About QCR Holdings

QCR Holdings, Inc., a multi-bank holding company, provides full-service commercial and consumer banking and trust and asset management services. The company serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny and Springfield communities through the following four wholly-owned banking subsidiaries (collectively, the banks), which provide full-service commercial and consumer banking and trust and asset management services, including Quad City Bank & Trust (QCBT); Cedar Rapids Bank & Trust (CRBT); Community State Bank (CSB); and Guaranty Bank (GB). On April 1, 2022, the company completed its acquisition of Guaranty Federal Bancshares (GFED) and on April 2, 2022, merged Guaranty Bank into Springfield First Community Bank (SFCB), the company’s Springfield-based charter. The combined bank changed its name to Guaranty Bank. The company engages in direct financing lease contracts and equipment financing agreements through m2 Equipment Finance, LLC (m2), a wholly owned subsidiary of QCBT. The company’s Commercial Banking business is geographically divided by markets into the operating segments corresponding to the four subsidiary banks wholly owned by the company: QCBT, CRBT, CSB and GB. QCBT is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. QCBT provides full service commercial, correspondent, and consumer banking and trust and asset management services in the Quad Cities and adjacent communities through its five offices located in Bettendorf and Davenport, Iowa and in Moline, Illinois. CRBT is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. The company commenced operations in Cedar Rapids, operating as a branch of QCBT. The Cedar Rapids branch operation then began functioning under the CRBT charter in 2001. Acquired branches of CNB operate as a division of CRBT under the name Community Bank & Trust. CRBT provides full-service commercial and consumer banking and trust and asset management services to Cedar Rapids, Marion and Waterloo/Cedar Falls, Iowa and adjacent communities through its facilities. The headquarters for CRBT is located in downtown Cedar Rapids with three other branches located in Cedar Rapids. CSB is an Iowa-chartered commercial bank that is a member of the Federal Reserve System. CSB provides full-service commercial and consumer banking to Des Moines, Iowa and adjacent communities through its headquarters located in Ankeny, Iowa and its other branch facilities throughout the greater Des Moines area. Guaranty Bank (GB) is a Missouri-chartered commercial bank that is a member of the Federal Reserve System. GB provides full-service commercial and consumer banking to the Springfield and Joplin, Missouri area and adjacent communities through its headquarters located in Springfield, Missouri and its other branch facilities throughout the greater Springfield and Joplin area. Other Operating Subsidiaries. m2, which is based in Brookfield, Wisconsin, is engaged in the business of lending and leasing machinery and equipment to C&I businesses under direct financing lease contracts and equipment financing agreements. The company’s principal business consists of attracting deposits and investing those deposits in loans/leases and securities. The deposits of the subsidiary banks are insured to the maximum amount allowable by the Federal Deposit Insurance Corporation (FDIC). The Federal Reserve is the primary federal regulator of the company, QCBT, CRBT, CSB and GB. QCBT, CRBT and CSB are also regulated by the Iowa Superintendent of Banking and GB is regulated by the Missouri Division of Finance. The Federal Deposit Insurance Corporation (FDIC), as administrator of the Deposit Insurance Fund (DIF), also has regulatory authority over the subsidiary banks. Lending/Leasing The company and its subsidiaries provide a broad range of commercial and retail lending/leasing and investment services to corporations, partnerships, individuals, and government agencies. The subsidiary banks actively market their services to qualified lending and deposit clients. Officers actively solicit the business of new clients entering their market areas, as well as long-standing members of the local business community. The company has an established lending/leasing policy. The company recognizes that a diversified loan/lease portfolio contributes to reducing risk in the overall loan/lease portfolio. The subsidiary banks also make commercial real estate (CRE) loans. CRE loans are subject to underwriting standards and processes similar to C&I loans, in addition to those standards and processes specific to real estate loans. Collateral for these loans generally includes the underlying real estate and improvements, and may include additional assets of the borrower. The company’s lending policy specifies maximum loan-to-value limits based on the category of CRE (commercial real estate loans on improved property, raw land, land development, and commercial construction). The company’s lending policy also includes guidelines for real estate appraisals and evaluations, including minimum appraisal and evaluation standards based on certain transactions. In addition, the subsidiary banks often take personal guarantees to help assure repayment. In addition, the banks have established policy limits around non-owner occupied CRE and total construction, land development and other land loans. The company recognizes that a diversified loan/lease portfolio. The company actively monitors concentrations within the loan/lease portfolio to ensure appropriate diversification and concentration risk is maintained. C&I Lending The areas of emphasis include loans to small and mid-sized businesses with a wide range of operations such as wholesalers, manufacturers, building contractors, business services companies, other banks, and retailers. The subsidiary banks provide a wide range of business loans, including lines of credit for working capital and operational purposes, and term loans for the acquisition of facilities, equipment and other purposes. For Commercial and industrial (C&I) loans, the company assigns internal risk ratings which are largely dependent upon the aforementioned approval factors. The company’s lending policy specifies approved collateral types and corresponding maximum advance percentages. The company’s lending policy specifies maximum term limits for C&I loans. CRE Lending The subsidiary banks also make commercial real estate (CRE) loans. CRE loans are subject to underwriting standards and processes similar to C&I loans, in addition to those standards and processes specific to real estate loans. The company’s lending policy specifies maximum loan-to-value limits based on the category of CRE (commercial real estate loans on improved property, raw land, land development, and commercial construction). The company’s lending policy also includes guidelines for real estate appraisals and evaluations, including minimum appraisal and evaluation standards based on certain transactions. In addition, the subsidiary banks often take personal guarantees to help assure repayment. Direct Financing Leasing m2 leases machinery and equipment to C&I customers under direct financing leases. All lease requests are subject to the credit requirements and criteria as set forth in the lending/leasing policy. In all cases, a formal independent credit analysis of the lessee is performed. The following private and public sector business assets are generally acceptable to consider for lease funding, such as computer systems; photocopy systems; fire trucks; specialized road maintenance equipment; medical equipment; commercial business furnishings; vehicles classified as heavy equipment; trucks and trailers; equipment classified as plant or office equipment; and marine boat lifts. m2 will generally refrain from funding leases of the following type: Leases collateralized by non-marketable items; Leases collateralized by consumer items, such as vehicles, household goods, recreational vehicles, boats, etc.; Leases collateralized by used equipment, unless its remaining useful life can be readily determined; and Leases with a repayment schedule exceeding seven years. Residential Real Estate Lending Generally, the subsidiary banks residential real estate loans conform to the underwriting requirements of Freddie Mac and Fannie Mae to allow the subsidiary banks to resell loans in the secondary market. Installment and Other Consumer Lending The consumer lending department of each subsidiary bank provides many types of consumer loans, including home improvement, home equity, motor vehicle, signature loans and small personal credit lines. The company’s lending policy addresses specific credit guidelines by consumer loan type. In particular, for home equity loans and home equity lines of credit, the minimum credit bureau score is 650. For both home equity loans and lines of credit, the maximum advance rate is 90% of value for primary residences and 80% for second/vacation homes. The maximum term on home equity loans is 10 years and maximum amortization is 15 years. The maximum term on home equity lines of credit is 10 years. Investment Portfolio As of December 31, 2022, the company’s investment portfolio included U.S. treasuries and govt. sponsored agency securities; residential mortgage-backed and related securities; municipal securities; asset-backed securities; and other securities. Deposits As of December 31, 2022, the company’s deposits included noninterest bearing demand deposits; interest bearing demand deposits; time deposits; and brokered deposits. As a bank holding company, the company is registered with, and is subject to regulation, supervision and enforcement by, the Federal Reserve under the Bank Holding Company Act of 1956 (BHCA). The company is legally obligated to act as a source of financial strength to the Banks and to commit resources to support the banks in circumstances where the company might not otherwise do so. Under the BHCA, the company is subject to periodic examination by the Federal Reserve. The company is required to file with the Federal Reserve periodic reports of the company’s operations and such additional information regarding the company and its subsidiaries as the Federal Reserve may require. In order to maintain its status as a financial holding company, the company and the banks must be well-capitalized, well-managed, and the banks must have a least a satisfactory Community Reinvestment Act (CRA) rating. The company’s common stock is registered with the Securities and Exchange Commission (SEC) under the Securities Act of 1933, as amended, and the Exchange Act. Consequently, the company is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Securities Exchange Act of 1934, as amended (Exchange Act). The company owns four subsidiary banks: QCBT, CRBT and CSB are chartered under Iowa law (collectively, the Iowa Banks) and GB is chartered under Missouri law. The deposit accounts of the banks are insured by the FDIC’s DIF to the maximum extent provided under federal law and FDIC regulations, $250,000 per insured depositor category. All four of the company’s subsidiary banks are members of the Federal Reserve System (member banks). QCBT owns QCIA, a registered investment adviser, as a wholly-owned subsidiary. As Iowa-chartered, FDIC-insured banks, the Iowa Banks are subject to the examination, supervision, reporting and enforcement requirements of the Iowa Division of Banking, as the chartering authority for Iowa banks. As a Missouri-chartered, FDIC-insured bank, GB is subject to the examination, supervision, reporting and enforcement requirements of the Missouri Division of Finance, as the chartering authority for Missouri banks. All four of the company’s subsidiary banks also are subject to the examination, reporting and enforcement requirements of the Federal Reserve, as the primary federal regulator of member banks. In addition, the FDIC, as administrator of the DIF, has regulatory authority over the banks. As FDIC-insured institutions, the banks are required to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted a risk-based assessment system whereby FDIC-insured institutions pay insurance premiums at rates based on their risk classification. For institutions like the banks that are not considered large and highly complex banking organizations, assessments are based on examination ratings and financial ratios. The total base assessment rates range from 1.5 basis points to 30 basis points. The banks are permitted to make investments and engage in activities directly or through subsidiaries as authorized by Iowa or Missouri law, as applicable. The banks are subject to certain restrictions imposed by federal law on covered transactions between each bank and its affiliates. The company is an affiliate of the banks for purposes of these restrictions, and covered transactions subject to the restrictions include extensions of credit to the company, investments in the stock or other securities of the company and the acceptance of the stock or other securities of the company as collateral for loans made by any of the banks. The banks are each a member of the FHLB, which serves as a central credit facility for its members. The CRA requires the banks to have a continuing and affirmative obligation in a safe and sound manner to help meet the credit needs of the entire community, including low- and moderate-income neighborhoods. The USA PATRIOT Act, the Bank Secrecy Act and other similar laws are designed to deny terrorists and criminals the ability to obtain access to the U.S. financial system and have significant implications for FDIC-insured institutions and other businesses involved in the transfer of money. QCIA provides financial investment services as part of the wealth management operations of the company. QCIA is an investment adviser registered with the SEC. The CFPB has broad rulemaking authority for a wide range of consumer protection laws that apply to all providers of consumer products and services, including the banks, as well as the authority to prohibit unfair, deceptive or abusive acts and practices. The Bureau of Consumer Financial Protection (CFPB) has examination and enforcement authority over providers with more than $10 billion in assets. FDIC-insured institutions with $10 billion or less in assets, like the banks, continue to be examined by their applicable bank regulators. History QCR Holdings, Inc. was founded in 1993. The company was incorporated in 1993 under the laws of the state of Delaware.