GlobeNewswire Inc | Jan 25, 2022 04:05PM EST

January 25, 2022

Fourth Quarter and Full Year 2021 Highlights

-- Record annual net income of $98.9 million, or $6.20 per diluted share -- Quarterly net income of $27.0 million, or $1.71 per diluted share -- Adjusted quarterly net income (non-GAAP) of $27.4 million, or $1.73 per diluted share -- Record adjusted quarterly net interest income (non-GAAP) of $49.2 million, a 6.1% annualized increase compared to the third quarter of 2021 -- Net Interest Margin (NIM) of 3.29% and Adjusted NIM (TEY)(non-GAAP) of 3.49% for the quarter -- Loan and lease growth of 12.0% (annualized) for the quarter and 16.9% for the full year, excluding SBA Paycheck Protection Program (PPP) loans (non-GAAP) -- Annualized core deposit growth of 4.3% for the quarter and 7.2% for the full year -- Nonperforming assets improved by 60% for the quarter and 80% for the full year and now represent only 0.05% of total assets -- Allowance for credit losses (ACL) to total loans/leases of 1.69%, excluding PPP loans (non-GAAP)

MOLINE, Ill., Jan. 25, 2022 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the Company) today announced net income of $27.0 million and diluted earnings per share (EPS) of $1.71 for the fourth quarter of 2021, compared to net income of $31.6 million and diluted EPS of $1.99 for the third quarter of 2021. For the full year, the Company reported record net income of $98.9 million, or $6.20 per diluted share.

The Company reported adjusted net income (non-GAAP) of $27.4 million and adjusted diluted EPS of $1.73 for the fourth quarter of 2021, compared to adjusted net income (non-GAAP) of $31.6 million and adjusted diluted EPS of $1.99 for the third quarter of 2021. For the fourth quarter of 2020, net income and diluted EPS were $18.3 million and $1.14, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS were $19.1 million and $1.20, respectively.

For the Quarter Ended December 31, September 30, December 31,$ in millions (except per share data) 2021 2021 2020Net Income $ 27.0 $ 31.6 $ 18.3Diluted EPS $ 1.71 $ 1.99 $ 1.14Adjusted Net Income (non-GAAP) $ 27.4 $ 31.6 $ 19.1Adjusted Diluted EPS (non-GAAP) $ 1.73 $ 1.99 $ 1.20

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 2021 financial performance, highlighted by record net income and earnings per share, said Larry J. Helling, Chief Executive Officer. Our strong results were driven by robust loan growth of 17% for the year as we capitalized on strengthening economic conditions in our markets as well as the value that our clients place on relationship-based community banking. Additionally, we expanded our net interest margin, produced solid fee income, carefully managed expenses and maintained excellent credit quality.

In November, we were excited to announce the anticipated acquisition of Guaranty Federal Bancshares, Inc. which will enhance our market share in the vibrant Springfield and southwest Missouri markets. It will enable us to extend our high-performing and profitable niche business lines into those markets. We expect this transaction to close late in the first quarter or early in the second quarter and look forward to welcoming Guaranty Bank to the team.

Annualized Loan and Lease Growth of 12.0% for the Quarter and 16.9% for the Year, excluding PPP Loans (non-GAAP)

During the fourth quarter of 2021, the Companys loans and leases, excluding PPP loans (non-GAAP), increased $135.8 million to a total of $4.7 billion. Loan and lease growth, excluding PPP loans (non-GAAP) during the quarter was 12.0% on an annualized basis and was funded by core deposit growth and some excess liquidity. Core deposits (excluding brokered deposits) increased by $52.0 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 by strength in both our traditional commercial lending and leasing business and our Specialty Finance Group, added Helling. We believe this is a testament to the underlying economic strength across our markets and our relationship-based community banking model, emphasizing the importance of strong relationships with new and existing clients. Given our current pipeline, we are targeting organic loan growth for the full year 2022 of between 8% and 10%, consistent with our long-term goals.

Record Net Interest Income of $46.5 million

Net interest income for the fourth quarter of 2021 totaled a record $46.5 million, compared to $46.2 million for the third quarter of 2021 and $43.7 million for the fourth quarter of 2020. Adjusted net interest income (non-GAAP) during the quarter was $49.2 million, an increase of $744 thousand, or 1.5%, from the prior quarter, primarily due to the strong loan/lease growth. Adjusted net interest income (non-GAAP) was $45.3 million for the fourth quarter of 2020. Acquisition-related net accretion totaled $88 thousand for the fourth quarter of 2021, down from $456 thousand in the third quarter of 2021 and down from $1.1 million for the fourth quarter of 2020.

In the fourth quarter, reported NIM was 3.29% and tax-equivalent yield basis (non-GAAP) NIM was 3.50%, compared to 3.36% and 3.56% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.49%, compared to 3.53% in the third quarter. The slight decrease in Adjusted NIM (non-GAAP) during the quarter was primarily due to a 4 basis point decrease in the yield on earning assets (adjusted for acquisition-related net accretion, non-GAAP) driven by slightly lower loan and securities yields and some elevated excess liquidity. However, adjusted NIM benefited from a 1 basis point decline in the total cost of interest-bearing funds, mainly due to mix.

For the Quarter Ended December 31, September 30, December 31, 2021 2021 2020NIM 3.29 % 3.36 % 3.25 %NIM (TEY)(non-GAAP) * 3.50 % 3.56 % 3.45 %Adjusted NIM (TEY)(non-GAAP) * 3.49 % 3.53 % 3.37 %* See GAAP to non-GAAP reconciliations

We grew net interest income to record levels in the quarter, driven by our continued strong loan growth and our ability to protect and actually expand NIM in this challenging interest rate environment, said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. While reported adjusted NIM declined by 4 basis points this quarter, the decline was approximately two basis points when excluding the impact of lower PPP income and elevated excess liquidity, matching our guidance for the quarter. We had elevated liquidity during much of the quarter, driven by strong seasonal deposit growth with the majority of our strong loan growth occurring in December.

Noninterest Income of $23.0 million

Noninterest income for the fourth quarter of 2021 totaled $23.0 million, compared to $34.7 million for the third quarter of 2021. The decrease was primarily due to an $11.9 million decrease in capital markets revenue from swap fees, down from the elevated amount in the prior quarter, which benefited from a number of swap transactions that were scheduled to close in the second quarter carrying over into the third quarter. Wealth management revenue was $3.9 million for the quarter, up 3.2% from the third quarter.

Capital markets revenue from swap fees totaled $13.0 million for the quarter and $61.0 million for the full year, added Gipple. Capital markets revenue from swap fees has averaged $17.0 million for the last eight quarters, which 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 $39.4 million

Noninterest expense for the fourth quarter of 2021 totaled $39.4 million, compared to $41.4 million for the third quarter of 2021 and $46.4 million for the fourth quarter of 2020. The linked-quarter decrease was primarily due to lower performance-based salary and benefits expense of $3.4 million, mainly the result of a decrease in capital markets revenue production from swap fees. Partially offsetting this decrease was a $584 thousand increase in advertising and marketing and $624 thousand in acquisition costs. Additionally, in the third quarter of 2021, the Company recorded a $1.5 million charge related to the write-down of certain fixed assets and a $1.3 million net gain on the sale of other real estate.

Asset Quality Remains Strong and NPAs Improved

Nonperforming assets (NPAs) totaled $2.8 million at the end of the fourth quarter, a decrease of $4.1 million from the third quarter of 2021. The decrease was primarily due to the payoff of one nonaccrual loan during the quarter. The ratio of NPAs to total assets improved to 0.05% as of December 31, 2021, compared to 0.11% as of September 30, 2021, and 0.25% as of December 31, 2020. In addition, the Companys criticized loans and classified loans to total loans and leases decreased to 2.47% and 1.14%, respectively, from 2.57% and 1.29% as of September 30, 2021.

The Company recorded a $3.2 million negative provision for credit losses in the fourth quarter of 2021, primarily due to continued strong asset quality and a corresponding reduction in the qualitative factor related to the pandemic. As of December 31, 2021, the ACL on total loans/leases was 1.68%, compared to 1.75% as of September 30, 2021. Excluding PPP loans of $28 million, the ACL to total loans/leases as of December 31, 2021, was 1.69% (non-GAAP).

Continued Strong Capital Levels

As of December 31, 2021, the Companys total risk-based capital ratio was 14.92%, the common equity tier 1 ratio was 10.88% and the tangible common equity to tangible assets ratio (non-GAAP) was 9.87%. By comparison, these respective ratios were 14.64%, 10.55% and 9.54% as of September 30, 2021.

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, January 26, 2022, 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 02, 2022. The replay access information is 877-344-7529 (international 412-317-0088); access code 2205260. 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 December 31, 2021, the Company had approximately $6.1 billion in assets, $4.7 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 Corporate CommunicationsOfficer Investor RelationsChief Financial Officer Manager(309) 743-7745 (319) 743-7006tgipple@qcrh.com kgarrett@qcrh.com

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited)

As of December 31, September June 30, March 31, December 31, 30, 2021 2021 2021 2021 2020 (dollars in thousands) CONDENSED BALANCE SHEET Cash and due from $ 37,490 $ 57,310 $ 55,598 $ 78,814 $ 61,329banksFederal funds soldand 87,662 70,826 88,780 55,056 95,676interest-bearingdepositsSecurities, net ofallowance for 810,215 828,719 810,445 799,825 838,131credit lossesNet loans/leases 4,601,411 4,519,060 4,338,811 4,279,220 4,166,753Intangibles 9,349 9,857 10,365 10,873 11,381Goodwill 74,066 74,066 74,066 74,066 74,066Derivatives 222,220 198,393 193,395 122,668 222,757Other assets 253,719 256,277 255,952 246,872 234,950Total assets $ 6,096,132 $ 6,014,508 $ 5,827,412 $ 5,667,394 $ 5,705,043 Total deposits $ 4,922,772 $ 4,871,828 $ 4,688,935 $ 4,631,782 $ 4,599,137Total borrowings 170,805 183,514 198,908 188,601 177,114Derivatives 225,135 201,450 196,092 125,863 229,270Other liabilities 100,410 107,902 113,001 112,429 105,729Total stockholders' 677,010 649,814 630,476 608,719 593,793equityTotal liabilitiesand stockholders' $ 6,096,132 $ 6,014,508 $ 5,827,412 $ 5,667,394 $ 5,705,043equity ANALYSIS OF LOAN PORTFOLIOLoan/lease mix: (1) Commercial andindustrial - $ 248,483 $ 175,155 $ 182,882 $ 168,842 revolvingCommercial and 1,346,602 1,465,580 1,505,384 1,616,144 industrial - otherCommercial realestate, owner 421,701 434,014 427,734 461,272 occupiedCommercial realestate, non-owner 646,500 644,850 618,879 610,582 occupiedConstruction and 918,571 852,418 708,289 607,798 land developmentMulti-family 600,412 529,727 466,804 396,272 Direct financing 45,191 50,237 56,153 60,134 leases1-4 family real 377,361 376,067 382,142 368,927 estateConsumer 75,311 71,682 69,438 71,080 Total loans/leases $ 4,680,132 $ 4,599,730 $ 4,417,705 $ 4,361,051 Less allowance for 78,721 80,670 78,894 81,831 credit losses (2)Net loans/leases $ 4,601,411 $ 4,519,060 $ 4,338,811 $ 4,279,220 Loan/lease mix: (1) Commercial and $ 1,584,922 $ 1,634,047 $ 1,680,853 $ 1,779,062 $ 1,726,723industrial loansCommercial real 2,675,103 2,550,160 2,319,423 2,174,897 2,107,629estate loansDirect financing 44,623 49,585 55,371 59,229 66,016leasesResidential real 275,552 270,522 268,193 254,900 252,121estate loansInstallment andother consumer 86,311 85,363 86,925 87,053 91,302loansDeferred loan/leaseorigination costs, 13,621 10,053 6,940 5,910 7,338net of feesTotal loans/leases $ 4,680,132 $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129Less allowance for 78,721 80,670 78,894 81,831 84,376credit losses (2)Net loans/leases $ 4,601,411 $ 4,519,060 $ 4,338,811 $ 4,279,220 $ 4,166,753 ANALYSIS OFSECURITIES PORTFOLIOSecurities mix: U.S. governmentsponsored agency $ 23,328 $ 23,689 $ 14,670 $ 14,581 $ 15,336securitiesMunicipal 639,799 649,486 641,603 614,649 627,523securitiesResidentialmortgage-backed and 94,323 100,744 106,139 118,051 132,842related securitiesAsset backed 27,124 30,607 31,778 39,815 40,683securitiesOther securities 25,839 24,367 16,429 12,903 21,747Total securities $ 810,413 $ 828,893 $ 810,619 $ 799,999 $ 838,131Less allowance for 198 174 174 174 -credit losses (2)Net securities $ 810,215 $ 828,719 $ 810,445 $ 799,825 $ 838,131 ANALYSIS OF DEPOSITSDeposit mix: Noninterest-bearing $ 1,268,788 $ 1,342,273 $ 1,258,885 $ 1,269,578 $ 1,145,378demand depositsInterest-bearing 3,232,633 3,086,711 2,976,696 2,916,054 2,987,469demand depositsTime deposits 421,348 441,743 452,171 445,067 460,659Brokered deposits 3 1,101 1,183 1,084 5,631Total deposits $ 4,922,772 $ 4,871,828 $ 4,688,935 $ 4,631,782 $ 4,599,137 ANALYSIS OF BORROWINGSBorrowings mix: Term FHLB advances $ - $ - $ - $ - $ -Overnight FHLB 15,000 30,000 40,000 25,000 15,000advances (3)FRB borrowings - - - - -Other short-term 3,800 1,600 7,070 6,840 5,430borrowingsSubordinated notes 113,850 113,811 113,771 118,731 118,691Junior subordinated 38,155 38,103 38,067 38,030 37,993debenturesTotal borrowings $ 170,805 $ 183,514 $ 198,908 $ 188,601 $ 177,114 (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 0.31%.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited)

For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020 (dollars in thousands, except per share data) INCOME STATEMENT Interest income $ 52,020 $ 51,667 $ 48,903 $ 47,565 $ 49,851 Interest expense 5,507 5,438 5,387 5,590 6,144 Net interest 46,513 46,229 43,516 41,975 43,707 incomeProvision forcredit losses (3,227 ) - - 6,713 7,080 (1)Net interestincome afterprovision for $ 49,740 $ 46,229 $ 43,516 $ 35,262 $ 36,627 loan/leaselosses Trust department $ 2,843 $ 2,714 $ 2,848 $ 2,801 $ 2,388 feesInvestmentadvisory and 1,047 1,054 1,039 940 926 management feesDeposit service 1,644 1,588 1,492 1,408 1,875 feesGain on sales ofresidential real 922 954 1,184 1,337 1,462 estate loansGain on sales ofgovernmentguaranteed 227 - - - 224 portions ofloansSwap fee income/capital markets 12,982 24,885 9,568 13,557 21,402 revenueSecurities gains - - (88 ) - 617 (losses), netEarnings onbank-owned life 470 446 451 471 461 insuranceDebit card fees 1,072 1,085 1,084 975 923 Correspondent 266 265 269 314 270 banking feesOther 1,512 1,661 1,449 1,686 1,469 Totalnoninterest $ 22,985 $ 34,652 $ 19,296 $ 23,489 $ 32,017 income Salaries andemployee $ 24,809 $ 28,207 $ 23,044 $ 24,847 $ 30,446 benefitsOccupancy andequipment 3,723 4,122 3,965 4,108 4,917 expenseProfessional anddata processing 3,866 3,568 3,702 3,443 3,871 feesAcquisition 624 - - - - costsPost-acquisitioncompensation,transition and - - - - 25 integrationcostsDisposition 5 - - 8 64 costsFDIC insurance,other insurance 1,316 1,108 986 1,065 1,272 and regulatoryfeesLoan/lease 606 308 457 300 465 expenseNet cost of(income from)and gains/losses - (1,346 ) (113 ) 39 (4 )on operations ofother realestateAdvertising and 1,679 1,095 853 627 1,276 marketingBank service 553 525 572 523 523 chargesLosses onliability - - - - 1,457 extinguishmentCorrespondent 200 201 198 200 205 banking expenseIntangibles 508 508 508 508 521 amortizationLoss (gain) onsale of - - - - (147 )subsidiaryOther 1,523 3,091 1,503 1,560 1,473 Totalnoninterest $ 39,412 $ 41,387 $ 35,675 $ 37,228 $ 46,364 expense Net incomebefore income $ 33,313 $ 39,494 $ 27,137 $ 21,523 $ 22,280 taxesFederal andstate income tax 6,304 7,929 4,788 3,541 4,009 expenseNet income $ 27,009 $ 31,565 $ 22,349 $ 17,982 $ 18,271 Basic EPS $ 1.73 $ 2.02 $ 1.41 $ 1.14 $ 1.16 Diluted EPS $ 1.71 $ 1.99 $ 1.39 $ 1.12 $ 1.14 Weighted averagecommon shares 15,582,276 15,635,123 15,813,932 15,803,643 15,775,596 outstandingWeighted averagecommon andcommon 15,838,246 15,869,798 16,045,239 16,025,548 15,973,054 equivalentsharesoutstanding (1) Provision for credit losses onlyincluded provision for loans/leases for years prior to 2021.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited)

For Year Ended December 31, December 31, 2021 2020 (dollars in thousands, except per share data) INCOME STATEMENT Interest income $ 200,155 $ 198,373 Interest expense 21,922 31,423 Net interest income 178,233 166,950 Provision for credit losses (1) 3,486 55,704 Net interest income after provision for $ 174,747 $ 111,246 loan/lease losses Trust department fees $ 11,206 $ 9,207 Investment advisory and management fees 4,080 5,318 Deposit service fees 6,132 6,041 Gain on sales of residential real 4,397 4,680 estate loansGain on sales of government guaranteed 227 224 portions of loansSwap fee income/capital markets revenue 60,992 74,821 Securities gains (losses), net (88 ) 2,484 Earnings on bank-owned life insurance 1,838 1,904 Debit card fees 4,216 3,402 Correspondent banking fees 1,114 903 Other 6,308 4,814 Total noninterest income $ 100,422 $ 113,798 Salaries and employee benefits $ 100,907 $ 96,268 Occupancy and equipment expense 15,918 16,504 Professional and data processing fees 14,579 14,644 Acquisition costs 624 - Post-acquisition compensation, - 214 transition and integration costsDisposition costs 13 690 FDIC insurance, other insurance and 4,475 4,164 regulatory feesLoan/lease expense 1,671 1,435 Net cost of (income from) and gains/losses (1,420 ) (307 )on operations of other real estateAdvertising and marketing 4,254 3,260 Bank service charges 2,173 2,016 Losses on liability extinguishment - 3,907 Correspondent banking expense 799 838 Intangibles amortization 2,032 2,149 Goodwill impairment - 500 Loss on sale of subsidiary - 158 Other 7,677 5,315 Total noninterest expense $ 153,702 $ 151,755 Net income before income taxes $ 121,467 $ 73,289 Federal and state income tax expense 22,562 12,707 Net income $ 98,905 $ 60,582 Basic EPS $ 6.30 $ 3.84 Diluted EPS $ 6.20 $ 3.80 Weighted average common shares 15,708,744 15,771,650 outstandingWeighted average common and common 15,944,708 15,952,637 equivalent shares 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 Year Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2021 2021 2021 2021 2020 2021 2020 (dollars in thousands, except per share data) COMMON SHARE DATACommon shares 15,613,460 15,590,428 15,763,522 15,843,732 15,805,711 outstandingBook value per $ 43.36 $ 41.68 $ 40.00 $ 38.42 $ 37.57 common share (1)Tangible bookvalue per common $ 38.02 $ 36.30 $ 34.64 $ 33.06 $ 32.16 share (Non-GAAP)(2)Closing stock $ 56.00 $ 51.44 $ 48.09 $ 47.22 $ 39.59 priceMarket $ 874,354 $ 801,972 $ 758,068 $ 748,141 $ 625,748 capitalizationMarket price / 129.15 % 123.42 % 120.24 % 122.90 % 105.38 % book valueMarket price /tangible book 147.30 % 141.72 % 138.83 % 142.83 % 123.09 % valueEarnings percommon share $ 6.30 $ 5.73 $ 4.81 $ 4.27 $ 3.84 (basic) LTM (3)Price earnings 8.88 x 8.98 x 10.00 x 11.06 x 10.31 x ratio LTM (3)TCE / TA 9.87 % 9.54 % 9.51 % 9.38 % 9.05 % (Non-GAAP) (4) CONDENSEDSTATEMENT OFCHANGES IN STOCKHOLDERS'EQUITYBeginning $ 649,814 $ 630,476 $ 608,719 $ 593,793 $ 572,613 balanceCumulativeeffect from the - - - (937 ) - adoption of ASU2016-13 "CECL"Net income 27,009 31,565 22,349 17,982 18,271 Othercomprehensive 295 (2,546 ) 4,179 (1,751 ) 3,157 income (loss),net of taxCommon stockcash dividends (935 ) (946 ) (951 ) (949 ) (947 ) declaredRepurchase andcancellation ofshares of commonstock as a - (9,367 ) (4,800 ) - - result of ashare repurchaseprogramOther (5) 827 632 980 581 699 Ending balance $ 677,010 $ 649,814 $ 630,476 $ 608,719 $ 593,793 REGULATORYCAPITAL RATIOS (6):Total risk-based 14.92 % 14.64 % 14.72 % 14.85 % 14.95 % capital ratioTier 1risk-based 11.58 % 11.26 % 11.26 % 11.31 % 11.34 % capital ratioTier 1 leverage 10.46 % 10.28 % 10.29 % 10.10 % 9.49 % capital ratioCommon equity 10.88 % 10.55 % 10.52 % 10.55 % 10.55 % tier 1 ratio KEY PERFORMANCERATIOS AND OTHER METRICSReturn onaverage assets 1.76 % 2.11 % 1.56 % 1.27 % 1.25 % 1.68 % 1.08 %(annualized)Return onaverage total 16.23 % 19.30 % 14.33 % 11.91 % 12.43 % 15.52 % 10.70 %equity(annualized)Net interest 3.29 % 3.36 % 3.28 % 3.26 % 3.25 % 3.30 % 3.28 %marginNet interestmargin (TEY) 3.50 % 3.56 % 3.46 % 3.43 % 3.45 % 3.49 % 3.44 %(Non-GAAP)(7)Efficiency ratio 56.71 % 51.17 % 56.80 % 56.87 % 61.23 % 55.16 % 54.05 %(Non-GAAP) (8)Gross loans andleases / total 76.77 % 76.48 % 75.81 % 76.95 % 74.52 % 76.77 % 74.81 %assetsGross loans andleases / total 95.07 % 94.41 % 94.22 % 94.15 % 92.43 % 95.07 % 92.43 %depositsEffective tax 18.92 % 20.08 % 17.64 % 16.45 % 17.99 % 18.57 % 17.34 %rateFull-timeequivalent 726 724 725 720 714 726 714 employees AVERAGE BALANCES Assets $ 6,121,446 $ 5,982,583 $ 5,761,314 $ 5,691,097 $ 5,842,299 $ 5,890,042 $ 5,604,074 Loans/leases 4,608,111 4,529,136 4,412,322 4,271,782 4,250,951 4,456,461 4,031,567 Deposits 4,983,869 4,779,876 4,709,732 4,628,889 4,742,602 4,776,575 4,540,266 Totalstockholders' 665,698 654,186 624,000 604,012 588,042 637,190 566,240 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.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited)

ANALYSIS OF NET INTEREST INCOME AND MARGIN For the Quarter Ended December 31, 2021 September 30, 2021 December 31, 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 sold $ 3,334 $ 1 0.09 % $ 3,030 $ 1 0.10 % $ 1,216 $ 1 0.08 %Interest-bearingdeposits at 161,514 63 0.15 % 99,024 39 0.16 % 279,024 82 0.12 %financialinstitutionsSecurities (1) 810,334 7,514 3.70 % 799,471 7,646 3.82 % 795,696 7,207 3.62 %Restrictedinvestment 18,929 231 4.78 % 20,910 262 4.97 % 18,790 236 4.92 %securitiesLoans (1) 4,608,111 47,010 4.05 % 4,529,136 46,427 4.07 % 4,250,951 44,956 4.21 %Total earning $ 5,602,222 $ 54,819 3.89 % $ 5,451,571 $ 54,375 3.96 % $ 5,345,677 $ 52,482 3.91 %assets (1) Interest-bearing $ 3,231,477 $ 2,401 0.29 % $ 3,041,941 $ 2,183 0.28 % $ 3,033,119 $ 2,060 0.27 %depositsTime deposits 442,835 963 0.86 % 461,210 1,090 0.94 % 530,813 1,752 1.31 %Short-term 2,484 1 0.12 % 6,858 1 0.10 % 19,115 3 0.17 %borrowingsFederal HomeLoan Bank 4,141 3 0.31 % 54,293 41 0.30 % 33,207 80 0.94 %advancesSubordinated 113,829 1,554 5.46 % 113,789 1,554 5.46 % 118,612 1,678 5.66 %debenturesJuniorsubordinated 38,132 584 5.99 % 38,084 569 5.84 % 37,969 571 5.88 %debenturesTotalinterest-bearing $ 3,832,898 $ 5,506 0.57 % $ 3,716,175 $ 5,438 0.58 % $ 3,772,835 $ 6,144 0.64 %liabilities Net interest $ 49,313 $ 48,937 $ 46,338 income (1)Net interest 3.29 % 3.36 % 3.25 %margin (2)Net interestmargin (TEY) 3.50 % 3.56 % 3.45 %(Non-GAAP) (1)(2) (3)Adjusted net interest margin 3.49 % 3.53 % 3.37 %(TEY) (Non-GAAP) (1) (2) (3) For the Year Ended December 31, 2021 December 31, 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 sold $ 1,964 $ 2 0.10 % $ 2,398 $ 19 0.79 % Interest-bearingdeposits at 116,421 173 0.15 % 315,616 669 0.21 % financialinstitutionsSecurities (1) 804,636 29,504 3.66 % 715,808 26,773 3.74 % Restrictedinvestment 19,386 950 4.83 % 20,270 1,031 5.00 % securitiesLoans (1) 4,456,461 179,738 4.03 % 4,031,567 178,097 4.42 % Total earning $ 5,398,868 $ 210,367 3.90 % $ 5,085,659 $ 206,589 4.06 % assets (1) Interest-bearing $ 3,058,917 $ 8,621 0.28 % $ 2,797,669 $ 11,980 0.43 % depositsTime deposits 448,191 4,679 1.04 % 690,222 11,289 1.64 % Short-term 6,281 5 0.08 % 22,625 84 0.37 % borrowingsFederal HomeLoan Bank 23,389 70 0.30 % 74,167 1,087 1.44 % advancesSubordinated 115,398 6,272 5.44 % 83,404 4,697 5.63 % debenturesJuniorsubordinated 38,067 2,276 5.90 % 37,913 2,286 5.93 % debenturesTotalinterest-bearing $ 3,690,243 $ 21,923 0.59 % $ 3,706,000 $ 31,423 0.85 % liabilities Net interest $ 188,444 $ 175,166 income (1)Net interest 3.30 % 3.28 % margin (2)Net interestmargin (TEY) 3.49 % 3.44 % (Non-GAAP) (1)(2) (3)Adjusted netinterest margin 3.47 % 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 December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020 (dollars in thousands, except per share data) ROLLFORWARDOF ALLOWANCEFOR CREDIT LOSSES ONLOANS/LEASESBeginning $ 80,670 $ 78,894 $ 81,831 $ 84,376 $ 79,582 balanceAdoption ofASU 2016-13 - - - (8,102 ) - "CECL" - Day1 adjustmentProvisioncharged to (2,045 ) 1,895 (141 ) 5,993 7,080 expenseLoans/leases (375 ) (287 ) (3,163 ) (713 ) (2,779 )charged offRecoveries onloans/leases 471 168 367 277 493 previouslycharged offEnding $ 78,721 $ 80,670 $ 78,894 $ 81,831 $ 84,376 balance NONPERFORMING ASSETSNonaccrual $ 2,759 $ 6,818 $ 8,230 $ 13,863 $ 13,940 loans/leasesAccruingloans/leases 1 14 57 - 3 past due 90days or moreTotalnonperforming 2,760 6,832 8,287 13,863 13,943 loans/leasesOther real - - 1,820 173 20 estate ownedOtherrepossessed - - - 50 135 assetsTotalnonperforming $ 2,760 $ 6,832 $ 10,107 $ 14,086 $ 14,098 assets ASSET QUALITY RATIOSNonperformingassets / 0.05 % 0.11 % 0.17 % 0.25 % 0.25 %total assetsACL for loansand leases / 1.68 % 1.75 % 1.79 % 1.88 % 1.98 %total loans/leases (1)ACL for loansand leases /nonperforming 2852.21 % 1180.77 % 952.02 % 590.28 % 605.15 %loans/leases(1)Netcharge-offsas a % of 0.00 % 0.00 % 0.06 % 0.01 % 0.05 %average loans/leases INTERNALLYASSIGNED RISK RATING (2)Specialmention $ 62,510 $ 58,634 $ 51,613 $ 53,466 $ 71,482 (rating 6)Substandard 53,159 59,402 79,719 84,982 66,081 (rating 7)Doubtful - - - - - (rating 8) $ 115,669 $ 118,036 $ 131,332 $ 138,448 $ 137,563 Criticized $ 115,669 $ 118,036 $ 131,332 $ 138,448 $ 137,563 loans (3)Classified 53,159 59,402 79,719 84,982 66,081 loans (4) Criticizedloans as a % 2.47 % 2.57 % 2.97 % 3.17 % 3.24 %of totalloans/leasesClassifiedloans as a % 1.14 % 1.29 % 1.80 % 1.95 % 1.55 %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 Year Ended December 31, September 30, December 31, December December 31, 31,SELECTFINANCIAL 2021 2021 2020 2021 2020 DATA -SUBSIDIARIES (dollars in thousands) TOTAL ASSETS Quad CityBank and $ 2,142,345 $ 2,106,631 $ 2,153,773 Trust (1)m2 Equipment 266,588 259,543 243,090 Finance, LLCCedar RapidsBank and 2,030,279 2,019,018 1,957,695 TrustCommunityState Bank - 1,168,606 1,140,933 1,004,183 AnkenySpringfieldFirst 882,885 880,143 779,955 CommunityBank TOTAL DEPOSITSQuad CityBank and $ 1,849,313 $ 1,797,969 $ 1,866,635 Trust (1)Cedar RapidsBank and 1,504,992 1,526,144 1,378,108 TrustCommunityState Bank - 1,020,548 994,042 875,400 AnkenySpringfieldFirst 590,164 605,947 569,036 CommunityBank TOTAL LOANS & LEASESQuad CityBank and $ 1,650,234 $ 1,636,170 $ 1,556,762 Trust (1)m2 Equipment 270,274 262,962 244,325 Finance, LLCCedar RapidsBank and 1,437,808 1,410,160 1,362,056 TrustCommunityState Bank - 866,952 834,533 707,681 AnkenySpringfieldFirst 725,139 718,867 624,629 CommunityBank TOTAL LOANS& LEASES / TOTALDEPOSITSQuad CityBank and 89 % 91 % 83 % Trust (1)Cedar RapidsBank and 96 % 92 % 99 % TrustCommunityState Bank - 85 % 84 % 81 % AnkenySpringfieldFirst 123 % 119 % 110 % CommunityBank TOTAL LOANS& LEASES / TOTAL ASSETSQuad CityBank and 77 % 78 % 72 % Trust (1)Cedar RapidsBank and 71 % 70 % 70 % TrustCommunityState Bank - 74 % 73 % 70 % AnkenySpringfieldFirst 82 % 82 % 80 % CommunityBank ACL ON LOANS/LEASES AS APERCENTAGE OF LOANS/LEASESQuad CityBank and 1.82 % 1.88 % 1.95 % Trust (1)m2 Equipment 3.55 % 3.78 % 2.63 % Finance, LLCCedar RapidsBank and 1.73 % 1.85 % 2.35 % Trust (2)CommunityState Bank - 1.69 % 1.73 % 2.02 % Ankeny (2)SpringfieldFirst 1.27 % 1.30 % 1.23 % CommunityBank (2) RETURN ONAVERAGE ASSETSQuad CityBank and 1.86 % 1.66 % 1.52 % 1.63 % 0.99 %Trust (1)Cedar RapidsBank and 2.56 % 3.93 % 0.59 % 2.85 % 1.81 %TrustCommunityState Bank - 1.50 % 1.17 % 3.25 % 1.17 % 1.25 %AnkenySpringfieldFirst 1.82 % 2.09 % 3.02 % 1.73 % 1.74 %CommunityBank NET INTERESTMARGIN PERCENTAGE(3)Quad CityBank and 3.48 % 3.47 % 3.19 % 3.36 % 3.17 %Trust (1)Cedar RapidsBank and 3.66 % 3.68 % 3.51 % 3.62 % 3.47 %Trust (4)CommunityState Bank - 3.52 % 3.78 % 3.77 % 3.66 % 3.89 %Ankeny (5)SpringfieldFirst 3.49 % 3.67 % 4.03 % 3.56 % 3.87 %CommunityBank (6) ACQUISITION-RELATEDAMORTIZATION/ACCRETION INCLUDED IN NETINTEREST MARGIN, NETCedar RapidsBank and $ 21 $ 64 $ 103 $ 190 $ 430 TrustCommunityState Bank - 30 52 132 468 325 AnkenySpringfieldFirst 89 376 880 844 2,671 CommunityBankQCRHoldings, (52 ) (36 ) (38 ) (162 ) (155 )Inc. (7) (1) Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as thisentity is wholly-owned and consolidated with the Bank. m2 Equipment Finance,LLCis also presented separately for certain (applicable) measurements.(2) 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.(3) Includes nontaxable securities and loans. Interest earned and yields onnontaxable securities and loans are determined on a tax equivalent basis usinga 21% tax rate.(4) Cedar Rapids Bank and Trust's net interest margin percentage includesvarious purchase accounting adjustments. Excluding those adjustments, netinterestmargin (Non-GAAP) would have been 3.65% for the quarter ended December 31, 2021, 3.66% for the quarter ended September 30, 2021 and 3.47% forthequarter ended December 31, 2020.(5) Community State Bank's net interest margin percentage includes variouspurchase accounting adjustments. Excluding those adjustments, netinterestmargin (Non-GAAP) would have been 3.50% for the quarter ended December 31, 2021, 3.75% for the quarter ended September 30, 2021 and 3.69% forthequarter ended December 31, 2020.(6) Springfield First Community Bank's net interest margin percentage includesvarious purchase accounting adjustments. Excluding those adjustments, netinterestmargin (Non-GAAP) would have been 3.50% for the quarter endedDecember 31, 2021, 3.53% for the quarter ended September 30, 2021 and 3.59% forthequarter ended December 31, 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 December 31, September 30, June 30, March 31, December 31,GAAP TONON-GAAP 2021 2021 2021 2021 2020 RECONCILIATIONS (dollars in thousands, except per share data)TANGIBLE COMMONEQUITY TO TANGIBLE ASSETSRATIO (1) Stockholders' $ 677,010 $ 649,814 $ 630,476 $ 608,719 $ 593,793 equity (GAAP)Less:Intangible 83,415 83,923 84,431 84,939 85,447 assetsTangible commonequity $ 593,595 $ 565,891 $ 546,045 $ 523,780 $ 508,346 (non-GAAP) Total assets $ 6,096,132 $ 6,014,508 $ 5,827,412 $ 5,667,394 $ 5,705,043 (GAAP)Less:Intangible 83,415 83,923 84,431 84,939 85,447 assetsTangible assets $ 6,012,717 $ 5,930,585 $ 5,742,981 $ 5,582,455 $ 5,619,596 (non-GAAP) Tangible commonequity to tangible 9.87 % 9.54 % 9.51 % 9.38 % 9.05 %assets ratio(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.

QCR Holdings, Inc.Consolidated Financial Highlights(Unaudited)

GAAP TO NON-GAAP For the Quarter Ended For the Year EndedRECONCILIATIONS December 31, September 30, June 30, March 31, December 31, December 31, December 31,ADJUSTED NET 2021 2021 2021 2021 2020 2021 2020 INCOME (1) (dollars in thousands, except per share data) Net income $ 27,009 $ 31,565 $ 22,349 $ 17,982 $ 18,271 $ 98,905 $ 60,582 (GAAP) Less non-coreitems (post-tax) (2):Income: Securities gains - - (69 ) - 487 $ (69 ) $ 1,962 (losses), netMark to Marketgains (losses) 77 (13 ) (58 ) 129 - 135 $ - on derivatives,netGain on sale of - 28 - - - 28 loanLoss on - - - - (210 ) - $ (210 )syndicated loanTotal non-coreincome $ 77 $ 15 $ (127 ) $ 129 $ 277 $ 94 $ 1,752 (non-GAAP) Expense: Losses on debtextinguishment, $ - $ - $ - $ - $ 1,151 $ - $ 3,087 netGoodwill - - - - - - 500 impairmentDisposition 3 - - 7 51 10 545 costsAcquisition 493 - - - - 493 - costs (4)Separation - - - 734 - 734 - agreementPost-acquisitioncompensation,transition and - - - - 20 - 169 integrationcostsLoss on sale of - - - - (102 ) - 110 subsidiaryTotal non-coreexpense $ 496 $ - $ - $ 741 $ 1,119 $ 1,237 $ 4,411 (non-GAAP)Adjusted netincome $ 27,428 $ 31,550 $ 22,476 $ 18,594 $ 19,113 $ 100,048 $ 63,241 (non-GAAP) (1) ADJUSTEDEARNINGS PER COMMON SHARE (1) Adjusted netincome $ 27,428 $ 31,550 $ 22,476 $ 18,594 $ 19,113 $ 100,048 $ 63,241 (non-GAAP) (fromabove) Weighted averagecommon shares 15,582,276 15,635,123 15,813,932 15,803,643 15,775,596 15,708,744 15,771,650 outstandingWeighted averagecommon andcommon 15,838,246 15,869,798 16,045,239 16,025,548 15,973,054 15,944,708 15,952,637 equivalentsharesoutstanding Adjustedearnings per common share(non-GAAP):Basic $ 1.76 $ 2.02 $ 1.42 $ 1.18 $ 1.21 $ 6.37 $ 4.01 Diluted $ 1.73 $ 1.99 $ 1.40 $ 1.16 $ 1.20 $ 6.27 $ 3.96 ADJUSTED RETURNON AVERAGE ASSETS (1) Adjusted netincome $ 27,428 $ 31,550 $ 22,476 $ 18,594 $ 19,113 $ 100,048 $ 63,241 (non-GAAP) (fromabove) Average Assets $ 6,121,446 $ 5,982,583 $ 5,761,314 $ 5,691,097 $ 5,842,299 $ 5,890,042 $ 5,604,074 Adjusted returnon averageassets 1.79 % 2.11 % 1.56 % 1.31 % 1.31 % 1.70 % 1.13 %(annualized)(non-GAAP) NET INTEREST MARGIN (TEY) (4) Net interest $ 46,513 $ 46,229 $ 43,516 $ 41,975 $ 43,707 $ 178,233 $ 166,950 income (GAAP) Plus: Taxequivalent 2,800 2,708 2,444 2,267 2,631 10,211 8,216 adjustment (3) Net interestincome - tax $ 49,313 $ 48,937 $ 45,960 $ 44,242 $ 46,338 $ 188,444 $ 175,166 equivalent(Non-GAAP) Less:Acquisition 88 456 291 504 1,077 1,340 3,271 accounting netaccretion Adjusted net $ 49,225 $ 48,481 $ 45,669 $ 43,738 $ 45,261 $ 187,104 $ 171,895 interest income Average earning $ 5,602,222 $ 5,451,571 $ 5,320,881 $ 5,218,198 $ 5,345,677 $ 5,398,868 $ 5,085,659 assets Net interest 3.29 % 3.36 % 3.28 % 3.26 % 3.25 % 3.30 % 3.28 %margin (GAAP)Net interestmargin (TEY) 3.50 % 3.56 % 3.46 % 3.43 % 3.45 % 3.49 % 3.44 %(Non-GAAP)Adjusted netinterest margin 3.49 % 3.53 % 3.44 % 3.40 % 3.37 % 3.47 % 3.38 %(TEY) (Non-GAAP) EFFICIENCY RATIO (5) Noninterest $ 39,412 $ 41,387 $ 35,675 $ 37,228 $ 46,364 $ 153,702 $ 151,755 expense (GAAP) Net interest $ 46,513 $ 46,229 $ 43,516 $ 41,975 $ 43,707 $ 178,233 $ 166,950 income (GAAP)Noninterest 22,985 34,652 19,296 23,489 32,017 100,422 113,798 income (GAAP)Total income $ 69,498 $ 80,881 $ 62,812 $ 65,464 $ 75,724 $ 278,655 $ 280,748 Efficiency ratio(noninterestexpense/total 56.71 % 51.17 % 56.80 % 56.87 % 61.23 % 55.16 % 54.05 %income)(Non-GAAP) ALLOWANCE FORCREDIT LOSSES ONLOANS/LEASES TOTOTAL LOANS/ LEASES,EXCLUDING PPPLOANS (6) Allowance forcredit losses on $ 78,721 $ 80,670 $ 78,894 $ 81,831 $ 84,376 $ 78,721 $ 84,376 loans and leases Total loans and $ 4,680,132 $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129 $ 4,680,132 $ 4,251,129 leasesLess: PPP loans 28,181 83,575 147,506 243,860 273,146 28,181 273,146 Total loans andleases, $ 4,651,951 $ 4,516,155 $ 4,270,199 $ 4,117,191 $ 3,977,983 $ 4,651,951 $ 3,977,983 excluding PPPloans Allowance forcredit losses onloans and leasesto total loans 1.69 % 1.79 % 1.85 % 1.99 % 2.12 % 1.69 % 2.12 %and leases,excluding PPPloans LOAN GROWTHANNUALIZED, EXCLUDING PPPLOANSTotal loans and $ 4,680,132 $ 4,599,730 $ 4,417,705 $ 4,361,051 $ 4,251,129 $ 4,680,132 $ 4,251,129 leasesLess: PPP loans 28,181 83,575 147,506 243,860 273,146 28,181 273,146 Total loans andleases, $ 4,651,951 $ 4,516,155 $ 4,270,199 $ 4,117,191 $ 3,977,983 $ 4,651,951 $ 3,977,983 excluding PPPloans Loan growthannualized, 12.03 % 23.04 % 14.87 % 14.00 % 9.00 % 16.94 % 7.80 %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 and liabilities 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 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.