QCR HOLDINGS INC

For the period ended Jun 30, 2024. Filed Aug 8, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Jun 30, 2024 · Filed Aug 8, 2024

QCRH$100.85-0.3%Stored close · as of Nov 6, 2026

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Executive Overview

The Company reported net income of $29.1 million and diluted EPS of $1.72 for the quarter ended June 30, 2024. By comparison, for the quarter ended March 31, 2024, the Company reported net income of $26.7 million and diluted EPS of $1.58. For the quarter ended June 30, 2023, the Company reported net income of $28.4 million, and diluted EPS of $1.69. For the six months ended June 30, 2024, the Company reported net income of $55.8 million and diluted EPS of $3.30. By

Part I

Item 2

comparison, for the six months ended June 30, 2023, the Company reported net income of $55.6 million and diluted EPS of $3.29.

The second quarter of 2024 was also highlighted by the following results and events (see section titled “GAAP to Non-GAAP Reconciliations” for additional information):

●	Net interest income up $1.5 million, or 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; and

●	Tangible book value (non-GAAP) per share growth of $1.72, or 15% annualized.

Following is a table that represents various net income measurements for the Company:


· · For the three months ended · · For the six months ended ·
· June 30, 2024 · March 31, 2024 · June 30, 2023 · June 30, 2024 · June 30, 2023 ·
· · (dollars in thousands) · · · · · · ·

Net income	$29,114	$26,726	$28,425	$55,840	$55,582

Diluted earnings per common share	$1.72	$1.58	$1.69	$3.30	$3.29

Weighted average common and common equivalent shares outstanding	16,921,854	16,910,675	16,799,527	16,916,264	16,870,830

The Company reported adjusted net income (non-GAAP) of $29.3 million, with adjusted diluted EPS (non-GAAP) of $1.73 for the three months ended June 30, 2024. See section titled “GAAP to Non-GAAP Reconciliations” for additional information. Adjusted net income (non-GAAP) for the three months ended June 30, 2024 excludes a non-recurring item, after-tax, as set forth in the GAAP to Non-GAAP Reconciliation section. The Company reported adjusted net income (non-GAAP) of $56.1 million, with adjusted diluted EPS (non-GAAP) of $3.32 for the six months ended June 30, 2024. Adjusted net income (non-GAAP) for the six months ended June 30, 2024 excludes a non-recurring item, after-tax, as set forth in the GAAP to Non-GAAP Reconciliation section.

Following is a table that represents the major income and expense categories for the Company:


· · For the three months ended · · For the six months ended ·
· June 30, 2024 · March 31, 2024 · June 30, 2023 · June 30, 2024 · June 30, 2023
· · (dollars in thousands) · · · · · · ·

Net interest income	$56,163	$54,699	$53,205	$110,862	$110,015
Provision for credit losses	5,496	2,969	3,606	8,465	7,534
Noninterest income	30,889	26,858	32,520	57,747	58,362
Noninterest expense	49,888	50,690	49,727	100,578	98,512
Federal and state income tax expense	2,554	1,172	3,967	3,726	6,749
Net income	$29,114	$26,726	$28,425	$55,840	$55,582

Following are some noteworthy changes in the Company's financial results:

●

Net interest income in the second quarter of 2024 increased 3% compared to the first quarter of 2024 due to expanded margin and strong loan growth, and increased 6% when compared to the second quarter of 2023 due to higher average earning assets. Loan discount accretion decreased by $95 thousand from the prior quarter. Net interest income increased 1% when comparing the first six months of 2024 to the same period of the prior year. The increase was primarily due to higher average earning assets.

Part I

Item 2

●

Provision expense in the second quarter of 2024 increased $2.5 million as compared to the first quarter of 2024 and increased $1.9 million when compared to the second quarter of 2023. Provision expense in the first six months of 2024 increased $931 thousand compared to the first six months of 2023. The increase across both periods was due to strong loan growth and the impact of declining GDP on our CECL model factors. In addition, there was negative provision of $445 thousand on AFS securities for the first quarter of 2024 related to the sale of a debt investment in a failed bank. See the “Provision for Credit Losses” section of this report for additional details.

●

Noninterest income in the second quarter of 2024 increased $4.0 million, or 15%, compared to the first quarter of 2024. The increase in the second quarter compared to the linked quarter was primarily due to higher capital markets revenue from swap fees as strong demand for affordable housing established by our tax credit lending clients has continued. The demand for low-income housing remains healthy and the economics associated with these tax credit projects continue to be favorable. The Company has a strong pipeline for this business and expects it to continue to be a solid source of fee income in 2024. Additionally, the Company realized income of $2.2 million from BOLI policy proceeds received during the second quarter of 2024. Noninterest income decreased $1.6 million, or 5%, compared to the second quarter of 2023. Noninterest income decreased $615 thousand, or 1%, when comparing the first six months of 2024 to the same period of the prior year.

●

Noninterest expense decreased $802 thousand, or 2%, in the second quarter of 2024 compared to the first quarter of 2024. This decrease in the second quarter compared to the linked quarter was primarily due to lower salaries and employee benefits and lower loan/lease expense, partially offset by higher professional and data processing expense. Noninterest expense remained stable compared to the second quarter of 2023. Noninterest expense increased $2.1 million, or 2%, when comparing the first six months of 2024 to the same period in the prior year. This increase was primarily due to higher professional and data processing expense.

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