QNB Corp. Announces Q3 2025 Earnings

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QNB Corp. Reports Earnings for Third Quarter 2025

QNB Corp. (OTCQX: QNBC) reported Q3 2025 net income of $3.65M ($0.98 diluted) and YTD net income of $10.11M ($2.72 diluted). Nine‑month results rose ~20.4% vs. prior year and include $519,000 of one‑time merger-related costs; adjusted diluted EPS excluding those costs was $1.09 (Q3) and $2.83 (YTD).

Key operating drivers: net interest income strength (NII up ~$2.46M; NIM 2.72% Q3 vs 2.48% LY) and loan growth to $1.247B. Balance sheet: assets $1.903B; deposits $1.682B. QNB announced an all‑stock acquisition of Victory Bancorp creating a combined company with nearly $2.4B in assets, expected to close Q4 2025–Q1 2026, subject to approvals.

Positive

Nine‑month net income up 20.4% year‑over‑year to $10.11M

Net interest income increased by $2.46M for Q3 2025

Pro‑forma combined assets of nearly $2.4B after proposed Victory merger

Loans grew 2.5% to $1.246B; deposits up 3.3% to $1.682B

Negative

Non‑interest expense rose to $10.18M in Q3, a 17.9% increase versus Q3 2024

Merger‑related one‑time costs of $519,000 reduced reported earnings

Non‑performing loans increased to $8.95M (0.72% of loans) from $1.98M at year‑end 2024

10/28/2025 – 02:19 PM

**QNB Corp. (QNBC) Reports Solid Q3 2025 Earnings Amidst Strategic Merger, but Asset Quality Concerns Emerge**

**Quakertown, PA** – QNB Corp. (OTCQX: QNBC), the parent company of QNB Bank, announced its Q3 2025 earnings, revealing a net income of $3.648 million, or $0.98 per diluted share, a modest increase from $3.338 million, or $0.91 per diluted share, in the same period last year. Year-to-date, the company reported a robust net income of $10.109 million, or $2.72 per diluted share, marking a significant rise from $8.397 million, or $2.29 per diluted share, in the corresponding period of 2024. These results, released October 28, 2025, paint a mixed picture of growth tempered by emerging challenges.

**Merger on the Horizon, But Costs Weigh on Profits**

A key development is QNB’s planned acquisition of The Victory Bancorp, Inc. This all-stock transaction, projected to close in late 2025 or early 2026 pending regulatory approvals, is set to create a banking behemoth with nearly $2.4 billion in assets. Post-merger, the shareholder ownership split is anticipated to be approximately 76.4% for QNB and 23.6% for Victory, representing a strategic move towards consolidating market share and expanding operational scale.

However, it is crucial to note that both the three- and nine-month periods of 2025 were impacted by merger-related costs totaling $519,000. By excluding these costs, which are classified as non-recurring operating expenses, the adjusted diluted earnings per share increase to $1.09 and $2.83 for the respective periods. This adjustment provides valuable insight into the underlying operational strength of QNB, although potential investors should bear in mind that merger-related integration and other synergy-related costs may emerge.

**Financial Performance: Interest Income Drives Growth**
QNB’s core banking operations continue to display resilience, with encouraging trends observed in key performance indicators. The annualized rates of return on average assets and average shareholders’ equity stood at 0.76% and 12.49%, respectively, for Q3 2025. This compares to 0.74% and 13.25% for the same period in 2024.

Excluding the impact of the merger-related expenses, return on average assets for the three and nine-month periods of 2025 was higher, at 0.85% and 0.74% respectively. As well, return on average equity was also positively affected, at 13.89% and 12.68% respectively.

The notable improvement in net interest income (NII), up $2.458 million, has fueled better results with the underlying profitability of QNB Bank which is the subsidiary of QNB Corp. This reflects effective asset management strategies and a favorable rate climate that has broadened its margins. Net interest margin (NIM), a critical measure of a bank’s profitability, also showed improvement, reaching 2.72% for Q3 2025 compared to 2.48% in the equivalent period in 2024. Driving this NII growth, the yield on earning assets exhibited a marginal increase of five basis points for the third quarter, signaling the company’s enhanced ability to generate revenue via investments. The combination of strategic asset allocation and favorable market dynamics have positively contributed to the bank’s earnings.

**Asset Quality: A Red Flag?**

However, QNB’s report revealed a concerning deterioration in asset quality. Total non-performing loans, representing loans on non-accrual status and those past due by 90 days or more while still accruing interest, aggregated to $8.947 million, or 0.72% of total loans receivable. This signifies a notable escalation compared to $1.975 million, or 0.16% of loans receivable, at the close of 2024.

The company attributes this increase primarily to one commercial customer relationship, with about 87% of the classified non-accrual loans being current or less than 30 days past due on September 30, 2025. Should market conditions worsen further, and/or the credit quality of the aforementioned commercial relationship wane, QNB may face a hit to future earnings.

The bank’s loan-loss provision for Q3 2025 stood at $98,000, which indicates that QNB is building its defense in response to potential credit losses. However, the long-term impact of the increase in non-performing real estate loans and its possible implications for investors remains an item to watch.

**Executive Commentary**

According to Dave Freeman, President and Chief Executive Officer, QNB is 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. Freeman goes on to say that credit environment reflects the continued resilience of consumers and businesses, further stating that this quarter 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.

**Investor Implications**

Overall, QNB’s Q3 2025 earnings reflect a financial institution navigating a dual path of growth and caution. The prospective merger with Victory Bancorp carries the promise of an augmented market presence and operational efficiencies, while the concurrent rise in non-performing loans requires careful supervision and proactive risk management. Given these counteracting forces, current and potential investors must adopt a nuanced perspective, thoroughly assessing the implications of each influence, to make informed predictions about QNB’s future financial performance.

What did QNBC report for Q3 2025 net income and EPS?
QNB reported Q3 2025 net income of $3.65M, or $0.98 diluted per share.

How did QNB’s nine‑month 2025 net income compare to 2024 for QNBC?
Nine‑month net income was $10.11M, up about 20.4% versus $8.40M in 2024.

What are the details and timing of QNB’s announced acquisition of Victory for QNBC?
QNB agreed to acquire Victory in an all‑stock deal creating ~$2.4B in assets; expected to close Q4 2025–Q1 2026, subject to regulatory and shareholder approvals.

How did net interest margin change for QNBC in Q3 2025?
Net interest margin was 2.72% in Q3 2025 versus 2.48% in Q3 2024.

What merger‑related costs did QNB record and how did they affect EPS for QNBC?
QNB recorded $519,000 of merger‑related costs in 2025; adjusted diluted EPS excluding those costs was $1.09 for Q3 and $2.83 year‑to‑date.

What change occurred in QNB’s asset quality metrics for QNBC at Sept 30, 2025?
Non‑performing loans increased to $8.95M (0.72% of loans), driven primarily by one commercial relationship.

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QNBC Stock Data

Market Cap
133.03M

Float
1.13M

Insiders Ownership
23.34%

Institutions Ownership
11.33%

Industry
Banks – Regional

Sector
Financial Services

Country
United States

City
Quakertown