EXHIBIT 99.1
QCR Holdings, Inc. Announces Earnings for Second Quarter of 2009
MOLINE, Ill., July 24, 2009 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced a net loss attributable to QCR Holdings, Inc. of $820 thousand for the quarter ended June 30, 2009, or diluted earnings per share for common shareholders of ($0.42). Earnings for the second quarter of 2009 were significantly impacted by additional loan/lease loss provisions and the FDIC Special Assessment. By comparison, for the quarter ended March 31, 2009, the Company reported net income attributable to QCR Holdings, Inc. of $84 thousand, or diluted earnings per share of ($0.13). For the second quarter of 2008, the Company reported net income attributable to QCR Holdings, Inc. of $1.8 million, or diluted earnings per share of $0.29. For the six months ended June 30, 2009, the Company reported a net loss attributable to QCR Holdings, Inc. of $736 thousand compared to net income attributable to QCR Holdings, Inc. of $2.5 million for the same period in 2008.
For the quarter ended June 30, 2009, the Company recognized a net loss from continuing operations attributable to QCR Holdings, Inc. of $759 thousand as compared to net income from continuing operations attributable to QCR Holdings, Inc. of $2.1 million for the quarter ended June 30, 2008. For this same period, diluted earnings per share from continuing operations attributable to QCR Holdings, Inc. decreased from $0.34 to ($0.42). This reduction was due to significant increases in provision for loan/lease losses of $3.5 million and FDIC Assessments of $1.2 million. Partially offsetting these increased expenses was an increase in net interest income of $1.0 million, or 9%, from $11.2 million for the quarter ending June 30, 2008 to $12.2 million for the quarter ending June 30, 2009.
"The impact of the economic recession on our local markets has lagged the national markets in terms of timing and strength; however, we have certainly felt the impact on our Company over the past three quarters," stated Douglas M. Hultquist, President and Chief Executive Officer. "Specifically, we continue to experience some degradation of specific commercial credits within our loan portfolio, which, coupled with our heightened awareness of the recession's impact on our local economies and overall loan and lease portfolio, has led to increased provisions. Our continued conservative approach to the valuation of loans has negatively impacted our consolidated earnings in the short-term; however, we are pleased that our two mature bank charters, Quad City Bank & Trust and Cedar Rapids Bank & Trust, have remained profitable every quarter during these difficult economic times."
Mr. Hultquist added, "While we are displeased with the consolidated bottom-line results, we were able to maintain strong levels of net interest income and noninterest income considering the economic environment. Net interest income for the six months ended June 30, 2009 totaled $24.2 million, which is an increase of $2.9 million, or nearly 14%, from $21.3 million for the six months ended June 30, 2008. Our ability to effectively manage our cost of funds in this environment has been critical to this success. Noninterest income held steady at $6.9 million for the first six months of 2009 compared to $7.1 million for the first six months of 2008. The increases in deposit service fees and gains on sale of residential real estate loans effectively offset the decline in trust and investment advisory fees which are largely based on the value of the investments within the trust or portfolio. These achievements are direct results of our talented team of bankers and our strong focus on client relationships."
During the second quarter of 2009, the Company's total assets increased 1%, or by $20.0 million, to $1.70 billion from $1.68 billion at March 31, 2009. Loans/leases grew by $19.9 million, or 2%, from $1.21 billion at March 31, 2009 to $1.23 billion at June 30, 2009. The Company experienced a decline in deposits totaling $57.6 million from $1.09 billion at March 31, 2009 to $1.03 billion at June 30, 2009, resulting from a short-term fluctuation in the level of deposits right at quarter end for a few significant customers at the subsidiary banks. Short-term and other borrowings totaled $488.4 million as of June 30, 2009, which was an increase of $43.6 million, or 10%, from $444.8 million as of March 31, 2009. The subsidiary banks executed a balance sheet strategy to reduce long-term interest rate risk in a potential rising interest rate environment which resulted in an increase in long-term other borrowings of $65.0 million.
"The Company and all three subsidiary banks continue to be well capitalized as of June 30, 2009, and we have very strong access to liquidity," stated Todd A. Gipple, Executive Vice President, Chief Operating Officer, and Chief Financial Officer. "Given the current economic climate, we continue to focus on maintaining our strong capital and liquidity positions."
Mr. Gipple added, "As previously reported in the first quarter, we received funding in the amount of $38.2 million under the Treasury Capital Purchase Program. Consistent with the intent of the Program, the additional capital has enhanced our capacity to support the communities we serve through additional lending opportunities. Despite weakened loan/lease demand created by the economic recession, we originated $186.1 million of new loans to both new and existing customers during the first two quarters of 2009. Of this, we funded $71.6 million in new mortgages and other consumer loans to our individual clients, and $114.5 million in new business loans and leases to our commercial clients. Continuing this effort to grow our loan/lease portfolio and support our communities without sacrificing our asset quality is our most significant challenge today."
Nonperforming assets at June 30, 2009 were $33.7 million, which was an increase of $6.0 million from $27.7 million at March 31, 2009, resulting in an increase in the level of nonperforming assets at the end of the second quarter to 1.98% of total assets, as compared to 1.65% of total assets at March 31, 2009. The large majority of the nonperforming assets are loans that have been placed on nonaccrual status. Management has thoroughly reviewed these loans and has provided specific reserves as appropriate. The Company's allowance for loan/lease losses to total loans/leases increased to 1.84% at June 30, 2009 from 1.76% at March 31, 2009, and from 1.17% at June 30, 2008. Furthermore, the Company's provision for loan/lease losses totaled $4.9 million for the second quarter of 2009, which was an increase of $517 thousand from $4.4 million for the first quarter of 2009, and an increase of $3.5 million from $1.4 million for the second quarter of 2008.
"We are disappointed with the level of nonperforming assets and related provision expense and take little consolation that these levels are less than many of our peers," stated Mr. Gipple. "Maintaining asset quality has always been, and continues to be, a top priority for the Company. As such, we have allocated significant resources, including additions to staff, over the past two quarters in an effort to aggressively manage the quality of the loan portfolio. Although we experienced significant growth in the level of nonperforming assets during the second quarter, management believes the velocity of growth in nonperforming assets is slowing."
Results for the second quarter of 2009 for the Company's primary subsidiaries were as follows:
* Quad City Bank & Trust, the Company's first subsidiary bank, had total consolidated assets of $953.5 million at June 30, 2009, which was a slight decrease of $800 thousand from $954.3 million at March 31, 2009. At June 30, 2009, Quad City Bank & Trust had net loans/leases of $631.4 million, which was an increase of $6.3 million, or 1%, from $625.1 million as of March 31, 2009. During this same period, deposits decreased $71.3 million, or 11%, to $551.9 million as the bank experienced a short-term fluctuation in the level of deposits of a few significant customers at the end of the quarter. Quad City Bank & Trust's short-term and other borrowings increased $69.0 million, or 28%, from $245.9 million at March 31, 2009 to $314.9 million at June 30, 2009. During the quarter, the bank executed a balance sheet strategy to reduce long- term interest rate risk in a potential rising interest rate environment, which resulted in an increase in long-term other borrowings of $40.0 million. Quad City Bank & Trust realized year- to-date earnings of $2.5 million for the six months ended June 30, 2009, which is a decrease of $2.1 million from $4.6 million for the six months ended June 30, 2008. * Cedar Rapids Bank & Trust, which opened in 2001, had total assets of $503.6 million at June 30, 2009, which was an increase of $11.3 million, or 2%, from $492.3 million at March 31, 2009. At June 30, 2009, Cedar Rapids Bank & Trust had net loans of $378.6 million, which was an increase of $11.7 million, or 3%, from March 31, 2009, while deposits of $305.7 million reflected a decrease of $11.2 million, or 4%, for the quarter. The bank experienced a short-term fluctuation in the level of deposits of a few significant customers at the end of the quarter. Short-term and other borrowings were $149.6 million as of June 30, 2009, which was an increase of $18.1 million, or 14%, from $131.5 million as of March 31, 2009. During the quarter, the bank executed a balance sheet strategy to reduce long-term interest rate risk in a potential rising interest rate environment, which resulted in an increase in long-term other borrowings of $20.0 million. The bank realized year-to-date earnings of $883 thousand for the six months ended June 30, 2009, which is a decrease of approximately $717 thousand from $1.6 million from one year ago. * Rockford Bank & Trust, which opened in 2005, had total assets of $255.5 million at June 30, 2009, which was an increase of $21.0 million, or 9%, from March 31, 2009. At June 30, 2009, Rockford Bank & Trust had net loans of $195.7 million which was a slight increase from $195.3 million as of March 31, 2009. The bank's deposits totaled $198.6 million at June 30, 2009 which represented solid deposit growth of $14.5 million, or nearly 8%. The bank realized after-tax net losses for the six months ended June 30, 2009 in the amount of $1.3 million, as compared to an $88 thousand net loss for the same period in 2008.
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company which serves the Quad City, Cedar Rapids, and Rockford 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; and Rockford Bank and Trust Company, which is based in Rockford, Illinois and commenced operations in 2005, provide full-service commercial and consumer banking and trust and asset management services. The Company also engages in 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 ---------------------------------------------- June 30, March 31, Dec. 31, June 30, 2009 2009 2008 2008 ---------- ---------- ---------- ---------- (dollars in thousands, except share data) SELECTED BALANCE SHEET DATA * Total assets $1,700,857 $1,680,910 $1,605,629 $1,583,762 Securities $ 321,461 $ 280,294 $ 256,076 $ 230,522 Total loans/leases $1,225,850 $1,205,979 $1,214,690 $1,131,875 Allowance for estimated loan/lease losses $ 22,495 $ 21,173 $ 17,809 $ 13,259 Assets related to discontinued operations, held for sale $ -- $ -- $ -- $ 89,741 Total deposits $1,029,036 $1,086,588 $1,058,959 $ 910,557 Liabilities related to discontinued operations, held for sale $ -- $ -- $ -- $ 80,320 Total stockholders' equity $ 127,180 $ 129,794 $ 92,495 $ 86,547 Common stockholders' equity $ 66,934 $ 69,676 $ 70,485 $ 66,396 Common shares outstanding 4,541,895 4,531,366 4,509,637 4,619,916 Book value per common share $ 14.74 $ 15.38 $ 15.63 $ 14.37 Closing stock price $ 10.00 $ 8.04 $ 10.00 $ 12.51 Market capitalization $ 45,419 $ 36,432 $ 45,096 $ 57,795 Market price/book value 67.86% 52.29% 63.98% 87.05% Full time equivalent employees 350 344 345 340 Tier 1 leverage capital ratio 9.04% 9.81% 7.10% 6.99% * First Wisconsin Bank & Trust was sold on December 31, 2008 and is reported as discontinued operations for all periods reported. Immediately prior to the sale, First Wisconsin Bank & Trust had total assets of $122.9 million, gross loans of $80.2 million, deposits of $98.0 million, and 24 full-time equivalent employees. These amounts and the accompanying 2008 income statement results have been removed from all financial schedules. As of ---------------------------------------------- June 30, March 31, Dec. 31, June 30, 2009 2009 2008 2008 ---------- ---------- ---------- ---------- (dollars in thousands) ANALYSIS OF LOAN DATA * Nonaccrual loans/leases $ 27,830 $ 22,919 $ 19,711 $ 9,093 Accruing loans/leases past due 90 days or more 2,321 838 222 526 Other real estate owned 3,505 3,933 3,857 2,005 ---------- ---------- ---------- ---------- Total nonperforming assets $ 33,656 $ 27,690 $ 23,790 $ 11,624 Net charge-offs (calendar year-to-date) $ 4,344 $ 995 $ 2,728 $ 414 Loan/lease mix: Commercial loans $ 448,575 $ 431,361 $ 439,117 $ 406,186 Commercial real estate loans 529,029 531,191 526,668 496,043 Direct financing leases 86,420 83,737 79,408 68,276 Residential real estate loans 72,574 71,612 79,229 79,125 Installment and other consumer loans 87,372 86,231 88,541 80,704 Deferred loan/lease origination costs, net of fees 1,880 1,847 1,727 1,541 ---------- ---------- ---------- ---------- Total loans/leases $1,225,850 $1,205,979 $1,214,690 $1,131,875 ANALYSIS OF DEPOSIT DATA * Deposit mix: Noninterest-bearing $ 155,551 $ 144,833 $ 161,126 $ 143,293 Interest-bearing 873,485 941,755 897,833 767,264 ---------- ---------- ---------- ---------- Total deposits $1,029,036 $1,086,588 $1,058,959 $ 910,557 Interest-bearing deposit mix: Nonmaturity deposits $ 363,828 $ 398,709 $ 387,746 $ 366,093 Certificates of deposit 419,869 436,677 386,097 338,173 Brokered certificates of deposit 89,788 106,369 123,990 62,998 ---------- ---------- ---------- ---------- Total interest-bearing deposits $ 873,485 $ 941,755 $ 897,833 $ 767,264 * First Wisconsin Bank & Trust was sold on December 31, 2008 and is reported as discontinued operations for all periods reported For the Quarter For the Six Months Ended Ended -------------------------------- --------------------- June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 ---------- ---------- ---------- ---------- ---------- (dollars in thousands, except per share data) SELECTED INCOME STATEMENT DATA * Interest income $ 21,222 $ 20,986 $ 21,001 $ 42,208 $ 42,262 Interest expense 9,017 9,026 9,809 18,043 20,934 ---------- ---------- ---------- ---------- ---------- Net interest income 12,205 11,960 11,192 24,165 21,328 Provision for loan/lease losses 4,876 4,359 1,355 9,234 2,339 ---------- ---------- ---------- ---------- ---------- Net interest income after provision for loan/lease losses 7,329 7,601 9,837 14,931 18,989 Noninterest income 3,503 3,439 3,654 6,941 7,068 Noninterest expense 12,422 11,098 10,488 23,521 20,556 ---------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations before taxes (1,590) (58) 3,003 (1,649) 5,501 Income tax expense (benefit) from continuing operations (831) (293) 873 (1,125) 1,541 ---------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations $ (759)$ 235 $ 2,130 $ (524)$ 3,960 Discontinued operations: Operating income from merchant credit card acquiring business -- -- 149 -- 242 Operating loss from First Wisconsin Bank & Trust -- -- (537) -- (2,208) ---------- ---------- ---------- ---------- ---------- Income (loss) from discontinued operations before taxes -- -- (388) -- (1,966) Income tax expense (benefit) from discontinued operations -- -- (159) -- (734) ---------- ---------- ---------- ---------- ---------- Income (loss) from discontinued operations $ -- $ -- $ (229)$ -- $ (1,232) Net income (loss) $ (759)$ 235 $ 1,901 $ (524)$ 2,728 Less: Net income attributable to noncontrolling interests 61 151 129 212 269 ---------- ---------- ---------- ---------- ---------- Net income (loss) attributable to QCR Holdings, Inc. $ (820)$ 84 $ 1,772 $ (736)$ 2,459 Amounts attributable to QCR Holdings, Inc.: Income (loss) from continuing operations $ (820)$ 84 $ 2,001 $ (736)$ 3,691 Income (loss) from discontinued operations -- -- (229) -- (1,232) ---------- ---------- ---------- ---------- ---------- Net income (loss) $ (820)$ 84 $ 1,772 $ (736)$ 2,459 Preferred stock dividends 1,085 695 446 1,781 892 ---------- ---------- ---------- ---------- ---------- Net income (loss) attributable to QCR Holdings, Inc. common stockholders $ (1,905)$ (611)$ 1,326 $ (2,517)$ 1,567 Earnings (loss) per share from continuing operations attributable to QCR Holdings, Inc.: Basic $ (0.42)$ (0.14)$ 0.34 $ (0.56)$ 0.61 Diluted $ (0.42)$ (0.13)$ 0.34 $ (0.56)$ 0.60 Earnings (loss) per share from discontinued operations attributable to QCR Holdings, Inc.: Basic $ -- $ -- $ (0.05)$ -- $ (0.27) Diluted $ -- $ -- $ (0.05)$ -- $ (0.27) Earnings (loss) per share attributable to QCR Holdings, Inc.: Basic $ (0.42)$ (0.14)$ 0.29 $ (0.56)$ 0.34 Diluted $ (0.42)$ (0.13)$ 0.29 $ (0.56)$ 0.34 Earnings per common share (basic) attributable to QCR Holdings, Inc. LTM ** $ (0.15)$ 0.56 $ 0.92 AVERAGE BALANCES * Assets $1,732,200 $1,635,966 $1,543,936 $1,684,083 $1,519,600 Deposits $1,104,205 $1,079,065 $ 909,823 $1,091,635 $ 925,944 Loans/leases $1,220,175 $1,212,058 $1,104,472 $1,216,117 $1,113,900 Total stockholders' equity $ 129,235 $ 111,746 $ 86,587 $ 120,491 $ 87,720 Common stockholders' equity $ 68,972 $ 70,636 $ 64,615 $ 70,008 $ 63,788 KEY RATIOS * Return on average assets (annualized) -0.19% 0.02% 0.46% -0.09% 0.32% Return on average common equity (annualized)*** -11.05% -3.46% 8.21% -7.19% 4.91% Price earnings ratio LTM ** (68.00)x 14.36x 13.60x (68.00)x 13.60x Net interest margin (TEY) 3.04% 3.19% 3.37% 3.11% 3.18% Nonperforming assets / total assets 1.98% 1.65% 0.73% 1.98% 0.73% Net charge- offs / average loans/leases 0.27% 0.08% 0.07% 0.36% 0.04% Allowance / total loans/ leases 1.84% 1.76% 1.17% 1.84% 1.17% Efficiency ratio 79.08% 72.07% 70.65% 75.62% 72.39% * First Wisconsin Bank & Trust was sold on December 31, 2008 and is reported as discontinued operations for all periods reported ** LTM: Last twelve months *** The numerator for this ratio is "Net income (loss) attributable to QCR Holdings, Inc. common stockholders" For the Quarter For the Six Months Ended Ended -------------------------------- --------------------- June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 ---------- ---------- ---------- ---------- ---------- (dollars in thousands, except share data) ANALYSIS OF NONINTEREST INCOME * Credit card fees, net of processing costs $ 293 $ 246 $ 243 $ 539 $ 506 Trust department fees 701 718 847 1,419 1,769 Deposit service fees 788 827 787 1,615 1,504 Gain on sales of loans, net 673 412 323 1,085 662 Gains (losses) on sales of securities (192) (14) -- (206) -- Gains on sale of foreclosed assets 187 -- 5 187 5 Earnings on cash surrender value of life insurance 322 291 279 613 546 Investment advisory and management fees 351 351 671 702 1,086 Other 380 608 499 987 990 ---------- ---------- ---------- ---------- ---------- Total noninterest income $ 3,503 $ 3,439 $ 3,654 $ 6,941 $ 7,068 ANALYSIS OF NONINTEREST EXPENSE * Salaries and employee benefits $ 7,081 $ 6,765 $ 6,581 $ 13,846 $ 12,834 Professional and data processing fees 1,203 1,153 1,136 2,356 2,267 Advertising and marketing 207 246 340 453 595 Occupancy and equipment expense 1,273 1,321 1,205 2,594 2,464 Stationery and supplies 147 131 132 278 253 Postage and telephone 291 228 223 519 472 Bank service charges 114 122 140 237 271 FDIC and other insurance 1,471 619 315 2,090 633 Other 635 513 416 1,148 767 ---------- ---------- ---------- ---------- ---------- Total noninterest expenses $ 12,422 $ 11,098 $ 10,488 $ 23,521 $ 20,556 WEIGHTED AVERAGE SHARES Common shares outstanding(a) 4,540,854 4,523,851 4,611,751 4,532,353 4,606,959 Incremental shares from assumed conversion: Options and Employee Stock Purchase Plan 9,427 8,754 22,954 9,091 35,670 ---------- ---------- ---------- ---------- ---------- Adjusted weighted average shares(b) 4,550,281 4,532,605 4,634,705 4,541,444 4,642,629 * First Wisconsin Bank & Trust was sold on December 31, 2008 and is reported as discontinued operations for all periods reported (a) Denominator for Basic Earnings Per Share (b) Denominator for Diluted Earnings Per Share ROLLFORWARD OF LENDING ACTIVITY FOR THE SIX MONTHS ENDING JUNE 30, 2009 (dollars in thousands) BALANCE AS OF DECEMBER 31, 2008: CONSOLIDATED ----------------------------------------------- ----------------- Commercial loans 439,117 Commercial real estate loans 526,668 Direct financing leases 79,408 Real estate loans - residential mortgage $ 79,229 Installment and other consumer loans 88,541 ----------------- 1,212,963 Plus deferred loan/lease origination costs, net of fees 1,727 ----------------- TOTAL GROSS LOANS/LEASES $ 1,214,690 ORIGINATION OF NEW LOANS: ----------------------------------------------- Commercial loans 53,843 Commercial real estate loans 41,748 Direct financing leases 18,888 Real estate loans - residential mortgage 61,200 Installment and other consumer loans 10,455 ----------------- $ 186,134 PAYMENTS/MATURITIES, NET OF ADVANCES OR RENEWALS ON EXISTING LOANS: ----------------------------------------------- Commercial loans (44,385) Commercial real estate loans (39,387) Direct financing leases (11,876) Real estate loans - residential mortgage (67,855) Installment and other consumer loans (11,624) ----------------- $ (175,127) BALANCE AS OF JUNE 30, 2009: ----------------------------------------------- Commercial loans 448,575 Commercial real estate loans 529,029 Direct financing leases 86,420 Real estate loans - residential mortgage 72,574 Installment and other consumer loans 87,372 ----------------- 1,223,970 Plus deferred loan/lease origination costs, net of fees 1,880 ----------------- TOTAL GROSS LOANS/LEASES $ 1,225,850 =================
CONTACT: QCR Holdings, Inc. Todd A. Gipple, Executive Vice President, Chief Operating Officer, Chief Financial Officer (309) 743-7745