The core banking franchise is performing well post-acquisition with strong NIM expansion and loan growth, but GAAP earnings are heavily distorted by merger costs and share dilution. Monitor the next 1-2 quarters for merger cost burn-off and tangible EPS recovery; the elevated substandard loan balance ($49.2M) warrants watching for credit migration.
Price Chart
Executive Summary
QNB Corp. reported Q2 2026 GAAP net income of $3.015M ($0.60 diluted), down from $3.883M ($1.04) in Q2 2025, primarily due to $3.084M in pre-tax merger costs from the Victory Bancorp acquisition that closed April 1, 2026. Excluding merger costs, adjusted net income rose to $5.242M ($1.05 diluted), reflecting strong core operating performance with net interest income up 45% to $18.351M and net interest margin expanding 47bp to 3.16%. The acquisition nearly doubled the balance sheet to $2.4B in assets, but GAAP earnings were depressed by one-time charges and a 34% increase in diluted share count from the stock consideration issued in the deal.
Key Financial Metrics
Key Facts
- GAAP diluted EPS fell to $0.60 from $1.04 YoY due to $3.084M in pre-tax merger costs.
- Adjusted diluted EPS (ex-merger costs) rose to $1.05 from $1.04 YoY, essentially flat.
- Net interest income surged 45% to $18.351M; tax-equivalent NIM expanded 47bp to 3.16%.
- Total assets nearly doubled to $2.399B from $1.885B at June 30, 2025, driven by the Victory Bancorp acquisition.
- Diluted share count increased 34% to ~5.0M from ~3.7M YoY due to stock consideration in the acquisition.
- Non-performing loans rose to $10.418M (0.61% of loans) from $8.793M (0.70%) at Dec 31, 2025.
- Substandard/doubtful loans increased to $49.159M from $39.516M at Dec 31, 2025, including $6.475M in acquired CRE loans.
Financial Impact
GAAP net income declined $868K (22%) YoY; adjusted net income rose $1.359M (35%) YoY. Net interest margin expanded 47bp.
Risk Factors
- Merger integration costs may persist longer than expected, depressing GAAP earnings.
- Substandard and doubtful loans increased significantly to $49.2M, signaling potential credit quality deterioration.
- Dilution from the Victory stock consideration will continue to pressure per-share metrics.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001193125-26-321023 |
| Document: qnbc-20260728.htm | 0001193125-26-321023 |
| Document: 0001193125-26-321023-index-headers.html | 0001193125-26-321023 |
| Document: 0001193125-26-321023-index.html | 0001193125-26-321023 |
| Document: 0001193125-26-321023.txt | 0001193125-26-321023 |
| 8-K Data (Synthetic) | 0001193125-26-321023 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 10d ago | 8-K | $45.70 | awaiting T+20 | — | $46.00 (+0.66%) |
Aug 20, 2026 9w ago | 8-K | $44.07 $45.56 | ▼ −3.38% | ▼ −3.91% | $46.00 (−4.38%) |
Aug 20, 2026 9w ago | 424B5 | $43.87 $45.74 | ▼ −4.26% | ▼ −4.26% | $46.00 (−4.86%) |
Aug 7, 2026 11w ago | 8-K | $43.94 $45.30 | ▲ +3.10% | ▲ +3.49% | $46.00 (+4.69%) |
Jul 28, 2026 12w ago | 8-K | $43.25 $44.96 | ▲ +3.95% | ▼ −1.07% | $46.00 (+6.36%) |
Jun 2, 2026 20w ago | 8-K | $43.94 $43.90 | ▼ −0.09% | ▲ +1.47% | $46.00 (+4.69%) |
May 13, 2026 23w ago | 8-K | $44.00 $43.56 | ▼ −1.00% | ▼ −0.39% | $46.00 (+4.55%) |
Apr 28, 2026 25w ago | 8-K | $44.23 $43.94 | ▼ −0.66% | ▼ −6.12% | $46.00 (+4.00%) |
Apr 7, 2026 28w ago | 8-K | $42.00 $44.15 | ▲ +5.12% | ▼ −4.66% | $46.00 (+9.52%) |
Feb 25, 2026 34w ago | 8-K | $36.95 $39.41 | ▲ +6.66% | ▲ +11.89% | $46.00 (+24.49%) |
US Market Status
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