• QCR Holdings, Inc. Announces Net Income of $27.2 Million for the First Quarter of 2023

    Source: Nasdaq GlobeNewswire / 26 Apr 2023 16:05:01   America/New_York

    First Quarter 2023 Highlights

    • Net income of $27.2 million, or $1.60 per diluted share
    • Adjusted net income (non-GAAP) of $28.0 million, or $1.65 per diluted share
    • Capital Markets Revenue from Swap Fees grew $5.7 million, or 50%, to $17.0 million
    • Noninterest expenses well controlled and down 2% on a linked-quarter basis
    • Annualized deposit growth, excluding brokered deposits, of 1.4%
    • Uninsured and uncollateralized deposits improved to 23.8% of total deposits
    • Tangible book value (non-GAAP) per share increased 5.1%, or 20.5% annualized
    • TCE ratio grew 28 bps, or 4% to 8.21%

    MOLINE, Ill., April 26, 2023 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $27.2 million and diluted earnings per share (“EPS”) of $1.60 for the first quarter of 2023, compared to net income of $30.9 million and diluted EPS of $1.81 for the fourth quarter of 2022.

    “In the first quarter, we delivered strong results, highlighted by increased fee income and carefully managed expenses,” said Larry J. Helling, Chief Executive Officer. “In response to the current banking environment, we grew our deposits and significantly increased our balance sheet liquidity. In addition, we continued to improve upon our already strong capital levels.”

    Core Deposit Growth and Strengthened Liquidity

    During the first quarter of 2023, the Company’s deposits, excluding brokered deposits, grew $19.9 million to a total of $5.9 billion, or 1.4% on an annualized basis. The Company also added short-term brokered deposits of $497.5 million during the quarter to intentionally bolster on-balance sheet liquidity and fully eliminate overnight borrowings from the FHLB. Total uninsured and uncollateralized deposits improved during the first quarter and represented 23.8% of total deposits. The Company maintained approximately $1.5 billion of immediately available liquidity at quarter-end, which was more than the total amount of our uninsured or uncollateralized deposits.

    “We have built a strong and diversified deposit franchise over the past 30 years and our first-quarter deposit activity was a reflection of the importance of that franchise,” added Mr. Helling. “We are pleased with our level of uninsured and uncollateralized deposits and our strong liquidity position.”

    Net Income of $27.2 Million and Diluted EPS of $1.60

    Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the first quarter of 2023 were $28.0 million and $1.65, respectively. For the fourth quarter of 2022, adjusted net income (non-GAAP) was $31.1 million and adjusted diluted EPS (non-GAAP) was $1.83. For the first quarter of 2022, net income and diluted EPS were $23.6 million and $1.49, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $24.4 million and $1.54, respectively. During the first quarter, the Company grew pre-tax/pre-provision adjusted income (non-GAAP) by $2.0 million or 6.4% when excluding the impact of loan discount accretion.

      For the Quarter Ended
      March 31,December 31,March 31,
    $ in millions (except per share data) 202320222022
    Net Income $27.2$30.9$23.6
    Diluted EPS $1.60$1.81$1.49
    Adjusted Net Income (non-GAAP)* $28.0$31.1$24.4
    Adjusted Diluted EPS (non-GAAP)* $1.65$1.83$1.54
            

    *Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

    Net Interest Income of $56.8 Million

    Net interest income for the first quarter of 2023 totaled $56.8 million, compared to $65.2 million for the fourth quarter of 2022 and $45.7 million for the first quarter of 2022. Adjusted net interest income (non-GAAP) during the quarter was $62.0 million, a decrease of $3.0 million from the prior quarter. Acquisition-related net accretion totaled $828 thousand for the first quarter of 2023, compared to $5.7 million in the fourth quarter of 2022.

    In the first quarter of 2023, net interest margin (“NIM”) was 3.18% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.52%, compared to 3.62% and 3.93% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.47% declined by 14 basis points from 3.61% in the fourth quarter.  

    “Our adjusted tax-equivalent NIM declined by 14 basis points during the first quarter,” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “With heavy deposit competition and the later stages of the rate cycle, our deposit betas accelerated in the first quarter. We continue to see deposit mix shift from noninterest bearing and lower beta deposits to higher beta deposits, which has shifted our interest rate risk position from asset sensitive to moderately liability sensitive.”  

    Noninterest Income Jumps 22% to $25.8 Million

    Noninterest income for the first quarter of 2023 totaled $25.8 million, up 22% from $21.2 million for the fourth quarter of 2022. The Company generated $17.0 million of capital markets revenue from swap fees in the quarter, an increase of $5.7 million, or 50% from the fourth quarter. Wealth management revenue of $3.8 million for the quarter also grew more than 6% from the prior quarter.

    “Capital markets revenue was $17.0 million in the first quarter, up significantly from the fourth quarter and well ahead of our guidance range,” added Mr. Gipple. “Many of the headwinds that some of our clients had been experiencing in recent quarters have begun to subside and several previously delayed projects funded during the first quarter. Our pipeline for these loans remains healthy and, as a result, we are increasing our capital markets revenue guidance to a range of between $40 and $50 million for the next twelve months.”

    Noninterest Expenses Decline 2% to $48.8 Million

    Noninterest expense for the first quarter of 2023 remains well-controlled and totaled $48.8 million, down 2% from $49.7 million for the fourth quarter of 2022 and compared to $38.3 million for the first quarter of 2022. The linked-quarter decline was primarily due to lower compensation expense. In addition, we experienced lower professional and data processing fees, insurance and regulatory fees, and advertising and marketing expenses.   Noninterest expenses declined 2% during the first quarter despite the impact of annual merit increases effective at the beginning of the quarter and continued inflationary pressures.   

    Annualized Loan and Lease Growth of 3.3% for the Quarter

    During the first quarter of 2023, the Company’s loans and leases grew $51.2 million to a total of $6.2 billion, or 3.3% on an annualized basis. “Our loan growth during the quarter was driven primarily by strength in both our traditional and tax credit lending business,” added Mr. Helling. “We experienced more modest loan demand from our client base due to the macro headwinds being created by the higher interest rate environment. Therefore, given the ongoing economic uncertainty, we are now guiding to loan growth in the second quarter in the range of zero to 5%, on an annualized basis net of the planned loan securitization.”

    Asset Quality Remains Excellent

    “Our asset quality remains excellent as the ratio of nonperforming assets to total assets was 0.29% at quarter-end and compares favorably to historical averages and current peer metrics. We remain cautiously optimistic about the relative economic resiliency of our markets and we are not seeing any meaningful signs of weakness across our footprint,” said Mr. Helling.

    Nonperforming assets (“NPAs”) totaled $23.0 million at the end of the first quarter, up from $8.9 million in the fourth quarter of 2022. The increase in NPAs during the quarter was the result of a single credit relationship which was moved to nonaccrual status. In addition, the Company’s criticized loans and classified loans to total loans and leases on March 31, 2023, increased modestly to 3.16% and 1.14%, respectively, as compared to 2.68% and 1.08% as of December 31, 2022.

    The Company recorded a total provision for credit losses of $3.9 million during the quarter which included $2.5 million of provision on loans/leases. As of March 31, 2023, the ACL to total loans/leases held for investment was 1.43%, consistent with the prior quarter.

    Continued Strong Capital Levels

    As of March 31, 2023, the Company’s total risk-based capital ratio was 14.50%, the common equity tier 1 ratio was 9.48% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.21%. By comparison, these respective ratios were 14.28%, 9.29% and 7.93% as of December 31, 2022.

    During the first quarter, the Company purchased and retired 152,500 shares of its common stock at an average price of $50.61 per share as the Company executed purchases under the share repurchase plan announced during the second quarter of 2022. The 2022 share repurchase plan authorized approximately 1,500,000 shares to be repurchased and the Company has approximately 778,000 shares remaining under the program.

    The Company’s tangible book value per share (non-GAAP) increased by 5.1% during the first quarter. Accumulated other comprehensive income (“AOCI”) improved $9.3 million during the quarter due to an increase in the value of the Company’s available for sale securities portfolio and certain derivatives resulting from the change in interest rates during the first quarter. While the repurchase of shares modestly impacted the Company’s tangible common equity, the change in AOCI and solid earnings more than offset this impact, which led to the sharp increase in tangible book value per share (non-GAAP).

    Focus on Three Strategic Long-Term Initiatives

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

    • Generate 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 annual operating expense growth to 5% per year.

    Conference Call Details

    The Company will host an earnings call/webcast tomorrow, April 27, 2023, 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 May 4, 2023. The replay access information is 877-344-7529 (international 412-317-0088); access code 6451503. A webcast of the teleconference can be accessed on 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, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank on April 1, 2022, with the combined entity operating under the Guaranty Bank name. 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 offers equipment loans and leases to businesses through its wholly owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of March 31, 2023, the Company had $8.0 billion in assets, $6.2 billion in loans and $6.5 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,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, 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 effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof (including the Russian invasion of Ukraine), 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, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to the recent failures of other banks; (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, including from non-bank competitors such as credit unions and “fintech” companies, 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; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xixi) the ability of the Company to manage the risks associated with the foregoing as well as anticipated.   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.

    Contact:
    Todd A. Gipple                                
    President                                
    Chief Operating Officer                        
    Chief Financial Officer                        
    (309) 743-7745                                
    tgipple@qcrh.com






    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
     As of 
     March 31,December 31,September 30,June 30,March 31, 
      2023  2022  2022  2022  2022  
           
     (dollars in thousands) 
           
    CONDENSED BALANCE SHEET      
           
    Cash and due from banks$64,295 $59,723 $86,282 $92,379 $50,540  
    Federal funds sold and interest-bearing deposits 253,997  124,270  71,043  56,532  66,390  
    Securities, net of allowance for credit losses 877,446  928,102  879,450  879,918  823,311  
    Loans receivable held for sale (1) 140,633  1,480  3,054  1,186  2,968  
    Loans/leases receivable held for investment 6,049,389  6,137,391  6,005,556  5,796,717  4,824,900  
    Allowance for credit losses (86,573) (87,706) (90,489) (92,425) (74,786) 
    Intangibles 15,993  16,759  17,546  18,333  8,856  
    Goodwill 138,474  137,607  137,607  137,607  74,066  
    Derivatives 130,350  177,631  185,037  97,455  107,326  
    Other assets 452,900  453,580  434,963  405,239  292,248  
    Total assets$8,036,904 $7,948,837 $7,730,049 $7,392,941 $6,175,819  
           
    Total deposits$6,501,663 $5,984,217 $5,941,035 $5,820,657 $4,839,689  
    Total borrowings 417,480  825,894  701,491  583,166  443,270  
    Derivatives 150,401  200,701  209,479  113,305  116,193  
    Other liabilities 165,866  165,301  140,972  132,675  108,743  
    Total stockholders' equity 801,494  772,724  737,072  743,138  667,924  
    Total liabilities and stockholders' equity$8,036,904 $7,948,837 $7,730,049 $7,392,941 $6,175,819  
           
    ANALYSIS OF LOAN PORTFOLIO      
    Loan/lease mix:      
    Commercial and industrial - revolving$307,612 $296,869 $332,996 $322,258 $263,441  
    Commercial and industrial - other 1,420,331  1,451,693  1,415,996  1,403,689  1,374,221  
    Total commercial and industrial 1,727,943  1,748,562  1,748,992  1,725,947  1,637,662  
    Commercial real estate, owner occupied 616,922  629,367  627,558  628,565  439,257  
    Commercial real estate, non-owner occupied 982,716  963,239  920,876  889,530  679,898  
    Construction and land development* 1,208,185  1,192,061  1,149,503  1,080,372  863,116  
    Multi-family* 969,870  963,803  933,118  860,742  711,682  
    Direct financing leases 35,373  31,889  33,503  40,050  43,330  
    1-4 family real estate 532,491  499,529  487,508  473,141  379,613  
    Consumer 116,522  110,421  107,552  99,556  73,310  
    Total loans/leases$6,190,022 $6,138,871 $6,008,610 $5,797,903 $4,827,868  
    Less allowance for credit losses 86,573  87,706  90,489  92,425  74,786  
    Net loans/leases$6,103,449 $6,051,165 $5,918,121 $5,705,478 $4,753,082  
           
    *The LIHTC lending business is a significant part of the Company's Construction and Multi-family loans. For the quarter ended March 31, 2023, the  LIHTC portion of the Construction loans was $760 million, or 63%, and the LIHTC portion of the Multi-family loans was $742 million, or 76%.
           
    ANALYSIS OF SECURITIES PORTFOLIO      
    Securities mix:      
    U.S. government sponsored agency securities$19,320 $16,981 $20,527 $20,448 $21,380  
    Municipal securities 731,689  779,450  724,204  710,638  667,245  
    Residential mortgage-backed and related securities 63,104  66,215  68,844  81,247  86,381  
    Asset backed securities 17,967  18,728  19,630  19,956  23,233  
    Other securities 46,535  46,908  46,443  47,827  25,270  
    Total securities$878,615 $928,282 $879,648 $880,116 $823,509  
    Less allowance for credit losses 1,169  180  198  198  198  
    Net securities$877,446 $928,102 $879,450 $879,918 $823,311  
           
    ANALYSIS OF DEPOSITS      
    Deposit mix:      
    Noninterest-bearing demand deposits$1,189,858 $1,262,981 $1,315,555 $1,514,005 $1,275,493  
    Interest-bearing demand deposits 4,033,193  3,875,497  3,904,303  3,758,566  3,181,685  
    Time deposits 679,946  744,593  672,133  540,074  382,268  
    Brokered deposits 598,666  101,146  49,044  8,012  243  
    Total deposits$6,501,663 $5,984,217 $5,941,035 $5,820,657 $4,839,689  
           
    ANALYSIS OF BORROWINGS      
    Borrowings mix:      
    Term FHLB advances$135,000 $- $- $- $-  
    Overnight FHLB advances -  415,000  335,000  400,000  290,000  
    Other short-term borrowings 1,100  129,630  85,180  1,070  1,190  
    Subordinated notes 232,746  232,662  232,743  133,562  113,890  
    Junior subordinated debentures 48,634  48,602  48,568  48,534  38,190  
    Total borrowings$417,480 $825,894 $701,491 $583,166 $443,270  
           
    (1) Loans with a fair value of $139.2 million, have been identified for securitization and are included in LHFS at March 31, 2023. 
           
           



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
            
       For the Quarter Ended
       March 31,December 31,September 30,June 30,March 31,
        2023  2022  2022 2022 2022 
            
       (dollars in thousands, except per share data)
            
    INCOME STATEMENT      
    Interest income $94,217 $94,037 $79,267$68,205$51,062 
    Interest expense  37,407  28,819  18,498 8,805 5,329 
    Net interest income  56,810  65,218  60,769 59,400 45,733 
    Provision for credit losses (1)  3,928  -  - 11,200 (2,916)
    Net interest income after provision for credit losses $52,882 $65,218 $60,769$48,200$48,649 
            
            
    Trust department fees $2,906 $2,644 $2,537$2,497$2,963 
    Investment advisory and management fees  879  918  921 983 1,036 
    Deposit service fees  2,028  2,142  2,214 2,223 1,555 
    Gain on sales of residential real estate loans  312  468  641 809 493 
    Gain on sales of government guaranteed portions of loans  30  50  50 - 19 
    Capital markets revenue  17,023  11,338  10,545 13,004 6,422 
    Securities losses, net  (463) -  - - - 
    Earnings on bank-owned life insurance  707  755  605 350 346 
    Debit card fees  1,466  1,500  1,453 1,499 1,007 
    Correspondent banking fees  391  257  189 244 277 
    Loan related fee income  651  614  652 682 480 
    Fair value gain (loss) on derivatives  (427) (267) 904 432 906 
    Other   339  800  384 59 129 
    Total noninterest income $25,842 $21,219 $21,095$22,782$15,633 
            
            
    Salaries and employee benefits $32,003 $32,594 $29,175$29,972$23,627 
    Occupancy and equipment expense  5,914  6,027  6,033 5,978 3,937 
    Professional and data processing fees  3,514  3,769  4,477 4,365 3,671 
    Acquisition costs  -  (424) 315 1,973 1,851 
    Post-acquisition compensation, transition and integration costs  207  668  62 4,796 - 
    FDIC insurance, other insurance and regulatory fees  1,374  1,605  1,497 1,394 1,310 
    Loan/lease expense  556  411  390 761 267 
    Net cost of (income from) and gains/losses on operations of other real estate  (67) (117) 19 59 (1)
    Advertising and marketing  1,237  1,562  1,437 1,198 761 
    Communication and data connectivity  665  587  639 584 403 
    Supplies   305  337  289 237 246 
    Bank service charges  605  563  568 610 541 
    Correspondent banking expense  210  210  218 213 199 
    Intangibles amortization  766  787  787 787 493 
    Payment card processing  545  599  477 626 262 
    Trust expense  214  166  227 195 187 
    Other   737  353  1,136 500 571 
    Total noninterest expense $48,785 $49,697 $47,746$54,248$38,325 
            
    Net income before income taxes $29,939 $36,740 $34,118$16,734$25,957 
    Federal and state income tax expense  2,782  5,834  4,824 1,492 2,333 
    Net income  $27,157 $30,906 $29,294$15,242$23,624 
            
    Basic EPS $1.62 $1.83 $1.73$0.88$1.51 
    Diluted EPS $1.60 $1.81 $1.71$0.87$1.49 
            
            
    Weighted average common shares outstanding  16,776,289  16,855,973  16,900,968 17,345,324 15,625,112 
    Weighted average common and common equivalent shares outstanding  16,942,132  17,047,976  17,110,691 17,549,107 15,852,256 
            
    (1) Provision for credit losses for the quarter ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures.
           


    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
           
     As of and for the Quarter Ended 
     March 31,December 31,September 30,June 30,March 31, 
      2023  2022  2022  2022  2022  
           
     (dollars in thousands, except per share data)
           
    COMMON SHARE DATA      
    Common shares outstanding 16,713,775  16,795,942  16,885,485  17,064,347  15,579,605  
    Book value per common share (1)$47.95 $46.01 $43.65 $43.55 $42.87  
    Tangible book value per common share (Non-GAAP) (2)$38.71 $36.82 $34.46 $34.41 $37.55  
    Closing stock price$43.91 $49.64 $50.94 $53.99 $56.59  
    Market capitalization$733,902 $833,751 $860,147 $921,304 $881,650  
    Market price / book value 91.57% 107.90% 116.70% 123.97% 132.00% 
    Market price / tangible book value 113.43% 134.83% 147.81% 156.90% 150.71% 
    Earnings per common share (basic) LTM (3)$6.06 $5.95 $5.86 $6.14 $6.68  
    Price earnings ratio LTM (3) 7.24x 8.35x 8.70x 8.79x 8.47x 
    TCE / TA (Non-GAAP) (4) 8.21% 7.93% 7.68% 8.11% 9.60% 
           
           
    CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY  
    Beginning balance$772,724 $737,072 $743,138 $667,924 $677,010  
    Net income 27,157  30,906  29,294  15,242  23,624  
    Other comprehensive income (loss), net of tax 9,325  9,959  (24,783) (24,286) (27,340) 
    Common stock cash dividends declared (1,010) (1,013) (1,012) (1,059) (938) 
    Issuance of 2,071,291 shares of common stock as a result of the acquisition of Guaranty Federal Bancshares 
    -    		  
    -    		  
    -    		  
    117,214    		  
    -    		  
    Repurchase and cancellation of shares of common stock as a result of a share repurchase program (7,719) (5,037) (10,485) (33,016) (4,416) 
    Other (5) 1,017  837  920  1,119  (16) 
    Ending balance$ 801,494 $ 772,724 $ 737,072 $ 743,138 $ 667,924  
           
           
    REGULATORY CAPITAL RATIOS (6):      
    Total risk-based capital ratio 14.50% 14.28% 14.38% 13.40% 14.50% 
    Tier 1 risk-based capital ratio 10.13% 9.95% 9.88% 10.18% 11.27% 
    Tier 1 leverage capital ratio 9.73% 9.61% 9.56% 9.61% 10.78% 
    Common equity tier 1 ratio 9.48% 9.29% 9.21% 9.46% 10.61% 
           
           
    KEY PERFORMANCE RATIOS AND OTHER METRICS       
    Return on average assets (annualized) 1.37% 1.58% 1.53% 0.83% 1.55% 
    Return on average total equity (annualized) 13.67% 16.32% 15.39% 7.74% 13.81% 
    Net interest margin 3.18% 3.62% 3.46% 3.53% 3.30% 
    Net interest margin (TEY) (Non-GAAP)(7) 3.52% 3.93% 3.71% 3.74% 3.50% 
    Efficiency ratio (Non-GAAP) (8) 59.02% 57.50% 58.32% 66.01% 62.45% 
    Gross loans and leases / total assets 77.02% 77.23% 77.73% 78.42% 78.17% 
    Gross loans and leases / total deposits 95.21% 102.58% 101.14% 99.61% 99.76% 
    Effective tax rate 9.29% 15.88% 14.14% 8.92% 8.99% 
    Full-time equivalent employees (9) 969  973  956  968  749  
           
           
    AVERAGE BALANCES       
    Assets$7,906,830 $7,800,229 $7,652,463 $7,324,470 $6,115,127  
    Loans/leases 6,165,115  6,043,359  5,916,100  5,711,471  4,727,478  
    Deposits 6,179,644  6,029,455  5,891,198  5,867,444  4,903,354  
    Total stockholders' equity 794,685  757,419  761,428  788,204  684,126  
           
           
           
    (1) Includes accumulated other comprehensive income (loss).     
    (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP).  
    (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) Increase at June 30, 2022 due to the acquisition of Guaranty Bank.    
           



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
                 
    ANALYSIS OF NET INTEREST INCOME AND MARGIN            
                 
      For the Quarter Ended
      March 31, 2023 December 31, 2022 March 31, 2022
      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 $19,275$2344.93% $30,754$2963.82% $4,564$20.15%
    Interest-bearing deposits at financial institutions 73,584 8214.53%  62,581 5043.20%  69,328 350.20%
    Securities (1)  951,865 10,1574.27%  971,930 10,0744.14%  802,260 7,6823.83%
    Restricted investment securities 37,766 5135.43%  39,954 6286.15%  22,183 2815.06%
    Loans (1)  6,165,115 88,5485.82%  6,043,359 88,0885.78%  4,727,478 45,9953.95%
    Total earning assets (1)$7,247,605$100,2735.60% $7,148,578$99,5905.53% $5,625,813$53,9953.88%
                 
    Interest-bearing deposits$4,067,405$23,7762.37% $3,968,081$17,6551.77% $3,228,083$2,3380.29%
    Time deposits  869,912 6,0032.80%  746,819 3,4761.85%  398,897 7990.81%
    Short-term borrowings 7,573 995.28%  19,591 2114.28%  1,951 -0.05%
    Federal Home Loan Bank advances 296,333 3,5214.75%  351,033 3,5073.91%  85,778 820.38%
    Subordinated debentures 232,679 3,3115.69%  232,689 3,3125.69%  113,868 1,5545.46%
    Junior subordinated debentures 48,613 6965.72%  48,583 6575.29%  38,171 5565.83%
    Total interest-bearing liabilities$5,522,515$37,4062.74% $5,366,796$28,8182.13% $3,866,748$5,3290.56%
                 
    Net interest income (1) $62,867   $70,772   $48,666 
    Net interest margin (2)  3.18%   3.62%   3.30%
    Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.52%   3.93%   3.50%
    Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.47%   3.61%   3.50%
                 
                 
                 
                 
    (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 Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
          
     As of
     March 31,December 31,September 30,June 30,March 31,
      2023  2022  2022  2022  2022 
          
     (dollars in thousands, except per share data)
          
    ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES     
    Beginning balance$87,706 $90,489 $92,425 $74,786 $78,721 
    Initial ACL recorded for acquired PCD loans -  -  -  5,902  - 
    Reduction of ACL for writedown of LHFS to fair value (1) (1,709) -  -  -  - 
    Credit loss expense (2) 2,458  1,013  331  12,141  (3,849)
    Loans/leases charged off (2,275) (3,960) (2,489) (620) (456)
    Recoveries on loans/leases previously charged off 393  164  222  216  370 
    Ending balance$86,573 $87,706 $90,489 $92,425 $74,786 
          
          
    NONPERFORMING ASSETS      
    Nonaccrual loans/leases (3)$22,947 $8,765 $17,511 $23,574 $2,744 
    Accruing loans/leases past due 90 days or more 15  5  3  268  4 
    Total nonperforming loans/leases 22,962  8,770  17,514  23,842  2,748 
    Other real estate owned 61  133  177  205  - 
    Other repossessed assets -  -  340  -  - 
    Total nonperforming assets$23,023 $8,903 $18,031 $24,047 $2,748 
          
          
    ASSET QUALITY RATIOS     
    Nonperforming assets / total assets 0.29% 0.11% 0.23% 0.33% 0.04%
    ACL for loans and leases / total loans/leases held for investment 1.43% 1.43% 1.51% 1.59% 1.55%
    ACL for loans and leases / nonperforming loans/leases 377.03% 1000.07% 516.67% 387.66% 2721.47%
    Net charge-offs as a % of average loans/leases 0.03% 0.06% 0.04% 0.01% 0.00%
          
          
          
    INTERNALLY ASSIGNED RISK RATING (4)     
    Special mention (rating 6)$125,048 $98,333 $63,973 $54,558 $63,622 
    Substandard (rating 7) 70,866  66,021  77,317  83,048  54,491 
    Doubtful (rating 8) -  -  -  -  - 
     $195,914 $164,354 $141,290 $137,606 $118,113 
          
    Criticized loans (5)$195,914 $164,354 $141,290 $137,606 $118,113 
    Classified loans (6) 70,866  66,021  77,317  83,048  54,491 
          
    Criticized loans as a % of total loans/leases 3.16% 2.68% 2.35% 2.37% 2.45%
    Classified loans as a % of total loans/leases 1.14% 1.08% 1.29% 1.43% 1.13%
          
          
          
          
    (1) Certain loans were identified for securitization and transferred from loans to LHFS. The fair value of the loans was less than its carrying value at the date of transfer, resulting in a charge to the loan ACL.
    (2) Credit loss expense on loans/leases for the quarter ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans.
    (3) The increase in nonaccrual loans for the quarter ended June 30, 2022 is due to the addition of $7.3 million related to the acquired Guaranty Bank loan portfolio.
    (4) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
    (5) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.
    (6) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.
          
          



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
            
       For the Quarter Ended
       March 31, December 31, March 31,
     SELECT FINANCIAL DATA - SUBSIDIARIES  2023   2022   2022 
       (dollars in thousands)
            
     TOTAL ASSETS      
     Quad City Bank and Trust (1) $2,548,473  $2,312,013  $2,195,894 
     m2 Equipment Finance, LLC  317,497   306,396   281,666 
     Cedar Rapids Bank and Trust  2,196,560   2,185,500   1,947,737 
     Community State Bank  1,286,227   1,297,812   1,184,708 
     Guaranty Bank (2)  2,147,776   2,146,474   956,345 
            
     TOTAL DEPOSITS      
     Quad City Bank and Trust (1) $2,173,343  $1,730,187  $1,930,935 
     Cedar Rapids Bank and Trust  1,663,138   1,686,959   1,397,976 
     Community State Bank  1,086,531   1,071,146   1,013,928 
     Guaranty Bank (2)  1,646,730   1,587,477   555,559 
            
     TOTAL LOANS & LEASES      
     Quad City Bank and Trust (1) $1,872,029  $1,828,267  $1,692,218 
     m2 Equipment Finance, LLC  321,495   309,930   285,871 
     Cedar Rapids Bank and Trust  1,637,252   1,644,989   1,478,514 
     Community State Bank  994,454   988,370   912,996 
     Guaranty Bank (2)  1,686,287   1,677,245   744,140 
            
     TOTAL LOANS & LEASES / TOTAL DEPOSITS      
     Quad City Bank and Trust (1)  86%  106%  88%
     Cedar Rapids Bank and Trust  98%  98%  106%
     Community State Bank  92%  92%  90%
     Guaranty Bank  102%  106%  134%
            
            
     TOTAL LOANS & LEASES / TOTAL ASSETS      
     Quad City Bank and Trust (1)  73%  79%  77%
     Cedar Rapids Bank and Trust  75%  75%  76%
     Community State Bank  77%  76%  77%
     Guaranty Bank  79%  78%  78%
            
     ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES      
     Quad City Bank and Trust (1)  1.41%  1.46%  1.69%
     m2 Equipment Finance, LLC  3.13%  3.11%  3.31%
     Cedar Rapids Bank and Trust  1.50%  1.49%  1.61%
     Community State Bank  1.38%  1.38%  1.55%
     Guaranty Bank  1.29%  1.37%  1.11%
            
     RETURN ON AVERAGE ASSETS       
     Quad City Bank and Trust (1)  1.23%  1.36%  1.86%
     Cedar Rapids Bank and Trust  3.07%  2.73%  2.25%
     Community State Bank  1.49%  1.75%  1.42%
     Guaranty Bank  1.02%  2.06%  1.40%
            
     NET INTEREST MARGIN PERCENTAGE (3)      
     Quad City Bank and Trust (1)  3.44%  3.56%  3.50%
     Cedar Rapids Bank and Trust (4)  4.03%  4.37%  3.60%
     Community State Bank (5)  3.99%  4.06%  3.62%
     Guaranty Bank (6)  3.49%  4.58%  3.38%
            
     ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET    
     INTEREST MARGIN, NET      
     Cedar Rapids Bank and Trust $(8) $98  $51 
     Community State Bank  71   505   33 
     Guaranty Bank  797   5,118   69 
     QCR Holdings, Inc. (7)  (32)  (33)  (35)
            
    (1)Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
    (2)Increase due to the acquisition of Guaranty Bank on April 1, 2022, merging into Springfield First Community Bank with the combined bank operating under the Guaranty Bank name.
    (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)Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 4.03% for the quarter ended March 31, 2023, 4.28% for the quarter ended December 31, 2022 and 3.54% for the quarter ended March 31, 2022.
    (5)Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.99% for the quarter ended March 31, 2023, 3.73% for the quarter ended December 31, 2022 and 3.62% for the quarter ended March 31, 2022.
    (6)Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.39% for the quarter ended March 31, 2023, 3.58% for the quarter ended December 31, 2022 and 3.41% for the quarter ended March 31, 2022.
    (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 Holding, Inc. 
    Consolidated Financial Highlights 
    (Unaudited)  
                
      As of
      March 31, December 31, September 30, June 30, March 31, 
    GAAP TO NON-GAAP RECONCILIATIONS  2023   2022   2022   2022   2022  
      (dollars in thousands, except per share data)
    TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)           
                
    Stockholders' equity (GAAP) $801,494  $772,724  $737,072  $743,138  $667,924  
    Less: Intangible assets  154,467   154,366   155,153   155,940   82,922  
    Tangible common equity (non-GAAP) $647,027  $618,358  $581,919  $587,198  $585,002  
                
    Total assets (GAAP) $8,036,904  $7,948,837  $7,730,049  $7,392,941  $6,175,819  
    Less: Intangible assets  154,467   154,366   155,153   155,940   82,922  
    Tangible assets (non-GAAP) $7,882,437  $7,794,471  $7,574,896  $7,237,001  $6,092,897  
                
    Tangible common equity to tangible assets ratio (non-GAAP) 8.21%  7.93%  7.68%  8.11%  9.60% 
                
                
                
    (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.
     
                



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
                
    GAAP TO NON-GAAP RECONCILIATIONS For the Quarter Ended 
      March 31, December 31, September 30, June 30, March 31, 
    ADJUSTED NET INCOME (1)  2023   2022   2022   2022   2022  
      (dollars in thousands, except per share data)
                
    Net income (GAAP) $27,157  $30,906  $29,294  $15,242  $23,624  
                
    Less non-core items (post-tax) (2):           
    Income:           
    Securities losses, net  (366)  -   -   -   -  
    Fair value gain (loss) on derivatives, net  (337)  (211)  714   342   715  
    Total non-core income (non-GAAP) $(703) $(211) $714  $342  $715  
                
    Expense:           
    Acquisition costs (2)  -   (517)  321   1,932   1,462  
    Post-acquisition compensation, transition and integration costs  164   529   48   3,789   -  
    CECL Day 2 provision for credit losses on acquired non-PCD loans (3)  -   -   -   8,651   -  
    CECL Day 2 provision for credit losses provision on acquired OBS exposure (3) -   -   -   1,140   -  
    Total non-core expense (non-GAAP) $164  $12  $369  $15,512  $1,462  
    Adjusted net income (non-GAAP) (1) $ 28,024  $ 31,129  $ 28,949  $ 30,412  $ 24,371  
                
    ADJUSTED EARNINGS PER COMMON SHARE (1)           
                
    Adjusted net income (non-GAAP) (from above) $28,024  $31,129  $28,949  $30,412  $24,371  
                
    Weighted average common shares outstanding  16,776,289   16,855,973   16,900,968   17,345,324   15,625,112  
    Weighted average common and common equivalent shares outstanding  16,942,132   17,047,976   17,110,691   17,549,107   15,852,256  
                
    Adjusted earnings per common share (non-GAAP):           
    Basic $ 1.67  $ 1.85  $ 1.71  $ 1.75  $ 1.56  
    Diluted $ 1.65  $ 1.83  $ 1.69  $ 1.73  $ 1.54  
                
    ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)           
                
    Adjusted net income (non-GAAP) (from above) $28,024  $31,129  $28,949  $30,412  $24,371  
                
    Average Assets $7,906,830  $7,800,229  $7,652,463  $7,324,470  $6,115,127  
                
    Adjusted return on average assets (annualized) (non-GAAP)  1.42%  1.60%  1.51%  1.66%  1.59% 
    Adjusted return on average equity (annualized) (non-GAAP)  14.11%  16.44%  15.21%  15.43%  14.25% 
                
    NET INTEREST MARGIN (TEY) (4)           
                
    Net interest income (GAAP) $56,810  $65,218  $60,769  $59,400  $45,733  
    Plus: Tax equivalent adjustment (5)  6,057   5,554   4,459   3,396   2,933  
    Net interest income - tax equivalent (Non-GAAP) $62,867  $70,772  $65,228  $62,796  $48,666  
    Less: Acquisition accounting net accretion  828   5,688   1,080   1,695   118  
    Adjusted net interest income $62,039  $65,084  $64,148  $61,101  $48,548  
                
    Average earning assets $7,247,605  $7,148,578  $6,975,857  $6,742,095  $5,625,813  
                
    Net interest margin (GAAP)  3.18%  3.62%  3.46%  3.53%  3.30% 
    Net interest margin (TEY) (Non-GAAP)  3.52%  3.93%  3.71%  3.74%  3.50% 
    Adjusted net interest margin (TEY) (Non-GAAP)  3.47%  3.61%  3.65%  3.64%  3.50% 
                
    EFFICIENCY RATIO (6)           
                
    Noninterest expense (GAAP) $48,785  $49,697  $47,746  $54,248  $38,325  
                
    Net interest income (GAAP) $56,810  $65,218  $60,769  $59,400  $45,733  
    Noninterest income (GAAP)  25,842   21,219   21,095   22,782   15,633  
    Total income $82,652  $86,437  $81,864  $82,182  $61,366  
                
    Efficiency ratio (noninterest expense/total income) (Non-GAAP)  59.02%  57.50%  58.32%  66.01%  62.45% 
                
                
                
    (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 and average equity are non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-core or 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) Non-core or nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of acquisition costs which have an estimated effective tax rate of 13.62%.
    (3) The CECL Day 2 provision for credit losses on acquired non-PCD loans and OBS exposures resulted from the Guaranty Bank acquisition on April 1, 2022.  
    (4) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective tax rate.     
    (5) 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.
    (6) 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.
     

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