About QCBT

Press Release

QCR Holdings, Inc. Announces Record Net Income of $15.1 Million for the Third Quarter of 2019

Company Release - 10/23/2019 4:05 PM ET

Third Quarter 2019 Highlights

  • Net income of $15.1 million, or $0.94 per diluted share
  • Adjusted net income (non-GAAP) of $15.9 million, or $1.00 per diluted share
  • Expanded NIM and NIM (TEY)(non-GAAP) each by 12 basis points, to 3.37% and 3.52%, respectively
  • Record noninterest income of $19.9 million for the quarter and $49.0 million year-to-date
  • Definitive agreement to sell Rockford Bank & Trust (“RB&T”) to Heartland Financial USA, Inc.
  • Excluding RB&T held for sale assets and liabilities:
    º  Annualized loan and lease growth was 9.1% for the quarter and 9.4% year-to-date
    º  Deposits were down 1.7% on a linked quarter basis and up 9.6% annualized year-to-date
    º  Nonperforming assets were down $2.5 million, or 15.6% from the prior quarter

MOLINE, Ill., Oct. 23, 2019 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $15.1 million and diluted earnings per share (“EPS”) of $0.94 for the third quarter of 2019, compared to net income of $13.5 million and diluted EPS of $0.85 for the second quarter of 2019. The third quarter results included $0.7 million of post-acquisition compensation, transition and integration costs (after-tax), compared to $0.6 million of similar costs in the second quarter of 2019. Excluding these expenses and some modest cost for early debt extinguishment, the Company reported adjusted net income (non-GAAP) of $15.9 million and adjusted diluted EPS of $1.00 for the third quarter of 2019, compared to adjusted net income (non-GAAP) of $14.1 million and adjusted diluted EPS of $0.88 for the second quarter of 2019. For the third quarter of 2018, net income and diluted EPS were $8.8 million and $0.55, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $10.4 million and $0.65, respectively.

 For the Quarter Ended
 September 30,June 30,September 30,
$ in millions (except per share data) 2019 2019 2018
Net Income$15.1$13.5$8.8
Diluted EPS$0.94$0.85$0.55
Adjusted Net Income (non-GAAP)(1)$15.9$14.1$10.4
Adjusted Diluted EPS (non-GAAP)(1)$1.00$0.88$0.65
(1) See GAAP to non-GAAP reconciliations.   
    

 

“We are very pleased with our results for the third quarter,” commented Larry J. Helling, Chief Executive Officer. “We delivered another record quarter of net income, driven by continued strong loan growth, an expanded net interest margin, record fee income, improved credit quality and careful management of noninterest expenses. Despite the highly competitive lending environment, which has led to industry-wide pressure on rates, we have been able to maintain both our pricing and underwriting discipline. This helped us maintain our loan yields even as we grew loans during the quarter. We continue to attract new clients that appreciate our relationship-based community banking model.”

Agreement to sell Rockford Bank & Trust to Heartland Financial USA

On August 13, 2019 the Company announced that it had entered into a definitive agreement with Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Heartland Financial USA, Inc. to sell to IB&T substantially all of the assets and for IB&T to assume substantially all of the deposits and certain other liabilities of RB&T. The transaction is valued at approximately $59 million and the Company is expected to record an approximate $13 million pre-tax gain on the sale excluding costs. The transaction is expected to close in the fourth quarter of 2019.  As a result, substantially all of RB&T’s assets and liabilities are classified as held for sale as of September 30, 2019, which impacts balance sheet comparisons to prior quarters. 

Annualized Loan and Lease Growth of 9.1%, excluding RB&T

During the third quarter of 2019, the Company’s total assets increased $97.5 million to a total of $5.3 billion. Total loans and leases declined by $300.2 million, entirely as a result of classifying substantially all of  RB&T’s loans as held for sale, totaling $368.5 million, gross.  Excluding RB&T’s loans for both the second and third quarters of 2019, total loans and leases grew by $80.3 million, or 2.3% on a linked quarter basis.

Total deposits declined by $520.3 million mainly as a result of classifying substantially all of RB&T’s liabilities as held for sale, which included deposits of $451.5 million. Excluding RB&T’s deposits for both the second and third quarters of 2019, total deposits declined by $67.1 million, driven primarily by a decline in higher cost public funds and brokered CDs, as the Company intentionally did not renew certain deposits as they matured. At quarter-end, the percentage of wholesale funds to total assets was 11.6%, as compared to 10.0% in the second quarter. Additionally, at quarter-end, the percentage of gross loans and leases to total assets, excluding assets held for sale, remained consistent on a linked quarter basis at 75%.

“Our loan and lease growth during the third quarter was driven by solid production from both our core commercial lending business and our Specialty Finance Group,” added Mr. Helling. “Excluding RB&T, loan and lease growth for the first nine months of 2019 has been 9.4% on an annualized basis, and given our solid pipeline, we remain confident that we will be able to achieve organic loan growth of between 8% and 10% for the full year.”  

Record Net Interest Income of $40.7 million

Net interest income for the third quarter of 2019 totaled $40.7 million, compared to $38.0 million for the second quarter of 2019 and $38.3 million for the third quarter of 2018. The increase was due to growth in average interest earning assets of $93.3 million, or 2.0% on a linked quarter basis, combined with the positive impact of a 12 basis point increase in reported net interest margin. Acquisition-related net accretion totaled $1.3 million (pre-tax) for the third quarter of 2019, compared to $1.1 million for the second quarter of 2019 and was $1.7 million for the third quarter of 2018. Adjusted net interest income (non-GAAP) was $41.2 million for the third quarter of 2019, compared to $38.7 million for the second quarter of 2019 and $38.2 million for the third quarter of 2018.

In the third quarter, reported net interest margin was 3.37% and, on a tax-equivalent yield basis, net interest margin was 3.52%, both increasing by 12 basis points from the second quarter of 2019. Net interest margin, excluding acquisition-related net accretion was 3.41%, up 10 basis points from the second quarter. The increase in adjusted net interest margin during the quarter was due to a 5 basis point increase in the yield on interest earning assets combined with a 5 basis point decline in the total cost of interest-bearing funds (due to both mix and rate).

 For the Quarter Ended
 September 30,June 30,
 20192019
NIM3.37%3.25%
NIM (TEY)(non-GAAP)(1)3.52%3.40%
Adjusted NIM (TEY)(non-GAAP)(1)3.41%3.31%
(1)  See GAAP to non-GAAP reconciliations.  

“Our significant focus on expanding our net interest margin generated positive results as we produced a 12 basis-point increase in reported margin during the third quarter,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “While total deposits declined on a linked-quarter basis after excluding RB&T, it was mainly driven by an intentional runoff of higher cost public funds and brokered CDs, as our core deposits grew modestly during the quarter. Our organic loan and lease growth during the quarter was primarily funded by the excess liquidity that resulted from the strong increase in core deposits we generated in the first half of the year.”

Record Noninterest Income of $19.9 million            

Noninterest income for the third quarter of 2019 totaled $19.9 million, compared to $17.1 million for the second quarter of 2019. The increase was primarily due to a $1.9 million increase in swap fee income and $0.9 million increase on gains on the sale of residential real estate loans and the government guaranteed portions of loans. Wealth management revenue was $4.1 million for the quarter, comparable to the second quarter of 2019. Noninterest income has increased 126% when compared to the third quarter of 2018.

“Noninterest income increased 17% from the second quarter, driven primarily by another quarterly record for swap fee income. This fee income is correlated to strong production from our Specialty Finance Group in the area of tax credit project lending, where our clients are locking in long-term fixed rate financing. Swap fee income and gains on the sale of government guaranteed loans totaled $21.5 million for the first nine months of 2019, already putting us well in excess of our initial full-year target of $8 to $12 million,” added Mr. Gipple.

Noninterest Expenses of $39.9 million

Noninterest expense for the third quarter of 2019 totaled $39.9 million, compared to $36.6 million and $30.5 million for the second quarter of 2019 and third quarter of 2018, respectively. The linked quarter increase was due to a number of factors, including a $0.9 million increase in net costs of operations of other real estate, as the Company reduced the carrying value of an OREO property by $2.0 million. There was also an additional $1.5 million of bonus and commission expense in the quarter, driven by the strong financial results and higher than anticipated swap fee income.  

Asset Quality Remains Solid

Nonperforming assets (“NPAs”) totaled $13.1 million, a decrease of $10.1 million from the second quarter of 2019. Excluding RB&T NPAs held for sale, the decline was $2.5 million, or 15.6%.  The decrease was primarily due to the $2.0 million write down of an existing OREO property.  The lower NPAs resulted in the ratio of NPAs to total assets improving to 0.27% (excluding RB&T) at September 30, 2019, compared to 0.45% at June 30, 2019 and 0.87% at September 30, 2018.

The Company’s provision for loan and lease losses totaled $2.0 million for the third quarter of 2019, which was up modestly from $1.9 million from the prior quarter and down significantly from $6.2 million in the third quarter of 2018. The linked quarter increase in the provision for loan and lease losses was primarily due to $488 thousand of provision related to an RB&T nonperforming loan held for sale.  As of September 30, 2019, the Company’s allowance to total loans and leases was 1.00%, which was down from 1.05% at June 30, 2019 and down from 1.18% at September 30, 2018.

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date. Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount ($7.7 million at September 30, 2019).

Strong Capital Levels

As of September 30, 2019, the Company’s total risk-based capital ratio was 11.93%, the common equity tier 1 ratio was 8.91%, and the tangible common equity to tangible assets ratio was 8.20%. By comparison, these respective ratios were 12.04%, 8.93% and 8.05% as of June 30, 2019.

Continued Focus on Seven Key Initiatives

The Company continues to focus on the following long-term initiatives in an effort to improve profitability and drive increased shareholder value:

  • Strong organic loan and lease growth in order to maintain loans and leases to total assets ratio in the range of 73% - 78%
  • Grow core deposits to maintain reliance on wholesale funding at less than 15% of assets
  • Generate gains on sale of government guaranteed loans, and fee income on interest rate swaps, as a significant and consistent component of core revenue
  • Grow wealth management net income by 10% annually
  • Carefully manage noninterest expense growth
  • Maintain asset quality metrics at better than peer levels
  • Participate as an acquirer in the consolidation taking place in our industry to further boost return on average assets, improve efficiency ratio, and increase EPS

Conference Call Details

The Company will host an earnings call/webcast tomorrow, October 24, 2019, at 10:00 a.m. Central Time. Dial-in information for the call is toll free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through November 7, 2019. The replay access information is 877-344-7529 (international 412-317-0088); access code 10135244. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, Springfield and Rockford communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Rockford Bank & Trust Company, based in Rockford, Illinois, commenced operations in 2005, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 27 locations in Illinois, Iowa, Wisconsin and Missouri. As of September 30, 2019, the Company had approximately $5.3 billion in assets, $3.6 billion in loans and $3.8 billion in deposits. For additional information, please visit our website at www.qcrh.com.

Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “predict,” “suggest,” “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
               
A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economies (including the impact of tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations); (ii) the economic impact of any future terrorist threats and attacks, and the response of the United States to any such threats and attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x)  unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

Contacts:

Todd A. Gipple
President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
[email protected]

Christopher J. Lindell
Executive Vice President
Corporate Communications
(319) 743-7006
[email protected]

QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
         
        Held for Sale
 As of  As of
 September 30,June 30,March 31,December 31,September 30,  September 30,
 20192019201920182018  2019
         
 (dollars in thousands)   
         
CONDENSED BALANCE SHEET        
         
Cash and due from banks$91,671$87,919$76,527$85,523$73,407  $11,031
Federal funds sold and interest-bearing deposits 197,263 205,497 216,032 159,596 129,660   2,415
Securities 555,409 643,803 655,749 662,969 650,745   66,009
Net loans/leases 3,574,154 3,869,415 3,758,268 3,692,907 3,610,309   362,011
Intangibles 15,529 16,089 16,918 17,450 16,137   -
Goodwill 77,748 77,748 77,872 77,832 73,618   -
Other assets 315,061 294,381 265,296 253,433 238,856   24,081
Assets held for sale 465,547 - - - -   -
Total assets$ 5,292,382$ 5,194,852$ 5,066,662$ 4,949,710$ 4,792,732  $ 465,547
         
Total deposits$3,802,241$4,322,510$4,194,220$3,977,031$3,788,277  $451,546
Total borrowings 320,457 230,953 282,994 404,968 483,635   16,157
Other liabilities 179,411 137,089 101,041 94,573 63,433   2,827
Liabilities held for sale 470,530 - - - -   -
Total stockholders' equity 519,743 504,300 488,407 473,138 457,387   -
Total liabilities and stockholders' equity$ 5,292,382$ 5,194,852$ 5,066,662$ 4,949,710$ 4,792,732  $ 470,530
         
ANALYSIS OF LOAN PORTFOLIO        
Loan/lease mix:        
Commercial and industrial loans$1,469,978$1,548,657$1,479,247$1,429,410$1,380,543   
Commercial real estate loans 1,687,922 1,837,473 1,790,845 1,766,111 1,727,326   
Direct financing leases 92,307 101,180 108,543 117,969 126,752   
Residential real estate loans 245,667 293,479 288,502 290,759 309,288   
Installment and other consumer loans 106,540 120,947 123,087 119,381 100,191   
Deferred loan/lease origination costs, net of fees 7,856 8,783 9,208 9,124 9,286   
Total loans/leases$3,610,270$3,910,519$3,799,432$3,732,754$3,653,386   
Less allowance for estimated losses on loans/leases 36,116 41,104 41,164 39,847 43,077   
Net loans/leases$ 3,574,154$ 3,869,415$ 3,758,268$ 3,692,907$ 3,610,309   
         
ANALYSIS OF SECURITIES PORTFOLIO        
Securities mix:        
U.S. government sponsored agency securities$21,268$35,762$35,843$36,411$36,492   
Municipal securities 391,329 440,853 450,376 459,409 453,275   
Residential mortgage-backed and related securities 123,880 159,228 161,692 159,249 155,733   
Other securities 18,932 7,960 7,838 7,900 5,245   
Total securities$ 555,409$ 643,803$ 655,749$ 662,969$ 650,745   
         
ANALYSIS OF DEPOSITS        
Deposit mix:        
Noninterest-bearing demand deposits$782,232$795,951$821,599$791,101$802,090   
Interest-bearing demand deposits 2,245,557 2,505,956 2,334,474 2,204,206 2,094,814   
Time deposits 536,352 733,135 719,286 704,903 615,323   
Brokered deposits 238,100 287,468 318,861 276,821 276,050   
Total deposits$ 3,802,241$ 4,322,510$ 4,194,220$ 3,977,031$ 3,788,277   
         
ANALYSIS OF BORROWINGS        
Borrowings mix:        
Term FHLB advances$60,000$46,433$66,380$76,327$63,399   
Overnight FHLB advances (1) 135,800 59,300 59,800 190,165 295,730   
Wholesale structured repurchase agreements - - 35,000 35,000 35,000   
Customer repurchase agreements 2,421 2,181 3,056 2,084 3,049   
Federal funds purchased 16,105 17,010 12,830 26,690 8,670   
Subordinated notes 68,334 68,274 68,215 4,782 -   
Junior subordinated debentures 37,797 37,755 37,713 37,670 37,626   
Other borrowings - - - 32,250 40,161   
Total borrowings$ 320,457$ 230,953$ 282,994$ 404,968$ 483,635   
         
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 2.09%.     
         


QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
    
   For the Quarter Ended
   September 30,June 30,March 31
December 31,September 30,
   201920192019
20182018
         
   (dollars in thousands, except per share data)
         
INCOME STATEMENT       
Interest income $56,817 $54,181 $52,102 $52,703 $49,831 
Interest expense  16,098  16,168  15,194  13,110  11,517 
Net interest income  40,719  38,013  36,908  39,593  38,314 
Provision for loan/lease losses  2,012  1,941  2,134  1,611  6,206 
Net interest income after provision for loan/lease losses $ 38,707 $ 36,072 $ 34,774 $ 37,982 $ 32,108 
              
              
Trust department fees $2,340 $2,361 $2,493 $2,216 $2,196 
Investment advisory and management fees  1,782  1,888  1,736  1,657  1,059 
Deposit service fees  1,813  1,658  1,554  1,623  1,656 
Gain on sales of residential real estate loans, net  890  489  369  361  337 
Gain on sales of government guaranteed portions of loans, net  519  39  31  -  46 
Swap fee income  9,797  7,891  3,198  7,069  1,110 
Securities losses, net  (3) (52) -  -  - 
Earnings on bank-owned life insurance  489  412  540  341  474 
Debit card fees  886  914  792  807  846 
Correspondent banking fees  189  172  216  179  195 
Other   1,204  1,293  1,064  1,026  890 
Total noninterest income $ 19,906 $ 17,065 $ 11,993 $ 15,279 $ 8,809 
        
        
Salaries and employee benefits $24,215 $22,749 $20,879 $19,779 $17,433 
Occupancy and equipment expense  3,860  3,533  3,694  3,367  3,318 
Professional and data processing fees  4,030  3,031  2,750  3,577  2,396 
Acquisition costs  -  -  -  (4) 1,292 
Post-acquisition compensation, transition and integration costs  884  708  134  1,427  494 
FDIC insurance, other insurance and regulatory fees  542  926  964  1,065  933 
Loan/lease expense  221  312  214  624  369 
Net cost of (income from) and gains/losses on operations of other real estate  2,078  1,182  298  2,477  (50)
Advertising and marketing  1,056  1,037  785  1,122  984 
Bank service charges  502  508  483  469  462 
Losses on debt extinguishment, net  148  -  -  -  - 
Correspondent banking expense  209  206  204  207  205 
Intangibles amortization  560  615  532  540  542 
Other   1,640  1,753  1,498  1,760  2,122 
Total noninterest expense $ 39,945 $ 36,560 $ 32,435 $ 36,410 $ 30,500 
        
Net income before income taxes $ 18,668 $ 16,577 $ 14,332 $ 16,851 $ 10,417 
Federal and state income tax expense  3,573  3,073  1,414  3,535  1,608 
Net income  $ 15,095 $ 13,504 $ 12,918 $ 13,316 $ 8,809 
        
Basic EPS  $0.96 $0.86 $0.82 $0.85 $0.56 
Diluted EPS $0.94 $0.85 $0.81 $0.84 $0.55 
        
        
Weighted average common shares outstanding  15,739,430  15,714,588  15,693,345  15,641,401  15,625,123 
Weighted average common and common equivalent shares outstanding  15,976,742  15,938,377  15,922,940  15,898,591  15,922,324 
        



QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
    
   For the Nine Months Ended
   September 30, September 30,
   2019
 2018
      
   (dollars in thousands, except per share data)
      
INCOME STATEMENT    
Interest income $163,099  $130,175
Interest expense  47,459   27,374
Net interest income  115,640   102,801
Provision for loan/lease losses  6,087   11,046
Net interest income after provision for loan/lease losses $ 109,553  $ 91,755
      
      
Trust department fees $7,194  $6,491
Investment advisory and management fees  5,406   3,069
Deposit service fees  5,025   4,797
Gain on sales of residential real estate loans  1,748   539
Gain on sales of government guaranteed portions of loans  589   405
Swap fee income  20,886   3,718
Securities losses, net  (56)  -
Earnings on bank-owned life insurance  1,441   1,292
Debit card fees  2,591   2,456
Correspondent banking fees  578   673
Other   3,562   2,822
Total noninterest income $ 48,964  $ 26,262
      
      
Salaries and employee benefits $67,843  $49,215
Occupancy and equipment expense  11,087   9,517
Professional and data processing fees  9,811   8,016
Acquisition costs  -   1,799
Post-acquisition compensation, transition and integration costs  1,727   659
FDIC insurance, other insurance and regulatory fees  2,432   2,529
Loan/lease expense  748   920
Net cost of (income from) and gains/losses on operations of other real estate 3,557   11
Advertising and marketing  2,878   2,430
Bank service charges  1,494   1,368
Losses on debt extinguishment, net  148   -
Correspondent banking expense  619   614
Intangibles amortization  1,706   1,151
Other   4,891   4,504
Total noninterest expense $ 108,941  $ 82,733
      
Net income before income taxes $ 49,576  $ 35,284
Federal and state income tax expense  8,059   5,480
Net income  $ 41,517  $ 29,804
      
Basic EPS  $2.64  $2.06
Diluted EPS $2.60  $2.02
      
      
Weighted average common shares outstanding  15,715,788   14,477,783
Weighted average common and common equivalent shares outstanding  15,946,020   14,786,777
      



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
    
 As of and for the Quarter Ended For the Nine Months Ended
 September 30,June 30,March 31,December 31,September 30,
 September 30,September 30,
 20192019201920182018 20192018
         
 (dollars in thousands, except per share data)
         
COMMON SHARE DATA        
Common shares outstanding 15,790,462  15,772,939  15,755,442  15,718,208  15,673,760    
Book value per common share (1)$32.91 $31.97 $31.00 $30.10 $29.18    
Tangible book value per common share (2)$27.01 $26.02 $24.98 $24.04 $23.46    
Closing stock price$37.98 $34.87 $33.92 $32.09 $40.85    
Market capitalization$599,722 $550,002 $534,425 $504,397 $640,273    
Market price / book value 115.40% 109.06% 109.42% 106.61% 139.98%   
Market price / tangible book value 140.61% 134.00% 135.77% 133.49% 174.16%   
Earnings per common share (basic) LTM (3)$3.49 $3.10 $2.99 $2.92 $2.79    
Price earnings ratio LTM (3)10.88 x11.25 x11.34 x10.98 x14.64 x   
TCE / TA (4) 8.20% 8.05% 7.92% 7.78% 7.82%   
         
         
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY    
Beginning balance$504,300 $488,407 $473,138 $457,387 $369,588    
Net income 15,095  13,504  12,918  13,316  8,809    
Other comprehensive income (loss), net of tax 543  2,243  2,343  1,943  (612)   
Common stock cash dividends declared (944) (942) (942) (939) (938)   
Proceeds from issuance of 1,689,561 shares of common stock, net of costs, as a result of the acquisition of Springfield First Community Bank -  -  -  -  80,063    
Proceeds from issuance of 23,501 shares of common stock, net of costs, as a result of the acquisition of Bates Companies -  -  -  1,000  -    
Other (5) 749  1,088  950  431  477    
Ending balance$ 519,743 $ 504,300 $ 488,407 $ 473,138 $ 457,387    
         
         
REGULATORY CAPITAL RATIOS (6):        
Total risk-based capital ratio 11.93% 12.04% 12.26% 10.69% 10.87%   
Tier 1 risk-based capital ratio 9.70% 9.76% 9.87% 9.77% 9.83%   
Tier 1 leverage capital ratio 9.02% 8.96% 8.90% 8.87% 8.87%   
Common equity tier 1 ratio 8.91% 8.93% 9.02% 8.89% 8.92%   
         
         
KEY PERFORMANCE RATIOS AND OTHER METRICS         
Return on average assets (annualized) 1.16% 1.06% 1.04% 1.10% 0.75%  1.09% 0.94%
Return on average total equity (annualized) 11.70% 10.84% 10.71% 11.42% 8.08%  11.09% 10.30%
Net interest margin 3.37% 3.25% 3.25% 3.48% 3.46%  3.29% 3.45%
Net interest margin (TEY) (Non-GAAP)(7) 3.52% 3.40% 3.40% 3.63% 3.60%  3.43% 3.59%
Efficiency ratio (Non-GAAP) (8) 65.89% 66.38% 66.33% 66.35% 64.72%  66.18% 64.10%
Gross loans and leases / total assets (10) 74.80% 75.28% 74.99% 75.41% 76.23%  74.80% 76.23%
Gross loans and leases / total deposits (10) 94.95% 90.47% 90.59% 93.86% 96.44%  94.95% 96.44%
Effective tax rate 19.14% 18.54% 9.87% 20.98% 15.44%  16.26% 15.53%
Full-time equivalent employees (9) 766  773  771  755  728   766  728 
         
         
AVERAGE BALANCES         
Assets$5,217,763 $5,077,900 $4,968,502 $4,842,232 $4,677,875  $5,088,055 $4,242,083 
Loans/leases 3,962,464  3,839,674  3,759,615  3,699,885  3,612,648   3,853,918  3,236,514 
Deposits 4,302,995  4,271,391  4,110,868  3,986,236  3,840,077   4,228,418  3,474,213 
Total stockholders' equity 516,195  498,263  482,423  466,271  436,065   498,960  385,874 
         
         
         
(1) Includes accumulated other comprehensive income (loss).       
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets.     
(3) LTM : Last twelve months.        
(4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.    
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation. 
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.  
(7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.      
(8) See GAAP to Non-GAAP reconciliations.        
(9) Growth in full-time equivalents due primarily to the merger with Springfield Bancshares, Inc., the acquisition of the Bates Companies and the addition of several
   new positions created to build scale.        
(10) Excludes assets held for sale as of September 30, 2019.       
         



QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
           
ANALYSIS OF NET INTEREST INCOME AND MARGIN (4)          
            
 For the Quarter Ended
 September 30, 2019 June 30, 2019 September 30, 2018
 Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
 Average
Balance
Interest
Earned or Paid
Average
Yield or Cost
 Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
            
 (dollars in thousands)
            
Fed funds sold$7,234$422.30% $9,690$562.32% $23,199$1051.80%
Interest-bearing deposits at financial institutions 172,386 9512.19%  182,651 1,1682.56%  61,815 3232.07%
Securities (1) 626,471 6,0803.85%  644,999 6,0623.77%  667,142 5,9733.55%
Restricted investment securities 22,719 2935.12%  21,007 2905.54%  22,683 3305.77%
Loans (1) 3,962,464 51,2145.13%  3,839,674 48,4135.06%  3,612,648 44,6484.90%
Total earning assets (1)$4,791,274$58,5804.85% $4,698,021$55,9894.78% $4,387,487$51,3794.65%
            
Interest-bearing deposits$2,505,383$7,9071.25% $2,461,768$8,2711.35% $2,214,480$5,4320.97%
Time deposits 975,736 5,4862.23%  1,013,391 5,5542.20%  825,020 3,2901.58%
Short-term borrowings 17,333 982.24%  16,145 812.01%  21,407 781.45%
Federal Home Loan Bank advances 123,107 1,0233.30%  76,154 6013.17%  209,111 1,4222.70%
Other borrowings - -0.00%  10,550 923.50%  74,503 7764.13%
Subordinated debentures 68,299 1,0035.83%  68,239 9935.84%  - -0.00%
Junior subordinated debentures 37,774 5816.10%  37,731 5766.12%  37,600 5195.48%
Total interest-bearing liabilities$3,727,632$16,0981.71% $3,683,978$16,1681.76% $3,382,121$11,5171.35%
            
Net interest income / spread (1) $42,4823.14%  $39,8213.02%  $39,8623.30%
Net interest margin (2)  3.37%   3.25%   3.46%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.52%   3.40%   3.60%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) 3.41%   3.31%   3.45%
            
            
            
 For the Nine Months Ended    
 September 30, 2019 September 30, 2018  
 Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
 Average
Balance
Interest
Earned or Paid
Average
Yield or Cost
    
            
 (dollars in thousands)    
            
Fed funds sold$10,887$1912.35% $20,488$2231.46%    
Interest-bearing deposits at financial institutions 170,167 3,0422.39%  55,408 7491.81%    
Securities (1) 643,975 18,2373.79%  654,818 17,3913.55%    
Restricted investment securities 21,670 8915.50%  21,871 7764.74%    
Loans (1) 3,853,918 145,6825.05%  3,236,514 115,3654.77%    
Total earning assets (1)$4,700,617$168,0434.78% $3,989,099$134,5044.51%    
            
Interest-bearing deposits$2,418,420$23,3511.29% $1,987,371$12,5410.84%    
Time deposits 1,000,529 16,3462.18%  702,441 7,5911.44%    
Short-term borrowings 15,952 2752.30%  19,234 1861.29%    
Federal Home Loan Bank advances 115,539 2,6853.11%  206,875 3,2672.11%    
Other borrowings 18,084 5123.79%  68,742 2,3154.50%    
Subordinated debentures 58,392 2,5615.86%  - -0.00%    
Junior subordinated debentures 37,730 1,7296.13%  37,556 1,4745.25%    
Total interest-bearing liabilities$3,664,646$47,4591.73% $3,022,219$27,3741.21%    
            
Net interest income / spread (1) $120,5843.05%  $107,1303.30%    
Net interest margin (2)  3.29%   3.45%    
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.43%   3.59%    
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) 3.33%   3.49%    
            
            
            
(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. 
(2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.    
(3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.         
(4) Interest earning assets and interest bearing liabilities classified as held for sale as of September 30, 2019 are included in the calculations above.    
     


QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
  
 As of
 September 30,June 30,March 31,December 31,September 30,
 2019
2019
2019
2018
2018
      
 (dollars in thousands, except per share data)
      
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES     
Beginning balance$41,104 $41,164 $39,847 $43,077 $37,545 
Allowance related to held for sale loans (6,062) -  -  -  - 
Provision charged to expense (2) 1,524  1,941  2,134  1,611  6,206 
Loans/leases charged off (739) (2,152) (1,059) (4,967) (991)
Recoveries on loans/leases previously charged off 289  151  242  126  317 
Ending balance$ 36,116 $ 41,104 $ 41,164 $ 39,847 $ 43,077 
      
      
NONPERFORMING ASSETS      
Nonaccrual loans/leases$8,231 $13,148 $13,406 $14,260 $23,576 
Accruing loans/leases past due 90 days or more -  58  61  632  1,410 
Troubled debt restructures - accruing 763  1,313  3,794  3,659  4,240 
Total nonperforming loans/leases 8,994  14,519  17,261  18,551  29,226 
Other real estate owned 4,248  8,637  9,110  9,378  12,204 
Other repossessed assets -  -  -  8  150 
Total nonperforming assets$ 13,242 $ 23,156 $ 26,371 $ 27,937 $ 41,580 
      
      
ASSET QUALITY RATIOS     
Nonperforming assets / total assets (3) 0.27% 0.45% 0.52% 0.56% 0.87%
Allowance / total loans/leases (1) 1.00% 1.05% 1.08% 1.07% 1.18%
Allowance / nonperforming loans/leases (1) 401.56% 283.10% 238.48% 214.80% 147.39%
Net charge-offs as a % of average loans/leases 0.01% 0.05% 0.02% 0.13% 0.02%
      
(1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios.
(2) Excludes provision related to loans included in assets held for sale of $488 thousand for the quarter ending September 30, 2019.
(3) Excludes assets held for sale as of September 30, 2019.    
     



QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
            
   For the Quarter EndedFor the Nine Months Ended
   September 30, June 30, September 30, September 30, September 30,
 SELECT FINANCIAL DATA - SUBSIDIARIES 2019 2019 2018 2019 2018
            
            
            
            
   (dollars in thousands)
            
 TOTAL ASSETS          
            
 Quad City Bank and Trust (1) $1,642,950  $1,637,115  $1,579,327     
 m2 Lease Funds, LLC  232,432   234,072   235,214     
 Cedar Rapids Bank and Trust  1,592,896   1,527,521   1,354,294     
 Community State Bank - Ankeny  801,596   806,704   734,536     
 Springfield First Community Bank  693,897   671,644   623,520     
            
 TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1) $1,371,721  $1,434,467  $1,288,387     
 Cedar Rapids Bank and Trust  1,271,828   1,283,151   1,086,908     
 Community State Bank - Ankeny  695,980   705,777   586,929     
 Springfield First Community Bank  484,225   471,340   439,669     
            
 TOTAL LOANS & LEASES          
            
 Quad City Bank and Trust (1) $1,290,195  $1,273,400  $1,195,380     
 m2 Lease Funds, LLC  230,061   230,676   232,846     
 Cedar Rapids Bank and Trust  1,148,952   1,100,823   1,046,053     
 Community State Bank - Ankeny  594,227   597,486   538,723     
 Springfield First Community Bank  526,466   515,566   480,969     
            
 TOTAL LOANS & LEASES / TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1)  94%  89%  93%    
 Cedar Rapids Bank and Trust  90%  86%  96%    
 Community State Bank - Ankeny  85%  85%  92%    
 Springfield First Community Bank  109%  109%  109%    
            
            
 TOTAL LOANS & LEASES / TOTAL ASSETS          
            
 Quad City Bank and Trust (1)  79%  78%  76%    
 Cedar Rapids Bank and Trust  72%  72%  77%    
 Community State Bank - Ankeny  74%  74%  73%    
 Springfield First Community Bank  76%  77%  77%    
            
 ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES          
            
 Quad City Bank and Trust (1)  1.07%  1.06%  1.11%    
 m2 Lease Funds, LLC  1.39%  1.38%  1.50%    
 Cedar Rapids Bank and Trust (2)  1.17%  1.19%  1.26%    
 Community State Bank - Ankeny (2)  1.13%  1.09%  1.01%    
 Springfield First Community Bank (2)  0.42%  0.37%  0.10%    
            
 RETURN ON AVERAGE ASSETS           
            
 Quad City Bank and Trust (1)  1.33%  1.22%  1.36%  1.25%  1.34%
 Cedar Rapids Bank and Trust  2.04%  1.95%  1.47%  1.85%  1.46%
 Community State Bank - Ankeny  1.71%  1.17%  1.43%  1.33%  1.27%
 Springfield First Community Bank  1.32%  1.37%  1.51%  1.27%  1.51%
            
 NET INTEREST MARGIN PERCENTAGE (3)          
            
 Quad City Bank and Trust (1)  3.49%  3.29%  3.38%  3.34%  3.45%
 Cedar Rapids Bank and Trust (5)  3.41%  3.41%  3.53%  3.41%  3.58%
 Community State Bank - Ankeny (4)  4.83%  4.08%  4.40%  4.32%  4.38%
 Springfield First Community Bank (6)  3.64%  4.10%  4.36%  3.93%  4.36%
            
 ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET        
 INTEREST MARGIN, NET          
            
 Cedar Rapids Bank and Trust $229  $71  $158  $444  $610 
 Community State Bank - Ankeny  649   76   445   783   1,331 
 Springfield First Community Bank  432   971   1,119   2,313   1,119 
 QCR Holdings, Inc. (7)  (42)  (42)  (45)  (127)  (139)
            
(1)Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Lease Funds, LLC  
 is also presented separately for certain (applicable) measurements.          
(2)Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio.    
(3)Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using  
 a 21% tax rate.          
(4)Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest  
 margin would have been 4.46% for the quarter ended September 30, 2019, 4.01% for the quarter ended June 30, 2019 and 4.11% for the   
 quarter ended September 30, 2018.          
(5)Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest
 margin would have been 3.34% for the quarter ended September 30, 2019, 3.39% for the quarter ended June 30, 2019 and 3.48% for the   
 quarter ended September 30, 2018.          
(6)Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest
 margin would have been 3.16% for the quarter ended September 30, 2019, 3.39% for the quarter ended June 30, 2019 and 3.45% for the   
 quarter ended September 30, 2018.          
(7)Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013. 
            



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
                          
  As of     
  September 30, June 30 March 31 December 31, September 30,     
GAAP TO NON-GAAP RECONCILIATIONS 2019
 2019
 2019
 2018
 2018
     
                
                
                
                
  (dollars in thousands, except per share data)
     
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)               
                
Stockholders' equity (GAAP) $519,743  $504,300  $488,407  $473,138  $457,387      
Less: Intangible assets  93,277   93,837   94,790   95,282   89,755      
Tangible common equity (non-GAAP) $426,466  $410,463  $393,617  $377,856  $367,632      
                
Total assets (GAAP) $5,292,382  $5,194,852  $5,066,662  $4,949,710  $4,792,732      
Less: Intangible assets  93,277   93,837   94,790   95,282   89,755      
Tangible assets (non-GAAP) $5,199,105  $5,101,015  $4,971,872  $4,854,428  $4,702,977      
                
Tangible common equity to tangible assets ratio (non-GAAP)  8.20%  8.05%  7.92%  7.78%  7.82%     
                
                
  For the Quarter Ended For the Nine Months Ended 
  September 30, June 30, March 31 December 31, September 30, September 30, September 30, 
ADJUSTED NET INCOME (2) 2019
 2019
 2019
 2018
 2018
 2019
 2018
 
                
Net income (GAAP) $15,095  $13,504  $12,918  $13,316  $8,809  $41,517  $29,804  
                
Less nonrecurring items (post-tax) (3):               
Income:               
Securities gains, net  (2) $(41) $-  $-  $-  $(43) $-  
Total nonrecurring income (non-GAAP) $(2) $(41) $-  $-  $-  $(43) $-  
                
Expense:               
Losses on debt extinguishment, net $117  $-  $-  $-  $-  $117  $-  
Acquisition costs (4)  -   -   -   29   1,216   -   1,616  
Post-acquisition compensation, transition and integration costs 698   559   106   1,127   390   1,363   520  
Total nonrecurring expense (non-GAAP) $815  $559  $106  $1,156  $1,606  $1,480  $2,136  
                              
Adjusted net income (non-GAAP) (2) $ 15,912  $ 14,104  $ 13,024  $ 14,472  $ 10,415  $ 43,040  $ 31,940  
                
ADJUSTED EARNINGS PER COMMON SHARE (2)               
                
Adjusted net income (non-GAAP) (from above) $15,912  $14,104  $13,024  $14,472  $10,415  $43,040  $31,940  
                
Weighted average common shares outstanding  15,739,430   15,714,588   15,693,345   15,641,401   15,625,123   15,715,788   14,477,783  
Weighted average common and common equivalent shares outstanding 15,976,742   15,938,377   15,922,940   15,898,591   15,922,324   15,946,020   14,786,777  
                
Adjusted earnings per common share (non-GAAP):               
Basic $ 1.01  $ 0.90  $ 0.83  $ 0.93  $ 0.67  $ 2.74  $ 2.21  
Diluted $ 1.00  $ 0.88  $ 0.82  $ 0.91  $ 0.65  $ 2.70  $ 2.16  
                
ADJUSTED RETURN ON AVERAGE ASSETS (2)               
                
Adjusted net income (non-GAAP) (from above) $15,912  $14,104  $13,024  $14,472  $10,415  $43,040  $31,940  
                
Average Assets $5,217,763  $5,077,900  $4,968,502  $4,842,232  $4,677,875  $5,088,055  $4,242,083  
                
Adjusted return on average assets (annualized) (non-GAAP)  1.22%  1.11%  1.05%  1.20%  0.89%  1.13%  1.00% 
                
NET INTEREST MARGIN (TEY) (6)               
                
Net interest income (GAAP) $40,719  $38,013  $36,908  $39,593  $38,314  $115,640  $102,801  
                
Plus: Tax equivalent adjustment (5)  1,763   1,808   1,794   1,751   1,548   4,944   4,329  
                
Net interest income - tax equivalent (Non-GAAP) $42,482  $39,821  $38,702  $41,344  $39,862  $120,584  $107,130  
                
Less: Acquisition accounting net accretion  1,268   1,076   1,069   2,609   1,677   3,413   2,921  
                
Adjusted net interest income $41,214  $38,745  $37,633  $38,735  $38,185  $117,171  $104,209  
                
Average earning assets $4,791,274  $4,698,021  $4,612,553  $4,513,277  $4,387,487  $4,700,617  $3,989,099  
                
Net interest margin (GAAP)  3.37%  3.25%  3.25%  3.48%  3.46%  3.29%  3.45% 
Net interest margin (TEY) (Non-GAAP)  3.52%  3.40%  3.40%  3.63%  3.60%  3.43%  3.59% 
Adjusted net interest margin (TEY) (Non-GAAP)  3.41%  3.31%  3.31%  3.40%  3.45%  3.33%  3.49% 
                
EFFICIENCY RATIO (7)               
                
Noninterest expense (GAAP) $39,945  $36,560  $32,435  $36,410  $30,500  $108,941  $82,733  
                
Net interest income (GAAP) $40,719  $38,013  $36,908  $39,593  $38,314  $115,640  $102,801  
Noninterest income (GAAP)  19,906   17,065   11,993   15,279   8,809   48,964   26,262  
Total income $60,625  $55,078  $48,901  $54,872  $47,123  $164,604  $129,063  
                
Efficiency ratio (noninterest expense/total income) (Non-GAAP)  65.89%  66.38%  66.33%  66.35%  64.72%  66.18%  64.10% 
                
(1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes
   period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most
   directly comparable GAAP financial measures.
(2) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are
   non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-recurring income and expense items,
   therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is
   the most directly comparable GAAP financial measure.
(3) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21%.
(4) Acquisition costs were analyzed individually for deductibility. Presented amounts are tax-effected accordingly.
(5) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
(6) Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans
   and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP
   measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the
   impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
(7) Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue.
   In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most
   directly comparable GAAP financial measures.
                

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Source: QCR Holdings, Inc.