QNBC

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): 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.

QUAKERTOWN, Pa., April 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 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): 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.

QUAKERTOWN, Pa., Jan. 27, 2026 (GLOBE NEWSWIRE) -- QNB Corp. (the “Company” or “QNB”) (OTCQX: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the fourth quarter of 2025 of $3,981,000 or $1.06 per share on a diluted basis. This compares to net income of $3,051,000, or $0.83 per share on a diluted basis, for the same period in 2024. For the twelve months ended December 31, 2025, QNB reported net income of $14,090,000, or $3.78 per share on a diluted basis. This compares to net income of $11,448,000, or $3.12 per share on a diluted basis, reported for the same period in 2024. For the three- and twelve-month periods of 2025, net income included merger-related cost of $619,000 and $1,138,000, respectively. 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- and twelve-month periods of 2025 was $1.22 and $4.08, respectively*. On September 23, 2025, QNB Corp. and The Victory Bancorp, Inc. ("Victory") announced they have entered into a definitive agreement under which QNB will acquire Victory in an all-stock transaction, creating a bank holding company with nearly $2.4 billion in assets. Upon the completion of the merger, the pro-forma post-merger shareholder ownership split would be approximately 77.2% for QNB and 22.8% for Victory. The transaction is expected to close in the second quarter of 2026, subject to satisfaction of customary closing conditions, including regulatory approvals and approval from both QNB and Victory shareholders. For the fourth quarter ended December 31, 2025, the annualized rate of return on average assets and average shareholders’ equity was 0.83% and 12.52%, respectively, compared with 0.66% and 11.62%, respectively, for the fourth quarter 2024. Return on average assets, excluding the impact of the merger-related cost, for the three- and twelve-month periods of 2025 was 0.95% and 0.80%, respectively*. Return on average equity (ROE), excluding the impact of the merger-related cost, for the three- and twelve-month periods of 2025 was 14.38% and 13.24%, respectively*. * 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., improved for the quarter ended December 31, 2025, in comparison with the same period in 2024, due primarily to improvement in the interest margin causing a $3,110,000 increase in net interest income and a $227,000 increase in non-interest income; this was partly offset by an increase in non-interest expense of $1,048,000. The change in contribution from QNB Corp. for the quarter ended December 31, 2025, compared with the same period in 2024, is primarily due to a decrease in net interest income of $43,000, related to the subordinated debt issuance in 2024, an increase in non-interest expense of $577,000, primarily due to merger-related expenses. The following table presents disaggregated net income (loss): Total assets as of December 31, 2025 were $1,906,005,000 compared with $1,870,894,000 at December 31, 2024. Loans receivable increased $46,026,000, or 3.8%, to $1,262,074,000. Total deposits increased $13,970,000, or 0.9%, to $1,642,511,000. Long-term borrowing declined $30,000,000, while short-term borrowing increased $26,757,000. "We are proud to report another quarter of improved operating performance, highlighted by record net interest income, strong margin expansion, and continued loan growth. These results demonstrate the resilience of our customers and the dedication of our team. The upcoming merger with Victory Bancorp, which is pending regulatory and shareholder approval, represents a pivotal step forward, enabling us to deepen our community impact and create greater opportunities for our shareholders and customers alike." said Dave Freeman, President and Chief Executive Officer. Net Interest Income and Net Interest Margin Net interest income for the quarter ended December 31, 2025 totaled $14,042,000, an increase of $3,067,000, from the same period in 2024. Net interest margin was 2.95% for the fourth quarter of 2025 and 2.38% for the same period in 2024. Net interest margin was 2.72% for the twelve months ended December 31, 2025, compared with 2.43% for the same period in 2024. The yield on earning assets was 4.98% for the fourth quarter of 2025, compared with 4.78% in the fourth quarter of 2024; an increase of 20 basis points. For the twelve-month period ended December 31, 2025, the yield on earning assets was 4.90%, compared with 4.73% for the same period in 2024; an increase of 17 basis points. The cost of interest-bearing liabilities was 2.48% for the fourth quarter ended December 31, 2025, compared with 2.91% for the same period in 2024, a decrease of 43 basis points. For the twelve-month period ended December 31, 2025, the cost of interest-bearing liabilities was 2.64% compared with 2.80% for the same period in 2024, a decrease of 16 basis points. Proceeds from the growth in average deposits and the issuance of subordinated debt over the past year were invested in loans and higher-yielding securities. Loan growth was primarily in commercial real estate, which comprised 46.1% of average earning assets in the twelve months of 2025 compared with 45.3% for the same period in 2024, and the increases in both rates and volume in commercial real estate loans majorly contributed to the 29 basis-point increase in the yield on loans. The increase in the available-for-sale investments portfolio was primarily in corporate debt securities. The six-basis point increase in rate on investments was primarily due to the 66-basis point increase in the yield on corporate debt securities. The average rate paid on interest-bearing deposits decreased 31 basis points. Asset Quality, Provision for Credit Losses on Loans and Allowance for Credit Losses QNB recorded a $44,000 reversal in the provision for credit losses on loans in the fourth quarter of 2025 compared to a reversal of $242,000 in provision in the fourth quarter of 2024. QNB recorded a provision of $460,000 in the provision for credit losses on loans for the twelve-month ended December 31, 2025 compared to a reversal of $49,000 in provision for the same period of 2024. QNB's allowance for credit losses on loans of $9,215,000 represents 0.73% of loans receivable at December 31, 2025, compared to $8,744,000, or 0.72% of loans receivable at December 31, 2024. The one-basis point increase in the allowance for credit losses on loans was primarily due to reserves for collateral dependent loans partly offset by an improvement in the economic outlook. Net loan recoveries were $4,000 for the quarter ended December 31, 2025, compared with charge-offs of $1,000 for the same period in 2024. Net loan recoveries were $11,000 for the twelve months ended December 31, 2025, compared with charge-offs of $59,000 for the same period in 2024. Annualized net loan recoveries for the twelve months ended December 31, 2025 were 0.00% compared to annualized net charge-offs of 0.01% for the same period in 2024, of average loans receivable, respectively. Total non-performing loans, which represent loans on non-accrual status and loans past due 90 days or more and still accruing interest, were $8,793,000, or 0.70% of loans receivable at December 31, 2025, compared with $1,975,000, or 0.16% of loans receivable at December 31, 2024. The increase was primarily due to one commercial customer relationship. 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 December 31, 2025, $7,763,000, or approximately 88% 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 $39,516,000 at December 31, 2025, compared with $34,301,000 at December 31, 2024; these were comprised primarily of commercial real estate loans. Non-Interest Income Total non-interest income was $1,874,000 for the fourth quarter of 2025 compared with $1,645,000 for the same period in 2024. There were no realized and unrealized gain/loss on securities for the quarter ended December 31, 2025 compared to a net gain of $70,000 in the same period in 2024. Excluding the net realized and unrealized gains on securities, non-interest income increased $299,000, or 19.0%. Fees for service to customers increased $79,000 for the quarter ended December 31, 2025, as overdraft fees increased $67,000 and other deposit-related fees increased $12,000. ATM and debit card income increased $127,000 due to volume. Retail brokerage and advisory income increased $53,000 to $171,000 for the same period. Other non-interest income increased $30,000 for the same period due to an increase in letter of credit fees of $15,000 and an increase in credit card income of $10,000. For the twelve months ended December 31, 2025, non-interest income was $6,957,000 an increase of $44,000 compared to the same period in 2024. QNB completed the exchange offer to convert the Bank's Visa B-1 shares to B-2 and C shares in the second quarter of 2024 and then sold the Visa Class C shares in the fourth quarter of 2024 and realized a gain of $1,498,000. QNB sold its other equity securities and realized a gain of $517,000 during the twelve months ended December 31, 2024. QNB sold available-for-sale securities during 2024 for a net loss of $1,096,000. Excluding the net realized and unrealized gains on securities, non-interest income increased $748,000, or 12.0%. Net gain on sale of loans increased $34,000 when comparing the twelve months ended December 31, 2025 with the same period in 2024. Increases in non-interest income for the twelve months ended December 31, 2025 compared to the same period in 2024 comprise: fees for services to customers, ATM and debit card fees and retail brokerage and advisory, which increased $216,000, $251,000 and $172,000, respectively. Other non-interest income increased $96,000 due primarily to increases in letter of credit fees, title insurance company income and credit card income. Non-Interest Expense Total non-interest expense was $10,694,000 for the fourth quarter of 2025 compared with $9,081,000 for the same period in 2024. Excluding merger-related costs of $619,000, noninterest expense increased $966,000 or 10.9% for the fourth quarter of 2025, compared to the same period in 2024. Salaries and benefits expense increased $651,000, or 12.8%, to $5,730,000 when comparing the two quarters. Salary expense and related payroll taxes increased $500,000, or 11.3%, to $4,930,000 during the fourth quarter of 2025 compared to the same period in 2024, primarily due to bonus accruals and pay increases. Benefits expense increased $151,000, or 23.3%, when comparing the two periods primarily due to increase in medical costs due to timing as year-to-date costs are down $53,000. Net occupancy and furniture and equipment expense decreased $4,000, decreases in depreciation expense were partly offset by increases in software maintenance costs. Other non-interest expense increased $347,000, or 14.8%, when comparing fourth quarter of 2025 with the same period in 2024 due to an increase in third-party services of $137,000 related to information technology services and consultant expense, an increase in FDIC insurance expense of $119,000 and an increase in bank shares tax of $54,000. For the twelve months ended December 31, 2025, non-interest expense was $39,807,000, an increase of $4,323,000, or 12.2%, compared to the same period in 2024. Excluding merger-related costs, noninterest expense increased $3,185,000 or 9.0% for the twelve months ended December 31, 2025, compared to the same period in 2024. Income Taxes Provision for income taxes increased $546,000 to $1,289,000 in the fourth quarter of 2025 due to higher taxable income, compared with the same period in 2024. The effective tax rate for the quarter ended December 31, 2025 was 24.5% compared with 19.6% for the same period in 2024. The effective tax rate for the twelve months ended December 31, 2025 was 21.4% compared with 20.3% for the same period in 2024. The increase in the tax rates in 2025 were 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, 2024. 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.

QUAKERTOWN, Pa., Oct. 28, 2025 (GLOBE NEWSWIRE) -- QNB Corp. (the “Company” or “QNB”) (OTCQX: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the third quarter of 2025 of $3,648,000 or $0.98 per share on a diluted basis. This compares to net income of $3,338,000, or $0.91 per share on a diluted basis, for the same period in 2024. For the nine months ended September 30, 2025, QNB reported net income of $10,109,000, or $2.72 per share on a diluted basis. This compares to net income of $8,397,000, or $2.29 per share on a diluted basis, reported for the same period in 2024. For both the three- and nine-month periods of 2025, net income included merger-related cost of $519,000. The merger-related costs are significant one-time costs and are not normal recurring operating expenses. Diluted earnings per share excluding the impact of the merger-related cost for the three- and nine-month periods of 2025 was $1.09 and $2.83, respectively*. On September 23, 2025, QNB Corp. and The Victory Bancorp, Inc. ("Victory") announced they have entered into a definitive agreement under which QNB will acquire Victory in an all-stock transaction, creating a bank holding company with nearly $2.4 billion in assets. Upon the completion of the merger, the pro-forma post-merger shareholder ownership split would be approximately 76.4% for QNB and 23.6% for Victory. The transaction is expected to close in the fourth quarter of 2025 or first quarter of 2026, subject to satisfaction of customary closing conditions, including regulatory approvals and approval from both QNB and Victory shareholders. For the third quarter ended September 30, 2025, the annualized rate of return on average assets and average shareholders’ equity was 0.76% and 12.49%, respectively, compared with 0.74% and 13.25%, respectively, for the third quarter 2024. Return on average assets, excluding the impact of the merger-related cost, for the three- and nine-month periods of 2025 was 0.85% and 0.74%, respectively*. Return on average equity, excluding the impact of the merger-related cost, for the three- and nine-month periods of 2025 was 13.89% and 12.68%, respectively*. The operating performance of the Bank, a wholly-owned subsidiary of QNB Corp., improved for the quarter ended September 30, 2025, in comparison with the same period in 2024, due primarily to improvement in the interest margin causing a $2,458,000 increase in net interest income, a $187,000 increase in non-interest income and a reduction in the provision for credit losses on loans and unfunded commitments of $66,000; this was partly offset by an increase in non-interest expense of $909,000. The change in contribution from QNB Corp. for the quarter ended September 30, 2025, compared with the same period in 2024, is primarily due to a decrease in net interest income of $597,000, related to the subordinated debt issuance in 2024, an increase in non-interest expense of $642,000, primarily due to merger-related expenses, and a decrease of $302,000 in non-interest income due to realized and unrealized gains on the equity portfolio in 2024 compared to none in 2025. The following table presents disaggregated net income (loss): Total assets as of September 30, 2025 were $1,903,244,000 compared with $1,870,894,000 at December 31, 2024. Total cash and cash equivalents increased $15,618,000, or 30.8%, to $66,331,000, primarily due to increases in customer deposits. Loans receivable increased $30,481,000, or 2.5%, to $1,246,529,000. Total deposits increased $52,999,000, or 3.3%, to $1,681,540,000. Long-term borrowing declined $30,000,000. “We are pleased to share another quarter of strong performance, fueled by sustained growth in Net Interest Income and continued increases in both loan and deposit balances, said Dave Freeman, President and Chief Executive Officer. Freeman continued, our stable credit environment reflects the continued resilience of consumers and businesses as they adapt to ongoing economic pressures, including tariffs and inflation. This quarter also marked a pivotal milestone for our company with the announcement of our strategic merger with Victory Bancorp. This exciting move strengthens our long-term growth strategy and enhances our ability to deliver greater value to our communities and shareholders alike.” Net Interest Income and Net Interest Margin Net interest income for the quarter ended September 30, 2025 totaled $12,998,000, an increase of $1,871,000, from the same period in 2024. Net interest margin was 2.72% for the third quarter of 2025 and 2.48% for the same period in 2024. Net interest margin was 2.64% for the nine months ended September 30, 2025, compared with 2.45% for the same period in 2024. The yield on earning assets was 4.91% for the third quarter of 2025, compared with 4.86% in the third quarter of 2024; an increase of five basis points. For the nine-month period ended September 30, 2025, the yield on earning assets was 4.87%, compared with 4.71% for the same period in 2024. The cost of interest-bearing liabilities was 2.64% for the third quarter ended September 30, 2025, compared with 2.90% for the same period in 2024, a decrease of 26 basis points. For the nine-month period ended September 30, 2025, the cost of interest-bearing liabilities was 2.70% compared with 2.77% for the same period in 2024. Proceeds from the growth in average deposits and the issuance of subordinated debt over the past year were invested in loans, higher-yielding securities and used to pay down long-term borrowings. Loan growth was primarily in commercial real estate, which comprised 45.8% of average earning assets in the nine months of 2025 compared with 45.3% for the same period in 2024, and the increases in both rates and volume in commercial real estate loans majorly contributed to the 27 basis-point increase in the yield on loans. The increase in the available-for-sale investments portfolio was primarily in corporate debt securities. The 11-basis point increase in rate on investments was primarily due to the 66-basis point increase in the yield on corporate debt securities. The average rate paid on interest-bearing deposits decreased 27 basis points; this partly offset by the issuance of subordinated debt, resulting in a decrease in the cost of funds of seven basis points. Asset Quality, Provision for Credit Losses on Loans and Allowance for Credit Losses QNB recorded a $98,000 in the provision for credit losses on loans in the third quarter of 2025 compared to a $154,000 provision in the third quarter of 2024. QNB recorded a provision of $504,000 in the provision for credit losses on loans for the nine-month ended September 30, 2025 compared to a $193,000 provision for the same period of 2024. QNB's allowance for credit losses on loans of $9,255,000 represents 0.74% of loans receivable at September 30, 2025, compared to $8,744,000, or 0.72% of loans receivable at December 31, 2024. The two-basis point increase in the allowance for credit losses on loans was primarily due to reserves for collateral dependent loans partly offset by an improvement in the economic outlook. Net loan charge-offs were $12,000 for the quarter ended September 30, 2025, compared with charge-offs of $25,000 for the same period in 2024. Annualized net loan charge-offs for the quarter ended September 30, 2025 were 0.00% and annualized net loan charge-offs were 0.01% for the quarter ended September 30, 2024, of average loans receivable, respectively. Net loan recoveries were $7,000 for the nine months ended September 30, 2025, compared with charge-offs of $58,000 for the same period in 2024. Annualized net loan recoveries for the nine months ended September 30, 2025 were 0.00% compared to annualized net charge-offs of 0.01% for the same period in 2024, of average loans receivable, respectively. Total non-performing loans, which represent loans on non-accrual status and loans past due 90 days or more and still accruing interest, were $8,947,000, or 0.72% of loans receivable at September 30, 2025, compared with $1,975,000, or 0.16% of loans receivable at December 31, 2024. The increase was primarily due to one commercial customer relationship. 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, 2025, $7,777,000, or approximately 87% 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 $34,973,000 at September 30, 2025, compared with $34,301,000 at December 31, 2024; these were comprised primarily of commercial real estate loans. Non-Interest Income Total non-interest income was $1,847,000 for the third quarter of 2025 compared with $1,967,000 for the same period in 2024. There were no realized and unrealized gain/loss on securities for the quarter ended September 30, 2025 compared to a net gain of $367,000 in the same period in 2024. Excluding the net realized and unrealized gains on securities, non-interest income increased $247,000, or 15.4%. During the third quarter of 2024 QNB Corp. sold equity securities at a gain of $224,000. Fees for service to customers increased $52,000 for the quarter ended September 30, 2025, as overdraft fees increased $37,000 and other deposit-related fees increased $15,000. ATM and debit card increased $85,000 due to volume. Retail brokerage and advisory income increased $57,000 to $196,000 for the same period. Gains on sales of loans increased $22,000 due to volume of sales. Other non-interest income increased $31,000 for the same period due to an increase in letter of credit fees of $12,000 and a loss on premises and equipment disposals in 2024 of $18,000. For the nine months ended September 30, 2025, non-interest income was $5,083,000 a decrease of $185,000 compared to the same period in 2024, primarily due to the change in fair value of the equities portfolio of $1,129,000 in 2024. QNB completed the exchange offer to convert the Bank's Visa B-1 shares to B-2 and C shares in the second quarter of 2024; the fair value of the Visa C shares was a gain of $1,419,000 at September 30, 2024. Realized loss on sale of securities in 2024 was $495,000. Excluding the net realized and unrealized gains on securities, non-interest income increased $449,000, or 9.7%. Net gain on sale of loans increased $31,000 when comparing the nine months ended September 30, 2025 with the same period in 2024. Increases in non-interest income for the nine months ended September 30, 2025 compared to the same period in 2024 comprise: fees for services to customers, ATM and debit card fees and retail brokerage and advisory, which increased $137,000, $124,000 and $119,000, respectively. Other non-interest income increased $38,000 due primarily to increases in letter of credit fees and title insurance company income partly offset by a decrease in merchant servicing income. Non-Interest Expense Total non-interest expense was $10,182,000 for the third quarter of 2025 compared with $8,636,000 for the same period in 2024. Excluding merger-related costs, noninterest expense increased $1,027,000 or 11.9% for the third quarter of 2025, compared to the same period in 2024. Salaries and benefits expense increased $598,000, or 12.9%, to $5,248,000 when comparing the two quarters. Salary expense and related payroll taxes increased $407,000, or 9.7%, to $4,616,000 during the third quarter of 2025 compared to the same period in 2024, primarily due to pay increases. Benefits expense increased $191,000, or 43.3%, when comparing the two periods primarily due to increase in medical costs due to timing as year-to-date costs are down $87,000. Net occupancy and furniture and equipment expense increased $157,000, or 10.3%, to $1,688,000 for the third quarter of 2025 primarily due to software maintenance costs. Other non-interest expense increased $791,000, or 32.2%, when comparing third quarter of 2025 with the same period in 2024 due to $519,000 of merger-related costs, an increase in third-party services of $172,000 related to information technology services and consultant expense and an increase in bank shares tax of $148,000. For the nine months ended September 30, 2025, non-interest expense was $29,113,000, an increase of $2,710,000, or 10.3%, compared to the same period in 2024. Excluding merger-related costs, noninterest expense increased $2,191,000 or 8.3% for the nine months ended September 30, 2025, compared to the same period in 2024. Income Taxes Provision for income taxes decreased $39,000 to $922,000 in the third quarter of 2025 due a decrease in state tax rates, compared with the same period in 2024. The effective tax rate for the quarter ended September 30, 2025 was 20.2% compared with 22.4% for the same period in 2024. The effective tax rate for the nine months ended September 30, 2025 was 20.2% compared with 20.5% for the same period in 2024. 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, 2024. 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.