Current Press Releases

QNB Corp. to Hold Previously Announced May 26, 2020 Annual Meeting of Shareholders by Virtual Means Due to Coronavirus Concerns

QUAKERTOWN, PA | May 6, 2020 – QNB Corp. (OTCBB: QNBC), parent Company of QNB Bank today announced that, due to the continuing public health concerns relating to the coronavirus (COVID-19) pandemic, and to protect the health and well-being of its shareholders, employees, and other stakeholders, the Company's 2020 annual shareholder meeting will now be held virtually. A proxy statement supplement will be filed today with the Securities Exchange Commission with additional information concerning the virtual meeting, which we urge shareholders to read in its entirety.

Although shareholders will not be able to attend the annual meeting in person, virtual attendance capabilities will provide shareholders the ability to participate and ask questions during the meeting. Additionally, the Company's shareholders will be deemed to be "present" if they access the annual meeting through the virtual platform and they will be able to vote their shares at the annual meeting, or revoke or change a previously submitted vote, through the virtual platform.

The virtual meeting will be held on the same date and time as previously announced, May 26, 2020 at 11:00 a.m. (EDT).  As described in the proxy materials for the annual meeting previously distributed, the Company's shareholders are entitled to participate in the annual meeting if they were a shareholder of record as of the close of business on March 24, 2020, which is the record date for the annual meeting. The proxy card included with the proxy materials previously distributed will not be updated to reflect the information provided in this announcement and may continue to be used to vote each shareholder's shares in connection with the annual meeting.

Shareholders will be able to attend the meeting online, vote their shares electronically, and submit their questions during the meeting. In light of the foregoing, the Company urges shareholders to consider voting and submitting proxies in advance of the annual meeting as described in the proxy materials previously provided to the Company's shareholders.

QNB Corp. offers commercial and retail banking services through the twelve 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 Promotes Gary Trively to Vice President, Branch Manager at Wescosville Office

QUAKERTOWN, PA | May 6, 2020 – QNB is pleased to announce the promotion of Gary Trively to the position of Vice President, Branch Manager at the Bank’s Wescosville Office. In his role, Gary is responsible for the effective management of the full-service branch. His duties include developing new business, retaining and expanding current businesses, and representing QNB through various civic and community functions. His previous position was Assistant Vice President, Branch Manager at the Wescosville Office.

Gary has been with QNB for 33 years. He is a graduate of Salisbury High School and has completed numerous American Institute of Banking courses. Gary is active in his community, serving as a leader of Christian education programs and consistory member at his local church. He is also a board member of the East Penn Chamber of Commerce. Gary currently resides in Northampton with his family.

QNB Corp. Reports Earnings for First Quarter 2020

QUAKERTOWN, PA (April 28, 2020) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank, reported net income for the first quarter of 2020 of $220,000, or $0.06 per share on a diluted basis, compared to net income of $3,379,000, or $0.97 per share on a diluted basis, for the same period in 2019.  

 

The reduction in net income and earnings per share, when comparing the two periods, is primarily due to a non-cash charge to non-interest income, a result of the decline in fair value of the equity securities portfolio held at by QNB Corp, our bank holding company. The following table presents disaggregated net income: 

 

3 months ended

 
 

3/31/2020

3/31/2019

variance

QNB Bank

    2,316,000

   2,676,000

      (360,000)

QNB Corp

  (2,096,000)

      703,000

   (2,799,000)

Consolidated net income

 $    220,000

 $ 3,379,000

 $ (3,159,000)

Total assets as of March 31, 2020 were $1,232,010,000 compared with $1,225,023,000 at December 31, 2019. Loans receivable at March 31, 2020 were $821,283,000 compared with $820,616,000 at December 31, 2019, an increase of $667,000, or 0.10%.  Total deposits at March 31, 2020 were $1,043,521,000, increasing $5,661,000, or 0.50%, compared with $1,037,860,000 at December 31, 2019.

“Our core banking business performed well during the first quarter 2020.  Loan growth slowed, but the deposit and household growth we saw in 2019 was sustained during first quarter 2020”, stated David W. Freeman, President and Chief Executive Officer. “While asset quality remains strong, we recorded additional loan loss provision, due to the decline in economic activity resulting from the economic crisis brought on by the COVID-19 pandemic.”

 

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended March 31, 2020 totaled $9,163,000, an increase of $327,000 from the same period in 2019. The net interest margin was 3.18% for the first quarter of 2020 and 2019.  The yield on earning assets was 3.92% for the first quarter 2020, a decrease of 12 basis points from 4.04% in the first quarter of 2019. The cost of interest-bearing liabilities decreased  14 basis points to 0.92% for the first quarter ended March 31, 2020, compared with 1.06% for the same period in 2019.

 

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

QNB recorded a $500,000 provision for loan losses in the first quarter of 2020 compared with $225,000 in the first quarter 2019.  QNB's allowance for loan losses of $10,334,000 represents 1.26% of loans receivable at March 31, 2020 compared to $9,887,000, or 1.20% of loans receivable at December 31, 2019, and $9,015,000, or 1.12% of loans receivable at March 31, 2019. Net loan charge-offs were $53,000 for the first quarter of 2020, or 0.03% annualized of total average loans, compared with of $44,000, or 0.02% for the first quarter of 2019.

 

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 $15,861,000, or 1.93% of loans receivable at March 31, 2020, compared with $16,464,000, or 2.01% of loans receivable at December 31, 2019, and $9,753,000, or 1.21% of loans receivable at March 31, 2019. 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, 2020, $4,172,000, or approximately 37% of the loans classified as non-accrual are current or past due less than 30 days.    At March 31, 2020, commercial substandard or doubtful loans totaled  $15,173,000, a decrease of $749,000 from the $15,922,000 reported at December 31, 2019 and an increase of $452,000, from the $14,721,000 reported at March 31, 2019.

 

Non-Interest Income

Total non-interest loss was ($1,571,000) for the first quarter of 2020, a decrease of $3,880,000 compared with the same period in 2019, due primarily to a  decrease in the fair value of the equity securities portfolio, when comparing the two periods. The equities portfolio comprises blue-chip large-capitalized stocks, providing a taxable equivalent dividend yield of 3.26%.   The performance of the portfolio during the first quarter of 2020 is commensurate with the overall performance of the U.S. stock market.  The unrealized loss in the portfolio was $2,940,000 at March 31, 2020, compared with an unrealized gain of $976,000 at March 31, 2019. The estimated cumulative contribution (realized and unrealized net gains, plus dividends) of the equities portfolio to earnings per share from January 1, 2008 through March 31, 2020 is $1.10 per share.

 

Excluding the change in fair value of equities, net interest income increased $36,000, or 2.7% when comparing the two periods.  Increases in non-interest income comprise; fees for services to customers, ATM and debit card income, and net gain on sale of loans, which increased $18,000, $18,000, and $60,000, respectively, in first quarter 2020 compared with the same period in 2019.

 

Retail brokerage and advisory income  and net gain on sale of securities decreased $28,000 and $6,000, respectively, when comparing the two periods. Other fee income decreases include $12,000 recorded for the broker-dealer conversion cost reimbursement, $12,000 in check sales to depositors and $9,000 in mortgage servicing fees.

Non-Interest Expense

 

Total non-interest expense was $7,278,000 for the first quarter of 2020, increasing $554,000, or 8.2% from $6,724,000  for the same period in 2019.  Salaries and benefits expense increased $291,000, or 7.7%, to $4,072,000 when comparing the two quarters.  Salary expense and related payroll taxes increased $305,000, or 9.8%, to $3,431,000 during the first quarter 2020 compared to the same period in 2019.  Medical premiums and post-retirement life insurance benefit expense decreased $26,000 and $26,000, respectively, while retirement plan expense increased $34,000 during the same period.   Net occupancy and furniture and equipment expense increased $136,000, or 12.8%, to $1,198,000 for the first quarter 2020, due primarily to increased depreciation of building and equipment of $69,000 and increased premises and equipment leasing expense totaling $46,000, when compared to first quarter 2019, as QNB’s newest Allentown location was not opened until third quarter and the Upper Perkiomen Branch had not yet relocated until fourth quarter 2019.  Other non-interest expense increased $127,000, or 6.8%, when comparing first quarter 2020 with first quarter 2019, due to an increase in marketing expense and bank share taxes of $85,000 and $72,000.

 

Income tax benefit was $406,000 in the first quarter 2020, compared to a provision of $817,000 in the first quarter 2019 due to decreased pre-tax income.

 

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates twelve 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, 2019. 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 Donates $40,000 to Local Education Organizations

Quakertown, PA (April 6, 2020) QNB Bank recently donated $40,000 to local education organizations through the State of Pennsylvania’s Educational Improvement Tax Credit (EITC) program. The program awards tax credits to businesses for contributions to Educational Improvement Organizations. Since 2017, QNB has donated $152,750 through the program.

For 2020, QNB donated to the following organizations: Allentown School District Foundation, Allentown Symphony Association, Big Brothers Big Sister of Bucks County, Big Brothers Big Sisters of the Lehigh Valley, Boy Scouts of America - Minsi Trails Council, Bucks County Community College Foundation, Centennial Education Foundation, Communities in Schools of the Lehigh Valley, Inc., Community Bike Works, Flint Hill Farm Educational Center, Inc., Lehigh Carbon Community College Foundation, North Penn School District Educational Foundation, North Penn Valley Boys & Girls Club, Inc., Perkiomen Valley School District Foundation, Touchstone Theatre, Valley Youth House Committee, Inc., and YMCA of Bucks County.

QNB is a full-service community bank that has provided exceptional personalized banking services to individuals and businesses since 1877. With assets of approximately $1.2 billion, QNB currently operates twelve branches in Bucks, Montgomery and Lehigh Counties. More information about QNB is available at QNBbank.com.

Local Banker Graduates from PA Bankers Leadership Institute

QUAKERTOWN, PA | April 1, 2020 – Lisa Otery, Senior Vice President of Deposit Operations at QNB Bank, recently graduated from the 2019-20 PA Bankers Leadership Institute.

Through six two-day sessions over 15 months, the PA Bankers Leadership Institute utilizes a multi-dimensional leadership training model, which takes participants “behind the curtain” to examine the success that comes from a strong organizational culture and assess how it relates to performance, leadership, engagement and communication to achieve results. Participants are guided by banking leadership experts, including Dr. Linda Eagle, president and co-founder of Global Bankers Institute, and Dennis Budinich, senior vice president, chief culture officer at Investors Bank.

“The Pennsylvania Bankers Association is proud to continually offer the PA Bankers Leadership Institute,” said Duncan Campbell, PA Bankers’ president & CEO. “Through its unique model, the program develops leaders who will sustain, maintain and grow Pennsylvania’s banking industry, which is vital to the economic future of the commonwealth.”

Lisa Otery has served the banking industry for over 30 years. In her role at QNB, she is responsible for the efficient operation and supervision of her department. In addition to her role at QNB, Lisa assists the current board members of the Jack Henry-Silver Lake Mid-Atlantic Regional User Group where she had once served as President.

PA Bankers has been bringing banks and bankers together for 125 years to learn, grow, serve and engage with their peers, communities and lawmakers. The association has built a strong reputation as a leading advocate for pro-banking policies at the state and federal levels, as well as the delivery of quality education, products and services for banks of all sizes and their employees.

QNB Bank Seeking Student Art for 2021 Collector Calendar

QUAKERTOWN, PA | March 13, 2020 – QNB Bank is seeking artwork for its 2021 Student Art Calendar Contest from high school students (grades 9-12) of all schools in the QNB Bank market area. This will be the 25th installment of the QNB Student Art Collector Calendar.

The theme for this year is “Flowers, Plants & Trees” 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 are available on QNB's website and can also be picked up at any QNB Bank location or participating schools’ art departments. Artwork may 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 25, 2020) The Board of Directors of QNB Corp. (OTC Bulletin Board: QNBC), parent company of QNB Bank, at a regular meeting on February 25, 2020 declared a quarterly cash dividend of $0.34 per share. The amount represents a 3.0% increase from the prior quarter. Based upon the closing price of a share as of close of business February 24, 2020, this represents a yield of 3.8%. The cash dividend is payable on March 27, 2020 to shareholders of record March 13, 2020.

“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 3.0%. 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 twelve 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 Employees Donate Over $39,000 to United Way

Quakertown, PA (February 12, 2020) – 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 $32,539 from employees and an additional $6,507 from the Bank for a total contribution of $39,046.

QNB is a full-service community bank that has provided exceptional personalized banking services to individuals and businesses since 1877. With assets of approximately $1.2 billion, QNB currently operates twelve branches in Bucks, Montgomery and Lehigh Counties. More information about QNB is available at QNBbank.com.

QNB Bank Celebrates Upper Perkiomen Valley Office Grand Opening

Pennsburg, PA (January 30, 2020) – The Grand Opening and Ribbon Cutting Celebration for QNB Bank’s new Upper Perkiomen Valley Office took place on January 29th. Located at 410 Pottstown Avenue, the new branch is right next to where QNB’s old Pennsburg Office used to reside in the Pennsburg Square Shopping Center. The new full-service branch features 2 drive-thru lanes, expanded parking, full cash handling via automated cash recyclers, a coin machine, instant issue check cards, and a 24-hour ATM and night depository.

QNB is a full-service community bank that has provided exceptional personalized banking services to individuals and businesses since 1877. With assets of approximately $1.2 billion, QNB currently operates twelve branches in Bucks, Montgomery and Lehigh Counties. More information about QNB is available at QNBbank.com.

QNB Corp. Reports Earnings for Fourth Quarter 2019

Quakertown, PA (January 30, 2020) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the quarter of 2019 of $2,745,000, or $0.78 per share on a diluted basis. This compares to net income of $2,327,000, or $0.67 per share on a diluted basis, for the same period in 2018.  For the twelve months ended December 31, 2019, QNB reported net income of $12,357,000, or $3.53 per share on a diluted basis. This compares to net income of $11,335,000, or $3.25 per share on a diluted basis, reported for the same period in 2018.

For the quarter ended December 31, 2019, the annualized rate of return on average assets and average shareholders’ equity was 0.88% and 9.06%, respectively, compared with 0.78%% and 8.29%, respectively, for the fourth quarter 2018.  For the twelve months ended December 31, 2019, the return on average assets and average shareholders’ equity was 1.02% and 10.58%, respectively, compared with 0.96% and 10.47%, respectively, for the same period in 2018.

QNB is pleased to report increased net income and earnings per share for the quarter, and record net income and earnings per share for the year ended December 31, 2019.  Loan, deposit and household growth remained strong throughout 2019.  In addition to opening a 12th location -- our Allentown Office late in the third quarter -- in December we relocated our full-service branch within the Pennsburg Square Shopping Center to a free-standing pad site in the same center. Our newly named Upper Perkiomen Valley Office provides improved visibility and convenience of access to customers.

Net Interest Income and Net Interest Margin

Net interest income for the quarter and twelve months ended December 31, 2019 totaled $9,165,000 and $36,294,000, respectively, an increase of $345,000 and $1,279,000, respectively, from the same periods in 2018. The net interest margin for the fourth quarter of 2019 and 2018 was 3.11%.  Net interest margin for the twelve months ended December 31, 2019 was 3.16%, an increase of three basis point compared to the same period in 2018.  The yield on average earning assets increased one basis point to 3.92% for the fourth quarter of 2019, compared with the fourth quarter of 2018.  For the twelve months ended December 31, 2019, the yield on average earning assets was 4.02%, compared with 3.85% for the same period in 2018.   The cost of interest-bearing liabilities increased to 1.02% and 1.07% for the quarter and twelve months ended December 31, 2019, respectively, compared with 1.01% and 0.88% for the same periods in 2018.

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

QNB recorded a $375,000 provision for loan losses in the fourth quarter of 2019, compared with $187,000 for the same period in 2018.   For the twelve months ended December 31, 2019 and 2018, QNB recorded $1,300,000 and $1,130,000, respectively, in provision for loan losses.  QNB's allowance for loan losses of $9,887,000 represents 1.20% of loans receivable at December 31, 2019 compared to $8,834,000, or 1.12% of loans receivable at December 31, 2018.  Net loan charge-offs were $247,000 for 2019, or 0.03% of total average loans, compared with net charge-offs of $137,000, or 0.02% of total average loans, for the same periods in 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 $16,464,000, or 2.01% of loans receivable at December 31, 2019, compared with $9,638,000, or 1.23% of loans receivable at December 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 December 31, 2019, $7,245,000, or approximately 62% of the loans classified as non-accrual are current or past due less than 30 days.  At December 31, 2019 commercial substandard or doubtful loans totaled $15,922,000, compared with $18,339,000 reported at December 31, 2018.   

Non-Interest Income

Total non-interest income was $2,210,000 for the fourth quarter of 2019, an increase of $2,066,000 compared with the same period in 2018, due largely to combined realized and unrealized net gains on investment securities totaling $696,000 in 2019 compared to a loss of $1,252,000 in 2018.  Non-interest income for the twelve months ended December 31, 2019 was $8,317,000, an increase of $3,425,000, or 70.0%, compared to the same period in 2018, of which $2,937,000 is attributable to increased realized and unrealized investment gains.  ATM and debit card income increased $46,000 due to increased card activity when comparing the two quarterly periods.  Retail brokerage income increased $75,000 due to increased penetration due to increased assets under management.  Net gain on sale of loans increased $60,000, due to increased mortgage loan originations and secondary market sales, the result of lower interest rates in the fourth quarter 2019.  Fees for services to customers declined $7,000 during fourth quarter 2019 compared to fourth quarter 2018, due to less overdraft income and service charges on deposits accounts.  Other non-interest income declined $56,000, due primarily to a reduction in income for sale of checks, and disposal of fixed assets related to the relocation of the Pennsburg location.

Non-Interest Expense

Total non-interest expense was $7,632,000 for the fourth quarter of 2019, increasing $843,000, or 12.4%, from $6,789,000 for the same period in 2018.  For the twelve months ended December 31, 2019, non-interest expense increased $2,219,000, or 8.6%, from the same period in 2018.  Salaries and benefits expense increased $625,000, or 16.3%, to $4,452,000 when comparing the two quarters.  Salary expense and related payroll taxes increased $510,000 to $3,759,000, or 15.7%, during the fourth quarter of 2019 compared to the same period in 2018, due, in part, to the addition of branch staff in our new Allentown location and increased expense for incentive compensation.  Benefits expense increased $115,000, or 20.1%, due primarily to medical insurance claims reimbursements and increased retirement plan costs, when comparing the two periods.  

Net occupancy and furniture and equipment expense increased $186,000, or 17.4%, to $1,254,000 for the fourth quarter 2019, due primarily to increased building and furniture depreciation expense, increased rent expense and computer software amortization and maintenance expense.  Other non-interest expense increased $32,000 when comparing the fourth quarter of 2019 with the fourth quarter of 2018, with increased marketing, state taxes, travel and entertainment, check charge-offs and check card expenses offset in part by decreased FDIC insurance costs.  During the fourth quarter 2019, we received a “small bank assessment credit”, applicable for our third quarter FDIC insurance assessment in the amount of $136,000.  The FDIC insurance fund was determined to have a surplus, and small institutions were eligible for a payment credit.

Provision for income taxes increased $962,000 in the fourth quarter 2019, compared with the same period in 2018.   During the fourth quarter of 2018, the Company recorded a $418,000 income tax benefit to tax provision.  This one-time tax benefit was related to an elected change in accounting for deferred loan origination fees and nonaccrual interest income, taking advantage of the reduction in the federal 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 twelve months ended December 31, 2019 were 18.5% and 18.7%, respectively.  This compares with effective tax rates for the same periods in 2018 of -17.1% and 12.1%, respectively. 

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates twelve 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, 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.

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