QCR Holdings, Inc. Announces Net Income of $8.8 Million for

MOLINE, Ill., July 20, 2017 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ:QCRH) today announced net income of $8.8 million and diluted earnings per share (“EPS”) of $0.65 for the quarter ended June 30, 2017. By comparison, for the quarter ended March 31, 2017, the Company reported net income of $9.2 million and diluted EPS of $0.68. For the quarter ended June 30, 2016, the Company reported net income of $6.7 million and diluted EPS of $0.53. In the second quarter of 2017, the Company recognized a tax benefit related to stock options exercised and restricted stock awards vested of $90 thousand, compared to $533 thousand of reduced income tax expense for the first quarter of 2017.

For the six months ended June 30, 2017, the Company reported net income of $18.0 million, and diluted EPS of $1.33. By comparison, for the six months ended June 30, 2016, the Company reported net income of $13.1 million, and diluted EPS of $1.07.

“Our operating performance for the first half of the year was strong,” commented Douglas M. Hultquist, President and Chief Executive Officer, “and we continue to strategize and pursue ways to improve our profitability through our ongoing key initiatives. Our return on average assets has improved to 1.08% from 1.00%, when comparing the first six months of 2017 to the same period of the prior year. This is the result of strong organic loan growth, robust growth in core deposits, reductions in wholesale borrowings, margin improvements, modest operating expense growth, and solid fee income. Our acquisition of Community State Bank, based in Ankeny, Iowa (“CSB”) in the 3^rd quarter of 2016 also contributed to our improved profitability.”

Annualized Loan and Lease Growth of 19.2% for Second Quarter of 2017

During the second quarter of 2017, the Company’s total assets increased $76.2 million, or 2%, to a total of $3.46 billion, while total loans and leases grew $117.7 million, or 4.8%. Loan and lease growth was funded by deposit growth that occurred in the first six months of 2017.

“Organic loan and lease growth totaled $117.7 million for the quarter, or an annual growth rate of 19.2%,” commented Mr. Hultquist. “This was a very strong quarter and puts us back on track to achieve targeted organic growth of 10-12% for the full year, assuming no major economic shifts. We intend to continue our organic growth primarily through market share increases, as customers continue to appreciate the way we do business and are attracted to our relationship-based community banking model.”

“Swap fee income and gains on the sale of government guaranteed loans totaled $1.5 million for the first six months of the year. The second quarter of 2017 was slow in this area. Given the nature of this fee income source, large fluctuations can occur from quarter-to-quarter,” said Todd A. Gipple, Executive Vice President, Chief Operating Officer and Chief Financial Officer. “We plan to continue executing these types of transactions, as they provide unique and beneficial solutions for our clients. We also look forward to offering these products in the Des Moines metro market through CSB.”

Net Interest Income Continues to be
Impacted by Acquisition-Related Accounting

Net interest income totaled $28.0 million for the quarter ended June 30, 2017. By comparison, net interest income totaled $27.7 million and $21.0 million for the quarters ended March 31, 2017 and June 30, 2016, respectively. Acquisition-related net accretion totaled $1.6 million for the quarter ended June 30, 2017. By comparison, acquisition-related net accretion totaled $2.1 million for the quarter ended March 31, 2017. Excluding acquisition-related net accretion, net interest income of $26.5 million for the second quarter of 2017 increased 3%, compared to $25.6 million for the quarter ended March 31, 2017.

Net interest income totaled $55.7 million for the six months ended June 30, 2017. By comparison, net interest income totaled $41.6 million for the six months ended June 30, 2016.

“Net interest margin (excluding acquisition accounting net accretion) was relatively flat showing a modest decline of one basis point at 3.62% for the second quarter of 2017, compared to 3.63% for the first quarter of 2017,” stated Mr. Gipple. “Loan yield (excluding loan discount accretion) actually increased five basis points when comparing linked quarters at 4.39% for the second quarter of 2017 and 4.34% for the first quarter of 2017. Although we had a successful quarter of loan growth, much of that growth came late in the quarter so the full benefit will be seen in future periods.”

Nonperforming Assets Decrease 5.3% in Second Quarter

Nonperforming assets (“NPAs”) decreased $1.4 million in the current quarter. The ratio of NPAs to total assets was 0.75% at June 30, 2017, which was down from 0.81% at March 31, 2017 and up from 0.70% a year ago.

“Our credit quality metrics remain strong in comparison to peers and we remain committed to further improving asset quality in 2017,” stated Mr. Hultquist.

The Company’s provision for loan and lease losses totaled $2.0 million for the second quarter of 2017, which was down slightly from the prior quarter, and up $825 thousand compared to the second quarter of 2016. As of June 30, 2017, the Company’s allowance to total loans and leases was 1.31%, which was down from 1.32% at March 31, 2017 and down from 1.46% at June 30, 2016.

In accordance with generally accepted accounting principles for acquisition accounting, the loans acquired through the acquisition of CSB were recorded at market value; therefore, there was no allowance associated with CSB’s loans at acquisition. Management continues to evaluate the allowance needed on the acquired CSB loans factoring in the net remaining discount ($6.3 million at June 30, 2017). When factoring this remaining discount into the Company’s allowance to total loans and leases calculation, the Company’s allowance as a percentage of total loans and leases increases from 1.31% to 1.55%.

Capital Levels Remain Strong

As of June 30, 2017, the Company’s total risk-based capital ratio was 12.01%, the common equity tier 1 ratio was 9.76%, and the tangible common equity to tangible assets ratio increased to 8.29%. By comparison, these respective ratios were 11.90%, 9.64% and 8.20% as of March 31, 2017.

“As a result of solid earnings performance, capital ratios continue to be strong and we are growing tangible common equity at a steady pace,” stated Mr. Gipple.

Acquisition of Guaranty Bank and Trust Company, Headquartered in Cedar Rapids, Iowa

As previously announced, the Company plans to close the acquisition of Guaranty Bank and Trust Company late in the third quarter or early in the fourth quarter of 2017, pending regulatory and shareholder approvals and certain customary closing conditions.

Continued Focus on Seven Key Initiatives

The Company continues to focus on the following initiatives in an effort to improve profitability and drive increased shareholder value:

Continue strong organic loan and lease growth to maintain loans and leases to total assets ratio in the range of 70-75%
Continue to focus on growing core deposits to maintain reliance on wholesale funding at less than 15% of assets
Continue to focus on generating gains on sale of USDA and SBA loans, and fee income on swaps, as a significant and consistent component of core revenue
Grow wealth management net income by 10% annually
Carefully manage noninterest expense growth
Maintain asset quality metrics at better than peer levels
Participate as an acquirer in the consolidation taking place in our markets to further boost ROAA, improve efficiency ratio, and increase EPS

Conference Call Details

The Company will host an earnings call/webcast on July 21, 2017 at 9 a.m. central time. Dial-in information for the call is toll-free 1-888-317-6016 (international 1-412-317-6016). Participants should request to join the QCR Holdings, Inc. call. The event will be archived and available for digital replay through August 4, 2017. The replay access information is toll-free 1-877-344-7529 (international 1-412-317-0088); access code 10110356. A webcast of the teleconference can be accessed at the Company’s News and Events page at http://www.qcrh.com or http://services.choruscall.com/links/qcrh170721.html. The archived audio webcast will be available until July 21, 2018. Participants should visit the Company’s website or call in to the conference line set forth above at least 10 minutes prior to the scheduled start of the call.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company, which serves the Quad City, Cedar Rapids, Cedar Valley, Des Moines/Ankeny, and Rockford communities through its wholly owned subsidiary banks. Quad City Bank & Trust Company, which is based in Bettendorf, Iowa, and commenced operations in 1994, Cedar Rapids Bank & Trust Company, which is based in Cedar Rapids, Iowa, and commenced operations in 2001, Community State Bank, which is based in Ankeny, Iowa and was acquired by the Company in 2016, and Rockford Bank & Trust Company, which is based in Rockford, Illinois, and commenced operations in 2005, provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company also provides correspondent banking services. In addition, Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company.

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

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local, national and international economies; (ii) the economic impact of any future terrorist threats and attacks, and the response of the United States to any such threats and attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) unexpected results of acquisitions, including the acquisition of CSB and the planned acquisition of Guaranty Bank and Trust Company, which may include failure to realize the anticipated benefits of the acquisition and the possibility that the transaction costs may be greater than anticipated; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

	As of
	June 30,		March 31,		December 31,		September 30,		June 30,
	2017		2017		2016		2016		2016

	(dollars in thousands)

CONDENSED BALANCE SHEET

Cash and due from banks	$	77,161	$	56,326	$	70,570	$	61,213	$	49,581
Federal funds sold and interest-bearing deposits		72,354		173,219		86,206		96,047		68,432
Securities		593,485		557,646		574,022		564,930		510,959
Net loans/leases		2,520,209		2,403,791		2,374,730		2,331,774		1,894,676
Core deposit intangible		6,919		7,150		7,381		7,614		1,372
Goodwill		13,111		13,111		13,111		13,632		3,223
Other assets		173,948		169,770		175,924		205,776		155,191
Total assets	$	3,457,187	$	3,381,013	$	3,301,944	$	3,280,986	$	2,683,434

Total deposits	$	2,870,234	$	2,805,931	$	2,669,261	$	2,594,913	$	1,973,594
Total borrowings		230,263		231,534		290,952		312,104		381,874
Other liabilities		51,607		47,708		55,690		93,112		52,849
Total stockholders' equity		305,083		295,840		286,041		280,857		275,117
Total liabilities and stockholders' equity	$	3,457,187	$	3,381,013	$	3,301,944	$	3,280,986	$	2,683,434

ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial loans (1)	$	942,539	$	851,578	$	827,637	$	804,308	$	706,261
Commercial real estate loans		1,131,906		1,106,842		1,093,459		1,070,305		784,379
Direct financing leases (1)		153,337		159,368		165,419		166,924		169,928
Residential real estate loans		233,871		231,326		229,233		229,081		180,482
Installment and other consumer loans		84,047		78,771		81,666		81,918		73,658
Deferred loan/lease origination costs, net of fees		7,866		7,965		8,073		8,065		8,065
Total loans/leases	$	2,553,566	$	2,435,850	$	2,405,487	$	2,360,601	$	1,922,773
Less allowance for estimated losses on loans/leases		33,357		32,059		30,757		28,827		28,097
Net loans/leases	$	2,520,209	$	2,403,791	$	2,374,730	$	2,331,774	$	1,894,676

ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities	$	41,944	$	47,556	$	46,084	$	67,885	$	88,321
Municipal securities		381,254		356,776		374,463		360,330		302,689
Residential mortgage-backed and related securities		164,415		147,504		147,702		133,173		116,765
Other securities		5,872		5,810		5,773		3,542		3,184
Total securities	$	593,485	$	557,646	$	574,022	$	564,930	$	510,959

ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits	$	760,625	$	777,150	$	797,415	$	764,615	$	615,764
Interest-bearing demand deposits		1,526,103		1,486,047		1,369,226		1,298,781		918,036
Time deposits		478,580		458,170		439,169		420,470		337,584
Brokered deposits		104,926		84,564		63,451		111,047		102,210
Total deposits	$	2,870,234	$	2,805,931	$	2,669,261	$	2,594,913	$	1,973,594

ANALYSIS OF BORROWINGS
Borrowings mix:
Term FHLB advances	$	57,000	$	59,000	$	63,000	$	83,343	$	78,000
Overnight FHLB advances (2)		49,500		47,550		74,500		55,300		118,900
Wholesale structured repurchase agreements		45,000		45,000		45,000		45,000		100,000
Customer repurchase agreements		4,897		7,170		8,132		8,265		21,441
Federal funds purchased		13,320		12,300		31,840		51,750		30,120
Junior subordinated debentures		33,546		33,514		33,480		33,446		33,413
Other borrowings		27,000		27,000		35,000		35,000		-
Total borrowings	$	230,263	$	231,534	$	290,952	$	312,104	$	381,874

(1) m2 Lease Funds, LLC originates Equipment Financing Agreements, which are classified as commercial and industrial loans.
(2) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 1.31%.

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

		For the Six Months Ended
		June 30,		June 30,
		2017		2016

	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income		$	63,798	$	47,415
Interest expense			8,082		5,809
Net interest income			55,716		41,606
Provision for loan/lease losses			4,128		3,271
Net interest income after provision for loan/lease losses		$	51,588	$	38,335

Trust department fees		$	3,432	$	3,088
Investment advisory and management fees			1,830		1,351
Deposit service fees			2,775		1,878
Gain on sales of residential real estate loans			209		145
Gain on sales of government guaranteed portions of loans			1,038		2,482
Swap fee income			441		1,025
Securities gains, net			38		376
Earnings on bank-owned life insurance			929		874
Debit card fees			1,446		651
Correspondent banking fees			445		547
Other			1,483		1,168
Total noninterest income		$	14,066	$	13,585

Salaries and employee benefits		$	26,238	$	21,718
Occupancy and equipment expense			5,201		3,711
Professional and data processing fees			4,424		2,990
Acquisition costs			-		355
FDIC insurance, other insurance and regulatory fees			1,267		1,284
Loan/lease expense			554		317
Net cost of operation of other real estate			42		380
Advertising and marketing			1,177		820
Postage and communications			642		474
Stationery and supplies			422		323
Bank service charges			871		831
Losses on debt extinguishment, net			-		83
Correspondent banking expense			400		359
Other			1,440		1,053
Total noninterest expense		$	42,678	$	34,698

Net income before taxes		$	22,976	$	17,222
Income tax expense			5,025		4,172
Net income		$	17,951	$	13,050

Basic EPS		$	1.36	$	1.08
Diluted EPS		$	1.33	$	1.07

Weighted average common shares outstanding			13,151,833		12,064,349
Weighted average common and common equivalent shares outstanding			13,502,505		12,235,212

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

	For the Quarter Ended
	June 30,		March 31,		December 31,			September 30,		June 30,
		2017		2017		2016			2016		2016

	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income	$	32,453	$	31,345	$	32,236		$	26,817	$	23,913
Interest expense		4,406		3,676		2,956			3,186		2,904
Net interest income		28,047		27,669		29,280			23,631		21,009
Provision for loan/lease losses		2,023		2,105		2,599			1,608		1,198
Net interest income after provision for loan/lease losses	$	26,024	$	25,564	$	26,681		$	22,023	$	19,811


Trust department fees	$	1,692	$	1,740	$	1,558		$	1,519	$	1,512
Investment advisory and management fees		868		962		876			766		693
Deposit service fees		1,459		1,316		1,411			1,151		947
Gain on sales of residential real estate loans		113		96		142			144		84
Gain on sales of government guaranteed portions of loans		87		951		458			219		1,604
Swap fee income		327		114		350			334		168
Securities gains, net		38		-		(36	)		4,252		18
Earnings on bank-owned life insurance		459		470		447			450		480
Debit card fees		743		703		688			475		344
Correspondent banking fees		200		245		249			254		245
Other		796		687		886			859		667
Total noninterest income	$	6,782	$	7,284	$	7,029		$	10,423	$	6,762


Salaries and employee benefits	$	12,931	$	13,307	$	13,396		$	11,202	$	10,917
Occupancy and equipment expense		2,699		2,502		2,630			2,086		1,885
Professional and data processing fees		2,341		2,083		2,192			1,931		1,542
Acquisition costs		-		-		40			2,046		355
FDIC insurance, other insurance and regulatory fees		646		621		683			583		650
Loan/lease expense		260		294		242			103		154
Net cost of operation of other real estate		28		14		78			133		278
Advertising and marketing		568		609		760			548		433
Bank service charges		447		424		446			415		415
Losses on debt extinguishment, net		-		-		357			4,137		-
Correspondent banking expense		202		198		186			206		182
Other		1,283		1,221		1,298			1,090		933
Total noninterest expense	$	21,405	$	21,273	$	22,308		$	24,480	$	17,744

Net income before taxes	$	11,401	$	11,575	$	11,402		$	7,966	$	8,829
Income tax expense		2,635		2,390		2,873			1,858		2,153
Net income	$	8,766	$	9,185	$	8,529		$	6,108	$	6,676

Basic EPS	$	0.67	$	0.70	$	0.65		$	0.47	$	0.54
Diluted EPS	$	0.65	$	0.68	$	0.64		$	0.46	$	0.53

Weighted average common shares outstanding		13,170,283		13,133,382		13,087,592			13,066,777		12,335,077
Weighted average common and common equivalent shares outstanding		13,516,592		13,488,417		13,323,883			13,269,703		12,516,474

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

	For the Quarter Ended															For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2017			2017			2016			2016			2016			2017			2016

	(dollars in thousands, except per share data)

COMMON SHARE DATA
Common shares outstanding		13,175,234			13,161,219			13,106,845			13,075,307			13,057,368
Book value per common share (1)	$	23.16		$	22.48		$	21.82		$	21.48		$	21.07
Tangible book value per common share (2)	$	21.64		$	20.94		$	20.11		$	19.74		$	20.72
Closing stock price	$	47.40		$	42.35		$	43.30		$	31.74		$	27.19
Market capitalization	$	624,506		$	557,378		$	567,526		$	415,010		$	355,030
Market price / book value		204.70	%		188.41	%		198.41	%		147.77	%		129.05	%
Market price / tangible book value		219.08	%		202.26	%		215.36	%		160.79	%		131.24	%
Earnings per common share (basic) LTM (3)	$	2.49		$	2.36		$	2.20		$	2.13		$	2.21
Price earnings ratio LTM (3)	19.11 x			17.94 x			19.68 x			14.90 x			12.30 x
TCE / TA (4)		8.29	%		8.20	%		8.04	%		7.92	%		10.10	%


CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance	$	295,840		$	286,041		$	280,857		$	275,117		$	235,143
Net income		8,766			9,185			8,529			6,108			6,676
Other comprehensive income (loss), net of tax		702			411			(3,681	)		(361	)		1,181
Common stock cash dividends declared		(657	)		(657	)		(523	)		(521	)		(521	)
Proceeds from issuance of 1,215,000 shares of common stock, net of costs		-			-			-			-			29,829
Other (5)		432			860			859			514			2,809
Ending balance	$	305,083		$	295,840		$	286,041		$	280,857		$	275,117


REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio		12.01	%		11.90	%		11.56	%		11.30	%		14.29	%
Tier 1 risk-based capital ratio		10.85	%		10.75	%		10.46	%		10.29	%		13.04	%
Tier 1 leverage capital ratio		9.37	%		9.37	%		9.10	%		10.09	%		11.18	%
Common equity tier 1 ratio		9.76	%		9.64	%		9.41	%		9.22	%		11.72	%


KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)		1.04	%		1.12	%		1.04	%		0.85	%		1.01	%		1.08	%		1.00	%
Return on average total equity (annualized)		11.65	%		12.63	%		12.04	%		8.78	%		10.46	%		12.13	%		10.73	%
Net interest margin		3.54	%		3.65	%		3.80	%		3.48	%		3.40	%		3.59	%		3.39	%
Net interest margin (TEY) (Non-GAAP)(7)		3.81	%		3.90	%		4.02	%		3.71	%		3.62	%		3.86	%		3.61	%
Efficiency ratio (Non-GAAP) (8)		61.46	%		60.86	%		61.44	%		71.89	%		63.89	%		61.16	%		62.87	%
Gross loans and leases / total assets		73.86	%		72.04	%		72.85	%		71.95	%		71.65	%		73.86	%		71.65	%
Effective tax rate		23.11	%		20.65	%		25.20	%		23.32	%		24.39	%		23.11	%		24.22	%
Tax benefit related to stock options exercised and restricted stock awards vested (9)		90			533		N/A			N/A			N/A				623		N/A
Full-time equivalent employees (10)		585			561			572			572			410			585			410


AVERAGE BALANCES
Assets	$	3,378,195		$	3,274,713		$	3,277,814		$	2,865,947		$	2,640,678		$	3,326,454		$	2,621,514
Loans/leases		2,488,828			2,398,387			2,358,960			2,077,376			1,899,932			2,443,608			1,866,941
Deposits		2,835,711			2,692,009			2,717,923			2,243,397			2,033,116			2,763,861			2,006,586
Total stockholders' equity		300,868			290,906			283,292			278,369			255,391			295,887			243,319

(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 / TA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.
(5) Mainly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
(7) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
(8) See GAAP to Non-GAAP reconciliations.
(9) ASC 2016-09 became effective on January 1, 2017 and affects the accounting for stock compensation. This amount reflects the tax benefit recognized as a result of this new standard.
(10) Full-time equivalent ''FTEs" employees increased in the second quarter of 2017 due to the addition of summer interns (13.6 FTEs).
FTEs increased in the third quarter of 2016 due to the acquisition of CSB.

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

ANALYSIS OF NET INTEREST INCOME AND MARGIN

	For the Quarter Ended
	June 30, 2017						March 31, 2017						June 30, 2016
	Average Balance		Interest Earned or Paid		Average Yield or Cost		Average Balance		Interest Earned or Paid		Average Yield or Cost		Average Balance		Interest Earned or Paid		Average Yield or Cost

	(dollars in thousands)

Fed funds sold	$	18,742	$	38	0.81	%	$	11,092	$	15	0.55	%	$	14,174	$	11	0.31	%
Interest-bearing deposits at financial institutions		86,236		220	1.02	%		92,551		199	0.87	%		50,747		62	0.49	%
Securities (1)		573,747		5,384	3.76	%		560,455		5,158	3.73	%		505,697		4,573	3.64	%
Restricted investment securities		13,226		132	4.00	%		13,871		130	3.80	%		14,171		134	3.80	%
Loans (1)		2,488,828		28,881	4.65	%		2,398,387		27,793	4.70	%		1,899,932		20,497	4.34	%
Total earning assets (1)	$	3,180,779	$	34,655	4.37	%	$	3,076,356	$	33,295	4.39	%	$	2,484,721	$	25,277	4.09	%

Interest-bearing deposits	$	1,566,106	$	1,835	0.47	%	$	1,407,645	$	1,140	0.33	%	$	941,856	$	600	0.26	%
Time deposits		527,719		1,156	0.88	%		511,119		1,093	0.87	%		425,216		744	0.70	%
Short-term borrowings		17,936		19	0.42	%		25,188		24	0.39	%		50,122		18	0.14	%
Federal Home Loan Bank advances (4)		76,739		354	1.85	%		114,356		403	1.43	%		128,956		416	1.30	%
Other borrowings		33,530		347	4.15	%		74,761		683	3.71	%		100,008		824	3.31	%
Junior subordinated debentures		72,000		696	3.88	%		33,497		333	4.03	%		33,396		302	3.64	%
Total interest-bearing liabilities	$	2,294,030	$	4,407	0.77	%	$	2,166,566	$	3,676	0.69	%	$	1,679,554	$	2,904	0.70	%

Net interest income / spread (1)			$	30,248	3.60	%			$	29,619	3.70	%			$	22,373	3.39	%
Net interest margin (2)					3.54	%					3.65	%					3.40	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.81	%					3.90	%					3.62	%


	For the Six Months Ended
	June 30, 2017						June 30, 2016
	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	$	14,917	$	53	0.72	%	$	15,703	$	23	0.29	%
Interest-bearing deposits at financial institutions		89,394		418	0.94	%		45,691		123	0.54	%
Securities (1)		567,101		10,543	3.75	%		528,034		9,257	3.53	%
Restricted investment securities		13,549		262	3.90	%		14,156		264	3.75	%
Loans (1)		2,443,608		56,741	4.68	%		1,866,941		40,454	4.36	%
Total earning assets (1)	$	3,128,569	$	68,017	4.38	%	$	2,470,525	$	50,121	4.08	%

Interest-bearing deposits	$	1,486,876	$	2,974	0.40	%	$	933,551	$	1,214	0.26	%
Time deposits		519,419		2,249	0.87	%		412,410		1,420	0.69	%
Short-term borrowings		21,562		43	0.40	%		68,331		61	0.18	%
Federal Home Loan Bank advances		95,548		758	1.60	%		128,696		858	1.34	%
Other borrowings		33,514		680	4.09	%		100,873		1,650	3.29	%
Junior subordinated debentures		73,381		1,379	3.79	%		34,023		606	3.58	%
Total interest-bearing liabilities	$	2,230,300	$	8,083	0.73	%	$	1,677,884	$	5,809	0.70	%

Net interest income / spread (1)			$	59,934	3.65	%			$	44,312	3.38	%
Net interest margin (2)					3.59	%					3.39	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.86	%					3.61	%


(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) See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3) TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
		2017			2017			2016			2016			2016

	(dollars in thousands, except per share data)

ROLLFORWARD OF ALLOWANCE FOR LOAN/LEASE LOSSES
Beginning balance	$	32,059		$	30,757		$	28,827		$	28,097		$	27,395
Provision charged to expense		2,023			2,105			2,599			1,608			1,198
Loans/leases charged off		(851	)		(893	)		(755	)		(987	)		(634	)
Recoveries on loans/leases previously charged off		126			90			86			109			138
Ending balance	$	33,357		$	32,059		$	30,757		$	28,827		$	28,097


NONPERFORMING ASSETS
Nonaccrual loans/leases	$	13,217		$	14,205		$	13,919		$	14,371		$	10,737
Accruing loans/leases past due 90 days or more		424			955			967			392			86
Troubled debt restructures - accruing		6,915			6,229			6,347			1,825			1,753
Total nonperforming loans/leases		20,556			21,389			21,233			16,588			12,576
Other real estate owned		5,174			5,625			5,523			5,808			6,179
Other repossessed assets		123			285			202			353			154
Total nonperforming assets	$	25,853		$	27,299		$	26,958		$	22,749		$	18,909


ASSET QUALITY RATIOS
Nonperforming assets / total assets		0.75	%		0.81	%		0.82	%		0.69	%		0.70	%
Allowance / total loans/leases (1)		1.31	%		1.32	%		1.28	%		1.22	%		1.46	%
Allowance / nonperforming loans/leases (1)		162.27	%		149.89	%		144.85	%		173.78	%		223.42	%
Net charge-offs as a % of average loans/leases		0.03	%		0.03	%		0.03	%		0.04	%		0.03	%


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

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

			For the Quarter Ended									For the Six Months Ended
			June 30,			March 31,			June 30,			June 30,			June 30,
		SELECT FINANCIAL DATA - SUBSIDIARIES		2017			2017			2016			2017			2016
			(dollars in thousands)

		TOTAL ASSETS

		Quad City Bank and Trust (1)	$	1,400,308		$	1,442,952		$	1,390,025
		m2 Lease Funds, LLC		215,689			210,062			207,334
		Cedar Rapids Bank and Trust		993,769			929,111			904,367
		Community State Bank		642,761			608,431			N/A
		Rockford Bank and Trust		426,160			398,455			402,157

		TOTAL DEPOSITS

		Quad City Bank and Trust (1)	$	1,205,516		$	1,261,075		$	1,049,049
		Cedar Rapids Bank and Trust		789,750			733,227			690,377
		Community State Bank		554,767			527,171			N/A
		Rockford Bank and Trust		346,893			312,817			296,613

		TOTAL LOANS & LEASES

		Quad City Bank and Trust (1)	$	1,045,625		$	1,015,241		$	968,905
		m2 Lease Funds, LLC		214,253			208,459			205,883
		Cedar Rapids Bank and Trust		728,562			673,431			648,727
		Community State Bank		442,845			427,365			N/A
		Rockford Bank and Trust		336,534			319,813			305,141

		TOTAL LOANS & LEASES / TOTAL ASSETS

		Quad City Bank and Trust (1)		75	%		70	%		70	%
		Cedar Rapids Bank and Trust		73	%		72	%		72	%
		Community State Bank		69	%		70	%		N/A
		Rockford Bank and Trust		79	%		80	%		76	%

		ALLOWANCE AS A PERCENTAGE OF TOTAL LOANS/LEASES

		Quad City Bank and Trust (1)		1.28	%		1.34	%		1.31	%
		m2 Lease Funds, LLC		1.60	%		1.72	%		1.80	%
		Cedar Rapids Bank and Trust		1.58	%		1.66	%		1.65	%
		Community State Bank (2)		0.71	%		0.53	%		N/A
		Rockford Bank and Trust		1.59	%		1.58	%		1.53	%

		RETURN ON AVERAGE ASSETS

		Quad City Bank and Trust (1)		1.26	%		1.22	%		1.24	%		1.24	%		1.10	%
		Cedar Rapids Bank and Trust		1.23	%		1.33	%		1.46	%		1.28	%		1.42	%
		Community State Bank (3)		1.26	%		1.30	%		N/A			1.28	%		N/A
		Rockford Bank and Trust		0.82	%		0.86	%		0.80	%		0.84	%		0.73	%

		NET INTEREST MARGIN PERCENTAGE (4)

		Quad City Bank and Trust (1)		3.63	%		3.71	%		3.66	%		3.67	%		3.63	%
		Cedar Rapids Bank and Trust		3.66	%		3.75	%		3.77	%		3.70	%		3.77	%
		Community State Bank (5)		5.06	%		5.37	%		N/A			5.21	%		N/A
		Rockford Bank and Trust		3.40	%		3.43	%		3.49	%		3.41	%		3.52	%

		ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
		INTEREST MARGIN, NET

		Cedar Rapids Bank and Trust	$	6		$	9		$	51		$	15		$	130
		Community State Bank		1,580			2,054			N/A			3,635			N/A
		QCR Holdings, Inc. (6)		(33	)		(33	)		(34	)		(66	)		(68	)

(1	)	Quad City Bank and Trust figures include m2 Lease Funds, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Lease Funds, LLC
		is also presented separately for certain (applicable) measurements.
(2	)	Upon acquisition and per GAAP, acquired loans are recorded at market value, which eliminated the allowance and impacts this ratio.
(3	)	Community State Bank's return on average assets includes acquisition costs and various purchase accounting adjustments.
(4	)	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.
(5	)	Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest
		margin would have been 3.95% for the quarter ended June 30, 2017 and 3.83% for the quarter ended March 31, 2017.
(6	)	Relates to the trust preferred securities acquired as part of the Community National Bank acquisition in 2013.

QCR HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)

	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
GAAP TO NON-GAAP RECONCILIATIONS		2017			2017			2016			2016			2016
				(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)

Stockholders' equity (GAAP)	$	305,083		$	295,840		$	286,041		$	280,857		$	275,117
Less: Intangible assets		20,030			20,261			22,522			22,755			4,595
Tangible common equity (non-GAAP)	$	285,053		$	275,579		$	263,519		$	258,102		$	270,522

Total assets (GAAP)	$	3,457,187		$	3,381,013		$	3,301,944		$	3,280,986		$	2,683,434
Less: Intangible assets		20,030			20,261			22,522			22,755			4,595
Tangible assets (non-GAAP)	$	3,437,157		$	3,360,752		$	3,279,422		$	3,258,231		$	2,678,839

Tangible common equity to tangible assets ratio (non-GAAP)		8.29	%		8.20	%		8.04	%		7.92	%		10.10	%


	For the Quarter Ended															For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
CORE NET INCOME (2)		2017			2017			2016			2016			2016			2017			2016

Net income (GAAP)	$	8,766		$	9,185		$	8,529		$	6,108		$	6,676		$	17,951		$	13,050

Less nonrecurring items (post-tax) (3):
Income:
Securities gains, net	$	25		$	-		$	(23	)	$	2,764		$	12		$	25		$	245
Total nonrecurring income (non-GAAP)	$	25		$	-		$	(23	)	$	2,764		$	12		$	25		$	245

Expense:
Losses on debt extinguishment, net	$	-		$	-		$	232		$	2,689		$	-		$	-		$	54
Acquisition costs (4)		-			-			26			1,506			231			-			231
Total nonrecurring expense (non-GAAP)	$	-		$	-		$	258		$	4,195		$	231		$	-		$	285

Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (2)	$	8,741		$	9,185		$	8,810		$	7,539		$	6,895		$	17,926		$	13,090

CORE EARNINGS PER COMMON SHARE (2)

Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above)	$	8,741		$	9,185		$	8,810		$	7,539		$	6,895		$	17,926		$	13,090

Weighted average common shares outstanding		13,170,283			13,133,382			13,087,592			13,066,777			12,335,077			13,151,833			12,064,349
Weighted average common and common equivalent shares outstanding		13,516,592			13,488,417			13,323,883			13,269,703			12,516,474			13,502,505			12,235,212

Core earnings per common share (non-GAAP):
Basic	$	0.66		$	0.70		$	0.67		$	0.58		$	0.56		$	1.36		$	1.09
Diluted	$	0.65		$	0.68		$	0.66		$	0.57		$	0.55		$	1.33		$	1.07

CORE RETURN ON AVERAGE ASSETS (2)

Core net income attributable to QCR Holdings, Inc. common stockholders (non-GAAP) (from above)	$	8,741		$	9,185		$	8,810		$	7,539		$	6,895		$	17,926		$	13,090

Average Assets	$	3,378,195		$	3,274,713		$	3,277,814		$	2,865,947		$	2,640,678		$	3,326,454		$	2,621,514

Core return on average assets (annualized) (non-GAAP)		1.04	%		1.12	%		1.08	%		1.05	%		1.04	%		1.08	%		1.00	%

NET INTEREST MARGIN (TEY) (5)

Net interest income (GAAP)	$	28,047		$	27,669		$	29,280		$	23,631		$	21,009		$	55,716		$	41,606

Plus: Tax equivalent adjustment (6)		2,201			1,950			1,727			1,587			1,364			4,218			2,706

Net interest income - tax equivalent (Non-GAAP)	$	30,248		$	29,619		$	31,007		$	25,218		$	22,373		$	59,934		$	44,312

Average earning assets	$	3,180,779		$	3,076,356		$	3,069,122		$	2,703,162		$	2,484,721		$	3,128,569		$	2,470,525

Net interest margin (GAAP)		3.54	%		3.65	%		3.80	%		3.48	%		3.40	%		3.59	%		3.39	%
Net interest margin (TEY) (Non-GAAP)		3.81	%		3.90	%		4.02	%		3.71	%		3.62	%		3.86	%		3.61	%

EFFICIENCY RATIO (7)

Noninterest expense (GAAP)	$	21,405		$	21,273		$	22,308		$	24,480		$	17,744		$	42,678		$	34,698

Net interest income (GAAP)	$	28,047		$	27,669		$	29,280		$	23,631		$	21,009		$	55,716		$	41,606
Noninterest income (GAAP)		6,782			7,284			7,029			10,423			6,762			14,066			13,585
Total income	$	34,829		$	34,953		$	36,309		$	34,054		$	27,771		$	69,782		$	55,191

Efficiency ratio (noninterest expense/total income) (Non-GAAP)		61.46	%		60.86	%		61.44	%		71.89	%		63.89	%		61.16	%		62.87	%


(1) This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in
common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures.
(2) Core net income, core net income attributable to QCR Holdings, Inc. common stockholders, core earnings per common share and core return on average assets are non-GAAP financial measures. The Company's
management believes that these measurements are important to investors as they exclude non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods.
In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net income, which is the most directly comparable GAAP financial measure.
(3) Nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 35%.
(4) Acquisition costs were analyzed individually for deductibility. Presented amounts are tax-effected accordingly.
(5) Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard
industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most
directly comparable GAAP financial measure.
(6) 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.
(7) Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the
applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.

QCR Holdings, Inc. Announces Net Income of $8.8 Million for the Second Quarter of 2017 And $18.0 Million Year-to-Date

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