First Quarter 2023 Highlights
- Net income of $27.2 million, or $1.60 per diluted share
- Adjusted net income (non-GAAP) of $28.0 million, or $1.65 per diluted share
- Capital Markets Revenue from Swap Fees grew $5.7 million, or 50%, to $17.0 million
- Noninterest expenses well controlled and down 2% on a linked-quarter basis
- Annualized deposit growth, excluding brokered deposits, of 1.4%
- Uninsured and uncollateralized deposits improved to 23.8% of total deposits
- Tangible book value (non-GAAP) per share increased 5.1%, or 20.5% annualized
- TCE ratio grew 28 bps, or 4% to 8.21%
MOLINE, Ill., April 26, 2023 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the "Company") today announced net income of $27.2 million and diluted earnings per share ("EPS") of $1.60 for the first quarter of 2023, compared to net income of $30.9 million and diluted EPS of $1.81 for the fourth quarter of 2022.
"In the first quarter, we delivered strong results, highlighted by increased fee income and carefully managed expenses," said Larry J. Helling, Chief Executive Officer. "In response to the current banking environment, we grew our deposits and significantly increased our balance sheet liquidity. In addition, we continued to improve upon our already strong capital levels."
Core Deposit Growth and Strengthened Liquidity
During the first quarter of 2023, the Company's deposits, excluding brokered deposits, grew $19.9 million to a total of $5.9 billion, or 1.4% on an annualized basis. The Company also added short-term brokered deposits of $497.5 million during the quarter to intentionally bolster on-balance sheet liquidity and fully eliminate overnight borrowings from the FHLB. Total uninsured and uncollateralized deposits improved during the first quarter and represented 23.8% of total deposits. The Company maintained approximately $1.5 billion of immediately available liquidity at quarter-end, which was more than the total amount of our uninsured or uncollateralized deposits.
"We have built a strong and diversified deposit franchise over the past 30 years and our first-quarter deposit activity was a reflection of the importance of that franchise," added Mr. Helling. "We are pleased with our level of uninsured and uncollateralized deposits and our strong liquidity position."
Net Income of $27.2 Million and Diluted EPS of $1.60
Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the first quarter of 2023 were $28.0 million and $1.65, respectively. For the fourth quarter of 2022, adjusted net income (non-GAAP) was $31.1 million and adjusted diluted EPS (non-GAAP) was $1.83. For the first quarter of 2022, net income and diluted EPS were $23.6 million and $1.49, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $24.4 million and $1.54, respectively. During the first quarter, the Company grew pre-tax/pre-provision adjusted income (non-GAAP) by $2.0 million or 6.4% when excluding the impact of loan discount accretion.
| For the Quarter Ended | |||||||
| March 31, | December 31, | March 31, | |||||
| $ in millions (except per share data) | 2023 | 2022 | 2022 | ||||
| Net Income | $ | 27.2 | $ | 30.9 | $ | 23.6 | |
| Diluted EPS | $ | 1.60 | $ | 1.81 | $ | 1.49 | |
| Adjusted Net Income (non-GAAP)* | $ | 28.0 | $ | 31.1 | $ | 24.4 | |
| Adjusted Diluted EPS (non-GAAP)* | $ | 1.65 | $ | 1.83 | $ | 1.54 | |
*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.
Net Interest Income of $56.8 Million
Net interest income for the first quarter of 2023 totaled $56.8 million, compared to $65.2 million for the fourth quarter of 2022 and $45.7 million for the first quarter of 2022. Adjusted net interest income (non-GAAP) during the quarter was $62.0 million, a decrease of $3.0 million from the prior quarter. Acquisition-related net accretion totaled $828 thousand for the first quarter of 2023, compared to $5.7 million in the fourth quarter of 2022.
In the first quarter of 2023, net interest margin ("NIM") was 3.18% and NIM on a tax-equivalent yield ("TEY") basis (non-GAAP) was 3.52%, compared to 3.62% and 3.93% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.47% declined by 14 basis points from 3.61% in the fourth quarter.
"Our adjusted tax-equivalent NIM declined by 14 basis points during the first quarter," said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. "With heavy deposit competition and the later stages of the rate cycle, our deposit betas accelerated in the first quarter. We continue to see deposit mix shift from noninterest bearing and lower beta deposits to higher beta deposits, which has shifted our interest rate risk position from asset sensitive to moderately liability sensitive."
Noninterest Income Jumps 22% to $25.8 Million
Noninterest income for the first quarter of 2023 totaled $25.8 million, up 22% from $21.2 million for the fourth quarter of 2022. The Company generated $17.0 million of capital markets revenue from swap fees in the quarter, an increase of $5.7 million, or 50% from the fourth quarter. Wealth management revenue of $3.8 million for the quarter also grew more than 6% from the prior quarter.
"Capital markets revenue was $17.0 million in the first quarter, up significantly from the fourth quarter and well ahead of our guidance range," added Mr. Gipple. "Many of the headwinds that some of our clients had been experiencing in recent quarters have begun to subside and several previously delayed projects funded during the first quarter. Our pipeline for these loans remains healthy and, as a result, we are increasing our capital markets revenue guidance to a range of between $40 and $50 million for the next twelve months."
Noninterest Expenses Decline 2% to $48.8 Million
Noninterest expense for the first quarter of 2023 remains well-controlled and totaled $48.8 million, down 2% from $49.7 million for the fourth quarter of 2022 and compared to $38.3 million for the first quarter of 2022. The linked-quarter decline was primarily due to lower compensation expense. In addition, we experienced lower professional and data processing fees, insurance and regulatory fees, and advertising and marketing expenses. Noninterest expenses declined 2% during the first quarter despite the impact of annual merit increases effective at the beginning of the quarter and continued inflationary pressures.
Annualized Loan and Lease Growth of 3.3% for the Quarter
During the first quarter of 2023, the Company's loans and leases grew $51.2 million to a total of $6.2 billion, or 3.3% on an annualized basis. "Our loan growth during the quarter was driven primarily by strength in both our traditional and tax credit lending business," added Mr. Helling. "We experienced more modest loan demand from our client base due to the macro headwinds being created by the higher interest rate environment. Therefore, given the ongoing economic uncertainty, we are now guiding to loan growth in the second quarter in the range of zero to 5%, on an annualized basis net of the planned loan securitization."
Asset Quality Remains Excellent
"Our asset quality remains excellent as the ratio of nonperforming assets to total assets was 0.29% at quarter-end and compares favorably to historical averages and current peer metrics. We remain cautiously optimistic about the relative economic resiliency of our markets and we are not seeing any meaningful signs of weakness across our footprint," said Mr. Helling.
Nonperforming assets ("NPAs") totaled $23.0 million at the end of the first quarter, up from $8.9 million in the fourth quarter of 2022. The increase in NPAs during the quarter was the result of a single credit relationship which was moved to nonaccrual status. In addition, the Company's criticized loans and classified loans to total loans and leases on March 31, 2023, increased modestly to 3.16% and 1.14%, respectively, as compared to 2.68% and 1.08% as of December 31, 2022.
The Company recorded a total provision for credit losses of $3.9 million during the quarter which included $2.5 million of provision on loans/leases. As of March 31, 2023, the ACL to total loans/leases held for investment was 1.43%, consistent with the prior quarter.
Continued Strong Capital Levels
As of March 31, 2023, the Company's total risk-based capital ratio was 14.50%, the common equity tier 1 ratio was 9.48% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.21%. By comparison, these respective ratios were 14.28%, 9.29% and 7.93% as of December 31, 2022.
During the first quarter, the Company purchased and retired 152,500 shares of its common stock at an average price of $50.61 per share as the Company executed purchases under the share repurchase plan announced during the second quarter of 2022. The 2022 share repurchase plan authorized approximately 1,500,000 shares to be repurchased and the Company has approximately 778,000 shares remaining under the program.
The Company's tangible book value per share (non-GAAP) increased by 5.1% during the first quarter. Accumulated other comprehensive income ("AOCI") improved $9.3 million during the quarter due to an increase in the value of the Company's available for sale securities portfolio and certain derivatives resulting from the change in interest rates during the first quarter. While the repurchase of shares modestly impacted the Company's tangible common equity, the change in AOCI and solid earnings more than offset this impact, which led to the sharp increase in tangible book value per share (non-GAAP).
Focus on Three Strategic Long-Term Initiatives
As part of our Company's ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, we continue 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, April 27, 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 May 4, 2023. The replay access information is 877-344-7529 (international 412-317-0088); access code 6451503. 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 Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of March 31, 2023, the Company had $8.0 billion in assets, $6.2 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 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); (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
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com
| QCR Holding, Inc. | ||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| As of | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||
| (dollars in thousands) | ||||||||||||||||
| CONDENSED BALANCE SHEET | ||||||||||||||||
| Cash and due from banks | $ | 64,295 | $ | 59,723 | $ | 86,282 | $ | 92,379 | $ | 50,540 | ||||||
| Federal funds sold and interest-bearing deposits | 253,997 | 124,270 | 71,043 | 56,532 | 66,390 | |||||||||||
| Securities, net of allowance for credit losses | 877,446 | 928,102 | 879,450 | 879,918 | 823,311 | |||||||||||
| Loans receivable held for sale (1) | 140,633 | 1,480 | 3,054 | 1,186 | 2,968 | |||||||||||
| Loans/leases receivable held for investment | 6,049,389 | 6,137,391 | 6,005,556 | 5,796,717 | 4,824,900 | |||||||||||
| Allowance for credit losses | (86,573 | ) | (87,706 | ) | (90,489 | ) | (92,425 | ) | (74,786 | ) | ||||||
| Intangibles | 15,993 | 16,759 | 17,546 | 18,333 | 8,856 | |||||||||||
| Goodwill | 138,474 | 137,607 | 137,607 | 137,607 | 74,066 | |||||||||||
| Derivatives | 130,350 | 177,631 | 185,037 | 97,455 | 107,326 | |||||||||||
| Other assets | 452,900 | 453,580 | 434,963 | 405,239 | 292,248 | |||||||||||
| Total assets | $ | 8,036,904 | $ | 7,948,837 | $ | 7,730,049 | $ | 7,392,941 | $ | 6,175,819 | ||||||
| Total deposits | $ | 6,501,663 | $ | 5,984,217 | $ | 5,941,035 | $ | 5,820,657 | $ | 4,839,689 | ||||||
| Total borrowings | 417,480 | 825,894 | 701,491 | 583,166 | 443,270 | |||||||||||
| Derivatives | 150,401 | 200,701 | 209,479 | 113,305 | 116,193 | |||||||||||
| Other liabilities | 165,866 | 165,301 | 140,972 | 132,675 | 108,743 | |||||||||||
| Total stockholders' equity | 801,494 | 772,724 | 737,072 | 743,138 | 667,924 | |||||||||||
| Total liabilities and stockholders' equity | $ | 8,036,904 | $ | 7,948,837 | $ | 7,730,049 | $ | 7,392,941 | $ | 6,175,819 | ||||||
| ANALYSIS OF LOAN PORTFOLIO | ||||||||||||||||
| Loan/lease mix: | ||||||||||||||||
| Commercial and industrial - revolving | $ | 307,612 | $ | 296,869 | $ | 332,996 | $ | 322,258 | $ | 263,441 | ||||||
| Commercial and industrial - other | 1,420,331 | 1,451,693 | 1,415,996 | 1,403,689 | 1,374,221 | |||||||||||
| Total commercial and industrial | 1,727,943 | 1,748,562 | 1,748,992 | 1,725,947 | 1,637,662 | |||||||||||
| Commercial real estate, owner occupied | 616,922 | 629,367 | 627,558 | 628,565 | 439,257 | |||||||||||
| Commercial real estate, non-owner occupied | 982,716 | 963,239 | 920,876 | 889,530 | 679,898 | |||||||||||
| Construction and land development* | 1,208,185 | 1,192,061 | 1,149,503 | 1,080,372 | 863,116 | |||||||||||
| Multi-family* | 969,870 | 963,803 | 933,118 | 860,742 | 711,682 | |||||||||||
| Direct financing leases | 35,373 | 31,889 | 33,503 | 40,050 | 43,330 | |||||||||||
| 1-4 family real estate | 532,491 | 499,529 | 487,508 | 473,141 | 379,613 | |||||||||||
| Consumer | 116,522 | 110,421 | 107,552 | 99,556 | 73,310 | |||||||||||
| Total loans/leases | $ | 6,190,022 | $ | 6,138,871 | $ | 6,008,610 | $ | 5,797,903 | $ | 4,827,868 | ||||||
| Less allowance for credit losses | 86,573 | 87,706 | 90,489 | 92,425 | 74,786 | |||||||||||
| Net loans/leases | $ | 6,103,449 | $ | 6,051,165 | $ | 5,918,121 | $ | 5,705,478 | $ | 4,753,082 | ||||||
| *The LIHTC lending business is a significant part of the Company's Construction and Multi-family loans. For the quarter ended March 31, 2023, the LIHTC portion of the Construction loans was $760 million, or 63%, and the LIHTC portion of the Multi-family loans was $742 million, or 76%. | ||||||||||||||||
| ANALYSIS OF SECURITIES PORTFOLIO | ||||||||||||||||
| Securities mix: | ||||||||||||||||
| U.S. government sponsored agency securities | $ | 19,320 | $ | 16,981 | $ | 20,527 | $ | 20,448 | $ | 21,380 | ||||||
| Municipal securities | 731,689 | 779,450 | 724,204 | 710,638 | 667,245 | |||||||||||
| Residential mortgage-backed and related securities | 63,104 | 66,215 | 68,844 | 81,247 | 86,381 | |||||||||||
| Asset backed securities | 17,967 | 18,728 | 19,630 | 19,956 | 23,233 | |||||||||||
| Other securities | 46,535 | 46,908 | 46,443 | 47,827 | 25,270 | |||||||||||
| Total securities | $ | 878,615 | $ | 928,282 | $ | 879,648 | $ | 880,116 | $ | 823,509 | ||||||
| Less allowance for credit losses | 1,169 | 180 | 198 | 198 | 198 | |||||||||||
| Net securities | $ | 877,446 | $ | 928,102 | $ | 879,450 | $ | 879,918 | $ | 823,311 | ||||||
| ANALYSIS OF DEPOSITS | ||||||||||||||||
| Deposit mix: | ||||||||||||||||
| Noninterest-bearing demand deposits | $ | 1,189,858 | $ | 1,262,981 | $ | 1,315,555 | $ | 1,514,005 | $ | 1,275,493 | ||||||
| Interest-bearing demand deposits | 4,033,193 | 3,875,497 | 3,904,303 | 3,758,566 | 3,181,685 | |||||||||||
| Time deposits | 679,946 | 744,593 | 672,133 | 540,074 | 382,268 | |||||||||||
| Brokered deposits | 598,666 | 101,146 | 49,044 | 8,012 | 243 | |||||||||||
| Total deposits | $ | 6,501,663 | $ | 5,984,217 | $ | 5,941,035 | $ | 5,820,657 | $ | 4,839,689 | ||||||
| ANALYSIS OF BORROWINGS | ||||||||||||||||
| Borrowings mix: | ||||||||||||||||
| Term FHLB advances | $ | 135,000 | $ | - | $ | - | $ | - | $ | - | ||||||
| Overnight FHLB advances | - | 415,000 | 335,000 | 400,000 | 290,000 | |||||||||||
| Other short-term borrowings | 1,100 | 129,630 | 85,180 | 1,070 | 1,190 | |||||||||||
| Subordinated notes | 232,746 | 232,662 | 232,743 | 133,562 | 113,890 | |||||||||||
| Junior subordinated debentures | 48,634 | 48,602 | 48,568 | 48,534 | 38,190 | |||||||||||
| Total borrowings | $ | 417,480 | $ | 825,894 | $ | 701,491 | $ | 583,166 | $ | 443,270 | ||||||
| (1) Loans with a fair value of $139.2 million, have been identified for securitization and are included in LHFS at March 31, 2023. | ||||||||||||||||
| QCR Holding, Inc. | |||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| INCOME STATEMENT | |||||||||||||||
| Interest income | $ | 94,217 | $ | 94,037 | $ | 79,267 | $ | 68,205 | $ | 51,062 | |||||
| Interest expense | 37,407 | 28,819 | 18,498 | 8,805 | 5,329 | ||||||||||
| Net interest income | 56,810 | 65,218 | 60,769 | 59,400 | 45,733 | ||||||||||
| Provision for credit losses (1) | 3,928 | - | - | 11,200 | (2,916 | ) | |||||||||
| Net interest income after provision for credit losses | $ | 52,882 | $ | 65,218 | $ | 60,769 | $ | 48,200 | $ | 48,649 | |||||
| Trust department fees | $ | 2,906 | $ | 2,644 | $ | 2,537 | $ | 2,497 | $ | 2,963 | |||||
| Investment advisory and management fees | 879 | 918 | 921 | 983 | 1,036 | ||||||||||
| Deposit service fees | 2,028 | 2,142 | 2,214 | 2,223 | 1,555 | ||||||||||
| Gain on sales of residential real estate loans | 312 | 468 | 641 | 809 | 493 | ||||||||||
| Gain on sales of government guaranteed portions of loans | 30 | 50 | 50 | - | 19 | ||||||||||
| Capital markets revenue | 17,023 | 11,338 | 10,545 | 13,004 | 6,422 | ||||||||||
| Securities losses, net | (463 | ) | - | - | - | - | |||||||||
| Earnings on bank-owned life insurance | 707 | 755 | 605 | 350 | 346 | ||||||||||
| Debit card fees | 1,466 | 1,500 | 1,453 | 1,499 | 1,007 | ||||||||||
| Correspondent banking fees | 391 | 257 | 189 | 244 | 277 | ||||||||||
| Loan related fee income | 651 | 614 | 652 | 682 | 480 | ||||||||||
| Fair value gain (loss) on derivatives | (427 | ) | (267 | ) | 904 | 432 | 906 | ||||||||
| Other | 339 | 800 | 384 | 59 | 129 | ||||||||||
| Total noninterest income | $ | 25,842 | $ | 21,219 | $ | 21,095 | $ | 22,782 | $ | 15,633 | |||||
| Salaries and employee benefits | $ | 32,003 | $ | 32,594 | $ | 29,175 | $ | 29,972 | $ | 23,627 | |||||
| Occupancy and equipment expense | 5,914 | 6,027 | 6,033 | 5,978 | 3,937 | ||||||||||
| Professional and data processing fees | 3,514 | 3,769 | 4,477 | 4,365 | 3,671 | ||||||||||
| Acquisition costs | - | (424 | ) | 315 | 1,973 | 1,851 | |||||||||
| Post-acquisition compensation, transition and integration costs | 207 | 668 | 62 | 4,796 | - | ||||||||||
| FDIC insurance, other insurance and regulatory fees | 1,374 | 1,605 | 1,497 | 1,394 | 1,310 | ||||||||||
| Loan/lease expense | 556 | 411 | 390 | 761 | 267 | ||||||||||
| Net cost of (income from) and gains/losses on operations of other real estate | (67 | ) | (117 | ) | 19 | 59 | (1 | ) | |||||||
| Advertising and marketing | 1,237 | 1,562 | 1,437 | 1,198 | 761 | ||||||||||
| Communication and data connectivity | 665 | 587 | 639 | 584 | 403 | ||||||||||
| Supplies | 305 | 337 | 289 | 237 | 246 | ||||||||||
| Bank service charges | 605 | 563 | 568 | 610 | 541 | ||||||||||
| Correspondent banking expense | 210 | 210 | 218 | 213 | 199 | ||||||||||
| Intangibles amortization | 766 | 787 | 787 | 787 | 493 | ||||||||||
| Payment card processing | 545 | 599 | 477 | 626 | 262 | ||||||||||
| Trust expense | 214 | 166 | 227 | 195 | 187 | ||||||||||
| Other | 737 | 353 | 1,136 | 500 | 571 | ||||||||||
| Total noninterest expense | $ | 48,785 | $ | 49,697 | $ | 47,746 | $ | 54,248 | $ | 38,325 | |||||
| Net income before income taxes | $ | 29,939 | $ | 36,740 | $ | 34,118 | $ | 16,734 | $ | 25,957 | |||||
| Federal and state income tax expense | 2,782 | 5,834 | 4,824 | 1,492 | 2,333 | ||||||||||
| Net income | $ | 27,157 | $ | 30,906 | $ | 29,294 | $ | 15,242 | $ | 23,624 | |||||
| Basic EPS | $ | 1.62 | $ | 1.83 | $ | 1.73 | $ | 0.88 | $ | 1.51 | |||||
| Diluted EPS | $ | 1.60 | $ | 1.81 | $ | 1.71 | $ | 0.87 | $ | 1.49 | |||||
| Weighted average common shares outstanding | 16,776,289 | 16,855,973 | 16,900,968 | 17,345,324 | 15,625,112 | ||||||||||
| Weighted average common and common equivalent shares outstanding | 16,942,132 | 17,047,976 | 17,110,691 | 17,549,107 | 15,852,256 | ||||||||||
| (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. | |||||||||||||||
| QCR Holding, Inc. | ||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| As of and for the Quarter Ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
| COMMON SHARE DATA | ||||||||||||||||
| Common shares outstanding | 16,713,775 | 16,795,942 | 16,885,485 | 17,064,347 | 15,579,605 | |||||||||||
| Book value per common share (1) | $ | 47.95 | $ | 46.01 | $ | 43.65 | $ | 43.55 | $ | 42.87 | ||||||
| Tangible book value per common share (Non-GAAP) (2) | $ | 38.71 | $ | 36.82 | $ | 34.46 | $ | 34.41 | $ | 37.55 | ||||||
| Closing stock price | $ | 43.91 | $ | 49.64 | $ | 50.94 | $ | 53.99 | $ | 56.59 | ||||||
| Market capitalization | $ | 733,902 | $ | 833,751 | $ | 860,147 | $ | 921,304 | $ | 881,650 | ||||||
| Market price / book value | 91.57 | % | 107.90 | % | 116.70 | % | 123.97 | % | 132.00 | % | ||||||
| Market price / tangible book value | 113.43 | % | 134.83 | % | 147.81 | % | 156.90 | % | 150.71 | % | ||||||
| Earnings per common share (basic) LTM (3) | $ | 6.06 | $ | 5.95 | $ | 5.86 | $ | 6.14 | $ | 6.68 | ||||||
| Price earnings ratio LTM (3) | 7.24 | x | 8.35 | x | 8.70 | x | 8.79 | x | 8.47 | x | ||||||
| TCE / TA (Non-GAAP) (4) | 8.21 | % | 7.93 | % | 7.68 | % | 8.11 | % | 9.60 | % | ||||||
| CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||||||||
| Beginning balance | $ | 772,724 | $ | 737,072 | $ | 743,138 | $ | 667,924 | $ | 677,010 | ||||||
| Net income | 27,157 | 30,906 | 29,294 | 15,242 | 23,624 | |||||||||||
| Other comprehensive income (loss), net of tax | 9,325 | 9,959 | (24,783 | ) | (24,286 | ) | (27,340 | ) | ||||||||
| Common stock cash dividends declared | (1,010 | ) | (1,013 | ) | (1,012 | ) | (1,059 | ) | (938 | ) | ||||||
| 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 | (7,719 | ) | (5,037 | ) | (10,485 | ) | (33,016 | ) | (4,416 | ) | ||||||
| Other (5) | 1,017 | 837 | 920 | 1,119 | (16 | ) | ||||||||||
| Ending balance | $ | 801,494 | $ | 772,724 | $ | 737,072 | $ | 743,138 | $ | 667,924 | ||||||
| REGULATORY CAPITAL RATIOS (6): | ||||||||||||||||
| Total risk-based capital ratio | 14.50 | % | 14.28 | % | 14.38 | % | 13.40 | % | 14.50 | % | ||||||
| Tier 1 risk-based capital ratio | 10.13 | % | 9.95 | % | 9.88 | % | 10.18 | % | 11.27 | % | ||||||
| Tier 1 leverage capital ratio | 9.73 | % | 9.61 | % | 9.56 | % | 9.61 | % | 10.78 | % | ||||||
| Common equity tier 1 ratio | 9.48 | % | 9.29 | % | 9.21 | % | 9.46 | % | 10.61 | % | ||||||
| KEY PERFORMANCE RATIOS AND OTHER METRICS | ||||||||||||||||
| Return on average assets (annualized) | 1.37 | % | 1.58 | % | 1.53 | % | 0.83 | % | 1.55 | % | ||||||
| Return on average total equity (annualized) | 13.67 | % | 16.32 | % | 15.39 | % | 7.74 | % | 13.81 | % | ||||||
| Net interest margin | 3.18 | % | 3.62 | % | 3.46 | % | 3.53 | % | 3.30 | % | ||||||
| Net interest margin (TEY) (Non-GAAP)(7) | 3.52 | % | 3.93 | % | 3.71 | % | 3.74 | % | 3.50 | % | ||||||
| Efficiency ratio (Non-GAAP) (8) | 59.02 | % | 57.50 | % | 58.32 | % | 66.01 | % | 62.45 | % | ||||||
| Gross loans and leases / total assets | 77.02 | % | 77.23 | % | 77.73 | % | 78.42 | % | 78.17 | % | ||||||
| Gross loans and leases / total deposits | 95.21 | % | 102.58 | % | 101.14 | % | 99.61 | % | 99.76 | % | ||||||
| Effective tax rate | 9.29 | % | 15.88 | % | 14.14 | % | 8.92 | % | 8.99 | % | ||||||
| Full-time equivalent employees (9) | 969 | 973 | 956 | 968 | 749 | |||||||||||
| AVERAGE BALANCES | ||||||||||||||||
| Assets | $ | 7,906,830 | $ | 7,800,229 | $ | 7,652,463 | $ | 7,324,470 | $ | 6,115,127 | ||||||
| Loans/leases | 6,165,115 | 6,043,359 | 5,916,100 | 5,711,471 | 4,727,478 | |||||||||||
| Deposits | 6,179,644 | 6,029,455 | 5,891,198 | 5,867,444 | 4,903,354 | |||||||||||
| Total stockholders' equity | 794,685 | 757,419 | 761,428 | 788,204 | 684,126 | |||||||||||
| (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. | ||||||||||||||||
| QCR Holding, Inc. | |||||||||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| ANALYSIS OF NET INTEREST INCOME AND MARGIN | |||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 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 | $ | 19,275 | $ | 234 | 4.93 | % | $ | 30,754 | $ | 296 | 3.82 | % | $ | 4,564 | $ | 2 | 0.15 | % | |||
| Interest-bearing deposits at financial institutions | 73,584 | 821 | 4.53 | % | 62,581 | 504 | 3.20 | % | 69,328 | 35 | 0.20 | % | |||||||||
| Securities (1) | 951,865 | 10,157 | 4.27 | % | 971,930 | 10,074 | 4.14 | % | 802,260 | 7,682 | 3.83 | % | |||||||||
| Restricted investment securities | 37,766 | 513 | 5.43 | % | 39,954 | 628 | 6.15 | % | 22,183 | 281 | 5.06 | % | |||||||||
| Loans (1) | 6,165,115 | 88,548 | 5.82 | % | 6,043,359 | 88,088 | 5.78 | % | 4,727,478 | 45,995 | 3.95 | % | |||||||||
| Total earning assets (1) | $ | 7,247,605 | $ | 100,273 | 5.60 | % | $ | 7,148,578 | $ | 99,590 | 5.53 | % | $ | 5,625,813 | $ | 53,995 | 3.88 | % | |||
| Interest-bearing deposits | $ | 4,067,405 | $ | 23,776 | 2.37 | % | $ | 3,968,081 | $ | 17,655 | 1.77 | % | $ | 3,228,083 | $ | 2,338 | 0.29 | % | |||
| Time deposits | 869,912 | 6,003 | 2.80 | % | 746,819 | 3,476 | 1.85 | % | 398,897 | 799 | 0.81 | % | |||||||||
| Short-term borrowings | 7,573 | 99 | 5.28 | % | 19,591 | 211 | 4.28 | % | 1,951 | - | 0.05 | % | |||||||||
| Federal Home Loan Bank advances | 296,333 | 3,521 | 4.75 | % | 351,033 | 3,507 | 3.91 | % | 85,778 | 82 | 0.38 | % | |||||||||
| Subordinated debentures | 232,679 | 3,311 | 5.69 | % | 232,689 | 3,312 | 5.69 | % | 113,868 | 1,554 | 5.46 | % | |||||||||
| Junior subordinated debentures | 48,613 | 696 | 5.72 | % | 48,583 | 657 | 5.29 | % | 38,171 | 556 | 5.83 | % | |||||||||
| Total interest-bearing liabilities | $ | 5,522,515 | $ | 37,406 | 2.74 | % | $ | 5,366,796 | $ | 28,818 | 2.13 | % | $ | 3,866,748 | $ | 5,329 | 0.56 | % | |||
| Net interest income (1) | $ | 62,867 | $ | 70,772 | $ | 48,666 | |||||||||||||||
| Net interest margin (2) | 3.18 | % | 3.62 | % | 3.30 | % | |||||||||||||||
| Net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.52 | % | 3.93 | % | 3.50 | % | |||||||||||||||
| Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.47 | % | 3.61 | % | 3.50 | % | |||||||||||||||
| (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 | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES | |||||||||||||||
| Beginning balance | $ | 87,706 | $ | 90,489 | $ | 92,425 | $ | 74,786 | $ | 78,721 | |||||
| Initial ACL recorded for acquired PCD loans | - | - | - | 5,902 | - | ||||||||||
| Reduction of ACL for writedown of LHFS to fair value (1) | (1,709 | ) | - | - | - | - | |||||||||
| Credit loss expense (2) | 2,458 | 1,013 | 331 | 12,141 | (3,849 | ) | |||||||||
| Loans/leases charged off | (2,275 | ) | (3,960 | ) | (2,489 | ) | (620 | ) | (456 | ) | |||||
| Recoveries on loans/leases previously charged off | 393 | 164 | 222 | 216 | 370 | ||||||||||
| Ending balance | $ | 86,573 | $ | 87,706 | $ | 90,489 | $ | 92,425 | $ | 74,786 | |||||
| NONPERFORMING ASSETS | |||||||||||||||
| Nonaccrual loans/leases (3) | $ | 22,947 | $ | 8,765 | $ | 17,511 | $ | 23,574 | $ | 2,744 | |||||
| Accruing loans/leases past due 90 days or more | 15 | 5 | 3 | 268 | 4 | ||||||||||
| Total nonperforming loans/leases | 22,962 | 8,770 | 17,514 | 23,842 | 2,748 | ||||||||||
| Other real estate owned | 61 | 133 | 177 | 205 | - | ||||||||||
| Other repossessed assets | - | - | 340 | - | - | ||||||||||
| Total nonperforming assets | $ | 23,023 | $ | 8,903 | $ | 18,031 | $ | 24,047 | $ | 2,748 | |||||
| ASSET QUALITY RATIOS | |||||||||||||||
| Nonperforming assets / total assets | 0.29 | % | 0.11 | % | 0.23 | % | 0.33 | % | 0.04 | % | |||||
| ACL for loans and leases / total loans/leases held for investment | 1.43 | % | 1.43 | % | 1.51 | % | 1.59 | % | 1.55 | % | |||||
| ACL for loans and leases / nonperforming loans/leases | 377.03 | % | 1000.07 | % | 516.67 | % | 387.66 | % | 2721.47 | % | |||||
| Net charge-offs as a % of average loans/leases | 0.03 | % | 0.06 | % | 0.04 | % | 0.01 | % | 0.00 | % | |||||
| INTERNALLY ASSIGNED RISK RATING (4) | |||||||||||||||
| Special mention (rating 6) | $ | 125,048 | $ | 98,333 | $ | 63,973 | $ | 54,558 | $ | 63,622 | |||||
| Substandard (rating 7) | 70,866 | 66,021 | 77,317 | 83,048 | 54,491 | ||||||||||
| Doubtful (rating 8) | - | - | - | - | - | ||||||||||
| $ | 195,914 | $ | 164,354 | $ | 141,290 | $ | 137,606 | $ | 118,113 | ||||||
| Criticized loans (5) | $ | 195,914 | $ | 164,354 | $ | 141,290 | $ | 137,606 | $ | 118,113 | |||||
| Classified loans (6) | 70,866 | 66,021 | 77,317 | 83,048 | 54,491 | ||||||||||
| Criticized loans as a % of total loans/leases | 3.16 | % | 2.68 | % | 2.35 | % | 2.37 | % | 2.45 | % | |||||
| Classified loans as a % of total loans/leases | 1.14 | % | 1.08 | % | 1.29 | % | 1.43 | % | 1.13 | % | |||||
| (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) 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. | |||||||||||||||
| (3) The increase in nonaccrual loans for the quarter ended June 30, 2022 is due to the addition of $7.3 million related to the acquired Guaranty Bank loan portfolio. | |||||||||||||||
| (4) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion. | |||||||||||||||
| (5) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance. | |||||||||||||||
| (6) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance. | |||||||||||||||
| QCR Holding, Inc. | |||||||||||||
| Consolidated Financial Highlights | |||||||||||||
| (Unaudited) | |||||||||||||
| For the Quarter Ended | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| SELECT FINANCIAL DATA - SUBSIDIARIES | 2023 | 2022 | 2022 | ||||||||||
| (dollars in thousands) | |||||||||||||
| TOTAL ASSETS | |||||||||||||
| Quad City Bank and Trust (1) | $ | 2,548,473 | $ | 2,312,013 | $ | 2,195,894 | |||||||
| m2 Equipment Finance, LLC | 317,497 | 306,396 | 281,666 | ||||||||||
| Cedar Rapids Bank and Trust | 2,196,560 | 2,185,500 | 1,947,737 | ||||||||||
| Community State Bank | 1,286,227 | 1,297,812 | 1,184,708 | ||||||||||
| Guaranty Bank (2) | 2,147,776 | 2,146,474 | 956,345 | ||||||||||
| TOTAL DEPOSITS | |||||||||||||
| Quad City Bank and Trust (1) | $ | 2,173,343 | $ | 1,730,187 | $ | 1,930,935 | |||||||
| Cedar Rapids Bank and Trust | 1,663,138 | 1,686,959 | 1,397,976 | ||||||||||
| Community State Bank | 1,086,531 | 1,071,146 | 1,013,928 | ||||||||||
| Guaranty Bank (2) | 1,646,730 | 1,587,477 | 555,559 | ||||||||||
| TOTAL LOANS & LEASES | |||||||||||||
| Quad City Bank and Trust (1) | $ | 1,872,029 | $ | 1,828,267 | $ | 1,692,218 | |||||||
| m2 Equipment Finance, LLC | 321,495 | 309,930 | 285,871 | ||||||||||
| Cedar Rapids Bank and Trust | 1,637,252 | 1,644,989 | 1,478,514 | ||||||||||
| Community State Bank | 994,454 | 988,370 | 912,996 | ||||||||||
| Guaranty Bank (2) | 1,686,287 | 1,677,245 | 744,140 | ||||||||||
| TOTAL LOANS & LEASES / TOTAL DEPOSITS | |||||||||||||
| Quad City Bank and Trust (1) | 86 | % | 106 | % | 88 | % | |||||||
| Cedar Rapids Bank and Trust | 98 | % | 98 | % | 106 | % | |||||||
| Community State Bank | 92 | % | 92 | % | 90 | % | |||||||
| Guaranty Bank | 102 | % | 106 | % | 134 | % | |||||||
| TOTAL LOANS & LEASES / TOTAL ASSETS | |||||||||||||
| Quad City Bank and Trust (1) | 73 | % | 79 | % | 77 | % | |||||||
| Cedar Rapids Bank and Trust | 75 | % | 75 | % | 76 | % | |||||||
| Community State Bank | 77 | % | 76 | % | 77 | % | |||||||
| Guaranty Bank | 79 | % | 78 | % | 78 | % | |||||||
| ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES | |||||||||||||
| Quad City Bank and Trust (1) | 1.41 | % | 1.46 | % | 1.69 | % | |||||||
| m2 Equipment Finance, LLC | 3.13 | % | 3.11 | % | 3.31 | % | |||||||
| Cedar Rapids Bank and Trust | 1.50 | % | 1.49 | % | 1.61 | % | |||||||
| Community State Bank | 1.38 | % | 1.38 | % | 1.55 | % | |||||||
| Guaranty Bank | 1.29 | % | 1.37 | % | 1.11 | % | |||||||
| RETURN ON AVERAGE ASSETS | |||||||||||||
| Quad City Bank and Trust (1) | 1.23 | % | 1.36 | % | 1.86 | % | |||||||
| Cedar Rapids Bank and Trust | 3.07 | % | 2.73 | % | 2.25 | % | |||||||
| Community State Bank | 1.49 | % | 1.75 | % | 1.42 | % | |||||||
| Guaranty Bank | 1.02 | % | 2.06 | % | 1.40 | % | |||||||
| NET INTEREST MARGIN PERCENTAGE (3) | |||||||||||||
| Quad City Bank and Trust (1) | 3.44 | % | 3.56 | % | 3.50 | % | |||||||
| Cedar Rapids Bank and Trust (4) | 4.03 | % | 4.37 | % | 3.60 | % | |||||||
| Community State Bank (5) | 3.99 | % | 4.06 | % | 3.62 | % | |||||||
| Guaranty Bank (6) | 3.49 | % | 4.58 | % | 3.38 | % | |||||||
| ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET | |||||||||||||
| INTEREST MARGIN, NET | |||||||||||||
| Cedar Rapids Bank and Trust | $ | (8 | ) | $ | 98 | $ | 51 | ||||||
| Community State Bank | 71 | 505 | 33 | ||||||||||
| Guaranty Bank | 797 | 5,118 | 69 | ||||||||||
| QCR Holdings, Inc. (7) | (32 | ) | (33 | ) | (35 | ) | |||||||
| (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) | 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. | ||||||||||||
| (3) | Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. | ||||||||||||
| (4) | 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 4.03% for the quarter ended March 31, 2023, 4.28% for the quarter ended December 31, 2022 and 3.54% for the quarter ended March 31, 2022. | ||||||||||||
| (5) | Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.99% for the quarter ended March 31, 2023, 3.73% for the quarter ended December 31, 2022 and 3.62% for the quarter ended March 31, 2022. | ||||||||||||
| (6) | Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.39% for the quarter ended March 31, 2023, 3.58% for the quarter ended December 31, 2022 and 3.41% for the quarter ended March 31, 2022. | ||||||||||||
| (7) | Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013. | ||||||||||||
| QCR Holding, Inc. | |||||||||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| As of | |||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||
| GAAP TO NON-GAAP RECONCILIATIONS | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||||
| TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1) | |||||||||||||||||||||
| Stockholders' equity (GAAP) | $ | 801,494 | $ | 772,724 | $ | 737,072 | $ | 743,138 | $ | 667,924 | |||||||||||
| Less: Intangible assets | 154,467 | 154,366 | 155,153 | 155,940 | 82,922 | ||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 647,027 | $ | 618,358 | $ | 581,919 | $ | 587,198 | $ | 585,002 | |||||||||||
| Total assets (GAAP) | $ | 8,036,904 | $ | 7,948,837 | $ | 7,730,049 | $ | 7,392,941 | $ | 6,175,819 | |||||||||||
| Less: Intangible assets | 154,467 | 154,366 | 155,153 | 155,940 | 82,922 | ||||||||||||||||
| Tangible assets (non-GAAP) | $ | 7,882,437 | $ | 7,794,471 | $ | 7,574,896 | $ | 7,237,001 | $ | 6,092,897 | |||||||||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 8.21 | % | 7.93 | % | 7.68 | % | 8.11 | % | 9.60 | % | |||||||||||
| (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 | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||
| ADJUSTED NET INCOME (1) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||||
| Net income (GAAP) | $ | 27,157 | $ | 30,906 | $ | 29,294 | $ | 15,242 | $ | 23,624 | |||||||||||
| Less non-core items (post-tax) (2): | |||||||||||||||||||||
| Income: | |||||||||||||||||||||
| Securities losses, net | (366 | ) | - | - | - | - | |||||||||||||||
| Fair value gain (loss) on derivatives, net | (337 | ) | (211 | ) | 714 | 342 | 715 | ||||||||||||||
| Total non-core income (non-GAAP) | $ | (703 | ) | $ | (211 | ) | $ | 714 | $ | 342 | $ | 715 | |||||||||
| Expense: | |||||||||||||||||||||
| Acquisition costs (2) | - | (517 | ) | 321 | 1,932 | 1,462 | |||||||||||||||
| Post-acquisition compensation, transition and integration costs | 164 | 529 | 48 | 3,789 | - | ||||||||||||||||
| 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 | $ | 15,512 | $ | 1,462 | |||||||||||
| Adjusted net income (non-GAAP) (1) | $ | 28,024 | $ | 31,129 | $ | 28,949 | $ | 30,412 | $ | 24,371 | |||||||||||
| ADJUSTED EARNINGS PER COMMON SHARE (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP) (from above) | $ | 28,024 | $ | 31,129 | $ | 28,949 | $ | 30,412 | $ | 24,371 | |||||||||||
| Weighted average common shares outstanding | 16,776,289 | 16,855,973 | 16,900,968 | 17,345,324 | 15,625,112 | ||||||||||||||||
| Weighted average common and common equivalent shares outstanding | 16,942,132 | 17,047,976 | 17,110,691 | 17,549,107 | 15,852,256 | ||||||||||||||||
| Adjusted earnings per common share (non-GAAP): | |||||||||||||||||||||
| Basic | $ | 1.67 | $ | 1.85 | $ | 1.71 | $ | 1.75 | $ | 1.56 | |||||||||||
| Diluted | $ | 1.65 | $ | 1.83 | $ | 1.69 | $ | 1.73 | $ | 1.54 | |||||||||||
| ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP) (from above) | $ | 28,024 | $ | 31,129 | $ | 28,949 | $ | 30,412 | $ | 24,371 | |||||||||||
| Average Assets | $ | 7,906,830 | $ | 7,800,229 | $ | 7,652,463 | $ | 7,324,470 | $ | 6,115,127 | |||||||||||
| Adjusted return on average assets (annualized) (non-GAAP) | 1.42 | % | 1.60 | % | 1.51 | % | 1.66 | % | 1.59 | % | |||||||||||
| Adjusted return on average equity (annualized) (non-GAAP) | 14.11 | % | 16.44 | % | 15.21 | % | 15.43 | % | 14.25 | % | |||||||||||
| NET INTEREST MARGIN (TEY) (4) | |||||||||||||||||||||
| Net interest income (GAAP) | $ | 56,810 | $ | 65,218 | $ | 60,769 | $ | 59,400 | $ | 45,733 | |||||||||||
| Plus: Tax equivalent adjustment (5) | 6,057 | 5,554 | 4,459 | 3,396 | 2,933 | ||||||||||||||||
| Net interest income - tax equivalent (Non-GAAP) | $ | 62,867 | $ | 70,772 | $ | 65,228 | $ | 62,796 | $ | 48,666 | |||||||||||
| Less: Acquisition accounting net accretion | 828 | 5,688 | 1,080 | 1,695 | 118 | ||||||||||||||||
| Adjusted net interest income | $ | 62,039 | $ | 65,084 | $ | 64,148 | $ | 61,101 | $ | 48,548 | |||||||||||
| Average earning assets | $ | 7,247,605 | $ | 7,148,578 | $ | 6,975,857 | $ | 6,742,095 | $ | 5,625,813 | |||||||||||
| Net interest margin (GAAP) | 3.18 | % | 3.62 | % | 3.46 | % | 3.53 | % | 3.30 | % | |||||||||||
| Net interest margin (TEY) (Non-GAAP) | 3.52 | % | 3.93 | % | 3.71 | % | 3.74 | % | 3.50 | % | |||||||||||
| Adjusted net interest margin (TEY) (Non-GAAP) | 3.47 | % | 3.61 | % | 3.65 | % | 3.64 | % | 3.50 | % | |||||||||||
| EFFICIENCY RATIO (6) | |||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 48,785 | $ | 49,697 | $ | 47,746 | $ | 54,248 | $ | 38,325 | |||||||||||
| Net interest income (GAAP) | $ | 56,810 | $ | 65,218 | $ | 60,769 | $ | 59,400 | $ | 45,733 | |||||||||||
| Noninterest income (GAAP) | 25,842 | 21,219 | 21,095 | 22,782 | 15,633 | ||||||||||||||||
| Total income | $ | 82,652 | $ | 86,437 | $ | 81,864 | $ | 82,182 | $ | 61,366 | |||||||||||
| Efficiency ratio (noninterest expense/total income) (Non-GAAP) | 59.02 | % | 57.50 | % | 58.32 | % | 66.01 | % | 62.45 | % | |||||||||||
| (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 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, 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 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 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. | |||||||||||||||||||||
