QCR Holdings, Inc. – Value Analysis (NASDAQ:QCRH) : December 4, 2017

Capitalcube gives QCR Holdings, Inc. a score of 71.

Our analysis is based on comparing QCR Holdings, Inc. with the following peers – Enterprise Financial Services Corp, West Bancorporation, Inc., MidWestOne Financial Group, Inc., Ames National Corporation, Hawthorn Bancshares, Inc., Great Southern Bancorp, Inc., Commerce Bancshares, Inc., UMB Financial Corporation, Guaranty Federal Bancshares, Inc. and BNCCorp, Inc. (EFSC-US, WTBA-US, MOFG-US, ATLO-US, HWBK-US, GSBC-US, CBSH-US, UMBF-US, GFED-US and BNCC-US).

Fundamental Overview

QCR Holdings, Inc. has a fundamental score of 71 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It currently trades at a Price/Book ratio of (1.99).
  • QCRH-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • QCRH-US‘s relative capital efficiency and net profit margins are both around the median level.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, QCRH-US‘s return on equity has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • While QCRH-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company is likely overinvesting in a business with only median returns.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 80.33% is around peer median suggesting that QCRH-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, QCRH-US‘s pre-tax margin of 31.24% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 19.67% is around peer median. In addition, QCRH-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 61.59x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

QCR Holdings, Inc. operates as a multi-bank holding company, which provides commercial banking services. Its principal business consists of deposits and investing those deposits in loans or leases and securities. It operates through the following segments: Commercial Banking, Wealth Management, and All Other. The Commercial Banking segment is geographically divided by markets into the secondary segments which are the three subsidiary banks wholly-owned by the company: Quad City Bank & Trust Co., Cedar Rapids Bank & Trust Co. and Rockford Bank & Trust Co. These subsidiaries offers similar products and services, but are managed separately due to different pricing, product demand, and consumer markets. The Wealth Management segment represents the trust and asset management and investment management and advisory services offered at the company’s three subsidiary banks. The All Other segment includes the operations of all other consolidated subsidiaries and defined operating segments that fall below the segment reporting thresholds. This segment includes the corporate operations of the parent company and the real estate holding operations. The company was founded by Douglas M. Hultquist and Michael A. Bauer in February 1993 and is headquartered in Moline, IL.