QNTO 10-K & 10-Q changes, risk factors and insider trading

Liquidity is essential to the Company’s business. The Company’s primary funding source is consumer deposits, a substantial portion of which consist of certificates of deposit. As of December 31, 2024,2025, approximately 51.1%61.3% of our total deposits were comprised of certificates of deposit. As noted above, the Company has identified one major interest-bearing checking account deposit customer located in Puerto Rico and one major money market deposit customer located in Memphis, Tennessee, that accounted for approximately 8.6% and 18.1%, respectively,5.9% of total deposits at December 31, 2024.2025. The combined outstanding balances of the two major deposit customerscustomer totaled approximately $147.8$35.0 million at December 31, 2024.2025. The amount of uninsured deposits (deposits greater than $250,000) was approximately $156.3$244.3 million, or 28.3%40.9% of total deposits at December 31, 2024.2025. If these deposits were to be withdrawn in whole or in part, replacement of the funds may require us to pay higher interest rates on retail deposits or brokered deposits which would have an adverse effect on our net interest income and net income. If the Bank is less than well capitalized, the Federal Deposit Insurance Act restricts the Bank from accepting brokered deposits absent a waiver from the FDIC. The replacement of these deposits with other sources of funding, such as borrowings, could also increase our overall cost of funds and would negatively impact our results of operations. The Company has significant borrowing capacity available to fund liquidity needs, including borrowing agreements with the Federal Home Loan Bank of Pittsburgh (the “FHLB”) and the Federal Reserve Bank of Philadelphia. As of December 31, 2024,2025, we had $266.6$269.3 million in borrowing capacity from the FHLB and $15.8$24.2 million in borrowing capacity with the Federal Reserve Bank of Philadelphia.

We provide correspondent banking services to our international correspondent bank partners, which includesmay include facilitating U.S. dollar payments and providing other financial services infrastructure. Recently, federal bank regulators have increasingly focused on the risks related to international correspondent banking partnerships, raising concerns regarding risk management, oversight, internal controls, information security, change management, and information technology operational resilience. We could be subject to additional regulatory scrutiny with respect to our correspondent banking business that could have a material adverse effect on the business, financial condition, results of operations and growth prospects of the Company.

Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. The inflationary outlook in the United States remains uncertain. The consumer price index increased 2.9%2.7% for the twelve (12) months ended December 31, 2024.2025. While this is a significant reduction to the rate of inflation experienced in the past year, it is still above the FRB’s targeted rate. The risks to our business from inflation depend on the durability of the inflationary pressures in our markets. Although the FRB has reduced the federal fund rate twicethree times in 2024,2025, no assurance can be given that it will continue to do so. The resurgence of elevated levels of inflation could lead the FRB to cease reducing its benchmark rate or potentially starting to increase it again which could, in turn, increase the borrowings costs of our customers, making it more difficult for them to repay their loans or other obligations. Elevated interest rates may be needed to tame inflationary price pressures, which could also push down asset prices, including collateral values, and weaken economic activity.

As of December 31, 2024,2025, our total commercial investor real estate loans, including loans secured by apartment buildings, commercial real estate, and construction and land loans represented 241.9%235.9% of the Bank’s total risk-based capital and the growth in the commercial real estate portfolio exceeded 50% over the preceding 36 months.capital. The particular focus of the guidance is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution). The purpose of the guidance is to guide institutions in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. Management has established a commercial real estate lending framework to monitor specific exposures and limits by types within the commercial real estate portfolio and takes appropriate actions, as necessary. While we believe we have implemented policies and procedures with respect to our commercial real estate loan portfolio consistent with this guidance, the FDIC, the Bank’s primary federal regulator, could require us to implement additional policies and procedures pursuant to their interpretation of the guidance that may result in additional costs to us. In addition, if the FDIC were to impose restrictions on the amount of commercial real estate loans we can hold in our portfolio, our earnings would be adversely affected.

At MarchJune 31,30, 2026 the Bank has five 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 2012 and 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 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 nationwide specialty commercial real estate financing company.

The Company’s critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of MarchJune 31,30, 2026 have remained unchanged from the disclosures presented in our Annual Report on Form 10-K.

Comparison of Financial Condition at MarchJune 31,30, 2026 and December 31, 2025

General. The Company’s total assets at MarchJune 31,30, 2026 were $643.2$630.3 million, a decrease of $32.6$45.5 million, or 4.8%,6.7%, from $675.9 million at December 31, 2025. This decrease in total assets was primarily due to a $14.3$21.3 million, or 2.6%,34.9%, decrease in loans held for sale, a $19.3 million, or 3.6%, decrease in loans receivable, net of allowance for credit losses, and a $9.1$5.3 million, or 14.9%, decrease in loans held for sale, and an $8.9 million, or 16.6%,9.9%, decrease in cash and cash equivalents.

Cash and Cash Equivalents. Cash and cash equivalents decreased $8.9$5.3 million, or 16.6%,9.9%, from $53.5 million at December 31, 2025 to $44.7$48.3 million at MarchJune 31,30, 2026, asdue excessto reduced liquidity was used to fund loans.needs.

Investment Securitiesin AvailableInterest-Earning forTime Sale.Deposits. Investment securitiesin availableinterest-earning fortime saledeposits decreasedincrease $154,000,$100,000, or 17.5%,11.0%, from $882,000$912,000 at December 31, 2025 to $728,000$1.0 million at MarchJune 31,30, 2026,2026 due primarily to thea principalpurchase repayments onof these securities during the threesix months ended MarchJune 31,30, 2026.

Loans Held for Sale. Loans held for sale decreased $9.1$21.3 million, or 14.9%,34.9%, from $61.0 million at December 31, 2025 to $51.9$39.7 million at MarchJune 31,30, 2026 as the Bank’s commercial real estate subsidiary, Oakmont Commercial, LLC, originated $14.3$28.2 million of commercial real estate loans during the threesix months ended MarchJune 31,30, 2026 and sold $21.1$47.6 million of loans in the secondary market during this same period. The Bank’s mortgage banking subsidiary, Quaint Oak Mortgage, LLC, originated $19.4$48.9 million of one-to-four family residential loans during the threesix months ended MarchJune 31,30, 2026 and sold $20.5$49.2 million of loans in the secondary market. During the threesix months ended MarchJune 31,30, 2026, the Bank originated $10.4$16.4 million of SBA loans and sold $9.8$16.2 million of SBA loans in the secondary market during the same period. Due to the timing of disbursements, SBA loans may or may not be classified as held for sale at origination. As of MarchDecember 31, 2026,2025, the Bank reclassified $1.8 million of undisbursed SBA loans out of loans held for sale into the portfolio of loans receivable.

Loans Receivable, Net. Loans receivable, net, decreased $14.3$19.3 million, or 2.6%,3.6%, to $526.4$521.4 million at MarchJune 31,30, 2026 from $540.7 million December 31, 2025. The largest decreases within the loan portfolio occurred in commercial business loansloans, which decreased $5.9$12.7 million, or 6.1%,13.2%, constructioncommercial loansreal estate loans, which decreased $5.4$6.5 million, or 23.1%,2.1%, multi-family residential loansloans, which decreased $3.8$4.6 million, or 9.4%, home equity loans which decreased $429,000, or 8.0%, and11.2%, one-to-four family non-owner occupied loansloans, which decreased $191,000,$1.6 million, or 0.7%.5.5%, and home equity loans, which decreased $349,000, or 6.5%. Partially offsetting these decreases were increases in one-to-four family owner occupied loans whichof increased$2.0 $873,000,million, or 4.8%, and commercialconstruction realloans estateof loans,$4.7 which increased $763,000million, or 0.2%.20.0%.

The commercial real estate and multi-family portfolioportfolios consistsconsist of 68%61% owner occupied commercial real estate loans and 32% of39% non-owner occupied commercial real estate and multi-family loans as of MarchJune 31,30, 2026.

The following table summarizes the non-owner occupied multi-family and commercial real estate portfolioportfolios and the percent of total loans receivable, net.

The following table summarizes the non-owner occupied multi-family and commercial real estate rental and leasing loan portfolio outstanding balance, total collateral and loan to value (“LTV”) ratio by geographic location:

The following table summarizes the non-owner occupied multi-family and commercial real estate construction loan portfolio outstanding balance, total collateral and LTV ratio by geographic location:

Deposits. Total deposits decreased $31.9$46.5 million, or 5.3%,7.8%, to $565.4$550.8 million at MarchJune 31,30, 2026 from $597.3 million at December 31, 2025.2025, Thisdue to the change in amortized debt issuance costs. The decrease in deposits was primarily attributable to a decrease of $24.7$28.4 million, or 23.3%,26.8%, in interest bearinginterest-bearing checking accounts, a decrease of $4.6$24.4 million, or 7.0%, in non-interest bearing checking accounts, a decrease of $5.5 million, or 1.5%,6.9%, in certificates of deposit, a decrease of $1.6 million, or 2.4%, in non-interest-bearing checking accounts, and a $119,000,$183,000, or 17.0%,26.2%, decrease in savings accounts. These decreases in deposits were partially offset by an increase of $3.0$8.1 million, or 4.2%,11.5%, in money market accounts. Both retail and non-retail interest-bearing checking account balances decreased at MarchJune 31,30, 2026, compared to December 31, 2025, inprimarily response toreflecting increased competition for such deposits.

The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was $244.1$227.3 million, or 45.2%41.3% of total deposits at MarchJune 31,30, 2026.

Senior debt. Senior debt, net of unamortized debt issuance costs, increased $44,000$88,000 to $9.7 million at MarchJune 31,30, 2026 from $9.6 million at December 31, 2025.2025, due to the change in unamortized debt issuance costs. The Company entered into a Senior Unsecured Note Purchase Agreement as of February 21, 2025 with certain institutional accredited investors pursuant to which the Company issued an aggregate of $9.75 million in aggregate principal amount of Fixed Rate Unsecured Senior Notes due March 1, 2028 (the “Senior Debt Notes”) in a private placement. The Company issued to an accredited individual investor an additional $250,000 in principal amount of the Senior Debt Notes as of March 4, 2025 for a total of $10.0 million in aggregate principal amount. The Senior Debt Notes bear interest at a fixed annual rate of 11.00%, payable semi-annually in arrears on March 1 and September 1 of each year, beginning September 1, 2025. The maturity date of the Senior Debt Notes is March 1, 2028.

Subordinated debt. Subordinated debt remained attotaled $8.0 million at Marchboth 31,June 2026,30, from2026 and December 31, 2025. The $8.0 million of subordinated debt matures on December 31, 2028.

Stockholders’ Equity. Total stockholders’ equity increased $171,000,$644,000, or 0.3%,1.2%, to $52.5$53.0 million at MarchJune 31,30, 2026 from $52.3 million at December 31, 2025. Contributing to the increase was net income for the threesix months ended MarchJune 31,30, 2026 of $166,000,$647,000, amortization of stock awards and options under our stock compensation plans of $79,000,$151,000, issuance of treasury stock for exercised stock options of $33,000,$67,000, and the reissuance of treasury stock under the Bank’s 401(k) Plan of $10,000.$22,000. The increase in stockholders’ equity was partially offset by dividends paid of $105,000,$210,000, purchase of treasury stock of $11,000,$31,000, and other comprehensive loss, net of $1,000.$2,000.

Asset Quality. Non-performing loans at MarchJune 31,30, 2026 totaled $9.9$9.8 million, or 1.87%,1.88%, of total loans receivable, net of allowance for credit losses, consisting of $9.1$8.4 million of loans on non-accrual status and $778,000$1.4 million of accruing loans 90-days or more delinquent. Non-accrual loans consist of threetwo one-to-four family residential owner occupied loans, 18 commercial real estate loans, and 1922 commercial business loans. Included in the 1922 commercial business loans is one pool of equipment loans. Accruing loans 90-days or more past due include fourone commercial real estate loan and two commercial business loans. All non-performing loans are either well-collateralized or adequately reserved for. During the six month period ended MarchJune 31,30, 2026, two10 commercial business loans totaling $49,000$392,000 that were previously on non-accrual were charged-off through the allowance for credit losses. Non-performing loans at December 31, 2025 totaled $7.3 million, or 1.36%, of total loans receivable, net of allowance for credit losses, consisting of $5.8 million of loans on non-accrual status and $1.5 million of accruing loans 90-days or more delinquent. Non-accrual loans consisted of two one-to-four family residential owner occupied loans, 14 commercial real estate loans, and 15 commercial business loans. Included in the 15 commercial business loans is one pool of equipment loans. Accruing loans 90-days or more past due includeincluded one one-to-four family residential owner occupied loan, one one-to-four family residential non-owner occupied loan, one commercial real estate loan, and one commercial business loan. During the year ended December 31, 2025, one commercial real estate loan,loan and 11 commercial business loans totaling $1.6 million that were previously on non-accrual were charged-off through the allowance for credit losses.

Comparison of Operating Results for the Three Months Ended MarchJune 31,30, 2026 and 2025

General. Net income amounted to $166,000$481,000 for the three months ended MarchJune 31,30, 2026, an increase of $249,000,$209,000, or 300.0%,76.8%, compared to net lossincome of $83,000$272,000 for the three months ended MarchJune 31,30, 2025. The increase in net income onover athe comparativecomparable quarterly basisperiod was primarily the result of a decrease in interest expense of $580,000,$760,000 and an increase in non-interest income of $361,000, partially offset by a decrease in interest and dividend income of $694,000, an increase in non-interest expense of $112,000, a net decreaseincrease in the provision for credit losses of $345,000,$63,000, and an increase in non-interest income of $53,000, partially offset by an increase in non-interest expense of $580,000, an increase in the provision for income taxes of $118,000, and a decrease in interest and dividend income of $31,000.$43,000.

Net Interest Income. Net interest income increased $549,000,$66,000, or 13.2%1.5% to $4.7$4.6 million for the three months ended MarchJune 31,30, 2026 from $4.1$4.5 million for the three months ended MarchJune 31,30, 2025. The increase was driven by a $580,000,$760,000, or 10.0%,13.4%, decrease in interest expense, andpartially offset by a $31,000,$694,000, or 0.3%,6.8%, decrease in interest and dividend income.

Interest and Dividend Income. The $31,000,$694,000, or 0.3%,6.8%, decrease in interest and dividend income for the quarterthree months ended June 30, 2026 was primarily due to a 205$17.3 million decrease in the average balance of loans receivable, which decreased from $589.4 million for the three months ended June 30, 2025 to $572.1 million for the three months ended June 30, 2026 and had the effect of decreasing interest income by $284,000, and a 203 basis point decrease in the average yield on due from banks – interest earning, which decreased from 3.78%4.21% for the three months ended MarchJune 31,30, 2025 to 1.73%2.18% for the three months ended MarchJune 31,30, 2026 and had the effect of decreasing interest income $263,000.$258,000. Also contributing to the decrease in interest income was a 15 basis point decrease in the average yield on loans receivable, which decreased from 6.58% for the three months ended June 30, 2025 to 6.43% for the three months ended June 30, 2026 and had the effect of decreasing interest income $210,000. Partially offsetting the decrease in interest and dividend income was a $14.1$14.0 million increase in the average balance of due from banks – interest earning, which increased from $37.1$37.7 million for the three months ended MarchJune 31,30, 2025 to $51.2$50.8 million for the three months ended MarchJune 31,30, 2026, and had the effect of increasing interest income $134,000, and a $5.2 million increase in the average balance of loans held for sale and loans receivable, net, which increased from $588.7 million at March 31, 2025 to $593.8 million at March 31, 2026 and had the effect of increasing interest income $84,000.$147,000.

Interest Expense. The $580,000,$760,000, or 10.0%,13.4%, decrease in interest expense for the three months ended MarchJune 31,30, 2026 over the comparable period in 2025 was driven by ana $87.1$648,000, or 100.0%, decrease in interest expense on Federal Home Loan Bank (“FHLB”) borrowings, which was attributable to a decrease in the average balance of FHLB borrowings which decreased from $56.3 million for the three months ended June 30, 2025, to none for the three months ended June 30, 2026, a $70.6 million decrease in the average balance of money market deposits which decreased from $159.4$142.9 million for the three months ended MarchJune 31,30, 2025 to $72.3 million for the three months ended MarchJune 31,30, 2026 and had the effect of decreasing interest expense by $786,000,$627,000, a $484,000, or 100.0% decrease in interest expense on Federal Home Loan Bank borrowings, which was attributable to a decrease in the average balance of Federal Home Loan Bank borrowings which decreased from $45.0 million at March 31, 2025, to none at March 31, 2026, a $10.6 million decrease in the average balance of subordinated debt, which decreased from $18.6 million at March 31, 2025, to $8.0 million at March 31, 2026, and had the effect of decreasing interest expense by $258,000, a 2927 basis point decrease in the average rate of certificates of deposit from 4.22%4.27% atfor Marchthe 31,three months ended June 30, 2025 to 3.93%4.00% atfor Marchthe 31,three months ended June 30, 2026, which had the effect of decreasing interest expense by $256,000,$227,000, and a 125102 basis point decrease in the average rate of money markets from 3.61%3.56% atfor Marchthe 31,three months ended June 30, 2025 to 2.36%2.54% atfor Marchthe 31,three months ended June 30, 2026, which had the effect of decreasing interest expense by $226,000.$182,000. These decreases in interest expense were partially offset by a $72.5 million increase in the average balance of certificates of deposits which increased from $284.8 million at March 31, 2025 to $357.3 million at March 31, 2026 and had the effect of increasing interest expense by $765,000, a $54.7$57.9 million increase in the average balance of business checking accounts, which increased from $36.9$10.7 million atfor Marchthe 31,three months ended June 30, 2025, to $91.6$67.9 million atfor Marchthe 31,three months ended June 30, 2026 and had the effect of increasing interest expense by $427,000.$496,000, a $36.3 million increase in the average balance of certificates of deposit which increased from $305.8 million for the three months ended June 30, 2025 to $342.1 million for the three months ended June 30, 2026 and had the effect of increasing interest expense by $387,000. The average interest rate spread increaseddecreased from 2.13%2.19% for the three months ended MarchJune 31,30, 2025 to 2.26%2.14% for the three months ended MarchJune 31,30, 2026 and the net interest margin increased from 2.63%2.85% for the three months ended MarchJune 31,30, 2025 to 2.90%2.93% for the three months ended MarchJune 31,30, 2026. The decrease in average balances of interest-bearing deposits was a result of a decrease in funding needs related to increased loan sales.

Provision for Credit Losses. The $345,000,$63,000, or 78.2%,14.4%, net decreaseincrease in the provision for credit losses for the three months ended MarchJune 31,30, 2026 over the threecomparable monthsperiod ended March 31,in 2025 was primarily due to aan decrease in charge-offs and a decreaseincrease in the commercialbalance businessof loanindividually balances,evaluated loans and their associated reserve during the three months ended March 31, 2026.period.

Non-Interest Expense. The $580,000,$112,000, or 10.5%,2.0%, increase in non-interest expense for the three months ended MarchJune 31,30, 2026 over the comparable period in 2025 was primarily due to a $349,000,$182,000, or 9.6%,5.0%, increase in salaries and employee benefits expense, a $126,000,$119,000, or 56.5%68.4%, increase in professional fees, a $101,000,$40,000, or 46.1%,14.3%, increase in softwareother asexpense, and a service (“SaaS”) subscription expense, a $44,000,$16,000, or 36.4%,11.9%, increase in FDIC deposit insurance assessment, and a $29,000, or 9.0% increase in other expense.assessment. These increases in non-interest expense were partially offset by a $63,000,$119,000, or 15.7%,27.1%, decrease in data processing expense, anda an $8,000,$75,000, or 8.1%,115.4%, decrease in directors’ fees and expenses, a $39,000, or 9.0% decrease in occupancy and equipment expenses, a $9,000, or 9.0%, decrease in advertising expense. The increase in salaries and employee benefits expense was primarily due to a $176,000 increase in salaries,expense, and a $149,000$3,000, increaseor 1.2%, decrease in bonussoftware expense due toas a voluntaryservice reduction(“SaaS”) insubscription discretionary incentive compensation driven by lower performance results in the first quarter of 2025.expense. The increase in professional fees during thisthe quarter was primarily due to international correspondent banking compliance related activities as the Bank is continuing to build out this line of business. The increasedecrease in SaaSdirectors’ subscriptionfees expenseand expenses reflects thea phasedone-time implementationadjustment andbased expandedon utilizationa reassessment of third-partythe softwaredirector solutionsfee supportingaccrual compliance,at riskJune management,30, and operational infrastructure, partially offset by reductions in traditional data processing costs.2026.

Provision for Income Tax. The provision for income tax from continuing operations increased $118,000$43,000 from $2,000$210,000 for the three months ended MarchJune 31,30, 2025 to $120,000$253,000 for the three months ended MarchJune 31,30, 20262026, primarily due primarily to an increase in pre-tax income.

Our Oakmont Commercial, LLCBanking Segment reported a pre-tax segment profitloss (“PTSPPTSL”) for the three months ended MarchJune 31,30, 2026 of $774,000,$232,000, a $220,000, or 39.7%,$239,000 increase in PTSL from the same period in 2025. TheThis increase in PTSPPTSL was primarily due to a $113,000,$336,000, or 15.8%,21.6%, increasedecrease in non-interest income, a $74,000,$63,000, or 29.4%,14.4%, increase in the provision for credit losses, and a $27,000, or 0.5%, increase in non-interest expense. This increase in PTSL was partially offset by a $244,000, or 5.9%, increase in net interest income,income. and a $33,000, or 8.0%,The decrease in non-interest expense. The increase in non-interest income wasis primarily dueattributable to a $106,000$145,000, increaseor 22.0%, decrease in the net gain on sale of mortgage loans, a $127,000 decrease in other fees and service charges.charges, net, a $97,000, or 19.0%, decrease in gain on sale of SBA loans, and an $86,000, or 30.7%, decrease in mortgage banking and title abstract fees, partially offset by a $136,000 increase in net loan servicing income. The decreaseincrease in non-interest expense was primarily due to a $39,000,$119,000, or 10.3%,74.8%, decreaseincrease in professional fees expense, and a $115,000, or 3.4%, increase in salaries and employee benefits expense, partially offset by a $6,000,$119,000, or 60.0%,27.1%, increasedecrease in otherdata non-interestprocessing expense.expense and a $75,000, or 115.4%, decrease in directors’ fees and expenses.

The 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. Borrowings may also be used on a short-term basis to compensate for reductions in the availability of funds from other sources and on a longer-term basis for general business purposes. In addition, the Company invests excess funds in short-term interest-earning assets that provide additional liquidity. At MarchJune 31,30, 2026, the Company's cash and cash equivalents amounted to $44.7$48.3 million.

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 MarchJune 31,30, 2026, Quaint Oak Bank had outstanding commitments to originate loans of $23.3$12.3 million, commitments under unused lines of credit of $44.5$42.1 million, and $1.1$1.0 million under standby letters of credit.

At MarchJune 31,30, 2026, certificates of deposit scheduled to mature in one year or less totaled $246.9$233.9 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 MarchJune 31,30, 2026, we had no outstanding borrowings from the FHLB and had $228.9$215.3 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 FHLB stock as collateral for such advances. In addition, as of MarchJune 31,30, 2026, Quaint Oak Bank had $23.4 million in borrowing capacity with the Federal Reserve Bank of Philadelphia. We also use brokered deposits as a funding source. As of MarchJune 31,30, 2026, the Company had $72.9$85.2 million of brokered deposits, $25.1$35.1 million of which were sourced from one brokered interest-bearing checking account deposit relationship.

The Company identified one major interest bearing brokered checking deposit customer that accounted for approximately 6.2%6.4% of total deposits at MarchJune 31,30, 2026. The outstanding balance of the major deposit customers’ interest bearing brokered checking account totaled approximately $35.1 million at MarchJune 31,30, 2026. If these deposits were to be withdrawn in whole or in part, replacement of the funds may require us to pay higher interest rates on retail deposits or brokered deposits which would have an adverse effect on our net interest income and net income. The replacement of these deposits with other sources of funding such as borrowings could also increase our overall cost of funds and would negatively impact our results of operations. The Company has significant borrowing capacity available to fund liquidity needs, including borrowing agreements with the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia described above.

The following table summarizes the Company's primary and secondary sources of liquidity which were available at MarchJune 31,30, 2026 (dollars in thousands).

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 MarchJune 31,30, 2026, Quaint Oak Bank exceeded each of its capital requirements with ratios of 10.45%,10.91%, 13.06%,13.60%, 13.06%13.60% and 14.31%,14.85%, respectively. As a small savings and loan holding company eligible for exemption, the Company is not currently subject to any regulatory capital requirements.