GlobeNewswire Inc | Jan 27, 2021 04:05PM EST

January 27, 2021

Fourth Quarter and Full Year 2020 Highlights

-- Record net income of $18.3 million, or $1.14 per diluted share -- Adjusted net income (non-GAAP) of $19.1 million, or $1.20 per diluted share -- Noninterest income of $32.0 million for the quarter and $113.8 million for the year -- Adjusted NIM (TEY)(non-GAAP) was up 1 basis point after further adjusting for higher third quarter interest recoveries on previously charged-off loans -- Annualized core loan and lease growth (non-GAAP) of 9.0% for the quarter and 7.8% for the year, excluding SBA Paycheck Protection Program (PPP) loans -- Core deposits relatively stable for the quarter and up 22.3% for the year -- Provision expense of $7.1 million for the quarter, increasing ALLL to total loans and leases, excluding PPP loans (non-GAAP), by 7 basis points to 2.12% -- Nonperforming assets improved by 22% for the quarter and now represent only 0.26% of total assets

MOLINE, Ill., Jan. 27, 2021 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the Company) today announced record net income of $18.3 million and diluted earnings per share (EPS) of $1.14 for the fourth quarter of 2020, compared to net income of $17.3 million and diluted EPS of $1.09 for the third quarter of 2020. Pre-provision, pre-tax adjusted net income (non-GAAP) was $30.4 million in the fourth quarter of 2020, compared to a record $42.2 million in the third quarter of 2020.

The Company reported adjusted net income (non-GAAP) of $19.1 million and adjusted diluted EPS of $1.20 for the fourth quarter of 2020, compared to adjusted net income (non-GAAP) of $17.7 million and adjusted diluted EPS of $1.11 for the third quarter of 2020. For the fourth quarter of 2019, net income and diluted EPS were $15.9 million and $0.99, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $15.4 million and $0.96, respectively.

For the Quarter Ended December September December 31, 30, 31,$ in millions (except per share data) 2020 2020 2019 Net Income $ 18.3 $ 17.3 $ 15.9 Diluted EPS $ 1.14 $ 1.09 $ 0.99 Adjusted Net Income (non-GAAP) $ 19.1 $ 17.7 $ 15.4 Adjusted Diluted EPS (non-GAAP) $ 1.20 $ 1.11 $ 0.96 Pre-Provision/Pre-Tax Adjusted Income $ 30.4 $ 42.2 $ 20.4 (non-GAAP)Pre-Provision/Pre-Tax Adjusted ROAA 2.08 % 2.90 % 1.58 % (non-GAAP)See GAAP to non-GAAP reconciliations

We are very pleased with our financial performance in 2020, highlighted by record net income for the fourth quarter and full year, said CEO Larry J. Helling. Our strong results were driven by robust revenue growth, record fee income and increased net interest income. We grew core loans by nearly 8% for the year, while maintaining disciplined underwriting and solid credit quality. Our asset quality and credit metrics improved during the quarter as we improved nonperforming assets by 22%, down to only 0.26% of total assets.

Additionally, we continued to see a reduction in loan deferrals at year-end, as most of our clients who received payment relief early in the COVID-19 pandemic have resumed making normal payments, Helling said. We believe this speaks to the high quality of our loan portfolio and the resiliency of our local markets, which continue to exhibit improving economic activity.

______________________________Adjusted non-GAAP measurements of financial performance exclude non-recurring income and expense items. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance.

Annualized Loan and Lease Growth of 9.0% for the Quarter and 7.8% for the Year, excluding PPP Loans (non-GAAP)

During the fourth quarter of 2020, the Companys total loans and leases, excluding PPP loans, increased $87.5 million to a total of $4.0 billion. Loan and lease growth during the quarter was 9.0% on an annualized basis. Continued loan and lease growth was funded by some of the Companys excess liquidity. Core deposits (excluding brokered deposits) declined by $18.8 million and brokered deposits declined by $54.3 million as the Company allowed certain higher cost brokered deposits to run off the balance sheet. In addition, short-term borrowings decreased by $50.0 million during the quarter. At quarter-end, the percentage of wholesale funds to total assets was 3.2%, which was down from 4.9% in the third quarter of 2020 as the Companys need for wholesale funding continued to decline. Additionally, at quarter-end, the percentage of gross loans and leases to total assets was 74.8%, up from 72.4% in the third quarter, driven primarily by lower excess liquidity.

Our solid loan growth for the quarter was driven by strength in our core commercial lending business, as well as our Specialty Finance Group, added Helling. However, until we have better visibility on the pandemic recovery, we are targeting organic loan growth for the full year 2021 of between 6% and 8%, slightly lower than our long-term goal of 9%.

Net Interest Income of $43.7 million

Net interest income for the fourth quarter of 2020 totaled $43.7 million, compared to $44.6 million for the third quarter of 2020 and $39.9 million for the fourth quarter of 2019. The slight decrease was primarily due to a decline in the yield on earning assets of 8 basis points on a linked quarter basis, primarily due to the higher than normal amount of interest recoveries on previously charged-off loans in the third quarter. Acquisition-related net accretion totaled $1.1 million for the fourth quarter of 2020, up from $833 thousand in the third quarter of 2020 and $931 thousand for the fourth quarter of 2019. Adjusted net interest income (non-GAAP) was $45.3 million for the fourth quarter of 2020, compared to $45.7 million for the third quarter of 2020 and $40.8 million for the fourth quarter of 2019.

Net interest income totaled $167.0 million for the year ended December 31, 2020, compared to $155.6 million for the year ended December 31, 2019.

Excluding the impact of interest recoveries in the prior quarter, which created an 8 basis point reduction in adjusted NIM (non-GAAP) on a linked-quarter basis, adjusted NIM was up 1 basis point. The reported net interest margin was 3.25%. On a tax-equivalent yield basis (non-GAAP), net interest margin was 3.45%, decreasing by 11 and 6 basis points, respectively, from the third quarter of 2020. Net interest margin, excluding acquisition-related net accretion (non-GAAP) was 3.37%, down 7 basis points from the third quarter. The total cost of interest-bearing funds was down 2 basis points for the quarter, as further improvement in our deposit costs was partially offset by the full quarter impact of our $50.0million subordinated note offering in the third quarter.

For the Quarter Ended December September 30, December 31, 31, 2020 2020 2019NIM 3.25% 3.36% 3.36%NIM (TEY)(non-GAAP) 3.45% 3.51% 3.51%Adjusted NIM (TEY)(non-GAAP) 3.37% 3.44% 3.43% (1)See GAAP to non-GAAP reconciliations

(1)Increased by 8 bps due to one-time interest recoveries on previously charged-off loans.

Our deposit costs decreased significantly over the course of the year as we grew core deposits and significantly reduced our wholesale funding, stated Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. However, our average loan yields also decreased due to the sharp decline in short-term interest rates. Despite this and the fact that we carried a significant amount of excess liquidity for most of the year, we were able to protect our margins, as adjusted NIM increased by 2 basis points for the full year.

Noninterest Income of $32.0 million

Noninterest income for the fourth quarter of 2020 totaled $32.0 million, compared to $38.0 million for the third quarter of 2020. The decrease was primarily due to a $5.3 million reduction in swap fee income from the record third quarter. Wealth management revenue was $3.3 million for the quarter, down $232 thousand from the third quarter, due to the impact of the sale of the Bates Companies in the third quarter. Excluding that impact, wealth management revenue was up $241 thousand on a linked-quarter basis. In addition, securities gains decreased by $1.2 million and gain on sale of loans increased by $316 thousand from the prior quarter. Noninterest income increased $14.5 million, or an increase of 83% compared to the fourth quarter of 2019, excluding the gain on sale of Rockford Bank & Trust (RB&T), which was recorded in that quarter.

Noninterest income for the year ended December 31, 2020, totaled $113.8 million, compared to $66.5 million for the year ended December 31, 2019, excluding the gain on the sale of RB&T, an increase of 71%.

Our noninterest income was again driven by another strong quarter of swap fee income. Swap fee income totaled $74.8 million for the full year 2020 as a result of strong demand for these lending products, where we are making high-quality, long-term variable rate loans and are enabling our clients to lock in attractive fixed long-term rates through the use of swaps. The pipeline of swap loans at our banks and our Specialty Finance Group remains healthy and we believe that this source of fee income remains sustainable for the foreseeable future, added Gipple. Our current expectation is that swap fee income will be approximately $14 to $18 million per quarter for 2021.

Noninterest Expenses of $46.4 million

Noninterest expense for the fourth quarter of 2020 totaled $46.4 million, compared to $40.8 million for the third quarter of 2020 and $46.3 million for the fourth quarter of 2019. The linked-quarter increase was due to several factors, but primarily the result of increased salary and benefits expense of $4.4 million, driven by strong financial results in the second half of the year. In addition, occupancy and equipment expense increased by $1.1 million, and advertising and marketing expense increased by $526 thousand. These increases were partially offset by a linked-quarter decline in losses on liability extinguishment of $417 thousand and loss on the sale of a subsidiary of $452 thousand.

Asset Quality Remains Strong and NPAs ImprovedContinued to Build Reserves

Nonperforming assets (NPAs) totaled $14.8 million at the end of the fourth quarter, a decrease of $4.1 million from the third quarter of 2020. The decrease was primarily due to a reduction in nonaccrual loans as a number of loans returned to performing status or were either monetized or charged-off during the quarter. The ratio of NPAs to total assets improved to 0.26% on December 31, 2020, compared to 0.32% on September 30, 2020, and 0.27% on December 31, 2019. In addition, the Companys criticized loans and classified loans to total loans and leases decreased to 3.24% and 1.55%, respectively, from 3.53% and 1.66% as of September 30, 2020.

The Companys provision for loan and lease losses totaled $7.1 million for the fourth quarter of 2020, down from $20.3 million in the prior quarter. As of December 31, 2020, the Companys allowance to total loans and leases was 1.98%, which was up from 1.87% on September 30, 2020, and from 0.98% at December 31, 2019. Excluding the $273 million impact of PPP loans that are on the Companys balance sheet, the ALLL to total loans and leases was 2.12% (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 $3.1 million on December 31, 2020.

Strong Capital Levels

As of December 31, 2020, the Companys total risk-based capital ratio was 15.13%, the common equity tier 1 ratio was 10.69% and the tangible common equity to tangible assets ratio was 9.08%. By comparison, these respective ratios were 14.93%, 10.44% and 8.42% as of September 30, 2020.

Focus on Three Strategic Long-Term Initiatives

As part of the Companys 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.

These initiatives are long-term targets. Due to the impact of the COVID-19 pandemic, among other factors, the Company may not be able to achieve these goals for the full year 2021.

Supplemental Presentation and Where to Find ItIn addition to this press release, the Company has included a supplemental presentation that provides further information regarding the Companys loan exposures and deferrals. Investors, analysts and other interested persons may find this presentation on the Securities and Exchange Commissions EDGAR filing system atwww.sec.gov/edgar.shtml, or on the Companys website at www.qcrh.com.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, January 28, 2021, 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 February 11, 2021. The replay access information is 877-344-7529 (international 412-317-0088); access code 10151041. A webcast of the teleconference can be accessed at the Companys 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 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 24 locations in Iowa, Missouri, Wisconsin and Illinois. As of December 31, 2020, the Company had approximately $5.7 billion in assets, $4.3 billion in loans and $4.6 billion in deposits. For additional information, please visit the Companys 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 Companys 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 new presidential administration 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 Companys general business; (v) changes in interest rates and prepayment rates of the Companys 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 Companys financial results, is included in the Companys filings with the Securities and Exchange Commission.

Contacts: Todd A. Gipple Kim K. GarrettPresident Vice PresidentChief Operating Officer Corporate CommunicationsChief Financial Officer Investor Relations Manager(309) 743-7745 (319) 743-7006tgipple@qcrh.com kgarret@qcrh.com

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited) As of December 31, September June 30, March 31, December 31, 30, 2020 2020 2020 2020 2019 (dollars in thousands) CONDENSED BALANCE SHEET Cash and due from $ 61,329 $ 68,932 $ 88,577 $ 169,827 $ 76,254 banksFederal funds soldand 95,676 302,668 142,900 206,708 157,691 interest-bearingdepositsSecurities 838,131 782,088 748,883 684,571 611,341 Net loans/leases 4,166,753 4,168,395 4,079,432 3,662,435 3,654,204 Intangibles 11,381 11,902 13,872 14,421 14,970 Goodwill 74,066 74,066 74,248 74,248 74,748 Derivatives 222,757 236,381 225,164 195,973 87,827 Other assets 212,704 220,128 220,920 213,134 220,049 Assets held for - - 10,765 10,758 11,966 saleTotal assets $ 5,682,797 $ 5,864,560 $ 5,604,761 $ 5,232,075 $ 4,909,050 Total deposits $ 4,599,137 $ 4,672,268 $ 4,349,775 $ 4,170,478 $ 3,911,051 Total borrowings 177,114 226,962 376,250 244,399 278,955 Derivatives 229,270 244,510 233,589 203,744 88,436 Other liabilities 83,483 148,207 87,539 71,185 90,254 Liabilities held - - 1,588 3,130 5,003 for saleTotal stockholders' 593,793 572,613 556,020 539,139 535,351 equityTotal liabilitiesand stockholders' $ 5,682,797 $ 5,864,560 $ 5,604,761 $ 5,232,075 $ 4,909,050 equity ANALYSIS OF LOAN PORTFOLIOLoan/lease mix: Commercial and $ 1,726,723 $ 1,823,049 $ 1,850,110 $ 1,484,979 $ 1,507,825 industrial loansCommercial real 2,107,629 1,999,715 1,869,162 1,783,086 1,736,396 estate loansDirect financing 66,016 73,011 79,105 83,324 87,869 leasesResidential real 252,121 245,032 241,069 237,742 239,904 estate loansInstallment andother consumer 91,302 102,471 99,150 106,728 109,352 loansDeferred loan/leaseorigination costs, 7,338 4,699 1,663 8,809 8,859 net of feesTotal loans/leases $ 4,251,129 $ 4,247,977 $ 4,140,259 $ 3,704,668 $ 3,690,205 Less allowance forestimated losses on 84,376 79,582 60,827 42,233 36,001 loans/leasesNet loans/leases $ 4,166,753 $ 4,168,395 $ 4,079,432 $ 3,662,435 $ 3,654,204 ANALYSIS OFSECURITIES PORTFOLIOSecurities mix: U.S. governmentsponsored agency $ 15,336 $ 18,437 $ 17,472 $ 19,457 $ 20,078 securitiesMunicipal 627,523 569,075 526,192 493,664 447,853 securitiesResidentialmortgage-backed and 132,842 134,147 145,672 122,853 120,587 related securitiesAsset backed 40,683 40,665 39,797 28,499 16,887 securitiesOther securities 21,747 19,764 19,750 20,098 5,936 Total securities $ 838,131 $ 782,088 $ 748,883 $ 684,571 $ 611,341 ANALYSIS OF DEPOSITSDeposit mix: Noninterest-bearing $ 1,145,378 $ 1,175,085 $ 1,177,482 $ 829,782 $ 777,224 demand depositsInterest-bearing 2,987,469 2,938,194 2,488,755 2,440,907 2,407,502 demand depositsTime deposits 460,659 499,021 560,982 617,979 571,343 Brokered deposits 5,631 59,968 122,556 281,810 154,982 Total deposits $ 4,599,137 $ 4,672,268 $ 4,349,775 $ 4,170,478 $ 3,911,051 ANALYSIS OF BORROWINGSBorrowings mix: Term FHLB advances $ - $ 40,000 $ 90,000 $ 55,000 $ 50,000 Overnight FHLB 15,000 - 55,000 40,000 109,300 advancesFRB borrowings - - 100,000 30,000 - Other short-term 5,430 30,430 24,818 13,067 13,423 borrowingsSubordinated notes 118,691 118,577 68,516 68,455 68,394 Junior subordinated 37,993 37,955 37,916 37,877 37,838 debenturesTotal borrowings $ 177,114 $ 226,962 $ 376,250 $ 244,399 $ 278,955

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited) For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 (dollars in thousands, except per share data) INCOME STATEMENT Interest income $ 49,851 $ 50,890 $ 48,650 $ 48,982 $ 52,977 Interest expense 6,144 6,309 7,694 11,276 13,058 Net interest 43,707 44,581 40,956 37,706 39,919 incomeProvision forloan/lease 7,080 20,342 19,915 8,367 979 lossesNet interestincome afterprovision for $ 36,627 $ 24,239 $ 21,041 $ 29,339 $ 38,940 loan/leaselosses Trust department $ 2,388 $ 2,280 $ 2,227 $ 2,312 $ 2,365 feesInvestmentadvisory and 926 1,266 1,399 1,727 1,589 management feesDeposit service 1,875 1,403 1,286 1,477 1,787 feesGain on sales ofresidential real 1,462 1,370 1,196 652 823 estate loansGain on sales ofgovernmentguaranteed 224 - - - 159 portions ofloansSwap fee income 21,402 26,688 19,927 6,804 7,409 Securities gains 617 1,802 65 - 26 (losses), netEarnings onbank-owned life 461 502 612 329 533 insuranceDebit card fees 923 946 775 758 766 Correspondent 270 220 198 215 194 banking feesGain on sale ofassets and - - - - 12,286 liabilities ofsubsidiaryOther 1,469 1,482 941 922 1,868 Totalnoninterest $ 32,017 $ 37,959 $ 28,626 $ 15,196 $ 29,805 income Salaries andemployee $ 30,446 $ 25,999 $ 21,304 $ 18,519 $ 24,220 benefitsOccupancy andequipment 4,917 3,807 3,748 4,032 4,019 expenseProfessional anddata processing 3,871 3,758 3,646 3,369 3,570 feesPost-acquisitioncompensation,transition and 25 (32 ) 70 151 1,855 integrationcostsDisposition 64 192 (83 ) 517 3,325 costsFDIC insurance,other insurance 1,272 1,301 908 683 523 and regulatoryfeesLoan/lease 465 403 339 228 349 expenseNet cost of(income from)and gains/losses (4 ) 16 (332 ) 13 232 on operations ofother realestateAdvertising and 1,276 750 552 682 1,670 marketingBank service 523 488 501 504 516 chargesLosses onliability 1,457 1,874 429 147 288 extinguishmentCorrespondent 205 205 212 216 216 banking expenseIntangibles 521 531 548 549 560 amortizationGoodwill - - - 500 3,000 impairmentLoss on sale of (147 ) 305 - - - subsidiaryOther 1,473 1,241 1,288 1,313 1,951 Totalnoninterest $ 46,364 $ 40,838 $ 33,130 $ 31,423 $ 46,294 expense Net incomebefore income $ 22,280 $ 21,360 $ 16,537 $ 13,112 $ 22,451 taxesFederal andstate income tax 4,009 4,016 2,798 1,884 6,560 expenseNet income $ 18,271 $ 17,344 $ 13,739 $ 11,228 $ 15,891 Basic EPS $ 1.16 $ 1.10 $ 0.87 $ 0.71 $ 1.01 Diluted EPS $ 1.14 $ 1.09 $ 0.86 $ 0.70 $ 0.99 Weighted averagecommon shares 15,775,596 15,767,152 15,747,056 15,796,796 15,772,703 outstandingWeighted averagecommon andcommon 15,973,054 15,923,578 15,895,336 16,011,456 16,033,043 equivalentsharesoutstanding

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited) For the Year Ended December 31, December 31, 2020 2019 (dollars in thousands, except per share data) INCOME STATEMENT Interest income $ 198,373 $ 216,076 Interest expense 31,423 60,517 Net interest income 166,950 155,559 Provision for loan/lease losses 55,704 7,066 Net interest income after provision $ 111,246 $ 148,493 for loan/lease losses Trust department fees $ 9,207 $ 9,559 Investment advisory and management 5,318 6,995 feesDeposit service fees 6,041 6,812 Gain on sales of residential real 4,680 2,571 estate loansGain on sales of government 224 748 guaranteed portions of loansSwap fee income 74,821 28,295 Securities gains (losses), net 2,484 (30 ) Earnings on bank-owned life 1,904 1,973 insuranceDebit card fees 3,402 3,357 Correspondent banking fees 903 773 Gain on sale of assets and - 12,286 liabilities of subsidiaryOther 4,814 5,429 Total noninterest income $ 113,798 $ 78,768 Salaries and employee benefits $ 96,268 $ 92,063 Occupancy and equipment expense 16,504 15,106 Professional and data processing 14,644 13,381 feesPost-acquisition compensation, 214 3,582 transition and integration costsDisposition costs 690 3,325 FDIC insurance, other insurance and 4,164 2,955 regulatory feesLoan/lease expense 1,435 1,097 Net cost of (income from) and gains/losses on operation of other real (307 ) 3,789 estateAdvertising and marketing 3,260 4,548 Bank service charges 2,016 2,009 Losses on liability extinguishment 3,907 436 Correspondent banking expense 838 836 Intangibles amortization 2,149 2,266 Goodwill impairment 500 3,000 Loss on sale of subsidiary 158 - Other 5,315 6,841 Total noninterest expense $ 151,755 $ 155,234 Net income before taxes $ 73,289 $ 72,027 Income tax expense 12,707 14,619 Net income $ 60,582 $ 57,408 Basic EPS $ 3.89 $ 3.65 Diluted EPS $ 3.80 $ 3.60 Weighted average common shares 15,571,650 15,730,016 outstandingWeighted average common and common 15,952,637 15,967,775 equivalent shares outstanding

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited) As of and for the Quarter Ended For the Year Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 (dollars in thousands, except per share data) COMMON SHARE DATACommon shares 15,805,711 15,792,357 15,790,611 15,773,736 15,828,098 outstandingBook value percommon share $ 37.57 $ 36.26 $ 35.21 $ 34.18 $ 33.82 (1)Tangible bookvalue per $ 32.16 $ 30.82 $ 29.63 $ 28.56 $ 28.15 common share(2)Closing stock $ 39.59 $ 27.41 $ 31.18 $ 27.07 $ 43.86 priceMarket $ 625,748 $ 432,869 $ 492,351 $ 426,995 $ 694,220 capitalizationMarket price / 105.38 % 75.60 % 88.55 % 79.20 % 129.69 % book valueMarket price /tangible book 123.09 % 88.95 % 105.23 % 94.79 % 155.76 % valueEarnings percommon share $ 3.84 $ 3.69 $ 3.55 $ 3.54 $ 3.65 (basic) LTM(3)Price earnings 10.31 x 7.43 x 8.78 x 7.65 x 12.02 x ratio LTM (3)TCE / TA (4) 9.08 % 8.42 % 8.48 % 8.76 % 9.25 % CONDENSEDSTATEMENT OFCHANGES IN STOCKHOLDERS'EQUITYBeginning $ 572,613 $ 556,020 $ 539,139 $ 535,351 $ 519,743 balanceNet income 18,271 17,344 13,739 11,228 15,891 Othercomprehensive 3,157 (614 ) 3,622 (3,691 ) (683 ) income (loss),net of taxCommon stockcash dividends (947 ) (945 ) (945 ) (942 ) (947 ) declaredProceeds fromissuance of9,400 sharesof commonstock as a - - - - 399 result of theperformancebased targetsmet for BatesCompaniesRepurchase andcancellationof 100,932shares ofcommon stock - - - (3,780 ) - as a result ofa sharerepurchaseprogramOther (5) 699 808 465 973 948 Ending balance $ 593,793 $ 572,613 $ 556,020 $ 539,139 $ 535,351 REGULATORYCAPITAL RATIOS (6):Totalrisk-based 15.13 % 14.93 % 13.71 % 13.54 % 13.33 % capital ratioTier 1risk-based 11.49 % 11.25 % 11.07 % 11.16 % 11.04 % capital ratioTier 1leverage 9.49 % 9.21 % 8.91 % 10.19 % 9.53 % capital ratioCommon equity 10.69 % 10.44 % 10.25 % 10.31 % 10.18 % tier 1 ratio KEYPERFORMANCE RATIOS ANDOTHER METRICSReturn onaverage assets 1.25 % 1.19 % 0.95 % 0.91 % 1.23 % 1.08 % 1.09 %(annualized)Return onaverage total 12.43 % 12.06 % 9.88 % 8.23 % 11.93 % 10.70 % 11.09 %equity(annualized)Net interest 3.25 % 3.36 % 3.14 % 3.40 % 3.36 % 3.28 % 3.29 %marginNet interestmargin (TEY) 3.45 % 3.51 % 3.27 % 3.56 % 3.51 % 3.44 % 3.43 %(Non-GAAP)(7)Efficiencyratio 61.23 % 49.48 % 47.61 % 59.40 % 66.40 % 54.05 % 66.18 %(Non-GAAP) (8)Gross loansand leases / 74.81 % 72.43 % 74.01 % 70.95 % 75.36 % 74.81 % 74.80 %total assets(10)Gross loansand leases / 92.43 % 90.92 % 95.18 % 88.83 % 94.35 % 92.43 % 94.95 %total deposits(10)Effective tax 17.99 % 18.80 % 16.92 % 14.37 % 29.22 % 17.34 % 16.26 %rateFull-timeequivalent 714 687 712 703 697 714 766 employees AVERAGE BALANCESAssets $ 5,842,299 $ 5,820,555 $ 5,800,164 $ 4,948,311 $ 5,147,754 $ 5,604,074 $ 5,088,055 Loans/leases 4,250,951 4,185,275 3,999,523 3,686,410 3,868,435 4,031,567 3,853,918 Deposits 4,742,602 4,726,881 4,732,626 3,954,707 4,227,572 4,540,266 4,228,418 Totalstockholders' 588,042 575,061 556,047 545,548 532,624 566,240 507,383 equity (1) Includes accumulated other comprehensive income (loss).(2) Includes accumulated other comprehensive income (loss) and excludesintangible assets.(3) LTM : Last twelve months.(4) TCE / TCA : tangible common equity / total tangible assets. See GAAP tonon-GAAP reconciliations.(5) Includes mostly common stock issued for options exercised and the employeestock purchase plan, as well as stock-based compensation.(6) Ratios for the current quarter are subject to change upon final calculationfor 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) Growth in full-time equivalents from September 30, 2020 to December 31,2020 due to the addition of new positions created to build scale.Decrease from June 30, 2020 to September 30, 2020 due to sale of BatesCompanies and interns employed only during the summer.(10) Excludes assets held for sale as of December 31, 2019, March 31, 2020 andJune 30, 2020.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited) ANALYSIS OF NET INTEREST INCOME AND MARGIN For the Quarter Ended December 31, 2020 September 30, 2020 December 31, 2019 Average Interest Average Average Interest Average Average Interest Average Balance Earned or Yield Balance Earned or Yield Balance Earned or Yield Paid or Cost Paid or Cost Paid or Cost (dollars in thousands) Fed funds $ 1,216 $ 1 0.08 % $ 2,205 $ 1 0.18 % $ 2,933 $ 12 1.62 % soldInterest-bearingdeposits at 279,024 82 0.12 % 321,679 92 0.11 % 208,040 868 1.66 % financialinstitutionsSecurities 795,696 7,207 3.62 % 749,425 6,836 3.66 % 610,676 5,913 3.84 % (1)Restrictedinvestment 18,790 236 4.92 % 19,714 249 4.94 % 21,226 283 5.29 % securitiesLoans (1) 4,250,951 44,956 4.21 % 4,185,275 45,654 4.34 % 3,868,435 47,684 4.89 % Total earning $ 5,345,677 $ 52,482 3.91 % $ 5,278,298 $ 52,832 3.99 % $ 4,711,310 $ 54,760 4.61 % assets (1) Interest-bearing $ 3,033,119 $ 2,060 0.27 % $ 2,932,988 $ 2,086 0.28 % $ 2,520,696 $ 6,547 1.03 % depositsTime deposits 530,813 1,752 1.31 % 638,031 2,399 1.50 % 865,392 4,631 2.12 % Short-term 19,115 3 0.17 % 26,996 11 0.17 % 19,491 87 1.77 % borrowingsFederal HomeLoan Bank 33,207 80 0.94 % 57,078 211 1.45 % 87,527 210 0.95 % advancesSubordinated 118,612 1,678 5.66 % 77,783 1,031 5.30 % 68,356 1,004 5.83 % debenturesJuniorsubordinated 37,969 571 5.88 % 37,936 571 5.89 % 37,813 579 6.07 % debenturesTotalinterest-bearing $ 3,772,835 $ 6,144 0.64 % $ 3,770,812 $ 6,309 0.66 % $ 3,599,275 $ 13,058 1.44 % liabilities Net interest $ 46,338 $ 46,523 $ 41,702 income (1)Net interest 3.25 % 3.36 % 3.36 % margin (2)Net interestmargin (TEY) 3.45 % 3.51 % 3.51 % (Non-GAAP) (1)(2) (3)Adjusted netinterestmargin (TEY) 3.37 % 3.44 % 3.43 % (Non-GAAP)(1) (2) (3) For the Year Ended December 31, 2020 December 31, 2019 Average Interest Average Average Interest Average Balance Earned or Yield Balance Earned or Yield Paid or Cost Paid or Cost (dollars in thousands) Fed funds $ 2,398 $ 19 0.79 % $ 8,898 $ 204 2.29 % soldInterest-bearingdeposits at 315,616 669 0.21 % 179,635 3,910 2.18 % financialinstitutionsSecurities 715,808 26,773 3.74 % 635,650 24,150 3.80 % (1)Restrictedinvestment 20,270 1,031 5.00 % 21,559 1,174 5.45 % securitiesLoans (1) 4,031,567 178,097 4.42 % 3,857,547 193,365 5.01 % Total earning $ 5,085,659 $ 206,589 4.06 % $ 4,703,289 $ 222,803 4.74 % assets (1) Interest-bearing $ 2,797,669 $ 11,980 0.43 % $ 2,443,989 $ 29,898 1.22 % depositsTime deposits 690,222 11,289 1.64 % 966,745 20,977 2.17 % Short-term 22,625 84 0.37 % 16,837 363 2.16 % borrowingsFederal HomeLoan Bank 74,167 1,087 1.44 % 108,536 2,895 2.67 % advancesOther - - 0.00 % 13,563 512 3.77 % borrowingsSubordinated 83,404 4,697 5.63 % 60,883 3,564 5.85 % debenturesJuniorsubordinated 37,913 2,286 5.93 % 37,751 2,308 6.11 % debenturesTotalinterest-bearing $ 3,706,000 $ 31,423 0.85 % $ 3,648,304 $ 60,517 1.66 % liabilities Net interest $ 175,166 $ 162,286 income (1)Net interest 3.28 % 3.31 % margin (2)Net interestmargin (TEY) 3.44 % 3.45 % (Non-GAAP) (1)(2) (3)Adjusted netinterestmargin (TEY) 3.38 % 3.36 % (Non-GAAP)(1) (2) (3) (1) Includes nontaxable securities and loans. Interest earned and yields onnontaxable 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 December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 (dollars in thousands, except per share data) ROLLFORWARDOF ALLOWANCE FOR LOAN/LEASE LOSSESBeginning $ 79,582 $ 60,827 $ 42,233 $ 36,001 $ 36,116 balanceProvisioncharged to 7,080 20,342 19,915 8,367 979 expenseLoans/leases (2,779 ) (1,819 ) (1,450 ) (2,335 ) (1,182 ) charged offRecoveries onloans/leases 493 232 129 200 88 previouslycharged offEnding $ 84,376 $ 79,582 $ 60,827 $ 42,233 $ 36,001 balance NONPERFORMING ASSETSNonaccrual $ 13,940 $ 17,597 $ 12,099 $ 11,628 $ 7,902 loans/leasesAccruingloans/leases 3 86 99 1,419 33 past due 90days or moreTroubled debtrestructures 741 1,061 920 545 979 - accruingTotalnonperforming 14,684 18,744 13,118 13,592 8,914 loans/leasesOther real 20 125 157 3,298 4,129 estate ownedOtherrepossessed 135 110 25 45 41 assetsTotalnonperforming $ 14,839 $ 18,979 $ 13,300 $ 16,935 $ 13,084 assets ASSET QUALITY RATIOSNonperformingassets / 0.26 % 0.32 % 0.24 % 0.32 % 0.27 % total assets(1)Allowance /total loans/ 1.98 % 1.87 % 1.47 % 1.14 % 0.98 % leases (2)Allowance /nonperforming 574.61 % 424.57 % 463.69 % 310.72 % 403.87 % loans/leases(2)Netcharge-offsas a % of 0.05 % 0.04 % 0.03 % 0.06 % 0.03 % average loans/leases INTERNALLYASSIGNED RISK RATING (3)Specialmention $ 71,482 $ 79,587 $ 104,608 $ 34,738 $ 19,952 (rating 6)Substandard 66,081 70,409 39,855 36,612 33,649 (rating 7)Doubtful - - - - - (rating 8) $ 137,563 $ 149,996 $ 144,463 $ 71,350 $ 53,601 Criticized $ 137,563 $ 149,996 $ 144,463 $ 71,350 $ 53,601 loans (4)Classified 66,081 70,409 39,855 36,612 33,649 loans (5) Criticizedloans as a % 3.24 % 3.53 % 3.49 % 1.93 % 1.45 % of totalloans/leasesClassifiedloans as a % 1.55 % 1.66 % 0.96 % 0.99 % 0.91 % of totalloans/leases (1) Excludesassets held for sale.(2) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminates the allowance and impacts these ratios.(3) Amounts exclude the government guaranteed portion, if any. The Companyassigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.(5) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited) For the Quarter Ended For the Year Ended December 31, September 30, December 31, December 31, December 31, SELECT FINANCIAL 2020 2020 2019 2020 2019 DATA - SUBSIDIARIES (dollars in thousands) TOTAL ASSETS Quad City Bank and $ 2,149,469 $ 2,205,935 $ 1,682,477 Trust (1) m2 Equipment 243,090 241,452 239,794 Finance, LLC Cedar Rapids Bank and 1,952,308 2,012,182 1,572,324 Trust Community State Bank - 1,000,670 937,017 853,834 Ankeny Springfield First 779,955 803,478 748,753 Community Bank TOTAL DEPOSITS Quad City Bank and $ 1,866,635 $ 1,955,360 $ 1,458,587 Trust (1) Cedar Rapids Bank and 1,378,108 1,399,267 1,248,598 Trust Community State Bank - 875,400 822,261 735,089 Ankeny Springfield First 569,036 592,528 531,498 Community Bank TOTAL LOANS & LEASES Quad City Bank and $ 1,556,762 $ 1,556,798 $ 1,329,667 Trust (1) m2 Equipment 244,325 241,783 236,735 Finance, LLC Cedar Rapids Bank and 1,362,056 1,387,372 1,174,963 Trust Community State Bank - 707,681 683,086 639,270 Ankeny Springfield First 624,629 620,721 546,306 Community Bank TOTAL LOANS & LEASES / TOTAL DEPOSITS Quad City Bank and 83 % 80 % 91 % Trust (1) Cedar Rapids Bank and 99 % 99 % 94 % Trust Community State Bank - 81 % 83 % 87 % Ankeny Springfield First 110 % 105 % 103 % Community Bank TOTAL LOANS & LEASES / TOTAL ASSETS Quad City Bank and 72 % 71 % 79 % Trust (1) Cedar Rapids Bank and 70 % 69 % 75 % Trust Community State Bank - 71 % 73 % 75 % Ankeny Springfield First 80 % 77 % 73 % Community Bank ALLOWANCE AS A PERCENTAGE OF LOANS/ LEASES Quad City Bank and 1.95 % 1.86 % 1.03 % Trust (1) m2 Equipment 2.63 % 2.53 % 1.51 % Finance, LLC Cedar Rapids Bank and 2.35 % 2.22 % 1.14 % Trust (2) Community State Bank - 2.02 % 1.92 % 1.04 % Ankeny (2) Springfield First 1.23 % 1.09 % 0.41 % Community Bank (2) RETURN ON AVERAGE ASSETS Quad City Bank and 1.52 % 0.56 % 1.44 % 0.99 % 1.30 % Trust (1) Cedar Rapids Bank and 0.59 % 2.66 % 1.82 % 1.81 % 1.84 % Trust Community State Bank - 3.25 % 0.82 % 1.38 % 1.25 % 1.34 % Ankeny Springfield First 3.02 % 1.52 % 1.44 % 1.74 % 1.32 % Community Bank NET INTEREST MARGIN PERCENTAGE (3) Quad City Bank and 3.19 % 3.07 % 3.55 % 3.17 % 3.39 % Trust (1) Cedar Rapids Bank and 3.51 % 3.54 % 3.49 % 3.47 % 3.43 % Trust (5) Community State Bank - 3.77 % 4.12 % 4.35 % 3.89 % 4.33 % Ankeny (4) Springfield First 4.03 % 3.75 % 3.95 % 3.87 % 3.93 % Community Bank (6) ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET INTEREST MARGIN, NET Cedar Rapids Bank and $ 103 $ 217 $ 103 $ 430 $ 547 Trust Community State Bank - 132 56 94 325 877 Ankeny Springfield First 880 598 775 2,671 3,088 Community Bank QCR Holdings, (38 ) (38 ) (41 ) (155 ) (168 ) Inc. (7) (1) Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, 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. Includes nontaxable securities and loans. Interest earned and yields on(3) nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. Community State Bank's net interest margin percentage includes various purchase(4) accounting adjustments. Excluding those adjustments, net interestmargin would have been 3.69% for the quarter ended December 31, 2020, 4.06% for the quarter ended September 30, 2020 and 4.27% for thequarter ended December 31, 2019. Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net(5) interestmargin would have been 3.47% for the quarter ended December 31, 2020, 3.46% for the quarter ended September 30, 2020 and 3.46% for thequarter ended December 31, 2019. Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net(6) interestmargin would have been 3.59% for the quarter ended December 31, 2020, 4.02% for the quarter ended September 30, 2020 and 3.47% for thequarter ended December 31, 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 December 31, September 30, June 30, March 31, December 31, GAAP TONON-GAAP 2020 2020 2020 2020 2019 RECONCILIATIONS (dollars in thousands, except per share data)TANGIBLE COMMONEQUITY TO TANGIBLE ASSETSRATIO (1) Stockholders' $ 593,793 $ 572,613 $ 556,020 $ 539,139 $ 535,351 equity (GAAP)Less:Intangible 85,447 85,968 88,120 88,669 89,717 assetsTangible commonequity $ 508,346 $ 486,645 $ 467,900 $ 450,470 $ 445,634 (non-GAAP) Total assets $ 5,682,797 $ 5,864,560 $ 5,604,761 $ 5,232,075 $ 4,909,050 (GAAP)Less:Intangible 85,447 85,968 88,120 88,669 89,717 assetsTangible assets $ 5,597,350 $ 5,778,592 $ 5,516,641 $ 5,143,406 $ 4,819,333 (non-GAAP) Tangible commonequity totangible assets 9.08 % 8.42 % 8.48 % 8.76 % 9.25 % ratio(non-GAAP) TANGIBLE COMMONEQUITY TOTANGIBLE ASSETS RATIO EXCLUDINGPPP LOANS (1) Stockholder's $ 593,793 $ 572,613 $ 556,020 $ 539,139 $ 535,351 equity (GAAP)Less: PPP loaninterest income 7,691 4,934 2,085 - - (post-tax) (2)Less:Intangible 85,447 85,968 88,120 88,669 89,717 assetsTangible commonequity,excluding PPP $ 500,655 $ 481,711 $ 465,815 $ 450,470 $ 445,634 loan income(non-GAAP) Total assets $ 5,682,797 $ 5,864,560 $ 5,604,761 $ 5,232,075 $ 4,909,050 (GAAP)Less: PPP loans 273,146 357,506 358,052 - - Less:Intangible 85,447 85,968 88,120 88,669 89,717 assetsTangibleassets,excluding PPP $ 5,324,204 $ 5,421,086 $ 5,158,589 $ 5,143,406 $ 4,819,333 loans(non-GAAP) Tangible commonequity totangible assetsratio, 9.40 % 8.89 % 9.03 % 8.76 % 9.25 % excluding PPPloans(non-GAAP) (1) This ratio is a non-GAAP financial measure. The Company's managementbelieves that this measurement is important to many investors in themarketplace who are interested in changesperiod-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure isreconciled to stockholders' equity and total assets, which are the mostdirectly 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 For the Quarter Ended For the Year Ended RECONCILIATIONS December 31, September 30, June 30, March 31, December 31, December 31, December 31, ADJUSTED NET 2020 2020 2020 2020 2019 2020 2019 INCOME (1) (dollars in thousands, except per share data) Net income $ 18,271 $ 17,344 $ 13,739 $ 11,228 $ 15,891 $ 60,582 $ 57,408 (GAAP) Less non-coreitems (post-tax) (2):Income: Securities gains 487 1,424 51 - 21 $ 1,962 $ (22 ) (losses), netLoss on (210 ) - - - $ (210 ) syndicated loanGain on sale ofassets and - - - - 8,539 - 8,539 liabilities ofsubsidiaryTotal non-coreincome $ 277 $ 1,424 $ 51 $ - $ 8,560 $ 1,752 $ 8,517 (non-GAAP) Expense: Losses on debtextinguishment, $ 1,151 $ 1,480 $ 339 $ 116 $ 228 $ 3,087 $ 345 netGoodwill - - - 500 3,000 500 3,000 impairmentDisposition 51 152 (66 ) 408 2,627 545 2,627 costsTax expense onexpected - - - - 790 - 790 liquidation ofRB&T BOLIPost-acquisitioncompensation,transition and 20 (25 ) 55 119 1,465 169 2,828 integrationcostsLoss on sale of (102 ) 212 - - - 110 - subsidiaryTotal non-coreexpense $ 1,119 $ 1,819 $ 329 $ 1,143 $ 8,110 $ 4,411 $ 9,590 (non-GAAP)Adjusted netincome $ 19,113 $ 17,739 $ 14,016 $ 12,372 $ 15,441 $ 63,240 $ 58,480 (non-GAAP) (1) PRE-PROVISION/PRE-TAX ADJUSTED INCOME (1)Net income $ 18,271 $ 17,344 $ 13,739 $ 11,228 $ 15,891 $ 60,582 $ 57,408 (GAAP)Less: Non-coreincome not 351 1,802 65 - 12,313 2,218 12,258 tax-effectedPlus: Non-coreexpense not 1,399 2,339 416 1,315 9,258 5,469 11,132 tax-effectedProvision 7,080 20,342 19,915 8,367 979 55,704 7,066 expenseFederal andstate income tax 4,009 4,016 2,798 1,884 6,560 12,707 14,619 expensePre-provision/pre-tax adjusted $ 30,408 $ 42,239 $ 36,803 $ 22,794 $ 20,375 $ 132,244 $ 77,966 income(non-GAAP) (1) PRE-PROVISION/PRE-TAX ADJUSTEDRETURN ON AVERAGE ASSETS(NON-GAAP) Pre-provision/pre-tax adjusted $ 30,408 $ 42,239 $ 36,803 $ 22,794 $ 20,375 $ 132,244 $ 77,966 income(non-GAAP) Average Assets $ 5,842,299 $ 5,820,555 $ 5,800,164 $ 4,948,311 $ 5,147,754 $ 5,604,074 $ 5,102,980 Pre-provision/pre-tax adjustedreturn on 2.08 % 2.90 % 2.54 % 1.84 % 1.58 % 2.36 % 2.04 % average assets(non-GAAP) ADJUSTEDEARNINGS PER COMMON SHARE (1) Adjusted netincome $ 19,113 $ 17,739 $ 14,016 $ 12,372 $ 15,441 $ 63,240 $ 58,480 (non-GAAP) (fromabove) Weighted averagecommon shares 15,775,596 15,767,152 15,747,056 15,796,796 15,772,703 15,571,650 15,730,016 outstandingWeighted averagecommon andcommon 15,973,054 15,923,578 15,895,336 16,011,456 16,033,043 15,952,637 15,967,775 equivalentsharesoutstanding Adjustedearnings per common share(non-GAAP):Basic $ 1.21 $ 1.13 $ 0.89 $ 0.78 $ 0.98 $ 4.06 $ 3.72 Diluted $ 1.20 $ 1.11 $ 0.88 $ 0.77 $ 0.96 $ 3.96 $ 3.66 ADJUSTED RETURNON AVERAGE ASSETS (1) Adjusted netincome $ 19,113 $ 17,739 $ 14,016 $ 12,372 $ 15,441 $ 63,240 $ 58,480 (non-GAAP) (fromabove) Average Assets $ 5,842,299 $ 5,820,555 $ 5,800,164 $ 4,948,311 $ 5,147,754 $ 5,604,074 $ 5,102,980 Adjusted returnon averageassets 1.31 % 1.22 % 0.97 % 1.00 % 1.20 % 1.13 % 1.15 % (annualized)(non-GAAP) NET INTEREST MARGIN (TEY) (4) Net interest $ 43,707 $ 44,581 $ 40,948 $ 37,698 $ 39,919 $ 166,950 $ 155,559 income (GAAP) Plus: Taxequivalent 2,631 1,942 1,728 1,790 1,783 8,216 6,727 adjustment (3) Net interestincome - tax $ 46,338 $ 46,523 $ 42,676 $ 39,488 $ 41,702 $ 175,166 $ 162,286 equivalent(Non-GAAP) Less:Acquisition 1,077 833 736 625 931 3,271 4,344 accounting netaccretion Adjusted net $ 45,261 $ 45,690 $ 41,940 $ 38,863 $ 40,771 $ 171,895 $ 157,942 interest income Average earning $ 5,345,677 $ 5,278,298 $ 5,252,663 $ 4,461,018 $ 4,711,310 $ 5,085,659 $ 4,703,289 assets Net interest 3.25 % 3.36 % 3.14 % 3.40 % 3.36 % 3.28 % 3.31 % margin (GAAP)Net interestmargin (TEY) 3.45 % 3.51 % 3.27 % 3.56 % 3.51 % 3.44 % 3.45 % (Non-GAAP)Adjusted netinterest margin 3.37 % 3.44 % 3.21 % 3.50 % 3.43 % 3.38 % 3.36 % (TEY) (Non-GAAP) EFFICIENCY RATIO (5) Noninterest $ 46,364 $ 40,838 $ 33,122 $ 31,415 $ 46,294 $ 151,755 $ 155,234 expense (GAAP) Net interest $ 43,707 $ 44,581 $ 40,948 $ 37,698 $ 39,919 $ 166,950 $ 155,559 income (GAAP)Noninterest 32,017 37,959 28,626 15,196 29,805 113,798 78,768 income (GAAP)Total income $ 75,724 $ 82,540 $ 69,574 $ 52,894 $ 69,724 $ 280,748 $ 234,327 Efficiency ratio(noninterestexpense/total 61.23 % 49.48 % 47.61 % 59.39 % 66.40 % 54.05 % 66.25 % income)(Non-GAAP) ALLOWANCE FORLOAN AND LEASELOSSES TO TOTALLOANS AND LEASES,EXCLUDING PPPLOANS (6) Allowance forloan and lease $ 84,376 $ 79,582 $ 60,827 $ 42,233 $ 36,001 $ 84,376 $ 36,001 losses Total loans and $ 4,251,129 $ 4,247,977 $ 4,140,259 $ 3,704,668 $ 3,690,205 $ 4,251,129 $ 3,690,205 leasesLess: PPP loans 273,146 357,506 358,052 358,052 - 273,146 - Total loans andleases, $ 3,977,983 $ 3,890,471 $ 3,782,207 $ 3,346,616 $ 3,690,205 $ 3,977,983 $ 3,690,205 excluding PPPloans Allowance forloan and leaselosses to totalloans and 2.12 % 2.05 % 1.61 % 1.26 % 0.98 % 2.12 % 0.98 % leases,excluding PPPloans LOAN GROWTHANNUALIZED, EXCLUDING PPPLOANSTotal loans and $ 4,251,129 $ 4,247,977 $ 4,140,259 $ 3,704,668 $ 3,690,205 $ 4,251,129 $ 3,690,205 leasesLess: PPP loans 273,146 357,506 358,052 - - 273,146 - Total loans andleases, $ 3,977,983 $ 3,890,471 $ 3,782,207 $ 3,704,668 $ 3,690,205 $ 3,977,983 $ 3,690,205 excluding PPPloans Loan growthannualized, 9.00 % 11.45 % 8.37 % 1.57 % 8.86 % 7.80 % -0.07 % excluding PPPloans (1) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc.common stockholders, Adjusted earnings per common share and Adjusted return onaverage assets arenon-GAAP financial measures. The Company's managementbelieves that these measurements are important to investors as they exclude non-recurring income and expense items,therefore, they provide a morerealistic run-rate for future periods. In compliance with applicable rules ofthe SEC, this non-GAAP measure is reconciled to net income, which isthe mostdirectly comparable GAAP financial measure.(2) Nonrecurring items (post-tax) are calculated using an estimated effectivetax rate of 21% with the exception of goodwill impairment which is not deductible for tax and gain/loss on sale of assets andliabilities ofsubsidiary 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'smanagement utilizes this measurement to take into account the tax benefitassociated with certain loansand securities. It is also standard industrypractice to measure net interest margin using tax-equivalent measures. Incompliance with applicable rules of the SEC, this non-GAAPmeasure is reconciled to net interest income, which is the most directly comparable GAAPfinancial measure. In addition, the Company calculates net interest marginwithout theimpact of acquisition accounting net accretion as this canfluctuate and it's difficult to provide a more realistic run-rate for futureperiods.(5) Efficiency ratio is a non-GAAP measure. The Company's management utilizesthis ratio to compare to industry peers. The ratio is used to calculateoverhead as a percentage of revenue.In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, netinterest income and noninterest income, which are the mostdirectly comparableGAAP financial measures.(6) Allowance for loan and lease losses to total loans and leases, excludingPPP loans is a non-GAAP measure. The Company's management utilizes this ratioto remove from the allowancecalculation the impact of PPP loans which are fully guaranteed by the federal government and for which these loans have noallowance for loan and lease loss allocation.