• QCR Holdings, Inc. Announces Net Income of $29.1 Million for the Second Quarter of 2024

    المصدر: Nasdaq GlobeNewswire / 24 يوليو 2024 15:05:11   America/Chicago

    Second Quarter 2024 Highlights

    • Net income of $29.1 million, or $1.72 per diluted share
    • Net interest income up $1.5 million, or nearly 3% from the prior quarter, an 11% annualized growth rate
    • Adjusted NIM (TEY)(non-GAAP) expanded by 2 basis points from the prior quarter
    • Noninterest income up $4.0 million, or 15% from the prior quarter
    • Continued strong capital markets revenue of $17.8 million
    • Well-controlled noninterest expenses of $49.9 million, down $0.8 million, or nearly 2% from the prior quarter
    • Tangible book value (non-GAAP) per share growth of $1.72, or 15% annualized

    MOLINE, Ill., July 24, 2024 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced quarterly net income of $29.1 million and diluted earnings per share (“EPS”) of $1.72 for the second quarter of 2024, compared to net income of $26.7 million and diluted EPS of $1.58 for the first quarter of 2024.

    Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the second quarter of 2024 were $29.3 million and $1.73, respectively. For the first quarter of 2024, adjusted net income (non-GAAP) was $26.9 million and adjusted diluted EPS (non-GAAP) was $1.59. For the second quarter of 2023, both net income and adjusted net income (non-GAAP) were $28.4 million, and both diluted EPS and adjusted diluted EPS (non-GAAP) were $1.69.

     For the Quarter Ended  
     June 30,March 31,June 30,  
    $ in millions (except per share data)202420242023  
    Net Income$29.1$26.7$28.4  
    Diluted EPS$1.72$1.58$1.69  
    Adjusted Net Income (non-GAAP)*$29.3$26.9$28.4  
    Adjusted Diluted EPS (non-GAAP)*$1.73$1.59$1.69  
             

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

    “We delivered outstanding second quarter results, highlighted by expanded net interest margin and growth in net interest income. We also had another quarter of strong capital markets revenue and well-controlled expenses,” said Larry J. Helling, Chief Executive Officer. “In addition, we maintained our excellent asset quality and further strengthened our capital levels.”

    Net Interest Income Grew 3% and Margin Expanded

    Net interest income for the second quarter of 2024 totaled $56.2 million, an increase of $1.5 million from the first quarter of 2024, driven by an expanded margin and strong loan growth. Loan discount accretion was $268 thousand during the second quarter, a decrease of $95 thousand from the prior quarter.

    Net interest margin (“NIM”) was 2.82% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.27% for the second quarter, as compared to 2.82% and 3.25% for the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.26%, represented an increase of 2 basis points from 3.24% for the first quarter of 2024.  

    “Our adjusted NIM, on a tax equivalent yield basis, expanded by 2 basis points from the first quarter to 3.26% and was at the upper end of our guidance range,” said Todd A. Gipple, President and Chief Financial Officer. “The increase was due to a combination of higher loan yields and moderating deposit costs. Notably, the shift in our deposit composition has stabilized as our noninterest-bearing deposits remained steady combined with modest changes in our interest-bearing and core time deposits. Looking ahead, we anticipate further growth in net interest income and are guiding to a third quarter adjusted NIM TEY (non-GAAP) in a range of static to up 5 basis points.”

    Strong Noninterest Income Including $17.8 Million of Capital Markets Revenue

    Noninterest income for the second quarter of 2024 totaled $30.9 million, up from $26.9 million in the first quarter of 2024. The Company generated $17.8 million of capital markets revenue in the quarter, as compared to $16.5 million in the prior quarter. Wealth management revenue was $4.3 million for the quarter, a slight increase from the first quarter of 2024 and up just over 26% on an annualized basis year-to-date. Additionally, the Company realized income of $2.2 million from bank owned life insurance policy proceeds received during the second quarter of 2024.

    “Our capital markets revenue was strong again in the second quarter as our low-income housing tax credit (“LIHTC”) lending and revenue from swap fees continues to benefit from the strong demand for affordable housing,” added Mr. Gipple. “Our LIHTC lending and capital markets revenue pipelines remain healthy. In addition, our wealth management business is well-positioned for further growth as we continue to add new clients and expand geographically into our Southwest Missouri and Central Iowa markets.”

    Well-Controlled Noninterest Expenses of $49.9 Million

    Noninterest expense for the second quarter of 2024 totaled $49.9 million, compared to $50.7 million for the first quarter and $49.7 million for the second quarter of 2023. The linked-quarter decrease was primarily due to lower salaries and employee benefits and lower loan/lease expense, partially offset by higher professional and data processing expense. This created positive operating leverage and contributed to a 500 basis point reduction in the Company’s efficiency ratio (non-GAAP) which improved to 57% in the second quarter.

    Solid Deposit Levels

    During the second quarter of 2024, the Company’s total deposits decreased modestly by $42.1 million, or less than 1%, to $6.8 billion. “Year-to-date, we have grown total deposits by $250.7 million, or 7.7% on an annualized basis, reflecting our ongoing commitment to expanding our market share and establishing new relationships within the communities we serve,” added Mr. Helling.

    Total uninsured and uncollateralized deposits remain very low at 18% of total deposits as of the end of the second quarter of 2024, as compared to 20% as of the end of the first quarter of 2024. The Company maintained approximately $3.1 billion of available liquidity sources as of June 30, 2024, which included $1.2 billion of immediately available liquidity.

    Continued Loan Growth

    During the second quarter of 2024, the Company’s total loans and leases grew $206.1 million to $6.9 billion. At quarter end, the Company held $243.2 million of LIHTC loans as loans held for sale in anticipation of the Company’s next loan securitization.

    “Our year-to-date total loan growth is 9.5% annualized, which is within our annual target range of 8% to 10%. Year-to-date loan growth, net of loans identified for securitization, stands at 2.1% annualized,” added Mr. Helling. “Given our current pipeline and the ongoing strength of our markets, we are maintaining our loan growth target for the full year 2024 of 8% to 10%, prior to the loan securitizations that we have planned for the year.”  

    Asset Quality Remains Excellent

    The Company’s nonperforming assets (“NPAs”) to total assets ratio was 0.39% on June 30, 2024, increasing modestly from 0.36% on March 31, 2024. NPAs totaled $34.5 million at the end of the second quarter of 2024, a $3.2 million increase from the prior quarter.

    Notably, as a leading indicator of asset quality, the Company's total criticized loans were down by $17.1 million on a linked-quarter basis, and the ratio of criticized loans to total loans and leases as of June 30, 2024 improved to 2.41%, as compared to 2.75% as of March 31, 2024.

    The Company recorded a total provision for credit losses of $5.5 million during the quarter with $4.3 million related to credit loss expense for loans and $1.2 million related to unfunded commitments. Charge-offs were down significantly in the second quarter of 2024 at $1.8 million, a decrease of $1.8 million, or 50% from the prior quarter.

    The increased provision during the quarter was due to strong loan growth and the impact of declining GDP on the Company’s CECL model factors. The increased provision combined with the sharp reduction in charge-offs resulted in an allowance for credit losses to total loans held for investment that was static quarter over quarter at 1.33%.

    Continued Strong Capital Levels

    As of June 30, 2024, the Company’s total risk-based capital ratio increased to 14.33%, the common equity tier 1 ratio increased to 10.00% and the tangible common equity to tangible assets ratio (“TCE”) (non-GAAP) increased to 9.00%. By comparison, these ratios were 14.30%, 9.91% and 8.94%, respectively, as of March 31, 2024. The Company remains focused on growing capital and targeting TCE (non-GAAP) in the top quartile of its peer group.

    The Company’s tangible book value per share (non-GAAP) increased by $1.72, or 15.3% annualized, during the second quarter of 2024. The change in accumulated other comprehensive income was negligible as of the end of the second quarter when comparing to the prior quarter of 2024. Tangible book value per share has grown by $6.66 since June 30, 2023, for an annualized growth rate of nearly 17%. The combination of strong earnings and a modest dividend primarily contributed to the improvement in tangible book value per share (non-GAAP).

    Conference Call Details

    The Company will host an earnings call/webcast tomorrow, July 25, 2024, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through August 1, 2024. The replay access information is 877-344-7529 (international 412-317-0088); access code 8771212. A webcast of the teleconference can be accessed on the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

    About Us
    QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank in 2022, with the combined entity operating under the Guaranty Bank name. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly owned subsidiary, m2 Equipment Finance, LLC, based in Waukesha, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2024, the Company had $8.9 billion in assets, $6.9 billion in loans and $6.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

    Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
            
    A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economies(including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business as a result of the upcoming 2024 presidential election or any changes in response to failures of other banks; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xixi) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

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

          

    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
          
     As of    
     June 30,March 31,December 31,September 30,June 30,
     20242024202320232023
          
     (dollars in thousands)
          
    CONDENSED BALANCE SHEET     
          
    Cash and due from banks$92,173 $80,988 $97,123 $104,265 $84,084 
    Federal funds sold and interest-bearing deposits 102,262  77,020  140,369  80,650  175,012 
    Securities, net of allowance for credit losses 1,033,199  1,031,861  1,005,528  896,394  882,888 
    Loans receivable held for sale (1) 246,124  275,344  2,594  278,893  295,057 
    Loans/leases receivable held for investment 6,608,262  6,372,992  6,540,822  6,327,414  6,084,263 
    Allowance for credit losses (87,706) (84,470) (87,200) (87,669) (85,797)
    Intangibles 12,441  13,131  13,821  14,537  15,228 
    Goodwill 139,027  139,027  139,027  139,027  139,027 
    Derivatives 194,354  183,888  188,978  291,295  170,294 
    Other assets 531,855  509,768  497,832  495,251  466,617 
    Total assets$ 8,871,991 $ 8,599,549 $ 8,538,894 $ 8,540,057 $ 8,226,673 
          
    Total deposits$6,764,667 $6,806,775 $6,514,005 $6,494,852 $6,606,720 
    Total borrowings 768,671  489,633  718,295  712,126  418,368 
    Derivatives 221,798  211,677  214,098  320,220  195,841 
    Other liabilities 180,536  184,122  205,900  184,476  183,055 
    Total stockholders' equity 936,319  907,342  886,596  828,383  822,689 
    Total liabilities and stockholders' equity$ 8,871,991 $ 8,599,549 $ 8,538,894 $ 8,540,057 $ 8,226,673 
          
    ANALYSIS OF LOAN PORTFOLIO     
    Loan/lease mix: (2)     
    Commercial and industrial - revolving$362,115 $326,129 $325,243 $299,588 $304,617 
    Commercial and industrial - other 1,370,561  1,374,333  1,390,068  1,381,967  1,308,853 
    Commercial and industrial - other - LIHTC 92,637  96,276  91,710  105,601  93,700 
    Total commercial and industrial 1,825,313  1,796,738  1,807,021  1,787,156  1,707,170 
    Commercial real estate, owner occupied 633,596  621,069  607,365  610,618  609,717 
    Commercial real estate, non-owner occupied 1,082,457  1,055,089  1,008,892  955,552  963,814 
    Construction and land development 331,454  410,918  477,424  472,695  437,682 
    Construction and land development - LIHTC 750,894  738,609  943,101  921,359  870,084 
    Multi-family 329,239  296,245  284,721  282,541  280,418 
    Multi-family - LIHTC 1,148,244  1,007,321  711,422  874,439  820,376 
    Direct financing leases 25,808  28,089  31,164  34,401  32,937 
    1-4 family real estate 583,542  563,358  544,971  539,931  535,405 
    Consumer 143,839  130,900  127,335  127,615  121,717 
    Total loans/leases$6,854,386 $6,648,336 $6,543,416 $6,606,307 $6,379,320 
    Less allowance for credit losses 87,706  84,470  87,200  87,669  85,797 
    Net loans/leases$ 6,766,680 $ 6,563,866 $ 6,456,216 $ 6,518,638 $ 6,293,523 
          
    ANALYSIS OF SECURITIES PORTFOLIO     
    Securities mix:     
    U.S. government sponsored agency securities$20,101 $14,442 $14,973 $16,002 $18,942 
    Municipal securities 885,046  884,469  853,645  764,017  743,608 
    Residential mortgage-backed and related securities 54,708  56,071  59,196  57,946  60,958 
    Asset backed securities 12,721  14,285  15,423  16,326  17,393 
    Other securities 38,464  40,539  41,115  43,272  43,156 
    Trading securities 22,362  22,258  22,368  -  - 
    Total securities (3)$1,033,402 $1,032,064 $1,006,720 $897,563 $884,057 
    Less allowance for credit losses 203  203  1,192  1,169  1,169 
    Net securities$ 1,033,199 $ 1,031,861 $ 1,005,528 $ 896,394 $ 882,888 
          
    ANALYSIS OF DEPOSITS     
    Deposit mix:     
    Noninterest-bearing demand deposits$956,445 $955,167 $1,038,689 $1,027,791 $1,101,605 
    Interest-bearing demand deposits 4,644,918  4,714,555  4,338,390  4,416,725  4,374,847 
    Time deposits 859,593  875,491  851,950  788,692  765,801 
    Brokered deposits 303,711  261,562  284,976  261,644  364,467 
    Total deposits$ 6,764,667 $ 6,806,775 $ 6,514,005 $ 6,494,852 $ 6,606,720 
          
    ANALYSIS OF BORROWINGS     
    Borrowings mix:     
    Term FHLB advances$135,000 $135,000 $135,000 $135,000 $135,000 
    Overnight FHLB advances 350,000  70,000  300,000  295,000  - 
    Other short-term borrowings 1,600  2,700  1,500  470  1,850 
    Subordinated notes 233,276  233,170  233,064  232,958  232,852 
    Junior subordinated debentures 48,795  48,763  48,731  48,698  48,666 
    Total borrowings$ 768,671 $ 489,633 $ 718,295 $ 712,126 $ 418,368 
          
    (1) Loans with a fair value of $243.2 million, $274.8 million, $278.0 million and $291.0 million have been identified for securitization and are included in LHFS at June 30, 2024, March 31, 2024, September 30, 2023 and June 30, 2023 respectively.
    (2) Loan categories with significant LIHTC loan balances have been broken out separately. Total LIHTC balances within the loan/lease portfolio were $2.0 billion at June 30, 2024.
    (3) As of June 30, 2024, March 31, 2024 and December 31, 2023, trading securities consisted of retained beneficial interests acquired in conjunction with Freddie Mac securitizations completed by the Company in 2023.
       



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
            
       For the Quarter Ended
       June 30,March 31,December 31,September 30,June 30,
       20242024202320232023
            
       (dollars in thousands, except per share data)
            
    INCOME STATEMENT      
    Interest income $119,746$115,049 $112,248 $108,568 $98,377
    Interest expense  63,583 60,350  56,512  53,313  45,172
    Net interest income  56,163 54,699  55,736  55,255  53,205
    Provision for credit losses  5,496 2,969  5,199  3,806  3,606
    Net interest income after provision for credit losses $ 50,667$ 51,730 $ 50,537 $ 51,449 $ 49,599
            
            
    Trust fees  $3,103$3,199 $3,084 $2,863 $2,844
    Investment advisory and management fees  1,214 1,101  1,052  947  986
    Deposit service fees  1,986 2,022  2,008  2,107  2,034
    Gains on sales of residential real estate loans, net  540 382  323  476  500
    Gains on sales of government guaranteed portions of loans, net  12 24  24  -  -
    Capital markets revenue  17,758 16,457  36,956  15,596  22,490
    Securities gains, net  - -  -  -  12
    Earnings on bank-owned life insurance  2,964 868  832  1,807  838
    Debit card fees  1,571 1,466  1,561  1,584  1,589
    Correspondent banking fees  510 512  465  450  356
    Loan related fee income  962 836  845  800  770
    Fair value gain (loss) on derivatives and trading securities  51 (163) (582) (336) 83
    Other   218 154  1,161  299  18
    Total noninterest income $ 30,889$ 26,858 $ 47,729 $ 26,593 $ 32,520
            
            
    Salaries and employee benefits $31,079$31,860 $41,059 $32,098 $31,459
    Occupancy and equipment expense  6,377 6,514  6,789  6,228  6,100
    Professional and data processing fees  4,823 4,613  4,223  4,456  4,078
    FDIC insurance, other insurance and regulatory fees  1,854 1,945  2,115  1,721  1,927
    Loan/lease expense  151 378  834  826  652
    Net cost of (income from) and gains/losses on operations of other real estate  28 (30) 38  3  -
    Advertising and marketing  1,565 1,483  1,641  1,429  1,735
    Communication and data connectivity  318 401  449  478  471
    Supplies   259 275  333  335  281
    Bank service charges  622 568  761  605  621
    Correspondent banking expense  363 305  300  232  221
    Intangibles amortization  690 690  716  691  765
    Payment card processing  706 646  836  733  542
    Trust expense  379 425  413  432  337
    Other   674 617  431  814  538
    Total noninterest expense $ 49,888$ 50,690 $ 60,938 $ 51,081 $ 49,727
            
    Net income before income taxes $ 31,668$ 27,898 $ 37,328 $ 26,961 $ 32,392
    Federal and state income tax expense  2,554 1,172  4,473  1,840  3,967
    Net income  $ 29,114$ 26,726 $ 32,855 $ 25,121 $ 28,425
            
    Basic EPS $1.73$1.59 $1.96 $1.50 $1.70
    Diluted EPS $1.72$1.58 $1.95 $1.49 $1.69
            
            
    Weighted average common shares outstanding  16,814,814 16,783,348  16,734,080  16,717,303  16,701,950
    Weighted average common and common equivalent shares outstanding  16,921,854 16,910,675  16,875,952  16,847,951  16,799,527
            



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
          
       For the Six Months Ended
       June 30, June 30,
       2024 2023
          
       (dollars in thousands, except per share data)
          
    INCOME STATEMENT    
    Interest income $234,795  $192,594 
    Interest expense  123,933   82,579 
    Net interest income  110,862   110,015 
    Provision for credit losses  8,465   7,534 
    Net interest income after provision for credit losses $ 102,397  $ 102,481 
          
          
    Trust fees  $6,302  $5,750 
    Investment advisory and management fees  2,315   1,865 
    Deposit service fees  4,008   4,062 
    Gains on sales of residential real estate loans, net  922   812 
    Gains on sales of government guaranteed portions of loans, net  36   30 
    Capital markets revenue  34,215   39,513 
    Securities losses, net  -   (451)
    Earnings on bank-owned life insurance  3,832   1,545 
    Debit card fees  3,037   3,055 
    Correspondent banking fees  1,022   747 
    Loan related fee income  1,798   1,421 
    Fair value loss on derivatives and trading securities  (112)  (344)
    Other   372   357 
    Total noninterest income $ 57,747  $ 58,362 
          
          
    Salaries and employee benefits $62,939  $63,462 
    Occupancy and equipment expense  12,891   12,014 
    Professional and data processing fees  9,436   7,592 
    Post-acquisition compensation, transition and integration costs  -   207 
    FDIC insurance, other insurance and regulatory fees  3,799   3,301 
    Loan/lease expense  529   1,208 
    Net cost of (income from) and gains/losses on operations of other real estate   (2)  (67)
    Advertising and marketing  3,048   2,972 
    Communication and data connectivity  719   1,136 
    Supplies   534   586 
    Bank service charges  1,190   1,226 
    Correspondent banking expense  668   431 
    Intangibles amortization  1,380   1,531 
    Payment card processing  1,352   1,087 
    Trust expense  804   551 
    Other   1,291   1,275 
    Total noninterest expense $ 100,578  $ 98,512 
          
    Net income before income taxes $ 59,566  $ 62,331 
    Federal and state income tax expense  3,726   6,749 
    Net income  $ 55,840  $ 55,582 
          
    Basic EPS $3.32  $3.32 
    Diluted EPS $3.30  $3.29 
          
          
    Weighted average common shares outstanding  16,799,081   16,739,120 
    Weighted average common and common equivalent shares outstanding 16,916,264   16,870,830 
          



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
             
     As of and for the Quarter Ended For the Six Months Ended
     June 30,March 31,December 31,September 30,June 30, June 30,June 30,
     20242024202320232023 20242023
             
     (dollars in thousands, except per share data)
             
    COMMON SHARE DATA        
    Common shares outstanding 16,824,985  16,807,056  16,749,254  16,731,646  16,713,853    
    Book value per common share (1)$55.65 $53.99 $52.93 $49.51 $49.22    
    Tangible book value per common share (Non-GAAP) (2)$46.65 $44.93 $43.81 $40.33 $39.99    
    Closing stock price$60.00 $60.74 $58.39 $48.52 $41.03    
    Market capitalization$1,009,499 $1,020,861 $977,989 $811,819 $685,769    
    Market price / book value 107.82% 112.51% 100.31% 98.00% 83.36%   
    Market price / tangible book value 128.62% 135.18% 133.29% 120.30% 102.59%   
    Earnings per common share (basic) LTM (3)$6.78 $6.75 $6.78 $6.65 $6.89    
    Price earnings ratio LTM (3)8.85 x9.00 x8.61 x7.30 x5.96 x   
    TCE / TA (Non-GAAP) (4) 9.00% 8.94% 8.75% 8.05% 8.28%   
             
             
    CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY    
    Beginning balance$907,342 $886,596 $828,383 $822,689 $801,494    
    Net income 29,114  26,726  32,855  25,121  28,425    
    Other comprehensive income (loss), net of tax (368) (5,373) 25,363  (19,415) (6,336)   
    Common stock cash dividends declared (1,008) (1,008) (1,004) (1,003) (1,003)   
    Repurchase and cancellation of shares of common stock as a result of a share repurchase program -  -  -  -  (967)   
    Other (5) 1,239  401  999  991  1,076    
    Ending balance$ 936,319 $ 907,342 $ 886,596 $ 828,383 $ 822,689    
             
             
    REGULATORY CAPITAL RATIOS (6):        
    Total risk-based capital ratio 14.33% 14.30% 14.29% 14.48% 14.64%   
    Tier 1 risk-based capital ratio 10.58% 10.50% 10.27% 10.30% 10.34%   
    Tier 1 leverage capital ratio 10.41% 10.33% 10.03% 9.92% 10.06%   
    Common equity tier 1 ratio 10.00% 9.91% 9.67% 9.68% 9.70%   
             
             
    KEY PERFORMANCE RATIOS AND OTHER METRICS         
    Return on average assets (annualized) 1.34% 1.25% 1.53% 1.21% 1.44%  1.30% 1.42%
    Return on average total equity (annualized) 12.72% 11.83% 15.35% 11.95% 13.97%  12.32% 13.91%
    Net interest margin 2.82% 2.82% 2.90% 2.89% 2.93%  2.82% 3.05%
    Net interest margin (TEY) (Non-GAAP)(7) 3.27% 3.25% 3.32% 3.31% 3.29%  3.26% 3.40%
    Efficiency ratio (Non-GAAP) (8) 57.31% 62.15% 58.90% 62.41% 58.01%  59.65% 58.51%
    Gross loans/leases held for investment / total assets 74.48% 74.11% 76.60% 74.09% 73.96%  74.48% 77.54%
    Gross loans/leases held for investment / total deposits 97.69% 93.63% 100.41% 97.42% 92.09%  97.69% 96.56%
    Effective tax rate 8.06% 4.20% 11.98% 6.82% 12.25%  6.26% 10.83%
    Full-time equivalent employees (9) 988  986  996  987  1009   988  1009 
             
             
    AVERAGE BALANCES         
    Assets$8,776,002 $8,550,855 $8,535,732 $8,287,813 $7,924,597  $8,663,429 $7,915,763 
    Loans/leases 6,779,075  6,598,614  6,483,572  6,476,512  6,219,980   6,688,844  6,192,700 
    Deposits 6,687,188  6,595,453  6,485,154  6,342,339  6,292,481   6,641,324  6,236,374 
    Total stockholders' equity 921,986  903,371  852,163  837,734  816,882   912,679  805,845 
             
             
             
    (1) Includes accumulated other comprehensive income (loss).
    (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets. See GAAP to Non-GAAP reconciliations.
    (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) The increase in full-time equivalent employees in the second quarter of 2023 and the subsequent decline in the third quarter of 2023 includes 19 summer interns
             



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
                 
    ANALYSIS OF NET INTEREST INCOME AND MARGIN
    		       
                 
      For the Quarter Ended
      June 30, 2024 March 31, 2024 June 30, 2023
      Average BalanceInterest Earned or PaidAverage Yield or Cost Average BalanceInterest Earned or PaidAverage Yield or Cost Average BalanceInterest Earned or PaidAverage Yield or Cost
                 
      (dollars in thousands)
                 
    Fed funds sold $13,065$1835.54% $19,955$2695.42% $16,976$2235.27%
    Interest-bearing deposits at financial institutions 80,998 1,1395.66%  91,557 1,2005.27%  90,814 1,1234.96%
    Investment securities - taxable 377,747 4,2864.53%  373,540 4,2614.55%  342,991 3,6934.30%
    Investment securities - nontaxable (1) 704,761 9,4625.37%  685,969 9,3495.45%  577,494 6,2174.31%
    Restricted investment securities 43,398 8697.92%  38,085 6747.00%  35,031 5065.71%
    Loans (1)  6,779,075 112,7196.69%  6,598,614 107,6736.56%  6,219,980 93,1596.01%
    Total earning assets (1)$7,999,044$128,6586.46% $7,807,720$123,4266.35% $7,283,286$104,9215.78%
                 
    Interest-bearing deposits$4,649,625$40,9243.54% $4,529,325$39,0723.47% $3,965,592$27,2272.75%
    Time deposits  1,091,870 12,1284.47%  1,107,622 12,3454.48%  1,190,440 11,2193.78%
    Short-term borrowings 1,622 215.18%  1,763 235.16%  1,980 346.82%
    Federal Home Loan Bank advances 464,231 6,2385.32%  355,220 4,7385.28%  211,593 2,6534.96%
    Subordinated debentures 233,207 3,5826.14%  233,101 3,4805.97%  232,782 3,3035.68%
    Junior subordinated debentures 48,774 6885.58%  48,742 6925.62%  48,647 7386.00%
    Total interest-bearing liabilities$6,489,329$63,5813.93% $6,275,773$60,3503.86% $5,651,034$45,1743.20%
                 
    Net interest income (1) $65,077   $63,076   $59,747 
    Net interest margin (2)  2.82%   2.82%   2.93%
    Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.27%   3.25%   3.29%
    Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.26%   3.24%   3.28%
                 
                 
      For the Six Months Ended    
      June 30, 2024 June 30, 2023  
      Average BalanceInterest Earned or PaidAverage Yield or Cost Average BalanceInterest Earned or PaidAverage Yield or Cost    
                 
      (dollars in thousands)    
                 
    Fed funds sold $16,510$4525.41% $18,119$4575.09%    
    Interest-bearing deposits at financial institutions 86,277 2,3395.45%  82,246 1,9454.77%    
    Investment securities - taxable 375,644 8,5464.54%  337,844 7,0594.17%    
    Investment securities - nontaxable (1) 695,365 18,8135.41%  598,244 13,0094.35%    
    Restricted investment securities 40,742 1,5437.49%  36,391 1,0185.56%    
    Loans (1)  6,688,844 220,3926.63%  6,192,700 181,7075.92%    
    Total earning assets (1)$7,903,382$252,0856.41% $7,265,544$205,1955.69%    
                 
    Interest-bearing deposits$4,589,479$80,0273.51% $4,016,217$51,0032.56%    
    Time deposits  1,099,746 24,4734.48%  1,031,062 17,2223.37%    
    Short-term borrowings 1,688 445.19%  4,642 1325.75%    
    Federal Home Loan Bank advances 409,725 10,9775.30%  253,729 6,1744.84%    
    Subordinated debentures 233,154 7,0626.06%  232,731 6,6155.68%    
    Junior subordinated debentures 48,758 1,3815.60%  48,630 1,4335.86%    
    Total interest-bearing liabilities$6,382,550$123,9643.90% $5,587,011$82,5792.97%    
                 
    Net interest income (1) $128,121   $122,616     
    Net interest margin (2)  2.82%   3.05%    
    Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.26%   3.40%    
    Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.24%   3.38%    
                 
                 
    (1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
    (2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
    (3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
                 



    QCR Holding, Inc.
    Consolidated Financial Highlights
    (Unaudited)
          
     As of
     June 30,March 31,December 31,September 30,June 30,
     20242024202320232023
          
     (dollars in thousands, except per share data)
          
    ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES     
    Beginning balance$84,470 $87,200 $87,669 $85,797 $86,573 
    Change in ACL for transfer of loans to LHFS 498  (3,377) 266  175  (2,277)
    Credit loss expense 4,343  3,736  2,519  3,260  3,313 
    Loans/leases charged off (1,751) (3,560) (3,354) (1,816) (1,947)
    Recoveries on loans/leases previously charged off 146  471  100  253  135 
    Ending balance$ 87,706 $ 84,470 $ 87,200 $ 87,669 $ 85,797 
          
          
    NONPERFORMING ASSETS      
    Nonaccrual loans/leases$33,546 $29,439 $32,753 $34,568 $26,062 
    Accruing loans/leases past due 90 days or more 87  142  86  -  83 
    Total nonperforming loans/leases 33,633  29,581  32,839  34,568  26,145 
    Other real estate owned 369  784  1,347  120  - 
    Other repossessed assets 512  962  -  -  - 
    Total nonperforming assets$ 34,514 $ 31,327 $ 34,186 $ 34,688 $ 26,145 
          
          
    ASSET QUALITY RATIOS     
    Nonperforming assets / total assets 0.39% 0.36% 0.40% 0.41% 0.32%
    ACL for loans and leases / total loans/leases held for investment 1.33% 1.33% 1.33% 1.39% 1.41%
    ACL for loans and leases / nonperforming loans/leases 260.77% 285.55% 265.54% 253.61% 328.16%
    Net charge-offs as a % of average loans/leases 0.02% 0.05% 0.05% 0.02% 0.03%
          
          
          
    INTERNALLY ASSIGNED RISK RATING (1) (2)     
    Special mention$85,096 $111,729 $125,308 $128,052 $117,761 
    Substandard (3) 80,345  70,841  70,425  72,550  67,192 
    Doubtful (3) -  -  -  -  - 
        Total Criticized loans (4)$165,441 $182,570 $195,733 $200,602 $184,953 
          
    Classified loans as a % of total loans/leases (3) 1.17% 1.07% 1.08% 1.10% 1.05%
    Total Criticized loans as a % of total loans/leases (4) 2.41% 2.75% 2.99% 3.04% 2.90%
          
          
          
          
    (1) During the first quarter of 2024, the Company revised the risk rating scale used for credit quality monitoring.
    (2) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass for the government guaranteed portion.
    (3) Classified loans are defined as loans with internally assigned risk ratings of 10 or 11 (7 or 8 prior to January 1, 2024), regardless of performance and include loans identified as Substandard or Doubtful.
    (4) Total Criticized loans are defined as loans with internally assigned risk ratings of 9, 10, or 11 (6, 7, or 8 prior to January 1, 2024), regardless of performance and include loans identified as Special Mention, Substandard, or Doubtful.
          



    QCR Holding, Inc. 
    Consolidated Financial Highlights 
    (Unaudited)  
                 
                 
       For the Quarter EndedFor the Six Months Ended 
       June 30, March 31, June 30, June 30, June 30, 
     SELECT FINANCIAL DATA - SUBSIDIARIES 2024 2024 2023 2024 2023 
       (dollars in thousands) 
                 
     TOTAL ASSETS           
     Quad City Bank and Trust (1) $2,559,049  $2,618,727  $2,611,832      
     m2 Equipment Finance, LLC  359,012   350,801   322,838      
     Cedar Rapids Bank and Trust  2,428,267   2,423,936   2,389,623      
     Community State Bank  1,531,109   1,445,230   1,332,966      
     Guaranty Bank  2,369,754   2,327,985   2,179,844      
                 
     TOTAL DEPOSITS           
     Quad City Bank and Trust (1) $2,100,520  $2,161,515  $2,166,249      
     Cedar Rapids Bank and Trust  1,721,564   1,757,353   1,791,861      
     Community State Bank  1,188,551   1,187,926   1,073,907      
     Guaranty Bank  1,791,448   1,743,514   1,653,299      
                 
     TOTAL LOANS & LEASES           
     Quad City Bank and Trust (1) $2,107,605  $2,046,038  $1,925,162      
     m2 Equipment Finance, LLC  363,897   354,815   328,479      
     Cedar Rapids Bank and Trust  1,736,438   1,680,127   1,728,280      
     Community State Bank  1,162,686   1,113,070   1,025,844      
     Guaranty Bank  1,847,658   1,809,101   1,700,034      
                 
     TOTAL LOANS & LEASES / TOTAL DEPOSITS           
     Quad City Bank and Trust (1)  100%  95%  89%     
     Cedar Rapids Bank and Trust  101%  96%  96%     
     Community State Bank  98%  94%  96%     
     Guaranty Bank  103%  104%  103%     
                 
                 
     TOTAL LOANS & LEASES / TOTAL ASSETS           
     Quad City Bank and Trust (1)  82%  78%  74%     
     Cedar Rapids Bank and Trust  72%  69%  72%     
     Community State Bank  76%  77%  77%     
     Guaranty Bank  78%  78%  78%     
                 
     ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES           
     Quad City Bank and Trust (1)  1.43%  1.40%  1.44%     
     m2 Equipment Finance, LLC  3.86%  3.75%  3.46%     
     Cedar Rapids Bank and Trust  1.38%  1.34%  1.41%     
     Community State Bank  1.08%  1.12%  1.27%     
     Guaranty Bank  1.13%  1.15%  0.22%     
                 
     RETURN ON AVERAGE ASSETS            
     Quad City Bank and Trust (1)  0.88%  0.79%  0.82%  0.84%  1.02% 
     Cedar Rapids Bank and Trust  2.94%  3.09%  3.52%  3.01%  3.30% 
     Community State Bank  1.26%  1.25%  1.42%  1.25%  1.46% 
     Guaranty Bank  1.42%  0.88%  0.97%  1.15%  0.99% 
                 
     NET INTEREST MARGIN PERCENTAGE (2)           
     Quad City Bank and Trust (1)  3.39%  3.31%  3.28%  3.35%  3.36% 
     Cedar Rapids Bank and Trust  3.75%  3.77%  3.69%  3.76%  3.86% 
     Community State Bank  3.72%  3.75%  3.90%  3.74%  3.94% 
     Guaranty Bank (3)  2.99%  2.98%  3.10%  2.99%  3.30% 
                 
     ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET INTEREST MARGIN, NET           
     Cedar Rapids Bank and Trust $-  $-  $-  $-  $(8) 
     Community State Bank  (1)  (1)  (1)  (2)  70  
     Guaranty Bank  301   396   168   697   965  
     QCR Holdings, Inc. (4)  (32)  (32)  (33)  (64)  (65) 
                 
    (1)Quad City Bank and Trust amounts 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)Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% federal tax rate. 
    (3)Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.86% for the quarter ended June 30, 2024, 2.91% for the quarter ended March 31, 2024 and 3.11 for the quarter ended June 30, 2023. 
    (4)Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013. 
                 



    QCR Holding, Inc. 
    Consolidated Financial Highlights 
    (Unaudited)  
                
      As of 
      June 30,  March 31,  December 31, September 30, June 30, 
    GAAP TO NON-GAAP RECONCILIATIONS 2024 2024 2023 2023 2023 
      (dollars in thousands, except per share data) 
    TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)           
                
    Stockholders' equity (GAAP) $936,319  $907,342  $886,596  $828,383  $822,689  
    Less: Intangible assets  151,468   152,158   152,848   153,564   154,255  
    Tangible common equity (non-GAAP) $784,851  $755,184  $733,748  $674,819  $668,434  
                
    Total assets (GAAP) $8,871,991  $8,599,549  $8,538,894  $8,540,057  $8,226,673  
    Less: Intangible assets  151,468   152,158   152,848   153,564   154,255  
    Tangible assets (non-GAAP) $8,720,523  $8,447,391  $8,386,046  $8,386,493  $8,072,418  
                
    Tangible common equity to tangible assets ratio (non-GAAP) 9.00%  8.94%  8.75%  8.05%  8.28% 
                
                
                
    (1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures. 
                



    QCR Holding, Inc. 
    Consolidated Financial Highlights 
    (Unaudited)  
                    
    GAAP TO NON-GAAP RECONCILIATIONS For the Quarter Ended For the Six Months Ended 
      June 30, March 31, December 31, September 30, June 30, June 30, June 30, 
    ADJUSTED NET INCOME (1) 2024 2024 2023 2023 2023 2024 2023 
      (dollars in thousands, except per share data) 
                    
    Net income (GAAP) $29,114  $26,726  $32,855  $25,121  $28,425  $55,840  $55,582  
                    
    Less non-core items (post-tax) (2):               
    Income:               
    Securities gains (losses), net  -   -   -   -   9   -   (356) 
    Fair value gain (loss) on derivatives, net  (145)  (144)  (460)  (265)  66   (288)  (272) 
    Total non-core income (non-GAAP) $(145) $(144) $(460) $(265) $75  $(288) $(628) 
                    
    Expense:               
    Post-acquisition compensation, transition and integration costs  -   -   -   -   -   -   164  
    Total non-core expense (non-GAAP) $-  $-  $-  $-  $-  $-  $164  
                    
    Adjusted net income (non-GAAP) (1) $ 29,259  $ 26,870  $ 33,315  $ 25,386  $ 28,350  $ 56,128  $ 56,374  
                    
    ADJUSTED EARNINGS PER COMMON SHARE (1)               
                    
    Adjusted net income (non-GAAP) (from above) $29,259  $26,870  $33,315  $25,386  $28,350  $56,128  $56,374  
                    
    Weighted average common shares outstanding  16,814,814   16,783,348   16,734,080   16,717,303   16,701,950   16,799,081   16,739,120  
    Weighted average common and common equivalent shares outstanding  16,921,854   16,910,675   16,875,952   16,847,951   16,799,527   16,916,264   16,870,830  
                    
    Adjusted earnings per common share (non-GAAP):               
    Basic $ 1.74  $ 1.60  $ 1.99  $ 1.52  $ 1.70  $ 3.34  $ 3.37  
    Diluted $ 1.73  $ 1.59  $ 1.97  $ 1.51  $ 1.69  $ 3.32  $ 3.34  
                    
    ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)               
                    
    Adjusted net income (non-GAAP) (from above) $29,259  $26,870  $33,315  $25,386  $28,350  $56,128  $56,374  
                    
    Average Assets $8,776,002  $8,550,855  $8,535,732  $8,287,813  $7,924,597  $8,663,429  $7,915,763  
                    
    Adjusted return on average assets (annualized) (non-GAAP)  1.33%  1.26%  1.56%  1.23%  1.43%  1.30%  1.42% 
    Adjusted return on average equity (annualized) (non-GAAP)  12.69%  11.90%  15.64%  12.12%  13.88%  12.30%  13.99% 
                    
    NET INTEREST MARGIN (TEY) (3)               
                    
    Net interest income (GAAP) $56,163  $54,699  $55,736  $55,255  $53,205  $110,862  $110,015  
    Plus: Tax equivalent adjustment (4)  8,914   8,377   7,954   7,771   6,542   17,259   12,601  
    Net interest income - tax equivalent (Non-GAAP) $65,077  $63,076  $63,690  $63,026  $59,747  $128,121  $122,616  
    Less: Acquisition accounting net accretion  268   363   673   539   134   631   962  
    Adjusted net interest income $64,809  $62,713  $63,017  $62,487  $59,613  $127,490  $121,654  
                    
    Average earning assets $7,999,044  $7,807,720  $7,631,035  $7,573,785  $7,283,286  $7,903,382  $7,265,544  
                    
    Net interest margin (GAAP)  2.82%  2.82%  2.90%  2.89%  2.93%  2.82%  3.05% 
    Net interest margin (TEY) (Non-GAAP)  3.27%  3.25%  3.32%  3.31%  3.29%  3.26%  3.40% 
    Adjusted net interest margin (TEY) (Non-GAAP)  3.26%  3.24%  3.29%  3.28%  3.28%  3.24%  3.38% 
                    
    EFFICIENCY RATIO (5)               
                    
    Noninterest expense (GAAP) $49,888  $50,690  $60,938  $51,081  $49,727  $100,578  $98,512  
                    
    Net interest income (GAAP) $56,163  $54,699  $55,736  $55,255  $53,205  $110,862  $110,015  
    Noninterest income (GAAP)  30,889   26,858   47,729   26,593   32,520   57,747   58,362  
    Total income $87,052  $81,557  $103,465  $81,848  $85,725  $168,609  $168,377  
                    
    Efficiency ratio (noninterest expense/total income) (Non-GAAP)  57.31%  62.15%  58.90%  62.41%  58.01%  59.65%  58.51% 
                    
                    
                    
    (1) Adjusted net income, adjusted earnings per common share, adjusted return on average assets and average equity are non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-core or non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, these non-GAAP measures are reconciled to net income, which is the most directly comparable GAAP financial measure. 
    (2) Non-core or nonrecurring items (post-tax) are calculated using an estimated effective federal tax rate of 21%. 
    (3) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate. 
    (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. 
                    



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