EXHIBIT 99.1
MOLINE, Ill., Jan. 30, 2012 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced net income attributable to QCR Holdings, Inc. ("net income") of $2.7 million for the quarter ended December 31, 2011, or diluted earnings per common share of $0.35 after preferred stock dividends of $1.0 million. By comparison, for the quarter ended September 30, 2011, the Company reported net income of $2.2 million, or diluted loss per common share of ($0.01) after preferred stock dividends of $2.2 million, which included $1.2 million of accelerated discount accretion on the repurchased Treasury Capital Purchase Program ("TCPP") preferred shares. For the fourth quarter of 2010, the Company reported net income of $1.5 million, or diluted earnings per common share of $0.11 after preferred stock dividends of $1.0 million.
Annual Earnings Up 47% from Prior Year
For the year ended December 31, 2011, the Company reported net income of $9.7 million, or diluted earnings per common share of $0.92 after preferred stock dividends of $5.3 million. As mentioned above, these dividends included $1.2 million of accelerated discount accretion on the repurchased TCPP preferred shares. For the same period in 2010, the Company reported net income of $6.6 million, or diluted earnings per share of $0.53 after preferred stock dividends of $4.1 million.
"We are pleased with our record earnings for the fourth quarter and the year," stated Douglas M. Hultquist, President and Chief Executive Officer. "Excluding the impact of the accelerated discount accretion on the repurchased TCPP preferred shares, a one time event, our earnings per share on a diluted basis would be approximately $1.18 for the year. These results are commendable considering the challenging economic and regulatory backdrop facing our industry today. Our talented teams of bankers continue to focus on retention and growth of clients based on relationships and this has translated over to our bottom-line. Execution of our relationship-based model, improving efficiency ratios, and continued improvement in asset quality will continue to be a key focus for our Company."
Net Interest Income Grew 9% in 2011
The Company's net interest income for the current quarter totaled $14.2 million, which is an increase of 2% over the prior quarter, and an increase of 15% over the fourth quarter of 2010. For the year ended December 31, 2011, the Company's net interest income was $54.1 million, which is an increase of $4.3 million, or 9%, over the same period of 2010. Net interest margin was 3.08% for the year ended December 31, 2011, which compares favorably to a net interest margin of 2.92% for the same period of 2010.
Mr. Hultquist added, "We are pleased with our growth in net interest income and net interest margin during the fourth quarter and over the course of the year. Considering we continue to operate in an environment of historically low interest rates and a flattening yield curve, these results show solid improvement. Continued weak loan demand has led to declines in interest income levels over the year, but this trend has recently reversed with some modest loan growth over the second half of 2011. Additionally, we continue to have success in growing deposits at reduced pricing which has helped to continue the shift in our funding mix from higher cost wholesale funds to lower cost deposits. As a result, interest expense is down 22% year over year, and our cost of funds fell from 2.08% in 2010 to 1.65% for 2011."
Nonperforming Assets Flat During Fourth Quarter and Down 19% Year Over Year
Nonperforming assets at December 31, 2011 were $40.5 million, flat compared to the prior quarter, and down $9.5 million, or 19%, from December 31, 2010. With growth in total assets of 4% during the quarter, the ratio of nonperforming assets-to-total assets declined to 2.06% at December 31, 2011 from 2.13% at September 30, 2011. For additional comparison, nonperforming assets were 2.73% of total assets at December 31, 2010. Historically, the large majority of the Company's nonperforming assets have consisted of nonaccrual loans/leases and other real estate owned. During the fourth quarter, there was a significant shift in the mix of nonperforming assets with nonaccrual loans/leases declining $10.0 million, or 35%, and accruing troubled debt restructurings ("TDRs") increasing $9.2 million.
Provision for loan/lease losses totaled $1.4 million for the fourth quarter of 2011, a decrease of $1.0 million over the prior quarter, and a decrease of $1.6 million from the fourth quarter of 2010. With net charge-offs totaling $2.2 million partially offset by provision for loan/lease losses of $1.4 million, the Company's allowance for loan/lease losses to total loans/leases declined to 1.56% at December 31, 2011, from 1.63% at September 30, 2011, and from 1.74% at December 31, 2010.
"Although our nonperforming assets remain flat, the shift in mix from nonaccrual loans to accruing TDRs is favorable as the latter are performing on the restructured terms and accruing interest income," stated Mr. Hultquist. "In general, our loan quality continues to improve as evidenced by the trend in our criticized loans which declined 15% during the fourth quarter and 26% from the end of 2010. Our levels of provision declined during the quarter and the year as a result of the impact of these improving trends in loan quality which offset the impact of our net loan growth. Loan and asset quality continues to be a top priority."
During the fourth quarter of 2011, the Company's total assets increased $67.7 million, or 4%. The Company continued to grow its securities portfolio with an increase of $39.3 million, or 7%. The Company's liquid assets (cash, federal funds sold, and deposits at other financial institutions) increased $24.8 million, or 33%, as on balance sheet liquidity remains strong. Lastly, the Company grew loans/leases by $3.2 million. This asset growth was funded primarily by increases in federal funds purchased ($61.6 million) and customer repurchase agreements ($8.4 million). The large increase in federal funds purchased was temporary and the result of short-term fluctuation in noninterest-bearing correspondent deposit balances for several customers over the end of the year.
"Although the net loan/lease growth during the fourth quarter was modest, it does mark three consecutive quarters of net loan/lease growth which is favorable as we continue to face a challenging economic and competitive landscape for lending," stated Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer.
"As of December 31, 2011, the Company reported its qualified small business lending in accordance with SBLF guidelines and calculated a net decline from the baseline of $67.5 million, or 16%," Mr. Gipple continued. "As a result of the net decline position, the dividend rate on the SBLF preferred stock remains at 5%. The decline is primarily a function of the residual impact of the economic downturn on our communities over the recent years; specifically, loan demand weakened whereby originations were outpaced by payments and maturities. Many of our small business clients are not currently utilizing their revolving lines of credit and as a result, our line utilization is at historically low levels. Although we've experienced a net decline in qualified small business lending over the baseline, it is important to note that at year-end we had $57.0 million of qualifying small business loans that were originated in 2010 and 2011 and where a majority portion is guaranteed by the government, typically SBA or USDA. The government guaranteed portion totaled $47.1 million, some of which management determined to sell at a premium, and is not eligible per SBLF guidelines; however, it is still strong evidence that we are continuing to support the lending needs of the small businesses in our markets. Despite the net decline thus far, we are well positioned to continue to support small businesses and intend to grow small business loans without sacrificing our high standards for quality."
Noninterest-Bearing Deposits Grew 29% during 2011
Mr. Gipple added, "Despite the temporary decline of certain correspondent bank deposits over the end of the year, we continue to grow our noninterest-bearing deposits. Specifically, our noninterest-bearing deposits have grown $80.4 million, or 29%, during 2011, and $30.5 million, or 9%, in the fourth quarter. Overall, we continue to focus on growing core deposits and reducing our reliance on brokered and other time deposits as well as wholesale funding. The latter tend to be higher cost of funds and our successful execution of this shift in mix in 2011 has translated to a reduction in cost of funds and interest expense."
Capital Levels Remain Very Strong
As of December 31, 2011, the Company and subsidiary banks continued to maintain capital at levels well above the minimum requirements administered by the federal regulatory agencies. "Although we continue to focus on maintaining our strong total capital position," stated Mr. Gipple, "we do understand the importance of the mix of capital. While we remain strongly committed to self-generating the capital necessary to fully redeem the SBLF capital, without a dilutive common equity raise, our current level of preferred capital does provide financial leverage that is contributing to very strong growth in earnings per share for our common shareholders."
Financial highlights for the Company's primary subsidiaries were as follows:
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 & Trust Company, which is based in Bettendorf, Iowa, and commenced operations in 1994, Cedar Rapids Bank & Trust Company, which is based in Cedar Rapids, Iowa, and commenced operations in 2001, and Rockford Bank & Trust Company, which is based in Rockford, Illinois, and commenced operations in 2005, provide full-service commercial and consumer banking and trust and 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, including the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations to be issued thereunder; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected outcomes of existing or new litigation involving the Company; and (x) 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 | |||
| December 31, | September 30, | December 31, | |
| 2011 | 2011 | 2010 | |
| (dollars in thousands, except share data) | |||
| SELECTED BALANCE SHEET DATA | |||
| Total assets | $ 1,966,610 | $ 1,898,960 | $ 1,836,635 |
| Securities | $ 565,229 | $ 525,912 | $ 424,847 |
| Total loans/leases | $ 1,200,745 | $ 1,197,582 | $ 1,172,539 |
| Allowance for estimated loan/lease losses | $ 18,789 | $ 19,578 | $ 20,365 |
| Total deposits | $ 1,205,458 | $ 1,207,469 | $ 1,114,816 |
| Total borrowings | $ 590,603 | $ 524,551 | $ 566,060 |
| Total stockholders' equity | $ 144,433 | $ 143,169 | $ 132,571 |
| Common stockholders' equity * | $ 81,047 | $ 77,529 | $ 70,357 |
| Common shares outstanding | 4,758,189 | 4,747,234 | 4,611,182 |
| Book value per common share | $ 17.03 | $ 16.33 | $ 15.26 |
| Closing stock price | $ 9.10 | $ 8.77 | $ 7.14 |
| Market capitalization | $ 43,300 | $ 41,633 | $ 32,924 |
| Market price/book value | 53.43% | 53.70% | 46.80% |
| Full time equivalent employees | 355 | 358 | 350 |
| Total risk-based capital ratio | 13.70% ** | 14.01% | 13.70% |
| Tier 1 risk-based capital ratio | 12.11% ** | 12.42% | 12.12% |
| Tier 1 leverage capital ratio | 8.70% ** | 8.88% | 8.71% |
| * Includes noncontrolling interests and accumulated other comprehensive income | |||
| **Subject to change upon final calculation for regulatory filings due after earnings release | |||
| QCR HOLDINGS, INC. | |||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||
| (Unaudited) | |||
| As of | |||
| December 31, | September 30, | December 31, | |
| 2011 | 2011 | 2010 | |
| (dollars in thousands) | |||
| ANALYSIS OF LOAN DATA | |||
| Nonaccrual loans/leases | $ 18,995 | $ 29,006 | $ 37,427 |
| Accruing loans/leases past due 90 days or more | 1,111 | 333 | 320 |
| Troubled debt restructures - accruing | 11,904 | 2,675 | 3,405 |
| Other real estate owned | 8,386 | 8,288 | 8,535 |
| Other repossessed assets | 109 | 160 | 366 |
| Total nonperforming assets | $ 40,505 | $ 40,462 | $ 50,053 |
| Net charge-offs (calendar year-to-date) | $ 8,192 | $ 5,983 | $ 9,604 |
| Loan/lease mix: | |||
| Commercial and industrial loans | $ 350,794 | $ 363,998 | $ 365,625 |
| Commercial real estate loans | 577,804 | 568,487 | 553,717 |
| Direct financing leases | 93,212 | 88,893 | 83,010 |
| Residential real estate loans | 98,107 | 94,073 | 82,197 |
| Installment and other consumer loans | 78,223 | 79,893 | 86,240 |
| Deferred loan/lease origination costs, net of fees | 2,605 | 2,238 | 1,750 |
| Total loans/leases | $ 1,200,745 | $ 1,197,582 | $ 1,172,539 |
| ANALYSIS OF SECURITIES DATA | |||
| Securities mix: | |||
| U.S. government sponsored agency securities | $ 428,955 | $ 414,784 | $ 402,225 |
| U.S. government sponsored residential mortgage-backed securities | 108,854 | 83,452 | 70 |
| Municipal securities | 25,689 | 25,991 | 20,603 |
| Other securities, including held-to-maturity | 1,731 | 1,685 | 1,949 |
| Total securities | $ 565,229 | $ 525,912 | $ 424,847 |
| ANALYSIS OF DEPOSIT DATA | |||
| Deposit mix: | |||
| Noninterest-bearing | $ 357,184 | $ 326,710 | $ 276,827 |
| Interest-bearing | 848,274 | 880,759 | 837,989 |
| Total deposits | $ 1,205,458 | $ 1,207,469 | $ 1,114,816 |
| Interest-bearing deposit mix: | |||
| Nonmaturity deposits | $ 510,237 | $ 528,552 | $ 459,978 |
| Certificates of deposit | 293,126 | 304,674 | 312,656 |
| Brokered certificates of deposit | 44,911 | 47,533 | 65,355 |
| Total interest-bearing deposits | $ 848,274 | $ 880,759 | $ 837,989 |
| ANALYSIS OF BORROWINGS DATA | |||
| Borrowings mix: | |||
| FHLB advances | $ 204,750 | $ 204,750 | $ 238,750 |
| Wholesale structured repurchase agreements | 130,000 | 135,000 | 135,000 |
| Customer repurchase agreements | 110,236 | 101,886 | 118,905 |
| Federal funds purchased | 103,300 | 41,700 | 22,250 |
| Junior subordinated debentures | 36,085 | 36,085 | 36,085 |
| Other | 6,232 | 5,130 | 15,070 |
| Total borrowings | $ 590,603 | $ 524,551 | $ 566,060 |
| 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, | |
| 2011 | 2011 | 2010 | 2011 | 2010 | |
| (dollars in thousands, except per share data) | |||||
| SELECTED INCOME STATEMENT DATA | |||||
| Interest income | $ 19,640 | $ 19,570 | $ 19,522 | $ 77,723 | $ 80,097 |
| Interest expense | 5,484 | 5,741 | 7,173 | 23,578 | 30,233 |
| Net interest income | 14,156 | 13,829 | 12,349 | 54,145 | 49,864 |
| Provision for loan/lease losses | 1,419 | 2,457 | 3,050 | 6,616 | 7,464 |
| Net interest income after provision for loan/lease losses | 12,737 | 11,372 | 9,299 | 47,529 | 42,400 |
| Noninterest income | 3,896 | 4,335 | 4,678 | 17,462 | 15,406 |
| Noninterest expense | 12,651 | 12,773 | 11,759 | 50,993 | 48,549 |
| Net income before taxes | 3,982 | 2,934 | 2,218 | 13,998 | 9,257 |
| Income tax expense | 1,123 | 667 | 549 | 3,868 | 2,449 |
| Net income | $ 2,859 | $ 2,267 | $ 1,669 | $ 10,130 | $ 6,808 |
| Less: Net income attributable to noncontrolling interests | 130 | 104 | 126 | 438 | 221 |
| Net income attributable to QCR Holdings, Inc. | $ 2,729 | $ 2,163 | $ 1,543 | $ 9,692 | $ 6,587 |
| Less: Preferred stock dividends **** | 1,028 | 2,188 | 1,029 | 5,284 | 4,128 |
| Net income (loss) attributable to QCR Holdings, Inc. common stockholders | $ 1,701 | $ (25) | $ 514 | $ 4,408 | $ 2,459 |
| Earnings (loss) per share attributable to QCR Holdings, Inc.: | |||||
| Basic | $ 0.36 | $ (0.01) | $ 0.11 | $ 0.93 | $ 0.54 |
| Diluted *** | $ 0.35 | $ (0.01) | $ 0.11 | $ 0.92 | $ 0.53 |
| Earnings per common share (basic) attributable to QCR Holdings, Inc. LTM * | $ 0.93 | $ 0.68 | $ 0.54 | ||
| AVERAGE BALANCES | |||||
| Assets | $ 1,949,690 | $ 1,904,348 | $ 1,861,827 | $ 1,907,038 | $ 1,839,316 |
| Loans/leases | $ 1,196,827 | $ 1,190,313 | $ 1,119,739 | $ 1,177,705 | $ 1,122,466 |
| Deposits | $ 1,248,249 | $ 1,212,112 | $ 1,184,925 | $ 1,209,787 | $ 1,209,587 |
| Total stockholders' equity | $ 141,955 | $ 139,004 | $ 133,573 | $ 136,700 | $ 131,066 |
| Common stockholders' equity | $ 79,288 | $ 77,529 | $ 71,890 | $ 75,702 | $ 68,687 |
| KEY RATIOS | |||||
| Return on average assets (annualized) | 0.56% | 0.45% | 0.33% | 0.51% | 0.36% |
| Return on average common equity (annualized) ** | 8.58% | -0.13% | 2.86% | 5.82% | 3.58% |
| Price earnings ratio LTM * | 9.78 x | 12.90 x | 13.22 x | 9.78 x | 13.22 x |
| Net interest margin (TEY) | 3.18% | 3.16% | 2.87% | 3.08% | 2.92% |
| Nonperforming assets / total assets | 2.06% | 2.13% | 2.73% | 2.06% | 2.73% |
| Net charge-offs / average loans/leases | 0.18% | 0.23% | 0.22% | 0.70% | 0.79% |
| Allowance / total loans/leases | 1.56% | 1.63% | 1.74% | 1.56% | 1.74% |
| Efficiency ratio | 70.08% | 70.32% | 69.06% | 71.21% | 74.38% |
| * LTM: Last twelve months | |||||
| ** The numerator for this ratio is "Net income attributable to QCR Holdings, Inc. common stockholders" | |||||
| *** In accordance with U.S. GAAP, the common equivalent shares are not considered in the calculation of diluted earnings per share if the numerator is a net loss. | |||||
| **** For the quarter ended September 30, 2011 and the year ended December 31, 2011, includes $1.2 million of accelerated accretion of discount on the TCPP preferred shares repurchased during third quarter of 2011. | |||||
| 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, | |
| 2011 | 2011 | 2010 | 2011 | 2010 | |
| (dollars in thousands, except share data) | |||||
| ANALYSIS OF NONINTEREST INCOME | |||||
| Trust department fees | $ 761 | $ 762 | $ 852 | $ 3,369 | $ 3,291 |
| Investment advisory and management fees | 478 | 549 | 487 | 2,109 | 1,813 |
| Deposit service fees | 870 | 894 | 893 | 3,493 | 3,479 |
| Gain on sales of loans, net | 642 | 408 | 1,338 | 2,565 | 3,170 |
| Securities gains | -- | 444 | -- | 1,472 | -- |
| Gains (losses) on sales of other real estate owned, net | (284) | 42 | (202) | (375) | (835) |
| Earnings on cash surrender value of life insurance | 413 | 331 | 357 | 1,446 | 1,331 |
| Credit card fees, net of processing costs | 103 | 179 | 28 | 501 | 259 |
| Other | 913 | 726 | 925 | 2,882 | 2,898 |
| Total noninterest income | $ 3,896 | $ 4,335 | $ 4,678 | $ 17,462 | $ 15,406 |
| ANALYSIS OF NONINTEREST EXPENSE | |||||
| Salaries and employee benefits | $ 7,884 | $ 7,652 | $ 6,974 | $ 30,365 | $ 27,843 |
| Occupancy and equipment expense | 1,281 | 1,360 | 1,325 | 5,298 | 5,472 |
| Professional and data processing fees | 1,122 | 1,077 | 1,145 | 4,461 | 4,525 |
| FDIC and other insurance | 549 | 579 | 953 | 2,698 | 3,528 |
| Loan/lease expense | 388 | 840 | (1) | 2,161 | 1,658 |
| Advertising and marketing | 452 | 277 | 352 | 1,289 | 1,054 |
| Postage and telephone | 234 | 242 | 254 | 937 | 1,004 |
| Stationery and supplies | 136 | 123 | 112 | 517 | 491 |
| Bank service charges | 201 | 186 | 136 | 726 | 420 |
| Prepayment fees on Federal Home Loan Bank advances | -- | -- | -- | 832 | -- |
| Other-than-temporary impairment losses on securities | -- | -- | -- | 119 | 114 |
| Losses on lease residual values | -- | -- | -- | -- | 617 |
| Other | 404 | 437 | 509 | 1,590 | 1,823 |
| Total noninterest expense | $ 12,651 | $ 12,773 | $ 11,759 | $ 50,993 | $ 48,549 |
| WEIGHTED AVERAGE SHARES | |||||
| Common shares outstanding (a) | 4,755,471 | 4,866,692 | 4,608,733 | 4,724,781 | 4,593,096 |
| Incremental shares from assumed conversion: | |||||
| Options and Employee Stock Purchase Plan | 100,825 | 117,914 | 12,926 | 64,245 | 25,146 |
| Adjusted weighted average shares (b) | 4,856,296 | 4,984,606 | 4,621,659 | 4,789,026 | 4,618,242 |
| (a) Denominator for Basic Earnings Per Share. | |||||
| (b) Denominator for Diluted Earnings Per Share. | |||||
CONTACT: Todd A. Gipple
Executive Vice President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745