MOLINE, Ill., Jan. 28, 2009 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (Nasdaq:QCRH) today announced earnings for the year ended December 31, 2008 of $6.7 million, and diluted earnings per share for common shareholders of $1.06, compared to earnings of $5.8 million or $1.02 in diluted earnings per share for 2007. These results reflect an increase in earnings of $932 thousand over 2007, or 16%, and an increase in diluted earnings per share of $0.04.
For the fourth quarter of 2008, the Company reported breakeven earnings with a slight net loss of $55 thousand which translated into diluted earnings per share after preferred stock dividends of ($0.11). This was a decrease from the same quarter last year when the Company's earnings totaled $1.6 million and diluted earnings per share of $0.29. Earnings for the fourth quarter of 2008 were significantly impacted by additional loan/lease loss provisions as the Company increased its qualitative reserves due to the continued uncertainty in the national economy and made increased provisions regarding two specific commercial credits.
During the third quarter, the Company's wholly owned subsidiary, Quad City Bancard, Inc., sold its merchant credit card acquiring business. The resulting gain on sale, net of taxes and related expenses, was approximately $3.0 million and $0.65 per share, which was a significant contributor to 2008 earnings. The current and comparative financial results associated with the merchant credit card acquiring business have been reflected as discontinued operations within the accompanying tables as appropriate.
On December 31, 2008, the Company finalized the sale of its Milwaukee subsidiary, First Wisconsin Bank & Trust, for approximately $13.7 million which resulted in a gain, net of taxes and related expenses, of approximately $400 thousand and $0.08 per share. The current and comparative financial results associated with First Wisconsin Bank & Trust have also been reflected as discontinued operations within the accompanying tables as appropriate.
The Company's earnings from continuing operations were $5.0 million and $6.5 million for the years ended December 31, 2008 and 2007, respectively. Diluted earnings per share from continuing operations decreased from $1.18 to $0.69. The reduction in 2008 earnings from continuing operations was due to the significant increase in provision for loan/leases losses of $6.9 million. Helping to offset this increased provision expense was a dramatic increase in net interest income of $9.9 million, or 28%, from $35.0 million for the year ending December 31, 2007 to $44.9 million for the year ending December 31, 2008. Additionally, net interest margin improved significantly as it increased a total of 40 basis points from 2.92% to 3.32%.
"We are pleased with the sustained improvement in our net interest margin," stated Douglas M. Hultquist, President and CEO. "With the unprecedented and continued volatility in the interest rate environment, the pressure on margin has been experienced across our industry. Our management teams and talented bankers have worked very hard to successfully grow and strengthen our balance sheets and customer base to drive improved margins and growth in net interest income."
Mr. Hultquist added, "Despite the economic recession and its impact on our provision expense, we were able to achieve solid core earnings for the year. Earnings from continuing operations before provision and taxes totaled $15.9 million for 2008, which was an increase of $4.2 million, or 36%, from $11.7 million for 2007. This continued success in core earnings is a direct result of our bankers' strong focus on customer relationships."
During 2008, the Company's total assets increased nearly 9%, or $129.1 million, to $1.61 billion from $1.48 billion at December 31, 2007. During this same period, loans/leases increased at a rate of 15%, or $157.7 million, to $1.21 billion from $1.06 billion at December 31, 2007. Total deposits increased by $175.0 million to $1.06 billion at December 31, 2008 from $884.0 million at December 31, 2007, or 20%. Short-term and other borrowings totaled $431.8 million as of December 31, 2008, which was an increase of $9.0 million from $422.8 million as of December 31, 2007. Stockholders' equity increased $4.6 million to $90.6 million as of December 31, 2008, as compared to $86.1 million at December 31, 2007.
"We are pleased with the continued growth in market share that we've experienced in the Quad Cities, Cedar Rapids, and Rockford communities," stated Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer. "Strategic employee additions and enhancement in our systems over the years have helped to support this growth." He continued, "A concerted effort by our talented employees to continue to perform on our relationship-based banking model has been a key to our success."
Mr. Gipple added, "The Company, and all three subsidiary banks, continue to be well capitalized as of December 31, 2008 and we have adequate access to liquidity. While many banks experienced losses and reductions in their regulatory capital during 2008, we were profitable and actually added nearly $5 million, or 5%, to our stockholders' equity. Recently, we applied for and received preliminary approval for an investment of up to $38.24 million in capital under the Treasury Capital Purchase Program. We anticipate funding in mid-February pending shareholder approval. While our current capital position remains strong, given the uncertainty that our entire country faces over the severity and duration of the current economic recession, we believe it is prudent to maintain higher levels of capital during these challenging times. Our board of directors has concluded that the additional capital that can be raised through Treasury's capital program is cost effective and will be beneficial to our Company, as well as our clients, stockholders, and employees. Consistent with the intent of the Treasury Capital Purchase Program, we believe the additional capital will enhance our capacity to support the communities we serve through additional lending opportunities."
Nonperforming assets at December 31, 2008 were $23.8 million, which was an increase of $10.2 million from $13.6 million at September 30, 2008, resulting in an increase in the level of non-performing assets at the end of the fourth quarter to 1.48% of total assets, as compared to 0.83% of total assets at September 30, 2008. Of this increase, $9.2 million was attributable to two specific commercial credits. Management has thoroughly reviewed these loans and has provided specific reserves as appropriate. The Company's allowance for loan/lease losses to total loans/leases increased to 1.47% at December 31, 2008 from 1.23% at September 30, 2008, and from 1.07% at December 31, 2007. Furthermore, the Company's provision for loan/lease losses totaled $9.2 million for 2008 which was an increase of $6.9 million from 2007.
"The significant increase in provision expense was the primary reason for our reduced earnings from continuing operations year-over-year and quarter-over-quarter," stated Mr. Gipple. "There are three specific factors driving this increase. First, we grew our loan portfolio 15% during 2008. Second, due to the economic recession and the related uncertainty, management increased the qualitative factors impacting the allowance for loan/lease losses as we continue to carefully review these factors to insure the economic risk within our loan portfolio is appropriately quantified and reserved. Throughout the year, we've increased the qualitative factors for the local and national economy as needed. Third, we have experienced some degradation on specific commercial credits within our portfolio that required specific reserves. Maintaining credit quality during this economic downturn is our top priority and management frequently monitors the Company's loan/lease portfolio and the level of allowance for loan/lease losses."
2008 results for the Company's primary subsidiaries were as follows:
* Quad City Bank & Trust, the Company's first subsidiary bank, had
total consolidated assets of $908.6 million at December 31, 2008,
which was an increase of $47.9 million from $860.7 million at
December 31, 2007. At December 31, 2008, Quad City Bank & Trust
had net loans/leases of $661.8 million, which was an increase of
$28.3 million from $633.5 million as of December 31, 2007. During
this same period, deposits increased $65.5 million to $572.6
million. With this increase in deposits, the bank's reliance on
short-term and other borrowings continued to decrease as it moved
from $267.1 million as of December 31, 2007 down to $249.1 million
as of December 31, 2008. The bank realized earnings for the year
of $8.2 million which is a slight decrease of $346 thousand, or
4%, from one year ago.
* Cedar Rapids Bank & Trust, which opened in 2001, had total assets
of $468.3 million at December 31, 2008, which was an increase of
$84.3 million, or 22%, from $384.0 million at December 31, 2007.
At December 31, 2008, Cedar Rapids Bank & Trust had net loans of
$349.6 million, which was an increase of $63.5 million, or 22%,
from December 31, 2007; while deposits of $309.8 million reflected
an increase of $50.8 million, or 20%, for the year. Short-term
and other borrowings were $116.8 million as of December 31, 2008,
which was an increase of $25.1 million from $91.7 million as of
December 31, 2007. The bank realized earnings for 2008 of $3.1
million for an improvement of approximately $728 thousand, or
nearly 31%, from one year ago.
* Rockford Bank & Trust, which opened in 2005, had total assets of
$228.0 million at December 31, 2008, which was an increase of
$70.2 million, or 44%, from December 31, 2007. At December 31,
2008, Rockford Bank & Trust had net loans of $187.9 million and
deposits of $180.2 million, which represent increases from
December 31, 2007 of 46% and 50%, respectively. The bank realized
after-tax net losses for 2008 in the amount of $1.6 million, which
was an increase of $757 thousand from the losses of $850 thousand
for the same period in 2007. The 2008 loss was dramatically
impacted by a large provision made on a single commercial credit
in the fourth quarter. Rockford Bank & Trust continued to make
significant progress in reaching break-even, as the bank had
positive net income before provision expense and taxes of $520
thousand for 2008 as compared to a $614 thousand net loss before
provision expense and taxes for 2007.
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 and Trust Company, which is based in Bettendorf, Iowa and commenced operations in 1994, Cedar Rapids Bank and Trust Company, which is based in Cedar Rapids, Iowa and commenced operations in 2001, and Rockford Bank and Trust Company, which is based in Rockford, Illinois and commenced operations in 2005, provide full-service commercial and consumer banking and trust and asset management services. The Company also engages in credit card processing through its wholly owned subsidiary, Quad City Bancard, Inc., based in Moline, Illinois and commercial leasing through its 80% owned subsidiary, M2 Lease Funds, LLC, based in Milwaukee, Wisconsin.
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; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of our strategy to establish denovo banks in new markets; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
---------------------------------------
December 31, September 30, December 31,
2008 2008 2007
------------ ------------- ------------
(dollars in thousands,
except share data)
SELECTED BALANCE SHEET DATA *
Total assets $ 1,605,629 $ 1,641,416 $ 1,476,564
Securities $ 256,076 $ 231,973 $ 220,557
Total loans/leases $ 1,214,690 $ 1,177,748 $ 1,056,988
Allowance for estimated
loan/lease losses $ 17,809 $ 14,496 $ 11,315
Assets related to discontinued
operations, held for sale $ - $ 106,332 $ 68,223
Total deposits $ 1,058,959 $ 980,400 $ 884,005
Liabilities related to
discontinued operations, held
for sale $ - $ 94,789 $ 59,062
Total stockholders' equity $ 90,637 $ 89,438 $ 86,066
Common stockholders' equity $ 70,485 $ 69,286 $ 65,908
Common shares outstanding 4,509,637 4,625,088 4,597,744
Book value per common share $ 15.63 $ 14.98 $ 14.33
Closing stock price $ 10.00 $ 13.30 $ 14.25
Market capitalization $ 45,096 $ 61,514 $ 65,518
Market price/book value 63.98% 88.78% 99.41%
Full time equivalent employees 345 349 326
Tier 1 leverage capital ratio 7.10% 7.08% 7.40%
* First Wisconsin Bank & Trust was sold on December 31, 2008 and is
reported as discontinued operations for all periods reported.
Immediately prior to the sale, First Wisconsin Bank & Trust had total
assets of $122.9 million, gross loans of $80.2 million, deposits of
$98.0 million, and 24 full-time equivalent employees. These amounts
and the accompanying 2008 income statement results have been removed
from all financial schedules.
QCR HOLDINGS, INC
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of
---------------------------------------
December 31, September 30, December 31,
2008 2008 2007
------------ ----------- -----------
(dollars in thousands)
ANALYSIS OF LOAN DATA *
Nonaccrual loans/leases $ 19,711 $ 9,443 $ 6,488
Accruing loans/leases past due
90 days or more 222 2,218 500
Other real estate owned 3,857 1,960 496
------------ ----------- -----------
Total nonperforming assets $ 23,790 $ 13,621 $ 7,484
Net charge-offs (calendar
year-to-date) $ 2,728 $ 1,186 $ 1,452
Loan/lease mix:
Commercial loans $ 438,425 $ 475,439 $ 353,424
Commercial real estate loans 529,087 465,002 472,284
Direct financing leases 79,408 72,910 68,732
Residential real estate loans 79,229 78,875 83,328
Installment and other
consumer loans 88,541 85,522 79,220
------------ ----------- -----------
Total loans/leases $1,214,690 $1,177,748 $1,056,988
ANALYSIS OF DEPOSIT DATA *
Deposit mix:
Noninterest-bearing $ 161,126 $ 143,071 $ 160,533
Interest-bearing 897,833 837,329 723,472
------------ ----------- -----------
Total deposits $1,058,959 $ 980,400 $ 884,005
Interest-bearing deposit mix:
Nonmaturity deposits $ 387,746 $ 331,009 $ 334,018
Certificates of deposit 386,097 404,773 341,581
Brokered certificates of
deposit 123,990 101,547 47,873
------------ ----------- -----------
Total interest-bearing
deposits $ 897,833 $ 837,329 $ 723,472
* First Wisconsin Bank & Trust was sold on December 31, 2008 and is
reported as discontinued operations for all periods reported
QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended
--------------------------------------
December 31, September 30, December 31,
2008 2008 2007
------------ ------------ -----------
(dollars in thousands,
except per share data)
SELECTED INCOME STATEMENT DATA *
Interest income $ 21,664 $ 21,541 $ 21,611
Interest expense 9,790 9,800 12,274
----------- ----------- -----------
Net interest income 11,874 11,741 9,337
Provision for loan/lease
losses 4,728 2,154 252
----------- ----------- -----------
Net interest income after
provision for loan/lease
losses 7,146 9,587 9,085
Noninterest income 3,231 3,311 3,097
Noninterest expense 11,201 10,577 9,387
----------- ----------- -----------
Income from continuing
operations before taxes and
minority interest (824) 2,321 2,795
Minority interest in income of
consolidated subsidiary (74) 93 137
Income tax expense (benefit)
from continuing operations (419) 613 863
----------- ----------- -----------
Income (loss) from continuing
operations $ (331) $ 1,615 $ 1,795
Discontinued operations:
Gain on sale of merchant
credit card acquiring business -- 4,645 --
Operating income from merchant
credit card acquiring business -- 119 104
Gain on sale of First Wisconsin
Bank & Trust 495 -- --
Operating loss from First
Wisconsin Bank & Trust (131) (582) (447)
----------- ---------- -----------
Income (loss) from discontinued
operations before taxes 364 4,182 (343)
Income tax expense (benefit)
from discontinued operations 88 1,492 (158)
----------- ----------- -----------
Income (loss) from discontinued
operations $ 276 $ 2,690 $ (185)
Net income $ (55) $ 4,305 $ 1,610
Preferred stock dividends 446 446 268
----------- ----------- -----------
Net income available to common
stockholders $ (501) $ 3,859 $ 1,342
Earnings per share from
continuing operations:
Basic $ (0.17) $ 0.25 $ 0.33
Diluted $ (0.17) $ 0.25 $ 0.33
Earnings per share from
discontinued operations:
Basic $ 0.06 $ 0.58 $ (0.04)
Diluted $ 0.06 $ 0.58 $ (0.04)
Earnings per share:
Basic $ (0.11) $ 0.83 $ 0.29
Diluted $ (0.11) $ 0.83 $ 0.29
Earnings per common share
(basic) LTM ** $ 1.07 $ 1.47 $ 1.03
AVERAGE BALANCES *
Assets $ 1,571,570 $ 1,600,218 $ 1,426,079
Deposits $ 1,015,873 $ 1,008,107 $ 877,523
Loans/leases $ 1,179,925 $ 1,219,876 $ 1,024,669
Total stockholders' equity $ 91,024 $ 88,904 $ 79,782
Common stockholders' equity $ 70,872 $ 68,752 $ 66,592
KEY RATIOS *
Return on average assets
(annualized) -0.01% 1.08% 0.45%
Return on average common equity
(annualized) -0.31% 25.05% 9.67%
Price earnings ratio LTM ** 9.35x 9.05x 13.83x
Net interest margin (TEY) 3.34% 3.40% 3.02%
Nonperforming assets / total
assets 1.48% 0.83% 0.51%
Net charge-offs / average
loans/leases 0.13% 0.06% 0.14%
Allowance / total loans/leases 1.47% 1.23% 1.07%
Efficiency ratio 74.15% 70.27% 75.49%
For the Year Ended
-------------------------
December 31, December 31,
2008 2007
------------ -----------
(dollars in thousands, except
per share data)
SELECTED INCOME STATEMENT DATA *
Interest income $ 85,467 $ 83,140
Interest expense 40,524 48,139
----------- -----------
Net interest income 44,943 35,001
Provision for loan/lease losses 9,221 2,336
----------- -----------
Net interest income after provision
for loan/lease losses 35,722 32,665
Noninterest income 13,611 12,850
Noninterest expense 42,334 35,734
----------- -----------
Income from continuing operations
before taxes and minority inter 6,999 9,781
Minority interest in income of
consolidated subsidiary 288 388
Income tax expense (benefit)
from continuing operations 1,736 2,893
----------- -----------
Income (loss) from continuing operations $ 4,975 $ 6,500
Discontinued operations:
Gain on sale of merchant credit card
acquiring business 4,645 --
Operating income from merchant credit
card acquiring business 361 409
Gain on sale of First Wisconsin Bank &
Trust 495 --
Operating loss from First Wisconsin Bank &
Trust (2,921) (1,630)
----------- -----------
Income (loss) from discontinued operations
before taxes 2,580 (1,221)
Income tax expense (benefit) from
discontinued operations 846 (498)
----------- -----------
Income (loss) from discontinued operations $ 1,734 $ (723)
Net income $ 6,709 $ 5,777
Preferred stock dividends 1,785 1,072
----------- -----------
Net income available to common stockholders $ 4,924 $ 4,705
Earnings per share from continuing
operations:
Basic $ 0.69 $ 1.18
Diluted $ 0.69 $ 1.18
Earnings per share from discontinued
operations:
Basic $ 0.38 $ (0.16)
Diluted $ 0.37 $ (0.16)
Earnings per share:
Basic $ 1.07 $ 1.03
Diluted $ 1.06 $ 1.02
Earnings per common share (basic) LTM **
AVERAGE BALANCES *
Assets $ 1,552,747 $ 1,351,482
Deposits $ 936,354 $ 866,660
Loans/leases $ 1,124,255 $ 1,001,633
Total stockholders' equity $ 87,952 $ 75,018
Common stockholders' equity $ 67,800 $ 62,064
KEY RATIOS *
Return on average assets (annualized) 0.43% 0.43%
Return on average common equity (annualized) 9.90% 9.31%
Price earnings ratio LTM ** 9.35x 13.83x
Net interest margin (TEY) 3.32% 2.92%
Nonperforming assets / total assets 1.48% 0.51%
Net charge-offs / average loans/leases 0.24% 0.14%
Allowance / total loans/leases 1.47% 1.07%
Efficiency ratio 72.30% 74.68%
* First Wisconsin Bank & Trust was sold on December 31, 2008
and is reported as discontinued operations for all periods
reported
** LTM: Last twelve months
QCR HOLDINGS, INC
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
For the Quarter Ended
--------------------------------------
December 31, September 30, December 31,
2008 2008 2007
------------ ----------- -----------
(dollars in thousands, except
share data)
ANALYSIS OF NONINTEREST INCOME *
Credit card fees, net of
processing costs $ 252 $ 229 $ 237
Trust department fees 784 781 889
Deposit service fees 815 816 688
Gain on sales of loans, net 205 201 254
Gains on sales of securities 200 -- --
Gains on sale of foreclosed
assets 328 61 --
Gains on sales of other assets 14 -- --
Earnings on cash surrender
value of life insurance 230 241 204
Investment advisory and
management fees 408 481 442
Other (5) 501 383
------------ ----------- -----------
Total noninterest income $ 3,231 $ 3,311 $ 3,097
ANALYSIS OF NONINTEREST EXPENSE *
Salaries and employee benefits $ 6,823 $ 6,467 $ 5,862
Professional and data
processing fees 1,391 1,143 955
Advertising and marketing 316 386 346
Occupancy and equipment expense 1,300 1,326 1,194
Stationery and supplies 149 117 132
Postage and telephone 239 223 233
Bank service charges 129 160 146
FDIC and Other Insurance 346 338 299
(Gains) losses on disposal of
fixed assets -- -- (16)
Other 508 417 236
------------ ----------- -----------
Total noninterest expenses $ 11,201 $ 10,577 $ 9,387
WEIGHTED AVERAGE SHARES
Common shares outstanding (a) 4,630,253 4,624,056 4,596,788
Incremental shares from assumed
conversion:
Options and Employee Stock
Purchase Plan 16,847 22,443 11,239
------------ ----------- -----------
Adjusted weighted average
shares (b) 4,647,100 4,646,499 4,608,027
For the Year Ended
--------------------------
December 31, December 31,
2008 2007
----------- -----------
(dollars in thousands, except share data)
ANALYSIS OF NONINTEREST INCOME *
Credit card fees, net of processing costs $ 988 $ 747
Trust department fees 3,334 3,672
Deposit service fees 3,135 2,607
Gain on sales of loans, net 1,069 1,220
Gains on sales of securities 200 --
Gains on sale of foreclosed assets 394 1
Gains on sales of other assets 14 436
Earnings on cash surrender value of life
insurance 1,017 846
Investment advisory and management fees 1,975 1,576
Other 1,485 1,745
----------- ----------
Total noninterest income $ 13,611 $ 12,850
ANALYSIS OF NONINTEREST EXPENSE *
Salaries and employee benefits $ 26,124 $ 21,977
Professional and data processing fees 4,801 3,469
Advertising and marketing 1,297 1,116
Occupancy and equipment expense 5,091 4,717
Stationery and supplies 519 513
Postage and telephone 933 936
Bank service charges 560 565
FDIC and Other Insurance 1,317 996
(Gains) losses on disposal of fixed assets -- 223
Other 1,692 1,222
----------- -----------
Total noninterest expenses $ 42,334 $ 35,734
WEIGHTED AVERAGE SHARES
Common shares outstanding (a) 4,617,057 4,581,919
Incremental shares from assumed conversion:
Options and Employee Stock Purchase Plan 17,480 17,649
----------- -----------
Adjusted weighted average shares (b) 4,634,537 4,599,568
* First Wisconsin Bank & Trust was sold on December 31, 2008 and is
reported as discontinued operations for all periods reported
(a) Denominator for Basic Earnings Per Share
(b) Denominator for Diluted Earnings Per Share