About QCBT

Press Release

QCR Holdings, Inc. Announces First Quarter Earnings and Surpasses $5 Billion in Assets

Company Release - 4/24/2019 4:05 PM ET

First Quarter 2019 Highlights

  • Net income of $12.9 million, or $0.81 per diluted share
  • Adjusted net income (non-GAAP) of $13.0 million, or $0.82 per diluted share
  • Annualized loan and lease growth of 7.1% for the quarter
  • Annualized deposit growth of 21.8% for the quarter
  • Noninterest income of $12.0 million for the quarter
  • Nonperforming assets down $1.6 million, or 5.6% from the prior quarter

MOLINE, Ill., April 24, 2019 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $12.9 million and diluted earnings per share (“EPS”) of $0.81 for the first quarter of 2019, compared to net income of $13.3 million and diluted EPS of $0.84 for the fourth quarter of 2018. The first quarter results included $0.1 million of acquisition and post-acquisition compensation, transition and integration costs (after-tax), compared to $1.2 million of similar costs in the fourth quarter of 2018. Excluding these expenses, the Company reported adjusted net income (non-GAAP) of $13.0 million and adjusted diluted EPS of $0.82 for the first quarter of 2019, compared to adjusted net income (non-GAAP) of $14.5 million and adjusted diluted EPS of $0.91 for the fourth quarter of 2018. For the first quarter of 2018, net income and diluted EPS were $10.6 million and $0.74, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $10.6 million and $0.75, respectively.

“We are generally pleased with our start to 2019 and during the quarter surpassed $5 billion in assets, a significant milestone for the Company,” commented Douglas M. Hultquist, President and Chief Executive Officer. “We recorded another solid quarter of net income, driven by organic loan and deposit growth, strong fee income and excellent credit quality. Our ongoing focus on gathering core deposits at each of the charters led to a 22% annualized increase for the quarter, which laid the foundation for continued balance sheet growth. The strong growth in deposits also created some excess liquidity during the quarter, which when combined with the ongoing flattening of the yield curve, resulted in compression in our net interest margin. Although we saw a decrease in our net interest income, given our robust loan pipeline, we believe we are well positioned to drive strong returns throughout 2019.”

Annualized Loan and Lease Growth of 7.1%

During the first quarter of 2019, the Company’s total assets increased $117.0 million to a total of $5.1 billion, while total loans and leases grew $66.7 million, or 1.8%, compared to the fourth quarter of 2018. Loan and lease growth was funded by an increase in core deposits. Core deposits (excluding brokered deposits) increased $175.1 million, or 4.7% on a linked quarter basis. At quarter-end, the percentage of wholesale funds to total assets was 11.9%, which is a meaningful decline from 13.8% in the fourth quarter. Additionally, at quarter-end the percentage of gross loans and leases to total assets stayed relatively flat on a linked quarter basis at 75%.

“Despite the normal seasonal impact, our loan growth for the quarter was driven by healthy loan production with ongoing strength in commercial and industrial and commercial real estate construction loans,” added Mr. Hultquist. “We also experienced a more normalized level of payoffs, which were down significantly from the fourth quarter’s elevated levels. Our loan and lease pipeline remains very strong, giving us confidence that we are on track to achieve organic loan growth for the full year of between 8% and 10%.”

Net Interest Income of $36.9 million

Net interest income for the first quarter of 2019 totaled $36.9 million, compared to $39.6 million for the fourth quarter of 2018 and $32.4 million for the first quarter of 2018. While average interest earning assets increased $99.3 million, or 2.2% on a linked quarter basis, the decrease in net interest income was due to a 23 basis point decrease in reported net interest margin. Acquisition-related net accretion totaled $1.1 million (pre-tax) for the first quarter of 2019, compared to $2.6 million in the fourth quarter of 2018 and $0.7 million for the first quarter of 2018. Adjusted net interest income (non-GAAP) was $37.6 million for the first quarter of 2019, compared to $38.7 million for the fourth quarter of 2018 and $33.1 million for the first quarter of 2018.

In the first quarter, reported net interest margin was 3.25%, and on a tax-equivalent yield basis, net interest margin was 3.40%. This represented a decrease in both net interest margin and tax-equivalent net interest margin from the fourth quarter of 23 basis points. Net interest margin, excluding acquisition-related net accretion was 3.31% in the first quarter, a decline of 9 basis points from the fourth quarter of 2018. This decline in adjusted net interest margin was due to a combination of factors, including increases in the Company’s cost of funds (due to both mix and rate), excess liquidity due to the strong deposit growth in the quarter and the impact of the issuance of  $65 million of subordinated debt during the first quarter.

 For the Quarter Ended
 Mar. 31,Dec. 31,Mar. 31,
 201920182018
NIM3.25%3.48%3.50%
NIM (TEY)(non-GAAP)(1)3.40%3.63%3.64%
Adjusted NIM (TEY)(non-GAAP)(1)3.31%3.40%3.57%

(1) See GAAP to non-GAAP reconciliations.

 “Competition for new deposits remains strong and as a result, our overall cost of funds increased by 17 basis points, excluding acquisition amortization,” stated Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer. “Excluding the impact of acquisition-related accretion, our adjusted loan yields on a tax-equivalent basis increased by 8 basis points.  Furthermore, excluding the impact of the excess liquidity and the additional interest expense incurred with the subordinated debt, adjusted net interest margin declined approximately 3 basis points during the first quarter.”

Noninterest Income of $12.0 million

Noninterest income for the first quarter of 2019 totaled $12.0 million, compared to $15.3 million for the fourth quarter of 2018. The decrease was primarily due to $3.8 million in lower swap fee income coming off a very strong fourth quarter, partially offset by a $0.4 million increase in wealth management revenue. Wealth management revenue was $4.2 million for the quarter, a 9.2% increase from the fourth quarter of 2018. Noninterest income increased 40.4% when compared to the first quarter of 2018.

“We continued to see strong production from our Specialty Finance Group, which led to $3.2 million in swap fee income during the quarter, and when annualized is at the high end of our full year target of $8 to $12 million,” added Mr. Gipple. “Additionally, we are very pleased with the 9.2% increase in our wealth management revenue, which was driven by organic growth in assets under management across our legacy charters.”

Noninterest Expenses of $32.4 million

Noninterest expenses for the first quarter of 2019 totaled $32.4 million, compared to $36.4 million and $25.9 million for the fourth quarter of 2018 and first quarter of 2018, respectively. Excluding post-acquisition and other one-time costs, our noninterest expenses would have totaled $32.1 million. The linked quarter decrease was primarily due to a combination of factors, including a $2.2 million decrease in net costs of operations of other real estate and a $0.8 million decrease in professional and data processing fees, partially offset by a $1.1 million increase in salaries and employee benefits due to annual merit increases, additions to staff and lower deferred costs on loans and leases.  

Asset Quality Improvement

Nonperforming assets (“NPAs”) totaled $26.4 million, a decrease of $1.6 million from the fourth quarter of 2018. The lower NPAs resulted in the ratio of NPAs to total assets improving to 0.52% at March 31, 2019, compared to 0.56% at December 31, 2018 and 0.77% at March 31, 2018.

The Company’s provision for loan and lease losses totaled $2.1 million for the first quarter of 2019, which was up $0.5 million from the prior quarter and down $0.4 million compared to the first quarter of 2018. The linked quarter increase in the provision for loan and lease losses was primarily due to a lower than normal provision in the fourth quarter of 2018 as a result of a more favorable outcome than expected on a large credit that was partially charged off. As of March 31, 2019, the Company’s allowance to total loans and leases was 1.08%, which was up slightly from 1.07% at December 31, 2018 and down from 1.20% at March 31, 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 ($10.4 million at March 31, 2019).

Strong Capital Levels

As of March 31, 2019, the Company’s total risk-based capital ratio was 12.22%, the common equity Tier 1 ratio was 8.98%, and the tangible common equity to tangible assets ratio was 7.92%. By comparison, these respective ratios were 10.69%, 8.89% and 7.78% as of December 31, 2018. The increase in capital ratios from December 31, 2018 to March 31, 2019 was primarily the result of net income and the issuance of $63.4 million in subordinated notes (net of issuance costs) during the quarter. 

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, April 25, 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 digital replay through May 9, 2019. The replay access information is toll-free 877-344-7529 (international 412-317-0088); access code 10130063. 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 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. In 2018, the Company acquired the Bates Companies, a wealth management firm. 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. In July 2018, QCR Holdings completed a merger with Springfield Bancshares, Inc., the holding company of Springfield First Community Bank of Springfield, Missouri. With this addition of Springfield First Community Bank, the Company has 27 locations in Illinois, Iowa, Wisconsin and Missouri. As of March 31, 2019, QCR Holdings had approximately $5.1 billion in assets, $3.8 billion in loans and $4.2 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; (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
 March 31December 31,September 30,June 30,March 31,
  2019 2018 2018 2018 2018
      
 (dollars in thousands)
      
CONDENSED BALANCE SHEET     
      
Cash and due from banks$76,527$85,523$73,407$69,069$61,846
Federal funds sold and interest-bearing deposits 216,032 159,596 129,660 51,667 59,557
Securities 655,749 662,969 650,745 657,997 640,906
Net loans/leases 3,758,268 3,692,907 3,610,309 3,077,247 3,018,370
Intangibles 16,918 17,450 16,137 8,470 8,774
Goodwill 77,872 77,832 73,618 28,091 28,334
Other assets 265,296 253,433 238,856 214,342 208,527
Total assets$  5,066,662 $  4,949,710 $  4,792,732 $  4,106,883 $  4,026,314
      
Total deposits$4,194,220$3,977,031$3,788,277$3,298,276$3,280,001
Total borrowings 282,994 404,968 483,635 380,392 334,802
Other liabilities 101,041 94,573 63,433 58,627 51,083
Total stockholders' equity 488,407 473,138 457,387 369,588 360,428
Total liabilities and stockholders' equity$  5,066,662 $  4,949,710 $  4,792,732 $  4,106,883 $  4,026,314
      
ANALYSIS OF LOAN PORTFOLIO     
Loan/lease mix:     
Commercial and industrial loans$1,479,247$1,429,410$1,380,543$1,273,000$1,201,086
Commercial real estate loans 1,790,845 1,766,111 1,727,326 1,349,319 1,357,703
Direct financing leases 108,543 117,969 126,752 133,197 137,615
Residential real estate loans 288,502 290,759 309,288 257,434 254,484
Installment and other consumer loans 123,087 119,381 100,191 92,952 95,912
Deferred loan/lease origination costs, net of fees 9,208 9,124 9,286 8,890 8,103
Total loans/leases$3,799,432$3,732,754$3,653,386$3,114,792$3,054,903
Less allowance for estimated losses on loans/leases 41,164 39,847 43,077 37,545 36,533
Net loans/leases$  3,758,268 $  3,692,907 $  3,610,309 $  3,077,247 $  3,018,370
      
ANALYSIS OF SECURITIES PORTFOLIO     
Securities mix:     
U.S. government sponsored agency securities$35,843$36,411$36,492$35,667$36,868
Municipal securities 450,376 459,409 453,275 458,510 438,736
Residential mortgage-backed and related securities 161,692 159,249 155,733 158,534 157,333
Other securities 7,838 7,900 5,245 5,286 7,969
Total securities$  655,749 $  662,969 $  650,745 $  657,997 $  640,906
      
ANALYSIS OF DEPOSITS     
Deposit mix:     
Noninterest-bearing demand deposits$821,599$791,101$802,090$746,822$784,815
Interest-bearing demand deposits 2,334,474 2,204,206 2,094,814 1,865,382 1,789,019
Time deposits 719,286 704,903 615,323 519,999 496,644
Brokered deposits 318,861 276,821 276,050 166,073 209,523
Total deposits$  4,194,220 $  3,977,031 $  3,788,277 $  3,298,276 $  3,280,001
      
ANALYSIS OF BORROWINGS     
Borrowings mix:     
Term FHLB advances$66,380$76,327$63,399$46,600$56,600
Overnight FHLB advances (1) 59,800 190,165 295,730 207,500 159,745
Wholesale structured repurchase agreements 35,000 35,000 35,000 35,000 35,000
Customer repurchase agreements 3,056 2,084 3,049 2,186 3,820
Federal funds purchased 12,830 26,690 8,670 15,400 13,040
Subordinated notes 68,215 4,782 - - -
Junior subordinated debentures 37,713 37,670 37,626 37,581 37,534
Other borrowings - 32,250 40,161 36,125 29,063
Total borrowings$  282,994 $  404,968 $  483,635 $  380,392 $  334,802
      
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 2.62%.  


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
        
   For the Quarter Ended
   March 31December 31,September 30,June 30,March 31,
    2019 2018  2018  2018  2018
        
   (dollars in thousands, except per share data)
        
INCOME STATEMENT      
Interest income $52,102$52,703 $49,831 $40,799 $39,546
Interest expense  15,194 13,110  11,517  8,714  7,143
Net interest income  36,908 39,593  38,314  32,085  32,403
Provision for loan/lease losses  2,134 1,611  6,206  2,301  2,540
Net interest income after provision for loan/lease losses $  34,774 $  37,982  $  32,108  $  29,784  $  29,863
        
        
Trust department fees $2,493$2,216 $2,196 $2,058 $2,237
Investment advisory and management fees  1,736 1,657  1,059  1,058  952
Deposit service fees  1,554 1,623  1,656  1,610  1,531
Gain on sales of residential real estate loans, net  369 361  337  102  101
Gain on sales of government guaranteed portions of loans, net  31 -  46  -  358
Swap fee income  3,198 7,069  1,110  1,649  959
Securities gains (losses), net  - -  -  -  -
Earnings on bank-owned life insurance  540 341  474  399  418
Debit card fees  792 807  846  844  766
Correspondent banking fees  216 179  195  213  265
Other   1,064 1,026  890  979  954
Total noninterest income $  11,993 $  15,279  $  8,809  $  8,912  $  8,541
        
        
Salaries and employee benefits $20,879$19,779 $17,433 $15,804 $15,978
Occupancy and equipment expense  3,694 3,367  3,318  3,133  3,066
Professional and data processing fees  2,750 3,577  2,396  2,771  2,708
Acquisition costs  - (4) 1,292  414  93
Post-acquisition compensation, transition and integration costs  134 1,427  494  165  -
FDIC insurance, other insurance and regulatory fees  964 1,065  933  840  756
Loan/lease expense  214 624  369  260  291
Net cost and gains/losses on operations of other real estate  298 2,477  (50) (70) 132
Advertising and marketing  785 1,122  984  753  693
Bank service charges  483 469  462  466  441
Correspondent banking expense  204 207  205  204  205
CDI amortization  532 540  542  305  305
Other   1,498 1,760  2,122  1,325  1,195
Total noninterest expense $  32,435 $  36,410  $  30,500  $  26,370  $  25,863
        
Net income before taxes $  14,332 $  16,851  $  10,417  $  12,326  $  12,541
Federal and state income tax expense  1,414 3,535  1,608  1,881  1,991
Net income  $  12,918 $  13,316  $  8,809  $  10,445  $  10,550
        
Basic EPS $0.82$0.85 $0.56 $0.75 $0.76
Diluted EPS $0.81$0.84 $0.55 $0.73 $0.74
        
Weighted average common shares outstanding  15,693,345 15,641,401  15,625,123  13,919,565  13,888,661
Weighted average common and common equivalent shares outstanding 15,922,940 15,898,591  15,922,324  14,232,423  14,205,584


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
   
         
 For the Quarter Ended   
 March 31,December 31,September 30,June 30,March 31,   
  2019  2018  2018  2018  2018    
         
 (dollars in thousands, except per share data)  
         
COMMON SHARE DATA        
Common shares outstanding 15,755,442  15,718,208  15,673,760  13,973,940  13,936,957    
Book value per common share (1)$31.00 $30.10 $29.18 $26.45 $25.86    
Tangible book value per common share (2)$24.98 $24.04 $23.46 $23.83 $23.20    
Closing stock price$33.92 $32.09 $40.85 $47.45 $44.85    
Market capitalization$534,425 $504,397 $640,273 $663,063 $625,073    
Market price / book value 109.42%  106.61%  139.98%  179.41%  173.43%    
Market price / tangible book value 135.77%  133.49%  174.16%  199.10%  193.33%    
Earnings per common share (basic) LTM (3)$2.99 $2.92 $2.79 $2.83 $2.74    
Price earnings ratio LTM (3)11.34 x 10.98 x 14.64 x 16.77 x 16.37 x    
TCE / TA (4) 7.92%  7.78%  7.82%  8.18%  8.10%    
         
         
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY    
Beginning balance$473,138 $457,387 $369,588 $360,428 $353,287    
Net income 12,918  13,316  8,809  10,445  10,550    
Other comprehensive income (loss), net of tax 2,343  1,943  (612) (1,335) (3,201)   
Common stock cash dividends declared (942) (939) (938) (836) (834)   
Proceeds from issuance of 1,689,561 shares of
  common stock, net of costs, as a result of the
  acquisition of Springfield First Community Bank
 -  -  80,063  -  -    
Proceeds from issuance of 23,501 shares of
  common stock, net of costs, as a result of the
  acquisition of Bates Companies
 -  1,000  -  -  -    
Other (5) 950  431  477  886  626    
Ending balance$  488,407  $  473,138  $  457,387  $  369,588  $  360,428     
         
         
REGULATORY CAPITAL RATIOS (6):        
Total risk-based capital ratio 12.22%  10.69%  10.87%  11.23%  11.25%    
Tier 1 risk-based capital ratio 9.84%  9.77%  9.83%  10.19%  10.21%    
Tier 1 leverage capital ratio 8.87%  8.87%  8.87%  9.22%  9.08%    
Common equity tier 1 ratio 8.98%  8.89%  8.92%  9.16%  9.14%    
         
         
KEY PERFORMANCE RATIOS AND OTHER METRICS        
Return on average assets (annualized) 1.04%  1.10%  0.75%  1.03%  1.06%    
Return on average total equity (annualized) 10.71%  11.42%  8.08%  11.45%  11.84%    
Net interest margin 3.25%  3.48%  3.46%  3.37%  3.50%    
Net interest margin (TEY) (Non-GAAP)(7) 3.40%  3.63%  3.60%  3.52%  3.64%    
Efficiency ratio (Non-GAAP) (8) 66.33%  66.35%  64.72%  64.32%  63.17%    
Gross loans and leases / total assets 74.99%  75.41%  76.23%  75.84%  75.87%    
Gross loans and leases / total deposits 90.59%  93.86%  96.44%  94.44%  93.14%    
Effective tax rate 9.87%  20.98%  15.44%  15.26%  15.88%    
Full-time equivalent employees (9) 771  755  728  666  639    
         
         
AVERAGE BALANCES         
Assets$4,968,502 $4,842,232 $4,677,875 $4,053,684 $3,994,691    
Loans/leases 3,759,615  3,699,885  3,612,648  3,077,517  3,019,376    
Deposits 4,110,868  3,986,236  3,840,077  3,343,003  3,239,562    
Total stockholders' equity 482,423  466,271  436,065  365,031  356,525    
         
(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, the acquisition of the    
Bates Companies and the addition of several new positions created to build scale.      


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
             
             
ANALYSIS OF NET INTEREST INCOME AND MARGIN           
             
  For the Quarter Ended
  March 31, 2019 December 31, 2018 March 31, 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 $15,736$932.40% $20,426$1152.23% $19,703$561.15%
Interest-bearing deposits at financial institutions 155,463 9232.41%  98,875 5172.07%  49,531 1971.61%
Securities (1)  660,454 6,0963.74%  671,613 6,2313.68%  649,035 5,8393.65%
Restricted investment securities 21,285 3075.85%  22,478 3185.61%  21,830 2344.35%
Loans (1)  3,759,615 46,4775.01%  3,699,885 47,2735.07%  3,019,376 34,5734.64%
Total earning assets (1)$4,612,553$53,8964.74% $4,513,277$54,4544.79% $3,759,475$40,8994.41%
             
Interest-bearing deposits$2,288,109$7,1741.27% $2,211,148$6,1101.10% $1,828,228$3,0190.67%
Time deposits  1,012,459 5,3052.12%  956,754 4,4331.84%  616,661 1,8621.22%
Short-term borrowings 14,377 712.00%  20,129 981.93%  17,271 330.77%
Federal Home Loan Bank advances 147,355 9032.49%  190,232 9742.03%  236,689 1,0641.82%
Other borrowings  43,701 6055.61%  72,264 9705.33%  64,680 7184.50%
Subordinated debentures 38,637 5645.92%  - -0.00%  - -0.00%
Junior subordinated debentures 37,686 5726.16%  37,644 5255.53%  37,510 4474.83%
Total interest-bearing liabilities$3,582,324$15,1941.72% $3,488,171$13,1101.49% $2,801,039$7,1431.03%
             
Net interest income / spread (1) $38,7023.02%  $41,3443.30%  $33,7563.38%
Net interest margin (2)  3.25%   3.48%   3.50%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.40%   3.63%   3.64%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.31%   3.40%   3.57%
             
             
(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.          
             


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
      
 As of
 March 31,December 31,September 30,June 30,March 31,
  2019  2018  2018  2018  2018 
      
 (dollars in thousands, except per share data)
      
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES     
Beginning balance$39,847 $43,077 $37,545 $36,533 $34,356 
Provision charged to expense 2,134  1,611  6,206  2,301  2,540 
Loans/leases charged off (1,059) (4,967) (991) (1,525) (436)
Recoveries on loans/leases previously charged off 242  126  317  236  73 
Ending balance$  41,164  $  39,847  $  43,077  $  37,545  $  36,533  
      
      
NONPERFORMING ASSETS      
Nonaccrual loans/leases$13,406 $14,260 $23,576 $12,554 $12,759 
Accruing loans/leases past due 90 days or more 61  632  1,410  20  41 
Troubled debt restructures - accruing 3,794  3,659  4,240  1,327  5,276 
Total nonperforming loans/leases 17,261  18,551  29,226  13,901  18,076 
Other real estate owned 9,110  9,378  12,204  12,750  12,750 
Other repossessed assets -  8  150  150  200 
Total nonperforming assets$  26,371  $  27,937  $  41,580  $  26,801  $  31,026  
      
      
ASSET QUALITY RATIOS     
Nonperforming assets / total assets 0.52%  0.56%  0.87%  0.65%  0.77% 
Allowance / total loans/leases (1) 1.08%  1.07%  1.18%  1.21%  1.20% 
Allowance / nonperforming loans/leases (1) 238.48%  214.80%  147.39%  270.09%  202.11% 
Net charge-offs as a % of average loans/leases 0.02%  0.13%  0.02%  0.04%  0.01% 
      
(1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios.


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
    
            
            
   For the Quarter Ended    
   March 31, December 31, March 31,    
 SELECT FINANCIAL DATA - SUBSIDIARIES  2019   2018   2018     
   (dollars in thousands)
    
            
 TOTAL ASSETS          
            
 Quad City Bank and Trust (1) $1,660,374  $1,623,369  $1,526,830     
 m2 Lease Funds, LLC  231,470   231,662   224,301     
 Cedar Rapids Bank and Trust  1,446,637   1,379,222   1,331,209     
 Community State Bank - Ankeny  785,076   785,364   696,979     
 Springfield First Community Bank  638,542   632,849  N/A     
 Rockford Bank and Trust  513,045   509,622   468,112     
            
 TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1) $1,453,810  $1,308,085  $1,302,005     
 Cedar Rapids Bank and Trust  1,228,232   1,167,552   1,058,251     
 Community State Bank - Ankeny  673,231   627,127   563,540     
 Springfield First Community Bank  445,113   449,983  N/A     
 Rockford Bank and Trust  433,016   431,110   379,552     
            
 TOTAL LOANS & LEASES          
            
 Quad City Bank and Trust (1) $1,238,684  $1,233,117  $1,150,120     
 m2 Lease Funds, LLC  228,356   228,646   223,654     
 Cedar Rapids Bank and Trust  1,076,166   1,037,469   1,011,971     
 Community State Bank - Ankeny  588,021   582,453   513,951     
 Springfield First Community Bank  491,985   475,801  N/A     
 Rockford Bank and Trust  404,575   403,914   378,860     
            
 TOTAL LOANS & LEASES / TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1)  85%  94%  88%    
 Cedar Rapids Bank and Trust  88%  89%  96%    
 Community State Bank - Ankeny  87%  93%  91%    
 Springfield First Community Bank  111%  106% N/A     
 Rockford Bank and Trust  93%  94%  100%    
            
            
 TOTAL LOANS & LEASES / TOTAL ASSETS          
            
 Quad City Bank and Trust (1)  75%  76%  75%    
 Cedar Rapids Bank and Trust  74%  75%  76%    
 Community State Bank - Ankeny  75%  74%  74%    
 Springfield First Community Bank  77%  75% N/A     
 Rockford Bank and Trust  79%  79%  81%    
            
 ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES          
            
 Quad City Bank and Trust (1)  1.09%  1.09%  1.16%    
 m2 Lease Funds, LLC  1.39%  1.49%  1.67%    
 Cedar Rapids Bank and Trust (2)  1.19%  1.19%  1.24%    
 Community State Bank - Ankeny (2)  1.07%  1.05%  0.95%    
 Springfield First Community Bank (2)  0.30%  0.21% N/A     
 Rockford Bank and Trust  1.74%  1.72%  1.51%    
            
 RETURN ON AVERAGE ASSETS           
            
 Quad City Bank and Trust (1)  1.19%  1.22%  1.37%    
 Cedar Rapids Bank and Trust  1.54%  1.78%  1.45%    
 Community State Bank - Ankeny  1.13%  0.94%  1.10%    
 Springfield First Community Bank  1.12%  1.74% N/A     
 Rockford Bank and Trust  0.46%  1.29%  0.61%    
            
 NET INTEREST MARGIN PERCENTAGE (3)          
            
 Quad City Bank and Trust (1)  3.24%  3.20%  3.51%    
 Cedar Rapids Bank and Trust (5)  3.41%  3.60%  3.70%    
 Community State Bank - Ankeny (4)  4.04%  4.73%  4.40%    
 Springfield First Community Bank (6)  4.06%  4.68% N/A     
 Rockford Bank and Trust  2.92%  2.87%  3.29%    
            
 ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET          
 INTEREST MARGIN, NET          
            
 Cedar Rapids Bank and Trust $144  $740  $243     
 Community State Bank - Ankeny  58   415   504     
 Springfield First Community Bank  910   1,498  N/A     
 QCR Holdings, Inc. (7)  (43)  (44)  (48)    
            
(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 3.98% for the quarter ended March 31, 2019, 4.00% for the quarter ended December 31, 2018 and 4.04% for the      
 quarter ended March 31, 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 3.38% for the quarter ended March 31, 2019, 3.36% for the quarter ended December 31, 2018 and 3.62% for the      
 quarter ended March 31, 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 3.32% for the quarter ended March 31, 2019 and 3.52% for the quarter ended December 31, 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   
  March 31 December 31, September 30, June 30, March 31,   
GAAP TO NON-GAAP RECONCILIATIONS  2019   2018   2018   2018   2018    
      
  (dollars in thousands, except per share data)
   
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)             
              
Stockholders' equity (GAAP) $  488,407  $  473,138  $  457,387  $  369,588  $  360,428    
Less: Intangible assets    94,790     95,282     89,755     36,561     37,108    
Tangible common equity (non-GAAP) $   393,617  $  377,856  $  367,632  $  333,027  $  323,320    
              
Total assets (GAAP) $  5,066,662  $  4,949,710  $  4,792,732  $  4,106,883  $  4,026,314    
Less: Intangible assets    94,790     95,282     89,755     36,561     37,108    
Tangible assets (non-GAAP) $  4,971,872  $  4,854,428  $  4,702,977  $  4,070,322  $  3,989,206    
              
Tangible common equity to tangible assets ratio (non-GAAP)  7.92%   7.78%   7.82%   8.18%   8.10%    
              
              
  For the Quarter Ended   
  March 31 December 31, September 30, June 30, March 31,   
ADJUSTED NET INCOME (2)  2019   2018   2018   2018   2018    
              
Net income (GAAP) $  12,918  $  13,316  $  8,809  $  10,445  $  10,550    
              
Less nonrecurring items (post-tax) (3):             
Income:             
Securities gains, net $  -  $  -  $  -  $  -  $  -    
Total nonrecurring income (non-GAAP) $  -  $  -  $  -  $  -  $  -    
              
Expense:             
Acquisition costs (4)    -     29     1,216     327     73    
Post-acquisition compensation, transition and integration costs   106     1,127     390     130     -    
Total nonrecurring expense (non-GAAP) $  106  $  1,156  $  1,606  $  457  $   73    
Adjusted net income  (non-GAAP) (2) $  13,024   $  14,472   $  10,415   $  10,902   $  10,623     
              
ADJUSTED EARNINGS PER COMMON SHARE (2)             
              
Adjusted net income (non-GAAP) (from above) $  13,024  $  14,472  $  10,415  $  10,902  $  10,623    
              
Weighted average common shares outstanding    15,693,345     15,641,401     15,625,123     13,919,565     13,888,661    
Weighted average common and common equivalent shares outstanding    15,922,940     15,898,591     15,922,324     14,232,423     14,205,584    
              
Adjusted earnings per common share (non-GAAP):             
Basic $  0.83   $  0.93   $  0.67   $  0.78   $  0.76     
Diluted $  0.82   $  0.91   $  0.65   $  0.77   $  0.75     
              
ADJUSTED RETURN ON AVERAGE ASSETS (2)