Core Insights - QNB reported a significant increase in profitability for Q2 2025, with diluted earnings per share (GAAP) rising to $1.04 from $0.67 in Q2 2024, marking a 55.2% increase, and net income (GAAP) reaching $3.88 million, up 57.5% from $2.47 million in the same period last year [1][2] Financial Performance - Net interest income increased to $12.65 million, a 19.6% rise from $10.59 million in Q2 2024, while net interest margin improved to 2.69% from 2.46%, reflecting a 0.23 percentage point increase [2][5] - The efficiency ratio improved to 66.39% from 73.26% in Q2 2024, indicating better cost management [6] - Non-interest income grew by 12.8% compared to Q2 2024, although adjusted for one-off securities gains, the increase was 6.9% [5] Asset Quality - Non-performing loans increased sharply to $8.947 million, representing 0.73% of loans, compared to $1.975 million at year-end 2024, with management noting that one commercial relationship accounted for approximately 88% of this total [7][10] - The allowance for credit losses was 0.75% of loans receivable, and charge-offs remained negligible [7] Shareholder Metrics - Shareholders' equity rose to $113.3 million, with book value per share increasing to $30.46 from $25.57 a year earlier [8] - Deposits grew to $1.65 billion, reflecting a 1.4% increase over six months, and cash holdings increased by 31.1% from December 2024 to June 2025 [8] Strategic Focus - QNB emphasizes relationship banking, small-business lending, and personal financial services, operating in a competitive environment with a focus on technology adoption and customer service [3][4] - The bank aims for modest loan and deposit growth, disciplined cost management, and capital strength, with a focus on personalized service and technology offerings [4] Future Outlook - Management expressed a cautiously optimistic view for the second half of the year, highlighting a strengthening business pipeline but noting continued customer caution in borrowing and spending [9] - Areas for scrutiny include the trend in non-performing loans and the sustainability of current profit margins amid potential rising funding costs [10]