QCR Holdings, Inc. Announces Second Quarter 2022 Results

来源: Nasdaq GlobeNewswire / 26 7月 2022 15:05:02 America/Chicago

Second Quarter 2022 Highlights

Completed the acquisition of Guaranty Federal Bancshares, Inc. adding approximately $1.3 billion in assets, $808 million in loans and $1.1 billion in deposits
Reported net income of $15.2 million, or $0.87 per diluted share
Adjusted net income (non-GAAP) of $30.4 million, or $1.73 per diluted share
Acquisition/Post-acquisition related expenses and CECL Day 2 provision totaled $15.5 million, post-tax, or $0.88 per diluted share
Net Interest Margin (“NIM”) of 3.53% and Adjusted NIM (TEY)(non-GAAP) of 3.74% expanded significantly from the prior quarter by 23 and 24 basis points, respectively
Capital Markets Revenue from Swap Fees of $13.0 million doubled from the first quarter of 2022
Annualized loan and lease growth of 14.0% for the quarter, excluding loan balances acquired from the Guaranty Bank transaction and SBA Paycheck Protection Program (“PPP”) loans (non-GAAP)
Repurchased 602,500 shares at an average price of $54.80 per share

MOLINE, Ill., July 26, 2022 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $15.2 million and diluted earnings per share (“EPS”) of $0.87 for the second quarter of 2022, compared to net income of $23.6 million and diluted EPS of $1.49 for the first quarter of 2022. Included in the second quarter of 2022 results were $5.7 million of acquisition/post-acquisition related expenses and $9.8 million of CECL Day 2 provision, both post-tax. The CECL Day 2 provision was required to establish the initial credit loss allowances for the acquired non-PCD loan portfolio and off-balance sheet exposure as a result of the acquisition of Guaranty Federal Bancshares, which closed on April 1, 2022.



$ in millions (except per share data)	For the Quarter Ended June 30, 2022			Per Diluted Share
Reported Net Income (GAAP)	$	15.2		$	0.87
Acquisition/Post-Acquisition Related Expenses (Post-Tax)	$	5.7		$	0.32
CECL Day 2 Provision (Post-Tax)*	$	9.8		$	0.56
Other (Post-Tax)	$	(0.3	)	$	(0.02	)
Adjusted Net Income (non-GAAP, see below)	$	30.4		$	1.73

*CECL Day 2 provision to establish the initial non-PCD loan and off-balance sheet exposure credit loss allowances under ASU 2016-13, Financial Instruments – Credit Losses, for the acquired loan portfolio.

Excluding acquisition/post-acquisition related expenses, the CECL Day 2 provision and other nonrecurring items, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the second quarter of 2022 were $30.4 million and $1.73, respectively. For the first quarter of 2022, adjusted net income (non-GAAP) was $24.4 million and adjusted diluted EPS (non-GAAP) was $1.54. For the second quarter of 2021, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $22.5 million and $1.40, respectively.

	For the Quarter Ended
	June 30,		March 31,		June 30,
$ in millions (except per share data)	2022		2022		2021
Net Income	$	15.2	$	23.6	$	22.3
Diluted EPS	$	0.87	$	1.49	$	1.39
Adjusted Net Income (non-GAAP)*	$	30.4	$	24.4	$	22.5
Adjusted Diluted EPS (non-GAAP)*	$	1.73	$	1.54	$	1.40

*Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

“We delivered another strong quarter of net income, driven by exceptional loan growth, expanding net interest margin and well managed expenses,” said Larry J. Helling, Chief Executive Officer. “Building on the momentum we saw in the first quarter, we generated robust lending activity again in the second quarter with annualized loan growth of 14.0% after excluding the impact of the acquired portfolio and PPP activity. Adjusting for the nonrecurring items, primarily related to the closing of the Guaranty Bank acquisition, we increased core earnings by $6.0 million on a linked-quarter basis, generating an adjusted ROAA of 1.66%”

“On April 1st, we successfully completed the acquisition of Guaranty Federal Bancshares, Inc. and merged Guaranty Bank into Springfield First Community Bank with the combined bank retaining the Guaranty Bank name. We’re eager to continue to grow in the vibrant southwest Missouri region and we look forward to serving our clients and our communities.”

Net Interest Income of $59.4 Million
NIM Expanded by 23 Basis Points from the Prior Quarter

Net interest income for the second quarter of 2022 totaled $59.4 million, compared to $45.7 million for the first quarter of 2022 and $43.5 million for the second quarter of 2021. The increase in net interest income was due to an increase in average earning assets, primarily attributable to the Guaranty Bank transaction, increased organic loan growth on a linked-quarter basis, and strong NIM expansion. Adjusted net interest income (non-GAAP) during the quarter was $61.1 million, an increase of $12.6 million, or 25.9%, from the prior quarter. Adjusted net interest income (non-GAAP) was $45.7 million for the second quarter of 2021. Acquisition-related net accretion totaled $1.7 million for the second quarter of 2022, up from $118 thousand in the first quarter of 2022 and $291 thousand for the second quarter of 2021.

In the second quarter, NIM was 3.53% and tax-equivalent yield (“TEY”) basis (non-GAAP) NIM was 3.74%, compared to 3.30% and 3.50% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.64%, up 14 basis points from the prior quarter. The increase in Adjusted NIM (non-GAAP) during the quarter was primarily due to the impact of multiple rate increases on our asset-sensitive balance sheet as well as the addition of Guaranty Bank.

	For the Quarter Ended
	June 30,		March 31,		June 30,
	2022		2022		2021
NIM	3.53	%	3.30	%	3.28	%
NIM (TEY)(non-GAAP) *	3.74	%	3.50	%	3.46	%
Adjusted NIM (TEY)(non-GAAP) *	3.64	%	3.50	%	3.44	%
Adjusted NIM ex. PPP (TEY)(non-GAAP)*	3.63	%	3.46	%	3.32	%

* See GAAP to non-GAAP reconciliations

“Excluding the impact of acquisition-related net accretion and PPP fees, we significantly expanded our adjusted NIM during the second quarter by 17 basis points” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “Our balance sheet is well positioned to continue to drive strong NIM expansion in this rapidly rising rate environment.”

Annualized Loan and Lease Growth of 14.0%, Excluding the Guaranty Bank Acquisition and PPP Loans (non-GAAP)

During the second quarter of 2022, the Company’s loans and leases increased $970.0 million to a total of $5.8 billion. Excluding the initial loan balances from the Guaranty Bank acquisition and PPP loans (non-GAAP), loan and lease growth during the quarter was $168.7 million, or 14.0% on an annualized basis. Core deposits (excluding brokered deposits) increased by $973.2 million during the quarter, due to the Guaranty Bank acquisition.

“Our continued robust loan growth in the second quarter was driven by strength in our traditional commercial lending, leasing and our Specialty Finance business,” added Helling. “This is a testament to the economic resiliency in our markets as well as our relationship-based community banking model, emphasizing the importance of strong relationships with new and existing clients. Given our current pipeline, we are reaffirming our targeted organic loan growth to between 10% and 12% for the full year.”

Noninterest Income of $22.8 Million

Noninterest income for the second quarter of 2022 totaled $22.8 million, compared to $15.6 million for the first quarter of 2022. The increase was primarily due to a $6.6 million increase in capital markets revenue from swap fees as well as the Guaranty Bank acquisition. Wealth management revenue was $3.5 million for the quarter, down 12.9% from the first quarter of 2022, primarily due to increased market volatility.

“Capital markets revenue totaled $13.0 million for the quarter, which was within our guidance range,” added Gipple. “Given our solid pipeline and recognizing timing continues to be impacted by project delays caused by ongoing supply chain disruptions and inflationary pressures, we continue to expect this source of fee income to be in a range of $13 to $15 million per quarter for the remainder of 2022.”

Noninterest Expenses of $54.2 Million, Including Acquisition/Post-Acquisition Related Expenses

Noninterest expense for the second quarter of 2022 totaled $54.2 million, including acquisition/post-acquisition related expenses of $6.8 million, compared to $38.3 million for the first quarter of 2022 and $35.7 million for the second quarter of 2021. The linked-quarter increase was primarily due to the inclusion of expenses from Guaranty Bank and expenses related to the acquisition. Excluding these acquisition/post-acquisition related costs, noninterest expense for the second quarter was $47.5 million.

Asset Quality Reflects Addition of Guaranty Bank

Nonperforming assets (“NPAs”) totaled $24.0 million at the end of the second quarter, an increase of $21.3 million over the first quarter of 2022, primarily the result of the Guaranty Bank acquisition and two legacy lending relationships. The ratio of NPAs to total assets was 0.33% on June 30, 2022, compared to 0.04% on March 31, 2022, and 0.17% on June 30, 2021. In addition, the Company’s criticized loans and classified loans to total loans and leases at June 30, 2022 were 2.37% and 1.43%, respectively, compared to 2.45% and 1.13% as of March 31, 2022.

The Company recorded an $11.2 million provision for credit losses in the second quarter of 2022, due solely to the CECL Day 2 provision of $12.4 million (pre-tax) as a result of the Guaranty Bank acquisition. As of June 30, 2022, the ACL on total loans/leases was 1.59%, compared to 1.55% as of March 30, 2022.

Continued Strong Capital Levels

As of June 30, 2022, the Company’s total risk-based capital ratio was 13.02%, the common equity tier 1 ratio was 9.17% and the tangible common equity to tangible assets ratio (non-GAAP) was 8.11%. By comparison, these respective ratios were 14.50%, 10.61% and 9.60% as of March 31, 2022. Total risk-based capital and the common equity tier 1 were both impacted by expected initial dilution from the Guaranty Bank acquisition. The Company’s accumulated other comprehensive income (“AOCI”) declined $24.3 million during the second quarter due to a decrease in the value of its available for sale securities portfolio and certain derivatives resulting from ongoing increases in interest rates during the quarter. While AOCI reduced the Company’s tangible common equity (non-GAAP), solid earnings partially offset this impact, which led to a decline of only 8.4% in tangible book value (non-GAAP).

During the second quarter, the Company purchased and retired 602,500 shares of its common stock at an average price of $54.80 per share as the Company finished repurchases under the original 2020 authorized plan and began repurchases under the May 2022 authorized plan. Under the 2020 share repurchase program, the Company repurchased 794,000 shares in total at an average price of $50.60 per share. The 2022 share repurchase program, announced during the second quarter of 2022, authorized an approximate 1,500,000 additional shares to be repurchased. The Company repurchased 280,000 shares during the quarter and has approximately 1,220,000 shares remaining under its 2022 share repurchase program.

Focus on Three Strategic Long-Term Initiatives

As part of the Company’s ongoing efforts to grow earnings and drive attractive long-term returns for shareholders, it continues to operate under three key strategic long-term initiatives:

Generate organic loan and lease growth of 9% per year, funded by core deposits;
Grow fee-based income by at least 6% per year; and
Limit annual operating expense growth to 5% per year.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, July 27, 2022, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through August 3, 2022. The replay access information is 877-344-7529 (international 412-317-0088); access code 7416915. A webcast of the teleconference can be accessed at the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly-owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, Springfield First Community Bank, based in Springfield, Missouri, was acquired by the Company in 2018, and Guaranty Bank, also based in Springfield, Missouri, was acquired by the Company and merged with Springfield First Community Bank on April 1, 2022, with the combined entity operating under the Guaranty Bank name. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. Quad City Bank & Trust Company offers equipment loans and leases to businesses through its wholly-owned subsidiary, m2 Equipment Finance, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. Including the Guaranty Bank acquisition, the Company now has 40 locations in Iowa, Missouri, Wisconsin and Illinois. As of June 30, 2022, the Company had approximately $7.4 billion in assets, $5.8 billion in loans and $5.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

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, state, national and international economies(including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof, or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB; (iv) changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; and (xiii) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. 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.

Contacts:
Todd A. Gipple
President
Chief Operating Officer
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com


QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)
	As of
	June 30,		March 31,		December 31,		September 30,		June 30,
	2022		2022		2021		2021		2021

	(dollars in thousands)

CONDENSED BALANCE SHEET

Cash and due from banks	$	92,379	$	50,540	$	37,490	$	57,310	$	55,598
Federal funds sold and interest-bearing deposits		56,532		66,390		87,662		70,826		88,780
Securities, net of allowance for credit losses		879,918		823,311		810,215		828,719		810,445
Net loans/leases		5,705,478		4,753,082		4,601,411		4,519,060		4,338,811
Intangibles		18,333		8,856		9,349		9,857		10,365
Goodwill		137,607		74,066		74,066		74,066		74,066
Derivatives		97,455		107,326		222,220		198,393		193,395
Other assets		405,239		292,248		253,719		256,277		255,952
Total assets	$	7,392,941	$	6,175,819	$	6,096,132	$	6,014,508	$	5,827,412

Total deposits	$	5,820,657	$	4,839,689	$	4,922,772	$	4,871,828	$	4,688,935
Total borrowings		583,166		443,270		170,805		183,514		198,908
Derivatives		113,305		116,193		225,135		201,450		196,092
Other liabilities		132,675		108,743		100,410		107,902		113,001
Total stockholders' equity		743,138		667,924		677,010		649,814		630,476
Total liabilities and stockholders' equity	$	7,392,941	$	6,175,819	$	6,096,132	$	6,014,508	$	5,827,412

ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial - revolving	$	322,258	$	263,441	$	248,483	$	175,155	$	182,882
Commercial and industrial - other		1,403,689		1,374,221		1,346,602		1,465,580		1,505,384
Total commercial and industrial		1,725,947		1,637,662		1,595,085		1,640,735		1,688,266
Commercial real estate, owner occupied		628,565		439,257		421,701		434,014		427,734
Commercial real estate, non-owner occupied		889,530		679,898		646,500		644,850		618,879
Construction and land development		1,080,372		863,116		918,571		852,418		708,289
Multi-family		860,742		711,682		600,412		529,727		466,804
Direct financing leases		40,050		43,330		45,191		50,237		56,153
1-4 family real estate		473,141		379,613		377,361		376,067		382,142
Consumer		99,556		73,310		75,311		71,682		69,438
Total loans/leases	$	5,797,903	$	4,827,868	$	4,680,132	$	4,599,730	$	4,417,705
Less allowance for credit losses		92,425		74,786		78,721		80,670		78,894
Net loans/leases	$	5,705,478	$	4,753,082	$	4,601,411	$	4,519,060	$	4,338,811

ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities	$	20,448	$	21,380	$	23,328	$	23,689	$	14,670
Municipal securities		710,638		667,245		639,799		649,486		641,603
Residential mortgage-backed and related securities		81,247		86,381		94,323		100,744		106,139
Asset backed securities		19,956		23,233		27,124		30,607		31,778
Other securities		47,827		25,270		25,839		24,367		16,429
Total securities	$	880,116	$	823,509	$	810,413	$	828,893	$	810,619
Less allowance for credit losses		198		198		198		174		174
Net securities	$	879,918	$	823,311	$	810,215	$	828,719	$	810,445

ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits	$	1,514,005	$	1,275,493	$	1,268,788	$	1,342,273	$	1,258,885
Interest-bearing demand deposits		3,758,566		3,181,685		3,232,633		3,086,711		2,976,696
Time deposits		540,074		382,268		421,348		441,743		452,171
Brokered deposits		8,012		243		3		1,101		1,183
Total deposits	$	5,820,657	$	4,839,689	$	4,922,772	$	4,871,828	$	4,688,935

ANALYSIS OF BORROWINGS
Borrowings mix:
Overnight FHLB advances (1)	$	400,000	$	290,000	$	15,000	$	30,000	$	40,000
Other short-term borrowings		1,070		1,190		3,800		1,600		7,070
Subordinated notes		133,562		113,890		113,850		113,811		113,771
Junior subordinated debentures		48,534		38,190		38,155		38,103		38,067
Total borrowings	$	583,166	$	443,270	$	170,805	$	183,514	$	198,908

(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 1.45%.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

	For the Quarter Ended
	June 30,		March 31,			December 31,			September 30,			June 30,
	2022			2022			2021			2021			2021

	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income	$	68,205	$	51,062		$	52,020		$	51,667		$	48,903
Interest expense		8,805		5,329			5,507			5,438			5,387
Net interest income		59,400		45,733			46,513			46,229			43,516
Provision for credit losses (1)		11,200		(2,916	)		(3,227	)		-			-
Net interest income after provision for loan/lease losses	$	48,200	$	48,649		$	49,740		$	46,229		$	43,516


Trust department fees	$	2,497	$	2,963		$	2,843		$	2,714		$	2,848
Investment advisory and management fees		983		1,036			1,047			1,054			1,039
Deposit service fees		2,223		1,555			1,644			1,588			1,492
Gain on sales of residential real estate loans		809		493			922			954			1,184
Gain on sales of government guaranteed portions of loans		-		19			227			-			-
Swap fee income/capital markets revenue		13,004		6,422			12,982			24,885			9,568
Securities gains (losses), net		-		-			-			-			(88	)
Earnings on bank-owned life insurance		350		346			470			446			451
Debit card fees		1,499		1,007			1,072			1,085			1,084
Correspondent banking fees		244		277			266			265			269
Other		1,173		1,515			1,512			1,661			1,449
Total noninterest income	$	22,782	$	15,633		$	22,985		$	34,652		$	19,296


Salaries and employee benefits	$	29,972	$	23,627		$	24,809		$	28,207		$	23,044
Occupancy and equipment expense		5,978		3,937			3,723			4,122			3,965
Professional and data processing fees		4,365		3,671			3,866			3,568			3,702
Acquisition costs		1,973		1,851			624			-			-
Post-acquisition compensation, transition and integration costs		4,796		-			-			-			-
Disposition costs		-		-			5			-			-
FDIC insurance, other insurance and regulatory fees		1,394		1,310			1,316			1,108			986
Loan/lease expense		761		267			606			308			457
Net cost of (income from) and gains/losses on operations of other real estate		59		(1	)		-			(1,346	)		(113	)
Advertising and marketing		1,198		761			1,679			1,095			853
Bank service charges		610		541			553			525			572
Correspondent banking expense		213		199			200			201			198
Intangibles amortization		787		493			508			508			508
Other		2,142		1,669			1,523			3,091			1,503
Total noninterest expense	$	54,248	$	38,325		$	39,412		$	41,387		$	35,675

Net income before income taxes	$	16,734	$	25,957		$	33,313		$	39,494		$	27,137
Federal and state income tax expense		1,492		2,333			6,304			7,929			4,788
Net income	$	15,242	$	23,624		$	27,009		$	31,565		$	22,349

Basic EPS	$	0.88	$	1.51		$	1.73		$	2.02		$	1.41
Diluted EPS	$	0.87	$	1.49		$	1.71		$	1.99		$	1.39


Weighted average common shares outstanding		17,345,324		15,625,112			15,582,276			15,635,123			15,813,932
Weighted average common and common equivalent shares outstanding		17,549,107		15,852,256			15,838,246			15,869,798			16,045,239

(1) Provision for credit losses for the quarter ended June 30, 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.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

	For Six Months Ended
	June 30,		June 30,
	2022		2021

	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income	$	119,267	$	96,468
Interest expense		14,134		10,977
Net interest income		105,133		85,491
Provision for credit losses (1)		8,284		6,713
Net interest income after provision for loan/lease losses	$	96,849	$	78,778


Trust department fees	$	5,460	$	5,649
Investment advisory and management fees		2,019		1,979
Deposit service fees		3,778		2,900
Gain on sales of residential real estate loans		1,302		2,521
Gain on sales of government guaranteed portions of loans		19		-
Swap fee income/capital markets revenue		19,426		23,125
Securities gains (losses), net		-		(88	)
Earnings on bank-owned life insurance		696		922
Debit card fees		2,506		2,059
Correspondent banking fees		521		583
Other		2,688		3,135
Total noninterest income	$	38,415	$	42,785


Salaries and employee benefits	$	53,599	$	47,891
Occupancy and equipment expense		9,915		8,073
Professional and data processing fees		8,036		7,145
Acquisition costs		3,824		-
Post-acquisition compensation, transition and integration costs		4,796		-
Disposition costs		-		8
FDIC insurance, other insurance and regulatory fees		2,704		2,051
Loan/lease expense		1,028		757
Net cost of (income from) and gains/losses on operations of other real estate		58		(74	)
Advertising and marketing		1,959		1,480
Bank service charges		1,151		1,095
Correspondent banking expense		412		398
Intangibles amortization		1,280		1,016
Other		3,811		3,063
Total noninterest expense	$	92,573	$	72,903

Net income before income taxes	$	42,691	$	48,660
Federal and state income tax expense		3,825		8,329
Net income	$	38,866	$	40,331

Basic EPS	$	2.36	$	2.55
Diluted EPS	$	2.33	$	2.52


Weighted average common shares outstanding		16,485,218		15,808,788
Weighted average common and common equivalent shares outstanding		16,700,682		16,035,394

(1) Provision for credit losses for the six months ended June 30, 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.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

	As of and for the Quarter Ended															For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2022			2022			2021			2021			2021			2022			2021

	(dollars in thousands, except per share data)

COMMON SHARE DATA
Common shares outstanding		17,064,347			15,579,605			15,613,460			15,590,428			15,763,522
Book value per common share (1)	$	43.55		$	42.87		$	43.36		$	41.68		$	40.00
Tangible book value per common share (Non-GAAP) (2)	$	34.41		$	37.55		$	38.02		$	36.30		$	34.64
Closing stock price	$	53.99		$	56.59		$	56.00		$	51.44		$	48.09
Market capitalization	$	921,304		$	881,650		$	874,354		$	801,972		$	758,068
Market price / book value		123.97	%		132.00	%		129.15	%		123.42	%		120.24	%
Market price / tangible book value		156.90	%		150.71	%		147.30	%		141.72	%		138.83	%
Earnings per common share (basic) LTM (3)	$	6.14		$	6.68		$	6.30		$	5.73		$	4.81
Price earnings ratio LTM (3)	8.79 x			8.47 x			8.88 x			8.98 x			10.00 x
TCE / TA (Non-GAAP) (4)		8.11	%		9.60	%		9.87	%		9.54	%		9.51	%


CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance	$	667,924		$	677,010		$	649,814		$	630,476		$	608,719
Net income		15,242			23,624			27,009			31,565			22,349
Other comprehensive income (loss), net of tax		(24,286	)		(27,340	)		295			(2,546	)		4,179
Common stock cash dividends declared		(1,059	)		(938	)		(935	)		(946	)		(951	)
Issuance of 2,071,291 shares of
common stock as a result of the acquisition of Guaranty Federal Bancshares		117,214			-			-			-			-
Repurchase and cancellation of shares of common
stock as a result of a share repurchase program		(33,016	)		(4,416	)		-			(9,367	)		(4,800	)
Other (5)		1,119			(16	)		827			632			980
Ending balance	$	743,138		$	667,924		$	677,010		$	649,814		$	630,476


REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio		13.02	%		14.50	%		14.77	%		14.64	%		14.72	%
Tier 1 risk-based capital ratio		9.86	%		11.27	%		11.46	%		11.26	%		11.26	%
Tier 1 leverage capital ratio		9.61	%		10.78	%		10.46	%		10.28	%		10.29	%
Common equity tier 1 ratio		9.17	%		10.61	%		10.76	%		10.55	%		10.52	%


KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)		0.83	%		1.55	%		1.76	%		2.11	%		1.56	%		1.16	%		1.41	%
Return on average total equity (annualized)		7.74	%		13.81	%		16.23	%		19.30	%		14.33	%		10.55	%		13.14	%
Net interest margin		3.53	%		3.30	%		3.29	%		3.36	%		3.28	%		3.43	%		3.27	%
Net interest margin (TEY) (Non-GAAP)(7)		3.74	%		3.50	%		3.50	%		3.56	%		3.46	%		3.63	%		3.45	%
Efficiency ratio (Non-GAAP) (8)		66.01	%		62.45	%		56.71	%		51.17	%		56.80	%		64.49	%		56.83	%
Gross loans and leases / total assets		78.42	%		78.17	%		76.77	%		76.48	%		75.81	%		78.42	%		76.10	%
Gross loans and leases / total deposits		99.61	%		99.76	%		95.07	%		94.41	%		94.22	%		99.61	%		94.22	%
Effective tax rate		8.92	%		8.99	%		18.92	%		20.08	%		17.64	%		8.96	%		17.12	%
Full-time equivalent employees (9)		968			749			726			724			725			968			725


AVERAGE BALANCES
Assets	$	7,324,470		$	6,115,127		$	6,121,446		$	5,982,583		$	5,761,314		$	6,723,137		$	5,704,151
Loans/leases		5,711,471			4,727,478			4,608,111			4,529,136			4,412,322			5,222,193			4,342,440
Deposits		5,867,444			4,903,354			4,983,869			4,779,876			4,709,732			5,388,062			4,669,533
Total stockholders' equity		788,204			684,126			665,698			654,186			624,000			736,452			614,061



(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 / 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.
(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) Increase at June 30, 2022 due to the acquisition of Guaranty Bank.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

ANALYSIS OF NET INTEREST INCOME AND MARGIN

	For the Quarter Ended
	June 30, 2022						March 31, 2022						June 30, 2021
	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	$	5,896	$	12	0.83	%	$	4,564	$	2	0.15	%	$	1,817	$	1	0.06	%
Interest-bearing deposits at financial institutions		67,254		169	1.01	%		69,328		35	0.20	%		88,396		35	0.16	%
Securities (1)		920,308		9,002	3.91	%		802,260		7,682	3.83	%		798,732		7,294	3.66	%
Restricted investment securities		37,166		485	5.16	%		22,183		281	5.06	%		19,614		238	4.79	%
Loans (1)		5,711,471		61,932	4.35	%		4,727,478		45,995	3.95	%		4,412,322		43,776	3.98	%
Total earning assets (1)	$	6,742,095	$	71,600	4.26	%	$	5,625,813	$	53,995	3.88	%	$	5,320,881	$	51,344	3.87	%

Interest-bearing deposits	$	3,791,595	$	4,478	0.47	%	$	3,228,083	$	2,338	0.29	%	$	2,978,382	$	2,050	0.28	%
Time deposits		529,675		1,047	0.79	%		398,897		799	0.81	%		440,599		1,184	1.08	%
Short-term borrowings		1,404		3	0.78	%		1,951		-	0.05	%		10,883		1	0.05	%
Federal Home Loan Bank advances		286,484		780	1.08	%		85,778		82	0.38	%		21,802		15	0.28	%
Subordinated debentures		133,529		1,816	5.44	%		113,868		1,554	5.46	%		115,339		1,570	5.45	%
Junior subordinated debentures		46,536		680	5.78	%		38,171		556	5.83	%		38,044		564	5.86	%
Total interest-bearing liabilities	$	4,789,223	$	8,804	0.74	%	$	3,866,748	$	5,329	0.56	%	$	3,605,049	$	5,384	0.60	%

Net interest income (1)			$	62,796					$	48,666					$	45,960
Net interest margin (2)					3.53	%					3.30	%					3.28	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.74	%					3.50	%					3.46	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.64	%					3.50	%					3.44	%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3)					3.63	%					3.46	%					3.32	%


	For the Six Months Ended
	June 30, 2022						June 30, 2021
	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	$	5,234	$	14	0.53	%	$	1,830	$	1	0.05	%
Interest-bearing deposits at financial institutions		68,285		204	0.60	%		102,343		71	0.14	%
Securities (1)		861,610		16,683	3.87	%		804,364		14,344	3.57	%
Restricted investment securities		29,716		766	5.13	%		18,843		456	4.81	%
Loans (1)		5,222,193		107,927	4.17	%		4,342,440		86,299	4.01	%
Total earning assets (1)	$	6,187,038	$	125,594	4.09	%	$	5,269,820	$	101,171	3.87	%

Interest-bearing deposits	$	3,511,396	$	6,816	0.39	%	$	2,979,835	$	4,036	0.27	%
Time deposits		464,647		1,846	0.80	%		444,297		2,625	1.19	%
Short-term borrowings		1,676		3	0.36	%		9,021		3	0.06	%
Federal Home Loan Bank advances		186,685		863	0.92	%		17,464		25	0.28	%
Subordinated debentures		123,753		3,370	5.45	%		117,014		3,164	5.41	%
Junior subordinated debentures		42,376		1,236	5.80	%		38,026		1,125	5.87	%
Total interest-bearing liabilities	$	4,330,533	$	14,134	0.66	%	$	3,605,657	$	10,978	0.61	%

Net interest income (1)			$	111,460					$	90,193
Net interest margin (2)					3.43	%					3.27	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.63	%					3.45	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.57	%					3.42	%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3)					3.55	%					3.27	%


(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) 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,
		2022			2022			2021			2021			2021

	(dollars in thousands, except per share data)

ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
Beginning balance	$	74,786		$	78,721		$	80,670		$	78,894		$	81,831
Initial ACL recorded for acquired PCD loans		5,902			-			-			-			-
Credit loss expense (1)		12,141			(3,849	)		(2,045	)		1,895			(141	)
Loans/leases charged off		(620	)		(456	)		(375	)		(287	)		(3,163	)
Recoveries on loans/leases previously charged off		216			370			471			168			367
Ending balance	$	92,425		$	74,786		$	78,721		$	80,670		$	78,894


NONPERFORMING ASSETS
Nonaccrual loans/leases (2)	$	23,574		$	2,744		$	2,759		$	6,818		$	8,230
Accruing loans/leases past due 90 days or more		268			4			1			14			57
Total nonperforming loans/leases		23,842			2,748			2,760			6,832			8,287
Other real estate owned		205			-			-			-			1,820
Other repossessed assets		-			-			-			-			-
Total nonperforming assets	$	24,047		$	2,748		$	2,760		$	6,832		$	10,107


ASSET QUALITY RATIOS
Nonperforming assets / total assets		0.33	%		0.04	%		0.05	%		0.11	%		0.17	%
ACL for loans and leases / total loans/leases		1.59	%		1.55	%		1.68	%		1.75	%		1.79	%
ACL for loans and leases / nonperforming loans/leases		387.66	%		2721.47	%		2852.21	%		1180.77	%		952.02	%
Net charge-offs as a % of average loans/leases		0.01	%		0.00	%		0.00	%		0.00	%		0.06	%



INTERNALLY ASSIGNED RISK RATING (3)
Special mention (rating 6)	$	54,558		$	63,622		$	62,510		$	58,634		$	51,613
Substandard (rating 7)		83,048			54,491			53,159			59,402			79,719
Doubtful (rating 8)		-			-			-			-			-
	$	137,606		$	118,113		$	115,669		$	118,036		$	131,332

Criticized loans (4)	$	137,606		$	118,113		$	115,669		$	118,036		$	131,332
Classified loans (5)		83,048			54,491			53,159			59,402			79,719

Criticized loans as a % of total loans/leases		2.37	%		2.45	%		2.47	%		2.57	%		2.97	%
Classified loans as a % of total loans/leases		1.43	%		1.13	%		1.14	%		1.29	%		1.80	%

(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) Nonaccrual loans for the quarter ended June 30, 2022 included $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.

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		2022			2022			2021			2022			2021

			(dollars in thousands)

		TOTAL ASSETS
		Quad City Bank and Trust (1)	$	2,122,852		$	2,195,894		$	2,059,634
		m2 Equipment Finance, LLC		289,451			281,666			255,338
		Cedar Rapids Bank and Trust		1,985,199			1,947,737			1,913,761
		Community State Bank - Ankeny		1,221,406			1,184,708			1,079,929
		Guaranty Bank (7)		2,037,364			956,345			850,067

		TOTAL DEPOSITS
		Quad City Bank and Trust (1)	$	1,787,564		$	1,930,935		$	1,810,772
		Cedar Rapids Bank and Trust		1,495,665			1,397,976			1,395,721
		Community State Bank - Ankeny		1,006,836			1,013,928			938,428
		Guaranty Bank (7)		1,539,978			555,559			608,676

		TOTAL LOANS & LEASES
		Quad City Bank and Trust (1)	$	1,737,812		$	1,692,218		$	1,577,681
		m2 Equipment Finance, LLC		293,435			285,871			258,520
		Cedar Rapids Bank and Trust		1,536,224			1,478,514			1,360,202
		Community State Bank - Ankeny		931,031			912,996			786,208
		Guaranty Bank (7)		1,592,836			744,140			693,614

		TOTAL LOANS & LEASES / TOTAL DEPOSITS
		Quad City Bank and Trust (1)		97	%		88	%		87	%
		Cedar Rapids Bank and Trust		103	%		106	%		97	%
		Community State Bank - Ankeny		92	%		90	%		84	%
		Guaranty Bank		103	%		134	%		114	%


		TOTAL LOANS & LEASES / TOTAL ASSETS
		Quad City Bank and Trust (1)		82	%		77	%		77	%
		Cedar Rapids Bank and Trust		77	%		76	%		71	%
		Community State Bank - Ankeny		76	%		77	%		73	%
		Guaranty Bank		78	%		78	%		82	%

		ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES
		Quad City Bank and Trust (1)		1.68	%		1.69	%		1.91	%
		m2 Equipment Finance, LLC		3.31	%		3.31	%		3.61	%
		Cedar Rapids Bank and Trust		1.58	%		1.61	%		1.92	%
		Community State Bank - Ankeny		1.57	%		1.55	%		1.69	%
		Guaranty Bank		1.53	%		1.11	%		1.35	%

		RETURN ON AVERAGE ASSETS
		Quad City Bank and Trust (1)		1.56	%		1.86	%		1.64	%		1.71	%		1.50	%
		Cedar Rapids Bank and Trust		2.72	%		2.25	%		2.39	%		2.48	%		2.42	%
		Community State Bank - Ankeny		1.12	%		1.42	%		1.16	%		1.27	%		0.99	%
		Guaranty Bank (8) (9)		0.20	%		1.40	%		1.77	%		0.56	%		1.47	%

		NET INTEREST MARGIN PERCENTAGE (2)
		Quad City Bank and Trust (1)		3.74	%		3.50	%		3.30	%		3.62	%		3.25	%
		Cedar Rapids Bank and Trust (3)		3.66	%		3.60	%		3.60	%		3.63	%		3.58	%
		Community State Bank - Ankeny (4)		3.67	%		3.62	%		3.66	%		3.65	%		3.68	%
		Guaranty Bank (5)		4.20	%		3.38	%		3.54	%		3.94	%		3.54	%

		ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
		INTEREST MARGIN, NET
		Cedar Rapids Bank and Trust	$	4		$	51		$	92		$	55		$	105
		Community State Bank - Ankeny		28			33			68		$	61			385
		Guaranty Bank		1,698			69			168		$	1,767			379
		QCR Holdings, Inc. (6)		(35	)		(35	)		(37	)	$	(70	)		(74	)

(1	)	Quad City Bank and Trust figures include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
(2	)	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.
(3	)	Cedar Rapids Bank and Trust's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.62% for the quarter ended June 30, 2022, 3.54% for the quarter ended March 31, 2022 and 3.67% for thequarter ended June 30, 2021.
(4	)	Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.66% for the quarter ended June 30, 2022, 3.62% for the quarter ended March 31, 2022 and 3.63% for the quarter ended June 30, 2021.
(5	)	Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.82% for the quarter ended June 30, 2022, 3.41% for the quarter ended March 31, 2022 and 3.50% for the quarter ended June 30, 2021.
(6	)	Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.
(7	)	Increase due to the acquisition of Guaranty Bank on April 1, 2022, merging into Springfield First Community Bank with the combined bank operating under the Guaranty Bank name.
(8	)	Decrease due to CECL Day 2 provision for credit losses of $12.4 million related to the acquisition of Guaranty Bank during the quarter ended June 30, 2022.
(9	)	Adjusted ROAA excluding non-core adjustments for the Guaranty Bank acquisition (non-GAAP) would have been 2.12% for the quarter ended June 30, 2022 and 1.89% for the six months ended June 30, 2022.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
GAAP TO NON-GAAP RECONCILIATIONS		2022			2022			2021			2021			2021

	(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)

Stockholders' equity (GAAP)	$	743,138		$	667,924		$	677,010		$	649,814		$	630,476
Less: Intangible assets		155,940			82,922			83,415			83,923			84,431
Tangible common equity (non-GAAP)	$	587,198		$	585,002		$	593,595		$	565,891		$	546,045

Total assets (GAAP)	$	7,392,941		$	6,175,819		$	6,096,132		$	6,014,508		$	5,827,412
Less: Intangible assets		155,940			82,922			83,415			83,923			84,431
Tangible assets (non-GAAP)	$	7,237,001		$	6,092,897		$	6,012,717		$	5,930,585		$	5,742,981

Tangible common equity to tangible assets ratio (non-GAAP)		8.11	%		9.60	%		9.87	%		9.54	%		9.51	%

(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.

QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

GAAP TO NON-GAAP RECONCILIATIONS	For the Quarter Ended															For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
ADJUSTED NET INCOME (1)		2022			2022			2021			2021			2021			2022			2021


	(dollars in thousands, except per share data)

Net income (GAAP)	$	15,242		$	23,624		$	27,009		$	31,565		$	22,349		$	38,866		$	40,331

Less non-core items (post-tax) (2):
Income:
Securities gains (losses), net		-			-			-			-			(69	)	$	-		$	(69	)
Mark to market gains (losses) on derivatives, net		342			715			77			(13	)		(58	)		1,057		$	71
Gain on sale of loan		-			-			-			28			-			-		$	-
Total non-core income (non-GAAP)	$	342		$	715		$	77		$	15		$	(127	)	$	1,057		$	2

Expense:
Acquisition costs (2)		1,932			1,462			493			-			-			3,394			-
Post-acquisition compensation, transition and integration costs		3,789			-			-			-			-			3,789			169
Separation agreement		-			-			-			-			-			-			734
CECL Day 2 provision for credit losses on acquired non-PCD loans (3)		8,651			-			-			-			-			8,651			-
CECL Day 2 provision for credit losses provision on acquired OBS exposure (3)		1,140			-			-			-			-			1,140			-
Loss on sale of subsidiary		-			-			-			-			-			-			110
Total non-core expense (non-GAAP)	$	15,512		$	1,462		$	496		$	-		$	-		$	16,974		$	1,020
Adjusted net income (non-GAAP) (1)	$	30,412		$	24,371		$	27,428		$	31,550		$	22,476		$	54,783		$	41,349

ADJUSTED EARNINGS PER COMMON SHARE (1)

Adjusted net income (non-GAAP) (from above)	$	30,412		$	24,371		$	27,428		$	31,550		$	22,476		$	54,783		$	41,349

Weighted average common shares outstanding		17,345,324			15,625,112			15,582,276			15,635,123			15,813,932			16,485,218			15,808,788
Weighted average common and common equivalent shares outstanding		17,549,107			15,852,256			15,838,246			15,869,798			16,045,239			16,700,682			16,035,394

Adjusted earnings per common share (non-GAAP):
Basic	$	1.75		$	1.56		$	1.76		$	2.02		$	1.42		$	3.32		$	2.62
Diluted	$	1.73		$	1.54		$	1.73		$	1.99		$	1.40		$	3.28		$	2.58

ADJUSTED RETURN ON AVERAGE ASSETS (1)

Adjusted net income (non-GAAP) (from above)	$	30,412		$	24,371		$	27,428		$	31,550		$	22,476		$	54,783		$	41,349

Average Assets	$	7,324,470		$	6,115,127		$	6,121,446		$	5,982,583		$	5,761,314		$	6,723,137		$	5,704,151

Adjusted return on average assets (annualized) (non-GAAP)		1.66	%		1.59	%		1.79	%		2.11	%		1.56	%		1.63	%		1.45	%

NET INTEREST MARGIN (TEY) (5)

Net interest income (GAAP)	$	59,400		$	45,733		$	46,513		$	46,229		$	43,516		$	105,133		$	85,491
Plus: Tax equivalent adjustment (4)		3,396			2,933			2,800			2,708			2,444			6,327			4,702
Net interest income - tax equivalent (Non-GAAP)	$	62,796		$	48,666		$	49,313		$	48,937		$	45,960		$	111,460		$	90,193
Less: Acquisition accounting net accretion		1,695			118			88			456			291			1,813			795
Adjusted net interest income	$	61,101		$	48,548		$	49,225		$	48,481		$	45,669		$	109,647		$	89,398
Less: PPP income		125			530			1,365			1,910			1,658			655			3,921
Adjusted net interest income, excluding PPP income	$	60,976		$	48,018		$	47,860		$	46,571		$	44,011		$	108,992		$	85,477

Average earning assets	$	6,742,095		$	5,625,813		$	5,602,222		$	5,451,571		$	5,320,881		$	6,187,038		$	5,269,820

Net interest margin (GAAP)		3.53	%		3.30	%		3.29	%		3.36	%		3.28	%		3.43	%		3.27	%
Net interest margin (TEY) (Non-GAAP)		3.74	%		3.50	%		3.50	%		3.56	%		3.46	%		3.63	%		3.45	%
Adjusted net interest margin (TEY) (Non-GAAP)		3.64	%		3.50	%		3.49	%		3.53	%		3.44	%		3.57	%		3.42	%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP)		3.63	%		3.46	%		3.39	%		3.39	%		3.32	%		3.55	%		3.27	%

EFFICIENCY RATIO (6)

Noninterest expense (GAAP)	$	54,248		$	38,325		$	39,412		$	41,387		$	35,675		$	92,573		$	72,903

Net interest income (GAAP)	$	59,400		$	45,733		$	46,513		$	46,229		$	43,516		$	105,133		$	85,491
Noninterest income (GAAP)		22,782			15,633			22,985			34,652			19,296			38,415			42,785
Total income	$	82,182		$	61,366		$	69,498		$	80,881		$	62,812		$	143,548		$	128,276

Efficiency ratio (noninterest expense/total income) (Non-GAAP)		66.01	%		62.45	%		56.71	%		51.17	%		56.80	%		64.49	%		56.83	%

LOAN GROWTH ANNUALIZED, EXCLUDING ACQUIRED AND PPP LOANS
Total loans and leases	$	5,797,903		$	4,827,868		$	4,680,132		$	4,599,730		$	4,417,705		$	5,797,903		$	4,417,705
Less: Acquired loans (7)		807,599			-			-			-			-			807,599			-
Less: PPP loans		79			6,340			28,181			83,575			147,506			79			147,506
Total loans and leases, excluding acquired and PPP loans	$	4,990,225		$	4,821,528		$	4,651,951		$	4,516,155		$	4,270,199		$	4,990,225		$	4,270,199

Loan growth annualized, excluding acquired and PPP loans		14.00	%		14.58	%		12.03	%		23.04	%		14.87	%		14.54	%		12.90	%


(1) Adjusted net income, Adjusted net income attributable to QCR Holdings, Inc. common stockholders, Adjusted earnings per common share and Adjusted 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-core or 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.
(2) Non-core or nonrecurring items (post-tax) are calculated using an estimated effective tax rate of 21% with the exception of acquisition costs which have an estimated effective tax rate of 11.26%.
(3) The CECL Day 2 provision for credit losses on acquired non-PCD loans and OBS exposures resulted from the Guaranty Bank acquisition on April 1, 2022.
(4) Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective tax rate.
(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. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
(6) 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.
(7) Loan balances acquired from the Guaranty Bank acquisition on April 1, 2022 are excluded.

QCR Holdings, Inc. Announces Second Quarter 2022 Results

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