**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**


(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF 1934





For
      the
      quarterly period ended June
      30, 2007


OR





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT





For
      the
      transition period from ____________ to _______________





Commission
      File Number ***:*** 000-52964





**QUAINT
      OAK BANCORP, INC.**


(Exact
      name of small business issuer as specified in its charter)





Pennsylvania
            
            35-2293957(State
                or other jurisdiction of
            
            (IRS
                Employer Identification No.)incorporation
                or organization)





607
      Lakeside Drive, Southampton, Pennsylvania 18966


(Address
      of principal executive offices)





(215)
      364-4059


(Issuer’s
      telephone number)







(Former
      name, former address and former fiscal year, if changed since last
      report)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days. Yes 
o No x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act) Yes o No
x





**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





State
      the
      number of shares outstanding of each of the issuer's classes of common stock,
      as
      of the latest practicable date: As of July 31, 2007, 1,388,625 shares of the
      Issuer's common stock were issued and outstanding.





Transitional
      Small Business Disclosure Format: Yes o No
x











**INDEX**





PagePART I
            -
            FINANCIAL
                INFORMATIONItem 1:
            
            Financial
                Statements (Unaudited)
            1Item 2:
            
            Management’s
                Discussion and Analysis or Plan of Operation
            7Item 3:
            
            Controls
                and Procedures
            14PART II
            -
            OTHER
                INFORMATIONItem 1:
            
            Legal
                Proceedings
            15Item 2:
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            15Item 3:
            
            Defaults
                upon Senior Securities
            15Item 4:
            
            Submission
                of Matters to a Vote of Security Holders
            15Item 5:
            
            Other
                information
            15Item 6:
            
            Exhibits
            16SIGNATURES














**PART
      I**





**ITEM
      1. FINANCIAL STATEMENTS**





Quaint
      Oak Bancorp, Inc., a Pennsylvania corporation, was formed in connection with
      the
      conversion of Quaint Oak Savings Bank (the "Bank"), from the mutual to the
      stock
      form of organization. On July 3, 2007 Quaint Oak Savings Bank completed its
      conversion from a Pennsylvania chartered mutual savings bank to a Pennsylvania
      chartered stock savings bank and changed its name to Quaint Oak Bank, concurrent
      with the Quaint Oak Bancorp stock offering. Upon completion of the conversion
      and the offering, all of Quaint Oak Bank's stock is owned by Quaint Oak Bancorp,
      and all of Quaint Oak Bancorp's stock is, in turn, owned by the public. In
      connection with the conversion and offering, the Company sold 1,388,625 shares
      of its common stock, raising $13,886,250 of gross proceeds and contributed
      $7.1
      million of equity to the Bank, which is not recognized in the financial
      statements included in this Form 10-QSB because the conversion and offering
      was
      not completed until after June 30, 2007. The balance of the proceeds was
      retained by Quaint Oak Bancorp for future capital needs. At June 30, 2007,
      the
      registrant was in organization, had engaged in no operations and had not issued
      any shares of stock; accordingly, no financial statements of the Company have
      been included herein.








1




***Quaint
      Oak Savings Bank***





**Balance
      Sheets (Unaudited)**




At
                June 30,
            
            At
                December 31,2007
            
            2006**ASSETS**
            
            (In
                Thousands)Cash
                and cash equivalents
            
            $
            2,026
            
            $
            4,197Investment
                in interest-earning time deposits
            
            
            1,571
            
            
            1,711Investment
                in FHLB stock, at cost
            
            
            253
            
            
            263Loans
                receivable, net of allowance for loan lossesJune
                30, 2007: $592; December 31, 2006: $575
            
            
            56,230
            
            
            54,553Bank
                premises and equipment, net
            
            
            43
            
            
            46Accrued
                interest receivable and other assets
            
            
            772
            
            
            436**Total
                Assets**
            
            $
            60,895
            
            $
            61,206**LIABILITIES
                AND RETAINED EARNINGS****LIABILITIES**Deposits,
                interest-bearing
            
            $
            55,250
            
            $
            55,750Advances
                from borrowers for taxes and insurance
            
            
            623
            
            
            587Accrued
                interest payable and other liabilities
            
            
            113
            
            
            132**Total
                Liabilities**
            
            
            55,986
            
            
            56,469**RETAINED
                EARNINGS**
            
            
            4,909
            
            
            4,737**Total
                Liabilities and Retained Earnings**
            
            $
            60,895
            
            $
            61,206





*See
        accompanying notes to financial statements.*


2





***Quaint
        Oak Savings Bank***
 
 **Statements
        of Income**




For
                the Three
            
            For
                the SixMonths
                Ended
            
            Months
                EndedJune
                30,
            
            June
                30,2007
            
            2006
            
            2007
            
            2006(Unaudited)
            
            (Unaudited)**Interest
                Income**
            
            (In
                Thousands)Loans
                receivable, including fees
            
            $
            934
            
            $
            956
            
            $
            1,876
            
            $
            1,826Interest-earning
                deposits
            
            
            67
            
            
            29
            
            
            143
            
            
            63Dividends
            
            
            4
            
            
            4
            
            
            7
            
            
            6Total
                Interest Income
            
            
            1,005
            
            
            989
            
            
            2,026
            
            
            1,895**Interest
                Expense**Deposits
            
            
            597
            
            
            479
            
            
            1,181
            
            
            928Short-term
                borrowings
            
            
            --
            
            
            33
            
            
            --
            
            
            38**Total
                Interest Expense**
            
            
            597
            
            
            512
            
            
            1,181
            
            
            966**Net
                Interest Income**
            
            
            408
            
            
            477
            
            
            845
            
            
            929**Provision
                for Loan Losses**
            
            
            28
            
            
            36
            
            
            18
            
            
            72**Net
                Interest Income after Provision for Loan****Losses**
            
            
            380
            
            
            441
            
            
            827
            
            
            857**Non-Interest
                Income - Fees and service charges**
            
            
            9
            
            
            9
            
            
            17
            
            
            11**Non-Interest
                Expense**Salaries
                and employee benefits
            
            
            176
            
            
            104
            
            
            333
            
            
            210Directors'
                fees and expenses
            
            
            42
            
            
            35
            
            
            80
            
            
            69Occupancy
                and equipment
            
            
            20
            
            
            12
            
            
            39
            
            
            25Professional
                fees
            
            
            18
            
            
            10
            
            
            43
            
            
            21Other
            
            
            34
            
            
            33
            
            
            68
            
            
            67**Total
                Non-Interest Expense**
            
            
            290
            
            
            194
            
            
            563
            
            
            392**Income
                before Income Taxes**
            
            
            99
            
            
            256
            
            
            281
            
            
            476**Income
                Taxes**
            
            
            38
            
            
            99
            
            
            109
            
            
            184**Net
                Income**
            
            $
            61
            
            $
            157
            
            $
            172
            
            $
            292





*See
      accompanying* *notes
      to financial statements.*


3
  ***Quaint
        Oak Savings Bank***
 
 **Statements
        of Cash Flows**


Six
                Months EndedJune
                30,2007
            
            2006(Unaudited)
            
            (Unaudited)**Cash
                Flows from Operating Activities**
            
            (In
                Thousands)Net
                Income
            
            $
            172
            
            $
            292Adjustments
                to reconcile net income to net cash provided byoperating
                activities:Provision
                for loan losses
            
            
            18
            
            
            72Depreciation
                expense
            
            
            7
            
            
            5Increase
                in accrued interest receivable and other assets
            
            
            (336
            )
            
            (37
            )Decrease
                in accrued interest payable and other liabilities
            
            
            (19
            )
            
            (49
            )**Net
                Cash (Used in) Provided by Operating Activities**
            
            
            (158
            )
            
            283**Cash
                Flows from Investing Activities**Net
                decrease in investment in interest-earning time deposits
            
            
            140
            
            
            253Purchase
                of property and equipment
            
            
            (4
            )
            
            -Net
                (increase) decrease in Federal Home Loan Bank stock
            
            
            10
            
            
            (104
            )Net
                increase in loans receivable
            
            
            (1,695
            )
            
            (4,224
            )**Net
                Cash Used in Investing Activities**
            
            
            (1,549
            )
            
            (4,075
            )**Cash
                Flows from Financing Activities**Net
                increase (decrease) in deposits
            
            
            (500
            )
            
            1,100Increase
                in short-term borrowings
            
            
            -
            
            
            2,500Increase
                in advances from borrowers for taxes and insurance
            
            
            36
            
            
            76**Net
                Cash (Used in) Provided by Financing Activities**
            
            
            (464
            )
            
            3,676**Net
                Decrease in Cash and Cash Equivalents**
            
            
            (2,171
            )
            
            (116
            )**Cash
                and Cash Equivalents - Beginning**
            
            
            4,197
            
            
            1,791**Cash
                and Cash Equivalents - Ending**
            
            $
            2,026
            
            $
            1,675**Supplementary
                Cash Flows Information**Income
                taxes paid
            
            $
            197
            
            $
            238Interest
                paid
            
            $
            1,176
            
            $
            918




*See
        accompanying* *notes
        to financial statements.*


4




**Note
      1** **-
      Basis of Presentation**




On
      July
      3, 2007, Quaint Oak Savings Bank completed its conversion from a Pennsylvania
      chartered mutual savings bank to a Pennsylvania chartered stock savings bank
      and
      changed its name to Quaint Oak Bank (“Bank”). In connection with the conversion
      Quaint Oak Bank formed Quaint Oak Bancorp, Inc., a Pennsylvania chartered
      corporation (the "Company" or "Quaint Oak Bancorp"), which offered and sold
      1,388,625 shares of its common stock at a price of $10.00 per share to eligible
      depositors of the Bank. Upon completion of the conversion and the offering,
      all
      of Quaint Oak Bank's stock is owned by Quaint Oak Bancorp, and all of Quaint
      Oak
      Bancorp's stock is, in turn, owned by the public. The Company sold 1,388,625
      shares of its common stock, raising $13,886,250 of gross proceeds. Costs
      incurred in connection with the offering will be recorded as a reduction of
      the
      proceeds from the entire offering. At June 30, 2007, approximately $321,000
      of
      conversion costs had been incurred and deferred. The Company contributed
      approximately $7.1 million of the net proceeds to the Bank, which is not
      recognized in the financial statements included in this Form 10-QSB because
      the
      conversion and offering was not completed until after June 30, 2007. All
      remaining proceeds were retained by Quaint Oak Bancorp for future capital needs.
      Quaint Oak Bancorp, Inc. had not commenced operations as of June 30, 2007.
      Accordingly, these financial statements include the accounts of Quaint Oak
      Savings Bank only.





The
      accompanying unaudited financial statements have been prepared in conformity
      with accounting principles generally accepted in the United State of America
      (GAAP) for interim information and with the instructions to Form 10-QSB.
      Accordingly, they do not include all the information and footnotes required
      by
      GAAP for complete financial statements.




The
      foregoing 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,
      2006
      have 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 Savings Bank’s 2006 Financial Statements included
      in Quaint Oak Bancorp, Inc.’s Registration Statement on Form SB-2 ,
      as
      amended. The results of operations for the three months and six months ended
      June 30, 2007 are not necessarily indicative of the results that may be expected
      for the full year.




As
      of
      June 30, 2007, Quaint Oak Savings Bank (the "Bank") operated under a state
      bank
      charter as a mutual savings bank. Upon completion of the conversion and the
      offering, the Bank changed its name to Quaint Oak Bank and began to operate
      as a
      stock savings bank. The Bank is subject to regulation of the Pennsylvania
      Department of Banking and the Federal Deposit Insurance Corporation. Pursuant
      to
      the Bank’s election under Section 10(l) of the Home Owners’ Loan Act, the
      Company is a savings and loan holding company regulated by the Office of Thrift
      Supervision. The area served by the Bank is principally Bucks County,
      Pennsylvania. The principal deposit products offered by the Bank are passbook
      savings accounts, capital investment accounts, and certificates of deposit.
      Loan
      products offered are fixed and adjustable rate mortgages, home equity loans,
      and
      lines of credit.




**Note
      2 -** **New
      Accounting Standards**




In
      February 2006, the Financial Accounting Standards Board (FASB) issued Statement
      No. 155, “Accounting for Certain Hybrid Financial Instruments”. Statement No.
      155 amends FASB Statement No. 133 and FASB Statement No. 140, and improves
      the
      financial reporting of certain hybrid financial instruments by requiring more
      consistent accounting that eliminates exemptions and provides a means to
      simplify the accounting for these instruments. Specifically, Statement No. 155 allows financial instruments that have embedded
      derivatives to be accounted for as a whole (eliminating the need to bifurcate
      the derivative from its host) if the holder elects to account for the whole
      instrument on a fair value basis. Statement No. 155 is effective for all
      financial instruments acquired or issued after the beginning of an entity’s
      first fiscal year that begins after September 15, 2006. The Bank was required
      to
      adopt the provisions of Statement No. 155, as applicable, beginning in fiscal
      year 2007. The adoption of Statement No. 155 did not have any impact on the
      Bank’s financial position and results of operations.




5




In
      March
      2006, the FASB issued Statement No. 156, “Accounting for Servicing of Financial
      Assets - An Amendment of FASB Statement No. 140.” Statement No. 156 requires
      that all separately recognized servicing assets and servicing liabilities be
      initially measured at fair value, if practicable. The statement permits, but
      does not require, the subsequent measurement of servicing assets and servicing
      liabilities at fair value. Statement No. 156 is effective as of the beginning
      of
      an entity’s first fiscal year that begins after September 15, 2006, which for
      the Bank was the January 1, 2007. The adoption of Statement No. 156 did not
      have
      any effect on the Bank’s financial statements.




Effective
      January 1, 2007, the Bank adopted the provisions of FASB Interpretation No.
      48,
“Accounting for Uncertainty in Income Taxes”. The Interpretation provides
      clarification on the accounting for uncertainty in income taxes recognized
      in an
      enterprises financial statements in accordance with FASB Statement of Financial
      Accounting Standards No. 109, accounting for Income Taxes”. The Interpretation
      prescribes a recognition threshold and measurement attribute for financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. As a result of the Bank’s evaluation of the
      implementation of FIN 48, no significant income tax uncertainties were
      identified. Therefore, the Bank recognized no adjustment for unrecognized tax
      benefits during the six months ended June 30, 2007. Corporate tax returns for
      the years 2003 through 2006 remain open to examination by the taxing
      authorities.




In
      May
      2007, the FASB issued FAS Staff Position (“FSB”) FIN 48-1 “Definition of
      Settlement in FASB Interpretation No. 48 (FSP FIN 48-1). FSP FIN 48-1 provides
      guidance on how to determine whether a tax position is effectively settled
      for
      the purpose of recognizing previously unrecognized tax benefits. FSP FIN 48-1
      is
      effective retroactively to January 1, 2007. The implementation of this standard
      did not have a material impact on the Bank’s financial position or results of
      operations.




In
      September 2006, the FASB issued Statement No. 157, “Fair Value Measurements,”
which defines fair value, establishes a framework for measuring fair value
      under
      GAAP, and expands disclosures about fair value measurements. The new guidance
      is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007, and for interim periods within those fiscal years. Management
      is currently evaluating the potential impact, if any, of the adoption of FASB
      Statement No. 157 on the Bank’s financial position, results of operations and
      cash flows.




In
      February 2007, the FASB issued Statement No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities-Including an amendment of FASB
      Statement No. 115”. Statement No. 159 permits entities to choose to measure many
      financial instruments and certain other items at fair value. Unrealized gains
      and losses on items for which the fair value option has been elected will be
      recognized in earnings at each subsequent reporting date. Statement No. 159
      is
      effective for the Bank January 1, 2008. Management is evaluating the impact
      that
      the adoption of Statement No. 159 will have on the Bank’s financial
      statements.




6




**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





**Forward-Looking
      Statements**





We
      make
      certain statements in this document as to what we expect may happen in the
      future. These statements usually contain the words " believe, "  " estimate, "  " project, "  " expect, "  " anticipate, "  " intend " or
      similar expressions. Because these statements look to the future, they are
      based
      on our current expectations and beliefs. Actual results or events may differ
      materially from those reflected in the forward-looking statements. You should
      be
      aware that our current expectations and beliefs as to future events are subject
      to change at any time, and we can give you no assurances that the future events
      will actually occur.





**General**





The
      Company was formed in connection with the Bank’s conversion to a stock savings
      bank completed on July 3, 2007 and had not yet commenced operations as of June
      30, 2007. The Company’s results of operations initially will be primarily
      dependent on the results of the Bank, which is now a wholly owned subsidiary
      of
      the Company. The Bank’s results of operations depend, to a large extent, on net
      interest income, which is the difference between the income earned on its loan
      and investment portfolios and the cost of funds, consisting of the interest
      paid
      on deposits and borrowings. Results of operations are also affected by
      provisions for loan losses, fee income and other non-interest income and
      non-interest expense. Non-interest expense principally consists of compensation
      and employee benefits, directors’ fees and expenses, office occupancy and
      equipment expense, professional fees and other expenses. Our results of
      operations are also significantly affected by general economic and competitive
      conditions, particularly changes in interest rates, government policies and
      actions of regulatory authorities. Future changes in applicable law, regulations
      or government policies may materially impact our financial conditions and
      results of operations.





**Critical
      Accounting Policies**





The
      accounting and financial reporting policies of Quaint Oak conform to accounting
      principles generally accepted in the United States of America and to general
      practices within the banking industry. Accordingly, the financial statements
      require certain estimates, judgments, and assumptions, which are believed to
      be
      reasonable, based upon the information available. These estimates and
      assumptions affect the reported amounts of assets and liabilities at the date
      of
      the financial statements and the reported amounts of income and expenses during
      the periods presented. The following accounting policies comprise those that
      management believes are the most critical to aid in fully understanding and
      evaluating our reported financial results. These policies require numerous
      estimates or economic assumptions that may prove inaccurate or may be subject
      to
      variations which may significantly affect our reported results and financial
      condition for the period or in future periods.





*Allowance
      for Loan Losses* .
      The
      allowance for loan losses is established through a provision for loan losses
      charged to expense. Loans are charged against the allowance for loan losses
      when
      management believes that the collectibility of the principal is unlikely.
      Subsequent recoveries are added to the allowance. The allowance is an amount
      that management believes will cover known and inherent losses in the loan
      portfolio, based on evaluations of the collectibility of loans. The evaluations
      take into consideration such factors as changes in the types and
      amount  of
      loans
      in the loan portfolio, historical loss experience, adverse situations that
      may
      affect the borrower's ability to repay, estimated value of any underlying
      collateral, estimated losses relating to specifically identified loans, and
      current economic conditions. This evaluation is inherently subjective as it
      requires material estimates including, among others, exposure at default, the
      amount and timing of expected future cash flows on impaired loans, value of
      collateral, estimated losses on our commercial and residential loan portfolios
      and general amounts for historical loss experience. All of these estimates
      may
      be susceptible to significant change.




7




While
      management uses the best information available to make loan loss allowance
      evaluations, adjustments to the allowance may be necessary based on changes
      in
      economic and other conditions or changes in accounting guidance. Historically,
      our estimates of the allowance for loan losses have not required significant
      adjustments from management's initial estimates. In addition, the Pennsylvania
      Department of Banking and the Federal Deposit Insurance Corporation, as an
      integral part of their examination processes, periodically review our allowance
      for loan losses. The Pennsylvania Department of Banking and the Federal Deposit
      Insurance Corporation may require the recognition of adjustments to the
      allowance for loan losses based on their judgment of information available
      to
      them at the time of their examinations. To the extent that actual outcomes
      differ from management's estimates, additional provisions to the allowance
      for
      loan losses may be required that would adversely impact earnings in future
      periods.





*Income
      Taxes* .
      Deferred income tax assets and liabilities are determined using the liability
      (or balance sheet) method. Under this method, the net deferred tax asset or
      liability is determined based on the tax effects of the temporary differences
      between the book and tax bases of the various assets and liabilities and gives
      current recognition to changes in tax rates and laws. The realization of our
      deferred tax assets principally depends upon our achieving projected future
      taxable income. We may change our judgments regarding future profitability
      due
      to future market conditions and other factors. We may adjust our deferred tax
      asset balances if our judgments change.





**Comparison
      of Financial Condition at June 30, 2007 and December 31,
      2006**





Quaint
      Oak's total assets decreased $311,000 or 0.5% to $60.9 million at June 30,
      2007
      compared to $61.2 million at December 31, 2006. This decrease was due primarily
      to a decrease in cash and cash equivalents and investment in interest-earning
      time deposits offset by an increase in loans receivable, net of allowance for
      loan losses.





Loans
      receivable, net, increased $1.6 million or 3.1% to $56.2 million at June 30,
      2007 from $54.6 million at December 31, 2006. The increase was due primarily
      to
      a $1.9 million or 13.4% increase in commercial real estate loans and a $492,000
      or 13.9% increase in home equity loans, partially offset by a $621,000 or 2.0%
      decrease in one-to-four family residential loans. The decline in residential
      mortgages was primarily driven by a $1.5 million decrease in one-to-four family
      owner occupied loans offset by an $892,000 increase in one-to-four family
      non-owner occupied loans. The decrease in one-to-four family owner occupied
      loans is consistent with Quaint Oak's strategy of diversifying its loan
      portfolio into higher yielding commercial loans products.





Cash
      and
      cash equivalents decreased $2.2 million or 51.7% to $2.0 million at June 30,
      2007 compared to $4.2 million at December 31, 2006 as excess liquidity was
      used
      to fund loan growth.




Total
      deposits decreased $500,000 or 0.9% to $55.3 million at June 30, 2007 compared
      to $55.8 million at December 31, 2006. The decrease in interest-bearing deposits
      was primarily attributed to a $252,000 or 5.4% decrease in passbook savings
      accounts and a $336,000 or 9.3% decrease certificates of deposits, as management
      determined to control more costly deposit growth as a result of moderate loan
      demand.





Total
      equity increased $172,000 or 3.6% to $4.9 million at June 30, 2007 compared
      to
      $4.7 million at December 31, 2006, due solely to net income of $172,000 for
      the
      six months ended June 30, 2007.




8




**Comparison
      of Operating Results for the Three Months Ended June 30, 2007 and
      2006**





Net
      income amounted to $61,000 for the three months ended June 30, 2007, a decrease
      of $96,000 or 61.1% compared to net income of $157,000 for the three months
      ended June 30, 2006. The decline was primarily due to an increase in interest
      expense of $85,000 and an increase in non-interest expense of $96,000, offset
      by
      an increase in interest income of $16,000, a decrease in the provision for
      loan
      losses of $8,000 and a decrease in income taxes of $61,000.





Net
      interest income amounted to $408,000 for the three months ended June 30, 2007
      compared to $477,000 for the three months ended June 30, 2006. The $69,000
      or
      14.5% decrease was due primarily to an increase in expense on interest-bearing
      liabilities of $85,000 and a decrease in interest income on loans receivable
      of
      $22,000, offset by an increase in interest income on interest-earning deposits
      with other banks of $38,000.





The
      average interest rate spread declined from 2.98% for the three months ended
      June
      30, 2006 to 2.46% for the three months ended June 30, 2007 while average net
      interest-earning assets decreased from $4.2 million to $3.9 million for the
      same
      periods. Average interest-earning assets to average interest-bearing liabilities
      was 107.06% for the three months ended June 30, 2007 compared to 107.65% for
      the
      three months ended June 30, 2006. The decrease in the average interest rate
      spread reflects an increase in average rate paid on interest bearing liabilities
      from 3.75% for the three months ended June 30, 2006 to 4.31% for the three
      months ended June 30, 2007 offset by a slight increase in the average yield
      on
      interest-earning assets from 6.73% to 6.77% during the same periods. Net
      interest margin was 2.75% and 3.25% for the three months ended June 30, 2007
      and
      2006, respectively.





Interest
      income increased by $16,000 or 1.6% to $1.0 million for the three months ended
      June 30, 2007 compared to $989,000 for the three months ended June 30, 2006.
      The
      increase for the quarter was due primarily to the increase in the average
      balance of interest-earning deposits from $2.5 million for the three months
      ended June 30, 2006 to $4.4 million for the three months ended June 30, 2007,
      offset by decrease in the average balance of net loans receivable from $56.0
      million to $54.7 million for the same periods.





Interest
      expense increased by $85,000 or 16.6% to $597,000 for the three months ended
      June 30, 2007 compared to $512,000 for the three months ended June 30, 2006.
      The
      increase in interest expense resulted primarily from an increase in the average
      balance of interest-bearing deposits from $52.0 million to $55.4 million for
      the
      three months ended June 30, 2006 and June 30, 2007, respectively, and an
      increase in the average rate paid on deposits from 3.69% to 4.31% for the same
      periods. The increase in the average rate is reflective of the competition
      for
      deposits in a rising interest rate environment.





**Average
      Balances, Net Interest Income, and Yields Earned and Rates
      Paid.** The
      following table shows for the periods indicated the total dollar amount of
      interest from average interest-earning assets and the resulting yields, as
      well
      as the interest expense on average interest-bearing liabilities, expressed
      both
      in dollars and rates, and the net interest margin. All average balances are
      based on daily balances.




9






**Three
                Months Ended June 30,****2007**
            
            **2006****Average**
            
            
            
            
            
            **Average****Average**
            
            
            
            **Yield/**
            
            **Average**
            
            
            
            **Yield/****Balance**
            
            **Interest**
            
            **Rate**
            
            **Balance**
            
            **Interest**
            
            **Rate**Interest-earning
                assets:
            
            (Dollars
                in
                Thousands)Interest-earning
                deposits
            
            $
            4,401
            
            $
            67
            
            
            6.09
            %
            $
            2,459
            
            $
            29
            
            
            4.72
            %Loans
                receivable (1)
            
            
            54,697
            
            
            934
            
            
            6.83
            
            
            55,953
            
            
            956
            
            
            6.83Other
                interest-earning assets
            
            
            253
            
            
            4
            
            
            6.32
            
            
            346
            
            
            4
            
            
            4.62Total
                interest-earning assets
            
            
            59,351
            
            
            1,005
            
            
            6.77
            %
            
            58,758
            
            
            989
            
            
            6.73
            %Non-interest-earning
                assets
            
            
            1,696
            
            
            
            
            
            
            
            
            1,015Total
                assets
            
            $
            61,047
            
            
            
            
            
            
            
            $
            59,773Interest-bearing
                liabilities:Passbook
                accounts
            
            $
            4,502
            
            
            16
            
            
            1.42
            
            $
            6,432
            
            
            22
            
            
            1.37Statement
                savings accounts
            
            
            6,559
            
            
            45
            
            
            2.74
            
            
            7,242
            
            
            51
            
            
            2.82Certificate
                of deposit accounts
            
            
            44,375
            
            
            536
            
            
            4.83
            
            
            38,291
            
            
            406
            
            
            4.24Total
                deposits
            
            
            55,436
            
            
            597
            
            
            4.31
            
            
            51,965
            
            
            479
            
            
            3.69FHLB
                advances
            
            
            -
            
            
            -
            
            
            -
            
            
            2,616
            
            
            33
            
            
            5.05Total
                interest-bearing liabilities
            
            
            55,436
            
            
            597
            
            
            4.31
            %
            
            54,581
            
            
            512
            
            
            3.75
            %Non-interest-bearing
                liabilities
            
            
            704
            
            
            
            
            
            
            
            
            772Total
                liabilities
            
            
            56,140
            
            
            
            
            
            
            
            
            55,353Retained
                earnings
            
            
            4,907
            
            
            
            
            
            
            
            
            4,420Total
                liabilities and retained earnings
            
            $
            61,047
            
            
            
            
            
            
            
            $
            59,773Net
                interest-earning assets
            
            $
            3,915
            
            
            
            
            
            
            
            $
            4,177Net
                interest income; average interest rate spread
            
            
            
            
            $
            408
            
            
            2.46
            %
            
            
            
            $
            477
            
            
            2.98
            %Net
                interest margin (2)
            
            
            
            
            
            
            
            
            2.75
            %
            
            
            
            
            
            
            
            3.25
            %Average
                interest-earning assets toaverage
                interest-bearing liabilities
            
            
            
            
            
            
            
            
            107.06
            %
            
            
            
            
            
            
            
            107.65
            %


_______________________





(1)
            Includes
                non-accrual loans during the respective periods. Calculated net of
                deferred fees and discounts, loans in process and allowance for loan
                losses.(2)
            Equals
                net interest income divided by average interest-earning
                assets.





The
      Bank
      reduced the provision for loan losses from $36,000 for the quarter ended June
      30, 2006 to $28,000 for the same period in 2007 based on an evaluation of the
      allowance relative to such factors as volume of the loan portfolio,
      concentrations of credit risk, prevailing economic conditions, prior loan loss
      experience and amount of non-performing loans at June 30, 2007. No loans were
      charged off during the three months ended June 30, 2007. Non-performing loans
      amounted to $1.4 million or 2.49% of net loans receivable at June 30, 2007,
      consisting of six loans, two of which are 90 days or more past due and still
      accruing interest and four of which are on non-accrual status. The
      non-performing loans are primarily one-to-four family owner occupied residential
      loans and all are well-collateralized. Management does not anticipate any
      significant losses on these loans. Three of the four loans were placed on
      non-accrual status during the quarter ended June 30, 2007, resulting in the
      reversal of $34,000 of previously accrued interest income. The allowance for
      loan losses as a percent of total loans receivable was 1.04% at June 30, 2007
      and December 31, 2006.




Non-interest
      income, which consists of fees and service charges, amounted to $9,000 for
      the
      three months ended June 30, 2007 and 2006.





Non-interest
      expense increased $96,000 or 49.5% from $194,000 for the three months ended
      June
      30, 2006 to $290,000 for the three months ended June 30, 2007. Salaries and
      benefits expense accounted for $72,000 of the increase as this expense increased
      69.2% from $104,000 for the three months ended June 30, 2006 to $176,000 for
      the
      three months ended June 30, 2007, due primarily to increases in salary for
      the
      President and Chief Executive Officer and the hiring of a chief lending officer
      in the first quarter of 2007. Also contributing to the quarter over quarter
      increase in non-interest expense were increases in director’s fees and expenses,
      occupancy and equipment expenses and legal and auditing fees of $7,000, $8,000
      and $8,000, respectively.




10




The
      provision for income tax declined $61,000 from $99,000 as of June 30, 2006
      to
      $38,000 for the three months ended June 30, 2007 due to the decrease in pre-tax
      income. Quaint Oak's effective tax rate was 38.4% and 38.7% for the three months
      June 30, 2007 and 2006, respectively.





**Comparison
      of Operating Results for the Six Months Ended June 30, 2007 and
      2006**





Net
      income amounted to $172,000 for the six months ended June 30, 2007, a decrease
      of $120,000 or 41.1% compared to net income of $292,000 for the six months
      ended
      June 30, 2006. The decline was primarily due to an increase in interest expense
      of $215,000 and an increase in non-interest expense of $171,000, offset by
      an
      increase in interest income of $131,000, a decrease in the provision for loan
      losses of $54,000, an increase in non-interest income of $6,000 and a decrease
      in income taxes of $75,000.





Net
      interest income amounted to $845,000 for the six months ended June 30, 2007
      compared to $929,000 for the six months ended June 30, 2006. The $84,000 or
      9.0%
      decrease was due primarily to an increase in expense on interest-bearing
      liabilities of $215,000, partially offset by a $50,000 increase in interest
      income on loans receivable and an $80,000 increase on interest-earning deposits
      with other banks.





The
      average interest rate spread declined from 2.93% for the six months ended June
      30, 2006 to 2.53% for the six months ended June 30, 2007 while average net
      interest-earning assets decreased from $4.4 million to $4.2 million for the
      same
      periods. Average interest-earning assets to average interest-bearing liabilities
      was 107.58% for the six months ended June 30, 2007 compared to 108.23% for
      the
      six months ended June 30, 2006. The decrease in the average interest rate spread
      reflects the combination of an increase in average rate paid on interest bearing
      liabilities from 3.61% for the six months ended June 30, 2006 to 4.26% for
      the
      six months ended June 30, 2007 outpacing the increase in the average yield
      on
      interest-earning assets from 6.54% to 6.79% during the same periods. Net
      interest margin was 2.83% and 3.20% for the six months ended June 30, 2007
      and
      2006, respectively.





Interest
      income increased by $131,000 or 6.9% to $2.0 million for the six months ended
      June 30, 2007 compared to $1.9 million for the six months ended June 30, 2006.
      The increase resulted primarily from the increase in the average balance of
      interest-earning deposits from $3.1 million for the six months ended June 30,
      2006 to $5.1 million for the three months ended June 30, 2007, and an increase
      in the yield on the loan portfolio from 6.69% to 6.90% during the same
      periods.




Interest
      expense increased by $215,000 or 22.3% to $1.2 million for the six months ended
      June 30, 2007 compared to $966,000 for the six months ended June 30, 2006.
      The
      increase in interest expense resulted primarily from an increase in the average
      balance of interest-bearing deposits from $52.0 million to $55.5 million for
      the
      six months ended June 30, 2006 and June 30, 2007, respectively, and an increase
      in the average rate paid on deposits from 3.56% to 4.26% for the same periods.
      The increase in the average rate is reflective of the competition for deposits
      in a rising interest rate environment.




**Average
      Balances, Net Interest Income, and Yields Earned and Rates
      Paid.** The
      following table shows for the periods indicated the total dollar amount of
      interest from average interest-earning assets and the resulting yields, as
      well
      as the interest expense on average interest-bearing liabilities, expressed
      both
      in dollars and rates, and the net interest margin. All average balances are
      based on daily balances.




11





**Six
                Months Ended June
                30,****2007**
            
            **2006****Average**
            
            
            
            
            
            **Average****Average**
            
            
            
            **Yield/**
            
            **Average**
            
            
            
            **Yield/****Balance**
            
            **Interest**
            
            **Rate**
            
            **Balance**
            
            **Interest**
            
            **Rate**Interest-earning
                assets:
            
            (Dollars
                in Thousands)Interest-earning
                deposits
            
            $
            5,078
            
            $
            143
            
            
            5.61
            %
            $
            3,086
            
            $
            63
            
            
            4.08
            %Loans
                receivable (1)
            
            
            54,339
            
            
            1,876
            
            
            6.90
            
            
            54,603
            
            
            1,826
            
            
            6.69Other
                interest-earning assets
            
            
            253
            
            
            7
            
            
            5.53
            
            
            284
            
            
            6
            
            
            4.23Total
                interest-earning assets
            
            
            59,670
            
            
            2,026
            
            
            6.79
            %
            
            57,973
            
            
            1,895
            
            
            6.54
            %Non-interest-earning
                assets
            
            
            1,380
            
            
            
            
            
            
            
            
            739Total
                assets
            
            $
            61,050
            
            
            
            
            
            
            
            $
            58,712Interest-bearing
                liabilities:Passbook
                accounts
            
            $
            4,581
            
            
            32
            
            
            1.40
            
            $
            6,743
            
            
            46
            
            
            1.36Statement
                savings accounts
            
            
            6,618
            
            
            91
            
            
            2.75
            
            
            7,780
            
            
            109
            
            
            2.80Certificate
                of deposit accounts
            
            
            44,268
            
            
            1,058
            
            
            4.78
            
            
            37,509
            
            
            772
            
            
            4.12Total
                deposits
            
            
            55,467
            
            
            1,181
            
            
            4.26
            
            
            52,032
            
            
            927
            
            
            3.56FHLB
                advances
            
            
            -
            
            
            -
            
            
            -
            
            
            1,534
            
            
            39
            
            
            5.03Total
                interest-bearing liabilities
            
            
            55,467
            
            
            1,181
            
            
            4.26
            %
            
            53,566
            
            
            966
            
            
            3.61
            %Non-interest-bearing
                liabilities
            
            
            727
            
            
            
            
            
            
            
            
            805Total
                liabilities
            
            
            56,194
            
            
            
            
            
            
            
            
            54,371Retained
                earnings
            
            
            4,856
            
            
            
            
            
            
            
            
            4,341Total
                liabilities and retained earnings
            
            $
            61,050
            
            
            
            
            
            
            
            $
            58,712Net
                interest-earning assets
            
            $
            4,203
            
            
            
            
            
            
            
            $
            4,407Net
                interest income; average interest rate spread
            
            
            
            
            $
            845
            
            
            2.53
            %
            
            
            
            $
            929
            
            
            2.93
            %Net
                interest margin (2)
            
            
            
            
            
            
            
            
            2.83
            %
            
            
            
            
            
            
            
            3.20
            %Average
                interest-earning assets toaverage
                interest-bearing liabilities
            
            
            
            
            
            
            
            
            107.58
            %
            
            
            
            
            
            
            
            108.23
            %


_______________________





(1)
            Includes
                non-accrual loans during the respective periods. Calculated net of
                deferred fees and discounts, loans in process and allowance for loan
                losses.(2)
            Equals
                net interest income divided by average interest-earning
                assets.








The
      Bank
      reduced the provision for loan losses from $72,000 for the six months ended
      June
      30, 2006 to $18,000 for the same period in 2007 based on an evaluation of the
      allowance relative to such factors as volume of the loan portfolio,
      concentrations of credit risk, prevailing economic conditions, prior loan loss
      experience and amount of non-performing loans at June 30, 2007. No loans were
      charged off during the six months ended June 30, 2007. See additional discussion
      under “Comparison of Operating Results for the Three Months Ended June 30, 2007
      and 2006.”




Non-interest
      income, which consists of fees and service charges, amounted to $17,000 for
      the
      six months ended June 30, 2007; an increase of $6,000 compared to non-interest
      income of $11,000 for the six months ended June 30, 2006.





Non-interest
      expense increased $171,000 or 43.6% from $392,000 for the six months ended
      June
      30, 2006 to $563,000 for the six months ended June 30, 2007. Salaries and
      benefits expense accounted for $123,000 of the increase as this expense
      increased 58.6% from $210,000 for the six months ended June 30, 2006 to $333,000
      for the six months ended June 30, 2007, due primarily to increases in salary
      for
      the President and Chief Executive Officer and the hiring of a chief lending
      officer at the beginning of the first quarter of 2007. Also contributing to
      the
      quarter over quarter increase in non-interest expense were increases in
      director’s fees and expenses, occupancy and equipment expenses and legal and
      auditing fees of $11,000, $14,000 and $22,000, respectively.




12




The
      provision for income tax declined $75,000 from $184,000 as of June 30, 2006
      to
      $109,000 for the six months ended June 30, 2007 due to the decrease in pre-tax
      income. Quaint Oak's effective tax rate was 38.8% and 38.7% for the six months
      June 30, 2007 and 2006, respectively.





**Liquidity
      and Capital Resources**





Quaint
      Oak maintains levels of liquid assets deemed adequate by management. Quaint
      Oak
      Bank adjusts its liquidity levels to fund deposit outflows, repay its borrowings
      and to fund loan commitments. Quaint Oak Bank also adjusts liquidity as
      appropriate to meet asset and liability management objectives.





Quaint
      Oak's primary sources of funds are deposits, amortization and prepayment of
      loans and to a lesser extent, loan sales and earnings and funds provided from
      operations. While scheduled principal repayments 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.
      Quaint Oak sets the interest rates on its deposits to maintain a desired level
      of total deposits. In addition, Quaint Oak invests excess funds in short-term
      interest-earning accounts and other assets, which provide liquidity to meet
      lending requirements. At June 30, 2007, Quaint Oak's cash and cash equivalents
      and investment in interest-earning deposits amounted to $2.0 million and $1.6
      million, respectively.





Quaint
      Oak's primary sources of cash are net income, principal repayments on loans
      and
      increases in deposit accounts. If Quaint Oak requires funds beyond its ability
      to generate them internally, borrowing agreements exist with the Federal Home
      Loan Bank of Pittsburgh, which provide an additional source of funds. At June
      30, 2007, Quaint Oak had no advances from the Federal Home Loan Bank of
      Pittsburgh and had $35.7 million in borrowing capacity.





At
      June
      30, 2007, Quaint Oak had outstanding loan commitments of $808,000 to originate
      loans. At June 30, 2007, certificates of deposit scheduled to mature in less
      than one year totaled $30.7 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,
      in a
      rising interest rate environment, the cost of such deposits could be
      significantly higher upon renewal. Quaint Oak intends to utilize its liquidity
      to fund its lending activities.





Quaint
      Oak is required to maintain regulatory capital sufficient to meet tier 1
      leverage, tier 1 risk-based and total risk-based capital ratios of at least
      4.00%, 4.00% and 8.00%, respectively. At June 30, 2007, Quaint Oak exceeded
      each
      of its capital requirements with ratios of 8.04%, 12.11% and 13.38%,
      respectively.





**Off-Balance
      Sheet Arrangements**





In
      the
      normal course of operations, we engage in a variety of financial transactions
      that, in accordance with generally accepted accounting principles are not
      recorded in our financial statements. These transactions involve, to varying
      degrees, elements of credit, interest rate, and liquidity risk. Such
      transactions are used primarily to manage customers' requests for funding and
      take the form of loan commitments and lines of credit. Our exposure to credit
      loss from non-performance by the other party to the above-mentioned financial
      instruments is represented by the contractual amount of those instruments.
      We
      use the same credit policies in making commitments and conditional obligations
      as we do for on-balance sheet instruments. In general, we require collateral
      or
      other security to support financial instruments with off-balance sheet credit
      risk.





13





**Impact
      of Inflation and Changing Prices**





The
      financial statements and related financial data presented herein regarding
      Quaint Oak Bank have been prepared in accordance with accounting principles
      generally accepted in the United States of America which generally require
      the
      measurement of financial position and operating results in terms of historical
      dollars, without considering changes in relative purchasing power over time
      due
      to inflation. Unlike most industrial companies, virtually all of Quaint Oak
      Bank's assets and liabilities are monetary in nature. As a result, interest
      rates generally have a more significant impact on Quaint Oak Bank's performance
      than does the effect of inflation. Interest rates do not necessarily move in
      the
      same direction or in the same magnitude as the prices of goods and services,
      since such prices are affected by inflation to a larger extent than interest
      rates.








**ITEM
      3. CONTROLS AND PROCEDURES**





Under
      the
      supervision and with the participation of our management, including our Chief
      Executive Officer and our principal financial officer, we evaluated the
      effectiveness of the design and operation of our disclosure controls and
      procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Exchange Act of 1934) as of the end of the period covered by this report. Based
      upon that evaluation, the Chief Executive Officer and the principal financial
      officer have concluded that, as of the end of the period covered by this report,
      our disclosure controls and procedures are effective to ensure that information
      required to be disclosed in the reports that the Company files or submits under
      the Securities Exchange Act of 1934, is recorded, processed, summarized and
      reported within the applicable time periods specified by the Securities and
      Exchange Commission’s rules and forms. There has been no change in the Bank’s
      internal control over financial reporting during the Bank’s most recent fiscal
      quarter that has materially affected, or is reasonably likely to materially
      affect, the Bank’s internal control over financial reporting.













14


**PART
      II**




**ITEM
      1. LEGAL PROCEEDINGS**





The
      Bank
      is not involved in any pending legal proceedings other than routine legal
      proceedings occurring in the ordinary course of business, which involve amounts
      in the aggregate believed by management to be immaterial to the financial
      condition and operating results of the Bank.





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





Quaint
      Oak Bancorp's registration statement on Form SB-2 (File No. 141474) was declared
      effective by the SEC on May 14, 2007. On July 3, 2007 Quaint Oak Savings Bank
      completed its conversion from a Pennsylvania chartered mutual savings bank
      to a
      Pennsylvania chartered stock savings bank and changed its name to Quaint Oak
      Bank, concurrent with the Quaint Oak Bancorp stock offering. Upon completion
      of
      the conversion and the offering, all of Quaint Oak Bank's stock is owned by
      Quaint Oak Bancorp, and all of Quaint Oak Bancorp's stock is, in turn, owned
      by
      the public. In connection with the conversion and offering, the Company sold
      1,388,625 shares of its common stock, raising $13,886,250 of gross proceeds
      and
      contributed $7.1 million of equity to the Bank, which is not recognized in
      the
      financial statements included in this Form 10-QSB because the conversion and
      offering was not completed until after June 30, 2007. All further proceeds
      were
      retained by Quaint Oak Bancorp for future capital needs.





Ryan
      Beck
& Co., Inc. ("Ryan Beck") was engaged to assist in the marketing of the
      common stock. For their services, Ryan Beck received a sales fee of $135,000.
      Expenses related to the offering were approximately $550,000, including the
      sales fee paid to Ryan Beck, none of which were paid to officers or directors
      of
      Quaint Oak Bancorp, the Bank or associates of such persons. No underwriting
      discounts, commissions or finders fees were paid in connection with the
      offering. Net proceeds of the offering were approximately $13.3 million. As
      a
      result of completion of the offering, 1,388,625 shares of Quaint Oak Bancorp's
      common stock are outstanding as of July 31, 2007.





Initially,
      both Quaint Oak Bancorp and Quaint Oak Bank have invested the net proceeds
      from
      the stock offering in short-term investments until these proceeds can be
      deployed for other purposes.





Quaint
      Oak Bancorp Inc.'s common stock is quoted on the OTC Bulletin Board under the
      trading symbol "QNTO."





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





Not
      applicable.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





Not
      applicable.





**ITEM
      5. OTHER INFORMATION**





Not
      applicable.





15




**ITEM
      6. EXHIBITS**




The
                following Exhibits are filed as part of this report:No.
            Description2.1
            Plan
                of Conversion of Quaint Oak Savings Bank (1)3.1
            Articles
                of Incorporation of Quaint Oak Bancorp, Inc. (1)3.2
            Bylaws
                of Quaint Oak Bancorp, Inc. (1)4.1
            Form
                of Stock Certificate of Quaint Oak Bancorp, Inc. (1)10.1
            Employment
                Agreement by and between Robert T. Strong and Quaint Oak Savings
                Bank, as
                amended (1)31.1
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer31.2
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.0
            Certification
                Pursuant to 18 U.S.C Section 1350


__________________


(1)
            Incorporated
                by reference from the Company’s Registration Statement on Form SB-2, filed
                on March 21, 2007, as amended, and declared effective on May 14,
                2007
                (File No. 333-141474).













16
 
  **SIGNATURES**








In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.










Date:August
                9, 2007
            
            By:
            /s/
              Robert T. StrongRobert
                T. StrongPresident
                and Chief Executive OfficerDate:August
                9, 2007
            
            By:
            /s/
              Diane J. ColyerDiane
                J. ColyerOperations
                Officer(principal
                financial officer)