QCR HOLDINGS INC

The ACL is established through provision expense to provide an estimated ACL. The following table shows the components of the provision for credit losses for the three and nine months ended September 30, 2026 and 2025:

The Company had a total provision for credit losses on loans and leases of $4.3 million for the third quarter of 2026 compared to $4.2 million for the same period of 2025. Provision for credit losses on loans and leases for the first nine months of 2026 totaled $11.7 million, a decrease from $13.6 million for the first nine months of 2025. The decrease was primarily driven by a decrease in NPAs and net charge-offs, partially offset by loan growth. The provision related to OBS was $128 thousand for the third quarter of 2026 compared to a provision of $80 thousand for the third quarter of 2025 and was a negative provision of $50 thousand for the first nine months of 2026 compared to a provision of negative $1.1 million for the first nine months of 2025. The balance primarily fluctuates with changes in the balance of unfunded commitments. There was no provision related to HTM or AFS securities for the first nine months of 2026 or 2025.

The ACL for loans and leases is established based on a number of factors, including the Company's historical loss experience, delinquencies and charge-off trends, economic and other forecasts, the local, state and national economies and risk associated with the loans/leases and securities in the portfolio, as described in more detail in the “Critical Accounting Policies and Critical Accounting Estimates” section of this report.

The Company had an ACL for loans/leases held for investment of 1.23% of total gross loans/leases held for investment at September 30, 2026, compared to 1.24% at both June 30, 2026 and September 30, 2025.

Additional discussion of the Company's allowance can be found in the “Financial Condition” section of this report.

Part I

Item 2