By Ann Heffron, CFA, CPA

QCR Holdings, Inc. (QCRH) posted 2013 first quarter diluted EPS of $0.49, up a penny from year-ago EPS and flat with the fourth quarter.

Diluted EPS came in $0.08 below our $0.57 per share estimate, due to several unexpected charges, which cost the Company about $0.09 per share on an aftertax basis, or roughly the same amount as the shortfall from our estimate.

Compared to the year-ago quarter, first quarter results were boosted by a gain in noninterest income on the back of strong 17%-plus increases in trust department fees and investment management & advisory fees and an almost 700% surge in gains on SBA loan sales. These were partly offset by an 8% rise in compensation expense, a 36% jump in the loan loss provision from an exceptionally low level last year, and a $258,000 negative swing in losses on other real estate owned.

Nonperforming loans tumbled during the quarter by $5.7 million, or a whopping 22%, to $19.7 million as a slew of restructured loans returned to fully performing status.

For 2013, we are reducing our 2013 diluted EPS estimate by a dime to $2.00 from $$2.10 due to the shortfall in the first quarter caused by $614,000 in one-time costs ($0.09 per share on an after tax basis) from the CNB acquisition and credit card business sale.

Our 2013 diluted EPS estimate corresponds to an 8% gain over 2012’s $1.85. Our initial estimate for 2014 is for an 8% advance in diluted EPS to $2.15.

We note that the CNB acquisition is on track to close by May 13, as previously announced, and our projections include CNB from mid-May.

QCR Holdings, Inc. (QCRH or the Company) is a multibank holding company, which was founded in 1993 and is headquartered in Moline, Illinois, with $2.1 billion in total assets at March 31, 2013 and 10 offices. QCRH provides a broad range of business and retail lending products and investment services through three wholly owned, full-service banking subsidiaries that are located in Illinois and Iowa. These subsidiaries include Quad City Bank and Trust Company (QCBT), based in Bettendorf, Iowa; Cedar Rapids Bank and Trust Company (CRBT), based in Cedar Rapids, Iowa; and Rockford Bank and Trust Company (RB&T), based in Rockford, Illinois.


To view a free copy of our most recent research report on QCRH, visit Ann Heffron's page at Zacks Small-Cap Research .