Current Press Releases
QNB Corp. Reports Record Earnings For Third Quarter 2018
Quakertown, PA (October 23, 2018) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the third quarter of 2018 of $3,211,000, or $0.92 per share on a diluted basis. This compares to net income of $2,554,000, or $0.74 per share on a diluted basis, for the same period in 2017. For the nine months ended September 30, 2018, QNB reported net income of $9,008,000, or $2.59 per share on a diluted basis. This compares to net income of $7,800,000, or $2.27 per share on a diluted basis, reported for the same period in 2017.
For the quarter ended September 30, 2018, the annualized rate of return on average assets and average shareholders’ equity was 1.07% and 11.64%, respectively, compared with 0.89% and 9.90%, respectively, for the third quarter 2017. For the nine months ended September 30, 2018, the annualized rate of return on average assets and average shareholders’ equity was 1.03% and 11.23%, respectively, compared with 0.94% and 10.37%, respectively, for the same period in 2017.
“QNB is pleased to report record net income and earnings per share for both quarterly and nine-month periods. During this time, the Bank has experienced exceptional loan growth and strong deposit growth. The number of personal and business households that we serve continues to increase.”
Net Interest Income and Net Interest Margin
Net interest income for the quarter and nine months ended September 30, 2018 totaled $8,704,000 and $26,195,000, respectively, an increase of $389,000 and $2,142,000, respectively, from the same periods in 2017. The net interest margin for the third quarter of 2018 was 3.06% compared with 3.15% for the third quarter of 2017. Net interest margin for the nine months ended September 30, 2018 was 3.14%, a decrease of one basis point compared to the same period in 2017. The yield on average earning assets increased 14 basis points to 3.83% for the third quarter of 2018, compared with the third quarter of 2017. For the nine months ended September 30, 2018, the yield on average earning assets was 3.82%, compared with 3.67% for the same period in 2017. The cost of interest-bearing liabilities increased to 0.93% and 0.83% for the quarter and nine months ended September 30, 2018, respectively, compared with 0.66% and 0.62% for the same periods in 2017.
Asset Quality, Provision for Loan Loss and Allowance for Loan Loss
QNB recorded a $568,000 provision for loan losses in the third quarter of 2018, compared with $100,000 for the same period in 2017. For the nine months ended September 30, 2018 and 2017, QNB recorded $943,000 and $700,000, respectively, in provision for loan losses. QNB's allowance for loan losses of $8,645,000 represents 1.10% of loans receivable at September 30, 2018 compared to $7,841,000, or 1.07% of loans receivable at December 31, 2017, and $8,125,000, or 1.15% of loans receivable at September 30, 2017. Net loan charge-offs were $139,000 for the first nine months of 2018, or 0.02% annualized of total average loans, compared with net recoveries of $31,000, 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 $10,890,000, or 1.39% of loans receivable at September 30, 2018, compared with $9,242,000, or 1.26% of loans receivable at December 31, 2017, and $10,437,000, or 1.48% of loans receivable at September 30, 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 September 30, 2018, $5,156,000, or approximately 54% of the loans classified as non-accrual are current or past due less than 30 days. At September 30, 2018 commercial substandard or doubtful loans totaled $20,103,000, compared with $16,647,000 reported at December 31, 2017 and $18,064,000 reported at September 30, 2017. The increase is due primarily to the classification of a single commercial relationship as non-accrual during the quarter.
Total non-interest income was $2,227,000 for the third quarter of 2018, an increase of $757,000, or 51.4%, compared with the same period in 2017, due to combined realized and unrealized net gains on investment securities totaling $912,000 in 2018 compared to realized net gains on investment securities of $98,000 in 2017. Non-interest income for the nine months ended September 30, 2018 was $4,748,000, a decrease of $327,000, or 6.4%, compared to the same period in 2017. Decreases in non-interest income for the third quarter 2018, compared with the same period in 2017, comprise: net gain on sale of loans, decreased $27,000, attributable to reduced gains on residential mortgage sales; a decrease of $10,000 in fees for services to customers from $429,000 in third quarter 2017 to $419,000 for the same period in 2018 attributable primarily to decreased overdraft charges, net of fee waivers; retail brokerage and advisory income decreased $72,000 for the third quarter of 2018 compared to the same period in 2017. QNB terminated its contract with its third-party broker-dealer effective August 1, 2018 and entered into a similar arrangement with another third-party provider. QNB Financial Services staff are in the process transferring accounts to the new provider’s platform and expect the transfer to be completed by year-end 2018.
These decreases in non-interest income were offset in part by a $41,000, or 9.4%, increase in ATM and debit card income to $476,000. Other non-interest income increased $11,000, or 4.0%, to $286,000.
Total non-interest expense was $6,385,000 for the third quarter of 2018, increasing $194,000, or 3.1%, from $6,191,000 for the same period in 2017. For the nine months ended September 30, 2018, non-interest expense increased $1,375,000, or 7.8%, from the same period in 2017. Salaries and benefits expense increased $98,000, or 2.8%, to $3,612,000 when comparing the two quarters. Salary expense and related payroll taxes increased $190,000 to $3,169,000, or 6.4%, during the third quarter of 2018 compared to the same period in 2017. Benefits expense decreased $92,000, or 17.2%, due primarily to medical insurance claims reimbursements, when comparing the two periods.
Net occupancy and furniture and equipment expense increased $56,000, or 5.9%, to $1,000,000 for the third quarter 2018, due primarily to increased building and furniture depreciation expense and computer software amortization and maintenance expense. Other non-interest expense increased $40,000, or 2.3%, when comparing the third quarter of 2018 with the third quarter of 2017, with increased professional services, third- party processing, and state shares tax expense offset in part by decreases in marketing, telephone and check-card charge-off expense.
Provision for income taxes decreased $173,000, or 18.4%, to $767,000 in the third quarter 2018 due to a reduced corporate tax rate from 34% to 21%, resulting from the Tax Cuts and Jobs Act, effective January 1, 2018. The effective tax rates for the quarter and nine months ended September 30, 2018 were 19.3% and 17.4%, respectively. This compares with effective tax rates for the same periods in 2017 of 26.9% and 27.2%, respectively.
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. 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 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.
Bill Marks Joins QNB Bank as Senior Vice President, Commercial Lending Officer
Quakertown, PA (October 23, 2018) Bill Marks was recently named Senior Vice President, Commercial Lending Officer at QNB Bank. He is responsible for business development of commercial loans, traditional banking and cash management services, and loan portfolio management.
Bill has been in banking for 32 years. In his previous employment, he served as Senior Vice President, Relationship Manager for Univest Corporation of PA. Bill earned his Bachelor of Arts Degree in Finance/Business at Penn State University.
Bill lives in Bethlehem, PA with his family. He has served as past President and Board Member of the Quakertown Rotary as well as past President of the Upper Bucks Chamber of Commerce. Bill has also served as past President and Board Member of the Risk Management Association, East Central PA Chapter.
Local Banker Receives Commercial Lending Honor Student Recognition
Quakertown, PA (October 23, 2018) Stephanie Zajkowski, Portfolio Administrator of QNB Bank’s Commercial Lending Department, achieved honor student status from the Pennsylvania Bankers Association’s (PA Bankers’) 2018 School of Commercial Lending in State College, Pa., June 3-7.
Honor students are selected due to outstanding work during school and on a post-test examination.
Stephanie has served the banking industry for 2 years. In her role, she is responsible for monitoring, managing and developing commercial lending relationships. Stephanie earned a Bachelor of Science from Villanova University for Accounting and Finance. She then continued her education at DeSales University where she received her MBA. Stephanie lives in Richland Township with her family. She remains active in her community where she serves as a Junior Achievement Volunteer and a Member of the St. Isidore Finance Committee. She is also actively involved in various Quakertown Community School District planning committees.
PA Bankers' School of Commercial Lending provides educational content similar to 200- and 300-level college course study. Topics for this program include business development, credit structuring, the practical application of commercial lending knowledge, and client and internal communication.
The Pennsylvania Bankers Association, located in Harrisburg, is the state’s leading banking trade association representing an expansive and diverse membership. The association offers extensive continuing education programs, government relations representation on behalf of the industry, and provides numerous products and services for banks and their employees.
Local Banker Receives Philanthropy Award
Quakertown, PA (September 27, 2018) Dale Westwood, Executive Vice President/Chief Retail Officer of QNB Bank, earned a Citizen Award at the Philadelphia Inquirer’s inaugural Corporate Philanthropy Conference & Awards on September 24th in Philadelphia. The Award recognizes Board Members who provide passionate philanthropic support for non-profit organizations within the community.
Westwood serves as Board President of the Upper Bucks YMCA; is Board President of The Open Link, a social service agency serving the Upper Perkiomen Valley; and is Chair of the Autumn Event, supporting the Penn Foundation in Sellersville. She has also implemented the Bank’s “Casual for a Cause” charity campaign, which has consistently raised over $10,000 per year for local and national charities. Westwood has served the banking industry for over 40 years and has been with QNB since 2008.
QNB Bank Helped United Way Stuff The Bus
Quakertown, PA (September 17, 2018) – QNB was proud to participate in this year’s Stuff the Bus School Supply Drive organized by United Way of Bucks County. Stuff the Bus is a campaign designed to collect school supplies such as backpacks, notepads, and binders so that all students in the Upper Bucks schools have the tools they need to succeed in their education.
Drop off boxes were placed at QNB Offices and other supporting businesses throughout Upper Bucks from July 16th through August 14th for employees and customers to donate items. On August 24th, representatives from Quakertown, Pennridge and Palisades School Districts along with 6 nonprofit agencies received a total of 356 supply-filled backpacks destined for local students.
QNB Mortgage Officer Connie Lindenmuth Earns Five Star Mortgage Professional Award
Quakertown, PA (September 13, 2018) For her fifth year now, Connie Lindenmuth of QNB Bank has received the Five Star Mortgage Professional Award. The Award recognizes professionals in the mortgage industry who provide quality services to their clients and is presented throughout the United States.
Market research is conducted to determine the recipients of the Five Star Professionals Award. It is designed to assist consumers in selecting a professional that other consumers have indicated as providing exceptional service. Connie will be formally recognized for her achievement in the September issue of Philadelphia Magazine.
QNB Bank Donates $5,375 to Southern Lehigh Public Library
Quakertown, PA (August 31, 2018) QNB Bank has once again teamed up with the Lehigh Valley IronPigs to help raise money for local libraries through the “Batting for Books” campaign. For the past 8 years, the Bank has pledged to donate $25 for each double hit by the IronPigs in their home stadium at Coca-Cola Park in Allentown. This season, the team hit a whopping 215 doubles for a total Bank contribution of $5,375! This year’s proud recipient was the Southern Lehigh Public Library. Since the program’s inception in 2011, QNB has donated $30,700 to local libraries.
QNB Corp. Declares Dividend
Quakertown, PA (August 28, 2018) The Board of Directors of QNB Corp. (OTC Bulletin Board: QNBC), parent company of QNB Bank, at a regular meeting on August 28, 2018 declared a quarterly cash dividend of $0.32 per share. The cash dividend is payable on September 28, 2018 to shareholders of record September 14, 2018.
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. 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.
Local Banker Graduates from Stonier Graduate School of Banking
Quakertown, PA (August 17, 2018) Chris Cattie, Executive Vice President/Chief Information Technology Officer of QNB Bank, recently graduated from the American Bankers Association Stonier Graduate School of Banking in Philadelphia.
Offered in partnership with the University of Pennsylvania’s Wharton School, the ABA Stonier Graduate School of Banking trains the future leaders of the industry. Nine percent of last year’s 684 attendees were executive vice presidents, chairpersons or CEO’s, while an additional 27 percent held the title of vice president or director. In addition, many attendees represent federal regulatory agencies or firms serving the industry. All participants are considered rising stars in their organizations and represent more than 48 states and 21 countries. For more than 80 years, Stonier has trained more than 26,000 of the nation’s top banking executives and government regulators, many of whom have reached the pinnacle of their organizations.
Chris has been in banking for 22 years. In his previous role at another financial institution, Chris served as Senior Vice President of Information Technology. He earned a Bachelor of Science from Lock Haven University for Accounting and Management. He then continued his education at LaSalle University where he received his MBA. Chris lives in Willow Grove with his family. He remains active in his community where he serves as a volunteer and coach for the Upper Moreland Soccer Club.
John Ventura Appointed as Community Reinvestment Act Officer of QNB Bank
Quakertown, PA (July 26, 2018) John Ventura has been appointed as the Community Reinvestment Act (CRA) Officer of QNB Bank. In addition to his current responsibilities as Vice President of Retail Lending, he will have supplementary responsibilities for the Bank’s Community Reinvestment and Fair Lending activities.
Prior to joining QNB Bank, John served as Chief Lending Officer at Gratz Bank. He also served as the Chief Credit and Administrative Officer at South Eastern Economic Development Corporation of Pennsylvania and Executive Vice President/Chief Lending/CRA Officer at First Savings Bank of Perkasie.
John holds a BA (Cum Laude) in Marketing from Alvernia University. He is also a graduate of the American Bankers Association School of Retail Banking, the PA Bankers School of Commercial Lending, and the Cannon Trust School. He holds an American Bankers Association Certificate in Lending Compliance. He has also taken numerous Risk Management Association (RMA) courses as well as Small Business Administration and PA Bankers Association courses.
John is a member of PA Bankers Association Professional Development Policy Committee and is the Director of the PA Bankers Association Advanced School of Banking for 2018.