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CST: 22/07/2019 19:56:03   

QCR Holdings, Inc. Announces Record Net Income for the Fourth Quarter and Full Year 2018

179 Days ago

Fourth Quarter 2018 Highlights

  • Net income of $13.3 million, or $0.84 per diluted share
  • Adjusted net income (non-GAAP) of $14.5 million, or $0.91 per diluted share
  • Annualized organic loan and lease growth of 8.7% for the quarter and 9.8% for the year
  • Annualized organic deposit growth of 19.8% for the quarter and 8.3% for the year
  • Record noninterest income of $15.3 million for the quarter and $41.5 million for the year
  • Nonperforming assets down $13.6 million, or 32.8% from prior quarter
  • Acquisition of the Bates Companies completed on October 1, 2018

MOLINE, Ill., Jan. 24, 2019 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $13.3 million and diluted earnings per share (“EPS”) of $0.84 for the fourth quarter of 2018, compared to net income of $8.8 million and diluted EPS of $0.55 for the third quarter of 2018. The fourth quarter results included $1.2 million of acquisition and post-acquisition compensation, transition and integration costs (after-tax), compared to $1.6 million of similar costs in the third quarter of 2018. Excluding these adjustments, the Company reported adjusted net income (non-GAAP) of $14.5 million and adjusted diluted EPS of $0.91 for the fourth quarter of 2018, compared to adjusted net income (non-GAAP) of $10.4 million and adjusted diluted EPS of $0.65 for the third quarter of 2018. For the fourth quarter of 2017, GAAP net income and adjusted net income (non-GAAP) were the same at $9.9 million and $0.70 per diluted share.

For the year ended December 31, 2018, the Company reported net income of $43.1 million, and diluted EPS of $2.86. Adjusting for acquisition and post-acquisition compensation, transition and integration costs, the Company reported adjusted net income (non-GAAP) of $46.4 million and adjusted diluted EPS of $3.08. By comparison, for the year ended December 31, 2017, the Company reported net income of $35.7 million and diluted EPS of $2.61, and adjusted net income (non-GAAP) of $36.3 million and adjusted diluted EPS of $2.66.

On October 1, 2018, the Company completed its previously announced acquisition of Bates Financial Advisors, Inc., Bates Financial Services, Inc., Bates Securities, Inc., and Bates Financial Group, Inc. (the “Bates Companies”). The Bates Companies are headquartered in Rockford, Illinois and added approximately $700 million in assets under management, as of September 30, 2018.

“We are pleased with our financial performance in 2018, delivering record net income, which translated into a 16% increase in adjusted earnings per share,” said Doug Hultquist, President and CEO of the Company. “Our strong financial results were driven by increases in both loans and deposits and significantly higher noninterest income. And while our net interest margin was adversely impacted by the flattening of the yield curve over the course of 2018, we were able to grow adjusted net interest income by 19% from 2017. We also were pleased to have completed our merger with Springfield Bancshares, an excellent strategic and cultural fit for our company, and the acquisition of the Bates Companies, a nice addition to our wealth management business.”

Mr. Hultquist continued, “We finished the year with strong momentum in the fourth quarter, delivering solid loan and lease production, successfully attracting new deposits and generating record fee income. We were also successful in reducing our nonperforming assets by 33%, as we monetized a number of positions during the quarter. Looking to 2019, we remain optimistic, as we continue to make the investments that we believe will lead to improved profitability and enhanced shareholder value in the years to come.”

Annualized Organic Loan and Lease Growth of 8.7% for the Quarter
and 9.8% for the Year

During the fourth quarter of 2018, the Company’s total assets increased $157.0 million, to a total of $4.9 billion, while total loans and leases grew $79.4 million, or a 2.2% increase, compared to the third quarter of 2018. Loan and lease growth was funded by an increase in core deposits. Core deposits (excluding brokered deposits) increased $187.0 million, or 5.3% on a linked quarter basis. At quarter-end, the percentage of wholesale funds to total assets was 13.8%, which is a solid decline from 15.9% from the third quarter.  Additionally, at quarter-end, the percentage of gross loans and leases to total assets was 75%, a slight decline from the third quarter, as a result of an increase in liquidity due to the strong growth in core deposits.  

“Our loan growth for the quarter was driven by strong loan production, with particular strength in commercial and industrial and owner occupied commercial real estate loans,” added Mr. Hultquist. “However, we continue to experience an elevated level of payoffs, driven by a combination of factors, including business clients experiencing healthy cash flows, clients selling their companies, or real estate developer clients selling their completed projects. Because of the trends that we are experiencing in paydowns, combined with a general sense of caution among a number of our clients, we are adjusting our goal for organic loan growth in 2019 to between 8% and 10%.”

Net Interest Income of $39.6 million

Net interest income for the fourth quarter of 2018 totaled $39.6 million, compared to $38.3 million for the third quarter of 2018 and $31.8 million for the fourth quarter of 2017. The increase in net interest income was due to an increase in average loan balances of $87.2 million, or a 2.4% increase, on a linked quarter basis. Acquisition-related net accretion totaled $2.6 million (pre-tax) for the fourth quarter of 2018, compared to $1.7 million in the third quarter of 2018 and $0.7 million for the fourth quarter of 2017. Adjusted net interest income (non-GAAP) was $38.7 million for the fourth quarter of 2018, compared to $38.2 million for the third quarter of 2018, or an increase of 1.4% on a linked quarter basis.

Net interest income totaled $142.4 million for the year ended December 31, 2018, compared to $116.1 million for the year ended December 31, 2017.

In the fourth quarter, reported net interest margin was 3.48%, and on a tax-equivalent yield basis, net interest margin was 3.63%. This represented an increase in net interest margin and tax-equivalent net interest margin from the third quarter of two basis points and three basis points, respectively. Net interest margin, excluding acquisition-related net accretion was 3.40% in the fourth quarter, for a decline of five basis points from the third quarter of 2018. This decline in adjusted net interest margin was due to increases in the Company’s cost of funds (due to both mix and rate) and excess liquidity due to the strong deposit growth in the quarter, and was partially offset by higher yields on the Company’s loans.

  For the Quarter Ended
  For the Year Ended
  Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31,     Dec. 31,
  2018   2018   2017   2018     2017
NIM 3.48%   3.46%   3.41%   3.46%     3.50%
NIM (TEY)(non-GAAP)(1) 3.63%   3.60%   3.69%   3.62%     3.78%
Adjusted NIM (TEY)(non-GAAP)(1) 3.40%   3.45%   3.61%   3.48%     3.64%
(1) See GAAP to non-GAAP reconciliations.

“Competition for new deposits remains strong, and as a result, our overall cost of funds, excluding acquisition amortization, increased by thirteen basis points during the quarter,” 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 eleven basis points during the fourth quarter.”

Record Noninterest Income of $15.3 million
Led by Swap Fee Income of $7.1 million

Noninterest income for the fourth quarter of 2018 totaled $15.3 million, compared to $8.8 million for the third quarter of 2018. The significant increase was primarily due to $6.0 million in higher swap fee income and a $0.6 million increase in wealth management revenue primarily due to the acquisition of the Bates Companies. Wealth management revenue was $3.9 million for the quarter, a 19.0% increase from the third quarter of 2018. Noninterest income increased 57.3% when comparing the current quarter to the fourth quarter of 2017.

Noninterest income totaled $41.5 million for the year ended December 31, 2018, compared to $30.5 million for the year ended December 31, 2017.

“Noninterest income was up over 73% from the third quarter of 2018, driven primarily by significantly higher swap fee income, which is correlated to our strong production from our Specialty Finance Group in the area of tax credit lending where our clients are locking in long-term fixed rate financing,” added Mr. Gipple. “Additionally, we are pleased with our full year wealth management revenue growth of over 20%, despite a down market for equities, which reflects our success in attracting new assets under management. For 2018, swap fee income and gain on sale of loans combined for over $11 million, well in excess of our annual target of $4 million.”

Noninterest Expenses of $36.4 million

Noninterest expenses for the fourth quarter of 2018 totaled $36.4 million, compared to $30.5 million and $31.4 million for the third quarter of 2018 and fourth quarter of 2017, respectively. The linked quarter increase was due to a number of factors, including a $2.5 million increase in net costs of operations of other real estate.  The Company reduced the carrying value of an OREO property by $2.0 million and also sold an OREO property at a loss of $424 thousand.  There was also a $1.4 million increase in incentives and commissions, driven by the higher swap fee income. Salaries were $1.1 million higher than the third quarter of 2018 as a result of the Bates Companies acquisition and company-wide headcount additions in both business development and operational support.  Additionally, there was a $1.2 million increase in professional and data processing fees.

Asset Quality Improvement

Nonperforming assets (“NPAs”) totaled $27.9 million, a decrease of $13.6 million from the third quarter of 2018, primarily due to a combination of factors, including $4.9 million in net charge-offs on loans, a $3.5 million paydown on a large nonaccrual loan, a $1.3 million reduction in OREO from a sale (including a $0.4 million loss on sale), and a $2.0 million write-down of an OREO property that the Company is actively marketing for sale. The lower NPAs resulted in the ratio of NPAs to total assets improving to 0.56% at December 31, 2018, down from 0.87% at September 30, 2018 and down from 0.81% at December 31, 2017.

The Company’s provision for loan and lease losses totaled $1.6 million for the fourth quarter of 2018, which was down $4.6 million from the prior quarter and down $0.6 million compared to the fourth quarter of 2017. The linked quarter decrease in the provision for loan and lease losses was primarily due to a more favorable outcome than expected on a large credit that was partially charged off. As of December 31, 2018, the Company’s allowance to total loans and leases was 1.07%, which was down from 1.18% at September 30, 2018 and down from 1.16% at December 31, 2017.

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 ($11.6 million at December 31, 2018).

Capital Levels

As of December 31, 2018, the Company’s total risk-based capital ratio was 10.72%, the common equity Tier 1 ratio was 8.89%, and the tangible common equity to tangible assets ratio was 7.78%. By comparison, these respective ratios were 10.87%, 8.92% and 7.82% as of September 30, 2018. The decline in capital ratios from September 30, 2018 to December 31, 2018 was the result of the Bates Companies transaction, including the related purchase accounting adjustments, as well as balance sheet growth 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, January 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 February 8, 2019. The replay access information is toll-free 877-344-7529 (international 412-317-0088); access code 10127800. 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 December 31, 2018, QCR Holdings had approximately $4.9 billion in assets, $3.7 billion in loans and $4.0 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
  December 31, September 30, June 30, March 31, December 31,
  2018 2018 2018 2018 2017
           
  (dollars in thousands)
CONDENSED BALANCE SHEET          
           
Cash and due from banks $ 85,523 $ 73,407 $ 69,069 $ 61,846 $ 75,722
Federal funds sold and interest-bearing deposits   159,596   129,660   51,667   59,557   85,962
Securities   662,969   650,745   657,997   640,906   652,382
Net loans/leases   3,692,907   3,610,309   3,077,247   3,018,370   2,930,130
Intangibles   17,450   16,137   8,470   8,774   9,079
Goodwill   77,832   73,618   28,091   28,334   28,334
Other assets   253,433   238,856   214,342   208,527   201,056
Total assets $     4,949,710 $     4,792,732 $     4,106,883 $     4,026,314 $     3,982,665
           
Total deposits $ 3,977,030 $ 3,788,277 $ 3,298,276 $ 3,280,001 $ 3,266,655
Total borrowings   404,969   483,635   380,392   334,802   309,479
Other liabilities   94,573   63,433   58,627   51,083   53,244
Total stockholders' equity   473,138   457,387   369,588   360,428   353,287
Total liabilities and stockholders' equity $     4,949,710 $     4,792,732 $     4,106,883 $     4,026,314 $     3,982,665
           
ANALYSIS OF LOAN PORTFOLIO          
Loan/lease mix:          
Commercial and industrial loans $ 1,429,410 $ 1,380,543 $ 1,273,000 $ 1,201,086 $ 1,134,516
Commercial real estate loans   1,766,111   1,727,326   1,349,319   1,357,703   1,303,492
Direct financing leases   117,968   126,752   133,197   137,615   141,448
Residential real estate loans   302,979   309,288   257,434   254,484   258,646
Installment and other consumer loans   107,162   100,191   92,952   95,912   118,611
Deferred loan/lease origination costs, net of fees   9,124   9,286   8,890   8,103   7,773
Total loans/leases $ 3,732,754 $ 3,653,386 $ 3,114,792 $ 3,054,903 $ 2,964,486
Less allowance for estimated losses on loans/leases   39,847   43,077   37,545   36,533   34,356
Net loans/leases $     3,692,907 $     3,610,309 $     3,077,247 $     3,018,370 $     2,930,130
           
ANALYSIS OF SECURITIES PORTFOLIO          
Securities mix:          
U.S. government sponsored agency securities $ 36,411 $ 36,492 $ 35,667 $ 36,868 $ 38,097
Municipal securities   459,409   453,275   458,510   438,736   445,049
Residential mortgage-backed and related securities   159,249   155,733   158,534   157,333   163,301
Other securities   7,900   5,245   5,286   7,969   5,935
Total securities $     662,969 $     650,745 $     657,997 $     640,906 $     652,382
           
ANALYSIS OF DEPOSITS          
Deposit mix:          
Noninterest-bearing demand deposits $ 791,101 $ 802,090 $ 746,822 $ 784,815 $ 789,548
Interest-bearing demand deposits   2,204,206   2,094,814   1,865,382   1,789,019   1,855,893
Time deposits   704,903   615,323   519,999   496,644   516,058
Brokered deposits   276,820   276,050   166,073   209,523   105,156
Total deposits $     3,977,030 $     3,788,277 $     3,298,276 $     3,280,001 $     3,266,655
           
ANALYSIS OF BORROWINGS          
Borrowings mix:          
Term FHLB advances $ 76,327 $ 63,399 $ 46,600 $ 56,600 $ 56,600
Overnight FHLB advances (1)   190,165   295,730   207,500   159,745   135,400
Wholesale structured repurchase agreements   35,000   35,000   35,000   35,000   35,000
Customer repurchase agreements   2,084   3,049   2,186   3,820   7,003
Federal funds purchased   26,690   8,670   15,400   13,040   6,990
Junior subordinated debentures   37,670   37,626   37,581   37,534   37,486
Other borrowings   37,033   40,161   36,125   29,063   31,000
Total borrowings $     404,969 $     483,635 $     380,392 $     334,802 $     309,479
           
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 2.63%.
           

  

               
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
               
      For the Quarter Ended
      December 31, September 30, June 30, March 31, December 31,
      2018 2018 2018 2018 2017
               
      (dollars in thousands, except per share data)
INCOME STATEMENT            
Interest income   $   52,703   $   49,831   $   40,799   $   39,546 $   37,878  
Interest expense       13,110       11,517       8,714       7,143     6,085  
Net interest income        39,593       38,314       32,085       32,403     31,793  
Provision for loan/lease losses       1,611       6,206       2,301       2,540     2,255  
Net interest income after provision for loan/lease losses   $     37,982   $     32,108   $     29,784   $     29,863 $     29,538  
               
               
Trust department fees   $   2,216   $   2,196   $   2,058   $   2,237 $   2,034  
Investment advisory and management fees       1,657       1,059       1,058       952     1,071  
Deposit service fees       1,623       1,656       1,610       1,531     1,622  
Gain on sales of residential real estate loans       361       337       102       101     101  
Gain on sales of government guaranteed portions of loans       -        46       -        358     34  
Swap fee income       7,069       1,110       1,649       959     2,460  
Securities gains (losses), net       -        -        -        -      (63 )
Earnings on bank-owned life insurance       341       474       399       418     445  
Debit card fees       807       846       844       766     741  
Correspondent banking fees       179       195       213       265     231  
Other          1,026       890       979       954     1,038  
Total noninterest income   $     15,279   $     8,809   $     8,912   $     8,541 $     9,714  
               
               
Salaries and employee benefits   $   19,779   $   17,433   $   15,804   $   15,978 $   16,060  
Occupancy and equipment expense       3,367       3,318       3,133       3,066     3,221  
Professional and data processing fees       3,577       2,396       2,771       2,708     3,382  
Acquisition costs       (4 )     1,292       414       93     661  
Post-acquisition transition and integration costs       1,427       494       165       -      3,787  
FDIC insurance, other insurance and regulatory fees       1,065       933       840       756     795  
Loan/lease expense       624       369       260       291     352  
Net cost of (income from) operation of other real estate       2,477       (50 )     (70 )     132     120  
Advertising and marketing       1,122       984       753       693     778  
Bank service charges       469       462       466       441     439  
Correspondent banking expense       207       205       204       205     203  
CDI amortization       540       542       305       305     308  
Other         1,760       2,122       1,325       1,195     1,245  
Total noninterest expense   $     36,410   $     30,500   $     26,370   $     25,863 $     31,351  
               
Net income before taxes   $     16,851   $     10,417   $     12,326   $     12,541 $     7,901  
Income tax expense (benefit)       3,535       1,608       1,881       1,991     (2,001 )
Net income     $     13,316   $     8,809   $     10,445   $     10,550 $     9,902  
               
Basic EPS   $   0.85   $   0.56   $   0.75   $   0.76 $   0.72  
Diluted EPS   $   0.84   $   0.55   $   0.73   $   0.74 $   0.70  
               
Weighted average common shares outstanding       15,641,401       15,625,123       13,919,565       13,888,661     13,845,497  
Weighted average common and common equivalent shares outstanding     15,898,591       15,922,324       14,232,423       14,205,584     14,193,191  
               

 

           
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
      For the Year Ended
      December 31,   December 31,
      2018   2017
           
    (dollars in thousands, except per share data)
INCOME STATEMENT        
Interest income   $ 182,879   $ 135,517  
Interest expense     40,484     19,452  
Net interest income     142,395     116,065  
Provision for loan/lease losses     12,658     8,470  
Net interest income after provision for loan/lease losses   $     129,737   $     107,595  
           
Trust department fees   $ 8,707   $ 7,188  
Investment advisory and management fees     4,726     3,870  
Deposit service fees     6,420     5,919  
Gain on sales of residential real estate loans     901     409  
Gain on sales of government guaranteed portions of loans     405     1,164  
Swap fee income     10,787     3,095  
Securities gains (losses), net     -     (88 )
Earnings on bank-owned life insurance     1,632     1,802  
Debit card fees     3,263     2,942  
Correspondent banking fees     852     916  
Other       3,848     3,265  
Total noninterest income   $     41,541   $     30,482  
           
Salaries and employee benefits   $ 68,994   $ 55,722  
Occupancy and equipment expense     12,884     10,938  
Professional and data processing fees     11,452     10,757  
Acquisition costs     1,795     1,069  
Post-acquisition compensation, transition and integration costs     2,086     4,310  
FDIC insurance, other insurance and regulatory fees     3,594     2,752  
Loan/lease expense     1,544     1,164  
Net cost of operation of other real estate     2,489     2  
Advertising and marketing     3,552     2,625  
Bank service charges     1,838     1,771  
Correspondent banking expense     821     807  
CDI amortization     1,692     1,001  
Other       6,402     4,506  
Total noninterest expense   $     119,143   $     97,424  
           
Net income before taxes   $     52,135   $     40,653  
Income tax expense     9,015     4,946  
Net income     $     43,120   $     35,707  
           
Basic EPS   $ 2.92   $ 2.68  
Diluted EPS   $ 2.86   $ 2.61  
           
Weighted average common shares outstanding     14,768,687     13,325,128  
Weighted average common and common equivalent shares outstanding     15,064,730     13,680,472  
           

 

                 
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
                         
  For the Quarter Ended   For the Year Ended



 
  December 31, September 30, June 30, March 31, December 31,   December 31,
  December 31,
  2018 2018 2018 2018 2017   2018
  2017
                 
  (dollars in thousands, except per share data)
 
COMMON SHARE DATA                
Common shares outstanding   15,718,208     15,673,760     13,973,940     13,936,957     13,918,168        
Book value per common share (1) $ 30.10   $ 29.18   $ 26.45   $ 25.86   $ 25.38        
Tangible book value per common share (2) $ 24.04   $ 23.46   $ 23.83   $ 23.20   $ 22.70        
Closing stock price $ 32.09   $ 40.85   $ 47.45   $ 44.85   $ 42.85        
Market capitalization $ 504,397   $ 640,273   $ 663,063   $ 625,073   $ 596,393        
Market price / book value   106.61 %   139.98 %   179.41 %   173.43 %   168.81 %      
Market price / tangible book value   133.49 %   174.16 %   199.10 %   193.33 %   188.81 %      
Earnings per common share (basic) LTM (3) $ 2.92   $ 2.79   $ 2.83   $ 2.74   $ 2.69        
Price earnings ratio LTM (3)   10.98 x   14.64 x   16.77 x   16.37 x   15.93 x      
TCE / TA (4)   7.78 %   7.82 %   8.18 %   8.10 %   8.01 %      
                 
                 
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY        
Beginning balance $ 457,387   $ 369,588   $ 360,428   $ 353,287   $ 313,039        
Net income   13,316     8,809     10,445     10,550     9,902        
Other comprehensive income (loss), net of tax   1,943     (612 )   (1,335 )   (3,201 )   (295 )      
Common stock cash dividends declared   (939 )   (938 )   (836 )   (834 )   (693 )      
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        
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)   431     477     886     626     593        
Ending balance $     473,138   $     457,387   $     369,588   $     360,428   $     353,287        
                 
                 
REGULATORY CAPITAL RATIOS (6):                
Total risk-based capital ratio   10.72 %   10.87 %   11.23 %   11.25 %   11.15 %      
Tier 1 risk-based capital ratio   9.78 %   9.83 %   10.19 %   10.21 %   10.14 %      
Tier 1 leverage capital ratio   8.76 %   8.87 %   9.22 %   9.08 %   8.98 %      
Common equity tier 1 ratio   8.89 %   8.92 %   9.16 %   9.14 %   9.10 %      
                 
                 
KEY PERFORMANCE RATIOS AND OTHER METRICS                
Return on average assets (annualized)   1.10 %   0.75 %   1.03 %   1.06 %   1.01 %     0.98 %   1.01 %
Return on average total equity (annualized)   11.42 %   8.08 %   11.45 %   11.84 %   11.67 %     10.62 %   11.51 %
Net interest margin   3.48 %   3.46 %   3.37 %   3.50 %   3.41 %     3.46 %   3.50 %
Net interest margin (TEY) (Non-GAAP)(7)   3.63 %   3.60 %   3.52 %   3.64 %   3.69 %     3.62 %   3.78 %
Efficiency ratio (Non-GAAP) (8) (12)   66.35 %   64.72 %   64.32 %   63.17 %   75.53 %     64.77 %   66.48 %
Gross loans and leases / total assets   75.41 %   76.23 %   75.84 %   75.87 %   74.43 %     75.41 %   74.43 %
Gross loans and leases / total deposits   93.86 %   96.44 %   94.44 %   93.14 %   90.75 %     93.86 %   90.75 %
Effective tax rate (11)   20.98 %   15.44 %   15.26 %   15.88 %   -25.33 %     17.29 %   12.17 %
Tax benefit related to stock options exercised and restricted stock awards vested (9)   83     9     200     133     406       425     1,220  
Full-time equivalent employees (10)   755     728     666     639     641       755     641  
                 
                 
AVERAGE BALANCES                  
Assets $ 4,842,232   $ 4,677,875   $ 4,053,684   $ 3,994,691   $ 3,923,337     $ 4,392,121   $ 3,519,848  
Loans/leases   3,699,885     3,612,648     3,077,517     3,019,376     2,930,711       3,352,357     2,611,888  
Deposits   3,986,236     3,840,077     3,343,003     3,239,562     3,256,481       3,602,221     2,916,577  
Total stockholders' equity   466,271     436,065     365,031     356,525     339,468       405,973     310,210  
                 
(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 4th quarter of 2018 due to the acquisition of the Bates Companies and several new positions created to build scale.
       Full-time equivalent employees increased in the 3rd quarter of 2018 due to the acquisition of SFC Bank.    
       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 Bank & Trust, 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
    December 31, 2018   September 30, 2018   December 31, 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   $ 20,426 $ 115 2.23 %   $ 23,199 $ 105 1.80 %   $ 20,509 $ 45 0.87 %
Interest-bearing deposits at financial institutions   98,875   517 2.07 %     61,815   323 2.07 %     94,404   314 1.32 %
Securities (1)     671,613   6,231 3.68 %     667,142   5,973 3.55 %     635,389   6,111 3.82 %
Restricted investment securities   22,478   318 5.61 %     22,683   330 5.77 %     18,180   196 4.28 %
Loans (1)     3,699,885   47,273 5.07 %     3,612,648   44,648 4.90 %     2,930,711   33,797 4.58 %
Total earning assets (1) $ 4,513,277 $ 54,454 4.79 %   $ 4,387,487 $ 51,379 4.65 %   $ 3,699,193 $ 40,463 4.34 %
                         
Interest-bearing deposits $ 2,211,148 $ 6,110 1.10 %   $ 2,214,480 $ 5,432 0.97 %   $ 1,903,983 $ 2,787 0.58 %
Time deposits     956,754   4,433 1.84 %     825,020   3,290 1.58 %     546,376   1,445 1.05 %
Short-term borrowings   20,129   98 1.93 %     21,407   78 1.45 %     31,120   38 0.48 %
Federal Home Loan Bank advances   190,232   974 2.03 %     209,111   1,273 2.42 %     143,171   616 1.71 %
Other borrowings     72,264   970 5.33 %     74,503   925 4.93 %     74,199   775 4.14 %
Junior subordinated debentures   37,644   525 5.53 %     37,600   519 5.48 %     35,531   424 4.73 %
Total interest-bearing liabilities $ 3,488,171 $ 13,110 1.49 %   $ 3,382,121 $ 11,517 1.35 %   $ 2,734,380 $ 6,085 0.88 %
                         
Net interest income / spread (1)   $ 41,344 3.30 %     $ 39,862 3.30 %     $ 34,378 3.46 %
Net interest margin (2)     3.48 %       3.46 %       3.41 %
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.63 %       3.60 %       3.69 %
                         
                         
    For the Year Ended        
    December 31, 2018   December 31, 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   $ 20,472 $ 338 1.65 %   $ 17,577 $ 149 0.85 %        
Interest-bearing deposits at financial institutions   66,275   1,267 1.91 %     78,842   874 1.11 %        
Securities (1)     659,017   23,621 3.58 %     590,761   22,460 3.80 %        
Restricted investment securities   22,023   1,093 4.96 %     15,768   631 4.00 %        
Loans (1)     3,352,357   163,197 4.87 %     2,611,888   120,618 4.62 %        
Total earning assets (1) $ 4,120,144 $ 189,516 4.60 %   $ 3,314,836 $ 144,732 4.37 %        
                         
Interest-bearing deposits $ 2,043,314 $ 18,651 0.91 %   $ 1,622,723 $ 7,992 0.49 %        
Time deposits     766,020   12,024 1.57 %     528,834   5,020 0.95 %        
Short-term borrowings   19,458   271 1.39 %     22,596   114 0.50 %        
Federal Home Loan Bank advances   202,715   4,193 2.07 %     120,206   1,981 1.65 %        
Other borrowings     69,623   3,346 4.81 %     73,394   2,879 3.92 %        
Junior subordinated debentures   37,578   1,999 5.32 %     34,030   1,466 4.31 %        
Total interest-bearing liabilities $ 3,138,708 $ 40,484 1.29 %   $ 2,401,783 $ 19,452 0.81 %        
                         
Net interest income / spread (1)   $ 149,032 3.31 %     $ 125,280 3.56 %        
Net interest margin (2)     3.46 %       3.50 %        
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.62 %       3.78 %        
                         
                         
(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
  December 31, September 30, June 30, March 31, December 31,
  2018 2018 2018 2018 2017
           
  (dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES          
Beginning balance $   43,077   $   37,545   $   36,533   $   34,356   $   34,982  
Provision charged to expense     1,611       6,206       2,301       2,540       2,255  
Loans/leases charged off     (4,967 )     (991 )     (1,525 )     (436 )     (2,979 )
Recoveries on loans/leases previously charged off     126       317       236       73       98  
Ending balance $     39,847   $     43,077   $     37,545   $     36,533   $     34,356  
           
           
NONPERFORMING ASSETS            
Nonaccrual loans/leases $   14,260   $   23,576   $   12,554   $   12,759   $   11,441  
Accruing loans/leases past due 90 days or more     632       1,410       20       41       89  
Troubled debt restructures - accruing     3,659       4,240       1,327       5,276       7,113  
Total nonperforming loans/leases     18,551       29,226       13,901       18,076       18,643  
Other real estate owned     9,378       12,204       12,750       12,750       13,558  
Other repossessed assets     8       150       150       200       80  
Total nonperforming assets $     27,937   $     41,580   $     26,801   $     31,026   $     32,281  
           
           
ASSET QUALITY RATIOS          
Nonperforming assets / total assets   0.56 %   0.87 %   0.65 %   0.77 %   0.81 %
Allowance / total loans/leases (1)   1.07 %   1.18 %   1.21 %   1.20 %   1.16 %
Allowance / nonperforming loans/leases (1)   214.80 %   147.39 %   270.09 %   202.11 %   184.28 %
Net charge-offs as a % of average loans/leases   0.13 %   0.02 %   0.04 %   0.01 %   0.10 %
           
(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 Year Ended
      December 31,   September 30,   December 31,   December 31,   December 31,
  SELECT FINANCIAL DATA - SUBSIDIARIES   2018   2018   2017   2018   2017
       
      (dollars in thousands)
                       
  TOTAL ASSETS                    
                       
  Quad City Bank and Trust (1)   $ 1,623,369     $ 1,579,327     $ 1,541,778          
  m2 Lease Funds, LLC     231,662       235,214       218,035          
  Cedar Rapids Bank and Trust     1,379,222       1,354,294       1,307,377          
  Community State Bank - Ankeny     785,364       734,536       670,516          
  Springfield First Community Bank     632,849       623,520       N/A          
  Rockford Bank and Trust     509,622       484,059       461,651          
                           
  TOTAL DEPOSITS                        
                           
  Quad City Bank and Trust (1)   $ 1,308,085     $ 1,288,387     $ 1,272,111          
  Cedar Rapids Bank and Trust     1,167,552       1,086,908       1,060,139          
  Community State Bank - Ankeny     627,127       586,929       570,620          
  Springfield First Community Bank     449,983       439,669       N/A          
  Rockford Bank and Trust     431,110       401,565       382,002          
                       
  TOTAL LOANS & LEASES                    
                       
  Quad City Bank and Trust (1)   $ 1,233,117     $ 1,195,380     $ 1,136,753          
  m2 Lease Funds, LLC     228,646       232,846       215,236          
  Cedar Rapids Bank and Trust     1,037,469       1,046,053       973,971          
  Community State Bank - Ankeny     582,453       538,723       489,075          
  Springfield First Community Bank     475,801       480,969       N/A          
  Rockford Bank and Trust     403,914       392,262       364,686          
                           
  TOTAL LOANS & LEASES / TOTAL DEPOSITS                        
                           
  Quad City Bank and Trust (1)     94%       93%       89%          
  Cedar Rapids Bank and Trust     89%       96%       92%          
  Community State Bank - Ankeny     93%       92%       86%          
  Springfield First Community Bank     106%       109%       N/A          
  Rockford Bank and Trust     94%       98%       95%          
                           
                           
  TOTAL LOANS & LEASES / TOTAL ASSETS                        
                           
  Quad City Bank and Trust (1)     76%       76%       74%          
  Cedar Rapids Bank and Trust     75%       77%       74%          
  Community State Bank - Ankeny     74%       73%       73%          
  Springfield First Community Bank     75%       77%       N/A          
  Rockford Bank and Trust     79%       81%       79%          
                           
  ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES                        
                       
  Quad City Bank and Trust (1)     1.09%       1.11%       1.11%          
  m2 Lease Funds, LLC     1.49%       1.50%       1.54%          
  Cedar Rapids Bank and Trust (2)     1.19%       1.26%       1.22%          
  Community State Bank - Ankeny (2)     1.05%       1.01%       0.89%          
  Springfield First Community Bank     0.21%       0.10%       N/A          
  Rockford Bank and Trust     1.72%       2.71%       1.51%          
                       
  RETURN ON AVERAGE ASSETS                      
                       
  Quad City Bank and Trust (1)     1.22%       1.36%       2.82%       1.31%       1.65%  
  Cedar Rapids Bank and Trust     1.78%       1.47%       0.71%       1.54%       1.12%  
  Community State Bank - Ankeny     0.94%       1.43%       0.96%       1.18%       1.14%  
  Springfield First Community Bank     1.74%       1.51%       N/A       1.64%       N/A  
  Rockford Bank and Trust     1.29%       (2.04)%       0.26%       0.15%       0.64%  
                       
  NET INTEREST MARGIN PERCENTAGE (3)                    
                       
  Quad City Bank and Trust (1)     3.20%       3.38%       3.49%       3.38%       3.61%  
  Cedar Rapids Bank and Trust (5)     3.60%       3.53%       3.80%       3.59%       3.74%  
  Community State Bank - Ankeny (4)     4.73%       4.40%       4.71%       4.48%       4.91%  
  Springfield First Community Bank (6)     4.68%       4.36%       N/A       4.55%       N/A  
  Rockford Bank and Trust     2.87%       3.06%       3.32%       3.08%       3.37%  
                       
  ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET                    
  INTEREST MARGIN, NET                    
                       
  Cedar Rapids Bank and Trust   $ 740     $ 158     $ 221     $ 1,350     $ 200  
  Community State Bank - Ankeny     415       445       575       1,746       4,723  
  Springfield First Community Bank     1,498       1,116       N/A       2,614       N/A  
  QCR Holdings, Inc. (7)     (44 )     (45 )     (51 )     (183 )     (149 )
                       
(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 eliminated 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 35% tax rate for each period prior to March 31, 2018 and 21% for periods including and after March 31, 2018.
(4)   Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin would have been 4.00% for the quarter ended December 31, 2018, 4.11% for the quarter ended September 30, 2018 and 4.33% for the quarter ended December 31, 2017.
(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 3.36% for the quarter ended December 31, 2018, 3.48% for the quarter ended September 30, 2018 and 3.71% for the quarter ended December 31, 2017.
(6)   Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin would have been 3.52% for the quarter ended December 31, 2018 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        
    December 31,   September 30,   June 30,   March 31,   December 31,        
GAAP TO NON-GAAP RECONCILIATIONS   2018   2018   2018   2018   2017        
             
    (dollars in thousands, except per share data)        
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)                            
                             
Stockholders' equity (GAAP)   $ 473,138     $ 457,387     $ 369,588     $ 360,428     $ 353,287          
Less: Intangible assets     95,282       89,755       36,561       37,108       37,413          
Tangible common equity (non-GAAP)   $ 377,856     $ 367,632     $ 333,027     $ 323,320     $ 315,874          
                             
Total assets (GAAP)   $ 4,949,710     $ 4,792,732     $ 4,106,883     $ 4,026,314     $ 3,982,665          
Less: Intangible assets     95,282       89,755       36,561       37,108       37,413          
Tangible assets (non-GAAP)   $ 4,854,428     $ 4,702,977     $ 4,070,322     $ 3,989,206     $ 3,945,252          
                             
Tangible common equity to tangible assets ratio (non-GAAP)     7.78 %     7.82 %     8.18 %     8.10 %     8.01 %        
                             
                             
    For the Quarter Ended   For the Year Ended
    December 31,   September 30,   June 30,   March 31,   December 31,   December 31,   December 31,
ADJUSTED NET INCOME (2)   2018   2018   2018   2018   2017   2018   2017
                             
Net income (GAAP)   $ 13,316     $ 8,809     $ 10,445     $ 10,550     $ 9,902     $ 43,120     $ 35,707  
                             
Less nonrecurring items (post-tax) (3):                            
Income:                            
Securities gains, net   $ -     $ -     $ -     $ -     $ (41 )   $ -     $ (57 )
Total nonrecurring income (non-GAAP)   $ -     $ -     $ -     $ -     $ (41 )   $ -     $ (57 )
                             
Expense:                            
Acquisition costs (4)     29       1,216       327       73       430       1,645       695  
Post-acquisition compensation, transition and integration costs   1,127       390       130       -       2,462       1,647       2,802  
Total nonrecurring expense (non-GAAP)   $ 1,156     $ 1,606     $ 457     $ 73     $ 2,892     $ 3,292     $ 3,497  
                             
Adjustment of tax expense related to the Tax Act   $ -     $ -     $ -     $ -     $ 2,919     $ -     $ 2,919  
                             
Adjusted net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (2)   $     14,472     $     10,415     $     10,902     $     10,623     $     9,916     $     46,412     $     36,342  
                             
ADJUSTED EARNINGS PER COMMON SHARE (2)                            
                             
Adjusted net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above)   $ 14,472     $ 10,415     $ 10,902     $ 10,623     $ 9,916     $ 46,412     $ 36,342  
                             
Weighted average common shares outstanding     15,641,401       15,625,123       13,919,565       13,888,661       13,845,497       14,768,687       13,325,128  
Weighted average common and common equivalent shares outstanding     15,898,591       15,922,324       14,232,423       14,205,584       14,193,191       15,064,730       13,680,472  
                             
Adjusted earnings per common share (non-GAAP):                            
Basic   $     0.93     $     0.67     $     0.78     $     0.76     $     0.72     $     3.14     $     2.73  
Diluted   $     0.91     $     0.65     $     0.77     $     0.75     $     0.70     $     3.08     $     2.66  
                             
ADJUSTED RETURN ON AVERAGE ASSETS (2)                            
                             
Adjusted net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above)   $ 14,472     $ 10,415     $ 10,902     $ 10,623     $ 9,916     $ 46,412     $ 36,342  
                             
Average Assets   $ 4,842,232     $ 4,677,875     $ 4,053,684     $ 3,994,691     $ 3,923,337     $ 4,392,121     $ 3,519,848  
                             
Adjusted return on average assets (annualized) (non-GAAP)     1.20 %     0.89 %     1.08 %     1.06 %     1.01 %     1.06 %     1.03 %
                             
ADJUSTED NET INTEREST MARGIN (TEY) (6)                            
                             
Net interest income (GAAP)   $ 39,593     $ 38,314     $ 32,085     $ 32,403     $ 31,793     $ 142,395     $ 116,065  
                             
Plus: Tax equivalent adjustment (5)     1,751       1,548       1,462       1,353       2,585       6,637       9,215  
                             
Net interest income - tax equivalent (Non-GAAP)   $ 41,344     $ 39,862     $ 33,547     $ 33,756     $ 34,378     $ 149,032     $ 125,280  
                             
Less:  Acquisition accounting net accretion     2,609       1,674       548       699       745       5,527       4,774  
                             
Adjusted net interest income   $ 38,735     $ 38,188     $ 32,999     $ 33,057     $ 33,633     $ 143,505     $ 120,506  
                             
Average earning assets   $ 4,513,277     $ 4,387,487     $ 3,820,333     $ 3,759,475     $ 3,699,193     $ 4,120,144     $ 3,314,836  
                             
Net interest margin (GAAP)     3.48 %     3.46 %     3.37 %     3.50 %     3.41 %     3.46 %     3.50 %
Net interest margin (TEY) (Non-GAAP)     3.63 %     3.60 %     3.52 %     3.64 %     3.69 %     3.62 %     3.78 %
Adjusted net interest margin (TEY) (Non-GAAP)     3.40 %     3.45 %     3.46 %     3.57 %     3.61 %     3.48 %     3.64 %
                             
EFFICIENCY RATIO (7)                            
                             
Noninterest expense (GAAP)   $ 36,410     $ 30,500     $ 26,370     $ 25,863     $ 31,351     $ 119,143     $ 97,424  
                             
Net interest income (GAAP)   $ 39,593     $ 38,314     $ 32,085     $ 32,403     $ 31,793     $ 142,395     $ 116,065  
Noninterest income (GAAP)     15,279       8,809       8,912       8,541       9,714       41,541       30,482  
Total income   $ 54,872     $ 47,123     $ 40,997     $ 40,944     $ 41,507     $ 183,936     $ 146,547  
                             
Efficiency ratio (noninterest expense/total income) (Non-GAAP)     66.35 %     64.72 %     64.32 %     63.17 %     75.53 %     64.77 %     66.48 %
                             
(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.
good(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 35% for periods prior to March 31, 2018 and 21% for periods including and after March 31, 2018.    
(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 35% tax rate for each period prior to March 31, 2018 and 21% for periods including and after March 31, 2018.
(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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