PRESS RELEASE
Contact:
Todd A. Gipple
Executive Vice President
Chief Financial Officer
(309) 736-3580
FOR IMMEDIATE RELEASE
February 10, 2003
QCR Holdings, Inc.
Announces Earnings Results For the Quarter Ended December 31,2002
QCR Holdings, Inc. (NASDAQ / QCRH) today announced earnings for the quarter
ended December 31, 2002 of $2.0 million, or basic earnings per share of $.74 and
diluted earnings per share of $.72. For the same quarter one year ago, the
Company reported earnings of $700 thousand, or basic earnings per share of $.25
and diluted earnings per share of $.24.
Since the Company's formation in 1993, its fiscal year end had been June
30th. On August 21, 2002, the Company's Board of Directors approved a change in
the fiscal year end to December 31st. To effect this change, the Company will
file a Form 10-K with the Securities and Exchange Commission for the transition
period July 1, 2002 through December 31, 2002.
Earnings for the six-month transition period ended December 31, 2002 were
$3.2 million, or basic earnings per share of $1.16 and diluted earnings per
share of $1.13. For the same six months in 2001, the Company reported earnings
of $1.3 million, or basic earnings per share of $0.51 and diluted earnings per
share of $0.50.
"We are very pleased with our strong performance during the six-month
transition period," said Doug Hultquist, President and Chief Executive Officer.
"In October, the Company recognized a one-time after-tax gain of $1.3 million on
the sale of the independent sales organization portion of its merchant credit
card operations to iPayment, Inc. Operating results for the six-month period
also improved considerably, as the Company demonstrated a significant increase
in net interest income of $2.4 million over the same period in 2001. Gains on
sales of residential real estate loans also contributed dramatically to our
earnings results for the period, as the Company realized an increase in these
gains of $632 thousand over the previous year. Partially offsetting these
improvements was a $1.1 million increase in our provision for loan losses,
primarily due to one lending relationship at Quad City Bank and Trust."
Michael Bauer, Chairman of the Company and President and Chief Executive
Officer at Quad City Bank & Trust added, "the Company experienced tremendous
growth during this six-month period of more than $85 million, to end calendar
year 2002 at $604.6 million in total assets. In addition to continued rapid
growth at our new bank charter in Cedar Rapids, Quad City Bank & Trust grew
significantly during the last half of calendar 2002 to reach the $500 million in
total assets milestone at December 31, 2002, just prior to Quad City Bank's
ninth anniversary."
"The one-time gain of $1.3 million from the sale of the Company's
independent sales organization related merchant credit card operations added
$.47 to fully diluted earnings per share for the quarter and six-month
transition period ended December 31, 2002," noted Todd Gipple, Executive Vice
President and Chief Financial Officer. "Fully diluted earnings per share for the
six-month transition period, without considering the one-time gain, were $0.66.
This represents a 32% improvement in earnings per share over the $.50 in fully
diluted earnings per share reported for the same six-month period in 2001. In
addition to continued strong operating results at Quad City Bank & Trust and
Quad City Bancard, Inc., Cedar Rapids Bank & Trust continues to make outstanding
progress toward profitability after its first anniversary as a charter in
September 2002. The new charter's after-tax operating losses were only $275
thousand for the six months ended December 31, 2002, which continue to run
slightly better than anticipated, while asset growth continues to exceed
expectations."
"Cedar Rapids Bank & Trust continues to be a significant contributor to the
Company's growth in assets, loans, and deposits since opening in September of
2001. We have experienced rapid growth in our first fifteen months of
operations, and our bank has reached total assets of $92.3 million, net loans of
$72.6 million, and deposits of $64.0 million as of December 31, 2002," noted
Cedar Rapids Bank & Trust President and Chief Executive Officer, Larry Helling.
He added, "We continue to add new commercial and retail banking relationships at
a steady pace, and we are pleased with the market's reaction to our strategy of
providing the highest levels of service and a personalized banking
relationship."
The Company's total assets increased 17% to $604.6 million at December 31,
2002 from $518.8 million at June 30, 2002. During the same period, net loans
increased by $58.4 million or 15% to $442.9 million from $384.5 million at June
30, 2002. Non-performing assets increased to $5.0 million at December 31, 2002
from $2.3 million at June 30, 2002. Total deposits increased 16% to $434.7
million at December 31, 2002 from $376.3 million at June 30, 2002. Stockholders'
equity rose to $36.6 million at December 31, 2002 as compared to $32.6 million
at June 30, 2002.
"The 2.7 million increase in nonperforming assets from June 30, 2002 to
December 31, 2002 was primarily due to two commercial lending relationships at
Quad City Bank & Trust, "explained Chief Financial Officer Gipple. He added,
"The increased loan loss provisions in the six-month period ended December 31,
2002, as well as $1.2 million of charge-offs during the period, were due to the
significant deterioration of one commercial lending relationship at Quad City
Bank and Trust. The bank is working closely with this customer ro resolve the
situation. Like many other financial institutions, some of our customers are
experiencing difficulty in the lagging economy, which could lead to further
increases in nonperforming assets and the need for an increased allowance for
loan losses. Given the continued soft economy, management is closely monitoring
the Company's loan portfolio and the need for increased provisions for possible
loan losses."
QCR Holdings, Inc., headquartered in Moline, Illinois, is a multi-bank
holding company, which serves the Quad City and Cedar Rapids communities via its
wholly owned subsidiary banks. Quad City Bank and Trust Company, which is based
in Bettendorf, Iowa and commenced operations in 1994, and Cedar Rapids Bank and
Trust Company, which is based in Cedar Rapids, Iowa and commenced operations in
2001, provide full-service commercial and consumer banking and trust and asset
management services. The Company also engages in merchant credit card processing
through its wholly owned subsidiary, Quad City Bancard, Inc., based in Moline,
Illinois.
Special Note Concerning Forward-Looking Statements. This document
(including information incorporated by reference) 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," "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 September 11th; (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 acquisitions; (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
--------------------------------------------
December 31, June 30, December 31,
2002 2002 2001
------------ ------------- -------------
(dollars in thousands, except share data)
SELECTED BALANCE SHEET DATA
Total assets .............................. $ 604,600 $ 518,828 $ 462,685
Securities ................................ 81,654 76,231 66,121
Total loans ............................... 449,736 390,594 342,999
Allowance for estimated loan losses ....... 6,879 6,111 4,939
Total deposits ............................ 434,748 376,317 343,888
Total stockholders' equity................. 36,586 32,578 30,299
Common shares outstanding.................. 2,762,915 2,749,447 2,742,436
Book value per common share ............... 13.24 11.85 11.05
Full time equivalent employees ............ 195 190 179
Tier 1 leverage capital ratio ............. 7.79% 8.25% 9.06%
As of
--------------------------------------------
December 31, June 30, December 31,
2002 2002 2001
------------ ----------- -------------
(dollars in thousands)
ANALYSIS OF LOAN DATA
Nonaccrual loans ............................ $ 4,608 $ 1,560 $ 1,846
Accruing loans past due 90 days or more...... 431 708 1,765
Other real estate owned ..................... -- -- 47
Total nonperforming assets................... 5,039 2,268 3,658
Net charge-offs $ 1,416 $ 402 $ 349
(For the 6 months ended December 31/
For the 12 months ended June 30)
Loan mix:
Commercial ................................ $ 350,331 $ 305,043 $ 255,493
Real estate ............................... 54,713 45,418 47,335
Installment and other consumer ............ 44,692 40,133 40,171
Total loans.................................. 449,736 390,594 342,999
For the Quarter Ended For the Six Months Ended
December 31, December 31,
-------------------------------------------------
2002 2001 2002 2001
-------- --------- --------- ---------
(dollars in thousands, except per share data)
SELECTED INCOME STATEMENT DATA
Interest income ............................. $ 8,244 $ 6,895 $ 16,120 $ 13,846
Interest expense ............................ 3,295 3,113 6,484 6,634
Net interest income ......................... 4,949 3,782 9,636 7,212
Provision for loan losses ................... 1,547 631 2,184 1,040
Noninterest income .......................... 6,371 2,192 8,840 4,040
Noninterest expense ......................... 6,642 4,319 11,413 8,245
Income tax expense .......................... 1,094 335 1,683 630
Net income .................................. 2,037 689 3,196 1,337
Earnings per common share (basic) ........... $ 0.74 $ 0.25 $ 1.16 $ 0.51
Earnings per common share (diluted) ......... $ 0.72 $ 0.24 $ 1.13 $ 0.50
AVERAGE BALANCES
Assets ...................................... $ 589,546 $ 438,438 $ 567,017 $ 426,595
Deposits .................................... 414,043 323,377 400,046 318,951
Loans ...................................... 437,833 324,203 419,104 312,295
Stockholders' equity ........................ 35,830 30,381 34,720 27,697
KEY RATIOS
Return on average assets (annualized) ....... 1.38% 0.63% 1.13% 0.63%
Return on average common equity (annualized) 22.74% 9.07% 18.41% 9.65%
Net interest margin (TEY) ................... 3.61% 3.76% 3.68% 3.70%
Efficiency ratio ............................ 58.62% 72.25% 61.71% 73.24%
For the Quarter Ended For the Six Months Ended
December 31, December 31,
--------------------- ------------------------
2002 2001 2002 2001
--------------------- ------------------------
(dollars in thousands, except share data)
ANALYSIS OF NONINTEREST INCOME
Merchant credit card fees, net of processing costs $ 604 $ 503 $ 1,292 $ 1,022
Trust department fees............................. 531 521 1,045 997
Deposit service fees .............................. 313 226 597 464
Gain on sales of loans, net ....................... 1,152 771 1,865 1,233
Securities gains (losses), net .................... 62 0 62 (1)
Gain on sale of merchant credit card portfolio .... 3,460 0 3,460 0
Other ............................................. 249 172 519 325
Total noninterest income ........................ 6,371 2,193 8,840 4,040
ANALYSIS OF NONINTEREST EXPENSE
Salaries and employee benefits ....................$ 3,209 $ 2,484 $ 6,075 $ 4,774
Compensation and other expenses related to sale
of merchant credit card portfolio................ 1,414 0 1,414 0
Professional and data processing fees ............. 477 412 873 785
Advertising and marketing ........................ 201 174 341 287
Occupancy and equipment expense ................... 621 608 1,323 1,138
Stationery and supplies ........................... 112 131 229 236
Postage and telephone ............................. 147 121 292 229
Other ............................................. 461 389 866 796
Total noninterest expenses ..................... 6,642 4,319 11,413 8,245
WEIGHTED AVERAGE SHARES
Common shares outstanding (a)...................... 2,755,917 2,801,180 2,752,739 2,627,969
Incremental shares from assumed conversion:
Options ......................................... 68,370 50,457 66,677 48,560
Adjusted weighted average shares (b)............... 2,824,287 2,851,637 2,819,416 2,676,529