Qcr Holdings, Inc. · NASDAQ:QCRH
Qcr — Investor Presentation (October 2022)
34 slides from Qcr's investor presentation, Oct 31, 2022
Slide 1: Investor Presentation Updated October 31, 2022
Investor Presentation Updated October 31, 2022
Slide 2: Forward-looking statements
This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may contain, forward - looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to the f
Slide 3: Why QCRH?
Why QCRH ? x Our business model is better. x Our performance is better. x Our future is bright. 3 Business Model Performance Outlook Local charter autonomy attracts the best bankers and clients High - performing niche businesses EPS CAGR of 15% in last five years and positioned for sustained growth
Slide 4: How We're Different
QCR Holdings, Inc. HOW WE’RE DIFFERENT 4
Slide 5: A business model that works
QCR Holdings, Inc. (NASDAQ: QCRH) | Founded in 1993 A business model that works. x Local charter autonomy with efficient support from centralized group operations x Agile and responsive to client needs x Attracts the best bankers and the best clients in each market x Highly competitive with larger n
Slide 6: Exceptional Growth in Key Financial Metrics
6 Exceptional Growth in Key Financial Metrics In the last five years, our company has doubled in size and delivered consistent, steady growth - outperforming many of our peers. CAGR = Compound Annualized Growth Rate; *Nine months annualized Financial Metric 12/31/2016 9/30/2022 CAGR % Core Earnings
Slide 7: QCRH is a Top Performer
QCRH is a Top Performer Source: KBW and S&P Capital IQ Pro. Financial data is as of June 30, 2022. (1) Includes banks and thrifts traded on the NYSE, NYSEAM or NASDAQ as of 9/29/22; excludes merger targets. (2) Defined as having positive net income before extraordinary items and preferred dividends
Slide 8: Our Strategy for Long-Term Success
Our Strategy for Long - Term Success We’ve set a simple and focused strategy for our future. 9 - 6 - 5 is our plan to continue to grow earnings and drive attractive long - term returns for our shareholders. 9 – Grow loans by 9% per year, funded with core deposits 6 – Grow fee income no less than 6%
Slide 9: How is QCRH different? Our niches drive outstanding results
How is QCRH different? Our niches drive outstanding results. • Fiduciary services • Investment management services • Financial planning • Brokerage services • 9/30/22 AUM: $4.3B • Competitive deposit products with approximately $900M in total liquidity • Safekeeping and cash management services • 18
Slide 10: A Complex and Profitable Business: Specialty Finance Group
A Complex and Profitable Business: Specialty Finance Group 10 With decades of experience, our team has navigated the complexity of the municipal and tax credit financing space – creating a sustainable and profitable business at QCRH. Our SFG business is a unique niche that offers: • A strong pipelin
Slide 11: Specialty Finance Group: A Complex and Profitable Business
11 $0.6 $0.8 $9.1 $67.9 $60.5 $39.3 $30 $26.5 $0 $10 $20 $40 $50 $60 $70 $80 Fee Income Fee Income ($MM) $491.8 $657.3 $863.3 $1,157.7 $1,632.3 $2,182.6 $2,566.7 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Loan and Bond Balances Loan and Bond Growth ($MM) Specialty Finance Group: A Complex and Profit
Slide 12: SFG: Providing Municipal and Tax Credit Financing Solutions
SFG: Providing Municipal and Tax Credit Financing Solutions $18.9 $79.9 $229.4 $564.5 $1,097.1 $1,502.3 $6.0 $4.1 $122.8 $205.7 $231.6 $274.5 $280.3 $214.3 $304.0 $372.0 $394.6 $395.0 $472.6 $469.4 $536.6 $177.7 $143.5 $183.2 $301.7 $320.7 $335.8 $313.5 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 201
Slide 13: Low Income Housing Tax Credit Loans
QCRH (LENDER) BORROWER / LOW INCOME HOUSING PROJECT TAX CREDIT EQUITY INVESTORS Loan Payments Tax Credits Equity Investment Loa n Rent STRONG BORROWERS • Experienced low income housing developers • Projects located predominantly in the Central U.S. and the Southeast • Tax credit investors are primar
Slide 14: A Broad Scope of Wealth Management Services
A Broad Scope of Wealth Management Services The ultimate relationship business, our wealth management structure and extensive scope of services cater to our clients’ needs. Wealth Management & Trust Services • Investment management • Financial planning • Trust services • Fiduciary services • Tax ser
Slide 15: Diverse and Growing Client Relationships
15 Diverse and Growing Client Relationships $9.9 $11.4 $12.0 $12.6 $15.3 $14.6 $14 $12 $10 $8 $6 $4 $2 $0 $16 $18 2017 2018 2021 9/30/2022 2019 2020 Revenue * All data excludes Bates and RB&T. 9/30/2022 Revenue is annualized. Revenue ($M)* $2.5 $2.5 $3.1 $3.4 $4.2 $3.3 $0.9 $0.9 $1.0 $1.0 $1.2 $1.0
Slide 16: Correspondent Banking
Correspondent Banking Our strong Correspondent Banking business provides significant liquidity to fund growth. $200.5 $157.7 $277.4 $336.0 $143.1 $187.2 $182.0 $123.9 $322.9 $425.9 $219.9 $309.6 $255.3 $294.0 $631.9 $1,333.7 $1,261.2 $426.7 $643.0 $599.9 $1,112.5 $2,037.0 $1,817.1 $879.4 $0 $500 $1,
Slide 17: Our Markets
QCR Holdings, Inc. OUR MARKETS Vibrant Commercial and Industrial Activity 17
Slide 18: We do business in vibrant markets
We do business in vibrant markets. Relationships matter and differentiate us from big banks Robust commercial, industrial and technology activity Strong demographics & highly educated workforce drive steady growth Mid - sized metros 200K - 500K population MSAs Ability to gain prominent market share
Slide 19: Strong Market Share in Attractive MSAs
19 Strong Market Share in Attractive MSAs * MSAs include Davenport - Moline - Rock Island, IA - IL, Cedar Rapids, IA, Black Hawk County, IA, Des Moines/West Des Moines - IA, Joplin, MO and Springfield, MO. All banks reflect Pro Forma Data from acquisitions. Source: S&P Global Market Intelligence and
Slide 20: Acquisition of Guaranty Federal Bancshares: Pro Forma Impact
• First Full Year EPS Accretion (2023): $0.81 / 13.1% • IRR: 20.4% • TBV Dilution: 5.2% • TBV Earn back: 2.75 years (Crossover) 2.71 years (Simple) • TCE / TA: 9.3% • CET1 Ratio: 10.1% • Total RBC Ratio: 14.1% Financially Compelling Pro Forma Impact Acquisition of Guaranty Federal Bancshares, Inc. (
Slide 21: Our Charters at a Glance
21 Our Charters at a Glance Location and deposit data as of 9/30/22. Cedar Rapids Bank & Trust includes Community Bank & Trust in the Cedar Valley. Entity States/Region # Locations Deposits Market Share Iowa/Illinois Quad Cities 5 $1.7B #1 Iowa Cedar Rapids/ Cedar Valley 8 $1.6B #1 Missouri Southwes
Slide 22: Demonstrated Strong Results in Prior M&A: Springfield
Demonstrated Strong Results in Prior M&A Springfield First Community Bank in Springfield MSA SFC Net Income Comparison ($M) $462.2 $545.1 $429.1 $666.8 $752.0 $725.1 $882.9 $650.2 $590.2 $200 $100 $0 $300 $700 $600 $500 $400 $1,000 $900 $800 Total Loans Total Assets Core Deposits Pre - Acquisition a
Slide 23: Demonstrated Strong Results in Prior M&A: Community State Bank
Demonstrated Strong Results in Prior M&A Community State Bank in Ankeny/Des Moines MSA CSB Net Income Comparison ($M) CSB Loans/Assets/Deposits Comparison ($M) $444.6 $594.0 $481.3 $607.3 $782.1 $673.4 $867.0 $1,168.6 $1,020.5 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Total Loans Total Assets Core
Slide 24: Financial Highlights
24 QCR Holdings, Inc. FINANCIAL HIGHLIGHTS
Slide 25: A Consistent Track Record of Asset Growth
25 $2.9 $3.5 $4.4 $4.9 $5.7 $6.1 $7.7 71.9% 73.8% 75.0% 75.2% 74.8% 76.8% 78.5% 2016 2018 2017 Total Assets 2019 2020 2021 9/30/2022 Total Loans & Leases/Total Assets (1) Rockford Bank & Trust assets were removed from this data. (2) Includes $298.6 million of the assets of m2 Equipment Finance, as t
Slide 26: Loan Growth Driven by Commercial Lending
26 $1.0 $1.3 $1.5 $1.7 $1.6 $1.7 $1.1 $1.6 $1.8 $2.1 $2.6 $3.6 $0.2 $0.2 $0.2 $0.1 $0.2 $0.1 $0.2 $0.1 $0.3 $0.1 $0.1 $0.1 $0.1 $0.1 $2.6 $3.3 $3.7 $4.3 $0.1 $4.7 $6.0 $0.1 $0.5 $0.1 2019 Commercial RE 2020 Direct Fin. Leases 2021 Residential RE 9/30/2022 Consumer & Other 2017 2018 Commercial & Indu
Slide 27: Deposit Growth Driven by Core Deposits
27 34% 31% 25% 20% 18% 22% 48% 52% 60% 57% 67% 67% 15% 15% 13% 16% 12% 11% 3% 2% $2.9 $3.5 $3.9 2% $4.6 $4.9 $5.9 2017 2018 2019 Noninterest - bearing Deposits Time Deposits 9/30/2022 2020 2021 Interest - bearing Deposits Brokered Deposits Deposit Growth Driven by Core Deposits Core Deposits* Repres
Slide 28: Interest Rate Sensitivity
28 Interest Rate Sensitivity Rate Sensitive Assets* Rate Sensitive Liabilities* $2.4B $1.5B Asset Sensitive Balance Sheet Pro Forma with Guaranty Bank (as of 9/30/22) • The addition of Guaranty Bank’s balance sheet enhanced our asset sensitivity. • Majority of fixed - rate commercial and CRE loans h
Slide 29: Strong Capital Position
29 Strong Capital Position 8.01% 7.78% 9.25% 9.08% 9.87% 7.68% 11.15% 10.69% 13.33% 14.95% 14.77% 14.55% 6.00% 4.00% 8.00% 10.00% 12.00% 14.00% 16.00% QCRH is well - positioned for long - term success: • Significantly improved capital position over time • Subordinated debt raises in Feb. 2019, Sept.
Slide 30: Asset Quality
30 97.1% 97.1% Nonaccrual Loans/Leases 2.9% - Other Real Estate Owned & Repossessed Assets 2.9% Asset Quality $18.0 million NPAs / Assets Nonperforming Assets Composition as of 9/30/22 Focused on maintaining excellent asset quality and resolving problem assets, resulting in: • Better than peer histo
Slide 31: Strong Credit Culture Supported by High Levels of Reserves
31 145% 184% 404% 605% 517% 180% 183% 215% 214% 194% 347% 724% 742% QCRH Proxy Peers* 1.28% 1.16% 1.07% 1.98% 1.68% 1.51% 1.08% 1.04% 1.03% 0.98% 0.95% 1.53% 1.46% 1.42% QCRH Proxy Peers* *Proxy peer group is identified in the QCRH Proxy Statement. Peer metrics reflect the average of the peer group.
Slide 32: Strong Revenue Growth and Attractive Mix
75% 79% 77% 66% 59% 74% 25% 21% 23% 34% 41% 26% $130 $167 $234 $281 $279 $301 $0 $50 $100 $150 $200 $250 $300 $350 2017 2018 2019 Net Interest Income 2020 2021 9/30/2022 Noninterest Income Key Components of Fee Income: • Capital markets revenue from SFG swap fee income • Wealth Management Predictabl
Slide 33: Consistent Improvement in Shareholder Returns
Consistent Improvement in Shareholder Returns Adjusted Return on Average Assets Efficiency Ratio (%) $36 $46 $59 $63 $100 $112 $3.08 $2.66 $3.66 $3.96 $6.27 $6.87 2017 2018 2019 2020 2021 9/30/2022* Adjusted Net Income $ in millions Adjusted EPS 1.03% 1.06% 1.15% 1.13% 1.70% 1.59% 2017 2018 2019 202
Slide 34: Contact: 3551 Seventh Street, Moline, IL
3551 Seventh Street Moline, IL 61265 www.QCRH.com © Copyright 2022 QCR Holdings, Inc. All Rights Reserved