Attached files
| file | filename |
|---|---|
| 8-K - QNB CORP | v200177_8k.htm |
 |
PO
Box 9005
Quakertown
PA 18951-9005
215.538.5600
1.800.491.9070
www.QNB.com
|
FOR IMMEDIATE
RELEASE
QNB
CORP. EARNS $1.6 MILLION IN THIRD QUARTER
AND
RECORD $5.4 MILLION YEAR-TO-DATE
QUAKERTOWN, PA (October 27,
2010) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the holding
company for QNB Bank (the “Bank”), reported net income for the third quarter of
2010 of $1,618,000, or $0.52 per share on a diluted basis. This compares to
$671,000, or $0.22 per share on a diluted basis, for the same period in 2009.
For the nine-month period ended September 30, 2010, QNB reported record net
income of $5,407,000, or $1.74 per share on a diluted basis. This compares to
net income of $2,992,000, or $0.96 per share on a diluted basis, for the
nine-month period ended September 30, 2009. Net income expressed as an
annualized rate of return on average shareholders’ equity was 12.69% for the
nine-month period ended September 30, 2010 compared with 7.32% for the same
period in 2009.
“We are
pleased with the company’s third quarter financial performance which reflects
the continuing solid core operating performance of the Bank. Strong loan and
deposit growth coupled with a widening net interest margin, contributed to our
success. QNB remains a well capitalized institution by all regulatory
standards,” stated Thomas J. Bisko, Chief Executive Officer. “We are
also pleased to announce that David W. Freeman was appointed President and Chief
Operating Officer of the Bank and President of QNB during the quarter. Mr.
Freeman has a background in community banking and shares the principles which
have governed our financial institution since its inception.”
Third
quarter 2010's earnings compared with the third quarter of 2009 reflect higher
net interest income, resulting from a widening of the net interest margin and
strong growth in loans and deposits, a reduction in the provision for loan
losses and lower other-than temporary impairment (OTTI) charges on investment
securities.
The
positive trend of increasing net interest income and net interest margin
reported earlier in 2010 continued in the third quarter. Net interest income
increased $1,114,000, or 20.2%, to $6,641,000 for the third quarter of 2010
compared to the third quarter of 2009. Net interest income for the third quarter
of 2010 also reflects an improvement of $206,000, or 3.2%, compared to the
second quarter of 2010. The net interest margin increased to 3.75% for the third
quarter of 2010 compared to 3.38% for the third quarter of 2009 and 3.74% for
the second quarter of 2010.
The
improvement in net interest income and the net interest margin compared with the
third quarter of 2009 primarily resulted from the impact of lower deposit costs
partially offset by lower yields on investment securities. The interest rate
paid on interest-bearing deposits declined by 74 basis points to 1.39% for the
third quarter of 2010 compared to the third quarter of 2009. The decline in the
rate paid on deposits largely resulted from the repricing of time deposits at
lower market rates. The average rate paid on time deposits declined 108 basis
points from 3.07% for the third quarter of 2009 to 1.99% for the third quarter
of 2010. In comparison, the average rate earned on investment securities
declined from 4.52% for the third quarter of 2009 to 3.94% for the third quarter
of 2010, a decline of 58 basis points. Negatively impacting net interest income
and the net interest margin in the third quarter of 2009 was the reversal of
$100,000 of interest income on pooled trust preferred securities placed on
non-accrual status partially offset by the recognition of a $29,000 prepayment
penalty on a commercial loan. Excluding these two items the net interest margin
would have been 3.42% in the third quarter of 2009.
Page 2 of
5
Average
earning assets grew by $55,248,000, or 7.9%, with average loans increasing 8.7%
and average investment securities increasing 3.9% when comparing the third
quarter of 2010 to the same period in 2009. The growth in loans was mainly
related to real estate secured commercial loans and to a lesser degree
commercial and industrial loans and tax-exempt loans. On the funding side,
average deposits increased $61,096,000, or 10.0%, with average transaction
accounts increasing 26.5%, or $74,413,000. The growth in transaction accounts is
largely due to the success of QNB’s newest high-rate deposit product, Online
eSavings. The Online eSavings account was introduced in the second quarter of
2009 and continues to experience significant growth. This product had balances
totaling $52,661,000 as of September 30, 2010 compared to $42,253,000 at June
30, 2010 and $5,540,000 at September 30, 2009.
Net
interest income increased $3,172,000, or 19.9%, to $19,100,000 comparing the
first nine months of 2010 and 2009. Over the 2010 time period, average loans and
investment securities increased 9.5% and 7.4%, respectively, and average total
deposits increased 12.5%. The net interest margin for the first nine months of
2010 was 3.71% compared to 3.42% for the first nine months of 2009, with lower
deposit costs being the primary factor in the improvement.
As a
result of loan growth, increases in non-performing, delinquent and classified
loans and continued concerns related to current economic conditions, QNB
continues to closely monitor the quality of its loan portfolio and has increased
the allowance for loan losses to reflect these conditions. QNB recorded a
provision for loan losses of $1,200,000 in the third quarter of 2010 and
$2,600,000 for the first nine months of 2010. This compares to a provision of
$1,500,000 for the third quarter of 2009 and $2,600,000 for the first nine
months of 2009. The 2010 third quarter provision also represents an increase of
$500,000 from the amount recorded in the second quarter of 2010. Net loan
charge-offs were $77,000 for the quarter ended September 30, 2010 and $685,000
for the first nine months of 2010 compared with $511,000 for the third quarter
of 2009 and $863,000 for the first nine months of 2009. QNB’s allowance for loan
losses of $8,132,000 represents 1.70% of total loans at September 30, 2010
compared to an allowance for loan losses of $5,573,000, or 1.27% of total loans
at September 30, 2009.
Total
non-performing loans, which represent loans on non-accrual status, loans past
due more than 90 days and still accruing interest, and restructured loans were
$9,908,000, or 2.07% of total loans, at September 30, 2010, compared to
$5,199,000, or 1.19% of total loans, at September 30, 2009. Total delinquent
loans, which include loans that are thirty days or more past due and non-accrual
loans, increased to 2.93% of total loans at September 30, 2010, compared with
1.93% of total loans at September 30, 2009.
Total
non-interest income was $1,004,000 for the third quarter of 2010, an increase of
$490,000 compared with the same period in 2009. Lower credit related OTTI
charges on the Bank’s holdings of pooled trust preferred securities contributed
to the improvement in non-interest interest income. During the third quarter of
2010 credit related OTTI charges were $51,000 compared to credit related OTTI
charges of $753,000 for the corresponding quarter of 2009. These OTTI charges
were partially offset by gains on the sale of securities of $4,000 and $103,000
for the third quarters of 2010 and 2009, respectively.
Fees for
services to customers decreased $78,000 when comparing the third quarter of 2010
to the same 2009 quarter. The decrease was primarily caused by lower overdraft
charges as a result of the implementation of new rules under Regulation E and a
reduction in the per item fee charged to customers. ATM and debit card income
increased $54,000 while gains on the sale of residential mortgages decreased
$51,000 comparing these same periods.
Page 3 of 5
Total
non-interest expense was $4,478,000 for the third quarter of 2010, an increase
of $552,000 compared with the third quarter of 2009. Salary and benefit expense
increased $294,000 and was the largest contributing factor to the increase in
non-interest expense. This increase is primarily attributable to $130,000 of
severance related expenses for two former officers of the Bank and an incentive
compensation accrual of $109,000. Net occupancy expenses increased $62,000, or
19.1%, when comparing the third quarter of 2010 to 2009. The majority of the
increase relates to lease expense for the land where the permanent Wescosville
branch was built. This branch opened in October 2010. Marketing expense
increased $30,000 primarily related to several large community event
sponsorships. Increases in accounting and auditing, consulting and third-party
information technology services were the primary contributors to the $45,000
increase related to third-party services. FDIC insurance premium expense
increased $33,000, to $268,000, comparing the third quarter of 2010 to 2009.
Significant growth in deposits combined with a slightly higher assessment rate
were the underlying factors in the increase in the premiums.
QNB Corp.
offers commercial and retail banking services through the nine banking offices
of its subsidiary, QNB Bank. In addition, QNB provides retail brokerage services
through Raymond James Financial Services, Inc. and title insurance as a member
of Laurel Abstract Company LLC.
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, 2009. 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.
Page 4
of 5
QNB
Corp.
Consolidated
Selected Financial Data (unaudited)
(Dollars
in thousands)
|
Balance Sheet (Period End)
|
9/30/10
|
6/30/10
|
3/31/10
|
12/31/09
|
9/30/09
|
|||||||||||||||
|
Assets
|
$ | 791,236 | $ | 776,115 | $ | 770,881 | $ | 762,426 | $ | 728,225 | ||||||||||
|
Investment
securities (AFS & HTM)
|
282,098 | 264,719 | 266,104 | 260,209 | 253,779 | |||||||||||||||
|
Loans
receivable
|
477,940 | 474,678 | 456,217 | 449,421 | 437,460 | |||||||||||||||
|
Allowance
for loan losses
|
(8,132 | ) | (7,009 | ) | (6,357 | ) | (6,217 | ) | (5,573 | ) | ||||||||||
|
Net
loans
|
469,808 | 467,669 | 449,860 | 443,204 | 431,887 | |||||||||||||||
|
Deposits
|
674,247 | 657,970 | 662,371 | 634,103 | 604,159 | |||||||||||||||
|
Demand,
non-interest bearing
|
53,100 | 59,235 | 55,537 | 53,930 | 50,113 | |||||||||||||||
|
Interest-bearing
demand, money market and savings
|
309,688 | 281,448 | 282,205 | 259,077 | 227,797 | |||||||||||||||
|
Time
|
311,459 | 317,287 | 324,629 | 321,096 | 326,249 | |||||||||||||||
|
Short-term
borrowings
|
31,173 | 34,059 | 21,831 | 28,433 | 26,819 | |||||||||||||||
|
Long-term
debt
|
20,311 | 20,000 | 25,000 | 35,000 | 35,000 | |||||||||||||||
|
Shareholders'
equity
|
62,682 | 61,128 | 58,224 | 56,426 | 57,434 | |||||||||||||||
|
Asset Quality Data (Period
End)
|
||||||||||||||||||||
|
Non-accrual
loans
|
$ | 8,094 | $ | 7,180 | $ | 3,664 | $ | 3,086 | $ | 2,592 | ||||||||||
|
Loans
past due 90 days or more and still accruing
|
199 | 62 | 14 | 759 | 683 | |||||||||||||||
|
Restructured
loans
|
1,615 | 506 | 2,217 | 2,257 | 1,924 | |||||||||||||||
|
Non-performing
loans
|
9,908 | 7,748 | 5,895 | 6,102 | 5,199 | |||||||||||||||
|
Other
real estate owned and repossessed assets
|
12 | 40 | 51 | 67 | 127 | |||||||||||||||
|
Non-accrual
pooled trust preferred securities
|
1,497 | 1,539 | 986 | 863 | 959 | |||||||||||||||
|
Non-performing
assets
|
$ | 11,417 | $ | 9,327 | $ | 6,932 | $ | 7,032 | $ | 6,285 | ||||||||||
|
Allowance
for loan losses
|
$ | 8,132 | $ | 7,009 | $ | 6,357 | $ | 6,217 | $ | 5,573 | ||||||||||
|
Non-performing
loans / Loans
|
2.07 | % | 1.63 | % | 1.29 | % | 1.36 | % | 1.19 | % | ||||||||||
|
Non-performing
assets / Assets
|
1.44 | % | 1.20 | % | 0.90 | % | 0.92 | % | 0.86 | % | ||||||||||
|
Allowance
for loan losses / Loans
|
1.70 | % | 1.48 | % | 1.39 | % | 1.38 | % | 1.27 | % | ||||||||||
Page 5 of
5
QNB
Corp.
Consolidated
Selected Financial Data (unaudited)
|
(Dollars
in thousands, except per share data)
|
For
the three months ended,
|
For
the nine months ended,
|
||||||||||||||||||||||||||
|
For
the period:
|
9/30/10
|
6/30/10
|
3/31/10
|
12/31/09
|
9/30/09
|
9/30/10
|
9/30/09
|
|||||||||||||||||||||
|
Interest
income
|
$ | 9,117 | $ | 9,049 | $ | 8,828 | $ | 8,937 | $ | 8,946 | $ | 26,994 | $ | 26,431 | ||||||||||||||
|
Interest
expense
|
2,476 | 2,614 | 2,804 | 3,164 | 3,419 | 7,894 | 10,503 | |||||||||||||||||||||
|
Net
interest income
|
6,641 | 6,435 | 6,024 | 5,773 | 5,527 | 19,100 | 15,928 | |||||||||||||||||||||
|
Provision
for loan losses
|
1,200 | 700 | 700 | 1,550 | 1,500 | 2,600 | 2,600 | |||||||||||||||||||||
|
Net
interest income after provision for
loan losses
|
5,441 | 5,735 | 5,324 | 4,223 | 4,027 | 16,500 | 13,328 | |||||||||||||||||||||
|
Non-interest
income:
|
||||||||||||||||||||||||||||
|
Fees
for services to customers
|
392 | 406 | 405 | 455 | 470 | 1,203 | 1,288 | |||||||||||||||||||||
|
ATM
and debit card
|
317 | 314 | 271 | 269 | 263 | 902 | 747 | |||||||||||||||||||||
|
Net
(loss) gain on investment securities available-for-sale
|
(47 | ) | (67 | ) | 136 | 476 | (650 | ) | 22 | (930 | ) | |||||||||||||||||
|
Other
|
342 | 374 | 320 | 371 | 431 | 1,036 | 1,209 | |||||||||||||||||||||
|
Total
non-interest income
|
1,004 | 1,027 | 1,132 | 1,571 | 514 | 3,163 | 2,314 | |||||||||||||||||||||
|
Non-interest
expense:
|
||||||||||||||||||||||||||||
|
Salaries
and employee benefits
|
2,409 | 2,167 | 2,137 | 2,254 | 2,115 | 6,713 | 6,271 | |||||||||||||||||||||
|
Net
occupancy and furniture and fixture
|
681 | 648 | 651 | 656 | 614 | 1,980 | 1,907 | |||||||||||||||||||||
|
FDIC
insurance premiums
|
268 | 257 | 254 | 244 | 235 | 779 | 967 | |||||||||||||||||||||
|
Other
|
1,120 | 1,169 | 1,076 | 1,193 | 962 | 3,365 | 3,094 | |||||||||||||||||||||
|
Total
non-interest expense
|
4,478 | 4,241 | 4,118 | 4,347 | 3,926 | 12,837 | 12,239 | |||||||||||||||||||||
|
Income
before income taxes
|
1,967 | 2,521 | 2,338 | 1,447 | 615 | 6,826 | 3,403 | |||||||||||||||||||||
|
Provision
(benefit) for income taxes
|
349 | 558 | 512 | 212 | (56 | ) | 1,419 | 411 | ||||||||||||||||||||
|
Net
income
|
$ | 1,618 | $ | 1,963 | $ | 1,826 | $ | 1,235 | $ | 671 | $ | 5,407 | $ | 2,992 | ||||||||||||||
|
Share
and Per Share Data:
|
||||||||||||||||||||||||||||
|
Net
income - basic
|
$ | 0.52 | $ | 0.63 | $ | 0.59 | $ | 0.40 | $ | 0.22 | $ | 1.74 | $ | 0.97 | ||||||||||||||
|
Net
income - diluted
|
$ | 0.52 | $ | 0.63 | $ | 0.59 | $ | 0.40 | $ | 0.22 | $ | 1.74 | $ | 0.96 | ||||||||||||||
|
Book
value
|
$ | 20.13 | $ | 19.67 | $ | 18.79 | $ | 18.24 | $ | 18.59 | $ | 20.13 | $ | 18.59 | ||||||||||||||
|
Cash
dividends
|
$ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.72 | $ | 0.72 | ||||||||||||||
|
Average
common shares outstanding - basic
|
3,108,535 | 3,099,852 | 3,094,534 | 3,090,868 | 3,089,382 | 3,101,025 | 3,095,889 | |||||||||||||||||||||
|
Average
common shares outstanding - diluted
|
3,123,262 | 3,113,467 | 3,102,503 | 3,099,614 | 3,097,422 | 3,112,739 | 3,105,525 | |||||||||||||||||||||
|
Selected
Ratios:
|
||||||||||||||||||||||||||||
|
Return
on average assets
|
0.82 | % | 1.02 | % | 0.99 | % | 0.66 | % | 0.37 | % | 0.94 | % | 0.57 | % | ||||||||||||||
|
Return
on average shareholders' equity
|
11.01 | % | 13.83 | % | 13.31 | % | 8.92 | % | 4.84 | % | 12.69 | % | 7.32 | % | ||||||||||||||
|
Net
interest margin (tax equivalent)
|
3.75 | % | 3.74 | % | 3.64 | % | 3.42 | % | 3.38 | % | 3.71 | % | 3.42 | % | ||||||||||||||
|
Efficiency
ratio (tax equivalent)
|
55.00 | % | 53.48 | % | 54.20 | % | 55.92 | % | 60.71 | % | 54.24 | % | 62.86 | % | ||||||||||||||
|
Average
shareholders' equity to total average assets
|
7.43 | % | 7.39 | % | 7.42 | % | 7.37 | % | 7.57 | % | 7.42 | % | 7.82 | % | ||||||||||||||
|
Net
loan charge-offs
|
$ | 77 | $ | 48 | $ | 560 | $ | 906 | $ | 511 | $ | 685 | $ | 863 | ||||||||||||||
|
Net
loan charge-offs (annualized) / Average loans
|
0.07 | % | 0.04 | % | 0.50 | % | 0.82 | % | 0.47 | % | 0.20 | % | 0.27 | % | ||||||||||||||
|
Balance
Sheet (Average)
|
||||||||||||||||||||||||||||
|
Assets
|
$ | 784,500 | $ | 769,539 | $ | 749,547 | $ | 745,551 | $ | 727,152 | $ | 767,990 | $ | 671,205 | ||||||||||||||
|
Investment
securities (AFS & HTM)
|
262,160 | 258,226 | 252,439 | 252,742 | 252,432 | 257,644 | 239,855 | |||||||||||||||||||||
|
Loans
receivable
|
474,903 | 466,100 | 451,064 | 439,534 | 436,926 | 464,110 | 424,011 | |||||||||||||||||||||
|
Deposits
|
669,756 | 662,048 | 640,790 | 622,772 | 608,660 | 657,637 | 584,743 | |||||||||||||||||||||
|
Shareholders'
equity
|
58,327 | 56,905 | 55,635 | 54,956 | 55,030 | 56,966 | 54,627 | |||||||||||||||||||||
|
Contacts:
|
Thomas
J. Bisko, CEO
|
Bret
H. Krevolin, CFO
|
|
215-538-5600
x-5612
|
215-538-5600
x-5716
|
|
|
tbisko@qnb.com
|
bkrevolin@qnb.com
|