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CST: 18/08/2019 16:28:32   

QCR Holdings, Inc. Announces Record Net Income of $13.5 Million for the Second Quarter of 2019

26 Days ago

Second Quarter 2019 Highlights

  • Net income of $13.5 million, or $0.85 per diluted share
  • Adjusted net income (non-GAAP) of $14.1 million, or $0.88 per diluted share
  • Annualized loan and lease growth of 11.7% for the quarter and 9.5% year-to-date
  • Annualized deposit growth of 12.2% for the quarter and 17.4% year-to-date
  • Record noninterest income of $17.1 million for the quarter and $29.1 million year-to-date
  • NIM and NIM (TEY)(non-GAAP) stabilized at 3.25% and 3.40%, respectively
  • Nonperforming assets down $3.2 million, or 12.2% from the prior quarter

MOLINE, Ill., July 23, 2019 (GLOBE NEWSWIRE) --  QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $13.5 million and diluted earnings per share (“EPS”) of $0.85 for the second quarter of 2019, compared to net income of $12.9 million and diluted EPS of $0.81 for the first quarter of 2019. The second quarter results included $0.6 million of post-acquisition compensation, transition and integration costs (after-tax), compared to $0.1 million of similar costs in the first quarter of 2019. Excluding these expenses, the Company reported adjusted net income (non-GAAP) of $14.1 million and adjusted diluted EPS of $0.88 for the second quarter of 2019, compared to adjusted net income (non-GAAP) of $13.0 million and adjusted diluted EPS of $0.82 for the first quarter of 2019. For the second quarter of 2018, net income and diluted EPS were $10.4 million and $0.73, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $10.9 million and $0.77, respectively.

  For the Quarter Ended
  June 30, Mar. 31, June 30,
$ in millions (except per share data)   2019   2019   2018
Net Income $ 13.5 $ 12.9 $ 10.4
Diluted EPS $ 0.85 $ 0.81 $ 0.73
Adjusted Net Income (non-GAAP)(1) $ 14.1 $ 13.0 $ 10.9
Adjusted Diluted EPS (non-GAAP)(1) $ 0.88 $ 0.82 $ 0.77
(1)  See GAAP to non-GAAP reconciliations.      

“We are very pleased with our results for the second quarter,” commented Larry J. Helling, Chief Executive Officer. “We posted a record quarter of net income, driven by strong loan and deposit growth, record fee income, excellent credit quality and careful management of noninterest expenses. We successfully deployed our increase in core deposits during the quarter with solid loan and lease production, while maintaining disciplined underwriting. The higher average loan balances, combined with a stable net interest margin, enabled us to generate an increase in net interest income from the prior quarter.” 

Annualized Loan and Lease Growth of 11.7%

During the second quarter of 2019, the Company’s total assets increased $128.2 million to a total of $5.2 billion, while total loans and leases grew $111.1 million, or 2.9%, compared to the first quarter of 2019. Loan and lease growth was funded by an increase in core deposits. Core deposits (excluding brokered deposits) increased $159.7 million, or 4.1% on a linked quarter basis. At quarter-end, the percentage of wholesale funds to total assets was 10.0%, an improvement from 11.9% in the first quarter. Additionally, at quarter-end the percentage of gross loans and leases to total assets remained consistent on a linked quarter basis at 75%.

“Our solid loan growth for the quarter was driven by strength in commercial and industrial and commercial real estate construction loans,” added Mr. Helling. “Production was driven by both our core commercial lending business, as well as our Specialty Finance Group. We also experienced another quarter of a more normalized level of payoffs, which were up modestly from the first quarter, but relatively flat with the second quarter of 2018. Our loan and lease pipeline remains solid, giving us confidence that we are on track to achieve organic loan growth of between 8% and 10% for the full year.”

Net Interest Income of $38.0 million

Net interest income for the second quarter of 2019 totaled $38.0 million, compared to $36.9 million for the first quarter of 2019 and $32.1 million for the second quarter of 2018. The increase was due to growth in average interest earning assets of $85.5 million, or 1.9% on a linked quarter basis, as reported net interest margin remained stable. Acquisition-related net accretion totaled $1.1 million (pre-tax) for the second quarter of 2019, consistent with the first quarter of 2019 and was $0.5 million for the second quarter of 2018. Adjusted net interest income (non-GAAP) was $38.7 million for the second quarter of 2019, compared to $37.6 million for the first quarter of 2019 and $33.0 million for the second quarter of 2018.

In the second quarter, reported net interest margin was 3.25% and, on a tax-equivalent yield basis, net interest margin was 3.40%. Both measures remained stable relative to the first quarter of 2019. Net interest margin, excluding acquisition-related net accretion was 3.31%, also consistent with the first quarter. The stability in adjusted net interest margin during the quarter was due to the 4 basis point increase in the yield on interest earning assets, offset by a 4 basis point increase in the total cost of funds (due to both mix and rate).

  For the Quarter Ended
  June 30, Mar. 31,
  2019 2019
NIM 3.25% 3.25%
NIM (TEY)(non-GAAP)(1) 3.40% 3.40%
Adjusted NIM (TEY)(non-GAAP)(1) 3.31% 3.31%
(1)  See GAAP to non-GAAP reconciliations.    

“While competition for new deposits remained strong and deposit costs increased slightly during the quarter, our ability to gather core deposits and significantly reduce our wholesale funding enabled us to limit the increase in our cost of funds to only 4 basis points,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Excluding the impact of acquisition-related accretion, our adjusted loan yields on a tax-equivalent basis also increased by 4 basis points, which resulted in a stable net interest margin for the second quarter.”

Record Noninterest Income of $17.1 million

Noninterest income for the second quarter of 2019 totaled $17.1 million, compared to $12.0 million for the first quarter of 2019. The increase was primarily due to a $4.7 million increase in swap fee income. Wealth management revenue was $4.2 million for the quarter, comparable to the first quarter of 2019. Noninterest income increased 91.5% when compared to the second quarter of 2018.

“Continued strong production from our Specialty Finance Group led to a record $7.9 million in swap fee income during the quarter. Swap fee income and gains on the sale of government guaranteed loans totaled $11.2 million for the first six months of 2019, already putting us near the high end of our full-year target of $8 to $12 million,” added Mr. Gipple.

Noninterest Expenses of $36.6 million

Noninterest expense for the second quarter of 2019 totaled $36.6 million, compared to $32.4 million and $26.4 million for the first quarter of 2019 and second quarter of 2018, respectively. The linked quarter increase was due to a number of factors, including a $0.9 million increase in net costs of operations of other real estate, as the Company reduced the carrying value of an OREO property by $1.0 million. There was also an additional $2.5 million of bonus and commission expense in the quarter, driven by the strong financial results and higher than anticipated swap fee income. Excluding post-acquisition expenses, higher incentive compensation and the OREO write-down, noninterest expense would have totaled $32.4 million.  

Asset Quality Improvement

Nonperforming assets (“NPAs”) totaled $23.2 million, a decrease of $3.2 million from the first quarter of 2019. The lower NPAs resulted in the ratio of NPAs to total assets improving to 0.45% at June 30, 2019, compared to 0.52% at March 31, 2019 and 0.65% at June 30, 2018.

The Company’s provision for loan and lease losses totaled $1.9 million for the second quarter of 2019, which was down from $2.1 million from the prior quarter and down from $2.4 million in the second quarter of 2018. The linked quarter decrease in the provision for loan and lease losses was primarily due to improved credit quality.  As of June 30, 2019, the Company’s allowance to total loans and leases was 1.05%, which was down from 1.08% at March 31, 2019 and down from 1.21% at June 30, 2018.

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date. Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount ($9.3 million at June 30, 2019).

 Strong Capital Levels

As of June 30, 2019, the Company’s total risk-based capital ratio was 12.18%, the common equity Tier 1 ratio was 9.04%, and the tangible common equity to tangible assets ratio was 8.05%. By comparison, these respective ratios were 12.26%, 9.02% and 7.92% as of March 31, 2019.

Continued Focus on Seven Key Initiatives

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

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

Conference Call Details

The Company will host an earnings call/webcast tomorrow, July 24, 2019, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be  available for digital replay through August 8, 2019. The replay access information is toll-free: 877-344-7529 (international 412-317-0088); access code: 10133166. 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. 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, the Company 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 June 30, 2019, the Company had approximately $5.2 billion in assets, $3.9 billion in loans and $4.3 billion in deposits. For additional information, please visit our website at www.qcrh.com.

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

Contacts:

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

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

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
 
  As of  
  June 30, March 31, December 31, September 30, June 30,  
    2019   2019   2018   2018   2018  
             
  (dollars in thousands)  
             
CONDENSED BALANCE SHEET            
             
Cash and due from banks $ 87,919 $ 76,527 $ 85,523 $ 73,407 $ 69,069  
Federal funds sold and interest-bearing deposits   205,497   216,032   159,596   129,660   51,667  
Securities   643,803   655,749   662,969   650,745   657,997  
Net loans/leases   3,869,415   3,758,268   3,692,907   3,610,309   3,077,247  
Intangibles   16,089   16,918   17,450   16,137   8,470  
Goodwill   77,748   77,872   77,832   73,618   28,091  
Other assets   294,381   265,296   253,433   238,856   214,342  
Total assets $ 5,194,852 $ 5,066,662 $ 4,949,710 $ 4,792,732 $ 4,106,883  
             
Total deposits $ 4,322,510 $ 4,194,220 $ 3,977,031 $ 3,788,277 $ 3,298,276  
Total borrowings   230,953   282,994   404,968   483,635   380,392  
Other liabilities   137,089   101,041   94,573   63,433   58,627  
Total stockholders' equity   504,300   488,407   473,138   457,387   369,588  
Total liabilities and stockholders' equity $ 5,194,852 $ 5,066,662 $ 4,949,710 $ 4,792,732 $ 4,106,883  
             
ANALYSIS OF LOAN PORTFOLIO            
Loan/lease mix:            
Commercial and industrial loans $ 1,548,657 $ 1,479,247 $ 1,429,410 $ 1,380,543 $ 1,273,000  
Commercial real estate loans   1,837,473   1,790,845   1,766,111   1,727,326   1,349,319  
Direct financing leases   101,180   108,543   117,969   126,752   133,197  
Residential real estate loans   293,479   288,502   290,759   309,288   257,434  
Installment and other consumer loans   120,947   123,087   119,381   100,191   92,952  
Deferred loan/lease origination costs, net of fees   8,783   9,208   9,124   9,286   8,890  
Total loans/leases $ 3,910,519 $ 3,799,432 $ 3,732,754 $ 3,653,386 $ 3,114,792  
Less allowance for estimated losses on loans/leases   41,104   41,164   39,847   43,077   37,545  
Net loans/leases $ 3,869,415 $ 3,758,268 $ 3,692,907 $ 3,610,309 $ 3,077,247  
             
ANALYSIS OF SECURITIES PORTFOLIO            
Securities mix:            
U.S. government sponsored agency securities $ 35,762 $ 35,843 $ 36,411 $ 36,492 $ 35,667  
Municipal securities   440,853   450,376   459,409   453,275   458,510  
Residential mortgage-backed and related securities   159,228   161,692   159,249   155,733   158,534  
Other securities   7,960   7,838   7,900   5,245   5,286  
Total securities $ 643,803 $ 655,749 $ 662,969 $ 650,745 $ 657,997  
             
ANALYSIS OF DEPOSITS            
Deposit mix:            
Noninterest-bearing demand deposits $ 795,951 $ 821,599 $ 791,101 $ 802,090 $ 746,822  
Interest-bearing demand deposits   2,505,956   2,334,474   2,204,206   2,094,814   1,865,382  
Time deposits   733,135   719,286   704,903   615,323   519,999  
Brokered deposits   287,468   318,861   276,821   276,050   166,073  
Total deposits $ 4,322,510 $ 4,194,220 $ 3,977,031 $ 3,788,277 $ 3,298,276  
             
ANALYSIS OF BORROWINGS            
Borrowings mix:            
Term FHLB advances $ 46,433 $ 66,380 $ 76,327 $ 63,399 $ 46,600  
Overnight FHLB advances (1)   59,300   59,800   190,165   295,730   207,500  
Wholesale structured repurchase agreements   -   35,000   35,000   35,000   35,000  
Customer repurchase agreements   2,181   3,056   2,084   3,049   2,186  
Federal funds purchased   17,010   12,830   26,690   8,670   15,400  
Subordinated notes   68,274   68,215   4,782   -   -  
Junior subordinated debentures   37,755   37,713   37,670   37,626   37,581  
Other borrowings   -   -   32,250   40,161   36,125  
Total borrowings $ 230,953 $ 282,994 $ 404,968 $ 483,635 $ 380,392  
             
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 2.39%.      
             

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited) 
 
      For the Quarter Ended  
      June 30, March 31 December 31, September 30, June 30,  
        2019     2019   2018     2018     2018    
                 
      (dollars in thousands, except per share data)  
                 
INCOME STATEMENT              
Interest income   $   54,181   $   52,102 $   52,703   $   49,831   $   40,799    
Interest expense       16,168       15,194     13,110       11,517       8,714    
Net interest income        38,013       36,908     39,593       38,314       32,085    
Provision for loan/lease losses       1,941       2,134     1,611       6,206       2,301    
Net interest income after provision for loan/lease losses   $ 36,072   $ 34,774 $ 37,982   $ 32,108   $ 29,784    
                 
                 
Trust department fees   $   2,361   $   2,493 $   2,216   $   2,196   $   2,058    
Investment advisory and management fees       1,888       1,736     1,657       1,059       1,058    
Deposit service fees       1,658       1,554     1,623       1,656       1,610    
Gain on sales of residential real estate loans, net       489       369     361       337       102    
Gain on sales of government guaranteed portions of loans, net       39       31     -        46       -     
Swap fee income       7,891       3,198     7,069       1,110       1,649    
Securities losses, net       (52 )     -      -        -        -     
Earnings on bank-owned life insurance       412       540     341       474       399    
Debit card fees       914       792     807       846       844    
Correspondent banking fees       172       216     179       195       213    
Other          1,293       1,064     1,026       890       979    
Total noninterest income   $ 17,065   $ 11,993 $ 15,279   $ 8,809   $ 8,912    
                 
                 
Salaries and employee benefits   $   22,749   $   20,879 $   19,779   $   17,433   $   15,804    
Occupancy and equipment expense       3,533       3,694     3,367       3,318       3,133    
Professional and data processing fees       3,031       2,750     3,577       2,396       2,771    
Acquisition costs       -        -      (4 )     1,292       414    
Post-acquisition compensation, transition and integration costs       708       134     1,427       494       165    
FDIC insurance, other insurance and regulatory fees       926       964     1,065       933       840    
Loan/lease expense       312       214     624       369       260    
Net cost and gains/losses on operations of other real estate       1,182       298     2,477       (50 )     (70 )  
Advertising and marketing       1,037       785     1,122       984       753    
Bank service charges       508       483     469       462       466    
Correspondent banking expense       206       204     207       205       204    
Intangibles amortization       615       532     540       542       305    
Other         1,753       1,498     1,760       2,122       1,325    
Total noninterest expense   $ 36,560   $ 32,435 $ 36,410   $ 30,500   $ 26,370    
                 
Net income before taxes   $ 16,577   $ 14,332 $ 16,851   $ 10,417   $ 12,326    
Federal and state income tax expense     3,073     1,414   3,535     1,608     1,881    
Net income     $ 13,504   $ 12,918 $ 13,316   $ 8,809   $ 10,445    
                 
Basic EPS   $   0.86   $   0.82 $   0.85   $   0.56   $   0.75    
Diluted EPS   $   0.85   $   0.81 $   0.84   $   0.55   $   0.73    
                 
Weighted average common shares outstanding       15,714,588       15,693,345     15,641,401       15,625,123       13,919,565    
Weighted average common and common equivalent shares outstanding     15,938,377       15,922,940     15,898,591       15,922,324       14,232,423    
                 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
      For the Six Months Ended
      June 30,   June 30,
        2019       2018
           
      (dollars in thousands, except per share data)
           
INCOME STATEMENT        
Interest income   $ 106,283     $ 80,345
Interest expense     31,362       15,857
Net interest income     74,921       64,488
Provision for loan/lease losses     4,075       4,841
Net interest income after provision for loan/lease losses   $     70,846     $     59,647
           
           
Trust department fees   $ 4,854     $ 4,295
Investment advisory and management fees     3,624       2,010
Deposit service fees     3,212       3,142
Gain on sales of residential real estate loans     858       203
Gain on sales of government guaranteed portions of loans     70       358
Swap fee income     11,089       2,608
Securities losses, net     (52 )     -
Earnings on bank-owned life insurance     952       817
Debit card fees     1,706       1,610
Correspondent banking fees     388       477
Other       2,357       1,934
Total noninterest income   $     29,058     $     17,454
           
           
Salaries and employee benefits   $ 43,628     $ 31,782
Occupancy and equipment expense     7,227       6,198
Professional and data processing fees     5,781       5,479
Acquisition costs     -       506
Post-acquisition compensation, transition and integration costs     842       165
FDIC insurance, other insurance and regulatory fees     1,890       1,597
Loan/lease expense     526       551
Net cost of operation of other real estate     1,480       62
Advertising and marketing     1,822       1,446
Bank service charges     991       907
Correspondent banking expense     410       409
Intangibles amortization     1,147       609
Other       3,251       2,523
Total noninterest expense   $     68,995     $     52,234
           
Net income before taxes   $     30,909     $     24,867
Income tax expense     4,487       3,872
Net income     $     26,422     $     20,995
           
Basic EPS   $ 1.68     $ 1.51
Diluted EPS   $ 1.66     $ 1.48
           
Weighted average common shares outstanding     15,703,967       13,904,113
Weighted average common and common equivalent shares outstanding   15,930,659       14,219,003
           

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
   
  For the Quarter Ended   For the Six Months Ended    
  June 30, March 31, December 31, September 30, June 30,   June 30, June 30,    
    2019     2019     2018     2018     2018       2019     2018      
                     
  (dollars in thousands, except per share data)    
 
COMMON SHARE DATA                    
Common shares outstanding   15,772,939     15,755,442     15,718,208     15,673,760     13,973,940            
Book value per common share (1) $31.97   $31.00   $30.10   $29.18   $26.45            
Tangible book value per common share (2) $26.02   $24.98   $24.04   $23.46   $23.83            
Closing stock price $34.87   $33.92   $32.09   $40.85   $47.45            
Market capitalization $550,002   $534,425   $504,397   $640,273   $663,063            
Market price / book value   109.06%     109.42%     106.61%     139.98%     179.41%            
Market price / tangible book value   134.00%     135.77%     133.49%     174.16%     199.10%            
Earnings per common share (basic) LTM (3) $3.10   $2.99   $2.92   $2.79   $2.83            
Price earnings ratio LTM (3) 11.25 x   11.34 x   10.98 x   14.64 x   16.77 x            
TCE / TA (4)   8.05%     7.92%     7.78%     7.82%     8.18%            
                     
                     
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY            
Beginning balance $488,407   $473,138   $457,387   $369,588   $360,428            
Net income   13,504     12,918     13,316     8,809     10,445            
Other comprehensive income (loss), net of tax   2,243     2,343     1,943     (612 )   (1,335 )          
Common stock cash dividends declared   (942 )   (942 )   (939 )   (938 )   (836 )          
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)   1,088     950     431     477     886            
Ending balance $     504,300   $     488,407   $     473,138   $     457,387   $     369,588            
                     
                     
REGULATORY CAPITAL RATIOS (6):                    
Total risk-based capital ratio   12.18%     12.26%     10.69%     10.87%     11.23%            
Tier 1 risk-based capital ratio   9.87%     9.87%     9.77%     9.83%     10.19%            
Tier 1 leverage capital ratio   8.96%     8.90%     8.87%     8.87%     9.22%            
Common equity tier 1 ratio   9.04%     9.02%     8.89%     8.92%     9.16%            
                     
                     
KEY PERFORMANCE RATIOS AND OTHER METRICS                    
Return on average assets (annualized)   1.06%     1.04%     1.10%     0.75%     1.03%       1.05%     1.04%      
Return on average total equity (annualized)   10.84%     10.71%     11.42%     8.08%     11.45%       10.78%     11.64%      
Net interest margin   3.25%     3.25%     3.48%     3.46%     3.37%       3.25%     3.43%      
Net interest margin (TEY) (Non-GAAP)(7)   3.40%     3.40%     3.63%     3.60%     3.52%       3.40%     3.58%      
Efficiency ratio (Non-GAAP) (8)   66.38%     66.33%     66.35%     64.72%     64.32%       66.35%     63.75%      
Gross loans and leases / total assets   75.28%     74.99%     75.41%     76.23%     75.84%       75.28%     75.84%      
Gross loans and leases / total deposits   90.47%     90.59%     93.86%     96.44%     94.44%       90.47%     94.44%      
Effective tax rate   18.54%     9.87%     20.98%     15.44%     15.26%       14.52%     15.57%      
Full-time equivalent employees (9)   773     771     755     728     666       773     666      
                     
                     
AVERAGE BALANCES                      
Assets $ 5,077,900   $ 4,968,502   $ 4,842,232   $ 4,677,875   $ 4,053,684     $ 5,023,201   $ 4,024,188      
Loans/leases   3,839,674     3,759,615     3,699,885     3,612,648     3,077,517       3,799,645     3,048,447      
Deposits   4,271,391     4,110,868     3,986,236     3,840,077     3,343,003       4,191,130     3,291,283      
Total stockholders' equity     498,263       482,423       466,271       436,065       365,031         490,343       360,778      
                     
(1) Includes accumulated other comprehensive income (loss).     
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets.     
(3) LTM : Last twelve months.     
(4) TCE / TCA : tangible common equity / total tangible assets.  See GAAP to non-GAAP reconciliations.     
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.     
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.     
(7) TEY : Tax equivalent yield.  See GAAP to Non-GAAP reconciliations.     
(8) See GAAP to Non-GAAP reconciliations.     
(9) Growth in full-time equivalents due primarily to the merger with Springfield Bancshares, Inc., the acquisition of the Bates Companies and the addition of several new positions created to build scale.    
             

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
ANALYSIS OF NET INTEREST INCOME AND MARGIN                      
                         
    For the Quarter Ended
    June 30, 2019   March 31, 2019   June 30, 2018
     Average
Balance 
 Interest
Earned or
Paid 
 Average
Yield or Cost 
   Average
Balance 
 Interest
Earned or
Paid 
 Average
Yield or Cost 
   Average
Balance 
 Interest
Earned or
Paid 
 Average
Yield or Cost 
                         
    (dollars in thousands)
                         
Fed funds sold   $ 9,690 $ 56 2.32 %   $ 15,736 $ 93 2.40 %   $ 18,561 $ 61 1.32 %
Interest-bearing deposits at financial institutions   182,651   1,168 2.56 %     155,463   923 2.41 %     54,879   228 1.67 %
Securities (1)     644,999   6,062 3.77 %     660,454   6,096 3.74 %     648,276   5,752 3.56 %
Restricted investment securities   21,007   290 5.54 %     21,285   307 5.85 %     21,100   212 4.03 %
Loans (1)     3,839,674   48,413 5.06 %     3,759,615   46,477 5.01 %     3,077,517   36,008 4.69 %
Total earning assets (1) $ 4,698,021 $ 55,989 4.78 %   $ 4,612,553 $ 53,896 4.74 %   $ 3,820,333 $ 42,261 4.44 %
                         
Interest-bearing deposits $ 2,461,768 $ 8,271 1.35 %   $ 2,288,109 $ 7,174 1.27 %   $ 1,919,406 $ 4,089 0.85 %
Time deposits     1,013,391   5,554 2.20 %     1,012,459   5,305 2.12 %     665,643   2,439 1.47 %
Short-term borrowings   16,145   81 2.01 %     14,377   71 2.00 %     19,024   63 1.33 %
Federal Home Loan Bank advances   76,154   601 3.17 %     147,355   1,060 2.92 %     174,826   1,019 2.34 %
Other borrowings     10,550   92 3.50 %     43,701   448 4.16 %     67,044   596 3.57 %
Subordinated debentures   68,239   993 5.84 %     38,637   564 5.92 %     -   - 0.00 %
Junior subordinated debentures   37,731   576 6.12 %     37,686   572 6.16 %     37,558   508 5.43 %
Total interest-bearing liabilities $ 3,683,978 $ 16,168 1.76 %   $ 3,582,324 $ 15,194 1.72 %   $ 2,883,501 $ 8,714 1.21 %
                         
Net interest income / spread (1)   $ 39,821 3.02 %     $ 38,702 3.02 %     $ 33,547 3.23 %
Net interest margin (2)     3.25 %       3.25 %       3.37 %
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.40 %       3.40 %       3.52 %
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.31 %       3.31 %       3.46 %
                         
                         
                         
    For the Six Months Ended        
    June 30, 2019   June 30, 2018    
    Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
  Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
       
                         
    (dollars in thousands)        
                         
Fed funds sold   $ 12,713 $ 150 2.38 %   $ 19,132 $ 118 1.24 %        
Interest-bearing deposits at financial institutions   169,057   2,091 2.49 %     52,205   425 1.64 %        
Securities (1)     652,727   12,158 3.76 %     648,656   11,418 3.55 %        
Restricted investment securities   21,146   598 5.70 %     21,465   446 4.19 %        
Loans (1)     3,799,645   94,795 5.03 %     3,048,447   70,753 4.68 %        
Total earning assets (1) $ 4,655,288 $ 109,792 4.76 %   $ 3,789,905 $ 83,160 4.42 %        
                         
Interest-bearing deposits $ 2,374,939 $ 15,445 1.31 %   $ 1,873,817 $ 7,109 0.77 %        
Time deposits     1,012,925   10,859 2.16 %     641,152   4,301 1.35 %        
Short-term borrowings   15,261   152 2.01 %     18,148   95 1.06 %        
Federal Home Loan Bank advances   111,755   1,662 3.00 %     205,758   2,215 2.17 %        
Other borrowings     27,126   539 4.01 %     65,862   1,182 3.62 %        
Subordinated debentures   53,438   1,557 5.88 %     -   - 0.00 %        
Junior subordinated debentures   37,709   1,148 6.14 %     37,534   955 5.13 %        
Total interest-bearing liabilities $ 3,633,153 $ 31,362 1.74 %   $ 2,842,271 $ 15,857 1.13 %        
                         
Net interest income / spread (1)   $ 78,430 3.02 %     $ 67,303 3.29 %        
Net interest margin (2)     3.25 %       3.43 %        
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.40 %       3.58 %        
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.30 %       3.51 %        
                         
                         
                         
(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  
  June 30, March 31, December 31, September 30, June 30,  
    2019     2019     2018     2018     2018    
             
  (dollars in thousands, except per share data)  
             
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES            
Beginning balance $ 41,164   $ 39,847   $ 43,077   $ 37,545   $ 36,533    
Provision charged to expense   1,941     2,134     1,611     6,206     2,301    
Loans/leases charged off   (2,152 )   (1,059 )   (4,967 )   (991 )   (1,525 )  
Recoveries on loans/leases previously charged off   151     242     126     317     236    
Ending balance $     41,104   $     41,164   $     39,847   $     43,077   $     37,545    
             
             
NONPERFORMING ASSETS              
Nonaccrual loans/leases $ 13,148   $ 13,406   $ 14,260   $ 23,576   $ 12,554    
Accruing loans/leases past due 90 days or more   58     61     632     1,410     20    
Troubled debt restructures - accruing   1,313     3,794     3,659     4,240     1,327    
Total nonperforming loans/leases   14,519     17,261     18,551     29,226     13,901    
Other real estate owned   8,637     9,110     9,378     12,204     12,750    
Other repossessed assets   -     -     8     150     150    
Total nonperforming assets $     23,156   $     26,371   $     27,937   $     41,580   $     26,801    
             
             
ASSET QUALITY RATIOS            
Nonperforming assets / total assets   0.45 %   0.52 %   0.56 %   0.87 %   0.65 %  
Allowance / total loans/leases (1)   1.05 %   1.08 %   1.07 %   1.18 %   1.21 %  
Allowance / nonperforming loans/leases (1)   283.10 %   238.48 %   214.80 %   147.39 %   270.09 %  
Net charge-offs as a % of average loans/leases   0.05 %   0.02 %   0.13 %   0.02 %   0.04 %  
             
(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 For the Six Months Ended  
      June 30,   March 31,   June 30,   June 30,   June 30,  
  SELECT FINANCIAL DATA - SUBSIDIARIES     2019       2019       2018       2019       2018    
         
      (dollars in thousands)  
                         
  TOTAL ASSETS                      
                         
  Quad City Bank and Trust (1)   $ 1,637,115     $ 1,660,374     $ 1,563,643            
  m2 Lease Funds, LLC     234,072       231,470       234,566            
  Cedar Rapids Bank and Trust     1,527,521       1,446,637       1,345,431            
  Community State Bank - Ankeny     806,704       785,076       712,139            
  Springfield First Community Bank     671,644       638,542     N/A            
  Rockford Bank and Trust     523,262       513,045       484,123            
                         
  TOTAL DEPOSITS                      
                         
  Quad City Bank and Trust (1)   $ 1,434,467     $ 1,453,810     $ 1,283,766            
  Cedar Rapids Bank and Trust     1,283,151       1,228,232       1,080,685            
  Community State Bank - Ankeny     705,777       673,231       596,291            
  Springfield First Community Bank     471,340       445,113     N/A            
  Rockford Bank and Trust     453,149       433,016       376,240            
                         
  TOTAL LOANS & LEASES                      
                         
  Quad City Bank and Trust (1)   $ 1,273,400     $ 1,238,684     $ 1,184,879            
  m2 Lease Funds, LLC     230,676       228,356       233,297            
  Cedar Rapids Bank and Trust     1,100,823       1,076,166       1,034,057            
  Community State Bank - Ankeny     597,486       588,021       509,207            
  Springfield First Community Bank     515,566       491,985     N/A            
  Rockford Bank and Trust     423,244       404,575       386,649            
                         
  TOTAL LOANS & LEASES / TOTAL DEPOSITS                      
                         
  Quad City Bank and Trust (1)     89 %     85 %     92 %          
  Cedar Rapids Bank and Trust     86 %     88 %     96 %          
  Community State Bank - Ankeny     85 %     87 %     85 %          
  Springfield First Community Bank     109 %     111 %   N/A            
  Rockford Bank and Trust     93 %     93 %     103 %          
                         
                         
  TOTAL LOANS & LEASES / TOTAL ASSETS                      
                         
  Quad City Bank and Trust (1)     78 %     75 %     76 %          
  Cedar Rapids Bank and Trust     72 %     74 %     77 %          
  Community State Bank - Ankeny     74 %     75 %     72 %          
  Springfield First Community Bank     77 %     77 %   N/A            
  Rockford Bank and Trust     81 %     79 %     80 %          
                         
  ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES                      
                         
  Quad City Bank and Trust (1)     1.06 %     1.09 %     1.12 %          
  m2 Lease Funds, LLC     1.38 %     1.39 %     1.49 %          
  Cedar Rapids Bank and Trust (2)     1.19 %     1.19 %     1.28 %          
  Community State Bank - Ankeny (2)     1.09 %     1.07 %     1.02 %          
  Springfield First Community Bank (2)     0.37 %     0.30 %   N/A            
  Rockford Bank and Trust     1.43 %     1.74 %     1.50 %          
                         
  RETURN ON AVERAGE ASSETS                        
                         
  Quad City Bank and Trust (1)     1.22 %     1.19 %     1.30 %     1.20 %     1.33 %  
  Cedar Rapids Bank and Trust     1.95 %     1.54 %     1.46 %     1.75 %     1.45 %  
  Community State Bank - Ankeny     1.17 %     1.13 %     1.27 %     1.12 %     1.19 %  
  Springfield First Community Bank     1.37 %     1.12 %   N/A       1.24 %   N/A    
  Rockford Bank and Trust     0.65 %     0.46 %     0.74 %     0.56 %     0.68 %  
                         
  NET INTEREST MARGIN PERCENTAGE (3)                      
                         
  Quad City Bank and Trust (1)     3.29 %     3.24 %     3.45 %     3.26 %     3.48 %  
  Cedar Rapids Bank and Trust (5)     3.41 %     3.41 %     3.51 %     3.41 %     3.60 %  
  Community State Bank - Ankeny (4)     4.08 %     4.04 %     4.31 %     4.06 %     4.36 %  
  Springfield First Community Bank (6)     4.10 %     4.06 %   N/A       4.08 %   N/A    
  Rockford Bank and Trust     2.87 %     2.92 %     3.13 %     2.90 %     3.21 %  
                         
  ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET                      
  INTEREST MARGIN, NET                      
                         
  Cedar Rapids Bank and Trust   $ 71     $ 144     $ 209     $ 215     $ 452    
  Community State Bank - Ankeny     76       58       382       134       886    
  Springfield First Community Bank     971       910     N/A       1,881     N/A    
  QCR Holdings, Inc. (7)     (42 )     (43 )     (46 )     (85 )     (94 )  
                         
(1 ) Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank.  m2 Lease Funds, LLC      
  is also presented separately for certain (applicable) measurements.
     
(2 ) Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio.
     
(3 ) Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using      
  a 21% tax rate.
     
(4 ) Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest      
  margin would have been 4.01% for the quarter ended June 30, 2019, 3.98% for the quarter ended March 31, 2019 and 3.96% for the
     
  quarter ended June 30, 2018.
     
(5 ) Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest      
  margin would have been 3.39% for the quarter ended June 30, 2019, 3.38% for the quarter ended March 31, 2019 and 3.44% for the
     
  quarter ended June 30, 2018.
     
(6 ) Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest    
  margin would have been 3.39% for the quarter ended June 30, 2019 and 3.32% for the quarter ended March 31, 2019.
     
(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        
    June 30   March 31   December 31,   September 30,   June 30,          
GAAP TO NON-GAAP RECONCILIATIONS     2019       2019       2018       2018       2018            
             
    (dollars in thousands, except per share data)        
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)                              
                               
Stockholders' equity (GAAP)   $ 504,300     $ 488,407     $ 473,138     $ 457,387     $ 369,588            
Less: Intangible assets     93,837       94,790       95,282       89,755       36,561            
Tangible common equity (non-GAAP)   $ 410,463     $ 393,617     $ 377,856     $ 367,632     $ 333,027            
                               
Total assets (GAAP)   $ 5,194,852     $ 5,066,662     $ 4,949,710     $ 4,792,732     $ 4,106,883            
Less: Intangible assets     93,837       94,790       95,282       89,755       36,561            
Tangible assets (non-GAAP)   $ 5,101,015     $ 4,971,872     $ 4,854,428     $ 4,702,977     $ 4,070,322            
                               
Tangible common equity to tangible assets ratio (non-GAAP)     8.05 %       7.92 %       7.78 %       7.82 %       8.18 %            
                               
                               
    For the Quarter Ended For the Six Months Ended  
    June 30,   March 31   December 31,   September 30,   June 30,   June 30,   June 30,  
ADJUSTED NET INCOME (2)     2019       2019       2018       2018       2018       2019       2018    
                               
Net income (GAAP)   $ 13,504     $ 12,918     $ 13,316     $ 8,809     $ 10,445     $ 26,422     $ 20,995    
                               
Less nonrecurring items (post-tax) (3):                              
Income:                              
Securities gains, net     (41 )   $ -     $ -     $ -     $ -     $ (41 )   $ -    
Total nonrecurring income (non-GAAP)   $ (41 )   $ -     $ -     $ -     $ -     $ (41 )   $ -    
                               
Expense:                              
Acquisition costs (4)     -       -       29       1,216       327       -       400    
Post-acquisition compensation, transition and integration costs   559       106       1,127       390       130       665       130    
Total nonrecurring expense (non-GAAP)   $ 559     $ 106     $ 1,156     $ 1,606     $ 457     $ 665     $ 530    
Adjusted net income   (non-GAAP) (2)   $     14,104     $     13,024     $     14,472     $     10,415     $     10,902     $     27,128     $     21,525    
                               
ADJUSTED EARNINGS PER COMMON SHARE (2)                              
                               
Adjusted net income (non-GAAP) (from above)   $ 14,104     $ 13,024     $ 14,472     $ 10,415     $ 10,902     $ 27,128     $ 21,525    
                               
Weighted average common shares outstanding     15,714,588       15,693,345       15,641,401       15,625,123       13,919,565       15,703,967       13,904,113    
Weighted average common and common equivalent shares outstanding     15,938,377       15,922,940       15,898,591       15,922,324       14,232,423       15,930,659       14,219,003    
                               
Adjusted earnings per common share (non-GAAP):                              
Basic   $     0.90     $     0.83     $     0.93     $     0.67     $     0.78     $     1.73     $     1.55    
Diluted   $     0.88     $     0.82     $     0.91     $     0.65     $     0.77     $     1.70     $     1.51    
                               
ADJUSTED RETURN ON AVERAGE ASSETS (2)                              
                               
Adjusted net income (non-GAAP) (from above)   $ 14,104     $ 13,024     $ 14,472     $ 10,415     $ 10,902     $ 27,128     $ 21,525    
                               
Average Assets   $ 5,077,900     $ 4,968,502     $ 4,842,232     $ 4,677,875     $ 4,053,684     $ 5,023,201     $ 4,024,188    
                               
Adjusted return on average assets (annualized) (non-GAAP)     1.11 %       1.05 %       1.20 %       0.89 %       1.08 %       1.08 %       1.07 %    
                               
NET INTEREST MARGIN (TEY) (6)                              
                               
Net interest income (GAAP)   $ 38,013     $ 36,908     $ 39,593     $ 38,314     $ 32,085     $ 74,921     $ 64,488    
                               
Plus: Tax equivalent adjustment (5)     1,808       1,794       1,751       1,548       1,462       3,509       2,815    
                               
Net interest income - tax equivalent (Non-GAAP)   $ 39,821     $ 38,702     $ 41,344     $ 39,862     $ 33,547     $ 78,430     $ 67,303    
                               
Less:  Acquisition accounting net accretion     1,076       1,069       2,609       1,674       545       2,145       1,244    
                               
Adjusted net interest income   $ 38,745     $ 37,633     $ 38,735     $ 38,188     $ 33,002     $ 76,285     $ 66,059    
                               
Average earning assets   $ 4,698,021     $ 4,612,553     $ 4,513,277     $ 4,387,487     $ 3,820,333     $ 4,655,288     $ 3,789,905    
                               
Net interest margin (GAAP)     3.25%       3.25%       3.48%       3.46%       3.37%       3.25%       3.43%    
Net interest margin (TEY) (Non-GAAP)     3.40%       3.40%       3.63%       3.60%       3.52%       3.40%       3.58%    
Adjusted net interest margin (TEY) (Non-GAAP)     3.31%       3.31%       3.40%       3.45%       3.46%       3.30%       3.51%    
                               
EFFICIENCY RATIO (7)                              
                               
Noninterest expense (GAAP)   $ 36,560     $ 32,435     $ 36,410     $ 30,500     $ 26,370     $ 68,995     $ 52,234    
                               
Net interest income (GAAP)   $ 38,013     $ 36,908     $ 39,593     $ 38,314     $ 32,085     $ 74,921     $ 64,488    
Noninterest income (GAAP)     17,065       11,993       15,279       8,809       8,912       29,058       17,454    
Total income   $ 55,078     $ 48,901     $ 54,872     $ 47,123     $ 40,997     $ 103,979     $ 81,942    
                               
Efficiency ratio (noninterest expense/total income) (Non-GAAP)     66.38%       66.33%       66.35%       64.72%       64.32%       66.35%       63.75%    
                               
(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.