July 31, 2017		-	$	-		-		38,344
August 1, 2017 – August 31, 2017		4,440		13.00		-		38,344
September 1, 2017 – September 30, 2017		22,538		12.34		15,000		23,344
Total		26,978	$	12.46		15,000		23,344