OTC:QNTO
QUAINT OAK BANCORP, INC.
A regional financial institution leveraging organic growth strategies to stabilize net income following a period of significant cash outflows for financing activities.
Key Metrics
Investment Thesis
Bull Case
Investors may view the recovery in net profit from 2023 to 2024 as a sign of operational stabilization and effective cost management; the company maintains a healthy cash buffer with ending cash matching beginning cash at $63M, providing flexibility for strategic investments or dividends.
Bear Case
The substantial retained earnings deficit of $33.2M indicates historical profitability challenges that could limit future dividend growth or capital returns; heavy reliance on non-operating income components and significant other cash flow from financing outflows suggests potential underlying structural weaknesses in core lending operations.
About QUAINT OAK BANCORP, INC.
QUAINT OAK BANCORP, INC. (QNTO) is a regional bank serving the mid-sized business and consumer banking needs of its local community through comprehensive deposit and lending services.
Analysis
Management Discussion
Management successfully navigated a challenging environment where net income dropped from $10.3M in 2022 to $1.7M in 2023 before recovering to $2.8M in 2024, demonstrating resilience despite substantial non-cash adjustments of $-42.8M and other non-cash adjustments of $-43.7M.
Industry Overview
The regional banking sector faces ongoing pressure from digital disruption and rising cost of funds, requiring institutions like QNTO to focus on niche community relationships and efficient branch networks to maintain profitability.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Cost of Revenue | $0 | $0 | $0 |
| Operating Income | $13.4M | $2.9M | $3.4M |
| Stock-Based Comp | $511.0K | $225.0K | $242.0K |
| Depreciation | $437.0K | $530.0K | $602.0K |
| Amortization | $49.0K | $49.0K | $49.0K |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $8.8M | $26.3M | — |
| Pre-Tax Income | $13.4M | $2.9M | $3.4M |
| Income Tax | $3.1M | $1.2M | $1.2M |
| Continuing Ops | $10.3M | $1.7M | $2.4M |
| Discontinued Ops | $0 | $0 | $406.0K |
| Net Income | $10.3M | $1.7M | $2.8M |
| Minority Interest | $2.4M | $-350.0K | $0 |
| Net to Common | $7.9M | $2.0M | $2.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Cash & Equivalents | $3.9M | $62.1M | $63.0M |
| PP&E (Net) | $2.8M | $2.9M | $1.6M |
| Goodwill | $2.6M | $2.6M | $515.0K |
| Total Assets | $792.4M | $754.1M | $685.2M |
| Total Liabilities | $743.3M | $702.6M | $632.6M |
| Shareholders' Equity | $49.1M | $51.6M | $52.6M |
| Paid-In Capital | $17.9M | $20.3M | $23.0M |
| Retained Earnings | $30.9M | $31.7M | $33.2M |
| AOCI | $-24.0K | $-10.0K | $0 |
| Treasury Stock | $4.0M | — | — |
| Total L&E | $792.4M | $754.1M | $685.2M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $10.3M | $1.7M | $2.8M |
| Non-Cash Adjustments | $-47.9M | $51.2M | $-42.8M |
| Working Capital Changes | $25.4M | $20.2M | $72.6M |
| Cash from Operations | $-12.2M | $73.1M | $32.6M |
| Cash from Investing | $-218.0M | $25.9M | $31.5M |
| Share Buybacks | $49.0K | $433.0K | $150.0K |
| Dividends Paid | $1.0M | $1.2M | $1.3M |
| Cash from Financing | $223.4M | $-40.8M | $-59.1M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-6.8M | $58.2M | $5.0M |
| Beginning Cash | $10.7M | $3.9M | $58.0M |
| Ending Cash | $3.9M | $62.1M | $63.0M |
Frequently Asked Questions
How does QUAINT OAK BANCORP, INC. make money?
The company operates primarily through traditional commercial and retail banking segments, generating revenue from interest on loans, fee-based services, and investment securities, with recent data indicating a separate profit contribution from discontinued operations totaling $406,000.
What are the main risks for QNTO?
Significant reliance on non-controlling interests for historical income stability given the large retained earnings deficit of $33.2M; vulnerability to interest rate fluctuations affecting net interest margins typical of regional banks; potential liquidity stress from other cash flow from financing outflows reaching $63M; exposure to credit losses impacting operating profit which saw a slight contraction in recent years.
What is QNTO's competitive advantage?
Strong liquidity position evidenced by $63M in cash and equivalents against $632.6M in total liabilities; significant goodwill asset base of $515k suggesting established brand loyalty or past acquisitions; diversified cash flow streams with operational cash inflows of $32.6M offsetting substantial financing outflows.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.