Qcr Holdings, Inc. · NASDAQ:QCRH
Qcr — Investor Presentation (May 2018)
46 slides from Qcr's investor presentation, May 15, 2018
Slide 1: QCR Holdings, Inc. May 11, 2018
OCR HOLDINGS, INC. May 11, 2018
Slide 2: Forward-looking statements
2 This presentation 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, objectives, future performance and business of QC R Holdings, Inc. (“QCR Holdings” or the “Co
Slide 3: Additional information about the proposed transaction
3 QCR Holdings filed a registration statement on Form S - 4 with the SEC in connection with the proposed transaction on May 3, 2018. The registration statement includes a proxy statement of Springfield Bancshares that also constitutes a prospectus of QCR Hol din gs, which will be sent to the stockho
Slide 4: Non-GAAP financial measures
4 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 t
Slide 5: QCR Holdings' Mission, Vision and Values
5 QCRH 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, Inc. is to make our clients’ financial dreams a reality OUR MISSION OUR VISION OUR VALUES – LIVED AND EXPECTED OF AL
Slide 6: Corporate Overview
6 a relationship driven organization. ® CORPORATE OVERVIEW NASDAQ - QCRH As of March 31, 2018 Russell 2000® Index Member Since June 30, 2015 $4.0 Billion in Assets $3.1 Billion in Loans $3.3 Billion in Deposits 26 Facilities Quad City Bank & Trust (5) Cedar Rapids Bank & Trust (5) * Rockford Bank &
Slide 7: History of QCR Holdings, Inc.
7 a relationship driven organization. ® HISTORY OF QCR HOLDINGS, INC. Source: Company documents. Subsidiary assets as of 6/30/17. 2005 - QCR Holdings founded by Mike Bauer and Doug Hultquist - $14 million IPO - Quad City Bank & Trust (De Novo) – Currently $1. 53 billion in a ssets - Cedar Rapids Ban
Slide 8: Investment Rationale
8 INVESTMENT RATIONALE • $4.0 billion asset bank holding company with critical mass in attractive & target rich markets in IA, IL, WI, & MO - Number 2 bank with 14% market share in the Quad Cities, Iowa/Illinois, Number 2 in Cedar Rapids, Iowa with 15% share - Quad Cities is the International Headqu
Slide 9: The Strategic Value of Our Separate Charters
9 • 4 distinct (yet similar) operating charters – able to customize solutions by market • Managed by local veteran bankers, governed by local Boards of Directors, local decisions, local solutions, enhanced market specific knowledge • 4 charters supported by QCRH Group Operations team that delivers o
Slide 10: Strategies to Continue to Drive Shareholder Value
10 a relationship driven organization. ® STRATEGIES TO CONTINUE TO DRIVE SHAREHOLDER VALUE • Continue strong organic loan and lease growth to maintain loans and leases to total assets ratio in the range of 73 - 78% (75.87% as of 3/31/18) • Continued focus on growing core deposits to maintain relianc
Slide 11: Unique Products and Services
11 UNIQUE PRODUCTS AND SERVICES CORRESPONDENT BANKING • Competitively positioned with veteran staff, software, systems and processes • More than 192 relationships with average $220.9 million in non - interest bearing deposits and average $206.1 million in interest - bearing deposits in first quarter
Slide 12: Market Overview
12 $1,206 $878 $347 $124 $555 $7,274 $4,937 $5,560 $3,307 $16,999 $0 $6,000 $12,000 $18,000 Quad Cities, IA-IL Cedar Rapids, IA Rockford, IL Waterloo Cedar Falls, IA Des Moines/Ankeny, IA QCR Holdings Deposits Competitors Deposits QCR HOLDINGS, INC. - MARKET OVERVIEW Source: SNL Financial. Deposit d
Slide 13: Top MSAs - Iowa, Illinois, Wisconsin, Missouri
13 a relationship driven organization. ® TOP 25 MSAs - Iowa, Illinois, Wisconsin, Missouri Source: SNL Financial, Deposit data as of June 30, 2017. Growth CAGR figures based on 2017 - 2022 projected figures Analysis current as of 5/7/2018 Total Population Chicago-Naperville-Elgin, IL-IN-WI $394,864
Slide 14: Capitalizing on Opportunities in Our Markets
14 “CAPITALIZING” ON OPPORTUNITIES IN OUR MARKETS Distribution of Institutions in Targeted Markets (1) Source: SNL Financial. (1) Target area includes top 25 MSAs listed on previous slide excluding Chicago, Minneapolis, St. Louis and Omaha MSAs. Excludes mutual institutions. • Leverage capital stren
Slide 15: Springfield Bancshares, Inc. Transaction Overview
Springfield Bancshares, Inc. Transaction Overview Announced April 18, 2018.
Slide 16: Springfield (SFC) Transaction Summary
16 • Meaningful EPS Accretion: 8.0% accretive in the first full year • Tangible book value dilution of ~4% • TBV earnback period of 3.0 years (1) • Capital ratios at closing in excess of well - capitalized thresholds • Internal rate of return of approximately 20% Financially Attractive • Expansion i
Slide 17: SFC Assumptions & Attractive Impacts
17 SFC ASSUMPTIONS & ATTRACTIVE IMPACTS Assumptions Impacts Cost Savings ► Estimated $1.4 million in 2018, $1.6 million in 2019 ► Approximately 16% of Springfield’s non - interest expense Participations ► Approximately $73.5 million of loan participations expected to be brought onto balance sheet as
Slide 18: Loan & Deposit Composition
18 Residential R.E. 9% Non - Owner Occ. CRE 26% Owner Occ. CRE 11% Commercial & Industrial 38% Consumer 3% Direct Financing Leases 5% Non - Interest Bearing Demand 23% Interest Bearing Demand 54% Time 17% Brokered 6% Non - Interest Bearing Demand 18% Interest Bearing Demand 48% Time 31% Brokered 3%
Slide 19: Fee Income Expansion Opportunities
19 4.7% 66.0% 14.8% 14.5% Service Charges Gain on Sale of Loans Participation Servicing Fees Other Noninterest Income FEE INCOME EXPANSION OPPORTUNITIES Source: S&P Global Market Intelligence and Company documents. By Product 2017 ($mm): $30.5 % of Average Assets: 0.86% 2017 ($mm): $1.9 % of Average
Slide 20: Springfield Bancshares, Inc. Overview
20 SPRINGFIELD BANCSHARES, INC. OVERVIEW Overview Springfield, MO Financial Highlights (3/31/18) • Established in 2008, Springfield Bancshares, Inc. is a leading commercial bank in the Springfield, MO MSA − More than $560M in assets and nearly $450M in deposits − More than $200M in loan participatio
Slide 21: Springfield, MO Is a Growing Center of Commerce
21 SPRINGFIELD, MO IS A GROWING CENTER OF COMMERCE Metro Area RankEmployer Employees 1 CoxHealth Systems 11,000 2 Mercy Hospital Springfield 10,682 3 Springfield Public School 3,921 4 Walmart & Sam’s Club 3,307 5 Missouri State University 2,852 6 United States Government 2,429 7 Bass Pro Shops | Tra
Slide 22: Financial Highlights
OCR HOLDINGS, INC. Financial Highlights
Slide 23: Total Consolidated Assets
23 a relationship driven organization. ® $0 $1,000 $2,000 $3,000 $4,000 $5,000 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 YTD 3/18 TOTAL CONSOLIDATED ASSETS Compound Annual Gr
Slide 24: Income Statement Results & Key Earnings Metrics
24 a relationship driven organization. ® INCOME STATEMENT RESULTS & KEY EARNINGS METRICS Reported 12/31/14 Reported 12/31/15 Core 12/31/15 Reported 12/31/16 Core 12/31/16 Reported 12/31/17 Core 12/31/17 YTD Reported 3/31/18 YTD Core 3/31/18 Net Income Available to Common $13.9 $16.9 $20.9 $27.7 $29.
Slide 25: Strong Commercial Loan Growth
25 Loan Growth Trends (1) STRONG COMMERCIAL LOAN GROWTH Source: Company documents. (1) Loan composition excludes deferred loan/lease origination costs, net of fees. (2) Includes Commercial & Industrial, Commercial RE and Direct Financing Leases. • 11.8% CAGR organic loan growth from 2013 to 2017 (ex
Slide 26: m2 Lease Funds LLC Overview
26 a relationship driven organization. ® Lease Asset Generation m2 LEASE FUNDS LLC OVERVIEW Source: Company documents. * Leases Outstanding includes Equipment Finance Agreements (EFAs) • National equipment leasing platform • Focus includes Computer systems; photocopy systems; fire trucks; specialize
Slide 27: Asset Quality Overview
27 a relationship driven organization. ® 41.74% 41.12% 17.01% 0.13% Other Real Estate Owned & Repossessed Assets - 41.74% Nonaccrual Loans/Leases - 41.12% Troubled Debt Restructures - Accruing - 17.01% Accruing Loans/Leases 90+ Days PD - 0.13% ASSET QUALITY OVERVIEW Management continues to focus on
Slide 28: Evolution of Funding Base
28 a relationship driven organization. ® Average Funding Base - 2010 EVOLUTION OF FUNDING BASE Source: Company documents. Average Funding Base – 2017 2010 Cost of Funds: 1.79% 2010 Cost of Deposits: 1.13% 33.4% 13.7% 25.3% 27.6% Borrowings 33.4% Noninterest Bearing Deposits 13.7% Interest Bearing De
Slide 29: Attractive Revenue Mix & Growth Trend
29 a relationship driven organization. ® Continued Strong Top Line Revenue Growth Trends ATTRACTIVE REVENUE MIX & GROWTH TREND Source: Company documents. (1) Excludes securities gains, bargain purchase gains, gains on sales of branches and loss on sale of OREO. Strong fee income streams provide stab
Slide 30: Improving Returns for Shareholders
30 a relationship driven organization. ® Net Income to Common Shareholders IMPROVING RETURNS FOR SHAREHOLDERS Source: Company documents. Approximately 46.6% Net Income to Common CAGR From 2011 – 2017 $4.4 $9.1 $11.8 $13.9 $16.9 $27.7 $35.5 $0.0 $10.0 $20.0 $30.0 $40.0 2011 2012 2013 2014 2015 2016 2
Slide 31: Non-GAAP Reconciliations
31 a relationship driven organization. ® Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share NON - GAAP RECONCILIATIONS Source: Company documents.. As of and for the Year ended December 31, ($ in thousands, except per share data) 2011 2012 2013 2014 2015 2016 2017 Tangible Co
Slide 32: Summary of Competitive Advantages
32 a relationship driven organization. ® SUMMARY OF COMPETITIVE ADVANTAGES Critical mass in attractive and target rich markets in Iowa and Illinois 4 charter model allows subsidiary banks to customize solutions by market Differentiated product offering includes correspondent banking, wealth manageme
Slide 33: Appendix
OCR HOLDINGS, INC. Appendix
Slide 34: Executive Management Team
34 a relationship driven organization. ® EXECUTIVE MANAGEMENT TEAM JOHN R. M c EVOY , JR. Executive Vice President, Chief Operations Officer & Cashier Quad City Bank and Trust Company 41 Years in Banking / Financial Services RONALD R. NAGEL Chief Executive Officer Community State Bank 41 Years in Ba
Slide 35: Group Operations Team
35 a relationship driven organization. ® GROUP OPERATIONS TEAM • Accounting and Treasury – Beth Grabin and John Oakes • Compliance – Tonia Taylor • Customer Service/Item Processing – Kathy Francque • Deposit Operations – Todd Kerska, John Rodriguez, Beth Easterla • Funds Management – John McEvoy • H
Slide 36: Quad City Bank & Trust
36 QUAD CITY BANK & TRUST John H. Anderson, President & CEO Assets: $1.53 Billion (as of 3 /31/18 ) Population: 381,723 Market Deposits: $8.5 Billion Ranked 2 nd with 14.22% market share and over $1,205 Million in deposits in Davenport - Moline - Rock Island MSA Finalist 2013 and 2014 – Quad Cities
Slide 37: Cedar Rapids Bank & Trust
37 CEDAR RAPIDS BANK & TRUST Larry J. Helling , President & CEO Assets: $1.33 Billion* (as of 3/31/18 ) Population: 270,363 Market Deposits: $5.8 Billion Ranked 2 nd with 15.10% market share and over $878 million in deposits in Cedar Rapids MSA 2014 & 2015 Finalist – Coolest Place to Work in Cedar R
Slide 38: Rockford Bank & Trust
38 ROCKFORD BANK & TRUST Thomas D. Budd, President & CEO Assets: $468 Million (as of 3 /31/18 ) Population: 337,006 Market Deposits: $5.9 Billion Ranked 7 th with 5.9% market share and $347 Million in deposits in Rockford MSA Major Employers Rockford Public School District Swedish American Health Sy
Slide 39: Community Bank & Trust
39 COMMUNITY BANK & TRUST Stacey J. Bentley, President & CEO Deposits: $124 Million (as of 6/30/17 ) Population: 170,094 Market Deposits: $3.3 Billion Ranked 11 th with 3.6% market share and over $124 Million in deposits in Waterloo - Cedar Falls MSA 2016 Employer Choice Award – Courier Communicatio
Slide 40: Community State Bank
40 COMMUNITY STATE BANK Ronald M. Nagel, CEO Kurt A. Gibson, President Assets: $697 Million (as of 3 /31/18 ) Population: 651,599 Des Moines/West Des Moines MSA Market Deposits: $17.6 Billion Ranked 8 th with 3.61% market share and over $554.8 Million in deposits in Des Moines – West Des Moines MSA
Slide 41: Deposit Market Share - Quad City Bank & Trust
41 a relationship driven organization. ® DEPOSIT MARKET SHARE - Quad City Bank & Trust Institution Name Offices in MSA Deposits * Market Share 1. Wells Fargo Bank 15 $ 1,361.5 16.06 % 2. Quad City Bank & Trust 5 1,205.5 14.22% 3. Blackhawk Bank & Trust 17 946.5 11.16 % 4. U.S. Bank 11 829.3 9.78 % 5
Slide 42: Deposit Market Share - Cedar Rapids Bank & Trust
42 a relationship driven organization. ® DEPOSIT MARKET SHARE - Cedar Rapids Bank & Trust Institution Name Offices in MSA Deposits * Market Share 1. U.S. Bank 10 $ 907.1 15.60 % 2. Cedar Rapids Bank & Trust ** 5 878.0 15.10 % 3. Wells Fargo Bank 10 665.7 11.45 % 4. Farmers State Bank 8 602.8 10.37 %
Slide 43: Deposit Market Share - Rockford Bank & Trust
43 a relationship driven organization. ® DEPOSIT MARKET SHARE – Rockford Bank & Trust Institution Name Offices in MSA Deposits * Market Share 1. Alpine Bank & Trust 18 $ 1,116.3 18.90 % 2. JP Morgan Chase 6 686.3 11.62 % 3. Associated Bank 6 600.0 10.15 % 4. BMO Harris 10 574.7 9.73 % 5. Illinois Ba
Slide 44: Deposit Market Share - Community Bank & Trust
44 a relationship driven organization. ® DEPOSIT MARKET SHARE – Community Bank & Trust Institution Name Offices in MSA Deposits * Market Share 1. Farmers State Bank 8 $ 644.8 18.79 % 2. U.S. Bank 6 391.1 11.40 % 3. Lincoln Savings Bank 5 334.9 9.76 % 4. First National Bank 6 306.6 8.94 % 5. Wells Fa
Slide 45: Deposit Market Share - Community State Bank
45 a relationship driven organization. ® DEPOSIT MARKET SHARE – Community State Bank Institution Name Offices in MSA Deposits * Market Share 1. Wells Fargo Bank 19 $ 3,116.3 17.75 % 2. Bankers Trust 19 2,492.6 14.19 % 3. West Bank 8 1,311.5 7.47 % 4. U.S. Bank 15 1,098.3 6.25 % 5. Bank of America 4
Slide 46: QCR Holdings contact details
3551 7 th Street Moline, Illinois 61265 www.qcrh.com