QNTO Company Profile

Quaint Oak Banks primary business consists of attracting deposits from the general public through a variety of deposit programs and investing such deposits principally in residential, commercial real estate, construction loans, multi-family, home equity loans and commercial lines of credit secured by property in our market area. To a lesser extent, the Bank also invests in commercial business loans and other consumer loans. In addition, Quaint Oak Bank offers mortgage banking, real estate sales and title abstract services through its subsidiary companies. Quaint Oak Bank serves its customers through its offices as well as through correspondence, telephone and on-line banking.

Deposits with Quaint Oak Bank are insured to the maximum extent provided by law through the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation ("FDIC"). Quaint Oak Bank is subject to examination and comprehensive regulation by the FDIC and the Pennsylvania Department of Banking. Quaint Oak Bancorp, which elected to be treated as a savings and loan holding company, is subject to examination and regulation by the Board of Governors of the Federal Reserve System ("Federal Reserve Board"). Quaint Oak Bank is also a member of the Federal Home Loan Bank of Pittsburgh ("FHLB of Pittsburgh" or "FHLB"), which is one of the 12 regional banks comprising the Federal Home Loan Bank System ("FHLB System"). Quaint Oak Bank is also subject to regulations of the Federal Reserve Board governing reserves required to be maintained against deposits and certain other matters.

The types of loans that Quaint Oak Bank may originate are subject to federal and state laws and regulations. Interest rates charged on loans are affected principally by the demand for such loans, the supply of money available for lending purposes and the rates offered by our competitors. These factors are, in turn, affected by general and economic conditions, the monetary policy of the federal government, including the Federal Reserve Board, legislative and tax policies, and governmental budgetary matters.

The lending activities of Quaint Oak Bank are subject to the written underwriting standards and loan origination procedures established by the board of directors and management. New loans are generated primarily through the efforts of Quaint Oak Banks loan officers, referrals from brokers and existing customers. Loan applications are underwritten and processed by Quaint Oak Banks credit administration department.

All loans are presented to the loan committee for review. Quaint Oak Banks loan approval process is intended to assess the borrowers ability to repay the loan, the viability of the loan and the value of the property that will secure the loan. Individual loans and loan relationships over $1.0 million must be approved by Quaint Oak Banks loan committee, which currently consists of our President and Chief Executive Officer, Chairman of the Board, two other members of the Board of Directors, and three other officers of Quaint Oak Bank.