Rising earnings estimates on the back of decent second quarter
results - including a 4.8% earnings surprise - helped
QCR Holdings Inc.
) achieve a Zacks #1 Rank (Strong Buy) on September 22. Moreover,
the bank has delivered two positive earnings surprises in the last
four quarters with an average beat of 44.7%.
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With a solid year-to-date return of 58.6%, this stock offers an
attractive investment opportunity.
The Rank Driver
Better than expected second-quarter earnings along with improving
credit quality and robust asset position were the primary rank
drivers for this stock.
On July 23, QCR Holdings reported its second quarter earnings per
share of 44 cents, beating the Zacks Consensus Estimate of 42 cents
by 4.8%. Strong results for the quarter were primarily aided by
higher net interest income partly offset by higher operating
Net Interest income came in at $14.5 million, up nearly 4.0% from
the prior-year quarter. Net interest margin was 3.16% as against
3.21% in the year-ago period.
However, non-interest income decreased 2.5% year over year to $4.1
million. The fall was mainly driven by lower trust department fees
and deposit service fees.
Operating expenses increased 4.4% from the prior-year quarter to
$13.1 million. The hike was driven by higher salaries and benefits
as well as other expenses.
Provisions for loan/lease losses totaled $1.0 million, down 37.3%
from the prior-year quarter. Net charge offs fell 42.6% on a
year-over year basis to $1.9 million.
Total Assets summed to $2.04 billion, rising 8.8% on a
year-over-year basis. As of June 30, 2012, QCR Holdings Tier 1
risk-based capital ratio was 11.40% and total capital ratio was
13.00%. Tier 1 leverage capital ratio stood at 8.2%.
Earnings Estimate Revisions
The Zacks Consensus Estimate for 2012 increased 3.9% to $1.87 per
share based on 1 out of 2 upward revisions over the last 30 days.
The current estimate implies a year-over-year growth of 102.7%.
For 2013, the Zacks Consensus Estimate moved up by 2.5% to $2.03
per share over the last 60 days.
QCR Holdings currently trades at a forward P/E of 7.7x, a 31.8%
discount to the peer group average of 11.4x. On a price-to-book
basis, the shares are trading at 0.50x, a 56.5% discount to the
peer group average of 1.15x.
National Bank has a trailing 12-month return on equity (ROE) of
8.8% compared with the peer group average of 9.3%.
About the Company
QCR Holdings, Inc. is the bank holding company of Quad City Bank
and Trust Company. The Bank provides full-service commercial and
consumer banking, and trust and asset management services for the
Quad Cities, Cedar Rapids, and Rockford communities. It is
headquartered in Moline, Illinois. The company has a market
capitalization of roughly $70.09 million.
Other Zacks #1 Rank Financial companies include
Republic First Bancorp Inc.
Pacific Continental Corp.