QCRH QCR Holdings Inc

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

Form 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event Reported): October 25, 2023

 

QCR Holdings, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware	0-22208	42-1397595
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

 

3551 Seventh Street, Moline, Illinois 61265

(Address of Principal Executive Offices) (Zip Code)

 

(309) 736-3584

(Registrant's telephone number, including area code)

 

N/A
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 

 

¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 

¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $1.00 Par Value		QCRH		The Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

  

Item 2.02. Results of Operations and Financial Condition.

 

On October 25, 2023, QCR Holdings, Inc. (the “Company”) issued a press release disclosing financial results for the quarter ended September 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

99.1

Press Release dated October 25, 2023.

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

  

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	QCR Holdings, Inc.
Date: October 25, 2023	By:	/s/ Todd A. Gipple
		Todd A. Gipple
		President and Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

PRESS RELEASE

FOR IMMEDIATE RELEASE

 

QCR Holdings, Inc. Announces Net Income of $25.1 Million

for the Third Quarter of 2023

 

Third Quarter 2023 Highlights

 

·

Net income of $25.1 million, or $1.49 per diluted share

·

Adjusted net income (non-GAAP) of $25.4 million, or $1.51 per diluted share

·

Net interest income of $55.3 million, up 3.9% from the second quarter

·

NIM (TEY)(non-GAAP) of 3.31% increased by 2 basis points from the prior quarter while Adjusted NIM (TEY)(non-GAAP) of 3.28% remained static

·

Capital Markets Revenue of $15.6 million and $55.1 million year-to-date

·

Tangible book value (non-GAAP) per share increased $0.34, or 3.4% annualized

 

Moline, IL, October 25, 2023 – QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $25.1 million and diluted earnings per share (“EPS”) of $1.49 for the third quarter of 2023, compared to net income of $28.4 million and diluted EPS of $1.69 for the second quarter of 2023.

 

Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the third quarter of 2023 were $25.4 million and $1.51, respectively. For the second quarter of 2023, adjusted net income (non-GAAP) was $28.4 million and adjusted diluted EPS (non-GAAP) was $1.69. For the third quarter of 2022, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $28.9 million and $1.69, respectively.

 

		For the Quarter Ended
		September 30,				June 30,				September 30,
$ in millions (except per share data)		2023				2023				2022
Net Income		$	25.1			$	28.4			$	29.3
Diluted EPS		$	1.49			$	1.69			$	1.71
Adjusted Net Income (non-GAAP)*		$	25.4			$	28.4			$	28.9
Adjusted Diluted EPS (non-GAAP)*		$	1.51			$	1.69			$	1.69

 

*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 solid third quarter results, highlighted by a static net interest margin, robust loan growth and significant fee income,” said Larry J. Helling, Chief Executive Officer. “In addition, our deposit base is stable, our capital ratios are strong, and our asset quality remains sound. Our third quarter and year-to-date results demonstrate the continued strength of our franchise, our commitment to relationship banking and the successful execution of our strategic initiatives.”

 

Net Interest Income Grew 3.9%

 

Net interest income for the third quarter of 2023 totaled $55.3 million, an increase of $2.1 million from the second quarter, and compared to $60.8 million for the third quarter of 2022. Acquisition-related net accretion totaled $539 thousand for the third quarter of 2023, compared to $134 thousand in the second quarter.

 

 

In the third quarter of 2023, net interest margin (“NIM”) was 2.89% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.31%, compared to 2.93% and 3.29% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.28% was unchanged.

 

“Our adjusted tax-equivalent NIM was static on a linked-quarter basis, which was at the top end of our guidance range,” said Todd A. Gipple, President and Chief Financial Officer. “During the quarter, our loan yield expansion accelerated while we experienced a more modest increase in our cost of funds with a slowing in the shift of the composition of our deposits from noninterest and lower beta deposits to higher beta deposits. We are pleased to see this stabilization of our deposit mix and believe that it will continue to benefit our net interest margin going forward.”

 

Noninterest Income of $26.6 Million Including $15.6 Million of Capital Markets Revenue

 

Noninterest income for the third quarter of 2023 totaled $26.6 million, down from the very strong $32.5 million for the second quarter of 2023. The Company generated $15.6 million of capital markets revenue in the quarter, as compared to the outsized performance of $22.5 million in the prior quarter. Wealth management revenue was $3.8 million for the quarter, consistent with the prior quarter.

 

“Capital markets revenue was $15.6 million in the third quarter, which outperformed our annualized guidance range,” added Mr. Gipple. “Capital markets revenue from swaps continues to benefit from the strong demand for affordable housing. This source of fee income has been consistent for the past several years. Based on decades of stability in the low-income housing tax credit industry and our own experience, we believe that this business will perform well throughout various economic cycles.”

 

Noninterest Expenses Remain Well-Controlled

 

Noninterest expense for the third quarter of 2023 totaled $51.1 million, an increase of 2.8% from $49.7 million for the second quarter of 2023, compared to $47.7 million for the third quarter of 2022. The linked-quarter increase was primarily due to higher variable employee compensation related to year-to-date performance, increased professional and data processing fees and other expenses related to fixed asset disposals. These increases were partially offset by lower advertising and marketing expenses.

 

Continued Strong Loan Growth

 

During the third quarter of 2023, the Company’s total loans and leases grew $227.0 million to a total of $6.6 billion, or 14.2% on an annualized basis. “Our loan growth during the quarter was driven primarily by strength in our low-income housing tax credit lending business as well as growth in our traditional lending business. Our low-income housing tax credit clients continue to experience strong demand for their projects as the need for affordable housing far exceeds supply,” added Mr. Helling.

 

“While our third quarter loan growth was exceptional, we are maintaining our guidance for growth in loans held for investment for the fourth quarter to be in the range of 9 to 12% on an annualized basis as our pipeline continues to be strong,” stated Mr. Helling. “As we have previously discussed, we have two low-income housing tax credit loan securitizations scheduled to close in the fourth quarter, a tax-exempt pool of $130 million and a taxable pool totaling $135 million. Both are now scheduled for closing prior to the end of November. We plan to continue to utilize securitizations on an ongoing basis as we view this as an effective tool in managing our liquidity and capital. It will also provide ongoing capacity for continued low-income housing tax credit production and the corresponding capital markets revenue that we generate from this business,” added Mr. Helling.

 

 

Asset Quality Remains Strong

 

“Our asset quality continues to be strong as the ratio of nonperforming assets to total assets was 0.41% at quarter-end and compares favorably to our long-term historical averages. We remain optimistic about the resilience of our Midwest markets as unemployment remains below the national average and business activity has continued at a healthy pace across our footprint,” said Mr. Helling.

 

Nonperforming assets (“NPAs”) increased $8.5 million during the quarter to $34.7 million. “The majority of the increase in NPAs was driven by three client relationships from unrelated industries. Approximately one-third of our NPAs consist of one relationship and we believe that this credit will be resolved without a loss,” added Mr. Helling. The Company’s criticized loans and classified loans to total loans and leases on September 30, 2023 were 2.98% and 1.05%, respectively, as compared to 2.84% and 1.00% as of June 30, 2023.

 

The Company recorded a total provision for credit losses of $3.8 million during the quarter which included $3.3 million of provision for loans/leases primarily driven by loan growth during the quarter. As of September 30, 2023, the allowance for credit losses to total loans/leases held for investment was 1.39%.

 

Stable Core Deposits and Liquidity

 

During the third quarter of 2023, the Company’s core deposits, which exclude brokered deposits, remained relatively stable. Core deposits decreased slightly by $9.0 million, or 0.1%, after growing $339.3 million, or 23.0% on an annualized basis during the second quarter of 2023. Total uninsured and uncollateralized deposits remain low at 20.1% of total deposits as of the end of the third quarter as compared to 19.9% as of the end of the second quarter. The Company maintained approximately $3.0 billion of available liquidity sources at quarter-end, which includes $1.1 billion of immediately available liquidity.

 

Continued Strong Capital Levels

 

As of September 30, 2023, the Company’s total risk-based capital ratio was 14.40%, the common equity tier 1 ratio was 9.63% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.05%. By comparison, these respective ratios were 14.69%, 9.73% and 8.28% as of June 30, 2023. The Company remains focused on growing capital and targeting capital levels in the top quartile of the Company’s peer group.

 

The Company’s tangible book value per share (non-GAAP) increased $0.34, or 3.4% annualized during the third quarter. Accumulated other comprehensive income (“AOCI”) declined $19.4 million during the quarter due to a decrease in the value of the Company’s available for sale securities portfolio and certain derivatives resulting from the change in interest rates during the third quarter. While the net decline in AOCI diluted the Company’s tangible common equity, strong earnings more than offset this impact, which led to the increase in tangible book value per share (non-GAAP).

 

Conference Call Details

 

The Company will host an earnings call/webcast tomorrow, October 26, 2023, 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 2, 2023. The replay access information is 877-344-7529 (international 412-317-0088); access code 7582498. A webcast of the teleconference can be accessed on 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 Brookfield, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of September 30, 2023, the Company had $8.5 billion in assets, $6.6 billion in loans and $6.5 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,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, 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 (including the Israeli-Palestinian conflict and the Russian invasion of Ukraine), 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 and any changes in response to the recent failures of other banks; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out and the recent potential additional rate increases by the Federal Reserve); (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, 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; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xixi) 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.

 

Contact:

Todd A. Gipple

President and Chief Financial Officer

(309) 743-7745

tgipple@qcrh.com

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		As of
		September 30,				June 30,				March 31,				December 31,				September 30,
		2023				2023				2023				2022				2022
		(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks		$	104,265			$	84,084			$	64,295			$	59,723			$	86,282
Federal funds sold and interest-bearing deposits			80,650				175,012				253,997				124,270				71,043
Securities, net of allowance for credit losses			896,394				882,888				877,446				928,102				879,450
Loans receivable held for sale (1)			278,893				295,057				140,633				1,480				3,054
Loans/leases receivable held for investment			6,327,414				6,084,263				6,049,389				6,137,391				6,005,556
Allowance for credit losses			(87,669	)			(85,797	)			(86,573	)			(87,706	)			(90,489	)
Intangibles			14,537				15,228				15,993				16,759				17,546
Goodwill			139,027				139,027				138,474				137,607				137,607
Derivatives			291,295				170,294				130,350				177,631				185,037
Other assets			495,251				466,617				452,900				453,580				434,963
Total assets		$	8,540,057			$	8,226,673			$	8,036,904			$	7,948,837			$	7,730,049
Total deposits		$	6,494,852			$	6,606,720			$	6,501,663			$	5,984,217			$	5,941,035
Total borrowings			712,126				418,368				417,480				825,894				701,491
Derivatives			320,220				195,841				150,401				200,701				209,479
Other liabilities			184,476				183,055				165,866				165,301				140,972
Total stockholders' equity			828,383				822,689				801,494				772,724				737,072
Total liabilities and stockholders' equity		$	8,540,057			$	8,226,673			$	8,036,904			$	7,948,837			$	7,730,049
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial - revolving		$	299,588			$	304,617			$	307,612			$	296,869			$	332,996
Commercial and industrial - other			1,381,967				1,308,853				1,322,384				1,371,590				1,342,949
Commercial and industrial - other - LIHTC			105,601				93,700				97,947				80,103				73,047
Total commercial and industrial			1,787,156				1,707,170				1,727,943				1,748,562				1,748,992
Commercial real estate, owner occupied			610,618				609,717				616,922				629,367				627,558
Commercial real estate, non-owner occupied			938,609				946,427				978,309				958,825				919,966
Commercial real estate, non-owner occupied - LIHTC			16,943				17,387				4,407				4,414				910
Construction and land development			472,695				437,682				448,261				448,986				444,016
Construction and land development - LIHTC			921,359				870,084				759,924				743,075				705,487
Multi-family			282,541				280,418				229,370				236,043				218,807
Multi-family - LIHTC			874,439				820,376				740,500				727,760				714,311
Direct financing leases			34,401				32,937				35,373				31,889				33,503
1-4 family real estate			529,179				524,629				521,691				499,529				486,547
1-4 family real estate - LIHTC			10,752				10,776				10,800				-				961
Consumer			127,615				121,717				116,522				110,421				107,552
Total loans/leases		$	6,606,307			$	6,379,320			$	6,190,022			$	6,138,871			$	6,008,610
Less allowance for credit losses			87,669				85,797				86,573				87,706				90,489
Net loans/leases		$	6,518,638			$	6,293,523			$	6,103,449			$	6,051,165			$	5,918,121
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities		$	16,002			$	18,942			$	19,320			$	16,981			$	20,527
Municipal securities			764,017				743,608				731,689				779,450				724,204
Residential mortgage-backed and related securities			57,946				60,958				63,104				66,215				68,844
Asset backed securities			16,326				17,393				17,967				18,728				19,630
Other securities			43,272				43,156				46,535				46,908				46,443
Total securities		$	897,563			$	884,057			$	878,615			$	928,282			$	879,648
Less allowance for credit losses			1,169				1,169				1,169				180				198
Net securities		$	896,394			$	882,888			$	877,446			$	928,102			$	879,450
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits		$	1,027,791			$	1,101,605			$	1,189,858			$	1,262,981			$	1,315,555
Interest-bearing demand deposits			4,416,725				4,374,847				4,033,193				3,875,497				3,904,303
Time deposits			788,692				765,801				679,946				744,593				672,133
Brokered deposits			261,644				364,467				598,666				101,146				49,044
Total deposits		$	6,494,852			$	6,606,720			$	6,501,663			$	5,984,217			$	5,941,035
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances		$	135,000			$	135,000			$	135,000			$	-			$	-
Overnight FHLB advances			295,000				-				-				415,000				335,000
Other short-term borrowings			470				1,850				1,100				129,630				85,180
Subordinated notes			232,958				232,852				232,746				232,662				232,743
Junior subordinated debentures			48,698				48,666				48,634				48,602				48,568
Total borrowings		$	712,126			$	418,368			$	417,480			$	825,894			$	701,491

 

(1)

Loans with a fair value of $278.0 million, $291.0 million and $139.2 million have been identified for securitization and are included in LHFS at September 30, 2023, June 30, 2023 and March 31, 2023 respectively.

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		For the Quarter Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2023				2023				2023				2022				2022
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income		$	108,568			$	98,377			$	94,217			$	94,037			$	79,267
Interest expense			53,313				45,172				37,407				28,819				18,498
Net interest income			55,255				53,205				56,810				65,218				60,769
Provision for credit losses			3,806				3,606				3,928				-				-
Net interest income after provision for credit losses		$	51,449			$	49,599			$	52,882			$	65,218			$	60,769
Trust fees		$	2,863			$	2,844			$	2,906			$	2,644			$	2,537
Investment advisory and management fees			947				986				879				918				921
Deposit service fees			2,107				2,034				2,028				2,142				2,214
Gains on sales of residential real estate loans, net			476				500				312				468				641
Gains on sales of government guaranteed portions of loans, net			-				-				30				50				50
Capital markets revenue			15,596				22,490				17,023				11,338				10,545
Securities gains (losses), net			-				12				(463	)			-				-
Earnings on bank-owned life insurance			1,807				838				707				755				605
Debit card fees			1,584				1,589				1,466				1,500				1,453
Correspondent banking fees			450				356				391				257				189
Loan related fee income			800				770				651				614				652
Fair value gain (loss) on derivatives			(336	)			83				(427	)			(267	)			904
Other			299				18				339				800				384
Total noninterest income		$	26,593			$	32,520			$	25,842			$	21,219			$	21,095
Salaries and employee benefits		$	32,098			$	31,459			$	32,003			$	32,594			$	29,175
Occupancy and equipment expense			6,228				6,100				5,914				6,027				6,033
Professional and data processing fees			4,456				4,078				3,514				3,769				4,477
Acquisition costs			-				-				-				(424	)			315
Post-acquisition compensation, transition and integration costs			-				-				207				668				62
FDIC insurance, other insurance and regulatory fees			1,721				1,927				1,374				1,605				1,497
Loan/lease expense			826				652				556				411				390
Net cost of (income from) and gains/losses on operations of other real estate			3				-				(67	)			(117	)			19
Advertising and marketing			1,429				1,735				1,237				1,562				1,437
Communication and data connectivity			478				471				665				587				639
Supplies			335				281				305				337				289
Bank service charges			605				621				605				563				568
Correspondent banking expense			232				221				210				210				218
Intangibles amortization			691				765				766				787				787
Payment card processing			733				542				545				599				477
Trust expense			432				337				214				166				227
Other			814				538				737				353				1,136
Total noninterest expense		$	51,081			$	49,727			$	48,785			$	49,697			$	47,746
Net income before income taxes		$	26,961			$	32,392			$	29,939			$	36,740			$	34,118
Federal and state income tax expense			1,840				3,967				2,782				5,834				4,824
Net income		$	25,121			$	28,425			$	27,157			$	30,906			$	29,294
Basic EPS		$	1.50			$	1.70			$	1.62			$	1.83			$	1.73
Diluted EPS		$	1.49			$	1.69			$	1.60			$	1.81			$	1.71
Weighted average common shares outstanding			16,717,303				16,701,950				16,776,289				16,855,973				16,900,968
Weighted average common and common equivalent shares outstanding			16,847,951				16,799,527				16,942,132				17,047,976				17,110,691

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		For the Nine Months Ended
		September 30,				September 30,
		2023				2022
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income		$	301,162			$	198,534
Interest expense			135,892				32,632
Net interest income			165,270				165,902
Provision for credit losses (1)			11,340				8,284
Net interest income after provision for credit losses		$	153,930			$	157,618
Trust fees		$	8,613			$	7,997
Investment advisory and management fees			2,812				2,940
Deposit service fees			6,169				5,992
Gains on sales of residential real estate loans, net			1,288				1,943
Gains on sales of government guaranteed portions of loans, net			30				69
Capital markets revenue			55,109				29,971
Securities losses, net			(451	)			-
Earnings on bank-owned life insurance			3,352				1,301
Debit card fees			4,639				3,959
Correspondent banking fees			1,197				710
Loan related fee income			2,221				1,814
Fair value gain (loss) on derivatives			(680	)			2,242
Other			656				572
Total noninterest income		$	84,955			$	59,510
Salaries and employee benefits		$	95,560			$	82,774
Occupancy and equipment expense			18,242				15,948
Professional and data processing fees			12,048				12,513
Acquisition costs			-				4,139
Post-acquisition compensation, transition and integration costs			207				4,858
FDIC insurance, other insurance and regulatory fees			5,022				4,201
Loan/lease expense			2,034				1,418
Net cost of (income from) and gains/losses on operations of other real estate			(64	)			77
Advertising and marketing			4,401				3,396
Communication and data connectivity			1,614				1,626
Supplies			921				772
Bank service charges			1,831				1,719
Correspondent banking expense			663				630
Intangibles amortization			2,222				2,067
Payment card processing			1,820				1,365
Trust expense			983				609
Other			2,089				2,207
Total noninterest expense		$	149,593			$	140,319
Net income before income taxes		$	89,292			$	76,809
Federal and state income tax expense			8,589				8,649
Net income		$	80,703			$	68,160
Basic EPS		$	4.82			$	4.25
Diluted EPS		$	4.79			$	4.20
Weighted average common shares outstanding			16,731,847				16,030,371
Weighted average common and common equivalent shares outstanding			16,863,203				16,243,921

 

(1)	Provision for credit losses for the nine months ended September 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.

 

 

QCR Holding, 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,
		2023				2023				2023				2022				2022				2023				2022
		(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding			16,731,646				16,713,853				16,713,775				16,795,942				16,885,485
Book value per common share (1)		$	49.51			$	49.22			$	47.95			$	46.01			$	43.65
Tangible book value per common share (Non-GAAP) (2)		$	40.33			$	39.99			$	38.71			$	36.82			$	34.46
Closing stock price		$	48.52			$	41.03			$	43.91			$	49.64			$	50.94
Market capitalization		$	811,819			$	685,769			$	733,902			$	833,751			$	860,147
Market price / book value			98.00	%			83.36	%			91.57	%			107.90	%			116.70	%
Market price / tangible book value			120.30	%			102.59	%			113.43	%			134.83	%			147.81	%
Earnings per common share (basic) LTM (3)		$	6.66			$	6.89			$	6.06			$	5.95			$	5.86
Price earnings ratio LTM (3)			7.29	x			5.96	x			7.24	x			8.35	x			8.70	x
TCE / TA (Non-GAAP) (4)			8.05	%			8.28	%			8.21	%			7.93	%			7.68	%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance		$	822,689			$	801,494			$	772,724			$	737,072			$	743,138
Net income			25,121				28,425				27,157				30,906				29,294
Other comprehensive income (loss), net of tax			(19,415	)			(6,336	)			9,325				9,959				(24,783	)
Common stock cash dividends declared			(1,003	)			(1,003	)			(1,010	)			(1,013	)			(1,012	)
Repurchase and cancellation of shares of common stock as a result of a share repurchase program			-				(967	)			(7,719	)			(5,037	)			(10,485	)
Other (5)			991				1,076				1,017				837				920
Ending balance		$	828,383			$	822,689			$	801,494			$	772,724			$	737,072
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio			14.40	%			14.69	%			14.68	%			14.28	%			14.38	%
Tier 1 risk-based capital ratio			10.25	%			10.38	%			10.27	%			9.95	%			9.88	%
Tier 1 leverage capital ratio			9.92	%			10.06	%			9.73	%			9.61	%			9.56	%
Common equity tier 1 ratio			9.63	%			9.73	%			9.60	%			9.29	%			9.21	%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)			1.21	%			1.44	%			1.37	%			1.58	%			1.53	%			1.34	%			1.30	%
Return on average total equity (annualized)			11.95	%			13.97	%			13.67	%			16.32	%			15.39	%			13.23	%			12.20	%
Net interest margin			2.89	%			2.93	%			3.18	%			3.62	%			3.46	%			3.00	%			3.44	%
Net interest margin (TEY) (Non-GAAP)(7)			3.31	%			3.29	%			3.52	%			3.93	%			3.71	%			3.37	%			3.66	%
Efficiency ratio (Non-GAAP) (8)			62.41	%			58.01	%			59.02	%			57.50	%			58.32	%			59.78	%			62.25	%
Gross loans and leases / total assets			77.36	%			77.54	%			77.02	%			77.23	%			77.73	%			77.36	%			77.73	%
Gross loans and leases / total deposits			101.72	%			96.56	%			95.21	%			102.58	%			101.14	%			101.72	%			101.14	%
Effective tax rate			6.82	%			12.25	%			9.29	%			15.88	%			14.14	%			9.62	%			11.26	%
Full-time equivalent employees (9)			987				1009				969				973				956				987				956
AVERAGE BALANCES
Assets		$	8,287,813			$	7,924,597			$	7,906,830			$	7,800,229			$	7,652,463			$	8,041,141			$	7,005,988
Loans/leases			6,476,512				6,219,980				6,165,115				6,043,359				5,916,100				6,288,343				5,456,037
Deposits			6,342,339				6,292,481				6,179,644				6,029,455				5,891,198				6,272,083				5,557,617
Total stockholders' equity			837,734				816,882				794,685				757,419				761,428				816,591				744,869

 

(1)

Includes accumulated other comprehensive income (loss).

(2)

Includes accumulated other comprehensive income (loss) and excludes intangible assets.  See GAAP to Non-GAAP reconciliations.

(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)

The increase in full-time equivalent employees in the second quarter of 2023 and the subsequent decline in the third quarter of 2023 includes 19 summer interns.

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

ANALYSIS OF NET INTEREST INCOME AND MARGIN
		For the Quarter Ended
		September 30, 2023												June 30, 2023												September 30, 2022
		Average Balance				Interest Earned or Paid				Average Yield or Cost				Average Balance				Interest Earned or Paid				Average Yield or Cost				Average Balance				Interest Earned or Paid				Average Yield or Cost
		(dollars in thousands)
Fed funds sold		$	21,526			$	284				5.23	%		$	16,976			$	223				5.27	%		$	16,224			$	100				2.45	%
Interest-bearing deposits at financial institutions			86,807				1,205				5.51	%			90,814				1,123				4.96	%			54,799				381				2.76	%
Investment securities - taxable			344,657				3,788				4.38	%			342,991				3,693				4.30	%			354,366				3,304				3.71	%
Investment securities - nontaxable (1)			600,693				6,974				4.64	%			577,494				6,217				4.31	%			591,730				6,298				4.26	%
Restricted investment securities			43,590				659				5.91	%			35,031				506				5.71	%			42,638				674				6.18	%
Loans (1)			6,476,512				103,428				6.34	%			6,219,980				93,159				6.01	%			5,916,100				72,969				4.89	%
Total earning assets (1)		$	7,573,785			$	116,338				6.10	%		$	7,283,286			$	104,921				5.78	%		$	6,975,857			$	83,726				4.76	%
Interest-bearing deposits		$	4,264,208			$	33,563				3.12	%		$	3,965,592			$	27,227				2.75	%		$	3,862,556			$	10,889				1.12	%
Time deposits			999,488				10,003				3.97	%			1,190,440				11,219				3.78	%			593,490				1,681				1.12	%
Short-term borrowings			1,514				20				5.28	%			1,980				34				6.82	%			11,376				84				2.94	%
Federal Home Loan Bank advances			425,870				5,724				5.26	%			211,593				2,653				4.96	%			418,239				2,584				2.42	%
Other borrowings			-				-				0.00	%			-				-				0.00	%			4,239				53				4.93	%
Subordinated debentures			232,890				3,307				5.68	%			232,782				3,303				5.68	%			181,177				2,518				5.56	%
Junior subordinated debentures			48,678				695				5.59	%			48,647				738				6.00	%			48,551				689				5.56	%
Total interest-bearing liabilities		$	5,972,648			$	53,312				3.54	%		$	5,651,034			$	45,174				3.20	%		$	5,119,628			$	18,498				1.43	%
Net interest income (1)						$	63,026											$	59,747											$	65,228
Net interest margin (2)											2.89	%											2.93	%											3.46	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.31	%											3.29	%											3.71	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.28	%											3.28	%											3.65	%

 

		For the Nine Months Ended
		September 30, 2023												September 30, 2022
		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		$	19,267			$	741				5.14	%		$	8,937			$	114				1.70	%
Interest-bearing deposits at financial institutions			83,783				3,151				5.03	%			63,740				584				1.23	%
Investment securities - taxable			340,140				10,847				4.24	%			331,222				8,792				3.53	%
Investment securities - nontaxable (1)			599,070				19,892				4.43	%			558,860				17,494				4.17	%
Restricted investment securities			38,817				1,677				5.70	%			34,071				1,439				5.57	%
Loans (1)			6,288,343				285,136				6.06	%			5,456,037				180,896				4.43	%
Total earning assets (1)		$	7,369,420			$	321,444				5.83	%		$	6,452,867			$	209,319				4.33	%
Interest-bearing deposits		$	4,099,789			$	84,565				2.76	%		$	3,629,735			$	17,704				0.65	%
Time deposits			1,020,421				27,225				3.57	%			508,067				3,527				0.93	%
Short-term borrowings			3,588				152				5.66	%			4,945				87				2.37	%
Federal Home Loan Bank advances			311,740				11,898				5.03	%			264,718				3,447				1.72	%
Other borrowings			-				-				0.00	%			1,429				53				4.90	%
Subordinated debentures			232,784				9,922				5.68	%			143,104				5,888				5.49	%
Junior subordinated debentures			48,646				2,129				5.77	%			44,457				1,926				5.71	%
Total interest-bearing liabilities		$	5,716,968			$	135,891				3.17	%		$	4,596,455			$	32,632				0.95	%
Net interest income (1)						$	185,553											$	176,687
Net interest margin (2)											3.00	%											3.44	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.37	%											3.66	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.34	%											3.60	%

 

(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 Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		As of
		September 30,				June 30,				March 31,				December 31,				September 30,
		2023				2023				2023				2022				2022
		(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
Beginning balance		$	85,797			$	86,573			$	87,706			$	90,489			$	92,425
Change in ACL for writedown of LHFS to fair value (1)			175				(2,277	)			(1,709	)			-				-
Credit loss expense			3,260				3,313				2,458				1,013				331
Loans/leases charged off			(1,816	)			(1,947	)			(2,275	)			(3,960	)			(2,489	)
Recoveries on loans/leases previously charged off			253				135				393				164				222
Ending balance		$	87,669			$	85,797			$	86,573			$	87,706			$	90,489
NONPERFORMING ASSETS
Nonaccrual loans/leases		$	34,568			$	26,062			$	22,947			$	8,765			$	17,511
Accruing loans/leases past due 90 days or more			-				83				15				5				3
Total nonperforming loans/leases			34,568				26,145				22,962				8,770				17,514
Other real estate owned			120				-				61				133				177
Other repossessed assets			-				-				-				-				340
Total nonperforming assets		$	34,688			$	26,145			$	23,023			$	8,903			$	18,031
ASSET QUALITY RATIOS
Nonperforming assets / total assets			0.41	%			0.32	%			0.29	%			0.11	%			0.23	%
ACL for loans and leases / total loans/leases held for investment			1.39	%			1.41	%			1.43	%			1.43	%			1.51	%
ACL for loans and leases / nonperforming loans/leases			253.61	%			328.16	%			377.03	%			1000.07	%			516.67	%
Net charge-offs as a % of average loans/leases			0.02	%			0.03	%			0.03	%			0.06	%			0.04	%
INTERNALLY ASSIGNED RISK RATING (2)
Special mention (rating 6)		$	127,202			$	116,910			$	125,048			$	98,333			$	63,973
Substandard (rating 7)/Classifed loans (3)			69,369				63,956				70,866				66,021				77,317
Doubtful (rating 8)/Classifed loans (3)			-				-				-				-				-
Criticized loans (4)		$	196,571			$	180,866			$	195,914			$	164,354			$	141,290
Classified loans as a % of total loans/leases			1.05	%			1.00	%			1.14	%			1.08	%			1.29	%
Criticized loans as a % of total loans/leases			2.98	%			2.84	%			3.16	%			2.68	%			2.35	%

 

(1)

Certain loans were identified for securitization and transferred from loans to LHFS. The fair value of the loans was less than its carrying value at the date of transfer, resulting in a charge to the loan ACL.

(2)

Amounts exclude the government guaranteed portion, if any.  The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.

(3)

Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.

(4)

Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		For the Quarter Ended												For the Nine Months Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
SELECT FINANCIAL DATA - SUBSIDIARIES		2023				2023				2022				2023				2022
		(dollars in thousands)
TOTAL ASSETS
Quad City Bank and Trust (1)		$	2,433,084			$	2,611,832			$	2,218,166
m2 Equipment Finance, LLC			336,180				322,838				298,640
Cedar Rapids Bank and Trust			2,442,263				2,389,623				2,108,614
Community State Bank			1,417,250				1,332,966				1,270,426
Guaranty Bank			2,242,638				2,179,844				2,107,407
TOTAL DEPOSITS
Quad City Bank and Trust (1)		$	1,973,989			$	2,166,249			$	1,741,472
Cedar Rapids Bank and Trust			1,722,905				1,791,861				1,627,202
Community State Bank			1,132,724				1,073,907				1,036,998
Guaranty Bank			1,722,861				1,653,299				1,632,107
TOTAL LOANS & LEASES
Quad City Bank and Trust (1)		$	2,005,770			$	1,925,162			$	1,806,776
m2 Equipment Finance, LLC			341,041				328,479				300,753
Cedar Rapids Bank and Trust			1,750,986				1,728,280				1,579,437
Community State Bank			1,098,479				1,025,844				973,083
Guaranty Bank			1,751,072				1,700,034				1,649,313
TOTAL LOANS & LEASES / TOTAL DEPOSITS
Quad City Bank and Trust (1)			102	%			89	%			104	%
Cedar Rapids Bank and Trust			102	%			96	%			97	%
Community State Bank			97	%			96	%			94	%
Guaranty Bank			102	%			103	%			101	%
TOTAL LOANS & LEASES / TOTAL ASSETS
Quad City Bank and Trust (1)			82	%			74	%			81	%
Cedar Rapids Bank and Trust			72	%			72	%			75	%
Community State Bank			78	%			77	%			77	%
Guaranty Bank			78	%			78	%			78	%
ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES
Quad City Bank and Trust (1)			1.43	%			1.44	%			1.59	%
m2 Equipment Finance, LLC			3.52	%			3.46	%			3.13	%
Cedar Rapids Bank and Trust			1.40	%			1.41	%			1.54	%
Community State Bank			1.22	%			1.27	%			1.45	%
Guaranty Bank			1.20	%			1.22	%			1.42	%
RETURN ON AVERAGE ASSETS
Quad City Bank and Trust (1)			0.97	%			0.82	%			1.41	%			1.00	%			1.61	%
Cedar Rapids Bank and Trust			2.28	%			3.52	%			2.83	%			2.95	%			2.60	%
Community State Bank			1.38	%			1.42	%			1.31	%			1.43	%			1.28	%
Guaranty Bank (6)			1.23	%			0.97	%			1.76	%			1.07	%			1.06	%
NET INTEREST MARGIN PERCENTAGE (2)
Quad City Bank and Trust (1)			3.37	%			3.28	%			3.65	%			3.36	%			3.63	%
Cedar Rapids Bank and Trust			3.78	%			3.69	%			4.02	%			3.83	%			3.77	%
Community State Bank (3)			3.88	%			3.90	%			3.69	%			3.92	%			3.66	%
Guaranty Bank (4)			3.06	%			3.10	%			4.10	%			3.22	%			4.01	%
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET INTEREST MARGIN, NET
Cedar Rapids Bank and Trust		$	-			$	-			$	5			$	(8	)		$	60
Community State Bank			(1	)			(1	)			62			$	69				123
Guaranty Bank			572				168				1,047			$	1,537				2,814
QCR Holdings, Inc. (5)			(32	)			(33	)			(34	)		$	(97	)			(104	)

 

(1)

Quad City Bank and Trust amounts 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% federal tax rate.

(3)

Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.88% for the quarter ended September 30, 2023, 3.90% for the quarter ended June 30, 2023 and 3.72% for the quarter ended September 30, 2022.

(4)

Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.97% for the quarter ended September 30, 2023, 3.11% for the quarter ended June 30, 2023 and 3.91% for the quarter ended September 30, 2022.

(5)

Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.

(6)

Adjusted ROAA excluding non-core adjustments for the Guaranty Bank acquisition (non-GAAP) would have been 1.84% for the nine months ended September 30, 2022.

 

 

QCR Holding, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		As of
		September 30,				June 30,				March 31,				December 31,				September 30,
GAAP TO NON-GAAP RECONCILIATIONS		2023				2023				2023				2022				2022
		(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)		$	828,383			$	822,689			$	801,494			$	772,724			$	737,072
Less: Intangible assets			153,564				154,255				154,467				154,366				155,153
Tangible common equity (non-GAAP)		$	674,819			$	668,434			$	647,027			$	618,358			$	581,919
Total assets (GAAP)		$	8,540,057			$	8,226,673			$	8,036,904			$	7,948,837			$	7,730,049
Less: Intangible assets			153,564				154,255				154,467				154,366				155,153
Tangible assets (non-GAAP)		$	8,386,493			$	8,072,418			$	7,882,437			$	7,794,471			$	7,574,896
Tangible common equity to tangible assets ratio (non-GAAP)			8.05	%			8.28	%			8.21	%			7.93	%			7.68	%

 

(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.

 

 

QCR Holding, 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)		2023				2023				2023				2022				2022				2023				2022
		(dollars in thousands, except per share data)
Net income (GAAP)		$	25,121			$	28,425			$	27,157			$	30,906			$	29,294			$	80,703			$	68,160
Less non-core items (post-tax) (2):
Income:
Securities gains (losses), net			-				9				(366	)			-				-				(356	)			-
Fair value gain (loss) on derivatives, net			(265	)			66				(337	)			(211	)			714				(537	)			1,771
Total non-core income (non-GAAP)		$	(265	)		$	75			$	(703	)		$	(211	)		$	714			$	(893	)		$	1,771
Expense:
Acquisition costs (2)			-				-				-				(517	)			321				-				3,715
Post-acquisition compensation, transition and integration costs			-				-				164				529				48				164				3,837
Separation agreement			-				-				-				-				-				-				-
CECL Day 2 provision for credit losses on acquired non-PCD loans (3)			-				-				-				-				-				-				8,651
CECL Day 2 provision for credit losses provision on acquired OBS exposure (3)			-				-				-				-				-				-				1,140
Total non-core expense (non-GAAP)		$	-			$	-			$	164			$	12			$	369			$	164			$	17,343
Adjusted net income  (non-GAAP) (1)		$	25,386			$	28,350			$	28,024			$	31,129			$	28,949			$	81,760			$	83,732
ADJUSTED EARNINGS PER COMMON SHARE (1)
Adjusted net income (non-GAAP) (from above)		$	25,386			$	28,350			$	28,024			$	31,129			$	28,949			$	81,760			$	83,732
Weighted average common shares outstanding			16,717,303				16,701,950				16,776,289				16,855,973				16,900,968				16,731,847				16,030,371
Weighted average common and common equivalent shares outstanding			16,847,951				16,799,527				16,942,132				17,047,976				17,110,691				16,863,203				16,243,921
Adjusted earnings per common share (non-GAAP):
Basic		$	1.52			$	1.70			$	1.67			$	1.85			$	1.71			$	4.89			$	5.22
Diluted		$	1.51			$	1.69			$	1.65			$	1.83			$	1.69			$	4.85			$	5.15
ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)
Adjusted net income (non-GAAP) (from above)		$	25,386			$	28,350			$	28,024			$	31,129			$	28,949			$	81,760			$	83,732
Average Assets		$	8,287,813			$	7,924,597			$	7,906,830			$	7,800,229			$	7,652,463			$	8,041,141			$	7,005,988
Adjusted return on average assets (annualized) (non-GAAP)			1.23	%			1.43	%			1.42	%			1.60	%			1.51	%			1.36	%			1.59	%
Adjusted return on average equity (annualized) (non-GAAP)			12.12	%			13.88	%			14.11	%			16.44	%			15.21	%			13.35	%			14.99	%
NET INTEREST MARGIN (TEY) (4)
Net interest income (GAAP)		$	55,255			$	53,205			$	56,810			$	65,218			$	60,769			$	165,270			$	165,902
Plus: Tax equivalent adjustment (5)			7,771				6,542				6,057				5,554				4,459				20,283				10,785
Net interest income - tax equivalent (Non-GAAP)		$	63,026			$	59,747			$	62,867			$	70,772			$	65,228			$	185,553			$	176,687
Less: Acquisition accounting net accretion			539				134				828				5,688				1,080				1,501				2,893
Adjusted net interest income		$	62,487			$	59,613			$	62,039			$	65,084			$	64,148			$	184,052			$	173,794
Average earning assets		$	7,573,785			$	7,283,286			$	7,247,605			$	7,148,578			$	6,975,857			$	7,369,420			$	6,452,867
Net interest margin (GAAP)			2.89	%			2.93	%			3.18	%			3.62	%			3.46	%			3.00	%			3.44	%
Net interest margin (TEY) (Non-GAAP)			3.31	%			3.29	%			3.52	%			3.93	%			3.71	%			3.37	%			3.66	%
Adjusted net interest margin (TEY) (Non-GAAP)			3.28	%			3.28	%			3.47	%			3.61	%			3.65	%			3.34	%			3.60	%
EFFICIENCY RATIO (6)
Noninterest expense (GAAP)		$	51,081			$	49,727			$	48,785			$	49,697			$	47,746			$	149,593			$	140,319
Net interest income (GAAP)		$	55,255			$	53,205			$	56,810			$	65,218			$	60,769			$	165,270			$	165,902
Noninterest income (GAAP)			26,593				32,520				25,842				21,219				21,095				84,955				59,510
Total income		$	81,848			$	85,725			$	82,652			$	86,437			$	81,864			$	250,225			$	225,412
Efficiency ratio (noninterest expense/total income) (Non-GAAP)			62.41	%			58.01	%			59.02	%			57.50	%			58.32	%			59.78	%			62.25	%

 

(1)

Adjusted net income, adjusted earnings per common share, adjusted return on average assets and average equity 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, these non-GAAP measures are 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 federal tax rate of 21% with the exception of acquisition costs which have an estimated effective federal tax rate of 13.62%.

(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 federal 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.

 

 

v3.23.3

Cover	Oct. 25, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 25, 2023
Entity File Number	0-22208
Entity Registrant Name	QCR Holdings, Inc.
Entity Central Index Key	0000906465
Entity Tax Identification Number	42-1397595
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3551 Seventh Street
Entity Address, City or Town	Moline
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61265
City Area Code	309
Local Phone Number	736-3584
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $1.00 Par Value
Trading Symbol	QCRH
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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