QCR Holdings, Inc. Announces Net Income of $3.8 Million for the Third Quarter of 2013

MOLINE, Ill., Oct. 28, 2013 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) (the "Company") today announced net income attributable to QCR Holdings, Inc. ("Net Income") of $3.8 million for the quarter ended September 30, 2013, or diluted earnings per common share ("EPS") of $0.51 after preferred stock dividends of $811 thousand. By comparison, for the quarter ended June 30, 2013, the Company reported Net Income of $4.0 million, or diluted EPS of $0.59 after preferred stock dividends of $811 thousand. For the third quarter of 2012, the Company reported Net Income of $3.1 million, or diluted EPS of $0.44 after preferred stock dividends of $811 thousand. For the first three quarters of 2013, the Company reported Net Income of $11.1 million, or diluted EPS of $1.59 after preferred stock dividends of $2.4 million. This was an increase of $1.8 million, or 19%, over the same period in 2012.

"Our core earnings expanded in the third quarter with the help of a full quarter of earnings from Community National Bank ("CNB"), which we acquired in May of this year," explained Douglas M. Hultquist, President and Chief Executive Officer. "Specifically, net interest income grew $1.6 million, or 10%, compared to the second quarter of 2013. Most of this was attributable to the addition of CNB. Excluding the bargain purchase gain of $1.8 million recognized in the second quarter of 2013, our noninterest income jumped $827 thousand, or 16%, led by wealth management and deposit service fee income. Quad City Bank & Trust recognized gains of $417 thousand as we sold securities as part of a bond swap strategy, where we took advantage of a unique market opportunity to generate gains and grow future interest income with modest diversification and duration extension. Partially offsetting these revenue increases, we incurred $1.8 million more in noninterest expenses as a result of the full quarter of CNB's existing cost structure. We are executing our integration plan and fully expect to increase operational efficiency and realize the expected costs savings in the fourth quarter."

Mr. Hultquist added, "We also incurred $389 thousand in acquisition and conversion costs this quarter. As a result, if you remove the bond gains noted above and these acquisition and conversion costs from our third quarter results, our core earnings were $3.8 million and $0.51 in EPS for the quarter."

Net Interest Income and Margin Expand in the Current Quarter

Net interest income totaled $17.3 million for the quarter ended September 30, 2013, which was an increase of 10% from the prior quarter and an increase of 18% compared to the same quarter of 2012. For the first three quarters of 2013, net interest income grew 9% over the same period of 2012. Net interest margin was 3.07% for the third quarter of 2013, compared to 2.99% for the prior quarter, and compared to 3.20% for the second quarter of 2012. For the first three quarters of 2013, the Company's net interest margin was 3.03% compared to 3.18% for the same period of 2012.

Mr. Hultquist added, "The reasons for our margin expansion quarter-over-quarter in 2013 are twofold. First, we had our first full quarter of earnings from CNB, including $463 thousand of net interest income recognized on net accretion of the market value adjustments and intangibles recorded upon acquisition. Second, we continue to have success in organically growing earning assets in our legacy markets. The impact of growth in earning assets has outpaced the impact of declining yields which appear to have slowed. We continue to place a strong emphasis on loan and deposit growth in all of our markets. Considering the highly competitive environment, it's more important than ever that our talented bankers execute on our relationship-based business model."

Continued Growth of Loans and Deposits

During the third quarter of 2013, the Company's total assets grew $38.9 million, or 2%, to a total of $2.49 billion. Loans/leases grew slightly at 1% while securities were flat. The Company's liquid assets (cash and federal funds sold) grew $27.2 million. Most of the asset growth was funded with deposits which grew $25.1 million, or 2%.

"Despite a highly competitive climate and a period of slow economic recovery, we are pleased to report continued growth in loans and leases during the quarter," remarked Todd A. Gipple, Executive Vice President, Chief Operating Officer, and Chief Financial Officer. "In addition, we were successful in shifting the mix of our deposit portfolio as brokered time deposits fell $66.2 million, or 13%, and transactional demand deposits rose $91.2 million, or 8%. Of the latter, we continue to grow our noninterest bearing deposit portfolio with additional growth of $21.4 million, or 4%, for the current quarter. We remain committed to growing quality loans and leases and supporting our communities. As we did this quarter, we expect to fund future loan/lease growth primarily with core deposits. Additionally, we remain committed to reducing our reliance on longer term wholesale borrowing which tends to be higher cost than core deposits."

Sales of Mason City, IA and Austin, MN Branches of CNB Finalized

On October 4, 2013, the Company completed its previously announced sale of the two Mason City, Iowa, branches of CNB to Clear Lake Bank & Trust Company. The Company sold certain assets and liabilities of the two Mason City branches, including deposits of approximately $62 million and loans of approximately $26 million.

On October 11, 2013, the Company completed its previously announced sale of the two Austin, Minnesota, branches of CNB to Eastwood Bank. The Company sold certain assets and liabilities of the two Austin branches, including deposits of approximately $37 million and loans of approximately $31 million.

Mr. Gipple explained, "Based on the premiums we received in completing these two transactions, we anticipate recognizing an after-tax gain in the range of approximately $1.6 to $2.0 million in the fourth quarter of 2013. CNB had created strong deposit franchises in these markets with a talented group of employees and a solid client base. It was simply a case where the markets were not a strong strategic fit for our Company and divesting these markets frees up significant capital and other resources to better focus on the Waterloo/Cedar Falls community and our other legacy markets."

Nonperforming Assets Improve 1%

Nonperforming assets at September 30, 2013 were $33.7 million, which were down $390 thousand, or approximately 1%, from June 30, 2013. In addition, the ratio of nonperforming assets-to-total assets was 1.35% at September 30, 2013, which was down from 1.39% at June 30, 2013, and down from 1.44% at September 30, 2012. Generally, the vast majority of the Company's nonperforming assets consist of nonaccrual loans/leases, accruing troubled debt restructurings, and other real estate owned ("OREO").

"During the current quarter, we were able to reduce our nonperforming assets by 1%," stated Mr. Hultquist. "Additionally, we experienced a shift in the mix of our nonperforming assets as we foreclosed on the properties securing a few nonaccrual loans and shifted approximately $5.0 million from nonaccrual loans to OREO. We are confident in our valuation approach to OREO and in our ability to sell the OREO timely at minimal additional loss. Our lending/leasing practices and credit culture remain unchanged, and we will continue our strong commitment to improving our overall asset quality."

Provision for loan/lease losses ("provision") totaled $1.4 million for the third quarter of 2013, which is down $153 thousand from the prior quarter, and down $129 thousand from the third quarter of 2012. For the first three quarters of 2013, the Company's provision totaled $3.9 million which was an increase of $620 thousand, or 19%, from the same period of 2012. With the provision of $1.4 million more than offsetting the net charge-offs totaling $461 thousand (only three basis points of average loans/leases during the current quarter), the Company's allowance for loan/lease losses ("allowance") grew to $22.1 million at September 30, 2013. As of September 30, 2013, the Company's allowance to total loans/leases was 1.43%, which was up from 1.38% at June 30, 2013, and down from 1.56% at September 30, 2012. In accordance with generally accepted accounting principles for acquisition accounting, the acquired CNB loans were recorded at market value; therefore, there was no allowance associated with CNB's loans at acquisition. Further, the Company's allowance to total nonperforming loans/leases was 89% at September 30, 2013, which was up from 71% at June 30, 2013 and up from 81% at September 30, 2012.

Capital Levels Remain Strong

As of September 30, 2013, the Company and its subsidiary banks continued to maintain capital at levels well above the existing minimum requirements administered by the federal regulatory agencies.

"With the CNB acquisition and continued organic growth, we are pleased to continue to report regulatory capital ratios that are still well in excess of those levels required to be considered 'well-capitalized' today," stated Mr. Gipple. "Additionally, we remain strongly committed to our long-term capital plan of self-generating the capital necessary to grow tangible common equity and to continue redemption of the remaining Small Business Lending Fund preferred capital without a dilutive common equity raise."

Mr. Gipple added, "We were pleased with the final regulatory capital rules recently confirmed by the joint federal regulatory agencies. We believe that our current capital structure and execution of our existing capital plan without the need for a dilutive common equity raise will be more than sufficient to meet and exceed the revised regulatory capital ratios as required by Basel III."

Financial highlights as of September 30, 2013 for the Company's primary subsidiaries were as follows:

  • Quad City Bank & Trust, the Company's first subsidiary bank, which opened in 1994, had total consolidated assets of $1.25 billion at September 30, 2013, which was an increase of $21.5 million, or 2% from June 30, 2013. Loans/leases grew $6.7 million, or 1%, in the current quarter. The growth was funded from federal funds purchased and customer repurchase agreements (combined increase of $31.1 million, or 14%) and net cash flow from the securities portfolio (taxable securities declined $17.5 million, or 4%, while tax-exempt municipal securities grew $12.7 million, or 30%). The majority of these municipal securities are located in the Midwest with thorough underwriting conducted before investment. The bank realized net income of $7.7 million for the first nine months of 2013, which compares to $8.2 million for the same period of 2012. The decline was primarily the result of increased provision for specific commercial credits.
  • Included in the discussion above and consolidated with Quad City Bank & Trust, m2 Lease Funds, LLC, the Company's leasing subsidiary, grew leases $6.7 million, or 6%, during the third quarter of 2013. Further, m2 realized pre-tax net income of $2.7 million for the first nine months of 2013, which was up slightly from the same period of 2012.
  • Cedar Rapids Bank & Trust, which opened in 2001, had total assets of $651.3 million at September 30, 2013, which was an increase of $31.8 million, or 5%, from June 30, 2013. The bank grew loans $6.7 million, or 2%, during the third quarter of 2013. The loan growth was funded by core deposits (increase of $40.1 million, or 10%). Additionally, the bank reduced its reliance on wholesale funds as Federal Home Loan Bank ("FHLB") advances fell $4.6 million during the quarter. The bank realized net income of $5.1 million for the first three quarters of 2013, which was an increase of $811 thousand, or 19%, over the same period of 2012. The bank continues to have success in generating strong noninterest income from gains on sales of the government guaranteed portion of SBA and USDA loans. This continues to be a core strategy for the bank and the Company. On October 26, 2013, Cedar Rapids Bank & Trust grew with the addition of CNB's branch locations through the merger of CNB with and into the bank. CNB's merged branch offices will operate as a division of Cedar Rapids Bank & Trust under the name "Community Bank & Trust."
  • Rockford Bank & Trust, which opened in 2005, had total assets of $333.8 million at September 30, 2013, which was down slightly from June 30, 2013. During the third quarter of 2013, loans decreased $3.7 million, or 2%, primarily due to a $4.0 million loan that is 75% government guaranteed under the SBA program which was foreclosed on and moved into OREO. Taxable securities declined $3.1 million, or 7%, while tax-exempt municipal securities grew $5.1 million. The majority of these municipal securities are located in the Midwest with thorough underwriting conducted before investment. The bank realized net income of $1.0 million for the first three quarters of 2013, which was an increase of $812 thousand from the same period of 2012.
  • Community National Bank, which opened in 1997 and was acquired by the Company on May 13, 2013, had total assets of $276.4 million at September 30, 2013, which was flat from June 30, 2013. The bank's assets consisted primarily of loans totaling $189.7 million and a securities portfolio of $41.5 million. Funding these assets, the bank had $240.4 million of deposits. The bank reported net income for the quarter of $592 thousand. On October 26, 2013, CNB merged with and into Cedar Rapids Bank & Trust. CNB's merged branch offices will operate as a division of Cedar Rapids Bank & Trust under the name "Community Bank & Trust."

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company, which serves the Quad City, Cedar Rapids, and Rockford communities through its wholly owned subsidiary banks. Quad City Bank & Trust Company, which is based in Bettendorf, Iowa, and commenced operations in 1994, Cedar Rapids Bank & Trust Company, which is based in Cedar Rapids, Iowa, and commenced operations in 2001, and Rockford Bank & Trust Company, which is based in Rockford, Illinois, and commenced operations in 2005, provide full-service commercial and consumer banking and trust and asset management services. Quad City Bank & Trust Company also engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin. With the acquisition of Community National Bank on May 13, 2013, the Company now serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company.

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 and national economy; (ii) the economic impact of any future terrorist threats and attacks, and the response of the United States to any such threats and attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business, including Basel III, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued thereunder; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the integration of acquired entities, including CNB; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
September 30,
2013
June 30,
2013
December 31,
2012
September 30,
2012
(dollars in thousands, except share data)
CONDENSED BALANCE SHEET Amount % Amount % Amount % Amount %
Cash, federal funds sold, and interest-bearing deposits $ 122,779 5% $ 95,557 4% $ 110,488 5% $ 95,727 5%
Securities 703,699 28% 703,467 29% 602,239 29% 591,351 29%
Net loans/leases 1,517,321 61% 1,509,570 62% 1,267,462 61% 1,224,875 61%
Core deposit intangible 3,311 0% 3,440 0% -- 0% -- 0%
Goodwill 3,223 0% 3,223 0% 3,223 0% 3,223 0%
Other assets 135,381 6% 131,514 6% 110,318 5% 108,770 5%
Total assets $ 2,485,714 100% $ 2,446,771 100% $ 2,093,730 100% $ 2,023,946 100%
Total deposits $ 1,741,832 70% $ 1,716,780 70% $ 1,374,114 66% $ 1,343,235 66%
Total borrowings 557,513 22% 549,990 22% 547,758 26% 511,561 25%
Other liabilities 38,416 2% 34,555 1% 31,424 1% 30,029 2%
Total stockholders' equity 147,953 6% 145,446 6% 140,434 7% 139,121 7%
Total liabilities and stockholders' equity $ 2,485,714 100% $ 2,446,771 100% $ 2,093,730 100% $ 2,023,946 100%
SELECTED INFORMATION FOR COMMON STOCKHOLDERS' EQUITY
Common stockholders' equity * $ 94,791 $ 92,283 $ 87,271 $ 85,958
Common shares outstanding 5,810,602 5,797,067 4,918,202 4,862,778
Book value per common share ** $ 16.31 $ 15.92 $ 17.74 $ 17.65
Tangible book value per common share ** $ 15.19 $ 14.77 $ 17.08 $ 16.98
Closing stock price $ 15.89 $ 15.45 $ 13.22 $ 14.98
Market capitalization $ 92,330 $ 89,565 $ 65,019 $ 72,844
Market price / book value 97.40% 97.05% 74.50% 84.89%
Market price / tangible book value 104.64% 104.63% 77.39% 88.24%
Tangible common equity *** / total tangible assets (TCE/TA) 3.56% 3.51% 4.02% 4.09%
TCE/TA excluding accumulated other comprehensive income 3.96% 3.89% 3.80% 3.78%
REGULATORY CAPITAL RATIOS:
Total risk-based capital ratio 12.43% **** 12.20% 12.71% 12.98%
Tier 1 risk-based capital ratio 11.02% **** 10.82% 11.27% 11.52%
Tier 1 leverage capital ratio 7.77% **** 8.07% 8.13% 8.12%
For the quarter ended September 30, For the nine months ended September 30,
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY 2013 2012 2013 2012
Beginning balance $ 145,446 $ 139,322 $ 140,434 $ 144,433
Net income 3,812 3,185 11,122 9,861
Other comprehensive income (loss), net of tax (818) 1,644 (14,746) 1,368
Preferred and common cash dividends declared (811) (811) (2,663) (2,875)
Issuance of 834,715 shares of common stock for acquisition of CNB, net -- -- 13,017 --
Redemption of 10,223 shares of Series F Preferred Stock -- -- -- (10,223)
Purchase of noncontrolling interest -- (4,527) -- (4,527)
Other ***** 324 308 789 1,084
Ending balance $ 147,953 $ 139,121 $ 147,953 $ 139,121
* Includes noncontrolling interests and accumulated other comprehensive income
**Includes accumulated other comprehensive income and excludes noncontrolling interests
***Tangible common equity is defined as total common stockholders' equity excluding equity of noncontrolling interests and excluding goodwill and other intangibles. This ratio is a non-GAAP financial measure. The Company's management believes that this measure is important to many investors in the marketplace who are interested in changes period to period in common equity exclusive of changes in intangible assets.
****Subject to change upon final calculation for regulatory filings due after earnings release
*****Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
September 30,
2013
June 30,
2013
December 31,
2012
September 30,
2012
(dollars in thousands)
ANALYSIS OF LOAN DATA Amount % Amount % Amount % Amount %
Nonaccrual loans/leases $ 22,126 66% $ 27,782 82% $ 17,932 60% $ 17,731 61%
Accruing loans/leases past due 90 days or more 61 0% 3 0% 159 1% 203 1%
Troubled debt restructures - accruing 2,739 8% 2,178 6% 7,300 25% 6,009 21%
Other real estate owned 8,496 25% 3,860 11% 3,955 13% 5,003 17%
Other repossessed assets 255 1% 244 1% 212 1% 116 0%
Total nonperforming assets $ 33,677 100% $ 34,067 100% $ 29,558 100% $ 29,062 100%
Net charge-offs (calendar year-to-date) $ 1,808 $ 1,347 $ 3,235 $ 2,698
Loan/lease mix:
Commercial and industrial loans $ 471,257 31% $ 470,416 31% $ 394,244 31% $ 355,004 29%
Commercial real estate loans 714,701 46% 724,006 47% 593,979 46% 594,904 48%
Direct financing leases 121,268 8% 114,755 8% 103,686 8% 102,039 8%
Residential real estate loans 150,825 10% 143,093 9% 115,582 9% 112,492 9%
Installment and other consumer loans 77,226 5% 74,569 5% 76,720 6% 76,838 6%
Deferred loan/lease origination costs, net of fees 4,106 0% 3,887 0% 3,176 0% 3,015 0%
Total loans/leases $ 1,539,383 100% $ 1,530,726 100% $ 1,287,387 100% $ 1,244,292 100%
Less allowance for estimated losses on loans/leases 22,062 21,156 19,925 19,417
Net loans/leases $ 1,517,321 $ 1,509,570 $ 1,267,462 $ 1,224,875
ANALYSIS OF SECURITIES DATA
Securities mix:
U.S. government sponsored agency securities $ 367,525 52% $ 382,306 55% $ 338,609 57% $ 343,244 59%
Residential mortgage-backed and related securities 166,545 24% 177,155 25% 163,601 27% 155,691 26%
Municipal securities 166,771 24% 141,381 20% 97,615 16% 90,032 15%
Other securities 2,858 0% 2,625 0% 2,414 0% 2,384 0%
Total securities $ 703,699 100% $ 703,467 100% $ 602,239 100% $ 591,351 100%
ANALYSIS OF DEPOSIT DATA
Deposit mix:
Noninterest-bearing demand deposits $ 515,365 30% $ 493,964 29% $ 450,660 33% $ 417,284 31%
Interest-bearing demand deposits 780,546 45% 710,745 42% 587,201 43% 567,578 42%
Time deposits 382,819 22% 451,991 26% 290,933 21% 308,083 23%
Brokered time deposits 63,103 4% 60,080 3% 45,320 3% 50,290 4%
Total deposits $ 1,741,833 100% $ 1,716,780 100% $ 1,374,114 100% $ 1,343,235 100%
ANALYSIS OF BORROWINGS DATA
Borrowings mix:
FHLB advances $ 205,350 37% $ 209,950 38% $ 202,350 37% $ 196,350 38%
Wholesale structured repurchase agreements 130,000 23% 130,000 24% 130,000 24% 130,000 25%
Customer repurchase agreements 124,330 22% 115,326 21% 104,943 19% 114,248 22%
Federal funds purchased 44,930 8% 41,860 8% 66,140 12% 26,640 6%
Junior subordinated debentures 40,257 7% 40,210 7% 36,085 7% 36,085 7%
Other 12,646 2% 12,644 2% 8,240 1% 8,238 2%
Total borrowings $ 557,513 100% $ 549,990 100% $ 547,758 100% $ 511,561 100%
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended For the Nine Months Ended
September 30,
2013
June 30,
2013
September 30,
2012
September 30,
2013
September 30,
2012
(dollars in thousands, except per share data)
CONDENSED INCOME STATEMENT
Interest income $ 21,996 $ 20,139 $ 19,487 $ 60,673 $ 58,396
Interest expense 4,686 4,431 4,858 13,463 15,047
Net interest income 17,310 15,708 14,629 47,210 43,349
Provision for loan/lease losses 1,367 1,520 1,496 3,945 3,325
Net interest income after provision for loan/lease losses 15,943 14,188 13,133 43,265 40,024
Noninterest income 5,935 6,949 4,117 18,087 12,141
Noninterest expense 17,027 15,235 13,031 46,220 38,878
Net income before taxes 4,851 5,902 4,219 15,132 13,287
Income tax expense 1,039 1,857 1,035 4,010 3,426
Net income $ 3,812 $ 4,045 $ 3,184 $ 11,122 $ 9,861
Less: Net income attributable to noncontrolling interests -- -- 127 -- 495
Net income attributable to QCR Holdings, Inc. $ 3,812 $ 4,045 $ 3,057 $ 11,122 $ 9,366
Less: Preferred stock dividends 811 811 811 2,432 2,685
Net income attributable to QCR Holdings, Inc. common stockholders $ 3,001 $ 3,234 $ 2,246 $ 8,690 $ 6,681
Earnings per share attributable to QCR Holdings, Inc.:
Basic $ 0.52 $ 0.60 $ 0.45 $ 1.62 $ 1.37
Diluted $ 0.51 $ 0.59 $ 0.44 $ 1.59 $ 1.35
Earnings per common share (basic) attributable to QCR Holdings, Inc. LTM * $ 2.12 $ 2.05 $ 1.73
Weighted average common shares outstanding 5,806,019 5,393,062 4,978,699 5,375,557 4,871,626
Weighted average common and common equivalent shares outstanding 5,915,279 5,497,275 5,080,288 5,482,298 4,938,514
AVERAGE BALANCES
Assets $ 2,456,167 $ 2,323,336 $ 2,030,209 $ 2,296,505 $ 2,013,525
Loans/leases $ 1,529,771 $ 1,418,389 $ 1,227,326 $ 1,409,067 $ 1,212,323
Deposits $ 1,738,310 $ 1,551,095 $ 1,321,547 $ 1,557,757 $ 1,292,360
Total stockholders' equity $ 146,038 $ 146,671 $ 139,222 $ 144,631 $ 142,329
Common stockholders' equity $ 93,537 $ 90,659 $ 86,058 $ 91,031 $ 83,503
KEY PERFORMANCE RATIOS
Return on average assets (annualized) *** 0.62% 0.70% 0.60% 0.65% 0.62%
Return on average common equity (annualized) ** 12.83% 14.27% 10.44% 12.73% 10.67%
Return on average total equity (annualized) *** 10.44% 11.03% 8.78% 10.25% 8.77%
Price earnings ratio LTM * 7.50 x 7.54 x 8.66 x 7.50 x 8.66 x
Net interest margin (TEY) 3.07% 2.99% 3.20% 3.03% 3.18%
Nonperforming assets / total assets 1.35% 1.39% 1.44% 1.35% 1.44%
Net charge-offs / average loans/leases 0.03% 0.08% 0.07% 0.13% 0.22%
Allowance / total loans/leases **** 1.43% 1.38% 1.56% 1.43% 1.56%
Allowance / nonperforming loans **** 88.51% 70.61% 81.10% 88.51% 81.10%
Efficiency ratio 73.25% 67.24% 69.51% 70.78% 70.06%
Full-time equivalent employees ***** 431 438 355 431 355
* LTM: Last twelve months
** The numerator for this ratio is "Net income attributable to QCR Holdings, Inc. common stockholders"
*** The numerator for this ratio is "Net income attributable to QCR Holdings, Inc."
**** Upon acquisition per GAAP, the loans are recorded at market value which eliminated the allowance and impacts these ratios.
***** CNB had 75 and 77 full-time equivalent employees at September 30, 2013 and June 30, 2013, respectively.
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
ANALYSIS OF NET INTEREST INCOME AND MARGIN
For the Quarter Ended
September 30, 2013 June 30, 2013 September 30, 2012

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)
Securities * $ 717,195 $ 4,043 2.24% $ 714,808 $ 4,040 2.27% $ 619,650 $ 3,930 2.52%
Loans * 1,529,771 18,440 4.78% 1,418,389 16,530 4.67% 1,227,326 16,002 5.19%
Other 80,903 226 1.11% 60,099 196 1.31% 55,064 211 1.52%
Total earning assets * $ 2,327,869 $ 22,709 3.87% $ 2,193,296 $ 20,766 3.80% $ 1,902,040 $ 20,143 4.21%
Deposits $ 1,212,602 $ 1,394 0.46% $ 1,049,017 $ 1,177 0.45% $ 914,950 $ 1,489 0.65%
Borrowings 533,138 3,292 2.45% 593,416 3,254 2.20% 540,293 3,369 2.48%
Total interest-bearing liabilities $ 1,745,740 4,686 1.06% $ 1,642,433 4,431 1.08% $ 1,455,243 4,858 1.33%
Net interest income / spread * $ 18,023 2.81% $ 16,335 2.72% $ 15,285 2.89%
Net interest margin * 3.07% 2.99% 3.20%
For the Nine Months Ended
September 30, 2013 September 30, 2012

Average
Balance
Interest
Earned or
Paid

Average
Yield or Cost

Average
Balance
Interest
Earned or
Paid

Average
Yield or Cost
(dollars in thousands)
Securities * $ 693,547 $ 11,742 2.26% $ 603,756 $ 10,890 2.41%
Loans * 1,409,067 50,221 4.77% 1,212,323 48,307 5.32%
Other 65,533 606 1.24% 68,823 669 1.30%
Total earning assets * $ 2,168,147 $ 62,569 3.86% $ 1,884,902 $ 59,866 4.24%
Deposits $ 1,052,740 $ 3,687 0.47% $ 896,329 $ 4,834 0.72%
Borrowings 559,724 9,776 2.34% 551,756 10,213 2.47%
Total interest-bearing liabilities $ 1,612,464 13,463 1.12% $ 1,448,085 15,047 1.39%
Net interest income / spread * $ 49,106 2.74% $ 44,819 2.85%
Net interest margin * 3.03% 3.18%
* Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 34% tax rate for each period presented.
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended For the Nine Months Ended

September 30,
2013


June 30, 2013

September 30,
2012

September 30,
2013

September 30,
2012
ANALYSIS OF NONINTEREST INCOME (dollars in thousands)
Trust department fees $ 1,312 $ 1,197 $ 915 $ 3,549 $ 2,650
Investment advisory and management fees 634 695 576 1,939 1,776
Deposit service fees 1,229 1,054 847 3,191 2,627
Gain on sales of residential real estate loans 185 247 424 722 987
Gain on sales of government guaranteed portions of loans 338 766 261 1,949 979
Earnings on cash surrender value of life insurance 466 424 400 1,329 1,197
Credit card fees, net of processing costs 58 85 140 193 410
Subtotal $ 4,222 $ 4,468 $ 3,563 $ 12,872 $ 10,626
Bargain purchase gain on CNB acquisition -- 1,841 -- 1,841 --
Losses on other real estate owned, net (3) (83) (746) (533) (1,324)
Securities gains 417 16 -- 433 105
Other * 1,299 707 1,300 3,474 2,734
Total noninterest income $ 5,935 $ 6,949 $ 4,117 $ 18,087 $ 12,141
ANALYSIS OF NONINTEREST EXPENSE
Salaries and employee benefits $ 9,803 $ 9,186 $ 8,201 $ 27,732 $ 24,582
Occupancy and equipment expense 1,915 1,587 1,460 4,931 4,177
Professional and data processing fees 1,903 1,439 1,066 4,482 3,343
FDIC and other insurance 713 627 599 1,896 1,756
Loan/lease expense 396 252 273 893 755
Advertising and marketing 406 412 437 1,083 1,057
Postage and telephone 277 258 191 753 716
Stationery and supplies 143 151 140 405 418
Bank service charges 307 284 211 866 610
Subtotal $ 15,863 $ 14,196 $ 12,578 $ 43,041 $ 37,414
Acquisition costs 389 432 -- 1,178 --
Other-than-temporary-impairment losses on securities -- -- -- -- 62
Other 775 607 453 2,001 1,402
Total noninterest expense $ 17,027 $ 15,235 $ 13,031 $ 46,220 $ 38,878
* Following is a detailed breakdown of Other Noninterest Income:
Gain on sale of credit card loan portfolio $ -- $ -- $ -- $ 495 $ --
Gain on sale of credit card issuing operations -- -- -- 355 --
Debit card fees 265 257 240 752 729
Fees on interest rate swaps on commercial loans 44 -- 94 51 300
Miscellaneous 990 450 966 1,821 1,705
TOTAL $ 1,299 $ 707 $ 1,300 $ 3,474 $ 2,734

CONTACT: Todd A. Gipple Executive Vice President Chief Operating Officer Chief Financial Officer (309) 743-7745Source:QCR Holdings, Inc.