First Quarter 2024 Highlights Net income of $26.7 million, or $1.58 per diluted share Capital Markets Revenue of $16.5 million Annualized core deposit growth, excluding brokered deposits, of 20.3% Increase in tangible book value (non-GAAP) per share of $1.12, or 10.2% annualized TCE/TA ratio (non-GAAP) improved by 19 basis points to 8.94% MOLINE, Ill., April 23, 2024 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ:QCRH) (the "Company") today announced quarterly net income of $26.7 million and diluted earnings per share ("EPS") of $1.58 for the first quarter of 2024, compared to net income of $32.9 million and diluted EPS of $1.95 for the fourth quarter of 2023. Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the first quarter of 2024 were $26.9 million and $1.59, respectively. For the fourth quarter of 2023, adjusted net income (non-GAAP) was $33.3 million and adjusted diluted EPS (non-GAAP) was $1.97. For the first quarter of 2023, net income and diluted EPS were $27.2 million and $1.60, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $28.0 million and $1.65, respectively.   For the Quarter Ended   March 31, December 31, March 31, $ in millions (except per share data) 2024 2023 2023 Net Income $ 26.7   $ 32.9   $ 27.2 Diluted EPS $ 1.58   $ 1.95   $ 1.60 Adjusted Net Income (non-GAAP)* $ 26.9   $ 33.3   $ 28.0 Adjusted Diluted EPS (non-GAAP)* $ 1.59   $ 1.97   $ 1.65                   *Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company's business. The Company believes these adjusted measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations. "We delivered strong first quarter results, highlighted by significant fee income and continued growth in both our core deposit and loan balances," said Larry J. Helling, Chief Executive Officer. "In addition, we continued to benefit from well-managed expenses, improved upon our already excellent asset quality and further strengthened our capital levels." "Our bankers grew core deposits significantly during the quarter, adding to our strong and diversified deposit franchise. As a result, our ratio of loans held for investment to deposits improved to 93.6%," added Mr. Helling. Net Interest Income of $54.7 million Net interest income for the first quarter of 2024 totaled $54.7 million, a decrease of $1.0 million from the fourth quarter of 2023. Several non-client factors drove this decrease, including the maturity of $125 million of interest rates caps on the Company's indexed deposits and the conversion of $65 million of subordinated debt to a higher floating rate, which contributed a combined $1.3 million of additional interest expense. In addition, loan discount accretion decreased by $310 thousand and there was one less day in the quarter which had an impact of approximately $600 thousand decrease in net interest income. However, the Company's net interest income driven by core activity saw growth of approximately $1.2 million during the first quarter, led by continued expansion in loan and investment yields. In the first quarter of 2024, net interest margin ("NIM") was 2.82% and NIM on a tax-equivalent yield ("TEY") basis (non-GAAP) was 3.25%, down from 2.90% and 3.32% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.24%, was also down 5 basis points from 3.29% in the fourth quarter of 2023. "Our adjusted NIM, on a tax equivalent yield basis, declined by 5 basis points from the fourth quarter of 2023 to 3.24% and was at the low end of our guidance range," said Todd A. Gipple, President and Chief Financial Officer. "The decrease resulted primarily from non-client factors which collectively contributed to 7 basis points of NIM dilution. However, we were able to partially offset this non-client impact with core NIM expansion of 2 basis points. Notably, our core NIM expansion was less than expected due to additional shifts in our deposit composition. Looking ahead, considering the forward yield curve and assuming a static funding mix, we anticipate that the expansion in loan and investment yields will generally offset any further increase in our funding costs." Strong Noninterest Income Including $16.5 Million of Capital Markets Revenue Noninterest income for the first quarter of 2024 totaled $26.9 million, down from the record results of $47.7 million in the fourth quarter of 2023. The Company generated $16.5 million of capital markets revenue in the quarter, as compared to the record $37.0 million in the prior quarter. Wealth management revenue was $4.3 million for the quarter, up 16% on an annualized basis from $4.1 million in the prior quarter. "Our capital markets revenue was $16.5 million in the first quarter as our LIHTC lending and revenue from swap fees continues to benefit from the strong demand for affordable housing," added Mr. Gipple. "Our LIHTC lending and capital markets revenue pipelines remain healthy." Well-Controlled Noninterest Expenses of $50.7 Million Noninterest expense for the first quarter of 2024 totaled $50.7 million, compared to $60.9 million for the fourth quarter of 2023 and $48.8 million for the first quarter of 2023. The linked-quarter decrease was primarily due to lower incentive-based compensation related to our record fourth quarter and full year performance. Exceptional Core Deposit Growth and Increased Liquidity During the first quarter of 2024, the Company's core deposits, which exclude brokered deposits, increased by $316.2 million, or 20.3% on an annualized basis, to $6.5 billion from $6.2 billion in the fourth quarter of 2023. "The exceptional deposit growth experienced in the first quarter reflects our commitment to expanding our market share with existing clients and establishing new relationships within the communities we serve," added Mr. Helling. Total uninsured and uncollateralized deposits remain very low at 20% of total deposits as of the end of the first quarter 2024, as compared to 18% as of the end of the fourth quarter of 2023. The Company increased its liquidity and maintained approximately $3.2 billion of available liquidity sources as of March 31, 2024, which includes $1.3 billion of immediately available liquidity. Continued Strong Loan Growth During the first quarter of 2024, the Company's total loans and leases grew $104.9 million to $6.6 billion, or 6.4% on an annualized basis. During the quarter, the Company designated $275 million of low-income housing tax credit loans as loans held for sale in anticipation of the Company's next loan securitization. "Our ongoing strong performance validates our differentiated relationship-based community banking model as well as the underlying economic resiliency across our markets," added Mr. Helling. "Given our current pipeline and the continued strength of our markets, we are maintaining our loan growth target for the full year 2024 of 8% to 10%, prior to the loan securitizations that we have planned for the year." Asset Quality Remains Excellent Nonperforming assets ("NPAs") totaled $31.3 million at the end of the first quarter, an 8.5% reduction from $34.2 million at the end of the fourth quarter of 2023. The ratio of NPAs to total assets also improved to 0.36% on March 31, 2024, compared to 0.40% on December 31, 2023. In addition, the Company's criticized loans and classified loans to total loans and leases on March 31, 2024 improved to 2.75% and 1.07%, respectively, as compared to 2.99% and 1.08%, respectively as of December 31, 2023. The Company recorded a total provision for credit losses of $3.0 million during the quarter and the allowance for credit losses to total loans held for investment was static quarter over quarter at 1.33%. Continued Strong Capital Levels As of March 31, 2024, the Company's total risk-based capital ratio was 14.30%, the common equity tier 1 ratio was 9.91% and the tangible common equity to tangible assets ratio ("TCE") (non-GAAP) was 8.94%. By comparison, these respective ratios were 14.29%, 9.67% and 8.75% as of December 31, 2023. The Company remains focused on growing capital and targeting TCE (non-GAAP) in the top quartile of the Company's peer group. The Company's tangible book value per share (non-GAAP) increased by $1.12, or 10.2% annualized, during the fourth quarter. Accumulated other comprehensive income ("AOCI") decreased $5.4 million during the quarter primarily due to a decrease in the value of the Company's available for sale securities portfolio and certain derivatives resulting from the change in long-term interest rates. However, the combination of strong earnings and a modest dividend contributed to the improvement in tangible book value per share (non-GAAP). Conference Call Details The Company will host an earnings call/webcast tomorrow, April 24, 2024, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through May 1, 2024. The replay access information is 877-344-7529 (international 412-317-0088); access code 3766140. A webcast of the teleconference can be accessed on the Company's News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended. About UsQCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank in 2022, with the combined entity operating under the Guaranty Bank name. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly owned subsidiary, m2 Equipment Finance, LLC, based in Waukesha, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of March 31, 2024, the Company had $8.6 billion in assets, $6.6 billion in loans and $6.8 billion in deposits. For additional information, please visit the Company's website at www.qcrh.com. Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of 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, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "bode", "predict," "suggest," "project", "appear," "plan," "intend," "estimate," "annualize," "may," "will," "would," "could," "should," "likely," "might," "potential," "continue," "annualized," "target," "outlook," as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economies(including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company's general business as a result of the upcoming 2024 presidential election or any changes in response to failures of other banks; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and "fintech" companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xixi) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission. Contact:Todd A. GipplePresidentChief Financial Officer(309) QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)               As of   March 31, December 31, September 30, June 30, March 31,     2024     2023     2023     2023     2023                 (dollars in thousands)             CONDENSED BALANCE SHEET                       Cash and due from banks $ 80,988   $ 97,123   $ 104,265   $ 84,084   $ 64,295   Federal funds sold and interest-bearing deposits   77,020     140,369     80,650     175,012     253,997   Securities, net of allowance for credit losses   1,031,861     1,005,528     896,394     882,888     877,446   Loans receivable held for sale (1)   275,344     2,594     278,893     295,057     140,633   Loans/leases receivable held for investment   6,372,992     6,540,822     6,327,414     6,084,263     6,049,389   Allowance for credit losses   (84,470 )   (87,200 )   (87,669 )   (85,797 )   (86,573 ) Intangibles   13,131     13,821     14,537     15,228     15,993   Goodwill   139,027     139,027     139,027     139,027     138,474   Derivatives   183,888     188,978     291,295     170,294     130,350   Other assets   509,768     497,832     495,251     466,617     452,900   Total assets $ 8,599,549   $ 8,538,894   $ 8,540,057   $ 8,226,673   $ 8,036,904               Total deposits $ 6,806,775   $ 6,514,005   $ 6,494,852   $ 6,606,720   $ 6,501,663   Total borrowings   489,633     718,295     712,126     418,368     417,480   Derivatives   211,677     214,098     320,220     195,841     150,401   Other liabilities   184,122     205,900     184,476     183,055     165,866   Total stockholders' equity   907,342     886,596     828,383     822,689     801,494   Total liabilities and stockholders' equity $ 8,599,549   $ 8,538,894   $ 8,540,057   $ 8,226,673   $ 8,036,904               ANALYSIS OF LOAN PORTFOLIO           Loan/lease mix: (2)           Commercial and industrial - revolving $ 326,129   $ 325,243   $ 299,588   $ 304,617   $ 307,612   Commercial and industrial - other   1,374,333     1,390,068     1,381,967     1,308,853     1,322,384   Commercial and industrial - other - LIHTC   96,276     91,710     105,601     93,700     97,947   Total commercial and industrial   1,796,738     1,807,021     1,787,156     1,707,170     1,727,943   Commercial real estate, owner occupied   621,069     607,365     610,618     609,717     616,922   Commercial real estate, non-owner occupied   1,055,089     1,008,892     955,552     963,814     982,716   Construction and land development   410,918     477,424     472,695     437,682     448,261   Construction and land development - LIHTC   738,609     943,101     921,359     870,084     759,924   Multi-family   296,245     284,721     282,541     280,418     229,370   Multi-family - LIHTC   1,007,321     711,422     874,439     820,376     740,500   Direct financing leases   28,089     31,164     34,401     32,937     35,373   1-4 family real estate   563,358     544,971     539,931     535,405     532,491   Consumer   130,900     127,335     127,615     121,717     116,522   Total loans/leases $ 6,648,336   $ 6,543,416   $ 6,606,307   $ 6,379,320   $ 6,190,022   Less allowance for credit losses   84,470     87,200     87,669     85,797     86,573   Net loans/leases $ 6,563,866   $ 6,456,216   $ 6,518,638   $ 6,293,523   $ 6,103,449               ANALYSIS OF SECURITIES PORTFOLIO           Securities mix:           U.S. government sponsored agency securities $ 14,442   $ 14,973   $ 16,002   $ 18,942   $ 19,320   Municipal securities   884,469     853,645     764,017     743,608     731,689   Residential mortgage-backed and related securities   56,071     59,196     57,946     60,958     63,104   Asset backed securities   14,285     15,423     16,326     17,393     17,967   Other securities   40,539     41,115     43,272     43,156     46,535   Trading securities   22,258     22,368     -     -     -   Total securities (3) $ 1,032,064   $ 1,006,720   $ 897,563   $ 884,057   $ 878,615   Less allowance for credit losses   203     1,192     1,169     1,169     1,169   Net securities $ 1,031,861   $ 1,005,528   $ 896,394   $ 882,888   $ 877,446               ANALYSIS OF DEPOSITS           Deposit mix:           Noninterest-bearing demand deposits $ 955,167   $ 1,038,689   $ 1,027,791   $ 1,101,605   $ 1,189,858   Interest-bearing demand deposits   4,714,555     4,338,390     4,416,725     4,374,847     4,033,193   Time deposits   875,491     851,950     788,692     765,801     679,946   Brokered deposits   261,562     284,976     261,644     364,467     598,666   Total deposits $ 6,806,775   $ 6,514,005   $ 6,494,852   $ 6,606,720   $ 6,501,663               ANALYSIS OF BORROWINGS           Borrowings mix:           Term FHLB advances $ 135,000   $ 135,000   $ 135,000   $ 135,000   $ 135,000   Overnight FHLB advances   70,000     300,000     295,000     -     -   Other short-term borrowings   2,700     1,500     470     1,850     1,100   Subordinated notes   233,170     233,064     232,958     232,852     232,746   Junior subordinated debentures   48,763     48,731     48,698     48,666     48,634   Total borrowings $ 489,633   $ 718,295   $ 712,126   $ 418,368   $ 417,480               (1) Loans with a fair value of $274.8 million, $278.0 million, $291.0 million and $139.2 million have been identified for securitization and are included in LHFS at March 31, 2024, September 30, 2023, June 30, 2023 and March 31, 2023 respectively. (2) Loan categories with significant LIHTC loan balances have been broken out separately. Total LIHTC balances within the loan/lease portfolio were $1.9 billion at March 31, 2024. (3) As of March 31, 2024 and December 31, 2023, trading securities consisted of retained beneficial interests acquired in conjunction with Freddie Mac securitizations completed by the Company in 2023.             QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)               For the Quarter Ended   March 31, December 31, September 30, June 30, March 31,     2024     2023     2023     2023   2023                 (dollars in thousands, except per share data)             INCOME STATEMENT           Interest income $ 115,049   $ 112,248   $ 108,568   $ 98,377 $ 94,217   Interest expense   60,350     56,512     53,313     45,172   37,407   Net interest income   54,699     55,736     55,255     53,205   56,810   Provision for credit losses   2,969     5,199     3,806     3,606   3,928   Net interest income after provision for credit losses $ 51,730   $ 50,537   $ 51,449   $ 49,599 $ 52,882                           Trust fees $ 3,199   $ 3,084   $ 2,863   $ 2,844 $ 2,906   Investment advisory and management fees   1,101     1,052     947     986   879   Deposit service fees   2,022     2,008     2,107     2,034   2,028   Gains on sales of residential real estate loans, net   382     323     476     500   312   Gains on sales of government guaranteed portions of loans, net   24     24     -     -   30   Capital markets revenue   16,457     36,956     15,596     22,490   17,023   Securities gains (losses), net   -     -     -     12   (463 ) Earnings on bank-owned life insurance   868     832     1,807     838   707   Debit card fees   1,466     1,561     1,584     1,589   1,466   Correspondent banking fees   512     465     450     356   391   Loan related fee income   836     845     800     770   651   Fair value gain (loss) on derivatives   (163 )   (582 )   (336 )   83   (427 ) Other   154     1,161     299     18   339   Total noninterest income $ 26,858   $ 47,729   $ 26,593   $ 32,520 $ 25,842                           Salaries and employee benefits $ 31,860   $ 41,059   $ 32,098   $ 31,459 $ 32,003   Occupancy and equipment expense   6,514     6,789     6,228     6,100   5,914   Professional and data processing fees   4,613     4,223     4,456     4,078   3,514   Post-acquisition compensation, transition and integration costs   -     -     -     -   207   FDIC insurance, other insurance and regulatory fees   1,945     2,115     1,721     1,927   1,374   Loan/lease expense   378     834     826     652   556   Net cost of (income from) and gains/losses on operations of other real estate   (30 )   38     3     -   (67 ) Advertising and marketing