QCR
Annual Report 2022

Plain-text annual report

REPORT2022relationship driven. 3 COLLABORATION… THE KEY TO SUCCESS A Message from the Chair of the Board Along with the expansion of our company and commitment to our communities, we accomplished another year of record earnings. We know this would not be possible without the 1,000+ team members that provide excellent customer service for both internal and external clients. With this solid foundation and our excellent management team, I am confident in the continued success and future growth of our company. Thank you for being a shareholder. MARIE Z. ZIEGLER Chair of the Board, QCR Holdings, Inc. On behalf of the entire Board of Directors, I am proud to bring you this year’s Annual Report. Collaboration and adaptation to change were the keys to our company’s outstanding growth and success this past year. These differentiators kept QCR Holdings solidly performing in the top quartile of our peers and drove us to unprecedented success again in 2022. In April, we welcomed into the QCR Holdings family the shareholders, customers, and employees of Guaranty Bank. This acquisition was a strong fit due to the 220 relationship- driven employees and the thriving Springfield market. Most importantly, Guaranty Bank holds the same regard for relationships and business values that guide our own company. Our value of relationships was demonstrated throughout the year by each entity’s involvement in its community. Whether through CRA (Community Reinvestment Act) initiatives, sponsorships, DEI (diversity, equity, and inclusion) engagement, or volunteerism, our team members added value every day to the communities in which they live and work. 2022 Annual Report4 GROWING AND THRIVING A Message from Larry Helling and Todd Gipple As we transition into 2023, QCR Holdings is not just growing, but thriving. With the guiding principles of our 9-6-5 strategy, combined with our successful acquisition of Guaranty Bank, we have grown adjusted net income and adjusted EPS at a compounded annual growth rate of 25.4% and 21.9%, respectively, since 2018. While growing at a consistent pace, we have also significantly increased our profitability, with our performance now in the top quartile of our peer group. LARRY J. HELLING Chief Executive Officer, QCR Holdings, Inc. TODD A. GIPPLE President, Chief Operating Officer and Chief Financial Officer, QCR Holdings, Inc. In 2022, we reported record net income of $99.1 million for the year. After adjusting for the one-time costs associated with the acquisition, our adjusted net income was $114.9 million, which is an increase of 14.8% from 2021. Our adjusted EPS was $6.80 per diluted share, which is an increase of 8.5%. One of the primary ways we accomplished record earnings is through attracting and retaining the best bankers and clients in our markets, which leads to reduced turnover, improved efficiency, higher profitability, and enhanced shareholder value. While our historical performance is impressive, we remain focused on the future and expect to continue to perform at the top of our peer group over the long-term. The combination of our traditional banking and our high-performing business lines provides diverse revenue streams, which has helped us outperform in a variety of economic environments. We remain focused on the future and expect to continue to perform at the top of our peer group over the long-term. While we are mindful of recessionary concerns, we remain cautiously optimistic about the relative economic resiliency of our markets. Additionally, our strong capital and earning momentum have put us in a position to continue to grow and thrive in 2023. QCR Holdings, Inc.2022 Annual Report 5 A SIMPLE AND FOCUSED STRATEGY Grow earnings and drive attractive long-term returns for our shareholders. Our 9-6-5 strategy has resulted in record net income and top quartile performance. Grow loans by 9% per year, funded with core deposits Grow fee income no less than 6% per year We continue to gain market share across our charters by capitalizing on the value that our clients place on relationship-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. We continue to diversify our revenue mix and develop more opportunities to increase profitability with continued gains in non- interest income. Our goal is to grow our fee-based income by no less than 6% per year. Improve efficiencies and hold expense growth to less than 5% per year We remain focused on improving operational efficiencies and managing our non- interest expenses. Our goal is to limit our annual operating expense growth to less than 5% per year. 9656 OUR MISSION We make financial dreams a reality. OUR VISION Exceptional people providing extraordinary performance for our clients, shareholders, and communities. OUR VALUES Passion We care. Achievement We expect to win. Accountability We drive it. Collaboration We work together. Innovation We embrace change. Inclusion We respect all. QCR Holdings, Inc.7 Adjusted Loan and Lease Growth 14.6% Adjusted Earnings Per Share $6.80 Adjusted Net Income $114.9 m NPAs/Assets 0.11% 340 New Relationships in Wealth Management Totaling $481 m Adjusted Return on Average Assets 1.59% Adjusted Return on Average Total Equity 15.4% Expanded Net Interest Margin Strong Asset Quality Increased Adjusted Earnings 2022 Annual Report8 QCR Holdings, Inc. FINANCIAL HIGHLIGHTS Summary of Financial Results (in thousands) Adjusted Non-GAAP Results 2018 2019 2020 2021 2022 Net interest income $142,395 $155,559 $166,950 $178,233 $231,120 Non-interest income $41,541 $66,510 $111,580 $100,303 $78,754 Non-interest expense ($114,976) ($143,892) ($146,304) ($152,136) ($180,775) Pre-tax pre-provision net income $68,960 $78,177 $132,226 $126,400 $129,099 Provision for credit losses ($12,658) ($7,066) ($55,704) ($3,486) $4,110 Net income before taxes $56,302 $71,111 $76,522 $122,914 $133,209 Income taxes ($9,890) ($12,630) ($13,281) ($22,866) ($18,348) Net income $46,412 $58,481 $63,241 $100,048 $114,861 GROSS LOANS/LEASES (MILLIONS) ADJUSTED NET INCOME (MILLIONS) 12.31.22 12.31.21 12.31.20 12.31.19 $4,680 $4,251 $3,690 $6,139 12.31.22 12.31.22 12.31.21 12.31.21 12.31.20 12.31.20 12.31.19 12.31.19 $63,241 $63,241 $58,481 $58,481 $114,861 $114,861 $100,048 $100,048 $0 $3,000 $6,000 $0 $40,000 $80,000 $120,000 TOTAL ASSETS (MILLIONS) BOOK VALUE VS FAIR MARKET VALUE COMMON STOCK (MILLIONS) $7,949 BOOK VALUE FAIR MARKET VALUE 12.31.22 12.31.21 12.31.20 12.31.19 $6,096 $5,705 $4,909 $0 $2,000 $4,000 $6,000 $8,000 $800 $600 $400 $200 $0 12.31.19 12.31.20 12.31.21 12.31.22 10 A COMMITMENT TO COMMUNITY QCR Holdings is built on relationships and integrity. We adhere to those principles in all areas of our business and believe that our environmental, social, and governance (ESG) initiatives will drive shareholder value and make us a better company. 2022 ESG Achievements by the Numbers Volunteer Hours 20,365 Individual Volunteers 539 Employee Engagement Score 78% 2.0% above National Benchmark Financial Literacy Volunteer Hours 4,468 Donations and Sponsorships $1,663,083 CRA Eligible Loans and Investments $753,033,203 Environmental: We believe in responsible use of our resources with a focus on sustainability, including: • Facility enhancements to reduce our carbon footprint, including the purchase of a 59,820 square-foot LEED Silver Certified building • Reduction in courier delivery frequency resulting in at least 7,000 fewer miles driven per year • $36.1 million in financing for solar projects and $2.9 million in Property Assessed Clean Energy financing outstanding as of year-end 2022 Social: We are committed to fostering and preserving a culture of diversity, equity, and inclusion, promoting a highly engaged workforce, and supporting the communities in which we live and work. • Since 2018, we have provided LIHTC investments and loans totaling near $2 billion, helping build over 15,000 units • View our 2022 DEI Achievements on the next page Governance: We are committed to integrity in our business practices and strong corporate governance principles, including: • A strong and diverse holding company board compromised of 45% women and minorities • A total of 162 standard operating procedures implemented as of year-end 2022 to allow for collaboration, agility, transformation, and innovation QCR Holdings, Inc.11 A CULTURE OF INCLUSION At QCR Holdings, we are committed to fostering and preserving a culture of diversity, equity, and inclusion (DEI) and strongly believe that it is our differences - of all kinds - that make our company and our communities better and stronger. Through our six inclusion committees and various public speaking engagements, we are able to demonstrate DEI leadership in our industry. 2022 DEI Achievements by the Numbers DEI Workshops and Educational Sessions 179 Employee DEI Survey Score (1-5) 3.9% 3.4% Increase from 2021 Number of Participants in DEI Workshops and Educational Sessions 800+ Inclusion Committees Created 6 1:1 Meetings with Diversity Officer 570 Cultural Event Participation 15 2022 Annual Report12 OUR LEADERSHIP BOARD OF DIRECTORS LARRY J. HELLING Chief Executive Officer, QCR Holdings, Inc. and Cedar Rapids Bank & Trust TODD A. GIPPLE President, Chief Operating Officer, Chief Financial Officer, QCR Holdings, Inc. MARIE Z. ZIEGLER Chair of the Board, QCR Holdings, Inc., Vice President and Deputy Financial Officer (Retired), Deere and Company JAMES M. FIELD Vice Chair of the Board, QCR Holdings, Inc., President, Worldwide Construction & Forestry Division and Deere Power Systems (Retired), Deere and Company MARY KAY BATES President and Chief Executive Officer, Bank Midwest JOHN-PAUL E. BESONG Retired Executive, Rockwell Collins BRENT R. COBB Chief Executive Officer, World Class Industries, Inc. JOHN F. GRIESEMER President and Chief Executive Officer, Erien Group ELIZABETH S. JACOBS President, The Jacobs Group, LLC MARK C. KILMER President, The Republic Companies DONNA J. SORENSEN, J.D. President, Sorensen Consulting QCR Holdings, Inc.MANAGEMENT CABINET Our Management Cabinet is made up of 6 key leaders within our organization who oversee QCR Holdings, Inc. strategic development, critical decision making, and talent management. They work hand-in-hand with our Leadership Team. 13 JOHN H. ANDERSON Chief Executive Officer, Quad City Bank & Trust and Chief Deposit Officer, QCR Holdings, Inc. TODD A. GIPPLE President, Chief Operating Officer, Chief Financial Officer, QCR Holdings, Inc. LARRY J. HELLING Chief Executive Officer, QCR Holdings, Inc. and Cedar Rapids Bank & Trust ANNE E. HOWARD Senior Vice President, Director of Human Resources, QCR Holdings, Inc. MONTE C. MCNEW Chief Executive Officer, Guaranty Bank and Chief Lending Officer, QCR Holdings, Inc. REBA K. WINTER Executive Vice President, Chief Information Officer, QCR Holdings, Inc. LEADERSHIP TEAM Members of the Leadership Team include the Management Cabinet and other key leaders from around the company. Their leadership ensures effective communication and execution of the holding company’s strategic plan and reinforces our values and culture. STACEY J. BENTLEY President and Chief Executive Officer, Community Bank & Trust ROBERT M. EBY Executive Vice President, Chief Credit Officer, QCR Holdings, Inc. KURT A. GIBSON President and Chief Executive Officer, Community State Bank CARI J. HENSON Vice President Corporate Communications Manager, QCR Holdings, Inc. TODD C. KERSKA Executive Vice President, Best-In-Class Initiatives, QCR Holdings, Inc. Cashier, Cedar Rapids Bank & Trust JAMES D. KLEIN President, Cedar Rapids Bank & Trust 2022 Annual Report14 CONDENSED BALANCE SHEET (Dollars in thousands) December 31, 2022 December 31, 2021 Amount Amount Cash and due from banks Federal funds sold and interest-bearing deposits Securities Net loans/leases Intangibles Goodwill Derivatives Other assets Total assets Total deposits Total borrowings Derivatives Other liabilities Total stockholders' equity Total liabilities and stockholders' equity ANALYSIS OF LOAN PORTFOLIO Loan/lease mix: Commercial and industrial - revolving Commercial and industrial - other Commercial real estate, owner occupied Commercial real estate, non-owner occupied Construction and land development Multi-family Direct financing leases 1-4 family real estate Consumer Total loans/leases Less allowance for credit losses 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 Less: allowance for credit losses Net 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: Overnight FHLB advances Federal funds purchased Subordinated notes Junior subordinated debentures Total borrowings $ $ $ $ $ $ $ $ $ $ $ $ $ $ 59,723 124,270 928,102 6,051,165 16,759 137,607 177,631 453,580 7,948,837 5,984,217 825,894 200,701 165,301 772,724 7,948,837 296,869 1,451,693 629,367 963,239 1,192,061 963,803 31,889 499,529 110,421 6,138,871 87,706 6,051,165 16,981 779,450 66,215 18,728 46,908 928,282 180 928,102 1,262,981 3,875,497 744,593 101,146 5,984,217 415,000 129,630 232,662 48,602 825,894 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 37,490 87,662 810,215 4,601,411 9,349 74,066 222,220 253,719 6,096,132 4,922,772 170,805 225,135 100,410 677,010 6,096,132 248,483 1,346,602 421,701 646,500 918,571 600,412 45,191 377,361 75,311 4,680,132 78,721 4,601,411 23,328 639,799 94,323 27,124 25,839 810,413 198 810,215 1,268,788 3,232,633 421,348 3 4,922,772 15,000 3,800 113,850 38,155 170,805 QCR Holdings, Inc.INCOME STATEMENT (Dollars in thousands) December 31, 2022 December 31, 2021 15 (1) Provision for credit losses for the year ended December 31, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans and $1.4 million related to acquired Guaranty Bank OBS exposures. 2022 Annual ReportAmountAmountInterest income292,571$ 200,155$ Interest expense61,451 21,922 Net interest income 231,120 178,233 Provision for credit losses (1)8,284 3,486 Net interest income after provision for credit222,836$ 174,747$ Trust fees10,641$ 11,206$ Investment advisory and management fees3,858 4,080 Deposit service fees8,134 6,132 Gain on sales of residential real estate loans2,411 4,397 Gain on sales of government guaranteed portions of loans119 227 Capital Markets Revenue41,309 60,992 Securities gains (losses), net- (88) Earnings on bank-owned life insurance2,056 1,838 Debit card fees5,459 4,216 Correspondent banking fees967 1,114 Loan related fee income2,428 2,268 Fair value gain on derivatives1,975 170 Other 1,372 3,870 Total noninterest income80,729$ 100,422$ Salaries and employee benefits115,368$ 100,907$ Occupancy and equipment expense21,975 15,918 Professional and data processing fees16,282 14,579 Acquisition costs3,715 624 Post-acquisition compensation, transition and integration costs5,526 - Disposition costs- 13 FDIC insurance, other insurance and regulatory fees5,806 4,475 Loan/lease expense1,829 1,671 Net cost of operation of other real estate(40) (1,420) Advertising and marketing4,958 4,254 Communication and data connectivity2,213 1,798 Supplies1,109 1,053 Bank service charges2,282 2,173 Correspondent banking expense840 799 Core deposit intangible amortization2,854 2,032 Payment card processing1,964 1,412 Trust expense775 758 Other2,560 2,656 Total noninterest expense190,016$ 153,702$ Net income before taxes113,549$ 121,467$ Income tax expense14,483 22,562 Net income99,066$ 98,905$ Basic EPS5.94$ 6.30$ Diluted EPS5.87$ 6.20$ Weighted average common shares outstanding16,681,844 15,708,744 Weighted average common and common equivalent shares outstanding16,890,007 15,944,708 16 EQUITY & PERFORMANCE (Dollars in thousands except Common Share Data) December 31, 2022 December 31, 2021 (1) Includes accumulated other comprehensive income (loss). (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP). (3) LTM : Last twelve months. (4) TCE : tangible common equity / total tangible assets. See GAAP to Non-GAAP reconciliations in the Company’s Form 10-K and earnings release. (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) See GAAP to Non-GAAP reconciliations in the Company’s Form 10-K and earnings release. (8) Increase due to the acquisition of Guaranty Bank. QCR Holdings, Inc.COMMON SHARE DATACommon shares outstanding 16,795,94215,613,460Book value per common share (1)$46.01$43.36Tangible book value per common share (2)$36.82$38.02Closing stock price$49.64$56.00Market capitalization$833,751$874,354Market price / book value107.90%129.15%Market price / tangible book value134.83%147.30%Earnings per common share (basic) LTM (3)$5.95$6.30Price earnings ratio LTM (3)8.35 x8.88 xTCE / TA (4)7.93%9.87%CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITYBeginning balance677,010$593,793$Cumulative effect from the adoption of ASU 2016-13 CECL- )739(Net income 660,99 509,89Other comprehensive income (loss), net of tax )054,66( 671Proceeds from issuance of 2,071,291 shares of common stock as a result of the 412,711- )459,25( )861,41( )220,4( )187,3( 068,2 220,3772,724$ 677,010$ acquisition of Guaranty Federal Bancshares Repurchase and cancellation of shares of common as a result of share repurchase programs Common stock cash dividends declaredOther (5)Ending balanceREGULATORY CAPITAL RATIOSTotal risk-based capital ratio14.28%14.77%Tier 1 risk-based capital ratio9.95%11.46%Tier 1 leverage capital ratio9.61%10.46%Common equity tier 1 ratio9.29%10.76%KEY PERFORMANCE RATIOS ANDOTHER METRICSReturn on average assets (annualized)1.37%1.68%Return on average total equity (annualized)13.24%15.52%Net interest margin3.49%3.30%Net interest margin (TEY) (Non-GAAP)(6) (7)3.73%3.49%Efficiency ratio (Non-GAAP) (7)60.93%55.16%Gross loans and leases / total assets 77.23%76.77%Full-time equivalent employees (8)973726AVERAGE BALANCES Assets7,206,180$ 5,873,357$Loans/leases 470,406,5 164,654,4Deposits 645,676,5 575,677,4Total stockholders' equity 230,847 091,7361ASSET QUALITY (Dollars in thousands) December 31, 2022 December 31, 2021 17 (1) Credit loss expense on loans/leases for the quarter ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans. (2) The increase in nonaccrual loans for the quarter ended June 30, 2022 is due to the addition of $7.3 million related to the acquired Guaranty Bank loan portfolio. 2022 Annual Report1December 31,December 31,2022221ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASESBeginning balance78,721$ 84,376$ Adoption of ASU 2016-13 "CECL" - Day 1 adjustment- (8,102) Initial ACL recorded for acquired loans5,902 - Credit loss expense (1)9,636 5,702 Loans/leases charged off(7,525) (4,538) Recoveries on loans/leases previously charged off972 1,283 Ending balance87,706$ 78,721$ NONPERFORMING ASSETS Nonaccrual loans/leases (2)8,765$ 2,759$ Accruing loans/leases past due 90 days or more5 1 Total nonperforming loans/leases8,770 2,760 Other real estate owned133 - Total nonperforming assets8,903$ 2,760$ ASSET QUALITY RATIOSNonperforming assets / total assets0.11%0.05%ACL for loans and leases / total loans/leases 1.43%1.68%ACL for loans and leases / nonperforming loans/leases 1000.07%2852.21%INTERNALLY ASSIGNED RISK RATING (3)Special mention (rating 6)98,333$ 62,510$ Substandard (rating 7)66,021 53,159 Doubtful (rating 8)- - 164,354$ 115,669$ Criticized loans (4)164,354$ 115,669$ Classified loans (5)66,021 53,159 Criticized loans as a % of total loans/leases2.68%2.47%Classified loans as a % of total loans/leases1.08%1.14%(1) Credit loss expense on loans/leases for the quarter ended June 30, 2022 included $11.0 million related to the acquired Guaranty Bank non-PCD loans.(2) The increase in nonaccrual loans for the quarter ended June 30, 2022 is due to the addition of $7.3 million related to the acquired Guaranty Bank loan portfolio.(3) Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.(4) Criticized loans are defined as C&I and CRE loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.(5) Classified loans are defined as C&I and CRE loans with internally assigned risk ratings of 7 or 8, regardless of performance.(dollars in thousands)18 NET INTEREST INCOME AND MARGIN Year End December 31, 2022 Year End December 31, 2021 (1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. (2) TEY: Tax equivalent yield. QCR Holdings, Inc.ANALYSIS OF NET INTEREST INCOME AND MARGIN Average Balance Interest Earned or Paid Average Yield or Cost Average Balance Interest Earned or Paid Average Yield or Cost Fed funds sold14,436$ 410$ 2.84%1,964$ 2$ 0.10%Interest-bearing deposits at financial institutions63,448 1,089 1.72%116,421 173 0.15%Securities (1)910,712 36,359 3.99%804,636 29,504 3.66%Restricted investment securities35,554 2,068 5.73%19,386 950 4.83%Loans (1)5,604,074 268,985 4.80%4,456,461 179,738 4.03%Total earning assets (1)6,628,224$ 308,911$ 4.66%5,398,868$ 210,367$ 3.90%Interest-bearing deposits3,715,017$ 35,359$ 0.95%3,058,917$ 8,621$ 0.28%Time deposits568,245 7,003 1.23%448,191 4,679 1.04%Short-term borrowings8,637 299 3.46%6,281 5 0.08%Federal Home Loan Bank advances 286,474 6,954 2.39%23,389 70 0.30%Other borrowings1,068 53 4.96%- - 0.00%Subordinated notes165,685 9,200 5.55%115,398 6,272 5.44%Junior subordinated debentures45,497 2,583 5.60%38,067 2,276 5.90%Total interest-bearing liabilities4,790,623$ 61,451$ 1.28%3,690,243$ 21,923$ 0.59%Net interest income / spread (1)247,460$ 188,444$ Net interest margin3.49%3.30%Net interest margin (TEY) (Non-GAAP) (1) (2)3.73%3.49%Adjusted net interest margin (TEY) (Non-GAAP) (1)(2)3.60%3.47%(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. (2) TEY: Tax equivalent yield.December 31, 2022December 31, 2021(dollars in thousands)For the Year Ended1STOCK LISTING INFORMATION The common stock of QCR Holdings, Inc. is traded on the Nasdaq Global Market under the symbol “QCRH”. 19 Dividend Information Record Date Payment Date Cash Amount 03/18/22 04/06/22 $ 0.06 06/17/22 07/06/22 $ 0.06 09/16/22 10/05/22 $ 0.06 12/16/22 01/05/23 $ 0.06 2022 Stock Performance - Price Change (%) 24 12 0 (12) (24) (36) (48) QCRH Russell 2000 KBW Nasdaq Regional Bank Index -11.06% Feb ‘22 Apr ‘22 Jun ‘22 Aug ‘22 Oct ‘22 Dec ‘22 2022 Annual ReportANALYSIS OF NET INTEREST INCOME AND MARGIN Average Balance Interest Earned or Paid Average Yield or Cost Average Balance Interest Earned or Paid Average Yield or Cost Fed funds sold14,436$ 410$ 2.84%1,964$ 2$ 0.10%Interest-bearing deposits at financial institutions63,448 1,089 1.72%116,421 173 0.15%Securities (1)910,712 36,359 3.99%804,636 29,504 3.66%Restricted investment securities35,554 2,068 5.73%19,386 950 4.83%Loans (1)5,604,074 268,985 4.80%4,456,461 179,738 4.03%Total earning assets (1)6,628,224$ 308,911$ 4.66%5,398,868$ 210,367$ 3.90%Interest-bearing deposits3,715,017$ 35,359$ 0.95%3,058,917$ 8,621$ 0.28%Time deposits568,245 7,003 1.23%448,191 4,679 1.04%Short-term borrowings8,637 299 3.46%6,281 5 0.08%Federal Home Loan Bank advances 286,474 6,954 2.39%23,389 70 0.30%Other borrowings1,068 53 4.96%- - 0.00%Subordinated notes165,685 9,200 5.55%115,398 6,272 5.44%Junior subordinated debentures45,497 2,583 5.60%38,067 2,276 5.90%Total interest-bearing liabilities4,790,623$ 61,451$ 1.28%3,690,243$ 21,923$ 0.59%Net interest income / spread (1)247,460$ 188,444$ Net interest margin3.49%3.30%Net interest margin (TEY) (Non-GAAP) (1) (2)3.73%3.49%Adjusted net interest margin (TEY) (Non-GAAP) (1)(2)3.60%3.47%(1) Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% tax rate. (2) TEY: Tax equivalent yield.December 31, 2022December 31, 2021(dollars in thousands)For the Year Ended1 20 STOCK LISTING INFORMATION 2023 Annual Meeting of Stockholders Stock Transfer Agent We invite you to electronically attend the virtual annual meeting which will be held on Thursday, May 18, 2023 at 8:00 a.m. Central Daylight Time. You will be able to attend the meeting and vote during the meeting by visiting: www.virtualshareholdermeeting.com/ QCRH2023. 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 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 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.gbankmo.com, and www.m2equipmentfinance.com 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 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 Heather L. Brummel Group Operations Executive Administrative Assistant QCR Holdings, Inc. 3551 Seventh Street, Moline, IL 61265 309.277.2657 Independent Registered Public Accounting Firm RSM US LLP, Davenport, IA Corporate Counsel Lane & Waterman LLP, Davenport, IA Barack Ferrazzano Kirschbaum & Nagelberg LLP, Chicago, IL QCR Holdings, Inc.relationship driven. 3551 Seventh Street | Moline, IL 61265qcrh.com

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