Earnings rise as QNB Corp (OTCQX: QNBC) closes Victory Bancorp deal
Rhea-AI Filing Summary
QNB Corp. reported first-quarter 2026 net income of $2.77 million, or $0.73 per diluted share, up from $2.58 million, or $0.69, a year earlier. Results include $754,000 after-tax merger-related costs tied to the Victory Bancorp acquisition.
Excluding these one-time costs, non-GAAP net income was $3.52 million, or $0.93 per diluted share, with return on average assets of 0.75% and return on equity of 10.69%. Net interest income rose to $13.11 million and net interest margin improved to 2.82%, helped by lower funding costs and loan growth.
Total assets were $1.92 billion, loans receivable $1.28 billion, and deposits $1.65 billion at March 31, 2026. The Victory Bancorp transaction closed on April 1, 2026, creating a combined franchise of nearly $2.4 billion in assets and expanding QNB’s Montgomery County presence.
Positive
- Strong underlying earnings growth: Non-GAAP net income excluding merger-related costs rose to $3.52 million, with diluted EPS of $0.93 versus $0.69 a year earlier.
- Margin and loan growth: Tax-equivalent net interest margin improved to 2.82% from 2.51%, supported by $62.8 million average loan growth, mainly in commercial real estate.
- Strategic acquisition closed: The Victory Bancorp deal closed April 1, 2026, creating a combined franchise with nearly $2.4 billion in assets and expanded presence in Montgomery County.
Negative
- Higher expenses and efficiency ratio: Total non-interest expense rose to $11.14 million; the GAAP efficiency ratio increased to 73.97% from 70.65%, reflecting merger-related and higher operating costs.
- Slight uptick in problem loans: Non-performing loans increased to $9.61 million, or 0.75% of loans, from 0.70% at year-end 2025, largely attributed to one retail customer.
Insights
Underlying earnings and margins improved, boosted by loan growth and the Victory Bancorp deal.
QNB Corp. delivered Q1 2026 GAAP net income of $2.77 million, but non-GAAP net income excluding $888,000 in merger-related expenses reached $3.52 million. Diluted EPS rose to $0.93 on this basis versus $0.69 a year earlier, showing stronger core profitability.
Net interest income increased to $13.11 million and tax-equivalent net interest margin expanded to 2.82% from 2.51%, driven mainly by lower funding costs and growth in higher-yielding commercial real estate loans. Loans receivable grew to $1.28 billion, while deposits stood at $1.65 billion, supporting balance sheet expansion.
Credit quality stayed generally stable: the allowance for credit losses on loans was $9.53 million, or 0.74% of loans, and non-performing loans were 0.75% of loans, up modestly due to one retail customer. The April 1, 2026 closing of the Victory Bancorp acquisition creates a franchise of nearly $2.4 billion in assets and broadens QNB’s footprint, with actual benefits depending on integration and future performance.
8-K Event Classification
Key Figures
Key Terms
net interest margin financial
provision for credit losses financial
non-performing loans financial
allowance for credit losses on loans financial
efficiency ratio financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 |
Results of Operations and Financial Condition |
On April 28, 2026, QNB Corp. announced its consolidated financial results for the first quarter ended March 31, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Item, as well as Exhibit 99.1, referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 unless specifically incorporated in such filing.
Item 9.01 |
Financial Statements and Exhibits |
The following exhibits are filed herewith:
Exhibit No. |
Description |
D |
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99.1 |
News release disseminated on April 28, 2026 by QNB Corp. |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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QNB Corp. |
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By: |
/s/ Jeffrey Lehocky |
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Jeffrey Lehocky |
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Chief Financial Officer |
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Dated: April 28, 2026 |
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PO Box 9005 |
Quakertown, PA 18951-9005 |
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215.538.5600 |
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800.491.9070 |
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QNBBank.com |
FOR IMMEDIATE RELEASE
QNB CORP. REPORTS
EARNINGS FOR FIRST QUARTER 2026
QUAKERTOWN, PA (April 28, 2026) QNB Corp. (the “Company” or “QNB”) (OTCQX: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the first quarter of 2026 of $2,765,000 or $0.73 per share on a diluted basis. This compares to net income of $2,578,000, or $0.69 per share on a diluted basis, for the same period in 2025. For the three-month period of 2026, net income included after-tax merger-related cost of $754,000. The merger-related costs are significant one-time costs and are not normal recurring operating expenses. Adjusted diluted earnings per share excluding the impact of the merger-related cost for the three-month period of 2026 was $0.93*.
For the first quarter ended March 31, 2026, the annualized rate of return on average assets (ROAA) and average shareholders’ equity (ROAE) was 0.59% and 8.40%, respectively, compared with 0.56% and 9.73%, respectively, for the first quarter 2025. ROAA, excluding the impact of the merger-related cost, for the three-month period of 2026 was 0.75%*. ROAE, excluding the impact of the merger-related cost, for the three-month period of 2026 was 10.69%*.
* 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 merger-related expenses relate to the previously announced acquisition of Victory Bancorp, Inc, a highly complementary community banking franchise headquartered in Limerick, Pennsylvania. This strategic combination brings together two relationship-focused institutions with shared values, similar operating cultures, and strong community ties. The transaction officially closed on April 1, 2026, creating a franchise with nearly $2.4 billion in assets and expanding our presence deeper into Montgomery County.
The operating performance of the Bank, a wholly-owned subsidiary of QNB Corp., improved for the quarter ended March 31, 2026, in comparison with the same period in 2025, due primarily to improvement in the interest margin causing a $1,849,000 increase in net interest income and a $229,000 increase in non-interest income; this was partly offset by an increase in non-interest expense of $1,500,000 of which $622,000 was due to merger-related costs. The change in contribution from QNB Corp. for the quarter ended March 31, 2026, compared with the same period in 2025, is primarily due to a decrease in net interest income of $27,000, related to the subordinated debt issuance in 2024,
and an increase in non-interest expense of $281,000, primarily due to merger-related expenses of $266,000.
The following table presents disaggregated net income (loss):
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Three months ended, |
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3/31/2026 |
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3/31/2025 |
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Variance |
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QNB Bank |
$ |
3,759,000 |
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$ |
3,292,000 |
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$ |
467,000 |
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QNB Corp |
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(994,000 |
) |
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(714,000 |
) |
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(280,000 |
) |
Consolidated net income |
$ |
2,765,000 |
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$ |
2,578,000 |
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$ |
187,000 |
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Total assets as of March 31, 2026 were $1,923,123,000 compared with $1,906,005,000 at December 31, 2025. Loans receivable increased $20,699,000, or 1.6%, to $1,282,773,000. Total deposits increased $10,920,000, or 0.7%, to $1,653,431,000.
“We reported solid first-quarter earnings growth driven by improved margins, higher net interest income, and continued loan growth,” said Dave Freeman, President and Chief Executive Officer. “While merger-related costs impacted reported earnings, our performance remained strong. The closing of the Victory Bancorp transaction ultimately strengthens our balance sheet, broadens our market presence, and positions QNB for sustainable growth in the periods ahead.”
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended March 31, 2026 totaled $13,109,000, an increase of $1,572,000, from the same period in 2025. Net interest margin was 2.82% for the first quarter of 2026 and 2.51% for the same period in 2025, an increase of 31 basis points.
The yield on earning assets was 4.81% for both the first quarter of 2026 and 2025. The cost of interest-bearing liabilities was 2.42% for the first quarter ended March 31, 2026, compared with 2.76% for the same period in 2025, a decrease of 34 basis points.
Average loan growth of $62,834,000 was primarily funded from payments on mortgage-backed securities and interest-earning deposits. Loan growth was primarily in commercial real estate, which comprised 47.8% of average earning assets in the first three months 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 majorly contributed to the 14 basis-point increase in the yield on loans. The 47 basis point decrease in the rate on total borrowings was due to long-term debt maturities being replaced with lower cost short-term borrowings. The average rate paid on interest-bearing deposits decreased 35 basis points.
Asset Quality, Provision for Credit Losses on Loans and Allowance for Credit Losses
QNB recorded a $303,000 provision for credit losses on loans in the first quarter of 2026 compared to a $550,000 provision in the first quarter of 2025. QNB's allowance for credit losses on loans of $9,531,000 represents 0.74% of loans receivable at March 31, 2026, compared to $9,215,000, or 0.73% of loans receivable at December 31, 2025. The one-basis point increase in the allowance for credit losses on loans was primarily due to reserves for collateral dependent loans. Net loan recoveries were $13,000 for the quarter ended March 31, 2026, compared with charge-offs of $3,000 for the same period in 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 $9,614,000, or 0.75% of loans receivable at March 31, 2026, compared with $8,793,000, or 0.70% of loans receivable at December 31, 2025. The increase was primarily due to 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 March 31, 2026, $7,563,000, or approximately 79% 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 $38,845,000 at March 31, 2026, compared with $39,516,000 at December 31, 2025; these were comprised primarily of commercial real estate loans.
Non-Interest Income
Total non-interest income was $1,801,000 for the first quarter of 2026 compared with $1,584,000 for the same period in 2025.
Fees for service to customers increased $66,000 for the quarter ended March 31, 2026, as overdraft fees increased $51,000 and other deposit-related fees increased $15,000. ATM and debit card income increased $85,000 due to volume. Retail brokerage and advisory income increased $62,000 to $203,000 for the same period. Other non-interest income increased $14,000 for the same period due to an increase in Merchant fees of $7,000 and an increase in bank-owned life insurance of $5,000.
Non-Interest Expense
Total non-interest expense was $11,138,000 for the first quarter of 2026 compared with $9,369,000 for the same period in 2025. Excluding pre-tax merger-related costs of $888,000, noninterest expense increased $881,000 or 9.4% for the first quarter of 2026, compared to the same period in 2025. Salaries and benefits expense increased $584,000, or 11.6%, to $5,616,000 when comparing for the first quarter of 2026, compared to the same period in 2025. Salary expense and related payroll taxes increased $461,000, or 10.6%, to $4,805,000 during the first quarter of 2026 compared to the same period in 2025, primarily due to bonus accruals and pay increases. Benefits expense increased $113,000, or 36.2%, when comparing the two periods primarily due to increase in medical costs.
Net occupancy and furniture and equipment expense increased $156,000 due to software maintenance costs. Other non-interest expense increased $141,000, or 5.4%, when comparing first quarter of 2026 with the same period in 2025 due to an increase in third-party services of $152,000 related to information technology services and consultant expense and an increase in marketing expense of $169,000; partly offset by decreases in FDIC insurance premiums of $82,000 and bank shares tax of $62,000.
Income Taxes
Provision for income taxes increased $83,000 to $707,000 in the first quarter of 2026 due to higher taxable income, compared with the same period in 2025. The effective tax rate for the quarter ended March 31, 2026 was 20.4% compared with 19.5% for the same period in 2025. The increase in the tax rate in 2026 was due to 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 twelve branches in Bucks, Lehigh and Montgomery Counties and offers commercial and retail banking services in the communities it serves. 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 |
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President & Chief Executive Officer |
Chief Financial Officer |
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215-538-5600 x-5619 |
215-538-5600 x-5716 |
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dfreeman@QNBbank.com |
jlehocky@QNBbank.com |
QNB Corp. |
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Consolidated Selected Financial Data (unaudited) |
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(Dollars in thousands) |
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Balance Sheet (Period End) |
3/31/26 |
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12/31/25 |
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9/30/25 |
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6/30/25 |
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3/31/25 |
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Assets |
$ |
1,923,123 |
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$ |
1,906,005 |
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$ |
1,903,244 |
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$ |
1,884,828 |
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$ |
1,896,189 |
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Cash and cash equivalents |
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56,603 |
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50,297 |
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66,331 |
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66,471 |
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81,557 |
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Investment securities |
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Debt securities, AFS |
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528,007 |
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542,830 |
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538,318 |
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544,262 |
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547,138 |
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Loans held-for-sale |
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1,199 |
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246 |
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— |
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1,166 |
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|
248 |
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Loans receivable |
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1,282,773 |
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1,262,074 |
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1,246,529 |
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1,218,539 |
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1,212,162 |
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Allowance for credit losses on loans |
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(9,531 |
) |
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(9,215 |
) |
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(9,255 |
) |
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(9,169 |
) |
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(9,298 |
) |
Net loans |
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1,273,242 |
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1,252,859 |
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1,237,274 |
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1,209,370 |
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1,202,864 |
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Deposits |
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1,653,431 |
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1,642,511 |
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1,681,540 |
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1,651,667 |
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1,664,555 |
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Demand, non-interest bearing |
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187,580 |
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189,957 |
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189,492 |
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201,460 |
|
|
203,666 |
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Interest-bearing demand, money market and savings |
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1,099,480 |
|
|
1,076,757 |
|
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1,104,761 |
|
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1,060,688 |
|
|
1,083,011 |
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Time |
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366,371 |
|
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375,797 |
|
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387,287 |
|
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389,519 |
|
|
377,878 |
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Short-term borrowings |
|
86,806 |
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80,601 |
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48,703 |
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67,464 |
|
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43,299 |
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Long-term debt |
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— |
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— |
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— |
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— |
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30,000 |
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Subordinated debt |
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39,318 |
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39,268 |
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39,218 |
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39,168 |
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|
39,118 |
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Shareholders' equity |
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131,384 |
|
|
129,563 |
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121,487 |
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|
113,269 |
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|
108,223 |
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Asset Quality Data (Period End) |
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Non-accrual loans |
$ |
9,614 |
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$ |
8,793 |
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$ |
8,947 |
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$ |
8,947 |
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$ |
8,651 |
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Loans past due 90 days or more and still accruing |
|
— |
|
|
— |
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— |
|
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— |
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|
— |
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Non-performing loans |
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9,614 |
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8,793 |
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8,947 |
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8,947 |
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8,651 |
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Other real estate owned and repossessed assets |
|
— |
|
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— |
|
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— |
|
|
— |
|
|
— |
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Non-performing assets |
$ |
9,614 |
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$ |
8,793 |
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$ |
8,947 |
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$ |
8,947 |
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$ |
8,651 |
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|
|
|
|
|
|
|
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|
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|||||
Allowance for credit losses on loans |
$ |
9,531 |
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$ |
9,215 |
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$ |
9,255 |
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$ |
9,169 |
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$ |
9,298 |
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Non-performing loans / Loans excluding held-for-sale |
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0.75 |
% |
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0.70 |
% |
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0.72 |
% |
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0.73 |
% |
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0.71 |
% |
Non-performing assets / Assets |
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0.50 |
% |
|
0.46 |
% |
|
0.47 |
% |
|
0.47 |
% |
|
0.46 |
% |
Allowance for credit losses on loans / Loans excluding held-for-sale |
|
0.74 |
% |
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0.73 |
% |
|
0.74 |
% |
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0.75 |
% |
|
0.77 |
% |
QNB Corp. |
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Consolidated Selected Financial Data (unaudited) |
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(Dollars in thousands, except per share data) |
Three months ended, |
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For the period: |
3/31/26 |
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12/31/25 |
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9/30/25 |
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6/30/25 |
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3/31/25 |
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Interest income |
$ |
22,476 |
|
$ |
23,812 |
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$ |
23,518 |
|
$ |
23,110 |
|
$ |
22,198 |
|
Interest expense |
|
9,367 |
|
|
9,770 |
|
|
10,520 |
|
|
10,458 |
|
|
10,661 |
|
Net interest income |
|
13,109 |
|
|
14,042 |
|
|
12,998 |
|
|
12,652 |
|
|
11,537 |
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(Reversal of) provision for credit losses |
|
300 |
|
|
(48 |
) |
|
93 |
|
|
(146 |
) |
|
550 |
|
Net interest income after provision for credit losses |
|
12,809 |
|
|
14,090 |
|
|
12,905 |
|
|
12,798 |
|
|
10,987 |
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|||||
Fees for services to customers |
|
513 |
|
|
533 |
|
|
521 |
|
|
485 |
|
|
447 |
|
ATM and debit card |
|
741 |
|
|
835 |
|
|
776 |
|
|
724 |
|
|
656 |
|
Retail brokerage and advisory income |
|
203 |
|
|
171 |
|
|
196 |
|
|
140 |
|
|
141 |
|
Net (loss) gain on sale of loans |
|
8 |
|
|
— |
|
|
41 |
|
|
4 |
|
|
18 |
|
Other |
|
336 |
|
|
335 |
|
|
313 |
|
|
299 |
|
|
322 |
|
Total non-interest income |
|
1,801 |
|
|
1,874 |
|
|
1,847 |
|
|
1,652 |
|
|
1,584 |
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Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
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Salaries and employee benefits |
|
5,616 |
|
|
5,730 |
|
|
5,248 |
|
|
5,251 |
|
|
5,032 |
|
Net occupancy and furniture and equipment |
|
1,892 |
|
|
1,649 |
|
|
1,688 |
|
|
1,681 |
|
|
1,736 |
|
Merger-related expense |
|
888 |
|
|
619 |
|
|
519.00 |
|
|
— |
|
|
— |
|
Other |
|
2,742 |
|
|
2,696 |
|
|
2,727 |
|
|
2,630 |
|
|
2,601 |
|
Total non-interest expense |
|
11,138 |
|
|
10,694 |
|
|
10,182 |
|
|
9,562 |
|
|
9,369 |
|
Income before income taxes |
|
3,472 |
|
|
5,270 |
|
|
4,570 |
|
|
4,888 |
|
|
3,202 |
|
Provision for income taxes |
|
707 |
|
|
1,289 |
|
|
922 |
|
|
1,005 |
|
|
624 |
|
Net income |
$ |
2,765 |
|
$ |
3,981 |
|
$ |
3,648 |
|
$ |
3,883 |
|
$ |
2,578 |
|
Share and Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|||||
Net income - basic |
$ |
0.74 |
|
$ |
1.07 |
|
$ |
0.98 |
|
$ |
1.05 |
|
$ |
0.70 |
|
Net income - diluted |
$ |
0.73 |
|
$ |
1.06 |
|
$ |
0.98 |
|
$ |
1.04 |
|
$ |
0.69 |
|
Book value |
$ |
32.90 |
|
$ |
34.65 |
|
$ |
32.59 |
|
$ |
30.46 |
|
$ |
29.17 |
|
Cash dividends |
$ |
0.39 |
|
$ |
0.38 |
|
$ |
0.38 |
|
$ |
0.38 |
|
$ |
0.38 |
|
Average common shares outstanding -basic |
|
3,760,664 |
|
|
3,730,591 |
|
|
3,721,501 |
|
|
3,710,878 |
|
|
3,699,854 |
|
Average common shares outstanding -diluted |
|
3,775,579 |
|
|
3,745,230 |
|
|
3,735,993 |
|
|
3,724,808 |
|
|
3,713,141 |
|
Selected Ratios: |
|
|
|
|
|
|
|
|
|
|
|||||
Return on average asset |
|
0.59 |
% |
|
0.83 |
% |
|
0.76 |
% |
|
0.83 |
% |
|
0.56 |
% |
Return on average shareholders' equity |
|
8.40 |
% |
|
12.52 |
% |
|
12.49 |
% |
|
14.25 |
% |
|
9.73 |
% |
Net interest margin (tax equivalent) |
|
2.82 |
% |
|
2.95 |
% |
|
2.72 |
% |
|
2.69 |
% |
|
2.51 |
% |
Efficiency ratio (tax equivalent) |
|
73.97 |
% |
|
66.79 |
% |
|
68.09 |
% |
|
66.39 |
% |
|
70.65 |
% |
Average shareholders' equity to total average assets |
|
6.99 |
% |
|
6.64 |
% |
|
6.09 |
% |
|
5.79 |
% |
|
5.74 |
% |
Net loan (recoveries) charge-offs |
$ |
(13 |
) |
$ |
(4 |
) |
$ |
12 |
|
$ |
(16 |
) |
$ |
(3 |
) |
Net loan (recoveries) charge-offs-annualized / Average loans excluding held-for-sale |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
-0.01 |
% |
|
0.00 |
% |
Balance Sheet (Average) |
|
|
|
|
|
|
|
|
|
|
|||||
Assets |
$ |
1,909,962 |
|
$ |
1,901,870 |
|
$ |
1,904,529 |
|
$ |
1,887,138 |
|
$ |
1,872,950 |
|
Investment securities |
|
596,894 |
|
|
604,727 |
|
|
612,204 |
|
|
621,128 |
|
|
614,329 |
|
Loans receivable |
|
1,273,380 |
|
|
1,249,481 |
|
|
1,224,490 |
|
|
1,216,011 |
|
|
1,193,949 |
|
Deposits |
|
1,638,840 |
|
|
1,671,921 |
|
|
1,678,118 |
|
|
1,647,990 |
|
|
1,635,629 |
|
Shareholders' equity |
|
133,514 |
|
|
126,202 |
|
|
115,907 |
|
|
109,299 |
|
|
107,503 |
|
QNB Corp. (Consolidated) |
|
||||||||||||||||||
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Three Months Ended |
|
|||||||||||||||||
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||||||||||||||
|
Average |
|
Average |
|
|
|
|
Average |
|
Average |
|
|
|
||||||
|
Balance |
|
Rate |
|
Interest |
|
|
Balance |
|
Rate |
|
Interest |
|
||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury |
$ |
20,827 |
|
|
3.71 |
% |
$ |
191 |
|
|
$ |
20,155 |
|
|
4.38 |
% |
$ |
217 |
|
U.S. Government agencies |
|
75,969 |
|
|
1.18 |
|
|
224 |
|
|
|
75,960 |
|
|
1.18 |
|
|
224 |
|
State and municipal |
|
104,524 |
|
|
2.31 |
|
|
603 |
|
|
|
105,256 |
|
|
2.86 |
|
|
754 |
|
Mortgage-backed and CMOs |
|
324,895 |
|
|
1.91 |
|
|
1,548 |
|
|
|
363,641 |
|
|
2.43 |
|
|
2,208 |
|
Corporate debt securities and mutual funds |
|
70,679 |
|
|
5.82 |
|
|
1,028 |
|
|
|
61,545 |
|
|
6.88 |
|
|
1,058 |
|
Total investment securities |
|
596,894 |
|
|
2.41 |
|
|
3,594 |
|
|
|
626,557 |
|
|
2.85 |
|
|
4,461 |
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate |
|
910,923 |
|
|
5.99 |
|
|
13,444 |
|
|
|
857,600 |
|
|
5.71 |
|
|
12,069 |
|
Residential real estate |
|
122,369 |
|
|
4.55 |
|
|
1,392 |
|
|
|
114,271 |
|
|
4.33 |
|
|
1,238 |
|
Home equity loans |
|
76,534 |
|
|
5.83 |
|
|
1,099 |
|
|
|
67,973 |
|
|
6.41 |
|
|
1,074 |
|
Commercial and industrial |
|
141,204 |
|
|
7.03 |
|
|
2,448 |
|
|
|
148,680 |
|
|
7.41 |
|
|
2,717 |
|
Consumer loans |
|
2,932 |
|
|
7.91 |
|
|
57 |
|
|
|
3,446 |
|
|
7.68 |
|
|
65 |
|
Tax-exempt loans |
|
19,637 |
|
|
4.85 |
|
|
235 |
|
|
|
18,795 |
|
|
4.15 |
|
|
192 |
|
Total loans, net of unearned income* |
|
1,273,599 |
|
|
5.95 |
|
|
18,675 |
|
|
|
1,210,765 |
|
|
5.81 |
|
|
17,355 |
|
Other earning assets |
|
37,100 |
|
|
3.86 |
|
|
354 |
|
|
|
47,641 |
|
|
4.44 |
|
|
522 |
|
Total earning assets |
|
1,907,593 |
|
|
4.81 |
|
|
22,623 |
|
|
|
1,884,963 |
|
|
4.81 |
|
|
22,338 |
|
Cash and due from banks |
|
12,896 |
|
|
|
|
|
|
|
13,226 |
|
|
|
|
|
||||
Accumulated other comprehensive loss, net of tax |
|
(44,460 |
) |
|
|
|
|
|
|
(59,988 |
) |
|
|
|
|
||||
Allowance for credit losses on loans |
|
(9,296 |
) |
|
|
|
|
|
|
(8,739 |
) |
|
|
|
|
||||
Other assets |
|
43,229 |
|
|
|
|
|
|
|
43,488 |
|
|
|
|
|
||||
Total assets |
$ |
1,909,962 |
|
|
|
|
|
|
$ |
1,872,950 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing demand |
$ |
399,248 |
|
|
0.95 |
% |
|
931 |
|
|
$ |
380,293 |
|
|
1.01 |
% |
|
944 |
|
Municipals |
|
135,142 |
|
|
3.19 |
|
|
1,063 |
|
|
|
149,579 |
|
|
3.95 |
|
|
1,456 |
|
Money market |
|
255,220 |
|
|
2.55 |
|
|
1,603 |
|
|
|
256,265 |
|
|
2.88 |
|
|
1,818 |
|
Savings |
|
284,256 |
|
|
1.29 |
|
|
903 |
|
|
|
279,657 |
|
|
1.30 |
|
|
893 |
|
Time < $100 |
|
165,865 |
|
|
3.24 |
|
|
1,327 |
|
|
|
178,500 |
|
|
3.79 |
|
|
1,670 |
|
Time $100 through $250 |
|
150,480 |
|
|
3.53 |
|
|
1,311 |
|
|
|
154,125 |
|
|
4.25 |
|
|
1,613 |
|
Time > $250 |
|
59,038 |
|
|
3.64 |
|
|
530 |
|
|
|
48,785 |
|
|
4.31 |
|
|
518 |
|
Total interest-bearing deposits |
|
1,449,249 |
|
|
2.15 |
|
|
7,668 |
|
|
|
1,447,204 |
|
|
2.50 |
|
|
8,912 |
|
Short-term borrowings |
|
83,573 |
|
|
3.70 |
|
|
762 |
|
|
|
47,529 |
|
|
3.89 |
|
|
456 |
|
Long-term debt |
|
— |
|
|
— |
|
|
— |
|
|
|
30,111 |
|
|
4.73 |
|
|
356 |
|
Subordinated debt |
|
39,291 |
|
|
9.54 |
|
|
937 |
|
|
|
39,092 |
|
|
9.59 |
|
|
937 |
|
Total borrowings |
|
122,864 |
|
|
5.61 |
|
|
1,699 |
|
|
|
116,732 |
|
|
6.08 |
|
|
1,749 |
|
Total interest-bearing liabilities |
|
1,572,113 |
|
|
2.42 |
|
|
9,367 |
|
|
|
1,563,936 |
|
|
2.76 |
|
|
10,661 |
|
Non-interest-bearing deposits |
|
189,591 |
|
|
|
|
|
|
|
185,992 |
|
|
|
|
|
||||
Other liabilities |
|
14,744 |
|
|
|
|
|
|
|
15,519 |
|
|
|
|
|
||||
Shareholders' equity |
|
133,514 |
|
|
|
|
|
|
|
107,503 |
|
|
|
|
|
||||
Total liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
shareholders' equity |
$ |
1,909,962 |
|
|
|
|
|
|
$ |
1,872,950 |
|
|
|
|
|
||||
Net interest rate spread |
|
|
|
2.39 |
% |
|
|
|
|
|
|
2.05 |
% |
|
|
||||
Margin/net interest income |
|
|
|
2.82 |
% |
$ |
13,256 |
|
|
|
|
|
2.51 |
% |
$ |
11,677 |
|
||
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, |
|
|||||||||
For the period: |
3/31/2026 |
|
|
3/31/2025 |
|
|
Variance |
|
|||
Net income (GAAP) |
$ |
2,765 |
|
|
$ |
2,578 |
|
|
$ |
187 |
|
Merger-related costs |
|
888 |
|
|
|
— |
|
|
|
888 |
|
Income tax benefit |
|
(134 |
) |
|
|
— |
|
|
|
(134 |
) |
Merger-related costs, net of tax |
|
754 |
|
|
|
— |
|
|
|
754 |
|
Net income excluding impact of merger-related costs (Non-GAAP) |
$ |
3,519 |
|
|
$ |
2,578 |
|
|
$ |
941 |
|
|
|
|
|
|
|
|
|
|
|||
Share and Earnings Per Share (EPS) Data: |
|
|
|
|
|
|
|
|
|||
Basic: |
|
|
|
|
|
|
|
|
|||
EPS using Net income (GAAP) |
$ |
0.74 |
|
|
$ |
0.70 |
|
|
$ |
0.04 |
|
EPS using Net income excluding impact of merger-related costs (Non-GAAP) |
$ |
0.94 |
|
|
$ |
0.70 |
|
|
$ |
0.24 |
|
Fully-diluted: |
|
|
|
|
|
|
|
|
|||
EPS using Net income (GAAP) |
$ |
0.73 |
|
|
$ |
0.69 |
|
|
$ |
0.04 |
|
EPS using Net income excluding impact of merger-related costs (Non-GAAP) |
$ |
0.93 |
|
|
$ |
0.69 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|||
Average common shares outstanding -basic |
|
3,760,664 |
|
|
|
3,699,854 |
|
|
|
|
|
Average common shares outstanding -diluted |
|
3,775,579 |
|
|
|
3,713,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Selected Ratios: |
|
|
|
|
|
|
|
|
|||
Return on Average Assets (ROAA): |
|
|
|
|
|
|
|
|
|||
ROAA using Net income (GAAP) |
|
0.59 |
% |
|
|
0.56 |
% |
|
3 bp |
|
|
ROAA using Net income excluding impact of merger-related costs (Non-GAAP) |
|
0.75 |
% |
|
|
0.56 |
% |
|
19 bp |
|
|
Return on Average Equity (ROAE): |
|
|
|
|
|
|
|
|
|||
ROAE using Net income (GAAP) |
|
8.40 |
% |
|
|
9.73 |
% |
|
-133 bp |
|
|
ROAE using Net income excluding impact of merger-related costs (Non-GAAP) |
|
10.69 |
% |
|
|
9.73 |
% |
|
96 bp |
|
|
Efficiency Ratio: |
|
|
|
|
|
|
|
|
|||
Efficiency Ratio (GAAP) |
|
73.97 |
% |
|
|
70.65 |
% |
|
332 bp |
|
|
Efficiency Ratio excluding impact of merger-related costs (Non-GAAP) |
|
68.07 |
% |
|
|
70.65 |
% |
|
-258 bp |
|
|