QCR Holdings, Inc. Announces Third Quarter 2022 Results

Source: Nasdaq GlobeNewswire / 26 Oct 2022 16:05:02 America/New_York

Third Quarter 2022 Highlights

Net income of $29.3 million, or $1.71 per diluted share
Adjusted net income (non-GAAP) of $28.9 million, or $1.69 per diluted share
Net Interest Margin (“NIM”) of 3.46% and NIM (TEY)(non-GAAP) of 3.71%
Annualized loan and lease growth of 14.5% for the quarter
Annualized deposit growth of 8.3% for the quarter
Nonperforming assets improved for the quarter and represented 0.23% of total assets
Allowance for credit losses (“ACL”) to total loans/leases of 1.51%
Increased total risk-based capital to 14.55% through the issuance of subordinated notes and strong earnings

MOLINE, Ill., Oct. 26, 2022 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced net income of $29.3 million and diluted earnings per share (“EPS”) of $1.71 for the third quarter of 2022, compared to net income of $15.2 million and diluted EPS of $0.87 for the second quarter of 2022.

Adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) for the third quarter of 2022 were $28.9 million and $1.69, respectively. For the second quarter of 2022, adjusted net income (non-GAAP) was $30.4 million and adjusted diluted EPS (non-GAAP) was $1.73. For the third quarter of 2021, adjusted net income (non-GAAP) and adjusted diluted EPS (non-GAAP) were $31.6 million and $1.99, respectively.

	For the Quarter Ended
	September 30,		June 30,		September 30,
$ in millions (except per share data)	2022		2022		2021
Net Income	$	29.3	$	15.2	$	31.6
Diluted EPS	$	1.71	$	0.87	$	1.99
Adjusted Net Income (non-GAAP)*	$	28.9	$	30.4	$	31.6
Adjusted Diluted EPS (non-GAAP)*	$	1.69	$	1.73	$	1.99

*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, improved credit quality and carefully managed expenses,” said Larry J. Helling, Chief Executive Officer. “Building on the momentum we established in the first half of the year, we generated robust lending activity again in the third quarter with annualized loan growth of 14.5%. This was funded primarily by growth in deposits during the quarter. Additionally, we raised $100 million of subordinated debt, bolstering our capital position against the backdrop of an uncertain economy.”

Net Interest Income of $60.8 Million

Net interest income for the third quarter of 2022 totaled $60.8 million, compared to $59.4 million for the second quarter of 2022 and $46.2 million for the third quarter of 2021. The increase in net interest income was due to an increase in average earning assets, primarily attributable to loan growth and NIM expansion on a linked-quarter basis. Adjusted net interest income, excluding PPP income (non-GAAP) during the quarter was $64.1 million, an increase of $3.2 million, or 20.8% annualized, from the prior quarter. Acquisition-related net accretion totaled $1.1 million for the third quarter of 2022, as compared to $1.7 million in the second quarter of 2022.

In the third quarter of 2022, NIM was 3.46% and tax-equivalent yield (“TEY”) basis (non-GAAP) NIM was 3.71%, compared to 3.53% and 3.74% in the prior quarter, respectively. Adjusted NIM (non-GAAP), which excludes acquisition-related net accretion, was 3.65%, up 1 basis point from the prior quarter. Excluding the final impact of PPP loans (non-GAAP) on NIM in the prior quarter, adjusted NIM for the current quarter (non-GAAP) was up 5 basis points prior to the dilutive impact of our subordinated debt issuance. The linked-quarter increase was primarily due to the impact of multiple interest rate hikes on our asset-sensitive balance sheet, partially offset by the impact of increased deposit costs and our recent subordinated debt issuance.

	For the Quarter Ended
	September 30,	June 30,	September 30,
	2022	2022	2021
NIM	3.46%	3.53%	3.36%
NIM (TEY)(non-GAAP) *	3.71%	3.74%	3.56%
Adjusted NIM (TEY)(non-GAAP) *	3.65%	3.64%	3.53%
Adjusted NIM ex. PPP (TEY)(non-GAAP)*	3.65%	3.63%	3.39%
* See GAAP to non-GAAP reconciliations

“Our adjusted NIM, excluding PPP, expanded by 5 basis points during the third quarter, prior to the dilutive impact of our recent subordinated debt issuance,” said Todd A. Gipple, President, Chief Operating Officer and Chief Financial Officer. “While our balance sheet is well positioned to continue to drive NIM expansion in this rising rate environment, the sharply higher interest rates impacted our deposit mix and pricing this quarter. However, we are very pleased with the expansion in NIM that we have experienced early in the current rising rate cycle of 26 basis points on a year-over-year basis.”

Annualized Loan and Lease Growth of 14.5%
Total Loans and Leases Surpass $6 Billion

During the third quarter of 2022, the Company’s loans and leases increased $210.7 million to a total of $6.0 billion, or 14.5% on an annualized basis. Deposits increased by $120.4 million during the quarter, helping to fund our loan and lease growth.

“Strength in our traditional commercial lending, leasing and our Specialty Finance businesses drove our continued loan growth,” added Mr. Helling. “This speaks to the dedication of our experienced teams and the economic resiliency in our markets. Given our current pipelines, we are reaffirming our targeted loan growth of between 10% and 12% for the fourth quarter, while continuing to be vigilant on maintaining our exceptional credit quality.”

Noninterest Income of $21.1 Million

Noninterest income for the third quarter of 2022 totaled $21.1 million, compared to $22.8 million for the second quarter of 2022. The decrease was primarily due to a $2.5 million decline in capital markets revenue from swap fees due to delays in client projects caused by ongoing supply chain disruptions, inflationary pressures and higher interest rates. Wealth management revenue was $3.5 million for the quarter, consistent with the second quarter of 2022, despite ongoing market volatility.

“Capital markets revenue totaled $10.5 million for the quarter, which was below our guidance due to delays in funding low-income housing tax credit projects,” added Mr. Gipple. “While certain client projects have been delayed, the economics of these projects remain solid, and our pipeline is strong. Capital markets revenue has averaged approximately $11 million per quarter for the last four quarters and therefore we expect this source of fee income to be in a range of $10 to $12 million for the fourth quarter.”

Noninterest Expenses of $47.7 Million

Noninterest expense for the third quarter of 2022 totaled $47.7 million, compared to $54.2 million for the second quarter of 2022 and $41.4 million for the third quarter of 2021. The linked-quarter decrease was primarily due to elevated expenses in the second quarter related to the Guaranty Bank acquisition and lower incentive-based compensation in the third quarter. Excluding acquisition/post-acquisition related costs, noninterest expense for the third quarter was $47.4 million, compared to $47.5 million in the second quarter.

Asset Quality Remains Exceptional

Nonperforming assets (“NPAs”) totaled $18.0 million at the end of the third quarter, a decrease of $6.0 million from the second quarter of 2022. The reduction in NPAs during the quarter was primarily the result of paydowns on several NPAs. The ratio of NPAs to total assets was 0.23% on September 30, 2022, compared to 0.33% on June 30, 2022, and 0.11% on September 30, 2021. In addition, the Company’s criticized loans and classified loans to total loans and leases on September 30, 2022 improved to 2.35% and 1.29%, respectively, as compared to 2.37% and 1.43% as of June 30, 2022.

The Company did not record a provision for credit losses in the third quarter of 2022 as a result of continued improvements in overall credit quality. As of September 30, 2022, the ACL on total loans/leases was 1.51%, compared to 1.59% as of June 30, 2022.

Continued Strong Capital Levels

As of September 30, 2022, the Company’s total risk-based capital ratio was 14.55%, the common equity tier 1 ratio was 9.33% and the tangible common equity to tangible assets ratio (non-GAAP) was 7.68%. By comparison, these respective ratios were 13.40%, 9.46% and 8.11% as of June 30, 2022.

On August 18, 2022, the Company announced that it completed a private placement of $100 million in aggregate principal amount subordinated notes. The notes qualify as tier 2 capital and contributed to the increase in the total risk-based capital ratio. This transaction increased our total risk-based capital ratio by 140 bps.

During the third quarter, the Company purchased and retired 190,000 shares of its common stock at an average price of $55.18 per share as the Company executed purchases under the share repurchase plan announced during the second quarter. The 2022 share repurchase plan authorized an approximate 1,500,000 additional shares to be repurchased and the Company has approximately 1,030,000 shares remaining under the program.

The Company’s accumulated other comprehensive income (“AOCI”) declined $24.8 million during the third quarter due to a decrease in the value of its available for sale securities portfolio and certain derivatives resulting from continued sharp increases in interest rates during the quarter. While AOCI and the repurchase of shares reduced the Company’s tangible common equity, solid earnings offset this impact, which led to a slight increase in tangible book value per share (non-GAAP).

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, October 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 November 3, 2022. The replay access information is 877-344-7529 (international 412-317-0088); access code 9369877. A webcast of the teleconference can be accessed on 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. The Company has 40 locations in Iowa, Missouri, Wisconsin and Illinois. As of September 30, 2022, the Company had approximately $7.7 billion in assets, $6.0 billion in loans and $5.9 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
	September 30,		June 30,		March 31,		December 31,		September 30,
	2022		2022		2022		2021		2021
	(dollars in thousands)

CONDENSED BALANCE SHEET

Cash and due from banks	$	86,282	$	92,379	$	50,540	$	37,490	$	57,310
Federal funds sold and interest-bearing deposits		71,043		56,532		66,390		87,662		70,826
Securities, net of allowance for credit losses		879,450		879,918		823,311		810,215		828,719
Net loans/leases		5,918,121		5,705,478		4,753,082		4,601,411		4,519,060
Intangibles		17,546		18,333		8,856		9,349		9,857
Goodwill		137,607		137,607		74,066		74,066		74,066
Derivatives		185,037		97,455		107,326		222,220		198,393
Other assets		434,963		405,239		292,248		253,719		256,277
Total assets	$	7,730,049	$	7,392,941	$	6,175,819	$	6,096,132	$	6,014,508

Total deposits	$	5,941,035	$	5,820,657	$	4,839,689	$	4,922,772	$	4,871,828
Total borrowings		701,491		583,166		443,270		170,805		183,514
Derivatives		209,479		113,305		116,193		225,135		201,450
Other liabilities		140,972		132,675		108,743		100,410		107,902
Total stockholders' equity		737,072		743,138		667,924		677,010		649,814
Total liabilities and stockholders' equity	$	7,730,049	$	7,392,941	$	6,175,819	$	6,096,132	$	6,014,508

ANALYSIS OF LOAN PORTFOLIO
Loan/lease mix:
Commercial and industrial - revolving	$	332,996	$	322,258	$	263,441	$	248,483	$	175,155
Commercial and industrial - other		1,415,996		1,403,689		1,374,221		1,346,602		1,465,580
Total commercial and industrial		1,748,992		1,725,947		1,637,662		1,595,085		1,640,735
Commercial real estate, owner occupied		627,558		628,565		439,257		421,701		434,014
Commercial real estate, non-owner occupied		920,876		889,530		679,898		646,500		644,850
Construction and land development		1,149,503		1,080,372		863,116		918,571		852,418
Multi-family		933,118		860,742		711,682		600,412		529,727
Direct financing leases		33,503		40,050		43,330		45,191		50,237
1-4 family real estate		487,508		473,141		379,613		377,361		376,067
Consumer		107,552		99,556		73,310		75,311		71,682
Total loans/leases	$	6,008,610	$	5,797,903	$	4,827,868	$	4,680,132	$	4,599,730
Less allowance for credit losses		90,489		92,425		74,786		78,721		80,670
Net loans/leases	$	5,918,121	$	5,705,478	$	4,753,082	$	4,601,411	$	4,519,060

ANALYSIS OF SECURITIES PORTFOLIO
Securities mix:
U.S. government sponsored agency securities	$	20,527	$	20,448	$	21,380	$	23,328	$	23,689
Municipal securities		724,204		710,638		667,245		639,799		649,486
Residential mortgage-backed and related securities		68,844		81,247		86,381		94,323		100,744
Asset backed securities		19,630		19,956		23,233		27,124		30,607
Other securities		46,443		47,827		25,270		25,839		24,367
Total securities	$	879,648	$	880,116	$	823,509	$	810,413	$	828,893
Less allowance for credit losses		198		198		198		198		174
Net securities	$	879,450	$	879,918	$	823,311	$	810,215	$	828,719

ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand deposits	$	1,315,555	$	1,514,005	$	1,275,493	$	1,268,788	$	1,342,273
Interest-bearing demand deposits		3,904,303		3,758,566		3,181,685		3,232,633		3,086,711
Time deposits		672,133		540,074		382,268		421,348		441,743
Brokered deposits		49,044		8,012		243		3		1,101
Total deposits	$	5,941,035	$	5,820,657	$	4,839,689	$	4,922,772	$	4,871,828

ANALYSIS OF BORROWINGS
Borrowings mix:
Overnight FHLB advances (1)	$	335,000	$	400,000	$	290,000	$	15,000	$	30,000
Other short-term borrowings		85,180		1,070		1,190		3,800		1,600
Subordinated notes		232,743		133,562		113,890		113,850		113,811
Junior subordinated debentures		48,568		48,534		38,190		38,155		38,103
Total borrowings	$	701,491	$	583,166	$	443,270	$	170,805	$	183,514

(1) At the most recent quarter-end, the weighted-average rate of these overnight borrowings was 3.29%.


QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

	For the Quarter Ended
	September 30,		June 30,		March 31,			December 31,			September 30,
	2022		2022		2022			2021			2021
	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income	$	79,267	$	68,205	$	51,062		$	52,020		$	51,667
Interest expense		18,498		8,805		5,329			5,507			5,438
Net interest income		60,769		59,400		45,733			46,513			46,229
Provision for credit losses (1)		-		11,200		(2,916	)		(3,227	)		-
Net interest income after provision for loan/lease losses	$	60,769	$	48,200	$	48,649		$	49,740		$	46,229


Trust department fees	$	2,537	$	2,497	$	2,963		$	2,843		$	2,714
Investment advisory and management fees		921		983		1,036			1,047			1,054
Deposit service fees		2,214		2,223		1,555			1,644			1,588
Gain on sales of residential real estate loans		641		809		493			922			954
Gain on sales of government guaranteed portions of loans		50		-		19			227			-
Swap fee income/capital markets revenue		10,545		13,004		6,422			12,982			24,885
Earnings on bank-owned life insurance		605		350		346			470			446
Debit card fees		1,453		1,499		1,007			1,072			1,085
Correspondent banking fees		189		244		277			266			265
Loan related fee income		652		682		480			536			550
Mark to market gain - derivatives		904		432		906			97			(17	)
Other		384		59		129			879			1,128
Total noninterest income	$	21,095	$	22,782	$	15,633		$	22,985		$	34,652


Salaries and employee benefits	$	29,175	$	29,972	$	23,627		$	24,809		$	28,207
Occupancy and equipment expense		6,033		5,978		3,937			3,723			4,122
Professional and data processing fees		4,477		4,365		3,671			3,866			3,568
Acquisition costs		315		1,973		1,851			624			-
Post-acquisition compensation, transition and integration costs		62		4,796		-			-			-
Disposition costs		-		-		-			5			-
FDIC insurance, other insurance and regulatory fees		1,497		1,394		1,310			1,316			1,108
Loan/lease expense		390		761		267			606			308
Net cost of (income from) and gains/losses on operations of other real estate		19		59		(1	)		-			(1,346	)
Advertising and marketing		1,437		1,198		761			1,679			1,095
Communication		639		584		403			481			457
Supplies		289		237		246			274			298
Bank service charges		568		610		541			553			525
Correspondent banking expense		218		213		199			200			201
Intangibles amortization		787		787		493			508			508
Payment card processing		477		626		262			298			346
Trust expense		227		195		187			208			188
Other		1,136		500		571			262			1,802
Total noninterest expense	$	47,746	$	54,248	$	38,325		$	39,412		$	41,387

Net income before income taxes	$	34,118	$	16,734	$	25,957		$	33,313		$	39,494
Federal and state income tax expense		4,824		1,492		2,333			6,304			7,929
Net income	$	29,294	$	15,242	$	23,624		$	27,009		$	31,565

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


Weighted average common shares outstanding		16,900,968		17,345,324		15,625,112			15,582,276			15,635,123
Weighted average common and common equivalent shares outstanding		17,110,691		17,549,107		15,852,256			15,838,246			15,869,798

(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 Nine Months Ended
	September 30,		September 30,
	2022		2021
	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income	$	198,534	$	148,135
Interest expense		32,632		16,415
Net interest income		165,902		131,720
Provision for credit losses (1)		8,284		6,713
Net interest income after provision for loan/lease losses	$	157,618	$	125,007


Trust department fees	$	7,997	$	8,363
Investment advisory and management fees		2,940		3,033
Deposit service fees		5,992		4,488
Gain on sales of residential real estate loans		1,943		3,475
Gain on sales of government guaranteed portions of loans		69		-
Swap fee income/capital markets revenue		29,971		48,010
Securities gains (losses), net		-		(88	)
Earnings on bank-owned life insurance		1,301		1,368
Debit card fees		3,959		3,144
Correspondent banking fees		710		848
Loan related fee income		1,814		1,732
Mark to market gain- derivatives		2,242		73
Other		572		2,991
Total noninterest income	$	59,510	$	77,437


Salaries and employee benefits	$	82,774	$	76,098
Occupancy and equipment expense		15,948		12,195
Professional and data processing fees		12,513		10,713
Acquisition costs		4,139		-
Post-acquisition compensation, transition and integration costs		4,858		-
Disposition costs		-		8
FDIC insurance, other insurance and regulatory fees		4,201		3,159
Loan/lease expense		1,418		1,065
Net cost of (income from) and gains/losses on operations of other real estate		77		(1,420	)
Advertising and marketing		3,396		2,575
Communication		1,626		1,317
Supplies		772		779
Bank service charges		1,719		1,620
Correspondent banking expense		630		599
Intangibles amortization		2,067		1,524
Payment card processing		1,365		1,114
Trust expense		609		550
Other		2,207		2,394
Total noninterest expense	$	140,319	$	114,290

Net income before income taxes	$	76,809	$	88,154
Federal and state income tax expense		8,649		16,258
Net income	$	68,160	$	71,896

Basic EPS	$	4.25	$	4.54
Diluted EPS	$	4.20	$	4.48


Weighted average common shares outstanding		16,030,371		15,829,124
Weighted average common and common equivalent shares outstanding		16,243,921		16,058,420

(1) Provision for credit losses for the nine months ended September 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 Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2022			2022			2022			2021			2021			2022			2021
	(dollars in thousands, except per share data)

COMMON SHARE DATA
Common shares outstanding		16,885,485			17,064,347			15,579,605			15,613,460			15,590,428
Book value per common share (1)	$43.65			$43.55			$42.87			$43.36			$41.68
Tangible book value per common share (Non-GAAP) (2)	$34.46			$34.41			$37.55			$38.02			$36.30
Closing stock price	$50.94			$53.99			$56.59			$56.00			$51.44
Market capitalization	$860,147			$921,304			$881,650			$874,354			$801,972
Market price / book value		116.70	%		123.97	%		132.00	%		129.15	%		123.42	%
Market price / tangible book value		147.81	%		156.90	%		150.71	%		147.30	%		141.72	%
Earnings per common share (basic) LTM (3)	$5.86			$6.14			$6.68			$6.30			$5.73
Price earnings ratio LTM (3)		8.70	x		8.79	x		8.47	x		8.88	x		8.98	x
TCE / TA (Non-GAAP) (4)		7.68	%		8.11	%		9.60	%		9.87	%		9.54	%


CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Beginning balance	$	743,138		$	667,924		$	677,010		$	649,814		$	630,476
Net income		29,294			15,242			23,624			27,009			31,565
Other comprehensive income (loss), net of tax		(24,783	)		(24,286	)		(27,340	)		295			(2,546	)
Common stock cash dividends declared		(1,012	)		(1,059	)		(938	)		(935	)		(946	)
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		(10,485	)		(33,016	)		(4,416	)		-			(9,367	)
Other (5)		920			1,119			(16	)		827			632
Ending balance	$	737,072		$	743,138		$	667,924		$	677,010		$	649,814


REGULATORY CAPITAL RATIOS (6):
Total risk-based capital ratio		14.55	%		13.40	%		14.50	%		14.77	%		14.64	%
Tier 1 risk-based capital ratio		10.01	%		10.18	%		11.27	%		11.46	%		11.26	%
Tier 1 leverage capital ratio		9.56	%		9.61	%		10.78	%		10.46	%		10.28	%
Common equity tier 1 ratio		9.33	%		9.46	%		10.61	%		10.76	%		10.55	%


KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets (annualized)		1.53	%		0.83	%		1.55	%		1.76	%		2.11	%		1.30	%		1.66	%
Return on average total equity (annualized)		15.39	%		7.74	%		13.81	%		16.23	%		19.30	%		12.20	%		15.27	%
Net interest margin		3.46	%		3.53	%		3.30	%		3.29	%		3.36	%		3.44	%		3.30	%
Net interest margin (TEY) (Non-GAAP)(7)		3.71	%		3.74	%		3.50	%		3.50	%		3.56	%		3.66	%		3.49	%
Efficiency ratio (Non-GAAP) (8)		58.32	%		66.01	%		62.45	%		56.71	%		51.17	%		62.25	%		54.64	%
Gross loans and leases / total assets		77.73	%		78.42	%		78.17	%		76.77	%		76.48	%		77.73	%		76.48	%
Gross loans and leases / total deposits		101.14	%		99.61	%		99.76	%		95.07	%		94.41	%		101.14	%		94.41	%
Effective tax rate		14.14	%		8.92	%		8.99	%		18.92	%		20.08	%		11.26	%		18.44	%
Full-time equivalent employees (9)		956			968			749			726			724			956			724


AVERAGE BALANCES
Assets	$	7,652,463		$	7,324,470		$	6,115,127		$	6,121,446		$	5,982,583		$	7,005,988		$	5,789,753
Loans/leases		5,916,100			5,711,471			4,727,478			4,608,111			4,529,136			5,456,037			4,405,355
Deposits		5,891,198			5,867,444			4,903,354			4,983,869			4,779,876			5,557,617			4,706,719
Total stockholders' equity		761,428			788,204			684,126			665,698			654,186			744,869			627,583



(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
	September 30, 2022						June 30, 2022						September 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	$	16,224	$	100	2.45	%	$	5,896	$	12	0.83	%	$	3,030	$	1	0.10	%
Interest-bearing deposits at financial institutions		54,799		381	2.76	%		67,254		169	1.01	%		99,024		39	0.16	%
Securities (1)		946,096		9,602	4.05	%		920,308		9,002	3.91	%		799,471		7,646	3.82	%
Restricted investment securities		42,638		674	6.18	%		37,166		485	5.16	%		20,910		262	4.97	%
Loans (1)		5,916,100		72,969	4.89	%		5,711,471		61,932	4.35	%		4,529,136		46,427	4.07	%
Total earning assets (1)	$	6,975,857	$	83,726	4.76	%	$	6,742,095	$	71,600	4.26	%	$	5,451,571	$	54,375	3.96	%

Interest-bearing deposits	$	3,862,556	$	10,889	1.12	%	$	3,791,595	$	4,478	0.47	%	$	3,041,941	$	2,183	0.28	%
Time deposits		593,490		1,681	1.12	%		529,675		1,047	0.79	%		461,210		1,090	0.94	%
Short-term borrowings		11,376		84	2.94	%		1,404		3	0.78	%		6,858		1	0.10	%
Federal Home Loan Bank advances		418,239		2,584	2.42	%		286,484		780	1.08	%		54,293		41	0.30	%
Other borrowings		4,239		53	4.93	%		-		-	0.00	%		-		-	0.00	%
Subordinated debentures		181,177		2,518	5.56	%		133,529		1,816	5.44	%		113,789		1,554	5.46	%
Junior subordinated debentures		48,551		689	5.56	%		46,536		680	5.78	%		38,084		569	5.84	%
Total interest-bearing liabilities	$	5,119,628	$	18,498	1.43	%	$	4,789,223	$	8,804	0.74	%	$	3,716,175	$	5,438	0.58	%

Net interest income (1)			$	65,228					$	62,796					$	48,937
Net interest margin (2)					3.46	%					3.53	%					3.36	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.71	%					3.74	%					3.56	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.65	%					3.64	%					3.53	%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3)					3.65	%					3.63	%					3.39	%


	For the Nine Months Ended
	September 30, 2022						September 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	$	8,937	$	114	1.70	%	$	1,503	$	1	0.13	%
Interest-bearing deposits at financial institutions		63,740		584	1.23	%		101,225		110	0.15	%
Securities (1)		890,082		26,286	3.93	%		802,715		21,989	3.65	%
Restricted investment securities		34,071		1,439	5.57	%		19,540		718	4.85	%
Loans (1)		5,456,037		180,896	4.43	%		4,405,355		132,728	4.03	%
Total earning assets (1)	$	6,452,867	$	209,319	4.33	%	$	5,330,338	$	155,546	3.90	%

Interest-bearing deposits	$	3,629,735	$	17,704	0.65	%	$	3,000,766	$	6,219	0.28	%
Time deposits		508,067		3,527	0.93	%		449,996		3,716	1.10	%
Short-term borrowings		4,945		87	2.37	%		7,560		4	0.08	%
Federal Home Loan Bank advances		264,718		3,447	1.72	%		29,875		66	0.29	%
Other borrowings		1,429		53	4.90	%		-		-	0.00	%
Subordinated debentures		143,104		5,888	5.49	%		115,927		4,718	5.43	%
Junior subordinated debentures		44,457		1,926	5.71	%		38,045		1,692	5.86	%
Total interest-bearing liabilities	$	4,596,455	$	32,632	0.95	%	$	3,642,169	$	16,415	0.60	%

Net interest income (1)			$	176,687					$	139,131
Net interest margin (2)					3.44	%					3.30	%
Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.66	%					3.49	%
Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.60	%					3.46	%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP) (1) (2) (3)					3.60	%					3.31	%


(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
	September 30,			June 30,			March 31,			December 31,			September 30,
	2022			2022			2022			2021			2021
	(dollars in thousands, except per share data)

ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
Beginning balance	$	92,425		$	74,786		$	78,721		$	80,670		$	78,894
Initial ACL recorded for acquired PCD loans		-			5,902			-			-			-
Credit loss expense (1)		331			12,141			(3,849	)		(2,045	)		1,895
Loans/leases charged off		(2,489	)		(620	)		(456	)		(375	)		(287	)
Recoveries on loans/leases previously charged off		222			216			370			471			168
Ending balance	$	90,489		$	92,425		$	74,786		$	78,721		$	80,670


NONPERFORMING ASSETS
Nonaccrual loans/leases (2)	$	17,511		$	23,574		$	2,744		$	2,759		$	6,818
Accruing loans/leases past due 90 days or more		3			268			4			1			14
Total nonperforming loans/leases		17,514			23,842			2,748			2,760			6,832
Other real estate owned		177			205			-			-			-
Other repossessed assets		340			-			-			-			-
Total nonperforming assets	$	18,031		$	24,047		$	2,748		$	2,760		$	6,832


ASSET QUALITY RATIOS
Nonperforming assets / total assets		0.23	%		0.33	%		0.04	%		0.05	%		0.11	%
ACL for loans and leases / total loans/leases		1.51	%		1.59	%		1.55	%		1.68	%		1.75	%
ACL for loans and leases / nonperforming loans/leases		516.67	%		387.66	%		2721.47	%		2852.21	%		1180.77	%
Net charge-offs as a % of average loans/leases		0.04	%		0.01	%		0.00	%		0.00	%		0.00	%



INTERNALLY ASSIGNED RISK RATING (3)
Special mention (rating 6)	$	63,973		$	54,558		$	63,622		$	62,510		$	58,634
Substandard (rating 7)		77,317			83,048			54,491			53,159			59,402
Doubtful (rating 8)		-			-			-			-			-
	$	141,290		$	137,606		$	118,113		$	115,669		$	118,036

Criticized loans (4)	$	141,290		$	137,606		$	118,113		$	115,669		$	118,036
Classified loans (5)		77,317			83,048			54,491			53,159			59,402

Criticized loans as a % of total loans/leases		2.35	%		2.37	%		2.45	%		2.47	%		2.57	%
Classified loans as a % of total loans/leases		1.29	%		1.43	%		1.13	%		1.14	%		1.29	%




(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 Nine Months Ended
			September 30,			June 30,			September 30,			September 30,			September 30,
		SELECT FINANCIAL DATA - SUBSIDIARIES	2022			2022			2021			2022			2021
			(dollars in thousands)

		TOTAL ASSETS
		Quad City Bank and Trust (1)	$	2,218,166		$	2,122,852		$	2,106,631
		m2 Equipment Finance, LLC		298,640			289,451			259,543
		Cedar Rapids Bank and Trust		2,108,614			1,985,199			2,019,018
		Community State Bank - Ankeny		1,270,426			1,221,406			1,140,933
		Guaranty Bank (2)		2,107,407			2,037,364			880,143

		TOTAL DEPOSITS
		Quad City Bank and Trust (1)	$	1,741,472		$	1,787,564		$	1,797,969
		Cedar Rapids Bank and Trust		1,627,202			1,495,665			1,526,144
		Community State Bank - Ankeny		1,036,998			1,006,836			994,042
		Guaranty Bank (2)		1,632,107			1,539,978			605,947

		TOTAL LOANS & LEASES
		Quad City Bank and Trust (1)	$	1,806,776		$	1,737,812		$	1,636,170
		m2 Equipment Finance, LLC		300,753			293,435			262,962
		Cedar Rapids Bank and Trust		1,579,437			1,536,224			1,410,160
		Community State Bank - Ankeny		973,083			931,031			834,533
		Guaranty Bank (2)		1,649,313			1,592,836			718,867

		TOTAL LOANS & LEASES / TOTAL DEPOSITS
		Quad City Bank and Trust (1)		104	%		97	%		91	%
		Cedar Rapids Bank and Trust		97	%		103	%		92	%
		Community State Bank - Ankeny		94	%		92	%		84	%
		Guaranty Bank		101	%		103	%		119	%

		TOTAL LOANS & LEASES / TOTAL ASSETS
		Quad City Bank and Trust (1)		81	%		82	%		78	%
		Cedar Rapids Bank and Trust		75	%		77	%		70	%
		Community State Bank - Ankeny		77	%		76	%		73	%
		Guaranty Bank		78	%		78	%		82	%

		ACL ON LOANS/LEASES AS A PERCENTAGE OF LOANS/LEASES
		Quad City Bank and Trust (1)	1.59		%	1.68		%		1.88	%
		m2 Equipment Finance, LLC	3.13		%	3.31		%		3.78	%
		Cedar Rapids Bank and Trust	1.54		%	1.58		%		1.85	%
		Community State Bank - Ankeny	1.45		%	1.57		%		1.73	%
		Guaranty Bank	1.42		%	1.53		%		1.30	%

		RETURN ON AVERAGE ASSETS
		Quad City Bank and Trust (1)		1.41	%		1.56	%		1.66	%		1.61	%		1.55	%
		Cedar Rapids Bank and Trust		2.83	%		2.72	%		3.93	%		2.60	%		2.95	%
		Community State Bank - Ankeny		1.31	%		1.12	%		1.17	%		1.28	%		1.05	%
		Guaranty Bank (3) (4)		1.76	%		0.20	%		2.09	%		1.06	%		1.69	%

		NET INTEREST MARGIN PERCENTAGE (5)
		Quad City Bank and Trust (1)		3.65	%		3.74	%		3.47	%		3.63	%		3.32	%
		Cedar Rapids Bank and Trust (6)		4.02	%		3.66	%		3.68	%		3.77	%		3.61	%
		Community State Bank - Ankeny (7)		3.69	%		3.67	%		3.78	%		3.66	%		3.71	%
		Guaranty Bank (8)		4.10	%		4.20	%		3.67	%		4.01	%		3.59	%

		ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
		INTEREST MARGIN, NET
		Cedar Rapids Bank and Trust	$	5		$	4		$	64		$	60		$	169
		Community State Bank - Ankeny		62			28			52		$	123			437
		Guaranty Bank		1,047			1,698			376		$	2,814			755
		QCR Holdings, Inc. (9)		(34	)		(35	)		(36	)	$	(104	)		(110	)

(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	)	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.
(3	)	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.
(4	)	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 1.84% for the nine months ended September 30, 2022.
(5	)	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.
(6	)	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 4.02% for the quarter ended September 30, 2022, 3.62% for the quarter ended June 30, 2022 and 3.66% for the quarter ended September 30, 2021.
(7	)	Community State Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.72% for the quarter ended September 30, 2022, 3.66% for the quarter ended June 30, 2022 and 3.66% for the quarter ended June 30, 2021.
(8	)	Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 3.91% for the quarter ended September 30, 2022, 3.82% for the quarter ended June 30, 2022 and 3.67% for the quarter ended June 30, 2021.
(9	)	Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.


QCR Holdings, Inc. Consolidated Financial Highlights (Unaudited)

	As of
	September 30,			June 30,			March 31,			December 31,			September 30,
GAAP TO NON-GAAP RECONCILIATIONS	2022			2022			2022			2021			2021
	(dollars in thousands, except per share data)
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)

Stockholders' equity (GAAP)	$	737,072		$	743,138		$	667,924		$	677,010		$	649,814
Less: Intangible assets		155,153			155,940			82,922			83,415			83,923
Tangible common equity (non-GAAP)	$	581,919		$	587,198		$	585,002		$	593,595		$	565,891

Total assets (GAAP)	$	7,730,049		$	7,392,941		$	6,175,819		$	6,096,132		$	6,014,508
Less: Intangible assets		155,153			155,940			82,922			83,415			83,923
Tangible assets (non-GAAP)	$	7,574,896		$	7,237,001		$	6,092,897		$	6,012,717		$	5,930,585

Tangible common equity to tangible assets ratio (non-GAAP)		7.68	%		8.11	%		9.60	%		9.87	%		9.54	%



(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 Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,					September 30,
ADJUSTED NET INCOME (1)	2022			2022			2022			2021			2021			2022					2021
	(dollars in thousands, except per share data)

Net income (GAAP)	$	29,294		$	15,242		$	23,624		$	27,009		$	31,565		$	68,160				$	71,896

Less non-core items (post-tax) (2):
Income:
Securities gains (losses), net		-			-			-			-			-		$	-				$	(69	)
Mark to market gains (losses) on derivatives, net		714			342			715			77			(13	)		1,771				$	58
Gain on sale of loan		-			-			-			-			28			-				$	28
Total non-core income (non-GAAP)	$	714		$	342		$	715		$	77		$	15		$	1,771				$	17

Expense:
Disposition costs		-			-			-			3			-			-					7
Acquisition costs (2)		321			1,932			1,462			493			-			3,715					-
Post-acquisition compensation, transition and integration costs		48			3,789			-			-			-			3,837					-
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		-			-			-			-			-			-					-
Total non-core expense (non-GAAP)	$	369		$	15,512		$	1,462		$	496		$	-		$	17,343				$	741
Adjusted net income (non-GAAP) (1)	$	28,949		$	30,412		$	24,371		$	27,428		$	31,550		$	83,732				$	72,620

ADJUSTED EARNINGS PER COMMON SHARE (1)

Adjusted net income (non-GAAP) (from above)	$	28,949		$	30,412		$	24,371		$	27,428		$	31,550		$	83,732				$	72,620

Weighted average common shares outstanding		16,900,968			17,345,324			15,625,112			15,582,276			15,635,123			16,030,371					15,829,124
Weighted average common and common equivalent shares outstanding		17,110,691			17,549,107			15,852,256			15,838,246			15,869,798			16,243,921					16,058,420

Adjusted earnings per common share (non-GAAP):
Basic	$	1.71		$	1.75		$	1.56		$	1.76		$	2.02		$	5.22				$	4.59
Diluted	$	1.69		$	1.73		$	1.54		$	1.73		$	1.99		$	5.15				$	4.52

ADJUSTED RETURN ON AVERAGE ASSETS (1)

Adjusted net income (non-GAAP) (from above)	$	28,949		$	30,412		$	24,371		$	27,428		$	31,550		$	83,732				$	72,620

Average Assets	$	7,652,463		$	7,324,470		$	6,115,127		$	6,121,446		$	5,982,583		$	7,005,988				$	5,789,753

Adjusted return on average assets (annualized) (non-GAAP)		1.51	%		1.66	%		1.59	%		1.79	%		2.11	%		1.59	%				1.67	%

NET INTEREST MARGIN (TEY) (4)

Net interest income (GAAP)	$	60,769		$	59,400		$	45,733		$	46,513		$	46,229		$	165,902				$	131,720
Plus: Tax equivalent adjustment (5)		4,459			3,396			2,933			2,800			2,708			10,785					7,411
Net interest income - tax equivalent (Non-GAAP)	$	65,228		$	62,796		$	48,666		$	49,313		$	48,937		$	176,687				$	139,131
Less: Acquisition accounting net accretion		1,080			1,695			118			88			456			2,893					1,251
Adjusted net interest income	$	64,148		$	61,101		$	48,548		$	49,225		$	48,481		$	173,794				$	137,880
Less: PPP income		-			125			530			1,365			1,910			125					5,831
Adjusted net interest income, excluding PPP income	$	64,148		$	60,976		$	48,018		$	47,860		$	46,571		$	173,669				$	132,049

Average earning assets	$	6,975,857		$	6,742,095		$	5,625,813		$	5,602,222		$	5,451,571		$	6,452,867				$	5,330,338

Net interest margin (GAAP)		3.46	%		3.53	%		3.30	%		3.29	%		3.36	%		3.44	%				3.30	%
Net interest margin (TEY) (Non-GAAP)		3.71	%		3.74	%		3.50	%		3.50	%		3.56	%		3.66	%				3.49	%
Adjusted net interest margin (TEY) (Non-GAAP)		3.65	%		3.64	%		3.50	%		3.49	%		3.53	%		3.60	%				3.46	%
Adjusted net interest margin, excluding PPP income (TEY) (Non-GAAP)		3.65	%		3.63	%		3.46	%		3.39	%		3.39	%		3.60	%				3.31	%

EFFICIENCY RATIO (6)

Noninterest expense (GAAP)	$	47,746		$	54,248		$	38,325		$	39,412		$	41,387		$	140,319				$	114,290
Net interest income (GAAP)	$	60,769		$	59,400		$	45,733		$	46,513		$	46,229		$	165,902		$	-	$	131,720
Noninterest income (GAAP)		21,095			22,782			15,633			22,985			34,652			59,510					77,437
Total income	$	81,864		$	82,182		$	61,366		$	69,498		$	80,881		$	225,412				$	209,157

Efficiency ratio (noninterest expense/total income) (Non-GAAP)		58.32	%		66.01	%		62.45	%		56.71	%		51.17	%		62.25	%				54.64	%

LOAN GROWTH ANNUALIZED, EXCLUDING ACQUIRED AND PPP LOANS
Total loans and leases	$	6,008,610		$	5,797,903		$	4,827,868		$	4,680,132		$	4,599,730		$	6,008,610				$	4,599,730
Less: Acquired loans (7)		-			807,599			-			-			-			-					-
Less: PPP loans		79			79			6,340			28,181			83,575			79					83,575
Total loans and leases, excluding acquired and PPP loans	$	6,008,531		$	4,990,225		$	4,821,528		$	4,651,951		$	4,516,155		$	6,008,531		$	-	$	4,516,155

Loan growth annualized, excluding acquired and PPP loans		14.54	%		14.00	%		14.58	%		12.03	%		23.04	%		15.73	%				16.08	%


(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 10.25%.
(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 Third Quarter 2022 Results

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