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.

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 no change in term FHLB advances from March 31, 2025 to June 30, 2025. The Company had an increase in overnight FHLB advances of $80.0 million from March 31, 2025 to June 30, 2025. The increase was primarily due to strong loan and investment growth resulting in higher funding needs during the second quarter of 2025. The Company had a decrease in overnight FHLB advances of $60.0 million from December 31, 2024 to June 30, 2025 due to deposit growth.

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.

Part I

Item 2

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 six months of 2025, wholesale funding decreased $114.1 million due to strong loan growth.

The Company renewed its revolving credit note in the second quarter of 2025. At renewal, the available amount under the line of credit increased from $50.0 million to $60.0 million for which there was no outstanding balance as of June 30, 2025. 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 the Company’s bank subsidiaries.

The Company had subordinated notes totaling $233.7 million and $233.3 million as of June 30, 2025 and 2024, respectively.

The Company had junior subordinated debentures totaling $48.9 million and $48.8 million as of June 30, 2025 and 2024, respectively.