QCR Holdings, Inc. Announces Record Net Income of $9.2 Million for the First Quarter of 2017

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| Source: QCR Holdings, Inc.

MOLINE, Ill., April 20, 2017 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ:QCRH) today announced net income of $9.2 million and diluted earnings per share (“EPS”) of $0.68 for the quarter ended March 31, 2017.  By comparison, for the quarter ended December 31, 2016, the Company reported net income of $8.5 million and diluted EPS of $0.64.  For the quarter ended March 31, 2016, the Company reported net income of $6.4 million and diluted EPS of $0.53.

“Our operating performance for the first quarter was strong,” commented Douglas M. Hultquist, President and Chief Executive Officer, “and we continue to strategize and pursue ways to improve our profitability through our ongoing key initiatives.  Our return on average assets has improved to 1.12% from 0.98%, when comparing the first quarter of 2017 to the same period of the prior year.  This is the result of strong year-over-year organic loan growth, robust growth in core deposits, reductions in wholesale borrowings, margin improvements, modest operating expense growth, and strong fee income.  Our acquisition of Community State Bank, based in Ankeny, Iowa (“CSB”) also contributed to our improved profitability.”

A new accounting pronouncement became effective on January 1, 2017 that affects the accounting for stock compensation.  In the past, the tax benefit related to stock options exercised and restricted stock awards vested was recorded directly to equity.  Effective January 1, 2017, this tax benefit is reflected as a credit to income tax expense.  This change in accounting resulted in $533 thousand of reduced income tax expense for the current quarter.    

Annualized Loan and Lease Growth of 5.0% and Deposit Growth of 20.4% for First Quarter
Swap Fee Income and Gains on the Sale of Government Guaranteed Loans Total $1.1 Million for Quarter

During the first quarter of 2017, the Company’s total assets increased $79.1 million, or 2%, to a total of $3.38 billion, while total loans and leases grew $30.4 million, or 1.3%.  Loan and lease growth was funded by deposits, which increased $136.7 million, or 5.1%, in the first quarter.  Continued growth in correspondent deposits produced a majority of this increase.  This very strong deposit growth also allowed the Company to further reduce borrowings and provides liquidity for future loan and lease growth.

 “Organic loan and lease growth totaled $30.4 million for the quarter, or an annual growth rate of 5.0%,” commented Mr. Hultquist.  “While this is a slower start to the year relative to recent periods, we still aim to achieve targeted organic growth of 10-12% for the full year, assuming no major economic shifts.  We intend to grow primarily through market share increases, as customers continue to appreciate the way we do business and are attracted to our relationship-based community banking model.”

“We started the year off strong, with swap fee income and gains on the sale of government guaranteed loans totaling $1.1 million for the first quarter,” said Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer.  “We plan to continue executing these types of transactions, as they provide unique and beneficial solutions for our clients.  We also look forward to offering these products in the Des Moines metro market through Community State Bank.”

Net Interest Income Impacted by
Acquisition Accounting

Net interest income totaled $27.7 million for the quarter ended March 31, 2017.  By comparison, net interest income totaled $29.3 million and $20.6 million for the quarters ended December 31, 2016 and March 31, 2016, respectively.  Acquisition-related accretion (net) totaled $1.9 million for the quarter ended March 31, 2017.  By comparison, acquisition-related accretion (net) totaled $3.0 million and $45 thousand for the quarters ended December 31, 2016 and March 31, 2016, respectively.  When comparing the first quarter of 2017 to the fourth quarter of 2016, it is also important to note that the fourth quarter of 2016 included two more days, equating to roughly $615 thousand of net interest income.  Excluding acquisition-related accretion and the difference in net interest income related to the number of days in the quarter, net interest income of $26.4 million was flat for the current quarter, compared to $26.3 million for the quarter ended December 31, 2016.

“Net interest margin (excluding acquisition accounting accretion) was stable at 3.65% for the first quarter of 2017, compared to 3.64% for the fourth quarter of 2016,” stated Mr. Gipple.  “Also important to note is that loan yield (excluding loan discount accretion) was relatively flat when comparing linked quarters at 4.34% for the first quarter of 2017 and 4.35% for the fourth quarter of 2016.  Additionally, we had a successful quarter growing core deposits and while loan growth was modest, we expect to put this liquidity to work in loans and leases in order to expand core margin in future periods.”

Nonperforming Assets Flat for First Quarter

Nonperforming assets (“NPAs”) remained fairly flat in the current quarter.  The ratio of NPAs to total assets was 0.81% at March 31, 2017, which was down slightly from 0.82% at December 31, 2016 and up from 0.71% a year ago. 

“While credit quality metrics remain strong in comparison to peers, we remain committed to further improving asset quality in 2017,” stated Mr. Hultquist.    

The Company’s provision for loan and lease losses totaled $2.1 million for the first quarter of 2017, which was down $494 thousand from the prior quarter, and flat compared to the first quarter of 2016.  The decrease in provision in the first quarter of 2017 was primarily attributable to CSB.  As acquired loans renew, the discount associated with those loans is eliminated and the Company must establish an allowance.  This resulted in $774 thousand of provision expense in the first quarter of 2017 compared to $1.2 million of provision expense in the fourth quarter of 2016.  As of March 31, 2017, the Company’s allowance to total loans and leases was 1.32%, which was up from 1.28% at December 31, 2016 and down from 1.46% at March 31, 2016. 

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through the acquisition of CSB were recorded at market value; therefore, there was no allowance associated with CSB’s loans at acquisition.  Management continues to evaluate the allowance needed on the acquired CSB loans factoring in the net remaining discount ($8.0 million at March 31, 2017).  When factoring this remaining discount into the Company’s allowance to total loans and leases calculation, the Company’s allowance as a percentage of total loans and leases increases from 1.32% to 1.64%.

Capital Levels Remain Strong

As of March 31, 2017, the Company’s total risk-based capital ratio was 11.65%, the common equity tier 1 ratio was 9.45% and the tangible common equity to tangible assets ratio increased to 8.20%.  By comparison, these respective ratios were 11.56%, 9.41% and 8.04% as of December 31, 2016.
             
“As a result of solid earnings performance, capital ratios continue to be strong and we are growing tangible common equity at a steady pace,” stated Mr. Gipple.

Continued Focus on Seven Key Initiatives

The Company continues to focus on the following initiatives in an effort to improve profitability and drive increased shareholder value:

  • Continue strong organic loan and lease growth to maintain loans and leases to total assets ratio in the range of 70-75%
  • Continue focus on growing core deposits to maintain reliance on wholesale funding at less than 15% of assets
  • Continue to focus on generating gains on sale of USDA and SBA loans, and fee income on swaps, as a significant and consistent component of core revenue
  • Grow wealth management net income by 10% annually
  • Carefully manage noninterest expense growth
  • Maintain asset quality metrics at better than peer levels
  • Participate as an acquirer in the consolidation taking place in our markets to further boost ROAA, improve efficiency ratio, and increase EPS

Conference Call Details

The Company will host an earnings call/webcast on April 21, 2017 at 9 a.m. central time.  Dial-in information for the call is toll-free 1-888-317-6016 (international 1-412-317-6016).  Participants should request to join the QCR Holdings, Inc. call. The event will be archived and available for digital replay through May 5, 2017.  The replay access information is toll-free 1-877-344-7529 (international 1-412-317-0088); access code 10104342.  A webcast of the teleconference can be accessed at the Company’s News and Events page at http://www.qcrh.com or http://services.choruscall.com/links/qcrh170421.html.  The archived audio webcast will be available until April 21, 2018.  Participants should visit the Company’s website or call in to the conference line set forth below at least 10 minutes prior to the scheduled start of the call.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company, which serves the Quad City, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, and Rockford communities through its wholly owned subsidiary banks.  Quad City Bank & Trust Company, which is based in Bettendorf, Iowa, and commenced operations in 1994, Cedar Rapids Bank & Trust Company, which is based in Cedar Rapids, Iowa, and commenced operations in 2001, Community State Bank, which is based in Ankeny, Iowa and was acquired by the Company in 2016, and Rockford Bank & Trust Company, which is based in Rockford, Illinois, and commenced operations in 2005, provide full-service commercial and consumer banking and trust and wealth management services.  Quad City Bank & Trust Company also provides correspondent banking services.  In addition, Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin.  Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company.

Special Note Concerning Forward-Looking Statements.  This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.  Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “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 any statement in light of new information or future events.

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements.  These factors include, among others, the following: (i) the strength of the local, national and international economies; (ii) the economic impact of any future terrorist threats and attacks, and the response of the United States to any such threats and attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of the acquisition and the possibility that the transaction costs may be greater than anticipated; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x)  unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices.  These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

 

 
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
 
 As of 
 March 31,December 31,September 30,June 30,March 31, 
  2017 2016 2016 2016 2016 
       
 (dollars in thousands) 
       
CONDENSED BALANCE SHEET      
       
Cash and due from banks$  56,326$  70,570$  61,213$  49,581$  44,931 
Federal funds sold and interest-bearing deposits   173,219   86,206   96,047   68,432   57,229 
Securities   557,646   574,022   564,930   510,959   537,317 
Net loans/leases   2,403,791   2,374,730   2,331,774   1,894,676   1,846,428 
Core deposit intangible   7,150   7,381   7,614   1,372   1,422 
Goodwill   13,111   13,111   13,632   3,223   3,223 
Other assets   169,770   175,924   205,776   155,191   150,123 
Total assets$   3,381,013 $   3,301,944 $   3,280,986 $   2,683,434 $   2,640,673  
       
Total deposits$  2,805,931$  2,669,261$  2,594,913$  1,973,594$  1,989,573 
Total borrowings   231,534   290,952   312,104   381,874   347,901 
Other liabilities   47,708   55,690   93,112   52,849   68,056 
Total stockholders' equity   295,840   286,041   280,857   275,117   235,143 
Total liabilities and stockholders' equity$   3,381,013 $   3,301,944 $   3,280,986 $   2,683,434 $   2,640,673  
       
ANALYSIS OF LOAN PORTFOLIO      
Loan/lease mix:      
Commercial and industrial loans$  851,578$  827,637$  804,308$  706,261$  682,057 
Commercial real estate loans   1,106,842   1,093,459   1,070,305   784,379   766,159 
Direct financing leases   159,368   165,419   166,924   169,928   172,774 
Residential real estate loans   231,326   229,233   229,081   180,482   173,096 
Installment and other consumer loans   78,771   81,666   81,918   73,658   71,842 
Deferred loan/lease origination costs, net of fees   7,965   8,073   8,065   8,065   7,895 
Total loans/leases$  2,435,850$  2,405,487$  2,360,601$  1,922,773$  1,873,823 
Less allowance for estimated losses on loans/leases   32,059   30,757   28,827   28,097   27,395 
Net loans/leases$   2,403,791 $   2,374,730 $   2,331,774 $   1,894,676 $   1,846,428  
       
ANALYSIS OF SECURITIES PORTFOLIO      
Securities mix:      
U.S. government sponsored agency securities$  47,556$  46,084$  67,885$  88,321$  132,742 
Municipal securities 356,776 374,463 360,330 302,689 285,009 
Residential mortgage-backed and related securities 147,504 147,702 133,173 116,765 116,452 
Other securities 5,810 5,773 3,542 3,184 3,114 
Total securities$   557,646 $   574,022 $   564,930 $   510,959 $   537,317  
       
ANALYSIS OF DEPOSITS      
Deposit mix:      
Noninterest-bearing demand deposits$  777,150$  797,415$  764,615$  615,764$  641,859 
Interest-bearing demand deposits   1,486,047   1,369,226   1,298,781   918,036   916,455 
Time deposits 458,170 439,169 420,470 337,584 331,786 
Brokered deposits 84,564 63,451 111,047 102,210 99,473 
Total deposits$   2,805,931 $   2,669,261 $   2,594,913 $   1,973,594 $   1,989,573  
       
ANALYSIS OF BORROWINGS      
Borrowings mix:      
Term FHLB advances$  59,000$  63,000$  83,343$  78,000$  80,000 
Overnight FHLB advances (1) 47,550 74,500 55,300 118,900 70,500 
Wholesale structured repurchase agreements 45,000 45,000 45,000 100,000 100,000 
Customer repurchase agreements 7,170 8,132 8,265 21,441 52,153 
Federal funds purchased 12,300 31,840 51,750 30,120 11,870 
Junior subordinated debentures 33,514 33,480 33,446 33,413 33,378 
Other borrowings 27,000 35,000   35,000   -    -  
Total borrowings$   231,534 $   290,952 $   312,104 $   381,874 $   347,901  
       
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 1.05%.   
       

 

        
   For the Quarter Ended
   March 31,December 31,September 30,June 30,March 31,
    2017 2016  2016 2016 2016
        
   (dollars in thousands, except per share data)
        
INCOME STATEMENT      
Interest income $  31,345$  32,236 $  26,817$  23,913$  23,502
Interest expense    3,676   2,956    3,186   2,904   2,905
Net interest income     27,669   29,280    23,631   21,009   20,597
Provision for loan/lease losses    2,105   2,599    1,608   1,198   2,073
Net interest income after provision for loan/lease losses $   25,564 $   26,681  $   22,023 $   19,811 $   18,524
        
        
Trust department fees $  1,740$  1,558 $  1,519$  1,512$  1,576
Investment advisory and management fees    962   876    766   693   658
Deposit service fees    1,316   1,411    1,151   947   931
Gain on sales of residential real estate loans    96   142    144   84   60
Gain on sales of government guaranteed portions of loans    951   458    219   1,604   879
Swap fee income    114   350    334   168   857
Securities gains, net    -    (36)   4,252   18   358
Earnings on bank-owned life insurance    470   447    450   480   394
Debit card fees    703   688    475   344   308
Correspondent banking fees    245   249    254   245   302
Other      687   886    859   667   499
Total noninterest income $   7,284 $   7,029  $   10,423 $   6,762 $   6,822
        
        
Salaries and employee benefits $  13,307$  13,396 $  11,202$  10,917$  10,801
Occupancy and equipment expense    2,502   2,630    2,086   1,885   1,827
Professional and data processing fees    2,083   2,192    1,931   1,542   1,447
Acquisition costs    -    40    2,046   355   - 
FDIC insurance, other insurance and regulatory fees    621   683    583   650   634
Loan/lease expense    294   242    103   154   163
Net cost of operation of other real estate    14   78    133   278   102
Advertising and marketing    609   760    548   433   386
Bank service charges    424   446    415   415   416
Losses on debt extinguishment, net    -    357    4,137   -    83
Correspondent banking expense    198   186    206   182   177
Other     1,221   1,298    1,090   933   918
Total noninterest expense $   21,273 $   22,308  $   24,480 $   17,744 $   16,954
        
Net income before taxes $   11,575 $   11,402  $   7,966 $   8,829 $   8,392
Income tax expense    2,390   2,873    1,858   2,153   2,019
Net income  $   9,185 $   8,529  $   6,108 $   6,676 $   6,373
        
Basic EPS $  0.70$  0.65 $  0.47$  0.54$  0.54
Diluted EPS $  0.68$  0.64 $  0.46$  0.53$  0.53
        
Weighted average common shares outstanding    13,133,382   13,087,592    13,066,777   12,335,077   11,793,620
Weighted average common and common equivalent shares outstanding   13,488,417   13,323,883    13,269,703   12,516,474   11,953,949
        

 

        
 For the Quarter Ended  
 March 31December 31,September 30,June 30,March 31,  
  2017  2016  2016  2016  2016   
        
 (dollars in thousands, except per share data)  
 
COMMON SHARE DATA       
Common shares outstanding    13,161,219    13,106,845    13,075,307    13,057,368    11,814,911   
Book value per common share (1)$22.48 $21.82 $21.48 $21.07 $19.90   
Tangible book value per common share (2)$20.94 $20.11 $19.74 $20.72 $19.51   
Closing stock price$42.35 $43.30 $31.74 $27.19 $23.79   
Market capitalization$557,378 $567,526 $415,010 $355,030 $281,077   
Market price / book value 188.41% 198.41% 147.77% 129.05% 119.53%  
Market price / tangible book value 202.26% 215.36% 160.79% 131.24% 121.94%  
Earnings per common share (basic) LTM (3)$2.36 $2.20 $2.13 $2.21 $1.62   
Price earnings ratio LTM (3) 17.94 x  19.68 x  14.90 x  12.30 x  14.69 x   
TCE / TA (4) 8.20% 8.04% 7.92% 10.10% 8.74%  
        
        
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY       
Beginning balance$  286,041 $  280,857 $  275,117 $  235,143 $  225,886   
Net income   9,185    8,529    6,108    6,676    6,373   
Other comprehensive income (loss), net of tax   411    (3,681)   (361)   1,181    2,525   
Common stock cash dividends declared   (657)   (523)   (521)   (521)   (471)  
Proceeds from issuance of 1,215,000 shares of
  common stock, net of costs
   -     -     -     29,829    -    
Other (5)   860    859    514    2,809    830   
Ending balance$   295,840  $   286,041  $   280,857  $   275,117  $   235,143    
        
        
REGULATORY CAPITAL RATIOS (6):       
Total risk-based capital ratio 11.65% 11.56% 11.30% 14.29% 12.68%  
Tier 1 risk-based capital ratio 10.53% 10.46% 10.29% 13.04% 11.45%  
Tier 1 leverage capital ratio 9.40% 9.10% 10.09% 11.18% 9.85%  
Common equity tier 1 ratio 9.45% 9.41% 9.22% 11.72% 10.11%  
        
        
KEY PERFORMANCE RATIOS AND OTHER METRICS       
Return on average assets (annualized) 1.12% 1.04% 0.85% 1.01% 0.98%  
Return on average total equity (annualized) 12.63% 12.04% 8.78% 10.46% 11.02%  
Net interest margin 3.65% 3.80% 3.48% 3.40% 3.37%  
Net interest margin (TEY) (Non-GAAP)(7) 3.90% 4.02% 3.71% 3.62% 3.59%  
Efficiency ratio (Non-GAAP) (8) 60.86% 61.44% 71.89% 63.89% 61.83%  
Gross loans and leases / total assets 72.04% 72.85% 71.95% 71.65% 70.96%  
Effective tax rate 20.65% 25.20% 23.32% 24.39% 24.06%  
Full-time equivalent employees (9) 561  572  572  410  406   
        
        
AVERAGE BALANCES        
Assets$  3,274,713 $  3,277,814 $  2,865,947 $  2,640,678 $  2,602,350   
Loans/leases   2,398,387    2,358,960    2,077,376    1,899,932    1,833,950   
Deposits   2,692,009    2,717,923    2,243,397    2,033,116    1,980,056   
Total stockholders' equity   290,906    283,292    278,369    255,391    231,247   
        
(1) Includes accumulated other comprehensive income (loss).     
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets.    
(3) LTM : Last twelve months.       
(4) TCE / TCA : tangible common equity / total tangible assets.  See GAAP to non-GAAP reconciliations.   
(5) Mainly 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) Full-time equivalent employees increased in the third quarter of 2016 due to the acquisition of CSB. 

 

             
ANALYSIS OF NET INTEREST INCOME AND MARGIN
         
             
  For the Quarter Ended
  March 31, 2017 December 31, 2016 March 31, 2016
   Average
Balance 
 Interest
Earned or Paid 
 Average Yield
or Cost 
  Average
Balance 
 Interest Earned
or Paid 
 Average Yield
or Cost 
  Average
Balance 
 Interest
Earned or Paid 
 Average Yield
or Cost 
             
  (dollars in thousands)
             
Fed funds sold $  11,092$  150.55% $  11,475$  90.31% $  17,232$  130.30%
Interest-bearing deposits at financial institutions   92,551   1990.87%    123,838   1670.54%    40,635   600.59%
Securities (1)    560,455   5,1583.73%    562,164   4,9703.52%    550,371   4,6853.42%
Restricted investment securities   13,871   1303.80%    12,785   1263.91%    14,140   1313.73%
Loans (1)    2,398,387   27,7934.70%    2,358,960   28,6914.84%    1,833,950   19,9554.38%
Total earning assets (1)$  3,076,356$  33,2954.39% $  3,069,122$  33,9634.40% $  2,456,328$  24,8444.07%
             
Interest-bearing deposits$  1,407,645$  1,1400.33% $  1,387,319$  9280.27% $  925,246$  6150.27%
Time deposits    511,119   1,0930.87%    496,855   9840.79%    399,604   6750.68%
Short-term borrowings   25,188   240.39%    36,728   200.22%    86,539   430.20%
Federal Home Loan Bank advances (4)   114,356   4031.43%    83,231   60.03%    128,436   4421.38%
Junior subordinated debentures   33,497   3334.03%    33,463   3253.86%    34,650   3053.54%
Other borrowings    74,761   6833.71%    73,816   6933.73%    101,738   8253.26%
Total interest-bearing liabilities$  2,166,566$  3,6760.69% $  2,111,412$  2,9560.56% $  1,676,213$  2,9050.70%
             
Net interest income / spread (1) $  29,6193.70%  $  31,0073.84%  $  21,9393.37%
Net interest margin (2)  3.65%   3.80%   3.37%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.90%   4.02%   3.59%
             
             
(1) Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 35% tax rate 
  for each period presented.            
(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.         
(4) Average cost of Federal Home Loan Bank advances for the quarter and year ending December 31, 2016 was affected by the acceleration of the premium on  
  advances recognized at the acquisition of CSB.  $342 thousand was accelerated due to the prepayment of $15.0 million of advances in the fourth quarter of 2016.  

 

 
 As of  
 March 31,December 31,September 30,June 30,March 31,  
  2017  2016  2016  2016  2016   
        
 (dollars in thousands, except per share data)  
        
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES       
Beginning balance$  30,757 $  28,827 $  28,097 $  27,395 $  26,141   
Provision charged to expense   2,105    2,599    1,608    1,198    2,073   
Loans/leases charged off   (893)   (755)   (987)   (634)   (868)  
Recoveries on loans/leases previously charged off   90    86    109    138    49   
Ending balance$   32,059  $   30,757  $   28,827  $   28,097  $   27,395    
        
        
NONPERFORMING ASSETS       
Nonaccrual loans/leases$  14,205 $  13,919 $  14,371 $  10,737 $  10,772   
Accruing loans/leases past due 90 days or more   955    967    392    86    47   
Troubled debt restructures - accruing   6,229    6,347    1,825    1,753    1,157   
Total nonperforming loans/leases   21,389    21,233    16,588    12,576    11,976   
Other real estate owned   5,625    5,523    5,808    6,179    6,680   
Other repossessed assets   285    202    353    154    46   
Total nonperforming assets$   27,299  $   26,958  $   22,749  $   18,909  $   18,702    
        
        
ASSET QUALITY RATIOS       
Nonperforming assets / total assets 0.81% 0.82% 0.69% 0.70% 0.71%  
Allowance / total loans/leases (1) 1.32% 1.28% 1.22% 1.46% 1.46%  
Allowance / nonperforming loans/leases (1) 149.89% 144.85% 173.78% 223.42% 228.75%  
Net charge-offs as a % of average loans/leases 0.03% 0.03% 0.04% 0.03% 0.04%  
        
        
(1) Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminated the allowance and impacts these ratios.  
  

 

          
   For the Quarter Ended  
   March 31, December 31, March 31,  
 SELECT FINANCIAL DATA - SUBSIDIARIES  2017   2016   2016   
                
   (dollars in thousands)  
          
 TOTAL ASSETS        
          
 Quad City Bank and Trust (1) $  1,442,952  $  1,395,785  $  1,361,607   
 m2 Lease Funds, LLC    210,062     213,159     205,777   
 Cedar Rapids Bank and Trust    929,111     913,056     885,858   
 Community State Bank    608,431     600,076    N/A   
 Rockford Bank and Trust    398,455     391,155     367,032   
          
 TOTAL DEPOSITS        
          
 Quad City Bank and Trust (1) $  1,261,075  $  1,125,932  $  1,029,298   
 Cedar Rapids Bank and Trust    733,227     747,785     686,548   
 Community State Bank    527,171     513,588    N/A   
 Rockford Bank and Trust    312,817     311,556     278,129   
          
 TOTAL LOANS & LEASES        
          
 Quad City Bank and Trust (1) $  1,015,241  $  1,010,443  $  950,978   
 m2 Lease Funds, LLC    208,459     211,045     205,214   
 Cedar Rapids Bank and Trust    673,431     652,212     628,580   
 Community State Bank    427,365     429,511    N/A   
 Rockford Bank and Trust    319,813     313,321     294,266   
          
 TOTAL LOANS & LEASES / TOTAL ASSETS        
          
 Quad City Bank and Trust (1)  70%  72%  70%  
 Cedar Rapids Bank and Trust  72%  71%  71%  
 Community State Bank  70%  72%   N/A   
 Rockford Bank and Trust  80%  80%  80%  
          
 ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES        
          
 Quad City Bank and Trust (1)  1.34%  1.33%  1.31%  
 m2 Lease Funds, LLC  1.72%  1.78%  1.80%  
 Cedar Rapids Bank and Trust  1.66%  1.67%  1.66%  
 Community State Bank (2)  0.53%  0.34%   N/A   
 Rockford Bank and Trust  1.58%  1.57%  1.51%  
          
 RETURN ON AVERAGE ASSETS        
          
 Quad City Bank and Trust (1)  1.22%  1.17%  0.95%  
 Cedar Rapids Bank and Trust  1.33%  1.34%  1.39%  
 Community State Bank (3)  1.30%  1.33%   N/A   
 Rockford Bank and Trust  0.86%  0.90%  0.66%  
          
 NET INTEREST MARGIN PERCENTAGE (4)        
          
 Quad City Bank and Trust (1)  3.71%  3.71%  3.60%  
 Cedar Rapids Bank and Trust  3.75%  3.90%  3.75%  
 Community State Bank (5)  5.37%  6.00%   N/A   
 Rockford Bank and Trust  3.43%  3.35%  3.54%  
          
 ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET        
 INTEREST MARGIN, NET        
          
 Cedar Rapids Bank and Trust $  9  $  313  $  79   
 Community State Bank    1,945     2,681    N/A   
 QCR Holdings, Inc. (6)    (33)    (34)    (34)  
          
(1)Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank.  m2 Lease Funds, LLC 
  is also presented separately for certain (applicable) measurements.        
(2)Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminated the allowance and impacts this ratio.   
(3)Community State Bank's return on average assets includes acquisition costs and various purchase accounting adjustments.    
(4)Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using  
 a 35% tax rate for each period presented.         
(5)Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest 
 margin would have been 3.92% and 3.99% for the quarters ended March 31, 2017 and December 31, 2016, respectively.    
(6)Relates to the trust preferred securities acquired as part of the Community National Bank acquisition in 2013.     

 

           
  As of
  March 31, December 31, September 30, June 30, March 31,
GAAP TO NON-GAAP RECONCILIATIONS  2017   2016   2016   2016   2016 
                     
  (dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)          
           
Stockholders' equity (GAAP) $  295,840  $  286,041  $  280,857  $  275,117  $  235,143 
Less: Intangible assets    20,261     22,522     22,755     4,595     4,645 
Tangible common equity (non-GAAP) $  275,579  $  263,519  $  258,102  $  270,522  $  230,498 
           
Total assets (GAAP) $  3,381,013  $  3,301,944  $  3,280,986  $  2,683,434  $  2,640,673 
Less: Intangible assets    20,261     22,522     22,755     4,595     4,645 
Tangible assets (non-GAAP) $  3,360,752  $  3,279,422  $  3,258,231  $  2,678,839  $  2,636,028 
           
Tangible common equity to tangible assets ratio (non-GAAP)  8.20%  8.04%  7.92%  10.10%  8.74%
           
           
  For the Quarter Ended
  March 31, December 31, September 30, June 30, March 31,
CORE NET INCOME (2)  2017   2016   2016   2016   2016 
           
Net income (GAAP) $  9,185  $  8,529  $  6,108  $  6,676  $  6,373 
           
Less nonrecurring items (post-tax) (3):          
Income:          
  Securities gains, net $  -  $  (23) $  2,764  $  12  $  233 
Total nonrecurring income (non-GAAP) $  -  $  (23) $  2,764  $  12  $  233 
           
Expense:          
  Losses on debt extinguishment, net $  -  $  232  $  2,689  $  -  $  54 
  Acquisition costs (4)    -     26     1,506     231     - 
Total nonrecurring expense (non-GAAP) $  -  $  258  $  4,195  $  231  $  54 
           
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (2) $   9,185   $   8,810   $   7,539   $   6,895   $   6,194  
           
CORE EARNINGS PER COMMON SHARE (2)          
           
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above) $  9,185  $  8,810  $  7,539  $  6,895  $  6,194 
           
Weighted average common shares outstanding    13,133,382     13,087,592     13,066,777     12,335,077     11,793,620 
Weighted average common and common equivalent shares outstanding   13,488,417     13,323,883     13,269,703     12,516,474     11,953,949 
           
Core earnings per common share (non-GAAP):          
Basic $   0.70   $   0.67   $   0.58   $   0.56   $   0.53  
Diluted $   0.68   $   0.66   $   0.57   $   0.55   $   0.52  
           
CORE RETURN ON AVERAGE ASSETS (2)          
           
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above) $  9,185  $  8,810  $  7,539  $  6,895  $  6,194 
           
Average Assets $  3,274,713  $  3,277,814  $  2,865,947  $  2,640,678  $  2,602,350 
           
Core return on average assets (annualized) (non-GAAP)  1.12%  1.08%  1.05%  1.04%  0.95%
           
NET INTEREST MARGIN (TEY) (5)          
           
Net interest income (GAAP) $  27,669  $  29,280  $  23,631  $  21,009  $  20,597 
           
Plus: Tax equivalent adjustment (6)    1,950     1,727     1,587     1,364     1,342 
           
Net interest income - tax equivalent (Non-GAAP) $  29,619  $  31,007  $  25,218  $  22,373  $  21,939 
           
Average earning assets $  3,076,356  $  3,069,122  $  2,703,162  $  2,484,721  $  2,456,328 
           
Net interest margin (GAAP)  3.65%  3.80%  3.48%  3.40%  3.37%
Net interest margin (TEY) (Non-GAAP)  3.90%  4.02%  3.71%  3.62%  3.59%
           
EFFICIENCY RATIO (7)          
           
Noninterest expense (GAAP) $  21,273  $  22,308  $  24,480  $  17,744  $  16,954 
           
Net interest income (GAAP) $  27,669  $  29,280  $  23,631  $  21,009  $  20,597 
Noninterest income (GAAP)    7,284     7,029     10,423     6,762     6,822 
Total income $  34,953  $  36,309  $  34,054  $  27,771  $  27,419 
           
Efficiency ratio (noninterest expense/total income) (Non-GAAP)  60.86%  61.44%  71.89%  63.89%  61.83%
           
           
(1) This ratio is a non-GAAP financial measure.  The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period 
in common equity.  In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable
GAAP financial measures.
(2) Core net income, core net income attributable to QCR Holdings, Inc. common stockholders, core earnings per common share and core return on average assets are non-GAAP financial measures.  The  
Company's management believes that these measurements are important to investors as they exclude non-recurring income and expense items, therefore, they provide a more realistic
run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is the most directly comparable GAAP financial measure.
(3) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 35%.       
(4) Acquisition costs were analyzed individually for deductibility.  Presented amounts are tax-effected accordingly.    
(5) Net interest margin (TEY) is a non-GAAP financial measure.  The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities.  It is 
also standard industry practice to measure net interest margin using tax-equivalent measures.  In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest 
income, which is the most directly comparable GAAP financial measure.          
(6) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 35% tax rate for each period presented.  
(7) Efficiency ratio is a non-GAAP measure.  The Company's management utilizes this ratio to compare to industry peers.  The ratio is used to calculate overhead as a percentage of revenue.  In compliance 
with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial 
measures.
           

 

Contact:
Todd A. Gipple
Executive Vice President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745