QCR Holdings, Inc. Announces Record Net Income of $32.9 Million for the Fourth Quarter and Record Net Income of $113.6 Million for the Full Year 2023
Fourth Quarter Highlights
Record fourth quarter net income of $32.9 million, or $1.95 per diluted share
Record Capital Markets Revenue of $37.0 million
Improved NIM, which increased by 1 basis point from the prior quarter
Significant increase in tangible book value (non-GAAP) per share of $3.48, or 35% annualized
TCE/TA ratio (non-GAAP) improved by 70 basis points to 8.75%
Completion of first two securitizations of $265 million of low-income housing tax credit loans
Full Year Highlights
Record annual net income of $113.6 million, or $6.73 per diluted share
Record adjusted net income (non-GAAP) of $115.1 million, or $6.82 per diluted share
Record Capital Markets Revenue of $92.1 million, an increase of $50.8 million, or 123%
Loan and lease growth of 11% prior to loan securitizations
Deposit growth of 9%
Tangible book value (non-GAAP) per share increased $6.99, or 19%
Increased TCE/TA ratio (non-GAAP) by 82 basis points to 8.75%
MOLINE, Ill., Jan. 23, 2024 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the "Company") today announced record quarterly net income of $32.9 million and diluted earnings per share ("EPS") of $1.95 for the fourth quarter of 2023, compared to net income of $25.1 million and diluted EPS of $1.49 for the third quarter of 2023. For the full year, the Company reported net income of $113.6 million, or $6.73 per diluted share.
Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the fourth quarter of 2023 were $33.3 million and $1.97, respectively. For the third quarter of 2023, adjusted net income (non-GAAP) was $25.4 million and adjusted diluted EPS (non-GAAP) was $1.51. For the fourth quarter of 2022, net income and diluted EPS were $30.9 million and $1.81, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $31.1 million and $1.83, respectively.
For the Quarter Ended
December 31,
September 30,
December 31,
$ in millions (except per share data)
2023
2023
2022
Net Income
$
32.9
$
25.1
$
30.9
Diluted EPS
$
1.95
$
1.49
$
1.81
Adjusted Net Income (non-GAAP)*
$
33.3
$
25.4
$
31.1
Adjusted Diluted EPS (non-GAAP)*
$
1.97
$
1.51
$
1.83
*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 measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.
"We are pleased to deliver record fourth quarter and full year results highlighted by significant fee income and robust loan growth," said Larry J. Helling, Chief Executive Officer. "In addition, we completed our first two securitizations of low-income housing tax credit loans, grew core deposits by 6%, and maintained our strong asset quality."
"We enter 2024 with a solid deposit and loan pipeline, a strong balance sheet, excellent credit quality and well-managed expenses. We remain focused on building our franchise through relationship banking and executing on our differentiated business model, all with the view of delivering attractive returns to our shareholders," said Mr. Helling.
Net Interest Income Grew to $55.7 Million and NIM Expanded
Net interest income for the fourth quarter of 2023 totaled $55.7 million, an increase of $0.5 million from the third quarter. Acquisition-related net accretion totaled $673 thousand for the fourth quarter of 2023, compared to $539 thousand in the third quarter. Net interest income was $65.2 million for the fourth quarter of 2022.
In the fourth quarter of 2023, net interest margin ("NIM") was 2.90% and NIM on a tax-equivalent yield ("TEY") basis (non-GAAP) was 3.32%, up from 2.89% and 3.31% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.29%, was also up from 3.28% in the third quarter.
"Our adjusted NIM on a tax equivalent yield basis improved by one basis point on a linked-quarter basis to 3.29% and was above the midpoint of our guidance range," said Todd A. Gipple, President and Chief Financial Officer. "During the quarter, our loan and investment yields continued to expand and we experienced a more modest increase in our cost of funds with a slowing in the shift of the composition of our deposits from noninterest and lower beta deposits to higher beta deposits. We are pleased to see continued stabilization in our deposit mix and the expansion of our NIM."
Noninterest Income of $47.7 Million, Including a Record $37.0 Million of Capital Markets Revenue
Noninterest income for the fourth quarter of 2023 totaled $47.7 million, up significantly from $26.6 million for the third quarter of 2023. The Company generated a record $37.0 million of capital markets revenue in the quarter, up from $15.6 million in the prior quarter. Wealth management revenue was $4.1 million for the quarter, up from $3.8 million in the prior quarter.
"Capital markets revenue surged late in the fourth quarter and was $37 million for the quarter, achieving a total of $92 million to close out the year," added Mr. Gipple. "Our clients took advantage of the significant decrease in long-term interest rates late in the quarter to lock-in attractive long-term financing terms. Capital markets revenue from swap fees continues to benefit from the strong demand for affordable housing. Even with the strong results in the fourth quarter, our LIHTC lending and capital markets revenue pipelines remain healthy. As a result, we are increasing our capital markets revenue guidance for the next twelve months to be in a range of $50 to $60 million."
Noninterest Expenses of $60.9 Million Impacted by Strong Capital Markets Outperformance
Noninterest expense for the fourth quarter of 2023 totaled $60.9 million, compared to $51.1 million for the third quarter of 2023 and $49.7 million for the fourth quarter of 2022. The linked-quarter increase was primarily due to higher incentive-based compensation related to our record fourth quarter and full year performance.
Continued Strong Loan Growth
During the fourth quarter of 2023, the Company's loans and leases held for investment grew $213.4 million to a total of $6.5 billion, or 13% on an annualized basis. For the full year, total loans and leases grew $669.5 million, or 11%, when excluding the $265 million in loan securitizations that we completed in the fourth quarter.
"Our strong performance is a testament to 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 ongoing strength of our markets, we are targeting loan growth for the full year 2024 between 8% and 10%, prior to the loan securitizations that we have planned for 2024."
Asset Quality Remains Excellent
Nonperforming assets ("NPAs") totaled $34.2 million at the end of the fourth quarter, a slight improvement from $34.7 million at the end of the third quarter. The ratio of NPAs to total assets improved to 0.40% on December 31, 2023, compared to 0.41% on September 30, 2023. In addition, the Company's criticized loans and classified loans to total loans and leases on December 31, 2023 also improved to 2.93% and 1.03%, respectively, as compared to 2.98% and 1.05% as of September 30, 2023.
The Company recorded a total provision for credit losses of $5.2 million during the quarter which included $2.5 million of provision for loans and leases and $2.7 million of provision for unfunded commitments. The provision for credit losses on unfunded commitments was driven by the surge in commitments in our LIHTC lending business. As of December 31, 2023, the allowance for credit losses to total loans/leases held for investment was 1.33%.
Stable Core Deposits and Increased Liquidity
During the fourth quarter of 2023, the Company's core deposits, which exclude brokered deposits, decreased slightly by $4.2 million in the fourth quarter, but grew by $346.0 million, or 6%, for the full year. Our Correspondent Bank deposit portfolio typically falls temporarily in the fourth quarter as our clients position their balance sheets at year-end. Total Correspondent Bank deposits declined 9% at quarter-end and have since rebounded, increasing $188 million, or 35%, by mid-January.
Total uninsured and uncollateralized deposits remain very low at 18% of total deposits as of the end of the fourth quarter, as compared to 20% as of the end of the third quarter. The Company maintained approximately $3.1 billion of available liquidity sources at year-end, which includes $1.2 billion of immediately available liquidity.
Continued Strong Capital Levels
As of December 31, 2023, the Company's total risk-based capital ratio was 14.15%, the common equity tier 1 ratio was 9.57% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.75%. By comparison, these respective ratios were 14.48%, 9.68% and 8.05% as of September 30, 2023. The Company remains focused on growing capital and targeting capital levels in the top quartile of the Company's peer group.
The Company's tangible book value per share (non-GAAP) increased by $3.48, or 35% annualized during the fourth quarter. Accumulated other comprehensive income ("AOCI") increased $25.4 million during the quarter due to an increase in the value of the Company's available for sale securities portfolio and certain derivatives resulting from the change in long-term interest rates during the quarter. In addition, 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, January 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 January 31, 2024. The replay access information is 877-344-7529 (international 412-317-0088); access code 1087284. 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 Us QCR 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 on April 1, 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 Brookfield, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of December 31, 2023, the Company had $8.5 billion in assets, $6.5 billion in loans and $6.5 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 (including the COVID-19 pandemic in the United States), acts of war or other threats thereof (including the 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 FASB or the PCAOB; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company's general business and any changes in response to the recent failures of other banks; (v) changes in interest rates and prepayment rates of the Company's assets (including the impact of LIBOR phase-out and the recent potential additional rate increases by the Federal Reserve); (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 FDIC 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 (xix) 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. Gipple President Chief Financial Officer (309) 743-7745 tgipple@qcrh.com
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
As of
December 31,
September 30,
June 30,
March 31,
December 31,
2023
2023
2023
2023
2022
(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks
$
97,123
$
104,265
$
84,084
$
64,295
$
59,723
Federal funds sold and interest-bearing deposits
140,369
80,650
175,012
253,997
124,270
Securities, net of allowance for credit losses
1,005,528
896,394
882,888
877,446
928,102
Loans receivable held for sale (1)
2,594
278,893
295,057
140,633
1,480
Loans/leases receivable held for investment
6,540,822
6,327,414
6,084,263
6,049,389
6,137,391
Allowance for credit losses
(87,200
)
(87,669
)
(85,797
)
(86,573
)
(87,706
)
Intangibles
13,821
14,537
15,228
15,993
16,759
Goodwill
139,027
139,027
139,027
138,474
137,607
Derivatives
188,978
291,295
170,294
130,350
177,631
Other assets
497,832
495,251
466,617
452,900
453,580
Total assets
$
8,538,894
$
8,540,057
$
8,226,673
$
8,036,904
$
7,948,837
Total deposits
$
6,514,005
$
6,494,852
$
6,606,720
$
6,501,663
$
5,984,217
Total borrowings
718,295
712,126
418,368
417,480
825,894
Derivatives
214,098
320,220
195,841
150,401
200,701
Other liabilities
205,900
184,476
183,055
165,866
165,301
Total stockholders' equity
886,596
828,383
822,689
801,494
772,724
Total liabilities and stockholders' equity
$
8,538,894
$
8,540,057
$
8,226,673
$
8,036,904
$
7,948,837
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix: (2)
Commercial and industrial - revolving
$
325,243
$
299,588
$
304,617
$
307,612
$
296,869
Commercial and industrial - other
1,390,068
1,381,967
1,308,853
1,322,384
1,371,590
Commercial and industrial - other - LIHTC
91,710
105,601
93,700
97,947
80,103
Total commercial and industrial
1,807,021
1,787,156
1,707,170
1,727,943
1,748,562
Commercial real estate, owner occupied
607,365
610,618
609,717
616,922
629,367
Commercial real estate, non-owner occupied
1,008,892
955,552
963,814
982,716
963,239
Construction and land development
477,424
472,695
437,682
448,261
448,986
Construction and land development - LIHTC
943,101
921,359
870,084
759,924
743,075
Multi-family
284,721
282,541
280,418
229,370
236,043
Multi-family - LIHTC
711,422
874,439
820,376
740,500
727,760
Direct financing leases
31,164
34,401
32,937
35,373
31,889
1-4 family real estate
544,971
539,931
535,405
532,491
499,529
Consumer
127,335
127,615
121,717
116,522
110,421
Total loans/leases
$
6,543,416
$
6,606,307
$
6,379,320
$
6,190,022
$
6,138,871
Less allowance for credit losses
87,200
87,669
85,797
86,573
87,706
Net loans/leases
$
6,456,216
$
6,518,638
$
6,293,523
$
6,103,449
$
6,051,165
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities
$
14,973
$
16,002
$
18,942
$
19,320
$
16,981
Municipal securities
853,645
764,017
743,608
731,689
779,450
Residential mortgage-backed and related securities
59,196
57,946
60,958
63,104
66,215
Asset backed securities
15,423
16,326
17,393
17,967
18,728
Other securities
41,115
43,272
43,156
46,535
46,908
Trading securities
22,368
-
-
-
-
Total securities (3)
$
1,006,720
$
897,563
$
884,057
$
878,615
$
928,282
Less allowance for credit losses
1,192
1,169
1,169
1,169
180
Net securities
$
1,005,528
$
896,394
$
882,888
$
877,446
$
928,102
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits
$
1,038,689
$
1,027,791
$
1,101,605
$
1,189,858
$
1,262,981
Interest-bearing demand deposits
4,338,390
4,416,725
4,374,847
4,033,193
3,875,497
Time deposits
851,950
788,692
765,801
679,946
744,593
Brokered deposits
284,976
261,644
364,467
598,666
101,146
Total deposits
$
6,514,005
$
6,494,852
$
6,606,720
$
6,501,663
$
5,984,217
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances
$
135,000
$
135,000
$
135,000
$
135,000
$
-
Overnight FHLB advances
300,000
295,000
-
-
415,000
Other short-term borrowings
1,500
470
1,850
1,100
129,630
Subordinated notes
233,064
232,958
232,852
232,746
232,662
Junior subordinated debentures
48,731
48,698
48,666
48,634
48,602
Total borrowings
$
718,295
$
712,126
$
418,368
$
417,480
$
825,894
(1) Loans with a fair value of $0 million, $278.0 million, $291.0 million and $139.2 million have been identified for securitization and are included in LHFS at December 31, 2023, 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 are $1.8 billion as of December 31, 2023.
(3) As of December 31, 2023, trading securities included two securities purchased from Freddie Mac following the loan sale and securitization of $130 million of tax exempt LIHTC loans and $135 million of taxable LIHTC loans sponsored by Freddie Mac in 2023.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
For the Quarter Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2023
2023
2023
2023
2022
(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income
$
112,248
$
108,568
$
98,377
$
94,217
$
94,037
Interest expense
56,512
53,313
45,172
37,407
28,819
Net interest income
55,736
55,255
53,205
56,810
65,218
Provision for credit losses
5,199
3,806
3,606
3,928
-
Net interest income after provision for credit losses
$
50,537
$
51,449
$
49,599
$
52,882
$
65,218
Trust fees
$
3,084
$
2,863
$
2,844
$
2,906
$
2,644
Investment advisory and management fees
1,052
947
986
879
918
Deposit service fees
2,008
2,107
2,034
2,028
2,142
Gains on sales of residential real estate loans, net
323
476
500
312
468
Gains on sales of government guaranteed portions of loans, net
24
-
-
30
50
Capital markets revenue
36,956
15,596
22,490
17,023
11,338
Securities gains (losses), net
-
-
12
(463
)
-
Earnings on bank-owned life insurance
832
1,807
838
707
755
Debit card fees
1,561
1,584
1,589
1,466
1,500
Correspondent banking fees
465
450
356
391
257
Loan related fee income
845
800
770
651
614
Fair value gain (loss) on derivatives
(582
)
(336
)
83
(427
)
(267
)
Other
1,161
299
18
339
800
Total noninterest income
$
47,729
$
26,593
$
32,520
$
25,842
$
21,219
Salaries and employee benefits
$
41,059
$
32,098
$
31,459
$
32,003
$
32,594
Occupancy and equipment expense
6,789
6,228
6,100
5,914
6,027
Professional and data processing fees
4,223
4,456
4,078
3,514
3,769
Acquisition costs
-
-
-
-
(424
)
Post-acquisition compensation, transition and integration costs
-
-
-
207
668
FDIC insurance, other insurance and regulatory fees
2,115
1,721
1,927
1,374
1,605
Loan/lease expense
834
826
652
556
411
Net cost of (income from) and gains/losses on operations of other real estate
38
3
-
(67
)
(117
)
Advertising and marketing
1,641
1,429
1,735
1,237
1,562
Communication and data connectivity
449
478
471
665
587
Supplies
333
335
281
305
337
Bank service charges
761
605
621
605
563
Correspondent banking expense
300
232
221
210
210
Intangibles amortization
716
691
765
766
787
Payment card processing
836
733
542
545
599
Trust expense
413
432
337
214
166
Other
431
814
538
737
353
Total noninterest expense
$
60,938
$
51,081
$
49,727
$
48,785
$
49,697
Net income before income taxes
$
37,328
$
26,961
$
32,392
$
29,939
$
36,740
Federal and state income tax expense
4,473
1,840
3,967
2,782
5,834
Net income
$
32,855
$
25,121
$
28,425
$
27,157
$
30,906
Basic EPS
$
1.96
$
1.50
$
1.70
$
1.62
$
1.83
Diluted EPS
$
1.95
$
1.49
$
1.69
$
1.60
$
1.81
Weighted average common shares outstanding
16,734,080
16,717,303
16,701,950
16,776,289
16,855,973
Weighted average common and common equivalent shares outstanding
16,875,952
16,847,951
16,799,527
16,942,132
17,047,976
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
For the Year Ended
December 31,
December 31,
2023
2022
(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income
$
413,410
$
292,571
Interest expense
192,404
61,451
Net interest income
221,006
231,120
Provision for credit losses (1)
16,539
8,284
Net interest income after provision for credit losses
$
204,467
$
222,836
Trust fees
$
11,697
$
10,641
Investment advisory and management fees
3,864
3,858
Deposit service fees
8,177
8,134
Gains on sales of residential real estate loans, net
1,611
2,411
Gains on sales of government guaranteed portions of loans, net
54
119
Capital markets revenue
92,065
41,309
Securities losses, net
(451
)
-
Earnings on bank-owned life insurance
4,184
2,056
Debit card fees
6,200
5,459
Correspondent banking fees
1,662
967
Loan related fee income
3,066
2,428
Fair value gain (loss) on derivatives
(1,262
)
1,975
Other
1,817
1,372
Total noninterest income
$
132,684
$
80,729
Salaries and employee benefits
$
136,619
$
115,368
Occupancy and equipment expense
25,031
21,975
Professional and data processing fees
16,271
16,282
Acquisition costs
-
3,715
Post-acquisition compensation, transition and integration costs
207
5,526
FDIC insurance, other insurance and regulatory fees
7,137
5,806
Loan/lease expense
2,868
1,829
Net cost of (income from) and gains/losses on operations of other real estate
(26
)
(40
)
Advertising and marketing
6,042
4,958
Communication and data connectivity
2,063
2,213
Supplies
1,254
1,109
Bank service charges
2,592
2,282
Correspondent banking expense
963
840
Intangibles amortization
2,938
2,854
Payment card processing
2,656
1,964
Trust expense
1,396
775
Other
2,520
2,560
Total noninterest expense
$
210,531
$
190,016
Net income before income taxes
$
126,620
$
113,549
Federal and state income tax expense
13,062
14,483
Net income
$
113,558
$
99,066
Basic EPS
$
6.79
$
5.94
Diluted EPS
$
6.73
$
5.87
Weighted average common shares outstanding
16,732,406
16,681,844
Weighted average common and common equivalent shares outstanding
16,866,391
16,890,007
(1) Provision for credit losses for the year ended December 31, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
As of and for the Quarter Ended
For the Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
2023
2023
2023
2023
2022
2023
2022
(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding
16,749,254
16,731,646
16,713,853
16,713,775
16,795,942
Book value per common share (1)
$
52.93
$
49.51
$
49.22
$
47.95
$
46.01
Tangible book value per common share (Non-GAAP) (2)
$
43.81
$
40.33
$
39.99
$
38.71
$
36.82
Closing stock price
$
58.39
$
48.52
$
41.03
$
43.91
$
49.64
Market capitalization
$
977,989
$
811,819
$
685,769
$
733,902
$
833,751
Market price / book value
110.31
%
98.00
%
83.36
%
91.57
%
107.90
%
Market price / tangible book value
133.29
%
120.30
%
102.59
%
113.43
%
134.83
%
Earnings per common share (basic) LTM (3)
$
6.78
$
6.65
$
6.89
$
6.06
$
5.95
Price earnings ratio LTM (3)
8.61 x
7.30 x
5.96 x
7.24 x
8.35 x
TCE / TA (Non-GAAP) (4)
8.75
%
8.05
%
8.28
%
8.21
%
7.93
%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance
$
828,383
$
822,689
$
801,494
$
772,724
$
737,072
Net income
32,855
25,121
28,425
27,157
30,906
Other comprehensive income (loss), net of tax
25,363
(19,415
)
(6,336
)
9,325
9,959
Common stock cash dividends declared
(1,004
)
(1,003
)
(1,003
)
(1,010
)
(1,013
)
Repurchase and cancellation of shares of common stock as a result of a share repurchase program
-
-
(967
)
(7,719
)
(5,037
)
Other (5)
999
991
1,076
1,017
837
Ending balance
$
886,596
$
828,383
$
822,689
$
801,494
$
772,724
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio
14.15
%
14.48
%
14.64
%
14.64
%
14.28
%
Tier 1 risk-based capital ratio
10.16
%
10.30
%
10.34
%
10.23
%
9.95
%
Tier 1 leverage capital ratio
10.03
%
9.92
%
10.06
%
9.73
%
9.61
%
Common equity tier 1 ratio
9.57
%
9.68
%
9.70
%
9.57
%
9.29
%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)
1.53
%
1.21
%
1.44
%
1.37
%
1.58
%
1.39
%
1.37
%
Return on average total equity (annualized)
15.35
%
11.95
%
13.97
%
13.67
%
16.32
%
13.78
%
13.24
%
Net interest margin
2.90
%
2.89
%
2.93
%
3.18
%
3.62
%
2.97
%
3.49
%
Net interest margin (TEY) (Non-GAAP)(7)
3.32
%
3.31
%
3.29
%
3.52
%
3.93
%
3.35
%
3.73
%
Efficiency ratio (Non-GAAP) (8)
58.90
%
62.41
%
58.01
%
59.02
%
57.50
%
59.52
%
60.93
%
Gross loans and leases / total assets
76.63
%
77.36
%
77.54
%
77.02
%
77.23
%
76.63
%
77.23
%
Gross loans and leases / total deposits
100.45
%
101.72
%
96.56
%
95.21
%
102.58
%
100.45
%
102.58
%
Effective tax rate
11.98
%
6.82
%
12.25
%
9.29
%
15.88
%
10.32
%
12.75
%
Full-time equivalent employees (9)
996
987
1009
969
973
996
973
AVERAGE BALANCES
Assets
$
8,535,732
$
8,287,813
$
7,924,597
$
7,906,830
$
7,800,229
$
8,165,805
$
7,206,180
Loans/leases
6,483,572
6,476,512
6,219,980
6,165,115
6,043,359
6,337,551
5,604,074
Deposits
6,485,154
6,342,339
6,292,481
6,179,644
6,029,455
6,325,790
5,676,546
Total stockholders' equity
852,163
837,734
816,882
794,685
757,419
825,557
748,032
(1) Includes accumulated other comprehensive income (loss).
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets. See GAAP to Non-GAAP reconciliations.
(3) LTM : Last twelve months.
(4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
(7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
(8) See GAAP to Non-GAAP reconciliations.
(9) The increase in full-time equivalent employees in the second quarter of 2023 and the subsequent decline in the third quarter of 2023 includes 19 summer interns.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
ANALYSIS OF NET INTEREST INCOME AND MARGIN
For the Quarter Ended
December 31, 2023
September 30, 2023
December 31, 2022
Average Balance
Interest Earned or Paid
Average Yield or Cost
Average Balance
Interest Earned or Paid
Average Yield or Cost
Average Balance
Interest Earned or Paid
Average Yield or Cost
(dollars in thousands)
Fed funds sold
$
18,644
$
257
5.47
%
$
21,526
$
284
5.23
%
$
30,754
$
296
3.82
%
Interest-bearing deposits at financial institutions
72,439
986
5.40
%
86,807
1,205
5.51
%
62,581
504
3.20
%
Investment securities - taxable
365,686
4,080
4.45
%
344,657
3,788
4.38
%
347,224
3,286
3.77
%
Investment securities - nontaxable (1)
650,069
8,380
5.15
%
600,693
6,974
4.64
%
624,706
6,788
4.35
%
Restricted investment securities
40,625
670
6.45
%
43,590
659
5.91
%
39,954
628
6.15
%
Loans (1)
6,483,572
105,830
6.48
%
6,476,512
103,428
6.34
%
6,043,359
88,088
5.78
%
Total earning assets (1)
$
7,631,035
$
120,203
6.26
%
$
7,573,785
$
116,338
6.10
%
$
7,148,578
$
99,590
5.53
%
Interest-bearing deposits
$
4,465,279
$
37,082
3.29
%
$
4,264,208
$
33,563
3.12
%
$
3,968,081
$
17,655
1.77
%
Time deposits
982,356
10,559
4.26
%
999,488
10,003
3.97
%
746,819
3,476
1.85
%
Short-term borrowings
1,101
15
5.18
%
1,514
20
5.28
%
19,591
211
4.28
%
Federal Home Loan Bank advances
360,000
4,841
5.26
%
425,870
5,724
5.26
%
351,033
3,507
3.91
%
Subordinated debentures
232,994
3,308
5.68
%
232,890
3,307
5.68
%
232,689
3,312
5.69
%
Junior subordinated debentures
48,710
708
5.68
%
48,678
695
5.59
%
48,583
657
5.29
%
Total interest-bearing liabilities
$
6,090,440
$
56,513
3.68
%
$
5,972,648
$
53,312
3.54
%
$
5,366,796
$
28,818
2.13
%
Net interest income (1)
$
63,690
$
63,026
$
70,772
Net interest margin (2)
2.90
%
2.89
%
3.62
%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)
3.32
%
3.31
%
3.93
%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)
3.29
%
3.28
%
3.61
%
For the Year Ended
December 31, 2023
December 31, 2022
Average Balance
Interest Earned or Paid
Average Yield or Cost
Average Balance
Interest Earned or Paid
Average Yield or Cost
(dollars in thousands)
Fed funds sold
$
19,110
$
998
5.22
%
$
14,436
$
410
2.84
%
Interest-bearing deposits at financial institutions
80,924
4,137
5.11
%
63,448
1,089
1.72
%
Investment securities - taxable
346,579
14,927
4.30
%
335,255
12,078
3.59
%
Investment securities - nontaxable (1)
611,924
28,272
4.62
%
575,457
24,281
4.22
%
Restricted investment securities
39,273
2,346
5.89
%
35,554
2,068
5.73
%
Loans (1)
6,337,551
390,967
6.17
%
5,604,074
268,985
4.80
%
Total earning assets (1)
$
7,435,361
$
441,647
5.94
%
$
6,628,224
$
308,911
4.66
%
Interest-bearing deposits
$
4,191,913
$
121,662
2.90
%
$
3,715,017
$
35,359
0.95
%
Time deposits
1,010,827
37,784
3.74
%
568,245
7,003
1.23
%
Short-term borrowings
2,781
152
6.44
%
8,637
299
3.46
%
Federal Home Loan Bank advances
323,904
16,740
5.10
%
286,474
6,954
2.39
%
Other borrowings
-
-
0.00
%
1,068
53
4.96
%
Subordinated debentures
232,837
13,230
5.68
%
165,685
9,200
5.55
%
Junior subordinated debentures
48,662
2,836
5.75
%
45,497
2,583
5.60
%
Total interest-bearing liabilities
$
5,810,924
$
192,404
3.31
%
$
4,790,623
$
61,451
1.28
%
Net interest income (1)
$
249,243
$
247,460
Net interest margin (2)
2.97
%
3.49
%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)
3.35
%
3.73
%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)
3.32
%
3.60
%
(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
(2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
As of
December 31,
September 30,
June 30,
March 31,
December 31,
2023
2023
2023
2023
2022
(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
Beginning balance
$
87,669
$
85,797
$
86,573
$
87,706
$
90,489
Change in ACL for writedown of LHFS to fair value (1)
266
175
(2,277
)
(1,709
)
-
Credit loss expense
2,519
3,260
3,313
2,458
1,013
Loans/leases charged off
(3,354
)
(1,816
)
(1,947
)
(2,275
)
(3,960
)
Recoveries on loans/leases previously charged off
100
253
135
393
164
Ending balance
$
87,200
$
87,669
$
85,797
$
86,573
$
87,706
NONPERFORMING ASSETS
Nonaccrual loans/leases
$
32,753
$
34,568
$
26,062
$
22,947
$
8,765
Accruing loans/leases past due 90 days or more
86
-
83
15
5
Total nonperforming loans/leases
32,839
34,568
26,145
22,962
8,770
Other real estate owned
1,347
120
-
61
133
Other repossessed assets
-
-
-
-
-
Total nonperforming assets
$
34,186
$
34,688
$
26,145
$
23,023
$
8,903
ASSET QUALITY RATIOS
Nonperforming assets / total assets
0.40
%
0.41
%
0.32
%
0.29
%
0.11
%
ACL for loans and leases / total loans/leases held for investment
1.33
%
1.39
%
1.41
%
1.43
%
1.43
%
ACL for loans and leases / nonperforming loans/leases
265.54
%
253.61
%
328.16
%
377.03
%
1000.07
%
Net charge-offs as a % of average loans/leases
0.05
%
0.02
%
0.03
%
0.03
%
0.06
%
INTERNALLY ASSIGNED RISK RATING (2)
Special mention (rating 6)
$
124,460
$
127,202
$
116,910
$
125,048
$
98,333
Substandard (rating 7)/Classifed loans (3)
67,313
69,369
63,956
70,866
66,021
Doubtful (rating 8)/Classifed loans (3)
-
-
-
-
-
Criticized loans (4)
$
191,773
$
196,571
$
180,866
$
195,914
$
164,354
Classified loans as a % of total loans/leases
1.03
%
1.05
%
1.00
%
1.14
%
1.08
%
Criticized loans as a % of total loans/leases
2.93
%
2.98
%
2.84
%
3.16
%
2.68
%
(1) Certain loans were identified for securitization and transferred from loans to LHFS. The fair values of the loans were less than their carrying values at the date of transfer, resulting in a change to the loan ACL.
(2) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
(3) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.
(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
For the Quarter Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
SELECT FINANCIAL DATA - SUBSIDIARIES
2023
2023
2022
2023
2022
(dollars in thousands)
TOTAL ASSETS
Quad City Bank and Trust (1)
$
2,448,957
$
2,433,084
$
2,312,013
m2 Equipment Finance, LLC
345,682
336,180
306,396
Cedar Rapids Bank and Trust
2,419,146
2,442,263
2,185,500
Community State Bank
1,426,202
1,417,250
1,297,812
Guaranty Bank
2,281,296
2,242,638
2,146,474
TOTAL DEPOSITS
Quad City Bank and Trust (1)
$
1,878,375
$
1,973,989
$
1,730,187
Cedar Rapids Bank and Trust
1,748,516
1,722,905
1,686,959
Community State Bank
1,169,921
1,132,724
1,071,146
Guaranty Bank
1,771,371
1,722,861
1,587,477
TOTAL LOANS & LEASES
Quad City Bank and Trust (1)
$
1,983,679
$
2,005,770
$
1,828,267
m2 Equipment Finance, LLC
350,641
341,041
309,930
Cedar Rapids Bank and Trust
1,698,447
1,750,986
1,644,989
Community State Bank
1,099,262
1,098,479
988,370
Guaranty Bank
1,762,027
1,751,072
1,677,245
TOTAL LOANS & LEASES / TOTAL DEPOSITS
Quad City Bank and Trust (1)
106
%
102
%
106
%
Cedar Rapids Bank and Trust
97
%
102
%
98
%
Community State Bank
94
%
97
%
92
%
Guaranty Bank
99
%
102
%
106
%
TOTAL LOANS & LEASES / TOTAL ASSETS
Quad City Bank and Trust (1)
81
%
82
%
79
%
Cedar Rapids Bank and Trust
70
%
72
%
75
%
Community State Bank
77
%
78
%
76
%
Guaranty Bank
77
%
78
%
78
%
ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES
Quad City Bank and Trust (1)
1.48
%
1.43
%
1.46
%
m2 Equipment Finance, LLC
3.80
%
3.52
%
3.11
%
Cedar Rapids Bank and Trust
1.39
%
1.40
%
1.49
%
Community State Bank
1.23
%
1.22
%
1.38
%
Guaranty Bank
1.18
%
1.20
%
1.37
%
RETURN ON AVERAGE ASSETS
Quad City Bank and Trust (1)
0.67
%
0.97
%
1.36
%
0.92
%
1.55
%
Cedar Rapids Bank and Trust
3.78
%
2.28
%
2.73
%
3.17
%
2.63
%
Community State Bank
1.11
%
1.38
%
1.75
%
1.34
%
1.40
%
Guaranty Bank (5)
1.41
%
1.23
%
2.06
%
1.16
%
1.36
%
NET INTEREST MARGIN PERCENTAGE (2)
Quad City Bank and Trust (1)
3.41
%
3.37
%
3.56
%
3.37
%
3.61
%
Cedar Rapids Bank and Trust
3.84
%
3.78
%
4.37
%
3.83
%
3.93
%
Community State Bank (3)
3.74
%
3.88
%
4.06
%
3.87
%
3.77
%
Guaranty Bank (4)
3.07
%
3.06
%
4.58
%
3.18
%
4.18
%
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
INTEREST MARGIN, NET
Cedar Rapids Bank and Trust
$
-
$
-
$
98
$
(8
)
$
158
Community State Bank
(1
)
(1
)
505
$
67
628
Guaranty Bank
706
572
5,118
$
2,243
7,932
QCR Holdings, Inc. (6)
(32
)
(32
)
(33
)
$
(129
)
(137
)
(1)
Quad City Bank and Trust amounts include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
(2)
Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% federal tax rate.
(3)
Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.74% for the quarter ended December 31, 2023, 3.88% for the quarter ended September 30, 2023 and 3.73% for the quarter ended December 31, 2022.
(4)
Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.95% for the quarter ended December 31, 2023, 2.97% for the quarter ended September 30, 2023 and 3.58% for the quarter ended December 31, 2022.
(5)
Adjusted ROAA excluding non-core adjustments for the Guaranty Bank acquisition (non-GAAP) would have been 1.91% for the year ended December 31, 2022.
(6)
Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
As of
December 31,
September 30,
June 30,
March 31,
December 31,
GAAP TO NON-GAAP RECONCILIATIONS
2023
2023
2023
2023
2022
(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)
$
886,596
$
828,383
$
822,689
$
801,494
$
772,724
Less: Intangible assets
152,848
153,564
154,255
154,467
154,366
Tangible common equity (non-GAAP)
$
733,748
$
674,819
$
668,434
$
647,027
$
618,358
Total assets (GAAP)
$
8,538,894
$
8,540,057
$
8,226,673
$
8,036,904
$
7,948,837
Less: Intangible assets
152,848
153,564
154,255
154,467
154,366
Tangible assets (non-GAAP)
$
8,386,046
$
8,386,493
$
8,072,418
$
7,882,437
$
7,794,471
Tangible common equity to tangible assets ratio (non-GAAP)
8.75
%
8.05
%
8.28
%
8.21
%
7.93
%
(1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures.
QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
GAAP TO NON-GAAP RECONCILIATIONS
For the Quarter Ended
For the Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
ADJUSTED NET INCOME (1)
2023
2023
2023
2023
2022
2023
2022
(dollars in thousands, except per share data)
Net income (GAAP)
$
32,855
$
25,121
$
28,425
$
27,157
$
30,906
$
113,558
$
99,066
Less non-core items (post-tax) (2):
Income:
Securities gains (losses), net
-
-
9
(366
)
-
(356
)
-
Fair value gain (loss) on derivatives, net
(460
)
(265
)
66
(337
)
(211
)
(997
)
1,560
Total non-core income (non-GAAP)
$
(460
)
$
(265
)
$
75
$
(703
)
$
(211
)
$
(1,353
)
$
1,560
Expense:
Acquisition costs (2)
-
-
-
-
(517
)
-
3,198
Post-acquisition compensation, transition and integration costs
-
-
-
164
529
164
4,366
Separation agreement
-
-
-
-
-
-
-
CECL Day 2 provision for credit losses on acquired non-PCD loans (3)
-
-
-
-
-
-
8,651
CECL Day 2 provision for credit losses provision on acquired OBS exposure (3)
-
-
-
-
-
-
1,140
Total non-core expense (non-GAAP)
$
-
$
-
$
-
$
164
$
12
$
164
$
17,355
Adjusted net income (non-GAAP) (1)
$
33,315
$
25,386
$
28,350
$
28,024
$
31,129
$
115,075
$
114,861
ADJUSTED EARNINGS PER COMMON SHARE (1)
Adjusted net income (non-GAAP) (from above)
$
33,315
$
25,386
$
28,350
$
28,024
$
31,129
$
115,075
$
114,861
Weighted average common shares outstanding
16,734,080
16,717,303
16,701,950
16,776,289
16,855,973
16,732,406
16,681,844
Weighted average common and common equivalent shares outstanding
16,875,952
16,847,951
16,799,527
16,942,132
17,047,976
16,866,391
16,890,007
Adjusted earnings per common share (non-GAAP):
Basic
$
1.99
$
1.52
$
1.70
$
1.67
$
1.85
$
6.88
$
6.89
Diluted
$
1.97
$
1.51
$
1.69
$
1.65
$
1.83
$
6.82
$
6.80
ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)
Adjusted net income (non-GAAP) (from above)
$
33,315
$
25,386
$
28,350
$
28,024
$
31,129
$
115,075
$
114,861
Average Assets
$
8,535,732
$
8,287,813
$
7,924,597
$
7,906,830
$
7,800,229
$
8,165,805
$
7,206,180
Adjusted return on average assets (annualized) (non-GAAP)
1.56
%
1.23
%
1.43
%
1.42
%
1.60
%
1.41
%
1.59
%
Adjusted return on average equity (annualized) (non-GAAP)
15.64
%
12.12
%
13.88
%
14.11
%
16.44
%
13.94
%
15.36
%
NET INTEREST MARGIN (TEY) (4)
Net interest income (GAAP)
$
55,736
$
55,255
$
53,205
$
56,810
$
65,218
$
221,006
$
231,120
Plus: Tax equivalent adjustment (5)
7,954
7,771
6,542
6,057
5,554
28,237
16,340
Net interest income - tax equivalent (Non-GAAP)
$
63,690
$
63,026
$
59,747
$
62,867
$
70,772
$
249,243
$
247,460
Less: Acquisition accounting net accretion
673
539
134
828
5,688
2,173
8,581
Adjusted net interest income
$
63,017
$
62,487
$
59,613
$
62,039
$
65,084
$
247,070
$
238,879
Average earning assets
$
7,631,035
$
7,573,785
$
7,283,286
$
7,247,605
$
7,148,578
$
7,435,361
$
6,628,224
Net interest margin (GAAP)
2.90
%
2.89
%
2.93
%
3.18
%
3.62
%
2.97
%
3.49
%
Net interest margin (TEY) (Non-GAAP)
3.32
%
3.31
%
3.29
%
3.52
%
3.93
%
3.35
%
3.73
%
Adjusted net interest margin (TEY) (Non-GAAP)
3.29
%
3.28
%
3.28
%
3.47
%
3.61
%
3.32
%
3.60
%
EFFICIENCY RATIO (6)
Noninterest expense (GAAP)
$
60,938
$
51,081
$
49,727
$
48,785
$
49,697
$
210,531
$
190,016
Net interest income (GAAP)
$
55,736
$
55,255
$
53,205
$
56,810
$
65,218
$
221,006
$
$
231,120
Noninterest income (GAAP)
47,729
26,593
32,520
25,842
21,219
132,684
80,729
Total income
$
103,465
$
81,848
$
85,725
$
82,652
$
86,437
$
353,690
$
311,849
Efficiency ratio (noninterest expense/total income) (Non-GAAP)
58.90
%
62.41
%
58.01
%
59.02
%
57.50
%
59.52
%
60.93
%
(1) Adjusted net income, adjusted earnings per common share, adjusted return on average assets and average equity are non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-core or non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, these non-GAAP measures are reconciled to net income, which is the most directly comparable GAAP financial measure.
(2) Non-core or nonrecurring items (post-tax) are calculated using an estimated effective federal tax rate of 21% with the exception of acquisition costs which have an estimated effective federal tax rate of 13.62%.
(3) The CECL Day 2 provision for credit losses on acquired non-PCD loans and OBS exposures resulted from the Guaranty Bank acquisition on April 1, 2022.
(4) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(5) Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
(6) Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.