QCRH
$34.87
Qcr Holdings
($1.97)
(5.35%)
Earnings Details
3rd Quarter September 2020
Tuesday, October 27, 2020 4:05:00 PM
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Summary

Qcr Holdings (QCRH) Recent Earnings

Qcr Holdings (QCRH) reported 3rd Quarter September 2020 earnings of $1.11 per share on revenue of $88.8 million. The consensus earnings estimate was $0.84 per share on revenue of $66.0 million. Revenue grew 15.8% on a year-over-year basis.

QCR Holdings Inc is a multi-bank holding Company. Through its subsidiaries, it provides commercial and consumer banking, and trust and asset management services for the Quad Cities, Cedar Rapids, and Rockford communities.

Results
Reported Earnings
$1.11
Earnings Whisper
-
Consensus Estimate
$0.84
Reported Revenue
$88.8 Mil
Revenue Estimate
$66.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

QCR Holdings, Inc. Announces Record Third Quarter Earnings Despite Elevated COVID-19 Provisioning

Third Quarter 2020 Highlights

  • Record net income of $17.3 million, or $1.09 per diluted share
  • Adjusted net income (non-GAAP) of $17.7 million, or $1.11 per diluted share
  • Record noninterest income of $38.0 million, driven by record swap fee income of $26.7 million
  • Record pre-provision, pre-tax adjusted net income (non-GAAP) of $42.2 million
  • Pre-provision, pre-tax adjusted ROAA (non-GAAP) of 2.90%
  • NIM increased by 22 bps and NIM (TEY)(non-GAAP) increased by 24 bps to 3.36% and 3.51%, respectively
  • Annualized core loan and lease growth (non-GAAP) of 11.5% for the quarter, excluding SBA Paycheck Protection Program (“PPP”) loans
  • Provision expense of $20.3 million for the quarter, increasing ALLL to total loans and leases, excluding PPP loans (non-GAAP), by 44 bps to 2.05%
  • Annualized core deposit growth of 36.4% for the quarter
  • Loan Relief Program (“LRP”) participation down approximately 90% from the prior quarter to only 1.95% of total loans and leases

MOLINE, Ill., Oct. 27, 2020 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced record quarterly net income of $17.3 million and diluted earnings per share (“EPS”) of $1.09 for the third quarter of 2020, compared to net income of $13.7 million and diluted EPS of $0.86 for the second quarter of 2020. Pre-provision, pre-tax adjusted net income (non-GAAP) increased $5.4 million in the third quarter compared to the second quarter, led by record swap fee income, strong loan growth and improved net interest income and margin.

The Company reported adjusted net income (non-GAAP) of $17.7 million and adjusted diluted EPS (non-GAAP) of $1.11 for the third quarter of 2020, compared to adjusted net income (non-GAAP) of $14.0 million and adjusted diluted EPS (non-GAAP) of $0.88 for the second quarter of 2020. For the third quarter of 2019, net income and diluted EPS were $15.1 million and $0.94, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $15.9 million and $1.00, respectively.

  
 For the Quarter Ended
 September 30,June 30,September 30,
$ in millions (except per share data) 2020   2020   2019 
Net Income$17.3  $13.7  $15.1 
Diluted EPS$1.09  $0.86  $0.94 
Adjusted Net Income (non-GAAP)$17.7  $14.0  $15.9 
Adjusted Diluted EPS (non-GAAP)$1.11  $0.88  $1.00 
Pre-Provision/Pre-Tax Adjusted Income (non-GAAP)$42.2  $36.8  $21.7 
Pre-Provision/Pre-Tax Adjusted ROAA (non-GAAP)           2.90%               2.54%  1.66%
See GAAP to non-GAAP reconciliations    
     

“We are pleased to report a record quarter of net income, pre-provision, pre-tax adjusted net income, and noninterest income, driven by continued strong loan growth, record fee income and an expanded net interest margin,” commented Larry J. Helling, Chief Executive Officer. “Core loans grew more than 11% on an annualized basis, while maintaining disciplined underwriting and solid credit quality. Core deposits were even stronger this quarter with outsized growth in deposits coming from our correspondent banking relationships. Despite continuing to hold some excess liquidity on our balance sheet, we were able to lower deposit costs and bolster our net interest margin in the quarter.

“Additionally, we continued to experience a significant reduction in loan deferrals, and by quarter-end, approximately 90% of our clients who needed payment relief early in the pandemic had resumed making payments,” Helling said. “We believe this speaks to the high quality of our loan portfolio and the resiliency of our local markets, which continue to improve as pandemic-impacted jobs return at a faster pace than the rest of the country.

“Our asset quality remains solid and our banks are well positioned to continue to work through the pandemic,” added Helling. “We again chose to be prudent and recorded a significant provision for loan and lease losses during the quarter in order to continue to build reserves against future potential credit issues related to the unknown severity and duration of COVID-19.”

Annualized Loan and Lease Growth of 11.5%, excluding PPP Loans (non-GAAP)

During the third quarter of 2020, the Company’s total loans and leases increased by $107.7 million to a total of $4.2 billion. Loan and lease growth during the quarter was 11.5% on an annualized basis. Core deposits (excluding brokered deposits) increased $385.1 million, or 36.4% on an annualized basis. Brokered deposits declined by $62.6 million as the Company allowed certain higher cost brokered deposits to run off the balance sheet. The Company’s correspondent banking portfolio contributed to the majority of the core deposit growth as our correspondent bank clients grew liquidity. At quarter-end, the percentage of wholesale funds to total assets was 4.9%, which was down sharply from 8.9% in the second quarter of 2020 as the Company’s need for wholesale funding declined due to the strong growth in core deposits. Notably, more than half of the remaining wholesale funds consist of subordinated debt and trust preferred securities that provide regulatory capital. Additionally, at quarter-end, the percentage of gross loans and leases to total assets was 72.4%, which was down from 73.9% in the second quarter.

“We delivered solid loan growth for the quarter, driven primarily by strong production in our Specialty Finance Group,” said Helling. “Excluding our PPP loan production, loan and lease growth for the first nine months of 2020 was 7.2% on an annualized basis, and given our current pipeline, we now believe that we will be able to achieve organic loan growth of between 6% and 8% for the full year, higher than our previous guidance.”   

Net Interest Income of $44.6 million

Net interest income for the third quarter of 2020 totaled $44.6 million, compared to $41.0 million for the second quarter of 2020 and $40.7 million for the third quarter of 2019. The increase was primarily due to an increase in the reported net interest margin and, to a lesser extent, the growth in average interest-earning assets of $25.6 million, or 0.5% on a linked quarter basis. Acquisition-related net accretion totaled $833 thousand (pre-tax) for the third quarter of 2020, up slightly from the second quarter of 2020 and down from $1.3 million for the third quarter of 2019. Adjusted net interest income (non-GAAP) was $45.7 million for the third quarter of 2020, compared to $41.9 million for the second quarter of 2020 and $41.2 million for the third quarter of 2019.

In the third quarter, NIM was 3.36% and, on a tax-equivalent yield basis (non-GAAP), NIM was 3.51%, an increase of 22 basis points and 24 basis points from the second quarter of 2020, respectively. Adjusted NIM (non-GAAP), excluding acquisition-related net accretion was 3.44%, up 23 basis points from the second quarter. The increase in adjusted NIM (non-GAAP) during the quarter was primarily due to a 13 basis point increase in the yield on earning assets combined with a 14 basis point decline in the total cost of interest-bearing funds (due to both mix and rate).

 For the Quarter Ended
 September 30,June 30,September 30,
 2020  2020  2019 
NIM3.36% 3.14% 3.37%
NIM (TEY)(non-GAAP)3.51% 3.27% 3.52%
Adjusted NIM (TEY)(non-GAAP)3.44% 3.21% 3.41%
See GAAP to non-GAAP reconciliations

   

“During the quarter, we worked to improve the efficiency of the balance sheet by proactively reducing higher cost non-core funding which, in turn, eliminated some of our excess liquidity and helped to enhance our NIM,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Combined with a meaningful drop in our funding costs, which was driven by the increased core deposits and reduced wholesale funding, we were able to increase our adjusted NIM by 23 basis points in the quarter.”  

Record Noninterest Income of $38.0 million

Noninterest income for the third quarter of 2020 totaled $38.0 million, compared to $28.6 million for the second quarter of 2020. The increase was primarily due to $26.7 million in swap fee income, up $6.8 million from the second quarter of 2020. Wealth management revenue was $3.5 million for the quarter, consistent with the second quarter. In addition, securities gains and other income increased by $1.7 million from the prior quarter. Noninterest income increased $18.1 million or 90.7% when compared to the third quarter of 2019.

“Continued strong production from our Specialty Finance Group and our commercial teams across all of our banks led to a record $26.7 million in swap fee income during the quarter. Swap fee income totaled $53.4 million for the first nine months of 2020. This level of sustained production puts us on track to exceed our full year expectations for this source of fee income,” added Mr. Gipple.

Noninterest Expenses of $40.8 million

Noninterest expense for the third quarter of 2020 totaled $40.8 million, compared to $33.1 million for the second quarter of 2020. The linked-quarter increase was primarily due to increased salary and benefits expense of $4.7 million, with increased commission and incentive compensation expense in the quarter driven by the strong financial results and higher than anticipated swap fee income. In addition, losses on debt extinguishment increased $1.4 million, FDIC insurance and regulatory fees increased by $393 thousand due to our larger asset base, net cost on operations of other real estate increased by $348 thousand, disposition costs increased by $275 thousand, and advertising and marketing expenses increased by $198 thousand.

Continued to Significantly Build Reserves for COVID-19

Nonperforming assets (“NPAs”) totaled $19.0 million, an increase of $5.7 million from the second quarter of 2020. The increase was primarily due to a few isolated relationships that experienced degradation not directly related to COVID-19. The ratio of NPAs to total assets increased to 0.32% at September 30, 2020, compared to 0.24% at June 30, 2020, and 0.27% at September 30, 2019.

The Company’s provision for loan and lease losses totaled $20.3 million for the third quarter of 2020, up from $19.9 million in the prior quarter. The linked-quarter increase in the provision for loan and lease losses was primarily due to increased qualitative factors in response to the COVID-19 pandemic. As of September 30, 2020, the Company’s allowance to total loans and leases was 1.87%, which was up from 1.47% at June 30, 2020, and from 1.00% at September 30, 2019. Excluding the impact of the $358 million in PPP loans that are on the Company’s balance sheet, the ALLL to total loans and leases was 2.05% (non-GAAP).

In accordance with GAAP for acquisition accounting, 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 of $4.5 million at September 30, 2020.

Strong Capital Levels

As of September 30, 2020, the Company’s total risk-based capital ratio was 14.91%, the common equity tier 1 ratio was 10.43%, and the tangible common equity to tangible assets ratio was 8.42% (non-GAAP). By comparison, these respective ratios were 13.71%, 10.25% and 8.48% as of June 30, 2020. Excluding the impact of the PPP loans, the tangible common equity to tangible assets ratio was 8.89% (non-GAAP).

During the third quarter, the Company successfully completed a private placement of $50.0 million of 5.125% Fixed-to-Floating Rate Subordinated Notes due 2030. This offering enabled us to further build our capital base to support the organic growth of our subsidiary banks and be well positioned for future M&A opportunities.

Focus on Three Strategic Long-Term Initiatives

As part of the Company’s ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, it continues to operate under three key strategic long-term initiatives:

  • Organic loan and lease growth of 9% per year, funded by core deposits;
  • Grow fee-based income by at least 6% per year; and
  • Limit our annual operating expense growth to 5% per year.

These initiatives are long-term targets. Due to the impact of the COVID-19 pandemic among other factors, the Company may not be able to achieve these goals for the full year 2020.

Supplemental Presentation and Where to Find It
In addition to this press release, the Company has included a supplemental presentation that provides further information regarding the Company’s loan exposures and deferrals. Investors, analysts and other interested persons may find this presentation on the Securities and Exchange Commission’s EDGAR filing system at www.sec.gov/edgar.shtml, or on the Company’s website at www.qcrh.com.

Conference Call Details
The Company will host an earnings call/webcast tomorrow, October 28, 2020, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through November 11, 2020. The replay access information is 877-344-7529 (international 412-317-0088); access code 10148155. 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, and Springfield communities through its wholly-owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company engages in commercial leasing through its wholly-owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 24 locations in Iowa, Missouri, Wisconsin and Illinois. As of September 30, 2020, the Company had approximately $5.9 billion in assets, $4.2 billion in loans and $4.7 billion in deposits. For additional information, please visit the Company’s 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 the 2020 presidential election and 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, widespread disease or pandemics (including the COVID-19 pandemic in the United States), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices (including the new current expected credit loss (CECL) impairment standards, that will change how the Company estimates credit losses when implemented); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) 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; (ix) the loss of key executives or employees; (x) changes in consumer spending; and (xi) unexpected outcomes of existing or new litigation involving the Company. 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 

Kim K. Garrett
Vice President
Corporate Communications
Investor Relations Manager
(319) 743-7006
kgarret@qcrh.com

 
QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
      
 As of
 September 30,June 30,March 31,December 31, September 30,
  2020 2020 2020 2019 2019
      
 (dollars in thousands)
      
CONDENSED BALANCE SHEET     
      
Cash and due from banks$68,932$88,577$169,827$76,254$91,671
Federal funds sold and interest-bearing deposits 302,668 142,900 206,708 157,691 197,263
Securities 782,088 748,883 684,571 611,341 555,409
Net loans/leases 4,168,395 4,079,432 3,662,435 3,654,204 3,574,154
Intangibles 11,902 13,872 14,421 14,970 15,529
Goodwill 74,066 74,248 74,248 74,748 77,748
Derivatives 236,381 225,164 195,973 87,827 104,388
Other assets 220,128 220,920 213,134 220,049 210,673
Assets held for sale - 10,765 10,758 11,966 465,547
Total assets$ 5,864,560$ 5,604,761$ 5,232,075$ 4,909,050$ 5,292,382
      
Total deposits$4,672,268$4,349,775$4,170,478$3,911,051$3,802,241
Total borrowings 226,962 376,250 244,399 278,955 320,457
Derivatives 244,510 233,589 203,744 88,436 109,242
Other liabilities 148,207 87,539 71,185 90,254 70,169
Liabilities held for sale - 1,588 3,130 5,003 470,530
Total stockholders' equity 572,613 556,020 539,139 535,351 519,743
Total liabilities and stockholders' equity$ 5,864,560$ 5,604,761$ 5,232,075$ 4,909,050$ 5,292,382
      
ANALYSIS OF LOAN PORTFOLIO     
Loan/lease mix:     
Commercial and industrial loans$1,823,049$1,850,110$1,484,979$1,507,825$1,469,978
Commercial real estate loans 1,999,715 1,869,162 1,783,086 1,736,396 1,687,922
Direct financing leases 73,011 79,105 83,324 87,869 92,307
Residential real estate loans 245,032 241,069 237,742 239,904 245,667
Installment and other consumer loans 102,471 99,150 106,728 109,352 106,540
Deferred loan/lease origination costs, net of fees 4,699 1,663 8,809 8,859 7,856
Total loans/leases$4,247,977$4,140,259$3,704,668$3,690,205$3,610,270
Less allowance for estimated losses on loans/leases 79,582 60,827 42,233 36,001 36,116
Net loans/leases$ 4,168,395$ 4,079,432$ 3,662,435$ 3,654,204$ 3,574,154
      
ANALYSIS OF SECURITIES PORTFOLIO     
Securities mix:     
U.S. government sponsored agency securities$18,437$17,472$19,457$20,078$21,268
Municipal securities 569,075 526,192 493,664 447,853 391,329
Residential mortgage-backed and related securities 134,147 145,672 122,853 120,587 123,880
Asset backed securities 40,665 39,797 28,499 16,887 10,957
Other securities 19,764 19,750 20,098 5,936 7,975
Total securities$ 782,088$ 748,883$ 684,571$ 611,341$ 555,409
      
ANALYSIS OF DEPOSITS     
Deposit mix:     
Noninterest-bearing demand deposits$1,175,085$1,177,482$829,782$777,224$782,232
Interest-bearing demand deposits 2,938,194 2,488,755 2,440,907 2,407,502 2,245,557
Time deposits 499,021 560,982 617,979 571,343 536,352
Brokered deposits 59,968 122,556 281,810 154,982 238,100
Total deposits$ 4,672,268$ 4,349,775$ 4,170,478$ 3,911,051$ 3,802,241
      
ANALYSIS OF BORROWINGS     
Borrowings mix:     
Term FHLB advances$40,000$90,000$55,000$50,000$60,000
Overnight FHLB advances - 55,000 40,000 109,300 135,800
FRB borrowings - 100,000 30,000 - -
Other short-term borrowings 30,430 24,818 13,067 13,423 18,526
Subordinated notes 118,577 68,516 68,455 68,394 68,334
Junior subordinated debentures 37,955 37,916 37,877 37,838 37,797
Total borrowings$ 226,962$ 376,250$ 244,399$ 278,955$ 320,457
      

 


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
        
   For the Quarter Ended
   September 30,June 30,March 31,December 31,September 30,
    2020  2020  2020  2019  2019 
        
   (dollars in thousands, except per share data)
        
INCOME STATEMENT      
Interest income $50,890 $48,650 $48,982 $52,977 $56,817 
Interest expense  6,309  7,694  11,276  13,058  16,098 
Net interest income  44,581  40,956  37,706  39,919  40,719 
Provision for loan/lease losses  20,342  19,915  8,367  979  2,012 
Net interest income after provision for loan/lease losses $ 24,239 $ 21,041 $ 29,339 $ 38,940 $ 38,707 
        
        
Trust department fees $2,280 $2,227 $2,312 $2,365 $2,340 
Investment advisory and management fees  1,266  1,399  1,727  1,589  1,782 
Deposit service fees  1,403  1,286  1,477  1,787  1,813 
Gain on sales of residential real estate loans  1,370  1,196  652  823  890 
Gain on sales of government guaranteed portions of loans  -  -  -  159  519 
Swap fee income  26,688  19,927  6,804  7,409  9,797 
Securities gains (losses), net  1,802  65  -  26  (3)
Earnings on bank-owned life insurance  502  612  329  533  489 
Debit card fees  946  775  758  766  886 
Correspondent banking fees  220  198  215  194  189 
Gain on sale of assets and liabilities of subsidiary  -  -  -  12,286  - 
Other   1,482  941  922  1,868  1,204 
Total noninterest income $ 37,959 $ 28,626 $ 15,196 $ 29,805 $ 19,906 
        
        
Salaries and employee benefits $25,999 $21,304 $18,519 $24,220 $24,215 
Occupancy and equipment expense  3,807  3,748  4,032  4,019  3,860 
Professional and data processing fees  3,758  3,646  3,369  3,570  4,030 
Post-acquisition compensation, transition and integration costs  (32) 70  151  1,855  884 
Disposition costs  192  (83) 517  3,325  - 
FDIC insurance, other insurance and regulatory fees  1,301  908  683  523  542 
Loan/lease expense  403  339  228  349  221 
Net cost of (income from) and gains/losses on operations of other real estate  16  (332) 13  232  2,078 
Advertising and marketing  750  552  682  1,670  1,056 
Bank service charges  488  501  504  516  502 
Losses on liability extinguishment  1,874  429  147  288  148 
Correspondent banking expense  205  212  216  216  209 
Intangibles amortization  531  548  549  560  560 
Goodwill impairment  -  -  500  3,000  - 
Loss on sale of subsidiary  305  -  -  -  - 
Other   1,241  1,288  1,313  1,951  1,640 
Total noninterest expense $ 40,838 $ 33,130 $ 31,423 $ 46,294 $ 39,945 
        
Net income before income taxes $ 21,360 $ 16,537 $ 13,112 $ 22,451 $ 18,668 
Federal and state income tax expense  4,016  2,798  1,884  6,560  3,573 
Net income  $ 17,344 $ 13,739 $ 11,228 $ 15,891 $ 15,095 
        
Basic EPS  $1.10 $0.87 $0.71 $1.01 $0.96 
Diluted EPS $1.09 $0.86 $0.70 $0.99 $0.94 
        
        
Weighted average common shares outstanding  15,767,152  15,747,056  15,796,796  15,772,703  15,739,430 
Weighted average common and common equivalent shares outstanding  15,923,578  15,895,336  16,011,456  16,033,043  15,976,742 
        

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
     
  For the Nine Months Ended
  September 30, September 30,
   2020   2019 
     
  (dollars in thousands, except per share data)
     
INCOME STATEMENT    
Interest income $148,522  $163,099 
Interest expense  25,279   47,459 
Net interest income  123,243   115,640 
Provision for loan/lease losses  48,624   6,087 
Net interest income after provision for loan/lease losses $ 74,619  $ 109,553 
     
     
Trust department fees  6,819  $7,194 
Investment advisory and management fees  4,392   5,406 
Deposit service fees  4,166   5,025 
Gain on sales of residential real estate loans  3,218   1,748 
Gain on sales of government guaranteed portions of loans  -   589 
Swap fee income  53,419   20,886 
Securities gains (losses), net  1,867   (56)
Earnings on bank-owned life insurance  1,443   1,441 
Debit card fees  2,479   2,591 
Correspondent banking fees  633   578 
Other  3,345   3,562 
Total noninterest income $ 81,781  $ 48,964 
     
     
Salaries and employee benefits  65,822  $67,843 
Occupancy and equipment expense  11,587   11,087 
Professional and data processing fees  10,773   9,811 
Post-acquisition compensation, transition and integration costs  189   1,727 
Disposition costs  626   - 
FDIC insurance, other insurance and regulatory fees  2,892   2,432 
Loan/lease expense  970   748 
Net cost of (income from) and gains/losses on operation of other real estate (303)  3,557 
Advertising and marketing  1,984   2,878 
Bank service charges  1,493   1,494 
Losses on liability extinguishment  2,450   148 
Correspondent banking expense  633   619 
Intangibles amortization  1,628   1,706 
Goodwill impairment  500   - 
Loss on sale of subsidiary  305   - 
Other  3,842   4,891 
Total noninterest expense $ 105,391  $ 108,941 
     
Net income before taxes $ 51,009  $ 49,576 
Income tax expense  8,698   8,059 
Net income $ 42,311  $ 41,517 
     
Basic EPS $2.68  $2.64 
Diluted EPS $2.65  $2.60 
     
Weighted average common shares outstanding  15,770,335   15,715,788 
Weighted average common and common equivalent shares outstanding  15,945,832   15,946,020 
     


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
         
 As of and for the Quarter Ended For the Nine Months Ended
 September 30,June 30,March 31,December 31,September 30,September 30,September 30,
  2020  2020  2020  2019  2019   2020  2019 
         
 (dollars in thousands, except per share data)
         
COMMON SHARE DATA        
Common shares outstanding 15,792,357  15,790,611  15,773,736  15,828,098  15,790,462    
Book value per common share (1)$36.26 $35.21 $34.18 $33.82 $32.91    
Tangible book value per common share (2)$30.82 $29.63 $28.56 $28.15 $27.01    
Closing stock price$27.41 $31.18 $27.07 $43.86 $37.98    
Market capitalization$432,869 $492,351 $426,995 $694,220 $599,722    
Market price / book value 75.60% 88.55% 79.20% 129.69% 115.40%   
Market price / tangible book value 88.95% 105.23% 94.79% 155.76% 140.61%   
Earnings per common share (basic) LTM (3)$3.69 $3.55 $3.54 $3.65 $3.49    
Price earnings ratio LTM (3) 7.43 x  8.78 x  7.65 x  12.02 x  10.88 x    
TCE / TA (4) 8.42% 8.48% 8.76% 9.25% 8.20%   
         
         
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY    
Beginning balance$556,020 $539,139 $535,351 $519,743 $504,300    
Net income 17,344  13,739  11,228  15,891  15,095    
Other comprehensive income (loss), net of tax (614) 3,622  (3,691) (683) 543    
Common stock cash dividends declared (945) (945) (942) (947) (944)   
Proceeds from issuance of 9,400 shares of common stock as a result of the performance based targets met for Bates Companies -  -  -  399  -    
Repurchase and cancellation of 100,932 shares of common stock as a result of a share repurchase program -  -  (3,780) -  -    
Other (5) 808  465  973  948  749    
Ending balance$ 572,613 $ 556,020 $ 539,139 $ 535,351 $ 519,743    
         
         
REGULATORY CAPITAL RATIOS (6):        
Total risk-based capital ratio 14.91% 13.71% 13.54% 13.33% 12.22%   
Tier 1 risk-based capital ratio 11.23% 11.07% 11.16% 11.04% 9.94%   
Tier 1 leverage capital ratio 9.21% 8.91% 10.19% 9.53% 9.02%   
Common equity tier 1 ratio 10.43% 10.25% 10.31% 10.18% 9.12%   
         
         
KEY PERFORMANCE RATIOS AND OTHER METRICS         
Return on average assets (annualized) 1.19% 0.95% 0.91% 1.23% 1.16%  1.02% 1.09%
Return on average total equity (annualized) 12.94% 10.29% 8.23% 11.93% 11.70%  10.51% 11.09%
Net interest margin 3.36% 3.14% 3.40% 3.36% 3.37%  3.29% 3.29%
Net interest margin (TEY) (Non-GAAP)(7) 3.51% 3.27% 3.56% 3.51% 3.52%  3.44% 3.43%
Efficiency ratio (Non-GAAP) (8) 49.48% 47.61% 59.40% 66.40% 65.89%  51.40% 66.18%
Gross loans and leases / total assets (10) 72.43% 74.01% 70.95% 75.36% 74.80%  72.43% 74.80%
Gross loans and leases / total deposits (10) 90.92% 95.18% 88.83% 94.35% 94.95%  90.92% 94.95%
Effective tax rate 18.80% 16.92% 14.37% 29.22% 19.14%  17.05% 16.26%
Full-time equivalent employees (9) 687  712  703  697  766   687  766 
         
         
AVERAGE BALANCES         
Assets$5,820,555 $5,800,164 $4,948,311 $5,147,754 $5,217,763  $5,524,087 $5,088,055 
Loans/leases 4,185,275  3,999,523  3,686,410  3,868,435  3,962,464   3,957,903  3,853,918 
Deposits 4,726,881  4,732,626  3,954,707  4,227,572  4,302,995   4,472,328  4,228,418 
Total stockholders' equity 536,187  534,095  545,678  532,756  516,195   536,578  498,960 
         


(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)Decrease from September 30, 2019 to December 31, 2019 due to sale of subsidiary Rockford Bank & Trust. The decrease from June 30, 2020 to September 30, 2020 due to sale of Bates Companies and interns employed only during the summer.
(10)Excludes assets held for sale as of September 30, 2019, Deccember 31, 2019, March 31, 2020 and June 30, 2020.
  

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
             
ANALYSIS OF NET INTEREST INCOME AND MARGIN           
             
  For the Quarter Ended
  September 30, 2020 June 30, 2020 September 30, 2019
  Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
 Average BalanceInterest
Earned or
Paid
Average
Yield or Cost
 Average
Balance
Interest
Earned or
Paid
Average
Yield or Cost
             
  (dollars in thousands)
             
Fed funds sold $2,205$10.18% $865$10.46% $7,234$422.30%
Interest-bearing deposits at financial institutions 321,679 920.11%  533,483 1350.10%  172,386 9512.19%
Securities (1)  749,425 6,8363.66%  697,559 6,5363.77%  626,471 6,0803.85%
Restricted investment securities 19,714 2494.94%  21,234 2885.46%  22,719 2935.12%
Loans (1)  4,185,275 45,6544.34%  3,999,522 43,4174.37%  3,962,464 51,2145.13%
Total earning assets (1)$5,278,298$52,8323.99% $5,252,663$50,3773.86% $4,791,274$58,5804.85%
             
Interest-bearing deposits$2,932,988$2,0860.28% $2,840,860$2,4290.34% $2,505,383$7,9071.25%
Time deposits  638,031 2,3991.50%  809,233 3,3371.66%  975,736 5,4862.23%
Short-term borrowings 26,996 110.17%  25,064 220.35%  17,333 982.24%
Federal Home Loan Bank advances 57,078 2111.45%  95,616 3471.46%  123,107 1,0233.30%
Subordinated debentures 77,783 1,0315.30%  68,480 9945.84%  68,299 1,0035.83%
Junior subordinated debentures 37,936 5715.89%  37,891 5726.07%  37,774 5816.10%
Total interest-bearing liabilities$3,770,812$6,3090.66% $3,877,144$7,7010.80% $3,727,632$16,0981.71%
             
Net interest income / spread (1) $46,5233.33%  $42,6763.06%  $42,4823.14%
Net interest margin (2)  3.36%   3.14%   3.37%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.51%   3.27%   3.52%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) 3.44%   3.21%   3.41%
             
             
             
  For the Nine Months Ended    
  September 30, 2020 September 30, 2019  
  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 $2,795$190.89% $10,887$1912.35%    
Interest-bearing deposits at financial institutions 327,902 5870.24%  170,167 3,0422.39%    
Securities (1)  688,985 19,5673.78%  643,975 18,2373.79%    
Restricted investment securities 20,767 7955.03%  21,670 8915.50%    
Loans (1)  3,957,903 133,1414.49%  3,853,918 145,6825.05%    
Total earning assets (1)$4,998,352$154,1094.12% $4,700,617$168,0434.78%    
             
Interest-bearing deposits$2,718,613$9,9200.49% $2,418,420$23,3511.29%    
Time deposits  743,746 9,5371.71%  1,000,529 16,3462.18%    
Short-term borrowings 23,804 810.45%  15,952 2752.30%    
Federal Home Loan Bank advances 87,920 1,0071.50%  115,539 2,6853.11%    
Other borrowings  - -0.00%  18,084 5123.79%    
Subordinated debentures 71,582 3,0195.63%  58,392 2,5615.86%    
Junior subordinated debentures 37,894 1,7155.95%  37,730 1,7296.13%    
Total interest-bearing liabilities$3,683,559$25,2790.91% $3,664,646$47,4591.73%    
             
Net interest income / spread (1) $128,8303.21%  $120,5843.05%    
Net interest margin (2)  3.29%   3.29%    
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.44%   3.43%    
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) 3.38%   3.33%    
             


(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
 September 30,June 30,March 31,December 31,September 30,
  2020  2020  2020  2019  2019 
      
 (dollars in thousands, except per share data)
      
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES     
Beginning balance$60,827 $42,233 $36,001 $36,116 $41,104 
Reclassification of allowance related to held for sale loans -  -  -  -  (6,122)
Provision charged to expense (1) 20,342  19,915  8,367  979  1,584 
Loans/leases charged off (1,819) (1,450) (2,335) (1,182) (741)
Recoveries on loans/leases previously charged off 232  129  200  88  291 
Ending balance$ 79,582 $ 60,827 $ 42,233 $ 36,001 $ 36,116 
      
      
NONPERFORMING ASSETS      
Nonaccrual loans/leases$17,597 $12,099 $11,628 $7,902 $8,231 
Accruing loans/leases past due 90 days or more 86  99  1,419  33  - 
Troubled debt restructures - accruing 1,061  920  545  979  763 
Total nonperforming loans/leases 18,744  13,118  13,592  8,914  8,994 
Other real estate owned 125  157  3,298  4,129  4,248 
Other repossessed assets 110  25  45  41  - 
Total nonperforming assets$ 18,979 $ 13,300 $ 16,935 $ 13,084 $ 13,242 
      
      
ASSET QUALITY RATIOS     
Nonperforming assets / total assets (2) 0.32% 0.24% 0.32% 0.27% 0.27%
Allowance / total loans/leases (3) 1.87% 1.47% 1.14% 0.98% 1.00%
Allowance / nonperforming loans/leases (3) 424.57% 463.69% 310.72% 403.87% 401.56%
Net charge-offs as a % of average loans/leases 0.04% 0.03% 0.06% 0.03% 0.01%
      


(1)Excludes provision related to loans included in assets held for sale of $428 thousand for the quarter ending September 30, 2019.
(2)Excludes assets held for sale.
(3)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 EndedFor the Nine Months Ended
   September 30,June 30, September 30,September 30,September 30,
 SELECT FINANCIAL DATA - SUBSIDIARIES  2020   2020   2019   2020   2019 
   (dollars in thousands)
            
 TOTAL ASSETS          
            
 Quad City Bank and Trust (1) $2,205,935  $1,984,245  $1,642,950     
 m2 Lease Funds, LLC  241,452   241,114   232,432     
 Cedar Rapids Bank and Trust  2,012,182   2,021,043   1,592,896     
 Community State Bank - Ankeny  937,017   903,648   801,596     
 Springfield First Community Bank  803,478   745,474   693,897     
            
 TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1) $1,955,360  $1,707,970  $1,371,721     
 Cedar Rapids Bank and Trust  1,399,267   1,351,784   1,271,828     
 Community State Bank - Ankeny  822,261   778,499   695,980     
 Springfield First Community Bank  592,528   564,710   484,225     
            
 TOTAL LOANS & LEASES          
            
 Quad City Bank and Trust (1) $1,556,798  $1,485,971  $1,290,195     
 m2 Lease Funds, LLC  241,783   239,351   230,061     
 Cedar Rapids Bank and Trust  1,387,372   1,380,672   1,148,952     
 Community State Bank - Ankeny  683,086   671,773   594,227     
 Springfield First Community Bank  620,721   601,843   526,466     
            
 TOTAL LOANS & LEASES / TOTAL DEPOSITS          
            
 Quad City Bank and Trust (1)  80%  87%  94%    
 Cedar Rapids Bank and Trust  99%  102%  90%    
 Community State Bank - Ankeny  83%  86%  85%    
 Springfield First Community Bank  105%  107%  109%    
            
            
 TOTAL LOANS & LEASES / TOTAL ASSETS          
            
 Quad City Bank and Trust (1)  71%  75%  79%    
 Cedar Rapids Bank and Trust  69%  68%  72%    
 Community State Bank - Ankeny  73%  74%  74%    
 Springfield First Community Bank  77%  81%  76%    
            
 ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES          
            
 Quad City Bank and Trust (1)  1.86%  1.51%  1.07%    
 m2 Lease Funds, LLC  2.53%  1.99%  1.39%    
 Cedar Rapids Bank and Trust (2)  2.22%  1.62%  1.17%    
 Community State Bank - Ankeny (2)  1.92%  1.56%  1.13%    
 Springfield First Community Bank (2)  1.09%  0.94%  0.42%    
            
 RETURN ON AVERAGE ASSETS           
            
 Quad City Bank and Trust (1)  0.56%  0.68%  1.33%  0.81%  1.25%
 Cedar Rapids Bank and Trust  2.66%  2.36%  2.04%  2.25%  1.85%
 Community State Bank - Ankeny  0.82%  0.25%  1.71%  0.53%  1.33%
 Springfield First Community Bank  1.52%  1.04%  1.32%  1.28%  1.27%
            
 NET INTEREST MARGIN PERCENTAGE (3)          
            
 Quad City Bank and Trust (1)  3.07%  2.88%  3.49%  3.17%  3.34%
 Cedar Rapids Bank and Trust (5)  3.54%  3.37%  3.41%  3.45%  3.41%
 Community State Bank - Ankeny (4)  4.12%  3.77%  4.83%  3.94%  4.32%
 Springfield First Community Bank (6)  3.75%  3.88%  3.64%  3.82%  3.93%
            
 ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET        
 INTEREST MARGIN, NET          
            
 Cedar Rapids Bank and Trust $217  $62  $229  $327  $444 
 Community State Bank - Ankeny  56   72   649   193   783 
 Springfield First Community Bank  598   641   432   1,791   2,313 
 QCR Holdings, Inc. (7)  (38)  (39)  (42)  (117)  (127)
            


(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 4.06% for the quarter ended September 30, 2020, 3.71% for the quarter ended June 30, 2020 and 4.46% for the quarter ended September 30, 2019.
(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 3.46% for the quarter ended September 30, 2020, 3.35% for the quarter ended June 30, 2020 and 3.34% for the quarter ended September 30, 2019.
(6)Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin would have been 4.02% for the quarter ended September 30, 2020, 4.29% for the quarter ended June 30, 2020 and 3.16% for the quarter ended September 30, 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
  September 30, June 30, March 31, December 31, September 30,
GAAP TO NON-GAAP RECONCILIATIONS  2020   2020   2020   2019   2019 
  (dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)          
           
Stockholders' equity (GAAP) $572,613  $556,020  $539,139  $535,351  $519,743 
Less: Intangible assets  85,968   88,120   88,669   89,717   93,277 
Tangible common equity (non-GAAP) $486,645  $467,900  $450,470  $445,634  $426,466 
           
Total assets (GAAP) $5,864,560  $5,604,761  $5,232,075  $4,909,050  $5,292,382 
Less: Intangible assets  85,968   88,120   88,669   89,717   93,277 
Tangible assets (non-GAAP) $5,778,592  $5,516,641  $5,143,406  $4,819,333  $5,199,105 
           
Tangible common equity to tangible assets ratio (non-GAAP)  8.42%  8.48%  8.76%  9.25%  8.20%
           
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1)          
           
Stockholder's equity (GAAP) $572,613  $556,020  $539,139  $535,351  $519,743 
Less: PPP loan interest income (post-tax) (2)  4,934   2,085   -   -   - 
Less: Intangible assets  85,968   88,120   88,669   89,717   93,277 
Tangible common equity, excluding PPP loan income (non-GAAP) $481,711  $465,815  $450,470  $445,634  $426,466 
           
Total assets (GAAP) $5,864,560  $5,604,761  $5,232,075  $4,909,050  $5,292,382 
Less: PPP loans  357,506   358,052   -   -   - 
Less: Intangible assets  85,968   88,120   88,669   89,717   93,277 
Tangible assets, excluding PPP loans (non-GAAP) $5,421,086  $5,158,589  $5,143,406  $4,819,333  $5,199,105 
           
Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP)  8.89%  9.03%  8.76%  9.25%  8.20%
           


(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)PPP interest income (post-tax) is calculated using an estimated effective tax rate of 21%.
  

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
           
GAAP TO NON-GAAP RECONCILIATIONS For the Quarter Ended For the Nine Months Ended
  September 30, June 30,March 31,December 31,September 30, September 30,September 30,
ADJUSTED NET INCOME (1)  2020   2020   2020   2019   2019   2020   2019 
   
  (dollars in thousands, except per share data)
           
Net income (GAAP) $17,344  $13,739  $11,228  $15,891  $15,095  $42,311  $41,517 
           
Less non-core items (post-tax) (2):          
Income:          
Securities gains(losses), net  1,424   51   -   21  $(2) $1,475  $(43)
Gain on sale of assets and liabilities of subsidiary  -   -   -   8,539   -   -   - 
Total non-core income (non-GAAP) $1,424  $51  $-  $8,560  $(2) $1,475  $(43)
           
Expense:          
Losses on debt extinguishment, net $1,480  $339  $116  $228  $117  $1,936  $117 
Goodwill impairment  -   -   500   3,000   -   500   - 
Disposition costs  152   (66)  408   2,627   -   495   - 
Tax expense on expected liquidation of RB&T BOLI  -   -   -   790   -   -   - 
Post-acquisition compensation, transition and integration costs  (25)  55   119   1,465   698   149   1,363 
Loss on sale of subsidiary  212   -   -   -   -   212   - 
Total non-core expense (non-GAAP) $1,819  $329  $1,143  $8,110  $815  $3,291  $1,480 
Adjusted net income (non-GAAP) (1) $ 17,739  $ 14,016  $ 12,372  $ 15,441  $ 15,912  $ 44,127  $ 43,040 
           
PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)          
Net income (GAAP) $17,344  $13,739  $11,228  $15,891  $15,095  $42,311  $41,517 
Less: Non-core income not tax-effected  1,802   65   -   12,313   (3)  1,867   (54)
Plus: Non-core expense not tax-effected  2,339   416   1,315   9,258   1,032   4,070   1,873 
          Provision expense  20,342   19,915   8,367   979   2,012   48,624   6,087 
         Federal and state income tax expense  4,016   2,798   1,884   6,560   3,573   8,698   8,059 
Pre-provision/pre-tax adjusted income (non-GAAP) (1) $ 42,239  $ 36,803  $ 22,794  $ 20,375  $ 21,714  $ 101,836  $ 57,591 
           
PRE-PROVISION/PRE-TAX ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)          
           
Pre-provision/pre-tax adjusted income (non-GAAP) $42,239  $36,803  $22,794  $20,375  $21,714  $101,836  $57,591 
           
Average Assets $5,820,555  $5,800,164  $4,948,311  $5,147,754  $5,217,763  $5,524,087  $5,088,055 
           
Pre-provision/pre-tax adjusted return on average assets (non-GAAP)  2.90%  2.54%  1.84%  1.58%  1.66%  2.46%  1.51%
           
ADJUSTED EARNINGS PER COMMON SHARE (1)          
           
Adjusted net income (non-GAAP) (from above) $17,739  $14,016  $12,372  $15,441  $15,912  $44,127  $43,040 
           
Weighted average common shares outstanding  15,767,152   15,747,056   15,796,796   15,772,703   15,739,430   15,770,335   15,715,788 
Weighted average common and common equivalent shares outstanding  15,923,578   15,895,336   16,011,456   16,033,043   15,976,742   15,945,832   15,946,020 
           
Adjusted earnings per common share (non-GAAP):          
Basic $ 1.13  $ 0.89  $ 0.78  $ 0.98  $ 1.01  $ 2.80  $ 2.74 
Diluted $ 1.11  $ 0.88  $ 0.77  $ 0.96  $ 1.00  $ 2.77  $ 2.70 
           
ADJUSTED RETURN ON AVERAGE ASSETS (1)          
           
Adjusted net income (non-GAAP) (from above) $17,739  $14,016  $12,372  $15,441  $15,912  $44,127  $43,040 
           
Average Assets $5,820,555  $5,800,164  $4,948,311  $5,147,754  $5,217,763  $5,524,087  $5,088,055 
           
Adjusted return on average assets (annualized) (non-GAAP)  1.22%  0.97%  1.00%  1.20%  1.22%  1.07%  1.13%
           
NET INTEREST MARGIN (TEY) (4)          
           
Net interest income (GAAP) $44,581  $40,948  $37,698  $39,919  $40,719  $123,243  $115,640 
           
Plus: Tax equivalent adjustment (3)  1,942   1,728   1,790   1,783   1,763   5,587   4,944 
           
           
Net interest income - tax equivalent (Non-GAAP) $46,523  $42,676  $39,488  $41,702  $42,482  $128,830  $120,584 
           
Less: Acquisition accounting net accretion  833   736   625   931   1,268   2,194   3,413 
           
           
Adjusted net interest income $45,690  $41,940  $38,863  $40,771  $41,214  $126,636  $117,171 
           
Average earning assets $5,278,298  $5,252,663  $4,461,018  $4,711,310  $4,791,274  $4,998,352  $4,700,617 
           
Net interest margin (GAAP)  3.36%  3.14%  3.40%  3.36%  3.37%  3.29%  3.29%
Net interest margin (TEY) (Non-GAAP)  3.51%  3.27%  3.56%  3.51%  3.52%  3.44%  3.43%
Adjusted net interest margin (TEY) (Non-GAAP)  3.44%  3.21%  3.50%  3.43%  3.41%  3.38%  3.33%
           
EFFICIENCY RATIO (5)          
           
Noninterest expense (GAAP) $40,838  $33,122  $31,415  $46,294  $39,945  $105,391  $108,941 
           
Net interest income (GAAP) $44,581  $40,948  $37,698  $39,919  $40,719  $123,243  $115,640 
Noninterest income (GAAP)  37,959   28,626   15,196   29,805   19,906   81,781   48,964 
Total income $82,540  $69,574  $52,894  $69,724  $60,625  $205,024  $164,604 
           
Efficiency ratio (noninterest expense/total income) (Non-GAAP)  49.48%  47.61%  59.39%  66.40%  65.89%  51.40%  66.18%
           
ALLOWANCE FOR LOAN AND LEASE LOSSES TO TOTAL LOANS AND LEASES, EXCLUDING PPP LOANS (6)          
           
Allowance for loan and lease losses $79,582  $60,827  $42,233  $36,001  $36,116  $79,582  $36,116 
           
Total loans and leases $4,247,977  $4,140,259  $3,704,668  $3,690,205  $3,610,270  $4,247,977  $3,610,270 
Less: PPP loans  357,506   358,052   -   -   -   357,506   - 
Total loans and leases, excluding PPP loans $3,890,471  $3,782,207  $3,704,668  $3,690,205  $3,610,270  $3,890,471  $3,610,270 
           
Allowance for loan and lease losses to total loans and leases, excluding PPP loans  2.05%  1.61%  1.14%  0.98%  1.00%  2.05%  1.00%
           
           
LOAN GROWTH ANNUALIZED, EXCLUDING PPP LOANS          
Total loans and leases $4,247,977  $4,140,259  $3,704,668  $3,690,205  $3,610,270  $4,247,977  $3,610,270 
Less: PPP loans  357,506   358,052   -   -   -   357,506   - 
Total loans and leases, excluding PPP loans $3,890,471  $3,782,207  $3,704,668  $3,690,205  $3,610,270  $3,890,471  $3,610,270 
           
Loan growth annualized, excluding PPP loans  11.45%  8.37%  1.57%  8.86%  -30.71%  16.28%  -9.84%
           


(1)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.
(2)Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain/loss on sale of subsidiary which has an estimated effective tax rate of 30.5%.
(3)Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21%.
(4)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.
(5)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.
(6)Allowance for loan and lease losses to total loans and leases, excluding PPP loans is a non-GAAP measure. The Company's management utilizes this ratio to remove the from the allowance calculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans have no allowance for loan and lease loss allocation.

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Source: QCR Holdings, Inc.