Form 8-K

8-K — QNB CORP.

Accession: 0001193125-26-433741

Filed: 2026-10-27

Period: 2026-10-27

CIK: 0000750558

SIC: 6022 (STATE COMMERCIAL BANKS)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — qnbc-20261027.htm (Primary)

EX-99.1 (qnbc-ex99_1.htm)

GRAPHIC (img160341895_0.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: qnbc-20261027.htm · Sequence: 1

8-K

000075055800007505582026-10-272026-10-27

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

October 27,2026

QNB Corp.

(Exact name of registrant as specified in its charter)

Pennsylvania

0-17706

23-2318082

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

15 North Third Street, P.O. Box 9005, Quakertown, PA 18951-9005

(Address of principal executive offices, including zip code)

(215) 538-5600

(Registrant's telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock

QNBC

The Nasdaq Stock Market, LLC

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:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

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 October 27, 2026, QNB Corp. announced its consolidated financial results for the third quarter ended September 30, 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

99.1

News release disseminated on October 27, 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.

QNB Corp.

By:

/s/ Jeffrey Lehocky

Jeffrey Lehocky

Chief Financial Officer

Dated: October 27, 2026

EX-99.1

Filename: qnbc-ex99_1.htm · Sequence: 2

EX-99.1

PO Box 9005

Quakertown, PA 18951-9005

215.538.5600

800.491.9070

QNBBank.com

FOR IMMEDIATE RELEASE

QNB CORP. REPORTS

THIRD QUARTER 2026 RESULTS

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

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

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

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

The following table presents disaggregated net income (loss):

Three months ended,

Nine months ended,

9/30/2026

9/30/2025

Variance

9/30/2026

9/30/2025

Variance

QNB Bank

(13,440,000

)

4,837,000

(18,277,000

)

(5,106,000

)

12,808,000

(17,914,000

)

QNB Corp

(1,334,000

)

(1,189,000

)

(145,000

)

(3,888,000

)

(2,699,000

)

(1,189,000

)

Consolidated net (loss) income

(14,774,000

)

3,648,000

(18,422,000

)

(8,994,000

)

10,109,000

(19,103,000

)

Adjusted Consolidated net income excluding impact of balance sheet restructuring and merger-related costs (Non-GAAP*)

7,207,000

4,058,000

3,149,000

16,236,000

10,519,000

5,717,000

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

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

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

Net Interest Income and Net Interest Margin

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

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

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

Quarterly average loan growth of $509,380,000 was offset by an increase in average deposits of $397,272,000, an increase in subordinated debt of $14,708,000 and an increase in shareholders' equity of $81,475,000, primarily due to the acquisition of $408,379,000 in loans, $409,165,000 in deposits and $47,101,000 in equity were added upon the close of the Victory merger. Additionally, equity was impacted by the $48,284,000 in net proceeds from the public offering.

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

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

QNB recorded a $379,000 provision for credit losses on loans in the third quarter of 2026 compared to a $98,000 provision in the third quarter of 2025. QNB recorded a $900,000 provision for credit losses on loans in the nine months ended September 30, 2026 compared to a $504,000 provision in the same period of 2025. QNB added $3,020,000 in allowance for credit losses due to the acquisition in the second quarter of 2026. QNB's allowance for credit losses on loans of $13,047,000 represents 0.74% of loans receivable at September 30, 2026, compared to $9,215,000, or 0.73% of loans receivable at December 31, 2025. Net loan charge-offs were $102,000 for the quarter ended September 30, 2026, compared with $12,000 for the same period in 2025. Net charge-offs for the nine months ended September 30, 2026 were $88,000 compared with recoveries of $7,000 for the same period of 2025.

Total non-performing loans, which represent loans on non-accrual status and loans past due 90 days or more and still accruing interest, were $11,688,000, or 0.66% of loans receivable at September 30, 2026, compared with $8,793,000, or 0.70% of loans receivable at December 31, 2025. The increase was primarily due to four commercial and one retail customer. In cases where there is a collateral shortfall on non-accrual loans, specific reserves have been established based on updated collateral values even if the borrower continues to pay in accordance with the terms of the agreement. At September 30, 2026, $8,282,000, or approximately 71% of the loans classified as non-accrual, are current or past due less than 30 days. Commercial loans classified as substandard or doubtful loans totaled $44,621,000 at September 30, 2026, compared with $39,219,000 at December 31, 2025, an increase of $5,402,000 primarily due to commercial real estate and commercial and industrial loans acquired.

Non-Interest Income

Total non-interest income for 2026 includes three months for the quarter and six months for the nine months ended September 30, 2026 of impact from the acquisition. Noninterest income was a negative $24,951,000 for the third quarter of 2026 compared with $1,847,000 for the same period in 2025; and a negative $21,011,000 for the nine months ended September 30, 2026 compared with $5,083,000 for the same period of 2025. Non-interest income for the three and nine months ended September 30, 2026 includes the negative impact of the balance sheet restructuring of $27,713,000. Non-interest income for the nine months ended September 30, 2026 also included $96,000 of realized gains on the sales of investment securities and a $303,000 loss on the termination of an interest-rate swap acquired in the acquisition, both are unrelated to the balance sheet restructuring. The Bank completed

the exchange offer to convert its Visa B-2 shares to B-3 and C shares in the second quarter of 2026; the Bank subsequently converted the remaining two-thirds of the Visa C shares to Visa A shares and recorded a $612,000 unrealized gain; a total of $880,000 for the nine months of 2026. Excluding these gains and losses, non-interest income increased $303,000 to $2,150,000 from 1,847,000 for the third quarter; and increased $946,000 to $6,029,000 from $5,083,000 for the nine-month period.

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

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

Non-Interest Expense

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

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

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

Income Taxes

Provision for income taxes decreased $5,048,000 to a benefit of $4,126,000 in the third quarter of 2026 and decreased $5,153,000 to a benefit of $2,602,000 for the nine months ended September 30, 2026, due to lower taxable income, compared with the same periods in 2025. The effective tax rate increased for both the three- and nine-month periods ended September 30, 2026 to 21.8% and 22.4%, respectively, from 20.2% and 20.2% for the same periods in 2025, respectively, due non-taxable merger-related costs.

About the Company

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

Forward Looking Statement

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

Contacts:

David W. Freeman

Jeffrey Lehocky

President & Chief Executive Officer

Chief Financial Officer

215-538-5600 x-5619

215-538-5600 x-5716

dfreeman@QNBbank.com

jlehocky@QNBbank.com

QNB Corp.

Consolidated Selected Financial Data (unaudited)

(Dollars in thousands)

Balance Sheet (Period End)

9/30/26

6/30/26

3/31/26

12/31/25

9/30/25

Assets

2,361,620

2,398,970

1,923,123

1,906,005

1,903,244

Cash and cash equivalents

106,428

79,340

56,603

50,297

66,331

Investment securities

Debt securities, AFS

397,563

516,978

528,007

542,830

538,318

Loans held-for-sale

163

395

1,199

246

—

Loans receivable

1,772,174

1,716,599

1,282,773

1,262,074

1,246,529

Allowance for credit losses on loans

(13,047

)

(12,770

)

(9,531

)

(9,215

)

(9,255

)

Net loans

1,759,127

1,703,829

1,273,242

1,252,859

1,237,274

Deposits

2,056,299

2,067,151

1,653,431

1,642,511

1,681,540

Demand, non-interest bearing

251,590

266,120

187,580

189,957

189,492

Interest-bearing demand, money market and savings

1,377,626

1,367,300

1,099,480

1,076,757

1,104,761

Time

427,083

433,731

366,371

375,797

387,287

Short-term borrowings

16,500

75,428

86,806

80,601

48,703

Long-term debt

—

Subordinated debt

41,068

54,018

39,318

39,268

39,218

Shareholders' equity

226,184

183,514

131,384

129,563

121,487

Asset Quality Data (Period End)

Non-accrual loans

11,688

10,418

9,614

8,793

8,947

Loans past due 90 days or more and still accruing

—

Non-performing loans

11,688

10,418

9,614

8,793

8,947

Other real estate owned and repossessed assets

—

Non-performing assets

11,688

10,418

9,614

8,793

8,947

Allowance for credit losses on loans

13,047

12,770

9,531

9,215

9,255

Non-performing loans / Loans excluding held-for-sale

0.66

0.61

0.75

0.70

0.72

Non-performing assets / Assets

0.49

0.43

0.50

0.46

0.47

Allowance for credit losses on loans / Loans excluding held-for-sale

0.74

0.73

0.74

QNB Corp.

Consolidated Selected Financial Data (unaudited)

(Dollars in thousands, except per share data)

Three months ended,

Nine months ended,

For the period:

9/30/26

6/30/26

3/31/26

12/31/25

9/30/25

9/30/26

9/30/25

Interest income

31,320

30,631

22,476

23,812

23,518

84,427

68,826

Interest expense

12,159

12,280

9,367

9,770

10,520

33,806

31,639

Net interest income

19,161

18,351

13,109

14,042

12,998

50,621

37,187

Provision (reversal of provision) for credit losses

376

222

300

(48

)

898

497

Net interest income after provision for credit losses

18,785

18,129

12,809

14,090

12,905

49,723

36,690

Non-interest income:

Fees for services to customers

690

658

513

533

521

1,861

1,453

ATM and debit card

887

811

741

835

776

2,439

2,156

Retail brokerage and advisory income

135

148

203

171

196

486

477

Net (loss) gain on sale of securities

(29,049

)

—

(28,953

)

—

Net unrealized gain on equity securities

612

268

—

880

—

Net gain (loss) on interest-rate swap termination

1,336

(303

)

—

1,033

—

Net gain on sale of loans

Other

436

425

336

335

313

1,197

934

Total non-interest (loss) income

(24,951

)

2,139

1,801

1,874

1,847

(21,011

)

5,083

Non-interest expense:

Salaries and employee benefits

6,888

7,200

5,616

5,730

5,248

19,704

15,531

Net occupancy and furniture and equipment

1,992

2,189

1,892

1,649

1,688

6,073

5,105

Merger-related expense

251

3,084

888

619

519

4,223

519

Other

3,603

3,963

2,742

2,696

2,727

10,308

7,958

Total non-interest expense

12,734

16,436

11,138

10,694

10,182

40,308

29,113

(Loss) income before income taxes

(18,900

)

3,832

3,472

5,270

4,570

(11,596

)

12,660

(Benefit) provision for income taxes

(4,126

)

817

707

1,289

922

(2,602

)

2,551

Net (loss) income

(14,774

)

3,015

2,765

3,981

3,648

(8,994

)

10,109

Share and Per Share Data:

Net (loss) income - basic

(2.67

)

0.61

0.74

1.07

0.98

(1.89

)

2.72

Net (loss) income - diluted

(2.67

)

0.60

0.73

1.06

0.98

(1.89

)

2.72

Book value

36.37

36.87

34.72

34.65

32.59

36.37

32.59

Tangible book value

33.74

33.53

34.72

34.65

32.59

33.74

32.59

Cash dividends

0.39

0.38

1.17

1.14

Average common shares outstanding -basic

5,529,869

4,968,665

3,760,664

3,730,591

3,721,501

4,759,546

3,710,824

Average common shares outstanding -diluted

5,529,869

5,001,610

3,775,579

3,745,230

3,735,993

4,759,546

3,723,196

Selected Ratios:

Return on average asset

-2.44

0.50

0.59

0.83

0.76

-0.54

0.72

Return on average shareholders' equity

-29.70

6.65

8.40

12.52

12.49

-7.03

12.18

Net interest margin (tax equivalent)

3.25

2.72

2.82

2.95

2.72

3.09

2.64

Efficiency ratio (tax equivalent)

-224.39

79.90

73.97

66.79

68.09

134.56

68.31

Average shareholders' equity to total average assets

8.22

7.59

6.99

6.64

6.09

7.65

5.87

Net loan (recoveries) charge-offs

102

)

(13

)

Net loan (recoveries) charge-offs-annualized / Average loans excluding held-for-sale

0.02

0.00

0.01

0.00

Balance Sheet (Average)

Assets

2,399,791

2,395,752

1,909,962

1,901,870

1,904,529

2,236,963

1,888,321

Investment securities

524,806

587,867

596,894

604,727

612,204

569,592

619,910

Loans receivable

1,734,164

1,709,599

1,273,380

1,249,481

1,224,490

1,574,070

1,216,987

Deposits

2,075,390

2,074,766

1,638,840

1,671,921

1,678,118

1,931,264

1,653,266

Shareholders' equity

197,382

181,911

133,514

126,202

115,907

171,170

110,934

QNB Corp. (Consolidated)

Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)

Three Months Ended

September 30, 2026

September 30, 2025

Average

Balance

Rate

Interest

Balance

Rate

Interest

Assets

Federal funds sold

0.00

—

0.00

—

Investment securities:

U.S. Treasury

33,142

3.97

331

20,556

4.18

216

U.S. Government agencies

52,563

1.19

156

75,965

1.18

224

State and municipal

93,264

2.56

596

104,934

2.87

754

Mortgage-backed and CMOs

281,304

1.97

1,387

344,214

2.50

2,152

Corporate debt securities and mutual funds

63,986

5.76

922

66,535

6.11

1,017

Equities

547

Total investment securities

524,806

2.59

3,392

612,204

2.85

4,363

Loans:

Commercial real estate

1,316,911

6.25

20,730

885,635

5.95

13,285

Residential real estate

124,108

4.89

1,516

116,550

4.52

1,316

Home equity loans

105,549

6.14

1,633

71,090

6.34

1,135

Commercial and industrial

159,681

7.13

2,872

128,744

7.45

2,418

Consumer loans

4,610

8.64

100

3,182

8.06

Tax-exempt loans

23,351

5.32

313

19,629

4.28

211

Total loans, net of unearned income*

1,734,210

6.21

27,164

1,224,830

5.97

18,429

Other earning assets

91,446

3.81

879

74,054

4.47

835

Total earning assets

2,350,462

5.31

31,435

1,911,088

4.91

23,627

Cash and due from banks

29,586

16,062

Accumulated other comprehensive loss, net of tax

(46,248

)

(56,590

)

Allowance for credit losses on loans

(12,830

)

(9,185

)

Other assets

78,821

43,154

Total assets

2,399,791

1,904,529

Liabilities and Shareholders' Equity

Interest-bearing deposits:

Interest-bearing demand

452,547

1.09

1,248

377,473

0.98

933

Municipals

189,947

3.18

1,523

179,161

3.76

1,697

Money market

382,109

2.80

2,698

256,289

2.87

1,852

Savings

346,784

1.53

1,337

277,808

1.28

899

Time < $250

355,689

3.32

2,976

335,780

3.70

3,128

Time > $250

78,087

3.40

670

56,258

3.95

560

Total interest-bearing deposits

1,805,163

2.30

10,452

1,482,769

2.43

9,069

Short-term borrowings

53,126

3.16

423

57,063

3.57

514

Subordinated debt

53,899

9.53

1,284

39,191

9.57

937

Total borrowings

107,025

6.33

1,707

96,254

5.98

1,451

Total interest-bearing liabilities

1,912,188

2.52

12,159

1,579,023

2.64

10,520

Non-interest-bearing deposits

270,227

195,349

Other liabilities

19,994

14,250

Shareholders' equity

197,382

115,907

Total liabilities and

shareholders' equity

2,399,791

1,904,529

Net interest rate spread

2.79

2.27

Margin/net interest income

3.25

19,276

2.72

13,107

Tax-exempt securities and loans were adjusted to a tax-equivalent basis and are based on the Federal corporate tax rate of 21%

Non-accrual loans and investment securities are included in earning assets.

* Includes loans held-for-sale

QNB Corp. (Consolidated)

Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)

Nine Months Ended

September 30, 2026

September 30, 2025

Average

Balance

Rate

Interest

Balance

Rate

Interest

Assets

Federal funds sold

388

3.63

—

0.00

—

Investment securities:

U.S. Treasury

24,972

3.82

713

20,582

4.26

656

U.S. Government agencies

68,083

1.18

604

75,963

1.18

672

State and municipal

100,864

2.40

1,816

105,092

2.87

2,264

Mortgage-backed and CMOs

307,991

1.94

4,486

353,997

2.46

6,544

Corporate debt securities and mutual funds

67,463

5.83

2,950

64,276

6.44

3,106

Equities

219

—

Total investment securities

569,592

2.47

10,569

619,910

2.85

13,242

Loans:

Commercial real estate

1,169,639

6.20

54,271

868,880

5.87

38,129

Residential real estate

123,149

4.69

4,332

115,149

4.41

3,809

Home equity loans

95,133

6.05

4,307

69,921

6.39

3,339

Commercial and industrial

160,752

7.10

8,533

140,822

7.42

7,817

Consumer loans

4,296

8.04

258

3,327

7.81

194

Tax-exempt loans

21,424

5.17

829

19,260

4.22

608

Total loans, net of unearned income*

1,574,393

6.16

72,530

1,217,359

5.92

53,896

Other earning assets

58,194

3.82

1,662

61,114

4.46

2,037

Total earning assets

2,202,567

5.15

84,772

1,898,383

4.87

69,175

Cash and due from banks

23,565

14,375

Accumulated other comprehensive loss, net of tax

(45,483

)

(58,821

)

Allowance for credit losses on loans

(11,611

)

(9,102

)

Other assets

67,925

43,486

Total assets

2,236,963

1,888,321

Liabilities and Shareholders' Equity

Interest-bearing deposits:

Interest-bearing demand

445,393

1.09

3,617

378,157

0.98

2,765

Municipals

158,630

3.21

3,808

158,426

3.87

4,580

Money market

341,892

2.73

6,992

257,392

2.87

5,532

Savings

327,938

1.47

3,601

279,507

1.29

2,693

Time < $250

343,764

3.33

8,570

334,292

3.83

9,570

Time > $250

73,434

3.52

1,936

52,319

4.10

1,605

Total interest-bearing deposits

1,691,051

2.26

28,524

1,460,093

2.45

26,745

Short-term borrowings

68,457

3.48

1,781

58,546

3.79

1,659

Long-term debt

—

11,758

4.74

423

Subordinated debt

49,114

9.50

3,501

39,142

9.58

2,812

Total borrowings

117,571

6.01

5,282

109,446

5.98

4,894

Total interest-bearing liabilities

1,808,622

2.50

33,806

1,569,539

2.70

31,639

Non-interest-bearing deposits

240,213

193,173

Other liabilities

16,958

14,675

Shareholders' equity

171,170

110,934

Total liabilities and

shareholders' equity

2,236,963

1,888,321

Net interest rate spread

2.65

2.17

Margin/net interest income

3.09

50,966

2.64

37,536

Tax-exempt securities and loans were adjusted to a tax-equivalent basis and are based on the Federal corporate tax rate of 21%

Non-accrual loans and investment securities are included in earning assets.

* Includes loans held-for-sale

QNB Corp.

Consolidated Selected Financial Data (unaudited)

Impact of Balance Sheet Restructuring and Merger-Related Costs--GAAP to Non-GAAP Measure Reconciliation

(Dollars in thousands, except per share data)

Three months ended,

Nine months ended,

For the period:

9/30/2026

9/30/2025

Variance

9/30/2026

9/30/2025

Variance

Net (loss) income (GAAP)

(14,774

)

3,648

(18,422

)

(8,994

)

10,109

(19,103

)

Merger-related costs

251

519

(268

)

4,223

519

3,704

Balance sheet restructuring net loss

27,713

—

27,713

—

27,713

Income tax benefit

(5,983

)

(109

)

(5,874

)

(6,706

)

(109

)

(6,597

)

Restructuring loss and merger-related costs, net of tax

21,981

410

21,571

25,230

410

24,820

Adjusted net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)

7,207

4,058

3,149

16,236

10,519

5,717

Share and Earnings Per Share (EPS) Data:

Basic:

EPS using Net (loss) income (GAAP)

(2.67

)

0.98

(3.65

)

(1.89

)

2.72

(4.61

)

Adjusted EPS using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)

1.30

1.09

0.21

3.41

2.83

0.58

Fully-diluted:

EPS using Net (loss) income (GAAP)

(2.67

)

0.98

(3.65

)

(1.89

)

2.72

(4.61

)

Adjusted EPS using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)

1.30

1.09

0.21

3.39

2.83

0.56

Average common shares outstanding -basic (GAAP)

5,529,869

3,721,501

4,759,546

3,710,824

Average common shares outstanding -dilutive (GAAP)

5,529,869

3,735,993

4,759,546

3,723,196

Dilutive shares adjustment for Non-GAAP

33,649

—

24,284

—

Adjusted average common shares outstanding -diluted (Non-GAAP)

5,563,518

3,735,993

4,783,830

3,723,196

Selected Ratios:

Return on Average Assets (ROAA):

ROAA using Net (loss) income (GAAP)

-2.44

0.76

-320 bp

-0.54

0.72

-126 bp

Adjusted ROAA using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)

1.19

0.85

34 bp

0.97

0.74

23 bp

Return on Average Equity (ROAE):

ROAE using Net (loss) income (GAAP)

-29.70

12.49

-4219 bp

-7.03

12.18

-1921 bp

Adjusted ROAE using Net income excluding impact of restructuring loss and merger-related costs (Non-GAAP)

14.49

13.89

60 bp

12.68

0 bp

Efficiency Ratio:

Efficiency Ratio (GAAP)

-224.39

68.09

-29248 bp

134.56

68.31

6625 bp

Adjusted Efficiency Ratio excluding impact of restructuring loss and merger-related costs (Non-GAAP)

56.64

64.62

-798 bp

62.57

67.09

-452 bp

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Document and Entity Information

Oct. 27, 2026

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Quakertown

Entity Address, State or Province

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Common Stock

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Security Exchange Name

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