MOLINE, Ill., Oct. 26, 2007 (PRIME NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced earnings for the third quarter ended September 30, 2007 were $1.6 million, resulting in diluted earnings per share for common shareholders of $0.29. Earnings and earnings per share results for the second quarter of 2007 were $1.3 million and $0.23, respectively. For the same quarter one year ago, the Company reported earnings of $520 thousand, and earnings per share of $0.11.
Through the first nine months of 2007, the Company's total assets increased at an annualized rate of nearly 15%, or $143 million, to $1.41 billion from $1.27 billion at December 31, 2006. During this same period, net loans/leases increased at an annualized rate of more than 12%, or $91 million, to $1.04 billion from $950 million at December 31, 2006. Total deposits increased during the nine month period by $20 million to $895 million at September 30, 2007 when compared to $875 million at December 31, 2006. Stockholders' equity increased to $75.8 million at September 30, 2007 as compared to $70.9 million at December 31, 2006.
Quarter-to-quarter net interest income increased by $498 thousand, or nearly 6%, as net interest margin improved for the third consecutive quarter to 3.00%, which represents a 6 basis point improvement from the prior quarter.
In addition, noninterest income increased $259 thousand, or 7%, from the prior quarter. As previously announced in July 2007, the Company sold its 20% interest in Nobel Electronic Transfer, LLC which resulted in a net gain of approximately $430 thousand. Partially offsetting this one-time gain were reductions in gains on sales of loans and other miscellaneous noninterest income.
A portion of the improved revenue results was offset by increases in the provision for loan losses of $212 thousand and in noninterest expenses of $287 thousand. The quarter-to-quarter increase in provision for loan losses was primarily the result of a charge-off on a lease receivable at M2 Lease Funds, LLC. The 3% increase in noninterest expenses from quarter-to-quarter was primarily due to increases in salaries and employee benefits.
"We are pleased with our continued progress on improving the Company's net interest margin, a third consecutive quarter of increased net income, and significantly improved earnings from one year ago," stated Mr. Douglas M. Hultquist, President and CEO. "Additionally, we continue to see solid loan and lease growth in our Cedar Rapids, Rockford and Milwaukee markets. Our ability to grow loans and leases through the third quarter of this year at an annualized rate of 12% was a very positive result as we have been focusing on improved loan yields during the first nine months of 2007."
Third quarter results of the Company's primary subsidiaries were as follows:
* Quad City Bank & Trust, the Company's first subsidiary bank, had total consolidated assets of $861 million at September 30, 2007, which was an increase of $34 million from $827 million at December 31, 2006. At September 30, 2007, Quad City Bank & Trust had net loans/leases of $629 million, which was nearly consistent with the December 31, 2006 level, while deposits declined $40 million to $507 million. The bank realized year-to-date earnings of $6.2 million for an improvement of $1.4 million, or 29%, from one year ago.
* Cedar Rapids Bank & Trust, which opened in 2001, had total assets of $368 million at September 30, 2007, which was an increase of $25 million from December 31, 2006. At the end of the third quarter of 2007, Cedar Rapids Bank & Trust had net loans of $273 million for an increase of $31 million from the end of 2006, while deposits of $252 million reflected an increase of $9 million since year-end. The bank realized year-to-date earnings of $1.8 million for an improvement of $606 thousand, or 52%, from one year ago.
* Rockford Bank & Trust, which opened in 2005, had total assets of $139 million at September 30, 2007, which was an increase of $48 million, or 53%, in Rockford market assets from December 31, 2006. At the end of the third quarter of 2007, Rockford Bank & Trust had net loans of $109 million and deposits of $106 million, which represented increases from December 31, 2006 of 59% and 54%, respectively. After-tax net losses for Rockford Bank & Trust for the third quarter of 2007 were $259 thousand, which was a reduction of $10 thousand from the losses of $269 thousand for the second quarter of 2007. At September 30, 2007, year-to-date losses were $767 thousand for an improvement of $580 thousand, or 43%, from one year ago.
* First Wisconsin Bank & Trust, which began operations in 2006 as a branch of Rockford Bank & Trust, had total assets of $48 million at September 30, 2007, which was an increase of $31 million in Milwaukee market assets from December 31, 2006. At the end of the third quarter of 2007, First Wisconsin Bank & Trust had net loans of $33 million or an increase of 104% in the Milwaukee market from the end of 2006 and deposits of $31 million or an increase of 87% in the Milwaukee market since year-end. After-tax net losses for First Wisconsin Bank & Trust for the third quarter of 2007 were $229 thousand, which was a decrease of $74 thousand from the losses of $303 thousand for the second quarter of 2007.
"Net income for the first nine months of 2007 improved $1.6 million over the same period one year ago," noted Mr. Todd A. Gipple, Executive Vice President and Chief Financial Officer. "More significantly, net interest income increased by $4.4 million, or 20%, and noninterest income increased by more than $1.4 million, or 16%, from a year ago. We continue to see steady improvements in our net interest margin and have been successful in achieving these improved margins while maintaining solid double-digit growth in loans and leases. In addition, we have experienced significant increases in fee income from deposit services, trust accounts and investment advisory and management services. Our talented bankers continue to build exceptional customer relationships in each of our geographic markets."
Nonperforming assets at September 30, 2007 were $10.4 million, an increase from $7.4 million at June 30, 2007 and now represent 0.74% of total assets. The majority of the increase in NPA's for the quarter was due to a single relationship that is still on full interest accrual but is more than 90-days past due. The customer has brought the interest current on these borrowings but the Company has not renewed the notes while closely monitoring the credit. Management believes that the borrowings are well collateralized and as a result the Company has not provided significant reserves for this relationship. The Company did make a modest increase in the provision for loan and lease losses in the third quarter as compared to the second quarter provision expense due primarily to the charge off of a lease at M2 Lease Funds. Maintaining credit quality remains a strong focus and management regularly monitors the Company's loan/lease portfolio and the level of allowance for loan/lease losses. The Company's allowance for loan/lease losses to total loans/leases was 1.13% at September 30, 2007, which was down slightly from 1.15% at June 30, 2007.
QCR Holdings, Inc., headquartered in Moline, Illinois, is a multi-bank holding company, which serves the Quad City, Cedar Rapids, Rockford and Milwaukee communities through its wholly owned subsidiary banks. Quad City Bank and Trust Company, which is based in Bettendorf, Iowa and commenced operations in 1994, Cedar Rapids Bank and Trust Company, which is based in Cedar Rapids, Iowa and commenced operations in 2001, Rockford Bank and Trust Company, which is based in Rockford, Illinois and commenced operations in 2005, and First Wisconsin Bank & Trust, which began operations in 2007, provide full-service commercial and consumer banking and trust and asset management services. The Company also engages in credit card processing through its wholly owned subsidiary, Quad City Bancard, Inc., based in Moline, Illinois and commercial leasing through its 80% owned subsidiary, M2 Lease Funds, LLC, based in Milwaukee, Wisconsin.
Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "predict," "suggest," "appear," "plan," "intend," "estimate," "annualize," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of any future terrorist threats and attacks, and the response of the United States to any such threats and attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of our strategy to establish denovo banks in new markets; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(dollars in thousands,
except share data)
As of
----------------------------------------------------
September 30, June 30, December 31, September 30,
2007 2007 2006 2006
---------- ---------- ---------- ----------
SELECTED BALANCE
SHEET DATA
Total assets $1,414,268 $1,332,886 $1,271,675 $1,241,258
Securities $ 228,926 $ 204,645 $ 194,774 $ 188,304
Total loans/
leases $1,052,949 $1,015,766 $ 960,747 $ 942,968
Allowance for
estimated
loan/lease
losses $ 11,896 $ 11,681 $ 10,612 $ 10,435
Total
deposits $ 895,490 $ 857,666 $ 875,447 $ 873,253
Total
stockholders'
equity $ 75,780 $ 72,514 $ 70,883 $ 57,629
Common
stockholders'
equity $ 62,906 $ 59,640 $ 57,998 $ 57,629
Common shares
outstanding 4,592,148 4,581,376 4,560,629 4,554,054
Book value
per common
share $ 13.70 $ 13.02 $ 12.72 $ 12.65
Closing stock
price $ 14.50 $ 15.86 $ 17.66 $ 17.30
Market
capitalization $ 66,586 $ 72,661 $ 80,541 $ 78,785
Market price/
book value 105.85% 121.83% 138.87% 136.71%
Full time
equivalent
employees 353 334 329 338
Tier 1
leverage
capital ratio 6.87% 6.99% 7.21% 6.10%
QCR HOLDINGS INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(dollars in thousands)
As of
-------------------------------------------------
September 30, June 30, December 31, September 30,
2007 2007 2006 2006
---------- ---------- ---------- ----------
ANALYSIS OF
LOAN DATA
Nonaccrual
loans/leases $ 7,025 $ 6,721 $ 6,538 $ 7,834
Accruing
loans/leases
past due 90
days or more 3,413 637 755 230
Other real
estate owned -- -- 93 306
---------- ---------- ---------- ----------
Total
nonperforming
assets $ 10,438 $ 7,358 $ 7,386 $ 8,370
Net
charge-offs
(calendar
year-to-date) $ 985 $ 162 $ 1,556 $ 73
Loan/lease
mix:
Commercial
loans $ 828,132 $ 792,175 $ 747,231 $ 738,542
Direct
financing
leases 66,517 62,678 53,765 48,275
Residential
real
estate
loans 80,064 83,162 81,482 79,454
Installment
and other
consumer
loans 78,236 77,751 78,269 76,697
---------- ---------- ---------- ----------
Total loans/
leases $1,052,949 $1,015,766 $ 960,747 $ 942,968
ANALYSIS OF
DEPOSIT DATA
Deposit mix:
Noninterest-
bearing $ 128,413 $ 118,997 $ 124,184 $ 114,921
Interest-
bearing 767,077 738,669 751,263 758,332
---------- ---------- ---------- ----------
Total
deposits $ 895,490 $ 857,666 $ 875,447 $ 873,253
Interest-
bearing
deposit mix:
Nonmaturity
deposits $ 341,131 $ 338,746 $ 334,009 $ 330,428
Certificates
of deposit 374,256 340,270 345,847 354,474
Brokered
certificates
of deposit 51,690 59,653 71,407 73,430
---------- ---------- ---------- ----------
Total
interest-
bearing
deposits $ 767,077 $ 738,669 $ 751,263 $ 758,332
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended
---------------------------------------
September 30, June 30, September 30,
2007 2007 2006
---------- ---------- ----------
(dollars in thousands, except per share data)
SELECTED INCOME
STATEMENT DATA
Interest income $ 22,102 $ 21,046 $ 18,373
Interest expense 12,791 12,233 10,689
---------- ---------- ----------
Net interest income 9,311 8,813 7,684
Provision for loan/lease
losses 1,037 825 729
---------- ---------- ----------
Net interest income after
provision for loan/lease
losses 8,274 7,988 6,955
Noninterest income 3,858 3,599 2,742
Noninterest expense 9,875 9,588 9,007
---------- ---------- ----------
Income before taxes 2,257 1,999 690
Minority interest in income
of consolidated subsidiary 17 143 45
Income tax expense 646 545 125
---------- ---------- ----------
Net income $ 1,594 $ 1,311 $ 520
Preferred stock dividends 268 268 --
---------- ---------- ----------
Net income available to
common stockholders $ 1,326 $ 1,043 $ 520
Earnings per common share
(basic) $ 0.29 $ 0.23 $ 0.11
Earnings per common share
(diluted) $ 0.29 $ 0.23 $ 0.11
Earnings per common share
(basic) LTM* $ 0.76 $ 0.58 $ 0.83
AVERAGE BALANCES
Assets $1,372,453 $1,321,244 $1,197,906
Deposits $ 880,845 $ 868,436 $ 848,205
Loans/leases $1,032,302 $1,004,869 $ 899,621
Total stockholders' equity $ 74,880 $ 73,374 $ 56,790
Common stockholders' equity $ 62,006 $ 60,500 $ 56,790
KEY RATIOS
Return on average assets
(annualized) 0.46% 0.40% 0.17%
Return on average common
equity (annualized) 10.28% 8.67% 3.66%
Price earnings ratio LTM * 19.08 27.34 20.84
Net interest margin (TEY) 3.00% 2.94% 2.84%
Nonperforming assets /
total assets 0.74% 0.55% 0.67%
Net charge-offs / average
loans/leases 0.10% 0.02% 0.00%
Allowance / total
loans/leases 1.13% 1.15% 1.11%
Efficiency ratio 74.99% 77.25% 86.39%
*LTM: Last twelve months
For the Nine Months Ended
----------------------------
September 30, September 30,
2007 2006
---------- ----------
SELECTED INCOME
STATEMENT DATA
Interest income $ 63,090 $ 49,464
Interest expense 36,631 27,411
---------- ----------
Net interest income 26,459 22,053
Provision for loan/lease
losses 2,268 1,624
---------- ----------
Net interest income after
provision for loan/lease
losses 24,191 20,429
Noninterest income 10,585 9,135
Noninterest expense 28,666 25,883
---------- ----------
Income before taxes 6,110 3,681
Minority interest in income
of consolidated subsidiary 251 147
Income tax expense 1,692 978
---------- ----------
Net income $ 4,167 $ 2,556
Preferred stock dividends 804 --
---------- ----------
Net income available to
common stockholders $ 3,363 $ 2,556
Earnings per common share
(basic) $ 0.73 $ 0.55
Earnings per common share
(diluted) $ 0.73 $ 0.55
AVERAGE BALANCES
Assets $1,326,616 $1,120,047
Deposits $ 871,627 $ 782,265
Loans/leases $1,004,073 $ 827,091
Total stockholders' equity $ 73,329 $ 55,896
Common stockholders' equity $ 60,452 $ 55,896
KEY RATIOS
Return on average assets
(annualized) 0.42% 0.30%
Return on average common
equity (annualized) 9.19% 6.10%
Price earnings ratio LTM * 19.08 20.84
Net interest margin (TEY) 2.94% 2.90%
Nonperforming assets /
total assets 0.74% 0.67%
Net charge-offs / average
loans/leases 0.10% 0.01%
Allowance / total
loans/leases 1.13% 1.11%
Efficiency ratio 77.38% 82.99%
*LTM: Last twelve months
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(dollars in thousands, except share data)
For the Quarter Ended
--------------------------------------
September 30, June 30, September 30,
2007 2007 2006
---------- ---------- ----------
ANALYSIS OF NONINTEREST INCOME
Merchant credit card fees, net
of processing costs $ 443 $ 424 $ 477
Trust department fees 925 940 788
Deposit service fees 706 677 478
Gain on sales of loans, net 277 414 219
Securities gains (losses), net 437 -- 71
Gains (losses) on sale of
foreclosed assets -- (1) (100)
Earnings on cash surrender value
of life insurance 261 196 152
Investment advisory and
management fees 369 389 286
Other 440 560 371
---------- ---------- ----------
Total noninterest income $ 3,858 $ 3,599 $ 2,742
ANALYSIS OF NONINTEREST EXPENSE
Salaries and employee benefits $ 6,155 $ 5,917 $ 5,511
Professional and data
processing fees 889 964 880
Advertising and marketing 322 384 390
Occupancy and equipment expense 1,297 1,208 1,304
Stationery and supplies 159 140 160
Postage and telephone 263 253 242
Bank service charges 145 142 151
FDIC and Other Insurance 295 246 161
Loss on disposal of fixed assets -- -- --
Other 350 334 208
---------- ---------- ----------
Total noninterest expenses $ 9,875 $ 9,588 $ 9,007
WEIGHTED AVERAGE SHARES
Common shares outstanding (a) 4,591,576 4,574,648 4,553,589
Incremental shares from
assumed conversion:
Options and Employee Stock
Purchase Plan 7,830 26,307 37,240
---------- ---------- ----------
Adjusted weighted
average shares (b) 4,599,406 4,600,955 4,590,829
For the Nine Months Ended
--------------------------
September 30, September 30,
2007 2006
----------- -----------
ANALYSIS OF NONINTEREST INCOME
Merchant credit card fees, net of
processing costs $ 1,249 $ 1,464
Trust department fees 2,784 2,311
Deposit service fees 1,962 1,422
Gain on sales of loans, net 966 712
Securities gains (losses), net 437 (143)
Gains (losses) on sale of
foreclosed assets 1 650
Earnings on cash surrender value of
life insurance 661 565
Investment advisory and management fees 1,134 950
Other 1,391 1,204
----------- -----------
Total noninterest income $ 10,585 $ 9,135
ANALYSIS OF NONINTEREST EXPENSE
Salaries and employee benefits $ 17,627 $ 16,253
Professional and data processing fees 2,782 2,439
Advertising and marketing 944 1,017
Occupancy and equipment expense 3,724 3,829
Stationery and supplies 453 497
Postage and telephone 769 715
Bank service charges 429 430
FDIC and Other Insurance 708 448
Loss on disposal of fixed assets 239 --
Other 991 255
----------- -----------
Total noninterest expenses $ 28,666 $ 25,883
WEIGHTED AVERAGE SHARES
Common shares outstanding (a) 4,576,963 4,605,776
Incremental shares from assumed
conversion:
Options and Employee Stock
Purchase Plan 19,828 44,212
----------- -----------
Adjusted weighted average shares (b) 4,596,791 4,649,988
(a) Denominator for Basic Earnings Per Share
(b) Denominator for Diluted Earnings Per Share