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CST: 17/06/2019 07:48:48   

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

53 Days ago

First Quarter 2019 Highlights

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

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

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

Annualized Loan and Lease Growth of 7.1%

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

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

Net Interest Income of $36.9 million

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

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

  For the Quarter Ended
  Mar. 31, Dec. 31, Mar. 31,
  2019 2018 2018
NIM 3.25% 3.48% 3.50%
NIM (TEY)(non-GAAP)(1) 3.40% 3.63% 3.64%
Adjusted NIM (TEY)(non-GAAP)(1) 3.31% 3.40% 3.57%

(1) See GAAP to non-GAAP reconciliations.

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

Noninterest Income of $12.0 million

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

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

Noninterest Expenses of $32.4 million

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

Asset Quality Improvement

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

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

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date. Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount ($10.4 million at March 31, 2019).

Strong Capital Levels

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

Continued Focus on Seven Key Initiatives

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

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

Conference Call Details

The Company will host an earnings call/webcast tomorrow, April 25, 2019, at 10:00 a.m. central time. Dial-in information for the call is toll-free 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be  available for digital replay through May 9, 2019. The replay access information is toll-free 877-344-7529 (international 412-317-0088); access code 10130063. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, Springfield and Rockford communities through its wholly owned subsidiary banks which provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Rockford Bank & Trust Company, based in Rockford, Illinois, commenced operations in 2005. In 2018, the Company acquired the Bates Companies, a wealth management firm. Quad City Bank & Trust Company also provides correspondent banking services. In addition, Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. In July 2018, QCR Holdings completed a merger with Springfield Bancshares, Inc., the holding company of Springfield First Community Bank of Springfield, Missouri. With this addition of Springfield First Community Bank, the Company has 27 locations in Illinois, Iowa, Wisconsin and Missouri. As of March 31, 2019, QCR Holdings had approximately $5.1 billion in assets, $3.8 billion in loans and $4.2 billion in deposits. For additional information, please visit our website at www.qcrh.com.

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

Contacts:

Todd A. Gipple
Executive Vice President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com 

Christopher J. Lindell
Executive Vice President
Corporate Communications
(319) 743-7006
clindell@qcrh.com

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


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


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


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
                         
                         
ANALYSIS OF NET INTEREST INCOME AND MARGIN                      
                         
    For the Quarter Ended
    March 31, 2019   December 31, 2018   March 31, 2018
    Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
  Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
  Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
                         
    (dollars in thousands)
                         
Fed funds sold   $ 15,736 $ 93 2.40 %   $ 20,426 $ 115 2.23 %   $ 19,703 $ 56 1.15 %
Interest-bearing deposits at financial institutions   155,463   923 2.41 %     98,875   517 2.07 %     49,531   197 1.61 %
Securities (1)     660,454   6,096 3.74 %     671,613   6,231 3.68 %     649,035   5,839 3.65 %
Restricted investment securities   21,285   307 5.85 %     22,478   318 5.61 %     21,830   234 4.35 %
Loans (1)     3,759,615   46,477 5.01 %     3,699,885   47,273 5.07 %     3,019,376   34,573 4.64 %
Total earning assets (1) $ 4,612,553 $ 53,896 4.74 %   $ 4,513,277 $ 54,454 4.79 %   $ 3,759,475 $ 40,899 4.41 %
                         
Interest-bearing deposits $ 2,288,109 $ 7,174 1.27 %   $ 2,211,148 $ 6,110 1.10 %   $ 1,828,228 $ 3,019 0.67 %
Time deposits     1,012,459   5,305 2.12 %     956,754   4,433 1.84 %     616,661   1,862 1.22 %
Short-term borrowings   14,377   71 2.00 %     20,129   98 1.93 %     17,271   33 0.77 %
Federal Home Loan Bank advances   147,355   903 2.49 %     190,232   974 2.03 %     236,689   1,064 1.82 %
Other borrowings     43,701   605 5.61 %     72,264   970 5.33 %     64,680   718 4.50 %
Subordinated debentures   38,637   564 5.92 %     -   - 0.00 %     -   - 0.00 %
Junior subordinated debentures   37,686   572 6.16 %     37,644   525 5.53 %     37,510   447 4.83 %
Total interest-bearing liabilities $ 3,582,324 $ 15,194 1.72 %   $ 3,488,171 $ 13,110 1.49 %   $ 2,801,039 $ 7,143 1.03 %
                         
Net interest income / spread (1)   $ 38,702 3.02 %     $ 41,344 3.30 %     $ 33,756 3.38 %
Net interest margin (2)     3.25 %       3.48 %       3.50 %
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.40 %       3.63 %       3.64 %
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.31 %       3.40 %       3.57 %
                         
                         
(1) Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.    
(2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.        
(3) TEY : Tax equivalent yield.  See GAAP to Non-GAAP reconciliations.                    
                         


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


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
       
                       
                       
      For the Quarter Ended        
      March 31,   December 31,   March 31,        
  SELECT FINANCIAL DATA - SUBSIDIARIES     2019       2018       2018          
      (dollars in thousands)
       
                       
  TOTAL ASSETS                    
                       
  Quad City Bank and Trust (1)   $ 1,660,374     $ 1,623,369     $ 1,526,830          
  m2 Lease Funds, LLC     231,470       231,662       224,301          
  Cedar Rapids Bank and Trust     1,446,637       1,379,222       1,331,209          
  Community State Bank - Ankeny     785,076       785,364       696,979          
  Springfield First Community Bank     638,542       632,849     N/A          
  Rockford Bank and Trust     513,045       509,622       468,112          
                       
  TOTAL DEPOSITS                    
                       
  Quad City Bank and Trust (1)   $ 1,453,810     $ 1,308,085     $ 1,302,005          
  Cedar Rapids Bank and Trust     1,228,232       1,167,552       1,058,251          
  Community State Bank - Ankeny     673,231       627,127       563,540          
  Springfield First Community Bank     445,113       449,983     N/A          
  Rockford Bank and Trust     433,016       431,110       379,552          
                       
  TOTAL LOANS & LEASES                    
                       
  Quad City Bank and Trust (1)   $ 1,238,684     $ 1,233,117     $ 1,150,120          
  m2 Lease Funds, LLC     228,356       228,646       223,654          
  Cedar Rapids Bank and Trust     1,076,166       1,037,469       1,011,971          
  Community State Bank - Ankeny     588,021       582,453       513,951          
  Springfield First Community Bank     491,985       475,801     N/A          
  Rockford Bank and Trust     404,575       403,914       378,860          
                       
  TOTAL LOANS & LEASES / TOTAL DEPOSITS                    
                       
  Quad City Bank and Trust (1)     85 %     94 %     88 %        
  Cedar Rapids Bank and Trust     88 %     89 %     96 %        
  Community State Bank - Ankeny     87 %     93 %     91 %        
  Springfield First Community Bank     111 %     106 %   N/A          
  Rockford Bank and Trust     93 %     94 %     100 %        
                       
                       
  TOTAL LOANS & LEASES / TOTAL ASSETS                    
                       
  Quad City Bank and Trust (1)     75 %     76 %     75 %        
  Cedar Rapids Bank and Trust     74 %     75 %     76 %        
  Community State Bank - Ankeny     75 %     74 %     74 %        
  Springfield First Community Bank     77 %     75 %   N/A          
  Rockford Bank and Trust     79 %     79 %     81 %        
                       
  ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES                    
                       
  Quad City Bank and Trust (1)     1.09 %     1.09 %     1.16 %        
  m2 Lease Funds, LLC     1.39 %     1.49 %     1.67 %        
  Cedar Rapids Bank and Trust (2)     1.19 %     1.19 %     1.24 %        
  Community State Bank - Ankeny (2)     1.07 %     1.05 %     0.95 %        
  Springfield First Community Bank (2)     0.30 %     0.21 %   N/A          
  Rockford Bank and Trust     1.74 %     1.72 %     1.51 %        
                       
  RETURN ON AVERAGE ASSETS                    
                       
  Quad City Bank and Trust (1)     1.19 %     1.22 %     1.37 %        
  Cedar Rapids Bank and Trust     1.54 %     1.78 %     1.45 %        
  Community State Bank - Ankeny     1.13 %     0.94 %     1.10 %        
  Springfield First Community Bank     1.12 %     1.74 %   N/A          
  Rockford Bank and Trust     0.46 %     1.29 %     0.61 %        
                       
  NET INTEREST MARGIN PERCENTAGE (3)                    
                       
  Quad City Bank and Trust (1)     3.24 %     3.20 %     3.51 %        
  Cedar Rapids Bank and Trust (5)     3.41 %     3.60 %     3.70 %        
  Community State Bank - Ankeny (4)     4.04 %     4.73 %     4.40 %        
  Springfield First Community Bank (6)     4.06 %     4.68 %   N/A          
  Rockford Bank and Trust     2.92 %     2.87 %     3.29 %        
                       
  ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET                    
  INTEREST MARGIN, NET                    
                       
  Cedar Rapids Bank and Trust   $ 144     $ 740     $ 243          
  Community State Bank - Ankeny     58       415       504          
  Springfield First Community Bank     910       1,498     N/A          
  QCR Holdings, Inc. (7)     (43 )     (44 )     (48 )        
                       
(1 ) Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank.  m2 Lease Funds, LLC  
  is also presented separately for certain (applicable) measurements.                        
(2 ) Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio.            
(3 ) Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using  
  a 21% tax rate.                        
(4 ) Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest  
  margin would have been 3.98% for the quarter ended March 31, 2019, 4.00% for the quarter ended December 31, 2018 and 4.04% for the            
  quarter ended March 31, 2018.                        
(5 ) Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest  
  margin would have been 3.38% for the quarter ended March 31, 2019, 3.36% for the quarter ended December 31, 2018 and 3.62% for the            
  quarter ended March 31, 2018.                        
(6 ) Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest
  margin would have been 3.32% for the quarter ended March 31, 2019 and 3.52% for the quarter ended December 31, 2018.                
(7 ) Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.  


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
     
                           
    As of      
    March 31   December 31,   September 30,   June 30,   March 31,      
GAAP TO NON-GAAP RECONCILIATIONS     2019       2018       2018       2018       2018        
           
    (dollars in thousands, except per share data)
     
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)                          
                           
Stockholders' equity (GAAP)   $   488,407     $   473,138     $   457,387     $   369,588     $   360,428        
Less: Intangible assets       94,790         95,282         89,755         36,561         37,108        
Tangible common equity (non-GAAP)   $    393,617     $   377,856     $   367,632     $   333,027     $   323,320        
                           
Total assets (GAAP)   $   5,066,662     $   4,949,710     $   4,792,732     $   4,106,883     $   4,026,314        
Less: Intangible assets       94,790         95,282         89,755         36,561         37,108        
Tangible assets (non-GAAP)   $   4,971,872     $   4,854,428     $   4,702,977     $   4,070,322     $   3,989,206        
                           
Tangible common equity to tangible assets ratio (non-GAAP)     7.92 %       7.78 %       7.82 %       8.18 %       8.10 %        
                           
                           
    For the Quarter Ended      
    March 31   December 31,   September 30,   June 30,   March 31,      
ADJUSTED NET INCOME (2)     2019       2018       2018       2018       2018        
                           
Net income (GAAP)   $   12,918     $   13,316     $   8,809     $   10,445     $   10,550        
                           
Less nonrecurring items (post-tax) (3):                          
Income:                          
Securities gains, net   $   -     $   -     $   -     $   -     $   -        
Total nonrecurring income (non-GAAP)   $   -     $   -     $   -     $   -     $   -        
                           
Expense:                          
Acquisition costs (4)       -         29         1,216         327         73        
Post-acquisition compensation, transition and integration costs     106         1,127         390         130         -        
Total nonrecurring expense (non-GAAP)   $   106     $   1,156     $   1,606     $   457     $    73        
Adjusted net income  (non-GAAP) (2)   $   13,024     $   14,472     $   10,415     $   10,902     $   10,623        
                           
ADJUSTED EARNINGS PER COMMON SHARE (2)                          
                           
Adjusted net income (non-GAAP) (from above)   $   13,024     $   14,472     $   10,415     $   10,902     $   10,623        
                           
Weighted average common shares outstanding       15,693,345         15,641,401         15,625,123         13,919,565         13,888,661        
Weighted average common and common equivalent shares outstanding       15,922,940         15,898,591         15,922,324         14,232,423         14,205,584        
                           
Adjusted earnings per common share (non-GAAP):                          
Basic   $   0.83     $   0.93     $   0.67     $   0.78     $   0.76        
Diluted   $   0.82     $   0.91     $   0.65     $   0.77     $   0.75        
                           
ADJUSTED RETURN ON AVERAGE ASSETS (2)                          
                           
Adjusted net income (non-GAAP) (from above)   $   13,024     $   14,472     $   10,415     $   10,902     $   10,623        
                           
Average Assets   $   4,968,502     $   4,842,232     $   4,677,875     $   4,053,684     $   3,994,691        
                           
Adjusted return on average assets (annualized) (non-GAAP)     1.05 %       1.20 %       0.89 %       1.08 %       1.06 %        
                           
ADJUSTED NET INTEREST MARGIN (TEY) (6)                          
                           
Net interest income (GAAP)   $   36,908     $   39,593     $   38,314     $   32,085     $   32,403        
                           
Plus: Tax equivalent adjustment (5)       1,794         1,751         1,548         1,462         1,353        
                           
Net interest income - tax equivalent (Non-GAAP)   $   38,702     $   41,344     $   39,862     $   33,547     $   33,756        
                           
Less:  Acquisition accounting net accretion       1,069         2,609         1,674         548         699        
                           
Adjusted net interest income   $   37,633     $   38,735     $   38,188     $   32,999     $   33,057        
                           
Average earning assets   $   4,612,553     $   4,513,277     $   4,387,487     $   3,820,333     $   3,759,475        
                           
Net interest margin (GAAP)     3.25%       3.48%       3.46%       3.37%       3.50%        
Net interest margin (TEY) (Non-GAAP)     3.40%       3.63%       3.60%       3.52%       3.64%        
Adjusted net interest margin (TEY) (Non-GAAP)     3.31%       3.40%       3.45%       3.46%       3.57%        
                           
EFFICIENCY RATIO (7)                          
                           
Noninterest expense (GAAP)   $   32,435     $   36,410     $   30,500     $   26,370     $   25,863        
                           
Net interest income (GAAP)   $   36,908     $   39,593     $   38,314     $   32,085     $   32,403        
Noninterest income (GAAP)       11,993         15,279         8,809         8,912         8,541        
Total income   $   48,901     $   54,872     $   47,123     $   40,997     $   40,944        
                           
Efficiency ratio (noninterest expense/total income) (Non-GAAP)     66.33%       66.35%       64.72%       64.32%       63.17%        
                           
(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%.                  
(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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