Quakertown-based QNB Corp. has announced its agreement to acquire Victory Bancorp in an all-stock transaction valued at approximately $40.97 million. This strategic combination is set to create a larger financial institution with enhanced capabilities and a broader market presence across Pennsylvania.
The acquisition of Victory Bancorp by QNB Corp. marks a significant step in QNB’s growth strategy. The deal will expand QNB’s presence into Berks County and further solidify its position in Montgomery County, creating a combined network of 14 branches and three loan production offices. This expansion is anticipated to enhance QNB’s ability to serve a wider customer base and offer a more comprehensive suite of financial services.
QNB CEO Dave Freeman expressed enthusiasm for the merger, stating that the close alignment between the leadership teams and boards of both institutions will be instrumental in surpassing customer expectations. Victory CEO Joe Major echoed this sentiment, highlighting the shared vision and commitment to excellence that makes this partnership an exciting opportunity to build a dynamic community banking franchise in Pennsylvania.
The all-stock transaction is expected to be financially beneficial for both QNB and Victory shareholders. QNB anticipates the deal will be accretive to its earnings per share, with projections of 16% accretion in 2026 and 19% in 2027. For Victory shareholders, the transaction is expected to be more than 35% accretive to their projected 2026 earnings per share. Furthermore, Victory shareholders are expected to see their annual cash dividends more than double as a result of QNB’s projected dividend.
QNB’s Chief Financial Officer, Jeff Lehocky, noted that the transaction unlocks significant financial and strategic synergies, bringing the bank closer to $2.5 billion in assets and increasing its market capitalization. The expected tangible book value earn-back period is estimated to be approximately 3.3 years.
Following the completion of the merger, the combined bank and holding company will retain the QNB Bank brand and will be headquartered in Quakertown. Dave Freeman will continue to serve as President and CEO of the combined entity. QNB’s board of directors will be expanded from 10 to 12 members, with two new directors joining from Victory’s board, including Joe Major, who will assume the role of Vice Chairman.
The transaction is subject to customary closing conditions, including regulatory approvals and the approval of both QNB and Victory shareholders. The boards of directors of both companies have unanimously approved the merger agreement.