Quakertown, PA
QNB Corp. (“QNB”) (OTCQX: QNBC) and The Victory Bancorp, Inc. (“Victory”) (OTCQX: VTYB), Limerick, Pa, today announced they have entered into a definitive agreement under which QNB will acquire Victory in an all-stock transaction valued at approximately $40.97 million in the aggregate based on QNB’s closing stock price of $35.60 as of September 22, 2025, resulting in an implied price per share to holders of Victory Common Stock of approximately $19.58 per share. Under the terms of the definitive agreement, which was unanimously approved by the boards of directors of both companies, upon the completion of the merger, Victory shareholders would receive 0.5500 shares of QNB common stock for each share of Victory common stock they own. Any outstanding Victory options would be converted into options to purchase QNB common stock, subject to the strike price and number of options adjustments described in the definitive agreement. The pro-forma post-merger shareholder ownership split would be approximately 76.4% for QNB and 23.6% for Victory.
Highlights of the Transaction:
- Strategic merger that creates a bank holding company with nearly $2.4 billion in assets and a combined market capitalization of approximately $173 million;
- #1 ranked deposit market share in Montgomery County, Pennsylvania, among banks with less than $5 billion in total assets;
- The combined bank and bank holding company will be headquartered in Quakertown and operate under the QNB Bank brand;
- Both companies have closely aligned leadership cultures dedicated to the success of our customers, communities, employees, and shareholders.
Financial Benefits of the Merger:
The transaction is projected to deliver approximately 16% EPS accretion to QNB’s 2026 estimated EPS and approximately 19% EPS accretion to QNB’s 2027 estimated EPS, inclusive of all merger synergies. The expected tangible book value earn-back period is approximately 3.3 years.
The transaction is projected to be over 35% accretive to Victory’s projected 2026 EPS. In addition, QNB’s projected annual cash dividend of $1.56 adjusted for the exchange ratio will result in Victory shareholders receiving more than double the Victory current annual cash dividend.
On a pro-forma basis for the year 2027, the combined business is expected to deliver top-tier operating and profitability metrics upon fully phased-in integration plans, including:
- Return on Average Assets of approximately 0.80%
- Return on Average Tangible Common Equity of approximately 13%.
The pro-forma combined company financial metrics are based on estimated combined company cost synergies, anticipated purchase accounting adjustments, and the expected merger closing time horizon.
Governance and Leadership:
QNB’s board of directors will be expanded by two members to 12 directors, consisting of 10 existing directors from QNB and two newly appointed directors from Victory, including Joe Major. Randy Bimes will continue to serve as Chair of the board of directors. Joe Major will serve as Vice Chair of the combined holding company and bank board of directors.
Dave Freeman, President & CEO, of QNB will continue in his role as President & CEO of the combined company.
The Kafafian Group, Inc. acted as exclusive financial advisor to Victory and delivered a fairness opinion to the Board of Directors of Victory in connection with the transaction. Kilpatrick Townsend & Stockton LLP served as legal counsel to Victory.