For the quarter ended
The operating performance of the Bank, a wholly-owned subsidiary of
The following table presents disaggregated net income:
Three months ended, | Nine months ended, | ||||||||||||||||||||||
Variance | Variance | ||||||||||||||||||||||
$ | 2,334,000 | $ | 4,247,000 | $ | (1,913,000 | ) | $ | 8,568,000 | $ | 12,037,000 | $ | (3,469,000 | ) | ||||||||||
10,000 | (832,000 | ) | 842,000 | (219,000 | ) | (1,563,000 | ) | 1,344,000 | |||||||||||||||
Consolidated net income | $ | 2,344,000 | $ | 3,415,000 | $ | (1,071,000 | ) | $ | 8,349,000 | $ | 10,474,000 | $ | (2,125,000 | ) |
Total assets as of
“The economy continues to be resilient even with continued rate hikes causing margin compression from our rapid repricing of deposits and slower repricing of loans. This, coupled with changes in the fair value of our holding company’s equities portfolio, directly impacted our third-quarter financial results,” stated
Net Interest Income and Net Interest Margin
Net interest income for the quarter and nine months ended
The yield on earning assets was 4.28% for the third quarter 2023, compared with 3.23% in the third quarter of 2022. For the nine-month period ended
Proceeds from average short-term borrowings and payments received on investment securities over the past year were invested in loans. Loan growth was primarily in commercial real estate, which comprised 41% of average earning assets in the nine 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 103 basis-point increase in the yield on loans. The decline in the available-for-sale portfolio was primarily in mortgage-backed securities, which comprised 24% of average earnings assets in the nine months of 2023 compared with 27% for the same period in 2022. The 140 basis-point increase in the rate paid on deposits and the 241 basis-point increase in the rate on short-term borrowing were the primary contributors to the increase in the cost of funds of 150 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
QNB recorded
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
Non-Interest Income
Total non-interest income was
ATM and debit card income increased
For the nine months ended
Non-Interest Expense
Total non-interest expense was
Net occupancy and furniture and equipment expense increased
For the nine months ended
Provision for income taxes decreased
About the Company
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
Consolidated Selected Financial Data (unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Balance Sheet (Period End) | |||||||||||||||
Assets | $ | 1,684,392 | $ | 1,650,586 | $ | 1,626,499 | $ | 1,668,497 | $ | 1,645,068 | |||||
Cash and cash equivalents | 55,141 | 34,824 | 14,201 | 15,899 | 17,218 | ||||||||||
Investment securities | |||||||||||||||
Debt securities, AFS | 505,390 | 527,741 | 537,904 | 546,525 | 555,710 | ||||||||||
Equity securities | 4,765 | 5,424 | 11,908 | 12,056 | 10,444 | ||||||||||
Loans held-for-sale | 446 | 810 | 388 | - | - | ||||||||||
Loans receivable | 1,060,450 | 1,029,744 | 1,011,956 | 1,039,385 | 1,008,306 | ||||||||||
Allowance for loan losses | (8,542 | ) | (8,365 | ) | (8,191 | ) | (10,531 | ) | (11,338 | ) | |||||
Net loans | 1,051,908 | 1,021,379 | 1,003,765 | 1,028,854 | 996,968 | ||||||||||
Deposits | 1,483,333 | 1,449,765 | 1,424,590 | 1,418,369 | 1,476,668 | ||||||||||
Demand, non-interest bearing | 192,226 | 212,396 | 212,259 | 231,849 | 236,167 | ||||||||||
Interest-bearing demand, money market and savings | 1,000,921 | 962,042 | 962,315 | 1,011,071 | 1,065,472 | ||||||||||
Time | 290,186 | 275,327 | 250,016 | 175,449 | 175,029 | ||||||||||
Short-term borrowings | 96,703 | 90,845 | 110,192 | 161,327 | 92,896 | ||||||||||
Long-term debt | 20,000 | 20,000 | - | 10,000 | 10,000 | ||||||||||
Shareholders' equity | 74,081 | 80,945 | 83,874 | 70,958 | 58,124 | ||||||||||
Asset Quality Data (Period End) | |||||||||||||||
Non-accrual loans | $ | 1,893 | $ | 4,794 | $ | 4,561 | $ | 4,820 | $ | 6,337 | |||||
Loans past due 90 days or more and still accruing | - | - | - | - | - | ||||||||||
Restructured loans | 3,979 | 4,033 | 4,244 | 4,301 | 4,357 | ||||||||||
Non-performing loans | 5,872 | 8,827 | 8,805 | 9,121 | 10,694 | ||||||||||
Other real estate owned and repossessed assets | - | - | - | - | - | ||||||||||
Non-performing assets | $ | 5,872 | $ | 8,827 | $ | 8,805 | $ | 9,121 | $ | 10,694 | |||||
Allowance for loan losses | $ | 8,542 | $ | 8,365 | $ | 8,191 | $ | 10,531 | $ | 11,338 | |||||
Non-performing loans / Loans excluding held-for-sale | 0.55 | % | 0.86 | % | 0.87 | % | 0.88 | % | 1.06 | % | |||||
Non-performing assets / Assets | 0.35 | % | 0.53 | % | 0.54 | % | 0.55 | % | 0.65 | % | |||||
Allowance for loan losses / Loans excluding held-for-sale | 0.81 | % | 0.81 | % | 0.81 | % | 1.01 | % | 1.12 | % |
Consolidated Selected Financial Data (unaudited) | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | Three months ended, | Nine months ended, | ||||||||||||||||||||
For the period: | ||||||||||||||||||||||
Interest income | $ | 18,497 | $ | 15,865 | $ | 15,463 | $ | 14,739 | $ | 13,546 | $ | 49,825 | $ | 37,682 | ||||||||
Interest expense | 8,284 | 6,532 | 5,046 | 3,460 | 2,167 | 19,862 | 4,464 | |||||||||||||||
Net interest income | 10,213 | 9,333 | 10,417 | 11,279 | 11,379 | 29,963 | 33,218 | |||||||||||||||
Provision for credit losses | 459 | 209 | (1,805 | ) | (850 | ) | - | (1,137 | ) | - | ||||||||||||
Net interest income after provision for credit losses | 9,754 | 9,124 | 12,222 | 12,129 | 11,379 | 31,100 | 33,218 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||||
Fees for services to customers | 421 | 414 | 402 | 404 | 423 | 1,237 | 1,210 | |||||||||||||||
ATM and debit card | 685 | 704 | 659 | 704 | 669 | 2,048 | 2,015 | |||||||||||||||
Retail brokerage and advisory income | 219 | 202 | 234 | 184 | 194 | 655 | 604 | |||||||||||||||
Net realized gain on investment securities | 131 | 519 | (465 | ) | (227 | ) | - | 185 | 493 | |||||||||||||
Unrealized gain (loss) on equity securities | (138 | ) | (573 | ) | 57 | 1,602 | (1,174 | ) | (654 | ) | (2,628 | ) | ||||||||||
Net (loss) gain on sale of loans | 4 | (5 | ) | 6 | - | 6 | 5 | 6 | ||||||||||||||
Other | 433 | 319 | 326 | 330 | 366 | 1,078 | 1,034 | |||||||||||||||
Total non-interest income | 1,755 | 1,580 | 1,219 | 2,997 | 484 | 4,554 | 2,734 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||||
Salaries and employee benefits | 4,971 | 4,775 | 4,563 | 4,464 | 4,371 | 14,309 | 12,842 | |||||||||||||||
Net occupancy and furniture and equipment | 1,504 | 1,467 | 1,377 | 1,259 | 1,314 | 4,348 | 3,853 | |||||||||||||||
Other | 2,196 | 2,250 | 2,260 | 2,396 | 2,129 | 6,706 | 6,678 | |||||||||||||||
Total non-interest expense | 8,671 | 8,492 | 8,200 | 8,119 | 7,814 | 25,363 | 23,373 | |||||||||||||||
Income before income taxes | 2,838 | 2,212 | 5,241 | 7,007 | 4,049 | 10,291 | 12,579 | |||||||||||||||
Provision for income taxes | 494 | 325 | 1,123 | 1,560 | 634 | 1,942 | 2,105 | |||||||||||||||
Net income | $ | 2,344 | $ | 1,887 | $ | 4,118 | $ | 5,447 | $ | 3,415 | $ | 8,349 | $ | 10,474 | ||||||||
Share and Per Share Data: | ||||||||||||||||||||||
Net income - basic | $ | 0.65 | $ | 0.52 | $ | 1.15 | $ | 1.52 | $ | 0.96 | $ | 2.32 | $ | 2.94 | ||||||||
Net income - diluted | $ | 0.65 | $ | 0.52 | $ | 1.15 | $ | 1.52 | $ | 0.96 | $ | 2.32 | $ | 2.94 | ||||||||
Book value | $ | 20.35 | $ | 22.42 | $ | 23.32 | $ | 19.78 | $ | 16.25 | $ | 20.35 | $ | 16.25 | ||||||||
Cash dividends | $ | 0.37 | $ | 0.37 | $ | 0.37 | $ | 0.36 | $ | 0.36 | $ | 1.11 | $ | 1.08 | ||||||||
Average common shares outstanding -basic | 3,613,230 | 3,598,545 | 3,588,363 | 3,577,587 | 3,567,987 | 3,600,137 | 3,560,064 | |||||||||||||||
Average common shares outstanding -diluted | 3,613,230 | 3,598,545 | 3,588,363 | 3,577,587 | 3,567,987 | 3,600,137 | 3,560,064 | |||||||||||||||
Selected Ratios: | ||||||||||||||||||||||
Return on average assets | 0.52 | % | 0.44 | % | 0.97 | % | 1.24 | % | 0.78 | % | 0.64 | % | 0.82 | % | ||||||||
Return on average shareholders' equity | 5.88 | % | 4.82 | % | 10.81 | % | 14.38 | % | 9.20 | % | 7.13 | % | 9.68 | % | ||||||||
Net interest margin (tax equivalent) | 2.38 | % | 2.27 | % | 2.55 | % | 2.68 | % | 2.72 | % | 2.40 | % | 2.72 | % | ||||||||
Efficiency ratio (tax equivalent) | 71.58 | % | 76.78 | % | 69.57 | % | 56.20 | % | 64.88 | % | 72.55 | % | 64.04 | % | ||||||||
Average shareholders' equity to total average assets | 8.91 | % | 9.12 | % | 8.99 | % | 8.65 | % | 8.53 | % | 9.01 | % | 8.50 | % | ||||||||
Net loan charge-offs (recoveries) | $ | 275 | $ | 38 | $ | (532 | ) | $ | (43 | ) | $ | (41 | ) | $ | (219 | ) | $ | (154 | ) | |||
Net loan charge-offs (recoveries) - annualized / Average loans excluding held-for-sale | 0.10 | % | 0.01 | % | -0.21 | % | -0.02 | % | -0.02 | % | -0.03 | % | -0.02 | % | ||||||||
Balance Sheet (Average) | ||||||||||||||||||||||
Assets | $ | 1,773,138 | $ | 1,719,368 | $ | 1,719,167 | $ | 1,737,679 | $ | 1,727,132 | $ | 1,737,417 | $ | 1,701,272 | ||||||||
Investment securities (AFS & Equities) | 624,423 | 636,110 | 649,231 | 673,117 | 691,010 | 636,498 | 703,922 | |||||||||||||||
Loans receivable | 1,039,351 | 1,026,881 | 1,021,265 | 1,020,102 | 984,968 | 1,029,042 | 949,691 | |||||||||||||||
Deposits | 1,488,632 | 1,427,238 | 1,414,764 | 1,462,654 | 1,475,668 | 1,443,816 | 1,459,662 | |||||||||||||||
Shareholders' equity | 158,063 | 156,890 | 154,503 | 150,281 | 147,296 | 156,499 | 144,676 |
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis) | |||||||||||||||
Three Months Ended | |||||||||||||||
Average | Average | Average | Average | ||||||||||||
Balance | Rate | Interest | Balance | Rate | Interest | ||||||||||
Assets | |||||||||||||||
Investment securities: | |||||||||||||||
$ | 7,111 | 5.17 | % | $ | 92 | $ | 831 | 1.32 | % | $ | 3 | ||||
101,947 | 1.11 | 283 | 101,938 | 1.11 | 283 | ||||||||||
State and municipal | 109,157 | 3.30 | 901 | 127,929 | 2.38 | 761 | |||||||||
Mortgage-backed and CMOs | 394,607 | 2.53 | 2,500 | 441,952 | 1.61 | 1,783 | |||||||||
Corporate debt securities and mutual funds | 6,648 | 4.40 | 73 | 6,658 | 4.37 | 72 | |||||||||
Equities | 4,953 | 4.70 | 59 | 11,702 | 3.36 | 99 | |||||||||
Total investment securities | 624,423 | 2.50 | 3,908 | 691,010 | 1.74 | 3,001 | |||||||||
Loans: | |||||||||||||||
Commercial real estate | 722,833 | 5.10 | 9,288 | 650,118 | 4.22 | 6,917 | |||||||||
Residential real estate | 107,332 | 3.81 | 1,022 | 105,723 | 3.33 | 880 | |||||||||
Home equity loans | 57,694 | 6.65 | 967 | 56,669 | 4.65 | 665 | |||||||||
Commercial and industrial | 128,601 | 7.23 | 2,343 | 148,545 | 5.25 | 1,965 | |||||||||
Consumer loans | 3,823 | 7.53 | 73 | 4,401 | 5.76 | 64 | |||||||||
Tax-exempt loans | 19,630 | 3.59 | 178 | 19,535 | 3.43 | 169 | |||||||||
Total loans, net of unearned income* | 1,039,913 | 5.29 | 13,871 | 984,991 | 4.29 | 10,660 | |||||||||
Other earning assets | 62,420 | 5.48 | 862 | 8,038 | 3.02 | 62 | |||||||||
Total earning assets | 1,726,756 | 4.28 | 18,641 | 1,684,039 | 3.23 | 13,723 | |||||||||
Cash and due from banks | 15,679 | 15,544 | |||||||||||||
Allowance for loan losses | (8,396 | ) | (11,323 | ) | |||||||||||
Other assets | 39,099 | 38,872 | |||||||||||||
Total assets | $ | 1,773,138 | $ | 1,727,132 | |||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||
Interest-bearing deposits: | |||||||||||||||
Interest-bearing demand | $ | 319,335 | 0.74 | % | 600 | $ | 342,011 | 0.23 | % | 201 | |||||
Municipals | 157,391 | 4.63 | 1,837 | 138,187 | 1.77 | 617 | |||||||||
Money market | 201,277 | 3.01 | 1,527 | 134,591 | 0.50 | 170 | |||||||||
Savings | 325,567 | 1.27 | 1,038 | 451,871 | 0.53 | 608 | |||||||||
Time < | 128,884 | 2.92 | 947 | 90,129 | 0.74 | 168 | |||||||||
Time | 106,920 | 3.69 | 996 | 54,168 | 0.87 | 118 | |||||||||
Time > | 43,856 | 3.41 | 377 | 25,616 | 0.86 | 56 | |||||||||
Total interest-bearing deposits | 1,283,230 | 2.26 | 7,322 | 1,236,573 | 0.62 | 1,938 | |||||||||
Short-term borrowings | 95,568 | 3.07 | 740 | 85,943 | 0.87 | 189 | |||||||||
Long-term debt | 20,000 | 4.36 | 222 | 10,000 | 1.57 | 40 | |||||||||
Total interest-bearing liabilities | 1,398,798 | 2.35 | 8,284 | 1,332,516 | 0.65 | 2,167 | |||||||||
Non-interest-bearing deposits | 205,402 | 239,095 | |||||||||||||
Other liabilities | 10,875 | 8,225 | |||||||||||||
Shareholders' equity | 158,063 | 147,296 | |||||||||||||
Total liabilities and | |||||||||||||||
shareholders' equity | $ | 1,773,138 | $ | 1,727,132 | |||||||||||
Net interest rate spread | 1.93 | % | 2.58 | % | |||||||||||
Margin/net interest income | 2.38 | % | $ | 10,357 | 2.72 | % | $ | 11,556 | |||||||
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 |
Average Balances, Rate, and Interest Income and Expense Summary (Tax-Equivalent Basis) | |||||||||||||||||||
Nine Months Ended | |||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||
Balance | Rate | Interest | Balance | Rate | Interest | ||||||||||||||
Assets | |||||||||||||||||||
Investment securities: | |||||||||||||||||||
$ | 3,618 | 4.97 | % | $ | 134 | $ | 600 | 1.12 | % | $ | 5 | ||||||||
101,945 | 1.11 | 849 | 101,292 | 1.10 | 836 | ||||||||||||||
State and municipal | 109,877 | 2.64 | 2,173 | 129,343 | 2.40 | 2,325 | |||||||||||||
Mortgage-backed and CMOs | 405,979 | 1.96 | 5,971 | 453,833 | 1.56 | 5,322 | |||||||||||||
Corporate debt securities and mutual funds | 6,637 | 4.41 | 219 | 6,682 | 4.36 | 218 | |||||||||||||
Equities | 8,442 | 4.07 | 257 | 12,172 | 3.26 | 297 | |||||||||||||
Total investment securities | 636,498 | 2.01 | 9,603 | 703,922 | 1.71 | 9,003 | |||||||||||||
Loans: | |||||||||||||||||||
Commercial real estate | 700,375 | 4.79 | 25,091 | 623,193 | 4.11 | 19,181 | |||||||||||||
Residential real estate | 106,817 | 2.76 | 2,943 | 103,841 | 2.47 | 2,564 | |||||||||||||
Home equity loans | 57,317 | 6.44 | 2,762 | 55,244 | 3.93 | 1,624 | |||||||||||||
Commercial and industrial | 141,176 | 7.55 | 7,977 | 143,354 | 4.73 | 5,075 | |||||||||||||
Consumer loans | 3,942 | 7.15 | 211 | 4,585 | 5.31 | 182 | |||||||||||||
Tax-exempt loans | 19,984 | 3.53 | 527 | 19,482 | 3.41 | 497 | |||||||||||||
Total loans, net of unearned income* | 1,029,611 | 5.13 | 39,511 | 949,699 | 4.10 | 29,123 | |||||||||||||
Other earning assets | 27,195 | 5.67 | 1,153 | 6,262 | 2.06 | 97 | |||||||||||||
Total earning assets | 1,693,304 | 3.97 | 50,267 | 1,659,883 | 3.08 | 38,223 | |||||||||||||
Cash and due from banks | 14,046 | 14,123 | |||||||||||||||||
Allowance for loan losses | (8,871 | ) | (11,266 | ) | |||||||||||||||
Other assets | 38,938 | 38,532 | |||||||||||||||||
Total assets | $ | 1,737,417 | $ | 1,701,272 | |||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||
Interest-bearing demand | $ | 314,012 | 0.52 | % | 1,227 | $ | 342,955 | 0.20 | % | 521 | |||||||||
Municipals | 128,270 | 4.34 | 4,163 | 121,332 | 0.91 | 825 | |||||||||||||
Money market | 169,308 | 2.30 | 2,913 | 139,700 | 0.38 | 401 | |||||||||||||
Savings | 363,496 | 1.18 | 3,208 | 446,196 | 0.39 | 1,312 | |||||||||||||
Time < | 113,951 | 2.30 | 1,960 | 91,223 | 0.76 | 522 | |||||||||||||
Time | 104,697 | 3.42 | 2,676 | 49,656 | 0.75 | 280 | |||||||||||||
Time > | 36,590 | 2.80 | 767 | 25,361 | 0.75 | 143 | |||||||||||||
Total interest-bearing deposits | 1,230,324 | 1.84 | 16,914 | 1,216,423 | 0.44 | 4,004 | |||||||||||||
Short-term borrowings | 112,724 | 2.99 | 2,518 | 78,994 | 0.58 | 341 | |||||||||||||
Long-term debt | 14,267 | 3.98 | 430 | 10,000 | 1.57 | 119 | |||||||||||||
Total interest-bearing liabilities | 1,357,315 | 1.96 | 19,862 | 1,305,417 | 0.46 | 4,464 | |||||||||||||
Non-interest-bearing deposits | 213,492 | 243,239 | |||||||||||||||||
Other liabilities | 10,111 | 7,940 | |||||||||||||||||
Shareholders' equity | 156,499 | 144,676 | |||||||||||||||||
Total liabilities and | |||||||||||||||||||
shareholders' equity | $ | 1,737,417 | $ | 1,701,272 | |||||||||||||||
Net interest rate spread | 2.01 | % | 2.62 | % | |||||||||||||||
Margin/net interest income | 2.40 | % | $ | 30,405 | 2.72 | % | $ | 33,759 | |||||||||||
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 |
Contacts:David W. Freeman President & Chief Executive Officer 215-538-5600 x-5619 dfreeman@qnbbank.comJeffrey Lehocky Chief Financial Officer 215-538-5600 x-5716 jlehocky@qnbbank.com
Source:
2023 GlobeNewswire, Inc., source