EXHIBIT 99.1
QCR Holdings, Inc. Announces Record Earnings of $6.5 Million for the Third Quarter of 2015
MOLINE, Ill., Oct. 20, 2015 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ:QCRH) today announced net income of $6.5 million and diluted earnings per share ("EPS") of $0.55 for the quarter ended September 30, 2015. By comparison, for the quarter ended June 30, 2015, the Company reported a net loss of $524 thousand and diluted EPS of ($0.05). During the second quarter, the Company successfully executed several planned initiatives aimed at improving the long-term profitability of the Company and strengthening its capital base. As a result, financial performance was greatly impacted by several previously announced nonrecurring income and expense items; most prominently the one-time expense related to the prepayment of certain FHLB advances and other wholesale borrowings, which totaled approximately $4.5 million (after-tax). For the third quarter of 2014, the Company reported net income of $4.1 million, and diluted EPS of $0.50. As a result of the redemption of all of the Company's remaining outstanding shares of preferred stock in the second quarter of 2014, none of these periods included preferred stock dividends.
For the nine months ended September 30, 2015, the Company reported net income of $10.1 million and diluted EPS of $1.01. By comparison, for the first nine months ended September 30, 2014, the Company reported net income of $12.0 million, and diluted EPS of $1.35, after preferred stock dividends of $1.1 million. The Company redeemed all of the outstanding shares of preferred stock in the second quarter of 2014.
The Company reported core net income (non-GAAP) for the quarter ending September 30, 2015 of $6.2 million, with diluted core EPS of $0.52. Core net income for the quarter included a $788 thousand (after-tax) gain on the sale of other real estate. While this gain is considered core income, it is non-recurring in nature. Core net income for the quarter excluded after-tax gains on the sale of securities of $37 thousand and after-tax income from the conclusion of a favorable lawsuit of $252 thousand.
For the nine months ended September 30, 2015, the Company reported core net income (non-GAAP) of $14.6 million, with diluted core EPS of $1.45. Core net income year-to-date excludes $5.0 million of after-tax non-recurring expenses, $4.5 million of which related to the previously announced prepayment of FHLB advances and other wholesale borrowings during the second quarter of 2015.
"We are quite pleased with our operating performance in the third quarter," commented Douglas M. Hultquist, President and Chief Executive Officer, "as net interest margin meaningfully increased, organic loan growth was strong, and asset quality metrics showed significant continued improvement. Our core return on average assets ("ROAA") has improved significantly over the past several quarters. Core ROAA was 0.97% for the third quarter. By comparison, core ROAA was 0.71% and 0.66% for the quarters ending June 30, 2015 and September 30, 2014, respectively. We are making strides towards achieving our target ROAA of 1.00%."
Net Interest Margin Expanded 18 Basis Points from Prior Quarter
And 36 Basis Points Compared to Third Quarter of 2014
Net interest income totaled $20.1 million for the quarter ended September 30, 2015. By comparison, net interest income totaled $18.5 million and $17.5 million for the quarters ended June 30, 2015 and September 30, 2014, respectively. Net interest income totaled $56.4 million for the nine months ended September 30, 2015, an increase of nearly 10% compared to the same period of the prior year.
"The planned balance sheet restructuring that we executed in the second quarter of 2015 continues to have a substantial impact on our net interest margin ("NIM") percentage, as our margin expanded 18 basis points from the prior quarter to 3.51% and our cost of interest bearing liabilities declined 14 basis points from the prior quarter to 0.71%," stated Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer. He added, "As the majority of the restructuring activity was executed mid-second quarter, we expected this significant NIM improvement in the third quarter. We were also successful in improving yields on the asset side of the balance sheet, increasing the yield on both the securities portfolio, as well as the loan and lease portfolio. These improvements resulted in a seven basis point increase in asset yield. The continued margin expansion is helping us move closer to our targeted 1.00% ROAA."
Year-to-Date Annualized Loan and Lease Growth of 10.3%
Swap Fee Income Strong Year-to-Date and Gains on the Sale of Government Guaranteed Loans Improve in Third Quarter
During the third quarter of 2015, the Company's total assets increased $32.9 million, or 1%, to a total of $2.58 billion, while total loans and leases grew $40.2 million. The loan and lease growth was funded primarily by deposit growth. Deposits grew $18.6 million, or 1%, during the quarter. Borrowings were flat in the third quarter.
"Loan and lease growth through the third quarter totaled $125.7 million, or 10.3% on an annualized basis," commented Mr. Hultquist. "While net loan growth slowed a bit in the third quarter compared to the second quarter, we are still within our targeted annual organic growth rate of 10-12%. A majority of this growth has been in the commercial and industrial loan category. This segment of our portfolio now accounts for 37% of our total loans and leases. At the same time, we continue to reduce our reliance on commercial real estate loans, with that segment now representing 39% of our portfolio. Additionally, solid loan and lease growth has continued to help us move our loan and lease to total asset ratio upward to 68%, from 67% in the second quarter of 2015 and 64% one year ago. We intend to continue increasing this ratio as we rotate out of securities and into loans and leases, with a goal of growing loans and leases to more than 70% of total assets."
"Swap fee income has been strong this year, totaling $1.2 million through the third quarter," said Mr. Gipple. "The current low interest rate environment has been ideal for the execution of several interest rate swaps on select commercial loans. Additionally, gains on the sale of the government guaranteed portion of loans totaled $760 thousand for the quarter, as this activity accelerated. We plan to continue executing these types of transactions, as they both provide unique solutions for our clients' needs."
Nonperforming Assets Decreased $6.5 Million, or 24%, During the Third Quarter
Nonperforming loans and leases at September 30, 2015 were $12.3 million, a decrease of $2.5 million, or 17%, from June 30, 2015. In addition, the ratio of nonperforming assets ("NPAs") to total assets was 0.80% at September 30, 2015, which was down from 1.07% at June 30, 2015.
"We are very pleased with the continued improvement in our asset quality this quarter. We have been heavily focused on reducing our NPAs to total assets ratio to below 1.00% and were successful in achieving this benchmark during the third quarter, with our actual ratio of 0.80%. The reduction of our NPAs was primarily due to the sale of a large other real estate property during the quarter, as well as a charge-off of a nonaccrual loan that was fully reserved in prior periods," stated Mr. Gipple. "We plan to continue to dispose of our other real estate properties in order to further improve our asset quality ratios. Currently, we have four other real estate properties totaling $7.1 million. Additionally, the Company has two nonaccrual relationships totaling $6.9 million. In total, these six relationships make up $14.0 million, or 68%, of our Company's nonperforming assets. We will concentrate our workout efforts on these six relationships."
The Company's provision for loan/lease losses totaled $1.6 million for the third quarter of 2015, which was down $714 thousand from the prior quarter, and up $572 thousand compared to the third quarter of 2014. The increased provision in the second quarter of 2015 was the result of a $971 thousand increase in a specific allowance allocated to one relationship at Quad City Bank & Trust Company, which was subsequently charged off in the third quarter of 2015.
The Company had net charge-offs of $2.2 million for the third quarter of 2015 which, when coupled with the provision of $1.6 million, decreased the Company's allowance for loan/lease losses ("allowance") to $25.5 million at September 30, 2015. As of September 30, 2015, the Company's allowance to total loans/leases was 1.45%, which was down from 1.52% at June 30, 2015, and flat from 1.45% at September 30, 2014.
The Company's allowance to total nonperforming loans/leases was 207% at September 30, 2015, which was up from 176% at June 30, 2015, and up from 80% at September 30, 2014.
In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through the acquisition of Community National Bank ("CNB") in May 2013 were recorded at market value; therefore, there was no allowance associated with CNB's loans at acquisition. Management continues to evaluate the allowance needed on the acquired CNB loans, factoring in the net remaining discount ($805 thousand at September 30, 2015) originally established upon acquisition.
Capital Levels Remain Strong
The Company's total risk-based capital ratio was 13.08%, the common equity tier 1 ratio was 10.18% and the tangible common equity to tangible common assets ratio increased to 8.42%, all as of September 30, 2015. For comparison, these respective ratios were 10.30%, 7.24% and 5.88% as of March 31, 2015, which was the quarter prior to the capital issuance and debt restructuring previously discussed. Both the total risk-based capital ratio and the common equity tier 1 ratio are well above the fully phased-in requirements under Basel III. The increase in the Company's capital ratios is primarily due to the capital raise executed in the second quarter of 2015, as well as strong earnings in the third quarter.
About Us
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 wealth management services. Quad City Bank & Trust Company also provides correspondent banking services. In addition, Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin. With the acquisition of Community National Bancorporation in 2013, the Company now serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company.
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 Basel III regulatory capital reforms, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations 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 integration of acquired entities; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected 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 | ||||||||
September 30, | June 30, | December 31, | September 30, | |||||
2015 | 2015 | 2014 | 2014 | |||||
(dollars in thousands, except share data) | ||||||||
CONDENSED BALANCE SHEET | Amount | % | Amount | % | Amount | % | ||
Cash, federal funds sold, and interest-bearing deposits | $ 107,659 | 4% | $ 110,233 | 4% | $ 120,350 | 5% | $ 106,718 | 4% |
Securities | 590,775 | 23% | 592,368 | 23% | 651,539 | 26% | 652,785 | 27% |
Net loans/leases | 1,730,138 | 67% | 1,689,238 | 67% | 1,606,929 | 64% | 1,550,101 | 63% |
Core deposit intangible | 1,521 | 0% | 1,571 | 0% | 1,671 | 0% | 1,721 | 0% |
Goodwill | 3,223 | 0% | 3,223 | 0% | 3,223 | 0% | 3,223 | 0% |
Other assets | 142,539 | 6% | 146,336 | 6% | 141,246 | 5% | 136,048 | 6% |
Total assets | $ 2,575,855 | 100% | $ 2,542,969 | 100% | $ 2,524,958 | 100% | $ 2,450,596 | 100% |
Total deposits | $ 1,855,319 | 72% | $ 1,836,767 | 73% | $ 1,679,668 | 67% | $ 1,713,867 | 70% |
Total borrowings | 456,091 | 18% | 456,567 | 18% | 662,558 | 26% | 550,532 | 22% |
Other liabilities | 43,330 | 2% | 37,938 | 1% | 38,653 | 1% | 48,017 | 2% |
Total stockholders' equity | 221,115 | 8% | 211,697 | 8% | 144,079 | 6% | 138,180 | 6% |
Total liabilities and stockholders' equity | $ 2,575,855 | 100% | $ 2,542,969 | 100% | $ 2,524,958 | 100% | $ 2,450,596 | 100% |
SELECTED INFORMATION FOR COMMON STOCKHOLDERS' EQUITY | ||||||||
Common stockholders' equity (1) | $ 221,115 | $ 211,697 | $ 144,079 | $ 138,180 | ||||
Common shares outstanding | 11,728,911 | 11,698,578 | 7,953,197 | 7,936,813 | ||||
Book value per common share (1) | $ 18.85 | $ 18.10 | $ 18.12 | $ 17.41 | ||||
Tangible book value per common share (2) | $ 18.45 | $ 17.69 | $ 17.50 | $ 16.79 | ||||
Closing stock price | $ 21.87 | $ 21.76 | $ 17.86 | $ 17.66 | ||||
Market capitalization | $ 256,511 | $ 254,561 | $ 142,044 | $ 140,164 | ||||
Market price / book value | 116.01% | 120.25% | 98.59% | 101.44% | ||||
Market price / tangible book value | 118.55% | 123.03% | 102.05% | 105.20% | ||||
Tangible common equity / total tangible assets (TCE/TA) (3) | 8.42% | 8.15% | 5.52% | 5.45% | ||||
TCE/TA excluding accumulated other comprehensive income (loss) | 8.47% | 8.21% | 5.60% | 5.64% | ||||
REGULATORY CAPITAL RATIOS: | ||||||||
Total risk-based capital ratio | 13.08% | (4) | 12.92% | 10.91% | 11.10% | |||
Tier 1 risk-based capital ratio | 11.86% | (4) | 11.66% | 9.52% | 9.69% | |||
Tier 1 leverage capital ratio | 9.73% | (4) | 9.62% | 7.62% | 7.53% | |||
Common equity tier 1 ratio | 10.18% | (4) | 9.97% | N/A | N/A | |||
For the quarter ended September 30, | For the nine months ended September 30, | |||||||
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | 2015 | 2014 | 2015 | 2014 | ||||
Beginning balance | $ 211,697 | $ 134,643 | $ 144,079 | $ 147,577 | ||||
Net income | 6,489 | 4,063 | 10,143 | 11,960 | ||||
Other comprehensive income (loss) , net of tax | 2,256 | (812) | 2,098 | 8,895 | ||||
Preferred and common cash dividends declared | -- | -- | (465) | (1,397) | ||||
Proceeds from issuance of 3,680,000 shares of common stock, net of costs | -- | -- | 63,484 | -- | ||||
Redemption of 15,000 shares of Series F Preferred Stock | -- | -- | -- | (15,000) | ||||
Redemption of 14,867 shares of Series F Preferred Stock | -- | -- | -- | (14,824) | ||||
Other (5) | 673 | 286 | 1,776 | 969 | ||||
Ending balance | $ 221,115 | $ 138,180 | $ 221,115 | $ 138,180 | ||||
(1) Includes accumulated other comprehensive income (loss). | ||||||||
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets. | ||||||||
(3) See GAAP to non-GAAP reconciliations. | ||||||||
(4) Subject to change upon final calculation for regulatory filings due after earnings release. | ||||||||
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation. |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||
As of | ||||||||
September 30, | June 30, | December 31, | September 30, | |||||
2015 | 2015 | 2014 | 2014 | |||||
(dollars in thousands) | ||||||||
ANALYSIS OF LOAN DATA | Amount | % | Amount | % | Amount | % | Amount | % |
Loan/lease mix: | ||||||||
Commercial and industrial loans | $ 647,398 | 37% | $ 606,826 | 35% | $ 523,927 | 32% | $ 479,747 | 31% |
Commercial real estate loans | 692,569 | 39% | 696,122 | 41% | 702,140 | 43% | 697,728 | 44% |
Direct financing leases | 173,304 | 10% | 170,799 | 10% | 166,032 | 10% | 162,476 | 10% |
Residential real estate loans | 165,061 | 10% | 161,985 | 10% | 158,633 | 10% | 154,954 | 10% |
Installment and other consumer loans | 69,863 | 4% | 72,448 | 4% | 72,607 | 5% | 71,760 | 5% |
Deferred loan/lease origination costs, net of fees | 7,477 | 0% | 7,204 | 0% | 6,664 | 0% | 6,204 | 0% |
Total loans/leases | $ 1,755,672 | 100% | $ 1,715,384 | 100% | $ 1,630,003 | 100% | $ 1,572,869 | 100% |
Less allowance for estimated losses on loans/leases | 25,534 | 26,146 | 23,074 | 22,768 | ||||
Net loans/leases | $ 1,730,138 | $ 1,689,238 | $ 1,606,929 | $ 1,550,101 | ||||
ANALYSIS OF SECURITIES DATA | ||||||||
Securities mix: | ||||||||
U.S. government sponsored agency securities | $ 247,625 | 42% | $ 256,444 | 43% | $ 307,869 | 47% | $ 306,005 | 47% |
Municipal securities | 265,293 | 45% | 251,992 | 42% | 229,230 | 35% | 216,050 | 33% |
Residential mortgage-backed and related securities | 74,901 | 13% | 80,844 | 14% | 111,423 | 17% | 127,780 | 20% |
Other securities | 2,956 | 0% | 3,088 | 1% | 3,017 | 1% | 2,950 | 0% |
Total securities | $ 590,775 | 100% | $ 592,368 | 100% | $ 651,539 | 100% | $ 652,785 | 100% |
ANALYSIS OF DEPOSIT DATA | ||||||||
Deposit mix: | ||||||||
Noninterest-bearing demand deposits | $ 585,300 | 32% | $ 633,370 | 34% | $ 511,992 | 31% | $ 535,967 | 31% |
Interest-bearing demand deposits | 884,163 | 48% | 785,705 | 43% | 792,052 | 47% | 762,954 | 44% |
Time deposits | 302,978 | 16% | 322,826 | 18% | 306,364 | 18% | 319,105 | 19% |
Brokered time deposits | 82,878 | 4% | 94,866 | 5% | 69,260 | 4% | 95,841 | 6% |
Total deposits | $ 1,855,319 | 100% | $ 1,836,767 | 100% | $ 1,679,668 | 100% | $ 1,713,867 | 100% |
ANALYSIS OF BORROWINGS DATA | ||||||||
Borrowings mix: | ||||||||
FHLB advances | $ 133,000 | 29% | $ 132,500 | 29% | $ 203,500 | 31% | $ 196,500 | 36% |
Wholesale structured repurchase agreements | 115,000 | 25% | 115,000 | 25% | 130,000 | 19% | 130,000 | 24% |
Customer repurchase agreements | 74,404 | 16% | 118,795 | 26% | 137,252 | 21% | 135,697 | 24% |
Federal funds purchased | 93,160 | 21% | 49,780 | 11% | 131,100 | 20% | 26,490 | 5% |
Junior subordinated debentures | 40,527 | 9% | 40,492 | 9% | 40,424 | 6% | 40,390 | 7% |
Other | -- | 0% | -- | 0% | 20,282 | 3% | 21,455 | 4% |
Total borrowings | $ 456,091 | 100% | $ 456,567 | 100% | $ 662,558 | 100% | $ 550,532 | 100% |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||
As of | ||||||||
September 30, | June 30, | December 31, | September 30, | |||||
2015 | 2015 | 2014 | 2014 | |||||
(dollars in thousands) | ||||||||
NONPERFORMING ASSETS | Amount | % | Amount | % | Amount | % | Amount | % |
Nonaccrual loans/leases | $ 11,269 | 55% | $ 13,542 | 50% | $ 18,588 | 56% | $ 26,337 | 67% |
Accruing loans/leases past due 90 days or more | 3 | 0% | 46 | 0% | 93 | 0% | 55 | 0% |
Troubled debt restructures - accruing | 1,040 | 5% | 1,266 | 5% | 1,421 | 5% | 2,129 | 5% |
Total nonperforming loans/leases | 12,312 | 60% | 14,854 | 55% | 20,102 | 61% | 28,521 | 72% |
Other real estate owned | 8,140 | 39% | 11,952 | 44% | 12,768 | 39% | 10,680 | 27% |
Other repossessed assets | 194 | 1% | 297 | 1% | 155 | 0% | 210 | 1% |
Total nonperforming assets | $ 20,646 | 100% | $ 27,103 | 100% | $ 33,025 | 100% | $ 39,411 | 100% |
For the quarter ended September 30, | For the nine months ended September 30, | |||||||
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES | 2015 | 2014 | 2015 | 2014 | ||||
Beginning balance | $ 26,146 | $ 23,067 | $ 23,074 | $ 21,448 | ||||
Provision charged to expense | 1,635 | 1,063 | 5,694 | 3,159 | ||||
Loans/leases charged off | (2,476) | (1,731) | (4,119) | (2,486) | ||||
Recoveries on loans/leases previously charged off | 229 | 369 | 885 | 647 | ||||
Ending balance | $ 25,534 | $ 22,768 | $ 25,534 | $ 22,768 | ||||
Net charge-offs / average loans/leases | 0.13% | 0.09% | 0.19% | 0.12% | ||||
As of | ||||||||
September 30, | June 30, | December 31, | September 30, | |||||
2015 | 2015 | 2014 | 2014 | |||||
ASSET QUALITY RATIOS | ||||||||
Nonperforming assets / total assets | 0.80% | 1.07% | 1.31% | 1.61% | ||||
Allowance / total loans/leases (1) | 1.45% | 1.52% | 1.42% | 1.45% | ||||
Allowance / nonperforming loans (1) | 207.39% | 176.02% | 114.78% | 79.83% | ||||
(1) Upon acquisition per GAAP, the acquired loans are recorded at market value which eliminated the allowance and impacts these ratios. |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||
For the Quarter Ended | For the Nine Months Ended | ||||
September 30, | June 30, | September 30, | September 30, | September 30, | |
2015 | 2015 | 2014 | 2015 | 2014 | |
(dollars in thousands, except per share data) | |||||
CONDENSED INCOME STATEMENT | |||||
Interest income | $ 23,141 | $ 22,051 | $ 21,796 | $ 67,093 | $ 63,937 |
Interest expense | 3,004 | 3,560 | 4,321 | 10,683 | 12,647 |
Net interest income | 20,137 | 18,491 | 17,475 | 56,410 | 51,290 |
Provision for loan/lease losses | 1,635 | 2,349 | 1,063 | 5,694 | 3,159 |
Net interest income after provision for loan/lease losses | 18,502 | 16,142 | 16,412 | 50,716 | 48,131 |
Noninterest income | 7,649 | 5,652 | 5,162 | 19,626 | 15,342 |
Noninterest expense | 17,193 | 24,292 | 16,482 | 58,793 | 48,818 |
Net income (loss) before taxes | 8,958 | (2,498) | 5,092 | 11,549 | 14,655 |
Income tax expense (benefit) | 2,469 | (1,974) | 1,029 | 1,406 | 2,695 |
Net income (loss) | $ 6,489 | $ (524) | $ 4,063 | $ 10,143 | $ 11,960 |
Less: Preferred stock dividends | -- | -- | -- | -- | 1,082 |
Net income (loss) attributable to QCR Holdings, Inc. common stockholders | $ 6,489 | $ (524) | $ 4,063 | $ 10,143 | $ 10,878 |
Earnings (loss) per common share: | |||||
Basic | $ 0.55 | $ (0.05) | $ 0.51 | $ 1.03 | $ 1.37 |
Diluted | $ 0.55 | $ (0.05) | $ 0.50 | $ 1.01 | $ 1.35 |
Earnings per common share (basic) LTM (1) | $ 1.40 | $ 1.36 | $ 1.88 | ||
Weighted average common shares outstanding | 11,713,993 | 9,946,744 | 7,931,944 | 9,878,882 | 7,919,201 |
Weighted average common and common equivalent shares outstanding (2) | 11,875,930 | 9,946,744 | 8,053,985 | 10,024,441 | 8,040,418 |
AVERAGE BALANCES | |||||
Assets | $ 2,563,739 | $ 2,518,170 | $ 2,467,191 | $ 2,529,469 | $ 2,442,338 |
Loans/leases | $ 1,744,043 | $ 1,686,068 | $ 1,572,638 | $ 1,688,605 | $ 1,518,867 |
Deposits | $ 1,881,604 | $ 1,798,787 | $ 1,727,115 | $ 1,809,199 | $ 1,695,952 |
Total stockholders' equity | $ 216,453 | $ 181,811 | $ 136,403 | $ 182,134 | $ 142,999 |
Common stockholders' equity | $ 216,453 | $ 181,811 | $ 136,403 | $ 182,134 | $ 129,277 |
KEY PERFORMANCE RATIOS AND OTHER METRICS | |||||
Return on average assets (annualized) (4) | 1.01% | -0.08% | 0.66% | 0.53% | 0.65% |
Return on average common equity (annualized) (3) | 11.99% | -1.15% | 11.91% | 7.43% | 11.22% |
Return on average total equity (annualized) (4) | 11.99% | -1.15% | 11.91% | 7.43% | 11.15% |
Price earnings ratio LTM (1) | 15.62 x | 16.00 x | 9.39 x | 15.62 x | 9.39 x |
Net interest margin (TEY) | 3.51% | 3.33% | 3.15% | 3.37% | 3.13% |
Efficiency ratio | 61.88% | 100.62% | 72.70% | 115.98% | 73.19% |
Gross loans and leases / total assets ratio | 68.16% | 67.46% | 64.18% | 68.16% | 64.18% |
Full-time equivalent employees (5) | 406 | 416 | 412 | 406 | 412 |
(1) LTM: Last twelve months. | |||||
(2) In accordance with GAAP, the common equivalent shares are not considered in the calculation of diluted earnings per share in periods when the numerator is a net loss. | |||||
(3) The numerator for this ratio is "Net income attributable to QCR Holdings, Inc. common stockholders". | |||||
(4) The numerator for this ratio is "Net income". | |||||
(5) FTEs at June 30, 2015 include eight summer interns. |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||||
ANALYSIS OF NET INTEREST INCOME AND MARGIN | ||||||||||
For the Quarter Ended | ||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | ||||||||
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) | ||||||||||
Securities (1) | $ 591,538 | $ 4,683 | 3.14% | $ 608,688 | $ 4,548 | 3.00% | $ 673,416 | $ 4,644 | 2.74% | |
Loans (1) | 1,744,043 | 19,564 | 4.45% | 1,686,068 | 18,541 | 4.41% | 1,572,638 | 18,003 | 4.54% | |
Other | 88,039 | 202 | 0.91% | 79,835 | 179 | 0.90% | 85,718 | 202 | 0.93% | |
Total earning assets (1) | $ 2,423,620 | $ 24,449 | 4.00% | $ 2,374,591 | $ 23,268 | 3.93% | $ 2,331,772 | $ 22,849 | 3.89% | |
Deposits | $ 1,236,571 | $ 1,140 | 0.37% | $ 1,169,043 | $ 1,084 | 0.37% | $ 1,167,501 | $ 1,168 | 0.40% | |
Borrowings | 434,750 | 1,863 | 1.70% | 504,498 | 2,476 | 1.97% | 572,353 | 3,153 | 2.19% | |
Total interest-bearing liabilities | $ 1,671,321 | $ 3,003 | 0.71% | $ 1,673,541 | $ 3,560 | 0.85% | $ 1,739,854 | 4,321 | 0.99% | |
Net interest income / spread (1) | $ 21,446 | 3.29% | $ 19,708 | 3.08% | $ 18,528 | 2.90% | ||||
Net interest margin (1) | 3.51% | 3.33% | 3.15% | |||||||
For the Nine Months Ended | ||||||||||
September 30, 2015 | September 30, 2014 | |||||||||
Average Balance | Interest Earned or Paid | Average Yield or Cost | Average Balance | Interest Earned or Paid | Average Yield or Cost | |||||
(dollars in thousands) | ||||||||||
Securities (1) | $ 608,687 | $ 13,725 | 3.01% | $ 699,405 | $ 14,063 | 2.69% | ||||
Loans (1) | 1,688,605 | 56,452 | 4.47% | 1,518,867 | 52,063 | 4.58% | ||||
Other | 89,160 | 604 | 0.91% | 91,570 | 640 | 0.93% | ||||
Total earning assets (1) | $ 2,386,452 | $ 70,781 | 3.97% | $ 2,309,842 | $ 66,766 | 3.86% | ||||
Deposits | $ 1,189,110 | $ 3,296 | 0.37% | $ 1,122,009 | $ 3,372 | 0.40% | ||||
Borrowings | 505,364 | 7,387 | 1.95% | 571,192 | 9,275 | 2.17% | ||||
Total interest-bearing liabilities | $ 1,694,474 | $ 10,683 | 0.84% | $ 1,693,201 | $ 12,647 | 1.00% | ||||
Net interest income / spread (1) | $ 60,098 | 3.13% | $ 54,119 | 2.86% | ||||||
Net interest margin (1) | 3.37% | 3.13% | ||||||||
(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 35% tax rate for each period presented. |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||
For the Quarter Ended | For the Nine Months Ended | ||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |
ANALYSIS OF NONINTEREST INCOME | (dollars in thousands) | ||||
Trust department fees | $ 1,532 | $ 1,511 | $ 1,356 | $ 4,676 | $ 4,300 |
Investment advisory and management fees | 782 | 758 | 727 | 2,251 | 2,087 |
Deposit service fees | 1,187 | 1,101 | 1,169 | 3,405 | 3,307 |
Gain on sales of residential real estate loans | 85 | 96 | 121 | 266 | 317 |
Gain on sales of government guaranteed portions of loans | 760 | 69 | 159 | 900 | 861 |
Earnings on cash surrender value of life insurance | 407 | 433 | 434 | 1,319 | 1,277 |
Swap fee income | 63 | 394 | -- | 1,183 | 62 |
Debit card fees | 290 | 255 | 252 | 782 | 763 |
Correspondent banking fees | 311 | 285 | 295 | 916 | 746 |
Participation service fees on commercial loan participations | 202 | 224 | 218 | 648 | 632 |
Gains (losses) on other real estate owned, net | 1,134 | 99 | 31 | 1,204 | (114) |
Securities gains, net | 57 | -- | 19 | 473 | 41 |
Gain on disposal of leased assets | 89 | 76 | 89 | 251 | 108 |
Income on other real estate owned | 146 | 109 | 146 | 371 | 377 |
Lawsuit settlement | 387 | -- | -- | 387 | -- |
Other | 217 | 242 | 146 | 594 | 578 |
Total noninterest income | $ 7,649 | $ 5,652 | $ 5,162 | $ 19,626 | $ 15,342 |
ANALYSIS OF NONINTEREST EXPENSE | |||||
Salaries and employee benefits | $ 10,583 | $ 11,092 | $ 10,359 | $ 32,710 | $ 30,299 |
Occupancy and equipment expense | 1,864 | 1,865 | 1,806 | 5,508 | 5,539 |
Professional and data processing fees | 1,742 | 1,471 | 1,530 | 4,683 | 4,518 |
FDIC and other insurance | 702 | 731 | 712 | 2,152 | 2,122 |
Loan/lease expense | 253 | 368 | 185 | 1,088 | 908 |
Advertising and marketing | 460 | 490 | 555 | 1,368 | 1,394 |
Postage and telephone | 221 | 214 | 147 | 684 | 696 |
Stationery and supplies | 145 | 137 | 138 | 424 | 436 |
Bank service charges | 392 | 359 | 337 | 1,089 | 959 |
Losses on debt extinguishment | -- | 6,894 | -- | 6,894 | -- |
Correspondent banking expense | 177 | 165 | 165 | 518 | 478 |
Other | 654 | 506 | 548 | 1,675 | 1,469 |
Total noninterest expense | $ 17,193 | $ 24,292 | $ 16,482 | $ 58,793 | $ 48,818 |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||
For the Quarter Ended | For the Nine Months Ended | |||||
September 30, | June 30, | December 31, | September 30, | September 30, | September 30, | |
SELECT FINANCIAL DATA - SUBSIDIARIES | 2015 | 2015 | 2014 | 2014 | 2015 | 2014 |
(dollars in thousands) | ||||||
TOTAL ASSETS | ||||||
Quad City Bank and Trust (1) | $ 1,328,053 | $ 1,299,557 | $ 1,320,684 | $ 1,274,033 | $ 1,328,053 | $ 1,274,033 |
m2 Lease Funds, LLC | 195,712 | 189,951 | 178,016 | 170,821 | $ 195,712 | $ 170,821 |
Cedar Rapids Bank and Trust | 867,064 | 860,403 | 840,332 | 822,349 | $ 867,064 | $ 822,349 |
Rockford Bank and Trust | 360,348 | 363,050 | 353,448 | 346,503 | $ 360,348 | $ 346,503 |
TOTAL DEPOSITS | ||||||
Quad City Bank and Trust (1) | $ 919,904 | $ 929,817 | $ 813,805 | $ 873,869 | $ 919,904 | $ 873,869 |
Cedar Rapids Bank and Trust | 685,537 | 649,586 | 636,718 | 611,193 | $ 685,537 | $ 611,193 |
Rockford Bank and Trust | 254,050 | 260,373 | 234,201 | 234,057 | $ 254,050 | $ 234,057 |
TOTAL LOANS & LEASES | ||||||
Quad City Bank and Trust (1) | $ 853,755 | $ 832,799 | $ 783,486 | $ 760,562 | $ 853,755 | $ 760,562 |
m2 Lease Funds, LLC | 194,911 | 189,311 | 177,444 | 169,742 | $ 194,911 | $ 169,742 |
Cedar Rapids Bank and Trust | 617,215 | 598,002 | 576,322 | 552,645 | $ 617,215 | $ 552,645 |
Rockford Bank and Trust | 284,703 | 285,944 | 271,658 | 261,174 | $ 284,703 | $ 261,174 |
TOTAL LOANS & LEASES / TOTAL ASSETS | ||||||
Quad City Bank and Trust (1) | 64% | 64% | 59% | 60% | 64% | 60% |
Cedar Rapids Bank and Trust | 71% | 70% | 69% | 67% | 71% | 67% |
Rockford Bank and Trust | 79% | 79% | 77% | 75% | 79% | 75% |
ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES | ||||||
Quad City Bank and Trust (1) | 1.34% | 1.52% | 1.41% | 1.37% | 1.34% | 1.37% |
m2 Lease Funds, LLC | 1.80% | 1.88% | 1.94% | 1.83% | 1.80% | 1.83% |
Cedar Rapids Bank and Trust | 1.60% | 1.56% | 1.37% | 1.53% | 1.60% | 1.53% |
Rockford Bank and Trust | 1.49% | 1.45% | 1.51% | 1.50% | 1.49% | 1.50% |
ALLOWANCE AS A PERCENTAGE OF NONPERFORMING LOANS/LEASES | ||||||
Quad City Bank and Trust (1) | 130.52% | 114.35% | 83.68% | 64.50% | 130.52% | 64.50% |
m2 Lease Funds, LLC | 303.73% | 308.95% | 257.13% | 186.05% | 303.73% | 186.05% |
Cedar Rapids Bank and Trust | 505.44% | 419.03% | 197.42% | 101.88% | 505.44% | 101.88% |
Rockford Bank and Trust | 264.68% | 266.62% | 143.36% | 95.29% | 264.68% | 95.29% |
NET INCOME (4) | ||||||
Quad City Bank and Trust (1) | $ 4,086 | $ 622 | $ 1,972 | $ 2,896 | $ 7,683 | $ 8,478 |
m2 Lease Funds, LLC (2) | 712 | 834 | 328 | 718 | 2,198 | 1,953 |
Cedar Rapids Bank and Trust | 3,016 | (214) | 2,101 | 1,975 | 4,971 | 5,905 |
Rockford Bank and Trust | 800 | 473 | 323 | 621 | 1,737 | 1,553 |
RETURN ON AVERAGE ASSETS | ||||||
Quad City Bank and Trust (1) | 1.23% | 0.19% | 0.60% | 0.90% | 0.79% | 0.89% |
Cedar Rapids Bank and Trust | 1.36% | -0.10% | 0.99% | 0.93% | 0.77% | 0.96% |
Rockford Bank and Trust | 0.88% | 0.53% | 0.36% | 0.70% | 0.65% | 0.65% |
NET INTEREST MARGIN PERCENTAGE (3) | ||||||
Quad City Bank and Trust (1) | 3.49% | 3.28% | 3.07% | 3.10% | 3.30% | 3.07% |
Cedar Rapids Bank and Trust | 3.71% | 3.63% | 3.58% | 3.41% | 3.66% | 3.40% |
Rockford Bank and Trust | 3.41% | 3.38% | 3.34% | 3.29% | 3.41% | 3.41% |
(1) Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Lease Funds, LLC is also presented separately for certain (applicable) measurements. | ||||||
(2) m2 Lease Funds, LLC net income is post-tax, using an estimated effective tax rate of 35%. | ||||||
(3) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 35% tax rate for each period presented. | ||||||
(4) Net income declines for the quarter ended June 30, 2015 at Quad City Bank and Trust and Cedar Rapids Bank and Trust were primarily the result of losses on debt extinguishment (pre-tax) totaling $3.1 million and $3.8 million, respectively. |
QCR HOLDINGS, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||
As of | |||||
September 30, | June 30, | December 31, | September 30, | ||
GAAP TO NON-GAAP RECONCILIATIONS | 2015 | 2015 | 2014 | 2014 | |
(dollars in thousands, except per share data) | |||||
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1) | |||||
Stockholders' equity (GAAP) | $ 221,115 | $ 211,697 | $ 144,079 | $ 138,180 | |
Less: Intangible assets | 4,744 | 4,794 | 4,894 | 4,944 | |
Tangible common equity (non-GAAP) | $ 216,371 | $ 206,903 | $ 139,185 | $ 133,236 | |
Total assets (GAAP) | $ 2,575,855 | $ 2,542,969 | $ 2,524,958 | $ 2,450,596 | |
Less: Intangible assets | 4,744 | 4,794 | 4,894 | 4,944 | |
Tangible assets (non-GAAP) | $ 2,571,111 | $ 2,538,175 | $ 2,520,064 | $ 2,445,652 | |
Tangible common equity to tangible assets ratio (non-GAAP) | 8.42% | 8.15% | 5.52% | 5.45% | |
For the Quarter ended | For the Nine Months Ended | ||||
September 30, | June 30, | September 30, | September 30, | September 30, | |
CORE NET INCOME (2) | 2015 | 2015 | 2014 | 2015 | 2014 |
Net income (loss) (GAAP) | $ 6,489 | $ (524) | $ 4,063 | $ 10,143 | $ 11,960 |
Less nonrecurring items (post-tax) (3): | |||||
Income: | |||||
Securities gains | $ 37 | $ -- | $ 12 | $ 308 | $ 27 |
Lawsuit settlement | 252 | -- | -- | 252 | -- |
Total nonrecurring income (non-GAAP) | $ 289 | $ -- | $ 12 | $ 560 | $ 27 |
Expense: | |||||
Losses on debt extinguishment | $ -- | $ 4,481 | $ -- | $ 4,481 | $ -- |
Other non-recurring expenses | -- | 513 | -- | 513 | -- |
Total nonrecurring expense (non-GAAP) | $ -- | $ 4,994 | $ -- | $ 4,994 | $ -- |
Core net income (non-GAAP) | $ 6,200 | $ 4,470 | $ 4,051 | $ 14,577 | $ 11,933 |
Less: Preferred stock dividends | -- | -- | -- | -- | 1,082 |
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (2) | $ 6,200 | $ 4,470 | $ 4,051 | $ 14,577 | $ 10,851 |
CORE EARNINGS PER COMMON SHARE (2) | |||||
Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above) | $ 6,200 | $ 4,470 | $ 4,051 | $ 14,577 | $ 10,851 |
Weighted average common shares outstanding | 11,713,993 | 9,946,744 | 7,931,944 | 9,878,882 | 7,919,201 |
Weighted average common and common equivalent shares outstanding | 11,875,930 | 9,946,744 | 8,053,985 | 10,024,441 | 8,040,418 |
Core earnings per common share (non-GAAP): | |||||
Basic | $ 0.53 | $ 0.45 | $ 0.51 | $ 1.48 | $ 1.37 |
Diluted | $ 0.52 | $ 0.45 | $ 0.50 | $ 1.45 | $ 1.35 |
CORE RETURN ON AVERAGE ASSETS (2) | |||||
Core net income (non-GAAP) (from above) | $ 6,200 | $ 4,470 | $ 4,051 | $ 14,577 | $ 11,933 |
Average Assets | $ 2,563,739 | $ 2,518,170 | $ 2,467,191 | $ 2,529,469 | $ 2,442,338 |
Core return on average assets (annualized) (non-GAAP) | 0.97% | 0.71% | 0.66% | 0.77% | 0.65% |
(1) This ratio is a non-GAAP financial measure. The Company's management believes that this measure is important to many investors in the marketplace who are interested in changes period-to-period in common equity. | |||||
(2) Core net income, core net income attributable to QCR Holdings, Inc. common stockholders, core earnings per common share and core return on average assets are non-GAAP financial measures. The Company's management believes that these measure are important to investors as they exclude non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. | |||||
(3) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 35%. |
CONTACT: Todd A. Gipple Executive Vice President Chief Operating Officer Chief Financial Officer (309) 743-7745