QCR Holdings, Inc. Announces Record Net Income of $32.9 Million for the Fourth Quarter and Record Net Income of $113.6 Million for the Full Year 2023

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Fourth Quarter Highlights

  • Record fourth quarter net income of $32.9 million, or $1.95 per diluted share
  • Record Capital Markets Revenue of $37.0 million
  • Improved NIM, which increased by 1 basis point from the prior quarter
  • Significant increase in tangible book value (non-GAAP) per share of $3.48, or 35% annualized
  • TCE/TA ratio (non-GAAP) improved by 70 basis points to 8.75%
  • Completion of first two securitizations of $265 million of low-income housing tax credit loans

Full Year Highlights

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  • Record annual net income of $113.6 million, or $6.73 per diluted share
  • Record adjusted net income (non-GAAP) of $115.1 million, or $6.82 per diluted share
  • Record Capital Markets Revenue of $92.1 million, an increase of $50.8 million, or 123%
  • Loan and lease growth of 11% prior to loan securitizations
  • Deposit growth of 9%
  • Tangible book value (non-GAAP) per share increased $6.99, or 19%
  • Increased TCE/TA ratio (non-GAAP) by 82 basis points to 8.75%

MOLINE, Ill., Jan. 23, 2024 (GLOBE NEWSWIRE) — QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced record quarterly net income of $32.9 million and diluted earnings per share (“EPS”) of $1.95 for the fourth quarter of 2023, compared to net income of $25.1 million and diluted EPS of $1.49 for the third quarter of 2023. For the full year, the Company reported net income of $113.6 million, or $6.73 per diluted share.

Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the fourth quarter of 2023 were $33.3 million and $1.97, respectively. For the third quarter of 2023, adjusted net income (non-GAAP) was $25.4 million and adjusted diluted EPS (non-GAAP) was $1.51. For the fourth quarter of 2022, net income and diluted EPS were $30.9 million and $1.81, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $31.1 million and $1.83, respectively.

  For the Quarter Ended
  December 31, September 30, December 31,
$ in millions (except per share data) 2023 2023 2022
Net Income $ 32.9 $ 25.1 $ 30.9
Diluted EPS $ 1.95 $ 1.49 $ 1.81
Adjusted Net Income (non-GAAP)* $ 33.3 $ 25.4 $ 31.1
Adjusted Diluted EPS (non-GAAP)* $ 1.97 $ 1.51 $ 1.83

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


“We are pleased to deliver record fourth quarter and full year results highlighted by significant fee income and robust loan growth,” said Larry J. Helling, Chief Executive Officer. “In addition, we completed our first two securitizations of low-income housing tax credit loans, grew core deposits by 6%, and maintained our strong asset quality.”

“We enter 2024 with a solid deposit and loan pipeline, a strong balance sheet, excellent credit quality and well-managed expenses. We remain focused on building our franchise through relationship banking and executing on our differentiated business model, all with the view of delivering attractive returns to our shareholders,” said Mr. Helling.

Net Interest Income Grew to $55.7 Million and NIM Expanded

Net interest income for the fourth quarter of 2023 totaled $55.7 million, an increase of $0.5 million from the third quarter. Acquisition-related net accretion totaled $673 thousand for the fourth quarter of 2023, compared to $539 thousand in the third quarter. Net interest income was $65.2 million for the fourth quarter of 2022.

In the fourth quarter of 2023, net interest margin (“NIM”) was 2.90% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.32%, up from 2.89% and 3.31% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.29%, was also up from 3.28% in the third quarter.

“Our adjusted NIM on a tax equivalent yield basis improved by one basis point on a linked-quarter basis to 3.29% and was above the midpoint of our guidance range,” said Todd A. Gipple, President and Chief Financial Officer. “During the quarter, our loan and investment yields continued to expand and we experienced a more modest increase in our cost of funds with a slowing in the shift of the composition of our deposits from noninterest and lower beta deposits to higher beta deposits. We are pleased to see continued stabilization in our deposit mix and the expansion of our NIM.”

Noninterest Income of $47.7 Million, Including a Record $37.0 Million of Capital Markets Revenue

Noninterest income for the fourth quarter of 2023 totaled $47.7 million, up significantly from $26.6 million for the third quarter of 2023. The Company generated a record $37.0 million of capital markets revenue in the quarter, up from $15.6 million in the prior quarter. Wealth management revenue was $4.1 million for the quarter, up from $3.8 million in the prior quarter.

“Capital markets revenue surged late in the fourth quarter and was $37 million for the quarter, achieving a total of $92 million to close out the year,” added Mr. Gipple. “Our clients took advantage of the significant decrease in long-term interest rates late in the quarter to lock-in attractive long-term financing terms. Capital markets revenue from swap fees continues to benefit from the strong demand for affordable housing. Even with the strong results in the fourth quarter, our LIHTC lending and capital markets revenue pipelines remain healthy. As a result, we are increasing our capital markets revenue guidance for the next twelve months to be in a range of $50 to $60 million.”

Noninterest Expenses of $60.9 Million Impacted by Strong Capital Markets Outperformance

Noninterest expense for the fourth quarter of 2023 totaled $60.9 million, compared to $51.1 million for the third quarter of 2023 and $49.7 million for the fourth quarter of 2022. The linked-quarter increase was primarily due to higher incentive-based compensation related to our record fourth quarter and full year performance.

Continued Strong Loan Growth

During the fourth quarter of 2023, the Company’s loans and leases held for investment grew $213.4 million to a total of $6.5 billion, or 13% on an annualized basis. For the full year, total loans and leases grew $669.5 million, or 11%, when excluding the $265 million in loan securitizations that we completed in the fourth quarter.

“Our strong performance is a testament to our differentiated relationship-based community banking model as well as the underlying economic resiliency across our markets,” added Mr. Helling. “Given our current pipeline and the ongoing strength of our markets, we are targeting loan growth for the full year 2024 between 8% and 10%, prior to the loan securitizations that we have planned for 2024.”

Asset Quality Remains Excellent

Nonperforming assets (“NPAs”) totaled $34.2 million at the end of the fourth quarter, a slight improvement from $34.7 million at the end of the third quarter. The ratio of NPAs to total assets improved to 0.40% on December 31, 2023, compared to 0.41% on September 30, 2023. In addition, the Company’s criticized loans and classified loans to total loans and leases on December 31, 2023 also improved to 2.93% and 1.03%, respectively, as compared to 2.98% and 1.05% as of September 30, 2023.

The Company recorded a total provision for credit losses of $5.2 million during the quarter which included $2.5 million of provision for loans and leases and $2.7 million of provision for unfunded commitments. The provision for credit losses on unfunded commitments was driven by the surge in commitments in our LIHTC lending business. As of December 31, 2023, the allowance for credit losses to total loans/leases held for investment was 1.33%.

Stable Core Deposits and Increased Liquidity

During the fourth quarter of 2023, the Company’s core deposits, which exclude brokered deposits, decreased slightly by $4.2 million in the fourth quarter, but grew by $346.0 million, or 6%, for the full year. Our Correspondent Bank deposit portfolio typically falls temporarily in the fourth quarter as our clients position their balance sheets at year-end. Total Correspondent Bank deposits declined 9% at quarter-end and have since rebounded, increasing $188 million, or 35%, by mid-January.

Total uninsured and uncollateralized deposits remain very low at 18% of total deposits as of the end of the fourth quarter, as compared to 20% as of the end of the third quarter. The Company maintained approximately $3.1 billion of available liquidity sources at year-end, which includes $1.2 billion of immediately available liquidity.

Continued Strong Capital Levels

As of December 31, 2023, the Company’s total risk-based capital ratio was 14.15%, the common equity tier 1 ratio was 9.57% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.75%. By comparison, these respective ratios were 14.48%, 9.68% and 8.05% as of September 30, 2023. The Company remains focused on growing capital and targeting capital levels in the top quartile of the Company’s peer group.

The Company’s tangible book value per share (non-GAAP) increased by $3.48, or 35% annualized during the fourth quarter. Accumulated other comprehensive income (“AOCI”) increased $25.4 million during the quarter due to an increase in the value of the Company’s available for sale securities portfolio and certain derivatives resulting from the change in long-term interest rates during the quarter. In addition, the combination of strong earnings and a modest dividend contributed to the improvement in tangible book value per share (non-GAAP).

Conference Call Details

The Company will host an earnings call/webcast tomorrow, January 24, 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 January 31, 2024. The replay access information is 877-344-7529 (international 412-317-0088); access code 1087284. A webcast of the teleconference can be accessed on the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank on April 1, 2022, with the combined entity operating under the Guaranty Bank name. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly owned subsidiary, m2 Equipment Finance, LLC, based in Brookfield, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of December 31, 2023, the Company had $8.5 billion in assets, $6.5 billion in loans and $6.5 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “bode,” “predict,” “suggest,” “project,” “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economies(including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof (including the 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 FASB or the PCAOB; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to the recent failures of other banks; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out and the recent potential additional rate increases by the Federal Reserve); (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xix) 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
[email protected]

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
           
  As of
  December 31, September 30, June 30, March 31, December 31,
    2023     2023     2023     2023     2022  
           
  (dollars in thousands)
           
CONDENSED BALANCE SHEET          
           
Cash and due from banks $ 97,123   $ 104,265   $ 84,084   $ 64,295   $ 59,723  
Federal funds sold and interest-bearing deposits   140,369     80,650     175,012     253,997     124,270  
Securities, net of allowance for credit losses   1,005,528     896,394     882,888     877,446     928,102  
Loans receivable held for sale (1)   2,594     278,893     295,057     140,633     1,480  
Loans/leases receivable held for investment   6,540,822     6,327,414     6,084,263     6,049,389     6,137,391  
Allowance for credit losses   (87,200 )   (87,669 )   (85,797 )   (86,573 )   (87,706 )
Intangibles   13,821     14,537     15,228     15,993     16,759  
Goodwill   139,027     139,027     139,027     138,474     137,607  
Derivatives   188,978     291,295     170,294     130,350     177,631  
Other assets   497,832     495,251     466,617     452,900     453,580  
Total assets $ 8,538,894   $ 8,540,057   $ 8,226,673   $ 8,036,904   $ 7,948,837  
           
Total deposits $ 6,514,005   $ 6,494,852   $ 6,606,720   $ 6,501,663   $ 5,984,217  
Total borrowings   718,295     712,126     418,368     417,480     825,894  
Derivatives   214,098     320,220     195,841     150,401     200,701  
Other liabilities   205,900     184,476     183,055     165,866     165,301  
Total stockholders’ equity   886,596     828,383     822,689     801,494     772,724  
Total liabilities and stockholders’ equity $ 8,538,894   $ 8,540,057   $ 8,226,673   $ 8,036,904   $ 7,948,837  
           
ANALYSIS OF LOAN PORTFOLIO          
Loan/lease mix: (2)          
Commercial and industrial – revolving $ 325,243   $ 299,588   $ 304,617   $ 307,612   $ 296,869  
Commercial and industrial – other   1,390,068     1,381,967     1,308,853     1,322,384     1,371,590  
Commercial and industrial – other – LIHTC   91,710     105,601     93,700     97,947     80,103  
Total commercial and industrial   1,807,021     1,787,156     1,707,170     1,727,943     1,748,562  
Commercial real estate, owner occupied   607,365     610,618     609,717     616,922     629,367  
Commercial real estate, non-owner occupied   1,008,892     955,552     963,814     982,716     963,239  
Construction and land development   477,424     472,695     437,682     448,261     448,986  
Construction and land development – LIHTC   943,101     921,359     870,084     759,924     743,075  
Multi-family   284,721     282,541     280,418     229,370     236,043  
Multi-family – LIHTC   711,422     874,439     820,376     740,500     727,760  
Direct financing leases   31,164     34,401     32,937     35,373     31,889  
1-4 family real estate   544,971     539,931     535,405     532,491     499,529  
Consumer   127,335     127,615     121,717     116,522     110,421  
Total loans/leases $ 6,543,416   $ 6,606,307   $ 6,379,320   $ 6,190,022   $ 6,138,871  
Less allowance for credit losses   87,200     87,669     85,797     86,573     87,706  
Net loans/leases $ 6,456,216   $ 6,518,638   $ 6,293,523   $ 6,103,449   $ 6,051,165  
           
ANALYSIS OF SECURITIES PORTFOLIO          
Securities mix:          
U.S. government sponsored agency securities $ 14,973   $ 16,002   $ 18,942   $ 19,320   $ 16,981  
Municipal securities   853,645     764,017     743,608     731,689     779,450  
Residential mortgage-backed and related securities   59,196     57,946     60,958     63,104     66,215  
Asset backed securities   15,423     16,326     17,393     17,967     18,728  
Other securities   41,115     43,272     43,156     46,535     46,908  
Trading securities   22,368                  
Total securities (3) $ 1,006,720   $ 897,563   $ 884,057   $ 878,615   $ 928,282  
Less allowance for credit losses   1,192     1,169     1,169     1,169     180  
Net securities $ 1,005,528   $ 896,394   $ 882,888   $ 877,446   $ 928,102  
           
ANALYSIS OF DEPOSITS          
Deposit mix:          
Noninterest-bearing demand deposits $ 1,038,689   $ 1,027,791   $ 1,101,605   $ 1,189,858   $ 1,262,981  
Interest-bearing demand deposits   4,338,390     4,416,725     4,374,847     4,033,193     3,875,497  
Time deposits   851,950     788,692     765,801     679,946     744,593  
Brokered deposits   284,976     261,644     364,467     598,666     101,146  
Total deposits $ 6,514,005   $ 6,494,852   $ 6,606,720   $ 6,501,663   $ 5,984,217  
           
ANALYSIS OF BORROWINGS          
Borrowings mix:          
Term FHLB advances $ 135,000   $ 135,000   $ 135,000   $ 135,000   $  
Overnight FHLB advances   300,000     295,000             415,000  
Other short-term borrowings   1,500     470     1,850     1,100     129,630  
Subordinated notes   233,064     232,958     232,852     232,746     232,662  
Junior subordinated debentures   48,731     48,698     48,666     48,634     48,602  
Total borrowings $ 718,295   $ 712,126   $ 418,368   $ 417,480   $ 825,894  
           
(1) Loans with a fair value of $0 million, $278.0 million, $291.0 million and $139.2 million have been identified for securitization and are included in LHFS at December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023 respectively.
(2) Loan categories with significant LIHTC loan balances have been broken out separately. Total LIHTC balances within the loan/lease portfolio are $1.8 billion as of December 31, 2023.
(3) As of December 31, 2023, trading securities included two securities purchased from Freddie Mac following the loan sale and securitization of $130 million of tax exempt LIHTC loans and $135 million of taxable LIHTC loans sponsored by Freddie Mac in 2023.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  December 31, September 30, June 30, March 31, December 31,
    2023     2023     2023   2023     2022  
           
  (dollars in thousands, except per share data)
           
INCOME STATEMENT          
Interest income $ 112,248   $ 108,568   $ 98,377 $ 94,217   $ 94,037  
Interest expense   56,512     53,313     45,172   37,407     28,819  
Net interest income   55,736     55,255     53,205   56,810     65,218  
Provision for credit losses   5,199     3,806     3,606   3,928      
Net interest income after provision for credit losses $ 50,537   $ 51,449   $ 49,599 $ 52,882   $ 65,218  
           
Trust fees $ 3,084   $ 2,863   $ 2,844 $ 2,906   $ 2,644  
Investment advisory and management fees   1,052     947     986   879     918  
Deposit service fees   2,008     2,107     2,034   2,028     2,142  
Gains on sales of residential real estate loans, net   323     476     500   312     468  
Gains on sales of government guaranteed portions of loans, net   24           30     50  
Capital markets revenue   36,956     15,596     22,490   17,023     11,338  
Securities gains (losses), net           12   (463 )    
Earnings on bank-owned life insurance   832     1,807     838   707     755  
Debit card fees   1,561     1,584     1,589   1,466     1,500  
Correspondent banking fees   465     450     356   391     257  
Loan related fee income   845     800     770   651     614  
Fair value gain (loss) on derivatives   (582 )   (336 )   83   (427 )   (267 )
Other   1,161     299     18   339     800  
Total noninterest income $ 47,729   $ 26,593   $ 32,520 $ 25,842   $ 21,219  
           
Salaries and employee benefits $ 41,059   $ 32,098   $ 31,459 $ 32,003   $ 32,594  
Occupancy and equipment expense   6,789     6,228     6,100   5,914     6,027  
Professional and data processing fees   4,223     4,456     4,078   3,514     3,769  
Acquisition costs                 (424 )
Post-acquisition compensation, transition and integration costs             207     668  
FDIC insurance, other insurance and regulatory fees   2,115     1,721     1,927   1,374     1,605  
Loan/lease expense   834     826     652   556     411  
Net cost of (income from) and gains/losses on operations of other real estate   38     3       (67 )   (117 )
Advertising and marketing   1,641     1,429     1,735   1,237     1,562  
Communication and data connectivity   449     478     471   665     587  
Supplies   333     335     281   305     337  
Bank service charges   761     605     621   605     563  
Correspondent banking expense   300     232     221   210     210  
Intangibles amortization   716     691     765   766     787  
Payment card processing   836     733     542   545     599  
Trust expense   413     432     337   214     166  
Other   431     814     538   737     353  
Total noninterest expense $ 60,938   $ 51,081   $ 49,727 $ 48,785   $ 49,697  
           
Net income before income taxes $ 37,328   $ 26,961   $ 32,392 $ 29,939   $ 36,740  
Federal and state income tax expense   4,473     1,840     3,967   2,782     5,834  
Net income $ 32,855   $ 25,121   $ 28,425 $ 27,157   $ 30,906  
           
Basic EPS $ 1.96   $ 1.50   $ 1.70 $ 1.62   $ 1.83  
Diluted EPS $ 1.95   $ 1.49   $ 1.69 $ 1.60   $ 1.81  
           
Weighted average common shares outstanding   16,734,080     16,717,303     16,701,950   16,776,289     16,855,973  
Weighted average common and common equivalent shares outstanding   16,875,952     16,847,951     16,799,527   16,942,132     17,047,976  

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
       
  For the Year Ended
  December 31,   December 31,
    2023       2022  
       
  (dollars in thousands, except per share data)
       
INCOME STATEMENT      
Interest income $ 413,410     $ 292,571  
Interest expense   192,404       61,451  
Net interest income   221,006       231,120  
Provision for credit losses (1)   16,539       8,284  
Net interest income after provision for credit losses $ 204,467     $ 222,836  
       
Trust fees $ 11,697     $ 10,641  
Investment advisory and management fees   3,864       3,858  
Deposit service fees   8,177       8,134  
Gains on sales of residential real estate loans, net   1,611       2,411  
Gains on sales of government guaranteed portions of loans, net   54       119  
Capital markets revenue   92,065       41,309  
Securities losses, net   (451 )      
Earnings on bank-owned life insurance   4,184       2,056  
Debit card fees   6,200       5,459  
Correspondent banking fees   1,662       967  
Loan related fee income   3,066       2,428  
Fair value gain (loss) on derivatives   (1,262 )     1,975  
Other   1,817       1,372  
Total noninterest income $ 132,684     $ 80,729  
       
Salaries and employee benefits $ 136,619     $ 115,368  
Occupancy and equipment expense   25,031       21,975  
Professional and data processing fees   16,271       16,282  
Acquisition costs         3,715  
Post-acquisition compensation, transition and integration costs   207       5,526  
FDIC insurance, other insurance and regulatory fees   7,137       5,806  
Loan/lease expense   2,868       1,829  
Net cost of (income from) and gains/losses on operations of other real estate   (26 )     (40 )
Advertising and marketing   6,042       4,958  
Communication and data connectivity   2,063       2,213  
Supplies   1,254       1,109  
Bank service charges   2,592       2,282  
Correspondent banking expense   963       840  
Intangibles amortization   2,938       2,854  
Payment card processing   2,656       1,964  
Trust expense   1,396       775  
Other   2,520       2,560  
Total noninterest expense $ 210,531     $ 190,016  
       
Net income before income taxes $ 126,620     $ 113,549  
Federal and state income tax expense   13,062       14,483  
Net income $ 113,558     $ 99,066  
       
Basic EPS $ 6.79     $ 5.94  
Diluted EPS $ 6.73     $ 5.87  
       
Weighted average common shares outstanding   16,732,406       16,681,844  
Weighted average common and common equivalent shares outstanding   16,866,391       16,890,007  
       
(1) Provision for credit losses for the year ended December 31, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
                 
  As of and for the Quarter Ended   For the Year Ended
  December 31, September 30, June 30, March 31, December 31, December 31, December 31,
    2023     2023     2023     2023     2022       2023     2022  
                 
  (dollars in thousands, except per share data)
                 
COMMON SHARE DATA                
Common shares outstanding   16,749,254     16,731,646     16,713,853     16,713,775     16,795,942        
Book value per common share (1) $ 52.93   $ 49.51   $ 49.22   $ 47.95   $ 46.01        
Tangible book value per common share (Non-GAAP) (2) $ 43.81   $ 40.33   $ 39.99   $ 38.71   $ 36.82        
Closing stock price $ 58.39   $ 48.52   $ 41.03   $ 43.91   $ 49.64        
Market capitalization $ 977,989   $ 811,819   $ 685,769   $ 733,902   $ 833,751        
Market price / book value   110.31 %   98.00 %   83.36 %   91.57 %   107.90 %      
Market price / tangible book value   133.29 %   120.30 %   102.59 %   113.43 %   134.83 %      
Earnings per common share (basic) LTM (3) $ 6.78   $ 6.65   $ 6.89   $ 6.06   $ 5.95        
Price earnings ratio LTM (3)   8.61 x     7.30 x     5.96 x     7.24 x     8.35 x        
TCE / TA (Non-GAAP) (4)   8.75 %   8.05 %   8.28 %   8.21 %   7.93 %      
                 
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY        
Beginning balance $ 828,383   $ 822,689   $ 801,494   $ 772,724   $ 737,072        
Net income   32,855     25,121     28,425     27,157     30,906        
Other comprehensive income (loss), net of tax   25,363     (19,415 )   (6,336 )   9,325     9,959        
Common stock cash dividends declared   (1,004 )   (1,003 )   (1,003 )   (1,010 )   (1,013 )      
Repurchase and cancellation of shares of common stock as a result of a share repurchase program           (967 )   (7,719 )   (5,037 )      
Other (5)   999     991     1,076     1,017     837        
Ending balance $ 886,596   $ 828,383   $ 822,689   $ 801,494   $ 772,724        
                 
REGULATORY CAPITAL RATIOS (6):                
Total risk-based capital ratio   14.15 %   14.48 %   14.64 %   14.64 %   14.28 %      
Tier 1 risk-based capital ratio   10.16 %   10.30 %   10.34 %   10.23 %   9.95 %      
Tier 1 leverage capital ratio   10.03 %   9.92 %   10.06 %   9.73 %   9.61 %      
Common equity tier 1 ratio   9.57 %   9.68 %   9.70 %   9.57 %   9.29 %      
                 
KEY PERFORMANCE RATIOS AND OTHER METRICS                
Return on average assets (annualized)   1.53 %   1.21 %   1.44 %   1.37 %   1.58 %     1.39 %   1.37 %
Return on average total equity (annualized)   15.35 %   11.95 %   13.97 %   13.67 %   16.32 %     13.78 %   13.24 %
Net interest margin   2.90 %   2.89 %   2.93 %   3.18 %   3.62 %     2.97 %   3.49 %
Net interest margin (TEY) (Non-GAAP)(7)   3.32 %   3.31 %   3.29 %   3.52 %   3.93 %     3.35 %   3.73 %
Efficiency ratio (Non-GAAP) (8)   58.90 %   62.41 %   58.01 %   59.02 %   57.50 %     59.52 %   60.93 %
Gross loans and leases / total assets   76.63 %   77.36 %   77.54 %   77.02 %   77.23 %     76.63 %   77.23 %
Gross loans and leases / total deposits   100.45 %   101.72 %   96.56 %   95.21 %   102.58 %     100.45 %   102.58 %
Effective tax rate   11.98 %   6.82 %   12.25 %   9.29 %   15.88 %     10.32 %   12.75 %
Full-time equivalent employees (9)   996     987     1009     969     973       996     973  
                 
AVERAGE BALANCES                
Assets $ 8,535,732   $ 8,287,813   $ 7,924,597   $ 7,906,830   $ 7,800,229     $ 8,165,805   $ 7,206,180  
Loans/leases   6,483,572     6,476,512     6,219,980     6,165,115     6,043,359       6,337,551     5,604,074  
Deposits   6,485,154     6,342,339     6,292,481     6,179,644     6,029,455       6,325,790     5,676,546  
Total stockholders’ equity   852,163     837,734     816,882     794,685     757,419       825,557     748,032  
                 
(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
  December 31, 2023   September 30, 2023   December 31, 2022
  Average Balance Interest Earned or Paid Average Yield or Cost   Average Balance Interest Earned or Paid Average Yield or Cost   Average Balance Interest Earned or Paid Average Yield or Cost
                       
  (dollars in thousands)
                       
Fed funds sold $ 18,644 $ 257 5.47 %   $ 21,526 $ 284 5.23 %   $ 30,754 $ 296 3.82 %
Interest-bearing deposits at financial institutions   72,439   986 5.40 %     86,807   1,205 5.51 %     62,581   504 3.20 %
Investment securities – taxable   365,686   4,080 4.45 %     344,657   3,788 4.38 %     347,224   3,286 3.77 %
Investment securities – nontaxable (1)   650,069   8,380 5.15 %     600,693   6,974 4.64 %     624,706   6,788 4.35 %
Restricted investment securities   40,625   670 6.45 %     43,590   659 5.91 %     39,954   628 6.15 %
Loans (1)   6,483,572   105,830 6.48 %     6,476,512   103,428 6.34 %     6,043,359   88,088 5.78 %
Total earning assets (1) $ 7,631,035 $ 120,203 6.26 %   $ 7,573,785 $ 116,338 6.10 %   $ 7,148,578 $ 99,590 5.53 %
                       
Interest-bearing deposits $ 4,465,279 $ 37,082 3.29 %   $ 4,264,208 $ 33,563 3.12 %   $ 3,968,081 $ 17,655 1.77 %
Time deposits   982,356   10,559 4.26 %     999,488   10,003 3.97 %     746,819   3,476 1.85 %
Short-term borrowings   1,101   15 5.18 %     1,514   20 5.28 %     19,591   211 4.28 %
Federal Home Loan Bank advances   360,000   4,841 5.26 %     425,870   5,724 5.26 %     351,033   3,507 3.91 %
Subordinated debentures   232,994   3,308 5.68 %     232,890   3,307 5.68 %     232,689   3,312 5.69 %
Junior subordinated debentures   48,710   708 5.68 %     48,678   695 5.59 %     48,583   657 5.29 %
Total interest-bearing liabilities $ 6,090,440 $ 56,513 3.68 %   $ 5,972,648 $ 53,312 3.54 %   $ 5,366,796 $ 28,818 2.13 %
                       
Net interest income (1)   $ 63,690       $ 63,026       $ 70,772  
Net interest margin (2)     2.90 %       2.89 %       3.62 %
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.32 %       3.31 %       3.93 %
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.29 %       3.28 %       3.61 %
                       
  For the Year Ended        
  December 31, 2023   December 31, 2022    
  Average Balance Interest Earned or Paid Average Yield or Cost   Average Balance Interest Earned or Paid Average Yield or Cost        
                       
  (dollars in thousands)        
                       
Fed funds sold $ 19,110 $ 998 5.22 %   $ 14,436 $ 410 2.84 %        
Interest-bearing deposits at financial institutions   80,924   4,137 5.11 %     63,448   1,089 1.72 %        
Investment securities – taxable   346,579   14,927 4.30 %     335,255   12,078 3.59 %        
Investment securities – nontaxable (1)   611,924   28,272 4.62 %     575,457   24,281 4.22 %        
Restricted investment securities   39,273   2,346 5.89 %     35,554   2,068 5.73 %        
Loans (1)   6,337,551   390,967 6.17 %     5,604,074   268,985 4.80 %        
Total earning assets (1) $ 7,435,361 $ 441,647 5.94 %   $ 6,628,224 $ 308,911 4.66 %        
                       
Interest-bearing deposits $ 4,191,913 $ 121,662 2.90 %   $ 3,715,017 $ 35,359 0.95 %        
Time deposits   1,010,827   37,784 3.74 %     568,245   7,003 1.23 %        
Short-term borrowings   2,781   152 6.44 %     8,637   299 3.46 %        
Federal Home Loan Bank advances   323,904   16,740 5.10 %     286,474   6,954 2.39 %        
Other borrowings     0.00 %     1,068   53 4.96 %        
Subordinated debentures   232,837   13,230 5.68 %     165,685   9,200 5.55 %        
Junior subordinated debentures   48,662   2,836 5.75 %     45,497   2,583 5.60 %        
Total interest-bearing liabilities $ 5,810,924 $ 192,404 3.31 %   $ 4,790,623 $ 61,451 1.28 %        
                       
Net interest income (1)   $ 249,243       $ 247,460          
Net interest margin (2)     2.97 %       3.49 %        
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.35 %       3.73 %        
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)     3.32 %       3.60 %        
                       
(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
      December 31,       September 30,       June 30,       March 31,       December 31,  
      2023       2023       2023       2023       2022  
           
  (dollars in thousands, except per share data)
           
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES          
Beginning balance   $ 87,669     $ 85,797     $ 86,573     $ 87,706     $ 90,489  
Change in ACL for writedown of LHFS to fair value (1)     266       175       (2,277 )     (1,709 )      
Credit loss expense     2,519       3,260       3,313       2,458       1,013  
Loans/leases charged off     (3,354 )     (1,816 )     (1,947 )     (2,275 )     (3,960 )
Recoveries on loans/leases previously charged off     100       253       135       393       164  
Ending balance   $ 87,200     $ 87,669     $ 85,797     $ 86,573     $ 87,706  
           
NONPERFORMING ASSETS          
Nonaccrual loans/leases   $ 32,753     $ 34,568     $ 26,062     $ 22,947     $ 8,765  
Accruing loans/leases past due 90 days or more     86             83       15       5  
Total nonperforming loans/leases     32,839       34,568       26,145       22,962       8,770  
Other real estate owned     1,347       120             61       133  
Other repossessed assets                              
Total nonperforming assets   $ 34,186     $ 34,688     $ 26,145     $ 23,023     $ 8,903  
           
ASSET QUALITY RATIOS          
Nonperforming assets / total assets     0.40 %     0.41 %     0.32 %     0.29 %     0.11 %
ACL for loans and leases / total loans/leases held for investment     1.33 %     1.39 %     1.41 %     1.43 %     1.43 %
ACL for loans and leases / nonperforming loans/leases     265.54 %     253.61 %     328.16 %     377.03 %     1000.07 %
Net charge-offs as a % of average loans/leases     0.05 %     0.02 %     0.03 %     0.03 %     0.06 %
           
INTERNALLY ASSIGNED RISK RATING (2)          
Special mention (rating 6)   $ 124,460     $ 127,202     $ 116,910     $ 125,048     $ 98,333  
Substandard (rating 7)/Classifed loans (3)     67,313       69,369       63,956       70,866       66,021  
Doubtful (rating 8)/Classifed loans (3)                              
Criticized loans (4)   $ 191,773     $ 196,571     $ 180,866     $ 195,914     $ 164,354  
           
Classified loans as a % of total loans/leases     1.03 %     1.05 %     1.00 %     1.14 %     1.08 %
Criticized loans as a % of total loans/leases     2.93 %     2.98 %     2.84 %     3.16 %     2.68 %
           
(1) Certain loans were identified for securitization and transferred from loans to LHFS. The fair values of the loans were less than their carrying values at the date of transfer, resulting in a change to the loan ACL.
(2) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
(3) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.
(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
                       
      For the Quarter Ended For the Year Ended
      December 31,   September 30,   December 31,   December 31,   December 31,
  SELECT FINANCIAL DATA – SUBSIDIARIES     2023       2023       2022       2023       2022  
      (dollars in thousands)
                       
  TOTAL ASSETS                    
  Quad City Bank and Trust (1)   $ 2,448,957     $ 2,433,084     $ 2,312,013          
  m2 Equipment Finance, LLC     345,682       336,180       306,396          
  Cedar Rapids Bank and Trust     2,419,146       2,442,263       2,185,500          
  Community State Bank     1,426,202       1,417,250       1,297,812          
  Guaranty Bank     2,281,296       2,242,638       2,146,474          
                       
  TOTAL DEPOSITS                    
  Quad City Bank and Trust (1)   $ 1,878,375     $ 1,973,989     $ 1,730,187          
  Cedar Rapids Bank and Trust     1,748,516       1,722,905       1,686,959          
  Community State Bank     1,169,921       1,132,724       1,071,146          
  Guaranty Bank     1,771,371       1,722,861       1,587,477          
                       
  TOTAL LOANS & LEASES                    
  Quad City Bank and Trust (1)   $ 1,983,679     $ 2,005,770     $ 1,828,267          
  m2 Equipment Finance, LLC     350,641       341,041       309,930          
  Cedar Rapids Bank and Trust     1,698,447       1,750,986       1,644,989          
  Community State Bank     1,099,262       1,098,479       988,370          
  Guaranty Bank     1,762,027       1,751,072       1,677,245          
                       
  TOTAL LOANS & LEASES / TOTAL DEPOSITS                    
  Quad City Bank and Trust (1)     106 %     102 %     106 %        
  Cedar Rapids Bank and Trust     97 %     102 %     98 %        
  Community State Bank     94 %     97 %     92 %        
  Guaranty Bank     99 %     102 %     106 %        
                       
  TOTAL LOANS & LEASES / TOTAL ASSETS                    
  Quad City Bank and Trust (1)     81 %     82 %     79 %        
  Cedar Rapids Bank and Trust     70 %     72 %     75 %        
  Community State Bank     77 %     78 %     76 %        
  Guaranty Bank     77 %     78 %     78 %        
                       
  ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES                    
  Quad City Bank and Trust (1)     1.48 %     1.43 %     1.46 %        
  m2 Equipment Finance, LLC     3.80 %     3.52 %     3.11 %        
  Cedar Rapids Bank and Trust     1.39 %     1.40 %     1.49 %        
  Community State Bank     1.23 %     1.22 %     1.38 %        
  Guaranty Bank     1.18 %     1.20 %     1.37 %        
                       
  RETURN ON AVERAGE ASSETS                    
  Quad City Bank and Trust (1)     0.67 %     0.97 %     1.36 %     0.92 %     1.55 %
  Cedar Rapids Bank and Trust     3.78 %     2.28 %     2.73 %     3.17 %     2.63 %
  Community State Bank     1.11 %     1.38 %     1.75 %     1.34 %     1.40 %
  Guaranty Bank (5)     1.41 %     1.23 %     2.06 %     1.16 %     1.36 %
                       
  NET INTEREST MARGIN PERCENTAGE (2)                    
  Quad City Bank and Trust (1)     3.41 %     3.37 %     3.56 %     3.37 %     3.61 %
  Cedar Rapids Bank and Trust     3.84 %     3.78 %     4.37 %     3.83 %     3.93 %
  Community State Bank (3)     3.74 %     3.88 %     4.06 %     3.87 %     3.77 %
  Guaranty Bank (4)     3.07 %     3.06 %     4.58 %     3.18 %     4.18 %
                       
  ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET                
  INTEREST MARGIN, NET                    
  Cedar Rapids Bank and Trust   $     $     $ 98     $ (8 )   $ 158  
  Community State Bank     (1 )     (1 )     505     $ 67       628  
  Guaranty Bank     706       572       5,118     $ 2,243       7,932  
  QCR Holdings, Inc. (6)     (32 )     (32 )     (33 )   $ (129 )     (137 )
                       
(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)  Community State Bank’s net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.74% for the quarter ended December 31, 2023, 3.88% for the quarter ended September 30, 2023 and 3.73% for the quarter ended December 31, 2022.
(4)  Guaranty Bank’s net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.95% for the quarter ended December 31, 2023, 2.97% for the quarter ended September 30, 2023 and 3.58% for the quarter ended December 31, 2022.
(5)  Adjusted ROAA excluding non-core adjustments for the Guaranty Bank acquisition (non-GAAP) would have been 1.91% for the year ended December 31, 2022.
(6)  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
      December 31,     September 30,   June 30,   March 31,   December 31,
GAAP TO NON-GAAP RECONCILIATIONS     2023       2023       2023       2023       2022  
    (dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)                        
                         
Stockholders’ equity (GAAP)   $ 886,596     $ 828,383     $ 822,689     $ 801,494     $ 772,724  
Less: Intangible assets     152,848       153,564       154,255       154,467       154,366  
Tangible common equity (non-GAAP)   $ 733,748     $ 674,819     $ 668,434     $ 647,027     $ 618,358  
                         
Total assets (GAAP)   $ 8,538,894     $ 8,540,057     $ 8,226,673     $ 8,036,904     $ 7,948,837  
Less: Intangible assets     152,848       153,564       154,255       154,467       154,366  
Tangible assets (non-GAAP)   $ 8,386,046     $ 8,386,493     $ 8,072,418     $ 7,882,437     $ 7,794,471  
                         
Tangible common equity to tangible assets ratio (non-GAAP)   8.75 %     8.05 %     8.28 %     8.21 %     7.93 %
                         
(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 Year Ended
    December 31,   September 30,   June 30,   March 31,   December 31,   December 31,   December 31,
ADJUSTED NET INCOME (1)     2023       2023       2023       2023       2022       2023       2022  
    (dollars in thousands, except per share data)
                             
Net income (GAAP)   $ 32,855     $ 25,121     $ 28,425     $ 27,157     $ 30,906     $ 113,558     $ 99,066  
                             
Less non-core items (post-tax) (2):                            
Income:                            
Securities gains (losses), net                 9       (366 )           (356 )      
Fair value gain (loss) on derivatives, net     (460 )     (265 )     66       (337 )     (211 )     (997 )     1,560  
Total non-core income (non-GAAP)   $ (460 )   $ (265 )   $ 75     $ (703 )   $ (211 )   $ (1,353 )   $ 1,560  
                             
Expense:                            
Acquisition costs (2)                             (517 )           3,198  
Post-acquisition compensation, transition and integration costs                       164       529       164       4,366  
Separation agreement                                          
CECL Day 2 provision for credit losses on acquired non-PCD loans (3)                                         8,651  
CECL Day 2 provision for credit losses provision on acquired OBS exposure (3)                                         1,140  
Total non-core expense (non-GAAP)   $     $     $     $ 164     $ 12     $ 164     $ 17,355  
                             
Adjusted net income (non-GAAP) (1)   $ 33,315     $ 25,386     $ 28,350     $ 28,024     $ 31,129     $ 115,075     $ 114,861  
                             
ADJUSTED EARNINGS PER COMMON SHARE (1)                            
                             
Adjusted net income (non-GAAP) (from above)   $ 33,315     $ 25,386     $ 28,350     $ 28,024     $ 31,129     $ 115,075     $ 114,861  
                             
Weighted average common shares outstanding     16,734,080       16,717,303       16,701,950       16,776,289       16,855,973       16,732,406       16,681,844  
Weighted average common and common equivalent shares outstanding     16,875,952       16,847,951       16,799,527       16,942,132       17,047,976       16,866,391       16,890,007  
                             
Adjusted earnings per common share (non-GAAP):                            
Basic   $ 1.99     $ 1.52     $ 1.70     $ 1.67     $ 1.85     $ 6.88     $ 6.89  
Diluted   $ 1.97     $ 1.51     $ 1.69     $ 1.65     $ 1.83     $ 6.82     $ 6.80  
                             
ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)                            
                             
Adjusted net income (non-GAAP) (from above)   $ 33,315     $ 25,386     $ 28,350     $ 28,024     $ 31,129     $ 115,075     $ 114,861  
                             
Average Assets   $ 8,535,732     $ 8,287,813     $ 7,924,597     $ 7,906,830     $ 7,800,229     $ 8,165,805     $ 7,206,180  
                             
Adjusted return on average assets (annualized) (non-GAAP)     1.56 %     1.23 %     1.43 %     1.42 %     1.60 %     1.41 %     1.59 %
Adjusted return on average equity (annualized) (non-GAAP)     15.64 %     12.12 %     13.88 %     14.11 %     16.44 %     13.94 %     15.36 %
                             
NET INTEREST MARGIN (TEY) (4)                            
                             
Net interest income (GAAP)   $ 55,736     $ 55,255     $ 53,205     $ 56,810     $ 65,218     $ 221,006     $ 231,120  
Plus: Tax equivalent adjustment (5)     7,954       7,771       6,542       6,057       5,554       28,237       16,340  
Net interest income – tax equivalent (Non-GAAP)   $ 63,690     $ 63,026     $ 59,747     $ 62,867     $ 70,772     $ 249,243     $ 247,460  
Less: Acquisition accounting net accretion     673       539       134       828       5,688       2,173       8,581  
Adjusted net interest income   $ 63,017     $ 62,487     $ 59,613     $ 62,039     $ 65,084     $ 247,070     $ 238,879  
                             
Average earning assets   $ 7,631,035     $ 7,573,785     $ 7,283,286     $ 7,247,605     $ 7,148,578     $ 7,435,361     $ 6,628,224  
                             
Net interest margin (GAAP)     2.90 %     2.89 %     2.93 %     3.18 %     3.62 %     2.97 %     3.49 %
Net interest margin (TEY) (Non-GAAP)     3.32 %     3.31 %     3.29 %     3.52 %     3.93 %     3.35 %     3.73 %
Adjusted net interest margin (TEY) (Non-GAAP)     3.29 %     3.28 %     3.28 %     3.47 %     3.61 %     3.32 %     3.60 %
                             
EFFICIENCY RATIO (6)                            
                             
Noninterest expense (GAAP)   $ 60,938     $ 51,081     $ 49,727     $ 48,785     $ 49,697     $ 210,531     $ 190,016  
                             
Net interest income (GAAP)   $ 55,736     $ 55,255     $ 53,205     $ 56,810     $ 65,218     $ 221,006   $ $ 231,120  
Noninterest income (GAAP)     47,729       26,593       32,520       25,842       21,219       132,684       80,729  
Total income   $ 103,465     $ 81,848     $ 85,725     $ 82,652     $ 86,437     $ 353,690     $ 311,849  
                             
Efficiency ratio (noninterest expense/total income) (Non-GAAP)     58.90 %     62.41 %     58.01 %     59.02 %     57.50 %     59.52 %     60.93 %
                             
(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% with the exception of acquisition costs which have an estimated effective federal tax rate of 13.62%.
(3) The CECL Day 2 provision for credit losses on acquired non-PCD loans and OBS exposures resulted from the Guaranty Bank acquisition on April 1, 2022.
(4) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(5) Net interest margin (TEY) is a non-GAAP financial measure. The Company’s management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it’s difficult to provide a more realistic run-rate for future periods.
(6) Efficiency ratio is a non-GAAP measure. The Company’s management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.

 

 

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