QCR Holdings, Inc. Announces Net Income of $29.0 Million for the Second Quarter of 2025

Second Quarter 2025 Highlights

• Net income of $29.0 million, or $1.71 per diluted share
• Adjusted net income¹ of $29.4 million, or $1.73 per diluted share
• NIM TEY¹ expanded four basis points to 3.46%
• Adjusted ROAA¹ of 1.29% annualized
• Capital markets revenue growth of 51% on a linked-quarter basis
• Nonperforming assets declined $5.5 million, or 11%
• Tangible book value per share¹ grew $1.64, or 13% annualized
• TCE/TA ratio¹ improved 22 basis points to 9.92%

MOLINE, Ill., July 23, 2025 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced quarterly net income of $29.0 million and diluted earnings per share (“EPS”) of $1.71 for the second quarter of 2025, compared to net income of $25.8 million and diluted EPS of $1.52 for the first quarter of 2025.

Adjusted net income¹ and adjusted diluted EPS¹ for the second quarter of 2025 were $29.4 million and $1.73, respectively, for the first quarter of 2025 compared to $26.0 million and $1.53, respectively, for the first quarter of 2025 and $29.3 million, and $1.73 respectively for the second quarter of 2024.

	For the Quarter Ended
	June 30,		March 31,		June 30,
$ in millions (except per share data)	2025		2025		2024
Net Income	$	29.0	$	25.8	$	29.1
Diluted EPS	$	1.71	$	1.52	$	1.72
Adjusted Net Income1	$	29.4	$	26.0	$	29.3
Adjusted Diluted EPS1	$	1.73	$	1.53	$	1.73

“We delivered strong second quarter results highlighted by a significant increase in net interest income from the previous quarter, driven by both net interest margin expansion and strong loan growth, as well as improved capital markets revenue, and disciplined noninterest expense management,” said Todd Gipple, President and Chief Executive Officer. “These robust results led to continued capital accretion and a substantial increase in tangible book value per share¹.”

Significant Net Interest Income Growth as Margin Expansion Continues

Net interest income for the second quarter of 2025 totaled $62.1 million, an increase of $2.1 million, or 14% annualized, from the first quarter of 2025, driven by strong earning asset growth, expanded yield on loans and investments, and lower cost of funds.   Net interest margin (“NIM”) was 2.97% and NIM on a tax-equivalent yield (“TEY”) basis¹ was 3.46% for the second quarter, as compared to 2.95% and 3.42% for the prior quarter, respectively.

“Our NIM TEY¹ increased four basis points from the first quarter of 2025, which was at the top of our guidance range,” said Nick Anderson, Chief Financial Officer. “Looking ahead, we anticipate continued margin expansion and are guiding to an increase in third quarter NIM TEY¹ in a range from static to an increase of four basis points, assuming no Federal Reserve rate cuts,” added Mr. Anderson.

Improving Noninterest Income Driven by Capital Markets Revenue

Noninterest income for the second quarter of 2025 was $22.1 million, up from $16.9 million in the first quarter of 2025. The Company generated $9.9 million of capital markets revenue in the second quarter of 2025 compared to $6.5 million in the prior quarter. Wealth management revenue totaled $4.6 million, representing a slight decline from the first quarter of 2025. However, it increased $332 thousand or 8% compared to the second quarter of 2024 and rose 23% year-to-date on an annualized basis compared to the same period in 2024.

“During the second quarter of 2025 we saw improved low-income housing tax credit (“LIHTC”) lending activity compared to the first quarter as clients adjusted to the current environment. This increased activity drove 51% growth in our capital markets revenue. The sustained, long-term demand for affordable housing continues to support our LIHTC lending and related capital markets revenue. Our pipeline continues to improve as clients adapt to the evolving market conditions,” said Mr. Gipple.

“Given the strengthened pipeline, we are reaffirming our guidance for Capital Markets revenue to be in a range of $50 to $60 million for the next four quarters.  In addition, we are also providing guidance over a shorter horizon and expect capital markets revenue for the third quarter to be fully back to a more normalized level and in a range of $13 to $16 million for the quarter,” added Mr. Gipple.

Disciplined Noninterest Expense Management

Noninterest expense for the second quarter of 2025 totaled $49.6 million compared to $46.5 million for the first quarter of 2025 and $49.9 million for the second quarter of 2024. The $3.1 million linked-quarter increase was primarily due to higher capital markets revenue and strong loan growth resulting in an improved return on average assets which drove higher variable compensation. Professional and data processing expenses also increased and were related to the Company’s digital transformation.   

“While expenses increased compared to the first quarter, we held noninterest expense under the low end of our guidance range of $50 to $53 million, highlighting our expense flexibility,” said Mr. Anderson. “Noninterest expense remains well managed, down 9% year to date on an annualized basis compared to the same period in 2024. The Company’s efficiency ratio¹ was 58.9% in the second quarter. For the third quarter of 2025, we expect noninterest expense to be in the range of $52 to $55, million which includes certain costs associated with our digital transformation and assumes both capital markets revenue and loan growth are within our guidance range,” added Mr. Anderson.

Strong Loan Growth

In the second quarter of 2025, the Company’s total loans and leases held for investment grew by $102.6 million, to $6.9 billion. “Loan growth was 8% annualized when adding back the impact from the planned runoff of m2 Equipment Finance loans and leases. Second quarter loan growth was driven by both our LIHTC and traditional lending businesses. Our pipeline is strong, and we anticipate loan demand to increase as clients continue to adapt to current market conditions,” stated Mr. Gipple. “We continue to be optimistic about solid loan growth for the remainder of the year and are guiding to gross loan growth in a range of 8% to 10% in the second half of the year,” added Mr. Gipple.

Maintaining Core Deposit Strength

Following the robust deposit growth of $276.2 million, or 16% annualized, in the first quarter of 2025, the majority of those balances were retained throughout the second quarter. Total deposits declined slightly by $19.0 million, or 1% annualized from the first quarter, while average deposit balances increased $72.0 million. Year-to-date, core deposits have increased by $311 million, or 9% annualized.

Asset Quality Remains Excellent

The nonperforming assets (“NPAs”) to total assets ratio was 0.46% as of June 30, 2025, down seven basis points from the prior quarter. NPAs totaled $42.7 million at the end of the second quarter of 2025, a $5.5 million, or 11% decrease from the prior quarter.

Total criticized loans increased by $9.3 million on a linked-quarter basis. The ratio of criticized loans to total loans and leases as of June 30, 2025, increased to 2.16% as compared to 2.06% as of March 31, 2025. Despite the 10 basis point increase, the criticized loan ratio remains well below the Company’s long-term historical average.

The Company recorded a total provision for credit losses of $4.0 million during the quarter, which was down slightly from $4.2 million in the prior quarter. Net charge-offs were $6.3 million during the second quarter of 2025, an increase of $2.1 million from the prior quarter primarily due to the charge-off of loans that had previously been fully reserved. The allowance for credit losses to total loans held for investment was 1.28% for the second quarter.

Strong Tangible Book Value and Regulatory Capital Growth

The Company’s tangible book value per share¹ increased by $1.64, or 13% annualized, during the second quarter of 2025 due to the combination of strong earnings and a modest dividend.

As of June 30, 2025, the Company’s tangible common equity to tangible assets ratio (“TCE”)¹ increased 22 basis points to 9.92%. The improvement in TCE¹ was driven by strong earnings during the quarter. The total risk-based capital ratio increased to 14.26% and the common equity tier 1 ratio increased to 10.43% due to solid earnings growth during the quarter. By comparison, these ratios were 9.70%, 14.18%, and 10.27%, respectively, as of March 31, 2025. The Company remains focused on growing its regulatory capital.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, July 24, 2025, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through July 31, 2025. The replay access information is 877-344-7529 (international 412-317-0088); access code 8414968. A webcast of the teleconference can be accessed on the Company’s News and Events page at . An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Guaranty Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. The Company has 36 locations in Iowa, Missouri, and Illinois. As of June 30, 2025, the Company had $9.2 billion in assets, $6.9 billion in loans and $7.3 billion in deposits. For additional information, please visit the Company’s website at .

Endnotes

¹Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these adjusted measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

        

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, but are not limited to: (i) the strength of the local, state, national and international economies and financial markets, including effects of inflationary pressures, the threat or implementation of tariffs, trade wars and changes to immigration policy; (ii) changes in, and the interpretation and prioritization of, local, state and federal laws, regulations and governmental policies (including those concerning the Company’s general business); (iii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or threats thereof (including the Russian invasion of Ukraine and ongoing conflicts in the Middle East), or other adverse events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iv) new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB, the Securities and Exchange Commission (the “SEC”) or the PCAOB; (v) the imposition of tariffs or other governmental policies impacting the value of products produced by the Company’s commercial borrowers; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions, fintech companies, and digital asset service providers and the inability to attract new customers; (vii) rapid technological changes implemented by us and our third-party vendors, including the development and implementation of tools incorporating artificial intelligence; (viii) unexpected results of acquisitions, including failure to realize the anticipated benefits of the acquisitions and the possibility that transaction and integration costs may be greater than anticipated; (ix) the loss of key executives and employees, talent shortages and employee turnover; (x) changes in consumer spending; (xi) unexpected outcomes and costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company; (xii) the economic impact on the Company and its customers of climate change, natural disasters and exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates; (xiv) credit risk and risks from concentrations (by type of borrower, geographic area, collateral and industry) within our loan portfolio and large loans to certain borrowers (including CRE loans); (xv) the overall health of the local and national real estate market; (xvi) the ability to maintain an adequate level of allowance for credit losses on loans; (xvii) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure; (xviii) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds; (xix) the level of non-performing assets on our balance sheet; (xx) interruptions involving our information technology and communications systems or third-party servicers; (xxi) the occurrence of fraudulent activity, breaches or failures of our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (xxii) changes in the interest rates and repayment rates of the Company’s assets; (xxiii) the effectiveness of the Company’s risk management framework, and (xxiv) the ability of the Company to manage the risks associated with the foregoing. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the SEC.

Contact:

Nick W. Anderson                        

Chief Financial Officer                        

(309) 743-7707 

 

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
			As of
			June 30,			March 31,			December 31,			September 30,			June 30,
				2025			2025			2024			2024			2024
			(dollars in thousands)
		CONDENSED BALANCE SHEET
		Cash and due from banks	$	104,769		$	98,994		$	91,732		$	103,840		$	92,173
		Federal funds sold and interest-bearing deposits		145,704			225,716			170,592			159,159			102,262
		Securities, net of allowance for credit losses		1,263,452			1,220,717			1,200,435			1,146,046			1,033,199
		Loans receivable held for sale (1)		1,162			2,025			2,143			167,047			246,124
		Loans/leases receivable held for investment		6,923,762			6,821,142			6,782,261			6,661,755			6,608,262
		Allowance for credit losses		(88,732	)		(90,354	)		(89,841	)		(86,321	)		(87,706	)
		Intangibles		9,738			10,400			11,061			11,751			12,441
		Goodwill		138,595			138,595			138,595			138,596			139,027
		Derivatives		184,982			180,997			186,781			261,913			194,354
		Other assets		558,899			544,547			532,271			524,779			531,855
		Total assets	$	9,242,331		$	9,152,779		$	9,026,030		$	9,088,565		$	8,871,991
		Total deposits	$	7,318,353		$	7,337,390		$	7,061,187		$	6,984,633		$	6,764,667
		Total borrowings		509,359			429,921			569,532			660,344			768,671
		Derivatives		209,505			206,925			214,823			285,769			221,798
		Other liabilities		154,560			155,796			183,101			181,199			180,536
		Total stockholders' equity		1,050,554			1,022,747			997,387			976,620			936,319
		Total liabilities and stockholders' equity	$	9,242,331		$	9,152,779		$	9,026,030		$	9,088,565		$	8,871,991
		ANALYSIS OF LOAN PORTFOLIO
		Loan/lease mix: (2)
		Commercial and industrial - revolving	$	380,029		$	388,479		$	387,991		$	387,409		$	362,115
		Commercial and industrial - other		1,180,859			1,231,198			1,295,961			1,321,053			1,370,561
		Commercial and industrial - other - LIHTC		194,830			212,921			218,971			89,028			92,637
		Total commercial and industrial		1,755,718			1,832,598			1,902,923			1,797,490			1,825,313
		Commercial real estate, owner occupied		593,675			599,488			605,993			622,072			633,596
		Commercial real estate, non-owner occupied		1,036,049			1,040,281			1,077,852			1,103,694			1,082,457
		Construction and land development		454,022			403,001			395,557			342,335			331,454
		Construction and land development - LIHTC		1,075,000			1,016,207			917,986			913,841			750,894
		Multi-family		301,432			289,782			303,662			324,090			329,239
		Multi-family - LIHTC		950,331			888,517			828,448			973,682			1,148,244
		Direct financing leases		12,880			14,773			17,076			19,241			25,808
		1-4 family real estate		592,253			592,127			588,179			587,512			583,542
		Consumer		153,564			146,393			146,728			144,845			143,839
		Total loans/leases	$	6,924,924		$	6,823,167		$	6,784,404		$	6,828,802		$	6,854,386
		Less allowance for credit losses		88,732			90,354			89,841			86,321			87,706
		Net loans/leases	$	6,836,192		$	6,732,813		$	6,694,563		$	6,742,481		$	6,766,680
		ANALYSIS OF SECURITIES PORTFOLIO
		Securities mix:
		U.S. government sponsored agency securities	$	14,267		$	17,487		$	20,591		$	18,621		$	20,101
		Municipal securities		1,033,642			1,003,985			971,567			965,810			885,046
		Residential mortgage-backed and related securities		58,864			43,194			50,042			53,488			54,708
		Asset backed securities		6,684			7,764			9,224			10,455			12,721
		Other securities		67,358			66,105			65,745			39,190			38,464
		Trading securities (3)		82,900			82,445			83,529			58,685			22,362
		Total securities	$	1,263,715		$	1,220,980		$	1,200,698		$	1,146,249		$	1,033,402
		Less allowance for credit losses		263			263			263			203			203
		Net securities	$	1,263,452		$	1,220,717		$	1,200,435		$	1,146,046		$	1,033,199
		ANALYSIS OF DEPOSITS
		Deposit mix:
		Noninterest-bearing demand deposits	$	952,032		$	963,851		$	921,160		$	969,348		$	956,445
		Interest-bearing demand deposits		5,087,783			5,119,601			4,828,216			4,715,087			4,644,918
		Time deposits		974,341			951,606			953,496			942,847			859,593
		Brokered deposits		304,197			302,332			358,315			357,351			303,711
		Total deposits	$	7,318,353		$	7,337,390		$	7,061,187		$	6,984,633		$	6,764,667
		ANALYSIS OF BORROWINGS
		Borrowings mix:
		Term FHLB advances	$	145,383		$	145,383		$	145,383		$	145,383		$	135,000
		Overnight FHLB advances		80,000			-			140,000			230,000			350,000
		Other short-term borrowings		1,350			2,050			1,800			2,750			1,600
		Subordinated notes		233,701			233,595			233,489			233,383			233,276
		Junior subordinated debentures		48,925			48,893			48,860			48,828			48,795
		Total borrowings	$	509,359		$	429,921		$	569,532		$	660,344		$	768,671
(1)		Loans with a fair value of $0 million, $0 million, $0 million, $165.9 million and $243.2 million have been identified for securitization and are included in LHFS at June 30, 2025, March 31, 2025, December 31, 2024, September 30, 2024 and June 30, 2024, respectively.
(2)		Loan categories with significant LIHTC loan balances have been broken out separately.  Total LIHTC balances within the loan/lease portfolio were $2.3 billion at June 30, 2025.
(3)		Trading securities consisted of retained beneficial interests acquired in conjunction with Freddie Mac securitizations completed by the Company.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
				For the Quarter Ended
				June 30,		March 31,			December 31,			September 30,			June 30,
				2025			2025			2024			2024		2024
				(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income				$	120,247	$	116,673		$	121,642		$	125,420		$	119,746
Interest expense					58,165		56,687			60,438			65,698			63,583
Net interest income					62,082		59,986			61,204			59,722			56,163
Provision for credit losses					4,043		4,234			5,149			3,484			5,496
Net interest income after provision for credit losses				$	58,039	$	55,752		$	56,055		$	56,238		$	50,667
Trust fees (1)				$	3,395	$	3,686		$	3,456		$	3,270		$	3,103
Investment advisory and management fees (1)					1,254		1,254			1,320			1,229			1,214
Deposit service fees					2,187		2,183			2,228			2,294			1,986
Gains on sales of residential real estate loans, net					556		297			734			385			540
Gains on sales of government guaranteed portions of loans, net					40		61			49			-			12
Capital markets revenue					9,869		6,516			20,552			16,290			17,758
Earnings on bank-owned life insurance					998		524			797			814			2,964
Debit card fees					1,648		1,488			1,555			1,575			1,571
Correspondent banking fees					699		614			560			507			510
Loan related fee income					1,096		898			950			949			962
Fair value gain (loss) on derivatives and trading securities					230		(1,007	)		(1,781	)		(886	)		51
Other					143		378			205			730			218
Total noninterest income				$	22,115	$	16,892		$	30,625		$	27,157		$	30,889
Salaries and employee benefits				$	28,474	$	27,364		$	33,610		$	31,637		$	31,079
Occupancy and equipment expense					6,837		6,455			6,354			6,168			6,377
Professional and data processing fees					6,089		5,144			5,480			4,457			4,823
Restructuring expense					-		-			-			1,954			-
FDIC insurance, other insurance and regulatory fees					1,960		1,970			1,934			1,711			1,854
Loan/lease expense					407		381			513			587			151
Net cost of (income from) and gains/losses on operations of other real estate					50		(9	)		23			(42	)		28
Advertising and marketing					1,746		1,613			1,886			2,124			1,565
Communication and data connectivity					274		290			345			333			318
Supplies					252		207			252			278			259
Bank service charges					720		596			635			603			622
Correspondent banking expense					314		329			328			325			363
Intangibles amortization					661		661			691			690			690
Goodwill impairment					-		-			-			431			-
Payment card processing					547		594			516			785			706
Trust expense					413		357			381			395			379
Other					839		587			551			1,129			674
Total noninterest expense				$	49,583	$	46,539		$	53,499		$	53,565		$	49,888
Net income before income taxes				$	30,571	$	26,105		$	33,181		$	29,830		$	31,668
Federal and state income tax expense					1,552		308			2,956			2,045			2,554
Net income				$	29,019	$	25,797		$	30,225		$	27,785		$	29,114
Basic EPS				$	1.71	$	1.53		$	1.80		$	1.65		$	1.73
Diluted EPS				$	1.71	$	1.52		$	1.77		$	1.64		$	1.72
Weighted average common shares outstanding					16,928,542		16,900,785			16,871,652			16,846,200			16,814,814
Weighted average common and common equivalent shares outstanding					17,006,282		17,013,992			17,024,481			16,982,400			16,921,854
(1) Trust fees and investment advisory and management fees when combined are referred to as wealth management revenue.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
			For the Six Months Ended
			June 30,				June 30,
				2025				2024
			(dollars in thousands, except per share data)
INCOME STATEMENT
Interest income			$	236,920			$	234,795
Interest expense				114,852				123,933
Net interest income				122,068				110,862
Provision for credit losses				8,277				8,465
Net interest income after provision for credit losses			$	113,791			$	102,397
Trust fees			$	7,081			$	6,302
Investment advisory and management fees				2,508				2,315
Deposit service fees				4,370				4,008
Gains on sales of residential real estate loans, net				853				922
Gains on sales of government guaranteed portions of loans, net				101				36
Capital markets revenue				16,385				34,215
Earnings on bank-owned life insurance				1,522				3,832
Debit card fees				3,136				3,037
Correspondent banking fees				1,313				1,022
Loan related fee income				1,994				1,798
Fair value loss on derivatives and trading securities				(777	)			(112	)
Other				521				372
Total noninterest income			$	39,007			$	57,747
Salaries and employee benefits			$	55,838			$	62,939
Occupancy and equipment expense				13,292				12,891
Professional and data processing fees				11,233				9,436
FDIC insurance, other insurance and regulatory fees				3,930				3,799
Loan/lease expense				788				529
Net cost of (income from) and gains/losses on operations of other real estate				41				(2	)
Advertising and marketing				3,359				3,048
Communication and data connectivity				564				719
Supplies				459				534
Bank service charges				1,316				1,190
Correspondent banking expense				643				668
Intangibles amortization				1,322				1,380
Payment card processing				1,141				1,352
Trust expense				770				804
Other				1,426				1,291
Total noninterest expense			$	96,122			$	100,578
Net income before income taxes			$	56,676			$	59,566
Federal and state income tax expense				1,860				3,726
Net income			$	54,816			$	55,840
Basic EPS			$	3.24			$	3.32
Diluted EPS			$	3.22			$	3.30
Weighted average common shares outstanding				16,914,663				16,799,081
Weighted average common and common equivalent shares outstanding				17,010,136				16,916,264

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
			As of and for the Quarter Ended																For the Six Months Ended
			June 30,			March 31,			December 31,			September 30,			June 30,				June 30,			June 30,
				2025			2025			2024			2024			2024				2025			2024
			(dollars in thousands, except per share data)
		COMMON SHARE DATA
		Common shares outstanding		16,934,698			16,920,363			16,882,045			16,861,108			16,824,985
		Book value per common share (1)	$	62.04		$	60.44		$	59.08		$	57.92		$	55.65
		Tangible book value per common share (Non-GAAP) (2)	$	53.28		$	51.64		$	50.21		$	49.00		$	46.65
		Closing stock price	$	67.90		$	71.32		$	80.64		$	74.03		$	60.00
		Market capitalization	$	1,149,866		$	1,206,760		$	1,361,368		$	1,248,228		$	1,009,499
		Market price / book value		109.45	%		117.99	%		136.49	%		127.81	%		107.82	%
		Market price / tangible book value		127.45	%		138.11	%		160.59	%		151.07	%		128.62	%
		Earnings per common share (basic) LTM (3)	$	6.69		$	6.71		$	6.77		$	6.93		$	6.78
		Price earnings ratio LTM (3)	10.15 x			10.63 x			11.91 x			10.68 x			8.85 x
		TCE / TA (Non-GAAP) (4)		9.92	%		9.70	%		9.55	%		9.24	%		9.00	%
		CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
		Beginning balance	$	1,022,747		$	997,387		$	976,620		$	936,319		$	907,342
		Net income		29,019			25,797			30,225			27,785			29,114
		Other comprehensive income (loss), net of tax		(1,671	)		404			(9,628	)		12,057			(368	)
		Common stock cash dividends declared		(1,016	)		(1,015	)		(1,013	)		(1,012	)		(1,008	)
		Other (5)		1,475			174			1,183			1,471			1,239
		Ending balance	$	1,050,554		$	1,022,747		$	997,387		$	976,620		$	936,319
		REGULATORY CAPITAL RATIOS (6):
		Total risk-based capital ratio		14.26	%		14.18	%		14.10	%		13.87	%		14.21	%
		Tier 1 risk-based capital ratio		10.96	%		10.81	%		10.57	%		10.33	%		10.49	%
		Tier 1 leverage capital ratio		11.22	%		11.06	%		10.73	%		10.50	%		10.40	%
		Common equity tier 1 ratio		10.43	%		10.27	%		10.03	%		9.79	%		9.92	%
		KEY PERFORMANCE RATIOS AND OTHER METRICS
		Return on average assets (annualized)		1.27	%		1.14	%		1.34	%		1.24	%		1.33	%			1.21	%		1.30	%
		Return on average total equity (annualized)		11.15	%		10.14	%		12.15	%		11.55	%		12.63	%			10.65	%		12.32	%
		Net interest margin		2.97	%		2.95	%		2.95	%		2.90	%		2.82	%			2.95	%		2.82	%
		Net interest margin (TEY) (Non-GAAP)(7)		3.46	%		3.42	%		3.43	%		3.37	%		3.27	%			3.45	%		3.26	%
		Efficiency ratio (Non-GAAP) (8)		58.89	%		60.54	%		58.26	%		61.65	%		57.31	%			59.68	%		59.65	%
		Gross loans/leases held for investment / total assets		74.91	%		74.53	%		75.14	%		73.30	%		74.48	%			74.91	%		74.48	%
		Gross loans/leases held for investment / total deposits		94.61	%		92.96	%		96.05	%		95.38	%		97.69	%			94.61	%		97.69	%
		Effective tax rate		5.08	%		1.18	%		8.91	%		6.86	%		8.06	%			3.28	%		6.26	%
		Full-time equivalent employees (9)		1,001			972			980			976			988				1,001			988
		AVERAGE BALANCES
		Assets	$	9,155,473		$	9,015,439		$	9,050,280		$	8,968,653		$	8,776,002			$	9,085,843		$	8,663,429
		Loans/leases		6,881,731			6,790,312			6,839,153			6,840,527			6,779,075				6,836,274			6,688,844
		Deposits		7,218,540			7,146,286			7,109,567			6,858,196			6,687,188				7,182,612			6,641,324
		Total stockholders' equity		1,041,428			1,017,487			995,012			962,302			921,986				1,029,524			912,679
(1	)	Includes accumulated other comprehensive income (loss).
(2	)	Includes accumulated other comprehensive income (loss) and excludes intangible assets.  See GAAP to Non-GAAP reconciliations.
(3	)	LTM : Last twelve months.
(4	)	TCE / TCA : tangible common equity / total tangible assets.  See GAAP to non-GAAP reconciliations.
(5	)	Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
(6	)	(6) Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
(7	)	TEY : Tax equivalent yield.  See GAAP to Non-GAAP reconciliations.
(8	)	See GAAP to Non-GAAP reconciliations.
(9	)	The increase in full-time equivalent employees in the second quarter of 2025 includes 21 summer interns.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
		ANALYSIS OF NET INTEREST INCOME AND MARGIN
				For the Quarter Ended
				June 30, 2025							March 31, 2025							June 30, 2024
				Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost
				(dollars in thousands)
		Fed funds sold		$	14,285	$	159	4.40	%		$	9,009	$	99	4.40	%		$	13,065	$	183	5.54	%
		Interest-bearing deposits at financial institutions			151,898		1,634	4.31	%			166,897		1,804	4.38	%			80,998		1,139	5.66	%
		Investment securities - taxable			401,657		4,805	4.79	%			400,779		4,588	4.59	%			377,747		4,286	4.53	%
		Investment securities - nontaxable (1)			893,753		12,872	5.76	%			843,476		11,722	5.57	%			704,761		9,462	5.37	%
		Restricted investment securities			34,037		622	7.23	%			30,562		534	6.99	%			43,398		869	7.92	%
		Loans (1)			6,881,731		110,245	6.43	%			6,790,312		107,439	6.42	%			6,779,075		112,719	6.69	%
		Total earning assets (1)		$	8,377,361	$	130,337	6.24	%		$	8,241,035	$	126,186	6.20	%		$	7,999,044	$	128,658	6.46	%
		Interest-bearing deposits		$	5,080,367	$	38,604	3.05	%		$	5,005,853	$	37,698	3.05	%		$	4,649,625	$	40,924	3.54	%
		Time deposits			1,193,035		12,409	4.17	%			1,204,593		12,690	4.27	%			1,091,870		12,128	4.47	%
		Short-term borrowings			1,420		15	4.23	%			1,839		18	3.97	%			1,622		21	5.18	%
		Federal Home Loan Bank advances			250,603		2,853	4.50	%			177,883		1,996	4.49	%			464,231		6,238	5.32	%
		Subordinated debentures			233,631		3,599	6.16	%			233,525		3,601	6.17	%			233,207		3,582	6.14	%
		Junior subordinated debentures			48,904		685	5.54	%			48,871		684	5.60	%			48,774		688	5.58	%
		Total interest-bearing liabilities		$	6,807,960	$	58,165	3.42	%		$	6,672,564	$	56,687	3.44	%		$	6,489,329	$	63,581	3.93	%
		Net interest income (1)				$	72,172						$	69,499						$	65,077
		Net interest margin (2)						2.97	%						2.95	%						2.82	%
		Net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.46	%						3.42	%						3.27	%
		Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.45	%						3.41	%						3.26	%
		Cost of funds (4)						3.01	%						3.02	%						3.43	%
				For the Six Months Ended
				June 30, 2025							June 30, 2024
				Average Balance		Interest Earned or Paid		Average Yield or Cost			Average Balance		Interest Earned or Paid		Average Yield or Cost
				(dollars in thousands)
		Fed funds sold		$	11,662	$	258	4.40	%		$	16,510	$	452	5.41	%
		Interest-bearing deposits at financial institutions			159,356		3,438	4.35	%			86,277		2,339	5.45	%
		Investment securities - taxable			401,220		9,393	4.69	%			375,644		8,546	4.54	%
		Investment securities - nontaxable (1)			868,754		24,594	5.67	%			695,365		18,813	5.41	%
		Restricted investment securities			32,309		1,156	7.12	%			40,742		1,543	7.49	%
		Loans (1)			6,836,274		217,684	6.42	%			6,688,844		220,392	6.63	%
		Total earning assets (1)		$	8,309,575	$	256,523	6.22	%		$	7,903,382	$	252,085	6.41	%
		Interest-bearing deposits		$	5,041,914	$	76,302	3.05	%		$	4,589,479	$	80,027	3.51	%
		Time deposits			1,198,782		25,098	4.22	%			1,099,746		24,473	4.48	%
		Short-term borrowings			1,629		33	4.05	%			1,688		44	5.19	%
		Federal Home Loan Bank advances			214,444		4,849	4.50	%			409,725		10,977	5.30	%
		Subordinated debentures			233,579		7,201	6.17	%			233,154		7,062	6.06	%
		Junior subordinated debentures			48,888		1,369	5.57	%			48,758		1,381	5.60	%
		Total interest-bearing liabilities		$	6,739,236	$	114,852	3.43	%		$	6,382,550	$	123,964	3.90	%
		Net interest income (1)				$	141,671						$	128,121
		Net interest margin (2)						2.95	%						2.82	%
		Net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.45	%						3.26	%
		Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)						3.44	%						3.24	%
		Cost of funds (4)						3.01	%						3.39	%
(1	)	Includes nontaxable securities and loans.  Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(2	)	See "Select Financial Data - Subsidiaries" for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3	)	TEY : Tax equivalent yield.  See GAAP to Non-GAAP reconciliations.
(4	)	Cost of funds includes the effect of noninterest-bearing deposits.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
			As of
			June 30,			March 31,			December 31,			September 30,			June 30,
				2025			2025			2024			2024			2024
			(dollars in thousands, except per share data)
		ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
		Beginning balance	$	90,354		$	89,841		$	86,321		$	87,706		$	84,470
		Change in ACL for transfer of loans to LHFS		-			-			93			(1,812	)		498
		Credit loss expense		4,667			4,743			6,832			3,828			4,343
		Loans/leases charged off		(6,490	)		(4,944	)		(4,787	)		(3,871	)		(1,751	)
		Recoveries on loans/leases previously charged off		201			714			1,382			470			146
		Ending balance	$	88,732		$	90,354		$	89,841		$	86,321		$	87,706
		NONPERFORMING ASSETS
		Nonaccrual loans/leases	$	42,482		$	47,259		$	40,080		$	33,480		$	33,546
		Accruing loans/leases past due 90 days or more		7			356			4,270			1,298			87
		Total nonperforming loans/leases		42,489			47,615			44,350			34,778			33,633
		Other real estate owned		62			402			661			369			369
		Other repossessed assets		113			122			543			542			512
		Total nonperforming assets	$	42,664		$	48,139		$	45,554		$	35,689		$	34,514
		ASSET QUALITY RATIOS
		Nonperforming assets / total assets		0.46	%		0.53	%		0.50	%		0.39	%		0.39	%
		ACL for loans and leases / total loans/leases held for investment		1.28	%		1.32	%		1.32	%		1.30	%		1.33	%
		ACL for loans and leases / nonperforming loans/leases		208.84	%		189.76	%		202.57	%		248.21	%		260.77	%
		Net charge-offs as a % of average loans/leases		0.09	%		0.06	%		0.05	%		0.05	%		0.02	%
		INTERNALLY ASSIGNED RISK RATING (1)
		Special mention	$	68,621		$	55,327		$	73,636		$	80,121		$	85,096
		Substandard (2)		81,040			85,033			84,930			70,022			80,345
		Doubtful (2)		-			-			-			-			-
		Total Criticized loans (3)	$	149,661		$	140,360		$	158,566		$	150,143		$	165,441
		Classified loans as a % of total loans/leases (2)		1.17	%		1.25	%		1.25	%		1.03	%		1.17	%
		Total Criticized loans as a % of total loans/leases (3)		2.16	%		2.06	%		2.34	%		2.20	%		2.41	%
(1	)	Amounts exclude the government guaranteed portion, if any.  The Company assigns internal risk ratings of Pass for the government guaranteed portion.
(2	)	Classified loans are defined as loans with internally assigned risk ratings of 10 or 11, regardless of performance, and include loans identified as Substandard or Doubtful.
(3	)	Total Criticized loans are defined as loans with internally assigned risk ratings of 9, 10, or 11 , regardless of performance, and include loans identified as Special Mention, Substandard, or Doubtful.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
				For the Quarter Ended												For the Year Ended
				June 30,				March 31,				June 30,				June 30,				June 30,
		SELECT FINANCIAL DATA - SUBSIDIARIES			2025				2025				2024				2025				2024
				(dollars in thousands)
		TOTAL ASSETS
		Quad City Bank and Trust (1)		$	2,662,450			$	2,777,634			$	2,559,049
		m2 Equipment Finance, LLC			242,722				276,096				359,012
		Cedar Rapids Bank and Trust			2,664,293				2,617,143				2,428,267
		Community State Bank			1,605,966				1,583,646				1,531,109
		Guaranty Bank			2,365,944				2,331,944				2,369,754
		TOTAL DEPOSITS
		Quad City Bank and Trust (1)		$	2,309,942			$	2,397,047			$	2,100,520
		Cedar Rapids Bank and Trust			1,884,370				1,883,952				1,721,564
		Community State Bank			1,272,296				1,238,307				1,188,551
		Guaranty Bank			1,866,749				1,840,774				1,791,448
		TOTAL LOANS & LEASES
		Quad City Bank and Trust (1)		$	2,032,168			$	2,041,181			$	2,107,605
		m2 Equipment Finance, LLC			250,019				284,983				363,897
		Cedar Rapids Bank and Trust			1,852,316				1,790,065				1,736,438
		Community State Bank			1,206,735				1,197,005				1,162,686
		Guaranty Bank			1,833,706				1,794,915				1,847,658
		TOTAL LOANS & LEASES / TOTAL DEPOSITS
		Quad City Bank and Trust (1)			88	%			85	%			100	%
		Cedar Rapids Bank and Trust			98	%			95	%			101	%
		Community State Bank			95	%			97	%			98	%
		Guaranty Bank			98	%			98	%			103	%
		TOTAL LOANS & LEASES / TOTAL ASSETS
		Quad City Bank and Trust (1)			76	%			73	%			82	%
		Cedar Rapids Bank and Trust			70	%			68	%			72	%
		Community State Bank			75	%			76	%			76	%
		Guaranty Bank			78	%			77	%			78	%
		ACL ON LOANS/LEASES HELD FOR INVESTMENT AS A PERCENTAGE OF LOANS/LEASES HELD FOR INVESTMENT
		Quad City Bank and Trust (1)			1.32	%			1.44	%			1.43	%
		m2 Equipment Finance, LLC			4.26	%			4.37	%			3.86	%
		Cedar Rapids Bank and Trust			1.35	%			1.38	%			1.38	%
		Community State Bank			1.09	%			1.08	%			1.08	%
		Guaranty Bank			1.29	%			1.30	%			1.13	%
		RETURN ON AVERAGE ASSETS (ANNUALIZED)
		Quad City Bank and Trust (1)			1.24	%			1.31	%			0.88	%			1.28	%			0.84	%
		Cedar Rapids Bank and Trust			2.36	%			2.14	%			2.94	%			2.25	%			3.01	%
		Community State Bank			1.31	%			1.07	%			1.26	%			1.19	%			1.25	%
		Guaranty Bank			0.85	%			0.72	%			1.42	%			0.79	%			1.15	%
		NET INTEREST MARGIN PERCENTAGE (2)
		Quad City Bank and Trust (1)			3.45	%			3.45	%			3.39	%			3.45	%			3.35	%
		Cedar Rapids Bank and Trust			3.99	%			4.00	%			3.75	%			4.00	%			3.76	%
		Community State Bank			3.87	%			3.78	%			3.72	%			3.83	%			3.74	%
		Guaranty Bank (3)			3.11	%			3.05	%			2.99	%			3.08	%			2.99	%
		ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
		INTEREST MARGIN, NET
		Community State Bank		$	(1	)		$	(1	)		$	(1	)		$	(2	)		$	(2	)
		Guaranty Bank			118				218				301				336				697
		QCR Holdings, Inc. (4)			(33	)			(33	)			(32	)			(66	)			(64	)
(1	)	Quad City Bank and Trust amounts include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC  is also presented separately for certain (applicable) measurements.
(2	)	Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(3	)	Guaranty Bank's net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.86% for the quarter ended June 30, 2025, 2.91% for the quarter ended March 31, 2025 and 2.86% for the quarter ended June 30, 2024.
(4	)	Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
				As of
				June 30,				March 31,				December 31,				September 30,				June 30,
		GAAP TO NON-GAAP RECONCILIATIONS			2025				2025				2024				2024				2024
				(dollars in thousands, except per share data)
		TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)
		Stockholders' equity (GAAP)		$	1,050,554			$	1,022,747			$	997,387			$	976,620			$	936,319
		Less: Intangible assets			148,333				148,995				149,657				150,347				151,468
		Tangible common equity (non-GAAP)		$	902,221			$	873,752			$	847,730			$	826,273			$	784,851
		Total assets (GAAP)		$	9,242,331			$	9,152,779			$	9,026,030			$	9,088,565			$	8,871,991
		Less: Intangible assets			148,333				148,995				149,657				150,347				151,468
		Tangible assets (non-GAAP)		$	9,093,998			$	9,003,784			$	8,876,373			$	8,938,218			$	8,720,523
		Tangible common equity to tangible assets ratio (non-GAAP)			9.92	%			9.70	%			9.55	%			9.24	%			9.00	%
(1	)	This ratio is a non-GAAP financial measure. The Company's management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders' equity and total assets, which are the most directly comparable GAAP financial measures.

QCR Holdings, Inc.
Consolidated Financial Highlights
(Unaudited)
		GAAP TO NON-GAAP RECONCILIATIONS		For the Quarter Ended																				For the Six Months Ended
				June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
		ADJUSTED NET INCOME (1)			2025				2025				2024				2024				2024				2025				2024
				(dollars in thousands, except per share data)
		Net income (GAAP)		$	29,019			$	25,797			$	30,225			$	27,785			$	29,114			$	54,816			$	55,840
		Less non-core items (post-tax) (2):
		Income:
		Fair value loss on derivatives, net			(397	)			(156	)			(2,594	)			(542	)			(145	)			(553	)			(288	)
		Total non-core income (non-GAAP)		$	(397	)		$	(156	)		$	(2,594	)		$	(542	)		$	(145	)		$	(553	)		$	(288	)
		Expense:
		Goodwill impairment			-				-				-				431				-				-				-
		Restructuring expense			-				-				-				1,544				-				-				-
		Total non-core expense (non-GAAP)		$	-			$	-			$	-			$	1,975			$	-			$	-			$	-
		Adjusted net income  (non-GAAP) (1)		$	29,416			$	25,953			$	32,819			$	30,302			$	29,259			$	55,369			$	56,128
		ADJUSTED EARNINGS PER COMMON SHARE (1)
		Adjusted net income (non-GAAP) (from above)		$	29,416			$	25,953			$	32,819			$	30,302			$	29,259			$	55,369			$	56,128
		Weighted average common shares outstanding			16,928,542				16,900,785				16,871,652				16,846,200				16,814,814				16,914,663				16,799,081
		Weighted average common and common equivalent shares outstanding			17,006,282				17,013,992				17,024,481				16,982,400				16,921,854				17,010,136				16,916,264
		Adjusted earnings per common share (non-GAAP):
		Basic		$	1.74			$	1.54			$	1.95			$	1.80			$	1.74			$	3.27			$	3.34
		Diluted		$	1.73			$	1.53			$	1.93			$	1.78			$	1.73			$	3.26			$	3.32
		ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)
		Adjusted net income (non-GAAP) (from above)		$	29,416			$	25,953			$	32,819			$	30,302			$	29,259			$	55,369			$	56,128
		Average Assets		$	9,155,473			$	9,015,439			$	9,050,280			$	8,968,653			$	8,776,002			$	9,085,843			$	8,663,429
		Adjusted return on average assets (annualized) (non-GAAP)			1.29	%			1.15	%			1.45	%			1.35	%			1.33	%			1.22	%			1.30	%
		Adjusted return on average equity (annualized) (non-GAAP)			11.30	%			10.20	%			13.19	%			12.60	%			12.69	%			10.76	%			12.30	%
		NET INTEREST MARGIN (TEY) (3)
		Net interest income (GAAP)		$	62,082			$	59,986			$	61,204			$	59,722			$	56,163			$	122,068			$	110,862
		Plus: Tax equivalent adjustment (4)			10,090				9,513				9,698				9,544				8,914				19,603				17,259
		Net interest income - tax equivalent (non-GAAP)		$	72,172			$	69,499			$	70,902			$	69,266			$	65,077			$	141,671			$	128,121
		Less:  Acquisition accounting net accretion			84				184				471				463				268				268				631
		Adjusted net interest income		$	72,088			$	69,315			$	70,431			$	68,803			$	64,809			$	141,403			$	127,490
		Average earning assets		$	8,377,361			$	8,241,035			$	8,241,190			$	8,183,196			$	7,999,044			$	8,309,575			$	7,903,382
		Net interest margin (GAAP)			2.97	%			2.95	%			2.95	%			2.90	%			2.82	%			2.97	%			2.82	%
		Net interest margin (TEY) (non-GAAP)			3.46	%			3.42	%			3.43	%			3.37	%			3.27	%			3.45	%			3.26	%
		Adjusted net interest margin (TEY) (non-GAAP)			3.45	%			3.41	%			3.40	%			3.34	%			3.26	%			3.44	%			3.24	%
		EFFICIENCY RATIO (5)
		Noninterest expense (GAAP)		$	49,583			$	46,539			$	53,499			$	53,565			$	49,888			$	96,122			$	100,578
		Net interest income (GAAP)		$	62,082			$	59,986			$	61,204			$	59,722			$	56,163			$	122,068			$	110,862
		Noninterest income (GAAP)			22,115				16,892				30,625				27,157				30,889				39,007				57,747
		Total income		$	84,197			$	76,878			$	91,829			$	86,879			$	87,052			$	161,075			$	168,609
		Efficiency ratio (noninterest expense/total income) (non-GAAP)			58.89	%			60.54	%			58.26	%			61.65	%			57.31	%			59.68	%			59.65	%
		Adjusted efficiency ratio (core noninterest expense/core total income) (non-GAAP)			58.54	%			60.38	%			56.25	%			58.45	%			57.19	%			59.42	%			59.52	%
(1	)	Adjusted net income, adjusted earnings per common share, adjusted return on average assets and average equity are non-GAAP financial measures. The Company's management believes that these measurements are important to investors as they exclude non-core or non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, these non-GAAP measures are reconciled to net income, which is the most directly comparable GAAP financial measure.
(2	)	Non-core or non-recurring items (post-tax) are calculated using an estimated effective federal tax rate of 21% with the exception of goodwill impairment which is not deductible for tax.
(3	)	Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(4	)	Net interest margin (TEY) is a non-GAAP financial measure. The Company's management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure.  In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it's difficult to provide a more realistic run-rate for future periods.
(5	)	Efficiency ratio is a non-GAAP measure. The Company's management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.