Qcr Holdings, Inc. · NASDAQ:QCRH
Qcr — Investor Presentation (May 2019)
38 slides from Qcr's investor presentation, May 7, 2019
Slide 1: Forward-looking statements
This document contains, and future oral and written statements of QCR Holdings (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,
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This document contain, and future oral and written statements of QCR Holdings (the "Company" and its management may contain, forward-Jooking statements within the meaning ofthe Private Secures tigation Reform Act of 1995 with respect othe financial ondton, results of opera
Slide 3: Our Values – Lived and Expected of All at QCRH
Collaboration Achievement Personal Responsibility Innovation Fulfillment Our Values – LIVED AND EXPECTED OF ALL AT QCRH We work to win. In order to win over our clients with outstanding service, we strive to achieve more than we have done in the past and to achieve more than our competitors. We lear
Slide 4: Local charters provide a competitive advantage
Local charters provide a competitive advantage Strong, centralized risk management function Efficient centralized group operations Strong credit and asset quality Consistent adjusted net income growth High touch service approach Serving attractive Midwest markets Significant expansion opportunities
Slide 5: Corporate Overview
Corporate Overview Assets: $5.1 Billion Loans: $3.8 Billion Deposits: $4.2 Billion Wealth Management: $4.6 Billion $2.9 Billion in Trust Accounts $1.7 Billion in Brokerage Accounts / RIA Shares Outstanding: 15.8 Million Ownership (as of 12/31/18): Institutional & Mutual Funds 60% Insiders & Benefit
Slide 6: Executive Leadership Transition
Executive Leadership Transition Larry J. Helling Over 30 years of commercial banking experience Founding member and CEO of Cedar Rapids Bank & Trust QCR Holdings, Inc. Board Director since 2001 Oversight responsibility for specific product lines and services Specialty Finance Group Municipal Finance
Slide 7: The Value of Separate Charters
THE VALUE OF SEPARATE CHARTERS Source: FDIC deposit market share data as provided by S&P Global (as of 6/30/18). Our five distinct, yet similar, operating charters enable us to customize client solutions by market Managed and governed by local veteran bankers and boards with strong community ties an
Slide 8: History of Expanding into Attractive Markets
MISSOURI ILLINOIS IOWA WISCONSIN HISTORY OF EXPANDING INTO ATTRACTIVE MARKETS 1993 QCR Holdings founded by Michael A. Bauer and Douglas M. Hultquist - $14 million IPO 1994 Quad City Bank & Trust (De Novo) 2005 Rockford Bank & Trust (De Novo) Quad City Bank & Trust acquires m2 Lease Funds, LLC 2001 C
Slide 9: Strong Market Share in Attractive MSAs
STRONG MARKET SHARE IN ATTRACTIVE MSA’S * MSAs include Davenport-Moline-Rock Island, IA-IL, Cedar Rapids, IA, Rockford-IL, Waterloo-Cedar Falls-IA, Des Moines/West Des Moines-IA, and Springfield, MO. All banks reflect Pro Forma Data from acquisitions. Source: S&P Global Market Intelligence and Compa
Slide 10: Unique and Diversified Products and Services
UNIQUE AND DIVERSIFIED PRODUCTS AND SERVICES QCR Holdings Business Lines Trust administration Brokerage accounts and asset management Financial planning 3/31/19 AUM: $4.6B Competitive deposit products Bank stock loans Safekeeping and cash management services 196 correspondent banking relationships C
Slide 11: Strategies to Continue to Drive Shareholder Value
Ongoing emphasis on gains on sale of USDA and SBA loans, and fee income on Swaps, as a more significant and consistent component of core revenue STRATEGIES TO CONTINUE TO DRIVE SHAREHOLDER VALUE Loan & Lease Growth Grow Core Deposits Fee Income Grow Wealth Management Manage Noninterest Exp Maintain
Slide 12: Strategies to Continue to Drive Shareholder Value
STRATEGIES TO CONTINUE TO DRIVE SHAREHOLDER VALUE Loan & Lease Continue strong organic loan and lease growth to maintain loans and leases to total Growth assets ratio in the range of 73-78% Grow Core Maintain focus on growing core deposits to maintain reliance on wholesale funding at Deposits less t
Slide 13: A Consistent Track Record of Asset Growth
A CONSISTENT TRACK RECORD OF ASSET GROWTH CAGR From 2013-2018: 15.3% Asset growth has been driven by a combination of organic growth and strategic acquisitions Source: S&P Global Market Intelligence and Company documents. Recent Acquisitions (Assets at acquisition date ($ Millions)): 2013: Community
Slide 14: Deposit Growth Driven by Core Deposits
DEPOSIT GROWTH DRIVEN BY CORE DEPOSITS $ in billions CAGR From 2013-2018: 20.1% Core Deposits(1) Represent Approximately 93% of Total Deposits as of 3/31/19 Organic deposit growth CAGR was 11.5% from 2013-2018 Source: S&P Global Market Intelligence and Company documents. (1) Core deposits are define
Slide 15: Cost of Deposits Over Time
COST OF DEPOSITS OVER TIME Historical Cost of Deposits Source: S&P Global Market Intelligence and Company documents. Note: Deposit betas defined as the change in the cost of interest bearing deposits over the change in the Fed Funds rate. Cumulative deposit beta is calculated based on the period fro
Slide 16: Loan Growth Driven by Commercial Lending
LOAN GROWTH DRIVEN BY COMMERCIAL LENDING $ in billions(2) Organic loan growth CAGR was 12.6% from 2013-2018 CAGR From 2013-2018: 19.8% Commercial Loans(1) Represent Approximately 89% of the Loan Portfolio as of 3/31/19 Source: S&P Global Market Intelligence and Company documents. Includes Commercial
Slide 17: Asset Quality
ASSET QUALITY $26.4 million Classified Loans & NPAs / Assets Nonperforming Assets Composition as of 3/31/2019 $ in millions Management remains focused on maintaining excellent asset quality and resolving problem assets Source: S&P Global Market Intelligence and Company documents. 50.8% 34.6% 14.4% 0
Slide 18: Strong Credit Culture Supported by High Levels of Reserves
Source: S&P Global Market Intelligence and Company documents. Note: Proxy peer group is identified in the QCRH Proxy Statement, filed on 4/12/19. Peer metrics reflect the median of the peer group. Proxy peers financial data as of 12/31/18. STRONG CREDIT CULTURE SUPPORTED BY HIGH LEVELS OF RESERVES R
Slide 19: Strong Revenue Growth and Attractive Mix
Predictable and diversified fee income streams complement net interest income STRONG REVENUE GROWTH AND ATTRACTIVE MIX $ in millions CAGR From 2013-2018: 15.1% Key Components of Fee Income: Wealth Management ($4.6 billion in assets under administration as of 3/31/19) Correspondent banking (196 relat
Slide 20: Consistent Improvement in Shareholder Returns
CONSISTENT IMPROVEMENT IN SHAREHOLDER RETURNS Net Income(1) $ in millions Adj. EPS(2) Adj. Net Income CAGR From 2013-2018: 36.3% 22.6% Source: Company documents. Adjusted net income to common shareholders (non-GAAP) – see appendix slide 36 for reconciliation of GAAP net income to adjusted net income
Slide 21: Historical Profitability Metrics
HISTORICAL PROFITABILITY METRICS Source: S&P Global Market Intelligence and Company documents. Non-GAAP – see appendix slide 36 for reconciliation. Adjusted NIM excludes accretable yield (non-GAAP) – see appendix slide 35 for reconciliation of GAAP NIM to adjusted NIM. Non-GAAP – see appendix slide
Slide 22: Execution on Strategic Initiatives
Carefully manage noninterest expense growth (year-over-year) Strong organic loan and lease growth to maintain loans and leases to total assets ratio in the range of 73%-78% Focus on growing core deposits to maintain reliance on wholesale funding to less than 15% of assets Generate gains on the sale
Slide 23: Execution on Strategic Initiatives
EXECUTION ON STRATEGIC INITIATIVES 3/31/2019 = Strong organic loan and lease growth to maintain Loans / Assets ff loans and leases to total assets ratiointhe range *_75.0% at 3/31/19 0f 73%-78% Focus on growing core deposits to maintain reliance on wholesale funding to less than 15% of = 11.9% at 3/
Slide 24: Historical Financials
Source: S&P Global Market Intelligence and Company documents. Non-GAAP – see appendix slide 37 for reconciliation. Non-GAAP – see appendix slide 36 for reconciliation. HISTORICAL FINANCIALS ($ in millions) Years Ended December 31, Nine Months Ended September 30, 2012 2013 2014 2015 2016 2017 2017 20
Slide 25: Capital Ratios
capital ratios The following illustrates the impact of the $65 million subordinated debt raise completed on February 12, 2019 on the Company’s consolidated capital ratios 8.0% 9.0% 9.1% 10.1% 11.2% 7.8% 8.9% 8.9% 9.8% 10.7% 7.9% 8.9% 9.0% 9.8% 12.2% TCE / TA Tier 1 Leverage CET1 Tier 1 Capital Total
Slide 26: Quad City Bank & Trust
QUAD CITY BANK & TRUST John H. Anderson, President & CEO Assets: $1.66 Billion1 (as of 3/31/19) Population: 382,013 Market Deposits: $8.2 Billion Ranked 1st with 15.6% market share and over $1.28 billion in deposits in Davenport-Moline-Rock Island MSA Finalist 2013 and 2014 – Quad Cities Best Place
Slide 27: Cedar Rapids Bank & Trust
CEDAR RAPIDS BANK & TRUST Larry J. Helling, CEO James Klein, President Assets: $1.45 Billion1 (as of 3/31/19) Population: 273,208 Market Deposits: $5.9 Billion Ranked 1st with 16.4% market share and over $970 million in deposits in Cedar Rapids MSA 2018 Top Workplace in Iowa by the Des Moines Regist
Slide 28: Rockford Bank & Trust
ROCKFORD BANK & TRUST Thomas D. Budd, President & CEO Assets: $513 Million (as of 3/31/19) Population: 336,116 Market Deposits: $6.2 Billion Ranked 7th with 6.1% market share and $376 million in deposits in Rockford MSA Major Employers Fiat Chrysler Automobiles Mercyhealth Rockford Public Schools Sw
Slide 29: Community Bank & Trust
COMMUNITY BANK & TRUST Stacey J. Bentley, President & CEO Deposits: $110 Million (as of 6/30/18) Population: 174,244 Market Deposits: $1.7 Billion Ranked 7th with 5.3% market share and over $110 million in deposits in Black Hawk County 2016 and 2017 Employer of Choice – Courier Communications Major
Slide 30: Community State Bank
COMMUNITY STATE BANK Kurt A. Gibson, President & CEO Assets: $785 Million (as of 3/31/19) Population: 682,877 Des Moines/West Des Moines MSA Market Deposits: $18.7 Billion Ranked 8th with 3.2% market share and $627 Million (12/31/18) in deposits in Des Moines – West Des Moines MSA 2018 Voted Best Ba
Slide 31: SFC Bank
SFC BANK Robert C. Fulp, CEO Monte C. McNew, President Assets: $639 Million (as of 3/31/19) Population: 467,912 Springfield, MO - MSA Market Deposits: $9.9 Billion Ranked 7th with 4.4% market share and over $439 million in deposits in Springfield MSA Major Employers (Springfield) CoxHealth Systems M
Slide 32: Wealth Management
Offered through four of our five community bank subsidiaries with opportunities to expand in Des Moines and Springfield, MO markets Corporate and personal trusts Custody services Investment advisory and wealth management services Trust operations services marketed to correspondent banking clients Lo
Slide 33: Correspondent Banking and Specialty Finance Group
CORRESPONDENT BANKING AND SPECIALTY FINANCE GROUP Source: Company documents. Loan Sale Income Swaps Correspondent Banking Competitively positioned with experienced staff, software systems and processes 196 relationships in IL, IA and WI with significant opportunities in MO Average deposits exceed $4
Slide 34: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS *Nonrecurring items (after-tax) are calculated using an estimated effective tax rate of 35% for periods prior to March 31, 2018 and 21% for periods including and after March 31, 2018. NIM (TEY) 2013 2014 2015 2016 2017 2018 2018 2019 Net interest income (GAAP) $ 64.1
Slide 35: GAAP to Non-GAAP Reconciliations (cont.)
GAAP TO NON-GAAP RECONCILIATIONS (CONT.) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 35% for periods prior to March 31, 2018 and 21% for periods including and after March 31, 2018. Acquisition costs were analyzed individually for deductibility. Presented amo
Slide 36: GAAP to Non-GAAP Reconciliations (cont.)
GAAP TO NON-GAAP RECONCILIATIONS (CONT.) As of and for the Year ended December 31, As of and for the Nine Months ended September 30, ($ in millions, except per share data) 2012 2013 2014 2015 2016 2017 2017 2018 Tangible Common Equity Total equity $ 140.4 $ 147.6 $ 144.1 $ 225.9 $ 286.0 $ 353.3 $ 31
Slide 37: 3551 Seventh Street Moline, IL 61265 www.qcrh.com © Copyright 2019 QCR Holdings, Inc. All
3551 Seventh Street Moline, IL 61265 www.qcrh.com © Copyright 2019 QCR Holdings, Inc. All Rights Reserved
Slide 38: QCR Holdings, Inc.
OCR HOLDINGS, INC. ‘A Relationship Driven Financial Services Family aye. Re Nee a Ps COMMUNITY SFC BANK@-TRUST BANK pe d 3551 Seventh Street Moline, IL 61265 www.qcrh.com, © Copyright 2019 QCR Holdings, Inc. All Rights Reserved