Exhibit 99.1

 

PRESS RELEASE

FOR IMMEDIATE RELEASE

 

QCR Holdings, Inc. Announces Record Net Income of $18.3 Million for the Fourth Quarter and $60.6 Million for the Full Year 2020

 

Fourth Quarter and Full Year 2020 Highlights

 

·

Record net income of $18.3 million, or $1.14 per diluted share

·

Adjusted net income (non-GAAP) of $19.1 million, or $1.20 per diluted share

·

Noninterest income of $32.0 million for the quarter and $113.8 million for the year

·

Adjusted NIM (TEY)(non-GAAP) was up 1 basis point after further adjusting for higher third quarter interest recoveries on previously charged-off loans

·

Annualized core loan and lease growth (non-GAAP) of 9.0% for the quarter and 7.8% for the year, excluding SBA Paycheck Protection Program (“PPP”) loans

·

Core deposits relatively stable for the quarter and up 22.3% for the year

·

Provision expense of $7.1 million for the quarter, increasing ALLL to total loans and leases, excluding PPP loans (non-GAAP), by 7 basis points to 2.12%

·

Nonperforming assets improved by 22% for the quarter and now represent only 0.26% of total assets

 

Moline, IL, January 27, 2021 -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced record net income of $18.3 million and diluted earnings per share (“EPS”) of $1.14 for the fourth quarter of 2020, compared to net income of $17.3 million and diluted EPS of $1.09 for the third quarter of 2020. Pre-provision, pre-tax adjusted net income (non-GAAP) was $30.4 million in the fourth quarter of 2020, compared to a record $42.2 million in the third quarter of 2020.

 

The Company reported adjusted net income (non-GAAP) of $19.1 million and adjusted diluted EPS of $1.20 for the fourth quarter of 2020, compared to adjusted net income (non-GAAP) of $17.7 million and adjusted diluted EPS of $1.11 for the third quarter of 2020. For the fourth quarter of 2019, net income and diluted EPS were $15.9 million and $0.99, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $15.4 million and $0.96, respectively.

 

		For the Quarter Ended
		December 31,				September 30,				December 31,
$ in millions (except per share data)		2020				2020				2019
Net Income		$	18.3			$	17.3			$	15.9
Diluted EPS		$	1.14			$	1.09			$	0.99
Adjusted Net Income (non-GAAP)		$	19.1			$	17.7			$	15.4
Adjusted Diluted EPS (non-GAAP)		$	1.20			$	1.11			$	0.96
Pre-Provision/Pre-Tax Adjusted Income (non-GAAP)		$	30.4			$	42.2			$	20.4
Pre-Provision/Pre-Tax Adjusted ROAA (non-GAAP)			2.08	%			2.90	%			1.58	%
See GAAP to non-GAAP reconciliations

 

“We are very pleased with our financial performance in 2020, highlighted by record net income for the fourth quarter and full year,” said CEO Larry J. Helling. “Our strong results were driven by robust revenue growth, record fee income and increased net interest income. We grew core loans by nearly 8% for the year, while maintaining disciplined underwriting and solid credit quality. Our asset quality and credit metrics improved during the quarter as we improved nonperforming assets by 22%, down to only 0.26% of total assets.”

 

“Additionally, we continued to see a reduction in loan deferrals at year-end, as most of our clients who received payment relief early in the COVID-19 pandemic have resumed making normal payments,” Helling said. “We believe this speaks to the high quality of our loan portfolio and the resiliency of our local markets, which continue to exhibit improving economic activity.”

 

Adjusted non-GAAP measurements of financial performance exclude non-recurring income and expense items. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance.

 

 

Annualized Loan and Lease Growth of 9.0% for the Quarter and 7.8% for the Year, excluding PPP Loans (non-GAAP)

 

During the fourth quarter of 2020, the Company’s total loans and leases, excluding PPP loans, increased $87.5 million to a total of $4.0 billion. Loan and lease growth during the quarter was 9.0% on an annualized basis. Continued loan and lease growth was funded by some of the Company’s excess liquidity. Core deposits (excluding brokered deposits) declined by $18.8 million and brokered deposits declined by $54.3 million as the Company allowed certain higher cost brokered deposits to run off the balance sheet. In addition, short-term borrowings decreased by $50.0 million during the quarter. At quarter-end, the percentage of wholesale funds to total assets was 3.2%, which was down from 4.9% in the third quarter of 2020 as the Company’s need for wholesale funding continued to decline. Additionally, at quarter-end, the percentage of gross loans and leases to total assets was 74.8%, up from 72.4% in the third quarter, driven primarily by lower excess liquidity.

 

“Our solid loan growth for the quarter was driven by strength in our core commercial lending business, as well as our Specialty Finance Group,” added Helling. “However, until we have better visibility on the pandemic recovery, we are targeting organic loan growth for the full year 2021 of between 6% and 8%, slightly lower than our long-term goal of 9%.”

 

Net Interest Income of $43.7 million

 

Net interest income for the fourth quarter of 2020 totaled $43.7 million, compared to $44.6 million for the third quarter of 2020 and $39.9 million for the fourth quarter of 2019. The slight decrease was primarily due to a decline in the yield on earning assets of 8 basis points on a linked quarter basis, primarily due to the higher than normal amount of interest recoveries on previously charged-off loans in the third quarter. Acquisition-related net accretion totaled $1.1 million for the fourth quarter of 2020, up from $833 thousand in the third quarter of 2020 and $931 thousand for the fourth quarter of 2019. Adjusted net interest income (non-GAAP) was $45.3 million for the fourth quarter of 2020, compared to $45.7 million for the third quarter of 2020 and $40.8 million for the fourth quarter of 2019.

 

Net interest income totaled $167.0 million for the year ended December 31, 2020, compared to $155.6 million for the year ended December 31, 2019.

 

Excluding the impact of interest recoveries in the prior quarter, which created an 8 basis point reduction in adjusted NIM (non-GAAP) on a linked-quarter basis, adjusted NIM was up 1 basis point. The reported net interest margin was 3.25%. On a tax-equivalent yield basis (non-GAAP), net interest margin was 3.45%, decreasing by 11 and 6 basis points, respectively, from the third quarter of 2020. Net interest margin, excluding acquisition-related net accretion (non-GAAP) was 3.37%, down 7 basis points from the third quarter. The total cost of interest-bearing funds was down 2 basis points for the quarter, as further improvement in our deposit costs was partially offset by the full quarter impact of our $50.0 million subordinated note offering in the third quarter.

 

		For the Quarter Ended
		December 31,				September 30,					December 31,
		2020				2020					2019
NIM			3.25	%			3.36	%				3.36	%
NIM (TEY)(non-GAAP)			3.45	%			3.51	%				3.51	%
Adjusted NIM (TEY)(non-GAAP)			3.37	%			3.44	%	(1)			3.43	%
See GAAP to non-GAAP reconciliations

 

(1)

Increased by 8 bps due to one-time interest recoveries on previously charged-off loans.

 

“Our deposit costs decreased significantly over the course of the year as we grew core deposits and significantly reduced our wholesale funding,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “However, our average loan yields also decreased due to the sharp decline in short-term interest rates. Despite this and the fact that we carried a significant amount of excess liquidity for most of the year, we were able to protect our margins, as adjusted NIM increased by 2 basis points for the full year.”

 

Noninterest Income of $32.0 million

 

Noninterest income for the fourth quarter of 2020 totaled $32.0 million, compared to $38.0 million for the third quarter of 2020. The decrease was primarily due to a $5.3 million reduction in swap fee income from the record third quarter. Wealth management revenue was $3.3 million for the quarter, down $232 thousand from the third quarter, due to the impact of the sale of the Bates Companies in the third quarter. Excluding that impact, wealth management revenue was up $241 thousand on a linked-quarter basis. In addition, securities gains decreased by $1.2 million and gain on sale of loans increased by $316 thousand from the prior quarter. Noninterest income increased $14.5 million, or an increase of 83% compared to the fourth quarter of 2019, excluding the gain on sale of Rockford Bank & Trust (“RB&T”), which was recorded in that quarter.

 

 

Noninterest income for the year ended December 31, 2020, totaled $113.8 million, compared to $66.5 million for the year ended December 31, 2019, excluding the gain on the sale of RB&T, an increase of 71%.

 

“Our noninterest income was again driven by another strong quarter of swap fee income. Swap fee income totaled $74.8 million for the full year 2020 as a result of strong demand for these lending products, where we are making high-quality, long-term variable rate loans and are enabling our clients to lock in attractive fixed long-term rates through the use of swaps. The pipeline of swap loans at our banks and our Specialty Finance Group remains healthy and we believe that this source of fee income remains sustainable for the foreseeable future,” added Gipple. “Our current expectation is that swap fee income will be approximately $14 to $18 million per quarter for 2021.”

 

Noninterest Expenses of $46.4 million

 

Noninterest expense for the fourth quarter of 2020 totaled $46.4 million, compared to $40.8 million for the third quarter of 2020 and $46.3 million for the fourth quarter of 2019. The linked-quarter increase was due to several factors, but primarily the result of increased salary and benefits expense of $4.4 million, driven by strong financial results in the second half of the year. In addition, occupancy and equipment expense increased by $1.1 million, and advertising and marketing expense increased by $526 thousand. These increases were partially offset by a linked-quarter decline in losses on liability extinguishment of $417 thousand and loss on the sale of a subsidiary of $452 thousand.

 

Asset Quality Remains Strong and NPAs Improved

Continued to Build Reserves

 

Nonperforming assets (“NPAs”) totaled $14.8 million at the end of the fourth quarter, a decrease of $4.1 million from the third quarter of 2020. The decrease was primarily due to a reduction in nonaccrual loans as a number of loans returned to performing status or were either monetized or charged-off during the quarter. The ratio of NPAs to total assets improved to 0.26% on December 31, 2020, compared to 0.32% on September 30, 2020, and 0.27% on December 31, 2019. In addition, the Company’s criticized loans and classified loans to total loans and leases decreased to 3.24% and 1.55%, respectively, from 3.53% and 1.66% as of September 30, 2020.

 

The Company’s provision for loan and lease losses totaled $7.1 million for the fourth quarter of 2020, down from $20.3 million in the prior quarter. As of December 31, 2020, the Company’s allowance to total loans and leases was 1.98%, which was up from 1.87% on September 30, 2020, and from 0.98% at December 31, 2019. Excluding the $273 million impact of PPP loans that are on the Company’s balance sheet, the ALLL to total loans and leases was 2.12% (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 $3.1 million on December 31, 2020.

 

Strong Capital Levels

 

As of December 31, 2020, the Company’s total risk-based capital ratio was 15.13%, the common equity tier 1 ratio was 10.69% and the tangible common equity to tangible assets ratio was 9.08%. By comparison, these respective ratios were 14.93%, 10.44% and 8.42% as of September 30, 2020.

 

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.

 

These initiatives are long-term targets. Due to the impact of the COVID-19 pandemic, among other factors, the Company may not be able to achieve these goals for the full year 2021.

 

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, January 28, 2021, 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 February 11, 2021. The replay access information is 877-344-7529 (international 412-317-0088); access code 10151041. 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 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 24 locations in Iowa, Missouri, Wisconsin and Illinois. As of December 31, 2020, the Company had approximately $5.7 billion in assets, $4.3 billion in loans and $4.6 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 new presidential administration 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	Kim K. Garrett
President	Vice President
Chief Operating Officer	Corporate Communications
Chief Financial Officer	Investor Relations Manager
(309) 743-7745	(319) 743-7006
tgipple@qcrh.com	kgarret@qcrh.com

 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

 

		As of
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
						(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks		$	61,329			$	68,932			$	88,577			$	169,827			$	76,254
Federal funds sold and interest-bearing deposits			95,676				302,668				142,900				206,708				157,691
Securities			838,131				782,088				748,883				684,571				611,341
Net loans/leases			4,166,753				4,168,395				4,079,432				3,662,435				3,654,204
Intangibles			11,381				11,902				13,872				14,421				14,970
Goodwill			74,066				74,066				74,248				74,248				74,748
Derivatives			222,757				236,381				225,164				195,973				87,827
Other assets			212,704				220,128				220,920				213,134				220,049
Assets held for sale			-				-				10,765				10,758				11,966
Total assets		$	5,682,797			$	5,864,560			$	5,604,761			$	5,232,075			$	4,909,050
Total deposits		$	4,599,137			$	4,672,268			$	4,349,775			$	4,170,478			$	3,911,051
Total borrowings			177,114				226,962				376,250				244,399				278,955
Derivatives			229,270				244,510				233,589				203,744				88,436
Other liabilities			83,483				148,207				87,539				71,185				90,254
Liabilities held for sale			-				-				1,588				3,130				5,003
Total stockholders' equity			593,793				572,613				556,020				539,139				535,351
Total liabilities and stockholders' equity		$	5,682,797			$	5,864,560			$	5,604,761			$	5,232,075			$	4,909,050
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial loans		$	1,726,723			$	1,823,049			$	1,850,110			$	1,484,979			$	1,507,825
Commercial real estate loans			2,107,629				1,999,715				1,869,162				1,783,086				1,736,396
Direct financing leases			66,016				73,011				79,105				83,324				87,869
Residential real estate loans			252,121				245,032				241,069				237,742				239,904
Installment and other consumer loans			91,302				102,471				99,150				106,728				109,352
Deferred loan/lease origination costs, net of fees			7,338				4,699				1,663				8,809				8,859
Total loans/leases		$	4,251,129			$	4,247,977			$	4,140,259			$	3,704,668			$	3,690,205
Less allowance for estimated losses on loans/leases			84,376				79,582				60,827				42,233				36,001
Net loans/leases		$	4,166,753			$	4,168,395			$	4,079,432			$	3,662,435			$	3,654,204
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities		$	15,336			$	18,437			$	17,472			$	19,457			$	20,078
Municipal securities			627,523				569,075				526,192				493,664				447,853
Residential mortgage-backed and related securities			132,842				134,147				145,672				122,853				120,587
Asset backed securities			40,683				40,665				39,797				28,499				16,887
Other securities			21,747				19,764				19,750				20,098				5,936
Total securities		$	838,131			$	782,088			$	748,883			$	684,571			$	611,341
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits		$	1,145,378			$	1,175,085			$	1,177,482			$	829,782			$	777,224
Interest-bearing demand deposits			2,987,469				2,938,194				2,488,755				2,440,907				2,407,502
Time deposits			460,659				499,021				560,982				617,979				571,343
Brokered deposits			5,631				59,968				122,556				281,810				154,982
Total deposits		$	4,599,137			$	4,672,268			$	4,349,775			$	4,170,478			$	3,911,051
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances		$	-			$	40,000			$	90,000			$	55,000			$	50,000
Overnight FHLB advances			15,000				-				55,000				40,000				109,300
FRB borrowings			-				-				100,000				30,000				-
Other short-term borrowings			5,430				30,430				24,818				13,067				13,423
Subordinated notes			118,691				118,577				68,516				68,455				68,394
Junior subordinated debentures			37,993				37,955				37,916				37,877				37,838
Total borrowings		$	177,114			$	226,962			$	376,250			$	244,399			$	278,955

 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

 

		For the Quarter Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income		$	49,851			$	50,890			$	48,650			$	48,982			$	52,977
Interest expense			6,144				6,309				7,694				11,276				13,058
Net interest income			43,707				44,581				40,956				37,706				39,919
Provision for loan/lease losses			7,080				20,342				19,915				8,367				979
Net interest income after provision for loan/lease losses		$	36,627			$	24,239			$	21,041			$	29,339			$	38,940
Trust department fees		$	2,388			$	2,280			$	2,227			$	2,312			$	2,365
Investment advisory and management fees			926				1,266				1,399				1,727				1,589
Deposit service fees			1,875				1,403				1,286				1,477				1,787
Gain on sales of residential real estate loans			1,462				1,370				1,196				652				823
Gain on sales of government guaranteed portions of loans			224				-				-				-				159
Swap fee income			21,402				26,688				19,927				6,804				7,409
Securities gains, net			617				1,802				65				-				26
Earnings on bank-owned life insurance			461				502				612				329				533
Debit card fees			923				946				775				758				766
Correspondent banking fees			270				220				198				215				194
Gain on sale of assets and liabilities of subsidiary			-				-				-				-				12,286
Other			1,469				1,482				941				922				1,868
Total noninterest income		$	32,017			$	37,959			$	28,626			$	15,196			$	29,805
Salaries and employee benefits		$	30,446			$	25,999			$	21,304			$	18,519			$	24,220
Occupancy and equipment expense			4,917				3,807				3,748				4,032				4,019
Professional and data processing fees			3,871				3,758				3,646				3,369				3,570
Post-acquisition compensation, transition and integration costs			25				(32	)			70				151				1,855
Disposition costs			64				192				(83	)			517				3,325
FDIC insurance, other insurance and regulatory fees			1,272				1,301				908				683				523
Loan/lease expense			465				403				339				228				349
Net cost of (income from) and gains/losses on operations of other real estate			(4	)			16				(332	)			13				232
Advertising and marketing			1,276				750				552				682				1,670
Bank service charges			523				488				501				504				516
Losses on liability extinguishment			1,457				1,874				429				147				288
Correspondent banking expense			205				205				212				216				216
Intangibles amortization			521				531				548				549				560
Goodwill impairment			-				-				-				500				3,000
Loss on sale of subsidiary			(147	)			305				-				-				-
Other			1,473				1,241				1,288				1,313				1,951
Total noninterest expense		$	46,364			$	40,838			$	33,130			$	31,423			$	46,294
Net income before income taxes		$	22,280			$	21,360			$	16,537			$	13,112			$	22,451
Federal and state income tax expense			4,009				4,016				2,798				1,884				6,560
Net income		$	18,271			$	17,344			$	13,739			$	11,228			$	15,891
Basic EPS		$	1.16			$	1.10			$	0.87			$	0.71			$	1.01
Diluted EPS		$	1.14			$	1.09			$	0.86			$	0.70			$	0.99
Weighted average common shares outstanding			15,775,596				15,767,152				15,747,056				15,796,796				15,772,703
Weighted average common and common equivalent shares outstanding			15,973,054				15,923,578				15,895,336				16,011,456				16,033,043

 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

 

		For the Year Ended
		Decenber 31,				Decenber 31,
		2020				2019
		(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income		$	198,373			$	216,076
Interest expense			31,423				60,517
Net interest income			166,950				155,559
Provision for loan/lease losses			55,704				7,066
Net interest income after provision for loan/lease losses		$	111,246			$	148,493
Trust department fees		$	9,207			$	9,559
Investment advisory and management fees			5,318				6,995
Deposit service fees			6,041				6,812
Gain on sales of residential real estate loans			4,680				2,571
Gain on sales of government guaranteed portions of loans			224				748
Swap fee income			74,821				28,295
Securities gains (losses), net			2,484				(30	)
Earnings on bank-owned life insurance			1,904				1,973
Debit card fees			3,402				3,357
Correspondent banking fees			903				773
Gain on sale of assets and liabilities of subsidiary			-				12,286
Other			4,814				5,429
Total noninterest income		$	113,798			$	78,768
Salaries and employee benefits		$	96,268			$	92,063
Occupancy and equipment expense			16,504				15,106
Professional and data processing fees			14,644				13,381
Post-acquisition compensation, transition and integration costs			214				3,582
Disposition costs			690				3,325
FDIC insurance, other insurance and regulatory fees			4,164				2,955
Loan/lease expense			1,435				1,097
Net cost of (income from) and gains/losses on operation of other real estate			(307	)			3,789
Advertising and marketing			3,260				4,548
Bank service charges			2,016				2,009
Losses on liability extinguishment			3,907				436
Correspondent banking expense			838				836
Intangibles amortization			2,149				2,266
Goodwill impairment			500				3,000
Loss on sale of subsidiary			158				-
Other			5,315				6,841
Total noninterest expense		$	151,755			$	155,234
Net income before taxes		$	73,289			$	72,027
Income tax expense			12,707				14,619
Net income		$	60,582			$	57,408
Basic EPS		$	3.89			$	3.65
Diluted EPS		$	3.80			$	3.60
Weighted average common shares outstanding			15,571,650				15,730,016
Weighted average common and common equivalent shares outstanding			15,952,637				15,967,775

 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

 

		As of and for the Quarter Ended																				For the Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
		2020				2020				2020				2020				2019				2020				2019
		(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding			15,805,711				15,792,357				15,790,611				15,773,736				15,828,098
Book value per common share (1)		$	37.57			$	36.26			$	35.21			$	34.18			$	33.82
Tangible book value per common share (2)		$	32.16			$	30.82			$	29.63			$	28.56			$	28.15
Closing stock price		$	39.59			$	27.41			$	31.18			$	27.07			$	43.86
Market capitalization		$	625,748			$	432,869			$	492,351			$	426,995			$	694,220
Market price / book value			105.38	%			75.60	%			88.55	%			79.20	%			129.69	%
Market price / tangible book value			123.09	%			88.95	%			105.23	%			94.79	%			155.76	%
Earnings per common share (basic) LTM (3)		$	3.84			$	3.69			$	3.55			$	3.54			$	3.65
Price earnings ratio LTM (3)			10.31	x			7.43	x			8.78	x			7.65	x			12.02	x
TCE / TA (4)			9.08	%			8.42	%			8.48	%			8.76	%			9.25	%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance		$	572,613			$	556,020			$	539,139			$	535,351			$	519,743
Net income			18,271				17,344				13,739				11,228				15,891
Other comprehensive income (loss), net of tax			3,157				(614	)			3,622				(3,691	)			(683	)
Common stock cash dividends declared			(947	)			(945	)			(945	)			(942	)			(947	)
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)			699				808				465				973				948
Ending balance		$	593,793			$	572,613			$	556,020			$	539,139			$	535,351
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio			15.13	%			14.93	%			13.71	%			13.54	%			13.33	%
Tier 1 risk-based capital ratio			11.49	%			11.25	%			11.07	%			11.16	%			11.04	%
Tier 1 leverage capital ratio			9.49	%			9.21	%			8.91	%			10.19	%			9.53	%
Common equity tier 1 ratio			10.69	%			10.44	%			10.25	%			10.31	%			10.18	%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)			1.25	%			1.19	%			0.95	%			0.91	%			1.23	%			1.08	%			1.09	%
Return on average total equity (annualized)			12.43	%			12.06	%			9.88	%			8.23	%			11.93	%			10.70	%			11.09	%
Net interest margin			3.25	%			3.36	%			3.14	%			3.40	%			3.36	%			3.28	%			3.29	%
Net interest margin (TEY) (Non-GAAP)(7)			3.45	%			3.51	%			3.27	%			3.56	%			3.51	%			3.44	%			3.43	%
Efficiency ratio (Non-GAAP) (8)			61.23	%			49.48	%			47.61	%			59.40	%			66.40	%			54.05	%			66.18	%
Gross loans and leases / total assets (10)			74.81	%			72.43	%			74.01	%			70.95	%			75.36	%			74.81	%			74.80	%
Gross loans and leases / total deposits (10)			92.43	%			90.92	%			95.18	%			88.83	%			94.35	%			92.43	%			94.95	%
Effective tax rate			17.99	%			18.80	%			16.92	%			14.37	%			29.22	%			17.34	%			16.26	%
Full-time equivalent employees			714				687				712				703				697				714				766
AVERAGE BALANCES
Assets		$	5,842,299			$	5,820,555			$	5,800,164			$	4,948,311			$	5,147,754			$	5,604,074			$	5,088,055
Loans/leases			4,250,951				4,185,275				3,999,523				3,686,410				3,868,435				4,031,567				3,853,918
Deposits			4,742,602				4,726,881				4,732,626				3,954,707				4,227,572				4,540,266				4,228,418
Total stockholders' equity			588,042				575,061				556,047				545,548				532,624				566,240				507,383

 

	(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)	Growth in full-time equivalents from September 30, 2020 to December 31, 2020 due to the addition of new positions created to build scale. Decrease from June 30, 2020 to September 30, 2020 due to sale of Bates Companies and interns employed only during the summer.
	(10)	Excludes assets held for sale as of  Deccember 31, 2019, March 31, 2020 and June 30, 2020.

 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

 

		For the Quarter Ended
		December 31, 2020												September 30, 2020												December 31, 2019
ANALYSIS OF NET INTEREST INCOME AND MARGIN		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		$	1,216			$	1				0.08	%		$	2,205			$	1				0.18	%		$	2,933			$	12				1.62	%
Interest-bearing deposits at financial institutions			279,024				82				0.12	%			321,679				92				0.11	%			208,040				868				1.66	%
Securities (1)			795,696				7,207				3.62	%			749,425				6,836				3.66	%			610,676				5,913				3.84	%
Restricted investment securities			18,790				236				4.92	%			19,714				249				4.94	%			21,226				283				5.29	%
Loans (1)			4,250,951				44,956				4.21	%			4,185,275				45,654				4.34	%			3,868,435				47,684				4.89	%
Total earning assets (1)		$	5,345,677			$	52,482				3.91	%		$	5,278,298			$	52,832				3.99	%		$	4,711,310			$	54,760				4.61	%
Interest-bearing deposits		$	3,033,119			$	2,060				0.27	%		$	2,932,988			$	2,086				0.28	%		$	2,520,696			$	6,547				1.03	%
Time deposits			530,813				1,752				1.31	%			638,031				2,399				1.50	%			865,392				4,631				2.12	%
Short-term borrowings			19,115				3				0.17	%			26,996				11				0.17	%			19,491				87				1.77	%
Federal Home Loan Bank advances			33,207				80				0.94	%			57,078				211				1.45	%			87,527				210				0.95	%
Subordinated debentures			118,612				1,678				5.66	%			77,783				1,031				5.30	%			68,356				1,004				5.83	%
Junior subordinated debentures			37,969				571				5.88	%			37,936				571				5.89	%			37,813				579				6.07	%
Total interest-bearing liabilities		$	3,772,835			$	6,144				0.64	%		$	3,770,812			$	6,309				0.66	%		$	3,599,275			$	13,058				1.44	%
Net interest income (1)						$	46,338											$	46,523											$	41,702
Net interest margin (2)											3.25	%											3.36	%											3.36	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.45	%											3.51	%											3.51	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.37	%											3.44	%											3.43	%

 

		For the Year Ended
		December 31, 2020												December 31, 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		$	2,398			$	19				0.79	%		$	8,898			$	204				2.29	%
Interest-bearing deposits at financial institutions			315,616				669				0.21	%			179,635				3,910				2.18	%
Securities (1)			715,808				26,773				3.74	%			635,650				24,150				3.80	%
Restricted investment securities			20,270				1,031				5.00	%			21,559				1,174				5.45	%
Loans (1)			4,031,567				178,097				4.42	%			3,857,547				193,365				5.01	%
Total earning assets (1)		$	5,085,659			$	206,589				4.06	%		$	4,703,289			$	222,803				4.74	%
Interest-bearing deposits		$	2,797,669			$	11,980				0.43	%		$	2,443,989			$	29,898				1.22	%
Time deposits			690,222				11,289				1.64	%			966,745				20,977				2.17	%
Short-term borrowings			22,625				84				0.37	%			16,837				363				2.16	%
Federal Home Loan Bank advances			74,167				1,087				1.44	%			108,536				2,895				2.67	%
Other borrowings			-				-				0.00	%			13,563				512				3.77	%
Subordinated debentures			83,404				4,697				5.63	%			60,883				3,564				5.85	%
Junior subordinated debentures			37,913				2,286				5.93	%			37,751				2,308				6.11	%
Total interest-bearing liabilities		$	3,706,000			$	31,423				0.85	%		$	3,648,304			$	60,517				1.66	%
Net interest income (1)						$	175,166											$	162,286
Net interest margin (2)											3.28	%											3.31	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.44	%											3.45	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)											3.38	%											3.36	%

 

(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
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
		(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES
Beginning balance		$	79,582			$	60,827			$	42,233			$	36,001			$	36,116
Provision charged to expense			7,080				20,342				19,915				8,367				979
Loans/leases charged off			(2,779	)			(1,819	)			(1,450	)			(2,335	)			(1,182	)
Recoveries on loans/leases previously charged off			493				232				129				200				88
Ending balance		$	84,376			$	79,582			$	60,827			$	42,233			$	36,001
NONPERFORMING ASSETS
Nonaccrual loans/leases		$	13,940			$	17,597			$	12,099			$	11,628			$	7,902
Accruing loans/leases past due 90 days or more			3				86				99				1,419				33
Troubled debt restructures - accruing			741				1,061				920				545				979
Total nonperforming loans/leases			14,684				18,744				13,118				13,592				8,914
Other real estate owned			20				125				157				3,298				4,129
Other repossessed assets			135				110				25				45				41
Total nonperforming assets		$	14,839			$	18,979			$	13,300			$	16,935			$	13,084
ASSET QUALITY RATIOS
Nonperforming assets / total assets (1)			0.26	%			0.32	%			0.24	%			0.32	%			0.27	%
Allowance / total loans/leases (2)			1.98	%			1.87	%			1.47	%			1.14	%			0.98	%
Allowance / nonperforming loans/leases (2)			574.61	%			424.57	%			463.69	%			310.72	%			403.87	%
Net charge-offs as a % of average loans/leases			0.05	%			0.04	%			0.03	%			0.06	%			0.03	%
INTERNALLY ASSIGNED RISK RATING (3)
Special mention (rating 6)		$	71,482			$	79,587			$	104,608			$	34,738			$	19,952
Substandard (rating 7)			66,081				70,409				39,855				36,612				33,649
Doubtful (rating 8)			-				-				-				-				-
		$	137,563			$	149,996			$	144,463			$	71,350			$	53,601
Criticized loans (4)		$	137,563			$	149,996			$	144,463			$	71,350			$	53,601
Classified loans (5)			66,081				70,409				39,855				36,612				33,649
Criticized loans as a % of total loans/leases			3.24	%			3.53	%			3.49	%			1.93	%			1.45	%
Classified loans as a % of total loans/leases			1.55	%			1.66	%			0.96	%			0.99	%			0.91	%

 

(1) Excludes assets held for sale.

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

(3) Amounts exclude the government guaranteed portion, if any.  The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.

(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.

(5) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.        

 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)

 

		For the Quarter Ended												For the Year Ended
		December 31,				September 30,				December 31,				December 31,				December 31,
SELECT FINANCIAL DATA - SUBSIDIARIES		2020				2020				2019				2020				2019
		(dollars in thousands)
TOTAL ASSETS
Quad City Bank and Trust (1)		$	2,149,469			$	2,205,935			$	1,682,477
m2 Equipment Finance, LLC			243,090				241,452				239,794
Cedar Rapids Bank and Trust			1,952,308				2,012,182				1,572,324
Community State Bank - Ankeny			1,000,670				937,017				853,834
Springfield First Community Bank			779,955				803,478				748,753
TOTAL DEPOSITS
Quad City Bank and Trust (1)		$	1,866,635			$	1,955,360			$	1,458,587
Cedar Rapids Bank and Trust			1,378,108				1,399,267				1,248,598
Community State Bank - Ankeny			875,400				822,261				735,089
Springfield First Community Bank			569,036				592,528				531,498
TOTAL LOANS & LEASES
Quad City Bank and Trust (1)		$	1,556,762			$	1,556,798			$	1,329,667
m2 Equipment Finance, LLC			244,325				241,783				236,735
Cedar Rapids Bank and Trust			1,362,056				1,387,372				1,174,963
Community State Bank - Ankeny			707,681				683,086				639,270
Springfield First Community Bank			624,629				620,721				546,306
TOTAL LOANS & LEASES / TOTAL DEPOSITS
Quad City Bank and Trust (1)			83	%			80	%			91	%
Cedar Rapids Bank and Trust			99	%			99	%			94	%
Community State Bank - Ankeny			81	%			83	%			87	%
Springfield First Community Bank			110	%			105	%			103	%
TOTAL LOANS & LEASES / TOTAL ASSETS
Quad City Bank and Trust (1)			72	%			71	%			79	%
Cedar Rapids Bank and Trust			70	%			69	%			75	%
Community State Bank - Ankeny			71	%			73	%			75	%
Springfield First Community Bank			80	%			77	%			73	%
ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES
Quad City Bank and Trust (1)			1.95	%			1.86	%			1.03	%
m2 Equipment Finance, LLC			2.63	%			2.53	%			1.51	%
Cedar Rapids Bank and Trust (2)			2.35	%			2.22	%			1.14	%
Community State Bank - Ankeny (2)			2.02	%			1.92	%			1.04	%
Springfield First Community Bank (2)			1.23	%			1.09	%			0.41	%
RETURN ON AVERAGE ASSETS
Quad City Bank and Trust (1)			1.52	%			0.56	%			1.44	%			0.99	%			1.30	%
Cedar Rapids Bank and Trust			0.59	%			2.66	%			1.82	%			1.81	%			1.84	%
Community State Bank - Ankeny			3.25	%			0.82	%			1.38	%			1.25	%			1.34	%
Springfield First Community Bank			3.02	%			1.52	%			1.44	%			1.74	%			1.32	%
NET INTEREST MARGIN PERCENTAGE (3)
Quad City Bank and Trust (1)			3.19	%			3.07	%			3.55	%			3.17	%			3.39	%
Cedar Rapids Bank and Trust (5)			3.51	%			3.54	%			3.49	%			3.47	%			3.43	%
Community State Bank - Ankeny (4)			3.77	%			4.12	%			4.35	%			3.89	%			4.33	%
Springfield First Community Bank (6)			4.03	%			3.75	%			3.95	%			3.87	%			3.93	%
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET INTEREST MARGIN, NET
Cedar Rapids Bank and Trust		$	103			$	217			$	103			$	430			$	547
Community State Bank - Ankeny			132				56				94				325				877
Springfield First Community Bank			880				598				775				2,671				3,088
QCR Holdings, Inc. (7)			(38	)			(38	)			(41	)			(155	)			(168	)

 

(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)	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 3.69% for the quarter ended December 31, 2020, 4.06% for the quarter ended September 30, 2020 and 4.27% for the quarter ended December 31, 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 3.47% for the quarter ended December 31, 2020, 3.46% for the quarter ended September 30, 2020 and 3.46% for the quarter ended December 31, 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 3.59% for the quarter ended December 31, 2020, 4.02% for the quarter ended September 30, 2020 and 3.47% for the quarter ended December 31, 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
		December 31,				September 30,				June 30,				March 31,				December 31,
GAAP TO NON-GAAP RECONCILIATIONS		2020				2020				2020				2020				2019
		(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)		$	593,793			$	572,613			$	556,020			$	539,139			$	535,351
Less: Intangible assets			85,447				85,968				88,120				88,669				89,717
Tangible common equity (non-GAAP)		$	508,346			$	486,645			$	467,900			$	450,470			$	445,634
Total assets (GAAP)		$	5,682,797			$	5,864,560			$	5,604,761			$	5,232,075			$	4,909,050
Less: Intangible assets			85,447				85,968				88,120				88,669				89,717
Tangible assets (non-GAAP)		$	5,597,350			$	5,778,592			$	5,516,641			$	5,143,406			$	4,819,333
Tangible common equity to tangible assets ratio (non-GAAP)			9.08	%			8.42	%			8.48	%			8.76	%			9.25	%
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1)
Stockholder's equity (GAAP)		$	593,793			$	572,613			$	556,020			$	539,139			$	535,351
Less: PPP loan interest income (post-tax) (2)			7,691				4,934				2,085				-				-
Less: Intangible assets			85,447				85,968				88,120				88,669				89,717
Tangible common equity, excluding PPP loan income (non-GAAP)		$	500,655			$	481,711			$	465,815			$	450,470			$	445,634
Total assets (GAAP)		$	5,682,797			$	5,864,560			$	5,604,761			$	5,232,075			$	4,909,050
Less: PPP loans			273,146				357,506				358,052				-				-
Less: Intangible assets			85,447				85,968				88,120				88,669				89,717
Tangible assets, excluding PPP loans (non-GAAP)		$	5,324,204			$	5,421,086			$	5,158,589			$	5,143,406			$	4,819,333
Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP)			9.40	%			8.89	%			9.03	%			8.76	%			9.25	%

 

(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 Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
ADJUSTED NET INCOME (1)		2020				2020				2020				2020				2019				2020				2019
		(dollars in thousands, except per share data)
Net income (GAAP)		$	18,271			$	17,344			$	13,739			$	11,228			$	15,891			$	60,582			$	57,408
Less non-core items (post-tax) (2):
Income:
Securities gains(losses), net			487				1,424				51				-				21			$	1,962			$	(22	)
Loss on syndicated loan			(210	)			-				-				-							$	(210	)
Gain on sale of assets and liabilities of subsidiary			-				-				-				-				8,539				-				8,539
Total non-core income (non-GAAP)		$	277			$	1,424			$	51			$	-			$	8,560			$	1,752			$	8,517
Expense:
Losses on debt extinguishment, net		$	1,151			$	1,480			$	339			$	116			$	228			$	3,087			$	345
Goodwill impairment			-				-				-				500				3,000				500				3,000
Disposition costs			51				152				(66	)			408				2,627				545				2,627
Tax expense on expected liquidation of RB&T BOLI			-				-				-				-				790				-				790
Post-acquisition compensation, transition and integration costs			20				(25	)			55				119				1,465				169				2,828
Loss on sale of subsidiary			(102	)			212				-				-				-				110				-
Total non-core expense (non-GAAP)		$	1,119			$	1,819			$	329			$	1,143			$	8,110			$	4,411			$	9,590
Adjusted net income(non-GAAP) (1)		$	19,113			$	17,739			$	14,016			$	12,372			$	15,441			$	63,240			$	58,480
PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)
Net income (GAAP)		$	18,271			$	17,344			$	13,739			$	11,228			$	15,891			$	60,582			$	57,408
Less: Non-core income not tax-effected			351				1,802				65				-				12,313				2,218				12,258
Plus: Non-core expense not tax-effected			1,399				2,339				416				1,315				9,258				5,469				11,132
Provision expense			7,080				20,342				19,915				8,367				979				55,704				7,066
Federal and state income tax expense			4,009				4,016				2,798				1,884				6,560				12,707				14,619
Pre-provision/pre-tax adjusted income(non-GAAP) (1)		$	30,408			$	42,239			$	36,803			$	22,794			$	20,375			$	132,244			$	77,966
PRE-PROVISION/PRE-TAX ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)
Pre-provision/pre-tax adjusted income(non-GAAP)		$	30,408			$	42,239			$	36,803			$	22,794			$	20,375			$	132,244			$	77,966
Average Assets		$	5,842,299			$	5,820,555			$	5,800,164			$	4,948,311			$	5,147,754			$	5,604,074			$	5,102,980
Pre-provision/pre-tax adjusted return on average assets (non-GAAP)			2.08	%			2.90	%			2.54	%			1.84	%			1.58	%			2.36	%			2.04	%
ADJUSTED EARNINGS PER COMMON SHARE (1)
Adjusted net income (non-GAAP) (from above)		$	19,113			$	17,739			$	14,016			$	12,372			$	15,441			$	63,240			$	58,480
Weighted average common shares outstanding			15,775,596				15,767,152				15,747,056				15,796,796				15,772,703				15,571,650				15,730,016
Weighted average common and common equivalent shares outstanding			15,973,054				15,923,578				15,895,336				16,011,456				16,033,043				15,952,637				15,967,775
Adjusted earnings per common share (non-GAAP):
Basic		$	1.21			$	1.13			$	0.89			$	0.78			$	0.98			$	4.06			$	3.72
Diluted		$	1.20			$	1.11			$	0.88			$	0.77			$	0.96			$	3.96			$	3.66
ADJUSTED RETURN ON AVERAGE ASSETS (1)
Adjusted net income (non-GAAP) (from above)		$	19,113			$	17,739			$	14,016			$	12,372			$	15,441			$	63,240			$	58,480
Average Assets		$	5,842,299			$	5,820,555			$	5,800,164			$	4,948,311			$	5,147,754			$	5,604,074			$	5,102,980
Adjusted return on average assets (annualized) (non-GAAP)			1.31	%			1.22	%			0.97	%			1.00	%			1.20	%			1.13	%			1.15	%
NET INTEREST MARGIN (TEY) (4)
Net interest income (GAAP)		$	43,707			$	44,581			$	40,948			$	37,698			$	39,919			$	166,950			$	155,559
Plus: Tax equivalent adjustment (3)			2,631				1,942				1,728				1,790				1,783				8,216				6,727
Net interest income - tax equivalent (Non-GAAP)		$	46,338			$	46,523			$	42,676			$	39,488			$	41,702			$	175,166			$	162,286
Less:Acquisition accounting net accretion			1,077				833				736				625				931				3,271				4,344
Adjusted net interest income		$	45,261			$	45,690			$	41,940			$	38,863			$	40,771			$	171,895			$	157,942
Average earning assets		$	5,345,677			$	5,278,298			$	5,252,663			$	4,461,018			$	4,711,310			$	5,085,659			$	4,703,289
Net interest margin (GAAP)			3.25	%			3.36	%			3.14	%			3.40	%			3.36	%			3.28	%			3.31	%
Net interest margin (TEY) (Non-GAAP)			3.45	%			3.51	%			3.27	%			3.56	%			3.51	%			3.44	%			3.45	%
Adjusted net interest margin (TEY) (Non-GAAP)			3.37	%			3.44	%			3.21	%			3.50	%			3.43	%			3.38	%			3.36	%
EFFICIENCY RATIO (5)
Noninterest expense (GAAP)		$	46,364			$	40,838			$	33,122			$	31,415			$	46,294			$	151,755			$	155,234
Net interest income (GAAP)		$	43,707			$	44,581			$	40,948			$	37,698			$	39,919			$	166,950			$	155,559
Noninterest income (GAAP)			32,017				37,959				28,626				15,196				29,805				113,798				78,768
Total income		$	75,724			$	82,540			$	69,574			$	52,894			$	69,724			$	280,748			$	234,327
Efficiency ratio (noninterest expense/total income) (Non-GAAP)			61.23	%			49.48	%			47.61	%			59.39	%			66.40	%			54.05	%			66.25	%
ALLOWANCE FOR LOAN AND LEASE LOSSES TO TOTAL LOANS AND LEASES,EXCLUDING PPP LOANS (6)
Allowance for loan and lease losses		$	84,376			$	79,582			$	60,827			$	42,233			$	36,001			$	84,376			$	36,001
Total loans and leases		$	4,251,129			$	4,247,977			$	4,140,259			$	3,704,668			$	3,690,205			$	4,251,129			$	3,690,205
Less:PPP loans			273,146				357,506				358,052				358,052				-				273,146				-
Total loans and leases, excluding PPP loans		$	3,977,983			$	3,890,471			$	3,782,207			$	3,346,616			$	3,690,205			$	3,977,983			$	3,690,205
Allowance for loan and lease losses to total loans and leases, excluding PPP loans			2.12	%			2.05	%			1.61	%			1.26	%			0.98	%			2.12	%			0.98	%
LOAN GROWTH ANNUALIZED, EXCLUDING PPP LOANS
Total loans and leases		$	4,251,129			$	4,247,977			$	4,140,259			$	3,704,668			$	3,690,205			$	4,251,129			$	3,690,205
Less:PPP loans			273,146				357,506				358,052				-				-				273,146				-
Total loans and leases, excluding PPP loans		$	3,977,983			$	3,890,471			$	3,782,207			$	3,704,668			$	3,690,205			$	3,977,983			$	3,690,205
Loan growth annualized, excluding PPP loans			9.00	%			11.45	%			8.37	%			1.57	%			8.86	%			7.80	%			-0.07	%

 

(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/loss on sale of assets and liabiliities of subsidary 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.