8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 30, 2019

QCR Holdings, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number:  000-22208

Delaware	42-1397595
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification Number)

3551 Seventh Street

Moline, Illinois 61265

(Address of principal executive offices, including zip code)

(309) 736-3584

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 Par Value	QCRH	The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company   o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.01. Completion of Acquisition or Disposition of Assets.

On November 30, 2019, QCR Holdings, Inc. (“QCR Holdings”) and Rockford Bank & Trust Company, a wholly owned subsidiary of QCR Holdings (“RB&T”), completed the previously announced sale of substantially all of the assets and transfer of substantially all of the deposits and certain other liabilities of RB&T to Illinois Bank & Trust, a wholly owned subsidiary of Heartland Financial USA, Inc. (“IB&T”), pursuant to a Purchase and Assumption Agreement, dated August 13, 2019, by and among RB&T, IB&T and QCR Holdings (the “Agreement”).

Under the terms of the Agreement, IB&T acquired substantially all of RB&T’s assets for a cash payment and assumed substantially all of RB&T’s deposits and certain other liabilities. The cash amount paid for the assets at closing was determined by the following formula as of the determination date, October 31, 2019: (i) the “Purchase Price Premium,” plus (ii) the aggregate net book value of the acquired assets, minus (iii) the aggregate net book value of the assumed liabilities. The Purchase Price Premium was equal to: (a) 8% of RB&T’s acquired tangible assets, multiplied by (b) 0.345. Based on the aggregate net book value of the acquired assets of approximately $453.9 million and liabilities assumed by IB&T of approximately $419.5 million on the determination date, the Purchase Price Premium was approximately $12.5 million and the total cash payment by IB&T to RB&T was approximately $46.9 million.  In addition, QCR Holdings is retaining net assets of approximately $12.2 million that will be liquidated separately.  The majority of these assets consist of bank-owned life insurance.  In total, the transaction is valued at approximately $59.1 million. Pursuant to the Agreement, the parties will recalculate the final amount of the cash payment due from IB&T based on RB&T’s balance sheet as of the closing date, November 30, 2019.

Item 7.01. Regulation FD Disclosure.

A copy of the press release, dated December 2, 2019, issued by QCR Holdings announcing the completion of the transaction described above is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information furnished pursuant to this Item and the related exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 9.01.  Financial Statements and Exhibits.

(b)Pro Forma Financial Information

The unaudited pro forma consolidated combined financial information of QCR Holdings for the year ended December 31, 2018 and as of and for the nine months ended September 30, 2019, are filed as Exhibit 99.2 and incorporated herein by reference.

(d)Exhibits.

99.1	Press Release, dated December 2, 2019.
99.2	Unaudited pro forma consolidated combined financial information of QCR Holdings for the year ended December 31, 2018 and as of and for the nine months ended September 30, 2019.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		QCR HOLDINGS, INC.
Dated:  December 2, 2019	By:	/s/ Todd A. Gipple
		President, Chief Operating Officer and Chief Financial Officer

3

EX-99.1

Exhibit 99.1

	PRESS RELEASE
		FOR IMMEDIATE RELEASE

QCR Holdings, Inc. Completes Sale of the Operations of Rockford Bank & Trust

Moline, IL, December 2, 2019, QCR Holdings, Inc. (NASDAQ: QCRH, the “Company”) today announced that on November 30, 2019, the Company completed the sale of substantially all of the assets and transfer of substantially all of the deposits and certain other liabilities of the Company’s wholly-owned subsidiary, Rockford Bank and Trust Company (“RB&T”) to Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Dubuque, IA-based Heartland Financial USA, Inc. (NASDAQ: HTLF). The purchase and assumption transaction, announced in August 2019, is valued at approximately $59.1 million.  The $59.1 million represents a cash payment of approximately $46.9 million from IB&T including the purchase price premium of $12.5 million and the separate liquidation of net assets retained by QCRH of $12.2 million.

“We are confident the combination of RB&T and IB&T creates a premier community bank that will continue to serve the needs of the Rockford community and Winnebago County,” said Larry J. Helling, Chief Executive Officer of QCRH.  “Divesting of RB&T enables QCRH to redeploy capital in our other more profitable markets to help drive continued organic and acquisitive growth and provides the best outcome for our shareholders.”

Todd A. Gipple, President and Chief Financial Officer of the Company stated, “While RB&T represented approximately 10% of our Company’s assets, we were unable to achieve the necessary scale in the Rockford market.  The $46.9 million cash payment represents a purchase price premium of 34.5% of adjusted tangible pro-forma equity, or $12.5 million, pre-tax. As a result of the sale, we anticipate significant improvement in our profitability metrics.”

About Us

QCRH, 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, Springfield First Community 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. Quad City Bank & Trust Company engages in commercial leasing through its wholly owned subsidiary, m2 Lease Funds, LLC, based in Milwaukee, Wisconsin, and also provides correspondent banking services. The Company has 25 locations in Illinois, Iowa, Wisconsin and Missouri. As of September 30, 2019, the Company had approximately $5.3 billion in assets, $3.6 billion in loans and $3.8 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

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,” “predict,” “suggest,” “appear,” “plan,” “intend,” “estimate,” “annualize,” “may,” “will,” “would,” “could,” “should” 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, among others, the following: (i) the strength of the local, state, national and international economies (including the impact of tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations); (ii) the economic impact of any future terrorist threats and attacks, and the response of the United States to any such threats and attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x)  unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. 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 Securities and Exchange Commission.

Contacts:

Todd A. Gipple	Christopher J. Lindell
President	Executive Vice President
Chief Operating Officer	Corporate Communications
Chief Financial Officer	(319) 743-7006
(309) 743-7745	clindell@qcrh.com
tgipple@qcrh.com

EX-99.2

Exhibit 99.2

QCR HOLDINGS, INC.

UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma consolidated combined financial information reflects adjustments to the historical financial results of QCR Holdings, Inc. (the “Company”) as reported under U.S. Generally Accepted Accounting Principles (“GAAP”) in connection with the sale of substantially all of the assets and the transfer of substantially all of the deposits and certain other liabilities of the Company’s wholly-owned subsidiary, Rockford Bank & Trust Company (“RB&T”) to Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Heartland Financial USA, Inc.  The all-cash purchase and assumption transaction (the “transaction”), announced in August 2019, closed as of the close of business on November 30, 2019.

The unaudited pro forma consolidated combined balance sheet as of September 30, 2019 was prepared with the assumption that the transaction had closed and was fully completed as of September 30, 2019.

The unaudited pro forma consolidated combined income statement for the nine months ended September 30, 2019 was prepared with the assumption that the transaction had closed and was fully completed as of January 1, 2019.  This does not include the gain on sale and the related one-time costs related to disposition.

The unaudited pro forma consolidated combined income statement for the year ended December 31, 2018 was prepared with the assumption that the transaction had closed and was fully completed as of January 1, 2018.  This also does not include the gain on sale and the related one-time costs related to disposition.

The unaudited pro forma consolidated combined financial information does not purport to be indicative of the results of operations or the financial condition which would have actually resulted if the transaction had been completed on the dates indicated and does not purport to indicate the results of future operations. Assumptions and estimates underlying the pro forma consolidated combined financial information are described in the accompanying footnotes.

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Balance Sheet

				RB&T Pro Forma
	As of September 30, 2019			RB&T at September 30, 2019		Participation Loans / Investments *		Pro Forma **		Adjustments for Sale ***		Pro Forma
ASSETS
Cash and due from banks	$	102,701,879		11,031,151		—		11,031,151		—		$	91,670,728
Federal funds sold	9,300,000			—		—		—		—		9,300,000
Interest-bearing deposits at financial institutions	190,377,549			2,414,900		90,295,048		92,709,948		59,032,000		156,699,601
	—
Securities held to maturity, at amortized cost	386,583,744			43,106,805		(39,863,805	)	3,243,000		—		383,340,744
Securities available for sale, at fair value	234,833,489			22,901,737		—		22,901,737		—		211,931,751
Total securities	621,417,232			66,008,542		(39,863,805	)	26,144,737		—		595,272,495
Loans receivable held for sale	10,540,738			1,650,400		—		1,650,400		—		8,890,338
Loans/leases receivable held for investment	3,968,230,101			417,281,473		(50,431,243	)	366,850,230		—		3,601,379,871
Gross loans/leases receivable	3,978,770,839			418,931,873		(50,431,243	)	368,500,630		—		3,610,270,209
Less allowance for estimated losses on loans/leases	(42,605,570		)	(6,490,001	)	—		(6,490,001	)	—		(36,115,568		)
Net loans/leases receivable	3,936,165,269			412,441,872		(50,431,243	)	362,010,629		—		3,574,154,640
Bank-owned life insurance	69,223,617			10,856,275		—		10,856,275		—		58,367,342
Premises and equipment, net	80,238,693			6,400,970		—		6,400,970		—		73,837,723
Restricted investment securities	26,364,575			1,802,400		—		1,802,400		—		24,562,175
Other real estate owned, net	6,381,359			2,315,083		—		2,315,083		—		4,066,276
Goodwill	77,748,298			—		—		—		—		77,748,298
Intangibles	15,529,058			—		—		—		—		15,529,058
Other assets	156,934,091			5,913,267		—		5,913,267		—		151,020,824
Total assets	$	5,292,381,620		519,184,460		—		519,184,460		59,032,000		$	4,832,229,160
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	852,593,271		70,360,778		—		70,360,778		—		$	782,232,493
Interest-bearing	3,401,193,430			381,184,764		—		381,184,764		—		3,020,008,666
Total deposits	4,253,786,701			451,545,542		—		451,545,542		—		3,802,241,159
Short-term borrowings	19,683,475			1,157,067		—		1,157,067		—		18,526,408
Federal Home Loan Bank advances	210,800,000			15,000,000		—		15,000,000		—		195,800,000
Subordinated debentures	68,333,753			—		—		—		—		68,333,753
Junior subordinated debentures	37,796,751			—		—		—		—		37,796,751
Other liabilities	182,238,233			5,299,443		—		5,299,443		4,712,398		181,651,188
Total liabilities	4,772,638,913			473,002,052		—		473,002,052		4,712,398		4,304,349,259
STOCKHOLDERS’ EQUITY
Preferred stock, $1 par value; shares authorized 250,000	—					—		—		—		—
Common stock, $1 par value; shares authorized 20,000,000	15,790,462			4,950,000		—		4,950,000		4,950,000		15,790,462
Additional paid-in capital	273,474,836			32,628,679		—		32,628,679		32,628,679		273,474,836
Retained earnings	230,891,852			8,918,536		—		8,918,536		17,055,730		239,029,046
Accumulated other comprehensive income (loss)	3,831,783			67,850		—		67,850		67,850		3,831,783
Accumulated other comprehensive income (loss) - Derivatives	(4,246,226		)	(382,657	)	—		(382,657	)	(382,657	)	(4,246,226		)
Total stockholders’ equity	519,742,707			46,182,408		—		46,182,408		54,319,602		527,879,901
Total liabilities and stockholders’ equity	$	5,292,381,620		519,184,460		—		519,184,460		59,032,000		$	4,832,229,160

* Includes affiliate participation loans and investments, net, re-allocated to the originating charter in the month prior to closing.  The loans and investments are as of September 30, 2019.

** Includes estimates for retained assets of $14,727,000, and retained liabilities of $2,573,000, all of which will be liquidated or satisfied post-closing.

*** Includes preliminary entries for the sale of RB&T detailed as follows:

Cash Proceeds from Buyer	$	46,878,000	Includes Purchase Price Premium of $12.5 million
Cash from Liquidiation of Net Retained Balance Sheet	12,154,000
Total Cash Proceeds	59,032,000
Equity Investment in RB&T	46,182,408
Pre-Tax Gain on Sale	$	12,849,592

In addition, the Company is recording an estimated gain on sale of $12,849,592 which is offset by an estimate of $2,000,000 of disposition expenses.  The net is an estimated pre-tax net gain of $10,849,592 and using a tax rate of 25% (which is 21% for Federal and 4% for State), the net impact to equity is estimated at $8,137,000.

Lastly, the offset is $4,712,398 to other liabilties which consists of accruals for various disposition costs and the taxes payable on the net gain on sale.

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Income Statement

	For the nine months ended September 30, 2019
	Consolidated			RB&T Only	Participation Loans / Investments *		Pro Forma
Interest and dividend income:
Loans/leases, including fees	$	143,488,413		13,948,038	1,796,613		$	131,336,988
Securities:
Taxable	5,025,431			577,366	—		4,448,065
Nontaxable	10,461,256			973,825	1,046,425		10,533,856
Interest-bearing deposits at financial institutions	3,041,816			116,147	(1,523,729	)	1,401,940
Restricted investment securities	891,165			86,785	—		804,380
Federal funds sold	191,317			71,596	—		119,721
Total interest and dividend income	163,099,398			15,773,757	1,319,309		148,644,950
Interest expense:
Deposits	39,696,963			4,882,825	—		34,814,138
Short-term borrowings	275,608			25,537	—		250,071
Federal Home Loan Bank advances	2,684,888			632,874	—		2,052,014
Other borrowings	512,367			—	—		512,367
Subordindated debt	2,560,701			—	—		2,560,701
Junior subordinated debentures	1,728,959			—	—		1,728,959
Total interest expense	47,459,486			5,541,236	—		41,918,250
Net interest income	115,639,912			10,232,521	1,319,309		106,726,700
Provision for loan/lease losses	6,086,972			559,000	—		5,527,972
Net interest income after provision for loan/lease losses	109,552,940			9,673,521	1,319,309		101,198,728
Noninterest income:
Trust department fees	7,193,596			729,370	—		6,464,226
Investment advisory and management fees	5,405,734			432,050	—		4,973,684
Deposit service fees	5,025,175			534,068	—		4,491,107
Gains on sales of residential real estate loans	1,747,712			82,829	—		1,664,883
Gains on sales government guaranteed portions of loans	589,366			—	—		589,366
Swap fee income	20,885,993			—	—		20,885,993
Security losses, net	(55,693		)	—	—		(55,693		)
Earnings on bank-owned life insurance	1,440,491			192,519	—		1,247,972
Debit card fees	2,591,291			208,683	—		2,382,608
Correspondent banking fees	578,167			—	—		578,167
Other	3,561,787			252,535	—		3,309,252
Total noninterest income	48,963,619			2,432,054	—		46,531,565
Noninterest expense:
Salaries and employee benefits	67,842,590			5,973,251	—		61,869,339
Occupancy and equipment expense	11,086,782			1,078,687	—		10,008,095
Professional and data processing fees	9,811,003			1,653,100	—		8,157,903
Acquisition costs	—			—	—		—
Post-acquisition compensation, transition and integration costs	1,726,558			—	—		1,726,558
FDIC and other insurance, and regulatory fees	2,431,834			279,696	—		2,152,138
Loan/lease expense	747,689			108,589	—		639,100
Net cost of operations of other real estate	3,557,490			327,147	—		3,230,343
Advertising and marketing	2,877,950			339,284	—		2,538,666
Postage and communication	1,250,397			67,040	—		1,183,357
Stationery and supplies	817,533			93,986	—		723,547
Bank service charges	1,493,792			71,649	—		1,422,143
Loss on debt extinguishment, net	148,149			—	—		148,149
Correspondent banking expense	619,252			—	—		619,252
CDI Amortization	1,706,192			—	—		1,706,192
Other	2,822,704			306,859	—		2,515,845
Total noninterest expense	108,939,915			10,299,288	—		98,640,627
Net income before income taxes	49,576,644			1,806,287	1,319,309		49,089,666
Federal and state income tax expense	8,059,400			129,692	110,078		8,039,786
Net income	$	41,517,244		1,676,595	1,209,231		$	41,049,880
Diluted earnings per common share	$	2.60					$	2.57
Weighted average common and common equivalent shares outstanding	15,946,020						15,976,742

* Includes affiliate particpation loans and investments, net, re-allocated to the originating charter in the month prior to closing.  The offset is to interest-bearing deposits at banks as the Company would fund the net earning assets with excess cash.  Following are the details:

	Amount		Rate **		Net Interest Income		Adjusted for 9 Months
Loans	50,431,243		4.75	%	2,395,484		1,796,613
Federal Tax Exempt Municipal Bonds	39,863,805		3.50	%	1,395,233		1,046,425
Interest-Bearing Deposits at Banks	(90,295,048	)	2.25	%	(2,031,639	)	(1,523,729	)

**  The rate is estimated based on weighted average interest rate of the loans and investments as of September 30, 2019.  For the interest rate on the interest-bearing deposits at banks, the Company used an estimated rate for 2019 based on Fed Funds for the majority of the year.

NOTE:  Excludes the pre-tax gain on sale estimated at $12,849,592 and the related one-time disposition costs estimated at $2,000,000.

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Income Statement

	For the year ended December 31, 2018
	Consolidated		RB&T Only		Participation Loans / Investments *		Pro Forma
Interest and dividend income:
Loans/leases, including fees	$	160,160,173	16,996,007		2,395,484		$	145,559,650
Securities:
Taxable	6,353,413		681,693		—		5,671,720
Nontaxable	13,668,283		1,227,849		1,395,233		13,835,667
Interest-bearing deposits at financial institutions	1,266,530		14,600		(2,257,376	)	(1,005,446		)
Restricted investment securities	1,092,807		149,028		—		943,779
Federal funds sold	338,036		64,764		—		273,272
Total interest and dividend income	182,879,242		19,133,941		1,533,341		165,278,642
Interest expense:
Deposits	30,674,621		4,285,571		—		26,389,050
Short-term borrowings	271,243		22,271		—		248,972
Federal Home Loan Bank advances	4,192,510		611,883		—		3,580,627
Other borrowings	3,346,225		575,247		—		2,770,978
Junior subordinated debentures	1,999,058		—		—		1,999,058
Total interest expense	40,483,657		5,494,972		—		34,988,685
Net interest income	142,395,585		13,638,969		1,533,341		130,289,957
Provision for loan/lease losses	12,658,449		4,618,833		—		8,039,616
Net interest income after provision for loan/lease losses	129,737,136		9,020,136		1,533,341		122,250,341
Noninterest income:
Trust department fees	8,707,406		771,334		—		7,936,072
Investment advisory and management fees	4,725,557		649,676		—		4,075,881
Deposit service fees	6,420,237		708,883		—		5,711,354
Gains on sales of residential real estate loans	900,744		56,044		—		844,700
Gains on sales government guaranteed portions of loans	404,852		—		—		404,852
Swap fee income	10,787,234		176,640		—		10,610,594
Earnings on bank-owned life insurance	1,631,749		260,513		—		1,371,236
Debit card fees	3,262,645		228,936		—		3,033,709
Correspondent banking fees	851,514		—		—		851,514
Participation service fees on commercial loan participations	1,229,333		258,844		—		970,489
Fee income from early termination of leases	446,506		—		—		446,506
Credit card issuing fees	800,499		—		—		800,499
Other	1,372,818		24,370		—		1,348,448
Total noninterest income	41,541,094		3,135,240		—		38,405,854
Noninterest expense:
Salaries and employee benefits	68,994,218		6,410,037		—		62,584,181
Occupancy and equipment expense	12,883,632		1,422,474		—		11,461,158
Professional and data processing fees	11,452,084		1,585,920		—		9,866,164
Acquisition costs	1,795,119		140,796		—		1,654,323
Post-acquisition compensation, transition and integration costs	2,086,386		—		—		2,086,386
FDIC and other insurance, and regulatory fees	3,594,480		531,374		—		3,063,106
Loan/lease expense	1,543,343		89,824		—		1,453,519
Net cost of operations of other real estate	2,488,730		471,712		—		2,017,018
Advertising and marketing	3,551,822		473,824		—		3,077,998
Postage and communication	1,585,282		110,099		—		1,475,183
Stationery and supplies	1,069,744		107,595		—		962,149
Bank service charges	1,837,626		152,648		—		1,684,978
Correspondent banking expense	820,905		—		—		820,905
CDI Amortization	1,692,431		—		—		1,692,431
Other	3,747,617		312,695		—		3,434,922
Total noninterest expense	119,143,419		11,808,998		—		107,334,421
Net income before income taxes	52,134,811		346,378		1,533,341		53,321,774
Federal and state income tax expense	9,015,112		(359,777	)	90,336		9,465,225
Net income	$	43,119,699	706,155		1,443,005		$	43,856,549
Diluted earnings per common share	$	2.86					$	2.91
Weighted average common and common equivalent shares outstanding	15,064,730						15,064,730

* Includes affiliate particpation loans and federal tax exempt municipal investments, net, re-allocated to the originating charter in the month prior to closing.  The offset is to interest-bearing deposits at banks as the Company would fund the net earning assets with excess cash.  Following are the details:

	Amount		Rate **		Net Interest  Income
Loans	50,431,243		4.75	%	2,395,484
Tax Exempt Municipal Bonds	39,863,805		3.50	%	1,395,233
Interest-Bearing Deposits at Banks	(90,295,048	)	2.50	%	(2,257,376	)

**  The rate is estimated based on weighted average interest rate of the loans and investments as of September 30, 2019.  For the interest rate on the interest-bearing deposits at banks, the Company used an estimated rate for 2018 based on Fed Funds for the majority of the year.

NOTE:  Excludes the pre-tax gain on sale estimated at $12,849,592 and the related one-time disposition costs estimated at $2,000,000.