QCR Holdings, Inc. Annual Report 2017

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FY2017 Annual Report · QCR Holdings, Inc.

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OUR MISSION

We make financial dreams a reality

OUR VISION

We will be ranked in the top quartile ROA
of peer firms by 2020

THE VALUES LIVED AND EXPECTED
OF ALL AT QCR HOLDINGS, INC.

Achievement - We work to win

Collaboration - We learn from each other

Personal Responsibility - We own it

Innovation - We make it better

Fulfillment - We have fun

To maximize shareholder value

To reward employees, shareholders, clients and
strengthen and serve our communities long-term

ON BEHALF OF QCR HOLDINGS, INC.,
IT IS A PLEASURE TO PRESENT OUR 2017
ANNUAL REPORT.

PAT BAIRD
Chair of the Board

As a board, we are absolutely dedicated to the relationship driven community banking model for our
chosen markets. Local decision making, best in class customer service and offering certain products and
services not offered by other community banks is how we distinguish ourselves. We believe the results
for 2017 once again show this to be the case and that we have a long-term, sustainable approach to our
business that works well for both clients and shareholders.

A Board is tasked with many responsibilities to ensure it is responsive to the interests of investors,
regulators and other interested parties. While this Board takes all of these responsibilities seriously, most
important to us is making sure we have the right management in place in all levels of the organization.
As the Company continues to grow organically and expand into new markets, this will no doubt become
more of a challenge. Rest assured that quality of management and development of management for the
future will remain a top priority.

Finally, we thank you for being investors and clients, and hope you find our 2017 Annual Report useful
and informative.

2017 ANNUAL REPORT2017RELATIONSHIP DRIVENSUMMARY OF FINANCIAL RESULTS 2013 - 2017
(in thousands)

2013

2014

2015

2016

2017

Net interest income

Non-interest income

$64,105

$69,071

$76,296

$94,517

$116,065

26,846

21,282

24,364

31,037

30,482

Non-interest expense

(65,465)

(65,554)

(73,192)

(81,486)

(97,424)

Pre-tax pre-provision net income

25,486

24,799

27,468

44,068

49,123

Provision for loan/lease losses

(5,930)

(6,807)

(6,871)

(7,478)

(8,470)

Net income before taxes

19,556

17,992

20,597

36,590

40,653

Income taxes

(4,618)

(3,039)

(3,669)

(8,903)

(4,946)

Net income attributable to QCR Holdings, Inc.

$14,938

$14,953

$16,928

$27,687

$35,707

ASSET GROWTH
(IN THOUSANDS)

* Includes acquisition of Community National Bank
** Includes acquisition of Community State Bank
*** Includes acquisition of Guaranty Bank & Trust

BOOK VALUE VS.
FAIR MARKET VALUE
COMMON STOCK (IN MILLIONS)

TOTAL METROPOLITAN
STATISTICAL AREA DEPOSITS
(JUNE 30, 2017 IN THOUSANDS)

$20,000,000

$15,000,000

$10,000,000

$5,000,000

FAIR MARKET VALUE
BOOK VALUE

$600

$300

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QCR HOLDINGS, INC.

TO OUR SHAREHOLDERS

Be Exceptional. At QCR Holdings, Inc., our employees live by those words
every day. For our clients that means Exceptional local service. For our
communities that means Exceptional sharing of our time and talents. And,
for our shareholders that means delivering Exceptional value. We are pleased
to report Exceptional net income of $35.7 million for the year 2017.

After a successful acquisition of Community State Bank of
Ankeny (Des Moines, Iowa) in 2016, on October 1, 2017 we
completed a strategic in-market acquisition, Guaranty Bank
& Trust (Guaranty) in Cedar Rapids, Iowa. QCR Holdings, Inc.’s
merger and acquisition experience and dedicated employees
helped effectively convert and merge Guaranty’s systems into
Cedar Rapids Bank & Trust (CRBT) in a very short time of 60 days.
We are delighted to welcome the Guaranty clients, employees
and shareholders to the QCR Holdings, Inc. family. The addition
of three Guaranty branches and their clients enhances our
competitive position and now CRBT ranks #2 in deposit market
share in the Cedar Rapids metropolitan statistical area (MSA).
CRBT’s assets grew to $1.3 billion in 2017 and as importantly,
the addition of Guaranty increases core deposits while lowering
CRBT’s average costs of funds.

While a record 252 bank mergers and acquisitions were
announced in 2017 and the average deal sizes and premiums
rose, QCR Holdings, Inc. continues to be very selective in
its strategic approach to acquisitions. Like the Guaranty
acquisition, future acquisitions and mergers need to be a
strategic fit, be a culture fit, provide value to clients and deliver
increased earnings to shareholders.

QCR Holdings, Inc.’s 2017 annual growth of total assets of 23.6%
significantly exceeded our peer group’s total asset growth of
11.4%. This means QCR Holdings, Inc. increased its assets $681
million to a total of $4 billion. Organic loan and lease growth
was an exceptional 15.2% exceeding our 10% to 12% target.
Importantly, this growth was primarily funded by a $597
million, or 22% growth in deposits in 2017. Our success in swap
fee income and gains on the sale of government guaranteed

loans was robust in 2017 delivering $4.3 million of income. As
stated in our seven key initiatives, we will continue to focus
on strong organic loan and lease growth funded with core
deposits.

Serving stable and vibrant markets provides greater
opportunities for QCR Holdings, Inc. and its banks to continue
organic growth. We believe Community State Bank is uniquely
positioned in the Des Moines, Iowa market. According to the
Bureau of Labor Statistics, in the first half of 2017, the Des
Moines area expanded its job base by 2.41% or over three times
the national average, adding 8,700 jobs to its employment
ranks. No wonder Forbes Magazine has twice ranked Des
Moines as the “Best Place for Business” in America. The Cedar
Rapids, Iowa and Quad Cities markets continue to be stable
while the Rockford, Illinois market predicts significant job
growth over the coming decade.

It will take time to see how the largest tax reform in decades
plays out among our clients. However, the biggest impact
on businesses is the reduction of the top corporate tax rate
from 35% to 21%. The reduction required all companies to re-
measure their deferred tax assets and deferred tax liabilities.
While many financial
institutions announced significant
downward earnings adjustments in 2017 with a negative
impact on tangible book value, QCR Holdings, Inc. recorded a
$2.9 million increase in the value of its net deferred tax asset.
We will use the tax savings to continue to support our growth,
invest in our employees, strategically invest in technologies
to improve our competitive position, and enhance long-term
shareholder value.

2017 ANNUAL REPORTCONSOLIDATED EARNINGS (in thousands)

Quad City Bank & Trust (1)

$ 10,273

$ 10,451

$ 11,762

$ 15,411

2013

2014

2015

2016

Cedar Rapids Bank & Trust

Rockford Bank & Trust

Community State Bank

Guaranty Bank & Trust

6,736

1,579

8,006

1,877

8,108

2,189

12,729

3,201

2,127

2017 (3)

$ 23,794

11,143

2,698

7,076

392

Parent Co. & Eliminations (2)

(3,650)

(5,381)

(5,131)

(5,781)

(9,397)

Consolidated Earnings

$ 14,938

$ 14,953

$ 16,928

$ 27,687

$ 35,707

(1) Includes m2 Lease Funds.
(2) Includes acquisition costs for the acquisition of GB&T in 2017, CSB in 2016, and all acquisition costs net of the bargain purchase gain for the acquisition of CB&T in 2013.
(3) 2017 results include tax reform adjustments

2017 Financial Results

QCR Holdings, Inc. Strategic Advantages

During 2017, we continued to build on the identified niches below that have been enhancing our growth

over the last several years. We believe these niches offer variety and diversity to our business model and

valuable expertise to our clients. We will continue to invest wisely in our people, products and technology

as we look for opportunities of further growth not only in these lines of business but in our core business

as well. We will also continue to collaborate and leverage opportunities across our entire Company to

maximize shareholder value at every opportunity.

Correspondent Banking Division – The Correspondent Banking Division at Quad City Bank & Trust continues to seize opportunities to
deliver exceptional client service to downstream banks in Illinois, Iowa and Wisconsin. During 2017, we were able to increase the total
number of banks we serve to 187 and had a total of $261 million in non-interest bearing deposits at year end. In 2017, Quad City Bank
& Trust introduced the Correspondent Money Market product which experienced growth of $150 million. Total non-interest bearing
and money market deposits were $411 million at the end of 2017 in comparison to $354 million in total deposits at the end of 2016.
Our veteran team of bankers provides many layers of expertise in areas such as treasury management, trust and investment services,
loans and leases.

Wealth Management Division – The expertise found across our company in our Wealth Management Division is a distinguishable
competitive advantage. Our ability to provide clients with a continuum of services is crucial to deepening relationships. With offerings
in portfolio management, investment services, trust administration and financial planning, we add non-interest income to our
organization. In 2017, assets under management totaled $3.6 billion and our veteran staff added 422 new relationships. The $3.6
billion of assets under management were a combination of an increase in market value, new and expanded relationships and the
relationships from the merger of Guaranty Bank & Trust with Cedar Rapids Bank & Trust in the Cedar Rapids, Iowa market.

m2 Lease Funds – m2 Lease Funds, a wholly owned subsidiary of Quad City Bank & Trust, celebrated its 20 year anniversary, and its
12 year anniversary as part of QCR Holdings, Inc. The m2 Lease Funds business model of providing quick and responsive turnarounds
in a simple and straight forward manner remains sound. m2 is nationwide and has leasing specialists located in Iowa, Wisconsin,
Minnesota, South Carolina, North Carolina, Florida, California, Pennsylvania and Georgia. m2’s portfolio had an average yield of 5.29%
in 2017 with income growth of 13.25% CAGR since 2006.

QCR HOLDINGS, INC.Results by Entity

Quad City Bank & Trust – Under the leadership of President and CEO,
John Anderson, the Company’s first subsidiary bank (1994), reported total
consolidated assets of $1.5 billion at December 31, 2017. The bank continues
to have success in adding new clients to its Correspondent Banking and
Wealth Management businesses. Quad City Bank & Trust realized record core
net income of $17.1 million for the year ended December 31, 2017, which
compares to $15.4 million in 2016. The results for 2017 exclude a $6.7 million
tax benefit related to tax reform.

Cedar Rapids Bank & Trust – President and CEO, Larry Helling, one of the
founders of Cedar Rapids Bank & Trust (2001), and his team achieved core
net income of $13.1 million for the year ended December 31, 2017, which
compares to $12.7 million in 2016. The results for 2017 exclude $2.0 million
of additional tax expense related to tax reform. The fourth quarter of 2017
in-market acquisition and successful merger of Guaranty into CRBT brought
the bank’s total assets at December 31, 2017 to $1.3 billion. The addition of
Guaranty clients, shareholders and employees enables Cedar Rapids Bank &
Trust to continue to grow and to serve all clients with three new convenient
banking locations in the metro area.

Rockford Bank & Trust – Led by President and CEO, Tom Budd, Rockford Bank
& Trust (2005) reported core net income for 2017 of $3.7 million. The results for
2017 excluded $973 thousand of additional tax expense related to tax reform.
By comparison, the bank reported net income of $3.2 million in 2016. Total
assets finished the year at $461.7 million as of December 31, 2017.

Community State Bank – In its first full year with the Company, CEO, Ron
Nagel led his team at Community State Bank (acquired in 2016) to a record
core net income of $7.2 million for the year ended December 31, 2017,
which compares to $5.6 million in 2016. The results for 2017 excluded a $678
thousand tax benefit related to tax reform, as well as $753 thousand of one-
time conversion costs (post-tax). Total assets for Community State Bank at
December 31, 2017 were $670.5 million. As part of an executive succession
plan and smooth transition of leadership, the bank welcomed Kurt Gibson as
President of the bank in October 2017.

Living the Brand – We continue to believe our people are the key
differentiator in each of our markets. As such, one measure of employee
performance is utilizing a metric we call “Living the Brand.” “Living the
Brand” means living our Brand Promise – making sure that each employee’s
performance is so good that our clients, internal and external, will always
experience great relationships, service and advice. It is our hope that by
placing daily emphasis on our Brand Promise every client will truly see “People
you can bank on®” in everything we do and our shareholders will experience
exceptional returns.

STRATEGIES TO CONTINUE

DRIVING SHAREHOLDER VALUE

The Company continues to focus on the

following seven stated initiatives in an

effort to further improve profitability and

drive shareholder value:

•

Strong organic loan and lease

growth to maintain loans and leases

to total assets ratio in the range of

73% - 78%

•

Grow core deposits to maintain

reliance on wholesale funding at

less than 15% of assets

•

Generate gains on the sale of USDA

and SBA loans, and fee income on

interest rate swaps, as a significant

and consistent component of core

revenue

•

Grow wealth management net

income by 10% annually

•

Carefully manage non-interest

expense growth

• Maintain asset quality metrics at

better than peer levels

•

Participate as an acquirer in the

consolidation taking place in our

industry to further boost ROAA,

improve efficiency ratio and

increase EPS

DOUGLAS M. HULTQUIST
President and Chief Executive Officer,
Co-Founder, QCR Holdings, Inc.

TODD A. GIPPLE
Executive Vice President, Chief Operating Officer
and Chief Financial Officer, QCR Holdings, Inc.

2017 ANNUAL REPORTDEEPEST THANKS TO OUR FOUNDING BOARD MEMBERS
JAMES J. BROWNSON AND RONALD G. PETERSON

JAMES J. BROWNSON

RONALD G. PETERSON

MENTORS • LEADERS • ADVOCATES • FRIENDS

Ron Peterson also began as one of the original directors of
QCBT in 1993 and was Chair of the Loan Committee until
his retirement in May 2017. Ron’s expertise and calming
influence led QCBT through the recession, leaving an
indelible imprint and sage advice for the staff that will
carry them through any difficult times to come. Ron was
one of the original directors of QCR Holdings, Inc., as he
was appointed to the Board in February 1993, serving 24
years until his retirement in May 2017. Throughout most
of Ron’s Board tenure, Ron was the President and CEO of
First State Bank of Illinois. Ron’s in-depth knowledge and
commitment to local community banking, along with his
common sense approach to business and banking, made
him a staff favorite.

Jim and Ron, our deepest thanks to both of you.

Thank you for being such an important part of our story,
thank you for believing in us, and thank you for always
brightening our days with your unending gifts of time and
talent.

Every exceptional organization begins with a strong
Inc. was extremely
foundation, and QCR Holdings,
fortunate to have the strongest foundation possible. James
“Jim” Brownson and Ronald “Ron” Peterson joined the
founding charter board, Quad City Bank & Trust (QCBT)
in 1993, and served until their recent retirements from
both our QCR Holdings, Inc. and QCBT Board of Directors.
From its inception, Jim and Ron believed in the “story” and
passionately advocated for our community banking model
upon every interaction and at every opportunity. With
their unparalleled banking, business and entrepreneurial
acumens, they served as our rudders from our humble
beginnings through our successes of today.

Jim Brownson began as one of the original directors of
QCBT in 1993 and served on the Board for 22 years, retiring
in May 2015. Jim was elected to QCR Holdings, Inc.'s Board
in September 1997. Jim served as the lead independent
QCR Holdings, Inc. Director starting in 2003 until being
appointed as our first independent Chair of the Board in
January 2007. Jim served in that capacity until May 2016,
facilitating the best one year transition possible for incoming
Chair, Pat Baird. Jim tirelessly served on every committee
of the QCR Holdings, Inc. Board and holds a Board record
for perfect attendance, all the while successfully leading
a legacy family business – W.E. Brownson Company.
Throughout Jim’s tenure, he made it a point to get to know
as many employees as possible and his approachable and
fun demeanor melded him to our staff.

QCR HOLDINGS, INC.QCR Holdings, Inc.
BOARD OF DIRECTORS

(Left to Right)

Marie Z. Ziegler // Vice Chair of the Board, QCR Holdings, Inc., Retired Executive, Deere & Company

Donna J. Sorensen, J.D. // President, Sorensen Consulting

Mark C. Kilmer // President, The Republic Companies

Patrick S. Baird // Chair of the Board, QCR Holdings, Inc., Retired President and Chief Executive Officer, AEGON USA, LLC

Michael L. Peterson // President and Owner, Peterson Genetics, Inc.

Todd A. Gipple // Executive Vice President, Chief Operating Officer and Chief Financial Officer, QCR Holdings, Inc.

Larry J. Helling // President and Chief Executive Officer, Cedar Rapids Bank & Trust

Douglas M. Hultquist // President and Chief Executive Officer, Co-Founder, QCR Holdings, Inc.

George T. Ralph III // Owner, GTR Realty Advisors, LLC

John-Paul E. Besong // Retired Executive, Rockwell Collins

Linda K. Neuman // Founder and Principal, Iowa Arbitrators, Associate Justice, Iowa Supreme Court (Retired)

2017 ANNUAL REPORTEXECUTIVE MANAGEMENT TRANSITIONS

We previously announced that Cathie S. Whiteside, Executive Vice President of Corporate

Strategy, Human Resources and Branding, retired on December 31, 2017. Ms. Whiteside

joined QCR Holdings, Inc. as an officer in 2007. Prior to that, she was Station Manager of

KWQC-TV6 and a board member of Quad City Bank & Trust, the largest subsidiary of QCR

Holdings, Inc. Ms. Whiteside will continue in a consulting role on a part-time basis.

Cathie has meant a great deal to our entire organization over these past ten years.
She came to work every day thinking about how to improve our culture, how
to improve our brand and how that should impact our long-term strategy. Her
retirement is a big loss for our company but we are pleased that she will now have
time to enjoy her family, travel and pursue her favorite pastimes. Cathie is very
respected in the Quad Cities community. She has served on numerous key charitable
boards and has received a number of awards for her volunteer efforts. QCR Holdings,
Inc. is a better company because of Cathie Whiteside.

Anne Howard has been promoted to Senior Vice President, Human Resources
Director and will assume Cathie’s human resources responsibilities. Anne joined QCR
Holdings, Inc. in 2009.

Chris Lindell, previously the CEO of Guaranty Bank, which we acquired in the
fourth quarter of 2017, has been named Executive Vice President of Corporate
Communications and Investor Relations and Corporate Secretary and will assume
many of Cathie’s other responsibilities.

Todd Kerska, previously the CFO of Guaranty Bank, has joined us as the Senior Vice
President/Senior Operations Officer. We are pleased to retain both Chris and Todd in
these key positions. Both were very instrumental in our combination with Guaranty
and subsequent integration.

Douglas M. Hultquist
President and Chief Executive Officer,
Co-Founder, QCR Holdings, Inc.

QCR HOLDINGS, INC.QCR Holdings, Inc.
EXECUTIVE MANAGEMENT TEAM

(Left to Right)

Dana L. Nichols // Executive Vice President, Chief Credit Officer

M. Randolph Westlund // Executive Vice President, Chief Investment Officer

Anne E. Howard // Senior Vice President, Director of Human Resources

Peter J. Benson // Executive Vice President and Chief Legal Officer, QCR Holdings, Inc.

Cathie S. Whiteside // Executive Vice President, Corporate Strategy, Human Resources and Branding

Thomas D. Budd // President and Chief Executive Officer, Rockford Bank & Trust

Cynthia M. Carlson // Executive Vice President, Wealth Management, Quad City Bank & Trust

Todd A. Gipple // Executive Vice President, Chief Operating Officer and Chief Financial Officer

Larry J. Helling // President and Chief Executive Officer, Cedar Rapids Bank & Trust / Executive Vice President, Chief Lending Officer, QCR Holdings, Inc.

Douglas M. Hultquist // President and Chief Executive Officer, Co-Founder

Shawna M. Graham // Senior Vice President, Chief Risk Officer

John R. Oakes // 1st Vice President, Treasurer

John H. Anderson // President and Chief Executive Officer, Quad City Bank & Trust / Executive Vice President, Chief Deposit Officer, QCR Holdings, Inc.

Stacey J. Bentley // President and Chief Executive Officer, Community Bank & Trust

John R. McEvoy // Executive Vice President, Chief Operations Officer and Cashier, Quad City Bank & Trust

Elizabeth A. Grabin // 1st Vice President, Director of Financial Reporting

John A. Rodriguez // Executive Vice President, Deposit Operations and Information Services

Michael J. Wyffels // Senior Vice President, Chief Information Officer

(Not Pictured)

Richard W. Couch // President and Chief Operating Officer, m2 Lease Funds, LLC

John R. Engelbrecht // Chief Executive Officer, m2 Lease Funds, LLC

Ronald M. Nagel // Chief Executive Officer, Community State Bank

2017 ANNUAL REPORT2017 COMPANY HIGHLIGHTS

422

WEALTH MANAGEMENT
RELATIONSHIPS ADDED HELPING
DRIVE MORE THAN $3.6 BILLION
IN TOTAL ASSETS UNDER
MANAGEMENT

17,740

TOTAL COMPANY WIDE
VOLUNTEER HOURS

15%

INCREASE IN LOANS
AND LEASES OVER 2016

$3,982,664,773

In Total Assets at December 31, 2017

$35.7 million
2017 ANNUAL
EARNINGS

24%

OF TOTAL DEPOSITS ARE
NON-INTEREST BEARING

$21.5 million

INCREASE (23%) IN NET INTEREST
INCOME OVER 2016

QCR HOLDINGS, INC.TOTAL DEPOSITS
(in millions)

12.31.15

12.31.16

12.31.17

Non-interest bearing demand deposits

$ 616

$ 797

$ 790

Interest bearing demand deposits

Time deposits

Brokered deposits

886

310

1,369

1,856

439

516

105

TOTAL DEPOSITS

$ 1,881

$ 2,669

$ 3,267

TOTAL ASSETS (in millions)

12.31.17

12.31.16

12.31.15

$3,983

$3,302

$2,593

$2,500

$5,000

GROSS LOANS/LEASES (in millions)

12.31.17

12.31.16

12.31.15

$2,964

$2,405

$1,798

$1,000

$2,000

$3,000

DEPOSIT MARKET SHARE (JUNE 30, 2017)

Quad Cities

14.2%

Rank #2 of 34

Cedar Rapids *

15.1%

Rank #2 of 40

Rockford

5.9%

Rank #7 of 26

Waterloo / Cedar Falls

3.6%

Rank #11 of 25

Ankeny / Des Moines

3.2%

Rank #8 of 49

* Includes Guaranty Bank & Trust

QCR Holdings, Inc.
Group Operations Management Team

Todd A. Gipple
Executive Vice President,
Chief Operating Officer
and Chief Financial Officer

Beth L. Easterla
Vice President,
Deposit Operations and
Electronic Banking Manager

Kathleen M. Francque
Senior Vice President,
Correspondent Banking and Information Services
Quad City Bank & Trust

Pamela J. Goodwin
Senior Vice President,
Loan Operations Manager

Elizabeth A. Grabin
1st Vice President,
Director of Financial Reporting

Shawna M. Graham
Senior Vice President,
Chief Risk Officer

R. Timothy Harding
Executive Vice President,
Director of Internal Audit

Anne E. Howard
Senior Vice President,
Director of Human Resources

Todd C. Kerska
Senior Vice President,
Senior Operations Officer

John R. McEvoy
Executive Vice President,
Chief Operations Officer and Cashier,
Quad City Bank & Trust

Kathy A. Nichols
Senior Vice President,
Retail Banking and Cashier,
Community State Bank

John R. Oakes
1st Vice President, Treasurer

John A. Rodriguez
Executive Vice President,
Deposit Operations and Information Services

Shellee R. Showalter
Senior Vice President,
Director of Investor Services and Compensation

Michael J. Wyffels
Senior Vice President,
Chief Information Officer

2017 ANNUAL REPORT

John Anderson

President and Chief Executive Officer,
Quad City Bank & Trust

EXCEPTIONAL - WHAT DOES THIS WORD INVOKE
WHEN YOU SEE IT, OR HEAR IT?

For the Quad City Bank & Trust team it is the cornerstone to how we approach each

interaction with our clients, along with how we serve our community, and ultimately

how well we perform as a company.

When defining our mission to make financial dreams a reality, it not only takes an

exceptional approach but an exceptional team to drive that mission based on our core

values: Collaboration, Personal Responsibility, Achievement, Innovation and Fulfillment.

This, in and of itself is a large task, but when you consider our Values and Mission are

driven by an exceptional local team who have made being exceptional in all things the

ultimate goal and outcome for each interaction, you see local community banking at

its finest.

QCR HOLDINGS, INC.

With one exception, the team has met or

exceeded our goals and they continue to

collaborate on ways to gain momentum.

Over the past 23 years, Quad City Bank & Trust

has grown from a de novo institution into a $1.5

billion bank headquartered in Bettendorf, Iowa,

a feat unimaginable to many when we opened

our doors in January of 1994.

Outside of all of these achievements, and at

our core, is the outstanding team of individuals

who place client satisfaction, shareholder return,

and growing our community, as their main
objectives. I am proud to be part of this team of

incredibly focused and talented professionals.

In our ever changing
world, one consistent
truth holds true for the
team at Quad City Bank &
Trust-make each and every
interaction an exceptional
experience and our
mission simply becomes
the outcome we desire to
provide.

Here is how our clients describe it.

The term “financial partnership” has become wildly overused. With Quad City Bank & Trust,

however, I don’t have a financial partnership—I have so much more. Quad City Bank &

Trust’s relationship with its clients is one of collaboration, one that explores paths and

options with me in mind, one that provides support and warns of possible problems,

one that will answer the phone, and one that makes things happen. I am backed by real

people who are driven to ensure my financial stability. I’ll take my Quad City Bank & Trust

partnership over an everyday financial partnership any day, any time.

Ernest Riggen

Owner, Fidlar Technologies

2017 ANNUAL REPORT

People you can bank on.®

Paul VanDuyne
President and CEO, IMEG Corp.

“Our employee-owned engineering consulting firm has entered a period of rapid expansion

and growth. To accomplish our current and future needs and goals, we required a true

banking partner. We have found that relationship with Quad City Bank & Trust.

From day one, Quad City Bank & Trust built a personal, active and responsive relationship

with us, molding their services to fit our needs and completing a seamless transfer of our

accounts without draining our resources in the process. Their officers and staff invested

their time to fully understand our operations and proposed business models, and worked

strategically to help us move forward. Their service and guidance have been exceptional,

providing us with the tools to meet our current operational needs – as well as the banking

instruments required to successfully complete our plans for the future.

We are proud of our roots in the Quad-Cities, where our firm was founded more than 50

years ago. We have maintained our headquarters here ever since – and plan to do so into the

future. Having a partner in Quad City Bank & Trust aligns with our local business tradition,

and sets us up for success as we continue our expansion plans.”

QCR HOLDINGS, INC.

I N V E S T I N G I N T H E Q UA D C I T I E S A R E A

WITH 10,324 EMPLOYEE HOURS
VOLUNTEERED IN 2017

DIRECTORS

SENIOR MANAGERS

John H. Anderson
President and Chief Executive Officer,
Quad City Bank & Trust

Mark C. Kilmer
Chair of the Board, Quad City Bank & Trust
President, The Republic Companies

Michael A. Bauer
Retired Executive, Quad CIty Bank & Trust,
Co-Founder, QCR Holdings, Inc.

Douglas M. Hultquist
President and Chief Executive Officer,
Co-Founder, QCR Holdings, Inc.

Steven R. Geifman
President and Managing Partner, Geifman | First Equity

Todd A. Gipple
Executive Vice President, Chief Operating Officer
and Chief Financial Officer, QCR Holdings, Inc.

John H. Harris, II
Retired Former President, Star Forms, Inc.
and Isabel Bloom, LLC

Linda K. Neuman
Vice Chair of the Board, Quad City Bank & Trust
Founder and Principal, Iowa Arbitrators
Associate Justice, Iowa Supreme Court (Retired)

Victor J. Quinn
Retired Executive, Quad City Bank & Trust

David J. Steil
Owner, Fidlar Technologies

James D. von Maur
President, Von Maur, Inc.

Marie Z. Ziegler
Retired Executive, Deere & Company

John H. Anderson
President and Chief Executive Officer

Nick W. Anderson
Vice President, Chief Financial Officer

Cynthia M. Carlson
Executive Vice President,
Wealth Management

Jill L. Dubin
Vice President, CRA and
Community Development Officer

Robert M. Eby
Executive Vice President,
Chief Credit Officer

Laura L. Ekizian
Executive Vice President,
Chief Relationship Officer

Kathleen M. Francque
Senior Vice President,
Information services and
Correspondent Banking

Therese K. Gerwe
Senior Vice President,
Treasury Management

Deborah C. Gillum
1st Vice President, Retail Banking

Anne E. Howard
Senior Vice President,
Director of Human Resources

David C. Howell
1st Vice President,
Wealth Management

Thomas B. Fisher-King
1st Vice President,
Retail and Real Estate Operations

Jeffrey M. Lockwood
Executive Vice President,
Chief Lending Officer

Peter J. McAndrews
1st Vice President, Retail,
Real Estate and Consumer Loans

John R. McEvoy
Executive Vice President,
Chief Operations Officer and Cashier

Cathie S. Whiteside
Executive Vice President,
Corporate Strategy,
Human Resources and Branding

Michael J. Wyffels
Senior Vice President,
Chief Information Officer

2017 ANNUAL REPORT

Larry Helling

President and Chief Executive Officer,
Cedar Rapids Bank & Trust

2017 PROVED TO BE A MILESTONE YEAR
FOR CEDAR RAPIDS BANK & TRUST.

For the first time in our history, Cedar Rapids Bank &

Trust surpassed $1.0 billion in assets during the third

quarter; coincidentally, nearly 16 years to the day from

when the bank first opened its doors in September

2001. As a result, it positioned CRBT as the second-

largest bank in deposit share in the Cedar Rapids market

and solidified our ranking as the largest community

bank headquartered in Linn County.

QCR HOLDINGS, INC.

As I reflect on this significant milestone, there are many factors that played a key role in achieving

this: our strong Board of Directors – past and present; our employees doing the “right things” every

day; the support and loyalty of our clients and shareholders; and our confidence to take strategic

moves along the way.

In addition, we continued to build scale in 2017 with a successful in-market merger of Guaranty

Bank & Trust into our charter during the fourth quarter. I am extremely proud of the effort and the

vision of our team. This was a huge undertaking that required months of meticulous and thoughtful

preparation. Execution of everything from data mapping, system conversion, to staff integration

and acquiring additional buildings was key to a successful merger. Guaranty Bank had a proven, 83-

year legacy of understanding and serving the customer and community needs. It was a natural fit

and our hope is to honor and enhance these traditions as a stronger combined financial institution

that will make a lasting impact in our community.

As of December 31, 2017, Cedar Rapids Bank & Trust reported combined assets of $1.3 billion.

This increased size helps CRBT compete in an industry where scale matters. It enables us to offer

additional products and services, expand our branch network, develop more technologies to meet

the growing needs of our clients and gain resources to navigate through the complex regulatory

environment.

As we move forward and strive to create a culture of high performance, what will continue to set

Cedar Rapids Bank & Trust apart is the diverse set of people that bring their unique talents and skills

to work every day. By sharing these distinctive approaches and varied backgrounds, it makes us all

better together. That is particularly important as we embrace our new employees from Guaranty

Bank. Their new and different backgrounds will help us expand our paradigms. As we continue on

our quest to Be Exceptional, it will take all of us challenging the status quo and searching for new

ways of thinking about the evolving marketplace and the constituencies we serve.

2017 ANNUAL REPORT

People you can bank on.®

John Sadler
President, Sadler Power Train

"Thank you, Cedar Rapids Bank & Trust, for all that you do to encourage the success

of Sadler Power Train and our business partners.

Cedar Rapids Bank & Trust goes above and beyond to take care of our needs…from Shelly

Strellner delivering Visa gifts cards to us that we requested for our customers, within

hours of our request; to Tyler Clark’s immediate attention when we call him; to Nicole

Langerman’s quick response to an emailed request for a copy of a check; to Larry Helling

making us feel like family when he calls each December, thanking us for our business and

checking to see if there is anything else Cedar Rapids Bank & Trust can do for us (a call we

greatly appreciate and look forward to).

The team at CRBT is truly an extension of Team Sadler. They help us get tasks done so we

can spend time meeting our customers’ needs."

QCR HOLDINGS, INC.

I N V E S T I N G I N C E D A R R A P I D S , I O WA

WITH 3,913 EMPLOYEE HOURS
VOLUNTEERED IN 2017

DIRECTORS

Larry J. Helling
President and Chief Executive Officer,
Cedar Rapids Bank & Trust

Fred G. Timko
Chair of the Board,
Cedar Rapids Bank & Trust
President, Down to Earth Development, LLC

Donna J. Sorensen, J.D.
President, Sorensen Consulting

Patrick S. Baird
Retired President and Chief Executive Officer,
AEGON USA, LLC

Robert T. Buckley
Chairman and Chief Executive Officer,
Kirk Gross Company

Patrice M. Carroll
Vice Chair of the Board,
Cedar Rapids Bank & Trust
President and Chief Executive Officer,
ImOn Communications

Brent R. Cobb
President, World Class Industries, Inc.

Nancy H. Evans, J.D.
Community Volunteer

SENIOR MANAGERS

Todd A. Gipple
Executive Vice President, Chief Operating
Officer and Chief Financial Officer,
QCR Holdings, Inc.

Larry J. Helling
President and Chief Executive Officer

John A. Rodriguez
Executive Vice President, Operations and Cashier

Hillary L. Hughes, CFA
Director, Prairie Capital Advisors, Inc.

James A. Mudd, II
President and Chief Executive Officer,
Mudd Advertising

Amy L. Reasner J.D.
Shareholder, Lynch Dallas, P.C.

Jason D. Smith
President, TrueNorth Companies

J. Mitchell McElree
Executive Vice President, Managing Director,
Specialty Finance Group

Patricia L. Ellison
Executive Vice President, Chief Credit Officer

Gary M. Becker
Senior Vice President, Commercial Banking

Wayne R. Breckon
Senior Vice President, C&I Manager

Kevin D. Bruns
Senior Vice President, Wealth Management

James D. Klein
Executive Vice President, Chief Lending Officer

Deborah J. Gertsen
Senior Vice President, Trust and Investments

Shelly A. Strellner
Senior Vice President, Private Banking

Timothy J. White
Senior Vice President, Business Development,
Specialty Finance Group

2017 ANNUAL REPORT

Stacey Bentley

President and Chief Executive Officer,
Community Bank & Trust

20 YEARS…AND GROWING

August 18, 2017 marked the 20th anniversary of our presence in the Cedar Valley. What

began as a vision in early 1997 has now flourished into a true Community Bank. Over

20 years ago, we contacted a successful community bank for insight on starting a de

novo community bank in the Waterloo/Cedar Falls area. We are proud to say that was

QCR Holdings, Inc. who we are united with today.

Our success has always been about genuinely connecting with our clients and

building relationships. From the very beginning, we have strived to grow through

superior service to our clients and that concept still charts our course today.

QCR HOLDINGS, INC.

Growing the New

Growing, and giving back

The stars aligned for us in 2017 as we have

Our commitment extends beyond our clients

successfully completed a fresh, modern

and employees. We are proud to be good

renovation to our downtown Waterloo office

corporate citizens in the communities we

complete with first-class technology that will

serve through lending, charitable giving, and

position us well for the future. This renovation

volunteerism that permeate through the

was the perfect celebration to commemorate

company.

Getting better, not just bigger

Our objective is not simply to get bigger.

Our growth is an outcome of doing all the

right things for our clients. We strive daily

to Be Exceptional as our top priority is to

constantly get better at how we serve all our

stakeholders. By staying true to our business

model of building strong relationships with

our clients, we learn and understand their

hopes, challenges and dreams. We are here

to make the financial lives of those who do

business with us better. When they succeed,

we become exceptional.

our 20 year anniversary. We couldn’t think of

a more fitting time for our brand to mirror

our progress and launched a sleek, new logo

representing the professionalism that equally

portrays all of our new enhancements.

Our culture of high expectations for client

service and responsiveness is enabled by

local decision-making. Our decisions affecting

client relationships are made by people who

live, work, and are actively involved in serving

our communities. We are fortunate to be

part of a “Relationship Driven Organization”

whose business model provides each QCR

Holdings, Inc. entity with the autonomy to

tailor value-added solutions to our clients and

communities that we serve. With our higher

lending capacity and various products and

services, we can save you time and money and

are able to help you grow.

2017 ANNUAL REPORT

People you can bank on.®

Jim Mudd Sr.
Mudd Advertising

"Community Bank & Trust has always been a great
help to us. For the past 20 years, you have always
been available for good advice.

From our first loan to our last, for five buildings as
well as credit lines, we couldn’t have done it without
your ideas and assistance. Your people and services
have been outstanding."

QCR HOLDINGS, INC.

I N V E S T I N G I N T H E C E D A R VA L L E Y

WITH 1,024 EMPLOYEE HOURS
VOLUNTEERED IN 2017

SENIOR MANAGERS

Stacey J. Bentley
President and Chief Executive Officer

Kyle M. Baker
Vice President, Retail Banking

Richard L. Jaacks
Senior Vice President,
Business Development Officer

THANK YOU.
Community Bank & Trust would like to offer a sincere “Thank you”.
Whether you have been with us from the beginning or at some point,
became our champions, you have contributed greatly with your
confidence, referrals and suggestions. Your continued support helped
propel us to where we are today, 20 years and Growing!

2017 ANNUAL REPORT
2017 ANNUAL REPORT

Thomas Budd

President and Chief Executive Officer,
Rockford Bank & Trust

“Rockford is in our name for a reason!”

Like many communities of our size, Rockford has historically been a city that favors

its local businesses. In late 2017, Rockford’s largest, locally owned, community bank

announced its pending sale to an out of town buyer. The announcement created a flurry

of competing claims by the remaining community banks as to who is now the most “local.”

For Rockford Bank & Trust, the fact that our community really values local banking is

reassuring. Providing financial services to clients that value relationships is synonymous

with what most people think of when they want “local” banking, and is consistent with

the structure of QCR Holdings, Inc. and Rockford Bank & Trust.

The value of being local in banking is really based on the way clients and the community

are served. At the center of RB&T’s values is the client experience. We are committed to

a structure whereby all aspects of the client relationship are delivered locally. It includes

making timely loan decisions, setting local interest rates and product offerings, and

problem resolution, all tailored to the specific needs of our clients.

QCR HOLDINGS, INC.

One clear indication of a bank’s “local” commitment is the extent and quality of its

community involvement. RB&T has historically been focused on supporting areas

of the community which have the greatest needs and where our involvement can

make the greatest impact. For example, the RB&T Financial Scholars program, which

provides financial literacy education to six high schools, celebrated its fifth year in

2017.

Also, during 2017, Rockford Bank &

Trust focused efforts on supporting

the community through involvement

in several public/private partnerships.

RB&T announced a partnership with

the Rockford Park District in the

form of a naming rights agreement

for the construction of the Rockford

Bank & Trust Pavilion, a banquet

facility located at Aldeen Golf Course,

Rockford’s premier golf facility. RB&T’s

partnership helped bring to fruition a

much needed enhancement to one of

Rockford’s greatest assets.

Rockford Bank & Trust also played a role in the continuing revitalization of downtown

Rockford through participation in two projects supporting the explosive growth

in tourism. The bank provided funding to a not-for-profit, supported by the City of

Rockford, as part of a Historic and New Market Tax credit financing of an indoor city

market facility in the center of downtown. RB&T also collaborated with QCR Holdings,

Inc.’s Specialty Finance Group and Cedar Rapids Bank & Trust to provide permanent

financing for the historic renovation and construction of the downtown Amerock

Hotel, arguably one of the highest profile projects in Rockford in decades.

RB&T’s commitment to supporting the needs and opportunities of the Rockford area

will continue to position RB&T as a leader in community banking.

2017 ANNUAL REPORT

People you can bank on.®

Frank Graceffa
Paper Recovery Services

"Since 2008 Rockford Bank & Trust has been committed to the success of

Paper Recovery Services growth.

Recently we were looking to purchase a new property for expansion. Karl Swanson at

Rockford Bank & Trust made the process effortless. Karl was there with us every step of

the way with a complete knowledge of our financial needs. Due to all of his insight and

help we were successfully able to find the perfect property for us. Knowing you have a

partnership with someone who understands your needs and is watching out for your
company’s best interest is priceless.

The relationship we have established with Kim, Blythe, Lori, Brian, Karl and everyone at

Rockford Bank & Trust over the years has been valuable to us and our success. Thank you

to everyone at Rockford Bank & Trust for always being professional yet personal during

every one of our interactions. You really do make working with you easy!"

QCR HOLDINGS, INC.

I N V E S T I N G I N R O C K F O R D, I L L I N O I S

WITH 1,283 EMPLOYEE HOURS
VOLUNTEERED IN 2017

DIRECTORS

SENIOR MANAGERS

Thomas D. Budd
President and Chief Executive Officer,
Rockford Bank & Trust

George T. Ralph III
Chair of the Board, Rockford Bank & Trust
Owner, GTR Realty Advisors, LLC

Michael A. Bauer
Consultant, Co-Founder of QCR Holdings, Inc.

Charles E. Box
Vice Chair of the Board, Rockford Bank & Trust
Former Chairman, Illinois Commerce Commission
Former Mayor, Rockford, Illinois

Rebecca L. Epperson
President, Chartwell Agency

Todd A. Gipple
Executive Vice President, Chief Operating Officer and
Chief Financial Officer, QCR Holdings, Inc.

Monica B. Glenny, CPA, CMA
Independent Consultant, Mary Kay Cosmetics

James P. Hamilton
President, Milestone RocVale Foundation

Douglas M. Hultquist
President and Chief Executive Officer,
Co-Founder, QCR Holdings, Inc.

Dana S. Kiley, Jr.
President, CoyleKiley Insurance Agency, Inc.

Robert J. Stenstrom
President, Stenstrom Petroleum Services Group

M. Shawn Way
President and Chief Executive Officer, Milestone, Inc.

Thomas D. Budd
President and Chief Executive Officer

Brian J. DeBenedetto
Senior Vice President and Trust Manager

Lori L. Diaz
Senior Vice President, Treasury Management

James M. Hansberry
Executive Vice President, Wealth Management

Anthony A. Moczynski
Senior Vice President, Chief Credit Officer

Brenda S. Nayonis
Executive Vice President, Operations and Cashier

Karl R. Swanson
Executive Vice President, Chief Lending Officer

2017 ANNUAL REPORT

Ron Nagel

Chief Executive Officer,
Community State Bank

As stated in last year's annual report, we became part

of the QCR Holdings, Inc. family on August 31, 2016. At

that time, “We looked for an organization that identified

with and shared similar values, i.e., our Redefining

Simple Principles.” So have the last 16 months lived up

to the expectations of our customers, our employees

and our shareholders? If you take a look at the financial

improvements over this time period, I think we clearly

answer that question.

QCR HOLDINGS, INC.

ASSETS

08/31/16 $581.7 million

12/31/16 $600.0 million

12/31/17 $670.5 million

An increase of

nearly $90.0 million

in the past 16 months

DEPOSITS

08/31/16 $486.3 million

12/31/16 $513.6 million

12/31/17 $570.6 million

An increase of

over $80.0 million

in the past 16 months

LOANS (as of )

08/31/16 $419.0 million

12/31/16 $429.5 million

12/31/17 $489.1 million

An increase of

over $70.0 million
in the past 16 months

Being part of the QCR Holdings, Inc. family has helped us

reach the next level of financial performance. It is our belief

this is just the beginning. In addition to the financial metrics

we have established and worked toward, we continue to

support and drive our culture of Redefining Simple -

- Make it Easy for Customers to do Business with Us

- Make Exceptional Service the Rule – not the Exception

- Be Accountable

- Be Innovative and Embrace Change

- Be a Team Player

- Be Professional

These culture principles continue to be a priority at CSB

and blend in well with the QCR Holdings, Inc. culture of Be

Exceptional.

As we begin 2018, we want to say a special thank you to all

of our customers and employees. We are only successful

because of these key people and companies. Without these

great groups working every day to improve themselves,

their businesses and their communities, CSB just wouldn’t

have been voted the best bank in Ankeny like it has been

for the past several years.

2017 ANNUAL REPORT

People you can bank on.®

Gary Ruebel
President/Owner, Chemorse Ltd.

"We were in search of a new banking partner and CSB was convenient.

They have locations close to our business. The staff provided personal

service, so we made the move to CSB. That was 15 years ago. Since it is a

full service bank, we have benefited from working with their mortgage,

financial and banking areas. CSB makes you feel like a true partner and not

just another customer.

The biggest difference between CSB and other financial institutions is

flexibility. They tell you what they can do, not what they can’t do. That is

very important to us. We often refer friends and business associates to

CSB based on the good experience we have had with the Bank over these

many years."

QCR HOLDINGS, INC.

I N V E S T I N G I N T H E G R E AT E R D E S M O I N E S A R E A

WITH 824 EMPLOYEE HOURS
VOLUNTEERED IN 2017

DIRECTORS

SENIOR MANAGERS

Ronald M. Nagel
Chief Executive Officer

Kurt A. Gibson
President

Jennifer L. Canelos
Senior Vice President, Marketing

Jodi Corcoran
Senior Vice President, Treasury Management

Cade L. Lindaman
Vice President, Mortgage Lending

Kathy A. Nichols
Senior Vice President, Retail Banking/Cashier

Ken R. Wilson
Vice President, Financial Advisor

Larry J. Helling
Chair of the Board, Community State Bank
President and Chief Executive Officer
Cedar Rapids Bank & Trust

Todd A. Gipple
Director, Community State Bank
Executive Vice President, Chief Operating Officer and
Chief Financial Officer, QCR Holdings, Inc.

Douglas M. Hultquist
Vice Chair of the Board, Community State Bank
President and Chief Executive Officer, Co-Founder,
QCR Holdings, Inc.

Ronald M. Nagel
Chief Executive Officer,
Community State Bank

Kurt A. Gibson
President, Community State Bank

Dana L. Nichols
Director, Community State Bank
Executive Vice President, Chief Credit Officer
QCR Holdings, Inc.

Marie Z. Ziegler
Retired Executive, Deere & Company

John C. Flaugh
Partner, Summit Equity Group

John L. Rapp
President and Chief Executive Officer
Auto-Jet Muffler Corporation

2017 ANNUAL REPORT

John Engelbrecht

Chief Executive Officer,
m2 Lease Funds, LLC

m2 recently celebrated its 20 year anniversary,

and 12 years with QCR Holdings, Inc. Today m2

has thousands of leases and is in every state. As

an equipment leasing generalist, m2 leases and

finances all varieties of equipment. Currently

the largest equipment concentrations include

manufacturing, technology, marine, food

processing, packaging, transportation, bakery

and construction.

QCR HOLDINGS, INC.

We continue to believe that the m2 business model of providing quick

and responsive turnarounds in a simple and straight forward manner

remains sound and for us to grow we only need to add more “talent”

to our team. Unlike our affiliated bank’s goals of increasing market

share in their local communities, m2 does business nationwide; m2

doesn’t have a local community to call home, so we expanded by

adding new employees nationally. We recently increased our footprint

by expanding to Georgia, and adding two sales people in California.

These producers join employees we already had in Pennsylvania,

Florida, Iowa, Wisconsin, Minnesota and South Carolina.

We are optimistic on the economic outlook for 2018; industry and

business confidence levels are at the highest levels seen in years.

Additionally, with the implementation of the new tax bill, allowing

companies to depreciate 100% of the cost of new and used

equipment in the year of acquisition, we anticipate increased levels of

equipment purchases, many of which will be acquired using leasing

or financing. We believe that we will benefit from increasing capital

equipment acquisitions.

We are confident that we have the team in place to continue our

steady growth and to continue adding substantial returns for the

Holding Company for 2018 and beyond.

2017 ANNUAL REPORT

People you can bank on.®

YANK Marine (820C Marine Travelift)
Dorchester, New Jersey

"Our Small Shipyard Revitalization Project began more than 12 years ago when we purchased our Dorchester, New

Jersey location and we needed the funds to build not only the infrastructure, but to purchase and install a 600

metric ton Marine Travelift.

Beginning in 2008, during the worst financial crisis since the Great Depression, we began to discuss our project

with numerous commercial banks in our area. Some were interested, but none of them had the vision to see that

there was a real need for this large lift for the entire marine industry on the East Coast.

The few banks that were interested in financing our project offered us terms that were less than favorable. So after

years of searching unsuccessfully for financing, Marine Travelift suggested that we talk to m2 Lease Funds.

With the professional guidance and the personalized support from m2, we were able to acquire an 820 metric ton

mobile boat hoist, the second largest Marine Travelift in the country, which will allow us to dramatically grow our

business and add jobs. This lift arrived, was assembled, and put into operation in November of 2017.

m2 Lease Funds had the vision that no other lending institution in our area possessed. The completion of our

Small Shipyard Revitalization Project has been a real game changer for both the military and the commercial

vessels working and protecting the entire East Coast of the United States!"

QCR HOLDINGS, INC.

I N V E S T I N G I N O U R C O M M U N I T I E S

WITH 372 EMPLOYEE HOURS
VOLUNTEERED IN 2017

DIRECTORS AND SENIOR MANAGER

John R. Engelbrecht
Chair of the Board, Founder and Chief Executive Officer,
m2 Lease Funds, LLC

John H. Anderson
Director, m2 Lease Funds, LLC
President and Chief Executive Officer,
Quad City Bank & Trust

Patrick S. Baird
Director, m2 Lease Funds, LLC
Retired President and Chief Executive Officer,
AEGON USA, LLC

Brian L. Besler
Senior Vice President, Administration
m2 Lease Funds, LLC

Richard W. Couch
President and Chief Operating Officer,
m2 Lease Funds, LLC

Michael A. Hatfield
Vice Chair of the Board, m2 Lease Funds, LLC
Retired Senior Vice President and Secretary,
M & I - Marshall & Illsley Corporation

Larry J. Helling
Director, m2 Lease Funds, LLC
President and Chief Executive Officer,
Cedar Rapids Bank & Trust

Mark R. Hogan
Director, m2 Lease Funds, LLC
Secretary and Chief Executive Officer,
Wisconsin Economic Development Corporation

Douglas M. Hultquist
Director, m2 Lease Funds, LLC
President and Chief Executive Officer
Co-Founder, QCR Holdings, Inc.

Christine D. Kennedy
Chief Financial Officer,
m2 Lease Funds, LLC

Dana L. Nichols
Director, m2 Lease Funds, LLC
Executive Vice President, Chief Credit Officer
QCR Holdings, Inc.

2017 ANNUAL REPORT

Year-End 2007-2017

Stock Price

Tangible Book Value Per Common Share

$50

$40

$30

$20

$10

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total Deposits 2007 / 2017

DECEMBER 31, 2007
Total $929.4 million

DECEMBER 31, 2017
Total $3,267 million

Non Interest Bearing Demand
$165.3 million or 18%

Interest Bearing Demand
$347.3 million or 37%

CDs
$363.2 million or 39%

Brokered Deposits
$53.6 million or 6%

Non Interest Bearing Demand
$789.5 million or 24%

Interest Bearing Demand
$1,855.9 million or 57%

CDs
$516.1 million or 16%

Brokered Deposits
$105.2 million or 3%

QCR HOLDINGS, INC. Facility Map and Locations

1. QUAD CITY BANK & TRUST

4. ROCKFORD BANK & TRUST

2118 Middle Road, Bettendorf, IA 52722

4571 Guilford Road, Rockford, IL 61107

4500 N Brady Street, Davenport, IA 52806

308 W State Street, Rockford, IL 61101

3551 Seventh Street, Moline, IL 61265

5405 Utica Ridge Road, Davenport, IA 52807

1700 Division Street, Davenport, IA 52804

2. CEDAR RAPIDS BANK & TRUST

500 First Avenue NE, Cedar Rapids, IA 52401

5. m2 LEASE FUNDS

175 N Patrick Boulevard, Suite 140, Brookfield, WI

6. COMMUNITY STATE BANK

5400 Council Street NE, Cedar Rapids, IA 52402

817 N Ankeny Boulevard, Ankeny, IA 50023

2711 Bever Ave SE, Cedar Rapids, IA 52403

191 Jacolyn Dr NW, Cedar Rapids, IA 52405

700 25th St, Marion, IA 52302

3. COMMUNITY BANK & TRUST

200 8th Street SE, Altoona, IA 50009

1401 E Euclid Avenue, Des Moines, IA 50316

6175 Merle Hay Road, Johnston, IA 50131

4811 SE 14th Street, Des Moines, IA 50320

902 SE Oralabor Road, Ankeny, IA 50021

422 Commercial Street, Waterloo, IA 50701

3540 E 33rd Street, Des Moines, IA 50317

312 W First Street, Cedar Falls, IA 50613

11 Tower Park Drive, Waterloo, IA 50701

1025 N Hickory Boulevard, Pleasant Hill, IA 50327

460 SE University Avenue, Waukee, IA 50263

1640 SW White Birch Circle, Ankeny, IA 50023

2017 ANNUAL REPORTQCR Holdings, Inc. Consolidated Financial Highlights

As of

December 31,
2017

December 31,
2016

(dollars in thousands)

CONDENSED BALANCE SHEET
Cash and due from banks
Federal funds sold and interest-bearing deposits
Securities
Net loans/leases
Core deposit intangible
Goodwill
Other assets

Total assets

Total deposits
Total borrowings
Other liabilities
Total stockholders' equity

Total liabilities and stockholders' equity

ANALYSIS OF LOAN DATA
Loan/lease mix:

Commercial and industrial loans
Commercial real estate loans
Direct financing leases
Residential real estate loans
Installment and other consumer loans
Deferred loan/lease origination costs, net of fees

Total loans/leases
Less allowance for estimated losses on loans/leases
Net loans/leases

ANALYSIS OF SECURITIES DATA
Securities mix:

U.S. government sponsored agency securities
Municipal securities
Residential mortgage-backed and related securities
Other securities

Total securities

ANALYSIS OF DEPOSIT DATA
Deposit mix:

Noninterest-bearing demand deposits
Interest-bearing demand deposits
Time deposits
Brokered deposits

Total deposits

ANALYSIS OF BORROWINGS DATA
Borrowings mix:

Term FHLB advances
Overnight FHLB advances
Wholesale structured repurchase agreements
Customer repurchase agreements
Federal funds purchased
Junior subordinated debentures
Other

Total borrowings

Amount
$

75,722
85,962
652,382
2,930,130
9,079
28,334
201,056
3,982,665

3,266,655
309,479
53,244
353,287
3,982,665

1,134,516
1,303,492
141,448
258,646
118,611
7,773
2,964,486
34,356
2,930,130

38,097
445,049
163,301
5,935
652,382

789,548
1,855,893
516,058
105,156
3,266,655

56,600
135,400
35,000
7,003
6,990
37,486
31,000
309,479

70,570
86,206
574,022
2,374,730
7,381
13,111
175,924
3,301,944

2,669,261
290,952
55,690
286,041
3,301,944

827,637
1,093,459
165,419
229,233
81,666
8,073
2,405,487
30,757
2,374,730

46,084
374,463
147,702
5,773
574,022

797,415
1,369,226
439,169
63,451
2,669,261

63,000
74,500
45,000
8,132
31,840
33,480
35,000
290,952

QCR HOLDINGS, INC.

QCR Holdings, Inc. Consolidated Financial Highlights

For the Year Ended

December 31,
2017

December 31,
2016

(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income
Interest expense
Net interest income
Provision for loan/lease losses
Net interest income after provision for loan/lease losses

Trust department fees
Investment advisory and management fees
Deposit service fees
Gain on sales of residential real estate loans
Gain on sales of government guaranteed portions of loans
Swap fee income
Securities gains, net
Earnings on bank-owned life insurance
Debit card fees
Correspondent banking fees
Other
Total noninterest income

Salaries and employee benefits
Occupancy and equipment expense
Professional and data processing fees
Acquisition costs
Post-acquisition compensation, transition and integration costs
FDIC insurance, other insurance and regulatory fees
Loan/lease expense
Net cost of operation of other real estate
Advertising and marketing
Bank service charges
Losses on debt extinguishment, net
Correspondent banking expense
CDI amortization
Other
Total noninterest expense

Net income before taxes
Income tax expense
Net income

Basic EPS
Diluted EPS

135,517
19,452
116,065
8,470
107,595

7,188
3,870
5,919
409
1,164
3,095
(88)
1,802
2,942
916
3,265
30,482

55,722
10,938
10,757
1,069
4,310
2,752
1,164
2
2,625
1,771
-
807
1,001
4,506
97,424

40,653
4,946
35,707

106,468
11,951
94,517
7,478
87,039

6,164
2,993
4,440
431
3,159
1,708
4,592
1,771
1,815
1,050
2,914
31,037

46,317
8,405
7,113
1,400
1,041
2,549
662
591
2,128
1,693
4,578
751
443
3,815
81,486

36,590
8,903
27,687

$
$

2.68
2.61

$
$

2.20
2.17

Weighted average common shares outstanding
Weighted average common and common equivalent shares outstanding

13,325,128
13,680,472

12,570,767
12,766,003

2017 ANNUAL REPORT

QCR Holdings, Inc. Consolidated Financial Highlights

COMMON SHARE DATA
Common shares outstanding
Book value per common share (1)
Tangible book value per common share (2)
Closing stock price
Market capitalization
Market price / book value
Market price / tangible book value
Earnings per common share (basic) LTM (3)
Price earnings ratio LTM (3)
TCE / TA (4)

CONDENSED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
Beginning balance
Net income
Other comprehensive income (loss), net of tax
Common stock cash dividends declared
Proceeds from issuance of 1,215,000 shares of
common stock, net of costs
Proceeds from issuance of 678,670 shares of
common stock, net of costs
Other (5)
Ending balance

REGULATORY CAPITAL RATIOS:

Total risk-based capital ratio
Tier 1 risk-based capital ratio
Tier 1 leverage capital ratio
Common equity tier 1 ratio

KEY PERFORMANCE RATIOS AND
OTHER METRICS
Return on average assets (annualized)
Return on average total equity (annualized)
Net interest margin
Net interest margin (TEY) (Non-GAAP)(6) (8)
Efficiency ratio (Non-GAAP) (8) (9)
Gross loans and leases / total assets
Full-time equivalent employees (7)

AVERAGE BALANCES
Assets
Loans/leases
Deposits
Total stockholders' equity

For the Year Ended

December 31,
2017

December 31,
2016

(dollars in thousands, except per share data)

13,918,168
$25.38
$22.70
$42.85
$596,393
168.81%
188.81%
$2.69
15.93 x
8.01%

286,041
35,707
1,093
(2,665)

30,741
2,370
353,287

11.15%
10.14%
8.98%
9.10%

1.01%
11.51%
3.50%
3.78%
66.48%
74.43%
641

13,106,845
$21.82
$20.11
$43.30
$567,526
198.41%
215.36%
$2.20
19.68 x
8.04%

225,886
27,687
(336)
(2,036)

29,829

-
5,011
286,041

11.56%
10.46%
9.10%
9.41%

0.97%
10.56%
3.53%
3.75%
64.90%
72.85%
572

3,519,848
2,611,888
2,916,576
310,210

2,846,699
2,042,555
2,243,624
262,075

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)

Includes accumulated other comprehensive income (loss).
Includes accumulated other comprehensive income (loss) and excludes intangible assets.
LTM : Last twelve months.
TCE / TCA : tangible common equity / total tangible assets.
Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
TEY : Tax equivalent yield. See GAAP to non-GAAP reconciliations in the Company 10-K.
Full-time equivalent employees increased in 2017 due to the acquisition of Guaranty, as well as the filing of open positions throughout the Company.
See GAAP to Non-GAAP reconciliations in the Company's 10-K.
The efficiency ratio was unusually high in 2017 due to one-time acquisition costs and post-acquisition compensation, transition and integration costs totaling $5.4 million.

QCR HOLDINGS, INC.

QCR Holdings, Inc. Consolidated Financial Highlights

ANALYSIS OF NET INTEREST INCOME AND MARGIN

December 31, 2017

December 31, 2016

For the Year Ended

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
Interest-bearing deposits at financial institutions
Securities (1)
Restricted investment securities
Loans (1)

Total earning assets (1)

Interest-bearing deposits
Time deposits
Short-term borrowings
Federal Home Loan Bank advances
Junior subordinated debentures
Other borrowings

Total interest-bearing liabilities

Net interest income / spread (1)
Net interest margin
Net interest margin (TEY) (Non-GAAP) (1) (2)

17,577
78,842
590,761
15,768
2,611,888
3,314,836

149
874
22,460
631
120,618
144,732

1,622,724
528,834
22,596
120,206

7,992
5,020
114
1,981

34,030
73,394
$
2,401,784

1,466
2,879
19,452

125,280

15,142
70,757
535,912
13,993
2,042,555
2,678,359

1,092,687
436,070
50,899
114,797
33,735
98,105
1,826,293

45
393
19,054
522
92,475
112,489

3,843
2,175
94
1,284
1,237
3,318
11,951

100,538

0.85%
1.11%
3.80%
4.00%
4.62%
4.37%

0.49%
0.95%
0.50%
1.65%
4.31%
3.92%
0.81%

3.56%
3.50%
3.78%

0.30%
0.56%
3.56%
3.73%
4.53%
4.20%

0.35%
0.50%
0.18%
1.12%
3.67%
3.38%
0.65%

3.55%
3.53%
3.75%

(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 35% tax rate

for each period presented.

(2) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations in the Company's 10-K.

December 31,
2017

December 31,
2016

(dollars in thousands)

ROLLFORWARD OF ALLOWANCE FOR
LOAN/LEASE LOSSES
Beginning balance
Provision charged to expense
Loans/leases charged off
Recoveries on loans/leases previously charged off
Ending balance

NONPERFORMING ASSETS (2)
Nonaccrual loans/leases
Accruing loans/leases past due 90 days or more
Troubled debt restructures - accruing
Total nonperforming loans/leases

Other real estate owned
Other repossessed assets

Total nonperforming assets

ASSET QUALITY RATIOS
Nonperforming assets / total assets
Allowance / total loans/leases (1)
Allowance / nonperforming loans/leases (1)

30,757
8,470
(5,373)
502
34,356

11,441
89
7,113
18,643
13,558
80
32,281

26,141
7,478
(3,244)
382
30,757

13,919
967
6,347
21,233
5,523
202
26,958

0.81%
1.16%
184.28%

0.82%
1.28%
144.85%

(1) Upon acquisition and per GAAP, acquired loans are recorded at market value which eliminated the allowance and impacts these ratios.

2017 ANNUAL REPORT

STOCK LISTING INFORMATION

The common stock of QCR Holdings, Inc. is traded on
the NASDAQ Global Market under the symbol QCRH

Annual Meeting of Stockholders

Investor Information

The Annual Meeting of the Stockholders of
QCR Holdings, Inc. will be held:

Stockholders, investors, and analysts interested
in additional information may contact:

Wednesday, May 23, 2018 at 8:00 am CDT
Quad City Bank & Trust Lobby
3551 Seventh Street
Moline, IL 61265

Annual Report on Form 10-K

Copies of the QCR Holdings, Inc. annual
report on Form 10-K and exhibits filed with
the Securities and Exchange Commission
(SEC), are available to stockholders without
charge by accessing our internet site at
www.qcrh.com or by writing or calling:

Elizabeth A. Grabin
1st Vice President,
Director of Financial Reporting

QCR Holdings, Inc.
3551 Seventh Street
Moline, IL 61265
309.743.7724

The SEC maintains an internet site that
contains reports, proxy, and information
statements and other information about
issuers that file electronically with the SEC.
The address of that site is: www.sec.gov.

Stock Transfer Agent

Inquiries regarding stock transfer, registration,
lost certificates, or changes in name and
address should be directed to the stock
transfer agent and registrar by writing:

American Stock Transfer & Trust Company, LLC
Operations Center
6201 15th Avenue
Brooklyn, NY 11219

Todd A. Gipple
Executive Vice President, Chief Operating
Officer and Chief Financial Officer

QCR Holdings, Inc.
3551 Seventh Street Moline, IL 61265
309.743.7745

Christopher J. Lindell
Executive Vice President, Investor Relations
and Corporate Secretary

QCR Holdings, Inc.
500 First Avenue NE, Cedar Rapids, IA 52401
319.743.7006

Independent Registered
Public Accounting Firm
RSM US LLP, Davenport, IA

Corporate Counsel

Lane & Waterman LLP, Davenport, IA
Barack Ferrazzano Kirschbaum & Nagelberg LLP,
Chicago, IL

Internet Information

Information on our subsidiaries’ history,
locations, products and services can be
accessed on the internet at:

www.qcbt.com
www.crbt.com
www.communitybt.com
www.rkfdbank.com
www.bankcsb.com
www.m2lease.com

COMMON STOCK

Calendar 2017

High

Low

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

Calendar 2016

4th Quarter

3rd Quarter

2nd Quarter

1st Quarter

$ 49.70

$ 41.50

50.00

49.80

45.00

High

39.85

40.45

40.65

Low

$ 44.80

$ 30.31

32.19

28.74

24.15

26.41

22.96

18.05

DIVIDEND INFORMATION

Record
Date

Payment
Date

Amount
Per Share

12.15.17

01.04.18

09.15.17

10.04.17

06.16.17

07.06.17

03.17.17

04.05.17

12.23.16

01.06.17

09.16.16

10.05.16

06.17.16

07.06.16

03.18.16

04.06.16

$ .05

$ .04

QCR HOLDINGS, INC.