QCR HOLDINGS INC

Previous wording

This section reviews the financial condition and results of operations of the Company and its subsidiaries as of and for the three months ending March 31, 2024. Some tables may include additional periods to comply with disclosure requirements or to illustrate trends. When reading this discussion, also refer to the Consolidated Financial Statements and related notes in this report. Page locations and specific sections and notes that are referred to in this discussion are listed in the table of contents.

Current wording

This section reviews the financial condition and results of operations of the Company and its subsidiaries as of and for the three and six months ending June 30, 2024. Some tables may include additional periods to comply with disclosure requirements or to illustrate trends. When reading this discussion, also refer to the Consolidated Financial Statements and related notes in this report. Page locations and specific sections and notes that are referred to in this discussion are listed in the table of contents.

Previous wording

The Company was formed in February 1993 for the purpose of organizing QCBT. Over the past thirty-one years, the Company has grown to include four banking subsidiaries and a number of nonbanking subsidiaries. As of March 31, 2024, the Company had $8.6 billion in consolidated assets, including $6.6 billion in net loans/leases, and $6.8 billion in deposits. The financial results of acquired entities for the periods since their acquisition are included in this report. Further information related to acquired entities has been presented in the annual reports previously filed with the SEC corresponding to the year of each acquisition.

Current wording

The Company was formed in February 1993 for the purpose of organizing QCBT. Over the past thirty-one years, the Company has grown to include four banking subsidiaries and a number of nonbanking subsidiaries. As of June 30, 2024, the Company had $8.9 billion in consolidated assets, including $6.8 billion in net loans/leases, and $6.8 billion in deposits. The financial results of acquired entities for the periods since their acquisition are included in this report. Further information related to acquired entities has been presented in the annual reports previously filed with the SEC corresponding to the year of each acquisition.

Previous wording

The Company reported net income of $26.7 million and diluted EPS of $1.58 for the quarter ended March 31, 2024. By comparison, for the quarter ended December 31, 2023, the Company reported net income of $32.9 million and diluted EPS of $1.95. For the quarter ended March 31, 2023, the Company reported net income of $27.2 million, and diluted EPS of $1.60.

Current wording

The Company reported net income of $29.1 million and diluted EPS of $1.72 for the quarter ended June 30, 2024. By comparison, for the quarter ended March 31, 2024, the Company reported net income of $26.7 million and diluted EPS of $1.58. For the quarter ended June 30, 2023, the Company reported net income of $28.4 million, and diluted EPS of $1.69. For the six months ended June 30, 2024, the Company reported net income of $55.8 million and diluted EPS of $3.30. By

Previous wording

The first quarter of 2024 was also highlighted by the following results and events:

Current wording

The second quarter of 2024 was also highlighted by the following results and events (see section titled “GAAP to Non-GAAP Reconciliations” for additional information):

Previous wording

The Company reported adjusted net income (non-GAAP) of $26.9 million, with adjusted diluted EPS of $1.59 for the three months ended March 31, 2024. See section titled “GAAP to Non-GAAP Reconciliations” for additional information. Adjusted net income for the three months ended March 31, 2024 excludes a number of non-recurring items, after-tax, as set forth in the GAAP to Non-GAAP Reconciliation section.

Current wording

The Company reported adjusted net income (non-GAAP) of $29.3 million, with adjusted diluted EPS (non-GAAP) of $1.73 for the three months ended June 30, 2024. See section titled “GAAP to Non-GAAP Reconciliations” for additional information. Adjusted net income (non-GAAP) for the three months ended June 30, 2024 excludes a non-recurring item, after-tax, as set forth in the GAAP to Non-GAAP Reconciliation section. The Company reported adjusted net income (non-GAAP) of $56.1 million, with adjusted diluted EPS (non-GAAP) of $3.32 for the six months ended June 30, 2024. Adjusted net income (non-GAAP) for the six months ended June 30, 2024 excludes a non-recurring item, after-tax, as set forth in the GAAP to Non-GAAP Reconciliation section.

Previous wording

The Company has taken the following actions during the first quarter of 2024 to support its corporate strategy:

Current wording

The Company has taken the following actions during the second quarter of 2024 to support its corporate strategy:

Previous wording

Net interest income, on a GAAP basis, decreased 4% for the quarter ended March 31, 2024, compared to the same quarter of the prior year. Net interest income, on a tax equivalent basis (non-GAAP), remained the same for the quarter ended March 31, 2024, compared to the same quarter of the prior year. Several non-client factors drove this decrease, including the maturity of $125 million of interest rates caps on the Company’s indexed deposits and the conversion of $65 million of subordinated debt to a higher floating rate, which contributed a combined $1.3 million of additional interest expense. In addition, loan discount accretion decreased by $310 thousand and there was one less day in the quarter which had an impact of approximately $600 thousand decrease in net interest income.

Current wording

Net interest income, on a GAAP basis, increased 6% for the quarter ended June 30, 2024, compared to the same quarter of the prior year. Net interest income, on a tax equivalent basis (non-GAAP), increased 9% for the quarter ended June 30, 2024, compared to the same quarter of the prior year. The increase was driven by higher average earning assets.

Previous wording

Acquisition accounting net accretion can fluctuate mostly depending on the payoff activity of the acquired loans. In evaluating net interest income and NIM, it’s important to understand the impact of acquisition accounting net accretion when comparing periods. The above table reports NIM with and without the acquisition accounting net accretion to allow for more appropriate comparisons. A comparison of acquisition accounting net accretion included in NIM is as follows:

Current wording

Acquisition accounting net accretion can fluctuate mostly depending on the payoff activity of the acquired loans. In evaluating net interest income and NIM, it is important to understand the impact of acquisition accounting net accretion when comparing periods. The above table reports NIM with and without the acquisition accounting net accretion to allow for more appropriate comparisons. A comparison of acquisition accounting net accretion included in NIM is as follows: