The amortized cost and estimated fair values of investment securities available-for-sale at June 30, 2026 and December 31, 2025 were as follows:


	Fair		Gross unrealized holding		Gross unrealized holding			Gross unrealized fair value hedge		Amortized
June 30, 2026	value		gains		losses			gains (1)		cost
U.S. Treasury	$	17,990	$	—	$	(2	)	$	—	$	17,992
U.S. Government agency		70,762		—		(5,211	)		—		75,973
State and municipal		89,597		—		(15,500	)		841		104,256
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		172,676		—		(26,132	)		1,659		197,149
Collateralized mortgage obligations (CMOs)		136,756		162		(11,503	)		—		148,097
Corporate debt and money market funds		29,197		337		(451	)		—		29,311
Total investment debt securities available-for-sale	$	516,978	$	499	$	(58,799	)	$	2,500	$	572,778

(1) See Note 13


			Gross		Gross			Gross
			unrealized		unrealized			unrealized
	Fair		holding		holding			fair value hedge			Amortized
December 31, 2025	value		gains		losses			losses (1)			cost
U.S. Treasury	$	21,583	$	6	$	—		$	—		$	21,577
U.S. Government agency		70,850		—		(5,118	)		—			75,968
State and municipal		88,787		—		(15,326	)		(583	)		104,696
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		182,208		—		(25,767	)		(1,109	)		209,084
Collateralized mortgage obligations (CMOs)		149,203		19		(11,170	)		—			160,354
Corporate debt and money market funds		30,199		314		(483	)		—			30,368
Total investment debt securities available-for-sale	$	542,830	$	339	$	(57,864	)	$	(1,692	)	$	602,047

(1) See Note 13

The amortized cost and estimated fair value of securities available-for-sale by contractual maturity at June 30, 2026 is shown in the following table. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities for mortgage-backed securities and collateralized mortgage obligations are dependent upon the interest rate environment and prepayments of the underlying loans.

Proceeds from sales of investment securities available-for-sale were approximately $6,752,000 and $0 for the six months ended June 30, 2026 and 2025, respectively.

At June 30, 2026 and December 31, 2025, investment securities available-for-sale totaling approximately $296,472,000 and $234,159,000, respectively, were pledged as collateral for repurchase agreements and deposits of public funds.

The following table presents information related to the Company’s gains and losses on the sales and calls of securities available-for-sale, and losses recognized for the impairment of these investments. Gains and losses on available-for-sale securities are computed on the specific identification method and included in non-interest income. Gross realized losses on debt securities are net of impairment charges:

The tax applicable to the net realized gains for the three-month periods ended June 30, 2026 and 2025 was $21,000 and $0, respectively. The tax applicable to the net realized gains for the six-month periods ended June 30, 2026 and 2025 was $21,000 and $0, respectively.

QNB follows the accounting guidance in FASB ASC 326-10 as it relates to the recognition and presentation of impairment. This accounting guidance specifies that (a) if a company does not have the intent to sell a debt security prior to recovery and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more likely than not that the entity will not have to sell the

security before recovery of its cost basis, it will recognize the credit component of an impairment of a debt security in earnings and the remaining portion in other comprehensive loss. No credit impairments were recognized on debt securities during the six months ended June 30, 2026 and 2025, respectively.

The following table indicates the length of time individual debt securities have been in a continuous unrealized loss position as of June 30, 2026 and December 31, 2025:



			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2026	securities		value		losses			value		losses			value		losses
U.S. Treasury		1	$	3,000	$	(2	)	$	—	$	—		$	3,000	$	(2	)
U.S. Government agency		35		—		—			70,762		(5,211	)		70,762		(5,211	)
State and municipal		188		1,508		(19	)		87,172		(15,481	)		88,680		(15,500	)
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		153		34		—			170,838		(26,132	)		170,872		(26,132	)
Collateralized mortgage obligations (CMOs)		150		58,651		(281	)		78,104		(11,222	)		136,755		(11,503	)
Corporate debt and money market funds		26		26,053		(447	)		2,652		(4	)		28,705		(451	)
Total		553	$	89,246	$	(749	)	$	409,528	$	(58,050	)	$	498,774	$	(58,799	)



			Less than 12 months					12 months or longer					Total
	No. of		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2025	securities		value		losses			value		losses			value		losses
U.S. Treasury		—	$	—	$	—		$	—	$	—		$	—	$	—
U.S. Government agency		35		—		—			70,850		(5,118	)		70,850		(5,118	)
State and municipal		187		—		—			89,085		(15,326	)		89,085		(15,326	)
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed		151		—		—			183,138		(25,767	)		183,138		(25,767	)
Collateralized mortgage obligations (CMOs)		149		22,618		(91	)		111,962		(11,079	)		134,580		(11,170	)
Corporate debt and money markets		6		9,232		(404	)		1,421		(79	)		10,653		(483	)
Total		528	$	31,850	$	(495	)	$	456,456	$	(57,369	)	$	488,306	$	(57,864	)

Management evaluates debt securities, which are comprised of U.S. Treasury, U.S. Government agencies, state and municipalities, mortgage-backed securities, CMOs and corporate debt securities, for impairment and considers the current economic conditions, interest rates and the bond rating of each security. The unrealized losses at June 30, 2026 in U.S. Government agency securities, state and municipal securities, mortgage-backed securities, CMOs and corporate debt securities are primarily the result of interest rate fluctuations. If held to maturity, these bonds will mature at par, and QNB will not realize a loss. QNB has the intent to hold the securities and does not believe it will be required to sell the securities before recovery occurs.

The Company’s investment in marketable equity securities primarily consisted of investments with readily determinable fair values in large cap stock companies. Changes in fair value are recorded in unrealized gain/(losses) in non-interest income. The Company sold its equity portfolio during 2024.

Visa, Inc. commenced their second exchange offer for all of its outstanding shares of Class B-2 common stock for a combination of Class B-3 and Class C common shares. The exchange offer was optional for current Class B-2 holders and expired at 11:59 pm on May 8, 2026. QNB elected to participate in the exchange offer including a required makewhole agreement pursuant which participating Class B-2 stockholders agree to reimburse Visa for future obligations relating to certain litigation which, but for participation in the exchange offer, would have otherwise been the responsibility of the Class B-2 stockholder as a result of its ownership of the Class B-2 common stock. QNB had 3,251 Class B-2 common shares with a cost basis of $0. Under the exchange offer, received 1,625 if Class B-3 common shares and 612 Class C shares. The Class C shares are convertible to Class A shares. 204 of the Class C shares were

converted to 204 Class A shares in the second quarter. QNB recorded an unrealized gain on the Class A shares in the second quarter of 2026 of $268,000 and a reserve of the makewhole agreement of $23,000.