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Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) November 30, 2019

 

QCR Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Commission File Number:  000-22208

 

Delaware

 

42-1397595

(State or other jurisdiction of incorporation)

 

(I.R.S. Employer Identification Number)

 

3551 Seventh Street

Moline, Illinois 61265

(Address of principal executive offices, including zip code)

 

(309) 736-3584

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

o                                    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $1.00 Par Value

 

QCRH

 

The Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company   o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 


 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

On November 30, 2019, QCR Holdings, Inc. (“QCR Holdings”) and Rockford Bank & Trust Company, a wholly owned subsidiary of QCR Holdings (“RB&T”), completed the previously announced sale of substantially all of the assets and transfer of substantially all of the deposits and certain other liabilities of RB&T to Illinois Bank & Trust, a wholly owned subsidiary of Heartland Financial USA, Inc. (“IB&T”), pursuant to a Purchase and Assumption Agreement, dated August 13, 2019, by and among RB&T, IB&T and QCR Holdings (the “Agreement”).

 

Under the terms of the Agreement, IB&T acquired substantially all of RB&T’s assets for a cash payment and assumed substantially all of RB&T’s deposits and certain other liabilities. The cash amount paid for the assets at closing was determined by the following formula as of the determination date, October 31, 2019: (i) the “Purchase Price Premium,” plus (ii) the aggregate net book value of the acquired assets, minus (iii) the aggregate net book value of the assumed liabilities. The Purchase Price Premium was equal to: (a) 8% of RB&T’s acquired tangible assets, multiplied by (b) 0.345. Based on the aggregate net book value of the acquired assets of approximately $453.9 million and liabilities assumed by IB&T of approximately $419.5 million on the determination date, the Purchase Price Premium was approximately $12.5 million and the total cash payment by IB&T to RB&T was approximately $46.9 million.  In addition, QCR Holdings is retaining net assets of approximately $12.2 million that will be liquidated separately.  The majority of these assets consist of bank-owned life insurance.  In total, the transaction is valued at approximately $59.1 million. Pursuant to the Agreement, the parties will recalculate the final amount of the cash payment due from IB&T based on RB&T’s balance sheet as of the closing date, November 30, 2019.

 

Item 7.01. Regulation FD Disclosure.

 

A copy of the press release, dated December 2, 2019, issued by QCR Holdings announcing the completion of the transaction described above is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information furnished pursuant to this Item and the related exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

 

Item 9.01.  Financial Statements and Exhibits.

 

(b)         Pro Forma Financial Information

 

The unaudited pro forma consolidated combined financial information of QCR Holdings for the year ended December 31, 2018 and as of and for the nine months ended September 30, 2019, are filed as Exhibit 99.2 and incorporated herein by reference.

 

(d)         Exhibits.

 

99.1

 

Press Release, dated December 2, 2019.

 

 

 

99.2

 

Unaudited pro forma consolidated combined financial information of QCR Holdings for the year ended December 31, 2018 and as of and for the nine months ended September 30, 2019.

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

QCR HOLDINGS, INC.

 

 

 

Dated:  December 2, 2019

By:

/s/ Todd A. Gipple

 

 

President, Chief Operating Officer and Chief Financial Officer

 

3


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Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

 

 

 

PRESS RELEASE

 

 

FOR IMMEDIATE RELEASE

 

QCR Holdings, Inc. Completes Sale of the Operations of Rockford Bank & Trust

 

Moline, IL, December 2, 2019, QCR Holdings, Inc. (NASDAQ: QCRH, the “Company”) today announced that on November 30, 2019, the Company completed the sale of substantially all of the assets and transfer of substantially all of the deposits and certain other liabilities of the Company’s wholly-owned subsidiary, Rockford Bank and Trust Company (“RB&T”) to Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Dubuque, IA-based Heartland Financial USA, Inc. (NASDAQ: HTLF). The purchase and assumption transaction, announced in August 2019, is valued at approximately $59.1 million.  The $59.1 million represents a cash payment of approximately $46.9 million from IB&T including the purchase price premium of $12.5 million and the separate liquidation of net assets retained by QCRH of $12.2 million.

 

“We are confident the combination of RB&T and IB&T creates a premier community bank that will continue to serve the needs of the Rockford community and Winnebago County,” said Larry J. Helling, Chief Executive Officer of QCRH.  “Divesting of RB&T enables QCRH to redeploy capital in our other more profitable markets to help drive continued organic and acquisitive growth and provides the best outcome for our shareholders.”

 

Todd A. Gipple, President and Chief Financial Officer of the Company stated, “While RB&T represented approximately 10% of our Company’s assets, we were unable to achieve the necessary scale in the Rockford market.  The $46.9 million cash payment represents a purchase price premium of 34.5% of adjusted tangible pro-forma equity, or $12.5 million, pre-tax. As a result of the sale, we anticipate significant improvement in our profitability metrics.”

 

About Us

 

QCRH, headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, and Springfield 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, 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 25 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 the Company’s 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

Christopher J. Lindell

President

Executive Vice President

Chief Operating Officer

Corporate Communications

Chief Financial Officer

(319) 743-7006

(309) 743-7745

[email protected]

[email protected]

 

 


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Section 3: EX-99.2 (EX-99.2)

Exhibit 99.2

 

QCR HOLDINGS, INC.

 

UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma consolidated combined financial information reflects adjustments to the historical financial results of QCR Holdings, Inc. (the “Company”) as reported under U.S. Generally Accepted Accounting Principles (“GAAP”) in connection with the sale of substantially all of the assets and the transfer of substantially all of the deposits and certain other liabilities of the Company’s wholly-owned subsidiary, Rockford Bank & Trust Company (“RB&T”) to Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Heartland Financial USA, Inc.  The all-cash purchase and assumption transaction (the “transaction”), announced in August 2019, closed as of the close of business on November 30, 2019.

 

The unaudited pro forma consolidated combined balance sheet as of September 30, 2019 was prepared with the assumption that the transaction had closed and was fully completed as of September 30, 2019.

 

The unaudited pro forma consolidated combined income statement for the nine months ended September 30, 2019 was prepared with the assumption that the transaction had closed and was fully completed as of January 1, 2019.  This does not include the gain on sale and the related one-time costs related to disposition.

 

The unaudited pro forma consolidated combined income statement for the year ended December 31, 2018 was prepared with the assumption that the transaction had closed and was fully completed as of January 1, 2018.  This also does not include the gain on sale and the related one-time costs related to disposition.

 

The unaudited pro forma consolidated combined financial information does not purport to be indicative of the results of operations or the financial condition which would have actually resulted if the transaction had been completed on the dates indicated and does not purport to indicate the results of future operations. Assumptions and estimates underlying the pro forma consolidated combined financial information are described in the accompanying footnotes.

 


 

 

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Balance Sheet

 

 

 

 

 

RB&T Pro Forma

 

 

 

 

 

 

 

As of September 30,
2019

 

RB&T at September
30, 2019

 

Participation
Loans /
Investments *

 

Pro Forma **

 

Adjustments for

Sale ***

 

Pro Forma

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

102,701,879

 

11,031,151

 

 

11,031,151

 

 

$

91,670,728

 

Federal funds sold

 

9,300,000

 

 

 

 

 

9,300,000

 

Interest-bearing deposits at financial institutions

 

190,377,549

 

2,414,900

 

90,295,048

 

92,709,948

 

59,032,000

 

156,699,601

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity, at amortized cost

 

386,583,744

 

43,106,805

 

(39,863,805

)

3,243,000

 

 

383,340,744

 

Securities available for sale, at fair value

 

234,833,489

 

22,901,737

 

 

22,901,737

 

 

211,931,751

 

Total securities

 

621,417,232

 

66,008,542

 

(39,863,805

)

26,144,737

 

 

595,272,495

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable held for sale

 

10,540,738

 

1,650,400

 

 

1,650,400

 

 

8,890,338

 

Loans/leases receivable held for investment

 

3,968,230,101

 

417,281,473

 

(50,431,243

)

366,850,230

 

 

3,601,379,871

 

Gross loans/leases receivable

 

3,978,770,839

 

418,931,873

 

(50,431,243

)

368,500,630

 

 

3,610,270,209

 

Less allowance for estimated losses on loans/leases

 

(42,605,570

)

(6,490,001

)

 

(6,490,001

)

 

(36,115,568

)

Net loans/leases receivable

 

3,936,165,269

 

412,441,872

 

(50,431,243

)

362,010,629

 

 

3,574,154,640

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank-owned life insurance

 

69,223,617

 

10,856,275

 

 

10,856,275

 

 

58,367,342

 

Premises and equipment, net

 

80,238,693

 

6,400,970

 

 

6,400,970

 

 

73,837,723

 

Restricted investment securities

 

26,364,575

 

1,802,400

 

 

1,802,400

 

 

24,562,175

 

Other real estate owned, net

 

6,381,359

 

2,315,083

 

 

2,315,083

 

 

4,066,276

 

Goodwill

 

77,748,298

 

 

 

 

 

77,748,298

 

Intangibles

 

15,529,058

 

 

 

 

 

15,529,058

 

Other assets

 

156,934,091

 

5,913,267

 

 

5,913,267

 

 

151,020,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,292,381,620

 

519,184,460

 

 

519,184,460

 

59,032,000

 

$

4,832,229,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

852,593,271

 

70,360,778

 

 

70,360,778

 

 

$

782,232,493

 

Interest-bearing

 

3,401,193,430

 

381,184,764

 

 

381,184,764

 

 

3,020,008,666

 

Total deposits

 

4,253,786,701

 

451,545,542

 

 

451,545,542

 

 

3,802,241,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

19,683,475

 

1,157,067

 

 

1,157,067

 

 

18,526,408

 

Federal Home Loan Bank advances

 

210,800,000

 

15,000,000

 

 

15,000,000

 

 

195,800,000

 

Subordinated debentures

 

68,333,753

 

 

 

 

 

68,333,753

 

Junior subordinated debentures

 

37,796,751

 

 

 

 

 

37,796,751

 

Other liabilities

 

182,238,233

 

5,299,443

 

 

5,299,443

 

4,712,398

 

181,651,188

 

Total liabilities

 

4,772,638,913

 

473,002,052

 

 

473,002,052

 

4,712,398

 

4,304,349,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $1 par value; shares authorized 250,000

 

 

 

 

 

 

 

 

Common stock, $1 par value; shares authorized 20,000,000

 

15,790,462

 

4,950,000

 

 

4,950,000

 

4,950,000

 

15,790,462

 

Additional paid-in capital

 

273,474,836

 

32,628,679

 

 

32,628,679

 

32,628,679

 

273,474,836

 

Retained earnings

 

230,891,852

 

8,918,536

 

 

8,918,536

 

17,055,730

 

239,029,046

 

Accumulated other comprehensive income (loss)

 

3,831,783

 

67,850

 

 

67,850

 

67,850

 

3,831,783

 

Accumulated other comprehensive income (loss) - Derivatives

 

(4,246,226

)

(382,657

)

 

(382,657

)

(382,657

)

(4,246,226

)

Total stockholders’ equity

 

519,742,707

 

46,182,408

 

 

46,182,408

 

54,319,602

 

527,879,901

 

Total liabilities and stockholders’ equity

 

$

5,292,381,620

 

519,184,460

 

 

519,184,460

 

59,032,000

 

$

4,832,229,160

 

 


* Includes affiliate participation loans and investments, net, re-allocated to the originating charter in the month prior to closing.  The loans and investments are as of September 30, 2019.

** Includes estimates for retained assets of $14,727,000, and retained liabilities of $2,573,000, all of which will be liquidated or satisfied post-closing.

*** Includes preliminary entries for the sale of RB&T detailed as follows:

 

Cash Proceeds from Buyer

 

$

46,878,000

 

Includes Purchase Price Premium of $12.5 million

 

Cash from Liquidiation of Net Retained Balance Sheet

 

12,154,000

 

 

 

Total Cash Proceeds

 

59,032,000

 

 

 

Equity Investment in RB&T

 

46,182,408

 

 

 

Pre-Tax Gain on Sale

 

$

12,849,592

 

 

 

 

In addition, the Company is recording an estimated gain on sale of $12,849,592 which is offset by an estimate of $2,000,000 of disposition expenses.  The net is an estimated pre-tax net gain of $10,849,592 and using a tax rate of 25% (which is 21% for Federal and 4% for State), the net impact to equity is estimated at $8,137,000.

 

Lastly, the offset is $4,712,398 to other liabilties which consists of accruals for various disposition costs and the taxes payable on the net gain on sale.

 


 

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Income Statement

 

 

 

For the nine months ended September 30, 2019

 

 

 

Consolidated

 

RB&T Only

 

Participation
Loans /
Investments *

 

Pro Forma

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

Loans/leases, including fees

 

$

143,488,413

 

13,948,038

 

1,796,613

 

$

131,336,988

 

Securities:

 

 

 

 

 

 

 

 

 

Taxable

 

5,025,431

 

577,366

 

 

4,448,065

 

Nontaxable

 

10,461,256

 

973,825

 

1,046,425

 

10,533,856

 

Interest-bearing deposits at financial institutions

 

3,041,816

 

116,147

 

(1,523,729

)

1,401,940

 

Restricted investment securities

 

891,165

 

86,785

 

 

804,380

 

Federal funds sold

 

191,317

 

71,596

 

 

119,721

 

Total interest and dividend income

 

163,099,398

 

15,773,757

 

1,319,309

 

148,644,950

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

39,696,963

 

4,882,825

 

 

34,814,138

 

Short-term borrowings

 

275,608

 

25,537

 

 

250,071

 

Federal Home Loan Bank advances

 

2,684,888

 

632,874

 

 

2,052,014

 

Other borrowings

 

512,367

 

 

 

512,367

 

Subordindated debt

 

2,560,701

 

 

 

2,560,701

 

Junior subordinated debentures

 

1,728,959

 

 

 

1,728,959

 

Total interest expense

 

47,459,486

 

5,541,236

 

 

41,918,250

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

115,639,912

 

10,232,521

 

1,319,309

 

106,726,700

 

 

 

 

 

 

 

 

 

 

 

Provision for loan/lease losses

 

6,086,972

 

559,000

 

 

5,527,972

 

Net interest income after provision for loan/lease losses

 

109,552,940

 

9,673,521

 

1,319,309

 

101,198,728

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Trust department fees

 

7,193,596

 

729,370

 

 

6,464,226

 

Investment advisory and management fees

 

5,405,734

 

432,050

 

 

4,973,684

 

Deposit service fees

 

5,025,175

 

534,068

 

 

4,491,107

 

Gains on sales of residential real estate loans

 

1,747,712

 

82,829

 

 

1,664,883

 

Gains on sales government guaranteed portions of loans

 

589,366

 

 

 

589,366

 

Swap fee income

 

20,885,993

 

 

 

20,885,993

 

Security losses, net

 

(55,693

)

 

 

(55,693

)

Earnings on bank-owned life insurance

 

1,440,491

 

192,519

 

 

1,247,972

 

Debit card fees

 

2,591,291

 

208,683

 

 

2,382,608

 

Correspondent banking fees

 

578,167

 

 

 

578,167

 

Other

 

3,561,787

 

252,535

 

 

3,309,252

 

Total noninterest income

 

48,963,619

 

2,432,054

 

 

46,531,565

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

67,842,590

 

5,973,251

 

 

61,869,339

 

Occupancy and equipment expense

 

11,086,782

 

1,078,687

 

 

10,008,095

 

Professional and data processing fees

 

9,811,003

 

1,653,100

 

 

8,157,903

 

Acquisition costs

 

 

 

 

 

Post-acquisition compensation, transition and integration costs

 

1,726,558

 

 

 

1,726,558

 

FDIC and other insurance, and regulatory fees

 

2,431,834

 

279,696

 

 

2,152,138

 

Loan/lease expense

 

747,689

 

108,589

 

 

639,100

 

Net cost of operations of other real estate

 

3,557,490

 

327,147

 

 

3,230,343

 

Advertising and marketing

 

2,877,950

 

339,284

 

 

2,538,666

 

Postage and communication

 

1,250,397

 

67,040

 

 

1,183,357

 

Stationery and supplies

 

817,533

 

93,986

 

 

723,547

 

Bank service charges

 

1,493,792

 

71,649

 

 

1,422,143

 

Loss on debt extinguishment, net

 

148,149

 

 

 

148,149

 

Correspondent banking expense

 

619,252

 

 

 

619,252

 

CDI Amortization

 

1,706,192

 

 

 

1,706,192

 

Other

 

2,822,704

 

306,859

 

 

2,515,845

 

Total noninterest expense

 

108,939,915

 

10,299,288

 

 

98,640,627

 

 

 

 

 

 

 

 

 

 

 

Net income before income taxes

 

49,576,644

 

1,806,287

 

1,319,309

 

49,089,666

 

Federal and state income tax expense

 

8,059,400

 

129,692

 

110,078

 

8,039,786

 

Net income

 

$

41,517,244

 

1,676,595

 

1,209,231

 

$

41,049,880

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

 

$

2.60

 

 

 

 

 

$

2.57

 

Weighted average common and common equivalent shares outstanding

 

15,946,020

 

 

 

 

 

15,976,742

 

 


* Includes affiliate particpation loans and investments, net, re-allocated to the originating charter in the month prior to closing.  The offset is to interest-bearing deposits at banks as the Company would fund the net earning assets with excess cash.  Following are the details:

 

 

 

Amount

 

Rate **

 

Net Interest
Income

 

Adjusted for 9
Months

 

Loans

 

50,431,243

 

4.75

%

2,395,484

 

1,796,613

 

Federal Tax Exempt Municipal Bonds

 

39,863,805

 

3.50

%

1,395,233

 

1,046,425

 

Interest-Bearing Deposits at Banks

 

(90,295,048

)

2.25

%

(2,031,639

)

(1,523,729

)

 


**  The rate is estimated based on weighted average interest rate of the loans and investments as of September 30, 2019.  For the interest rate on the interest-bearing deposits at banks, the Company used an estimated rate for 2019 based on Fed Funds for the majority of the year.

 

NOTE:  Excludes the pre-tax gain on sale estimated at $12,849,592 and the related one-time disposition costs estimated at $2,000,000.

 


 

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Income Statement

 

 

 

For the year ended December 31, 2018

 

 

 

Consolidated

 

RB&T Only

 

Participation
Loans /
Investments *

 

Pro Forma

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

Loans/leases, including fees

 

$

160,160,173

 

16,996,007

 

2,395,484

 

$

145,559,650

 

Securities:

 

 

 

 

 

 

 

 

 

Taxable

 

6,353,413

 

681,693

 

 

5,671,720

 

Nontaxable

 

13,668,283

 

1,227,849

 

1,395,233

 

13,835,667

 

Interest-bearing deposits at financial institutions

 

1,266,530

 

14,600

 

(2,257,376

)

(1,005,446

)

Restricted investment securities

 

1,092,807

 

149,028

 

 

943,779

 

Federal funds sold

 

338,036

 

64,764

 

 

273,272

 

Total interest and dividend income

 

182,879,242

 

19,133,941

 

1,533,341

 

165,278,642

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

30,674,621

 

4,285,571

 

 

26,389,050

 

Short-term borrowings

 

271,243

 

22,271

 

 

248,972

 

Federal Home Loan Bank advances

 

4,192,510

 

611,883

 

 

3,580,627

 

Other borrowings

 

3,346,225

 

575,247

 

 

2,770,978

 

Junior subordinated debentures

 

1,999,058

 

 

 

1,999,058

 

Total interest expense

 

40,483,657

 

5,494,972

 

 

34,988,685

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

142,395,585

 

13,638,969

 

1,533,341

 

130,289,957

 

 

 

 

 

 

 

 

 

 

 

Provision for loan/lease losses

 

12,658,449

 

4,618,833

 

 

8,039,616

 

Net interest income after provision for loan/lease losses

 

129,737,136

 

9,020,136

 

1,533,341

 

122,250,341

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Trust department fees

 

8,707,406

 

771,334

 

 

7,936,072

 

Investment advisory and management fees

 

4,725,557

 

649,676

 

 

4,075,881

 

Deposit service fees

 

6,420,237

 

708,883

 

 

5,711,354

 

Gains on sales of residential real estate loans

 

900,744

 

56,044

 

 

844,700

 

Gains on sales government guaranteed portions of loans

 

404,852

 

 

 

404,852

 

Swap fee income

 

10,787,234

 

176,640

 

 

10,610,594

 

Earnings on bank-owned life insurance

 

1,631,749

 

260,513

 

 

1,371,236

 

Debit card fees

 

3,262,645

 

228,936

 

 

3,033,709

 

Correspondent banking fees

 

851,514

 

 

 

851,514

 

Participation service fees on commercial loan participations

 

1,229,333

 

258,844

 

 

970,489

 

Fee income from early termination of leases

 

446,506

 

 

 

446,506

 

Credit card issuing fees

 

800,499

 

 

 

800,499

 

Other

 

1,372,818

 

24,370

 

 

1,348,448

 

Total noninterest income

 

41,541,094

 

3,135,240

 

 

38,405,854

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

68,994,218

 

6,410,037

 

 

62,584,181

 

Occupancy and equipment expense

 

12,883,632

 

1,422,474

 

 

11,461,158

 

Professional and data processing fees

 

11,452,084

 

1,585,920

 

 

9,866,164

 

Acquisition costs

 

1,795,119

 

140,796

 

 

1,654,323

 

Post-acquisition compensation, transition and integration costs

 

2,086,386

 

 

 

2,086,386

 

FDIC and other insurance, and regulatory fees

 

3,594,480

 

531,374

 

 

3,063,106

 

Loan/lease expense

 

1,543,343

 

89,824

 

 

1,453,519

 

Net cost of operations of other real estate

 

2,488,730

 

471,712

 

 

2,017,018

 

Advertising and marketing

 

3,551,822

 

473,824

 

 

3,077,998

 

Postage and communication

 

1,585,282

 

110,099

 

 

1,475,183

 

Stationery and supplies

 

1,069,744

 

107,595

 

 

962,149

 

Bank service charges

 

1,837,626

 

152,648

 

 

1,684,978

 

Correspondent banking expense

 

820,905

 

 

 

820,905

 

CDI Amortization

 

1,692,431

 

 

 

1,692,431

 

Other

 

3,747,617

 

312,695

 

 

3,434,922

 

Total noninterest expense

 

119,143,419

 

11,808,998

 

 

107,334,421

 

 

 

 

 

 

 

 

 

 

 

Net income before income taxes

 

52,134,811

 

346,378

 

1,533,341

 

53,321,774

 

Federal and state income tax expense

 

9,015,112

 

(359,777

)

90,336

 

9,465,225

 

Net income

 

$

43,119,699

 

706,155

 

1,443,005

 

$

43,856,549

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

 

$

2.86

 

 

 

 

 

$

2.91

 

Weighted average common and common equivalent shares outstanding

 

15,064,730

 

 

 

 

 

15,064,730

 

 


* Includes affiliate particpation loans and federal tax exempt municipal investments, net, re-allocated to the originating charter in the month prior to closing.  The offset is to interest-bearing deposits at banks as the Company would fund the net earning assets with excess cash.  Following are the details:

 

 

 

Amount

 

Rate **

 

Net Interest
 Income

 

Loans

 

50,431,243

 

4.75

%

2,395,484

 

Tax Exempt Municipal Bonds

 

39,863,805

 

3.50

%

1,395,233

 

Interest-Bearing Deposits at Banks

 

(90,295,048

)

2.50

%

(2,257,376

)

 


**  The rate is estimated based on weighted average interest rate of the loans and investments as of September 30, 2019.  For the interest rate on the interest-bearing deposits at banks, the Company used an estimated rate for 2018 based on Fed Funds for the majority of the year.

 

NOTE:  Excludes the pre-tax gain on sale estimated at $12,849,592 and the related one-time disposition costs estimated at $2,000,000.

 


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