Cedar Rapids Bank & Trust’s headquarters in Cedar Rapids in an undated photo. PHOTO VANTAGE ARCHITECTS
By CBJ Staff
The parent company of Cedar Rapids Bank & Trust reported lower earnings in the first quarter, as higher provisions for loan losses due to the COVID-19 pandemic and one-time charges related to the sale of two businesses weighed on results.
QCR Holdings reported earnings of 70 cents per share on net income of $15.9 million, down from 99 cents per share and net income of $15.9 million in the fourth quarter.
The COVID-19 crisis contributed to lower loan growth and a $7.4 million increase in provision for loan losses. CEO Larry Helling said overall credit quality remained strong and the QCR remained solidly profitable.
“I am proud of our first-quarter financial performance and our healthy underlying fundamentals,” Mr. Helling said in a news release. “We remain steadfast in our focus on expanding our presence in the communities we serve across all our charters and providing best in class service through operational excellence, and we believe that we are well positioned to deal with the challenges in front of us.”
While unable to predict the total impact of the pandemic, Mr. Helling said each of QCR’s banks “is well capitalized, and is dedicated to serving our clients as long as this crisis lasts.”
QCR banks responded to the crisis by offering borrowers a Loan Relief Program and participating in the SBA Paycheck Protection Program (PPP). A total of 1,935 clients were added to the Loan Relief Program, with loans totaling $439 million. QCR banks received SBA approvals for 1,300 in PPP loans totaling $333 million.
The recent sale of Rockford Bank & Trust to Illinois Bank & Trust and the pending sale of its investments business, Bates Companies, factored heavily in both quarters. In the fourth quarter, QCR recorded a $12.3 million gain on the Rockford Bank & Trust sale, along with $3.3 million in disposition costs. It also recorded a $3 million impairment charge related to the pending sale of Bates Companies, and $1.9 million of post-acquisition compensation, transition and integration costs.
In the first quarter, QCR’s results included $517,000 in disposition costs for Rockford Bank & Trust, and a $500,000 goodwill impairment charge related to the sale of Bates Companies, along with $151,000 of compensation, transition and integration costs.
Illinois Bank & Trust is part of Dubuque-based Heartland Financial. CBJ