QCR Holdings, Inc. to Discontinue Offering New Loans and Leases Through m2 Equipment Finance Subsidiary
QCR Holdings (NASDAQ: QCRH) has announced the discontinuation of new loans and leases through its equipment finance subsidiary, m2 Equipment Finance. This strategic decision aims to improve profitability, increase liquidity, reduce credit losses, and allow for capital allocation to assets with higher risk-adjusted returns. m2 will continue servicing its existing $360 million portfolio with a reduced staff, expected to amortize over the next 3 years.
The company anticipates one-time restructuring expenses of $2.1 million and a goodwill write-down of $0.4 million in Q3 2024. However, QCRH expects to recover these costs within two quarters. CEO Larry J. Helling emphasized that this move will enable the company to focus on business units with greater potential for building client relationships and deposit gathering.
QCR Holdings (NASDAQ: QCRH) ha annunciato l'interruzione di nuovi prestiti e leasing attraverso la sua controllata di finanziamento per attrezzature, m2 Equipment Finance. Questa decisione strategica ha l'obiettivo di migliorare la redditività, aumentare la liquidità, ridurre le perdite creditizie e consentire l'allocazione di capitali verso attività con rendimenti aggiustati per il rischio più elevati. m2 continuerà a gestire il suo attuale portafoglio di 360 milioni di dollari con un personale ridotto, previsto per ammortizzare nel corso dei prossimi 3 anni.
L'azienda prevede spese di ristrutturazione una tantum di 2,1 milioni di dollari e un depreciamento del goodwill di 0,4 milioni di dollari nel terzo trimestre del 2024. Tuttavia, QCRH si aspetta di recuperare questi costi entro due trimestri. Il CEO Larry J. Helling ha sottolineato che questa mossa permetterà all'azienda di concentrarsi su unità di business con un maggiore potenziale per costruire relazioni con i clienti e aumentare i depositi.
QCR Holdings (NASDAQ: QCRH) ha anunciado la interrupción de nuevos préstamos y arrendamientos a través de su filial de financiamiento de equipos, m2 Equipment Finance. Esta decisión estratégica tiene como objetivo mejorar la rentabilidad, aumentar la liquidez, reducir las pérdidas crediticias y permitir la asignación de capital a activos con mayores rendimientos ajustados al riesgo. m2 seguirá atendiendo su actual portafolio de 360 millones de dólares con un personal reducido, que se espera amortizar en los próximos 3 años.
La empresa anticipa gastos de reestructuración únicos de 2,1 millones de dólares y una reducción del goodwill de 0,4 millones de dólares en el tercer trimestre de 2024. Sin embargo, QCRH espera recuperar estos costos dentro de dos trimestres. El CEO Larry J. Helling enfatizó que este movimiento permitirá a la empresa centrarse en unidades de negocio con un mayor potencial para construir relaciones con los clientes y aumentar la captación de depósitos.
QCR 홀딩스 (NASDAQ: QCRH)가 장비 금융 자회사인 m2 Equipment Finance를 통해 신규 대출 및 리스를 중단한다고 발표했습니다. 이 전략적 결정의 목표는 수익성 개선, 유동성 증가, 신용 손실 감소 및 위험 조정된 수익이 더 높은 자산으로의 자본 배분을 가능하게 하는 것입니다. m2는 기존의 3억 6천만 달러 포트폴리오를 감축된 인력으로 계속 관리할 예정이며, 향후 3년에 걸쳐 상환할 계획입니다.
회사는 2024년 3분기에 210만 달러의 일회성 구조조정 비용과 40만 달러의 goodwill 감액을 예상하고 있습니다. 그러나 QCRH는 이 비용을 두 분기 내에 회수할 것으로 예상하고 있습니다. CEO인 래리 J. 헬링은 이번 조치가 고객 관계 구축과 예금 확보에 더 큰 잠재력을 가진 사업 부문에 집중할 수 있게 해줄 것이라고 강조했습니다.
QCR Holdings (NASDAQ: QCRH) a annoncé l'arrêt de nouveaux prêts et baux via sa filiale de financement d'équipements, m2 Equipment Finance. Cette décision stratégique vise à améliorer la rentabilité, accroître la liquidité, réduire les pertes de crédit et permettre une allocation de capital vers des actifs offrant des rendements ajustés au risque plus élevés. m2 continuera de gérer son portefeuille actuel de 360 millions de dollars avec un personnel réduit, prévu pour amortir au cours des 3 prochaines années.
L'entreprise anticipe des coûts de restructuration uniques de 2,1 millions de dollars et une dépréciation du goodwill de 0,4 million de dollars au troisième trimestre 2024. Toutefois, QCRH s'attend à récupérer ces coûts dans un délai de deux trimestres. Le PDG Larry J. Helling a souligné que cette démarche permettra à l'entreprise de se concentrer sur des unités commerciales présentant un plus grand potentiel pour établir des relations avec les clients et accroître les dépôts.
QCR Holdings (NASDAQ: QCRH) hat die Einstellung neuer Kredite und Leasingverträge über ihre Tochtergesellschaft für Gerätefinanzierung, m2 Equipment Finance, bekannt gegeben. Diese strategische Entscheidung zielt darauf ab, die Rentabilität zu verbessern, die Liquidität zu erhöhen, Kreditverluste zu reduzieren und eine Kapitalallokation auf Vermögenswerte mit höheren risikoadjustierten Renditen zu ermöglichen. m2 wird sein bestehendes Portfolio von 360 Millionen Dollar mit reduziertem Personal weiter verwalten, das in den nächsten 3 Jahren amortisiert werden soll.
Das Unternehmen erwartet einmalige Restrukturierungskosten von 2,1 Millionen Dollar und eine Wertminderung des Goodwills von 0,4 Millionen Dollar im dritten Quartal 2024. QCRH rechnet jedoch damit, diese Kosten innerhalb von zwei Quartalen zurückzuerhalten. CEO Larry J. Helling betonte, dass dieser Schritt es dem Unternehmen ermöglichen wird, sich auf Geschäftseinheiten mit größerem Potenzial zur Aufbau von Kundenbeziehungen und zur Einlagegewinnung zu konzentrieren.
- Expected improvement in profitability and liquidity
- Anticipated reduction in credit losses
- Reallocation of capital to assets with higher risk-adjusted returns
- Projected recovery of one-time charges within two quarters
- Continued servicing of existing $360 million equipment finance portfolio
- Discontinuation of new loans and leases through m2 Equipment Finance subsidiary
- One-time restructuring expenses of $2.1 million in Q3 2024
- Goodwill write-down of $0.4 million in Q3 2024
- Reduction in staff at m2 Equipment Finance
This strategic move by QCR Holdings signals a shift in focus towards more profitable and liquid assets. The decision to discontinue m2 Equipment Finance's new loan offerings is likely to have a positive impact on the company's financial health. Here's why:
- Improved profitability and liquidity
- Reduced credit losses
- Reallocation of capital to higher risk-adjusted return assets
- Focus on business units with greater deposit gathering potential
The
QCR Holdings' decision reflects broader market dynamics in the equipment finance sector. The company's statement that m2 would not achieve expected returns long-term suggests increased competition and margin pressure in this niche. This move aligns with industry trends of banks streamlining operations and focusing on core competencies.
By redirecting resources to business units with greater deposit-gathering potential, QCR is adapting to the current high-interest rate environment where deposits are crucial. This strategic pivot could enhance the company's competitive position in its primary banking markets, potentially leading to improved market share and customer retention in key areas.
QCR Holdings' decision to discontinue new loans through m2 Equipment Finance is a prudent risk management move. By exiting this business line, the company is:
- Reducing exposure to potential credit losses in the equipment finance sector
- Improving its risk profile by focusing on assets with higher risk-adjusted returns
- Enhancing liquidity, which provides a buffer against market uncertainties
The gradual wind-down of the existing
MOLINE, ill., Sept. 05, 2024 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) announced the decision to discontinue offering new loans and leases through its equipment finance business, m2 Equipment Finance, LLC (“m2”), located in Waukesha, WI. m2 was acquired by the Company in 2005 and has provided equipment financing solutions to commercial borrowers since its founding in 1998.
“We expect that this change will improve our profitability, increase liquidity, reduce our credit losses and allow the Company to allocate capital to assets with higher risk-adjusted returns. We will focus our efforts on business units with more opportunity to build client relationships with greater deposit gathering potential,” said Larry J. Helling, the Company’s Chief Executive Officer.
m2 will continue to service its existing
“While m2 has been an important contributor to our company over the past 19 years, market dynamics have continued to evolve, and it became clear that m2 would not achieve our expected returns over the long term. We are extremely grateful to our m2 colleagues for their dedication to serving clients and their contribution to the overall success of QCRH,” added Mr. Helling.
About Us
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks, Quad City Bank & Trust Company, Cedar Rapids Bank & Trust Company, Community State Bank and Guaranty Bank. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2024, the Company had
Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economies (including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business as a result of the upcoming 2024 presidential election or any changes in response to failures of other banks; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xixi) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.
Contact:
Todd A. Gipple
President and Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com
FAQ
Why is QCR Holdings (QCRH) discontinuing new loans and leases through m2 Equipment Finance?
What financial impact will the discontinuation of m2 Equipment Finance have on QCRH?
What will happen to the existing m2 Equipment Finance portfolio after QCRH's decision?
When did QCR Holdings (QCRH) acquire m2 Equipment Finance?
