QNB Corp. Reports Earnings for Second Quarter 2026

Rhea-AI Summary

QNB Corp (OTCQX: QNBC) reported second-quarter 2026 net income of $3.02 million, or $0.60 diluted EPS, including $2.23 million after-tax merger-related costs from its April 1, 2026 acquisition of Victory Bancorp. Excluding these costs, adjusted net income was $5.24 million and adjusted diluted EPS was $1.05, compared with $3.88 million and $1.04 a year earlier. For the first half of 2026, net income was $5.78 million (diluted EPS $1.32), or $9.03 million adjusted (diluted EPS $2.06) versus $6.46 million (diluted EPS $1.74) in 2025. QNB closed the Victory merger, creating a franchise with nearly $2.4 billion in assets; loans reached $1.72 billion and deposits $2.07 billion at June 30, 2026. Tax-equivalent net interest margin rose to 3.16% from 2.69% in the prior-year quarter, while non-interest income and operating expenses both increased, partly due to merger-related items.

Positive

• Adjusted Q2 2026 net income $5.24M vs. $3.88M in Q2 2025
• Adjusted H1 2026 net income $9.03M vs. $6.46M in H1 2025
• Tax-equivalent net interest margin 3.16% in Q2 2026 vs. 2.69% in Q2 2025
• Total assets $2.40B at 6/30/26 vs. $1.91B at 12/31/25
• Loans receivable $1.72B and deposits $2.07B at 6/30/26 after Victory acquisition
• Non-interest income Q2 2026 $2.14M vs. $1.65M in Q2 2025

Negative

• Q2 2026 GAAP net income $3.02M vs. $3.88M in Q2 2025
• H1 2026 GAAP net income $5.78M vs. $6.46M in H1 2025
• After-tax merger-related costs $2.23M in Q2 and $3.25M in H1 2026
• Total non-interest expense Q2 2026 $16.44M vs. $9.56M in Q2 2025
• Provision for credit losses on loans H1 2026 $0.52M vs. $0.41M in H1 2025
• Commercial substandard/doubtful loans $49.16M at 6/30/26 vs. $39.52M at 12/31/25

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QUAKERTOWN, Pa., July 28, 2026 (GLOBE NEWSWIRE) -- QNB Corp. (the “Company” or “QNB”) (OTCQX: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the second quarter of 2026 of $3,015,000 or $0.60 per share on a diluted basis. The acquisition of Victory Bancorp, Inc. ("Victory"), a highly complementary community banking franchise headquartered in Limerick, Pennsylvania, was officially closed on April 1, 2026, creating a franchise with nearly $2.4 billion in assets and expanding our presence deeper into Montgomery County. This strategic combination brings together two relationship-focused institutions with shared values, similar operating cultures, and strong community ties. Results for the three and six months of 2026 include three months of post-merger activity related to the acquisition of Victory. Net income for the second quarter of 2026 included merger-related cost, net of tax, of $2,227,000. Excluding the impact of the merger-related costs, net income was $ 5,242,000 and adjusted diluted earnings per share was $1.05*. This compares to net income of $3,883,000, or $1.04 per share on a diluted basis, for the same period in 2025. For the six months ended June 30, 2026, QNB reported net income of $5,780,000, or $1.32 per share on a diluted basis. Net income included merger-related costs, net of tax, of $3,249,000.  Excluding the impact of the merger-related cost, net income was $ 9,029,000 and adjusted diluted earnings per share was $2.06*. This compares to net income of $6,461,000, or $1.74 per share on a diluted basis, reported for the same period in 2025.  The merger-related costs are significant one-time costs and are not normal recurring operating expenses. 

For the second quarter ended June 30, 2026, the annualized rate of return on average assets (ROAA) and average shareholders’ equity (ROAE) was 0.50% and 6.65%, respectively. Adjusted ROAA and ROAE, excluding the impact of the merger-related cost, for the three-month period of 2026 was 0.88% and 11.56%, respectively*. This compares with 0.83% and 14.25%, respectively, for the second quarter 2025.  For the six months ended June 30, 2026, QNB reported ROAA and ROAE was 0.54% and 7.38%, respectively. Adjusted ROAA and ROAE, excluding the impact of the merger-related cost, for the six-month period of 2026 was 0.85% and 11.54%, respectively^*. This compares with 0.69% and 12.02%, respectively, for the same period in 2025.  

^{* QNB uses non-GAAP financial information in its analysis of performance. These non-GAAP ratios and calculations provide a better understanding of ongoing operations and comparability with prior period results by showing the effects of significant gains and charges in the periods presented. QNB believes that investors may use these non-GAAP measures to analyze QNB’s financial performance without the impact of unusual items or events that may obscure trends. This non-GAAP data is not a substitute for GAAP results and should be considered in addition to results prepared in accordance with GAAP. Non-GAAP financial measures include risks as companies might calculate these measures differently and persons might disagree as to the appropriateness of items included in these measures. Please see attached table "Impact of Merger-Related Costs--GAAP to Non-GAAP Measure Reconciliation."}

The operating performance of the Bank, a wholly-owned subsidiary of QNB Corp., included three months of post-merger activity and improved for the quarter ended June 30, 2026, in comparison with the same period in 2025, due primarily to improvement in the interest margin causing a $6,072,000 increase in net interest income and a $499,000 increase in non-interest income; this was partly offset by an increase in non-interest expense of $6,377,000 of which $2,677,000 was due to merger-related costs. The contribution from QNB Corp., which included three months of post-merger activity, for the quarter ended June 30, 2026, declined compared with the same period in 2025, primarily due to a decrease in net interest income of $373,000, related to the subordinated debt acquired in the acquisition, and an increase in non-interest expense of $509,000, primarily due to merger-related expenses of $407,000.

The following table presents disaggregated net income (loss):

	Three months ended,												Six months ended,
	6/30/2026				6/30/2025				Variance				6/30/2026				6/30/2025				Variance
QNB Bank	$	4,575,000			$	4,679,000			$	(104,000	)		$	8,334,000			$	7,971,000			$	363,000
QNB Corp		(1,560,000	)			(796,000	)			(764,000	)			(2,554,000	)			(1,510,000	)			(1,044,000	)
Consolidated net income	$	3,015,000			$	3,883,000			$	(868,000	)		$	5,780,000			$	6,461,000			$	(681,000	)
Adjusted Consolidated net income excluding impact of merger-related costs (Non-GAAP*)	$	5,242,000			$	3,883,000			$	1,359,000			$	9,029,000			$	6,461,000			$	2,568,000

Total assets as of June 30, 2026 were $2,398,970,000 compared with $1,906,005,000 at December 31, 2025. Loans receivable increased to $1,716,599,000 and total deposits increased to $2,067,151,000.

“Our second-quarter results reflect the strength of our core banking franchise and the successful completion of the Victory Bancorp acquisition,” said Dave Freeman, President and Chief Executive Officer. “While reported earnings were impacted by merger-related expenses, adjusted results demonstrated meaningful earnings growth driven by higher net interest income, improved net interest margin, and the addition of a quality loan and deposit portfolio. We are pleased with the early results of the integration and remain focused on delivering long-term value for our shareholders, customers, and communities.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended June 2026 totaled $18,351,000, an increase of $5,699,000, from the same period in 2025. Tax-equivalent net interest margin was 3.16% for the second quarter of 2026 and 2.69% for the same period in 2025, an increase of 47 basis points. Tax-equivalent net interest margin was 3.00% for the six months ended June 30, 2026, compared with 2.60% for the same period in 2025.

The yield on earning assets was 5.26% for the second quarter of 2026 compared to 4.90% for the second quarter of 2025, an increase of 36 basis points. For the six-month period ended June 30, 2026, the yield on earning assets was 5.06%, compared with 4.85% for the same period in 2025; an increase of 21 basis points.

The cost of interest-bearing liabilities was 2.54% for the second quarter ended June 30, 2026, compared with 2.68% for the same period in 2025, a decrease of 14 basis points. For the six-month period ended June 30, 2026, the cost of interest-bearing liabilities was 2.49%, compared with 2.72% for the same period in 2025, a decrease of 23 basis points.

Quarterly average loan growth of $493,981,000 was offset by an increase in average deposits of $426,776,000 an increase in subordinated debt of $14,850,000 and an increase in shareholders' equity of $72,612,000, primarily due to the acquisition as $408,379,000 in loans, $409,165,000 in deposits and $47,101,000 in equity were added upon the close of the Victory merger. Loan growth was primarily in commercial real estate, which comprised 54.4% of average earning assets in the second quarter of 2026 compared with 45.5% for the same period in 2025, and the increases in both rates and volume in commercial real estate loans contributed to the 29 basis-point increase in the yield on loans. The average rate paid on interest-bearing deposits decreased 12 basis points.  The ten basis point decrease in the rate on subordinated debt was due to volume.

Asset Quality, Provision for Credit Losses on Loans and Allowance for Credit Losses

QNB recorded a $218,000 provision for credit losses on loans in the second quarter of 2026 compared to a $145,000 reversal of provision in the second quarter of 2025. QNB recorded a $521,000 provision for credit losses on loans in the six months ended June 30, 2026 compared to a $406,000 provision in the same period of 2025. QNB added $3,020,00 in allowance for credit losses due to the acquisition. QNB's allowance for credit losses on loans of $12,770,000 represents 0.74% of loans receivable at June 30, 2026, compared to $9,215,000, or 0.73% of loans receivable at December 31, 2025. Net loan recoveries were $1,000 for the quarter ended June 30, 2026, compared with recoveries of $16,000 for the same period in 2025. Net recoveries for the six months ended June 30, 2026 were $14,000 compared with recoveries of $19,000 for the same period of 2025.

Total non-performing loans, which represent loans on non-accrual status and loans past due 90 days or more and still accruing interest, were $10,418,000, or 0.61% of loans receivable at June 30, 2026, compared with $8,793,000, or 0.70% of loans receivable at December 31, 2025. The increase was primarily due to two commercial and one retail customer. In cases where there is a collateral shortfall on non-accrual loans, specific reserves have been established based on updated collateral values even if the borrower continues to pay in accordance with the terms of the agreement. At June 30, 2026, $7,832,000, or approximately 75% of the loans classified as non-accrual, are current or past due less than 30 days. Commercial loans classified as substandard or doubtful loans totaled $49,159,000 at June 30, 2026, compared with $39,516,000 at December 31, 2025, an increase of $9,937,000 which includes $6,475,000 of commercial real estate loans and $3,808,000 of commercial and industrial loans acquired.

Non-Interest Income

Total non-interest income for 2026 includes three months of impact from the acquisition. Noninterest income was $2,139,000 for the second quarter of 2026 compared with $1,652,000 for the same period in 2025; and $3,940,000 for the six months ended June 30, 2026 compared with $3,236,000 for the same period of 2025. The Bank also completed the exchange offer to convert its Visa B-2 shares to B-3 and C shares; the Bank subsequently converted one-third of the Visa C shares to Visa A shares and recorded a $268,000 unrealized gain.  Non-interest income for the three- and six-months ended June 30, 2026 also included $96,000 of realized gains on the sales of investment securities and a $303,000 loss on the termination of an interest-rate swap acquired in the acquisition.

Fees for services to customers increased $173,000 for the quarter ended June, 2026, as overdraft fees increased $44,000 and other deposit-related fees increased $127,000. ATM and debit card income increased $87,000. Retail brokerage and advisory income increased $8,000 for the same period. Other non-interest income increased $126,000 for the same period due to an increase in bank-owned life insurance of $52,000, an increase in letter of credit fees of $44,000 and an increase in gains on sales of loans of $32,000.

Fees for services to customers increased $239,000 for the six months ended June, 2026, as overdraft fees increased $97,000 and other deposit-related fees increased $142,000. ATM and debit card income increased $172,000. Retail brokerage and advisory income increased $70,000 for the same six-month period. Other non-interest income increased $140,000 for the six-month period due to an increase in bank-owned life insurance of $57,000, an increase in letter of credit fees of $43,000 and an increase in gains on sales of loans of $22,000.

Non-Interest Expense

Total non-interest expense for 2026 includes three months of impact from the acquisition. Total non-interest expense was $16,436,000 for the second quarter of 2026 compared with $9,562,000 for the same period in 2025. Excluding pre-tax merger-related costs of $3,084,000, non-interest expense increased $3,790,000 for the second quarter of 2026, compared to the same period in 2025. Total non-interest expense was $27,574,000 for the six months ended June 30, 2026 compared with $18,931,000 for the same period in 2025. Excluding pre-tax merger-related costs of $3,972,000, non-interest expense increased $4,671,000 for the six months ended June 30, 2026, compared to the same period in 2025.

Salaries and benefits expense increased $1,949,000 to $7,200,000 in the second quarter of 2026, compared to the same period in 2025. Salary expense and related payroll taxes increased $1,570,000 to $6,017,000 and benefits expense increased $379,000 to $1,183,000 when comparing the two periods.

For the second quarter of 2026, net occupancy and furniture and equipment expense increased $508,000 to $2,189,000; software maintenance increased $291,000, rental expense increased $135,000 and other maintenance, utilities and costs increased $82,000. Other non-interest expense for the second quarter increased $1,333,000 due to an increase in third-party services of $405,000, core deposit amortization of $332,000, bank shares tax increased $205,000, business development cost increased $82,000, director fees increased $65,000, debit card expense increased $50,000, courier expense increased $36,000, FDIC insurance increased $33,000, communications and supplies increased $30,000, additional make-whole agreement reserve of $23,000 related the Visa stock exchange, regulatory assessments increased $22,000 and various other expenses increased a net total of $50,000. Six-month results for non-interest expense are similar to those discussed for the second quarter of 2026.

Income Taxes

Provision for income taxes decreased $188,000 to $817,000 in the second quarter of 2026 and decreased $105,000 to $1,524,000 for the six months ended June 30, 2026, due to lower taxable income, compared with the same periods in 2025. The effective tax rate increased for both the three- and six-month periods ended June 30, 2026 to 21.3% and 20.9%, respectively, from 20.6% and 20.1% for the same periods in 2025, respectively, due non-taxable merger-related costs.

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates fourteen branches in Bucks, Lehigh and Montgomery Counties along with two loan production offices in Montgomery and Berks Counties. The Bank offers commercial, small business, and personal customers banking services, borrowing solutions, and cash management tools in the communities they serve. In addition, the Company provides securities and advisory services under the name of QNB Financial Services through a registered Broker/Dealer and Registered Investment Advisor, and title insurance as a member of Laurel Abstract Company LLC. More information about QNB Corp. and QNB Bank is available at QNBBank.com.

Forward Looking Statement

This press release may contain forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that increased demand or prices for the Company’s financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission, including "Item lA. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Contacts:	David W. Freeman	Jeffrey Lehocky
	President & Chief Executive Officer	Chief Financial Officer
	215-538-5600 x-5619	215-538-5600 x-5716
	dfreeman@QNBbank.com	jlehocky@QNBbank.com

QNB Corp.
Consolidated Selected Financial Data (unaudited)
(Dollars in thousands)
Balance Sheet (Period End)	6/30/26			3/31/26			12/31/25			9/30/25			6/30/25
Assets	$	2,398,970		$	1,923,123		$	1,906,005		$	1,903,244		$	1,884,828
Cash and cash equivalents		79,340			56,603			50,297			66,331			66,471
Investment securities
Debt securities, AFS		516,978			528,007			542,830			538,318			544,262
Loans held-for-sale		395			1,199			246			—			1,166
Loans receivable		1,716,599			1,282,773			1,262,074			1,246,529			1,218,539
Allowance for credit losses on loans		(12,770	)		(9,531	)		(9,215	)		(9,255	)		(9,169	)
Net loans		1,703,829			1,273,242			1,252,859			1,237,274			1,209,370
Deposits		2,067,151			1,653,431			1,642,511			1,681,540			1,651,667
Demand, non-interest bearing		266,120			187,580			189,957			189,492			201,460
Interest-bearing demand, money market and savings		1,367,300			1,099,480			1,076,757			1,104,761			1,060,688
Time		433,731			366,371			375,797			387,287			389,519
Short-term borrowings		75,428			86,806			80,601			48,703			67,464
Long-term debt		—			—			—			—			—
Subordinated debt		54,018			39,318			39,268			39,218			39,168
Shareholders' equity		183,514			131,384			129,563			121,487			113,269
Asset Quality Data (Period End)
Non-accrual loans	$	10,418		$	9,614		$	8,793		$	8,947		$	8,947
Loans past due 90 days or more and still accruing		—			—			—			—			—
Non-performing loans		10,418			9,614			8,793			8,947			8,947
Other real estate owned and repossessed assets		—			—			—			—			—
Non-performing assets	$	10,418		$	9,614		$	8,793		$	8,947		$	8,947
Allowance for credit losses on loans	$	12,770		$	9,531		$	9,215		$	9,255		$	9,169
Non-performing loans / Loans excluding held-for-sale		0.61	%		0.75	%		0.70	%		0.72	%		0.73	%
Non-performing assets / Assets		0.43	%		0.50	%		0.46	%		0.47	%		0.47	%
Allowance for credit losses on loans / Loans excluding held-for-sale		0.74	%		0.74	%		0.73	%		0.74	%		0.75	%

QNB Corp.
Consolidated Selected Financial Data (unaudited)
(Dollars in thousands, except per share data)	Three months ended,																Six months ended,
For the period:	6/30/26			3/31/26			12/31/25			9/30/25			6/30/25				6/30/26			6/30/25
Interest income	$	30,631		$	22,476		$	23,812		$	23,518		$	23,110			$	53,107		$	45,308
Interest expense		12,280			9,367			9,770			10,520			10,458				21,647			21,119
Net interest income		18,351			13,109			14,042			12,998			12,652				31,460			24,189
(Reversal of) provision for credit losses		222			300			(48	)		93			(146	)			522			404
Net interest income after provision for credit losses		18,129			12,809			14,090			12,905			12,798				30,938			23,785
Non-interest income:
Fees for services to customers		658			513			533			521			485				1,171			932
ATM and debit card		811			741			835			776			724				1,552			1,380
Retail brokerage and advisory income		148			203			171			196			140				351			281
Net gain on sale of securities		96			—			—			—			—				96			—
Net unrealized gain on equity securities		268			—			—			—			—				268			—
Net loss on interest-rate swap termination		(303	)		—			—			—			—				(303	)		—
Net (loss) gain on sale of loans		36			8			—			41			4				44			22
Other		425			336			335			313			299				761			621
Total non-interest income		2,139			1,801			1,874			1,847			1,652				3,940			3,236
Non-interest expense:
Salaries and employee benefits		7,200			5,616			5,730			5,248			5,251				12,816			10,283
Net occupancy and furniture and equipment		2,189			1,892			1,649			1,688			1,681				4,081			3,417
Merger-related expense		3,084			888			619.00			519.00			—				3,972			—
Other		3,963			2,742			2,696			2,727			2,630				6,705			5,231
Total non-interest expense		16,436			11,138			10,694			10,182			9,562				27,574			18,931
Income before income taxes		3,832			3,472			5,270			4,570			4,888				7,304			8,090
Provision for income taxes		817			707			1,289			922			1,005				1,524			1,629
Net income	$	3,015		$	2,765		$	3,981		$	3,648		$	3,883			$	5,780		$	6,461
Share and Per Share Data:
Net income - basic	$	0.61		$	0.74		$	1.07		$	0.98		$	1.05			$	1.32		$	1.74
Net income - diluted	$	0.60		$	0.73		$	1.06		$	0.98		$	1.04			$	1.32		$	1.74
Book value	$	36.87		$	34.72		$	34.65		$	32.59		$	30.46			$	36.87		$	30.46
Cash dividends	$	0.39		$	0.39		$	0.38		$	0.38		$	0.38			$	0.78		$	0.76
Average common shares outstanding -basic		4,968,665			3,760,664			3,730,591			3,721,501			3,710,878				4,368,001			3,705,396
Average common shares outstanding -diluted		5,001,610			3,775,579			3,745,230			3,735,993			3,724,808				4,390,153			3,718,513
Selected Ratios:
Return on average asset		0.50	%		0.59	%		0.83	%		0.76	%		0.83	%			0.54	%		0.69	%
Return on average shareholders' equity		6.65	%		8.40	%		12.52	%		12.49	%		14.25	%			7.38	%		12.02	%
Net interest margin (tax equivalent)		3.16	%		2.82	%		2.95	%		2.72	%		2.69	%			3.00	%		2.60	%
Efficiency ratio (tax equivalent)		79.90	%		73.97	%		66.79	%		68.09	%		66.39	%			77.39	%		68.43	%
Average shareholders' equity to total average assets		7.59	%		6.99	%		6.64	%		6.09	%		5.79	%			7.33	%		5.77	%
Net loan (recoveries) charge-offs	$	(1	)	$	(13	)	$	(4	)	$	12		$	(16	)		$	(14	)	$	(19	)
Net loan (recoveries) charge-offs-annualized / Average loans excluding held-for-sale		0.00	%		0.00	%		0.00	%		0.00	%		-0.01	%			0.00	%		0.00	%
Balance Sheet (Average)
Assets	$	2,395,752		$	1,909,962		$	1,901,870		$	1,904,529		$	1,887,138			$	2,154,199		$	1,880,127
Investment securities		587,867			596,894			604,727			612,204			621,128				592,355			623,827
Loans receivable		1,709,599			1,273,380			1,249,481			1,224,490			1,216,011				1,492,696			1,213,173
Deposits		2,074,766			1,638,840			1,671,921			1,678,118			1,647,990				1,858,007			1,640,634
Shareholders' equity		181,911			133,514			126,202			115,907			109,299				157,846			108,406

QNB Corp. (Consolidated)
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)
	Three Months Ended
	June 30, 2026										June 30, 2025
	Average			Average							Average			Average
	Balance			Rate			Interest				Balance			Rate			Interest
Assets
Federal funds sold	$	1,163			3.63	%	$	11			$	—			0.00	%	$	—
Investment securities:
U.S. Treasury		20,812			3.68			191				21,032			4.24			223
U.S. Government agencies		75,972			1.18			224				75,963			1.18			224
State and municipal		104,927			2.35			617				105,090			2.88			756
Mortgage-backed and CMOs		318,255			1.95			1,551				354,349			2.46			2,184
Corporate debt securities and mutual funds		67,798			5.90			1,000				64,694			6.38			1,031
Equities		103			-			-							-			-
Total investment securities		587,867			2.44			3,583				621,128			2.84			4,418
Loans:
Commercial real estate		1,276,622			6.31			20,097				863,096			5.94			12,775
Residential real estate		122,950			4.63			1,424				114,600			4.38			1,255
Home equity loans		102,997			6.13			1,575				70,666			6.41			1,130
Commercial and industrial		181,167			7.12			3,213				145,261			7.41			2,682
Consumer loans		5,328			7.59			101				3,355			7.70			65
Tax-exempt loans		21,242			5.31			281				19,347			4.23			205
Total loans, net of unearned income*		1,710,306			6.26			26,691				1,216,325			5.97			18,112
Other earning assets		45,439			4.05			429				61,355			4.45			680
Total earning assets		2,344,775			5.26			30,714				1,898,808			4.90			23,210
Cash and due from banks		28,030										13,806
Accumulated other comprehensive loss, net of tax		(45,720	)									(59,921	)
Allowance for credit losses on loans		(12,668	)									(9,376	)
Other assets		81,335										43,864
Total assets	$	2,395,752									$	1,887,181
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing demand	$	483,798			1.19	%		1,438			$	376,735			0.94	%		888
Municipals		150,200			3.26			1,222				146,214			3.92			1,427
Money market		386,952			2.79			2,691				259,621			2.88			1,862
Savings		352,087			1.55			1,361				281,076			1.29			901
Time < $250		358,826			3.30			2,956				334,437			3.79			3,159
Time > $250		82,968			3.56			736				51,832			4.08			527
Total interest-bearing deposits		1,814,831			2.30			10,404				1,449,915			2.42			8,764
Short-term borrowings		69,006			3.46			596				70,942			3.90			689
Long-term debt		—			—			—				5,495			4.79			67
Subordinated debt		53,991			9.48			1,280				39,141			9.58			938
Total borrowings		122,997			6.12			1,876				115,578			5.88			1,694
Total interest-bearing liabilities		1,937,828			2.54			12,280				1,565,493			2.68			10,458
Non-interest-bearing deposits		259,935										198,075
Other liabilities		16,078										14,314
Shareholders' equity		181,911										109,299
Total liabilities and shareholders' equity	$	2,395,752									$	1,887,181
Net interest rate spread					2.72	%									2.22	%
Margin/net interest income					3.16	%	$	18,434							2.69	%	$	12,752
Tax-exempt securities and loans were adjusted to a tax-equivalent basis and are based on the Federal corporate tax rate of 21%
Non-accrual loans and investment securities are included in earning assets.
* Includes loans held-for-sale

QNB Corp. (Consolidated)
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)
	Six Months Ended
	June 30, 2026										June 30, 2025
	Average			Average							Average			Average
	Balance			Rate			Interest				Balance			Rate			Interest
Assets
Federal funds sold	$	585			3.63	%	$	11			$	—			0.00	%	$	—
Investment securities:
U.S. Treasury		20,819			3.70			382				20,596			4.31			440
U.S. Government agencies		75,971			1.18			448				75,962			1.18			448
State and municipal		104,727			2.33			1,220				105,172			2.87			1,510
Mortgage-backed and CMOs		321,556			1.93			3,099				358,969			2.45			4,392
Corporate debt securities and mutual funds		69,230			5.86			2,028				63,128			6.62			2,089
Equities		52			—			—				—			—			—
Total investment securities		592,355			2.42			7,177				623,827			2.85			8,879
Loans:
Commercial real estate		1,094,783			6.18			33,541				860,363			5.82			24,844
Residential real estate		122,661			4.59			2,816				114,436			4.36			2,493
Home equity loans		89,839			6.00			2,674				69,327			6.41			2,204
Commercial and industrial		161,296			7.08			5,661				146,962			7.41			5,399
Consumer loans		4,137			7.70			158				3,400			7.69			130
Tax-exempt loans		20,444			5.09			516				19,073			4.19			397
Total loans, net of unearned income*		1,493,160			6.13			45,366				1,213,561			5.89			35,467
Other earning assets		41,293			3.82			783				54,536			4.44			1,202
Total earning assets		2,127,393			5.06			53,337				1,891,924			4.85			45,548
Cash and due from banks		20,505										13,517
Accumulated other comprehensive loss, net of tax		(45,094	)									(59,954	)
Allowance for credit losses on loans		(10,992	)									(9,059	)
Other assets		62,387										43,699
Total assets	$	2,154,199									$	1,880,127
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing demand	$	441,756			1.08	%		2,369			$	378,504			0.98	%		1,832
Municipals		142,712			3.23			2,285				147,887			3.93			2,883
Money market		321,450			2.69			4,294				257,952			2.88			3,680
Savings		318,359			1.43			2,264				280,371			1.29			1,794
Time < $250		337,703			3.34			5,594				333,536			3.89			6,442
Time > $250		71,069			3.59			1,266				50,317			4.19			1,045
Total interest-bearing deposits		1,633,049			2.23			18,072				1,448,567			2.46			17,676
Short-term borrowings		76,249			3.59			1,358				59,300			3.90			1,145
Long-term debt		—			—			—				17,735			4.74			423
Subordinated debt		46,681			9.50			2,217				39,117			9.59			1,875
Total borrowings		122,930			5.86			3,575				116,152			5.98			3,443
Total interest-bearing liabilities		1,755,979			2.49			21,647				1,564,719			2.72			21,119
Non-interest-bearing deposits		224,958										192,067
Other liabilities		15,416										14,935
Shareholders' equity		157,846										108,406
Total liabilities and shareholders' equity	$	2,154,199									$	1,880,127
Net interest rate spread					2.57	%									2.13	%
Margin/net interest income					3.00	%	$	31,690							2.60	%	$	24,429
Tax-exempt securities and loans were adjusted to a tax-equivalent basis and are based on the Federal corporate tax rate of 21%
Non-accrual loans and investment securities are included in earning assets.
* Includes loans held-for-sale

QNB Corp.
Consolidated Selected Financial Data (unaudited)
Impact of Merger-Related Costs--GAAP to Non-GAAP Measure Reconciliation
(Dollars in thousands, except per share data)
	Three months ended,												Six months ended,
For the period:	6/30/2026				6/30/2025				Variance				6/30/2026				6/30/2025				Variance
Net income (GAAP)	$	3,015			$	3,883			$	(868	)		$	5,780			$	6,461			$	(681	)
Merger-related costs		3,084				—				3,084				3,972				—				3,972
Income tax benefit		(857	)			—				(857	)			(723	)			—				(723	)
Merger-related costs, net of tax		2,227				—				2,227				3,249				—				3,249
Net income excluding impact of merger-related costs (Non-GAAP)	$	5,242			$	3,883			$	1,359			$	9,029			$	6,461			$	2,568
Share and Earnings Per Share (EPS) Data:
Basic:
EPS using Net income (GAAP)	$	0.61			$	1.05			$	(0.44	)		$	1.32			$	1.74			$	(0.42	)
EPS using Net income excluding impact of merger-related costs (Non-GAAP)	$	1.06			$	1.05			$	0.01			$	2.06			$	1.74			$	0.32
Fully-diluted:
EPS using Net income (GAAP)	$	0.60			$	1.04			$	(0.44	)		$	1.32			$	1.74			$	(0.42	)
EPS using Net income excluding impact of merger-related costs (Non-GAAP)	$	1.05			$	1.04			$	0.01			$	2.06			$	1.74			$	0.32
Average common shares outstanding -basic		4,968,665				3,710,878								4,368,001				3,705,396
Average common shares outstanding -diluted		5,001,610				3,724,808								4,390,153				3,718,513
Selected Ratios:
Return on Average Assets (ROAA):
ROAA using Net income (GAAP)		0.50	%			0.83	%		-33 bp					0.54	%			0.69	%		-15 bp
ROAA using Net income excluding impact of merger-related costs (Non-GAAP)		0.88	%			0.83	%		5 bp					0.85	%			0.69	%		16 bp
Return on Average Equity (ROAE):
ROAE using Net income (GAAP)		6.65	%			14.25	%		-760 bp					7.38	%			12.02	%		-464 bp
ROAE using Net income excluding impact of merger-related costs (Non-GAAP)		11.56	%			14.25	%		-269 bp					11.54	%			12.02	%		-48 bp
Efficiency Ratio:
Efficiency Ratio (GAAP)		79.90	%			66.39	%		1351 bp					77.39	%			68.43	%		896 bp
Efficiency Ratio excluding impact of merger-related costs (Non-GAAP)		64.90	%			66.39	%		-149 bp					66.24	%			68.43	%		-219 bp

FAQ

How did QNB Corp (QNBC) perform financially in the second quarter of 2026?

QNB Corp reported Q2 2026 net income of $3.02 million, or $0.60 diluted EPS. According to QNB Corp, adjusted for merger-related costs, net income was $5.24 million and diluted EPS was $1.05, slightly above the prior-year quarter’s $1.04.

What was the impact of the Victory Bancorp acquisition on QNBC’s Q2 2026 results?

The Victory Bancorp acquisition closed on April 1, 2026 and added loans, deposits and equity. According to QNB Corp, total assets reached nearly $2.4 billion, with $408.4 million in loans and $409.2 million in deposits added at closing.

How did QNB Corp’s net interest margin change in Q2 2026 compared to Q2 2025?

QNB Corp’s tax-equivalent net interest margin rose to 3.16% in Q2 2026 from 2.69% a year earlier. According to QNB Corp, higher yields on earning assets and lower costs on interest-bearing liabilities contributed to this 47 basis-point increase.

What were QNB Corp’s asset, loan, and deposit levels as of June 30, 2026 (QNBC)?

As of June 30, 2026, QNB Corp reported total assets of $2.40 billion. According to QNB Corp, loans receivable were $1.72 billion and total deposits were $2.07 billion, reflecting the completed Victory Bancorp acquisition.

How did merger-related costs affect QNB Corp’s earnings in the first half of 2026?

Merger-related costs reduced reported earnings in 2026. According to QNB Corp, after-tax merger-related costs were $2.23 million in Q2 and $3.25 million for H1, with adjusted net income of $9.03 million versus GAAP net income of $5.78 million.

What is the trend in QNB Corp’s non-interest income and expenses in Q2 2026?

Non-interest income increased to $2.14 million in Q2 2026 from $1.65 million in Q2 2025. According to QNB Corp, non-interest expense rose to $16.44 million, including $3.08 million pre-tax merger-related costs and higher salaries, occupancy and third-party services.

How did QNB Corp’s asset quality and allowance for credit losses change in 2026?

At June 30, 2026, allowance for credit losses on loans was $12.77 million, or 0.74% of loans. According to QNB Corp, non-performing loans were $10.42 million (0.61% of loans) and commercial substandard/doubtful loans increased to $49.16 million, partly from acquired loans.