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Current Press Releases

QNB Corp. Declares Dividend

Quakertown, PA (May 28, 2019) The Board of Directors of QNB Corp. (OTC Bulletin Board: QNBC), parent company of QNB Bank, at a regular meeting on May 28, 2019 declared a quarterly cash dividend of $0.33 per share. The cash dividend is payable on June 28, 2019 to shareholders of record June 14, 2019.

QNB Corp. offers commercial and retail banking services through the eleven banking offices of its subsidiary, QNB Bank. QNB Corp.’s stock is traded in the over-the-counter market under the symbol “QNBC.” For more information, visit QNB’s web site at QNBbank.com.

QNB Bank Sponsors She Nailed It Competition of Habitat for Humanity Lehigh Valley

Quakertown, PA (May 8, 2019) QNB Bank was proud to sponsor and take part in the “She Nailed It!” Social & Competition in Center Valley on May 6th. The annual fundraiser benefits Habitat for Humanity’s Women Build initiative, designed to recruit, educate and empower women to break stereotypes and fight poverty housing. This year’s donations will benefit an 8-home, new construction project in Allentown.

At the event, teams of four competed to see who could hammer home the cause the fastest in a nail-hammering relay race. QNB’s Lynn Housenick, Jennifer James, Keri Hausman, and Sherrie Rotenberger took 1st place in fundraising for the third year in a row!

QNB Corp. Reports Earnings Increase for First Quarter 2019

Quakertown, PA (April 23, 2019) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank, reported net income for the first quarter of 2019 of $3,379,000, or $0.97 per share on a diluted basis, compared to net income of $2,935,000, or $0.85 per share on a diluted basis, for the same period in 2018. 

Total assets as of March 31, 2019 were $1,203,126,000 compared with $1,175,452,000 at December 31, 2018. Loans receivable at March 31, 2019 were $804,528,000 compared with $785,448,000 at December 31, 2018, an increase of $19,080,000, or 2.4%.  Total deposits at March 31, 2019 were $1,034,614,000, increasing $19,016,000, or 1.9%, compared with $1,015,598,000 at December 31, 2018.

“Net income and diluted earnings per share grew 15.1% and 14.1%, respectively, compared to the first quarter of 2018,” said David W. Freeman, President and Chief Executive Officer. “The loan, deposit, and household growth we saw in 2018 was sustained during first quarter 2019 and asset quality remains strong.  Also, our securities and advisory service platform conversion is substantially complete.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended March 31, 2019 totaled $8,835,000, an increase of $44,000, from the same period in 2018. The net interest margin was 3.18% for the first quarter of 2019 and 3.22% for first quarter 2018.  The yield on earning assets was 4.04% for the first quarter 2019, an increase of 21 basis points from 3.83% in the first quarter of 2018.  The cost of interest-bearing liabilities increased  31 basis points to 1.06% for the first quarter ended March 31, 2019, compared with 0.75% for the same period in 2018.

Asset Quality, Provision for Loan Loss and Allowance for Loan Loss

QNB recorded a $225,000 provision for loan losses in the first quarter of 2019 compared with $188,000 in the first quarter 2018.  QNB's allowance for loan losses of $9,015,000 represents 1.12% of loans receivable at March 31, 2019 compared to $8,834,000, or 1.12% of loans receivable at December 31, 2018, and $8,037,000, or 1.07% of loans receivable at March 31, 2018. Net loan charge-offs were $44,000 for the first quarter of 2019, or 0.02% annualized of total average loans, compared with net recoveries of $8,000 for the first quarter of 2018.

Total non-performing loans, which represent loans on non-accrual status, loans past due 90 days or more and still accruing interest and restructured loans were $9,753,000, or 1.21% of loans receivable at March 31, 2019, compared with $9,638,000, or 1.23% of loans receivable at December 31, 2018, and $8,327,000, or 1.11% of loans receivable at March 31, 2018. In cases where there is a collateral shortfall on impaired loans, specific impairment 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, 2019, $2,770,000, or approximately 36% of the loans classified as non-accrual are current or past due less than 30 days.  Commercial loans classified as substandard or doubtful, which includes non-performing loans, improved.  At March 31, 2019, substandard or doubtful loans totaled $ 14,721,000, a decrease of $3,618,000, or 19.7%, from the $18,339,000 reported at December 31, 2018 and a decrease of $2,695,000, or 15.5%, from the $17,416,000 reported at March 31, 2018.

Non-Interest Income

Total non-interest income was $2,309,000 for the first quarter of 2019, an increase of $1,242,000, or 116.4%, compared with the same period in 2018.  Increases in non-interest income comprise; net unrealized gain on investment securities , ATM and debit card, brokerage and advisory, other income and net gain on sale of loans, which increased $1,222,000, $40,000, and $38,000, $35,000, and $14,000 respectively, in first quarter 2019 compared with the same period in 2018.  Other fee income increases include $29,000 recorded for the broker-dealer conversion cost reimbursement and increased letter of credit income. The net unrealized gain on investment securities was $976,000 in the first quarter of 2019 compared with unrealized losses of equity securities of $246,000 for the same period in 2018.   

Fees for services to customers and realized gain on investment securities decreased $28,000, or 6.6%, and $79,000, or 92.9%,  respectively, when comparing the first quarter 2019 to the same period in 2018.  The decrease in fees for services to customers is due primarily to an decrease in overdraft income, while the decrease in gains on securities sales is a result of reduced opportunity for profitable sale of equities and a $39,000 net loss on sale of available for sale securities for a trade out of low-yielding mortgage-backed bonds into higher-yielding municipal bonds.

Non-Interest Expense

Total non-interest expense was $6,723,000 for the first quarter of 2019, increasing $545,000, or 8.8%, from $6,178,000  for the same period in 2018.  Salaries and benefits expense increased $436,000, or 13.0%, to $3,781,000 when comparing the two quarters.  Salary expense and related payroll taxes increased $275,000, or 9.6%, to $3,126,000 during the first quarter 2019 compared to the same period in 2018.  Medical premiums, retirement plan expense and post-retirement life insurance benefit expense increased $135,000, $9,000, and $13,000, respectively during the same period.   Net occupancy and furniture and equipment expense increased $103,000, or 10.8%, to $1,061,000 for the first quarter 2019, due primarily to increased depreciation of building and equipment of $49,000 and increased building and software maintenance expense totaling $48,000, when compared to first quarter 2018.  Other non-interest expense increased $6,000, or 0.3%, when comparing first quarter 2019 with first quarter 2018.

Provision for income taxes increased 46.7%, to $817,000 in the first quarter 2019 due to increased pre-tax income and a higher proportion of taxable versus tax-free income, compared with the same period in 2018.  The effective tax rates for the first quarters of 2019 and 2018 were 19.5% and 16.0%, respectively, due to increased state income tax provisions related to the increase in unrealized gains on the equities portfolio.

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking services in the communities it serves.  More information about QNB Corp. and QNB Bank is available at www.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, 2018. 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.

Local Banker Receives Years of Service Award

Quakertown, PA (April 18, 2019) Bruce Kenworthy of QNB Bank was recognized for serving 50 or more years in the banking industry at the Pennsylvania Bankers Association (PA Bankers) Group 2 meeting held on April 8th at the Rivercrest Golf Club in Phoenixville.

The 50-Year Club consists of bankers completing 50 or more years of service in Pennsylvania’s banking industry who are regular members of the PA Bankers.

Bruce Kenworthy has served the banking industry for 51 years. Currently, he serves as Assistant Vice President, Business Development Officer at QNB Bank. Bruce holds a Bachelor of Science in Economics from Ursinus College with a minor in Accounting. He is also a graduate of the Bucknell School of Banking. Additionally, Bruce’s article “Grass Roots Marketing Can Grow Profitable Business” has been published in the ABA Banking Journal. Formerly, Bruce served in multiple managerial positions for Philadelphia National Bank, followed by Bucks County Bank and First Union Bank.

QNB Bank Seeking Student Art for 2020 Collector Calendar

Quakertown, PA (March 15, 2019) QNB Bank is seeking artwork for its 2020 Student Art Calendar Contest from high school students (grades 9-12) of all schools in the QNB Bank market area. This will be the 24th installment of the QNB Student Art Collector Calendar.

The theme for this year is “Still Life” and the art format is the same as previous years – a pen and ink drawing. Fourteen drawings will be selected by the Bank to be featured in the Calendar. Entry forms with a full list of rules and regulations for the Contest can be picked up at any QNB Bank location or participating schools’ art departments. Artwork may also be mailed to:

QNB Bank
Attn: Marketing Department
PO Box 9005
Quakertown, PA 18951-9005

Winners of the contest will be chosen and notified in June. Questions may be directed to the QNB Bank Marketing Department at 215-538-5600 ext. 5756.

QNB Corp. Increases Dividend

Quakertown, PA (February 26, 2019) The Board of Directors of QNB Corp. (OTC Bulletin Board: QNBC), parent company of QNB Bank, at a regular meeting on February 26, 2019 declared a quarterly cash dividend of $0.33 per share. The amount represents a 3.1% increase from the prior quarter. Based upon the closing price of a share as of close of business February 22, 2019, this represents a yield of 3.5%. The cash dividend is payable on March 29, 2019 to shareholders of record March 15, 2019.

“As a result of the continued solid financial performance of QNB Corp., the Board of Directors is pleased to be able to increase the dividend by 3.1%. As a result of its well capitalized position, QNB Corp. is able to continue its uninterrupted history of quarterly dividends,” said David W. Freeman, President and Chief Executive Officer.

QNB Corp. offers commercial and retail banking services through the eleven banking offices of its subsidiary, QNB Bank. QNB Corp.’s stock is traded in the over-the-counter market under the symbol “QNBC.” For more information, visit QNB’s web site at QNBbank.com.

QNB Bank Customers Save on TurboTax®

Quakertown, PA (January 29, 2019) QNB has teamed up with TurboTax® to get your taxes done right. Through a marketing alliance with Intuit® Inc., QNB Bank customers can save up to $15 on TurboTax federal products. In addition, Intuit offers a TurboTax Free Edition for basic tax returns and free e-filing on all federal and state products. With TurboTax, taxpayers can easily prepare and file federal and state income tax returns online. TurboTax searches over 350 deductions and credits, so you won’t miss a thing. QNB’s customers can be confident that their returns are accurate and complete. This year, file your taxes the smarter way and get your biggest possible refund with TurboTax.

TurboTax can be accessed from QNB Bank’s website and is available to use through October 15, 2019, the last filing date for tax year 2018.

QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking in the communities it serves.

Intuit and TurboTax are registered trademarks of Intuit Inc.

QNB Bank and Employees Donate Over $38,000 to United Way

Quakertown, PA (January 28, 2019) QNB Bank recently held its annual campaign to raise funds for United Way. Led by Patti Cole, this year’s campaign was the most successful yet, tallying up an impressive $32,423 from employees and an additional $6,484 from the Bank for a total contribution of $38,907.

QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking in the communities it serves.

QNB Bank Promotes Cheryl Morris to Senior Vice President, Chief Credit Officer

Quakertown, PA (January 28, 2019) QNB Bank has promoted Cheryl Morris to the position of Senior Vice President, Chief Credit Officer. In her role, Cheryl is responsible for measuring and managing the risk in the Bank’s loan portfolio. In addition, Cheryl oversees Credit, Documentation and Loan Servicing.

Cheryl has been in banking for 28 years, previously serving as Vice President, Credit Manager at QNB Bank. She earned her Bachelor of Business Administration degree at the College of William & Mary and went on to earn her Master of Business Administration degree from Lehigh University. Cheryl then continued her education at ABA Commercial Lending Graduate School where she graduated with honors.

Cheryl lives in Doylestown, PA with her family. She remains active in her community where she plays handbells and serves on the Adult Education Committee at Doylestown Presbyterian Church. Cheryl also serves on the parent committee of Boy Scouts of America Troop 48, is a Board Member of Doylestown Athletics Association Basketball, and is President of the booster club for the Central Bucks West boys soccer team.

QNB Corp. Reports 2018 Earnings

Quakertown, PA (January 25, 2019) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the fourth quarter of 2018 of $2,327,000, or $0.67 per share on a diluted basis. This compares to net income of $489,000, or $0.14 per share on a diluted basis, for the same period in 2017.  For the year ended December 31, 2018, QNB reported net income of $11,335,000, or $3.25 per share on a diluted basis. This compares to net income of $8,289,000, or $2.41 per share on a diluted basis, reported for the same period in 2017.  For the year 2018 the rate of return on average assets and average shareholders’ equity was 0.96% and 10.47%, respectively, compared with 0.74% and 8.17%, respectively, for the year 2017.  Both quarterly and year-to-date results in both years were impacted by 2017 tax reform, enacted in December 2017, detailed below in the “Income Tax” section of this earnings release.

Total assets as of December 31, 2018 were $1,175,452,000 compared with $1,152,337,000 at December 31, 2017. Loans receivable at December 31, 2018 were $785,448,000  compared with $733,283,000 at December 31, 2017, an increase of $52,165,000, or 7.1%.  Total deposits at December 31, 2018 were $1,015,598,000, an increase of 2.2% compared with $993,948,000 at December 31, 2017.

“QNB is pleased to report the Bank has experienced strong loan and steady deposit growth and the number of personal and business households that we serve continued to increase throughout the year,” said CEO Dave Freeman.  “Net income benefited from the lower corporate tax rate in 2018, which resulted in record net income and earnings per share for the year.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter and year ended December 31, 2018 totaled $8,820,000 and $35,015,000, respectively, an increase of $451,000 and $2,593,000, respectively, from the same periods in 2017. The net interest margin for the fourth quarter of 2018 and 2017 was 3.11%.  Net interest margin for the year ended December 31, 2018 was 3.13%, a decrease of one basis point compared to the same period in 2017.  The yield on average earning assets increased 27 basis points to 3.93% for the fourth quarter of 2018, compared with the fourth quarter of 2017.  For the year ended December 31, 2018, the yield on average earning assets was 3.85%, compared with 3.67% for the same period in 2017.   The cost of interest-bearing liabilities increased to 1.01% and 0.88% for the quarter and year ended December 31, 2018, respectively, compared with 0.68% and 0.64%, respectively, for the same periods in 2017.

Asset Quality, Provision for Loan Loss and Allowance for Loan Loss

QNB recorded a $187,000 provision for loan losses in the fourth quarter of 2018, compared with $700,000 for the same period in 2017.   For the years ended December 31, 2018 and 2017, QNB recorded $1,130,000 and $1,400,000, respectively, in provision for loan losses.  QNB's allowance for loan losses of $8,834,000 represents 1.12% of loans receivable at December 31, 2018 compared to $7,841,000, or 1.07% of loans receivable at December 31, 2017.  Net loan charge-offs for the year ended December 31, 2018 were $137,000, or 0.02% of total average loans, compared with net charge-offs of $953,000 for the same period in 2017.

Total non-performing loans, which represent loans on non-accrual status, loans past due 90 days or more and still accruing interest and restructured loans were $9,638,000, or 1.23% of loans receivable at December 31, 2018, compared with $9,242,000, or 1.26% of loans receivable at December 31, 2017.  In cases where there is a collateral shortfall on impaired loans, specific impairment 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, 2018, $3,072,000, or approximately 41% of the loans classified as non-accrual are current or past due less than 30 days.  At December 31, 2018 commercial substandard or doubtful loans totaled $18,339,000, compared with $16,647,000 reported at December 31, 2017.

Non-Interest Income

Total non-interest income was $144,000 for the fourth quarter of 2018, and $4,892,000 for the year ended December 31, 2018, a decrease of $1,668,000 and $1,995,000, respectively, compared to the same periods in 2017, respectively.  The decrease is due primarily due to combined realized and unrealized net loss on investment securities totaling $1,252,000 for the quarter and $412,000 for the year in 2018 compared with realized net gains on investment securities of $538,000 and $1,500,000, respectively, for the same periods in 2017.  ATM and debit card income and fees for services to customers increased $54,000 and $25,000 in the fourth quarter 2018, compared with the same period in 2017.  Other fee income increases include $48,000 recorded for a broker-dealer conversion cost reimbursement, a $17,000 increase in letter of credit fees, and $16,000 in credits earned for sale of checks.   Gain on sale of loans declined $36,000, due to a slowdown in mortgage activity, due to the rising rate environment.

Non-Interest Expense

Total non-interest expense was $6,789,000 for the fourth quarter of 2018, an increase of $790,000, or 13.2%, compared with $5,999,000 for the fourth quarter of 2017.  For year ended December 31, 2018, total non-interest expense increased $2,165,000, or 9.1%, to $25,885,000, compared to the same period in 2017.  Salaries and benefits expense increased $543,000, or 16.5%, for the quarter ended December 31, 2018, compared to the same period in 2017.  Salary expense increased $272,000, accrued incentives increased $73,000, medical premiums increased $174,000 and retirement expense increased $38,000 for the fourth quarter 2018, compared with the same period in 2017.  For the year ended December 31, 2018 salaries and benefits expense increased $1,290,000, or 9.8%, compared to the same period in 2017, for the same reasons detailed for the quarterly increase.   Net occupancy and furniture and equipment expense increased $125,000, or 13.3%, for the fourth quarter 2018 compared to the same period in 2017, due primarily to increased depreciation, software, equipment, rent, and building maintenance and expense of $84,000, $35,000, $8,000, and $7,000, respectively.  For year ended December 31, 2018, net occupancy and furniture and equipment costs increased $389,000, or 10.7%, compared to the same period in 2017, due primarily to increased software, depreciation, equipment and building maintenance, and rent expense of $154,000, $102,000, $63,000 and $21,000, respectively.  Other operating expenses for the quarter ended December 31, 2018 increased $122,000, or 6.9%, due to increased marketing, consulting, state taxes, third party processing and FDIC insurance premiums.  Other operating expenses for the year ended December 31, 2018 increased $486,000, or 7.0%, due to increased FDIC insurance premiums, state tax, and check card expenses.

Income Tax

The effective tax rates for the quarter and year ended December 31, 2018 were -17.1% and 12.1%, respectively.  This compares with effective tax rates for the same periods in 2017 of 86.0% and 41.6%, respectively.   Both the quarterly and year-to-date tax rates were impacted by adjustments due to tax reform and lower tax rates.  Provision for income taxes decreased $3,332,000 and $4,343,000 for the fourth quarter and year ended December 31, 2018, respectively.  In December 2017, the Tax Cuts and Jobs Act was enacted, which reduced the corporate federal tax rate to 21% from 34%, effective January 1, 2018.  The 2017 enactment date required the Company to revalue its deferred tax asset, which resulted in a fourth quarter 2017 charge of $2,054,000 to its 2017 tax provision.  In the fourth quarter of 2018, the Company elected to change tax accounting methods for deferred loan origination fees and nonaccrual interest income effective for the 2017 return, resulting in a one-time $418,000 income tax benefit to 2018 tax provision.  This one-time tax benefit takes advantage of the reduction in the federal tax rate from 34% to 21%.  $1,559,000 of the decrease in tax provision in 2018 versus 2017 was due to lower effective tax rates, and $312,000 due to lower taxable income in 2018.

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking services in the communities it serves. More information about QNB Corp. and QNB Bank is available at www.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, 2017. 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.

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