MOLINE, Ill., Jan. 24, 2008 (PRIME NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced earnings for 2007 of $5.8 million, and diluted earnings per share for common shareholders of $1.02, compared to earnings of $2.8 million or $.57 in diluted earnings per share in 2006. These results reflect an increase of $3.0 million in net income and $0.45 per share over 2006 results, improvements of 106% and 79%, respectively.
Earnings and earnings per share results for the fourth quarter of 2007 were $1.6 million and $0.29, respectively. For the same quarter one year ago, the Company reported earnings of $246 thousand, and earnings per share of $0.02. The Company's fourth quarter 2006 results were significantly impacted by an additional loan loss provision of $992 thousand due to a single lending relationship.
"We are very pleased with our continued progress on improving the Company's net interest margin, a fourth consecutive quarter of increased net income, and significantly improved earnings from one year ago," stated 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 recent focus has been on improved loan yields and expanded net interest margin results, with an expectation for more modest growth rates in loans and leases. We are pleased that our talented bankers have continued to generate new lending relationships and expand existing ones during this difficult climate for financial institutions."
During 2007, the Company's total assets increased 16%, or $205 million, to $1.48 billion from $1.27 billion at December 31, 2006. During 2007, loans/leases increased more than 15%, or $146 million, to $1.11 billion from $961 million at December 31, 2006. Total deposits increased during the year by $54 million, or 6%, to $929 million at December 31, 2007. Stockholders' equity increased to $86.1 million, as compared to $70.9 million at December 31, 2006. Approximately one-half of this increase was the net result of the Company's issuance of $7.5 million of Non-Cumulative Perpetual Preferred Stock in the fourth quarter.
Net interest income increased by $6.5 million, or nearly 22%, for 2007 over 2006 results as net interest margin improved sequentially during each quarter of 2007 to finish at 2.97% for the year, an increase of 10 basis points over 2006 results of 2.87%. Net interest margin for the fourth quarter was 3.07%, which represents a 7 basis point improvement from the prior quarter.
In addition, noninterest income increased $2.1 million, or nearly 18%, during 2007. The Company saw solid growth in trust fees, deposit service fees, investment advisory and management fees, and gains on sale of loans. Also contributing to improved noninterest income was the third quarter sale of the Company's 20% interest in Nobel Electronic Transfer, LLC that resulted in a net gain of $436 thousand.
A portion of the improved revenue results was offset by an increase in noninterest expense of $4.4 million for the year. The majority of the increased noninterest expense was the result of a $2.8 million increase in salary and benefits expense, a $685 thousand increase in professional and data processing fees, and a $409 thousand increase in FDIC and other insurance expense.
2007 results for 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 December 31, 2007, which was an increase of $34 million from $827 million at December 31, 2006. At December 31, 2007, Quad City Bank & Trust had net loans/leases of $633 million, which was nearly consistent with the December 31, 2006 level of $626 million, while deposits declined $40 million to $507 million. The bank realized 2007 earnings of $8.5 million for an improvement of $2.2 million, or 35%, from one year ago. * Cedar Rapids Bank & Trust, which opened in 2001, had total assets of $384 million at December 31, 2007, which was an increase of $41 million from December 31, 2006. At December 31, 2007, Cedar Rapids Bank & Trust had net loans of $286 million for an increase of $44 million from the end of 2006, while deposits of $259 million reflected an increase of $16 million for 2007. The bank realized year-to-date earnings of $2.4 million for an improvement of approximately $750 thousand, or 45%, from one year ago. * Rockford Bank & Trust, which opened in 2005, had total assets of $158 million at December 31, 2007, which was an increase of $67 million, or 74%, in Rockford market assets from December 31, 2006. At December 31, 2007, Rockford Bank & Trust had net loans of $129 million and deposits of $120 million, which represented increases from December 31, 2006 of 87% and 74%, respectively. After-tax net losses for 2007 were $850 thousand, which was a reduction of $250 thousand from the losses of $1.1 million in 2006. Rockford Bank & Trust made significant progress in reaching break-even during 2007, as the bank had positive net income in the fourth quarter before provision expense and taxes. Management expects 2008 earnings results to be modestly positive. * First Wisconsin Bank & Trust, which began operations in 2006 as a branch of Rockford Bank & Trust and was converted into the Company's fourth separate banking charter in February of 2007, had total assets of $71 million at December 31, 2007, which was an increase of $54 million in Milwaukee market assets from December 31, 2006. At December 31, 2007, First Wisconsin Bank & Trust had net loans of $49 million and deposits of $46 million. After-tax net losses for 2007 were $1.1 million. Management expects reduced First Wisconsin start up losses in 2008 as the bank makes progress in reaching break-even asset levels.
"Net income for 2007 improved $3.0 million over 2006 as the result of significant earnings improvements at Quad City Bank & Trust and Cedar Rapids Bank & Trust, combined with progress on attaining break-even levels of operating results at our two newest charters," noted Todd A. Gipple, Executive Vice President and Chief Financial Officer. "We were successful in growing total revenue by $8.6 million, or 20%, in 2007, while intentionally slowing our pace of asset growth from a compound annual growth rate of 22% in the prior five years, to 16% in 2007. We continue to see steady improvements in our net interest margin and have been successful in achieving these improved margins in a very difficult rate environment and an immensely competitive market for core deposits. While we are very pleased with our progress in 2007, we must continue to harvest the considerable investments we made in new charters, new branches and new people these past three years by taking a more modest approach to prospective asset growth and driving additional significant improvements in earnings per share."
Nonperforming assets at December 31, 2007 were $7.5 million, a decrease from $10.4 million at September 30, 2007, and decreased to 0.51% of total assets as compared to 0.58% of total assets at December 31, 2006. 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 1.09% at December 31, 2007, which was down slightly from 1.10% at December 31, 2006. In addition to the improved level of nonperforming assets in the fourth quarter, the Company experienced positive results on several watch-list credits, which resulted in reduced reserve requirements on these relationships. We are pleased with these results as we have not experienced degradation in our loan and lease portfolios due to the current factors impacting the national economy. We do not have any material direct exposure to sub-prime loan products as our residential real estate lending has been focused on secondary market conforming loan products to residential borrowers. Additionally, the economic environment in the local markets served by the Company's subsidiary banks has to date remained stable, however we do have modest exposure to residential and commercial real estate development. Like all financial institutions, our loan and lease portfolio is subject to changing general economic conditions and we will continue to closely monitor our portfolio during this period of economic uncertainty.
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)
As of
---------------------------------------
December 31, Sept 30, December 31,
2007 2007 2006
----------- ----------- -----------
(dollars in thousands,
except share data)
SELECTED BALANCE SHEET DATA
Total assets $ 1,476,564 $ 1,414,268 $ 1,271,675
Securities $ 235,905 $ 228,926 $ 194,774
Total loans/leases $ 1,106,900 $ 1,052,949 $ 960,747
Allowance for estimated
loan/lease losses $ 12,024 $ 11,896 $ 10,612
Total deposits $ 929,427 $ 895,490 $ 875,447
Total stockholders' equity $ 86,066 $ 75,780 $ 70,883
Common stockholders' equity $ 65,908 $ 62,906 $ 57,998
Common shares outstanding 4,597,744 4,592,148 4,560,629
Book value per common share $ 14.33 $ 13.70 $ 12.72
Closing stock price $ 14.25 $ 14.50 $ 17.66
Market capitalization $ 65,518 $ 66,586 $ 80,541
Market price/book value 99.41% 105.85% 138.87%
Full time equivalent employees 350 353 329
Tier 1 leverage capital ratio 7.40% 6.87% 7.21%
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
---------------------------------------
December 31, September 30, December 31,
2007 2007 2006
----------- ----------- -----------
(dollars in thousands)
ANALYSIS OF LOAN DATA
Nonaccrual loans/leases $ 6,488 $ 7,025 $ 6,538
Accruing loans/leases past
due 90 days or more 500 3,413 755
Other real estate owned 496 -- 93
----------- ----------- -----------
Total nonperforming assets $ 7,484 $ 10,438 $ 7,386
Net charge-offs (calendar
year-to-date) $ 1,452 $ 985 $ 1,556
Loan/lease mix:
Commercial loans $ 867,666 $ 828,132 $ 747,231
Direct financing leases 68,732 66,517 53,765
Residential real estate
loans 84,337 80,064 81,482
Installment and other
consumer loans 86,165 78,236 78,269
----------- ----------- -----------
Total loans/leases $ 1,106,900 $ 1,052,949 $ 960,747
ANALYSIS OF DEPOSIT DATA
Deposit mix:
Noninterest-bearing $ 165,286 $ 128,413 $ 124,184
Interest-bearing 764,141 767,077 751,263
----------- ----------- -----------
Total deposits $ 929,427 $ 895,490 $ 875,447
Interest-bearing deposit mix:
Nonmaturity deposits $ 347,385 $ 341,131 $ 334,009
Certificates of deposit 363,195 374,256 345,847
Brokered certificates of
deposit 53,561 51,690 71,407
----------- ----------- -----------
Total interest-bearing
deposits $ 764,141 $ 767,077 $ 751,263
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Twelve Months
For the Quarter Ended Ended
---------------------------------- ----------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
---------- ---------- ---------- ---------- ----------
(dollars in
thousands,
except per
share data)
SELECTED
INCOME
STATEMENT
DATA
Interest
income $ 22,635 $ 22,102 $ 19,339 $ 85,725 $ 68,803
Interest
expense 12,725 12,791 11,496 49,356 38,907
---------- ---------- ---------- ---------- ----------
Net
interest
income 9,910 9,311 7,843 36,369 29,896
Provision
for loan/
lease
losses 596 1,037 1,660 2,864 3,284
---------- ---------- ---------- ---------- ----------
Net
interest
income
after
provision
for loan/
lease
losses 9,314 8,274 6,183 33,505 26,612
Noninterest
income 3,508 3,858 2,848 14,093 11,983
Noninterest
expense 10,371 9,875 8,786 39,037 34,669
---------- ---------- ---------- ---------- ----------
Income
before
taxes 2,451 2,257 245 8,561 3,926
Minority
interest
in income
of consoli-
dated
subsidiary 137 17 119 388 266
Income tax
expense 704 646 (120) 2,396 858
---------- ---------- ---------- ---------- ----------
Net income $ 1,610 $ 1,594 $ 246 $ 5,777 $ 2,802
Preferred
stock
dividends 268 268 164 1,072 164
---------- ---------- ---------- ---------- ----------
Net income
available
to common
stock-
holders $ 1,342 $ 1,326 $ 82 $ 4,705 $ 2,638
Earnings
per
common
share
(basic) $ 0.29 $ 0.29 $ 0.02 $ 1.03 $ 0.57
Earnings
per
common
share
(diluted) $ 0.29 $ 0.29 $ 0.02 $ 1.02 $ 0.57
Earnings
per
common
share
(basic)
LTM* $ 1.03 $ 0.76 $ 0.57
AVERAGE
BALANCES
Assets $1,426,079 $1,372,453 $1,254,010 $1,351,481 $1,153,537
Deposits $ 919,614 $ 880,845 $ 871,735 $ 883,625 $ 804,633
Loans/
leases $1,067,103 $1,032,302 $ 942,218 $1,019,830 $ 855,872
Total
stock-
holders'
equity $ 79,782 $ 74,880 $ 63,366 $ 75,018 $ 57,763
Common
stock-
holders'
equity $ 66,592 $ 62,006 $ 56,921 $ 62,064 $ 55,780
KEY RATIOS
Return on
average
assets
(annual-
ized) 0.45% 0.46% 0.08% 0.43% 0.24%
Return on
average
common
equity
(annual-
ized) 9.67% 10.28% 1.73% 9.31% 5.02%
Price
earnings
ratio LTM* 13.83 19.08 30.98 13.83 30.98
Net
interest
margin
(TEY) 3.07% 3.00% 2.78% 2.97% 2.87%
Non-
performing
assets /
total
assets 0.51% 0.74% 0.58% 0.51% 0.58%
Net charge-
offs /
average
loans/
leases 0.14% 0.10% 0.16% 0.14% 0.18%
Allowance /
total
loans/
leases 1.09% 1.13% 1.10% 1.09% 1.10%
Efficiency
ratio 77.29% 74.99% 82.18% 77.36% 82.78%
* LTM: Last twelve months
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Twelve
For the Quarter Ended Months Ended
------------------------------- --------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
--------- --------- --------- --------- ---------
(dollars in
thousands,
except share
data)
ANALYSIS OF
NONINTEREST
INCOME
Merchant credit
card fees, net
of processing
costs $ 483 $ 443 $ 484 $ 1,732 $ 1,948
Trust department
fees 959 925 739 3,743 3,050
Deposit service
fees 749 706 506 2,711 1,928
Gain on sales of
loans, net 254 277 279 1,220 992
Securities gains
(losses), net -- -- -- -- (143)
Gains (losses)
on sale of
foreclosed
assets -- -- 14 1 664
Gains on sales
of other assets -- 436 -- 436 --
Earnings on
cash surrender
value of life
insurance 231 261 194 892 759
Investment
advisory and
management fees 442 369 267 1,576 1,216
Other 390 441 365 1,782 1,569
--------- --------- --------- --------- ---------
Total
noninterest
income $ 3,508 $ 3,858 $ 2,848 $ 14,093 $ 11,983
ANALYSIS OF
NONINTEREST
EXPENSE
Salaries and
employee
benefits $ 6,460 $ 6,155 $ 5,591 $ 24,087 $ 21,263
Professional and
data processing
fees 1,095 889 753 3,877 3,192
Advertising and
marketing 412 322 351 1,356 1,368
Occupancy and
equipment
expense 1,285 1,297 934 5,009 4,763
Stationery and
supplies 160 159 174 613 671
Postage and
telephone 251 263 246 1,020 961
Bank service
charges 151 145 154 580 584
FDIC and Other
Insurance 313 295 164 1,021 612
(Gains) losses
on disposal of
fixed assets (16) -- 36 223 36
Other 260 350 383 1,251 1,219
--------- --------- --------- --------- ---------
Total
noninterest
expenses $ 10,371 $ 9,875 $ 8,786 $ 39,037 $ 34,669
WEIGHTED AVERAGE
SHARES
Common shares
outstanding(a) 4,596,788 4,591,576 4,559,513 4,581,919 4,609,626
Incremental
shares from
assumed
conversion:
Options and
Employee Stock
Purchase Plan 11,239 7,830 41,862 17,649 43,603
--------- --------- --------- --------- ---------
Adjusted
weighted
average
shares(b) 4,608,027 4,599,406 4,601,375 4,599,568 4,653,229
(a) Denominator for Basic Earnings Per Share
(b) Denominator for Diluted Earnings Per Share