QCR Holdings, Inc. Announces Net Income of $27.0 Million

Fourth Quarter and Full Year 2021 Highlights

  • Record annual net income of $98.9 million, or $6.20 per diluted share
  • Quarterly net income of $27.0 million, or $1.71 per diluted share
  • Adjusted quarterly net income (non-GAAP) of $27.4 million, or $1.73 per diluted share
  • Record adjusted quarterly net interest income (non-GAAP) of $49.2 million, a 6.1% annualized increase compared to the third quarter of 2021
  • Net Interest Margin (“NIM”) of 3.29% and Adjusted NIM (TEY)(non-GAAP) of 3.49% for the quarter
  • Loan and lease growth of 12.0% (annualized) for the quarter and 16.9% for the full year, excluding SBA Paycheck Protection Program (“PPP”) loans (non-GAAP)
  • Annualized core deposit growth of 4.3% for the quarter and 7.2% for the full year
  • Nonperforming assets improved by 60% for the quarter and 80% for the full year and now represent only 0.05% of total assets
  • Allowance for credit losses (“ACL”) to total loans/leases of 1.69%, excluding PPP loans (non-GAAP)

MOLINE, Ill., Jan. 25, 2022 (GLOBE NEWSWIRE) — QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $27.0 million and diluted earnings per share (“EPS”) of $1.71 for the fourth quarter of 2021, compared to net income of $31.6 million and diluted EPS of $1.99 for the third quarter of 2021. For the full year, the Company reported record net income of $98.9 million, or $6.20 per diluted share.

The Company reported adjusted net income (non-GAAP) of $27.4 million and adjusted diluted EPS of $1.73 for the fourth quarter of 2021, compared to adjusted net income (non-GAAP) of $31.6 million and adjusted diluted EPS of $1.99 for the third quarter of 2021. For the fourth quarter of 2020, net income and diluted EPS were $18.3 million and $1.14, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $19.1 million and $1.20, respectively.

  For the Quarter Ended
  December 31, September 30, December 31,
$ in millions (except per share data) 2021 2021 2020
Net Income $ 27.0 $ 31.6 $ 18.3
Diluted EPS $ 1.71 $ 1.99 $ 1.14
Adjusted Net Income (non-GAAP) $ 27.4 $ 31.6 $ 19.1
Adjusted Diluted EPS (non-GAAP) $ 1.73 $ 1.99 $ 1.20
             

Adjusted non-GAAP measurements of financial performance exclude non-recurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

“We are very pleased with our 2021 financial performance, highlighted by record net income and earnings per share,” said Larry J. Helling, Chief Executive Officer. “Our strong results were driven by robust loan growth of 17% for the year as we capitalized on strengthening economic conditions in our markets as well as the value that our clients place on relationship-based community banking. Additionally, we expanded our net interest margin, produced solid fee income, carefully managed expenses and maintained excellent credit quality.”

“In November, we were excited to announce the anticipated acquisition of Guaranty Federal Bancshares, Inc. which will enhance our market share in the vibrant Springfield and southwest Missouri markets. It will enable us to extend our high-performing and profitable niche business lines into those markets. We expect this transaction to close late in the first quarter or early in the second quarter and look forward to welcoming Guaranty Bank to the team.”

Annualized Loan and Lease Growth of 12.0% for the Quarter and 16.9% for the Year, excluding PPP Loans (non-GAAP)

During the fourth quarter of 2021, the Company’s loans and leases, excluding PPP loans (non-GAAP), increased $135.8 million to a total of $4.7 billion. Loan and lease growth, excluding PPP loans (non-GAAP) during the quarter was 12.0% on an annualized basis and was funded by core deposit growth and some excess liquidity. Core deposits (excluding brokered deposits) increased by $52.0 million during the quarter. The Company’s wholesale funding portfolio has been reduced to predominately subordinated debt that qualifies as regulatory capital.

“Our continued robust loan growth was driven by strength in both our traditional commercial lending and leasing business and our Specialty Finance Group,” added Helling. “We believe this is a testament to the underlying economic strength across our markets and our relationship-based community banking model, emphasizing the importance of strong relationships with new and existing clients. Given our current pipeline, we are targeting organic loan growth for the full year 2022 of between 8% and 10%, consistent with our long-term goals.”

Record Net Interest Income of $46.5 million

Net interest income for the fourth quarter of 2021 totaled a record $46.5 million, compared to $46.2 million for the third quarter of 2021 and $43.7 million for the fourth quarter of 2020. Adjusted net interest income (non-GAAP) during the quarter was $49.2 million, an increase of $744 thousand, or 1.5%, from the prior quarter, primarily due to the strong loan/lease growth. Adjusted net interest income (non-GAAP) was $45.3 million for the fourth quarter of 2020. Acquisition-related net accretion totaled $88 thousand for the fourth quarter of 2021, down from $456 thousand in the third quarter of 2021 and down from $1.1 million for the fourth quarter of 2020.

In the fourth quarter, reported NIM was 3.29% and tax-equivalent yield basis (non-GAAP) NIM was 3.50%, compared to 3.36% and 3.56% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.49%, compared to 3.53% in the third quarter. The slight decrease in Adjusted NIM (non-GAAP) during the quarter was primarily due to a 4 basis point decrease in the yield on earning assets (adjusted for acquisition-related net accretion, non-GAAP) driven by slightly lower loan and securities yields and some elevated excess liquidity. However, adjusted NIM benefited from a 1 basis point decline in the total cost of interest-bearing funds, mainly due to mix.
   

  For the Quarter Ended
  December 31, September 30, December 31,
  2021 2021 2020
NIM 3.29 % 3.36 % 3.25 %
NIM (TEY)(non-GAAP) * 3.50 % 3.56 % 3.45 %
Adjusted NIM (TEY)(non-GAAP) * 3.49 % 3.53 % 3.37 %
* See GAAP to non-GAAP reconciliations
 

“We grew net interest income to record levels in the quarter, driven by our continued strong loan growth and our ability to protect and actually expand NIM in this challenging interest rate environment,” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “While reported adjusted NIM declined by 4 basis points this quarter, the decline was approximately two basis points when excluding the impact of lower PPP income and elevated excess liquidity, matching our guidance for the quarter. We had elevated liquidity during much of the quarter, driven by strong seasonal deposit growth with the majority of our strong loan growth occurring in December.”

Noninterest Income of $23.0 million

Noninterest income for the fourth quarter of 2021 totaled $23.0 million, compared to $34.7 million for the third quarter of 2021. The decrease was primarily due to an $11.9 million decrease in capital markets revenue from swap fees, down from the elevated amount in the prior quarter, which benefited from a number of swap transactions that were scheduled to close in the second quarter carrying over into the third quarter. Wealth management revenue was $3.9 million for the quarter, up 3.2% from the third quarter.

“Capital markets revenue from swap fees totaled $13.0 million for the quarter and $61.0 million for the full year,” added Gipple. “Capital markets revenue from swap fees has averaged $17.0 million for the last eight quarters, which gives us confidence in the sustainability of this important source of fee income and supports our continued guidance range of $14 to $18 million per quarter.”

Noninterest Expenses of $39.4 million

Noninterest expense for the fourth quarter of 2021 totaled $39.4 million, compared to $41.4 million for the third quarter of 2021 and $46.4 million for the fourth quarter of 2020. The linked-quarter decrease was primarily due to lower performance-based salary and benefits expense of $3.4 million, mainly the result of a decrease in capital markets revenue production from swap fees. Partially offsetting this decrease was a $584 thousand increase in advertising and marketing and $624 thousand in acquisition costs. Additionally, in the third quarter of 2021, the Company recorded a $1.5 million charge related to the write-down of certain fixed assets and a $1.3 million net gain on the sale of other real estate.

Asset Quality Remains Strong and NPAs Improved

Nonperforming assets (“NPAs”) totaled $2.8 million at the end of the fourth quarter, a decrease of $4.1 million from the third quarter of 2021. The decrease was primarily due to the payoff of one nonaccrual loan during the quarter. The ratio of NPAs to total assets improved to 0.05% as of December 31, 2021, compared to 0.11% as of September 30, 2021, and 0.25% as of December 31, 2020. In addition, the Company’s criticized loans and classified loans to total loans and leases decreased to 2.47% and 1.14%, respectively, from 2.57% and 1.29% as of September 30, 2021.

The Company recorded a $3.2 million negative provision for credit losses in the fourth quarter of 2021, primarily due to continued strong asset quality and a corresponding reduction in the qualitative factor related to the pandemic. As of December 31, 2021, the ACL on total loans/leases was 1.68%, compared to 1.75% as of September 30, 2021. Excluding PPP loans of $28 million, the ACL to total loans/leases as of December 31, 2021, was 1.69% (non-GAAP).

Continued Strong Capital Levels

As of December 31, 2021, the Company’s total risk-based capital ratio was 14.92%, the common equity tier 1 ratio was 10.88% and the tangible common equity to tangible assets ratio (non-GAAP) was 9.87%. By comparison, these respective ratios were 14.64%, 10.55% and 9.54% as of September 30, 2021.

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:

  • Generate organic loan and lease growth of 9% per year, funded by core deposits;
  • Grow fee-based income by at least 6% per year; and
  • Limit our annual operating expense growth to 5% per year.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, January 26, 2022, 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 02, 2022. The replay access information is 877-344-7529 (international 412-317-0088); access code 2205260. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly-owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 24 locations in Iowa, Missouri, Wisconsin and Illinois. As of December 31, 2021, the Company had approximately $6.1 billion in assets, $4.7 billion in loans and $4.9 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; (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof, 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, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB; (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; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; and (xiii) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and 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
  Kim K. Garrett
Vice President
Corporate Communications
Investor Relations Manager
(319) 743-7006
kgarrett@qcrh.com
     

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

           
  As of
  December 31, September 30, June 30, March 31, December 31,
  2021 2021 2021 2021 2020
           
  (dollars in thousands)
           
CONDENSED BALANCE SHEET          
           
Cash and due from banks $ 37,490 $ 57,310 $ 55,598 $ 78,814 $ 61,329
Federal funds sold and interest-bearing deposits   87,662   70,826   88,780   55,056   95,676
Securities, net of allowance for credit losses   810,215   828,719   810,445   799,825   838,131
Net loans/leases   4,601,411   4,519,060   4,338,811   4,279,220   4,166,753
Intangibles   9,349   9,857   10,365   10,873   11,381
Goodwill   74,066   74,066   74,066   74,066   74,066
Derivatives   222,220   198,393   193,395   122,668   222,757
Other assets   253,719   256,277   255,952   246,872   234,950
Total assets $ 6,096,132 $ 6,014,508 $ 5,827,412 $ 5,667,394 $ 5,705,043
           
Total deposits $ 4,922,772 $ 4,871,828 $ 4,688,935 $ 4,631,782 $ 4,599,137
Total borrowings   170,805   183,514   198,908   188,601   177,114
Derivatives   225,135   201,450   196,092   125,863   229,270
Other liabilities   100,410   107,902   113,001   112,429   105,729
Total stockholders’ equity   677,010   649,814   630,476   608,719   593,793
Total liabilities and stockholders’ equity $ 6,096,132 $ 6,014,508 $ 5,827,412 $ 5,667,394 $ 5,705,043
           
ANALYSIS OF LOAN PORTFOLIO          
Loan/lease mix: (1)          
Commercial and industrial – revolving $ 248,483 $ 175,155 $ 182,882 $ 168,842  
Commercial and industrial – other   1,346,602   1,465,580   1,505,384   1,616,144  
Commercial real estate, owner occupied   421,701   434,014   427,734   461,272  
Commercial real estate, non-owner occupied   646,500   644,850   618,879   610,582  
Construction and land development   918,571   852,418   708,289   607,798  
Multi-family   600,412   529,727   466,804   396,272  
Direct financing leases   45,191   50,237   56,153   60,134  
1-4 family real estate   377,361   376,067   382,142   368,927  
Consumer   75,311   71,682   69,438   71,080  
Total loans/leases $ 4,680,132 $ 4,599,730 $ 4,417,705 $ 4,361,051  
Less allowance for credit losses (2)   78,721   80,670   78,894   81,831  
Net loans/leases $ 4,601,411 $ 4,519,060 $ 4,338,811 $ 4,279,220  
           
Loan/lease mix: (1)          
Commercial and industrial loans $ 1,584,922 $ 1,634,047 $ 1,680,853 $ 1,779,062 $ 1,726,723
Commercial real estate loans   2,675,103   2,550,160   2,319,423   2,174,897   2,107,629
Direct financing leases   44,623   49,585   55,371   59,229   66,016
Residential real estate loans   275,552   270,522   268,193   254,900   252,121
Installment and other consumer loans   86,311   85,363   86,925   87,053   91,302
Deferred loan/lease origination costs, net of fees   13,621   10,053   6,940   5,910   7,338
Total loans/leases $ 4,680,132 $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129
Less allowance for credit losses (2)   78,721   80,670   78,894   81,831   84,376
Net loans/leases $ 4,601,411 $ 4,519,060 $ 4,338,811 $ 4,279,220 $ 4,166,753
           
ANALYSIS OF SECURITIES PORTFOLIO          
Securities mix:          
U.S. government sponsored agency securities $ 23,328 $ 23,689 $ 14,670 $ 14,581 $ 15,336
Municipal securities   639,799   649,486   641,603   614,649   627,523
Residential mortgage-backed and related securities   94,323   100,744   106,139   118,051   132,842
Asset backed securities   27,124   30,607   31,778   39,815   40,683
Other securities   25,839   24,367   16,429   12,903   21,747
Total securities $ 810,413 $ 828,893 $ 810,619 $ 799,999 $ 838,131
Less allowance for credit losses (2)   198   174   174   174  
Net securities $ 810,215 $ 828,719 $ 810,445 $ 799,825 $ 838,131
           
ANALYSIS OF DEPOSITS          
Deposit mix:          
Noninterest-bearing demand deposits $ 1,268,788 $ 1,342,273 $ 1,258,885 $ 1,269,578 $ 1,145,378
Interest-bearing demand deposits   3,232,633   3,086,711   2,976,696   2,916,054   2,987,469
Time deposits   421,348   441,743   452,171   445,067   460,659
Brokered deposits   3   1,101   1,183   1,084   5,631
Total deposits $ 4,922,772 $ 4,871,828 $ 4,688,935 $ 4,631,782 $ 4,599,137
           
ANALYSIS OF BORROWINGS          
Borrowings mix:          
Term FHLB advances $ $ $ $ $
Overnight FHLB advances (3)   15,000   30,000   40,000   25,000   15,000
FRB borrowings          
Other short-term borrowings   3,800   1,600   7,070   6,840   5,430
Subordinated notes   113,850   113,811   113,771   118,731   118,691
Junior subordinated debentures   38,155   38,103   38,067   38,030   37,993
Total borrowings $ 170,805 $ 183,514 $ 198,908 $ 188,601 $ 177,114
           
(1) The Company adopted ASU 2016-13 “CECL”, effective January 1, 2021, which included a change in class of receivable and segment categories.
(2) The Company adopted ASU 2016-13 “CECL”, effective January 1, 2021, which requires an allowance for credit losses (“ACL”) on loans/leases, off-balance sheet (“OBS”) exposures and held to maturity (“HTM”) securities, recorded through the income statement within the provision for credit losses. The Day 1 adjustments to ACL were as follows: loans/leases ($8.1) million, OBS $9.1 million, HTM securities $183 thousand.
(3) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 0.31%.  
           

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

    For the Quarter Ended
    December 31, September 30, June 30, March 31, December 31,
      2021     2021     2021     2021   2020  
             
    (dollars in thousands, except per share data)
             
INCOME STATEMENT            
Interest income   $ 52,020   $ 51,667   $ 48,903   $ 47,565 $ 49,851  
Interest expense     5,507     5,438     5,387     5,590   6,144  
Net interest income     46,513     46,229     43,516     41,975   43,707  
Provision for credit losses (1)     (3,227 )           6,713   7,080  
Net interest income after provision for loan/lease losses   $ 49,740   $ 46,229   $ 43,516   $ 35,262 $ 36,627  
             
             
Trust department fees   $ 2,843   $ 2,714   $ 2,848   $ 2,801 $ 2,388  
Investment advisory and management fees     1,047     1,054     1,039     940   926  
Deposit service fees     1,644     1,588     1,492     1,408   1,875  
Gain on sales of residential real estate loans     922     954     1,184     1,337   1,462  
Gain on sales of government guaranteed portions of loans     227               224  
Swap fee income/capital markets revenue     12,982     24,885     9,568     13,557   21,402  
Securities gains (losses), net             (88 )     617  
Earnings on bank-owned life insurance     470     446     451     471   461  
Debit card fees     1,072     1,085     1,084     975   923  
Correspondent banking fees     266     265     269     314   270  
Other     1,512     1,661     1,449     1,686   1,469  
Total noninterest income   $ 22,985   $ 34,652   $ 19,296   $ 23,489 $ 32,017  
             
             
Salaries and employee benefits   $ 24,809   $ 28,207   $ 23,044   $ 24,847 $ 30,446  
Occupancy and equipment expense     3,723     4,122     3,965     4,108   4,917  
Professional and data processing fees     3,866     3,568     3,702     3,443   3,871  
Acquisition costs     624                
Post-acquisition compensation, transition and integration costs                   25  
Disposition costs     5             8   64  
FDIC insurance, other insurance and regulatory fees     1,316     1,108     986     1,065   1,272  
Loan/lease expense     606     308     457     300   465  
Net cost of (income from) and gains/losses on operations of other real estate         (1,346 )   (113 )   39   (4 )
Advertising and marketing     1,679     1,095     853     627   1,276  
Bank service charges     553     525     572     523   523  
Losses on liability extinguishment                   1,457  
Correspondent banking expense     200     201     198     200   205  
Intangibles amortization     508     508     508     508   521  
Loss (gain) on sale of subsidiary                   (147 )
Other     1,523     3,091     1,503     1,560   1,473  
Total noninterest expense   $ 39,412   $ 41,387   $ 35,675   $ 37,228 $ 46,364  
             
Net income before income taxes   $ 33,313   $ 39,494   $ 27,137   $ 21,523 $ 22,280  
Federal and state income tax expense     6,304     7,929     4,788     3,541   4,009  
Net income   $ 27,009   $ 31,565   $ 22,349   $ 17,982 $ 18,271  
             
Basic EPS   $ 1.73   $ 2.02   $ 1.41   $ 1.14 $ 1.16  
Diluted EPS   $ 1.71   $ 1.99   $ 1.39   $ 1.12 $ 1.14  
             
             
Weighted average common shares outstanding     15,582,276     15,635,123     15,813,932     15,803,643   15,775,596  
Weighted average common and common equivalent shares outstanding     15,838,246     15,869,798     16,045,239     16,025,548   15,973,054  
             
(1) Provision for credit losses only included provision for loans/leases for years prior to 2021.        
             

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

    For Year Ended
    December 31,   December 31,
      2021       2020  
         
    (dollars in thousands, except per share data)
         
INCOME STATEMENT        
Interest income   $ 200,155     $ 198,373  
Interest expense     21,922       31,423  
Net interest income     178,233       166,950  
Provision for credit losses (1)     3,486       55,704  
Net interest income after provision for loan/lease losses   $ 174,747     $ 111,246  
         
         
Trust department fees   $ 11,206     $ 9,207  
Investment advisory and management fees     4,080       5,318  
Deposit service fees     6,132       6,041  
Gain on sales of residential real estate loans     4,397       4,680  
Gain on sales of government guaranteed portions of loans     227       224  
Swap fee income/capital markets revenue     60,992       74,821  
Securities gains (losses), net     (88 )     2,484  
Earnings on bank-owned life insurance     1,838       1,904  
Debit card fees     4,216       3,402  
Correspondent banking fees     1,114       903  
Other     6,308       4,814  
Total noninterest income   $ 100,422     $ 113,798  
         
         
Salaries and employee benefits   $ 100,907     $ 96,268  
Occupancy and equipment expense     15,918       16,504  
Professional and data processing fees     14,579       14,644  
Acquisition costs     624        
Post-acquisition compensation, transition and integration costs           214  
Disposition costs     13       690  
FDIC insurance, other insurance and regulatory fees     4,475       4,164  
Loan/lease expense     1,671       1,435  
Net cost of (income from) and gains/losses on operations of other real estate   (1,420 )     (307 )
Advertising and marketing     4,254       3,260  
Bank service charges     2,173       2,016  
Losses on liability extinguishment           3,907  
Correspondent banking expense     799       838  
Intangibles amortization     2,032       2,149  
Goodwill impairment           500  
Loss on sale of subsidiary           158  
Other     7,677       5,315  
Total noninterest expense   $ 153,702     $ 151,755  
         
Net income before income taxes   $ 121,467     $ 73,289  
Federal and state income tax expense     22,562       12,707  
Net income   $ 98,905     $ 60,582  
         
Basic EPS   $ 6.30     $ 3.84  
Diluted EPS   $ 6.20     $ 3.80  
         
Weighted average common shares outstanding     15,708,744       15,771,650  
Weighted average common and common equivalent shares outstanding     15,944,708       15,952,637  
         
(1) Provision for credit losses only included provision for loans/leases for years prior to 2021.    
         

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,
    2021     2021     2021     2021     2020       2021     2020  
                 
  (dollars in thousands, except per share data)
                 
COMMON SHARE DATA                
Common shares outstanding   15,613,460     15,590,428     15,763,522     15,843,732     15,805,711        
Book value per common share (1) $ 43.36   $ 41.68   $ 40.00   $ 38.42   $ 37.57        
Tangible book value per common share (Non-GAAP) (2) $ 38.02   $ 36.30   $ 34.64   $ 33.06   $ 32.16        
Closing stock price $ 56.00   $ 51.44   $ 48.09   $ 47.22   $ 39.59        
Market capitalization $ 874,354   $ 801,972   $ 758,068   $ 748,141   $ 625,748        
Market price / book value   129.15 %   123.42 %   120.24 %   122.90 %   105.38 %      
Market price / tangible book value   147.30 %   141.72 %   138.83 %   142.83 %   123.09 %      
Earnings per common share (basic) LTM (3) $ 6.30   $ 5.73   $ 4.81   $ 4.27   $ 3.84        
Price earnings ratio LTM (3)   8.88 x     8.98 x     10.00 x     11.06 x     10.31 x        
TCE / TA (Non-GAAP) (4)   9.87 %   9.54 %   9.51 %   9.38 %   9.05 %      
                 
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY        
Beginning balance $ 649,814   $ 630,476   $ 608,719   $ 593,793   $ 572,613        
Cumulative effect from the adoption of ASU 2016-13 “CECL”               (937 )          
Net income   27,009     31,565     22,349     17,982     18,271        
Other comprehensive income (loss), net of tax   295     (2,546 )   4,179     (1,751 )   3,157        
Common stock cash dividends declared   (935 )   (946 )   (951 )   (949 )   (947 )      
Repurchase and cancellation of shares of common stock as a result of a share repurchase program       (9,367 )   (4,800 )              
Other (5)   827     632     980     581     699        
Ending balance $ 677,010   $ 649,814   $ 630,476   $ 608,719   $ 593,793        
                 
REGULATORY CAPITAL RATIOS (6):                
Total risk-based capital ratio   14.92 %   14.64 %   14.72 %   14.85 %   14.95 %      
Tier 1 risk-based capital ratio   11.58 %   11.26 %   11.26 %   11.31 %   11.34 %      
Tier 1 leverage capital ratio   10.46 %   10.28 %   10.29 %   10.10 %   9.49 %      
Common equity tier 1 ratio   10.88 %   10.55 %   10.52 %   10.55 %   10.55 %      
                 
KEY PERFORMANCE RATIOS AND OTHER METRICS                
Return on average assets (annualized)   1.76 %   2.11 %   1.56 %   1.27 %   1.25 %     1.68 %   1.08 %
Return on average total equity (annualized)   16.23 %   19.30 %   14.33 %   11.91 %   12.43 %     15.52 %   10.70 %
Net interest margin   3.29 %   3.36 %   3.28 %   3.26 %   3.25 %     3.30 %   3.28 %
Net interest margin (TEY) (Non-GAAP)(7)   3.50 %   3.56 %   3.46 %   3.43 %   3.45 %     3.49 %   3.44 %
Efficiency ratio (Non-GAAP) (8)   56.71 %   51.17 %   56.80 %   56.87 %   61.23 %     55.16 %   54.05 %
Gross loans and leases / total assets   76.77 %   76.48 %   75.81 %   76.95 %   74.52 %     76.77 %   74.81 %
Gross loans and leases / total deposits   95.07 %   94.41 %   94.22 %   94.15 %   92.43 %     95.07 %   92.43 %
Effective tax rate   18.92 %   20.08 %   17.64 %   16.45 %   17.99 %     18.57 %   17.34 %
Full-time equivalent employees   726     724     725     720     714       726     714  
                 
AVERAGE BALANCES                
Assets $ 6,121,446   $ 5,982,583   $ 5,761,314   $ 5,691,097   $ 5,842,299     $ 5,890,042   $ 5,604,074  
Loans/leases   4,608,111     4,529,136     4,412,322     4,271,782     4,250,951       4,456,461     4,031,567  
Deposits   4,983,869     4,779,876     4,709,732     4,628,889     4,742,602       4,776,575     4,540,266  
Total stockholders’ equity   665,698     654,186     624,000     604,012     588,042       637,190     566,240  
                 
(1) Includes accumulated other comprehensive income (loss).              
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP).        
(3) LTM : Last twelve months.                
(4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.        
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.  
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.      
(7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.            
(8) See GAAP to Non-GAAP reconciliations.                
                 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

ANALYSIS OF NET INTEREST INCOME AND MARGIN                  
                       
  For the Quarter Ended
  December 31, 2021   September 30, 2021   December 31, 2020
  Average Balance Interest Earned or Paid Average Yield or Cost   Average Balance Interest Earned or Paid Average Yield or Cost   Average Balance Interest Earned or Paid Average Yield or Cost
                       
  (dollars in thousands)
                       
Fed funds sold $ 3,334 $ 1 0.09 %   $ 3,030 $ 1 0.10 %   $ 1,216 $ 1 0.08 %
Interest-bearing deposits at financial institutions   161,514   63 0.15 %     99,024   39 0.16 %     279,024   82 0.12 %
Securities (1)   810,334   7,514 3.70 %     799,471   7,646 3.82 %     795,696   7,207 3.62 %
Restricted investment securities   18,929   231 4.78 %     20,910   262 4.97 %     18,790   236 4.92 %
Loans (1)   4,608,111   47,010 4.05 %     4,529,136   46,427 4.07 %     4,250,951   44,956 4.21 %
Total earning assets (1) $ 5,602,222 $ 54,819 3.89 %   $ 5,451,571 $ 54,375 3.96 %   $ 5,345,677 $ 52,482 3.91 %
                       
Interest-bearing deposits $ 3,231,477 $ 2,401 0.29 %   $ 3,041,941 $ 2,183 0.28 %   $ 3,033,119 $ 2,060 0.27 %
Time deposits   442,835   963 0.86 %     461,210   1,090 0.94 %     530,813   1,752 1.31 %
Short-term borrowings   2,484   1 0.12 %     6,858   1 0.10 %     19,115   3 0.17 %
Federal Home Loan Bank advances   4,141   3 0.31 %     54,293   41 0.30 %     33,207   80 0.94 %
Subordinated debentures   113,829   1,554 5.46 %     113,789   1,554 5.46 %     118,612   1,678 5.66 %
Junior subordinated debentures   38,132   584 5.99 %     38,084   569 5.84 %     37,969   571 5.88 %
Total interest-bearing liabilities $ 3,832,898 $ 5,506 0.57 %   $ 3,716,175 $ 5,438 0.58 %   $ 3,772,835 $ 6,144 0.64 %
                       
Net interest income (1)   $ 49,313       $ 48,937       $ 46,338  
Net interest margin (2)     3.29 %       3.36 %       3.25 %
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.50 %       3.56 %       3.45 %
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)   3.49 %       3.53 %       3.37 %
                       
                       
                       
  For the Year Ended        
  December 31, 2021   December 31, 2020    
  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 $ 1,964 $ 2 0.10 %   $ 2,398 $ 19 0.79 %        
Interest-bearing deposits at financial institutions   116,421   173 0.15 %     315,616   669 0.21 %        
Securities (1)   804,636   29,504 3.66 %     715,808   26,773 3.74 %        
Restricted investment securities   19,386   950 4.83 %     20,270   1,031 5.00 %        
Loans (1)   4,456,461   179,738 4.03 %     4,031,567   178,097 4.42 %        
Total earning assets (1) $ 5,398,868 $ 210,367 3.90 %   $ 5,085,659 $ 206,589 4.06 %        
                       
Interest-bearing deposits $ 3,058,917 $ 8,621 0.28 %   $ 2,797,669 $ 11,980 0.43 %        
Time deposits   448,191   4,679 1.04 %     690,222   11,289 1.64 %        
Short-term borrowings   6,281   5 0.08 %     22,625   84 0.37 %        
Federal Home Loan Bank advances   23,389   70 0.30 %     74,167   1,087 1.44 %        
Subordinated debentures   115,398   6,272 5.44 %     83,404   4,697 5.63 %        
Junior subordinated debentures   38,067   2,276 5.90 %     37,913   2,286 5.93 %        
Total interest-bearing liabilities $ 3,690,243 $ 21,923 0.59 %   $ 3,706,000 $ 31,423 0.85 %        
                       
Net interest income (1)   $ 188,444       $ 175,166          
Net interest margin (2)     3.30 %       3.28 %        
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.49 %       3.44 %        
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)       3.47 %       3.38 %        
                       
(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,
    2021     2021     2021     2021     2020  
           
  (dollars in thousands, except per share data)
           
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES          
Beginning balance $ 80,670   $ 78,894   $ 81,831   $ 84,376   $ 79,582  
Adoption of ASU 2016-13 “CECL” – Day 1 adjustment               (8,102 )    
Provision charged to expense   (2,045 )   1,895     (141 )   5,993     7,080  
Loans/leases charged off   (375 )   (287 )   (3,163 )   (713 )   (2,779 )
Recoveries on loans/leases previously charged off   471     168     367     277     493  
Ending balance $ 78,721   $ 80,670   $ 78,894   $ 81,831   $ 84,376  
           
NONPERFORMING ASSETS          
Nonaccrual loans/leases $ 2,759   $ 6,818   $ 8,230   $ 13,863   $ 13,940  
Accruing loans/leases past due 90 days or more   1     14     57         3  
Total nonperforming loans/leases   2,760     6,832     8,287     13,863     13,943  
Other real estate owned           1,820     173     20  
Other repossessed assets               50     135  
Total nonperforming assets $ 2,760   $ 6,832   $ 10,107   $ 14,086   $ 14,098  
           
ASSET QUALITY RATIOS          
Nonperforming assets / total assets   0.05 %   0.11 %   0.17 %   0.25 %   0.25 %
ACL for loans and leases / total loans/leases (1)   1.68 %   1.75 %   1.79 %   1.88 %   1.98 %
ACL for loans and leases / nonperforming loans/leases (1)   2852.21 %   1180.77 %   952.02 %   590.28 %   605.15 %
Net charge-offs as a % of average loans/leases   0.00 %   0.00 %   0.06 %   0.01 %   0.05 %
           
INTERNALLY ASSIGNED RISK RATING (2)          
Special mention (rating 6) $ 62,510   $ 58,634   $ 51,613   $ 53,466   $ 71,482  
Substandard (rating 7)   53,159     59,402     79,719     84,982     66,081  
Doubtful (rating 8)                    
  $ 115,669   $ 118,036   $ 131,332   $ 138,448   $ 137,563  
           
Criticized loans (3) $ 115,669   $ 118,036   $ 131,332   $ 138,448   $ 137,563  
Classified loans (4)   53,159     59,402     79,719     84,982     66,081  
           
Criticized loans as a % of total loans/leases   2.47 %   2.57 %   2.97 %   3.17 %   3.24 %
Classified loans as a % of total loans/leases   1.14 %   1.29 %   1.80 %   1.95 %   1.55 %
           
(1) Prior to adoption of ASU 2016-13 “CECL”, upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance and impacts this ratio. There have been no acquisitions since adopting ASU 2016-13 “CECL”, which requires an allowance to be established on acquired loans.
(2) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
(3) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.
(4) 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     2021       2021       2020       2021       2020  
    (dollars in thousands)
                     
TOTAL ASSETS                    
Quad City Bank and Trust (1)   $ 2,142,345     $ 2,106,631     $ 2,153,773          
m2 Equipment Finance, LLC     266,588       259,543       243,090          
Cedar Rapids Bank and Trust     2,030,279       2,019,018       1,957,695          
Community State Bank – Ankeny     1,168,606       1,140,933       1,004,183          
Springfield First Community Bank     882,885       880,143       779,955          
                     
TOTAL DEPOSITS                    
Quad City Bank and Trust (1)   $ 1,849,313     $ 1,797,969     $ 1,866,635          
Cedar Rapids Bank and Trust     1,504,992       1,526,144       1,378,108          
Community State Bank – Ankeny     1,020,548       994,042       875,400          
Springfield First Community Bank     590,164       605,947       569,036          
                     
TOTAL LOANS & LEASES                    
Quad City Bank and Trust (1)   $ 1,650,234     $ 1,636,170     $ 1,556,762          
m2 Equipment Finance, LLC     270,274       262,962       244,325          
Cedar Rapids Bank and Trust     1,437,808       1,410,160       1,362,056          
Community State Bank – Ankeny     866,952       834,533       707,681          
Springfield First Community Bank     725,139       718,867       624,629          
                     
TOTAL LOANS & LEASES / TOTAL DEPOSITS                    
Quad City Bank and Trust (1)     89 %     91 %     83 %        
Cedar Rapids Bank and Trust     96 %     92 %     99 %        
Community State Bank – Ankeny     85 %     84 %     81 %        
Springfield First Community Bank     123 %     119 %     110 %        
                     
                     
TOTAL LOANS & LEASES / TOTAL ASSETS                    
Quad City Bank and Trust (1)     77 %     78 %     72 %        
Cedar Rapids Bank and Trust     71 %     70 %     70 %        
Community State Bank – Ankeny     74 %     73 %     70 %        
Springfield First Community Bank     82 %     82 %     80 %        
                     
ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES                    
Quad City Bank and Trust (1)     1.82 %     1.88 %     1.95 %        
m2 Equipment Finance, LLC     3.55 %     3.78 %     2.63 %        
Cedar Rapids Bank and Trust (2)     1.73 %     1.85 %     2.35 %        
Community State Bank – Ankeny (2)     1.69 %     1.73 %     2.02 %        
Springfield First Community Bank (2)     1.27 %     1.30 %     1.23 %        
                     
RETURN ON AVERAGE ASSETS                    
Quad City Bank and Trust (1)     1.86 %     1.66 %     1.52 %     1.63 %     0.99 %
Cedar Rapids Bank and Trust     2.56 %     3.93 %     0.59 %     2.85 %     1.81 %
Community State Bank – Ankeny     1.50 %     1.17 %     3.25 %     1.17 %     1.25 %
Springfield First Community Bank     1.82 %     2.09 %     3.02 %     1.73 %     1.74 %
                     
NET INTEREST MARGIN PERCENTAGE (3)                    
Quad City Bank and Trust (1)     3.48 %     3.47 %     3.19 %     3.36 %     3.17 %
Cedar Rapids Bank and Trust (4)     3.66 %     3.68 %     3.51 %     3.62 %     3.47 %
Community State Bank – Ankeny (5)     3.52 %     3.78 %     3.77 %     3.66 %     3.89 %
Springfield First Community Bank (6)     3.49 %     3.67 %     4.03 %     3.56 %     3.87 %
                     
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET                
INTEREST MARGIN, NET                    
Cedar Rapids Bank and Trust   $ 21     $ 64     $ 103     $ 190     $ 430  
Community State Bank – Ankeny     30       52       132       468       325  
Springfield First Community Bank     89       376       880       844       2,671  
QCR Holdings, Inc. (7)     (52 )     (36 )     (38 )     (162 )     (155 )
                     
(1) Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
(2) Prior to adoption of ASU 2016-13 “CECL”, upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance and impacts this ratio. There have been no acquisitions since adopting ASU 2016-13 “CECL”, which requires an allowance to be established on acquired loans.
(3) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.    
(4) Cedar Rapids Bank and Trust’s net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.65% for the quarter ended December 31, 2021, 3.66% for the quarter ended September 30, 2021 and 3.47% for the quarter ended December 31, 2020.    
(5) Community State Bank’s net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.50% for the quarter ended December 31, 2021, 3.75% for the quarter ended September 30, 2021 and 3.69% for the quarter ended December 31, 2020.    
(6) Springfield First Community Bank’s net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.50% for the quarter ended December 31, 2021, 3.53% for the quarter ended September 30, 2021 and 3.59% for the quarter ended December 31, 2020.
(7) Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.    
                     

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

    As of
    December 31,   September 30,   June 30,   March 31,   December 31,
GAAP TO NON-GAAP RECONCILIATIONS     2021       2021       2021       2021       2020  
    (dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)                    
                     
Stockholders’ equity (GAAP)   $ 677,010     $ 649,814     $ 630,476     $ 608,719     $ 593,793  
Less: Intangible assets     83,415       83,923       84,431       84,939       85,447  
Tangible common equity (non-GAAP)   $ 593,595     $ 565,891     $ 546,045     $ 523,780     $ 508,346  
                     
Total assets (GAAP)   $ 6,096,132     $ 6,014,508     $ 5,827,412     $ 5,667,394     $ 5,705,043  
Less: Intangible assets     83,415       83,923       84,431       84,939       85,447  
Tangible assets (non-GAAP)   $ 6,012,717     $ 5,930,585     $ 5,742,981     $ 5,582,455     $ 5,619,596  
                     
Tangible common equity to tangible assets ratio (non-GAAP)   9.87 %     9.54 %     9.51 %     9.38 %     9.05 %
                     
(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.
 

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)     2021       2021       2021       2021       2020       2021       2020  
    (dollars in thousands, except per share data)
                             
Net income (GAAP)   $ 27,009     $ 31,565     $ 22,349     $ 17,982     $ 18,271     $ 98,905     $ 60,582  
                             
Less non-core items (post-tax) (2):                            
Income:                            
Securities gains(losses), net                 (69 )           487     $ (69 )   $ 1,962  
Mark to Market gains (losses) on derivatives, net     77       (13 )     (58 )     129             135     $  
Gain on sale of loan           28                         28      
Loss on syndicated loan                             (210 )         $ (210 )
Total non-core income (non-GAAP)   $ 77     $ 15     $ (127 )   $ 129     $ 277     $ 94     $ 1,752  
                             
Expense:                            
Losses on debt extinguishment, net   $     $     $     $     $ 1,151     $     $ 3,087  
Goodwill impairment                                         500  
Disposition costs     3                   7       51       10       545  
Acquisition costs (4)     493                               493        
Separation agreement                       734             734        
Post-acquisition compensation, transition and integration costs                             20             169  
Loss on sale of subsidiary                             (102 )           110  
Total non-core expense (non-GAAP)   $ 496     $     $     $ 741     $ 1,119     $ 1,237     $ 4,411  
Adjusted net income (non-GAAP) (1)   $ 27,428     $ 31,550     $ 22,476     $ 18,594     $ 19,113     $ 100,048     $ 63,241  
                             
ADJUSTED EARNINGS PER COMMON SHARE (1)                            
                             
Adjusted net income (non-GAAP) (from above)   $ 27,428     $ 31,550     $ 22,476     $ 18,594     $ 19,113     $ 100,048     $ 63,241  
                             
Weighted average common shares outstanding     15,582,276       15,635,123       15,813,932       15,803,643       15,775,596       15,708,744       15,771,650  
Weighted average common and common equivalent shares outstanding     15,838,246       15,869,798       16,045,239       16,025,548       15,973,054       15,944,708       15,952,637  
                             
Adjusted earnings per common share (non-GAAP):                            
Basic   $ 1.76     $ 2.02     $ 1.42     $ 1.18     $ 1.21     $ 6.37     $ 4.01  
Diluted   $ 1.73     $ 1.99     $ 1.40     $ 1.16     $ 1.20     $ 6.27     $ 3.96  
                             
ADJUSTED RETURN ON AVERAGE ASSETS (1)                            
                             
Adjusted net income (non-GAAP) (from above)   $ 27,428     $ 31,550     $ 22,476     $ 18,594     $ 19,113     $ 100,048     $ 63,241  
                             
Average Assets   $ 6,121,446     $ 5,982,583     $ 5,761,314     $ 5,691,097     $ 5,842,299     $ 5,890,042     $ 5,604,074  
                             
Adjusted return on average assets (annualized) (non-GAAP)     1.79 %     2.11 %     1.56 %     1.31 %     1.31 %     1.70 %     1.13 %
                             
NET INTEREST MARGIN (TEY) (4)                            
                             
Net interest income (GAAP)   $ 46,513     $ 46,229     $ 43,516     $ 41,975     $ 43,707     $ 178,233     $ 166,950  
                             
Plus: Tax equivalent adjustment (3)     2,800       2,708       2,444       2,267       2,631       10,211       8,216  
                             
Net interest income – tax equivalent (Non-GAAP)   $ 49,313     $ 48,937     $ 45,960     $ 44,242     $ 46,338     $ 188,444     $ 175,166  
                             
Less: Acquisition accounting net accretion     88       456       291       504       1,077       1,340       3,271  
                             
Adjusted net interest income   $ 49,225     $ 48,481     $ 45,669     $ 43,738     $ 45,261     $ 187,104     $ 171,895  
                             
Average earning assets   $ 5,602,222     $ 5,451,571     $ 5,320,881     $ 5,218,198     $ 5,345,677     $ 5,398,868     $ 5,085,659  
                             
Net interest margin (GAAP)     3.29 %     3.36 %     3.28 %     3.26 %     3.25 %     3.30 %     3.28 %
Net interest margin (TEY) (Non-GAAP)     3.50 %     3.56 %     3.46 %     3.43 %     3.45 %     3.49 %     3.44 %
Adjusted net interest margin (TEY) (Non-GAAP)     3.49 %     3.53 %     3.44 %     3.40 %     3.37 %     3.47 %     3.38 %
                             
EFFICIENCY RATIO (5)                            
                             
Noninterest expense (GAAP)   $ 39,412     $ 41,387     $ 35,675     $ 37,228     $ 46,364     $ 153,702     $ 151,755  
                             
Net interest income (GAAP)   $ 46,513     $ 46,229     $ 43,516     $ 41,975     $ 43,707     $ 178,233     $ 166,950  
Noninterest income (GAAP)     22,985       34,652       19,296       23,489       32,017       100,422       113,798  
Total income   $ 69,498     $ 80,881     $ 62,812     $ 65,464     $ 75,724     $ 278,655     $ 280,748  
                             
Efficiency ratio (noninterest expense/total income) (Non-GAAP)     56.71 %     51.17 %     56.80 %     56.87 %     61.23 %     55.16 %     54.05 %
                             
ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES TO TOTAL LOANS/LEASES, EXCLUDING PPP LOANS (6)                            
                             
Allowance for credit losses on loans and leases   $ 78,721     $ 80,670     $ 78,894     $ 81,831     $ 84,376     $ 78,721     $ 84,376  
                             
Total loans and leases   $ 4,680,132     $ 4,599,730     $ 4,417,705     $ 4,361,051     $ 4,251,129     $ 4,680,132     $ 4,251,129  
Less: PPP loans     28,181       83,575       147,506       243,860       273,146       28,181       273,146  
Total loans and leases, excluding PPP loans   $ 4,651,951     $ 4,516,155     $ 4,270,199     $ 4,117,191     $ 3,977,983     $ 4,651,951     $ 3,977,983  
                             
Allowance for credit losses on loans and leases to total loans and leases, excluding PPP loans     1.69 %     1.79 %     1.85 %     1.99 %     2.12 %     1.69 %     2.12 %
                             
                             
LOAN GROWTH ANNUALIZED, EXCLUDING PPP LOANS                            
Total loans and leases   $ 4,680,132     $ 4,599,730     $ 4,417,705     $ 4,361,051     $ 4,251,129     $ 4,680,132     $ 4,251,129  
Less: PPP loans     28,181       83,575       147,506       243,860       273,146       28,181       273,146  
Total loans and leases, excluding PPP loans   $ 4,651,951     $ 4,516,155     $ 4,270,199     $ 4,117,191     $ 3,977,983     $ 4,651,951     $ 3,977,983  
                             
Loan growth annualized, excluding PPP loans     12.03 %     23.04 %     14.87 %     14.00 %     9.00 %     16.94 %     7.80 %
                             
                             
(1) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are non-GAAP financial measures. The Company’s management believes that these measurements are important to investors as they exclude non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is the most directly comparable GAAP financial measure.
(2) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain/loss on sale of assets and liabilities of subsidiary has an estimated effective tax rate of 30.5%.
(3) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21%.                
(4) Net interest margin (TEY) is a non-GAAP financial measure. The Company’s management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it’s difficult to provide a more realistic run-rate for future periods.
(5) Efficiency ratio is a non-GAAP measure. The Company’s management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.
(6) Allowance for credit losses on loans and leases to total loans and leases, excluding PPP loans is a non-GAAP measure. The Company’s management utilizes this ratio to remove from the allowance calculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans have no allowance for loan and lease loss allocation.
     

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