GlobeNewswire Inc | Oct 27, 2021 04:05PM EDT

October 27, 2021

Third Quarter 2021 Highlights

-- Record net income of $31.6 million, or $1.99 per diluted share -- Net Interest Margin (NIM) increased by 8 basis points and Adjusted NIM (TEY)(non-GAAP) increased by 9 bps to 3.36% and 3.53%, respectively -- Adjusted net interest income (non-GAAP) increased $2.8 million, or 6.2% -- Annualized core loan and lease growth (non-GAAP) of 23% for the quarter and 18% YTD, excluding SBA Paycheck Protection Program (PPP) loans -- Annualized core deposit growth of 15.6% for the quarter -- Nonperforming assets improved by 32% for the quarter and now represent only 0.11% of total assets -- Allowance for credit losses (ACL) to total loans/leases of 1.79%, excluding PPP loans (non-GAAP)

MOLINE, Ill., Oct. 27, 2021 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the Company) today announced record net income of $31.6 million and diluted earnings per share (EPS) of $1.99 for the third quarter of 2021, compared to net income of $22.3 million and diluted EPS of $1.39 for the second quarter of 2021.

Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the third quarter of 2021 were the same as GAAP net income and diluted EPS, as there were no meaningful non-core adjustments during the quarter. For the second quarter of 2021, adjusted net income (non-GAAP) was $22.5 million and adjusted diluted EPS (non-GAAP) was $1.40. For the third quarter of 2020, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $17.7 million and $1.11, respectively.

For the Quarter Ended September 30, June September 30, 30, $ in millions (except per share data) 2021 2021 2020 Net Income $ 31.6 $ 22.3 $ 17.3 Diluted EPS $ 1.99 $ 1.39 $ 1.09 Adjusted Net Income (non-GAAP) $ 31.6 $ 22.5 $ 17.7 Adjusted Diluted EPS (non-GAAP) $ 1.99 $ 1.40 $ 1.11

______________________________Adjusted non-GAAP measurements of financial performance exclude non-recurring income and expense items that management believes are not reflective of the anticipated future operation of the Companys business. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

We are very pleased with our outstanding financial performance for the third quarter, said Larry J. Helling, Chief Executive Officer. We delivered another record quarter of net income, driven by exceptional loan growth, strong fee income, an expanded net interest margin and strong credit quality. We grew core loans 23% on an annualized basis, largely funded with core deposit growth of 16%. This exceptional performance is reflective of our core values, one of which is our relationship-based community banking model, emphasizing the importance of strong relationships with new and existing clients.

Annualized Loan and Lease Growth of 23% for the Quarter and 18% YTD, excluding PPP Loans (non-GAAP)

During the third quarter of 2021, the Companys core loans and leases, excluding PPP loans, increased $246.0 million to a total of $4.5 billion. Core loan and lease growth during the quarter was 23.0% on an annualized basis and was funded by core deposit growth and some excess liquidity. Core deposits (excluding brokered deposits) increased by $183.0 million during the quarter. The Companys wholesale funding portfolio has been reduced to predominately subordinated debt that qualifies as regulatory capital.

Our continued robust loan growth was driven primarily by strength in our Specialty Finance Group as well as continued growth in our traditional commercial lending and leasing business, added Helling. Given the 18% annualized loan growth we have delivered over the first nine months of 2021, combined with our current pipeline, we are now targeting organic loan growth for the full year 2021 of between 16% and 18%.

Record Net Interest Income of $46.2 million

Net interest income for the third quarter of 2021 totaled $46.2 million, compared to $43.5 million for the second quarter of 2021 and $44.6 million for the third quarter of 2020. Adjusted net interest income (non-GAAP) during the quarter was $48.5 million, an increase of $2.8 million, or 6.2%, from the prior quarter, due to an increase in adjusted NIM combined with strong loan/lease growth. Adjusted net interest income (non-GAAP) was $45.7 million for the third quarter of 2020. Acquisition-related net accretion totaled $456 thousand for the third quarter of 2021, up from $291 thousand in the second quarter of 2021 and down from $833 thousand for the third quarter of 2020.

In the third quarter, reported NIM was 3.36% and tax-equivalent yield basis (non-GAAP) NIM was 3.56%, compared to 3.28% and 3.46% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.53%, up 9 basis points from the second quarter. The increase in Adjusted NIM (non-GAAP) during the quarter was primarily due to a 7 basis point increase in the yield on earning assets (adjusted for acquisition-related net accretion, non-GAAP) driven by fees associated with $63.9 million of PPP loans that were forgiven during the quarter. In addition, adjusted NIM benefited from a decline of 2 basis points in the total cost of interest-bearing funds (due to both mix and rate).

For the Quarter Ended September June 30, September 30, 30, 2021 2021 2020 NIM 3.36% 3.28% 3.36% NIM (TEY)(non-GAAP) * 3.56% 3.46% 3.51% Adjusted NIM (TEY)(non-GAAP) * 3.53% 3.44% 3.44% * See GAAP to non-GAAP reconciliations

We expanded our NIM again during the third quarter, bolstered by higher PPP fees, lower deposit costs and relatively stable core loan yields in this highly competitive lending environment, said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. With our strong loan and lease growth and margin expansion, net interest income grew by 6% in the quarter when excluding the impact of acquisition accounting.

Noninterest Income of $34.7 million

Noninterest income for the third quarter of 2021 totaled $34.7 million, compared to $19.3 million for the second quarter of 2021. The increase was primarily due to a $15.3 million increase in capital markets revenue from the prior quarter. Wealth management revenue was $3.8 million for the quarter, consistent with the second quarter.

Capital markets revenue totaled $24.9 million for the quarter, which benefited from a number of swap transactions that were scheduled to close in the second quarter carrying over into the third quarter, added Gipple. Capital markets revenue averaged $16 million per quarter for the first nine months of 2021 and $16.3 million for the last eight quarters. This gives us confidence in the sustainability of this important source of fee income and supports our continued guidance range of $14 to $18 million per quarter.

Noninterest Expenses of $41.4 million

Noninterest expense for the third quarter of 2021 totaled $41.4 million, compared to $35.7 million for the second quarter of 2021 and $40.8 million for the third quarter of 2020. The linked-quarter increase was primarily due to higher performance-based salary and benefits expense of $5.2 million, driven by strong capital markets revenue production and earnings performance during the quarter. Additionally, the Company recorded a $1.5 million charge related to the write-down of certain fixed assets. Partially offsetting these increases was a $1.3 million net gain on the sale of other real estate.

Asset Quality Remains Strong and NPAs Improved

Nonperforming assets (NPAs) totaled $6.8 million at the end of the third quarter, a decrease of $3.3 million from the second quarter of 2021. The decrease was primarily due to the sale of a commercial property classified as other real estate owned and a reduction in nonaccrual loans that either returned to performing status or were monetized during the quarter. The ratio of NPAs to total assets improved to 0.11% on September 30, 2021, compared to 0.17% on June 30, 2021, and 0.31% on September 30, 2020. In addition, the Companys criticized loans and classified loans to total loans and leases decreased to 2.57% and 1.29%, respectively, from 2.97% and 1.80% as of June 30, 2021.

The Company did not record a provision for credit losses in the third quarter of 2021, primarily due to continued strong asset quality and a reduction in nonperforming loans. Similarly, there was no provision for credit losses recorded in the second quarter of 2021. As of September 30, 2021, the ACL on total loans/leases was 1.75%, compared to 1.79% as of June 30, 2021. Excluding PPP loans of $84 million, the ACL to total loans/leases as of September 30, 2021, was 1.79% (non-GAAP).

Continued Strong Capital Levels

As of September 30, 2021, the Companys total risk-based capital ratio was 14.51%, the common equity tier 1 ratio was 10.45% and the tangible common equity to tangible assets ratio (non-GAAP) was 9.54%. By comparison, these respective ratios were 14.72%, 10.52% and 9.55% as of June 30, 2021. During the third quarter, the Company continued its existing share repurchase program and purchased and retired 193,153 shares at an average price of $48.50 per share.

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:

-- Generate 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.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, October 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 November 11, 2021. The replay access information is 877-344-7529 (international 412-317-0088); access code 10159948. 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 offers equipment loans and leases to businesses 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 September 30, 2021, the Company had approximately $6.0 billion in assets, $4.6 billion in loans and $4.9 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; (ii)the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof, or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii)changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB; (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; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; and (xiii) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the 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 September June 30, March 31, December 31, September 30, 30, 2021 2021 2021 2020 2020 (dollars in thousands)CONDENSED BALANCE SHEET Cash and due from $ 57,310 $ 55,598 $ 78,814 $ 61,329 $ 68,932banksFederal funds soldand 70,826 88,780 55,056 95,676 302,668interest-bearingdepositsSecurities, net ofallowance for 828,719 810,445 799,825 838,131 782,088credit lossesNet loans/leases 4,519,060 4,338,811 4,279,220 4,166,753 4,168,395Intangibles 9,857 10,365 10,873 11,381 11,902Goodwill 74,066 74,066 74,066 74,066 74,066Derivatives 198,393 193,395 122,668 222,757 236,381Other assets 256,277 233,705 224,625 212,704 220,128Total assets $ 6,014,508 $ 5,805,165 $ 5,645,147 $ 5,682,797 $ 5,864,560 Total deposits $ 4,871,828 $ 4,688,935 $ 4,631,782 $ 4,599,137 $ 4,672,268Total borrowings 183,514 198,908 188,601 177,114 226,962Derivatives 201,450 196,092 125,863 229,270 244,510Other liabilities 107,902 90,754 90,182 83,483 148,207Total stockholders' 649,814 630,476 608,719 593,793 572,613equityTotal liabilitiesand stockholders' $ 6,014,508 $ 5,805,165 $ 5,645,147 $ 5,682,797 $ 5,864,560equity ANALYSIS OF LOAN PORTFOLIOLoan/lease mix: (1) Commercial andindustrial - $ 175,155 $ 182,882 $ 168,842 revolvingCommercial and 1,465,580 1,505,384 1,616,144 industrial - otherCommercial realestate, owner 434,014 427,734 461,272 occupiedCommercial realestate, non-owner 644,850 618,879 610,582 occupiedConstruction and 852,418 708,289 607,798 land developmentMulti-family 529,727 466,804 396,272 Direct financing 50,237 56,153 60,134 leases1-4 family real 376,067 382,142 368,927 estateConsumer 71,682 69,438 71,080 Total loans/leases $ 4,599,730 $ 4,417,705 $ 4,361,051 Less allowance for 80,670 78,894 81,831 credit losses (2)Net loans/leases $ 4,519,060 $ 4,338,811 $ 4,279,220 Loan/lease mix: (1) Commercial and $ 1,634,047 $ 1,680,853 $ 1,779,062 $ 1,726,723 $ 1,823,049industrial loansCommercial real 2,550,160 2,319,423 2,174,897 2,107,629 1,999,715estate loansDirect financing 49,585 55,371 59,229 66,016 73,011leasesResidential real 270,522 268,193 254,900 252,121 245,032estate loansInstallment andother consumer 85,363 86,925 87,053 91,302 102,471loansDeferred loan/leaseorigination costs, 10,053 6,940 5,910 7,338 4,699net of feesTotal loans/leases $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129 $ 4,247,977Less allowance for 80,670 78,894 81,831 84,376 79,582credit losses (2)Net loans/leases $ 4,519,060 $ 4,338,811 $ 4,279,220 $ 4,166,753 $ 4,168,395 ANALYSIS OFSECURITIES PORTFOLIOSecurities mix: U.S. governmentsponsored agency $ 23,689 $ 14,670 $ 14,581 $ 15,336 $ 18,437securitiesMunicipal 649,486 641,603 614,649 627,523 569,075securitiesResidentialmortgage-backed and 100,744 106,139 118,051 132,842 134,147related securitiesAsset backed 30,607 31,778 39,815 40,683 40,665securitiesOther securities 24,367 16,429 12,903 21,747 19,764Total securities $ 828,893 $ 810,619 $ 799,999 $ 838,131 $ 782,088Less allowance for 174 174 174 - -credit losses (2)Net securities $ 828,719 $ 810,445 $ 799,825 $ 838,131 $ 782,088 ANALYSIS OF DEPOSITSDeposit mix: Noninterest-bearing $ 1,342,273 $ 1,258,885 $ 1,269,578 $ 1,145,378 $ 1,175,085demand depositsInterest-bearing 3,086,711 2,976,696 2,916,054 2,987,469 2,938,194demand depositsTime deposits 441,743 452,171 445,067 460,659 499,021Brokered deposits 1,101 1,183 1,084 5,631 59,968Total deposits $ 4,871,828 $ 4,688,935 $ 4,631,782 $ 4,599,137 $ 4,672,268 ANALYSIS OF BORROWINGSBorrowings mix: Term FHLB advances $ - $ - $ - $ - $ 40,000Overnight FHLB 30,000 40,000 25,000 15,000 -advances (3)FRB borrowings - - - - -Other short-term 1,600 7,070 6,840 5,430 30,430borrowingsSubordinated notes 113,811 113,771 118,731 118,691 118,577Junior subordinated 38,103 38,067 38,030 37,993 37,955debenturesTotal borrowings $ 183,514 $ 198,908 $ 188,601 $ 177,114 $ 226,962 (1) The Company adopted ASU 2016-13 "CECL", effective January 1, 2021, whichincluded a change in class of receivable and segment categories.(2) The Company adopted ASU 2016-13 "CECL", effective January 1, 2021, whichrequires an allowance for credit losses ("ACL") on loans/leases, off-balancesheet ("OBS")exposures and held to maturity ("HTM") securities, recordedthrough the income statement within the provision for credit losses. The Day 1adjustments to ACL were asfollows: loans/leases ($8.1) million, OBS $9.1million, HTM securities $183 thousand.(3) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 0.30%.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited) For the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (dollars in thousands, except per share data)INCOME STATEMENT Interest income $ 51,667 $ 48,903 $ 47,565 $ 49,851 $ 50,890 Interest expense 5,438 5,387 5,590 6,144 6,309 Net interest 46,229 43,516 41,975 43,707 44,581 incomeProvision forcredit losses - - 6,713 7,080 20,342 (1)Net interestincome afterprovision for $ 46,229 $ 43,516 $ 35,262 $ 36,627 $ 24,239 loan/leaselosses Trust department $ 2,714 $ 2,848 $ 2,801 $ 2,388 $ 2,280 feesInvestmentadvisory and 1,054 1,039 940 926 1,266 management feesDeposit service 1,588 1,492 1,408 1,875 1,403 feesGain on sales ofresidential real 954 1,184 1,337 1,462 1,370 estate loansGain on sales ofgovernmentguaranteed - - - 224 - portions ofloansSwap fee income/capital markets 24,885 9,568 13,557 21,402 26,688 revenueSecurities gains - (88 ) - 617 1,802 (losses), netEarnings onbank-owned life 446 451 471 461 502 insuranceDebit card fees 1,085 1,084 975 923 946 Correspondent 265 269 314 270 220 banking feesOther 1,661 1,449 1,686 1,469 1,482 Totalnoninterest $ 34,652 $ 19,296 $ 23,489 $ 32,017 $ 37,959 income Salaries andemployee $ 28,207 $ 23,044 $ 24,847 $ 30,446 $ 25,999 benefitsOccupancy andequipment 4,122 3,965 4,108 4,917 3,807 expenseProfessional anddata processing 3,568 3,702 3,443 3,871 3,758 feesPost-acquisitioncompensation,transition and - - - 25 (32 )integrationcostsDisposition - - 8 64 192 costsFDIC insurance,other insurance 1,108 986 1,065 1,272 1,301 and regulatoryfeesLoan/lease 308 457 300 465 403 expenseNet cost of(income from)and gains/losses (1,346 ) (113 ) 39 (4 ) 16 on operations ofother realestateAdvertising and 1,095 853 627 1,276 750 marketingBank service 525 572 523 523 488 chargesLosses onliability - - - 1,457 1,874 extinguishmentCorrespondent 201 198 200 205 205 banking expenseIntangibles 508 508 508 521 531 amortizationLoss (gain) onsale of - - - (147 ) 305 subsidiaryOther 3,091 1,503 1,560 1,473 1,241 Totalnoninterest $ 41,387 $ 35,675 $ 37,228 $ 46,364 $ 40,838 expense Net incomebefore income $ 39,494 $ 27,137 $ 21,523 $ 22,280 $ 21,360 taxesFederal andstate income tax 7,929 4,788 3,541 4,009 4,016 expenseNet income $ 31,565 $ 22,349 $ 17,982 $ 18,271 $ 17,344 Basic EPS $ 2.02 $ 1.41 $ 1.14 $ 1.16 $ 1.10 Diluted EPS $ 1.99 $ 1.39 $ 1.12 $ 1.14 $ 1.09 Weighted averagecommon shares 15,635,123 15,813,932 15,803,643 15,775,596 15,767,152 outstandingWeighted averagecommon andcommon 15,869,798 16,045,239 16,025,548 15,973,054 15,923,578 equivalentsharesoutstanding (1) Provision for credit losses onlyincluded provision for loans/leases for years prior to 2021.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited)

For Nine Months Ended September 30, September 30, 2021 2020 (dollars in thousands, except per share data)INCOME STATEMENT Interest income $ 148,135 $ 148,522 Interest expense 16,415 25,279 Net interest income 131,720 123,243 Provision for credit losses (1) 6,713 48,624 Net interest income after $ 125,007 $ 74,619 provision for loan/lease losses Trust department fees $ 8,363 $ 6,819 Investment advisory and 3,033 4,392 management feesDeposit service fees 4,488 4,166 Gain on sales of residential 3,475 3,218 real estate loansSwap fee income/capital markets 48,010 53,419 revenueSecurities gains (losses), net (88 ) 1,867 Earnings on bank-owned life 1,368 1,443 insuranceDebit card fees 3,144 2,479 Correspondent banking fees 848 633 Other 4,796 3,345 Total noninterest income $ 77,437 $ 81,781 Salaries and employee benefits $ 76,098 $ 65,822 Occupancy and equipment expense 12,195 11,587 Professional and data processing 10,713 10,773 feesPost-acquisition compensation, - 189 transition and integration costsDisposition costs 8 626 FDIC insurance, other insurance 3,159 2,892 and regulatory feesLoan/lease expense 1,065 970 Net cost of (income from) and gains/losses on operations of other real (1,420 ) (303 )estateAdvertising and marketing 2,575 1,984 Bank service charges 1,620 1,493 Losses on liability - 2,450 extinguishmentCorrespondent banking expense 599 633 Intangibles amortization 1,524 1,628 Goodwill impairment - 500 Loss on sale of subsidiary - 305 Other 6,154 3,842 Total noninterest expense $ 114,290 $ 105,391 Net income before income taxes $ 88,154 $ 51,009 Federal and state income tax 16,258 8,698 expenseNet income $ 71,896 $ 42,311 Basic EPS $ 4.54 $ 2.68 Diluted EPS $ 4.48 $ 2.65 Weighted average common shares 15,829,124 15,770,335 outstandingWeighted average common andcommon equivalent shares 16,058,420 15,945,832 outstanding (1) Provision for credit losses only included provision for loans/leases for years prior to 2021.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited) As of and for the Quarter Ended For the Nine Months Ended September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2021 2021 2021 2020 2020 2021 2020 (dollars in thousands, except per share data)COMMON SHARE DATACommon shares 15,590,428 15,763,522 15,843,732 15,805,711 15,792,357 outstandingBook value per $ 41.68 $ 40.00 $ 38.42 $ 37.57 $ 36.26 common share (1)Tangible bookvalue per common $ 36.30 $ 34.64 $ 33.06 $ 32.16 $ 30.82 share (Non-GAAP)(2)Closing stock $ 51.44 $ 48.09 $ 47.22 $ 39.59 $ 27.41 priceMarket $ 801,972 $ 758,068 $ 748,141 $ 625,748 $ 432,869 capitalizationMarket price / 123.42 % 120.24 % 122.90 % 105.38 % 75.60 % book valueMarket price /tangible book 141.72 % 138.83 % 142.83 % 123.09 % 88.95 % valueEarnings percommon share $ 5.73 $ 4.81 $ 4.27 $ 3.84 $ 3.69 (basic) LTM (3)Price earnings 8.98 x 10.00 x 11.06 x 10.31 x 7.43 x ratio LTM (3)TCE / TA 9.54 % 9.55 % 9.42 % 9.08 % 8.42 % (Non-GAAP) (4) CONDENSEDSTATEMENT OFCHANGES IN STOCKHOLDERS'EQUITYBeginning $ 630,476 $ 608,719 $ 593,793 $ 572,613 $ 556,020 balanceCumulativeeffect from the - - (937 ) - - adoption of ASU2016-13 "CECL"Net income 31,565 22,349 17,982 18,271 17,344 Othercomprehensive (2,546 ) 4,179 (1,751 ) 3,157 (614 ) income (loss),net of taxCommon stockcash dividends (946 ) (951 ) (949 ) (947 ) (945 ) declaredRepurchase andcancellation ofshares of commonstock as a (9,367 ) (4,800 ) - - - result of ashare repurchaseprogramOther (5) 632 980 581 699 808 Ending balance $ 649,814 $ 630,476 $ 608,719 $ 593,793 $ 572,613 REGULATORYCAPITAL RATIOS (6):Total risk-based 14.51 % 14.72 % 14.85 % 14.95 % 14.93 % capital ratioTier 1risk-based 11.16 % 11.26 % 11.31 % 11.34 % 11.25 % capital ratioTier 1 leverage 10.28 % 10.29 % 10.10 % 9.49 % 9.21 % capital ratioCommon equity 10.45 % 10.52 % 10.55 % 10.55 % 10.44 % tier 1 ratio KEY PERFORMANCERATIOS AND OTHER METRICSReturn onaverage assets 2.12 % 1.56 % 1.27 % 1.25 % 1.19 % 1.66 % 1.02 %(annualized)Return onaverage total 19.30 % 14.33 % 11.91 % 12.43 % 12.06 % 15.27 % 10.51 %equity(annualized)Net interest 3.36 % 3.28 % 3.26 % 3.25 % 3.36 % 3.30 % 3.29 %marginNet interestmargin (TEY) 3.56 % 3.46 % 3.43 % 3.45 % 3.51 % 3.49 % 3.44 %(Non-GAAP)(7)Efficiency ratio 51.17 % 56.80 % 56.87 % 61.23 % 49.48 % 54.64 % 51.40 %(Non-GAAP) (8)Gross loans andleases / total 76.48 % 76.10 % 77.25 % 74.81 % 72.43 % 76.48 % 72.43 %assetsGross loans andleases / total 94.41 % 94.22 % 94.15 % 92.43 % 90.92 % 94.41 % 90.92 %depositsEffective tax 20.08 % 17.64 % 16.45 % 17.99 % 18.80 % 18.44 % 17.05 %rateFull-timeequivalent 724 725 720 714 687 724 687 employees (9) AVERAGE BALANCES Assets $ 5,960,336 $ 5,739,067 $ 5,668,850 $ 5,842,299 $ 5,820,555 $ 5,789,753 $ 5,524,087 Loans/leases 4,529,136 4,412,322 4,271,782 4,250,951 4,185,275 4,405,355 3,957,903 Deposits 4,779,876 4,709,732 4,628,889 4,742,602 4,726,881 4,706,719 4,472,328 Totalstockholders' 654,186 624,000 604,012 588,042 575,061 627,583 536,578 equity (1) Includes accumulated other comprehensive income (loss).(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP).(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 toNon-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.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited) ANALYSIS OF NET INTEREST INCOME AND MARGIN For the Quarter Ended September 30, 2021 June 30, 2021 September 30, 2020 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 $ 3,030 $ 1 0.10 % $ 1,817 $ 1 0.06 % $ 2,205 $ 1 0.18 %soldInterest-bearingdeposits at 99,024 39 0.16 % 88,396 35 0.16 % 321,679 92 0.11 %financialinstitutionsSecurities 799,471 7,646 3.82 % 798,732 7,294 3.66 % 749,425 6,836 3.66 %(1)Restrictedinvestment 20,910 262 4.97 % 19,614 238 4.79 % 19,714 249 4.94 %securitiesLoans (1) 4,529,136 46,427 4.07 % 4,412,322 43,776 3.98 % 4,185,275 45,654 4.34 %Total earning $ 5,451,571 $ 54,375 3.96 % $ 5,320,881 $ 51,344 3.87 % $ 5,278,298 $ 52,832 3.99 %assets (1) Interest-bearing $ 3,041,941 $ 2,183 0.28 % $ 2,978,382 $ 2,050 0.28 % $ 2,932,988 $ 2,086 0.28 %depositsTime deposits 461,210 1,090 0.94 % 440,599 1,184 1.08 % 638,031 2,399 1.50 %Short-term 6,858 1 0.10 % 10,883 1 0.05 % 26,996 11 0.17 %borrowingsFederal HomeLoan Bank 54,293 41 0.30 % 21,802 15 0.28 % 57,078 211 1.45 %advancesSubordinated 113,789 1,554 5.46 % 115,339 1,570 5.45 % 77,783 1,031 5.30 %debenturesJuniorsubordinated 38,084 569 5.84 % 38,044 564 5.86 % 37,936 571 5.89 %debenturesTotalinterest-bearing $ 3,716,175 $ 5,438 0.58 % $ 3,605,049 $ 5,384 0.60 % $ 3,770,812 $ 6,309 0.66 %liabilities Net interest $ 48,937 $ 45,960 $ 46,523 income (1)Net interest 3.36 % 3.28 % 3.36 %margin (2)Net interestmargin (TEY) 3.56 % 3.46 % 3.51 %(Non-GAAP) (1)(2) (3)Adjusted net interest margin 3.53 % 3.44 % 3.44 %(TEY) (Non-GAAP) (1) (2) (3) For the Nine Months Ended September 30, 2021 September 30, 2020 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 $ 1,503 $ 1 0.13 % $ 2,795 $ 19 0.89 % soldInterest-bearingdeposits at 101,225 110 0.15 % 327,902 587 0.24 % financialinstitutionsSecurities 802,715 21,989 3.65 % 688,985 19,567 3.78 % (1)Restrictedinvestment 19,540 718 4.85 % 20,767 795 5.03 % securitiesLoans (1) 4,405,355 132,728 4.03 % 3,957,903 133,141 4.49 % Total earning $ 5,330,338 $ 155,546 3.90 % $ 4,998,352 $ 154,109 4.12 % assets (1) Interest-bearing $ 3,000,766 $ 6,219 0.28 % $ 2,718,613 $ 9,920 0.49 % depositsTime deposits 449,996 3,716 1.10 % 743,746 9,537 1.71 % Short-term 7,560 4 0.08 % 23,804 81 0.45 % borrowingsFederal HomeLoan Bank 29,875 66 0.29 % 87,920 1,007 1.50 % advancesSubordinated 115,927 4,718 5.43 % 71,582 3,019 5.63 % debenturesJuniorsubordinated 38,045 1,692 5.86 % 37,894 1,715 5.95 % debenturesTotalinterest-bearing $ 3,642,169 $ 16,415 0.60 % $ 3,683,559 $ 25,279 0.91 % liabilities Net interest $ 139,131 $ 128,830 income (1)Net interest 3.30 % 3.29 % margin (2)Net interestmargin (TEY) 3.49 % 3.44 % (Non-GAAP) (1)(2) (3)Adjusted net interest margin 3.46 % 3.38 % (TEY) (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 usinga 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 September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 (dollars in thousands, except per share data)ROLLFORWARDOF ALLOWANCEFOR CREDIT LOSSES ONLOANS/LEASESBeginning $ 78,894 $ 81,831 $ 84,376 $ 79,582 $ 60,827 balanceAdoption ofASU 2016-13 - - (8,102 ) - - "CECL" - Day1 adjustmentProvisioncharged to 1,895 (141 ) 5,993 7,080 20,342 expenseLoans/leases (287 ) (3,674 ) (713 ) (2,779 ) (1,819 )charged offRecoveries onloans/leases 168 878 277 493 232 previouslycharged offEnding $ 80,670 $ 78,894 $ 81,831 $ 84,376 $ 79,582 balance NONPERFORMING ASSETSNonaccrual $ 6,818 $ 8,230 $ 13,863 $ 13,940 $ 17,597 loans/leasesAccruingloans/leases 14 57 - 3 86 past due 90days or moreTotalnonperforming 6,832 8,287 13,863 13,943 17,683 loans/leasesOther real - 1,820 173 20 125 estate ownedOtherrepossessed - - 50 135 110 assetsTotalnonperforming $ 6,832 $ 10,107 $ 14,086 $ 14,098 $ 17,918 assets ASSET QUALITY RATIOSNonperformingassets / 0.11 % 0.17 % 0.25 % 0.25 % 0.31 %total assetsACL for loansand leases / 1.75 % 1.79 % 1.88 % 1.98 % 1.87 %total loans/leases (1)ACL for loansand leases /nonperforming 1180.77 % 952.02 % 590.28 % 605.15 % 450.05 %loans/leases(1)Netcharge-offsas a % of 0.00 % 0.06 % 0.01 % 0.05 % 0.04 %average loans/leases INTERNALLYASSIGNED RISK RATING (2)Specialmention $ 58,634 $ 51,613 $ 53,466 $ 71,482 $ 79,587 (rating 6)Substandard 59,402 79,719 84,982 66,081 70,409 (rating 7)Doubtful - - - - - (rating 8) $ 118,036 $ 131,332 $ 138,448 $ 137,563 $ 149,996 Criticized $ 118,036 $ 131,332 $ 138,448 $ 137,563 $ 149,996 loans (3)Classified 59,402 79,719 84,982 66,081 70,409 loans (4) Criticizedloans as a % 2.57 % 2.97 % 3.17 % 3.24 % 3.53 %of totalloans/leasesClassifiedloans as a % 1.29 % 1.80 % 1.95 % 1.55 % 1.66 %of totalloans/leases (1) Prior to adoption of ASU 2016-13 "CECL", upon acquisition and per GAAP,acquired loans were recorded at market value, which eliminates the allowanceand impacts this ratio.There have been no acquisitions since adopting ASU2016-13 "CECL", which requires an allowance to be established on acquiredloans.(2) Amounts exclude the government guaranteed portion, if any. The Companyassigns internal risk ratings of Pass (Rating 2) for the government guaranteedportion.(3) Criticized loans are defined as C&I and CRE loans with internally assignedrisk ratings of 6, 7, or 8, regardless of performance.(4) Classified loans are defined as C&I and CRE loans with internally assignedrisk ratings of 7 or 8, regardless of performance.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited) For the Quarter Ended For the Nine Months Ended September 30, June 30, September 30, September September 30, 30, SELECT FINANCIAL 2021 2021 2020 2021 2020 DATA - SUBSIDIARIES (dollars in thousands) TOTAL ASSETS Quad City Bank and $ 2,106,631 $ 2,059,634 $ 2,205,935 Trust (1) m2 Equipment 259,543 255,338 241,452 Finance, LLC Cedar Rapids Bank and 2,019,018 1,913,761 2,012,182 Trust Community State Bank - 1,140,933 1,079,929 937,017 Ankeny Springfield First 880,143 850,067 803,478 Community Bank TOTAL DEPOSITS Quad City Bank and $ 1,797,969 $ 1,810,772 $ 1,955,360 Trust (1) Cedar Rapids Bank and 1,526,144 1,395,721 1,399,267 Trust Community State Bank - 994,042 938,428 822,261 Ankeny Springfield First 605,947 608,676 592,528 Community Bank TOTAL LOANS & LEASES Quad City Bank and $ 1,636,170 $ 1,577,681 $ 1,556,798 Trust (1) m2 Equipment 262,962 258,520 241,783 Finance, LLC Cedar Rapids Bank and 1,410,160 1,360,202 1,387,372 Trust Community State Bank - 834,533 786,208 683,086 Ankeny Springfield First 718,867 693,614 620,721 Community Bank TOTAL LOANS & LEASES / TOTAL DEPOSITS Quad City Bank and 91 % 87 % 80 % Trust (1) Cedar Rapids Bank and 92 % 97 % 99 % Trust Community State Bank - 84 % 84 % 83 % Ankeny Springfield First 119 % 114 % 105 % Community Bank TOTAL LOANS & LEASES / TOTAL ASSETS Quad City Bank and 78 % 77 % 71 % Trust (1) Cedar Rapids Bank and 70 % 71 % 69 % Trust Community State Bank - 73 % 73 % 73 % Ankeny Springfield First 82 % 82 % 77 % Community Bank ACL ON LOANS /LEASES AS A PERCENTAGE OF LOANS/ LEASES Quad City Bank and 1.88 % 1.91 % 1.86 % Trust (1) m2 Equipment 3.78 % 3.61 % 2.53 % Finance, LLC Cedar Rapids Bank and 1.85 % 1.92 % 2.22 % Trust (2) Community State Bank - 1.73 % 1.69 % 1.92 % Ankeny (2) Springfield First 1.30 % 1.35 % 1.09 % Community Bank (2) RETURN ON AVERAGE ASSETS Quad City Bank and 1.66 % 1.64 % 0.56 % 1.55 % 0.81 % Trust (1) Cedar Rapids Bank and 3.93 % 2.39 % 2.66 % 2.95 % 2.25 % Trust Community State Bank - 1.17 % 1.16 % 0.82 % 1.05 % 0.53 % Ankeny Springfield First 2.09 % 1.77 % 1.52 % 1.69 % 1.28 % Community Bank NET INTEREST MARGIN PERCENTAGE (3) Quad City Bank and 3.47 % 3.30 % 3.07 % 3.32 % 3.17 % Trust (1) Cedar Rapids Bank and 3.68 % 3.60 % 3.54 % 3.61 % 3.45 % Trust (4) Community State Bank - 3.78 % 3.66 % 4.12 % 3.71 % 3.94 % Ankeny (5) Springfield First 3.67 % 3.54 % 3.75 % 3.59 % 3.82 % Community Bank (6) ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET INTEREST MARGIN, NET Cedar Rapids Bank and $ 64 $ 92 $ 217 $ 169 $ 327 Trust Community State Bank - 52 68 56 $ 437 193 Ankeny Springfield First 376 168 598 $ 755 1,791 Community Bank QCR Holdings, (36 ) (37 ) (38 ) $ (110 ) (117 ) Inc. (7) Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this(1) entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLCis also presented separately for certain (applicable) measurements. Prior to adoption of ASU 2016-13 "CECL", upon acquisition and per GAAP, acquired loans were recorded at market value, which eliminates the allowance(2) and impacts this ratio.There have been no acquisitions since adopting ASU 2016-13 "CECL", which requires an allowance to be established on acquired loans. Includes nontaxable securities and loans. Interest earned and yields on(3) nontaxable securities and loans are determined on a tax equivalent basis usinga 21% tax rate. Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net(4) interestmargin (Non-GAAP) would have been 3.66% for the quarter ended September 30, 2021, 3.67% for the quarter ended June 30, 2021 and 3.46% for thequarter ended September 30, 2020. Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interestmargin(5) (Non-GAAP) would have been 3.66% for the quarter ended September 30, 2021, 3.63% for the quarter ended June 30, 2021 and 4.06% for thequarter ended September 30, 2020. Springfield First Community Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net(6) interestmargin (Non-GAAP) would have been 3.67% for the quarter ended September 30, 2021, 3.50% for the quarter ended June 30, 2021 and 4.02% for thequarter ended September 30, 2020.(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 September 30, June 30, March 31, December 31, September 30,GAAP TONON-GAAP 2021 2021 2021 2020 2020 RECONCILIATIONS (dollars in thousands, except per share data)TANGIBLE COMMONEQUITY TO TANGIBLE ASSETSRATIO (1) Stockholders' $ 649,814 $ 630,476 $ 608,719 $ 593,793 $ 572,613 equity (GAAP)Less:Intangible 83,923 84,431 84,939 85,447 85,968 assetsTangible commonequity $ 565,891 $ 546,045 $ 523,780 $ 508,346 $ 486,645 (non-GAAP) Total assets $ 6,014,508 $ 5,805,165 $ 5,645,147 $ 5,682,797 $ 5,864,560 (GAAP)Less:Intangible 83,923 84,431 84,939 85,447 85,968 assetsTangible assets $ 5,930,585 $ 5,720,734 $ 5,560,208 $ 5,597,350 $ 5,778,592 (non-GAAP) Tangible commonequity to tangible 9.54 % 9.55 % 9.42 % 9.08 % 8.42 %assets ratio(non-GAAP) TANGIBLE COMMONEQUITY TOTANGIBLE ASSETS RATIO EXCLUDINGPPP LOANS (1) Stockholder's $ 649,814 $ 630,476 $ 608,719 $ 593,793 $ 572,613 equity (GAAP)Less: PPP loaninterest income 12,297 10,788 9,479 7,691 4,934 (post-tax) (2)Less:Intangible 83,923 84,431 84,939 85,447 85,968 assetsTangible commonequity, excluding $ 553,594 $ 535,257 $ 514,301 $ 500,655 $ 481,711 PPP loan income(non-GAAP) Total assets $ 6,014,508 $ 5,805,165 $ 5,645,147 $ 5,682,797 $ 5,864,560 (GAAP)Less: PPP loans 83,575 147,506 243,860 273,146 357,506 Less:Intangible 83,923 84,431 84,939 85,447 85,968 assetsTangibleassets,excluding PPP $ 5,847,010 $ 5,573,228 $ 5,316,348 $ 5,324,204 $ 5,421,086 loans(non-GAAP) Tangible commonequity totangible assetsratio, 9.47 % 9.60 % 9.67 % 9.40 % 8.89 %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 themostdirectly 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 Nine Months EndedRECONCILIATIONS September 30, June 30, March 31, December 31, September 30, September 30, September 30,ADJUSTED NET 2021 2021 2021 2020 2020 2021 2020 INCOME (1) (dollars in thousands, except per share data) Net income $ 31,565 $ 22,349 $ 17,982 $ 18,271 $ 17,344 $ 71,896 $ 42,311 (GAAP) Less non-coreitems (post-tax) (2):Income: Securities gains - (69 ) - 487 1,424 $ (69 ) $ 1,475 (losses), netMark to Marketgains (losses) (13 ) (58 ) 129 - - 58 $ - on derivatives,netGain on sale of 28 - - - - 28 loanLoss on - - - (210 ) - - $ - syndicated loanTotal non-coreincome $ 15 $ (127 ) $ 129 $ 277 $ 1,424 $ 17 $ 1,475 (non-GAAP) Expense: Losses on debtextinguishment, $ - $ - $ - $ 1,151 $ 1,480 $ - $ 1,936 netGoodwill - - - - - - 500 impairmentDisposition - - 7 51 152 7 495 costsAcquisition - - - - - - - costs (4)Separation - - 734 - - 734 - agreementPost-acquisitioncompensation,transition and - - - 20 (25 ) - 149 integrationcostsLoss on sale of - - - (102 ) 212 - 212 subsidiaryTotal non-coreexpense $ - $ - $ 741 $ 1,119 $ 1,819 $ 741 $ 3,291 (non-GAAP)Adjusted netincome $ 31,550 $ 22,476 $ 18,594 $ 19,113 $ 17,739 $ 72,620 $ 44,127 (non-GAAP) (1) ADJUSTEDEARNINGS PER COMMON SHARE (1) Adjusted netincome $ 31,550 $ 22,476 $ 18,594 $ 19,113 $ 17,739 $ 72,620 $ 44,127 (non-GAAP) (fromabove) Weighted averagecommon shares 15,635,123 15,813,932 15,803,643 15,775,596 15,767,152 15,829,124 15,770,335 outstandingWeighted averagecommon andcommon 15,869,798 16,045,239 16,025,548 15,973,054 15,923,578 16,058,420 15,945,832 equivalentsharesoutstanding Adjustedearnings per common share(non-GAAP):Basic $ 2.02 $ 1.42 $ 1.18 $ 1.21 $ 1.13 $ 4.59 $ 2.80 Diluted $ 1.99 $ 1.40 $ 1.16 $ 1.20 $ 1.11 $ 4.52 $ 2.77 ADJUSTED RETURNON AVERAGE ASSETS (1) Adjusted netincome $ 31,550 $ 22,476 $ 18,594 $ 19,113 $ 17,739 $ 72,620 $ 44,127 (non-GAAP) (fromabove) Average Assets $ 5,960,336 $ 5,739,067 $ 5,668,850 $ 5,842,299 $ 5,820,555 $ 5,789,753 $ 5,524,087 Adjusted returnon averageassets 2.12 % 1.57 % 1.31 % 1.31 % 1.22 % 1.67 % 1.07 %(annualized)(non-GAAP) NET INTEREST MARGIN (TEY) (4) Net interest $ 46,229 $ 43,516 $ 41,975 $ 43,707 $ 44,581 $ 131,720 $ 123,243 income (GAAP) Plus: Taxequivalent 2,708 2,444 2,267 2,631 1,942 7,411 5,587 adjustment (3) Net interestincome - tax $ 48,937 $ 45,960 $ 44,242 $ 46,338 $ 46,523 $ 139,131 $ 128,830 equivalent(Non-GAAP) Less:Acquisition 456 291 504 1,077 833 1,251 2,194 accounting netaccretion Adjusted net $ 48,481 $ 45,669 $ 43,738 $ 45,261 $ 45,690 $ 137,880 $ 126,636 interest income Average earning $ 5,451,571 $ 5,320,881 $ 5,218,198 $ 5,345,677 $ 5,278,298 $ 5,330,338 $ 4,998,352 assets Net interest 3.36 % 3.28 % 3.26 % 3.25 % 3.36 % 3.30 % 3.29 %margin (GAAP)Net interestmargin (TEY) 3.56 % 3.46 % 3.43 % 3.45 % 3.51 % 3.49 % 3.44 %(Non-GAAP)Adjusted netinterest margin 3.53 % 3.44 % 3.40 % 3.37 % 3.44 % 3.46 % 3.38 %(TEY) (Non-GAAP) EFFICIENCY RATIO (5) Noninterest $ 41,387 $ 35,675 $ 37,228 $ 46,364 $ 40,838 $ 114,290 $ 105,391 expense (GAAP) Net interest $ 46,229 $ 43,516 $ 41,975 $ 43,707 $ 44,581 $ 131,720 $ 123,243 income (GAAP)Noninterest 34,652 19,296 23,489 32,017 37,959 77,437 81,781 income (GAAP)Total income $ 80,881 $ 62,812 $ 65,464 $ 75,724 $ 82,540 $ 209,157 $ 205,024 Efficiency ratio(noninterestexpense/total 51.17 % 56.80 % 56.87 % 61.23 % 49.48 % 54.64 % 51.40 %income)(Non-GAAP) ALLOWANCE FORCREDIT LOSSES ONLOANS/LEASES TOTOTAL LOANS/ LEASES,EXCLUDING PPPLOANS (6) Allowance forcredit losses on $ 80,670 $ 78,894 $ 81,831 $ 84,376 $ 79,582 $ 80,670 $ 79,582 loans and leases Total loans and $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129 $ 4,247,977 $ 4,599,730 $ 4,247,977 leasesLess: PPP loans 83,575 147,506 243,860 273,146 357,506 83,575 357,506 Total loans andleases, $ 4,516,155 $ 4,270,199 $ 4,117,191 $ 3,977,983 $ 3,890,471 $ 4,516,155 $ 3,890,471 excluding PPPloans Allowance forcredit losses onloans and leasesto total loans 1.79 % 1.85 % 1.99 % 2.12 % 2.05 % 1.79 % 2.05 %and leases,excluding PPPloans LOAN GROWTHANNUALIZED, EXCLUDING PPPLOANSTotal loans and $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129 $ 4,247,977 $ 4,599,730 $ 4,247,977 leasesLess: PPP loans 83,575 147,506 243,860 273,146 357,506 83,575 357,506 Total loans andleases, $ 4,516,155 $ 4,270,199 $ 4,117,191 $ 3,977,983 $ 3,890,471 $ 4,516,155 $ 3,890,471 excluding PPPloans Loan growthannualized, 23.04 % 14.87 % 14.00 % 9.00 % 11.45 % 16.08 % 16.28 %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 excludenon-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 notdeductible 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 aredetermined 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 isreconciled 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 rulesof 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 credit losses on loans and leases to total loans and leases,excluding PPP loans is a non-GAAP measure. The Company's management utilizesthis ratio to remove from the allowancecalculation the impact of PPP loanswhich are fully guaranteed by the federal government and for which these loanshave no allowance for loan and lease loss allocation.