Dividends payable by QNB and the Bank are subject to various limitations imposed by statutes, regulations and policies adopted by bank regulatory agencies. Under Federal and Pennsylvania banking law, the Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. Under Federal Reserve regulations, the Bank is limited as to the amount it may lend affiliates, including QNB, unless such loans are collateralized by specific obligations.

Both QNB and the Bank are subject to regulatory capital requirements administered by Federal banking agencies. Failure to meet minimum capital requirements can initiate actions by regulators that could have an effect on the financial statements. Under the framework for prompt corrective action, the Bank must meet capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items. The capital amounts and classification are also subject to qualitative judgments by the regulators. Management believes, as of June 30, 2025, that QNB and the Bank met capital adequacy requirements to which they were subject.

As of the most recent notification, the primary regulator of the Bank considered it to be “well capitalized” under the regulatory framework. There are no conditions or events since that notification that management believes have changed the classification. To be categorized as well capitalized, bank holding companies and insured depository institutions must maintain minimum ratios as set forth in the following table below.

The Company and the Bank’s actual capital amounts and ratios are presented as follows:


	Capital levels
	Actual					Adequately capitalized					Well capitalized
June 30, 2025	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
The Company	$	219,732		15.78	%	$	111,397		8.00	%	$	139,246		10.00	%
Bank		195,976		14.09			111,294	8.00				139,118	10.00

Tier 1 capital (to risk-weighted assets):
The Company	$	170,478		12.24			83,548	6.00				83,548	6.00
Bank		186,722		13.42			83,471	6.00				111,294	8.00

Common equity tier 1 capital (to risk-weighted assets):
The Company		170,478		12.24			62,661	4.50			N/A		N/A
Bank		186,722		13.42			62,603	4.50				90,427	6.50

Tier 1 capital (to average assets):
The Company		170,478		8.76			77,882	4.00			N/A		N/A
Bank		186,722		9.70			76,984	4.00				96,230	5.00


	Capital levels
	Actual					Adequately capitalized					Well capitalized
As of December 31, 2024	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
The Company	$	214,826		15.56	%		110,480		8.00	%		138,100		10.00	%
Bank		192,057		13.92			110,396	8.00				137,995	10.00

Tier 1 capital (to risk-weighted assets):
The Company		165,995		12.02			82,860	6.00				82,860	6.00
Bank		183,226		13.28			82,797	6.00				110,396	8.00

Common equity tier 1 capital (to risk-weighted assets):
The Company		165,995		12.02			62,145	4.50			N/A		N/A
Bank		183,226		13.28			62,098	4.50				89,696	6.50

Tier 1 capital (to average assets):
The Company		165,995		8.70			76,357	4.00			N/A		N/A
Bank		183,226		9.71			75,483	4.00				94,353	5.00