QUAINT OAK BANCORP INC

Accounting Pronouncements Adopted

In* June 2016,the FASB issued ASU2016*-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 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. ASU2016-13 is effective for annual and interim periods beginning after* December 15, 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 thefirst* reporting period in which the guidance is adopted.

In* March 2022,the FASB issued ASU2022*-02, Financial Instruments - Credit Losses (ASC326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC326 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 ASC326 require that an 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 entities that have adopted the amendments in Update2016-13 for fiscal years, and interim periods within those fiscal years, beginning after* December 15, 2022.*

As of* January 1, 2023,the Company adopted ASU326* using the weighted average maturity method (WARM) for all financial assets measured at amortized cost, net of investments in leases and off balance sheet credit exposures. Results for reporting periods beginning after* January 1, 2023are presented under ASU326,* while prior period results are reported in accordance with the previously applicable incurred loss methodology. The Company recordedno change to retained earnings as of* January 1, 2023for the cumulative effect of adopting ASC326.*

In* January 2020,the FASB issued ASU2020*-04, Reference Rate Reform (Topic848*): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,* March 2020**, to provide temporary optional expedients and 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 the Secured Overnight Financing Rate. Entities can electnot 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 wouldnot have to remeasure 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 aone-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 ASU are effective for all entities upon issuance through* December 31, 2022.In December 2022,the FASB issued ASU2022*-06, Reference Rate Reform (Topic848*): Deferral of the Sunset Date of Topic848**, which extends the sunset (or expiration) date of Accounting Standards Codification (ASC) Topic848* to* December 31, 2024.This gives reporting entitiestwo* additional years to apply the accounting relief provided under ASC Topic848 for matters related to reference rate reform. ASU2022-06 is effective for all reporting entities immediately upon issuance and must be applied on a prospective basis. 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 2021,the FASB issued ASU2021*-01, Reference Rate Reform (Topic848*), 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 optional expedients and exceptions within Topic848.* ASU2021-01 clarifies that the derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic848. ASU2021-01 is effective immediately for all entities. Entities* mayelect to apply the amendments on a full retrospective basis as of any date from the 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 issued. The amendments in this update donot* 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.

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Quaint Oak Bancorp, Inc.