Exhibit 99.1

 

PRESS RELEASE

FOR IMMEDIATE RELEASE

 

QCR Holdings, Inc. Announces Second Quarter Earnings and Continued COVID-19 Pandemic Response

EPS of $0.86 Driven by Record Pre-Provision/Pre-Tax Adjusted Net Income

 

Second Quarter 2020 Highlights

 

·

Net income of $13.7 million, or $0.86 per diluted share

·

Adjusted net income (non-GAAP) of $14.0 million, or $0.88 per diluted share

·

Noninterest income of $28.6 million

·

Net interest margin was stable, excluding the impact of excess liquidity

·

Record pre-provision, pre-tax adjusted net income (non-GAAP) of $36.8 million

·

Pre-provision, pre-tax adjusted ROAA (non-GAAP) of 2.54%

·

Provision expense of $19.9 million for the quarter, increasing ALLL by 33 bps to 1.47%

·

Nonperforming assets to total assets of 0.24%, improving 8 basis points from the prior quarter

·

Annualized core loan and lease growth (non-GAAP) of 8.4% for the quarter, excluding SBA Paycheck Protection Program (“PPP”) loans

·

Annualized deposit growth of 17.2% for the quarter

·

PPP loan participation of 1,655 totaling $358 million to both new and existing clients

 

Moline, IL, July 27, 2020 -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $13.7 million and diluted earnings per share (“EPS”) of $0.86 for the second quarter of 2020, compared to net income of $11.2 million and diluted EPS of $0.70 for the first quarter of 2020. Pre-provision, pre-tax adjusted net income (non-GAAP) increased $14.0 million in the second quarter, compared to the first quarter led by strong loan growth, net interest income, and record swap fee income. Provision expense increased $11.5 million in the second quarter, compared to the first quarter. This increase was due primarily to qualitative factors in response to deteriorating economic prospects as a result of the COVID-19 pandemic.

 

The Company reported adjusted net income (non-GAAP) of $14.0 million and adjusted diluted EPS (non-GAAP) of $0.88 for the second quarter of 2020, compared to adjusted net income (non-GAAP) of $12.4 million and adjusted diluted EPS (non-GAAP) of $0.77 for the first quarter of 2020. For the second quarter of 2019, net income and diluted EPS were $13.5 million and $0.85, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $14.1 million and $0.88, respectively.

 

		For the Quarter Ended
		June 30,				March 31,				June 30,
$ in millions (except per share data)		2020				2020				2019
Net Income		$	13.7			$	11.2			$	13.5
Diluted EPS		$	0.86			$	0.70			$	0.85
Adjusted Net Income (non-GAAP)		$	14.0			$	12.4			$	14.1
Adjusted Diluted EPS (non-GAAP)		$	0.88			$	0.77			$	0.88
Pre-Provision/Pre-Tax Adjusted Income (non-GAAP)		$	36.8			$	22.8			$	19.3
Pre-Provision/Pre-Tax Adjusted ROAA (non-GAAP)			2.54	%			1.84	%			1.52	%
See GAAP to non-GAAP reconciliations

 

“We are very pleased with our core operating performance for the second quarter,” commented Larry J. Helling, Chief Executive Officer. “We delivered record pre-provision, pre-tax adjusted net income, driven by strong loan growth, strong fee income, and careful management of noninterest expenses. In addition to successfully funding over $350 million of PPP loans to both new and existing customers, we grew our core loans by over 8% on an annualized basis. Our core deposit gathering was even stronger during the quarter with the outsized growth in deposits creating significant excess liquidity that led to compression in our net interest margin.”

 

Additionally, asset quality remains strong and our current credit metrics improved during the quarter. “We reduced nonperforming assets by 21%, through the sale of an OREO property,” Helling said. “While we do not currently see meaningful degradation of specific credits in our portfolio, we chose to be prudent and increased our provision for loan losses during the quarter in order to build reserves against future potential credit issues related to COVID-19.”

 

“QCRH continues to successfully navigate the challenges presented by the COVID-19 pandemic, including supporting impacted clients through the QCRH Loan Relief Program, enabling clients to defer payments and preserve cash and liquidity. It’s difficult to predict the ultimate impact that this Pandemic will have on our clients. However, we believe our banks are well positioned to deal with the Pandemic,” Helling said. “All of our employees are dedicated to helping our clients weather this storm, and we have seasoned credit teams at all charters experienced in dealing with significant economic downturns.”

 

 

Annualized Loan and Lease Growth of 8.4%, excluding PPP loans (non-GAAP)

 

During the second quarter of 2020, the Company’s total loans and leases increased by $435.6 million to a total of $4.1 billion. Included in this amount was $358.1 million of PPP loans made to both new and existing customers. Excluding the PPP loans, loan and lease growth during the quarter was 8.4% on an annualized basis (non-GAAP), reflecting healthy demand across all markets. Core deposits (excluding brokered deposits) increased $338.6 million, or 8.7% on a linked quarter basis. Brokered deposits declined by $159.3 million as the Company allowed certain higher cost brokered deposits to run off the balance sheet. Throughout the quarter, deposits grew significantly with average deposit growth of $777.9 million, or 19.7% for the quarter. The Company’s correspondent banking portfolio contributed to the majority of this outsized growth as our correspondent bank clients grew liquidity with deposit growth significantly outpacing loans. These outsized liquidity balances temporarily shifted off balance sheet at quarter-end. The percentage of wholesale funds to total assets was 8.9% as of the second quarter, which was down from 10.1% in the first quarter of 2020 as the Company’s need for wholesale funding declined due to the strong growth in core deposits. At quarter-end, the percentage of gross loans and leases to total assets was 73.9%, which was up from 70.8% in the first quarter, primarily driven by the increase in PPP loan balances.

 

“Despite the uncertainty caused by the COVID-19 pandemic, we delivered solid loan growth for the quarter in addition to the $358 million of PPP loans that we funded,” added Helling. “Loan production improved in both our core commercial lending business and our Specialty Finance Group. Excluding our PPP loan production, loan and lease growth for the first six months of 2020 has been 5.0% on an annualized basis, and given our current pipeline, we believe that we will be able to achieve organic loan growth of between 3% and 5% for the full year.”

 

Net Interest Income of $40.9 million

 

Net interest income for the second quarter of 2020 totaled $40.9 million, compared to $37.7 million for the first quarter of 2020 and $38.0 million for the second quarter of 2019. The increase was primarily due to growth in average interest earning assets of $791.6 million, or 17.7% on a linked quarter basis, of which $404.9 million of the increase was due to excess cash derived from the aforementioned outsized deposit growth. Partially offsetting the impact of the higher average balance of interest earning assets, was a lower reported net interest margin, due to the significant excess liquidity. Acquisition-related net accretion totaled $736 thousand (pre-tax) for the second quarter of 2020, up slightly from the first quarter of 2020 and down from $1.1 million for the second quarter of 2019. Adjusted net interest income (non-GAAP) was $41.9 million for the second quarter of 2020, compared to $38.9 million for the first quarter of 2020 and $38.7 million for the second quarter of 2019.

 

In the second quarter, NIM was 3.14% and, on a tax-equivalent yield basis (non-GAAP), NIM was 3.27%, a decrease of 26 basis points and 29 basis points from the first quarter of 2020, respectively. Adjusted NIM (non-GAAP), excluding acquisition-related net accretion was 3.21%, down 29 basis points from the first quarter. The decline in adjusted NIM (non-GAAP) during the quarter was entirely due to the significant excess liquidity carried for the quarter. Average excess liquidity of $404.9 million with modest negative arbitrage contributed approximately 30 basis points to the NIM dilution. Excluding the impact of excess liquidity, the Company’s NIM was stable as cost of funds declines offset pricing pressure on earning assets.

 

		For the Quarter Ended
		June 30,				March 31,				June 30,
		2020				2020				2019
NIM			3.14	%			3.40	%			3.25	%
NIM (TEY)(non-GAAP)			3.27	%			3.56	%			3.40	%
Adjusted NIM (TEY)(non-GAAP)			3.21	%			3.50	%			3.31	%
See GAAP to non-GAAP reconciliations

 

“Our deposit costs decreased significantly during the quarter as we gathered core deposits and reduced our wholesale funding, allowing us to reduce our total cost of interest-bearing funds by 53 basis points. However, our average loan yields also decreased due to the sharp decline in short-term interest rates, and when combined with the significant excess liquidity that we carried during the quarter, our adjusted NIM was adversely impacted by 29 basis points,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Excluding the impact of the excess liquidity, adjusted NIM would have been stable from the first quarter.”

 

 

Noninterest Income of $28.6 million

 

Noninterest income for the second quarter of 2020 totaled $28.6 million, compared to $15.2 million for the first quarter of 2020. The increase was primarily due to $19.9 million in swap fee income, up $13.1 million from the first quarter of 2020. Wealth management revenue was $3.6 million for the quarter, down from $4.0 million in the first quarter due to a full quarter of lower fair market values of the assets under management. Noninterest income increased 67.7% when compared to the second quarter of 2019.

 

“Continued strong production from our Specialty Finance Group and our core banks led to a record $19.9 million in swap fee income during the quarter. Swap fee income totaled $26.7 million for the first six months of 2020, putting us on track to exceed last year’s record amount,” added Mr. Gipple. “Our current expectation is that for the remainder of 2020, this fee income source will be approximately $30 to $32 million for the six month period.”

 

Noninterest Expenses of $33.1 million

 

Noninterest expense for the second quarter of 2020 totaled $33.1 million, compared to $31.4 million for the first quarter of 2020. The linked quarter increase was primarily due to increased salary and benefits expense of $2.8 million with increased bonus and commission expense in the quarter driven by the strong financial results and higher than anticipated swap fee income. This was partially offset by a $600 thousand decline in disposition costs, a $285 thousand decline in occupancy and equipment costs and a $345 thousand increase in gains and income from the operations of other real estate. In addition, the first quarter of 2020 included a goodwill impairment charge of $500 thousand.

 

NPAs at Historical Lows

Building Reserves for COVID-19

 

Nonperforming assets (“NPAs”) totaled $13.3 million, a decrease of $3.6 million from the first quarter of 2020. The decrease was primarily due to the disposition of other real estate owned. The ratio of NPAs to total assets decreased to 0.24% at June 30, 2020, compared to 0.32% at March 31, 2020, and down from 0.45% at June 30, 2019.

 

The Company’s provision for loan and lease losses totaled $19.9 million for the second quarter of 2020, up from $8.4 million in the prior quarter. The linked quarter increase in the provision for loan and lease losses was primarily due to increased qualitative factors in response to the COVID-19 pandemic. As of June 30, 2020, the Company’s allowance to total loans and leases was 1.47%, which was up from 1.14% at March 31, 2020, and from 1.05% at June 30, 2019. Excluding the impact of the $358 million in PPP loans, the allowance for estimated losses on loans and leases to total loans and leases was 1.61% (non-GAAP).

 

In accordance with GAAP for acquisition accounting, loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date. Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount of $5.5 million at June 30, 2020.

 

Strong Capital Levels

 

As of June 30, 2020, the Company’s total risk-based capital ratio was 13.74%, the common equity tier 1 ratio was 10.28%, and the tangible common equity to tangible assets ratio was 8.48% (non-GAAP). By comparison, these respective ratios were 13.54%, 10.31% and 8.76% as of March 31, 2020. The decline in the tangible common equity to tangible assets ratio was primarily the result of asset growth associated with the increase in PPP loans during the quarter. Excluding the impact of the PPP loans, the tangible common equity to tangible assets ratio was 9.03% (non-GAAP).

 

Focus on Three Strategic Long-Term Initiatives

 

As part of the Company’s ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, it continues to operate under three key strategic long-term initiatives:

 

·

Organic loan and lease growth of 9% per year, funded by core deposits;

·

Grow fee-based income by at least 6% per year; and

·

Limit our annual operating expense growth to 5% per year.

 

It should be noted that these initiatives are long-term targets. Due to the impact of the COVID-19 pandemic, the Company may not be able to achieve these goals for the full year 2020.

 

Supplemental Presentation and Where to Find It

 

In addition to this press release, the Company has included a supplemental presentation that provides further information regarding the Company’s loan exposures and deferrals. Investors, analysts and other interested persons may find this presentation on the Securities and Exchange Commission’s EDGAR filing system at www.sec.gov/edgar.shtml, or on the Company’s website at www.qcrh.com.

 

 

Conference Call Details

 

The Company will host an earnings call/webcast tomorrow, July 28, 2020, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through August 11, 2020. The replay access information is 877-344-7529 (international 412-317-0088); access code 10145663. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

 

About Us

 

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, and Springfield communities through its wholly-owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company engages in commercial leasing through its wholly-owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 25 locations in Illinois, Iowa, Wisconsin and Missouri. As of June 30, 2020, the Company had approximately $5.6 billion in assets, $4.1 billion in loans and $4.3 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

 

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, state, national and international economies (including the impact of the 2020 presidential election and the impact of tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices (including the new current expected credit loss (CECL) impairment standards, that will change how the Company estimates credit losses when implemented); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; and (xi) unexpected outcomes of existing or new litigation involving the Company. 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.

 

Contacts:

 

Todd A. Gipple

President

Chief Operating Officer

Chief Financial Officer

(309) 743-7745

tgipple@qcrh.com

 

Kim K. Garrett

Vice President

Corporate Communications

Investor Relations Manager

(319) 743-7006

kgarret@qcrh.com

 

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

																						Held for Sale				Held for Sale				Held for Sale				Held for Sale
		As of																				As of				As of				As of				As of
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				March 31,				December 31,				September 30,
		2020				2020				2019				2019				2019				2020				2020				2019				2019
		(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks		$	88,577			$	169,827			$	76,254			$	91,671			$	87,919			$	-			$	-			$	-			$	11,031
Federal funds sold and interest-bearing deposits			142,900				206,708				157,691				197,263				205,497				-				-				-				2,415
Securities			748,883				684,571				611,341				555,409				643,803				-				-				-				66,009
Net loans/leases			4,079,432				3,662,435				3,654,204				3,574,154				3,869,415				-				-				-				362,011
Intangibles			13,872				14,421				14,970				15,529				16,089				-				-				-				-
Goodwill			74,248				74,248				74,748				77,748				77,748				-				-				-				-
Derivatives			225,164				195,973				87,827				104,388				65,922				-				-				-				-
Other assets			220,920				213,134				220,049				210,673				228,459				10,765				10,758				11,966				24,081
Assets held for sale			10,765				10,758				11,966				465,547				-				-				-				-				-
Total assets		$	5,604,761			$	5,232,075			$	4,909,050			$	5,292,382			$	5,194,852			$	10,765			$	10,758			$	11,966			$	465,547
Total deposits		$	4,349,775			$	4,170,478			$	3,911,051			$	3,802,241			$	4,322,510			$	-			$	-			$	-			$	451,546
Total borrowings			376,250				244,399				278,955				320,457				230,953				-				-				-				16,157
Derivatives			233,589				203,744				88,436				109,242				69,556				-				-				-				-
Other liabilities			87,539				71,185				90,254				70,169				67,533				1,588				3,130				5,003				2,827
Liabilities held for sale			1,588				3,130				5,003				470,530				-				-				-				-				-
Total stockholders' equity			556,020				539,139				535,351				519,743				504,300				-				-				-				-
Total liabilities and stockholders' equity		$	5,604,761			$	5,232,075			$	4,909,050			$	5,292,382			$	5,194,852			$	1,588			$	3,130			$	5,003			$	470,530
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial loans		$	1,850,110			$	1,484,979			$	1,507,825			$	1,469,978			$	1,548,657
Commercial real estate loans			1,869,162				1,783,086				1,736,396				1,687,922				1,837,473
Direct financing leases			79,105				83,324				87,869				92,307				101,180
Residential real estate loans			241,069				237,742				239,904				245,667				293,479
Installment and other consumer loans			99,150				106,728				109,352				106,540				120,947
Deferred loan/lease origination costs, net of fees			1,663				8,809				8,859				7,856				8,783
Total loans/leases		$	4,140,259			$	3,704,668			$	3,690,205			$	3,610,270			$	3,910,519
Less allowance for estimated losses on loans/leases			60,827				42,233				36,001				36,116				41,104
Net loans/leases		$	4,079,432			$	3,662,435			$	3,654,204			$	3,574,154			$	3,869,415
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities		$	17,472			$	19,457			$	20,078			$	21,268			$	35,762
Municipal securities			526,192				493,664				447,853				391,329				440,853
Residential mortgage-backed and related securities			145,672				122,853				120,587				123,880				159,228
Asset backed securities			39,797				28,499				16,887				10,957				-
Other securities			19,750				20,098				5,936				7,975				7,960
Total securities		$	748,883			$	684,571			$	611,341			$	555,409			$	643,803
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits		$	1,177,482			$	829,782			$	777,224			$	782,232			$	795,951
Interest-bearing demand deposits			2,488,755				2,440,907				2,407,502				2,245,557				2,505,956
Time deposits			560,982				617,979				571,343				536,352				733,135
Brokered deposits			122,556				281,810				154,982				238,100				287,468
Total deposits		$	4,349,775			$	4,170,478			$	3,911,051			$	3,802,241			$	4,322,510
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances		$	90,000			$	55,000			$	50,000			$	60,000			$	46,433
Overnight FHLB advances (1)			55,000				40,000				109,300				135,800				59,300
FRB borrowings			100,000				30,000				-				-				-
Other short-term borrowings			24,818				13,067				13,423				18,526				19,191
Subordinated notes			68,516				68,455				68,394				68,334				68,274
Junior subordinated debentures			37,916				37,877				37,838				37,797				37,755
Total borrowings		$	376,250			$	244,399			$	278,955			$	320,457			$	230,953

 

(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 0.37%.

 

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		For the Quarter Ended
		June 30,				March 31,				December 31,				September 30,				June 30,
		2020				2020				2019				2019				2019
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income		$	48,650			$	48,982			$	52,977			$	56,817			$	54,181
Interest expense			7,702				11,284				13,058				16,098				16,168
Net interest income			40,948				37,698				39,919				40,719				38,013
Provision for loan/lease losses			19,915				8,367				979				2,012				1,941
Net interest income after provision for loan/lease losses		$	21,033			$	29,331			$	38,940			$	38,707			$	36,072
Trust department fees		$	2,227			$	2,312			$	2,365			$	2,340			$	2,361
Investment advisory and management fees			1,399				1,727				1,589				1,782				1,888
Deposit service fees			1,286				1,477				1,787				1,813				1,658
Gain on sales of residential real estate loans			1,196				652				823				890				489
Gain on sales of government guaranteed portions of loans			-				-				159				519				39
Swap fee income			19,927				6,804				7,409				9,797				7,891
Securities gains (losses), net			65				-				26				(3	)			(52	)
Earnings on bank-owned life insurance			612				329				533				489				412
Debit card fees			775				758				766				886				914
Correspondent banking fees			198				215				194				189				172
Gain on sale of assets and liabilities of subsidiary			-				-				12,286				-				-
Other			941				922				1,868				1,204				1,293
Total noninterest income		$	28,626			$	15,196			$	29,805			$	19,906			$	17,065
Salaries and employee benefits		$	21,304			$	18,519			$	24,220			$	24,215			$	22,749
Occupancy and equipment expense			3,748				4,032				4,019				3,860				3,533
Professional and data processing fees			3,646				3,369				3,570				4,030				3,031
Post-acquisition compensation, transition and integration costs			70				151				1,855				884				708
Disposition costs			(83	)			517				3,325				-				-
FDIC insurance, other insurance and regulatory fees			908				683				523				542				926
Loan/lease expense			339				228				349				221				312
Net cost of (income from) and gains/losses on operations of other real estate			(332	)			13				232				2,078				1,182
Advertising and marketing			552				682				1,670				1,056				1,037
Bank service charges			501				504				516				502				508
Losses on debt extinguishment, net			429				147				288				148				-
Correspondent banking expense			212				216				216				209				206
Intangibles amortization			548				549				560				560				615
Goodwill impairment			-				500				3,000				-				-
Other			1,280				1,305				1,951				1,640				1,753
Total noninterest expense		$	33,122			$	31,415			$	46,294			$	39,945			$	36,560
Net income before income taxes		$	16,537			$	13,112			$	22,451			$	18,668			$	16,577
Federal and state income tax expense			2,798				1,884				6,560				3,573				3,073
Net income		$	13,739			$	11,228			$	15,891			$	15,095			$	13,504
Basic EPS		$	0.87			$	0.71			$	1.01			$	0.96			$	0.86
Diluted EPS		$	0.86			$	0.70			$	0.99			$	0.94			$	0.85
Weighted average common shares outstanding			15,747,056				15,796,796				15,772,703				15,739,430				15,714,588
Weighted average common and common equivalent shares outstanding			15,895,336				16,011,456				16,033,043				15,976,742				15,938,377

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		For the Six Months Ended
		June 30,				June 30,
		2020				2019
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income		$	97,632			$	106,283
Interest expense			18,986				31,362
Net interest income			78,646				74,921
Provision for loan/lease losses			28,282				4,075
Net interest income after provision for loan/lease losses		$	50,364			$	70,846
Trust department fees			4,539			$	4,854
Investment advisory and management fees			3,126				3,624
Deposit service fees			2,763				3,212
Gain on sales of residential real estate loans			1,848				858
Gain on sales of government guaranteed portions of loans			-				70
Swap fee income			26,731				11,089
Securities losses, net			65				(52	)
Earnings on bank-owned life insurance			941				952
Debit card fees			1,533				1,706
Correspondent banking fees			413				388
Other			1,863				2,357
Total noninterest income		$	43,822			$	29,058
Salaries and employee benefits			39,823			$	43,628
Occupancy and equipment expense			7,780				7,227
Professional and data processing fees			7,015				5,781
Post-acquisition compensation, transition and integration costs			221				842
Disposition costs			434				-
FDIC insurance, other insurance and regulatory fees			1,591				1,890
Loan/lease expense			567				526
Net cost of operation of other real estate			(319	)			1,480
Advertising and marketing			1,234				1,822
Bank service charges			1,005				991
Losses on debt extinguishment, net			576				-
Correspondent banking expense			428				410
Intangibles amortization			1,097				1,147
Goodwill impairment			500				-
Other			2,585				3,251
Total noninterest expense		$	64,537			$	68,995
Net income before taxes		$	29,649			$	30,909
Income tax expense			4,682				4,487
Net income		$	24,967			$	26,422
Basic EPS		$	1.58			$	1.68
Diluted EPS		$	1.56			$	1.66
Weighted average common shares outstanding			15,771,926				15,703,967
Weighted average common and common equivalent shares outstanding			15,956,958				15,930,659

 

 

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		As of and for the Quarter Ended																				For the Six Months Ended
		June30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
		2020				2020				2019				2019				2019				2020				2019
		(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding			15,790,611				15,773,736				15,828,098				15,790,462				15,772,939
Book value per common share (1)		$	35.21			$	34.18			$	33.82			$	32.91			$	31.97
Tangible book value per common share (2)		$	29.63			$	28.56			$	28.15			$	27.01			$	26.02
Closing stock price		$	31.18			$	27.07			$	43.86			$	37.98			$	34.87
Market capitalization		$	492,351			$	426,995			$	694,220			$	599,722			$	550,002
Market price / book value			88.55	%			79.20	%			129.69	%			115.40	%			109.06	%
Market price / tangible book value			105.23	%			94.79	%			155.76	%			140.61	%			134.00	%
Earnings per common share (basic) LTM (3)		$	3.55			$	3.54			$	3.65			$	3.49			$	3.10
Price earnings ratio LTM (3)			8.78 x				7.65 x				12.02 x				10.88 x				11.25 x
TCE / TA (4)			8.48	%			8.76	%			9.25	%			8.20	%			8.05	%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance		$	539,139			$	535,351			$	519,743			$	504,300			$	488,407
Net income			13,739				11,228				15,891				15,095				13,504
Other comprehensive income (loss), net of tax			3,622				(3,691	)			(683	)			543				2,243
Common stock cash dividends declared			(945	)			(942	)			(947	)			(944	)			(942	)
Proceeds from issuance of 9,400 shares of common stock as a result of the performance based targets met for  Bates Companies			-				-				399				-				-
Repurchase and cancellation of 100,932 shares of common stock as a result of a share repurchase program			-				(3,780	)
Other (5)			465				973				948				749				1,088
Ending balance		$	556,020			$	539,139			$	535,351			$	519,743			$	504,300
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio			13.74	%			13.54	%			13.33	%			12.22	%			12.04	%
Tier 1 risk-based capital ratio			11.11	%			11.16	%			11.04	%			9.94	%			9.76	%
Tier 1 leverage capital ratio			8.91	%			10.19	%			9.53	%			9.02	%			8.96	%
Common equity tier 1 ratio			10.28	%			10.31	%			10.18	%			9.12	%			8.93	%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)			0.95	%			0.91	%			1.23	%			1.16	%			1.06	%			0.93	%			1.05	%
Return on average total equity (annualized)			10.29	%			8.23	%			11.93	%			11.70	%			10.84	%			9.30	%			10.78	%
Net interest margin			3.14	%			3.40	%			3.36	%			3.37	%			3.25	%			3.26	%			3.25	%
Net interest margin (TEY) (Non-GAAP)(7)			3.27	%			3.56	%			3.51	%			3.52	%			3.40	%			3.40	%			3.40	%
Efficiency ratio (Non-GAAP) (8)			47.61	%			59.39	%			66.40	%			65.89	%			66.38	%			52.70	%			66.35	%
Gross loans and leases / total assets (10)			74.01	%			70.95	%			75.36	%			74.80	%			75.28	%			74.01	%			75.28	%
Gross loans and leases / total deposits (10)			95.18	%			88.83	%			94.35	%			94.95	%			90.47	%			95.18	%			90.47	%
Effective tax rate			16.92	%			14.37	%			29.22	%			19.14	%			18.54	%			15.79	%			14.52	%
Full-time equivalent employees (9)			712				703				697				766				773				712				773
AVERAGE BALANCES
Assets		$	5,800,164			$	4,948,311			$	5,147,754			$	5,217,763			$	5,077,900			$	5,374,224			$	5,023,201
Loans/leases			3,999,523				3,686,410				3,868,435				3,962,464				3,839,674				3,842,967				3,799,645
Deposits			4,732,626				3,954,707				4,227,572				4,302,995				4,271,391				4,343,653				4,191,130
Total stockholders' equity			534,095				545,678				532,756				516,195				498,263				536,775				490,343

 

	(1) Includes accumulated other comprehensive income (loss).
	(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets.
	(3) LTM : Last twelve months.
	(4) TCE / TCA : tangible common equity / total tangible assets.  See GAAP to non-GAAP reconciliations.
	(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
	(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
	(7) TEY : Tax equivalent yield.  See GAAP to Non-GAAP reconciliations.
	(8) See GAAP to Non-GAAP reconciliations.
	(9) Decrease from June 30, 2019 and September 30, 2019 due to sale of subsidiary Rockford Bank & Trust.
	(10) Excludes assets held for sale as of September 30, 2019, Deccember 31, 2019, March 31, 2020 and June 30, 2020.

 

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

ANALYSIS OF NET INTEREST INCOME AND MARGIN (4)

 

		For the Quarter Ended
		June 30, 2020												March 31, 2020												June 30, 2019
		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)
Fed funds sold		$	865			$	1				0.46	%		$	5,324			$	18				1.36	%		$	9,690			$	56				2.32	%
Interest-bearing deposits at financial institutions			533,483				135				0.10	%			128,612				361				1.13	%			182,651				1,168				2.56	%
Securities (1)			697,559				6,536				3.77	%			619,307				6,080				3.95	%			644,999				6,062				3.77	%
Restricted investment securities			21,234				288				5.46	%			21,365				258				4.86	%			21,007				290				5.54	%
Loans (1)			3,999,522				43,417				4.37	%			3,686,410				44,056				4.81	%			3,839,674				48,413				5.06	%
Total earning assets (1)		$	5,252,663			$	50,377				3.86	%		$	4,461,018			$	50,773				4.58	%		$	4,698,021			$	55,989				4.78	%
Interest-bearing deposits		$	2,840,860			$	2,429				0.34	%		$	2,379,635			$	5,328				0.90	%		$	2,461,768			$	8,271				1.35	%
Time deposits			809,233				3,337				1.66	%			785,135				3,879				1.99	%			1,013,391				5,554				2.20	%
Short-term borrowings			25,064				22				0.35	%			19,315				64				1.33	%			16,145				81				2.01	%
Federal Home Loan Bank advances			95,616				347				1.46	%			111,407				449				1.62	%			76,154				601				3.17	%
Other borrowings			-				-				0.00	%			-				-				0.00	%			10,550				92				3.50	%
Subordinated debentures			68,480				994				5.84	%			68,418				994				5.84	%			68,239				993				5.84	%
Junior subordinated debentures			37,891				572				6.07	%			37,853				571				6.07	%			37,731				576				6.12	%
Total interest-bearing liabilities		$	3,877,144			$	7,701				0.80	%		$	3,401,763			$	11,285				1.33	%		$	3,683,978			$	16,168				1.76	%
Net interest income / spread (1)						$	42,676				3.06	%						$	39,488				3.24	%						$	39,821				3.02	%
Net interest margin (2)											3.14	%											3.40	%											3.25	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.27	%											3.56	%											3.40	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.21	%											3.50	%											3.31	%

 

		For the Six Months Ended
		June 30, 2020												June 30, 2019
		Average Balance				Interest Earned or Paid				Average Yield or Cost				Average Balance				Interest Earned or Paid				Average Yield or Cost
		(dollars in thousands)
Fed funds sold		$	3,095			$	18				1.17	%		$	12,713			$	150				2.38	%
Interest-bearing deposits at financial institutions			331,048				495				0.30	%			169,057				2,091				2.49	%
Securities (1)			658,433				12,616				3.85	%			652,727				12,158				3.76	%
Restricted investment securities			21,300				546				5.15	%			21,146				598				5.70	%
Loans (1)			3,842,966				87,474				4.58	%			3,799,645				94,795				5.03	%
Total earning assets (1)		$	4,856,842			$	101,149				4.19	%		$	4,655,288			$	109,792				4.76	%
Interest-bearing deposits		$	2,610,248			$	7,756				0.60	%		$	2,374,939			$	15,445				1.31	%
Time deposits			797,184				7,216				1.82	%			1,012,925				10,859				2.16	%
Short-term borrowings			22,190				86				0.78	%			15,261				152				2.01	%
Federal Home Loan Bank advances			103,512				796				1.55	%			111,755				1,662				3.00	%
Other borrowings			-				-				0.00	%			27,126				539				4.01	%
Subordinated debentures			68,449				1,988				5.84	%			53,438				1,557				5.88	%
Junior subordinated debentures			37,872				1,144				6.07	%			37,709				1,148				6.14	%
Total interest-bearing liabilities		$	3,639,455			$	18,986				1.05	%		$	3,633,153			$	31,362				1.74	%
Net interest income / spread (1)						$	82,163				3.14	%						$	78,430				3.02	%
Net interest margin (2)											3.26	%											3.25	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.40	%											3.40	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.35	%											3.30	%

 

(1)

Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.

(2)

See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.

(3)

TEY : Tax equivalent yield.  See GAAP to Non-GAAP reconciliations.

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		As of
		June 30,				March 31,				December 31,				September 30,				June 30,
		2020				2020				2019				2019				2019
		(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES
Beginning balance		$	42,233			$	36,001			$	36,116			$	41,104			$	41,164
Reclassification of allowance related to held for sale loans			-				-				-				(6,122	)			-
Provision charged to expense (2)			19,915				8,367				979				1,584				1,941
Loans/leases charged off			(1,450	)			(2,335	)			(1,182	)			(741	)			(2,152	)
Recoveries on loans/leases previously charged off			129				200				88				291				151
Ending balance		$	60,827			$	42,233			$	36,001			$	36,116			$	41,104
NONPERFORMING ASSETS
Nonaccrual loans/leases		$	12,099			$	11,628			$	7,902			$	8,231			$	13,148
Accruing loans/leases past due 90 days or more			99				1,419				33				-				58
Troubled debt restructures - accruing			920				545				979				763				1,313
Total nonperforming loans/leases			13,118				13,592				8,914				8,994				14,519
Other real estate owned			157				3,298				4,129				4,248				8,637
Other repossessed assets			25				45				41				-				-
Total nonperforming assets		$	13,300			$	16,935			$	13,084			$	13,242			$	23,156
ASSET QUALITY RATIOS
Nonperforming assets / total assets (3)			0.24	%			0.32	%			0.27	%			0.27	%			0.45	%
Allowance / total loans/leases (1)			1.47	%			1.14	%			0.98	%			1.00	%			1.05	%
Allowance / nonperforming loans/leases (1)			463.69	%			310.72	%			403.87	%			401.56	%			283.10	%
Net charge-offs as a % of average loans/leases			0.03	%			0.06	%			0.03	%			0.01	%			0.05	%

 

(1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios.

(2) Excludes provision related to loans included in assets held for sale of $428 thousand for the quarter ending September 30, 2019.

(3) Excludes assets held for sale.

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		For the Quarter Ended										For the Six Months Ended
		June 30,				March 31,			June 30,			June 30,			June 30,
SELECT FINANCIAL DATA - SUBSIDIARIES		2020				2020			2019			2020			2019
			(dollars in thousands)
TOTAL ASSETS
Quad City Bank and Trust (1)		$	1,984,245			$	1,914,785		$	1,637,115
m2 Lease Funds, LLC			241,114				237,198			234,072
Cedar Rapids Bank and Trust			2,021,043				1,719,773			1,527,521
Community State Bank - Ankeny			903,648				863,903			806,704
Springfield First Community Bank			745,474				708,736			671,644
TOTAL DEPOSITS
Quad City Bank and Trust (1)		$	1,707,970			$	1,678,889		$	1,434,467
Cedar Rapids Bank and Trust			1,351,784				1,247,989			1,283,151
Community State Bank - Ankeny			778,499				743,645			705,777
Springfield First Community Bank			564,710				524,420			471,340
TOTAL LOANS & LEASES
Quad City Bank and Trust (1)		$	1,485,971			$	1,338,915		$	1,273,400
m2 Lease Funds, LLC			239,351				235,144			230,676
Cedar Rapids Bank and Trust			1,380,672				1,159,453			1,100,823
Community State Bank - Ankeny			671,772				634,253			597,486
Springfield First Community Bank			601,843				572,046			515,566
TOTAL LOANS & LEASES / TOTAL DEPOSITS
Quad City Bank and Trust (1)			87	%			80	%		89	%
Cedar Rapids Bank and Trust			102	%			93	%		86	%
Community State Bank - Ankeny			86	%			85	%		85	%
Springfield First Community Bank			107	%			109	%		109	%
TOTAL LOANS & LEASES / TOTAL ASSETS
Quad City Bank and Trust (1)			75	%			70	%		78	%
Cedar Rapids Bank and Trust			68	%			67	%		72	%
Community State Bank - Ankeny			74	%			73	%		74	%
Springfield First Community Bank			81	%			81	%		77	%
ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES
Quad City Bank and Trust (1)			1.51	%			1.17	%		1.06	%
m2 Lease Funds, LLC			1.99	%			1.50	%		1.38	%

Cedar Rapids Bank and Trust (2)			1.62	%			1.35	%		1.19	%
Community State Bank - Ankeny (2)			1.56	%			1.21	%		1.09	%
Springfield First Community Bank (2)			0.94	%			0.56	%		0.37	%
RETURN ON AVERAGE ASSETS
Quad City Bank and Trust (1)			0.68	%			1.33	%		1.22	%		0.95	%			1.20	%
Cedar Rapids Bank and Trust			2.36	%			1.60	%		1.95	%		2.01	%			1.75	%
Community State Bank - Ankeny			0.25	%			0.50	%		1.17	%		0.37	%			1.12	%
Springfield First Community Bank			1.04	%			1.29	%		1.37	%		1.16	%			1.24	%
NET INTEREST MARGIN PERCENTAGE (3)
Quad City Bank and Trust (1)			2.88	%			3.68	%		3.29	%		3.22	%			3.26	%
Cedar Rapids Bank and Trust (5)			3.37	%			3.43	%		3.41	%		3.40	%			3.41	%
Community State Bank - Ankeny (4)			3.77	%			3.91	%		4.08	%		3.84	%			4.06	%
Springfield First Community Bank (6)			3.88	%			3.83	%		4.10	%		3.85	%			4.08	%
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
INTEREST MARGIN, NET
Cedar Rapids Bank and Trust		$	62			$	49		$	71		$	111			$	215
Community State Bank - Ankeny			72				64			76		$	136				134
Springfield First Community Bank			641				552			971		$	1,193				1,881
QCR Holdings, Inc. (7)			(39	)			(40	)		(42	)	$	(79	)			(85)

 

(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)	Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio.
(3)	Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
(4)	Community State Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin would have been 3.71% for the quarter ended June 30, 2020, 3.86% for the quarter ended March 31, 2020 and 4.01% for the quarter ended June 30, 2019.
(5)	Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin would have been 3.35% for the quarter ended June 30, 2020, 3.42% for the quarter ended March 31, 2020 and 3.39% for the quarter ended June 30, 2019.
(6)	Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments.  Excluding those adjustments, net interest margin would have been 4.29% for the quarter ended June 30, 2020, 4.52% for the quarter ended March 31, 2020 and 3.39% for the quarter ended June 30, 2019.
(7)	Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.

 

 

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

		As of
		June 30,				March 31,				December 31,				September 30,				June 30,
GAAP TO NON-GAAP RECONCILIATIONS		2020				2020				2019				2019				2019
		(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)		$	556,020			$	539,139			$	535,351			$	519,743			$	504,300
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible common equity (non-GAAP)		$	467,900			$	450,470			$	445,634			$	426,466			$	410,463
Total assets (GAAP)		$	5,604,761			$	5,232,075			$	4,909,050			$	5,292,382			$	5,194,852
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible assets (non-GAAP)		$	5,516,641			$	5,143,406			$	4,819,333			$	5,199,105			$	5,101,015
Tangible common equity to tangible assets ratio (non-GAAP)			8.48	%			8.76	%			9.25	%			8.20	%			8.05	%
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1)
Stockholder's equity (GAAP)		$	556,020			$	539,139			$	535,351			$	519,743			$	504,300
Less: PPP loan interest income (post-tax) (2)			2,085				-				-				-				-
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible common equity, excluding PPP loan income (non-GAAP)		$	465,815			$	450,470			$	445,634			$	426,466			$	410,463
Total assets (GAAP)		$	5,604,761			$	5,232,075			$	4,909,050			$	5,292,382			$	5,194,852
Less: PPP loans			358,052				-				-				-				-
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible assets, excluding PPP loans (non-GAAP)		$	5,158,589			$	5,143,406			$	4,819,333			$	5,199,105			$	5,101,015
Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP)			9.03	%			8.76	%			9.25	%			8.20	%			8.05	%

 

	(1)	This ratio is a non-GAAP financial measure.  The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity.  In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures.
	(2)	PPP interest income (post-tax) is calculated using an estimated effective tax rate of 21%.

  

 

QCR Holdings, Inc.

Consolidated Financial Highlights

(Unaudited)

 

GAAP TO NON-GAAP RECONCILIATIONS		For the Quarter Ended																				For the Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
ADJUSTED NET INCOME (1)		2020				2020				2019				2019				2019				2020				2019
		(dollars in thousands, except per share data)
Net income (GAAP)		$	13,739			$	11,228			$	15,891			$	15,095			$	13,504			$	24,967			$	26,422
Less non-core items (post-tax) (2):
Income:
Securities gains(losses), net			51				-				21			$	(2	)		$	(41	)		$	51			$	(41	)
Gain on sale of assets and liabilities of subsidiary			-				-				8,539				-				-				-				-
Total non-core income (non-GAAP)		$	51			$	-			$	8,560			$	(2	)		$	(41	)		$	51			$	(41	)
Expense:
Losses on debt extinguishment, net		$	339			$	116			$	228			$	117			$	-			$	455			$	-
Goodwill impairment			-				500				3,000				-				-				500				-
Disposition costs			(66	)			408				2,627				-				-				343			$	-
Tax expense on expected liquidation of RB&T BOLI			-				-				790				-				-				-				-
Post-acquisition compensation, transition and integration costs			55				119				1,465				698				559				175				665
Total non-core expense (non-GAAP)		$	329			$	1,143			$	8,110			$	815			$	559			$	1,472			$	665
Adjusted net income  (non-GAAP) (1)		$	14,016			$	12,372			$	15,441			$	15,912			$	14,104			$	26,388			$	27,128
PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)
Net income (GAAP)		$	13,739			$	11,228			$	15,891			$	15,095			$	13,504			$	24,967			$	26,422
Less: Non-core income not tax-effected			65				-				12,313				(3	)			(52	)			65				(52	)
Plus: Non-core expense not tax-effected			416				1,315				9,258				1,032				708				1,731				842
Provision expense			19,915				8,367				979				2,012				1,941				28,282				4,075
Federal and state income tax expense			2,798				1,884				6,560				3,573				3,073				4,682				4,487
Pre-provision/pre-tax adjusted income  (non-GAAP) (1)		$	36,803			$	22,794			$	20,375			$	21,714			$	19,277			$	59,597			$	35,878
PRE-PROVISION/PRE-TAX ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)
Pre-provision/pre-tax adjusted income  (non-GAAP)		$	36,803			$	22,794			$	20,375			$	21,714			$	19,277			$	59,597			$	35,878
Average Assets		$	5,800,164			$	4,948,311			$	5,147,754			$	5,217,763			$	5,077,900			$	5,374,224			$	5,023,201
Pre-provision/pre-tax adjusted return on average assets (non-GAAP)			2.54	%			1.84	%			1.58	%			1.66	%			1.52	%			2.22	%			1.43	%
ADJUSTED EARNINGS PER COMMON SHARE (1)
Adjusted net income (non-GAAP) (from above)		$	14,016			$	12,372			$	15,441			$	15,912			$	14,104			$	26,388			$	27,128
Weighted average common shares outstanding			15,747,056				15,796,796				15,772,703				15,739,430				15,714,588				15,771,926				15,703,967
Weighted average common and common equivalent shares outstanding			15,895,336				16,011,456				16,033,043				15,976,742				15,938,377				15,956,958				15,930,659
Adjusted earnings per common share (non-GAAP):
Basic		$	0.89			$	0.78			$	0.98			$	1.01			$	0.90			$	1.67			$	1.73
Diluted		$	0.88			$	0.77			$	0.96			$	1.00			$	0.88			$	1.65			$	1.70
ADJUSTED RETURN ON AVERAGE ASSETS (1)
Adjusted net income (non-GAAP) (from above)		$	14,016			$	12,372			$	15,441			$	15,912			$	14,104			$	26,388			$	27,128
Average Assets		$	5,800,164			$	4,948,311			$	5,147,754			$	5,217,763			$	5,077,900			$	5,374,224			$	5,023,201
Adjusted return on average assets (annualized) (non-GAAP)			0.97	%			1.00	%			1.20	%			1.22	%			1.11	%			0.98	%			1.08	%
NET INTEREST MARGIN (TEY) (4)
Net interest income (GAAP)		$	40,948			$	37,698			$	39,919			$	40,719			$	38,013			$	78,646			$	74,921
Plus: Tax equivalent adjustment (3)			1,728				1,790				1,783				1,763				1,808				3,517				3,509
Net interest income - tax equivalent (Non-GAAP)		$	42,676			$	39,488			$	41,702			$	42,482			$	39,821			$	82,163			$	78,430
Less: Acquisition accounting net accretion			736				625				931				1,268				1,076				1,361				2,145
Adjusted net interest income		$	41,940			$	38,863			$	40,771			$	41,214			$	38,745			$	80,802			$	76,285
Average earning assets		$	5,252,663			$	4,461,018			$	4,711,310			$	4,791,274			$	4,698,021			$	4,856,842			$	4,655,288
Net interest margin (GAAP)			3.14	%			3.40	%			3.36	%			3.37	%			3.25	%			3.26	%			3.25	%
Net interest margin (TEY) (Non-GAAP)			3.27	%			3.56	%			3.51	%			3.52	%			3.40	%			3.40	%			3.40	%
Adjusted net interest margin (TEY) (Non-GAAP)			3.21	%			3.50	%			3.43	%			3.41	%			3.31	%			3.35	%			3.30	%
EFFICIENCY RATIO (5)
Noninterest expense (GAAP)		$	33,122			$	31,415			$	46,294			$	39,945			$	36,560			$	64,537			$	68,995
Net interest income (GAAP)		$	40,948			$	37,698			$	39,919			$	40,719			$	38,013			$	78,646			$	74,921
Noninterest income (GAAP)			28,626				15,196				29,805				19,906				17,065				43,822				29,058
Total income		$	69,574			$	52,894			$	69,724			$	60,625			$	55,078			$	122,468			$	103,979
Efficiency ratio (noninterest expense/total income) (Non-GAAP)			47.61	%			59.39	%			66.40	%			65.89	%			66.38	%			52.70	%			66.35	%
ALLOWANCE FOR LOAN AND LEASE LOSSES TO TOTAL LOANS AND LEASES,  EXCLUDING PPP LOANS (6)
Allowance for loan and lease losses		$	60,827			$	42,233			$	36,001			$	36,116			$	41,104			$	60,827			$	41,104
Total loans and leases		$	4,140,259			$	3,704,668			$	3,690,205			$	3,610,270			$	3,910,519			$	4,140,259			$	3,910,519
Less:  PPP loans			358,052				-				-				-				-				358,052				-
Total loans and leases, excluding PPP loans		$	3,782,207			$	3,704,668			$	3,690,205			$	3,610,270			$	3,910,519			$	3,782,207			$	3,910,519
Allowance for loan and lease losses to total loans and leases, excluding PPP loans			1.61	%			1.14	%			0.98	%			1.00	%			1.05	%			1.61	%			1.05	%
LOAN GROWTH ANNUALIZED, EXCLUDING PPP LOANS
Total loans and leases		$	4,140,259			$	3,704,668			$	3,690,205			$	3,610,270			$	3,910,519			$	4,140,259			$	3,910,519
Less:  PPP loans			358,052				-				-				-				-				358,052				-
Total loans and leases, excluding PPP loans		$	3,782,207			$	3,704,668			$	3,690,205			$	3,610,270			$	3,910,519			$	3,782,207			$	3,910,519
Loan growth annualized, excluding PPP loans			8.37	%			1.57	%			8.86	%			-30.71	%			13.57	%			4.99	%			9.52	%

 

	(1)	Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are non-GAAP financial measures.  The Company's management believes that these measurements are important to investors as they exclude non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is the most directly comparable GAAP financial measure.
	(2)	Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain on sale of subsidiary which has an estimated effective tax rate of 30.5%.
	(3)	Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21%.
	(4)	Net interest margin (TEY) is a non-GAAP financial measure.  The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities.  It is also standard industry practice to measure net interest margin using tax-equivalent measures.   In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure.  In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
	(5)	Efficiency ratio is a non-GAAP measure.  The Company's management utilizes this ratio to compare to industry peers.  The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.
	(6)	Allowance for loan and lease losses to total loans and leases, excluding PPP loans is a non-GAAP measure.  The Company's management utilizes this ratio to remove the from the allowance calculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans have no allowance for loan and lease loss allocation.