QUAINT OAK BANCORP, INC.

Consolidated Balance Sheets (Unaudited)

Consolidated Statements of Operations (Unaudited)

Consolidated Statements of Operations (Unaudited)

Consolidated Statements of Comprehensive Income (Unaudited)

Consolidated Statements of Stockholders’** Equity (Unaudited)**

Consolidated Statements of Stockholders’** Equity (Unaudited)**

Consolidated Statements of Cash Flows (Unaudited)

Consolidated Statements of Cash Flows (Unaudited)

Note1 – 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” or “Quaint Oak Bancorp”) and its wholly owned subsidiary, Quaint Oak Bank, a Pennsylvania chartered stock savings bank (the “Bank”), along with its wholly owned subsidiaries. At* September 30, 2025,the Bank hasfive wholly-owned subsidiaries, Quaint Oak Mortgage, LLC, Quaint Oak Abstract, LLC, QOB Properties, LLC, Quaint Oak Insurance Agency, LLC, and Oakmont Commercial, LLC, each a Pennsylvania limited liability company. Quaint Oak Mortgage offers mortgage banking in the Lehigh Valley, Delaware Valley and Philadelphia County regions of Pennsylvania and began operations in February, 2019.Quaint Oak Abstract offers title abstract services primarily in the Lehigh Valley region of Pennsylvania and began operation in July 2009.QOB Properties, LLC began operations in July 2012and holds Bank properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Quaint Oak Insurance Agency, LLC began operations in August 2016and provides a broad range of personal and commercial insurance coverage solutions. Oakmont Commercial, LLC was formed in October 2021and operates as a nationwide specialty commercial real estate financing company. On March 29, 2024,Quaint Oak Bank sold its 51% interest in Oakmont Capital Holdings, LLC (“OCH”), a multi-state equipment finance company based in West Chester, Pennsylvania. The decision was based on a number of strategic priorities and other factors. As a result of this action, Quaint Oak Bancorp classified the operations of OCH as discontinued operations under ASC205*-20 and ceased all equipment loan originations. Also on* March 29, 2024,the Company discontinued the operations of Quaint Oak Real Estate, LLC (“Quaint Oak Real Estate”), a100%* wholly owned subsidiary of the Bank. Quaint Oak Real Estate was engaged in the real estate brokerage business. 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 election under Section10(l) of the Home 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, Montgomery and Philadelphia Counties in Pennsylvania and the Lehigh Valley area in Pennsylvania, although the Bank has customers in allfifty states, the District of Columbia and Puerto Rico. The Bank hasthree regional offices located in the Delaware Valley, Lehigh Valley and Philadelphia markets. The principal deposit products offered by the Bank are money market accounts, certificates of deposit, non-interest bearing checking accounts for businesses and 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.

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 Form10-Q, as applicable to a smaller reporting company. Accordingly, they donot 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, 2024have 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’s2024* Annual Report on Form10-K. The results of operations for thethree andnine months ended* September 30, 2025arenot* necessarily indicative of the results that* maybe expected for the year ending December 31, 2025.*

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Note1 – 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 most significant estimates are the determination of the allowance for credit losses and the valuation of deferred tax assets.

**Critical Accounting Policies.The Company’s critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of September 30, 2025have remained unchanged from the disclosures presented in our Annual Report on Form10-K.

Accounting PronouncementsNot Yet Adopted**. In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for public business entities for annual periods beginning after* December 15, 2024.*The Company is currently evaluating the impact of this new guidance on its financial statements.

********Reclassifications.Certain items in the prior period consolidated financial statements have been reclassified to conform to the presentation in the current period consolidated financial statements. Such reclassifications didnot have a material impact on the presentation of the overall financial statements. The reclassifications hadno effect on net income or stockholders’ equity.

Note2 – Discontinued Operations

On* March 29, 2024,Quaint Oak Bank sold its 51% interest in OCH. The decision was based on a number of strategic priorities and other factors. As a result of this action, the Company classified the operations of OCH as discontinued operations under ASC205*-20. The Consolidated Statements of Operations and Consolidated Statements of Cash Flows present discontinued operations for the current period and retrospectively for prior periods.

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Note2 – Discontinued Operations (Continued)

The following presents operating results of the discontinued operations OCH for thenine months ended* September 30, 2025and September 30, 2024 (*in thousands):

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Note3 – Earnings Per Share

Earnings per share (“EPS”) consists oftwo 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 be purchased with the proceeds from the exercise of stock options, as well as unvested restricted stock (RRP) shares. Common stock equivalents which are considered antidilutive arenot included for the purposes of this calculation. For thethree andnine months ended* September 30, 2025and September 30, 2024,*all unvested restricted stock program awards and outstanding stock options representing shares were anti-dilutive.

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

Note4 – Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) by component, net of tax, for thethree andnine months ended* September 30, 2025and2024* (in thousands):

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

There wereno reclassifications from accumulated other comprehensive income by component for thethree ornine months ended* September 30, 2025and2024.*

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Note5 – 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, 2025and December 31, 2024*are summarized below (in thousands):

The amortized cost and fair value of mortgage-backed securities at* September 30, 2025,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):

There wereno securities in a loss position at* September 30, 2025.*

The following tables show the 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* December 31, 2024 (*in thousands):

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Note5 – Investment Securities Available for Sale (Continued)

The Company’s mortgage-backed securities have contractual terms that generally donot permit the issuer to settle the securities at a price less than the amortized cost of the investment. The change in fair value of these securities is attributable to changes in interest rates andnot credit quality, and the Company doesnot have the intent to sell and doesnot believe it will more likely thannot be required to sell any of these securities prior to a recovery of their fair value to amortized cost. Therefore, the Company doesnot have an allowance for credit losses for these investments as of* September 30, 2025.*

There wereno credit losses recognized during thethree andnine months ended* September 30, 2025and2024.* There wereno sales during thethree andnine months ended* September 30, 2025and2024.*

Note6 - Loans Receivable, Net and Allowance for Credit Losses

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

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The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of* September 30, 2025 (*in thousands):

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The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of* December 31, 2024 (*in thousands):

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Note6 – Loans Receivable, Net and Allowance for Credit Losses (Continued)

The following tables present non-performing loans by classes of the loan portfolio as of* September 30, 2025and December 31, 2024 (*in thousands):

As part of the discontinued operations of OCH, the Bank retained approximately 60 commercial business loans totaling $4.4 million, which were classified as non-accrual. As of* September 30, 2025,*the value of these total $860,000, made up of approximately 24 loans. The Bank continues to monitor these loans for collectability.

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For thethree andnine months ended* September 30, 2025and September 30, 2024there wasno interest income recognized on non-accrual loans on a cash basis. There was $54,000 and $346,000 of interest income foregone on non-accrual loans for thethree* andnine months ended* September 30, 2025,and $124,000 and $279,000 for thethree* andnine months ended* September 30, 2024.*

Occasionally, the Bank modifies loans to borrowers in financial distress by providing principal forgiveness and term extensions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Bank provides multiple types of concessions onone loan. Typically,one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness,* may*be granted.

As of* September 30, 2025,there wasone commercial business loan with an amortized cost of $34,000 which was granted a term extension resulting in a change in the maturity date, from August 2027to February 2030*in addition to principal forgiveness of $2,000. This loan represented 0.01% of loans receivable, net.

Following is a summary, by loan portfolio class, of changes in the allowance for credit losses for thethree andnine months ended* September 30, 2025 (*in thousands):

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The Bank allocated decreased allowance for credit loss provisions to the multi-family residential loan portfolio classes for thethree andnine months ended* September 30, 2025,due primarily to changes in quantitative factors and qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the commercial real estate loan portfolio class for thethree* andnine months ended* September 30, 2025,due primarily to changes in qualitative and quantitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the construction loan portfolio classes for thethree* andnine months ended* September 30, 2025,due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the commercial business loan portfolio class for thethree* andnine months ended* September 30, 2025,*due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class.

Following is a summary, by loan portfolio class, of changes in the allowance for credit losses for thethree andnine months ended* September 30, 2024 (*in thousands):

The Bank allocated decreased allowance for credit loss provisions to the commercial real estate loan portfolio classes for thethree andnine months ended* September 30, 2024,due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated decreased allowance for credit loss provisions to the construction loan portfolio class for thethree* andnine months ended* September 30, 2024,due primarily to decrease in loan balances and changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the multi-family residential loan portfolio classes for thethree* andnine months ended* September 30, 2024,due primarily to changes in qualitative factors associated with the current economic environment in this portfolio class. The Bank allocated increased allowance for credit loss provisions to the commercial business loan portfolio classes for thenine* months ended* September 30, 2024,*due primarily to changes in qualitative factors in this portfolio class. 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.

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The following tables present the classes of the loan portfolio summarized by the past due status as of* September 30, 2025and December 31, 2024 (*in thousands):

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.

As of* September 30, 2025,the Company has initiated formal foreclosure proceedings on$699,000 ofone*-to-four family residential owner occupied loans and commercial real estate loans, which havenot yet been transferred into foreclosed assets.

Note7 – Goodwill and Other Intangible, Net

On* August 1, 2016,Quaint Oak Insurance Agency, LLC began operations by acquiring the renewal rights to a book of business produced and serviced by 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 aten year period based upon the annual retention rate of the book of business. The balance of other intangible asset at September 30, 2025and2024* was $40,000, and $89,000, respectively, which is net of accumulated amortization of $445,000 and $396,000, respectively. Amortization expense for both thethree andnine months ended* September 30, 2025and2024* amounted to approximately $12,000 and $36,000, respectively.

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Note8 – Deposits

Deposits consist of the following classifications (in thousands):

Note9 – Borrowings

Federal Home Loan Bank (“FHLB”) advances consist of the following at* September 30, 2025and December 31, 2024 (*in thousands):

The following table presents the balance and unamortized issuance costs of the subordinated debt and senior debt at* September 30, 2025*are as follows (in thousands):

The balance of senior debt, net of unamortized debt issuance costs, was $9.6 million at* September 30, 2025.*

The balance of subordinated debt was $8.0 million and $22.0 million at* September 30, 2025and December 31, 2024,*respectively.

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Note10 – 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. The Bank* may*make cash contributions to the ESOP on a quarterly basis which are allocated to participant accounts on an annual basis.

During thethree andnine months ended* September 30, 2025and2024,* the Company didnot make a discretionary contribution of shares to the ESOP. During thenine months ended* September 30, 2025and2024,* the Company recognized $108,000 and $94,000 of ESOP expense, respectively.

Stock Incentive Plans–** Share Awards**** **

In* May 2018,the shareholders of Quaint Oak Bancorp approved the adoption of the2018* Stock Incentive Plan (the*“2018* Stock Incentive Plan”). The2018 Stock Incentive Plan approved by shareholders in* May 2018covered a total of 155,000 shares, of which 38,750, or 25%, may*be restricted stock awards, for a balance of 116,250 stock options assuming all the restricted shares are awarded.

In* May 2023,the shareholders of Quaint Oak Bancorp approved the adoption of the2023* Stock Incentive Plan (the*“2023* Stock Incentive Plan”). The2023 Stock Incentive Plan approved by shareholders in* May 2023covered a total of 175,000 shares, of which 43,750, or 25%, maybe restricted stock awards, for a balance of 131,250 stock options assuming all the restricted shares are awarded. In September 2025,12,500 shares that were available under the2023* Stock Incentive Plan were granted.

As of* September 30, 2025,a total of 38,000 share awards were unvested under the2018* and2023 Stock Incentive Plan andno share awards were available for future grant under the2023 Stock Incentive Plan and the2018 Stock Incentive Plan. The2018 and2023 Stock Incentive Plan share awards have vesting periods offive years.

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Note10 – Stock Compensation Plans

Stock Incentive Plans–** Share Awards**** **

A summary of share award activity under the Company’s2018 and2023 Stock Incentive Plans as of* September 30, 2025and changes during thenine* months ended* September 30, 2025*is as follows:

Compensation expense on the restricted stock awards is recognized ratably over thefive-year vesting period in an amount which is equal to the fair value of the common stock at the date of grant. During both thethree months ended* September 30, 2025and2024,* the Company recognized approximately $41,000 of compensation expense. During both thethree months ended* September 30, 2025and2024,* the Company recognized a tax benefit of approximately $9,000. During both thenine months ended* September 30, 2025and2024,* the Company recognized approximately $122,000 of compensation expense. During both thenine months ended* September 30, 2025and2024,* the Company recognized a tax benefit of approximately $26,000. As of* September 30, 2025,*approximately $552,000 in additional compensation expense will be recognized over the remaining service period of approximately 3.8 years.

Stock Incentive Plans–** Stock Options**** **

The2018 Stock Incentive Plan approved by shareholders in* May 2018covered a total of 155,000 shares, of which 116,250 * maybe stock options assuming all the restricted shares are awarded. The outstanding options granted in2018 remain exercisable until* May 2028,to the extent still outstanding. In May 2023,the shareholders of Quaint Oak Bancorp approved the adoption of the2023* Stock Incentive Plan. The2023 Stock Incentive Plan approved by shareholders in* May 2018covered a total of 175,000 shares, of which 131,250 * maybe stock options assuming all the restricted shares are awarded.

All incentive stock options issued under the2018 and2023 Stock Incentive Plans are intended to comply with the requirements of Section422 of the Internal Revenue Code. Options will become vested and exercisable over afive-year period and are generally exercisable for a period often years after the grant date.

In* September 2025,42,000 shares that were available under the2023* Stock Incentive Plan were granted. As of* September 30, 2025,a total of 254,033 grants of stock options were outstanding under the2018* and2023 Stock Incentive Plans andno stock options were available for future grant under the2018 and2023 Stock Incentive Plans. Options will become vested and exercisable over afive-year period and are generally exercisable for a period often years after the grant date.

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Note10 – Stock Compensation Plans (Continued)

Stock Incentive Plans–** Stock Options**** **

A summary of option activity under the Company’s2018 and2023 Stock Incentive Plans as of* September 30, 2025and changes during thenine* months ended* September 30, 2025*is as follows:

During both thethree months ended* September 30, 2025and2024,* the Company recognized approximately $20,000 of compensation expense on stock options. During boththree months ended* September 30, 2025and2024,* the Company recognized a tax benefit of approximately $1,000. During both thenine months ended* September 30, 2025and2024,* the Company recognized approximately $60,000 of compensation expense on stock options. During both thenine months ended* September 30, 2025and2024,* the Company recognized a tax benefit of approximately $4,000. As of* September 30, 2025,*approximately $313,000 in additional compensation expense will be recognized over the remaining service period of approximately 3.8 years.

Note11 – 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 values estimates* may**not* be substantiated by comparison to independent markets and arenot intended to reflect the proceeds that* may*be realizable in an immediate settlement of the instruments.

Fair value is determined atone point in time and isnot representative of future value. These amounts donot reflect the total value of a going concern organization. Management doesnot have the intention to dispose of a significant portion of its assets and liabilities and therefore, the unrealized gains or losses shouldnot be interpreted as a forecast of future earnings and cash flows.

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

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 Note20 of the Company’s2024 Annual Report on Form10-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 Level3 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: The fair value of securities available for sale are determined by using matrix pricing (Level2), 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’ 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.

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Individually Evaluated Loans: Individually evaluated loans are carried at the lower of cost or the fair value of the collateral for collateral-dependent loans less estimated costs to sell. The use of independent appraisals, discounted cash flow models and 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 Level3 of the fair value hierarchy.

The following table presents the collateral-dependent loans by portfolio segment and collateral type at* September 30, 2025:*

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, 2025 (*in thousands):

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, 2024 (*in thousands):

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The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has used Level3 inputs to determine fair value as of* September 30, 2025 (*in thousands):

The fair values of the Company’s financial instruments that arenot required to be measured or reported at fair value were as follows at* September 30, 2025and December**31,* 2024 (in thousands):

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For cash and cash equivalents, accrued interest receivable, investment in FHLB stock, bank-owned life insurance, accrued interest payable, FHLB short term borrowings, and advances from borrowers for taxes and insurance, the carrying value is a reasonable estimate of the fair value and are considered Level1 measurements.

Note12 – Operating Segments

ASC Topic820* – Segment Reporting* identifies operating segments as components of an enterprise which are evaluated regularly by the Company’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company has applied the aggregation criterion set forth in this codification to the results of its operations. The Company's operations currently consist oftwo reportable operating segments: Banking and Oakmont Commercial. The Company offers different products and services through itstwo 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 difference between interest earned on interest earning assets and interest paid on interest bearing liabilities less provision for credit losses. The provision for credit losses is almost entirely dependent on changes in the Banking Segment's loan portfolio and management’s assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. The profitability of this segment’s operations also depends on the 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 Abstract, LLC, and Quaint Oak Insurance Agency, LLC, which are included in the Banking Segment for segment reporting purposes as the operating results are monitored by the Chief Operating Decision Maker collectively. The Banking Segment is also subject to an extensive system of laws and regulations that 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 credit losses, loans and investments, and rates of interest that can be charged on loans. For segment reporting purposes, Quaint Oak Bancorp, Inc. is included as part of the Company’s Banking segment.

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Note12 – Operating Segments (Continued)

The Oakmont Commercial Segment originates commercial real estate loans which are sold into the secondary market along with the loans’ servicing rights. The profitability of this segment’s operations depends primarily on the gains realized from the sale of loans and processing fees. The Oakmont Commercial Segment is also subject to an extensive system of laws and regulations that are intended primarily for the protection of consumers.

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

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Note12 – Operating Segments (Continued)

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