U.S. Markets closed

QCR Holdings, Inc. Announces Record Net Income of $15.1 Million for the Third Quarter of 2019

Third Quarter 2019 Highlights

  • Net income of $15.1 million, or $0.94 per diluted share
  • Adjusted net income (non-GAAP) of $15.9 million, or $1.00 per diluted share
  • Expanded NIM and NIM (TEY)(non-GAAP) each by 12 basis points, to 3.37% and 3.52%, respectively
  • Record noninterest income of $19.9 million for the quarter and $49.0 million year-to-date
  • Definitive agreement to sell Rockford Bank & Trust (“RB&T”) to Heartland Financial USA, Inc.
  • Excluding RB&T held for sale assets and liabilities:
    º  Annualized loan and lease growth was 9.1% for the quarter and 9.4% year-to-date
    º  Deposits were down 1.7% on a linked quarter basis and up 9.6% annualized year-to-date
    º  Nonperforming assets were down $2.5 million, or 15.6% from the prior quarter

MOLINE, Ill., Oct. 23, 2019 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (QCRH) (the “Company”) today announced net income of $15.1 million and diluted earnings per share (“EPS”) of $0.94 for the third quarter of 2019, compared to net income of $13.5 million and diluted EPS of $0.85 for the second quarter of 2019. The third quarter results included $0.7 million of post-acquisition compensation, transition and integration costs (after-tax), compared to $0.6 million of similar costs in the second quarter of 2019. Excluding these expenses and some modest cost for early debt extinguishment, the Company reported adjusted net income (non-GAAP) of $15.9 million and adjusted diluted EPS of $1.00 for the third quarter of 2019, compared to adjusted net income (non-GAAP) of $14.1 million and adjusted diluted EPS of $0.88 for the second quarter of 2019. For the third quarter of 2018, net income and diluted EPS were $8.8 million and $0.55, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $10.4 million and $0.65, respectively.

  For the Quarter Ended
  September 30, June 30, September 30,
$ in millions (except per share data)  2019  2019  2018
Net Income $ 15.1 $ 13.5 $ 8.8
Diluted EPS $ 0.94 $ 0.85 $ 0.55
Adjusted Net Income (non-GAAP)(1) $ 15.9 $ 14.1 $ 10.4
Adjusted Diluted EPS (non-GAAP)(1) $ 1.00 $ 0.88 $ 0.65
(1) See GAAP to non-GAAP reconciliations.      
       

 

“We are very pleased with our results for the third quarter,” commented Larry J. Helling, Chief Executive Officer. “We delivered another record quarter of net income, driven by continued strong loan growth, an expanded net interest margin, record fee income, improved credit quality and careful management of noninterest expenses. Despite the highly competitive lending environment, which has led to industry-wide pressure on rates, we have been able to maintain both our pricing and underwriting discipline. This helped us maintain our loan yields even as we grew loans during the quarter. We continue to attract new clients that appreciate our relationship-based community banking model.”

Agreement to sell Rockford Bank & Trust to Heartland Financial USA

On August 13, 2019 the Company announced that it had entered into a definitive agreement with Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Heartland Financial USA, Inc. to sell to IB&T substantially all of the assets and for IB&T to assume substantially all of the deposits and certain other liabilities of RB&T. The transaction is valued at approximately $59 million and the Company is expected to record an approximate $13 million pre-tax gain on the sale excluding costs. The transaction is expected to close in the fourth quarter of 2019.  As a result, substantially all of RB&T’s assets and liabilities are classified as held for sale as of September 30, 2019, which impacts balance sheet comparisons to prior quarters. 

Annualized Loan and Lease Growth of 9.1%, excluding RB&T

During the third quarter of 2019, the Company’s total assets increased $97.5 million to a total of $5.3 billion. Total loans and leases declined by $300.2 million, entirely as a result of classifying substantially all of  RB&T’s loans as held for sale, totaling $368.5 million, gross.  Excluding RB&T’s loans for both the second and third quarters of 2019, total loans and leases grew by $80.3 million, or 2.3% on a linked quarter basis.

Total deposits declined by $520.3 million mainly as a result of classifying substantially all of RB&T’s liabilities as held for sale, which included deposits of $451.5 million. Excluding RB&T’s deposits for both the second and third quarters of 2019, total deposits declined by $67.1 million, driven primarily by a decline in higher cost public funds and brokered CDs, as the Company intentionally did not renew certain deposits as they matured. At quarter-end, the percentage of wholesale funds to total assets was 11.6%, as compared to 10.0% in the second quarter. Additionally, at quarter-end, the percentage of gross loans and leases to total assets, excluding assets held for sale, remained consistent on a linked quarter basis at 75%.

“Our loan and lease growth during the third quarter was driven by solid production from both our core commercial lending business and our Specialty Finance Group,” added Mr. Helling. “Excluding RB&T, loan and lease growth for the first nine months of 2019 has been 9.4% on an annualized basis, and given our solid pipeline, we remain confident that we will be able to achieve organic loan growth of between 8% and 10% for the full year.”  

Record Net Interest Income of $40.7 million

Net interest income for the third quarter of 2019 totaled $40.7 million, compared to $38.0 million for the second quarter of 2019 and $38.3 million for the third quarter of 2018. The increase was due to growth in average interest earning assets of $93.3 million, or 2.0% on a linked quarter basis, combined with the positive impact of a 12 basis point increase in reported net interest margin. Acquisition-related net accretion totaled $1.3 million (pre-tax) for the third quarter of 2019, compared to $1.1 million for the second quarter of 2019 and was $1.7 million for the third quarter of 2018. Adjusted net interest income (non-GAAP) was $41.2 million for the third quarter of 2019, compared to $38.7 million for the second quarter of 2019 and $38.2 million for the third quarter of 2018.

In the third quarter, reported net interest margin was 3.37% and, on a tax-equivalent yield basis, net interest margin was 3.52%, both increasing by 12 basis points from the second quarter of 2019. Net interest margin, excluding acquisition-related net accretion was 3.41%, up 10 basis points from the second quarter. The increase in adjusted net interest margin during the quarter was due to a 5 basis point increase in the yield on interest earning assets combined with a 5 basis point decline in the total cost of interest-bearing funds (due to both mix and rate).

  For the Quarter Ended
  September 30, June 30,
  2019 2019
NIM 3.37 % 3.25 %
NIM (TEY)(non-GAAP)(1) 3.52 % 3.40 %
Adjusted NIM (TEY)(non-GAAP)(1) 3.41 % 3.31 %
(1)  See GAAP to non-GAAP reconciliations.    

“Our significant focus on expanding our net interest margin generated positive results as we produced a 12 basis-point increase in reported margin during the third quarter,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “While total deposits declined on a linked-quarter basis after excluding RB&T, it was mainly driven by an intentional runoff of higher cost public funds and brokered CDs, as our core deposits grew modestly during the quarter. Our organic loan and lease growth during the quarter was primarily funded by the excess liquidity that resulted from the strong increase in core deposits we generated in the first half of the year.”

Record Noninterest Income of $19.9 million            

Noninterest income for the third quarter of 2019 totaled $19.9 million, compared to $17.1 million for the second quarter of 2019. The increase was primarily due to a $1.9 million increase in swap fee income and $0.9 million increase on gains on the sale of residential real estate loans and the government guaranteed portions of loans. Wealth management revenue was $4.1 million for the quarter, comparable to the second quarter of 2019. Noninterest income has increased 126% when compared to the third quarter of 2018.

“Noninterest income increased 17% from the second quarter, driven primarily by another quarterly record for swap fee income. This fee income is correlated to strong production from our Specialty Finance Group in the area of tax credit project lending, where our clients are locking in long-term fixed rate financing. Swap fee income and gains on the sale of government guaranteed loans totaled $21.5 million for the first nine months of 2019, already putting us well in excess of our initial full-year target of $8 to $12 million,” added Mr. Gipple.

Noninterest Expenses of $39.9 million

Noninterest expense for the third quarter of 2019 totaled $39.9 million, compared to $36.6 million and $30.5 million for the second quarter of 2019 and third quarter of 2018, respectively. The linked quarter increase was due to a number of factors, including a $0.9 million increase in net costs of operations of other real estate, as the Company reduced the carrying value of an OREO property by $2.0 million. There was also an additional $1.5 million of bonus and commission expense in the quarter, driven by the strong financial results and higher than anticipated swap fee income.  

Asset Quality Remains Solid

Nonperforming assets (“NPAs”) totaled $13.1 million, a decrease of $10.1 million from the second quarter of 2019. Excluding RB&T NPAs held for sale, the decline was $2.5 million, or 15.6%.  The decrease was primarily due to the $2.0 million write down of an existing OREO property.  The lower NPAs resulted in the ratio of NPAs to total assets improving to 0.27% (excluding RB&T) at September 30, 2019, compared to 0.45% at June 30, 2019 and 0.87% at September 30, 2018.

The Company’s provision for loan and lease losses totaled $2.0 million for the third quarter of 2019, which was up modestly from $1.9 million from the prior quarter and down significantly from $6.2 million in the third quarter of 2018. The linked quarter increase in the provision for loan and lease losses was primarily due to $488 thousand of provision related to an RB&T nonperforming loan held for sale.  As of September 30, 2019, the Company’s allowance to total loans and leases was 1.00%, which was down from 1.05% at June 30, 2019 and down from 1.18% at September 30, 2018.

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date. Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount ($7.7 million at September 30, 2019).

Strong Capital Levels

As of September 30, 2019, the Company’s total risk-based capital ratio was 11.93%, the common equity tier 1 ratio was 8.91%, and the tangible common equity to tangible assets ratio was 8.20%. By comparison, these respective ratios were 12.04%, 8.93% and 8.05% as of June 30, 2019.

Continued Focus on Seven Key Initiatives

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

  • Strong organic loan and lease growth in order to maintain loans and leases to total assets ratio in the range of 73% - 78%
  • Grow core deposits to maintain reliance on wholesale funding at less than 15% of assets
  • Generate gains on sale of government guaranteed loans, and fee income on interest rate 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 industry to further boost return on average assets, improve efficiency ratio, and increase EPS

Conference Call Details

The Company will host an earnings call/webcast tomorrow, October 24, 2019, 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 November 7, 2019. The replay access information is 877-344-7529 (international 412-317-0088); access code 10135244. 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, Springfield and Rockford 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, Rockford Bank & Trust Company, based in Rockford, Illinois, commenced operations in 2005, 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 engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 27 locations in Illinois, Iowa, Wisconsin and Missouri. As of September 30, 2019, the Company had approximately $5.3 billion in assets, $3.6 billion in loans and $3.8 billion in deposits. For additional information, please visit our website at www.qcrh.com.

Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “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, state, national and international economies (including the impact of tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations); (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 acquisitions and the possibility that 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.

Contacts:

Todd A. Gipple
President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com

Christopher J. Lindell
Executive Vice President
Corporate Communications
(319) 743-7006
clindell@qcrh.com

QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
                 
                Held for Sale
  As of     As of
  September 30, June 30, March 31, December 31, September 30,     September 30,
  2019 2019 2019 2018 2018     2019
                 
  (dollars in thousands)      
                 
CONDENSED BALANCE SHEET                
                 
Cash and due from banks $ 91,671 $ 87,919 $ 76,527 $ 85,523 $ 73,407     $ 11,031
Federal funds sold and interest-bearing deposits   197,263   205,497   216,032   159,596   129,660       2,415
Securities   555,409   643,803   655,749   662,969   650,745       66,009
Net loans/leases   3,574,154   3,869,415   3,758,268   3,692,907   3,610,309       362,011
Intangibles   15,529   16,089   16,918   17,450   16,137       -
Goodwill   77,748   77,748   77,872   77,832   73,618       -
Other assets   315,061   294,381   265,296   253,433   238,856       24,081
Assets held for sale   465,547   -   -   -   -       -
Total assets $ 5,292,382 $ 5,194,852 $ 5,066,662 $ 4,949,710 $ 4,792,732     $ 465,547
                 
Total deposits $ 3,802,241 $ 4,322,510 $ 4,194,220 $ 3,977,031 $ 3,788,277     $ 451,546
Total borrowings   320,457   230,953   282,994   404,968   483,635       16,157
Other liabilities   179,411   137,089   101,041   94,573   63,433       2,827
Liabilities held for sale   470,530   -   -   -   -       -
Total stockholders' equity   519,743   504,300   488,407   473,138   457,387       -
Total liabilities and stockholders' equity $ 5,292,382 $ 5,194,852 $ 5,066,662 $ 4,949,710 $ 4,792,732     $ 470,530
                 
ANALYSIS OF LOAN PORTFOLIO                
Loan/lease mix:                
Commercial and industrial loans $ 1,469,978 $ 1,548,657 $ 1,479,247 $ 1,429,410 $ 1,380,543      
Commercial real estate loans   1,687,922   1,837,473   1,790,845   1,766,111   1,727,326      
Direct financing leases   92,307   101,180   108,543   117,969   126,752      
Residential real estate loans   245,667   293,479   288,502   290,759   309,288      
Installment and other consumer loans   106,540   120,947   123,087   119,381   100,191      
Deferred loan/lease origination costs, net of fees   7,856   8,783   9,208   9,124   9,286      
Total loans/leases $ 3,610,270 $ 3,910,519 $ 3,799,432 $ 3,732,754 $ 3,653,386      
Less allowance for estimated losses on loans/leases   36,116   41,104   41,164   39,847   43,077      
Net loans/leases $ 3,574,154 $ 3,869,415 $ 3,758,268 $ 3,692,907 $ 3,610,309      
                 
ANALYSIS OF SECURITIES PORTFOLIO                
Securities mix:                
U.S. government sponsored agency securities $ 21,268 $ 35,762 $ 35,843 $ 36,411 $ 36,492      
Municipal securities   391,329   440,853   450,376   459,409   453,275      
Residential mortgage-backed and related securities   123,880   159,228   161,692   159,249   155,733      
Other securities   18,932   7,960   7,838   7,900   5,245      
Total securities $ 555,409 $ 643,803 $ 655,749 $ 662,969 $ 650,745      
                 
ANALYSIS OF DEPOSITS                
Deposit mix:                
Noninterest-bearing demand deposits $ 782,232 $ 795,951 $ 821,599 $ 791,101 $ 802,090      
Interest-bearing demand deposits   2,245,557   2,505,956   2,334,474   2,204,206   2,094,814      
Time deposits   536,352   733,135   719,286   704,903   615,323      
Brokered deposits   238,100   287,468   318,861   276,821   276,050      
Total deposits $ 3,802,241 $ 4,322,510 $ 4,194,220 $ 3,977,031 $ 3,788,277      
                 
ANALYSIS OF BORROWINGS                
Borrowings mix:                
Term FHLB advances $ 60,000 $ 46,433 $ 66,380 $ 76,327 $ 63,399      
Overnight FHLB advances (1)   135,800   59,300   59,800   190,165   295,730      
Wholesale structured repurchase agreements   -   -   35,000   35,000   35,000      
Customer repurchase agreements   2,421   2,181   3,056   2,084   3,049      
Federal funds purchased   16,105   17,010   12,830   26,690   8,670      
Subordinated notes   68,334   68,274   68,215   4,782   -      
Junior subordinated debentures   37,797   37,755   37,713   37,670   37,626      
Other borrowings   -   -   -   32,250   40,161      
Total borrowings $ 320,457 $ 230,953 $ 282,994 $ 404,968 $ 483,635      
                 
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 2.09%.          
                 


QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
       
      For the Quarter Ended
      September 30, June 30, March 31
December 31, September 30,
      2019 2019 2019
2018 2018
                 
      (dollars in thousands, except per share data)
                 
INCOME STATEMENT              
Interest income   $ 56,817   $ 54,181   $ 52,102   $ 52,703   $ 49,831  
Interest expense     16,098     16,168     15,194     13,110     11,517  
Net interest income     40,719     38,013     36,908     39,593     38,314  
Provision for loan/lease losses     2,012     1,941     2,134     1,611     6,206  
Net interest income after provision for loan/lease losses   $ 38,707   $ 36,072   $ 34,774   $ 37,982   $ 32,108  
                           
                           
Trust department fees   $ 2,340   $ 2,361   $ 2,493   $ 2,216   $ 2,196  
Investment advisory and management fees     1,782     1,888     1,736     1,657     1,059  
Deposit service fees     1,813     1,658     1,554     1,623     1,656  
Gain on sales of residential real estate loans, net     890     489     369     361     337  
Gain on sales of government guaranteed portions of loans, net     519     39     31     -     46  
Swap fee income     9,797     7,891     3,198     7,069     1,110  
Securities losses, net     (3 )   (52 )   -     -     -  
Earnings on bank-owned life insurance     489     412     540     341     474  
Debit card fees     886     914     792     807     846  
Correspondent banking fees     189     172     216     179     195  
Other       1,204     1,293     1,064     1,026     890  
Total noninterest income   $ 19,906   $ 17,065   $ 11,993   $ 15,279   $ 8,809  
               
               
Salaries and employee benefits   $ 24,215   $ 22,749   $ 20,879   $ 19,779   $ 17,433  
Occupancy and equipment expense     3,860     3,533     3,694     3,367     3,318  
Professional and data processing fees     4,030     3,031     2,750     3,577     2,396  
Acquisition costs     -     -     -     (4 )   1,292  
Post-acquisition compensation, transition and integration costs     884     708     134     1,427     494  
FDIC insurance, other insurance and regulatory fees     542     926     964     1,065     933  
Loan/lease expense     221     312     214     624     369  
Net cost of (income from) and gains/losses on operations of other real estate     2,078     1,182     298     2,477     (50 )
Advertising and marketing     1,056     1,037     785     1,122     984  
Bank service charges     502     508     483     469     462  
Losses on debt extinguishment, net     148     -     -     -     -  
Correspondent banking expense     209     206     204     207     205  
Intangibles amortization     560     615     532     540     542  
Other       1,640     1,753     1,498     1,760     2,122  
Total noninterest expense   $ 39,945   $ 36,560   $ 32,435   $ 36,410   $ 30,500  
               
Net income before income taxes   $ 18,668   $ 16,577   $ 14,332   $ 16,851   $ 10,417  
Federal and state income tax expense     3,573     3,073     1,414     3,535     1,608  
Net income     $ 15,095   $ 13,504   $ 12,918   $ 13,316   $ 8,809  
               
Basic EPS     $ 0.96   $ 0.86   $ 0.82   $ 0.85   $ 0.56  
Diluted EPS   $ 0.94   $ 0.85   $ 0.81   $ 0.84   $ 0.55  
               
               
Weighted average common shares outstanding     15,739,430     15,714,588     15,693,345     15,641,401     15,625,123  
Weighted average common and common equivalent shares outstanding     15,976,742     15,938,377     15,922,940     15,898,591     15,922,324  
               



QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
       
      For the Nine Months Ended
      September 30,   September 30,
      2019
  2018
           
      (dollars in thousands, except per share data)
           
INCOME STATEMENT        
Interest income   $ 163,099     $ 130,175
Interest expense     47,459       27,374
Net interest income     115,640       102,801
Provision for loan/lease losses     6,087       11,046
Net interest income after provision for loan/lease losses   $ 109,553     $ 91,755
           
           
Trust department fees   $ 7,194     $ 6,491
Investment advisory and management fees     5,406       3,069
Deposit service fees     5,025       4,797
Gain on sales of residential real estate loans     1,748       539
Gain on sales of government guaranteed portions of loans     589       405
Swap fee income     20,886       3,718
Securities losses, net     (56 )     -
Earnings on bank-owned life insurance     1,441       1,292
Debit card fees     2,591       2,456
Correspondent banking fees     578       673
Other       3,562       2,822
Total noninterest income   $ 48,964     $ 26,262
           
           
Salaries and employee benefits   $ 67,843     $ 49,215
Occupancy and equipment expense     11,087       9,517
Professional and data processing fees     9,811       8,016
Acquisition costs     -       1,799
Post-acquisition compensation, transition and integration costs     1,727       659
FDIC insurance, other insurance and regulatory fees     2,432       2,529
Loan/lease expense     748       920
Net cost of (income from) and gains/losses on operations of other real estate   3,557       11
Advertising and marketing     2,878       2,430
Bank service charges     1,494       1,368
Losses on debt extinguishment, net     148       -
Correspondent banking expense     619       614
Intangibles amortization     1,706       1,151
Other       4,891       4,504
Total noninterest expense   $ 108,941     $ 82,733
           
Net income before income taxes   $ 49,576     $ 35,284
Federal and state income tax expense     8,059       5,480
Net income     $ 41,517     $ 29,804
           
Basic EPS     $ 2.64     $ 2.06
Diluted EPS   $ 2.60     $ 2.02
           
           
Weighted average common shares outstanding     15,715,788       14,477,783
Weighted average common and common equivalent shares outstanding     15,946,020       14,786,777
           



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
       
  As of and for the Quarter Ended   For the Nine Months Ended
  September 30, June 30, March 31, December 31, September 30,
  September 30, September 30,
  2019 2019 2019 2018 2018   2019 2018
                 
  (dollars in thousands, except per share data)
                 
COMMON SHARE DATA                
Common shares outstanding   15,790,462     15,772,939     15,755,442     15,718,208     15,673,760        
Book value per common share (1) $ 32.91   $ 31.97   $ 31.00   $ 30.10   $ 29.18        
Tangible book value per common share (2) $ 27.01   $ 26.02   $ 24.98   $ 24.04   $ 23.46        
Closing stock price $ 37.98   $ 34.87   $ 33.92   $ 32.09   $ 40.85        
Market capitalization $ 599,722   $ 550,002   $ 534,425   $ 504,397   $ 640,273        
Market price / book value   115.40 %   109.06 %   109.42 %   106.61 %   139.98 %      
Market price / tangible book value   140.61 %   134.00 %   135.77 %   133.49 %   174.16 %      
Earnings per common share (basic) LTM (3) $ 3.49   $ 3.10   $ 2.99   $ 2.92   $ 2.79        
Price earnings ratio LTM (3) 10.88 x 11.25 x 11.34 x 10.98 x 14.64 x      
TCE / TA (4)   8.20 %   8.05 %   7.92 %   7.78 %   7.82 %      
                 
                 
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY        
Beginning balance $ 504,300   $ 488,407   $ 473,138   $ 457,387   $ 369,588        
Net income   15,095     13,504     12,918     13,316     8,809        
Other comprehensive income (loss), net of tax   543     2,243     2,343     1,943     (612 )      
Common stock cash dividends declared   (944 )   (942 )   (942 )   (939 )   (938 )      
Proceeds from issuance of 1,689,561 shares of common stock, net of costs, as a result of the acquisition of Springfield First Community Bank   -     -     -     -     80,063        
Proceeds from issuance of 23,501 shares of common stock, net of costs, as a result of the acquisition of Bates Companies   -     -     -     1,000     -        
Other (5)   749     1,088     950     431     477        
Ending balance $ 519,743   $ 504,300   $ 488,407   $ 473,138   $ 457,387        
                 
                 
REGULATORY CAPITAL RATIOS (6):                
Total risk-based capital ratio   11.93 %   12.04 %   12.26 %   10.69 %   10.87 %      
Tier 1 risk-based capital ratio   9.70 %   9.76 %   9.87 %   9.77 %   9.83 %      
Tier 1 leverage capital ratio   9.02 %   8.96 %   8.90 %   8.87 %   8.87 %      
Common equity tier 1 ratio   8.91 %   8.93 %   9.02 %   8.89 %   8.92 %      
                 
                 
KEY PERFORMANCE RATIOS AND OTHER METRICS                
Return on average assets (annualized)   1.16 %   1.06 %   1.04 %   1.10 %   0.75 %     1.09 %   0.94 %
Return on average total equity (annualized)   11.70 %   10.84 %   10.71 %   11.42 %   8.08 %     11.09 %   10.30 %
Net interest margin   3.37 %   3.25 %   3.25 %   3.48 %   3.46 %     3.29 %   3.45 %
Net interest margin (TEY) (Non-GAAP)(7)   3.52 %   3.40 %   3.40 %   3.63 %   3.60 %     3.43 %   3.59 %
Efficiency ratio (Non-GAAP) (8)   65.89 %   66.38 %   66.33 %   66.35 %   64.72 %     66.18 %   64.10 %
Gross loans and leases / total assets (10)   74.80 %   75.28 %   74.99 %   75.41 %   76.23 %     74.80 %   76.23 %
Gross loans and leases / total deposits (10)   94.95 %   90.47 %   90.59 %   93.86 %   96.44 %     94.95 %   96.44 %
Effective tax rate   19.14 %   18.54 %   9.87 %   20.98 %   15.44 %     16.26 %   15.53 %
Full-time equivalent employees (9)   766     773     771     755     728       766     728  
                 
                 
AVERAGE BALANCES                
Assets $ 5,217,763   $ 5,077,900   $ 4,968,502   $ 4,842,232   $ 4,677,875     $ 5,088,055   $ 4,242,083  
Loans/leases   3,962,464     3,839,674     3,759,615     3,699,885     3,612,648       3,853,918     3,236,514  
Deposits   4,302,995     4,271,391     4,110,868     3,986,236     3,840,077       4,228,418     3,474,213  
Total stockholders' equity   516,195     498,263     482,423     466,271     436,065       498,960     385,874  
                 
                 
                 
(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) 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) Growth in full-time equivalents due primarily to the merger with Springfield Bancshares, Inc., the acquisition of the Bates Companies and the addition of several
   new positions created to build scale.                
(10) Excludes assets held for sale as of September 30, 2019.              
                 



...
QCR Holdings, Inc. Consolidated
Financial Highlights
(Unaudited)
                     
ANALYSIS OF NET INTEREST INCOME AND MARGIN (4)                    
                       
  For the Quarter Ended
  September 30, 2019   June 30, 2019   September 30, 2018
  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 $ 7,234 $ 42 2.30 %   $ 9,690 $ 56 2.32 %   $ 23,199 $ 105 1.80 %
Interest-bearing deposits at financial institutions   172,386   951 2.19 %     182,651   1,168 2.56 %     61,815   323 2.07 %
Securities (1)   626,471   6,080 3.85 %     644,999   6,062 3.77 %     667,142   5,973 3.55 %
Restricted investment securities   22,719   293 5.12 %     21,007   290 5.54 %     22,683   330 5.77 %
Loans (1)   3,962,464   51,214 5.13 %     3,839,674   48,413 5.06 %     3,612,648   44,648 4.90 %
Total earning assets (1) $ 4,791,274 $ 58,580 4.85 %   $ 4,698,021 $ 55,989 4.78 %   $ 4,387,487 $ 51,379 4.65 %
                       
Interest-bearing deposits $ 2,505,383 $