10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2014

[  ] 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 Identification No.)

3551 7^th Street, Moline, Illinois 61265

(Address of principal executive offices, including zip code)

(309) 743-7761

(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 the 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 Data 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.      (Check one):               

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 Exchange 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 May 1, 2014, the Registrant had outstanding 7,917,652 shares of common stock, $1.00 par value per share.

QCR HOLDINGS, INC. AND SUBSIDIARIES

INDEX

			Page Number(s)
Part I	FINANCIAL INFORMATION
	Item 1	Consolidated Financial Statements (Unaudited)
		Consolidated Balance Sheets As of March 31, 2014 and December 31, 2013	2
		Consolidated Statements of Income For the Three Months Ended March 31, 2014 and 2013	3
		Consolidated Statements of Comprehensive Income For the Three Months Ended March 31, 2014 and 2013	4
		Consolidated Statement of Changes in Stockholders' Equity For the Three Months Ended March 31, 2014 and 2013	5
		Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2014 and 2013	6-7
		Notes to the Consolidated Financial Statements	8-26
	Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	27-54
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	55-56
	Item 4	Controls and Procedures	57
Part II	OTHER INFORMATION
	Item 1	Legal Proceedings	58
	Item 1A	Risk Factors	58
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	58
	Item 3	Defaults upon Senior Securities	58
	Item 4	Mine Safety Disclosures	58
	Item 5	Other Information	58
	Item 6	Exhibits	59
Signatures			60

1

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of March 31, 2014 and December 31, 2013

	March 31, 2014			December 31, 2013
ASSETS
Cash and due from banks	$	55,444,302		$	41,950,790
Federal funds sold		11,570,000			39,435,000
Interest-bearing deposits at financial institutions		44,389,277			33,044,917
Securities held to maturity, at amortized cost		161,629,152			145,451,895
Securities available for sale, at fair value		545,477,537			551,758,458
Total securities		707,106,689			697,210,353
Loans receivable held for sale		291,600			1,358,290
Loans/leases receivable held for investment		1,492,287,942			1,458,921,268
Gross loans/leases receivable		1,492,579,542			1,460,279,558
Less allowance for estimated losses on loans/leases		(22,653,270	)		(21,448,048	)
Net loans/leases receivable		1,469,926,272			1,438,831,510
Premises and equipment, net		36,625,837			36,755,364
Goodwill		3,222,688			3,222,688
Core deposit intangible		1,820,555			1,870,433
Bank-owned life insurance		52,456,205			52,002,041
Restricted investment securities		17,252,725			17,027,625
Other real estate owned, net		9,674,635			9,729,053
Other assets		16,830,025			23,873,150
Total assets	$	2,426,319,210		$	2,394,952,924
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	579,109,614		$	542,566,087
Interest-bearing		1,092,784,029			1,104,425,156
Total deposits		1,671,893,643			1,646,991,243
Short-term borrowings		165,569,112			149,292,967
Federal Home Loan Bank advances		235,700,000			231,350,000
Other borrowings		142,250,644			142,448,362
Junior subordinated debentures		40,322,765			40,289,830
Other liabilities		29,226,019			37,003,742
Total liabilities		2,284,962,183			2,247,376,144
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value; shares authorized 250,000		14,867			29,867
March 2014 - 14,867 shares issued and outstanding
December 2013 - 29,867 shares issued and outstanding
Common stock, $1 par value; shares authorized 20,000,000		8,038,608			8,005,708
March 2014 - 8,038,608 shares issued and 7,917,362 outstanding
December 2013 - 8,005,708 shares issued and 7,884,462 outstanding
Additional paid-in capital		75,504,884			90,154,528
Retained earnings		67,818,380			64,637,173
Accumulated other comprehensive loss		(8,413,202	)		(13,643,986	)
Less treasury stock, March 2014 and December 2013 - 121,246 common shares, at cost		(1,606,510	)		(1,606,510	)
Total stockholders' equity		141,357,027			147,576,780
Total liabilities and stockholders' equity	$	2,426,319,210		$	2,394,952,924

See Notes to Consolidated Financial Statements (Unaudited)

2

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended March 31, 2014 and 2013

	2014			2013
Interest and dividend income:
Loans/leases, including fees	$	16,775,590		$	15,088,827
Securities:
Taxable		2,582,794			2,460,449
Nontaxable		1,454,056			802,473
Interest-bearing deposits at financial institutions		90,527			59,754
Restricted investment securities		128,925			125,105
Federal funds sold		3,319			874
Total interest and dividend income		21,035,211			18,537,482
Interest expense:
Deposits		1,101,593			1,116,791
Short-term borrowings		51,696			64,267
Federal Home Loan Bank advances		1,555,976			1,732,812
Other borrowings		1,171,531			1,190,755
Junior subordinated debentures		305,174			241,540
Total interest expense		4,185,970			4,346,165
Net interest income		16,849,241			14,191,317
Provision for loan/lease losses		1,094,162			1,057,782
Net interest income after provision for loan/lease losses		15,755,079			13,133,535
Noninterest income:
Trust department fees		1,500,342			1,039,670
Investment advisory and management fees		648,992			609,341
Deposit service fees		1,045,885			907,823
Gains on sales of residential real estate loans		63,487			291,151
Gains on sales government guaranteed portions of loans		194,019			845,224
Securities gains		20,625			-
Earnings on bank-owned life insurance		454,164			438,687
Losses on other real estate owned, net		(18,048	)		(446,630	)
Other		837,375			1,518,763
Total noninterest income		4,746,841			5,204,029
Noninterest expense:
Salaries and employee benefits		10,017,918			8,742,683
Occupancy and equipment expense		1,894,288			1,428,870
Professional and data processing fees		1,584,406			1,140,061
FDIC and other insurance		714,750			555,911
Loan/lease expense		345,636			245,091
Advertising and marketing		337,587			264,568
Postage and telephone		290,675			218,691
Stationery and supplies		151,751			110,670
Bank service charges		298,032			275,495
Acquisition and data conversion costs		-			356,578
Other		505,377			619,882
Total noninterest expense		16,140,420			13,958,500
Net income before income taxes		4,361,500			4,379,064
Federal and state income tax expense		472,285			1,113,920
Net income	$	3,889,215		$	3,265,144
Less: Preferred stock dividends		708,008			810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$	3,181,207		$	2,454,307
Earnings per common share attributable to QCR Holdings, Inc. common shareholders
Basic	$	0.40		$	0.50
Diluted	$	0.40		$	0.49
Weighted average common shares outstanding		7,901,035			4,927,591
Weighted average common and common equivalent shares outstanding		8,030,043			5,034,342
Cash dividends declared per common share	$	-		$	-

See Notes to Consolidated Financial Statements (Unaudited)

3

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended March 31, 2014 and 2013

	2014		2013
Net income	$	3,889,215	$	3,265,144
Other comprehensive income (loss):
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period before tax		8,490,174		(1,356,552	)
Less reclassification adjustment for gains included in net income before tax		20,625		-
		8,469,549		(1,356,552	)
Tax expense (benefit)		3,238,765		(520,194	)
Other comprehensive income (loss), net of tax		5,230,784		(836,358	)
Comprehensive income attributable to QCR Holdings, Inc.	$	9,119,999	$	2,428,786

See Notes to Consolidated Financial Statements (Unaudited)

4

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

Three Months Ended March 31, 2014 and 2013

	Preferred Stock			Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance December 31, 2013	$	29,867		$	8,005,708		$	90,154,528		$	64,637,173		$	(13,643,986	)	$	(1,606,510	)	$	147,576,780
Net income		-			-			-			3,889,215			-			-			3,889,215
Other comprehensive income, net of tax		-			-			-			-			5,230,784			-			5,230,784
Preferred cash dividends declared		-			-			-			(708,008	)		-			-			(708,008	)
Redemption of 15,000 shares of Series F Noncumulative Perpetual Preferred Stock		(15,000	)		-			(14,985,000	)		-			-			-			(15,000,000	)
Proceeds from issuance of 6,189 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-			6,189			78,256			-			-			-			84,445
Proceeds from issuance of 9,814 shares of common stock as a result of stock options exercised		-			9,814			85,582			-			-			-			95,396
Stock compensation expense		-			-			347,752												347,752
Tax benefit of nonqualified stock options exercised		-			-			18,647			-			-			-			18,647
Restricted stock awards		-			27,197			(27,197	)		-			-			-			-
Exchange of 10,300 shares of common stock in connection with restricted stock vested, net		-			(10,300	)		(167,684	)		-			-			-			(177,984	)
Balance March 31, 2014	$	14,867		$	8,038,608		$	75,504,884		$	67,818,380		$	(8,413,202	)	$	(1,606,510	)	$	141,357,027

	Preferred Stock		Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance December 31, 2012	$	54,867	$	5,039,448		$	78,912,791		$	53,326,542		$	4,706,683		$	(1,606,510	)	$	140,433,821
Net income		-		-			-			3,265,144			-			-			3,265,144
Other comprehensive loss, net of tax		-		-			-			-			(836,358	)		-			(836,358	)
Preferred cash dividends declared		-		-			-			(810,837	)		-			-			(810,837	)
Proceeds from issuance of 5,884 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		-		5,884			63,487			-			-			-			69,371
Proceeds from issuance of 19,278 shares of common stock as a result of stock options exercised		-		19,278			153,550			-			-			-			172,828
Exchange of 7,048 shares of common stock in connection with stock options exercised		-		(7,048	)		(111,628	)		-			-			-			(118,676	)
Stock compensation expense		-		-			293,798												293,798
Tax benefit of nonqualified stock options exercised		-		-			35,251			-			-			-			35,251
Restricted stock awards		-		16,798			(16,798	)		-			-			-			-
Exchange of 16,798 shares of common stock in connection with restricted stock vested, net		-		(16,798	)		(289,113	)		-			-			-			(305,911	)
Balance March 31, 2013	$	54,867	$	5,057,562		$	79,041,338		$	55,780,849		$	3,870,325		$	(1,606,510	)	$	142,198,431

See Notes to Consolidated Financial Statements (Unaudited)

5

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31, 2014 and 2013

	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,889,215		$	3,265,144
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		692,562			584,884
Provision for loan/lease losses		1,094,162			1,057,782
Stock-based compensation expense		347,752			293,798
Deferred compensation expense accrued		347,850			204,794
Losses on other real estate owned, net		18,048			446,630
Amortization of premiums on securities, net		535,951			974,045
Securities gains		(20,625	)		-
Loans originated for sale		(6,354,404	)		(26,928,996	)
Proceeds on sales of loans		7,678,600			30,382,098
Gains on sales of residential real estate loans		(63,487	)		(291,151	)
Gains on sales of government guaranteed portions of loans		(194,019	)		(845,224	)
Amortization of core deposit intangible		49,878			-
Accretion of acquisition fair value adjustments, net		(161,042	)		-
Increase in cash value of bank-owned life insurance		(454,164	)		(438,687	)
Decrease in other assets		3,804,360			587,964
Decrease in other liabilities		(8,049,459	)		(2,056,297	)
Net cash provided by operating activities	$	3,161,178		$	7,236,784
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in federal funds sold		27,865,000			26,560,000
Net increase in interest-bearing deposits at financial institutions		(11,344,360	)		(11,422,165	)
Proceeds from sales of other real estate owned		97,120			15,989
Activity in securities portfolio:
Purchases		(26,142,834	)		(187,650,573	)
Calls, maturities and redemptions		10,563,599			82,114,256
Paydowns		6,547,632			12,893,508
Sales		7,020,625			-
Activity in restricted investment securities:
Purchases		(1,040,000	)		(1,743,750	)
Redemptions		814,900			2,193,900
Net increase in loans/leases originated and held for investment		(33,066,658	)		(7,125,623	)
Purchase of premises and equipment		(563,035	)		(775,714	)
Net cash used in investing activities	$	(19,248,011	)	$	(84,940,172	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts		24,915,536			46,379,158
Net increase in short-term borrowings		16,276,145			770,510
Activity in Federal Home Loan Bank advances:
Advances		60,700,000			46,000,000
Calls and maturities		(56,350,000	)		(43,000,000	)
Net decrease in other borrowings		(200,000	)		-
Payment of cash dividends on common and preferred stock		(941,177	)		(1,002,789	)
Redemption of 15,000 shares of Series F Noncumulative Perpetual Preferred Stock, net		(15,000,000	)		-
Proceeds from issuance of common stock, net		179,841			242,200
Net cash provided by financing activities	$	29,580,345		$	49,389,079
Net increase (decrease) in cash and due from banks		13,493,512			(28,314,309	)
Cash and due from banks, beginning		41,950,790			61,568,446
Cash and due from banks, ending	$	55,444,302		$	33,254,137

(Continued)

6

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - continued

Three Months Ended March 31, 2014 and 2013

	2014			2013
Supplemental disclosure of cash flow information, cash payments for:
Interest	$	4,140,254		$	4,472,977
Income/franchise taxes	$	1,365,000		$	717,300
Supplemental schedule of noncash investing activities:
Change in accumulated other comprehensive income (loss), unrealized gains (losses) on securities available for sale, net	$	5,230,784		$	(836,358	)
Exchange of shares of common stock in connection with payroll taxes for restricted stock and in connection with stock options exercised	$	(177,984	)	$	(424,587	)
Transfers of loans to other real estate owned	$	60,750		$	187,500

See Notes to Consolidated Financial Statements (Unaudited)

7

Part I

Item 1

QCR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2014

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, 2013, included in QCR Holdings, Inc.’s (the “Company”) Form 10-K filed with the Securities and Exchange Commission on March 10, 2014. 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 March 31, 2014, are not necessarily indicative of the results expected for the year ending December 31, 2014.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include three commercial banks: Quad City Bank & Trust Company (“QCBT”), Cedar Rapids Bank & Trust Company (“CRBT”), and Rockford Bank & Trust Company (“RB&T”). On May 13, 2013, the Company acquired Community National Bancorporation (“Community National”) and its banking subsidiary Community National Bank (“CNB”). The Company operated CNB as a separate banking charter from the acquisition date until October 26, 2013, when CNB’s charter was merged with and into CRBT. CNB“s merged branch offices operate as a division of CRBT under the name of “Community Bank & Trust”. QCBT, CRBT, and RB&T are all state-chartered commercial banks. The Company also engages in direct financing lease contracts through m2 Lease Funds, LLC (“m2 Lease Funds”), a wholly-owned subsidiary of QCBT. All material intercompany transactions and balances have been eliminated in consolidation.

Recent accounting developments: In July 2013, theFinancial Accounting Standards Board (“FASB”) issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Adoption did not have a significant impact on the Company’s consolidated financial statements.

In January 2014, FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The objective of ASU 2014-04 is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU 2014-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Management is in the process of evaluating the impact of ASU 2014-04 on the Company’s consolidated financial statements.

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

8

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 March 31, 2014 and December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2014
Securities held to maturity:
Municipal securities	$	160,579,152	$	756,828	$	(4,768,120	)	$	156,567,860
Other securities		1,050,000		-		-			1,050,000
	$	161,629,152	$	756,828	$	(4,768,120	)	$	157,617,860
Securities available for sale:
U.S. govt. sponsored agency securities	$	363,901,863	$	31,503	$	(13,595,807	)	$	350,337,559
Residential mortgage-backed and related securities		159,343,903		1,377,020		(2,601,522	)		158,119,401
Municipal securities		34,495,776		997,316		(417,026	)		35,076,066
Other securities		1,378,550		565,961		-			1,944,511
	$	559,120,092	$	2,971,800	$	(16,614,355	)	$	545,477,537
December 31, 2013:
Securities held to maturity:
Municipal securities	$	144,401,895	$	299,789	$	(7,111,579	)	$	137,590,105
Other securities		1,050,000		-		-			1,050,000
	$	145,451,895	$	299,789	$	(7,111,579	)	$	138,640,105
Securities available for sale:
U.S. govt. sponsored agency securities	$	376,574,132	$	41,696	$	(20,142,841	)	$	356,472,987
Residential mortgage-backed and related securities		160,110,199		1,153,409		(3,834,157	)		157,429,451
Municipal securities		35,813,866		923,315		(778,324	)		35,958,857
Other securities		1,372,365		524,798		-			1,897,163
	$	573,870,562	$	2,643,218	$	(24,755,322	)	$	551,758,458

The Company’s held to maturity municipal securities consist largely of private issues of municipal debt. The municipalities are located within the Midwest with a portion in or adjacent to the communities of QCBT and CRBT. The municipal debt investments are underwritten using specific guidelines with ongoing monitoring.

The Company’s residential mortgage-backed and related securities portfolio consists entirely of government sponsored or government guaranteed securities. The Company has not invested in commercial mortgage-backed securities or pooled trust preferred securities.

9

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 March 31, 2014 and December 31, 2013, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
March 31, 2014:
Securities held to maturity:
Municipal securities	$	90,268,363	$	(3,972,217	)	$	11,141,166	$	(795,903	)	$	101,409,529	$	(4,768,120	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	330,406,007	$	(12,809,546	)	$	11,194,076	$	(786,261	)	$	341,600,083	$	(13,595,807	)
Residential mortgage-backed and related securities		74,273,019		(1,586,915	)		21,330,340		(1,014,607	)		95,603,359		(2,601,522	)
Municipal securities		12,715,294		(372,659	)		1,699,797		(44,367	)		14,415,091		(417,026	)
	$	417,394,320	$	(14,769,120	)	$	34,224,213	$	(1,845,235	)	$	451,618,533	$	(16,614,355	)
December 31, 2013:
Securities held to maturity:
Municipal securities	$	101,983,602	$	(6,711,240	)	$	2,697,375	$	(400,339	)	$	104,680,977	$	(7,111,579	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	333,194,820	$	(19,141,077	)	$	10,978,390	$	(1,001,764	)	$	344,173,210	$	(20,142,841	)
Residential mortgage-backed and related securities		94,723,092		(2,947,770	)		14,117,719		(886,387	)		108,840,811		(3,834,157	)
Municipal securities		13,890,692		(724,939	)		985,687		(53,385	)		14,876,379		(778,324	)
	$	441,808,604	$	(22,813,786	)	$	26,081,796	$	(1,941,536	)	$	467,890,400	$	(24,755,322	)

At March 31, 2014, the investment portfolio included 539 securities. Of this number, 323 securities had current unrealized losses with aggregate depreciation of less than 4% from the total amortized cost basis. Of these, 38 securities had an unrealized loss 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 March 31, 2014 and December 31, 2013, equity securities represented less than 1% of the total portfolio.

The Company did not recognize other-than-temporary impairment on any debt or equity securities for the three months ended March 31, 2014 and 2013.

10

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

All sales of securities for the three months ended March 31, 2014 and 2013, respectively, were from securities identified as available-for-sale. Information on proceeds received, as well as pre-tax gross gains from sales on those securities is as follows:

	Three Months Ended
	March 31, 2014		March 31, 2013
Proceeds from sales of securities	$	7,020,625	$	-
Pre-tax gross gains from sales of securities		20,625		-

The amortized cost and fair value of securities as of March 31, 2014 by contractual maturity are shown below. Expected maturities of residential mortgage-backed and related securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed and related 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” available for sale are excluded from the maturity categories as there is no fixed maturity date for those securities.

	Amortized Cost		Fair Value
Securities held to maturity:
Due in one year or less	$	2,298,028	$	2,299,876
Due after one year through five years		10,898,311		10,876,493
Due after one year through five years		148,432,813		144,441,491
	$	161,629,152	$	157,617,860
Securities available for sale:
Due in one year or less	$	5,399,927	$	5,412,462
Due after one year through five years		51,172,655		50,810,680
Due after five years		341,825,057		329,190,483
	$	398,397,639	$	385,413,625
Residential mortgage-backed and related securities		159,343,903		158,119,401
Other securities		1,378,550		1,944,511
	$	559,120,092	$	545,477,537

Portions of the U.S. government sponsored agency securities and municipal securities contain call options, at the discretion of the issuer, to terminate the security at par and at predetermined dates prior to the stated maturity, summarized as follows:

	Amortized Cost		Fair Value
Securities held to maturity:
Municipal securities	$	107,791,951	$	104,916,513
Securities available for sale:
U.S. govt. sponsored agency securities		307,435,005		295,518,088
Municipal securities		22,063,064		22,190,224
	$	329,498,069	$	317,708,312

11

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 March 31, 2014 and December 31, 2013 is presented as follows:

	As of March 31, 2014			As of December 31, 2013
Commercial and industrial loans	$	442,350,475		$	431,688,129
Commercial real estate loans
Owner-occupied commercial real estate		269,483,524			261,215,912
Commercial construction, land development, and other land		55,194,025			57,844,902
Other non owner-occupied commercial real estate		354,550,656			352,692,115
		679,228,205			671,752,929
Direct financing leases *		139,994,059			128,901,442
Residential real estate loans **		148,950,217			147,356,323
Installment and other consumer loans		76,809,540			76,033,810
		1,487,332,496			1,455,732,633
Plus deferred loan/lease origination costs, net of fees		5,247,046			4,546,925
		1,492,579,542			1,460,279,558
Less allowance for estimated losses on loans/leases		(22,653,270	)		(21,448,048	)
	$	1,469,926,272		$	1,438,831,510
* Direct financing leases:
Net minimum lease payments to be received	$	158,423,507		$	145,662,254
Estimated unguaranteed residual values of leased assets		1,611,999			1,694,499
Unearned lease/residual income		(20,041,447	)		(18,455,311	)
		139,994,059			128,901,442
Plus deferred lease origination costs, net of fees		5,347,779			4,814,183
		145,341,838			133,715,625
Less allowance for estimated losses on leases		(2,820,239	)		(2,517,217	)
	$	142,521,599		$	131,198,408

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. There were no losses related to residual values for the three months ended March 31, 2014 and 2013.

**Includes residential real estate loans held for sale totaling $291,600 and $1,358,290 as of March 31, 2014, and December 31, 2013, respectively.

12

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The aging of the loan/lease portfolio by classes of loans/leases as of March 31, 2014 and December 31, 2013 is presented as follows:

	As of March 31, 2014
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	$	440,037,552		$	679,842		$	82,110		$	4,838		$	1,546,133		$	442,350,475
Commercial Real Estate
Owner-Occupied Commercial Real Estate		268,087,219			217,205			101,723			-			1,077,377			269,483,524
Commercial Construction, Land Development, and Other Land		53,069,537			943,219			-			-			1,181,269			55,194,025
Other Non Owner-Occupied Commercial Real Estate		342,951,740			246,141			1,104,646			-			10,248,129			354,550,656
Direct Financing Leases		136,956,753			1,684,403			120,969			735			1,231,199			139,994,059
Residential Real Estate		145,891,697			1,562,455			-			-			1,496,065			148,950,217
Installment and Other Consumer		75,402,962			429,310			104,031			2			873,235			76,809,540
	$	1,462,397,460		$	5,762,575		$	1,513,479		$	5,575		$	17,653,407		$	1,487,332,496
As a percentage of total loan/lease portfolio		98.32	%		0.39	%		0.10	%		0.00	%		1.19	%		100.00	%

	As of December 31, 2013
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	$	429,557,699		$	199,949		$	185,500		$	-		$	1,744,981		$	431,688,129
Commercial Real Estate
Owner-Occupied Commercial Real Estate		258,557,660			465,418			993,163			60,286			1,139,385			261,215,912
Commercial Construction, Land Development, and Other Land		56,301,186			358,626			-			-			1,185,090			57,844,902
Other Non Owner-Occupied Commercial Real Estate		341,743,730			476,877			151,017			-			10,320,491			352,692,115
Direct Financing Leases		126,878,515			714,464			414,005			-			894,458			128,901,442
Residential Real Estate		142,353,936			3,088,516			275,262			20,126			1,618,483			147,356,323
Installment and Other Consumer		74,811,489			127,082			116,468			3,762			975,009			76,033,810
	$	1,430,204,215		$	5,430,932		$	2,135,415		$	84,174		$	17,877,897		$	1,455,732,633
As a percentage of total loan/lease portfolio		98.25	%		0.37	%		0.15	%		0.01	%		1.23	%		100.00	%

13

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Nonperforming loans/leases by classes of loans/leases as of March 31, 2014 and December 31, 2013 are presented as follows:

	As of March 31, 2014
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	$	4,838	$	1,546,133	$	179,695	$	1,730,666		9.29	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		1,077,377		-		1,077,377		5.78	%
Commercial Construction, Land Development, and Other Land		-		1,181,269		-		1,181,269		6.34	%
Other Non Owner-Occupied Commercial Real Estate		-		10,248,129		-		10,248,129		55.00	%
Direct Financing Leases		735		1,231,199		89,443		1,321,377		7.09	%
Residential Real Estate		-		1,496,065		347,543		1,843,608		9.89	%
Installment and Other Consumer		2		873,235		357,000		1,230,237		6.60	%
	$	5,575	$	17,653,407	$	973,681	$	18,632,663		100.00	%

*Nonaccrual loans/leases includes $10,666,735 of troubled debt restructurings, including $75,371 in commercial and industrial loans, $9,862,220 in commercial real estate loans, $70,144 in direct financing leases, $449,525 in residential real estate loans, and $209,475 in installment loans.

	As of December 31, 2013
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	$	-	$	1,744,981	$	878,381	$	2,623,362		12.81	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		60,286		1,139,385		-		1,199,671		5.86	%
Commercial Construction, Land Development, and Other Land		-		1,185,090		-		1,185,090		5.79	%
Other Non Owner-Occupied Commercial Real Estate		-		10,320,491		905,205		11,225,696		54.80	%
Direct Financing Leases		-		894,458		-		894,458		4.37	%
Residential Real Estate		20,126		1,618,483		371,995		2,010,604		9.82	%
Installment and Other Consumer		3,762		975,009		367,000		1,345,771		6.57	%
	$	84,174	$	17,877,897	$	2,522,581	$	20,484,652		100.00	%

**Nonaccrual loans/leases includes $10,890,785 of troubled debt restructurings, including $77,072 in commercial and industrial loans, $10,077,501 in commercial real estate loans, $446,996 in residential real estate loans, and $289,216 in installment loans.

14

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 months ended March 31, 2014 and 2013, respectively, are presented as follows:

	Three Months Ended March 31, 2014
	Commercial and Industrial			Commercial Real Estate			Direct Financing  Leases			Residential Real  Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,648,774		$	10,705,434		$	2,517,217		$	1,395,849		$	1,180,774		$	21,448,048
Provisions (credits) charged to expense		976,790			(229,985	)		352,647			(4,355	)		(935	)		1,094,162
Loans/leases charged off		(4,023	)		(4,098	)		(65,733	)		(2,712	)		(2,755	)		(79,321	)
Recoveries on loans/leases previously charged off		26,117			116,306			16,108			103			31,747			190,381
Balance, ending	$	6,647,658		$	10,587,657		$	2,820,239		$	1,388,885		$	1,208,831		$	22,653,270

	Three Months Ended March 31, 2013
	Commercial and  Industrial			Commercial  Real Estate		Direct Financing  Leases			Residential Real  Estate			Installment and Other Consumer			Total
Balance, beginning	$	4,531,545		$	11,069,502	$	1,990,395		$	1,070,328		$	1,263,434		$	19,925,204
Provisions (credits) charged to expense		(87,807	)		1,114,294		378,623			8,899			(356,227	)		1,057,782
Loans/leases charged off		(215	)		-		(73,049	)		(112,891	)		(116,612	)		(302,767	)
Recoveries on loans/leases previously charged off		22,741			5,157		554			-			60,791			89,243
Balance, ending	$	4,466,264		$	12,188,953	$	2,296,523		$	966,336		$	851,386		$	20,769,462

The allowance for estimated losses on loans/leases by impairment evaluation and by portfolio segment as of March 31, 2014 and December 31, 2013 is presented as follows:

	As of March 31, 2014
	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	$	732,427		$	2,712,472		$	298,303		$	224,972		$	396,897		$	4,365,071
Allowance for loans/leases collectively evaluated for impairment		5,915,231			7,875,185			2,521,936			1,163,913			811,934			18,288,199
	$	6,647,658		$	10,587,657		$	2,820,239		$	1,388,885		$	1,208,831		$	22,653,270
Loans/leases individually evaluated for impairment	$	1,400,758		$	12,076,304		$	1,320,642		$	1,843,608		$	1,230,235		$	17,871,547
Loans/leases collectively evaluated for impairment		440,949,717			667,151,901			138,673,417			147,106,609			75,579,305			1,469,460,949
	$	442,350,475		$	679,228,205		$	139,994,059		$	148,950,217		$	76,809,540		$	1,487,332,496
Allowance as a percentage of loans/leases individually evaluated for impairment		52.29	%		22.46	%		22.59	%		12.20	%		32.26	%		24.42	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.34	%		1.18	%		1.82	%		0.79	%		1.07	%		1.24	%
		1.50	%		1.56	%		2.01	%		0.93	%		1.57	%		1.52	%

	As of December 31, 2013
	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	$	927,453		$	3,174,704		$	192,847		$	246,266		$	467,552		$	5,008,822
Allowance for loans/leases collectively evaluated for impairment		4,721,321			7,530,730			2,324,370			1,149,583			713,222			16,439,226
	$	5,648,774		$	10,705,434		$	2,517,217		$	1,395,849		$	1,180,774		$	21,448,048
Loans/leases individually evaluated for impairment	$	1,761,850		$	12,956,915		$	894,458		$	2,116,747		$	1,350,450		$	19,080,420
Loans/leases collectively evaluated for impairment		429,926,279			658,796,014			128,006,984			145,239,576			74,683,360			1,436,652,213
	$	431,688,129		$	671,752,929		$	128,901,442		$	147,356,323		$	76,033,810		$	1,455,732,633
Allowance as a percentage of loans/leases individually evaluated for impairment		52.64	%		24.50	%		21.56	%		11.63	%		34.62	%		26.25	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.10	%		1.14	%		1.82	%		0.79	%		0.95	%		1.14	%
		1.31	%		1.59	%		1.95	%		0.95	%		1.55	%		1.47	%

15

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.

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended March 31, 2014 are presented 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	$	441,945	$	517,833	$	-	$	482,151	$	1,888	$	1,888
Commercial Real Estate
Owner-Occupied Commercial Real Estate		389,876		389,876		-		436,412		-		-
Commercial Construction, Land Development, and Other Land		2,124,350		2,247,550		-		2,127,392		-		-
Other Non Owner-Occupied Commercial Real Estate		1,983,846		1,983,846		-		2,376,752		13,283		13,283
Direct Financing Leases		619,800		619,800		-		586,567		-		-
Residential Real Estate		977,436		977,436		-		1,222,955		1,455		1,455
Installment and Other Consumer		833,338		833,338		-		897,665		890		890
	$	7,370,591	$	7,569,679	$	-	$	8,129,894	$	17,516	$	17,516
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	958,813	$	1,449,488	$	732,427	$	910,410	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		224,892		224,892		117,555		112,438		-		-
Commercial Construction, Land Development, and Other Land		685,292		796,492		477,293		685,834		-		-
Other Non Owner-Occupied Commercial Real Estate		6,668,048		7,373,330		2,117,624		6,682,038		-		-
Direct Financing Leases		700,842		700,842		298,303		467,524		-		-
Residential Real Estate		866,172		866,172		224,972		793,141		774		774
Installment and Other Consumer		396,897		396,897		396,897		397,897		-		-
	$	10,500,956	$	11,808,113	$	4,365,071	$	10,049,282	$	774	$	774
Total Impaired Loans/Leases:
Commercial and Industrial	$	1,400,758	$	1,967,321	$	732,427	$	1,392,561	$	1,888	$	1,888
Commercial Real Estate
Owner-Occupied Commercial Real Estate		614,768		614,768		117,555		548,850		-		-
Commercial Construction, Land Development, and Other Land		2,809,642		3,044,042		477,293		2,813,226		-		-
Other Non Owner-Occupied Commercial Real Estate		8,651,894		9,357,176		2,117,624		9,058,790		13,283		13,283
Direct Financing Leases		1,320,642		1,320,642		298,303		1,054,091		-		-
Residential Real Estate		1,843,608		1,843,608		224,972		2,016,096		2,229		2,229
Installment and Other Consumer		1,230,235		1,230,235		396,897		1,295,562		890		890
	$	17,871,547	$	19,377,792	$	4,365,071	$	18,179,176	$	18,290	$	18,290

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

16

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended March 31, 2013 are presented 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	$	402,621	$	775,004	$	-	$	767,929	$	1,924	$	1,924
Commercial Real Estate
Owner-Occupied Commercial Real Estate		498,946		498,946		-		507,451		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		47,958		47,958		-		3,198,617		40,116		40,116
Direct Financing Leases		789,346		789,346		-		831,677		-		-
Residential Real Estate		630,324		630,324		-		810,583		-		-
Installment and Other Consumer		196,615		196,615		-		187,590		2,093		2,093
	$	2,565,810	$	2,938,193	$	-	$	6,303,847	$	44,133	$	44,133
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	211,400	$	264,334	$	498,260	$	216,133	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		3,929,839		3,929,839		1,154,155		3,933,530		2,703		2,703
Other Non Owner-Occupied Commercial Real Estate		9,983,944		10,236,903		2,353,684		10,046,487		4,501		4,501
Direct Financing Leases		421,590		421,590		325,294		273,192		-		-
Residential Real Estate		305,612		305,612		95,232		308,841		-		-
Installment and Other Consumer		927,467		927,467		117,131		629,810		333		333
	$	15,779,852	$	16,085,745	$	4,543,756	$	15,407,993	$	7,537	$	7,537
Total Impaired Loans/Leases:
Commercial and Industrial	$	614,021	$	1,039,338	$	498,260	$	984,062	$	1,924	$	1,924
Commercial Real Estate
Owner-Occupied Commercial Real Estate		498,946		498,946		-		507,451		-		-
Commercial Construction, Land Development, and Other Land		3,929,839		3,929,839		1,154,155		3,933,530		2,703		2,703
Other Non Owner-Occupied Commercial Real Estate		10,031,902		10,284,861		2,353,684		13,245,104		44,617		44,617
Direct Financing Leases		1,210,936		1,210,936		325,294		1,104,869		-		-
Residential Real Estate		935,936		935,936		95,232		1,119,424		-		-
Installment and Other Consumer		1,124,082		1,124,082		117,131		817,400		2,426		2,426
	$	18,345,662	$	19,023,938	$	4,543,756	$	21,711,840	$	51,670	$	51,670

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

17

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Loans/leases, by classes of financing receivable, considered to be impaired as of December 31, 2013 are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid  Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	492,622	$	568,951	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		392,542		392,542		-
Commercial Construction, Land Development, and Other Land		1,943,168		2,054,368		-
Other Non Owner-Occupied Commercial Real Estate		1,790,279		1,902,279		-
Direct Financing Leases		557,469		557,469		-
Residential Real Estate		1,071,927		1,071,927		-
Installment and Other Consumer		509,667		509,667		-
	$	6,757,674	$	7,057,203	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	1,269,228	$	1,956,755	$	927,453
Commercial Real Estate
Owner-Occupied Commercial Real Estate		159,247		159,247		67,498
Commercial Construction, Land Development, and Other Land		888,547		1,011,747		503,825
Other Non Owner-Occupied Commercial Real Estate		7,783,132		8,488,414		2,603,381
Direct Financing Leases		336,989		336,989		192,847
Residential Real Estate		1,044,820		1,044,820		246,266
Installment and Other Consumer		840,783		840,783		467,552
	$	12,322,746	$	13,838,755	$	5,008,822
Total Impaired Loans/Leases:
Commercial and Industrial	$	1,761,850	$	2,525,706	$	927,453
Commercial Real Estate
Owner-Occupied Commercial Real Estate		551,789		551,789		67,498
Commercial Construction, Land Development, and Other Land		2,831,715		3,066,115		503,825
Other Non Owner-Occupied Commercial Real Estate		9,573,411		10,390,693		2,603,381
Direct Financing Leases		894,458		894,458		192,847
Residential Real Estate		2,116,747		2,116,747		246,266
Installment and Other Consumer		1,350,450		1,350,450		467,552
	$	19,080,420	$	20,895,958	$	5,008,822

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

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.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of March 31, 2014 and December 31, 2013:

	As of March 31, 2014
			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)	$	419,982,030	$	250,623,915	$	50,250,005	$	327,819,856	$	1,048,675,806
Special Mention (Rating 6)		12,464,206		10,356,128		-		1,765,205		24,585,539
Substandard (Rating 7)		9,904,239		8,503,481		4,944,020		24,965,595		48,317,335
Doubtful (Rating 8)		-		-		-		-		-
	$	442,350,475	$	269,483,524	$	55,194,025	$	354,550,656	$	1,121,578,680

	As of March 31, 2014
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and  Other Consumer		Total
Performing	$	138,672,682	$	147,106,609	$	75,579,303	$	361,358,594
Nonperforming		1,321,377		1,843,608		1,230,237		4,395,222
	$	139,994,059	$	148,950,217	$	76,809,540	$	365,753,816

	As of December 31, 2013
			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)	$	407,294,743	$	250,028,731	$	51,868,919	$	326,168,882	$	1,035,361,275
Special Mention (Rating 6)		11,355,713		8,318,232		1,588,086		3,310,017		24,572,048
Substandard (Rating 7)		13,037,673		2,868,949		4,387,897		23,213,216		43,507,735
Doubtful (Rating 8)		-		-		-		-		-
	$	431,688,129	$	261,215,912	$	57,844,902	$	352,692,115	$	1,103,441,058

	As of December 31, 2013
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	128,006,984	$	145,345,719	$	74,688,039	$	348,040,742
Nonperforming		894,458		2,010,604		1,345,771		4,250,833
	$	128,901,442	$	147,356,323	$	76,033,810	$	352,291,575

*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, and accruing troubled debt restructurings.

19

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

As of March 31, 2014 and December 31, 2013, troubled debt restructurings totaled $11,640,416 and $13,413,366, respectively.

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 months ended March 31, 2014 and 2013. The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of the restructuring.

	For the three months ended March 31, 2014								For the three months ended March 31, 2013
Classes of Loans/Leases	Number of Loans / Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance		Number of  Loans /  Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance
CONCESSION - Significant payment delay
Owner-Occupied Commercial Real Estate		-	$	-	$	-	$	-		1	$	47,958	$	47,958	$	-
Direct Financing Leases		1	$	89,443	$	89,443	$	-		-	$	-	$	-	$	-
		1	$	89,443	$	89,443	$	-		1	$	47,958	$	47,958	$	-
CONCESSION - Extension of maturity
Commercial and Industrial		-	$	-	$	-	$	-		3	$	809,494	$	809,494	$	188,700
Direct Financing Leases		1	$	70,144	$	70,144	$	24,246		-	$	-	$	-	$	-
		1	$	70,144	$	70,144	$	24,246		3	$	809,494	$	809,494	$	188,700
TOTAL		2	$	159,587	$	159,587	$	24,246		4	$	857,452	$	857,452	$	188,700

Of the troubled debt restructurings reported above, one with a post-modification recorded investment totaling $70,144 was on nonaccrual as of March 31, 2014, and two with post-modification recorded investments totaling $80,426 were on nonaccrual as of March 31, 2013.

For the three months ended March 31, 2014 and 2013, none of the Company’s troubled debt restructurings had redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status.

20

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 4 - EARNINGS PER SHARE

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

	Three months ended March 31,
	2014		2013
Net income	$	3,889,215	$	3,265,144
Less: Preferred stock dividends		708,008		810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$	3,181,207	$	2,454,307
Earnings per common share attributable to QCR Holdings, Inc. common stockholders
Basic	$	0.40	$	0.50
Diluted	$	0.40	$	0.49
Weighted average common shares outstanding		7,901,035		4,927,591
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		129,008		106,751
Weighted average common and common equivalent shares outstanding		8,030,043		5,034,342

NOTE 5 – 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. CRBT includes CNB’s operations from its acquisition on May 13, 2013. Each of these three secondary segments offers similar products and services, but is 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.

21

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.

Selected financial information on the Company’s business segments is presented as follows for the three months ended March 31, 2014 and 2013.

	Commercial Banking
	Quad City Bank & Trust		Cedar Rapids Bank & Trust		Rockford Bank & Trust		Wealth Management		All Other			Intercompany Eliminations			Consolidated Total
Three Months Ended March 31, 2014
Total revenue	$	11,938,133	$	8,303,625	$	3,482,876	$	2,149,334	$	5,223,865		$	(5,315,781	)	$	25,782,052
Net interest income	$	8,921,038	$	5,902,059	$	2,475,682	$	-	$	(449,538	)	$	-		$	16,849,241
Net income	$	2,341,283	$	1,934,770	$	471,039	$	459,294	$	3,889,215		$	(5,206,386	)	$	3,889,215
Total assets	$	1,269,106,354	$	819,179,681	$	346,365,023	$	-	$	203,666,846		$	(211,998,694	)	$	2,426,319,210
Provision for loan/lease losses	$	609,162	$	300,000	$	185,000	$	-	$	-		$	-		$	1,094,162
Goodwill	$	3,222,688	$	-	$	-	$	-	$	-		$	-		$	3,222,688
Core deposit intangible	$	-	$	1,820,555	$	-	$	-	$	-		$	-		$	1,820,555
Three Months Ended March 31, 2013
Total revenue	$	12,055,661	$	6,928,351	$	3,184,059	$	1,649,011	$	4,732,570		$	(4,808,141	)	$	23,741,511
Net interest income	$	8,391,538	$	3,844,882	$	2,305,077	$	-	$	(350,180	)	$	-		$	14,191,317
Net income	$	2,497,025	$	1,720,811	$	96,242	$	213,007	$	3,265,144		$	(4,527,085	)	$	3,265,144
Total assets	$	1,223,662,809	$	598,842,406	$	322,544,243	$	-	$	199,591,558		$	(200,650,364	)	$	2,143,990,652
Provision for loan/lease losses	$	357,782	$	300,000	$	400,000	$	-	$	-		$	-		$	1,057,782
Goodwill	$	3,222,688	$	-	$	-	$	-	$	-		$	-		$	3,222,688

22

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 6 – FAIR VALUE

Accounting guidance on fair value measurement 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:

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

● 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

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

Assets measured at fair value on a recurring basis comprise the following at March 31, 2014 and December 31, 2013:

			Fair Value Measurements at Reporting Date Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2014:
Securities available for sale:
U.S. govt. sponsored agency securities	$	350,337,559	$	-	$	350,337,559	$	-
Residential mortgage-backed and related securities		158,119,401		-		158,119,401		-
Municipal securities		35,076,066		-		35,076,066		-
Other securities		1,944,511		317,137		1,627,374		-
	$	545,477,537	$	317,137	$	545,160,400	$	-
December 31, 2013:
Securities available for sale:
U.S. govt. sponsored agency securities	$	356,472,987	$	-	$	356,472,987	$	-
Residential mortgage-backed and related securities		157,429,451		-		157,429,451		-
Municipal securities		35,958,857		-		35,958,857		-
Other securities		1,897,163		317,698		1,579,465		-
	$	551,758,458	$	317,698	$	551,440,760	$	-

There were no transfers of assets or liabilities between Levels 1, 2, and 3 of the fair value hierarchy for the three months ended March 31, 2014 and 2013.

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 remainder of the securities available for sale portfolio consists of securities whereby 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).

23

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 March 31, 2014 and December 31, 2013:

			Fair Value Measurements at Reporting Date Using
	Fair Value		Level 1		Level 2		Level 3
March 31, 2014:
Impaired loans/leases	$	7,524,198	$	-	$	-	$	7,524,198
Other real estate owned		10,448,606		-		-		10,448,606
	$	17,972,804	$	-	$	-	$	17,972,804
December 31, 2013:
Impaired loans/leases	$	9,009,557	$	-	$	-	$	9,009,557
Other real estate owned		10,507,377		-		-		10,507,377
	$	19,516,934	$	-	$	-	$	19,516,934

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 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 estimated fair value of the property, less disposal costs, and is classified as a Level 3 in the fair value hierarchy. The estimated fair value of the property is determined based on appraisals by qualified licensed appraisers hired by the Company.  Appraised and reported values are 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 property.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:

	Quantitave Information about Level Fair Value Measurments
	Fair Value		Valuation Technique	Unobservable Input	Range
March 31, 2014:
Impaired loans/leases	$	7,524,198	Appraisal of collateral	Appraisal adjustments	-10.00%	to	-50.00	%
Other real estate owned		10,448,606	Appraisal of collateral	Appraisal adjustments	0.00%	to	-35.00	%

	Quantitave Information about Level Fair Value Measurments
	Fair Value		Valuation Technique	Unobservable Input	Range
December 31, 2013:
Impaired loans/leases	$	9,009,557	Appraisal of collateral	Appraisal adjustments	-10.00%	to	-50.00	%
Other real estate owned		10,507,377	Appraisal of collateral	Appraisal adjustments	0.00%	to	-35.00	%

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.

24

There have been no changes in valuation techniques used for any assets measured at fair value during the three months ended March 31, 2014 and 2013.

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:

	Fair Value	As of March 31, 2014				As of December 31, 2013
	Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and due from banks	Level 1	$	55,444,302	$	55,444,302	$	41,950,790	$	41,950,790
Federal funds sold	Level 2		11,570,000		11,570,000		39,435,000		39,435,000
Interest-bearing deposits at financial institutions	Level 2		44,389,277		44,389,277		33,044,917		33,044,917
Investment securities:
Held to maturity	Level 3		161,629,152		157,617,860		145,451,895		138,640,105
Available for sale	See Previous Table		545,477,537		545,477,537		551,758,458		551,758,458
Loans/leases receivable, net	Level 3		6,966,850		7,524,198		8,342,182		9,009,557
Loans/leases receivable, net	Level 2		1,462,959,422		1,472,150,150		1,430,489,328		1,441,952,443
Deposits:
Nonmaturity deposits	Level 2		1,296,408,620		1,296,408,620		1,256,209,352		1,256,209,352
Time deposits	Level 2		375,485,023		376,596,000		390,781,891		391,923,000
Short-term borrowings	Level 2		165,569,112		165,569,112		149,292,967		149,292,967
Federal Home Loan Bank advances	Level 2		235,700,000		245,555,000		231,350,000		241,623,000
Other borrowings	Level 2		142,250,644		152,184,000		142,448,362		152,761,000
Junior subordinated debentures	Level 2		40,322,765		28,218,054		40,289,830		28,094,228

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, non-maturity deposits, and short-term borrowings. The Company used the following methods and assumptions in estimating the fair value of the following instruments:

Securities held to maturity: The fair values are estimated using pricing models that consider certain observable market data, however, as most of the securities have limited or no trading activity and are not rated, the fair value is partially dependent upon unobservable inputs.

Loans/leases receivable: The fair values for all 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 in the secondary market.

Deposits: The fair values disclosed for demand 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.

FHLB advances and junior subordinated debentures: 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.

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

25

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 7 – PARTIAL REDEMPTION OF SERIES F PREFERRED STOCK

On March 31, 2014, the Company redeemed 15,000 shares of its Series F Non-Cumulative Perpetual Preferred Stock (the “Series F Preferred Stock”) from the United States Department of the Treasury (“Treasury”) for an aggregate redemption amount of $15,000,000 plus unpaid dividends to the date of redemption of $337,500.

Previously, on September 15, 2011, the Company issued 40,090 shares of Series F Preferred Stock to the Treasury for an aggregate purchase price of $40,090,000. The sale of Series F Preferred Stock was the result of an investment by Treasury under the Small Business Lending Fund (“SBLF”). 

On June 29, 2012, the Company redeemed 10,223 shares of Series F Preferred Stock. In total, the Company has redeemed 25,223 shares of the Series F Preferred Stock with 14,867 shares remaining at March 31, 2014. The Company’s dividend rate increased from 5% to 9% with the dividend for the first quarter of 2014, which was paid on April 1, 2014.

The Series F Preferred Stock may be redeemed at any time at the option of the Company, subject to the approval, if required, 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). The Company intends to fully redeem the remaining 14,867 shares during 2014.

26

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 QCBT, CRBT, and RB&T.

QCBT and CRBT are Iowa-chartered commercial banks, and RB&T 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”).

● QCBT 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. QCBT also provides leasing services through its wholly-owned subsidiary, m2 Lease Funds, located in Brookfield, Wisconsin. In addition, QCBT owns 100% of Quad City Investment Advisors, LLC, which is an investment management and advisory company.

● CRBT 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. On October 26, 2013, Community National Bank (“CNB”), which was acquired by the Company on May 13, 2013, merged with and into CRBT. CNB’s merged branch offices operate as a division of CRBT under the name “Community Bank & Trust,” and serve Cedar Falls and Waterloo, Iowa and adjacent communities through its three offices (two in Waterloo and one in Cedar Falls).

● RB&T 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 on Guilford Road at Alpine Road in Rockford and its branch facility in downtown Rockford.

OVERVIEW

The Company recognized net income of $3.9 million for the quarter ended March 31, 2014. After preferred stock dividends of $708 thousand, the Company reported net income attributable to common stockholders of $3.2 million, or diluted earnings per common share of $0.40. By comparison, for the first quarter of 2013, the Company recognized net income of $3.3 million. After preferred stock dividends of $811 thousand, the Company reported net income attributable to common stockholders of $2.5 million, or diluted earnings per common share of $0.49.

Although earnings increased nearly 30% in the first quarter of 2014 compared to the first quarter of 2013, diluted earnings per common share decreased by $0.09, or 18%, due to the issuance of new common stock related to the CNB acquisition in the second quarter of 2013 (834,715 shares issued), as well as the conversion of Series E Preferred Stock to common stock that was executed in the fourth quarter of 2013 (2,057,502 shares issued). These two events increased weighted average common shares outstanding approximately 57%, resulting in the lower diluted earnings per share.

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Following is a table that represents the various net income measurements for the Company.

	For the three months ended
	March 31, 2014		December 31, 2013		March 31, 2013
Net income	$	3,889,215	$	3,815,926	$	3,265,144
Less: Preferred stock dividends		708,008		735,790		810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$	3,181,207	$	3,080,136	$	2,454,307
Diluted earnings per common share	$	0.40	$	0.50	$	0.49
Weighted average common and common equivalent shares outstanding		8,030,043		6,140,809		5,034,342

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

	For the three months ended
	March 31, 2014			December 31, 2013			March 31, 2013
Net interest income	$	16,849,241		$	16,895,732		$	14,191,317
Provision for loan/lease losses		(1,094,162	)		(1,985,517	)		(1,057,782	)
Noninterest income		4,746,841			7,726,390			5,204,029
Noninterest expense		(16,140,420	)		(18,212,541	)		(13,958,500	)
Federal and state income tax		(472,285	)		(608,138	)		(1,113,920	)
Net income	$	3,889,215		$	3,815,926		$	3,265,144

In comparing quarter-over-quarter, following are some noteworthy fluctuations:

● Provision for loan/lease losses decreased 45% due to continued credit improvement.

● Noninterest income decreased $3.0 million compared to the fourth quarter of 2013. The fourth quarter of 2013, however, included $2.3 million of gains from the sale of CNB branches, as well as $576 thousand of gains recognized on the sale of nonperforming loans. Excluding these nonrecurring items, noninterest income remained relatively flat.

● Noninterest expense decreased 11%. CNB acquisition costs are no longer being incurred ($1.2 million of acquisition costs were incurred in the fourth quarter of 2013) and the Company has now realized the full impact of the reduced cost structure created by the acquisition.

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NET INTEREST INCOME

Net interest income, on a tax equivalent basis, increased $2.9 million, or 20%, to $17.7 million for the quarter ended March 31, 2014, from $14.7 million for the same period of 2013. The increase in net interest income was primarily driven by the acquisition of CNB in May 2013. The Company has also improved net interest income as the result of:

● Organic loan/lease growth,

● Further diversification of the Company’s securities portfolio with increased investment in tax-exempt municipal securities,

● Continued reductions in the cost of deposits, and

● Continued growth in noninterest bearing deposits.

A comparison of yields, spread and margin from the first quarter of 2014 to the first quarter of 2013 is as follows (on a tax equivalent basis):

● The average yield on interest-earning assets decreased 5 basis points.

● The average cost of interest-bearing liabilities decreased 20 basis points.

● The net interest spread increased 15 basis points from 2.68% to 2.83%.

● The net interest margin improved 9 basis points from 3.02% to 3.11%.

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 leasing company is the improvement of their net interest margins while balancing interest rate risk. Management continually addresses this issue with pricing and other balance sheet management strategies including, but not limited to, the use of alternative funding sources. Over the past several years, the Company’s management has emphasized improving its funding mix by reducing its reliance on long-term wholesale funding, which tends to be at a higher cost than deposits. Also, the Company’s management has focused on reducing the cost of portions of the Company’s existing wholesale funding. As an example, during the first quarter of 2013, QCBT modified $50.0 million of fixed rate wholesale structured repurchase agreements (“structured repos”) with a weighted average interest rate of 3.21% and a weighted average maturity of February 2016 into new fixed rate structured repos with a weighted average interest rate of 2.65% and a weighted average maturity of May 2020. This modification serves to reduce interest expense and improve net interest margin, and minimizes the exposure to rising rates through duration extension of fixed rate liabilities.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

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:

	For the three months ended March 31,
	2014								2013
	Average Balance			Interest Earned or Paid		Average Yield or Cost			Average Balance			Interest Earned or Paid		Average Yield or Cost
	(dollars in thousands)
ASSETS
Interest earning assets:
Federal funds sold	$	10,995		$	3		0.11	%	$	2,349		$	1		0.17	%
Interest-bearing deposits at financial institutions		88,376			91		0.42	%		37,834			60		0.64	%
Investment securities (1)		722,220			4,655		2.61	%		648,638			3,656		2.29	%
Restricted investment securities		17,249			129		3.03	%		15,415			125		3.29	%
Gross loans/leases receivable (1) (2) (3)		1,465,061			16,968		4.70	%		1,279,040			15,251		4.84	%
Total interest earning assets	$	2,303,901			21,846		3.85	%	$	1,983,276			19,093		3.90	%
Noninterest-earning assets:
Cash and due from banks	$	43,830							$	39,908
Premises and equipment		36,732								31,202
Less allowance for estimated losses on loans/leases		(21,894	)							(20,224	)
Other		71,589								75,850
Total assets	$	2,434,158							$	2,110,012
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	715,054			446		0.25	%	$	562,905			409		0.29	%
Time deposits		382,721			656		0.70	%		333,696			708		0.86	%
Short-term borrowings		149,989			52		0.14	%		175,706			64		0.15	%
Federal Home Loan Bank advances		234,627			1,556		2.69	%		202,618			1,733		3.47	%
Junior subordinated debentures		40,306			305		3.07	%		36,085			241		2.71	%
Other borrowings		142,317			1,171		3.34	%		138,210			1,191		3.49	%
Total interest-bearing liabilities	$	1,665,014			4,186		1.02	%	$	1,449,220			4,346		1.22	%
Noninterest-bearing demand deposits	$	585,441							$	487,264
Other noninterest-bearing liabilities		33,640								32,345
Total liabilities	$	2,284,095							$	1,968,829
Stockholders' equity		150,063								141,183
Total liabilities and stockholders' equity	$	2,434,158							$	2,110,012
Net interest income				$	17,660							$	14,747
Net interest spread							2.83	%							2.68	%
Net interest margin							3.11	%							3.02	%
Ratio of average interest-earning assets to average interest-bearing liabilities		138.37	%							136.85	%

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

(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.

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Analysis of Changes of Interest Income/Interest Expense

For the three months ended March 31, 2014 

	Inc./(Dec.) from			Components of Change (1)
	Prior Period			Rate			Volume
	2014 vs. 2013
	(dollars in thousands)
INTEREST INCOME
Federal funds sold	$	2		$	(2	)	$	4
Interest-bearing deposits at financial institutions		31			(128	)		159
Investment securities (2)		999			558			441
Restricted investment securities		4			(46	)		50
Gross loans/leases receivable (2) (3) (4)		1,717			(2,681	)		4,398
Total change in interest income	$	2,753		$	(2,299	)	$	5,052
INTEREST EXPENSE
Interest-bearing deposits	$	37		$	(296	)	$	333
Time deposits		(52	)		(508	)		456
Short-term borrowings		(12	)		(3	)		(9	)
Federal Home Loan Bank advances		(177	)		(1,408	)		1,231
Junior subordinated debentures		64			34			30
Other borrowings		(20	)		(185	)		165
Total change in interest expense	$	(160	)	$	(2,366	)	$	2,206
Total change in net interest income	$	2,913		$	67		$	2,846

(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 allocated to rate and volume.
(2)	Interest earned and yields on nontaxable investment securities and nontaxable loans are determined on a tax equivalent basis using a 34% tax rate.
(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.

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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 (“allowance”). The Company’s allowance methodology incorporates a variety of risk considerations, both quantitative and qualitative, in establishing an allowance 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/leases losses (“provision”) in the statement of income to change the allowance 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. Although management believes the level of the allowance as of March 31, 2014 was 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.

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RESULTS OF OPERATIONS

INTEREST INCOME

Interest income grew $2.5 million, or 13%, comparing the first quarter of 2014 to the same period of 2013. The majority of this growth was the result of the acquisition of CNB and the addition of its earning assets. Additionally, the Company’s loan/lease yield expanded 5 basis points during the first quarter of 2014 (from 4.65% to 4.70%) marking the first quarter of expansion since the recession. The securities portfolio yield continued to increase (from 2.29% for the first quarter of 2013 to 2.61% for the first quarter of 2014) as the Company continues to focus on diversifying its securities portfolio, including increasing its portfolio of agency-sponsored mortgage-backed securities as well as municipal securities, in an effort to increase interest income. Of the latter, all are located in the Midwest with strong underwriting conducted before investment.

The Company intends to continue to grow quality loans and leases as well as to diversify the securities portfolio to maximize yield while minimizing credit and interest rate risk.

INTEREST EXPENSE

Interest expense for the first quarter of 2014 declined $160 thousand, or 4%, from the first quarter of 2013. Considering the growth of interest-bearing liabilities (average balances grew $215.8 million, or 15%, from the first quarter of 2013 to the same quarter of 2014) from the acquisition of CNB as well as organic growth at the Company’s legacy charters, the Company has been successful in maintaining pricing discipline on deposits and decreasing the cost of borrowings, which has more than offset the growth impact and contributed to the net decline in interest expense. Management has placed a strong focus on reducing the reliance on long-term wholesale funding as it tends to be higher cost than deposits. In recent years, the majority of maturing wholesale funds have been replaced by core deposits, or, to a lesser extent, have been replaced by new wholesale funds at significantly reduced cost. Continuing this trend will strengthen the Company’s franchise value, reduce funding costs, and increase fee income opportunities through deposit service charges.

Management continues to consider strategies to accelerate the reduction of the reliance on wholesale funding and continue the shift in mix to a funding base consisting of a higher percentage of core deposits, including noninterest-bearing deposits. An important consideration to these strategies is the impact on the Company’s interest rate risk position, as some of its wholesale funding was originally borrowed to help strengthen the Company’s net interest income in rising interest rate scenarios.

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PROVISION FOR LOAN/LEASE LOSSES

The provision 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.

Provision totaled $1.1 million for the first quarter of 2014, which was down $892 thousand from the prior quarter, and essentially flat from the first quarter of 2013. The Company had net recoveries of $111 thousand for the first quarter of 2014 which, when coupled with the provision of $1.1 million, increased the Company’s allowance to $22.7 million at March 31, 2014. As of March 31, 2014, the Company’s allowance to total loans/leases was 1.52%, which was up from 1.47% at December 31, 2013, and down from 1.61% at March 31, 2013.

A more detailed discussion of the Company’s allowance can be found in the “Financial Condition” section of this report.

NONINTEREST INCOME

The following tables set forth the various categories of noninterest income for the three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31, 2014			March 31, 2013			$ Change			% Change
Trust department fees	$	1,500,342		$	1,039,670		$	460,672			44.3	%
Investment advisory and management fees		648,992			609,341			39,651			6.5
Deposit service fees		1,045,885			907,823			138,062			15.2
Gains on sales of residential real estate loans		63,487			291,151			(227,664	)		(78.2	)
Gains on sales of government guaranteed portions of loans		194,019			845,224			(651,205	)		(77.0	)
Earnings on bank-owned life insurance		454,164			438,687			15,477			3.5
Subtotal	$	3,906,889		$	4,131,896		$	(225,007	)		(5.4	)
Losses on other real estate owned, net		(18,048	)		(446,630	)		428,582			(96.0	)
Securities gains		20,625			-			20,625			100.0
Other		837,375			1,518,763			(681,388	)		(44.9	)
Total noninterest income	$	4,746,841		$	5,204,029		$	(457,188	)		(8.8	)%

Trust department fees continue to be a significant contributor to noninterest income. Trust department fees grew 44% from the first quarter of 2013 to the first quarter of 2014. Part of the increase stems from the addition of CNB’s trust department which recognized $269 thousand of trust department fees for the first quarter of 2014. The majority of the trust department fees are determined based on the value of the investments within the managed trusts. As markets have strengthened with the national economy’s continued recovery from recession, the Company’s fee income has experienced similar growth. Additionally, the Company has been successful in organically expanding its customer base at its legacy charters, which has helped to drive the recent increases in fee income.

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In recent years, the Company has placed a stronger emphasis on growing its investment advisory and management services. Part of this initiative has been to restructure the Company’s Wealth Management Division to allow for more efficient delivery of products and services through selective additions of talent as well as the leverage of and collaboration among existing resources (including the aforementioned trust department). Fee income for investment advisory and management services grew 7% comparing the first quarter of 2014 to the same period of 2013. Similar to trust department fees, these fees are largely determined based on the value of the investments managed. Continued expansion of the customer base in the Company’s legacy markets has helped drive the recent increases in fee income. CNB did not provide investment advisory and management services; however, the Company is in the process of leveraging its existing infrastructure to efficiently offer these services in the communities served by CNB.

As management focuses on growing fee income, expanding market share in trust and investment advisory services across all of the Company’s markets will continue to be a primary strategic focus.

Deposit service fees expanded 15% comparing the first quarter of 2014 to the same period in 2013. Most of this growth is attributable to the acquisition of CNB and its deposit portfolio. Additionally, the Company continues its emphasis on shifting the mix of deposits from brokered and retail time deposits to non-maturity demand deposits across all its markets. 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. The Company plans to continue this shift in mix and to further focus on growing deposit service fees.

Gains on sales of residential real estate loans fell 78% comparing the first quarter of 2014 to the first quarter of 2013. With the sustained historically low interest rate environment, refinancing activity has slowed as most of the Company’s existing and prospective customers have already executed a refinancing.

Gains on sales of government guaranteed portions of loans were down 77% year-over-year. Sales activity for government guaranteed portions of loans tends to fluctuate depending on the demand for small business loans that fit the criteria for the government guarantee. Further, some of the transactions can be large and, as the gain is determined as a percentage of the guaranteed amount, the resulting gain on sale can be large. Lastly, a strategy for improved pricing is packaging loans together for sale. From time to time, the Company may execute on this strategy, which may delay the gains on sales of some loans to achieve better pricing. Despite the fluctuation, this remains a core strategy for the Company and the pipelines are active.

During the first quarter of 2013, the Company wrote down one existing individual other real estate owned (“OREO”) property by $463 thousand as a result of a further decline in appraised value. Management continues to proactively manage its OREO portfolio in an effort to sell the properties timely at minimal loss, as evidenced by the minimal losses recognized thus far in 2014.

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The following table sets forth the various categories of other noninterest income for the three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31, 2014		March 31, 2013		$ Change			% Change
Debit card fees	$	230,605	$	229,900	$	705			0.3	%
Correspondent banking fees		232,143		158,111		74,032			46.8
Participation service fees on commercial loan participations		206,194		167,326		38,868			23.2
Fees on interest rate swaps on commercial loans		62,000		6,720		55,280			822.6
Gain on sale of credit card loan portfolio		-		495,405		(495,405	)		(100.0	)
Gain on sale of credit card issuing operations		-		355,268		(355,268	)		(100.0	)
Miscellaneous		106,433		106,033		400			0.4
Other noninterest income	$	837,375	$	1,518,763	$	(681,388	)		(44.9	)%

Debit card fees are the interchange fees paid on certain debit card customer transactions. The debit card fees were relatively flat comparing the first quarter of 2014 to the first quarter of 2013. As an opportunity to maximize fees, the Company’s legacy charters offer a deposit product with a modest increased rate that incentivizes debit card activity. Offering a similar product in the Company’s newest market is currently under strategic review.

Correspondent banking fees increased 47%, when comparing the first quarter of 2014 to the first quarter of 2013. Correspondent banking continues to be a core strategy for the Company, as this line of business provides a high level of noninterest bearing deposits that can be used to fund additional loan growth as well as a steady source of fee income.

Participation service fees on commercial loan participations represent fees paid annually to the Company by the participant(s) to cover servicing expenses incurred by the Company. The fee is generally 25 basis points of the participated loan amount. Participation service fees grew 23% year-over-year as a result of the acquisition of CNB’s participated loan portfolio as well as organic growth of commercial loan participations across the Company’s legacy charters.

In recent years, as a result of the sustained historically low interest rate environment, CRBT introduced the execution of interest rate swaps on select commercial loans. The interest rate swaps allow the commercial borrowers to pay a fixed interest rate while CRBT receives a variable interest rate as well as an upfront fee dependent upon the pricing. Management believes that these swaps help position CRBT more favorably for rising rate environments. Management will continue to review opportunities to execute these swaps at all of its subsidiary banks as the circumstances are appropriate for the borrower and the Company.

During the first quarter of 2013, QCBT sold its credit card loan portfolio for a pre-tax gain on sale of $495 thousand. In addition, QCBT sold its credit card issuing operations to the same purchaser for a pre-tax gain on sale of $355 thousand.

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NONINTEREST EXPENSE

The following tables set forth the various categories of noninterest expense for the three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31, 2014		March 31, 2013		$ Change			% Change
Salaries and employee benefits	$	10,017,918	$	8,742,683	$	1,275,235			14.6	%
Occupancy and equipment expense		1,894,288		1,428,870		465,418			32.6
Professional and data processing fees		1,584,406		1,140,061		444,345			39.0
FDIC and other insurance		714,750		555,911		158,839			28.6
Loan/lease expense		345,636		245,091		100,545			41.0
Advertising and marketing		337,587		264,568		73,019			27.6
Postage and telephone		290,675		218,691		71,984			32.9
Stationery and supplies		151,751		110,670		41,081			37.1
Bank service charges		298,032		275,495		22,537			8.2
Subtotal	$	15,635,043	$	12,982,040	$	2,653,003			20.4
Acquisition and data conversion costs		-		356,578		(356,578	)		(100.0	)
Other		505,377		619,882		(114,505	)		(18.5	)
Total noninterest expense	$	16,140,420	$	13,958,500	$	2,181,920			15.6	%

Management places a strong emphasis on overall cost containment and is committed to improving the Company’s general efficiency. The addition of CNB’s cost structure impacted the Company’s noninterest expenses. Management executed on its integration plan for CNB over the second half of 2013 to help increase efficiency and realize cost savings.

Salaries and employee benefits, which is the largest component of noninterest expense, increased from the first quarter of 2013 to the first quarter of 2014 by 15%. This increase was largely the result of:

● The addition of CNB’s cost structure. Specifically, CNB accounted for approximately $900 thousand of the increase in salaries and benefits expense year-over-year.

● Customary annual salary and benefits increases for the majority of the Company’s employee base in 2014.

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

● Higher accrued incentive compensation based on improved financial performance for the first three months of 2014.

Occupancy and equipment expense increased from the prior year with the addition of CNB’s branch network. Additionally, throughout 2013, the Company purchased additional technology for enhanced customer service and for improved fraud detection and prevention systems.

Professional and data processing fees increased year-over-year due to the addition of CNB’s cost structure. In addition, professional and data processing fees can fluctuate depending on certain one-time project costs. Management will continue to focus on minimizing these one-time costs and driving those recurring costs down through contract renegotiation or managed reduction in activity where costs are determined on a usage basis.

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FDIC and other insurance expense has generally fallen over the past several years since the FDIC modified its assessment calculation to more closely align with bank performance and risk. The 29% increase year-over-year was primarily attributable to the addition of CNB’s deposit base.

Loan/lease expense increased 41% comparing the first quarter of 2014 to the same quarter of 2013. Some of the increase was the result of the addition of CNB’s cost structure. Moreover, the Company incurred elevated levels of expense at the legacy banks for certain existing nonperforming loans as workouts progressed. Generally, loan/lease expense has a direct relationship with the level of nonperforming loans/leases; however, it may deviate depending upon the individual nonperforming loans/leases. Management expects these historically elevated levels of expense to continue to decline in line with the declining trend in nonperforming loans/leases.

The Company incurred additional expenses for advertising and marketing in the first quarter of 2014 compared to the first quarter of 2013. Most of the increase was the addition of CNB’s advertising and marketing costs.

Bank service charges, which include costs incurred to provide services to QCBT’s correspondent banking customer portfolio, have increased over the past several quarters. The increase is due, in large part, to the success QCBT has had in growing its correspondent banking customer portfolio over the recent years.

With the acquisition of CNB on May 13, 2013, the Company incurred acquisition costs totaling $357 thousand for the first quarter of 2013 as the Company incurred professional fees (legal, investment banking, and accounting) in preparation for the closing of the acquisition. In accordance with generally accepted accounting principles, the Company expensed these costs as incurred.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

INCOME TAXES

The provision for income taxes totaled $472 thousand, or an effective tax rate of 11%, for the first quarter of 2014 compared to $1.1 million, or an effective tax rate of 25%, for the same quarter of 2013. The decline in effective tax rate was partly the result of continued growth in nontaxable income from increased investments in tax-exempt municipal securities, as the Company grew its portfolio of tax-exempt municipal securities by nearly 35% from March 31, 2013 to March 31, 2014. The growth in nontaxable income outpaced the growth in taxable income which helped to reduce the effective tax rate. Additionally, the Company recognized a one-time tax benefit of $381 thousand as a result of the finalization of the tax issues related to the Community National acquisition following the filing of the acquired entity’s final tax returns.

FINANCIAL CONDITION

Following is a table that represents the major categories of the Company’s balance sheet.

	As of
	March 31, 2014					December 31, 2013					March 31, 2013
	(dollars in thousands)
	Amount		%			Amount		%			Amount		%
Cash, federal funds sold, and interest-bearing deposits	$	111,403		5	%	$	114,431		5	%	$	67,036		3	%
Securities		707,107		29	%		697,210		29	%		692,552		32	%
Net loans/leases		1,469,926		61	%		1,438,832		60	%		1,271,026		59	%
Other assets		137,883		5	%		144,480		6	%		113,377		6	%
Total assets	$	2,426,319		100	%	$	2,394,953		100	%	$	2,143,991		100	%
Total deposits	$	1,671,893		69	%	$	1,646,991		68	%	$	1,420,493		66	%
Total borrowings		583,843		24	%		563,381		24	%		551,531		26	%
Other liabilities		29,226		1	%		37,004		2	%		29,769		1	%
Total stockholders' equity		141,357		6	%		147,577		6	%		142,198		7	%
Total liabilities and stockholders' equity	$	2,426,319		100	%	$	2,394,953		100	%	$	2,143,991		100	%

During the first quarter of 2014, the Company’s total assets grew $31.4 million, or 1%, to a total of $2.43 billion. Gross loans/leases grew $32.3 million, or 2%; while securities grew 1%. Most of the asset growth was funded with deposits which grew $24.9 million, or 2%. The remaining growth was funded with short-term borrowings.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

INVESTMENT SECURITIES. 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 more than offsetting the pace of loan growth over the past several years, the Company has grown and diversified its securities portfolio, including increasing the portfolio of agency-sponsored mortgage-backed securities as well as more than tripling the portfolio of municipal securities. Of the latter, the large majority are located in the Midwest with some in or near the Company’s existing markets and require a thorough underwriting process before investment. As the portfolio has grown over recent years, management has elevated its focus on maximizing return while minimizing credit and interest rate risk. Additionally, management will continue to diversify the portfolio with further growth strictly dictated by the pace of growth in deposits and loans. Ideally, management expects to fund future loan growth partially with cashflow from the securities portfolio (calls and maturities of government sponsored agencies, paydowns on residential mortgage-backed securities, and/or targeted sales of securities that meet certain criteria as defined by management).

Following is a breakdown of the Company’s securities portfolio by type, the percentage of unrealized gains (losses) to carrying value on the total portfolio, and the portfolio duration:

	As of
	March 31, 2014						December 31, 2013						March 31, 2013
	Amount			%			Amount			%			Amount			%
							(dollars in thousands)
U.S. govt. sponsored agency securities	$	350,338			50	%	$	356,473			51	%	$	403,840			58	%
Residential mortgage-backed and related securities		158,119			22	%		157,429			23	%		174,802			25	%
Municipal securities		195,655			28	%		180,361			26	%		111,347			17	%
Other securities		2,995			0	%		2,947			0	%		2,563			0	%
	$	707,107			100	%	$	697,210			100	%	$	692,552			100	%
As a % of Total Assets		29.14	%					29.11	%					32.30	%
Net Unrealized Gains/(Losses) as a % of Amortized Cost		-2.45	%					-4.02	%					0.96	%
Duration (in years)		4.6						4.7						2.9

With the increase in long-term interest rates during the middle of 2013, the Company’s securities portfolio shifted from a net unrealized gain position to a net unrealized loss position. Management expected this shift to occur with the increase in long-term interest rates. Management performs an evaluation of the portfolio quarterly to understand the current market value as well as projections of market value in a variety of rising and falling interest rate scenarios. In addition, management has evaluated those securities with an unrealized loss position to determine whether the loss is derived from credit deterioration or the movement in interest rates. The evaluation determined that there were no securities with other-than-temporary impairment. See the “Critical Accounting Policies” section for further discussion on this evaluation.

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The duration of the securities portfolio has lengthened over the recent years for two reasons:

● A portion of the government-sponsored agency securities contain call options at the discretion of the issuer whereby the issuer can call the security at par at certain times which vary by individual security. With the sharp increase in longer-term rates in 2013, the duration of these callable agency securities lengthened as the likelihood of a call became remote.

● The increased investment in tax-exempt municipal securities which tend to be longer term (average maturity is approximately 7 years). Management understands that this extended the duration of its securities portfolio and continually evaluates the combined benefit of increased interest income and reduced effective income tax rate and the impact on interest rate risk.

The Company has not invested in commercial mortgage-backed securities or pooled trust preferred securities. Additionally, the Company has not invested in the types of securities subject to the Volcker Rule (a provision of the Dodd-Frank Act).

See Note 2 to the Consolidated Financial Statements for additional information regarding the Company’s investment securities.

LOANS/LEASES. Total loans/leases grew 2% during the first quarter of 2014. Over the past several quarters, the Company has been successful in shifting the mix of its commercial loan portfolio by adding more commercial and industrial loans, owner-occupied commercial real estate loans, and leases and fewer non owner-occupied commercial real estate and construction loans. The addition of CNB’s portfolio helped maintain this shift in mix as CNB’s portfolio mix was similar to the Company’s three legacy banks. The mix of the loan/lease types within the Company’s loan/lease portfolio is presented in the following table.

	As of
	March 31, 2014						December 31, 2013						March 31, 2013
	Amount			%			Amount			%			Amount			%
	(dollars in thousands)
Commercial and industrial loans	$	442,350			30	%	$	431,688			30	%	$	398,122			31	%
Commercial real estate loans		679,228			46	%		671,753			46	%		598,634			46	%
Direct financing leases		139,994			9	%		128,902			9	%		109,654			9	%
Residential real estate loans		148,950			10	%		147,356			10	%		115,548			9	%
Installment and other consumer loans		76,810			5	%		76,034			5	%		66,294			5	%
Total loans/leases	$	1,487,332			100	%	$	1,455,733			100	%	$	1,288,252			100	%
Plus deferred loan/lease origination costs, net of fees		5,247						4,547						3,543
Less allowance for estimated losses on loans/leases		(22,653	)					(21,448	)					(20,769	)
Net loans/leases	$	1,469,926					$	1,438,832					$	1,271,026

As commercial real estate loans are the largest portfolio segment, 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 March 31, 2014 and December 31, 2013, approximately 40% and 39%, respectively, of the commercial real estate loan portfolio was owner-occupied.

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Following is a listing of significant industries within the Company’s commercial real estate loan portfolio as of March 31, 2014 and December 31, 2013:

	As of March 31, 2014					As of December 31, 2013
	Amount		%			Amount		%
	(dollars in thousands)
Lessors of Nonresidential Buildings	$	231,341		34	%	$	229,284		34	%
Lessors of Residential Buildings		60,982		9	%		64,659		10	%
Land Subdivision		30,802		5	%		29,117		4	%
Nursing Care Facilities		21,938		3	%		19,212		3	%
Hotels		20,644		3	%		20,975		3	%
Lessors of Other Real Estate Property		16,861		3	%		15,509		2	%
New Car Dealers		16,183		2	%		16,597		2	%
Other *		280,477		41	%		276,400		42	%
Total Commercial Real Estate Loans	$	679,228		100	%	$	671,753		100	%

* “Other” consists of all other industries. None of these had concentrations greater than $16.0 million, or 2.4% of total commercial real estate loans.

The Company’s residential real estate loan portfolio consists of the following:

● Certain loans that do not meet the criteria for sale into the secondary market. These are often structured as adjustable rate mortgages with maturities ranging from three to seven years to avoid the long-term interest rate risk.

● A limited amount of 15-year fixed rate residential real estate loans that met certain credit guidelines.

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 to the Consolidated Financial Statements for additional information regarding the Company’s loan/lease portfolio.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

ALLOWANCE FOR ESTIMATED LOSSES ON LOANS/LEASES. Changes in the allowance for the three months ended March 31, 2014 and 2013 are presented as follows:

	Three Months Ended
	March 31, 2014			March 31, 2013
	(dollars in thousands)
Provisions charged to expense		1,094			1,058
Loans/leases charged off		(79	)		(303	)
Recoveries on loans/leases previously charged off		190			89
Balance, ending	$	22,653		$	20,769

The allowance was $22.7 million at March 31, 2014 compared to $21.4 million at December 31, 2013 and $20.8 million at March 31, 2013. The allowance 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 is 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 is monitored by the loan review staff and reported to management and the board of directors.

The Company’s levels of criticized and classified loans are reported in the following table.

	As of
Internally Assigned Risk Rating *	March 31, 2014		December 31, 2013		March 31, 2013
	(dollars in thousands)
Special Mention (Rating 6)	$	24,586	$	24,572	$	27,610
Substandard (Rating 7)		48,317		43,508		50,198
Doubtful (Rating 8)		-		-		-
	$	72,903	$	68,080	$	77,808
Criticized Loans **	$	72,903	$	68,080	$	77,808
Classified Loans ***	$	48,317	$	43,508	$	50,198

* Amounts above include the government guaranteed portion, if any. For the calculation of allowance for estimated losses on loans/leases, the Company assigns internal risk ratings of Pass (Rating 2) for the government guaranteed portion.

** Criticized loans are defined as commercial and industrial and commercial real estate loans with internally assigned risk ratings of 6, 7, or 8, regardless of performance.

*** Classified loans are defined as commercial and industrial and commercial real estate loans with internally assigned risk ratings of 7 or 8, regardless of performance.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

The Company experienced some increase in criticized and classified loans during the first quarter of 2014, as compared to December 31, 2013, but this did not translate to an increase in nonperforming loans. Nonperforming loans/leases actually decreased $1.9 million, or 9%, during the same period.

The following table summarizes the trend in the allowance as a percentage of gross loans/leases and as a percentage of nonperforming loans/leases.

	As of
	March 31, 2014			December 31, 2013			March 31, 2013
Allowance / Gross Loans/Leases		1.52	%		1.47	%		1.61	%
Allowance / Nonperforming Loans/Leases *		121.58	%		104.70	%		105.30	%

*Nonperforming loan/leases consist of nonaccrual loans/leases, accruing loans/leases past due 90 days or more, and accruing troubled debt restructurings.

In accordance with generally accepted accounting principles for acquisition accounting, the acquired CNB loans were recorded at market value; therefore, there was no allowance associated with CNB’s loans at acquisition which caused a drop in the Company’s allowance to total loans/leases during the second quarter of 2013. This ratio has steadily increased since then. Further, the Company’s allowance to total nonperforming loans/leases was 122% at March 31, 2014 which was up from all prior periods presented in the table above.

Although management believes that the allowance at March 31, 2014 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 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 to the Consolidated Financial Statements for additional information regarding the Company’s allowance for estimated losses on loans/leases.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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NONPERFORMING ASSETS. The table below presents the amounts of nonperforming assets.

	As of March 31, 2014			As of December 31, 2013			As of March 31, 2013			As of December 31, 2012
	(dollars in thousands)
Nonaccrual loans/leases (1) (2)	$	17,653		$	17,878		$	18,040		$	17,932
Accruing loans/leases past due 90 days or more		5			84			1			159
Troubled debt restructurings - accruing		974			2,523			1,682			7,300
Total nonperforming loans/leases		18,632			20,485			19,723			25,391
Other real estate owned		9,675			9,729			3,679			3,955
Other repossessed assets		252			346			282			212
Total nonperforming assets	$	28,559		$	30,560		$	23,684		$	29,558
Nonperforming loans/leases to total loans/leases		1.25	%		1.40	%		1.53	%		1.97	%
Nonperforming assets to total loans/leases plus reposessed property		1.90	%		2.08	%		1.83	%		2.29	%
Nonperforming assets to total assets		1.18	%		1.28	%		1.10	%		1.41	%
Texas ratio (3)		17.81	%		18.43	%		14.65	%		18.68	%

(1) Includes government guaranteed portion of loans, as applicable.

(2) Includes troubled debt restructurings of $10.7 million at March 31, 2014, $10.9 million at December 31, 2013, $6.4 million at March 31, 2013, and $5.7 million at December 31, 2012.

(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 by many investors and analysts to be a 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, accruing troubled debt restructurings (“TDRs”), and OREO. For nonaccrual loans/leases and accruing TDRs, management has thoroughly reviewed these loans/leases and has provided specific allowances as appropriate. Additionally, a portion of several of the nonaccrual loans are guaranteed by the government. At March 31, 2014, government guaranteed amounts of nonaccrual loans totaled approximately $664 thousand, or 4% of the $17.7 million of total nonaccrual loans/leases. OREO is carried at the lower of carrying amount or fair value less costs to sell.

Nonperforming assets at March 31, 2014 were $28.6 million, which were down $2.0 million, or 7%, from December 31, 2013, and up $4.9 million, or 21%, from March 31, 2013. In addition, the ratio of nonperforming assets to total assets was 1.18% at March 31, 2014, which was down from 1.28% at December 31, 2013, and up from 1.10% at March 31, 2013. During the quarter, the Company had several large accruing TDRs that became performing according to the applicable accounting guidance. Additionally, several nonperforming loans paid off during the current quarter.

The Company’s lending/leasing practices remain unchanged and asset quality remains a top priority for management.

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DEPOSITS. Deposits grew $24.9 million, or 2%, during the first quarter of 2014. Most of the growth was in noninterest bearing and short-term low cost brokered time deposits. The table below presents the composition of the Company’s deposit portfolio.

	As of
	March 31, 2014					December 31, 2013					March 31, 2013
	(dollars in thousands)
	Amount		%			Amount		%			Amount		%
Noninterest bearing demand deposits	$	579,110		34	%	$	542,566		33	%	$	496,513		35	%
Interest bearing demand deposits		717,299		43	%		715,643		43	%		586,874		41	%
Time deposits		296,102		18	%		326,852		20	%		297,768		21	%
Brokered time deposits		79,382		5	%		61,930		4	%		39,338		3	%
	$	1,671,893		100	%	$	1,646,991		100	%	$	1,420,493		100	%

The Company has been successful in growing its noninterest bearing deposit portfolio over the past few years and this continued in the first quarter of 2014. Most of this growth continues to be derived from QCBT’s correspondent banking business. The continued strength of the noninterest bearing deposit portfolio has provided flexibility to manage down deposit pricing and reduce reliance on higher cost wholesale funds, which has helped drive down the Company’s interest expense.

BORROWINGS. 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
	March 31, 2014		December 31, 2013		March 31, 2013
	(dollars in thousands)
Overnight repurchase agreements with customers	$	136,649	$	98,823	$	141,674
Federal funds purchased		28,920		50,470		30,180
	$	165,569	$	149,293	$	171,854

As a result of their memberships in either the Federal Home Loan Bank (“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. FHLB advances increased slightly by $4.4 million, or 2%, during the first quarter of 2014. The net growth was exclusively short-term advances (maturities of less than 3 months) at low cost (interest rates ranging from 10 basis points to 25 basis points).

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Other borrowings consist largely of structured repos 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
	March 31, 2014		December 31, 2013		March 31, 2013
	(dollars in thousands)
Structured repos	$	130,000	$	130,000	$	130,000
Term note		9,600		9,800		-
364-day revolving note		-		-		5,600
Series A subordinated notes		2,651		2,648		2,642
	$	142,251	$	142,448	$	138,242

In order to fund the cash portion of the consideration for the CNB acquisition and pay off the $3.95 million of Community National term debt at acquisition, the Company borrowed $4.4 million on its 364-day revolving note in May 2013. The outstanding balance on the 364-day revolving note totaled $10.0 million until maturity at June 26, 2013. Upon maturity, the credit facility was restructured whereby the $10.0 million of outstanding debt was restructured into a secured 3-year term note with principal due quarterly and interest due monthly where the interest is calculated at the effective LIBOR rate plus 3.00% per annum (3.21% at March 31, 2014). As the Company makes scheduled quarterly principal payments, the outstanding balance on the term note was $9.6 million at March 31, 2014. Additionally, as part of the restructuring, the Company maintained a secured 364-day revolving credit note with availability of $10.0 million where the interest is calculated at the effective LIBOR rate plus 2.50% per annum. At March 31, 2014, the Company had not borrowed on this revolving credit note and had the full amount available.

It is management’s intention to continue to reduce the reliance on wholesale funding, including FHLB advances, structured repos, and brokered time deposits. Replacement of this funding with core deposits helps to reduce interest expense as the wholesale funding tends to be higher funding cost. The table below presents the maturity schedule including weighted average cost for the Company’s combined wholesale funding portfolio.

	March 31, 2014				December 31, 2013
	Amount Due		Weighted Average Interest Rate at Quarter-End		Amount Due		Weighted Average Interest Rate at Year-End
	(dollar amounts in thousands)
Maturity:
Year ending December 31:
2014	$	127,323		0.58	$	110,521		1.24
2015		46,000		1.82		41,000		2.00
2016		48,642		3.63		48,642		3.63
2017		43,075		3.43		43,075		3.43
2018		58,042		3.47		58,042		3.47
Thereafter		122,000		3.33		122,000		3.33
Total Wholesale Funding	$	445,082		2.45	$	423,280		2.72

Importantly, a large portion of the Company’s FHLB advances and structured repos have putable options which allow the lender (FHLB or counterparty), at its discretion, to terminate the borrowing and require the subsidiary banks to repay at predetermined dates prior to the stated maturity.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

During the first quarter of 2014, wholesale funding maturing in 2014 increased by $16.8 million. This is the net result of a $20.0 million maturity more than offset by the addition of $36.8 million in short-term, low cost FHLB advances and brokered time deposits.

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

	As of
	March 31, 2014						December 31, 2013						March 31, 2013
	Amount			%			Amount			%			Amount			%
	(dollars in thousands)
Common stock	$	8,039					$	8,006					$	5,058
Additional paid in capital - common		60,696						60,360						25,932
Retained earnings		67,817						64,637						55,781
Accumulated other comprehensive income (loss)		(8,413	)					(13,644	)					3,870
Less: Treasury stock		(1,606	)					(1,606	)					(1,606	)
Total common stockholders' equity		126,533			90	%		117,753			80	%		89,035			63	%
Preferred stock		15						30						55
Additional paid in capital - preferred		14,809						29,794						53,108
Total preferred stockholders' equity		14,824			10	%		29,824			20	%		53,163			37	%
Total stockholders' equity	$	141,357			100	%	$	147,577			100	%	$	142,198			100	%
Tangible common equity (TCE)* / total tangible assets (TA)		5.02	%					4.71	%					4.01	%
TCE/TA excluding accumulated other comprehensive income (loss)		5.36	%					5.29	%					3.83	%

*Tangible common equity is defined as total common stockholders’ equity excluding goodwill and other intangibles. This ratio is a non-GAAP financial measure. Management included this ratio as it is considered by many investors and analysts to be a metric with which to analyze and evaluate the equity composition. Other companies may calculate this ratio differently.

The following table presents the rollforward of stockholders’ equity for the three months ended March 31, 2014 and 2013, respectively.

	For the quarter ended March 31,
	2014			2013
	(dollars in thousands)
Beginning balance	$	147,577		$	140,434
Net income		3,889			3,265
Other comprehensive income (loss), net of tax		5,231			(836	)
Preferred and common cash dividends declared		(708	)		(811	)
Redemption of 15,000 shares of Series F Preferred Stock		(15,000	)		-
Other *		368			146
Ending balance	$	141,357		$	142,198

*Includes mostly common stock issued for options exercised and the employee stock purchase plans, as well as stock-based compensation.

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The following table presents the details of the preferred stock issued and outstanding as of March 31, 2014.

	Date Issued	Aggregate Purchase Price		Stated Dividend Rate			Annual Dividend
Series F Non-Cumulative Perpetual Preferred Stock	September 2011	$	14,867,000		9.00	%	$	1,338,030

Regarding the Series F Preferred Stock, non-cumulative dividends are payable quarterly, and the dividend rate is 9%. On March 31, 2014 the Company redeemed an additional 15,000 shares of Series F Preferred Stock from Treasury for an aggregate redemption amount of $15.0 million plus unpaid dividends to the date of redemption of $338 thousand. Previously, on June 29, 2012, the Company redeemed 10,223 shares of Series F Preferred Stock from Treasury for an aggregate redemption amount of $10.2 million plus unpaid dividends to the date of redemption of $125 thousand. In total, the Company had 14,867 shares of Series F Preferred Stock remaining at March 31, 2014.

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

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 averaged $143.2 million during the first quarter of 2014, $102.8 million during 2013 and $98.6 million during 2012. The Company’s on balance sheet liquidity position can fluctuate based on short-term activity in deposits and loans.

49

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

The subsidiary banks have a variety of sources of short-term liquidity available to them, including federal funds purchased from correspondent banks, FHLB advances, structured repos, brokered time deposits, lines of credit, borrowing at the Federal Reserve Discount Window, sales of securities available for sale, and loan/lease participations or sales. The Company also generates liquidity from the regular principal payments and prepayments made on its loan/lease portfolio, and on the regular monthly payments on its residential mortgage-backed securities portfolio. At March 31, 2014, the subsidiary banks had 33 lines of credit totaling $348.1 million, of which $18.6 million was secured and $329.5 million was unsecured. At March 31, 2014, $319.2 million was available as $28.9 million was utilized for short-term borrowing needs at the three banks. At December 31, 2013, the subsidiary banks had 33 lines of credit totaling $351.3 million, of which $26.8 million was secured and $324.5 million was unsecured. At December 31, 2013, $315.3 million was available as $36.0 million was utilized for short-term borrowing needs at QCBT. The Company has emphasized growing the number and amount of lines of credit in an effort to strengthen this contingent source of liquidity. Additionally, the Company restructured its credit facility during the second quarter of 2013. Previously, the Company had a single $20.0 million secured revolving credit note with variable interest rate and a maturity of June 27, 2013 with $14.4 million available as the note carried an outstanding balance of $5.6 million. To help fund the acquisition of CNB on May 13, 2013, the Company borrowed an additional $4.4 million on the revolving credit note bringing the total borrowed to $10.0 million. At maturity, the $10.0 million was converted to a secured term note with a variable interest rate and a maturity of June 27, 2016. The Company maintained a $10.0 million secured revolving credit note with a variable interest rate and a maturity of June 26, 2014. At March 31, 2014, the Company had not borrowed on this revolving credit note and had the full amount available.

Investing activities used cash of $19.2 million during the first three months of 2014 compared to $84.9 million for the same period of 2013. Proceeds from calls, maturities, paydowns, and sales of securities were $24.1 million for the first three months of 2014 compared to $95.0 million for the same period of 2013. Purchases of securities used cash of $26.1 million for the first three months of 2014 compared to $187.7 million for the same period of 2013. The net increase in loans/leases used cash of $33.1 million for the first three months of 2014 compared to $7.1 million for the same period of 2013.

Financing activities provided cash of $29.6 million for the first three months of 2014 compared to $49.4 million for same period of 2013. Net increases in deposits totaled $24.9 million for the first three months of 2014 compared to $46.4 million for the same period of 2013. During the first quarter of 2014, the Company’s short-term borrowings increased $16.3 million. Also, during the first quarter, the Company partially redeemed its outstanding shares of Series F Preferred Stock totaling $15.0 million.

Total cash provided by operating activities was $3.2 million for the first three months of 2014 compared to $7.2 million for the same period of 2013.

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

50

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

The following table presents the details of the trust preferred securities issued and outstanding as of March 31, 2014.

Name	Date Issued	Amount Issued		Interest Rate	Interest Rate as of 3/31/2014			Interest Rate as of 12/31/2013
QCR Holdings Statutory Trust II	February 2004	$	12,372,000	2.85% over 3-month LIBOR		3.10	%		3.10	%
QCR Holdings Statutory Trust III	February 2004		8,248,000	2.85% over 3-month LIBOR		3.10	%		3.10	%
QCR Holdings Statutory Trust IV	May 2005		5,155,000	1.80% over 3-month LIBOR		2.04	%		2.04	%
QCR Holdings Statutory Trust V	February 2006		10,310,000	1.55% over 3-month LIBOR		1.79	%		1.79	%
Community National Statutory Trust II	September 2004		3,093,000	2.17% over 3-month LIBOR		2.42	%		2.42	%
Community National Statutory Trust III	March 2007		3,609,000	1.75% over 3-month LIBOR		1.99	%		1.99	%
		$	42,787,000	Weighted Average Rate		2.51	%		2.51	%

The Company assumed the trust preferred securities originally issued by Community National in connection with its acquisition in May 2013. As a result of acquisition accounting, the liabilities were recorded at fair value upon acquisition with the resulting discount (totaling $2.6 million) being accreted as interest expense on a level yield basis over the expected term.

51

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

The Company (on a consolidated basis) and its subsidiary banks are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and subsidiary banks’ financial statements. 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. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the subsidiary banks to maintain minimum amounts and ratios (set forth in the following tables) of total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets, each as defined by regulation. Management believes, as of March 31, 2014 and December 31, 2013, that the Company and the subsidiary banks met all capital adequacy requirements to which they were subject.

Under the regulatory framework for prompt corrective action, to be categorized as “well capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. The Company and the subsidiary banks’ actual capital amounts and ratios as of March 31, 2014 and December 31, 2013 are also presented in the following tables (dollars in thousands). As of March 31, 2014 and December 31, 2013, the subsidiary banks met the requirements to be “well capitalized”.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount			Ratio		Amount				Ratio
As of March 31, 2014:
Company:
Total risk-based capital	$	206,050		12.03	%	$	137,032	>	8.0	%	N/A			N/A
Tier 1 risk-based capital		181,723		10.61	%		68,516	>	4.0		N/A			N/A
Leverage ratio		181,723		7.49	%		97,083	>	4.0		N/A			N/A
Quad City Bank & Trust:
Total risk-based capital	$	102,495		12.08	%	$	67,887	>	8.0	%	$	84,858	>		10.00	%
Tier 1 risk-based capital		92,582		10.91	%		33,943	>	4.0			50,915	>		6.00	%
Leverage ratio		92,582		7.07	%		52,360	>	4.0			65,450	>		5.00	%
Cedar Rapids Bank & Trust:
Total risk-based capital	$	76,218		12.48	%	$	48,847	>	8.0	%	$	61,058	>		10.00	%
Tier 1 risk-based capital		68,573		11.23	%		24,423	>	4.0			36,635	>		6.00	%
Leverage ratio		68,573		8.62	%		31,838	>	4.0			39,797	>		5.00	%
Rockford Bank & Trust:
Total risk-based capital	$	34,245		12.60	%	$	21,751	>	8.0	%	$	27,189	>		10.00	%
Tier 1 risk-based capital		30,838		11.34	%		10,876	>	4.0			16,314	>		6.00	%
Leverage ratio		30,838		9.07	%		13,604	>	4.0			17,005	>		5.00	%

52

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

	Actual					For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount			Ratio			Amount			Ratio
As of December 31, 2013:
Company:
Total risk-based capital	$	217,011		12.87	%	$	134,935	>		8.0	%	N/A			N/A
Tier 1 risk-based capital		193,044		11.45	%		67,468	>		4.0	%	N/A			N/A
Tier 1 leverage		193,044		7.96	%		97,029	>		4.0	%	N/A			N/A
Quad City Bank & Trust:
Total risk-based capital	$	101,168		12.25	%	$	66,049	>		8.0	%	$	82,562	>		10.00	%
Tier 1 risk-based capital		91,820		11.12	%		33,025	>		4.0			49,537	>		6.00	%
Tier 1 leverage		91,820		7.13	%		51,527	>		4.0			64,408	>		5.00	%
Cedar Rapids Bank & Trust:
Total risk-based capital	$	74,912		12.54	%	$	47,808	>		8.0	%	$	59,760	>		10.00	%
Tier 1 risk-based capital		67,432		11.28	%		23,904	>		4.0			35,856	>		6.00	%
Tier 1 leverage		67,432		8.78	%		30,736	>		4.0			38,420	>		5.00	%
Rockford Bank & Trust:
Total risk-based capital	$	38,778		14.59	%	$	21,263	>		8.0	%	$	26,579	>		10.00	%
Tier 1 risk-based capital		35,449		13.34	%		10,631	>		4.0			15,947	>		6.00	%
Tier 1 leverage		35,449		10.54	%		13,459	>		4.0			16,824	>		5.00	%

In July 2013, the U.S. federal banking authorities approved the implementation of the Basel III regulatory capital reforms and issued rules effecting certain changes required by the Dodd-Frank Act (the “Basel III Rules”).  The Basel III Rules are applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally bank holding companies with consolidated assets of less than $500 million).  The Basel III Rules not only increase most of the required minimum regulatory capital ratios, but they introduce a new Common Equity Tier 1 Capital ratio and the concept of a capital conservation buffer.  The Basel III Rules also expand the definition of capital as in effect currently by establishing criteria that instruments must meet to be considered Additional Tier 1 Capital (Tier 1 Capital in addition to Common Equity) and Tier 2 Capital.  A number of instruments that now qualify as Tier 1 Capital will not qualify, or their qualifications will change.  The Basel III Rules also permit smaller banking organizations (which include the Company and its subsidiary banks) to retain, through a one-time election, the existing treatment for accumulated other comprehensive income, which currently does not affect regulatory capital.  The Basel III Rules have maintained the general structure of the current prompt corrective action framework, while incorporating the increased requirements. The prompt corrective action guidelines were also revised to add the Common Equity Tier 1 Capital ratio.  In order to be a “well-capitalized” depository institution under the new regime, a bank and holding company must maintain a Common Equity Tier 1 Capital ratio of 6.5% or more; a Tier 1 Capital ratio of 8% or more; a Total Capital ratio of 10% or more; and a leverage ratio of 5% or more.  Generally, financial institutions become subject to the new Basel III Rules on January 1, 2015.  Management is in the process of assessing the effect the Basel III Rules may have on the Company’s and the subsidiary banks’ capital positions and will monitor developments in this area. At present, management believes that its current capital structure and the execution of its existing capital plan will be more than sufficient to meet and exceed the revised regulatory capital ratios as required by the new Basel III Rules.

53

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS 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 1A 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.

54

Part I

Item 3

QUANTITATIVE AND QUALITATVE 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.

55

Part I

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 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. Further, in recent years, the Company added additional interest rate scenarios where interest rates experience a parallel and instantaneous shift upward 100, 200, 300, and 400 basis points and a parallel and instantaneous shift downward 100 basis points. The Company will run additional interest rate scenarios on an as-needed basis. The asset/liability management committees of the subsidiary bank boards of directors have established policy limits of a 10% decline in net interest income for the 200 basis point upward parallel shift and the 100 basis point downward parallel shift. For the 300 basis point upward shock, the established policy limit has been increased to 25% decline in net interest income. The increased policy limit is appropriate as the shock scenario is extreme and unlikely and warrants a higher limit than the more realistic and traditional parallel/pro-rata shift scenarios.

Application of the simulation model analysis for select interest rate scenarios at the most recent quarter-end available is presented in the following table:

				NET INTEREST INCOME EXPOSURE in YEAR 1
INTEREST RATE SCENARIO	POLICY LIMIT			As of  December 31, 2013			As of  March 31, 2013			As of December 31, 2012
100 basis point downward shift		-10.0	%		-1.0	%		-1.8	%		-1.5	%
200 basis point upward shift		-10.0	%		-4.8	%		-1.7	%		-0.9	%
300 basis point upward shock		-25.0	%		-11.0	%		-1.7	%		0.8	%

The simulation is within the board-established policy limits for all three scenarios. Additionally, for all of the various interest rate scenarios modeled and measured by management (as described above), the results at December 31, 2013 were within established risk tolerances as established by policy or by best practice (if the interest rate scenario didn’t have a specific policy limit).

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.

56

Part I

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of March 31, 2014. 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, as of the end of the period covered by this report, 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 materially affect, the Company’s internal control over financial reporting.

57

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.
Item 1A	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 2013 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
	None
Item 3	Defaults Upon Senior Securities
	None
Item 4	Mine Safety Disclosures
	Not applicable
Item 5	Other Information
	None

58

Part II

QCR HOLDINGS, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION - continued

Item 6           Exhibits

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 March 31, 2014 and December 31, 2013; (ii) Consolidated Statements of Income for the three months ended March 31, 2014 and March 31, 2013; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2014 and March 31, 2013; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2014 and March 31, 2013; (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and March 31, 2013; and (vi) Notes to Consolidated Financial Statements.

59

SIGNATURES

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

QCR HOLDINGS, INC.

(Registrant)

Date	May 7, 2014	/s/ Douglas M. Hultquist
		Douglas M. Hultquist, President
		Chief Executive Officer
Date	May 7, 2014	/s/ Todd A. Gipple
		Todd A. Gipple, Executive Vice President
		Chief Operating Officer
		Chief Financial Officer
Date	May 7, 2014	/s/ John R. Oakes
		John R. Oakes, 1st Vice President
		Controller
		Director of Financial Reporting
		Principal Accounting Officer

 60

EX-31

Exhibit 31.1

I, Douglas M. Hultquist, certify that:

1.             I have reviewed this quarterly report on Form 10-Q 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 purposes 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 the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control 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:     May 7, 2014	/s/ Douglas M. Hultquist
	Douglas M. Hultquist
	Chief Executive Officer

EX-31

Exhibit 31.2

I, Todd A. Gipple, certify that:

1.             I have reviewed this quarterly report on Form 10-Q 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 purposes 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 the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control 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:     May 7, 2014	/s/ Todd A. Gipple
	Todd A. Gipple
	Chief Operating Officer
	Chief Financial Officer

EX-32

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 Quarterly Report of QCR Holdings, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2014 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 results of operations of the Company.

/s/ Douglas M. Hultquist_________

Douglas M. Hultquist

Chief Executive Officer

May 7, 2014

EX-32

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 Quarterly Report of QCR Holdings, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2014 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 results of operations of the Company.

/s/ Todd A. Gipple___________

Todd A. Gipple

Chief Operating Officer

Chief Financial Officer

May 7, 2014

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Note 5 - Business Segment Information (Details) - Selected Financial Information on the Company’s Business Segments (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Total revenue	$ 25,782,052	$ 23,741,511
Net interest income	16,849,241	14,191,317
Net income attributable to QCR Holdings, Inc.	3,889,215	3,265,144
Total assets	2,426,319,210	2,143,990,652	2,394,952,924
Provision for loan/lease losses	1,094,162	1,057,782
Goodwill	3,222,688	3,222,688	3,222,688
Core deposit intangible	1,820,555		1,870,433
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Total revenue	(5,315,781)	(4,808,141)
Net income attributable to QCR Holdings, Inc.	(5,206,386)	(4,527,085)
Total assets	(211,998,694)	(200,650,364)
Quad City Bank and Trust [Member]
Segment Reporting Information [Line Items]
Total revenue	11,938,133	12,055,661
Net interest income	8,921,038	8,391,538
Net income attributable to QCR Holdings, Inc.	2,341,283	2,497,025
Total assets	1,269,106,354	1,223,662,809
Provision for loan/lease losses	609,162	357,782
Goodwill	3,222,688	3,222,688
Cedar Rapids Bank and Trust [Member]
Segment Reporting Information [Line Items]
Total revenue	8,303,625	6,928,351
Net interest income	5,902,059	3,844,882
Net income attributable to QCR Holdings, Inc.	1,934,770	1,720,811
Total assets	819,179,681	598,842,406
Provision for loan/lease losses	300,000	300,000
Core deposit intangible	1,820,555
Rockford Bank and Trust [Member]
Segment Reporting Information [Line Items]
Total revenue	3,482,876	3,184,059
Net interest income	2,475,682	2,305,077
Net income attributable to QCR Holdings, Inc.	471,039	96,242
Total assets	346,365,023	322,544,243
Provision for loan/lease losses	185,000	400,000
Wealth Management [Member]
Segment Reporting Information [Line Items]
Total revenue	2,149,334	1,649,011
Net income attributable to QCR Holdings, Inc.	459,294	213,007
All Other [Member]
Segment Reporting Information [Line Items]
Total revenue	5,223,865	4,732,570
Net interest income	(449,538)	(350,180)
Net income attributable to QCR Holdings, Inc.	3,889,215	3,265,144
Total assets	$ 203,666,846	$ 199,591,558

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Note 3 - Loans/Leases Receivable (Details) - Impaired Loans/Leases (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	$ 7,370,591	$ 2,565,810	$ 6,757,674
Unpaid Principal Balance	7,569,679	2,938,193	7,057,203
Average Recorded Investment	8,129,894	6,303,847
Interest Income Recognized	17,516	44,133
Interest Income Recognized for Cash Payments Received	17,516	44,133
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	10,500,956	15,779,852	12,322,746
Unpaid Principal Balance	11,808,113	16,085,745	13,838,755
Related Allowance	4,365,071	4,543,756	5,008,822
Average Recorded Investment	10,049,282	15,407,993
Interest Income Recognized	774	7,537
Interest Income Recognized for Cash Payments Received	774	7,537
Total Impaired Loans/Leases:
Recorded Investment	17,871,547	18,345,662	19,080,420
Unpaid Principal Balance	19,377,792	19,023,938	20,895,958
Related Allowance	4,365,071	4,543,756	5,008,822
Average Recorded Investment	18,179,176	21,711,840
Interest Income Recognized	18,290	51,670
Interest Income Recognized for Cash Payments Received	18,290	51,670
Commercial and Industrial [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	441,945	402,621	492,622
Unpaid Principal Balance	517,833	775,004	568,951
Average Recorded Investment	482,151	767,929
Interest Income Recognized	1,888	1,924
Interest Income Recognized for Cash Payments Received	1,888	1,924
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	958,813	211,400	1,269,228
Unpaid Principal Balance	1,449,488	264,334	1,956,755
Related Allowance	732,427	498,260	927,453
Average Recorded Investment	910,410	216,133
Total Impaired Loans/Leases:
Recorded Investment	1,400,758	614,021	1,761,850
Unpaid Principal Balance	1,967,321	1,039,338	2,525,706
Related Allowance	732,427	498,260	927,453
Average Recorded Investment	1,392,561	984,062
Interest Income Recognized	1,888	1,924
Interest Income Recognized for Cash Payments Received	1,888	1,924
Owner-Occupied Commercial Real Estate [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	389,876	498,946	392,542
Unpaid Principal Balance	389,876	498,946	392,542
Average Recorded Investment	436,412	507,451
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	224,892		159,247
Unpaid Principal Balance	224,892		159,247
Related Allowance	117,555		67,498
Average Recorded Investment	112,438
Total Impaired Loans/Leases:
Recorded Investment	614,768	498,946	551,789
Unpaid Principal Balance	614,768	498,946	551,789
Related Allowance	117,555		67,498
Average Recorded Investment	548,850	507,451
Commercial Construction, Land Development, and Other Land [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	2,124,350		1,943,168
Unpaid Principal Balance	2,247,550		2,054,368
Average Recorded Investment	2,127,392
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	685,292	3,929,839	888,547
Unpaid Principal Balance	796,492	3,929,839	1,011,747
Related Allowance	477,293	1,154,155	503,825
Average Recorded Investment	685,834	3,933,530
Interest Income Recognized		2,703
Interest Income Recognized for Cash Payments Received		2,703
Total Impaired Loans/Leases:
Recorded Investment	2,809,642	3,929,839	2,831,715
Unpaid Principal Balance	3,044,042	3,929,839	3,066,115
Related Allowance	477,293	1,154,155	503,825
Average Recorded Investment	2,813,226	3,933,530
Interest Income Recognized		2,703
Interest Income Recognized for Cash Payments Received		2,703
Non-Owner Occupied Commercial Real Estate [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	1,983,846	47,958	1,790,279
Unpaid Principal Balance	1,983,846	47,958	1,902,279
Average Recorded Investment	2,376,752	3,198,617
Interest Income Recognized	13,283	40,116
Interest Income Recognized for Cash Payments Received	13,283	40,116
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	6,668,048	9,983,944	7,783,132
Unpaid Principal Balance	7,373,330	10,236,903	8,488,414
Related Allowance	2,117,624	2,353,684	2,603,381
Average Recorded Investment	6,682,038	10,046,487
Interest Income Recognized		4,501
Interest Income Recognized for Cash Payments Received		4,501
Total Impaired Loans/Leases:
Recorded Investment	8,651,894	10,031,902	9,573,411
Unpaid Principal Balance	9,357,176	10,284,861	10,390,693
Related Allowance	2,117,624	2,353,684	2,603,381
Average Recorded Investment	9,058,790	13,245,104
Interest Income Recognized	13,283	44,617
Interest Income Recognized for Cash Payments Received	13,283	44,617
Finance Leases Portfolio Segment [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	619,800	789,346	557,469
Unpaid Principal Balance	619,800	789,346	557,469
Average Recorded Investment	586,567	831,677
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	700,842	421,590	336,989
Unpaid Principal Balance	700,842	421,590	336,989
Related Allowance	298,303	325,294	192,847
Average Recorded Investment	467,524	273,192
Total Impaired Loans/Leases:
Recorded Investment	1,320,642	1,210,936	894,458
Unpaid Principal Balance	1,320,642	1,210,936	894,458
Related Allowance	298,303	325,294	192,847
Average Recorded Investment	1,054,091	1,104,869
Residential Portfolio Segment [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	977,436	630,324	1,071,927
Unpaid Principal Balance	977,436	630,324	1,071,927
Average Recorded Investment	1,222,955	810,583
Interest Income Recognized	1,455
Interest Income Recognized for Cash Payments Received	1,455
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	866,172	305,612	1,044,820
Unpaid Principal Balance	866,172	305,612	1,044,820
Related Allowance	224,972	95,232	246,266
Average Recorded Investment	793,141	308,841
Interest Income Recognized	774
Interest Income Recognized for Cash Payments Received	774
Total Impaired Loans/Leases:
Recorded Investment	1,843,608	935,936	2,116,747
Unpaid Principal Balance	1,843,608	935,936	2,116,747
Related Allowance	224,972	95,232	246,266
Average Recorded Investment	2,016,096	1,119,424
Interest Income Recognized	2,229
Interest Income Recognized for Cash Payments Received	2,229
Consumer Portfolio Segment [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Recorded Investment	833,338	196,615	509,667
Unpaid Principal Balance	833,338	196,615	509,667
Average Recorded Investment	897,665	187,590
Interest Income Recognized	890	2,093
Interest Income Recognized for Cash Payments Received	890	2,093
Impaired Loans/Leases with Specific Allowance Recorded:
Recorded Investment	396,897	927,467	840,783
Unpaid Principal Balance	396,897	927,467	840,783
Related Allowance	396,897	117,131	467,552
Average Recorded Investment	397,897	629,810
Interest Income Recognized		333
Interest Income Recognized for Cash Payments Received		333
Total Impaired Loans/Leases:
Recorded Investment	1,230,235	1,124,082	1,350,450
Unpaid Principal Balance	1,230,235	1,124,082	1,350,450
Related Allowance	396,897	117,131	467,552
Average Recorded Investment	1,295,562	817,400
Interest Income Recognized	890	2,426
Interest Income Recognized for Cash Payments Received	$ 890	$ 2,426

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Note 2 - Investment Securities (Details) - Gross Unrealized Losses and Fair Value of Securities in a Continuous Unrealized Loss Position (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Securities available for sale:
Available for Sale Securities less than 12 months fair value	$ 417,394,320	$ 441,808,604
Available for Sale Securities less than 12 months gross unrealized losses	(14,769,120)	(22,813,786)
Available for Sale Securities 12 months or more fair value	34,224,213	26,081,796
Available for Sale Securities 12 months or more gross unrealized losses	(1,845,235)	(1,941,536)
Available for Sale Securities fair value	451,618,533	467,890,400
Available for Sale Securities gross unrealized losses	(16,614,355)	(24,755,322)
US States and Political Subdivisions Debt Securities [Member]
Securities held to maturity:
Held to Maturity Securities less than 12 months fair value	90,268,363	101,983,602
Held to Maturity Securities less than 12 months gross unrealized losses	(3,972,217)	(6,711,240)
Held to Maturity Securities 12 months or more fair value	11,141,166	2,697,375
Held to Maturity Securities 12 months or more gross unrealized losses	(795,903)	(400,339)
Held to Maturity Securities fair value	101,409,529	104,680,977
Held to Maturity Securities gross unrealized losses	(4,768,120)	(7,111,579)
Securities available for sale:
Available for Sale Securities less than 12 months fair value	12,715,294	13,890,692
Available for Sale Securities less than 12 months gross unrealized losses	(372,659)	(724,939)
Available for Sale Securities 12 months or more fair value	1,699,797	985,687
Available for Sale Securities 12 months or more gross unrealized losses	(44,367)	(53,385)
Available for Sale Securities fair value	14,415,091	14,876,379
Available for Sale Securities gross unrealized losses	(417,026)	(778,324)
US Government Agencies Debt Securities [Member]
Securities available for sale:
Available for Sale Securities less than 12 months fair value	330,406,007	333,194,820
Available for Sale Securities less than 12 months gross unrealized losses	(12,809,546)	(19,141,077)
Available for Sale Securities 12 months or more fair value	11,194,076	10,978,390
Available for Sale Securities 12 months or more gross unrealized losses	(786,261)	(1,001,764)
Available for Sale Securities fair value	341,600,083	344,173,210
Available for Sale Securities gross unrealized losses	(13,595,807)	(20,142,841)
Residential Mortgage Backed Securities [Member]
Securities available for sale:
Available for Sale Securities less than 12 months fair value	74,273,019	94,723,092
Available for Sale Securities less than 12 months gross unrealized losses	(1,586,915)	(2,947,770)
Available for Sale Securities 12 months or more fair value	21,330,340	14,117,719
Available for Sale Securities 12 months or more gross unrealized losses	(1,014,607)	(886,387)
Available for Sale Securities fair value	95,603,359	108,840,811
Available for Sale Securities gross unrealized losses	$ (2,601,522)	$ (3,834,157)

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Note 6 - Fair Value (Details) - Quantitative Information About Level Fair Value Measurements (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	$ 17,972,804	$ 19,516,934
Impaired Loans/Leases [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	7,524,198	9,009,557
Valuation technique	Appraisal of collateral	Appraisal of collateral
Other Real Estate Owned [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	$ 10,448,606	$ 10,507,377
Valuation technique	Appraisal of collateral	Appraisal of collateral
Minimum [Member] | Impaired Loans/Leases [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range	(10.00%)	(10.00%)
Minimum [Member] | Other Real Estate Owned [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range	0.00%	0.00%
Maximum [Member] | Impaired Loans/Leases [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range	(50.00%)	(50.00%)
Maximum [Member] | Other Real Estate Owned [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range	(35.00%)	(35.00%)

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Note 3 - Loans/Leases Receivable (Details) - Troubled Debt Restructurings (USD $)				3 Months Ended			3 Months Ended					3 Months Ended				3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Mar. 31, 2013 Owner-Occupied Commercial Real Estate [Member] Significant Payment Delay [Member]	Mar. 31, 2014 Owner-Occupied Commercial Real Estate [Member]	Dec. 31, 2013 Owner-Occupied Commercial Real Estate [Member]	Mar. 31, 2014 Finance Leases Portfolio Segment [Member] Significant Payment Delay [Member]	Mar. 31, 2014 Finance Leases Portfolio Segment [Member] Extension of Maturity [Member]	Mar. 31, 2014 Finance Leases Portfolio Segment [Member]	Dec. 31, 2013 Finance Leases Portfolio Segment [Member]	Mar. 31, 2013 Finance Leases Portfolio Segment [Member]	Mar. 31, 2013 Commercial and Industrial [Member] Extension of Maturity [Member]	Mar. 31, 2014 Commercial and Industrial [Member]	Dec. 31, 2013 Commercial and Industrial [Member]	Mar. 31, 2013 Commercial and Industrial [Member]	Mar. 31, 2014 Significant Payment Delay [Member]	Mar. 31, 2013 Significant Payment Delay [Member]	Mar. 31, 2014 Extension of Maturity [Member]	Mar. 31, 2013 Extension of Maturity [Member]	Mar. 31, 2014 Troubled Debt Restructurings [Member]	Mar. 31, 2013 Troubled Debt Restructurings [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings Number of Loans/Leases				1			1	1				3				1	1	1	3	2	4
Troubled Debt Restructurings Pre-Modification Recorded Investment				$ 47,958			$ 89,443	$ 70,144				$ 809,494				$ 89,443	$ 47,958	$ 70,144	$ 809,494	$ 159,587	$ 857,452
Troubled Debt Restructurings Post-Modification Recorded Investment				47,958			89,443	70,144				809,494				89,443	47,958	70,144	809,494	159,587	857,452
Troubled Debt Restructurings Specific Allowance	$ 4,365,071	$ 5,008,822	$ 4,543,756		$ 117,555	$ 67,498		$ 24,246	$ 298,303	$ 192,847	$ 325,294	$ 188,700	$ 732,427	$ 927,453	$ 498,260			$ 24,246	$ 188,700	$ 24,246	$ 188,700

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Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) (Series F Noncumulative Perpetual Preferred Stock [Member])	3 Months Ended
	Mar. 31, 2014
Series F Noncumulative Perpetual Preferred Stock [Member]
Redemption of shares of Series F Noncumulative Perpetual Preferred Stock, net	15,000

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Note 6 - Fair Value (Details) - Carrying Values and Estimated Fair Values of Financial Assets and Liabilities (USD $)	Mar. 31, 2014	Dec. 31, 2013
Note 6 - Fair Value (Details) - Carrying Values and Estimated Fair Values of Financial Assets and Liabilities [Line Items]
Cash and due from banks	$ 55,444,302	$ 41,950,790
Federal funds sold	11,570,000	39,435,000
Interest-bearing deposits at financial institutions	44,389,277	33,044,917
Investment securities:
Held to maturity	161,629,152
Held to maturity	157,617,860	138,640,105
Available for sale	545,477,537	551,758,458
Loans/leases receivable, net	1,121,578,680	1,103,441,058
Deposits:
Deposits	1,671,893,643	1,646,991,243
Other borrowings	142,250,644	142,448,362
Nonmaturity Deposits [Member] | Fair Value, Inputs, Level 2 [Member]
Deposits:
Deposits	1,296,408,620	1,256,209,352
Deposits, fair value	1,296,408,620	1,256,209,352
Time Deposits [Member] | Fair Value, Inputs, Level 2 [Member]
Deposits:
Deposits	375,485,023	390,781,891
Deposits, fair value	376,596,000	391,923,000
Fair Value, Inputs, Level 1 [Member]
Note 6 - Fair Value (Details) - Carrying Values and Estimated Fair Values of Financial Assets and Liabilities [Line Items]
Cash and due from banks	55,444,302	41,950,790
Cash and due from banks	55,444,302	41,950,790
Interest-bearing deposits at financial institutions	55,444,302	41,950,790
Investment securities:
Available for sale	317,137	317,698
Fair Value, Inputs, Level 2 [Member]
Note 6 - Fair Value (Details) - Carrying Values and Estimated Fair Values of Financial Assets and Liabilities [Line Items]
Federal funds sold	11,570,000	39,435,000
Federal funds sold	11,570,000	39,435,000
Investment securities:
Available for sale	545,160,400	551,440,760
Loans/leases receivable, net	1,462,959,422	1,430,489,328
Loans/leases receivable, net, fair value	1,472,150,150	1,441,952,443
Deposits:
Short-term borrowings	165,569,112	149,292,967
Short-term borrowings	165,569,112	149,292,967
Federal Home Loan Bank advances	235,700,000	231,350,000
Federal Home Loan Bank advances	245,555,000	241,623,000
Other borrowings	142,250,644	142,448,362
Other borrowings	152,184,000	152,761,000
Junior subordinated debentures	40,322,765	40,289,830
Junior subordinated debentures	28,218,054	28,094,228
Fair Value, Inputs, Level 3 [Member]
Investment securities:
Held to maturity	161,629,152	145,451,895
Held to maturity	157,617,860	138,640,105
Loans/leases receivable, net	6,966,850	8,342,182
Loans/leases receivable, net, fair value	7,524,198	9,009,557
Interest-bearing Deposits [Member] | Fair Value, Inputs, Level 2 [Member]
Note 6 - Fair Value (Details) - Carrying Values and Estimated Fair Values of Financial Assets and Liabilities [Line Items]
Cash and due from banks	44,389,277	33,044,917
Interest-bearing deposits at financial institutions	44,389,277	33,044,917
Interest-bearing deposits at financial institutions	$ 44,389,277	$ 33,044,917

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Note 3 - Loans/Leases Receivable (Details) - Composition of the Loan/Lease Portfolio (USD $)	Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	$ 1,487,332,496		$ 1,455,732,633
Plus deferred loan/lease origination costs	5,247,046		4,546,925
Total Loans/Leases plus deferred loan/lease origination costs	1,492,579,542		1,460,279,558
Less allowance for estimated losses on loans/leases	(22,653,270)		(21,448,048)		(20,769,462)	(19,925,204)
Loans/leases net of allowance for estimated losses	1,469,926,272		1,438,831,510
Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	442,350,475		431,688,129
Less allowance for estimated losses on loans/leases	(6,647,658)		(5,648,774)		(4,466,264)	(4,531,545)
Owner-Occupied Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	269,483,524		261,215,912
Commercial Construction, Land Development, and Other Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	55,194,025		57,844,902
Other Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	354,550,656		352,692,115
Commercial Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	679,228,205		671,752,929
Less allowance for estimated losses on loans/leases	(10,587,657)		(10,705,434)		(12,188,953)	(11,069,502)
Finance Leases Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net minimum lease payments to be received	158,423,507		145,662,254
Estimated unguaranteed residual values of leased assets	1,611,999		1,694,499
Unearned lease/residual income	(20,041,447)		(18,455,311)
Loans and Leases	139,994,059		128,901,442
Plus deferred loan/lease origination costs	5,347,779		4,814,183
Total Loans/Leases plus deferred loan/lease origination costs	145,341,838		133,715,625
Less allowance for estimated losses on loans/leases	(2,820,239)		(2,517,217)		(2,296,523)	(1,990,395)
Loans/leases net of allowance for estimated losses	142,521,599		131,198,408
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	148,950,217	[1]	147,356,323	[1]
Less allowance for estimated losses on loans/leases	(1,388,885)		(1,395,849)		(966,336)	(1,070,328)
Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases	76,809,540		76,033,810
Less allowance for estimated losses on loans/leases	$ (1,208,831)		$ (1,180,774)		$ (851,386)	$ (1,263,434)

[1] Includes residential real estate loans held for sale totaling $291,600 and $1,358,290 as of March 31, 2014, and December 31, 2013, respectively.

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Note 3 - Loans/Leases Receivable (Details) (USD $)	3 Months Ended																											3 Months Ended				3 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014 Residential Portfolio Segment [Member] Troubled Debt Restructurings [Member]	Dec. 31, 2013 Residential Portfolio Segment [Member] Troubled Debt Restructurings [Member]	Mar. 31, 2014 Residential Portfolio Segment [Member]		Dec. 31, 2013 Residential Portfolio Segment [Member]		Mar. 31, 2014 Commercial and Industrial [Member] Troubled Debt Restructurings [Member]	Dec. 31, 2013 Commercial and Industrial [Member] Troubled Debt Restructurings [Member]	Mar. 31, 2014 Commercial and Industrial [Member]		Dec. 31, 2013 Commercial and Industrial [Member]		Mar. 31, 2014 Commercial Real Estate Portfolio Segment [Member] Troubled Debt Restructurings [Member]	Dec. 31, 2013 Commercial Real Estate Portfolio Segment [Member] Troubled Debt Restructurings [Member]	Mar. 31, 2014 Finance Leases Portfolio Segment [Member] Troubled Debt Restructurings [Member]	Mar. 31, 2014 Finance Leases Portfolio Segment [Member]		Dec. 31, 2013 Finance Leases Portfolio Segment [Member]		Dec. 31, 2013 Consumer Portfolio Segment [Member] Troubled Debt Restructurings [Member]	Mar. 31, 2014 Consumer Portfolio Segment [Member]		Dec. 31, 2013 Consumer Portfolio Segment [Member]		Mar. 31, 2014 Troubled Debt Restructurings [Member]	Mar. 31, 2013 Troubled Debt Restructurings [Member]	Dec. 31, 2013 Troubled Debt Restructurings [Member]	Mar. 31, 2014 Consumer Portfolio Segment [Member]	Mar. 31, 2014 Nonaccrual [Member]	Dec. 31, 2013 Nonaccrual [Member]
Note 3 - Loans/Leases Receivable (Details) [Line Items]
Loans Held-for-sale, Mortgages						$ 291,600		$ 1,358,290
Financing Receivable, Recorded Investment, Nonaccrual Status	17,653,407		17,877,897	449,525	446,996	1,496,065	[1]	1,618,483	[2]	75,371	77,072	1,546,133	[1]	1,744,981	[2]	9,862,220	10,077,501	70,144	1,231,199	[1]	894,458	[2]	289,216	873,235	[1]	975,009	[2]	10,666,735		10,890,785	209,475
Financing Receivable, Modifications, Recorded Investment	11,640,416		13,413,366			347,543		371,995				179,695		878,381					89,443					357,000		367,000
Financing Receivable, Modifications, Number of Contracts																												2	4			1	2
Financing Receivable, Modifications, Post-Modification Recorded Investment																												$ 159,587	$ 857,452			$ 70,144	$ 80,426
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0

[1] Nonaccrual loans/leases includes $10,666,735 of troubled debt restructurings, including $75,371 in commercial and industrial loans, $9,862,220 in commercial real estate loans, $70,144 in direct financing leases, $449,525 in residential real estate loans, and $209,475 in installment loans.

[2] Nonaccrual loans/leases includes $10,890,785 of troubled debt restructurings, including $77,072 in commercial and industrial loans, $10,077,501 in commercial real estate loans, $446,996 in residential real estate loans, and $289,216 in installment loans.

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Note 7 - Partial Redemption of Series F Preferred Stock (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	22 Months Ended
	Jun. 29, 2012	Mar. 31, 2014	Sep. 15, 2011	Dec. 31, 2013	Mar. 31, 2014
Note 7 - Partial Redemption of Series F Preferred Stock (Details) [Line Items]
Preferred Stock, Shares Issued		14,867		29,867	14,867
Redemption Percentage if Less Than 25% of Originally Issued Shares [Member] | Series F Preferred Stock [Member]
Note 7 - Partial Redemption of Series F Preferred Stock (Details) [Line Items]
Stock Redemption Percent of Outstanding Shares		100.00%
Series F Preferred Stock [Member]
Note 7 - Partial Redemption of Series F Preferred Stock (Details) [Line Items]
Stock Redeemed or Called During Period, Shares	10,223	15,000			25,223
Stock Redeemed or Called During Period, Value (in Dollars)		$ 15,000,000
Dividends, Preferred Stock (in Dollars)		337,500
Preferred Stock, Shares Issued			40,090
Proceeds from Sale of Treasury Stock (in Dollars)			$ 40,090,000
Unredeemed Stock		14,867			14,867
Preferred Stock, Dividend Rate, Percentage		9.00%		5.00%
Stock Redemption Percent of Originally Issued Shares		25.00%

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Note 3 - Loans/Leases Receivable (Details) - Aging of the Loan/Lease Portfolio (USD $)	Mar. 31, 2014		Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 1,462,397,460		$ 1,430,204,215
30-59 Days Past Due	5,762,575		5,430,932
60-89 Days Past Due	1,513,479		2,135,415
Accruing Past Due 90 Days or More	5,575		84,174
Nonacrrual Loans/Loans	17,653,407		17,877,897
Total	1,487,332,496		1,455,732,633
Current as a percentage of total loan/lease portfolio	98.32%		98.25%
30-59 Days Past Due as a percentage of total loan/lease portfolio	0.39%		0.37%
60-89 Days Past Due as a percentage of total loan/lease portfolio	0.10%		0.15%
Accruing Past Due 90 Days or More as a percentage of total loan/lease portfolio	0.00%		0.01%
Nonacrrual Loans/Loans as a percentage of total loan/lease portfolio	1.19%		1.23%
Total as a percentage of total loan/lease portfolio	100.00%		100.00%
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	440,037,552		429,557,699
30-59 Days Past Due	679,842		199,949
60-89 Days Past Due	82,110		185,500
Accruing Past Due 90 Days or More	4,838
Nonacrrual Loans/Loans	1,546,133	[1]	1,744,981	[2]
Total	442,350,475		431,688,129
Total as a percentage of total loan/lease portfolio	9.29%		12.81%
Owner-Occupied Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	268,087,219		258,557,660
30-59 Days Past Due	217,205		465,418
60-89 Days Past Due	101,723		993,163
Accruing Past Due 90 Days or More			60,286
Nonacrrual Loans/Loans	1,077,377	[1]	1,139,385	[2]
Total	269,483,524		261,215,912
Total as a percentage of total loan/lease portfolio	5.78%		5.86%
Commercial Construction, Land Development, and Other Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	53,069,537		56,301,186
30-59 Days Past Due	943,219		358,626
Nonacrrual Loans/Loans	1,181,269	[1]	1,185,090	[2]
Total	55,194,025		57,844,902
Total as a percentage of total loan/lease portfolio	6.34%		5.79%
Other Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	342,951,740		341,743,730
30-59 Days Past Due	246,141		476,877
60-89 Days Past Due	1,104,646		151,017
Nonacrrual Loans/Loans	10,248,129		10,320,491
Total	354,550,656		352,692,115
Finance Leases Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	136,956,753		126,878,515
30-59 Days Past Due	1,684,403		714,464
60-89 Days Past Due	120,969		414,005
Accruing Past Due 90 Days or More	735
Nonacrrual Loans/Loans	1,231,199	[1]	894,458	[2]
Total	139,994,059		128,901,442
Total as a percentage of total loan/lease portfolio	7.09%		4.37%
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	145,891,697		142,353,936
30-59 Days Past Due	1,562,455		3,088,516
60-89 Days Past Due			275,262
Accruing Past Due 90 Days or More			20,126
Nonacrrual Loans/Loans	1,496,065	[1]	1,618,483	[2]
Total	148,950,217	[3]	147,356,323	[3]
Total as a percentage of total loan/lease portfolio	9.89%		9.82%
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	75,402,962		74,811,489
30-59 Days Past Due	429,310		127,082
60-89 Days Past Due	104,031		116,468
Accruing Past Due 90 Days or More	2		3,762
Nonacrrual Loans/Loans	873,235	[1]	975,009	[2]
Total	$ 76,809,540		$ 76,033,810
Total as a percentage of total loan/lease portfolio	6.60%		6.57%

[1] Nonaccrual loans/leases includes $10,666,735 of troubled debt restructurings, including $75,371 in commercial and industrial loans, $9,862,220 in commercial real estate loans, $70,144 in direct financing leases, $449,525 in residential real estate loans, and $209,475 in installment loans.

[2] Nonaccrual loans/leases includes $10,890,785 of troubled debt restructurings, including $77,072 in commercial and industrial loans, $10,077,501 in commercial real estate loans, $446,996 in residential real estate loans, and $289,216 in installment loans.

[3] Includes residential real estate loans held for sale totaling $291,600 and $1,358,290 as of March 31, 2014, and December 31, 2013, respectively.

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Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases (USD $)	Mar. 31, 2014		Dec. 31, 2013
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Nonaccrual loans/leases	$ 17,653,407		$ 17,877,897
Troubled debt restructurings - accruing	11,640,416		13,413,366
Percentage of total nonperforming loans/leases	100.00%		100.00%
Commercial and Industrial [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Accruing past due 90 days or more	4,838
Nonaccrual loans/leases	1,546,133	[1]	1,744,981	[2]
Troubled debt restructurings - accruing	179,695		878,381
Total nonperforming loans/leases	1,730,666		2,623,362
Percentage of total nonperforming loans/leases	9.29%		12.81%
Owner-Occupied Commercial Real Estate [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Accruing past due 90 days or more			60,286
Nonaccrual loans/leases	1,077,377	[1]	1,139,385	[2]
Total nonperforming loans/leases	1,077,377		1,199,671
Percentage of total nonperforming loans/leases	5.78%		5.86%
Commercial Construction, Land Development, and Other Land [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Nonaccrual loans/leases	1,181,269	[1]	1,185,090	[2]
Total nonperforming loans/leases	1,181,269		1,185,090
Percentage of total nonperforming loans/leases	6.34%		5.79%
Non-Owner Occupied Commercial Real Estate [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Nonaccrual loans/leases	10,248,129	[1]	10,320,491	[2]
Troubled debt restructurings - accruing			905,205
Total nonperforming loans/leases	10,248,129		11,225,696
Percentage of total nonperforming loans/leases	55.00%		54.80%
Finance Leases Portfolio Segment [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Accruing past due 90 days or more	735
Nonaccrual loans/leases	1,231,199	[1]	894,458	[2]
Troubled debt restructurings - accruing	89,443
Total nonperforming loans/leases	1,321,377		894,458
Percentage of total nonperforming loans/leases	7.09%		4.37%
Residential Portfolio Segment [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Accruing past due 90 days or more			20,126
Nonaccrual loans/leases	1,496,065	[1]	1,618,483	[2]
Troubled debt restructurings - accruing	347,543		371,995
Total nonperforming loans/leases	1,843,608		2,010,604
Percentage of total nonperforming loans/leases	9.89%		9.82%
Consumer Portfolio Segment [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Accruing past due 90 days or more	2		3,762
Nonaccrual loans/leases	873,235	[1]	975,009	[2]
Troubled debt restructurings - accruing	357,000		367,000
Total nonperforming loans/leases	1,230,237		1,345,771
Percentage of total nonperforming loans/leases	6.60%		6.57%
Total [Member]
Note 3 - Loans/Leases Receivable (Details) - Nonperforming Loans/Leases [Line Items]
Accruing past due 90 days or more	5,575		84,174
Nonaccrual loans/leases	17,653,407	[1]	17,877,897	[2]
Troubled debt restructurings - accruing	973,681		2,522,581
Total nonperforming loans/leases	$ 18,632,663		$ 20,484,652
Percentage of total nonperforming loans/leases	100.00%		100.00%

[1] Nonaccrual loans/leases includes $10,666,735 of troubled debt restructurings, including $75,371 in commercial and industrial loans, $9,862,220 in commercial real estate loans, $70,144 in direct financing leases, $449,525 in residential real estate loans, and $209,475 in installment loans.

[2] Nonaccrual loans/leases includes $10,890,785 of troubled debt restructurings, including $77,072 in commercial and industrial loans, $10,077,501 in commercial real estate loans, $446,996 in residential real estate loans, and $289,216 in installment loans.

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 3,889,215	$ 3,265,144
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	692,562	584,884
Provision for loan/lease losses	1,094,162	1,057,782
Stock-based compensation expense	347,752	293,798
Deferred compensation expense accrued	347,850	204,794
Losses on other real estate owned, net	18,048	446,630
Amortization of premiums on securities, net	535,951	974,045
Securities gains	(20,625)
Loans originated for sale	(6,354,404)	(26,928,996)
Proceeds on sales of loans	7,678,600	30,382,098
Gains on sales of residential real estate loans	(63,487)	(291,151)
Gains on sales of government guaranteed portions of loans	(194,019)	(845,224)
Amortization of core deposit intangible	49,878
Accretion of acquisition fair value adjustments, net	(161,042)
Increase in cash value of bank-owned life insurance	(454,164)	(438,687)
Decrease in other assets	3,804,360	587,964
Decrease in other liabilities	(8,049,459)	(2,056,297)
Net cash provided by operating activities	3,161,178	7,236,784
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in federal funds sold	27,865,000	26,560,000
Net increase in interest-bearing deposits at financial institutions	(11,344,360)	(11,422,165)
Proceeds from sales of other real estate owned	97,120	15,989
Activity in securities portfolio:
Purchases	(26,142,834)	(187,650,573)
Calls, maturities and redemptions	10,563,599	82,114,256
Paydowns	6,547,632	12,893,508
Sales	7,020,625
Activity in restricted investment securities:
Purchases	(1,040,000)	(1,743,750)
Redemptions	814,900	2,193,900
Net increase in loans/leases originated and held for investment	(33,066,658)	(7,125,623)
Purchase of premises and equipment	(563,035)	(775,714)
Net cash used in investing activities	(19,248,011)	(84,940,172)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts	24,915,536	46,379,158
Net increase in short-term borrowings	16,276,145	770,510
Advances	60,700,000	46,000,000
Calls and maturities	(56,350,000)	(43,000,000)
Net decrease in other borrowings	(200,000)
Payment of cash dividends on common and preferred stock	(941,177)	(1,002,789)
Net cash provided by financing activities	29,580,345	49,389,079
Net increase (decrease) in cash and due from banks	13,493,512	(28,314,309)
Cash and due from banks, beginning	41,950,790	61,568,446
Cash and due from banks, ending	55,444,302	33,254,137
Supplemental disclosure of cash flow information, cash payments for:
Interest	4,140,254	4,472,977
Income/franchise taxes	1,365,000	717,300
Supplemental schedule of noncash investing activities:
Change in accumulated other comprehensive income (loss), unrealized gains (losses) on securities available for sale, net	5,230,784	(836,358)
Exchange of shares of common stock in connection with payroll taxes for restricted stock and in connection with stock options exercised	(177,984)	(424,587)
Transfers of loans to other real estate owned	60,750	187,500
Series F Noncumulative Perpetual Preferred Stock [Member]
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of 15,000 shares of Series F Noncumulative Perpetual Preferred Stock, net	(15,000,000)
Common Stock [Member]
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net	$ 179,841	$ 242,200

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Note 3 - Loans/Leases Receivable (Details) - Allowance for Estimated Losses on Loans/Leases (USD $)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning	$ 21,448,048		$ 19,925,204
Balance, ending	22,653,270		20,769,462
Loans/leases individually evaluated for impairment	17,871,547			19,080,420
Loans/leases collectively evaluated for impairment	1,469,460,949			1,436,652,213
Loans/Leases receivable	1,487,332,496			1,455,732,633
Allowance as a percentage of loans/leases individually evaluated for impairment	24.42%			26.25%
Allowance as a percentage of loans/leases collectively evaluated for impairment	1.24%			1.14%
Total allowancе as a pеrcеntagе of total loans/lеaеss	1.52%			1.47%
Allowance for loans/leases individually evaluated for impairment	4,365,071			5,008,822
Allowance for loans/leases collectively evaluated for impairment	18,288,199			16,439,226
Provisions charged to expense	1,094,162		1,057,782
Loans/leases charged off	(79,321)		(302,767)
Recoveries on loans/leases previously charged off	190,381		89,243
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning	5,648,774		4,531,545
Balance, ending	6,647,658		4,466,264
Loans/leases individually evaluated for impairment	1,400,758			1,761,850
Loans/leases collectively evaluated for impairment	440,949,717			429,926,279
Loans/Leases receivable	442,350,475			431,688,129
Allowance as a percentage of loans/leases individually evaluated for impairment	52.29%			52.64%
Allowance as a percentage of loans/leases collectively evaluated for impairment	1.34%			1.10%
Total allowancе as a pеrcеntagе of total loans/lеaеss	1.50%			1.31%
Allowance for loans/leases individually evaluated for impairment	732,427			927,453
Allowance for loans/leases collectively evaluated for impairment	5,915,231			4,721,321
Provisions charged to expense	976,790		(87,807)
Loans/leases charged off	(4,023)		(215)
Recoveries on loans/leases previously charged off	26,117		22,741
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning	10,705,434		11,069,502
Balance, ending	10,587,657		12,188,953
Loans/leases individually evaluated for impairment	12,076,304			12,956,915
Loans/leases collectively evaluated for impairment	667,151,901			658,796,014
Loans/Leases receivable	679,228,205			671,752,929
Allowance as a percentage of loans/leases individually evaluated for impairment	22.46%			24.50%
Allowance as a percentage of loans/leases collectively evaluated for impairment	1.18%			1.14%
Total allowancе as a pеrcеntagе of total loans/lеaеss	1.56%			1.59%
Allowance for loans/leases individually evaluated for impairment	2,712,472			3,174,704
Allowance for loans/leases collectively evaluated for impairment	7,875,185			7,530,730
Provisions charged to expense	(229,985)		1,114,294
Loans/leases charged off	(4,098)
Recoveries on loans/leases previously charged off	116,306		5,157
Finance Leases Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning	2,517,217		1,990,395
Balance, ending	2,820,239		2,296,523
Loans/leases individually evaluated for impairment	1,320,642			894,458
Loans/leases collectively evaluated for impairment	138,673,417			128,006,984
Loans/Leases receivable	139,994,059			128,901,442
Allowance as a percentage of loans/leases individually evaluated for impairment	22.59%			21.56%
Allowance as a percentage of loans/leases collectively evaluated for impairment	1.82%			1.82%
Total allowancе as a pеrcеntagе of total loans/lеaеss	2.01%			1.95%
Allowance for loans/leases individually evaluated for impairment	298,303			192,847
Allowance for loans/leases collectively evaluated for impairment	2,521,936			2,324,370
Provisions charged to expense	352,647		378,623
Loans/leases charged off	(65,733)		(73,049)
Recoveries on loans/leases previously charged off	16,108		554
Residential Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning	1,395,849		1,070,328
Balance, ending	1,388,885		966,336
Loans/leases individually evaluated for impairment	1,843,608			2,116,747
Loans/leases collectively evaluated for impairment	147,106,609			145,239,576
Loans/Leases receivable	148,950,217	[1]		147,356,323	[1]
Allowance as a percentage of loans/leases individually evaluated for impairment	12.20%			11.63%
Allowance as a percentage of loans/leases collectively evaluated for impairment	0.79%			0.79%
Total allowancе as a pеrcеntagе of total loans/lеaеss	0.93%			0.95%
Allowance for loans/leases individually evaluated for impairment	224,972			246,266
Allowance for loans/leases collectively evaluated for impairment	1,163,913			1,149,583
Provisions charged to expense	(4,355)		8,899
Loans/leases charged off	(2,712)		(112,891)
Recoveries on loans/leases previously charged off	103
Consumer Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning	1,180,774		1,263,434
Balance, ending	1,208,831		851,386
Loans/leases individually evaluated for impairment	1,230,235			1,350,450
Loans/leases collectively evaluated for impairment	75,579,305			74,683,360
Loans/Leases receivable	76,809,540			76,033,810
Allowance as a percentage of loans/leases individually evaluated for impairment	32.26%			34.62%
Allowance as a percentage of loans/leases collectively evaluated for impairment	1.07%			0.95%
Total allowancе as a pеrcеntagе of total loans/lеaеss	1.57%			1.55%
Allowance for loans/leases individually evaluated for impairment	396,897			467,552
Allowance for loans/leases collectively evaluated for impairment	811,934			713,222
Provisions charged to expense	(935)		(356,227)
Loans/leases charged off	(2,755)		(116,612)
Recoveries on loans/leases previously charged off	$ 31,747		$ 60,791

[1] Includes residential real estate loans held for sale totaling $291,600 and $1,358,290 as of March 31, 2014, and December 31, 2013, respectively.

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Note 6 - Fair Value (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Fair Value Disclosures [Abstract]
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	$ 0	$ 0
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	$ 0	$ 0

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Consolidated Balance Sheets (Unaudited) (USD $)	Mar. 31, 2014	Dec. 31, 2013
ASSETS
Cash and due from banks	$ 55,444,302	$ 41,950,790
Federal funds sold	11,570,000	39,435,000
Interest-bearing deposits at financial institutions	44,389,277	33,044,917
Securities held to maturity, at amortized cost	161,629,152	145,451,895
Securities available for sale, at fair value	545,477,537	551,758,458
Total securities	707,106,689	697,210,353
Loans receivable held for sale	291,600	1,358,290
Loans/leases receivable held for investment	1,492,287,942	1,458,921,268
Gross loans/leases receivable	1,492,579,542	1,460,279,558
Less allowance for estimated losses on loans/leases	(22,653,270)	(21,448,048)
Net loans/leases receivable	1,469,926,272	1,438,831,510
Premises and equipment, net	36,625,837	36,755,364
Goodwill	3,222,688	3,222,688
Core deposit intangible	1,820,555	1,870,433
Bank-owned life insurance	52,456,205	52,002,041
Restricted investment securities	17,252,725	17,027,625
Other real estate owned, net	9,674,635	9,729,053
Other assets	16,830,025	23,873,150
Total assets	2,426,319,210	2,394,952,924
Deposits:
Noninterest-bearing	579,109,614	542,566,087
Interest-bearing	1,092,784,029	1,104,425,156
Total deposits	1,671,893,643	1,646,991,243
Short-term borrowings	165,569,112	149,292,967
Federal Home Loan Bank advances	235,700,000	231,350,000
Other borrowings	142,250,644	142,448,362
Junior subordinated debentures	40,322,765	40,289,830
Other liabilities	29,226,019	37,003,742
Total liabilities	2,284,962,183	2,247,376,144
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value; shares authorized 250,000	14,867	29,867
Common stock, $1 par value; shares authorized 20,000,000	8,038,608	8,005,708
Additional paid-in capital	75,504,884	90,154,528
Retained earnings	67,818,380	64,637,173
Accumulated other comprehensive loss	(8,413,202)	(13,643,986)
Less treasury stock, March 2014 and December 2013 - 121,246 common shares, at cost	(1,606,510)	(1,606,510)
Total stockholders' equity	141,357,027	147,576,780
Total liabilities and stockholders' equity	$ 2,426,319,210	$ 2,394,952,924

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Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $)	Preferred Stock [Member] Series F Noncumulative Perpetual Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member] Series F Noncumulative Perpetual 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 Noncumulative Perpetual Preferred Stock [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2012		$ 54,867	$ 5,039,448		$ 78,912,791	$ 53,326,542	$ 4,706,683	$ (1,606,510)		$ 140,433,821
Net income						3,265,144				3,265,144	3,265,144
Other comprehensive income (loss), net of tax							(836,358)			(836,358)	(836,358)
Preferred cash dividends declared and accrued						(810,837)				(810,837)
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan			5,884		63,487					69,371
Proceeds from issuance of common stock as a result of stock options exercised			19,278		153,550					172,828
Exchange of 7,048 shares of common stock in connection with stock options exercised			(7,048)		(111,628)					(118,676)
Stock-based compensation expense					293,798					293,798
Tax benefit of nonqualified stock options exercised					35,251					35,251
Restricted stock awards			16,798		(16,798)
Exchange of shares of common stock in connection with payroll taxes for restricted stock			(16,798)		(289,113)					(305,911)
Balance at Mar. 31, 2013		54,867	5,057,562		79,041,338	55,780,849	3,870,325	(1,606,510)		142,198,431
Balance at Dec. 31, 2013		29,867	8,005,708		90,154,528	64,637,173	(13,643,986)	(1,606,510)		147,576,780	147,576,780
Net income						3,889,215				3,889,215	3,889,215
Other comprehensive income (loss), net of tax							5,230,784			5,230,784	5,230,784
Preferred cash dividends declared and accrued						(708,008)				(708,008)
Redemption of 15,000 shares of Series F Noncumulative Perpetual Preferred Stock	(15,000)			(14,985,000)					(15,000,000)
Proceeds from issuance of common stock as a result of stock purchased under the Employee Stock Purchase Plan			6,189		78,256					84,445
Proceeds from issuance of common stock as a result of stock options exercised			9,814		85,582					95,396
Stock-based compensation expense					347,752					347,752
Tax benefit of nonqualified stock options exercised					18,647					18,647
Restricted stock awards			27,197		(27,197)
Exchange of shares of common stock in connection with payroll taxes for restricted stock			(10,300)		(167,684)					(177,984)
Balance at Mar. 31, 2014		$ 14,867	$ 8,038,608		$ 75,504,884	$ 67,818,380	$ (8,413,202)	$ (1,606,510)		$ 141,357,027	$ 141,357,027

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Note 3 - Loans/Leases Receivable (Details) - Loans By Credit Quality Indicators (USD $)	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	$ 1,121,578,680	$ 1,103,441,058
Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	419,982,030	407,294,743
Commercial and Industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	12,464,206	11,355,713
Commercial and Industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	9,904,239	13,037,673
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	442,350,475	431,688,129
Owner-Occupied Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	250,623,915	250,028,731
Owner-Occupied Commercial Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	10,356,128	8,318,232
Owner-Occupied Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	8,503,481	2,868,949
Owner-Occupied Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	269,483,524	261,215,912
Commercial Construction, Land Development, and Other Land [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	50,250,005	51,868,919
Commercial Construction, Land Development, and Other Land [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating		1,588,086
Commercial Construction, Land Development, and Other Land [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	4,944,020	4,387,897
Commercial Construction, Land Development, and Other Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	55,194,025	57,844,902
Non-Owner Occupied Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	327,819,856	326,168,882
Non-Owner Occupied Commercial Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	1,765,205	3,310,017
Non-Owner Occupied Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	24,965,595	23,213,216
Non-Owner Occupied Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	354,550,656	352,692,115
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	1,048,675,806	1,035,361,275
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	24,585,539	24,572,048
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Internally assigned risk rating	$ 48,317,335	$ 43,507,735

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Note 6 - Fair Value (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

			Fair Value Measurements at Reporting Date Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2014:
Securities available for sale:
U.S. govt. sponsored agency securities	$	350,337,559	$	-	$	350,337,559	$	-
Residential mortgage-backed and related securities		158,119,401		-		158,119,401		-
Municipal securities		35,076,066		-		35,076,066		-
Other securities		1,944,511		317,137		1,627,374		-
	$	545,477,537	$	317,137	$	545,160,400	$	-
December 31, 2013:
Securities available for sale:
U.S. govt. sponsored agency securities	$	356,472,987	$	-	$	356,472,987	$	-
Residential mortgage-backed and related securities		157,429,451		-		157,429,451		-
Municipal securities		35,958,857		-		35,958,857		-
Other securities		1,897,163		317,698		1,579,465		-
	$	551,758,458	$	317,698	$	551,440,760	$	-

			Fair Value Measurements at Reporting Date Using
	Fair Value		Level 1		Level 2		Level 3
March 31, 2014:
Impaired loans/leases	$	7,524,198	$	-	$	-	$	7,524,198
Other real estate owned		10,448,606		-		-		10,448,606
	$	17,972,804	$	-	$	-	$	17,972,804
December 31, 2013:
Impaired loans/leases	$	9,009,557	$	-	$	-	$	9,009,557
Other real estate owned		10,507,377		-		-		10,507,377
	$	19,516,934	$	-	$	-	$	19,516,934

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Quantitave Information about Level Fair Value Measurments
	Fair Value		Valuation Technique	Unobservable Input	Range
March 31, 2014:
Impaired loans/leases	$	7,524,198	Appraisal of collateral	Appraisal adjustments	-10.00%	to	-50.00	%
Other real estate owned		10,448,606	Appraisal of collateral	Appraisal adjustments	0.00%	to	-35.00	%

	Quantitave Information about Level Fair Value Measurments
	Fair Value		Valuation Technique	Unobservable Input	Range
December 31, 2013:
Impaired loans/leases	$	9,009,557	Appraisal of collateral	Appraisal adjustments	-10.00%	to	-50.00	%
Other real estate owned		10,507,377	Appraisal of collateral	Appraisal adjustments	0.00%	to	-35.00	%

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Fair Value	As of March 31, 2014				As of December 31, 2013
	Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and due from banks	Level 1	$	55,444,302	$	55,444,302	$	41,950,790	$	41,950,790
Federal funds sold	Level 2		11,570,000		11,570,000		39,435,000		39,435,000
Interest-bearing deposits at financial institutions	Level 2		44,389,277		44,389,277		33,044,917		33,044,917
Investment securities:
Held to maturity	Level 3		161,629,152		157,617,860		145,451,895		138,640,105
Available for sale	See Previous Table		545,477,537		545,477,537		551,758,458		551,758,458
Loans/leases receivable, net	Level 3		6,966,850		7,524,198		8,342,182		9,009,557
Loans/leases receivable, net	Level 2		1,462,959,422		1,472,150,150		1,430,489,328		1,441,952,443
Deposits:
Nonmaturity deposits	Level 2		1,296,408,620		1,296,408,620		1,256,209,352		1,256,209,352
Time deposits	Level 2		375,485,023		376,596,000		390,781,891		391,923,000
Short-term borrowings	Level 2		165,569,112		165,569,112		149,292,967		149,292,967
Federal Home Loan Bank advances	Level 2		235,700,000		245,555,000		231,350,000		241,623,000
Other borrowings	Level 2		142,250,644		152,184,000		142,448,362		152,761,000
Junior subordinated debentures	Level 2		40,322,765		28,218,054		40,289,830		28,094,228

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Note 3 - Loans/Leases Receivable (Details) - Delinquency Status (USD $)	Mar. 31, 2014		Dec. 31, 2013
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	$ 1,121,578,680		$ 1,103,441,058
Finance Leases Portfolio Segment [Member] | Performing Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	138,672,682	[1]	128,006,984	[1]
Finance Leases Portfolio Segment [Member] | Nonperforming Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	1,321,377	[1]	894,458	[1]
Finance Leases Portfolio Segment [Member] | Delinquent Loans [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	139,994,059	[1]	128,901,442	[1]
Residential Portfolio Segment [Member] | Performing Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	147,106,609	[1]	145,345,719	[1]
Residential Portfolio Segment [Member] | Nonperforming Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	1,843,608	[1]	2,010,604	[1]
Residential Portfolio Segment [Member] | Delinquent Loans [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	148,950,217	[1]	147,356,323	[1]
Consumer Portfolio Segment [Member] | Performing Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	75,579,303	[1]	74,688,039	[1]
Consumer Portfolio Segment [Member] | Nonperforming Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	1,230,237	[1]	1,345,771	[1]
Consumer Portfolio Segment [Member] | Delinquent Loans [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	76,809,540	[1]	76,033,810	[1]
Performing Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	361,358,594	[1]	348,040,742	[1]
Nonperforming Financing Receivable [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	4,395,222	[1]	4,250,833	[1]
Delinquent Loans [Member]
Note 3 - Loans/Leases Receivable (Details) - Delinquency Status [Line Items]
Delinquent Loan Status	$ 365,753,816	[1]	$ 352,291,575	[1]

[1] 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, and accruing troubled debt restructurings.

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Note 2 - Investment Securities (Details) - Amortized Cost and Fair Value of Investment Securities (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Securities held to maturity:
Securities held to maturity, amortized cost	$ 161,629,152	$ 145,451,895
Securities held to maturity, gross unrealized gains	756,828	299,789
Securities held to maturity, gross unrealized losses	(4,768,120)	(7,111,579)
Securities held to maturity, fair value	157,617,860	138,640,105
Securities available for sale:
Available for Sale Securities, amortized cost	559,120,092	573,870,562
Available for Sale Securities, gross unrealized gains	2,971,800	2,643,218
Available for Sale Securities, gross unrealized losses	(16,614,355)	(24,755,322)
Available for Sale Securities, fair value	545,477,537	551,758,458
US States and Political Subdivisions Debt Securities [Member]
Securities held to maturity:
Securities held to maturity, amortized cost	160,579,152	144,401,895
Securities held to maturity, gross unrealized gains	756,828	299,789
Securities held to maturity, gross unrealized losses	(4,768,120)	(7,111,579)
Securities held to maturity, fair value	156,567,860	137,590,105
Securities available for sale:
Available for Sale Securities, amortized cost	34,495,776	35,813,866
Available for Sale Securities, gross unrealized gains	997,316	923,315
Available for Sale Securities, gross unrealized losses	(417,026)	(778,324)
Available for Sale Securities, fair value	35,076,066	35,958,857
Other Securities [Member]
Securities held to maturity:
Securities held to maturity, amortized cost	1,050,000	1,050,000
Securities held to maturity, gross unrealized gains	0	0
Securities held to maturity, gross unrealized losses	0	0
Securities held to maturity, fair value	1,050,000	1,050,000
Securities available for sale:
Available for Sale Securities, amortized cost	1,378,550	1,372,365
Available for Sale Securities, gross unrealized gains	565,961	524,798
Available for Sale Securities, gross unrealized losses	0	0
Available for Sale Securities, fair value	1,944,511	1,897,163
US Government Agencies Debt Securities [Member]
Securities available for sale:
Available for Sale Securities, amortized cost	363,901,863	376,574,132
Available for Sale Securities, gross unrealized gains	31,503	41,696
Available for Sale Securities, gross unrealized losses	(13,595,807)	(20,142,841)
Available for Sale Securities, fair value	350,337,559	356,472,987
Residential Mortgage Backed Securities [Member]
Securities available for sale:
Available for Sale Securities, amortized cost	159,343,903	160,110,199
Available for Sale Securities, gross unrealized gains	1,377,020	1,153,409
Available for Sale Securities, gross unrealized losses	(2,601,522)	(3,834,157)
Available for Sale Securities, fair value	$ 158,119,401	$ 157,429,451

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Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (Parentheticals)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Preferred Stock [Member] | Series F Noncumulative Perpetual Preferred Stock [Member]
Redemption, shares	15,000
Common Stock [Member]
Share issuance, Employee Stock Purchase Plan	6,189	5,884
Share issuance, stock options exercised	9,814	19,278
Share exchange in connection with restricted stock	10,300	16,798
Share exchange, stock options exercised		7,048
Series F Noncumulative Perpetual Preferred Stock [Member]
Redemption, shares	15,000

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Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Preferred stock, par value (in Dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	250,000	250,000
Preferred stock, shares issued	14,867	29,867
Preferred stock, shares outstanding	14,867	29,867
Common stock, par value (in Dollars per share)	$ 1	$ 1
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	8,038,608	8,005,708
Common stock, shares outstanding	7,917,362	7,884,462
Treasury Stock, shares	121,246	121,246

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Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

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, 2013, included in QCR Holdings, Inc.’s (the “Company”) Form 10-K filed with the Securities and Exchange Commission on March 10, 2014. 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 March 31, 2014, are not necessarily indicative of the results expected for the year ending December 31, 2014.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include three commercial banks: Quad City Bank & Trust Company (“QCBT”), Cedar Rapids Bank & Trust Company (“CRBT”), and Rockford Bank & Trust Company (“RB&T”). On May 13, 2013, the Company acquired Community National Bancorporation (“Community National”) and its banking subsidiary Community National Bank (“CNB”). The Company operated CNB as a separate banking charter from the acquisition date until October 26, 2013, when CNB’s charter was merged with and into CRBT. CNB“s merged branch offices operate as a division of CRBT under the name of “Community Bank & Trust”. QCBT, CRBT, and RB&T are all state-chartered commercial banks. The Company also engages in direct financing lease contracts through m2 Lease Funds, LLC (“m2 Lease Funds”), a wholly-owned subsidiary of QCBT. All material intercompany transactions and balances have been eliminated in consolidation.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting developments: In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Adoption did not have a significant impact on the Company’s consolidated financial statements.

In January 2014, FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The objective of ASU 2014-04 is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU 2014-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Management is in the process of evaluating the impact of ASU 2014-04 on the Company’s consolidated financial statements.

Reclassification, Policy [Policy Text Block]

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

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Document And Entity Information	3 Months Ended
	Mar. 31, 2014	May 01, 2014
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		7,917,652
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	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

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Note 2 - Investment Securities (Tables)

3 Months Ended

Mar. 31, 2014

Investment Holdings [Abstract]

Unrealized Gain (Loss) on Investments [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2014
Securities held to maturity:
Municipal securities	$	160,579,152	$	756,828	$	(4,768,120	)	$	156,567,860
Other securities		1,050,000		-		-			1,050,000
	$	161,629,152	$	756,828	$	(4,768,120	)	$	157,617,860
Securities available for sale:
U.S. govt. sponsored agency securities	$	363,901,863	$	31,503	$	(13,595,807	)	$	350,337,559
Residential mortgage-backed and related securities		159,343,903		1,377,020		(2,601,522	)		158,119,401
Municipal securities		34,495,776		997,316		(417,026	)		35,076,066
Other securities		1,378,550		565,961		-			1,944,511
	$	559,120,092	$	2,971,800	$	(16,614,355	)	$	545,477,537
December 31, 2013:
Securities held to maturity:
Municipal securities	$	144,401,895	$	299,789	$	(7,111,579	)	$	137,590,105
Other securities		1,050,000		-		-			1,050,000
	$	145,451,895	$	299,789	$	(7,111,579	)	$	138,640,105
Securities available for sale:
U.S. govt. sponsored agency securities	$	376,574,132	$	41,696	$	(20,142,841	)	$	356,472,987
Residential mortgage-backed and related securities		160,110,199		1,153,409		(3,834,157	)		157,429,451
Municipal securities		35,813,866		923,315		(778,324	)		35,958,857
Other securities		1,372,365		524,798		-			1,897,163
	$	573,870,562	$	2,643,218	$	(24,755,322	)	$	551,758,458

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months					12 Months or More					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
March 31, 2014:
Securities held to maturity:
Municipal securities	$	90,268,363	$	(3,972,217	)	$	11,141,166	$	(795,903	)	$	101,409,529	$	(4,768,120	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	330,406,007	$	(12,809,546	)	$	11,194,076	$	(786,261	)	$	341,600,083	$	(13,595,807	)
Residential mortgage-backed and related securities		74,273,019		(1,586,915	)		21,330,340		(1,014,607	)		95,603,359		(2,601,522	)
Municipal securities		12,715,294		(372,659	)		1,699,797		(44,367	)		14,415,091		(417,026	)
	$	417,394,320	$	(14,769,120	)	$	34,224,213	$	(1,845,235	)	$	451,618,533	$	(16,614,355	)
December 31, 2013:
Securities held to maturity:
Municipal securities	$	101,983,602	$	(6,711,240	)	$	2,697,375	$	(400,339	)	$	104,680,977	$	(7,111,579	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	333,194,820	$	(19,141,077	)	$	10,978,390	$	(1,001,764	)	$	344,173,210	$	(20,142,841	)
Residential mortgage-backed and related securities		94,723,092		(2,947,770	)		14,117,719		(886,387	)		108,840,811		(3,834,157	)
Municipal securities		13,890,692		(724,939	)		985,687		(53,385	)		14,876,379		(778,324	)
	$	441,808,604	$	(22,813,786	)	$	26,081,796	$	(1,941,536	)	$	467,890,400	$	(24,755,322	)

Realized Gain (Loss) on Investments [Table Text Block]

	Three Months Ended
	March 31, 2014		March 31, 2013
Proceeds from sales of securities	$	7,020,625	$	-
Pre-tax gross gains from sales of securities		20,625		-

Investments Classified by Contractual Maturity Date [Table Text Block]

	Amortized Cost		Fair Value
Securities held to maturity:
Due in one year or less	$	2,298,028	$	2,299,876
Due after one year through five years		10,898,311		10,876,493
Due after one year through five years		148,432,813		144,441,491
	$	161,629,152	$	157,617,860
Securities available for sale:
Due in one year or less	$	5,399,927	$	5,412,462
Due after one year through five years		51,172,655		50,810,680
Due after five years		341,825,057		329,190,483
	$	398,397,639	$	385,413,625
Residential mortgage-backed and related securities		159,343,903		158,119,401
Other securities		1,378,550		1,944,511
	$	559,120,092	$	545,477,537

	Amortized Cost		Fair Value
Securities held to maturity:
Municipal securities	$	107,791,951	$	104,916,513
Securities available for sale:
U.S. govt. sponsored agency securities		307,435,005		295,518,088
Municipal securities		22,063,064		22,190,224
	$	329,498,069	$	317,708,312

XML

Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Interest and dividend income:
Loans/leases, including fees	$ 16,775,590	$ 15,088,827
Securities:
Taxable	2,582,794	2,460,449
Nontaxable	1,454,056	802,473
Interest-bearing deposits at financial institutions	90,527	59,754
Restricted investment securities	128,925	125,105
Federal funds sold	3,319	874
Total interest and dividend income	21,035,211	18,537,482
Interest expense:
Deposits	1,101,593	1,116,791
Short-term borrowings	51,696	64,267
Federal Home Loan Bank advances	1,555,976	1,732,812
Other borrowings	1,171,531	1,190,755
Junior subordinated debentures	305,174	241,540
Total interest expense	4,185,970	4,346,165
Net interest income	16,849,241	14,191,317
Provision for loan/lease losses	1,094,162	1,057,782
Net interest income after provision for loan/lease losses	15,755,079	13,133,535
Noninterest income:
Trust department fees	1,500,342	1,039,670
Investment advisory and management fees	648,992	609,341
Deposit service fees	1,045,885	907,823
Gains on sales of residential real estate loans	63,487	291,151
Gains on sales government guaranteed portions of loans	194,019	845,224
Securities gains	20,625
Earnings on bank-owned life insurance	454,164	438,687
Losses on other real estate owned, net	(18,048)	(446,630)
Other	837,375	1,518,763
Total noninterest income	4,746,841	5,204,029
Noninterest expense:
Salaries and employee benefits	10,017,918	8,742,683
Occupancy and equipment expense	1,894,288	1,428,870
Professional and data processing fees	1,584,406	1,140,061
FDIC and other insurance	714,750	555,911
Loan/lease expense	345,636	245,091
Advertising and marketing	337,587	264,568
Postage and telephone	290,675	218,691
Stationery and supplies	151,751	110,670
Bank service charges	298,032	275,495
Acquisition and data conversion costs		356,578
Other	505,377	619,882
Total noninterest expense	16,140,420	13,958,500
Net income before income taxes	4,361,500	4,379,064
Federal and state income tax expense	472,285	1,113,920
Net income	3,889,215	3,265,144
Less: Preferred stock dividends	708,008	810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$ 3,181,207	$ 2,454,307
Earnings per common share attributable to QCR Holdings, Inc. common shareholders
Basic (in Dollars per share)	$ 0.40	$ 0.50
Diluted (in Dollars per share)	$ 0.40	$ 0.49
Weighted average common shares outstanding (in Shares)	7,901,035	4,927,591
Weighted average common and common equivalent shares outstanding (in Shares)	8,030,043	5,034,342

XML

Note 3 - Loans/Leases Receivable

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Financing Receivables [Text Block]

NOTE 3 – LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of March 31, 2014 and December 31, 2013 is presented as follows:

	As of March 31, 2014			As of December 31, 2013
Commercial and industrial loans	$	442,350,475		$	431,688,129
Commercial real estate loans
Owner-occupied commercial real estate		269,483,524			261,215,912
Commercial construction, land development, and other land		55,194,025			57,844,902
Other non owner-occupied commercial real estate		354,550,656			352,692,115
		679,228,205			671,752,929
Direct financing leases *		139,994,059			128,901,442
Residential real estate loans **		148,950,217			147,356,323
Installment and other consumer loans		76,809,540			76,033,810
		1,487,332,496			1,455,732,633
Plus deferred loan/lease origination costs, net of fees		5,247,046			4,546,925
		1,492,579,542			1,460,279,558
Less allowance for estimated losses on loans/leases		(22,653,270	)		(21,448,048	)
	$	1,469,926,272		$	1,438,831,510
* Direct financing leases:
Net minimum lease payments to be received	$	158,423,507		$	145,662,254
Estimated unguaranteed residual values of leased assets		1,611,999			1,694,499
Unearned lease/residual income		(20,041,447	)		(18,455,311	)
		139,994,059			128,901,442
Plus deferred lease origination costs, net of fees		5,347,779			4,814,183
		145,341,838			133,715,625
Less allowance for estimated losses on leases		(2,820,239	)		(2,517,217	)
	$	142,521,599		$	131,198,408

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. There were no losses related to residual values for the three months ended March 31, 2014 and 2013.

**Includes residential real estate loans held for sale totaling $291,600 and $1,358,290 as of March 31, 2014, and December 31, 2013, respectively.

The aging of the loan/lease portfolio by classes of loans/leases as of March 31, 2014 and December 31, 2013 is presented as follows:

	As of March 31, 2014
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	$	440,037,552		$	679,842		$	82,110		$	4,838		$	1,546,133		$	442,350,475
Commercial Real Estate
Owner-Occupied Commercial Real Estate		268,087,219			217,205			101,723			-			1,077,377			269,483,524
Commercial Construction, Land Development, and Other Land		53,069,537			943,219			-			-			1,181,269			55,194,025
Other Non Owner-Occupied Commercial Real Estate		342,951,740			246,141			1,104,646			-			10,248,129			354,550,656
Direct Financing Leases		136,956,753			1,684,403			120,969			735			1,231,199			139,994,059
Residential Real Estate		145,891,697			1,562,455			-			-			1,496,065			148,950,217
Installment and Other Consumer		75,402,962			429,310			104,031			2			873,235			76,809,540
	$	1,462,397,460		$	5,762,575		$	1,513,479		$	5,575		$	17,653,407		$	1,487,332,496
As a percentage of total loan/lease portfolio		98.32	%		0.39	%		0.10	%		0.00	%		1.19	%		100.00	%

	As of December 31, 2013
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	$	429,557,699		$	199,949		$	185,500		$	-		$	1,744,981		$	431,688,129
Commercial Real Estate
Owner-Occupied Commercial Real Estate		258,557,660			465,418			993,163			60,286			1,139,385			261,215,912
Commercial Construction, Land Development, and Other Land		56,301,186			358,626			-			-			1,185,090			57,844,902
Other Non Owner-Occupied Commercial Real Estate		341,743,730			476,877			151,017			-			10,320,491			352,692,115
Direct Financing Leases		126,878,515			714,464			414,005			-			894,458			128,901,442
Residential Real Estate		142,353,936			3,088,516			275,262			20,126			1,618,483			147,356,323
Installment and Other Consumer		74,811,489			127,082			116,468			3,762			975,009			76,033,810
	$	1,430,204,215		$	5,430,932		$	2,135,415		$	84,174		$	17,877,897		$	1,455,732,633
As a percentage of total loan/lease portfolio		98.25	%		0.37	%		0.15	%		0.01	%		1.23	%		100.00	%

Nonperforming loans/leases by classes of loans/leases as of March 31, 2014 and December 31, 2013 are presented as follows:

	As of March 31, 2014
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	$	4,838	$	1,546,133	$	179,695	$	1,730,666		9.29	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		1,077,377		-		1,077,377		5.78	%
Commercial Construction, Land Development, and Other Land		-		1,181,269		-		1,181,269		6.34	%
Other Non Owner-Occupied Commercial Real Estate		-		10,248,129		-		10,248,129		55.00	%
Direct Financing Leases		735		1,231,199		89,443		1,321,377		7.09	%
Residential Real Estate		-		1,496,065		347,543		1,843,608		9.89	%
Installment and Other Consumer		2		873,235		357,000		1,230,237		6.60	%
	$	5,575	$	17,653,407	$	973,681	$	18,632,663		100.00	%

*Nonaccrual loans/leases includes $10,666,735 of troubled debt restructurings, including $75,371 in commercial and industrial loans, $9,862,220 in commercial real estate loans, $70,144 in direct financing leases, $449,525 in residential real estate loans, and $209,475 in installment loans.

	As of December 31, 2013
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	$	-	$	1,744,981	$	878,381	$	2,623,362		12.81	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		60,286		1,139,385		-		1,199,671		5.86	%
Commercial Construction, Land Development, and Other Land		-		1,185,090		-		1,185,090		5.79	%
Other Non Owner-Occupied Commercial Real Estate		-		10,320,491		905,205		11,225,696		54.80	%
Direct Financing Leases		-		894,458		-		894,458		4.37	%
Residential Real Estate		20,126		1,618,483		371,995		2,010,604		9.82	%
Installment and Other Consumer		3,762		975,009		367,000		1,345,771		6.57	%
	$	84,174	$	17,877,897	$	2,522,581	$	20,484,652		100.00	%

**Nonaccrual loans/leases includes $10,890,785 of troubled debt restructurings, including $77,072 in commercial and industrial loans, $10,077,501 in commercial real estate loans, $446,996 in residential real estate loans, and $289,216 in installment loans.

Changes in the allowance for estimated losses on loans/leases by portfolio segment for the three months ended March 31, 2014 and 2013, respectively, are presented as follows:

	Three Months Ended March 31, 2014
	Commercial and Industrial			Commercial Real Estate			Direct Financing  Leases			Residential Real  Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,648,774		$	10,705,434		$	2,517,217		$	1,395,849		$	1,180,774		$	21,448,048
Provisions (credits) charged to expense		976,790			(229,985	)		352,647			(4,355	)		(935	)		1,094,162
Loans/leases charged off		(4,023	)		(4,098	)		(65,733	)		(2,712	)		(2,755	)		(79,321	)
Recoveries on loans/leases previously charged off		26,117			116,306			16,108			103			31,747			190,381
Balance, ending	$	6,647,658		$	10,587,657		$	2,820,239		$	1,388,885		$	1,208,831		$	22,653,270

	Three Months Ended March 31, 2013
	Commercial and  Industrial			Commercial  Real Estate		Direct Financing  Leases			Residential Real  Estate			Installment and Other Consumer			Total
Balance, beginning	$	4,531,545		$	11,069,502	$	1,990,395		$	1,070,328		$	1,263,434		$	19,925,204
Provisions (credits) charged to expense		(87,807	)		1,114,294		378,623			8,899			(356,227	)		1,057,782
Loans/leases charged off		(215	)		-		(73,049	)		(112,891	)		(116,612	)		(302,767	)
Recoveries on loans/leases previously charged off		22,741			5,157		554			-			60,791			89,243
Balance, ending	$	4,466,264		$	12,188,953	$	2,296,523		$	966,336		$	851,386		$	20,769,462

The allowance for estimated losses on loans/leases by impairment evaluation and by portfolio segment as of March 31, 2014 and December 31, 2013 is presented as follows:

	As of March 31, 2014
	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	$	732,427		$	2,712,472		$	298,303		$	224,972		$	396,897		$	4,365,071
Allowance for loans/leases collectively evaluated for impairment		5,915,231			7,875,185			2,521,936			1,163,913			811,934			18,288,199
	$	6,647,658		$	10,587,657		$	2,820,239		$	1,388,885		$	1,208,831		$	22,653,270
Loans/leases individually evaluated for impairment	$	1,400,758		$	12,076,304		$	1,320,642		$	1,843,608		$	1,230,235		$	17,871,547
Loans/leases collectively evaluated for impairment		440,949,717			667,151,901			138,673,417			147,106,609			75,579,305			1,469,460,949
	$	442,350,475		$	679,228,205		$	139,994,059		$	148,950,217		$	76,809,540		$	1,487,332,496
Allowance as a percentage of loans/leases individually evaluated for impairment		52.29	%		22.46	%		22.59	%		12.20	%		32.26	%		24.42	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.34	%		1.18	%		1.82	%		0.79	%		1.07	%		1.24	%
		1.50	%		1.56	%		2.01	%		0.93	%		1.57	%		1.52	%

	As of December 31, 2013
	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	$	927,453		$	3,174,704		$	192,847		$	246,266		$	467,552		$	5,008,822
Allowance for loans/leases collectively evaluated for impairment		4,721,321			7,530,730			2,324,370			1,149,583			713,222			16,439,226
	$	5,648,774		$	10,705,434		$	2,517,217		$	1,395,849		$	1,180,774		$	21,448,048
Loans/leases individually evaluated for impairment	$	1,761,850		$	12,956,915		$	894,458		$	2,116,747		$	1,350,450		$	19,080,420
Loans/leases collectively evaluated for impairment		429,926,279			658,796,014			128,006,984			145,239,576			74,683,360			1,436,652,213
	$	431,688,129		$	671,752,929		$	128,901,442		$	147,356,323		$	76,033,810		$	1,455,732,633
Allowance as a percentage of loans/leases individually evaluated for impairment		52.64	%		24.50	%		21.56	%		11.63	%		34.62	%		26.25	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.10	%		1.14	%		1.82	%		0.79	%		0.95	%		1.14	%
		1.31	%		1.59	%		1.95	%		0.95	%		1.55	%		1.47	%

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.

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended March 31, 2014 are presented 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	$	441,945	$	517,833	$	-	$	482,151	$	1,888	$	1,888
Commercial Real Estate
Owner-Occupied Commercial Real Estate		389,876		389,876		-		436,412		-		-
Commercial Construction, Land Development, and Other Land		2,124,350		2,247,550		-		2,127,392		-		-
Other Non Owner-Occupied Commercial Real Estate		1,983,846		1,983,846		-		2,376,752		13,283		13,283
Direct Financing Leases		619,800		619,800		-		586,567		-		-
Residential Real Estate		977,436		977,436		-		1,222,955		1,455		1,455
Installment and Other Consumer		833,338		833,338		-		897,665		890		890
	$	7,370,591	$	7,569,679	$	-	$	8,129,894	$	17,516	$	17,516
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	958,813	$	1,449,488	$	732,427	$	910,410	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		224,892		224,892		117,555		112,438		-		-
Commercial Construction, Land Development, and Other Land		685,292		796,492		477,293		685,834		-		-
Other Non Owner-Occupied Commercial Real Estate		6,668,048		7,373,330		2,117,624		6,682,038		-		-
Direct Financing Leases		700,842		700,842		298,303		467,524		-		-
Residential Real Estate		866,172		866,172		224,972		793,141		774		774
Installment and Other Consumer		396,897		396,897		396,897		397,897		-		-
	$	10,500,956	$	11,808,113	$	4,365,071	$	10,049,282	$	774	$	774
Total Impaired Loans/Leases:
Commercial and Industrial	$	1,400,758	$	1,967,321	$	732,427	$	1,392,561	$	1,888	$	1,888
Commercial Real Estate
Owner-Occupied Commercial Real Estate		614,768		614,768		117,555		548,850		-		-
Commercial Construction, Land Development, and Other Land		2,809,642		3,044,042		477,293		2,813,226		-		-
Other Non Owner-Occupied Commercial Real Estate		8,651,894		9,357,176		2,117,624		9,058,790		13,283		13,283
Direct Financing Leases		1,320,642		1,320,642		298,303		1,054,091		-		-
Residential Real Estate		1,843,608		1,843,608		224,972		2,016,096		2,229		2,229
Installment and Other Consumer		1,230,235		1,230,235		396,897		1,295,562		890		890
	$	17,871,547	$	19,377,792	$	4,365,071	$	18,179,176	$	18,290	$	18,290

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

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended March 31, 2013 are presented 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	$	402,621	$	775,004	$	-	$	767,929	$	1,924	$	1,924
Commercial Real Estate
Owner-Occupied Commercial Real Estate		498,946		498,946		-		507,451		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		47,958		47,958		-		3,198,617		40,116		40,116
Direct Financing Leases		789,346		789,346		-		831,677		-		-
Residential Real Estate		630,324		630,324		-		810,583		-		-
Installment and Other Consumer		196,615		196,615		-		187,590		2,093		2,093
	$	2,565,810	$	2,938,193	$	-	$	6,303,847	$	44,133	$	44,133
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	211,400	$	264,334	$	498,260	$	216,133	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		3,929,839		3,929,839		1,154,155		3,933,530		2,703		2,703
Other Non Owner-Occupied Commercial Real Estate		9,983,944		10,236,903		2,353,684		10,046,487		4,501		4,501
Direct Financing Leases		421,590		421,590		325,294		273,192		-		-
Residential Real Estate		305,612		305,612		95,232		308,841		-		-
Installment and Other Consumer		927,467		927,467		117,131		629,810		333		333
	$	15,779,852	$	16,085,745	$	4,543,756	$	15,407,993	$	7,537	$	7,537
Total Impaired Loans/Leases:
Commercial and Industrial	$	614,021	$	1,039,338	$	498,260	$	984,062	$	1,924	$	1,924
Commercial Real Estate
Owner-Occupied Commercial Real Estate		498,946		498,946		-		507,451		-		-
Commercial Construction, Land Development, and Other Land		3,929,839		3,929,839		1,154,155		3,933,530		2,703		2,703
Other Non Owner-Occupied Commercial Real Estate		10,031,902		10,284,861		2,353,684		13,245,104		44,617		44,617
Direct Financing Leases		1,210,936		1,210,936		325,294		1,104,869		-		-
Residential Real Estate		935,936		935,936		95,232		1,119,424		-		-
Installment and Other Consumer		1,124,082		1,124,082		117,131		817,400		2,426		2,426
	$	18,345,662	$	19,023,938	$	4,543,756	$	21,711,840	$	51,670	$	51,670

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

Loans/leases, by classes of financing receivable, considered to be impaired as of December 31, 2013 are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid  Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	492,622	$	568,951	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		392,542		392,542		-
Commercial Construction, Land Development, and Other Land		1,943,168		2,054,368		-
Other Non Owner-Occupied Commercial Real Estate		1,790,279		1,902,279		-
Direct Financing Leases		557,469		557,469		-
Residential Real Estate		1,071,927		1,071,927		-
Installment and Other Consumer		509,667		509,667		-
	$	6,757,674	$	7,057,203	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	1,269,228	$	1,956,755	$	927,453
Commercial Real Estate
Owner-Occupied Commercial Real Estate		159,247		159,247		67,498
Commercial Construction, Land Development, and Other Land		888,547		1,011,747		503,825
Other Non Owner-Occupied Commercial Real Estate		7,783,132		8,488,414		2,603,381
Direct Financing Leases		336,989		336,989		192,847
Residential Real Estate		1,044,820		1,044,820		246,266
Installment and Other Consumer		840,783		840,783		467,552
	$	12,322,746	$	13,838,755	$	5,008,822
Total Impaired Loans/Leases:
Commercial and Industrial	$	1,761,850	$	2,525,706	$	927,453
Commercial Real Estate
Owner-Occupied Commercial Real Estate		551,789		551,789		67,498
Commercial Construction, Land Development, and Other Land		2,831,715		3,066,115		503,825
Other Non Owner-Occupied Commercial Real Estate		9,573,411		10,390,693		2,603,381
Direct Financing Leases		894,458		894,458		192,847
Residential Real Estate		2,116,747		2,116,747		246,266
Installment and Other Consumer		1,350,450		1,350,450		467,552
	$	19,080,420	$	20,895,958	$	5,008,822

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

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.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of March 31, 2014 and December 31, 2013:

	As of March 31, 2014
			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)	$	419,982,030	$	250,623,915	$	50,250,005	$	327,819,856	$	1,048,675,806
Special Mention (Rating 6)		12,464,206		10,356,128		-		1,765,205		24,585,539
Substandard (Rating 7)		9,904,239		8,503,481		4,944,020		24,965,595		48,317,335
Doubtful (Rating 8)		-		-		-		-		-
	$	442,350,475	$	269,483,524	$	55,194,025	$	354,550,656	$	1,121,578,680

	As of March 31, 2014
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and  Other Consumer		Total
Performing	$	138,672,682	$	147,106,609	$	75,579,303	$	361,358,594
Nonperforming		1,321,377		1,843,608		1,230,237		4,395,222
	$	139,994,059	$	148,950,217	$	76,809,540	$	365,753,816

	As of December 31, 2013
			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)	$	407,294,743	$	250,028,731	$	51,868,919	$	326,168,882	$	1,035,361,275
Special Mention (Rating 6)		11,355,713		8,318,232		1,588,086		3,310,017		24,572,048
Substandard (Rating 7)		13,037,673		2,868,949		4,387,897		23,213,216		43,507,735
Doubtful (Rating 8)		-		-		-		-		-
	$	431,688,129	$	261,215,912	$	57,844,902	$	352,692,115	$	1,103,441,058

	As of December 31, 2013
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	128,006,984	$	145,345,719	$	74,688,039	$	348,040,742
Nonperforming		894,458		2,010,604		1,345,771		4,250,833
	$	128,901,442	$	147,356,323	$	76,033,810	$	352,291,575

*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, and accruing troubled debt restructurings.

As of March 31, 2014 and December 31, 2013, troubled debt restructurings totaled $11,640,416 and $13,413,366, respectively.

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 months ended March 31, 2014 and 2013. The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of the restructuring.

	For the three months ended March 31, 2014								For the three months ended March 31, 2013
Classes of Loans/Leases	Number of Loans / Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance		Number of  Loans /  Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance
CONCESSION - Significant payment delay
Owner-Occupied Commercial Real Estate		-	$	-	$	-	$	-		1	$	47,958	$	47,958	$	-
Direct Financing Leases		1	$	89,443	$	89,443	$	-		-	$	-	$	-	$	-
		1	$	89,443	$	89,443	$	-		1	$	47,958	$	47,958	$	-
CONCESSION - Extension of maturity
Commercial and Industrial		-	$	-	$	-	$	-		3	$	809,494	$	809,494	$	188,700
Direct Financing Leases		1	$	70,144	$	70,144	$	24,246		-	$	-	$	-	$	-
		1	$	70,144	$	70,144	$	24,246		3	$	809,494	$	809,494	$	188,700
TOTAL		2	$	159,587	$	159,587	$	24,246		4	$	857,452	$	857,452	$	188,700

Of the troubled debt restructurings reported above, one with a post-modification recorded investment totaling $70,144 was on nonaccrual as of March 31, 2014, and two with post-modification recorded investments totaling $80,426 were on nonaccrual as of March 31, 2013.

For the three months ended March 31, 2014 and 2013, none of the Company’s troubled debt restructurings had 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 2 - Investment Securities

3 Months Ended

Mar. 31, 2014

Investment Holdings [Abstract]

Investment Holdings [Text Block]

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of March 31, 2014 and December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2014
Securities held to maturity:
Municipal securities	$	160,579,152	$	756,828	$	(4,768,120	)	$	156,567,860
Other securities		1,050,000		-		-			1,050,000
	$	161,629,152	$	756,828	$	(4,768,120	)	$	157,617,860
Securities available for sale:
U.S. govt. sponsored agency securities	$	363,901,863	$	31,503	$	(13,595,807	)	$	350,337,559
Residential mortgage-backed and related securities		159,343,903		1,377,020		(2,601,522	)		158,119,401
Municipal securities		34,495,776		997,316		(417,026	)		35,076,066
Other securities		1,378,550		565,961		-			1,944,511
	$	559,120,092	$	2,971,800	$	(16,614,355	)	$	545,477,537
December 31, 2013:
Securities held to maturity:
Municipal securities	$	144,401,895	$	299,789	$	(7,111,579	)	$	137,590,105
Other securities		1,050,000		-		-			1,050,000
	$	145,451,895	$	299,789	$	(7,111,579	)	$	138,640,105
Securities available for sale:
U.S. govt. sponsored agency securities	$	376,574,132	$	41,696	$	(20,142,841	)	$	356,472,987
Residential mortgage-backed and related securities		160,110,199		1,153,409		(3,834,157	)		157,429,451
Municipal securities		35,813,866		923,315		(778,324	)		35,958,857
Other securities		1,372,365		524,798		-			1,897,163
	$	573,870,562	$	2,643,218	$	(24,755,322	)	$	551,758,458

The Company’s held to maturity municipal securities consist largely of private issues of municipal debt. The municipalities are located within the Midwest with a portion in or adjacent to the communities of QCBT and CRBT. The municipal debt investments are underwritten using specific guidelines with ongoing monitoring.

The Company’s residential mortgage-backed and related securities portfolio consists entirely of government sponsored or government guaranteed securities. The Company has not invested in commercial mortgage-backed securities or pooled trust preferred securities.

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 March 31, 2014 and December 31, 2013, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
March 31, 2014:
Securities held to maturity:
Municipal securities	$	90,268,363	$	(3,972,217	)	$	11,141,166	$	(795,903	)	$	101,409,529	$	(4,768,120	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	330,406,007	$	(12,809,546	)	$	11,194,076	$	(786,261	)	$	341,600,083	$	(13,595,807	)
Residential mortgage-backed and related securities		74,273,019		(1,586,915	)		21,330,340		(1,014,607	)		95,603,359		(2,601,522	)
Municipal securities		12,715,294		(372,659	)		1,699,797		(44,367	)		14,415,091		(417,026	)
	$	417,394,320	$	(14,769,120	)	$	34,224,213	$	(1,845,235	)	$	451,618,533	$	(16,614,355	)
December 31, 2013:
Securities held to maturity:
Municipal securities	$	101,983,602	$	(6,711,240	)	$	2,697,375	$	(400,339	)	$	104,680,977	$	(7,111,579	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	333,194,820	$	(19,141,077	)	$	10,978,390	$	(1,001,764	)	$	344,173,210	$	(20,142,841	)
Residential mortgage-backed and related securities		94,723,092		(2,947,770	)		14,117,719		(886,387	)		108,840,811		(3,834,157	)
Municipal securities		13,890,692		(724,939	)		985,687		(53,385	)		14,876,379		(778,324	)
	$	441,808,604	$	(22,813,786	)	$	26,081,796	$	(1,941,536	)	$	467,890,400	$	(24,755,322	)

At March 31, 2014, the investment portfolio included 539 securities. Of this number, 323 securities had current unrealized losses with aggregate depreciation of less than 4% from the total amortized cost basis. Of these, 38 securities had an unrealized loss 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 March 31, 2014 and December 31, 2013, equity securities represented less than 1% of the total portfolio.

The Company did not recognize other-than-temporary impairment on any debt or equity securities for the three months ended March 31, 2014 and 2013.

All sales of securities for the three months ended March 31, 2014 and 2013, respectively, were from securities identified as available-for-sale. Information on proceeds received, as well as pre-tax gross gains from sales on those securities is as follows:

	Three Months Ended
	March 31, 2014		March 31, 2013
Proceeds from sales of securities	$	7,020,625	$	-
Pre-tax gross gains from sales of securities		20,625		-

The amortized cost and fair value of securities as of March 31, 2014 by contractual maturity are shown below. Expected maturities of residential mortgage-backed and related securities may differ from contractual maturities because the residential mortgages underlying the residential mortgage-backed and related 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” available for sale are excluded from the maturity categories as there is no fixed maturity date for those securities.

	Amortized Cost		Fair Value
Securities held to maturity:
Due in one year or less	$	2,298,028	$	2,299,876
Due after one year through five years		10,898,311		10,876,493
Due after one year through five years		148,432,813		144,441,491
	$	161,629,152	$	157,617,860
Securities available for sale:
Due in one year or less	$	5,399,927	$	5,412,462
Due after one year through five years		51,172,655		50,810,680
Due after five years		341,825,057		329,190,483
	$	398,397,639	$	385,413,625
Residential mortgage-backed and related securities		159,343,903		158,119,401
Other securities		1,378,550		1,944,511
	$	559,120,092	$	545,477,537

Portions of the U.S. government sponsored agency securities and municipal securities contain call options, at the discretion of the issuer, to terminate the security at par and at predetermined dates prior to the stated maturity, summarized as follows:

	Amortized Cost		Fair Value
Securities held to maturity:
Municipal securities	$	107,791,951	$	104,916,513
Securities available for sale:
U.S. govt. sponsored agency securities		307,435,005		295,518,088
Municipal securities		22,063,064		22,190,224
	$	329,498,069	$	317,708,312

XML

Note 2 - Investment Securities (Details) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Note 2 - Investment Securities (Details) [Line Items]
Number of Securities	539
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	323
Aggregate Depreciation From Amortized Cost Basis, Percent	4.00%
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	38
Equity Securities [Member]
Note 2 - Investment Securities (Details) [Line Items]
Percentage of Investment Portfolio	1.00%		1.00%
Other than Temporary Impairment Losses, Investments (in Dollars)		$ 0
Debt Securities [Member]
Note 2 - Investment Securities (Details) [Line Items]
Other than Temporary Impairment Losses, Investments (in Dollars)	$ 0	$ 0

XML

Note 3 - Loans/Leases Receivable (Tables)

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	As of March 31, 2014			As of December 31, 2013
Commercial and industrial loans	$	442,350,475		$	431,688,129
Commercial real estate loans
Owner-occupied commercial real estate		269,483,524			261,215,912
Commercial construction, land development, and other land		55,194,025			57,844,902
Other non owner-occupied commercial real estate		354,550,656			352,692,115
		679,228,205			671,752,929
Direct financing leases *		139,994,059			128,901,442
Residential real estate loans **		148,950,217			147,356,323
Installment and other consumer loans		76,809,540			76,033,810
		1,487,332,496			1,455,732,633
Plus deferred loan/lease origination costs, net of fees		5,247,046			4,546,925
		1,492,579,542			1,460,279,558
Less allowance for estimated losses on loans/leases		(22,653,270	)		(21,448,048	)
	$	1,469,926,272		$	1,438,831,510
* Direct financing leases:
Net minimum lease payments to be received	$	158,423,507		$	145,662,254
Estimated unguaranteed residual values of leased assets		1,611,999			1,694,499
Unearned lease/residual income		(20,041,447	)		(18,455,311	)
		139,994,059			128,901,442
Plus deferred lease origination costs, net of fees		5,347,779			4,814,183
		145,341,838			133,715,625
Less allowance for estimated losses on leases		(2,820,239	)		(2,517,217	)
	$	142,521,599		$	131,198,408

Past Due Financing Receivables [Table Text Block]

	As of March 31, 2014
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	$	440,037,552		$	679,842		$	82,110		$	4,838		$	1,546,133		$	442,350,475
Commercial Real Estate
Owner-Occupied Commercial Real Estate		268,087,219			217,205			101,723			-			1,077,377			269,483,524
Commercial Construction, Land Development, and Other Land		53,069,537			943,219			-			-			1,181,269			55,194,025
Other Non Owner-Occupied Commercial Real Estate		342,951,740			246,141			1,104,646			-			10,248,129			354,550,656
Direct Financing Leases		136,956,753			1,684,403			120,969			735			1,231,199			139,994,059
Residential Real Estate		145,891,697			1,562,455			-			-			1,496,065			148,950,217
Installment and Other Consumer		75,402,962			429,310			104,031			2			873,235			76,809,540
	$	1,462,397,460		$	5,762,575		$	1,513,479		$	5,575		$	17,653,407		$	1,487,332,496
As a percentage of total loan/lease portfolio		98.32	%		0.39	%		0.10	%		0.00	%		1.19	%		100.00	%

	As of December 31, 2013
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	$	429,557,699		$	199,949		$	185,500		$	-		$	1,744,981		$	431,688,129
Commercial Real Estate
Owner-Occupied Commercial Real Estate		258,557,660			465,418			993,163			60,286			1,139,385			261,215,912
Commercial Construction, Land Development, and Other Land		56,301,186			358,626			-			-			1,185,090			57,844,902
Other Non Owner-Occupied Commercial Real Estate		341,743,730			476,877			151,017			-			10,320,491			352,692,115
Direct Financing Leases		126,878,515			714,464			414,005			-			894,458			128,901,442
Residential Real Estate		142,353,936			3,088,516			275,262			20,126			1,618,483			147,356,323
Installment and Other Consumer		74,811,489			127,082			116,468			3,762			975,009			76,033,810
	$	1,430,204,215		$	5,430,932		$	2,135,415		$	84,174		$	17,877,897		$	1,455,732,633
As a percentage of total loan/lease portfolio		98.25	%		0.37	%		0.15	%		0.01	%		1.23	%		100.00	%

Schedule of Nonperforming Loans Leases [Table Text Block]

	As of March 31, 2014
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	$	4,838	$	1,546,133	$	179,695	$	1,730,666		9.29	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		1,077,377		-		1,077,377		5.78	%
Commercial Construction, Land Development, and Other Land		-		1,181,269		-		1,181,269		6.34	%
Other Non Owner-Occupied Commercial Real Estate		-		10,248,129		-		10,248,129		55.00	%
Direct Financing Leases		735		1,231,199		89,443		1,321,377		7.09	%
Residential Real Estate		-		1,496,065		347,543		1,843,608		9.89	%
Installment and Other Consumer		2		873,235		357,000		1,230,237		6.60	%
	$	5,575	$	17,653,407	$	973,681	$	18,632,663		100.00	%

	As of December 31, 2013
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	$	-	$	1,744,981	$	878,381	$	2,623,362		12.81	%
Commercial Real Estate
Owner-Occupied Commercial Real Estate		60,286		1,139,385		-		1,199,671		5.86	%
Commercial Construction, Land Development, and Other Land		-		1,185,090		-		1,185,090		5.79	%
Other Non Owner-Occupied Commercial Real Estate		-		10,320,491		905,205		11,225,696		54.80	%
Direct Financing Leases		-		894,458		-		894,458		4.37	%
Residential Real Estate		20,126		1,618,483		371,995		2,010,604		9.82	%
Installment and Other Consumer		3,762		975,009		367,000		1,345,771		6.57	%
	$	84,174	$	17,877,897	$	2,522,581	$	20,484,652		100.00	%

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	Three Months Ended March 31, 2014
	Commercial and Industrial			Commercial Real Estate			Direct Financing  Leases			Residential Real  Estate			Installment and Other Consumer			Total
Balance, beginning	$	5,648,774		$	10,705,434		$	2,517,217		$	1,395,849		$	1,180,774		$	21,448,048
Provisions (credits) charged to expense		976,790			(229,985	)		352,647			(4,355	)		(935	)		1,094,162
Loans/leases charged off		(4,023	)		(4,098	)		(65,733	)		(2,712	)		(2,755	)		(79,321	)
Recoveries on loans/leases previously charged off		26,117			116,306			16,108			103			31,747			190,381
Balance, ending	$	6,647,658		$	10,587,657		$	2,820,239		$	1,388,885		$	1,208,831		$	22,653,270

	Three Months Ended March 31, 2013
	Commercial and  Industrial			Commercial  Real Estate		Direct Financing  Leases			Residential Real  Estate			Installment and Other Consumer			Total
Balance, beginning	$	4,531,545		$	11,069,502	$	1,990,395		$	1,070,328		$	1,263,434		$	19,925,204
Provisions (credits) charged to expense		(87,807	)		1,114,294		378,623			8,899			(356,227	)		1,057,782
Loans/leases charged off		(215	)		-		(73,049	)		(112,891	)		(116,612	)		(302,767	)
Recoveries on loans/leases previously charged off		22,741			5,157		554			-			60,791			89,243
Balance, ending	$	4,466,264		$	12,188,953	$	2,296,523		$	966,336		$	851,386		$	20,769,462

	As of March 31, 2014
	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	$	732,427		$	2,712,472		$	298,303		$	224,972		$	396,897		$	4,365,071
Allowance for loans/leases collectively evaluated for impairment		5,915,231			7,875,185			2,521,936			1,163,913			811,934			18,288,199
	$	6,647,658		$	10,587,657		$	2,820,239		$	1,388,885		$	1,208,831		$	22,653,270
Loans/leases individually evaluated for impairment	$	1,400,758		$	12,076,304		$	1,320,642		$	1,843,608		$	1,230,235		$	17,871,547
Loans/leases collectively evaluated for impairment		440,949,717			667,151,901			138,673,417			147,106,609			75,579,305			1,469,460,949
	$	442,350,475		$	679,228,205		$	139,994,059		$	148,950,217		$	76,809,540		$	1,487,332,496
Allowance as a percentage of loans/leases individually evaluated for impairment		52.29	%		22.46	%		22.59	%		12.20	%		32.26	%		24.42	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.34	%		1.18	%		1.82	%		0.79	%		1.07	%		1.24	%
		1.50	%		1.56	%		2.01	%		0.93	%		1.57	%		1.52	%

	As of December 31, 2013
	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	$	927,453		$	3,174,704		$	192,847		$	246,266		$	467,552		$	5,008,822
Allowance for loans/leases collectively evaluated for impairment		4,721,321			7,530,730			2,324,370			1,149,583			713,222			16,439,226
	$	5,648,774		$	10,705,434		$	2,517,217		$	1,395,849		$	1,180,774		$	21,448,048
Loans/leases individually evaluated for impairment	$	1,761,850		$	12,956,915		$	894,458		$	2,116,747		$	1,350,450		$	19,080,420
Loans/leases collectively evaluated for impairment		429,926,279			658,796,014			128,006,984			145,239,576			74,683,360			1,436,652,213
	$	431,688,129		$	671,752,929		$	128,901,442		$	147,356,323		$	76,033,810		$	1,455,732,633
Allowance as a percentage of loans/leases individually evaluated for impairment		52.64	%		24.50	%		21.56	%		11.63	%		34.62	%		26.25	%
Allowance as a percentage of loans/leases collectively evaluated for impairment		1.10	%		1.14	%		1.82	%		0.79	%		0.95	%		1.14	%
		1.31	%		1.59	%		1.95	%		0.95	%		1.55	%		1.47	%

Impaired Financing Receivables [Table Text Block]

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	$	441,945	$	517,833	$	-	$	482,151	$	1,888	$	1,888
Commercial Real Estate
Owner-Occupied Commercial Real Estate		389,876		389,876		-		436,412		-		-
Commercial Construction, Land Development, and Other Land		2,124,350		2,247,550		-		2,127,392		-		-
Other Non Owner-Occupied Commercial Real Estate		1,983,846		1,983,846		-		2,376,752		13,283		13,283
Direct Financing Leases		619,800		619,800		-		586,567		-		-
Residential Real Estate		977,436		977,436		-		1,222,955		1,455		1,455
Installment and Other Consumer		833,338		833,338		-		897,665		890		890
	$	7,370,591	$	7,569,679	$	-	$	8,129,894	$	17,516	$	17,516
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	958,813	$	1,449,488	$	732,427	$	910,410	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		224,892		224,892		117,555		112,438		-		-
Commercial Construction, Land Development, and Other Land		685,292		796,492		477,293		685,834		-		-
Other Non Owner-Occupied Commercial Real Estate		6,668,048		7,373,330		2,117,624		6,682,038		-		-
Direct Financing Leases		700,842		700,842		298,303		467,524		-		-
Residential Real Estate		866,172		866,172		224,972		793,141		774		774
Installment and Other Consumer		396,897		396,897		396,897		397,897		-		-
	$	10,500,956	$	11,808,113	$	4,365,071	$	10,049,282	$	774	$	774
Total Impaired Loans/Leases:
Commercial and Industrial	$	1,400,758	$	1,967,321	$	732,427	$	1,392,561	$	1,888	$	1,888
Commercial Real Estate
Owner-Occupied Commercial Real Estate		614,768		614,768		117,555		548,850		-		-
Commercial Construction, Land Development, and Other Land		2,809,642		3,044,042		477,293		2,813,226		-		-
Other Non Owner-Occupied Commercial Real Estate		8,651,894		9,357,176		2,117,624		9,058,790		13,283		13,283
Direct Financing Leases		1,320,642		1,320,642		298,303		1,054,091		-		-
Residential Real Estate		1,843,608		1,843,608		224,972		2,016,096		2,229		2,229
Installment and Other Consumer		1,230,235		1,230,235		396,897		1,295,562		890		890
	$	17,871,547	$	19,377,792	$	4,365,071	$	18,179,176	$	18,290	$	18,290

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	$	402,621	$	775,004	$	-	$	767,929	$	1,924	$	1,924
Commercial Real Estate
Owner-Occupied Commercial Real Estate		498,946		498,946		-		507,451		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied Commercial Real Estate		47,958		47,958		-		3,198,617		40,116		40,116
Direct Financing Leases		789,346		789,346		-		831,677		-		-
Residential Real Estate		630,324		630,324		-		810,583		-		-
Installment and Other Consumer		196,615		196,615		-		187,590		2,093		2,093
	$	2,565,810	$	2,938,193	$	-	$	6,303,847	$	44,133	$	44,133
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	211,400	$	264,334	$	498,260	$	216,133	$	-	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		3,929,839		3,929,839		1,154,155		3,933,530		2,703		2,703
Other Non Owner-Occupied Commercial Real Estate		9,983,944		10,236,903		2,353,684		10,046,487		4,501		4,501
Direct Financing Leases		421,590		421,590		325,294		273,192		-		-
Residential Real Estate		305,612		305,612		95,232		308,841		-		-
Installment and Other Consumer		927,467		927,467		117,131		629,810		333		333
	$	15,779,852	$	16,085,745	$	4,543,756	$	15,407,993	$	7,537	$	7,537
Total Impaired Loans/Leases:
Commercial and Industrial	$	614,021	$	1,039,338	$	498,260	$	984,062	$	1,924	$	1,924
Commercial Real Estate
Owner-Occupied Commercial Real Estate		498,946		498,946		-		507,451		-		-
Commercial Construction, Land Development, and Other Land		3,929,839		3,929,839		1,154,155		3,933,530		2,703		2,703
Other Non Owner-Occupied Commercial Real Estate		10,031,902		10,284,861		2,353,684		13,245,104		44,617		44,617
Direct Financing Leases		1,210,936		1,210,936		325,294		1,104,869		-		-
Residential Real Estate		935,936		935,936		95,232		1,119,424		-		-
Installment and Other Consumer		1,124,082		1,124,082		117,131		817,400		2,426		2,426
	$	18,345,662	$	19,023,938	$	4,543,756	$	21,711,840	$	51,670	$	51,670

Information for Impaired Loans Leases [Table Text Block]

Classes of Loans/Leases	Recorded Investment		Unpaid  Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
Commercial and Industrial	$	492,622	$	568,951	$	-
Commercial Real Estate
Owner-Occupied Commercial Real Estate		392,542		392,542		-
Commercial Construction, Land Development, and Other Land		1,943,168		2,054,368		-
Other Non Owner-Occupied Commercial Real Estate		1,790,279		1,902,279		-
Direct Financing Leases		557,469		557,469		-
Residential Real Estate		1,071,927		1,071,927		-
Installment and Other Consumer		509,667		509,667		-
	$	6,757,674	$	7,057,203	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
Commercial and Industrial	$	1,269,228	$	1,956,755	$	927,453
Commercial Real Estate
Owner-Occupied Commercial Real Estate		159,247		159,247		67,498
Commercial Construction, Land Development, and Other Land		888,547		1,011,747		503,825
Other Non Owner-Occupied Commercial Real Estate		7,783,132		8,488,414		2,603,381
Direct Financing Leases		336,989		336,989		192,847
Residential Real Estate		1,044,820		1,044,820		246,266
Installment and Other Consumer		840,783		840,783		467,552
	$	12,322,746	$	13,838,755	$	5,008,822
Total Impaired Loans/Leases:
Commercial and Industrial	$	1,761,850	$	2,525,706	$	927,453
Commercial Real Estate
Owner-Occupied Commercial Real Estate		551,789		551,789		67,498
Commercial Construction, Land Development, and Other Land		2,831,715		3,066,115		503,825
Other Non Owner-Occupied Commercial Real Estate		9,573,411		10,390,693		2,603,381
Direct Financing Leases		894,458		894,458		192,847
Residential Real Estate		2,116,747		2,116,747		246,266
Installment and Other Consumer		1,350,450		1,350,450		467,552
	$	19,080,420	$	20,895,958	$	5,008,822

Financing Receivable Credit Quality Indicators [Table Text Block]

	As of March 31, 2014
			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)	$	419,982,030	$	250,623,915	$	50,250,005	$	327,819,856	$	1,048,675,806
Special Mention (Rating 6)		12,464,206		10,356,128		-		1,765,205		24,585,539
Substandard (Rating 7)		9,904,239		8,503,481		4,944,020		24,965,595		48,317,335
Doubtful (Rating 8)		-		-		-		-		-
	$	442,350,475	$	269,483,524	$	55,194,025	$	354,550,656	$	1,121,578,680

	As of December 31, 2013
			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)	$	407,294,743	$	250,028,731	$	51,868,919	$	326,168,882	$	1,035,361,275
Special Mention (Rating 6)		11,355,713		8,318,232		1,588,086		3,310,017		24,572,048
Substandard (Rating 7)		13,037,673		2,868,949		4,387,897		23,213,216		43,507,735
Doubtful (Rating 8)		-		-		-		-		-
	$	431,688,129	$	261,215,912	$	57,844,902	$	352,692,115	$	1,103,441,058

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

	As of March 31, 2014
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and  Other Consumer		Total
Performing	$	138,672,682	$	147,106,609	$	75,579,303	$	361,358,594
Nonperforming		1,321,377		1,843,608		1,230,237		4,395,222
	$	139,994,059	$	148,950,217	$	76,809,540	$	365,753,816

	As of December 31, 2013
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total
Performing	$	128,006,984	$	145,345,719	$	74,688,039	$	348,040,742
Nonperforming		894,458		2,010,604		1,345,771		4,250,833
	$	128,901,442	$	147,356,323	$	76,033,810	$	352,291,575

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	For the three months ended March 31, 2014								For the three months ended March 31, 2013
Classes of Loans/Leases	Number of Loans / Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance		Number of  Loans /  Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance
CONCESSION - Significant payment delay
Owner-Occupied Commercial Real Estate		-	$	-	$	-	$	-		1	$	47,958	$	47,958	$	-
Direct Financing Leases		1	$	89,443	$	89,443	$	-		-	$	-	$	-	$	-
		1	$	89,443	$	89,443	$	-		1	$	47,958	$	47,958	$	-
CONCESSION - Extension of maturity
Commercial and Industrial		-	$	-	$	-	$	-		3	$	809,494	$	809,494	$	188,700
Direct Financing Leases		1	$	70,144	$	70,144	$	24,246		-	$	-	$	-	$	-
		1	$	70,144	$	70,144	$	24,246		3	$	809,494	$	809,494	$	188,700
TOTAL		2	$	159,587	$	159,587	$	24,246		4	$	857,452	$	857,452	$	188,700

XML

Note 6 - Fair Value

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 6 – FAIR VALUE

Accounting guidance on fair value measurement 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:

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

● 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

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

Assets measured at fair value on a recurring basis comprise the following at March 31, 2014 and December 31, 2013:

			Fair Value Measurements at Reporting Date Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2014:
Securities available for sale:
U.S. govt. sponsored agency securities	$	350,337,559	$	-	$	350,337,559	$	-
Residential mortgage-backed and related securities		158,119,401		-		158,119,401		-
Municipal securities		35,076,066		-		35,076,066		-
Other securities		1,944,511		317,137		1,627,374		-
	$	545,477,537	$	317,137	$	545,160,400	$	-
December 31, 2013:
Securities available for sale:
U.S. govt. sponsored agency securities	$	356,472,987	$	-	$	356,472,987	$	-
Residential mortgage-backed and related securities		157,429,451		-		157,429,451		-
Municipal securities		35,958,857		-		35,958,857		-
Other securities		1,897,163		317,698		1,579,465		-
	$	551,758,458	$	317,698	$	551,440,760	$	-

There were no transfers of assets or liabilities between Levels 1, 2, and 3 of the fair value hierarchy for the three months ended March 31, 2014 and 2013.

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 remainder of the securities available for sale portfolio consists of securities whereby 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 March 31, 2014 and December 31, 2013:

			Fair Value Measurements at Reporting Date Using
	Fair Value		Level 1		Level 2		Level 3
March 31, 2014:
Impaired loans/leases	$	7,524,198	$	-	$	-	$	7,524,198
Other real estate owned		10,448,606		-		-		10,448,606
	$	17,972,804	$	-	$	-	$	17,972,804
December 31, 2013:
Impaired loans/leases	$	9,009,557	$	-	$	-	$	9,009,557
Other real estate owned		10,507,377		-		-		10,507,377
	$	19,516,934	$	-	$	-	$	19,516,934

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 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 estimated fair value of the property, less disposal costs, and is classified as a Level 3 in the fair value hierarchy. The estimated fair value of the property is determined based on appraisals by qualified licensed appraisers hired by the Company.  Appraised and reported values are 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 property.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:

	Quantitave Information about Level Fair Value Measurments
	Fair Value		Valuation Technique	Unobservable Input	Range
March 31, 2014:
Impaired loans/leases	$	7,524,198	Appraisal of collateral	Appraisal adjustments	-10.00%	to	-50.00	%
Other real estate owned		10,448,606	Appraisal of collateral	Appraisal adjustments	0.00%	to	-35.00	%

	Quantitave Information about Level Fair Value Measurments
	Fair Value		Valuation Technique	Unobservable Input	Range
December 31, 2013:
Impaired loans/leases	$	9,009,557	Appraisal of collateral	Appraisal adjustments	-10.00%	to	-50.00	%
Other real estate owned		10,507,377	Appraisal of collateral	Appraisal adjustments	0.00%	to	-35.00	%

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 three months ended March 31, 2014 and 2013.

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:

	Fair Value	As of March 31, 2014				As of December 31, 2013
	Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and due from banks	Level 1	$	55,444,302	$	55,444,302	$	41,950,790	$	41,950,790
Federal funds sold	Level 2		11,570,000		11,570,000		39,435,000		39,435,000
Interest-bearing deposits at financial institutions	Level 2		44,389,277		44,389,277		33,044,917		33,044,917
Investment securities:
Held to maturity	Level 3		161,629,152		157,617,860		145,451,895		138,640,105
Available for sale	See Previous Table		545,477,537		545,477,537		551,758,458		551,758,458
Loans/leases receivable, net	Level 3		6,966,850		7,524,198		8,342,182		9,009,557
Loans/leases receivable, net	Level 2		1,462,959,422		1,472,150,150		1,430,489,328		1,441,952,443
Deposits:
Nonmaturity deposits	Level 2		1,296,408,620		1,296,408,620		1,256,209,352		1,256,209,352
Time deposits	Level 2		375,485,023		376,596,000		390,781,891		391,923,000
Short-term borrowings	Level 2		165,569,112		165,569,112		149,292,967		149,292,967
Federal Home Loan Bank advances	Level 2		235,700,000		245,555,000		231,350,000		241,623,000
Other borrowings	Level 2		142,250,644		152,184,000		142,448,362		152,761,000
Junior subordinated debentures	Level 2		40,322,765		28,218,054		40,289,830		28,094,228

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, non-maturity deposits, and short-term borrowings. The Company used the following methods and assumptions in estimating the fair value of the following instruments:

Securities held to maturity: The fair values are estimated using pricing models that consider certain observable market data, however, as most of the securities have limited or no trading activity and are not rated, the fair value is partially dependent upon unobservable inputs.

Loans/leases receivable: The fair values for all 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 in the secondary market.

Deposits: The fair values disclosed for demand 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.

FHLB advances and junior subordinated debentures: 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.

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

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Note 4 - Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 4 - EARNINGS PER SHARE

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

	Three months ended March 31,
	2014		2013
Net income	$	3,889,215	$	3,265,144
Less: Preferred stock dividends		708,008		810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$	3,181,207	$	2,454,307
Earnings per common share attributable to QCR Holdings, Inc. common stockholders
Basic	$	0.40	$	0.50
Diluted	$	0.40	$	0.49
Weighted average common shares outstanding		7,901,035		4,927,591
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		129,008		106,751
Weighted average common and common equivalent shares outstanding		8,030,043		5,034,342

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Note 5 - Business Segment Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 5 – 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. CRBT includes CNB’s operations from its acquisition on May 13, 2013. Each of these three secondary segments offers similar products and services, but is 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.

Selected financial information on the Company’s business segments is presented as follows for the three months ended March 31, 2014 and 2013.

	Commercial Banking
	Quad City Bank & Trust		Cedar Rapids Bank & Trust		Rockford Bank & Trust		Wealth Management		All Other			Intercompany Eliminations			Consolidated Total
Three Months Ended March 31, 2014
Total revenue	$	11,938,133	$	8,303,625	$	3,482,876	$	2,149,334	$	5,223,865		$	(5,315,781	)	$	25,782,052
Net interest income	$	8,921,038	$	5,902,059	$	2,475,682	$	-	$	(449,538	)	$	-		$	16,849,241
Net income	$	2,341,283	$	1,934,770	$	471,039	$	459,294	$	3,889,215		$	(5,206,386	)	$	3,889,215
Total assets	$	1,269,106,354	$	819,179,681	$	346,365,023	$	-	$	203,666,846		$	(211,998,694	)	$	2,426,319,210
Provision for loan/lease losses	$	609,162	$	300,000	$	185,000	$	-	$	-		$	-		$	1,094,162
Goodwill	$	3,222,688	$	-	$	-	$	-	$	-		$	-		$	3,222,688
Core deposit intangible	$	-	$	1,820,555	$	-	$	-	$	-		$	-		$	1,820,555
Three Months Ended March 31, 2013
Total revenue	$	12,055,661	$	6,928,351	$	3,184,059	$	1,649,011	$	4,732,570		$	(4,808,141	)	$	23,741,511
Net interest income	$	8,391,538	$	3,844,882	$	2,305,077	$	-	$	(350,180	)	$	-		$	14,191,317
Net income	$	2,497,025	$	1,720,811	$	96,242	$	213,007	$	3,265,144		$	(4,527,085	)	$	3,265,144
Total assets	$	1,223,662,809	$	598,842,406	$	322,544,243	$	-	$	199,591,558		$	(200,650,364	)	$	2,143,990,652
Provision for loan/lease losses	$	357,782	$	300,000	$	400,000	$	-	$	-		$	-		$	1,057,782
Goodwill	$	3,222,688	$	-	$	-	$	-	$	-		$	-		$	3,222,688

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Note 7 - Partial Redemption of Series F Preferred Stock

3 Months Ended

Mar. 31, 2014

Disclosure Text Block Supplement [Abstract]

Preferred Stock [Text Block]

NOTE 7 – PARTIAL REDEMPTION OF SERIES F PREFERRED STOCK

On March 31, 2014, the Company redeemed 15,000 shares of its Series F Non-Cumulative Perpetual Preferred Stock (the “Series F Preferred Stock”) from the United States Department of the Treasury (“Treasury”) for an aggregate redemption amount of $15,000,000 plus unpaid dividends to the date of redemption of $337,500.

Previously, on September 15, 2011, the Company issued 40,090 shares of Series F Preferred Stock to the Treasury for an aggregate purchase price of $40,090,000. The sale of Series F Preferred Stock was the result of an investment by Treasury under the Small Business Lending Fund (“SBLF”). 

On June 29, 2012, the Company redeemed 10,223 shares of Series F Preferred Stock. In total, the Company has redeemed 25,223 shares of the Series F Preferred Stock with 14,867 shares remaining at March 31, 2014. The Company’s dividend rate increased from 5% to 9% with the dividend for the first quarter of 2014, which was paid on April 1, 2014.

The Series F Preferred Stock may be redeemed at any time at the option of the Company, subject to the approval, if required, 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). The Company intends to fully redeem the remaining 14,867 shares during 2014.

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Note 3 - Loans/Leases Receivable (Details) - Additional Information on Impaired Loans (USD $)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	$ 7,370,591	$ 6,757,674	$ 2,565,810
Impaired loans with no related allowance unpaid principal balance	7,569,679	7,057,203	2,938,193
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	10,500,956	12,322,746	15,779,852
Impaired loans with related allowance unpaid principal balance	11,808,113	13,838,755	16,085,745
Impaired loans related allowance	4,365,071	5,008,822	4,543,756
Total Impaired Loans/Leases:
Impaired loans recorded investment	17,871,547	19,080,420	18,345,662
Impaired loans unpaid principal balance	19,377,792	20,895,958	19,023,938
Impaired loans related allowance	4,365,071	5,008,822	4,543,756
Commercial and Industrial [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	441,945	492,622	402,621
Impaired loans with no related allowance unpaid principal balance	517,833	568,951	775,004
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	958,813	1,269,228	211,400
Impaired loans with related allowance unpaid principal balance	1,449,488	1,956,755	264,334
Impaired loans related allowance	732,427	927,453	498,260
Total Impaired Loans/Leases:
Impaired loans recorded investment	1,400,758	1,761,850	614,021
Impaired loans unpaid principal balance	1,967,321	2,525,706	1,039,338
Impaired loans related allowance	732,427	927,453	498,260
Owner-Occupied Commercial Real Estate [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	389,876	392,542	498,946
Impaired loans with no related allowance unpaid principal balance	389,876	392,542	498,946
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	224,892	159,247
Impaired loans with related allowance unpaid principal balance	224,892	159,247
Impaired loans related allowance	117,555	67,498
Total Impaired Loans/Leases:
Impaired loans recorded investment	614,768	551,789	498,946
Impaired loans unpaid principal balance	614,768	551,789	498,946
Impaired loans related allowance	117,555	67,498
Commercial Construction, Land Development, and Other Land [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	2,124,350	1,943,168
Impaired loans with no related allowance unpaid principal balance	2,247,550	2,054,368
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	685,292	888,547	3,929,839
Impaired loans with related allowance unpaid principal balance	796,492	1,011,747	3,929,839
Impaired loans related allowance	477,293	503,825	1,154,155
Total Impaired Loans/Leases:
Impaired loans recorded investment	2,809,642	2,831,715	3,929,839
Impaired loans unpaid principal balance	3,044,042	3,066,115	3,929,839
Impaired loans related allowance	477,293	503,825	1,154,155
Non-Owner Occupied Commercial Real Estate [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	1,983,846	1,790,279	47,958
Impaired loans with no related allowance unpaid principal balance	1,983,846	1,902,279	47,958
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	6,668,048	7,783,132	9,983,944
Impaired loans with related allowance unpaid principal balance	7,373,330	8,488,414	10,236,903
Impaired loans related allowance	2,117,624	2,603,381	2,353,684
Total Impaired Loans/Leases:
Impaired loans recorded investment	8,651,894	9,573,411	10,031,902
Impaired loans unpaid principal balance	9,357,176	10,390,693	10,284,861
Impaired loans related allowance	2,117,624	2,603,381	2,353,684
Finance Leases Portfolio Segment [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	619,800	557,469	789,346
Impaired loans with no related allowance unpaid principal balance	619,800	557,469	789,346
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	700,842	336,989	421,590
Impaired loans with related allowance unpaid principal balance	700,842	336,989	421,590
Impaired loans related allowance	298,303	192,847	325,294
Total Impaired Loans/Leases:
Impaired loans recorded investment	1,320,642	894,458	1,210,936
Impaired loans unpaid principal balance	1,320,642	894,458	1,210,936
Impaired loans related allowance	298,303	192,847	325,294
Residential Portfolio Segment [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	977,436	1,071,927	630,324
Impaired loans with no related allowance unpaid principal balance	977,436	1,071,927	630,324
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	866,172	1,044,820	305,612
Impaired loans with related allowance unpaid principal balance	866,172	1,044,820	305,612
Impaired loans related allowance	224,972	246,266	95,232
Total Impaired Loans/Leases:
Impaired loans recorded investment	1,843,608	2,116,747	935,936
Impaired loans unpaid principal balance	1,843,608	2,116,747	935,936
Impaired loans related allowance	224,972	246,266	95,232
Consumer Portfolio Segment [Member]
Impaired Loans/Leases with No Specific Allowance Recorded:
Impaired loans with no related allowance recorded investment	833,338	509,667	196,615
Impaired loans with no related allowance unpaid principal balance	833,338	509,667	196,615
Impaired Loans/Leases with Specific Allowance Recorded:
Impaired loans with related allowance recorded investment	396,897	840,783	927,467
Impaired loans with related allowance unpaid principal balance	396,897	840,783	927,467
Impaired loans related allowance	396,897	467,552	117,131
Total Impaired Loans/Leases:
Impaired loans recorded investment	1,230,235	1,350,450	1,124,082
Impaired loans unpaid principal balance	1,230,235	1,350,450	1,124,082
Impaired loans related allowance	$ 396,897	$ 467,552	$ 117,131

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Note 5 - Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Commercial Banking
	Quad City Bank & Trust		Cedar Rapids Bank & Trust		Rockford Bank & Trust		Wealth Management		All Other			Intercompany Eliminations			Consolidated Total
Three Months Ended March 31, 2014
Total revenue	$	11,938,133	$	8,303,625	$	3,482,876	$	2,149,334	$	5,223,865		$	(5,315,781	)	$	25,782,052
Net interest income	$	8,921,038	$	5,902,059	$	2,475,682	$	-	$	(449,538	)	$	-		$	16,849,241
Net income	$	2,341,283	$	1,934,770	$	471,039	$	459,294	$	3,889,215		$	(5,206,386	)	$	3,889,215
Total assets	$	1,269,106,354	$	819,179,681	$	346,365,023	$	-	$	203,666,846		$	(211,998,694	)	$	2,426,319,210
Provision for loan/lease losses	$	609,162	$	300,000	$	185,000	$	-	$	-		$	-		$	1,094,162
Goodwill	$	3,222,688	$	-	$	-	$	-	$	-		$	-		$	3,222,688
Core deposit intangible	$	-	$	1,820,555	$	-	$	-	$	-		$	-		$	1,820,555
Three Months Ended March 31, 2013
Total revenue	$	12,055,661	$	6,928,351	$	3,184,059	$	1,649,011	$	4,732,570		$	(4,808,141	)	$	23,741,511
Net interest income	$	8,391,538	$	3,844,882	$	2,305,077	$	-	$	(350,180	)	$	-		$	14,191,317
Net income	$	2,497,025	$	1,720,811	$	96,242	$	213,007	$	3,265,144		$	(4,527,085	)	$	3,265,144
Total assets	$	1,223,662,809	$	598,842,406	$	322,544,243	$	-	$	199,591,558		$	(200,650,364	)	$	2,143,990,652
Provision for loan/lease losses	$	357,782	$	300,000	$	400,000	$	-	$	-		$	-		$	1,057,782
Goodwill	$	3,222,688	$	-	$	-	$	-	$	-		$	-		$	3,222,688

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Note 2 - Investment Securities (Details) - Sales of Securities (USD $)	3 Months Ended
	Mar. 31, 2014
Sales of Securities [Abstract]
Proceeds from sales of securities	$ 7,020,625
Pre-tax gross gains from sales of securities	$ 20,625

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Note 6 - Fair Value (Details) - Assets Measured at Fair Value on a Recurring Basis (USD $)	Mar. 31, 2014	Dec. 31, 2013
Securities available for sale:
Securities available for sale	$ 545,477,537	$ 551,758,458
Assets measured on a non-recurring basis	17,972,804	19,516,934
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale:
Securities available for sale	350,337,559	356,472,987
US Government Agencies Debt Securities [Member]
Securities available for sale:
Securities available for sale	350,337,559	356,472,987
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale:
Securities available for sale	158,119,401	157,429,451
Residential Mortgage Backed Securities [Member]
Securities available for sale:
Securities available for sale	158,119,401	157,429,451
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale:
Securities available for sale	35,076,066	35,958,857
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale:
Securities available for sale	35,076,066	35,958,857
Equity Securities, Other [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale:
Securities available for sale	317,137	317,698
Equity Securities, Other [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale:
Securities available for sale	1,627,374	1,579,465
Equity Securities, Other [Member]
Securities available for sale:
Securities available for sale	1,944,511	1,897,163
Impaired Loans/Leases [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale:
Assets measured on a non-recurring basis	7,524,198	9,009,557
Impaired Loans/Leases [Member]
Securities available for sale:
Assets measured on a non-recurring basis	7,524,198	9,009,557
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale:
Assets measured on a non-recurring basis	10,448,606	10,507,377
Other Real Estate Owned [Member]
Securities available for sale:
Assets measured on a non-recurring basis	10,448,606	10,507,377
Fair Value, Inputs, Level 1 [Member]
Securities available for sale:
Securities available for sale	317,137	317,698
Fair Value, Inputs, Level 2 [Member]
Securities available for sale:
Securities available for sale	545,160,400	551,440,760
Fair Value, Inputs, Level 3 [Member]
Securities available for sale:
Assets measured on a non-recurring basis	$ 17,972,804	$ 19,516,934

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net income	$ 3,889,215	$ 3,265,144
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period before tax	8,490,174	(1,356,552)
Less reclassification adjustment for gains included in net income before tax	20,625
	8,469,549	(1,356,552)
Tax expense (benefit)	3,238,765	(520,194)
Other comprehensive income (loss), net of tax	5,230,784	(836,358)
Comprehensive income attributable to QCR Holdings, Inc.	$ 9,119,999	$ 2,428,786

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Note 1 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

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, 2013, included in QCR Holdings, Inc.’s (the “Company”) Form 10-K filed with the Securities and Exchange Commission on March 10, 2014. 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 March 31, 2014, are not necessarily indicative of the results expected for the year ending December 31, 2014.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include three commercial banks: Quad City Bank & Trust Company (“QCBT”), Cedar Rapids Bank & Trust Company (“CRBT”), and Rockford Bank & Trust Company (“RB&T”). On May 13, 2013, the Company acquired Community National Bancorporation (“Community National”) and its banking subsidiary Community National Bank (“CNB”). The Company operated CNB as a separate banking charter from the acquisition date until October 26, 2013, when CNB’s charter was merged with and into CRBT. CNB“s merged branch offices operate as a division of CRBT under the name of “Community Bank & Trust”. QCBT, CRBT, and RB&T are all state-chartered commercial banks. The Company also engages in direct financing lease contracts through m2 Lease Funds, LLC (“m2 Lease Funds”), a wholly-owned subsidiary of QCBT. All material intercompany transactions and balances have been eliminated in consolidation.

Recent accounting developments: In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Adoption did not have a significant impact on the Company’s consolidated financial statements.

In January 2014, FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The objective of ASU 2014-04 is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU 2014-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Management is in the process of evaluating the impact of ASU 2014-04 on the Company’s consolidated financial statements.

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

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Note 2 - Investment Securities (Details) - Amortized Cost and Fair Value of Securities by Contractual Maturity (USD $)	Mar. 31, 2014	Dec. 31, 2013
Securities held to maturity:
Due in one year or less	$ 2,298,028
Due in one year or less	2,299,876
Due after one year through five years	10,898,311
Due after one year through five years	10,876,493
Due after one year through five years	148,432,813
Due after one year through five years	144,441,491
	161,629,152
	157,617,860	138,640,105
Securities available for sale:
Due in one year or less	5,399,927
Due in one year or less	5,412,462
Due after one year through five years	51,172,655
Due after one year through five years	50,810,680
Due after five years	341,825,057
Due after five years	329,190,483
	398,397,639
	385,413,625
Securities with no stated maturity date, amortized cost	559,120,092
Securities with no stated maturity date, fair value	545,477,537
Residential Mortgage Backed Securities [Member]
Securities available for sale:
Securities with no stated maturity date, amortized cost	159,343,903
Securities with no stated maturity date, fair value	158,119,401
Other Securities [Member]
Securities held to maturity:
	1,050,000	1,050,000
Securities available for sale:
Securities with no stated maturity date, amortized cost	1,378,550
Securities with no stated maturity date, fair value	1,944,511
US States and Political Subdivisions Debt Securities [Member]
Securities held to maturity:
	156,567,860	137,590,105
US States and Political Subdivisions Debt Securities [Member] | Callable Securities [Member]
Securities available for sale:
Securities with no stated maturity date, amortized cost	22,063,064
Securities with no stated maturity date, fair value	22,190,224
Securities held to maturity:
Municipal securities	107,791,951
Municipal securities	104,916,513
US Government-sponsored Enterprises Debt Securities [Member] | Callable Securities [Member]
Securities available for sale:
Securities with no stated maturity date, amortized cost	307,435,005
Securities with no stated maturity date, fair value	295,518,088
Callable Securities [Member]
Securities available for sale:
Securities with no stated maturity date, amortized cost	329,498,069
Securities with no stated maturity date, fair value	$ 317,708,312

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Note 4 - Earnings Per Share (Details) - Earnings Per Share - Basic and Diluted (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share - Basic and Diluted [Abstract]
Net income	$ 3,889,215	$ 3,265,144
Less: Preferred stock dividends	708,008	810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$ 3,181,207	$ 2,454,307
Earnings per common share attributable to QCR Holdings, Inc. common stockholders
Basic	$ 0.40	$ 0.50
Diluted	$ 0.40	$ 0.49
Weighted average common shares outstanding	7,901,035	4,927,591
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan	129,008	106,751
Weighted average common and common equivalent shares outstanding	8,030,043	5,034,342

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Note 4 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended March 31,
	2014		2013
Net income	$	3,889,215	$	3,265,144
Less: Preferred stock dividends		708,008		810,837
Net income attributable to QCR Holdings, Inc. common stockholders	$	3,181,207	$	2,454,307
Earnings per common share attributable to QCR Holdings, Inc. common stockholders
Basic	$	0.40	$	0.50
Diluted	$	0.40	$	0.49
Weighted average common shares outstanding		7,901,035		4,927,591
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		129,008		106,751
Weighted average common and common equivalent shares outstanding		8,030,043		5,034,342