QCR Holdings, Inc. Announces Record Net Income of $18.3 Million for the Fourth Quarter and $60.6 Million for the Full Year 2020

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QCR Holdings, Inc.
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Fourth Quarter and Full Year 2020 Highlights

  • Record net income of $18.3 million, or $1.14 per diluted share

  • Adjusted net income (non-GAAP) of $19.1 million, or $1.20 per diluted share

  • Noninterest income of $32.0 million for the quarter and $113.8 million for the year

  • Adjusted NIM (TEY)(non-GAAP) was up 1 basis point after further adjusting for higher third quarter interest recoveries on previously charged-off loans

  • Annualized core loan and lease growth (non-GAAP) of 9.0% for the quarter and 7.8% for the year, excluding SBA Paycheck Protection Program (“PPP”) loans

  • Core deposits relatively stable for the quarter and up 22.3% for the year

  • Provision expense of $7.1 million for the quarter, increasing ALLL to total loans and leases, excluding PPP loans (non-GAAP), by 7 basis points to 2.12%

  • Nonperforming assets improved by 22% for the quarter and now represent only 0.26% of total assets

MOLINE, Ill., Jan. 27, 2021 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced record net income of $18.3 million and diluted earnings per share (“EPS”) of $1.14 for the fourth quarter of 2020, compared to net income of $17.3 million and diluted EPS of $1.09 for the third quarter of 2020. Pre-provision, pre-tax adjusted net income (non-GAAP) was $30.4 million in the fourth quarter of 2020, compared to a record $42.2 million in the third quarter of 2020.

The Company reported adjusted net income (non-GAAP) of $19.1 million and adjusted diluted EPS of $1.20 for the fourth quarter of 2020, compared to adjusted net income (non-GAAP) of $17.7 million and adjusted diluted EPS of $1.11 for the third quarter of 2020. For the fourth quarter of 2019, net income and diluted EPS were $15.9 million and $0.99, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $15.4 million and $0.96, respectively.

For the Quarter Ended

December 31,

September 30,

December 31,

$ in millions (except per share data)

2020

2020

2019

Net Income

$

18.3

$

17.3

$

15.9

Diluted EPS

$

1.14

$

1.09

$

0.99

Adjusted Net Income (non-GAAP)

$

19.1

$

17.7

$

15.4

Adjusted Diluted EPS (non-GAAP)

$

1.20

$

1.11

$

0.96

Pre-Provision/Pre-Tax Adjusted Income (non-GAAP)

$

30.4

$

42.2

$

20.4

Pre-Provision/Pre-Tax Adjusted ROAA (non-GAAP)

2.08

%

2.90

%

1.58

%

See GAAP to non-GAAP reconciliations

“We are very pleased with our financial performance in 2020, highlighted by record net income for the fourth quarter and full year,” said CEO Larry J. Helling. “Our strong results were driven by robust revenue growth, record fee income and increased net interest income. We grew core loans by nearly 8% for the year, while maintaining disciplined underwriting and solid credit quality. Our asset quality and credit metrics improved during the quarter as we improved nonperforming assets by 22%, down to only 0.26% of total assets.”

“Additionally, we continued to see a reduction in loan deferrals at year-end, as most of our clients who received payment relief early in the COVID-19 pandemic have resumed making normal payments,” Helling said. “We believe this speaks to the high quality of our loan portfolio and the resiliency of our local markets, which continue to exhibit improving economic activity.”

______________________________
Adjusted non-GAAP measurements of financial performance exclude non-recurring income and expense items. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance.

Annualized Loan and Lease Growth of 9.0% for the Quarter and 7.8% for the Year, excluding PPP Loans (non-GAAP)

During the fourth quarter of 2020, the Company’s total loans and leases, excluding PPP loans, increased $87.5 million to a total of $4.0 billion. Loan and lease growth during the quarter was 9.0% on an annualized basis. Continued loan and lease growth was funded by some of the Company’s excess liquidity. Core deposits (excluding brokered deposits) declined by $18.8 million and brokered deposits declined by $54.3 million as the Company allowed certain higher cost brokered deposits to run off the balance sheet. In addition, short-term borrowings decreased by $50.0 million during the quarter. At quarter-end, the percentage of wholesale funds to total assets was 3.2%, which was down from 4.9% in the third quarter of 2020 as the Company’s need for wholesale funding continued to decline. Additionally, at quarter-end, the percentage of gross loans and leases to total assets was 74.8%, up from 72.4% in the third quarter, driven primarily by lower excess liquidity.

“Our solid loan growth for the quarter was driven by strength in our core commercial lending business, as well as our Specialty Finance Group,” added Helling. “However, until we have better visibility on the pandemic recovery, we are targeting organic loan growth for the full year 2021 of between 6% and 8%, slightly lower than our long-term goal of 9%.”

Net Interest Income of $43.7 million

Net interest income for the fourth quarter of 2020 totaled $43.7 million, compared to $44.6 million for the third quarter of 2020 and $39.9 million for the fourth quarter of 2019. The slight decrease was primarily due to a decline in the yield on earning assets of 8 basis points on a linked quarter basis, primarily due to the higher than normal amount of interest recoveries on previously charged-off loans in the third quarter. Acquisition-related net accretion totaled $1.1 million for the fourth quarter of 2020, up from $833 thousand in the third quarter of 2020 and $931 thousand for the fourth quarter of 2019. Adjusted net interest income (non-GAAP) was $45.3 million for the fourth quarter of 2020, compared to $45.7 million for the third quarter of 2020 and $40.8 million for the fourth quarter of 2019.

Net interest income totaled $167.0 million for the year ended December 31, 2020, compared to $155.6 million for the year ended December 31, 2019.

Excluding the impact of interest recoveries in the prior quarter, which created an 8 basis point reduction in adjusted NIM (non-GAAP) on a linked-quarter basis, adjusted NIM was up 1 basis point. The reported net interest margin was 3.25%. On a tax-equivalent yield basis (non-GAAP), net interest margin was 3.45%, decreasing by 11 and 6 basis points, respectively, from the third quarter of 2020. Net interest margin, excluding acquisition-related net accretion (non-GAAP) was 3.37%, down 7 basis points from the third quarter. The total cost of interest-bearing funds was down 2 basis points for the quarter, as further improvement in our deposit costs was partially offset by the full quarter impact of our $50.0 million subordinated note offering in the third quarter.

For the Quarter Ended

December 31,

September 30,

December 31,

2020

2020

2019

NIM

3.25%

3.36%

3.36%

NIM (TEY)(non-GAAP)

3.45%

3.51%

3.51%

Adjusted NIM (TEY)(non-GAAP)

3.37%

3.44% (1)

3.43%

See GAAP to non-GAAP reconciliations

(1) Increased by 8 bps due to one-time interest recoveries on previously charged-off loans.

“Our deposit costs decreased significantly over the course of the year as we grew core deposits and significantly reduced our wholesale funding,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “However, our average loan yields also decreased due to the sharp decline in short-term interest rates. Despite this and the fact that we carried a significant amount of excess liquidity for most of the year, we were able to protect our margins, as adjusted NIM increased by 2 basis points for the full year.”

Noninterest Income of $32.0 million

Noninterest income for the fourth quarter of 2020 totaled $32.0 million, compared to $38.0 million for the third quarter of 2020. The decrease was primarily due to a $5.3 million reduction in swap fee income from the record third quarter. Wealth management revenue was $3.3 million for the quarter, down $232 thousand from the third quarter, due to the impact of the sale of the Bates Companies in the third quarter. Excluding that impact, wealth management revenue was up $241 thousand on a linked-quarter basis. In addition, securities gains decreased by $1.2 million and gain on sale of loans increased by $316 thousand from the prior quarter. Noninterest income increased $14.5 million, or an increase of 83% compared to the fourth quarter of 2019, excluding the gain on sale of Rockford Bank & Trust (“RB&T”), which was recorded in that quarter.

Noninterest income for the year ended December 31, 2020, totaled $113.8 million, compared to $66.5 million for the year ended December 31, 2019, excluding the gain on the sale of RB&T, an increase of 71%.

“Our noninterest income was again driven by another strong quarter of swap fee income. Swap fee income totaled $74.8 million for the full year 2020 as a result of strong demand for these lending products, where we are making high-quality, long-term variable rate loans and are enabling our clients to lock in attractive fixed long-term rates through the use of swaps. The pipeline of swap loans at our banks and our Specialty Finance Group remains healthy and we believe that this source of fee income remains sustainable for the foreseeable future,” added Gipple. “Our current expectation is that swap fee income will be approximately $14 to $18 million per quarter for 2021.”

Noninterest Expenses of $46.4 million

Noninterest expense for the fourth quarter of 2020 totaled $46.4 million, compared to $40.8 million for the third quarter of 2020 and $46.3 million for the fourth quarter of 2019. The linked-quarter increase was due to several factors, but primarily the result of increased salary and benefits expense of $4.4 million, driven by strong financial results in the second half of the year. In addition, occupancy and equipment expense increased by $1.1 million, and advertising and marketing expense increased by $526 thousand. These increases were partially offset by a linked-quarter decline in losses on liability extinguishment of $417 thousand and loss on the sale of a subsidiary of $452 thousand.

Asset Quality Remains Strong and NPAs Improved
Continued to Build Reserves

Nonperforming assets (“NPAs”) totaled $14.8 million at the end of the fourth quarter, a decrease of $4.1 million from the third quarter of 2020. 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 charged-off during the quarter. The ratio of NPAs to total assets improved to 0.26% on December 31, 2020, compared to 0.32% on September 30, 2020, and 0.27% on December 31, 2019. In addition, the Company’s criticized loans and classified loans to total loans and leases decreased to 3.24% and 1.55%, respectively, from 3.53% and 1.66% as of September 30, 2020.

The Company’s provision for loan and lease losses totaled $7.1 million for the fourth quarter of 2020, down from $20.3 million in the prior quarter. As of December 31, 2020, the Company’s allowance to total loans and leases was 1.98%, which was up from 1.87% on September 30, 2020, and from 0.98% at December 31, 2019. Excluding the $273 million impact of PPP loans that are on the Company’s balance sheet, the ALLL to total loans and leases was 2.12% (non-GAAP).

In accordance with GAAP for acquisition accounting, 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 of $3.1 million on December 31, 2020.

Strong Capital Levels

As of December 31, 2020, the Company’s total risk-based capital ratio was 15.13%, the common equity tier 1 ratio was 10.69% and the tangible common equity to tangible assets ratio was 9.08%. By comparison, these respective ratios were 14.93%, 10.44% and 8.42% as of September 30, 2020.

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.

These initiatives are long-term targets. Due to the impact of the COVID-19 pandemic, among other factors, the Company may not be able to achieve these goals for the full year 2021.

Supplemental Presentation and Where to Find It
In addition to this press release, the Company has included a supplemental presentation that provides further information regarding the Company’s loan exposures and deferrals. Investors, analysts and other interested persons may find this presentation on the Securities and Exchange Commission’s EDGAR filing system at www.sec.gov/edgar.shtml, or on the Company’s website at www.qcrh.com.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, January 28, 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 February 11, 2021. The replay access information is 877-344-7529 (international 412-317-0088); access code 10151041. 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 engages in commercial leasing through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 24 locations in Iowa, Missouri, Wisconsin and Illinois. As of December 31, 2020, the Company had approximately $5.7 billion in assets, $4.3 billion in loans and $4.6 billion in deposits. For additional information, please visit the Company’s 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 the new presidential administration and 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, widespread disease or pandemics (including the COVID-19 pandemic in the United States), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices (including the new current expected credit loss (CECL) impairment standards, that will change how the Company estimates credit losses when implemented); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (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 technology and the ability to develop and maintain secure and reliable electronic systems; (viii) 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; (ix) the loss of key executives or employees; (x) changes in consumer spending; and (xi) unexpected outcomes of existing or new litigation involving the Company. 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

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


QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

As of

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2020

2020

2020

2019

(dollars in thousands)

CONDENSED BALANCE SHEET

Cash and due from banks

$

61,329

$

68,932

$

88,577

$

169,827

$

76,254

Federal funds sold and interest-bearing deposits

95,676

302,668

142,900

206,708

157,691

Securities

838,131

782,088

748,883

684,571

611,341

Net loans/leases

4,166,753

4,168,395

4,079,432

3,662,435

3,654,204

Intangibles

11,381

11,902

13,872

14,421

14,970

Goodwill

74,066

74,066

74,248

74,248

74,748

Derivatives

222,757

236,381

225,164

195,973

87,827

Other assets

212,704

220,128

220,920

213,134

220,049

Assets held for sale

-

-

10,765

10,758

11,966

Total assets

$

5,682,797

$

5,864,560

$

5,604,761

$

5,232,075

$

4,909,050

Total deposits

$

4,599,137

$

4,672,268

$

4,349,775

$

4,170,478

$

3,911,051

Total borrowings

177,114

226,962

376,250

244,399

278,955

Derivatives

229,270

244,510

233,589

203,744

88,436

Other liabilities

83,483

148,207

87,539

71,185

90,254

Liabilities held for sale

-

-

1,588

3,130

5,003

Total stockholders' equity

593,793

572,613

556,020

539,139

535,351

Total liabilities and stockholders' equity

$

5,682,797

$

5,864,560

$

5,604,761

$

5,232,075

$

4,909,050

ANALYSIS OF LOAN PORTFOLIO

Loan/lease mix:

Commercial and industrial loans

$

1,726,723

$

1,823,049

$

1,850,110

$

1,484,979

$

1,507,825

Commercial real estate loans

2,107,629

1,999,715

1,869,162

1,783,086

1,736,396

Direct financing leases

66,016

73,011

79,105

83,324

87,869

Residential real estate loans

252,121

245,032

241,069

237,742

239,904

Installment and other consumer loans

91,302

102,471

99,150

106,728

109,352

Deferred loan/lease origination costs, net of fees

7,338

4,699

1,663

8,809

8,859

Total loans/leases

$

4,251,129

$

4,247,977

$

4,140,259

$

3,704,668

$

3,690,205

Less allowance for estimated losses on loans/leases

84,376

79,582

60,827

42,233

36,001

Net loans/leases

$

4,166,753

$

4,168,395

$

4,079,432

$

3,662,435

$

3,654,204

ANALYSIS OF SECURITIES PORTFOLIO

Securities mix:

U.S. government sponsored agency securities

$

15,336

$

18,437

$

17,472

$

19,457

$

20,078

Municipal securities

627,523

569,075

526,192

493,664

447,853

Residential mortgage-backed and related securities

132,842

134,147

145,672

122,853

120,587

Asset backed securities

40,683

40,665

39,797

28,499

16,887

Other securities

21,747

19,764

19,750

20,098

5,936

Total securities

$

838,131

$

782,088

$

748,883

$

684,571

$

611,341

ANALYSIS OF DEPOSITS

Deposit mix:

Noninterest-bearing demand deposits

$

1,145,378

$

1,175,085

$

1,177,482

$

829,782

$

777,224

Interest-bearing demand deposits

2,987,469

2,938,194

2,488,755

2,440,907

2,407,502

Time deposits

460,659

499,021

560,982

617,979

571,343

Brokered deposits

5,631

59,968

122,556

281,810

154,982

Total deposits

$

4,599,137

$

4,672,268

$

4,349,775

$

4,170,478

$

3,911,051

ANALYSIS OF BORROWINGS

Borrowings mix:

Term FHLB advances

$

-

$

40,000

$

90,000

$

55,000

$

50,000

Overnight FHLB advances

15,000

-

55,000

40,000

109,300

FRB borrowings

-

-

100,000

30,000

-

Other short-term borrowings

5,430

30,430

24,818

13,067

13,423

Subordinated notes

118,691

118,577

68,516

68,455

68,394

Junior subordinated debentures

37,993

37,955

37,916

37,877

37,838

Total borrowings

$

177,114

$

226,962

$

376,250

$

244,399

$

278,955



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

For the Quarter Ended

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2020

2020

2020

2019

(dollars in thousands, except per share data)

INCOME STATEMENT

Interest income

$

49,851

$

50,890

$

48,650

$

48,982

$

52,977

Interest expense

6,144

6,309

7,694

11,276

13,058

Net interest income

43,707

44,581

40,956

37,706

39,919

Provision for loan/lease losses

7,080

20,342

19,915

8,367

979

Net interest income after provision for loan/lease losses

$

36,627

$

24,239

$

21,041

$

29,339

$

38,940

Trust department fees

$

2,388

$

2,280

$

2,227

$

2,312

$

2,365

Investment advisory and management fees

926

1,266

1,399

1,727

1,589

Deposit service fees

1,875

1,403

1,286

1,477

1,787

Gain on sales of residential real estate loans

1,462

1,370

1,196

652

823

Gain on sales of government guaranteed portions of loans

224

-

-

-

159

Swap fee income

21,402

26,688

19,927

6,804

7,409

Securities gains (losses), net

617

1,802

65

-

26

Earnings on bank-owned life insurance

461

502

612

329

533

Debit card fees

923

946

775

758

766

Correspondent banking fees

270

220

198

215

194

Gain on sale of assets and liabilities of subsidiary

-

-

-

-

12,286

Other

1,469

1,482

941

922

1,868

Total noninterest income

$

32,017

$

37,959

$

28,626

$

15,196

$

29,805

Salaries and employee benefits

$

30,446

$

25,999

$

21,304

$

18,519

$

24,220

Occupancy and equipment expense

4,917

3,807

3,748

4,032

4,019

Professional and data processing fees

3,871

3,758

3,646

3,369

3,570

Post-acquisition compensation, transition and integration costs

25

(32

)

70

151

1,855

Disposition costs

64

192

(83

)

517

3,325

FDIC insurance, other insurance and regulatory fees

1,272

1,301

908

683

523

Loan/lease expense

465

403

339

228

349

Net cost of (income from) and gains/losses on operations of other real estate

(4

)

16

(332

)

13

232

Advertising and marketing

1,276

750

552

682

1,670

Bank service charges

523

488

501

504

516

Losses on liability extinguishment

1,457

1,874

429

147

288

Correspondent banking expense

205

205

212

216

216

Intangibles amortization

521

531

548

549

560

Goodwill impairment

-

-

-

500

3,000

Loss on sale of subsidiary

(147

)

305

-

-

-

Other

1,473

1,241

1,288

1,313

1,951

Total noninterest expense

$

46,364

$

40,838

$

33,130

$

31,423

$

46,294

Net income before income taxes

$

22,280

$

21,360

$

16,537

$

13,112

$

22,451

Federal and state income tax expense

4,009

4,016

2,798

1,884

6,560

Net income

$

18,271

$

17,344

$

13,739

$

11,228

$

15,891

Basic EPS

$

1.16

$

1.10

$

0.87

$

0.71

$

1.01

Diluted EPS

$

1.14

$

1.09

$

0.86

$

0.70

$

0.99

Weighted average common shares outstanding

15,775,596

15,767,152

15,747,056

15,796,796

15,772,703

Weighted average common and common equivalent shares outstanding

15,973,054

15,923,578

15,895,336

16,011,456

16,033,043



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

For the Year Ended

December 31,

December 31,

2020

2019

(dollars in thousands, except per share data)

INCOME STATEMENT

Interest income

$

198,373

$

216,076

Interest expense

31,423

60,517

Net interest income

166,950

155,559

Provision for loan/lease losses

55,704

7,066

Net interest income after provision for loan/lease losses

$

111,246

$

148,493

Trust department fees

$

9,207

$

9,559

Investment advisory and management fees

5,318

6,995

Deposit service fees

6,041

6,812

Gain on sales of residential real estate loans

4,680

2,571

Gain on sales of government guaranteed portions of loans

224

748

Swap fee income

74,821

28,295

Securities gains (losses), net

2,484

(30

)

Earnings on bank-owned life insurance

1,904

1,973

Debit card fees

3,402

3,357

Correspondent banking fees

903

773

Gain on sale of assets and liabilities of subsidiary

-

12,286

Other

4,814

5,429

Total noninterest income

$

113,798

$

78,768

Salaries and employee benefits

$

96,268

$

92,063

Occupancy and equipment expense

16,504

15,106

Professional and data processing fees

14,644

13,381

Post-acquisition compensation, transition and integration costs

214

3,582

Disposition costs

690

3,325

FDIC insurance, other insurance and regulatory fees

4,164

2,955

Loan/lease expense

1,435

1,097

Net cost of (income from) and gains/losses on operation of other real estate

(307

)

3,789

Advertising and marketing

3,260

4,548

Bank service charges

2,016

2,009

Losses on liability extinguishment

3,907

436

Correspondent banking expense

838

836

Intangibles amortization

2,149

2,266

Goodwill impairment

500

3,000

Loss on sale of subsidiary

158

-

Other

5,315

6,841

Total noninterest expense

$

151,755

$

155,234

Net income before taxes

$

73,289

$

72,027

Income tax expense

12,707

14,619

Net income

$

60,582

$

57,408

Basic EPS

$

3.89

$

3.65

Diluted EPS

$

3.80

$

3.60

Weighted average common shares outstanding

15,571,650

15,730,016

Weighted average common and common equivalent shares outstanding

15,952,637

15,967,775



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

As of and for the Quarter Ended

For the Year Ended

December 31,

September 30,

June 30,

March 31,

December 31,

December 31,

December 31,

2020

2020

2020

2020

2019

2020

2019

(dollars in thousands, except per share data)

COMMON SHARE DATA

Common shares outstanding

15,805,711

15,792,357

15,790,611

15,773,736

15,828,098

Book value per common share (1)

$

37.57

$

36.26

$

35.21

$

34.18

$

33.82

Tangible book value per common share (2)

$

32.16

$

30.82

$

29.63

$

28.56

$

28.15

Closing stock price

$

39.59

$

27.41

$

31.18

$

27.07

$

43.86

Market capitalization

$

625,748

$

432,869

$

492,351

$

426,995

$

694,220

Market price / book value

105.38

%

75.60

%

88.55

%

79.20

%

129.69

%

Market price / tangible book value

123.09

%

88.95

%

105.23

%

94.79

%

155.76

%

Earnings per common share (basic) LTM (3)

$

3.84

$

3.69

$

3.55

$

3.54

$

3.65

Price earnings ratio LTM (3)

10.31 x

7.43 x

8.78 x

7.65 x

12.02 x

TCE / TA (4)

9.08

%

8.42

%

8.48

%

8.76

%

9.25

%

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

Beginning balance

$

572,613

$

556,020

$

539,139

$

535,351

$

519,743

Net income

18,271

17,344

13,739

11,228

15,891

Other comprehensive income (loss), net of tax

3,157

(614

)

3,622

(3,691

)

(683

)

Common stock cash dividends declared

(947

)

(945

)

(945

)

(942

)

(947

)

Proceeds from issuance of 9,400 shares of common stock as a result of the performance based targets met for Bates Companies

-

-

-

-

399

Repurchase and cancellation of 100,932 shares of common stock as a result of a share repurchase program

-

-

-

(3,780

)

-

Other (5)

699

808

465

973

948

Ending balance

$

593,793

$

572,613

$

556,020

$

539,139

$

535,351

REGULATORY CAPITAL RATIOS (6):

Total risk-based capital ratio

15.13

%

14.93

%

13.71

%

13.54

%

13.33

%

Tier 1 risk-based capital ratio

11.49

%

11.25

%

11.07

%

11.16

%

11.04

%

Tier 1 leverage capital ratio

9.49

%

9.21

%

8.91

%

10.19

%

9.53

%

Common equity tier 1 ratio

10.69

%

10.44

%

10.25

%

10.31

%

10.18

%

KEY PERFORMANCE RATIOS AND OTHER METRICS

Return on average assets (annualized)

1.25

%

1.19

%

0.95

%

0.91

%

1.23

%

1.08

%

1.09

%

Return on average total equity (annualized)

12.43

%

12.06

%

9.88

%

8.23

%

11.93

%

10.70

%

11.09

%

Net interest margin

3.25

%

3.36

%

3.14

%

3.40

%

3.36

%

3.28

%

3.29

%

Net interest margin (TEY) (Non-GAAP)(7)

3.45

%

3.51

%

3.27

%

3.56

%

3.51

%

3.44

%

3.43

%

Efficiency ratio (Non-GAAP) (8)

61.23

%

49.48

%

47.61

%

59.40

%

66.40

%

54.05

%

66.18

%

Gross loans and leases / total assets (10)

74.81

%

72.43

%

74.01

%

70.95

%

75.36

%

74.81

%

74.80

%

Gross loans and leases / total deposits (10)

92.43

%

90.92

%

95.18

%

88.83

%

94.35

%

92.43

%

94.95

%

Effective tax rate

17.99

%

18.80

%

16.92

%

14.37

%

29.22

%

17.34

%

16.26

%

Full-time equivalent employees

714

687

712

703

697

714

766

AVERAGE BALANCES

Assets

$

5,842,299

$

5,820,555

$

5,800,164

$

4,948,311

$

5,147,754

$

5,604,074

$

5,088,055

Loans/leases

4,250,951

4,185,275

3,999,523

3,686,410

3,868,435

4,031,567

3,853,918

Deposits

4,742,602

4,726,881

4,732,626

3,954,707

4,227,572

4,540,266

4,228,418

Total stockholders' equity

588,042

575,061

556,047

545,548

532,624

566,240

507,383

(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 from September 30, 2020 to December 31, 2020 due to the addition of new positions created to build scale.

Decrease from June 30, 2020 to September 30, 2020 due to sale of Bates Companies and interns employed only during the summer.

(10) Excludes assets held for sale as of December 31, 2019, March 31, 2020 and June 30, 2020.


QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

ANALYSIS OF NET INTEREST INCOME AND MARGIN

For the Quarter Ended

December 31, 2020

September 30, 2020

December 31, 2019

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

$

1,216

$

1

0.08

%

$

2,205

$

1

0.18

%

$

2,933

$

12

1.62

%

Interest-bearing deposits at financial institutions

279,024

82

0.12

%

321,679

92

0.11

%

208,040

868

1.66

%

Securities (1)

795,696

7,207

3.62

%

749,425

6,836

3.66

%

610,676

5,913

3.84

%

Restricted investment securities

18,790

236

4.92

%

19,714

249

4.94

%

21,226

283

5.29

%

Loans (1)

4,250,951

44,956

4.21

%

4,185,275

45,654

4.34

%

3,868,435

47,684

4.89

%

Total earning assets (1)

$

5,345,677

$

52,482

3.91

%

$

5,278,298

$

52,832

3.99

%

$

4,711,310

$

54,760

4.61

%

Interest-bearing deposits

$

3,033,119

$

2,060

0.27

%

$

2,932,988

$

2,086

0.28

%

$

2,520,696

$

6,547

1.03

%

Time deposits

530,813

1,752

1.31

%

638,031

2,399

1.50

%

865,392

4,631

2.12

%

Short-term borrowings

19,115

3

0.17

%

26,996

11

0.17

%

19,491

87

1.77

%

Federal Home Loan Bank advances

33,207

80

0.94

%

57,078

211

1.45

%

87,527

210

0.95

%

Subordinated debentures

118,612

1,678

5.66

%

77,783

1,031

5.30

%

68,356

1,004

5.83

%

Junior subordinated debentures

37,969

571

5.88

%

37,936

571

5.89

%

37,813

579

6.07

%

Total interest-bearing liabilities

$

3,772,835

$

6,144

0.64

%

$

3,770,812

$

6,309

0.66

%

$

3,599,275

$

13,058

1.44

%

Net interest income (1)

$

46,338

$

46,523

$

41,702

Net interest margin (2)

3.25

%

3.36

%

3.36

%

Net interest margin (TEY) (Non-GAAP) (1) (2) (3)

3.45

%

3.51

%

3.51

%

Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)

3.37

%

3.44

%

3.43

%

For the Year Ended

December 31, 2020

December 31, 2019

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

$

2,398

$

19

0.79

%

$

8,898

$

204

2.29

%

Interest-bearing deposits at financial institutions

315,616

669

0.21

%

179,635

3,910

2.18

%

Securities (1)

715,808

26,773

3.74

%

635,650

24,150

3.80

%

Restricted investment securities

20,270

1,031

5.00

%

21,559

1,174

5.45

%

Loans (1)

4,031,567

178,097

4.42

%

3,857,547

193,365

5.01

%

Total earning assets (1)

$

5,085,659

$

206,589

4.06

%

$

4,703,289

$

222,803

4.74

%

Interest-bearing deposits

$

2,797,669

$

11,980

0.43

%

$

2,443,989

$

29,898

1.22

%

Time deposits

690,222

11,289

1.64

%

966,745

20,977

2.17

%

Short-term borrowings

22,625

84

0.37

%

16,837

363

2.16

%

Federal Home Loan Bank advances

74,167

1,087

1.44

%

108,536

2,895

2.67

%

Other borrowings

-

-

0.00

%

13,563

512

3.77

%

Subordinated debentures

83,404

4,697

5.63

%

60,883

3,564

5.85

%

Junior subordinated debentures

37,913

2,286

5.93

%

37,751

2,308

6.11

%

Total interest-bearing liabilities

$

3,706,000

$

31,423

0.85

%

$

3,648,304

$

60,517

1.66

%

Net interest income (1)

$

175,166

$

162,286

Net interest margin (2)

3.28

%

3.31

%

Net interest margin (TEY) (Non-GAAP) (1) (2) (3)

3.44

%

3.45

%

Adjusted net interest margin (TEY) ...(Non-GAAP) (1) (2) (3)

3.38

%

3.36

%

(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.



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

As of

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2020

2020

2020

2019

(dollars in thousands, except per share data)

ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES

Beginning balance

$

79,582

$

60,827

$

42,233

$

36,001

$

36,116

Provision charged to expense

7,080

20,342

19,915

8,367

979

Loans/leases charged off

(2,779

)

(1,819

)

(1,450

)

(2,335

)

(1,182

)

Recoveries on loans/leases previously charged off

493

232

129

200

88

Ending balance

$

84,376

$

79,582

$

60,827

$

42,233

$

36,001

NONPERFORMING ASSETS

Nonaccrual loans/leases

$

13,940

$

17,597

$

12,099

$

11,628

$

7,902

Accruing loans/leases past due 90 days or more

3

86

99

1,419

33

Troubled debt restructures - accruing

741

1,061

920

545

979

Total nonperforming loans/leases

14,684

18,744

13,118

13,592

8,914

Other real estate owned

20

125

157

3,298

4,129

Other repossessed assets

135

110

25

45

41

Total nonperforming assets

$

14,839

$

18,979

$

13,300

$

16,935

$

13,084

ASSET QUALITY RATIOS

Nonperforming assets / total assets (1)

0.26

%

0.32

%

0.24

%

0.32

%

0.27

%

Allowance / total loans/leases (2)

1.98

%

1.87

%

1.47

%

1.14

%

0.98

%

Allowance / nonperforming loans/leases (2)

574.61

%

424.57

%

463.69

%

310.72

%

403.87

%

Net charge-offs as a % of average loans/leases

0.05

%

0.04

%

0.03

%

0.06

%

0.03

%

INTERNALLY ASSIGNED RISK RATING (3)

Special mention (rating 6)

$

71,482

$

79,587

$

104,608

$

34,738

$

19,952

Substandard (rating 7)

66,081

70,409

39,855

36,612

33,649

Doubtful (rating 8)

-

-

-

-

-

$

137,563

$

149,996

$

144,463

$

71,350

$

53,601

Criticized loans (4)

$

137,563

$

149,996

$

144,463

$

71,350

$

53,601

Classified loans (5)

66,081

70,409

39,855

36,612

33,649

Criticized loans as a % of total loans/leases

3.24

%

3.53

%

3.49

%

1.93

%

1.45

%

Classified loans as a % of total loans/leases

1.55

%

1.66

%

0.96

%

0.99

%

0.91

%

(1) Excludes assets held for sale.

(2) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios.

(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.



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

For the Quarter Ended

For the Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

SELECT FINANCIAL DATA - SUBSIDIARIES

2020

2020

2019

2020

2019

(dollars in thousands)

TOTAL ASSETS

Quad City Bank and Trust (1)

$

2,149,469

$

2,205,935

$

1,682,477

m2 Equipment Finance, LLC

243,090

241,452

239,794

Cedar Rapids Bank and Trust

1,952,308

2,012,182

1,572,324

Community State Bank - Ankeny

1,000,670

937,017

853,834

Springfield First Community Bank

779,955

803,478

748,753

TOTAL DEPOSITS

Quad City Bank and Trust (1)

$

1,866,635

$

1,955,360

$

1,458,587

Cedar Rapids Bank and Trust

1,378,108

1,399,267

1,248,598

Community State Bank - Ankeny

875,400

822,261

735,089

Springfield First Community Bank

569,036

592,528

531,498

TOTAL LOANS & LEASES

Quad City Bank and Trust (1)

$

1,556,762

$

1,556,798

$

1,329,667

m2 Equipment Finance, LLC

244,325

241,783

236,735

Cedar Rapids Bank and Trust

1,362,056

1,387,372

1,174,963

Community State Bank - Ankeny

707,681

683,086

639,270

Springfield First Community Bank

624,629

620,721

546,306

TOTAL LOANS & LEASES / TOTAL DEPOSITS

Quad City Bank and Trust (1)

83

%

80

%

91

%

Cedar Rapids Bank and Trust

99

%

99

%

94

%

Community State Bank - Ankeny

81

%

83

%

87

%

Springfield First Community Bank

110

%

105

%

103

%

TOTAL LOANS & LEASES / TOTAL ASSETS

Quad City Bank and Trust (1)

72

%

71

%

79

%

Cedar Rapids Bank and Trust

70

%

69

%

75

%

Community State Bank - Ankeny

71

%

73

%

75

%

Springfield First Community Bank

80

%

77

%

73

%

ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES

Quad City Bank and Trust (1)

1.95

%

1.86

%

1.03

%

m2 Equipment Finance, LLC

2.63

%

2.53

%

1.51

%

Cedar Rapids Bank and Trust (2)

2.35

%

2.22

%

1.14

%

Community State Bank - Ankeny (2)

2.02

%

1.92

%

1.04

%

Springfield First Community Bank (2)

1.23

%

1.09

%

0.41

%

RETURN ON AVERAGE ASSETS

Quad City Bank and Trust (1)

1.52

%

0.56

%

1.44

%

0.99

%

1.30

%

Cedar Rapids Bank and Trust

0.59

%

2.66

%

1.82

%

1.81

%

1.84

%

Community State Bank - Ankeny

3.25

%

0.82

%

1.38

%

1.25

%

1.34

%

Springfield First Community Bank

3.02

%

1.52

%

1.44

%

1.74

%

1.32

%

NET INTEREST MARGIN PERCENTAGE (3)

Quad City Bank and Trust (1)

3.19

%

3.07

%

3.55

%

3.17

%

3.39

%

Cedar Rapids Bank and Trust (5)

3.51

%

3.54

%

3.49

%

3.47

%

3.43

%

Community State Bank - Ankeny (4)

3.77

%

4.12

%

4.35

%

3.89

%

4.33

%

Springfield First Community Bank (6)

4.03

%

3.75

%

3.95

%

3.87

%

3.93

%

ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET

INTEREST MARGIN, NET

Cedar Rapids Bank and Trust

$

103

$

217

$

103

$

430

$

547

Community State Bank - Ankeny

132

56

94

325

877

Springfield First Community Bank

880

598

775

2,671

3,088

QCR Holdings, Inc. (7)

(38

)

(38

)

(41

)

(155

)

(168

)

(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)

Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio.

(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)

Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin would have been 3.69% for the quarter ended December 31, 2020, 4.06% for the quarter ended September 30, 2020 and 4.27% for the quarter ended December 31, 2019.

(5)

Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin would have been 3.47% for the quarter ended December 31, 2020, 3.46% for the quarter ended September 30, 2020 and 3.46% for the quarter ended December 31, 2019.

(6)

Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin would have been 3.59% for the quarter ended December 31, 2020, 4.02% for the quarter ended September 30, 2020 and 3.47% for the quarter ended December 31, 2019.

(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.



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

As of

December 31,

September 30,

June 30,

March 31,

December 31,

GAAP TO NON-GAAP RECONCILIATIONS

2020

2020

2020

2020

2019

(dollars in thousands, except per share data)

TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)

Stockholders' equity (GAAP)

$

593,793

$

572,613

$

556,020

$

539,139

$

535,351

Less: Intangible assets

85,447

85,968

88,120

88,669

89,717

Tangible common equity (non-GAAP)

$

508,346

$

486,645

$

467,900

$

450,470

$

445,634

Total assets (GAAP)

$

5,682,797

$

5,864,560

$

5,604,761

$

5,232,075

$

4,909,050

Less: Intangible assets

85,447

85,968

88,120

88,669

89,717

Tangible assets (non-GAAP)

$

5,597,350

$

5,778,592

$

5,516,641

$

5,143,406

$

4,819,333

Tangible common equity to tangible assets ratio (non-GAAP)

9.08

%

8.42

%

8.48

%

8.76

%

9.25

%

TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1)

Stockholder's equity (GAAP)

$

593,793

$

572,613

$

556,020

$

539,139

$

535,351

Less: PPP loan interest income (post-tax) (2)

7,691

4,934

2,085

-

-

Less: Intangible assets

85,447

85,968

88,120

88,669

89,717

Tangible common equity, excluding PPP loan income (non-GAAP)

$

500,655

$

481,711

$

465,815

$

450,470

$

445,634

Total assets (GAAP)

$

5,682,797

$

5,864,560

$

5,604,761

$

5,232,075

$

4,909,050

Less: PPP loans

273,146

357,506

358,052

-

-

Less: Intangible assets

85,447

85,968

88,120

88,669

89,717

Tangible assets, excluding PPP loans (non-GAAP)

$

5,324,204

$

5,421,086

$

5,158,589

$

5,143,406

$

4,819,333

Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP)

9.40

%

8.89

%

9.03

%

8.76

%

9.25

%

(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) PPP interest income (post-tax) is calculated using an estimated effective tax rate of 21%.



QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

GAAP TO NON-GAAP RECONCILIATIONS

For the Quarter Ended

For the Year Ended

December 31,

September 30,

June 30,

March 31,

December 31,

December 31,

December 31,

ADJUSTED NET INCOME (1)

2020

2020

2020

2020

2019

2020

2019

(dollars in thousands, except per share data)

Net income (GAAP)

$

18,271

$

17,344

$

13,739

$

11,228

$

15,891

$

60,582

$

57,408

Less non-core items (post-tax) (2):

Income:

Securities gains(losses), net

487

1,424

51

-

21

$

1,962

$

(22

)

Loss on syndicated loan

(210

)

-

-

-

$

(210

)

Gain on sale of assets and liabilities of subsidiary

-

-

-

-

8,539

-

8,539

Total non-core income (non-GAAP)

$

277

$

1,424

$

51

$

-

$

8,560

$

1,752

$

8,517

Expense:

Losses on debt extinguishment, net

$

1,151

$

1,480

$

339

$

116

$

228

$

3,087

$

345

Goodwill impairment

-

-

-

500

3,000

500

3,000

Disposition costs

51

152

(66

)

408

2,627

545

2,627

Tax expense on expected liquidation of RB&T BOLI

-

-

-

-

790

-

790

Post-acquisition compensation, transition and integration costs

20

(25

)

55

119

1,465

169

2,828

Loss on sale of subsidiary

(102

)

212

-

-

-

110

-

Total non-core expense (non-GAAP)

$

1,119

$

1,819

$

329

$

1,143

$

8,110

$

4,411

$

9,590

Adjusted net income (non-GAAP) (1)

$

19,113

$

17,739

$

14,016

$

12,372

$

15,441

$

63,240

$

58,480

PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)

Net income (GAAP)

$

18,271

$

17,344

$

13,739

$

11,228

$

15,891

$

60,582

$

57,408

Less: Non-core income not tax-effected

351

1,802

65

-

12,313

2,218

12,258

Plus: Non-core expense not tax-effected

1,399

2,339

416

1,315

9,258

5,469

11,132

Provision expense

7,080

20,342

19,915

8,367

979

55,704

7,066

Federal and state income tax expense

4,009

4,016

2,798

1,884

6,560

12,707

14,619

Pre-provision/pre-tax adjusted income (non-GAAP) (1)

$

30,408

$

42,239

$

36,803

$

22,794

$

20,375

$

132,244

$

77,966

PRE-PROVISION/PRE-TAX ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)

Pre-provision/pre-tax adjusted income (non-GAAP)

$

30,408

$

42,239

$

36,803

$

22,794

$

20,375

$

132,244

$

77,966

Average Assets

$

5,842,299

$

5,820,555

$

5,800,164

$

4,948,311

$

5,147,754

$

5,604,074

$

5,102,980

Pre-provision/pre-tax adjusted return on average assets (non-GAAP)

2.08

%

2.90

%

2.54

%

1.84

%

1.58

%

2.36

%

2.04

%

ADJUSTED EARNINGS PER COMMON SHARE (1)

Adjusted net income (non-GAAP) (from above)

$

19,113

$

17,739

$

14,016

$

12,372

$

15,441

$

63,240

$

58,480

Weighted average common shares outstanding

15,775,596

15,767,152

15,747,056

15,796,796

15,772,703

15,571,650

15,730,016

Weighted average common and common equivalent shares outstanding

15,973,054

15,923,578

15,895,336

16,011,456

16,033,043

15,952,637

15,967,775

Adjusted earnings per common share (non-GAAP):

Basic

$

1.21

$

1.13

$

0.89

$

0.78

$

0.98

$

4.06

$

3.72

Diluted

$

1.20

$

1.11

$

0.88

$

0.77

$

0.96

$

3.96

$

3.66

ADJUSTED RETURN ON AVERAGE ASSETS (1)

Adjusted net income (non-GAAP) (from above)

$

19,113

$

17,739

$

14,016

$

12,372

$

15,441

$

63,240

$

58,480

Average Assets

$

5,842,299

$

5,820,555

$

5,800,164

$

4,948,311

$

5,147,754

$

5,604,074

$

5,102,980

Adjusted return on average assets (annualized) (non-GAAP)

1.31

%

1.22

%

0.97

%

1.00

%

1.20

%

1.13

%

1.15

%

NET INTEREST MARGIN (TEY) (4)

Net interest income (GAAP)

$

43,707

$

44,581

$

40,948

$

37,698

$

39,919

$

166,950

$

155,559

Plus: Tax equivalent adjustment (3)

2,631

1,942

1,728

1,790

1,783

8,216

6,727

Net interest income - tax equivalent (Non-GAAP)

$

46,338

$

46,523

$

42,676

$

39,488

$

41,702

$

175,166

$

162,286

Less: Acquisition accounting net accretion

1,077

833

736

625

931

3,271

4,344

Adjusted net interest income

$

45,261

$

45,690

$

41,940

$

38,863

$

40,771

$

171,895

$

157,942

Average earning assets

$

5,345,677

$

5,278,298

$

5,252,663

$

4,461,018

$

4,711,310

$

5,085,659

$

4,703,289

Net interest margin (GAAP)

3.25

%

3.36

%

3.14

%

3.40

%

3.36

%

3.28

%

3.31

%

Net interest margin (TEY) (Non-GAAP)

3.45

%

3.51

%

3.27

%

3.56

%

3.51

%

3.44

%

3.45

%

Adjusted net interest margin (TEY) (Non-GAAP)

3.37

%

3.44

%

3.21

%

3.50

%

3.43

%

3.38

%

3.36

%

EFFICIENCY RATIO (5)

Noninterest expense (GAAP)

$

46,364

$

40,838

$

33,122

$

31,415

$

46,294

$

151,755

$

155,234

Net interest income (GAAP)

$

43,707

$

44,581

$

40,948

$

37,698

$

39,919

$

166,950

$

155,559

Noninterest income (GAAP)

32,017