Current Press Releases

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.

QNB Bank Promotes Lori Pinkerton to Assistant Vice President, Credit Manager

Quakertown, PA (January 25, 2019) QNB Bank has promoted Lori Pinkerton to the position of Assistant Vice President, Credit Manager. In her role, Lori is responsible for managing and participating in the underwriting process for commercial lending while training and developing new and existing credit analysts. In addition, Lori serves as the Process Coordinator for QNB’s Business Manager® product as well as Secretary of the Special Asset Committee.

Lori has been with QNB for 14 years, previously serving as Commercial Credit Analyst and most recently as Assistant Credit Manager. She graduated Summa Cum Laude from DeSales University where she earned her Bachelor of Science degree in Accounting.

Lori lives in Bethlehem, PA with her husband. She remains active in her community where she serves as a volunteer for Habitat for Humanity’s “build days” and community park clean-up days in the Lehigh Valley. Lori also serves on QNB’s Casual for a Cause committee to raise funds for local charities.

QNB Bank Promotes Justin Hartrum to Senior Vice President, Commercial Lending Officer

Quakertown, PA (January 11, 2019) QNB Bank has promoted Justin Hartrum to the position of Senior Vice President, Commercial Lending Officer. In his role, Justin is responsible for business development of commercial loans, traditional banking and cash management services, and loan portfolio management. In addition, Justin serves as the Program Manager for QNB Financial Services.

Justin has been with QNB for 12 years, previously serving as a credit analyst and most recently as Vice President, Commercial Lending Officer. He earned his Bachelor’s degree from Bucknell University followed by an MBA from Lehigh University. Justin is currently furthering his education at the ABA Stonier Graduate School of Banking at the University of Pennsylvania.

Justin lives in Easton, PA with his family. He remains active in his community where he serves as a Member of the Rotary Club of Saucon/Center Valley, Treasurer for the Rotary Club of Saucon Foundation, Inc., and President of the East Central PA Chapter of the Risk Management Association. Justin is also an assistant wrestling coach for the Wilson Youth Wrestling Association.

Jonas Homa Joins QNB Bank as Vice President, Commercial Lending Officer

Quakertown, PA (December 13, 2018) Jonas Homa was recently named 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.

Jonas has been in banking for 17 years. In his previous employment, he served as Vice President, Commercial Lender for OceanFirst Bank. Jonas earned his Bachelor of Science Degree in Accounting from West Chester University of Pennsylvania.

Jonas lives in Perkasie, PA with his family. He remains active in his community where he serves as a volunteer and coach for Pennridge Little League Baseball as well as Pennridge Yellow Jackets Soccer.

QNB Corp. Declares Dividend

Quakertown, PA (November 28, 2018) The Board of Directors of QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), parent company of QNB Bank (the “Bank”), at a regular meeting on November 27, 2018 declared a quarterly cash dividend of $0.32 per share. The cash dividend is payable on December 28, 2018 to shareholders of record December 14, 2018.

QNB is headquartered in Quakertown, Pennsylvania. The Bank currently operates 11 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. QNB Corp.’s stock is traded in the over-the-counter market under the symbol “QNBC.” More information about QNB Corp. and QNB Bank is available at QNBbank.com.

QNB Bank Unveils 2019 Collector Calendar

Quakertown, PA (November 8, 2018) Another New Year is just around the corner and with that comes the annual QNB Student Art Collector Calendar. Like years past, an art contest was held, open to high school students from surrounding districts. This year’s contest received a total of 97 entries from 6 different schools. The 2019 “Sports” Calendar is available now at all QNB Bank locations. Stop in and pick one up for free while supplies last!

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.

Non-Interest Income

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.

Non-Interest Expense

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.

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