QCRH QCR Holdings Inc

QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced quarterly net income of $26.7 million and diluted earnings per share (“EPS”) of $1.58 for the first quarter of 2024, compared to net income of $32.9 million and diluted EPS of $1.95 for the fourth quarter of 2023.

Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the first quarter of 2024 were $26.9 million and $1.59, respectively. For the fourth quarter of 2023, adjusted net income (non-GAAP) was $33.3 million and adjusted diluted EPS (non-GAAP) was $1.97. For the first quarter of 2023, net income and diluted EPS were $27.2 million and $1.60, respectively, and adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $28.0 million and $1.65, respectively.

	For the Quarter Ended
	March 31,			December 31,			March 31,
$ in millions (except per share data)	2024			2023			2023
Net Income	$	26.7		$	32.9		$	27.2
Diluted EPS	$	1.58		$	1.95		$	1.60
Adjusted Net Income (non-GAAP)*	$	26.9		$	33.3		$	28.0
Adjusted Diluted EPS (non-GAAP)*	$	1.59		$	1.97		$	1.65

*Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these adjusted measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

“We delivered strong first quarter results, highlighted by significant fee income and continued growth in both our core deposit and loan balances,” said Larry J. Helling, Chief Executive Officer. “In addition, we continued to benefit from well-managed expenses, improved upon our already excellent asset quality and further strengthened our capital levels.”

“Our bankers grew core deposits significantly during the quarter, adding to our strong and diversified deposit franchise. As a result, our ratio of loans held for investment to deposits improved to 93.6%,” added Mr. Helling.

Net Interest Income of $54.7 million

Net interest income for the first quarter of 2024 totaled $54.7 million, a decrease of $1.0 million from the fourth quarter of 2023. Several non-client factors drove this decrease, including the maturity of $125 million of interest rates caps on the Company’s indexed deposits and the conversion of $65 million of subordinated debt to a higher floating rate, which contributed a combined $1.3 million of additional interest expense. In addition, loan discount accretion decreased by $310 thousand and there was one less day in the quarter which had an impact of approximately $600 thousand decrease in net interest income. However, the Company’s net interest income driven by core activity saw growth of approximately $1.2 million during the first quarter, led by continued expansion in loan and investment yields.

In the first quarter of 2024, net interest margin (“NIM”) was 2.82% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.25%, down from 2.90% and 3.32% in the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.24%, was also down 5 basis points from 3.29% in the fourth quarter of 2023.

“Our adjusted NIM, on a tax equivalent yield basis, declined by 5 basis points from the fourth quarter of 2023 to 3.24% and was at the low end of our guidance range,” said Todd A. Gipple, President and Chief Financial Officer. “The decrease resulted primarily from non-client factors which collectively contributed to 7 basis points of NIM dilution. However, we were able to partially offset this non-client impact with core NIM expansion of 2 basis points. Notably, our core NIM expansion was less than expected due to additional shifts in our deposit composition. Looking ahead, considering the forward yield curve and assuming a static funding mix, we anticipate that the expansion in loan and investment yields will generally offset any further increase in our funding costs.”

Strong Noninterest Income Including $16.5 Million of Capital Markets Revenue

Noninterest income for the first quarter of 2024 totaled $26.9 million, down from the record results of $47.7 million in the fourth quarter of 2023. The Company generated $16.5 million of capital markets revenue in the quarter, as compared to the record $37.0 million in the prior quarter. Wealth management revenue was $4.3 million for the quarter, up 16% on an annualized basis from $4.1 million in the prior quarter.

“Our capital markets revenue was $16.5 million in the first quarter as our LIHTC lending and revenue from swap fees continues to benefit from the strong demand for affordable housing,” added Mr. Gipple. “Our LIHTC lending and capital markets revenue pipelines remain healthy.”

Well-Controlled Noninterest Expenses of $50.7 Million

Noninterest expense for the first quarter of 2024 totaled $50.7 million, compared to $60.9 million for the fourth quarter of 2023 and $48.8 million for the first quarter of 2023. The linked-quarter decrease was primarily due to lower incentive-based compensation related to our record fourth quarter and full year performance.

Exceptional Core Deposit Growth and Increased Liquidity

During the first quarter of 2024, the Company’s core deposits, which exclude brokered deposits, increased by $316.2 million, or 20.3% on an annualized basis, to $6.5 billion from $6.2 billion in the fourth quarter of 2023. “The exceptional deposit growth experienced in the first quarter reflects our commitment to expanding our market share with existing clients and establishing new relationships within the communities we serve,” added Mr. Helling.

Total uninsured and uncollateralized deposits remain very low at 20% of total deposits as of the end of the first quarter 2024, as compared to 18% as of the end of the fourth quarter of 2023. The Company increased its liquidity and maintained approximately $3.2 billion of available liquidity sources as of March 31, 2024, which includes $1.3 billion of immediately available liquidity.

Continued Strong Loan Growth

During the first quarter of 2024, the Company’s total loans and leases grew $104.9 million to $6.6 billion, or 6.4% on an annualized basis. During the quarter, the Company designated $275 million of low-income housing tax credit loans as loans held for sale in anticipation of the Company’s next loan securitization.

“Our ongoing strong performance validates our differentiated relationship-based community banking model as well as the underlying economic resiliency across our markets,” added Mr. Helling. “Given our current pipeline and the continued strength of our markets, we are maintaining our loan growth target for the full year 2024 of 8% to 10%, prior to the loan securitizations that we have planned for the year.”

Asset Quality Remains Excellent

Nonperforming assets (“NPAs”) totaled $31.3 million at the end of the first quarter, an 8.5% reduction from $34.2 million at the end of the fourth quarter of 2023. The ratio of NPAs to total assets also improved to 0.36% on March 31, 2024, compared to 0.40% on December 31, 2023. In addition, the Company’s criticized loans and classified loans to total loans and leases on March 31, 2024 improved to 2.75% and 1.07%, respectively, as compared to 2.99% and 1.08%, respectively as of December 31, 2023.

The Company recorded a total provision for credit losses of $3.0 million during the quarter and the allowance for credit losses to total loans held for investment was static quarter over quarter at 1.33%.

Continued Strong Capital Levels

As of March 31, 2024, the Company’s total risk-based capital ratio was 14.30%, the common equity tier 1 ratio was 9.91% and the tangible common equity to tangible assets ratio (“TCE”) (non-GAAP) was 8.94%. By comparison, these respective ratios were 14.29%, 9.67% and 8.75% as of December 31, 2023. The Company remains focused on growing capital and targeting TCE (non-GAAP) in the top quartile of the Company’s peer group.

The Company’s tangible book value per share (non-GAAP) increased by $1.12, or 10.2% annualized, during the fourth quarter. Accumulated other comprehensive income (“AOCI”) decreased $5.4 million during the quarter primarily due to a decrease in the value of the Company’s available for sale securities portfolio and certain derivatives resulting from the change in long-term interest rates. However, the combination of strong earnings and a modest dividend contributed to the improvement in tangible book value per share (non-GAAP).

Conference Call Details

The Company will host an earnings call/webcast tomorrow, April 24, 2024, 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 May 1, 2024. The replay access information is 877-344-7529 (international 412-317-0088); access code 3766140. A webcast of the teleconference can be accessed on the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About UsQCR 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, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank in 2022, with the combined entity operating under the Guaranty Bank name. 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 Waukesha, Wisconsin, and also provides correspondent banking services. The Company has 36 locations in Iowa, Missouri, Wisconsin and Illinois. As of March 31, 2024, the Company had $8.6 billion in assets, $6.6 billion in loans and $6.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economies(including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business as a result of the upcoming 2024 presidential election or any changes in response to failures of other banks; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversity their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xixi) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

Contact:Todd A. GipplePresidentChief Financial Officer(309) 743-7745tgipple@qcrh.com

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
		2024			2023			2023			2023			2023
	(dollars in thousands)
CONDENSED BALANCE SHEET
Cash and due from banks	$	80,988		$	97,123		$	104,265		$	84,084		$	64,295
Federal funds sold and interest-bearing deposits		77,020			140,369			80,650			175,012			253,997
Securities, net of allowance for credit losses		1,031,861			1,005,528			896,394			882,888			877,446
Loans receivable held for sale (1)		275,344			2,594			278,893			295,057			140,633
Loans/leases receivable held for investment		6,372,992			6,540,822			6,327,414			6,084,263			6,049,389
Allowance for credit losses		(84,470	)		(87,200	)		(87,669	)		(85,797	)		(86,573	)
Intangibles		13,131			13,821			14,537			15,228			15,993
Goodwill		139,027			139,027			139,027			139,027			138,474
Derivatives		183,888			188,978			291,295			170,294			130,350
Other assets		509,768			497,832			495,251			466,617			452,900
Total assets	$	8,599,549		$	8,538,894		$	8,540,057		$	8,226,673		$	8,036,904
Total deposits	$	6,806,775		$	6,514,005		$	6,494,852		$	6,606,720		$	6,501,663
Total borrowings		489,633			718,295			712,126			418,368			417,480
Derivatives		211,677			214,098			320,220			195,841			150,401
Other liabilities		184,122			205,900			184,476			183,055			165,866
Total stockholders' equity		907,342			886,596			828,383			822,689			801,494
Total liabilities and stockholders' equity	$	8,599,549		$	8,538,894		$	8,540,057		$	8,226,673		$	8,036,904
ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix: (2)
Commercial and industrial - revolving	$	326,129		$	325,243		$	299,588		$	304,617		$	307,612
Commercial and industrial - other		1,374,333			1,390,068			1,381,967			1,308,853			1,322,384
Commercial and industrial - other - LIHTC		96,276			91,710			105,601			93,700			97,947
Total commercial and industrial		1,796,738			1,807,021			1,787,156			1,707,170			1,727,943
Commercial real estate, owner occupied		621,069			607,365			610,618			609,717			616,922
Commercial real estate, non-owner occupied		1,055,089			1,008,892			955,552			963,814			982,716
Construction and land development		410,918			477,424			472,695			437,682			448,261
Construction and land development - LIHTC		738,609			943,101			921,359			870,084			759,924
Multi-family		296,245			284,721			282,541			280,418			229,370
Multi-family - LIHTC		1,007,321			711,422			874,439			820,376			740,500
Direct financing leases		28,089			31,164			34,401			32,937			35,373
1-4 family real estate		563,358			544,971			539,931			535,405			532,491
Consumer		130,900			127,335			127,615			121,717			116,522
Total loans/leases	$	6,648,336		$	6,543,416		$	6,606,307		$	6,379,320		$	6,190,022
Less allowance for credit losses		84,470			87,200			87,669			85,797			86,573
Net loans/leases	$	6,563,866		$	6,456,216		$	6,518,638		$	6,293,523		$	6,103,449
ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities	$	14,442		$	14,973		$	16,002		$	18,942		$	19,320
Municipal securities		884,469			853,645			764,017			743,608			731,689
Residential mortgage-backed and related securities		56,071			59,196			57,946			60,958			63,104
Asset backed securities		14,285			15,423			16,326			17,393			17,967
Other securities		40,539			41,115			43,272			43,156			46,535
Trading securities		22,258			22,368			-			-			-
Total securities (3)	$	1,032,064		$	1,006,720		$	897,563		$	884,057		$	878,615
Less allowance for credit losses		203			1,192			1,169			1,169			1,169
Net securities	$	1,031,861		$	1,005,528		$	896,394		$	882,888		$	877,446
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits	$	955,167		$	1,038,689		$	1,027,791		$	1,101,605		$	1,189,858
Interest-bearing demand deposits		4,714,555			4,338,390			4,416,725			4,374,847			4,033,193
Time deposits		875,491			851,950			788,692			765,801			679,946
Brokered deposits		261,562			284,976			261,644			364,467			598,666
Total deposits	$	6,806,775		$	6,514,005		$	6,494,852		$	6,606,720		$	6,501,663
ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances	$	135,000		$	135,000		$	135,000		$	135,000		$	135,000
Overnight FHLB advances		70,000			300,000			295,000			-			-
Other short-term borrowings		2,700			1,500			470			1,850			1,100
Subordinated notes		233,170			233,064			232,958			232,852			232,746
Junior subordinated debentures		48,763			48,731			48,698			48,666			48,634
Total borrowings	$	489,633		$	718,295		$	712,126		$	418,368		$	417,480
(1) Loans with a fair value of $274.8 million, $278.0 million, $291.0 million and $139.2 million have been identified for securitization and are included in LHFS at March 31, 2024, September 30, 2023, June 30, 2023 and March 31, 2023 respectively.
(2) Loan categories with significant LIHTC loan balances have been broken out separately. Total LIHTC balances within the loan/lease portfolio were $1.9 billion at March 31, 2024.
(3) As of March 31, 2024 and December 31, 2023, trading securities consisted of retained beneficial interests acquired in conjunction with Freddie Mac securitizations completed by the Company in 2023.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
	For the Quarter Ended
	March 31,			December 31,			September 30,			June 30,		March 31,
		2024			2023			2023			2023		2023
	(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income	$	115,049		$	112,248		$	108,568		$	98,377	$	94,217
Interest expense		60,350			56,512			53,313			45,172		37,407
Net interest income		54,699			55,736			55,255			53,205		56,810
Provision for credit losses		2,969			5,199			3,806			3,606		3,928
Net interest income after provision for credit losses	$	51,730		$	50,537		$	51,449		$	49,599	$	52,882
Trust fees	$	3,199		$	3,084		$	2,863		$	2,844	$	2,906
Investment advisory and management fees		1,101			1,052			947			986		879
Deposit service fees		2,022			2,008			2,107			2,034		2,028
Gains on sales of residential real estate loans, net		382			323			476			500		312
Gains on sales of government guaranteed portions of loans, net		24			24			-			-		30
Capital markets revenue		16,457			36,956			15,596			22,490		17,023
Securities gains (losses), net		-			-			-			12		(463	)
Earnings on bank-owned life insurance		868			832			1,807			838		707
Debit card fees		1,466			1,561			1,584			1,589		1,466
Correspondent banking fees		512			465			450			356		391
Loan related fee income		836			845			800			770		651
Fair value gain (loss) on derivatives		(163	)		(582	)		(336	)		83		(427	)
Other		154			1,161			299			18		339
Total noninterest income	$	26,858		$	47,729		$	26,593		$	32,520	$	25,842
Salaries and employee benefits	$	31,860		$	41,059		$	32,098		$	31,459	$	32,003
Occupancy and equipment expense		6,514			6,789			6,228			6,100		5,914
Professional and data processing fees		4,613			4,223			4,456			4,078		3,514
Post-acquisition compensation, transition and integration costs		-			-			-			-		207
FDIC insurance, other insurance and regulatory fees		1,945			2,115			1,721			1,927		1,374
Loan/lease expense		378			834			826			652		556
Net cost of (income from) and gains/losses on operations of other real estate		(30	)		38			3			-		(67	)
Advertising and marketing		1,483			1,641			1,429			1,735		1,237
Communication and data connectivity		401			449			478			471		665
Supplies		275			333			335			281		305
Bank service charges		568			761			605			621		605
Correspondent banking expense		305			300			232			221		210
Intangibles amortization		690			716			691			765		766
Payment card processing		646			836			733			542		545
Trust expense		425			413			432			337		214
Other		617			431			814			538		737
Total noninterest expense	$	50,690		$	60,938		$	51,081		$	49,727	$	48,785
Net income before income taxes	$	27,898		$	37,328		$	26,961		$	32,392	$	29,939
Federal and state income tax expense		1,172			4,473			1,840			3,967		2,782
Net income	$	26,726		$	32,855		$	25,121		$	28,425	$	27,157
Basic EPS	$	1.59		$	1.96		$	1.50		$	1.70	$	1.62
Diluted EPS	$	1.58		$	1.95		$	1.49		$	1.69	$	1.60
Weighted average common shares outstanding		16,783,348			16,734,080			16,717,303			16,701,950		16,776,289
Weighted average common and common equivalent shares outstanding		16,910,675			16,875,952			16,847,951			16,799,527		16,942,132

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
	As of and for the Quarter Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2024			2023			2023			2023			2023
	(dollars in thousands, except per share data)
COMMON SHARE DATA
Common shares outstanding		16,807,056			16,749,254			16,731,646			16,713,853			16,713,775
Book value per common share (1)	$	53.99		$	52.93		$	49.51		$	49.22		$	47.95
Tangible book value per common share (Non-GAAP) (2)	$	44.93		$	43.81		$	40.33		$	39.99		$	38.71
Closing stock price	$	60.74		$	58.39		$	48.52		$	41.03		$	43.91
Market capitalization	$	1,020,861		$	977,989		$	811,819		$	685,769		$	733,902
Market price / book value		112.51	%		100.31	%		98.00	%		83.36	%		91.57	%
Market price / tangible book value		135.18	%		133.29	%		120.30	%		102.59	%		113.43	%
Earnings per common share (basic) LTM (3)	$	6.75		$	6.78		$	6.65		$	6.89		$	6.06
Price earnings ratio LTM (3)	9.00 x			8.61 x			7.30 x			5.96 x			7.24 x
TCE / TA (Non-GAAP) (4)		8.94	%		8.75	%		8.05	%		8.28	%		8.21	%
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance	$	886,596		$	828,383		$	822,689		$	801,494		$	772,724
Net income		26,726			32,855			25,121			28,425			27,157
Other comprehensive income (loss), net of tax		(5,373	)		25,363			(19,415	)		(6,336	)		9,325
Common stock cash dividends declared		(1,008	)		(1,004	)		(1,003	)		(1,003	)		(1,010	)
Repurchase and cancellation of shares of common stock as a result of a share repurchase program		-			-			-			(967	)		(7,719	)
Other (5)		401			999			991			1,076			1,017
Ending balance	$	907,342		$	886,596		$	828,383		$	822,689		$	801,494
REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio		14.30	%		14.29	%		14.48	%		14.64	%		14.64	%
Tier 1 risk-based capital ratio		10.50	%		10.27	%		10.30	%		10.34	%		10.23	%
Tier 1 leverage capital ratio		10.33	%		10.03	%		9.92	%		10.06	%		9.73	%
Common equity tier 1 ratio		9.91	%		9.67	%		9.68	%		9.70	%		9.57	%
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)		1.25	%		1.53	%		1.21	%		1.44	%		1.37	%
Return on average total equity (annualized)		11.83	%		15.35	%		11.95	%		13.97	%		13.67	%
Net interest margin		2.82	%		2.90	%		2.89	%		2.93	%		3.18	%
Net interest margin (TEY) (Non-GAAP)(7)		3.25	%		3.32	%		3.31	%		3.29	%		3.52	%
Efficiency ratio (Non-GAAP) (8)		62.15	%		58.90	%		62.41	%		58.01	%		59.02	%
Gross loans/leases held for investment / total assets		74.11	%		76.60	%		74.09	%		73.96	%		75.27	%
Gross loans/leases held for investment / total deposits		93.63	%		100.41	%		97.42	%		92.09	%		93.04	%
Effective tax rate		4.20	%		11.98	%		6.82	%		12.25	%		9.29	%
Full-time equivalent employees (9)		986			996			987			1009			969
AVERAGE BALANCES
Assets	$	8,550,855		$	8,535,732		$	8,287,813		$	7,924,597		$	7,906,830
Loans/leases		6,598,614			6,483,572			6,476,512			6,219,980			6,165,115
Deposits		6,595,453			6,485,154			6,342,339			6,292,481			6,179,644
Total stockholders' equity		903,371			852,163			837,734			816,882			794,685
(1) Includes accumulated other comprehensive income (loss).
(2) Includes accumulated other comprehensive income (loss) and excludes intangible assets. See GAAP to Non-GAAP reconciliations.
(3) LTM : Last twelve months.
(4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.
(5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
(7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
(8) See GAAP to Non-GAAP reconciliations.
(9) The increase in full-time equivalent employees in the second quarter of 2023 and the subsequent decline in the third quarter of 2023 includes 19 summer interns.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
ANALYSIS OF NET INTEREST INCOME AND MARGIN
	For the Quarter Ended
	March 31, 2024							December 31, 2023							March 31, 2023
	Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost
	(dollars in thousands)
Fed funds sold	$	19,955	$	269	5.42	%		$	18,644	$	257	5.47	%		$	19,275	$	234	4.93	%
Interest-bearing deposits at financial institutions		91,557		1,200	5.27	%			72,439		986	5.40	%			73,584		821	4.53	%
Investment securities - taxable		373,540		4,261	4.55	%			365,686		4,080	4.45	%			332,640		3,366	4.05	%
Investment securities - nontaxable (1)		685,969		9,349	5.45	%			650,069		8,380	5.15	%			619,225		6,791	4.39	%
Restricted investment securities		38,085		674	7.00	%			40,625		670	6.45	%			37,766		513	5.43	%
Loans (1)		6,598,614		107,673	6.56	%			6,483,572		105,830	6.48	%			6,165,115		88,548	5.82	%
Total earning assets (1)	$	7,807,720	$	123,426	6.35	%		$	7,631,035	$	120,203	6.26	%		$	7,247,605	$	100,273	5.60	%
Interest-bearing deposits	$	4,529,325	$	39,072	3.47	%		$	4,465,279	$	37,082	3.29	%		$	4,067,405	$	23,776	2.37	%
Time deposits		1,107,622		12,345	4.48	%			982,356		10,559	4.26	%			869,912		6,003	2.80	%
Short-term borrowings		1,763		23	5.16	%			1,101		15	5.18	%			7,573		99	5.28	%
Federal Home Loan Bank advances		355,220		4,738	5.28	%			360,000		4,841	5.26	%			296,333		3,521	4.75	%
Subordinated debentures		233,101		3,480	5.97	%			232,994		3,308	5.68	%			232,679		3,311	5.69	%
Junior subordinated debentures		48,742		692	5.62	%			48,710		708	5.68	%			48,613		696	5.72	%
Total interest-bearing liabilities	$	6,275,773	$	60,350	3.86	%		$	6,090,440	$	56,513	3.68	%		$	5,522,515	$	37,406	2.74	%
Net interest income (1)			$	63,076						$	63,690						$	62,867
Net interest margin (2)					2.82	%						2.90	%						3.18	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.25	%						3.32	%						3.52	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.24	%						3.29	%						3.47	%
(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate.
(2) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
		2024			2023			2023			2023			2023
	(dollars in thousands, except per share data)
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
Beginning balance	$	87,200		$	87,669		$	85,797		$	86,573		$	87,706
Change in ACL for transfer of loans to LHFS		(3,377	)		266			175			(2,277	)		(1,709	)
Credit loss expense		3,736			2,519			3,260			3,313			2,458
Loans/leases charged off		(3,560	)		(3,354	)		(1,816	)		(1,947	)		(2,275	)
Recoveries on loans/leases previously charged off		471			100			253			135			393
Ending balance	$	84,470		$	87,200		$	87,669		$	85,797		$	86,573
NONPERFORMING ASSETS
Nonaccrual loans/leases	$	29,439		$	32,753		$	34,568		$	26,062		$	22,947
Accruing loans/leases past due 90 days or more		142			86			-			83			15
Total nonperforming loans/leases		29,581			32,839			34,568			26,145			22,962
Other real estate owned		784			1,347			120			-			61
Other repossessed assets		962			-			-			-			-
Total nonperforming assets	$	31,327		$	34,186		$	34,688		$	26,145		$	23,023
ASSET QUALITY RATIOS
Nonperforming assets / total assets		0.36	%		0.40	%		0.41	%		0.32	%		0.29	%
ACL for loans and leases / total loans/leases held for investment		1.33	%		1.33	%		1.39	%		1.41	%		1.43	%
ACL for loans and leases / nonperforming loans/leases		285.55	%		265.54	%		253.61	%		328.16	%		377.03	%
Net charge-offs as a % of average loans/leases		0.05	%		0.05	%		0.02	%		0.03	%		0.03	%
INTERNALLY ASSIGNED RISK RATING (1) (2)
Special mention	$	111,729		$	125,308		$	128,052		$	117,761		$	125,170
Substandard/Classified loans (3)		70,841			70,425			72,550			67,192			74,307
Doubtful/Classified loans (3)		-			-			-			-			-
Criticized loans (4)	$	182,570		$	194,674		$	200,602		$	184,953		$	199,477
Classified loans as a % of total loans/leases		1.07	%		1.08	%		1.10	%		1.05	%		1.20	%
Criticized loans as a % of total loans/leases		2.75	%		2.98	%		3.04	%		2.90	%		3.22	%
(1) During the first quarter of 2024, the Company revised the risk rating scale used for credit quality monitoring.
(2) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass for the government guaranteed portion.
(3) Classified loans are defined as loans with internally assigned risk ratings of 10 or 11 (7 or 8 prior to January 1, 2024), regardless of performance.
(4) Criticized loans are defined as loans with internally assigned risk ratings of 9, 10, or 11 (6, 7, or 8 prior to January 1, 2024), regardless of performance.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
		For the Quarter Ended
		March 31,				December 31,				March 31,
SELECT FINANCIAL DATA - SUBSIDIARIES			2024				2023				2023
		(dollars in thousands)
TOTAL ASSETS
Quad City Bank and Trust (1)		$	2,618,727			$	2,448,957			$	2,548,473
m2 Equipment Finance, LLC			350,801				345,682				317,497
Cedar Rapids Bank and Trust			2,423,936				2,419,146				2,196,560
Community State Bank			1,445,230				1,426,202				1,286,227
Guaranty Bank			2,327,985				2,281,296				2,147,776
TOTAL DEPOSITS
Quad City Bank and Trust (1)		$	2,161,515			$	1,878,375			$	2,173,343
Cedar Rapids Bank and Trust			1,757,353				1,748,516				1,663,138
Community State Bank			1,187,926				1,169,921				1,086,531
Guaranty Bank			1,743,514				1,771,371				1,646,730
TOTAL LOANS & LEASES
Quad City Bank and Trust (1)		$	2,046,038			$	1,983,679			$	1,872,029
m2 Equipment Finance, LLC			354,815				350,641				321,495
Cedar Rapids Bank and Trust			1,680,127				1,698,447				1,637,252
Community State Bank			1,113,070				1,099,262				994,454
Guaranty Bank			1,809,101				1,762,027				1,686,287
TOTAL LOANS & LEASES / TOTAL DEPOSITS
Quad City Bank and Trust (1)			95	%			106	%			86	%
Cedar Rapids Bank and Trust			96	%			97	%			98	%
Community State Bank			94	%			94	%			92	%
Guaranty Bank			104	%			99	%			102	%
TOTAL LOANS & LEASES / TOTAL ASSETS
Quad City Bank and Trust (1)			78	%			81	%			73	%
Cedar Rapids Bank and Trust			69	%			70	%			75	%
Community State Bank			77	%			77	%			77	%
Guaranty Bank			78	%			77	%			79	%
ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES
Quad City Bank and Trust (1)			1.40	%			1.48	%			1.41	%
m2 Equipment Finance, LLC			3.75	%			3.80	%			3.13	%
Cedar Rapids Bank and Trust			1.34	%			1.39	%			1.50	%
Community State Bank			1.12	%			1.23	%			1.38	%
Guaranty Bank			1.15	%			1.18	%			1.29	%
RETURN ON AVERAGE ASSETS
Quad City Bank and Trust (1)			0.79	%			0.67	%			1.23	%
Cedar Rapids Bank and Trust			3.09	%			3.78	%			3.07	%
Community State Bank			1.25	%			1.11	%			1.49	%
Guaranty Bank			0.88	%			1.41	%			1.02	%
NET INTEREST MARGIN PERCENTAGE (2)
Quad City Bank and Trust (1)			3.31	%			3.41	%			3.44	%
Cedar Rapids Bank and Trust			3.77	%			3.84	%			4.03	%
Community State Bank			3.75	%			3.74	%			3.99	%
Guaranty Bank (3)			2.98	%			3.07	%			3.49	%
ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
INTEREST MARGIN, NET
Cedar Rapids Bank and Trust		$	-			$	-			$	(8	)
Community State Bank			(1	)			(1	)			71
Guaranty Bank			396				706				797
QCR Holdings, Inc. (4)			(32	)			(32	)			(32	)
(1) Quad City Bank and Trust amounts include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
(2) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% federal tax rate.
(3) Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.91% for the quarter ended March 31, 2024, 2.95% for the quarter ended December 31, 2023 and 3.39% for the quarter ended March 31, 2023.
(4) 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 Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
		As of
		March 31,				December 31,				September 30,				June 30,				March 31,
GAAP TO NON-GAAP RECONCILIATIONS			2024				2023				2023				2023				2023
		(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
Stockholders' equity (GAAP)		$	907,342			$	886,596			$	828,383			$	822,689			$	801,494
Less: Intangible assets			152,158				152,848				153,564				154,255				154,467
Tangible common equity (non-GAAP)		$	755,184			$	733,748			$	674,819			$	668,434			$	647,027
Total assets (GAAP)		$	8,599,549			$	8,538,894			$	8,540,057			$	8,226,673			$	8,036,904
Less: Intangible assets			152,158				152,848				153,564				154,255				154,467
Tangible assets (non-GAAP)		$	8,447,391			$	8,386,046			$	8,386,493			$	8,072,418			$	7,882,437
Tangible common equity to tangible assets ratio (non-GAAP)			8.94	%			8.75	%			8.05	%			8.28	%			8.21	%
(1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)
GAAP TO NON-GAAP RECONCILIATIONS		For the Quarter Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
ADJUSTED NET INCOME (1)			2024				2023				2023				2023				2023
		(dollars in thousands, except per share data)
Net income (GAAP)		$	26,726			$	32,855			$	25,121			$	28,425			$	27,157
Less non-core items (post-tax) (2):
Income:
Securities gains (losses), net			-				-				-				9				(366	)
Fair value gain (loss) on derivatives, net			(129	)			(460	)			(265	)			66				(337	)
Total non-core income (non-GAAP)		$	(129	)		$	(460	)		$	(265	)		$	75			$	(703	)
Expense:
Post-acquisition compensation, transition and integration costs			-				-				-				-				164
Total non-core expense (non-GAAP)		$	-			$	-			$	-			$	-			$	164
Adjusted net income (non-GAAP) (1)		$	26,855			$	33,315			$	25,386			$	28,350			$	28,024
ADJUSTED EARNINGS PER COMMON SHARE (1)
Adjusted net income (non-GAAP) (from above)		$	26,855			$	33,315			$	25,386			$	28,350			$	28,024
Weighted average common shares outstanding			16,783,348				16,734,080				16,717,303				16,701,950				16,776,289
Weighted average common and common equivalent shares outstanding			16,910,675				16,875,952				16,847,951				16,799,527				16,942,132
Adjusted earnings per common share (non-GAAP):
Basic		$	1.60			$	1.99			$	1.52			$	1.70			$	1.67
Diluted		$	1.59			$	1.97			$	1.51			$	1.69			$	1.65
ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)
Adjusted net income (non-GAAP) (from above)		$	26,855			$	33,315			$	25,386			$	28,350			$	28,024
Average Assets		$	8,550,855			$	8,535,732			$	8,287,813			$	7,924,597			$	7,906,830
Adjusted return on average assets (annualized) (non-GAAP)			1.26	%			1.56	%			1.23	%			1.43	%			1.42	%
Adjusted return on average equity (annualized) (non-GAAP)			11.89	%			15.64	%			12.12	%			13.88	%			14.11	%
NET INTEREST MARGIN (TEY) (3)
Net interest income (GAAP)		$	54,699			$	55,736			$	55,255			$	53,205			$	56,810
Plus: Tax equivalent adjustment (4)			8,377				7,954				7,771				6,542				6,057
Net interest income - tax equivalent (Non-GAAP)		$	63,076			$	63,690			$	63,026			$	59,747			$	62,867
Less: Acquisition accounting net accretion			363				673				539				134				828
Adjusted net interest income		$	62,713			$	63,017			$	62,487			$	59,613			$	62,039
Average earning assets		$	7,807,720			$	7,631,035			$	7,573,785			$	7,283,286			$	7,247,605
Net interest margin (GAAP)			2.82	%			2.90	%			2.89	%			2.93	%			3.18	%
Net interest margin (TEY) (Non-GAAP)			3.25	%			3.32	%			3.31	%			3.29	%			3.52	%
Adjusted net interest margin (TEY) (Non-GAAP)			3.24	%			3.29	%			3.28	%			3.28	%			3.47	%
EFFICIENCY RATIO (5)
Noninterest expense (GAAP)		$	50,690			$	60,938			$	51,081			$	49,727			$	48,785
Net interest income (GAAP)		$	54,699			$	55,736			$	55,255			$	53,205			$	56,810
Noninterest income (GAAP)			26,858				47,729				26,593				32,520				25,842
Total income		$	81,557			$	103,465			$	81,848			$	85,725			$	82,652
Efficiency ratio (noninterest expense/total income) (Non-GAAP)			62.15	%			58.90	%			62.41	%			58.01	%			59.02	%
(1) Adjusted net income, adjusted earnings per common share, adjusted return on average assets and average equity are non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-In compliance with applicable rules of the SEC, these non-GAAP measures are reconciled to net income, which is the most directly comparable GAAP financial measure.core or non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods.
(2) Non-core or nonrecurring items (post-tax) are calculated using an estimated effective federal tax rate of 21%.
(3) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(4) Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
(5) Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.