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, 2021
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 of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $1.00 Par Value | QCRH | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
On July 26, 2021, QCR Holdings, Inc. (the “Company”) issued a press release disclosing financial results for the quarter ended June 30, 2021. 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.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press Release dated July 26, 2021. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline<br>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, 2021 | 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 Record Net Incomeof $22.3 Million for the Second Quarter of 2021
Second Quarter 2021 Highlights
| · | Record net income of $22.3 million, or $1.39 per diluted share |
|---|---|
| · | Adjusted net income (non-GAAP) of $22.5 million, or $1.40 per diluted share |
| --- | --- |
| · | Net Interest Margin (“NIM”) increased by 2 basis points and Adjusted NIM (TEY)(non-GAAP) increased by 4 bps to 3.28% and3.44%, respectively |
| --- | --- |
| · | Adjusted net interest income (non-GAAP) increased $1.9 million, or 4.4% |
| --- | --- |
| · | Annualized core loan and lease growth (non-GAAP) of 14.9% for the quarter, excluding SBA Paycheck Protection Program (“PPP”)loans |
| --- | --- |
| · | Annualized core deposit growth of 4.9% for the quarter |
| --- | --- |
| · | Allowance for credit losses (“ACL”) to total loans/leases of 1.85%, excluding PPP loans (non-GAAP) |
| --- | --- |
| · | Nonperforming assets improved by 28% for the quarter and now represent only 0.17% of total assets |
| --- | --- |
Moline, IL, July 26, 2021 -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced record net income of $22.3 million and diluted earnings per share (“EPS”) of $1.39 for the second quarter of 2021, compared to net income of $18.0 million and diluted EPS of $1.12 for the first quarter of 2021.
The Company reported adjusted net income (non-GAAP) of $22.5 million and adjusted diluted EPS (non-GAAP) of $1.40 for the second quarter of 2021, compared to adjusted net income (non-GAAP) of $18.6 million and adjusted diluted EPS (non-GAAP) of $1.16 for the first quarter of 2021. For the second quarter of 2020, net income and diluted EPS were $13.7 million and $0.86, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $14.0 million and $0.88, respectively.
| For the Quarter Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | ||||
| $ in millions (except per share data) | 2021 | 2021 | 2020 | |||
| Net Income | $ | 22.3 | $ | 18.0 | $ | 13.7 |
| Diluted EPS | $ | 1.39 | $ | 1.12 | $ | 0.86 |
| Adjusted Net Income (non-GAAP) | $ | 22.5 | $ | 18.6 | $ | 14.0 |
| Adjusted Diluted EPS (non-GAAP) | $ | 1.40 | $ | 1.16 | $ | 0.88 |
Adjusted non-GAAP measurements of financial performanceexclude non-recurring income and expense items that management believes are not reflective of the anticipated future operation of theCompany’s business. The Company believes these measurements provide a better comparison for analysis and may provide a better indicatorof future performance. See GAAP to non-GAAP reconciliations.
“We delivered a record quarter of net income, driven by continued strong loan growth, an expanded net interest margin, improved asset quality and careful noninterest expense management,” said Larry J. Helling, Chief Executive Officer. "We successfully deployed our liquidity with another quarter of strong loan and lease production, while maintaining disciplined underwriting. Higher average loan balances, combined with an improved net interest margin, enabled us to generate a solid increase in net interest income from the prior quarter.”
Annualized Loan and Lease Growth of 14.9% forthe Quarter, excluding PPP Loans (non-GAAP)
During the second quarter of 2021, the Company’s core loans and leases, excluding PPP loans, increased $153.0 million to a total of $4.3 billion. Core loan and lease growth during the quarter was 14.9% on an annualized basis and was funded by the Company’s excess liquidity and core deposit growth. Core deposits (excluding brokered deposits) increased by $57.0 million during the quarter. The Company’s wholesale funding portfolio has been reduced to predominately subordinated debt that qualifies as regulatory capital.
“Our continued outsized loan growth for the quarter was driven by strength in both our Specialty Finance Group and our core commercial lending and leasing business,” added Helling. “Given the robust first half results, combined with our current pipeline, we are targeting continued strong organic loan growth for the full year 2021 of between 10% and 12%, which is higher than our long-term goal of 9%.”
Net Interest Income of $43.5million
Net interest income for the second quarter of 2021 totaled $43.5 million, compared to $42.0 million for the first quarter of 2021 and $41.0 million for the second quarter of 2020. Adjusted net interest income (non-GAAP) during the quarter was $45.7 million, an increase of $1.9 million, or 4.4%, from the prior quarter, primarily due to an increase in adjusted net interest margin combined with the strong loan/lease growth. Adjusted net interest income (non-GAAP) was $41.9 million for the second quarter of 2020. Acquisition-related net accretion totaled $291 thousand for the second quarter of 2021, down from $504 thousand in the first quarter of 2021 and $736 thousand for the second quarter of 2020.
In the second quarter, reported NIM was 3.28% and, on a tax-equivalent yield basis (non-GAAP), NIM was 3.46%, as compared to 3.26% and 3.43% in the first quarter of 2021, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion was 3.44%, up 4 basis points from the first quarter. The increase in Adjusted NIM (non-GAAP) during the quarter was due to a decline of 3 basis points in the total cost of interest-bearing funds (due to both mix and rate), and a 1 basis point increase in the yield on earning assets (adjusted for acquisition-related net accretion).
| For the Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | |||||||
| 2021 | 2021 | 2020 | |||||||
| NIM | 3.28 | % | 3.26 | % | 3.14 | % | |||
| NIM (TEY)(non-GAAP) | 3.46 | % | 3.43 | % | 3.27 | % | |||
| Adjusted NIM (TEY)(non-GAAP) | 3.44 | % | 3.40 | % | 3.21 | % | |||
| See GAAP to non-GAAP reconciliations |
“We expanded our adjusted net interest margin again during the second quarter driven by lower deposit costs. Additionally, our average yield on interest earning assets was up slightly during the quarter. Our talented team of bankers continues to have success implementing our relationship-based model, leading to improved cost of funds and minimizing loan yield reductions in this highly competitive environment. With our strong loan and lease growth and margin expansion, net interest income grew by over 4% in the quarter when excluding the impact of acquisition accounting,” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer.
Noninterest Income of $19.3million
Noninterest income for the second quarter of 2021 totaled $19.3 million, compared to $23.5 million for the first quarter of 2021. The decrease was primarily due to a $4.0 million reduction in capital markets revenue from the prior quarter as a few of the Company’s swap loans that were scheduled to close in the second quarter will now close in the third quarter. Wealth management revenue was $3.9 million for the quarter, up $146 thousand from the first quarter.
“Swap fee income/capital markets revenue totaled $9.6 million for the quarter, which was lower than our guidance. Several of our swap loans that were scheduled to close in the second quarter were temporarily delayed due to factors outside of the Company’s control. Most of those loans subsequently closed in July, where we have experienced very strong activity and as of July 23rd we have already generated $10 million in swap fees this month. The current pipeline of swap loans remains healthy and we believe this source of revenue is sustainable long-term,” added Gipple. “As a result, we expect our third quarter swap fee income/capital markets revenue will be at the upper end of our guidance range of $14 to $18 million.”
Noninterest Expenses of $35.7million
Noninterest expense for the second quarter of 2021 totaled $35.7 million, compared to $37.2 million for the first quarter of 2021 and $33.1 million for the second quarter of 2020. The linked-quarter decline was primarily due to lower salary and benefits expense of $1.8 million, driven by lower incentive compensation and commission expense in the quarter due to the lower capital markets revenue income. Partially offsetting this decrease was a $259 thousand increase in professional and data processing fees and a $226 thousand increase in advertising and marketing expense, both returning to more normalized levels from their lower levels in the first quarter.
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Asset Quality Remains Strong and NPAs Improved
Nonperforming assets (“NPAs”) totaled $10.1 million at the end of the second quarter, a decrease of $4.0 million from the first quarter of 2021. The decrease was primarily due to a reduction in nonaccrual loans as a number of loans returned to performing status or were either monetized or were charged-off during the quarter. The ratio of NPAs to total assets improved to 0.17% on June 30, 2021, compared to 0.25% on March 31, 2021, and 0.22% on June 30, 2020. In addition, the Company’s criticized loans and classified loans to total loans and leases decreased to 2.97% and 1.80%, respectively, from 3.17% and 1.95% as of March 31, 2021.
The Company did not record a provision for credit losses in the second quarter of 2021, primarily due to continued strong asset quality and a reduction in nonperforming loans. The provision for credit losses totaled $6.7 million for the first quarter of 2021. As of June 30, 2021, the ACL on total loans/leases was 1.79%, compared to 1.88% as of March 31, 2021. Excluding PPP loans of $148 million, the ACL to total loans/leases as of June 30, 2021, was 1.85% (non-GAAP).
Continued Strong Capital Levels
As of June 30, 2021, the Company’s total risk-based capital ratio was 14.77%, the common equity tier 1 ratio was 10.57% and the tangible common equity to tangible assets ratio (non-GAAP) was 9.55%. By comparison, these respective ratios were 14.85%, 10.55% and 9.42% as of March 31, 2021. During the second quarter, the Company resumed share repurchases under its existing share repurchase program and purchased and retired 100,000 shares at an average price of $48.00 per share.
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:
| · | 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 our annual operating expense growth to 5% per year. |
| --- | --- |
Conference Call Details
The Company will host an earnings call/webcast tomorrow, July 27, 2021, 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 10, 2021. The replay access information is 877-344-7529 (international 412-317-0088); access code 10158303. 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, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 23 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2021, the Company had approximately $5.8 billion in assets, $4.4 billion in loans and $4.7 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.
Special Note Concerning Forward-Looking Statements. Thisdocument contains, and future oral and written statements of the Company and its management may contain, forward-looking statements withinthe meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans,objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectationsand assumptions of the Company’s management and on information currently available to management, are generally identifiable bythe use of words such as “believe,” “expect,” “anticipate,” “predict,” “suggest,” “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document,including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update anystatement in light of new information or future events.
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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 theimpact of the new presidential administration); (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 beadopted by state and federal regulatory agencies, the FASB, the Securities Exchange Commission or the PCAOB, including FASB’s CECLimpairment standards; (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s generalbusiness; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out);(vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technologyand the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which mayinclude failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated;(ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or newlitigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards;and (xiii) the ability of the Company to manage the risks associated with the foregoing as well as anticipated.These risks and uncertaintiesshould be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additionalinformation concerning the Company and its business, including additional factors that could materially affect the Company’s financialresults, is included in the Company’s filings with the Securities and Exchange Commission.
Contacts:
| Todd A. Gipple | Kim K. Garrett |
|---|---|
| President | Vice President |
| Chief Operating Officer | Corporate Communications |
| Chief Financial Officer | Investor Relations Manager |
| (309) 743-7745 | (319) 743-7006 |
| tgipple@qcrh.com | kgarret@qcrh.com |
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QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)
| As of | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
| **** | 2021 | 2021 | 2020 | 2020 | 2020 | |||||
| (dollars in thousands) | ||||||||||
| CONDENSED BALANCE SHEET | ||||||||||
| Cash and due from banks | $ | 55,598 | $ | 78,814 | $ | 61,329 | $ | 68,932 | $ | 88,577 |
| Federal funds sold and interest-bearing deposits | 88,780 | 55,056 | 95,676 | 302,668 | 142,900 | |||||
| Securities, net of allowance for credit losses | 810,445 | 799,825 | 838,131 | 782,088 | 748,883 | |||||
| Net loans/leases | 4,338,811 | 4,279,220 | 4,166,753 | 4,168,395 | 4,079,432 | |||||
| Intangibles | 10,365 | 10,873 | 11,381 | 11,902 | 13,872 | |||||
| Goodwill | 74,066 | 74,066 | 74,066 | 74,066 | 74,248 | |||||
| Derivatives | 193,395 | 122,668 | 222,757 | 236,381 | 225,164 | |||||
| Other assets | 233,705 | 224,625 | 212,704 | 220,128 | 220,920 | |||||
| Assets held for sale | - | - | - | - | 10,765 | |||||
| Total assets | $ | 5,805,165 | $ | 5,645,147 | $ | 5,682,797 | $ | 5,864,560 | $ | 5,604,761 |
| Total deposits | $ | 4,688,935 | $ | 4,631,782 | $ | 4,599,137 | $ | 4,672,268 | $ | 4,349,775 |
| Total borrowings | 198,908 | 188,601 | 177,114 | 226,962 | 376,250 | |||||
| Derivatives | 196,092 | 125,863 | 229,270 | 244,510 | 233,589 | |||||
| Other liabilities | 90,754 | 90,182 | 83,483 | 148,207 | 87,539 | |||||
| Liabilities held for sale | - | - | - | - | 1,588 | |||||
| Total stockholders' equity | 630,476 | 608,719 | 593,793 | 572,613 | 556,020 | |||||
| Total liabilities and stockholders' equity | $ | 5,805,165 | $ | 5,645,147 | $ | 5,682,797 | $ | 5,864,560 | $ | 5,604,761 |
| ANALYSIS OF LOAN PORTFOLIO | ||||||||||
| Loan/lease mix: (1) | ||||||||||
| Commercial and industrial - revolving | $ | 182,882 | $ | 168,842 | ||||||
| Commercial and industrial - other | 1,505,384 | 1,616,144 | ||||||||
| Commercial Real Estate, Owner Occupied | 427,734 | 461,272 | ||||||||
| Commercial Real Estate, Non-Owner Occupied | 618,879 | 610,582 | ||||||||
| Construction and Land Development | 708,289 | 607,798 | ||||||||
| Multi-family | 466,804 | 396,272 | ||||||||
| Direct financing leases | 56,153 | 60,134 | ||||||||
| 1-4 family real estate | 382,142 | 368,927 | ||||||||
| Consumer | 69,438 | 71,080 | ||||||||
| Total loans/leases | $ | 4,417,705 | $ | 4,361,051 | ||||||
| Less allowance for credit losses (2) | 78,894 | 81,831 | ||||||||
| Net loans/leases | $ | 4,338,811 | $ | 4,279,220 | ||||||
| Loan/lease mix: (1) | ||||||||||
| Commercial and industrial loans | $ | 1,680,853 | $ | 1,779,062 | $ | 1,726,723 | $ | 1,823,049 | $ | 1,850,110 |
| Commercial real estate loans | 2,319,423 | 2,174,897 | 2,107,629 | 1,999,715 | 1,869,162 | |||||
| Direct financing leases | 55,371 | 59,229 | 66,016 | 73,011 | 79,105 | |||||
| Residential real estate loans | 268,193 | 254,900 | 252,121 | 245,032 | 241,069 | |||||
| Installment and other consumer loans | 86,925 | 87,053 | 91,302 | 102,471 | 99,150 | |||||
| Deferred loan/lease origination costs, net of fees | 6,940 | 5,910 | 7,338 | 4,699 | 1,663 | |||||
| Total loans/leases | $ | 4,417,705 | $ | 4,361,051 | $ | 4,251,129 | $ | 4,247,977 | $ | 4,140,259 |
| Less allowance for credit losses (2) | 78,894 | 81,831 | 84,376 | 79,582 | 60,827 | |||||
| Net loans/leases | $ | 4,338,811 | $ | 4,279,220 | $ | 4,166,753 | $ | 4,168,395 | $ | 4,079,432 |
| ANALYSIS OF SECURITIES PORTFOLIO | ||||||||||
| Securities mix: | ||||||||||
| U.S. government sponsored agency securities | $ | 14,670 | $ | 14,581 | $ | 15,336 | $ | 18,437 | $ | 17,472 |
| Municipal securities | 641,603 | 614,649 | 627,523 | 569,075 | 526,192 | |||||
| Residential mortgage-backed and related securities | 106,139 | 118,051 | 132,842 | 134,147 | 145,672 | |||||
| Asset backed securities | 31,778 | 39,815 | 40,683 | 40,665 | 39,797 | |||||
| Other securities | 16,429 | 12,903 | 21,747 | 19,764 | 19,750 | |||||
| Total securities | $ | 810,619 | $ | 799,999 | $ | 838,131 | $ | 782,088 | $ | 748,883 |
| Less allowance for credit losses (2) | 174 | 174 | - | - | - | |||||
| Net securities | $ | 810,445 | $ | 799,825 | $ | 838,131 | $ | 782,088 | $ | 748,883 |
| ANALYSIS OF DEPOSITS | ||||||||||
| Deposit mix: | ||||||||||
| Noninterest-bearing demand deposits | $ | 1,258,885 | $ | 1,269,578 | $ | 1,145,378 | $ | 1,175,085 | $ | 1,177,482 |
| Interest-bearing demand deposits | 2,976,696 | 2,916,054 | 2,987,469 | 2,938,194 | 2,488,755 | |||||
| Time deposits | 452,171 | 445,067 | 460,659 | 499,021 | 560,982 | |||||
| Brokered deposits | 1,183 | 1,084 | 5,631 | 59,968 | 122,556 | |||||
| Total deposits | $ | 4,688,935 | $ | 4,631,782 | $ | 4,599,137 | $ | 4,672,268 | $ | 4,349,775 |
| ANALYSIS OF BORROWINGS | ||||||||||
| Borrowings mix: | ||||||||||
| Term FHLB advances | $ | - | $ | - | $ | - | $ | 40,000 | $ | 90,000 |
| Overnight FHLB advances (3) | 40,000 | 25,000 | 15,000 | - | 55,000 | |||||
| FRB borrowings | - | - | - | - | 100,000 | |||||
| Other short-term borrowings | 7,070 | 6,840 | 5,430 | 30,430 | 24,818 | |||||
| Subordinated notes | 113,771 | 118,731 | 118,691 | 118,577 | 68,516 | |||||
| Junior subordinated debentures | 38,067 | 38,030 | 37,993 | 37,955 | 37,916 | |||||
| Total borrowings | $ | 198,908 | $ | 188,601 | $ | 177,114 | $ | 226,962 | $ | 376,250 |
| (1) | The Company adopted ASU 2016-13 "CECL", effective<br>January 1, 2021, which included a change in class of receivable and segment categories. | |||||||||
| --- | --- | |||||||||
| (2) | The Company adopted ASU 2016-13 "CECL", effective<br>January 1, 2021, which requires an allowance for credit losses ("ACL") on loans/leases, off-balance sheet ("OBS")<br>exposures and held to maturity ("HTM") securities, recorded through the income statement within the provision for credit losses. | |||||||||
| The Day 1 adjustments to ACL were as follows: loans/leases<br>($8.1) million, OBS $9.1 million, HTM securities $183 thousand. | ||||||||||
| (3) | At the most recent quarter-end, the weighted-average rate of<br>these overnight borrowings was 0.26%. |
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QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
| For the Quarter Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||
| INCOME STATEMENT | ||||||||||||||
| Interest income | $ | 48,903 | $ | 47,565 | $ | 49,851 | $ | 50,890 | $ | 48,650 | ||||
| Interest expense | 5,387 | 5,590 | 6,144 | 6,309 | 7,694 | |||||||||
| Net interest income | 43,516 | 41,975 | 43,707 | 44,581 | 40,956 | |||||||||
| Provision for credit losses (1) | - | 6,713 | 7,080 | 20,342 | 19,915 | |||||||||
| Net interest income after provision for loan/lease losses | $ | 43,516 | $ | 35,262 | $ | 36,627 | $ | 24,239 | $ | 21,041 | ||||
| Trust department fees | $ | 2,848 | $ | 2,801 | $ | 2,388 | $ | 2,280 | $ | 2,227 | ||||
| Investment advisory and management fees | 1,039 | 940 | 926 | 1,266 | 1,399 | |||||||||
| Deposit service fees | 1,492 | 1,408 | 1,875 | 1,403 | 1,286 | |||||||||
| Gain on sales of residential real estate loans | 1,184 | 1,337 | 1,462 | 1,370 | 1,196 | |||||||||
| Gain on sales of government guaranteed portions of loans | - | - | 224 | - | - | |||||||||
| Swap fee income/capital markets revenue | 9,568 | 13,557 | 21,402 | 26,688 | 19,927 | |||||||||
| Securities gains (losses), net | (88 | ) | - | 617 | 1,802 | 65 | ||||||||
| Earnings on bank-owned life insurance | 451 | 471 | 461 | 502 | 612 | |||||||||
| Debit card fees | 1,084 | 975 | 923 | 946 | 775 | |||||||||
| Correspondent banking fees | 269 | 314 | 270 | 220 | 198 | |||||||||
| Other | 1,449 | 1,686 | 1,469 | 1,482 | 941 | |||||||||
| Total noninterest income | $ | 19,296 | $ | 23,489 | $ | 32,017 | $ | 37,959 | $ | 28,626 | ||||
| Salaries and employee benefits | $ | 23,044 | $ | 24,847 | $ | 30,446 | $ | 25,999 | $ | 21,304 | ||||
| Occupancy and equipment expense | 3,965 | 4,108 | 4,917 | 3,807 | 3,748 | |||||||||
| Professional and data processing fees | 3,702 | 3,443 | 3,871 | 3,758 | 3,646 | |||||||||
| Post-acquisition compensation, transition and integration costs | - | - | 25 | (32 | ) | 70 | ||||||||
| Disposition costs | - | 8 | 64 | 192 | (83 | ) | ||||||||
| FDIC insurance, other insurance and regulatory fees | 986 | 1,065 | 1,272 | 1,301 | 908 | |||||||||
| Loan/lease expense | 457 | 300 | 465 | 403 | 339 | |||||||||
| Net cost of (income from) and gains/losses on operations of other real estate | (113 | ) | 39 | (4 | ) | 16 | (332 | ) | ||||||
| Advertising and marketing | 853 | 627 | 1,276 | 750 | 552 | |||||||||
| Bank service charges | 572 | 523 | 523 | 488 | 501 | |||||||||
| Losses on liability extinguishment | - | - | 1,457 | 1,874 | 429 | |||||||||
| Correspondent banking expense | 198 | 200 | 205 | 205 | 212 | |||||||||
| Intangibles amortization | 508 | 508 | 521 | 531 | 548 | |||||||||
| Loss (gain) on sale of subsidiary | - | - | (147 | ) | 305 | - | ||||||||
| Other | 1,503 | 1,560 | 1,473 | 1,241 | 1,288 | |||||||||
| Total noninterest expense | $ | 35,675 | $ | 37,228 | $ | 46,364 | $ | 40,838 | $ | 33,130 | ||||
| Net income before income taxes | $ | 27,137 | $ | 21,523 | $ | 22,280 | $ | 21,360 | $ | 16,537 | ||||
| Federal and state income tax expense | 4,788 | 3,541 | 4,009 | 4,016 | 2,798 | |||||||||
| Net income | $ | 22,349 | $ | 17,982 | $ | 18,271 | $ | 17,344 | $ | 13,739 | ||||
| Basic EPS | $ | 1.41 | $ | 1.14 | $ | 1.16 | $ | 1.10 | $ | 0.87 | ||||
| Diluted EPS | $ | 1.39 | $ | 1.12 | $ | 1.14 | $ | 1.09 | $ | 0.86 | ||||
| Weighted average common shares outstanding | 15,813,932 | 15,803,643 | 15,775,596 | 15,767,152 | 15,747,056 | |||||||||
| Weighted average common and common equivalent shares outstanding | 16,045,239 | 16,025,548 | 15,973,054 | 15,923,578 | 15,895,336 | |||||||||
| (1) | Includes<br> provision for credit losses related for loans/leases totaling ($141) thousand, HTM securities totaling $0 and OBS exposures totaling<br> $141 thousand for the six months ended June 30, 2021. For the three months ended March 31, 2021, provision for credit losses related<br> for loans/leases totaled $6.0 million, HTM securities totaled ($9) thousand and OBS exposures totaled $729<br> thousand. Provision for credit losses only included provision for loans/leases for years prior to 2021. | |||||||||||||
| --- | --- |
6
QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
| For Six Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | June 30, | |||||
| 2021 | 2020 | |||||
| (dollars in thousands, except per share data) | ||||||
| INCOME STATEMENT | ||||||
| Interest income | $ | 96,468 | $ | 97,632 | ||
| Interest expense | 10,977 | 18,986 | ||||
| Net interest income | 85,491 | 78,646 | ||||
| Provision for credit losses (1) | 6,713 | 28,282 | ||||
| Net interest income after provision for loan/lease losses | $ | 78,778 | $ | 50,364 | ||
| Trust department fees | $ | 5,649 | $ | 4,539 | ||
| Investment advisory and management fees | 1,979 | 3,126 | ||||
| Deposit service fees | 2,900 | 2,763 | ||||
| Gain on sales of residential real estate loans | 2,521 | 1,848 | ||||
| Gain on sales of government guaranteed portions of loans | - | - | ||||
| Swap fee income/capital markets revenue | 23,125 | 26,731 | ||||
| Securities gains (losses), net | (88 | ) | 65 | |||
| Earnings on bank-owned life insurance | 922 | 941 | ||||
| Debit card fees | 2,059 | 1,533 | ||||
| Correspondent banking fees | 583 | 413 | ||||
| Other | 3,135 | 1,863 | ||||
| Total noninterest income | $ | 42,785 | $ | 43,822 | ||
| Salaries and employee benefits | $ | 47,891 | $ | 39,823 | ||
| Occupancy and equipment expense | 8,073 | 7,780 | ||||
| Professional and data processing fees | 7,145 | 7,015 | ||||
| Post-acquisition compensation, transition and integration costs | - | 221 | ||||
| Disposition costs | 8 | 434 | ||||
| FDIC insurance, other insurance and regulatory fees | 2,051 | 1,591 | ||||
| Loan/lease expense | 757 | 567 | ||||
| Net cost of (income from) and gains/losses on operations of other real estate | (74 | ) | (319 | ) | ||
| Advertising and marketing | 1,480 | 1,234 | ||||
| Bank service charges | 1,095 | 1,005 | ||||
| Losses on liability extinguishment | - | 576 | ||||
| Correspondent banking expense | 398 | 428 | ||||
| Intangibles amortization | 1,016 | 1,097 | ||||
| Goodwill impairment | - | 500 | ||||
| Other | 3,063 | 2,585 | ||||
| Total noninterest expense | $ | 72,903 | $ | 64,537 | ||
| Net income before income taxes | $ | 48,660 | $ | 29,649 | ||
| Federal and state income tax expense | 8,329 | 4,682 | ||||
| Net income | $ | 40,331 | $ | 24,967 | ||
| Basic EPS | $ | 2.55 | $ | 1.58 | ||
| Diluted EPS | $ | 2.52 | $ | 1.56 | ||
| Weighted average common shares outstanding | 15,808,788 | 15,771,926 | ||||
| Weighted average common and common equivalent shares outstanding | 16,035,394 | 15,956,958 | ||||
| (1) | Includes provision for credit losses related for loans/leases<br>totaling $5.9 million, HTM securities totaling ($9) thousand and OBS exposures totaling $871 thousand for the six months ended June 30,<br>2021. Provision for credit losses only included provision for loans/leases for years prior to 2021. | |||||
| --- | --- |
7
QCR Holdings, Inc.
Consolidated FinancialHighlights
(Unaudited)
| As of and for the Quarter Ended | For the Six Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | |||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||||
| COMMON SHARE DATA | |||||||||||||||||||||
| Common shares outstanding | 15,763,522 | 15,843,732 | 15,805,711 | 15,792,357 | 15,790,611 | ||||||||||||||||
| Book value per common share (1) | $ | 40.00 | $ | 38.42 | $ | 37.57 | $ | 36.26 | $ | 35.21 | |||||||||||
| Tangible book value per common share (Non-GAAP) (2) | $ | 34.64 | $ | 33.06 | $ | 32.16 | $ | 30.82 | $ | 29.63 | |||||||||||
| Closing stock price | $ | 48.09 | $ | 47.22 | $ | 39.59 | $ | 27.41 | $ | 31.18 | |||||||||||
| Market capitalization | $ | 758,068 | $ | 748,141 | $ | 625,748 | $ | 432,869 | $ | 492,351 | |||||||||||
| Market price / book value | 120.24 | % | 122.90 | % | 105.38 | % | 75.60 | % | 88.55 | % | |||||||||||
| Market price / tangible book value | 138.83 | % | 142.83 | % | 123.09 | % | 88.95 | % | 105.23 | % | |||||||||||
| Earnings per common share (basic) LTM (3) | $ | 4.81 | $ | 4.27 | $ | 3.84 | $ | 3.69 | $ | 3.55 | |||||||||||
| Price earnings ratio LTM (3) | 10.00 x | 11.06 x | 10.31 x | 7.43 x | 8.78 x | ||||||||||||||||
| TCE / TA (Non-GAAP) (4) | 9.55 | % | 9.42 | % | 9.08 | % | 8.42 | % | 8.48 | % | |||||||||||
| CONDENSED STATEMENT OF CHANGES IN<br><br> STOCKHOLDERS' EQUITY | |||||||||||||||||||||
| Beginning balance | $ | 608,719 | $ | 593,793 | $ | 572,613 | $ | 556,020 | $ | 539,139 | |||||||||||
| Cumulative effect from the adoption of ASU 2016-13 "CECL" | - | (937 | ) | - | - | - | |||||||||||||||
| Net income | 22,349 | 17,982 | 18,271 | 17,344 | 13,739 | ||||||||||||||||
| Other comprehensive income (loss), net of tax | 4,179 | (1,751 | ) | 3,157 | (614 | ) | 3,622 | ||||||||||||||
| Common stock cash dividends declared | (951 | ) | (949 | ) | (947 | ) | (945 | ) | (945 | ) | |||||||||||
| Repurchase and cancellation of 100,000 shares of <br><br>common stock<br> as a result of a share repurchase <br><br>program | (4,800 | ) | - | - | - | - | |||||||||||||||
| Other (5) | 980 | 581 | 699 | 808 | 465 | ||||||||||||||||
| Ending balance | $ | 630,476 | $ | 608,719 | $ | 593,793 | $ | 572,613 | $ | 556,020 | |||||||||||
| REGULATORY CAPITAL RATIOS (6): | |||||||||||||||||||||
| Total risk-based capital ratio | 14.77 | % | 14.85 | % | 14.95 | % | 14.93 | % | 13.71 | % | |||||||||||
| Tier 1 risk-based capital ratio | 11.31 | % | 11.31 | % | 11.34 | % | 11.25 | % | 11.07 | % | |||||||||||
| Tier 1 leverage capital ratio | 10.29 | % | 10.10 | % | 9.49 | % | 9.21 | % | 8.91 | % | |||||||||||
| Common equity tier 1 ratio | 10.57 | % | 10.55 | % | 10.55 | % | 10.44 | % | 10.25 | % | |||||||||||
| KEY PERFORMANCE RATIOS AND OTHER METRICS | |||||||||||||||||||||
| Return on average assets (annualized) | 1.56 | % | 1.27 | % | 1.25 | % | 1.19 | % | 0.95 | % | 1.41 | % | 0.93 | % | |||||||
| Return on average total equity (annualized) | 14.33 | % | 11.91 | % | 12.43 | % | 12.06 | % | 9.88 | % | 13.14 | % | 9.30 | % | |||||||
| Net interest margin | 3.28 | % | 3.26 | % | 3.25 | % | 3.36 | % | 3.14 | % | 3.27 | % | 3.26 | % | |||||||
| Net interest margin (TEY) (Non-GAAP)(7) | 3.46 | % | 3.43 | % | 3.45 | % | 3.51 | % | 3.27 | % | 3.45 | % | 3.40 | % | |||||||
| Efficiency ratio (Non-GAAP) (8) | 56.80 | % | 56.87 | % | 61.23 | % | 49.48 | % | 47.61 | % | 56.83 | % | 52.70 | % | |||||||
| Gross loans and leases / total assets (9) | 76.10 | % | 77.25 | % | 74.81 | % | 72.43 | % | 74.01 | % | 76.10 | % | 74.01 | % | |||||||
| Gross loans and leases / total deposits (9) | 94.22 | % | 94.15 | % | 92.43 | % | 90.92 | % | 95.18 | % | 94.22 | % | 95.18 | % | |||||||
| Effective tax rate | 17.64 | % | 16.45 | % | 17.99 | % | 18.80 | % | 16.92 | % | 17.12 | % | 15.79 | % | |||||||
| Full-time equivalent employees (10) | 725 | 720 | 714 | 687 | 712 | 725 | 712 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Assets | $ | 5,739,067 | $ | 5,668,850 | $ | 5,842,299 | $ | 5,820,555 | $ | 5,800,164 | $ | 5,704,151 | $ | 5,374,224 | |||||||
| Loans/leases | 4,412,322 | 4,271,782 | 4,250,951 | 4,185,275 | 3,999,523 | 4,342,440 | 3,842,967 | ||||||||||||||
| Deposits | 4,709,732 | 4,628,889 | 4,742,602 | 4,726,881 | 4,732,626 | 4,669,533 | 4,343,653 | ||||||||||||||
| Total stockholders' equity | 624,000 | 604,012 | 588,042 | 575,061 | 556,047 | 614,061 | 536,775 | ||||||||||||||
| (1) Includes accumulated other comprehensive income (loss). | |||||||||||||||||||||
| --- | |||||||||||||||||||||
| (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP). | |||||||||||||||||||||
| (3) LTM : Last twelve months. | |||||||||||||||||||||
| (4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations. | |||||||||||||||||||||
| (5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation. | |||||||||||||||||||||
| (6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release. | |||||||||||||||||||||
| (7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations. | |||||||||||||||||||||
| (8) See GAAP to Non-GAAP reconciliations. | |||||||||||||||||||||
| (9) Excludes assets held for sale as of June 30, 2020. | |||||||||||||||||||||
| (10) Growth<br> in full-time equivalents from September 30, 2020 to December 31, 2020 due to the addition of new positions created to build scale.<br> Decrease from June 30, 2020 to September 30, 2020 due to sale of Bates Companies. |
8
| ANALYSIS OF NET INTEREST INCOME AND MARGIN | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For<br> the Quarter Ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June<br> 30, 2021 | March<br> 31, 2021 | June<br> 30, 2020 | |||||||||||||||||||
| **** | Average Balance | Interest Earned or Paid | Average Yield or Cost | **** | Average Balance | Interest Earned or Paid | Average Yield or Cost | **** | Average Balance | Interest Earned or Paid | Average Yield or Cost | **** | |||||||||
| (dollars in thousands) | |||||||||||||||||||||
| Fed<br> funds sold | $ | 1,817 | $ | 1 | 0.06 | % | $ | 1,847 | $ | 1 | 0.05 | % | $ | 865 | $ | 1 | 0.46 | % | |||
| Interest-bearing<br> deposits at financial institutions | 88,396 | 35 | 0.16 | % | 116,446 | 37 | 0.13 | % | 533,483 | 135 | 0.10 | % | |||||||||
| Securities<br> (1) | 798,732 | 7,294 | 3.66 | % | 810,059 | 7,050 | 3.48 | % | 697,559 | 6,536 | 3.77 | % | |||||||||
| Restricted<br> investment securities | 19,614 | 238 | 4.79 | % | 18,064 | 219 | 4.84 | % | 21,234 | 288 | 5.46 | % | |||||||||
| Loans<br> (1) | 4,412,322 | 43,776 | 3.98 | % | 4,271,782 | 42,525 | 4.04 | % | 3,999,522 | 43,417 | 4.37 | % | |||||||||
| Total<br> earning assets (1) | $ | 5,320,881 | $ | 51,344 | 3.87 | % | $ | 5,218,198 | $ | 49,832 | 3.86 | % | $ | 5,252,663 | $ | 50,377 | 3.86 | % | |||
| Interest-bearing<br> deposits | $ | 2,978,382 | $ | 2,050 | 0.28 | % | $ | 2,981,306 | $ | 1,986 | 0.27 | % | $ | 2,840,860 | $ | 2,429 | 0.34 | % | |||
| Time<br> deposits | 440,599 | 1,184 | 1.08 | % | 448,035 | 1,441 | 1.30 | % | 809,233 | 3,337 | 1.66 | % | |||||||||
| Short-term<br> borrowings | 10,883 | 1 | 0.05 | % | 7,141 | 1 | 0.07 | % | 25,064 | 22 | 0.35 | % | |||||||||
| Federal<br> Home Loan Bank advances | 21,802 | 15 | 0.28 | % | 13,078 | 9 | 0.28 | % | 95,616 | 347 | 1.46 | % | |||||||||
| Subordinated<br> debentures | 115,339 | 1,570 | 5.45 | % | 118,706 | 1,594 | 5.37 | % | 68,480 | 994 | 5.84 | % | |||||||||
| Junior<br> subordinated debentures | 38,044 | 564 | 5.86 | % | 38,007 | 559 | 5.88 | % | 37,891 | 572 | 6.07 | % | |||||||||
| Total<br> interest-bearing liabilities | $ | 3,605,049 | $ | 5,384 | 0.60 | % | $ | 3,606,273 | $ | 5,590 | 0.63 | % | $ | 3,877,144 | $ | 7,701 | 0.80 | % | |||
| Net<br> interest income (1) | $ | 45,960 | $ | 44,242 | $ | 42,676 | |||||||||||||||
| Net<br> interest margin (2) | 3.28 | % | 3.26 | % | 3.14 | % | |||||||||||||||
| Net<br> interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.46 | % | 3.43 | % | 3.27 | % | |||||||||||||||
| Adjusted<br> net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.44 | % | 3.40 | % | 3.21 | % | |||||||||||||||
| For<br> the Six Months Ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| June<br> 30, 2021 | June<br> 30, 2020 | ||||||||||||||||||||
| **** | Average Balance | Interest Earned or Paid | Average Yield or Cost | **** | Average Balance | Interest Earned or Paid | Average Yield or Cost | **** | |||||||||||||
| (dollars<br> in thousands) | |||||||||||||||||||||
| Fed<br> funds sold | $ | 1,830 | $ | 1 | 0.05 | % | $ | 3,095 | $ | 18 | 1.17 | % | |||||||||
| Interest-bearing<br> deposits at financial institutions | 102,343 | 71 | 0.14 | % | 331,048 | 495 | 0.30 | % | |||||||||||||
| Securities<br> (1) | 804,364 | 14,344 | 3.57 | % | 658,433 | 12,616 | 3.85 | % | |||||||||||||
| Restricted<br> investment securities | 18,843 | 456 | 4.81 | % | 21,300 | 546 | 5.15 | % | |||||||||||||
| Loans<br> (1) | 4,342,440 | 86,299 | 4.01 | % | 3,842,966 | 87,474 | 4.58 | % | |||||||||||||
| Total<br> earning assets (1) | $ | 5,269,820 | $ | 101,171 | 3.87 | % | $ | 4,856,842 | $ | 101,149 | 4.19 | % | |||||||||
| Interest-bearing<br> deposits | $ | 2,979,835 | $ | 4,036 | 0.27 | % | $ | 2,610,248 | $ | 7,756 | 0.60 | % | |||||||||
| Time<br> deposits | 444,297 | 2,625 | 1.19 | % | 797,184 | 7,216 | 1.82 | % | |||||||||||||
| Short-term<br> borrowings | 9,021 | 3 | 0.06 | % | 22,190 | 86 | 0.78 | % | |||||||||||||
| Federal<br> Home Loan Bank advances | 17,464 | 25 | 0.28 | % | 103,512 | 796 | 1.55 | % | |||||||||||||
| Subordinated<br> debentures | 117,014 | 3,164 | 5.41 | % | 68,449 | 1,988 | 5.84 | % | |||||||||||||
| Junior<br> subordinated debentures | 38,026 | 1,125 | 5.87 | % | 37,872 | 1,144 | 6.07 | % | |||||||||||||
| Total<br> interest-bearing liabilities | $ | 3,605,657 | $ | 10,978 | 0.61 | % | $ | 3,639,455 | $ | 18,986 | 1.05 | % | |||||||||
| Net<br> interest income (1) | $ | 90,193 | $ | 82,163 | |||||||||||||||||
| Net<br> interest margin (2) | 3.27 | % | 3.26 | % | |||||||||||||||||
| Net<br> interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.45 | % | 3.40 | % | |||||||||||||||||
| Adjusted<br> net interest margin (TEY) (Non-GAAP) (1) (2) (3) | 3.42 | % | 3.35 | % |
(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
(2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
9
QCR Holdings, Inc.
Consolidated FinancialHighlights
(Unaudited)
| As<br> of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, | March<br> 31, | December<br> 31, | September<br> 30, | June<br> 30, | |||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||
| (dollars<br> in thousands, except per share data) | |||||||||||||||
| ROLLFORWARD<br> OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES | |||||||||||||||
| Beginning<br> balance | $ | 81,831 | $ | 84,376 | $ | 79,582 | $ | 60,827 | $ | 42,233 | |||||
| Adoption<br> of ASU 2016-13 "CECL" - Day 1 adjustment | - | (8,102 | ) | - | - | - | |||||||||
| Provision<br> charged to expense | (141 | ) | 5,993 | 7,080 | 20,342 | 19,915 | |||||||||
| Loans/leases<br> charged off | (3,674 | ) | (713 | ) | (2,779 | ) | (1,819 | ) | (1,450 | ) | |||||
| Recoveries<br> on loans/leases previously charged off | 878 | 277 | 493 | 232 | 129 | ||||||||||
| Ending<br> balance | $ | 78,894 | $ | 81,831 | $ | 84,376 | $ | 79,582 | $ | 60,827 | |||||
| NONPERFORMING<br> ASSETS | |||||||||||||||
| Nonaccrual<br> loans/leases | $ | 8,230 | $ | 13,863 | $ | 13,940 | $ | 17,597 | $ | 12,099 | |||||
| Accruing<br> loans/leases past due 90 days or more | 57 | - | 3 | 86 | 99 | ||||||||||
| Total<br> nonperforming loans/leases | 8,287 | 13,863 | 13,943 | 17,683 | 12,198 | ||||||||||
| Other<br> real estate owned | 1,820 | 173 | 20 | 125 | 157 | ||||||||||
| Other<br> repossessed assets | - | 50 | 135 | 110 | 25 | ||||||||||
| Total<br> nonperforming assets | $ | 10,107 | $ | 14,086 | $ | 14,098 | $ | 17,918 | $ | 12,380 | |||||
| ASSET<br> QUALITY RATIOS | |||||||||||||||
| Nonperforming<br> assets / total assets (1) | 0.17 | % | 0.25 | % | 0.25 | % | 0.31 | % | 0.22 | % | |||||
| ACL<br> for loans and leases / total loans/leases (2) | 1.79 | % | 1.88 | % | 1.98 | % | 1.87 | % | 1.47 | % | |||||
| ACL<br> for loans and leases / nonperforming loans/leases (2) | 952.02 | % | 590.28 | % | 605.15 | % | 450.05 | % | 498.66 | % | |||||
| Net<br> charge-offs as a % of average loans/leases | 0.06 | % | 0.01 | % | 0.05 | % | 0.04 | % | 0.03 | % | |||||
| INTERNALLY<br> ASSIGNED RISK RATING (3) | |||||||||||||||
| Special<br> mention (rating 6) | $ | 51,613 | $ | 53,466 | $ | 71,482 | $ | 79,587 | $ | 104,608 | |||||
| Substandard<br> (rating 7) | 79,719 | 84,982 | 66,081 | 70,409 | 39,855 | ||||||||||
| Doubtful<br> (rating 8) | - | - | - | - | - | ||||||||||
| $ | 131,332 | $ | 138,448 | $ | 137,563 | $ | 149,996 | $ | 144,463 | ||||||
| Criticized<br> loans (4) | $ | 131,332 | $ | 138,448 | $ | 137,563 | $ | 149,996 | $ | 144,463 | |||||
| Classified<br> loans (5) | 79,719 | 84,982 | 66,081 | 70,409 | 39,855 | ||||||||||
| Criticized<br> loans as a % of total loans/leases | 2.97 | % | 3.17 | % | 3.24 | % | 3.53 | % | 3.49 | % | |||||
| Classified<br> loans as a % of total loans/leases | 1.80 | % | 1.95 | % | 1.55 | % | 1.66 | % | 0.96 | % |
(1) Excludes assets held for sale as of June 30, 2020.
(2) Prior to adoption of ASU 2016-13 "CECL", upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance and impacts this ratio. There have been no acquisitions since adopting ASU 2016-13 "CECL", which requires an allowance to be established on acquired loans.
(3) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.
(5) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.
10
QCR Holdings, Inc.
Consolidated FinancialHighlights
(Unaudited)
| For the Quarter Ended | For the Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
| SELECT FINANCIAL DATA - SUBSIDIARIES | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||
| (dollars in thousands) | |||||||||||||||
| TOTAL ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 2,059,634 | $ | 2,101,634 | $ | 1,984,245 | |||||||||
| m2 Equipment Finance, LLC | 255,338 | 245,842 | 241,114 | ||||||||||||
| Cedar Rapids Bank and Trust | 1,913,761 | 1,847,070 | 2,021,043 | ||||||||||||
| Community State Bank - Ankeny | 1,079,929 | 1,041,861 | 903,648 | ||||||||||||
| Springfield First Community Bank | 850,067 | 818,605 | 745,474 | ||||||||||||
| TOTAL DEPOSITS | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,810,772 | $ | 1,841,518 | $ | 1,707,970 | |||||||||
| Cedar Rapids Bank and Trust | 1,395,721 | 1,362,927 | 1,351,784 | ||||||||||||
| Community State Bank - Ankeny | 938,428 | 912,419 | 778,499 | ||||||||||||
| Springfield First Community Bank | 608,676 | 602,274 | 564,710 | ||||||||||||
| TOTAL LOANS & LEASES | |||||||||||||||
| Quad City Bank and Trust (1) | $ | 1,577,681 | $ | 1,568,131 | $ | 1,485,971 | |||||||||
| m2 Equipment Finance, LLC | 258,520 | 249,478 | 239,351 | ||||||||||||
| Cedar Rapids Bank and Trust | 1,360,202 | 1,382,336 | 1,380,672 | ||||||||||||
| Community State Bank - Ankeny | 786,208 | 743,892 | 671,772 | ||||||||||||
| Springfield First Community Bank | 693,614 | 666,692 | 601,843 | ||||||||||||
| TOTAL LOANS & LEASES / TOTAL DEPOSITS | |||||||||||||||
| Quad City Bank and Trust (1) | 87 | % | 85 | % | 87 | % | |||||||||
| Cedar Rapids Bank and Trust | 97 | % | 101 | % | 102 | % | |||||||||
| Community State Bank - Ankeny | 84 | % | 82 | % | 86 | % | |||||||||
| Springfield First Community Bank | 114 | % | 111 | % | 107 | % | |||||||||
| TOTAL LOANS & LEASES / TOTAL ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | 77 | % | 75 | % | 75 | % | |||||||||
| Cedar Rapids Bank and Trust | 71 | % | 75 | % | 68 | % | |||||||||
| Community State Bank - Ankeny | 73 | % | 71 | % | 74 | % | |||||||||
| Springfield First Community Bank | 82 | % | 81 | % | 81 | % | |||||||||
| ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES | |||||||||||||||
| Quad City Bank and Trust (1) | 1.91 | % | 1.98 | % | 1.51 | % | |||||||||
| m2 Equipment Finance, LLC | 3.61 | % | 3.73 | % | 1.99 | % | |||||||||
| Cedar Rapids Bank and Trust (2) | 1.92 | % | 2.05 | % | 1.62 | % | |||||||||
| Community State Bank - Ankeny (2) | 1.69 | % | 1.74 | % | 1.56 | % | |||||||||
| Springfield First Community Bank (2) | 1.35 | % | 1.43 | % | 0.94 | % | |||||||||
| RETURN ON AVERAGE ASSETS | |||||||||||||||
| Quad City Bank and Trust (1) | 1.64 | % | 1.35 | % | 0.68 | % | 1.50 | % | 0.95 | % | |||||
| Cedar Rapids Bank and Trust | 2.39 | % | 2.45 | % | 2.36 | % | 2.42 | % | 2.01 | % | |||||
| Community State Bank - Ankeny | 1.16 | % | 0.81 | % | 0.25 | % | 0.99 | % | 0.37 | % | |||||
| Springfield First Community Bank | 1.77 | % | 1.16 | % | 1.04 | % | 1.47 | % | 1.16 | % | |||||
| NET INTEREST MARGIN PERCENTAGE (3) | |||||||||||||||
| Quad City Bank and Trust (1) | 3.30 | % | 3.20 | % | 2.88 | % | 3.25 | % | 3.22 | % | |||||
| Cedar Rapids Bank and Trust (4) | 3.60 | % | 3.55 | % | 3.37 | % | 3.58 | % | 3.40 | % | |||||
| Community State Bank - Ankeny (5) | 3.66 | % | 3.70 | % | 3.77 | % | 3.68 | % | 3.84 | % | |||||
| Springfield First Community Bank (6) | 3.54 | % | 3.55 | % | 3.88 | % | 3.54 | % | 3.85 | % | |||||
| ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET INTEREST MARGIN, NET | |||||||||||||||
| Cedar Rapids Bank and Trust | $ | 92 | $ | 13 | $ | 62 | $ | 105 | $ | 111 | |||||
| Community State Bank - Ankeny | 68 | 317 | 72 | 385 | 136 | ||||||||||
| Springfield First Community Bank | 168 | 211 | 641 | 379 | 1,193 | ||||||||||
| QCR Holdings, Inc. (7) | (37 | ) | (37 | ) | (39 | ) | (74 | ) | (79 | ) | |||||
| (1) | Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC | ||||||||||||||
| --- | --- | ||||||||||||||
| is also presented separately for certain (applicable) measurements. | |||||||||||||||
| (2) | Prior to adoption of ASU 2016-13 "CECL", upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance and impacts this ratio. | ||||||||||||||
| There have been no acquisitions since adopting ASU 2016-13 "CECL", which requires an allowance to be established on acquired loans. | |||||||||||||||
| (3) | Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using | ||||||||||||||
| a 21% tax rate. | |||||||||||||||
| (4) | Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest | ||||||||||||||
| margin (Non-GAAP) would have been 3.67% for the quarter ended June 30, 2021, 3.55% for the quarter ended March 31, 2021 and 3.71% for the | |||||||||||||||
| quarter ended June 30, 2020. | |||||||||||||||
| (5) | Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest | ||||||||||||||
| margin (Non-GAAP) would have been 3.63% for the quarter ended June 30, 2021, 3.54% for the quarter ended March 31, 2021 and 3.35% for the | |||||||||||||||
| quarter ended June 30, 2020. | |||||||||||||||
| (6) | Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest | ||||||||||||||
| margin (Non-GAAP) would have been 3.50% for the quarter ended June 30, 2021, 3.49% for the quarter ended March 31, 2021 and 4.29% for the | |||||||||||||||
| quarter ended June 30, 2020. | |||||||||||||||
| (7) | Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013. |
11
QCR Holdings, Inc.
Consolidated FinancialHighlights
(Unaudited)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| GAAP TO NON-GAAP RECONCILIATIONS | 2021 | 2021 | 2020 | 2020 | 2020 | ||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1) | |||||||||||||||
| Stockholders' equity (GAAP) | $ | 630,476 | $ | 608,719 | $ | 593,793 | $ | 572,613 | $ | 556,020 | |||||
| Less: Intangible assets | 84,431 | 84,939 | 85,447 | 85,968 | 88,120 | ||||||||||
| Tangible common equity (non-GAAP) | $ | 546,045 | $ | 523,780 | $ | 508,346 | $ | 486,645 | $ | 467,900 | |||||
| Total assets (GAAP) | $ | 5,805,165 | $ | 5,645,147 | $ | 5,682,797 | $ | 5,864,560 | $ | 5,604,761 | |||||
| Less: Intangible assets | 84,431 | 84,939 | 85,447 | 85,968 | 88,120 | ||||||||||
| Tangible assets (non-GAAP) | $ | 5,720,734 | $ | 5,560,208 | $ | 5,597,350 | $ | 5,778,592 | $ | 5,516,641 | |||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 9.55 | % | 9.42 | % | 9.08 | % | 8.42 | % | 8.48 | % | |||||
| TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1) | |||||||||||||||
| Stockholder's equity (GAAP) | $ | 630,476 | $ | 608,719 | $ | 593,793 | $ | 572,613 | $ | 556,020 | |||||
| Less: PPP loan interest income (post-tax) (2) | 10,788 | 9,479 | 7,691 | 4,934 | 2,085 | ||||||||||
| Less: Intangible assets | 84,431 | 84,939 | 85,447 | 85,968 | 88,120 | ||||||||||
| Tangible common equity, excluding PPP loan income (non-GAAP) | $ | 535,257 | $ | 514,301 | $ | 500,655 | $ | 481,711 | $ | 465,815 | |||||
| Total assets (GAAP) | $ | 5,805,165 | $ | 5,645,147 | $ | 5,682,797 | $ | 5,864,560 | $ | 5,604,761 | |||||
| Less: PPP loans | 147,506 | 243,860 | 273,146 | 357,506 | 358,052 | ||||||||||
| Less: Intangible assets | 84,431 | 84,939 | 85,447 | 85,968 | 88,120 | ||||||||||
| Tangible assets, excluding PPP loans (non-GAAP) | $ | 5,573,228 | $ | 5,316,348 | $ | 5,324,204 | $ | 5,421,086 | $ | 5,158,589 | |||||
| Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP) | 9.60 | % | 9.67 | % | 9.40 | % | 8.89 | % | 9.03 | % | |||||
| (1) | This ratio is a non-GAAP financial measure. The Company's management<br>believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common<br>equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total<br>assets, which are the most directly comparable GAAP financial measures. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | PPP interest income (post-tax) is calculated using an estimated<br>effective tax rate of 21%. |
12
QCR Holdings, Inc.
Consolidated FinancialHighlights
(Unaudited)
| For<br> the Quarter Ended | For<br> the Six Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | March 31, | December<br> 31, | September<br> 30, | June 30, | June 30, | June 30, | |||||||||||||||
| GAAP<br> TO NON-GAAP RECONCILIATIONS | 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||
| (dollars<br> in thousands, except per share data) | |||||||||||||||||||||
| ADJUSTED NET INCOME (1) | |||||||||||||||||||||
| Net<br> income (GAAP) | $ | 22,349 | $ | 17,982 | $ | 18,271 | $ | 17,344 | $ | 13,739 | $ | 40,331 | $ | 24,967 | |||||||
| Less non-core<br> items (post-tax) (2): | |||||||||||||||||||||
| Income: | |||||||||||||||||||||
| Securities<br> gains(losses), net | (69 | ) | - | 487 | 1,424 | 51 | $ | (69 | ) | $ | 51 | ||||||||||
| Mark to<br> Market gains (losses) on derivatives, net | (58 | ) | 129 | - | - | - | 71 | $ | - | ||||||||||||
| Loss<br> on syndicated loan | - | - | (210 | ) | - | - | - | $ | - | ||||||||||||
| Total non-core<br> income (non-GAAP) | $ | (127 | ) | $ | 129 | $ | 277 | $ | 1,424 | $ | 51 | $ | 2 | $ | 51 | ||||||
| Expense: | |||||||||||||||||||||
| Losses<br> on debt extinguishment, net | $ | - | $ | - | $ | 1,151 | $ | 1,480 | $ | 339 | $ | - | $ | 455 | |||||||
| Goodwill<br> impairment | - | - | - | - | - | - | 500 | ||||||||||||||
| Disposition<br> costs | - | 7 | 51 | 152 | (66 | ) | 7 | 343 | |||||||||||||
| Acquisition<br> costs (4) | - | - | - | - | - | - | - | ||||||||||||||
| Separation<br> agreement | - | 734 | - | - | - | 734 | - | ||||||||||||||
| Post-acquisition<br> compensation, transition and integration costs | - | - | 20 | (25 | ) | 55 | - | 175 | |||||||||||||
| Loss<br> on sale of subsidiary | - | - | (102 | ) | 212 | - | - | - | |||||||||||||
| Total non-core<br> expense (non-GAAP) | $ | - | $ | 741 | $ | 1,119 | $ | 1,819 | $ | 329 | $ | 741 | $ | 1,472 | |||||||
| Adjusted net income (non-GAAP)<br> (1) | $ | 22,476 | $ | 18,594 | $ | 19,113 | $ | 17,739 | $ | 14,016 | $ | 41,070 | $ | 26,388 | |||||||
| ADJUSTED<br> EARNINGS PER COMMON SHARE (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP)<br> (from above) | $ | 22,476 | $ | 18,594 | $ | 19,113 | $ | 17,739 | $ | 14,016 | $ | 41,070 | $ | 26,388 | |||||||
| Weighted average common shares outstanding | 15,813,932 | 15,803,643 | 15,775,596 | 15,767,152 | 15,747,056 | 15,808,788 | 15,771,926 | ||||||||||||||
| Weighted<br> average common and common equivalent shares outstanding | 16,045,239 | 16,025,548 | 15,973,054 | 15,923,578 | 15,895,336 | 16,035,394 | 15,956,958 | ||||||||||||||
| Adjusted earnings per common<br> share (non-GAAP): | |||||||||||||||||||||
| Basic | $ | 1.42 | $ | 1.18 | $ | 1.21 | $ | 1.13 | $ | 0.89 | $ | 2.60 | $ | 1.67 | |||||||
| Diluted | $ | 1.40 | $ | 1.16 | $ | 1.20 | $ | 1.11 | $ | 0.88 | $ | 2.56 | $ | 1.65 | |||||||
| ADJUSTED<br> RETURN ON AVERAGE ASSETS (1) | |||||||||||||||||||||
| Adjusted net income (non-GAAP)<br> (from above) | $ | 22,476 | $ | 18,594 | $ | 19,113 | $ | 17,739 | $ | 14,016 | $ | 41,070 | $ | 26,388 | |||||||
| Average Assets | $ | 5,739,067 | $ | 5,668,850 | $ | 5,842,299 | $ | 5,820,555 | $ | 5,800,164 | $ | 5,704,151 | $ | 5,374,224 | |||||||
| Adjusted return on average<br> assets (annualized) (non-GAAP) | 1.57 | % | 1.31 | % | 1.31 | % | 1.22 | % | 0.97 | % | 1.44 | % | 0.98 | % | |||||||
| NET<br> INTEREST MARGIN (TEY) (4) | |||||||||||||||||||||
| Net interest income (GAAP) | $ | 43,516 | $ | 41,975 | $ | 43,707 | $ | 44,581 | $ | 40,948 | $ | 85,491 | $ | 78,646 | |||||||
| Plus:<br> Tax equivalent adjustment (3) | 2,444 | 2,267 | 2,631 | 1,942 | 1,728 | 4,702 | 3,517 | ||||||||||||||
| Net interest income - tax equivalent<br> (Non-GAAP) | $ | 45,960 | $ | 44,242 | $ | 46,338 | $ | 46,523 | $ | 42,676 | $ | 90,193 | $ | 82,163 | |||||||
| Less: Acquisition<br> accounting net accretion | 291 | 504 | 1,077 | 833 | 736 | 795 | 1,361 | ||||||||||||||
| Adjusted net interest income | $ | 45,669 | $ | 43,738 | $ | 45,261 | $ | 45,690 | $ | 41,940 | $ | 89,398 | $ | 80,802 | |||||||
| Average earning assets | $ | 5,320,881 | $ | 5,218,198 | $ | 5,345,677 | $ | 5,278,298 | $ | 5,252,663 | $ | 5,269,820 | $ | 4,856,842 | |||||||
| Net interest margin (GAAP) | 3.28 | % | 3.26 | % | 3.25 | % | 3.36 | % | 3.14 | % | 3.27 | % | 3.26 | % | |||||||
| Net interest margin (TEY)<br> (Non-GAAP) | 3.46 | % | 3.43 | % | 3.45 | % | 3.51 | % | 3.27 | % | 3.45 | % | 3.40 | % | |||||||
| Adjusted net interest margin<br> (TEY) (Non-GAAP) | 3.44 | % | 3.40 | % | 3.37 | % | 3.44 | % | 3.21 | % | 3.42 | % | 3.35 | % | |||||||
| EFFICIENCY<br> RATIO (5) | |||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 35,675 | $ | 37,228 | $ | 46,364 | $ | 40,838 | $ | 33,122 | $ | 72,903 | $ | 64,537 | |||||||
| Net interest income (GAAP) | $ | 43,516 | $ | 41,975 | $ | 43,707 | $ | 44,581 | $ | 40,948 | $ | 85,491 | $ | 78,646 | |||||||
| Noninterest<br> income (GAAP) | 19,296 | 23,489 | 32,017 | 37,959 | 28,626 | 42,785 | 43,822 | ||||||||||||||
| Total income | $ | 62,812 | $ | 65,464 | $ | 75,724 | $ | 82,540 | $ | 69,574 | $ | 128,276 | $ | 122,468 | |||||||
| Efficiency ratio (noninterest<br> expense/total income) (Non-GAAP) | 56.80 | % | 56.87 | % | 61.23 | % | 49.48 | % | 47.61 | % | 56.83 | % | 52.70 | % | |||||||
| ALLOWANCE<br> FOR CREDIT LOSSES ON LOANS/LEASES TO TOTAL<br><br> LOANS/LEASES, EXCLUDING PPP LOANS (6) | |||||||||||||||||||||
| Allowance for credit losses on<br> loans and leases | $ | 78,894 | $ | 81,831 | $ | 84,376 | $ | 79,582 | $ | 60,827 | $ | 78,894 | $ | 60,827 | |||||||
| Total loans and leases | $ | 4,417,705 | $ | 4,361,051 | $ | 4,251,129 | $ | 4,247,977 | $ | 4,140,259 | $ | 4,417,705 | $ | 4,140,259 | |||||||
| Less: PPP<br> loans | 147,506 | 243,860 | 273,146 | 357,506 | 358,052 | 147,506 | 358,052 | ||||||||||||||
| Total loans and leases, excluding<br> PPP loans | $ | 4,270,199 | $ | 4,117,191 | $ | 3,977,983 | $ | 3,890,471 | $ | 3,782,207 | $ | 4,270,199 | $ | 3,782,207 | |||||||
| Allowance for credit losses<br> on loans and leases to total loans and leases, excluding PPP loans | 1.85 | % | 1.99 | % | 2.12 | % | 2.05 | % | 1.61 | % | 1.85 | % | 1.61 | % | |||||||
| LOAN<br> GROWTH ANNUALIZED, EXCLUDING PPP LOANS | |||||||||||||||||||||
| Total loans and leases | $ | 4,417,705 | $ | 4,361,051 | $ | 4,251,129 | $ | 4,247,977 | $ | 4,140,259 | $ | 4,417,705 | $ | 4,140,259 | |||||||
| Less: PPP<br> loans | 147,506 | 243,860 | 273,146 | 357,506 | 358,052 | 147,506 | 358,052 | ||||||||||||||
| Total loans and leases, excluding<br> PPP loans | $ | 4,270,199 | $ | 4,117,191 | $ | 3,977,983 | $ | 3,890,471 | $ | 3,782,207 | $ | 4,270,199 | $ | 3,782,207 | |||||||
| Loan growth annualized, excluding<br> PPP loans | 14.87 | % | 14.00 | % | 9.00 | % | 11.45 | % | 8.37 | % | 12.90 | % | 4.99 | % | |||||||
| (1) | Adjusted net income, Adjusted net income attributable to QCR<br>Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are non-GAAP financial measures. The<br>Company's management believes that these measurements are important to investors as they exclude non-recurring income and expense items,<br>therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure<br>is reconciled to net income, which is the most directly comparable GAAP financial measure. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (2) | Nonrecurring items (post-tax) are calculated using an estimated<br>effective tax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain/loss on sale of assets and<br>liabiliities of subsidary has an estimated effective tax rate of 30.5%. | ||||||||||||||||||||
| (3) | Interest earned and yields on nontaxable securities and loans<br>are determined on a tax equivalent basis using a 21%. | ||||||||||||||||||||
| (4) | Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the<br>tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent<br>measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most<br>directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition<br>accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods. | ||||||||||||||||||||
| (5) | 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. | ||||||||||||||||||||
| (6) | Allowance for credit losses on loans and leases<br>to total loans and leases, excluding PPP loans is a non-GAAP measure. The Company's management utilizes this ratio to remove<br>from the allowance calculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans<br>have no allowance for loan and lease loss allocation. |
13