About QCBT

Press Release

QCR Holdings, Inc. Announces Second Quarter Earnings and Successful Closing of Springfield Merger

Company Release - 7/19/2018 4:05 PM ET

Q2 2018 Highlights

  • Completion of merger with Springfield Bancshares, Inc. on July 1, 2018
  • Net income of $10.4 million, or $0.73 per diluted share
  • Core net income (non-GAAP) of $10.9 million, or $0.77 per diluted share
  • Annualized loan and lease growth of 7.8% for the quarter and 10.1% year-to-date
  • Annualized noninterest income growth of 17.4%

MOLINE, Ill., July 19, 2018 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ:QCRH) (the “Company”), today announced net income of $10.4 million and diluted earnings per share (“EPS”) of $0.73 for the second quarter of 2018, compared to net income of $10.6 million and diluted EPS of $0.74 for the first quarter of 2018. The second quarter results included $0.5 million of acquisition and post-acquisition compensation, transition and integration costs (after-tax), compared to $0.1 million of similar costs in the first quarter of 2018. Excluding these non-core items, the Company reported core net income (non-GAAP) of $10.9 million and core diluted EPS of $0.77 for the second quarter of 2018, compared to core net income (non-GAAP) of $10.6 million and core diluted EPS of $0.75 for the first quarter of 2018  For the second quarter of 2017, the Company reported net income of $8.8 million and diluted EPS of $0.65. 

For the six months ended June 30, 2018, the Company reported net income of $21.0 million, and diluted EPS of $1.48. Excluding non-core items, the Company reported core net income (non-GAAP) of $21.5 million  and core diluted EPS of $1.51. By comparison, for the six months ended June 30, 2017, the Company reported net income of $18.0 million and diluted EPS of $1.33.

Completed merger with SFC Bank, Springfield, Missouri

Effective July 1, 2018, the Company completed its previously announced merger with Springfield Bancshares, Inc., the holding company of Springfield First Community Bank (“SFC Bank”).  Established as a de novo bank in 2008, SFC Bank is headquartered in Springfield, Missouri and, as a result of the transaction, became the Company’s fifth independent charter. SFC Bank had approximately $573 million in assets, $487 million in loans and $439 million in deposits as of June 30, 2018.

“We are generally pleased with our core operating performance for the second quarter,” commented Douglas M. Hultquist, President and Chief Executive Officer. “We recorded another solid quarter of net income, driven by continued organic loan growth, strong fee income, improved credit quality and careful management of noninterest expenses. We recently welcomed the clients, employees and shareholders of SFC Bank into the QCR Holdings family on July 1st, less than 75 days from the initial announcement date of the transaction. We are excited they have joined us, as this merger fits well with our strategic growth plans by combining two high-performing financial institutions who share similar values and approaches to client service and community involvement. The merger also positions us to continue growing our franchise and creating value for our shareholders."

Annualized Loan and Lease Growth of 7.8% for the Quarter
And 10.1% Year-to-Date

During the second quarter of 2018, the Company’s total assets increased $80.6 million, to a total of $4.1 billion, while total loans and leases grew $59.9 million, or 2.0% on a linked quarter basis. Loan and lease growth was primarily funded by an increase in core deposits and short-term borrowings.  Core deposits (excluding brokered deposits) increased $61.7 million, or 2.0% on a linked quarter basis.

“Annualized organic loan and lease growth was 7.8% during the second quarter. Combined with strong growth in the first quarter, the first six months of 2018 produced an annualized growth rate of 10.1%, within our long-term target of 10% to 12%,” added Mr. Hultquist.  “Our loan growth for the second quarter was driven by strong, broad-based demand for commercial and industrial loans and was partially offset by loan payoffs.”

Net Interest Income of $32.1 million

Net interest income for the second quarter of 2018 totaled $32.1 million, compared to $32.4 million for the first quarter of 2018 and $28.0 million for the second quarter of 2017. The slight decrease in net interest income was primarily due to an increase in funding costs, driven by the Federal Reserve's March and June rate hikes, partially offset by an increase in average loan balances and the impact of higher loan yields. Acquisition-related net accretion totaled $0.5 million for the second quarter of 2018, compared to $0.7 million in the first quarter of 2018 and $1.6 million for the second quarter of 2017.  Excluding acquisition-related net accretion, net interest income of $31.5 million for the second quarter of 2018 decreased 0.5%, compared to $31.7 million for the first quarter of 2018.

Net interest income totaled $64.5 million for the six months ended June 30, 2018, compared to $55.7 million for the six months ended June 30, 2017.

Net interest margin for the second quarter of 2018, excluding acquisition-related net accretion, was 3.46%, down ten basis points from the first quarter of 2018. This margin compression was primarily due to increases in the cost of funds  (due to both mix and rate), as well as reduced loan fee income and higher loan fee amortization on a linked quarter basis.

“Our core loan yields, excluding acquisition-related accretion and loan fee amortization,  increased by 13 basis points on a linked-quarter basis,” stated Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer. “However, the competition for deposits remains fierce and consequently our overall cost of interest-bearing liabilities increased  by 18 basis points during the quarter.”

Annualized Noninterest Income Growth of 17.4%
 Swap Fee Income of $1.6 million

Noninterest income for the second quarter of 2018 totaled $8.9 million, compared to $8.5 million for the first quarter of 2018.  The increase was primarily due to $0.7 million in higher swap fee income, partially offset by the lack of gains on the sale of government guaranteed loans. Wealth management revenue was $3.1 million for the quarter, a slight decrease from the first quarter of 2018. Noninterest income increased 31.4% from $6.8 million in the second quarter of 2017. The increase was primarily attributable to higher wealth management revenue and swap fee income.

Noninterest income totaled $17.5 million for the six months ended June 30, 2018, compared to $14.1 million for the six months ended June 30, 2017.

“We delivered annualized noninterest income growth of 17.4% for the second quarter, driven primarily by higher swap fee income. Swap fee income and gains on the sale of government guaranteed loans totaled $3.0 million for the first six months of 2018, well ahead of our annualized expectation of $4.0 million,” added Mr. Gipple. “We are pleased with our wealth management revenue growth of nearly 20% year-to-date and look forward to the addition of the Bates Companies into our Rockford Bank & Trust wealth management group, as that acquisition is expected to close in the third quarter.”   

Noninterest Expenses Well-Controlled and Total $26.4 million for the Second Quarter

Noninterest expenses for the second quarter of 2018 totaled $26.4 million, compared to $25.9 million and $21.4 million for the first quarter of 2018 and second quarter of 2017, respectively. The linked quarter increase in noninterest expenses was primarily attributable to a $0.5 million increase in acquisition and post-acquisition compensation, transition and integration costs.  

Asset Quality Remains Solid

Nonperforming assets (“NPAs”) totaled $26.8 million, a decrease of $4.2 million from the first quarter of 2018, primarily due to the upgrade of one large credit that was taken out of troubled debt restructure status.  The ratio of NPAs to total assets was 0.65% at June 30, 2018, which was down from 0.77% at March 31, 2018 and 0.75% at June 30, 2017. 

The Company’s provision for loan and lease losses totaled $2.3 million for the second quarter of 2018, which was down $239 thousand from the prior quarter, and up $278 thousand compared to the second quarter of 2017.  The linked quarter decline in the provision for loan and lease losses was due to improved credit quality and a slower pace of loan growth. As of June 30, 2018, the Company’s allowance to total loans and leases was 1.21%, which was relatively flat from 1.20% at March 31, 2018 and down from 1.31% at June 30, 2017.  

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through the acquisition of Community State Bank and Guaranty Bank 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 ($6.6 million at June 30, 2018).  When factoring this remaining discount into the Company’s allowance to total loans and leases calculation, the Company’s allowance as a percentage of total loans and leases increases from 1.21% to 1.42%.

Capital Levels Remain Strong

As of June 30, 2018, the Company’s total risk-based capital ratio was 11.33%, the common equity tier 1 ratio was 9.27%, and the tangible common equity to tangible assets ratio was 8.18%.  By comparison, these respective ratios were 11.25%, 9.14% and 8.10% as of March 31, 2018. 

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 ROAA, improve efficiency ratio, and increase EPS

Conference Call Details

The Company will host an earnings call/webcast tomorrow, July 20, 2018, at 9:00 a.m. central time.  Dial-in information for the call is toll-free 888-317-6016 (international 412-317-6016).  Participants should request to join the QCR Holdings, Inc. call. The event will be  available for digital replay through August 3, 2018.  The replay access information is toll-free 877-344-7529 (international 412-317-0088); access code 10121802.  A webcast of the teleconference can be accessed at the Company’s News and Events page at http://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 which 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, and Rockford Bank & Trust Company, based in Rockford, Illinois, commenced operations in 2005.   Quad City Bank & Trust Company also provides correspondent banking services.  In addition, Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin.  Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. The Company enhanced its presence in Cedar Rapids, Iowa with the acquisition of Guaranty Bank & Trust Company in October 2017, which merged with Cedar Rapids Bank & Trust in December 2017.  In July 2018, QCR Holdings completed a merger with Springfield Bancshares, Inc., the holding company of SFC Bank of Springfield, Missouri. With the addition of SFC Bank, QCR Holdings has 27 locations in Illinois, Iowa, Wisconsin and Missouri.  As of July 1, 2018, QCR Holdings had approximately $4.7 billion in assets, $3.6 billion in loans and $3.7 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, national and international economies; (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 the acquisition and the possibility that the 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
Executive Vice 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)
 As of
 June 30,March 31,December 31,September 30,June 30,
 20182018 201720172017
      
 (dollars in thousands)
CONDENSED BALANCE SHEET     
      
Cash and due from banks$69,069$61,846$75,722$56,275$77,161
Federal funds sold and interest-bearing deposits 51,667 59,557 85,962 61,789 72,354
Securities 657,997 640,906 652,382 583,936 593,485
Net loans/leases 3,077,247 3,018,370 2,930,130 2,641,772 2,520,209
Core deposit intangible 8,470 8,774 9,079 6,689 6,919
Goodwill 28,091 28,334 28,334 13,111 13,111
Other assets 214,342 208,527 201,056 186,891 173,948
Total assets$   4,106,883 $   4,026,314 $   3,982,665 $   3,550,463 $   3,457,187
      
Total deposits$3,298,276$3,280,001$3,266,655$2,894,268$2,870,234
Total borrowings 380,392 334,802 309,479 296,145 230,263
Other liabilities 58,627 51,083 53,244 47,011 51,607
Total stockholders' equity 369,588 360,428 353,287 313,039 305,083
Total liabilities and stockholders' equity$   4,106,883 $   4,026,314 $   3,982,665 $   3,550,463 $   3,457,187
      
ANALYSIS OF LOAN PORTFOLIO     
Loan/lease mix:     
Commercial and industrial loans$1,273,000$1,201,086$1,134,516$1,034,530$942,539
Commercial real estate loans 1,349,319 1,357,703 1,303,492 1,157,855 1,131,906
Direct financing leases 133,197 137,615 141,448 147,063 153,337
Residential real estate loans 257,434 254,484 258,646 239,958 233,871
Installment and other consumer loans 92,952 95,912 118,611 89,606 84,047
Deferred loan/lease origination costs, net of fees 8,890 8,103 7,773 7,742 7,866
Total loans/leases$3,114,792$3,054,903$2,964,486$2,676,754$2,553,566
Less allowance for estimated losses on loans/leases 37,545 36,533 34,356 34,982 33,357
Net loans/leases$   3,077,247 $   3,018,370 $   2,930,130 $   2,641,772 $   2,520,209
      
ANALYSIS OF SECURITIES PORTFOLIO     
Securities mix:     
U.S. government sponsored agency securities$35,667$36,868$38,097$39,340$41,944
Municipal securities 458,510 438,736 445,049 379,694 381,254
Residential mortgage-backed and related securities 158,534 157,333 163,301 158,969 164,415
Other securities 5,286 7,969 5,935 5,933 5,872
Total securities$   657,997 $   640,906 $   652,382 $   583,936 $   593,485
      
ANALYSIS OF DEPOSITS     
Deposit mix:     
Noninterest-bearing demand deposits$746,822$784,815$789,548$715,537$760,625
Interest-bearing demand deposits 1,865,382 1,789,019 1,855,893 1,614,894 1,526,103
Time deposits 519,999 496,644 516,058 430,270 478,580
Brokered deposits 166,073 209,523 105,156 133,567 104,926
Total deposits$   3,298,276 $   3,280,001 $   3,266,655 $   2,894,268 $   2,870,234
      
ANALYSIS OF BORROWINGS     
Borrowings mix:     
Term FHLB advances$46,600$56,600$56,600$58,600$57,000
Overnight FHLB advances (1) 207,500 159,745 135,400 110,455 49,500
Wholesale structured repurchase agreements 35,000 35,000 35,000 45,000 45,000
Customer repurchase agreements 2,186 3,820 7,003 3,671 4,897
Federal funds purchased 15,400 13,040 6,990 12,340 13,320
Junior subordinated debentures 37,581 37,534 37,486 33,579 33,546
Other borrowings 36,125 29,063 31,000 32,500 27,000
Total borrowings$   380,392 $   334,802 $   309,479 $   296,145 $   230,263
      
(1) The weighted-average rate of these overnight borrowings was 2.09% as of June 30, 2018; 1.90% as of March 31, 2018; 1.63% as of December 31, 2017; 1.32% as of September 30, 2017; and 1.31% as of June 30, 2017.
     


       
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
       
  For the Quarter Ended
  June 30,March 31,December 31,September 30,June 30,
  20182018201720172017
       
  (dollars in thousands, except per share data)
INCOME STATEMENT      
Interest income $40,799 $39,546$37,878 $33,841 $32,453
Interest expense  8,714  7,143 6,085  5,285  4,406
Net interest income  32,085  32,403 31,793  28,556  28,047
Provision for loan/lease losses  2,301  2,540 2,255  2,087  2,023
Net interest income after provision for loan/lease losses $   29,784  $   29,863 $   29,538  $   26,469  $   26,024
       
       
Trust department fees $2,058 $2,237$2,034 $1,722 $1,692
Investment advisory and management fees  1,058  952 1,071  969  868
Deposit service fees  1,610  1,531 1,622  1,522  1,459
Gain on sales of residential real estate loans  102  101 101  98  113
Gain on sales of government guaranteed portions of loans  -  358 34  92  87
Swap fee income  1,649  959 2,460  194  327
Securities gains (losses), net  -  - (63) (63) 38
Earnings on bank-owned life insurance  399  418 445  428  459
Debit card fees  844  766 741  755  743
Correspondent banking fees  213  265 231  239  200
Other  979  954 1,038  746  796
Total noninterest income $   8,912  $   8,541 $   9,714  $   6,702  $   6,782
       
       
Salaries and employee benefits $15,804 $15,978$16,060 $13,424 $12,931
Occupancy and equipment expense  3,133  3,066 3,221  2,516  2,699
Professional and data processing fees  2,771  2,708 3,382  2,951  2,341
Acquisition costs  414  93 661  408  -
Post-acquisition compensation, transition and integration costs  165  - 3,787  523  -
FDIC insurance, other insurance and regulatory fees  840  756 795  690  646
Loan/lease expense  260  291 352  257  260
Net cost of operation of other real estate  (70) 132 120  (160) 28
Advertising and marketing  753  693 778  670  568
Bank service charges  466  441 439  460  447
Correspondent banking expense  204  205 203  204  202
CDI amortization  305  305 308  231  231
Other  1,325  1,195 1,245  1,221  1,052
Total noninterest expense $   26,370  $   25,863 $   31,351  $   23,395  $   21,405
       
Net income before taxes $   12,326  $   12,541 $   7,901  $   9,776  $   11,401
Income tax expense (benefit)  1,881  1,991 (2,001) 1,922  2,635
Net income $   10,445  $   10,550 $   9,902  $   7,854  $   8,766
       
Basic EPS $0.75 $0.76$0.72 $0.60 $0.67
Diluted EPS $0.73 $0.74$0.70 $0.58 $0.65
       
Weighted average common shares outstanding  13,919,565  13,888,661 13,845,497  13,151,350  13,170,283
Weighted average common and common equivalent shares outstanding 14,232,423  14,205,584 14,193,191  13,507,955  13,532,324
       


      
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
      
   For the Six Months Ended
   June 30, June 30,
   2018 2017
      
   (dollars in thousands, except per share data)
INCOME STATEMENT    
Interest income $80,345 $63,798
Interest expense  15,857  8,082
Net interest income  64,488  55,716
Provision for loan/lease losses  4,841  4,128
Net interest income after provision for loan/lease losses $   59,647  $   51,588
      
      
Trust department fees $4,295 $3,432
Investment advisory and management fees  2,010  1,830
Deposit service fees  3,142  2,775
Gain on sales of residential real estate loans  203  209
Gain on sales of government guaranteed portions of loans  358  1,038
Swap fee income  2,608  441
Securities gains, net  -  38
Earnings on bank-owned life insurance  817  929
Debit card fees  1,610  1,446
Correspondent banking fees  477  445
Other   1,934  1,483
Total noninterest income $   17,454  $   14,066
      
      
Salaries and employee benefits $31,782 $26,238
Occupancy and equipment expense  6,198  5,201
Professional and data processing fees  5,479  4,424
Acquisition costs  506  -
Post-acquisition compensation, transition and integration costs  165  -
FDIC insurance, other insurance and regulatory fees  1,597  1,267
Loan/lease expense  551  554
Net cost of operation of other real estate  62  42
Advertising and marketing  1,446  1,177
Bank service charges  907  871
Correspondent banking expense  409  400
CDI amortization  609  462
Other   2,523  2,042
Total noninterest expense $   52,234  $   42,678
      
Net income before taxes $   24,867  $   22,976
Income tax expense  3,872  5,025
Net income  $   20,995  $   17,951
      
Basic EPS $1.51 $1.36
Diluted EPS $1.48 $1.33
      
Weighted average common shares outstanding  13,904,113  13,151,833
Weighted average common and common equivalent shares outstanding 14,219,003  13,502,505
      


         
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
         
 For the Quarter Ended For the Six Months Ended
 June 30,March 31,December 31,September 30,June 30, June 30,June 30,
 20182018201720172017 20182017
         
 (dollars in thousands, except per share data)
COMMON SHARE DATA        
Common shares outstanding    13,973,940    13,936,957    13,918,168    13,201,959    13,175,234    
Book value per common share (1)$26.45 $25.86 $25.38 $23.71 $23.16    
Tangible book value per common share (2)$23.83 $23.20 $22.70 $22.21 $21.64    
Closing stock price$47.45 $44.85 $42.85 $45.50 $47.40    
Market capitalization$663,063 $625,073 $596,393 $600,689 $624,506    
Market price / book value 179.41% 173.43% 168.81% 191.89% 204.70%   
Market price / tangible book value 199.10% 193.33% 188.81% 204.85% 219.08%   
Earnings per common share (basic) LTM (3)$2.83 $2.74 $2.69 $2.62 $2.49    
Price earnings ratio LTM (3) 16.77  16.37  15.93  17.37  19.11   
TCE / TA (4) 8.18% 8.10% 8.01% 8.31% 8.29%   
         
         
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY    
Beginning balance$  360,428 $  353,287 $  313,039 $  305,083 $  295,840    
Net income   10,445    10,550    9,902    7,854    8,766    
Other comprehensive income (loss), net of tax   (1,335)   (3,201)   (295)   275    702    
Common stock cash dividends declared   (836)   (834)   (693)   (658)   (657)   
Proceeds from issuance of 678,670 shares of
  common stock, net of costs, as a result of the
  acquisition of Guaranty Bank & Trust
   -     -     30,741    -     -     
Other (5)   886    626    593    485    432    
Ending balance$   369,588  $   360,428  $   353,287  $   313,039  $   305,083     
         
         
REGULATORY CAPITAL RATIOS (6):        
Total risk-based capital ratio 11.33% 11.25% 11.15% 11.49% 11.65%   
Tier 1 risk-based capital ratio 10.31% 10.21% 10.14% 10.35% 10.51%   
Tier 1 leverage capital ratio 9.22% 9.08% 8.98% 9.23% 9.34%   
Common equity tier 1 ratio 9.27% 9.14% 9.10% 9.33% 9.46%   
         
         
KEY PERFORMANCE RATIOS AND OTHER METRICS        
Return on average assets (annualized) 1.03% 1.06% 1.01% 0.90% 1.04%  1.04% 1.08%
Return on average total equity (annualized) 11.45% 11.84% 11.67% 10.15% 11.65%  11.64% 12.13%
Net interest margin 3.37% 3.50% 3.41% 3.43% 3.54%  3.43% 3.59%
Net interest margin (TEY) (Non-GAAP)(7) 3.52% 3.64% 3.69% 3.71% 3.81%  3.58% 3.86%
Efficiency ratio (Non-GAAP) (8) (12) 64.32% 63.17% 75.53% 66.35% 61.46%  63.75% 61.16%
Gross loans and leases / total assets 75.84% 75.87% 74.43% 75.39% 73.86%  75.84% 73.86%
Effective tax rate (11) 15.26% 15.88% -25.33% 19.66% 23.11%  15.57% 23.11%
Tax benefit related to stock options exercised and restricted stock awards vested (9) 200  133  406  191  90   333  623 
Full-time equivalent employees (10) 666  639  641  580  585   666  585 
         
         
AVERAGE BALANCES         
Assets$  4,053,684 $  3,994,691 $  3,923,337 $  3,503,148 $  3,378,195  $  4,024,188 $  3,326,454 
Loans/leases   3,077,517    3,019,376    2,930,711    2,629,626    2,488,828     3,048,447    2,443,608 
Deposits   3,343,003    3,239,562    3,256,481    2,882,106    2,835,711     3,291,283    2,763,861 
Total stockholders' equity   365,031    356,525    339,468    309,596    300,868     360,778    295,887 
         
(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) ASC 2016-09 became effective on January 1, 2017 and affects the accounting for stock compensation.  This amount reflects the tax benefit recognized as a result of this new standard.
(10) Full-time equivalent employees increased in the 2nd quarter of 2018 due primarily to the addition of summer interns and several new positions created to build scale. Full-time equivalent employees increased in the 4th quarter of 2017 due to the acquisition of Guaranty, as well as the filling of open positions throughout the Company.
(11) The effective tax rate for the fourth quarter of 2017 and the full year were impacted by a $2.9 million tax benefit recorded as a result of the Tax Act.
(12) The efficiency ratio was unusually high in the fourth quarter of 2017 due to one-time acquisition costs and post-acquisition transition and integration costs totaling $4.4 million.
 


             
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
             
ANALYSIS OF NET INTEREST INCOME AND MARGIN          
             
  For the Quarter Ended
  June 30, 2018 March 31, 2018 June 30, 2017
  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 $18,561$611.32% $19,703$561.15% $18,742$380.81%
Interest-bearing deposits at financial institutions 54,879 2281.67%  49,531 1971.61%  86,236 2201.02%
Securities (1)  648,276 5,7523.56%  649,035 5,8393.65%  573,747 5,3843.76%
Restricted investment securities 21,100 2124.03%  21,830 2344.35%  13,226 1324.00%
Loans (1)  3,077,517 36,0084.69%  3,019,376 34,5734.64%  2,488,828 28,8814.65%
Total earning assets (1)$3,820,333$42,2614.44% $3,759,475$40,8994.41% $3,180,779$34,6554.37%
             
Interest-bearing deposits$1,919,406$4,0890.85% $1,828,228$3,0190.67% $1,566,106$1,8350.47%
Time deposits  665,643 2,4391.47%  616,661 1,8621.22%  527,719 1,1560.88%
Short-term borrowings 19,024 631.33%  17,271 330.77%  17,936 190.42%
Federal Home Loan Bank advances 174,826 8822.02%  236,689 1,0641.82%  76,739 3541.85%
Other borrowings  67,044 7334.39%  64,680 7184.50%  72,000 6963.88%
Junior subordinated debentures 37,558 5085.43%  37,510 4474.83%  33,530 3474.15%
Total interest-bearing liabilities$2,883,501$8,7141.21% $2,801,039$7,1431.03% $2,294,030$4,4070.77%
             
Net interest income / spread (1) $33,5473.23%  $33,7563.38%  $30,2483.60%
Net interest margin (2)  3.37%   3.50%   3.54%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.52%   3.64%   3.81%
             
             
  For the Six Months Ended    
  June 30, 2018 June 30, 2017  
  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 $19,132$1181.24% $14,917$530.72%    
Interest-bearing deposits at financial institutions 52,205 4251.64%  89,394 4180.94%    
Securities (1)  648,656 11,4183.55%  567,101 10,5433.75%    
Restricted investment securities 21,465 4464.19%  13,549 2623.90%    
Loans (1)  3,048,447 70,7534.68%  2,443,608 56,7414.68%    
Total earning assets (1)$3,789,905$83,1604.42% $3,128,569$68,0174.38%    
             
Interest-bearing deposits$1,873,817$7,1090.77% $1,486,876$2,9740.40%    
Time deposits  641,152 4,3011.35%  519,419 2,2490.87%    
Short-term borrowings 18,148 951.06%  21,562 430.40%    
Federal Home Loan Bank advances 205,758 1,9461.91%  95,548 7581.60%    
Other borrowings  65,862 1,4514.44%  73,381 1,3793.79%    
Junior subordinated debentures 37,534 9555.13%  33,514 6804.09%    
Total interest-bearing liabilities$2,842,271$15,8571.13% $2,230,300$8,0830.73%    
             
Net interest income / spread (1) $67,3033.29%  $59,9343.65%    
Net interest margin (2)  3.43%   3.59%    
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.58%   3.86%    
             
             
(1) Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 35% tax rate for each period prior to March 31, 2018 and 21% for periods including and after March 31, 2018.
(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.
          


      
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
      
 As of
 June 30,March 31,December 31,September 30,June 30,
 20182018201720172017
      
 (dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES     
Beginning balance$36,533 $34,356 $34,982 $33,357 $32,059 
Provision charged to expense 2,301  2,540  2,255  2,087  2,023 
Loans/leases charged off (1,525) (436) (2,979) (650) (851)
Recoveries on loans/leases previously charged off 236  73  98  188  126 
Ending balance$   37,545  $   36,533  $   34,356  $   34,982  $   33,357  
      
      
NONPERFORMING ASSETS      
Nonaccrual loans/leases$12,554 $12,759 $11,441 $20,443 $13,217 
Accruing loans/leases past due 90 days or more 20  41  89  423  424 
Troubled debt restructures - accruing 1,327  5,276  7,113  7,563  6,915 
Total nonperforming loans/leases 13,901  18,076  18,643  28,429  20,556 
Other real estate owned 12,750  12,750  13,558  5,135  5,174 
Other repossessed assets 150  200  80  120  123 
Total nonperforming assets$   26,801  $   31,026  $   32,281  $   33,684  $   25,853  
      
      
ASSET QUALITY RATIOS     
Nonperforming assets / total assets 0.65% 0.77% 0.81% 0.95% 0.75%
Allowance / total loans/leases (1) 1.21% 1.20% 1.16% 1.31% 1.31%
Allowance / nonperforming loans/leases (1) 270.09% 202.11% 184.28% 123.05% 162.27%
Net charge-offs as a % of average loans/leases 0.04% 0.01% 0.10% 0.02% 0.03%
      
(1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminated the allowance and impacts these ratios.
      


            
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
            
   For the Quarter Ended For the Six Months Ended
   June 30, March 31, June 30, June 30, June 30,
 SELECT FINANCIAL DATA - SUBSIDIARIES 2018 2018 2017 2018 2017
                      
   (dollars in thousands)
 TOTAL ASSETS          
            
 Quad City Bank and Trust (1) $1,563,643  $1,526,830  $1,400,308     
 m2 Lease Funds, LLC  234,566   224,301   215,689     
 Cedar Rapids Bank and Trust  1,345,431   1,331,209   993,769     
 Community State Bank - Ankeny  712,139   696,979   642,761     
 Rockford Bank and Trust  484,123   468,112   426,160     
            
 TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1) $1,283,766  $1,302,005  $1,205,516     
 Cedar Rapids Bank and Trust  1,080,685   1,058,251   789,750     
 Community State Bank - Ankeny  596,291   563,540   554,767     
 Rockford Bank and Trust  376,240   379,552   346,893     
            
 TOTAL LOANS & LEASES          
            
 Quad City Bank and Trust (1) $1,184,879  $1,150,120  $1,045,625     
 m2 Lease Funds, LLC  233,297   223,654   214,253     
 Cedar Rapids Bank and Trust  1,034,057   1,011,971   728,562     
 Community State Bank - Ankeny  509,207   513,951   442,845     
 Rockford Bank and Trust  386,649   378,860   336,534     
            
 TOTAL LOANS & LEASES / TOTAL ASSETS          
            
 Quad City Bank and Trust (1)  76%  75%  75%    
 Cedar Rapids Bank and Trust  77%  76%  73%    
 Community State Bank - Ankeny  72%  74%  69%    
 Rockford Bank and Trust  80%  81%  79%    
            
 ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES          
            
 Quad City Bank and Trust (1)  1.12%  1.16%  1.28%    
 m2 Lease Funds, LLC  1.49%  1.67%  1.60%    
 Cedar Rapids Bank and Trust (2)  1.28%  1.24%  1.58%    
 Community State Bank - Ankeny (2)  1.02%  0.95%  0.71%    
 Rockford Bank and Trust  1.50%  1.51%  1.59%    
            
 RETURN ON AVERAGE ASSETS