Zacks Investment Research downgraded shares of QCR Holdings, Inc. (QCRH) from OUTPERFORM to NEUTRAL on February 06, 2013, with a target price of $17.50.
QCR Holdings, Inc. (QCRH) posted fourth quarter diluted EPS of $0.49, up 40% from the $0.35 EPS reported last year. Compared to the year-ago quarter, fourth quarter results were boosted by a gain in noninterest income on the back of strong 20%-plus increases in trust department fees and investment management & advisory fees, a one-fourth reduction in the loan loss provision, an almost 4-point drop in the effective tax rate to 24.4%, and preferred dividends that were down $0.2 million, or 21%, from a year ago, reflecting changes in QCRH's capital structure. Diluted EPS came in $0.02 above our $0.47 per share estimate, principally the result of an effective tax rate of 24.4% that was lower than our 25.0% estimate and a reduction in average diluted shares outstanding compared to our expectation of a slight increase. For the year, QCRH earned $9.1 million, or $1.85 per diluted share, up 63% from the $5.6 million, or $1.17 per diluted share in 2011, which excludes a one-time discount accretion on the redemption of the Series D preferred stock. Nonperforming loans rose modestly during the quarter by $1.5 million, or 6%, to $25.4 million as a few problem loans were restructured, while foreclosed assets dropped $0.9 million, or 19%, to $4.2 million, due to the sale of several properties. As a percentage of total loans and OREO, total nonperforming assets fell 4 basis points sequentially to 2.29% from 2.33% at the end of the third quarter and 106 basis points year over year from 3.35%. For 2013, we are maintaining our diluted EPS estimate at $2.05, up 11% over 2012. We are reducing our recommendation to Neutral from Outperform, due solely to valuation, and raising our twelve-month price target to $17.50.
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