PRESS RELEASE
FOR IMMEDIATE RELEASE Contact:
July 22, 2005 Todd A. Gipple
Executive Vice President
Chief Financial Officer
(309) 743-7745
QCR Holdings, Inc.
Announces Earnings Results For the Second Quarter Ended June 30, 2005
QCR Holdings, Inc. (Nasdaq SmallCap/QCRH) today announced earnings for the
second quarter ended June 30, 2005 of $1.3 million, or basic earnings per share
of $0.28 and diluted earnings per share of $0.27. For the same quarter one year
ago, the Company reported earnings of $1.7 million, or basic earnings per share
of $0.40 and diluted earnings per share of $0.39.
Earnings for the six months ended June 30, 2005 were $2.6 million, or basic
earnings per share of $0.57 and diluted earnings per share of $0.56. For the
comparable period in 2004, the Company had earnings of $2.5 million, or basic
earnings per share of $0.60 and diluted earnings per share of $0.58. For the
first six months of 2005, the Company's newest subsidiary, Rockford Bank &
Trust, experienced a net operating loss of $669 thousand.
"The operating losses at Rockford Bank & Trust have been very close to the
amount budgeted," stated Doug Hultquist, President and Chief Executive Officer.
He continued, " Our Company is proud to be a part of the Rockford community. We
are pleased with the market's support of our model of experienced bankers
providing high levels of service and creating meaningful and satisfying
experiences for our customers." Rockford Bank & Trust, which opened January 3,
2005, reached total assets of $20.6 million, net loans of $10.6 million, and
deposits of $11.3 million at June 30, 2005.
President Hultquist added, "Both net interest income and noninterest income have
shown improvement from one year ago, as total revenue increased by $2.4 million,
or 20%. Also, during the second quarter of 2005, earnings were positively
impacted by a $615 thousand reduction in the provision for loan losses, when
compared to the previous year. The successful resolution of some large credits
in Quad City Bank & Trust's loan portfolio, through payoff, credit upgrade,
refinancing, or the acquisition of additional collateral or guarantees, resulted
in reductions to both provision expense and the level of allowance for loan
losses." He continued, "We experienced a $738 thousand increase in net interest
income for the second quarter of 2005, when compared to one year ago. We also
experienced a slight improvement in noninterest income of $55 thousand, where an
increase in trust department fees more than offset the anticipated decline in
gains on sales of residential real estate loans. However, offsetting our
improvements in revenue from one year ago was a marked increase in noninterest
expense of 37%, or $2.0 million, due primarily to anticipated increases in
personnel and facilities costs as our subsidiary banks have opened four new
locations during 2005. In summary, our solid improvements in revenue have nearly
offset the additional operating costs created by our four new banking locations,
allowing us to maintain our second quarter core earnings from one year ago,
after adjustment for Rockford Bank & Trust's second quarter start-up losses of
$326 thousand."
Michael Bauer, Chairman of the Company and President and Chief Executive Officer
at Quad City Bank & Trust stated, "During the first half of 2005, the Company
grew total assets at an annualized pace of 11%. Premises and equipment grew $2.3
million during the second quarter and $5.4 million during the first six months,
as the Company invested in new facilities at all three of its subsidiary banks.
On January 3, 2005, Rockford Bank & Trust began operations under its own charter
in its permanent location in downtown Rockford. Quad City Bank & Trust opened
its fifth banking facility located in the Five Points area of west Davenport on
March 17, 2005. Cedar Rapids Bank & Trust moved into its new main office in
downtown Cedar Rapids on July 5, 2005, and into its first branch facility
located on Council Street in northern Cedar Rapids on June 2, 2005."
Quad City Bank & Trust, the Company's first subsidiary bank, grew to total
assets of $652.4 million at June 30, 2005, which was an increase of $16.2
million, from December 31, 2004. At the close of the second quarter of 2005,
Quad City Bank & Trust had net loans of $469.8 million and deposits of $414.6
million. In a comparison of the first half of 2005 to 2004, Quad City Bank and
Trust experienced marked increases in noninterest expenses, primarily salaries
and employee benefits and other real estate owned expense, which offset a
significant decrease in the provision for loan losses from year-to-year. As a
result, the bank realized after-tax net income year-to-date of $3.3 million,
which essentially equaled net income for the first six months of 2004.
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Cedar Rapids Bank & Trust has continued to experience outstanding growth,
reaching total assets of $245.9 million at June 30, 2005, for an increase of
$12.6 million, or 5%, from December 31, 2004. At the end of the second quarter
of 2005, Cedar Rapids Bank & Trust had net loans of $185.1 million, deposits of
$171.8 million, and significantly improved profitability, as the bank realized
after-tax net income year-to-date of $727 thousand, which was more than double
the $329 thousand in net income for the same six-month period in 2004.
The Company's total assets increased $50.0 million, or 6%, to $920.1 million at
June 30, 2005 from $870.1 million at December 31, 2004. During the same period,
net loans increased by $26.5 million, or 4%, to $665.6 million from $639.1
million at December 31, 2004. Non-performing assets decreased to $8.0 million at
June 30, 2005 from $10.7 million at December 31, 2004. Total deposits increased
to $595.7 million at June 30, 2005 when compared to $588.0 million at December
31, 2004. Stockholders' equity rose to $52.9 million at June 30, 2005 as
compared to $50.8 million at December 31, 2004, primarily as the result of net
income and the net increase in shares of common stock from the private placement
of stock and the exercise of stock options, partially offset by a decrease in
fair value of securities classified as available for sale.
"Nonaccrual loans at June 30, 2005 were $5.2 million, of which $4.1 million, or
79%, resulted from four large commercial lending relationships at Quad City Bank
& Trust. At quarter end, accruing loans past due 90 days or more were $1.3
million, of which $954 thousand, or 71%, were the result of six additional
lending relationships at Quad City Bank & Trust. By mid June, three of these
relationships totaling $466 thousand were current with their payments. In the
first quarter, Quad City Bank & Trust charged off $726 thousand on one
nonperforming loan, which contributed to the reduced level of nonaccrual loans,"
stated Chairman Bauer. He explained, "We are pleased with the $3.1 million
decrease in non-performing assets since the end of 2004. However, an unfortunate
contributor to this decrease was a $288 thousand write-down of other real estate
owned at Quad City Bank & Trust." He continued, "Improved credit quality will
remain a strong focus for us throughout the coming quarters. Management is
continually monitoring the Company's loan portfolio and the level of allowance
for loan losses. The Company's allowance for loan losses to total loans was
1.28% at June 30, 2005. The Company's exposure to loss on several nonperforming
loans at Quad City Bank & Trust has been significantly reduced since the end of
2004 by the existence of either a stronger collateral position, a governmental
guarantee, or an improved payment status. Efforts are ongoing throughout the
Company to improve the overall quality of the loan portfolio."
QCR Holdings, Inc., headquartered in Moline, Illinois, is a multi-bank holding
company, which serves the Quad City, Cedar Rapids, and Rockford communities via
its wholly owned subsidiary banks. Quad City Bank and Trust Company, which is
based in Bettendorf, Iowa and commenced operations in 1994, Cedar Rapids Bank
and Trust Company, which is based in Cedar Rapids, Iowa and commenced operations
in 2001, and Rockford Bank and Trust Company, which is based in Rockford,
Illinois and commenced operations in 2005, provide full-service commercial and
consumer banking and trust and asset management services. The Company also
engages in credit card processing through its wholly owned subsidiary, Quad City
Bancard, Inc., based in Moline, Illinois.
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," "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 Sates to any such threats and attacks; (iii) changes in state and federal
laws, regulations and governmental policies concerning the Company's general
business; (iv) changes in interest rates and prepayment rates of the Company's
assets; (v) increased competition in the financial services sector and the
inability to attract new customers; (vi) changes in technology and the ability
to develop and maintain secure and reliable electronic systems; (vii) the loss
of key executives or employees; (viii) changes in consumer spending; (ix)
unexpected results of our strategy to establish denovo banks in new markets; (x)
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.
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As of
----------------------------------------------------
June 30, March 31, December 31, June 30,
2005 2005 2004 2004
----------------------------------------------------
(dollars in thousands, except
share data)
SELECTED BALANCE SHEET DATA
Total assets ...................... $ 920,061 $ 891,862 $ 870,084 $ 811,541
Securities ........................ $ 153,975 $ 155,741 $ 149,561 $ 131,197
Total loans ....................... $ 674,278 $ 652,637 $ 648,351 $ 592,184
Allowance for estimated loan losses $ 8,662 $ 8,841 $ 9,262 $ 9,746
Total deposits .................... $ 595,716 $ 588,248 $ 588,016 $ 509,282
Total stockholders' equity ........ $ 52,939 $ 51,569 $ 50,774 $ 42,920
Common shares outstanding ......... 4,519,559 4,509,883 4,496,730 4,224,462
Book value per common share ....... $ 11.71 $ 11.43 $ 11.29 $ 10.16
Full time equivalent employees .... 286 257 243 229
Tier 1 leverage capital ratio ..... 7.81% 7.83% 7.81% 7.20%
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As of
--------------------------------------------
June 30, March 31, December 31, June 30,
2005 2005 2004 2004
--------------------------------------------
(dollars in thousands)
ANALYSIS OF LOAN DATA
Nonaccrual loans ...................... $ 5,226 $ 7,118 $ 7,608 $ 5,690
Accruing loans past due 90 days or more 1,350 551 1,133 1,006
Other real estate owned ............... 1,402 1,574 1,925 --
-----------------------------------------
Total nonperforming assets ............ $ 7,978 $ 9,243 $ 10,666 $ 6,696
Net charge-offs (calendar year-to-date) $ 754 $ 723 $ 753 $ 222
Loan mix:
Commercial .......................... $548,107 $531,263 $532,830 $483,582
Real estate ......................... 64,731 63,287 59,611 54,261
Installment and other consumer ...... 61,440 58,087 55,910 54,341
-----------------------------------------
Total loans ........................... $674,278 $652,637 $648,351 $592,184
ANALYSIS OF DEPOSIT DATA
Deposit mix:
Noninterest-bearing ................. $103,981 $102,773 $109,362 $106,272
Interest-bearing .................... 491,735 485,475 478,654 403,010
-----------------------------------------
Total deposits ........................ $595,716 $588,248 $588,016 $509,282
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For the Quarter Ended For the Six Months Ended
----------------------------------- ------------------------
June 30, March 31, June 30, June 30, June 30,
2005 2005 2004 2005 2004
-------------------------------------------------------------
(dollars in thousands, except per share data)
SELECTED INCOME STATEMENT DATA
Interest income ...................................... $ 11,539 $ 10,680 $ 9,226 $ 22,219 $ 17,905
Interest expense ..................................... 4,782 4,192 3,207 8,974 6,110
--------------------------------------------------------------
Net interest income .................................. 6,757 6,488 6,019 13,245 11,795
Provision for loan losses ............................ (147) 301 468 154 1,324
--------------------------------------------------------------
Net interest income after provision for loan loss6,904 6,904 6,187 5,551 13,091 10,471
Noninterest income ................................... 2,435 2,517 2,379 4,952 4,738
Noninterest expense .................................. 7,443 6,753 5,437 14,196 11,527
--------------------------------------------------------------
Income before taxes .................................. 1,896 1,951 2,493 3,847 3,682
Income tax expense ................................... 634 627 822 1,261 1,175
--------------------------------------------------------------
Net income ........................................... $ 1,262 $ 1,324 $ 1,671 $ 2,586 $ 2,507
Earnings per common share (basic) .................... $ 0.28 $ 0.29 $ 0.40 $ 0.57 $ 0.60
Earnings per common share (diluted) .................. $ 0.27 $ 0.29 $ 0.39 $ 0.56 $ 0.58
AVERAGE BALANCES
Assets ............................................... $ 901,609 $ 878,589 $ 786,896 $ 890,099 $ 762,047
Deposits ............................................. $ 589,851 $ 593,243 $ 506,614 $ 591,548 $ 508,218
Loans ................................................ $ 660,877 $ 647,923 $ 573,781 $ 654,400 $ 555,272
Stockholders' equity ................................. $ 52,207 $ 51,161 $ 42,774 $ 51,684 $ 42,208
KEY RATIOS
Return on average assets (annualized) ................ 0.56% 0.60% 0.85% 0.58% 0.66%
Return on average common equity (annualized) ......... 9.67% 10.35% 15.63% 10.01% 11.88%
Net interest margin (TEY) ............................ 3.33% 3.26% 3.40% 3.29% 3.42%
Nonperforming assets / total assets .................. 0.87% 1.04% 0.83% 0.87% 0.83%
Net charge-offs / average loans ...................... 0.00% 0.11% 0.03% 0.12% 0.04%
Allowance / total loans .............................. 1.28% 1.35% 1.65% 1.28% 1.65%
Efficiency ratio ..................................... 80.98% 75.54% 64.75% 78.01% 69.72%
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For the Quarter Ended For the Six Months Ended
----------------------------------- ------------------------
June 30, March 31, June 30, June 30, June 30,
2005 2005 2004 2005 2004
--------------------------------------------------------------
(dollars in thousands, except share data)
ANALYSIS OF NONINTEREST INCOME
Merchant credit card fees, net of processing costs . $ 384 $ 419 $ 302 $ 803 $ 841
Trust department fees .............................. 720 735 608 1,455 1,289
Deposit service fees ............................... 396 382 408 778 817
Gain on sales of loans, net ........................ 351 254 406 605 668
Securities gains (losses), net ..................... -- -- 26 -- 26
Earnings on cash surrender value of life insurance . 140 179 241 319 336
Investment advisory and management fees ............ 200 140 136 340 262
Other .............................................. 244 408 252 652 499
--------------------------------------------------------------
Total noninterest income ........................ $ 2,435 $ 2,517 $ 2,379 $ 4,952 $ 4,738
ANALYSIS OF NONINTEREST EXPENSE
Salaries and employee benefits ..................... $ 4,120 $ 3,896 $ 3,119 $ 8,017 $ 6,271
Professional and data processing fees .............. 825 613 531 1,437 996
Advertising and marketing .......................... 308 260 287 568 501
Occupancy and equipment expense .................... 1,022 976 791 1,998 1,522
Stationery and supplies ............................ 164 148 132 312 269
Postage and telephone .............................. 198 196 163 395 329
Bank service charges ............................... 139 119 147 257 286
Insurance .......................................... 154 153 125 307 226
Loss on redemption of junior subordinated debentures -- -- -- -- 747
Other .............................................. 513 392 142 905 380
--------------------------------------------------------------
Total noninterest expenses ...................... $ 7,443 $ 6,753 $ 5,437 $ 14,196 $ 11,527
WEIGHTED AVERAGE SHARES
Common shares outstanding (a) ...................... 4,514,459 4,503,312 4,212,795 4,508,886 4,213,635
Incremental shares from assumed conversion:
Options and Employee Stock Purchase Plan ....... 99,797 107,987 109,648 103,892 116,898
--------------------------------------------------------------
Adjusted weighted average shares (b) ............... 4,614,256 4,611,299 4,322,443 4,612,778 4,330,533
<FN>
(a) Denominator for Basic Earnings Per Share
(b) Denominator for Diluted Earnings Per Share
</FN>
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