EXHIBIT 99.1
QCR Holdings, Inc. Announces Improved Earnings for Third Quarter of 2009
MOLINE, Ill., Oct. 26, 2009 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced net income attributable to QCR Holdings, Inc. ("net income") of $1.6 million for the quarter ended September 30, 2009, or diluted earnings per share for common shareholders of $0.12. By comparison, for the quarter ended June 30, 2009, the Company reported a net loss attributable to QCR Holdings, Inc. of $820 thousand, or diluted earnings per share of ($0.42). For the third quarter of 2008, the Company reported net income of $4.3 million, or diluted earnings per share of $0.83. For the nine months ended September 30, 2009, the Company reported net income of $853 thousand compared to net income of $6.8 million for the same period in 2008. As previously reported, in September 2008 a subsidiary of the Company sold its merchant credit card acquiring business resulting in a gain on sale, net of taxes and related expenses, of approximately $3.0 million.
For the quarter ended September 30, 2009, the Company recognized net income from continuing operations attributable to QCR Holdings, Inc. of $1.6 million, or diluted earnings per share of $0.12, as compared to net income from continuing operations attributable to QCR Holdings, Inc. of $1.7 million, or diluted earnings per share of $0.25, for the quarter ended September 30, 2008. The Company's net interest income for the current quarter totaled $13.8 million which is an increase of $2.1 million, or nearly 18%, from $11.7 million for the same period of 2008. Of this increase, $1.3 million was attributable to the recognition of interest income for cash interest payments previously received on a commercial loan which had been deferred pending the resolution of a contingency which was resolved this quarter. Additionally, the Company recognized gains on securities sold of $719 thousand. More than offsetting these items, the Company continued to provide reserves at significant levels for its loan/lease portfolio wi th $3.5 million of provision expense for the third quarter of 2009. Further, during the third quarter of 2009, the Company continued to incur significant expenses for FDIC insurance and experienced an increase in legal and other expenses incurred in connection with carrying high levels of nonperforming assets.
"We are pleased to report continued improvement in net interest income and non-interest income," stated Douglas M. Hultquist, President and Chief Executive Officer. "Excluding the impact of the one-time interest income adjustment, we've seen increases in net interest income levels year-over-year and quarter-over-quarter. Achieving this result within the current interest rate environment is a testament to our talented team of bankers who continue to focus on building new and enhancing existing client relationships. Our non-interest income has also experienced solid growth in the current quarter and year. Some of this success was a result of gains on sale of four bonds in the third quarter. Although this is not a customary practice of our Company, we felt the sale was advantageous considering the market position of the specific securities."
Nonperforming assets at September 30, 2009 were $31.9 million, which was a decrease of $3.3 million, or 10%, from $35.3 million at June 30, 2009, resulting in a decrease in the level of nonperforming assets at the end of the third quarter to 1.82% of total assets, as compared to 2.07% of total assets at June 30, 2009. The large majority of the Company's remaining 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 experienced a slight decrease from 1.84% at June 30, 2009 to 1.82% at September 30, 2009. Furthermore, the Company's provision for loan/lease losses totaled $3.5 million for the third quarter of 2009 which was a decrease of $1.4 million from $4.9 million for the second quarter of 2009, and an increase of $1.3 million from $2.2 million for the third quarter of 2008.
Mr. Hultquist added, "Although the overall level of nonperforming assets remains elevated, we are pleased with the decrease in the third quarter. The 10% reduction of nonperforming assets from the end of the second quarter was the net result of charging off portions of a few nonperforming assets, improvements in performance of some existing nonperforming assets, and the recent slowing of new nonperforming assets. Maintaining asset quality has always been, and continues to be, a top priority for the Company."
During the third quarter of 2009, the Company's total assets increased 3%, or by $48.5 million, to $1.75 billion from $1.70 billion at June 30, 2009. Loans/leases grew by $15.9 million, or 1%, from $1.23 billion at June 30, 2009 to $1.24 billion at September 30, 2009. The remaining asset growth occurred within the Company's securities portfolio. The Company experienced an increase in deposits totaling $67.7 million, or 7%, from $1.03 billion at June 30, 2009 to $1.10 billion at September 30, 2009. As a result of this increase in deposits, short-term and other borrowings decreased $21.2 million, or 4%, from $488.4 million as of June 30, 2009 to $467.2 million as of September 30, 2009.
"The Company and all three subsidiary banks continue to be well capitalized as of September 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 and regulatory climate, we continue to focus on maintaining our strong capital and liquidity positions. As a result, we have increased the total risk-based capital ratio to more than 12% at all three of our subsidiary banks. This level of capital is more than 200 basis points and 20% greater than the level of capital required to be "well-capitalized" by the Federal Reserve. Our Company has a long history of focusing on regulatory matters and on maintaining our strong regulatory status, and we are pleased that this approach has resulted in positive regulatory relationships for our Company during this period of intense regulation and oversight."
Mr. Gipple added, "As previously reported, we received funding in the amount of $38.2 million under the Treasury Capital Purchase Program in the first quarter of 2009. 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 $280.2 million of new loans to both new and existing customers during the first three quarters of 2009. Of this, we funded $97.1 million in new mortgages and other consumer loans to our individual clients, and $183.1 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 one of our most significant challenges today."
Results for the third quarter of 2009 for the Company's primary subsidiaries were as follows:
* Quad City Bank & Trust, the Company's first subsidiary bank which opened in 1994, had total consolidated assets of $976.4 million at September 30, 2009, which was an increase of $22.9 million, or 2%, from $953.5 million at June 30, 2009. At September 30, 2009, Quad City Bank & Trust had net loans/leases of $635.4 million, which was an increase of $4.0 million, or 1%, from $631.4 million as of June 30, 2009. The remaining asset growth occurred within the bank's securities portfolio. During this same period, deposits increased $45.5 million, or 8%, to $597.4 million. As a result of this increase in deposits, Quad City Bank & Trust's short-term and other borrowings decreased $38.0 million, or 12%, from $314.9 million at June 30, 2009 to $276.9 million at September 30, 2009. Quad City Bank & Trust realized year-to-date earnings of $5.2 million for the nine months ended September 30, 2009 which was a decrease of $1.3 million from $6.5 million for the nine months ended September 30, 2008. * Cedar Rapids Bank & Trust, which opened in 2001, had total assets of $525.5 million at September 30, 2009, which was an increase of $21.9 million, or 4%, from $503.6 million at June 30, 2009. At September 30, 2009, Cedar Rapids Bank & Trust had net loans of $383.6 million, which was an increase of $5.0 million, or 1%, from June 30, 2009. The remaining asset growth occurred within the bank's securities portfolio. Deposits of $318.9 million reflected an increase of $13.2 million, or 4%, for the quarter. Short-term and other borrowings were $152.8 million as of September 30, 2009, which was a slight increase of $3.2 million, or 2%, from $149.6 million as of June 30, 2009. The bank realized year-to-date earnings of $1.4 million for the nine months ended September 30, 2009 which was a decrease of approximately $1.0 million from $2.4 million from one year ago. * Rockford Bank & Trust, which opened in 2005, had total assets of $252.0 million at September 30, 2009, which was a slight decrease of $3.5 million, or 1%, from June 30, 2009. At September 30, 2009, Rockford Bank & Trust had net loans of $202.4 million which was an increase of $6.7 million, or 3%, from $195.7 million as of June 30, 2009. The bank's deposits totaled $188.9 million at September 30, 2009 which represented a decline of $9.7 million, or 5%. The bank realized after-tax net losses for the nine months ended September 30, 2009 in the amount of $1.9 million, as compared to a $146 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. Quad City Bank & Trust 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 de novo banks in new markets; (x) unexpect ed 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 ---------------------------------------------- Sept. 30, June 30, Dec. 31, Sept. 30, 2009 2009 2008 2008 ---------- ---------- ---------- ---------- (dollars in thousands, except share data) SELECTED BALANCE SHEET DATA * Total assets $1,749,304 $1,700,857 $1,605,629 $1,641,416 Securities $ 345,875 $ 321,461 $ 256,076 $ 231,973 Total loans/leases $1,241,738 $1,225,850 $1,214,690 $1,177,748 Allowance for estimated loan/lease losses $ 22,640 $ 22,495 $ 17,809 $ 14,496 Assets related to discontinued operations, held for sale $ -- $ -- $ -- $ 106,332 Total deposits $1,096,768 $1,029,036 $1,058,959 $ 980,400 Liabilities related to discontinued operations, held for sale $ -- $ -- $ -- $ 94,789 Total stockholders' equity $ 128,492 $ 127,180 $ 92,495 $ 89,438 Common stockholders' equity $ 68,349 $ 66,934 $ 70,485 $ 69,286 Common shares outstanding 4,546,990 4,541,895 4,509,637 4,625,088 Book value per common share $ 15.03 $ 14.74 $ 15.63 $ 14.98 Closing stock price $ 10.20 $ 10.00 $ 10.00 $ 13.30 Market capitalization $ 46,379 $ 45,419 $ 45,096 $ 61,514 Market price/book value 67.86% 67.86% 63.98% 88.78% Full time equivalent employees 343 350 345 373 Tier 1 leverage capital ratio 9.00% 9.04% 7.10% 7.08% * 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 amount and the accompanying 2008 income statement results have been removed from all financial schedules. QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) As of ---------------------------------------------- Sept. 30, June 30, Dec. 31, Sept. 30, 2009 2009 2008 2008 ---------- ---------- ---------- ---------- (dollars in thousands) ANALYSIS OF LOAN DATA * Nonaccrual loans/ leases ** $ 25,400 $ 29,420 $ 20,828 $ 9,443 Accruing loans/leases past due 90 days or more 1,503 2,321 222 2,218 Other real estate owned 4,994 3,505 3,857 2,215 ---------- ---------- ---------- ---------- Total nonperforming assets $ 31,897 $ 35,246 $ 24,907 $ 13,876 Net charge-offs (calendar year-to-date$ 7,836 $ 4,344 $ 2,728 $ 1,313 Loan/lease mix: Commercial loans $ 445,096 $ 448,575 $ 439,117 $ 473,778 Commercial real estate loans 551,027 529,029 526,668 465,002 Direct financing leases 88,189 86,420 79,408 72,910 Residential real estate loans 69,578 72,574 79,229 78,875 Installment and other consumer loans 85,844 87,372 88,541 85,523 Deferred loan/lease origination costs, net of fees 2,004 1,880 1,727 1,660 ---------- ---------- ---------- ---------- Total loans/leases $1,241,738 $1,225,850 $1,214,690 $1,177,748 ANALYSIS OF DEPOSIT DATA * Deposit mix: Noninterest-bearing $ 189,387 $ 155,551 $ 161,126 $ 143,071 Interest-bearing 907,381 873,485 897,833 837,329 ---------- ---------- ---------- ---------- Total deposits $1,096,768 $1,029,036 $1,058,959 $ 980,400 Interest-bearing deposit mix: Nonmaturity deposits $ 432,843 $ 363,828 $ 387,746 $ 331,009 Certificates of deposit 400,742 419,869 386,097 404,773 Brokered certificates of deposit 73,796 89,788 123,990 101,547 ---------- ---------- ---------- ---------- Total interest-bearing deposits $ 907,381 $ 873,485 $ 897,833 $ 837,329 * First Wisconsin Bank & Trust was sold on December 31, 2008 and is reported as discontinued operations for all periods reported ** Includes the government guaranteed portion for any nonaccrual loans that have a guarantee. QCRH previously reported nonaccrual loans/leases excluding the government guaranteed portion. With this report, QCRH adjusted the amounts in the prior periods presented to reflect a consistent comparison. The adjustments did not have a significant impact on other reporting. QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) For the Quarter For the Nine Months Ended Ended -------------------------------- --------------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2009 2009 2008 2009 2008 ---------- ---------- ---------- ---------- ---------- (dollars in thousands, except per share data) SELECTED INCOME STATEMENT DATA * Interest income $ 22,526 $ 21,222 $ 21,541 $ 64,734 $ 63,803 Interest expense 8,701 9,017 9,800 26,744 30,733 ---------- ---------- ---------- ---------- ---------- Net interest income 13,825 12,205 11,741 37,990 33,070 Provision for loan/lease losses 3,527 4,876 2,154 12,761 4,494 ---------- ---------- ---------- ---------- ---------- Net interest income after provision for loan/lease losses 10,298 7,329 9,587 25,229 28,576 Noninterest income 4,163 3,503 3,311 11,105 10,379 Noninterest expense 12,273 12,422 10,576 35,794 31,133 ---------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations before taxes 2,188 (1,590) 2,322 540 7,822 Income tax expense (benefit) from continuing operations 563 (831) 613 (561) 2,154 ---------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations $ 1,625 $ (759)$ 1,709 $ 1,101 $ 5,668 Discontinued operations: Gain on sale of merchant credit card acquiring business -- -- 4,645 -- 4,645 Operating income from merchant credit card acquiring business -- -- 119 -- 361 Operating loss from First Wisconsin Bank & Trust -- -- (582) -- (2,790) ---------- ---------- ---------- ---------- ---------- Income (loss) from discontinued operations before taxes -- -- 4,182 -- 2,216 Income tax expense (benefit) from discontinued operations -- -- 1,492 -- 758 ---------- ---------- ---------- ---------- ---------- Income (loss) from discontinued operations $ -- $ -- $ 2,690 $ -- $ 1,458 Net income (loss) $ 1,625 $ (759)$ 4,399 $ 1,101 $ 7,126 Less: Net income attributable to noncontrol- ling interests 36 61 94 248 362 ---------- ---------- ---------- ---------- ---------- Net income (loss) attribu- table to QCR Holdings, Inc. $ 1,589 $ (820)$ 4,305 $ 853 $ 6,764 Amounts attributable to QCR Holdings, Inc.: Income (loss) from continuing operations $ 1,589 $ (820)$ 1,615 $ 853 $ 5,306 Income (loss) from discontinued operations -- -- 2,690 -- 1,458 ---------- ---------- ---------- ---------- ---------- Net income (loss) $ 1,589 $ (820)$ 4,305 $ 853 $ 6,764 Preferred stock dividends 1,031 1,085 446 2,812 1,338 ---------- ---------- ---------- ---------- ---------- Net income (loss) attributable to QCR Holdings, Inc. common stockholders $ 558 $ (1,905)$ 3,859 $ (1,959)$ 5,426 Earnings (loss) per share from continuing operations attributable to QCR Holdings, Inc.: Basic $ 0.12 $ (0.42)$ 0.25 $ (0.43)$ 0.86 Diluted $ 0.12 $ (0.42)$ 0.25 $ (0.43)$ 0.85 Earnings (loss) per share from discontinued operations attributable to QCR Holdings, Inc.: Basic $ -- $ -- $ 0.58 $ -- $ 0.32 Diluted $ -- $ -- $ 0.58 $ -- $ 0.31 Earnings (loss) per share attributable to QCR Holdings, Inc.: Basic $ 0.12 $ (0.42)$ 0.83 $ (0.43)$ 1.18 Diluted $ 0.12 $ (0.42)$ 0.83 $ (0.43)$ 1.17 Earnings per common share (basic) attributable to QCR Holdings, Inc. LTM ** $ (0.86)$ (0.15)$ 1.47 AVERAGE BALANCES * Assets $1,746,904 $1,732,200 $1,600,218 $1,705,024 $1,546,473 Deposits $1,102,388 $1,104,205 $ 926,420 $1,095,220 $ 909,848 Loans/leases $1,228,744 $1,220,175 $1,143,273 $1,220,326 $1,105,698 Total stockholders' equity $ 127,834 $ 129,235 $ 88,904 $ 122,939 $ 86,928 Common stockholders' equity $ 67,728 $ 68,972 $ 68,752 $ 69,201 $ 66,776 KEY RATIOS * Return on average assets (annualized) 0.36% -0.19% 1.08% 0.07% 0.58% Return on average common equity (annualized)*** 3.30% -11.05% 22.45% -3.77% 10.83% Price earnings ratio LTM ** (11.84)x (68.00)x 9.07 x (11.84)x 9.07 x Net interest margin (TEY) 3.40% 3.04% 3.44% 3.21% 3.32% Nonperforming assets / total assets 1.82% 2.07% 0.85% 1.82% 0.85% Net charge- offs / average loans/leases 0.28% 0.27% 0.06% 0.64% 0.12% Allowance / total loans/ leases 1.82% 1.84% 1.24% 1.82% 1.24% Efficiency ratio 68.23% 79.08% 70.27% 72.91% 71.65% * 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" QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) For the Quarter For the Nine Months Ended Ended -------------------------------- -------------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2009 2009 2008 2009 2008 ---------- ---------- ---------- --------- --------- (dollars in thousands, except share data) ANALYSIS OF NONINTEREST INCOME * Credit card fees, net of processing costs $ 267 $ 293 $ 229 $ 806 $ 735 Trust department fees 720 701 781 2,139 2,550 Deposit service fees 843 788 816 2,459 2,320 Gain on sales of loans, net 289 673 200 1,374 863 Gains (losses) on sales of securities 719 (192) -- 513 -- Gains on sale of foreclosed assets 34 187 61 220 66 Earnings on cash surrender value of life insurance 316 322 241 930 787 Investment advisory and management fees 374 351 481 1,076 1,566 Other 601 380 502 1,588 1,492 ---------- ---------- ---------- --------- ---------- Total noninterest income $ 4,163 $ 3,503 $ 3,311 $ 11,105 $ 10,379 ANALYSIS OF NONINTEREST EXPENSE * Salaries and employee benefits $ 6,617 $ 7,081 $ 6,467 $ 20,463 $ 19,301 Professional and data processing fees 1,183 1,203 1,143 3,539 3,410 Advertising and marketing 251 207 386 704 981 Occupancy and equipment expense 1,369 1,273 1,326 3,963 3,791 Stationery and supplies 131 147 117 409 370 Postage and telephone 268 291 223 787 695 Bank service charges 129 114 160 366 431 FDIC and other insurance 1,235 1,471 338 3,325 971 Other 1,090 635 416 2,238 1,183 ---------- ---------- ---------- --------- ---------- Total noninterest expenses $ 12,273 $ 12,422 $ 10,576 $ 35,794 $ 31,133 WEIGHTED AVERAGE SHARES Common shares outstanding (a) 4,546,270 4,540,854 4,624,056 4,536,992 4,612,658 Incremental shares from assumed conversion: Options and Employee Stock Purchase Plan 11,032 9,427 22,443 9,738 32,074 ---------- ---------- ---------- --------- --------- Adjusted weighted average shares (b) 4,557,302 4,550,281 4,646,499 4,546,730 4,644,732 * 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 NINE MONTHS ENDING SEPTEMBER 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 80,433 Commercial real estate loans 75,117 Direct financing leases 27,515 Real estate loans - residential mortgage 82,907 Installment and other consumer loans 14,188 ----------- $ 280,160 PAYMENTS/MATURITIES, NET OF ADVANCES OR RENEWALS ON EXISTING LOANS: ------------------------------------------- Commercial loans (74,454) Commercial real estate loans (50,758) Direct financing leases (18,734) Real estate loans - residential mortgage (92,558) Installment and other consumer loans (16,885) ----------- $ (253,389) BALANCE AS OF SEPTEMBER 30, 2009: ------------------------------------------- Commercial loans 445,096 Commercial real estate loans 551,027 Direct financing leases 88,189 Real estate loans - residential mortgage 69,578 Installment and other consumer loans 85,844 ----------- 1,239,734 Plus deferred loan/lease origination costs, net of fees 2,004 ----------- TOTAL GROSS LOANS/LEASES $ 1,241,738 ===========
CONTACT: QCR Holdings, Inc. Todd A. Gipple, Executive Vice President, Chief Operating Officer, Chief Financial Officer (309) 743-7745