EPS of $0.86 Driven by Record Pre-Provision/Pre-Tax Adjusted Net Income

Second Quarter 2020 Highlights

• Net income of $13.7 million, or $0.86 per diluted share
• Adjusted net income (non-GAAP) of $14.0 million, or $0.88 per diluted share
• Noninterest income of $28.6 million
• Net interest margin was stable, excluding the impact of excess liquidity
• Record pre-provision, pre-tax adjusted net income (non-GAAP) of $36.8 million
• Pre-provision, pre-tax adjusted ROAA (non-GAAP) of 2.54%
• Provision expense of $19.9 million for the quarter, increasing ALLL by 33 bps to 1.47%
• Nonperforming assets to total assets of 0.24%, improving 8 basis points from the prior quarter
• Annualized core loan and lease growth (non-GAAP) of 8.4% for the quarter, excluding SBA Paycheck Protection Program (“PPP”) loans
• Annualized deposit growth of 17.2% for the quarter
• PPP loan participation of 1,655 totaling $358 million to both new and existing clients

MOLINE, Ill., July 27, 2020 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $13.7 million and diluted earnings per share (“EPS”) of $0.86 for the second quarter of 2020, compared to net income of $11.2 million and diluted EPS of $0.70 for the first quarter of 2020.  Pre-provision, pre-tax adjusted net income (non-GAAP) increased $14.0 million in the second quarter, compared to the first quarter led by strong loan growth, net interest income, and record swap fee income.  Provision expense increased $11.5 million in the second quarter, compared to the first quarter.  This increase was due primarily to qualitative factors in response to deteriorating economic prospects as a result of the COVID-19 pandemic.    

The Company reported adjusted net income (non-GAAP) of $14.0 million and adjusted diluted EPS (non-GAAP) of $0.88 for the second quarter of 2020, compared to adjusted net income (non-GAAP) of $12.4 million and adjusted diluted EPS (non-GAAP) of $0.77 for the first quarter of 2020. For the second quarter of 2019, net income and diluted EPS were $13.5 million and $0.85, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $14.1 million and $0.88, respectively.

	For the Quarter Ended
	June 30,			March 31,			June 30,
$ in millions (except per share data)		2020			2020			2019
Net Income	$	13.7		$	11.2		$	13.5
Diluted EPS	$	0.86		$	0.70		$	0.85
Adjusted Net Income (non-GAAP)	$	14.0		$	12.4		$	14.1
Adjusted Diluted EPS (non-GAAP)	$	0.88		$	0.77		$	0.88
Pre-Provision/Pre-Tax Adjusted Income (non-GAAP)	$	36.8		$	22.8		$	19.3
Pre-Provision/Pre-Tax Adjusted ROAA (non-GAAP)		2.54	%		1.84	%		1.52		%
See GAAP to non-GAAP reconciliations

“We are very pleased with our core operating performance for the second quarter,” commented Larry J. Helling, Chief Executive Officer. “We delivered record pre-provision, pre-tax adjusted net income, driven by strong loan growth, strong fee income, and careful management of noninterest expenses. In addition to successfully funding over $350 million of PPP loans to both new and existing customers, we grew our core loans by over 8% on an annualized basis.  Our core deposit gathering was even stronger during the quarter with the outsized growth in deposits creating significant excess liquidity that led to compression in our net interest margin.”

Additionally, asset quality remains strong and our current credit metrics improved during the quarter. “We reduced nonperforming assets by 21%, through the sale of an OREO property,” Helling said. “While we do not currently see meaningful degradation of specific credits in our portfolio, we chose to be prudent and increased our provision for loan losses during the quarter in order to build reserves against future potential credit issues related to COVID-19.”

“QCRH continues to successfully navigate the challenges presented by the COVID-19 pandemic, including supporting impacted clients through the QCRH Loan Relief Program, enabling clients to defer payments and preserve cash and liquidity. It’s difficult to predict the ultimate impact that this Pandemic will have on our clients. However, we believe our banks are well positioned to deal with the Pandemic,” Helling said. “All of our employees are dedicated to helping our clients weather this storm, and we have seasoned credit teams at all charters experienced in dealing with significant economic downturns.”

Annualized Loan and Lease Growth of 8.4%, excluding PPP loans (non-GAAP)

During the second quarter of 2020, the Company’s total loans and leases increased by $435.6 million to a total of $4.1 billion. Included in this amount was $358.1 million of PPP loans made to both new and existing customers.  Excluding the PPP loans, loan and lease growth during the quarter was 8.4% on an annualized basis (non-GAAP), reflecting healthy demand across all markets.  Core deposits (excluding brokered deposits) increased $338.6 million, or 8.7% on a linked quarter basis.  Brokered deposits declined by $159.3 million as the Company allowed certain higher cost brokered deposits to run off the balance sheet.  Throughout the quarter, deposits grew significantly with average deposit growth of $777.9 million, or 19.7% for the quarter.  The Company’s correspondent banking portfolio contributed to the majority of this outsized growth as our correspondent bank clients grew liquidity with deposit growth significantly outpacing loans.  These outsized liquidity balances temporarily shifted off balance sheet at quarter-end.  The percentage of wholesale funds to total assets was 8.9% as of the second quarter, which was down from 10.1% in the first quarter of 2020 as the Company’s need for wholesale funding declined due to the strong growth in core deposits.  At quarter-end, the percentage of gross loans and leases to total assets was 73.9%, which was up from 70.8% in the first quarter, primarily driven by the increase in PPP loan balances.  

“Despite the uncertainty caused by the COVID-19 pandemic, we delivered solid loan growth for the quarter in addition to the $358 million of PPP loans that we funded,” added Helling. “Loan production improved in both our core commercial lending business and our Specialty Finance Group.  Excluding our PPP loan production, loan and lease growth for the first six months of 2020 has been 5.0% on an annualized basis, and given our current pipeline, we believe that we will be able to achieve organic loan growth of between 3% and 5% for the full year.”  

Net Interest Income of $40.9 million

Net interest income for the second quarter of 2020 totaled $40.9 million, compared to $37.7 million for the first quarter of 2020 and $38.0 million for the second quarter of 2019. The increase was primarily due to growth in average interest earning assets of $791.6 million, or 17.7% on a linked quarter basis, of which $404.9 million of the increase was due to excess cash derived from the aforementioned outsized deposit growth.  Partially offsetting the impact of the higher average balance of interest earning assets, was a lower reported net interest margin, due to the significant excess liquidity.  Acquisition-related net accretion totaled $736 thousand (pre-tax) for the second quarter of 2020, up slightly from the first quarter of 2020 and down from $1.1 million for the second quarter of 2019. Adjusted net interest income (non-GAAP) was $41.9 million for the second quarter of 2020, compared to $38.9 million for the first quarter of 2020 and $38.7 million for the second quarter of 2019.

In the second quarter, NIM was 3.14% and, on a tax-equivalent yield basis (non-GAAP), NIM was 3.27%, a decrease of 26 basis points and 29 basis points from the first quarter of 2020, respectively. Adjusted NIM (non-GAAP), excluding acquisition-related net accretion was 3.21%, down 29 basis points from the first quarter.  The decline in adjusted NIM (non-GAAP) during the quarter was entirely due to the significant excess liquidity carried for the quarter.  Average excess liquidity of $404.9 million with modest negative arbitrage contributed approximately 30 basis points to the NIM dilution.  Excluding the impact of excess liquidity, the Company’s NIM was stable as cost of funds declines offset pricing pressure on earning assets.   

	For the Quarter Ended
	June 30,		March 31,		June 30,
	2020		2020		2019
NIM	3.14	%	3.40	%	3.25	%
NIM (TEY)(non-GAAP)	3.27	%	3.56	%	3.40	%
Adjusted NIM (TEY)(non-GAAP)	3.21	%	3.50	%	3.31	%
See GAAP to non-GAAP reconciliations

“Our deposit costs decreased significantly during the quarter as we gathered core deposits and reduced our wholesale funding, allowing us to reduce our total cost of interest-bearing funds by 53 basis points.  However, our average loan yields also decreased due to the sharp decline in short-term interest rates, and when combined with the significant excess liquidity that we carried during the quarter, our adjusted NIM was adversely impacted by 29 basis points,” stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Excluding the impact of the excess liquidity, adjusted NIM would have been stable from the first quarter.”                                     

Noninterest Income of $28.6 million

Noninterest income for the second quarter of 2020 totaled $28.6 million, compared to $15.2 million for the first quarter of 2020.  The increase was primarily due to $19.9 million in swap fee income, up $13.1 million from the first quarter of 2020.  Wealth management revenue was $3.6 million for the quarter, down from $4.0 million in the first quarter due to a full quarter of lower fair market values of the assets under management.  Noninterest income increased 67.7% when compared to the second quarter of 2019.

“Continued strong production from our Specialty Finance Group and our core banks led to a record $19.9 million in swap fee income during the quarter. Swap fee income totaled $26.7 million for the first six months of 2020, putting us on track to exceed last year’s record amount,” added Mr. Gipple. “Our current expectation is that for the remainder of 2020, this fee income source will be approximately $30 to $32 million for the six month period.”

Noninterest Expenses of $33.1 million

Noninterest expense for the second quarter of 2020 totaled $33.1 million, compared to $31.4 million for the first quarter of 2020.  The linked quarter increase was primarily due to increased salary and benefits expense of $2.8 million with increased bonus and commission expense in the quarter driven by the strong financial results and higher than anticipated swap fee income.  This was partially offset by a $600 thousand decline in disposition costs, a $285 thousand decline in occupancy and equipment costs and a $345 thousand increase in gains and income from the operations of other real estate.  In addition, the first quarter of 2020 included a goodwill impairment charge of $500 thousand.

NPAs at Historical Lows
Building Reserves for COVID-19

Nonperforming assets (“NPAs”) totaled $13.3 million, a decrease of $3.6 million from the first quarter of 2020. The decrease was primarily due to the disposition of other real estate owned. The ratio of NPAs to total assets decreased to 0.24% at June 30, 2020, compared to 0.32% at March 31, 2020, and down from 0.45% at June 30, 2019.

The Company’s provision for loan and lease losses totaled $19.9 million for the second quarter of 2020, up from $8.4 million in the prior quarter. The linked quarter increase in the provision for loan and lease losses was primarily due to increased qualitative factors in response to the COVID-19 pandemic. As of June 30, 2020, the Company’s allowance to total loans and leases was 1.47%, which was up from 1.14% at March 31, 2020, and from 1.05% at June 30, 2019.  Excluding the impact of the $358 million in PPP loans, the allowance for estimated losses on loans and leases to total loans and leases was 1.61% (non-GAAP).

In accordance with GAAP for acquisition accounting, loans acquired through past acquisitions were recorded at market value; therefore, there was no allowance associated with the acquired loans at the acquisition date.  Management continues to evaluate the allowance needed on the acquired loans factoring in the net remaining discount of $5.5 million at June 30, 2020.

 Strong Capital Levels

As of June 30, 2020, the Company’s total risk-based capital ratio was 13.74%, the common equity tier 1 ratio was 10.28%, and the tangible common equity to tangible assets ratio was 8.48% (non-GAAP).  By comparison, these respective ratios were 13.54%, 10.31% and 8.76% as of March 31, 2020.  The decline in the tangible common equity to tangible assets ratio was primarily the result of asset growth associated with the increase in PPP loans during the quarter.  Excluding the impact of the PPP loans, the tangible common equity to tangible assets ratio was 9.03% (non-GAAP).

Focus on Three Strategic Long-Term Initiatives

As part of the Company’s ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, it continues to operate under three key strategic long-term initiatives:

• Organic loan and lease growth of 9% per year, funded by core deposits;
• Grow fee-based income by at least 6% per year; and
• Limit our annual operating expense growth to 5% per year.

It should be noted that these initiatives are long-term targets.  Due to the impact of the COVID-19 pandemic, the Company may not be able to achieve these goals for the full year 2020.
             
Supplemental Presentation and Where to Find It
In addition to this press release, the Company has included a supplemental presentation that provides further information regarding the Company’s loan exposures and deferrals.  Investors, analysts and other interested persons may find this presentation on the Securities and Exchange Commission’s EDGAR filing system at www.sec.gov/edgar.shtml, or on the Company’s website at www.qcrh.com.

Conference Call Details
The Company will host an earnings call/webcast tomorrow, July 28, 2020, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through August 11, 2020. The replay access information is 877-344-7529 (international 412-317-0088); access code 10145663. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

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. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company engages in commercial leasing through its wholly-owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 25 locations in Illinois, Iowa, Wisconsin and Missouri. As of June 30, 2020, the Company had approximately $5.6 billion in assets, $4.1 billion in loans and $4.3 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

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,” “predict,” “suggest,” “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should” 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 the impact of the 2020 presidential election and the impact of tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), 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 (including the new current expected credit loss (CECL) impairment standards, that will change how the Company estimates credit losses when implemented); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector 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; and (xi) unexpected outcomes of existing or new litigation involving the Company. 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.

Contacts:

Todd A. Gipple
President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com

Kim K. Garrett
Vice President
Corporate Communications
Investor Relations Manager
(319) 743-7006
kgarret@qcrh.com

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
													Held for Sale		Held for Sale		Held for Sale		Held for Sale
	As of												As of		As of		As of		As of
	June 30,		March 31,		December 31,		September 30,		June 30,				June 30,		March 31,		December 31,		September 30,
		2020		2020		2019		2019		2019				2020		2020		2019		2019
	(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks	$	88,577	$	169,827	$	76,254	$	91,671	$	87,919			$	-	$	-	$	-	$	11,031
Federal funds sold and interest-bearing deposits		142,900		206,708		157,691		197,263		205,497				-		-		-		2,415
Securities		748,883		684,571		611,341		555,409		643,803				-		-		-		66,009
Net loans/leases		4,079,432		3,662,435		3,654,204		3,574,154		3,869,415				-		-		-		362,011
Intangibles		13,872		14,421		14,970		15,529		16,089				-		-		-		-
Goodwill		74,248		74,248		74,748		77,748		77,748				-		-		-		-
Derivatives		225,164		195,973		87,827		104,388		65,922				-		-		-		-
Other assets		220,920		213,134		220,049		210,673		228,459				10,765		10,758		11,966		24,081
Assets held for sale		10,765		10,758		11,966		465,547		-				-		-		-		-
Total assets	$	5,604,761	$	5,232,075	$	4,909,050	$	5,292,382	$	5,194,852			$	10,765	$	10,758	$	11,966	$	465,547
Total deposits	$	4,349,775	$	4,170,478	$	3,911,051	$	3,802,241	$	4,322,510			$	-	$	-	$	-	$	451,546
Total borrowings		376,250		244,399		278,955		320,457		230,953				-		-		-		16,157
Derivatives		233,589		203,744		88,436		109,242		69,556				-		-		-		-
Other liabilities		87,539		71,185		90,254		70,169		67,533				1,588		3,130		5,003		2,827
Liabilities held for sale		1,588		3,130		5,003		470,530		-				-		-		-		-
Total stockholders' equity		556,020		539,139		535,351		519,743		504,300				-		-		-		-
Total liabilities and stockholders' equity	$	5,604,761	$	5,232,075	$	4,909,050	$	5,292,382	$	5,194,852			$	1,588	$	3,130	$	5,003	$	470,530
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial loans	$	1,850,110	$	1,484,979	$	1,507,825	$	1,469,978	$	1,548,657
Commercial real estate loans		1,869,162		1,783,086		1,736,396		1,687,922		1,837,473
Direct financing leases		79,105		83,324		87,869		92,307		101,180
Residential real estate loans		241,069		237,742		239,904		245,667		293,479
Installment and other consumer loans		99,150		106,728		109,352		106,540		120,947
Deferred loan/lease origination costs, net of fees		1,663		8,809		8,859		7,856		8,783
Total loans/leases	$	4,140,259	$	3,704,668	$	3,690,205	$	3,610,270	$	3,910,519
Less allowance for estimated losses on loans/leases		60,827		42,233		36,001		36,116		41,104
Net loans/leases	$	4,079,432	$	3,662,435	$	3,654,204	$	3,574,154	$	3,869,415
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities	$	17,472	$	19,457	$	20,078	$	21,268	$	35,762
Municipal securities		526,192		493,664		447,853		391,329		440,853
Residential mortgage-backed and related securities		145,672		122,853		120,587		123,880		159,228
Asset backed securities		39,797		28,499		16,887		10,957		-
Other securities		19,750		20,098		5,936		7,975		7,960
Total securities	$	748,883	$	684,571	$	611,341	$	555,409	$	643,803
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits	$	1,177,482	$	829,782	$	777,224	$	782,232	$	795,951
Interest-bearing demand deposits		2,488,755		2,440,907		2,407,502		2,245,557		2,505,956
Time deposits		560,982		617,979		571,343		536,352		733,135
Brokered deposits		122,556		281,810		154,982		238,100		287,468
Total deposits	$	4,349,775	$	4,170,478	$	3,911,051	$	3,802,241	$	4,322,510
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances	$	90,000	$	55,000	$	50,000	$	60,000	$	46,433
Overnight FHLB advances (1)		55,000		40,000		109,300		135,800		59,300
FRB borrowings		100,000		30,000		-		-		-
Other short-term borrowings		24,818		13,067		13,423		18,526		19,191
Subordinated notes		68,516		68,455		68,394		68,334		68,274
Junior subordinated debentures		37,916		37,877		37,838		37,797		37,755
Total borrowings	$	376,250	$	244,399	$	278,955	$	320,457	$	230,953
(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 0.37%.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
			For the Quarter Ended
			June 30,			March 31,		December 31,		September 30,			June 30,
				2020			2020		2019		2019			2019
			(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income			$	48,650		$	48,982	$	52,977	$	56,817		$	54,181
Interest expense				7,702			11,284		13,058		16,098			16,168
Net interest income				40,948			37,698		39,919		40,719			38,013
Provision for loan/lease losses				19,915			8,367		979		2,012			1,941
Net interest income after provision for loan/lease losses			$	21,033		$	29,331	$	38,940	$	38,707		$	36,072
Trust department fees			$	2,227		$	2,312	$	2,365	$	2,340		$	2,361
Investment advisory and management fees				1,399			1,727		1,589		1,782			1,888
Deposit service fees				1,286			1,477		1,787		1,813			1,658
Gain on sales of residential real estate loans				1,196			652		823		890			489
Gain on sales of government guaranteed portions of loans				-			-		159		519			39
Swap fee income				19,927			6,804		7,409		9,797			7,891
Securities gains (losses), net				65			-		26		(3	)		(52	)
Earnings on bank-owned life insurance				612			329		533		489			412
Debit card fees				775			758		766		886			914
Correspondent banking fees				198			215		194		189			172
Gain on sale of assets and liabilities of subsidiary				-			-		12,286		-			-
Other				941			922		1,868		1,204			1,293
Total noninterest income			$	28,626		$	15,196	$	29,805	$	19,906		$	17,065
Salaries and employee benefits			$	21,304		$	18,519	$	24,220	$	24,215		$	22,749
Occupancy and equipment expense				3,748			4,032		4,019		3,860			3,533
Professional and data processing fees				3,646			3,369		3,570		4,030			3,031
Post-acquisition compensation, transition and integration costs				70			151		1,855		884			708
Disposition costs				(83	)		517		3,325		-			-
FDIC insurance, other insurance and regulatory fees				908			683		523		542			926
Loan/lease expense				339			228		349		221			312
Net cost of (income from) and gains/losses on operations of other real estate				(332	)		13		232		2,078			1,182
Advertising and marketing				552			682		1,670		1,056			1,037
Bank service charges				501			504		516		502			508
Losses on debt extinguishment, net				429			147		288		148			-
Correspondent banking expense				212			216		216		209			206
Intangibles amortization				548			549		560		560			615
Goodwill impairment				-			500		3,000		-			-
Other				1,280			1,305		1,951		1,640			1,753
Total noninterest expense			$	33,122		$	31,415	$	46,294	$	39,945		$	36,560
Net income before income taxes			$	16,537		$	13,112	$	22,451	$	18,668		$	16,577
Federal and state income tax expense				2,798			1,884		6,560		3,573			3,073
Net income			$	13,739		$	11,228	$	15,891	$	15,095		$	13,504
Basic EPS			$	0.87		$	0.71	$	1.01	$	0.96		$	0.86
Diluted EPS			$	0.86		$	0.70	$	0.99	$	0.94		$	0.85
Weighted average common shares outstanding				15,747,056			15,796,796		15,772,703		15,739,430			15,714,588
Weighted average common and common equivalent shares outstanding				15,895,336			16,011,456		16,033,043		15,976,742			15,938,377

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
				For the Six Months Ended
				June 30,				June 30,
					2020				2019
				(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income				$	97,632			$	106,283
Interest expense					18,986				31,362
Net interest income					78,646				74,921
Provision for loan/lease losses					28,282				4,075
Net interest income after provision for loan/lease losses				$	50,364			$	70,846
Trust department fees					4,539			$	4,854
Investment advisory and management fees					3,126				3,624
Deposit service fees					2,763				3,212
Gain on sales of residential real estate loans					1,848				858
Gain on sales of government guaranteed portions of loans					-				70
Swap fee income					26,731				11,089
Securities losses, net					65				(52	)
Earnings on bank-owned life insurance					941				952
Debit card fees					1,533				1,706
Correspondent banking fees					413				388
Other					1,863				2,357
Total noninterest income				$	43,822			$	29,058
Salaries and employee benefits					39,823			$	43,628
Occupancy and equipment expense					7,780				7,227
Professional and data processing fees					7,015				5,781
Post-acquisition compensation, transition and integration costs					221				842
Disposition costs					434				-
FDIC insurance, other insurance and regulatory fees					1,591				1,890
Loan/lease expense					567				526
Net cost of operation of other real estate					(319	)			1,480
Advertising and marketing					1,234				1,822
Bank service charges					1,005				991
Losses on debt extinguishment, net					576				-
Correspondent banking expense					428				410
Intangibles amortization					1,097				1,147
Goodwill impairment					500				-
Other					2,585				3,251
Total noninterest expense				$	64,537			$	68,995
Net income before taxes				$	29,649			$	30,909
Income tax expense					4,682				4,487
Net income				$	24,967			$	26,422
Basic EPS				$	1.58			$	1.68
Diluted EPS				$	1.56			$	1.66
Weighted average common shares outstanding					15,771,926				15,703,967
Weighted average common and common equivalent shares outstanding					15,956,958				15,930,659

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
	As of and for the Quarter Ended																For the Six Months Ended
	June30,			March 31,			December 31,			September 30,			June 30,				June 30,			June 30,
		2020			2020			2019			2019			2019				2020			2019
	(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding		15,790,611			15,773,736			15,828,098			15,790,462			15,772,939
Book value per common share (1)	$	35.21		$	34.18		$	33.82		$	32.91		$	31.97
Tangible book value per common share (2)	$	29.63		$	28.56		$	28.15		$	27.01		$	26.02
Closing stock price	$	31.18		$	27.07		$	43.86		$	37.98		$	34.87
Market capitalization	$	492,351		$	426,995		$	694,220		$	599,722		$	550,002
Market price / book value		88.55	%		79.20	%		129.69	%		115.40	%		109.06	%
Market price / tangible book value		105.23	%		94.79	%		155.76	%		140.61	%		134.00	%
Earnings per common share (basic) LTM (3)	$	3.55		$	3.54		$	3.65		$	3.49		$	3.10
Price earnings ratio LTM (3)	8.78 x			7.65 x			12.02 x			10.88 x			11.25 x
TCE / TA (4)		8.48	%		8.76	%		9.25	%		8.20	%		8.05	%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance	$	539,139		$	535,351		$	519,743		$	504,300		$	488,407
Net income		13,739			11,228			15,891			15,095			13,504
Other comprehensive income (loss), net of tax		3,622			(3,691	)		(683	)		543			2,243
Common stock cash dividends declared		(945	)		(942	)		(947	)		(944	)		(942	)
Proceeds from issuance of 9,400 shares of common stock as a result of the performance based targets met for Bates Companies		-			-			399			-			-
Repurchase and cancellation of 100,932 shares of common stock as a result of a share repurchase program		-			(3,780	)
Other (5)		465			973			948			749			1,088
Ending balance	$	556,020		$	539,139		$	535,351		$	519,743		$	504,300
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio		13.74	%		13.54	%		13.33	%		12.22	%		12.04	%
Tier 1 risk-based capital ratio		11.11	%		11.16	%		11.04	%		9.94	%		9.76	%
Tier 1 leverage capital ratio		8.91	%		10.19	%		9.53	%		9.02	%		8.96	%
Common equity tier 1 ratio		10.28	%		10.31	%		10.18	%		9.12	%		8.93	%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)		0.95	%		0.91	%		1.23	%		1.16	%		1.06	%			0.93	%		1.05	%
Return on average total equity (annualized)		10.29	%		8.23	%		11.93	%		11.70	%		10.84	%			9.30	%		10.78	%
Net interest margin		3.14	%		3.40	%		3.36	%		3.37	%		3.25	%			3.26	%		3.25	%
Net interest margin (TEY) (Non-GAAP)(7)		3.27	%		3.56	%		3.51	%		3.52	%		3.40	%			3.40	%		3.40	%
Efficiency ratio (Non-GAAP) (8)		47.61	%		59.39	%		66.40	%		65.89	%		66.38	%			52.70	%		66.35	%
Gross loans and leases / total assets (10)		74.01	%		70.95	%		75.36	%		74.80	%		75.28	%			74.01	%		75.28	%
Gross loans and leases / total deposits (10)		95.18	%		88.83	%		94.35	%		94.95	%		90.47	%			95.18	%		90.47	%
Effective tax rate		16.92	%		14.37	%		29.22	%		19.14	%		18.54	%			15.79	%		14.52	%
Full-time equivalent employees (9)		712			703			697			766			773				712			773
AVERAGE BALANCES
Assets	$	5,800,164		$	4,948,311		$	5,147,754		$	5,217,763		$	5,077,900			$	5,374,224		$	5,023,201
Loans/leases		3,999,523			3,686,410			3,868,435			3,962,464			3,839,674				3,842,967			3,799,645
Deposits		4,732,626			3,954,707			4,227,572			4,302,995			4,271,391				4,343,653			4,191,130
Total stockholders' equity		534,095			545,678			532,756			516,195			498,263				536,775			490,343
(1) Includes accumulated other comprehensive income (loss).
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets.
(3) LTM : Last twelve months.
(4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
(7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
(8) See GAAP to Non-GAAP reconciliations.
(9) Decrease from June 30, 2019 and September 30, 2019 due to sale of subsidiary Rockford Bank & Trust.
(10) Excludes assets held for sale as of September 30, 2019, Deccember 31, 2019, March 31, 2020 and June 30, 2020.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
ANALYSIS OF NET INTEREST INCOME AND MARGIN (4)
		For the Quarter Ended
		June 30, 2020							March 31, 2020							June 30, 2019
		Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost
		(dollars in thousands)
Fed funds sold		$	865	$	1	0.46	%		$	5,324	$	18	1.36	%		$	9,690	$	56	2.32	%
Interest-bearing deposits at financial institutions			533,483		135	0.10	%			128,612		361	1.13	%			182,651		1,168	2.56	%
Securities (1)			697,559		6,536	3.77	%			619,307		6,080	3.95	%			644,999		6,062	3.77	%
Restricted investment securities			21,234		288	5.46	%			21,365		258	4.86	%			21,007		290	5.54	%
Loans (1)			3,999,522		43,417	4.37	%			3,686,410		44,056	4.81	%			3,839,674		48,413	5.06	%
Total earning assets (1)		$	5,252,663	$	50,377	3.86	%		$	4,461,018	$	50,773	4.58	%		$	4,698,021	$	55,989	4.78	%
Interest-bearing deposits		$	2,840,860	$	2,429	0.34	%		$	2,379,635	$	5,328	0.90	%		$	2,461,768	$	8,271	1.35	%
Time deposits			809,233		3,337	1.66	%			785,135		3,879	1.99	%			1,013,391		5,554	2.20	%
Short-term borrowings			25,064		22	0.35	%			19,315		64	1.33	%			16,145		81	2.01	%
Federal Home Loan Bank advances			95,616		347	1.46	%			111,407		449	1.62	%			76,154		601	3.17	%
Other borrowings			-		-	0.00	%			-		-	0.00	%			10,550		92	3.50	%
Subordinated debentures			68,480		994	5.84	%			68,418		994	5.84	%			68,239		993	5.84	%
Junior subordinated debentures			37,891		572	6.07	%			37,853		571	6.07	%			37,731		576	6.12	%
Total interest-bearing liabilities		$	3,877,144	$	7,701	0.80	%		$	3,401,763	$	11,285	1.33	%		$	3,683,978	$	16,168	1.76	%
Net interest income / spread (1)				$	42,676	3.06	%				$	39,488	3.24	%				$	39,821	3.02	%
Net interest margin (2)						3.14	%						3.40	%						3.25	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.27	%						3.56	%						3.40	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.21	%						3.50	%						3.31	%
		For the Six Months Ended
		June 30, 2020							June 30, 2019
		Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost
		(dollars in thousands)
Fed funds sold		$	3,095	$	18	1.17	%		$	12,713	$	150	2.38	%
Interest-bearing deposits at financial institutions			331,048		495	0.30	%			169,057		2,091	2.49	%
Securities (1)			658,433		12,616	3.85	%			652,727		12,158	3.76	%
Restricted investment securities			21,300		546	5.15	%			21,146		598	5.70	%
Loans (1)			3,842,966		87,474	4.58	%			3,799,645		94,795	5.03	%
Total earning assets (1)		$	4,856,842	$	101,149	4.19	%		$	4,655,288	$	109,792	4.76	%
Interest-bearing deposits		$	2,610,248	$	7,756	0.60	%		$	2,374,939	$	15,445	1.31	%
Time deposits			797,184		7,216	1.82	%			1,012,925		10,859	2.16	%
Short-term borrowings			22,190		86	0.78	%			15,261		152	2.01	%
Federal Home Loan Bank advances			103,512		796	1.55	%			111,755		1,662	3.00	%
Other borrowings			-		-	0.00	%			27,126		539	4.01	%
Subordinated debentures			68,449		1,988	5.84	%			53,438		1,557	5.88	%
Junior subordinated debentures			37,872		1,144	6.07	%			37,709		1,148	6.14	%
Total interest-bearing liabilities		$	3,639,455	$	18,986	1.05	%		$	3,633,153	$	31,362	1.74	%
Net interest income / spread (1)				$	82,163	3.14	%				$	78,430	3.02	%
Net interest margin (2)						3.26	%						3.25	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.40	%						3.40	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.35	%						3.30	%
(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
(2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
		2020			2020			2019			2019			2019
	(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES
Beginning balance	$	42,233		$	36,001		$	36,116		$	41,104		$	41,164
Reclassification of allowance related to held for sale loans		-			-			-			(6,122	)		-
Provision charged to expense (2)		19,915			8,367			979			1,584			1,941
Loans/leases charged off		(1,450	)		(2,335	)		(1,182	)		(741	)		(2,152	)
Recoveries on loans/leases previously charged off		129			200			88			291			151
Ending balance	$	60,827		$	42,233		$	36,001		$	36,116		$	41,104
NONPERFORMING ASSETS
Nonaccrual loans/leases	$	12,099		$	11,628		$	7,902		$	8,231		$	13,148
Accruing loans/leases past due 90 days or more		99			1,419			33			-			58
Troubled debt restructures - accruing		920			545			979			763			1,313
Total nonperforming loans/leases		13,118			13,592			8,914			8,994			14,519
Other real estate owned		157			3,298			4,129			4,248			8,637
Other repossessed assets		25			45			41			-			-
Total nonperforming assets	$	13,300		$	16,935		$	13,084		$	13,242		$	23,156
ASSET QUALITY RATIOS
Nonperforming assets / total assets (3)		0.24	%		0.32	%		0.27	%		0.27	%		0.45	%
Allowance / total loans/leases (1)		1.47	%		1.14	%		0.98	%		1.00	%		1.05	%
Allowance / nonperforming loans/leases (1)		463.69	%		310.72	%		403.87	%		401.56	%		283.10	%
Net charge-offs as a % of average loans/leases		0.03	%		0.06	%		0.03	%		0.01	%		0.05	%
(1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios.
(2) Excludes provision related to loans included in assets held for sale of $428 thousand for the quarter ending September 30, 2019.
(3) Excludes assets held for sale.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
				For the Quarter Ended												For the Six Months Ended
				June 30,				March 31,				June 30,				June 30,				June 30,
		SELECT FINANCIAL DATA - SUBSIDIARIES			2020				2020				2019				2020				2019
				(dollars in thousands)
		TOTAL ASSETS
		Quad City Bank and Trust (1)		$	1,984,245			$	1,914,785			$	1,637,115
		m2 Lease Funds, LLC			241,114				237,198				234,072
		Cedar Rapids Bank and Trust			2,021,043				1,719,773				1,527,521
		Community State Bank - Ankeny			903,648				863,903				806,704
		Springfield First Community Bank			745,474				708,736				671,644
		TOTAL DEPOSITS
		Quad City Bank and Trust (1)		$	1,707,970			$	1,678,889			$	1,434,467
		Cedar Rapids Bank and Trust			1,351,784				1,247,989				1,283,151
		Community State Bank - Ankeny			778,499				743,645				705,777
		Springfield First Community Bank			564,710				524,420				471,340
		TOTAL LOANS & LEASES
		Quad City Bank and Trust (1)		$	1,485,971			$	1,338,915			$	1,273,400
		m2 Lease Funds, LLC			239,351				235,144				230,676
		Cedar Rapids Bank and Trust			1,380,672				1,159,453				1,100,823
		Community State Bank - Ankeny			671,772				634,253				597,486
		Springfield First Community Bank			601,843				572,046				515,566
		TOTAL LOANS & LEASES / TOTAL DEPOSITS
		Quad City Bank and Trust (1)			87	%			80	%			89	%
		Cedar Rapids Bank and Trust			102	%			93	%			86	%
		Community State Bank - Ankeny			86	%			85	%			85	%
		Springfield First Community Bank			107	%			109	%			109	%
		TOTAL LOANS & LEASES / TOTAL ASSETS
		Quad City Bank and Trust (1)			75	%			70	%			78	%
		Cedar Rapids Bank and Trust			68	%			67	%			72	%
		Community State Bank - Ankeny			74	%			73	%			74	%
		Springfield First Community Bank			81	%			81	%			77	%
		ALLOWANCE AS A PERCENTAGE OF LOANS/LEASES
		Quad City Bank and Trust (1)			1.51	%			1.17	%			1.06	%
		m2 Lease Funds, LLC			1.99	%			1.50	%			1.38	%
		Cedar Rapids Bank and Trust (2)			1.62	%			1.35	%			1.19	%
		Community State Bank - Ankeny (2)			1.56	%			1.21	%			1.09	%
		Springfield First Community Bank (2)			0.94	%			0.56	%			0.37	%
		RETURN ON AVERAGE ASSETS
		Quad City Bank and Trust (1)			0.68	%			1.33	%			1.22	%			0.95	%			1.20	%
		Cedar Rapids Bank and Trust			2.36	%			1.60	%			1.95	%			2.01	%			1.75	%
		Community State Bank - Ankeny			0.25	%			0.50	%			1.17	%			0.37	%			1.12	%
		Springfield First Community Bank			1.04	%			1.29	%			1.37	%			1.16	%			1.24	%
		NET INTEREST MARGIN PERCENTAGE (3)
		Quad City Bank and Trust (1)			2.88	%			3.68	%			3.29	%			3.22	%			3.26	%
		Cedar Rapids Bank and Trust (5)			3.37	%			3.43	%			3.41	%			3.40	%			3.41	%
		Community State Bank - Ankeny (4)			3.77	%			3.91	%			4.08	%			3.84	%			4.06	%
		Springfield First Community Bank (6)			3.88	%			3.83	%			4.10	%			3.85	%			4.08	%
		ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
		INTEREST MARGIN, NET
		Cedar Rapids Bank and Trust		$	62			$	49			$	71			$	111			$	215
		Community State Bank - Ankeny			72				64				76			$	136				134
		Springfield First Community Bank			641				552				971			$	1,193				1,881
		QCR Holdings, Inc. (7)			(39	)			(40	)			(42	)		$	(79	)			(85	)
(1	)	Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Lease Funds, LLC
		is also presented separately for certain (applicable) measurements.
(2	)	Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminates the allowance and impacts this ratio.
(3	)	Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using
		a 21% tax rate.
(4	)	Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest
		margin would have been 3.71% for the quarter ended June 30, 2020, 3.86% for the quarter ended March 31, 2020 and 4.01% for the
		quarter ended June 30, 2019.
(5	)	Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest
		margin would have been 3.35% for the quarter ended June 30, 2020, 3.42% for the quarter ended March 31, 2020 and 3.39% for the
		quarter ended June 30, 2019.
(6	)	Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest
		margin would have been 4.29% for the quarter ended June 30, 2020, 4.52% for the quarter ended March 31, 2020 and 3.39% for the
		quarter ended June 30, 2019.
(7	)	Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
		As of
		June 30,				March 31,				December 31,				September 30,				June 30,
GAAP TO NON-GAAP RECONCILIATIONS			2020				2020				2019				2019				2019
		(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)		$	556,020			$	539,139			$	535,351			$	519,743			$	504,300
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible common equity (non-GAAP)		$	467,900			$	450,470			$	445,634			$	426,466			$	410,463
Total assets (GAAP)		$	5,604,761			$	5,232,075			$	4,909,050			$	5,292,382			$	5,194,852
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible assets (non-GAAP)		$	5,516,641			$	5,143,406			$	4,819,333			$	5,199,105			$	5,101,015
Tangible common equity to tangible assets ratio (non-GAAP)			8.48	%			8.76	%			9.25	%			8.20	%			8.05	%
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO EXCLUDING PPP LOANS (1)
Stockholder's equity (GAAP)		$	556,020			$	539,139			$	535,351			$	519,743			$	504,300
Less: PPP loan interest income (post-tax) (2)			2,085				-				-				-				-
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible common equity, excluding PPP loan income (non-GAAP)		$	465,815			$	450,470			$	445,634			$	426,466			$	410,463
Total assets (GAAP)		$	5,604,761			$	5,232,075			$	4,909,050			$	5,292,382			$	5,194,852
Less: PPP loans			358,052				-				-				-				-
Less: Intangible assets			88,120				88,669				89,717				93,277				93,837
Tangible assets, excluding PPP loans (non-GAAP)		$	5,158,589			$	5,143,406			$	4,819,333			$	5,199,105			$	5,101,015
Tangible common equity to tangible assets ratio, excluding PPP loans (non-GAAP)			9.03	%			8.76	%			9.25	%			8.20	%			8.05	%
(1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures.
(2) PPP interest income (post-tax) is calculated using an estimated effective tax rate of 21%.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
GAAP TO NON-GAAP RECONCILIATIONS		For the Quarter Ended																	For the Six Months Ended
		June 30,				March 31,			December 31,			September 30,			June 30,				June 30,					June 30,
ADJUSTED NET INCOME (1)			2020				2020			2019			2019			2019				2020					2019
		(dollars in thousands, except per share data)
Net income (GAAP)		$	13,739			$	11,228		$	15,891		$	15,095		$	13,504			$	24,967				$	26,422
Less non-core items (post-tax) (2):
Income:
Securities gains(losses), net			51				-			21		$	(2	)	$	(41	)		$	51				$	(41	)
Gain on sale of assets and liabilities of subsidiary			-				-			8,539			-			-				-					-
Total non-core income (non-GAAP)		$	51			$	-		$	8,560		$	(2	)	$	(41	)		$	51				$	(41	)
Expense:
Losses on debt extinguishment, net		$	339			$	116		$	228		$	117		$	-			$	455				$	-
Goodwill impairment			-				500			3,000			-			-		-		500					-
Disposition costs			(66	)			408			2,627			-			-				343				$	-
Tax expense on expected liquidation of RB&T BOLI			-				-			790			-			-				-					-
Post-acquisition compensation, transition and integration costs			55				119			1,465			698			559				175					665
Total non-core expense (non-GAAP)		$	329			$	1,143		$	8,110		$	815		$	559			$	1,472				$	665
Adjusted net income (non-GAAP) (1)		$	14,016			$	12,372		$	15,441		$	15,912		$	14,104			$	26,388				$	27,128
PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)
Net income (GAAP)		$	13,739			$	11,228		$	15,891		$	15,095		$	13,504			$	24,967				$	26,422
Less: Non-core income not tax-effected			65				-			12,313			(3	)		(52	)			65					(52	)
Plus: Non-core expense not tax-effected			416				1,315			9,258			1,032			708				1,731					842
Provision expense			19,915				8,367			979			2,012			1,941				28,282					4,075
Federal and state income tax expense			2,798				1,884			6,560			3,573			3,073				4,682					4,487
Pre-provision/pre-tax adjusted income (non-GAAP) (1)		$	36,803			$	22,794		$	20,375		$	21,714		$	19,277			$	59,597				$	35,878
PRE-PROVISION/PRE-TAX ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)
Pre-provision/pre-tax adjusted income (non-GAAP)		$	36,803			$	22,794		$	20,375		$	21,714		$	19,277			$	59,597				$	35,878
Average Assets		$	5,800,164			$	4,948,311		$	5,147,754		$	5,217,763		$	5,077,900			$	5,374,224				$	5,023,201
Pre-provision/pre-tax adjusted return on average assets (non-GAAP)			2.54	%			1.84	%		1.58	%		1.66	%		1.52	%			2.22	%				1.43	%
ADJUSTED EARNINGS PER COMMON SHARE (1)
Adjusted net income (non-GAAP) (from above)		$	14,016			$	12,372		$	15,441		$	15,912		$	14,104			$	26,388				$	27,128
Weighted average common shares outstanding			15,747,056				15,796,796			15,772,703			15,739,430			15,714,588				15,771,926					15,703,967
Weighted average common and common equivalent shares outstanding			15,895,336				16,011,456			16,033,043			15,976,742			15,938,377				15,956,958					15,930,659
Adjusted earnings per common share (non-GAAP):
Basic		$	0.89			$	0.78		$	0.98		$	1.01		$	0.90			$	1.67				$	1.73
Diluted		$	0.88			$	0.77		$	0.96		$	1.00		$	0.88			$	1.65				$	1.70
ADJUSTED RETURN ON AVERAGE ASSETS (1)
Adjusted net income (non-GAAP) (from above)		$	14,016			$	12,372		$	15,441		$	15,912		$	14,104			$	26,388				$	27,128
Average Assets		$	5,800,164			$	4,948,311		$	5,147,754		$	5,217,763		$	5,077,900			$	5,374,224				$	5,023,201
Adjusted return on average assets (annualized) (non-GAAP)			0.97	%			1.00	%		1.20	%		1.22	%		1.11	%			0.98	%				1.08	%
NET INTEREST MARGIN (TEY) (4)
Net interest income (GAAP)		$	40,948			$	37,698		$	39,919		$	40,719		$	38,013			$	78,646				$	74,921
Plus: Tax equivalent adjustment (3)			1,728				1,790			1,783			1,763			1,808				3,517					3,509
Net interest income - tax equivalent (Non-GAAP)		$	42,676			$	39,488		$	41,702		$	42,482		$	39,821			$	82,163				$	78,430
Less: Acquisition accounting net accretion			736				625			931			1,268			1,076				1,361					2,145
Adjusted net interest income		$	41,940			$	38,863		$	40,771		$	41,214		$	38,745			$	80,802				$	76,285
Average earning assets		$	5,252,663			$	4,461,018		$	4,711,310		$	4,791,274		$	4,698,021			$	4,856,842				$	4,655,288
Net interest margin (GAAP)			3.14	%			3.40	%		3.36	%		3.37	%		3.25	%			3.26	%				3.25	%
Net interest margin (TEY) (Non-GAAP)			3.27	%			3.56	%		3.51	%		3.52	%		3.40	%			3.40	%				3.40	%
Adjusted net interest margin (TEY) (Non-GAAP)			3.21	%			3.50	%		3.43	%		3.41	%		3.31	%			3.35	%				3.30	%
EFFICIENCY RATIO (5)
Noninterest expense (GAAP)		$	33,122			$	31,415		$	46,294		$	39,945		$	36,560			$	64,537				$	68,995
Net interest income (GAAP)		$	40,948			$	37,698		$	39,919		$	40,719		$	38,013			$	78,646				$	74,921
Noninterest income (GAAP)			28,626				15,196			29,805			19,906			17,065				43,822					29,058
Total income		$	69,574			$	52,894		$	69,724		$	60,625		$	55,078			$	122,468				$	103,979
Efficiency ratio (noninterest expense/total income) (Non-GAAP)			47.61	%			59.39	%		66.40	%		65.89	%		66.38	%			52.70	%				66.35	%
ALLOWANCE FOR LOAN AND LEASE LOSSES TO TOTAL LOANS AND LEASES, EXCLUDING PPP LOANS (6)
Allowance for loan and lease losses		$	60,827			$	42,233		$	36,001		$	36,116		$	41,104			$	60,827				$	41,104
Total loans and leases		$	4,140,259			$	3,704,668		$	3,690,205		$	3,610,270		$	3,910,519			$	4,140,259				$	3,910,519
Less: PPP loans			358,052				-			-			-			-				358,052					-
Total loans and leases, excluding PPP loans		$	3,782,207			$	3,704,668		$	3,690,205		$	3,610,270		$	3,910,519			$	3,782,207				$	3,910,519
Allowance for loan and lease losses to total loans and leases, excluding PPP loans			1.61	%			1.14	%		0.98	%		1.00	%		1.05	%			1.61	%				1.05	%
LOAN GROWTH ANNUALIZED, EXCLUDING PPP LOANS
Total loans and leases		$	4,140,259			$	3,704,668		$	3,690,205		$	3,610,270		$	3,910,519			$	4,140,259				$	3,910,519
Less: PPP loans			358,052				-			-			-			-				358,052					-
Total loans and leases, excluding PPP loans		$	3,782,207			$	3,704,668		$	3,690,205		$	3,610,270		$	3,910,519			$	3,782,207				$	3,910,519
Loan growth annualized, excluding PPP loans			8.37	%			1.57	%		8.86	%		-30.71	%		13.57	%			4.99	%				9.52	%
(1) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted return on average assets are non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is the most directly comparable GAAP financial measure.
(2) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain on sale of subsidiary which  has an estimated effective tax rate of 30.5%.
(3) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21%.
(4) Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
(5) Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.
(6) Allowance for loan and lease losses to total loans and leases, excluding PPP loans is a non-GAAP measure. The Company's management utilizes this ratio to remove the from the allowance  calculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans have no allowance for loan and lease loss allocation.