8-K
QCR HOLDINGS INC (QCRH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of Report (Date of earliest event
Reported): July 24, 2024
QCR Holdings, Inc.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 0-22208 | 42-1397595 |
|---|---|---|
| (State or Other Jurisdiction of<br><br> Incorporation) | (Commission File Number) | (I.R.S. Employer Identification<br><br>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<br>to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to<br>Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications<br>pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications<br>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<br> of each class | Trading<br> Symbol(s) | Name of each exchange on<br> 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 July 24, 2024, QCR Holdings, Inc. (the “Company”) issued a press release disclosing financial results for the quarter ended June 30, 2024. 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 July 24, 2024. |
|---|---|
| 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: July 24, 2024 | By: | /s/ Todd A.<br> Gipple |
| Todd A. Gipple | ||
| President and Chief Financial Officer |
Exhibit 99.1
| PRESS RELEASE | FOR IMMEDIATE RELEASE |
|---|
QCR Holdings, Inc.Announces Net Income of $29.1 Million
for the SecondQuarter of 2024
Second Quarter 2024 Highlights
| · | Net income of $29.1 million, or $1.72 per diluted share |
|---|---|
| · | Net interest income up $1.5 million, or nearly 3% from the prior quarter, an 11% annualized growth rate |
| --- | --- |
| · | Adjusted NIM (TEY)(non-GAAP) expanded by 2 basis points from the prior quarter |
| --- | --- |
| · | Noninterest income up $4.0 million, or 15% from the prior quarter |
| --- | --- |
| · | Continued strong capital markets revenue of $17.8 million |
| --- | --- |
| · | Well-controlled noninterest expenses of $49.9 million, down $0.8 million, or nearly 2% from the prior quarter |
| --- | --- |
| · | Tangible book value (non-GAAP) per share growth of $1.72, or 15% annualized |
| --- | --- |
Moline, IL, July 24, 2024 – QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced quarterly net income of $29.1 million and diluted earnings per share (“EPS”) of $1.72 for the second quarter of 2024, compared to net income of $26.7 million and diluted EPS of $1.58 for the first quarter of 2024.
Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the second quarter of 2024 were $29.3 million and $1.73, respectively. For the first quarter of 2024, adjusted net income (non-GAAP) was $26.9 million and adjusted diluted EPS (non-GAAP) was $1.59. For the second quarter of 2023, both net income and adjusted net income (non-GAAP) were $28.4 million, and both diluted EPS and adjusted diluted EPS (non-GAAP) were $1.69.
| For the<br> Quarter Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | ||||
| $ in millions (except per share data) | 2024 | 2024 | 2023 | |||
| Net Income | $ | 29.1 | $ | 26.7 | $ | 28.4 |
| Diluted EPS | $ | 1.72 | $ | 1.58 | $ | 1.69 |
| Adjusted Net Income (non-GAAP)* | $ | 29.3 | $ | 26.9 | $ | 28.4 |
| Adjusted Diluted EPS (non-GAAP)* | $ | 1.73 | $ | 1.59 | $ | 1.69 |
*Adjusted non-GAAP measurements of financial performance excludenon-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operationof the Company’s business. The Company believes these adjusted measurements provide a better comparison for analysis and may providea better indicator of future performance. See GAAP to non-GAAP reconciliations.
“We delivered outstanding second quarter results, highlighted by expanded net interest margin and growth in net interest income. We also had another quarter of strong capital markets revenue and well-controlled expenses,” said Larry J. Helling, Chief Executive Officer. “In addition, we maintained our excellent asset quality and further strengthened our capital levels.”
Net Interest Income Grew 3% and MarginExpanded
Net interest income for the second quarter of 2024 totaled $56.2 million, an increase of $1.5 million from the first quarter of 2024, driven by an expanded margin and strong loan growth. Loan discount accretion was $268 thousand during the second quarter, a decrease of $95 thousand from the prior quarter.
Net interest margin (“NIM”) was 2.82% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.27% for the second quarter, as compared to 2.82% and 3.25% for the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.26%, represented an increase of 2 basis points from 3.24% for the first quarter of 2024.
“Our adjusted NIM, on a tax equivalent yield basis, expanded by 2 basis points from the first quarter to 3.26% and was at the upper end of our guidance range,” said Todd A. Gipple, President and Chief Financial Officer. “The increase was due to a combination of higher loan yields and moderating deposit costs. Notably, the shift in our deposit composition has stabilized as our noninterest-bearing deposits remained steady combined with modest changes in our interest-bearing and core time deposits. Looking ahead, we anticipate further growth in net interest income and are guiding to a third quarter adjusted NIM TEY (non-GAAP) in a range of static to up 5 basis points.”
Strong Noninterest Income Including $17.8 Millionof Capital Markets Revenue
Noninterest income for the second quarter of 2024 totaled $30.9 million, up from $26.9 million in the first quarter of 2024. The Company generated $17.8 million of capital markets revenue in the quarter, as compared to $16.5 million in the prior quarter. Wealth management revenue was $4.3 million for the quarter, a slight increase from the first quarter of 2024 and up just over 26% on an annualized basis year-to-date. Additionally, the Company realized income of $2.2 million from bank owned life insurance policy proceeds received during the second quarter of 2024.
“Our capital markets revenue was strong again in the second quarter as our low-income housing tax credit (“LIHTC”) lending and revenue from swap fees continues to benefit from the strong demand for affordable housing,” added Mr. Gipple. “Our LIHTC lending and capital markets revenue pipelines remain healthy. In addition, our wealth management business is wellpositioned for further growth as we continue to add new clients and expand geographically into our Southwest Missouri and Central Iowa markets.”
Well-Controlled Noninterest Expenses of $49.9Million
Noninterest expense for the second quarter of 2024 totaled $49.9 million, compared to $50.7 million for the first quarter and $49.7 million for the second quarter of 2023. The linked-quarter decrease was primarily due to lower salaries and employee benefits and lower loan/lease expense, partially offset by higher professional and data processing expense. This created positive operating leverage and contributed to a 500 basis point reduction in the Company’s efficiency ratio (non-GAAP) which improved to 57% in the second quarter.
Solid Deposit Levels
During the second quarter of 2024, the Company’s total deposits decreased modestly by $42.1 million, or less than 1%, to $6.8 billion. “Year-to-date, we have grown total deposits by $250.7 million, or 7.7% on an annualized basis, reflecting our ongoing commitment to expanding our market share and establishing new relationships within the communities we serve,” added Mr. Helling.
Total uninsured and uncollateralized deposits remain very low at 18% of total deposits as of the end of the second quarter of 2024, as compared to 20% as of the end of the first quarter of 2024. The Company maintained approximately $3.1 billion of available liquidity sources as of June 30, 2024, which included $1.2 billion of immediately available liquidity.
Continued Loan Growth
During the second quarter of 2024, the Company’s total loans and leases grew $206.1 million to $6.9 billion. At quarter end, the Company held $243.2 million of LIHTC loans as loans held for sale in anticipation of the Company’s next loan securitization.
“Our year-to-date total loan growth is 9.5% annualized, which is within our annual target range of 8% to 10%. Year-to-date loan growth, net of loans identified for securitization, stands at 2.1% annualized,” added Mr. Helling. “Given our current pipeline and the ongoing strength of our markets, we are maintaining our loan growth target for the full year 2024 of 8% to 10%, prior to the loan securitizations that we have planned for the year.”
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Asset Quality Remains Excellent
The Company’s nonperforming assets (“NPAs”) to total assets ratio was 0.39% on June 30, 2024, increasing modestly from 0.36% on March 31, 2024. NPAs totaled $34.5 million at the end of the second quarter of 2024, a $3.2 million increase from the prior quarter.
Notably, as a leading indicator of asset quality, the Company's total criticized loans were down by $17.1 million on a linked-quarter basis, and the ratio of criticized loans to total loans and leases as of June 30, 2024 improved to 2.41%, as compared to 2.75% as of March 31, 2024.
The Company recorded a total provision for credit losses of $5.5 million during the quarter with $4.3 million related to credit loss expense for loans and $1.2 million related to unfunded commitments. Charge-offs were down significantly in the second quarter of 2024 at $1.8 million, a decrease of $1.8 million, or 50% from the prior quarter.
The increased provision during the quarter was due to strong loan growth and the impact of declining GDP on the Company’s CECL model factors. The increased provision combined with the sharp reduction in charge-offs resulted in an allowance for credit losses to total loans held for investment that was static quarter over quarter at 1.33%.
Continued Strong Capital Levels
As of June 30, 2024, the Company’s total risk-based capital ratio increased to 14.33%, the common equity tier 1 ratio increased to 10.00% and the tangible common equity to tangible assets ratio (“TCE”) (non-GAAP) increased to 9.00%. By comparison, these ratios were 14.30%, 9.91% and 8.94%, respectively, as of March 31, 2024. The Company remains focused on growing capital and targeting TCE (non-GAAP) in the top quartile of its peer group.
The Company’s tangible book value per share (non-GAAP) increased by $1.72, or 15.3% annualized, during the second quarter of 2024. The change in accumulated other comprehensive income was negligible as of the end of the second quarter when comparing to the prior quarter of 2024. Tangible book value per share has grown by $6.66 since June 30, 2023, for an annualized growth rate of nearly 17%. The combination of strong earnings and a modest dividend primarily contributed to the improvement in tangible book value per share (non-GAAP).
Conference Call Details
The Company will host an earnings call/webcast tomorrow, July 25, 2024, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through August 1, 2024. The replay access information is 877-344-7529 (international 412-317-0088); access code 8771212. 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 in 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 Waukesha, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2024, the Company had $8.9 billion in assets, $6.9 billion in loans and $6.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.
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Special Note Concerning Forward-LookingStatements. 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 basedupon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, aregenerally 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 thisdocument, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation toupdate any statement in light of new information or future events.
A number of factors, many of which are beyond the ability ofthe 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 internationaleconomies(including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any futureterrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the ongoingIsraeli-Palestinian conflict and the Russian invasion of Ukraine), or other adverse external events that could cause economicdeterioration or instability in credit markets, and the response of the local, state and national governments to any such adverseexternal events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatoryagencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board; (iv) changes in local,state and federal laws, regulations and governmental policies concerning the Company’s general business as a result of theupcoming 2024 presidential election or any changes in response to failures of other banks; (vi) increased competition in thefinancial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and theinability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliableelectronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits ofacquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives oremployees; (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) fluctuationsin the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans tocertain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients whohave balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversity theirexposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our informationtechnology and communications systems or third-party servicers; (xviii) breaches or failures of our information securitycontrols or cybersecurity-related incidents, and (xixi) the ability of the Company to manage the risks associated with the foregoingas well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and unduereliance should not be placed on such statements. Additional information concerning the Company and its business, includingadditional factors that could materially affect the Company’s financial results, is included in the Company’s filingswith the Securities and Exchange Commission.
Contact:
Todd A. Gipple
President
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com
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QCR Holding, Inc.
Consolidated FinancialHighlights
(Unaudited)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||
| (dollars in thousands) | |||||||||||||||
| CONDENSED BALANCE SHEET | |||||||||||||||
| Cash and due from banks | $ | 92,173 | $ | 80,988 | $ | 97,123 | $ | 104,265 | $ | 84,084 | |||||
| Federal funds sold and interest-bearing deposits | 102,262 | 77,020 | 140,369 | 80,650 | 175,012 | ||||||||||
| Securities, net of allowance for credit losses | 1,033,199 | 1,031,861 | 1,005,528 | 896,394 | 882,888 | ||||||||||
| Loans receivable held for sale (1) | 246,124 | 275,344 | 2,594 | 278,893 | 295,057 | ||||||||||
| Loans/leases receivable held for investment | 6,608,262 | 6,372,992 | 6,540,822 | 6,327,414 | 6,084,263 | ||||||||||
| Allowance for credit losses | (87,706 | ) | (84,470 | ) | (87,200 | ) | (87,669 | ) | (85,797 | ) | |||||
| Intangibles | 12,441 | 13,131 | 13,821 | 14,537 | 15,228 | ||||||||||
| Goodwill | 139,027 | 139,027 | 139,027 | 139,027 | 139,027 | ||||||||||
| Derivatives | 194,354 | 183,888 | 188,978 | 291,295 | 170,294 | ||||||||||
| Other assets | 531,855 | 509,768 | 497,832 | 495,251 | 466,617 | ||||||||||
| Total assets | $ | 8,871,991 | $ | 8,599,549 | $ | 8,538,894 | $ | 8,540,057 | $ | 8,226,673 | |||||
| Total deposits | $ | 6,764,667 | $ | 6,806,775 | $ | 6,514,005 | $ | 6,494,852 | $ | 6,606,720 | |||||
| Total borrowings | 768,671 | 489,633 | 718,295 | 712,126 | 418,368 | ||||||||||
| Derivatives | 221,798 | 211,677 | 214,098 | 320,220 | 195,841 | ||||||||||
| Other liabilities | 180,536 | 184,122 | 205,900 | 184,476 | 183,055 | ||||||||||
| Total stockholders' equity | 936,319 | 907,342 | 886,596 | 828,383 | 822,689 | ||||||||||
| Total liabilities<br> and stockholders' equity | $ | 8,871,991 | $ | 8,599,549 | $ | 8,538,894 | $ | 8,540,057 | $ | 8,226,673 | |||||
| ANALYSIS OF LOAN PORTFOLIO | |||||||||||||||
| Loan/lease mix: (2) | |||||||||||||||
| Commercial and industrial - revolving | $ | 362,115 | $ | 326,129 | $ | 325,243 | $ | 299,588 | $ | 304,617 | |||||
| Commercial and industrial - other | 1,370,561 | 1,374,333 | 1,390,068 | 1,381,967 | 1,308,853 | ||||||||||
| Commercial and industrial<br> - other - LIHTC | 92,637 | 96,276 | 91,710 | 105,601 | 93,700 | ||||||||||
| Total commercial and industrial | 1,825,313 | 1,796,738 | 1,807,021 | 1,787,156 | 1,707,170 | ||||||||||
| Commercial real estate, owner occupied | 633,596 | 621,069 | 607,365 | 610,618 | 609,717 | ||||||||||
| Commercial real estate, non-owner occupied | 1,082,457 | 1,055,089 | 1,008,892 | 955,552 | 963,814 | ||||||||||
| Construction and land development | 331,454 | 410,918 | 477,424 | 472,695 | 437,682 | ||||||||||
| Construction and land development - LIHTC | 750,894 | 738,609 | 943,101 | 921,359 | 870,084 | ||||||||||
| Multi-family | 329,239 | 296,245 | 284,721 | 282,541 | 280,418 | ||||||||||
| Multi-family - LIHTC | 1,148,244 | 1,007,321 | 711,422 | 874,439 | 820,376 | ||||||||||
| Direct financing leases | 25,808 | 28,089 | 31,164 | 34,401 | 32,937 | ||||||||||
| 1-4 family real estate | 583,542 | 563,358 | 544,971 | 539,931 | 535,405 | ||||||||||
| Consumer | 143,839 | 130,900 | 127,335 | 127,615 | 121,717 | ||||||||||
| Total loans/leases | $ | 6,854,386 | $ | 6,648,336 | $ | 6,543,416 | $ | 6,606,307 | $ | 6,379,320 | |||||
| Less allowance for<br> credit losses | 87,706 | 84,470 | 87,200 | 87,669 | 85,797 | ||||||||||
| Net loans/leases | $ | 6,766,680 | $ | 6,563,866 | $ | 6,456,216 | $ | 6,518,638 | $ | 6,293,523 | |||||
| ANALYSIS OF SECURITIES PORTFOLIO | |||||||||||||||
| Securities mix: | |||||||||||||||
| U.S. government sponsored agency securities | $ | 20,101 | $ | 14,442 | $ | 14,973 | $ | 16,002 | $ | 18,942 | |||||
| Municipal securities | 885,046 | 884,469 | 853,645 | 764,017 | 743,608 | ||||||||||
| Residential mortgage-backed and related<br> securities | 54,708 | 56,071 | 59,196 | 57,946 | 60,958 | ||||||||||
| Asset backed securities | 12,721 | 14,285 | 15,423 | 16,326 | 17,393 | ||||||||||
| Other securities | 38,464 | 40,539 | 41,115 | 43,272 | 43,156 | ||||||||||
| Trading securities | 22,362 | 22,258 | 22,368 | - | - | ||||||||||
| Total securities (3) | $ | 1,033,402 | $ | 1,032,064 | $ | 1,006,720 | $ | 897,563 | $ | 884,057 | |||||
| Less allowance for<br> credit losses | 203 | 203 | 1,192 | 1,169 | 1,169 | ||||||||||
| Net securities | $ | 1,033,199 | $ | 1,031,861 | $ | 1,005,528 | $ | 896,394 | $ | 882,888 | |||||
| ANALYSIS OF DEPOSITS | |||||||||||||||
| Deposit mix: | |||||||||||||||
| Noninterest-bearing demand deposits | $ | 956,445 | $ | 955,167 | $ | 1,038,689 | $ | 1,027,791 | $ | 1,101,605 | |||||
| Interest-bearing demand deposits | 4,644,918 | 4,714,555 | 4,338,390 | 4,416,725 | 4,374,847 | ||||||||||
| Time deposits | 859,593 | 875,491 | 851,950 | 788,692 | 765,801 | ||||||||||
| Brokered deposits | 303,711 | 261,562 | 284,976 | 261,644 | 364,467 | ||||||||||
| Total deposits | $ | 6,764,667 | $ | 6,806,775 | $ | 6,514,005 | $ | 6,494,852 | $ | 6,606,720 | |||||
| ANALYSIS OF BORROWINGS | |||||||||||||||
| Borrowings mix: | |||||||||||||||
| Term FHLB advances | $ | 135,000 | $ | 135,000 | $ | 135,000 | $ | 135,000 | $ | 135,000 | |||||
| Overnight FHLB advances | 350,000 | 70,000 | 300,000 | 295,000 | - | ||||||||||
| Other short-term borrowings | 1,600 | 2,700 | 1,500 | 470 | 1,850 | ||||||||||
| Subordinated notes | 233,276 | 233,170 | 233,064 | 232,958 | 232,852 | ||||||||||
| Junior subordinated<br> debentures | 48,795 | 48,763 | 48,731 | 48,698 | 48,666 | ||||||||||
| Total borrowings | $ | 768,671 | $ | 489,633 | $ | 718,295 | $ | 712,126 | $ | 418,368 | |||||
| (1) | Loans with a fair value<br> of $243.2 million, $274.8 million, $278.0 million and $291.0 million have been identified<br> for securitization and are included in LHFS at June 30, 2024, March 31, 2024, September 30,<br> 2023 and June 30, 2023 respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Loan categories with<br> significant LIHTC loan balances have been broken out separately. Total LIHTC balances<br> within the loan/lease portfolio were $2.0 billion at June 30, 2024. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | As of June 30, 2024,<br> March 31, 2024 and December 31, 2023, trading securities consisted of retained<br> beneficial interests acquired in conjunction with Freddie Mac securitizations completed by<br> the Company in 2023. | ||||||||||||||
| --- | --- |
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QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| For the<br> Quarter Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||
| (dollars in thousands, except per share<br> data) | |||||||||||||
| INCOME STATEMENT | |||||||||||||
| Interest income | $ | 119,746 | $ | 115,049 | $ | 112,248 | $ | 108,568 | $ | 98,377 | |||
| Interest expense | 63,583 | 60,350 | 56,512 | 53,313 | 45,172 | ||||||||
| Net interest income | 56,163 | 54,699 | 55,736 | 55,255 | 53,205 | ||||||||
| Provision for credit losses | 5,496 | 2,969 | 5,199 | 3,806 | 3,606 | ||||||||
| Net interest income after provision<br> for credit losses | $ | 50,667 | $ | 51,730 | $ | 50,537 | $ | 51,449 | $ | 49,599 | |||
| Trust fees | $ | 3,103 | $ | 3,199 | $ | 3,084 | $ | 2,863 | $ | 2,844 | |||
| Investment advisory and management fees | 1,214 | 1,101 | 1,052 | 947 | 986 | ||||||||
| Deposit service fees | 1,986 | 2,022 | 2,008 | 2,107 | 2,034 | ||||||||
| Gains on sales of residential real estate loans, net | 540 | 382 | 323 | 476 | 500 | ||||||||
| Gains on sales of government guaranteed portions of loans,<br> net | 12 | 24 | 24 | - | - | ||||||||
| Capital markets revenue | 17,758 | 16,457 | 36,956 | 15,596 | 22,490 | ||||||||
| Securities gains, net | - | - | - | - | 12 | ||||||||
| Earnings on bank-owned life insurance | 2,964 | 868 | 832 | 1,807 | 838 | ||||||||
| Debit card fees | 1,571 | 1,466 | 1,561 | 1,584 | 1,589 | ||||||||
| Correspondent banking fees | 510 | 512 | 465 | 450 | 356 | ||||||||
| Loan related fee income | 962 | 836 | 845 | 800 | 770 | ||||||||
| Fair value gain (loss) on derivatives and trading securities | 51 | (163 | ) | (582 | ) | (336 | ) | 83 | |||||
| Other | 218 | 154 | 1,161 | 299 | 18 | ||||||||
| Total noninterest income | $ | 30,889 | $ | 26,858 | $ | 47,729 | $ | 26,593 | $ | 32,520 | |||
| Salaries and employee benefits | $ | 31,079 | $ | 31,860 | $ | 41,059 | $ | 32,098 | $ | 31,459 | |||
| Occupancy and equipment expense | 6,377 | 6,514 | 6,789 | 6,228 | 6,100 | ||||||||
| Professional and data processing fees | 4,823 | 4,613 | 4,223 | 4,456 | 4,078 | ||||||||
| FDIC insurance, other insurance and regulatory fees | 1,854 | 1,945 | 2,115 | 1,721 | 1,927 | ||||||||
| Loan/lease expense | 151 | 378 | 834 | 826 | 652 | ||||||||
| Net cost of (income from) and gains/losses on operations of<br> other real estate | 28 | (30 | ) | 38 | 3 | - | |||||||
| Advertising and marketing | 1,565 | 1,483 | 1,641 | 1,429 | 1,735 | ||||||||
| Communication and data connectivity | 318 | 401 | 449 | 478 | 471 | ||||||||
| Supplies | 259 | 275 | 333 | 335 | 281 | ||||||||
| Bank service charges | 622 | 568 | 761 | 605 | 621 | ||||||||
| Correspondent banking expense | 363 | 305 | 300 | 232 | 221 | ||||||||
| Intangibles amortization | 690 | 690 | 716 | 691 | 765 | ||||||||
| Payment card processing | 706 | 646 | 836 | 733 | 542 | ||||||||
| Trust expense | 379 | 425 | 413 | 432 | 337 | ||||||||
| Other | 674 | 617 | 431 | 814 | 538 | ||||||||
| Total noninterest expense | $ | 49,888 | $ | 50,690 | $ | 60,938 | $ | 51,081 | $ | 49,727 | |||
| Net income before income taxes | $ | 31,668 | $ | 27,898 | $ | 37,328 | $ | 26,961 | $ | 32,392 | |||
| Federal and state income tax expense | 2,554 | 1,172 | 4,473 | 1,840 | 3,967 | ||||||||
| Net income | $ | 29,114 | $ | 26,726 | $ | 32,855 | $ | 25,121 | $ | 28,425 | |||
| Basic EPS | $ | 1.73 | $ | 1.59 | $ | 1.96 | $ | 1.50 | $ | 1.70 | |||
| Diluted EPS | $ | 1.72 | $ | 1.58 | $ | 1.95 | $ | 1.49 | $ | 1.69 | |||
| Weighted average common shares outstanding | 16,814,814 | 16,783,348 | 16,734,080 | 16,717,303 | 16,701,950 | ||||||||
| Weighted average common and common equivalent shares outstanding | 16,921,854 | 16,910,675 | 16,875,952 | 16,847,951 | 16,799,527 |
6
QCR Holding, Inc.
Consolidated FinancialHighlights
(Unaudited)
| For the<br> Six Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | June 30, | |||||
| 2024 | 2023 | |||||
| (dollars in thousands, except per share<br> data) | ||||||
| INCOME STATEMENT | ||||||
| Interest income | $ | 234,795 | $ | 192,594 | ||
| Interest expense | 123,933 | 82,579 | ||||
| Net interest income | 110,862 | 110,015 | ||||
| Provision for credit losses | 8,465 | 7,534 | ||||
| Net interest income after provision<br> for credit losses | $ | 102,397 | $ | 102,481 | ||
| Trust fees | $ | 6,302 | $ | 5,750 | ||
| Investment advisory and management fees | 2,315 | 1,865 | ||||
| Deposit service fees | 4,008 | 4,062 | ||||
| Gains on sales of residential real estate loans, net | 922 | 812 | ||||
| Gains on sales of government guaranteed portions of loans,<br> net | 36 | 30 | ||||
| Capital markets revenue | 34,215 | 39,513 | ||||
| Securities losses, net | - | (451 | ) | |||
| Earnings on bank-owned life insurance | 3,832 | 1,545 | ||||
| Debit card fees | 3,037 | 3,055 | ||||
| Correspondent banking fees | 1,022 | 747 | ||||
| Loan related fee income | 1,798 | 1,421 | ||||
| Fair value loss on derivatives and trading securities | (112 | ) | (344 | ) | ||
| Other | 372 | 357 | ||||
| Total noninterest income | $ | 57,747 | $ | 58,362 | ||
| Salaries and employee benefits | $ | 62,939 | $ | 63,462 | ||
| Occupancy and equipment expense | 12,891 | 12,014 | ||||
| Professional and data processing fees | 9,436 | 7,592 | ||||
| Post-acquisition compensation, transition and integration<br> costs | - | 207 | ||||
| FDIC insurance, other insurance and regulatory fees | 3,799 | 3,301 | ||||
| Loan/lease expense | 529 | 1,208 | ||||
| Net cost of (income from) and gains/losses on operations of<br> other real estate | (2 | ) | (67 | ) | ||
| Advertising and marketing | 3,048 | 2,972 | ||||
| Communication and data connectivity | 719 | 1,136 | ||||
| Supplies | 534 | 586 | ||||
| Bank service charges | 1,190 | 1,226 | ||||
| Correspondent banking expense | 668 | 431 | ||||
| Intangibles amortization | 1,380 | 1,531 | ||||
| Payment card processing | 1,352 | 1,087 | ||||
| Trust expense | 804 | 551 | ||||
| Other | 1,291 | 1,275 | ||||
| Total noninterest expense | $ | 100,578 | $ | 98,512 | ||
| Net income before income taxes | $ | 59,566 | $ | 62,331 | ||
| Federal and state income tax expense | 3,726 | 6,749 | ||||
| Net income | $ | 55,840 | $ | 55,582 | ||
| Basic EPS | $ | 3.32 | $ | 3.32 | ||
| Diluted EPS | $ | 3.30 | $ | 3.29 | ||
| Weighted average common shares outstanding | 16,799,081 | 16,739,120 | ||||
| Weighted average common and common equivalent shares outstanding | 16,916,264 | 16,870,830 |
7
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| As<br> of and for the Quarter Ended | For<br> the Six Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | |||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||
| (dollars<br> in thousands, except per share data) | |||||||||||||||||||||
| COMMON SHARE DATA | |||||||||||||||||||||
| Common shares outstanding | 16,824,985 | 16,807,056 | 16,749,254 | 16,731,646 | 16,713,853 | ||||||||||||||||
| Book value per common share (1) | $ | 55.65 | $ | 53.99 | $ | 52.93 | $ | 49.51 | $ | 49.22 | |||||||||||
| Tangible book value per common share (Non-GAAP)<br> (2) | $ | 46.65 | $ | 44.93 | $ | 43.81 | $ | 40.33 | $ | 39.99 | |||||||||||
| Closing stock price | $ | 60.00 | $ | 60.74 | $ | 58.39 | $ | 48.52 | $ | 41.03 | |||||||||||
| Market capitalization | $ | 1,009,499 | $ | 1,020,861 | $ | 977,989 | $ | 811,819 | $ | 685,769 | |||||||||||
| Market price / book value | 107.82 | % | 112.51 | % | 100.31 | % | 98.00 | % | 83.36 | % | |||||||||||
| Market price / tangible book value | 128.62 | % | 135.18 | % | 133.29 | % | 120.30 | % | 102.59 | % | |||||||||||
| Earnings per common share (basic)<br> LTM (3) | $ | 6.78 | $ | 6.75 | $ | 6.78 | $ | 6.65 | $ | 6.89 | |||||||||||
| Price earnings ratio LTM (3) | 8.85<br> x | 9.00<br> x | 8.61<br> x | 7.30<br> x | 5.96<br> x | ||||||||||||||||
| TCE / TA (Non-GAAP) (4) | 9.00 | % | 8.94 | % | 8.75 | % | 8.05 | % | 8.28 | % | |||||||||||
| CONDENSED STATEMENT OF CHANGES<br> IN STOCKHOLDERS' EQUITY | |||||||||||||||||||||
| Beginning balance | $ | 907,342 | $ | 886,596 | $ | 828,383 | $ | 822,689 | $ | 801,494 | |||||||||||
| Net income | 29,114 | 26,726 | 32,855 | 25,121 | 28,425 | ||||||||||||||||
| Other comprehensive income (loss),<br> net of tax | (368 | ) | (5,373 | ) | 25,363 | (19,415 | ) | (6,336 | ) | ||||||||||||
| Common stock cash dividends declared | (1,008 | ) | (1,008 | ) | (1,004 | ) | (1,003 | ) | (1,003 | ) | |||||||||||
| Repurchase and cancellation of<br> shares of common stock as a result of a share repurchase program | - | - | - | - | (967 | ) | |||||||||||||||
| Other (5) | 1,239 | 401 | 999 | 991 | 1,076 | ||||||||||||||||
| Ending balance | $ | 936,319 | $ | 907,342 | $ | 886,596 | $ | 828,383 | $ | 822,689 | |||||||||||
| REGULATORY CAPITAL RATIOS<br> (6): | |||||||||||||||||||||
| Total risk-based capital ratio | 14.33 | % | 14.30 | % | 14.29 | % | 14.48 | % | 14.64 | % | |||||||||||
| Tier 1 risk-based capital ratio | 10.58 | % | 10.50 | % | 10.27 | % | 10.30 | % | 10.34 | % | |||||||||||
| Tier 1 leverage capital ratio | 10.41 | % | 10.33 | % | 10.03 | % | 9.92 | % | 10.06 | % | |||||||||||
| Common equity tier 1 ratio | 10.00 | % | 9.91 | % | 9.67 | % | 9.68 | % | 9.70 | % | |||||||||||
| KEY PERFORMANCE RATIOS AND<br> OTHER METRICS | |||||||||||||||||||||
| Return on average assets (annualized) | 1.34 | % | 1.25 | % | 1.53 | % | 1.21 | % | 1.44 | % | 1.30 | % | 1.42 | % | |||||||
| Return on average total equity<br> (annualized) | 12.72 | % | 11.83 | % | 15.35 | % | 11.95 | % | 13.97 | % | 12.32 | % | 13.91 | % | |||||||
| Net interest margin | 2.82 | % | 2.82 | % | 2.90 | % | 2.89 | % | 2.93 | % | 2.82 | % | 3.05 | % | |||||||
| Net interest margin (TEY) (Non-GAAP)(7) | 3.27 | % | 3.25 | % | 3.32 | % | 3.31 | % | 3.29 | % | 3.26 | % | 3.40 | % | |||||||
| Efficiency ratio (Non-GAAP) (8) | 57.31 | % | 62.15 | % | 58.90 | % | 62.41 | % | 58.01 | % | 59.65 | % | 58.51 | % | |||||||
| Gross loans/leases held for investment<br> / total assets | 74.48 | % | 74.11 | % | 76.60 | % | 74.09 | % | 73.96 | % | 74.48 | % | 77.54 | % | |||||||
| Gross loans/leases held for investment<br> / total deposits | 97.69 | % | 93.63 | % | 100.41 | % | 97.42 | % | 92.09 | % | 97.69 | % | 96.56 | % | |||||||
| Effective tax rate | 8.06 | % | 4.20 | % | 11.98 | % | 6.82 | % | 12.25 | % | 6.26 | % | 10.83 | % | |||||||
| Full-time equivalent employees<br> (9) | 988 | 986 | 996 | 987 | 1009 | 988 | 1009 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Assets | $ | 8,776,002 | $ | 8,550,855 | $ | 8,535,732 | $ | 8,287,813 | $ | 7,924,597 | $ | 8,663,429 | $ | 7,915,763 | |||||||
| Loans/leases | 6,779,075 | 6,598,614 | 6,483,572 | 6,476,512 | 6,219,980 | 6,688,844 | 6,192,700 | ||||||||||||||
| Deposits | 6,687,188 | 6,595,453 | 6,485,154 | 6,342,339 | 6,292,481 | 6,641,324 | 6,236,374 | ||||||||||||||
| Total stockholders' equity | 921,986 | 903,371 | 852,163 | 837,734 | 816,882 | 912,679 | 805,845 | ||||||||||||||
| (1) | Includes<br> accumulated other comprehensive income (loss). | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (2) | Includes<br> accumulated other comprehensive income (loss) and excludes intangible assets. See<br> GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (3) | LTM<br> : Last twelve months. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (4) | TCE<br> / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (5) | Includes<br> mostly common stock issued for options exercised and the employee stock purchase plan, as<br> well as stock-based compensation. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (6) | Ratios<br> for the current quarter are subject to change upon final calculation for regulatory filings<br> due after earnings release. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (7) | TEY<br> : Tax equivalent yield. See GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (8) | See<br> GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (9) | The<br> increase in full-time equivalent employees in the second quarter of 2023 and the subsequent<br> decline in the third quarter of 2023 includes 19 summer interns | ||||||||||||||||||||
| --- | --- |
8
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
ANALYSISOF NET INTEREST INCOME AND MARGIN
| For<br> the Quarter Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30,<br> 2024 | March 31,<br> 2024 | June 30,<br> 2023 | |||||||||||||||||||
| Average<br> Balance | Interest<br> Earned or Paid | Average<br> Yield or Cost | Average<br> Balance | Interest<br> Earned or Paid | Average<br> Yield or Cost | Average<br> Balance | Interest<br> Earned or Paid | Average<br> Yield or Cost | |||||||||||||
| (dollars<br> in thousands) | |||||||||||||||||||||
| Fed funds sold | $ | 13,065 | $ | 183 | 5.54 | % | $ | 19,955 | $ | 269 | 5.42 | % | $ | 16,976 | $ | 223 | 5.27 | % | |||
| Interest-bearing deposits at financial<br> institutions | 80,998 | 1,139 | 5.66 | % | 91,557 | 1,200 | 5.27 | % | 90,814 | 1,123 | 4.96 | % | |||||||||
| Investment securities - taxable | 377,747 | 4,286 | 4.53 | % | 373,540 | 4,261 | 4.55 | % | 342,991 | 3,693 | 4.30 | % | |||||||||
| Investment securities - nontaxable<br> (1) | 704,761 | 9,462 | 5.37 | % | 685,969 | 9,349 | 5.45 | % | 577,494 | 6,217 | 4.31 | % | |||||||||
| Restricted investment securities | 43,398 | 869 | 7.92 | % | 38,085 | 674 | 7.00 | % | 35,031 | 506 | 5.71 | % | |||||||||
| Loans (1) | 6,779,075 | 112,719 | 6.69 | % | 6,598,614 | 107,673 | 6.56 | % | 6,219,980 | 93,159 | 6.01 | % | |||||||||
| Total earning<br> assets (1) | $ | 7,999,044 | $ | 128,658 | 6.46 | % | $ | 7,807,720 | $ | 123,426 | 6.35 | % | $ | 7,283,286 | $ | 104,921 | 5.78 | % | |||
| Interest-bearing deposits | $ | 4,649,625 | $ | 40,924 | 3.54 | % | $ | 4,529,325 | $ | 39,072 | 3.47 | % | $ | 3,965,592 | $ | 27,227 | 2.75 | % | |||
| Time deposits | 1,091,870 | 12,128 | 4.47 | % | 1,107,622 | 12,345 | 4.48 | % | 1,190,440 | 11,219 | 3.78 | % | |||||||||
| Short-term borrowings | 1,622 | 21 | 5.18 | % | 1,763 | 23 | 5.16 | % | 1,980 | 34 | 6.82 | % | |||||||||
| Federal Home Loan Bank advances | 464,231 | 6,238 | 5.32 | % | 355,220 | 4,738 | 5.28 | % | 211,593 | 2,653 | 4.96 | % | |||||||||
| Subordinated debentures | 233,207 | 3,582 | 6.14 | % | 233,101 | 3,480 | 5.97 | % | 232,782 | 3,303 | 5.68 | % | |||||||||
| Junior subordinated<br> debentures | 48,774 | 688 | 5.58 | % | 48,742 | 692 | 5.62 | % | 48,647 | 738 | 6.00 | % | |||||||||
| Total interest-bearing<br> liabilities | $ | 6,489,329 | $ | 63,581 | 3.93 | % | $ | 6,275,773 | $ | 60,350 | 3.86 | % | $ | 5,651,034 | $ | 45,174 | 3.20 | % | |||
| Net interest income (1) | $ | 65,077 | $ | 63,076 | $ | 59,747 | |||||||||||||||
| Net interest margin (2) | 2.82 | % | 2.82 | % | 2.93 | % | |||||||||||||||
| Net interest margin (TEY) (Non-GAAP)<br> (1) (2) (3) | 3.27 | % | 3.25 | % | 3.29 | % | |||||||||||||||
| Adjusted net interest margin (TEY)<br> (Non-GAAP) (1) (2) (3) | 3.26 | % | 3.24 | % | 3.28 | % | |||||||||||||||
| For<br> the Six Months Ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| June 30,<br> 2024 | June 30,<br> 2023 | ||||||||||||||||||||
| Average<br> Balance | Interest<br> Earned or Paid | Average<br> Yield or Cost | Average<br> Balance | Interest<br> Earned or Paid | Average<br> Yield or Cost | ||||||||||||||||
| (dollars<br> in thousands) | |||||||||||||||||||||
| Fed funds sold | $ | 16,510 | $ | 452 | 5.41 | % | $ | 18,119 | $ | 457 | 5.09 | % | |||||||||
| Interest-bearing deposits at financial<br> institutions | 86,277 | 2,339 | 5.45 | % | 82,246 | 1,945 | 4.77 | % | |||||||||||||
| Investment securities - taxable | 375,644 | 8,546 | 4.54 | % | 337,844 | 7,059 | 4.17 | % | |||||||||||||
| Investment securities - nontaxable<br> (1) | 695,365 | 18,813 | 5.41 | % | 598,244 | 13,009 | 4.35 | % | |||||||||||||
| Restricted investment securities | 40,742 | 1,543 | 7.49 | % | 36,391 | 1,018 | 5.56 | % | |||||||||||||
| Loans (1) | 6,688,844 | 220,392 | 6.63 | % | 6,192,700 | 181,707 | 5.92 | % | |||||||||||||
| Total earning<br> assets (1) | $ | 7,903,382 | $ | 252,085 | 6.41 | % | $ | 7,265,544 | $ | 205,195 | 5.69 | % | |||||||||
| Interest-bearing deposits | $ | 4,589,479 | $ | 80,027 | 3.51 | % | $ | 4,016,217 | $ | 51,003 | 2.56 | % | |||||||||
| Time deposits | 1,099,746 | 24,473 | 4.48 | % | 1,031,062 | 17,222 | 3.37 | % | |||||||||||||
| Short-term borrowings | 1,688 | 44 | 5.19 | % | 4,642 | 132 | 5.75 | % | |||||||||||||
| Federal Home Loan Bank advances | 409,725 | 10,977 | 5.30 | % | 253,729 | 6,174 | 4.84 | % | |||||||||||||
| Subordinated debentures | 233,154 | 7,062 | 6.06 | % | 232,731 | 6,615 | 5.68 | % | |||||||||||||
| Junior subordinated debentures | 48,758 | 1,381 | 5.60 | % | 48,630 | 1,433 | 5.86 | % | |||||||||||||
| Total interest-bearing<br> liabilities | $ | 6,382,550 | $ | 123,964 | 3.90 | % | $ | 5,587,011 | $ | 82,579 | 2.97 | % | |||||||||
| Net interest income (1) | $ | 128,121 | $ | 122,616 | |||||||||||||||||
| Net interest margin (2) | 2.82 | % | 3.05 | % | |||||||||||||||||
| Net interest margin (TEY) (Non-GAAP)<br> (1) (2) (3) | 3.26 | % | 3.40 | % | |||||||||||||||||
| Adjusted net interest margin (TEY)<br> (Non-GAAP) (1) (2) (3) | 3.24 | % | 3.38 | % | |||||||||||||||||
| (1) | Includes<br> nontaxable securities and loans. Interest earned and yields on nontaxable securities<br> and loans are determined on a tax equivalent basis using a 21% tax rate. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (2) | See<br> "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion<br> included in net interest margin for each period presented. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (3) | TEY<br> : Tax equivalent yield. See GAAP to Non-GAAP reconciliations. | ||||||||||||||||||||
| --- | --- |
9
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||
| (dollars in thousands, except per share<br> data) | |||||||||||||||
| ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES | |||||||||||||||
| Beginning balance | $ | 84,470 | $ | 87,200 | $ | 87,669 | $ | 85,797 | $ | 86,573 | |||||
| Change in ACL for transfer of loans to LHFS | 498 | (3,377 | ) | 266 | 175 | (2,277 | ) | ||||||||
| Credit loss expense | 4,343 | 3,736 | 2,519 | 3,260 | 3,313 | ||||||||||
| Loans/leases charged off | (1,751 | ) | (3,560 | ) | (3,354 | ) | (1,816 | ) | (1,947 | ) | |||||
| Recoveries on loans/leases previously<br> charged off | 146 | 471 | 100 | 253 | 135 | ||||||||||
| Ending balance | $ | 87,706 | $ | 84,470 | $ | 87,200 | $ | 87,669 | $ | 85,797 | |||||
| NONPERFORMING ASSETS | |||||||||||||||
| Nonaccrual loans/leases | $ | 33,546 | $ | 29,439 | $ | 32,753 | $ | 34,568 | $ | 26,062 | |||||
| Accruing loans/leases past due 90 days<br> or more | 87 | 142 | 86 | - | 83 | ||||||||||
| Total nonperforming loans/leases | 33,633 | 29,581 | 32,839 | 34,568 | 26,145 | ||||||||||
| Other real estate owned | 369 | 784 | 1,347 | 120 | - | ||||||||||
| Other repossessed assets | 512 | 962 | - | - | - | ||||||||||
| Total nonperforming<br> assets | $ | 34,514 | $ | 31,327 | $ | 34,186 | $ | 34,688 | $ | 26,145 | |||||
| ASSET QUALITY RATIOS | |||||||||||||||
| Nonperforming assets / total assets | 0.39 | % | 0.36 | % | 0.40 | % | 0.41 | % | 0.32 | % | |||||
| ACL for loans and leases / total loans/leases held for investment | 1.33 | % | 1.33 | % | 1.33 | % | 1.39 | % | 1.41 | % | |||||
| ACL for loans and leases / nonperforming loans/leases | 260.77 | % | 285.55 | % | 265.54 | % | 253.61 | % | 328.16 | % | |||||
| Net charge-offs as a % of average loans/leases | 0.02 | % | 0.05 | % | 0.05 | % | 0.02 | % | 0.03 | % | |||||
| INTERNALLY ASSIGNED RISK RATING (1) (2) | |||||||||||||||
| Special mention | $ | 85,096 | $ | 111,729 | $ | 125,308 | $ | 128,052 | $ | 117,761 | |||||
| Substandard (3) | 80,345 | 70,841 | 70,425 | 72,550 | 67,192 | ||||||||||
| Doubtful (3) | - | - | - | - | - | ||||||||||
| Total Criticized loans (4) | $ | 165,441 | $ | 182,570 | $ | 195,733 | $ | 200,602 | $ | 184,953 | |||||
| Classified loans as a % of total loans/leases (3) | 1.17 | % | 1.07 | % | 1.08 | % | 1.10 | % | 1.05 | % | |||||
| Total Criticized loans as a % of total loans/leases (4) | 2.41 | % | 2.75 | % | 2.99 | % | 3.04 | % | 2.90 | % | |||||
| (1) | During<br> the first quarter of 2024, the Company revised the risk rating scale used for credit quality<br> monitoring. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Amounts<br> exclude the government guaranteed portion, if any. The Company assigns internal<br> risk ratings of Pass for the government guaranteed portion. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Classified<br> loans are defined as loans with internally assigned risk ratings of 10 or 11 (7 or 8 prior<br> to January 1, 2024), regardless of performance and include loans identified as Substandard<br> or Doubtful. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | Total<br> Criticized loans are defined as loans with internally assigned risk ratings of 9, 10, or<br> 11 (6, 7, or 8 prior to January 1, 2024), regardless of performance and include loans<br> identified as Special Mention, Substandard, or Doubtful. | ||||||||||||||
| --- | --- |
10
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| For the<br> Quarter Ended | For the<br> Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
| SELECT FINANCIAL DATA - SUBSIDIARIES | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||
| (dollars in thousands) | |||||||||||||||
| TOTAL ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 2,559,049 | $ | 2,618,727 | $ | 2,611,832 | |||||||||
| m2 Equipment Finance, LLC | 359,012 | 350,801 | 322,838 | ||||||||||||
| Cedar Rapids Bank and Trust | 2,428,267 | 2,423,936 | 2,389,623 | ||||||||||||
| Community State Bank | 1,531,109 | 1,445,230 | 1,332,966 | ||||||||||||
| Guaranty Bank | 2,369,754 | 2,327,985 | 2,179,844 | ||||||||||||
| TOTAL DEPOSITS | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 2,100,520 | $ | 2,161,515 | $ | 2,166,249 | |||||||||
| Cedar Rapids Bank and Trust | 1,721,564 | 1,757,353 | 1,791,861 | ||||||||||||
| Community State Bank | 1,188,551 | 1,187,926 | 1,073,907 | ||||||||||||
| Guaranty Bank | 1,791,448 | 1,743,514 | 1,653,299 | ||||||||||||
| TOTAL LOANS & LEASES | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 2,107,605 | $ | 2,046,038 | $ | 1,925,162 | |||||||||
| m2 Equipment Finance, LLC | 363,897 | 354,815 | 328,479 | ||||||||||||
| Cedar Rapids Bank and Trust | 1,736,438 | 1,680,127 | 1,728,280 | ||||||||||||
| Community State Bank | 1,162,686 | 1,113,070 | 1,025,844 | ||||||||||||
| Guaranty Bank | 1,847,658 | 1,809,101 | 1,700,034 | ||||||||||||
| TOTAL LOANS & LEASES / TOTAL DEPOSITS | |||||||||||||||
| Quad City Bank and Trust (1) | 100 | % | 95 | % | 89 | % | |||||||||
| Cedar Rapids Bank and Trust | 101 | % | 96 | % | 96 | % | |||||||||
| Community State Bank | 98 | % | 94 | % | 96 | % | |||||||||
| Guaranty Bank | 103 | % | 104 | % | 103 | % | |||||||||
| TOTAL LOANS & LEASES / TOTAL ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | 82 | % | 78 | % | 74 | % | |||||||||
| Cedar Rapids Bank and Trust | 72 | % | 69 | % | 72 | % | |||||||||
| Community State Bank | 76 | % | 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 | % | 1.40 | % | 1.44 | % | |||||||||
| m2 Equipment Finance, LLC | 3.86 | % | 3.75 | % | 3.46 | % | |||||||||
| Cedar Rapids Bank and Trust | 1.38 | % | 1.34 | % | 1.41 | % | |||||||||
| Community State Bank | 1.08 | % | 1.12 | % | 1.27 | % | |||||||||
| Guaranty Bank | 1.13 | % | 1.15 | % | 0.22 | % | |||||||||
| RETURN ON AVERAGE ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | 0.88 | % | 0.79 | % | 0.82 | % | 0.84 | % | 1.02 | % | |||||
| Cedar Rapids Bank and Trust | 2.94 | % | 3.09 | % | 3.52 | % | 3.01 | % | 3.30 | % | |||||
| Community State Bank | 1.26 | % | 1.25 | % | 1.42 | % | 1.25 | % | 1.46 | % | |||||
| Guaranty Bank | 1.42 | % | 0.88 | % | 0.97 | % | 1.15 | % | 0.99 | % | |||||
| NET INTEREST MARGIN PERCENTAGE (2) | |||||||||||||||
| Quad City Bank and Trust (1) | 3.39 | % | 3.31 | % | 3.28 | % | 3.35 | % | 3.36 | % | |||||
| Cedar Rapids Bank and Trust | 3.75 | % | 3.77 | % | 3.69 | % | 3.76 | % | 3.86 | % | |||||
| Community State Bank | 3.72 | % | 3.75 | % | 3.90 | % | 3.74 | % | 3.94 | % | |||||
| Guaranty Bank (3) | 2.99 | % | 2.98 | % | 3.10 | % | 2.99 | % | 3.30 | % | |||||
| ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN<br> NET INTEREST MARGIN, NET | |||||||||||||||
| Cedar Rapids Bank and Trust | $ | - | $ | - | $ | - | $ | - | $ | (8 | ) | ||||
| Community State Bank | (1 | ) | (1 | ) | (1 | ) | (2 | ) | 70 | ||||||
| Guaranty Bank | 301 | 396 | 168 | 697 | 965 | ||||||||||
| QCR Holdings, Inc. (4) | (32 | ) | (32 | ) | (33 | ) | (64 | ) | (65 | ) | |||||
| (1) | Quad<br> City Bank and Trust amounts include m2 Equipment Finance, LLC, as this entity is wholly-owned<br> and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately<br> for certain (applicable) measurements. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Includes<br> nontaxable securities and loans. Interest earned and yields on nontaxable securities<br> and loans are determined on a tax equivalent basis using a 21% federal tax rate. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Guaranty<br> Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding<br> those adjustments, net interest margin (Non-GAAP) would have been 2.86% for the quarter ended<br> June 30, 2024, 2.91% for the quarter ended March 31, 2024 and 3.11 for the quarter<br> ended June 30, 2023. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | Relates<br> to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017<br> and the Community National Bank acquisition in 2013. | ||||||||||||||
| --- | --- |
11
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| GAAP TO NON-GAAP RECONCILIATIONS | 2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||
| (dollars in thousands, except per share<br> data) | |||||||||||||||
| TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1) | |||||||||||||||
| Stockholders' equity (GAAP) | $ | 936,319 | $ | 907,342 | $ | 886,596 | $ | 828,383 | $ | 822,689 | |||||
| Less: Intangible assets | 151,468 | 152,158 | 152,848 | 153,564 | 154,255 | ||||||||||
| Tangible common equity (non-GAAP) | $ | 784,851 | $ | 755,184 | $ | 733,748 | $ | 674,819 | $ | 668,434 | |||||
| Total assets (GAAP) | $ | 8,871,991 | $ | 8,599,549 | $ | 8,538,894 | $ | 8,540,057 | $ | 8,226,673 | |||||
| Less: Intangible assets | 151,468 | 152,158 | 152,848 | 153,564 | 154,255 | ||||||||||
| Tangible assets (non-GAAP) | $ | 8,720,523 | $ | 8,447,391 | $ | 8,386,046 | $ | 8,386,493 | $ | 8,072,418 | |||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 9.00 | % | 8.94 | % | 8.75 | % | 8.05 | % | 8.28 | % | |||||
| (1) | This<br> ratio is a non-GAAP financial measure. The Company's management believes that<br> this measurement is important to many investors in the marketplace who are interested in<br> changes period-to-period in common equity. In compliance with applicable rules of<br> the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which<br> are the most directly comparable GAAP financial measures. | ||||||||||||||
| --- | --- |
12
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| GAAP TO NON-GAAP<br> RECONCILIATIONS | For<br> the Quarter Ended | For<br> the Six Months Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | |||||||||||||||
| ADJUSTED NET<br> INCOME (1) | 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | ||||||||||||||
| (dollars<br> in thousands, except per share data) | |||||||||||||||||||||
| Net<br> income (GAAP) | $ | 29,114 | $ | 26,726 | $ | 32,855 | $ | 25,121 | $ | 28,425 | $ | 55,840 | $ | 55,582 | |||||||
| Less non-core<br> items (post-tax) (2): | |||||||||||||||||||||
| Income: | |||||||||||||||||||||
| Securities<br> gains (losses), net | - | - | - | - | 9 | - | (356 | ) | |||||||||||||
| Fair value<br> gain (loss) on derivatives, net | (145 | ) | (144 | ) | (460 | ) | (265 | ) | 66 | (288 | ) | (272 | ) | ||||||||
| Total non-core<br> income (non-GAAP) | $ | (145 | ) | $ | (144 | ) | $ | (460 | ) | $ | (265 | ) | $ | 75 | $ | (288 | ) | $ | (628 | ) | |
| Expense: | |||||||||||||||||||||
| Post-acquisition<br> compensation, transition and integration costs | - | - | - | - | - | - | 164 | ||||||||||||||
| Total non-core<br> expense (non-GAAP) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 164 | |||||||
| Adjusted net income (non-GAAP)<br> (1) | $ | 29,259 | $ | 26,870 | $ | 33,315 | $ | 25,386 | $ | 28,350 | $ | 56,128 | $ | 56,374 | |||||||
| ADJUSTED EARNINGS PER<br> COMMON SHARE (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP)<br> (from above) | $ | 29,259 | $ | 26,870 | $ | 33,315 | $ | 25,386 | $ | 28,350 | $ | 56,128 | $ | 56,374 | |||||||
| Weighted average common shares outstanding | 16,814,814 | 16,783,348 | 16,734,080 | 16,717,303 | 16,701,950 | 16,799,081 | 16,739,120 | ||||||||||||||
| Weighted average common and common<br> equivalent shares outstanding | 16,921,854 | 16,910,675 | 16,875,952 | 16,847,951 | 16,799,527 | 16,916,264 | 16,870,830 | ||||||||||||||
| Adjusted earnings per common<br> share (non-GAAP): | |||||||||||||||||||||
| Basic | $ | 1.74 | $ | 1.60 | $ | 1.99 | $ | 1.52 | $ | 1.70 | $ | 3.34 | $ | 3.37 | |||||||
| Diluted | $ | 1.73 | $ | 1.59 | $ | 1.97 | $ | 1.51 | $ | 1.69 | $ | 3.32 | $ | 3.34 | |||||||
| ADJUSTED RETURN ON AVERAGE<br> ASSETS AND AVERAGE EQUITY (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP)<br> (from above) | $ | 29,259 | $ | 26,870 | $ | 33,315 | $ | 25,386 | $ | 28,350 | $ | 56,128 | $ | 56,374 | |||||||
| Average Assets | $ | 8,776,002 | $ | 8,550,855 | $ | 8,535,732 | $ | 8,287,813 | $ | 7,924,597 | $ | 8,663,429 | $ | 7,915,763 | |||||||
| Adjusted return on average<br> assets (annualized) (non-GAAP) | 1.33 | % | 1.26 | % | 1.56 | % | 1.23 | % | 1.43 | % | 1.30 | % | 1.42 | % | |||||||
| Adjusted return on average<br> equity (annualized) (non-GAAP) | 12.69 | % | 11.90 | % | 15.64 | % | 12.12 | % | 13.88 | % | 12.30 | % | 13.99 | % | |||||||
| NET INTEREST MARGIN (TEY)<br> (3) | |||||||||||||||||||||
| Net interest income (GAAP) | $ | 56,163 | $ | 54,699 | $ | 55,736 | $ | 55,255 | $ | 53,205 | $ | 110,862 | $ | 110,015 | |||||||
| Plus:<br> Tax equivalent adjustment (4) | 8,914 | 8,377 | 7,954 | 7,771 | 6,542 | 17,259 | 12,601 | ||||||||||||||
| Net interest income - tax equivalent<br> (Non-GAAP) | $ | 65,077 | $ | 63,076 | $ | 63,690 | $ | 63,026 | $ | 59,747 | $ | 128,121 | $ | 122,616 | |||||||
| Less: Acquisition<br> accounting net accretion | 268 | 363 | 673 | 539 | 134 | 631 | 962 | ||||||||||||||
| Adjusted net interest income | $ | 64,809 | $ | 62,713 | $ | 63,017 | $ | 62,487 | $ | 59,613 | $ | 127,490 | $ | 121,654 | |||||||
| Average earning assets | $ | 7,999,044 | $ | 7,807,720 | $ | 7,631,035 | $ | 7,573,785 | $ | 7,283,286 | $ | 7,903,382 | $ | 7,265,544 | |||||||
| Net interest margin (GAAP) | 2.82 | % | 2.82 | % | 2.90 | % | 2.89 | % | 2.93 | % | 2.82 | % | 3.05 | % | |||||||
| Net interest margin (TEY)<br> (Non-GAAP) | 3.27 | % | 3.25 | % | 3.32 | % | 3.31 | % | 3.29 | % | 3.26 | % | 3.40 | % | |||||||
| Adjusted net interest margin<br> (TEY) (Non-GAAP) | 3.26 | % | 3.24 | % | 3.29 | % | 3.28 | % | 3.28 | % | 3.24 | % | 3.38 | % | |||||||
| EFFICIENCY RATIO (5) | |||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 49,888 | $ | 50,690 | $ | 60,938 | $ | 51,081 | $ | 49,727 | $ | 100,578 | $ | 98,512 | |||||||
| Net interest income (GAAP) | $ | 56,163 | $ | 54,699 | $ | 55,736 | $ | 55,255 | $ | 53,205 | $ | 110,862 | $ | 110,015 | |||||||
| Noninterest<br> income (GAAP) | 30,889 | 26,858 | 47,729 | 26,593 | 32,520 | 57,747 | 58,362 | ||||||||||||||
| Total income | $ | 87,052 | $ | 81,557 | $ | 103,465 | $ | 81,848 | $ | 85,725 | $ | 168,609 | $ | 168,377 | |||||||
| Efficiency ratio (noninterest<br> expense/total income) (Non-GAAP) | 57.31 | % | 62.15 | % | 58.90 | % | 62.41 | % | 58.01 | % | 59.65 | % | 58.51 | % | |||||||
| (1) | Adjusted<br> net income, adjusted earnings per common share, adjusted return on average assets and average<br> equity are non-GAAP financial measures. The Company's management believes that these measurements<br> are important to investors as they exclude non-core or non-recurring income and expense items,<br> therefore, they provide a more realistic run-rate for future periods. In compliance with<br> applicable rules of the SEC, these non-GAAP measures are reconciled to net income, which<br> is the most directly comparable GAAP financial measure. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (2) | Non-core<br> or nonrecurring items (post-tax) are calculated using an estimated effective federal tax<br> rate of 21%. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (3) | Interest<br> earned and yields on nontaxable securities and loans are determined on a tax equivalent basis<br> using a 21% effective federal tax rate. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (4) | Net<br> interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes<br> this measurement to take into account the tax benefit associated with certain loans and securities. It<br> is also standard industry practice to measure net interest margin using tax-equivalent measures.<br> In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled<br> to net interest income, which is the most directly comparable GAAP financial measure. In<br> addition, the Company calculates net interest margin without the impact of acquisition accounting<br> net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate<br> for future periods. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (5) | Efficiency<br> ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare<br> to industry peers. The ratio is used to calculate overhead as a percentage of<br> revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is<br> reconciled to noninterest expense, net interest income and noninterest income, which are<br> the most directly comparable GAAP financial measures. | ||||||||||||||||||||
| --- | --- |
13