QNB Corp. Q2 Earnings: Merger Costs Mask Core Strength; Adjusted EPS $1.05
QNBC sits 37% above its 52-week low of $32.16 on light trading volume (0.2× avg).
Summary
QNB Corp. reported Q2 GAAP EPS of $0.60, down from $1.04 a year ago due to $3.1M in merger costs from the Victory Bancorp acquisition. Adjusted EPS of $1.05 shows core earnings stability. The balance sheet has nearly doubled, and the net interest margin improved to 3.16%.
Key Events · Earnings and Guidance · QNBC
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Q2 GAAP EPS $0.60, Adjusted EPS $1.05
Net income of $3.015 million was reduced by $3.084 million in pre-tax merger-related expenses. Excluding these, adjusted net income was $5.242 million, or $1.05 per diluted share, compared to $1.04 in Q2 2025.
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Net Interest Margin Expands to 3.16%
Net interest income on a tax-equivalent basis rose to $18.4 million, with the margin increasing 47 basis points year-over-year, driven by higher loan yields and the addition of Victory's loan portfolio.
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Balance Sheet Nearly Doubles Post-Merger
Total assets reached $2.4 billion, up from $1.9 billion at year-end 2025. Loans receivable grew to $1.72 billion, including $408 million acquired from Victory. Deposits increased to $2.07 billion.
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Credit Quality Remains Solid
Non-performing loans were $10.4 million, or 0.61% of total loans, up slightly from 0.70% at year-end but still at a low level. Net recoveries were $14,000 for the first half of 2026.
Analysis · QNBC · Finance
The Victory Bancorp acquisition, which closed on April 1, 2026, heavily colors QNB Corp.'s Q2 2026 results. Reported GAAP net income fell to $3.0 million ($0.60/share) from $3.9 million a year ago, entirely because of $3.1 million in merger-related expenses. Strip out those one-time costs, and adjusted earnings per share came in at $1.05, slightly above the prior year's $1.04—a clear sign that the underlying franchise is performing well. The balance sheet has nearly doubled in size, with loans up 36% and deposits up 26% year-over-year, reflecting the acquired operations. Credit quality remains solid, with non-performing loans at 0.61% of total loans. The net interest margin expanded significantly to 3.16% from 2.69%, driven by higher loan yields. Capital ratios remain strong, with the bank well-capitalized. The market will likely focus on the core earnings power and the successful integration of Victory, which is now complete.
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At the time of this filing, QNBC was trading at $43.93 on OTC in the Finance sector, with a market capitalization of approximately $218.2M. The 52-week trading range was $32.16 to $46.00. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.