Qcr Holdings, Inc. · NASDAQ:QCRH
Qcr — Investor Presentation (May 2016)
39 slides from Qcr's investor presentation, May 10, 2016
Slide 1: QCR Holdings, Inc. May 2016
QCR HOLDINGS, INC. May 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, In: Founded in 1993 Headquartered in Mo NASDAQ - QCRH Russell 2000° Inclex Member as of June 30, 2015 Minteapolis ‘$2.6 BILLION IN ASSETS $1.9 BILLION IN LOANS $2.0 BILLION IN DEPOSITS. 13 FACILITIES a @ Quad City Bank & Trust (6) 9 9) = : f © Cedar Rapids Bank & Tru
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 + $2.6B 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 fo
Slide 9: Unique Products and Services
UNIQUE PRODUCTS AND SERVICES Correspondent Banking Wealth Management + Competitively positioned with veteran staff, software, + $1.78B in Trust (and related) accounts and $697M in systems and processes Brokerage (and related) accounts as of 3/31/16 + More than 173 relationships to date with an avera
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 coer, 0 seen awe ass = jas ‘ao parton pe on ve is foeran ek man er ee om Het i ‘eon ome ta 1 peed is ‘ane x cenit os ees is ‘aa ee eee) oa fen i tee a 7) om sae a ne as ee er) aes a at Sm ane ont ae = = = et = = a ue rr re on fee ta ps % cme oa tae tr doer ™ mas ts ne
Slide 13: 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 $0 Sees eee eee ee eee eee ee ee eee RFR REREER ER ERE ERB g 3 S10: ampuy cats Dla Wma a relationship _—
Slide 15: Income Statement Results & Key Earnings Metrics
INCOME STATEMENT RESULTS & KEY EARNINGS METRICS Repoted _—Repoted —Reparted Reported Reported core Reported payn way EA BAYM— BIAs esas Net Income Available to Common S44 $9.1 $118 $13.9 $16.9 $20.9 $6.4 NIM (%) 3.08% 3.14% 303% 3.15% 337% «3H 8.59% ROAA (%) 051% 0.62% 064% «0.61% =m =H (0.88% Effic
Slide 16: Strong Commercial Loan Growth
STRONG COMMERCIAL LOAN GROWTH + C&l and Direct Financing Lease balances grew approximately 50% and 35%, respectively from 2013 to 2015, $2,000 + 23% overall loan growth from 2013 to 2015 represented all organic growth $1486 $1,500 + Commercial lending? represents more than 86% of the portfolio $1,00
Slide 17: m2 Lease Funds LLC Overview
m2 LEASE FUNDS LLC OVERVIEW + National equipment leasing platform + Focus includes commercial equipment! building and construction machinery and assets, medical equipment, office equipment (computer hardware and software), and vehicles classified as heavy equipment + High yield portfolio; average gr
Slide 18: Asset Quality Overview
ASSET QUALITY OVERVIEW Classified Loans ($M) & NPAs / Assets Nonperforming Assets Composition — 2016Q1 $70 25% 2.06% 025% $60 2.0% (Other Rea Estate Owned & Rep. 141% Asset 35.95% 128% at = ag oot 3596% ‘tionaccralLoans/teases 57.60% $40 0.74% 072% | 5.946 $18.7M ‘Troubled DebeRestructras Accruing-6
Slide 19: Evolution of Funding Base
EVOLUTION OF FUNDING BASE Average Funding Base - 2010 Average Funding Base - 2016 Q1 oorronings 334% Mborowings 151% mroniteres easing ornare eating Deposts ta 7% Depostszeax $1,684M $2,331M Interest Basing Demand Interest Bering Demand Deponte 253% apes 39.7 ‘rime Dupont 27.6% ‘Time Deposts 17% ‘So
Slide 20: Attractive Revenue Mix & Growth Trend
ATTRACTIVE REVENUE MIX & GROWTH TREND ued Strong Top ine Revenue Growth Trends ($M) CAGR From 2010 - 2015: 8.47% xe Strong fee income streams provide stability and complement to spread revenue Key Differentiators: + Wealth Management ($2.58 in AUM) + Correspondent banking (173+ relationships) + SBA/
Slide 21: Improving Returns for Common Shareholders
IMPROVING RETURNS FOR COMMON SHAREHOLDERS Net Income to Common Shareholders ($M) Appr ~39.99% Net to Cc CAGR From 2011 — 2015 $18.0 $12.0 $0.0 2011 2012 2013 2014 2015 Source: Company decuments. Dota in millons
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% (71% as of 3/31/16) + Continued reductions in wholesale funding to less than 15% of assets (30% as of 12/31/14), now 16.9% as of 3/31/16 + 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 + 3-charter model allows subsidiary banks to customize solutions by market + Differentiated product offering includes correspondent banking, wealth management, leasing and SBA/USDA lending + Strong asset qu
Slide 24: Holdings, Inc.
HOLDINGS, INC. arelationship driven organization®
Slide 25: History of QCR Holdings, Inc.
HISTORY OF QCR HOLDINGS, INC. 1993 1994 2015 Founded by Mike Bauer and Doug Hultquist - $14 Mion IPO Quad City Bank & Trust (De Novo) — Currently $1.36 Billion in Assets (Quad City Bancard Formed Cedar Rapids Bank & Trust (De Novo) ~ Currently $886 Million in Assets (includes Community Bank & Trust
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 Chi
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: $1.36 Billion (as of 3/31/16) Population: 383,699 Market Deposits: $7.5 Billion Rariod 2" wth 12.3% market share and over $830 Milena <eposits in Davenport Moline-Rock island MSA, Finalist 2013 and 2014 - Quad Cites Best Place to Werk
Slide 29: Cedar Rapids Bank & Trust
CEDAR RAPIDS BANK & TRUST Larry J. Helling, President & CEO Assets: $886 Million* (as of 3/31/16) Population: 265,782 Market Deposits: $5.5 Billion Top 4 bank wih 9.68% market share and over $530 milion in deposits in Cedar Rapids MSA, 2014 & 2015 Finalist Coolest Place to Workin Cedar Rapids Top 3-
Slide 30: Rockford Bank & Trust
ROCKFORD BANK & TRUST ROCKFORD. BANK & TRUST Thomas D. Budd, President & CEO Assets: $367 Million (as of 3/31/16) Population: 339,609 Market Deposits: $5.6 Billion Ranked 3 with 4.6% market shar Geposts in Rocktord MSA, dover $260 Million in Major Employers Rockford Public School District ‘Swedish A
Slide 31: Community Bank & Trust
COMMUNITY BANK & TRUST (.gommunrry SS St Stacey J. Bentley, President & CEO Deposits: $125 Million (as of 3/31/16) Population: 170,883 Market Deposits: $3.1 Billion Ranked # with 3 896 market share and over $120 Millon in \Weteroo-Cedar Falls MSA Major Employers John Deere HyVee Foods Store ‘Wheaton
Slide 32: Group Operations
Group Operations + Accounting — John Oakes and Beth Grabin + 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 — Michael Wyffels a
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share Asotana ter he 7 ‘wena, (5 inthousonds, except per share dete) 2010 zou aoe 2013 208 2015 2016 Tangible Common Equity Total equity $ sas $ S$ tsoase $7577 -§«—maor9 §—225886 $85,143 ec: Preferred Equ
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 ee ee ee a ‘ Pee = re e ie =a ae QCRH 3/31/16 8.74% 121.9% [ekr Fngsaton ov pate ns stagese spony epestans aca oon, missy St spina wih not cat muy dl oath,
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: QCR Holdings, Inc. contact
not INC. 3551 7" Street Moline, Illinois 61265 www.gerh.com