Qcr Holdings, Inc. · NASDAQ:QCRH
Qcr — Investor Presentation (December 2018)
47 slides from Qcr's investor presentation, Dec 17, 2018
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: 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 adjustments that have the effec
Slide 3: QCR Holdings' Mission, Vision and Values
QCR Holdings will be ranked in the top quartile ROAA of peer firms by 2020 and continue to reward shareholders and employees while strengthening our communities The mission of QCR Holdings is to make our clients’ financial dreams a reality OUR MISSION OUR VISION OUR VALUES – LIVED AND EXPECTED OF AL
Slide 4: Local charters provide a competitive advantage
$4.8B Assets $3.6B Loans $3.8B Deposits $4.5B AUM Local charters provide a competitive advantage Efficient centralized Group Operations Serving attractive Midwest markets Strong credit and asset quality High touch service approach Significant expansion opportunities a relationship driven organizatio
Slide 5: Corporate Overview
Corporate Overview Assets: $4.8 Billion Loans: $3.6 Billion Deposits: $3.8 Billion Wealth Management: $4.5 Billion(1) $2.7 Billion in Trust Accounts $1.8 Billion in Brokerage and Advisor Accounts 27 Branches/Offices QCR Holdings (NASDAQ: QCRH) – Founded in 1993 Source: S&P Global Market Intelligence
Slide 6: 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 7: 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 8: Unique and Diversified Products and Services
$4.3 million in gains on the sale of government guaranteed loans and swap fee income in 2017; $4.1 million YTD 2018 Dedicated and experienced servicing and portfolio management staff with specialized expertise in government guaranteed loans Provide interest rate swaps on select commercial loans UNIQ
Slide 9: 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 10: Market Opportunities and Acquisition Strategy
MARKET OPPORTUNITIES AND ACQUISITION STRATEGY Source: S&P Global. (1) Target area includes top 25 MSAs throughout these states excluding Chicago, Minneapolis, St. Louis and Omaha MSAs. Excludes mutual institutions. Fragmented markets and ongoing consolidation creates opportunity Over 1,100 community
Slide 11: Attractive Markets of Operation
ATTRACTIVE MARKETS OF OPERATION Source: S&P Global Market Intelligence and Company documents. Deposit data as of 6/30/18. Davenport-Moline-Rock Island, IA-IL International headquarters for Deere & Company Ranked 16th in the nation for high-tech job growth Top 10 Advanced Manufacturing Community Ceda
Slide 12: Overview of the SFC Bank Transaction
Meaningful EPS Accretion: 8% accretive in the first full year Tangible book value dilution of approximately 4% TBV earnback period of 3 years(1) Capital ratios at closing in excess of well-capitalized thresholds Internal rate of return of approximately 20% Financially Attractive Closed July 1, 2018
Slide 13: 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 Board of Directors since 2001 Oversight responsibility for Community State Bank since its acquisition in 2016 Oversight responsibility for
Slide 14: History of Cedar Rapids Bank & Trust
History of Cedar Rapids Bank & Trust Larry Helling was one of four founding members in 2001 CRBT became part of QCR Holdings in 2001 as a De Novo operation Two acquisitions Community Bank & Trust – 2013 Guaranty Bank & Trust – 2017 Asset growth since inception – 24.1% CAGR Today at a Glance: $1.35 b
Slide 15: Consistent Growth and Profitability at CRBT and Community State Bank
CONSISTENT Growth and Profitability at BOTH CEDAR RAPIDS BANK & TRUST AND COMMUNITY STATE BANK Total Assets $ in millions Net Income $ in millions (1) (1) After deferred tax adjustment with change in federal tax law. 1.01% ROAA: 1.03% 0.97% 0.93% 1.42% 1.12% 1.46% $913.1 $1,307.4 $1,354.3 $600.1 $67
Slide 16: Consistent Growth and Profitability at CRBT and Community State Bank
CONSISTENT GROWTH AND PROFITABILITY AT BOTH CEDAR RAPIDS BANK & TRUST AND COMMUNITY STATE BANK Total Assets $1,979 $2,008.8 315132 r 3 $866.9 = ~ 2 EI 2012 2013, 2014 2015 2016 2017 y1p 2018 ‘Cedar Rapids Bank & Trust. =| Community State Bank ROAR: Cam > Ga Gam Ga Ga Gm> Ga Net Income $21.2 2012 201
Slide 17: A Consistent Track Record of Asset Growth
A CONSISTENT TRACK RECORD OF ASSET GROWTH Total Consolidated Assets $ in billions CAGR Since 2012: 15.5% Asset growth has been driven by a combination of organic growth and strategic acquisitions Note: 2012-2017 historical results pertain to QCR Holdings and do not include results from SFC Bank, whi
Slide 18: Loan Growth Driven by Commercial Lending
Commercial loans(1) represent approximately 84% of the loan portfolio LOAN GROWTH DRIVEN BY COMMERCIAL LENDING Includes Commercial & Industrial, Commercial RE and Direct Financing Leases. Loan composition excludes deferred loan/lease origination costs, net of fees. $ in billions(2) Organic loan grow
Slide 19: Deposit Growth Driven by Core Deposits
Core deposits(1) represent approximately 93% of total deposits DEPOSIT GROWTH DRIVEN BY CORE DEPOSITS Core deposits are defined as total deposits less brokered deposits. $ in billions CAGR Since 2012: 19.3% Note: 2012-2017 historical results pertain to QCR Holdings and do not include results from SF
Slide 20: Cost of Deposits Over Time
Historical Cost of Deposits COST OF DEPOSITS OVER TIME Source: S&P Global Market Intelligence and Company documents. Note: Deposit beta defined as the change in interest bearing deposits over the change in the Fed Funds rate. Quarterly Deposit Beta: 9.3% 23.8% 42.4% 9.2% 10.9% 43.1% 84.6% 55.1% Cumu
Slide 21: Strong Revenue Growth and Attractive Mix
Predictable and diversified fee income streams complement net interest income STRONG REVENUE GROWTH AND ATTRACTIVE MIX Excludes securities gains, bargain purchase gains, gains on sales of branches and loss on sale of OREO. $ in millions CAGR From 2012 - 2017: 13.8% (1) Key Components of Fee Income:
Slide 22: Strong & Stable Asset Quality
STRONG & STABLE ASSET QUALITY $41.6 million Classified Loans & NPAs / Assets Nonperforming Assets Composition – as of 9/30/2018 $ in millions Management remains focused on maintaining excellent asset quality and resolving problem assets Note: 2012-2017 historical results pertain to QCR Holdings and
Slide 23: Consistent Growth Has Driven Improved Profitability
CONSISTENT GROWTH HAS DRIVEN IMPROVED PROFITABILITY Core net income to common shareholders – see appendix slide 44 for reconciliation of GAAP net income to core net income. Core earnings per diluted share – see appendix slide 44 for reconciliation of GAAP EPS to core EPS. Net Income(1) $ in millions
Slide 24: Consistent Growth Has Driven Improved Profitability
CONSISTENT GROWTH HAS DRIVEN IMPROVED PROFITABILITY Net Income() Core EPS?) Sin milions $363 $264 s138 sus 2012 2018 2015 2016 2017 yp 2017 yro 2018 (2) Care ntincae to carmen shroaters- Se append side 4 ecareatn f GAAP net inca a cet ncaa {2) Care comings por ted shar” se open sige 4 fo recanaaon o
Slide 25: Executive Management Team
EXECUTIVE MANAGEMENT TEAM John R. McEvoy, JR. Executive Vice President, Chief Operations Officer & Cashier Quad City Bank and Trust Company 41 Years in Banking / Financial Services MONTE C. McNew President, SFC Bank 12 Years in Banking Dana L. Nichols Executive Vice President, Chief Credit Officer,
Slide 26: Group Operations Team
GROUP OPERATIONS TEAM Internal audit Tim Harding Loan operations Pam Goodwin Retail Kathy Nichols Risk management Shawna Graham Accounting & Treasury Elizabeth Grabin John Oakes Business transformation services Jill Lechtenberg Compliance Tonia Taylor Customer Service/ Item Processing Kathy Francque
Slide 27: Quad City Bank & Trust
QUAD CITY BANK & TRUST John H. Anderson, President & CEO Assets: $1.58 Billion (as of 9/30/18) Population: 382,013 Market Deposits: $8.2 Billion Ranked 1st with 15.61% market share and over $1,283 Million in deposits in Davenport-Moline-Rock Island MSA Finalist 2013 and 2014 – Quad Cities Best Place
Slide 28: Deposit Market Share - Quad City Bank & Trust
DEPOSIT MARKET SHARE - Quad City Bank & Trust Institution Name Offices in MSA Deposits* Market Share 1. Quad City Bank & Trust 5 1,283.8 15.61% 2. Wells Fargo & Co. 12 1,280.6 15.58% 3. Blackhawk Bancorp. Inc. 17 964.4 11.73% 4. U.S. Bancorp 11 653.3 7.95% 5. Triumph Bancorp Inc. 10 478.9 5.82% 6. O
Slide 29: Cedar Rapids Bank & Trust
CEDAR RAPIDS BANK & TRUST Larry J. Helling, President & CEO Assets: $1.35 Billion* (as of 9/30/18) Population: 273,208 Market Deposits: $5.9 Billion Ranked 1st with 16.43% market share and over $970 million in deposits in Cedar Rapids MSA 2018 Top Workplace in Iowa 2018 Best of the Corridor in Bank
Slide 30: Deposit Market Share - Cedar Rapids Bank & Trust
DEPOSIT MARKET SHARE - Cedar Rapids Bank & Trust Institution Name Offices in MSA Deposits* Market Share 1. Cedar Rapids Bank & Trust 5 970.5 16.43% 2. U.S. Bancorp 9 788.9 13.35% 3. Wells Fargo & Co. 9 693.5 11.74% 4. Neighbor Insurance Agency Inc. 9 619.4 10.48% 5. Hills Bancorp. 7 438.4 7.42% 6. B
Slide 31: Rockford Bank & Trust
ROCKFORD BANK & TRUST Thomas D. Budd, President & CEO Assets: $484 Million (as of 9/30/18) Population: 336,116 Market Deposits: $6.2 Billion Ranked 8th with 6.1% market share and $376 Million in deposits in Rockford MSA Major Employers Rockford Public School District Swedish American Health Systems
Slide 32: Deposit Market Share - Rockford Bank & Trust
DEPOSIT MARKET SHARE – Rockford Bank & Trust Institution Name Offices in MSA Deposits* Market Share 1. Midland States Bancorp Inc.** 19 1,087.5 17.68% 2. JPMorgan Chase & Co. 6 702.7 11.42% 3. Associated Banc-Corp 6 669.1 10.88% 4. Bank of Montreal 11 595.4 9.68% 5. Heartland Financial USA Inc. 4 48
Slide 33: Community Bank & Trust
COMMUNITY BANK & TRUST Stacey J. Bentley, President & CEO Deposits: $110 Million (as of 6/30/18) Population: 169,983 Market Deposits: $3.6 Billion Ranked 11th with 3.1% market share and over $110 Million in deposits in Waterloo-Cedar Falls MSA 2016 Employer Choice Award – Courier Communications Majo
Slide 34: Deposit Market Share - Community Bank & Trust
DEPOSIT MARKET SHARE – Community Bank & Trust * Millions of dollars, as of 6/30/18, Waterloo-Cedar Falls-IA, MSA Source: FDIC deposit market share data as provided by S&P Global. Deposit data is as of 6/30/18. Institution Name Offices in MSA Deposits* Market Share 1. FSB Financial Services Inc. 8 70
Slide 35: Deposit Market Share - Community State Bank
DEPOSIT MARKET SHARE – Community State Bank * Millions of dollars, as of 6/30/18, Des Moines/West Des Moines-IA, MSA Source: FDIC deposit market share data as provided by S&P Global. Deposit data is as of 6/30/18. Institution Name Offices in MSA Deposits* Market Share 1. Wells Fargo & Co. 18 2,937.4
Slide 36: SFC Bank
SFC BANK Robert C. Fulp, CEO Monte C. McNew, President Assets: $624 Million (as of 9/30/18) 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 37: Deposit Market Share - SFC Bank
DEPOSIT MARKET SHARE – SFC Bank * Millions of dollars, as of 6/30/18, Springfield, MO - MSA Source: FDIC deposit market share data as provided by S&P Global. Deposit data is as of 6/30/18. Institution Name Offices in MSA Deposits* Market Share 1. Great Southern Bancorp Inc. 20 1,337.0 13.48% 2. Comm
Slide 38: m2 Lease Funds, LLC Overview
Lease Asset Generation m2 LEASE FUNDS, LLC OVERVIEW Source: Company documents. * Leases Outstanding includes Equipment Finance Agreements (EFAs). National equipment leasing platform with lease specialists in eight states Diversified portfolio of over 20 asset classes including commercial vehicles, c
Slide 39: Historical Income Summary
HISTORICAL INCOME SUMMARY Non-interest expense includes several one-time expenses - most notably, $5.4 million and $2.4 million, and $2.5 million of acquisition and post-acquisition compensation, transition and integration costs for 2017 and 2016, and the nine months ended September 30, 2018 respect
Slide 40: Historical Balance Sheet Summary
Historical Balance Sheet Summary ($ in millions) Years Ended December 31, Nine Months Ended September 30, 2012 2013 2014 2015 2016 2017 2017 2018 Total assets $ 2,093.7 $ 2,395.0 $ 2,525.0 $ 2,593.2 $ 3,301.9 $ 3,982.7 $ 3,550.5 $ 4,792.7 Total loans/leases 1,287.4 1,460.3 1,630.0 1,798.0 2,405.5 2,
Slide 41: Historical Key Performance Ratios
Historical Key Performance Ratios See GAAP to Non-GAAP reconciliations on appendix slide 44. No adjustments to GAAP net income were made in 2012 and 2013. Core ROAA reflect GAAP numbers for those years. TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations. See GAAP to Non-GAAP reconcilia
Slide 42: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS No adjustments to GAAP net income were made in 2012 and 2013. Core net income, EPS and ROAA reflect GAAP numbers for those years. *Nonrecurring items (after-tax) are calculated using an estimated effective tax rate of 35% for periods prior to March 31, 2018 and 21% f
Slide 43: GAAP to Non-GAAP Reconciliations (Cont.)
GAAP TO NON-GAAP RECONCILIATIONS (CONT.) ($ in millions) For the Years Ended December 31, For the Nine Months Ended September 30, NIM (TEY) 2012 2013 2014 2015 2016 2017 2017 2018 Net interest income (GAAP) $ 57.6 $ 64.1 $ 69.1 $ 76.3 $ 94.5 $ 116.1 $ 84.3 $ 102.8 Plus: Tax equivalent adjustment 1.9
Slide 44: 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
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Slide 46: www.qcrh.com © Copyright 2018 QCR Holdings All Rights Reserved
www.qcrh.com © Copyright 2018 QCR Holdings All Rights Reserved
Slide 47: QCR Holdings, Inc.
QCR HOLDINGS, INC. 3551 Seventh Street Moline, IL 61265 www.qcrh.com © Copyright 2018 QCR Holdings All Rights Reserved