NOTE 4

–

BORROWINGS

Maturity and interest rate information on advances from FHLB as of September 30, 2016 and December 31, 2015 is as follows:

	September 30, 2016
			Weighted					Weighted
			Average			Amount Due		Average
			Interest Rate			with		Interest Rate
	Amount Due		at Quarter-End			Putable Option *		at Quarter-End
Maturity:
Year ending December 31:
2016	$	90,300,000		0.55	%	$	-		-	%
2017		23,342,549		2.59			-		-
2018		25,000,000		2.70			-		-
Total FHLB advances	$	138,642,549		1.68	%	$	-		-	%

	December 31, 2015
			Weighted					Weighted
			Average			Amount Due		Average
			Interest Rate			with		Interest Rate
	Amount Due		at Year-End			Putable Option *		at Year-End
Maturity:
Year ending December 31:
2016	$	103,000,000		0.56	%	$	2,000,000		4.00	%
2017		18,000,000		2.89			-		-
2018		30,000,000		3.27			5,000,000		2.84
Total FHLB advances	$	151,000,000		1.37	%	$	7,000,000		3.17	%

Other borrowings as of September 30, 2016 and December 31, 2015 are summarized as follows:

	As of September 30, 2016		As of December 31, 2015

Wholesale structured repurchase agreements	$	45,000,000	$	110,000,000
Term note		30,000,000		-
Revolving line of credit		5,000,000		-
	$	80,000,000	$	110,000,000

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Maturity and interest rate information concerning wholesale structured repurchase agreements is summarized as follows:

	September 30, 2016					December 31, 2015
			Weighted					Weighted
			Average					Average
			Interest Rate					Interest Rate
	Amount Due		at Quarter-End			Amount Due		at Year-End
Maturity:
Year ending December 31:
2016	$	-		0.00	%	$	-		0.00	%
2017		10,000,000		3.07			10,000,000		3.00
2018		-		-			10,000,000		3.97
2019		10,000,000		3.44			45,000,000		3.40
2020		25,000,000		2.48			45,000,000		2.66
Total Wholesale Structured Repurchase Agreements	$	45,000,000		2.83	%	$	110,000,000		3.11	%

During the first quarter of 2016, the Company executed balance sheet restructuring strategies at QCBT and CRBT, which included the repayment of $10.0 million of wholesale structured repurchase agreements and $10.0 million of FHLB advances with a combined weighted average interest rate of 3.92%. As a result of this restructuring, the Company incurred $1.3 million (pre-tax) in losses on debt extinguishment that are included in the statements of income. The weighted average duration of this combined debt was 2.17 years, with $10.0 million maturing in 2017 and $10.0 maturing in 2018. This funding was replaced with short-term borrowings at an average interest rate of 0.50%.

During the third quarter of 2016, the Company executed further balance sheet restructuring at QCBT which included the repayment of $55.0 million of wholesale structured repurchase agreements and $5.0 million of FHLB advances with a combined weighted average interest rate of 3.24%. As a result of this restructuring, the Company incurred $4.1 million (pre-tax) in losses on debt extinguishment that are included in the statements of income. The weighted average duration of this combined debt was 2.95 years, with $5.0 million maturing in 2018, $35.0 million maturing in 2019, and $20.0 million maturing in 2020. This funding was replaced partially with proceeds from the sale of bonds previously pledged as collateral for the wholesale structured repurchase agreements ($27.8 million) and the rest with short-term borrowings at an average interest rate of 0.50%.

As of December 31, 2015, the Company maintained a $40.0 million revolving line of credit note, with interest calculated at the effective LIBOR rate plus 2.50% per annum (3.10% at December 31, 2015). At December 31, 2015, the Company had not borrowed on this revolving credit note and had the full amount available. At the renewal date in June 2016, the note was amended to provide a $10.0 million revolving line of credit note and a $30.0 million term note commitment with a five-year term. Interest on the revolving line of credit is calculated at the effective LIBOR rate plus 2.50% per annum (3.34% at September 30, 2016). Interest on the term note is calculated at the effective LIBOR rate plus 3.00% per annum (3.84% at September 30, 2016). Upon closing of the acquisition of CSB, the Company utilized the full $30.0 million term note commitment and borrowed $5.0 million on the revolving line of credit note. At September 30, 2016, the Company had $35.0 million in borrowings outstanding. For the term note, the Company is required to make quarterly principal payments of $1.5 million with maturity information as of September 30, 2016, summarized as follows:

	As of September 30, 2016
2017		6,000,000
2018		6,000,000
2019		6,000,000
2020		6,000,000
2021		6,000,000
	$	30,000,000

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Similar to the previous revolving note agreement, the amended agreement contains covenants that place restrictions on additional debt and stipulate minimum capital and various operating ratios.

In October 2016, the Company executed new agreements with the creditor on both the term note and the revolving line of credit, adjusting the rate index from 3-month LIBOR to 1-month LIBOR.

During the first quarter of 2016, the Company extinguished $5.1 million of the QCR Holdings Capital Trust IV junior subordinated debentures (the full balance outstanding) and recorded a $1.2 million gain on extinguishment (pre-tax), as the Company was able to acquire the related security at a discount through auction. This gain is included in the statements of income within losses on debt extinguishment. The interest rate on these debentures floated at 3-month LIBOR plus 1.80% and had a rate of 2.42% at the time of extinguishment. QCR Holdings Capital Trust IV was dissolved after the extinguishment.