QNB Corp. to acquire The Victory Bancorp in $40.97M all-stock transaction

QNB Corp. (QNBC) and The Victory Bancorp announced they have entered into a definitive agreement under which QNB will acquire Victory in an all-stock transaction valued at approximately $40.97M in the aggregate based on QNB’s closing stock price of $35.60 as of September 22, 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. 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. 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 and CEO, of QNB will continue in his role as president and CEO of the combined company. The transaction is expected to close in the fourth quarter of 2025 or first quarter of 2026, subject to satisfaction of customary closing conditions, including regulatory approvals and approval from both QNB and Victory shareholders. Victory directors have entered into support agreements with QNB pursuant to which they have committed to vote their shares of Victory common stock in favor of the merger. QNB directors have entered into support agreements with Victory pursuant to which they have committed to vote their shares of QNB common stock in favor of the merger.