EXHIBIT 99.1
QCR Holdings, Inc. Announces Earnings Results for the First Quarter of 2008
MOLINE, Ill., April 25, 2008 (PRIME NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced earnings for the first quarter ended March 31, 2008 of $686 thousand, which resulted in diluted earnings per share for common shareholders of $0.05. Earnings and diluted earnings per share for the fourth quarter of 2007 were $1.6 million and $0.29, respectively. For the same quarter one year ago, the Company reported earnings of $1.3 million and diluted earnings per share of $0.22.
"First quarter results were negatively impacted by an increase of approximately $1.7 million in provision for loan/lease losses over the prior quarter," stated Douglas M. Hultquist, President and CEO. "Of this increase, $1.1 million was the result of a large charge-off associated with a single lending relationship at First Wisconsin Bank & Trust. This loan was with a real estate developer that had a number of other development projects, not financed by First Wisconsin, go into receivership and the developer recently filed for bankruptcy protection. We believed that it was appropriate to fully provide for and charge off this credit in the first quarter." Mr. Hultquist added, "In light of the recent uncertainty in the national economy and its potential impact on our markets, we also took steps to increase the qualitative loan/lease loss reserve factors for each of our subsidiary banks and our leasing company. This adjustment led to the majority of the remaining increase in the provision."
Quarter-to-quarter net interest income increased by $692 thousand, or nearly 7.0%, as net interest margin improved for the fifth consecutive quarter to 3.13%, which represented a 6 basis point improvement from the prior quarter.
In addition, noninterest income increased $253 thousand, or 7.2%, from the previous quarter. The Company experienced solid growth in gains on sale of loans, earnings on the Company's investment in bank owned life insurance, and other miscellaneous sources. Offsetting these improved revenues was an increase in noninterest expenses of $801 thousand, or 7.7%, when compared to the prior quarter. The majority of the increased noninterest expense was the result of a $506 thousand increase in salary and benefits expense and a $162 thousand increase in professional and data processing fees.
"We are very pleased with the Company's continued improvement in net interest margin," stated Mr. Hultquist. "Despite the sharp decline in the interest rate environment over the past 6 months, the Company has successfully expanded margin. Additionally, growth in core deposits is a strong focus for 2008, and our talented team of bankers has helped us get off to a great start in this highly competitive market as they continue to generate new retail and commercial banking relationships while retaining and expanding our existing customer base."
During the first quarter of 2008, the Company's total assets increased at an annualized rate of 13.7%, or $50.6 million, to $1.53 billion from $1.48 billion at December 31, 2007. During this same period, loans/leases increased at an annualized rate of 16.0%, or $44.2 million, to $1.15 billion from $1.11 billion at December 31, 2007. Total deposits increased during the first quarter by $59.2 million, or an annualized rate of 25.5%, to $988.6 million at March 31, 2008. Stockholders' equity increased to $88.3 million, as compared to $86.1 million at December 31, 2007.
First quarter results for the Company's primary subsidiaries were as follows:
* Quad City Bank & Trust, the Company's first subsidiary bank, had
total consolidated assets of $869.0 million at March 31, 2008,
which was an increase of $8.3 million from $860.7 million at
December 31, 2007. At March 31, 2008, Quad City Bank & Trust had
net loans/leases of $645.0 million, which was an increase of
$11.5 million from $633.5 million as of December 31, 2007. During
this same time period, deposits grew $26.7 million to
$533.8 million. The bank realized year-to-date earnings of
$2.3 million for an improvement of $322 thousand, or 16.5%, from
one year ago.
* Cedar Rapids Bank & Trust, which opened in 2001, had total assets
of $411.2 million at March 31, 2008, which was an increase of
$27.3 million from December 31, 2007. At March 31, 2008, Cedar
Rapids Bank & Trust had net loans of $300.4 million for an increase
of $14.3 million from the end of 2007, while deposits of
$279.9 million reflected an increase of $20.9 million for the
quarter. The bank realized year-to-date earnings of $642 thousand
for an improvement of approximately $104 thousand, or 19.3%, from
one year ago.
* Rockford Bank & Trust, which opened in 2005, had total assets of
$171.7 million at March 31, 2008, which was an increase of
$13.9 million, or 8.8%, from December 31, 2007. At March 31, 2008,
Rockford Bank & Trust had net loans of $140.2 million and deposits
of $128.8 million, which represented increases from
December 31, 2007 of 8.9% and 7.1%, respectively. The bank
realized year-to-date after-tax net losses for 2008 in the amount
of $46 thousand, which was a reduction of $193 thousand from the
losses of $239 thousand for the same period in 2007. Rockford Bank
& Trust made significant progress in reaching break-even during
2007 and has continued this into the first quarter of 2008, as the
bank had positive net income for the month of March after provision
and taxes.
* First Wisconsin Bank & Trust, which began operations in 2006, had
total assets of $76.9 million at March 31, 2008, which was an
increase of $6.2 million from December 31, 2007. At March 31,
2008, First Wisconsin Bank & Trust had net loans of $54.7 million,
which was an increase of $5.7 million from the end of 2007, while
deposits of $47.8 million reflected a slight increase over the
December 31, 2007 amount of $46 million. After-tax net losses for
the first quarter of 2008 were $1.1 million, which was a
significant increase from the $277 thousand after-tax net loss for
the same period in 2007. The primary reason for this increase in
net losses was the significant increase in provision for loan/lease
losses related to the charge-off of a single commercial loan.
"We are very disappointed that the increased provision expense in the first quarter more than offset continued solid progress on improved net interest margin and overall improvements in core earnings," noted Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer. "Earnings before provision and taxes increased from $3.0 million for the fourth quarter of 2007 to $3.2 million for the first quarter of 2008, and increased by more than $900 thousand compared to the first quarter of 2007. While the increased provision expense in the first quarter was a setback, we continue to make steady progress on our plan to convert our investments in additional people, facilities and markets over the past several years into long-term improvements in earnings per share."
Nonperforming assets at March 31, 2008 were $11.7 million, which was an increase of $4.2 million from $7.5 million at December 31, 2007, and represented 0.77% of total assets as compared to 0.51% of total assets at December 31, 2007. The majority of this increase consisted of three unrelated commercial credits. Management believes that these loans are well collateralized and as a result, the Company has not provided significant specific reserves for these relationships. Maintaining credit quality remains a strong focus and management regularly monitors the Company's loan/lease portfolio and the level of allowance for loan/lease losses. We do not have any material direct exposure to sub-prime loan products as our residential real estate lending has been focused on secondary market conforming loan products to residential borrowers. Due to the current uncertainty regarding the national economy, management increased the qualitative factors applied to all loans within the subsidiary banks' reserve adequacy calcul ations. As a result, the Company's allowance for loan/lease losses to total loans/leases increased to 1.16% at March 31, 2008 from 1.09% at December 31, 2007.
QCR Holdings, Inc., headquartered in Moline, Illinois, is a multi-bank holding company, which serves the Quad City, Cedar Rapids, Rockford and Milwaukee communities through its wholly owned subsidiary banks. Quad City Bank and Trust Company, which is based in Bettendorf, Iowa and commenced operations in 1994, Cedar Rapids Bank and Trust Company, which is based in Cedar Rapids, Iowa and commenced operations in 2001, Rockford Bank and Trust Company, which is based in Rockford, Illinois and commenced operations in 2005, and First Wisconsin Bank & Trust, which is based in Brookfield, Wisconsin and began operations in 2007, provide full-service commercial and consumer banking and trust and asset management services. The Company also engages in credit card processing through its wholly owned subsidiary, Quad City Bancard, Inc., based in Moline, Illinois and commercial leasing through its 80% 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; (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 loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of our strategy to establish denovo banks in new markets; (x) unexpecte d outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
-----------------------------------
March 31, December 31, March 31,
2008 2007 2007
----------- ----------- -----------
(dollars in thousands,
except share data)
SELECTED BALANCE SHEET DATA
Total assets $1,527,205 $1,476,564 $1,303,823
Securities $ 250,498 $ 235,905 $ 180,007
Total loans/leases $1,151,070 $1,106,900 $ 990,865
Allowance for estimated
loan/lease losses $ 13,320 $ 12,024 $ 11,075
Total deposits $ 988,577 $ 929,427 $ 877,839
Total stockholders' equity $ 88,282 $ 86,066 $ 72,367
Common stockholders' equity $ 68,131 $ 65,908 $ 59,493
Common shares outstanding 4,603,849 4,597,744 4,565,158
Book value per common share $ 14.80 $ 14.33 $ 13.03
Closing stock price $ 14.90 $ 14.25 $ 15.46
Market capitalization $ 68,597 $ 65,518 $ 70,577
Market price/book value 100.68% 99.41% 118.63%
Full time equivalent employees 357 350 330
Tier 1 leverage capital ratio 7.44% 7.40% 7.06%
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
-----------------------------------
March 31, December 31, March 31,
2008 2007 2007
----------- ----------- -----------
(dollars in thousands)
ANALYSIS OF LOAN DATA
Nonaccrual loans/leases $ 10,543 $ 6,488 $ 6,663
Accruing loans/leases past
due 90 days or more 444 500 793
Other real estate owned 716 496 80
----------- ----------- -----------
Total nonperforming assets $ 11,703 $ 7,484 $ 7,536
Net charge-offs / (recoveries)
(calendar year-to-date) $ 976 $ 1,452 $ (56)
Loan/lease mix:
Commercial loans $ 905,562 $ 867,666 $ 769,864
Direct financing leases 70,186 68,732 59,231
Real estate loans 80,747 84,337 85,744
Installment and other
consumer loans 94,575 86,165 76,026
----------- ----------- -----------
Total loans/leases $1,151,070 $1,106,900 $ 990,865
ANALYSIS OF DEPOSIT DATA
Deposit mix:
Noninterest-bearing $ 134,693 $ 165,286 $ 121,723
Interest-bearing 853,884 764,141 756,116
----------- ----------- -----------
Total deposits $ 988,577 $ 929,427 $ 877,839
Interest-bearing deposit mix:
Nonmaturity deposits $ 404,569 $ 347,385 $ 344,159
Certificates of deposit 400,638 363,195 348,329
Brokered certificates of deposit 48,677 53,561 63,628
----------- ----------- -----------
Total interest-bearing deposits $ 853,884 $ 764,141 $ 756,116
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended
-----------------------------------
March 31, December 31, March 31,
2008 2007 2007
----------- ----------- -----------
(dollars in thousands,
except per share data)
SELECTED INCOME STATEMENT DATA
Interest income $ 22,335 $ 22,635 $ 19,942
Interest expense 11,733 12,725 11,608
----------- ----------- -----------
Net interest income 10,602 9,910 8,334
Provision for loan/lease losses 2,272 596 406
----------- ----------- -----------
Net interest income after
provision for loan/lease losses 8,330 9,314 7,928
Noninterest income 3,761 3,508 3,128
Noninterest expense 11,172 10,371 9,201
----------- ----------- -----------
Income before taxes 919 2,451 1,855
Minority interest in income of
consolidated subsidiary 140 137 91
Income tax expense 93 704 501
----------- ----------- -----------
Net income $ 686 $ 1,610 $ 1,263
Preferred stock dividends 446 268 268
----------- ----------- -----------
Net income available to
common stockholders $ 240 $ 1,342 $ 995
Earnings per common
share (basic) $ 0.05 $ 0.29 $ 0.22
Earnings per common
share (diluted) $ 0.05 $ 0.29 $ 0.22
Earnings per common share
(basic) LTM * $ 0.86 $ 1.03 $ 0.61
AVERAGE BALANCES
Assets $1,495,265 $1,426,079 $1,286,150
Deposits $ 942,066 $ 919,614 $ 865,603
Loans/leases $1,123,330 $1,067,103 $ 975,044
Total stockholders' equity $ 87,113 $ 79,782 $ 71,734
Common stockholders' equity $ 66,961 $ 66,592 $ 58,856
KEY RATIOS
Return on average
assets (annualized) 0.18% 0.45% 0.39%
Return on average common
equity (annualized) 4.10% 9.67% 8.58%
Price earnings ratio LTM * 17.33 x 13.83 x 25.34 x
Net interest margin (TEY) 3.13% 3.07% 2.87%
Nonperforming assets /
total assets 0.77% 0.51% 0.58%
Net charge-offs /
average loans/leases 0.09% 0.14% -0.01%
Allowance / total loans/leases 1.16% 1.09% 1.12%
Efficiency ratio 77.78% 77.29% 80.28%
* LTM: Last twelve months
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended
-----------------------------------
March 31, December 31, March 31,
2008 2007 2007
----------- ----------- -----------
(dollars in thousands,
except share data)
ANALYSIS OF NONINTEREST INCOME
Merchant credit card fees,
net of processing costs $ 487 $ 483 $ 382
Trust department fees 970 959 919
Deposit service fees 755 749 579
Gain on sales of loans, net 340 254 275
Securities gains (losses), net -- -- --
Gains on sale of foreclosed assets -- -- 2
Gains on sale of other assets -- -- --
Earnings on cash surrender value
of life insurance 295 231 204
Investment advisory and
management fees 415 442 376
Other 499 390 391
----------- ----------- -----------
Total noninterest income $ 3,761 $ 3,508 $ 3,128
ANALYSIS OF NONINTEREST EXPENSE
Salaries and employee benefits $ 6,966 $ 6,460 $ 5,555
Professional and data
processing fees 1,257 1,095 928
Advertising and marketing 320 412 238
Occupancy and equipment expense 1,350 1,285 1,219
Stationery and supplies 143 160 155
Postage and telephone 272 251 254
Bank service charges 138 151 141
FDIC and Other Insurance 332 313 166
(Gains) losses on disposal
of fixed assets -- (16) 239
Other 394 260 306
----------- ----------- -----------
Total noninterest expenses $ 11,172 $ 10,371 $ 9,201
WEIGHTED AVERAGE SHARES
Common shares outstanding (a) 4,602,166 4,596,788 4,564,664
Incremental shares from
assumed conversion:
Options and Employee Stock
Purchase Plan 7,677 11,239 25,202
----------- ----------- -----------
Adjusted weighted
average shares (b) 4,609,843 4,608,027 4,589,866
(a)Denominator for Basic Earnings Per Share
(b)Denominator for Diluted Earnings Per Share
CONTACT: QCR Holdings, Inc.
Todd A. Gipple, Executive Vice President
Chief Financial Officer
(309) 743-7745
