QCR HOLDINGS INC

Liquidity measures the ability of the Company to meet maturing obligations and its existing commitments, to withstand fluctuations in deposit levels, to fund its operations, and to provide for customer credit needs. The Company monitors liquidity risk through contingency planning stress testing on a regular basis. The Company seeks to avoid an over-concentration of funding sources and to establish and maintain contingent funding facilities that can be drawn upon if normal funding sources become unavailable. One source of liquidity is cash and short-term assets, such as interest-bearing deposits in other banks and federal funds sold, which totaled $186.7 million and $237.6 million at September 30, 2026 and 2025, respectively. The Company’s on-balance sheet liquidity position can fluctuate based on short-term activity in deposits and loans.

The subsidiary banks have a variety of sources of short-term liquidity available to them, including federal funds purchased from correspondent banks, FHLB advances, wholesale structured repurchase agreements, brokered deposits, lines of credit, borrowing at the Federal Reserve Discount Window, sales of securities AFS, and loan/lease participations or sales. The Company also generates liquidity from the regular principal payments and prepayments made on its loan/lease portfolio and on the regular monthly payments on its securities portfolio.

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At September 30, 2026, the subsidiary banks had 26 lines of credit totaling $926.5 million with upstream correspondent banks, of which $485.7 million was secured and $440.8 million was unsecured. At September 30, 2026, the Company had the full $926.5 million available under these lines of credit.

At December 31, 2025, the subsidiary banks had 26 lines of credit totaling $930.7 million, of which $489.9 million was secured and $440.8 million was unsecured. At December 31, 2025, $930.7 million was available under these lines of credit.

The Company has emphasized growing the number and amount of available lines of credit in an effort to strengthen this contingent source of liquidity. Additionally, the Company maintains a $60.0 million secured revolving credit note with a variable interest rate and a maturity of June 30, 2027. At September 30, 2026, the full $60.0 million was available.

As of September 30, 2026, the Company had $841.1 million in actual correspondent banking deposits spread over 187 relationships. While the Company believes that these funds are relatively stable, there is the potential for large fluctuations that can impact liquidity. Seasonality and the liquidity needs of these correspondent banks can impact balances. Management closely monitors these fluctuations and runs stress scenarios to measure the impact on liquidity and interest rate risk with various levels of correspondent deposit run-off.

Investing activities used cash of $618.8 million during the first nine months of 2026, compared to $544.1 million for the same period of 2025. The net increase in federal funds sold was $16.5 million for the first nine months of 2026, compared to a net decrease of $5.0 million for the same period of 2025. The net decrease in interest-bearing deposits at financial institutions was $64.5 million for the first nine months of 2026, compared to a net decrease of $5.6 million for the same period of 2025. Proceeds from calls, maturities, and paydowns of securities were $73.2 million for the first nine months of 2026, compared to $63.9 million for the same period of 2025. Purchases of securities used cash of $185.9 million for the first nine months of 2026, compared to $170.5 million for the same period of 2025. The net increase in loans/leases used cash of $492.1 million for the first nine months of 2026 compared to a net increase in loans of $407.5 million for the same period of 2025.

Financing activities provided cash of $125.0 million for the first nine months of 2026, compared to cash provided by financing activities of $443.9 million for same period of 2025. Net decreases in deposits totaled $211.0 million for the first nine months of 2026, compared to net increases in deposits of $318.9 million for the same period of 2025. During the first nine months of 2026, the Company's short-term borrowings increased $2.1 million compared to an increase in short-term borrowings of $1.1 million for the same period of 2025. Net increase in overnight advances totaled $388.0 million for the first nine months of 2026 as compared to a net increase of $5.0 million for the same period of 2025. Payments on other borrowings totaled $8.2 million for the first nine months of 2026. There were no payments on other borrowings during the first nine months of 2025. Repurchase and cancellation of shares in the first nine months of 2026 totaled $43.9 million, as compared to $9.0 million repurchase and cancellation of shares in the first nine months of 2025.

Total cash provided by operating activities was $506.5 million for the first nine months of 2026, compared to net cash provided by operating activities of $86.1 million for the same period of 2025.

Throughout its history, the Company has secured additional capital through various sources, including the issuance of common and preferred stock, as well as trust preferred securities and subordinated notes.

As of September 30, 2026 and December 31, 2025, the subsidiary banks remained “well-capitalized” in accordance with regulatory capital requirements administered by the federal banking authorities. Refer to Note 10 of the Consolidated Financial Statements for additional information regarding regulatory capital.

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