QCR HOLDINGS INC
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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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.
Sep 30, 2024 · Filed Nov 8, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Investment Securities
The composition of the Company’s securities portfolio is managed to meet liquidity needs while prioritizing the impact on interest rate risk, maximizing return and minimizing credit risk. Over the years, the Company has further invested in tax-exempt municipal securities made up of 11% general obligation bonds and 89% revenue bonds. The majority are privately placed tax-exempt debt issuances by municipalities located in the Midwest (with some in or near the Company's existing markets) and diversified across many issuers. The Company monitors the investments and concentration closely. Of the general obligation and revenue bonds in the Company's portfolio, the majority are unrated bonds that represent small, private issuances that require a thorough underwriting process before investment and are generated by our specialty finance group.
Trading securities had a fair value of $58.7 million as of September 30, 2024 and consisted of retained beneficial interests acquired in conjunction with loan securitizations completed by the Company in 2023 and 2024. The change in market value on trading securities was a net loss of $200 thousand for the three months ended September 30, 2024 and a net gain of $52 thousand for the nine months ended September 30, 2024. See also Note 4 to the Consolidated Financial Statements for details of these securitizations.
Part I
Item 2
Following is a breakdown of the Company's securities portfolio by type, the percentage of net unrealized gains (losses) to carrying value on the total portfolio, and the portfolio duration:
| | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| · · As of · | |||||||||||||||||||||||
| · · September 30, 2024 · · June 30, 2024 · · · December 31, 2023 · · September 30, 2023 | |||||||||||||||||||||||
| · Amount · % · Amount · % · · Amount · % · · Amount · % · | |||||||||||||||||||||||
| · · (dollars in thousands) | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. govt. sponsored agency securities | | $18,621 | 2% | $20,101 | 2% | | $14,973 | 1% | | $16,002 | 2% | ||||||||||||
| Municipal securities | | 965,811 | 84% | 885,046 | 86% | | 853,442 | 85% | | 764,017 | 85% | ||||||||||||
| Residential mortgage-backed and related securities | | 53,487 | 5% | 54,708 | 5% | | 59,196 | 6% | | 57,946 | 6% | ||||||||||||
| Asset-backed securities | | | 10,455 | | 1% | | 12,721 | | 1% | | | 15,423 | | 2% | | | 16,326 | | 2% | ||||
| Other securities | | 39,190 | 3% | 38,464 | 4% | | 40,125 | 4% | | 42,283 | 5% | ||||||||||||
| Trading securities | | 58,685 | 5% | 22,362 | 2% | | 22,369 | 2% | | — | - | % | |||||||||||
| | | $1,146,249 | 100% | $1,033,402 | 100% | | $1,005,528 | 100% | | $896,574 | 100% | ||||||||||||
| | | | | | | | | ||||||||||||||||
| Securities as a % of total assets | | 12.61% | | 11.65% | | | 11.78% | | | 10.50% | | ||||||||||||
| Net unrealized losses as a % of Amortized Cost | | (4.11)% | | (7.17)% | | | (4.96)% | | | (16.86)% | | ||||||||||||
| Duration (in years) | | 5.8 | | | 6.2 | | | | 6.2 | | | | 5.5 | | | | |||||||
| Annual yield on investment securities (tax equivalent) | | | 5.32% | | | | 5.08% | | | | | 4.30% | | | | | 4.55% | | | ||||
The Company has not invested in non-agency commercial or residential mortgage-backed securities or pooled trust preferred securities. See Note 2 to the Consolidated Financial Statements for additional information regarding the Company's investment securities.
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