QNB Corp. Reports Third Quarter 2026 Results

Quarterly interest income after interest expense increased, while securities restructuring drove reported earnings into a loss.

Rhea-AI Summary

QNB (NASDAQ: QNBC) reported a third-quarter 2026 net loss of $14,774,000 as securities restructuring weighed on its quarterly results. Diluted loss per share was $2.67, versus consolidated net income of $3,648,000 a year earlier. The balance sheet restructuring produced a $27,713,000 net loss before tax. Excluding restructuring and merger-related costs, adjusted net income rose to $7,207,000 from $4,058,000, with adjusted diluted earnings per share of $1.30 versus $1.09.

Net interest income increased $6,163,000 to $19,161,000, and tax-equivalent net interest margin rose to 3.25% from 2.72%. An August offering added $48,284,000 in net proceeds through issuance of 1,232,142 common shares. Results include Victory Bancorp, acquired April 1, 2026. Nine-month net loss was $8,994,000, versus net income of $10,109,000. Non-performing loans rose to $11,688,000 at September 30 from $8,793,000 at year-end, while their share of loans fell.

19 points · 1 major

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2 major · 18 points

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Positive

• Major pointPublic offering completed August 20, 2026 added $48,284,000 in net proceeds to shareholders’ equity. 17% of market cap
• Moderate pointThird-quarter adjusted net income rose to $7,207,000 from $4,058,000; adjusted diluted EPS increased to $1.30 from $1.09.
• Moderate pointThird-quarter net interest income increased $6,163,000 to $19,161,000 versus the same period in 2025.
• Moderate pointTax-equivalent net interest margin rose to 3.25% from 2.72% quarterly and 3.09% from 2.64% year-to-date.
• Moderate pointVictory acquisition closed April 1, 2026, adding $408,379,000 in loans and $409,165,000 in deposits.

14 minor points

• Minor pointNine-month adjusted net income rose to $16,236,000 from $10,519,000; adjusted diluted EPS increased to $3.39 from $2.83.
• Minor pointEarning-asset yield rose to 5.31% from 4.91% quarterly and 5.15% from 4.87% year-to-date.
• Minor pointInterest-bearing liability costs fell to 2.52% from 2.64% quarterly and 2.50% from 2.70% year-to-date.
• Minor pointTotal assets increased to $2,361,620,000 at September 30, 2026, from $1,906,005,000 at December 31, 2025.
• Minor pointLoans receivable increased to $1,772,174,000 and total deposits increased to $2,056,299,000 at September 30, 2026.
• Minor pointAdjusted quarterly returns on average assets and equity rose to 1.19% and 14.49%, from 0.85% and 13.89%.
• Minor pointAdjusted nine-month return on average assets rose to 0.97% from 0.74%; return on equity remained 12.68%.
• Minor pointThird-quarter customer service fees increased $169,000 year over year; nine-month fees increased $408,000.
• Minor pointATM and debit card income increased $111,000 quarterly and $283,000 year-to-date versus 2025.
• Minor pointOther non-interest income increased $123,000 quarterly and $263,000 year-to-date versus 2025.
• Minor pointNine-month retail brokerage and advisory income increased $9,000 versus the same period in 2025.
• Minor pointVisa share conversions generated a $612,000 quarterly unrealized gain, bringing nine-month gains to $880,000.
• Minor pointInvestment securities sales unrelated to restructuring produced $96,000 in realized gains during the first nine months.
• Minor pointQuarterly merger-related costs declined to $251,000 from $519,000 in the third quarter of 2025.

Negative

• Major pointSecurities restructuring incurred a $27,713,000 net loss: $29,049,000 securities-sale loss partly offset by $1,336,000 swap gain. 9.7% of market cap
• Major pointPublic offering issued 1,232,142 common shares, diluting existing shareholders.
• Moderate pointCommercial real estate rose to 56.0% of average earning assets from 46.3% in third-quarter 2025.
• Moderate pointNon-interest expense excluding merger costs increased $2,820,000 quarterly and $7,491,000 year-to-date versus 2025.
• Minor pointThird-quarter net loss was $14,774,000, or $2.67 per diluted share, versus $3,648,000 net income a year earlier.

13 minor points

• Minor pointNine-month net loss was $8,994,000, or $1.89 per diluted share, versus $10,109,000 net income a year earlier.
• Minor pointQuarterly returns on average assets and equity were negative 2.44% and negative 29.70%, respectively.
• Minor pointNine-month returns on average assets and equity were negative 0.54% and negative 7.03%, respectively.
• Minor pointQuarterly average subordinated debt increased $14,708,000, primarily due to the Victory acquisition.
• Minor pointQNB parent-company quarterly net interest income decreased $369,000, related to subordinated debt acquired in the acquisition.
• Minor pointLoan credit-loss provisions rose to $379,000 from $98,000 quarterly and $900,000 from $504,000 year-to-date.
• Minor pointQuarterly net loan charge-offs increased to $102,000 from $12,000 in the same period of 2025.
• Minor pointNine-month net loan charge-offs were $88,000, versus $7,000 in recoveries in the same period of 2025.
• Minor pointNon-performing loans rose to $11,688,000 from $8,793,000 since year-end; their loan share fell to 0.66% from 0.70%.
• Minor pointSubstandard or doubtful commercial loans increased $5,402,000 to $44,621,000 since year-end, primarily from acquired loans.
• Minor pointThird-quarter retail brokerage and advisory income decreased $61,000 versus the same period of 2025.
• Minor pointGains on loan sales decreased $39,000 quarterly and $17,000 year-to-date due to sales volume.
• Minor pointTermination of an acquired interest-rate swap caused a $303,000 nine-month loss, unrelated to restructuring.

News Explained

The August offering is complete: QNB issued 1,232,142 common shares, increasing the share count and reducing existing holders’ percentage ownership absent offsetting changes.

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QUAKERTOWN, Pa., Oct. 27, 2026 (GLOBE NEWSWIRE) -- QNB Corp. (the “Company” or “QNB”) (NASDAQ: QNBC), the parent company of QNB Bank (the “Bank”), reported a net loss for the third quarter of 2026 of $14,774,000 or a loss of $2.67 per share on a diluted basis. QNB announced the launch and pricing of an underwritten public offering on August 19, 2026. The offering was completed on August 20, 2026 for the issuance of a total of 1,232,142 common shares which added $48,284,000, proceeds net of underwriting discounts and related costs, to shareholders' equity. QNB announced on September 8, 2026 the execution of a strategic repositioning of a portion of its securities available-for-sale portfolio (the "balance sheet restructuring"). QNB sold $250,712,000 in available for sale securities at a loss of $29,049,000 and unwound the related swap for a gain of $1,336,000. QNB also previously announced the acquisition of Victory Bancorp, Inc. ("Victory"), a highly complementary community banking franchise headquartered in Limerick, Pennsylvania, was officially closed on April 1, 2026. Results for the three and nine months of 2026 include three and six months, respectively, of post-merger activity related to the acquisition of Victory. The merger-related costs are significant one-time costs and are not normal recurring operating expenses. 

Net loss for the third quarter of 2026 included a net loss of $27,713,000 due to the balance sheet restructuring and merger-related costs of $251,000 compared to $519,000 in the third quarter of 2025. Excluding the impact of the balance sheet restructuring and the merger-related costs, net of tax of $21,981,000, adjusted net income was $7,207,000 and adjusted diluted earnings per share was $1.30*. This compares to adjusted net income, excluding the merger-related costs, net of tax, of $410,000 of $4,058,000, or $1.09* per share on a diluted basis, for the same period in 2025. For the nine months ended September 30, 2026, QNB reported a net loss of $8,994,000, or a loss of $1.89 per share on a diluted basis. Net income included merger-related costs, net of tax, of $3,249,000.  Excluding the impact of the balance sheet restructuring and the merger-related costs, adjusted net income was $16,236,000 and adjusted diluted earnings per share was $3.39*. This compares to net income, excluding merger-related costs, of $10,519,000, or $2.83* per share on a diluted basis, reported for the same period in 2025.

For the third quarter ended September 30, 2026, the annualized rate of return on average assets (ROAA) and average shareholders’ equity (ROAE) was negative 2.44% and a negative 29.70%, respectively. Adjusted ROAA and ROAE, excluding the impacts of the balance sheet restructuring and merger-related costs, for the three-month period of 2026 was 1.19%* and 14.49%*, respectively. This compares with adjusted ROAA and ROAE, excluding the impact of merger-related costs 0.85%* and 13.89%*, respectively, for the third quarter 2025.  For the nine months ended September 30, 2026, QNB reported ROAA and ROAE of a negative 0.54% and a negative 7.03%, respectively. Adjusted annualized ROAA and ROAE, excluding the impacts of the balance sheet restructuring and merger-related cost, for the nine-month period of 2026 was 0.97%* and 12.68%*, respectively. This compares with adjusted ROAA and ROAE, excluding the impact of merger-related costs 0.74%* and 12.68%*, respectively, for the same period in 2025.  

The operating performance of the Bank, a wholly-owned subsidiary of QNB Corp., included three months of post-merger activity and the impact of the balance sheet restructuring during the third quarter of 2026. Excluding the impacts of the balance sheet restructuring and merger related costs, net of tax, at the Bank, the operating performance at the Bank improved for the quarter ended September 30, 2026, in comparison with the same period in 2025, due primarily to improvement in the interest margin causing a $6,532,000 increase in net interest income and a $927,000 increase in non-interest income; this was partly offset by an increase in non-interest expense of $2,709,000. The contribution from QNB Corp., which included three months of post-merger activity, for the quarter ended September 30, 2026, declined compared with the same period in 2025, primarily due to a decrease in net interest income of $369,000, related to the subordinated debt acquired in the acquisition, a decrease in merger-related costs of $355,000 and an increase in other non-interest expense of $123,000.

The following table presents disaggregated net income (loss):

	Three months ended,												Nine months ended,
	9/30/2026				9/30/2025				Variance				9/30/2026				9/30/2025				Variance
QNB Bank	$	(13,440,000	)		$	4,837,000			$	(18,277,000	)		$	(5,106,000	)		$	12,808,000			$	(17,914,000	)
QNB Corp		(1,334,000	)			(1,189,000	)			(145,000	)			(3,888,000	)			(2,699,000	)			(1,189,000	)
Consolidated net (loss) income	$	(14,774,000	)		$	3,648,000			$	(18,422,000	)		$	(8,994,000	)		$	10,109,000			$	(19,103,000	)
Adjusted Consolidated net income excluding impact of balance sheet restructuring and merger-related costs (Non-GAAP*)	$	7,207,000			$	4,058,000			$	3,149,000			$	16,236,000			$	10,519,000			$	5,717,000

^{* 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."}

Total assets as of September 30, 2026 were $2,361,620,000 compared with $1,906,005,000 at December 31, 2025. Loans receivable increased to $1,772,174,000 and total deposits increased to $2,056,299,000.

“Our third-quarter results reflect a period of significant strategic progress for QNB. We have strengthened our capital position through our public offering," said Dave Freeman, President and Chief Executive Officer. "While reported earnings were impacted by the balance sheet restructuring and final merger-related expenses, the underlying performance of our franchise remained strong. Adjusted earnings improved meaningfully compared to the prior year, supported by higher net interest income, margin expansion, strong loan growth, and the successful integration of Victory Bancorp, where we are realizing meaningful synergies, particularly through robust loan growth. Importantly, the balance sheet restructuring positions us to benefit from further earnings improvement in future periods. These actions have strengthened our balance sheet, enhanced our market presence, and positioned QNB for continued growth and profitability.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended September 2026 totaled $19,161,000, an increase of $6,163,000, from the same period in 2025. Tax-equivalent net interest margin was 3.25% for the third quarter of 2026 and 2.72% for the same period in 2025, an increase of 53 basis points. Tax-equivalent net interest margin was 3.09% for the nine months ended September 30, 2026, compared with 2.64% for the same period in 2025.

The yield on earning assets was 5.31% for the third quarter of 2026 compared to 4.91% for the third quarter of 2025, an increase of 40 basis points. For the nine-month period ended September 30, 2026, the yield on earning assets was 5.15%, compared with 4.87% for the same period in 2025; an increase of 28 basis points.

The cost of interest-bearing liabilities was 2.52% for the third quarter ended September 30, 2026, compared with 2.64% for the same period in 2025, a decrease of 12 basis points. For the nine-month period ended September 30, 2026, the cost of interest-bearing liabilities was 2.50%, compared with 2.70% for the same period in 2025, a decrease of 20 basis points.

Quarterly average loan growth of $509,380,000 was offset by an increase in average deposits of $397,272,000, an increase in subordinated debt of $14,708,000 and an increase in shareholders' equity of $81,475,000, primarily due to the acquisition of $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. Additionally, equity was impacted by the $48,284,000 in net proceeds from the public offering.

Loan growth was primarily in commercial real estate, which comprised 56.0% of average earning assets in the third quarter of 2026 compared with 46.3% for the same period in 2025, and the increases in both rates and volume in commercial real estate loans contributed to the 24 basis-point increase in the yield on loans. The average rate paid on interest-bearing deposits decreased 13 basis points.  The 41-basis point decrease in the rate on short-term borrowings was due to both rate and volume.

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

QNB recorded a $379,000 provision for credit losses on loans in the third quarter of 2026 compared to a $98,000 provision in the third quarter of 2025. QNB recorded a $900,000 provision for credit losses on loans in the nine months ended September 30, 2026 compared to a $504,000 provision in the same period of 2025. QNB added $3,020,000 in allowance for credit losses due to the acquisition in the second quarter of 2026. QNB's allowance for credit losses on loans of $13,047,000 represents 0.74% of loans receivable at September 30, 2026, compared to $9,215,000, or 0.73% of loans receivable at December 31, 2025. Net loan charge-offs were $102,000 for the quarter ended September 30, 2026, compared with $12,000 for the same period in 2025. Net charge-offs for the nine months ended September 30, 2026 were $88,000 compared with recoveries of $7,000 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 $11,688,000, or 0.66% of loans receivable at September 30, 2026, compared with $8,793,000, or 0.70% of loans receivable at December 31, 2025. The increase was primarily due to four 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 September 30, 2026, $8,282,000, or approximately 71% 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 $44,621,000 at September 30, 2026, compared with $39,219,000 at December 31, 2025, an increase of $5,402,000 primarily due to commercial real estate and commercial and industrial loans acquired.

Non-Interest Income

Total non-interest income for 2026 includes three months for the quarter and six months for the nine months ended September 30, 2026 of impact from the acquisition. Noninterest income was a negative $24,951,000 for the third quarter of 2026 compared with $1,847,000 for the same period in 2025; and a negative $21,011,000 for the nine months ended September 30, 2026 compared with $5,083,000 for the same period of 2025. Non-interest income for the three and nine months ended September 30, 2026 includes the negative impact of the balance sheet restructuring of $27,713,000. Non-interest income for the nine months ended September 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, both are unrelated to the balance sheet restructuring. The Bank completed the exchange offer to convert its Visa B-2 shares to B-3 and C shares in the second quarter of 2026; the Bank subsequently converted the remaining two-thirds of the Visa C shares to Visa A shares and recorded a $612,000 unrealized gain; a total of $880,000 for the nine months of 2026.  Excluding these gains and losses, non-interest income increased $303,000 to $2,150,000 from 1,847,000 for the third quarter; and increased $946,000 to $6,029,000 from $5,083,000 for the nine-month period.  

Fees for services to customers increased $169,000 for the quarter ended September 30, 2026, as overdraft fees increased $53,000 and other deposit-related fees increased $116,000. ATM and debit card income increased $111,000. Retail brokerage and advisory income decreased $61,000 for the same period. Gains on sales of loans decreased $39,000 due to volume of sales. Other non-interest income increased $123,000 for the same period due to an increase in bank-owned life insurance of $48,000, an increase in letter of credit fees of $42,000, an increase other loan servicing fees of $20,000 and an increase in credit card income of $7,000.

Fees for services to customers increased $408,000 for the nine months ended September 30, 2026, as overdraft fees increased $150,000 and other deposit-related fees increased $258,000. ATM and debit card income increased $283,000. Retail brokerage and advisory income increased $9,000 for the same nine-month period. Gains on sales of loans decreased $17,000 due to volume of sales. Other non-interest income increased $263,000 for the nine-month period due to an increase in bank-owned life insurance of $105,000, an increase in letter of credit fees of $85,000, an increase in other loan servicing fees of $29,000, an increase in title company income of $26,000 and an increase in credit card income of $20,000.

Non-Interest Expense

Total non-interest expense for 2026 includes three and six months of impact from the acquisition for the third quarter and nine-month period ending September 30, 2026, respectively. Total non-interest expense was $12,734,000 for the third quarter of 2026 compared with $10,182,000 for the same period in 2025. Excluding pre-tax merger-related costs, non-interest expense increased $2,820,000 for the third quarter of 2026, compared to the same period in 2025. Total non-interest expense was $40,308,000 for the nine months ended September 30, 2026 compared with $29,113,000 for the same period in 2025. Excluding pre-tax merger-related costs, non-interest expense increased $7,491,000 for the nine months ended September 30, 2026, compared to the same period in 2025.

Salaries and benefits expense increased $1,640,000 to $6,888,000 in the third quarter of 2026, compared to the same period in 2025. Salary expense and related payroll taxes increased $1,401,000 to $6,017,000 and benefits expense increased $239,000 to $871,000 when comparing the two periods.

For the third quarter of 2026, net occupancy and furniture and equipment expense increased $304,000 to $1,992,000 as rental expense increased $156,000, depreciation increased $74,000, maintenance, utilities and costs increased $74,000. Other non-interest expense for the third quarter increased $876,000 due to increases in third-party services of $79,000, core deposit amortization of $332,000, marketing expense of $159,000, FDIC insurance of $119,000, courier expense increased $53,000, bank shares tax of $41,000, business development cost increased $35,000, communications and supplies increased $27,000, and various other expenses increased a net total of $34,000. Nine-month results for non-interest expense are similar to those discussed for the third quarter of 2026.

Income Taxes

Provision for income taxes decreased $5,048,000 to a benefit of $4,126,000 in the third quarter of 2026 and decreased $5,153,000 to a benefit of $2,602,000 for the nine months ended September 30, 2026, due to lower taxable income, compared with the same periods in 2025. The effective tax rate increased for both the three- and nine-month periods ended September 30, 2026 to 21.8% and 22.4%, respectively, from 20.2% and 20.2% 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)	9/30/26			6/30/26			3/31/26			12/31/25			9/30/25
Assets	$	2,361,620		$	2,398,970		$	1,923,123		$	1,906,005		$	1,903,244
Cash and cash equivalents		106,428			79,340			56,603			50,297			66,331
Investment securities
Debt securities, AFS		397,563			516,978			528,007			542,830			538,318
Loans held-for-sale		163			395			1,199			246			—
Loans receivable		1,772,174			1,716,599			1,282,773			1,262,074			1,246,529
Allowance for credit losses on loans		(13,047	)		(12,770	)		(9,531	)		(9,215	)		(9,255	)
Net loans		1,759,127			1,703,829			1,273,242			1,252,859			1,237,274
Deposits		2,056,299			2,067,151			1,653,431			1,642,511			1,681,540
Demand, non-interest bearing		251,590			266,120			187,580			189,957			189,492
Interest-bearing demand, money market and savings		1,377,626			1,367,300			1,099,480			1,076,757			1,104,761
Time		427,083			433,731			366,371			375,797			387,287
Short-term borrowings		16,500			75,428			86,806			80,601			48,703
Long-term debt		—			—			—			—			—
Subordinated debt		41,068			54,018			39,318			39,268			39,218
Shareholders' equity		226,184			183,514			131,384			129,563			121,487
Asset Quality Data (Period End)
Non-accrual loans	$	11,688		$	10,418		$	9,614		$	8,793		$	8,947
Loans past due 90 days or more and still accruing		—			—			—			—			—
Non-performing loans		11,688			10,418			9,614			8,793			8,947
Other real estate owned and repossessed assets		—			—			—			—			—
Non-performing assets	$	11,688		$	10,418		$	9,614		$	8,793		$	8,947
Allowance for credit losses on loans	$	13,047		$	12,770		$	9,531		$	9,215		$	9,255
Non-performing loans / Loans excluding held-for-sale		0.66	%		0.61	%		0.75	%		0.70	%		0.72	%
Non-performing assets / Assets		0.49	%		0.43	%		0.50	%		0.46	%		0.47	%
Allowance for credit losses on loans / Loans excluding held-for-sale		0.74	%		0.74	%		0.74	%		0.73	%		0.74	%

 

QNB Corp.
Consolidated Selected Financial Data (unaudited)
(Dollars in thousands, except per share data)	Three months ended,																Nine months ended,
For the period:	9/30/26			6/30/26			3/31/26			12/31/25			9/30/25				9/30/26			9/30/25
Interest income	$	31,320		$	30,631		$	22,476		$	23,812		$	23,518			$	84,427		$	68,826
Interest expense		12,159			12,280			9,367			9,770			10,520				33,806			31,639
Net interest income		19,161			18,351			13,109			14,042			12,998				50,621			37,187
Provision (reversal of provision) for credit losses		376			222			300			(48	)		93				898			497
Net interest income after provision for credit losses		18,785			18,129			12,809			14,090			12,905				49,723			36,690
Non-interest income:
Fees for services to customers		690			658			513			533			521				1,861			1,453
ATM and debit card		887			811			741			835			776				2,439			2,156
Retail brokerage and advisory income		135			148			203			171			196				486			477
Net (loss) gain on sale of securities		(29,049	)		96			—			—			—				(28,953	)		—
Net unrealized gain on equity securities		612			268			—			—			—				880			—
Net gain (loss) on interest-rate swap termination		1,336			(303	)		—			—			—				1,033			—
Net gain on sale of loans		2			36			8			-			41				46			63
Other		436			425			336			335			313				1,197			934
Total non-interest (loss) income		(24,951	)		2,139			1,801			1,874			1,847				(21,011	)		5,083
Non-interest expense:
Salaries and employee benefits		6,888			7,200			5,616			5,730			5,248				19,704			15,531
Net occupancy and furniture and equipment		1,992			2,189			1,892			1,649			1,688				6,073			5,105
Merger-related expense		251			3,084			888			619			519				4,223			519
Other		3,603			3,963			2,742			2,696			2,727				10,308			7,958
Total non-interest expense		12,734			16,436			11,138			10,694			10,182				40,308			29,113
(Loss) income before income taxes		(18,900	)		3,832			3,472			5,270			4,570				(11,596	)		12,660
(Benefit) provision for income taxes		(4,126	)		817			707			1,289			922				(2,602	)		2,551
Net (loss) income	$	(14,774	)	$	3,015		$	2,765		$	3,981		$	3,648			$	(8,994	)	$	10,109
Share and Per Share Data:
Net (loss) income - basic	$	(2.67	)	$	0.61		$	0.74		$	1.07		$	0.98			$	(1.89	)	$	2.72
Net (loss) income - diluted	$	(2.67	)	$	0.60		$	0.73		$	1.06		$	0.98			$	(1.89	)	$	2.72
Book value	$	36.37		$	36.87		$	34.72		$	34.65		$	32.59			$	36.37		$	32.59
Tangible book value	$	33.74		$	33.53		$	34.72		$	34.65		$	32.59			$	33.74		$	32.59
Cash dividends	$	0.39		$	0.39		$	0.39		$	0.38		$	0.38			$	1.17		$	1.14
Average common shares outstanding -basic		5,529,869			4,968,665			3,760,664			3,730,591			3,721,501				4,759,546			3,710,824
Average common shares outstanding -diluted		5,529,869			5,001,610			3,775,579			3,745,230			3,735,993				4,759,546			3,723,196
Selected Ratios:
Return on average asset		-2.44	%		0.50	%		0.59	%		0.83	%		0.76	%			-0.54	%		0.72	%
Return on average shareholders' equity		-29.70	%		6.65	%		8.40	%		12.52	%		12.49	%			-7.03	%		12.18	%
Net interest margin (tax equivalent)		3.25	%		2.72	%		2.82	%		2.95	%		2.72	%			3.09	%		2.64	%
Efficiency ratio (tax equivalent)		-224.39	%		79.90	%		73.97	%		66.79	%		68.09	%			134.56	%		68.31	%
Average shareholders' equity to total average assets		8.22	%		7.59	%		6.99	%		6.64	%		6.09	%			7.65	%		5.87	%
Net loan (recoveries) charge-offs	$	102		$	(1	)	$	(13	)	$	(4	)	$	12			$	88		$	(7	)
Net loan (recoveries) charge-offs-annualized / Average loans excluding held-for-sale		0.02	%		0.00	%		0.00	%		0.00	%		0.00	%			0.01	%		0.00	%
Balance Sheet (Average)
Assets	$	2,399,791		$	2,395,752		$	1,909,962		$	1,901,870		$	1,904,529			$	2,236,963		$	1,888,321
Investment securities		524,806			587,867			596,894			604,727			612,204				569,592			619,910
Loans receivable		1,734,164			1,709,599			1,273,380			1,249,481			1,224,490				1,574,070			1,216,987
Deposits		2,075,390			2,074,766			1,638,840			1,671,921			1,678,118				1,931,264			1,653,266
Shareholders' equity		197,382			181,911			133,514			126,202			115,907				171,170			110,934

 

QNB Corp. (Consolidated)
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)
	Three Months Ended
	September 30, 2026										September 30, 2025
	Average			Average							Average			Average
	Balance			Rate			Interest				Balance			Rate			Interest
Assets
Federal funds sold	$	-			0.00	%	$	—			$	—			0.00	%	$	—
Investment securities:
U.S. Treasury		33,142			3.97			331				20,556			4.18			216
U.S. Government agencies		52,563			1.19			156				75,965			1.18			224
State and municipal		93,264			2.56			596				104,934			2.87			754
Mortgage-backed and CMOs		281,304			1.97			1,387				344,214			2.50			2,152
Corporate debt securities and mutual funds		63,986			5.76			922				66,535			6.11			1,017
Equities		547			-			-				-			-			-
Total investment securities		524,806			2.59			3,392				612,204			2.85			4,363
Loans:
Commercial real estate		1,316,911			6.25			20,730				885,635			5.95			13,285
Residential real estate		124,108			4.89			1,516				116,550			4.52			1,316
Home equity loans		105,549			6.14			1,633				71,090			6.34			1,135
Commercial and industrial		159,681			7.13			2,872				128,744			7.45			2,418
Consumer loans		4,610			8.64			100				3,182			8.06			64
Tax-exempt loans		23,351			5.32			313				19,629			4.28			211
Total loans, net of unearned income*		1,734,210			6.21			27,164				1,224,830			5.97			18,429
Other earning assets		91,446			3.81			879				74,054			4.47			835
Total earning assets		2,350,462			5.31			31,435				1,911,088			4.91			23,627
Cash and due from banks		29,586										16,062
Accumulated other comprehensive loss, net of tax		(46,248	)									(56,590	)
Allowance for credit losses on loans		(12,830	)									(9,185	)
Other assets		78,821										43,154
Total assets	$	2,399,791									$	1,904,529
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing demand	$	452,547			1.09	%		1,248			$	377,473			0.98	%		933
Municipals		189,947			3.18			1,523				179,161			3.76			1,697
Money market		382,109			2.80			2,698				256,289			2.87			1,852
Savings		346,784			1.53			1,337				277,808			1.28			899
Time < $250		355,689			3.32			2,976				335,780			3.70			3,128
Time > $250		78,087			3.40			670				56,258			3.95			560
Total interest-bearing deposits		1,805,163			2.30			10,452				1,482,769			2.43			9,069
Short-term borrowings		53,126			3.16			423				57,063			3.57			514
Subordinated debt		53,899			9.53			1,284				39,191			9.57			937
Total borrowings		107,025			6.33			1,707				96,254			5.98			1,451
Total interest-bearing liabilities		1,912,188			2.52			12,159				1,579,023			2.64			10,520
Non-interest-bearing deposits		270,227										195,349
Other liabilities		19,994										14,250
Shareholders' equity		197,382										115,907
Total liabilities and
shareholders' equity	$	2,399,791									$	1,904,529
Net interest rate spread					2.79	%									2.27	%
Margin/net interest income					3.25	%	$	19,276							2.72	%	$	13,107
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)
	Nine Months Ended
	September 30, 2026										September 30, 2025
	Average			Average							Average			Average
	Balance			Rate			Interest				Balance			Rate			Interest
Assets
Federal funds sold	$	388			3.63	%	$	11			$	—			0.00	%	$	—
Investment securities:
U.S. Treasury		24,972			3.82			713				20,582			4.26			656
U.S. Government agencies		68,083			1.18			604				75,963			1.18			672
State and municipal		100,864			2.40			1,816				105,092			2.87			2,264
Mortgage-backed and CMOs		307,991			1.94			4,486				353,997			2.46			6,544
Corporate debt securities and mutual funds		67,463			5.83			2,950				64,276			6.44			3,106
Equities		219			—			—				—			—			—
Total investment securities		569,592			2.47			10,569				619,910			2.85			13,242
Loans:
Commercial real estate		1,169,639			6.20			54,271				868,880			5.87			38,129
Residential real estate		123,149			4.69			4,332				115,149			4.41			3,809
Home equity loans		95,133			6.05			4,307				69,921			6.39			3,339
Commercial and industrial		160,752			7.10			8,533				140,822			7.42			7,817
Consumer loans		4,296			8.04			258				3,327			7.81			194
Tax-exempt loans		21,424			5.17			829				19,260			4.22			608
Total loans, net of unearned income*		1,574,393			6.16			72,530				1,217,359			5.92			53,896
Other earning assets		58,194			3.82			1,662				61,114			4.46			2,037
Total earning assets		2,202,567			5.15			84,772				1,898,383			4.87			69,175
Cash and due from banks		23,565										14,375
Accumulated other comprehensive loss, net of tax		(45,483	)									(58,821	)
Allowance for credit losses on loans		(11,611	)									(9,102	)
Other assets		67,925										43,486
Total assets	$	2,236,963									$	1,888,321
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing demand	$	445,393			1.09	%		3,617			$	378,157			0.98	%		2,765
Municipals		158,630			3.21			3,808				158,426			3.87			4,580
Money market		341,892			2.73			6,992				257,392			2.87			5,532
Savings		327,938			1.47			3,601				279,507			1.29			2,693
Time < $250		343,764			3.33			8,570				334,292			3.83			9,570
Time > $250		73,434			3.52			1,936				52,319			4.10			1,605
Total interest-bearing deposits		1,691,051			2.26			28,524				1,460,093			2.45			26,745
Short-term borrowings		68,457			3.48			1,781				58,546			3.79			1,659
Long-term debt		—			—			—				11,758			4.74			423
Subordinated debt		49,114			9.50			3,501				39,142			9.58			2,812
Total borrowings		117,571			6.01			5,282				109,446			5.98			4,894
Total interest-bearing liabilities		1,808,622			2.50			33,806				1,569,539			2.70			31,639
Non-interest-bearing deposits		240,213										193,173
Other liabilities		16,958										14,675
Shareholders' equity		171,170										110,934
Total liabilities and
shareholders' equity	$	2,236,963									$	1,888,321
Net interest rate spread					2.65	%									2.17	%
Margin/net interest income					3.09	%	$	50,966							2.64	%	$	37,536
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 Balance Sheet Restructuring and Merger-Related Costs--GAAP to Non-GAAP Measure Reconciliation
(Dollars in thousands, except per share data)
	Three months ended,												Nine months ended,
For the period:	9/30/2026				9/30/2025				Variance				9/30/2026				9/30/2025				Variance
Net (loss) income (GAAP)	$	(14,774	)		$	3,648			$	(18,422	)		$	(8,994	)		$	10,109			$	(19,103	)
Merger-related costs		251				519				(268	)			4,223				519				3,704
Balance sheet restructuring net loss		27,713				—				27,713				27,713				—				27,713
Income tax benefit		(5,983	)			(109	)			(5,874	)			(6,706	)			(109	)			(6,597	)
Restructuring loss and merger-related costs, net of tax		21,981				410				21,571				25,230				410				24,820
Adjusted net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)	$	7,207			$	4,058			$	3,149			$	16,236			$	10,519			$	5,717
Share and Earnings Per Share (EPS) Data:
Basic:
EPS using Net (loss) income (GAAP)	$	(2.67	)		$	0.98			$	(3.65	)		$	(1.89	)		$	2.72			$	(4.61	)
Adjusted EPS using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)	$	1.30			$	1.09			$	0.21			$	3.41			$	2.83			$	0.58
Fully-diluted:
EPS using Net (loss) income (GAAP)	$	(2.67	)		$	0.98			$	(3.65	)		$	(1.89	)		$	2.72			$	(4.61	)
Adjusted EPS using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)	$	1.30			$	1.09			$	0.21			$	3.39			$	2.83			$	0.56
Average common shares outstanding -basic (GAAP)		5,529,869				3,721,501								4,759,546				3,710,824
Average common shares outstanding -dilutive (GAAP)		5,529,869				3,735,993								4,759,546				3,723,196
Dilutive shares adjustment for Non-GAAP		33,649				—								24,284				—
Adjusted average common shares outstanding -diluted (Non-GAAP)		5,563,518				3,735,993								4,783,830				3,723,196
Selected Ratios:
Return on Average Assets (ROAA):
ROAA using Net (loss) income (GAAP)		-2.44	%			0.76	%		-320 bp					-0.54	%			0.72	%		-126 bp
Adjusted ROAA using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)		1.19	%			0.85	%		34 bp					0.97	%			0.74	%		23 bp
Return on Average Equity (ROAE):
ROAE using Net (loss) income (GAAP)		-29.70	%			12.49	%		-4219 bp					-7.03	%			12.18	%		-1921 bp
Adjusted ROAE using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)		14.49	%			13.89	%		60 bp					12.68	%			12.68	%		0 bp
Efficiency Ratio:
Efficiency Ratio (GAAP)		-224.39	%			68.09	%		-29248 bp					134.56	%			68.31	%		6625 bp
Adjusted Efficiency Ratio excluding impact of restructuring loss and merger-related costs (Non-GAAP)		56.64	%			64.62	%		-798 bp					62.57	%			67.09	%		-452 bp

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

Why did QNB report a loss in the third quarter of 2026?

QNB’s third-quarter results included a $27,713,000 net loss before tax from balance sheet restructuring and $251,000 in merger-related costs. It sold $250,712,000 in available-for-sale securities at a $29,049,000 loss and unwound the related swap for a $1,336,000 gain. Excluding restructuring and merger-related costs, adjusted net income was $7,207,000.

How much did QNB raise in its August 2026 stock offering?

QNB’s offering added $48,284,000 to shareholders’ equity, net of underwriting discounts and related costs. The offering was completed on August 20, 2026, with issuance of 1,232,142 common shares.

What did QNB disclose about non-accrual loans and credit-loss reserves at September 30, 2026?

Of QNB’s loans classified as non-accrual, $8,282,000, or approximately 71%, were current or less than 30 days past due. Specific reserves were established where collateral was insufficient, based on updated collateral values. The allowance for loan credit losses totaled $13,047,000, or 0.74% of loans, versus $9,215,000, or 0.73%, at December 31, 2025.