10-Q/A

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q/A

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ending September 30, 2011

[    ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from    ________ to________

Commission file number 0-22208

QCR HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

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

3551 7th Street, Moline, Illinois 61265

(Address of principal executive offices)

(309) 736-3580

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for past 90 days.  

Yes [ X ]       No  [    ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ X ]       No  [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “accelerated filer,” “large accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]     Accelerated filer  [   ]     Non-accelerated filer  [   ]     Smaller reporting company [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [    ]        No [ X ]    

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of November 1, 2011, the Registrant had outstanding 4,749,234 shares of common stock, $1.00 par value per share.

EXPLANATORY NOTE

On November 7, 2011, QCR Holdings, Inc. (“we”, “us”, “our” or the “Company”) inadvertently filed a draft version of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (the “Draft 10-Q”) due to an error by our filing agent. We are filing this amended quarterly report on Form 10-Q/A (the "Form 10-Q/A") to replace the Draft 10-Q. Investors should not rely on any information included in the Draft 10-Q, which is superseded in its entirety by this Form 10-Q/A.

QCR HOLDINGS, INC. AND SUBSIDIARIES

INDEX

			Page Number(s)
Part I	FINANCIAL INFORMATION
	Item 1.	Consolidated Financial Statements (Unaudited)
		Consolidated Balance Sheets	2
		As of September 30, 2011 and December 31, 2010
		Consolidated Statements of Income	3
		For the Three Months Ended September 30, 2011 and 2010
		Consolidated Statements of Income	4
		For the Nine Months Ended September 30, 2011 and 2010
		Consolidated Statement of Changes in Stockholders' Equity	5-6
		For the Nine Months Ended September 30, 2011 and 2010
		Consolidated Statements of Cash Flows	7
		For the Nine Months Ended September 30, 2011 and 2010
		Notes to the Consolidated Financial Statements	8-32
	Item 2.	Management's Discussion and Analysis of Financial Condition and	33-65
		Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66-67
	Item 4.	Controls and Procedures	68
Part II	OTHER INFORMATION
	Item 1.	Legal Proceedings	69
	Item 1.A.	Risk Factors	69
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
	Item 3.	Defaults upon Senior Securities	69
	Item 4.	[Removed and Reserved]	69
	Item 5.	Other Information	69
	Item 6.	Exhibits	70
Signatures			71-72

1

Part I

Item 1

QCR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of September 30, 2011 and December 31, 2010
	September 30,			December 31,
	2011			2010
ASSETS
Cash and due from banks	$	45,431,711		$	42,030,806
Federal funds sold		5,790,000			61,960,000
Interest-bearing deposits at financial institutions		24,665,359			39,745,611
Securities held to maturity, at amortized cost		200,000			300,000
Securities available for sale, at fair value		525,711,786			424,546,767
Total securities		525,911,786			424,846,767
Loans receivable held for sale		5,287,924			14,084,859
Loans/leases receivable held for investment		1,192,293,786			1,158,453,744
Gross loans/leases receivable		1,197,581,710			1,172,538,603
Less allowance for estimated losses on loans/leases		(19,578,486	)		(20,364,656	)
Net loans/leases receivable		1,178,003,224			1,152,173,947
Premises and equipment, net		30,946,211			31,118,744
Goodwill		3,222,688			3,222,688
Accrued interest receivable		6,812,857			6,435,989
Bank-owned life insurance		41,597,883			33,565,390
Prepaid FDIC insurance		3,998,438			5,361,314
Restricted investment securities		15,238,000			16,668,700
Other real estate owned, net		8,287,592			8,534,711
Other assets		9,054,743			10,970,549
Total assets	$	1,898,960,492		$	1,836,635,216
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	326,710,313		$	276,827,205
Interest-bearing		880,758,933			837,988,652
Total deposits		1,207,469,246			1,114,815,857
Short-term borrowings		143,586,491			141,154,499
Federal Home Loan Bank advances		204,750,000			238,750,000
Other borrowings		140,129,755			150,070,785
Junior subordinated debentures		36,085,000			36,085,000
Other liabilities		23,771,127			23,188,367
Total liabilities		1,755,791,619			1,704,064,508
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value; shares authorized 250,000 September 2011 - 65,090 shares issued and outstanding December 2010 - 63,237 shares issued and outstanding		65,090			63,237
Common stock, $1 par value; shares authorized 20,000,000 September 2011 - 4,868,480 shares issued and 4,747,234 outstanding December 2010 - 4,732,428 shares issued and 4,611,182 outstanding		4,868,480			4,732,428
Additional paid-in capital		90,673,628			86,478,269
Retained earnings		43,071,950			40,550,900
Accumulated other comprehensive income		4,172,634			704,165
Noncontrolling interests		1,923,601			1,648,219
Less treasury stock, September 2011 and December 2010 - 121,246 common shares, at cost		(1,606,510	)		(1,606,510	)
Total stockholders' equity		143,168,873			132,570,708
Total liabilities and stockholders' equity	$	1,898,960,492		$	1,836,635,216

See Notes to Consolidated Financial Statements

2

QCR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended September 30,
	2011			2010
Interest and dividend income:
Loans/leases, including fees	$	16,215,725		$	16,710,323
Securities:
Taxable		2,877,574			2,595,301
Nontaxable		244,209			224,703
Interest-bearing deposits at financial institutions		97,714			55,289
Restricted investment securities		126,333			116,175
Federal funds sold		7,875			38,465
Total interest and dividend income		19,569,430			19,740,256
Interest expense:
Deposits		2,201,070			3,151,191
Short-term borrowings		65,502			132,290
Federal Home Loan Bank advances		1,931,259			2,345,944
Other borrowings		1,301,144			1,452,204
Junior subordinated debentures		241,751			495,052
Total interest expense		5,740,726			7,576,681
Net interest income		13,828,704			12,163,575
Provision for loan/lease losses		2,456,965			1,434,232
Net interest income after provision for loan/lease losses		11,371,739			10,729,343
Noninterest income:
Trust department fees		762,133			803,423
Investment advisory and management fees, gross		549,515			419,416
Deposit service fees		893,685			902,787
Gains on sales of loans, net		408,364			1,109,724
Securities gains		443,614			-
Gains (losses) on sales of other real estate owned, net		42,262			(188,158	)
Earnings on bank-owned life insurance		331,440			353,003
Credit card issuing fees, net of processing costs		178,636			34,866
Other		725,658			923,225
Total noninterest income		4,335,307			4,358,286
Noninterest expense:
Salaries and employee benefits		7,651,695			6,910,016
Occupancy and equipment expense		1,359,758			1,410,429
Professional and data processing fees		1,077,435			1,096,100
FDIC and other insurance		578,776			887,509
Loan/lease expense		839,993			678,535
Advertising and marketing		277,376			292,148
Postage and telephone		242,103			252,512
Stationery and supplies		122,582			135,064
Bank service charges		186,351			112,742
Other-than-temporary impairment losses on securities		-			113,800
Other		437,080			244,910
Total noninterest expense		12,773,149			12,133,765
Net income before income taxes		2,933,897			2,953,864
Federal and state income tax expense		667,296			829,992
Net income	$	2,266,601		$	2,123,872
Less: Net income attributable to noncontrolling interests		103,446			109,786
Net income attributable to QCR Holdings, Inc.	$	2,163,155		$	2,014,086
Less: Preferred stock dividends		2,188,058			1,028,686
Net income (loss) attributable to QCR Holdings, Inc. common stockholders	$	(24,903	)	$	985,400
Earnings (loss) per common share attributable to QCR Holdings, Inc. common shareholders
Basic	$	(0.01	)	$	0.21
Diluted	$	(0.01	)	$	0.21
Weighted average common shares outstanding		4,866,692			4,598,566
Weighted average common and common equivalent shares outstanding		4,866,692			4,619,574
Cash dividends declared per common share	$	-		$	-

See Notes to Consolidated Financial Statements

3

QCR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Nine Months Ended September 30,
	2011			2010
Interest and dividend income:
Loans/leases, including fees	$	48,466,331		$	51,324,123
Securities:
Taxable		8,035,495			7,771,242
Nontaxable		743,368			681,001
Interest-bearing deposits at financial institutions		311,807			347,105
Restricted investment securities		427,818			328,762
Federal funds sold		97,919			123,699
Total interest and dividend income		58,082,738			60,575,932
Interest expense:
Deposits		6,948,265			9,940,844
Short-term borrowings		248,079			450,539
Federal Home Loan Bank advances		6,053,134			6,903,991
Other borrowings		3,870,062			4,307,558
Junior subordinated debentures		974,637			1,457,765
Total interest expense		18,094,177			23,060,697
Net interest income		39,988,561			37,515,235
Provision for loan/lease losses		5,196,850			4,413,650
Net interest income after provision for loan/lease losses		34,791,711			33,101,585
Noninterest income:
Trust department fees		2,607,668			2,438,473
Investment advisory and management fees, gross		1,630,976			1,325,910
Deposit service fees		2,623,018			2,585,873
Gains on sales of loans, net		1,923,185			1,831,856
Securities gains		1,472,528			-
Losses on sales of other real estate owned, net		(90,492	)		(632,806	)
Earnings on bank-owned life insurance		1,032,493			973,659
Credit card issuing fees, net of processing costs		397,132			231,439
Other		1,969,304			1,973,589
Total noninterest income		13,565,812			10,727,993
Noninterest expense:
Salaries and employee benefits		22,480,731			20,869,335
Occupancy and equipment expense		4,017,506			4,147,101
Professional and data processing fees		3,338,935			3,379,080
FDIC and other insurance		2,149,093			2,575,000
Loan/lease expense		1,772,290			1,658,647
Advertising and marketing		836,459			701,603
Postage and telephone		703,803			750,611
Stationery and supplies		380,754			379,347
Bank service charges		525,007			284,134
Prepayment fees on Federal Home Loan Bank advances		832,099			-
Losses on lease residual values		-			617,000
Other-than-temporary impairment losses on securities		118,847			113,800
Other		1,185,443			1,314,615
Total noninterest expense		38,340,967			36,790,273
Net income before income taxes		10,016,556			7,039,305
Federal and state income tax expense		2,745,257			1,900,663
Net income	$	7,271,299		$	5,138,642
Less: Net income attributable to noncontrolling interests		308,215			95,046
Net income attributable to QCR Holdings, Inc.		6,963,084		$	5,043,596
Less: Preferred stock dividends		4,256,171			3,099,418
Net income attributable to QCR Holdings, Inc. common stockholders		2,706,913		$	1,944,178
Earnings per common share attributable to QCR Holdings, Inc. common shareholders
Basic	$	0.56		$	0.42
Diluted	$	0.56		$	0.42
Weighted average common shares outstanding		4,795,382			4,587,883
Weighted average common and common equivalent shares outstanding		4,847,433			4,617,102
Cash dividends declared per common share	$	0.04		$	0.04

See Notes to Consolidated Financial Statements

4

QCR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Nine Months Ended September 30, 2011 and 2010
	Preferred			Common			Additional Paid-In			Retained			Accumulated Other Comprehensive			Noncontrolling			Treasury
	Stock			Stock			Capital			Earnings			Income (Loss)			Interests			Stock			Total
Balance December 31, 2010	$	63,237		$	4,732,428		$	86,478,269		$	40,550,900		$	704,165		$	1,648,219		$	(1,606,510	)	$	132,570,708
Comprehensive income:
Net income		-			-			-			2,124,960			-			106,524			-			2,231,484
Other comprehensive loss, net of tax		-			-			-			-			(1,345,554	)		-			-			(1,345,554	)
Comprehensive income																							885,930
Preferred cash dividends declared and accrued		-			-			-			(915,462	)		-			-			-			(915,462	)
Discount accretion on cumulative preferred stock		-			-			116,909			(116,909	)		-			-			-			-
Proceeds from issuance of 9,081 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-			9,081			49,249			-			-			-			-			58,330
Proceeds from issuance of 24,300 shares of common stock as a result of stock options exercised		-			24,300			146,067			-			-			-			-			170,367
Exchange of 2,171 shares of common stock in connection with stock options exercised		-			(2,171	)		(14,070	)		-			-			-			-			(16,241	)
Stock compensation expense		-			-			206,569															206,569
Restricted stock awards		-			69,924			(69,924	)		-			-			-			-			-
Other adjustments to noncontrolling interests		-			-			-			-			-			(2,065	)		-			(2,065	)
Balance March 31, 2011	$	63,237		$	4,833,562		$	86,913,069		$	41,643,489		$	(641,389	)	$	1,752,678		$	(1,606,510	)	$	132,958,136
Comprehensive income:
Net income		-			-			-			2,674,969			-			98,245			-			2,773,214
Other comprehensive income, net of tax		-			-			-			-			2,409,728			-			-			2,409,728
Comprehensive income																							5,182,942
Common cash dividends declared, $0.04 per share		-			-			-			(185,863	)		-			-			-			(185,863	)
Preferred cash dividends declared and accrued		-			-			-			(915,462	)		-			-			-			(915,462	)
Discount accretion on cumulative preferred stock		-			-			120,280			(120,280	)		-			-			-			-
Proceeds from issuance of 11,355 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-			11,355			61,582			-			-			-			-			72,937
Proceeds from issuance of 10,967 shares of common stock as a result of stock options exercised		-			10,967			65,205			-			-			-			-			76,172
Exchange of 379 shares of common stock in connection with stock options exercised		-			(379	)		(3,033	)		-			-			-			-			(3,412	)
Stock compensation expense		-			-			141,370															141,370
Other adjustments to noncontrolling interests		-			-			-			-			-			(2,066	)		-			(2,066	)
Balance June 30, 2011	$	63,237		$	4,855,505		$	87,298,473		$	43,096,853		$	1,768,339		$	1,848,857		$	(1,606,510	)	$	137,324,754
Comprehensive income:
Net income		-			-			-			2,163,155			-			103,446			-			2,266,601
Other comprehensive income, net of tax		-			-			-			-			2,404,295			-			-			2,404,295
Comprehensive income																							4,670,896
Preferred cash dividends declared		-			-			-			(835,802	)		-			-			-			(835,802	)
Discount accretion on cumulative preferred stock		-			-			1,352,256			(1,352,256	)		-			-			-			-
Proceeds from the issuance of 40,090 shares of Series F Non-Cumulative Perpetual Preferred Stock		40,090			-			40,034,251			-			-			-			-			40,074,341
Redemption of 38,237 shares of Series D Cumulative Perpetual Preferred Stock		(38,237	)		-			(38,198,763	)		-			-			-			-			(38,237,000	)
Proceeds from issuance of 7,975 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-			7,975			43,251			-			-			-			-			51,226
Stock compensation expense		-			-			149,160															149,160
Restricted stock awards		-			5,000			(5,000	)														-
Other adjustments to noncontrolling interests		-			-			-			-			-			(28,702	)		-			(28,702	)
Balance September 30, 2011	$	65,090		$	4,868,480		$	90,673,628		$	43,071,950		$	4,172,634		$	1,923,601		$	(1,606,510	)	$	143,168,873

(continued)

5

QCR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (continued)
Nine Months Ended September 30, 2011 and 2010
						Additional						Accumulated Other
	Preferred		Common			Paid-In			Retained			Comprehensive		Noncontrolling			Treasury
	Stock		Stock			Capital			Earnings			Income		Interests			Stock			Total
Balance December 31, 2009	$	38,805	$	4,674,536		$	82,194,330		$	38,458,477		$	135,608	$	1,699,630		$	(1,606,510	)	$	125,594,876
Comprehensive income:
Net income		-		-			-			1,292,009			-		(77,076	)		-			1,214,933
Other comprehensive income, net of tax		-		-			-			-			1,663,236		-			-			1,663,236
Comprehensive income																					2,878,169
Preferred cash dividends declared and accrued		-		-			-			(924,088	)		-		-			-			(924,088	)
Discount accretion on cumulative preferred stock		-		-			109,331			(109,331	)		-		-			-			-
Proceeds from issuance of warrants to purchase 54,000 shares of common stock in conjunction with the issuance of Series A Subordinated Notes		-		-			84,240			-			-		-			-			84,240
Proceeds from issuance of 6,270 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-		6,270			40,849			-			-		-			-			47,119
Exchange of 367 shares of common stock in connection with payroll taxes for restricted stock		-		(367	)		(2,730	)		-			-		-			-			(3,097	)
Stock compensation expense		-		-			181,489														181,489
Restricted stock awards		-		23,598			(23,598	)		-			-		-			-			-
Other adjustments to noncontrolling interests		-		-			-			-			-		(2,065	)		-			(2,065	)
Balance March 31, 2010	$	38,805	$	4,704,037		$	82,583,911		$	38,717,067		$	1,798,844	$	1,620,489		$	(1,606,510	)	$	127,856,643
Comprehensive income:
Net income		-		-			-			1,737,501			-		62,336			-			1,799,837
Other comprehensive income, net of tax		-		-			-			-			2,043,708		-			-			2,043,708
Comprehensive income																					3,843,545
Common cash dividends declared, $0.04 per share		-		-			-			(182,730	)		-		-			-			(182,730	)
Preferred cash dividends declared and accrued		-		-			-			(924,088	)		-		-			-			(924,088	)
Discount accretion on cumulative preferred stock		-		-			113,225			(113,225	)		-		-			-			-
Exchange of 268 shares of Series B Non-Cumulative Perpetual Preferred Stock for 13,400 shares of Series E Non-Cumulative Perpetual Convertible Preferred Stock		13,132		-			(13,132	)		-			-		-			-			-
Exchange of 300 shares of Series C Non-Cumulative Perpetual Preferred Stock for 7,500 shares of Series E Non-Cumulative Perpetual Convertible Preferred Stock		7,200		-			(7,200	)		-			-		-			-			-
Proceeds from issuance of 4,100 shares of Series E Non-Cumulative Perpetual Convertible Preferred Stock		4,100		-			3,199,333			-			-		-			-			3,203,433
Proceeds from issuance of 9,629 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-		9,629			62,733			-			-		-			-			72,362
Proceeds from the issuance of 1,504 shares of common stock in connection with options exercised		-		1,504			11,715			-			-		-			-			13,219
Stock compensation expense		-		-			112,693			-			-		-			-			112,693
Other adjustments to noncontrolling interests		-		-			-			-			-		4,706			-			4,706
Balance June 30, 2010	$	63,237	$	4,715,170		$	86,063,278		$	39,234,525		$	3,842,552	$	1,687,531		$	(1,606,510	)	$	133,999,783
Comprehensive income:
Net income		-		-			-			2,014,086			-		109,786			-			2,123,872
Other comprehensive income, net of tax		-		-			-			-			160,545		-			-			160,545
Comprehensive income																					2,284,417
Preferred cash dividends declared and accrued		-		-			-			(915,462	)		-		-			-			(915,462	)
Discount accretion on cumulative preferred stock		-		-			113,224			(113,224	)		-		-			-			-
Proceeds from issuance of 6,420 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-		6,420			41,827			-			-		-			-			48,247
Proceeds from the issuance of 750 shares of common stock in connection with options exercised		-		750			4,907			-			-		-			-			5,657
Additional issuance cost related to the Series E Non-Cumulative Perpetual Convertible Preferred Stock		-		-			(16,200	)		-			-		-			-			(16,200	)
Stock compensation expense		-		-			118,448														118,448
Other adjustments to noncontrolling interests		-		-			-			-			-		(2,066	)		-			(2,066	)
Balance September 30, 2010	$	63,237	$	4,722,340		$	86,325,484		$	40,219,925		$	4,003,097	$	1,795,251		$	(1,606,510	)	$	135,522,824

See Notes to Consolidated Financial Statements

6

QCR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	7,271,299		$	5,138,642
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		1,866,403			1,926,876
Provision for loan/lease losses		5,196,850			4,413,650
Amortization of offering costs on subordinated debentures		10,738			10,738
Stock-based compensation expense		547,087			467,768
Losses on sales of other real estate owned, net		90,492			632,806
Amortization of premiums on securities, net		2,541,408			2,555,204
Securities gains		(1,472,528	)		-
Other-than-temporary impairment losses on securities		118,847			113,800
Loans originated for sale		(65,240,469	)		(103,689,462	)
Proceeds on sales of loans		75,960,589			95,662,334
Gains on sales of loans, net		(1,923,185	)		(1,831,856	)
Prepayment fees on Federal Home Loan Bank advances		832,099			-
Losses on lease residual values		-			617,000
(Decrease) increase in accrued interest receivable		(376,868	)		447,886
Decrease in prepaid FDIC insurance		1,362,876			1,788,261
Increase in cash value of bank-owned life insurance		(1,032,493	)		(973,659	)
Increase in other assets		(278,687	)		(651,803	)
Increase in other liabilities		955,174			1,504,602
Net cash provided by operating activities	$	26,429,632		$	8,132,787
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in federal funds sold		56,170,000			(15,356,667	)
Net decrease (increase) in interest-bearing deposits at financial institutions		15,080,252			(7,152,522	)
Proceeds from sales of foreclosed assets		8,376,898			1,759,607
Activity in securities portfolio:
Purchases		(458,081,700	)		(294,445,750	)
Calls, maturities and redemptions		302,145,002			243,389,938
Paydowns		4,977,152			400,605
Sales		54,326,191			-
Activity in restricted investment securities:
Purchases		(245,000	)		(1,704,350	)
Redemptions		1,675,700			204,800
Activity in bank-owned life insurance:
Purchases		(7,000,000	)		(3,150,000	)
Surrender of policy		-			609,772
Net (increase) decrease in loans/leases originated and held for investment		(48,043,333	)		51,105,615
Purchase of premises and equipment		(1,693,870	)		(2,025,145	)
Net cash used in investing activities	$	(72,312,708	)	$	(26,364,097	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposit accounts		92,653,389			(2,589,804	)
Net increase (decrease) in short-term borrowings		2,431,992			(14,481,044	)
Activity in Federal Home Loan Bank advances:
Advances		5,000,000			36,000,000
Calls and maturities		(24,000,000	)		(13,100,000	)
Prepayments		(15,832,099	)		-
Net (decrease) increase in other borrowings		(9,941,030	)		7,536,866
Proceeds from issuance of Series A Subordinated Notes and detachable warrants to purchase 54,000 shares of common stock		-			2,700,000
Payment of cash dividends on common and preferred stock		(3,274,991	)		(3,136,626	)
Proceeds from issuance of Series E Noncumulative Convertible		-			3,187,233
Perpetual Preferred Stock, net
Proceeds from issuance of Series F Noncumulative Perpetual Preferred Stock		40,074,341			-
Redemption of Series D Cumulative Perpetual Preferred Stock		(38,237,000	)		-
Proceeds from issuance of common stock, net		409,379			183,507
Net cash provided by financing activities	$	49,283,981		$	16,300,132
Net increase (decrease) in cash and due from banks		3,400,905			(1,931,178	)
Cash and due from banks, beginning		42,030,806			35,878,046
Cash and due from banks, ending	$	45,431,711		$	33,946,868
Supplemental disclosure of cash flow information, cash payments for:
Interest	$	18,521,222		$	23,362,893
Income/franchise taxes	$	1,196,948		$	1,497,611
Supplemental schedule of noncash investing activities:
Change in accumulated other comprehensive income, unrealized gains on securities available for sale, net	$	3,468,469		$	3,867,489
Transfers of loans to other real estate owned	$	8,220,271		$	5,442,568

See Notes to Consolidated Financial Statements

7

QCR HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation:  The interim unaudited consolidated financial statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended December 31, 2010, including QCR Holdings, Inc.’s (the “Company”) Form 10-K filed with the Securities and Exchange Commission on March 7, 2011.  Accordingly, footnote disclosures, which would substantially duplicate the disclosures contained in the audited consolidated financial statements, have been omitted.

The financial information of the Company included herein has been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X.  Such information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented.  Any differences appearing between the numbers presented in financial statements and management’s discussion and analysis are due to rounding.  The results of the interim period ended September 30, 2011, are not necessarily indicative of the results expected for the year ending December 31, 2011.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include three state-chartered commercial banks:  Quad City Bank & Trust Company (“QCBT”), Cedar Rapids Bank & Trust Company (“CRBT”), and Rockford Bank & Trust Company (“RB&T”).  The Company also engages in direct financing lease contracts through its 80% equity investment by QCBT in m2 Lease Funds, LLC (“m2 Lease Funds”), and in real estate holdings through its 91% equity investment in Velie Plantation Holding Company, LLC (“VPHC”).  All material intercompany transactions and balances have been eliminated in consolidation.

Reclassifications:  Certain amounts in the prior year financial statements have been reclassified, with no effect on net income or stockholders’ equity, to conform with current period presentation.

Recent accounting developments:  In April 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-2, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.  ASU 2011-2 amends ASC Topic 310, Receivables, by clarifying guidance for creditors in determining whether a concession has been granted and whether a debtor is experiencing financial difficulties.  The Company adopted ASU 2011-2 effective for the interim period ending September 30, 2011 and applied ASU 2011-2 retrospectively to January 1, 2011.  Adoption did not have a material impact on the consolidated financial statements.  See Note 3 for disclosure of the Company’s troubled debt restructurings.

8

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

In April 2011, FASB issued ASU No. 2011-03, Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements. ASU 2011-03 is intended to improve financial reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance guidance related to that criterion. ASU 2011-03 will be effective for the Company on January 1, 2012 and is not expected to have a significant impact on the Company’s consolidated financial statements.

In May 2011, FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRS.  ASU 2011-04 amends Topic 820, Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU 2011-04 is effective for annual periods beginning after December 15, 2011, and is not expected to have a significant impact on the Company’s consolidated financial statements.

In June 2011, FASB issued ASU 2011-05, Comprehensive Income (Topic 220) - Presentation of Comprehensive Income. ASU 2011-05 amends Topic 220, Comprehensive Income, to require that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. ASU 2011-05 is effective for annual periods beginning after December 15, 2011, and is not expected to have a significant impact on the Company’s consolidated financial statements.

In September 2011, FASB issued ASU 2011-08, Intangibles – Goodwill and Other: Testing Goodwill for Impairment.  ASU 2011-08 allows the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining the need to perform step one of the annual test for goodwill impairment.  ASU 2011-08 is effective for annual periods beginning after December 15, 2011.  Early adoption is permitted.  The Company decided to early adopt ASU 2011-08 as of September 30, 2011 and the adoption did not have any effect on the Company’s consolidated financial statements.

9

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of September 30, 2011 and December 31, 2010 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2011:
Securities held to maturity, other bonds	$	200,000	$	-	$	-		$	200,000
Securities available for sale:
U.S. govt. sponsored agency securities	$	412,874,368	$	2,280,889	$	(371,420	)	$	414,783,837
Residential mortgage-backed securities		80,069,540		3,382,915		-			83,452,455
Municipal securities		24,580,364		1,410,952		-			25,991,316
Trust preferred securities		86,200		-		(14,400	)		71,800
Other securities		1,346,972		106,442		(41,036	)		1,412,378
	$	518,957,444	$	7,181,198	$	(426,856	)	$	525,711,786
December 31, 2010:
Securities held to maturity, other bonds	$	300,000	$	-	$	-		$	300,000
Securities available for sale:
U.S. govt. sponsored agency securities	$	401,711,432	$	3,218,843	$	(2,704,919	)	$	402,225,356
Residential mortgage-backed securities		64,912		5,526		-			70,438
Municipal securities		20,134,611		579,215		(110,346	)		20,603,480
Trust preferred securities		86,200		-		(8,200	)		78,000
Other securities		1,414,661		168,331		(13,499	)		1,569,493
	$	423,411,816	$	3,971,915	$	(2,836,964	)	$	424,546,767

10

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2011 and December 31, 2010, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2011:
Securities available for sale:
U.S. govt. sponsored agency securities	$	102,397,415	$	(371,420	)	$	-	$	-		$	102,397,415	$	(371,420	)
Trust preferred securities		71,800		(14,400	)		-		-			71,800		(14,400	)
Other securities		301,176		(40,510	)		2,725		(526	)		303,901		(41,036	)
	$	102,770,391	$	(426,330	)	$	2,725	$	(526	)	$	102,773,116	$	(426,856	)
December 31, 2010:
Securities available for sale:
U.S. govt. sponsored agency securities	$	159,302,061	$	(2,704,919	)	$	-	$	-		$	159,302,061	$	(2,704,919	)
Municipal securities		4,333,786		(47,884	)		678,378		(62,462	)		5,012,164		(110,346	)
Trust preferred securities		86,200		(8,200	)		-		-			86,200		(8,200	)
Other securities		226,250		(12,671	)		2,872		(828	)		229,122		(13,499	)
	$	163,948,297	$	(2,773,674	)	$	681,250	$	(63,290	)	$	164,629,547	$	(2,836,964	)

At September 30, 2011, the investment portfolio included 331 securities.  Of this number, 54 securities had current unrealized losses with aggregate depreciation less than 1% from the amortized cost basis.  Of these 54, one had unrealized losses for twelve months or more.  All of the debt securities in unrealized loss positions are considered acceptable credit risks.  Based upon an evaluation of the available evidence, including the recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary.  In addition, the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these debt securities before their anticipated recovery.  At September 30, 2011 and December 31, 2010, equity securities represented less than 1% of the total portfolio.

The Company did not recognize other-than-temporary impairment on any debt securities for the three and nine months ended September 30, 2011.   During the three months ended September 30, 2010, the Company’s evaluation determined the decline in fair value for one individual issue trust preferred security was other-than-temporary.  As a result, the Company wrote down the value of this security and recognized a loss totaling $113,800.  The Company does not have any other investments in trust preferred securities.

During the second quarter of 2011, the Company’s evaluation determined that two privately held equity securities experienced declines in fair value that were other-than-temporary.  As a result, the Company wrote down the value of these securities and recognized losses in the amount of $118,847.  The Company did not recognize other-than-temporary impairment on any of its equity securities during the first or third quarters of 2011.  Additionally, the Company did not recognize other-than-temporary impairment on any of its equity securities for the three and nine months ended September 30, 2010.

11

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

All sales of securities, as applicable, for the three and nine months ended September 30, 2011 and 2010, respectively, were from securities identified as available for sale.  Information on proceeds received, as well as pre-tax gross gains from sales of those securities is as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2011		September 30, 2010		September 30, 2011		September 30, 2010
Proceeds from sales of securities	$	8,601,107	$	-	$	54,326,191	$	-
Pre-tax gross gains from sales of securities		443,614		-		1,472,528		-

The amortized cost and fair value of securities as of September 30, 2011 by contractual maturity are shown below.  A portion of the Company’s U.S. government sponsored agency securities contain call options which allow the issuer, at its discretion, to call the security at predetermined dates prior to the contractual maturity date.Expected maturities of residential mortgage-backed securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed securities may be called or prepaid without any penalties.  Therefore, these securities are not included in the maturity categories in the following table.  “Other securities” are excluded from the maturity categories as there is no fixed maturity date.

	Amortized
	Cost		Fair Value
Securities held to maturity:
Due in one year or less	$	50,000	$	50,000
Due after one year through five years		100,000		100,000
Due after five years		50,000		50,000
	$	200,000	$	200,000
Securities available for sale:
Due in one year or less	$	2,803,210	$	2,811,980
Due after one year through five years		68,117,087		68,470,834
Due after five years		366,620,635		369,564,139
	$	437,540,932	$	440,846,953
Residential mortgage-backed securities		80,069,540		83,452,455
Other securities		1,346,972		1,412,378
	$	518,957,444	$	525,711,786

12

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 3 – LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of September 30, 2011 and December 31, 2010 is presented as follows:

	As of September 30,			As of December 31,
	2011			2010
Commercial and industrial loans	$	363,997,365		$	365,625,271
Commercial real estate loans
Owner-occupied commercial real estate		160,485,944			141,411,027
Commercial construction, land development, and other land		63,582,594			65,529,058
Other non owner-occupied commercial real estate		344,418,820			346,777,179
		568,487,358			553,717,264
Direct financing leases *		88,893,130			83,009,647
Residential real estate loans **		94,073,045			82,196,622
Installment and other consumer loans		79,892,870			86,239,944
		1,195,343,768			1,170,788,748
Plus deferred loan/lease orgination costs, net of fees		2,237,942			1,749,855
		1,197,581,710			1,172,538,603
Less allowance for estimated losses on loans/leases		(19,578,486	)		(20,364,656	)
	$	1,178,003,224		$	1,152,173,947
* Direct financing leases:
Net minimum lease payments to be received	$	101,466,699		$	94,921,417
Estimated unguaranteed residual values of leased assets		1,108,701			1,204,865
Unearned lease/residual income		(13,682,270	)		(13,116,635	)
		88,893,130			83,009,647
Plus deferred lease origination costs, net of fees		2,800,256			2,341,628
		91,693,386			85,351,275
Less allowance for estimated losses on leases		(1,051,960	)		(1,530,572	)
	$	90,641,426		$	83,820,703

 **Includes residential real estate loans held for sale totaling $5,287,924 and $14,084,859 as of September 30, 2011 and December 31, 2010, respectively.

Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum.  The evaluation consists of discussions with reputable and current vendors and management’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment.  As necessary and where available, management will utilize valuations by independent appraisers.  The large majority of leases with residual values contain a lease options rider which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value.  In these cases, the residual value is protected and the risk of loss is minimal.

13

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

For the three and nine months ended September 30, 2011, and for the three months ended September 30, 2010, there were no losses on residual values.  During the first quarter of 2010, the Company recognized losses totaling $617,000 in residual values for two direct financing equipment leases.  At September 30, 2011, the Company had 43 leases remaining with residual values totaling $1,108,701 that were not protected with a lease end options rider.  At December 31, 2010, the Company had 54 leases remaining with residual values totaling $1,204,865 that were not protected with a lease end options rider.  Management has performed specific evaluations of these residual values and determined that the valuations are appropriate.

The aging of the loan/lease portfolio by classes of loans/leases as of September 30, 2011 is presented as follows:

Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
Commercial and Industrial	$	357,960,272		$	384,752		$	101,500		$	-		$	5,550,841		$	363,997,365
Commercial Real Estate
Owner-Occupied Commercial Real Estate		157,028,882			860,990			-			-			2,596,072			160,485,944
Commercial Construction, Land Development, and Other Land		53,798,001			-			1,039,528			-			8,745,065			63,582,594
Other Non Owner-Occupied Commercial Real Estate		323,363,602			5,763,492			5,824,332			321,605			9,145,789			344,418,820
Direct Financing Leases		86,897,793			1,158,023			120,825			-			716,489			88,893,130
Residential Real Estate		92,747,679			-			131,302			-			1,194,064			94,073,045
Installment and Other Consumer		78,113,490			289,418			420,426			11,886			1,057,650			79,892,870
	$	1,149,909,719		$	8,456,675		$	7,637,913		$	333,491		$	29,005,970		$	1,195,343,768
As a percentage of total loan/lease portfolio		96.20	%		0.71	%		0.64	%		0.03	%		2.43	%		100.00	%

The aging of the loan/lease portfolio by classes of loans/leases as of December 31, 2010 is presented as follows:

Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
Commercial and Industrial	$	353,437,063		$	300,224		$	203,722		$	-		$	11,684,262		$	365,625,271
Commercial Real Estate
Owner-Occupied Commercial Real Estate		139,880,634			236,910			-			103,015			1,190,468			141,411,027
Commercial Construction, Land Development, and Other Land		55,552,352			746,545			-			-			9,230,161			65,529,058
Other Non Owner-Occupied Commercial Real Estate		335,171,858			275,000			546,019			70,125			10,714,177			346,777,179
Direct Financing Leases		79,708,979			1,605,836			92,244			-			1,602,588			83,009,647
Residential Real Estate		79,910,279			876,509			-			123,557			1,286,277			82,196,622
Installment and Other Consumer		84,214,010			101,770			182,349			23,139			1,718,676			86,239,944
	$	1,127,875,175		$	4,142,794		$	1,024,334		$	319,836		$	37,426,609		$	1,170,788,748
As a percentage of total loan/lease portfolio		96.33	%		0.35	%		0.09	%		0.03	%		3.20	%		100.00	%

14

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Nonperforming loans/leases by classes of loans/leases as of September 30, 2011 is presented as follows:

Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Troubled Debt Restructurings - Accruing		Total Nonperforming Loans/Leases		Percentage of Total Nonperforming Loans/Leases
Commercial and Industrial	$	-	$	5,550,841	$	-	$	5,550,841		17.34	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		2,596,072		-		2,596,072		8.11	%
Commercial Construction, Land Development, and Other Land		-		8,745,065		1,114,956		9,860,021		30.80	%
Other Non Owner-Occupied Commercial Real Estate		321,605		9,145,789		941,140		10,408,534		32.51	%
Direct Financing Leases		-		716,489		619,114		1,335,603		4.17	%
Residential Real Estate		-		1,194,064		-		1,194,064		3.73	%
Installment and Other Consumer		11,886		1,057,650		-		1,069,536		3.34	%
	$	333,491	$	29,005,970	$	2,675,210	$	32,014,671		100.00	%

*Nonaccrual loans/leases includes $8,640,421 of troubled debt restructurings, including $219,220 in commercial and industrial loans, and $7,956,866 in commercial real estate loans.

Nonperforming loans/leases by classes of loans/leases as of December 31, 2010 is presented as follows:

Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Troubled Debt Restructurings - Accruing		Total Nonperforming Loans/Leases		Percentage of Total Nonperforming Loans/Leases
Commercial and Industrial	$	-	$	11,684,262	$	180,228	$	11,864,490		28.83	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		103,015		1,190,468		-		1,293,483		3.14	%
Commercial Construction, Land Development, and Other Land		-		9,230,161		961,879		10,192,040		24.77	%
Other Non Owner-Occupied Commercial Real Estate		70,125		10,714,177		2,100,837		12,885,139		31.31	%
Direct Financing Leases		-		1,602,588		162,502		1,765,090		4.29	%
Residential Real Estate		123,557		1,286,277		-		1,409,834		3.43	%
Installment and Other Consumer		23,139		1,718,676		-		1,741,815		4.23	%
	$	319,836	$	37,426,609	$	3,405,446	$	41,151,891		100.00	%

**Nonaccrual loans/leases includes $12,631,343 of troubled debt restructurings, including $2,200,986 in commercial and industrial loans and $9,407,276 in commercial real estate loans.

15

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Changes in the allowance for estimated losses on loans/leases by portfolio segment for the three and nine months ended September 30, 2011 and 2010, respectively, are presented as follows:

	Three Months Ended September 30, 2011
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	7,124,444		$	8,602,639		$	1,591,309		$	757,075		$	1,727,165		$	19,802,632
Provisions charged to expense		(211,491	)		2,645,457			159,965			92,032			(228,998	)		2,456,965
Loans/leases charged off		(1,465,577	)		(852,174	)		(701,658	)		-			(84,358	)		(3,103,767	)
Recoveries on loans/leases previously charged off		174,013			212,683			2,344			-			33,616			422,656
Balance, ending	$	5,621,389		$	10,608,605		$	1,051,960		$	849,107		$	1,447,425		$	19,578,486
	Three Months Ended September 30, 2010
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,875,508		$	11,907,867		$	1,707,762		$	567,491		$	1,502,335		$	21,560,963
Provisions charged to expense		839,037			205,290			210,232			109,850			69,823			1,434,232
Loans/leases charged off		(1,151,574	)		(1,631,524	)		(695,176	)		-			(100,919	)		(3,579,193	)
Recoveries on loans/leases previously charged off		13,995			278,594			156,288			-			17,947			466,824
Balance, ending	$	5,576,966		$	10,760,227		$	1,379,106		$	677,341		$	1,489,186		$	19,882,826
	Nine Months Ended September 30, 2011
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	7,548,922		$	9,087,315		$	1,530,572		$	748,028		$	1,449,819		$	20,364,656
Provisions charged to expense		1,005,002			3,038,359			463,850			101,079			588,560			5,196,850
Loans/leases charged off		(3,256,194	)		(1,773,711	)		(945,104	)		-			(701,390	)		(6,676,399	)
Recoveries on loans/leases previously charged off		323,659			256,642			2,642			-			110,436			693,379
Balance, ending	$	5,621,389		$	10,608,605		$	1,051,960		$	849,107		$	1,447,425		$	19,578,486
	Nine Months Ended September 30, 2010
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,425,624		$	12,665,721		$	1,681,376		$	685,732		$	2,046,281		$	22,504,734
Provisions charged to expense		3,033,353			721,158			468,651			(8,391	)		198,879			4,413,650
Loans/leases charged off		(2,993,277	)		(3,030,503	)		(928,019	)		-			(891,008	)		(7,842,807	)
Recoveries on loans/leases previously charged off		111,266			403,851			157,098			-			135,034			807,249
Balance, ending	$	5,576,966		$	10,760,227		$	1,379,106		$	677,341		$	1,489,186		$	19,882,826

16

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The allowance for estimated losses on loans/leases by impairment evaluation and by portfolio segment as of September 30, 2011 is presented as follows:

	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for loans/leases individually evaluated for impairment	$	945,475		$	4,741,965		$	8,000		$	66,035		$	108,724		$	5,870,199
Allowance for loans/leases collectively evaluated for impairment		4,675,914			5,866,640			1,043,960			783,072			1,338,701			13,708,287
	$	5,621,389		$	10,608,605		$	1,051,960		$	849,107		$	1,447,425		$	19,578,486
Loans/leases individually evaluated for impairment	$	3,420,793		$	22,539,729		$	1,335,603		$	1,194,063		$	721,943		$	29,212,131
Loans/leases collectively evaluated for impairment		360,576,572			545,947,629			87,557,527			92,878,982			79,170,927			1,166,131,637
	$	363,997,365		$	568,487,358		$	88,893,130		$	94,073,045		$	79,892,870		$	1,195,343,768
Allowance as a percentage of loans/leases individually evaluated for impairment		27.64	%		21.04	%		0.60	%		5.53	%		15.06	%		20.10	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.30	%		1.07	%		1.19	%		0.84	%		1.69	%		1.18	%
		1.54	%		1.87	%		1.18	%		0.90	%		1.81	%		1.63	%

The allowance for estimated losses on loans/leases by impairment evaluation and by portfolio segment as of December 31, 2010 is presented as follows:

	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for loans/leases individually evaluated for impairment	$	3,331,437		$	3,709,177		$	335,000		$	27,355		$	49,777		$	7,452,746
Allowance for loans/leases collectively evaluated for impairment		4,217,485			5,378,138			1,195,572			720,673			1,400,042			12,911,910
	$	7,548,922		$	9,087,315		$	1,530,572		$	748,028		$	1,449,819		$	20,364,656
Loans/leases individually evaluated for impairment	$	8,824,670		$	24,770,032		$	1,765,090		$	1,286,277		$	1,611,098		$	38,257,167
Loans/leases collectively evaluated for impairment		356,800,601			528,947,232			81,244,557			80,910,345			84,628,846			1,132,531,581
	$	365,625,271		$	553,717,264		$	83,009,647		$	82,196,622		$	86,239,944		$	1,170,788,748
Allowance as a percentage of loans/leases individually evaluated for impairment		37.75	%		14.97	%		18.98	%		2.13	%		3.09	%		19.48	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.18	%		1.02	%		1.47	%		0.89	%		1.65	%		1.14	%
		2.06	%		1.64	%		1.84	%		0.91	%		1.68	%		1.74	%

17

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Information for impaired loans/leases is presented in the tables below.  The recorded investment represents customer balances net of any partial charge-offs recognized on the loan/lease.  The unpaid principal balance represents the recorded balance outstanding on the loan/lease prior to any partial charge-offs.

Information for impaired loans/leases by classes of financing receivable as of and for the nine months ended September 30, 2011 is as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	771,177	$	1,446,065	$	-	$	4,363,221	$	15,961	$	15,961
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,572,641		1,625,409		-		2,009,518		54,314		54,314
Commercial Construction, Land Development, and Other Land		234,890		234,890		-		1,524,700		-		-
Other Non Owner-Occupied Commercial Real Estate		1,730,764		1,730,764		-		3,665,415		-		-
Direct Financing Leases		1,231,385		1,231,385		-		529,106		-		-
Residential Real Estate		932,813		932,813		-		1,008,968		-		-
Installment and Other Consumer		613,219		613,219		-		835,483		-		-
	$	7,086,889	$	7,814,545	$	-	$	13,936,411	$	70,275	$	70,275
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	2,649,616	$	2,649,616	$	945,475	$	1,515,521	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,390,681		1,390,681		611,350		160,397		-		-
Commercial Construction, Land Development, and Other Land		9,625,131		9,663,955		3,356,291		4,927,747		473		473
Other Non Owner-Occupied Commercial Real Estate		7,985,622		8,485,622		774,324		6,894,571		-		-
Direct Financing Leases		104,218		104,218		8,000		1,021,241		-		-
Residential Real Estate		261,250		295,928		66,035		168,233		-		-
Installment and Other Consumer		108,724		110,527		108,724		64,922		-		-
	$	22,125,242	$	22,700,547	$	5,870,199	$	14,752,632	$	473	$	473
Total Impaired Loans/Leases:
Commercial and Industrial	$	3,420,793	$	4,095,681	$	945,475	$	5,878,742	$	15,961	$	15,961
Commercial Real Estate
Owner-Occupied Commercial Real Estate		2,963,322		3,016,090		611,350		2,169,915		54,314		54,314
Commercial Construction, Land Development, and Other Land		9,860,021		9,898,845		3,356,291		6,452,447		473		473
Other Non Owner-Occupied Commercial Real Estate		9,716,386		10,216,386		774,324		10,559,986		-		-
Direct Financing Leases		1,335,603		1,335,603		8,000		1,550,347		-		-
Residential Real Estate		1,194,063		1,228,741		66,035		1,177,201		-		-
Installment and Other Consumer		721,943		723,746		108,724		900,405		-		-
	$	29,212,131	$	30,515,092	$	5,870,199	$	28,689,043	$	70,748	$	70,748

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

18

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Information for impaired loans/leases by classes of financing receivable for the three months ended September 30, 2011 is as follows:

Classes of Loans/Leases	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	2,236,289	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,774,342		11,909		11,909
Commercial Construction, Land Development, and Other Land		286,339		-		-
Other Non Owner-Occupied Commercial Real Estate		1,730,764		-		-
Direct Financing Leases		668,944		-		-
Residential Real Estate		942,011		-		-
Installment and Other Consumer		710,560		-		-
	$	8,349,249	$	11,909	$	11,909
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	1,534,968	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		360,894		-		-
Commercial Construction, Land Development, and Other Land		5,595,484		473		473
Other Non Owner-Occupied Commercial Real Estate		7,488,032		-		-
Direct Financing Leases		983,131		-		-
Residential Real Estate		200,625		-		-
Installment and Other Consumer		108,859		-		-
	$	16,271,993	$	473	$	473
Total Impaired Loans/Leases:
Commercial and Industrial	$	3,771,257	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		2,135,236		11,909		11,909
Commercial Construction, Land Development, and Other Land		5,881,823		473		473
Other Non Owner-Occupied Commercial Real Estate		9,218,796		-		-
Direct Financing Leases		1,652,075		-		-
Residential Real Estate		1,142,636		-		-
Installment and Other Consumer		819,419		-		-
	$	24,621,242	$	12,382	$	12,382

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

19

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Information for impaired loans/leases by classes of financing receivable as of December 31, 2010 is as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	1,459,790	$	3,350,036	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		681,727		681,727		-
Commercial Construction, Land Development, and Other Land		2,538,621		2,872,083		-
Other Non Owner-Occupied Commercial Real Estate		2,942,189		3,792,226		-
Direct Financing Leases		953,994		953,994		-
Residential Real Estate		758,031		758,031		-
Installment and Other Consumer		1,561,322		1,561,322		-
	$	10,895,674	$	13,969,419	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	7,364,880	$	7,866,634	$	3,331,436
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,074,210		1,074,210		232,194
Commercial Construction, Land Development, and Other Land		7,660,458		7,660,458		1,818,193
Other Non Owner-Occupied Commercial Real Estate		9,872,826		10,091,777		1,658,791
Direct Financing Leases		811,096		811,096		335,000
Residential Real Estate		528,246		528,246		27,355
Installment and Other Consumer		49,777		49,777		49,777
	$	27,361,493	$	28,082,198	$	7,452,746
Total Impaired Loans/Leases:
Commercial and Industrial	$	8,824,670	$	11,216,670	$	3,331,436
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,755,937		1,755,937		232,194
Commercial Construction, Land Development, and Other Land		10,199,079		10,532,541		1,818,193
Other Non Owner-Occupied Commercial Real Estate		12,815,015		13,884,003		1,658,791
Direct Financing Leases		1,765,090		1,765,090		335,000
Residential Real Estate		1,286,277		1,286,277		27,355
Installment and Other Consumer		1,611,099		1,611,099		49,777
	$	38,257,167	$	42,051,617	$	7,452,746

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

20

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of September 30, 2011:

			Commercial Real Estate
					Non Owner-Occupied
Internally Assigned Risk Rating	Commercial and Industrial		Owner-Occupied Commercial Real Estate		Commercial Construction, Land Development, and Other Land		Other Commercial Real Estate		Total
Pass (Ratings 1 through 5)	$	326,845,312	$	146,744,108	$	50,025,363	$	303,472,012	$	827,086,795
Special Mention (Rating 6)		9,211,829		2,704,551		505,706		19,546,611		31,968,697
Substandard (Rating 7)		27,940,224		11,037,285		13,051,525		21,400,197		73,429,231
Doubtful (Rating 8)		-		-		-		-		-
	$	363,997,365	$	160,485,944	$	63,582,594	$	344,418,820	$	932,484,723
	As of September 30, 2011
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	87,557,527	$	92,878,981	$	78,823,334	$	259,259,842
Nonperforming		1,335,603		1,194,064		1,069,536		3,599,203
	$	88,893,130	$	94,073,045	$	79,892,870	$	262,859,045

*Performing = loans/leases accruing and less than 90 days past due.  Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, or troubled debt restructurings.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of December 31, 2010:

			Commercial Real Estate
					Non Owner-Occupied
Internally Assigned Risk Rating	Commercial and Industrial		Owner-Occupied Commercial Real Estate		Commercial Construction, Land Development, and Other Land		Other Commercial Real Estate		Total
Pass (Ratings 1 through 5)	$	327,875,886	$	120,271,507	$	43,881,561	$	308,631,488	$	800,660,442
Special Mention (Rating 6)		10,457,805		7,510,519		10,338,187		15,244,142		43,550,653
Substandard (Rating 7)		27,270,474		13,629,001		11,309,310		22,901,549		75,110,334
Doubtful (Rating 8)		21,106		-		-		-		21,106
	$	365,625,271	$	141,411,027	$	65,529,058	$	346,777,179	$	919,342,535
	As of December 31, 2010
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	81,244,557	$	80,786,788	$	84,498,129	$	246,529,474
Nonperforming		1,765,090		1,409,834		1,741,815		4,916,739
	$	83,009,647	$	82,196,622	$	86,239,944	$	251,446,213

*Performing = loans/leases accruing and less than 90 days past due.  Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, or troubled debt restructurings.

21

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

For commercial and industrial and commercial real estate loans, the Company’s credit quality indicator is internally assigned risk ratings.  Each commercial loan is assigned a risk rating upon origination.  The risk rating is reviewed every 15 months, at a minimum, and on an as needed basis depending on the specific circumstances of the loan.

For direct financing leases, residential real estate loans, and installment and other consumer loans, the Company’s credit quality indicator is performance determined by delinquency status.  Delinquency status is updated daily by the Company’s loan system.

As a result of adopting ASU 2011-2, the Company reassessed all loan/lease modifications that occurred on or after January 1, 2011 for identification as a troubled debt restructuring.  The Company identified no additional loans/leases as troubled debt restructurings.

For each class of financing receivable, the following presents the number and recorded investment of troubled debt restructurings, by type of concession, that were restructured during the three and nine months ended September 30, 2011.

	For the three months ended September 30, 2011						For the nine months ended September 30, 2011
Classes of Loans/Leases	Number of TDRs		Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of TDRs		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
CONCESSION - Extension of maturity
Commercial and Industrial		-	$	-	$	-		-	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		-		-		-		1		2,500,530		2,500,530
Direct Financing Leases		-		-		-		-		-		-
Residential Real Estate		-		-		-		-		-		-
Installment and Other Consumer		-		-		-		-		-		-
		-	$	-	$	-		1	$	2,500,530	$	2,500,530
CONCESSION - Significant payment delay
Commercial and Industrial		-	$	-	$	-		-	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Direct Financing Leases		-		-		-		2		619,114		619,114
Residential Real Estate		-		-		-		-		-		-
Installment and Other Consumer		-		-		-		-		-		-
		-	$	-	$	-		2	$	619,114	$	619,114

22

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

There was no financial impact for charge-offs, principal forgiveness, or foregone interest for the troubled debt restructurings included in the previous table.  The financial impact for specific reserves was not significant for the troubled debt restructurings included in the previous table.

For the nine months ended September 30, 2011, none of the Company’s troubled debt restructurings have redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status.

NOTE 4 – FEDERAL HOME LOAN BANK ADVANCES

The subsidiary banks are members of the Federal Home Loan Bank (“FHLB”) of Des Moines or Chicago.  As of September 30, 2011 and December 31, 2010, the subsidiary banks held $11,549,000 and $12,980,200, respectively, of FHLB stock, which is included in restricted investment securities on the consolidated balance sheet.

During the first quarter of 2011, the Company’s largest subsidiary bank, QCBT, prepaid $15,000,000 of FHLB advances with a weighted average interest rate of 4.87% and a weighted average maturity of May 2012.  In addition, QCBT modified $20,350,000 of fixed rate FHLB advances with a weighted average interest rate of 4.33% and a weighted average maturity of October 2013 into new fixed rate FHLB advances with a weighted average interest rate of 3.35% and a weighted average maturity of February 2014.

23

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Maturity and interest rate information on FHLB advances for the Company as of September 30, 2011 and December 31, 2010 is as follows:

	September 30, 2011
			Weighted					Weighted
			Average			Amount Due		Average
			Interest Rate			with		Interest Rate
	Amount Due		at Quarter-End			Putable Option *		at Quarter-End
Maturity:
Year ending December 31:
2012	$	19,400,000		3.94	%	$	5,000,000		4.93	%
2013		24,000,000		2.64			-		-
2014		23,850,000		3.37			-		-
2015		14,000,000		1.68			-		-
Thereafter		123,500,000		4.09			103,500,000		4.25
Total FHLB advances	$	204,750,000		3.74		$	108,500,000		4.28
	December 31, 2010
			Weighted					Weighted
			Average			Amount Due		Average
			Interest Rate			with		Interest Rate
	Amount Due		at Year-End			Putable Option *		at Year-End
Maturity:
Year ending December 31:
2011	$	19,000,000		2.99	%	$	7,500,000		5.12	%
2012		49,750,000		4.43			35,000,000		4.77
2013		24,000,000		2.64			2,000,000		3.48
2014		3,500,000		2.19			-		-
2015		14,000,000		1.68			-		-
Thereafter		128,500,000		4.11			118,500,000		4.13
Total FHLB advances	$	238,750,000		3.84		$	163,000,000		4.30

*Of the advances outstanding, a large portion have putable options which allow the FHLB, at its discretion, to terminate the advances and require the subsidiary banks to repay at predetermined dates prior to the stated maturity date of the advances.

Advances are collateralized by securities with a carrying value of $22,185,875 and $65,376,627 as of September 30, 2011 and December 31, 2010, respectively, and by loans pledged of $419,940,309 and $386,087,610, respectively, in aggregate.  On pledged loans, the FHLB applies varying collateral maintenance levels from 125% to 333% based on the loan type.

24

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Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 5 - EARNINGS PER SHARE

The following information was used in the computation of earnings per share on a basic and diluted basis:

	Three months ended					Nine months ended
	September 30,					September 30,
	2011			2010		2011			2010
Net income	$	2,266,601		$	2,123,872	$	7,271,299		$	5,138,642
Less:  Net income attributable to noncontrolling interests		103,446			109,786		308,215			95,046
Net income attributable to QCR Holdings, Inc.	$	2,163,155		$	2,014,086	$	6,963,084		$	5,043,596
Less:  Preferred stock dividends and discount accretion		2,188,058	**		1,028,686		4,256,171	**		3,099,418
Net income (loss) attributable to QCR Holdings, Inc. common stockholders	$	(24,903	)	$	985,400	$	2,706,913		$	1,944,178
Earnings (loss) per common share attributable to QCR Holdings, Inc. common stockholders
Basic	$	(0.01	)	$	0.21	$	0.56		$	0.42
Diluted	$	(0.01	)	$	0.21	$	0.56		$	0.42
Weighted average common shares outstanding		4,866,692			4,598,566		4,795,382			4,587,883
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		-	*		21,008		52,051			29,219
Weighted average common and common equivalent shares outstanding		4,866,692	*		4,619,574		4,847,433			4,617,102

*In accordance with U.S. GAAP, the common equivalent shares are not considered in the calculation of diluted earnings per share as the numerator is a net loss.

**For the three and nine months ended September 30, 2011, includes approximately $1.2 million of accelerated accretion of discount on the Treasury Capital Purchase Program preferred shares repurchased during the third quarter of 2011.  See Note 8 for additional information.

NOTE 6 – BUSINESS SEGMENT INFORMATION

Selected financial and descriptive information is required to be disclosed for reportable operating segments, applying a “management perspective” as the basis for identifying reportable segments.  The management perspective is determined by the view that management takes of the segments within the Company when making operating decisions, allocating resources, and measuring performance.  The segments of the Company have been defined by the structure of the Company’s internal organization, focusing on the financial information that the Company’s operating decision-makers routinely use to make decisions about operating matters.

The Company’s primary segment, Commercial Banking, is geographically divided by markets into the secondary segments which are the three subsidiary banks wholly-owned by the Company:  QCBT, CRBT, and RB&T.  Each of these secondary segments offer similar products and services, but are managed separately due to different pricing, product demand, and consumer markets.  Each offers commercial, consumer, and mortgage loans and deposit services.

The Company’s Wealth Management segment represents the trust and asset management and investment management and advisory services offered at the Company’s three subsidiary banks in aggregate.  This segment generates income primarily from fees charged based on assets under administration for corporate and personal trusts, custodial services, and investments managed.  No assets of the subsidiary banks have been allocated to the Wealth Management segment.

25

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The Company’s All Other segment includes the operations of all other consolidated subsidiaries and/or defined operating segments that fall below the segment reporting thresholds.  This segment includes the corporate operations of the parent company and the 91% owned real estate holding operations of VPHC.

Selected financial information on the Company’s business segments is presented as follows for the three and nine months ended September 30, 2011 and 2010.

	Commercial Banking
	Quad City		Cedar Rapids		Rockford			Wealth					Intercompany			Consolidated
	Bank & Trust		Bank & Trust		Bank & Trust			Management		All other			Eliminations			Total
Three Months Ended September 30, 2011
Total revenue	$	12,147,213	$	7,110,970	$	3,377,454		$	1,311,647	$	3,319,882		$	(3,362,429	)	$	23,904,737
Net interest income	$	7,944,108	$	3,873,339	$	2,355,471		$	-	$	(344,214	)	$	-		$	13,828,704
Net income attributable to QCR Holdings, Inc.	$	1,854,914	$	1,375,114	$	(243,710	)	$	257,611	$	2,192,761		$	(3,273,535	)	$	2,163,155
Total assets	$	1,056,656,935	$	565,822,310	$	287,574,174		$	-	$	193,059,135		$	(204,152,062	)	$	1,898,960,492
Provision for loan/lease losses	$	1,158,965	$	250,000	$	1,048,000		$	-	$	-		$	-		$	2,456,965
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688
Three Months Ended September 30, 2010
Total revenue	$	11,655,728	$	7,455,990	$	3,575,942		$	1,490,742	$	3,194,862		$	(3,274,722	)	$	24,098,542
Net interest income	$	6,979,173	$	3,763,143	$	2,042,785		$	-	$	(621,526	)	$	-		$	12,163,575
Net income attributable to QCR Holdings, Inc.	$	1,601,579	$	881,372	$	235,095		$	442,634	$	2,038,028		$	(3,184,622	)	$	2,014,086
Total assets	$	982,315,353	$	548,462,235	$	274,910,743		$	-	$	185,977,307		$	(184,740,323	)	$	1,806,925,315
Provision for loan/lease losses	$	241,232	$	950,000	$	243,000		$	-	$	-		$	-		$	1,434,232
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688
Nine Months Ended September 30, 2011
Total revenue	$	35,990,157	$	21,482,485	$	10,046,334		$	4,238,644	$	10,776,476		$	(10,885,546	)	$	71,648,550
Net interest income	$	22,772,375	$	11,859,003	$	6,641,533		$	-	$	(1,284,350	)	$	-		$	39,988,561
Net income attributable to QCR Holdings, Inc.	$	5,777,707	$	3,964,627	$	45,697		$	741,263	$	7,054,192		$	(10,620,402	)	$	6,963,084
Total assets	$	1,056,656,935	$	565,822,310	$	287,574,174		$	-	$	193,059,135		$	(204,152,062	)	$	1,898,960,492
Provision for loan/lease losses	$	2,236,850	$	1,035,000	$	1,925,000		$	-	$	-		$	-		$	5,196,850
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688
Nine Months Ended September 30, 2010
Total revenue	$	35,704,318	$	21,609,584	$	10,437,241		$	3,764,384	$	8,712,310		$	(8,923,912	)	$	71,303,925
Net interest income	$	21,597,716	$	11,786,684	$	5,933,622		$	-	$	(1,802,787	)	$	-		$	37,515,235
Net income attributable to QCR Holdings, Inc.	$	4,569,482	$	2,517,463	$	768,950		$	679,350	$	5,181,035		$	(8,672,684	)	$	5,043,596
Total assets	$	982,315,353	$	548,462,235	$	274,910,743		$	-	$	185,977,307		$	(184,740,323	)	$	1,806,925,315
Provision for loan/lease losses	$	1,243,650	$	2,900,000	$	270,000		$	-	$	-		$	-		$	4,413,650
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688

26

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 7 – FAIR VALUE

The measurement of fair value under U.S. GAAP uses a hierarchy intended to maximize the use of observable inputs and minimize the use of unobservable inputs.  This hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities.  The three levels are as follows:

1. Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in markets;

2. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

3. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

There were no transfers of assets or liabilities between Levels 1, 2, and 3 of the fair value hierarchy for the nine months ended September 30, 2011 or 2010.

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Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Assets measured at fair value on a recurring basis comprise the following at September 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2011:
Securities available for sale:
U.S. govt. sponsored agency securities	$	414,783,837	$	-	$	414,783,837	$	-
Residential mortgage-backed securities		83,452,455		-		83,452,455		-
Municipal securities		25,991,316		-		25,991,316		-
Trust preferred securities		71,800		-		71,800		-
Other securities		1,412,378		176,068		1,236,310		-
	$	525,711,786	$	176,068	$	525,535,718	$	-
December 31, 2010:
Securities available for sale:
U.S. govt. sponsored agency securities	$	402,225,356	$	-	$	402,225,356	$	-
Residential mortgage-backed securities		70,438		-		70,438		-
Municipal securities		20,603,480		-		20,603,480		-
Trust preferred securities		78,000		-		78,000		-
Other securities		1,569,493		209,680		1,359,813		-
	$	424,546,767	$	209,680	$	424,337,087	$	-

A small portion of the securities available for sale portfolio consists of common stock issued by various unrelated bank holding companies.  The fair values used by the Company are obtained from an independent pricing service and represent quoted market prices for the identical securities (Level 1 inputs).

The large majority of the securities available for sale portfolio consists of U.S. government sponsored agency securities for which the Company obtains fair values from an independent pricing service.  The fair values are determined by pricing models that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems (Level 2 inputs).

28

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Certain financial assets are measured at fair value on a non-recurring basis; that is, the assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Assets measured at fair value on a non-recurring basis comprise the following at September 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2011:
Impaired loans/leases	$	17,555,446	$	-	$	-	$	17,555,446
Other real estate owned		8,950,599		-		-		8,950,599
	$	26,506,045	$	-	$	-	$	26,506,045
December 31, 2010:
Impaired loans/leases	$	21,501,447	$	-	$	-	$	21,501,447
Other real estate owned		9,217,488		-		-		9,217,488
	$	30,718,935	$	-	$	-	$	30,718,935

Impaired loans/leases are evaluated and valued at the time the loan/lease is identified as impaired, at the lower of cost or fair value and are classified as a Level 3 in the fair value hierarchy.  Fair value is measured based on the value of the collateral securing these loans/leases.  Collateral may be real estate and/or business assets, including equipment, inventory and/or accounts receivable, and is determined based on appraisals by qualified licensed appraisers hired by the Company.  Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business.  Other real estate owned in the table above consists of property acquired through foreclosures and settlements of loans.  Property acquired is carried at the lower of the principal amount of loans outstanding, or the estimated fair value of the property, less disposal costs, and is classified as a Level 3 in the fair value hierarchy.

For the impaired loans/leases and other real estate owned, the Company records carrying value at fair value less disposal or selling costs.  The amounts reported in the tables above are fair values before the adjustment for disposal or selling costs.

There have been no changes in valuation techniques used for any assets measured at fair value during the nine months ended September 30, 2011 or 2010.

29

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The following table presents the carrying values and estimated fair values of financial assets and liabilities carried on the Company’s consolidated balance sheets, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis:

	As of September 30, 2011				As of December 31, 2010
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Cash and due from banks	$	45,431,711	$	45,431,711	$	42,030,806	$	42,030,806
Federal funds sold		5,790,000		5,790,000		61,960,000		61,960,000
Interest-bearing deposits at financial institutions		24,665,359		24,665,359		39,745,611		39,745,611
Investment securities:
Held to maturity		200,000		200,000		300,000		300,000
Available for sale		525,711,786		525,711,786		424,546,767		424,546,767
Loans/leases receivable, net		1,178,003,224		1,202,671,000		1,152,173,947		1,169,015,000
Accrued interest receivable		6,812,857		6,812,857		6,435,989		6,435,989
Deposits		1,207,469,246		1,211,463,000		1,114,815,857		1,118,245,000
Short-term borrowings		143,586,491		143,586,491		141,154,499		141,154,499
Federal Home Loan Bank advances		204,750,000		223,371,000		238,750,000		254,307,000
Other borrowings		140,129,755		156,046,000		150,070,785		161,454,000
Accrued interest payable		1,740,603		1,740,603		2,167,648		2,167,648

The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above.  For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument.  These instruments include:  cash and due from banks, federal funds sold, interest-bearing deposits at financial institutions, accrued interest receivable and payable, demand and other non-maturity deposits, and short-term borrowings.  The Company used the following methods and assumptions in estimating the fair value of the following instruments:

Loans/leases receivable:  The fair values for variable rate loans equal their carrying values.  The fair values for all other types of loans/leases are estimated using discounted cash flow analyses, using interest rates currently being offered for loans/leases with similar terms to borrowers with similar credit quality.  The fair value of loans held for sale is based on quoted market prices of similar loans sold on the secondary market.

Deposits:  The fair values disclosed for demand and other non-maturity deposits equal their carrying amounts, which represent the amount payable on demand.  Fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on time deposits to a schedule of aggregate expected monthly maturities on time deposits.

Federal Home Loan Bank advances:  The fair value of these instruments is estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

30

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Other borrowings:  The fair value for the wholesale repurchase agreements and fixed rate other borrowings is estimated using rates currently available for debt with similar terms and remaining maturities.  The fair value for variable rate other borrowings is equal to its carrying value.

Junior subordinated debentures:  It is not practicable to estimate the fair value of the Company’s junior subordinated debentures as instruments with similar terms are not readily available in the market place.

Commitments to extend credit:  The fair value of these instruments is not material.

NOTE 8 – SERIES F NONCUMULATIVE PERPETUAL PREFERRED STOCK

On September 15, 2011, the Company issued 40,090 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series F (“Series F Preferred Stock”) to the U.S. Department of the Treasury (“Treasury”) for an aggregate purchase price of $40,090,000.  The sale of Series F Preferred Stock is the result of an investment by Treasury from the Small Business Lending Fund (“SBLF”), a $30 billion fund established under the Small Business Jobs Act of 2010 that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion.  As a requirement of the SBLF, simultaneously, the Company redeemed the 38,327 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series D (“Series D Preferred Stock”), at an aggregate price of $38,237,000 plus accrued and unpaid dividends to the date of redemption of $159,321.  The Series D Preferred Stock was issued on February 13, 2009 as a result of the Company’s participation in Treasury’s voluntary Capital Purchase Program (“CPP”).  In accordance with the CPP, in February 2009 the Company also issued warrants which allow Treasury to purchase up to 521,888 of the Company’s common stock at an exercise price of $10.99.  As of the date of this report, the Company and Treasury are in negotiations for the Company to repurchase the warrants.

The Series F Preferred Stock qualifies as Tier 1 capital for the Company.  Non-cumulative dividends are payable quarterly on the Series F Preferred Stock, and the dividend rate is based on changes in the level of “Qualified Small Business Lending” or “QSBL” by the Company’s wholly owned bank subsidiaries, QCBT, CRBT and RB&T.  Based upon the change in the banks’ level of QSBL over the baseline level (as defined by SBLF, the baseline is the average of QSBL for the last two quarters of 2009 and the first two quarters of 2010), the dividend rate for the initial dividend period, which was from the date of issuance through September 30, 2011, was set at 5%, and the dividend rate for the fourth quarter of 2011 has also been set at 5%.  For the 2nd through 10th calendar quarters, the annual dividend rate may be adjusted to between 1% and 5%, to reflect the amount of change in the banks’ level of QSBL.  For the 11th calendar quarter through 4.5 years after issuance, the dividend rate will be fixed at between 1% and 5%, based upon the increase in QSBL from the baseline level to the level as of the end of the ninth dividend period (i.e., as of September 30, 2013), or will be fixed at 7% if there is no increase or there is a decrease in QSBL during such period. In addition, beginning on April 1, 2014 and ending on April 1, 2016, if there is no increase or there is a decrease in QSBL from the baseline level to the level as of the end of the ninth dividend period (i.e., as of September 30, 2013), because of the Company's participation in the CPP, the Company will be subject to an additional lending incentive fee of 2% per year. After 4.5 years from issuance, the dividend rate will increase to 9%.

The Series F Preferred Stock may be redeemed at any time at the option of the Company, subject to the approval of the Company’s primary federal banking regulator.  All redemptions must be in amounts equal to at least 25% of the number of originally issued shares, or 100% of the then-outstanding shares (if less than 25% of the originally issued shares).

In accordance with SBLF, the Company may pay dividends on all stock assuming Tier 1 capital levels remain at least 90% of the level existing upon the date of issuance, or September 15, 2011.  This threshold is subject to reduction depending on increases in the Company’s QSBL.

The Series F Preferred Stock is nonvoting, other than for consent rights granted to Treasury with respect to (i) any authorization or issuance of shares ranking senior to the Series F Preferred Stock, (ii) any amendment to the rights of the Series F Preferred Stock, (iii) any merger, exchange, dissolution, or similar transaction that would affect the rights of the Series F Preferred Stock and (iv) any sale of all, or any material portion of, the Company’s assets if in conjunction with such sale, the Series F Preferred Stock will not be redeemed in full.

If the Company misses five dividend payments, whether or not consecutive, the holder of the Series F Preferred Stock will have the right, but not the obligation, to appoint a representative as an observer on the Company’s Board of Directors.  If the Company misses six dividend payments, whether or not consecutive, and if the then outstanding aggregate Liquidation Amount of the Series F Preferred Stock is at least $25,000,000, then the holder of the Series F Preferred Stock will have the right to designate two directors to the Board of Directors of the Company.

The Series F Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

31

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

QCR Holdings, Inc. is the parent company of Quad City Bank & Trust, Cedar Rapids Bank & Trust, and Rockford Bank & Trust.

Quad City Bank & Trust and Cedar Rapids Bank & Trust are Iowa-chartered commercial banks, and Rockford Bank & Trust is an Illinois-chartered commercial bank.  All are members of the Federal Reserve System with depository accounts insured to the maximum amount permitted by law by the Federal Deposit Insurance Corporation (“FDIC”).

· Quad City Bank & Trust commenced operations in 1994 and provides full-service commercial and consumer banking, and trust and asset management services, to the Quad City area and adjacent communities through its five offices that are located in Bettendorf and Davenport, Iowa and Moline, Illinois.  Quad City Bank & Trust also provides leasing services through its 80%-owned subsidiary, m2 Lease Funds, located in Brookfield, Wisconsin.  In addition, Quad City Bank & Trust owns 100% of Quad City Investment Advisors, LLC (formerly known as CMG Investment Advisors, LLC), which is an investment management and advisory company.

· Cedar Rapids Bank & Trust commenced operations in 2001 and provides full-service commercial and consumer banking, and trust and asset management services, to Cedar Rapids, Iowa and adjacent communities through its main office located on First Avenue in downtown Cedar Rapids, Iowa and its branch facility located on Council Street in northern Cedar Rapids.  Cedar Rapids Bank & Trust also provides residential real estate mortgage lending services through its 50%-owned joint venture, Cedar Rapids Mortgage Company.

· Rockford Bank & Trust commenced operations in January 2005 and provides full-service commercial and consumer banking, and trust and asset management services, to Rockford, Illinois and adjacent communities through its main office located in downtown Rockford and its branch facility on Guilford Road at Alpine Road in Rockford.

The Company engages in real estate holdings through its 91% equity investment in Velie Plantation Holding Company, LLC, based in Moline, Illinois.

32

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company recognized net income of $2.3 million for the quarter ended September 30, 2011, and net income attributable to QCR Holdings, Inc. of $2.2 million, which excludes the net income attributable to noncontrolling interests of $103 thousand.  After preferred stock dividends and discount accretion of $2.2 million, the Company reported a net loss attributable to common stockholders of $25 thousand, or diluted loss per common share of ($0.01).  The preferred stock dividends included $1.2 million of accelerated accretion of the discount on the repurchased CPP preferred shares from Treasury.  This one-time deemed dividend was the result of the Company’s repurchase of all of the preferred shares issued to Treasury under the CPP in connection with its participation in the SBLF.  For the same period in 2010, the Company recognized net income of $2.1 million and net income attributable to QCR holdings, Inc. of $2.0 million, which excludes the net income attributable to noncontrolling interests of $110 thousand.  After preferred stock dividends and discount accretion of $1.0 million, the Company reported net income attributable to common stockholders of $985 thousand, or diluted earnings per common share of $0.21.

For the nine months ended September 30, 2011, the Company reported net income of $7.3 million, and net income attributable to QCR Holdings, Inc. of $7.0 million, which excludes the net income attributable to noncontrolling interests of $308 thousand.  After preferred stock dividends and discount accretion of $4.3 million, the Company reported net income attributable to common stockholders of $2.7 million, or diluted earnings per common share of $0.56.  As mentioned above, the preferred stock dividends included $1.2 million of accelerated accretion of the discount on the repurchased CPP preferred shares.  For the same period in 2010, the Company recognized net income of $5.1 million and net income attributable to QCR Holdings, Inc. of $5.0 million, which excludes the net income attributable to noncontrolling interests of $95 thousand.  After preferred stock dividends and discount accretion of $3.1 million, the Company reported net income attributable to common stockholders of $1.9 million, or diluted earnings per common share of $0.42.

Following is a table that represents the various net income measurements for the three and nine months ended September 30, 2011 and 2010, respectively.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011		2010
Net income	$	2,266,601		$	2,123,872	$	7,271,299	$	5,138,642
Less:  Net income attributable to noncontrolling interests		103,446			109,786		308,215		95,046
Net income attributable to QCR Holdings, Inc.	$	2,163,155		$	2,014,086	$	6,963,084	$	5,043,596
Less: Preferred stock dividends and discount accretion		2,188,058			1,028,686		4,256,171		3,099,418
Net income (loss) attributable to QCR Holdings, Inc. common stockholders	$	(24,903	)	$	985,400	$	2,706,913	$	1,944,178
Diluted earnings (loss) per common share	$	(0.01	)	$	0.21	$	0.56	$	0.42
Weighted average common and common equivalent shares outstanding		4,866,692		*	4,619,574		4,847,433		4,617,102

*In accordance with U.S. GAAP, the common equivalent shares are not considered in the calculation of diluted earnings per share as the numerator is a net loss.

33

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Following is a table that represents the major income and expense categories.

	Three Months Ended									Nine Months Ended
	September 30, 2011			June 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Net interest income	$	13,828,704		$	13,951,055		$	12,163,575		$	39,988,561		$	37,515,235
Provision for loan/lease losses		(2,456,965	)		(1,672,221	)		(1,434,232	)		(5,196,850	)		(4,413,650	)
Noninterest income		4,335,307			4,173,381			4,358,286			13,565,812			10,727,993
Noninterest expense		(12,773,149	)		(12,555,547	)		(12,133,765	)		(38,340,967	)		(36,790,273	)
Federal and state income tax		(667,296	)		(1,123,454	)		(829,992	)		(2,745,257	)		(1,900,663	)
Net income	$	2,266,601		$	2,773,214		$	2,123,872		$	7,271,299		$	5,138,642

NET INTEREST INCOME

Net interest income, on a tax equivalent basis, increased $1.7 million, or 14%, to $14.0 million for the quarter ended September 30, 2011, from $12.3 million for the third quarter of 2010.  For the third quarter of 2011, average earning assets increased $47.2 million, or 3%, while average interest-bearing liabilities declined $14.6 million, or 1%, when compared with average balances for the third quarter of 2010.  Offsetting this decline and primarily funding the growth in average earnings assets, average noninterest-bearing deposits grew $70.8 million, or 29%, from the third quarter 2010 to the same period of 2011.  A comparison of yields, spread and margin from the third quarter of 2011 to the third quarter of 2010 is as follows (on a tax equivalent basis):

· The average yield on interest-earning assets decreased 16 basis points.

· The average cost of interest-bearing liabilities decreased 49 basis points.

· The net interest spread improved 33 basis points from 2.52% to 2.85%.

· The net interest margin improved 31 basis points from 2.85% to 3.16%.

Net interest income, on a tax equivalent basis, increased $2.5 million, or 7%, to $40.4 million for the nine months ended September 30, 2011, from $37.8 million for the first nine months of 2010.  For the first nine months of 2011, average earning assets increased $49.7 million, or 3%, while average interest-bearing liabilities declined $29.9 million, or 2%, when compared with average balances for the first nine months of 2010.  Offsetting this decline and primarily funding the growth in average earning assets, average noninterest-bearing deposits grew $81.4 million, or 37%, from the first nine months of 2010 to the same period of 2011.  A comparison of yields, spread and margin from the first nine months of 2011 to the first nine months of 2010 is as follows (on a tax equivalent basis):

· The average yield on interest-earning assets decreased 32 basis points.

· The average cost of interest-bearing liabilities decreased 42 basis points.

· The net interest spread improved 10 basis points from 2.62% to 2.72%.

· The net interest margin improved 11 basis points from 2.94% to 3.11%.

34

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s management closely monitors and manages net interest margin.  From a profitability standpoint, an important challenge for the Company’s subsidiary banks and majority-owned leasing company is the improvement of their net interest margins.  Management continually addresses this issue with pricing and other balance sheet management strategies, including, but not limited to, the use of alternative funding sources.

For example, the Company’s largest subsidiary bank, QCBT, executed a balance sheet restructuring during the first quarter of 2011.   Specifically, the bank utilized excess liquidity and prepaid $15.0 million of FHLB advances with a weighted average interest rate of 4.87% and a weighted average maturity of May 2012.  The fees for prepayment totaled $832 thousand.  The Company sold $37.4 million of government sponsored agency securities and recognized pre-tax gains of $880 thousand which more than offset the prepayment fees.  The proceeds from the sales of the government sponsored agency securities were reinvested into government guaranteed residential mortgage-backed securities with reduced risk-weighting for regulatory capital purposes and yields that were comparable to the sold securities.  The resulting impacts were significant and include:

· Significantly reduced interest expense and improved net interest margin in subsequent quarters

· Stronger regulatory capital

· Reduced reliance on wholesale funding

Separately, during the first quarter of 2011, QCBT modified $20.4 million of fixed rate FHLB advances with a weighted average interest rate of 4.33% and a weighted average maturity of October 2013 into new fixed rate advances with a weighted average interest rate of 3.35% and a weighted average maturity of February 2014.  The modification reduces interest expense and improves net interest margin, and minimizes the exposure to rising rates through duration extension of fixed rate liabilities.

The Company’s average balances, interest income/expense, and rates earned/paid on major balance sheet categories, as well as the components of change in net interest income, are presented in the following tables:

35

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	For the three months ended September 30,
	2011								2010
				Interest		Average						Interest		Average
	Average			Earned		Yield or			Average			Earned		Yield or
	Balance			or Paid		Cost			Balance			or Paid		Cost
	(dollars in thousands)
ASSETS
Interest earning assets:
Federal funds sold	$	18,996		$	8		0.17	%	$	60,217		$	39		0.26	%
Interest-bearing deposits at financial institutions		26,124			98		1.50	%		31,504			55		0.70	%
Investment securities (1)		516,617			3,243		2.51	%		416,263			2,931		2.82	%
Restricted investment securities		15,305			126		3.29	%		16,639			116		2.79	%
Gross loans/leases receivable (2) (3) (4)		1,190,313			16,216		5.45	%		1,195,525			16,710		5.59	%
Total interest earning assets	$	1,767,355			19,691		4.46	%	$	1,720,148			19,851		4.62	%
Noninterest-earning assets:
Cash and due from banks	$	46,947							$	34,080
Premises and equipment		30,446								31,754
Less allowance for estimated losses on loans/leases		(19,693	)							(21,400	)
Other		79,293								75,602
Total assets	$	1,904,348							$	1,840,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits	$	498,764			991		0.79	%	$	388,685			1,009		1.04	%
Savings deposits		39,123			15		0.15	%		34,996			24		0.27	%
Time deposits		363,181			1,195		1.32	%		452,607			2,118		1.87	%
Short-term borrowings		145,147			66		0.18	%		141,679			132		0.37	%
Federal Home Loan Bank advances		204,911			1,931		3.77	%		237,760			2,346		3.95	%
Junior subordinated debentures		36,085			242		2.68	%		36,085			495		5.49	%
Other borrowings (4)		140,774			1,301		3.70	%		150,740			1,453		3.86	%
Total interest-bearing liabilities	$	1,427,985			5,741		1.61	%	$	1,442,552			7,577		2.10	%
Noninterest-bearing demand deposits	$	311,044							$	240,254
Other noninterest-bearing liabilities		26,315								23,503
Total liabilities	$	1,765,344							$	1,706,309
Stockholders' equity		139,004								133,875
Total liabilities and stockholders' equity	$	1,904,348							$	1,840,184
Net interest income				$	13,950							$	12,274
Net interest spread							2.85	%							2.52	%
Net interest margin							3.16	%							2.85	%
Ratio of average interest-earning assets to average interest-bearing liabilities		123.77	%							119.24	%

(1)  Interest earned and yields on nontaxable investment securities are determined on a tax equivalent basis using a 34% tax rate for each period presented.

(2)  Loan/lease fees are not material and are included in interest income from loans/leases receivable in accordance with accounting and regulatory guidance.

(3)  Non-accrual loans/leases are included in the average balance for gross loans/leases receivable in accordance with accounting and regulatory guidance.

(4)  In accordance with ASC 860, effective January 1, 2010, the Company accounts for some participations sold, including sales of SBA-guaranteed portions

of loans during the recourse period, as secured borrowings.  As such, these amounts are included in the average balance for gross loans/leases

receivable and other borrowings.  For the three months ended September 30, 2011 and 2010, this totaled $0.5 million and $9.9 million, respectively.  During

the second quarter of 2011, SBA removed the recourse provision for sales which allowed for sale accounting treatment at the time of sale; thus,

the decline in average balance.

36

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

Analysis of Changes of Interest Income/Interest Expense

For the three months ended September 30, 2011

	Inc./(Dec.)			Components
	from			of Change (1)
	Prior Period			Rate			Volume
	2011 vs. 2010
	(dollars in thousands)
INTEREST INCOME
Federal funds sold …………………………………………	$	(31	)	$	(11	)	$	(20	)
Interest-bearing deposits at financial institutions ….…..		43			103			(60	)
Investment securities (2) …………………………………		312			(1,658	)		1,970
Restricted investment securities		10			58			(48	)
Gross loans/leases receivable (3) (4) (5) …………..		(494	)		(422	)		(72	)
Total change in interest income …………………	$	(160	)	$	(1,930	)	$	1,770
INTEREST EXPENSE
Interest-bearing demand deposits ………………………	$	(18	)	$	(1,044	)	$	1,026
Savings deposits ………………………………………….		(9	)		(25	)		16
Time deposits ……………………………………………..		(923	)		(554	)		(369	)
Short-term borrowings ……………………………………		(66	)		(88	)		22
Federal Home Loan Bank advances ……………………		(415	)		(102	)		(313	)
Junior subordinated debentures …………………………		(253	)		(253	)		-
Other borrowings (5)………………………………….		(152	)		(58	)		(94	)
Total change in interest expense ……………….	$	(1,836	)	$	(2,124	)	$	288
Total change in net interest income …………………….	$	1,676		$	194		$	1,482

(1) The column "Inc./(Dec.) from Prior Period" is segmented into the changes attributable to variations in volume and the

      changes attributable to changes in interest rates.  The variations attributable to simultaneous volume and rate changes have been

      proportionately alloctaed to rate and volume.

(2)  Interest earned and yields on nontaxable investment securities are determined on a tax equivalent basis using a 34% tax rate for

       each period presented.

(3)  Loan/lease fees are not material and are included in interest income from loans/leases receivable in accordance with accounting and

       regulatory guidance.

(4)  Non-accrual loans/leases are included in the average balance for gross loans/leases receivable in accordance with accounting and

       regulatory guidance.

(5)  In accordance with ASC 860, effective January 1, 2010, the Company accounts for some participations sold, including sales of

       SBA-guaranteed portions of loans during the recourse period, as secured borrowings.  As such, these amounts are included in the

       average balance for gross loans/leases receivable and other borrowings.  For the three months ended September 30, 2011 and 2010, this

       totaled $0.5 million and $9.9 million, respectively.  During the second quarter of 2011, SBA removed the recourse provision for sales

       which allowed sale accounting treatment at the time of sale; thus, the decline in average balance.

37

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

	For the nine months ended September 30,
	2011								2010
				Interest		Average						Interest		Average
	Average			Earned		Yield or			Average			Earned		Yield or
	Balance			or Paid		Cost			Balance			or Paid		Cost
	(dollars in thousands)
ASSETS
Interest earnings assets:
Federal funds sold ……………………	$	58,959			98		0.22	%	$	58,766			124		0.28	%
Interest-bearing deposits at financial institutions		30,991			312		1.34	%		28,323			347		1.63	%
Investment securities (1) …………….		489,184			9,146		2.49	%		394,736			8,781		2.97	%
Restricted investment securities		15,677			428		3.64	%		16,767			329		2.62	%
Gross loans/leases receivable (2) (3) (4)		1,171,331			48,466		5.52	%		1,217,808			51,324		5.62	%
Total interest earning assets………		1,766,142			58,450		4.41	%	$	1,716,400			60,905		4.73	%
Noninterest-earning assets:
Cash and due from banks…………….	$	43,077							$	32,113
Premises and equipment……………..		30,696								31,650
Less allowance for estimated losses on loans/leases		(19,979	)							(22,151	)
Other…………………………………….		72,884								73,801
Total assets ………………………..	$	1,892,820							$	1,831,813
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits…..	$	492,383			2,967		0.80	%	$	382,255			2,769		0.97	%
Savings deposits ……………………..		38,042			46		0.16	%		38,566			80		0.28	%
Time deposits …………………………		364,712			3,935		1.44	%		482,163			7,092		1.96	%
Short-term borrowings ……………….		140,312			248		0.24	%		137,230			450		0.44	%
Federal Home Loan Bank advances .		213,565			6,053		3.78	%		231,595			6,904		3.97	%
Junior subordinated debentures…….		36,085			975		3.60	%		36,085			1,458		5.39	%
Other borrowings (4)…………….		143,617			3,870		3.59	%		150,737			4,307		3.81	%
Total interest-bearing liabilities…….		1,428,716			18,094		1.69	%	$	1,458,631			23,060		2.11	%
Noninterest-bearing demand deposits		301,828							$	220,390
Other noninterest-bearing liabilities		27,327								22,563
Total liabilities ……………………….		1,757,872							$	1,701,583
Stockholders' equity ………………..		134,948								130,231
Total liabilities and stockholders' equity		1,892,820							$	1,831,813
Net interest income …………………				$	40,356							$	37,845
Net interest spread ...……………….							2.72	%							2.62	%
Net interest margin …………………							3.05	%							2.94	%
Ratio of average interest-earning assets to average interest-bearing liabilities		123.62	%							117.67	%

(1)  Interest earned and yields on nontaxable investment securities are determined on a tax equivalent basis using a 34% tax rate in each year presented.

(2)  Loan/lease fees are not material and are included in interest income from loans/leases receivable in accordance with accounting and regulatory guidance.

(3)  Non-accrual loans/leases are included in the average balance for gross loans/leases receivable in accordance with accounting and regulatory guidance.

(4)  In accordance with ASC 860, effective January 1, 2010, the Company accounts for some participations sold, including sales of SBA-guaranteed

portions of loans during the recourse period, as secured borrowings.  As such, these amounts are included in the average balance for gross loans/leases

receivable and other borrowings.  For the nine months ended September 30, 2011 and 2010, this totaled $3.4 million and $9.6 million, respectively.  During

the second quarter of 2011, SBA removed the recourse provision for sales which allowed sale accounting treatment at the time of sale; thus,

the decline in average balance.

38

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

Analysis of Changes of Interest Income/Interest Expense

For the nine months ended September 30, 2011

	Inc./(Dec.)			Components
	from			of Change (1)
	Prior Period			Rate			Volume
	2011 vs. 2010
	(dollars in thousands)
INTEREST INCOME
Federal funds sold …………………………………………	$	(26	)	$	(27	)	$	1
Interest-bearing deposits at financial institutions ….…..		(35	)		(80	)		45
Investment securities (2) …………………………………		365			(2,095	)		2,460
Restricted investment securities		99			134			(35	)
Gross loans/leases receivable (3) (4) (5)…………..		(2,858	)		(924	)		(1,934	)
Total change in interest income …………………	$	(2,455	)	$	(2,992	)	$	537
INTEREST EXPENSE
Interest-bearing demand deposits ………………………	$	198		$	(711	)	$	909
Savings deposits ………………………………………….		(34	)		(33	)		(1	)
Time deposits ……………………………………………..		(3,157	)		(1,650	)		(1,507	)
Short-term borrowings ……………………………………		(202	)		(218	)		16
Federal Home Loan Bank advances ……………………		(851	)		(329	)		(522	)
Junior subordinated debentures …………………………		(483	)		(483	)		-
Other borrowings (5)…………………………………….		(437	)		(239	)		(198	)
Total change in interest expense ……………….	$	(4,966	)	$	(3,663	)	$	(1,303	)
Total change in net interest income …………………….	$	2,511		$	671		$	1,840

(1)  The column "Inc./(Dec.) from Prior Period" is segmented into the changes attributable to variations in volume and the

      changes attributable to changes in interest rates.  The variations attributable to simultaneous volume and rate changes have been

      proportionately alloctaed to rate and volume.

(2)  Interest earned and yields on nontaxable investment securities are determined on a tax equivalent basis using a 34% tax rate for

       each period presented.

(3)  Loan/lease fees are not material and are included in interest income from loans/leases receivable in accordance with accounting and

       regulatory guidance.

(4)  Non-accrual loans/leases are included in the average balance for gross loans/leases receivable in accordance with accounting and

       regulatory guidance.

(5)  In accordance with ASC 860, effective January 1, 2010, the Company accounts for some participations sold, including sales of

       SBA-guaranteed portions of loans during the recourse period, as secured borrowings.  As such, these amounts are included in the

       average balance for gross loans/leases receivable and other borrowings.  For the nine months ended September 30, 2011 and 2010, this

       totaled $3.4 million and $9.6 million, respectively.  During the second quarter of 2011, SBA removed the recourse provision for sales

       which allowed sale accounting treatment at the time of sale; thus, the decline in average balance.

39

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

CRITICAL ACCOUNTING POLICIES

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.  The financial information contained within these statements is, to a significant extent, financial information that is based on approximate measures of the financial effects of transactions and events that have already occurred.

Based on its consideration of accounting policies that involve the most complex and subjective decisions and assessments, management has identified its most critical accounting policy to be that related to the allowance for estimated losses on loans/leases.  The Company’s allowance for estimated losses on loans/leases methodology incorporates a variety of risk considerations, both quantitative and qualitative, in establishing an allowance for estimated losses on loans/leases that management believes is appropriate at each reporting date.  Quantitative factors include the Company’s historical loss experience, delinquency and charge-off trends, collateral values, changes in nonperforming loans/leases, and other factors.  Quantitative factors also incorporate known information about individual loans/leases, including borrowers’ sensitivity to interest rate movements.  Qualitative factors include the general economic environment in the Company’s markets, including economic conditions throughout the Midwest, and in particular, the state of certain industries.  Size and complexity of individual credits in relation to loan/lease structure, existing loan/lease policies and pace of portfolio growth are other qualitative factors that are considered in the methodology.  Management may report a materially different amount for the provision for loan/lease losses in the statement of operations to change the allowance for estimated losses on loans/leases if its assessment of the above factors were different.  This discussion and analysis should be read in conjunction with the Company’s financial statements and the accompanying notes presented elsewhere herein, as well as the portion in the section entitled “Financial Condition” of this Management’s Discussion and Analysis that discusses the allowance for estimated losses on loans/leases.  Although management believes the level of the allowance as of September 30, 2011 is adequate to absorb losses inherent in the loan/lease portfolio, a decline in local economic conditions, or other factors, could result in increasing losses that cannot be reasonably predicted at this time.

The Company’s assessment of other-than-temporary impairment of its available-for-sale securities portfolio is another critical accounting policy as a result of the level of judgment required by management.  Available-for-sale securities are evaluated to determine whether declines in fair value below their cost are other-than-temporary.  In estimating other-than-temporary impairment losses, management considers a number of factors including, but not limited to, (1) the length of time and extent to which the fair value has been less than amortized cost, (2) the financial condition and near-term prospects of the issuer, (3) the current market conditions, and (4) the intent of the Company to not sell the security prior to recovery and whether it is not more-likely-than-not that the Company will be required to sell the security prior to recovery.  The discussion regarding the Company’s assessment of other-than-temporary impairment should be read in conjunction with the Company’s financial statements and the accompanying notes presented elsewhere herein.
 

40

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

RESULTS OF OPERATIONS

INTEREST INCOME

Interest income experienced a decline of $171 thousand, or 1%, from $19.7 million for the third quarter of 2010 to $19.6 million for the third quarter of 2011, primarily as a result of the continued shift in interest-earning asset mix and the extended historical low interest rate environment.  The Company’s average interest-earning assets increased $47.2 million, or 3%, from the third quarter of 2010 to the third quarter of 2011.  Most notably, the Company grew its securities portfolio as the average balance of investment securities increased $100.4 million, or 24%.  Partially offsetting this growth, the average balance of federal funds sold decreased $41.2 million, or 68%.  The average balance of loan/leases declined slightly.  This continued shift in interest-earning asset mix is the result of weak loan/lease demand and the Company’s strategy to invest some of its excess liquidity in government sponsored agency securities and government guaranteed residential mortgage-backed securities.

For the nine months ended September 30, 2011, the Company recognized $58.1 million of interest income compared to $60.6 million of interest income for the same period in 2010.  As mentioned above, the Company’s continued shift in interest-earning asset mix and the extended historical low interest rate environment has led to the decline in interest income.

INTEREST EXPENSE

Interest expense declined $1.8 million, or 24%, from $7.6 million for the third quarter of 2010 to $5.7 million for the third quarter of 2011.  The Company’s average balance of interest-bearing liabilities declined $14.6 million, or 1%, from the third quarter of 2010 to the same quarter of 2011.  Also contributing to the decline in interest expense, the Company has been successful in shifting the mix of funding from wholesale borrowings and brokered time deposits to core deposits.  The aforementioned balance sheet restructuring at QCBT is a major contributor to the shift in mix and the decline in interest expense.  Lastly, management continues to focus on driving down deposit pricing.

For the nine months ended September 30, 2011, the Company reported interest expense of $18.1 million which is a reduction of $5.0 million, or 22%, from $23.1 million for the same period in 2010.  As mentioned above, the continued shift in mix and the sustained focus on managing down deposit pricing has led to this significant decline in interest expense.

41

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

PROVISION FOR LOAN/LEASE LOSSES

The provision for loan/lease losses is established based on a number of factors, including the Company’s historical loss experience, delinquencies and charge-off trends, the local and national economy and risk associated with the loans/leases in the portfolio as described in more detail in the “Critical Accounting Policies” section.

The Company’s provision for loan/lease losses totaled $2.5 million for the third quarter of 2011, an increase of $785 thousand over the prior quarter, and an increase of $1.0 million from the third quarter of 2010.  The increases were primarily the result of a specific provision related to one new nonperforming commercial real estate loan that deteriorated during the current quarter.  Net loan/lease growth of $13.7 million, or 1%, for the current quarter also contributed to the increased provision.

For the nine months ended September 30, 2011, provision for loan/lease losses totaled $5.2 million which is an increase of $783 thousand, or 18%, from $4.4 million for the same period in 2010. Similar to above, the increase is primarily the result of a specific provision related to a single nonperforming credit that deteriorated during the current quarter.

With net charge-offs totaling $2.7 million mostly offset by provision for loan/lease losses of $2.5 million, the Company’s allowance for estimated losses on loan/lease losses to total loans/leases declined to 1.63% at September 30, 2011 from 1.67% at June 30, 2011, and from 1.74% at December 31, 2010.  A more detailed discussion of the Company’s allowance for estimated losses on loans/leases can be found in the “Financial Condition” section of this report.

42

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

NONINTEREST INCOME

The following tables set forth the various categories of noninterest income for the three and nine months ended September 30, 2011 and 2010.

	Three Months Ended
		September 30, 2011			September 30, 2010			$ Change			% Change
Trust department fees		$	762,133		$	803,423		$	(41,290	)		(5.1	) %
Investment advisory and management fees, gross			549,515			419,416			130,099			31.0
Deposit service fees			893,685			902,787			(9,102	)		(1.0	)
Gains on sales of loans, net			408,364			1,109,724			(701,360	)		(63.2	)
Securities gains			443,614			-			443,614			100.0
Gains (losses) on sales of other real estate owned, net			42,262			(188,158	)		230,420			(122.5	)
Earnings on bank-owned life insurance			331,440			353,003			(21,563	)		(6.1	)
Credit card fees, net of processing costs			178,636			34,866			143,770			412.4
Other			725,658			923,225			(197,567	)		(21.4	)
		$	4,335,307		$	4,358,286		$	(22,979	)		(0.5	) %
	Nine Months Ended
		September 30, 2011			September 30, 2010			$ Change			% Change
Trust department fees		$	2,607,668		$	2,438,473		$	169,195			6.9	%
Investment advisory and management fees, gross			1,630,976			1,325,910			305,066			23.0
Deposit service fees			2,623,018			2,585,873			37,145			1.4
Gains on sales of loans, net			1,923,185			1,831,856			91,329			5.0
Securities gains			1,472,528			-			1,472,528			100.0
Losses on sales of other real estate owned, net			(90,492	)		(632,806	)		542,314			(85.7	)
Earnings on bank-owned life insurance			1,032,493			973,659			58,834			6.0
Credit card fees, net of processing costs			397,132			231,439			165,693			71.6
Other			1,969,304			1,973,589			(4,285	)		(0.2	)
		$	13,565,812		$	10,727,993		$	2,837,819			26.5	%

Trust department fees continue to be a significant contributor to noninterest income.  This fee income decreased $41 thousand, or 5%, from the third quarter of 2010 to the third quarter of 2011, but increased $169 thousand, or 7%, from the first nine months of 2010 to the same period in 2011.  The majority of the trust department fees are determined based on the value of the investments within the managed trusts.  As markets have experienced volatility with the national economy’s recovery from recession, the Company’s fee income has experienced similar volatility and fluctuation.

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Over the past year, the Company has placed a stronger emphasis on growing its investment advisory and management services.  Fee income for investment advisory and management services increased $130 thousand, or 31%, for the third quarter of 2011 compared to the same quarter of 2010, and increased $305 thousand, or 23%, for the first nine months of 2011 compared to the same period in 2010.  Similar to trust department fees, these fees are partially determined based on the value of the investments managed.  The increases are largely the result of growth in assets under advisory and management.

Although deposit service fees were down slightly comparing the third quarter of 2011 to the same quarter of 2010, the Company grew deposit fees $37 thousand, or 1%, from the first nine months of 2010 to the first nine months of 2011.  In general, deposit services fees have increased steadily over the past several years.  The Company continues to place an emphasis on shifting the mix of deposits from brokered and retail time deposits to non-maturity demand deposits.  With this shift in mix, the Company has increased the number of demand deposit accounts which tend to be lower in interest cost and higher in service fees.

Gains on sales of loans, net, declined $701 thousand, or 63%, from the third quarter of 2010 to the third quarter of 2011, while gains on sales of loans, net increased $91 thousand, or 5%, from the first nine months of 2010 to the first nine months of 2011.  This consists of sales of residential mortgages and the government guaranteed portions of small business loans.  Regarding sales of residential mortgages, the Company experienced a decline in sales activity quarter-over-quarter and year-over-year.  This is consistent across the industry as the fluctuation in interest rates have slowed residential mortgage refinancing transactions and a sluggish housing market continues to keep new loan origination and sales activity at low levels.  The Company continues to focus on small business lending by taking advantage of programs offered by the Small Business Administration (SBA) and United States Department of Agriculture (USDA).  In some cases, it is more beneficial for the Company to sell the government guaranteed portion at a premium.  The Company recognized gains on sales of the government guaranteed portions of SBA and USDA loans totaling $1.4 million for the first nine months of 2011 compared to $979 thousand of gains recognized for the first nine months of 2010.  Part of the year-over-year increase is a result of the timing on implementing this strategy.  The Company introduced selling of government guaranteed loans in the first half of 2010 and, at that time, SBA and USDA required execution with a 90-day recourse period which prompted required accounting treatment of deferring any gains until expiration of the recourse period.  Effective in the second quarter of 2011, SBA and USDA removed the recourse provisions for future sales which allows for sale accounting treatment at the time of sale.  As a result, the Company was able to recognize gains at the time of sale for all of the sales in the second and third quarters of 2011.

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During the third quarter of 2011, as a result of favorable market conditions, QCBT sold $8.6 million of government agency securities for a pre-tax gain totaling $444 thousand.  The related sales proceeds were reinvested into residential mortgage-backed securities with higher yields and similar credit risk to the sold securities.  During the second quarter of 2011, as a result of favorable market conditions, RB&T sold $8.3 million of government agency securities for a pre-tax gain totaling $149 thousand.  Additionally, the sales proceeds were utilized to diversify RB&T’s securities portfolio and fund loan growth.  Separately, during the first quarter of 2011, in an effort to offset the $832 thousand of fees for prepaying $15.0 million of FHLB advances, QCBT sold $37.4 million of government agency securities for a pre-tax gain totaling $880 thousand.  See detailed discussion of this restructuring transaction in the Net Interest Income section earlier in Management’s Discussion and Analysis.

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NONINTEREST EXPENSE

The following table sets forth the various categories of noninterest expense for the three and nine months ended September 30, 2011 and 2010.

	Three Months Ended
		September 30, 2011		September 30, 2010		$ Change			% Change
Salaries and employee benefits		$	7,651,695	$	6,910,016	$	741,679			10.7	%
Occupancy and equipment expense			1,359,758		1,410,429		(50,671	)		(3.6	)
Professional and data processing fees			1,077,435		1,096,100		(18,665	)		(1.7	)
FDIC and other insurance			578,776		887,509		(308,733	)		(34.8	)
Loan/lease expense			839,993		678,535		161,458			23.8
Advertising and marketing			277,376		292,148		(14,772	)		(5.1	)
Postage and telephone			242,103		252,512		(10,409	)		(4.1	)
Stationery and supplies			122,582		135,064		(12,482	)		(9.2	)
Bank service charges			186,351		112,742		73,609			65.3
Other-than-temporary impairment losses on securities			-		113,800		(113,800	)		100.0
Other			437,080		244,910		192,170			78.5
		$	12,773,149	$	12,133,765	$	639,384			5.3	%
	Nine Months Ended
		September 30, 2011		September 30, 2010		$ Change			% Change
Salaries and employee benefits		$	22,480,731	$	20,869,335	$	1,611,396			7.7	%
Occupancy and equipment expense			4,017,506		4,147,101		(129,595	)		(3.1	)
Professional and data processing fees			3,338,935		3,379,080		(40,145	)		(1.2	)
FDIC and other insurance			2,149,093		2,575,000		(425,907	)		(16.5	)
Loan/lease expense			1,772,290		1,658,647		113,643			6.9
Advertising and marketing			836,459		701,603		134,856			19.2
Postage and telephone			703,803		750,611		(46,808	)		(6.2	)
Stationery and supplies			380,754		379,347		1,407			0.4
Bank service charges			525,007		284,134		240,873			84.8
Prepayment fees on Federal Home Loan Bank advances			832,099		-		832,099			100.0
Losses on lease residual values			-		617,000		(617,000	)		(100.0	)
Other-than-temporary impairment losses on securities			118,847		113,800		5,047			4.4
Other			1,185,443		1,314,615		(129,172	)		(9.8	)
		$	38,340,967	$	36,790,273	$	1,550,694			4.2	%

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Salaries and employee benefits, which is the largest component of noninterest expense, increased $742 thousand, or 11%, from the third quarter of 2010 to the same quarter of 2011, and increased $1.6 million, or 8%, from the first nine months of 2010 to the first nine months of 2011.  These increases are largely the result of:

· Customary annual salary and benefits increases for the majority of the Company’s employee base in 2011.  For 2010, the Company did not generally increase salaries across the employee base.

· Continued increase in health insurance-related employee benefits for the majority of the Company’s employee base.

· Higher accrued incentive compensation based on improved performance through the first nine months of 2011.

· Increase in the Company’s employee base as full-time equivalents increased from 345 at September 30, 2010 to 358 at September 30, 2011.

FDIC and other insurance expense decreased 35% from the third quarter of 2010 to the third quarter of 2011, and decreased 17% from the first nine months of 2010 to the first nine months of 2011.  FDIC insurance premiums are calculated using a variety of factors, including, but not limited to, balance sheet levels, funding mix, and regulatory compliance.  The subsidiary banks have been successful in managing these factors and driving down FDIC insurance cost.  In addition, the FDIC modified the calculation for premiums effective during the second quarter of 2011.  The modification was favorable for the Company’s subsidiary banks.

Loan/lease expense increased $161 thousand, or 24%, from the third quarter of 2010 to the third quarter of 2011; and, loan/lease expense increased $114 thousand, or 7%, from the first nine months of 2010 to the same period in 2011.  Generally, loan/lease expense has a direct relationship with the level of nonperforming loans/leases; however, it may deviate as it depends upon the individual nonperforming loans/leases.  Over the past few years, the Company has experienced elevated levels of loan/lease expense.

The Company incurred additional expenses for advertising and marketing over the first nine months of 2011.   Specifically, the subsidiary banks and the leasing company are pursuing opportunities to reach new customers in their respective markets as a result of the continued uncertainty with some of their competition.

Bank service charges, which include costs incurred to provide services to QCBT’s correspondent banking customer portfolio, have increased over the first nine months of 2011.  The increase is due, in large part, to the success QCBT has had in growing its correspondent banking customer portfolio over the past year.

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In an effort to utilize some of its excess liquidity and improve net interest margin by eliminating some of its higher cost wholesale funding, QCBT prepaid $15.0 million of FHLB advances during the first quarter of 2011.  As a result, QCBT incurred a prepayment fee totaling $832 thousand.  To offset these fees, QCBT sold $37.4 million of government sponsored agency securities for a pre-tax gain totaling $880 thousand.  See detailed discussion of this restructuring transaction in the Net Interest Income section earlier in Management’s Discussion and Analysis.

During the first quarter of 2010, the Company recognized losses in residual values for two direct financing equipment leases.  The sharp declines in value were isolated and attributable to changes in unique market conditions during the quarter related to the specific equipment.  Specifically, one of the affected leases related to auto-industry equipment.  During the first quarter of 2010, several like equipment dealers declared bankruptcy which led to disruption in the specific market.  As a result, pricing for new like equipment declined sharply.  Similarly, for the other affected lease, the underlying equipment was a commercial printer.  The commercial printing industry has experienced some challenges and pricing for this particular equipment experienced sharp declines during the first quarter of 2010.  In both cases, management determined the amount of the loss by comparing the recorded estimated residual value of the affected leases to the estimated value at the end of the lease term, as adjusted for the declined pricing for new like equipment.  And, in both cases, the equipment was sold in the second quarter of 2010 without any further losses realized.  For the three and nine months ended September 30, 2011, there were no losses on residual values.  Management continues to perform periodic and specific reviews of its residual values, and has identified modest residual risk remaining in the lease portfolio.

During the second quarter of 2011, the Company’s evaluation of its securities portfolio for other-than-temporary impairment determined that two privately held equity securities experienced declines in fair value that were other-than-temporary.  As a result, the Company wrote down the value of these securities and recognized losses in the amount of $119 thousand.  For 2010, the Company identified a single issue trust preferred security that experienced a decline in fair value determined to be other-than-temporary.  As a result, the Company wrote down the value of this security and recognized a loss totaling $114 thousand.  The Company does not own any other trust preferred securities.

INCOME TAXES

The provision for income taxes totaled $667 thousand, or an effective tax rate of 23%, for the third quarter of 2011 compared to $830 thousand, or an effective tax rate of 28%, for the same quarter in 2010.The Company’s provision for income taxes and effective tax rate declined due to the acquisition and application of tax credits during the third quarter of 2011.

The provision for income taxes totaled $2.7 million, or an effective tax rate of 27%, for the first nine months of 2011 compared to $1.9 million, or an effective tax rate of 27%, for the same period in 2010.

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FINANCIAL CONDITION

During the first nine months of 2011, the Company’s total assets increased 3% from $1.84 billion at December 31, 2010 to $1.90 billion at September 30, 2011.   The Company grew its securities portfolio $101.1 million, or 24%, over the first nine months of 2011.  Additionally, the Company experienced net growth of loan/leases in the amount of $25.8 million, or 2%, over the first nine months of 2011.  The growth was partially offset by a decline in federal funds sold and interest-bearing deposits at financial institutions as the Company invested some of its excess liquidity.  The net increase in assets during the first nine months of 2011 was funded by strong and continued growth of the Company’s deposit portfolio as balances grew $92.7 million, or 8%.  Partially offsetting the deposit growth, the Company reduced its reliance on borrowings by $41.5 million, or 7%, over the first nine months of 2011.

The composition of the Company’s securities portfolio is managed to meet liquidity needs while prioritizing the impact on asset-liability position and maximizing return.  With the strong growth in deposits and the continued weak loan demand, the Company has carried excess liquidity on the balance sheet over the past year.  During the first nine months of 2011, the Company invested a portion of its excess liquidity in government guaranteed residential mortgage-backed securities and additional government sponsored agency securities.  The former is a shift in mix for the Company’s securities portfolio in an effort to diversify and adapt to the changing balance sheet.  As a result, the Company grew its securities portfolio $101.1 million, or 24%, during the first nine months of 2011.  The Company has not invested in commercial mortgage-backed securities or pooled trust preferred securities.

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The following tables summarize the amortized cost and fair value of investment securities as of September 30, 2011 and December 31, 2010.

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2011:	(dollars in thousands)
Securities held to maturity, other bonds	$	200	$	-	$	-		$	200
Securities available for sale:
U.S. govt. sponsored agency securities	$	412,874	$	2,281	$	(371	)	$	414,784
Residential mortgage-backed securities		80,070		3,383		-			83,453
Municipal securities		24,580		1,411		-			25,991
Trust preferred securities		86		-		(14	)		72
Other securities		1,347		106		(41	)		1,412
	$	518,957	$	7,181	$	(426	)	$	525,712
December 31, 2010:
Securities held to maturity, other bonds	$	300	$	-	$	-		$	300
Securities available for sale:
U.S. govt. sponsored agency securities	$	401,711	$	3,219	$	(2,705	)	$	402,225
Residential mortgage-backed securities		65		5		-			70
Municipal securities		20,135		579		(110	)		20,604
Trust preferred securities		86		-		(8	)		78
Other securities		1,415		168		(13	)		1,570
	$	423,412	$	3,971	$	(2,836	)	$	424,547

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The following tables present the maturities of securities held as of September 30, 2011 and the weighted average stated coupon rates by major type and range of maturity.  Note the yields below are calculated on a tax equivalent basis.

			Weighted
	Amortized		Average
	Cost		Yield
	(dollars in thousands)
U.S. gov't. sponsored agency securities:
Within 1 year	$	1,008		3.25	%
After 1 but within 5 years		62,079		1.60	%
After 5 but within 10 years		259,623		2.82	%
After 10 years		90,164		3.48	%
	$	412,874		2.78	%
Residential mortgage-backed securities:
After 1 but within 5 years	$	38		6.00	%
After 10 years		80,032		4.13	%
	$	80,070		4.13	%
Municipal securities:
Within 1 year	$	1,795		3.05	%
After 1 but within 5 years		6,038		3.54	%
After 5 but within 10 years		11,136		3.94	%
After 10 years		5,611		4.64	%
	$	24,580		3.94	%
Trust preferred securities:
After 10 years	$	86		7.80	%
Other bonds:
Within 1 year	$	50		6.55	%
After 1 but within 5 years		100		5.50	%
After 5 but within 10 years		50		5.43	%
	$	200		5.75	%
Other securities with no maturity or stated face rate	$	1,347

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The following tables present the maturities of securities held as of December 31, 2010 and the weighted average stated coupon rates by major type and range of maturity.  Note the yields below are calculated on a tax equivalent basis.

			Weighted
	Amortized		Average
	Cost		Yield
	(dollars in thousands)
U.S. gov't. sponsored agency securities:
Within 1 year	$	12,104		3.48	%
After 1 but within 5 years		74,278		2.27	%
After 5 but within 10 years		207,759		2.92	%
After 10 years		107,570		4.39	%
	$	401,711		3.21	%
Residential mortgage-backed securities:
After 1 but within 5 years	$	65		6.00	%
Municipal securities:
Within 1 year	$	1,157		4.50	%
After 1 but within 5 years		5,337		4.60	%
After 5 but within 10 years		5,999		3.86	%
After 10 years		7,642		4.60	%
	$	20,135		4.37	%
Trust preferred securities:
After 10 years	$	86		7.80	%
Other bonds:
Within 1 year	$	100		5.30	%
After 1 but within 5 years		150		5.85	%
After 5 but within 10 years		50		5.43	%
	$	300		5.60	%
Other securities with no maturity or stated face rate	$	1,415

See Note 2 for additional information regarding the Company’s securities portfolio.

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Gross loans/leases receivable experienced net growth of $25.0 million, or 2%, during the first nine months of 2011.  Additionally, for the third quarter of 2011, the Company grew gross loans/leases $13.7 million, or 1%, over the second quarter of 2011.  This marked consecutive quarters of net growth as the Company grew loans/leases $28.1 million, or 2%, in the second quarter of 2011, as compared to the first quarter of 2011.  Prior to the second quarter of 2011, the Company had not had a quarter-over-quarter increase in gross loans/leases since the fourth quarter of 2009.  Specifically, the Company originated $310.0 million of new loans/leases to new and existing customers during the first nine months of 2011, including $92.7 million for the third quarter of 2011.

The mix of the loan/lease types within the Company’s loan/lease portfolio is presented in the table along with a rollforward of activity for the nine months ended September 30, 2011.

	Quad City				m2		Cedar Rapids			Rockford			Intercompany			Consolidated
	Bank & Trust			Lease Funds			Bank & Trust			Bank & Trust			Elimination			Total
BALANCE AS OF DECEMBER 31, 2010:	(dollars in thousands)
Commercial and industrial loans	$	194,316		$	-		$	117,236		$	54,073		$	-		$	365,625
Commercial real estate loans		239,338			-			197,774			118,763			(2,158	)		553,717
Direct financing leases		-			83,010			-			-			-			83,010
Residential real estate loans		34,820			-			32,155			15,222			-			82,197
Installment and other consumer loans		49,664			-			21,243			15,333			-			86,240
		518,138			83,010			368,408			203,391			(2,158	)		1,170,789
Plus deferred loan/lease origination costs, net of fees		30			2,342			(628	)		6			-			1,750
Gross loans/leases receivable	$	518,168		$	85,352		$	367,780		$	203,397		$	(2,158	)	$	1,172,539
ORIGINATION OF NEW LOANS/LEASES:
Commercial and industrial loans		40,419			-			50,804			16,049			-			107,272
Commercial real estate loans		55,849			-			18,400			10,526			-			84,775
Direct financing leases		-			34,031			-			-			-			34,031
Residential real estate loans		36,541			-			25,342			11,506			-			73,389
Installment and other consumer loans		8,088			-			1,371			1,027			-			10,486
	$	140,898		$	34,031		$	95,916		$	39,108		$	-		$	309,953
PAYMENTS/MATURITIES/SALES/CHARGE-OFFS, NET OF ADVANCES OR RENEWALS ON EXISTING LOANS/LEASES:
Commercial and industrial loans		(53,275	)		-			(41,917	)		(13,707	)		-			(108,899	)
Commercial real estate loans		(42,683	)		-			(31,428	)		3,998			107			(70,005	)
Direct financing leases		-			(28,148	)		-			-			-			(28,148	)
Residential real estate loans		(30,215	)		-			(28,888	)		(2,409	)		-			(61,513	)
Installment and other consumer loans		(9,505	)		-			(3,147	)		(4,181	)		-			(16,833	)
	$	(135,679	)	$	(28,148	)	$	(105,379	)	$	(16,299	)	$	107		$	(285,398	)
BALANCE AS OF SEPTEMBER 30, 2011:
Commercial and industrial loans		181,459			-			126,123			56,415			-			363,997
Commercial real estate loans		252,504			-			184,746			133,287			(2,050	)		568,487
Direct financing leases		-			88,893			-			-			-			88,893
Residential real estate loans		41,146			-			28,609			24,319			-			94,073
Installment and other consumer loans		48,247			-			19,467			12,179			-			79,893
		523,357			88,893			358,945			226,199			(2,050	)		1,195,344
Plus deferred loan/lease origination costs, net of fees		44			2,800			(626	)		20			-			2,238
Gross loans/leases receivable	$	523,401		$	91,693		$	358,318		$	226,220		$	(2,050	)	$	1,197,582

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As commercial real estate loans are the largest loan type, management places a strong emphasis on monitoring the composition of the Company’s commercial real estate loan portfolio.  Management tracks the level of owner-occupied commercial real estate loans versus non owner-occupied loans.  Owner-occupied loans are generally considered to have less risk.  As of September 30, 2011 and December 31, 2010, approximately 28% and 26% of the commercial real estate loan portfolio was owner-occupied.

Following is a listing of significant industries within the Company’s commercial real estate loan portfolio as of September 30, 2011 and December 31, 2010:

	As of September 30,					As of December 31,
	2011					2010
	Amount		%			Amount		%
	(dollars in thousands)
Lessors of Nonresidential Buildings	$	162,022		29	%	$	154,427		28	%
Lessors of Residential Buildings		53,541		9	%		52,582		9	%
Land Subdivision		33,931		6	%		30,572		6	%
Hotels		20,726		4	%		16,081		3	%
New Car Dealers		16,148		3	%		6,521		1	%
Lessors of Other Real Estate Property		15,722		3	%		19,688		4	%
New Single Family Construction		12,523		2	%		16,053		3	%
Other *		253,874		44	%		257,793		46	%
Total Commercial Real Estate Loans	$	568,487		100	%	$	553,717		100	%

*   “Other” consists of all other industries.  None of these had concentrations greater than $15 million, or 2.6% of total commercial real estate loans.

During the first nine months of 2011, the Company originated and held a limited amount of 15-year fixed rate residential real estate loans that met certain credit guidelines.  Specifically, the Company grew residential real estate loans by $11.9 million, or 14%, thus far in 2011.  The remaining residential real estate loans originated by the Company were sold on the secondary market to avoid the interest rate risk associated with longer term fixed rate loans.  Loans originated for this purpose were classified as held for sale and are included in the residential real estate loans above.  In addition, the Company has not originated any subprime, Alt-A, no documentation, or stated income residential real estate loans throughout its history.

See Note 3 for additional information regarding the Company’s loan/lease portfolio.

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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

Changes in the allowance for estimated losses on loans/leases for the three and nine months ended September 30, 2011 and 2010 are presented as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Balance, beginning	$	19,802,632		$	21,560,963		$	20,364,656		$	22,504,734
Provisions charged to expense		2,456,965			1,434,232			5,196,850			4,413,650
Loans/leases charged off		(3,103,767	)		(3,579,193	)		(6,676,399	)		(7,842,807	)
Recoveries on loans/leases previously charged off		422,656			466,824			693,379			807,249
Balance, ending	$	19,578,486		$	19,882,826		$	19,578,486		$	19,882,826

The allowance for estimated losses on loans/leases was $19.6 million at September 30, 2011 compared to $20.4 million at December 31, 2010 and $19.9 million at September 30, 2010.  The allowance for estimated losses on loans/leases was determined based on factors that included the overall composition of the loan/lease portfolio, types of loans/leases, past loss experience, loan/lease delinquencies, potential substandard and doubtful credits, economic conditions, collateral positions, governmental guarantees and other factors that, in management’s judgment, deserved evaluation. To ensure that an adequate allowance was maintained, provisions were made based on a number of factors, including the increase/decrease in loans/leases and a detailed analysis of the loan/lease portfolio.  The loan/lease portfolio was reviewed and analyzed monthly with specific detailed reviews completed on all loans risk-rated worse than “fair quality” and carrying aggregate exposure in excess of $100 thousand.  The adequacy of the allowance for estimated losses on loans/leases was monitored by the loan review staff and reported to management and the board of directors.  The Company’s allowance for estimated losses on loans/leases to gross loans/leases was 1.63% at September 30, 2011 which is a decrease from 1.74% at December 31, 2010, and from 1.67% at September 30, 2010.  The Company’s nonperforming loans/leases grew $4.8 million, or 18%, during the third quarter 2011.  Previously, the Company experienced a declining trend in nonperforming loans/leases.  Despite the net increase in the current quarter, the Company’s nonperforming loans/leases are down $15.2 million, or 32%, from the peak position at September 30, 2010.  This general decline has outpaced the decrease in the allowance for loan/lease losses over the first nine months of 2011 and strengthened the Company’s allowance to nonperforming loans/leases from 49% at December 31, 2010 to 61% at September 30, 2011.

Although management believes that the allowance for estimated losses on loans/leases at September 30, 2011 was at a level adequate to absorb losses on existing loans/leases, there can be no assurance that such losses will not exceed the estimated amounts or that the Company will not be required to make additional provisions for loan/lease losses in the future.  Unpredictable future events could adversely affect cash flows for both commercial and individual borrowers, which could cause the Company to experience increases in problem assets, delinquencies and losses on loans/leases, and require further increases in the provision.  Asset quality is a priority for the Company and its subsidiaries.  The ability to grow profitably is in part dependent upon the ability to maintain that quality.  The Company continually focuses efforts at its subsidiary banks and leasing company with the intention to improve the overall quality of the Company’s loan/lease portfolio.

See Note 3 for additional information regarding the Company’s allowance for estimated losses on loans/leases.

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The table below presents the amounts of nonperforming assets.

	As of September 30,			As of June 30,			As of December 31,			As of September 30,
	2011			2011			2010			2010
	(dollars in thousands)
Nonaccrual loans/leases (1) (2)	$	29,006		$	23,295		$	37,427		$	42,185
Accruing loans/leases past due 90 days or more		333			358			320			3,610
Troubled debt restructures - accruing		2,675			3,592			3,405			1,510
Other real estate owned		8,288			10,430			8,535			11,976
Other repossessed assets		160			194			366			89
	$	40,462		$	37,869		$	50,053		$	59,370
Nonperforming loans/leases to total loans/leases		2.67	%		2.30	%		3.51	%		3.98	%
Nonperforming assets to total loans/leases plus reposessed property		3.35	%		3.17	%		4.24	%		4.94	%
Nonperforming assets to total assets		2.13	%		2.02	%		2.73	%		3.29	%
Texas ratio (3)		25.58	%		24.77	%		33.57	%		39.43	%

 

(1) Includes government guaranteed portion of loan.

(2) Includes troubled debt restructuringss of $8.6 million at September 30, 2011, $11.0 million at June 30, 2011, $12.6 million at December 31, 2010, and $2.8 million at September 30, 2010.

(3) Texas Ratio = Nonperforming Assets (excluding Other Repossessed Assets) / Tangible Equity plus Allowance for Estimated Losses on Loans/Leases.  Texas Ratio is a non-GAAP financial measure.  Management included this ratio as this is considered to be a critical metric with which to analyze and evaluate asset quality.  Other companies may calculate this ratio differently.

The large majority of the nonperforming assets consist of nonaccrual loans/leases and other real estate owned.  For nonaccrual loans/leases, management has thoroughly reviewed these loans/leases and has provided specific allowances as appropriate.  Other real estate owned is carried at the fair value less costs to sell.

Nonperforming assets at September 30, 2011 were $40.5 million which is an increase of $2.6 million, or 7%, from June 30, 2011.  Thus far in 2011, the Company’s nonperforming assets are down $9.6 million, or 25%, from December 31, 2010.  Further, nonperforming assets have declined $18.9 million, or 32%, from its peak position of $59.4 million at September 30, 2010.  A combination of improved performance and charge-offs contributed to the general decrease throughout 2011, while deterioration of a single commercial real estate credit during the third quarter of 2011 contributed to the current quarter increase.

Bank-owned life insurance increased $8.0 million, or 24%, during the first nine months of 2011 as the Company purchased additional insurance.  The Company has earned approximate yields (unadjusted for tax effect) on bank-owned life insurance of 3.67% and 4.13% for the nine months ended September 30, 2011 and 2010, respectively.

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Deposits grew $92.7 million, or 8%, during the first nine months of 2011, and deposits grew $120.7 million, or 11%, from September 30, 2010 to September 30, 2011.  The table below presents the composition of the Company’s deposit portfolio.

	As of September 30, 2011		As of December 31, 2010		As of September 30, 2010
	(dollars in thousands)
Noninterest bearing demand deposits	$	326,710	$	276,827	$	237,965
Interest bearing demand deposits		490,656		424,819		379,083
Savings deposits		37,896		35,805		34,131
Time deposits		304,674		312,010		354,104
Brokered time deposits		47,533		65,355		81,450
	$	1,207,469	$	1,114,816	$	1,086,733

The Company has been successful in shifting the deposit mix over the past year with an increase in noninterest bearing deposits and declines in brokered and retail time deposits.  Specifically, QCBT continues to have success growing its correspondent banking business as noninterest bearing correspondent deposits grew $64.9 million, or 80%, to $145.7 million during the first nine months of 2011.  These increases and the Company’s overall strong liquidity position have allowed the Company to reduce the level of brokered and other time deposits which has helped drive down the Company’s average cost of deposits.

Short-term borrowings increased $2.4 million, or 2%, during the first nine months of 2011.  The subsidiary banks offer short-term repurchase agreements to some of their significant customers.  Also, the subsidiary banks purchase federal funds for short-term funding needs from the Federal Reserve Bank or from their correspondent banks.  The table below presents the composition of the Company’s short-term borrowings.

	As of September 30, 2011		As of December 31, 2010		As of September 30, 2010
	(dollars in thousands)
Overnight repurchase agreements with customers	$	101,886	$	118,904	$	113,099
Federal funds purchased		41,700		22,250		23,320
	$	143,586	$	141,154	$	136,419

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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

FHLB advances decreased by $34.0 million, or 14%, during the first nine months of 2011.  The decline was the combination of prepayment ($15.0 million) and maturities ($19.0 million).  As a result of their memberships in either the FHLB of Des Moines or Chicago, the subsidiary banks have the ability to borrow funds for short or long-term purposes under a variety of programs.  FHLB advances are utilized for loan matching as a hedge against the possibility of rising interest rates, and when these advances provide a less costly or more readily available source of funds than customer deposits.  See Note 4 for additional information on FHLB advances.

Other borrowings decreased $9.9 million, or 7%, from $150.1 million at December 31, 2010 to $140.1 million at September 30, 2011.  Other borrowings consist largely of structured wholesale repurchase agreements which are utilized as an alternative funding source to FHLB advances and customer deposits.  The table below presents the composition of the Company’s other borrowings.

	As of September 30, 2011		As of December 31, 2010
	(dollars in thousands)
Wholesale repurchase agreements	$	135,000	$	135,000
364-day revolving note		2,500		2,500
Series A subordinated notes		2,630		2,624
Secured borrowings - loan participations sold		-		9,936
Other		-		10
	$	140,130	$	150,070

As of December 31, 2010, secured borrowings for loan participations sold largely represented sales of the government guaranteed portion of certain SBA and USDA loans.  At that time, the sales required execution with a 90-day recourse period which prompted required accounting treatment as secured borrowings and deferral of any gains until expiration of the recourse period.  During the second quarter of 2011, SBA and USDA removed the recourse provisions for future sales which allows for sale accounting treatment at the time of sale.

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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

The table below presents the composition of the Company’s stockholders’ equity, including the common and preferred equity components.

	As of September 30, 2011			As of December 31, 2010
	(dollars in thousands)
Common stock	$	4,868		$	4,732
Additional paid in capital - common		25,098			24,328
Retained earnings		43,072			40,551
Accumulated other comprehensive income		4,173			704
Noncontrolling interests		1,924			1,648
Less: Treasury stock		(1,606	)		(1,606	)
Total common stockholders' equity		77,529			70,357
Preferred stock - par value		65			63
Additional paid-in capital - preferred		65,575			62,151
Total preferred stockholders' equity		65,640			62,214
Total stockholders' equity	$	143,169		$	132,571

Stockholders’ equity increased $10.6 million, or 8%, during the first nine months of 2011.  Net income of $6.9 million for the first nine months of 2011 increased retained earnings; however, this was partially offset by declaration and accrual of preferred stock dividends and discount accretion totaling $4.3 million, and declaration of common stock dividends of $186 thousand.  Specifically regarding the preferred stock dividends, the following details the dividend activity for the first nine months of 2011:

· $1.8 million for the quarterly dividends on the outstanding shares of Series D Cumulative Perpetual Preferred Stock at a stated rate of 5.00%, including the related discount accretion, paid up through redemption which occurred on September 15, 2011,

· $1.2 million for the accelerated accretion of the remaining discount on the redeemed Series D Cumulative Perpetual Preferred Stock, and

· $1.3 million for the three quarterly dividends on the outstanding shares of Series E Non-Cumulative Perpetual Preferred Stock at a stated dividend rate of 7.00%.

It is the Company’s intention to consider the payment of common stock dividends on a semi-annual basis.

The net proceeds from the issuance of the Series F Preferred Stock and the simultaneous redemption of the Series D Preferred Stock totaled $1.7 million which helped contribute to the increase in stockholder’s equity.  See Note 8 for additional information on the Series F Preferred Stock.

Lastly, the available for sale portion of the securities portfolio experienced an increase in fair value of $3.5 million, net of tax, for the first nine months of 2011 as a result of fluctuation in certain market interest rates.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity measures the ability of the Company to meet maturing obligations and its existing commitments, to withstand fluctuations in deposit levels, to fund its operations, and to provide for customers’ credit needs.  The Company monitors liquidity risk through contingency planning stress testing on a regular basis.  The Company seeks to avoid over concentration of funding sources and to establish and maintain contingent funding facilities that can be drawn upon if normal funding sources become unavailable.  One source of liquidity is cash and short-term assets, such as interest-bearing deposits in other banks and federal funds sold, which totaled $75.9 million at September 30, 2011 and $143.7 million at December 31, 2010.  The decline is a direct result of the Company’s investment of its excess on-balance sheet liquidity throughout 2011.

The Company has a variety of sources of short-term liquidity available, including federal funds purchased from correspondent banks, FHLB advances, structured wholesale repurchase agreements, brokered certificates of deposit, lines of credit, borrowing at the Federal Reserve Discount Window, sales of securities available for sale, and loan/lease participations or sales.  At September 30, 2011, the subsidiary banks had 19 lines of credit totaling $200.0 million, of which $75.5 million was secured and $124.5 million was unsecured.  At September 30, 2011, all of the $200.0 million was available.  Additionally, the Company has a single $20.0 million secured revolving line of credit with a maturity date of April 1, 2012.  As of September 30, 2011, the Company had $17.5 million available as the line of credit carried an outstanding balance of $2.5 million.

Throughout its history, the Company has secured additional capital through various resources, including the issuance of trust preferred securities and the issuance of preferred stock.  Trust preferred securities are reported on the Company’s balance sheet as liabilities, but do qualify for treatment as regulatory capital.

The following table presents the details of the trust preferred securities issued and outstanding as of September 30, 2011.

Name	Date Issued	Amount Issued		Interest Rate	Interest Rate as of  9/30/11		Interest Rate as of 12/31/10
QCR Holdings Statutory Trust II	February 2004	$	12,372,000	2.85% over 3-month LIBOR *		3.10%		6.93%
QCR Holdings Statutory Trust III	February 2004		8,248,000	2.85% over 3-month LIBOR		3.10%		3.15%
QCR Holdings Statutory Trust IV	May 2005		5,155,000	1.80% over 3-month LIBOR		2.05%		2.09%
QCR Holdings Statutory Trust V	February 2006		10,310,000	1.55% over 3-month LIBOR **		1.80%		6.62%
		$	36,085,000

*Rate was fixed at 6.93% until March 31, 2011 when it became variable based on 3-month LIBOR plus 2.85%, reset quarterly.

**Rate was fixed until April 7, 2011, when it became variable based on 3-month LIBOR plus 1.55%, reset quarterly.

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The following table presents the details of the preferred stock issued and outstanding as of September 30, 2011.

	Date Issued	Aggregate Purchase Price		Stated Dividend Rate
Series E Non-Cumulative Convertible Perpetual Preferred Stock	June 2010		25,000,000		7.00	%
Series F Non-Cumulative Convertible Perpetual Preferred Stock	September 2011		40,090,000		5.00	% *
		$	65,090,000

* Non-cumulative dividends are payable quarterly on the Series F Preferred Stock, and the dividend rate is based on changes in the level of “Qualified Small Business Lending” or “QSBL” by the Company’s wholly owned bank subsidiaries, QCBT, CRBT and RB&T.  Based upon the change in the banks’ level of QSBL over the baseline level, the dividend rate for the initial dividend period, which was from the date of issuance through September 30, 2011, was set at 5%, and the dividend rate for the fourth quarter of 2011 has also been set at 5%. See Note 8 for additional discussion on the Series F Preferred Stock.

As of September 30, 2011, the Company reported its qualified small business lending in accordance with SBLF guidelines and calculated a net decline from the baseline of $62.4 million, or 14%.  SBLF defines the baseline as the average of the Company’s qualified small business loans for the last two quarters of 2009 and the first two quarters of 2010.  As a result of the decline, the dividend rate on the Series F Preferred Stock remains at 5%.  The decline is primarily a function of the residual impact of the economic downturn on the communities the Company serves over the recent years.  Specifically, small business loan demand weakened whereby originations were outpaced by payments and maturities.

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The Company and the subsidiary banks are subject to various regulatory capital requirements administered by the federal banking agencies.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the subsidiary banks must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  As of September 30, 2011, the regulatory capital ratios of each of our subsidiary banks exceeded the minimum levels required for them to qualify as “well-capitalized” under the regulatory framework for prompt corrective action.  The Company and the subsidiary banks’ actual capital amounts and ratios as of September 30, 2011 and December 31, 2010 are presented in the following tables (dollars in thousands):

	Actual					For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount			Ratio			Amount			Ratio
As of September 30, 2011:
Company:
Total risk-based capital	$	190,428		14.01	%	$	108,760	>		8.0	%		N/A			N/A
Tier 1 risk-based capital		168,803		12.42	%		54,380	>		4.0			N/A			N/A
Tier 1 leverage ratio		168,803		8.88	%		76,043	>		4.0			N/A			N/A
Quad City Bank & Trust:
Total risk-based capital	$	96,477		13.16	%	$	58,633	>		8.0	%	$	73,291	>		10.00	%
Tier 1 risk-based capital		87,836		11.98	%		29,317	>		4.0			43,975	>		6.00	%
Tier 1 leverage ratio		87,836		8.35	%		42,083	>		4.0			52,604	>		5.00	%
Cedar Rapids Bank & Trust:
Total risk-based capital	$	56,670		14.43	%	$	31,415	>		8.0	%	$	39,269	>		10.00	%
Tier 1 risk-based capital		51,734		13.17	%		15,708	>		4.0			23,561	>		6.00	%
Tier 1 leverage ratio		51,734		9.04	%		22,891	>		4.0			28,613	>		5.00	%
Rockford Bank & Trust:
Total risk-based capital	$	35,878		15.18	%	$	18,907	>		8.0	%	$	23,634	>		10.00	%
Tier 1 risk-based capital		32,913		13.93	%		9,454	>		4.0			14,180	>		6.00	%
Tier 1 leverage ratio		32,913		11.44	%		11,507	>		4.0			14,383	>		5.00	%

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											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2010:
Company:
Total risk-based capital	$	183,030		13.70	%	$	106,870	>	8.0	%		N/A		N/A
Tier 1 risk-based capital		161,939		12.12	%		53,435	>	4.0			N/A		N/A
Tier 1 leverage ratio		161,939		8.71	%		74,342	>	4.0			N/A		N/A
Quad City Bank & Trust:
Total risk-based capital	$	95,875		13.12	%	$	58,455	>	8.0	%	$	73,069	>	10.00	%
Tier 1 risk-based capital		86,821		11.88	%		29,228	>	4.0			43,841	>	6.00	%
Tier 1 leverage ratio		86,821		8.48	%		40,965	>	4.0			51,206	>	5.00	%
Cedar Rapids Bank & Trust:
Total risk-based capital	$	55,401		14.14	%	$	31,335	>	8.0	%	$	39,169	>	10.00	%
Tier 1 risk-based capital		50,465		12.88	%		15,667	>	4.0			23,501	>	6.00	%
Tier 1 leverage ratio		50,465		9.03	%		22,354	>	4.0			27,942	>	5.00	%
Rockford Bank & Trust:
Total risk-based capital	$	33,852		15.82	%	$	17,119	>	8.0	%	$	21,399	>	10.00	%
Tier 1 risk-based capital		31,171		14.57	%		8,560	>	4.0			12,839	>	6.00	%
Tier 1 leverage ratio		31,171		11.31	%		11,027	>	4.0			13,784	>	5.00	%

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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995.This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may contain, forward-looking statements, within the meaning of such term in 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,” “may,” “will,” “would,” “could,” “should,” “likely,” 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.

The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. The factors which could have a material adverse effect on the Company’s operations and future prospects are detailed in the “Risk Factors” section included under Item 1.A. of Part I of the Company’s Form 10-K. In addition to the risk factors described in that section, there are other factors that may impact any public company, including the Company, which could have a material adverse effect on the Company’s operations and future prospects of the Company and its subsidiaries.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

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Item 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company, like other financial institutions, is subject to direct and indirect market risk.  Direct market risk exists from changes in interest rates.  The Company’s net income is dependent on its net interest income.  Net interest income is susceptible to interest rate risk to the degree that interest-bearing liabilities mature or reprice on a different basis than interest-earning assets.  When interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a given period, a significant increase in market rates of interest could adversely affect net interest income.  Similarly, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could result in a decrease in net interest income.

In an attempt to manage the Company’s exposure to changes in interest rates, management monitors the Company’s interest rate risk.  Each subsidiary bank has an asset/liability management committee of the board of directors that meets quarterly to review the bank’s interest rate risk position and profitability, and to make or recommend adjustments for consideration by the full board of each bank.  Internal asset/liability management teams consisting of members of the subsidiary banks’ management meet weekly to manage the mix of assets and liabilities to maximize earnings and liquidity and minimize interest rate and other risks.  Management also reviews the subsidiary banks’ securities portfolios, formulates investment strategies, and oversees the timing and implementation of transactions to assure attainment of the board's objectives in the most effective manner.  Notwithstanding the Company’s interest rate risk management activities, the potential for changing interest rates is an uncertainty that can have an adverse effect on net income.

In adjusting the Company’s asset/liability position, the board of directors and management attempt to manage the Company’s interest rate risk while maintaining or enhancing net interest margins.  At times, depending on the level of general interest rates, the relationship between long-term and short-term interest rates, market conditions and competitive factors, the board of directors and management may decide to increase the Company’s interest rate risk position somewhat in order to increase its net interest margin.  The Company’s results of operations and net portfolio values remain vulnerable to increases in interest rates and to fluctuations in the difference between long-term and short-term interest rates.

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Item 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

One method used to quantify interest rate risk is a short-term earnings at risk summary, which is a detailed and dynamic simulation model used to quantify the estimated exposure of net interest income to sustained interest rate changes.  This simulation model captures the impact of changing interest rates on the interest income received and interest expense paid on all interest sensitive assets and liabilities reflected on the Company’s consolidated balance sheet.  This sensitivity analysis demonstrates net interest income exposure annually over a five-year horizon, assuming no balance sheet growth and various interest rate scenarios including no change in rates; 200, 300, 400, and 500 basis point upward shifts; and a 100 basis point downward shift in interest rates, where interest-bearing assets and liabilities reprice at their earliest possible repricing date.  The model assumes parallel and pro rata shifts in interest rates over a twelve-month period for the 200 basis point upward shift and 100 basis point downward shift.  For the 400 basis point upward shift, the model assumes a parallel and pro rata shift in interest rates over a twenty-four (24) month period.  For the 500 basis point upward shift, the model assumes a flattening and pro rata shift in interest rates over a twelve-month period where the short-end of the yield curve shifts upward greater than the long-end of the yield curve.  Effective with the modeling for the second quarter of 2010, the Company added an interest rate scenario where interest rates experience a parallel and instantaneous shift upward 300 basis points.  The asset/liability management committee of the board of directors has established policy limits of a 10% decline in net interest income for the 200 and the newly added 300 basis point upward shifts and the 100 basis point downward shift.

Application of the simulation model analysis at the most recent quarter-end available is presented in the following table.  Please note the simulation model analysis as of September 30, 2011 is not yet available.

	NET INTEREST INCOME EXPOSURE in YEAR 1
INTEREST RATE SCENARIO	As of June 30, 2011			As of March 31, 2011			As of December 31, 2010			As of September 30, 2010
100 basis point downward shift		-1.9	%		-1.8	%		-1.9	%		-1.0	%
200 basis point upward shift		-3.6	%		-3.6	%		-3.0	%		-3.3	%
300 basis point upward shift		-5.1	%		-4.1	%		-1.6	%		-2.5	%

The simulation is within the board-established policy limit of a 10% decline in value for all three scenarios.

Interest rate risk is considered to be one of the most significant market risks affecting the Company.  For that reason, the Company engages the assistance of a national consulting firm and its risk management system to monitor and control the Company’s interest rate risk exposure.   Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company’s business activities.

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Item 4

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.  An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) as of September 30, 2011.  Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports filed and submitted under the Exchange Act was recorded, processed, summarized and reported as and when required.

Changes in Internal Control over Financial Reporting.  There have been no significant changes to the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

67

Part II

QCR HOLDINGS, INC.

 AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 1  Legal Proceedings

There are no material pending legal proceedings to which the Company or any of its subsidiaries is a party other than ordinary routine litigation incidental to their respective businesses.

Item1.A. Risk Factors

There have been no material changes in the risk factors applicable to the Company from those disclosed in Part I, Item 1.A. “Risk Factors,” in the Company’s 2010 Annual Report on Form 10-K.  Please refer to that section of the Company’s Form 10-K for disclosures regarding the risks and uncertainties related to the Company’s business.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

On September 15, 2011, the Company entered into a Securities Purchase Agreement with the U.S. Secretary of the Treasury (“Treasury”), pursuant to which the Company issued and sold to Treasury 40,090 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series F (“Series F Preferred Stock”), having a liquidation preference of $1,000 per share, for aggregate proceeds of $40,090,000.  The Series F Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

Item 3  Defaults Upon Senior Securities

None

Item 4 [REMOVED AND RESERVED]

Item 5   Other Information

None

68

Part II

QCR HOLDINGS, INC.

 AND SUBSIDIARIES

PART II - OTHER INFORMATION - continued

Item 6  Exhibits

3.1 Certificate of Incorporation of QCR Holdings, Inc., as amended.

4.1 Form of Stock Certificate for Senior Non-Cumulative Perpetual Preferred Stock, Series F (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on September 16, 2011).

10.1 Securities Purchase Agreement, dated September 15, 2011, between the Company and the Secretary of the Treasury, with respect to the issuance and sale of Senior Non-Cumulative Perpetual Preferred Stock, Series F (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on September 16, 2011).

10.2 Repurchase Document, dated September 15, 2011, between the Company and the United States Department of the Treasury, with respect to the repurchase of Fixed Rate Cumulative Perpetual Preferred Stock, Series D (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on September 16, 2011).

31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a).

31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a).

32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101* Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2011 and September 30, 2010; (iii) Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2011 and September 30, 2010; (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and September 30, 2010; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text.

* As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, or otherwise subject to liability under those sections.

69

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

QCR HOLDINGS, INC.

(Registrant)

Date    November 8, 2011	/s/ Douglas M. Hultquist
	Douglas M. Hultquist, President
	Chief Executive Officer

Date    November 8, 2011	/s/ Todd A. Gipple
	Todd A. Gipple, Executive Vice President
	Chief Operating Officer
	Chief Financial Officer

70

EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

ARTICLE I

NAME

The name of the corporation is:

Quad City Holdings, Inc.

ARTICLE II

REGISTERED OFFICE AND AGENT

The address of the corporation’s registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, 19901, County of Kent. The name of the corporation’s registered agent at such address is The Prentice-Hall Corporation System, Inc.

ARTICLE III

PURPOSE

The nature of the business or purposes to be conducted or promoted by the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as amended from time to time, or any successor thereto.

ARTICLE IV

AUTHORIZED STOCK

The total number of shares of stock which the corporation shall have authority to issue is 1,500,000 shares of Common Stock, par value of $1.00 per share.

ARTICLE V

INCORPORATORS

The name and mailing address of the sole incorporator is as follows:

Name	Mailing Address
John S. Gosma, Esq.	c/o Noyes, O’Brien, Gosma & Brooke 400 North Main Street, Suite 16 Davenport, Iowa 52801

ARTICLE VI

BYLAWS

The bylaws of the corporation may be amended, altered or repealed by the stockholders of the corporation, provided, however, that such amendment, alteration or repeal is approved by the affirmative vote of the holders of not less than 75% of the outstanding shares of stock of the corporation then entitled to vote generally in the election of directors. The bylaws may also be amended, altered or repealed by the board of directors in the manner provided in the bylaws.

ARTICLE VII

WRITTEN BALLOTS

Election of directors need not be by written ballot unless the bylaws of the corporation so provide.

ARTICLE VIII

AMENDMENTS

The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. In addition to any other requirement for amendments, no amendment to this certificate of incorporation shall amend, alter, change or repeal any of the provisions of Article VI, Article XII, Article XIII, Article XIV, Article XV or this sentence of this Article VIII unless the amendment effecting such amendment, alteration, change or repeal shall have received the affirmative vote of the holders of shares having at least 75% of the voting power of all outstanding stock of the corporation entitled to vote thereon. Notwithstanding anything contained herein to the contrary, the provisions of the immediately preceding sentence shall not apply to any amendment, alteration, change or repeal which has been approved by not less than 80% of the number of directors as may be fixed from time to time, in the manner prescribed herein, by the board of directors of the corporation.

2

ARTICLE IX

INDEMNIFICATION

Each person who is or was a director or officer of the corporation and each person who serves or served at the request of the corporation as a director, officer or partner of another enterprise shall be indemnified by the corporation in accordance with, and to the fullest extent authorized by, the General Corporation Law of the State of Delaware, as the same now exists or may be hereafter amended. No amendment to or repeal of this Article IX shall apply to or have any effect on the rights of any individual referred to in this Article IX for or with respect to acts or omissions of such individual occurring prior to such amendment or repeal.

ARTICLE X

PERSONAL LIABILITY OF DIRECTORS

To the fullest extent permitted by the General Corporation Law of Delaware, as the same now exists or may be hereafter amended, a director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. No amendment to or repeal of this Article X shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to the effective date of such amendment or repeal.

ARTICLE XI

CERTAIN ARRANGEMENTS BETWEEN THE

CORPORATION AND ITS CREDITORS

Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provision of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.

3

ARTICLE XII

BOARD OF DIRECTORS

The number of directors constituting the entire board of directors shall not be less than three nor more than nine as fixed from time to time by resolution of not less than 80% of the number of directors which immediately prior to such proposed change had been fixed, in the manner prescribed herein, by the board of directors of the corporation, provided, however, that the number of directors shall not be reduced as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the entire board of directors shall be five until otherwise fixed as described immediately above. Directors need not be stockholders of the corporation.

The directors of the corporation shall be divided into three classes, Class I, Class II and Class III, as nearly equal in number as the then total number of directors constituting the entire board of directors permits with the term of office of one class expiring each year. At the annual meeting of stockholders in 1993, directors of Class I shall be elected to hold office for a term expiring at the 1994 annual meeting, directors of Class II shall be elected to hold office for a term expiring at the 1995 annual meeting and directors of Class III shall be elected to hold office for a term expiring at the 1996 annual meeting. Any vacancies in the board of directors for any reason, and any directorships resulting from any increase in the number of directors, may be filled by the board of directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their successors shall be elected and qualified. If the number of directors is changed, any increase or decrease in the number of directors shall be apportioned among the classes so as to maintain all classes as equal in number as possible. At each annual meeting of stockholders after the meeting held in 1993, the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the third succeeding annual meeting.

Notwithstanding any other provisions of this certificate of incorporation or the bylaws of the corporation (and notwithstanding the fact that some lesser percentage may be specified by law, this certificate of incorporation or the bylaws of the corporation), any director or the entire board of directors of the corporation may be removed at any time, but only for cause and only by the affirmative vote of the holders of not less than 75% of the outstanding shares of stock of the corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at an annual meeting of stockholders or at a meeting of the stockholders called for that purpose.

4

ARTICLE XIII

ADDITIONAL VOTING REQUIREMENTS

A. Except as otherwise expressly provided in paragraph C of this Article XIII and notwithstanding any other provision of this certificate of incorporation:

(a)  any merger or consolidation of the corporation or of any Subsidiary with or into any other corporation;

(b)  any sale, lease, exchange or other disposition by the corporation or any Subsidiary of assets constituting all or substantially all of the assets of the corporation and its Subsidiaries taken as a whole to or with any other corporation, person or other entity in a single transaction or a series of related transactions;

(c)  any issuance or transfer by the corporation or any Subsidiary, of any voting securities of the corporation (except for voting securities issued pursuant to a stock option, purchase, bonus or other plan for natural persons who are directors, employees, consultants and/or agents of the corporation or any Subsidiary) to any other corporation, person or other entity in exchange for cash, assets or securities or a combination thereof; and

(d)  the voluntary dissolution of the corporation;

shall require the affirmative vote of the holders of shares having at least 75% of the voting power of all outstanding stock of the corporation entitled to vote thereon. Such affirmative vote shall be required notwithstanding the fact that no vote or a lesser vote may be required, or that some lesser percentage may be specified by law or otherwise in this certificate of incorporation or by the bylaws of the corporation.

B. For purposes of this Article XIII, the term “Subsidiary” means any entity in which the corporation beneficially owns, directly or indirectly, more than 75% of the outstanding voting stock. The phrase “voting security” as used in paragraph A of this Article XIII shall mean any security which is (or upon the happening of any event, would be) entitled to vote for the election of directors, and any security convertible, with or without consideration into such security or carrying any warrant or right to subscribed to or purchase such a security.

C. The provisions of this Article XIII shall not apply to any transaction described in clause (a), (b), (c) or (d) of paragraph A of this Article XIII: (i) approved at any time prior to its consummation by resolution adopted by not less than 80% of the number of directors as may be fixed from time to time, in the manner prescribed herein, by the board of directors of the corporation; or (ii) with any corporation of which a majority of the outstanding shares of all classes of stock is owned of record or beneficially by the corporation; or (iii) which is a merger with another corporation without action by the stockholders of the corporation to the extent and in the manner permitted from time to time by the law of the State of Delaware.

D. The interpretation, construction and application of any provision or provisions of this Article XIII and the determination of any facts in connection with the application of this Article XIII, shall be made by a majority of all of the directors of the corporation. Any such interpretation, construction, application or determination, when made in good faith, shall be conclusive and binding for all purposes of this Article XIII.

5

ARTICLE XIV

BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS

The provisions of Section 203 of the General Corporation Law of the State of Delaware, as the same now exists or may hereafter be amended or as such Section 203 may hereafter be renumbered or recodified, will be deemed to apply to the corporation, and the corporation shall be subject to all of the restrictions set forth in such Section 203.

ARTICLE XV

STOCKHOLDERS’ ACTION

Any action required or permitted to be taken by the holders of capital stock of the corporation must be effected at a duly called annual or special meeting of the holders of capital stock of the corporation and may not be effected by any consent in writing by such holders.

Dated: February 4, 1993.

/s/ John S. Gosma  

John S. Gosma, Esq. 

Being the sole incorporator of the corporation. 

6

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

Adopted in accordance with the provisions of Section 242

of the General Corporation Law of the State of Delaware

We, Douglas M. Hultquist and Richard R. Horst, President and Secretary, respectively, of Quad City Holdings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the Sate of Delaware, DO HEREBY CERTIFY THAT:

1. The Certificate of Incorporation of said corporation has been amended as follows:

Article IV of the Certificate of Incorporation of the Corporation is hereby amended in its entirety to read as follows:

ARTICLE IV

AUTHORIZED STOCK

The total number of shares of capital stock which the corporation shall have authority to issue is 2,500,000 shares of Common Stock, par value $1.00 per share, and 250,000 shares of Preferred Stock, par value $1.00 per share.

The Board of Directors is expressly authorized to adopt, from time to time, a resolution or resolutions providing for the issue of one or more series of Preferred Stock, with such voting powers, full or limited, or no voting powers, and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors.

2. The foregoing amendment has been duly adopted in accordance with provisions of the General Corporation Law of the State of Delaware by the majority vote of all of the stockholders entitled to vote in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

7

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by Douglas M. Hultquist, its President, and attested by Richard R. Horst, its Secretary, as of this  _____  day of July, 1993.

QUAD CITY HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Douglas M. Hultquist
	President

ATTEST:

/s/ Richard R. Horst

Richard R. Horst

Secretary

8

CERTIFICATE OF CORRECTION

of

CERTIFICATE OF INCORPORATION

of

QUAD CITY HOLDINGS, INC.

Quad City Holdings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

1.	The name of the corporation (hereinafter called the “Corporation”) is Quad City Holdings, Inc.
2.	The Certificate of Incorporation of the Corporation, which was filed by the Secretary of Delaware of February 4, 1993, is hereby corrected.

3.	The inaccuracy to be corrected in said instrument is as follows: the Certificate of Incorporation contains a typographical error in Article XV.
4.	Article XV of the Certificate of Incorporation is corrected to read as follows:

Any action required or permitted to be taken by the holders of capital stock of the corporation must be effected at a duly called annual or special meeting of the holders of capital stock of the corporation and may not be effected by an consent in writing by such holders, unless such action is authorized by not less than 80% of the number of directors as may be fixed from time to time, in the manner prescribed herein, by the board of directors of the corporation.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by Douglas M. Hultquist, its President, and attested by Richard R. Horst, its Secretary, as of this 28th day of July, 1993.

QUAD CITY HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Douglas M. Hultquist
	President

ATTEST:

/s/ Richard R. Horst

Richard R. Horst

Secretary

9

CERTIFICATE OF DESIGNATION

of

SERIES A PREFERRED STOCK

of

QUAD CITY HOLDINGS, INC.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

QUAD CITY HOLDINGS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

That pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Certificate of Incorporation of the said Corporation, the said Board of Directors on August 21, 1996, adopted the following resolution creating a series of 100 shares of Preferred Stock designated as “Series A Preferred Stock”:

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate of Incorporation, a series of Preferred Stock, $1.00 par value per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

Series A Preferred Stock

1. Designation and Amount. The board of directors (the “Board”) of Quad City Holdings, Inc., a Delaware corporation (the “Company”), has designated 100 shares of the Company’s authorized and unissued preferred stock as “Series A Preferred Stock,” has authorized such shares for issuance at a price of $100,000 per share (the “Series A Preferred Stock”) and has determined that no further shares of Series A Preferred Stock shall be issued.

2. Dividends. The Series A Preferred Stock shall accrue no dividends nor carry any stated dividend rate.

10

3. Redemption. (a) At any time after the first anniversary of the issuance of any share of Series A Preferred Stock (the “Redemption Date”), such shares: (i) may be redeemed at any time at the option of the Company; or (ii) shall be redeemed if the Company sells for cash additional shares of its common stock, $1.00 par value per share (“Common Stock”), subject to receipt in either case of all required regulatory approvals. The proceeds of any such sales of additional shares of Common Stock shall be used to redeem all outstanding shares of Series A Preferred Stock on a first issued, first redeemed basis, and with respect to all Preferred Stock issued on the same date, on a pro rata basis. Notwithstanding anything contained herein to the contrary, the Company shall not be required to use the cash proceeds from the sale or issuance of any of its shares of Common Stock made solely to its employees or directors, whether or not such sales have been registered with the Securities and Exchange Commission on Form S-8, or in connection with the exercise of any options or warrants or through a dividend reinvestment plan or other form of ongoing stock purchase plan which may be offered to the Company’s stockholders from time to time. Each issued and outstanding share of Series A Preferred Stock shall be redeemed at an aggregate per share price equal to the sum of: (x) $100,000; plus (y) $9,750 multiplied by a fraction the numerator of which is the total number of calendar days the share of Series A Preferred Stock has been issued and outstanding through the Redemption Date, and the denominator of which is 365 (the “Redemption Price”).

(b) Not less than 30 days nor more than 60 days prior to the Redemption Date, written notice (the “Redemption Notice”) shall be mailed, first class postage prepaid, to the holders of the shares of the Series A Preferred Stock at their address last shown on the records of the Company. The Redemption Notice shall state: (i) the number of shares being redeemed; (ii) what the Redemption Date and Redemption Price are; and (iii) that each holder is to surrender to the Company, in the manner and at the place designated, the certificates representing the shares of Series A. Preferred Stock to be redeemed.

(c) Before any holder of shares of Series A Preferred Stock shall be entitled to redeem any such shares for cash, it shall surrender the certificate or certificates therefor, duly endorsed, in the manner and at the specified in the Redemption Notice. Following delivery of the shares of Series A Preferred Stock to be redeemed, the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be cancelled and retired.

(d) Notwithstanding anything contained in this Section 3 to the contrary, the Company shall not be obligated to redeem for cash any shares of Series A Preferred Stock if such redemption would cause the Company to be in violation of any statute, rule, order regulation or agreement to which the Company is a party, including, but not limited to, any statute, rule, order, regulation or agreement relating to minimum capital requirements. The Company shall use its best efforts promptly to remedy any such violation if the same has the effect of preventing the redemption of any shares of Series A Preferred Stock, and shall promptly complete the redemption of shares after such violation has been cured.

4. Voting Rights. (a) The holders of each share of Series A. Preferred Stock shall not be entitled to vote, except: (i) as required by law; and (ii) to approve the authorization or issuance of any shares of any class or series of stock which ranks senior or on a parity with, the Series A Preferred Stock in respect of dividends and distributions upon the dissolution, liquidation or winding up of the Company.

(b) Notwithstanding anything contained herein to the contrary, the holders of Series A Preferred Stock shall vote as a separate class when required by law and to approve the matters set forth in Section 4(a) (ii). In such circumstances, the affirmative vote of the holders of a majority (or such greater percentage as may be required by law or the company’s certificate of incorporation or bylaws) of the voting rights provided in this Section for the Series A Preferred Stock, voting separately as a class, shall be necessary to approve such proposed action by the holders of Series A Preferred Stock.

11

5. Liquidation. Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, each holder of shares of Series A Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, the amount equal to the Redemption Price multiplied by the number of shares of Series A Preferred Stock owned by such holder. In the event the assets of the Company available for distribution to the holders of shares of Series A Preferred Stock upon any dissolution, liquidation or winding up of the Company shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to this paragraph, then all of the assets of the Company to be distributed shall be distributed ratably to the holders of Series A Preferred Stock. After the payment to the holders of the shares of Series A Preferred Stock of the full amounts provided for in this paragraph, the holders of shares of Series A Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 9th day of October, 1996

ATTEST			QUAD CITY HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist		By:	/s/ Michael A. Bauer
	Douglas M. Hultquist			Michael A. Bauer
	President			Chairman of the Board
STATE OF IOWA		)
		) SS:
COUNTY OF SCOTT		)

BE IT REMEMBERED that, on October 9, 1996, before me, a Notary Public duly authorized by law to take acknowledgement of deeds, personally came each of Michael A. Bauer and Douglas M. Hultquist, the Chairman and President of Quad City Holdings, Inc., respectively, who duly signed the foregoing instrument before me and acknowledged that such signing is his respective act and deed, that such instrument as executed is the act and deed of said corporation and that the facts stated therein are true.

GIVEN under my hand on October 9, 1996.

/s/ Patti Easley  

Notary Public 

12

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

Quad City Holding, Inc. (hereinafter called the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify that:

1. The name of the Corporation is: Quad City Holdings, Inc.

2. The first sentence of Article IV of the Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

ARTICLE IV

AUTHORIZED STOCK

The total number of shares of capital stock which the corporation shall have authority to issue is 5,000,000 shares of Common Stock, par value $1.00 per share, and 250,000 shares of Preferred Stock, par value $1.00 per share.

3. The amendment of the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

Dated as of the 21st day of October, 1998

QUAD CITY HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Douglas M. Hultquist,
	President

13

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

Quad City Holdings, Inc. (hereinafter called the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended does hereby certify that:

1. The name of the Corporation is: Quad City Holdings, Inc.

2. Article I of the Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

ARTICLE I

NAME

The name of the corporation is:

QCR Holdings, Inc.

3. The amendment to the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

Dated as of the 24th day of October, 2001

QUAD CITY HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Douglas M. Hultquist,
	President

14

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

QCR HOLDINGS, INC.

QCR Holdings, Inc. (hereinafter called the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended, does hereby certify that:

1. The name of the Corporation is: QCR Holdings, Inc.

2. The first sentence of Article XII of the Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

The number of directors constituting the entire board of directors shall not be less than three nor more than twelve as fixed from time to time by resolution of not less than 80% of the number of directors which immediately prior to such proposed change had been fixed, in the manner prescribed herein, by the board of directors of the corporation, provided, however, that the number of directors shall not be reduced as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the entire board of directors shall be nine until otherwise fixed as described immediately above.

3. The following provision is hereby added to the Certificate of Incorporation of the Corporation as a new Article XVI to read in its entirety as follows:

ARTICLE XVI

NON-STOCKHOLDER INTERESTS

In connection with the exercise of its judgment in determining what is in the best interests of the Corporation and its stockholders when evaluating a proposal by another person or persons to make a tender or exchange offer for any equity security of the Corporation or any subsidiary, to merge or consolidate with the Corporation or any subsidiary or to purchase or otherwise acquire all or substantially all of the assets of the Corporation or any subsidiary, the board of directors of the Corporation may consider all of the following factors and any other factors which it deems relevant: (A) the adequacy of the amount to be paid in connection with any such transaction; (B) the social and economic effects of the transaction on the Corporation and its subsidiaries and the other elements of the communities in which the Corporation or its subsidiaries operate or are located; (C) the business and financial condition and earnings prospects of the acquiring person or persons, including, but not limited to, debt service and other existing or likely financial obligations of the acquiring person or persons, and the possible effect of such conditions upon the Corporation and its subsidiaries and the other elements of the communities in which the Corporation and its subsidiaries operate or are located; (D) the competence, experience, and integrity of the acquiring person or persons and its or their management; and (E) any antitrust or other legal or regulatory issues which may be raised by any such transaction.”

15

4. The amendment to the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

Dated as of the 23rd day of October, 2002.

QCR HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Douglas M. Hultquist,
	President

16

CERTIFICATE OF DESIGNATION

of

SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

of

QCR HOLDINGS, INC.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

QCR Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

That pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors”) in accordance with the provisions of the Certificate of Incorporation of the said Corporation, the said Board of Directors on September 4, 2003 adopted the following resolution creating a series of 10,000 shares of Preferred Stock designated as “Series B Junior Participating Preferred Stock”:

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate of Incorporation, a series of Preferred Stock, $1.00 par value per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

Series B Junior Participating Preferred Stock

1. Designation and Amount. There shall be a series of Preferred Stock that shall be designated as “Series B Junior Participating Preferred Stock,” and the number of shares constituting such series shall be 10,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series B Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation.

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2. Dividends and Distribution.

(A) Subject to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior to the shares of Series B Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series B Junior Participating Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series B Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October, in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b) the Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the “Common Stock”) since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 1,000. In the event the Corporation shall at any time after September 4, 2003 (i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution on the Series B Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock).

(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof.

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3. Voting Rights. The holders of shares of Series B Junior Participating Preferred Stock shall have the following voting rights:

(A) Each share of Series B Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of the stockholders of the Corporation.

(B) Except as required by law, by Section 3(C) and by Section 10 hereof, holders of Series B Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

(C) If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series B Junior Participating Preferred Stock are in default, the number of directors constituting the Board of Directors of the Corporation shall be increased by two. In addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holders of record of the Series B Junior Participating Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Series B Junior Participating Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the corporation, the holders of any Series B Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series B Junior Participating Preferred Stock as is specified in paragraph (A) of this Section 3. Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the provisions of this Section 3(C) may be removed at any time, without cause, only by the affirmative vote of the holders of the shares of Series B Junior Participating Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series B Junior Participating Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the holders of the Series B Junior Participating Preferred Stock in this Section 3.

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4. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or distributions payable on the Series B Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock;

(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, except dividends paid ratably on the Series B Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or

(iii) purchase or otherwise acquire for consideration any shares of Series B Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series B Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series B Junior Participating Preferred Stock, or to such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

5. Reacquired Shares. Any shares of Series B Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein.

6. Liquidation, Dissolution, or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series B Junior Participating Preferred Stock shall have received an amount per share (the “Series B Liquidation Preference”) equal to the greater of (i) $0.01 plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the Corporation.

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(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series B Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series B Junior Participating Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences.

(C) Neither the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6.

7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series B Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.

8. No Redemption. Share of Series B Junior Participating Preferred Stock shall not be subject to redemption by the Corporation.

9. Ranking. The Series B Junior Participating Preferred Stock shall rank junior to all other series of the Preferred Stock as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters.

10. Amendment. At any time that any shares of Series B Junior Participating Preferred Stock are outstanding, the Certificate of Incorporation of the Corporation shall not be amended by merger, consolidation or otherwise which would materially alter or change the powers, preferences or special rights of the Series B Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series B Junior Participating Preferred Stock, voting separately as a class.

11. Fractional Shares. Series B Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Junior Participating Preferred Stock.

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IN WITNESS WHEREOF, the undersigned has executed this Certificate this 30th day of September, 2003.

QCR HOLDINGS, INC.

/s/ Todd A. Gipple  

Todd A. Gipple 

Executive Vice President and

Chief Financial Officer 

22

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

QCR HOLDINGS, INC.

QCR Holdings, Inc. (hereinafter called the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended, does hereby certify that:

1. The name of the Corporation is: QCR Holdings, Inc.

2. The first sentence of Article IV of the Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

The total number of shares of capital stock which the corporation shall have authority to issue is 10,000,000 shares of Common Stock, par value $1.00 per share, and 250,000 shares of Preferred Stock, par value $1.00 per share.

3. The amendment to the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

Dated as of the 5th day of May, 2004.

QCR HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Douglas M. Hultquist,
	President

23

CERTIFICATE OF DESIGNATION

OF SERIES OF PREFERRED STOCK

QCR HOLDINGS, INC.

STATEMENT OF DESIGNATION

OF

RIGHTS, PREFERENCES AND LIMITATIONS

OF

SERIES B NON-CUMULATIVE PERPETUAL PREFERRED STOCK

Pursuant to Section 151 of the General Corporation Law of

the State of Delaware

The undersigned, Todd A. Gipple, the Executive Vice President and Chief Financial Officer of QCR HOLDINGS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Company”), DOES HEREBY CERTIFY that, pursuant to the authority vested in the Company’s board of directors (the “Board”), in accordance with the provisions of the Company’s certificate of incorporation, the following resolutions establishing a series of 300 shares of preferred stock designated as “Series B Non-Cumulative Perpetual Preferred Stock” pursuant to Section 151 of the General Corporation Law of the State of Delaware were duly adopted by the Board on October 26, 2006;

RESOLVED, that, subject to the filing of the Designation of Rights and Preferences of Series B Non-Cumulative Perpetual Preferred Stock, there is hereby created one series of preferred stock of this Corporation, such series to be known as Series B Non-Cumulative Perpetual Preferred Stock, and that such series shall have the rights, powers, preferences and restrictions set forth in the Designation attached hereto as EXHIBIT A.

RESOLVED, that each of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer of the Corporation is hereby authorized and directed to make, execute and file with the Delaware Secretary of State in the manner required by law, such Designation, and to take all other action he may deem necessary or advisable to carry into effect the foregoing resolution.

IN WITNESS WHEREOF, I have subscribed my name this 30th day of October, 2006.

QCR HOLDINGS, INC.

/s/ Todd A. Gipple  

Todd A Gipple 

Executive Vice President and

Chief Financial Officer 

24

EXHIBIT A

DESIGNATION

OF

RIGHTS, PREFERENCES AND LIMITATIONS

OF

SERIES B NON-CUMULATIVE PERPETUAL PREFERRED STOCK

OF

QCR HOLDINGS, INC.

Section 1. Issuance. The board of directors (the “Board”) of QCR Holdings, Inc. (the “Company”) has determined that 300 shares of the Company’s authorized and unissued preferred stock be identified as “Series B Non-Cumulative Perpetual Preferred Stock” and has authorized such shares for issuance at a price of $50,000 per share (the “Series B Preferred Stock”).

Section 2. Dividends. The holders of record of the then outstanding shares of Series B Preferred Stock shall be entitled to receive only when, as and if declared by the Board out of any funds legally available therefor, non-cumulative dividends paid quarterly on the issuance price of $50,000 per share based upon an annual rate equal to eight percent (8.00%). During any fiscal year of the Company, no dividends whatsoever, other than a dividend payable solely in the Company’s common stock, par value $0.01 per share (“Common Stock”), shall be paid or declared, and no distribution shall be made, on any Common Stock or any other series of preferred stock until dividends in the total amount due per share on the Series B Preferred Stock shall have been paid or declared and set apart during that year.

Section 3. Voting Rights. The holders of each share of Series B Preferred Stock shall not be entitled to vote, except as required by law.

Section 4. Redemption Rights.

(a) Holders’ Redemption Rights. No holders of any outstanding shares of Series B Preferred Stock shall have any right to require the redemption of any outstanding shares of Series B Preferred Stock.

(b) Company’s Redemption Rights. Subject to any necessary prior regulatory approvals, including, but not limited to, the approval of the Board of Governors of the Federal Reserve System, the Company shall have the right at any time after the first anniversary of the issuance of the Series B Preferred Stock to call and redeem all (but not less than all) of the then outstanding shares of Series B Preferred Stock at a price per share equal to: (i) the sum of (A) $50,000; plus (B) a premium in the amount of $4,000 multiplied by a fraction the numerator of which is the total number of calendar days the Series B Preferred Stock being redeemed has been outstanding and the denominator of which is 365; but (ii) less the aggregate amount of any dividends that have been paid on the Preferred Stock (the “Redemption Amount”).

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(c) Redemption Notice. Not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date (as defined below), written notice (the “Redemption Notice”) shall be mailed, first-class postage prepaid, to the holders of the then outstanding shares of the Series B Preferred Stock at their respective addresses last shown on the records of the Company. The Redemption Notice shall state: (i) the number of shares being redeemed; (ii) the Redemption Date and Redemption Amount; and (iii) that each holder is to surrender to the Company, in the manner and at the place designated in the Redemption Notice, the certificates representing the shares of Series B Preferred Stock to be redeemed.

(d) Surrender of Certificates. On or before the Redemption Date, the holders of shares of Series B Preferred Stock being redeemed shall surrender the certificate or certificates representing such shares to the Company, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Amount for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be cancelled and retired.

(e) Termination of Rights. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Amount is paid, then all rights with respect to the outstanding shares of Series B Preferred Stock shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Amount upon surrender of their certificate or certificates therefor.

Section 5. Liquidation. Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the Series B Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, an amount per share equal to the Redemption Amount as of the effective date of such dissolution, liquidation or winding up of the Company, before any payment or distribution shall be made on the Common Stock. In the event the assets of the Company available for distribution to the holders of shares of the Series B Preferred Stock upon any dissolution, liquidation or winding up of the Company shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to this Section, then all of the assets of the Company to be distributed shall be distributed ratably to the holders of Series B Preferred Stock. After the payment to the holders of the shares of the Series B Preferred Stock of the full amounts provided for in this Section, the holders of the Series B Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.

26

CERTIFICATE OF DESIGNATION

OF SERIES OF PREFERRED STOCK

QCR HOLDINGS, INC.

STATEMENT OF DESIGNATION

OF

RIGHTS, PREFERENCES AND LIMITATIONS

OF

SERIES C NON-CUMULATIVE PERPETUAL PREFERRED STOCK

Pursuant to Section 151 of the General Corporation Law of

the State of Delaware

The undersigned, Todd A. Gipple, the Executive Vice President and Chief Financial Officer of QCR HOLDINGS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Company”), DOES HEREBY CERTIFY that, pursuant to the authority vested in the Company’s board of directors (the “Board”), in accordance with the provisions of the Company’s certificate of incorporation, the following resolutions establishing a series of 300 shares of preferred stock designated as “Series C Non-Cumulative Perpetual Preferred Stock” pursuant to Section 151 of the General Corporation Law of the State of Delaware were duly adopted by the Board on October 25, 2007;

RESOLVED, that, subject to the filing of the Designation of Rights and Preferences of Series C Non-Cumulative Perpetual Preferred Stock, there is hereby created an additional series of preferred stock of this Corporation, such series to be known as Series C Non-Cumulative Perpetual Preferred Stock, and that such series shall have the rights, powers, preferences and restrictions set forth in the Designation attached hereto as EXHIBIT A.

RESOLVED, that each of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer of the Corporation is hereby authorized and directed to make, execute and file with the Delaware Secretary of State in the manner required by law, such Designation, and to take all other action he may deem necessary or advisable to carry into effect the foregoing resolution.

IN WITNESS WHEREOF, I have subscribed my name this 28th day of December, 2007.

QCR HOLDINGS, INC.

/s/ Todd A. Gipple  

Todd A. Gipple 

Executive Vice President and

Chief Financial Officer 

27

EXHIBIT A

DESIGNATION

OF

RIGHTS, PREFERENCES AND LIMITATIONS

OF

SERIES C NON-CUMULATIVE PERPETUAL PREFERRED STOCK

OF

QCR HOLDINGS, INC.

Section 1. Issuance. The board of directors (the “Board”) of QCR Holdings, Inc. (the “Company”) has determined that 300 shares of the Company’s authorized and unissued preferred stock be identified as “Series C Non-Cumulative Perpetual Preferred Stock” and has authorized such shares for issuance at a price of $25,000 per share (the “Series C Preferred Stock”).

Section 2. Dividend. The holders of record of the then outstanding shares of Series C Preferred Stock shall be entitled to receive only when, as and if declared by the Board out of any funds legally available therefor, non-cumulative dividends paid quarterly on the issuance price of $25,000 per share based upon an annual rate equal to nine and one-half percent (9.5%). During any fiscal year of the Company, no dividends whatsoever, other than a dividend payable solely in the Company’s common stock, par value $0.01 per share (“Common Stock”), shall be paid or declared, and no distribution shall be made, on any Common Stock or any other series of preferred stock, with the exception of distributions made to the Series B Non-cumulative Perpetual Preferred Stock, until dividends in the total amount due per share on the Series C Preferred Stock shall have been paid or declared and set apart during that year.

Section 3. Voting Rights. The holders of each share of Series C Preferred Stock shall not be entitled to vote, except as required by law.

Section 4. Redemption Rights.

(a) Holders’ Redemption Rights. No holders of any outstanding shares of Series C Preferred Stock shall have any right to require the redemption of any outstanding shares of Series C Preferred Stock.

(b) Company’s Redemption Rights. Subject to any necessary prior regulatory approvals, including, but not limited to, the approval of the Board of Governors of the Federal Reserve System, the Company shall have the right at any time after the first anniversary of the issuance of the Series C Preferred Stock to call and redeem all (but not less than all) of the then outstanding shares of Series C Preferred Stock at a price per share equal to: (i) the sum of (A) $25,000; plus (B) a premium in the amount of $2,375 multiplied by a fraction the numerator of which is the total number of calendar days the Series C Preferred Stock being redeemed has been outstanding and the denominator of which is 365; but (ii) less the aggregate amount of any dividends that have been paid on the Preferred Stock (the “Redemption Amount”).

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(c) Redemption Notice. Not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date (as defined below), written notice (the “Redemption Notice”) shall be mailed, first-class postage prepaid, to the holders of the then outstanding shares of the Series C Preferred Stock at their respective addresses last shown on the records of the Company. The Redemption Notice shall state: (i) the number of shares being redeemed; (ii) the Redemption Date and Redemption Amount; and (iii) that each holder is to surrender to the Company, in the manner and at the place designated in the Redemption Notice, the certificates representing the shares of Series C Preferred Stock to be redeemed.

(d) Surrender of Certificates. On or before the Redemption Date, the holders of shares of Series C Preferred Stock being redeemed shall surrender the certificate or certificates representing such shares to the Company, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Amount for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be cancelled and retired.

(e) Termination of Rights. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Amount is paid, then all rights with respect to the outstanding shares of Series C Preferred Stock shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Amount upon surrender of their certificate or certificates therefor.

Section 5. Liquidation. Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the Series C Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, an amount per share equal to the Redemption Amount as of the effective date of such dissolution, liquidation or winding up of the Company, before any payment or distribution shall be made on the Common Stock, but after the amounts that are due to paid on the Series B Non-cumulative Perpetual Preferred Stock. In the event the assets of the Company available for distribution to the holders of shares of the Series C Preferred Stock upon any dissolution, liquidation or winding up of the Company shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to this Section, then all of the assets of the Company to be distributed shall be distributed ratably to the holders of Series C Preferred Stock. After the payment to the holders of the shares of the Series C Preferred Stock of the full amounts provided for in this Section, the holders of the Series C Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.

29

CERTIFICATE OF DESIGNATIONS

OF

FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES D

OF

QCR HOLDINGS, INC.

QCR Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 141(a) of the General Corporation Law of the State of Delaware, does hereby certify:

The board of directors of the Corporation (the “Board of Directors”) or an applicable committee of the Board of Directors, in accordance with the certificate of incorporation of the Corporation and applicable law, adopted the following resolution on February 5, 2009, creating a series of 38,237 shares of Preferred Stock of the Corporation designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series D.”

RESOLVED, that pursuant to the provisions of the certificate of incorporation of the Corporation and applicable law, a series of Preferred Stock, par value $1.00 per share, of the Corporation be and hereby is created, and that the designation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of such series, are as follows:

Part 1. Designation and Number of Shares. There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series D” (the “Designated Preferred Stock”). The authorized number of shares of Designated Preferred Stock shall be 38,237.

Part 2. Standard Provisions. The Standard Provisions contained in Annex A attached hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of this Certificate of Designations to the same extent as if such provisions had been set forth in full herein.

Part 3. Definitions. The following terms are used in this Certificate of Designations (including the Standard Provisions in Annex A hereto) as defined below:

(a) “Common Stock” means the common stock, par value $1.00 per share, of the Corporation.

(b) “Dividend Payment Date” means May 15, August 15, November 15 and February 15 of each year.

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(c) “Junior Stock” means the Common Stock, Series C Non-Cumulative Perpetual Preferred Stock and any other class or series of stock of the Corporation the terms of which expressly provide that it ranks junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation.

(d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.

(e) “Minimum Amount” means $9,559,250.

(f) “Parity Stock” means any class or series of stock of the Corporation (other than Designated Preferred Stock) the terms of which do not expressly provide that such class or series will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation (in each case without regard to whether dividends accrue cumulatively or non-cumulatively). Without limiting the foregoing, Parity Stock shall include the Corporation’s Series B Non-Cumulative Perpetual Preferred Stock.

(g) “Signing Date” means February 13, 2009.

Part 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will be entitled to one vote for each such share on any matter on which holders of Designated Preferred Stock are entitled to vote, including any action by written consent.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, QCR Holdings, Inc., has caused this Certificate of Designations to be signed by Douglas M. Hultquist, its President and Chief Executive Officer, this 10th day of February, 2009.

QCR HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Name:	Douglas M. Hultquist
	Title:	President and Chief Executive Officer

32

ANNEX A

STANDARD PROVISIONS

Section 1. General Matters. Each share of Designated Preferred Stock shall be identical in all respects to every other share of Designated Preferred Stock. The Designated Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard Provisions that form a part of the Certificate of Designations. The Designated Preferred Stock shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the payment of dividends and the distribution of assets in the event of any dissolution, liquidation or winding up of the Corporation.

Section 2. Standard Definitions. As used herein with respect to Designated Preferred Stock:

(a) “Applicable Dividend Rate” means (i) during the period from the Original Issue Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9% per annum.

(b) “Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.

(c) “Business Combination” means a merger, consolidation, statutory share exchange or similar transaction that requires the approval of the Corporation’s stockholders.

(d) “Business Day” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

(e) “Bylaws” means the bylaws of the Corporation, as they may be amended from time to time.

(f) “Certificate of Designations” means the Certificate of Designations or comparable instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a part, as it may be amended from time to time.

(g) “Charter” means the Corporation’s certificate or articles of incorporation, articles of association, or similar organizational document.

(h) “Dividend Period” has the meaning set forth in Section 3(a).

(i) “Dividend Record Date” has the meaning set forth in Section 3(a).

(j) “Liquidation Preference” has the meaning set forth in Section 4(a).

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(k) “Original Issue Date” means the date on which shares of Designated Preferred Stock are first issued.

(l) “Preferred Director” has the meaning set forth in Section 7(b).

(m) “Preferred Stock” means any and all series of preferred stock of the Corporation, including the Designated Preferred Stock.

(n) “Qualified Equity Offering” means the sale and issuance for cash by the Corporation to persons other than the Corporation or any of its subsidiaries after the Original Issue Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case, qualify as and may be included in Tier 1 capital of the Corporation at the time of issuance under the applicable risk-based capital guidelines of the Corporation’s Appropriate Federal Banking Agency (other than any such sales and issuances made pursuant to agreements or arrangements entered into, or pursuant to financing plans which were publicly announced, on or prior to October 13, 2008).

(o) “Share Dilution Amount” has the meaning set forth in Section 3(b).

(p) “Standard Provisions” mean these Standard Provisions that form a part of the Certificate of Designations relating to the Designated Preferred Stock.

(q) “Successor Preferred Stock” has the meaning set forth in Section 5(a).

(r) “Voting Parity Stock” means, with regard to any matter as to which the holders of Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these Standard Provisions that form a part of the Certificate of Designations, any and all series of Parity Stock upon which like voting rights have been conferred and are exercisable with respect to such matter.

Section 3. Dividends.

(a) Rate. Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly authorized committee of the Board of Directors, but only out of assets legally available therefor, cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date (i.e., no dividends shall accrue on other dividends unless and until the first Dividend Payment Date for such other dividends has passed without such other dividends having been paid on such date) and shall be payable quarterly in arrears on each Dividend Payment Date, commencing with the first such Dividend Payment Date to occur at least 20 calendar days after the Original Issue Date. In the event that any Dividend Payment Date would otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be postponed to the next day that is a Business Day and no additional dividends will accrue as a result of that postponement. The period from and including any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period”, provided that the initial Dividend Period shall be the period from and including the Original Issue Date to, but excluding, the next Dividend Payment Date.

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Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month.

Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be payable to holders of record of Designated Preferred Stock as they appear on the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (if any) declared and payable on Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the Certificate of Designations).

(b) Priority of Dividends. So long as any share of Designated Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity Stock, subject to the immediately following paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise acquired for consideration by the Corporation or any of its subsidiaries unless all accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been or are contemporaneously declared and paid in full (or have been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred Stock on the applicable record date). The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions of shares of Common Stock or other Junior Stock in connection with the administration of any employee benefit plan in the ordinary course of business (including purchases to offset the Share Dilution Amount (as defined below) pursuant to a publicly announced repurchase plan) and consistent with past practice, provided that any purchases to offset the Share Dilution Amount shall in no event exceed the Share Dilution Amount; (ii) purchases or other acquisitions by a broker-dealer subsidiary of the Corporation solely for the purpose of market-making, stabilization or customer facilitation transactions in Junior Stock or Parity Stock in the ordinary course of its business; (iii) purchases by a broker dealer subsidiary of the Corporation of capital stock of the Corporation for resale pursuant to an offering by the Corporation of such capital stock underwritten by such broker-dealer subsidiary; (iv) any dividends or distributions of rights or Junior Stock in connection with a stockholders’ rights plan or any redemption or repurchase of rights pursuant to any stockholders’ rights plan; (v) the acquisition by the Corporation or any of its subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than the Corporation or any of its subsidiaries), including as trustees or custodians; and (vi) the exchange or conversion of Junior Stock for or into other Junior Stock or of Parity Stock for or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case, solely to the extent required pursuant to binding contractual agreements entered into prior to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common Stock. “Share Dilution Amount” means the increase in the number of diluted shares outstanding (determined in accordance with generally accepted accounting principles in the United States, and as measured from the date of the Corporation’s consolidated financial statements most recently filed with the Securities and Exchange Commission prior to the Original Issue Date) resulting from the grant, vesting or exercise of equity-based compensation to employees and equitably adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction.

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When dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend Period related to such Dividend Payment Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends declared on Designated Preferred Stock and all such Parity Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts of such dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per share on the shares of Designated Preferred Stock (including, if applicable as provided in Section 3(a) above, dividends on such amount) and all Parity Stock payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) (subject to their having been declared by the Board of Directors or a duly authorized committee of the Board of Directors out of legally available funds and including, in the case of Parity Stock that bears cumulative dividends, all accrued but unpaid dividends) bear to each other. If the Board of Directors or a duly authorized committee of the Board of Directors determines not to pay any dividend or a full dividend on a Dividend Payment Date, the Corporation will provide written notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date. Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors may be declared and paid on any securities, including Common Stock and other Junior Stock, from time to time out of any funds legally available for such payment, and holders of Designated Preferred Stock shall not be entitled to participate in any such dividends.

Section 4. Liquidation Rights.

(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Designated Preferred Stock shall be entitled to receive for each share of Designated Preferred Stock, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Corporation, subject to the rights of any creditors of the Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the Corporation ranking junior to Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount), whether or not declared, to the date of payment (such amounts collectively, the “Liquidation Preference”).

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(b) Partial Payment. If in any distribution described in Section 4(a) above the assets of the Corporation or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Corporation ranking equally with Designated Preferred Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.

(c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Corporation ranking equally with Designated Preferred Stock as to such distribution has been paid in full, the holders of other stock of the Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4, the merger or consolidation of the Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Designated Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.

Section 5. Redemption.

(a) Optional Redemption. Except as provided below, the Designated Preferred Stock may not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the date fixed for redemption.

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Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the date fixed for redemption; provided that (x) the Corporation (or any successor by Business Combination) has received aggregate gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount” as defined in the relevant certificate of designations for each other outstanding series of preferred stock of such successor that was originally issued to the United States Department of the Treasury (the “Successor Preferred Stock”) in connection with the Troubled Asset Relief Program Capital Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net cash proceeds received by the Corporation (or any successor by Business Combination) from such Qualified Equity Offerings (including Qualified Equity Offerings of such successor).

The redemption price for any shares of Designated Preferred Stock shall be payable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 3 above.

(b) No Sinking Fund. The Designated Preferred Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred Stock will have no right to require redemption or repurchase of any shares of Designated Preferred Stock.

(c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Designated Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders of Designated Preferred Stock at such time and in any manner permitted by such facility. Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price.

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(d) Partial Redemption. In case of any redemption of part of the shares of Designated Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of the holders of the shares called for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board of Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption price of such shares.

(f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but unissued shares of Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).

Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no right to exchange or convert such shares into any other securities.

Section 7. Voting Rights.

(a) General. The holders of Designated Preferred Stock shall not have any voting rights except as set forth below or as otherwise from time to time required by law.

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(b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly Dividend Periods or more, whether or not consecutive, the authorized number of directors of the Corporation shall automatically be increased by two and the holders of the Designated Preferred Stock shall have the right, with holders of shares of any one or more other classes or series of Voting Parity Stock outstanding at the time, voting together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill such newly created directorships at the Corporation’s next annual meeting of stockholders (or at a special meeting called for that purpose prior to such next annual meeting) and at each subsequent annual meeting of stockholders until all accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been declared and paid in full at which time such right shall terminate with respect to the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned; provided that it shall be a qualification for election for any Preferred Director that the election of such Preferred Director shall not cause the Corporation to violate any corporate governance requirements of any securities exchange or other trading facility on which securities of the Corporation may then be listed or traded that listed or traded companies must have a majority of independent directors. Upon any termination of the right of the holders of shares of Designated Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the Preferred Directors shall cease to be qualified as directors, the term of office of all Preferred Directors then in office shall terminate immediately and the authorized number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time, with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote of the holders a majority of the shares of Designated Preferred Stock at the time outstanding voting separately as a class together with the holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described above are then exercisable. If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred Director may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

(c) Class Voting Rights as to Particular Matters. So long as any shares of Designated Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Charter, the vote or consent of the holders of at least 66 2/3% of the shares of Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:

(i) Authorization of Senior Stock. Any amendment or alteration of the Certificate of Designations for the Designated Preferred Stock or the Charter to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of capital stock of the Corporation ranking senior to Designated Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;

(ii) Amendment of Designated Preferred Stock. Any amendment, alteration or repeal of any provision of the Certificate of Designations for the Designated Preferred Stock or the Charter (including, unless no vote on such merger or consolidation is required by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a merger, consolidation or otherwise) so as to adversely affect the rights, preferences, privileges or voting powers of the Designated Preferred Stock; or

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(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange or reclassification involving the Designated Preferred Stock, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in each case (x) the shares of Designated Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a whole;

provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred Stock necessary to satisfy preemptive or similar rights granted by the Corporation to other persons prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting powers, and shall not require the affirmative vote or consent of, the holders of outstanding shares of the Designated Preferred Stock.

(d) Changes after Provision for Redemption. No vote or consent of the holders of Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been deposited in trust for such redemption, in each case pursuant to Section 5 above.

(e) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Designated Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules of the Board of Directors or any duly authorized committee of the Board of Directors, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Charter, the Bylaws, and applicable law and the rules of any national securities exchange or other trading facility on which Designated Preferred Stock is listed or traded at the time.

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Section 8. Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for Designated Preferred Stock may deem and treat the record holder of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to the contrary.

Section 9. Notices. All notices or communications in respect of Designated Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Company or any similar facility, such notices may be given to the holders of Designated Preferred Stock in any manner permitted by such facility.

Section 10. No Preemptive Rights. No share of Designated Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated, issued or granted.

Section 11. Replacement Certificates. The Corporation shall replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Corporation. The Corporation shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Corporation of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by the Corporation.

Section 12. Other Rights. The shares of Designated Preferred Stock shall not have any rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Charter or as provided by applicable law.

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CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF INCORPORATION

OF

QCR HOLDINGS, INC.

QCR Holdings, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended (the DGCL”), does hereby certify that:

1. The name of the Company is QCR Holdings, Inc.

2. This Certificate of Amendment shall be effective upon filing with the office of the Secretary of State of the State of Delaware.

3. The Certificate of Incorporation of the Company is hereby amended by deleting the terms and provisions relating to the Series B Non-Cumulative Perpetual Preferred Stock, as set forth in that certain Designation of Rights, Preferences and Limitations of Series B Non-Cumulative Perpetual Preferred Stock of QCR Holdings, Inc., and replacing such terms and provisions with the following terms and provisions:

“Section 1. Issuance. The board of directors (the “Board”) of QCR Holdings, Inc. (the “Company”) has determined that 300 shares of the Company’s authorized and unissued preferred stock be identified as “Series B Non-Cumulative Perpetual Preferred Stock” and has authorized such shares for issuance at a price of $50,000 per share (the “Series B Preferred Stock”).

Section 2. Dividends. The holders of record of the then outstanding shares of Series B Preferred Stock shall be entitled to receive only when, as and if declared by the Board out of any funds legally available therefor, non-cumulative dividends paid quarterly on the issuance price of $50,000 per share based upon an annual rate equal to eight percent (8.00%). During any fiscal year of the Company, no dividends whatsoever, other than a dividend payable solely in the Company’s common stock, par value $1.00 per share (“Common Stock”), shall be paid or declared, and no distribution shall be made, on any Common Stock or any other series of preferred stock, subject to the immediately following paragraph in the case of the Series D Preferred Stock, which ranks pari passu with the Series B Preferred Stock, until dividends in the total amount due per share on the Series B Preferred Stock shall have been paid or declared and set apart during that year.

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If the Board declares dividends on any Common Stock or any series of preferred stock, and dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the benefit of the holders thereof on the applicable record date) in full on the Series B Preferred Stock and the Series D Preferred Stock, all dividends declared on the Series B Preferred Stock and Series D Preferred Stock shall be declared pro rata so that the respective amounts of such dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per share on the shares of the Series B Preferred Stock and Series D Preferred Stock payable bear to each other.

Section 3. Voting Rights. The holders of each share of Series B Preferred Stock shall not be entitled to vote, except as required by law.

Section 4. Redemption Rights.

(a) Holders’ Redemption Rights. No holders of any outstanding shares of Series B Preferred Stock shall have any right to require the redemption of any outstanding shares of Series B Preferred Stock.

(b) Company’s Redemption Rights. Subject to any necessary prior regulatory approvals, including, but not limited to, the approval of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System, and subject to the payment of all accrued and unpaid dividends on the Series D Preferred Stock, the Company shall have the right at any time after the first anniversary of the issuance of the Series B Preferred Stock to call and redeem all (but not less than all) of the then outstanding shares of Series B Preferred Stock at a price per share equal to: (i) the sum of (A) $50,000; plus (B) a premium in the amount of $4,000 multiplied by a fraction the numerator of which is the total number of calendar days the Series B Preferred Stock being redeemed has been outstanding and the denominator of which is 365; but (ii) less the aggregate amount of any dividends that have been paid on the Preferred Stock (the “Redemption Amount”).

(c) Redemption Notice. Not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date (as defined below), written notice (the “Redemption Notice”) shall be mailed, first-class postage prepaid, to the holders of the then outstanding shares of the Series B Preferred Stock at their respective addresses last shown on the records of the Company. The Redemption Notice shall state: (i) the number of shares being redeemed; (ii) the Redemption Date and Redemption Amount; and (iii) that each holder is to surrender to the Company, in the manner and at the place designated in the Redemption Notice, the certificates representing the shares of Series B Preferred Stock to be redeemed.

(d) Surrender of Certificates. On or before the Redemption Date, the holders of shares of Series B Preferred Stock being redeemed shall surrender the certificate or certificates representing such shares to the Company, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Amount for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be cancelled and retired.

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(e) Termination of Rights. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Amount is paid, then all rights with respect to the outstanding shares of Series B Preferred Stock shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Amount upon surrender of their certificate or certificates therefor.

Section 5. Liquidation. Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the Series B Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, an amount per share equal to the Redemption Amount as of the effective date of such dissolution, liquidation or winding up of the Company, before any payment or distribution shall be made on the Common Stock or the Series C Preferred Stock. If in any distribution described in this Section 5 the assets of the Company or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of the Series B Preferred Stock and corresponding amounts payable with respect of any other stock of the Company ranking equally with Series B Preferred Stock, including the Series D Preferred Stock, as to such distribution, holders of the Series B Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled. After the payment to the holders of the shares of the Series B Preferred Stock of the full amounts provided for in this Section, the holders of the Series B Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.”

4. The Certificate of Incorporation of the Company is hereby amended by deleting the terms and provisions relating to the Series C Non-Cumulative Perpetual Preferred Stock, as set forth in that certain Designation of Rights, Preferences and Limitations of Series C Non-Cumulative Perpetual Preferred Stock of QCR Holdings, Inc., and replacing such terms and provisions with the following terms and provisions:

“Section 1. Issuance. The board of directors (the “Board”) of QCR Holdings, Inc. (the “Company”) has determined that 300 shares of the Company’s authorized and unissued preferred stock be identified as “Series C Non-Cumulative Perpetual Preferred Stock” and has authorized such shares for issuance at a price of $25,000 per share (the “Series C Preferred Stock”).

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Section 2. Dividends. The holders of record of the then outstanding shares of Series C Preferred Stock shall be entitled to receive only when, as and if declared by the Board out of any funds legally available therefor, non-cumulative dividends paid quarterly on the issuance price of $25,000 per share based upon an annual rate equal to nine and one-half percent (9.5%). During any fiscal year of the Company, no dividends whatsoever, other than a dividend payable solely in the Company’s common stock, par value $1.00 per share (“Common Stock”), shall be paid or declared, and no distribution shall be made, on any Common Stock or any other of series of preferred stock, with the exception of distributions made to the Series B Preferred Stock and Series D Preferred Stock, until dividends in the total amount due per share on the Series C Preferred Stock shall have been paid or declared and set apart during that year.

Section 3. Voting Rights. The holders of each share of Series C Preferred Stock shall not be entitled to vote, except as required by law.

Section 4. Redemption Rights.

(a) Holders’ Redemption Rights. No holders of any outstanding shares of Series C Preferred Stock shall have any right to require the redemption of any outstanding shares of Series C Preferred Stock.

(b) Company’s Redemption Rights. Subject to any necessary prior regulatory approvals, including, but not limited to, the approval of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System, and subject to the payment of all accrued and unpaid dividends on the Series D Preferred Stock, the Company shall have the right at any time after the first anniversary of the issuance of the Series C Preferred Stock to call and redeem all (but not less than all) of the then outstanding shares of Series C Preferred Stock at a price per share equal to: (i) the sum of (A) $25,000; plus (B) a premium in the amount of $2,375 multiplied by a fraction the numerator of which is the total number of calendar days the Series C Preferred Stock being redeemed has been outstanding and the denominator of which is 365; but (ii) less the aggregate amount of any dividends that have been paid on the Preferred Stock (the “Redemption Amount”).

(c) Redemption Notice. Not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date (as defined below), written notice (the “Redemption Notice”) shall be mailed, first-class postage prepaid, to the holders of the then outstanding shares of the Series C Preferred Stock at their respective addresses last shown on the records of the Company. The Redemption Notice shall state: (i) the number of shares being redeemed; (ii) the Redemption Date and Redemption Amount; and (iii) that each holder is to surrender to the Company, in the manner and at the place designated in the Redemption Notice, the certificates representing the shares of Series C Preferred Stock to be redeemed.

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(d) Surrender of Certificates. On or before the Redemption Date, the holders of shares of Series C Preferred Stock being redeemed shall surrender the certificate or certificates representing such shares to the Company, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Amount for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be cancelled and retired.

(e) Termination of Rights. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Amount is paid, then all rights with respect to the outstanding shares of Series C Preferred Stock shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Amount upon surrender of their certificate or certificates therefor.

Section 5. Liquidation. Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the Series C Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, an amount per share equal to the Redemption Amount as of the effective date of such dissolution, liquidation or winding up of the Company, before any payment or distribution shall be made on the Common Stock, but after the amounts that are due to paid on the Series B Preferred Stock and the Series D Preferred Stock. In the event the assets of the Company available for distribution to the holders of shares of the Series C Preferred Stock upon any dissolution, liquidation or winding up of the Company shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to this Section, then all of the assets of the Company to be distributed shall be distributed ratably to the holders of Series C Preferred Stock. After the payment to the holders of the shares of the Series C Preferred Stock of the full amounts provided for in this Section, the holders of Series C Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.”

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5. This Certificate of Amendment was approved by the board of directors of the Company on November 10, 2008, recommended by the board to the Company’s stockholders in a proxy statement dated January 7, 2009, submitted to the Company’s stockholders for their approval at a duly called special meeting of the Company’s stockholders held upon notice in accordance with Section 222 of the DGCL and adopted by the stockholders of the corporation, including the holders of the outstanding shares of Series B Preferred Stock and Series C Preferred Stock, each voting together as a separate class, at a special meeting of stockholders held on February 5, 2009, all in accordance with Section 242 of the DGCL.

Dated as of the 10th day of February, 2009.

QCR HOLDINGS, INC.
By:	/s/ Douglas M. Hultquist
	Name:	Douglas M. Hultquist
	Title:	President and Chief Executive Office Officer

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CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

QCR HOLDINGS, INC.

QCR Holdings, Inc. (hereinafter called the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended, does hereby certify that:

1.           The name of the Corporation is: QCR Holdings, Inc.

2. The first sentence of Article IV of the Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

The total number of shares of capital stock which the corporation shall have authority to issue is 20,000,000 shares of Common Stock, par value $1.00 per share, and 250,000 shares of Preferred Stock, par value $1.00 per share.

3. The first sentence of Article XII of the Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows:

The number of directors constituting the entire board of directors shall not be less than three nor more than fifteen, as fixed from time to time by resolution of not less than 80% of the number of directors which immediately prior to such proposed change had been fixed, in the manner prescribed herein, by the board of directors of the corporation, provided, however, that the number of directors shall not be reduced as to shorten the term of any director at the time in office, and provided further, that the number of directors constituting the entire board of directors shall be thirteen until otherwise fixed as described immediately above.

4. The amendment to the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

Dated as of the 5th day of May, 2010.

QCR HOLDINGS, INC.

By:   __/s/_Douglas M. Hultquist____

Douglas M. Hultquist

President and Chief Executive Officer

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Certificate of Designations

of Series of Preferred Stock

QCR Holdings, Inc.

Statement of Designation

of

Rights, Preferences And Limitations

of

Series E Non-Cumulative Convertible Perpetual Preferred Stock

Pursuant to Section 151 of the General Corporation Law of

the State of Delaware

The undersigned, Todd A. Gipple, the Executive Vice President, Chief Operating Officer and Chief Financial Officer of QCR Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Company”), Does Hereby Certify that, pursuant to the authority vested in the Company’s board of directors (the “Board”), in accordance with the provisions of the Company’s certificate of incorporation, as amended, the following resolutions establishing a series of 25,000 shares of preferred stock designated as “Series E Non-Cumulative Convertible Perpetual Preferred Stock” pursuant to Section 151 of the General Corporation Law of the State of Delaware were duly adopted by the Board on March 19, 2010;

Resolved, that subject to the filing of a Certificate of Designations with the Delaware Secretary of State, the Series E Non-Cumulative Convertible Perpetual Preferred Stock be and hereby is created, and that the voting rights, designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions, of the shares of such series, are as set forth in the attached Exhibit A.

Resolved, that the Chief Executive Officer, the Chief Operating Officer or other proper officers of the Company be, and each of them hereby is, authorized to prepare, execute and file with the Delaware Secretary of State in the manner required by law, such Certificate of Designations, and to take all other actions which such officers deem necessary or advisable to carry into effect the foregoing resolution.

In Witness Whereof, I have subscribed my name this 25th day of June, 2010.

	QCR Holdings, Inc.
Date	/s/ Todd A. Gipple
	Todd A. Gipple
	Executive Vice President, Chief Operating Officer and Chief Financial Officer

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Exhibit A

Designation

of

Rights, Preferences And Limitations

of

Series E Non-Cumulative Convertible Perpetual Preferred Stock

of

QCR Holdings, Inc.

Section 1.                      Issuance.  The board of directors (the “Board”) of QCR Holdings, Inc. (the “Company”) has determined that 25,000 shares of the Company’s authorized and unissued preferred stock, par value $1.00 per share, be identified as “Series E Non-Cumulative Convertible Perpetual Preferred Stock” and has authorized such shares for issuance at a price of $1,000 per share (the “Series E Preferred Stock”).

Section 2.                      Dividends.  The holders of record of the then outstanding shares of Series E Preferred Stock shall be entitled to receive only when, as and if declared by the Board out of any funds legally available therefor, non-cumulative dividends paid quarterly on the issuance price of $1,000 per share based upon an annual rate equal to seven percent (7.00%).  During any fiscal year of the Company, no dividends whatsoever, other than a dividend payable solely in the Company’s common stock, par value $1.00 per share (“Common Stock”), shall be paid or declared, and no distribution shall be made, on any Common Stock or any other series of preferred stock, subject to the immediately following paragraph in the case of any preferred stock which ranks pari passu with the Series E Preferred Stock, including the Series D Preferred Stock, until dividends in the total amount due per share on the Series E Preferred Stock shall have been paid or declared and set apart during that year.

If the Board declares dividends on any Common Stock or any series of preferred stock, and dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the benefit of the holders thereof on the applicable record date) in full on the Series E Preferred Stock and any preferred stock which ranks pari passu with the Series E Preferred Stock, including the Series D Preferred Stock, all dividends declared on the Series E Preferred Stock and the preferred stock ranking pari passu with the Series E Preferred Stock, including the Series D Preferred Stock, shall be declared pro rata so that the respective amounts of such dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per share on the shares of the Series E Preferred Stock and the preferred stock ranking pari passu with the Series E Preferred Stock, including the Series D Preferred Stock payable bear to each other.

Section 3.                      Voting Rights.  The holders of each share of Series E Preferred Stock shall not be entitled to vote, except as required by law.

Section 4.                      Redemption Rights.

(a)            Holders’ Redemption Rights.  No holders of any outstanding shares of Series E Preferred Stock shall have any right to require the redemption of any outstanding shares of Series E Preferred Stock.

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(b)            Company’s Redemption Rights.  Subject to Section 5 and any necessary prior regulatory approvals, including, but not limited to, the approval of the Board of Governors of the Federal Reserve System, the Company shall have the right at any time after the fifth anniversary of the date on which the shares of Series E Preferred Stock are originally issued (the “Original Issue Date”) to call and redeem all (but not less than all) of the then outstanding shares of Series E Preferred Stock at a price per share equal to: (i) $1,000; plus (ii) any declared but unpaid dividends for the then-current dividend period, if any (the “Redemption Amount”).

Section 5.                      Conversion.  The holders of Series E Preferred Stock shall have the following conversion rights and be subject to the following provisions with respect to the conversion of Series E Preferred Stock:

(a)            Voluntary Conversion.  Each share of Series E Preferred Stock shall be convertible into fully paid and nonassessable shares of Common Stock, at the Conversion Price (as defined below) in effect at the time of conversion determined as provided herein, at the option of the holder thereof, exercisable on at least ten (10) days’ prior written notice to the Company, at any time on or after the Original Issue Date, for such share, at the office of the Company or any transfer agent for the Series E Preferred Stock or Common Stock (a “Voluntary Conversion”).  Each share of Series E Preferred Stock shall be convertible into the number of shares of Common Stock that results from dividing $1,000 by the Conversion Price per share in effect at the time of conversion for each share of Series E Preferred Stock being converted.  The conversion price per share for the Series E Preferred Stock at the Original Issue Date shall be $12.15 and shall be subject to adjustment from time to time as provided herein (the “Conversion Price”).

(b)            Procedures for Voluntary Conversion.

(i)            Before any holder of Series E Preferred Stock shall be entitled in a Voluntary Conversion to convert the same into shares of Common Stock, he or she shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent of the Series E Preferred Stock or Common Stock, and shall give at least ten (10) days’ prior written notice by mail, first-class postage prepaid, to the Company at such office that he or she elects to convert the same and shall state therein the number of shares of Series E Preferred Stock being converted and the name or names in which the certificate or certificates for shares of Common Stock are to be issued.  Thereupon the Company shall promptly issue and deliver at such office to such holder of Series E Preferred Stock or to the nominee or nominees of such holder a certificate or certificates for the number of shares of Common Stock to which he or she shall be entitled.

(ii)            Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series E Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.  A holder of Series E Preferred Stock who surrenders shares of Series E Preferred Stock for conversion shall be entitled to receive from the Company on the date of such surrender an amount in cash equal to any previously declared, but unpaid, dividends on such surrendered shares of Series E Preferred Stock, but any future dividends with respect to the surrendered shares of Series E Preferred Stock shall cease to accrue after such surrender and all rights with respect to such shares shall forthwith after such surrender terminate.

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(c)            Mandatory Conversion.  At any time on or after the third anniversary of the Original Issue Date, if the closing market price of the Common Stock equals or exceeds $17.22 for at least twenty (20) trading days in a period of thirty (30) consecutive trading days and the Company has declared or paid dividends on the Series E Preferred Stock for four consecutive calendar quarters, the Company shall have the right to require the conversion of all (but not less than all) of the outstanding shares of Series E Preferred Stock into shares of Common Stock on the same terms and conditions as if such conversion were effected by the holders of the Series E Preferred Stock as a Voluntary Conversion (a “Mandatory Conversion”).

(d)           Procedures for Mandatory Conversion.

(i)           Any call by the Company for Mandatory Conversion shall be evidenced by a written notice (the “Mandatory Conversion Notice”) mailed, first class postage prepaid, to the holders of the shares of the Series E Preferred Stock at their addresses last shown on the records of the Company.  The Mandatory Conversion Notice shall designate a specific date (the “Tender Date”) on or before which holders are to surrender to the Company at its office the certificates representing the outstanding shares of Series E Preferred Stock.

(ii)           On or before the Tender Date, all the holders of shares of Series E Preferred Stock shall surrender the certificate or certificates representing such shares to the Company, in the manner and at the place designated in the Mandatory Conversion Notice, and as soon as practicable after the Tender Date, certificates for the number of shares of Common Stock into which the Series E Preferred Stock was converted shall be issued to the former holders of Series E Preferred Stock.  Each surrendered certificate formerly representing Series E Preferred Stock shall be cancelled and retired.

(iii)           If the Mandatory Conversion Notice shall have been duly given, then after the Tender Date, all rights with respect to the Series E Preferred Stock shall terminate, except only the right of the holders to receive the corresponding shares of Common Stock.  After the Tender Date, all former holders of Series E Preferred Stock shall be deemed to be the holders of the number of shares of Common Stock into which the shares of Series E Preferred Stock have been converted, provided, however, that no former holder of Series E Preferred Stock shall be entitled to receive any dividends or other distributions with respect to the Common Stock into which the Series E Preferred Stock was converted until such former holder surrenders the certificates representing the shares of Series E Preferred Stock formerly held by him or her.

(e)           Adjustment for Stock Splits, Subdivisions, Reclassifications or Combinations.  If the Company shall: (a) declare and pay a dividend or make a distribution on its Common Stock in shares of Common Stock; or (b) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be shall be proportionately decreased.  If the Company shall combine or reclassify the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect at the time of the effective date of such subdivision, combination or reclassification shall be shall be proportionately increased.

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(f)            Adjustment for Rights Offerings.If the Company, at any time within the first anniversary of the Original Issue Date, shall issue rights to all holders of the Common Stock entitling them to subscribe for additional shares of Common Stock, the Conversion Price shall be proportionately decreased based on the dilution of tangible book value of the Company resulting from such rights offering.

(g)           Reorganization, Mergers, Consolidations or Sales of Assets.  Subject to the provisions above with respect to a Mandatory Conversion, if at any time or from time to time there shall be a capital reorganization of the Common Stock (other than a subdivision, combination or reclassification provided for in Section 5(e)) or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the holders of the Series E Preferred Stock shall thereafter be entitled to receive upon conversion of the Series E Preferred Stock, the number of shares of stock or other securities or property of the Company, or of the successor Company resulting from such merger or consolidation or sale, to which a holder of that number of shares of Common Stock deliverable upon conversion of the Series E Preferred Stock would have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 5 with respect to the rights of the holders of the Series E Preferred Stock after the reorganization, merger, consolidation or sale to the end that the provisions of this Section 5 (including adjustment of the Conversion Price then in effect and the number of shares issuable upon conversion of the Series E Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable.

(h)           Fractional Shares.  No fractional shares of Common Stock shall be issued upon conversion of shares of Series E Preferred Stock.  In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of the Company’s Common Stock on the date of conversion, as determined in good faith by the Company’s Board of Directors.  Whether or not the fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Series E Preferred Stock the holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.

(i)            Reservation of Stock Issuable Upon Conversion.  The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series E Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series E Preferred Stock.  As a condition precedent to the taking of any action that would cause an adjustment to the Conversion Price, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient in order that it may validly and legally issue the shares of its Common Stock issuable based upon such adjusted Conversion Price.

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Section 6.                      Liquidation.  Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the Series E Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, an amount per share equal to the Redemption Amount as of the effective date of such dissolution, liquidation or winding up of the Company, before any payment or distribution shall be made on the Common Stock or preferred stock ranking junior to the Series E Preferred Stock. If in any distribution described in this Section 6 the assets of the Company or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of the Series E Preferred Stock and corresponding amounts payable with respect of any other stock of the Company ranking pari passu with Series E Preferred Stock, including the Series D Preferred Stock, as to such distribution, holders of the Series E Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.  After the payment to the holders of the shares of the Series E Preferred Stock of the full amounts provided for in this Section 6, the holders of the Series E Preferred Stock as such shall have no right or claim to any of the remaining assets of the Company.

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CERTIFICATE OF DESIGNATION

OF

SENIOR NON-CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES F

OF

QCR HOLDINGS, INC.

QCR Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Issuer”), in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, does hereby certify:

The board of directors of the Issuer (the “Board of Directors”) or an applicable committee of the Board of Directors, in accordance with the certificate of incorporation and bylaws of the Issuer and applicable law, adopted the following resolution on September 13, 2011 creating a series of 40,090 shares of Preferred Stock of the Issuer designated as “Senior Non-Cumulative Perpetual Preferred Stock, Series F”.

RESOLVED, that pursuant to the provisions of the certificate of incorporation and the bylaws of the Issuer and applicable law, a series of Preferred Stock, par value $1.00 per share, of the Issuer be and hereby is created, and that the designation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of such series, are as follows:

Part 1.Designation and Number of Shares.  There is hereby created out of the authorized and unissued shares of preferred stock of the Issuer a series of preferred stock designated as the “Senior Non-Cumulative Perpetual Preferred Stock, Series F” (the “Designated Preferred Stock”).  The authorized number of shares of Designated Preferred Stock shall be 40,090.

Part 2.Standard Provisions.  The Standard Provisions contained in Schedule A attached hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of this Certificate of Designation to the same extent as if such provisions had been set forth in full herein.

Part 3.Definitions.  The following terms are used in this Certificate of Designation (including the Standard Provisions in Schedule A hereto) as defined below:

(a)“Common Stock” means the common stock, par value $1.00 per share, of the Issuer.

(b)“Definitive Agreement” means that certain Securities Purchase Agreement by and between Issuerand Treasury, dated as of the Signing Date.

(c) “Junior Stock” means the Common Stock, the Series B Junior Participating Preferred Stock and any other class or series of stock of the Issuer the terms of

56

which expressly provide that it ranks junior to Designated Preferred Stock as to dividend and redemption rights and/or as to rights on liquidation, dissolution or winding up of the Issuer.

(d)“Liquidation Amount” means $1,000 per share of Designated Preferred Stock.

(e)“Minimum Amount” means (i) the amount equal to twenty-five percent (25%) of the aggregate Liquidation Amount of Designated Preferred Stock issued on the Original Issue Date or (ii) all of the outstanding Designated Preferred Stock, if the aggregate liquidation preference of the outstanding Designated Preferred Stock is less than the amount set forth in the preceding clause (i).

(f)“Parity Stock” means any class or series of stock of the Issuer (other than Designated Preferred Stock) the terms of which do not expressly provide that such class or series will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Issuer (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).  Without limiting the foregoing, Parity Stock shall include the Issuer’s Fixed Rate Cumulative Perpetual Preferred Stock, Series D, and the Series E Non-Cumulative Convertible Perpetual Preferred Stock.

(g)“Signing Date” means September 15, 2011.

(h)“Treasury” means the United States Department of the Treasury and any successor in interest thereto.

Part 4.Certain Voting Matters.  Holders of shares of Designated Preferred Stock will be entitled to one vote for each such share on any matter on which holders of Designated Preferred Stock are entitled to vote, including any action by written consent.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, QCR Holdings, Inc. has caused this Certificate of Designation to be signed by Todd A. Gipple, its Executive Vice President, Chief Operating Officer and Chief Financial Officer, this 13th day of September, 2011.

QCR Holdings, Inc.
By:	/s/ Todd A. Gipple
	Name:	Todd A. Gipple
	Title:	Executive Vice President,
		Chief Operating Officer, and Chief Financial Officer

58

Schedule A

STANDARD PROVISIONS

Section 1.General Matters.  Each share of Designated Preferred Stock shall be identical in all respects to every other share of Designated Preferred Stock.  The Designated Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard Provisions that form a part of the Certificate of Designation.  The Designated Preferred Stock shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the payment of dividends and the distribution of assets in the event of any dissolution, liquidation or winding up of the Issuer, as set forth below.

Section 2.Standard Definitions.  As used herein with respect to Designated Preferred Stock:

(a)“Acquiror,” in any Holding Company Transaction, means the surviving or resulting entity or its ultimate parent in the case of a merger or consolidation or the transferee in the case of a sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of the consolidated assets of the Issuer and its subsidiaries, taken as a whole.

(b)“Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly through one or more intermediaries, of the power to cause the direction of management and/or policies of such person, whether through the ownership of voting securities by contract or otherwise.

(c)“Applicable Dividend Rate” has the meaning set forth in Section 3(a).

(d)“Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.

(e)“Bank Holding Company” means a company registered as such with the Board of Governors of the Federal Reserve System pursuant to 12 U.S.C. §1842 and the regulations of the Board of Governors of the Federal Reserve System thereunder.

(f)“Baseline” means the “Initial Small Business Lending Baseline” set forth on the Initial Supplemental Report (as defined in the Definitive Agreement), subject to adjustment pursuant to Section 3(a).

(g)“Business Combination” means a merger, consolidation, statutory share exchange or similar transaction that requires the approval of the Issuer’s stockholders.

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(h)“Business Day” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York or the District of Columbia generally are authorized or required by law or other governmental actions to close.

(i)“Bylaws” means the bylaws of the Issuer, as they may be amended from time to time.

(j)“Call Report” has the meaning set forth in the Definitive Agreement.

(k)“Certificate of Designation” means the Certificate of Designation or comparable instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a part, as it may be amended from time to time.

(l)“Charge-Offs” means the net amount of loans charged off by the Issuer or, if the Issuer is a Bank Holding Company or a Savings and Loan Holding Company, by the IDI Subsidiary(ies) during quarters that begin on or after the Signing Date, determined as follows:

(i)if the Issuer or the applicable IDI Subsidiary is a bank, by subtracting (A) the aggregate dollar amount of recoveries reflected on line RIAD4605of its Call Reports for such quarters from (B) the aggregate dollar amount of charge-offs reflected on line RIAD4635 of its Call Reports for such quarters (without duplication as a result of such dollar amounts being reported on a year-to-date basis); or

(ii)if the Issuer or the applicable IDI Subsidiary is a thrift, by subtracting (A) the sum of the aggregate dollar amount of recoveries reflected on line VA140 of its Call Reports for such quarters and the aggregate dollar amount of adjustments reflected on line VA150 of its Call Reports for such quarters from (B) the aggregate dollar amount of charge-offs reflected on lineVA160 of its Call Reports for such quarters.

(m)“Charter” means the Issuer’s certificate or articles of incorporation, articles of association, or similar organizational document.

(n)“CPP Lending Incentive Fee” has the meaning set forth in Section 3(e).

(o)“Current Period” has the meaning set forth in Section 3(a)(i)(2).

(p)“Dividend Payment Date” means January 1, April 1, July 1, and October 1 of each year.

(q)“Dividend Period” means the period from and including any Dividend Payment Date to, but excluding, the next Dividend Payment Date; provided, however, the initial Dividend Period shall be the period from and including the Original Issue Date to, but excluding, the next Dividend Payment Date (the “Initial Dividend Period”).

(r)“Dividend Record Date” has the meaning set forth in Section 3(b).

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(s)“Dividend Reference Period” has the meaning set forth in Section 3(a)(i)(2).

(t) “GAAP” means generally accepted accounting principles in the United States.

(u)“Holding Company Preferred Stock” has the meaning set forth in Section 7(c)(v).

(v)“Holding Company Transaction” means the occurrence of (a) any transaction (including, without limitation, any acquisition, merger or consolidation) the result of which is that a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, (i) becomes the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under that Act, of common equity of the Issuer representing more than 50% of the voting power of the outstanding Common Stock or (ii) is otherwise required to consolidate the Issuer for purposes of generally accepted accounting principles in the United States, or (b) any consolidation or merger of the Issuer or similar transaction or any sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of the consolidated assets of the Issuer and its subsidiaries, taken as a whole, to any Person other than one of the Issuer’s subsidiaries; provided that, in the case of either clause (a) or (b), the Issuer or the Acquiror is or becomes a Bank Holding Company or Savings and Loan Holding Company.

(w)“IDI Subsidiary” means any Issuer Subsidiary that is an insured depository institution.

(x)“Increase in QSBL” means:

(i)with respect to the first (1st) Dividend Period, the difference obtained by subtracting (A) the Baseline from (B) QSBL set forth in the Initial Supplemental Report (as defined in the Definitive Agreement); and

(ii)with respect to each subsequent Dividend Period, the difference obtained by subtracting (A) the Baseline from (B) QSBL for the Dividend Reference Period for the Current Period.

(y)“Initial Dividend Period” has the meaning set forth in the definition of “Dividend Period”.

(z)“Issuer Subsidiary” means any subsidiary of the Issuer.

(aa)“Liquidation Preference” has the meaning set forth in Section 4(a).

(bb)“Non-Qualifying Portion Percentage” means, with respect to any particular Dividend Period, the percentage obtained by subtracting the Qualifying Portion Percentage from one (1).

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(cc)“Original Issue Date” means the date on which shares of Designated Preferred Stock are first issued.

(dd)“Percentage Change in QSBL” has the meaning set forth in Section 3(a)(ii).

(ee)“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

(ff)“Preferred Director” has the meaning set forth in Section 7(c).

(gg)“Preferred Stock” means any and all series of preferred stock of the Issuer, including the Designated Preferred Stock.

(hh)“Previously Acquired Preferred Shares” has the meaning set forth in the Definitive Agreement.

(ii) “Private Capital” means, if the Issuer is Matching Private Investment Supported (as defined in the Definitive Agreement), the equity capital received by the Issuer or the applicable Affiliate of the Issuer from one or more non-governmental investors in accordance with Section 1.3(m) of the Definitive Agreement.

(jj)“Publicly-traded” means a company that (i) has a class of securities that is traded on a national securities exchange and (ii) is required to file periodic reports with either the Securities and Exchange Commission or its primary federal bank regulator.

(kk)“Qualified Small Business Lending” or “QSBL” means, with respect to any particular Dividend Period, the “Quarter-End Adjusted Qualified Small Business Lending” for such Dividend Period set forth in the applicable Supplemental Report.

(ll)“Qualifying Portion Percentage” means, with respect to any particular Dividend Period, the percentage obtained by dividing (i) the Increase in QSBL for such Dividend Period by (ii) the aggregate Liquidation Amount of then-outstanding Designated Preferred Stock.

(mm)“Savings and Loan Holding Company” means a company registered as such with the Office of Thrift Supervision pursuant to 12 U.S.C. §1467a(b) and the regulations of the Office of Thrift Supervision promulgated thereunder.

(nn)“Share Dilution Amount” means the increase in the number of diluted shares outstanding (determined in accordance with GAAP applied on a consistent basis, and as measured from the date of the Issuer’s most recent consolidated financial statements prior to the Signing Date) resulting from the grant, vesting or exercise of equity-based compensation to employees and equitably adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction.

(oo)“Signing Date Tier 1 Capital Amount” means $121,764,000.

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(pp) “Standard Provisions” mean these Standard Provisions that form a part of the Certificate of Designation relating to the Designated Preferred Stock.

(qq)“Supplemental Report” means a Supplemental Report delivered by the Issuer to Treasury pursuant to the Definitive Agreement.

(rr) “Tier 1 Dividend Threshold” means, as of any particular date, the result of the following formula:

( ( A + B – C ) * 0.9 ) – D
where:
A =	Signing Date Tier 1 Capital Amount;
B =	the aggregate Liquidation Amount of the Designated Preferred Stock issued to Treasury;
C =	the aggregate amount of Charge-Offs since the Signing Date; and
D =	(i) beginning on the first day of the eleventh (11th) Dividend Period, the amount equal to ten percent (10%) of the aggregate Liquidation Amount of the Designated Preferred Stock issued to Treasury as of the Effective Date (without regard to any redemptions of Designated Preferred Stock that may have occurred thereafter) for every one percent (1%) of positive Percentage Change in Qualified Small Business Lending between the ninth (9th) Dividend Period and the Baseline; and
	(ii) zero (0) at all other times.

(ss) “Voting Parity Stock” means, with regard to any matter as to which the holders of Designated Preferred Stock are entitled to vote as specified in Section 7(d) of these Standard Provisions that form a part of the Certificate of Designation, any and all series of Parity Stock upon which like voting rights have been conferred and are exercisable with respect to such matter.

Section 3.Dividends.

(a)Rate.

(i)The “Applicable Dividend Rate” shall be determined as follows:

(1)   With respect to the Initial Dividend Period, the Applicable Dividend Rate shall be five percent (5.0000000%).

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(2)   With respect to each of the second (2nd) through the tenth (10th) Dividend Periods, inclusive (in each case, the “Current Period”), the Applicable Dividend Rate shall be:

(A)(x) the applicable rate set forth in column “A” of the table in Section 3(a)(iii), based on the Percentage Change in QSBL between the Dividend Period that was two Dividend Periods prior to the Current Period (the “Dividend Reference Period”) and the Baseline, multiplied by (y) the Qualifying Portion Percentage; plus

(B)(x) five percent (5%) multiplied by (y) the Non-Qualifying Portion Percentage.

In each such case, the Applicable Dividend Rate shall be determined at the time the Issuer delivers a complete and accurate Supplemental Report to Treasury with respect to the Dividend Reference Period.

(3)   With respect to the eleventh (11th) through the eighteenth (18th) Dividend Periods, inclusive, and that portion of the nineteenth (19th) Dividend Period prior to, but not including, the four and one half (4½) year anniversary of the Original Issue Date, the Applicable Dividend Rate shall be:

(A)(x) the applicable rate set forth in column “B” of the table in Section 3(a)(iii), based on the Percentage Change in QSBL between the ninth (9th) Dividend Period and the Baseline, multiplied by (y) the Qualifying Portion Percentage, calculated as of the last day of the ninth (9th) Dividend Period; plus

(B)(x) five percent (5%) multiplied by (y) the Non-Qualifying Portion Percentage, calculated as of the last day of the ninth (9th) Dividend Period.

In such case, the Applicable Dividend Rate shall be determined at the time the Issuer delivers a complete and accurate Supplemental Report to Treasury with respect to the ninth (9th) Dividend Period.

(4)   With respect to (A) that portion of the nineteenth (19th) Dividend Period beginning on the four and one half (4½) year anniversary of the Original Issue Date and (B) all Dividend Periods thereafter, the Applicable Dividend Rate shall be nine percent (9%).

(5)   Notwithstanding anything herein to the contrary, if the Issuer fails to submit a Supplemental Report that is due during any of the second (2nd) through tenth (10th)

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Dividend Periods on or before the sixtieth (60th) day of such Dividend Period, the Issuer’s QSBL for the Dividend Period that would have been covered by such Supplemental Report shall be zero (0) for purposes hereof.

(6)   Notwithstanding anything herein to the contrary, but subject to Section 3(a)(i)(5) above, if the Issuer fails to submit the Supplemental Report that is due during the tenth (10th) Dividend Period, the Issuer’s QSBL for the shall be zero (0) for purposes of calculating the Applicable Dividend Rate pursuant to Section 3(a)(i)(3) and (4).  The Applicable Dividend Rate shall be re-determined effective as of the first day of the calendar quarter following the date such failure is remedied, provided it is remedied prior to the four and one half (4½) anniversary of the Original Issue Date.

(7)   Notwithstanding anything herein to the contrary, if the Issuer fails to submit any of the certificates required by Sections 3.1(d)(ii) or 3.1(d)(iii) of the Definitive Agreement when and as required thereby, the Issuer’s QSBL for the shall be zero (0) for purposes of calculating the Applicable Dividend Rate pursuant to Section 3(a)(i)(2) or (3) above until such failure is remedied.

(ii)The “Percentage Change in Qualified Lending” between any given Dividend Period and the Baseline shall be the result of the following formula, expressed as a percentage:

(	( QSBL for the Dividend Period – Baseline )	)	x  100
	Baseline

(iii)The following table shall be used for determining the Applicable Dividend Rate:

	The Applicable Dividend Rate shall be:
If the Percentage Change in Qualified Lending is:	Column “A” (each of the 2nd – 10th Dividend Periods)	Column “B” (11th – 18th, and the first part of the 19th, Dividend Periods)
0% or less	5%	7%
More than 0%, but less than 2.5%	5%	5%
2.5% or more, but less than 5%	4%	4%
5% or more, but less than 7.5%	3%	3%
7.5% or more, but less than 10%	2%	2%
10% or more	1%	1%

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(iv)If the Issuer consummates a Business Combination, a purchase of loans or a purchase of participations in loans and the Designated Preferred Stock remains outstanding thereafter, then the Baseline shall thereafter be the “Quarter-End Adjusted Small Business Lending Baseline” set forth on the Quarterly Supplemental Report (as defined in the Definitive Agreement).

(b)Payment.  Holders of Designated Preferred Stock shall be entitled to receive, on each share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly authorized committee of the Board of Directors, but only out of assets legally available therefor, non-cumulative cash dividends with respect to:

(i)each Dividend Period (other than the Initial Dividend Period) at a rate equal to one-fourth (¼) of the Applicable Dividend Rate with respect to each Dividend Period on the Liquidation Amount per share of Designated Preferred Stock, and no more, payable quarterly in arrears on each Dividend Payment Date; and

(ii)the Initial Dividend Period, on the first such Dividend Payment Date to occur at least twenty (20) calendar days after the Original Issue Date, an amount equal to (A) the Applicable Dividend Rate with respect to the Initial Dividend Period multiplied by (B) the number of days from the Original Issue Date to the last day of the Initial Dividend Period (inclusive) divided by 360.

In the event that any Dividend Payment Date would otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be postponed to the next day that is a Business Day and no additional dividends will accrue as a result of that postponement.  For avoidance of doubt, “payable quarterly in arrears” means that, with respect to any particular Dividend Period, dividends begin accruing on the first day of such Dividend Period and are payable on the first day of the next Dividend Period.

The amount of dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of four 90-day quarters, and actual days elapsed over a 90-day quarter.

Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be payable to holders of record of Designated Preferred Stock as they appear on the stock register of the Issuer on the applicable record date, which shall be the 15th calendar day immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).  Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

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Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (if any) declared and payable on Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the Certificate of Designation).

(c)Non-Cumulative.  Dividends on shares of Designated Preferred Stock shall be non-cumulative.  If the Board of Directors or any duly authorized committee of the Board of Directors does not declare a dividend on the Designated Preferred Stock in respect of any Dividend Period:

(i)the holders of Designated Preferred Stock shall have no right to receive any dividend for such Dividend Period, and the Issuer shall have no obligation to pay a dividend for such Dividend Period, whether or not dividends are declared for any subsequent Dividend Period with respect to the Designated Preferred Stock; and

(ii)the Issuer shall, within five (5) calendar days, deliver to the holders of the Designated Preferred Stock a written notice executed by the Chief Executive Officer and the Chief Financial Officer of the Issuer stating the Board of Directors’ rationale for not declaring dividends.

(d)Priority of Dividends; Restrictions on Dividends.

(i)Subject to Sections 3(d)(ii), (iii) and (v) and any restrictions imposed by the Appropriate Federal Banking Agency or, if applicable, the Issuer’s state bank supervisor (as defined in Section 3(r) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(q)), so long as any share of Designated Preferred Stock remains outstanding, the Issuer may declare and pay dividends on the Common Stock, any other shares of Junior Stock, or Parity Stock, in each case only if (A) after giving effect to such dividend the Issuer’s Tier 1 capital would be at least equal to the Tier 1 Dividend Threshold, and (B) full dividends on all outstanding shares of Designated Preferred Stock for the most recently completed Dividend Period have been or are contemporaneously declared and paid.

(ii)If a dividend is not declared and paid in full on the Designated Preferred Stock in respect of any Dividend Period, then from the last day of such Dividend Period until the last day of the third (3rd) Dividend Period immediately following it, no dividend or distribution shall be declared or paid on the Common Stock or any other shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity Stock; provided, however, that in any such Dividend Period in which a dividend is declared and paid on the Designated Preferred Stock, dividends may be paid on Parity Stock to the extent necessary to avoid any material breach of a covenant by which the Issuer is bound.

(iii)When dividends have not been declared and paid in full for an aggregate of four (4) Dividend Periods or more, and during such time the Issuer was not subject to a regulatory determination that prohibits the declaration and payment of dividends, the Issuer shall, within five (5) calendar days of each missed payment, deliver

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to the holders of the Designated Preferred Stock a certificate executed by at least a majority of the Board of Directors stating that the Board of Directors used its best efforts to declare and pay such dividends in a manner consistent with (A) safe and sound banking practices and (B) the directors’ fiduciary obligations.

(iv)Subject to the foregoing and Section 3(e) below and not otherwise, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors may be declared and paid on any securities, including Common Stock and other Junior Stock, from time to time out of any funds legally available for such payment, and holders of Designated Preferred Stock shall not be entitled to participate in any such dividends.

(v) If the Issuer is not Publicly-Traded, then after the tenth (10th) anniversary of the Signing Date, so long as any share of Designated Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity Stock.

(e)           Special Lending Incentive Fee Related to CPP.  If Treasury held Previously Acquired Preferred Shares immediately prior to the Original Issue Date and the Issuer did not apply to Treasury to redeem such Previously Acquired Preferred Shares prior to December 16, 2010, and if the Issuer’s Supplemental Report with respect to the ninth (9th) Dividend Period reflects an amount of Qualified Small Business Lending that is less than or equal to the Baseline (or if the Issuer fails to timely file a Supplemental Report with respect to the ninth (9th) Dividend Period), then beginning on April 1, 2014 and on all Dividend Payment Dates thereafter ending on April 1, 2016, the Issuer shall pay to the Holders of Designated Preferred Stock, on each share of Designated Preferred Stock, but only out of assets legally available therefor, a fee equal to 0.5% of the Liquidation Amount per share of Designated Preferred Stock (“CPP Lending Incentive Fee”).  All references in Section 3(d) to “dividends” on the Designated Preferred Stock shall be deemed to include the CPP Lending Incentive Fee.

Section 4.Liquidation Rights.

(a)Voluntary or Involuntary Liquidation.  In the event of any liquidation, dissolution or winding up of the affairs of the Issuer, whether voluntary or involuntary, holders of Designated Preferred Stock shall be entitled to receive for each share of Designated Preferred Stock, out of the assets of the Issuer or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Issuer, subject to the rights of any creditors of the Issuer, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the Issuer ranking junior to Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends on each such share (such amounts collectively, the “Liquidation Preference”).

(b)Partial Payment.  If in any distribution described in Section 4(a) above the assets of the Issuer or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts

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payable with respect of any other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.

(c)Residual Distributions.  If the Liquidation Preference has been paid in full to all holders of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution has been paid in full, the holders of other stock of the Issuer shall be entitled to receive all remaining assets of the Issuer (or proceeds thereof) according to their respective rights and preferences.

(d)Merger, Consolidation and Sale of Assets Is Not Liquidation.  For purposes of this Section 4, the merger or consolidation of the Issuer with any other corporation or other entity, including a merger or consolidation in which the holders of Designated Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the Issuer, shall not constitute a liquidation, dissolution or winding up of the Issuer.

Section 5.Redemption.

(a)Optional Redemption.

(i)Subject to the other provisions of this Section 5:

(1)   The Issuer, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the time outstanding; and

(2)   If, after the Signing Date, there is a change in law that modifies the terms of Treasury’s investment in the Designated Preferred Stock or the terms of Treasury’s Small Business Lending Fund program in a materially adverse respect for the Issuer, the Issuer may, after consultation with the Appropriate Federal Banking Agency, redeem all of the shares of Designated Preferred Stock at the time outstanding.

(ii)The per-share redemption price for shares of Designated Preferred Stock shall be equal to the sum of:

(1)   the Liquidation Amount per share,

(2)   the per-share amount of any  unpaid dividends for the then current Dividend Period at the Applicable Dividend Rate to, but excluding, the date fixed for redemption (regardless

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of whether any dividends are actually declared for that Dividend Period; and

(3)   the pro rata amount of CPP Lending Incentive Fees for the current Dividend Period.

The redemption price for any shares of Designated Preferred Stock shall be payable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Issuer or its agent.  Any declared but unpaid dividends for the then current Dividend Period payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 3 above.

(b)No Sinking Fund.  The Designated Preferred Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred Stock will have no right to require redemption or repurchase of any shares of Designated Preferred Stock.

(c)Notice of Redemption.  Notice of every redemption of shares of Designated Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Issuer.  Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption.  Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Designated Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Designated Preferred Stock.  Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Company or any other similar facility, notice of redemption may be given to the holders of Designated Preferred Stock at such time and in any manner permitted by such facility.  Each notice of redemption given to a holder shall state:  (1) the redemption date; (2) the number of shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price.

(d)Partial Redemption.  In case of any redemption of part of the shares of Designated Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable, but in any event the shares to be redeemed shall not be less than the Minimum Amount. Subject to the provisions hereof, the Board of Directors or a duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time, subject to the approval of the Appropriate Federal Banking Agency. If fewer than all the

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shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

(e)Effectiveness of Redemption.  If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Issuer, in trust for the pro rata benefit of the holders of the shares called for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board of Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest.  Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the Issuer, after which time the holders of the shares so called for redemption shall look only to the Issuer for payment of the redemption price of such shares.

(f)Status of Redeemed Shares.  Shares of Designated Preferred Stock that are redeemed, repurchased or otherwise acquired by the Issuer shall revert to authorized but unissued shares of Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).

Section 6.Conversion.  Holders of Designated Preferred Stock shares shall have no right to exchange or convert such shares into any other securities.

Section 7.Voting Rights.

(a)General.  The holders of Designated Preferred Stock shall not have any voting rights except as set forth below or as otherwise from time to time required by law.

(b)Board Observation Rights.  Whenever, at any time or times, dividends on the shares of Designated Preferred Stock have not been declared and paid in full within five (5) Business Days after each Dividend Payment Date for an aggregate of five (5) Dividend Periods or more, whether or not consecutive, the Issuer shall invite a representative selected by the holders of a majority of the outstanding shares of Designated Preferred Stock, voting as a single class, to attend all meetings of its Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors in connection with such meetings; provided, that the holders of the Designated Preferred Stock shall not be obligated to select such a representative, nor shall such representative, if selected, be obligated to attend any meeting to which he/she is invited.  The rights of the holders of the Designated Preferred Stock set forth in this Section 7(b) shall terminate when full dividends have been timely paid on the Designated Preferred Stock for at least four consecutive Dividend Periods, subject to revesting in the event of each and every subsequent default of the character above mentioned.

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(c)Preferred Stock Directors.  Whenever, at any time or times, (i) dividends on the shares of Designated Preferred Stock have not been declared and paid in full within five (5) Business Days after each Dividend Payment Date for an aggregate of six (6) Dividend Periods or more, whether or not consecutive, and (ii) the aggregate liquidation preference of the then-outstanding shares of Designated Preferred Stock is greater than or equal to $25,000,000, the authorized number of directors of the Issuer shall automatically be increased by two and the holders of the Designated Preferred Stock, voting as a single class, shall have the right, but not the obligation, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill such newly created directorships at the Issuer’s next annual meeting of stockholders (or, if the next annual meeting is not yet scheduled or is scheduled to occur more than thirty days later, the President of the Company shall promptly call a special meeting for that purpose) and at each subsequent annual meeting of stockholders until full dividends have been timely paid on the Designated Preferred Stock for at least four consecutive Dividend Periods, at which time such right shall terminate with respect to the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned; provided that it shall be a qualification for election for any Preferred Director that the election of such Preferred Director shall not cause the Issuer to violate any corporate governance requirements of any securities exchange or other trading facility on which securities of the Issuer may then be listed or traded that listed or traded companies must have a majority of independent directors.  Upon any termination of the right of the holders of shares of Designated Preferred Stock to vote for directors as provided above, the Preferred Directors shall cease to be qualified as directors, the term of office of all Preferred Directors then in office shall terminate immediately and the authorized number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto.  Any Preferred Director may be removed at any time, with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote of the holders a majority of the shares of Designated Preferred Stock at the time outstanding voting separately as a class.  If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the holders of a majority of the outstanding shares of Designated Preferred Stock, voting as a single class, may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

(d)Class Voting Rights as to Particular Matters.  So long as any shares of Designated Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Charter, the written consent of (x) Treasury if Treasury holds any shares of Designated Preferred Stock, or (y) the holders of a majority of the outstanding shares of Designated Preferred Stock, voting as a single class, if Treasury does not hold any shares of Designated Preferred Stock, shall be necessary for effecting or validating:

(i)Authorization of Senior Stock.  Any amendment or alteration of the Certificate of Designation for the Designated Preferred Stock or the Charter to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of capital stock of the Issuer ranking senior to Designated Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Issuer;

72

(ii)Amendment of Designated Preferred Stock.  Any amendment, alteration or repeal of any provision of the Certificate of Designation for the Designated Preferred Stock or the Charter (including, unless no vote on such merger or consolidation is required by Section 7(d)(iii) below, any amendment, alteration or repeal by means of a merger, consolidation or otherwise) so as to adversely affect the rights, preferences, privileges or voting powers of the Designated Preferred Stock;

(iii)Share Exchanges, Reclassifications, Mergers and Consolidations.  Subject to Section 7(d)(v) below, any consummation of a binding share exchange or reclassification involving the Designated Preferred Stock, or of a merger or consolidation of the Issuer with another corporation or other entity, unless in each case (x) the shares of Designated Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Issuer is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof that are the same as the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a whole; provided, that in all cases, the obligations of the Issuer are assumed (by operation of law or by express written assumption) by the resulting entity or its ultimate parent;

(iv)Certain Asset Sales.  Any sale of all, substantially all, or any material portion of, the assets of the Company, if the Designated Preferred Stock will not be redeemed in full contemporaneously with the consummation of such sale; and

(v)Holding Company Transactions.  Any consummation of a Holding Company Transaction, unless as a result of the Holding Company Transaction each share of Designated Preferred Stock shall be converted into or exchanged for one share with an equal liquidation preference of preference securities of the Issuer or the Acquiror (the “Holding Company Preferred Stock”).  Any such Holding Company Preferred Stock shall entitle holders thereof to dividends from the date of issuance of such Holding Company Preferred Stock on terms that are equivalent to the terms set forth herein, and shall have such other rights, preferences, privileges and voting powers, and limitations and restrictions thereof that are the same as the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of Designated Preferred Stock immediately prior to such conversion or exchange, taken as a whole;

provided, however, that for all purposes of this Section 7(d), any increase in the amount of the authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred Stock necessary to satisfy preemptive or similar rights granted by the Issuer to other persons prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon liquidation, dissolution or winding up of the Issuer will not be

73

deemed to adversely affect the rights, preferences, privileges or voting powers, and shall not require the affirmative vote or consent of, the holders of outstanding shares of the Designated Preferred Stock.

(e)Changes after Provision for Redemption.  No vote or consent of the holders of Designated Preferred Stock shall be required pursuant to Section 7(d) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been deposited in trust for such redemption, in each case pursuant to Section 5 above.

(f)Procedures for Voting and Consents.  The rules and procedures for calling and conducting any meeting of the holders of Designated Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules of the Board of Directors or any duly authorized committee of the Board of Directors, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Charter, the Bylaws, and applicable law and the rules of any national securities exchange or other trading facility on which Designated Preferred Stock is listed or traded at the time.

Section 8.Restriction on Redemptions and Repurchases.

(a)Subject to Sections 8(b) and (c), so long as any share of Designated Preferred Stock remains outstanding, the Issuer may repurchase or redeem any shares of Capital Stock (as defined below), in each case only if (i) after giving effect to such dividend, repurchase or redemption, the Issuer’s Tier 1 capital would be at least equal to the Tier 1 Dividend Threshold and (ii) dividends on all outstanding shares of Designated Preferred Stock for the most recently completed Dividend Period have been or are contemporaneously declared and paid (or have been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred Stock on the applicable record date).

(b)If a dividend is not declared and paid on the Designated Preferred Stock in respect of any Dividend Period, then from the last day of such Dividend Period until the last day of the third (3rd) Dividend Period immediately following it,neither the Issuer nor any Issuer Subsidiary shall, redeem, purchase or acquire any shares of Common Stock, Junior Stock, Parity Stock or other capital stock or other equity securities of any kind of the Issuer or any Issuer Subsidiary, or any trust preferred securities issued by the Issuer or any Affiliate of the Issuer (“Capital Stock”), (other than (i) redemptions, purchases, repurchases or other acquisitions of the Designated Preferred Stock and (ii) repurchases of Junior Stock or Common Stock in connection with the administration of any employee benefit plan in the ordinary course of business (including purchases to offset any Share Dilution Amount pursuant to a publicly announced repurchase plan) and consistent with past practice; provided that any purchases to offset the Share Dilution Amount shall in no event exceed the Share Dilution Amount, (iii) the acquisition by the Issuer or any of the Issuer Subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than the Issuer or any other Issuer Subsidiary), including as trustees or custodians, (iv) the exchange or conversion of Junior Stock

74

for or into other Junior Stock or of Parity Stock or trust preferred securities for or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case set forth in this clause (iv), solely to the extent required pursuant to binding contractual agreements entered into prior to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common Stock, (v) redemptions of securities held by the Issuer or any wholly-owned Issuer Subsidiary or (vi) redemptions, purchases or other acquisitions of capital stock or other equity securities of any kind of any Issuer Subsidiary required pursuant to binding contractual agreements entered into prior to (x) if Treasury held Previously Acquired Preferred Shares immediately prior to the Original Issue Date, the original issue date of such Previously Acquired Preferred Shares, or (y) otherwise, the Signing Date).

(c) If the Issuer is not Publicly-Traded, then after the tenth (10th) anniversary of the Signing Date, so long as any share of Designated Preferred Stock remains outstanding, no Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly,  purchased, redeemed or otherwise acquired for consideration by the Issuer or any of its subsidiaries.

Section 9.No Preemptive Rights.  No share of Designated Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Issuer, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated, issued or granted.

Section 10.References to Line Items of Supplemental Reports.  If Treasury modifies the form of Supplemental Report, pursuant to its rights under the Definitive Agreement,  and any such modification includes a change to the caption or number of any line item on the Supplemental Report, then any reference herein to such line item shall thereafter be a reference to such re-captioned or re-numbered line item.

Section 11.Record Holders.  To the fullest extent permitted by applicable law, the Issuer and the transfer agent for Designated Preferred Stock may deem and treat the record holder of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Issuer nor such transfer agent shall be affected by any notice to the contrary.

Section 12.Notices.  All notices or communications in respect of Designated Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designation, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Company or any similar facility, such notices may be given to the holders of Designated Preferred Stock in any manner permitted by such facility.

Section 13.Replacement Certificates.  The Issuer shall replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Issuer. The Issuer shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Issuer of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by the Issuer.

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Section 14.Other Rights.  The shares of Designated Preferred Stock shall not have any rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Charter or as provided by applicable law.

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EX-31.1

Exhibit 31.1

I, Douglas M. Hultquist, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A Amendment No. 1 of QCR Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:   November 8, 2011	/s/  Douglas M. Hultquist
	Douglas M. Hultquist
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Todd A. Gipple, certify that:

2. I have reviewed this Quarterly Report on Form 10-Q/A Amendment No. 1 of QCR Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date:           November 8, 2011	/s/ Todd A. Gipple
	Todd A. Gipple
	Chief Operating Officer
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Amendment No. 1 to the Quarterly Report of QCR Holdings, Inc. (the “Company”) on Form 10-Q/A for the period ending September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report), I, Douglas M. Hultquist, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/  Douglas M. Hultquist_________

Douglas M. Hultquist

Chief Executive Officer

November 8, 2011

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Amendment No. 1 to the Quarterly Report of QCR Holdings, Inc. (the “Company”) on Form 10-Q/A for the period ending September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report), I, Todd A. Gipple, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/  Todd A. Gipple___________

Todd A. Gipple

Chief Operating Officer

Chief Financial Officer

November 8, 2011

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Sep. 30, 2011	Dec. 31, 2010
Preferred stock, par value (in Dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	250,000	250,000
Preferred stock, shares issued	65,090	63,237
Preferred stock, shares outstanding	65,090	63,237
Common stock, par value (in Dollars per share)	$ 1	$ 1
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	4,868,480	4,732,428
Common stock, shares outstanding	4,747,234	4,611,182
Treasury Stock, shares	121,246	121,246

XML

Consolidated Statements of Income For Three Months (Unaudited) (USD $)	3 Months Ended						9 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Sep. 30, 2011	Sep. 30, 2010
Interest and dividend income:
Loans/leases, including fees	$ 16,215,725			$ 16,710,323			$ 48,466,331	$ 51,324,123
Securities:
Taxable	2,877,574			2,595,301			8,035,495	7,771,242
Nontaxable	244,209			224,703			743,368	681,001
Interest-bearing deposits at financial institutions	97,714			55,289			311,807	347,105
Restricted investment securities	126,333			116,175			427,818	328,762
Federal funds sold	7,875			38,465			97,919	123,699
Total interest and dividend income	19,569,430			19,740,256			58,082,738	60,575,932
Interest expense:
Deposits	2,201,070			3,151,191			6,948,265	9,940,844
Short-term borrowings	65,502			132,290			248,079	450,539
Federal Home Loan Bank advances	1,931,259			2,345,944			6,053,134	6,903,991
Other borrowings	1,301,144			1,452,204			3,870,062	4,307,558
Junior subordinated debentures	241,751			495,052			974,637	1,457,765
Total interest expense	5,740,726			7,576,681			18,094,177	23,060,697
Net interest income	13,828,704			12,163,575			39,988,561	37,515,235
Provision for loan/lease losses	2,456,965			1,434,232			5,196,850	4,413,650
Net interest income after provision for loan/lease losses	11,371,739			10,729,343			34,791,711	33,101,585
Noninterest income:
Trust department fees	762,133			803,423			2,607,668	2,438,473
Investment advisory and management fees, gross	549,515			419,416			1,630,976	1,325,910
Deposit service fees	893,685			902,787			2,623,018	2,585,873
Gains on sales of loans, net	408,364			1,109,724			1,923,185	1,831,856
Securities gains	443,614						1,472,528
Gains (losses) on sales of other real estate owned, net	42,262			(188,158)			(90,492)	(632,806)
Earnings on bank-owned life insurance	331,440			353,003			1,032,493	973,659
Credit card issuing fees, net of processing costs	178,636			34,866			397,132	231,439
Other	725,658			923,225			1,969,304	1,973,589
Total noninterest income	4,335,307			4,358,286			13,565,812	10,727,993
Noninterest expense:
Salaries and employee benefits	7,651,695			6,910,016			22,480,731	20,869,335
Occupancy and equipment expense	1,359,758			1,410,429			4,017,506	4,147,101
Professional and data processing fees	1,077,435			1,096,100			3,338,935	3,379,080
FDIC and other insurance	578,776			887,509			2,149,093	2,575,000
Loan/lease expense	839,993			678,535			1,772,290	1,658,647
Advertising and marketing	277,376			292,148			836,459	701,603
Postage and telephone	242,103			252,512			703,803	750,611
Stationery and supplies	122,582			135,064			380,754	379,347
Bank service charges	186,351			112,742			525,007	284,134
Other-than-temporary impairment losses on securities				113,800			118,847	113,800
Other	437,080			244,910			1,185,443	1,314,615
Total noninterest expense	12,773,149			12,133,765			38,340,967	36,790,273
Net income before income taxes	2,933,897			2,953,864			10,016,556	7,039,305
Federal and state income tax expense	667,296			829,992			2,745,257	1,900,663
Net income	2,266,601	2,773,214	2,231,484	2,123,872	1,799,837	1,214,933	7,271,299	5,138,642
Less: Net income attributable to noncontrolling interests	103,446			109,786			308,215	95,046
Net income attributable to QCR Holdings, Inc.	2,163,155			2,014,086			6,963,084	5,043,596
Less: Preferred stock dividends	2,188,058			1,028,686			4,256,171	3,099,418
Net income (loss) attributable to QCR Holdings, Inc. common stockholders	$ (24,903)			$ 985,400			$ 2,706,913	$ 1,944,178
Earnings (loss) per common share attributable to QCR Holdings, Inc. common shareholders
Basic (in Dollars per share)	$ (0.01)			$ 0.21			$ 0.56	$ 0.42
Diluted (in Dollars per share)	$ (0.01)			$ 0.21			$ 0.56	$ 0.42
Weighted average common shares outstanding (in Shares)	4,866,692			4,598,566			4,795,382	4,587,883
Weighted average common and common equivalent shares outstanding (in Shares)	4,866,692			4,619,574			4,847,433	4,617,102

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2011	Nov. 01, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	QCR HOLDINGS INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		4,749,234
Amendment Flag	false
Entity Central Index Key	0000906465
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3

XML

Note 3 - Loans/Leases Receivable

3 Months Ended

Sep. 30, 2011

Financing Receivables [Text Block]

NOTE 3 – LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of September 30, 2011 and December 31, 2010 is presented as follows:

	As of September 30,			As of December 31,
	2011			2010
Commercial and industrial loans	$	363,997,365		$	365,625,271
Commercial real estate loans
Owner-occupied commercial real estate		160,485,944			141,411,027
Commercial construction, land development, and other land		63,582,594			65,529,058
Other non owner-occupied commercial real estate		344,418,820			346,777,179
		568,487,358			553,717,264
Direct financing leases *		88,893,130			83,009,647
Residential real estate loans **		94,073,045			82,196,622
Installment and other consumer loans		79,892,870			86,239,944
		1,195,343,768			1,170,788,748
Plus deferred loan/lease orgination costs, net of fees		2,237,942			1,749,855
		1,197,581,710			1,172,538,603
Less allowance for estimated losses on loans/leases		(19,578,486	)		(20,364,656	)
	$	1,178,003,224		$	1,152,173,947
* Direct financing leases:
Net minimum lease payments to be received	$	101,466,699		$	94,921,417
Estimated unguaranteed residual values of leased assets		1,108,701			1,204,865
Unearned lease/residual income		(13,682,270	)		(13,116,635	)
		88,893,130			83,009,647
Plus deferred lease origination costs, net of fees		2,800,256			2,341,628
		91,693,386			85,351,275
Less allowance for estimated losses on leases		(1,051,960	)		(1,530,572	)
	$	90,641,426		$	83,820,703

 **Includes residential real estate loans held for sale totaling $5,287,924 and $14,084,859 as of September 30, 2011 and December 31, 2010, respectively.

Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum.  The evaluation consists of discussions with reputable and current vendors and management’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment.  As necessary and where available, management will utilize valuations by independent appraisers.  The large majority of leases with residual values contain a lease options rider which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value.  In these cases, the residual value is protected and the risk of loss is minimal.

For the three and nine months ended September 30, 2011, and for the three months ended September 30, 2010, there were no losses on residual values.  During the first quarter of 2010, the Company recognized losses totaling $617,000 in residual values for two direct financing equipment leases.  At September 30, 2011, the Company had 43 leases remaining with residual values totaling $1,108,701 that were not protected with a lease end options rider.  At December 31, 2010, the Company had 54 leases remaining with residual values totaling $1,204,865 that were not protected with a lease end options rider.  Management has performed specific evaluations of these residual values and determined that the valuations are appropriate.

The aging of the loan/lease portfolio by classes of loans/leases as of September 30, 2011 is presented as follows:

Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
Commercial and Industrial	$	357,960,272		$	384,752		$	101,500		$	-		$	5,550,841		$	363,997,365
Commercial Real Estate
Owner-Occupied Commercial Real Estate		157,028,882			860,990			-			-			2,596,072			160,485,944
Commercial Construction, Land Development, and Other Land		53,798,001			-			1,039,528			-			8,745,065			63,582,594
Other Non Owner-Occupied Commercial Real Estate		323,363,602			5,763,492			5,824,332			321,605			9,145,789			344,418,820
Direct Financing Leases		86,897,793			1,158,023			120,825			-			716,489			88,893,130
Residential Real Estate		92,747,679			-			131,302			-			1,194,064			94,073,045
Installment and Other Consumer		78,113,490			289,418			420,426			11,886			1,057,650			79,892,870
	$	1,149,909,719		$	8,456,675		$	7,637,913		$	333,491		$	29,005,970		$	1,195,343,768
As a percentage of total loan/lease portfolio		96.20	%		0.71	%		0.64	%		0.03	%		2.43	%		100.00	%

The aging of the loan/lease portfolio by classes of loans/leases as of December 31, 2010 is presented as follows:

Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
Commercial and Industrial	$	353,437,063		$	300,224		$	203,722		$	-		$	11,684,262		$	365,625,271
Commercial Real Estate
Owner-Occupied Commercial Real Estate		139,880,634			236,910			-			103,015			1,190,468			141,411,027
Commercial Construction, Land Development, and Other Land		55,552,352			746,545			-			-			9,230,161			65,529,058
Other Non Owner-Occupied Commercial Real Estate		335,171,858			275,000			546,019			70,125			10,714,177			346,777,179
Direct Financing Leases		79,708,979			1,605,836			92,244			-			1,602,588			83,009,647
Residential Real Estate		79,910,279			876,509			-			123,557			1,286,277			82,196,622
Installment and Other Consumer		84,214,010			101,770			182,349			23,139			1,718,676			86,239,944
	$	1,127,875,175		$	4,142,794		$	1,024,334		$	319,836		$	37,426,609		$	1,170,788,748
As a percentage of total loan/lease portfolio		96.33	%		0.35	%		0.09	%		0.03	%		3.20	%		100.00	%

Nonperforming loans/leases by classes of loans/leases as of September 30, 2011 is presented as follows:

Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Troubled Debt Restructurings - Accruing		Total Nonperforming Loans/Leases		Percentage of Total Nonperforming Loans/Leases
Commercial and Industrial	$	-	$	5,550,841	$	-	$	5,550,841		17.34	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		2,596,072		-		2,596,072		8.11	%
Commercial Construction, Land Development, and Other Land		-		8,745,065		1,114,956		9,860,021		30.80	%
Other Non Owner-Occupied Commercial Real Estate		321,605		9,145,789		941,140		10,408,534		32.51	%
Direct Financing Leases		-		716,489		619,114		1,335,603		4.17	%
Residential Real Estate		-		1,194,064		-		1,194,064		3.73	%
Installment and Other Consumer		11,886		1,057,650		-		1,069,536		3.34	%
	$	333,491	$	29,005,970	$	2,675,210	$	32,014,671		100.00	%

*Nonaccrual loans/leases includes $8,640,421 of troubled debt restructurings, including $219,220 in commercial and industrial loans, and $7,956,866 in commercial real estate loans.

Nonperforming loans/leases by classes of loans/leases as of December 31, 2010 is presented as follows:

Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Troubled Debt Restructurings - Accruing		Total Nonperforming Loans/Leases		Percentage of Total Nonperforming Loans/Leases
Commercial and Industrial	$	-	$	11,684,262	$	180,228	$	11,864,490		28.83	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		103,015		1,190,468		-		1,293,483		3.14	%
Commercial Construction, Land Development, and Other Land		-		9,230,161		961,879		10,192,040		24.77	%
Other Non Owner-Occupied Commercial Real Estate		70,125		10,714,177		2,100,837		12,885,139		31.31	%
Direct Financing Leases		-		1,602,588		162,502		1,765,090		4.29	%
Residential Real Estate		123,557		1,286,277		-		1,409,834		3.43	%
Installment and Other Consumer		23,139		1,718,676		-		1,741,815		4.23	%
	$	319,836	$	37,426,609	$	3,405,446	$	41,151,891		100.00	%

**Nonaccrual loans/leases includes $12,631,343 of troubled debt restructurings, including $2,200,986 in commercial and industrial loans and $9,407,276 in commercial real estate loans.

Changes in the allowance for estimated losses on loans/leases by portfolio segment for the three and nine months ended September 30, 2011 and 2010, respectively, are presented as follows:

	Three Months Ended September 30, 2011
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	7,124,444		$	8,602,639		$	1,591,309		$	757,075		$	1,727,165		$	19,802,632
Provisions charged to expense		(211,491	)		2,645,457			159,965			92,032			(228,998	)		2,456,965
Loans/leases charged off		(1,465,577	)		(852,174	)		(701,658	)		-			(84,358	)		(3,103,767	)
Recoveries on loans/leases previously charged off		174,013			212,683			2,344			-			33,616			422,656
Balance, ending	$	5,621,389		$	10,608,605		$	1,051,960		$	849,107		$	1,447,425		$	19,578,486
	Three Months Ended September 30, 2010
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,875,508		$	11,907,867		$	1,707,762		$	567,491		$	1,502,335		$	21,560,963
Provisions charged to expense		839,037			205,290			210,232			109,850			69,823			1,434,232
Loans/leases charged off		(1,151,574	)		(1,631,524	)		(695,176	)		-			(100,919	)		(3,579,193	)
Recoveries on loans/leases previously charged off		13,995			278,594			156,288			-			17,947			466,824
Balance, ending	$	5,576,966		$	10,760,227		$	1,379,106		$	677,341		$	1,489,186		$	19,882,826
	Nine Months Ended September 30, 2011
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	7,548,922		$	9,087,315		$	1,530,572		$	748,028		$	1,449,819		$	20,364,656
Provisions charged to expense		1,005,002			3,038,359			463,850			101,079			588,560			5,196,850
Loans/leases charged off		(3,256,194	)		(1,773,711	)		(945,104	)		-			(701,390	)		(6,676,399	)
Recoveries on loans/leases previously charged off		323,659			256,642			2,642			-			110,436			693,379
Balance, ending	$	5,621,389		$	10,608,605		$	1,051,960		$	849,107		$	1,447,425		$	19,578,486
	Nine Months Ended September 30, 2010
	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,425,624		$	12,665,721		$	1,681,376		$	685,732		$	2,046,281		$	22,504,734
Provisions charged to expense		3,033,353			721,158			468,651			(8,391	)		198,879			4,413,650
Loans/leases charged off		(2,993,277	)		(3,030,503	)		(928,019	)		-			(891,008	)		(7,842,807	)
Recoveries on loans/leases previously charged off		111,266			403,851			157,098			-			135,034			807,249
Balance, ending	$	5,576,966		$	10,760,227		$	1,379,106		$	677,341		$	1,489,186		$	19,882,826

The allowance for estimated losses on loans/leases by impairment evaluation and by portfolio segment as of September 30, 2011 is presented as follows:

	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for loans/leases individually evaluated for impairment	$	945,475		$	4,741,965		$	8,000		$	66,035		$	108,724		$	5,870,199
Allowance for loans/leases collectively evaluated for impairment		4,675,914			5,866,640			1,043,960			783,072			1,338,701			13,708,287
	$	5,621,389		$	10,608,605		$	1,051,960		$	849,107		$	1,447,425		$	19,578,486
Loans/leases individually evaluated for impairment	$	3,420,793		$	22,539,729		$	1,335,603		$	1,194,063		$	721,943		$	29,212,131
Loans/leases collectively evaluated for impairment		360,576,572			545,947,629			87,557,527			92,878,982			79,170,927			1,166,131,637
	$	363,997,365		$	568,487,358		$	88,893,130		$	94,073,045		$	79,892,870		$	1,195,343,768
Allowance as a percentage of loans/leases individually evaluated for impairment		27.64	%		21.04	%		0.60	%		5.53	%		15.06	%		20.10	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.30	%		1.07	%		1.19	%		0.84	%		1.69	%		1.18	%
		1.54	%		1.87	%		1.18	%		0.90	%		1.81	%		1.63	%

The allowance for estimated losses on loans/leases by impairment evaluation and by portfolio segment as of December 31, 2010 is presented as follows:

	Commercial and Industrial			Commercial Real Estate			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for loans/leases individually evaluated for impairment	$	3,331,437		$	3,709,177		$	335,000		$	27,355		$	49,777		$	7,452,746
Allowance for loans/leases collectively evaluated for impairment		4,217,485			5,378,138			1,195,572			720,673			1,400,042			12,911,910
	$	7,548,922		$	9,087,315		$	1,530,572		$	748,028		$	1,449,819		$	20,364,656
Loans/leases individually evaluated for impairment	$	8,824,670		$	24,770,032		$	1,765,090		$	1,286,277		$	1,611,098		$	38,257,167
Loans/leases collectively evaluated for impairment		356,800,601			528,947,232			81,244,557			80,910,345			84,628,846			1,132,531,581
	$	365,625,271		$	553,717,264		$	83,009,647		$	82,196,622		$	86,239,944		$	1,170,788,748
Allowance as a percentage of loans/leases individually evaluated for impairment		37.75	%		14.97	%		18.98	%		2.13	%		3.09	%		19.48	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.18	%		1.02	%		1.47	%		0.89	%		1.65	%		1.14	%
		2.06	%		1.64	%		1.84	%		0.91	%		1.68	%		1.74	%

Information for impaired loans/leases is presented in the tables below.  The recorded investment represents customer balances net of any partial charge-offs recognized on the loan/lease.  The unpaid principal balance represents the recorded balance outstanding on the loan/lease prior to any partial charge-offs.

Information for impaired loans/leases by classes of financing receivable as of and for the nine months ended September 30, 2011 is as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	771,177	$	1,446,065	$	-	$	4,363,221	$	15,961	$	15,961
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,572,641		1,625,409		-		2,009,518		54,314		54,314
Commercial Construction, Land Development, and Other Land		234,890		234,890		-		1,524,700		-		-
Other Non Owner-Occupied Commercial Real Estate		1,730,764		1,730,764		-		3,665,415		-		-
Direct Financing Leases		1,231,385		1,231,385		-		529,106		-		-
Residential Real Estate		932,813		932,813		-		1,008,968		-		-
Installment and Other Consumer		613,219		613,219		-		835,483		-		-
	$	7,086,889	$	7,814,545	$	-	$	13,936,411	$	70,275	$	70,275
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	2,649,616	$	2,649,616	$	945,475	$	1,515,521	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,390,681		1,390,681		611,350		160,397		-		-
Commercial Construction, Land Development, and Other Land		9,625,131		9,663,955		3,356,291		4,927,747		473		473
Other Non Owner-Occupied Commercial Real Estate		7,985,622		8,485,622		774,324		6,894,571		-		-
Direct Financing Leases		104,218		104,218		8,000		1,021,241		-		-
Residential Real Estate		261,250		295,928		66,035		168,233		-		-
Installment and Other Consumer		108,724		110,527		108,724		64,922		-		-
	$	22,125,242	$	22,700,547	$	5,870,199	$	14,752,632	$	473	$	473
Total Impaired Loans/Leases:
Commercial and Industrial	$	3,420,793	$	4,095,681	$	945,475	$	5,878,742	$	15,961	$	15,961
Commercial Real Estate
Owner-Occupied Commercial Real Estate		2,963,322		3,016,090		611,350		2,169,915		54,314		54,314
Commercial Construction, Land Development, and Other Land		9,860,021		9,898,845		3,356,291		6,452,447		473		473
Other Non Owner-Occupied Commercial Real Estate		9,716,386		10,216,386		774,324		10,559,986		-		-
Direct Financing Leases		1,335,603		1,335,603		8,000		1,550,347		-		-
Residential Real Estate		1,194,063		1,228,741		66,035		1,177,201		-		-
Installment and Other Consumer		721,943		723,746		108,724		900,405		-		-
	$	29,212,131	$	30,515,092	$	5,870,199	$	28,689,043	$	70,748	$	70,748

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

Information for impaired loans/leases by classes of financing receivable for the three months ended September 30, 2011 is as follows:

Classes of Loans/Leases	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	2,236,289	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,774,342		11,909		11,909
Commercial Construction, Land Development, and Other Land		286,339		-		-
Other Non Owner-Occupied Commercial Real Estate		1,730,764		-		-
Direct Financing Leases		668,944		-		-
Residential Real Estate		942,011		-		-
Installment and Other Consumer		710,560		-		-
	$	8,349,249	$	11,909	$	11,909
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	1,534,968	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		360,894		-		-
Commercial Construction, Land Development, and Other Land		5,595,484		473		473
Other Non Owner-Occupied Commercial Real Estate		7,488,032		-		-
Direct Financing Leases		983,131		-		-
Residential Real Estate		200,625		-		-
Installment and Other Consumer		108,859		-		-
	$	16,271,993	$	473	$	473
Total Impaired Loans/Leases:
Commercial and Industrial	$	3,771,257	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		2,135,236		11,909		11,909
Commercial Construction, Land Development, and Other Land		5,881,823		473		473
Other Non Owner-Occupied Commercial Real Estate		9,218,796		-		-
Direct Financing Leases		1,652,075		-		-
Residential Real Estate		1,142,636		-		-
Installment and Other Consumer		819,419		-		-
	$	24,621,242	$	12,382	$	12,382

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

Information for impaired loans/leases by classes of financing receivable as of December 31, 2010 is as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	1,459,790	$	3,350,036	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		681,727		681,727		-
Commercial Construction, Land Development, and Other Land		2,538,621		2,872,083		-
Other Non Owner-Occupied Commercial Real Estate		2,942,189		3,792,226		-
Direct Financing Leases		953,994		953,994		-
Residential Real Estate		758,031		758,031		-
Installment and Other Consumer		1,561,322		1,561,322		-
	$	10,895,674	$	13,969,419	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	7,364,880	$	7,866,634	$	3,331,436
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,074,210		1,074,210		232,194
Commercial Construction, Land Development, and Other Land		7,660,458		7,660,458		1,818,193
Other Non Owner-Occupied Commercial Real Estate		9,872,826		10,091,777		1,658,791
Direct Financing Leases		811,096		811,096		335,000
Residential Real Estate		528,246		528,246		27,355
Installment and Other Consumer		49,777		49,777		49,777
	$	27,361,493	$	28,082,198	$	7,452,746
Total Impaired Loans/Leases:
Commercial and Industrial	$	8,824,670	$	11,216,670	$	3,331,436
Commercial Real Estate
Owner-Occupied Commercial Real Estate		1,755,937		1,755,937		232,194
Commercial Construction, Land Development, and Other Land		10,199,079		10,532,541		1,818,193
Other Non Owner-Occupied Commercial Real Estate		12,815,015		13,884,003		1,658,791
Direct Financing Leases		1,765,090		1,765,090		335,000
Residential Real Estate		1,286,277		1,286,277		27,355
Installment and Other Consumer		1,611,099		1,611,099		49,777
	$	38,257,167	$	42,051,617	$	7,452,746

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of September 30, 2011:

			Commercial Real Estate
					Non Owner-Occupied
Internally Assigned Risk Rating	Commercial and Industrial		Owner-Occupied Commercial Real Estate		Commercial Construction, Land Development, and Other Land		Other Commercial Real Estate		Total
Pass (Ratings 1 through 5)	$	326,845,312	$	146,744,108	$	50,025,363	$	303,472,012	$	827,086,795
Special Mention (Rating 6)		9,211,829		2,704,551		505,706		19,546,611		31,968,697
Substandard (Rating 7)		27,940,224		11,037,285		13,051,525		21,400,197		73,429,231
Doubtful (Rating 8)		-		-		-		-		-
	$	363,997,365	$	160,485,944	$	63,582,594	$	344,418,820	$	932,484,723
	As of September 30, 2011
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	87,557,527	$	92,878,981	$	78,823,334	$	259,259,842
Nonperforming		1,335,603		1,194,064		1,069,536		3,599,203
	$	88,893,130	$	94,073,045	$	79,892,870	$	262,859,045

*Performing = loans/leases accruing and less than 90 days past due.  Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, or troubled debt restructurings.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of December 31, 2010:

			Commercial Real Estate
					Non Owner-Occupied
Internally Assigned Risk Rating	Commercial and Industrial		Owner-Occupied Commercial Real Estate		Commercial Construction, Land Development, and Other Land		Other Commercial Real Estate		Total
Pass (Ratings 1 through 5)	$	327,875,886	$	120,271,507	$	43,881,561	$	308,631,488	$	800,660,442
Special Mention (Rating 6)		10,457,805		7,510,519		10,338,187		15,244,142		43,550,653
Substandard (Rating 7)		27,270,474		13,629,001		11,309,310		22,901,549		75,110,334
Doubtful (Rating 8)		21,106		-		-		-		21,106
	$	365,625,271	$	141,411,027	$	65,529,058	$	346,777,179	$	919,342,535
	As of December 31, 2010
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	81,244,557	$	80,786,788	$	84,498,129	$	246,529,474
Nonperforming		1,765,090		1,409,834		1,741,815		4,916,739
	$	83,009,647	$	82,196,622	$	86,239,944	$	251,446,213

*Performing = loans/leases accruing and less than 90 days past due.  Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, or troubled debt restructurings.

For commercial and industrial and commercial real estate loans, the Company’s credit quality indicator is internally assigned risk ratings.  Each commercial loan is assigned a risk rating upon origination.  The risk rating is reviewed every 15 months, at a minimum, and on an as needed basis depending on the specific circumstances of the loan.

For direct financing leases, residential real estate loans, and installment and other consumer loans, the Company’s credit quality indicator is performance determined by delinquency status.  Delinquency status is updated daily by the Company’s loan system.

As a result of adopting ASU 2011-2, the Company reassessed all loan/lease modifications that occurred on or after January 1, 2011 for identification as a troubled debt restructuring.  The Company identified no additional loans/leases as troubled debt restructurings.

For each class of financing receivable, the following presents the number and recorded investment of troubled debt restructurings, by type of concession, that were restructured during the three and nine months ended September 30, 2011.

	For the three months ended September 30, 2011						For the nine months ended September 30, 2011
Classes of Loans/Leases	Number of TDRs		Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of TDRs		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
CONCESSION - Extension of maturity
Commercial and Industrial		-	$	-	$	-		-	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		-		-		-		1		2,500,530		2,500,530
Direct Financing Leases		-		-		-		-		-		-
Residential Real Estate		-		-		-		-		-		-
Installment and Other Consumer		-		-		-		-		-		-
		-	$	-	$	-		1	$	2,500,530	$	2,500,530
CONCESSION - Significant payment delay
Commercial and Industrial		-	$	-	$	-		-	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Direct Financing Leases		-		-		-		2		619,114		619,114
Residential Real Estate		-		-		-		-		-		-
Installment and Other Consumer		-		-		-		-		-		-
		-	$	-	$	-		2	$	619,114	$	619,114

There was no financial impact for charge-offs, principal forgiveness, or foregone interest for the troubled debt restructurings included in the previous table.  The financial impact for specific reserves was not significant for the troubled debt restructurings included in the previous table.

For the nine months ended September 30, 2011, none of the Company’s troubled debt restructurings have redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status.

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Note 8 - Series F Noncumulative Perpetual Preferred Stock

3 Months Ended

Sep. 30, 2011

Preferred Stock [Text Block]

NOTE 8 – SERIES F NONCUMULATIVE PERPETUAL PREFERRED STOCK

On September 15, 2011, the Company issued 40,090 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series F (“Series F Preferred Stock”) to the U.S. Department of the Treasury (“Treasury”) for an aggregate purchase price of $40,090,000.  The sale of Series F Preferred Stock is the result of an investment by Treasury from the Small Business Lending Fund (“SBLF”), a $30 billion fund established under the Small Business Jobs Act of 2010 that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion.  As a requirement of the SBLF, simultaneously, the Company redeemed the 38,327 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series D (“Series D Preferred Stock”), at an aggregate price of $38,237,000 plus accrued and unpaid dividends to the date of redemption of $159,321.  The Series D Preferred Stock was issued on February 13, 2009 as a result of the Company’s participation in Treasury’s voluntary Capital Purchase Program (“CPP”).  In accordance with the CPP, in February 2009 the Company also issued warrants which allow Treasury to purchase up to 521,888 of the Company’s common stock at an exercise price of $10.99.  As of the date of this report, the Company and Treasury are in negotiations for the Company to repurchase the warrants.

The Series F Preferred Stock qualifies as Tier 1 capital for the Company.  Non-cumulative dividends are payable quarterly on the Series F Preferred Stock, and the dividend rate is based on changes in the level of “Qualified Small Business Lending” or “QSBL” by the Company’s wholly owned bank subsidiaries, QCBT, CRBT and RB&T.  Based upon the change in the banks’ level of QSBL over the baseline level (as defined by SBLF, the baseline is the average of QSBL for the last two quarters of 2009 and the first two quarters of 2010), the dividend rate for the initial dividend period, which was from the date of issuance through September 30, 2011, was set at 5%, and the dividend rate for the fourth quarter of 2011 has also been set at 5%.  For the 2nd through 10th calendar quarters, the annual dividend rate may be adjusted to between 1% and 5%, to reflect the amount of change in the banks’ level of QSBL.  For the 11th calendar quarter through 4.5 years after issuance, the dividend rate will be fixed at between 1% and 5%, based upon the increase in QSBL from the baseline level to the level as of the end of the ninth dividend period (i.e., as of September 30, 2013), or will be fixed at 7% if there is no increase or there is a decrease in QSBL during such period. In addition, beginning on April 1, 2014 and ending on April 1, 2016, if there is no increase or there is a decrease in QSBL from the baseline level to the level as of the end of the ninth dividend period (i.e., as of September 30, 2013), because of the Company's participation in the CPP, the Company will be subject to an additional lending incentive fee of 2% per year. After 4.5 years from issuance, the dividend rate will increase to 9%.

The Series F Preferred Stock may be redeemed at any time at the option of the Company, subject to the approval of the Company’s primary federal banking regulator.  All redemptions must be in amounts equal to at least 25% of the number of originally issued shares, or 100% of the then-outstanding shares (if less than 25% of the originally issued shares).

In accordance with SBLF, the Company may pay dividends on all stock assuming Tier 1 capital levels remain at least 90% of the level existing upon the date of issuance, or September 15, 2011.  This threshold is subject to reduction depending on increases in the Company’s QSBL.

The Series F Preferred Stock is nonvoting, other than for consent rights granted to Treasury with respect to (i) any authorization or issuance of shares ranking senior to the Series F Preferred Stock, (ii) any amendment to the rights of the Series F Preferred Stock, (iii) any merger, exchange, dissolution, or similar transaction that would affect the rights of the Series F Preferred Stock and (iv) any sale of all, or any material portion of, the Company’s assets if in conjunction with such sale, the Series F Preferred Stock will not be redeemed in full.

If the Company misses five dividend payments, whether or not consecutive, the holder of the Series F Preferred Stock will have the right, but not the obligation, to appoint a representative as an observer on the Company’s Board of Directors.  If the Company misses six dividend payments, whether or not consecutive, and if the then outstanding aggregate Liquidation Amount of the Series F Preferred Stock is at least $25,000,000, then the holder of the Series F Preferred Stock will have the right to designate two directors to the Board of Directors of the Company.

The Series F Preferred Stock was issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 7,271,299	$ 5,138,642
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	1,866,403	1,926,876
Provision for loan/lease losses	5,196,850	4,413,650
Amortization of offering costs on subordinated debentures	10,738	10,738
Stock-based compensation expense	547,087	467,768
Losses on sales of other real estate owned, net	90,492	632,806
Amortization of premiums on securities, net	2,541,408	2,555,204
Securities gains	(1,472,528)
Other-than-temporary impairment losses on securities	118,847	113,800
Loans originated for sale	(65,240,469)	(103,689,462)
Proceeds on sales of loans	75,960,589	95,662,334
Gains on sales of loans, net	(1,923,185)	(1,831,856)
Prepayment fees on Federal Home Loan Bank advances	832,099
Losses on lease residual values		617,000
(Decrease) increase in accrued interest receivable	(376,868)	447,886
Decrease in prepaid FDIC insurance	1,362,876	1,788,261
Increase in cash value of bank-owned life insurance	(1,032,493)	(973,659)
Increase in other assets	(278,687)	(651,803)
Increase in other liabilities	955,174	1,504,602
Net cash provided by operating activities	26,429,632	8,132,787
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in federal funds sold	56,170,000	(15,356,667)
Net decrease (increase) in interest-bearing deposits at financial institutions	15,080,252	(7,152,522)
Proceeds from sales of foreclosed assets	8,376,898	1,759,607
Activity in securities portfolio:
Purchases	(458,081,700)	(294,445,750)
Calls, maturities and redemptions	302,145,002	243,389,938
Paydowns	4,977,152	400,605
Sales	54,326,191
Activity in restricted investment securities:
Purchases	(245,000)	(1,704,350)
Redemptions	1,675,700	204,800
Activity in bank-owned life insurance:
Purchases	(7,000,000)	(3,150,000)
Surrender of policy		609,772
Net (increase) decrease in loans/leases originated and held for investment	(48,043,333)	51,105,615
Purchase of premises and equipment	(1,693,870)	(2,025,145)
Net cash used in investing activities	(72,312,708)	(26,364,097)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposit accounts	92,653,389	(2,589,804)
Net increase (decrease) in short-term borrowings	2,431,992	(14,481,044)
Activity in Federal Home Loan Bank advances:
Advances	5,000,000	36,000,000
Calls and maturities	(24,000,000)	(13,100,000)
Prepayments	(15,832,099)
Net (decrease) increase in other borrowings	(9,941,030)	7,536,866
Proceeds from issuance of Series A Subordinated Notes and detachable warrants to purchase 54,000 shares of common stock		2,700,000
Payment of cash dividends on common and preferred stock	(3,274,991)	(3,136,626)
Proceeds from issuance of common stock, net	409,379	183,507
Net cash provided by financing activities	49,283,981	16,300,132
Net increase (decrease) in cash and due from banks	3,400,905	(1,931,178)
Cash and due from banks, beginning	42,030,806	35,878,046
Cash and due from banks, ending	45,431,711	33,946,868
Supplemental disclosure of cash flow information, cash payments for:
Interest	18,521,222	23,362,893
Income/franchise taxes	1,196,948	1,497,611
Supplemental schedule of noncash investing activities:
Change in accumulated other comprehensive income, unrealized gains on securities available for sale, net	3,468,469	3,867,489
Transfers of loans to other real estate owned	8,220,271	5,442,568
Series E Preferred Stock [Member]
Activity in Federal Home Loan Bank advances:
Proceeds from issuance of Series E Noncumulative Convertible		3,187,233
Series F Preferred Stock [Member]
Activity in Federal Home Loan Bank advances:
Proceeds from issuance of Series F Noncumulative Perpetual Preferred Stock	40,074,341
Redemption of Series D Cumulative Perpetual Preferred Stock	40,074,341
Series D Preferred Stock [Member]
Activity in Federal Home Loan Bank advances:
Proceeds from issuance of Series F Noncumulative Perpetual Preferred Stock	(38,237,000)
Redemption of Series D Cumulative Perpetual Preferred Stock	$ (38,237,000)

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Note 5 - Earnings Per Share

3 Months Ended

Sep. 30, 2011

Earnings Per Share [Text Block]

NOTE 5 - EARNINGS PER SHARE

The following information was used in the computation of earnings per share on a basic and diluted basis:

	Three months ended					Nine months ended
	September 30,					September 30,
	2011			2010		2011			2010
Net income	$	2,266,601		$	2,123,872	$	7,271,299		$	5,138,642
Less:  Net income attributable to noncontrolling interests		103,446			109,786		308,215			95,046
Net income attributable to QCR Holdings, Inc.	$	2,163,155		$	2,014,086	$	6,963,084		$	5,043,596
Less:  Preferred stock dividends and discount accretion		2,188,058	**		1,028,686		4,256,171	**		3,099,418
Net income (loss) attributable to QCR Holdings, Inc. common stockholders	$	(24,903	)	$	985,400	$	2,706,913		$	1,944,178
Earnings (loss) per common share attributable to QCR Holdings, Inc. common stockholders
Basic	$	(0.01	)	$	0.21	$	0.56		$	0.42
Diluted	$	(0.01	)	$	0.21	$	0.56		$	0.42
Weighted average common shares outstanding		4,866,692			4,598,566		4,795,382			4,587,883
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		-	*		21,008		52,051			29,219
Weighted average common and common equivalent shares outstanding		4,866,692	*		4,619,574		4,847,433			4,617,102

*In accordance with U.S. GAAP, the common equivalent shares are not considered in the calculation of diluted earnings per share as the numerator is a net loss.

**For the three and nine months ended September 30, 2011, includes approximately $1.2 million of accelerated accretion of discount on the Treasury Capital Purchase Program preferred shares repurchased during the third quarter of 2011.  See Note 8 for additional information.

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Note 6 - Business Segment Information

3 Months Ended

Sep. 30, 2011

Segment Reporting Disclosure [Text Block]

NOTE 6 – BUSINESS SEGMENT INFORMATION

Selected financial and descriptive information is required to be disclosed for reportable operating segments, applying a “management perspective” as the basis for identifying reportable segments.  The management perspective is determined by the view that management takes of the segments within the Company when making operating decisions, allocating resources, and measuring performance.  The segments of the Company have been defined by the structure of the Company’s internal organization, focusing on the financial information that the Company’s operating decision-makers routinely use to make decisions about operating matters.

The Company’s primary segment, Commercial Banking, is geographically divided by markets into the secondary segments which are the three subsidiary banks wholly-owned by the Company:  QCBT, CRBT, and RB&T.  Each of these secondary segments offer similar products and services, but are managed separately due to different pricing, product demand, and consumer markets.  Each offers commercial, consumer, and mortgage loans and deposit services.

The Company’s Wealth Management segment represents the trust and asset management and investment management and advisory services offered at the Company’s three subsidiary banks in aggregate.  This segment generates income primarily from fees charged based on assets under administration for corporate and personal trusts, custodial services, and investments managed.  No assets of the subsidiary banks have been allocated to the Wealth Management segment.

The Company’s All Other segment includes the operations of all other consolidated subsidiaries and/or defined operating segments that fall below the segment reporting thresholds.  This segment includes the corporate operations of the parent company and the 91% owned real estate holding operations of VPHC.

Selected financial information on the Company’s business segments is presented as follows for the three and nine months ended September 30, 2011 and 2010.

	Commercial Banking
	Quad City		Cedar Rapids		Rockford			Wealth					Intercompany			Consolidated
	Bank & Trust		Bank & Trust		Bank & Trust			Management		All other			Eliminations			Total
Three Months Ended September 30, 2011
Total revenue	$	12,147,213	$	7,110,970	$	3,377,454		$	1,311,647	$	3,319,882		$	(3,362,429	)	$	23,904,737
Net interest income	$	7,944,108	$	3,873,339	$	2,355,471		$	-	$	(344,214	)	$	-		$	13,828,704
Net income attributable to QCR Holdings, Inc.	$	1,854,914	$	1,375,114	$	(243,710	)	$	257,611	$	2,192,761		$	(3,273,535	)	$	2,163,155
Total assets	$	1,056,656,935	$	565,822,310	$	287,574,174		$	-	$	193,059,135		$	(204,152,062	)	$	1,898,960,492
Provision for loan/lease losses	$	1,158,965	$	250,000	$	1,048,000		$	-	$	-		$	-		$	2,456,965
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688
Three Months Ended September 30, 2010
Total revenue	$	11,655,728	$	7,455,990	$	3,575,942		$	1,490,742	$	3,194,862		$	(3,274,722	)	$	24,098,542
Net interest income	$	6,979,173	$	3,763,143	$	2,042,785		$	-	$	(621,526	)	$	-		$	12,163,575
Net income attributable to QCR Holdings, Inc.	$	1,601,579	$	881,372	$	235,095		$	442,634	$	2,038,028		$	(3,184,622	)	$	2,014,086
Total assets	$	982,315,353	$	548,462,235	$	274,910,743		$	-	$	185,977,307		$	(184,740,323	)	$	1,806,925,315
Provision for loan/lease losses	$	241,232	$	950,000	$	243,000		$	-	$	-		$	-		$	1,434,232
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688
Nine Months Ended September 30, 2011
Total revenue	$	35,990,157	$	21,482,485	$	10,046,334		$	4,238,644	$	10,776,476		$	(10,885,546	)	$	71,648,550
Net interest income	$	22,772,375	$	11,859,003	$	6,641,533		$	-	$	(1,284,350	)	$	-		$	39,988,561
Net income attributable to QCR Holdings, Inc.	$	5,777,707	$	3,964,627	$	45,697		$	741,263	$	7,054,192		$	(10,620,402	)	$	6,963,084
Total assets	$	1,056,656,935	$	565,822,310	$	287,574,174		$	-	$	193,059,135		$	(204,152,062	)	$	1,898,960,492
Provision for loan/lease losses	$	2,236,850	$	1,035,000	$	1,925,000		$	-	$	-		$	-		$	5,196,850
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688
Nine Months Ended September 30, 2010
Total revenue	$	35,704,318	$	21,609,584	$	10,437,241		$	3,764,384	$	8,712,310		$	(8,923,912	)	$	71,303,925
Net interest income	$	21,597,716	$	11,786,684	$	5,933,622		$	-	$	(1,802,787	)	$	-		$	37,515,235
Net income attributable to QCR Holdings, Inc.	$	4,569,482	$	2,517,463	$	768,950		$	679,350	$	5,181,035		$	(8,672,684	)	$	5,043,596
Total assets	$	982,315,353	$	548,462,235	$	274,910,743		$	-	$	185,977,307		$	(184,740,323	)	$	1,806,925,315
Provision for loan/lease losses	$	1,243,650	$	2,900,000	$	270,000		$	-	$	-		$	-		$	4,413,650
Goodwill	$	3,222,688	$	-	$	-		$	-	$	-		$	-		$	3,222,688

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Note 4 - Federal Home Loan Bank Advances

3 Months Ended

Sep. 30, 2011

Federal Home Loan Bank Advances, Disclosure [Text Block]

NOTE 4 – FEDERAL HOME LOAN BANK ADVANCES

The subsidiary banks are members of the Federal Home Loan Bank (“FHLB”) of Des Moines or Chicago.  As of September 30, 2011 and December 31, 2010, the subsidiary banks held $11,549,000 and $12,980,200, respectively, of FHLB stock, which is included in restricted investment securities on the consolidated balance sheet.

During the first quarter of 2011, the Company’s largest subsidiary bank, QCBT, prepaid $15,000,000 of FHLB advances with a weighted average interest rate of 4.87% and a weighted average maturity of May 2012.  In addition, QCBT modified $20,350,000 of fixed rate FHLB advances with a weighted average interest rate of 4.33% and a weighted average maturity of October 2013 into new fixed rate FHLB advances with a weighted average interest rate of 3.35% and a weighted average maturity of February 2014.

Maturity and interest rate information on FHLB advances for the Company as of September 30, 2011 and December 31, 2010 is as follows:

	September 30, 2011
			Weighted					Weighted
			Average			Amount Due		Average
			Interest Rate			with		Interest Rate
	Amount Due		at Quarter-End			Putable Option *		at Quarter-End
Maturity:
Year ending December 31:
2012	$	19,400,000		3.94	%	$	5,000,000		4.93	%
2013		24,000,000		2.64			-		-
2014		23,850,000		3.37			-		-
2015		14,000,000		1.68			-		-
Thereafter		123,500,000		4.09			103,500,000		4.25
Total FHLB advances	$	204,750,000		3.74		$	108,500,000		4.28
	December 31, 2010
			Weighted					Weighted
			Average			Amount Due		Average
			Interest Rate			with		Interest Rate
	Amount Due		at Year-End			Putable Option *		at Year-End
Maturity:
Year ending December 31:
2011	$	19,000,000		2.99	%	$	7,500,000		5.12	%
2012		49,750,000		4.43			35,000,000		4.77
2013		24,000,000		2.64			2,000,000		3.48
2014		3,500,000		2.19			-		-
2015		14,000,000		1.68			-		-
Thereafter		128,500,000		4.11			118,500,000		4.13
Total FHLB advances	$	238,750,000		3.84		$	163,000,000		4.30

*Of the advances outstanding, a large portion have putable options which allow the FHLB, at its discretion, to terminate the advances and require the subsidiary banks to repay at predetermined dates prior to the stated maturity date of the advances.

Advances are collateralized by securities with a carrying value of $22,185,875 and $65,376,627 as of September 30, 2011 and December 31, 2010, respectively, and by loans pledged of $419,940,309 and $386,087,610, respectively, in aggregate.  On pledged loans, the FHLB applies varying collateral maintenance levels from 125% to 333% based on the loan type.

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Consolidated Statement of Changes in Stockholders' Equity (Unaudite) (USD $)	Preferred Stock [Member] Series F Preferred Stock [Member]	Preferred Stock [Member] Series D Preferred Stock [Member]	Preferred Stock [Member] Exchange Of Series B To Series E Non-Cumulative Perpetual Convertible Preferred Stock [Member]	Preferred Stock [Member] Exchange Of Series C To Series E Non-Cumulative Perpetual Convertible Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member] Series F Preferred Stock [Member]	Additional Paid-in Capital [Member] Series D Preferred Stock [Member]	Additional Paid-in Capital [Member] Exchange Of Series B To Series E Non-Cumulative Perpetual Convertible Preferred Stock [Member]	Additional Paid-in Capital [Member] Exchange Of Series C To Series E Non-Cumulative Perpetual Convertible Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest [Member]	Treasury Stock [Member]	Series F Preferred Stock [Member]	Series D Preferred Stock [Member]	Total
Balance at Dec. 31, 2009					$ 38,805	$ 4,674,536					$ 82,194,330	$ 38,458,477	$ 135,608	$ 1,699,630	$ (1,606,510)			$ 125,594,876
Comprehensive income:
Net income												1,292,009		(77,076)				1,214,933
Other comprehensive income (loss), net of tax													1,663,236					1,663,236
Comprehensive income																		2,878,169
Preferred cash dividends declared and accrued												(924,088)						(924,088)
Discount accretion on cumulative preferred stock											109,331	(109,331)
Proceeds from issuance of warrants to purchase 54,000 shares of common stock in conjunction with the issuance of Series A Subordinated Notes											84,240							84,240
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan						6,270					40,849							47,119
Exchange of 367 shares of common stock in connection with payroll taxes for restricted stock						(367)					(2,730)							(3,097)
Stock compensation expense											181,489							181,489
Restricted stock awards						23,598					(23,598)
Other adjustments to noncontrolling interests														(2,065)				(2,065)
Balance at Mar. 31, 2010					38,805	4,704,037					82,583,911	38,717,067	1,798,844	1,620,489	(1,606,510)			127,856,643
Comprehensive income:
Net income												1,737,501		62,336				1,799,837
Other comprehensive income (loss), net of tax													2,043,708					2,043,708
Comprehensive income																		3,843,545
Preferred cash dividends declared and accrued												(924,088)						(924,088)
Common cash dividends declared												(182,730)						(182,730)
Discount accretion on cumulative preferred stock											113,225	(113,225)
Exchange of Non-Cumulative Perpetual Preferred Stock			13,132	7,200					(13,132)	(7,200)
Proceeds from the issuance of shares of Non-Cumulative Perpetual Preferred Stock					4,100						3,199,333							3,203,433
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan						9,629					62,733							72,362
Proceeds from issuance of common stock as a result of stock options exercised						1,504					11,715							13,219
Stock compensation expense											112,693							112,693
Other adjustments to noncontrolling interests														4,706				4,706
Balance at Jun. 30, 2010					63,237	4,715,170					86,063,278	39,234,525	3,842,552	1,687,531	(1,606,510)			133,999,783
Comprehensive income:
Net income												2,014,086		109,786				2,123,872
Other comprehensive income (loss), net of tax													160,545					160,545
Comprehensive income																		2,284,417
Preferred cash dividends declared and accrued												(915,462)						(915,462)
Discount accretion on cumulative preferred stock											113,224	(113,224)
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan						6,420					41,827							48,247
Proceeds from issuance of common stock as a result of stock options exercised						750					4,907							5,657
Additional issuance cost related to the Series E Non-Cumulative Perpetual Convertible Preferred Stock											(16,200)							(16,200)
Stock compensation expense											118,448							118,448
Other adjustments to noncontrolling interests														(2,066)				(2,066)
Balance at Sep. 30, 2010					63,237	4,722,340					86,325,484	40,219,925	4,003,097	1,795,251	(1,606,510)			135,522,824
Balance at Dec. 31, 2010					63,237	4,732,428					86,478,269	40,550,900	704,165	1,648,219	(1,606,510)			132,570,708
Comprehensive income:
Net income												2,124,960		106,524				2,231,484
Other comprehensive income (loss), net of tax													(1,345,554)					(1,345,554)
Comprehensive income																		885,930
Preferred cash dividends declared and accrued												(915,462)						(915,462)
Discount accretion on cumulative preferred stock											116,909	(116,909)
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan						9,081					49,249							58,330
Proceeds from issuance of common stock as a result of stock options exercised						24,300					146,067							170,367
Exchange of common stock						(2,171)					(14,070)							(16,241)
Stock compensation expense											206,569							206,569
Restricted stock awards						69,924					(69,924)
Other adjustments to noncontrolling interests														(2,065)				(2,065)
Balance at Mar. 31, 2011					63,237	4,833,562					86,913,069	41,643,489	(641,389)	1,752,678	(1,606,510)			132,958,136
Comprehensive income:
Net income												2,674,969		98,245				2,773,214
Other comprehensive income (loss), net of tax													2,409,728					2,409,728
Comprehensive income																		5,182,942
Preferred cash dividends declared and accrued												(915,462)						(915,462)
Common cash dividends declared												(185,863)						(185,863)
Discount accretion on cumulative preferred stock											120,280	(120,280)
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan						11,355					61,582							72,937
Proceeds from issuance of common stock as a result of stock options exercised						10,967					65,205							76,172
Exchange of common stock						(379)					(3,033)							(3,412)
Stock compensation expense											141,370							141,370
Other adjustments to noncontrolling interests														(2,066)				(2,066)
Balance at Jun. 30, 2011					63,237	4,855,505					87,298,473	43,096,853	1,768,339	1,848,857	(1,606,510)			137,324,754
Comprehensive income:
Net income												2,163,155		103,446				2,266,601
Other comprehensive income (loss), net of tax													2,404,295					2,404,295
Comprehensive income																		4,670,896
Preferred cash dividends declared and accrued												(835,802)						(835,802)
Discount accretion on cumulative preferred stock											1,352,256	(1,352,256)
Proceeds from the issuance of shares of Non-Cumulative Perpetual Preferred Stock	40,090						40,034,251									40,074,341
Redemption of 38,237 shares of Series D Cumulative Perpetual Preferred Stock		(38,237)						(38,198,763)									(38,237,000)
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan						7,975					43,251							51,226
Stock compensation expense											149,160							149,160
Restricted stock awards						5,000					(5,000)
Other adjustments to noncontrolling interests														(28,702)				(28,702)
Balance at Sep. 30, 2011					$ 65,090	$ 4,868,480					$ 90,673,628	$ 43,071,950	$ 4,172,634	$ 1,923,601	$ (1,606,510)			$ 143,168,873

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Consolidated Statements of Cash Flows (Unaudited) (Parentheticals)	3 Months Ended	9 Months Ended
	Mar. 31, 2010	Sep. 30, 2010
Shares of common stock	54,000	54,000

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Note 1 - Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2011

Significant Accounting Policies [Text Block]

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation:  The interim unaudited consolidated financial statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended December 31, 2010, including QCR Holdings, Inc.’s (the “Company”) Form 10-K filed with the Securities and Exchange Commission on March 7, 2011.  Accordingly, footnote disclosures, which would substantially duplicate the disclosures contained in the audited consolidated financial statements, have been omitted.

The financial information of the Company included herein has been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X.  Such information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented.  Any differences appearing between the numbers presented in financial statements and management’s discussion and analysis are due to rounding.  The results of the interim period ended September 30, 2011, are not necessarily indicative of the results expected for the year ending December 31, 2011.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include three state-chartered commercial banks:  Quad City Bank & Trust Company (“QCBT”), Cedar Rapids Bank & Trust Company (“CRBT”), and Rockford Bank & Trust Company (“RB&T”).  The Company also engages in direct financing lease contracts through its 80% equity investment by QCBT in m2 Lease Funds, LLC (“m2 Lease Funds”), and in real estate holdings through its 91% equity investment in Velie Plantation Holding Company, LLC (“VPHC”).  All material intercompany transactions and balances have been eliminated in consolidation.

Reclassifications:  Certain amounts in the prior year financial statements have been reclassified, with no effect on net income or stockholders’ equity, to conform with current period presentation.

Recent accounting developments:  In April 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-2, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.  ASU 2011-2 amends ASC Topic 310, Receivables, by clarifying guidance for creditors in determining whether a concession has been granted and whether a debtor is experiencing financial difficulties.  The Company adopted ASU 2011-2 effective for the interim period ending September 30, 2011 and applied ASU 2011-2 retrospectively to January 1, 2011.  Adoption did not have a material impact on the consolidated financial statements.  See Note 3 for disclosure of the Company’s troubled debt restructurings.

In April 2011, FASB issued ASU No. 2011-03, Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements. ASU 2011-03 is intended to improve financial reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance guidance related to that criterion. ASU 2011-03 will be effective for the Company on January 1, 2012 and is not expected to have a significant impact on the Company’s consolidated financial statements.

In May 2011, FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRS.  ASU 2011-04 amends Topic 820, Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU 2011-04 is effective for annual periods beginning after December 15, 2011, and is not expected to have a significant impact on the Company’s consolidated financial statements.

In June 2011, FASB issued ASU 2011-05, Comprehensive Income (Topic 220) - Presentation of Comprehensive Income. ASU 2011-05 amends Topic 220, Comprehensive Income, to require that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. ASU 2011-05 is effective for annual periods beginning after December 15, 2011, and is not expected to have a significant impact on the Company’s consolidated financial statements.

In September 2011, FASB issued ASU 2011-08, Intangibles – Goodwill and Other: Testing Goodwill for Impairment.  ASU 2011-08 allows the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining the need to perform step one of the annual test for goodwill impairment.  ASU 2011-08 is effective for annual periods beginning after December 15, 2011.  Early adoption is permitted.  The Company decided to early adopt ASU 2011-08 as of September 30, 2011 and the adoption did not have any effect on the Company’s consolidated financial statements.

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Note 2 - Investment Securities

3 Months Ended

Sep. 30, 2011

Investment Holdings [Text Block]

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of September 30, 2011 and December 31, 2010 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2011:
Securities held to maturity, other bonds	$	200,000	$	-	$	-		$	200,000
Securities available for sale:
U.S. govt. sponsored agency securities	$	412,874,368	$	2,280,889	$	(371,420	)	$	414,783,837
Residential mortgage-backed securities		80,069,540		3,382,915		-			83,452,455
Municipal securities		24,580,364		1,410,952		-			25,991,316
Trust preferred securities		86,200		-		(14,400	)		71,800
Other securities		1,346,972		106,442		(41,036	)		1,412,378
	$	518,957,444	$	7,181,198	$	(426,856	)	$	525,711,786
December 31, 2010:
Securities held to maturity, other bonds	$	300,000	$	-	$	-		$	300,000
Securities available for sale:
U.S. govt. sponsored agency securities	$	401,711,432	$	3,218,843	$	(2,704,919	)	$	402,225,356
Residential mortgage-backed securities		64,912		5,526		-			70,438
Municipal securities		20,134,611		579,215		(110,346	)		20,603,480
Trust preferred securities		86,200		-		(8,200	)		78,000
Other securities		1,414,661		168,331		(13,499	)		1,569,493
	$	423,411,816	$	3,971,915	$	(2,836,964	)	$	424,546,767

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2011 and December 31, 2010, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2011:
Securities available for sale:
U.S. govt. sponsored agency securities	$	102,397,415	$	(371,420	)	$	-	$	-		$	102,397,415	$	(371,420	)
Trust preferred securities		71,800		(14,400	)		-		-			71,800		(14,400	)
Other securities		301,176		(40,510	)		2,725		(526	)		303,901		(41,036	)
	$	102,770,391	$	(426,330	)	$	2,725	$	(526	)	$	102,773,116	$	(426,856	)
December 31, 2010:
Securities available for sale:
U.S. govt. sponsored agency securities	$	159,302,061	$	(2,704,919	)	$	-	$	-		$	159,302,061	$	(2,704,919	)
Municipal securities		4,333,786		(47,884	)		678,378		(62,462	)		5,012,164		(110,346	)
Trust preferred securities		86,200		(8,200	)		-		-			86,200		(8,200	)
Other securities		226,250		(12,671	)		2,872		(828	)		229,122		(13,499	)
	$	163,948,297	$	(2,773,674	)	$	681,250	$	(63,290	)	$	164,629,547	$	(2,836,964	)

At September 30, 2011, the investment portfolio included 331 securities.  Of this number, 54 securities had current unrealized losses with aggregate depreciation less than 1% from the amortized cost basis.  Of these 54, one had unrealized losses for twelve months or more.  All of the debt securities in unrealized loss positions are considered acceptable credit risks.  Based upon an evaluation of the available evidence, including the recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary.  In addition, the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these debt securities before their anticipated recovery.  At September 30, 2011 and December 31, 2010, equity securities represented less than 1% of the total portfolio.

The Company did not recognize other-than-temporary impairment on any debt securities for the three and nine months ended September 30, 2011.   During the three months ended September 30, 2010, the Company’s evaluation determined the decline in fair value for one individual issue trust preferred security was other-than-temporary.  As a result, the Company wrote down the value of this security and recognized a loss totaling $113,800.  The Company does not have any other investments in trust preferred securities.

During the second quarter of 2011, the Company’s evaluation determined that two privately held equity securities experienced declines in fair value that were other-than-temporary.  As a result, the Company wrote down the value of these securities and recognized losses in the amount of $118,847.  The Company did not recognize other-than-temporary impairment on any of its equity securities during the first or third quarters of 2011.  Additionally, the Company did not recognize other-than-temporary impairment on any of its equity securities for the three and nine months ended September 30, 2010.

All sales of securities, as applicable, for the three and nine months ended September 30, 2011 and 2010, respectively, were from securities identified as available for sale.  Information on proceeds received, as well as pre-tax gross gains from sales of those securities is as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2011		September 30, 2010		September 30, 2011		September 30, 2010
Proceeds from sales of securities	$	8,601,107	$	-	$	54,326,191	$	-
Pre-tax gross gains from sales of securities		443,614		-		1,472,528		-

The amortized cost and fair value of securities as of September 30, 2011 by contractual maturity are shown below.  A portion of the Company’s U.S. government sponsored agency securities contain call options which allow the issuer, at its discretion, to call the security at predetermined dates prior to the contractual maturity date.Expected maturities of residential mortgage-backed securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed securities may be called or prepaid without any penalties.  Therefore, these securities are not included in the maturity categories in the following table.  “Other securities” are excluded from the maturity categories as there is no fixed maturity date.

	Amortized
	Cost		Fair Value
Securities held to maturity:
Due in one year or less	$	50,000	$	50,000
Due after one year through five years		100,000		100,000
Due after five years		50,000		50,000
	$	200,000	$	200,000
Securities available for sale:
Due in one year or less	$	2,803,210	$	2,811,980
Due after one year through five years		68,117,087		68,470,834
Due after five years		366,620,635		369,564,139
	$	437,540,932	$	440,846,953
Residential mortgage-backed securities		80,069,540		83,452,455
Other securities		1,346,972		1,412,378
	$	518,957,444	$	525,711,786

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Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended						9 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Sep. 30, 2011	Sep. 30, 2010
Interest and dividend income:
Loans/leases, including fees	$ 16,215,725			$ 16,710,323			$ 48,466,331	$ 51,324,123
Securities:
Taxable	2,877,574			2,595,301			8,035,495	7,771,242
Nontaxable	244,209			224,703			743,368	681,001
Interest-bearing deposits at financial institutions	97,714			55,289			311,807	347,105
Restricted investment securities	126,333			116,175			427,818	328,762
Federal funds sold	7,875			38,465			97,919	123,699
Total interest and dividend income	19,569,430			19,740,256			58,082,738	60,575,932
Interest expense:
Deposits	2,201,070			3,151,191			6,948,265	9,940,844
Short-term borrowings	65,502			132,290			248,079	450,539
Federal Home Loan Bank advances	1,931,259			2,345,944			6,053,134	6,903,991
Other borrowings	1,301,144			1,452,204			3,870,062	4,307,558
Junior subordinated debentures	241,751			495,052			974,637	1,457,765
Total interest expense	5,740,726			7,576,681			18,094,177	23,060,697
Net interest income	13,828,704			12,163,575			39,988,561	37,515,235
Provision for loan/lease losses	2,456,965			1,434,232			5,196,850	4,413,650
Net interest income after provision for loan/lease losses	11,371,739			10,729,343			34,791,711	33,101,585
Noninterest income:
Trust department fees	762,133			803,423			2,607,668	2,438,473
Investment advisory and management fees, gross	549,515			419,416			1,630,976	1,325,910
Deposit service fees	893,685			902,787			2,623,018	2,585,873
Gains on sales of loans, net	408,364			1,109,724			1,923,185	1,831,856
Securities gains	443,614						1,472,528
Losses on sales of other real estate owned, net	42,262			(188,158)			(90,492)	(632,806)
Earnings on bank-owned life insurance	331,440			353,003			1,032,493	973,659
Credit card issuing fees, net of processing costs	178,636			34,866			397,132	231,439
Other	725,658			923,225			1,969,304	1,973,589
Total noninterest income	4,335,307			4,358,286			13,565,812	10,727,993
Noninterest expense:
Salaries and employee benefits	7,651,695			6,910,016			22,480,731	20,869,335
Occupancy and equipment expense	1,359,758			1,410,429			4,017,506	4,147,101
Professional and data processing fees	1,077,435			1,096,100			3,338,935	3,379,080
FDIC and other insurance	578,776			887,509			2,149,093	2,575,000
Loan/lease expense	839,993			678,535			1,772,290	1,658,647
Advertising and marketing	277,376			292,148			836,459	701,603
Postage and telephone	242,103			252,512			703,803	750,611
Stationery and supplies	122,582			135,064			380,754	379,347
Bank service charges	186,351			112,742			525,007	284,134
Prepayment fees on Federal Home Loan Bank advances							832,099
Losses on lease residual values								617,000
Other-than-temporary impairment losses on securities				113,800			118,847	113,800
Other	437,080			244,910			1,185,443	1,314,615
Total noninterest expense	12,773,149			12,133,765			38,340,967	36,790,273
Net income before income taxes	2,933,897			2,953,864			10,016,556	7,039,305
Federal and state income tax expense	667,296			829,992			2,745,257	1,900,663
Net income	2,266,601	2,773,214	2,231,484	2,123,872	1,799,837	1,214,933	7,271,299	5,138,642
Less: Net income attributable to noncontrolling interests	103,446			109,786			308,215	95,046
Net income attributable to QCR Holdings, Inc.	2,163,155			2,014,086			6,963,084	5,043,596
Less: Preferred stock dividends	2,188,058			1,028,686			4,256,171	3,099,418
Net income attributable to QCR Holdings, Inc. common stockholders	$ (24,903)			$ 985,400			$ 2,706,913	$ 1,944,178
Earnings per common share attributable to QCR Holdings, Inc. common shareholders
Basic (in Dollars per share)	$ (0.01)			$ 0.21			$ 0.56	$ 0.42
Diluted (in Dollars per share)	$ (0.01)			$ 0.21			$ 0.56	$ 0.42
Weighted average common shares outstanding (in Shares)	4,866,692			4,598,566			4,795,382	4,587,883
Weighted average common and common equivalent shares outstanding (in Shares)	4,866,692			4,619,574			4,847,433	4,617,102
Cash dividends declared per common share (in Dollars per share)		$ 0.04			$ 0.04		$ 0.04	$ 0.04

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Consolidated Statement of Changes in Stockholders' Equity (Unaudite) (Parentheticals) (USD $)	3 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010
Shares of common stock issued as a result of stock purchased under the Employee Stock Purchase Plan	7,975	11,355	9,081	6,420	9,629	6,270
Shares of common stock issued as a result of stock options exercised		10,967	24,300	750	1,504
Common cash dividends per share (in Dollars per share)		$ 0.04			$ 0.04
Shares of common stock exchanged		379				367
Shares of common stock issued in conjunction with the issuance of Series A Subordinated Notes						54,000
Common Stock [Member]
Shares of common stock issued as a result of stock options exercised			2,171
Series F Preferred Stock [Member]
Shares of Non-Cumulative Perpetual Preferred Stock issued	40,090
Series D Preferred Stock [Member]
Shares of Series D Cumulative Perpetual Preferred Stock redeemed	(38,237)
Exchange Of Series B To E Non-Cumulative Perpetual Convertible Preferred Stock Shares Exchanged [Member]
Shares Non-Cumulative Perpetual Preferred Stock exchanged (in Dollars)					$ 268
Exchange Of Series B To E Non-Cumulative Perpetual Convertible Preferred Stock Shares Issued [Member]
Shares Non-Cumulative Perpetual Preferred Stock exchanged (in Dollars)					13,400
Exchange Of Series C To E Non-Cumulative Perpetual Convertible Preferred Stock Shares Exchanged [Member]
Shares Non-Cumulative Perpetual Preferred Stock exchanged (in Dollars)					300
Exchange Of Series C To E Non-Cumulative Perpetual Convertible Preferred Stock Shares Issued [Member]
Shares Non-Cumulative Perpetual Preferred Stock exchanged (in Dollars)					$ 7,500
Series E Preferred Stock [Member]
Shares of Non-Cumulative Perpetual Preferred Stock issued					4,100

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Note 7 - Fair Value

3 Months Ended

Sep. 30, 2011

Fair Value Disclosures [Text Block]

NOTE 7 – FAIR VALUE

The measurement of fair value under U.S. GAAP uses a hierarchy intended to maximize the use of observable inputs and minimize the use of unobservable inputs.  This hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities.  The three levels are as follows:

1. Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in markets;

2. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

3. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

There were no transfers of assets or liabilities between Levels 1, 2, and 3 of the fair value hierarchy for the nine months ended September 30, 2011 or 2010.

Assets measured at fair value on a recurring basis comprise the following at September 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2011:
Securities available for sale:
U.S. govt. sponsored agency securities	$	414,783,837	$	-	$	414,783,837	$	-
Residential mortgage-backed securities		83,452,455		-		83,452,455		-
Municipal securities		25,991,316		-		25,991,316		-
Trust preferred securities		71,800		-		71,800		-
Other securities		1,412,378		176,068		1,236,310		-
	$	525,711,786	$	176,068	$	525,535,718	$	-
December 31, 2010:
Securities available for sale:
U.S. govt. sponsored agency securities	$	402,225,356	$	-	$	402,225,356	$	-
Residential mortgage-backed securities		70,438		-		70,438		-
Municipal securities		20,603,480		-		20,603,480		-
Trust preferred securities		78,000		-		78,000		-
Other securities		1,569,493		209,680		1,359,813		-
	$	424,546,767	$	209,680	$	424,337,087	$	-

A small portion of the securities available for sale portfolio consists of common stock issued by various unrelated bank holding companies.  The fair values used by the Company are obtained from an independent pricing service and represent quoted market prices for the identical securities (Level 1 inputs).

The large majority of the securities available for sale portfolio consists of U.S. government sponsored agency securities for which the Company obtains fair values from an independent pricing service.  The fair values are determined by pricing models that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems (Level 2 inputs).

Certain financial assets are measured at fair value on a non-recurring basis; that is, the assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Assets measured at fair value on a non-recurring basis comprise the following at September 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2011:
Impaired loans/leases	$	17,555,446	$	-	$	-	$	17,555,446
Other real estate owned		8,950,599		-		-		8,950,599
	$	26,506,045	$	-	$	-	$	26,506,045
December 31, 2010:
Impaired loans/leases	$	21,501,447	$	-	$	-	$	21,501,447
Other real estate owned		9,217,488		-		-		9,217,488
	$	30,718,935	$	-	$	-	$	30,718,935

Impaired loans/leases are evaluated and valued at the time the loan/lease is identified as impaired, at the lower of cost or fair value and are classified as a Level 3 in the fair value hierarchy.  Fair value is measured based on the value of the collateral securing these loans/leases.  Collateral may be real estate and/or business assets, including equipment, inventory and/or accounts receivable, and is determined based on appraisals by qualified licensed appraisers hired by the Company.  Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business.  Other real estate owned in the table above consists of property acquired through foreclosures and settlements of loans.  Property acquired is carried at the lower of the principal amount of loans outstanding, or the estimated fair value of the property, less disposal costs, and is classified as a Level 3 in the fair value hierarchy.

For the impaired loans/leases and other real estate owned, the Company records carrying value at fair value less disposal or selling costs.  The amounts reported in the tables above are fair values before the adjustment for disposal or selling costs.

There have been no changes in valuation techniques used for any assets measured at fair value during the nine months ended September 30, 2011 or 2010.

The following table presents the carrying values and estimated fair values of financial assets and liabilities carried on the Company’s consolidated balance sheets, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis:

	As of September 30, 2011				As of December 31, 2010
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Cash and due from banks	$	45,431,711	$	45,431,711	$	42,030,806	$	42,030,806
Federal funds sold		5,790,000		5,790,000		61,960,000		61,960,000
Interest-bearing deposits at financial institutions		24,665,359		24,665,359		39,745,611		39,745,611
Investment securities:
Held to maturity		200,000		200,000		300,000		300,000
Available for sale		525,711,786		525,711,786		424,546,767		424,546,767
Loans/leases receivable, net		1,178,003,224		1,202,671,000		1,152,173,947		1,169,015,000
Accrued interest receivable		6,812,857		6,812,857		6,435,989		6,435,989
Deposits		1,207,469,246		1,211,463,000		1,114,815,857		1,118,245,000
Short-term borrowings		143,586,491		143,586,491		141,154,499		141,154,499
Federal Home Loan Bank advances		204,750,000		223,371,000		238,750,000		254,307,000
Other borrowings		140,129,755		156,046,000		150,070,785		161,454,000
Accrued interest payable		1,740,603		1,740,603		2,167,648		2,167,648

The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above.  For certain financial assets and liabilities, carrying value approximates fair value due to the nature of the financial instrument.  These instruments include:  cash and due from banks, federal funds sold, interest-bearing deposits at financial institutions, accrued interest receivable and payable, demand and other non-maturity deposits, and short-term borrowings.  The Company used the following methods and assumptions in estimating the fair value of the following instruments:

Loans/leases receivable:  The fair values for variable rate loans equal their carrying values.  The fair values for all other types of loans/leases are estimated using discounted cash flow analyses, using interest rates currently being offered for loans/leases with similar terms to borrowers with similar credit quality.  The fair value of loans held for sale is based on quoted market prices of similar loans sold on the secondary market.

Deposits:  The fair values disclosed for demand and other non-maturity deposits equal their carrying amounts, which represent the amount payable on demand.  Fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on time deposits to a schedule of aggregate expected monthly maturities on time deposits.

Federal Home Loan Bank advances:  The fair value of these instruments is estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

Other borrowings:  The fair value for the wholesale repurchase agreements and fixed rate other borrowings is estimated using rates currently available for debt with similar terms and remaining maturities.  The fair value for variable rate other borrowings is equal to its carrying value.

Junior subordinated debentures:  It is not practicable to estimate the fair value of the Company’s junior subordinated debentures as instruments with similar terms are not readily available in the market place.

Commitments to extend credit:  The fair value of these instruments is not material.

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Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash and due from banks	$ 45,431,711	$ 42,030,806
Federal funds sold	5,790,000	61,960,000
Interest-bearing deposits at financial institutions	24,665,359	39,745,611
Securities held to maturity, at amortized cost	200,000	300,000
Securities available for sale, at fair value	525,711,786	424,546,767
Total securities	525,911,786	424,846,767
Loans receivable held for sale	5,287,924	14,084,859
Loans/leases receivable held for investment	1,192,293,786	1,158,453,744
Gross loans/leases receivable	1,197,581,710	1,172,538,603
Less allowance for estimated losses on loans/leases	(19,578,486)	(20,364,656)
Net loans/leases receivable	1,178,003,224	1,152,173,947
Premises and equipment, net	30,946,211	31,118,744
Goodwill	3,222,688	3,222,688
Accrued interest receivable	6,812,857	6,435,989
Bank-owned life insurance	41,597,883	33,565,390
Prepaid FDIC insurance	3,998,438	5,361,314
Restricted investment securities	15,238,000	16,668,700
Other real estate owned, net	8,287,592	8,534,711
Other assets	9,054,743	10,970,549
Total assets	1,898,960,492	1,836,635,216
Deposits:
Noninterest-bearing	326,710,313	276,827,205
Interest-bearing	880,758,933	837,988,652
Total deposits	1,207,469,246	1,114,815,857
Short-term borrowings	143,586,491	141,154,499
Federal Home Loan Bank advances	204,750,000	238,750,000
Other borrowings	140,129,755	150,070,785
Junior subordinated debentures	36,085,000	36,085,000
Other liabilities	23,771,127	23,188,367
Total liabilities	1,755,791,619	1,704,064,508
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value; shares authorized 250,000 September 2011 - 65,090 shares issued and outstanding December 2010 - 63,237 shares issued and outstanding	65,090	63,237
Common stock, $1 par value; shares authorized 20,000,000 September 2011 - 4,868,480 shares issued and 4,747,234 outstanding December 2010 - 4,732,428 shares issued and 4,611,182 outstanding	4,868,480	4,732,428
Additional paid-in capital	90,673,628	86,478,269
Retained earnings	43,071,950	40,550,900
Accumulated other comprehensive income	4,172,634	704,165
Noncontrolling interests	1,923,601	1,648,219
Less treasury stock, September 2011 and December 2010 - 121,246 common shares, at cost	(1,606,510)	(1,606,510)
Total stockholders' equity	143,168,873	132,570,708
Total liabilities and stockholders' equity	$ 1,898,960,492	$ 1,836,635,216