QCR
Annual Report 2020

Plain-text annual report

Annual Report2020 Annual Report 3 FOCUSED ON SERVING OUR CLIENTS A Message from the Chair and Vice Chair of the Board As we turn the page to 2021, we’re optimistic and confident about the opportunities ahead. Pat Baird, Chair of the Board Marie Zelnio-Ziegler, Vice Chair of the Board On behalf of the entire Board of Directors, we are pleased and proud to bring you this year’s Annual Report. As we reflect on 2020, it’s difficult to describe the challenges we faced as in- dividuals, families, businesses and even as a country. As we turn the page to 2021, we’re optimistic and confident about the opportunities ahead while aware that many challenges continue. A year ago, we were confident that QCR Holdings’ companies were well-positioned to support our cli- ents, communities, employees and shareholders through the uncer- tainty. While there was no way to predict all that happened, we now know we were indeed prepared to successfully serve all of our stake- holders. With record earnings and improving operating metrics, our organization adapted and thrived while serving our clients’ best inter- ests and the markets we serve. We are all hopeful that we will see ongoing recovery in all areas over the course of the year, and no doubt new issues will arise, as well. Our organization will continue to adapt and be part of the solution for all stakeholders. We have a great man- agement team in place and a strong financial position to take us there. Thank you for being our shareholders, and please stay safe. 4 RELATIONSHIPS MATTER A message from the CEO and President The year 2020 presented challenges no one could have predicted. While there were often more questions than answers, the impacts to our families, clients, busi- nesses and communities were deeply personal. Through it all, there seemed to be one universal truth: Relationships Matter. From learning how to adapt our business during a pandemic, to helping new and existing clients secure business-saving Paycheck Protection Program (PPP) loans, our team came together to support each other and our clients in a way that was truly inspiring. Because of our long-standing emphasis on building relationships, we exceeded our goals, gained hundreds of new clients, and reported another record year. Our record net income results, driven by continued strong growth in loans, deposits and fee income, were accom- plished while also significantly building our re- serves for future loan losses. There are likely still challenges ahead. However, we start the year with exceptional credit qual- ity and a strong capital position. We remain focused on simple growth strategies across all of our bank charters and our leasing company, providing best in class service through opera- tional excellence and helping our clients make their financial dreams come true. “…There seemed to be one universal truth: Relationships Matter.” We’re genuinely excited by what’s ahead in 2021 and beyond and we will continue to work hard each day to drive long-term shareholder value. Larry J. Helling Chief Executive Officer QCR Holdings, Inc. Todd A. Gipple President, COO, CFO QCR Holdings, Inc. QCR Holdings, Inc.OUR FUTURE: A SIMPLE AND FOCUSED STRATEGY OUR PERFORMANCE IN 2020 GAVE US INCREDIBLE MOMENTUM ENTERING THE NEW YEAR. WE’VE SET A SIMPLE AND FOCUSED STRATEGY FOR OUR FUTURE. 9-6-5 IS OUR PLAN TO CONTINUE TO GROW EARNINGS AND DRIVE ATTRACTIVE LONG- TERM RETURNS FOR OUR SHAREHOLDERS. Grow loans by 9% per year, funded with core deposits We intend to continue to gain market share across our charters by capitalizing on the value that our clients place on relation- ship-based community banking. Our goal is to organically grow loans and leases by 9% per year and to fund this growth with a corresponding increase in our core deposits. Grow fee income no less than 6% per year We will continue our efforts to diversify our revenue mix and develop more opportunities to increase profitability with con- tinued gains in noninterest income. Our goal is to grow our fee- based income by at least 6% per year. Improve efficiencies and hold expense growth to 5% per year We will increase our focus on improving operational efficiencies and managing our noninterest expenses. Our goal is to limit our annual operating expense growth to no more than 5% per year. 6 OUR PERFORMANCE Another Record-Breaking Year 2020 was a year like no other given the challenges presented by the COVID-19 pandemic. The entire QCR Holdings team adjusted to the new environment, helped our clients manage the impact of the crisis and con- tinued to identify and capitalize on growth opportunities, enabling us to deliver an- other year of record earnings. Our strong financial results were driven by robust revenue growth, including record fee income, and solid organic loan growth that helped boost our net interest income. 2020 PERFORMANCE HIGHLIGHTS • Adjusted net income increased 8% • Tangible book value per share grew by 14% • After adjusting for non-core items, revenue grew by 25%, driven by record swap fee income and higher net interest income • • • • Loans grew by nearly 8%, driven by healthy demand from new and existing clients Core deposits grew by 22% for the year and 25% of total deposits are now noninterest- bearing Continued to gain market share across our charters, reflecting the value that our clients place on relationship-based community banking Protected our net interest margin over the course of the year as we significantly reduced our high-cost wholesale funding and capitalized on favorable deposit repricing opportunities • Our credit quality remains excellent with net charge-offs near zero and nonperforming assets now represent only 0.26% of total assets QCR Holdings, Inc.RESPONDING TO OUR CLIENTS’ NEEDS Paycheck Protection Program and QCRH Loan Relief Program 7 At the early onset of the pandemic, we recognized the importance of quickly responding to the needs of our clients and communities. We proactively launched our Loan Relief Program, allowing clients to de- fer payments and preserve cash and liquidity. More than 1,900 clients received deferrals, totaling over $575 million of loans and leases. Nearly all of our borrowers who received payment relief resumed payments well before the year ended. At year-end, we had only $28 million of loans remaining on deferral, or 0.66% of the total portfolio. We believe this speaks to the high quality of our loan port- folio and the resiliency of our local markets, which continue to exhibit improving economic activity. With the introduction of the SBA Paycheck Protection Program (PPP), our lending teams originated 1,700 PPP loans totaling $358 million, which included the acquisition of more than 300 new, highly desired clients. This program effectively provided much-needed capital and liquidity to commercial and non- profit clients. Due to our philosophy of putting clients first coupled with our agile business model, QCRH was able to respond to clients’ needs more quickly than larger institutions in our markets. SUMMARY OF 2020 FINANCIAL RESULTS (in thousands) 2016 2017 2018 2019 2020 Net interest income $94,517 $116,065 $142,395 $155,559 $166,950 Non-interest income 31,037 30,482 41,541 78,768 113,798 Non-interest expense (81,486) (97,424) (119,143) (155,234) (151,755) Pre-tax pre-provision net income 44,068 49,123 64,793 79,093 128,993 Provision for loan/lease losses (7,478) (8,470) (12,658) (7,066) (55,704) Net income before taxes 36,590 40,653 52,135 72,027 73,289 Income taxes Net income (8,903) (4,946) (9,015) (14,619) (12,707) $27,687 $35,707 $43,120 $57,408 $60,582 2020 Annual Report8 FINANCIAL HIGHLIGHTS 7% Wealth Management Net Income Growth 0.26% NPAs/ASSETS 14.2% Tangible Book Value Per Share Growth 8.2% Adjusted Earnings Per Share Growth 8.1% Adjusted Net Income Growth 2020 Annual Key Metrics 10.7% Return on Average Total Equity 7.8% Organic Loan Growth 1.13% Adjusted Return on Average Assets QCR Holdings, Inc.GROSS LOANS/LEASES (MILLIONS) TOTAL DEPOSITS (MILLIONS) 12.31.20 12.31.19 12.31.18 12.31.17 $0 $4,251 $3,690 $3,733 $2,964 12.31.20 12.31.19 12.31.18 12.31.17 $4,599 $3,911 $3,545 $3,267 $2,500 $5,000 $0 $2,500 $5,000 LOAN MIX BALANCES (AS OF 12/31/20) Commercial and Industrial 41% Commercial Real Estate 50% Installment and Consumer 2% Residential Real Estate 6% Direct Financing Leases 1% 12.31.20 12.31.19 12.31.18 12.31.17 $0 TOTAL ASSETS (MILLIONS) BOOK VALUE VS. FAIR MARKET VALUE YEAR-END / COMMON STOCK (MILLIONS) BOOK VALUE FAIR MARKET VALUE $800 $600 $400 $200 $0 DEPOSIT MIX BALANCES (AS OF 12/31/20) Time Deposits 10% Noninterest- bearing 25% Brokered Deposits 0% Interest-bearing 65% $5,683 $4,909 $4,441 $3,521 $3,000 $6,000 ASSET GROWTH (MILLIONS) (1) INCLUDES ACQUISITION OF GUARANTY BANK & TRUST (2) INCLUDES MERGER WITH SPRINGFIELD BANCSHARES / ACQUISITION OF BATES COMPANIES $1000 $920 $610 $774 $468 $800 $600 $400 $200 $0 2017 2018 2019 2020 2017(1) 2018(2) 2019 2020 10 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) A long-term commitment QCR Holdings is a company built on relationships and integrity. We adhere to those principles in all areas of our business and in our communities and believe that mean- ingful environmental, social and governance programs will not only drive shareholder value but make us a better company. With numerous programs and activities aligned with the ESG framework, we continue to develop and enhance our long-term plan for the future. We are advancing standard reporting processes and gathering benchmarking data to generate meaningful ESG goals for our company based on relevant metrics for our industry. ENVIRONMENTAL Responsible use of our resources with a focus on sustainability SOCIAL Commitment to support the communities in which we live and work GOVERNANCE Integrity in our business practices QCR Holdings, Inc.2020 ESG HIGHLIGHTS 11 Energy efficient facility enhancements to reduce energy consumption 12,563 employee volunteer hours in 2020 42% QCR Holdings board is comprised of 42% females and minorities $17.5 million in financing for solar projects and $5.49 million in Property Assessed Clean Energy (PACE) financing outstanding as of 12/31/20 Paid parental leave and enhanced mental health benefits added to employee benefits package Company-wide diversity training and unconscious bias workshops conducted in 2020 $33,536,203 CRA financing and investments in 2020; 639 hours of financial literacy classes The Board provides oversight of the company’s ESG initiatives and strategy $1,654,776 in corporate sponsorships and donations 2020 Annual Report12 OUR LEADERSHIP BOARD OF DIRECTORS Larry J. Helling Chief Executive Officer, QCR Holdings, Inc. Patrick S. Baird Chair of the Board, QCR Holdings, Inc., President and Chief Executive Officer, (retired) AEGON USA Marie Zelnio-Ziegler Vice Chair of the Board, QCR Holdings, Inc., Vice President and Deputy Financial Officer (retired), Deere & Company Mary Kay Bates President and Chief Executive Officer, Bank Midwest John-Paul E. Besong Executive (retired), Rockwell Collins Brent R. Cobb Chief Executive Officer, World Class Industries James M. Field President and Chief Financial Officer (retired), Deere and Company Todd A. Gipple President, Chief Operating Officer and Chief Financial Officer, QCR Holdings, Inc. Elizabeth S. Jacobs President, The Jacobs Group, LLC Mark C. Kilmer President, The Republic Companies Timothy B. O’Reilly Chief Executive Officer, Managing Partner, O’Reilly Hospitality Management, LLC Donna J. Sorenson, J.D. President, Sorensen Consulting QCR Holdings, Inc.13 Management Cabinet (Shown left to right) Anne E. Howard Senior Vice President, Director of Human Resources, QCR Holdings, Inc. Todd A. Gipple President, Chief Operating Officer and Chief Financial Officer, QCR Holdings, Inc. Larry J. Helling Chief Executive Officer, QCR Holdings, Inc. and Cedar Rapids Bank & Trust John H. Anderson Chief Executive Officer, Quad City Bank & Trust, Chief Deposit Officer, QCR Holdings, Inc. Dana L. Nichols Executive Vice President, Chief Lending Officer, QCR Holdings, Inc. Leadership Team Leadership Team includes all members of the Management Cabinet and the following: Stacey J. Bentley Robert M. Eby Kim K. Garrett Kurt A. Gibson Todd C. Kerska President and Chief Executive Officer, Community Bank & Trust Executive Vice President, Chief Credit Officer, QCR Holdings, Inc. Vice President, Corporate Communications and Investor Relations Manager, QCR Holdings, Inc. President and Chief Executive Officer, Community State Bank Chair, Best in Class Initiatives, QCR Holdings, Inc. and Cedar Rapids Bank & Trust Cashier James D. Klein President, Cedar Rapids Bank & Trust Monte C. McNew John A. Rodriguez President and Chief Executive Officer, SFC Bank Executive Vice President, Operations, QCR Holdings, Inc. Reba K. Winter Executive Vice President, Chief Information Officer, QCR Holdings, Inc. 2020 Annual Report14 CONDENSED BALANCE SHEET Cash and due from banks Federal funds sold and interest-bearing deposits Securities Net loans/leases Intangibles Goodwill Derivatives Assets held for sale Other assets Total assets Total deposits Total borrowings Derivatives Liabilities held for sale Other liabilities Total stockholders' equity Total liabilities and stockholders' equity ANALYSIS OF LOAN PORTFOLIO 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 PORTFOLIO Securities mix: U.S. government sponsored agency securities Municipal securities Residential mortgage-backed and related securities Asset backed securities Other securities Total securities ANALYSIS OF DEPOSITS Deposit mix: Noninterest-bearing demand deposits Interest-bearing demand deposits Time deposits Brokered deposits Total deposits ANALYSIS OF BORROWINGS Borrowings mix: Term FHLB advances Overnight FHLB advances Customer repurchase agreements Federal funds purchased Subordinated notes Junior subordinated debentures Total borrowings As of December 31, 2020 December 31, 2019 (dollars in thousands) Amount $ 61,329 Amount $ 76,254 95,676 838,131 4,166,753 11,381 74,066 222,757 - 157,691 611,341 3,654,204 14,970 74,748 87,827 11,966 212,704 5,682,797 $ 220,049 4,909,050 $ $ 4,599,137 177,114 $ 3,911,051 278,955 229,270 - 83,483 88,436 5,003 90,254 593,793 5,682,797 $ 535,351 4,909,050 $ $ 1,726,723 2,107,629 $ 1,507,825 1,736,396 66,016 252,121 91,302 7,338 87,869 239,904 109,352 8,859 $ $ 4,251,129 84,376 4,166,753 3,690,205 36,001 3,654,204 $ $ $ 15,336 $ 20,078 627,523 132,842 447,853 120,587 40,683 21,747 838,131 $ 16,887 5,936 611,341 $ $ 1,145,378 $ 777,224 2,987,469 460,659 2,407,502 571,343 5,631 4,599,137 $ 154,982 3,911,051 $ $ - 15,000 $ 50,000 109,300 - 5,430 118,691 2,193 11,230 68,394 $ 37,993 177,114 $ 37,838 278,955 QCR Holdings, Inc. 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 (losses), net Earnings on bank-owned life insurance Debit card fees Correspondent banking fees Gain on sale of assets and liabilities of subsidiary Other Total noninterest income Salaries and employee benefits Occupancy and equipment expense Professional and data processing fees Post-acquisition compensation, transition and integration costs Disposition 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 Correspondent banking expense CDI amortization Goodwill impairment Loss on sale of subsidiary Other Total noninterest expense Net income before taxes Income tax expense Net income Basic EPS Diluted EPS Weighted average common shares outstanding Weighted average common and common equivalent shares outstanding 15 For the Year Ended December 31, December 31, 2020 2019 (dollars in thousands, except per share data) $ 198,373 $ 216,076 31,423 166,950 55,704 60,517 155,559 7,066 $ 111,246 $ 148,493 $ 9,207 $ 9,559 5,318 6,041 4,680 224 74,821 2,484 1,904 3,402 903 - 4,814 6,995 6,812 2,571 748 28,295 (30) 1,973 3,357 773 12,286 5,429 $ 113,798 $ 78,768 $ 96,268 $ 92,063 16,504 14,644 214 690 4,164 1,435 (307) 3,260 2,016 3,907 838 2,149 500 158 5,315 15,106 13,381 3,582 3,325 2,955 1,097 3,789 4,548 2,009 436 836 2,266 3,000 - 6,841 $ 151,755 $ 155,234 $ $ 73,289 12,707 60,582 $ $ 72,027 14,619 57,408 $ $ 3.84 3.80 $ $ 3.65 3.60 15,771,650 15,952,637 15,730,016 15,967,775 2020 Annual Report 16 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 9,400 shares of common stock as a result of the acquisition of Bates Companies Repurchase and cancellation of 100,932 shares of common stock as a result of a share repurchase program 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) Gross loans and leases / total assets (9) Full-time equivalent employees (7) AVERAGE BALANCES Assets Loans/leases Deposits Total stockholders' equity For the Year Ended December 31, 2020 December 31, 2019 (dollars in thousands, except per share data) 15,805,711 15,828,098 $37.57 $32.16 $39.59 $625,748 105.38% 123.09% $3.84 10.31 x 9.08% $33.82 $28.15 $43.86 $694,220 129.69% 155.76% $3.65 12.02 x 9.25% $ 535,351 60,582 2,474 (3,779) - (3,779) 2,944 593,793 $ $ 473,138 57,408 4,445 (3,775) 400 - 3,735 535,351 $ 14.95% 11.34% 9.49% 10.55% 1.08% 10.70% 3.28% 3.44% 54.05% 74.81% 714 13.33% 11.04% 9.53% 10.18% 1.12% 11.31% 3.31% 3.45% 66.18% 74.80% 697 $ 5,604,074 4,031,567 4,540,266 566,240 $ 5,102,980 3,857,547 4,228,207 507,409 (1) Includes accumulated other comprehensive income (loss). (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets. (3) LTM : Last twelve months. (4) TCE / TCA : tangible common equity / total tangible assets. (5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation. (6) TEY : Tax equivalent yield. (7) Growth in full-time equivalent employees due to addition of new positions created to build scale. (8) See GAAP to Non-GAAP reconciliations in the Company's 10-K. (9) Excludes assets held for sale as of December 31, 2019. 1 QCR Holdings, Inc. ANALYSIS OF NET INTEREST INCOME AND MARGIN 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 Other borrowings Subordinated notes Junior subordinated debentures Total interest-bearing liabilities Net interest income / spread (1) Net interest margin Net interest margin (TEY) (Non-GAAP) (1) (2) (3) Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3) 17 December 31, 2020 December 31, 2019 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) $ 2,398 $ 19 315,616 715,808 20,270 669 26,773 1,031 4,031,567 178,097 $ 5,085,659 $ 206,589 $ 2,797,669 $ 11,980 690,222 22,625 74,167 - 83,404 37,913 11,289 84 1,087 - 4,697 2,286 $ 3,706,000 $ 31,423 $ 175,166 $ 8,898 $ 204 179,635 635,650 21,559 3,857,547 3,910 24,150 1,174 193,365 $ 4,703,289 $ 222,803 $ 2,443,989 $ 29,898 966,745 16,837 108,536 13,563 60,883 37,751 20,977 363 2,895 512 3,564 2,308 $ 3,648,304 $ 60,517 $ 162,286 0.79% 0.21% 3.74% 5.00% 4.42% 4.06% 0.43% 1.64% 0.37% 1.44% - 5.63% 5.93% 0.85% 3.28% 3.44% 3.38% 2.29% 2.18% 3.80% 5.45% 5.01% 4.74% 1.22% 2.17% 2.16% 2.67% 3.77% 5.85% 6.11% 1.66% 3.31% 3.45% 3.36% (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) TEY: Tax equivalent yield. (3) See GAPP to non-GAAP reconciliations in the Company's 10K December 31, 2020 December 31, 2019 (dollars in thousands) ADJUSTED NIM (TEY)* Net interest income (GAAP) Plus: Tax-equivalent adjustment Net interest income - tax equivalent (non-GAAP) Less: Acquisition accounting net accretion Adjusted net interest income $ $ 166,950 8,216 175,166 3,271 171,895 155,559 6,727 162,286 4,344 157,942 $ $ Average earning assets $ 5,085,659 $ 4,703,289 NIM (GAAP) NIM (TEY) (non-GAAP) Adjusted NIM (TEY) (non-GAAP) 3.28% 3.44% 3.38% 3.31% 3.45% 3.36% ADJUSTED NET INCOME Net income (GAAP) Less nonrecurring items (post-tax) * : Income: Securities losses, net Loss on syndicated loan Gain on sale of assets and liabilities of subsidiary Total nonrecurring income (non-GAAP) Expense: Losses on debt extinguishment Goodwill impairment Disposition costs Tax expense on expected liquidation of RB&T BOLI Post-acquisition compensation, transition and integration costs Loss on sale of subsidiary Total nonrecurring expense (non-GAAP) $ 60,582 $ 57,408 $ $ $ $ (22) - $ 8,539 8,517 $ $ $ 1,962 (210) - 1,752 3,087 500 545 - 169 110 4,411 345 3,000 2,627 790 2,828 - 9,590 $ $ Adjusted net interest income (non-GAAP) $ 63,240 $ 58,480 * Nonrecurring items (after-tax) are calculated using an estimated effective tax rate of 21% with the exception of goodwill impairment, which is not deductible for tax, and gain on sale of subsidiary, which has an estimated effective tax rate of 30.5%. 4 2020 Annual Report 18 STOCK LISTING INFORMATION The common stock of QCR Holdings, Inc. is traded on the Nasdaq Global Market under the symbol “QCRH”. Dividend Information Record Date Payment Date Cash Amount 03/20/20 04/08/20 06/19/20 07/08/20 09/18/20 10/07/20 12/18/20 01/06/21 $ .06 $ .06 $ .06 $ .06 2021 Annual Meeting of Stockholders Analysts or other investors interested in information may contact: Todd A. Gipple President, Chief Operating Officer and Chief Financial Officer QCR Holdings, Inc., 3551 Seventh Street, Moline, IL 61265 309.743.7745 Kim K. Garrett Vice President, Corp Communications and Investor Relations Manager 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.bank, www.crbt.bank, www.communitybt.bank, www.bankcsb.com, www.sfc.bank and www.m2equipmentfinance.com We invite you to electronically attend the “virtual” annual meeting which will be held on Thursday, May 20, 2021 at 8:00 a.m. Central Daylight Time. You will be able to attend the annual meeting and vote during the meeting by visiting: www.virtualshareholdermeeting.com/ QCRH2021. Prior to the meeting, you will be able to vote by visiting www.proxyvote.com. Stockholders interested in information may contact: Shellee R. Showalter Senior Vice President, Director of Investor Services & Compensation QCR Holdings, Inc., 3551 Seventh Street, Moline, IL 61265 309.743.7760 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 are available to stockholders without charge by accessing our website at www.qcrh.com or may contact: Nick W. Anderson Senior Vice President, Chief Accounting Officer QCR Holdings, Inc., 3551 Seventh Street, Moline, IL 61265 309.743.7707 Stock Transfer Agent Inquiries related to stockholder records, stock transfers, lost certificates, changes of ownership, changes of address, and dividend payments should be sent to our transfer agent at the following address: AST Shareholder Services Attn: Operations Center 6201 15th Avenue, Brooklyn, NY 11219 1.718.921.8124 or 1.800.937.5449 QCR Holdings, Inc.3551 Seventh Street Moline, IL 61265 qcrh.com 

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