**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 March
        31, 2007
 
 OR
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                  ACT
 
 For
        the
        transition period from ____________ to _______________
 
 Commission
        File Number ***:*** ****** 000-52694
 
 **QUAINT
        OAK BANCORP, INC.**
 (Exact
        name of small business issuer as specified in its charter)
 
 Pennsylvania
              
              35-2293957(State
                  or other jurisdiction of incorporation or organization)
              
              (IRS
                  Employer Identification No.)
 
 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 June 27, 2007, no shares of the Issuer's
        common stock were issued and outstanding.*
 __________________________
 *
              The
                  Issuer became subject to the filing requirements of Sections 13
                  and 15(d)
                  when its Form SB-2 was declared effective by the SEC on May 14,
                  2007.
 
 Transitional
        Small Business Disclosure Format: Yes o   No
x
 
 
  Quaint
        Oak Bancorp, Inc. filed a registration statement on Form SB-2 (the “Registration
        Statement”) with the Securities and Exchange Commission (“SEC”) which the SEC
        declared effective on May 14, 2007. The Registration Statement included
        financial statements for the year ended December 31, 2006. Therefore, the
        Company is filing Form 10-QSB pursuant to Rule 13a-13 of the Securities Exchange
        Act of 1934, as amended, in order to file financial statements for the first
        fiscal quarter subsequent to the year reported in the Registration
        Statement.
       
  **INDEX**
 
 PagePART I
              -
              FINANCIAL
                  INFORMATIONItem 1:
              
              Financial
                  Statements (Unaudited)
              1Item 2:
              
              Management’s
                  Discussion and Analysis of Financial Conditionand
                  Results of Operations
              7Item 3:
              
              Controls
                  and Procedures
              12PART II
              -
              OTHER
                  INFORMATIONItem 1:
              
              Legal
                  Proceedings
              13Item 2:
              
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              13Item 3:
              
              Defaults
                  upon Senior Securities
              13Item 4:
              
              Submission
                  of Matters to a Vote of Security Holders
              13Item 5:
              
              Other
                  information
              13Item 6:
              
              Exhibits
              13SIGNATURES
 
  
   
 **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. At March 31, 2007, Quaint Oak Bancorp, Inc. had no
        assets
        or liabilities and conducted no operations, and, therefore, the information
        presented in this report is for the Bank.
    1
   ***Quaint
        Oak Savings Bank***
 **Balance
        Sheets**
  At
                  March 31,
              
              
              At
                  December 31,2007
              
              
              2006(Unaudited)**ASSETS**
              
              
              (In
                  Thousands)Cash
                  and cash equivalents
              
              $
              4,344
              
              $
              4,197Investment
                  in interest-earning time deposits
              
              
              1,981
              
              
              1,711Investment
                  in FHLB stock, at cost
              
              
              252
              
              
              263Loans
                  receivable, net of allowance for loan lossesMarch
                  31, 2007: $ 565; December 31, 2006: $575
              
              
              53,769
              
              
              54,553Bank
                  premises and equipment, net
              
              
              44
              
              
              46Accrued
                  interest receivable and other assets
              
              
              493
              
              
              436**Total
                  Assets**
              
              $
              60,883
              
              $
              61,206**LIABILITIES
                  AND RETAINED EARNINGS****LIABILITIES**Deposits,
                  interest-bearing
              
              $
              55,311
              
              $
              55,750Advances
                  from borrowers for taxes and insurance
              
              
              513
              
              
              587Accrued
                  interest payable and other liabilities
              
              
              211
              
              
              132**Total
                  Liabilities**
              
              
              56,035
              
              
              56,469**RETAINED
                  EARNINGS**
              
              
              4,848
              
              
              4,737**Total
                  Liabilities and Retained Earnings**
              
              $
              60,883
              
              $
              61,206
 
 
 
  *See
              accompanying notes to financial statements.*
 2
  ***Quaint
        Oak Savings Bank***
 **Statements
        of Income**
  For
                  the Three Months EndedMarch
                  31,2007
              
              
              2006(Unaudited)
              
              
              (Unaudited)**Interest
                  Income**
              
              
              (In
                  Thousands)Loans
                  receivable, including fees
              
              $
              942
              
              $
              870Interest-earning
                  deposits
              
              
              76
              
              
              34Dividends
              
              
              3
              
              
              2Total
                  Interest Income
              
              
              1,021
              
              
              906**Interest
                  Expense**Deposits
              
              
              584
              
              
              449Short-term
                  borrowings
              
              
              -
              
              
              5**Total
                  Interest Expense**
              
              
              584
              
              
              454**Net
                  Interest Income**
              
              
              437
              
              
              452**(Credit)
                  Provision for Loan Losses**
              
              
              (10
              )
              
              36**Net
                  Interest Income after (Credit) Provision for Loan
                  Losses**
              
              
              447
              
              
              416**Other
                  Income - Fees and service charges**
              
              
              8
              
              
              2**Other
                  Expenses**Salaries
                  and employee benefits
              
              
              157
              
              
              106Directors'
                  fees and expenses
              
              
              38
              
              
              34Occupancy
                  and equipment
              
              
              19
              
              
              13Professional
                  fees
              
              
              25
              
              
              11Other
              
              
              34
              
              
              34**Total
                  Other Expenses**
              
              
              273
              
              
              198**Income
                  before Income Taxes**
              
              
              182
              
              
              220**Income
                  Taxes**
              
              
              71
              
              
              85**Net
                  Income**
              
              $
              111
              
              $
              135
 
  *See
              accompanying* *notes
              to financial statements.*
 3
  ***Quaint
        Oak Savings Bank***
 **Statements
        of Cash Flows**
 
 Three
                  Months EndedMarch
                  31,2007
              
              
              2006(Unaudited)
              
              
              (Unaudited)**Cash
                  Flows from Operating Activities**
              
              
              (In
                  Thousands)Net
                  Income
              
              $
              111
              
              $
              135Adjustments
                  to reconcile net income to net cash provided byoperating
                  activities:(Credit)
                  provision for loan losses
              
              
              (10
              )
              
              36Depreciation
                  expense
              
              
              3
              
              
              3Increase
                  in accrued interest receivable and other assets
              
              
              (57
              )
              
              (34
              )Increase
                  in accrued interest payable and other liabilities
              
              
              79
              
              
              16**Net
                  Cash Provided by Operating Activities**
              
              
              126
              
              
              156**Cash
                  Flows from Investing Activities**Net
                  increase in investment in interest-earning time deposits
              
              
              (270
              )
              
              (266
              )Purchase
                  of property and equipment
              
              
              (1
              )
              
              -Net
                  (increase) decrease in Federal Home Loan Bank stock
              
              
              11
              
              
              (58
              )Net
                  (increase) decrease in loans receivable
              
              
              794
              
              
              (
                  2,639
              )**Net
                  Cash Provided by (Used in) Investing Activities**
              
              
              534
              
              
              (2,963
              )**Cash
                  Flows from Financing Activities**Net
                  increase (decrease) in deposits
              
              
              (439
              )
              
              685Increase
                  in short-term borrowings
              
              
              -
              
              
              2,250Decrease
                  in advances from borrowers for taxes and insurance
              
              
              (74
              )
              
              (51
              )**Net
                  Cash Provided by (Used in) Financing Activities**
              
              
              (513
              )
              
              2,884**Net
                  Increase in Cash and Cash Equivalents**
              
              
              147
              
              
              77**Cash
                  and Cash Equivalents - Beginning**
              
              
              4,197
              
              
              1,791**Cash
                  and Cash Equivalents - Ending**
              
              $
              4,344
              
              $
              1,868**Supplementary
                  Cash Flows Information**Income
                  taxes paid
              
              $
              16
              
              $
              51Interest
                  paid
              
              $
              596
              
              $
              577
 
  *See
              accompanying* *notes
              to financial statements.*
 4
   ***Quaint
        Oak Savings Bank***
 **Notes
        to Financial Statements**
  **Note
        1** **-
        Basis of Presentation**
  On
        February 15, 2007, the Board of Trustees of the Bank approved a Plan of
        Conversion pursuant to which the Bank will be converting from a Pennsylvania
        mutual savings bank to a Pennsylvania stock chartered savings bank to be
        known
        as "Quaint Oak Bank", which will be a wholly owned subsidiary of our recently
        formed Pennsylvania-chartered corporation, Quaint Oak Bancorp, Inc. (the
        "Company" or "Quaint Oak Bancorp"). In
        connection with the Bank’s conversion, the Company will offer and sell shares of
        its common stock to eligible depositors of the Bank and, possibly, the
        public.
  The
        Company’s common stock offered will be priced based upon the Company’s estimated
        proforma market value of the Bank as determined by an independent appraisal.
        Costs incurred in connection with the offering will be recorded as a reduction
        of the proceeds from the entire offering. If the transaction is not consummated,
        all costs incurred in connection with the transaction will be expensed. At
        March
        31, 2007, approximately $69,000 of conversion costs had been incurred and
        deferred.
  The
        Plan
        of Conversion was subject to the approval of the Bank’s depositors, which was
        obtained on June 25, 2007. Quaint Oak Bancorp has not commenced operations
        as of
        the date of this Form 10-QSB. Accordingly, these financial statements include
        the accounts of Quaint Oak Savings Bank.
  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 SEC 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 ended March 31, 2007 are not
        necessarily indicative of the results that may be expected for the full
        year.
  Quaint
        Oak Savings Bank (the "Bank") operates under a state bank charter as a mutual
        savings bank. The Bank is subject to regulation of the Pennsylvania Department
        of Banking and the Federal Deposit Insurance Corporation. 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.
  
  5
   ***Quaint
        Oak Savings Bank***
 **Notes
        to Financial Statements**
  **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.
  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 beginning of fiscal 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 the Accounting Standards
        Board (FASB) issued 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 (SFAS) 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 three months
        ended March 31, 2007. Corporate tax returns for the years 2003 through 2006
        remain open to examination by the taxing authorities.
  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 SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities-Including an amendment of FASB
        Statement No. 115”. SFAS 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. SFAS No. 159 is
        effective for the Bank January 1, 2008. Management is evaluating the impact
        that
        the adoption of SFAS No. 159 will have on the Bank’s financial
        statements.
  6
  **ITEM
        2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS**
 
 **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 by the Bank in connection with the Bank’s Conversion and has
        not yet commenced operations. The Company’s results of operations initially will
        be primarily dependent on the results of the Bank, which will be a wholly
        owned
        subsidiary upon completion of the Conversion. 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 consolidated 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 impacted 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 loss 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 March 31, 2007 and December 31,
        2006**
 
 Quaint
        Oak's total assets decreased $323,000 or 0.5% to $60.9 million at March 31,
        2007
        compared to $61.2 million at December 31, 2006. This decrease was due primarily
        to a decrease in loans receivable, net of allowance for loan losses, offset
        by
        increases in cash and cash equivalents and investment in interest-earning
        time
        deposits.
 
 Loans
        receivable, net, decreased $784,000 or 1.4% to $53.8 million at March 31,
        2007
        from $54.6 million at December 31, 2006. The decrease was due primarily to
        a
        $1.5 million or 4.9% decrease in one-to-four family residential loans partially
        offset by an increase in commercial real estate loans and commercial lines
        of
        credit of $680,000 and $227,000, respectively, from December 31, 2006. The
        decline in residential mortgages was primarily driven by a $1.0 million decrease
        in one-to-four family owner occupied loans and a $490,000 decrease 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, while
        the
        overall decline in the loan portfolio reflects the general slow-down in loan
        demand during the quarter ended March 31, 2007.
 
 Cash
        and
        cash equivalents increased $147,000 or 3.5% to $4.3 million at March 31,
        2007
        compared to $4.2 million at December 31, 2006 due to an increase in
        non-interest-earning demand deposits with other banks of $349,000, which
        was
        offset by a decrease in interest-earning deposits with other banks of $202,000.
 
 Investment
        in interest-earning time deposits increased $270,000 or 15.8% to $2.0 million
        at
        March 31, 2007 compared to $1.7 million at December 31, 2006 as excess cash
        was
        channeled into this investment vehicle due to the general slow-down in loan
        demand during the quarter ended March 31, 2007.
 
 8
 Total
        deposits decreased $439,000 or 0.8% to $55.3 million at March 31, 2007 compared
        to $55.8 million at December 31, 2006. The decrease in interest-bearing deposits
        was attributed to a $393,000 or 0.9% decrease in certificates of deposits,
        as
        management made a decision to control deposit growth due to the general
        slow-down in loan demand.
 
 Total
        equity increased $111,000 or 2.3% to $4.8 million at March 31, 2007 compared
        to
        $4.7 million at December 31, 2006, due solely to net income of $111,000 for
        the
        three months ended March 31, 2007.
 
 **Comparison
        of Operating Results for the Three Months Ended March 31, 2007 and
        2006**
 
 Net
        income amounted to $111,000 for the three months ended March 31, 2007, a
        decrease of $24,000 or 17.8% compared to net income of $135,000 for the three
        months ended March 31, 2006. The decline was due to a decrease in net interest
        income of $15,000 and an increase in non-interest expenses of $75,000, offset
        by
        a decrease in the provision for loan losses of $46,000, increase in non-interest
        income of $6,000 and a decrease in income taxes of $14,000.
 
 Net
        interest income amounted to $437,000 for the three months ended March 31,
        2007
        compared to $452,000 for the three months ended March 31, 2006. The $15,000
        or
        3.3% decrease was due primarily to an increase in expense on interest-bearing
        liabilities of $130,000 offset by an increase in interest income on loans
        receivable and interest-earning deposits with other banks of $72,000 and
        $42,000, respectively.
 
 The
        average interest rate spread declined from 2.90% for the three months ended
        March 31, 2006 to 2.60% for the three months ended March 31, 2007 while average
        net interest-earning assets increased from $4.4 million to $4.5 million for
        the
        same periods. Average interest-earning assets to average interest-bearing
        liabilities was 108.13% for the three months ended March 31, 2007 and 108.37%
        for the three months ended March 31, 2006. The decrease in the average interest
        rate spread reflects the increase in average rate paid on interest bearing
        liabilities from 3.46% for the three months ended March 31, 2006 to 4.21%
        for
        the three months ended March 31, 2007 outpacing the increase in the average
        yield on interest-earning assets from 6.36% to 6.81% during the same periods.
        Net interest margin was 2.91% and 3.17% for the three months ended March
        31,
        2007 and 2006, respectively.
 
 Interest
        income increased by $115,000 or 12.7% to $1.0 million for the three months
        ended
        March 31, 2007 compared to $906,000 for the three months ended March 31,
        2006.
        The increase was due in large part to a higher yielding loan portfolio and
        to a
        lesser extent to an increase in the average balance of loans receivable which
        grew from $53.3 million at March 31, 2006 to $54.0 million at March 31, 2007.
        Also contributing to the increase in interest income was the increase in
        the
        average balance of interest-earning deposits from $3.5 million at March 31,
        2006
        to $5.8 million at March 31, 2007.
 
 Interest
        expense increased by $130,000 or 28.6% to $584,000 for the three months ended
        March 31, 2007 compared to $454,000 for the three months ended March 31,
        2006,
        primarily as a result of an increase in average rate and average balance
        of
        certificate of deposit accounts in a rising interest rate
        environment.
  9
 **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.
  **Three
                  Months Ended March 31,****2007**
              
              
              **2006****Average**
              
              
              
              
              
              
              
              
              **Average****Average**
              
              
              
              
              
              **Yield/**
              
              
              **Average**
              
              
              
              
              
              **Yield/****Balance**
              
              
              **Interest**
              
              
              **Rate**
              
              
              **Balance**
              
              
              **Interest**
              
              
              **Rate**Interest-earning
                  assets:
              
              (Dollars
                  in Thousands)Interest-earning
                  deposits
              
              $
              5,782
              
              $
              76
              
              
              5.26
              %
              $
              3,475
              
              $
              34
              
              
              3.91
              %Loans
                  receivable (1)
              
              
              53,976
              
              
              942
              
              
              6.98
              
              
              53,254
              
              
              870
              
              
              6.53Other
                  interest-earning assets
              
              
              252
              
              
              3
              
              
              4.76
              
              
              221
              
              
              2
              
              
              3.62Total
                  interest-earning assets
              
              
              60,010
              
              
              1,021
              
              
              6.81
              %
              
              56,950
              
              
              906
              
              
              6.36
              %Non-interest-earning
                  assets
              
              
              1,043
              
              
              
              
              
              
              
              
              701Total
                  assets
              
              $
              61,053
              
              
              
              
              
              
              
              $
              57,651Interest-bearing
                  liabilities:Passbook
                  accounts
              
              $
              4,661
              
              
              16
              
              
              1.37
              
              $
              7,053
              
              
              24
              
              
              1.36Statement
                  savings accounts
              
              
              6,677
              
              
              46
              
              
              2.76
              
              
              8,318
              
              
              58
              
              
              2.79Certificate
                  of deposit accounts
              
              
              44,160
              
              
              522
              
              
              4.73
              
              
              36,726
              
              
              367
              
              
              4.00Total
                  deposits
              
              
              55,498
              
              
              584
              
              
              4.21
              
              
              52,097
              
              
              449
              
              
              3.45FHLB
                  advances
              
              
              -
              
              
              -
              
              
              -
              
              
              453
              
              
              5
              
              
              4.42Total
                  interest-bearing liabilities
              
              
              55,498
              
              
              584
              
              
              4.21
              %
              
              52,550
              
              
              454
              
              
              3.46
              %Non-interest-bearing
                  liabilities
              
              
              752
              
              
              
              
              
              
              
              
              838Total
                  liabilities
              
              
              56,250
              
              
              
              
              
              
              
              
              53,388Retained
                  earnings
              
              
              4,803
              
              
              
              
              
              
              
              
              4,263Total
                  liabilities and retained earnings
              
              $
              61,053
              
              
              
              
              
              
              
              $
              57,651Net
                  interest-earning assets
              
              $
              4,512
              
              
              
              
              
              
              
              $
              4,400Net
                  interest income; average interest rate spread
              
              
              
              
              $
              437
              
              
              2.60
              %
              
              
              
              $
              452
              
              
              2.90
              %Net
                  interest margin (2)
              
              
              
              
              
              
              
              
              2.91
              %
              
              
              
              
              
              
              
              3.17
              %Average
                interest-earning assets toaverage
                  interest-bearing liabilities
              
              
              
              
              
              
              
              
              108.13
              %
              
              
              
              
              
              
              
              108.37
              %
 _______________________
 
 (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.
 
 As
        of
        March 31, 2007, management reduced the allowance for loan losses by $10,000
        to
        $565,000 from $575,000 at December 31, 2006 based on evaluation of the allowance
        relative to such factors as the decreased volume of the loan portfolio,
        concentrations of credit risk, prevailing economic conditions, prior loan
        loss
        experience and amount of non-performing loans at March 31, 2007. Net loans
        receivable decreased $784,000 or 1.4% from $54.6 million at December 31,
        2006 to
        $53.8 million at March 31, 2007. No loans were charged off during the three
        months ended March 31, 2007. Non-performing loans amounted to $877,000 or
        1.63%
        of net loans receivable at March 31, 2007, consisting of five loans, four
        of
        which are 90 days or more past due and one of which is 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. Subsequent to March 31,
        2007,
        non-performing loans increased to $1.4 million primarily as a result of one
        loan
        totaling $508,000 becoming more than 90 days past due. The subject loan is
        secured by an owner occupied single-family residence and the loan-to-value
        ratio
        is less than 50%. The Bank is pursuing its legal options and management does
        not
        anticipate any significant losses on this loan. The Bank anticipates placing
        approximately $1.2 million of the $1.4 million of non-performing assets on
        non-accrual status. If these loans had been on non-accrual status at March
        31,
        2007, interest income would have been negatively impacted by approximately
        $14,000. The allowance for loan losses as a percent of total loans receivable
        was 1.04% at March 31, 2007 and December 31, 2006.
  10
 Non-interest
        income, which consists of fees and service charges, amounted to $8,000 for
        the
        three months ended March 31, 2007 an increase of $6,000 compared to non-interest
        income of $2,000 for the three months ended March 31, 2006.
 
 Non-interest
        expense increased $75,000 or 37.9% from $198,000 for the three months ended
        March 31, 2006 to $273,000 for the three months ended March 31, 2007. Salaries
        and benefits expense accounted for $51,000 of the increase as this expense
        increased 48.1% from $106,000 for the three months ended March 31, 2006 to
        $157,000 for the three months ended March 31, 2007, due primarily to increases
        in salary for the President and Chief Executive Officer and the hiring of
        a
        chief lending officer during the quarter. Also contributing to the quarter
        over
        quarter increase in non-interest expense was the increase in legal and auditing
        fees of $14,000.
 
 The
        provision for income tax declined $14,000 from $85,000 as of March 31, 2006
        to
        $71,000 for the three months ended March 31, 2007. Quaint Oak's effective
        tax
        rate was 39.0% and 38.6% for the three months March 31, 2007 and 2006,
        respectively.
 
 **Liquidity
        and Capital Resources**
 
 Quaint
        Oak maintains levels of liquid assets deemed adequate by management. Its
        liquidity ratio averaged 10.60% for the quarter ended March 31, 2007. 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. Quaint Oak's cash and cash equivalents amounted to
        $4.3
        million and $4.2 million at March 31, 2007 and December 31, 2006,
        respectively.
 
 A
        significant portion of Quaint Oak's liquidity consists of interest earning
        deposits. 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 March 31, 2007, Quaint Oak had no advances from the Federal
        Home Loan Bank of Pittsburgh and had $38.8 million in borrowing
        capacity.
 
 At
        March
        31, 2007, Quaint Oak had outstanding loan commitments of $287,000 to originate
        loans. At March 31, 2007, certificates of deposit scheduled to mature in
        less
        than one year totaled $30.0 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.
 
 11
 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 March 31, 2007, Quaint Oak exceeded
        each of its capital requirements with ratios of 7.94%, 12.55% and 13.83%,
        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.
 
 **Impact
        of Inflation and Changing Prices**
 
 The
        consolidated 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.
 
 
  12
   **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 of the Bank.
 
 **ITEM
        2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
        PROCEEDS**
 
 Not
        applicable.
 
 **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.
 
 **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).
 
 
  13
  **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:June
                  27, 2007
              
              By:
              /s/
                Robert T. StrongRobert
                  T. StrongPresident
                  and Chief Executive OfficerDate:June
                  27, 2007
              
              By:
              /s/
                Diane J. ColyerDiane
                  J. ColyerOperations
                  Officer(principal
                  financial officer)