QCR HOLDINGS INC

The subsidiary banks purchase federal funds for short-term funding needs from the FRB or from their correspondent banks. The table below presents the composition of the Company's short-term borrowings:

The Company's federal funds purchased fluctuate based on the short-term funding needs of the Company's subsidiary banks.

Part I

Item 2

As a result of their memberships in the FHLB of Des Moines, the subsidiary banks have the ability to borrow funds for short or long-term purposes under a variety of programs. The subsidiary banks can utilize FHLB advances for loan matching as a hedge against the possibility of changing interest rates and when these advances provide a less costly or more readily available source of funds than customer deposits.

The table below presents the Company's FHLB advances as of the periods indicated:

The Company had an increase in overnight FHLB advances of $365.0 million from June 30, 2026 to September 30, 2026. The increase was primarily due to funding needs from strong loan growth during the third quarter of 2026 and the decline in correspondent deposits.

It is management's intention to reduce its reliance on wholesale funding, including FHLB advances and brokered deposits. Replacement of this funding with core deposits helps to reduce interest expense as wholesale funding tends to be higher cost. However, the Company may choose to utilize advances and/or brokered deposits to supplement funding needs, as this is a way for the Company to effectively and efficiently manage interest rate risk.

The table below presents the maturity schedule including weighted average interest cost for the Company's combined wholesale funding portfolio (defined as FHLB advances and brokered deposits):

During the first nine months of 2026, wholesale funding increased $316.2 million due to outflows of correspondent deposit balances during the quarter largely due to timing, with over $500.0 million of deposits returning to our balance sheet shortly after the quarter ended.

The Company renewed its revolving credit note in the second quarter of 2026. At renewal, the available amount under the line of credit remained at $60.0 million for which there was no outstanding balance as of September 30, 2026. Interest on the revolving line of credit is calculated at the greater of: (a) the effective Prime Rate less 0.50%, or (b) 3.00% per annum. The collateral on the revolving line of credit is 100% of the outstanding stock of each of the Company’s bank subsidiaries.

The Company had other borrowings totaling $99.5 million as of September 30, 2026. In August 2025, the Company pledged a portion of its HTM municipal securities in exchange for term borrowings through a repurchase agreement. The repurchase agreements are reported as secured borrowings as we maintain effective control of the financed assets.

Part I

Item 2

The Company had subordinated notes totaling $234.4 million and $234.0 million as of September 30, 2026 and 2025, respectively.

The Company had junior subordinated debentures totaling $49.1 million and $49.0 million as of September 30, 2026 and 2025, respectively.