QNB Corp. (OTCQX: QNBC) reported first‑quarter 2026 results that showed a 7.5% increase in net income to $2.765 million, or $0.73 per diluted share, compared with $2.578 million ($0.69) in the same period last year. The rise was driven by a 31‑basis‑point expansion of the net interest margin to 2.82%, from 2.51% in Q1 2025, as net interest income climbed to $13.109 million while the cost of interest‑bearing deposits fell.
The quarter’s balance‑sheet activity included a modest lift in loan balances to $1.282 billion and deposits to $1.653 billion. Return on average assets improved to 0.59% from 0.56% year‑over‑year, while return on average equity fell to 8.40% from 9.73%. Non‑performing loans rose to 0.75% of total loans, up from 0.70% at year‑end 2025, largely attributable to a single retail customer. Merger‑related costs of $754,000 were recorded, reflecting one‑time charges associated with the recently closed acquisition of Victory Bancorp.
Excluding the merger expense, adjusted diluted earnings per share reached $0.93, underscoring the underlying strength of QNB’s core franchise and the impact of margin expansion. The Victory Bancorp transaction, announced in September 2025 as a $40.97 million all‑stock deal and closed on April 1 2026, created a combined entity with roughly $2.4 billion in assets and expanded QNB’s presence in Montgomery County. "We reported solid first‑quarter earnings growth driven by improved margins, higher net interest income, and continued loan growth. While merger‑related costs impacted reported earnings, our performance remained strong. The closing of the Victory Bancorp transaction ultimately strengthens our balance sheet, broadens our market presence, and positions QNB for sustainable growth in the periods ahead," said President and CEO Dave Freeman.
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