Qcr Holdings, Inc. · NASDAQ:QCRH
Qcr — Investor Presentation (July 2016)
39 slides from Qcr's investor presentation, Jul 26, 2016
Slide 1: QCR Holdings, Inc. June 2016
CR HOLDINGS, INC. June 2016
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, descriptions of the financial condition,
Slide 3: Forward-Looking Statements - Continued
FORWARD-LOOKING STATEMENTS - Continued (@) changes in the prices, values and sales volumes of residential and commercial real estate; (x) the effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services; (xi) the risks of
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES These slides contain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adj
Slide 5: Corporate Overview
CORPORATE OVERVIEW QCR Holdings, Inc. - Founded in 1993 Headquartered in Mol: e, IL NASDAQ - QCRH Russell 2000° Index Member =f as of June 30, 2015 Minnéapolis : $2.7 BILLION IN ASSETS: $1.9 BILLION IN LOANS $2.0 BILLION IN DEPOSITS 19 FACILITIES @ Quad City Bank & Trust (6) : 9 (2) : © Cedar Rapids
Slide 6: May 2015 Equity Offering Strategic Highlights
MAY 2015 EQUITY OFFERING STRATEGIC HIGHLIGHTS * Bolstered capital ratios and brought TCE ratio more in-line with industry peers * Funding restructure significantly improved net interest margin * Significantly shortened the time period to achieve our targeted 1.0% ROAA + Attracted additional institut
Slide 7: May 2015 Equity Offering Results
MAY 2015 EQUITY OFFERING RESULTS + Successfully priced an offering of 3,680,000 million QRH common shares on May 7 * Stock closed on May 7 at $19.04 (pre-offering), the offering priced at $18.25 per share and the stock closed on May 8 at $20.08, an increase of approximately 5.5% over the close the p
Slide 8: Investment Rationale
INVESTMENT RATIONALE $2.7B asset bank holding company with critical mass in attractive and target rich markets in lowa and Illinois = Top 2 bank with 12% market share in the Quad Cities, lowa/lllinois and Top 4 in Cedar Rapids, lowa with 10% share = Quad Cities is the International Headquarters for
Slide 9: Unique Products and Services
UNIQUE PRODUCTS AND SERVICES Correspondent Banking Wealth Management + Competitively positioned with veteran staff, software, + $1.76B in Trust (and related) accounts and $702MM in systems and processes Brokerage (and related) accounts as of 6/30/16 + More than 176 relationships to date with an aver
Slide 10: QCR Holdings, Inc. - Market Overview
QCR HOLDINGS, INC. - MARKET OVERVIEW + Meaningful market share position in each MSA served, with room for continued growth + Each MSA falls within the top 15 largest MSAs in IL and IA by total deposits + The states in which QCRH operates are projected to have household income growth above the nation
Slide 11: Capitalizing on Opportunities in Our Market
“CAPITALIZING” ON OPPORTUNITIES INOUR MARKET + Leverage renewed capital strength and relationship driven approach to capture greater organic market and relationship share + Sele ly pursue accretive acquisition opportunities Operating markets are highly fragmented: = 920 community banks are headquart
Slide 12: Top MSAs / Iowa and Illinois
TOP 25 MSAS / IOWA AND ILLINOIS Number ot Number of : Crh lara Denoste 699 nsuions ‘Sronches ——_‘Popuadon ets Chea apente-, LN ss4sue 29 295 asia mx sear 140% Sait oi, OL 9903 0 s9 er2902 02 S708 169 maa cone NEA 29201 7 x 8168 ost seazr 157 16001 se zs onrsea 124 4250 155 19708 x a ‘91024 030 65080
Slide 13: QCR Holdings, Inc.
HOLDINGS, INC. arelationship driven organization®
Slide 14: Total Consolidated Assets
TOTAL CONSOLIDATED ASSETS CAGR From 1994-2015: 21.98% $3,000 $2,000 $1,000 Source: Company coments. ote n mos s 2 S 2. rl 2 3 2 «
Slide 15: Income Statement Results & Key Earnings Metrics
INCOME STATEMENT RESULTS & KEY EARNINGS METRICS Repoted _—Repoted —Reparted Reported Reported core Reported avi = BAYR «AY RAY RAIS «BAIS —_g/s0ni6yTO Net Income Available to Common S44 $9.1 $118 $13.9 $16.9 $20.9 $13.1 NIM (%) 3.08% 3.14% 303% «3.15% 337% «3H 61% ROAA (%) 051% 0.62% 064% —«061% = O
Slide 16: Strong Commercial Loan Growth
STRONG COMMERCIAL LOAN GROWTH + C&l and Direct Financing Lease balances grew approximately 63% and 32%, respectively from 2013 to Q2 2016 + 31% overall loan growth from 2013 to Q2 2016 represented all organic growth + Commercial lending® represents more than 87% of the portfolio + 2013 loan growth s
Slide 17: m2 Lease Funds LLC Overview
m2 LEASE FUNDS LLC OVERVIEW + National equipment leasing platform + Focus includes commercial equipment! building and construction machinery and assets, medical equipment, office equipment (computer hardware and software), and vehicles classified as heavy equipment + High yield portfolio; average gr
Slide 18: Asset Quality Overview
ASSET QUALITY OVERVIEW Classified Loans ($M) & NPAs / Assets Nonperforming Assets Composition — 2016 Q2 $70 25% 2.06% 0.46% $60 2.0% (Other Real Estate Owned & Rep. 141% Asset 33498 128% $50 = 131% um | a sNonaceralLoans/Leases 56.70% 46 0.74%, rn $18.9M Troubled Debe Restructres Accruing-927% $30 0
Slide 19: Evolution of Funding Base
EVOLUTION OF FUNDING BASE Average Funding Base - 2010 Average Funding Base 2016 Q2 oorronings 334% Mborowings 133% smronitarst Bearing Mornteres eating Deposts 3a. Depostsaean $1,684M $2,346M Interest @aaring Demand Interest Bering Demand Depoate 255% Dupont 2.256 ‘rime Dupont 27.6% ‘Time Deposts 18
Slide 20: Attractive Revenue Mix & Growth Trend
ATTRACTIVE REVENUE MIX & GROWTH TREND ued Strong Top ine Revenue Growth Trends ($M) CAGR From 2010 - 2015: 8.47% xe Strong fee income streams provide stability and complement to spread revenue Key Differentiators: + Wealth Management ($2.58 in AUM) + Correspondent banking (176 relationships) + SBA/
Slide 21: Improving Returns for Common Shareholders
IMPROVING RETURNS FOR COMMON SHAREHOLDERS Net Income to Common Shareholders ($M) Approxit ~39.99% Net to Cc CAGR From 2011 — 2015 HI 2011 2012 2013 2014 2015-20162. YTD $18.0 $12.0 $6.0 $0.0
Slide 22: Strategies to Continue to Drive Shareholder Value
STRATEGIES TO CONTINUE TO DRIVE SHAREHOLDER VALUE + Target loans and leases to total assets ratio in the range of 70-75% (72% as of 6/30/16) + Continued reductions in wholesale funding to less than 15% of assets (30% as of 12/31/14), now 18.0% as of 6/30/16 + Increase gain on sale of USDA and SBA lo
Slide 23: Concluding Remarks
CONCLUDING REMARKS * Critical mass in attractive and target rich markets in lowa and Illinois + 3charter model allows subsidiary banks to customize solutions by market + Differentiated product offering includes correspondent banking, wealth management, leasing and SBA/USDA lending + Strong asset qua
Slide 24: QCR Holdings, Inc.
HOLDINGS, INC. arelationship driven organization®
Slide 25: History of QCR Holdings, Inc.
HISTORY OF QCR HOLDINGS, INC. 1993 - Founded by Mike Bauer and Doug Hultquist - $14 Million IPO 1994 - Quad City Bank & Trust (De Novo) ~ Currently $1.39 Billion in Assets 1995 - Quad City Bancard Formed 2001 - Cedar Rapids Bank & Trust (De Novo) ~ Currently $904 Million in Assets (includes Communit
Slide 26: Executive Management Team
EXECUTIVE MANAGEMENT TEAM DOUGLAS M. HULTQUIST, CPA President and Chief Executive Ofeer 39 Years in Banking / Financial Services TODD A. GIPPLE, CPA Executive Vice President, Chief Operating Officer and Chief Financial Offcer 31 Years in Banking / Financial Services JOHN H, ANDERSON President and Ch
Slide 27: The Strategic Value of Our Separate Charters
THE STRATEGIC VALUE OF OUR SEPARATE CHARTERS * 3distinct (yet similar) operating charters — able to customize solutions by market + Managed by local veteran bankers, governed by local Board of Directors, local decisions, local solutions, enhanced market specific knowledge * 3charters supported by QC
Slide 28: Quad City Bank & Trust
QUAD CITY BANK & TRUST John H. Anderson, President & CEO Assets: $1.39 Billion (as of 6/30/16) Population: 383,699 Market Deposits: $7.5 Billion Ranked 2° with 12.3% market share and over $990 Millon in posits in Davenport Moine-Rock Island MSA, Highlights — Quad Cities. ‘manufacturing arsenal in th
Slide 29: Cedar Rapids Bank & Trust
CEDAR RAPIDS BANK & TRUST Highlights - Cedar Rapids CEDAR, RAPIDS + International Headquarters for Rockwell Colins USA i AN K& + US. Headquarters was Fae J. Helling, President & CEO ‘and 267 room Double Tree Hotel + $904 Milion* (as of 6/30/16) "feckueres bung nnn cpdadto ba cited 0218 conisbent 265
Slide 30: Rockford Bank & Trust
ROCKFORD BANK & TRUST Thomas D. Budd, President & CEO Highlights - Rockford (August 2018) Population: 339,609 ‘deposits in Rockford MSA Major Employers Rockford Public Schoo! District ground breaking for FedEx faclity generating 150 new jobs Gorman & Co, + Considered Ilinos’ second largest city ‘ock
Slide 31: Community Bank & Trust
COMMUNITY BANK & TRUST ( {COMMUNITY Highlights - Waterloo/Cedar Falls Sm BANK + John Deere cong '$150MM modernization of John Deere Foundry — total Stacey J. Bentley, President & CEO investment by Deere in Wateroo in he last decade equals $18 port Industrial Park Population: 170,883 + The city of Wa
Slide 32: Group Operations
Group Operations + Accounting and Treasury —Beth Grabin and John Oakes + Customer Service/Item Processing — Kathy Francque + Deposit Operations — Beth Easterla and John Rodriguez + Funds Management — John McEvoy + Human Resources — Jill Dekeyser and Shellee Showalter + Information Technology — Micha
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share Asotana ter the [Aofond forthe Yen ended December 33, urn andes Tne 3 (5 inthousonds, except per share dete) 2010 zou aoe 2013 208 2015 2016 Tangible Common Equity Total equity $ sas $ S tsoase $7577
Slide 34: Capital Ratios & Valuation
CAPITAL RATIOS & VALUATION Financial Institutions with Assets Between $500M — $5.0B Pricing Metric as of 5/8/15, ‘Summary Financial Performance Median: Median: of Institutions TCE Level Prrev P/LTM EPS, Lm Roma UTM ROAE LTMROATCE 91 211% 1087 14.0 0.89% 73% 73% 58 10% 11% 122.7% 153 0.93% 38% 9.6% 2
Slide 35: Deposit Market Share - Quad City Bank & Trust
Deposit Market Share - Quad City Bank & Trust Institution Name Offices in MSA Market Share 1. Wells Fargo Bank 16 1,078.0 14.29 % 2. Quad City Bank & Trust 5 929.8 12.32 % 3. Blackhawk Bank & Trust 16 830.5 11.01 % 4. U.S. Bank 1 604.8 8.02% 5. Triumph 10 534.7 7.09 % 6. First Midwest Bank 6 375.5 4
Slide 36: Deposit Market Share - Cedar Rapids Bank & Trust
Deposit Market Share - Cedar Rapids Bank & Trust Institution Name Offices in MSA Deposits* Market Share 1. U.S. Bank 10 887.5 16.18 % 2. Wells Fargo Bank " 620.7 11.32% 3. Farmers State Bank 8 568.4 10.36 % 4. Cedar Rapids Bank & Trust 2 529.9 9.66 % 5. Hills Bank & Trust 6 365.6 6.67 % 6. Bankers T
Slide 37: Deposit Market Share - Rockford Bank & Trust
Deposit Market Share - Rockford Bank & Trust Institution Name Offices in MSA Market Share 1. Alpine Bank & Trust 7 1,069.7 19.04 % 2. Associated Bank 6 701.2 12.48 % 3. JP Morgan Chase 7 615.6 10.96 % 4. BMO Harris "1 584.9 10.41 % 5. Illinois Bank & Trust 4 366.8 653 % 6. PNC Bank 9 332.7 5.92% 7.
Slide 38: Deposit Market Share - Community Bank & Trust
Deposit Market Share - Community Bank & Trust Institution Name 1. » xno 9. Farmers State Bank U.S. Bank . Wells Fargo Bank . Lincoln Savings Bank . First National Bank . Regions Bank GNB Bank . State Bank Community Bank & Trust 10. Denver Savings Bank Offices in MSA RO a oo Market Share 487.0 15.63
Slide 39: ae WE
ae WE 3551 7" Street Moline, Illinois 61265,