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 26, 2022
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 to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title<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 26, 2022, QCR Holdings, Inc. (the “Company”) issued a press release disclosing financial results for the quarter ended June 30, 2022. 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 26, 2022. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the<br>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 26, 2022 | By: | /s/ Todd A. Gipple |
| Todd A. Gipple | ||
| President, Chief Operating Officer and Chief Financial Officer |
Exhibit 99.1
| PRESS RELEASE | FOR IMMEDIATE RELEASE |
|---|
QCR Holdings, Inc. Announces Second Quarter 2022 Results
Second Quarter 2022 Highlights
| · | Completed the acquisition of Guaranty Federal Bancshares, Inc. addingapproximately $1.3 billion in assets, $808 million in loans and $1.1 billion in deposits |
|---|---|
| · | Reported net income of $15.2 million, or $0.87 per diluted share |
| --- | --- |
| · | Adjusted net income (non-GAAP) of $30.4 million, or $1.73 per dilutedshare |
| --- | --- |
| · | Acquisition/Post-acquisition related expenses and CECL Day 2 provisiontotaled $15.5 million, post-tax, or $0.88 per diluted share |
| --- | --- |
| · | Net Interest Margin (“NIM”) of 3.53% and Adjusted NIM (TEY)(non-GAAP)of 3.74% expanded significantly from the prior quarter by 23 and 24 basis points, respectively |
| --- | --- |
| · | Capital Markets Revenue from Swap Fees of $13.0 million doubled from thefirst quarter of 2022 |
| --- | --- |
| · | Annualized loan and lease growth of 14.0% for the quarter, excluding loanbalances acquired from the Guaranty Bank transaction and SBA Paycheck Protection Program (“PPP”) loans (non-GAAP) |
| --- | --- |
| · | Repurchased 602,500 shares at an average price of $54.80 per share |
| --- | --- |
Moline, IL, July 26, 2022 – QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $15.2 million and diluted earnings per share (“EPS”) of $0.87 for the second quarter of 2022, compared to net income of $23.6 million and diluted EPS of $1.49 for the first quarter of 2022. Included in the second quarter of 2022 results were $5.7 million of acquisition/post-acquisition related expenses and $9.8 million of CECL Day 2 provision, both post-tax. The CECL Day 2 provision was required to establish the initial credit loss allowances for the acquired non-PCD loan portfolio and off-balance sheet exposure as a result of the acquisition of Guaranty Federal Bancshares, which closed on April 1, 2022.
| $ in millions (except per share data) | For the Quarter<br> Ended<br> June 30, 2022 | Per Diluted <br> Share | ||||
|---|---|---|---|---|---|---|
| Reported Net Income (GAAP) | $ | 15.2 | $ | 0.87 | ||
| Acquisition/Post-Acquisition Related Expenses (Post-Tax) | $ | 5.7 | $ | 0.32 | ||
| CECL Day 2 Provision (Post-Tax)* | $ | 9.8 | $ | 0.56 | ||
| Other (Post-Tax) | $ | (0.3 | ) | $ | (0.02 | ) |
| Adjusted Net Income (non-GAAP, see below) | $ | 30.4 | $ | 1.73 |
*CECL Day 2 provision to establish the initial non-PCDloan and off-balance sheet exposure credit loss allowances under ASU 2016-13, Financial Instruments – Credit Losses, for the acquiredloan portfolio.
Excluding acquisition/post-acquisition related expenses, the CECL Day 2 provision and other nonrecurring items, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the second quarter of 2022 were $30.4 million and $1.73, respectively. For the first quarter of 2022, adjusted net income (non-GAAP) was $24.4 million and adjusted diluted EPS (non-GAAP) was $1.54. For the second quarter of 2021, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $22.5 million and $1.40, respectively.
| March 31, | June 30, | ||||
| in millions (except per share data) | 2022 | 2022 | 2021 | ||
| Net Income | 15.2 | $ | 23.6 | $ | 22.3 |
| Diluted EPS | 0.87 | $ | 1.49 | $ | 1.39 |
| Adjusted Net Income (non-GAAP)* | 30.4 | $ | 24.4 | $ | 22.5 |
| Adjusted Diluted EPS (non-GAAP)* | 1.73 | $ | 1.54 | $ | 1.40 |
All values are in US Dollars.
*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 measurements provide a better comparison for analysis and may provide a betterindicator of future performance. See GAAP to non-GAAP reconciliations.
“We delivered another strong quarter of net income, driven by exceptional loan growth, expanding net interest margin and well managed expenses,” said Larry J. Helling, Chief Executive Officer. “Building on the momentum we saw in the first quarter, we generated robust lending activity again in the second quarter with annualized loan growth of 14.0% after excluding the impact of the acquired portfolio and PPP activity. Adjusting for the nonrecurring items, primarily related to the closing of the Guaranty Bank acquisition, we increased core earnings by $6.0 million on a linked-quarter basis, generating an adjusted ROAA of 1.66%”
“On April 1st, we successfully completed the acquisition of Guaranty Federal Bancshares, Inc. and merged Guaranty Bank into Springfield First Community Bank with the combined bank retaining the Guaranty Bank name. We’re eager to continue to grow in the vibrant southwest Missouri region and we look forward to serving our clients and our communities.”
Net Interest Income of $59.4 Million
NIM Expanded by 23 Basis Points from the PriorQuarter
Net interest income for the second quarter of 2022 totaled $59.4 million, compared to $45.7 million for the first quarter of 2022 and $43.5 million for the second quarter of 2021. The increase in net interest income was due to an increase in average earning assets, primarily attributable to the Guaranty Bank transaction, increased organic loan growth on a linked-quarter basis, and strong NIM expansion. Adjusted net interest income (non-GAAP) during the quarter was $61.1 million, an increase of $12.6 million, or 25.9%, from the prior quarter. Adjusted net interest income (non-GAAP) was $45.7 million for the second quarter of 2021. Acquisition-related net accretion totaled $1.7 million for the second quarter of 2022, up from $118 thousand in the first quarter of 2022 and $291 thousand for the second quarter of 2021.
In the second quarter, NIM was 3.53% and tax-equivalent yield (“TEY”) basis (non-GAAP) NIM was 3.74%, compared to 3.30% and 3.50% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.64%, up 14 basis points from the prior quarter. The increase in Adjusted NIM (non-GAAP) during the quarter was primarily due to the impact of multiple rate increases on our asset-sensitive balance sheet as well as the addition of Guaranty Bank.
| For the Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | |||||||
| 2022 | 2022 | 2021 | |||||||
| NIM | 3.53 | % | 3.30 | % | 3.28 | % | |||
| NIM (TEY)(non-GAAP) * | 3.74 | % | 3.50 | % | 3.46 | % | |||
| Adjusted NIM (TEY)(non-GAAP) * | 3.64 | % | 3.50 | % | 3.44 | % | |||
| Adjusted NIM ex. PPP (TEY)(non-GAAP)* | 3.63 | % | 3.46 | % | 3.32 | % |
* See GAAP to non-GAAP reconciliations
2
“Excluding the impact of acquisition-related net accretion and PPP fees, we significantly expanded our adjusted NIM during the second quarter by 17 basis points” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Our balance sheet is well positioned to continue to drive strong NIM expansion in this rapidly rising rate environment.”
Annualized Loan and Lease Growth of 14.0%, Excludingthe Guaranty Bank Acquisition and PPP Loans (non-GAAP)
During the second quarter of 2022, the Company’s loans and leases increased $970.0 million to a total of $5.8 billion. Excluding the initial loan balances from the Guaranty Bank acquisition and PPP loans (non-GAAP), loan and lease growth during the quarter was $168.7 million, or 14.0% on an annualized basis. Core deposits (excluding brokered deposits) increased by $973.2 million during the quarter, due to the Guaranty Bank acquisition.
“Our continued robust loan growth in the second quarter was driven by strength in our traditional commercial lending, leasing and our Specialty Finance business,” added Helling. “This is a testament to the economic resiliency in our markets as well as our relationship-based community banking model, emphasizing the importance of strong relationships with new and existing clients. Given our current pipeline, we are reaffirming our targeted organic loan growth to between 10% and 12% for the full year.”
Noninterest Income of $22.8 Million
Noninterest income for the second quarter of 2022 totaled $22.8 million, compared to $15.6 million for the first quarter of 2022. The increase was primarily due to a $6.6 million increase in capital markets revenue from swap fees as well as the Guaranty Bank acquisition. Wealth management revenue was $3.5 million for the quarter, down 12.9% from the first quarter of 2022, primarily due to increased market volatility.
“Capital markets revenue totaled $13.0 million for the quarter, which was within our guidance range,” added Gipple. “Given our solid pipeline and recognizing timing continues to be impacted by project delays caused by ongoing supply chain disruptions and inflationary pressures, we continue to expect this source of fee income to be in a range of $13 to $15 million per quarter for the remainder of 2022.”
Noninterest Expenses of $54.2 Million, IncludingAcquisition/Post-Acquisition Related Expenses
Noninterest expense for the second quarter of 2022 totaled $54.2 million, including acquisition/post-acquisition related expenses of $6.8 million, compared to $38.3 million for the first quarter of 2022 and $35.7 million for the second quarter of 2021. The linked-quarter increase was primarily due to the inclusion of expenses from Guaranty Bank and expenses related to the acquisition. Excluding these acquisition/post-acquisition related costs, noninterest expense for the second quarter was $47.5 million.
Asset Quality Reflects Addition of GuarantyBank
Nonperforming assets (“NPAs”) totaled $24.0 million at the end of the second quarter, an increase of $21.3 million over the first quarter of 2022, primarily the result of the Guaranty Bank acquisition and two legacy lending relationships. The ratio of NPAs to total assets was 0.33% on June 30, 2022, compared to 0.04% on March 31, 2022, and 0.17% on June 30, 2021. In addition, the Company’s criticized loans and classified loans to total loans and leases at June 30, 2022 were 2.37% and 1.43%, respectively, compared to 2.45% and 1.13% as of March 31, 2022.
The Company recorded an $11.2 million provision for credit losses in the second quarter of 2022, due solely to the CECL Day 2 provision of $12.4 million (pre-tax) as a result of the Guaranty Bank acquisition. As of June 30, 2022, the ACL on total loans/leases was 1.59%, compared to 1.55% as of March 30, 2022.
3
Continued Strong CapitalLevels
As of June 30, 2022, the Company’s total risk-based capital ratio was 13.02%, the common equity tier 1 ratio was 9.17% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.11%. By comparison, these respective ratios were 14.50%, 10.61% and 9.60% as of March 31, 2022. Total risk-based capital and the common equity tier 1 were both impacted by expected initial dilution from the Guaranty Bank acquisition. The Company’s accumulated other comprehensive income (“AOCI”) declined $24.3 million during the second quarter due to a decrease in the value of its available for sale securities portfolio and certain derivatives resulting from ongoing increases in interest rates during the quarter. While AOCI reduced the Company’s tangible common equity (non-GAAP), solid earnings partially offset this impact, which led to a decline of only 8.4% in tangible book value (non-GAAP).
During the second quarter, the Company purchased and retired 602,500 shares of its common stock at an average price of $54.80 per share as the Company finished repurchases under the original 2020 authorized plan and began repurchases under the May 2022 authorized plan. Under the 2020 share repurchase program, the Company repurchased 794,000 shares in total at an average price of $50.60 per share. The 2022 share repurchase program, announced during the second quarter of 2022, authorized an approximate 1,500,000 additional shares to be repurchased. The Company repurchased 280,000 shares during the quarter and has approximately 1,220,000 shares remaining under its 2022 share repurchase program.
Focus on Three Strategic Long-Term Initiatives
As part of the Company’s ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, it continues to operate under three key strategic long-term initiatives:
| · | Generate organic loan and lease growth of 9% per year, funded by core deposits; |
|---|---|
| · | Grow fee-based income by at least 6% per year; and |
| --- | --- |
| · | Limit annual operating expense growth to 5% per year. |
| --- | --- |
Conference Call Details
The Company will host an earnings call/webcast tomorrow, July 27, 2022, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through August 3, 2022. The replay access information is 877-344-7529 (international 412-317-0088); access code 7416915. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.
About Us
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly-owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank on April 1, 2022, with the combined entity operating under the Guaranty Bank name. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. Including the Guaranty Bank acquisition, the Company now has 40 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2022, the Company had approximately $7.4 billion in assets, $5.8 billion in loans and $5.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.
4
Special Note Concerning Forward-LookingStatements***.*** This document contains, and future oral and written statements of the Company and its managementmay contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to thefinancial 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 availableto management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “predict,” “suggest,” “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should” or othersimilar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date theyare 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 theCompany to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factorsinclude, among others, the following: (i) the strength of the local, state, national and international economies(including effectsof inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespreaddisease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof, or other adverse externalevents that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governmentsto any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatoryagencies, the FASB or the PCAOB; (iv) changes in local, state and federal laws, regulations and governmental policies concerningthe Company’s general business; (v) changes in interest rates and prepayment rates of the Company’s assets (includingthe impact of LIBOR phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers;(vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpectedresults of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transactioncosts may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpectedoutcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such astornadoes, floods and blizzards; and (xiii) the ability of the Company to manage the risks associated with the foregoing as wellas anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance shouldnot be placed on such statements. Additional information concerning the Company and its business, including additional factors that couldmaterially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.
Contacts:
Todd A. Gipple
President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com
5
QCR Holding, Inc.Consolidated Financial Highlights(Unaudited)
| As of | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||
| (dollars in thousands) | ||||||||||
| CONDENSED BALANCE SHEET | ||||||||||
| Cash and due from banks | $ | 92,379 | $ | 50,540 | $ | 37,490 | $ | 57,310 | $ | 55,598 |
| Federal funds sold and interest-bearing deposits | 56,532 | 66,390 | 87,662 | 70,826 | 88,780 | |||||
| Securities, net of allowance for credit losses | 879,918 | 823,311 | 810,215 | 828,719 | 810,445 | |||||
| Net loans/leases | 5,705,478 | 4,753,082 | 4,601,411 | 4,519,060 | 4,338,811 | |||||
| Intangibles | 18,333 | 8,856 | 9,349 | 9,857 | 10,365 | |||||
| Goodwill | 137,607 | 74,066 | 74,066 | 74,066 | 74,066 | |||||
| Derivatives | 97,455 | 107,326 | 222,220 | 198,393 | 193,395 | |||||
| Other assets | 405,239 | 292,248 | 253,719 | 256,277 | 255,952 | |||||
| Total assets | $ | 7,392,941 | $ | 6,175,819 | $ | 6,096,132 | $ | 6,014,508 | $ | 5,827,412 |
| Total deposits | $ | 5,820,657 | $ | 4,839,689 | $ | 4,922,772 | $ | 4,871,828 | $ | 4,688,935 |
| Total borrowings | 583,166 | 443,270 | 170,805 | 183,514 | 198,908 | |||||
| Derivatives | 113,305 | 116,193 | 225,135 | 201,450 | 196,092 | |||||
| Other liabilities | 132,675 | 108,743 | 100,410 | 107,902 | 113,001 | |||||
| Total stockholders' equity | 743,138 | 667,924 | 677,010 | 649,814 | 630,476 | |||||
| Total liabilities and stockholders' equity | $ | 7,392,941 | $ | 6,175,819 | $ | 6,096,132 | $ | 6,014,508 | $ | 5,827,412 |
| ANALYSIS OF LOAN PORTFOLIO | ||||||||||
| Loan/lease mix: | ||||||||||
| Commercial and industrial - revolving | $ | 322,258 | $ | 263,441 | $ | 248,483 | $ | 175,155 | $ | 182,882 |
| Commercial and industrial - other | 1,403,689 | 1,374,221 | 1,346,602 | 1,465,580 | 1,505,384 | |||||
| Total commercial and industrial | 1,725,947 | 1,637,662 | 1,595,085 | 1,640,735 | 1,688,266 | |||||
| Commercial real estate, owner occupied | 628,565 | 439,257 | 421,701 | 434,014 | 427,734 | |||||
| Commercial real estate, non-owner occupied | 889,530 | 679,898 | 646,500 | 644,850 | 618,879 | |||||
| Construction and land development | 1,080,372 | 863,116 | 918,571 | 852,418 | 708,289 | |||||
| Multi-family | 860,742 | 711,682 | 600,412 | 529,727 | 466,804 | |||||
| Direct financing leases | 40,050 | 43,330 | 45,191 | 50,237 | 56,153 | |||||
| 1-4 family real estate | 473,141 | 379,613 | 377,361 | 376,067 | 382,142 | |||||
| Consumer | 99,556 | 73,310 | 75,311 | 71,682 | 69,438 | |||||
| Total loans/leases | $ | 5,797,903 | $ | 4,827,868 | $ | 4,680,132 | $ | 4,599,730 | $ | 4,417,705 |
| Less allowance for credit losses | 92,425 | 74,786 | 78,721 | 80,670 | 78,894 | |||||
| Net loans/leases | $ | 5,705,478 | $ | 4,753,082 | $ | 4,601,411 | $ | 4,519,060 | $ | 4,338,811 |
| ANALYSIS OF SECURITIES PORTFOLIO | ||||||||||
| Securities mix: | ||||||||||
| U.S. government sponsored agency securities | $ | 20,448 | $ | 21,380 | $ | 23,328 | $ | 23,689 | $ | 14,670 |
| Municipal securities | 710,638 | 667,245 | 639,799 | 649,486 | 641,603 | |||||
| Residential mortgage-backed and related securities | 81,247 | 86,381 | 94,323 | 100,744 | 106,139 | |||||
| Asset backed securities | 19,956 | 23,233 | 27,124 | 30,607 | 31,778 | |||||
| Other securities | 47,827 | 25,270 | 25,839 | 24,367 | 16,429 | |||||
| Total securities | $ | 880,116 | $ | 823,509 | $ | 810,413 | $ | 828,893 | $ | 810,619 |
| Less allowance for credit losses | 198 | 198 | 198 | 174 | 174 | |||||
| Net securities | $ | 879,918 | $ | 823,311 | $ | 810,215 | $ | 828,719 | $ | 810,445 |
| ANALYSIS OF DEPOSITS | ||||||||||
| Deposit mix: | ||||||||||
| Noninterest-bearing demand deposits | $ | 1,514,005 | $ | 1,275,493 | $ | 1,268,788 | $ | 1,342,273 | $ | 1,258,885 |
| Interest-bearing demand deposits | 3,758,566 | 3,181,685 | 3,232,633 | 3,086,711 | 2,976,696 | |||||
| Time deposits | 540,074 | 382,268 | 421,348 | 441,743 | 452,171 | |||||
| Brokered deposits | 8,012 | 243 | 3 | 1,101 | 1,183 | |||||
| Total deposits | $ | 5,820,657 | $ | 4,839,689 | $ | 4,922,772 | $ | 4,871,828 | $ | 4,688,935 |
| ANALYSIS OF BORROWINGS | ||||||||||
| Borrowings mix: | ||||||||||
| Overnight FHLB advances (1) | $ | 400,000 | $ | 290,000 | $ | 15,000 | $ | 30,000 | $ | 40,000 |
| Other short-term borrowings | 1,070 | 1,190 | 3,800 | 1,600 | 7,070 | |||||
| Subordinated notes | 133,562 | 113,890 | 113,850 | 113,811 | 113,771 | |||||
| Junior subordinated debentures | 48,534 | 38,190 | 38,155 | 38,103 | 38,067 | |||||
| Total borrowings | $ | 583,166 | $ | 443,270 | $ | 170,805 | $ | 183,514 | $ | 198,908 |
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 1.45%.
6
QCR Holding, Inc.Consolidated Financial Highlights(Unaudited)
| For the Quarter Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||
| INCOME STATEMENT | ||||||||||||||
| Interest income | $ | 68,205 | $ | 51,062 | $ | 52,020 | $ | 51,667 | $ | 48,903 | ||||
| Interest expense | 8,805 | 5,329 | 5,507 | 5,438 | 5,387 | |||||||||
| Net interest income | 59,400 | 45,733 | 46,513 | 46,229 | 43,516 | |||||||||
| Provision for credit losses (1) | 11,200 | (2,916 | ) | (3,227 | ) | - | - | |||||||
| Net interest income after provision for loan/lease losses | $ | 48,200 | $ | 48,649 | $ | 49,740 | $ | 46,229 | $ | 43,516 | ||||
| Trust department fees | $ | 2,497 | $ | 2,963 | $ | 2,843 | $ | 2,714 | $ | 2,848 | ||||
| Investment advisory and management fees | 983 | 1,036 | 1,047 | 1,054 | 1,039 | |||||||||
| Deposit service fees | 2,223 | 1,555 | 1,644 | 1,588 | 1,492 | |||||||||
| Gain on sales of residential real estate loans | 809 | 493 | 922 | 954 | 1,184 | |||||||||
| Gain on sales of government guaranteed portions of loans | - | 19 | 227 | - | - | |||||||||
| Swap fee income/capital markets revenue | 13,004 | 6,422 | 12,982 | 24,885 | 9,568 | |||||||||
| Securities gains (losses), net | - | - | - | - | (88 | ) | ||||||||
| Earnings on bank-owned life insurance | 350 | 346 | 470 | 446 | 451 | |||||||||
| Debit card fees | 1,499 | 1,007 | 1,072 | 1,085 | 1,084 | |||||||||
| Correspondent banking fees | 244 | 277 | 266 | 265 | 269 | |||||||||
| Other | 1,173 | 1,515 | 1,512 | 1,661 | 1,449 | |||||||||
| Total noninterest income | $ | 22,782 | $ | 15,633 | $ | 22,985 | $ | 34,652 | $ | 19,296 | ||||
| Salaries and employee benefits | $ | 29,972 | $ | 23,627 | $ | 24,809 | $ | 28,207 | $ | 23,044 | ||||
| Occupancy and equipment expense | 5,978 | 3,937 | 3,723 | 4,122 | 3,965 | |||||||||
| Professional and data processing fees | 4,365 | 3,671 | 3,866 | 3,568 | 3,702 | |||||||||
| Acquisition costs | 1,973 | 1,851 | 624 | - | - | |||||||||
| Post-acquisition compensation, transition and integration costs | 4,796 | - | - | - | - | |||||||||
| Disposition costs | - | - | 5 | - | - | |||||||||
| FDIC insurance, other insurance and regulatory fees | 1,394 | 1,310 | 1,316 | 1,108 | 986 | |||||||||
| Loan/lease expense | 761 | 267 | 606 | 308 | 457 | |||||||||
| Net cost of (income from) and gains/losses on operations of other real estate | 59 | (1 | ) | - | (1,346 | ) | (113 | ) | ||||||
| Advertising and marketing | 1,198 | 761 | 1,679 | 1,095 | 853 | |||||||||
| Bank service charges | 610 | 541 | 553 | 525 | 572 | |||||||||
| Correspondent banking expense | 213 | 199 | 200 | 201 | 198 | |||||||||
| Intangibles amortization | 787 | 493 | 508 | 508 | 508 | |||||||||
| Other | 2,142 | 1,669 | 1,523 | 3,091 | 1,503 | |||||||||
| Total noninterest expense | $ | 54,248 | $ | 38,325 | $ | 39,412 | $ | 41,387 | $ | 35,675 | ||||
| Net income before income taxes | $ | 16,734 | $ | 25,957 | $ | 33,313 | $ | 39,494 | $ | 27,137 | ||||
| Federal and state income tax expense | 1,492 | 2,333 | 6,304 | 7,929 | 4,788 | |||||||||
| Net income | $ | 15,242 | $ | 23,624 | $ | 27,009 | $ | 31,565 | $ | 22,349 | ||||
| Basic EPS | $ | 0.88 | $ | 1.51 | $ | 1.73 | $ | 2.02 | $ | 1.41 | ||||
| Diluted EPS | $ | 0.87 | $ | 1.49 | $ | 1.71 | $ | 1.99 | $ | 1.39 | ||||
| Weighted average common shares outstanding | 17,345,324 | 15,625,112 | 15,582,276 | 15,635,123 | 15,813,932 | |||||||||
| Weighted average common and common equivalent shares outstanding | 17,549,107 | 15,852,256 | 15,838,246 | 15,869,798 | 16,045,239 | |||||||||
| (1) | Provision for credit losses for the quarter ended June 30, 2022<br>included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures. | |||||||||||||
| --- | --- |
| 7 |
| --- |
QCR Holding, Inc.
Consolidated FinancialHighlights
(Unaudited)
| For Six Months Ended | |||||
|---|---|---|---|---|---|
| June 30, | June 30, | ||||
| 2022 | 2021 | ||||
| (dollars in thousands, except per share data) | |||||
| INCOME STATEMENT | |||||
| Interest income | $ | 119,267 | $ | 96,468 | |
| Interest expense | 14,134 | 10,977 | |||
| Net interest income | 105,133 | 85,491 | |||
| Provision for credit losses (1) | 8,284 | 6,713 | |||
| Net interest income after provision for loan/lease losses | $ | 96,849 | $ | 78,778 | |
| Trust department fees | $ | 5,460 | $ | 5,649 | |
| Investment advisory and management fees | 2,019 | 1,979 | |||
| Deposit service fees | 3,778 | 2,900 | |||
| Gain on sales of residential real estate loans | 1,302 | 2,521 | |||
| Gain on sales of government guaranteed portions of loans | 19 | - | |||
| Swap fee income/capital markets revenue | 19,426 | 23,125 | |||
| Securities gains (losses), net | - | (88 | ) | ||
| Earnings on bank-owned life insurance | 696 | 922 | |||
| Debit card fees | 2,506 | 2,059 | |||
| Correspondent banking fees | 521 | 583 | |||
| Other | 2,688 | 3,135 | |||
| Total noninterest income | $ | 38,415 | $ | 42,785 | |
| Salaries and employee benefits | $ | 53,599 | $ | 47,891 | |
| Occupancy and equipment expense | 9,915 | 8,073 | |||
| Professional and data processing fees | 8,036 | 7,145 | |||
| Acquisition costs | 3,824 | - | |||
| Post-acquisition compensation, transition and integration costs | 4,796 | - | |||
| Disposition costs | - | 8 | |||
| FDIC insurance, other insurance and regulatory fees | 2,704 | 2,051 | |||
| Loan/lease expense | 1,028 | 757 | |||
| Net cost of (income from) and gains/losses on operations of other real estate | 58 | (74 | ) | ||
| Advertising and marketing | 1,959 | 1,480 | |||
| Bank service charges | 1,151 | 1,095 | |||
| Correspondent banking expense | 412 | 398 | |||
| Intangibles amortization | 1,280 | 1,016 | |||
| Other | 3,811 | 3,063 | |||
| Total noninterest expense | $ | 92,573 | $ | 72,903 | |
| Net income before income taxes | $ | 42,691 | $ | 48,660 | |
| Federal and state income tax expense | 3,825 | 8,329 | |||
| Net income | $ | 38,866 | $ | 40,331 | |
| Basic EPS | $ | 2.36 | $ | 2.55 | |
| Diluted EPS | $ | 2.33 | $ | 2.52 | |
| Weighted average common shares outstanding | 16,485,218 | 15,808,788 | |||
| Weighted average common and common equivalent shares outstanding | 16,700,682 | 16,035,394 | |||
| (1) | Provision for credit losses for the six months ended June 30,<br>2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS<br>exposures. | ||||
| --- | --- |
8
QCRHolding, Inc.
ConsolidatedFinancial Highlights
(Unaudited)
| As<br> of and for the Quarter Ended | For<br> the Six Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, | March<br> 31, | December<br> 31, | September<br> 30, | June<br> 30, | June<br> 30, | June<br> 30, | |||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | 2022 | 2021 | |||||||||||||||
| (dollars<br> in thousands, except per share data) | |||||||||||||||||||||
| COMMON SHARE<br> DATA | |||||||||||||||||||||
| Common shares outstanding | 17,064,347 | 15,579,605 | 15,613,460 | 15,590,428 | 15,763,522 | ||||||||||||||||
| Book value per common share<br> (1) | $ | 43.55 | $ | 42.87 | $ | 43.36 | $ | 41.68 | $ | 40.00 | |||||||||||
| Tangible book value per common<br> share (Non-GAAP) (2) | $ | 34.41 | $ | 37.55 | $ | 38.02 | $ | 36.30 | $ | 34.64 | |||||||||||
| Closing stock price | $ | 53.99 | $ | 56.59 | $ | 56.00 | $ | 51.44 | $ | 48.09 | |||||||||||
| Market capitalization | $ | 921,304 | $ | 881,650 | $ | 874,354 | $ | 801,972 | $ | 758,068 | |||||||||||
| Market price / book value | 123.97 | % | 132.00 | % | 129.15 | % | 123.42 | % | 120.24 | % | |||||||||||
| Market price / tangible book<br> value | 156.90 | % | 150.71 | % | 147.30 | % | 141.72 | % | 138.83 | % | |||||||||||
| Earnings per<br> common share (basic) LTM (3) | $ | 6.14 | $ | 6.68 | $ | 6.30 | $ | 5.73 | $ | 4.81 | |||||||||||
| Price earnings<br> ratio LTM (3) | 8.79<br> x | 8.47<br> x | 8.88<br> x | 8.98<br> x | 10.00<br> x | ||||||||||||||||
| TCE / TA (Non-GAAP)<br> (4) | 8.11 | % | 9.60 | % | 9.87 | % | 9.54 | % | 9.51 | % | |||||||||||
| CONDENSED<br> STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | |||||||||||||||||||||
| Beginning<br> balance | $ | 667,924 | $ | 677,010 | $ | 649,814 | $ | 630,476 | $ | 608,719 | |||||||||||
| Net income | 15,242 | 23,624 | 27,009 | 31,565 | 22,349 | ||||||||||||||||
| Other comprehensive<br> income (loss), net of tax | (24,286 | ) | (27,340 | ) | 295 | (2,546 | ) | 4,179 | |||||||||||||
| Common stock<br> cash dividends declared | (1,059 | ) | (938 | ) | (935 | ) | (946 | ) | (951 | ) | |||||||||||
| Issuance<br> of 2,071,291 shares of common stock as a result of the acquisition of Guaranty Federal Bancshares | 117,214 | - | - | - | - | ||||||||||||||||
| Repurchase<br> and cancellation of shares of common stock as a result of a share repurchase program | (33,016 | ) | (4,416 | ) | - | (9,367 | ) | (4,800 | ) | ||||||||||||
| Other (5) | 1,119 | (16 | ) | 827 | 632 | 980 | |||||||||||||||
| Ending<br> balance | $ | 743,138 | $ | 667,924 | $ | 677,010 | $ | 649,814 | $ | 630,476 | |||||||||||
| REGULATORY<br> CAPITAL RATIOS (6): | |||||||||||||||||||||
| Total risk-based<br> capital ratio | 13.02 | % | 14.50 | % | 14.77 | % | 14.64 | % | 14.72 | % | |||||||||||
| Tier 1 risk-based<br> capital ratio | 9.86 | % | 11.27 | % | 11.46 | % | 11.26 | % | 11.26 | % | |||||||||||
| Tier 1 leverage<br> capital ratio | 9.61 | % | 10.78 | % | 10.46 | % | 10.28 | % | 10.29 | % | |||||||||||
| Common equity<br> tier 1 ratio | 9.17 | % | 10.61 | % | 10.76 | % | 10.55 | % | 10.52 | % | |||||||||||
| KEY<br> PERFORMANCE RATIOS AND OTHER METRICS | |||||||||||||||||||||
| Return on<br> average assets (annualized) | 0.83 | % | 1.55 | % | 1.76 | % | 2.11 | % | 1.56 | % | 1.16 | % | 1.41 | % | |||||||
| Return on<br> average total equity (annualized) | 7.74 | % | 13.81 | % | 16.23 | % | 19.30 | % | 14.33 | % | 10.55 | % | 13.14 | % | |||||||
| Net interest<br> margin | 3.53 | % | 3.30 | % | 3.29 | % | 3.36 | % | 3.28 | % | 3.43 | % | 3.27 | % | |||||||
| Net interest<br> margin (TEY) (Non-GAAP)(7) | 3.74 | % | 3.50 | % | 3.50 | % | 3.56 | % | 3.46 | % | 3.63 | % | 3.45 | % | |||||||
| Efficiency<br> ratio (Non-GAAP) (8) | 66.01 | % | 62.45 | % | 56.71 | % | 51.17 | % | 56.80 | % | 64.49 | % | 56.83 | % | |||||||
| Gross loans<br> and leases / total assets | 78.42 | % | 78.17 | % | 76.77 | % | 76.48 | % | 75.81 | % | 78.42 | % | 76.10 | % | |||||||
| Gross loans<br> and leases / total deposits | 99.61 | % | 99.76 | % | 95.07 | % | 94.41 | % | 94.22 | % | 99.61 | % | 94.22 | % | |||||||
| Effective<br> tax rate | 8.92 | % | 8.99 | % | 18.92 | % | 20.08 | % | 17.64 | % | 8.96 | % | 17.12 | % | |||||||
| Full-time<br> equivalent employees (9) | 968 | 749 | 726 | 724 | 725 | 968 | 725 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Assets | $ | 7,324,470 | $ | 6,115,127 | $ | 6,121,446 | $ | 5,982,583 | $ | 5,761,314 | $ | 6,723,137 | $ | 5,704,151 | |||||||
| Loans/leases | 5,711,471 | 4,727,478 | 4,608,111 | 4,529,136 | 4,412,322 | 5,222,193 | 4,342,440 | ||||||||||||||
| Deposits | 5,867,444 | 4,903,354 | 4,983,869 | 4,779,876 | 4,709,732 | 5,388,062 | 4,669,533 | ||||||||||||||
| Total stockholders'<br> equity | 788,204 | 684,126 | 665,698 | 654,186 | 624,000 | 736,452 | 614,061 | ||||||||||||||
| (1) | Includes<br> accumulated other comprehensive income (loss). | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (2) | Includes<br> accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP). | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (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) | Increase<br> at June 30, 2022 due to the acquisition of Guaranty Bank. | ||||||||||||||||||||
| --- | --- |
9
QCRHolding, Inc.
ConsolidatedFinancial Highlights
(Unaudited)
| For<br> the Quarter Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, 2022 | March<br> 31, 2022 | June<br> 30, 2021 | |||||||||||||||||||
| Average<br><br><br> Balance | Interest<br><br><br> Earned or<br><br> Paid | Average<br><br><br> Yield or<br><br> Cost | Average<br><br><br> Balance | Interest<br><br><br> Earned or<br><br> Paid | Average<br><br><br> Yield or<br><br> Cost | Average<br><br><br> Balance | Interest<br><br><br> Earned or<br><br> Paid | Average<br><br><br> Yield or<br><br> Cost | |||||||||||||
| (dollars<br> in thousands) | |||||||||||||||||||||
| ANALYSIS<br> OF NET INTEREST INCOME AND MARGIN | |||||||||||||||||||||
| Fed<br> funds sold | $ | 5,896 | $ | 12 | 0.83 | % | $ | 4,564 | $ | 2 | 0.15 | % | $ | 1,817 | $ | 1 | 0.06 | % | |||
| Interest-bearing<br> deposits at financial institutions | 67,254 | 169 | 1.01 | % | 69,328 | 35 | 0.20 | % | 88,396 | 35 | 0.16 | % | |||||||||
| Securities (1) | 920,308 | 9,002 | 3.91 | % | 802,260 | 7,682 | 3.83 | % | 798,732 | 7,294 | 3.66 | % | |||||||||
| Restricted<br> investment securities | 37,166 | 485 | 5.16 | % | 22,183 | 281 | 5.06 | % | 19,614 | 238 | 4.79 | % | |||||||||
| Loans (1) | 5,711,471 | 61,932 | 4.35 | % | 4,727,478 | 45,995 | 3.95 | % | 4,412,322 | 43,776 | 3.98 | % | |||||||||
| Total<br> earning assets (1) | $ | 6,742,095 | $ | 71,600 | 4.26 | % | $ | 5,625,813 | $ | 53,995 | 3.88 | % | $ | 5,320,881 | $ | 51,344 | 3.87 | % | |||
| Interest-bearing<br> deposits | $ | 3,791,595 | $ | 4,478 | 0.47 | % | $ | 3,228,083 | $ | 2,338 | 0.29 | % | $ | 2,978,382 | $ | 2,050 | 0.28 | % | |||
| Time deposits | 529,675 | 1,047 | 0.79 | % | 398,897 | 799 | 0.81 | % | 440,599 | 1,184 | 1.08 | % | |||||||||
| Short-term<br> borrowings | 1,404 | 3 | 0.78 | % | 1,951 | - | 0.05 | % | 10,883 | 1 | 0.05 | % | |||||||||
| Federal Home<br> Loan Bank advances | 286,484 | 780 | 1.08 | % | 85,778 | 82 | 0.38 | % | 21,802 | 15 | 0.28 | % | |||||||||
| Subordinated<br> debentures | 133,529 | 1,816 | 5.44 | % | 113,868 | 1,554 | 5.46 | % | 115,339 | 1,570 | 5.45 | % | |||||||||
| Junior<br> subordinated debentures | 46,536 | 680 | 5.78 | % | 38,171 | 556 | 5.83 | % | 38,044 | 564 | 5.86 | % | |||||||||
| Total<br> interest-bearing liabilities | $ | 4,789,223 | $ | 8,804 | 0.74 | % | $ | 3,866,748 | $ | 5,329 | 0.56 | % | $ | 3,605,049 | $ | 5,384 | 0.60 | % | |||
| Net interest<br> income (1) | $ | 62,796 | $ | 48,666 | $ | 45,960 | |||||||||||||||
| Net interest<br> margin (2) | 3.53 | % | 3.30 | % | 3.28 | % | |||||||||||||||
| Net interest<br> margin (TEY) (Non-GAAP) (1) (2) (3) | 3.74 | % | 3.50 | % | 3.46 | % | |||||||||||||||
| Adjusted net<br> interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.64 | % | 3.50 | % | 3.44 | % | |||||||||||||||
| Adjusted net<br> interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3) | 3.63 | % | 3.46 | % | 3.32 | % | |||||||||||||||
| For<br> the Six Months Ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| June<br> 30, 2022 | June<br> 30, 2021 | ||||||||||||||||||||
| Average<br><br><br> Balance | Interest<br><br><br> Earned or<br><br> Paid | Average<br><br><br> Yield or Cost | Average<br><br><br> Balance | Interest<br><br><br> Earned or<br><br> Paid | Average<br><br><br> Yield or Cost | ||||||||||||||||
| (dollars<br> in thousands) | |||||||||||||||||||||
| Fed<br> funds sold | $ | 5,234 | $ | 14 | 0.53 | % | $ | 1,830 | $ | 1 | 0.05 | % | |||||||||
| Interest-bearing<br> deposits at financial institutions | 68,285 | 204 | 0.60 | % | 102,343 | 71 | 0.14 | % | |||||||||||||
| Securities (1) | 861,610 | 16,683 | 3.87 | % | 804,364 | 14,344 | 3.57 | % | |||||||||||||
| Restricted<br> investment securities | 29,716 | 766 | 5.13 | % | 18,843 | 456 | 4.81 | % | |||||||||||||
| Loans (1) | 5,222,193 | 107,927 | 4.17 | % | 4,342,440 | 86,299 | 4.01 | % | |||||||||||||
| Total<br> earning assets (1) | $ | 6,187,038 | $ | 125,594 | 4.09 | % | $ | 5,269,820 | $ | 101,171 | 3.87 | % | |||||||||
| Interest-bearing<br> deposits | $ | 3,511,396 | $ | 6,816 | 0.39 | % | $ | 2,979,835 | $ | 4,036 | 0.27 | % | |||||||||
| Time deposits | 464,647 | 1,846 | 0.80 | % | 444,297 | 2,625 | 1.19 | % | |||||||||||||
| Short-term<br> borrowings | 1,676 | 3 | 0.36 | % | 9,021 | 3 | 0.06 | % | |||||||||||||
| Federal Home<br> Loan Bank advances | 186,685 | 863 | 0.92 | % | 17,464 | 25 | 0.28 | % | |||||||||||||
| Subordinated<br> debentures | 123,753 | 3,370 | 5.45 | % | 117,014 | 3,164 | 5.41 | % | |||||||||||||
| Junior<br> subordinated debentures | 42,376 | 1,236 | 5.80 | % | 38,026 | 1,125 | 5.87 | % | |||||||||||||
| Total<br> interest-bearing liabilities | $ | 4,330,533 | $ | 14,134 | 0.66 | % | $ | 3,605,657 | $ | 10,978 | 0.61 | % | |||||||||
| Net interest<br> income (1) | $ | 111,460 | $ | 90,193 | |||||||||||||||||
| Net interest<br> margin (2) | 3.43 | % | 3.27 | % | |||||||||||||||||
| Net interest<br> margin (TEY) (Non-GAAP) (1) (2) (3) | 3.63 | % | 3.45 | % | |||||||||||||||||
| Adjusted net<br> interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.57 | % | 3.42 | % | |||||||||||||||||
| Adjusted net<br> interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3) | 3.55 | % | 3.27 | % | |||||||||||||||||
| (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. | ||||||||||||||||||||
| --- | --- |
10
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES | |||||||||||||||
| Beginning balance | $ | 74,786 | $ | 78,721 | $ | 80,670 | $ | 78,894 | $ | 81,831 | |||||
| Initial ACL recorded for acquired PCD loans | 5,902 | - | - | - | - | ||||||||||
| Credit loss expense (1) | 12,141 | (3,849 | ) | (2,045 | ) | 1,895 | (141 | ) | |||||||
| Loans/leases charged off | (620 | ) | (456 | ) | (375 | ) | (287 | ) | (3,163 | ) | |||||
| Recoveries on loans/leases previously charged off | 216 | 370 | 471 | 168 | 367 | ||||||||||
| Ending balance | $ | 92,425 | $ | 74,786 | $ | 78,721 | $ | 80,670 | $ | 78,894 | |||||
| NONPERFORMING ASSETS | |||||||||||||||
| Nonaccrual loans/leases (2) | $ | 23,574 | $ | 2,744 | $ | 2,759 | $ | 6,818 | $ | 8,230 | |||||
| Accruing loans/leases past due 90 days or more | 268 | 4 | 1 | 14 | 57 | ||||||||||
| Total nonperforming loans/leases | 23,842 | 2,748 | 2,760 | 6,832 | 8,287 | ||||||||||
| Other real estate owned | 205 | - | - | - | 1,820 | ||||||||||
| Other repossessed assets | - | - | - | - | - | ||||||||||
| Total nonperforming assets | $ | 24,047 | $ | 2,748 | $ | 2,760 | $ | 6,832 | $ | 10,107 | |||||
| ASSET QUALITY RATIOS | |||||||||||||||
| Nonperforming assets / total assets | 0.33 | % | 0.04 | % | 0.05 | % | 0.11 | % | 0.17 | % | |||||
| ACL for loans and leases / total loans/leases | 1.59 | % | 1.55 | % | 1.68 | % | 1.75 | % | 1.79 | % | |||||
| ACL for loans and leases / nonperforming loans/leases | 387.66 | % | 2721.47 | % | 2852.21 | % | 1180.77 | % | 952.02 | % | |||||
| Net charge-offs as a % of average loans/leases | 0.01 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.06 | % | |||||
| INTERNALLY ASSIGNED RISK RATING (3) | |||||||||||||||
| Special mention (rating 6) | $ | 54,558 | $ | 63,622 | $ | 62,510 | $ | 58,634 | $ | 51,613 | |||||
| Substandard (rating 7) | 83,048 | 54,491 | 53,159 | 59,402 | 79,719 | ||||||||||
| Doubtful (rating 8) | - | - | - | - | - | ||||||||||
| $ | 137,606 | $ | 118,113 | $ | 115,669 | $ | 118,036 | $ | 131,332 | ||||||
| Criticized loans (4) | $ | 137,606 | $ | 118,113 | $ | 115,669 | $ | 118,036 | $ | 131,332 | |||||
| Classified loans (5) | 83,048 | 54,491 | 53,159 | 59,402 | 79,719 | ||||||||||
| Criticized loans as a % of total loans/leases | 2.37 | % | 2.45 | % | 2.47 | % | 2.57 | % | 2.97 | % | |||||
| Classified loans as a % of total loans/leases | 1.43 | % | 1.13 | % | 1.14 | % | 1.29 | % | 1.80 | % | |||||
| (1) | Credit loss expense on loans/leases for the quarter ended June<br>30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Nonaccrual loans for the quarter ended June 30, 2022 included<br>$7.3 million related to the acquired Guaranty Bank loan portfolio. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Amounts exclude the government guaranteed portion, if any. The<br>Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | Criticized loans are defined as C&I and CRE loans with internally<br>assigned risk ratings of 6, 7, or 8, regardless of performance. | ||||||||||||||
| --- | --- | ||||||||||||||
| (5) | Classified loans are defined as C&I and CRE loans with internally<br>assigned risk ratings of 7 or 8, regardless of performance. | ||||||||||||||
| --- | --- |
| 11 |
| --- |
QCR Holding, Inc.
ConsolidatedFinancial Highlights
(Unaudited)
| For the Quarter Ended | For the Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||
| (dollars in thousands) | |||||||||||||||
| SELECT FINANCIAL DATA - SUBSIDIARIES | |||||||||||||||
| TOTAL ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 2,122,852 | $ | 2,195,894 | $ | 2,059,634 | |||||||||
| m2 Equipment Finance, LLC | 289,451 | 281,666 | 255,338 | ||||||||||||
| Cedar Rapids Bank and Trust | 1,985,199 | 1,947,737 | 1,913,761 | ||||||||||||
| Community State Bank - Ankeny | 1,221,406 | 1,184,708 | 1,079,929 | ||||||||||||
| Guaranty Bank (7) | 2,037,364 | 956,345 | 850,067 | ||||||||||||
| TOTAL DEPOSITS | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,787,564 | $ | 1,930,935 | $ | 1,810,772 | |||||||||
| Cedar Rapids Bank and Trust | 1,495,665 | 1,397,976 | 1,395,721 | ||||||||||||
| Community State Bank - Ankeny | 1,006,836 | 1,013,928 | 938,428 | ||||||||||||
| Guaranty Bank (7) | 1,539,978 | 555,559 | 608,676 | ||||||||||||
| TOTAL LOANS & LEASES | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,737,812 | $ | 1,692,218 | $ | 1,577,681 | |||||||||
| m2 Equipment Finance, LLC | 293,435 | 285,871 | 258,520 | ||||||||||||
| Cedar Rapids Bank and Trust | 1,536,224 | 1,478,514 | 1,360,202 | ||||||||||||
| Community State Bank - Ankeny | 931,031 | 912,996 | 786,208 | ||||||||||||
| Guaranty Bank (7) | 1,592,836 | 744,140 | 693,614 | ||||||||||||
| TOTAL LOANS & LEASES / TOTAL DEPOSITS | |||||||||||||||
| Quad City Bank and Trust (1) | 97 | % | 88 | % | 87 | % | |||||||||
| Cedar Rapids Bank and Trust | 103 | % | 106 | % | 97 | % | |||||||||
| Community State Bank - Ankeny | 92 | % | 90 | % | 84 | % | |||||||||
| Guaranty Bank | 103 | % | 134 | % | 114 | % | |||||||||
| TOTAL LOANS & LEASES / TOTAL ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | 82 | % | 77 | % | 77 | % | |||||||||
| Cedar Rapids Bank and Trust | 77 | % | 76 | % | 71 | % | |||||||||
| Community State Bank - Ankeny | 76 | % | 77 | % | 73 | % | |||||||||
| Guaranty Bank | 78 | % | 78 | % | 82 | % | |||||||||
| ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES | |||||||||||||||
| Quad City Bank and Trust (1) | 1.68 | % | 1.69 | % | 1.91 | % | |||||||||
| m2 Equipment Finance, LLC | 3.31 | % | 3.31 | % | 3.61 | % | |||||||||
| Cedar Rapids Bank and Trust | 1.58 | % | 1.61 | % | 1.92 | % | |||||||||
| Community State Bank - Ankeny | 1.57 | % | 1.55 | % | 1.69 | % | |||||||||
| Guaranty Bank | 1.53 | % | 1.11 | % | 1.35 | % | |||||||||
| RETURN ON AVERAGE ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | 1.56 | % | 1.86 | % | 1.64 | % | 1.71 | % | 1.50 | % | |||||
| Cedar Rapids Bank and Trust | 2.72 | % | 2.25 | % | 2.39 | % | 2.48 | % | 2.42 | % | |||||
| Community State Bank - Ankeny | 1.12 | % | 1.42 | % | 1.16 | % | 1.27 | % | 0.99 | % | |||||
| Guaranty Bank (8) (9) | 0.20 | % | 1.40 | % | 1.77 | % | 0.56 | % | 1.47 | % | |||||
| NET INTEREST MARGIN PERCENTAGE (2) | |||||||||||||||
| Quad City Bank and Trust (1) | 3.74 | % | 3.50 | % | 3.30 | % | 3.62 | % | 3.25 | % | |||||
| Cedar Rapids Bank and Trust (3) | 3.66 | % | 3.60 | % | 3.60 | % | 3.63 | % | 3.58 | % | |||||
| Community State Bank - Ankeny (4) | 3.67 | % | 3.62 | % | 3.66 | % | 3.65 | % | 3.68 | % | |||||
| Guaranty Bank (5) | 4.20 | % | 3.38 | % | 3.54 | % | 3.94 | % | 3.54 | % | |||||
| ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET | |||||||||||||||
| INTEREST MARGIN, NET | |||||||||||||||
| Cedar Rapids Bank and Trust | $ | 4 | $ | 51 | $ | 92 | $ | 55 | $ | 105 | |||||
| Community State Bank - Ankeny | 28 | 33 | 68 | $ | 61 | 385 | |||||||||
| Guaranty Bank | 1,698 | 69 | 168 | $ | 1,767 | 379 | |||||||||
| QCR Holdings, Inc. (6) | (35 | ) | (35 | ) | (37 | ) | $ | (70 | ) | (74 | ) | ||||
| (1) | Quad City Bank and Trust figures include m2 Equipment Finance,<br>LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately<br>for certain (applicable) measurements. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Includes nontaxable securities and loans. Interest<br>earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Cedar Rapids Bank and Trust's net interest margin percentage includes<br>various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.62%<br>for the quarter ended June 30, 2022, 3.54% for the quarter ended March 31, 2022 and 3.67% for the quarter ended June 30, 2021. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | Community State Bank's net interest margin percentage includes<br>various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.66%<br>for the quarter ended June 30, 2022, 3.62% for the quarter ended March 31, 2022 and 3.63% for the quarter ended June 30, 2021. | ||||||||||||||
| --- | --- | ||||||||||||||
| (5) | Guaranty Bank's net interest margin percentage includes various<br>purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.82% for the<br>quarter ended June 30, 2022, 3.41% for the quarter ended March 31, 2022 and 3.50% for the quarter ended June 30, 2021. | ||||||||||||||
| --- | --- | ||||||||||||||
| (6) | Relates to the trust preferred securities acquired as part of<br>the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013. | ||||||||||||||
| --- | --- | ||||||||||||||
| (7) | Increase due to the acquisition of Guaranty Bank on April 1, 2022,<br>merging into Springfield First Community Bank with the combined bank operating under the Guaranty Bank name. | ||||||||||||||
| --- | --- | ||||||||||||||
| (8) | Decrease due to CECL Day 2 provision for credit losses of $12.4<br>million related to the acquisition of Guaranty Bank during the quarter ended June 30, 2022. | ||||||||||||||
| --- | --- | ||||||||||||||
| (9) | Adjusted ROAA excluding non-core adjustments for the Guaranty<br>Bank acquisition (non-GAAP) would have been 2.12% for the quarter ended June 30, 2022 and 1.89% for the six months ended June 30, 2022. | ||||||||||||||
| --- | --- |
| 12 |
| --- |
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| GAAP TO NON-GAAP RECONCILIATIONS | |||||||||||||||
| TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1) | |||||||||||||||
| Stockholders' equity (GAAP) | $ | 743,138 | $ | 667,924 | $ | 677,010 | $ | 649,814 | $ | 630,476 | |||||
| Less: Intangible assets | 155,940 | 82,922 | 83,415 | 83,923 | 84,431 | ||||||||||
| Tangible common equity (non-GAAP) | $ | 587,198 | $ | 585,002 | $ | 593,595 | $ | 565,891 | $ | 546,045 | |||||
| Total assets (GAAP) | $ | 7,392,941 | $ | 6,175,819 | $ | 6,096,132 | $ | 6,014,508 | $ | 5,827,412 | |||||
| Less: Intangible assets | 155,940 | 82,922 | 83,415 | 83,923 | 84,431 | ||||||||||
| Tangible assets (non-GAAP) | $ | 7,237,001 | $ | 6,092,897 | $ | 6,012,717 | $ | 5,930,585 | $ | 5,742,981 | |||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 8.11 | % | 9.60 | % | 9.87 | % | 9.54 | % | 9.51 | % | |||||
| (1) | This ratio is a non-GAAP financial measure. The Company's<br>management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period<br>in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity<br>and total assets, which are the most directly comparable GAAP financial measures. | ||||||||||||||
| --- | --- |
| 13 |
| --- |
QCR Holding, Inc.
Consolidated FinancialHighlights
(Unaudited)
| For the Quarter Ended | For the Six Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | |||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | 2022 | 2021 | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||||
| GAAP TO NON-GAAP RECONCILIATIONS | |||||||||||||||||||||
| ADJUSTED NET INCOME (1) | |||||||||||||||||||||
| Net income (GAAP) | $ | 15,242 | $ | 23,624 | $ | 27,009 | $ | 31,565 | $ | 22,349 | $ | 38,866 | $ | 40,331 | |||||||
| Less non-core items (post-tax) (2): | |||||||||||||||||||||
| Income: | |||||||||||||||||||||
| Securities gains (losses), net | - | - | - | - | (69 | ) | $ | - | $ | (69 | ) | ||||||||||
| Mark to market gains (losses) on derivatives, net | 342 | 715 | 77 | (13 | ) | (58 | ) | 1,057 | $ | 71 | |||||||||||
| Gain on sale of loan | - | - | - | 28 | - | - | $ | - | |||||||||||||
| Total non-core income (non-GAAP) | $ | 342 | $ | 715 | $ | 77 | $ | 15 | $ | (127 | ) | $ | 1,057 | $ | 2 | ||||||
| Expense: | |||||||||||||||||||||
| Acquisition costs (2) | 1,932 | 1,462 | 493 | - | - | 3,394 | - | ||||||||||||||
| Post-acquisition compensation, transition and integration costs | 3,789 | - | - | - | - | 3,789 | 169 | ||||||||||||||
| Separation agreement | - | - | - | - | - | - | 734 | ||||||||||||||
| CECL Day 2 provision for credit losses on acquired non-PCD loans (3) | 8,651 | - | - | - | - | 8,651 | - | ||||||||||||||
| CECL Day 2 provision for credit losses provision on acquired OBS exposure (3) | 1,140 | - | - | - | - | 1,140 | - | ||||||||||||||
| Loss on sale of subsidiary | - | - | - | - | - | - | 110 | ||||||||||||||
| Total non-core expense (non-GAAP) | $ | 15,512 | $ | 1,462 | $ | 496 | $ | - | $ | - | $ | 16,974 | $ | 1,020 | |||||||
| Adjusted net income (non-GAAP) (1) | $ | 30,412 | $ | 24,371 | $ | 27,428 | $ | 31,550 | $ | 22,476 | $ | 54,783 | $ | 41,349 | |||||||
| ADJUSTED EARNINGS PER COMMON SHARE (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP) (from above) | $ | 30,412 | $ | 24,371 | $ | 27,428 | $ | 31,550 | $ | 22,476 | $ | 54,783 | $ | 41,349 | |||||||
| Weighted average common shares outstanding | 17,345,324 | 15,625,112 | 15,582,276 | 15,635,123 | 15,813,932 | 16,485,218 | 15,808,788 | ||||||||||||||
| Weighted average common and common equivalent shares outstanding | 17,549,107 | 15,852,256 | 15,838,246 | 15,869,798 | 16,045,239 | 16,700,682 | 16,035,394 | ||||||||||||||
| Adjusted earnings per common share (non-GAAP): | |||||||||||||||||||||
| Basic | $ | 1.75 | $ | 1.56 | $ | 1.76 | $ | 2.02 | $ | 1.42 | $ | 3.32 | $ | 2.62 | |||||||
| Diluted | $ | 1.73 | $ | 1.54 | $ | 1.73 | $ | 1.99 | $ | 1.40 | $ | 3.28 | $ | 2.58 | |||||||
| ADJUSTED RETURN ON AVERAGE ASSETS (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP) (from above) | $ | 30,412 | $ | 24,371 | $ | 27,428 | $ | 31,550 | $ | 22,476 | $ | 54,783 | $ | 41,349 | |||||||
| Average Assets | $ | 7,324,470 | $ | 6,115,127 | $ | 6,121,446 | $ | 5,982,583 | $ | 5,761,314 | $ | 6,723,137 | $ | 5,704,151 | |||||||
| Adjusted return on average assets (annualized) (non-GAAP) | 1.66 | % | 1.59 | % | 1.79 | % | 2.11 | % | 1.56 | % | 1.63 | % | 1.45 | % | |||||||
| NET INTEREST MARGIN (TEY) (5) | |||||||||||||||||||||
| Net interest income (GAAP) | $ | 59,400 | $ | 45,733 | $ | 46,513 | $ | 46,229 | $ | 43,516 | $ | 105,133 | $ | 85,491 | |||||||
| Plus: Tax equivalent adjustment (4) | 3,396 | 2,933 | 2,800 | 2,708 | 2,444 | 6,327 | 4,702 | ||||||||||||||
| Net interest income - tax equivalent (Non-GAAP) | $ | 62,796 | $ | 48,666 | $ | 49,313 | $ | 48,937 | $ | 45,960 | $ | 111,460 | $ | 90,193 | |||||||
| Less: Acquisition accounting net accretion | 1,695 | 118 | 88 | 456 | 291 | 1,813 | 795 | ||||||||||||||
| Adjusted net interest income | $ | 61,101 | $ | 48,548 | $ | 49,225 | $ | 48,481 | $ | 45,669 | $ | 109,647 | $ | 89,398 | |||||||
| Less: PPP income | 125 | 530 | 1,365 | 1,910 | 1,658 | 655 | 3,921 | ||||||||||||||
| Adjusted net interest income, excluding PPP income | $ | 60,976 | $ | 48,018 | $ | 47,860 | $ | 46,571 | $ | 44,011 | $ | 108,992 | $ | 85,477 | |||||||
| Average earning assets | $ | 6,742,095 | $ | 5,625,813 | $ | 5,602,222 | $ | 5,451,571 | $ | 5,320,881 | $ | 6,187,038 | $ | 5,269,820 | |||||||
| Net interest margin (GAAP) | 3.53 | % | 3.30 | % | 3.29 | % | 3.36 | % | 3.28 | % | 3.43 | % | 3.27 | % | |||||||
| Net interest margin (TEY) (Non-GAAP) | 3.74 | % | 3.50 | % | 3.50 | % | 3.56 | % | 3.46 | % | 3.63 | % | 3.45 | % | |||||||
| Adjusted net interest margin (TEY) (Non-GAAP) | 3.64 | % | 3.50 | % | 3.49 | % | 3.53 | % | 3.44 | % | 3.57 | % | 3.42 | % | |||||||
| Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) | 3.63 | % | 3.46 | % | 3.39 | % | 3.39 | % | 3.32 | % | 3.55 | % | 3.27 | % | |||||||
| EFFICIENCY RATIO (6) | |||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 54,248 | $ | 38,325 | $ | 39,412 | $ | 41,387 | $ | 35,675 | $ | 92,573 | $ | 72,903 | |||||||
| Net interest income (GAAP) | $ | 59,400 | $ | 45,733 | $ | 46,513 | $ | 46,229 | $ | 43,516 | $ | 105,133 | $ | 85,491 | |||||||
| Noninterest income (GAAP) | 22,782 | 15,633 | 22,985 | 34,652 | 19,296 | 38,415 | 42,785 | ||||||||||||||
| Total income | $ | 82,182 | $ | 61,366 | $ | 69,498 | $ | 80,881 | $ | 62,812 | $ | 143,548 | $ | 128,276 | |||||||
| Efficiency ratio (noninterest expense/total income) (Non-GAAP) | 66.01 | % | 62.45 | % | 56.71 | % | 51.17 | % | 56.80 | % | 64.49 | % | 56.83 | % | |||||||
| LOAN GROWTH ANNUALIZED, EXCLUDING ACQUIRED AND PPP LOANS | |||||||||||||||||||||
| Total loans and leases | $ | 5,797,903 | $ | 4,827,868 | $ | 4,680,132 | $ | 4,599,730 | $ | 4,417,705 | $ | 5,797,903 | $ | 4,417,705 | |||||||
| Less: Acquired loans (7) | 807,599 | - | - | - | - | 807,599 | - | ||||||||||||||
| Less: PPP loans | 79 | 6,340 | 28,181 | 83,575 | 147,506 | 79 | 147,506 | ||||||||||||||
| Total loans and leases, excluding acquired and PPP loans | $ | 4,990,225 | $ | 4,821,528 | $ | 4,651,951 | $ | 4,516,155 | $ | 4,270,199 | $ | 4,990,225 | $ | 4,270,199 | |||||||
| Loan growth annualized, excluding acquired and PPP loans | 14.00 | % | 14.58 | % | 12.03 | % | 23.04 | % | 14.87 | % | 14.54 | % | 12.90 | % | |||||||
| (1) | Adjusted net income, Adjusted net income attributable to<br>QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are non-GAAP financial<br>measures. The Company's management believes that these measurements are important to investors as they exclude non-core or<br>non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable<br>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<br>using an estimated effective tax rate of 21% with the exception of acquisition costs which have an estimated effective tax rate of 11.26%. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (3) | The CECL Day 2 provision for credit losses on acquired non-PCD<br>loans and OBS exposures resulted from the Guaranty Bank acquisition on April 1, 2022. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (4) | Interest earned and yields on nontaxable securities and loans<br>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<br>Company's management utilizes 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. In compliance with<br>applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial<br>measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion<br>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<br>management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue.<br>In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and<br>noninterest income, which are the most directly comparable GAAP financial measures. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (7) | Loan balances acquired from the Guaranty Bank acquisition<br>on April 1, 2022 are excluded. | ||||||||||||||||||||
| --- | --- |
| 14 |
| --- |