QCR
Annual Report 2023

Plain-text annual report

2023 Annual Report relationship driven. 3 A MESSAGE FROM THE CHAIR OF THE BOARD On behalf of the entire Board of Directors, I am proud to bring you this year’s Annual Report. As Larry, Todd, and I rang the closing bell at Nasdaq in August, we were reminded that success is created together and should be celebrated together. Each of our employees and management team members plays an important part in making QCR Holdings Inc. the strong performer it is today. We appreciate the support our shareholders have given and look forward to another rewarding year in 2024. Thank you for being a shareholder. MARIE Z. ZIEGLER Chair of the Board, QCR Holdings, Inc. 2023 was the year of the unexpected. Unexpected increasing rate hikes. Unexpected bank closures. Even unexpected rides from driverless taxis. But what was not unexpected was the strong performance of QCR Holdings Inc. As always, the dedication and hard work of our leaders and employees ensured financial success even during a turbulent year. We achieved record net income, which is impressive, to say the least. With non-interest income growth and strategic loan initiatives for affordable housing, we retained our rank as a top-tier performer in the industry. Our continued commitment to our communities and CRA investments was also not surprising. With over three- quarters of our employees volunteering for 22,971 hours, QCR Holdings, Inc was actively supporting people and organizations right in our own backyards. Add to that the $580 million in CRA eligible loans and over $2 million in sponsorships and donations, there is no doubt that our employees and management understood the need to balance financial success with social responsibility. 2023 Annual Report4 SUCCESS IN A CHALLENGING 2023 A Message from our CEO and President LARRY J. HELLING Chief Executive Officer, QCR Holdings, Inc. TODD A. GIPPLE President and Chief Financial Officer, QCR Holdings, Inc. In spite of a challenging environment for banks in 2023, QCR Holdings, Inc. reported record net income of $113.6 million, marking a significant milestone in our financial performance. This accomplishment was made possible by carefully navigating the industry challenges throughout the year. It is also a testament to the tremendous efforts of our employees and the ongoing support of our clients and stakeholders. Our strong performance created a substantial increase in tangible book value per share (non- GAAP), which grew by $6.99, or 19%, in 2023. This increase demonstrates our commitment to creating long-term shareholder value and maintaining a solid financial foundation. Client relationships are critical to our future success. The reputation that we have earned in our communities is another demonstration of our employees’ efforts. We value our current client relationships and the new ones that we build daily. As we look forward to 2024, our commitment to our communities remains unwavering. Our initiatives to give back and foster community well-being are a source of pride. In addition to living our core values of passion, achievement, accountability, collaboration, innovation, and inclusion, our employees put these words into action through thousands of volunteer hours each year. Thank you for the confidence that you’ve placed in us. With the success we’ve attained through our 9-6-5 strategic focus, we remain dedicated to delivering sustained proxy-peer top-quartile financial performance, ensuring that your investment in our institution is rewarded. QCR Holdings, Inc.2023 FINANCIAL HIGHLIGHTS Strong Loan and Lease Growth For 2023, total loans and leases grew $670 million, or 11%, prior to the $265 million in loan securitizations in the fourth quarter. Excellent Asset Quality The ratio of NPAs to total assets remains low at 0.40% on December 31, 2023. In addition, our criticized loans and classified loans to total loans and leases improved to 2.93% and 1.03% in Q4 2023, respectively. The allowance for credit losses to total loans/leases held for investment was 1.33%. Record Capital Markets Revenue With a 123% increase from 2022, QCRH achieved a total of $92 million in capital markets revenue for the year. With a strong demand for affordable housing, our LIHTC lending continues to remain a healthy revenue pipeline. 5 Adjusted Net Income $115 m Capital Markets Revenue Increase +123% Loan and Lease Growth Prior to Securitizations 11% Deposit Growth 9% Adjusted Diluted Earnings Per Share $6.82 Adjusted Return on Average Assets 1.41% Adjusted Return on Average Equity 13.94% 2023 Annual Report6 FINANCIAL HIGHLIGHTS 2019-2023 Compound Annual Growth Rate in EPS of 16.8% Adjusted Earnings Per Share $8 $6 $4 $2 $0 $6.82 $6.27 $6.80 $5,683 $7,949 $3.66 $3.96 $6,096 $5,705 2019 2020 2021 2022 2023 Summary of Financial Results (thousands) Adjusted Non-GAAP 2019 2020 2021 2022 2023 Net interest income $155,559 $166,950 $178,233 $231,120 $221,006 Provision for credit losses ($7,066) ($55,704) ($3,486) $4,110 ($16,539) Non-interest income $66,510 $111,580 $100,303 $78,754 $134,397 Non-interest expense ($143,892) ($146,304) ($152,136) ($180,775) ($210,324) Net income before taxes $71,111 $76,522 $122,914 $133,209 $128,540 Income taxes Net income ($12,630) ($13,281) ($22,866) ($18,348) ($13,465) $58,481 $63,241 $100,048 $114,861 $115,075 Pre-tax pre-provision net income $78,177 $132,226 $126,400 $129,099 $145,079 QCR Holdings, Inc.7 Gross Loans/Leases (billions) Total Deposits (billions) $6.5 $6.1 $4.7 $4.3 $3.7 $8.0 $6.0 $4.0 $2.0 $0 $8.0 $6.0 $4 $2.0 $0 $6.5 $6.0 $4.9 $4.6 $3.9 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Tangible Book Value/ Fair Market Value TANGIBLE BOOK VALUE PER COMMON SHARE FAIR MARKET VALUE $60 $40 $20 $0 Adjusted ROAA 2% 1.70% 1.59% 1.41% 1% 1.15% 1.13% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 $0 2023 Annual Report8 OUR VALUES DRIVE US Passion We care. Achievement We expect to win. Accountability We drive it. Collaboration We work together. Innovation We embrace change. Inclusion We respect all. OUR MISSION MAKES US We make financial dreams a reality. OUR VISION GUIDES US Exceptional people providing extraordinary performance for our clients, shareholders, and communities. QCR Holdings, Inc.OUR RELATIONSHIPS MATTER TO US 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. Some of our 2023 efforts included: Environmental: We believe in responsible use of resources with a focus on sustainability. Facility enhancements to reduce energy consumption, including incorporating rooftop solar and other energy-efficient features in our new Cedar Rapids, IA, facility, replacing the HVAC system at our Brady Street, Davenport, IA, location with energy-efficient units, and ongoing LED conversions across the company. Reduction of waste through recycling programs, donating old office furniture, eliminating single-use plastic products, and promoting the use of e-statements by customers. $98 million in financing for solar projects and $9 million in Property Assessed Clean Energy (PACE) financing outstanding as of year-end 2023. Social: We are committed to fostering a culture of diversity, equity, and inclusion, promoting an engaged workforce, and supporting our communities. We hired a Chief Human Resources Officer to focus on attracting, retaining, and developing top talent, educating employees on compensation and benefits components, and maximizing benefits usage. We expanded employee development with a new manager development series. We added a “Volunteer Time Off” benefit to provide eight hours of paid leave to volunteer. Our annual employee engagement survey score rated above the financial services national benchmark of 75%, with 92% of employees participating. Our annual DEI Survey saw participation increase by 4.9% over the prior year, with an overall score of 4.0 on a 1-5 scale, up from 3.9 in 2022. Since 2018, we have supported affordable housing with $1.78 billion in loans and $112.8 million in investments through 422 multifamily projects. Governance: We are committed to integrity in our business practices and strong corporate governance principles. Our board of directors includes 45% women and minorities, with women in several board leadership roles, including board chair and three committee chair positions. Our Code of Business Conduct and Ethics Policy reinforces the company’s commitment to ethical business practices, details the fundamental principles of ethical business behavior, and defines the responsibilities of all employees, officers, and directors. We maintain a comprehensive cyber and information security program to ensure the protection and proper disposal of company information and customers’ non-public personal information. All employees receive annual training on information security. 9 Employee Volunteer Hours 22,971 Total Individual Volunteers 625 Financial Literacy Volunteer Hours 4,335 Non-Profits Volunteered at 773 Employee Engagement Survey Score 78% Donations and Sponsorships $2 million CRA Eligible Loans and Investments $648 million 2023 Annual Report10 A NEW FOCUS STRATEGIC PLAN 2024-2026 F. We will attract, retain, and develop top talent. O. We will invest in employee and client-facing technology and opperations. C. We will exceed the expectations of our clients. U. We will invest in our communities. S. We will deliver sustainable top-tier financial performance. We enter 2024 with a new strategic plan called FOCUS. Our new plan still incorporates the successful initiative of 9-6-5, which centered on growing loans, fee income, and core deposits while being prudent with expenses. This initiative, along with our Best-In-Class Standard Operating Procedures, brought us solid EPS results, growing market share, an inclusive employee culture, and solid financial performance. With FOCUS, we plan on sustaining this elevated performance level by further enhancing our employee and client experiences, investing in technology, supporting our communities, and continuing to deliver top-tier financial performance. We will hold ourselves accountable through various measurements such as EPS Growth Rate, Net Promoter Score, Net New Account Rates, and much more. QCR Holdings, Inc.11 Minutes of Translation Services Used 1,491 Number of Languages Translated 11 Employee DEI Workshops 120 Employee DEI Survey Score 4 (out of 5) DEI Docuseries Video Viewed 2,200x Inclusion Committee Members 50 Public DEI Speaking Events 20 INCLUSION MAKES US BETTER 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. This sentiment is reflected in our DEI Survey results, which have shown an improvement from an original score of 3 (out of 5) in 2020 to the most recent score of 4 (out of 5) in response to the statement, “I believe a more inclusive work environment will increase employee engagement.” With the work of our six inclusion committees, various public speaking engagements, and education through our internal DEI Docuseries videos, we demonstrate our DEI leadership within the industry. 2023 Annual Report12 OUR ENTITIES During 2023 at Quad City Bank & Trust, we continued to emphasize our mission of being the premier relationship-driven community bank. Our commitment to the community was shown through our employees’ volunteer efforts, including at our very own Quad City Bank & Trust Riverfront Pops Concert in August. We offered community support through many donations and sponsorships. Our Wisconsin-based subsidiary, m2 Equipment Finance, even developed intern opportunities for local high school students. We were also honored to be recognized with numerous local awards, including receiving the inaugural Corporate Citizen of the Year award. 2023 was also marked by a complete renovation of the Brady Street branch, crowned by the completion of the customer-facing areas of the main lobby, creating an inviting, state-of-the-art space for both our customers and employees to feel proud to come to. This continual look to the future has been shown in Quad City Bank & Trust’s consistent growth year over year as it continues to maintain the largest segment of market share in the Quad Cities at nearly 22%. JOHN H. ANDERSON Chief Executive Officer, Quad City Bank & Trust and Chief Deposit Officer, QCR Holdings, Inc. COMMUNITY SUPPORT: 176 employees volunteered a total of 7,621 hours 253 organizations were supported through volunteer efforts $594,640 was provided through donations/sponsorships ACCOMPLISHMENTS: Named Quad Cities Regional Business Journal: Corporate Citizen of the Year - 2023 Named Quad City Times Best of the Region Awards for Best Bank (2 years in a row) and Best Home Mortgages Quad City Bank & Trust Riverfront Pops Concert named top 5 Quad Cities events Named Quad Cities Regional Business Journal Best Bank & Best Wealth Management Won Locals Love Us Award INCLUSION INITIATIVES: Quad City Bank & Trust’s Inclusion Committee created a full video highlighting the team’s diversity, equity and inclusion efforts incorporating thoughts from leadership as well as Inclusion Committee members. Additionally, numerous organizations supporting community members of diverse backgrounds were supported monetarily and through volunteer efforts such as The Project of the Quad Cities, Clock, Inc., Center for Active Seniors, Inc., Empowering Abilities and The Arc Quad Cities Area. QCR Holdings, Inc.13 COMMUNITY SUPPORT: 169 employees volunteered a total of 6,486 hours 164 organizations were supported through volunteer efforts $843,376 was provided through donations and sponsorships (combined with Community Bank & Trust) ACCOMPLISHMENTS: Named A Top Workplace USA Named A Top Workplace in Iowa by The Des Moines Register Named Corridor Business Journal Best Bank, Best Commercial Real Estate, 2nd Runner Up Best Residential Real Estate, and 2nd Runner Up Best Business Leader-James Klein James Klein named Corridor Business Journal’s Most Influential Person in Corridor CRBT Marion branch recognized at the Commercial Real Estate Design Awards Luncheon Received Iowa Top Workplaces Leaders & Managers Communication Award INCLUSION INITIATIVES: Held first annual all-employee DEI event, “A Seat at the Table: A DEI Panel Conversation” Used 10 different languages via United Language Group Interpretation Service Sponsored 11 Cultural events Co-sponsored “Free Summers at the Cedar Rapids Museum of Art” JAMES D. KLEIN President, Cedar Rapids Bank & Trust Our internal rally cry for 2023 was “Embrace!” And that we did. We embraced the challenge to grow deposits and experienced significant core client growth in 2023 with over 1,000 retail checking accounts, as well as the addition of core commercial relationships that will serve us well into the future. Both our Wealth Management and Specialty Finance Group had a record setting year of fee income. These accomplishments are a testament to our employees’ collective hard work and commitment. Our continued focus on diversity, equity, inclusion, and mental well-being made us more united, ensuring that every member of our team felt supported. I’m proud of what our employees do to embrace our core beliefs and foster our culture. Cedar Rapids Bank & Trust was recognized with numerous accolades, including a 2023 Top Workplace in Iowa and the USA. We also embraced our community by volunteering at over 164 nonprofit organizations. In addition, we proudly hosted our 18th annual CRBT Movies on the Riverbank summer movie series. These are just a few of the many efforts that strengthened our ties to the community. Finally, we are excited for our campus expansion. The new downtown building is a physical manifestation of our growth and readiness to embrace a future filled with possibilities. 2023 Annual Report 14 STACEY J. BENTLEY President and Chief Executive Officer, Community Bank & Trust 2023 was a year of celebration for Community Bank & Trust. We marked our 10-year anniversary of being acquired by Cedar Rpaids Bank & Trust. What a great journey it has been. Over the past decade, our partnership with the company has been amazing. Community Bank & Trust has continued to grow loans and deposits in our local market. Our clients are appreciative of the partnership with Cedar Rapids Bank & Trust. We have experts to assist and help our local businesses and clients prosper and grow. In addition, our Wealth Management Department continues to grow as they assist many clients to prepare for financial success today and succession of assets for the future. Our focus has been to invest and provide opportunities for professional development. This will help individual members of our team as they continue to grow in their careers. Community Bank & Trust continues to be a leader in our community. We exhibit this commitment in a variety of ways, including our premier sponsorship for Grow Cedar Valley’s annual event and our sponsorship/ committee engagement for the Annual Mental Health breakfast. These are two of the largest events in our communities and we are proud to have a seat at the table for these, and dozens of other events across the Cedar Valley. COMMUNITY SUPPORT: 28 employees volunteered a total of 1,387 hours 69 organizations were supported through volunteer efforts $843,376 was provided through donations and sponsorships (combined with Cedar Rapids Bank & Trust) ACCOMPLISHMENTS: Named The Courier Best Bank Honorable Mention 25 Years of 100% Giving to Cedar Valley United Way Stacey Bentley named 2023 Business & Professional Woman of the Year Stacey Bentley named Human Rights Commission Honoree Stacey Bentley inducted into the Junior Achievement of Eastern Iowa Cedar Valley Business Hall of Fame INCLUSION INITIATIVES: Partnered with Four Corners Coalition LLC, an organization bringing individuals from all over the word to meet the staffing needs of the Cedar Valley Implemented a language translating service via United Language Group Interpretation Service Featured a diverse group of businesses representing business owners from all areas of our community during Business Spotlights Sponsored Financial Education and Cultural events, including World Grace Project financial education sessions and a sponsored meal for Haitian immigrants, Neighborhood Resource Fair, Iowa State Extension (Hispanic Group), House of Hope Boost Programs, SHPHT Youth financial education, and Excellence Expo financial education sessions. Community Cares Events with financial education included One City United, Impact Church, Road Home, Friends of the Family, Boys & Girls Club of Cedar Valley, and Payne Memorial AME Church QCR Holdings, Inc.15 During 2023 at Community State Bank, we continued to make significant strides to drive our mission of employees, clients, and communities first – in everything we do. Leadership development programs supporting our employees, proactive client strategies, and robust community initiatives and involvement led to achieving sustainable 14% compounded annual growth rate and record earnings. KURT A. GIBSON President and Chief Executive Officer, Community State Bank Our goal to create welcoming and inclusive environments in our branches made great progress through our multi-year facility refresh project, which features a variety of wall art pieces from diverse local artists. We continued to achieve smooth leadership succession transitions and capture market share in an extremely competitive and vibrant Central Iowa market. COMMUNITY SUPPORT: 165 employees volunteered a total of 4,187 hours 78 organizations were supported through volunteer efforts $376,186 was provided for donations/sponsorships ACCOMPLISHMENTS: Named Des Moines Register Ankeny’s Best Bank, Ankeny’s Best Mortgage Lending Company, and Ankeny’s Best Financial Planning Services Named Des Moines Register Metro’s Best Bank top 3 finalist Received Iowa Homeless Youth Centers Outstanding Service Award INCLUSION INITIATIVES: Sponsored various events, including Iowa Juneteenth, Discover Diverse Des Moines event, Capital City Pride, and Habitat for Humanity Panel Build Donated to a variety of non-profits focused on individuals in need, including the National Alliance on Mental Illness, Hope Ministries, the Iowa Homeless Youth Center, Children & Families Urban Movement, and many more 2023 Annual Report16 MONTE C. MCNEW Chief Executive Officer, Guaranty Bank and Chief Lending Officer, QCR Holdings, Inc. During 2023 at Guaranty Bank, the organic culture of the organization grew after the merger of two outstanding banks. We continued to see results of cultural growth throughout the year as the teams melded together. Significant strides were made towards the “One Bank. One Team. One Goal.” initiative. COMMUNITY SUPPORT: The buildout of our Farmers Park location 87 employees volunteered 3,236 hours continued to provide a pathway forward for 209 non-profits supported through volunteer efforts a collaborative work environment for cross- department knowledge-sharing and offer space for our newly added wealth management team. Our team’s efforts resulted in Guaranty Bank moving up to #3 in market share in the Springfield MSA. Furthermore, Guaranty Bank developed a strategic plan that has provided direction for the years ahead. Guaranty Bank had a strong year of income growth overall in a challenging year in banking. $151,091 was provided for donations and sponsorships ACCOMPLISHMENTS: Moved up to #3 in the Springfield MSA market share and increased market percentage in the Joplin MSA Named 4th Largest Mortgage Lender by the Springfield Business Journal Marc Mayer awarded Springfield Business Journal’s Most Trusted Advisor Award INCLUSION INITIATIVES: Participated in MLK Walk in Springfield, MO Sponsored local Juneteenth events Sponsored the Springfield Multicultural Festival Donated to Connect2Culture, who ignite passion for The Arts, Culture, and Entertainment QCR Holdings, Inc.17 In 2023, Group Operations (GO) had another successful year of delivering shared services to our internal clients, helping them provide “raving fan” service to our external clients. Our Group Operations employees are intentionally located throughout our Company’s geographic footprint and in each of our markets. This creates strong engagement and collaboration between our teams and allows our member banks to be nimble and agile and truly deliver relationship-based community banking in each of our markets. Together, we focus on delivering an exceptional client experience. TODD A. GIPPLE President, Chief Financial Officer, QCR Holdings, Inc. Last year, we began exploring opportunities to create an even better customer experience, reduce cybersecurity risks, and optimize performance across the organization. Our solution was to integrate our Deposit Operations, Loan Operations, and Information Technology – now called TechOps. This newly integrated group harnesses the combined leadership and synergy of expertise to improve customer experience through optimized processes, automated workflow, and new technologies. We also successfully completed the standardization phase of our Best in Class initiative, having implemented a total of 325 standard operating procedures as of year-end to allow for collaboration, agility, transformation, and innovation throughout the company. 2023 Annual Report18 OUR LEADERSHIP BOARD OF DIRECTORS LARRY J. HELLING Chief Executive Officer, QCR Holdings, Inc. and Cedar Rapids Bank & Trust TODD A. GIPPLE President, 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 Chairman, 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. 19 JOHN H. ANDERSON Chief Executive Officer, Quad City Bank & Trust and Chief Deposit Officer, QCR Holdings, Inc. TODD A. GIPPLE President, Chief Financial Officer, QCR Holdings, Inc. LARRY J. HELLING Chief Executive Officer, QCR Holdings, Inc. and Cedar Rapids Bank & Trust NIKI A. LEE Executive Vice President, Chief Human Resources Officer, 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 Operating 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 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 2023 Annual Report20 CONDENSED BALANCE SHEET Cash and due from banks FOR THE YEAR ENDED December 31, 2023 December 31, 2022 (dollars in thousands) Amount Amount $97,123 $59,723 Federal funds sold and interest-bearing deposits 140,369 124,270 Securities, net Net loans/leases Intangibles Goodwill Derivatives Other assets Total assets Total deposits Total borrowings Derivatives Other liabilities Total stockholders' equity 1,005,528 928,102 6,456,216 6,051,165 13,821 16,759 139,027 137,607 187,341 177,631 499,469 453,580 $8,538,894 $7,948,837 $6,514,005 $5,984,217 718,295 825,894 215,735 200,701 204,263 165,301 886,596 772,724 Total liabilities and stockholders' equity $8,538,894 $7,948,837 QCR Holdings, Inc.21 ANALYSIS OF LOAN PORTFOLIO Loan/lease mix: FOR THE YEAR ENDED December 31, 2023 December 31, 2022 (dollars in thousands) Commercial and industrial - revolving $325,243 $296,869 Commercial and industrial - other 1,390,068 1,371,590 Commercial and industrial - other - LIHTC 91,710 80,103 Total commercial and industrial 1,807,021 1,748,562 Commercial real estate, owner occupied 607,365 629,367 Commercial real estate, non-owner occupied 1,008,892 963,239 Construction and land development 477,424 448,986 Construction and land development - LIHTC 943,101 743,075 Multi-family Multi-family - LIHTC Direct financing leases 1-4 family real estate Consumer Total loans/leases 284,721 236,043 711,422 727,760 31,164 31,889 544,971 499,529 127,335 110,421 $6,543,416 $6,138,871 Less allowance for credit losses 87,200 87,706 Net loans/leases $6,456,216 $6,051,165 ANALYSIS OF DEPOSITS Deposit mix: Noninterest-bearing demand deposits $1,038,689 $1,262,981 Interest-bearing demand deposits 4,338,390 3,875,497 Time deposits Brokered deposits Total deposits 851,950 284,976 744,593 101,146 $6,514,005 $5,984,217 2023 Annual Report 22 INCOME STATEMENT Interest income Interest expense Net interest income Provision for credit losses (1) Net interest income after provision for credit losses FOR THE YEAR ENDED December 31, 2023 December 31, 2022 (dollars in thousands) Amount Amount $413,410 $292,571 192,404 61,451 221,006 231,120 16,539 8,284 $204,467 $222,836 Total noninterest income $132,684 $80,729 Total noninterest expense $210,531 $190,016 Net income before taxes Income tax expense Net income Basic EPS Diluted EPS $126,620 $113,549 13,062 14,483 $113,558 $99,066 $6.79 $6.73 $5.94 $5.87 Weighted average common shares outstanding 16,732,406 16,681,844 Weighted average common and common equivalent shares outstanding 16,866,391 16,890,007 (1) Provision for credit losses for the year ended December 31, 2022 included $11.0 million related to the acquired Guaranty Bank QCR Holdings, Inc. 23 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) Price earnings ratio Basic adjusted earnings per common share (non-GAAP) (3) FOR THE YEAR ENDED December 31, 2023 December 31, 2022 (dollars in thousands, except per share data) 16,749,254 16,795,942 $52.93 $43.81 $58.39 $46.01 $36.82 $49.64 $977,989 $833,751 110.31% 133.29% $6.79 8.61 x 6.88% 107.90% 134.83% $5.95 8.35 x 6.89% Diluted adjusted earnings per common share 6.82% 6.80% (non-GAAP) (3) TCE / TA (4) 8.75% 7.93% CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY Beginning balance Net income $772,724 $677,010 113,558 99,066 Other comprehensive income (loss), net of tax 8,939 (66,450) Proceeds from issuance of 2,071,291 shares of common stock as a result of the acquisition of - 117,214 Guaranty Federal Bancshares" Repurchase and cancellation of shares of common as a result of a share repurchase program Common stock cash dividends declared Other (5) Ending balance (8,686) (52,954) (4,020) 4,081 (4,022) 2,860 $886,596 $772,724 (1) Includes accumulated other comprehensive income (loss). (2) Includes accumulated other comprehensive income (loss) and excludes intangible assets (Non-GAAP). (3) See GAAP to Non-GAAP reconciliation. (4) TCE / TCA : tangible common equity / total tangible assets. See GAAP to Non-GAAP reconciliations. (5) Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation. 2023 Annual Report 24 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 Adjusted return on average assets Adjusted return on average total equity Net interest margin Net interest margin (TEY) (Non-GAAP)(1) (2) Adjusted net interest margin (TEY) (Non-GAAP) (1) 2) Efficiency ratio (Non-GAAP) (2) Gross loans and leases / total assets Full-time equivalent employees AVERAGE BALANCES Assets Loans/leases Deposits Total stockholders' equity FOR THE YEAR ENDED December 31, 2023 December 31, 2022 (dollars in thousands) 14.29% 10.27% 10.03% 9.67% 1.41% 13.94% 2.97% 3.35% 3.32% 59.52% 76.63% 996 14.28% 9.95% 9.61% 9.29% 1.59% 15.36% 3.49% 3.73% 3.60% 60.93% 77.23% 973 $8,165,805 $7,206,180 6,337,551 5,604,074 6,325,790 5,676,546 825,557 748,032 (1) TEY : Tax equivalent yield. (2) See GAAP to Non-GAAP reconciliations in the Company’s Form 10-K. QCR Holdings, Inc. 25 STOCK LISTING INFORMATION The common stock of QCR Holdings, Inc. is traded on the Nasdaq Global Market under the symbol “QCRH”. 2024 Annual Meeting of Stockholders Stock Transfer Agent We invite you to electronically attend the virtual annual meeting which will be held on Thursday, May 16, 2024 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/ QCRH2024. 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, Equity Administration and Executive 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: Equiniti Trust Company, LLC 55 Challenger Road 2nd floor Ridgefield Park, New Jersey 07660 Toll Free: 800.937.5449 Local & International: 718.921.8124 Hours: 8 a.m. – 8 p.m. ET Monday-Friday Email: helpast@equiniti.com Website: equiniti.com Analysts or other investors interested in information may contact: Todd A. Gipple President, 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 2023 Annual Report26 DIVIDEND INFORMATION RECORD PAYMENT CASH DATE DATE AMOUNT 03/17/23 04/05/23 06/16/23 07/06/23 09/15/23 10/04/23 12/15/23 01/04/24 $0.06 $0.06 $0.06 $0.06 2023 Stock Performance - Annual Percent Change QCR KBW Nasdaq Regional Banking Index Russel 2000 QCR Holdings, Inc.relationship driven. 3551 SEVENTH STREET | MOLINE, IL 61265 QCRH.COM 

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