MOLINE, Ill., July 20, 2016 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ:QCRH) today announced net income of $6.7 million and diluted earnings per share (“EPS”) of $0.53 for the quarter ended June 30, 2016.  This included $231 thousand of acquisition costs (after-tax) related to the previously announced acquisition of Community State Bank.  By comparison, for the quarter ended March 31, 2016, the Company reported net income of $6.4 million and diluted EPS of $0.53.  For the second quarter of 2015, the Company reported a net loss of $524 thousand, and diluted EPS of ($0.05), due to the successful completion of a balance sheet restructuring strategy.

For the six months ended June 30, 2016, the Company reported net income of $13.1 million, and diluted EPS of $1.07.  By comparison, for the six months ended June 30, 2015, the Company reported net income of $3.7 million, and diluted EPS of $0.40.

“Our operating performance for the first half of 2016 has been solid,” commented Douglas M. Hultquist, President and Chief Executive Officer, “as fee income has been strong, organic loan growth continues to exceed expectations, and net interest margin expands further.  Our return on average assets (“ROAA”) has improved to 1.01% for the current quarter.  Although we have achieved our targeted ROAA of 1.00%, we expect to continue to enhance profitability through our ongoing key initiatives.”

Loan and Lease Growth Strong at 6.9% Year-To-Date
Swap Fee Income and Gains on the Sale of Government Guaranteed Loans Total $3.5 Million Year-To-Date

During the second quarter of 2016, the Company’s total assets increased $42.8 million, or 2%, to a total of $2.68 billion, while total loans and leases grew $49.0 million.  The loan and lease growth was funded primarily by called securities and short-term borrowings.  Deposits declined slightly during the quarter, while borrowings increased $34.0 million.  Overnight FHLB borrowings increased $48.4 million, as this funding source is currently more cost effective than fed funds purchased.

“Loan and lease growth for the first six months of the year totaled $124.8 million, or an annualized rate of 13.9%,” commented Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer.  “Continued loan and lease growth has helped us exceed our targeted annual organic growth rate of 10-12%, while also increasing our loan and lease to total asset ratio to 72%, from 71% as of the end of the first quarter of 2016 and from 67% one year ago.”

“Swap fee income and gains on the sale of government guaranteed loans are off to a very strong start for the first half of 2016, totaling $3.5 million,” said Mr. Gipple.  “We plan to continue executing these types of transactions, as they provide unique and beneficial solutions for our clients.”

Net Interest Margin Expanded 3 Basis Points in Second Quarter

Net interest income totaled $21.0 million for the quarter ended June 30, 2016.  By comparison, net interest income totaled $20.6 million and $18.5 million for the quarters ended March 31, 2016 and June 30, 2015, respectively.  Net interest income totaled $41.6 million for the six months ended June 30, 2016, an increase of 14.7% from the same period of the prior year.

“Net interest margin increased 3 basis points from the prior quarter to 3.62%,” stated Mr. Gipple.  He added, “We were successful in further improving asset yield by reinvesting the funds from called securities into both loans and higher yielding securities.  The improvement created by this change in asset mix more than offset the 4 basis point decrease in loan yield experienced in the second quarter.”

Nonperforming Assets Flat During the Second Quarter

Nonperforming assets (“NPAs”) stayed relatively flat from the prior quarter and the ratio of NPAs to total assets was 0.70% at June 30, 2016, which was down from 0.71% at March 31, 2016 and down from 1.07% a year ago. 

“Although NPAs remained relatively flat from the prior quarter, we remain committed to further improving our asset quality in 2016,” stated Mr. Hultquist. 

The Company’s provision for loan and lease losses totaled $1.2 million for the second quarter of 2016, which was down $875 thousand from the prior quarter, and down $1.2 million compared to the second quarter of 2015.  As asset quality remains strong, provision for loan and lease losses has moderated.  As of June 30, 2016, the Company’s allowance to total loans and leases was 1.46%, which was flat from March 31, 2016 and down slightly from 1.52% at June 30, 2015. 

Capital Levels Remain Strong

The Company’s total risk-based capital ratio was 14.23%, the common equity tier 1 ratio was 11.66% and the tangible common equity to tangible assets ratio increased to 10.10%, all as of June 30, 2016.  For comparison, these respective ratios were 12.68%, 10.11% and 8.74% as of March 31, 2016.  Both the total risk-based capital ratio and the common equity tier 1 ratio are well above the fully phased-in requirements under Basel III.  The increase in the Company’s capital ratios was primarily due to the capital raise executed in the second quarter of 2016, as well as strong earnings.

Acquisition of Community State Bank, Headquartered in Des Moines/Ankeny, Iowa

As previously announced, the Company plans to close the acquisition of Community State Bank during the third quarter, pending regulatory approval by bank regulators and certain customary closing conditions.

Continued Focus on Seven Key Initiatives

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

• Target loans and leases to total assets ratio in the range of 70-75%
• Continue to reduce wholesale funding to less than 15% of assets
• Grow gains on the sale of USDA and SBA loans, and fee income on swaps, to a more significant and consistent component of core revenue
• Grow wealth management net income by 15% annually
• Eliminate identified noninterest expenses and manage annual expense growth
• Return asset quality metrics to 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

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, 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, 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. 

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 and national economy; (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, including the Basel III regulatory capital reforms, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued thereunder; (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) the integration of acquired entities, including the planned acquisition of Community State Bank; (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
	June 30,			March 31,			December 31,			September 30,			June 30,
		2016			2016			2015			2015			2015
	(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks	$	49,581		$	44,931		$	41,742		$	40,975		$	39,995
Federal funds sold and interest-bearing deposits		68,432			57,229			56,164			66,684			70,238
Securities		510,959			537,317			577,109			590,775			592,368
Net loans/leases		1,894,676			1,846,428			1,771,882			1,730,138			1,689,238
Core deposit intangible		1,372			1,422			1,471			1,521			1,571
Goodwill		3,223			3,223			3,223			3,223			3,223
Other assets		155,191			150,123			141,607			142,539			146,336
Total assets	$	2,683,434		$	2,640,673		$	2,593,198		$	2,575,855		$	2,542,969
Total deposits	$	1,973,594		$	1,989,573		$	1,880,666		$	1,855,319		$	1,836,767
Total borrowings		381,874			347,901			444,162			456,091			456,567
Other liabilities		52,849			68,056			42,484			43,330			37,938
Total stockholders' equity		275,117			235,143			225,886			221,115			211,697
Total liabilities and stockholders' equity	$	2,683,434		$	2,640,673		$	2,593,198		$	2,575,855		$	2,542,969
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial loans	$	706,261		$	682,057		$	648,160		$	647,398		$	606,826
Commercial real estate loans		784,379			766,159			724,369			692,569			696,122
Direct financing leases		169,928			172,774			173,656			173,304			170,799
Residential real estate loans		180,482			173,096			170,433			165,061			161,985
Installment and other consumer loans		73,658			71,842			73,669			69,863			72,448
Deferred loan/lease origination costs, net of fees		8,065			7,895			7,736			7,477			7,204
Total loans/leases	$	1,922,773		$	1,873,823		$	1,798,023		$	1,755,672		$	1,715,384
Less allowance for estimated losses on loans/leases		28,097			27,395			26,141			25,534			26,146
Net loans/leases	$	1,894,676		$	1,846,428		$	1,771,882		$	1,730,138		$	1,689,238
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities	$	88,321		$	132,742		$	213,537		$	247,625		$	256,444
Municipal securities		302,689			285,009			280,203			265,293			251,992
Residential mortgage-backed and related securities		116,765			116,452			80,670			74,901			80,844
Other securities		3,184			3,114			2,699			2,956			3,088
Total securities	$	510,959		$	537,317		$	577,109		$	590,775		$	592,368
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits	$	615,764		$	641,859		$	615,292		$	585,300		$	633,370
Interest-bearing demand deposits		918,036			916,455			886,294			877,642			775,688
Time deposits		337,584			331,786			309,974			302,978			322,826
Brokered deposits		102,210			99,473			69,106			89,399			104,883
Total deposits	$	1,973,594		$	1,989,573		$	1,880,666		$	1,855,319		$	1,836,767
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances	$	78,000		$	80,000		$	97,000		$	102,000		$	104,000
Overnight FHLB advances (1)		118,900			70,500			54,000			31,000			28,500
Wholesale structured repurchase agreements		100,000			100,000			110,000			115,000			115,000
Customer repurchase agreements		21,441			52,153			73,873			74,404			118,795
Federal funds purchased		30,120			11,870			70,790			93,160			49,780
Junior subordinated debentures		33,413			33,378			38,499			40,527			40,492
Total borrowings	$	381,874		$	347,901		$	444,162		$	456,091		$	456,567
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 0.40%

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
			For the Six Months Ended
			June 30,				June 30,
				2016				2015
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income			$	47,415			$	43,952
Interest expense				5,809				7,679
Net interest income				41,606				36,273
Provision for loan/lease losses				3,271				4,059
Net interest income after provision for loan/lease losses			$	38,335			$	32,214
Trust department fees			$	3,088			$	3,144
Investment advisory and management fees				1,351				1,468
Deposit service fees				1,878				1,826
Gain on sales of residential real estate loans				145				182
Gain on sales of government guaranteed portions of loans				2,482				140
Swap fee income				1,025				1,120
Securities gains, net				376				417
Earnings on bank-owned life insurance				874				912
Debit card fees				651				493
Correspondent banking fees				547				605
Participation service fees on commercial loan participations				457				446
Fee income from early termination of leases				78				162
Credit card issuing fees				276				270
Other				357				498
Total noninterest income			$	13,585			$	11,683
Salaries and employee benefits			$	21,718			$	22,126
Occupancy and equipment expense				3,711				3,660
Professional and data processing fees				2,990				2,941
Acquisition costs				355				-
FDIC insurance, other insurance and regulatory fees				1,284				1,450
Loan/lease expense				317				512
Net cost of operation of other real estate				380				29
Advertising and marketing				820				908
Postage and communications				474				463
Stationery and supplies				323				279
Bank service charges				831				696
Losses on debt extinguishment, net				83				6,894
Correspondent banking expense				359				341
Other				1,053				1,007
Total noninterest expense			$	34,698			$	41,306
Net income before taxes			$	17,222			$	2,591
Income tax expense (benefit)				4,172				(1,063	)
Net income			$	13,050			$	3,654
Basic EPS			$	1.08			$	0.41
Diluted EPS			$	1.07			$	0.40
Weighted average common shares outstanding				12,064,349				8,961,327
Weighted average common and common equivalent shares outstanding				12,235,212				9,098,697

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
			For the Quarter Ended
			June 30,			March 31,			December 31,			September 30,			June 30,
				2016			2016			2015			2015			2015
			(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income			$	23,913		$	23,502		$	22,910		$	23,141		$	22,051
Interest expense				2,904			2,905			3,024			3,004			3,560
Net interest income				21,009			20,597			19,886			20,137			18,491
Provision for loan/lease losses				1,198			2,073			1,177			1,635			2,349
Net interest income after provision for loan/lease losses			$	19,811		$	18,524		$	18,709		$	18,502		$	16,142
Trust department fees			$	1,512		$	1,576		$	1,455		$	1,532		$	1,511
Investment advisory and management fees				693			658			721			782			758
Deposit service fees				947			931			1,003			994			925
Gain on sales of residential real estate loans				84			60			57			85			96
Gain on sales of government guaranteed portions of loans				1,604			879			405			760			69
Swap fee income				168			857			535			63			394
Securities gains, net				18			358			325			57			-
Earnings on bank-owned life insurance				480			394			443			407			433
Debit card fees				344			308			290			290			255
Correspondent banking fees				245			302			275			311			285
Participation service fees on commercial loan participations				246			211			218			202			224
Fee income from early termination of leases				66			12			46			89			76
Credit card issuing fees				139			137			134			134			136
Lawsuit settlement				-			-			-			387			-
Other				216			139			271			276			299
Total noninterest income			$	6,762		$	6,822		$	6,178		$	6,369		$	5,461
Salaries and employee benefits			$	10,917		$	10,801		$	10,258		$	10,583		$	11,092
Occupancy and equipment expense				1,885			1,827			1,535			1,864			1,865
Professional and data processing fees				1,542			1,447			840			1,742			1,471
Acquisition costs				355			-			-			-			-
FDIC insurance, other insurance and regulatory fees				650			634			573			702			731
Loan/lease expense				154			163			281			90			209
Net cost of operation of other real estate				278			102			(4	)		(1,118	)		(48	)
Advertising and marketing				433			386			532			460			490
Postage and communications				257			217			252			221			214
Stationery and supplies				158			165			171			145			137
Bank service charges				415			416			396			392			359
Losses on debt extinguishment, net				-			83			291			-			6,894
Correspondent banking expense				182			177			186			177			165
Other				518			536			528			655			523
Total noninterest expense			$	17,744		$	16,954		$	15,839		$	15,913		$	24,102
Net income (loss) before taxes			$	8,829		$	8,392		$	9,048		$	8,958		$	(2,499	)
Income tax expense (benefit)				2,153			2,019			2,263			2,469			(1,974	)
Net income (loss)			$	6,676		$	6,373		$	6,785		$	6,489		$	(524	)
Basic EPS			$	0.54		$	0.54		$	0.58		$	0.55		$	(0.05	)
Diluted EPS			$	0.53		$	0.53		$	0.57		$	0.55		$	(0.05	)
Weighted average common shares outstanding				12,335,077			11,793,620			11,744,495			11,713,993			9,946,744
Weighted average common and common equivalent shares outstanding				12,516,474			11,953,949			11,926,038			11,875,930			9,946,744

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
	For the Quarter Ended																For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,				June 30,			June 30,
		2016			2016			2015			2015			2015				2016			2015
	(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding		13,057,368			11,814,911			11,761,083			11,728,911			11,698,578
Book value per common share (1)	$	21.07		$	19.90		$	19.21		$	18.85		$	18.10
Tangible book value per common share (2)	$	20.72		$	19.51		$	18.81		$	18.45		$	17.69
Closing stock price	$	27.19		$	23.79		$	24.29		$	21.87		$	21.76
Market capitalization	$	355,030		$	281,077		$	285,677		$	256,511		$	254,561
Market price / book value		129.05	%		119.53	%		126.47	%		116.01	%		120.25	%
Market price / tangible book value		131.24	%		121.94	%		129.15	%		118.55	%		123.03	%
Earnings per common share (basic) LTM (3)	$	2.21		$	1.62		$	1.64		$	1.40		$	1.36
Price earnings ratio LTM (3)	12.30 x			14.69 x			14.81 x			15.62 x			16.00 x
TCE / TA (4)		10.10	%		8.74	%		8.55	%		8.42	%		8.15	%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance	$	235,143		$	225,886		$	221,115		$	211,697		$	150,996
Net income (loss)		6,676			6,373			6,785			6,489			(524	)
Other comprehensive income (loss), net of tax		1,181			2,525			(2,287	)		2,256			(2,379	)
Common cash dividends declared		(521	)		(471	)		(469	)		-			(465	)
Proceeds from issuance of 3,680,000 shares of common stock, net of costs		-			-			-			-			63,484
Proceeds from issuance of 1,215,000 shares of common stock, net of costs		29,829			-			-			-			-
Other (5)		2,809			830			742			673			585
Ending balance	$	275,117		$	235,143		$	225,886		$	221,115		$	211,697
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio		14.23	%		12.68	%		13.11	%		13.06	%		12.92	%
Tier 1 risk-based capital ratio		12.98	%		11.45	%		11.88	%		11.83	%		11.66	%
Tier 1 leverage capital ratio		11.18	%		9.85	%		9.75	%		9.73	%		9.62	%
Common equity tier 1 ratio		11.66	%		10.11	%		10.33	%		10.16	%		9.97	%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)		1.01	%		0.98	%		1.04	%		1.01	%		-0.08	%			1.00	%		0.29	%
Return on average total equity (annualized)		10.46	%		11.02	%		12.14	%		11.99	%		-1.15	%			10.73	%		4.43	%
Net interest margin (TEY) (7)		3.62	%		3.59	%		3.41	%		3.51	%		3.33	%			3.61	%		3.29	%
Efficiency ratio		63.89	%		61.83	%		61.22	%		61.88	%		100.62	%			62.87	%		86.20	%
Gross loans and leases / total assets		71.65	%		70.96	%		69.34	%		68.16	%		67.46	%			71.65	%		67.46	%
Full-time equivalent employees		410			406			406			406			416				410			416
AVERAGE BALANCES
Assets	$	2,640,678		$	2,602,350		$	2,611,276		$	2,563,739		$	2,518,170			$	2,621,514		$	2,512,334
Loans/leases		1,899,932			1,833,950			1,764,275			1,744,043			1,686,068				1,866,941			1,660,887
Deposits		2,033,116			1,980,056			1,978,737			1,881,604			1,798,787				2,006,586			1,772,996
Total stockholders' equity		255,391			231,247			223,553			216,453			181,811				243,319			164,975
(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

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
ANALYSIS OF NET INTEREST INCOME AND MARGIN
		For the Quarter Ended
		June 30, 2016										March 31, 2016										June 30, 2015
		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		$	14,174		$	11			0.31	%		$	17,232		$	13			0.30	%		$	19,523		$	6			0.12	%
Interest-bearing deposits at financial institutions			50,747			62			0.49	%			40,635			60			0.59	%			45,229			65			0.58	%
Securities (1)			505,697			4,573			3.64	%			550,371			4,685			3.42	%			608,688			4,548			3.00	%
Restricted investment securities			14,171			134			3.80	%			14,140			131			3.73	%			15,083			108			2.87	%
Loans (1)			1,899,932			20,497			4.34	%			1,833,950			19,955			4.38	%			1,686,068			18,541			4.41	%
Total earning assets (1)		$	2,484,721		$	25,277			4.09	%		$	2,456,328		$	24,844			4.07	%		$	2,374,591		$	23,268			3.93	%
Interest-bearing deposits		$	941,856		$	600			0.26	%		$	925,246		$	615			0.27	%		$	784,148		$	450			0.23	%
Time deposits			425,216			744			0.70	%			399,604			675			0.68	%			384,895			634			0.66	%
Short-term borrowings			50,122			18			0.14	%			86,539			43			0.20	%			160,479			53			0.13	%
Federal Home Loan Bank advances			128,956			416			1.30	%			128,436			442			1.38	%			173,742			1,002			2.31	%
Junior subordinated debentures			33,396			302			3.64	%			34,650			305			3.54	%			40,475			313			3.10	%
Other borrowings			100,008			824			3.31	%			101,738			825			3.26	%			129,802			1,108			3.42	%
Total interest-bearing liabilities		$	1,679,554		$	2,904			0.70	%		$	1,676,213		$	2,905			0.70	%		$	1,673,541		$	3,560			0.85	%
Net interest income / spread (1)					$	22,373			3.39	%					$	21,939			3.37	%					$	19,708			3.08	%
Net interest margin (1)									3.62	%									3.59	%									3.33	%
		For the Six Months Ended
		June 30, 2016										June 30, 2015
		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		$	15,703		$	23			0.29	%		$	16,606		$	11			0.13	%
Interest-bearing deposits at financial institutions			45,691			123			0.54	%			57,602			142			0.50	%
Securities (1)			528,034			9,257			3.53	%			617,261			9,037			2.95	%
Restricted investment securities			14,156			264			3.75	%			15,513			250			3.25	%
Loans (1)			1,866,941			40,454			4.36	%			1,660,885			36,893			4.48	%
Total earning assets (1)		$	2,470,525		$	50,121			4.08	%		$	2,367,867		$	46,333			3.95	%
Interest-bearing deposits		$	933,551		$	1,214			0.26	%		$	785,749		$	892			0.23	%
Time deposits			412,410			1,420			0.69	%			379,630			1,264			0.67	%
Short-term borrowings			68,331			61			0.18	%			170,697			117			0.14	%
Federal Home Loan Bank advances			128,696			858			1.34	%			190,109			2,446			2.59	%
Junior subordinated debentures			34,023			606			3.58	%			40,458			620			3.09	%
Other borrowings			100,873			1,650			3.29	%			139,408			2,340			3.38	%
Total interest-bearing liabilities		$	1,677,884		$	5,809			0.70	%		$	1,706,051		$	7,679			0.91	%
Net interest income / spread (1)					$	44,312			3.38	%					$	38,654			3.04	%
Net interest margin (1)									3.61	%									3.29	%
(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.

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
		2016			2016			2015			2015			2015
	(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES
Beginning balance	$	27,395		$	26,141		$	25,534		$	26,146		$	23,883
Provision charged to expense		1,198			2,073			1,177			1,635			2,349
Loans/leases charged off		(634	)		(868	)		(1,106	)		(2,476	)		(536	)
Recoveries on loans/leases previously charged off		138			49			536			229			450
Ending balance	$	28,097		$	27,395		$	26,141		$	25,534		$	26,146
NONPERFORMING ASSETS
Nonaccrual loans/leases	$	10,737		$	10,772		$	10,648		$	11,269		$	13,542
Accruing loans/leases past due 90 days or more		86			47			3			3			46
Troubled debt restructures - accruing		1,753			1,157			1,054			1,040			1,266
Total nonperforming loans/leases		12,576			11,976			11,705			12,312			14,854
Other real estate owned		6,179			6,680			7,151			8,140			11,952
Other repossessed assets		154			46			246			194			297
Total nonperforming assets	$	18,909		$	18,702		$	19,102		$	20,646		$	27,103
ASSET QUALITY RATIOS
Nonperforming assets / total assets		0.70	%		0.71	%		0.74	%		0.80	%		1.07	%
Allowance / total loans/leases (1)		1.46	%		1.46	%		1.45	%		1.45	%		1.52	%
Allowance / nonperforming loans/leases (1)		223.42	%		228.75	%		223.33	%		207.39	%		176.02	%

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
					For the Quarter Ended												For the Six Months Ended
					June 30,				March 31,				June 30,				June 30,				June 30,
			SELECT FINANCIAL DATA - SUBSIDIARIES			2016				2016				2015				2016				2015
					(dollars in thousands)
			TOTAL ASSETS
			Quad City Bank and Trust (1)		$	1,390,025			$	1,361,607			$	1,299,557
			m2 Lease Funds, LLC			207,334				205,777				189,951
			Cedar Rapids Bank and Trust			904,367				885,858				860,403
			Rockford Bank and Trust			402,157				367,032				363,050
			TOTAL DEPOSITS
			Quad City Bank and Trust (1)		$	1,049,049			$	1,029,298			$	929,817
			Cedar Rapids Bank and Trust			690,377				686,548				649,586
			Rockford Bank and Trust			296,613				278,129				260,373
			TOTAL LOANS & LEASES
			Quad City Bank and Trust (1)		$	968,905			$	950,978			$	832,799
			m2 Lease Funds, LLC			205,883				205,214				189,311
			Cedar Rapids Bank and Trust			648,727				628,580				598,002
			Rockford Bank and Trust			305,141				294,266				285,944
			TOTAL LOANS & LEASES / TOTAL ASSETS
			Quad City Bank and Trust (1)			70	%			70	%			64	%
			Cedar Rapids Bank and Trust			72	%			71	%			70	%
			Rockford Bank and Trust			76	%			80	%			79	%
			ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES
			Quad City Bank and Trust (1)			1.31	%			1.31	%			1.52	%
			m2 Lease Funds, LLC			1.80	%			1.80	%			1.88	%
			Cedar Rapids Bank and Trust			1.65	%			1.66	%			1.56	%
			Rockford Bank and Trust			1.53	%			1.51	%			1.45	%
			RETURN ON AVERAGE ASSETS
			Quad City Bank and Trust (1)			1.24	%			0.95	%			0.19	%			1.10	%			0.56	%
			Cedar Rapids Bank and Trust			1.46	%			1.39	%			-0.10	%			1.42	%			0.46	%
			Rockford Bank and Trust			0.80	%			0.66	%			0.53	%			0.73	%			0.53	%
			NET INTEREST MARGIN PERCENTAGE (3)
			Quad City Bank and Trust (1)			3.66	%			3.60	%			3.28	%			3.63	%			3.20	%
			Cedar Rapids Bank and Trust			3.77	%			3.75	%			3.63	%			3.77	%			3.63	%
			Rockford Bank and Trust			3.49	%			3.54	%			3.38	%			3.52	%			3.41	%
(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) m2 Lease Funds, LLC net income is post-tax, using an estimated effective tax rate of 35%.
(3) 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.

 

QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
		As of
		June 30,				March 31,				December 31,				September 30,				June 30,
GAAP TO NON-GAAP RECONCILIATIONS			2016				2016				2015				2015				2015
		(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)		$	275,117			$	235,143			$	225,886			$	221,115			$	211,697
Less: Intangible assets			4,595				4,645				4,694				4,744				4,794
Tangible common equity (non-GAAP)		$	270,522			$	230,498			$	221,192			$	216,371			$	206,903
Total assets (GAAP)		$	2,683,434			$	2,640,673			$	2,593,198			$	2,575,855			$	2,542,969
Less: Intangible assets			4,595				4,645				4,694				4,744				4,794
Tangible assets (non-GAAP)		$	2,678,839			$	2,636,028			$	2,588,504			$	2,571,111			$	2,538,175
Tangible common equity to tangible assets ratio (non-GAAP)			10.10	%			8.74	%			8.55	%			8.42	%			8.15	%
		For the Quarter Ended																				For the Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
CORE NET INCOME (2)			2016				2016				2015				2015				2015				2016				2015
Net income (loss) (GAAP)		$	6,676			$	6,373			$	6,785			$	6,489			$	(524	)		$	13,050			$	3,654
Less nonrecurring items (post-tax) (3):
Income:
Securities gains		$	12			$	233			$	211			$	37			$	-			$	245			$	274
Lawsuit award			-				-				-				252				-				-				-
Total nonrecurring income (non-GAAP)		$	12			$	233			$	211			$	289			$	-			$	245			$	274
Expense:
Losses on debt extinguishment		$	-			$	54			$	189			$	-			$	4,481			$	54			$	4,481
Acquisition costs			231				-				-				-				-				231				-
Other non-recurring expenses			-				-				-				-				513				-				513
Accrual adjustments			-				-				(487	)			-				-				-				-
Total nonrecurring expense (non-GAAP)		$	231			$	54			$	(298	)		$	-			$	4,994			$	285			$	4,994
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (2)		$	6,895			$	6,194			$	6,276			$	6,200			$	4,470			$	13,090			$	8,374
CORE EARNINGS PER COMMON SHARE (2)
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above)		$	6,895			$	6,194			$	6,276			$	6,200			$	4,470			$	13,090			$	8,374
Weighted average common shares outstanding			12,335,077				11,793,620				11,744,495				11,713,993				9,946,744				12,064,349				8,961,327
Weighted average common and common equivalent shares outstanding			12,516,474				11,953,949				11,926,038				11,875,930				9,946,744				12,235,212				9,098,697
Core earnings per common share (non-GAAP):
Basic		$	0.56			$	0.53			$	0.53			$	0.53			$	0.45			$	1.09			$	0.93
Diluted		$	0.55			$	0.52			$	0.53			$	0.52			$	0.45			$	1.07			$	0.92
CORE RETURN ON AVERAGE ASSETS (2)
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above)		$	6,895			$	6,194			$	6,276			$	6,200			$	4,470			$	13,090			$	8,374
Average Assets		$	2,640,678			$	2,602,350			$	2,611,276			$	2,563,739			$	2,518,170			$	2,621,514			$	2,512,334
Core return on average assets (annualized) (non-GAAP)			1.04	%			0.95	%			0.96	%			0.97	%			0.71	%			1.00	%			0.67	%
(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.
(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.
(3) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 35%.

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

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