Third Quarter 2019 Highlights
- Net income of $15.1 million, or $0.94 per diluted share
- Adjusted net income (non-GAAP) of $15.9 million, or $1.00 per diluted share
- Expanded NIM and NIM (TEY)(non-GAAP) each by 12 basis points, to 3.37% and 3.52%, respectively
- Record noninterest income of $19.9 million for the quarter and $49.0 million year-to-date
- Definitive agreement to sell Rockford Bank & Trust (“RB&T”) to Heartland Financial USA, Inc.
- Excluding RB&T held for sale assets and liabilities:
º Annualized loan and lease growth was 9.1% for the quarter and 9.4% year-to-date
º Deposits were down 1.7% on a linked quarter basis and up 9.6% annualized year-to-date
º Nonperforming assets were down $2.5 million, or 15.6% from the prior quarter
MOLINE, Ill., Oct. 23, 2019 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $15.1 million and diluted earnings per share (“EPS”) of $0.94 for the third quarter of 2019, compared to net income of $13.5 million and diluted EPS of $0.85 for the second quarter of 2019. The third quarter results included $0.7 million of post-acquisition compensation, transition and integration costs (after-tax), compared to $0.6 million of similar costs in the second quarter of 2019. Excluding these expenses and some modest cost for early debt extinguishment, the Company reported adjusted net income (non-GAAP) of $15.9 million and adjusted diluted EPS of $1.00 for the third quarter of 2019, compared to adjusted net income (non-GAAP) of $14.1 million and adjusted diluted EPS of $0.88 for the second quarter of 2019. For the third quarter of 2018, net income and diluted EPS were $8.8 million and $0.55, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $10.4 million and $0.65, respectively.
| For the Quarter Ended | ||||||
| September 30, | June 30, | September 30, | ||||
| $ in millions (except per share data) | 2019 | 2019 | 2018 | |||
| Net Income | $ | 15.1 | $ | 13.5 | $ | 8.8 |
| Diluted EPS | $ | 0.94 | $ | 0.85 | $ | 0.55 |
| Adjusted Net Income (non-GAAP)(1) | $ | 15.9 | $ | 14.1 | $ | 10.4 |
| Adjusted Diluted EPS (non-GAAP)(1) | $ | 1.00 | $ | 0.88 | $ | 0.65 |
| (1) See GAAP to non-GAAP reconciliations. | ||||||
“We are very pleased with our results for the third quarter,” commented Larry J. Helling, Chief Executive Officer. “We delivered another record quarter of net income, driven by continued strong loan growth, an expanded net interest margin, record fee income, improved credit quality and careful management of noninterest expenses. Despite the highly competitive lending environment, which has led to industry-wide pressure on rates, we have been able to maintain both our pricing and underwriting discipline. This helped us maintain our loan yields even as we grew loans during the quarter. We continue to attract new clients that appreciate our relationship-based community banking model.”
Agreement to sell Rockford Bank & Trust to Heartland Financial USA
On August 13, 2019 the Company announced that it had entered into a definitive agreement with Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Heartland Financial USA, Inc. to sell to IB&T substantially all of the assets and for IB&T to assume substantially all of the deposits and certain other liabilities of RB&T. The transaction is valued at approximately $59 million and the Company is expected to record an approximate $13 million pre-tax gain on the sale excluding costs. The transaction is expected to close in the fourth quarter of 2019. As a result, substantially all of RB&T’s assets and liabilities are classified as held for sale as of September 30, 2019, which impacts balance sheet comparisons to prior quarters.
Annualized Loan and Lease Growth of 9.1%, excluding RB&T
During the third quarter of 2019, the Company’s total assets increased $97.5 million to a total of $5.3 billion. Total loans and leases declined by $300.2 million, entirely as a result of classifying substantially all of RB&T’s loans as held for sale, totaling $368.5 million, gross. Excluding RB&T’s loans for both the second and third quarters of 2019, total loans and leases grew by $80.3 million, or 2.3% on a linked quarter basis.
Total deposits declined by $520.3 million mainly as a result of classifying substantially all of RB&T’s liabilities as held for sale, which included deposits of $451.5 million. Excluding RB&T’s deposits for both the second and third quarters of 2019, total deposits declined by $67.1 million, driven primarily by a decline in higher cost public funds and brokered CDs, as the Company intentionally did not renew certain deposits as they matured. At quarter-end, the percentage of wholesale funds to total assets was 11.6%, as compared to 10.0% in the second quarter. Additionally, at quarter-end, the percentage of gross loans and leases to total assets, excluding assets held for sale, remained consistent on a linked quarter basis at 75%.
“Our loan and lease growth during the third quarter was driven by solid production from both our core commercial lending business and our Specialty Finance Group,” added Mr. Helling. “Excluding RB&T, loan and lease growth for the first nine months of 2019 has been 9.4% on an annualized basis, and given our solid pipeline, we remain confident that we will be able to achieve organic loan growth of between 8% and 10% for the full year.”
Record Net Interest Income of $40.7 million
Net interest income for the third quarter of 2019 totaled $40.7 million, compared to $38.0 million for the second quarter of 2019 and $38.3 million for the third quarter of 2018. The increase was due to growth in average interest earning assets of $93.3 million, or 2.0% on a linked quarter basis, combined with the positive impact of a 12 basis point increase in reported net interest margin. Acquisition-related net accretion totaled $1.3 million (pre-tax) for the third quarter of 2019, compared to $1.1 million for the second quarter of 2019 and was $1.7 million for the third quarter of 2018. Adjusted net interest income (non-GAAP) was $41.2 million for the third quarter of 2019, compared to $38.7 million for the second quarter of 2019 and $38.2 million for the third quarter of 2018.
In the third quarter, reported net interest margin was 3.37% and, on a tax-equivalent yield basis, net interest margin was 3.52%, both increasing by 12 basis points from the second quarter of 2019. Net interest margin, excluding acquisition-related net accretion was 3.41%, up 10 basis points from the second quarter. The increase in adjusted net interest margin during the quarter was due to a 5 basis point increase in the yield on interest earning assets combined with a 5 basis point decline in the total cost of interest-bearing funds (due to both mix and rate).
| For the Quarter Ended | ||||
| September 30, | June 30, | |||
| 2019 | 2019 | |||
| NIM | 3.37 | % | 3.25 | % |
| NIM (TEY)(non-GAAP)(1) | 3.52 | % | 3.40 | % |
| Adjusted NIM (TEY)(non-GAAP)(1) | 3.41 | % | 3.31 | % |
| (1) See GAAP to non-GAAP reconciliations. | ||||
“Our significant focus on expanding our net interest margin generated positive results as we produced a 12 basis-point increase in reported margin during the third quarter,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “While total deposits declined on a linked-quarter basis after excluding RB&T, it was mainly driven by an intentional runoff of higher cost public funds and brokered CDs, as our core deposits grew modestly during the quarter. Our organic loan and lease growth during the quarter was primarily funded by the excess liquidity that resulted from the strong increase in core deposits we generated in the first half of the year.”
Record Noninterest Income of $19.9 million
Noninterest income for the third quarter of 2019 totaled $19.9 million, compared to $17.1 million for the second quarter of 2019. The increase was primarily due to a $1.9 million increase in swap fee income and $0.9 million increase on gains on the sale of residential real estate loans and the government guaranteed portions of loans. Wealth management revenue was $4.1 million for the quarter, comparable to the second quarter of 2019. Noninterest income has increased 126% when compared to the third quarter of 2018.
“Noninterest income increased 17% from the second quarter, driven primarily by another quarterly record for swap fee income. This fee income is correlated to strong production from our Specialty Finance Group in the area of tax credit project lending, where our clients are locking in long-term fixed rate financing. Swap fee income and gains on the sale of government guaranteed loans totaled $21.5 million for the first nine months of 2019, already putting us well in excess of our initial full-year target of $8 to $12 million,” added Mr. Gipple.
Noninterest Expenses of $39.9 million
Noninterest expense for the third quarter of 2019 totaled $39.9 million, compared to $36.6 million and $30.5 million for the second quarter of 2019 and third quarter of 2018, respectively. The linked quarter increase was due to a number of factors, including a $0.9 million increase in net costs of operations of other real estate, as the Company reduced the carrying value of an OREO property by $2.0 million. There was also an additional $1.5 million of bonus and commission expense in the quarter, driven by the strong financial results and higher than anticipated swap fee income.
Asset Quality Remains Solid
Nonperforming assets (“NPAs”) totaled $13.1 million, a decrease of $10.1 million from the second quarter of 2019. Excluding RB&T NPAs held for sale, the decline was $2.5 million, or 15.6%. The decrease was primarily due to the $2.0 million write down of an existing OREO property. The lower NPAs resulted in the ratio of NPAs to total assets improving to 0.27% (excluding RB&T) at September 30, 2019, compared to 0.45% at June 30, 2019 and 0.87% at September 30, 2018.
The Company’s provision for loan and lease losses totaled $2.0 million for the third quarter of 2019, which was up modestly from $1.9 million from the prior quarter and down significantly from $6.2 million in the third quarter of 2018. The linked quarter increase in the provision for loan and lease losses was primarily due to $488 thousand of provision related to an RB&T nonperforming loan held for sale. As of September 30, 2019, the Company’s allowance to total loans and leases was 1.00%, which was down from 1.05% at June 30, 2019 and down from 1.18% at September 30, 2018.
In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date. Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount ($7.7 million at September 30, 2019).
Strong Capital Levels
As of September 30, 2019, the Company’s total risk-based capital ratio was 11.93%, the common equity tier 1 ratio was 8.91%, and the tangible common equity to tangible assets ratio was 8.20%. By comparison, these respective ratios were 12.04%, 8.93% and 8.05% as of June 30, 2019.
Continued Focus on Seven Key Initiatives
The Company continues to focus on the following long-term initiatives in an effort to improve profitability and drive increased shareholder value:
- Strong organic loan and lease growth in order to maintain loans and leases to total assets ratio in the range of 73% - 78%
- Grow core deposits to maintain reliance on wholesale funding at less than 15% of assets
- Generate gains on sale of government guaranteed loans, and fee income on interest rate swaps, as a significant and consistent component of core revenue
- Grow wealth management net income by 10% annually
- Carefully manage noninterest expense growth
- Maintain asset quality metrics at better than peer levels
- Participate as an acquirer in the consolidation taking place in our industry to further boost return on average assets, improve efficiency ratio, and increase EPS
Conference Call Details
The Company will host an earnings call/webcast tomorrow, October 24, 2019, at 10:00 a.m. Central Time. Dial-in information for the call is toll free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through November 7, 2019. The replay access information is 877-344-7529 (international 412-317-0088); access code 10135244. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.
About Us
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, Springfield and Rockford communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Rockford Bank & Trust Company, based in Rockford, Illinois, commenced operations in 2005, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 27 locations in Illinois, Iowa, Wisconsin and Missouri. As of September 30, 2019, the Company had approximately $5.3 billion in assets, $3.6 billion in loans and $3.8 billion in deposits. For additional information, please visit our website at www.qcrh.com.
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, state, national and international economies (including the impact of tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations); (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) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (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.
Contacts:
Todd A. Gipple
President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com
Christopher J. Lindell
Executive Vice President
Corporate Communications
(319) 743-7006
clindell@qcrh.com
| QCR Holdings, Inc. Consolidated | ||||||||||||||
| Financial Highlights | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Held for Sale | ||||||||||||||
| As of | As of | |||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | |||||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | 2019 | |||||||||
| (dollars in thousands) | ||||||||||||||
| CONDENSED BALANCE SHEET | ||||||||||||||
| Cash and due from banks | $ | 91,671 | $ | 87,919 | $ | 76,527 | $ | 85,523 | $ | 73,407 | $ | 11,031 | ||
| Federal funds sold and interest-bearing deposits | 197,263 | 205,497 | 216,032 | 159,596 | 129,660 | 2,415 | ||||||||
| Securities | 555,409 | 643,803 | 655,749 | 662,969 | 650,745 | 66,009 | ||||||||
| Net loans/leases | 3,574,154 | 3,869,415 | 3,758,268 | 3,692,907 | 3,610,309 | 362,011 | ||||||||
| Intangibles | 15,529 | 16,089 | 16,918 | 17,450 | 16,137 | - | ||||||||
| Goodwill | 77,748 | 77,748 | 77,872 | 77,832 | 73,618 | - | ||||||||
| Other assets | 315,061 | 294,381 | 265,296 | 253,433 | 238,856 | 24,081 | ||||||||
| Assets held for sale | 465,547 | - | - | - | - | - | ||||||||
| Total assets | $ | 5,292,382 | $ | 5,194,852 | $ | 5,066,662 | $ | 4,949,710 | $ | 4,792,732 | $ | 465,547 | ||
| Total deposits | $ | 3,802,241 | $ | 4,322,510 | $ | 4,194,220 | $ | 3,977,031 | $ | 3,788,277 | $ | 451,546 | ||
| Total borrowings | 320,457 | 230,953 | 282,994 | 404,968 | 483,635 | 16,157 | ||||||||
| Other liabilities | 179,411 | 137,089 | 101,041 | 94,573 | 63,433 | 2,827 | ||||||||
| Liabilities held for sale | 470,530 | - | - | - | - | - | ||||||||
| Total stockholders' equity | 519,743 | 504,300 | 488,407 | 473,138 | 457,387 | - | ||||||||
| Total liabilities and stockholders' equity | $ | 5,292,382 | $ | 5,194,852 | $ | 5,066,662 | $ | 4,949,710 | $ | 4,792,732 | $ | 470,530 | ||
| ANALYSIS OF LOAN PORTFOLIO | ||||||||||||||
| Loan/lease mix: | ||||||||||||||
| Commercial and industrial loans | $ | 1,469,978 | $ | 1,548,657 | $ | 1,479,247 | $ | 1,429,410 | $ | 1,380,543 | ||||
| Commercial real estate loans | 1,687,922 | 1,837,473 | 1,790,845 | 1,766,111 | 1,727,326 | |||||||||
| Direct financing leases | 92,307 | 101,180 | 108,543 | 117,969 | 126,752 | |||||||||
| Residential real estate loans | 245,667 | 293,479 | 288,502 | 290,759 | 309,288 | |||||||||
| Installment and other consumer loans | 106,540 | 120,947 | 123,087 | 119,381 | 100,191 | |||||||||
| Deferred loan/lease origination costs, net of fees | 7,856 | 8,783 | 9,208 | 9,124 | 9,286 | |||||||||
| Total loans/leases | $ | 3,610,270 | $ | 3,910,519 | $ | 3,799,432 | $ | 3,732,754 | $ | 3,653,386 | ||||
| Less allowance for estimated losses on loans/leases | 36,116 | 41,104 | 41,164 | 39,847 | 43,077 | |||||||||
| Net loans/leases | $ | 3,574,154 | $ | 3,869,415 | $ | 3,758,268 | $ | 3,692,907 | $ | 3,610,309 | ||||
| ANALYSIS OF SECURITIES PORTFOLIO | ||||||||||||||
| Securities mix: | ||||||||||||||
| U.S. government sponsored agency securities | $ | 21,268 | $ | 35,762 | $ | 35,843 | $ | 36,411 | $ | 36,492 | ||||
| Municipal securities | 391,329 | 440,853 | 450,376 | 459,409 | 453,275 | |||||||||
| Residential mortgage-backed and related securities | 123,880 | 159,228 | 161,692 | 159,249 | 155,733 | |||||||||
| Other securities | 18,932 | 7,960 | 7,838 | 7,900 | 5,245 | |||||||||
| Total securities | $ | 555,409 | $ | 643,803 | $ | 655,749 | $ | 662,969 | $ | 650,745 | ||||
| ANALYSIS OF DEPOSITS | ||||||||||||||
| Deposit mix: | ||||||||||||||
| Noninterest-bearing demand deposits | $ | 782,232 | $ | 795,951 | $ | 821,599 | $ | 791,101 | $ | 802,090 | ||||
| Interest-bearing demand deposits | 2,245,557 | 2,505,956 | 2,334,474 | 2,204,206 | 2,094,814 | |||||||||
| Time deposits | 536,352 | 733,135 | 719,286 | 704,903 | 615,323 | |||||||||
| Brokered deposits | 238,100 | 287,468 | 318,861 | 276,821 | 276,050 | |||||||||
| Total deposits | $ | 3,802,241 | $ | 4,322,510 | $ | 4,194,220 | $ | 3,977,031 | $ | 3,788,277 | ||||
| ANALYSIS OF BORROWINGS | ||||||||||||||
| Borrowings mix: | ||||||||||||||
| Term FHLB advances | $ | 60,000 | $ | 46,433 | $ | 66,380 | $ | 76,327 | $ | 63,399 | ||||
| Overnight FHLB advances (1) | 135,800 | 59,300 | 59,800 | 190,165 | 295,730 | |||||||||
| Wholesale structured repurchase agreements | - | - | 35,000 | 35,000 | 35,000 | |||||||||
| Customer repurchase agreements | 2,421 | 2,181 | 3,056 | 2,084 | 3,049 | |||||||||
| Federal funds purchased | 16,105 | 17,010 | 12,830 | 26,690 | 8,670 | |||||||||
| Subordinated notes | 68,334 | 68,274 | 68,215 | 4,782 | - | |||||||||
| Junior subordinated debentures | 37,797 | 37,755 | 37,713 | 37,670 | 37,626 | |||||||||
| Other borrowings | - | - | - | 32,250 | 40,161 | |||||||||
| Total borrowings | $ | 320,457 | $ | 230,953 | $ | 282,994 | $ | 404,968 | $ | 483,635 | ||||
| (1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 2.09%. | ||||||||||||||
| QCR Holdings, Inc. Consolidated | |||||||||||||||||
| Financial Highlights | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| For the Quarter Ended | |||||||||||||||||
| September 30, | June 30, | March 31 | December 31, | September 30, | |||||||||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | |||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||
| INCOME STATEMENT | |||||||||||||||||
| Interest income | $ | 56,817 | $ | 54,181 | $ | 52,102 | $ | 52,703 | $ | 49,831 | |||||||
| Interest expense | 16,098 | 16,168 | 15,194 | 13,110 | 11,517 | ||||||||||||
| Net interest income | 40,719 | 38,013 | 36,908 | 39,593 | 38,314 | ||||||||||||
| Provision for loan/lease losses | 2,012 | 1,941 | 2,134 | 1,611 | 6,206 | ||||||||||||
| Net interest income after provision for loan/lease losses | $ | 38,707 | $ | 36,072 | $ | 34,774 | $ | 37,982 | $ | 32,108 | |||||||
| Trust department fees | $ | 2,340 | $ | 2,361 | $ | 2,493 | $ | 2,216 | $ | 2,196 | |||||||
| Investment advisory and management fees | 1,782 | 1,888 | 1,736 | 1,657 | 1,059 | ||||||||||||
| Deposit service fees | 1,813 | 1,658 | 1,554 | 1,623 | 1,656 | ||||||||||||
| Gain on sales of residential real estate loans, net | 890 | 489 | 369 | 361 | 337 | ||||||||||||
| Gain on sales of government guaranteed portions of loans, net | 519 | 39 | 31 | - | 46 | ||||||||||||
| Swap fee income | 9,797 | 7,891 | 3,198 | 7,069 | 1,110 | ||||||||||||
| Securities losses, net | (3 | ) | (52 | ) | - | - | - | ||||||||||
| Earnings on bank-owned life insurance | 489 | 412 | 540 | 341 | 474 | ||||||||||||
| Debit card fees | 886 | 914 | 792 | 807 | 846 | ||||||||||||
| Correspondent banking fees | 189 | 172 | 216 | 179 | 195 | ||||||||||||
| Other | 1,204 | 1,293 | 1,064 | 1,026 | 890 | ||||||||||||
| Total noninterest income | $ | 19,906 | $ | 17,065 | $ | 11,993 | $ | 15,279 | $ | 8,809 | |||||||
| Salaries and employee benefits | $ | 24,215 | $ | 22,749 | $ | 20,879 | $ | 19,779 | $ | 17,433 | |||||||
| Occupancy and equipment expense | 3,860 | 3,533 | 3,694 | 3,367 | 3,318 | ||||||||||||
| Professional and data processing fees | 4,030 | 3,031 | 2,750 | 3,577 | 2,396 | ||||||||||||
| Acquisition costs | - | - | - | (4 | ) | 1,292 | |||||||||||
| Post-acquisition compensation, transition and integration costs | 884 | 708 | 134 | 1,427 | 494 | ||||||||||||
| FDIC insurance, other insurance and regulatory fees | 542 | 926 | 964 | 1,065 | 933 | ||||||||||||
| Loan/lease expense | 221 | 312 | 214 | 624 | 369 | ||||||||||||
| Net cost of (income from) and gains/losses on operations of other real estate | 2,078 | 1,182 | 298 | 2,477 | (50 | ) | |||||||||||
| Advertising and marketing | 1,056 | 1,037 | 785 | 1,122 | 984 | ||||||||||||
| Bank service charges | 502 | 508 | 483 | 469 | 462 | ||||||||||||
| Losses on debt extinguishment, net | 148 | - | - | - | - | ||||||||||||
| Correspondent banking expense | 209 | 206 | 204 | 207 | 205 | ||||||||||||
| Intangibles amortization | 560 | 615 | 532 | 540 | 542 | ||||||||||||
| Other | 1,640 | 1,753 | 1,498 | 1,760 | 2,122 | ||||||||||||
| Total noninterest expense | $ | 39,945 | $ | 36,560 | $ | 32,435 | $ | 36,410 | $ | 30,500 | |||||||
| Net income before income taxes | $ | 18,668 | $ | 16,577 | $ | 14,332 | $ | 16,851 | $ | 10,417 | |||||||
| Federal and state income tax expense | 3,573 | 3,073 | 1,414 | 3,535 | 1,608 | ||||||||||||
| Net income | $ | 15,095 | $ | 13,504 | $ | 12,918 | $ | 13,316 | $ | 8,809 | |||||||
| Basic EPS | $ | 0.96 | $ | 0.86 | $ | 0.82 | $ | 0.85 | $ | 0.56 | |||||||
| Diluted EPS | $ | 0.94 | $ | 0.85 | $ | 0.81 | $ | 0.84 | $ | 0.55 | |||||||
| Weighted average common shares outstanding | 15,739,430 | 15,714,588 | 15,693,345 | 15,641,401 | 15,625,123 | ||||||||||||
| Weighted average common and common equivalent shares outstanding | 15,976,742 | 15,938,377 | 15,922,940 | 15,898,591 | 15,922,324 | ||||||||||||
| QCR Holdings, Inc. Consolidated | ||||||||
| Financial Highlights | ||||||||
| (Unaudited) | ||||||||
| For the Nine Months Ended | ||||||||
| September 30, | September 30, | |||||||
| 2019 | 2018 | |||||||
| (dollars in thousands, except per share data) | ||||||||
| INCOME STATEMENT | ||||||||
| Interest income | $ | 163,099 | $ | 130,175 | ||||
| Interest expense | 47,459 | 27,374 | ||||||
| Net interest income | 115,640 | 102,801 | ||||||
| Provision for loan/lease losses | 6,087 | 11,046 | ||||||
| Net interest income after provision for loan/lease losses | $ | 109,553 | $ | 91,755 | ||||
| Trust department fees | $ | 7,194 | $ | 6,491 | ||||
| Investment advisory and management fees | 5,406 | 3,069 | ||||||
| Deposit service fees | 5,025 | 4,797 | ||||||
| Gain on sales of residential real estate loans | 1,748 | 539 | ||||||
| Gain on sales of government guaranteed portions of loans | 589 | 405 | ||||||
| Swap fee income | 20,886 | 3,718 | ||||||
| Securities losses, net | (56 | ) | - | |||||
| Earnings on bank-owned life insurance | 1,441 | 1,292 | ||||||
| Debit card fees | 2,591 | 2,456 | ||||||
| Correspondent banking fees | 578 | 673 | ||||||
| Other | 3,562 | 2,822 | ||||||
| Total noninterest income | $ | 48,964 | $ | 26,262 | ||||
| Salaries and employee benefits | $ | 67,843 | $ | 49,215 | ||||
| Occupancy and equipment expense | 11,087 | 9,517 | ||||||
| Professional and data processing fees | 9,811 | 8,016 | ||||||
| Acquisition costs | - | 1,799 | ||||||
| Post-acquisition compensation, transition and integration costs | 1,727 | 659 | ||||||
| FDIC insurance, other insurance and regulatory fees | 2,432 | 2,529 | ||||||
| Loan/lease expense | 748 | 920 | ||||||
| Net cost of (income from) and gains/losses on operations of other real estate | 3,557 | 11 | ||||||
| Advertising and marketing | 2,878 | 2,430 | ||||||
| Bank service charges | 1,494 | 1,368 | ||||||
| Losses on debt extinguishment, net | 148 | - | ||||||
| Correspondent banking expense | 619 | 614 | ||||||
| Intangibles amortization | 1,706 | 1,151 | ||||||
| Other | 4,891 | 4,504 | ||||||
| Total noninterest expense | $ | 108,941 | $ | 82,733 | ||||
| Net income before income taxes | $ | 49,576 | $ | 35,284 | ||||
| Federal and state income tax expense | 8,059 | 5,480 | ||||||
| Net income | $ | 41,517 | $ | 29,804 | ||||
| Basic EPS | $ | 2.64 | $ | 2.06 | ||||
| Diluted EPS | $ | 2.60 | $ | 2.02 | ||||
| Weighted average common shares outstanding | 15,715,788 | 14,477,783 | ||||||
| Weighted average common and common equivalent shares outstanding | 15,946,020 | 14,786,777 | ||||||
| QCR Holdings, Inc. | ||||||||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| As of and for the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||||
| COMMON SHARE DATA | ||||||||||||||||||||||
| Common shares outstanding | 15,790,462 | 15,772,939 | 15,755,442 | 15,718,208 | 15,673,760 | |||||||||||||||||
| Book value per common share (1) | $ | 32.91 | $ | 31.97 | $ | 31.00 | $ | 30.10 | $ | 29.18 | ||||||||||||
| Tangible book value per common share (2) | $ | 27.01 | $ | 26.02 | $ | 24.98 | $ | 24.04 | $ | 23.46 | ||||||||||||
| Closing stock price | $ | 37.98 | $ | 34.87 | $ | 33.92 | $ | 32.09 | $ | 40.85 | ||||||||||||
| Market capitalization | $ | 599,722 | $ | 550,002 | $ | 534,425 | $ | 504,397 | $ | 640,273 | ||||||||||||
| Market price / book value | 115.40 | % | 109.06 | % | 109.42 | % | 106.61 | % | 139.98 | % | ||||||||||||
| Market price / tangible book value | 140.61 | % | 134.00 | % | 135.77 | % | 133.49 | % | 174.16 | % | ||||||||||||
| Earnings per common share (basic) LTM (3) | $ | 3.49 | $ | 3.10 | $ | 2.99 | $ | 2.92 | $ | 2.79 | ||||||||||||
| Price earnings ratio LTM (3) | 10.88 x | 11.25 x | 11.34 x | 10.98 x | 14.64 x | |||||||||||||||||
| TCE / TA (4) | 8.20 | % | 8.05 | % | 7.92 | % | 7.78 | % | 7.82 | % | ||||||||||||
| CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||||||||||||||
| Beginning balance | $ | 504,300 | $ | 488,407 | $ | 473,138 | $ | 457,387 | $ | 369,588 | ||||||||||||
| Net income | 15,095 | 13,504 | 12,918 | 13,316 | 8,809 | |||||||||||||||||
| Other comprehensive income (loss), net of tax | 543 | 2,243 | 2,343 | 1,943 | (612 | ) | ||||||||||||||||
| Common stock cash dividends declared | (944 | ) | (942 | ) | (942 | ) | (939 | ) | (938 | ) | ||||||||||||
| Proceeds from issuance of 1,689,561 shares of common stock, net of costs, as a result of the acquisition of Springfield First Community Bank | - | - | - | - | 80,063 | |||||||||||||||||
| Proceeds from issuance of 23,501 shares of common stock, net of costs, as a result of the acquisition of Bates Companies | - | - | - | 1,000 | - | |||||||||||||||||
| Other (5) | 749 | 1,088 | 950 | 431 | 477 | |||||||||||||||||
| Ending balance | $ | 519,743 | $ | 504,300 | $ | 488,407 | $ | 473,138 | $ | 457,387 | ||||||||||||
| REGULATORY CAPITAL RATIOS (6): | ||||||||||||||||||||||
| Total risk-based capital ratio | 11.93 | % | 12.04 | % | 12.26 | % | 10.69 | % | 10.87 | % | ||||||||||||
| Tier 1 risk-based capital ratio | 9.70 | % | 9.76 | % | 9.87 | % | 9.77 | % | 9.83 | % | ||||||||||||
| Tier 1 leverage capital ratio | 9.02 | % | 8.96 | % | 8.90 | % | 8.87 | % | 8.87 | % | ||||||||||||
| Common equity tier 1 ratio | 8.91 | % | 8.93 | % | 9.02 | % | 8.89 | % | 8.92 | % | ||||||||||||
| KEY PERFORMANCE RATIOS AND OTHER METRICS | ||||||||||||||||||||||
| Return on average assets (annualized) | 1.16 | % | 1.06 | % | 1.04 | % | 1.10 | % | 0.75 | % | 1.09 | % | 0.94 | % | ||||||||
| Return on average total equity (annualized) | 11.70 | % | 10.84 | % | 10.71 | % | 11.42 | % | 8.08 | % | 11.09 | % | 10.30 | % | ||||||||
| Net interest margin | 3.37 | % | 3.25 | % | 3.25 | % | 3.48 | % | 3.46 | % | 3.29 | % | 3.45 | % | ||||||||
| Net interest margin (TEY) (Non-GAAP)(7) | 3.52 | % | 3.40 | % | 3.40 | % | 3.63 | % | 3.60 | % | 3.43 | % | 3.59 | % | ||||||||
| Efficiency ratio (Non-GAAP) (8) | 65.89 | % | 66.38 | % | 66.33 | % | 66.35 | % | 64.72 | % | 66.18 | % | 64.10 | % | ||||||||
| Gross loans and leases / total assets (10) | 74.80 | % | 75.28 | % | 74.99 | % | 75.41 | % | 76.23 | % | 74.80 | % | 76.23 | % | ||||||||
| Gross loans and leases / total deposits (10) | 94.95 | % | 90.47 | % | 90.59 | % | 93.86 | % | 96.44 | % | 94.95 | % | 96.44 | % | ||||||||
| Effective tax rate | 19.14 | % | 18.54 | % | 9.87 | % | 20.98 | % | 15.44 | % | 16.26 | % | 15.53 | % | ||||||||
| Full-time equivalent employees (9) | 766 | 773 | 771 | 755 | 728 | 766 | 728 | |||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||
| Assets | $ | 5,217,763 | $ | 5,077,900 | $ | 4,968,502 | $ | 4,842,232 | $ | 4,677,875 | $ | 5,088,055 | $ | 4,242,083 | ||||||||
| Loans/leases | 3,962,464 | 3,839,674 | 3,759,615 | 3,699,885 | 3,612,648 | 3,853,918 | 3,236,514 | |||||||||||||||
| Deposits | 4,302,995 | 4,271,391 | 4,110,868 | 3,986,236 | 3,840,077 | 4,228,418 | 3,474,213 | |||||||||||||||
| Total stockholders' equity | 516,195 | 498,263 | 482,423 | 466,271 | 436,065 | 498,960 | 385,874 | |||||||||||||||
| (1) Includes accumulated other comprehensive income (loss). | ||||||||||||||||||||||
| (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets. | ||||||||||||||||||||||
| (3) LTM : Last twelve months. | ||||||||||||||||||||||
| (4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations. | ||||||||||||||||||||||
| (5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation. | ||||||||||||||||||||||
| (6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release. | ||||||||||||||||||||||
| (7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||||
| (8) See GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||||
| (9) Growth in full-time equivalents due primarily to the merger with Springfield Bancshares, Inc., the acquisition of the Bates Companies and the addition of several | ||||||||||||||||||||||
| new positions created to build scale. | ||||||||||||||||||||||
| (10) Excludes assets held for sale as of September 30, 2019. | ||||||||||||||||||||||
| QCR Holdings, Inc. Consolidated | ||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| ANALYSIS OF NET INTEREST INCOME AND MARGIN (4) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| September 30, 2019 | June 30, 2019 | September 30, 2018 | ||||||||||||||||||
| Average Balance | Interest Earned or Paid | Average Yield or Cost | Average Balance | Interest Earned or Paid | Average Yield or Cost | Average Balance | Interest Earned or Paid | Average Yield or Cost | ||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Fed funds sold | $ | 7,234 | $ | 42 | 2.30 | % | $ | 9,690 | $ | 56 | 2.32 | % | $ | 23,199 | $ | 105 | 1.80 | % | ||
| Interest-bearing deposits at financial institutions | 172,386 | 951 | 2.19 | % | 182,651 | 1,168 | 2.56 | % | 61,815 | 323 | 2.07 | % | ||||||||
| Securities (1) | 626,471 | 6,080 | 3.85 | % | 644,999 | 6,062 | 3.77 | % | 667,142 | 5,973 | 3.55 | % | ||||||||
| Restricted investment securities | 22,719 | 293 | 5.12 | % | 21,007 | 290 | 5.54 | % | 22,683 | 330 | 5.77 | % | ||||||||
| Loans (1) | 3,962,464 | 51,214 | 5.13 | % | 3,839,674 | 48,413 | 5.06 | % | 3,612,648 | 44,648 | 4.90 | % | ||||||||
| Total earning assets (1) | $ | 4,791,274 | $ | 58,580 | 4.85 | % | $ | 4,698,021 | $ | 55,989 | 4.78 | % | $ | 4,387,487 | $ | 51,379 | 4.65 | % | ||
| Interest-bearing deposits | $ | 2,505,383 | $ | 7,907 | 1.25 | % | $ | 2,461,768 | $ | 8,271 | 1.35 | % | $ | 2,214,480 | $ | 5,432 | 0.97 | % | ||
| Time deposits | 975,736 | 5,486 | 2.23 | % | 1,013,391 | 5,554 | 2.20 | % | 825,020 | 3,290 | 1.58 | % | ||||||||
| Short-term borrowings | 17,333 | 98 | 2.24 | % | 16,145 | 81 | 2.01 | % | 21,407 | 78 | 1.45 | % | ||||||||
| Federal Home Loan Bank advances | 123,107 | 1,023 | 3.30 | % | 76,154 | 601 | 3.17 | % | 209,111 | 1,422 | 2.70 | % | ||||||||
| Other borrowings | - | - | 0.00 | % | 10,550 | 92 | 3.50 | % | 74,503 | 776 | 4.13 | % | ||||||||
| Subordinated debentures | 68,299 | 1,003 | 5.83 | % | 68,239 | 993 | 5.84 | % | - | - | 0.00 | % | ||||||||
| Junior subordinated debentures | 37,774 | 581 | 6.10 | % | 37,731 | 576 | 6.12 | % | 37,600 | 519 | 5.48 | % | ||||||||
| Total interest-bearing liabilities | $ | 3,727,632 | $ | 16,098 | 1.71 | % | $ | 3,683,978 | $ | 16,168 | 1.76 | % | $ | 3,382,121 | $ | 11,517 | 1.35 | % | ||
| Net interest income / spread (1) | $ | 42,482 | 3.14 | % | $ | 39,821 | 3.02 | % | $ | 39,862 | 3.30 | % | ||||||||
| Net interest margin (2) | 3.37 | % | 3.25 | % | 3.46 | % | ||||||||||||||
| Net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.52 | % | 3.40 | % | 3.60 | % | ||||||||||||||
| Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.41 | % | 3.31 | % | 3.45 | % | ||||||||||||||
| For the Nine Months Ended | ||||||||||||||||||||
| September 30, 2019 | September 30, 2018 | |||||||||||||||||||
| Average Balance | Interest Earned or Paid | Average Yield or Cost | Average Balance | Interest Earned or Paid | Average Yield or Cost | |||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Fed funds sold | $ | 10,887 | $ | 191 | 2.35 | % | $ | 20,488 | $ | 223 | 1.46 | % | ||||||||
| Interest-bearing deposits at financial institutions | 170,167 | 3,042 | 2.39 | % | 55,408 | 749 | 1.81 | % | ||||||||||||
| Securities (1) | 643,975 | 18,237 | 3.79 | % | 654,818 | 17,391 | 3.55 | % | ||||||||||||
| Restricted investment securities | 21,670 | 891 | 5.50 | % | 21,871 | 776 | 4.74 | % | ||||||||||||
| Loans (1) | 3,853,918 | 145,682 | 5.05 | % | 3,236,514 | 115,365 | 4.77 | % | ||||||||||||
| Total earning assets (1) | $ | 4,700,617 | $ | 168,043 | 4.78 | % | $ | 3,989,099 | $ | 134,504 | 4.51 | % | ||||||||
| Interest-bearing deposits | $ | 2,418,420 | $ | 23,351 | 1.29 | % | $ | 1,987,371 | $ | 12,541 | 0.84 | % | ||||||||
| Time deposits | 1,000,529 | 16,346 | 2.18 | % | 702,441 | 7,591 | 1.44 | % | ||||||||||||
| Short-term borrowings | 15,952 | 275 | 2.30 | % | 19,234 | 186 | 1.29 | % | ||||||||||||
| Federal Home Loan Bank advances | 115,539 | 2,685 | 3.11 | % | 206,875 | 3,267 | 2.11 | % | ||||||||||||
| Other borrowings | 18,084 | 512 | 3.79 | % | 68,742 | 2,315 | 4.50 | % | ||||||||||||
| Subordinated debentures | 58,392 | 2,561 | 5.86 | % | - | - | 0.00 | % | ||||||||||||
| Junior subordinated debentures | 37,730 | 1,729 | 6.13 | % | 37,556 | 1,474 | 5.25 | % | ||||||||||||
| Total interest-bearing liabilities | $ | 3,664,646 | $ | 47,459 | 1.73 | % | $ | 3,022,219 | $ | 27,374 | 1.21 | % | ||||||||
| Net interest income / spread (1) | $ | 120,584 | 3.05 | % | $ | 107,130 | 3.30 | % | ||||||||||||
| Net interest margin (2) | 3.29 | % | 3.45 | % | ||||||||||||||||
| Net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.43 | % | 3.59 | % | ||||||||||||||||
| Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.33 | % | 3.49 | % | ||||||||||||||||
| (1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. | ||||||||||||||||||||
| (2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented. | ||||||||||||||||||||
| (3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||
| (4) Interest earning assets and interest bearing liabilities classified as held for sale as of September 30, 2019 are included in the calculations above. | ||||||||||||||||||||
| QCR Holdings, Inc. Consolidated | |||||||||||||||
| Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| As of | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES | |||||||||||||||
| Beginning balance | $ | 41,104 | $ | 41,164 | $ | 39,847 | $ | 43,077 | $ | 37,545 | |||||
| Allowance related to held for sale loans | (6,062 | ) | - | - | - | - | |||||||||
| Provision charged to expense (2) | 1,524 | 1,941 | 2,134 | 1,611 | 6,206 | ||||||||||
| Loans/leases charged off | (739 | ) | (2,152 | ) | (1,059 | ) | (4,967 | ) | (991 | ) | |||||
| Recoveries on loans/leases previously charged off | 289 | 151 | 242 | 126 | 317 | ||||||||||
| Ending balance | $ | 36,116 | $ | 41,104 | $ | 41,164 | $ | 39,847 | $ | 43,077 | |||||
| NONPERFORMING ASSETS | |||||||||||||||
| Nonaccrual loans/leases | $ | 8,231 | $ | 13,148 | $ | 13,406 | $ | 14,260 | $ | 23,576 | |||||
| Accruing loans/leases past due 90 days or more | - | 58 | 61 | 632 | 1,410 | ||||||||||
| Troubled debt restructures - accruing | 763 | 1,313 | 3,794 | 3,659 | 4,240 | ||||||||||
| Total nonperforming loans/leases | 8,994 | 14,519 | 17,261 | 18,551 | 29,226 | ||||||||||
| Other real estate owned | 4,248 | 8,637 | 9,110 | 9,378 | 12,204 | ||||||||||
| Other repossessed assets | - | - | - | 8 | 150 | ||||||||||
| Total nonperforming assets | $ | 13,242 | $ | 23,156 | $ | 26,371 | $ | 27,937 | $ | 41,580 | |||||
| ASSET QUALITY RATIOS | |||||||||||||||
| Nonperforming assets / total assets (3) | 0.27 | % | 0.45 | % | 0.52 | % | 0.56 | % | 0.87 | % | |||||
| Allowance / total loans/leases (1) | 1.00 | % | 1.05 | % | 1.08 | % | 1.07 | % | 1.18 | % | |||||
| Allowance / nonperforming loans/leases (1) | 401.56 | % | 283.10 | % | 238.48 | % | 214.80 | % | 147.39 | % | |||||
| Net charge-offs as a % of average loans/leases | 0.01 | % | 0.05 | % | 0.02 | % | 0.13 | % | 0.02 | % | |||||
| (1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios. | |||||||||||||||
| (2) Excludes provision related to loans included in assets held for sale of $488 thousand for the quarter ending September 30, 2019. | |||||||||||||||
| (3) Excludes assets held for sale as of September 30, 2019. | |||||||||||||||
| QCR Holdings, Inc. Consolidated | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| For the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||||
| SELECT FINANCIAL DATA - SUBSIDIARIES | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||
| TOTAL ASSETS | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,642,950 | $ | 1,637,115 | $ | 1,579,327 | ||||||||||||||||
| m2 Lease Funds, LLC | 232,432 | 234,072 | 235,214 | |||||||||||||||||||
| Cedar Rapids Bank and Trust | 1,592,896 | 1,527,521 | 1,354,294 | |||||||||||||||||||
| Community State Bank - Ankeny | 801,596 | 806,704 | 734,536 | |||||||||||||||||||
| Springfield First Community Bank | 693,897 | 671,644 | 623,520 | |||||||||||||||||||
| TOTAL DEPOSITS | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,371,721 | $ | 1,434,467 | $ | 1,288,387 | ||||||||||||||||
| Cedar Rapids Bank and Trust | 1,271,828 | 1,283,151 | 1,086,908 | |||||||||||||||||||
| Community State Bank - Ankeny | 695,980 | 705,777 | 586,929 | |||||||||||||||||||
| Springfield First Community Bank | 484,225 | 471,340 | 439,669 | |||||||||||||||||||
| TOTAL LOANS & LEASES | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,290,195 | $ | 1,273,400 | $ | 1,195,380 | ||||||||||||||||
| m2 Lease Funds, LLC | 230,061 | 230,676 | 232,846 | |||||||||||||||||||
| Cedar Rapids Bank and Trust | 1,148,952 | 1,100,823 | 1,046,053 | |||||||||||||||||||
| Community State Bank - Ankeny | 594,227 | 597,486 | 538,723 | |||||||||||||||||||
| Springfield First Community Bank | 526,466 | 515,566 | 480,969 | |||||||||||||||||||
| TOTAL LOANS & LEASES / TOTAL DEPOSITS | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | 94 | % | 89 | % | 93 | % | ||||||||||||||||
| Cedar Rapids Bank and Trust | 90 | % | 86 | % | 96 | % | ||||||||||||||||
| Community State Bank - Ankeny | 85 | % | 85 | % | 92 | % | ||||||||||||||||
| Springfield First Community Bank | 109 | % | 109 | % | 109 | % | ||||||||||||||||
| TOTAL LOANS & LEASES / TOTAL ASSETS | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | 79 | % | 78 | % | 76 | % | ||||||||||||||||
| Cedar Rapids Bank and Trust | 72 | % | 72 | % | 77 | % | ||||||||||||||||
| Community State Bank - Ankeny | 74 | % | 74 | % | 73 | % | ||||||||||||||||
| Springfield First Community Bank | 76 | % | 77 | % | 77 | % | ||||||||||||||||
| ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | 1.07 | % | 1.06 | % | 1.11 | % | ||||||||||||||||
| m2 Lease Funds, LLC | 1.39 | % | 1.38 | % | 1.50 | % | ||||||||||||||||
| Cedar Rapids Bank and Trust (2) | 1.17 | % | 1.19 | % | 1.26 | % | ||||||||||||||||
| Community State Bank - Ankeny (2) | 1.13 | % | 1.09 | % | 1.01 | % | ||||||||||||||||
| Springfield First Community Bank (2) | 0.42 | % | 0.37 | % | 0.10 | % | ||||||||||||||||
| RETURN ON AVERAGE ASSETS | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | 1.33 | % | 1.22 | % | 1.36 | % | 1.25 | % | 1.34 | % | ||||||||||||
| Cedar Rapids Bank and Trust | 2.04 | % | 1.95 | % | 1.47 | % | 1.85 | % | 1.46 | % | ||||||||||||
| Community State Bank - Ankeny | 1.71 | % | 1.17 | % | 1.43 | % | 1.33 | % | 1.27 | % | ||||||||||||
| Springfield First Community Bank | 1.32 | % | 1.37 | % | 1.51 | % | 1.27 | % | 1.51 | % | ||||||||||||
| NET INTEREST MARGIN PERCENTAGE (3) | ||||||||||||||||||||||
| Quad City Bank and Trust (1) | 3.49 | % | 3.29 | % | 3.38 | % | 3.34 | % | 3.45 | % | ||||||||||||
| Cedar Rapids Bank and Trust (5) | 3.41 | % | 3.41 | % | 3.53 | % | 3.41 | % | 3.58 | % | ||||||||||||
| Community State Bank - Ankeny (4) | 4.83 | % | 4.08 | % | 4.40 | % | 4.32 | % | 4.38 | % | ||||||||||||
| Springfield First Community Bank (6) | 3.64 | % | 4.10 | % | 4.36 | % | 3.93 | % | 4.36 | % | ||||||||||||
| ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET | ||||||||||||||||||||||
| INTEREST MARGIN, NET | ||||||||||||||||||||||
| Cedar Rapids Bank and Trust | $ | 229 | $ | 71 | $ | 158 | $ | 444 | $ | 610 | ||||||||||||
| Community State Bank - Ankeny | 649 | 76 | 445 | 783 | 1,331 | |||||||||||||||||
| Springfield First Community Bank | 432 | 971 | 1,119 | 2,313 | 1,119 | |||||||||||||||||
| QCR Holdings, Inc. (7) | (42 | ) | (42 | ) | (45 | ) | (127 | ) | (139 | ) | ||||||||||||
| (1) | Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Lease Funds, LLC | |||||||||||||||||||||
| is also presented separately for certain (applicable) measurements. | ||||||||||||||||||||||
| (2) | Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio. | |||||||||||||||||||||
| (3) | Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using | |||||||||||||||||||||
| a 21% tax rate. | ||||||||||||||||||||||
| (4) | Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest | |||||||||||||||||||||
| margin would have been 4.46% for the quarter ended September 30, 2019, 4.01% for the quarter ended June 30, 2019 and 4.11% for the | ||||||||||||||||||||||
| quarter ended September 30, 2018. | ||||||||||||||||||||||
| (5) | Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest | |||||||||||||||||||||
| margin would have been 3.34% for the quarter ended September 30, 2019, 3.39% for the quarter ended June 30, 2019 and 3.48% for the | ||||||||||||||||||||||
| quarter ended September 30, 2018. | ||||||||||||||||||||||
| (6) | Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest | |||||||||||||||||||||
| margin would have been 3.16% for the quarter ended September 30, 2019, 3.39% for the quarter ended June 30, 2019 and 3.45% for the | ||||||||||||||||||||||
| quarter ended September 30, 2018. | ||||||||||||||||||||||
| (7) | Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013. | |||||||||||||||||||||
| QCR Holdings, Inc. | |||||||||||||||||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| September 30, | June 30 | March 31 | December 31, | September 30, | |||||||||||||||||||||||||
| GAAP TO NON-GAAP RECONCILIATIONS | 2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
| TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1) | |||||||||||||||||||||||||||||
| Stockholders' equity (GAAP) | $ | 519,743 | $ | 504,300 | $ | 488,407 | $ | 473,138 | $ | 457,387 | |||||||||||||||||||
| Less: Intangible assets | 93,277 | 93,837 | 94,790 | 95,282 | 89,755 | ||||||||||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 426,466 | $ | 410,463 | $ | 393,617 | $ | 377,856 | $ | 367,632 | |||||||||||||||||||
| Total assets (GAAP) | $ | 5,292,382 | $ | 5,194,852 | $ | 5,066,662 | $ | 4,949,710 | $ | 4,792,732 | |||||||||||||||||||
| Less: Intangible assets | 93,277 | 93,837 | 94,790 | 95,282 | 89,755 | ||||||||||||||||||||||||
| Tangible assets (non-GAAP) | $ | 5,199,105 | $ | 5,101,015 | $ | 4,971,872 | $ | 4,854,428 | $ | 4,702,977 | |||||||||||||||||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 8.20 | % | 8.05 | % | 7.92 | % | 7.78 | % | 7.82 | % | |||||||||||||||||||
| For the Quarter Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, | June 30, | March 31 | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||||
| ADJUSTED NET INCOME (2) | 2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | ||||||||||||||||||||||
| Net income (GAAP) | $ | 15,095 | $ | 13,504 | $ | 12,918 | $ | 13,316 | $ | 8,809 | $ | 41,517 | $ | 29,804 | |||||||||||||||
| Less nonrecurring items (post-tax) (3): | |||||||||||||||||||||||||||||
| Income: | |||||||||||||||||||||||||||||
| Securities gains, net | (2 | ) | $ | (41 | ) | $ | - | $ | - | $ | - | $ | (43 | ) | $ | - | |||||||||||||
| Total nonrecurring income (non-GAAP) | $ | (2 | ) | $ | (41 | ) | $ | - | $ | - | $ | - | $ | (43 | ) | $ | - | ||||||||||||
| Expense: | |||||||||||||||||||||||||||||
| Losses on debt extinguishment, net | $ | 117 | $ | - | $ | - | $ | - | $ | - | $ | 117 | $ | - | |||||||||||||||
| Acquisition costs (4) | - | - | - | 29 | 1,216 | - | 1,616 | ||||||||||||||||||||||
| Post-acquisition compensation, transition and integration costs | 698 | 559 | 106 | 1,127 | 390 | 1,363 | 520 | ||||||||||||||||||||||
| Total nonrecurring expense (non-GAAP) | $ | 815 | $ | 559 | $ | 106 | $ | 1,156 | $ | 1,606 | $ | 1,480 | $ | 2,136 | |||||||||||||||
| Adjusted net income (non-GAAP) (2) | $ | 15,912 | $ | 14,104 | $ | 13,024 | $ | 14,472 | $ | 10,415 | $ | 43,040 | $ | 31,940 | |||||||||||||||
| ADJUSTED EARNINGS PER COMMON SHARE (2) | |||||||||||||||||||||||||||||
| Adjusted net income (non-GAAP) (from above) | $ | 15,912 | $ | 14,104 | $ | 13,024 | $ | 14,472 | $ | 10,415 | $ | 43,040 | $ | 31,940 | |||||||||||||||
| Weighted average common shares outstanding | 15,739,430 | 15,714,588 | 15,693,345 | 15,641,401 | 15,625,123 | 15,715,788 | 14,477,783 | ||||||||||||||||||||||
| Weighted average common and common equivalent shares outstanding | 15,976,742 | 15,938,377 | 15,922,940 | 15,898,591 | 15,922,324 | 15,946,020 | 14,786,777 | ||||||||||||||||||||||
| Adjusted earnings per common share (non-GAAP): | |||||||||||||||||||||||||||||
| Basic | $ | 1.01 | $ | 0.90 | $ | 0.83 | $ | 0.93 | $ | 0.67 | $ | 2.74 | $ | 2.21 | |||||||||||||||
| Diluted | $ | 1.00 | $ | 0.88 | $ | 0.82 | $ | 0.91 | $ | 0.65 | $ | 2.70 | $ | 2.16 | |||||||||||||||
| ADJUSTED RETURN ON AVERAGE ASSETS (2) | |||||||||||||||||||||||||||||
| Adjusted net income (non-GAAP) (from above) | $ | 15,912 | $ | 14,104 | $ | 13,024 | $ | 14,472 | $ | 10,415 | $ | 43,040 | $ | 31,940 | |||||||||||||||
| Average Assets | $ | 5,217,763 | $ | 5,077,900 | $ | 4,968,502 | $ | 4,842,232 | $ | 4,677,875 | $ | 5,088,055 | $ | 4,242,083 | |||||||||||||||
| Adjusted return on average assets (annualized) (non-GAAP) | 1.22 | % | 1.11 | % | 1.05 | % | 1.20 | % | 0.89 | % | 1.13 | % | 1.00 | % | |||||||||||||||
| NET INTEREST MARGIN (TEY) (6) | |||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 40,719 | $ | 38,013 | $ | 36,908 | $ | 39,593 | $ | 38,314 | $ | 115,640 | $ | 102,801 | |||||||||||||||
| Plus: Tax equivalent adjustment (5) | 1,763 | 1,808 | 1,794 | 1,751 | 1,548 | 4,944 | 4,329 | ||||||||||||||||||||||
| Net interest income - tax equivalent (Non-GAAP) | $ | 42,482 | $ | 39,821 | $ | 38,702 | $ | 41,344 | $ | 39,862 | $ | 120,584 | $ | 107,130 | |||||||||||||||
| Less: Acquisition accounting net accretion | 1,268 | 1,076 | 1,069 | 2,609 | 1,677 | 3,413 | 2,921 | ||||||||||||||||||||||
| Adjusted net interest income | $ | 41,214 | $ | 38,745 | $ | 37,633 | $ | 38,735 | $ | 38,185 | $ | 117,171 | $ | 104,209 | |||||||||||||||
| Average earning assets | $ | 4,791,274 | $ | 4,698,021 | $ | 4,612,553 | $ | 4,513,277 | $ | 4,387,487 | $ | 4,700,617 | $ | 3,989,099 | |||||||||||||||
| Net interest margin (GAAP) | 3.37 | % | 3.25 | % | 3.25 | % | 3.48 | % | 3.46 | % | 3.29 | % | 3.45 | % | |||||||||||||||
| Net interest margin (TEY) (Non-GAAP) | 3.52 | % | 3.40 | % | 3.40 | % | 3.63 | % | 3.60 | % | 3.43 | % | 3.59 | % | |||||||||||||||
| Adjusted net interest margin (TEY) (Non-GAAP) | 3.41 | % | 3.31 | % | 3.31 | % | 3.40 | % | 3.45 | % | 3.33 | % | 3.49 | % | |||||||||||||||
| EFFICIENCY RATIO (7) | |||||||||||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 39,945 | $ | 36,560 | $ | 32,435 | $ | 36,410 | $ | 30,500 | $ | 108,941 | $ | 82,733 | |||||||||||||||
| Net interest income (GAAP) | $ | 40,719 | $ | 38,013 | $ | 36,908 | $ | 39,593 | $ | 38,314 | $ | 115,640 | $ | 102,801 | |||||||||||||||
| Noninterest income (GAAP) | 19,906 | 17,065 | 11,993 | 15,279 | 8,809 | 48,964 | 26,262 | ||||||||||||||||||||||
| Total income | $ | 60,625 | $ | 55,078 | $ | 48,901 | $ | 54,872 | $ | 47,123 | $ | 164,604 | $ | 129,063 | |||||||||||||||
| Efficiency ratio (noninterest expense/total income) (Non-GAAP) | 65.89 | % | 66.38 | % | 66.33 | % | 66.35 | % | 64.72 | % | 66.18 | % | 64.10 | % | |||||||||||||||
| (1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes | |||||||||||||||||||||||||||||
| period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most | |||||||||||||||||||||||||||||
| directly comparable GAAP financial measures. | |||||||||||||||||||||||||||||
| (2) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are | |||||||||||||||||||||||||||||
| non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-recurring income and expense items, | |||||||||||||||||||||||||||||
| therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is | |||||||||||||||||||||||||||||
| the most directly comparable GAAP financial measure. | |||||||||||||||||||||||||||||
| (3) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21%. | |||||||||||||||||||||||||||||
| (4) Acquisition costs were analyzed individually for deductibility. Presented amounts are tax-effected accordingly. | |||||||||||||||||||||||||||||
| (5) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. | |||||||||||||||||||||||||||||
| (6) Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans | |||||||||||||||||||||||||||||
| and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP | |||||||||||||||||||||||||||||
| measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the | |||||||||||||||||||||||||||||
| impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods. | |||||||||||||||||||||||||||||
| (7) Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. | |||||||||||||||||||||||||||||
| In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most | |||||||||||||||||||||||||||||
| directly comparable GAAP financial measures. | |||||||||||||||||||||||||||||