QCR Holdings, Inc. Announces Net Income of $18.0 Million for the First Quarter of 2021

Tuesday, 27. April 2021 22:05

First Quarter 2021 Highlights

  • Net income of $18.0 million, or $1.12 per diluted share
  • Adjusted net income (non-GAAP) of $18.6 million, or $1.16 per diluted share
  • NIM increased by 1 basis point and Adjusted NIM (TEY)(non-GAAP) increased by 3 bps to 3.26% and 3.40%, respectively
  • Noninterest income continues to be strong at $23.5 million
  • Annualized core loan and lease growth (non-GAAP) of 14.0% for the quarter, excluding SBA Paycheck Protection Program (“PPP”) loans
  • Annualized core deposit growth of 3.2% for the quarter
  • Provision for credit losses of $6.7 million for the quarter and allowance for credit losses (“ACL”) to total loans/leases of 1.99%, excluding PPP loans (non-GAAP)
  • Nonperforming assets remained stable for the quarter and represent 0.25% of total assets

MOLINE, Ill.,, April 27, 2021 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $18.0 million and diluted earnings per share (“EPS”) of $1.12 for the first quarter of 2021, compared to net income of $18.3 million and diluted EPS of $1.14 for the fourth quarter of 2020. Pre-provision, pre-tax adjusted net income (non-GAAP) was $29.0 million in the first quarter of 2021, compared to $30.4 million in the fourth quarter of 2020.

The Company reported adjusted net income (non-GAAP) of $18.6 million and adjusted diluted EPS (non-GAAP) of $1.16 for the first quarter of 2021, compared to adjusted net income (non-GAAP) of $19.1 million and adjusted diluted EPS (non-GAAP) of $1.20 for the fourth quarter of 2020. For the first quarter of 2020, net income and diluted EPS were $11.2 million and $0.70, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $12.4 million and $0.77, respectively.

 For the Quarter Ended
 March 31,December 31,March 31,
$ in millions (except per share data) 2021  2020  2020 
Net Income$18.0 $18.3 $11.2 
Diluted EPS$1.12 $1.14 $0.70 
Adjusted Net Income (non-GAAP)$18.6 $19.1 $12.4 
Adjusted Diluted EPS (non-GAAP)$1.16 $1.20 $0.77 
Pre-Provision/Pre-Tax Adjusted Income (non-GAAP)$29.0 $30.4 $22.8 
Pre-Provision/Pre-Tax Adjusted ROAA (non-GAAP) 2.05%              2.08% 1.84%

Adjusted non-GAAP measurements of financial performance exclude non-recurring 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 with our financial performance for the first quarter,” said Larry J. Helling, Chief Executive Officer. “We delivered another quarter of strong net income, driven by robust loan growth, expanded net interest margin and carefully managed expenses. Despite a competitive lending environment, we grew core loans by 14% on an annualized basis, while maintaining disciplined underwriting and excellent credit quality. We continue to attract new clients and deepen ties with existing clients, which validates our relationship-based community banking model.”

Annualized Loan and Lease Growth of 14.0% for the Quarter, excluding PPP Loans (non-GAAP)

During the first quarter of 2021, the Company’s total loans and leases, excluding PPP loans, increased $139.2 million to a total of $4.1 billion. Core loan and lease growth during the quarter was 14.0% on an annualized basis and was funded by the Company’s excess liquidity and core deposit growth. Core deposits (excluding brokered deposits) increased by $37.2 million during the quarter.   Core deposit growth was muted during the quarter as the Company was successful in shifting some of its excess deposits off balance sheet. The Company retains the ability to bring these deposits back onto the balance sheet as needed. The Company’s wholesale funding portfolio has been reduced to predominately subordinated debt that qualifies as regulatory capital. Additionally, at quarter-end, the percentage of gross loans and leases to total assets was 77.3%, up from 74.8% in the fourth quarter of 2020, driven primarily by the strong loan growth and lower excess liquidity.

“Our robust loan growth for the quarter was driven by strength in both our core commercial lending business and in our Specialty Finance Group,” added Helling. “Given the strong first quarter results, combined with our current pipeline, we are now targeting organic loan growth for the full year 2021 of between 8% and 10%, consistent with our long-term goal of 9%.”

Net Interest Income of $42.0 million

Net interest income for the first quarter of 2021 totaled $42.0 million, compared to $43.7 million for the fourth quarter of 2020 and $37.7 million for the first quarter of 2020. Excluding the impact of acquisition-related net accretion and PPP income, net interest income was stable on a linked quarter basis. Acquisition-related net accretion totaled $504 thousand for the first quarter of 2021, down from $1.1 million in the fourth quarter of 2020 and $625 thousand for the first quarter of 2020. Adjusted net interest income (non-GAAP) was $43.7 million for the first quarter of 2021, compared to $45.3 million for the fourth quarter of 2020 and $38.9 million for the first quarter of 2020.

In the first quarter, reported NIM was 3.26% and, on a tax-equivalent yield basis (non-GAAP), NIM was 3.43%, as compared to 3.25% and 3.45% in the fourth quarter of 2020, respectively. Adjusted NIM (non-GAAP), excluding acquisition-related net accretion was 3.40%, up 3 basis points from the fourth quarter. The increase in Adjusted NIM (non-GAAP) during the quarter was due to a 1 basis point decline in the total cost of interest-bearing funds (due to both mix and rate), and a 2 basis point increase in the yield on earning assets (adjusted for acquisition-related net accretion).   

 For the Quarter Ended
 March 31,December 31,March 31,
 2021 2020 2020 
NIM3.26%3.25%3.40%
NIM (TEY)(non-GAAP)3.43%3.45%3.56%
Adjusted NIM (TEY)(non-GAAP)3.40%3.37%3.50%
See GAAP to non-GAAP reconciliations

   

“We expanded our adjusted net interest margin again during the first quarter as our deposit costs were slightly lower due to an improved mix. While our average loan yields also declined during the quarter, we benefited from lower excess liquidity as well, enabling us to grow our margin,” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer.

Noninterest Income of $23.5 million        

Noninterest income for the first quarter of 2021 totaled $23.5 million, compared to $32.0 million for the fourth quarter of 2020. The decrease was primarily due to a $7.8 million reduction in swap fee income from the strong fourth quarter. Wealth management revenue was $3.7 million for the quarter, up $427 thousand from the fourth quarter. In addition, securities gains decreased by $617 thousand and gain on sale of loans decreased by $349 thousand from the prior quarter. Noninterest income increased $8.3 million, or an increase of 55% compared to the first quarter of 2020.

“Swap fee income totaled $13.6 million for the quarter, which was effectively right at the lower end of our guidance. The current pipeline of swap loans remains healthy and we believe this source of fee income is sustainable for the long term,” added Gipple “Our continued expectation is that swap fee income will be approximately $14 to $18 million per quarter for the remainder of 2021.”

Noninterest Expenses of $37.2 million

Noninterest expense for the first quarter of 2021 totaled $37.2 million, compared to $46.4 million for the fourth quarter of 2020 and $31.4 million for the first quarter of 2020. The linked-quarter decline was primarily due to lower salary and benefits expense of $5.6 million, driven by lower commission and incentive compensation expense in the quarter due to the lower swap fee income and lower incentive compensation accruals. Occupancy and equipment expense decreased by $809 thousand, advertising and marketing expense decreased by $649 thousand, and professional and data processing fees decreased by $428 thousand. In addition, we experienced a linked-quarter decline in losses on liability extinguishment of $1.5 million.

Asset Quality Remains Strong and NPAs Remained Stable

Nonperforming assets (“NPAs”) totaled $14.1 million at the end of the first quarter, consistent with the fourth quarter of 2020. The ratio of NPAs to total assets was 0.25% on both March 31, 2021 and December 31, 2020, and improved from 0.31% on March 31, 2020. In addition, the Company’s criticized loans and classified loans to total loans and leases were 3.17% and 1.95%, respectively, from 3.24% and 1.55% as of December 31, 2020.

On January 1, 2021, the Company replaced its "incurred loss" model for recognizing credit losses with an "expected loss" model referred to as the CECL model, as per ASU 2016-13. As a result, there was a “day one” adjustment to our allowance for credit losses on loans/leases, which decreased the allowance by $8.1 million. Additionally, when combined with “day one” adjustments for held-to maturity investments and off-balance sheet exposures, also required by CECL, the total “day one” adjustment resulted in a $937 thousand reduction to capital, after-tax.

The Company’s provision for credit losses totaled $6.7 million for the first quarter of 2021, down from $7.1 million in the prior quarter. As of March 31, 2021, the ACL on total loans/leases was 1.88%. The ACL on total loans/leases to total loans and leases on December 31, 2020 under CECL would have been 1.79%. Excluding PPP loans of $244 million, the ACL to total loans/leases as of March 31, 2021 was 1.99% (non-GAAP).

Continued Strong Capital Levels

As of March 31, 2021, the Company’s total risk-based capital ratio was 15.22%, the common equity tier 1 ratio was 10.83% and the tangible common equity to tangible assets ratio (non-GAAP) was 9.42%. By comparison, these respective ratios were 14.95%, 10.55% and 9.08% as of December 31, 2020.

Focus on Three Strategic Long-Term Initiatives

As part of the Company’s ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, it continues to operate under three key strategic long-term initiatives:

  • Organic loan and lease growth of 9% per year, funded by core deposits;
  • Grow fee-based income by at least 6% per year; and
  • Limit our annual operating expense growth to 5% per year.

These initiatives are long-term targets. Due to the impact of the COVID-19 pandemic, among other factors, the Company may not be able to achieve these goals for the full year 2021.

Supplemental Presentation and Where to Find It
In addition to this press release, the Company has included a supplemental presentation that provides further information regarding the Company’s loan exposures and deferrals. Investors, analysts and other interested persons may find this presentation on the Securities and Exchange Commission’s EDGAR filing system at www.sec.gov/edgar.shtml, or on the Company’s website at www.qcrh.com.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, April 28, 2021, 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 12, 2021. The replay access information is 877-344-7529 (international 412-317-0088); access code 10153920. A webcast of the teleconference can be accessed at 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, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. 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 engages in commercial leasing through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 23 locations in Iowa, Missouri, Wisconsin and Illinois. As of March 31, 2021, the Company had approximately $5.6 billion in assets, $4.4 billion in loans and $4.6 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,” “predict,” “suggest,” “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should” 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 the impact of the new presidential administration); (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, 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, the Securities Exchange Commission or the PCAOB, including FASB’s CECL impairment standards ; (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector 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; and (xiii) 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.

Contacts: 
Todd A. GippleKim K. Garrett
PresidentVice President
Chief Operating OfficerCorporate Communications
Chief Financial OfficerInvestor Relations Manager
(309) 743-7745(319) 743-7006
tgipple@qcrh.comkgarret@qcrh.com


QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
      
 As of
 March 31,December 31,September 30,June 30,March 31,
  2021 2020 2020 2020 2020
      
 (dollars in thousands)
      
CONDENSED BALANCE SHEET     
      
Cash and due from banks$78,814$61,329$68,932$88,577$169,827
Federal funds sold and interest-bearing deposits 55,056 95,676 302,668 142,900 206,708
Securities, net of allowance for credit losses 799,825 838,131 782,088 748,883 684,571
Net loans/leases 4,279,220 4,166,753 4,168,395 4,079,432 3,662,435
Intangibles 10,873 11,381 11,902 13,872 14,421
Goodwill 74,066 74,066 74,066 74,248 74,248
Derivatives 122,668 222,757 236,381 225,164 195,973
Other assets 224,625 212,704 220,128 220,920 213,134
Assets held for sale - - - 10,765 10,758
Total assets$ 5,645,147$ 5,682,797$ 5,864,560$ 5,604,761$ 5,232,075
      
Total deposits$4,631,782$4,599,137$4,672,268$4,349,775$4,170,478
Total borrowings 188,601 177,114 226,962 376,250 244,399
Derivatives 125,863 229,270 244,510 233,589 203,744
Other liabilities 90,182 83,483 148,207 87,539 71,185
Liabilities held for sale - - - 1,588 3,130
Total stockholders' equity 608,719 593,793 572,613 556,020 539,139
Total liabilities and stockholders' equity$ 5,645,147$ 5,682,797$ 5,864,560$ 5,604,761$ 5,232,075
      
ANALYSIS OF LOAN PORTFOLIO     
Loan/lease mix: (1)     
Commercial and industrial - revolving$168,842    
Commercial and industrial - other 1,616,144    
Commercial real estate, owner occupied 461,272    
Commercial real estate, non-owner occupied 610,582    
Construction and land development 607,798    
Multi-family 396,272    
Direct financing leases 60,134    
1-4 family real estate 368,927    
Consumer 71,080    
Total loans/leases$4,361,051    
Less allowance for credit losses 81,831    
Net loans/leases$ 4,279,220    
      
Loan/lease mix: (1)     
Commercial and industrial loans$1,779,062$1,726,723$1,823,049$1,850,110$1,484,979
Commercial real estate loans 2,174,897 2,107,629 1,999,715 1,869,162 1,783,086
Direct financing leases 59,229 66,016 73,011 79,105 83,324
Residential real estate loans 254,900 252,121 245,032 241,069 237,742
Installment and other consumer loans 87,053 91,302 102,471 99,150 106,728
Deferred loan/lease origination costs, net of fees 5,910 7,338 4,699 1,663 8,809
Total loans/leases$4,361,051$4,251,129$4,247,977$4,140,259$3,704,668
Less allowance for credit losses (2) 81,831 84,376 79,582 60,827 42,233
Net loans/leases$ 4,279,220$ 4,166,753$ 4,168,395$ 4,079,432$ 3,662,435
      
ANALYSIS OF SECURITIES PORTFOLIO     
Securities mix:     
U.S. government sponsored agency securities$14,581$15,336$18,437$17,472$19,457
Municipal securities 614,649 627,523 569,075 526,192 493,664
Residential mortgage-backed and related securities 118,051 132,842 134,147 145,672 122,853
Asset backed securities 39,815 40,683 40,665 39,797 28,499
Other securities 12,903 21,747 19,764 19,750 20,098
Total securities$799,999$838,131$782,088$748,883$684,571
Less allowance for credit losses (2) 174 - - - -
Net securities$ 799,825$ 838,131$ 782,088$ 748,883$ 684,571
      
ANALYSIS OF DEPOSITS     
Deposit mix:     
Noninterest-bearing demand deposits$1,269,578$1,145,378$1,175,085$1,177,482$829,782
Interest-bearing demand deposits 2,916,054 2,987,469 2,938,194 2,488,755 2,440,907
Time deposits 445,067 460,659 499,021 560,982 617,979
Brokered deposits 1,084 5,631 59,968 122,556 281,810
Total deposits$ 4,631,782$ 4,599,137$ 4,672,268$ 4,349,775$ 4,170,478
      
ANALYSIS OF BORROWINGS     
Borrowings mix:     
Term FHLB advances$-$-$40,000$90,000$55,000
Overnight FHLB advances (3) 25,000 15,000 - 55,000 40,000
FRB borrowings - - - 100,000 30,000
Other short-term borrowings 6,840 5,430 30,430 24,818 13,067
Subordinated notes 118,731 118,691 118,577 68,516 68,455
Junior subordinated debentures 38,030 37,993 37,955 37,916 37,877
Total borrowings$ 188,601$ 177,114$ 226,962$ 376,250$ 244,399
      
(1) The Company adopted ASU 2016-13 "CECL", effective January 1, 2021, which included a change in class of receivable and segment categories.
(2) The Company adopted ASU 2016-13 "CECL", effective January 1, 2021, which requires an allowance for credit losses ("ACL") on loans/leases, off-balance sheet ("OBS") exposures and held to maturity ("HTM") securities, recorded through the income statement within the provision for credit losses. The Day 1 adjustments to ACL were as follows:
      loans/leases ($8.1) million, OBS $9.1 million, HTM securities $183 thousand. The current quarter provision for credit expense was as follows: loans/leases $6.0 million,
      OBS $729 thousand, and HTM securities was ($9) thousand.    
(3) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 0.28%.  
      



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
        
   For the Quarter Ended
   March 31,December 31,September 30,June 30,March 31,
    2021 2020  2020  2020  2020
        
   (dollars in thousands, except per share data)
        
INCOME STATEMENT      
Interest income $47,565$49,851 $50,890 $48,650 $48,982
Interest expense  5,590 6,144  6,309  7,694  11,276
Net interest income  41,975 43,707  44,581  40,956  37,706
Provision for credit losses (1)  6,713 7,080  20,342  19,915  8,367
Net interest income after provision for loan/lease losses $ 35,262$ 36,627 $ 24,239 $ 21,041 $ 29,339
        
        
Trust department fees $2,801$2,388 $2,280 $2,227 $2,312
Investment advisory and management fees  940 926  1,266  1,399  1,727
Deposit service fees  1,408 1,875  1,403  1,286  1,477
Gain on sales of residential real estate loans  1,337 1,462  1,370  1,196  652
Gain on sales of government guaranteed portions of loans  - 224  -  -  -
Swap fee income  13,557 21,402  26,688  19,927  6,804
Securities gains, net  - 617  1,802  65  -
Earnings on bank-owned life insurance  471 461  502  612  329
Debit card fees  975 923  946  775  758
Correspondent banking fees  314 270  220  198  215
Other   1,686 1,469  1,482  941  922
Total noninterest income $ 23,489$ 32,017 $ 37,959 $ 28,626 $ 15,196
        
        
Salaries and employee benefits $24,847$30,446 $25,999 $21,304 $18,519
Occupancy and equipment expense  4,108 4,917  3,807  3,748  4,032
Professional and data processing fees  3,443 3,871  3,758  3,646  3,369
Post-acquisition compensation, transition and integration costs  - 25  (32) 70  151
Disposition costs  8 64  192  (83) 517
FDIC insurance, other insurance and regulatory fees  1,065 1,272  1,301  908  683
Loan/lease expense  300 465  403  339  228
Net cost of (income from) and gains/losses on operations of other real estate  39 (4) 16  (332) 13
Advertising and marketing  627 1,276  750  552  682
Bank service charges  523 523  488  501  504
Losses on liability extinguishment  - 1,457  1,874  429  147
Correspondent banking expense  200 205  205  212  216
Intangibles amortization  508 521  531  548  549
Goodwill impairment  - -  -  -  500
Loss on sale of subsidiary  - (147) 305  -  -
Other   1,560 1,473  1,241  1,288  1,313
Total noninterest expense $ 37,228$ 46,364 $ 40,838 $ 33,130 $ 31,423
        
Net income before income taxes $ 21,523$ 22,280 $ 21,360 $ 16,537 $ 13,112
Federal and state income tax expense  3,541 4,009  4,016  2,798  1,884
Net income  $ 17,982$ 18,271 $ 17,344 $ 13,739 $ 11,228
        
Basic EPS  $1.14$1.16 $1.10 $0.87 $0.71
Diluted EPS $1.12$1.14 $1.09 $0.86 $0.70
        
        
Weighted average common shares outstanding  15,803,643 15,775,596  15,767,152  15,747,056  15,796,796
Weighted average common and common equivalent shares outstanding  16,025,548 15,973,054  15,923,578  15,895,336  16,011,456
        
(1) Includes provision for credit losses for loans/leases totaling $6.0 million, HTM securities totaling ($9) thousand and OBS exposures totaling $729 thousand.
      Provision for credit losses only included provision for loans/leases for years prior to 2021.    



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
      
 As of and for the Quarter Ended
 March 31,December 31,September 30,June 30,March 31,
  2021  2020  2020  2020  2020 
      
 (dollars in thousands, except per share data)
      
COMMON SHARE DATA     
Common shares outstanding 15,843,732  15,805,711  15,792,357  15,790,611  15,773,736 
Book value per common share (1)$38.42 $37.57 $36.26 $35.21 $34.18 
Tangible book value per common share (Non-GAAP) (2)$33.06 $32.16 $30.82 $29.63 $28.56 
Closing stock price$47.22 $39.59 $27.41 $31.18 $27.07 
Market capitalization$748,141 $625,748 $432,869 $492,351 $426,995 
Market price / book value 122.90% 105.38% 75.60% 88.55% 79.20%
Market price / tangible book value 142.83% 123.09% 88.95% 105.23% 94.79%
Earnings per common share (basic) LTM (3)$4.27 $3.84 $3.69 $3.55 $3.54 
Price earnings ratio LTM (3)11.06 x 10.31 x 7.43 x 8.78 x 7.65 x 
TCE / TA (Non-GAAP) (4) 9.42% 9.08% 8.42% 8.48% 8.76%
      
      
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 
Beginning balance$593,793 $572,613 $556,020 $539,139 $535,351 
Cumulative effect from the adoption of ASU 2016-13 "CECL" (937) -  -  -  - 
Net income 17,982  18,271  17,344  13,739  11,228 
Other comprehensive income (loss), net of tax (1,751) 3,157  (614) 3,622  (3,691)
Common stock cash dividends declared (949) (947) (945) (945) (942)
Repurchase and cancellation of 100,932 shares of common stock as a result of a share repurchase program -  -  -  -  (3,780)
Other (5) 581  699  808  465  973 
Ending balance$ 608,719 $ 593,793 $ 572,613 $ 556,020 $ 539,139 
      
      
REGULATORY CAPITAL RATIOS (6):     
Total risk-based capital ratio 15.22% 14.95% 14.93% 13.71% 13.54%
Tier 1 risk-based capital ratio 11.61% 11.34% 11.25% 11.07% 11.16%
Tier 1 leverage capital ratio 10.10% 9.49% 9.21% 8.91% 10.19%
Common equity tier 1 ratio 10.83% 10.55% 10.44% 10.25% 10.31%
      
      
KEY PERFORMANCE RATIOS AND OTHER METRICS      
Return on average assets (annualized) 1.27% 1.25% 1.19% 0.95% 0.91%
Return on average total equity (annualized) 11.91% 12.43% 12.06% 9.88% 8.23%
Net interest margin 3.26% 3.25% 3.36% 3.14% 3.40%
Net interest margin (TEY) (Non-GAAP)(7) 3.43% 3.45% 3.51% 3.27% 3.56%
Efficiency ratio (Non-GAAP) (8) 56.87% 61.23% 49.48% 47.61% 59.40%
Gross loans and leases / total assets (9) 77.25% 74.81% 72.43% 74.01% 70.95%
Gross loans and leases / total deposits (9) 94.15% 92.43% 90.92% 95.18% 88.83%
Effective tax rate 16.45% 17.99% 18.80% 16.92% 14.37%
Full-time equivalent employees (10) 720  714  687  712  703 
      
      
AVERAGE BALANCES      
Assets$5,668,850 $5,842,299 $5,820,555 $5,800,164 $4,948,311 
Loans/leases 4,271,782  4,250,951  4,185,275  3,999,523  3,686,410 
Deposits 4,628,889  4,742,602  4,726,881  4,732,626  3,954,707 
Total stockholders' equity 604,012  588,042  575,061  556,047  545,548 
      
(1) Includes accumulated other comprehensive income (loss).    
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP). 
(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) Excludes assets held for sale as of March 31, 2020 and June 30, 2020.   
(10) Growth in full-time equivalents from September 30, 2020 to December 31, 2020 due to the addition of new positions created to build scale.
        Decrease from June 30, 2020 to September 30, 2020 due to sale of Bates Companies and interns employed only during the summer.
      



QCR Holdings, Inc.
Consolidated Financial Highlights
  (Unaudited)     
             
             
ANALYSIS OF NET INTEREST INCOME AND MARGIN           
             
  For the Quarter Ended
  March 31, 2021 December 31, 2020 March 31, 2020
  Average BalanceInterest Earned or PaidAverage Yield or Cost Average BalanceInterest Earned or PaidAverage Yield or Cost Average BalanceInterest Earned or PaidAverage Yield or Cost
             
  (dollars in thousands)
             
Fed funds sold $1,847$10.05% $1,216$10.08% $5,324$181.36%
Interest-bearing deposits at financial institutions 116,446 370.13%  279,024 820.12%  128,612 3611.13%
Securities (1)  810,059 7,0503.48%  795,696 7,2073.62%  619,307 6,0803.95%
Restricted investment securities 18,064 2194.84%  18,790 2364.92%  21,365 2584.86%
Loans (1)  4,271,782 42,5254.04%  4,250,951 44,9564.21%  3,686,410 44,0564.81%
Total earning assets (1)$5,218,198$49,8323.86% $5,345,677$52,4823.91% $4,461,018$50,7734.58%
             
Interest-bearing deposits$2,981,306$1,9860.27% $3,033,119$2,0600.27% $2,379,635$5,3280.90%
Time deposits  448,035 1,4411.30%  530,813 1,7521.31%  785,135 3,8791.99%
Short-term borrowings 7,141 10.07%  19,115 30.17%  19,315 641.33%
Federal Home Loan Bank advances 13,078 90.28%  33,207 800.94%  111,407 4491.62%
Subordinated debentures 118,706 1,5945.37%  118,612 1,6785.66%  68,418 9945.84%
Junior subordinated debentures 38,007 5595.88%  37,969 5715.88%  37,853 5716.07%
Total interest-bearing liabilities$3,606,273$5,5900.63% $3,772,835$6,1440.64% $3,401,763$11,2851.33%
             
Net interest income (1) $44,242   $46,338   $39,488 
Net interest margin (2)  3.26%   3.25%   3.40%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)  3.43%   3.45%   3.56%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) 3.40%   3.37%   3.50%
             
(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 Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
      
 As of
 March 31,December 31,September 30,June 30,March 31,
 20212020 2020 2020 2020 
      
 (dollars in thousands, except per share data)
      
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES     
Beginning balance$84,376 $79,582 $60,827 $42,233 $36,001 
Adoption of ASU 2016-13 "CECL" - Day 1 adjustment (8,102) -  -  -  - 
Provision charged to expense 5,993  7,080  20,342  19,915  8,367 
Loans/leases charged off (713) (2,779) (1,819) (1,450) (2,335)
Recoveries on loans/leases previously charged off 277  493  232  129  200 
Ending balance$ 81,831 $ 84,376 $ 79,582 $ 60,827 $ 42,233 
      
      
NONPERFORMING ASSETS      
Nonaccrual loans/leases$13,863 $13,940 $17,597 $12,099 $11,628 
Accruing loans/leases past due 90 days or more -  3  86  99  1,419 
Total nonperforming loans/leases 13,863  13,943  17,683  12,198  13,047 
Other real estate owned 173  20  125  157  3,298 
Other repossessed assets 50  135  110  25  45 
Total nonperforming assets$ 14,086 $ 14,098 $ 17,918 $ 12,380 $ 16,390 
      
      
ASSET QUALITY RATIOS     
Nonperforming assets / total assets (1) 0.25% 0.25% 0.31% 0.22% 0.31%
ACL for loans and leases / total loans/leases (2) 1.88% 1.98% 1.87% 1.47% 1.14%
ACL for loans and leases / nonperforming loans/leases (2) 590.28% 605.15% 450.05% 498.66% 323.70%
Net charge-offs as a % of average loans/leases 0.01% 0.05% 0.04% 0.03% 0.06%
      
      
      
INTERNALLY ASSIGNED RISK RATING (3)     
Special mention (rating 6)$53,466 $71,482 $79,587 $104,608 $34,738 
Substandard (rating 7) 84,982  66,081  70,409  39,855  36,612 
Doubtful (rating 8) -  -  -  -  - 
 $138,448 $137,563 $149,996 $144,463 $71,350 
      
Criticized loans (4)$138,448 $137,563 $149,996 $144,463 $71,350 
Classified loans (5) 84,982  66,081  70,409  39,855  36,612 
      
Criticized loans as a % of total loans/leases 3.17% 3.24% 3.53% 3.49% 1.93%
Classified loans as a % of total loans/leases 1.95% 1.55% 1.66% 0.96% 0.99%
      
(1) Excludes assets held for sale as of March 31, 2020 and June 30, 2020.    
(2) Prior to adoption of ASU 2016-13 "CECL", upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance and
     impacts this ratio. There have been no acquisitions since adopting ASU 2016-13 "CECL", which requires an allowance to be established on acquired loans.
(3) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.
(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.
(5) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
        
        
   For the Quarter Ended
   March 31, December 31,March 31,
 SELECT FINANCIAL DATA - SUBSIDIARIES  2021   2020   2020 
        
   (dollars in thousands)
        
 TOTAL ASSETS      
 Quad City Bank and Trust (1) $2,101,634  $2,149,469  $1,914,785 
 m2 Equipment Finance, LLC  245,842   243,090   237,198 
 Cedar Rapids Bank and Trust  1,847,070   1,952,308   1,719,773 
 Community State Bank - Ankeny  1,041,861   1,000,670   863,903 
 Springfield First Community Bank  818,605   779,955   708,736 
        
 TOTAL DEPOSITS      
 Quad City Bank and Trust (1) $1,841,518  $1,866,635  $1,678,889 
 Cedar Rapids Bank and Trust  1,362,927   1,378,108   1,247,989 
 Community State Bank - Ankeny  912,419   875,400   743,645 
 Springfield First Community Bank  602,274   569,036   524,420 
        
 TOTAL LOANS & LEASES      
 Quad City Bank and Trust (1) $1,568,131  $1,556,762  $1,338,915 
 m2 Equipment Finance, LLC  249,478   244,325   235,144 
 Cedar Rapids Bank and Trust  1,382,336   1,362,056   1,159,453 
 Community State Bank - Ankeny  743,892   707,681   634,253 
 Springfield First Community Bank  666,692   624,629   572,046 
        
 TOTAL LOANS & LEASES / TOTAL DEPOSITS      
 Quad City Bank and Trust (1)  85%  83%  80%
 Cedar Rapids Bank and Trust  101%  99%  93%
 Community State Bank - Ankeny  82%  81%  85%
 Springfield First Community Bank  111%  110%  109%
        
        
 TOTAL LOANS & LEASES / TOTAL ASSETS      
 Quad City Bank and Trust (1)  75%  72%  70%
 Cedar Rapids Bank and Trust  75%  70%  67%
 Community State Bank - Ankeny  71%  71%  73%
 Springfield First Community Bank  81%  80%  81%
        
 ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES      
 Quad City Bank and Trust (1)  1.98%  1.95%  1.17%
 m2 Equipment Finance, LLC  3.73%  2.63%  1.50%
 Cedar Rapids Bank and Trust (2)  2.05%  2.35%  1.35%
 Community State Bank - Ankeny (2)  1.74%  2.02%  1.21%
 Springfield First Community Bank (2)  1.43%  1.23%  0.56%
        
 RETURN ON AVERAGE ASSETS       
 Quad City Bank and Trust (1)  1.35%  1.52%  1.33%
 Cedar Rapids Bank and Trust  2.45%  0.59%  1.60%
 Community State Bank - Ankeny  0.81%  3.25%  0.50%
 Springfield First Community Bank  1.16%  3.02%  1.29%
        
 NET INTEREST MARGIN PERCENTAGE (3)      
 Quad City Bank and Trust (1)  3.20%  3.19%  3.68%
 Cedar Rapids Bank and Trust (4)  3.55%  3.51%  3.43%
 Community State Bank - Ankeny (5)  3.70%  3.77%  3.91%
 Springfield First Community Bank (6)  3.55%  4.03%  3.83%
        
 ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET    
 INTEREST MARGIN, NET      
 Cedar Rapids Bank and Trust $13  $103  $49 
 Community State Bank - Ankeny  317   132   64 
 Springfield First Community Bank  211   880   552 
 QCR Holdings, Inc. (7)  (37)  (38)  (40)
        
(1)Quad City Bank and Trust figures 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)Prior to adoption of ASU 2016-13 "CECL", upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance and impacts this ratio. There have been no acquisitions since adopting ASU 2016-13 "CECL", which requires an allowance to be established on acquired loans.
(3)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.
(4)Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.55% for the quarter ended March 31, 2021, 3.47% for the quarter ended December 31, 2020 and 3.42% for the quarter ended March 31, 2020.
(5)Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.54% for the quarter ended March 31, 2021, 3.69% for the quarter ended December 31, 2020 and 3.86% for the quarter ended March 31, 2020.
(6)Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.49% for the quarter ended March 31, 2021, 3.59% for the quarter ended December 31, 2020 and 4.52% for the quarter ended March 31, 2020.
(7)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 Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
           
  As of
  March 31, December 31, September 30, June 30, March 31,
GAAP TO NON-GAAP RECONCILIATIONS  2021   2020   2020   2020   2020 
                     
  (dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)          
           
Stockholders' equity (GAAP) $608,719  $593,793  $572,613  $556,020  $539,139 
Less: Intangible assets  84,939   85,447   85,968   88,120   88,669 
Tangible common equity (non-GAAP) $523,780  $508,346  $486,645  $467,900  $450,470 
           
Total assets (GAAP) $5,645,147  $5,682,797  $5,864,560  $5,604,761  $5,232,075 
Less: Intangible assets  84,939   85,447   85,968   88,120   88,669 
Tangible assets (non-GAAP) $5,560,208  $5,597,350  $5,778,592  $5,516,641  $5,143,406 
           
Tangible common equity to tangible assets ratio (non-GAAP)  9.42%  9.08%  8.42%  8.48%  8.76%
           
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1)          
           
Stockholder's equity (GAAP) $608,719  $593,793  $572,613  $556,020  $539,139 
Less: PPP loan interest income (post-tax) (2)  9,479   7,691   4,934   2,085   - 
Less: Intangible assets  84,939   85,447   85,968   88,120   88,669 
Tangible common equity, excluding PPP loan income (non-GAAP) $514,301  $500,655  $481,711  $465,815  $450,470 
           
Total assets (GAAP) $5,645,147  $5,682,797  $5,864,560  $5,604,761  $5,232,075 
Less: PPP loans  243,860   273,146   357,506   358,052   - 
Less: Intangible assets  84,939   85,447   85,968   88,120   88,669 
Tangible assets, excluding PPP loans (non-GAAP) $5,316,348  $5,324,204  $5,421,086  $5,158,589  $5,143,406 
           
Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP)  9.67%  9.40%  8.89%  9.03%  8.76%
           
(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.          
(2) PPP interest income (post-tax) is calculated using an estimated effective tax rate of 21%.      
           



QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
           
GAAP TO NON-GAAP RECONCILIATIONS For the Quarter Ended
  March 31, December 31, September 30, June 30, March 31,
ADJUSTED NET INCOME (1)  2021   2020   2020   2020   2020 
                     
                     
  (dollars in thousands, except per share data)
           
Net income (GAAP) $17,982  $18,271  $17,344  $13,739  $11,228 
           
Less non-core items (post-tax) (2):          
Income:          
Securities gains(losses), net  -   487   1,424   51   - 
Mark to market gains (losses) on derivatives, net  129   -   -   -   - 
Loss on syndicated loan  -   (210)  -   -   - 
Total non-core income (non-GAAP) $129  $277  $1,424  $51  $- 
           
Expense:          
Losses on debt extinguishment, net $-  $1,151  $1,480  $339  $116 
Goodwill impairment  -   -   -   -   500 
Disposition costs  7   51   152   (66)  408 
Acquisition costs (4)  -   -   -   -   - 
Separation agreement  734   -   -   -   - 
Post-acquisition compensation, transition and integration costs  -   20   (25)  55   119 
Loss on sale of subsidiary  -   (102)  212   -   - 
Total non-core expense (non-GAAP) $741  $1,119  $1,819  $329  $1,143 
                     
Adjusted net income (non-GAAP) (1) $ 18,594  $ 19,113  $ 17,739  $ 14,016  $ 12,372 
           
PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)          
Net income (GAAP) $17,982  $18,271  $17,344  $13,739  $11,228 
Less: Non-core income not tax-effected  164   351   1,802   65   - 
Plus: Non-core expense not tax-effected  937   1,399   2,339   416   1,315 
          Provision expense  6,713   7,080   20,342   19,915   8,367 
         Federal and state income tax expense  3,541   4,009   4,016   2,798   1,884 
Pre-provision/pre-tax adjusted income (non-GAAP) (1) $ 29,009  $ 30,408  $ 42,239  $ 36,803  $ 22,794 
           
PRE-PROVISION/PRE-TAX ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)          
           
Pre-provision/pre-tax adjusted income (non-GAAP) $29,009  $30,408  $42,239  $36,803  $22,794 
Average Assets $5,668,850  $5,842,299  $5,820,555  $5,800,164  $4,948,311 
Pre-provision/pre-tax adjusted return on average assets (non-GAAP)  2.05%  2.08%  2.90%  2.54%  1.84%
           
ADJUSTED EARNINGS PER COMMON SHARE (1)          
           
Adjusted net income (non-GAAP) (from above) $18,594  $19,113  $17,739  $14,016  $12,372 
           
Weighted average common shares outstanding  15,803,643   15,775,596   15,767,152   15,747,056   15,796,796 
Weighted average common and common equivalent shares outstanding  16,025,548   15,973,054   15,923,578   15,895,336   16,011,456 
           
Adjusted earnings per common share (non-GAAP):          
Basic $ 1.18  $ 1.21  $ 1.13  $ 0.89  $ 0.78 
Diluted $ 1.16  $ 1.20  $ 1.11  $ 0.88  $ 0.77 
           
ADJUSTED RETURN ON AVERAGE ASSETS (1)          
           
Adjusted net income (non-GAAP) (from above) $18,594  $19,113  $17,739  $14,016  $12,372 
Average Assets $5,668,850  $5,842,299  $5,820,555  $5,800,164  $4,948,311 
Adjusted return on average assets (annualized) (non-GAAP)  1.31%  1.31%  1.22%  0.97%  1.00%
           
NET INTEREST MARGIN (TEY) (4)          
           
Net interest income (GAAP) $41,975  $43,707  $44,581  $40,948  $37,698 
Plus: Tax equivalent adjustment (3)  2,267   2,631   1,942   1,728   1,790 
Net interest income - tax equivalent (Non-GAAP) $44,242  $46,338  $46,523  $42,676  $39,488 
Less: Acquisition accounting net accretion  504   1,077   833   736   625 
           
Adjusted net interest income $43,738  $45,261  $45,690  $41,940  $38,863 
Average earning assets $5,218,198  $5,345,677  $5,278,298  $5,252,663  $4,461,018 
           
Net interest margin (GAAP)  3.26%  3.25%  3.36%  3.14%  3.40%
Net interest margin (TEY) (Non-GAAP)  3.43%  3.45%  3.51%  3.27%  3.56%
Adjusted net interest margin (TEY) (Non-GAAP)  3.40%  3.37%  3.44%  3.21%  3.50%
           
EFFICIENCY RATIO (5)          
           
Noninterest expense (GAAP) $37,228  $46,364  $40,838  $33,122  $31,415 
Net interest income (GAAP) $41,975  $43,707  $44,581  $40,948  $37,698 
Noninterest income (GAAP)  23,489   32,017   37,959   28,626   15,196 
Total income $65,464  $75,724  $82,540  $69,574  $52,894 
           
Efficiency ratio (noninterest expense/total income) (Non-GAAP)  56.87%  61.23%  49.48%  47.61%  59.39%
           
ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES TO TOTAL LOANS/LEASES, EXCLUDING PPP LOANS (6)          
           
Allowance for credit losses on loans and leases $81,831  $84,376  $79,582  $60,827  $42,233 
           
Total loans and leases $4,361,051  $4,251,129  $4,247,977  $4,140,259  $3,704,668 
Less: PPP loans  243,860   273,146   357,506   358,052   - 
Total loans and leases, excluding PPP loans $4,117,191  $3,977,983  $3,890,471  $3,782,207  $3,704,668 
           
Allowance for credit losses on loans and leases to total loans and leases, excluding PPP loans  1.99%  2.12%  2.05%  1.61%  1.14%
           
           
LOAN GROWTH ANNUALIZED, EXCLUDING PPP LOANS          
Total loans and leases $4,361,051  $4,251,129  $4,247,977  $4,140,259  $3,704,668 
Less: PPP loans  243,860   273,146   357,506   358,052   - 
Total loans and leases, excluding PPP loans $4,117,191  $3,977,983  $3,890,471  $3,782,207  $3,704,668 
           
Loan growth annualized, excluding PPP loans  14.00%  9.00%  11.45%  8.37%  1.57%
           
(1) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are
non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude 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, this non-GAAP measure is reconciled to net income, which is
the most directly comparable GAAP financial measure.          
(2) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain/loss on sale of assets and
      liabilities of subsidiary has an estimated effective tax rate of 30.5%.          
(3) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21%.    
(4) 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.  
(5) 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.          
(6) Allowance for credit losses on loans and leases to total loans and leases, excluding PPP loans is a non-GAAP measure. The Company's management utilizes this ratio to remove from the allowance
      calculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans have no allowance for credit loss allocation.

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