EX-99.1 2 tm2221732d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

 

PRESS RELEASEFOR IMMEDIATE RELEASE

 

QCR Holdings, Inc. Announces Second Quarter 2022 Results

 

Second Quarter 2022 Highlights

 

·Completed the acquisition of Guaranty Federal Bancshares, Inc. adding approximately $1.3 billion in assets, $808 million in loans and $1.1 billion in deposits

·Reported net income of $15.2 million, or $0.87 per diluted share

·Adjusted net income (non-GAAP) of $30.4 million, or $1.73 per diluted share

·Acquisition/Post-acquisition related expenses and CECL Day 2 provision totaled $15.5 million, post-tax, or $0.88 per diluted share

·Net Interest Margin (“NIM”) of 3.53% and Adjusted NIM (TEY)(non-GAAP) of 3.74% expanded significantly from the prior quarter by 23 and 24 basis points, respectively

·Capital Markets Revenue from Swap Fees of $13.0 million doubled from the first quarter of 2022

·Annualized loan and lease growth of 14.0% for the quarter, excluding loan balances acquired from the Guaranty Bank transaction and SBA Paycheck Protection Program (“PPP”) loans (non-GAAP)

·Repurchased 602,500 shares at an average price of $54.80 per share

 

Moline, IL, July 26, 2022 – QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $15.2 million and diluted earnings per share (“EPS”) of $0.87 for the second quarter of 2022, compared to net income of $23.6 million and diluted EPS of $1.49 for the first quarter of 2022. Included in the second quarter of 2022 results were $5.7 million of acquisition/post-acquisition related expenses and $9.8 million of CECL Day 2 provision, both post-tax. The CECL Day 2 provision was required to establish the initial credit loss allowances for the acquired non-PCD loan portfolio and off-balance sheet exposure as a result of the acquisition of Guaranty Federal Bancshares, which closed on April 1, 2022.

 

$ in millions (except per share data)  For the Quarter
Ended
June 30, 2022		   Per Diluted
Share		 
Reported Net Income (GAAP)  $15.2   $0.87 
Acquisition/Post-Acquisition Related Expenses (Post-Tax)  $5.7   $0.32 
CECL Day 2 Provision (Post-Tax)*  $9.8   $0.56 
Other (Post-Tax)  $(0.3)  $(0.02)
Adjusted Net Income (non-GAAP, see below)  $30.4   $1.73 

 

*CECL Day 2 provision to establish the initial non-PCD loan and off-balance sheet exposure credit loss allowances under ASU 2016-13, Financial Instruments – Credit Losses, for the acquired loan portfolio.

 

Excluding acquisition/post-acquisition related expenses, the CECL Day 2 provision and other nonrecurring items, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the second quarter of 2022 were $30.4 million and $1.73, respectively. For the first quarter of 2022, adjusted net income (non-GAAP) was $24.4 million and adjusted diluted EPS (non-GAAP) was $1.54. For the second quarter of 2021, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $22.5 million and $1.40, respectively.

 

 

 

 

   For the Quarter Ended 
   June 30,   March 31,   June 30, 
$ in millions (except per share data)   2022    2022    2021 
Net Income  $15.2   $23.6   $22.3 
Diluted EPS  $0.87   $1.49   $1.39 
Adjusted Net Income (non-GAAP)*  $30.4   $24.4   $22.5 
Adjusted Diluted EPS (non-GAAP)*  $1.73   $1.54   $1.40 

 

*Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

 

“We delivered another strong quarter of net income, driven by exceptional loan growth, expanding net interest margin and well managed expenses,” said Larry J. Helling, Chief Executive Officer. “Building on the momentum we saw in the first quarter, we generated robust lending activity again in the second quarter with annualized loan growth of 14.0% after excluding the impact of the acquired portfolio and PPP activity. Adjusting for the nonrecurring items, primarily related to the closing of the Guaranty Bank acquisition, we increased core earnings by $6.0 million on a linked-quarter basis, generating an adjusted ROAA of 1.66%”

 

“On April 1st, we successfully completed the acquisition of Guaranty Federal Bancshares, Inc. and merged Guaranty Bank into Springfield First Community Bank with the combined bank retaining the Guaranty Bank name. We’re eager to continue to grow in the vibrant southwest Missouri region and we look forward to serving our clients and our communities.”

 

Net Interest Income of $59.4 Million 

NIM Expanded by 23 Basis Points from the Prior Quarter

 

Net interest income for the second quarter of 2022 totaled $59.4 million, compared to $45.7 million for the first quarter of 2022 and $43.5 million for the second quarter of 2021. The increase in net interest income was due to an increase in average earning assets, primarily attributable to the Guaranty Bank transaction, increased organic loan growth on a linked-quarter basis, and strong NIM expansion. Adjusted net interest income (non-GAAP) during the quarter was $61.1 million, an increase of $12.6 million, or 25.9%, from the prior quarter. Adjusted net interest income (non-GAAP) was $45.7 million for the second quarter of 2021. Acquisition-related net accretion totaled $1.7 million for the second quarter of 2022, up from $118 thousand in the first quarter of 2022 and $291 thousand for the second quarter of 2021.

 

In the second quarter, NIM was 3.53% and tax-equivalent yield (“TEY”) basis (non-GAAP) NIM was 3.74%, compared to 3.30% and 3.50% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.64%, up 14 basis points from the prior quarter. The increase in Adjusted NIM (non-GAAP) during the quarter was primarily due to the impact of multiple rate increases on our asset-sensitive balance sheet as well as the addition of Guaranty Bank.

 

   For the Quarter Ended 
   June 30,   March 31,   June 30, 
   2022   2022   2021 
NIM   3.53%   3.30%   3.28%
NIM (TEY)(non-GAAP) *   3.74%   3.50%   3.46%
Adjusted NIM (TEY)(non-GAAP) *   3.64%   3.50%   3.44%
Adjusted NIM ex. PPP (TEY)(non-GAAP)*   3.63%   3.46%   3.32%

 

* See GAAP to non-GAAP reconciliations       

 

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“Excluding the impact of acquisition-related net accretion and PPP fees, we significantly expanded our adjusted NIM during the second quarter by 17 basis points” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Our balance sheet is well positioned to continue to drive strong NIM expansion in this rapidly rising rate environment.”

 

Annualized Loan and Lease Growth of 14.0%, Excluding the Guaranty Bank Acquisition and PPP Loans (non-GAAP)

 

During the second quarter of 2022, the Company’s loans and leases increased $970.0 million to a total of $5.8 billion. Excluding the initial loan balances from the Guaranty Bank acquisition and PPP loans (non-GAAP), loan and lease growth during the quarter was $168.7 million, or 14.0% on an annualized basis. Core deposits (excluding brokered deposits) increased by $973.2 million during the quarter, due to the Guaranty Bank acquisition.

 

“Our continued robust loan growth in the second quarter was driven by strength in our traditional commercial lending, leasing and our Specialty Finance business,” added Helling. “This is a testament to the economic resiliency in our markets as well as our relationship-based community banking model, emphasizing the importance of strong relationships with new and existing clients. Given our current pipeline, we are reaffirming our targeted organic loan growth to between 10% and 12% for the full year.”

 

Noninterest Income of $22.8 Million

 

Noninterest income for the second quarter of 2022 totaled $22.8 million, compared to $15.6 million for the first quarter of 2022. The increase was primarily due to a $6.6 million increase in capital markets revenue from swap fees as well as the Guaranty Bank acquisition. Wealth management revenue was $3.5 million for the quarter, down 12.9% from the first quarter of 2022, primarily due to increased market volatility.

 

“Capital markets revenue totaled $13.0 million for the quarter, which was within our guidance range,” added Gipple. “Given our solid pipeline and recognizing timing continues to be impacted by project delays caused by ongoing supply chain disruptions and inflationary pressures, we continue to expect this source of fee income to be in a range of $13 to $15 million per quarter for the remainder of 2022.”

 

Noninterest Expenses of $54.2 Million, Including Acquisition/Post-Acquisition Related Expenses

 

Noninterest expense for the second quarter of 2022 totaled $54.2 million, including acquisition/post-acquisition related expenses of $6.8 million, compared to $38.3 million for the first quarter of 2022 and $35.7 million for the second quarter of 2021. The linked-quarter increase was primarily due to the inclusion of expenses from Guaranty Bank and expenses related to the acquisition. Excluding these acquisition/post-acquisition related costs, noninterest expense for the second quarter was $47.5 million.

 

Asset Quality Reflects Addition of Guaranty Bank

 

Nonperforming assets (“NPAs”) totaled $24.0 million at the end of the second quarter, an increase of $21.3 million over the first quarter of 2022, primarily the result of the Guaranty Bank acquisition and two legacy lending relationships. The ratio of NPAs to total assets was 0.33% on June 30, 2022, compared to 0.04% on March 31, 2022, and 0.17% on June 30, 2021. In addition, the Company’s criticized loans and classified loans to total loans and leases at June 30, 2022 were 2.37% and 1.43%, respectively, compared to 2.45% and 1.13% as of March 31, 2022.

 

The Company recorded an $11.2 million provision for credit losses in the second quarter of 2022, due solely to the CECL Day 2 provision of $12.4 million (pre-tax) as a result of the Guaranty Bank acquisition. As of June 30, 2022, the ACL on total loans/leases was 1.59%, compared to 1.55% as of March 30, 2022.

 

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Continued Strong Capital Levels

 

As of June 30, 2022, the Company’s total risk-based capital ratio was 13.02%, the common equity tier 1 ratio was 9.17% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.11%. By comparison, these respective ratios were 14.50%, 10.61% and 9.60% as of March 31, 2022. Total risk-based capital and the common equity tier 1 were both impacted by expected initial dilution from the Guaranty Bank acquisition. The Company’s accumulated other comprehensive income (“AOCI”) declined $24.3 million during the second quarter due to a decrease in the value of its available for sale securities portfolio and certain derivatives resulting from ongoing increases in interest rates during the quarter. While AOCI reduced the Company’s tangible common equity (non-GAAP), solid earnings partially offset this impact, which led to a decline of only 8.4% in tangible book value (non-GAAP).

 

During the second quarter, the Company purchased and retired 602,500 shares of its common stock at an average price of $54.80 per share as the Company finished repurchases under the original 2020 authorized plan and began repurchases under the May 2022 authorized plan. Under the 2020 share repurchase program, the Company repurchased 794,000 shares in total at an average price of $50.60 per share. The 2022 share repurchase program, announced during the second quarter of 2022, authorized an approximate 1,500,000 additional shares to be repurchased. The Company repurchased 280,000 shares during the quarter and has approximately 1,220,000 shares remaining under its 2022 share repurchase program.

 

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:

 

·Generate 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 annual operating expense growth to 5% per year.

 

Conference Call Details

 

The Company will host an earnings call/webcast tomorrow, July 27, 2022, 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 August 3, 2022. The replay access information is 877-344-7529 (international 412-317-0088); access code 7416915. 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, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank on April 1, 2022, with the combined entity operating under the Guaranty Bank name. 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 offers equipment loans and leases to businesses through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. Including the Guaranty Bank acquisition, the Company now has 40 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2022, the Company had approximately $7.4 billion in assets, $5.8 billion in loans and $5.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

 

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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 effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof, 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, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB; (iv) changes in local, 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; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; and (xiii) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. 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

 

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QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)

 

   As of 
   June 30,   March 31,   December 31,   September 30,   June 30, 
   2022   2022   2021   2021   2021 
                     
   (dollars in thousands) 
CONDENSED BALANCE SHEET                         
Cash and due from banks  $92,379   $50,540   $37,490   $57,310   $55,598 
Federal funds sold and interest-bearing deposits   56,532    66,390    87,662    70,826    88,780 
Securities, net of allowance for credit losses   879,918    823,311    810,215    828,719    810,445 
Net loans/leases   5,705,478    4,753,082    4,601,411    4,519,060    4,338,811 
Intangibles   18,333    8,856    9,349    9,857    10,365 
Goodwill   137,607    74,066    74,066    74,066    74,066 
Derivatives   97,455    107,326    222,220    198,393    193,395 
Other assets   405,239    292,248    253,719    256,277    255,952 
Total assets  $7,392,941   $6,175,819   $6,096,132   $6,014,508   $5,827,412 
                          
Total deposits  $5,820,657   $4,839,689   $4,922,772   $4,871,828   $4,688,935 
Total borrowings   583,166    443,270    170,805    183,514    198,908 
Derivatives   113,305    116,193    225,135    201,450    196,092 
Other liabilities   132,675    108,743    100,410    107,902    113,001 
Total stockholders' equity   743,138    667,924    677,010    649,814    630,476 
Total liabilities and stockholders' equity  $7,392,941   $6,175,819   $6,096,132   $6,014,508   $5,827,412 
                          
ANALYSIS OF LOAN PORTFOLIO                         
Loan/lease mix:                         
Commercial and industrial - revolving  $322,258   $263,441   $248,483   $175,155   $182,882 
Commercial and industrial - other   1,403,689    1,374,221    1,346,602    1,465,580    1,505,384 
Total commercial and industrial   1,725,947    1,637,662    1,595,085    1,640,735    1,688,266 
Commercial real estate, owner occupied   628,565    439,257    421,701    434,014    427,734 
Commercial real estate, non-owner occupied   889,530    679,898    646,500    644,850    618,879 
Construction and land development   1,080,372    863,116    918,571    852,418    708,289 
Multi-family   860,742    711,682    600,412    529,727    466,804 
Direct financing leases   40,050    43,330    45,191    50,237    56,153 
1-4 family real estate   473,141    379,613    377,361    376,067    382,142 
Consumer   99,556    73,310    75,311    71,682    69,438 
Total loans/leases  $5,797,903   $4,827,868   $4,680,132   $4,599,730   $4,417,705 
Less allowance for credit losses   92,425    74,786    78,721    80,670    78,894 
Net loans/leases  $5,705,478   $4,753,082   $4,601,411   $4,519,060   $4,338,811 
                          
ANALYSIS OF SECURITIES PORTFOLIO                         
Securities mix:                         
U.S. government sponsored agency securities  $20,448   $21,380   $23,328   $23,689   $14,670 
Municipal securities   710,638    667,245    639,799    649,486    641,603 
Residential mortgage-backed and related securities   81,247    86,381    94,323    100,744    106,139 
Asset backed securities   19,956    23,233    27,124    30,607    31,778 
Other securities   47,827    25,270    25,839    24,367    16,429 
Total securities  $880,116   $823,509   $810,413   $828,893   $810,619 
Less allowance for credit losses   198    198    198    174    174 
Net securities  $879,918   $823,311   $810,215   $828,719   $810,445 
                          
ANALYSIS OF DEPOSITS                         
Deposit mix:                         
Noninterest-bearing demand deposits  $1,514,005   $1,275,493   $1,268,788   $1,342,273   $1,258,885 
Interest-bearing demand deposits   3,758,566    3,181,685    3,232,633    3,086,711    2,976,696 
Time deposits   540,074    382,268    421,348    441,743    452,171 
Brokered deposits   8,012    243    3    1,101    1,183 
Total deposits  $5,820,657   $4,839,689   $4,922,772   $4,871,828   $4,688,935 
                          
ANALYSIS OF BORROWINGS                         
Borrowings mix:                         
Overnight FHLB advances (1)  $400,000   $290,000   $15,000   $30,000   $40,000 
Other short-term borrowings   1,070    1,190    3,800    1,600    7,070 
Subordinated notes   133,562    113,890    113,850    113,811    113,771 
Junior subordinated debentures   48,534    38,190    38,155    38,103    38,067 
Total borrowings  $583,166   $443,270   $170,805   $183,514   $198,908 

 

(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 1.45%.    

 

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QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)

 

   For the Quarter Ended 
   June 30,   March 31,   December 31,   September 30,   June 30, 
   2022   2022   2021   2021   2021 
                     
   (dollars in thousands, except per share data) 
INCOME STATEMENT                         
Interest income  $68,205   $51,062   $52,020   $51,667   $48,903 
Interest expense   8,805    5,329    5,507    5,438    5,387 
Net interest income   59,400    45,733    46,513    46,229    43,516 
Provision for credit losses (1)   11,200    (2,916)   (3,227)   -    - 
Net interest income after provision for loan/lease losses  $48,200   $48,649   $49,740   $46,229   $43,516 
                          
Trust department fees  $2,497   $2,963   $2,843   $2,714   $2,848 
Investment advisory and management fees   983    1,036    1,047    1,054    1,039 
Deposit service fees   2,223    1,555    1,644    1,588    1,492 
Gain on sales of residential real estate loans   809    493    922    954    1,184 
Gain on sales of government guaranteed portions of loans   -    19    227    -    - 
Swap fee income/capital markets revenue   13,004    6,422    12,982    24,885    9,568 
Securities gains (losses), net   -    -    -    -    (88)
Earnings on bank-owned life insurance   350    346    470    446    451 
Debit card fees   1,499    1,007    1,072    1,085    1,084 
Correspondent banking fees   244    277    266    265    269 
Other   1,173    1,515    1,512    1,661    1,449 
Total noninterest income  $22,782   $15,633   $22,985   $34,652   $19,296 
                          
Salaries and employee benefits  $29,972   $23,627   $24,809   $28,207   $23,044 
Occupancy and equipment expense   5,978    3,937    3,723    4,122    3,965 
Professional and data processing fees   4,365    3,671    3,866    3,568    3,702 
Acquisition costs   1,973    1,851    624    -    - 
Post-acquisition compensation, transition and integration costs   4,796    -    -    -    - 
Disposition costs   -    -    5    -    - 
FDIC insurance, other insurance and regulatory fees   1,394    1,310    1,316    1,108    986 
Loan/lease expense   761    267    606    308    457 
Net cost of (income from) and gains/losses on operations of other real estate   59    (1)   -    (1,346)   (113)
Advertising and marketing   1,198    761    1,679    1,095    853 
Bank service charges   610    541    553    525    572 
Correspondent banking expense   213    199    200    201    198 
Intangibles amortization   787    493    508    508    508 
Other   2,142    1,669    1,523    3,091    1,503 
Total noninterest expense  $54,248   $38,325   $39,412   $41,387   $35,675 
                          
Net income before income taxes  $16,734   $25,957   $33,313   $39,494   $27,137 
Federal and state income tax expense   1,492    2,333    6,304    7,929    4,788 
Net income  $15,242   $23,624   $27,009   $31,565   $22,349 
                          
Basic EPS  $0.88   $1.51   $1.73   $2.02   $1.41 
Diluted EPS  $0.87   $1.49   $1.71   $1.99   $1.39 
                          
Weighted average common shares outstanding   17,345,324    15,625,112    15,582,276    15,635,123    15,813,932 
Weighted average common and common equivalent shares outstanding   17,549,107    15,852,256    15,838,246    15,869,798    16,045,239 

 

(1)Provision for credit losses for the quarter ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures.

 

 7 

 

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

   For Six Months Ended 
   June 30,   June 30, 
   2022   2021 
         
   (dollars in thousands, except per share data) 
INCOME STATEMENT          
Interest income  $119,267   $96,468 
Interest expense   14,134    10,977 
Net interest income   105,133    85,491 
Provision for credit losses (1)   8,284    6,713 
Net interest income after provision for loan/lease losses  $96,849   $78,778 
           
Trust department fees  $5,460   $5,649 
Investment advisory and management fees   2,019    1,979 
Deposit service fees   3,778    2,900 
Gain on sales of residential real estate loans   1,302    2,521 
Gain on sales of government guaranteed portions of loans   19    - 
Swap fee income/capital markets revenue   19,426    23,125 
Securities gains (losses), net   -    (88)
Earnings on bank-owned life insurance   696    922 
Debit card fees   2,506    2,059 
Correspondent banking fees   521    583 
Other   2,688    3,135 
Total noninterest income  $38,415   $42,785 
           
Salaries and employee benefits  $53,599   $47,891 
Occupancy and equipment expense   9,915    8,073 
Professional and data processing fees   8,036    7,145 
Acquisition costs   3,824    - 
Post-acquisition compensation, transition and integration costs   4,796    - 
Disposition costs   -    8 
FDIC insurance, other insurance and regulatory fees   2,704    2,051 
Loan/lease expense   1,028    757 
Net cost of (income from) and gains/losses on operations of other real estate   58    (74)
Advertising and marketing   1,959    1,480 
Bank service charges   1,151    1,095 
Correspondent banking expense   412    398 
Intangibles amortization   1,280    1,016 
Other   3,811    3,063 
Total noninterest expense  $92,573   $72,903 
           
Net income before income taxes  $42,691   $48,660 
Federal and state income tax expense   3,825    8,329 
Net income  $38,866   $40,331 
           
Basic EPS  $2.36   $2.55 
Diluted EPS  $2.33   $2.52 
           
Weighted average common shares outstanding   16,485,218    15,808,788 
Weighted average common and common equivalent shares outstanding   16,700,682    16,035,394 

 

(1)Provision for credit losses for the six months ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures.

 

8

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

   As of and for the Quarter Ended   For the Six Months Ended 
   June 30,   March 31,   December 31,   September 30,   June 30,   June 30,   June 30, 
   2022   2022   2021   2021   2021   2022   2021 
                             
   (dollars in thousands, except per share data) 
COMMON SHARE DATA                                   
Common shares outstanding   17,064,347    15,579,605    15,613,460    15,590,428    15,763,522           
Book value per common share (1)  $43.55   $42.87   $43.36   $41.68   $40.00           
Tangible book value per common share (Non-GAAP) (2)  $34.41   $37.55   $38.02   $36.30   $34.64           
Closing stock price  $53.99   $56.59   $56.00   $51.44   $48.09           
Market capitalization  $921,304   $881,650   $874,354   $801,972   $758,068           
Market price / book value   123.97%   132.00%   129.15%   123.42%   120.24%          
Market price / tangible book value   156.90%   150.71%   147.30%   141.72%   138.83%          
Earnings per common share (basic) LTM (3)  $6.14   $6.68   $6.30   $5.73   $4.81           
Price earnings ratio LTM (3)   8.79 x     8.47 x     8.88 x     8.98 x     10.00 x            
TCE / TA (Non-GAAP) (4)   8.11%   9.60%   9.87%   9.54%   9.51%          
                                    
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY                                   
Beginning balance  $667,924   $677,010   $649,814   $630,476   $608,719           
Net income   15,242    23,624    27,009    31,565    22,349           
Other comprehensive income (loss), net of tax   (24,286)   (27,340)   295    (2,546)   4,179           
Common stock cash dividends declared   (1,059)   (938)   (935)   (946)   (951)          
Issuance of 2,071,291 shares of common stock as a result of the acquisition of Guaranty Federal Bancshares   117,214    -    -    -    -           
Repurchase and cancellation of shares of common stock as a result of a share repurchase program   (33,016)   (4,416)   -    (9,367)   (4,800)          
Other (5)   1,119    (16)   827    632    980           
Ending balance  $743,138   $667,924   $677,010   $649,814   $630,476           
                                    
                                    
REGULATORY CAPITAL RATIOS (6):                                   
Total risk-based capital ratio   13.02%   14.50%   14.77%   14.64%   14.72%          
Tier 1 risk-based capital ratio   9.86%   11.27%   11.46%   11.26%   11.26%          
Tier 1 leverage capital ratio   9.61%   10.78%   10.46%   10.28%   10.29%          
Common equity tier 1 ratio   9.17%   10.61%   10.76%   10.55%   10.52%          
                                    
KEY PERFORMANCE RATIOS AND OTHER METRICS                                   
Return on average assets (annualized)   0.83%   1.55%   1.76%   2.11%   1.56%   1.16%   1.41%
Return on average total equity (annualized)   7.74%   13.81%   16.23%   19.30%   14.33%   10.55%   13.14%
Net interest margin   3.53%   3.30%   3.29%   3.36%   3.28%   3.43%   3.27%
Net interest margin (TEY) (Non-GAAP)(7)   3.74%   3.50%   3.50%   3.56%   3.46%   3.63%   3.45%
Efficiency ratio (Non-GAAP) (8)   66.01%   62.45%   56.71%   51.17%   56.80%   64.49%   56.83%
Gross loans and leases / total assets   78.42%   78.17%   76.77%   76.48%   75.81%   78.42%   76.10%
Gross loans and leases / total deposits   99.61%   99.76%   95.07%   94.41%   94.22%   99.61%   94.22%
Effective tax rate   8.92%   8.99%   18.92%   20.08%   17.64%   8.96%   17.12%
Full-time equivalent employees (9)   968    749    726    724    725    968    725 
                                    
AVERAGE BALANCES                                   
Assets  $7,324,470   $6,115,127   $6,121,446   $5,982,583   $5,761,314   $6,723,137   $5,704,151 
Loans/leases   5,711,471    4,727,478    4,608,111    4,529,136    4,412,322    5,222,193    4,342,440 
Deposits   5,867,444    4,903,354    4,983,869    4,779,876    4,709,732    5,388,062    4,669,533 
Total stockholders' equity   788,204    684,126    665,698    654,186    624,000    736,452    614,061 

 

(1)Includes accumulated other comprehensive income (loss).
(2)Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP).
(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)Increase at June 30, 2022 due to the acquisition of Guaranty Bank.

 

9

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

   For the Quarter Ended 
   June 30, 2022   March 31, 2022   June 30, 2021 
   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) 
ANALYSIS OF NET INTEREST INCOME AND MARGIN                                    
Fed funds sold  $5,896   $12    0.83%  $4,564   $2    0.15%  $1,817   $1    0.06%
Interest-bearing deposits at financial institutions   67,254    169    1.01%   69,328    35    0.20%   88,396    35    0.16%
Securities (1)   920,308    9,002    3.91%   802,260    7,682    3.83%   798,732    7,294    3.66%
Restricted investment securities   37,166    485    5.16%   22,183    281    5.06%   19,614    238    4.79%
Loans (1)   5,711,471    61,932    4.35%   4,727,478    45,995    3.95%   4,412,322    43,776    3.98%
Total earning assets (1)  $6,742,095   $71,600    4.26%  $5,625,813   $53,995    3.88%  $5,320,881   $51,344    3.87%
                                              
Interest-bearing deposits  $3,791,595   $4,478    0.47%  $3,228,083   $2,338    0.29%  $2,978,382   $2,050    0.28%
Time deposits   529,675    1,047    0.79%   398,897    799    0.81%   440,599    1,184    1.08%
Short-term borrowings   1,404    3    0.78%   1,951    -    0.05%   10,883    1    0.05%
Federal Home Loan Bank advances   286,484    780    1.08%   85,778    82    0.38%   21,802    15    0.28%
Subordinated debentures   133,529    1,816    5.44%   113,868    1,554    5.46%   115,339    1,570    5.45%
Junior subordinated debentures   46,536    680    5.78%   38,171    556    5.83%   38,044    564    5.86%
Total interest-bearing liabilities  $4,789,223   $8,804    0.74%  $3,866,748   $5,329    0.56%  $3,605,049   $5,384    0.60%
                                              
Net interest income (1)       $62,796             $48,666             $45,960      
Net interest margin (2)             3.53%             3.30%             3.28%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)             3.74%             3.50%             3.46%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)             3.64%             3.50%             3.44%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3)             3.63%             3.46%             3.32%

 

   For the Six Months Ended 
   June 30, 2022   June 30, 2021 
   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  $5,234   $14    0.53%  $1,830   $1    0.05%
Interest-bearing deposits at financial institutions   68,285    204    0.60%   102,343    71    0.14%
Securities (1)   861,610    16,683    3.87%   804,364    14,344    3.57%
Restricted investment securities   29,716    766    5.13%   18,843    456    4.81%
Loans (1)   5,222,193    107,927    4.17%   4,342,440    86,299    4.01%
Total earning assets (1)  $6,187,038   $125,594    4.09%  $5,269,820   $101,171    3.87%
                               
Interest-bearing deposits  $3,511,396   $6,816    0.39%  $2,979,835   $4,036    0.27%
Time deposits   464,647    1,846    0.80%   444,297    2,625    1.19%
Short-term borrowings   1,676    3    0.36%   9,021    3    0.06%
Federal Home Loan Bank advances   186,685    863    0.92%   17,464    25    0.28%
Subordinated debentures   123,753    3,370    5.45%   117,014    3,164    5.41%
Junior subordinated debentures   42,376    1,236    5.80%   38,026    1,125    5.87%
Total interest-bearing liabilities  $4,330,533   $14,134    0.66%  $3,605,657   $10,978    0.61%
                               
Net interest income (1)       $111,460             $90,193      
Net interest margin (2)             3.43%             3.27%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)             3.63%             3.45%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)             3.57%             3.42%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3)             3.55%             3.27%

 

(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.

 

10

 

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

   As of 
   June 30,   March 31,   December 31,   September 30,   June 30, 
   2022   2022   2021   2021   2021 
                     
   (dollars in thousands, except per share data) 
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES                         
Beginning balance  $74,786   $78,721   $80,670   $78,894   $81,831 
Initial ACL recorded for acquired PCD loans   5,902    -    -    -    - 
Credit loss expense (1)   12,141    (3,849)   (2,045)   1,895    (141)
Loans/leases charged off   (620)   (456)   (375)   (287)   (3,163)
Recoveries on loans/leases previously charged off   216    370    471    168    367 
Ending balance  $92,425   $74,786   $78,721   $80,670   $78,894 
                          
NONPERFORMING ASSETS                         
Nonaccrual loans/leases (2)  $23,574   $2,744   $2,759   $6,818   $8,230 
Accruing loans/leases past due 90 days or more   268    4    1    14    57 
Total nonperforming loans/leases   23,842    2,748    2,760    6,832    8,287 
Other real estate owned   205    -    -    -    1,820 
Other repossessed assets   -    -    -    -    - 
Total nonperforming assets  $24,047   $2,748   $2,760   $6,832   $10,107 
                          
ASSET QUALITY RATIOS                         
Nonperforming assets / total assets   0.33%   0.04%   0.05%   0.11%   0.17%
ACL for loans and leases / total loans/leases   1.59%   1.55%   1.68%   1.75%   1.79%
ACL for loans and leases / nonperforming loans/leases   387.66%   2721.47%   2852.21%   1180.77%   952.02%
Net charge-offs as a % of average loans/leases   0.01%   0.00%   0.00%   0.00%   0.06%
                          
INTERNALLY ASSIGNED RISK RATING (3)                         
Special mention (rating 6)  $54,558   $63,622   $62,510   $58,634   $51,613 
Substandard (rating 7)   83,048    54,491    53,159    59,402    79,719 
Doubtful (rating 8)   -    -    -    -    - 
   $137,606   $118,113   $115,669   $118,036   $131,332 
                          
Criticized loans (4)  $137,606   $118,113   $115,669   $118,036   $131,332 
Classified loans (5)   83,048    54,491    53,159    59,402    79,719 
                          
Criticized loans as a % of total loans/leases   2.37%   2.45%   2.47%   2.57%   2.97%
Classified loans as a % of total loans/leases   1.43%   1.13%   1.14%   1.29%   1.80%

 

(1)Credit loss expense on loans/leases for the quarter ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans.
(2)Nonaccrual loans for the quarter ended June 30, 2022 included $7.3 million related to the acquired Guaranty Bank loan portfolio.
(3)Amounts exclude the government guaranteed portion, if any.  The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
(4)Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.
(5)Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.

 

 11 

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

   For the Quarter Ended   For the Six Months Ended 
   June 30,   March 31,   June 30,   June 30,   June 30, 
   2022   2022   2021   2022   2021 
                     
   (dollars in thousands) 
SELECT FINANCIAL DATA - SUBSIDIARIES                         
TOTAL ASSETS                         
Quad City Bank and Trust (1)  $2,122,852   $2,195,894   $2,059,634           
m2 Equipment Finance, LLC   289,451    281,666    255,338           
Cedar Rapids Bank and Trust   1,985,199    1,947,737    1,913,761           
Community State Bank - Ankeny   1,221,406    1,184,708    1,079,929           
Guaranty Bank (7)   2,037,364    956,345    850,067           
                          
TOTAL DEPOSITS                         
Quad City Bank and Trust (1)  $1,787,564   $1,930,935   $1,810,772           
Cedar Rapids Bank and Trust   1,495,665    1,397,976    1,395,721           
Community State Bank - Ankeny   1,006,836    1,013,928    938,428           
Guaranty Bank (7)   1,539,978    555,559    608,676           
                          
TOTAL LOANS & LEASES                         
Quad City Bank and Trust (1)  $1,737,812   $1,692,218   $1,577,681           
m2 Equipment Finance, LLC   293,435    285,871    258,520           
Cedar Rapids Bank and Trust   1,536,224    1,478,514    1,360,202           
Community State Bank - Ankeny   931,031    912,996    786,208           
Guaranty Bank (7)   1,592,836    744,140    693,614           
                          
TOTAL LOANS & LEASES / TOTAL DEPOSITS                         
Quad City Bank and Trust (1)   97%   88%   87%          
Cedar Rapids Bank and Trust   103%   106%   97%          
Community State Bank - Ankeny   92%   90%   84%          
Guaranty Bank   103%   134%   114%          
                          
TOTAL LOANS & LEASES / TOTAL ASSETS                         
Quad City Bank and Trust (1)   82%   77%   77%          
Cedar Rapids Bank and Trust   77%   76%   71%          
Community State Bank - Ankeny   76%   77%   73%          
Guaranty Bank   78%   78%   82%          
                          
ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES                         
Quad City Bank and Trust (1)   1.68%   1.69%   1.91%          
m2 Equipment Finance, LLC   3.31%   3.31%   3.61%          
Cedar Rapids Bank and Trust   1.58%   1.61%   1.92%          
Community State Bank - Ankeny   1.57%   1.55%   1.69%          
Guaranty Bank   1.53%   1.11%   1.35%          
                          
RETURN ON AVERAGE ASSETS                         
Quad City Bank and Trust (1)   1.56%   1.86%   1.64%   1.71%   1.50%
Cedar Rapids Bank and Trust   2.72%   2.25%   2.39%   2.48%   2.42%
Community State Bank - Ankeny   1.12%   1.42%   1.16%   1.27%   0.99%
Guaranty Bank (8) (9)   0.20%   1.40%   1.77%   0.56%   1.47%
                          
NET INTEREST MARGIN PERCENTAGE (2)                         
Quad City Bank and Trust (1)   3.74%   3.50%   3.30%   3.62%   3.25%
Cedar Rapids Bank and Trust (3)   3.66%   3.60%   3.60%   3.63%   3.58%
Community State Bank - Ankeny (4)   3.67%   3.62%   3.66%   3.65%   3.68%
Guaranty Bank (5)   4.20%   3.38%   3.54%   3.94%   3.54%
                          
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET                         
INTEREST MARGIN, NET                         
Cedar Rapids Bank and Trust  $4   $51   $92   $55   $105 
Community State Bank - Ankeny   28    33    68   $61    385 
Guaranty Bank   1,698    69    168   $1,767    379 
QCR Holdings, Inc. (6)   (35)   (35)   (37)  $(70)   (74)

 

(1)Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank.  m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
(2)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.
(3)Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.62% for the quarter ended June 30, 2022, 3.54% for the quarter ended March 31, 2022 and 3.67% for the quarter ended June 30, 2021.
(4)Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.66% for the quarter ended June 30, 2022, 3.62% for the quarter ended March 31, 2022 and 3.63% for the quarter ended June 30, 2021.
(5)Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.82% for the quarter ended June 30, 2022, 3.41% for the quarter ended March 31, 2022 and 3.50% for the quarter ended June 30, 2021.
(6)Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.
(7)Increase due to the acquisition of Guaranty Bank on April 1, 2022, merging into Springfield First Community Bank with the combined bank operating under the Guaranty Bank name.
(8)Decrease due to CECL Day 2 provision for credit losses of $12.4 million related to the acquisition of Guaranty Bank during the quarter ended June 30, 2022.
(9)Adjusted ROAA excluding non-core adjustments for the Guaranty Bank acquisition (non-GAAP) would have been 2.12% for the quarter ended June 30, 2022 and 1.89% for the six months ended June 30, 2022.

 

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QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

   As of 
   June 30,   March 31,   December 31,   September 30,   June 30, 
  2022   2022   2021   2021   2021 
                     
   (dollars in thousands, except per share data) 
GAAP TO NON-GAAP RECONCILIATIONS    
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)                         
Stockholders' equity (GAAP)  $743,138   $667,924   $677,010   $649,814   $630,476 
Less: Intangible assets   155,940    82,922    83,415    83,923    84,431 
Tangible common equity (non-GAAP)  $587,198   $585,002   $593,595   $565,891   $546,045 
                          
Total assets (GAAP)  $7,392,941   $6,175,819   $6,096,132   $6,014,508   $5,827,412 
Less: Intangible assets   155,940    82,922    83,415    83,923    84,431 
Tangible assets (non-GAAP)  $7,237,001   $6,092,897   $6,012,717   $5,930,585   $5,742,981 
                          
Tangible common equity to tangible assets ratio (non-GAAP)   8.11%   9.60%   9.87%   9.54%   9.51%

 

(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.

 

 13 

 

 

QCR Holding, 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, 
  2022   2022   2021   2021   2021   2022   2021 
                             
   (dollars in thousands, except per share data) 
GAAP TO NON-GAAP RECONCILIATIONS    
ADJUSTED NET INCOME (1)    
Net income (GAAP)  $15,242   $23,624   $27,009   $31,565   $22,349   $38,866   $40,331 
Less non-core items (post-tax) (2):                                   
Income:                                   
Securities gains (losses), net   -    -    -    -    (69)  $-   $(69)
Mark to market gains (losses) on derivatives, net   342    715    77    (13)   (58)   1,057   $71 
Gain on sale of loan   -    -    -    28    -    -   $- 
Total non-core income (non-GAAP)  $342   $715   $77   $15   $(127)  $1,057   $2 
Expense:                                   
Acquisition costs (2)   1,932    1,462    493    -    -    3,394    - 
Post-acquisition compensation, transition and integration costs   3,789    -    -    -    -    3,789    169 
Separation agreement   -    -    -    -    -    -    734 
CECL Day 2 provision for credit losses on acquired non-PCD loans (3)   8,651    -    -    -    -    8,651    - 
CECL Day 2 provision for credit losses provision on acquired OBS exposure (3)   1,140    -    -    -    -    1,140    - 
Loss on sale of subsidiary   -    -    -    -    -    -    110 
Total non-core expense (non-GAAP)  $15,512   $1,462   $496   $-   $-   $16,974   $1,020 
Adjusted net income  (non-GAAP) (1)  $30,412   $24,371   $27,428   $31,550   $22,476   $54,783   $41,349 
                                    
ADJUSTED EARNINGS PER COMMON SHARE (1)                                   
Adjusted net income (non-GAAP) (from above)  $30,412   $24,371   $27,428   $31,550   $22,476   $54,783   $41,349 
Weighted average common shares outstanding   17,345,324    15,625,112    15,582,276    15,635,123    15,813,932    16,485,218    15,808,788 
Weighted average common and common equivalent shares outstanding   17,549,107    15,852,256    15,838,246    15,869,798    16,045,239    16,700,682    16,035,394 
Adjusted earnings per common share (non-GAAP):                                   
Basic  $1.75   $1.56   $1.76   $2.02   $1.42   $3.32   $2.62 
Diluted  $1.73   $1.54   $1.73   $1.99   $1.40   $3.28   $2.58 
                                    
ADJUSTED RETURN ON AVERAGE ASSETS (1)                                   
Adjusted net income (non-GAAP) (from above)  $30,412   $24,371   $27,428   $31,550   $22,476   $54,783   $41,349 
Average Assets  $7,324,470   $6,115,127   $6,121,446   $5,982,583   $5,761,314   $6,723,137   $5,704,151 
Adjusted return on average assets (annualized) (non-GAAP)   1.66%   1.59%   1.79%   2.11%   1.56%   1.63%   1.45%
                                    
NET INTEREST MARGIN (TEY) (5)                                   
Net interest income (GAAP)  $59,400   $45,733   $46,513   $46,229   $43,516   $105,133   $85,491 
Plus: Tax equivalent adjustment (4)   3,396    2,933    2,800    2,708    2,444    6,327    4,702 
Net interest income - tax equivalent (Non-GAAP)  $62,796   $48,666   $49,313   $48,937   $45,960   $111,460   $90,193 
Less:  Acquisition accounting net accretion   1,695    118    88    456    291    1,813    795 
Adjusted net interest income  $61,101   $48,548   $49,225   $48,481   $45,669   $109,647   $89,398 
Less: PPP income   125    530    1,365    1,910    1,658    655    3,921 
Adjusted net interest income, excluding PPP income  $60,976   $48,018   $47,860   $46,571   $44,011   $108,992   $85,477 
Average earning assets  $6,742,095   $5,625,813   $5,602,222   $5,451,571   $5,320,881   $6,187,038   $5,269,820 
Net interest margin (GAAP)   3.53%   3.30%   3.29%   3.36%   3.28%   3.43%   3.27%
Net interest margin (TEY) (Non-GAAP)   3.74%   3.50%   3.50%   3.56%   3.46%   3.63%   3.45%
Adjusted net interest margin (TEY) (Non-GAAP)   3.64%   3.50%   3.49%   3.53%   3.44%   3.57%   3.42%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP)   3.63%   3.46%   3.39%   3.39%   3.32%   3.55%   3.27%
                                    
EFFICIENCY RATIO (6)                                   
Noninterest expense (GAAP)  $54,248   $38,325   $39,412   $41,387   $35,675   $92,573   $72,903 
Net interest income (GAAP)  $59,400   $45,733   $46,513   $46,229   $43,516   $105,133   $85,491 
Noninterest income (GAAP)   22,782    15,633    22,985    34,652    19,296    38,415    42,785 
Total income  $82,182   $61,366   $69,498   $80,881   $62,812   $143,548   $128,276 
Efficiency ratio (noninterest expense/total income) (Non-GAAP)   66.01%   62.45%   56.71%   51.17%   56.80%   64.49%   56.83%
                                    
LOAN GROWTH ANNUALIZED, EXCLUDING ACQUIRED AND PPP LOANS                                   
Total loans and leases  $5,797,903   $4,827,868   $4,680,132   $4,599,730   $4,417,705   $5,797,903   $4,417,705 
Less:  Acquired loans (7)   807,599    -    -    -    -    807,599    - 
Less:  PPP loans   79    6,340    28,181    83,575    147,506    79    147,506 
Total loans and leases, excluding acquired and  PPP loans  $4,990,225   $4,821,528   $4,651,951   $4,516,155   $4,270,199   $4,990,225   $4,270,199 
Loan growth annualized, excluding acquired and PPP loans   14.00%   14.58%   12.03%   23.04%   14.87%   14.54%   12.90%

 

(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-core or 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)Non-core or nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of acquisition costs which have an estimated effective tax rate of 11.26%.
(3)The CECL Day 2 provision for credit losses on acquired non-PCD loans and OBS exposures resulted from the Guaranty Bank acquisition on April 1, 2022.
(4)Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective tax rate.
(5)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.
(6)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.
(7)Loan balances acquired from the Guaranty Bank acquisition on April 1, 2022 are excluded.

 

 14