On April 1, 2026, QNB closed the Victory Merger in an all-stock transaction, including cash paid for fractional shares, valued at approximately $47,106,000. Victory was headquartered in Limerick, Pennsylvania, with two full-service bank branches and two loans production offices. Under the terms of the merger agreement, each outstanding share of Victory’s common stock was converted into 0.55 shares of QNB common stock. QNB issued 1,178,182 shares of its common stock to holders of Victory common stock as of the acquisition date, representing a value per common share of $39.98, based on the closing price of QNB's common stock on March 31,

2026. Fractional shares were not issued and were instead paid in cash. Upon closing of the transaction, all shares of Victory common stock were cancelled and retired.

The Victory Merger constituted a business combination and was accounted for under the acquisition method of accounting. Accordingly, the assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. Fair value estimates, including those for loans, intangible assets, deposits, bank premises and equipment, other liabilities, certain tax-related matters and goodwill, are preliminary and subject to change as management continues to identify and assess information regarding the assets acquired and liabilities assumed, including more comprehensive information and management review of any new information that may arise as a result of integration activities.

The following table reflects total consideration transferred for Victory’s net assets and the amounts of acquired identifiable assets and

liabilities assumed at their preliminary estimated fair values as of the acquisition date:


( $ in thousands)
Purchase price	$	47,106
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and equivalents	$	20,553
Investment securities available-for-sale		15,605
Restricted investment in stocks		1,452
Loans receivable		408,379
Allowance for credit losses on loans		(3,020	)
Loans receivable, net		405,359
Premises and equipment		3,580
Bank-owned life insurance		6,128
Core deposit intangible		7,302
Accrued interest receivable		1,591
Other assets		2,322
Total assets acquired		463,892
Liabilities:
Deposits		409,165
Subordinated debt		17,650
Other liabilities		1,135
Total liabilities assumed	$	427,950
Net identifiable assets acquired	$	35,942
Goodwill	$	11,164

In connection with the merger, QNB recognized approximately $11,164,000 of goodwill, which is not expected to be tax-deductible.

The following is a description of the methods used to determine the estimated fair values of significant assets and liabilities:

Investment securities: Fair values were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or discounted cashflow methodologies.

Restricted investment in stocks: Includes ACBB, Federal Home Loan Bank and the Federal Reserve Bank stock. The carrying amount, based on redemption provisions, and the limited marketability of such securities, approximate fair value.

Loans, net: Fair values were estimated individually based on a discounted cashflow methodology that considered factors including the type of loan and related collateral, fixed or variable interest rate, remaining term, credit quality ratings or scores. Loans with similar characteristics were pooled together to determine certain inputs or assumptions when applying various valuation techniques. The discount rates used for loans were based on an evaluation of current market rates for new originations of comparable loans and a market participant’s required rate of return to purchase similar assets, including adjustments for liquidity and credit quality when necessary. The

initial amortized cost basis of acquired loans also included the initial ACL amount for instruments designated as PCD loans or PSLs. The following table reflects the unpaid principal balance, fair value and initial amortized cost basis of acquired loans as of April 1, 2026:


($ in thousands)	PCD			PSLs			Other		Total
Fair Value of acquired loans	$	33,114		$	372,207		$	38	$	405,359
Adjustments for credit losses		178			2,842			—		3,020
Initial amortized cost basis of acquired loans		33,292			375,049			38		408,379
Unpaid principal balance of acquired loans		33,356			376,749			38		410,143
Noncredit discount, net.	$	(64	)	$	(1,700	)	$	—	$	(1,764	)

Premises and equipment: Fair values for bank premises and equipment were generally based on appraisals of the property values.

Bank owned life insurance: Recognized at their cash surrender value which approximates fair value.

Core Deposit Intangible: The fair value was estimated based on a discounted cashflow methodology that considered expected customer attrition rates, net maintenance cost of the deposit base, the alternative cost of funds and the interest costs associated with customer deposits. The core deposit intangible is being amortized on an accelerated basis over its estimated useful life.

Deposits: The fair values for time deposits were estimated using a discounted cashflow methodology whereby the contractual remaining cash flows were discounted using market rates currently being offered for time deposits of similar maturities. For transactional deposits, carrying amounts approximate fair value.

Subordinated debt: Subordinated debt has stated maturities and call dates and have been valued using the present value of cash flows discounted at rates approximating the current market for similar debt instruments.

Results for the three and six months of 2026 include three months of post-merger activity related to the Victory Merger. The acquired business was fully integrated into the Company's operations. As a result, it is impracticable to separately identify the revenue and earnings attributable to the acquired business since the acquisition date. The following table presented unaudited pro forma information as if the Victory Merger occurred on January 1, 2026. This unaudited pro forma information combines the historical condensed consolidated results of operations of QNB and Victory after giving effect to certain adjustments, including purchase accounting adjustments, amortization of intangible assets and merger costs, and the related income tax effects. Comparative historical information for the 2025 interim period is not readily available for Victory.

The unaudited pro forma information does not necessarily reflect the results of operations that would have occurred had QNB acquired Victory on January 1, 2025. Furthermore, cost savings and other synergies related the merger are not reflected in the unaudited amounts for the six months ended June 30, 2026.


Unaudited Pro Forma Information
For the Six Months Ended June 30, 2026
( $ in thousands)
Net interest income	$	35,503
Non-interest income (loss)		3,470
Net income		2,218

Direct merger-related charges associated with the Victory Merger were expensed as incurred by QNB. These merger-related charges primarily related to employee change in control and termination expenses, system conversions and other costs of integrating and conforming the acquired operations with those of QNB. The table below summarizes the direct merger-related charges recorded in the Condensed Consolidated Statements of Income:


( $ in thousands)	For the Three Months Ended June 30, 2026		For the Six Months Ended June 30, 2026
Legal and consultant expenses	$	131	$	346
Compensation and benefits		1,033		1,055
Contract termination fees		654		654
Regulatory filings and special shareholder meeting costs		146		235
Success Fee		117		117
System Conversion/Technology Costs		884		1,444
Communications		119		121
	$	3,084	$	3,972