Form 8-K - Current report

01/23/20240000750558NONE00007505582024-01-232024-01-23

 

UNITED STATESPRIVATE

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported):

January 23, 2024

QNB Corp.

(Exact name of registrant as specified in its charter)

 

Pennsylvania	0-17706	23-2318082
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

15 North Third Street, P.O. Box 9005, Quakertown, PA 18951-9005

(Address of principal executive offices, including zip code)

 

[phone]

(Registrant's telephone number, including area code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		QNBC		N/A

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐		Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

---

 

 

Item 2.02	Results of Operations and Financial Condition

 

On January 23, 2024, QNB Corp. announced its consolidated financial results for the fourth quarter ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information included in this Item, as well as Exhibit 99.1, referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 unless specifically incorporated in such filing.

 

Item 9.01	Financial Statements and Exhibits

 

The following exhibits are filed herewith:

 

Exhibit No.	Description
D
99.1	News release disseminated on January 23, 2024 by QNB Corp.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

---

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		QNB Corp.
	By:	/s/ Jeffrey Lehocky
		Jeffrey Lehocky
		Chief Financial Officer
	Dated: January 23, 2024

 

 

 

---

Ex 99.1

	PO Box 9005
	Quakertown, PA 18951-9005
	215.538.5600
	800.491.9070
	QNBBank.com

 

 

FOR IMMEDIATE RELEASE

 

 

 

QNB CORP. REPORTS

EARNINGS FOR FOURTH QUARTER 2023

 

 

QUAKERTOWN, PA (January 23, 2024) 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 2023 of $1,134,000, or $0.31 per share on a diluted basis. This compares to net income of $5,447,000, or $1.52 per share on a diluted basis, for the same period in 2022. For the twelve months ended December 31, 2023, QNB reported net income of $9,483,000, or $2.63 per share on a diluted basis. This compares to net income of $15,921,000, or $4.47 per share on a diluted basis, reported for the same period in 2022.

 

For the quarter ended December 31, 2023, the annualized rate of return on average assets and average shareholders’ equity was 0.26% and 2.83%, respectively, compared with 1.24% and 14.38%, respectively, for the fourth quarter 2022.

 

The operating performance of the Bank, a wholly-owned subsidiary of QNB Corp., declined for the quarter ended December 31, 2023, in comparison with the same period in 2022 due to interest margin compression causing a $1,150,000 decline in net interest income, additional provision for credit losses on loans and commitments of $1,143,000 and an increase in non-interest expense of $612,000. In the fourth quarter, we continued to improve the efficiency of our investment portfolio by executing a sale of $26 million in book value of low yielding fixed rate available-for-sale securities, booking a pre-tax loss of $1,801,000 in the fourth quarter of 2023 at the Bank; this compared to losses of $143,000 in 2022. The change in contribution from QNB Corp. for the quarter ended December 31, 2023, compared with the same period in 2022, is primarily due to the change in fair value of the equities portfolio held at the holding company.

The following table presents disaggregated net income:

	Three months ended,												Twelve months ended,
	12/31/2023				12/31/2022				Variance				12/31/2023				12/31/2022				Variance
QNB Bank	$	827,000			$	4,408,000			$	(3,581,000	)		$	9,395,000			$	16,445,000			$	(7,050,000	)
QNB Corp		307,000				1,039,000				(732,000	)			88,000				(524,000	)			612,000
Consolidated net income	$	1,134,000			$	5,447,000			$	(4,313,000	)		$	9,483,000			$	15,921,000			$	(6,438,000	)

 

---

 

Total assets as of December 31, 2023 were $1,706,318,000 compared with $1,668,497,000 at December 31, 2022. Total available-for-sale debt securities decreased $15,209,000, or 3.0%, to $490,181,000, primarily due to sales. Loans receivable increased $33,083,000 to approximately $1,093,533,000, or 3.1%. Total deposits increased $5,380,000 to $1,488,713,000. Short-term borrowing declined $2,609,000, or 2.7%.

"2023 was a year filled with rising interest rates, compressing our margin and creating a decline in our net interest income. We were aggressive in our proactive moves to respond and structure our company for future profitability,” stated David W. Freeman, President and Chief Executive Officer. Freeman continued, “This quarter, our significant move was restructuring our investment portfolio, selling off underperforming securities, resulting in a pre-tax loss of $1.8 million impacting the fourth quarter earnings. We reinvested the security sale proceeds in cash, which will provide significantly higher yields, resulting in improved liquidity for our balance sheet and profitability. Coupling this with the interest-rate hedge contracts we entered earlier in 2023, we are better positioned going into 2024. Finally, I am pleased with the growth in our deposit balances and with the credit quality of our loan book, all indicators of our diligent focus on our core business.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter and twelve months ended December 31, 2023 totaled $10,192,000 and $40,155,000 respectively, a decrease of $1,087,000 and $4,342,000, respectively, from the same periods in 2022. Net interest margin was 2.36% for the fourth quarter of 2023 and 2.72% for the same period in 2022. Net interest margin was 2.39% for the twelve months ended December 31, 2023, compared with 2.71% for the same period in 2022.

 

The yield on earning assets was 4.44% for the fourth quarter 2023, compared with 3.49% in the fourth quarter of 2022. For the twelve-month period ended December 31, 2023, yield on earning assets was 4.09%, compared with 3.18% for the same period in 2022. The cost of interest-bearing liabilities was 2.55% for the quarter and 2.11% for the twelve months ended December 31, 2023, compared with 1.03% and 0.60% for the same periods in 2022, respectively.

 

Proceeds from average short-term borrowings and proceeds from sales and payments received on investment securities over the past year were invested in loans and higher-yielding investments. Loan growth was primarily in commercial real estate, which comprised 42% of average earning assets in the twelve months of 2023 compared with 38% for the same period in 2022, and the increases in rates on both the commercial real estate loans and the commercial and industrial loans majorly contributed to the 95 basis-point increase in the yield on loans. The decline in the available-for-sale portfolio was primarily in mortgage-backed securities, which comprised 23% of average earnings assets in the twelve months of 2023 compared with 27% for the same period in 2022. The 144 basis-point increase in the rate paid on deposits and the 201 basis-point increase in the rate on short-term borrowing were the primary contributors to the increase in the cost of funds of 151 basis points, contributing to the decrease in net interest margin.

 

---

 

Asset Quality, Provision for Credit Losses on Loans and Allowance for Credit Losses

QNB adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (CECL) effective January 1, 2023. QNB recorded a decrease to its allowance for loan losses of $1,089,000 and an increase to its reserve for unused commitments of $5,000. The impact of this CECL adjustment, net of deferred taxes, of $857,000 was added to shareholders' equity.

QNB recorded $291,000 in provision for credit losses on loans in the fourth quarter of 2023 compared to a reversal in provision of $850,000 in the fourth quarter of 2022; and reversed $828,000 in provision for credit losses on loans for the twelve months ended December 31, 2023 compared to a reversal in provision of $850,000 for the twelve months ended December 31, 2022. QNB's allowance for credit losses on loans of $8,852,000 represents 0.81% of loans receivable at December 31, 2023, compared to $9,442,000, or 0.91% of loans receivable upon the adoption of CECL on January 1, 2023. Net loan recoveries were $19,000 for the quarter and net recoveries of $238,000 for the twelve months ended December 31, 2023, compared with recoveries of $43,000 and $197,000 for the same periods in 2022, primarily due to commercial customers. Annualized net loan recoveries for the quarter ended December 31, 2023 was 0.01% and annualized net loan recoveries of 0.02% for the quarter ended December 31, 2022, of average loans receivable, respectively. Annualized net loan recoveries for the twelve months ended December 31, 2023 and December 31, 2022 were 0.02% and 0.02% of average loans receivable, respectively.

 

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 $5,668,000, or 0.52% of loans receivable at December 31, 2023, compared with $9,121,000, or 0.88% of loans receivable at December 31, 2022. In cases where there is a collateral shortfall on non-accrual 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, 2023, $1,306,000, or approximately 67% of the loans classified as non-accrual, are current or past due less than 30 days. Commercial loans classified as substandard or doubtful loans totaled $11,747,000 at December 31, 2023, compared with $13,684,000 at December 31, 2022.

Non-Interest Income

Total non-interest income was $283,000 for the fourth quarter of 2023 compared with $2,997,000 for the same period in 2022. There was a net realized loss of $2,262,000 on the sale of investments for the quarter ended December 31, 2023 compared to a net loss of $227,000 on the sales of securities in the same period in 2022. Unrealized net gain on investment equity securities was $904,000 for the quarter ended December 31, 2023 compared to a net gain of $1,602,000 for the same period in 2022. The equities portfolio comprises blue-chip large-capitalized stocks, providing a taxable equivalent dividend yield of 4.22%.

 

Fees for service to customers increase $10,000 for the quarter ended December 31, 2023, primarily due to overdraft fees. ATM and debit card income decreased $17,000 to $687,000 for the quarter ended December 31, 2023, income is related to card usage. Retail brokerage and advisory income increased $23,000 to $207,000 for the same period. Net gains on sales of loans increased $11,000 for the same period due to volume. Bank-owned life insurance decreased $9,000 for the same period.

---

 

 

For the twelve months ended December 31, 2023, non-interest income was $4,837,000 a decrease of $894,000 compared to the same period in 2022, primarily due to realized losses on sale of securities was $2,077,000, a decline of $2,343,000 for the twelve months ended December 31, 2023, compared with the same period in 2022. Unrealized gains related to the change in fair value of the equities portfolio was $250,000 for the twelve months ended December 31, 2023, an increase of $1,276,000 over the same period in 2022. Increases in non-interest income for the twelve months ended December 31, 2023 compared to the same period in 2022 comprise: fees for services to customers, ATM and debit card fees, and retail brokerage and advisory income, which increased $37,000, $16,000, and $74,000, respectively. Other non-interest income increased $36,000 due primarily to a sales tax refund of $115,000, partly offset by Bank-owned life insurance of $41,000 and a decrease in title insurance income of $32,000.

Non-Interest Expense

Total non-interest expense was $8,746,000 for the fourth quarter of 2023 compared with $8,119,000 for the same period in 2022. Salaries and benefits expense increased $253,000, or 5.7%, to $4,717,000 when comparing the two quarters. Salary expense and related payroll taxes increased $42,000, to $3,912,000 during the fourth quarter of 2023 compared to the same period in 2022. Benefits expense increased $211,000, when comparing the two periods.

 

Net occupancy and furniture and equipment expense increased $218,000, to $1,477,000 for the fourth quarter of 2023 due to software maintenance costs. Other non-interest expense increased $156,000 when comparing fourth quarter of 2023 with the same period in 2022 due to an increase in FDIC insurance of $119,000, an increase in marketing expense of $48,000 and write-offs due to fraud on customer accounts of $252,000, partly offset by decreases in Bank shares tax of $149,000, in telephone, postage and supplies of $56,000, and in third-party services of $50,000.

 

For the twelve months ended December 31, 2023, non-interest expense was $34,109,000, an increase of $2,617,000, or 8.3%, compared to the same period in 2022.

 

Provision for income taxes decreased $1,258,000 to $302,000 in the fourth quarter of 2023 due to decreased pre-tax income, compared with the same period in 2022. The effective tax rates for the quarter and twelve months ended December 31, 2023 were 21.0% and 19.1%, respectively, compared with 22.3% and 18.7%, respectively, for the same periods in 2022.

 

 

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 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, 2022. 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.

 

Contacts:	David W. Freeman	Jeffrey Lehocky
	President & Chief Executive Officer	Chief Financial Officer
	215-538-5600 x-5619	215-538-5600 x-5716
	[e-mail]	[e-mail]

 

---

 

QNB Corp.
Consolidated Selected Financial Data (unaudited)
(Dollars in thousands)
Balance Sheet (Period End)	12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Assets	$	1,706,318		$	1,684,392		$	1,650,586		$	1,626,499		$	1,668,497
Cash and cash equivalents		62,657			55,141			34,824			14,201			15,899
Investment securities
Debt securities, AFS		490,181			505,390			527,741			537,904			546,525
Equity securities		5,910			4,765			5,424			11,908			12,056
Loans held-for-sale		549			446			810			388			-
Loans receivable		1,093,533			1,060,450			1,029,744			1,011,956			1,039,385
Allowance for loan losses		(8,852	)		(8,542	)		(8,365	)		(8,191	)		(10,531	)
Net loans		1,084,681			1,051,908			1,021,379			1,003,765			1,028,854
Deposits		1,488,713			1,483,333			1,449,765			1,424,590			1,418,369
Demand, non-interest bearing		185,098			192,226			212,396			212,259			231,849
Interest-bearing demand, money market and savings		988,634			1,000,921			962,042			962,315			1,011,071
Time		314,981			290,186			275,327			250,016			175,449
Short-term borrowings		94,094			96,703			90,845			110,192			161,327
Long-term debt		20,000			20,000			20,000			-			10,000
Shareholders' equity		90,824			74,081			80,945			83,874			70,958
Asset Quality Data (Period End)
Non-accrual loans	$	1,940		$	1,893		$	4,794		$	4,561		$	4,820
Loans past due 90 days or more and still accruing		-			-			-			-			-
Restructured loans		3,728			3,979			4,033			4,244			4,301
Non-performing loans		5,668			5,872			8,827			8,805			9,121
Other real estate owned and repossessed assets		-			-			-			-			-
Non-performing assets	$	5,668		$	5,872		$	8,827		$	8,805		$	9,121
Allowance for loan losses	$	8,852		$	8,542		$	8,365		$	8,191		$	10,531
Non-performing loans / Loans excluding held-for-sale		0.52	%		0.55	%		0.86	%		0.87	%		0.88	%
Non-performing assets / Assets		0.33	%		0.35	%		0.53	%		0.54	%		0.55	%
Allowance for loan losses / Loans excluding held-for-sale		0.81	%		0.81	%		0.81	%		0.81	%		1.01	%

 

 

---

 

QNB Corp.
Consolidated Selected Financial Data (unaudited)
(Dollars in thousands, except per share data)	Three months ended,						Twelve months ended,
For the period:	12/31/23	9/30/23	6/30/23	3/31/23	12/31/22		12/31/23	12/31/22
Interest income	$19,257	$18,497	$15,865	$15,463	$14,739		$69,082	$52,421
Interest expense	9,065	8,284	6,532	5,046	3,460		28,927	7,924
Net interest income	10,192	10,213	9,333	10,417	11,279		40,155	44,497
Provision for credit losses	293	459	209	(1,805)	(850)		(844)	(850)
Net interest income after provision for credit losses	9,899	9,754	9,124	12,222	12,129		40,999	45,347
Non-interest income:
Fees for services to customers	414	421	414	402	404		1,651	1,614
ATM and debit card	687	685	704	659	704		2,735	2,719
Retail brokerage and advisory income	207	219	202	234	184		862	788
Net realized (loss) gain on investment securities	(2,262)	131	519	(465)	(227)		(2,077)	266
Unrealized gain (loss) on equity securities	904	(138)	(573)	57	1,602		250	(1,026)
Net gain on sale of loans	11	4	(5)	6	-		16	6
Other	322	433	319	326	330		1,400	1,364
Total non-interest income	283	1,755	1,580	1,219	2,997		4,837	5,731
Non-interest expense:
Salaries and employee benefits	4,717	4,971	4,775	4,563	4,464		19,026	17,306
Net occupancy and furniture and equipment	1,477	1,504	1,467	1,377	1,259		5,825	5,112
Other	2,552	2,196	2,250	2,260	2,396		9,258	9,074
Total non-interest expense	8,746	8,671	8,492	8,200	8,119		34,109	31,492
Income before income taxes	1,436	2,838	2,212	5,241	7,007		11,727	19,586
Provision for income taxes	302	494	325	1,123	1,560		2,244	3,665
Net income	$1,134	$2,344	$1,887	$4,118	$5,447		$9,483	$15,921
Share and Per Share Data:
Net income - basic	$0.31	$0.65	$0.52	$1.15	$1.52		$2.63	$4.47
Net income - diluted	$0.31	$0.65	$0.52	$1.15	$1.52		$2.63	$4.47
Book value	$24.86	$20.35	$22.42	$23.32	$19.78		$24.86	$19.78
Cash dividends	$0.37	$0.37	$0.37	$0.37	$0.36		$1.48	$1.44
Average common shares outstanding -basic	3,642,096	3,613,230	3,598,545	3,588,363	3,577,587		3,610,713	3,564,481
Average common shares outstanding -diluted	3,642,096	3,613,230	3,598,545	3,588,363	3,577,587		3,610,713	3,564,481
Selected Ratios:
Return on average assets	0.25%	0.52%	0.44%	0.97%	1.24%		0.54%	0.93%
Return on average shareholders' equity	2.83%	5.88%	4.82%	10.81%	14.38%		6.04%	10.90%
Net interest margin (tax equivalent)	2.36%	2.38%	2.27%	2.55%	2.68%		2.39%	2.71%
Efficiency ratio (tax equivalent)	82.39%	71.58%	76.78%	69.57%	56.20%		74.84%	61.82%
Average shareholders' equity to total average assets	8.93%	8.91%	9.12%	8.99%	8.65%		8.99%	8.54%
Net loan charge-offs (recoveries)	$(19)	$275	$38	$(532)	$(43)		$(238)	$(197)
Net loan charge-offs (recoveries) - annualized / Average loans excluding held-for-sale	-0.01%	0.10%	0.01%	-0.21%	-0.02%		-0.02%	-0.02%
Balance Sheet (Average)
Assets	$1,779,627	$1,773,138	$1,719,368	$1,719,167	$1,737,679		$1,748,029	$1,710,449
Investment securities (AFS & Equities)	604,292	624,423	636,110	649,231	673,117		628,380	696,158
Loans receivable	1,072,616	1,039,351	1,026,881	1,021,265	1,020,102		1,040,121	967,438
Deposits	1,490,244	1,488,632	1,427,238	1,414,764	1,462,654		1,455,517	1,460,416
Shareholders' equity	158,987	158,063	156,890	154,503	150,281		157,126	146,088

 

---

 

QNB Corp. (Consolidated)
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)
	Three Months Ended
	December 31, 2023				December 31, 2022
	Average	Average			Average	Average
	Balance	Rate	Interest		Balance	Rate	Interest
Assets
Investment securities:
U.S. Treasury	$7,255	5.19%	$95		$298	1.50%	$1
U.S. Government agencies	95,852	1.13	270		101,941	1.11	283
State and municipal	108,771	3.64	991		124,514	2.35	731
Mortgage-backed and CMOs	380,666	2.72	2,584		428,186	1.62	1,737
Corporate debt securities and mutual funds	6,708	4.40	74		6,647	4.38	73
Equities	5,040	4.98	63		11,531	3.50	102
Total investment securities	604,292	2.70	4,077		673,117	1.74	2,927
Loans:
Commercial real estate	751,629	5.18	9,809		678,061	4.43	7,578
Residential real estate	109,048	3.89	1,062		106,045	3.47	920
Home equity loans	60,599	6.76	1,032		58,860	5.63	835
Commercial and industrial	128,440	7.31	2,367		152,183	6.14	2,357
Consumer loans	3,732	7.71	72		4,298	6.65	72
Tax-exempt loans	19,556	3.66	180		20,655	3.44	179
Total loans, net of unearned income*	1,073,004	5.37	14,522		1,020,102	4.64	11,941
Other earning assets	57,432	5.52	800		4,360	3.93	43
Total earning assets	1,734,728	4.44	19,399		1,697,579	3.49	14,911
Cash and due from banks	13,539				12,854
Allowance for loan losses	(8,668)				(11,351)
Other assets	40,028				38,597
Total assets	$1,779,627				$1,737,679
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing demand	$321,858	0.83%	673		$351,283	0.46%	412
Municipals	141,524	4.78	1,704		127,252	2.91	933
Money market	223,646	3.39	1,910		132,282	0.65	216
Savings	305,502	1.27	979		433,930	0.79	863
Time < $100	144,386	3.39	1,234		91,196	0.88	201
Time $100 through $250	116,054	4.05	1,183		60,200	1.38	209
Time > $250	42,485	3.78	404		25,103	1.05	66
Total interest-bearing deposits	1,295,455	2.48	8,087		1,221,246	0.94	2,900
Short-term borrowings	97,402	3.08	755		106,295	1.94	520
Long-term debt	20,000	4.36	223		10,000	1.57	40
Total interest-bearing liabilities	1,412,857	2.55	9,065		1,337,541	1.03	3,460
Non-interest-bearing deposits	194,789				241,408
Other liabilities	12,994				8,449
Shareholders' equity	158,987				150,281
Total liabilities and
shareholders' equity	$1,779,627				$1,737,679
Net interest rate spread		1.89%				2.46%
Margin/net interest income		2.36%	$10,334			2.68%	$11,451
Tax-exempt securities and loans were adjusted to a tax-equivalent basis and are based on the Federal corporate tax rate of 21%
Non-accrual loans and investment securities are included in earning assets.
* Includes loans held-for-sale

 

---

 

QNB Corp. (Consolidated)
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis)
	Twelve Months Ended
	December 31, 2023										December 31, 2022
	Average			Average							Average			Average
	Balance			Rate			Interest				Balance			Rate			Interest
Assets
Investment securities:
U.S. Treasury	$	4,535			5.06	%	$	229			$	524			1.18	%	$	6
U.S. Government agencies		100,409			1.11			1,119				101,455			1.10			1,119
State and municipal		109,598			2.89			3,164				128,126			2.39			3,056
Mortgage-backed and CMOs		399,599			2.14			8,555				447,369			1.58			7,059
Corporate debt securities and mutual funds		6,655			4.40			293				6,673			4.37			291
Equities		7,584			4.22			320				12,011			3.32			399
Total investment securities		628,380			2.18			13,680				696,158			1.71			11,930
Loans:
Commercial real estate		713,294			4.89			34,900				637,023			4.20			26,759
Residential real estate		107,379			3.73			4,005				104,397			3.34			3,484
Home equity loans		58,144			6.52			3,794				56,155			4.38			2,459
Commercial and industrial		137,966			7.50			10,344				145,579			5.10			7,432
Consumer loans		3,889			7.29			283				4,512			5.63			254
Tax-exempt loans		19,876			3.56			707				19,778			3.42			676
Total loans, net of unearned income*		1,040,548			5.19			54,033				967,444			4.24			41,064
Other earning assets		34,816			5.61			1,953				5,782			2.42			140
Total earning assets		1,703,744			4.09			69,666				1,669,384			3.18			53,134
Cash and due from banks		13,918										13,803
Allowance for loan losses		(8,820	)									(11,287	)
Other assets		39,187										38,549
Total assets	$	1,748,029									$	1,710,449
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing demand	$	315,990			0.60	%		1,900			$	345,054			0.27	%		933
Municipals		131,610			4.46			5,867				122,824			1.43			1,758
Money market		183,004			2.64			4,823				137,830			0.45			617
Savings		348,878			1.20			4,187				443,104			0.49			2,175
Time < $100		121,622			2.63			3,194				91,216			0.79			723
Time $100 through $250		107,560			3.59			3,859				52,314			0.93			489
Time > $250		38,076			3.08			1,171				25,296			0.83			209
Total interest-bearing deposits		1,246,740			2.01			25,001				1,217,638			0.57			6,904
Short-term borrowings		108,862			3.01			3,273				85,876			1.00			861
Long-term debt		15,712			4.10			653				10,000			1.57			159
Total interest-bearing liabilities		1,371,314			2.11			28,927				1,313,514			0.60			7,924
Non-interest-bearing deposits		208,777										242,778
Other liabilities		10,812										8,069
Shareholders' equity		157,126										146,088
Total liabilities and
shareholders' equity	$	1,748,029									$	1,710,449
Net interest rate spread					1.98	%									2.58	%
Margin/net interest income					2.39	%	$	40,739							2.71	%	$	45,210
Tax-exempt securities and loans were adjusted to a tax-equivalent basis and are based on the Federal corporate tax rate of 21%
Non-accrual loans and investment securities are included in earning assets.
* Includes loans held-for-sale

 

---

Document and Entity Information	Jan. 23, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 23, 2024
Entity Registrant Name	QNB Corp.
Entity Central Index Key	0000750558
Entity Emerging Growth Company	false
Entity File Number	0-17706
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Tax Identification Number	23-2318082
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	15 North Third Street
Entity Address, Address Line Two	P.O. Box 9005
Entity Address, City or Town	Quakertown
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18951-9005
City Area Code	215
Local Phone Number	538-5600
Title of 12(b) Security	Common Stock
Trading Symbol	QNBC
Security Exchange Name	NONE

---