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 September 30, 2017

[    ] 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) 736-3580

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for 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,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.      (Check one):

Large accelerated filer [  ]            Accelerated filer [ X ]            Non-accelerated filer [  ]     

Smaller reporting company [  ]          Emerging growth company [  ]

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

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

Yes  [ X ]          No  [  ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of November 2, 2017, the Registrant had outstanding 13,888,923 shares of common stock, $1.00 par value per share.

QCR HOLDINGS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

			Page Number(s)
Part I	FINANCIAL INFORMATION
	Item 1	Consolidated Financial Statements (Unaudited)
		Consolidated Balance Sheets	3
		As of September 30, 2017 and December 31, 2016
		Consolidated Statements of Income
		For the Three Months Ended September 30, 2017 and 2016	4
		Consolidated Statements of Income
		For the Nine Months Ended September 30, 2017 and 2016	5
		Consolidated Statements of Comprehensive Income
		For the Three and Nine Months Ended September 30, 2017 and 2016	6
		Consolidated Statements of Changes in Stockholders' Equity
		For the Three and Nine Months Ended September 30, 2017 and 2016	7
		Consolidated Statements of Cash Flows
		For the Nine Months Ended September 30, 2017 and 2016	9
		Notes to Consolidated Financial Statements
		Note 1.  Summary of Significant Accounting Policies	11
		Note 2.  Investment Securities	13
		Note 3.  Loans/Leases Receivable	18
		Note 4.  Earnings Per Share	28
		Note 5.  Fair Value	28
		Note 6.  Business Segment Information	32
		Note 7.  Regulatory Capital Requirements	33
		Note 8.  Subsequent Event - Acquisition of Guaranty Bank and Trust Company	35
	Item 2	Management's Discussion and Analysis of Financial Condition andResults of Operations
		Introduction	36
		General	36
		Executive Overview	37
		Long-Term Financial Goals	39
		Strategic Developments	40
		GAAP to Non-GAAP Reconciliations	41
		Net Interest Income (Tax Equivalent Basis)	43
		Critical Accounting Policies	49
		Results of Operations
		Interest Income	50
		Interest Expense	50
		Provision for Loan/Lease Losses	51
		Noninterest Income	52
		Noninterest Expense	55
		Income Taxes	57

1

		Financial Condition	57
		Investment Securities	58
		Loans/Leases	59
		Allowance for Estimated Losses on Loans/Leases	62
		Nonperforming Assets	64
		Deposits	65
		Borrowings	65
		Stockholders' Equity	67
		Liquidity and Capital Resources	68
		Special Note Concerning Forward-Looking Statements	70
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	71
	Item 4	Controls and Procedures	73
Part II	OTHER INFORMATION
	Item 1	Legal Proceedings	74
	Item 1A	Risk Factors	74
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	74
	Item 3	Defaults upon Senior Securities	74
	Item 4	Mine Safety Disclosures	74
	Item 5	Other Information	74
	Item 6	Exhibits	75
Signatures			76

Throughout the Notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations, we use certain acronyms and abbreviations, as defined in Note 1.

2

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of September 30, 2017 and December 31, 2016

	September 30,			December 31,
	2017			2016
ASSETS
Cash and due from banks	$	56,274,561		$	70,569,993
Federal funds sold		20,568,000			22,257,000
Interest-bearing deposits at financial institutions		41,221,383			63,948,925
Securities held to maturity, at amortized cost		323,981,227			322,909,056
Securities available for sale, at fair value		259,954,422			251,113,139
Total securities		583,935,649			574,022,195
Loans receivable held for sale		290,320			1,135,500
Loans/leases receivable held for investment		2,676,464,491			2,404,351,485
Gross loans/leases receivable		2,676,754,811			2,405,486,985
Less allowance for estimated losses on loans/leases		(34,982,341	)		(30,757,448	)
Net loans/leases receivable		2,641,772,470			2,374,729,537
Bank-owned life insurance		58,614,100			57,257,051
Premises and equipment, net		61,877,754			60,643,508
Restricted investment securities		18,585,400			14,997,025
Other real estate owned, net		5,134,845			5,523,104
Goodwill		13,110,913			13,110,913
Core deposit intangible		6,688,613			7,381,213
Other assets		42,679,406			37,503,284
Total assets	$	3,550,463,094		$	3,301,943,748
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	715,537,518		$	797,415,090
Interest-bearing		2,178,730,964			1,871,846,183
Total deposits		2,894,268,482			2,669,261,273
Short-term borrowings		16,010,805			39,971,387
Federal Home Loan Bank advances		169,055,000			137,500,000
Other borrowings		77,500,000			80,000,000
Junior subordinated debentures		33,578,744			33,480,202
Other liabilities		47,011,435			55,690,087
Total liabilities		3,237,424,466			3,015,902,949
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value; shares authorized 250,000 September 2017 and December 2016 - No shares issued or outstanding		-			-
Common stock, $1 par value; shares authorized 20,000,000 September 2017 - 13,201,959 shares issued and outstanding December 2016 - 13,106,845 shares issued and outstanding		13,201,959			13,106,845
Additional paid-in capital		158,459,072			156,776,642
Retained earnings		142,450,131			118,616,901
Accumulated other comprehensive (loss):
Securities available for sale		(250,107	)		(1,527,433	)
Interest rate cap derivatives		(822,427	)		(932,156	)
Total stockholders' equity		313,038,628			286,040,799
Total liabilities and stockholders' equity	$	3,550,463,094		$	3,301,943,748

See Notes to Consolidated Financial Statements (Unaudited)

3

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended September 30,

	2017			2016
Interest and dividend income:
Loans/leases, including fees	$	29,245,320		$	23,001,107
Securities:
Taxable		1,367,212			1,057,204
Nontaxable		2,862,208			2,510,169
Interest-bearing deposits at financial institutions		141,331			103,216
Restricted investment securities		172,776			132,047
Federal funds sold		52,018			12,992
Total interest and dividend income		33,840,865			26,816,735
Interest expense:
Deposits		3,556,189			1,472,031
Short-term borrowings		33,248			12,541
Federal Home Loan Bank advances		607,751			420,570
Other borrowings		724,854			974,634
Junior subordinated debentures		362,475			306,182
Total interest expense		5,284,517			3,185,958
Net interest income		28,556,348			23,630,777
Provision for loan/lease losses		2,086,436			1,607,986
Net interest income after provision for loan/lease losses		26,469,912			22,022,791
Noninterest income:
Trust department fees		1,721,401			1,518,600
Investment advisory and management fees		968,452			765,977
Deposit service fees		1,522,461			1,150,869
Gains on sales of residential real estate loans, net		98,409			144,105
Gains on sales of government guaranteed portions of loans, net		91,974			218,785
Swap fee income		194,256			333,772
Securities gains (losses), net		(63,588	)		4,251,773
Earnings on bank-owned life insurance		428,002			450,251
Debit card fees		754,803			475,182
Correspondent banking fees		239,060			253,823
Other		746,073			860,264
Total noninterest income		6,701,303			10,423,401
Noninterest expense:
Salaries and employee benefits		13,423,943			11,202,460
Occupancy and equipment expense		2,516,274			2,086,331
Professional and data processing fees		2,950,839			1,931,329
Acquisition costs		407,997			1,036,904
Post-acquisition transition and integration costs		522,740			1,009,132
FDIC insurance, other insurance and regulatory fees		690,894			582,835
Loan/lease expense		257,540			102,678
Net cost of (income from) operations of other real estate		(160,640	)		133,055
Advertising and marketing		669,923			547,768
Bank service charges		460,153			415,401
Losses on debt extinguishment, net		-			4,137,310
Correspondent banking expense		204,189			205,998
Other		1,451,895			1,089,282
Total noninterest expense		23,395,747			24,480,483
Net income before income taxes		9,775,468			7,965,709
Federal and state income tax expense		1,921,533			1,858,208
Net income	$	7,853,935		$	6,107,501
Basic earnings per common share	$	0.60		$	0.47
Diluted earnings per common share	$	0.58		$	0.46
Weighted average common shares outstanding		13,151,350			13,066,777
Weighted average common and common equivalent shares outstanding		13,507,955			13,269,703
Cash dividends declared per common share	$	0.05		$	0.04

See Notes to Consolidated Financial Statements (Unaudited)

4

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Nine Months Ended September 30,

	2017			2016
Interest and dividend income:
Loans/leases, including fees	$	84,571,466		$	62,939,656
Securities:
Taxable		3,770,022			3,605,948
Nontaxable		8,198,173			7,028,387
Interest-bearing deposits at financial institutions		559,697			225,775
Restricted investment securities		435,096			396,157
Federal funds sold		104,778			36,155
Total interest and dividend income		97,639,232			74,232,078
Interest expense:
Deposits		8,779,548			4,106,227
Short-term borrowings		76,365			73,672
Federal Home Loan Bank advances		1,365,433			1,278,207
Other borrowings		2,103,731			2,624,154
Junior subordinated debentures		1,042,227			912,706
Total interest expense		13,367,304			8,994,966
Net interest income		84,271,928			65,237,112
Provision for loan/lease losses		6,214,538			4,878,821
Net interest income after provision for loan/lease losses		78,057,390			60,358,291
Noninterest income:
Trust department fees		5,153,609			4,606,590
Investment advisory and management fees		2,798,886			2,117,100
Deposit service fees		4,297,210			3,028,758
Gains on sales of residential real estate loans, net		307,360			288,904
Gains on sales of government guaranteed portions of loans, net		1,129,668			2,701,203
Swap fee income		635,353			1,358,312
Securities gains (losses), net		(25,124	)		4,628,283
Earnings on bank-owned life insurance		1,357,049			1,324,380
Debit card fees		2,201,125			1,126,581
Correspondent banking fees		684,306			800,892
Other		2,228,133			2,027,272
Total noninterest income		20,767,575			24,008,275
Noninterest expense:
Salaries and employee benefits		39,662,218			32,920,840
Occupancy and equipment expense		7,716,829			5,797,875
Professional and data processing fees		7,374,930			4,921,064
Acquisition costs		407,997			1,363,987
Post-acquisition transition and integration costs		522,740			1,037,018
FDIC insurance, other insurance and regulatory fees		1,957,413			1,866,804
Loan/lease expense		811,362			419,846
Net cost of (income from) operations of other real estate		(118,453	)		513,149
Advertising and marketing		1,846,942			1,367,478
Bank service charges		1,331,499			1,246,682
Losses on debt extinguishment, net		-			4,220,507
Correspondent banking expense		604,233			564,763
Other		3,955,783			2,938,721
Total noninterest expense		66,073,493			59,178,734
Net income before income taxes		32,751,472			25,187,832
Federal and state income tax expense		6,946,555			6,030,375
Net income	$	25,804,917		$	19,157,457
Basic earnings per common share	$	1.96		$	1.55
Diluted earnings per common share	$	1.91		$	1.52
Weighted average common shares outstanding		13,151,672			12,398,491
Weighted average common and common equivalent shares outstanding		13,509,566			12,580,042
Cash dividends declared per common share	$	0.15		$	0.12

See Notes to Consolidated Financial Statements (Unaudited)

5

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three and Nine Months Ended September 30, 2017 and 2016

	Three Months Ended September 30,
	2017			2016
Net income	$	7,853,935		$	6,107,501
Other comprehensive income (loss):
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains arising during the period before tax		289,086			3,682,514
Less reclassification adjustment for gains (losses) included in net income before tax		(63,588	)		4,251,773
		352,674			(569,259	)
Unrealized gains (losses) on interest rate cap derivatives:
Unrealized holding losses arising during the period before tax		(8,446	)		(49,573	)
Less reclassification adjustment for ineffectiveness and caplet amortization before tax		(95,361	)		(33,246	)
		86,915			(16,327	)
Other comprehensive income (loss), before tax		439,589			(585,586	)
Tax expense (benefit)		165,012			(224,402	)
Other comprehensive income (loss), net of tax		274,577			(361,184	)
Comprehensive income	$	8,128,512		$	5,746,317

	Nine Months Ended September 30,
	2017			2016
Net income	$	25,804,917		$	19,157,457
Other comprehensive income:
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains arising during the period before tax		2,057,586			10,628,032
Less reclassification adjustment for gains (losses) included in net income before tax		(25,124	)		4,628,283
		2,082,710			5,999,749
Unrealized gains (losses) on interest rate cap derivatives:
Unrealized holding losses arising during the period before tax		(186,000	)		(634,791	)
Less reclassification adjustment for ineffectiveness and caplet amortization before tax		(354,813	)		(82,281	)
		168,813			(552,510	)
Other comprehensive income, before tax		2,251,523			5,447,239
Tax expense		864,468			2,102,379
Other comprehensive income, net of tax		1,387,055			3,344,860
Comprehensive income	$	27,191,972		$	22,502,317

See Notes to Consolidated Financial Statements (Unaudited)

6

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

Three and Nine Months Ended September 30, 2017 and 2016

										Accumulated
				Additional						Other
	Common			Paid-In			Retained			Comprehensive
	Stock			Capital			Earnings			Income (Loss)			Total
Balance December 31, 2016	$	13,106,845		$	156,776,642		$	118,616,901		$	(2,459,589	)	$	286,040,799
Net income		-			-			9,184,965			-			9,184,965
Other comprehensive income, net of tax		-			-			-			410,739			410,739
Common cash dividends declared, $0.05 per share		-			-			(656,574	)		-			(656,574	)
Proceeds from issuance of 3,573 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		3,573			83,091			-			-			86,664
Proceeds from issuance of 44,284 shares of common stock as a result of stock options exercised		44,284			630,290			-			-			674,574
Stock compensation expense		-			388,753									388,753
Restricted stock awards - 13,289 shares of common stock		13,289			(13,289	)		-			-			-
Exchange of 6,772 shares of common stock in connection with stock options exercised and restricted stock vested		(6,772	)		(283,518	)		-			-			(290,290	)
Balance March 31, 2017	$	13,161,219		$	157,581,969		$	127,145,292		$	(2,048,850	)	$	295,839,630
Net income		-			-			8,766,017			-			8,766,017
Other comprehensive income, net of tax		-			-			-			701,739			701,739
Common cash dividends declared, $0.05 per share		-			-			(657,003	)		-			(657,003	)
Proceeds from issuance of 4,582 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		4,582			170,061			-			-			174,643
Proceeds from issuance of 8,027 shares of common stock as a result of stock options exercised		8,027			109,392			-			-			117,419
Stock compensation expense		-			168,314									168,314
Restricted stock awards - 2,000 shares of common stock		2,000			(2,000	)		-			-			-
Exchange of 594 shares of common stock in connection with stock options exercised		(594	)		(26,730	)		-			-			(27,324	)
Balance June 30, 2017	$	13,175,234		$	158,001,006		$	135,254,306		$	(1,347,111	)	$	305,083,435
Net income		-			-			7,853,935			-			7,853,935
Other comprehensive loss, net of tax		-			-			-			274,577			274,577
Common cash dividends declared, $0.05 per share		-			-			(658,110	)		-			(658,110	)
Proceeds from issuance of 2,319 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		2,319			88,052			-			-			90,371
Proceeds from issuance of 19,906 shares of common stock as a result of stock options exercised		19,906			73,915			-			-			93,821
Stock compensation expense		-			300,599			-			-			300,599
Restricted stock awards - 4,500 shares of common stock		4,500			(4,500	)		-			-			-
Balance September 30, 2017	$	13,201,959		$	158,459,072		$	142,450,131		$	(1,072,534	)	$	313,038,628

(Continued)

7

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - continued

Three and Nine Months Ended September 30, 2017 and 2016

										Accumulated
				Additional						Other
	Common			Paid-In			Retained			Comprehensive
	Stock			Capital			Earnings			Income (Loss)			Total
Balance December 31, 2015	$	11,761,083		$	123,282,851		$	92,965,645		$	(2,123,829	)	$	225,885,750
Net income		-			-			6,373,489			-			6,373,489
Other comprehensive income, net of tax		-			-			-			2,525,411			2,525,411
Common cash dividends declared, $0.04 per share		-			-			(470,873	)		-			(470,873	)
Proceeds from issuance of 5,054 shares of  common stock as a result of stock purchased under the Employee Stock Purchase Plan		5,054			94,560			-			-			99,614
Proceeds from issuance of 46,020 shares of common stock as a result of stock options exercised		46,020			729,473			-			-			775,493
Tax benefit of nonqualified stock options exercised					-									-
Stock compensation expense		-			382,761			-			-			382,761
Tax benefit of nonqualified stock options exercised		-			22,508			-			-			22,508
Restricted stock awards - 22,382 shares of common stock		22,382			(22,382	)		-			-			-
Exchange of 19,628 shares of common stock in connection with restricted stock vested, net		(19,628	)		(431,806	)		-			-			(451,434	)
Balance March 31, 2016	$	11,814,911		$	124,057,965		$	98,868,261		$	401,582		$	235,142,719
Net income		-			-			6,676,467			-			6,676,467
Other comprehensive loss, net of tax		-			-			-			1,180,633			1,180,633
Common cash dividends declared, $0.04 per share		-			-			(520,701	)		-			(520,701	)
Proceeds from issuance of 1,215,000 shares of common stock, net of issuance costs		1,215,000			28,613,916			-			-			29,828,916
Proceeds from issuance of 6,982 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		6,982			142,887			-			-			149,869
Proceeds from issuance of 20,975 shares of common stock as a result of stock options exercised		20,975			230,671			-			-			251,646
Tax basis adjustment related to the acquisition of noncontrolling interest in m2 Lease Funds		-			2,132,415			-			-			2,132,415
Stock compensation expense		-			187,569			-			-			187,569
Tax benefit of nonqualified stock options exercised		-			87,858			-			-			87,858
Restricted stock awards - 500 shares of common stock		(500	)		500			-			-			-
Balance June 30, 2016	$	13,057,368		$	155,453,781		$	105,024,027		$	1,582,215		$	275,117,391
Net income		-			-			6,107,501			-			6,107,501
Other comprehensive loss, net of tax		-			-			-			(361,184	)		(361,184	)
Common cash dividends declared, $0.04 per share		-			-			(521,384	)		-			(521,384	)
Proceeds from issuance of 4,085 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan		4,085			85,217			-			-			89,302
Proceeds from issuance of 14,692 shares of common stock as a result of stock options exercised		14,692			173,890			-			-			188,582
Stock compensation expense		-			190,211			-			-			190,211
Tax benefit of nonqualified stock options exercised		-			72,694			-			-			72,694
Exchange of 838 shares of common stock in connection with stock options exercised		(838	)		(25,115	)		-			-			(25,953	)
Balance September 30, 2016	$	13,075,307		$	155,950,678		$	110,610,144		$	1,221,031		$	280,857,160

See Notes to Consolidated Financial Statements (Unaudited)

8

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2017 and 2016

	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	25,804,917		$	19,157,457
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,810,971			2,422,257
Provision for loan/lease losses		6,214,538			4,878,821
Stock-based compensation expense		857,666			760,541
Deferred compensation expense accrued		1,098,741			910,439
Losses (gains) on other real estate owned, net		(154,743	)		130,280
Amortization of premiums on securities, net		1,330,946			968,553
Securities losses (gains), net		25,124			(4,628,283	)
Loans originated for sale		(40,423,117	)		(57,160,485	)
Proceeds on sales of loans		42,705,325			59,838,717
Gains on sales of residential real estate loans		(307,360	)		(288,904	)
Gains on sales of government guaranteed portions of loans		(1,129,668	)		(2,701,203	)
Losses on debt extinguishment, net		-			4,220,507
Amortization of core deposit intangible		692,600			210,469
Accretion of acquisition fair value adjustments, net		(4,063,435	)		(690,379	)
Increase in cash value of bank-owned life insurance		(1,357,049	)		(1,324,380	)
Decrease (increase) in other assets		1,666,921			(2,480,461	)
Increase (decrease) in other liabilities		(8,610,333	)		1,614,477
Net cash provided by operating activities	$	27,162,044		$	25,838,423
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in federal funds sold		1,689,000			(474,000	)
Net decrease (increase) in interest-bearing deposits at financial institutions		22,727,542			(23,981,295	)
Proceeds from sales of other real estate owned		829,213			1,913,775
Activity in securities portfolio:
Purchases		(103,509,208	)		(111,622,489	)
Calls, maturities and redemptions		40,435,714			109,421,584
Paydowns		30,123,674			21,939,878
Sales		21,969,870			87,772,898
Activity in restricted investment securities:
Purchases		(3,788,275	)		(25,700	)
Redemptions		199,900			1,375,100
Net increase in loans/leases originated and held for investment		(269,891,345	)		(144,605,204	)
Purchase of premises and equipment		(4,045,217	)		(3,871,166	)
Net cash paid for Community State Bank acquisition		-			(69,905,355	)
Cash prepaid for Guaranty Bank acquisition		(7,803,420	)		-
Net cash used in investing activities	$	(271,062,552	)	$	(132,061,974	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts		225,109,315			227,918,002
Net decrease in short-term borrowings		(23,960,582	)		(84,647,299	)
Activity in Federal Home Loan Bank advances:
Term advances		1,600,000			-
Calls and maturities		(6,000,000	)		(19,000,000	)
Net change in short-term and overnight advances		35,955,000			1,300,000
Prepayments		-			(10,524,197	)
Activity in other borrowings:
Proceeds from other borrowings		7,000,000			35,000,000
Calls, maturities and scheduled principal payments		(9,500,000	)		-
Prepayments		-			(50,320,407	)
Retirement of junior subordinated debentures		-			(3,955,000	)
Payment of cash dividends on common stock		(1,836,150	)		(1,460,157	)
Net proceeds from the common stock offering, 1,215,000 shares issued		-			29,828,916
Proceeds from issuance of common stock, net		1,237,492			1,554,506
Net cash provided by financing activities	$	229,605,075		$	125,694,364
Net increase (decrease) in cash and due from banks		(14,295,433	)		19,470,813
Cash and due from banks, beginning		70,569,993			41,742,321
Cash and due from banks, ending	$	56,274,560		$	61,213,134

(Continued)

9

QCR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - continued

Nine Months Ended September 30, 2017 and 2016

	2017			2016
Supplemental disclosure of cash flow information, cash payments for:
Interest	$	13,140,273		$	9,081,850
Income/franchise taxes	$	10,881,610		$	9,487,002
Supplemental schedule of noncash investing activities:
Change in accumulated other comprehensive income, unrealized gains on securities available for sale and derivative instruments, net	$	1,387,055		$	3,344,860
Exchange of shares of common stock in connection with payroll taxes for restricted stock and in connection with stock options exercised	$	(317,614	)	$	(477,387	)
Tax benefit of nonqualified stock options exercised	$	N/A		$	183,060
Transfers of loans to other real estate owned	$	286,212		$	51,000
Due from broker for sales of securities	$	-		$	32,078,011
Due to broker for purchases of securities	$	1,300,000		$	15,190,000
Due to counterparties for prepayment of FHLB advances and other borrowings	$	-		$	(24,575,903	)
Dividends payable	$	658,110		$	521,384
Tax basis adjustment related to the acquisition of noncontrolling interest in m2 Lease Funds	$	-		$	2,132,415
Increase in the fair value of interest rate swap assets and liabilities	$	264,721		$	6,341,738
Supplemental disclosure of cash flow information for Community State Bank acquisition:
Fair value of assets acquired:
Cash and due from banks *	$	-		$	10,094,645
Federal funds sold		-			698,000
Interest-bearing deposits at financial institutions		-			14,730,157
Securities		-			102,640,029
Loans/leases receivable held for investment, net		-			419,029,277
Premises and equipment, net		-			20,684,880
Core deposit intangible		-			6,352,653
Restricted investment securities		-			1,512,900
Other real estate owned		-			650,000
Other assets		-			4,763,224
Total assets acquired	$	-		$	581,155,765
Fair value of liabilities assumed:
Deposits	$	-		$	486,298,262
FHLB advances		-			20,368,877
Other liabilities		-			4,897,564
Total liabilities assumed	$	-		$	511,564,703
Net assets acquired	$	-		$	69,591,062
Consideration paid:
Cash paid *	$	-		$	80,000,000
Total consideration paid	$	-		$	80,000,000
Goodwill	$	-		$	10,408,938

* Net cash paid at closing totaled $69,905,355

See Notes to Consolidated Financial Statements (Unaudited)

10

Part I

Item 1

QCR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2017

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, 2016, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2017. 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 GAAP for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Such information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. Any differences appearing between the numbers presented in financial statements and management’s discussion and analysis are due to rounding. The results of the interim period ended September 30, 2017, are not necessarily indicative of the results expected for the year ending December 31, 2017, or for any other period.

The acronyms and abbreviations identified below are used throughout this Quarterly Report on Form 10-Q. It may be helpful to refer back to this page as you read this report.

Allowance: Allowance for estimated losses on loans/leases	Guaranty Bank: Guaranty Bank and Trust Company
AOCI: Accumulated other comprehensive income (loss)	HTM: Held to maturity
AFS: Available for sale	m2: m2 Lease Funds, LLC
ASC: Accounting Standards Codification	NIM: Net interest margin
ASU: Accounting Standards Update	NPA: Nonperforming asset
BOLI: Bank-owned life insurance	NPL: Nonperforming loan
Caps: Interest rate cap derivatives	OREO: Other real estate owned
Community National: Community National Bancorporation	OTTI: Other-than-temporary impairment
CRBT: Cedar Rapids Bank & Trust Company	PCI: Purchased credit impaired
CRE: Commercial real estate	Provision: Provision for loan/lease losses
CSB: Community State Bank	QCBT: Quad City Bank & Trust Company
C&I: Commercial and industrial	RB&T: Rockford Bank & Trust Company
Dodd-Frank Act: Dodd-Frank Wall Street Reform and	ROAA: Return on Average Assets
Consumer Protection Act	SBA: U.S. Small Business Administration
EPS: Earnings per share	SEC: Securities and Exchange Commission
Exchange Act: Securities Exchange Act of 1934, as amended	TA: Tangible assets
FASB: Financial Accounting Standards Board	TCE: Tangible common equity
FDIC: Federal Deposit Insurance Corporation	TDRs: Troubled debt restructurings
FHLB: Federal Home Loan Bank	TEY: Tax equivalent yield
FRB: Federal Reserve Bank of Chicago	The Company: QCR Holdings, Inc.
GAAP: Generally Accepted Accounting Principles	USDA: U.S. Department of Agriculture
Guaranty: Guaranty Bankshares, Ltd.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include four commercial banks: QCBT, CRBT, CSB and RB&T. All are state-chartered commercial banks and all are members of the Federal Reserve system. The Company also engages in direct financing lease contracts through m2, a wholly-owned subsidiary of QCBT. All material intercompany transactions and balances have been eliminated in consolidation.

The acquisition of CSB occurred on August 31, 2016; therefore, the financial results of CSB for the periods since acquisition are included in this report.

On October 2, 2017, the Company announced the completion of its previously announced acquisition of Guaranty Bank, headquartered in Cedar Rapids, Iowa, from Guaranty. The financial results of Guaranty Bank are not included in this report because the closing was effective October 1, 2017. See Note 8 to the Consolidated Financial Statements for additional information about the acquisition.

11

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Recent accounting developments: In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was originally effective for the Company on January 1, 2017; however, FASB issued ASU 2015-14 which defers the effective date in order to provide additional time for both public and private entities to evaluate the impact. ASU 2014-09 will now be effective for the Company on January 1, 2018 and it is not expected to have a significant impact on the Company’s consolidated financial statements.

In January 2016, FASB issued ASU 2016-01, Financial Instruments–Overall. ASU 2016-01 makes targeted adjustments to GAAP by eliminating the AFS classification for equity securities and requiring equity investments to be measured at fair value with changes in fair value recognized in net income. The standard also requires public business entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. The standard clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to AFS securities in combination with the entity’s other deferred tax assets. It also requires an entity to present separately (within other comprehensive income) the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Additionally, the standard eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and it is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. Under ASU 2016-02, lessees will be required to recognize a lease liability measured on a discounted basis and a right-of-use asset for all leases (with the exception of short-term leases). Lessor accounting is largely unchanged under ASU 2016-02. However, the definition of initial direct costs was updated to include only initial direct costs that are considered incremental. This change in definition will change the manner in which the Company recognizes the costs associated with originating leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company is in the process of analyzing the impact of adoption on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses. Under the standard, assets measured at amortized costs (including loans, leases and AFS securities) will be presented at the net amount expected to be collected. Rather than the “incurred” model that is currently being utilized, the standard will require the use of a forward-looking approach to recognizing all expected credit losses at the beginning of an asset’s life. For public companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Companies may choose to early adopt for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of analyzing the impact of adoption on the Company’s consolidated financial statements.

Effective January 1, 2017, the Company adopted ASU 2016-09, Compensation – Stock Compensation. Under the standard, the excess tax benefit (deficiency) related to stock options exercised and restricted stock awards vested is recorded as an adjustment to income tax expense. In the past, this tax benefit (deficiency) was recorded directly to equity. This change in accounting resulted in $191 thousand of reduced income tax in the third quarter of 2017 and $814 thousand of reduced income tax expense in the first nine months of 2017.

12

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of September 30, 2017 and December 31, 2016 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2017:
Securities HTM:
Municipal securities	$	322,931,227	$	2,084,997	$	(2,629,646	)	$	322,386,578
Other securities		1,050,000		-		-			1,050,000
	$	323,981,227	$	2,084,997	$	(2,629,646	)	$	323,436,578
Securities AFS:
U.S. govt. sponsored agency securities	$	39,340,306	$	129,768	$	(129,906	)	$	39,340,168
Residential mortgage-backed and related securities		160,329,128		266,806		(1,627,425	)		158,968,509
Municipal securities		56,621,412		435,356		(293,708	)		56,763,060
Other securities		4,077,128		826,135		(20,578	)		4,882,685
	$	260,367,974	$	1,658,065	$	(2,071,617	)	$	259,954,422
December 31, 2016:
Securities HTM:
Municipal securities	$	321,859,056	$	2,200,577	$	(4,694,734	)	$	319,364,899
Other securities		1,050,000		-		-			1,050,000
	$	322,909,056	$	2,200,577	$	(4,694,734	)	$	320,414,899
Securities AFS:
U.S. govt. sponsored agency securities	$	46,281,306	$	132,886	$	(330,585	)	$	46,083,607
Residential mortgage-backed and related securities		150,465,222		174,993		(2,938,088	)		147,702,127
Municipal securities		52,816,541		425,801		(637,916	)		52,604,426
Other securities		4,046,332		703,978		(27,331	)		4,722,979
	$	253,609,401	$	1,437,658	$	(3,933,920	)	$	251,113,139

13

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The Company’s HTM municipal securities consist largely of private issues of municipal debt. The large majority of the municipalities are located within the Midwest. 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 private 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 September 30, 2017 and December 31, 2016, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2017:
Securities HTM:
Municipal securities	$	17,779,999	$	(254,147	)	$	68,663,362	$	(2,375,499	)	$	86,443,361	$	(2,629,646	)
Securities AFS:
U.S. govt. sponsored agency securities	$	23,607,646	$	(129,906	)	$	-	$	-		$	23,607,646	$	(129,906	)
Residential mortgage-backed and related securities		111,996,030		(1,255,971	)		12,648,688		(371,454	)		124,644,718		(1,627,425	)
Municipal securities		18,776,501		(169,253	)		12,872,616		(124,455	)		31,649,117		(293,708	)
Other securities		928,772		(20,578	)		-		-			928,772		(20,578	)
	$	155,308,949	$	(1,575,708	)	$	25,521,304	$	(495,909	)	$	180,830,253	$	(2,071,617	)
December 31, 2016:
Securities HTM:
Municipal securities	$	122,271,533	$	(4,076,647	)	$	13,010,803	$	(618,087	)	$	135,282,336	$	(4,694,734	)
Securities AFS:
U.S. govt. sponsored agency securities	$	21,788,139	$	(257,640	)	$	5,499,012	$	(72,945	)	$	27,287,151	$	(330,585	)
Residential mortgage-backed and related securities		121,506,582		(2,641,664	)		7,437,615		(296,424	)		128,944,197		(2,938,088	)
Municipal securities		34,152,822		(618,462	)		338,099		(19,454	)		34,490,921		(637,916	)
Other securities		3,177,414		(27,331	)		-		-			3,177,414		(27,331	)
	$	180,624,957	$	(3,545,097	)	$	13,274,726	$	(388,823	)	$	193,899,683	$	(3,933,920	)

At September 30, 2017, the investment portfolio included 567 securities. Of this number, 203 securities were in an unrealized loss position. The aggregate losses of these securities totaled approximately 0.8% of the total amortized cost of the portfolio. Of these 203 securities, 80 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 lacks the intent to sell these securities and it is not more-likely-than-not that the Company will be required to sell these debt securities before their anticipated recovery. At September 30, 2017 and December 31, 2016, equity securities represented less than 1% of the total portfolio.

The Company did not recognize OTTI on any debt or equity securities for the three or nine months ended September 30, 2017 and 2016.   

14

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

All sales of securities for the three and nine months ended September 30, 2017 and 2016 were from securities identified as AFS. Information on proceeds received, as well as pre-tax gross gains and losses from sales on those securities are as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Proceeds from sales of securities*	$	8,415,795		$	58,775,764		$	21,969,870		$	119,850,909
Pre-tax gross gains from sales of securities		6,312			4,281,828			65,880			4,815,373
Pre-tax gross losses from sales of securities		(69,900	)		(30,055	)		(91,004	)		(187,090	)

* Proceeds from sales of securities for the nine months ended September 30, 2016 includes $32.1 million receivable from the broker for the sale of securities

The amortized cost and fair value of securities as of September 30, 2017 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 prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following table. “Other securities” AFS are excluded from the maturity categories as there is no fixed maturity date for those securities.

	Amortized Cost		Fair Value
Securities HTM:
Due in one year or less	$	2,940,492	$	2,940,378
Due after one year through five years		18,268,264		18,374,059
Due after five years		302,772,471		302,122,141
	$	323,981,227	$	323,436,578
Securities AFS:
Due in one year or less	$	3,135,008	$	3,143,223
Due after one year through five years		26,545,903		26,712,930
Due after five years		66,280,807		66,247,075
		95,961,718		96,103,228
Residential mortgage-backed and related securities		160,329,128		158,968,509
Other securities		4,077,128		4,882,685
	$	260,367,974	$	259,954,422

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. These callable securities are summarized as follows:

	Amortized Cost		Fair Value
Securities HTM:
Municipal securities	$	170,900,193	$	171,633,005
Securities AFS:
U.S. govt. sponsored agency securities		5,048,652		5,033,292
Municipal securities		45,727,004		45,640,630
	$	50,775,656	$	50,673,922

15

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

As of September 30, 2017, the Company’s municipal securities portfolios were comprised of general obligation bonds issued by 119 issuers with fair values totaling $100.4 million and revenue bonds issued by 132 issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling $278.7 million. The Company held investments in general obligation bonds in 21 states, including six states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 14 states, including six states in which the aggregate fair value exceeded $5.0 million.

As of December 31, 2016, the Company’s municipal securities portfolios were comprised of general obligation bonds issued by 116 issuers with fair values totaling $116.5 million and revenue bonds issued by 120 issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling $255.5 million. The Company held investments in general obligation bonds in 21 states, including five states in which the aggregate fair value exceeded $5.0 million. The Company held investments in revenue bonds in 12 states, including six states in which the aggregate fair value exceeded $5.0 million.

The amortized cost and fair values of the Company’s portfolio of general obligation bonds are summarized in the following tables by the issuer’s state:

September 30, 2017:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
North Dakota		7	$	21,625,068	$	21,593,895	$	3,084,842
Illinois		21		18,319,644		18,501,854		881,041
Iowa		21		17,990,978		17,993,895		856,852
Missouri		16		8,956,396		8,983,511		561,469
Ohio		9		8,289,069		8,180,432		908,937
Texas		10		6,609,101		6,543,660		654,366
Other		35		18,520,725		18,626,763		532,193
Total general obligation bonds		119	$	100,310,981	$	100,424,010	$	843,899

December 31, 2016:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Iowa		27	$	32,258,612	$	32,231,936	$	1,193,775
Illinois		19		29,214,559		29,308,438		1,542,549
North Dakota		7		22,169,050		21,499,075		3,071,296
Missouri		14		8,291,192		8,323,245		594,518
Ohio		8		6,790,398		6,651,897		831,487
Other		41		18,481,496		18,458,044		450,196
Total general obligation bonds		116	$	117,205,307	$	116,472,635	$	1,004,074

16

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The amortized cost and fair values of the Company’s portfolio of revenue bonds are summarized in the following tables by the issuer’s state:

September 30, 2017:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Missouri		55	$	107,274,712	$	107,108,520	$	1,947,428
Iowa		28		62,468,124		62,615,875		2,236,281
Indiana		23		50,080,705		49,560,095		2,154,787
Ohio		5		19,674,376		19,523,478		3,904,696
Kansas		6		12,877,308		12,879,871		2,146,645
North Dakota		5		11,496,420		11,471,544		2,294,309
Other		10		15,370,013		15,566,245		1,556,625
Total revenue bonds		132	$	279,241,658	$	278,725,628	$	2,111,558

December 31, 2016:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Missouri		47	$	90,784,441	$	89,664,013	$	1,907,745
Iowa		31		70,788,393		71,142,393		2,294,916
Indiana		22		47,994,737		47,582,138		2,162,824
Kansas		6		13,476,366		13,427,491		2,237,915
North Dakota		4		8,089,067		7,796,381		1,949,095
Ohio		3		13,650,000		13,405,222		4,468,407
Other		7		12,687,286		12,479,052		1,782,722
Total revenue bonds		120	$	257,470,290	$	255,496,690	$	2,129,139

Both general obligation and revenue bonds are diversified across many issuers. As of September 30, 2017 and December 31, 2016, the Company did not hold general obligation or revenue bonds of any single issuer, the aggregate book or market value of which exceeded 5% of the Company’s stockholders’ equity. Of the general obligation and revenue bonds in the Company’s portfolio, the majority are unrated bonds that represent small, private issuances. All unrated bonds were underwritten according to loan underwriting standards and have an average loan risk rating of 2, indicating very high quality. Additionally, many of these bonds are funding essential municipal services such as water, sewer, education, and medical facilities.

The Company’s municipal securities are owned by each of the four charters, whose investment policies set forth limits for various subcategories within the municipal securities portfolio. Each charter is monitored individually, and as of September 30, 2017, all were well within policy limitations approved by the board of directors. Policy limits are calculated as a percentage of each charter’s total risk-based capital.

As of September 30, 2017, the Company’s standard monitoring of its municipal securities portfolio had not uncovered any facts or circumstances resulting in significantly different credit ratings than those assigned by a nationally recognized statistical rating organization, or in the case of unrated bonds, the rating assigned using the credit underwriting standards.

17

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 3 – LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of September 30, 2017 and December 31, 2016 is presented as follows:

	As of September 30,			As of December 31,
	2017			2016
C&I loans***	$	1,034,530,786		$	827,637,263
CRE loans
Owner-occupied CRE		327,144,766			332,387,621
Commercial construction, land development, and other land		168,992,704			165,149,491
Other non owner-occupied CRE		661,718,193			595,921,748
Direct financing leases *		147,062,893			165,419,360
Residential real estate loans **		239,957,916			229,233,104
Installment and other consumer loans		89,605,855			81,665,695
		2,669,013,113			2,397,414,282
Plus deferred loan/lease origination costs, net of fees		7,741,698			8,072,703
		2,676,754,811			2,405,486,985
Less allowance		(34,982,341	)		(30,757,448	)
	$	2,641,772,470		$	2,374,729,537
* Direct financing leases:
Net minimum lease payments to be received	$	162,728,461		$	184,274,802
Estimated unguaranteed residual values of leased assets		1,085,154			1,085,154
Unearned lease/residual income		(16,750,722	)		(19,940,596	)
		147,062,893			165,419,360
Plus deferred lease origination costs, net of fees		4,800,719			5,881,778
		151,863,612			171,301,138
Less allowance		(2,652,758	)		(3,111,898	)
	$	149,210,854		$	168,189,240

*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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

**Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

*** Includes equipment financing agreements outstanding at m2 totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

18

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Changes in accretable yield for acquired loans were as follows:

	Three months ended September 30, 2017									Nine months ended September 30, 2017
	PCI			Performing						PCI			Performing
	Loans			Loans			Total			Loans			Loans			Total
Balance at the beginning of the period	$	(83,860	)	$	(5,325,471	)	$	(5,409,331	)	$	(194,306	)	$	(9,115,614	)	$	(9,309,920	)
Accretion recognized		25,158			658,547			683,705			135,604			4,448,690			4,584,294
Balance at the end of the period	$	(58,702	)	$	(4,666,924	)	$	(4,725,626	)	$	(58,702	)	$	(4,666,924	)	$	(4,725,626	)

	Three months ended September 30, 2016									Nine months ended September 30, 2016
	PCI			Performing						PCI			Performing
	Loans			Loans			Total			Loans			Loans			Total
Balance at the beginning of the period	$	-		$	-		$	-		$	-		$	-		$	-
Discount added at acquisition		(277,579	)		(11,916,009	)		(12,193,588	)		(277,579	)		(11,916,009	)		(12,193,588	)
Accretion recognized		29,317			366,293			395,610			29,317			366,293			395,610
Balance at the end of the period	$	(248,262	)	$	(11,549,716	)	$	(11,797,978	)	$	(248,262	)	$	(11,549,716	)	$	(11,797,978	)

The aging of the loan/lease portfolio by classes of loans/leases as of September 30, 2017 and December 31, 2016 is presented as follows:

	As of September 30, 2017
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
C&I	$	1,031,800,612		$	1,149,469		$	-		$	12,892		$	1,567,813		$	1,034,530,786
CRE
Owner-Occupied CRE		326,879,997			109,749			-			-			155,020			327,144,766
Commercial Construction, Land Development, and Other Land		164,647,962			-			-			-			4,344,742			168,992,704
Other Non Owner-Occupied CRE		650,410,884			325,464			-			-			10,981,845			661,718,193
Direct Financing Leases		142,413,187			1,558,490			852,844			-			2,238,372			147,062,893
Residential Real Estate		237,860,369			116,095			755,919			307,676			917,857			239,957,916
Installment and Other Consumer		89,153,013			73,731			39,311			102,312			237,488			89,605,855
	$	2,643,166,024		$	3,332,998		$	1,648,074		$	422,880		$	20,443,137		$	2,669,013,113
As a percentage of total loan/lease portfolio		99.03	%		0.12	%		0.06	%		0.02	%		0.77	%		100.00	%

	As of December 31, 2016
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
C&I	$	821,637,507		$	1,455,185		$	10,551		$	346,234		$	4,187,786		$	827,637,263
CRE
Owner-Occupied CRE		331,812,571			-			242,902			-			332,148			332,387,621
Commercial Construction, Land Development, and Other Land		160,760,034			35,638			-			-			4,353,819			165,149,491
Other Non Owner-Occupied CRE		594,384,926			100,673			-			-			1,436,149			595,921,748
Direct Financing Leases		161,452,627			730,627			574,700			215,225			2,446,181			165,419,360
Residential Real Estate		227,023,552			473,478			365,581			294,854			1,075,639			229,233,104
Installment and Other Consumer		81,199,766			204,973			63,111			110,501			87,344			81,665,695
	$	2,378,270,983		$	3,000,574		$	1,256,845		$	966,814		$	13,919,066		$	2,397,414,282
As a percentage of total loan/lease portfolio		99.20	%		0.13	%		0.05	%		0.04	%		0.58	%		100.00	%

19

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NPLs by classes of loans/leases as of September 30, 2017 and December 31, 2016 are presented as follows:

	As of September 30, 2017
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	12,892	$	1,567,813	$	5,298,358	$	6,879,063		24.19	%
CRE
Owner-Occupied CRE		-		155,020		-		155,020		0.55	%
Commercial Construction, Land Development, and Other Land		-		4,344,742		-		4,344,742		15.28	%
Other Non Owner-Occupied CRE		-		10,981,845		-		10,981,845		38.63	%
Direct Financing Leases		-		2,238,372		1,899,707		4,138,079		14.56	%
Residential Real Estate		307,676		917,857		349,538		1,575,071		5.54	%
Installment and Other Consumer		102,312		237,488		15,218		355,018		1.25	%
	$	422,880	$	20,443,137	$	7,562,821	$	28,428,838		100.00	%

*Nonaccrual loans/leases included $2,291,666 of TDRs, including $258,598 in C&I loans, $1,198,439 in CRE loans, $607,882 in direct financing leases, $177,606 in construction loans, $40,405 in residential real estate loans, and $8,736 in installment loans.

	As of December 31, 2016
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	346,234	$	4,187,786	$	4,733,997	$	9,268,017		43.65	%
CRE
Owner-Occupied CRE		-		332,148		-		332,148		1.56	%
Commercial Construction, Land Development, and Other Land		-		4,353,819		-		4,353,819		20.51	%
Other Non Owner-Occupied CRE		-		1,436,149		-		1,436,149		6.77	%
Direct Financing Leases		215,225		2,446,181		1,008,244		3,669,650		17.28	%
Residential Real Estate		294,854		1,075,639		585,541		1,956,034		9.21	%
Installment and Other Consumer		110,501		87,344		18,746		216,591		1.02	%
	$	966,814	$	13,919,066	$	6,346,528	$	21,232,408		100.00	%

**Nonaccrual loans/leases included $2,300,479 of TDRs, including $48,501 in C&I loans, $1,380,047 in CRE loans, $816,149 in direct financing leases, $43,579 in residential real estate loans, and $12,203 in installment loans.

20

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Changes in the allowance by portfolio segment for the three and nine months ended September 30, 2017 and 2016, respectively, are presented as follows:

	Three Months Ended September 30, 2017
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	14,207,733		$	12,999,233	$	2,638,301		$	2,430,454		$	1,080,911		$	33,356,632
Provisions (credits) charged to expense		469,977			1,349,393		179,190			(11,654	)		99,530			2,086,436
Loans/leases charged off		(338,361	)		-		(268,669	)		(25,822	)		(16,872	)		(649,724	)
Recoveries on loans/leases previously charged off		63,366			10,748		103,936			6,000			4,947			188,997
Balance, ending	$	14,402,715		$	14,359,374	$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341

	Three Months Ended September 30, 2016
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,724,506		$	10,987,062	$	3,226,194		$	2,014,987		$	1,144,741		$	28,097,490
Provisions charged to expense		859,031			8,962		641,435			79,221			19,337			1,607,986
Loans/leases charged off		(96,330	)		-		(847,668	)		(38,554	)		(4,530	)		(987,082	)
Recoveries on loans/leases previously charged off		70,759			6,500		22,001			-			9,181			108,441
Balance, ending	$	11,557,966		$	11,002,524	$	3,041,962		$	2,055,654		$	1,168,729		$	28,826,835

	Nine Months Ended September 30, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Provisions charged to expense		2,345,121			2,655,521			981,877			148,017			84,002			6,214,538
Loans/leases charged off		(630,704	)		(10,375	)		(1,611,432	)		(101,006	)		(40,436	)		(2,393,953	)
Recoveries on loans/leases previously charged off		143,188			43,619			170,415			9,623			37,463			404,308
Balance, ending	$	14,402,715		$	14,359,374		$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341

	Nine Months Ended September 30, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,484,080		$	9,375,117		$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906
Provisions (credits) charged to expense		1,357,262			1,644,008			1,580,677			336,865			(39,991	)		4,878,821
Loans/leases charged off		(388,879	)		(23,101	)		(1,983,322	)		(72,261	)		(22,018	)		(2,489,581	)
Recoveries on loans/leases previously charged off		105,503			6,500			49,519			900			134,267			296,689
Balance, ending	$	11,557,966		$	11,002,524		$	3,041,962		$	2,055,654		$	1,168,729		$	28,826,835

21

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

The allowance by impairment evaluation and by portfolio segment as of September 30, 2017 and December 31, 2016 is presented as follows:

	As of September 30, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,062,424		$	2,374,308		$	652,775		$	261,097		$	24,487		$	4,375,091
Allowance for nonimpaired loans/leases		13,340,291			11,985,066			1,999,983			2,137,881			1,144,029			30,607,250
	$	14,402,715		$	14,359,374		$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341
Impaired loans/leases	$	6,567,909		$	15,588,929		$	3,952,190		$	1,328,160		$	191,941		$	27,629,129
Nonimpaired loans/leases		1,027,962,877			1,142,266,734			143,110,703			238,629,756			89,413,914			2,641,383,984
	$	1,034,530,786		$	1,157,855,663		$	147,062,893		$	239,957,916		$	89,605,855		$	2,669,013,113
Allowance as a percentage of impaired loans/leases		16.18	%		15.23	%		16.52	%		19.66	%		12.76	%		15.84	%
Allowance as a percentage of nonimpaired loans/leases		1.30	%		1.05	%		1.40	%		0.90	%		1.28	%		1.16	%
Total allowance as a percentage of total loans/leases		1.39	%		1.24	%		1.80	%		1.00	%		1.30	%		1.31	%

	As of December 31, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,771,537		$	693,919		$	848,919		$	289,112		$	39,481		$	3,642,968
Allowance for nonimpaired loans/leases		10,773,573			10,976,690			2,262,979			2,053,232			1,048,006			27,114,480
	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Impaired loans/leases	$	8,936,451		$	6,112,114		$	3,256,264		$	1,661,180		$	106,090		$	20,072,099
Nonimpaired loans/leases		818,700,812			1,087,346,746			162,163,096			227,571,924			81,559,605			2,377,342,183
	$	827,637,263		$	1,093,458,860		$	165,419,360		$	229,233,104		$	81,665,695		$	2,397,414,282
Allowance as a percentage of impaired loans/leases		19.82	%		11.35	%		26.07	%		17.40	%		37.21	%		18.15	%
Allowance as a percentage of nonimpaired loans/leases		1.32	%		1.01	%		1.40	%		0.90	%		1.28	%		1.14	%
Total allowance as a percentage of total loans/leases		1.52	%		1.07	%		1.88	%		1.02	%		1.33	%		1.28	%

22

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 nine months ended September 30, 2017 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:
C&I	$	1,414,985	$	1,425,422	$	-	$	1,129,388	$	42,567	$	42,567
CRE
Owner-Occupied CRE		107,322		107,322		-		26,831		6,783		6,783
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,198,439		1,198,439		-		1,178,032		-		-
Direct Financing Leases		2,971,485		2,971,485		-		2,708,433		97,603		97,603
Residential Real Estate		711,098		785,877		-		619,466		1,161		1,161
Installment and Other Consumer		137,704		137,704		-		124,530		-		-
	$	6,541,033	$	6,626,249	$	-	$	5,786,680	$	148,114	$	148,114
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,152,924	$	5,156,763	$	1,062,424	$	4,994,557	$	150,848	$	150,848
CRE
Owner-Occupied CRE		155,020		155,020		51,520		238,584		-		-
Commercial Construction, Land Development, and Other Land		4,344,742		4,344,742		818,536		4,348,711		-		-
Other Non Owner-Occupied CRE		9,783,406		9,783,406		1,504,252		2,464,981		-		-
Direct Financing Leases		980,705		980,705		652,775		736,537		-		-
Residential Real Estate		617,062		617,062		261,097		496,243		12,830		12,830
Installment and Other Consumer		54,237		54,237		24,487		33,162		317		317
	$	21,088,096	$	21,091,935	$	4,375,091	$	13,312,775	$	163,995	$	163,995
Total Impaired Loans/Leases:
C&I	$	6,567,909	$	6,582,185	$	1,062,424	$	6,123,945	$	193,415	$	193,415
CRE
Owner-Occupied CRE		262,342		262,342		51,520		265,415		6,783		6,783
Commercial Construction, Land Development, and Other Land		4,344,742		4,344,742		818,536		4,348,711		-		-
Other Non Owner-Occupied CRE		10,981,845		10,981,845		1,504,252		3,643,013		-		-
Direct Financing Leases		3,952,190		3,952,190		652,775		3,444,970		97,603		97,603
Residential Real Estate		1,328,160		1,402,939		261,097		1,115,709		13,991		13,991
Installment and Other Consumer		191,941		191,941		24,487		157,692		317		317
	$	27,629,129	$	27,718,184	$	4,375,091	$	19,099,455	$	312,109	$	312,109

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

23

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 September 30, 2017 and 2016, respectively, are presented as follows:

	Three Months Ended September 30, 2017						Three Months Ended September 30, 2016
Classes of Loans/Leases	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	1,301,977	$	25,816	$	25,816	$	1,677,527	$	3,301	$	3,301
CRE
Owner-Occupied CRE		53,661		6,783		6,783		767,032		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,173,629		-		-		1,969,034		-		-
Direct Financing Leases		2,820,518		39,759		39,759		2,008,095		21,095		21,095
Residential Real Estate		690,791		-		-		1,481,340		941		941
Installment and Other Consumer		139,533		-		-		322,738		-		-
	$	6,180,109	$	72,358	$	72,358	$	8,225,766	$	25,337	$	25,337
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,157,671	$	53,127	$	53,127	$	4,188,621	$	-	$	-
CRE
Owner-Occupied CRE		155,020		-		-		363,911		-		-
Commercial Construction, Land Development, and Other Land		4,345,880		-		-		187,831		-		-
Other Non Owner-Occupied CRE		4,929,960		-		-		135,141		-		-
Direct Financing Leases		893,042		-		-		793,769		-		-
Residential Real Estate		550,476		5,601		5,601		807,827		1,503		1,503
Installment and Other Consumer		48,164		99		99		160,301		1,458		1,458
	$	16,080,213	$	58,827	$	58,827	$	6,637,401	$	2,961	$	2,961
Total Impaired Loans/Leases:
C&I	$	6,459,648	$	78,943	$	78,943	$	5,866,148	$	3,301	$	3,301
CRE
Owner-Occupied CRE		208,681		6,783		6,783		1,130,943		-		-
Commercial Construction, Land Development, and Other Land		4,345,880		-		-		187,831		-		-
Other Non Owner-Occupied CRE		6,103,589		-		-		2,104,175		-		-
Direct Financing Leases		3,713,560		39,759		39,759		2,801,864		21,095		21,095
Residential Real Estate		1,241,267		5,601		5,601		2,289,167		2,444		2,444
Installment and Other Consumer		187,697		99		99		483,039		1,458		1,458
	$	22,260,322	$	131,185	$	131,185	$	14,863,167	$	28,298	$	28,298

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

24

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Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Loans/leases, by classes of financing receivable, considered to be impaired as of December 31, 2016 are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	841,895	$	951,600	$	-
CRE
Owner-Occupied CRE		-		93,774		-
Commercial Construction, Land Development, and Other Land		-		-		-
Other Non Owner-Occupied CRE		1,196,549		1,196,549		-
Direct Financing Leases		1,690,121		1,690,121		-
Residential Real Estate		853,294		892,495		-
Installment and Other Consumer		55,734		55,734		-
	$	4,637,593	$	4,880,273	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	8,094,556	$	8,098,395	$	1,771,537
CRE
Owner-Occupied CRE		322,148		322,148		57,398
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,817		577,611
Other Non Owner-Occupied CRE		239,600		239,600		58,910
Direct Financing Leases		1,566,143		1,566,143		848,919
Residential Real Estate		807,886		882,018		289,112
Installment and Other Consumer		50,356		50,356		39,481
	$	15,434,506	$	15,512,477	$	3,642,968
Total Impaired Loans/Leases:
C&I	$	8,936,451	$	9,049,995	$	1,771,537
CRE
Owner-Occupied CRE		322,148		415,922		57,398
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,817		577,611
Other Non Owner-Occupied CRE		1,436,149		1,436,149		58,910
Direct Financing Leases		3,256,264		3,256,264		848,919
Residential Real Estate		1,661,180		1,774,513		289,112
Installment and Other Consumer		106,090		106,090		39,481
	$	20,072,099	$	20,392,750	$	3,642,968

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

25

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

For C&I and CRE loans, the Company’s credit quality indicator consists of 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 September 30, 2017 and December 31, 2016:

	As of September 30, 2017
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	1,000,751,792	$	313,179,076	$	161,772,865	$	639,045,018	$	2,114,748,751		96.45	%
Special Mention (Rating 6)		9,694,041		9,155,153		2,167,999		6,297,895		27,315,088		1.25	%
Substandard (Rating 7)		24,084,953		4,810,537		5,051,840		16,375,280		50,322,610		2.30	%
Doubtful (Rating 8)		-		-		-		-		-		-
	$	1,034,530,786	$	327,144,766	$	168,992,704	$	661,718,193	$	2,192,386,449		100.00	%

	As of September 30, 2017
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	142,924,814	$	238,382,845	$	89,250,837	$	470,558,496		98.73	%
Nonperforming		4,138,079		1,575,071		355,018		6,068,168		1.27	%
	$	147,062,893	$	239,957,916	$	89,605,855	$	476,626,664		100.00	%

	As of December 31, 2016
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	796,568,451	$	314,447,662	$	158,108,465	$	582,854,048	$	1,851,978,626		96.40	%
Special Mention (Rating 6)		6,305,772		7,559,380		1,780,000		4,437,122		20,082,274		1.05	%
Substandard (Rating 7)		24,763,040		10,380,369		5,261,026		8,630,578		49,035,013		2.55	%
Doubtful (Rating 8)		-		210		-		-		210		0.00	%
	$	827,637,263	$	332,387,621	$	165,149,491	$	595,921,748	$	1,921,096,123		100.00	%

	As of December 31, 2016
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	161,749,710	$	227,277,070	$	81,449,104	$	470,475,884		98.77	%
Nonperforming		3,669,650		1,956,034		216,591		5,842,275		1.23	%
	$	165,419,360	$	229,233,104	$	81,665,695	$	476,318,159		100.00	%

*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 TDRs.

26

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

As of September 30, 2017 and December 31, 2016, TDRs totaled $9,854,487 and $8,647,007, respectively.

For each class of financing receivable, the following presents the number and recorded investment of TDRs, by type of concession, that were restructured during the three and nine months ended September 30, 2017 and 2016. 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 September 30, 2017								For the three months ended September 30, 2016
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
C&I		4	$	620,452	$	620,452	$	-		-	$	-	$	-	$	-
Direct Financing Leases		4		416,597		416,597		-		2		461,643		461,643		-
		8	$	1,037,049	$	1,037,049	$	-		2	$	461,643	$	461,643	$	-
TOTAL		8	$	1,037,049	$	1,037,049	$	-		2	$	461,643	$	461,643	$	-

	For the nine months ended September 30, 2017								For the nine months ended September 30, 2016
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 - Extension of Maturity
C&I		-	$	-	$	-	$	-		1	$	52,286	$	52,286	$	-
Direct Financing Leases		2		104,382		104,382		-		4		410,653		410,653		-
		2	$	104,382	$	104,382	$	-		5	$	462,939	$	462,939	$	-
CONCESSION - Significant Payment Delay
C&I		7	$	801,650	$	801,650	$	-		1	$	62,140	$	62,140	$	-
Direct Financing Leases		27		1,889,000		1,889,000		-		6		771,672		771,672		-
		34	$	2,690,650	$	2,690,650	$	-		7	$	833,812	$	833,812	$	-
CONCESSION - Interest Rate Adjusted Below Market
CRE - Other		-	$	-	$	-	$	-		1	$	1,233,740	$	1,233,740	$	-
		-	$	-	$	-	$	-		1	$	1,233,740	$	1,233,740	$	-
TOTAL		36	$	2,795,032	$	2,795,032	$	-		13	$	2,530,491	$	2,530,491	$	-

Of the TDRs reported above, three with a post-modification recorded balance of $139,241 were on nonaccrual as of September 30, 2017. Two with a post-modification recorded balance of $1,384,680 were on nonaccrual as of September 30, 2016. Not included in the table above, the Company had one TDR that was restructured and charged off in 2016, totaling $236,545.

For the three and nine months ended September 30, 2017, four of the Company’s TDRs redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status. Two of these TDRs were related to one customer whose loans were restructured in the second quarter of 2017 with pre-modification balances totaling $112 thousand and the other two TDRs related to another customer whose loans were restructured in the fourth quarter of 2016 with pre-modification balances totaling $195 thousand.

For the three and nine months ended September 30, 2016, none of the Company’s TDRs had redefaulted within 12 months subsequent to restructure.

27

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 EPS on a basic and diluted basis:

	Three months ended				Nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Net income	$	7,853,935	$	6,107,501	$	25,804,917	$	19,157,457
Basic EPS	$	0.60	$	0.47	$	1.96	$	1.55
Diluted EPS	$	0.58	$	0.46	$	1.91	$	1.52
Weighted average common shares outstanding*		13,151,350		13,066,777		13,151,672		12,398,491
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		356,605		202,926		357,894		181,551
Weighted average common and common equivalent shares outstanding		13,507,955		13,269,703		13,509,566		12,580,042

The increase in weighted average common shares outstanding when comparing the nine months ended September 30, 2017 to September 30, 2016 was primarily due to the common stock issuance discussed in Note 2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

NOTE 5 – 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.

28

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

Assets and liabilities measured at fair value on a recurring basis comprise the following at September 30, 2017 and December 31, 2016:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2017:
Securities AFS:
U.S. govt. sponsored agency securities	$	39,340,168	$	-	$	39,340,168	$	-
Residential mortgage-backed and related securities		158,968,509		-		158,968,509		-
Municipal securities		56,763,060		-		56,763,060		-
Other securities		4,882,685		1,017		4,881,668		-
Interest rate caps		390,527		-		390,527		-
Interest rate swaps - assets		2,603,002		-		2,603,002		-
Total assets measured at fair value	$	262,947,951	$	1,017	$	262,946,934	$	-
Interest rate swaps - liabilities	$	2,603,002	$	-	$	2,603,002	$	-
Total liabilities measured at fair value	$	2,603,002	$	-	$	2,603,002	$	-
December 31, 2016:
Securities AFS:
U.S. govt. sponsored agency securities	$	46,083,607	$	-	$	46,083,607	$	-
Residential mortgage-backed and related securities		147,702,127		-		147,702,127		-
Municipal securities		52,604,426		-		52,604,426		-
Other securities		4,722,979		1,361		4,721,618		-
Interest rate caps		576,527		-		576,527		-
Interest rate swaps - assets		2,338,281		-		2,338,281		-
Total assets measured at fair value	$	254,027,947	$	1,361	$	254,026,586	$	-
Interest rate swaps - liabilities	$	2,338,281	$	-	$	2,338,281	$	-
Total liabilities measured at fair value	$	2,338,281	$	-	$	2,338,281	$	-

There were no transfers of assets or liabilities between Levels 1, 2, and 3 of the fair value hierarchy for the three and nine months ended September 30, 2017 or 2016.

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).

29

Part I

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

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).

Interest rate caps are used for the purpose of hedging interest rate risk. The fair values are determined by pricing models that consider observable market data for derivative instruments with similar structures (Level 2 inputs).

Interest rate swaps are executed for select commercial customers. The interest rate swaps are further described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The fair values are determined by comparing the contract rate on the swap with the then-current market rate for the remaining term of the transaction (Level 2 inputs).

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

Assets measured at fair value on a non-recurring basis comprise the following at September 30, 2017 and December 31, 2016:

			Fair Value Measurements at Reporting Date Using
	Fair Value		Level 1		Level 2		Level 3
September 30, 2017:
Impaired loans/leases	$	18,177,320	$	-	$	-	$	18,177,320
OREO		5,545,633		-		-		5,545,633
	$	23,722,953	$	-	$	-	$	23,722,953
December 31, 2016:
Impaired loans/leases	$	12,823,121	$	-	$	-	$	12,823,121
OREO		5,964,952		-		-		5,964,952
	$	18,788,073	$	-	$	-	$	18,788,073

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 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 client and client’s business.  

OREO 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 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.

30

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

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:

	Quantitative Information about Level Fair Value Measurements
	Fair Value September 30, 2017		Fair Value December 31, 2016		Valuation Technique	Unobservable Input	Range
Impaired loans/leases	$	18,177,320	$	12,823,121	Appraisal of collateral	Appraisal adjustments		-10.00%	to	-50.00	%
OREO		5,545,633		5,964,952	Appraisal of collateral	Appraisal adjustments		0.00%	to	-35.00	%

For the impaired loans/leases and OREO, 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 and nine months ended September 30, 2017 and 2016.

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 September 30, 2017				As of December 31, 2016
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Value		Fair Value		Value		Fair Value
Cash and due from banks	Level 1	$	56,274,561	$	56,274,561	$	70,569,993	$	70,569,993
Federal funds sold	Level 2		20,568,000		20,568,000		22,257,000	$	22,257,000
Interest-bearing deposits at financial institutions	Level 2		41,221,383		41,221,383		63,948,925	$	63,948,925
Investment securities:
HTM	Level 2		323,981,227		323,436,578		322,909,056	$	320,414,899
AFS	See Previous Table		259,954,422		259,954,422		251,113,139	$	251,113,139
Loans/leases receivable, net	Level 3		16,830,852		18,177,320		11,873,260	$	12,823,121
Loans/leases receivable, net	Level 2		2,624,941,618		2,607,041,000		2,362,856,277	$	2,344,462,740
Interest rate caps	Level 2		390,527		390,527		576,527	$	576,527
Interest rate swaps - assets	Level 2		2,603,002		2,603,002		2,338,281	$	2,338,281
Deposits:
Nonmaturity deposits	Level 2		2,365,493,644		2,365,493,644		2,188,683,349	$	2,188,683,349
Time deposits	Level 2		528,774,838		526,265,000		480,577,924	$	479,605,000
Short-term borrowings	Level 2		16,010,805		16,010,805		39,971,387	$	39,971,387
FHLB advances	Level 2		169,055,000		169,434,000		137,500,000	$	138,338,000
Other borrowings	Level 2		77,500,000		78,428,000		80,000,000	$	81,282,000
Junior subordinated debentures	Level 2		33,578,744		25,349,715		33,480,202	$	24,881,494
Interest rate swaps - liabilities	Level 2		2,603,002		2,603,002		2,338,281		2,338,281

31

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Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 6 – BUSINESS SEGMENT INFORMATION

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

The Company’s primary segment, Commercial Banking, is geographically divided by markets into the secondary segments comprised of the four subsidiary banks wholly owned by the Company: QCBT, CRBT, CSB and RB&T. Each of these 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 four 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 as of and for the three and nine months ended September 30, 2017 and 2016.

	Commercial Banking								Wealth					Intercompany			Consolidated
	QCBT		CRBT		CSB		RB&T		Management		All Other			Eliminations			Total
Three Months Ended September 30, 2017
Total revenue	$	11,771,842	$	10,892,025	$	7,678,006	$	4,534,768	$	2,689,853	$	10,028,660		$	(7,052,986	)	$	40,542,168
Net interest income	$	11,664,970	$	7,903,483	$	6,379,111	$	3,245,346	$	-	$	(636,562	)	$	-		$	28,556,348
Provision	$	1,140,436	$	200,000	$	574,000	$	172,000	$	-	$	-		$	-		$	2,086,436
Net income	$	3,929,158	$	3,130,319	$	1,669,209	$	726,926	$	539,091	$	7,853,935		$	(9,994,703	)	$	7,853,935
Goodwill	$	3,222,688	$	-	$	9,888,225	$	-	$	-	$	-		$	-		$	13,110,913
Core deposit intangible	$	-	$	1,122,263	$	5,566,350	$	-	$	-	$	-		$	-		$	6,688,613
Total assets	$	1,456,251,244	$	1,007,062,151	$	631,963,143	$	445,098,530	$	-	$	395,697,820		$	(385,609,794	)	$	3,550,463,094
Three Months Ended September 30, 2016
Total revenue	$	18,026,215	$	10,065,032	$	2,675,741	$	4,232,205	$	2,284,577	$	8,463,636		$	(8,507,270	)	$	37,240,136
Net interest income	$	11,225,414	$	7,594,557	$	2,191,862	$	3,056,989	$	-	$	(438,045	)	$	-		$	23,630,777
Provision	$	1,137,986	$	-	$	270,000	$	200,000	$	-	$	-		$	-		$	1,607,986
Net income	$	3,596,469	$	3,286,724	$	188,608	$	944,781	$	398,859	$	6,107,492		$	(8,415,432	)	$	6,107,501
Goodwill	$	3,222,688	$	-	$	10,408,938	$	-	$	-	$	-		$	-		$	13,631,626
Core deposit intangible	$	-	$	1,321,775	$	6,291,818	$	-	$	-	$	-		$	-		$	7,613,593
Total assets	$	1,407,733,009	$	887,592,695	$	580,210,270	$	393,191,774	$	-	$	368,990,749		$	(356,732,388	)	$	3,280,986,109
Nine Months Ended September 30, 2017
Total revenue	$	39,517,823	$	31,428,339	$	23,981,019	$	12,723,998	$	7,952,495	$	30,086,617		$	(27,283,484	)	$	118,406,807
Net interest income	$	34,381,270	$	22,107,955	$	20,326,439	$	9,308,932	$	-	$	(1,852,668	)	$	-		$	84,271,928
Provision	$	2,624,538	$	750,000	$	2,209,000	$	631,000	$	-	$	-		$	-		$	6,214,538
Net income	$	11,657,941	$	8,893,461	$	5,484,383	$	2,406,337	$	1,554,618	$	25,804,917		$	(29,996,740	)	$	25,804,917
Goodwill	$	3,222,688	$	-	$	9,888,225	$	-	$	-	$	-		$	-		$	13,110,913
Core deposit intangible	$	-	$	1,122,263	$	5,566,350	$	-	$	-	$	-		$	-		$	6,688,613
Total assets	$	1,456,251,244	$	1,007,062,151	$	631,963,143	$	445,098,530	$	-	$	395,697,820		$	(385,609,794	)	$	3,550,463,094
Nine Months Ended September 30, 2016
Total revenue	$	45,706,061	$	31,342,345	$	2,675,741	$	11,945,081	$	6,723,690	$	23,567,906		$	(23,720,471	)	$	98,240,353
Net interest income	$	33,394,620	$	21,755,270	$	2,191,862	$	8,914,380	$	-	$	(1,019,020	)	$	-		$	65,237,112
Provision	$	3,108,821	$	700,000	$	270,000	$	800,000	$	-	$	-		$	-		$	4,878,821
Net income	$	10,326,508	$	9,366,441	$	188,608	$	2,334,735	$	1,232,831	$	19,157,447		$	(23,449,113	)	$	19,157,457
Goodwill	$	3,222,688	$	-	$	10,408,938	$	-	$	-	$	-		$	-		$	13,631,626
Core deposit intangible	$	-	$	1,321,775	$	6,291,818	$	-	$	-	$	-		$	-		$	7,613,593
Total assets	$	1,407,733,009	$	887,592,695	$	580,210,270	$	393,191,774	$	-	$	368,990,749		$	(356,732,388	)	$	3,280,986,109

32

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 7 – REGULATORY CAPITAL REQUIREMENTS

The Company (on a consolidated basis) and the 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 classification 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 table) of total common equity Tier 1 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 September 30, 2017 and December 31, 2016, that the Company and the subsidiary banks met all capital adequacy requirements to which they are 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, Tier 1 leverage and common equity Tier 1 ratios as set forth in the following tables. The Company and the subsidiary banks’ actual capital amounts and ratios as of September 30, 2017 and December 31, 2016 are also presented in the following table (dollars in thousands). As of September 30, 2017 and December 31, 2016, each of the subsidiary banks met the requirements to be “well capitalized”.

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2017:
Company:
Total risk-based capital	$	356,559		11.49	%	$	248,360	>	8.00	%	$	287,166	>	9.250	%	$	310,450	>	10.00	%
Tier 1 risk-based capital		321,213		10.35	%		186,270	>	6.00			225,076	>	7.250			248,360	>	8.00
Tier 1 leverage		321,213		9.23	%		139,146	>	4.00			139,146	>	4.000			173,932	>	5.00
Common equity Tier 1		289,612		9.33	%		139,703	>	4.50			178,509	>	5.750			201,793	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	152,635		12.25	%	$	99,693	>	8.00	%	$	115,270	>	9.250	%	$	124,616	>	10.00	%
Tier 1 risk-based capital		138,453		11.11	%		74,770	>	6.00			90,347	>	7.250			99,693	>	8.00
Tier 1 leverage		138,453		9.40	%		58,913	>	4.00			58,913	>	4.000			73,642	>	5.00
Common equity Tier 1		138,453		11.11	%		56,077	>	4.50			71,654	>	5.750			81,001	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	114,234		12.16	%	$	75,150	>	8.00	%	$	86,893	>	9.250	%	$	93,938	>	10.00	%
Tier 1 risk-based capital		102,545		10.92	%		56,363	>	6.00			68,105	>	7.250			75,150	>	8.00
Tier 1 leverage		102,545		10.27	%		39,950	>	4.00			39,950	>	4.000			49,938	>	5.00
Common equity Tier 1		102,545		10.92	%		42,272	>	4.50			54,014	>	5.750			61,060	>	6.50
Community State Bank:
Total risk-based capital	$	67,071		12.83	%	$	41,837	>	8.00	%	$	48,374	>	9.250	%	$	52,296	>	10.00	%
Tier 1 risk-based capital		63,356		12.11	%		31,378	>	6.00			37,915	>	7.250			41,837	>	8.00
Tier 1 leverage		63,356		10.14	%		24,991	>	4.00			24,991	>	4.000			31,239	>	5.00
Common equity Tier 1		63,356		12.11	%		23,533	>	4.50			30,070	>	5.750			33,992	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	45,031		11.48	%	$	31,394	>	8.00	%	$	36,299	>	9.250	%	$	39,243	>	10.00	%
Tier 1 risk-based capital		40,120		10.22	%		23,546	>	6.00			28,451	>	7.250			31,394	>	8.00
Tier 1 leverage		40,120		9.26	%		17,328	>	4.00			17,328	>	4.000			21,660	>	5.00
Common equity Tier 1		40,120		10.22	%		17,659	>	4.50			22,564	>	5.750			25,508	>	6.50

33

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016:
Company:
Total risk-based capital	$	327,440		11.56	%	$	226,587	>	8.00	%	$	244,289	>	8.625	%	$	283,233	>	10.00	%
Tier 1 risk-based capital		296,366		10.46	%		169,940	>	6.00			187,642	>	6.625			226,587	>	8.00
Tier 1 leverage		296,366		9.10	%		130,229	>	4.00			130,229	>	4.000			162,787	>	5.00
Common equity Tier 1		266,419		9.41	%		127,455	>	4.50			145,157	>	5.125			184,102	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	142,990		12.27	%	$	93,212	>	8.00	%	$	100,494	>	8.625	%	$	116,515	>	10.00	%
Tier 1 risk-based capital		129,524		11.12	%		69,909	>	6.00			77,191	>	6.625			93,212	>	8.00
Tier 1 leverage		129,524		9.18	%		56,445	>	4.00			56,445	>	4.000			70,556	>	5.00
Common equity Tier 1		129,524		11.12	%		52,432	>	4.50			59,714	>	5.125			75,735	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	106,791		12.82	%	$	66,623	>	8.00	%	$	71,828	>	8.625	%	$	83,279	>	10.00	%
Tier 1 risk-based capital		96,369		11.57	%		49,968	>	6.00			55,173	>	6.625			66,623	>	8.00
Tier 1 leverage		96,369		10.69	%		36,061	>	4.00			36,061	>	4.000			45,076	>	5.00
Common equity Tier 1		96,369		11.57	%		37,476	>	4.50			42,681	>	5.125			54,132	>	6.50
Community State Bank:
Total risk-based capital	$	68,216		13.81	%	$	39,521	>	8.00	%	$	42,609	>	8.625	%	$	49,402	>	10.00	%
Tier 1 risk-based capital		66,746		13.51	%		29,641	>	6.00			32,729	>	6.625			39,522	>	8.00
Tier 1 leverage		66,746		11.75	%		22,726	>	4.00			22,726	>	4.000			28,408	>	5.00
Common equity Tier 1		66,746		13.51	%		22,231	>	4.50			25,319	>	5.125			32,111	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	42,007		12.26	%	$	27,410	>	8.00	%	$	29,551	>	8.625	%	$	34,262	>	10.00	%
Tier 1 risk-based capital		37,716		11.01	%		20,558	>	6.00			22,699	>	6.625			27,410	>	8.00
Tier 1 leverage		37,716		9.57	%		15,772	>	4.00			15,772	>	4.000			19,716	>	5.00
Common equity Tier 1		37,716		11.01	%		15,418	>	4.50			17,759	>	5.125			22,270	>	6.50

*The minimums under Basel III increase by .625% (the capital conservation buffer) annually until 2019.  The fully phased-in minimums are 10.5% (Total risk-based capital), 8.5% (Tier 1 risk-based capital), and 7.0% (Common equity Tier 1).

34

Part I

Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-continued

NOTE 8 – SUBSEQUENT EVENT - ACQUISITION OF GUARANTY BANK AND TRUST COMPANY

On October 2, 2017 the Company announced the completion of its previously announced acquisition of Guaranty Bank, headquartered in Cedar Rapids, Iowa, from Guaranty, on October 1, 2017. Guaranty Bank is an Iowa-chartered bank that operates five banking locations throughout the Cedar Rapids metropolitan area.

In the acquisition, the Company acquired 100% of Guaranty Bank’s outstanding common stock and purchased certain assets and assumed certain liabilities of Guaranty for aggregate consideration consisting of 79% QCR Holdings common stock (678,670 shares) and 21% cash ($7.8 million). On September 29, 2017, the last trading date before the closing, the Company’s common stock closed at $45.50, resulting in stock consideration valued at $30.9 million and total consideration paid by the Company of $38.7 million.

To help fund the cash portion of the purchase price, on September 27, 2017, the Company executed a $7.0 million four-year term note with principal and interest due quarterly. Interest is calculated at the effective LIBOR rate plus 3.00% per annum (4.34% at September 30, 2017). The first principal payment of $437,500 is due in the first quarter of 2018. The collateral on the borrowing is the original stock certificates and stock powers of all subsidiaries.  This note is included within other borrowings on the September 30, 2017 Consolidated Balance Sheet. The remaining cash consideration paid to Guaranty came from operating cash.

As of the acquisition date, Guaranty Bank had assets with a book value of $257.2 million, loans with a book value of $196.1 million, and deposits with a book value of $212.3 million. The Company is in the process of determining the fair value of the individual assets and liabilities purchased/assumed. The Company expects core deposit intangible to be in the range of approximately $2.5-4.5 million. The remaininig fair value adjustments, including goodwill, are still in-process.

In the fourth quarter of 2017, the Company intends to merge Guaranty Bank with and into CRBT, with CRBT as the surviving bank. As part of the merger, the Guaranty Bank branches located at 302 3rd Avenue SE, Cedar Rapids, Iowa and 1819 42nd Street NE, Cedar Rapids, Iowa , will permanently close.  The three remaining Guaranty Bank branches will become banking offices of CRBT. Until the banks are merged, the Company will own and operate Guaranty Bank as a separate bank subsidiary.

35

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

This section reviews the financial condition and results of operations of the Company and its subsidiaries for the three and nine months ending September 30, 2017. Some tables may include additional periods to comply with disclosure requirements or to illustrate trends. When reading this discussion, also refer to the Consolidated Financial Statements and related notes in this report. The page locations and specific sections and notes that are referred to are presented in the table of contents.

Additionally, a comprehensive list of the acronyms and abbreviations used throughout this discussion is included in Note 1 to the Consolidated Financial Statements.

GENERAL

QCR Holdings, Inc. is a financial holding company and the parent company of QCBT, CRBT, CSB and RB&T.

QCBT, CRBT and CSB 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 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, 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. Cedar Falls and Waterloo, Iowa and adjacent communities are served through three additional CRBT offices (two in Waterloo and one in Cedar Falls).

● CSB was acquired in 2016, as further described in Note 2 of the Annual Report on Form 10-K for the year ended December 31, 2016. CSB provides full-service commercial and consumer banking to the Des Moines, Iowa area and adjacent communities through its 10 branch locations, including its main office located on North Ankeny Boulevard in Ankeny, Iowa.

● 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.

● The financial results of Guaranty Bank are not included in this report because the acquisition occurred on October 1, 2017.

36

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

EXECUTIVE OVERVIEW

The Company reported net income of $7.9 million and diluted EPS of $0.58 for the quarter ended September 30, 2017. By comparison, for the quarter ended June 30, 2017, the Company reported net income of $8.8 million and diluted EPS of $0.65. For the quarter ended September 30, 2016, the Company reported net income of $6.1 million and diluted EPS of $0.46.

For the nine months ended September 30, 2017, the Company reported net income of $25.8 million, and diluted EPS of $1.91. By comparison, for the nine months ended September 30, 2016, the Company reported net income of $19.2 million, and diluted EPS of $1.52.

The third quarter of 2017 was highlighted by several significant items:

● Net interest margin (excluding acquisition accounting net accretion) improved three basis points when comparing the third quarter of 2017 to the second quarter of 2017;

● Annualized loan and lease growth of 19% for the second consecutive quarter;

● Noninterest expense growth, primarily due to increased salaries and employee benefits, as well as inflated legal expense; and

● NPAs increased in third quarter primarily due to the addition of one large non owner-occupied CRE relationship.

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

	For the three months ended						For the nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Net income	$	7,853,935	$	8,766,017	$	6,107,501	$	25,804,917	$	19,157,457
Diluted earnings per common share	$	0.58	$	0.65	$	0.46	$	1.91	$	1.52
Weighted average common and common equivalent shares outstanding*		13,507,955		13,532,324		13,269,703		13,509,566		12,580,042

The increase in weighted average common shares outstanding when comparing the first nine months ended September 30, 2017 to September 30, 2016 was primarily due to the common stock issuance discussed in Note 2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

37

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

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

	For the three months ended						For the nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Net interest income	$	28,556,348	$	28,046,697	$	23,630,777	$	84,271,928	$	65,237,112
Provision expense		2,086,436		2,022,993		1,607,986		6,214,538		4,878,821
Noninterest income		6,701,303		6,782,518		10,423,401		20,767,575		24,008,275
Noninterest expense		23,395,747		21,404,629		24,480,483		66,073,493		59,178,734
Federal and state income tax expense		1,921,533		2,635,576		1,858,208		6,946,555		6,030,375
Net income	$	7,853,935	$	8,766,017	$	6,107,501	$	25,804,917	$	19,157,457

Following are some noteworthy changes in the Company’s financial results:

● Net interest income in the third quarter of 2017 was up 2% compared to the second quarter of 2017 and up 21% compared to the third quarter of 2016. Net interest income increased 29% when comparing the first nine months of 2017 to the same period in the prior year, primarily due to the addition of CSB.

● Provision expense in the third quarter of 2017 increased 3% compared to the second quarter of 2017 and 30% from the same period of 2016. The increase from the third quarter of 2016 to the third quarter of 2017 was primarily attributable to CSB. As acquired loans renew, the discount associated with those loans is eliminated and the Company must establish an allowance.

● Noninterest income in the third quarter of 2017 decreased 1% compared to the second quarter of 2017, primarily due to smaller gains on the sale of government guaranteed portions of loans. Noninterest income in the third quarter of 2017 decreased 36% from the third quarter of 2016 which was primarily attributable to $4 million in gains on the sale of securities associated with a balance sheet restructuring strategy executed in the third quarter of 2016.

● Noninterest expense increased 9% from the second quarter of 2017 which was primarily due to costs related to the acquisition of Guaranty Bank, post-acquisition transition and integration costs, increased salaries and employee benefits expense and inflated professional and data processing expense (primarily legal expense). Noninterest expense decreased 4% from the third quarter of 2016 primarily due to $4 million losses on debt extinguishment due to the balance sheet restructuring strategy executed in the third quarter of 2016.

● Federal and state income tax expense in the third quarter of 2017 decreased 27% compared to the second quarter of 2017. Federal and state income tax in the third quarter of 2017 increased 3% compared to the third quarter of 2016. See the Income Taxes section of this report for additional details.

38

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

LONG-TERM FINANCIAL GOALS

As previously stated, the Company has established certain financial goals by which it manages its business and measures its performance. The goals are periodically updated to reflect changes in business developments. While the Company is determined to work prudently to achieve these goals, there is no assurance that they will be met. Moreover, the Company’s ability to achieve these goals will be affected by the factors discussed under “Forward Looking Statements” as well as the factors detailed in the “Risk Factors” section included under Item 1A. of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company’s long-term financial goals are as follows:

● Improve balance sheet efficiency by maintaining a gross loans and leases to total assets ratio in the range of 73 – 78%;

● Improve profitability (measured by NIM and ROAA);

● Improve asset quality by reducing NPAs to total assets to below 0.75% and maintain charge-offs as a percentage of average loans/leases of under 0.25% annually;

● Maintain reliance on wholesale funding at less than 15% of total assets;

● Grow noninterest bearing deposits to more than 30% of total assets;

● Continue to focus on generating gains on sales of government guaranteed portions of loans and swap fee income to more than $4 million annually; and

● Grow wealth management segment net income by 10% annually.

The following table shows the evaluation of the Company’s long-term financial goals.

Goal	Key Metric	Target**	For the Quarter Ending
			September 30, 2017	June 30, 2017	September 30,
					2016
Balance sheet efficiency	Gross loans and leases to total assets	73 - 78%	75%	74%	72%
Profitability	NIM(TEY)(non-GAAP)*	> 3.85%	3.71%	3.81%	3.71%
	ROAA	> 1.10%	0.90%	1.04%	0.85%
	Core ROAA (non-GAAP)*		0.97%	1.03%	1.05%
Asset quality	NPAs to total assets	< 0.75%	0.95%	0.75%	0.69%
	Net charge-offs to average loans and leases***	< 0.25% annually	0.11%	0.13%	0.15%
Reliance on wholesale funding	Wholesale funding to total assets****	< 15%	12%	10%	13%
Funding mix	Noninterest bearing deposits as a percentage of total assets	> 30%	20%	22%	23%
Consistent, high quality noninterest income revenue streams	Gains on sales of government guaranteed portions of loans and swap fee income***	> $4 million annually	$2.4 million	$3.0 million	$5.4 million
	Grow wealth management segment net income***	> 10% annually	24%	22%	(3%)

* See GAAP to Non-GAAP reconciliations.

** Targets will be re-evaluated and adjusted as appropriate.

*** Ratios and amounts provided for these measurements represent year-to-date actual amounts for the respective period, that are then annualized for comparison.

**** Wholesale funding to total assets is calculated by dividing total borrowings and brokered deposits by total assets.

39

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

STRATEGIC DEVELOPMENTS

The Company took the following actions to support its corporate strategy and the long-term financial goals shown above.

● The Company grew loans and leases in the first nine months of 2017 by 15% on an annualized basis. This growth exceeded the targeted organic growth of 10-12% for the full year. Strong loan and lease growth for the remainder of the year will help keep the Company’s loan and leases to asset ratio within the targeted range of 73-78%.

● The Company intends to continue to participate in a prudent manner as an acquirer in the consolidation taking place in our markets to further boost ROAA and improve the Company’s efficiency ratio. In the third quarter of 2016, the Company acquired CSB, headquartered in Ankeny, Iowa. See Note 2 of the Company’s 2016 Annual Report on Form 10-K for the year ended December 31, 2016 for additional details. On October 1, 2017, the Company completed the acquisition of Guaranty Bank. See Note 8 to the Consolidated Financial Statements for additional details.

● The Company continues to focus on the NPAs to total assets ratio. This ratio increased by 20 basis points to 0.95%, as compared to the second quarter 2017, due to the addition of one large non owner-occupied CRE relationship. The Company remains committed to improving asset quality ratios in 2017.

● Management continues to focus on reducing the Company’s reliance on wholesale funding. Wholesale funding increased in the third quarter 2017 due to the strong loan and lease growth in the second and third quarters of 2017 which has outpaced the Company’s deposit growth. Management continues to evaluate opportunities for reduction in wholesale funding.

● Correspondent banking continues to be a core line of business for the Company. The Company is competitively positioned with experienced staff, software systems and processes to continue growing in the three states currently served – Iowa, Illinois and Wisconsin. The Company acts as the correspondent bank for 183 downstream banks with average total noninterest bearing deposits of $287.4 million during the third quarter of 2017. This line of business provides a strong source of noninterest bearing and interest bearing deposits, fee income, high-quality loan participations and bank stock loans.

● SBA and USDA lending is a specialty lending area on which the Company has focused. Once these loans are originated, the government-guaranteed portion of the loan can be sold to the secondary market for premiums. The Company aims to continue to make this a more consistent source of noninterest income.

● As a result of the low interest rate environment, the Company is focused on executing interest rate swaps on select commercial loans. The interest rate swaps allow the commercial borrowers to pay a fixed interest rate while the Company receives a variable interest rate as well as an upfront fee dependent on the pricing. Management believes that these swaps help position the Company more favorably for rising rate environments. The Company 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.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

● Wealth management is another core line of business for the Company and includes a full range of products, including trust services, brokerage and investment advisory services, asset management, estate planning and financial planning. As of September 30, 2017 the Company had $2.41 billion of total financial assets in trust (and related) accounts and $955.7 million of total financial assets in brokerage (and related) accounts. Continued growth in assets under management will help to drive trust and investment advisory fees. The Company offers trust and investment advisory services to the correspondent banks that it serves. As management continues to focus on growing wealth management fee income, expanding market share will continue to be a primary strategy.

GAAP TO NON-GAAP RECONCILIATIONS

The following table presents certain non-GAAP financial measures related to the “TCE/TA ratio”, “core net income”, “core net income attributable to QCR Holdings, Inc. common stockholders”, “core EPS”, “core ROAA”, “NIM (TEY)”, and “efficiency ratio”. In compliance with applicable rules of the SEC, all non-GAAP measures are reconciled to the most directly comparable GAAP measure, as follows:

● TCE/TA ratio (non-GAAP) is reconciled to stockholders’ equity and total assets;

● Core net income, core net income attributable to QCR Holdings, Inc. common stockholders, core EPS and core ROAA (all non-GAAP measures) are reconciled to net income;

● NIM (TEY) (non-GAAP) is reconciled to NIM; and

● Efficiency ratio (non-GAAP) is reconciled to noninterest expense, net interest income and noninterest income.

The TCE/TA non-GAAP ratio has been a focus for investors and management believes that this ratio may assist investors in analyzing the Company’s capital position without regard to the effects of intangible assets.

The table following also includes several “core” non-GAAP measurements of financial performance. The Company's management believes that these measures are important to investors as they exclude non-recurring income and expense items; therefore, they provide a better comparison for analysis and may provide a better indicator of future run-rates.

NIM (TEY) is a financial measure that the Company’s management utilizes to take into account the tax benefit associated with certain tax-exempt loans and securities. It is standard industry practice to measure net interest margin using tax-equivalent measures.

The efficiency ratio is a ratio that management utilizes to compare the Company to peers. It is a standard ratio in the banking industry and widely utilized by investors.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

	As of
	September 30,			June 30,			December 31,
GAAP TO NON-GAAP RECONCILIATIONS	2017			2017			2016
	(dollars in thousands, except per share data)
TCE / TA RATIO
Stockholders' equity (GAAP)	$	313,039		$	305,083		$	286,041
Less: Intangible assets		19,800			20,030			22,522
TCE (non-GAAP)	$	293,239		$	285,053		$	263,519
Total assets (GAAP)	$	3,550,463		$	3,457,187		$	3,301,944
Less: Intangible assets		19,800			20,030			22,522
TA (non-GAAP)	$	3,530,663		$	3,437,157		$	3,279,422
TCE / TA ratio (non-GAAP)		8.31	%		8.29	%		8.04	%

	For the Quarter Ended									For the Nine Months Ended
	September 30,			June 30,			December 31,			September 30,			September 30,
CORE NET INCOME	2017			2017			2016			2017			2016
Net income (GAAP)	$	7,854		$	8,766		$	8,529		$	25,805		$	19,157
Less nonrecurring items (post-tax) (*):
Income:
Securities gains, net	$	(41	)	$	25		$	(23	)	$	(16	)	$	3,009
Total nonrecurring income (non-GAAP)	$	(41	)	$	25		$	(23	)	$	(16	)	$	3,009
Expense:
Losses on debt extinguishment	$	-		$	-		$	232		$	-		$	2,743
Acquisition costs		265			-			-			265			887
Post-acquisition transition and integration costs		340			-			26			340			850
Total nonrecurring expense (non-GAAP)	$	605		$	-		$	258		$	605		$	4,480
Core net income (non-GAAP)	$	8,500		$	8,741		$	8,810		$	26,426		$	20,628
CORE EPS
Core net income (non-GAAP) (from above)	$	8,500		$	8,741		$	8,810		$	26,426		$	20,628
Weighted average common shares outstanding		13,151,591			13,170,283			13,087,592			13,151,752			12,398,491
Weighted average common and common equivalent shares outstanding		13,508,277			13,532,324			13,323,883			13,509,673			12,580,042
Core EPS (non-GAAP):
Basic	$	0.65		$	0.66		$	0.67		$	2.01		$	1.66
Diluted	$	0.63		$	0.65		$	0.66		$	1.96		$	1.64
CORE ROAA
Core net income (non-GAAP) (from above)	$	8,500		$	8,741		$	8,810		$	26,426		$	20,628
Average Assets	$	3,503,148		$	3,378,195		$	3,277,814		$	3,385,352		$	2,702,992
Core ROAA (annualized) (non-GAAP)		0.97	%		1.03	%		1.08	%		1.04	%		1.02	%

* Nonrecurring items (after-tax) are calculated using an estimated effective tax rate of 35%.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

	For the Quarter Ended									For the Nine Months Ended
	September 30,			June 30,			December 31,			September 30,			September 30,
GAAP TO NON-GAAP RECONCILIATIONS (CONTINUED)	2017			2017			2016			2017			2016
	(dollars in thousands)
NIM (TEY)
Net interest income (GAAP)	$	28,556		$	28,047		$	29,280		$	84,272		$	65,237
Plus: Tax equivalent adjustment		2,311			2,201			1,727			6,632			4,294
Net interest income - tax equivalent (Non-GAAP)	$	30,867		$	30,248		$	31,007		$	90,904		$	69,531
Average earning assets	$	3,303,014		$	3,180,779		$	3,069,122		$	3,186,716		$	2,548,070
NIM (GAAP)		3.43	%		3.54	%		3.80	%		3.54	%		3.42	%
NIM (TEY) (Non-GAAP)		3.71	%		3.81	%		4.02	%		3.81	%		3.65	%
EFFICIENCY RATIO
Noninterest expense (GAAP)	$	23,395		$	21,405		$	22,308		$	66,073		$	59,179
Net interest income (GAAP)	$	28,556		$	28,047		$	29,280		$	84,272		$	65,237
Noninterest income (GAAP)		6,702			6,782			7,029			20,768			24,008
Total income	$	35,258		$	34,829		$	36,309		$	105,040		$	89,245
Efficiency ratio (noninterest expense/total income) (Non-GAAP)		66.35	%		61.46	%		61.44	%		62.90	%		66.31	%

NET INTEREST INCOME - (TAX EQUIVALENT BASIS)

Net interest income, on a tax equivalent basis, increased 22% to $30.9 million for the quarter ended September 30, 2017, compared to the same quarter of the prior year. For the nine months ended September 30, 2017, net interest income, on a tax equivalent basis, increased 31% to $90.9 million, compared to the same period of 2016. Net interest income improved due to several factors:

● The acquisition of CSB, whose strong net interest margin has significantly contributed to the Company’s results;

● The Company’s continued strategy to redeploy funds from the taxable securities portfolio into higher yielding loans and leases; and

● Organic loan and lease growth has been strong over the past twelve months, as evidenced by average gross loan/lease growth of 29% in that period.

A comparison of yields, spread and margin from the third quarter of 2017 to the third quarter of 2016 is as follows (on a tax equivalent basis):

● The average yield on interest-earning assets increased 16 basis points.

● The average cost of interest-bearing liabilities increased 18 basis points.

● The net interest spread decreased 2 basis points from 3.49% to 3.47%.

● NIM remained flat at 3.71% for both periods.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

A comparison of yields, spread and margin from the first nine months of 2017 to the first nine months of 2016 is as follows (on a tax equivalent basis):

● The average yield on interest-earning assets increased 25 basis points.

● The average cost of interest-bearing liabilities increased 9 basis points.

● The net interest spread increased 16 basis points from 3.43% to 3.59%.

● NIM improved 16 basis points from 3.65% to 3.81%.

The Company’s management closely monitors and manages NIM. From a profitability standpoint, an important challenge for the Company’s subsidiary banks and leasing company is the improvement of their NIM. Management continually addresses this issue with pricing and other balance sheet management strategies.

The improvement in NIM was primarily the result of the acquisition of CSB. CSB’s margin will fluctuate based on the amortization and accretion of purchase accounting adjustments, most notably, the discount accretion on the loan portfolio. This benefit can fluctuate based on prepayments of both PCI and performing loans. As loans prepay, the associated discount is accelerated.

The Company continues to place an emphasis on shifting its balance sheet mix. With a stated goal of maintaining loans/leases as a percentage of assets in a range of 73-78%, the Company funded its loan/lease growth with a mixture of core deposits and cash from calls/maturities/redemptions in the investment securities portfolio. In 2015 and 2016, cash from called securities and the targeted sales of securities was redeployed into the loan portfolio, resulting in a significant increase in yield, while minimizing any extension of duration. Additionally, the Company recognized net gains on these sales due to the previous rate environment. As rates rise, the Company should also have less market volatility in the investment securities portfolio, as this is a smaller portion of the balance sheet.

There still exists some higher cost legacy borrowings and the Company continues to monitor and evaluate both prepayment and debt restructuring opportunities, as executing on such a strategy could potentially increase NIM at a much quicker pace than holding the debt until maturity.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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 September 30,
	2017								2016
				Interest		Average						Interest		Average
	Average			Earned		Yield or			Average			Earned		Yield or
	Balance			or Paid		Cost			Balance			or Paid		Cost
	(dollars in thousands)
ASSETS
Interest earning assets:
Federal funds sold	$	19,966		$	52		1.03	%	$	17,685		$	13		0.29	%
Interest-bearing deposits at financial institutions		42,178			141		1.33	%		67,807			103		0.60	%
Investment securities (1)		593,451			5,808		3.88	%		525,417			4,826		3.65	%
Restricted investment securities		17,793			173		3.86	%		14,877			132		3.53	%
Gross loans/leases receivable (1) (2) (3)		2,629,626			29,978		4.52	%		2,077,376			23,330		4.47	%
Total interest earning assets	$	3,303,014		$	36,152		4.34	%	$	2,703,162		$	28,404		4.18	%
Noninterest-earning assets:
Cash and due from banks	$	64,272							$	52,678
Premises and equipment		61,585								42,986
Less allowance		(34,086	)							(30,927	)
Other		108,363								98,048
Total assets	$	3,503,148							$	2,865,947
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	1,613,162			2,230		0.55	%	$	1,116,325			717		0.26	%
Time deposits		530,120			1,326		0.99	%		422,603			755		0.71	%
Short-term borrowings		16,138			33		0.81	%		30,208			12		0.16	%
FHLB advances		146,556			608		1.65	%		118,564			421		1.41	%
Other borrowings		72,617			726		3.97	%		116,856			975		3.32	%
Junior subordinated debentures		33,563			362		4.28	%		33,430			306		3.64	%
Total interest-bearing liabilities	$	2,412,156		$	5,285		0.87	%	$	1,837,986		$	3,186		0.69	%
Noninterest-bearing demand deposits	$	738,824							$	704,469
Other noninterest-bearing liabilities		42,572								45,123
Total liabilities	$	3,193,552							$	2,587,578
Stockholders' equity		309,596								278,369
Total liabilities and stockholders' equity	$	3,503,148							$	2,865,947
Net interest income				$	30,867							$	25,218
Net interest spread							3.47	%							3.49	%
Net interest margin							3.71	%							3.71	%
Ratio of average interest-earning assets to average interest-bearing liabilities		136.93	%							147.07	%

(1)  Interest earned and yields on nontaxable investment securities and nontaxable loans are determined on a tax equivalent basis using a 35% 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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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Analysis of Changes of Interest Income/Interest Expense

For the three months ended September 30, 2017

	Inc./(Dec.)			Components
	from			of Change (1)
	Prior Period			Rate			Volume
	2017 vs. 2016
	(dollars in thousands)
INTEREST INCOME
Federal funds sold	$	39		$	37		$	2
Interest-bearing deposits at financial institutions		38			264			(226	)
Investment securities (2)		982			320			662
Restricted investment securities		41			13			28
Gross loans/leases receivable (2) (3) (4)		6,648			295			6,353
Total change in interest income	$	7,748		$	929		$	6,819
INTEREST EXPENSE
Interest-bearing deposits	$	1,513		$	1,090		$	423
Time deposits		571			348			223
Short-term borrowings		21			58			(37	)
Federal Home Loan Bank advances		187			77			110
Other borrowings		(249	)		913			(1,162	)
Junior subordinated debentures		56			55			1
Total change in interest expense	$	2,099		$	2,541		$	(442	)
Total change in net interest income	$	5,649		$	(1,612	)	$	7,261

(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 35% 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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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

	For the nine months ended September 30,
	2017								2016
				Interest		Average						Interest		Average
	Average			Earned		Yield or			Average			Earned		Yield or
	Balance			or Paid		Cost			Balance			or Paid		Cost
	(dollars in thousands)
ASSETS
Interest earning assets:
Federal funds sold	$	16,600		$	105		0.85	%	$	16,364		$	36		0.29	%
Interest-bearing deposits at financial institutions		73,655			560		1.02	%		53,063			226		0.57	%
Investment securities (1)		575,884			16,350		3.80	%		527,162			14,084		3.57	%
Restricted investment securities		14,963			435		3.89	%		14,396			396		3.67	%
Gross loans/leases receivable (1) (2) (3)		2,505,614			86,821		4.63	%		1,937,085			63,784		4.40	%
Total interest earning assets	$	3,186,716		$	104,271		4.37	%	$	2,548,070		$	78,526		4.12	%
Noninterest-earning assets:
Cash and due from banks	$	64,363							$	49,677
Premises and equipment		61,296								39,637
Less allowance		(32,648	)							(28,480	)
Other		105,625								94,087
Total assets	$	3,385,352							$	2,702,992
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	1,528,971			5,205		0.46	%	$	994,476			1,931		0.26	%
Time deposits		522,986			3,575		0.91	%		415,808			2,175		0.70	%
Short-term borrowings		19,754			76		0.51	%		55,623			74		0.18	%
FHLB advances		112,550			1,365		1.62	%		125,319			1,278		1.36	%
Other borrowings		73,126			2,104		3.85	%		106,201			2,624		3.30	%
Junior subordinated debentures		33,530			1,042		4.15	%		33,825			913		3.61	%
Total interest-bearing liabilities	$	2,290,917		$	13,367		0.78	%	$	1,731,251		$	8,995		0.69	%
Noninterest-bearing demand deposits	$	751,318							$	675,240
Other noninterest-bearing liabilities		42,660								41,499
Total liabilities	$	3,084,895							$	2,447,990
Stockholders' equity		300,457								255,002
Total liabilities and stockholders' equity	$	3,385,352							$	2,702,992
Net interest income				$	90,904							$	69,531
Net interest spread							3.59	%							3.43	%
Net interest margin							3.81	%							3.65	%
Ratio of average interest-earning assets to average interest-bearing liabilities		139.10	%							147.18	%

(1)  Interest earned and yields on nontaxable investment securities and nontaxable loans are determined on a tax equivalent basis using a 35% 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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Part I
Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Analysis of Changes of Interest Income/Interest Expense

For the nine months ended September 30, 2017

	Inc./(Dec.)			Components
	from			of Change (1)
	Prior Period			Rate		Volume
	2017 vs. 2016
	(dollars in thousands)
INTEREST INCOME
Federal funds sold	$	69		$	68	$	1
Interest-bearing deposits at financial institutions		334			224		110
Investment securities (2)		2,266			924		1,342
Restricted investment securities		39			23		16
Gross loans/leases receivable (2) (3) (4)		23,037			3,540		19,497
Total change in interest income	$	25,745		$	4,779	$	20,966
INTEREST EXPENSE
Interest-bearing deposits	$	3,274		$	1,913	$	1,361
Time deposits		1,400			762		638
Short-term borrowings		2			97		(95	)
Federal Home Loan Bank advances		87			283		(196	)
Other borrowings		(520	)		577		(1,097	)
Junior subordinated debentures		129			143		(14	)
Total change in interest expense	$	4,372		$	3,775	$	597
Total change in net interest income	$	21,373		$	1,004	$	20,369

(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 35% 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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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

CRITICAL ACCOUNTING POLICIES

The Company’s financial statements are prepared in accordance with GAAP. 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. Certain critical accounting policies are described below.

ALLOWANCE FOR LOAN AND LEASE LOSSES

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.

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 NPLs, and other factors. Quantitative factors also incorporate known information about individual loans/leases, including borrowers’ sensitivity to interest rate movements.

Qualitative factors include management’s view regarding 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 structures, 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 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 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 September 30, 2017 was adequate to absorb losses 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.

OTHER–THAN-TEMPORARY IMPAIRMENT

The Company’s assessment of OTTI of its investment securities portfolio is another critical accounting policy due to the level of judgment required by management. Investment securities are evaluated to determine whether declines in fair value below their cost are other-than-temporary.

In estimating OTTI 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 Company’s lack of intent to 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 OTTI should be read in conjunction with the Company’s financial statements and the accompanying notes presented elsewhere herein.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

RESULTS OF OPERATIONS

INTEREST INCOME

Interest income increased 26%, comparing the third quarter of 2017 to the same period of 2016 and increased 32%, comparing the first nine months of 2017 to the same period of 2016. This increase was primarily the result of the CSB acquisition during the third quarter of 2016, as well as strong organic loan growth.

Overall, the Company’s average earning assets increased 22%, comparing the third quarter of 2017 to the third quarter of 2016. During the same time period, average gross loans and leases increased 27%, while average investment securities increased 13%. Average earning assets increased 25%, comparing the first nine months of 2017 to the same period of 2016. Average gross loans and leases increased 29% and average investment securities increased 9%, comparing the first nine of 2017 to the same period of 2016. These increases were also the result of the acquisition of CSB, as well as strong loan growth.

Additionally, the Company continued to diversify its securities portfolio, including increasing its portfolio of tax exempt municipal securities. The large majority of these are privately placed debt issuances by municipalities located in the Midwest and require a thorough underwriting process before investment. Execution of this strategy has led to increased interest income on a tax equivalent basis over the past several years. Management understands that this strategy has 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 intends to continue to grow quality loans and leases as well as diversify its securities portfolio to maximize yield while minimizing credit and interest rate risk.

INTEREST EXPENSE

Interest expense for the third quarter of 2017 increased 66% from the third quarter of 2016. For the first nine months of 2017, interest expense increased 49% compared to the first nine months of 2016. The acquisition of CSB contributed to this increase. Additionally, the Company has rate sensitive deposits with select major customers that have repriced with the increase in certain market interest rates.

Management has placed a strong focus on reducing the reliance on long-term wholesale funding as it tends to be higher in cost than deposits. Several balance sheet restructuring strategies were executed in 2016. Refer to Notes 10 and 11 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 for additional details.

The Company’s management intends to continue to shift the mix of funding from wholesale funds to core deposits, including noninterest-bearing deposits. Continuing this trend is expected to strengthen the Company’s franchise value, reduce funding costs, and increase fee income opportunities through deposit service charges.

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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.

The Company’s provision totaled $2.1 million for the third quarter of 2017, which was an increase of $478 thousand or 30% from the same quarter of the prior year. Provision for the first nine months of the year totaled $6.2 million, which was up $1.3 million or 27%, compared to the first nine months of 2016. The increase from the third quarter of 2016 to the third quarter of 2017 was primarily attributable to CSB. As acquired loans renew, the discount associated with those loans is eliminated and the Company must establish an allowance. This provision, when coupled with net charge-offs of $2.0 million for the first nine months of 2017, increased the Company’s allowance to $35.0 million at September 30, 2017. As of September 30, 2017, the Company’s allowance to total loans/leases was 1.31%, which is flat from June 30, 2017 and up from 1.22% at September 30, 2016.

In accordance with GAAP for business combination accounting, the loans acquired through the acquisition of CSB were recorded at fair value; therefore, there was no allowance associated with CSB’s loans at acquisition. Management continues to evaluate the allowance needed on the acquired CSB loans factoring in the net remaining discount ($5.6 million at September 30, 2017). When factoring this remaining discount into the Company’s allowance to total loans and leases calculation, the Company’s allowance as a percentage of total loans and leases increases from 1.31% to 1.52%.

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

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NONINTEREST INCOME

The following tables set forth the various categories of noninterest income for the three and nine months ended September 30, 2017 and 2016.

	Three Months Ended
	September 30, 2017			September 30, 2016		$ Change			% Change
Trust department fees	$	1,721,401		$	1,518,600	$	202,801			13.4	%
Investment advisory and management fees		968,452			765,977		202,475			26.4
Deposit service fees		1,522,461			1,150,869		371,592			32.3
Gains on sales of residential real estate loans, net		98,409			144,105		(45,696	)		(31.7	)
Gains on sales of government guaranteed portions of loans, net		91,974			218,785		(126,811	)		(58.0	)
Swap fee income		194,256			333,772		(139,516	)		(41.8	)
Securities gains (losses), net		(63,588	)		4,251,773		(4,315,361	)		(101.5	)
Earnings on bank-owned life insurance		428,002			450,251		(22,249	)		(4.9	)
Debit card fees		754,803			475,182		279,621			58.8
Correspondent banking fees		239,060			253,823		(14,763	)		(5.8	)
Other		746,073			860,264		(114,191	)		(13.3	)
Total noninterest income	$	6,701,303		$	10,423,401	$	(3,722,098	)		(35.7	)%
	Nine Months Ended
	September 30, 2017			September 30, 2016		$ Change			% Change
Trust department fees	$	5,153,609		$	4,606,590	$	547,019			11.9	%
Investment advisory and management fees		2,798,886			2,117,100		681,786			32.2
Deposit service fees		4,297,210			3,028,758		1,268,452			41.9
Gains on sales of residential real estate loans		307,360			288,904		18,456			6.4
Gains on sales of government guaranteed portions of loans		1,129,668			2,701,203		(1,571,535	)		(58.2	)
Swap fee income		635,353			1,358,312		(722,959	)		(53.2	)
Securities gains (losses), net		(25,124	)		4,628,283		(4,653,407	)		(100.5	)
Earnings on bank-owned life insurance		1,357,049			1,324,380		32,669			2.5
Debit card fees		2,201,125			1,126,581		1,074,544			95.4
Correspondent banking fees		684,306			800,892		(116,586	)		(14.6	)
Other		2,228,133			2,027,272		200,861			9.9
Total noninterest income	$	20,767,575		$	24,008,275	$	(3,240,700	)		(13.5	)%

In recent years, the Company has been successful in expanding its wealth management customer base. Trust department fees continue to be a significant contributor to noninterest income and, due to favorable market conditions in early 2017 coupled with strong growth in assets under management, trust department fees increased 13%, comparing the third quarter of 2017 to the same period of the prior year. Trust department fees increased 12% when comparing the first nine months of 2017 to the same period of the prior year. Income is generated primarily from fees charged based on assets under administration for corporate and personal trusts and for custodial services. The majority of the trust department fees are determined based on the value of the investments within the fully managed trusts. Additionally, the Company recently started offering trust operations services to correspondent banks. Management 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). Similar to trust department fees, these fees are largely determined based on the value of the investments managed. And, similar to the trust department, the Company has had some success in expanding its customer base. Due to this growth and favorable market conditions in 2017, investment advisory and management fees increased 26%, comparing the third quarter of 2017 to the same period of the prior year and they increased 32% when comparing the first nine months of 2017 to the first nine months of 2016. The acquisition of CSB also contributed to this increase, as it had an established investment advisory and management services department at acquisition.

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Deposit service fees expanded 32% comparing the third quarter of 2017 to the same period of the prior year and expanded 42% when comparing the first nine months of 2017 to the same period of the prior year. This increase was primarily the result of the acquisition of CSB. 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 continuing 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 decreased 32% when comparing the third quarter of 2017 to the same period of the prior year and increased 6% when comparing the first nine months of 2017 to the same period of the prior year. Overall, with the continued low interest rate environment, refinancing activity has slowed, as many of the Company’s existing and prospective customers have already executed a refinancing. Therefore, this area has generally become a smaller contributor to overall noninterest income.

The Company’s gains on the sale of government-guaranteed portions of loans for the third quarter of 2017 decreased 58% compared to the third quarter of 2016 and decreased 58% when comparing the first nine months of 2017 to the same period of the prior year. Given the nature of these gains, large fluctuations can occur from quarter-to-quarter and year-to-year. As one of its core strategies, the Company continues to leverage its expertise by taking advantage of programs offered by the SBA and the USDA. The Company’s portfolio of government-guaranteed loans has grown as a direct result of the Company’s strong expertise in SBA and USDA lending. In some cases, it is more beneficial for the Company to sell the government-guaranteed portion on the secondary market for a premium rather than retain the loans in the Company’s portfolio. Sales activity for government-guaranteed portions of loans tends to fluctuate depending on the demand for loans that fit the criteria for the government guarantee. Further, the size of the transactions can vary and, as the gain is determined as a percentage of the guaranteed amount, the resulting gain on sale can vary. 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.

As a result of the continued low interest rate environment, the Company was able to execute numerous interest rate swaps on select commercial loans over the past two years. The interest rate swaps allow the commercial borrowers to pay a fixed interest rate while the Company receives a variable interest rate as well as an upfront fee dependent upon the pricing. Management believes that these swaps help position the Company 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. A good interest rate swap candidate must be of a certain size and sophistication which can lead to volatility in activity from quarter to quarter. Swap fee income totaled $194 thousand for the third quarter of 2017, compared to $334 thousand for the third quarter of 2016. Swap fee income totaled $635 thousand for the first nine months of 2017 compared to $1.4 million in the first nine months of 2016. Future levels of swap fee income are dependent upon prevailing interest rates.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Securities losses were $64 thousand for the third quarter of 2017, compared to gains of $4.3 million for the third quarter of 2016. Securities losses totaled $25 thousand for the first nine months of 2017, compared to gains of $4.6 million for the first nine months of 2016. In September 2016, the Company sold an equity security and recognized a pre-tax gross gain on the sale of $4 million. The equity security was acquired by the Company at no cost as part of a membership in the invested company in 2002.

Earnings on BOLI decreased 5% comparing the third quarter of 2017 to the third quarter of 2016 and increased 3% comparing the first nine months of 2017 to the first nine months of 2016. There were no purchases of BOLI within the last twelve months. Notably, a small portion of the Company’s BOLI is variable rate whereby the returns are determined by the performance of the equity market. Equity market performance accounted for the majority of the volatility. Management intends to continue to review its BOLI investments to be consistent with policy and regulatory limits in conjunction with the rest of its earning assets in an effort to maximize returns while minimizing risk.

Debit card fees are the interchange fees paid on certain debit card customer transactions. Debit card fees increased 59% comparing the third quarter of 2017 to the third quarter of the prior year and increased 95% comparing the first nine months of 2017 to the first nine months of 2016. The primary reason for the increase was the addition of CSB. CSB has a large retail customer base and therefore generates significant interchange revenue. These fees can vary based on customer debit card usage, so fluctuations from period to period may occur. As an opportunity to maximize fees, the Company offers a retail deposit product with a higher interest rate that incentivizes debit card activity.

Correspondent banking fees decreased 6% comparing the third quarter of 2017 to the third quarter of the prior year and decreased 15% when comparing the first nine months of 2017 to the first nine months of 2016. As interest rates rise, the correspondent bank deposit accounts receive a higher earnings credit, which then reduces the direct fees that the Company receives. Management will continue to evaluate earnings credit rates and the resulting impact on deposit balances and fees while balancing the ability to grow market share. 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 loan growth as well as a steady source of fee income. The Company now serves approximately 183 banks in Iowa, Illinois and Wisconsin.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

NONINTEREST EXPENSE

The following tables set forth the various categories of noninterest expense for the three and nine months ended September 30, 2017 and 2016.

	Three Months Ended
	September 30, 2017			September 30, 2016		$ Change			% Change
Salaries and employee benefits	$	13,423,943		$	11,202,460	$	2,221,483			19.8	%
Occupancy and equipment expense		2,516,274			2,086,331		429,943			20.6
Professional and data processing fees		2,950,839			1,931,329		1,019,510			52.8
Acquisition costs		407,997			1,036,904		(628,907	)		(60.7	)
Post-acquisition transition and integration costs		522,740			1,009,132		(486,392	)		(48.2	)
FDIC insurance, other insurance and regulatory fees		690,894			582,835		108,059			18.5
Loan/lease expense		257,540			102,678		154,862			150.8
Net cost of (income from) operations of other real estate		(160,640	)		133,055		(293,695	)		(220.7	)
Advertising and marketing		669,923			547,768		122,155			22.3
Bank service charges		460,153			415,401		44,752			10.8
Losses on debt extinguishment, net		-			4,137,310		(4,137,310	)		(100.0	)
Correspondent banking expense		204,189			205,998		(1,809	)		(0.9	)
Other		1,451,895			1,089,282		362,613			33.3
Total noninterest expense	$	23,395,747		$	24,480,483	$	(1,084,736	)		(4.4	)%
	Nine Months Ended
	September 30, 2017			September 30, 2016		$ Change			% Change
Salaries and employee benefits	$	39,662,218		$	32,920,840	$	6,741,378			20.5	%
Occupancy and equipment expense		7,716,829			5,797,875		1,918,954			33.1
Professional and data processing fees		7,374,930			4,921,064		2,453,866			49.9
Acquisition costs		407,997			1,363,987		(955,990	)		(70.1	)
Post-acquisition transition and integration costs		522,740			1,037,018		(514,278	)		(49.6	)
FDIC insurance, other insurance and regulatory fees		1,957,413			1,866,804		90,609			4.9
Loan/lease expense		811,362			419,846		391,516			93.3
Net cost of (income from) operations of other real estate		(118,453	)		513,149		(631,602	)		(123.1	)
Advertising and marketing		1,846,942			1,367,478		479,464			35.1
Bank service charges		1,331,499			1,246,682		84,817			6.8
Losses on debt extinguishment, net		-			4,220,507		(4,220,507	)		(100.0	)
Correspondent banking expense		604,233			564,763		39,470			7.0
Other		3,955,783			2,938,721		1,017,062			34.6
Total noninterest expense	$	66,073,493		$	59,178,734	$	6,894,759			11.7	%

Management places a strong emphasis on overall cost containment and is committed to improving the Company’s general efficiency.

Salaries and employee benefits, which is the largest component of noninterest expense, increased from the third quarter of 2016 to the third quarter of 2017 by 20%. This line item also increased 21% when comparing the first nine months of 2017 to the first nine months of 2016. This increase was primarily related to the acquisition of CSB late in the third quarter of 2016.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Occupancy and equipment expense increased 21%, comparing the third quarter of 2017 to the same period of the prior year and increased 33% comparing the first nine months of 2017 to the same period of the prior year. The increased expense was mostly due to the addition of CSB.

Professional and data processing fees increased 53%, comparing the third quarter of 2017 to the same period in 2016 and increased 50% comparing the first nine months of 2017 to the same period in 2016. This increased expense was partially due to the addition of CSB. Legal expense for the past quarter was elevated due to a legal matter in Rockford where two Bank officers have been charged with wrongdoing in connection with an SBA loan application.  The Company anticipates these legal expenses will continue until the court proceedings are completed, which the Company expects to be sometime in 2018.  Neither RB&T, nor the Company, have been charged in the case. Generally, professional and data processing fees can fluctuate depending on certain one-time project costs. Management will continue to focus on minimizing such one-time costs and driving recurring costs down through contract renegotiation or managed reduction in activity where costs are determined on a usage basis.

FDIC and other insurance expense increased 19%, comparing the third quarter of 2017 to the third quarter of 2016, and increased 5% comparing the first nine months of 2017 to the same period of 2016. The increase in expense was due to the acquisition of CSB, partially offset by a decrease in the assessment rate designated by the FDIC.

Loan/lease expense increased 151%, comparing the third quarter of 2017 to the same quarter of 2016, and increased 93% when comparing the first nine months of 2017 to the same period of 2016. The Company incurred elevated levels of expense in the first nine months of 2017 for certain existing NPLs in connection with the work-out of these loans. Generally, loan/lease expense has a direct relationship with the level of NPLs; however, it may deviate depending upon the individual NPLs.

Net cost of or income from operations of other real estate includes gains/losses on the sale of OREO, write-downs of OREO and all income/expenses associated with OREO. Income from operations of other real estate totaled $161 thousand for the third quarter of 2017, compared to net costs of operations of $133 thousand for the third quarter of 2016. Income from operations of other real estate totaled $118 thousand for the first nine months of 2017, compared to net costs of operations of $513 thousand for the first nine months of 2016. Occupancy rates for one of the OREO properties managed by the Company have improved over the past year, increasing cash flow from that property and reducing net operating costs.

Bank service charges, a large portion of which includes indirect costs incurred to provide services to QCBT’s correspondent banking customer portfolio, increased 11% from the third quarter of 2016 to the third quarter of 2017 and increased 7% from the first nine months of 2016 to the first nine months of 2017. The increase was due, in large part, to the success QCBT has had in growing its correspondent banking customer portfolio. As transactions volumes continue to increase and the number of correspondent banking clients increases, the associated expenses will also increase.

In the first nine months of 2016, the Company incurred $4.2 thousand of losses on debt extinguishment, net. These losses relate to the prepayment of certain FHLB advances and wholesale structured repurchase agreements. Additionally, the Company recognized gains on extinguishment related to the repurchase of junior subordinated debentures that were acquired at a discount through auction.

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Correspondent banking expense was down 1% when comparing the third quarter of 2017 to the third quarter of 2016 and up 7% when comparing the first nine months of 2017 to the same period of 2016 due to both increases in volume and in the number of correspondent banking clients. These are direct costs incurred to provide services to QCBT’s correspondent banking customer portfolio, including safekeeping and cash management services.

Other noninterest expense was up 33% when comparing the third quarter of 2017 to the third quarter of 2016 and up 35% when comparing the first nine months of 2017 to the same period of 2016.  A large portion of that increase was due to core deposit intangible amortization.  Core deposit intangible amortization expense was up $120 thousand when comparing the third quarter of 2017 to the third quarter of 2016 and increased $482 thousand when comparing the first nine months of 2017 to the same period of 2016.  Increases were due to the acquisition of CSB.

INCOME TAXES

In the third quarter of 2017, the Company incurred income tax expense of $1.9 million. During the first nine months of the year, the Company incurred income tax expense of $6.9 million. Following is a reconciliation of the expected income tax expense to the income tax expense included in the consolidated statements of income for the three and nine months ended September 30, 2017 and 2016.

	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
	2017						2016						2017						2016
				% of						% of						% of						% of
				Pretax						Pretax						Pretax						Pretax
	Amount			Income			Amount			Income			Amount			Income			Amount			Income
Computed "expected" tax expense	$	3,421,414			35.0	%	$	2,787,998			35.0	%	$	11,463,015			35.0	%	$	8,815,741			35.0	%
Tax exempt income, net		(1,479,786	)		(15.1	)		(1,180,470	)		(14.8	)		(4,219,116	)		(12.9	)		(3,135,276	)		(12.5	)
Bank-owned life insurance		(149,802	)		(1.5	)		(157,587	)		(2.0	)		(474,968	)		(1.4	)		(463,532	)		(1.8	)
State income taxes, net of federal benefit, current year		389,200			4.0			289,287			3.6			1,191,935			3.6			853,325			3.4
Excess tax benefit on stock options exercised and restricted stock awards vested*		(190,554	)		(1.9	)		-			-			(813,421	)		(2.5	)		-			-
Other		(68,939	)		(0.8	)		118,980			1.5			(200,890	)		(0.6	)		(39,883	)		(0.2	)
Federal and state income tax expense	$	1,921,533			19.7	%	$	1,858,208			23.3	%	$	6,946,555			21.2	%	$	6,030,375			23.9	%

The effective tax rate for the quarter ended September 30, 2017 was 19.7% which was a decrease from the effective tax rate of 23.3% for the quarter ended September 30, 2016. The effective tax rate for the nine months ended September 30, 2017 was 21.2%, which was a decrease over the effective tax rate of 23.9% for the nine months ended September 30, 2016. This shift was primarily due to the implementation of ASU 2016-09, which resulted in a tax benefit of $191 thousand for the third quarter of 2017 and $813 thousand for the first nine months of 2017. The effective rate for the three months ended September 30, 2017 was also positively impacted by higher levels of tax exempt interest income.

FINANCIAL CONDITION

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

	As of
	September 30, 2017					June 30, 2017					December 31, 2016					September 30, 2016
	(dollars in thousands)
	Amount		%			Amount		%			Amount		%			Amount		%
Cash and due from banks	$	56,275		2	%	$	77,161		2	%	$	70,570		2	%	$	61,213		2	%
Federal funds sold and interest-bearing deposits		61,789		2	%		72,354		2	%		86,206		3	%		96,047		3	%
Securities		583,936		16	%		593,485		17	%		574,022		19	%		564,930		17	%
Net loans/leases		2,641,772		74	%		2,520,209		73	%		2,374,730		70	%		2,331,774		71	%
Other assets		206,691		6	%		193,978		6	%		196,416		6	%		227,022		7	%
Total assets	$	3,550,463		100	%	$	3,457,187		100	%	$	3,301,944		100	%	$	3,280,986		100	%
Total deposits	$	2,894,268		82	%	$	2,870,234		83	%	$	2,669,261		81	%	$	2,594,913		79	%
Total borrowings		296,145		8	%		230,264		7	%		290,952		9	%		312,104		10	%
Other liabilities		47,011		1	%		51,606		1	%		55,690		2	%		93,112		3	%
Total stockholders' equity		313,039		9	%		305,083		9	%		286,041		8	%		280,857		8	%
Total liabilities and stockholders' equity	$	3,550,463		100	%	$	3,457,187		100	%	$	3,301,944		100	%	$	3,280,986		100	%

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

During the third quarter of 2017, the Company’s total assets increased $93.3 million, or 3%, to a total of $3.6 billion. Total gross loans and leases grew $123.2 million. This loan and lease growth was funded by deposits, which increased $24.0 million in the third quarter of 2017, and borrowings, which increased $65.9 million in the third quarter of 2017. Stockholders’ equity increased $8.0 million, or 3%, in the current quarter due to net retained income.

INVESTMENT SECURITIES

The composition of the Company’s securities portfolio is managed to meet liquidity needs while prioritizing the impact on interest rate risk and maximizing return, while minimizing credit risk. The Company has further diversified the portfolio by decreasing U.S government sponsored agency securities, while increasingresidential mortgage-backed and related securities and tax-exempt municipal securities. Of the latter, the large majority are privately placed tax-exempt debt issuances by municipalities located in the Midwest (with some in or near the Company’s existing markets) and require a thorough underwriting process before investment.

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
	September 30, 2017						June 30, 2017						December 31, 2016						September 30, 2016
	Amount			%			Amount			%			Amount			%			Amount			%
	(dollars in thousands)
U.S. govt. sponsored agency securities	$	39,340			7	%	$	41,944			7	%	$	46,084			8	%	$	67,885			12	%
Municipal securities		379,694			65	%		381,254			64	%		374,463			65	%		360,330			64	%
Residential mortgage-backed and related securities		158,969			27	%		164,415			28	%		147,702			26	%		133,173			23	%
Other securities		5,933			1	%		5,872			1	%		5,773			1	%		3,542			1	%
	$	583,936			100	%	$	593,485			100	%	$	574,022			100	%	$	564,930			100	%
Securities as a % of Total Assets		16.45	%					17.17	%					17.38	%					17.22	%
Net Unrealized Gains (Losses) as a % of Amortized Cost		(0.16	)%					(0.33	)%					(0.87	)%					1.53	%
Duration (in years)		6.4						6.3						6.0						5.7
Quarterly Yield on investment securities (tax equivalent)		3.88	%					3.76	%					3.56	%					3.65	%

Management monitors the level of unrealized gains/losses including performing quarterly reviews of individual securities for evidence of OTTI. Management identified no OTTI in any of the periods presented.

The duration of the securities portfolio extended modestly with the TEY on the portfolio improving 32 bps over the first nine months of 2017.

The Company has not invested in private 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.

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LOANS/LEASES

Total loans/leases grew 19.2% on an annualized basis during the third quarter of 2017. The mix of the loan/lease types within the Company’s loan/lease portfolio is presented in the following table.

	As of
	September 30, 2017						June 30, 2017						December 31, 2016						September 30, 2016
	Amount			%			Amount			%			Amount			%			Amount			%
	(dollars in thousands)
C&I loans	$	1,034,531			39	%	$	942,538			37	%	$	827,637			34	%	$	804,308			35	%
CRE loans		1,157,856			43	%		1,131,906			45	%		1,093,459			46	%		1,070,305			45	%
Direct financing leases		147,063			6	%		153,337			6	%		165,419			7	%		166,924			7	%
Residential real estate loans		239,958			9	%		233,871			9	%		229,233			10	%		229,081			10	%
Installment and other consumer loans		89,605			3	%		84,047			3	%		81,666			3	%		81,918			3	%
Total loans/leases	$	2,669,013			100	%	$	2,545,699			100	%	$	2,397,414			100	%	$	2,352,536			100	%
Plus deferred loan/lease origination costs, net of fees		7,741						7,867						8,073						8,065
Less allowance		(34,982	)					(33,357	)					(30,757	)					(28,827	)
Net loans/leases	$	2,641,772					$	2,520,209					$	2,374,730					$	2,331,774

As CRE loans have historically been the Company’s largest portfolio segment, management places a strong emphasis on monitoring the composition of the Company’s CRE loan portfolio. For example, management tracks the level of owner-occupied CRE loans relative to non owner-occupied loans. Owner-occupied loans are generally considered to have less risk. As of September 30, 2017 and June 30, 2017, approximately 28% of the CRE loan portfolio was owner-occupied.

Over the past several quarters, the Company has been successful in shifting the mix of its commercial loan portfolio by adding more C&I loans. C&I loans grew $92.0 million in the current quarter, or an annualized rate of 39%.

A syndicated loan is a commercial loan provided by a group of lenders and is structured, arranged and administered by one or several commercial or investment banks known as arrangers. The nationally syndicated loans invested in by the Company consist of fully funded, highly liquid term loans for which there is a liquid secondary market. As of September 30, 2017 and December 31, 2016, the amount of nationally syndicated loans totaled $55.0 million and $46.5 million, respectively.

The Company also has several loans that are syndicated to borrowers in our existing markets or purchased from peer banks that we have a relationship with. These loans were immaterial as of September 30, 2017 and December 31, 2016.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Following is a listing of significant industries within the Company’s CRE loan portfolio:

	As of September 30,					As of June 30,					As of December 31,					As of September 30,
	2017					2017					2016					2016
	Amount		%			Amount		%			Amount		%			Amount		%
	(dollars in thousands)
Lessors of Nonresidential Buildings	$	345,387		30	%	$	344,747		30	%	$	322,337		30	%	$	308,334		28	%
Lessors of Residential Buildings		159,542		14	%		159,370		14	%		141,321		13	%		136,055		13	%
New Housing For-Sale Builders		56,390		5	%		52,277		5	%		56,711		5	%		42,858		4	%
Nonresidential Property Managers		53,231		5	%		52,947		5	%		70,914		7	%		65,640		6	%
Hotels		42,121		4	%		39,881		4	%		35,006		3	%		24,509		2	%
Land Subdivision		41,795		3	%		46,117		4	%		45,132		4	%		29,569		3	%
Nursing Care Facilities		41,264		3	%		33,607		3	%		34,768		3	%		21,823		2	%
Other *		418,126		36	%		402,960		35	%		387,270		35	%		458,519		42	%
Total CRE Loans	$	1,157,856		100	%	$	1,131,906		100	%	$	1,093,459		100	%	$	1,087,307		100	%

* “Other” consists of all other industries. None of these had concentrations greater than $23.2 million, or approximately 2% of total CRE loans in the most recent period presented.

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 meet 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.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Following is a listing of significant equipment types within the m2 loan and lease portfolio:

	As of September 30,					As of June 30,					As of December 31,					As of September 30,
	2017					2017					2016					2016
	Amount		%			Amount		%			Amount		%			Amount		%
	(dollars in thousands)
Construction - General	$	18,807		9	%	$	15,207		7	%	$	16,815		8	%	$	16,840		8	%
Trucks & Vans		18,146		8	%		16,679		8	%		13,806		7	%		12,786		6	%
Manufacturing - General		16,997		8	%		19,092		9	%		17,434		8	%		16,332		8	%
Food Processing Equipment		13,317		6	%		13,754		7	%		14,316		7	%		14,115		7	%
Computer Hardware		11,483		5	%		9,821		5	%		10,443		5	%		11,105		5	%
Marine - Travelifts		10,417		5	%		12,497		6	%		8,180		4	%		7,506		4	%
Trailers		9,272		4	%		9,611		5	%		10,003		5	%		10,112		5	%
Restaurant		7,718		4	%		7,238		3	%		7,950		4	%		8,138		4	%
Manufacturing - CNC		6,722		3	%		10,083		5	%		7,164		3	%		7,320		4	%
Other *		102,080		48	%		100,271		45	%		104,934		49	%		102,546		49	%
Total m2 loans and leases	$	214,959		100	%	$	214,253		100	%	$	211,045		100	%	$	206,800		100	%

* “Other” consists of all other equipment types. None of these had concentrations greater than 3% of total m2 loan and lease portfolio in the most recent period presented.

See Note 3 to the Consolidated Financial Statements for additional information regarding the Company’s loan and lease portfolio.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

ALLOWANCE FOR ESTIMATED LOSSES ON LOANS/LEASES

Changes in the allowance for the three and nine months ended September 30, 2017 and 2016 are presented as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
	(dollars in thousands)						(dollars in thousands)
Balance, beginning	$	33,357		$	28,097		$	30,757		$	26,141
Provisions charged to expense		2,086			1,608			6,215			4,879
Loans/leases charged off		(650	)		(987	)		(2,394	)		(2,489	)
Recoveries on loans/leases previously charged off		189			109			404			296
Balance, ending	$	34,982		$	28,827		$	34,982		$	28,827

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 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”, as described in Note 1 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, and carrying aggregate exposure in excess of $250 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 *	September 30, 2017			June 30, 2017			December 31, 2016			September 30, 2016
	(dollars in thousands)
Special Mention (Rating 6)	$	27,315		$	27,737		$	20,082		$	19,572
Substandard (Rating 7)		50,323			45,290			49,035			51,029
Doubtful (Rating 8)		-			-			-			-
	$	77,638		$	73,027		$	69,117		$	70,601
Criticized Loans **	$	77,638		$	73,027		$	69,117		$	70,601
Classified Loans ***	$	50,323		$	45,290		$	49,035		$	51,029
Criticized Loans as a % of Total Loans/Leases		2.90	%		2.86	%		2.87	%		2.99	%
Classified Loans as a % of Total Loans/Leases		1.88	%		1.77	%		2.04	%		2.16	%

* Amounts above include the government guaranteed portion, if any. For the calculation of allowance, 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.

The Company experienced a modest increase in classified loans during the first nine months of 2017. Criticized loans increased 12% during the same period due to one large non owner-occupied CRE relationship that was downgraded in the third quarter of 2017. The Company continues its strong focus on improving credit quality in an effort to limit NPLs.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

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

	As of
	September 30, 2017			June 30, 2017			December 31, 2016			September 30, 2016
Allowance / Gross Loans/Leases		1.31	%		1.31	%		1.28	%		1.22	%
Allowance / NPLs *		123.05	%		162.27	%		144.85	%		173.78	%

*NPLs consist of nonaccrual loans/leases, accruing loans/leases past due 90 days or more, and accruing TDRs.

Although management believes that the allowance at September 30, 2017 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.

In accordance with GAAP for business combination accounting, the loans acquired through the acquisition of CSB were recorded at market value; therefore, there was no allowance associated with CSB’s loans at acquisition. Management continues to evaluate the allowance needed on the acquired CSB loans factoring in the net remaining discount ($5.6 million at September 30, 2017). When factoring this remaining discount into the Company’s allowance to total loans and leases calculation, the Company’s allowance as a percentage of total loans and leases increases from 1.31% to 1.52%. This elimination of CSB’s allowance also resulted in a decrease of the allowance to NPLs ratio, as CSB’s NPLs no longer have an allowance allocated to them and instead, have a loan discount that is separate from the allowance.

See Note 3 to the Consolidated Financial Statements for additional information regarding the Company’s allowance.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

NONPERFORMING ASSETS

The table below presents the amount of NPAs and related ratios.

	As of September 30,			As of June 30,			As of December 31,			As of September 30,
	2017			2017			2016			2016
	(dollars in thousands)
Nonaccrual loans/leases (1) (2)	$	20,443		$	13,217		$	13,919		$	14,371
Accruing loans/leases past due 90 days or more		423			424			967			392
TDRs - accruing		7,563			6,915			6,347			1,825
Total NPLs		28,429			20,556			21,233			16,588
OREO		5,135			5,174			5,523			5,808
Other repossessed assets		120			123			202			353
Total NPAs	$	33,684		$	25,853		$	26,958		$	22,749
NPLs to total loans/leases		1.06	%		0.80	%		0.88	%		0.70	%
NPAs to total loans/leases plus repossessed property		1.26	%		1.01	%		1.12	%		0.96	%
NPAs to total assets		0.95	%		0.75	%		0.82	%		0.69	%

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

(2) Includes TDRs of $2.3 million at September 30, 2017, $2.2 million at June 30, 2017, $2.3 million at December 31, 2016, and $4.9 million at September 30, 2016.

.

NPAs at September 30, 2017 were $33.7 million, which was up $7.8 million from June 30, 2017 and up $10.9 million from September 30, 2016. These increases were due to the addition of one large non owner-occupied CRE relationship in the third quarter of 2017.

The ratio of NPAs to total assets was 0.95% at September 30, 2017, which was up from 0.75% at June 30, 2017, and up from 0.69% at September 30, 2016.

The large majority of the NPAs consist of nonaccrual loans/leases, accruing TDRs, and OREO. For nonaccrual loans/leases and accruing TDRs, management has thoroughly reviewed these loans/leases and has provided specific allowances as appropriate.

OREO is carried at the lower of carrying amount or fair value less costs to sell.

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

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

DEPOSITS

Deposits increased $24.0 million during the third quarter of 2017. The table below presents the composition of the Company’s deposit portfolio.

	As of
	September 30, 2017					June 30, 2017					December 31, 2016					September 30, 2016
	(dollars in thousands)
	Amount		%			Amount		%			Amount		%			Amount		%
Noninterest bearing demand deposits	$	715,537		25	%	$	760,625		27	%	$	797,415		30	%	$	764,615		30	%
Interest bearing demand deposits		1,614,894		55	%		1,526,103		52	%		1,369,226		51	%		1,298,781		50	%
Time deposits		430,270		15	%		478,580		17	%		439,169		17	%		420,470		16	%
Brokered deposits		133,567		5	%		104,926		4	%		63,451		2	%		111,047		4	%
	$	2,894,268		100	%	$	2,870,234		100	%	$	2,669,261		100	%	$	2,594,913		100	%

In an effort to strengthen the relationship and maximize the liquidity potential of its correspondent banking clients, the Company introduced an interest-bearing money market deposit account to its correspondent banking clients and this generated strong deposit growth in the first nine months of 2017.

Quarter-end balances can greatly fluctuate due to large customer and correspondent bank activity. Management will continue to focus on growing its noninterest bearing deposit portfolio, including its correspondent banking business at QCBT, as well as shifting the mix from brokered and other higher cost deposits to lower cost core deposits.

BORROWINGS

The subsidiary banks offer short-term repurchase agreements to a few of their significant customers. Also, the subsidiary banks purchase federal funds for short-term funding needs from the FRB or from their correspondent banks. The table below presents the composition of the Company’s short-term borrowings.

	As of
	September 30, 2017		June 30, 2017		December 31, 2016		September 30, 2016
	(dollars in thousands)
Overnight repurchase agreements with customers	$	3,671	$	4,897	$	8,131	$	8,265
Federal funds purchased		12,340		13,320		31,840		51,750
	$	16,011	$	18,217	$	39,971	$	60,015

The Company is nearing the completion of a process to transition its overnight repurchase agreements with customers into a comparable interest bearing demand deposit product that offers full FDIC insurance. This transition has freed up securities that were previously pledged as collateral to the overnight repurchase agreements with customers and has enhanced the Company’s ability to further rotate its earning assets from securities to loans.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

As a result of their memberships in either the FHLB of Des Moines or Chicago, the subsidiary banks have the ability to borrow funds for short or long-term purposes under a variety of programs. FHLB advances are utilized for loan matching as a hedge against the possibility of rising interest rates, and when these advances provide a less costly or more readily available source of funds than customer deposits.

The table below presents the Company’s term FHLB advances and overnight FHLB advances.

	As of
	September 30, 2017		June 30, 2017		December 31, 2016		September 30, 2016
	(dollars in thousands)
Term FHLB advances	$	58,600	$	57,000	$	63,000	$	83,343
Overnight FHLB advances		110,455		49,500		74,500		55,300
	$	169,055	$	106,500	$	137,500	$	138,643

Term FHLB advances increased in the current quarter by $1.6 million. Overnight FHLB advances have increased by $61.0 million due to the strong loan and lease growth in the second and third quarters of 2017 which has outpaced the Company’s deposit growth.

The table below presents the composition of the Company’s other borrowings.

	As of
	September 30, 2017		June 30, 2017		December 31, 2016		September 30, 2016
	(dollars in thousands)
Wholesale structured repurchase agreements	$	45,000	$	45,000	$	45,000	$	45,000
Term note	$	32,500	$	27,000	$	30,000	$	30,000
Revolving line of credit		-		-		5,000		5,000
	$	77,500	$	72,000	$	80,000	$	80,000

Other borrowings include structured repos which are utilized as an alternative funding source to FHLB advances and customer deposits. Structured repos are collateralized by certain U.S. government agency securities and residential mortgage backed and related securities.

As described in Note 11 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, the Company has an outstanding five-year term note and revolving line of credit. As of September 30, 2017, the term debt had been paid down to $25.5 million, as scheduled. Also, in the first quarter of 2017, the Company paid off the full outstanding amount of the revolving line of credit. The term note and revolving line of credit were used to help fund the acquisition of CSB. As of September 30, 2017, the full $10.0 million line of credit was available. If the line of credit is used, interest is calculated at the effective LIBOR rate plus 2.50% per annum (3.84% at September 30, 2017). In the third quarter of 2017, the Company entered into a $7.0 million term note with a four-year term and interest calculated at the effective LIBOR rate plus 3.00% per annum (4.34% at September 30, 2017) to fund a portion of the cash consideration for the acquisition of Guaranty. See further discussion in Note 8 to the Consolidated Financial Statements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

The Company executed several balance sheet restructuring strategies in 2016. Refer to Note 11 of the Annual Report on Form 10-K for the year ended December 31, 2016 for addition information regarding these prepayments.

It is management’s intention to reduce its reliance on wholesale funding, including FHLB advances, structured repos, and brokered deposits. Replacement of this funding with core deposits helps to reduce interest expense as wholesale funding tends to be higher cost. However, the Company may choose to utilize advances and/or brokered deposits to supplement funding needs, as this is a way for the Company to effectively and efficiently manage interest rate risk.

The table below presents the maturity schedule including weighted average interest cost for the Company’s combined wholesale funding portfolio.

	September 30, 2017					December 31, 2016
			Weighted					Weighted
			Average					Average
Maturity:	Amount Due		Interest Rate			Amount Due		Interest Rate
Year ending December 31:	(dollar amounts in thousands)
2017		255,486		1.33	%		165,543		0.91	%
2018		48,585		2.31			38,459		2.56
2019		16,950		2.74			16,950		2.65
2020		26,600		2.44			25,000		2.48
Total Wholesale Funding	$	347,621		1.62	%	$	245,952		1.45	%

During the first nine months of 2017, wholesale funding increased $101.7 million. Year-to-date, the Company has repaid $6.0 million of term borrowings at maturity. However, this was more than offset by growth in short-term borrowings used to temporarily fund strong earning asset growth.

STOCKHOLDERS’ EQUITY

The table below presents the composition of the Company’s stockholders’ equity.

	As of
	September 30, 2017			June 30, 2017			December 31, 2016			September 30, 2016
	Amount			Amount			Amount			Amount
	(dollars in thousands)
Common stock	$	13,202		$	13,175		$	13,107		$	13,075
Additional paid in capital		158,459			158,001			156,777			155,951
Retained earnings		142,450			135,254			118,617			110,610
AOCI (loss)		(1,072	)		(1,347	)		(2,460	)		1,221
Total stockholders' equity	$	313,039		$	305,083		$	286,041		$	280,857
TCE* / TA		8.31	%		8.29	%		8.04	%		7.92	%

*TCE is defined as total common stockholders’ equity excluding goodwill and other intangibles. This ratio is a non-GAAP financial measure. See GAAP to Non-GAAP Reconciliations.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

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 $126.4 million during the third quarter of 2017 and $139.5 million during the full year of 2016. The Company’s on balance sheet liquidity position can fluctuate based on short-term activity in deposits and loans.

The subsidiary banks have a variety of sources of short-term liquidity available to them, including federal funds purchased from correspondent banks, FHLB advances, wholesale structured repurchase agreements, brokered deposits, lines of credit, borrowing at the Federal Reserve Discount Window, sales of securities AFS, 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 securities portfolio (both residential mortgage-backed securities and municipal securities).

At September 30, 2017, the subsidiary banks had 34 lines of credit totaling $375.0 million, of which $3.0 million was secured and $372.0 million was unsecured. At September 30, 2017, the full $375.0 million was available as none was utilized for short-term borrowing needs at QCBT.

At December 31, 2016, the subsidiary banks had 33 lines of credit totaling $381.4 million, of which $34.4 million was secured and $347.0 million was unsecured. At December 31, 2016, $361.4 million was available as $20.0 million was utilized for short-term borrowing needs.

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 maintains a $10.0 million secured revolving credit note with a variable interest rate and a maturity of June 30, 2018. At September 30, 2017, the full $10.0 million was available.

As of September 30, 2017, the Company has $384.1 million in correspondent banking deposits spread over 183 relationships. While the Company believes that these funds are very stable, there is the potential for large fluctuations that can impact liquidity. Seasonality and the liquidity needs of these correspondent banks can impact balances. Management closely monitors these fluctuations and runs stress scenarios to measure the impact on liquidity and interest rate risk with various levels of correspondent deposit run-off.

Investing activities used cash of $271.1 million during the first nine months of 2017, compared to $132.1 million for the same period of 2016. The net decrease in interest-bearing deposits at financial institutions was $22.7 million for the first nine months of 2017, compared to a net increase of $24.0 million for the same period of 2016. Proceeds from calls, maturities, paydowns, and sales of securities were $92.5 million for the first nine months of 2017, compared to $219.1 million for the same period of 2016. Purchases of securities used cash of $103.5 million for the first nine months of 2017, compared to $111.6 million for the same period of 2016. The net increase in loans/leases used cash of $269.3 million for the first nine months of 2017 compared to $144.6 million for the same period of 2016.  In 2017, cash prepaid for the acquisition of Guaranty Bank was $7.8 million.  In 2016, the net cash paid for the acquisition of CSB was $69.9 million.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

Financing activities provided cash of $229.6 million for the first nine months of 2017, compared to $125.7 million for same period of 2016. Net increases in deposits totaled $225.1 million for the first nine months of 2017, compared to $227.9 million for the same period of 2016. During the first nine months of 2017, the Company’s short-term borrowings decreased $24.0 million, while they decreased $84.6 million for the same period of 2016. In the first nine months of 2017, the Company increased FHLB advances and other borrowings by $44.6 million through a mixture of term advances, proceeds from other borrowings and net change in short-term and overnight advances, while borrowing maturities and principal payments on borrowings totaled $15.5 million. In the first nine months of 2016, the Company reduced FHLB advances and borrowings by $83.8 million through a mixture of maturities, prepayments, and debt retirement. In the same period, the Company received $29.8 million of proceeds from the common stock offering of 1.2 million shares of common stock. In the first nine months of 2016, the Company received $35.0 million in cash from the proceeds of other borrowings.

Total cash provided by operating activities was $27.2 million for the first nine months of 2017, compared to $25.8 million for the same period of 2016.

Throughout its history, the Company has secured additional capital through various sources, including the issuance of common and preferred stock, as well as trust preferred securities.

The following table presents the details of the trust preferred securities outstanding as of September 30, 2017 and December 31, 2016.

Name	Date Issued	Amount Outstanding September 30, 2017		Amount Outstanding December 31, 2016		Interest Rate	Interest Rate as of September 30, 2017			Interest Rate as of December 31, 2016
QCR Holdings Statutory Trust II	February 2004	$	10,310,000	$	10,310,000	2.85% over 3-month LIBOR		4.19	%		3.85	%
QCR Holdings Statutory Trust III	February 2004		8,248,000		8,248,000	2.85% over 3-month LIBOR		4.19	%		3.85	%
QCR Holdings Statutory Trust V	February 2006		10,310,000		10,310,000	1.55% over 3-month LIBOR		2.85	%		2.43	%
Community National Statutory Trust II	September 2004		3,093,000		3,093,000	2.17% over 3-month LIBOR		3.50	%		3.17	%
Community National Statutory Trust III	March 2007		3,609,000		3,609,000	1.75% over 3-month LIBOR		3.07	%		2.71	%
		$	35,570,000	$	35,570,000	Weighted Average Rate		3.63	%		3.26	%

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 being accreted as interest expense on a level yield basis over the expected term. The original discount totaled $2.6 million. As of September 30, 2017, the remaining discount was $2.0 million.

The Company filed a universal shelf registration statement on Form S-3 with the SEC on October 27, 2016, as amended on January 11, 2017. Declared effective by the SEC on January 31, 2017, the registration statement allows the Company to offer and sell various types of securities, including common stock, preferred stock, debt securities and/or warrants, from time to time up to an aggregate amount of $100 million. The Company utilized $30.1 million of its $100 million previous shelf registration filing through the offer and sale of its common stock in the second quarter of 2016 to help fund the acquisition of CSB. This Form S-3 filing replenished the amount available to the previous level of $100 million. The specific terms and prices of any securities offered pursuant to the registration statement will be determined at the time of any future offering and described in a separate prospectus supplement, which would be filed with the SEC at the time of the particular offering, if any. There were no securities issued under this shelf registration statement during the nine months ended September 30, 2017.

The Company filed a registration statement on Form S-4 with the SEC on July 27, 2017which was  amended on August 14, 2017. In connection with the acquisition of Guaranty Bank, the Company issued 678,670 shares of common stock on October 1, 2017 pursuant to the S-4.

69

Part I

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – continued

The Company (on a consolidated basis) and the 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. Refer to Note 7 of the Consolidated Financial Statements for additional information regarding regulatory capital.

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” sections included under Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and Item 1A of Part II of this report. 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. One should not consider the risk factors to be a complete discussion of risks, uncertainties and assumptions.

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

70

Part I

Item 3

             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

In an attempt to manage the Company’s exposure to changes in interest rates, management monitors the Company’s interest rate risk. Each subsidiary bank has an asset/liability management committee of the board of directors that meets quarterly to review the bank’s interest rate risk position and profitability, and to make or recommend adjustments for consideration by the full board of each bank.

Internal asset/liability management teams consisting of members of the subsidiary banks’ management meet weekly to manage the mix of assets and liabilities to maximize earnings and liquidity and minimize interest rate and other risks. Management also reviews the subsidiary banks’ securities portfolios, formulates investment strategies, and oversees the timing and implementation of transactions to assure attainment of the board's objectives in an 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.

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.

71

Part I

Item 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - continued

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 September 30, 2017		As of December 31, 2016		As of December 31, 2015
100 basis point downward shift		-10.0%		0.0%		-1.7%		-2.1%
200 basis point upward shift		-10.0%		-3.4%		-1.2%		-2.7%
300 basis point upward shock		-25.0%		-8.0%		-1.4%		-7.1%

The simulation is well 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 September 30, 2017 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).

In 2014, the Company executed two interest rate cap transactions, each with a notional value of $15.0 million, for a total of $30.0 million. The interest rate caps purchased essentially set a ceiling to the interest rate paid on the $30.0 million of short-term FHLB advances that are being hedged, minimizing the interest rate risk associated with rising interest rates. The Company will continue to analyze and evaluate similar transactions as an alternative and cost effective way to mitigate interest rate risk.

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.

72

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) and 15d-15(e) promulgated under the Exchange Act of 1934) as of September 30, 2017. 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.

73

Part II

QCR HOLDINGS, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 1	Legal Proceedings
	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 Annual Report on Form 10-K for the year ended December 31, 2016. 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.
Item1A	Risk Factors
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

74

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 September 30, 2017 and December 31, 2016; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2017 and September 30, 2016; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and September 30, 2016; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2017 and September 30, 2016; (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and September 30, 2016; and (vi) Notes to the Consolidated Financial Statements.

75

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	November 8, 2017	/s/ Douglas M. Hultquist
		Douglas M. Hultquist, President
		Chief Executive Officer
Date	November 8, 2017	/s/ Todd A. Gipple
		Todd A. Gipple, Executive Vice President
		Chief Operating Officer
		Chief Financial Officer
Date	November 8, 2017	/s/ Elizabeth A. Grabin
		Elizabeth A. Grabin, First Vice President
		Director of Financial Reporting
		Principal Accounting Officer

76

EX-31.1

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:	November 8, 2017	/s/ Douglas M. Hultquist
		Douglas M. Hultquist
		Chief Executive Officer

EX-31.2

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:	November 8, 2017	/s/ Todd A. Gipple
		Todd A. Gipple
		Chief Operating Officer
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of QCR Holdings, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2017 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

November 8, 2017

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of QCR Holdings, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2017 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

November 8, 2017

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 02, 2017
Document Information [Line Items]
Entity Registrant Name	QCR HOLDINGS INC
Entity Central Index Key	0000906465
Trading Symbol	qcrh
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		13,888,923
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Cash and due from banks	$ 56,274,561	$ 70,569,993
Federal funds sold	20,568,000	22,257,000
Interest-bearing deposits at financial institutions	41,221,383	63,948,925
Securities held to maturity, at amortized cost	323,981,227	322,909,056
Securities available for sale, at fair value	259,954,422	251,113,139
Total securities	583,935,649	574,022,195
Loans receivable held for sale	290,320	1,135,500
Loans/leases receivable held for investment	2,676,464,491	2,404,351,485
Gross loans/leases receivable	2,676,754,811	2,405,486,985
Less allowance for estimated losses on loans/leases	(34,982,341)	(30,757,448)
Net loans/leases receivable	2,641,772,470	2,374,729,537
Bank-owned life insurance	58,614,100	57,257,051
Premises and equipment, net	61,877,754	60,643,508
Restricted investment securities	18,585,400	14,997,025
Other real estate owned, net	5,134,845	5,523,104
Goodwill	13,110,913	13,110,913
Core deposit intangible	6,688,613	7,381,213
Other assets	42,679,406	37,503,284
Total assets	3,550,463,094	3,301,943,748
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	715,537,518	797,415,090
Interest-bearing	2,178,730,964	1,871,846,183
Total deposits	2,894,268,482	2,669,261,273
Short-term borrowings	16,010,805	39,971,387
Federal Home Loan Bank advances	169,055,000	137,500,000
Other borrowings	77,500,000	80,000,000
Junior subordinated debentures	33,578,744	33,480,202
Other liabilities	47,011,435	55,690,087
Total liabilities	3,237,424,466	3,015,902,949
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value; shares authorized 250,000 September 2017 and December 2016 - No shares issued or outstanding	0	0
Common stock, $1 par value; shares authorized 20,000,000 September 2017 - 13,201,959 shares issued and outstanding December 2016 - 13,106,845 shares issued and outstanding	13,201,959	13,106,845
Additional paid-in capital	158,459,072	156,776,642
Retained earnings	142,450,131	118,616,901
Accumulated other comprehensive (loss):
Securities available for sale	(250,107)	(1,527,433)
Interest rate cap derivatives	(822,427)	(932,156)
Total stockholders' equity	313,038,628	286,040,799
Total liabilities and stockholders' equity	$ 3,550,463,094	$ 3,301,943,748

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	250,000	250,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	13,201,959	13,106,845
Common stock, shares outstanding (in shares)	13,201,959	13,106,845

XML

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest and dividend income:
Loans/leases, including fees	$ 29,245,320	$ 23,001,107	$ 84,571,466	$ 62,939,656
Securities:
Taxable	1,367,212	1,057,204	3,770,022	3,605,948
Nontaxable	2,862,208	2,510,169	8,198,173	7,028,387
Interest-bearing deposits at financial institutions	141,331	103,216	559,697	225,775
Restricted investment securities	172,776	132,047	435,096	396,157
Federal funds sold	52,018	12,992	104,778	36,155
Total interest and dividend income	33,840,865	26,816,735	97,639,232	74,232,078
Interest expense:
Deposits	3,556,189	1,472,031	8,779,548	4,106,227
Short-term borrowings	33,248	12,541	76,365	73,672
Federal Home Loan Bank advances	607,751	420,570	1,365,433	1,278,207
Other borrowings	724,854	974,634	2,103,731	2,624,154
Junior subordinated debentures	362,475	306,182	1,042,227	912,706
Total interest expense	5,284,517	3,185,958	13,367,304	8,994,966
Net interest income	28,556,348	23,630,777	84,271,928	65,237,112
Provision for loan/lease losses	2,086,436	1,607,986	6,214,538	4,878,821
Net interest income after provision for loan/lease losses	26,469,912	22,022,791	78,057,390	60,358,291
Noninterest income:
Trust department fees	1,721,401	1,518,600	5,153,609	4,606,590
Investment advisory and management fees	968,452	765,977	2,798,886	2,117,100
Deposit service fees	1,522,461	1,150,869	4,297,210	3,028,758
Gains on sales of residential real estate loans, net	98,409	144,105	307,360	288,904
Gains on sales of government guaranteed portions of loans, net	91,974	218,785	1,129,668	2,701,203
Swap fee income	194,256	333,772	635,353	1,358,312
Securities gains (losses), net	(63,588)	4,251,773	(25,124)	4,628,283
Earnings on bank-owned life insurance	428,002	450,251	1,357,049	1,324,380
Debit card fees	754,803	475,182	2,201,125	1,126,581
Correspondent banking fees	239,060	253,823	684,306	800,892
Other	746,073	860,264	2,228,133	2,027,272
Total noninterest income	6,701,303	10,423,401	20,767,575	24,008,275
Noninterest expense:
Salaries and employee benefits	13,423,943	11,202,460	39,662,218	32,920,840
Occupancy and equipment expense	2,516,274	2,086,331	7,716,829	5,797,875
Professional and data processing fees	2,950,839	1,931,329	7,374,930	4,921,064
Acquisition costs	407,997	1,036,904	407,997	1,363,987
Post-acquisition transition and integration costs	522,740	1,009,132	522,740	1,037,018
FDIC insurance, other insurance and regulatory fees	690,894	582,835	1,957,413	1,866,804
Loan/lease expense	257,540	102,678	811,362	419,846
Net cost of (income from) operations of other real estate	(160,640)	133,055	(118,453)	513,149
Advertising and marketing	669,923	547,768	1,846,942	1,367,478
Bank service charges	460,153	415,401	1,331,499	1,246,682
Losses on debt extinguishment, net		4,137,310		4,220,507
Correspondent banking expense	204,189	205,998	604,233	564,763
Other	1,451,895	1,089,282	3,955,783	2,938,721
Total noninterest expense	23,395,747	24,480,483	66,073,493	59,178,734
Net income before income taxes	9,775,468	7,965,709	32,751,472	25,187,832
Federal and state income tax expense	1,921,533	1,858,208	6,946,555	6,030,375
Net income	$ 7,853,935	$ 6,107,501	$ 25,804,917	$ 19,157,457
Basic earnings (loss) per common share (in dollars per share) (in dollars per share)	$ 0.60	$ 0.47	$ 1.96	$ 1.55
Diluted earnings (loss) per common share (in dollars per share) (in dollars per share)	$ 0.58	$ 0.46	$ 1.91	$ 1.52
Weighted average common shares outstanding (in shares)	13,151,350	13,066,777	13,151,672	12,398,491
Weighted average common and common equivalent shares outstanding (in shares)	13,507,955	13,269,703	13,509,566	12,580,042
Common cash dividends declared (in dollars per share)	$ 0.05	$ 0.04	$ 0.15	$ 0.12

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net income	$ 7,853,935	$ 6,107,501	$ 25,804,917	$ 19,157,457
Unrealized holding gains arising during the period before tax	289,086	3,682,514	2,057,586	10,628,032
Less reclassification adjustment for gains (losses) included in net income before tax	(63,588)	4,251,773	(25,124)	4,628,283
	352,674	(569,259)	2,082,710	5,999,749
Unrealized holding losses arising during the period before tax	(8,446)	(49,573)	(186,000)	(634,791)
Less reclassification adjustment for ineffectiveness and caplet amortization before tax	(95,361)	(33,246)	(354,813)	(82,281)
	86,915	(16,327)	168,813	(552,510)
Other comprehensive income (loss), before tax	439,589	(585,586)	2,251,523	5,447,239
Tax expense (benefit)	165,012	(224,402)	864,468	2,102,379
Other comprehensive income (loss), net of tax	274,577	(361,184)	1,387,055	3,344,860
Comprehensive income	$ 8,128,512	$ 5,746,317	$ 27,191,972	$ 22,502,317

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2015	$ 11,761,083	$ 123,282,851	$ 92,965,645	$ (2,123,829)	$ 225,885,750
Net income			6,373,489		6,373,489
Other comprehensive income (loss), net of tax				2,525,411	2,525,411
Common cash dividends declared			(470,873)		(470,873)
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan	5,054	94,560			99,614
Proceeds from issuance of common stock, stock options exercised	46,020	729,473			775,493
Stock compensation expense		382,761			382,761
Restricted stock awards - common stock	22,382	(22,382)
Exchange of common stock	(19,628)	(431,806)			(451,434)
Tax benefit of nonqualified stock options exercised		22,508			22,508
Balance at Mar. 31, 2016	11,814,911	124,057,965	98,868,261	401,582	235,142,719
Balance at Dec. 31, 2015	11,761,083	123,282,851	92,965,645	(2,123,829)	225,885,750
Net income					19,157,457
Other comprehensive income (loss), net of tax					3,344,860
Tax basis adjustment related to the acquisition of noncontrolling interest in m2 Lease Funds					2,132,415
Balance at Sep. 30, 2016	13,075,307	155,950,678	110,610,144	1,221,031	280,857,160
Balance at Mar. 31, 2016	11,814,911	124,057,965	98,868,261	401,582	235,142,719
Net income			6,676,467		6,676,467
Other comprehensive income (loss), net of tax				1,180,633	1,180,633
Common cash dividends declared			(520,701)		(520,701)
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan	6,982	142,887			149,869
Proceeds from issuance of common stock, stock options exercised	20,975	230,671			251,646
Stock compensation expense		187,569			187,569
Restricted stock awards - common stock	(500)	500
Tax benefit of nonqualified stock options exercised		87,858			87,858
Proceeds from issuance of common stock, net of issuance costs	1,215,000	28,613,916			29,828,916
Tax basis adjustment related to the acquisition of noncontrolling interest in m2 Lease Funds		2,132,415			2,132,415
Balance at Jun. 30, 2016	13,057,368	155,453,781	105,024,027	1,582,215	275,117,391
Net income			6,107,501		6,107,501
Other comprehensive income (loss), net of tax				(361,184)	(361,184)
Common cash dividends declared			(521,384)		(521,384)
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan	4,085	85,217			89,302
Proceeds from issuance of common stock, stock options exercised	14,692	173,890			188,582
Stock compensation expense		190,211			190,211
Exchange of common stock	(838)	(25,115)			(25,953)
Tax benefit of nonqualified stock options exercised		72,694			72,694
Balance at Sep. 30, 2016	13,075,307	155,950,678	110,610,144	1,221,031	280,857,160
Balance at Dec. 31, 2016	13,106,845	156,776,642	118,616,901	(2,459,589)	286,040,799
Net income			9,184,965		9,184,965
Other comprehensive income (loss), net of tax				410,739	410,739
Common cash dividends declared			(656,574)		(656,574)
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan	3,573	83,091			86,664
Proceeds from issuance of common stock, stock options exercised	44,284	630,290			674,574
Stock compensation expense		388,753			388,753
Restricted stock awards - common stock	13,289	(13,289)
Exchange of common stock	(6,772)	(283,518)			(290,290)
Balance at Mar. 31, 2017	13,161,219	157,581,969	127,145,292	(2,048,850)	295,839,630
Balance at Dec. 31, 2016	13,106,845	156,776,642	118,616,901	(2,459,589)	286,040,799
Net income					25,804,917
Other comprehensive income (loss), net of tax					1,387,055
Tax basis adjustment related to the acquisition of noncontrolling interest in m2 Lease Funds
Balance at Sep. 30, 2017	13,201,959	158,459,072	142,450,131	(1,072,534)	313,038,628
Balance at Mar. 31, 2017	13,161,219	157,581,969	127,145,292	(2,048,850)	295,839,630
Net income			8,766,017		8,766,017
Other comprehensive income (loss), net of tax				701,739	701,739
Common cash dividends declared			(657,003)		(657,003)
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan	4,582	170,061			174,643
Proceeds from issuance of common stock, stock options exercised	8,027	109,392			117,419
Stock compensation expense		168,314			168,314
Restricted stock awards - common stock	2,000	(2,000)
Exchange of common stock	(594)	(26,730)			(27,324)
Balance at Jun. 30, 2017	13,175,234	158,001,006	135,254,306	(1,347,111)	305,083,435
Net income			7,853,935		7,853,935
Other comprehensive income (loss), net of tax				274,577	274,577
Common cash dividends declared			(658,110)		(658,110)
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan	2,319	88,052			90,371
Proceeds from issuance of common stock, stock options exercised	19,906	73,915			93,821
Stock compensation expense		300,599			300,599
Restricted stock awards - common stock	4,500	(4,500)
Balance at Sep. 30, 2017	$ 13,201,959	$ 158,459,072	$ 142,450,131	$ (1,072,534)	$ 313,038,628

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Retained Earnings [Member]
Common cash dividends declared (in dollars per share)	$ 0.05	$ 0.05	$ 0.05
Common Stock [Member]
Common cash dividends declared (in dollars per share)				$ 0.04	$ 0.04	$ 0.04
Proceeds from issuance of shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan, shares (in shares)	2,319	4,582	3,573	4,085	6,982	5,054
Proceeds from issuance of common stock, stock options exercised, shares (in shares)	19,906	8,027	44,284	14,692	20,975	46,020
Restricted stock awards - common stock, shares (in shares)	4,500	2,000	13,289		500	22,382
Exchange of common stock, shares (in shares)		594	6,772	838		19,628
Proceeds from issuance of common stock, net of issuance costs, shares (in shares)					1,215,000
Common cash dividends declared (in dollars per share)	$ 0.05			$ 0.04

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016		Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 7,853,935	$ 6,107,501		$ 25,804,917	$ 19,157,457
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation				2,810,971	2,422,257
Provision for loan/lease losses	2,086,436	1,607,986		6,214,538	4,878,821
Stock-based compensation expense				857,666	760,541
Deferred compensation expense accrued				1,098,741	910,439
Losses (gains) on other real estate owned, net				(154,743)	130,280
Amortization of premiums on securities, net				1,330,946	968,553
Securities losses (gains), net				25,124	(4,628,283)
Loans originated for sale				(40,423,117)	(57,160,485)
Proceeds on sales of loans				42,705,325	59,838,717
Gains on sales of residential real estate loans	(98,409)	(144,105)		(307,360)	(288,904)
Gains on sales of government guaranteed portions of loans	(91,974)	(218,785)		(1,129,668)	(2,701,203)
Losses on debt extinguishment, net		4,137,310			4,220,507
Amortization of core deposit intangible				692,600	210,469
Accretion of acquisition fair value adjustments, net				(4,063,435)	(690,379)
Increase in cash value of bank-owned life insurance				(1,357,049)	(1,324,380)
Decrease (increase) in other assets				1,666,921	(2,480,461)
Increase (decrease) in other liabilities				(8,610,333)	1,614,477
Net cash provided by operating activities				27,162,044	25,838,423
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease (increase) in federal funds sold				1,689,000	(474,000)
Net decrease (increase) in interest-bearing deposits at financial institutions				22,727,542	(23,981,295)
Proceeds from sales of other real estate owned				829,213	1,913,775
Activity in securities portfolio:
Purchases				(103,509,208)	(111,622,489)
Calls, maturities and redemptions				40,435,714	109,421,584
Paydowns				30,123,674	21,939,878
Sales				21,969,870	87,772,898
Activity in restricted investment securities:
Purchases				(3,788,275)	(25,700)
Redemptions				199,900	1,375,100
Net increase in loans/leases originated and held for investment				(269,891,345)	(144,605,204)
Purchase of premises and equipment				(4,045,217)	(3,871,166)
Net cash used in investing activities				(271,062,552)	(132,061,974)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts				225,109,315	227,918,002
Net decrease in short-term borrowings				(23,960,582)	(84,647,299)
Activity in Federal Home Loan Bank advances:
Term advances				1,600,000
Calls and maturities				(6,000,000)	(19,000,000)
Net change in short-term and overnight advances				35,955,000	1,300,000
Prepayments					(10,524,197)
Activity in other borrowings:
Proceeds from other borrowings				7,000,000	35,000,000
Calls, maturities and scheduled principal payments				(9,500,000)
Prepayments					(50,320,407)
Retirement of junior subordinated debentures					(3,955,000)
Payment of cash dividends on common stock				(1,836,150)	(1,460,157)
Net cash provided by financing activities				229,605,075	125,694,364
Net increase (decrease) in cash and due from banks				(14,295,433)	19,470,813
Cash and due from banks, beginning				70,569,993	41,742,321
Cash and due from banks, ending	56,274,560	61,213,134		56,274,560	61,213,134
Supplemental disclosure of cash flow information, cash payments for:
Interest				13,140,273	9,081,850
Income/franchise taxes				10,881,610	9,487,002
Supplemental schedule of noncash investing activities:
Change in accumulated other comprehensive income, unrealized gains on securities available for sale and derivative instruments, net				1,387,055	3,344,860
Exchange of shares of common stock in connection with payroll taxes for restricted stock and in connection with stock options exercised				(317,614)	(477,387)
Tax benefit of nonqualified stock options exercised					183,060
Transfers of loans to other real estate owned				286,212	51,000
Due from broker for sales of securities					32,078,011
Due to broker for purchases of securities				1,300,000	15,190,000
Due to counterparties for prepayment of FHLB advances and other borrowings					(24,575,903)
Dividends payable				658,110	521,384
Tax basis adjustment related to the acquisition of noncontrolling interest in m2 Lease Funds					2,132,415
Increase in the fair value of interest rate swap assets and liabilities				264,721	6,341,738
Consideration paid:
Goodwill	13,110,913	13,631,626		13,110,913	13,631,626
Common Stock Offering 1 [Member]
Activity in other borrowings:
Proceeds from issuance of common stock, net					29,828,916
Common Stock Offering 2 [Member]
Activity in other borrowings:
Proceeds from issuance of common stock, net				1,237,492	1,554,506
Community State Bank [Member]
Activity in restricted investment securities:
Net cash paid for acquisition					(69,905,355)
Fair value of assets acquired:
Cash and due from banks		10,094,645	[1]		10,094,645	[1]
Federal funds sold		698,000			698,000
Interest-bearing deposits at financial institutions		14,730,157			14,730,157
Securities		102,640,029			102,640,029
Loans/leases receivable held for investment, net		419,029,277			419,029,277
Premises and equipment, net		20,684,880			20,684,880
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		6,352,653			6,352,653
Restricted investment securities		1,512,900			1,512,900
Other real estate owned		650,000			650,000
Other assets		4,763,224			4,763,224
Total assets acquired		581,155,765			581,155,765
Fair value of liabilities assumed:
Deposits		486,298,262			486,298,262
FHLB advances		20,368,877			20,368,877
Other liabilities		4,897,564			4,897,564
Total liabilities assumed		511,564,703			511,564,703
Net assets acquired		69,591,062			69,591,062
Consideration paid:
Cash paid					80,000,000	[1]
Total consideration paid					80,000,000
Goodwill		$ 10,408,938			10,408,938
Guaranty Bank and Trust Company [Member]
Activity in restricted investment securities:
Net cash paid for acquisition				$ (7,803,420)

[1] Net cash paid at closing totaled $69,905,355

XML

Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - shares	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Common Stock Offering 1 [Member]
Proceeds from issuance of common stock, net, shares (in shares)		1,215,000

XML

Note 1 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

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, 2016,

included in the Company’s Annual Report on Form

10

-K filed with the SEC on

March 10, 2017.

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

GAAP for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form

10

-Q and Rule

10

-

01

of Regulation S-

X.

Such information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. Any differences appearing between the numbers presented in financial statements and management’s discussion and analysis are due to rounding. The results of the interim period ended

September 30, 2017,

are

not

necessarily indicative of the results expected for the year ending

December 31, 2017,

or for any other period.

The acronyms and abbreviations identified below are used

throughout this Quarterly Report on Form

10

-Q. It

may

be helpful to refer back to this page as you read this report.

Allowance: Allowance for estimated losses on loans/leases	Guaranty Bank: Guaranty Bank and Trust Company
AOCI: Accumulated other comprehensive income (loss)	HTM: Held to maturity
AFS: Available for sale	m2: m2 Lease Funds, LLC
ASC: Accounting Standards Codification	NIM: Net interest margin
ASU: Accounting Standards Update	NPA: Nonperforming asset
BOLI: Bank-owned life insurance	NPL: Nonperforming loan
Caps: Interest rate cap derivatives	OREO: Other real estate owned
Community National: Community National Bancorporation	OTTI: Other-than-temporary impairment
CRBT: Cedar Rapids Bank & Trust Company	PCI: Purchased credit impaired
CRE: Commercial real estate	Provision: Provision for loan/lease losses
CSB: Community State Bank	QCBT: Quad City Bank & Trust Company
C&I: Commercial and industrial	RB&T: Rockford Bank & Trust Company
Dodd-Frank Act: Dodd-Frank Wall Street Reform and	ROAA: Return on Average Assets
Consumer Protection Act	SBA: U.S. Small Business Administration
EPS: Earnings per share	SEC: Securities and Exchange Commission
Exchange Act: Securities Exchange Act of 1934, as amended	TA: Tangible assets
FASB: Financial Accounting Standards Board	TCE: Tangible common equity
FDIC: Federal Deposit Insurance Corporation	TDRs: Troubled debt restructurings
FHLB: Federal Home Loan Bank	TEY: Tax equivalent yield
FRB: Federal Reserve Bank of Chicago	The Company: QCR Holdings, Inc.
GAAP: Generally Accepted Accounting Principles	USDA: U.S. Department of Agriculture
Guaranty: Guaranty Bankshares, Ltd.

The consolidated financial statements include the accounts of the Company and its

wholly-owned subsidiaries which include

four

commercial banks: QCBT, CRBT, CSB and RB&T. All are state-chartered commercial banks and all are members of the Federal Reserve system. The Company also engages in direct financing lease contracts through

m2,

a wholly-owned subsidiary of QCBT. All material intercompany transactions and balances have been eliminated in consolidation.

T

he acquisition of CSB occurred on

August 31, 2016;

therefore, the financial results of CSB for the periods since acquisition are included in this report.

On

October 2, 2017,

the Company announced the completion of its previously announced acquisition of Guaranty Bank, headquartered in Cedar Rapids, Iowa, from Guaranty. The financial results of Guaranty Bank are

not

included in this report because the closing was effective

October 1, 2017.

See Note

8

to the Consolidated Financial Statements for additional information about the acquisition.

Recent accounting developments

: In

May 2014,

FASB issued ASU

2014

-

09,

Revenue from Contracts with Customers

. ASU

2014

-

09

implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU

2014

-

09

is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU

2014

-

09

was originally effective for the Company on

January 1, 2017;

however, FASB issued ASU

2015

-

14

which defers the effective date in order to provide additional time for both public and private entities to evaluate the impact. ASU

2014

-

09

will now be effective for the Company on

January 1, 2018

and it is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

January 2016,

FASB issued ASU

2016

-

01,

Financial Instruments–Overall

. ASU

2016

-

01

makes targeted adjustments to GAAP by eliminating the AFS classification for equity securities and requiring equity investments to be measured at fair value with changes in fair value recognized in net income. The standard also requires public business entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. The standard clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to AFS securities in combination with the entity’s other deferred tax assets. It also requires an entity to present separately (within other comprehensive income) the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Additionally, the standard eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU

2016

-

01

is effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years, and it is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases

. Under ASU

2016

-

02,

lessees will be required to recognize a lease liability measured on a discounted basis and a right-of-use asset for all leases (with the exception of short-term leases). Lessor accounting is largely unchanged under ASU

2016

-

02.

However, the definition of initial direct costs was updated to include only initial direct costs that are considered incremental. This change in definition will change the manner in which the Company recognizes the costs associated with originating leases. ASU

2016

-

02

is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company is in the process of analyzing the impact of adoption on the Company’s consolidated financial statements.

In

June 2016,

the

FASB issued ASU

2016

-

13,

Financial Instruments – Credit Losses

. Under the standard, assets measured at amortized costs (including loans, leases and AFS securities) will be presented at the net amount expected to be collected. Rather than the “incurred” model that is currently being utilized, the standard will require the use of a forward-looking approach to recognizing all expected credit losses at the beginning of an asset’s life. For public companies, ASU

2016

-

13

is effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Companies

may

choose to early adopt for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. The Company is in the process of analyzing the impact of adoption on the Company’s consolidated financial statements.

Effective

January 1, 2017,

the Company adopted ASU

2016

-

09,

Compensation – Stock Compensation

. Under the standard, the excess tax benefit (deficiency) related to stock options exercised and restricted stock awards vested is recorded as an adjustment to income tax expense. In the past, this tax benefit (deficiency) was recorded directly to equity. This change in accounting resulted in

$191

thousand of reduced income tax in the

third

quarter of

2017

and

$814

thousand of reduced income tax expense in the

first

nine

months of

2017.

XML

Note 2 - Investment Securities

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Investment Holdings [Text Block]

NOTE

2

– INVESTMENT SECURITIES

The amortized cost and fair value of

investment securities as of

September 30, 2017

and

December 31, 2016

are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2017:
Securities HTM:
Municipal securities	$	322,931,227	$	2,084,997	$	(2,629,646	)	$	322,386,578
Other securities		1,050,000		-		-			1,050,000
	$	323,981,227	$	2,084,997	$	(2,629,646	)	$	323,436,578
Securities AFS:
U.S. govt. sponsored agency securities	$	39,340,306	$	129,768	$	(129,906	)	$	39,340,168
Residential mortgage-backed and related securities		160,329,128		266,806		(1,627,425	)		158,968,509
Municipal securities		56,621,412		435,356		(293,708	)		56,763,060
Other securities		4,077,128		826,135		(20,578	)		4,882,685
	$	260,367,974	$	1,658,065	$	(2,071,617	)	$	259,954,422
December 31, 2016:
Securities HTM:
Municipal securities	$	321,859,056	$	2,200,577	$	(4,694,734	)	$	319,364,899
Other securities		1,050,000		-		-			1,050,000
	$	322,909,056	$	2,200,577	$	(4,694,734	)	$	320,414,899
Securities AFS:
U.S. govt. sponsored agency securities	$	46,281,306	$	132,886	$	(330,585	)	$	46,083,607
Residential mortgage-backed and related securities		150,465,222		174,993		(2,938,088	)		147,702,127
Municipal securities		52,816,541		425,801		(637,916	)		52,604,426
Other securities		4,046,332		703,978		(27,331	)		4,722,979
	$	253,609,401	$	1,437,658	$	(3,933,920	)	$	251,113,139

The Company

’s HTM municipal securities consist largely of private issues of municipal debt. The large majority of the municipalities are located within the Midwest. 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 private 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 unre

alized loss position as of

September 30, 2017

and

December 31, 2016,

are summarized as follows:

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2017:
Securities HTM:
Municipal securities	$	17,779,999	$	(254,147	)	$	68,663,362	$	(2,375,499	)	$	86,443,361	$	(2,629,646	)
Securities AFS:
U.S. govt. sponsored agency securities	$	23,607,646	$	(129,906	)	$	-	$	-		$	23,607,646	$	(129,906	)
Residential mortgage-backed and related securities		111,996,030		(1,255,971	)		12,648,688		(371,454	)		124,644,718		(1,627,425	)
Municipal securities		18,776,501		(169,253	)		12,872,616		(124,455	)		31,649,117		(293,708	)
Other securities		928,772		(20,578	)		-		-			928,772		(20,578	)
	$	155,308,949	$	(1,575,708	)	$	25,521,304	$	(495,909	)	$	180,830,253	$	(2,071,617	)
December 31, 2016:
Securities HTM:
Municipal securities	$	122,271,533	$	(4,076,647	)	$	13,010,803	$	(618,087	)	$	135,282,336	$	(4,694,734	)
Securities AFS:
U.S. govt. sponsored agency securities	$	21,788,139	$	(257,640	)	$	5,499,012	$	(72,945	)	$	27,287,151	$	(330,585	)
Residential mortgage-backed and related securities		121,506,582		(2,641,664	)		7,437,615		(296,424	)		128,944,197		(2,938,088	)
Municipal securities		34,152,822		(618,462	)		338,099		(19,454	)		34,490,921		(637,916	)
Other securities		3,177,414		(27,331	)		-		-			3,177,414		(27,331	)
	$	180,624,957	$	(3,545,097	)	$	13,274,726	$	(388,823	)	$	193,899,683	$	(3,933,920	)

At

September 30, 2017,

the investment portfolio included

567

securities. Of this number,

203

securities were in an unrealized loss position. The aggregate losses of these securities totaled approximately

0.8%

of the total amortized cost of the portfolio. Of these

203

securities,

80

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 lacks the intent to sell these securities and it is

not

more-likely-than-

not

that the Company will be required to sell these debt securities before their anticipated recovery. At

September 30, 2017

and

December 31, 2016,

equity securities represented less than

1%

of the total portfolio.

The Company did

not

recognize

OTTI on any debt or equity securities for the

three

or

nine

months ended

September 30, 2017

and

2016.

   

All sales of securities for the

three

and

nine

months ended

September 30, 2017

and

2016

were from securities identified as AFS. Information on proceeds received, as well as pre-tax gross gains and losses from sales on those securities are as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Proceeds from sales of securities*	$	8,415,795		$	58,775,764		$	21,969,870		$	119,850,909
Pre-tax gross gains from sales of securities		6,312			4,281,828			65,880			4,815,373
Pre-tax gross losses from sales of securities		(69,900	)		(30,055	)		(91,004	)		(187,090	)

* Proceeds from sales of securities for the nine months ended September 30, 2016 includes $32.1 million receivable from the broker for the sale of securities

The amortized cost and fai

r value of securities as of

September 30, 2017

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 prepaid without any penalties. Therefore, these securities are

not

included in the maturity categories in the following table. “Other securities” AFS are excluded from the maturity categories as there is

no

fixed maturity date for those securities.

	Amortized Cost		Fair Value
Securities HTM:
Due in one year or less	$	2,940,492	$	2,940,378
Due after one year through five years		18,268,264		18,374,059
Due after five years		302,772,471		302,122,141
	$	323,981,227	$	323,436,578
Securities AFS:
Due in one year or less	$	3,135,008	$	3,143,223
Due after one year through five years		26,545,903		26,712,930
Due after five years		66,280,807		66,247,075
		95,961,718		96,103,228
Residential mortgage-backed and related securities		160,329,128		158,968,509
Other securities		4,077,128		4,882,685
	$	260,367,974	$	259,954,422

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. These callable securities are summarized as follows:

	Amortized Cost		Fair Value
Securities HTM:
Municipal securities	$	170,900,193	$	171,633,005
Securities AFS:
U.S. govt. sponsored agency securities		5,048,652		5,033,292
Municipal securities		45,727,004		45,640,630
	$	50,775,656	$	50,673,922

As of

September 30, 2017,

the Company’s municipal securities portfolios were comprised of general obligation bonds issued by

119

issuers with fair values totaling

$100.4

million and revenue bonds issued by

132

issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling

$278.7

million. The Company held investments in general obligation bonds in

21

states, including

six

states in which the aggregate fair value exceeded

$5.0

million. The Company held investments in revenue bonds in

14

states, including

six

states in which the aggregate fair value exceeded

$5.0

million.

As of

December 31,

201

6,

the Company’s municipal securities portfolios were comprised of general obligation bonds issued by

116

issuers with fair values totaling

$116.5

million and revenue bonds issued by

120

issuers, primarily consisting of states, counties, towns, villages and school districts with fair values totaling

$255.5

million. The Company held investments in general obligation bonds in

21

states, including

five

states in which the aggregate fair value exceeded

$5.0

million. The Company held investments in revenue bonds in

12

states, including

six

states in which the aggregate fair value exceeded

$5.0

million.

The amortized cost and fair values of the Company

’s portfolio of general obligation bonds are summarized in the following tables by the issuer’s state:

September 30, 2017:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
North Dakota		7	$	21,625,068	$	21,593,895	$	3,084,842
Illinois		21		18,319,644		18,501,854		881,041
Iowa		21		17,990,978		17,993,895		856,852
Missouri		16		8,956,396		8,983,511		561,469
Ohio		9		8,289,069		8,180,432		908,937
Texas		10		6,609,101		6,543,660		654,366
Other		35		18,520,725		18,626,763		532,193
Total general obligation bonds		119	$	100,310,981	$	100,424,010	$	843,899

December 31, 2016:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Iowa		27	$	32,258,612	$	32,231,936	$	1,193,775
Illinois		19		29,214,559		29,308,438		1,542,549
North Dakota		7		22,169,050		21,499,075		3,071,296
Missouri		14		8,291,192		8,323,245		594,518
Ohio		8		6,790,398		6,651,897		831,487
Other		41		18,481,496		18,458,044		450,196
Total general obligation bonds		116	$	117,205,307	$	116,472,635	$	1,004,074

The amortized cost and fair values of the Company

’s portfolio of revenue bonds are summarized in the following tables by the issuer’s state:

September 30, 2017:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Missouri		55	$	107,274,712	$	107,108,520	$	1,947,428
Iowa		28		62,468,124		62,615,875		2,236,281
Indiana		23		50,080,705		49,560,095		2,154,787
Ohio		5		19,674,376		19,523,478		3,904,696
Kansas		6		12,877,308		12,879,871		2,146,645
North Dakota		5		11,496,420		11,471,544		2,294,309
Other		10		15,370,013		15,566,245		1,556,625
Total revenue bonds		132	$	279,241,658	$	278,725,628	$	2,111,558

December 31, 2016:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Missouri		47	$	90,784,441	$	89,664,013	$	1,907,745
Iowa		31		70,788,393		71,142,393		2,294,916
Indiana		22		47,994,737		47,582,138		2,162,824
Kansas		6		13,476,366		13,427,491		2,237,915
North Dakota		4		8,089,067		7,796,381		1,949,095
Ohio		3		13,650,000		13,405,222		4,468,407
Other		7		12,687,286		12,479,052		1,782,722
Total revenue bonds		120	$	257,470,290	$	255,496,690	$	2,129,139

Both general obligation and revenue bonds are diversified across many issuers. As of

September 30, 2017

and

December 31, 2016,

the Company did

not

hold general obligation or revenue bonds of any single issuer, the aggregate book or market value of which exceeded

5%

of the Company’s stockholders’ equity. Of the general obligation and revenue bonds in the Company’s portfolio, the majority are unrated bonds that represent small, private issuances. All unrated bonds were underwritten according to loan underwriting standards and have an average loan risk rating of

2,

indicating very high quality. Additionally, many of these bonds are funding essential municipal services such as water, sewer, education, and medical facilities.

The Company

’s municipal securities are owned by each of the

four

charters, whose investment policies set forth limits for various subcategories within the municipal securities portfolio. Each charter is monitored individually, and as of

September 30, 2017,

all were well within policy limitations approved by the board of directors. Policy limits are calculated as a percentage of each charter’s total risk-based capital.

As of

September 30, 2017,

the Company’s standard monitoring of its municipal securities portfolio had

not

uncovered any facts or circumstances resulting in significantly different credit ratings than those assigned by a nationally recognized statistical rating organization, or in the case of unrated bonds, the rating assigned using the credit underwriting standards.

XML

Note 3 - Loans Leases Receivable

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Financing Receivables [Text Block]

NOTE

3

– LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of

September 30, 2017

and

December 31, 2016

is presented as follows:

	As of September 30,			As of December 31,
	2017			2016
C&I loans***	$	1,034,530,786		$	827,637,263
CRE loans
Owner-occupied CRE		327,144,766			332,387,621
Commercial construction, land development, and other land		168,992,704			165,149,491
Other non owner-occupied CRE		661,718,193			595,921,748
Direct financing leases *		147,062,893			165,419,360
Residential real estate loans **		239,957,916			229,233,104
Installment and other consumer loans		89,605,855			81,665,695
		2,669,013,113			2,397,414,282
Plus deferred loan/lease origination costs, net of fees		7,741,698			8,072,703
		2,676,754,811			2,405,486,985
Less allowance		(34,982,341	)		(30,757,448	)
	$	2,641,772,470		$	2,374,729,537
* Direct financing leases:
Net minimum lease payments to be received	$	162,728,461		$	184,274,802
Estimated unguaranteed residual values of leased assets		1,085,154			1,085,154
Unearned lease/residual income		(16,750,722	)		(19,940,596	)
		147,062,893			165,419,360
Plus deferred lease origination costs, net of fees		4,800,719			5,881,778
		151,863,612			171,301,138
Less allowance		(2,652,758	)		(3,111,898	)
	$	149,210,854		$	168,189,240

*

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, which is combined with 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

and

nine

months ended

September 30, 2017

and

2016.

**Includes residential real estate loans h

eld for sale totaling

$290,320

and

$1,135,500

as of

September 30, 2017,

and

December 31, 2016,

respectively.

*** Includes equipment financing agreements outstanding at

m2

totaling

$60,981,381

and

$38,668,209

as of

September 30, 2017

and

December 31, 2016,

respectively.

Changes in accretable yield for acquired loans were as follows:

	Three months ended September 30, 2017									Nine months ended September 30, 2017
	PCI			Performing						PCI			Performing
	Loans			Loans			Total			Loans			Loans			Total
Balance at the beginning of the period	$	(83,860	)	$	(5,325,471	)	$	(5,409,331	)	$	(194,306	)	$	(9,115,614	)	$	(9,309,920	)
Accretion recognized		25,158			658,547			683,705			135,604			4,448,690			4,584,294
Balance at the end of the period	$	(58,702	)	$	(4,666,924	)	$	(4,725,626	)	$	(58,702	)	$	(4,666,924	)	$	(4,725,626	)

	Three months ended September 30, 2016									Nine months ended September 30, 2016
	PCI			Performing						PCI			Performing
	Loans			Loans			Total			Loans			Loans			Total
Balance at the beginning of the period	$	-		$	-		$	-		$	-		$	-		$	-
Discount added at acquisition		(277,579	)		(11,916,009	)		(12,193,588	)		(277,579	)		(11,916,009	)		(12,193,588	)
Accretion recognized		29,317			366,293			395,610			29,317			366,293			395,610
Balance at the end of the period	$	(248,262	)	$	(11,549,716	)	$	(11,797,978	)	$	(248,262	)	$	(11,549,716	)	$	(11,797,978	)

The aging of the loan/lease portfolio by classe

s of loans/leases as of

September 30, 2017

and

December 31, 2016

is presented as follows:

	As of September 30, 2017
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
C&I	$	1,031,800,612		$	1,149,469		$	-		$	12,892		$	1,567,813		$	1,034,530,786
CRE
Owner-Occupied CRE		326,879,997			109,749			-			-			155,020			327,144,766
Commercial Construction, Land Development, and Other Land		164,647,962			-			-			-			4,344,742			168,992,704
Other Non Owner-Occupied CRE		650,410,884			325,464			-			-			10,981,845			661,718,193
Direct Financing Leases		142,413,187			1,558,490			852,844			-			2,238,372			147,062,893
Residential Real Estate		237,860,369			116,095			755,919			307,676			917,857			239,957,916
Installment and Other Consumer		89,153,013			73,731			39,311			102,312			237,488			89,605,855
	$	2,643,166,024		$	3,332,998		$	1,648,074		$	422,880		$	20,443,137		$	2,669,013,113
As a percentage of total loan/lease portfolio		99.03	%		0.12	%		0.06	%		0.02	%		0.77	%		100.00	%

	As of December 31, 2016
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
C&I	$	821,637,507		$	1,455,185		$	10,551		$	346,234		$	4,187,786		$	827,637,263
CRE
Owner-Occupied CRE		331,812,571			-			242,902			-			332,148			332,387,621
Commercial Construction, Land Development, and Other Land		160,760,034			35,638			-			-			4,353,819			165,149,491
Other Non Owner-Occupied CRE		594,384,926			100,673			-			-			1,436,149			595,921,748
Direct Financing Leases		161,452,627			730,627			574,700			215,225			2,446,181			165,419,360
Residential Real Estate		227,023,552			473,478			365,581			294,854			1,075,639			229,233,104
Installment and Other Consumer		81,199,766			204,973			63,111			110,501			87,344			81,665,695
	$	2,378,270,983		$	3,000,574		$	1,256,845		$	966,814		$	13,919,066		$	2,397,414,282
As a percentage of total loan/lease portfolio		99.20	%		0.13	%		0.05	%		0.04	%		0.58	%		100.00	%

NPLs

by classes of loans/leases as of

September 30, 2017

and

December 31, 2016

are presented as follows:

	As of September 30, 2017
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	12,892	$	1,567,813	$	5,298,358	$	6,879,063		24.19	%
CRE
Owner-Occupied CRE		-		155,020		-		155,020		0.55	%
Commercial Construction, Land Development, and Other Land		-		4,344,742		-		4,344,742		15.28	%
Other Non Owner-Occupied CRE		-		10,981,845		-		10,981,845		38.63	%
Direct Financing Leases		-		2,238,372		1,899,707		4,138,079		14.56	%
Residential Real Estate		307,676		917,857		349,538		1,575,071		5.54	%
Installment and Other Consumer		102,312		237,488		15,218		355,018		1.25	%
	$	422,880	$	20,443,137	$	7,562,821	$	28,428,838		100.00	%

*

Nonaccrual loans/leases included

$2,291,666

of TDRs, including

$258,598

in C&I loans,

$1,198,439

in CRE loans,

$607,882

in direct financing leases,

$177,606

in construction loans,

$40,405

in residential real estate loans, and

$8,736

in installment loans.

	As of December 31, 2016
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	346,234	$	4,187,786	$	4,733,997	$	9,268,017		43.65	%
CRE
Owner-Occupied CRE		-		332,148		-		332,148		1.56	%
Commercial Construction, Land Development, and Other Land		-		4,353,819		-		4,353,819		20.51	%
Other Non Owner-Occupied CRE		-		1,436,149		-		1,436,149		6.77	%
Direct Financing Leases		215,225		2,446,181		1,008,244		3,669,650		17.28	%
Residential Real Estate		294,854		1,075,639		585,541		1,956,034		9.21	%
Installment and Other Consumer		110,501		87,344		18,746		216,591		1.02	%
	$	966,814	$	13,919,066	$	6,346,528	$	21,232,408		100.00	%

**

Nonaccrual loans/leases included

$2,300,479

of TDRs, including

$48,501

in C&I loans,

$1,380,047

in CRE loans,

$816,149

in direct financing leases,

$43,579

in residential real estate loans, and

$12,203

in installment loans.

Changes in the allowance by

portfolio segment for the

three

and

nine

months ended

September 30, 2017

and

2016,

respectively, are presented as follows:

	Three Months Ended September 30, 2017
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	14,207,733		$	12,999,233	$	2,638,301		$	2,430,454		$	1,080,911		$	33,356,632
Provisions (credits) charged to expense		469,977			1,349,393		179,190			(11,654	)		99,530			2,086,436
Loans/leases charged off		(338,361	)		-		(268,669	)		(25,822	)		(16,872	)		(649,724	)
Recoveries on loans/leases previously charged off		63,366			10,748		103,936			6,000			4,947			188,997
Balance, ending	$	14,402,715		$	14,359,374	$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341

	Three Months Ended September 30, 2016
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,724,506		$	10,987,062	$	3,226,194		$	2,014,987		$	1,144,741		$	28,097,490
Provisions charged to expense		859,031			8,962		641,435			79,221			19,337			1,607,986
Loans/leases charged off		(96,330	)		-		(847,668	)		(38,554	)		(4,530	)		(987,082	)
Recoveries on loans/leases previously charged off		70,759			6,500		22,001			-			9,181			108,441
Balance, ending	$	11,557,966		$	11,002,524	$	3,041,962		$	2,055,654		$	1,168,729		$	28,826,835

	Nine Months Ended September 30, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Provisions charged to expense		2,345,121			2,655,521			981,877			148,017			84,002			6,214,538
Loans/leases charged off		(630,704	)		(10,375	)		(1,611,432	)		(101,006	)		(40,436	)		(2,393,953	)
Recoveries on loans/leases previously charged off		143,188			43,619			170,415			9,623			37,463			404,308
Balance, ending	$	14,402,715		$	14,359,374		$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341

	Nine Months Ended September 30, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,484,080		$	9,375,117		$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906
Provisions (credits) charged to expense		1,357,262			1,644,008			1,580,677			336,865			(39,991	)		4,878,821
Loans/leases charged off		(388,879	)		(23,101	)		(1,983,322	)		(72,261	)		(22,018	)		(2,489,581	)
Recoveries on loans/leases previously charged off		105,503			6,500			49,519			900			134,267			296,689
Balance, ending	$	11,557,966		$	11,002,524		$	3,041,962		$	2,055,654		$	1,168,729		$	28,826,835

The allowance by impairment evaluation and by portfolio

segment as of

September 30, 2017

and

December 31, 2016

is presented as follows:

	As of September 30, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,062,424		$	2,374,308		$	652,775		$	261,097		$	24,487		$	4,375,091
Allowance for nonimpaired loans/leases		13,340,291			11,985,066			1,999,983			2,137,881			1,144,029			30,607,250
	$	14,402,715		$	14,359,374		$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341
Impaired loans/leases	$	6,567,909		$	15,588,929		$	3,952,190		$	1,328,160		$	191,941		$	27,629,129
Nonimpaired loans/leases		1,027,962,877			1,142,266,734			143,110,703			238,629,756			89,413,914			2,641,383,984
	$	1,034,530,786		$	1,157,855,663		$	147,062,893		$	239,957,916		$	89,605,855		$	2,669,013,113
Allowance as a percentage of impaired loans/leases		16.18	%		15.23	%		16.52	%		19.66	%		12.76	%		15.84	%
Allowance as a percentage of nonimpaired loans/leases		1.30	%		1.05	%		1.40	%		0.90	%		1.28	%		1.16	%
Total allowance as a percentage of total loans/leases		1.39	%		1.24	%		1.80	%		1.00	%		1.30	%		1.31	%

	As of December 31, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,771,537		$	693,919		$	848,919		$	289,112		$	39,481		$	3,642,968
Allowance for nonimpaired loans/leases		10,773,573			10,976,690			2,262,979			2,053,232			1,048,006			27,114,480
	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Impaired loans/leases	$	8,936,451		$	6,112,114		$	3,256,264		$	1,661,180		$	106,090		$	20,072,099
Nonimpaired loans/leases		818,700,812			1,087,346,746			162,163,096			227,571,924			81,559,605			2,377,342,183
	$	827,637,263		$	1,093,458,860		$	165,419,360		$	229,233,104		$	81,665,695		$	2,397,414,282
Allowance as a percentage of impaired loans/leases		19.82	%		11.35	%		26.07	%		17.40	%		37.21	%		18.15	%
Allowance as a percentage of nonimpaired loans/leases		1.32	%		1.01	%		1.40	%		0.90	%		1.28	%		1.14	%
Total allowance as a percentage of total loans/leases		1.52	%		1.07	%		1.88	%		1.02	%		1.33	%		1.28	%

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

nine

months ended

September 30, 2017

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:
C&I	$	1,414,985	$	1,425,422	$	-	$	1,129,388	$	42,567	$	42,567
CRE
Owner-Occupied CRE		107,322		107,322		-		26,831		6,783		6,783
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,198,439		1,198,439		-		1,178,032		-		-
Direct Financing Leases		2,971,485		2,971,485		-		2,708,433		97,603		97,603
Residential Real Estate		711,098		785,877		-		619,466		1,161		1,161
Installment and Other Consumer		137,704		137,704		-		124,530		-		-
	$	6,541,033	$	6,626,249	$	-	$	5,786,680	$	148,114	$	148,114
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,152,924	$	5,156,763	$	1,062,424	$	4,994,557	$	150,848	$	150,848
CRE
Owner-Occupied CRE		155,020		155,020		51,520		238,584		-		-
Commercial Construction, Land Development, and Other Land		4,344,742		4,344,742		818,536		4,348,711		-		-
Other Non Owner-Occupied CRE		9,783,406		9,783,406		1,504,252		2,464,981		-		-
Direct Financing Leases		980,705		980,705		652,775		736,537		-		-
Residential Real Estate		617,062		617,062		261,097		496,243		12,830		12,830
Installment and Other Consumer		54,237		54,237		24,487		33,162		317		317
	$	21,088,096	$	21,091,935	$	4,375,091	$	13,312,775	$	163,995	$	163,995
Total Impaired Loans/Leases:
C&I	$	6,567,909	$	6,582,185	$	1,062,424	$	6,123,945	$	193,415	$	193,415
CRE
Owner-Occupied CRE		262,342		262,342		51,520		265,415		6,783		6,783
Commercial Construction, Land Development, and Other Land		4,344,742		4,344,742		818,536		4,348,711		-		-
Other Non Owner-Occupied CRE		10,981,845		10,981,845		1,504,252		3,643,013		-		-
Direct Financing Leases		3,952,190		3,952,190		652,775		3,444,970		97,603		97,603
Residential Real Estate		1,328,160		1,402,939		261,097		1,115,709		13,991		13,991
Installment and Other Consumer		191,941		191,941		24,487		157,692		317		317
	$	27,629,129	$	27,718,184	$	4,375,091	$	19,099,455	$	312,109	$	312,109

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

September 30, 2017

and

2016,

respectively, are presented as follows:

	Three Months Ended September 30, 2017						Three Months Ended September 30, 2016
Classes of Loans/Leases	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	1,301,977	$	25,816	$	25,816	$	1,677,527	$	3,301	$	3,301
CRE
Owner-Occupied CRE		53,661		6,783		6,783		767,032		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,173,629		-		-		1,969,034		-		-
Direct Financing Leases		2,820,518		39,759		39,759		2,008,095		21,095		21,095
Residential Real Estate		690,791		-		-		1,481,340		941		941
Installment and Other Consumer		139,533		-		-		322,738		-		-
	$	6,180,109	$	72,358	$	72,358	$	8,225,766	$	25,337	$	25,337
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,157,671	$	53,127	$	53,127	$	4,188,621	$	-	$	-
CRE
Owner-Occupied CRE		155,020		-		-		363,911		-		-
Commercial Construction, Land Development, and Other Land		4,345,880		-		-		187,831		-		-
Other Non Owner-Occupied CRE		4,929,960		-		-		135,141		-		-
Direct Financing Leases		893,042		-		-		793,769		-		-
Residential Real Estate		550,476		5,601		5,601		807,827		1,503		1,503
Installment and Other Consumer		48,164		99		99		160,301		1,458		1,458
	$	16,080,213	$	58,827	$	58,827	$	6,637,401	$	2,961	$	2,961
Total Impaired Loans/Leases:
C&I	$	6,459,648	$	78,943	$	78,943	$	5,866,148	$	3,301	$	3,301
CRE
Owner-Occupied CRE		208,681		6,783		6,783		1,130,943		-		-
Commercial Construction, Land Development, and Other Land		4,345,880		-		-		187,831		-		-
Other Non Owner-Occupied CRE		6,103,589		-		-		2,104,175		-		-
Direct Financing Leases		3,713,560		39,759		39,759		2,801,864		21,095		21,095
Residential Real Estate		1,241,267		5,601		5,601		2,289,167		2,444		2,444
Installment and Other Consumer		187,697		99		99		483,039		1,458		1,458
	$	22,260,322	$	131,185	$	131,185	$	14,863,167	$	28,298	$	28,298

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, 2016

are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	841,895	$	951,600	$	-
CRE
Owner-Occupied CRE		-		93,774		-
Commercial Construction, Land Development, and Other Land		-		-		-
Other Non Owner-Occupied CRE		1,196,549		1,196,549		-
Direct Financing Leases		1,690,121		1,690,121		-
Residential Real Estate		853,294		892,495		-
Installment and Other Consumer		55,734		55,734		-
	$	4,637,593	$	4,880,273	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	8,094,556	$	8,098,395	$	1,771,537
CRE
Owner-Occupied CRE		322,148		322,148		57,398
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,817		577,611
Other Non Owner-Occupied CRE		239,600		239,600		58,910
Direct Financing Leases		1,566,143		1,566,143		848,919
Residential Real Estate		807,886		882,018		289,112
Installment and Other Consumer		50,356		50,356		39,481
	$	15,434,506	$	15,512,477	$	3,642,968
Total Impaired Loans/Leases:
C&I	$	8,936,451	$	9,049,995	$	1,771,537
CRE
Owner-Occupied CRE		322,148		415,922		57,398
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,817		577,611
Other Non Owner-Occupied CRE		1,436,149		1,436,149		58,910
Direct Financing Leases		3,256,264		3,256,264		848,919
Residential Real Estate		1,661,180		1,774,513		289,112
Installment and Other Consumer		106,090		106,090		39,481
	$	20,072,099	$	20,392,750	$	3,642,968

Impaired loans/leases for which

no

allowance has been provided have adequate collateral, based on management

’s current estimates.

For

C&I and CRE loans, the Company’s credit quality indicator consists of 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

September 30, 2017

and

December 31, 2016:

	As of September 30, 2017
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	1,000,751,792	$	313,179,076	$	161,772,865	$	639,045,018	$	2,114,748,751		96.45	%
Special Mention (Rating 6)		9,694,041		9,155,153		2,167,999		6,297,895		27,315,088		1.25	%
Substandard (Rating 7)		24,084,953		4,810,537		5,051,840		16,375,280		50,322,610		2.30	%
Doubtful (Rating 8)		-		-		-		-		-		-
	$	1,034,530,786	$	327,144,766	$	168,992,704	$	661,718,193	$	2,192,386,449		100.00	%

	As of September 30, 2017
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	142,924,814	$	238,382,845	$	89,250,837	$	470,558,496		98.73	%
Nonperforming		4,138,079		1,575,071		355,018		6,068,168		1.27	%
	$	147,062,893	$	239,957,916	$	89,605,855	$	476,626,664		100.00	%

	As of December 31, 2016
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	796,568,451	$	314,447,662	$	158,108,465	$	582,854,048	$	1,851,978,626		96.40	%
Special Mention (Rating 6)		6,305,772		7,559,380		1,780,000		4,437,122		20,082,274		1.05	%
Substandard (Rating 7)		24,763,040		10,380,369		5,261,026		8,630,578		49,035,013		2.55	%
Doubtful (Rating 8)		-		210		-		-		210		0.00	%
	$	827,637,263	$	332,387,621	$	165,149,491	$	595,921,748	$	1,921,096,123		100.00	%

	As of December 31, 2016
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	161,749,710	$	227,277,070	$	81,449,104	$	470,475,884		98.77	%
Nonperforming		3,669,650		1,956,034		216,591		5,842,275		1.23	%
	$	165,419,360	$	229,233,104	$	81,665,695	$	476,318,159		100.00	%

*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 TDRs.

As of

September 30, 2017

and

December 31, 2016,

TDRs totaled

$9,854,487

and

$8,647,007,

respectively.

For each class of financing receivable, the following presents the number and recorded investment of

TDRs, by type of concession, that were restructured during the

three

and

nine

months ended

September 30, 2017

and

2016.

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 September 30, 2017								For the three months ended September 30, 2016
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
C&I		4	$	620,452	$	620,452	$	-		-	$	-	$	-	$	-
Direct Financing Leases		4		416,597		416,597		-		2		461,643		461,643		-
		8	$	1,037,049	$	1,037,049	$	-		2	$	461,643	$	461,643	$	-
TOTAL		8	$	1,037,049	$	1,037,049	$	-		2	$	461,643	$	461,643	$	-

	For the nine months ended September 30, 2017								For the nine months ended September 30, 2016
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 - Extension of Maturity
C&I		-	$	-	$	-	$	-		1	$	52,286	$	52,286	$	-
Direct Financing Leases		2		104,382		104,382		-		4		410,653		410,653		-
		2	$	104,382	$	104,382	$	-		5	$	462,939	$	462,939	$	-
CONCESSION - Significant Payment Delay
C&I		7	$	801,650	$	801,650	$	-		1	$	62,140	$	62,140	$	-
Direct Financing Leases		27		1,889,000		1,889,000		-		6		771,672		771,672		-
		34	$	2,690,650	$	2,690,650	$	-		7	$	833,812	$	833,812	$	-
CONCESSION - Interest Rate Adjusted Below Market
CRE - Other		-	$	-	$	-	$	-		1	$	1,233,740	$	1,233,740	$	-
		-	$	-	$	-	$	-		1	$	1,233,740	$	1,233,740	$	-
TOTAL		36	$	2,795,032	$	2,795,032	$	-		13	$	2,530,491	$	2,530,491	$	-

Of the

TDRs reported above,

three

with a post-modification recorded balance of

$139,241

were on nonaccrual as of

September 30, 2017.

Two with a post-modification recorded balance of

$1,384,680

were on nonaccrual as of

September 30, 2016.

Not

included in the table above, the Company had

one

TDR that was restructured and charged off in

2016,

totaling

$236,545.

For the

three

and

nine

months ended

September 30, 2017,

four

of the Company’s TDRs redefaulted within

12

months subsequent to restructure where default is defined as delinquency of

90

days or more and/or placement on nonaccrual status. Two of these TDRs were related to

one

customer whose loans were restructured in the

second

quarter of

2017

with pre-modification balances totaling

$112

thousand and the other

two

TDRs related to another customer whose loans were restructured in the

fourth

quarter of

2016

with pre-modification balances totaling

$195

thousand.

For the

three

and

nine

months ended

September 30, 2016,

none

of the Company’s TDRs had redefaulted within

12

months subsequent to restructure.

XML

Note 4 - Earnings Per Share

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

4

- EARNINGS PER SHARE

The following information was used in the computation of

EPS on a basic and diluted basis:

	Three months ended				Nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Net income	$	7,853,935	$	6,107,501	$	25,804,917	$	19,157,457
Basic EPS	$	0.60	$	0.47	$	1.96	$	1.55
Diluted EPS	$	0.58	$	0.46	$	1.91	$	1.52
Weighted average common shares outstanding*		13,151,350		13,066,777		13,151,672		12,398,491
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		356,605		202,926		357,894		181,551
Weighted average common and common equivalent shares outstanding		13,507,955		13,269,703		13,509,566		12,580,042

The increase in weighted average common shares outstanding

when comparing the

nine

months ended

September 30, 2017

to

September 30, 2016

was primarily due to the common stock issuance discussed in Note

2

of the Company’s Annual Report on Form

10

-K for the year ended

December 31, 2016.

XML

Note 5 - Fair Value

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

5

– 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

and liabilities measured at fair value on a recurring basis comprise the following at

September 30, 2017

and

December 31, 2016:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2017:
Securities AFS:
U.S. govt. sponsored agency securities	$	39,340,168	$	-	$	39,340,168	$	-
Residential mortgage-backed and related securities		158,968,509		-		158,968,509		-
Municipal securities		56,763,060		-		56,763,060		-
Other securities		4,882,685		1,017		4,881,668		-
Interest rate caps		390,527		-		390,527		-
Interest rate swaps - assets		2,603,002		-		2,603,002		-
Total assets measured at fair value	$	262,947,951	$	1,017	$	262,946,934	$	-
Interest rate swaps - liabilities	$	2,603,002	$	-	$	2,603,002	$	-
Total liabilities measured at fair value	$	2,603,002	$	-	$	2,603,002	$	-
December 31, 2016 :
Securities AFS:
U.S. govt. sponsored agency securities	$	46,083,607	$	-	$	46,083,607	$	-
Residential mortgage-backed and related securities		147,702,127		-		147,702,127		-
Municipal securities		52,604,426		-		52,604,426		-
Other securities		4,722,979		1,361		4,721,618		-
Interest rate caps		576,527		-		576,527		-
Interest rate swaps - assets		2,338,281		-		2,338,281		-
Total assets measured at fair value	$	254,027,947	$	1,361	$	254,026,586	$	-
Interest rate swaps - liabilities	$	2,338,281	$	-	$	2,338,281	$	-
Total liabilities measured at fair value	$	2,338,281	$	-	$	2,338,281	$	-

There were

no

transfers of assets or liabilities between Levels

1,

2,

and

3

of the fair value hierarchy for the

three

and

nine

months ended

September 30, 2017

or

2016.

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).

I

nterest rate caps are used for the purpose of hedging interest rate risk. The fair values are determined by pricing models that consider observable market data for derivative instruments with similar structures (Level

2

inputs).

Interest rate swaps are executed for select commercial customers. The interest rate swaps are further described in Note

1

of the Company

’s Annual Report on Form

10

-K for the year ended

December 31, 2016.

The fair values are determined by comparing the contract rate on the swap with the then-current market rate for the remaining term of the transaction (Level

2

inputs).

Certain financial assets are measured at fair value on a non-recurring basis; that is, the assets are

not

measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Assets measured at fair value on a non-recurring basis comprise the following at

September 30, 2017

and

December 31, 2016:

			Fair Value Measurements at Reporting Date Using
	Fair Value		Level 1		Level 2		Level 3
September 30, 2017:
Impaired loans/leases	$	18,177,320	$	-	$	-	$	18,177,320
OREO		5,545,633		-		-		5,545,633
	$	23,722,953	$	-	$	-	$	23,722,953
December 31, 2016:
Impaired loans/leases	$	12,823,121	$	-	$	-	$	12,823,121
OREO		5,964,952		-		-		5,964,952
	$	18,788,073	$	-	$	-	$	18,788,073

Impaired loans/leases are evaluated and valued at the time the loan/lease is id

entified 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 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 client and client’s business.  

OREO

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 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:

	Quantitative Information about Level Fair Value Measurements
	Fair Value September 30, 2017		Fair Value December 31, 2016		Valuation Technique	Unobservable Input	Range
Impaired loans/leases	$	18,177,320	$	12,823,121	Appraisal of collateral	Appraisal adjustments		-10.00%	to	-50.00	%
OREO		5,545,633		5,964,952	Appraisal of collateral	Appraisal adjustments		0.00%	to	-35.00	%

For the impaired loans/leases and

OREO, 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

and

nine

months ended

September 30, 2017

and

2016.

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 September 30, 2017				As of December 31, 2016
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Value		Fair Value		Value		Fair Value
Cash and due from banks	Level 1	$	56,274,561	$	56,274,561	$	70,569,993	$	70,569,993
Federal funds sold	Level 2		20,568,000		20,568,000		22,257,000	$	22,257,000
Interest-bearing deposits at financial institutions	Level 2		41,221,383		41,221,383		63,948,925	$	63,948,925
Investment securities:
HTM	Level 2		323,981,227		323,436,578		322,909,056	$	320,414,899
AFS	See Previous Table		259,954,422		259,954,422		251,113,139	$	251,113,139
Loans/leases receivable, net	Level 3		16,830,852		18,177,320		11,873,260	$	12,823,121
Loans/leases receivable, net	Level 2		2,624,941,618		2,607,041,000		2,362,856,277	$	2,344,462,740
Interest rate caps	Level 2		390,527		390,527		576,527	$	576,527
Interest rate swaps - assets	Level 2		2,603,002		2,603,002		2,338,281	$	2,338,281
Deposits:
Nonmaturity deposits	Level 2		2,365,493,644		2,365,493,644		2,188,683,349	$	2,188,683,349
Time deposits	Level 2		528,774,838		526,265,000		480,577,924	$	479,605,000
Short-term borrowings	Level 2		16,010,805		16,010,805		39,971,387	$	39,971,387
FHLB advances	Level 2		169,055,000		169,434,000		137,500,000	$	138,338,000
Other borrowings	Level 2		77,500,000		78,428,000		80,000,000	$	81,282,000
Junior subordinated debentures	Level 2		33,578,744		25,349,715		33,480,202	$	24,881,494
Interest rate swaps - liabilities	Level 2		2,603,002		2,603,002		2,338,281		2,338,281

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Note 6 - Business Segment Information

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE

6

– BUSINESS SEGMENT INFORMATION

Selected financial and descriptive information is required to be disclosed for reportable operating segments, applying a “management perspective” as the basis for identifying reportable segments. The management perspective is determined by the view that management takes of the segments within the Company when making operating decisions, allocating resources, and measuring performance. The segments of

the Company have been defined by the structure of the Company’s internal organization, focusing on the financial information that the Company’s operating decision-makers routinely use to make decisions about operating matters.

The Company

’s primary segment, Commercial Banking, is geographically divided by markets into the secondary segments comprised of the

four

subsidiary banks wholly owned by the Company: QCBT, CRBT, CSB and RB&T. Each of these 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

four

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 as of and for the

three

and

nine

months ended

September 30, 2017

and

2016.

	Commercial Banking								Wealth					Intercompany			Consolidated
	QCBT		CRBT		CSB		RB&T		Management		All Other			Eliminations			Total
Three Months Ended September 30, 2017
Total revenue	$	11,771,842	$	10,892,025	$	7,678,006	$	4,534,768	$	2,689,853	$	10,028,660		$	(7,052,986	)	$	40,542,168
Net interest income	$	11,664,970	$	7,903,483	$	6,379,111	$	3,245,346	$	-	$	(636,562	)	$	-		$	28,556,348
Provision	$	1,140,436	$	200,000	$	574,000	$	172,000	$	-	$	-		$	-		$	2,086,436
Net income	$	3,929,158	$	3,130,319	$	1,669,209	$	726,926	$	539,091	$	7,853,935		$	(9,994,703	)	$	7,853,935
Goodwill	$	3,222,688	$	-	$	9,888,225	$	-	$	-	$	-		$	-		$	13,110,913
Core deposit intangible	$	-	$	1,122,263	$	5,566,350	$	-	$	-	$	-		$	-		$	6,688,613
Total assets	$	1,456,251,244	$	1,007,062,151	$	631,963,143	$	445,098,530	$	-	$	395,697,820		$	(385,609,794	)	$	3,550,463,094
Three Months Ended September 30, 2016
Total revenue	$	18,026,215	$	10,065,032	$	2,675,741	$	4,232,205	$	2,284,577	$	8,463,636		$	(8,507,270	)	$	37,240,136
Net interest income	$	11,225,414	$	7,594,557	$	2,191,862	$	3,056,989	$	-	$	(438,045	)	$	-		$	23,630,777
Provision	$	1,137,986	$	-	$	270,000	$	200,000	$	-	$	-		$	-		$	1,607,986
Net income	$	3,596,469	$	3,286,724	$	188,608	$	944,781	$	398,859	$	6,107,492		$	(8,415,432	)	$	6,107,501
Goodwill	$	3,222,688	$	-	$	10,408,938	$	-	$	-	$	-		$	-		$	13,631,626
Core deposit intangible	$	-	$	1,321,775	$	6,291,818	$	-	$	-	$	-		$	-		$	7,613,593
Total assets	$	1,407,733,009	$	887,592,695	$	580,210,270	$	393,191,774	$	-	$	368,990,749		$	(356,732,388	)	$	3,280,986,109
Nine Months Ended September 30, 2017
Total revenue	$	39,517,823	$	31,428,339	$	23,981,019	$	12,723,998	$	7,952,495	$	30,086,617		$	(27,283,484	)	$	118,406,807
Net interest income	$	34,381,270	$	22,107,955	$	20,326,439	$	9,308,932	$	-	$	(1,852,668	)	$	-		$	84,271,928
Provision	$	2,624,538	$	750,000	$	2,209,000	$	631,000	$	-	$	-		$	-		$	6,214,538
Net income	$	11,657,941	$	8,893,461	$	5,484,383	$	2,406,337	$	1,554,618	$	25,804,917		$	(29,996,740	)	$	25,804,917
Goodwill	$	3,222,688	$	-	$	9,888,225	$	-	$	-	$	-		$	-		$	13,110,913
Core deposit intangible	$	-	$	1,122,263	$	5,566,350	$	-	$	-	$	-		$	-		$	6,688,613
Total assets	$	1,456,251,244	$	1,007,062,151	$	631,963,143	$	445,098,530	$	-	$	395,697,820		$	(385,609,794	)	$	3,550,463,094
Nine Months Ended September 30, 2016
Total revenue	$	45,706,061	$	31,342,345	$	2,675,741	$	11,945,081	$	6,723,690	$	23,567,906		$	(23,720,471	)	$	98,240,353
Net interest income	$	33,394,620	$	21,755,270	$	2,191,862	$	8,914,380	$	-	$	(1,019,020	)	$	-		$	65,237,112
Provision	$	3,108,821	$	700,000	$	270,000	$	800,000	$	-	$	-		$	-		$	4,878,821
Net income	$	10,326,508	$	9,366,441	$	188,608	$	2,334,735	$	1,232,831	$	19,157,447		$	(23,449,113	)	$	19,157,457
Goodwill	$	3,222,688	$	-	$	10,408,938	$	-	$	-	$	-		$	-		$	13,631,626
Core deposit intangible	$	-	$	1,321,775	$	6,291,818	$	-	$	-	$	-		$	-		$	7,613,593
Total assets	$	1,407,733,009	$	887,592,695	$	580,210,270	$	393,191,774	$	-	$	368,990,749		$	(356,732,388	)	$	3,280,986,109

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Note 7 - Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE

7

– REGULATORY CAPITAL REQUIREMENTS

The Company (on a consolidated basis) and the 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 classification 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 table) of total common equity Tier

1

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

September 30, 2017

and

December 31, 2016,

that the Company and the subsidiary banks met all capital adequacy requirements to which they are 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, Tier

1

leverage and common equity Tier

1

ratios as set forth in the following tables. The Company and the subsidiary banks

’ actual capital amounts and ratios as of

September 30, 2017

and

December 31, 2016

are also presented in the following table (dollars in thousands). As of

September 30, 2017

and

December 31, 2016,

each of the subsidiary banks met the requirements to be “well capitalized”.

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2017:
Company:
Total risk-based capital	$	356,559		11.49	%	$	248,360	>	8.00	%	$	287,166	>	9.250	%	$	310,450	>	10.00	%
Tier 1 risk-based capital		321,213		10.35	%		186,270	>	6.00			225,076	>	7.250			248,360	>	8.00
Tier 1 leverage		321,213		9.23	%		139,146	>	4.00			139,146	>	4.000			173,932	>	5.00
Common equity Tier 1		289,612		9.33	%		139,703	>	4.50			178,509	>	5.750			201,793	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	152,635		12.25	%	$	99,693	>	8.00	%	$	115,270	>	9.250	%	$	124,616	>	10.00	%
Tier 1 risk-based capital		138,453		11.11	%		74,770	>	6.00			90,347	>	7.250			99,693	>	8.00
Tier 1 leverage		138,453		9.40	%		58,913	>	4.00			58,913	>	4.000			73,642	>	5.00
Common equity Tier 1		138,453		11.11	%		56,077	>	4.50			71,654	>	5.750			81,001	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	114,234		12.16	%	$	75,150	>	8.00	%	$	86,893	>	9.250	%	$	93,938	>	10.00	%
Tier 1 risk-based capital		102,545		10.92	%		56,363	>	6.00			68,105	>	7.250			75,150	>	8.00
Tier 1 leverage		102,545		10.27	%		39,950	>	4.00			39,950	>	4.000			49,938	>	5.00
Common equity Tier 1		102,545		10.92	%		42,272	>	4.50			54,014	>	5.750			61,060	>	6.50
Community State Bank:
Total risk-based capital	$	67,071		12.83	%	$	41,837	>	8.00	%	$	48,374	>	9.250	%	$	52,296	>	10.00	%
Tier 1 risk-based capital		63,356		12.11	%		31,378	>	6.00			37,915	>	7.250			41,837	>	8.00
Tier 1 leverage		63,356		10.14	%		24,991	>	4.00			24,991	>	4.000			31,239	>	5.00
Common equity Tier 1		63,356		12.11	%		23,533	>	4.50			30,070	>	5.750			33,992	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	45,031		11.48	%	$	31,394	>	8.00	%	$	36,299	>	9.250	%	$	39,243	>	10.00	%
Tier 1 risk-based capital		40,120		10.22	%		23,546	>	6.00			28,451	>	7.250			31,394	>	8.00
Tier 1 leverage		40,120		9.26	%		17,328	>	4.00			17,328	>	4.000			21,660	>	5.00
Common equity Tier 1		40,120		10.22	%		17,659	>	4.50			22,564	>	5.750			25,508	>	6.50

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016:
Company:
Total risk-based capital	$	327,440		11.56	%	$	226,587	>	8.00	%	$	244,289	>	8.625	%	$	283,233	>	10.00	%
Tier 1 risk-based capital		296,366		10.46	%		169,940	>	6.00			187,642	>	6.625			226,587	>	8.00
Tier 1 leverage		296,366		9.10	%		130,229	>	4.00			130,229	>	4.000			162,787	>	5.00
Common equity Tier 1		266,419		9.41	%		127,455	>	4.50			145,157	>	5.125			184,102	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	142,990		12.27	%	$	93,212	>	8.00	%	$	100,494	>	8.625	%	$	116,515	>	10.00	%
Tier 1 risk-based capital		129,524		11.12	%		69,909	>	6.00			77,191	>	6.625			93,212	>	8.00
Tier 1 leverage		129,524		9.18	%		56,445	>	4.00			56,445	>	4.000			70,556	>	5.00
Common equity Tier 1		129,524		11.12	%		52,432	>	4.50			59,714	>	5.125			75,735	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	106,791		12.82	%	$	66,623	>	8.00	%	$	71,828	>	8.625	%	$	83,279	>	10.00	%
Tier 1 risk-based capital		96,369		11.57	%		49,968	>	6.00			55,173	>	6.625			66,623	>	8.00
Tier 1 leverage		96,369		10.69	%		36,061	>	4.00			36,061	>	4.000			45,076	>	5.00
Common equity Tier 1		96,369		11.57	%		37,476	>	4.50			42,681	>	5.125			54,132	>	6.50
Community State Bank:
Total risk-based capital	$	68,216		13.81	%	$	39,521	>	8.00	%	$	42,609	>	8.625	%	$	49,402	>	10.00	%
Tier 1 risk-based capital		66,746		13.51	%		29,641	>	6.00			32,729	>	6.625			39,522	>	8.00
Tier 1 leverage		66,746		11.75	%		22,726	>	4.00			22,726	>	4.000			28,408	>	5.00
Common equity Tier 1		66,746		13.51	%		22,231	>	4.50			25,319	>	5.125			32,111	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	42,007		12.26	%	$	27,410	>	8.00	%	$	29,551	>	8.625	%	$	34,262	>	10.00	%
Tier 1 risk-based capital		37,716		11.01	%		20,558	>	6.00			22,699	>	6.625			27,410	>	8.00
Tier 1 leverage		37,716		9.57	%		15,772	>	4.00			15,772	>	4.000			19,716	>	5.00
Common equity Tier 1		37,716		11.01	%		15,418	>	4.50			17,759	>	5.125			22,270	>	6.50

*The minimums under Basel III increase by

.625%

(the capital conservation buffer) annually until

2019.

  The fully phased-in minimums are

10.5%

(Total risk-based capital),

8.5%

(Tier

1

risk-based capital), and

7.0%

(Common equity Tier

1

).

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Note 8 - Subsequent Event - Acquisition of Guaranty Bank and Trust Company

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

8

– SUBSEQUENT EVENT - ACQUISITION OF GUARANTY BANK AND TRUST COMPANY

On

October 2, 2017

the Company announced the completion of its previously announced acquisition of Guaranty Bank, headquartered in Cedar Rapids, Iowa, from Guaranty, on

October 1, 2017.

Guaranty Bank is an Iowa-chartered bank that operates

five

banking locations throughout the Cedar Rapids metropolitan area.

In the acquisition, the Company acquire

d

100%

of Guaranty Bank’s outstanding common stock and purchased certain assets and assumed certain liabilities of Guaranty for aggregate consideration consisting of

79%

QCR Holdings common stock (

678,670

shares) and

21%

cash (

$7.8

million). On

September 29, 2017,

the last trading date before the closing, the Company’s common stock closed at

$45.50,

resulting in stock consideration valued at

$30.9

million and total consideration paid by the Company of

$38.7

million.

To help fund the cash portion of the purchase price

, on

September 27, 2017,

the Company executed a

$7.0

million

four

-year term note with principal and interest due quarterly. Interest is calculated at the effective LIBOR rate plus

3.00%

per annum (

4.34%

at

September 30, 2017).

The

first

principal payment of

$437,500

is due in the

first

quarter of

2018.

The collateral on the borrowing is the original stock certificates and stock powers of all subsidiaries.  This note is included within other borrowings on the

September 30, 2017

Consolidated Balance Sheet. The remaining cash consideration paid to Guaranty came from operating cash.

As of the acquisition date, Guaranty Bank had assets with a book value of

$257.2

million, loans with a book value of

$19

6.1

million, and deposits with a book value of

$212.3

million. The Company is in the process of determining the fair value of the individual assets and liabilities purchased/assumed. The Company expects core deposit intangible to be in the range of approximately

$2.5

-

4.5

million. The remaininig fair value adjustments, including goodwill, are still in-process.

In the

fourth

quarter of

2017

, the Company intends to merge Guaranty Bank with and into CRBT, with CRBT as the surviving bank. As part of the merger, the Guaranty Bank branches located at

302

3rd

Avenue SE, Cedar Rapids, Iowa and

1819

42nd

Street NE, Cedar Rapids, Iowa , will permanently close.  The

three

remaining Guaranty Bank branches will become banking offices of CRBT. Until the banks are merged, the Company will own and operate Guaranty Bank as a separate bank subsidiary.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

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, 2016,

included in the Company’s Annual Report on Form

10

-K filed with the SEC on

March 10, 2017.

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

GAAP for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form

10

-Q and Rule

10

-

01

of Regulation S-

X.

Such information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. Any differences appearing between the numbers presented in financial statements and management’s discussion and analysis are due to rounding. The results of the interim period ended

September 30, 2017,

are

not

necessarily indicative of the results expected for the year ending

December 31, 2017,

or for any other period.

The acronyms and abbreviations identified below are used

throughout this Quarterly Report on Form

10

-Q. It

may

be helpful to refer back to this page as you read this report.

Allowance: Allowance for estimated losses on loans/leases	Guaranty Bank: Guaranty Bank and Trust Company
AOCI: Accumulated other comprehensive income (loss)	HTM: Held to maturity
AFS: Available for sale	m2: m2 Lease Funds, LLC
ASC: Accounting Standards Codification	NIM: Net interest margin
ASU: Accounting Standards Update	NPA: Nonperforming asset
BOLI: Bank-owned life insurance	NPL: Nonperforming loan
Caps: Interest rate cap derivatives	OREO: Other real estate owned
Community National: Community National Bancorporation	OTTI: Other-than-temporary impairment
CRBT: Cedar Rapids Bank & Trust Company	PCI: Purchased credit impaired
CRE: Commercial real estate	Provision: Provision for loan/lease losses
CSB: Community State Bank	QCBT: Quad City Bank & Trust Company
C&I: Commercial and industrial	RB&T: Rockford Bank & Trust Company
Dodd-Frank Act: Dodd-Frank Wall Street Reform and	ROAA: Return on Average Assets
Consumer Protection Act	SBA: U.S. Small Business Administration
EPS: Earnings per share	SEC: Securities and Exchange Commission
Exchange Act: Securities Exchange Act of 1934, as amended	TA: Tangible assets
FASB: Financial Accounting Standards Board	TCE: Tangible common equity
FDIC: Federal Deposit Insurance Corporation	TDRs: Troubled debt restructurings
FHLB: Federal Home Loan Bank	TEY: Tax equivalent yield
FRB: Federal Reserve Bank of Chicago	The Company: QCR Holdings, Inc.
GAAP: Generally Accepted Accounting Principles	USDA: U.S. Department of Agriculture
Guaranty: Guaranty Bankshares, Ltd.

The consolidated financial statements include the accounts of the Company and its

wholly-owned subsidiaries which include

four

commercial banks: QCBT, CRBT, CSB and RB&T. All are state-chartered commercial banks and all are members of the Federal Reserve system. The Company also engages in direct financing lease contracts through

m2,

a wholly-owned subsidiary of QCBT. All material intercompany transactions and balances have been eliminated in consolidation.

T

he acquisition of CSB occurred on

August 31, 2016;

therefore, the financial results of CSB for the periods since acquisition are included in this report.

On

October 2, 2017,

the Company announced the completion of its previously announced acquisition of Guaranty Bank, headquartered in Cedar Rapids, Iowa, from Guaranty. The financial results of Guaranty Bank are

not

included in this report because the closing was effective

October 1, 2017.

See Note

8

to the Consolidated Financial Statements for additional information about the acquisition.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting developments

: In

May 2014,

FASB issued ASU

2014

-

09,

Revenue from Contracts with Customers

. ASU

2014

-

09

implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU

2014

-

09

is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU

2014

-

09

was originally effective for the Company on

January 1, 2017;

however, FASB issued ASU

2015

-

14

which defers the effective date in order to provide additional time for both public and private entities to evaluate the impact. ASU

2014

-

09

will now be effective for the Company on

January 1, 2018

and it is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

January 2016,

FASB issued ASU

2016

-

01,

Financial Instruments–Overall

. ASU

2016

-

01

makes targeted adjustments to GAAP by eliminating the AFS classification for equity securities and requiring equity investments to be measured at fair value with changes in fair value recognized in net income. The standard also requires public business entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. The standard clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to AFS securities in combination with the entity’s other deferred tax assets. It also requires an entity to present separately (within other comprehensive income) the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Additionally, the standard eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU

2016

-

01

is effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years, and it is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases

. Under ASU

2016

-

02,

lessees will be required to recognize a lease liability measured on a discounted basis and a right-of-use asset for all leases (with the exception of short-term leases). Lessor accounting is largely unchanged under ASU

2016

-

02.

However, the definition of initial direct costs was updated to include only initial direct costs that are considered incremental. This change in definition will change the manner in which the Company recognizes the costs associated with originating leases. ASU

2016

-

02

is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company is in the process of analyzing the impact of adoption on the Company’s consolidated financial statements.

In

June 2016,

the

FASB issued ASU

2016

-

13,

Financial Instruments – Credit Losses

. Under the standard, assets measured at amortized costs (including loans, leases and AFS securities) will be presented at the net amount expected to be collected. Rather than the “incurred” model that is currently being utilized, the standard will require the use of a forward-looking approach to recognizing all expected credit losses at the beginning of an asset’s life. For public companies, ASU

2016

-

13

is effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Companies

may

choose to early adopt for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. The Company is in the process of analyzing the impact of adoption on the Company’s consolidated financial statements.

Effective

January 1, 2017,

the Company adopted ASU

2016

-

09,

Compensation – Stock Compensation

. Under the standard, the excess tax benefit (deficiency) related to stock options exercised and restricted stock awards vested is recorded as an adjustment to income tax expense. In the past, this tax benefit (deficiency) was recorded directly to equity. This change in accounting resulted in

$191

thousand of reduced income tax in the

third

quarter of

2017

and

$814

thousand of reduced income tax expense in the

first

nine

months of

2017.

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Note 2 - Investment Securities (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
September 30, 2017:
Securities HTM:
Municipal securities	$	322,931,227	$	2,084,997	$	(2,629,646	)	$	322,386,578
Other securities		1,050,000		-		-			1,050,000
	$	323,981,227	$	2,084,997	$	(2,629,646	)	$	323,436,578
Securities AFS:
U.S. govt. sponsored agency securities	$	39,340,306	$	129,768	$	(129,906	)	$	39,340,168
Residential mortgage-backed and related securities		160,329,128		266,806		(1,627,425	)		158,968,509
Municipal securities		56,621,412		435,356		(293,708	)		56,763,060
Other securities		4,077,128		826,135		(20,578	)		4,882,685
	$	260,367,974	$	1,658,065	$	(2,071,617	)	$	259,954,422
December 31, 2016:
Securities HTM:
Municipal securities	$	321,859,056	$	2,200,577	$	(4,694,734	)	$	319,364,899
Other securities		1,050,000		-		-			1,050,000
	$	322,909,056	$	2,200,577	$	(4,694,734	)	$	320,414,899
Securities AFS:
U.S. govt. sponsored agency securities	$	46,281,306	$	132,886	$	(330,585	)	$	46,083,607
Residential mortgage-backed and related securities		150,465,222		174,993		(2,938,088	)		147,702,127
Municipal securities		52,816,541		425,801		(637,916	)		52,604,426
Other securities		4,046,332		703,978		(27,331	)		4,722,979
	$	253,609,401	$	1,437,658	$	(3,933,920	)	$	251,113,139

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2017:
Securities HTM:
Municipal securities	$	17,779,999	$	(254,147	)	$	68,663,362	$	(2,375,499	)	$	86,443,361	$	(2,629,646	)
Securities AFS:
U.S. govt. sponsored agency securities	$	23,607,646	$	(129,906	)	$	-	$	-		$	23,607,646	$	(129,906	)
Residential mortgage-backed and related securities		111,996,030		(1,255,971	)		12,648,688		(371,454	)		124,644,718		(1,627,425	)
Municipal securities		18,776,501		(169,253	)		12,872,616		(124,455	)		31,649,117		(293,708	)
Other securities		928,772		(20,578	)		-		-			928,772		(20,578	)
	$	155,308,949	$	(1,575,708	)	$	25,521,304	$	(495,909	)	$	180,830,253	$	(2,071,617	)
December 31, 2016:
Securities HTM:
Municipal securities	$	122,271,533	$	(4,076,647	)	$	13,010,803	$	(618,087	)	$	135,282,336	$	(4,694,734	)
Securities AFS:
U.S. govt. sponsored agency securities	$	21,788,139	$	(257,640	)	$	5,499,012	$	(72,945	)	$	27,287,151	$	(330,585	)
Residential mortgage-backed and related securities		121,506,582		(2,641,664	)		7,437,615		(296,424	)		128,944,197		(2,938,088	)
Municipal securities		34,152,822		(618,462	)		338,099		(19,454	)		34,490,921		(637,916	)
Other securities		3,177,414		(27,331	)		-		-			3,177,414		(27,331	)
	$	180,624,957	$	(3,545,097	)	$	13,274,726	$	(388,823	)	$	193,899,683	$	(3,933,920	)

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

	Three Months Ended						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Proceeds from sales of securities*	$	8,415,795		$	58,775,764		$	21,969,870		$	119,850,909
Pre-tax gross gains from sales of securities		6,312			4,281,828			65,880			4,815,373
Pre-tax gross losses from sales of securities		(69,900	)		(30,055	)		(91,004	)		(187,090	)

Investments Classified by Contractual Maturity Date [Table Text Block]

	Amortized Cost		Fair Value
Securities HTM:
Due in one year or less	$	2,940,492	$	2,940,378
Due after one year through five years		18,268,264		18,374,059
Due after five years		302,772,471		302,122,141
	$	323,981,227	$	323,436,578
Securities AFS:
Due in one year or less	$	3,135,008	$	3,143,223
Due after one year through five years		26,545,903		26,712,930
Due after five years		66,280,807		66,247,075
		95,961,718		96,103,228
Residential mortgage-backed and related securities		160,329,128		158,968,509
Other securities		4,077,128		4,882,685
	$	260,367,974	$	259,954,422

	Amortized Cost		Fair Value
Securities HTM:
Municipal securities	$	170,900,193	$	171,633,005
Securities AFS:
U.S. govt. sponsored agency securities		5,048,652		5,033,292
Municipal securities		45,727,004		45,640,630
	$	50,775,656	$	50,673,922

Schedule of Investment in Bond Securities [Table Text Block]

September 30, 2017:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
North Dakota		7	$	21,625,068	$	21,593,895	$	3,084,842
Illinois		21		18,319,644		18,501,854		881,041
Iowa		21		17,990,978		17,993,895		856,852
Missouri		16		8,956,396		8,983,511		561,469
Ohio		9		8,289,069		8,180,432		908,937
Texas		10		6,609,101		6,543,660		654,366
Other		35		18,520,725		18,626,763		532,193
Total general obligation bonds		119	$	100,310,981	$	100,424,010	$	843,899

December 31, 2016:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Iowa		27	$	32,258,612	$	32,231,936	$	1,193,775
Illinois		19		29,214,559		29,308,438		1,542,549
North Dakota		7		22,169,050		21,499,075		3,071,296
Missouri		14		8,291,192		8,323,245		594,518
Ohio		8		6,790,398		6,651,897		831,487
Other		41		18,481,496		18,458,044		450,196
Total general obligation bonds		116	$	117,205,307	$	116,472,635	$	1,004,074

September 30, 2017:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Missouri		55	$	107,274,712	$	107,108,520	$	1,947,428
Iowa		28		62,468,124		62,615,875		2,236,281
Indiana		23		50,080,705		49,560,095		2,154,787
Ohio		5		19,674,376		19,523,478		3,904,696
Kansas		6		12,877,308		12,879,871		2,146,645
North Dakota		5		11,496,420		11,471,544		2,294,309
Other		10		15,370,013		15,566,245		1,556,625
Total revenue bonds		132	$	279,241,658	$	278,725,628	$	2,111,558

December 31, 2016:
U.S. State:	Number of Issuers		Amortized Cost		Fair Value		Average Exposure Per Issuer (Fair Value)
Missouri		47	$	90,784,441	$	89,664,013	$	1,907,745
Iowa		31		70,788,393		71,142,393		2,294,916
Indiana		22		47,994,737		47,582,138		2,162,824
Kansas		6		13,476,366		13,427,491		2,237,915
North Dakota		4		8,089,067		7,796,381		1,949,095
Ohio		3		13,650,000		13,405,222		4,468,407
Other		7		12,687,286		12,479,052		1,782,722
Total revenue bonds		120	$	257,470,290	$	255,496,690	$	2,129,139

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Note 3 - Loans Leases Receivable (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

	As of September 30,			As of December 31,
	2017			2016
C&I loans***	$	1,034,530,786		$	827,637,263
CRE loans
Owner-occupied CRE		327,144,766			332,387,621
Commercial construction, land development, and other land		168,992,704			165,149,491
Other non owner-occupied CRE		661,718,193			595,921,748
Direct financing leases *		147,062,893			165,419,360
Residential real estate loans **		239,957,916			229,233,104
Installment and other consumer loans		89,605,855			81,665,695
		2,669,013,113			2,397,414,282
Plus deferred loan/lease origination costs, net of fees		7,741,698			8,072,703
		2,676,754,811			2,405,486,985
Less allowance		(34,982,341	)		(30,757,448	)
	$	2,641,772,470		$	2,374,729,537
* Direct financing leases:
Net minimum lease payments to be received	$	162,728,461		$	184,274,802
Estimated unguaranteed residual values of leased assets		1,085,154			1,085,154
Unearned lease/residual income		(16,750,722	)		(19,940,596	)
		147,062,893			165,419,360
Plus deferred lease origination costs, net of fees		4,800,719			5,881,778
		151,863,612			171,301,138
Less allowance		(2,652,758	)		(3,111,898	)
	$	149,210,854		$	168,189,240

Certain Loans Acquired in Transfer Accounted for as Debt Securities Accretable Yield Movement Schedule [Table Text Block]

	Three months ended September 30, 2017									Nine months ended September 30, 2017
	PCI			Performing						PCI			Performing
	Loans			Loans			Total			Loans			Loans			Total
Balance at the beginning of the period	$	(83,860	)	$	(5,325,471	)	$	(5,409,331	)	$	(194,306	)	$	(9,115,614	)	$	(9,309,920	)
Accretion recognized		25,158			658,547			683,705			135,604			4,448,690			4,584,294
Balance at the end of the period	$	(58,702	)	$	(4,666,924	)	$	(4,725,626	)	$	(58,702	)	$	(4,666,924	)	$	(4,725,626	)

	Three months ended September 30, 2016									Nine months ended September 30, 2016
	PCI			Performing						PCI			Performing
	Loans			Loans			Total			Loans			Loans			Total
Balance at the beginning of the period	$	-		$	-		$	-		$	-		$	-		$	-
Discount added at acquisition		(277,579	)		(11,916,009	)		(12,193,588	)		(277,579	)		(11,916,009	)		(12,193,588	)
Accretion recognized		29,317			366,293			395,610			29,317			366,293			395,610
Balance at the end of the period	$	(248,262	)	$	(11,549,716	)	$	(11,797,978	)	$	(248,262	)	$	(11,549,716	)	$	(11,797,978	)

Past Due Financing Receivables [Table Text Block]

	As of September 30, 2017
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
C&I	$	1,031,800,612		$	1,149,469		$	-		$	12,892		$	1,567,813		$	1,034,530,786
CRE
Owner-Occupied CRE		326,879,997			109,749			-			-			155,020			327,144,766
Commercial Construction, Land Development, and Other Land		164,647,962			-			-			-			4,344,742			168,992,704
Other Non Owner-Occupied CRE		650,410,884			325,464			-			-			10,981,845			661,718,193
Direct Financing Leases		142,413,187			1,558,490			852,844			-			2,238,372			147,062,893
Residential Real Estate		237,860,369			116,095			755,919			307,676			917,857			239,957,916
Installment and Other Consumer		89,153,013			73,731			39,311			102,312			237,488			89,605,855
	$	2,643,166,024		$	3,332,998		$	1,648,074		$	422,880		$	20,443,137		$	2,669,013,113
As a percentage of total loan/lease portfolio		99.03	%		0.12	%		0.06	%		0.02	%		0.77	%		100.00	%

	As of December 31, 2016
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
C&I	$	821,637,507		$	1,455,185		$	10,551		$	346,234		$	4,187,786		$	827,637,263
CRE
Owner-Occupied CRE		331,812,571			-			242,902			-			332,148			332,387,621
Commercial Construction, Land Development, and Other Land		160,760,034			35,638			-			-			4,353,819			165,149,491
Other Non Owner-Occupied CRE		594,384,926			100,673			-			-			1,436,149			595,921,748
Direct Financing Leases		161,452,627			730,627			574,700			215,225			2,446,181			165,419,360
Residential Real Estate		227,023,552			473,478			365,581			294,854			1,075,639			229,233,104
Installment and Other Consumer		81,199,766			204,973			63,111			110,501			87,344			81,665,695
	$	2,378,270,983		$	3,000,574		$	1,256,845		$	966,814		$	13,919,066		$	2,397,414,282
As a percentage of total loan/lease portfolio		99.20	%		0.13	%		0.05	%		0.04	%		0.58	%		100.00	%

Schedule of Nonperforming Loans Leases [Table Text Block]

	As of September 30, 2017
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	12,892	$	1,567,813	$	5,298,358	$	6,879,063		24.19	%
CRE
Owner-Occupied CRE		-		155,020		-		155,020		0.55	%
Commercial Construction, Land Development, and Other Land		-		4,344,742		-		4,344,742		15.28	%
Other Non Owner-Occupied CRE		-		10,981,845		-		10,981,845		38.63	%
Direct Financing Leases		-		2,238,372		1,899,707		4,138,079		14.56	%
Residential Real Estate		307,676		917,857		349,538		1,575,071		5.54	%
Installment and Other Consumer		102,312		237,488		15,218		355,018		1.25	%
	$	422,880	$	20,443,137	$	7,562,821	$	28,428,838		100.00	%

	As of December 31, 2016
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	346,234	$	4,187,786	$	4,733,997	$	9,268,017		43.65	%
CRE
Owner-Occupied CRE		-		332,148		-		332,148		1.56	%
Commercial Construction, Land Development, and Other Land		-		4,353,819		-		4,353,819		20.51	%
Other Non Owner-Occupied CRE		-		1,436,149		-		1,436,149		6.77	%
Direct Financing Leases		215,225		2,446,181		1,008,244		3,669,650		17.28	%
Residential Real Estate		294,854		1,075,639		585,541		1,956,034		9.21	%
Installment and Other Consumer		110,501		87,344		18,746		216,591		1.02	%
	$	966,814	$	13,919,066	$	6,346,528	$	21,232,408		100.00	%

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

	Three Months Ended September 30, 2017
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	14,207,733		$	12,999,233	$	2,638,301		$	2,430,454		$	1,080,911		$	33,356,632
Provisions (credits) charged to expense		469,977			1,349,393		179,190			(11,654	)		99,530			2,086,436
Loans/leases charged off		(338,361	)		-		(268,669	)		(25,822	)		(16,872	)		(649,724	)
Recoveries on loans/leases previously charged off		63,366			10,748		103,936			6,000			4,947			188,997
Balance, ending	$	14,402,715		$	14,359,374	$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341

	Three Months Ended September 30, 2016
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,724,506		$	10,987,062	$	3,226,194		$	2,014,987		$	1,144,741		$	28,097,490
Provisions charged to expense		859,031			8,962		641,435			79,221			19,337			1,607,986
Loans/leases charged off		(96,330	)		-		(847,668	)		(38,554	)		(4,530	)		(987,082	)
Recoveries on loans/leases previously charged off		70,759			6,500		22,001			-			9,181			108,441
Balance, ending	$	11,557,966		$	11,002,524	$	3,041,962		$	2,055,654		$	1,168,729		$	28,826,835

	Nine Months Ended September 30, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Provisions charged to expense		2,345,121			2,655,521			981,877			148,017			84,002			6,214,538
Loans/leases charged off		(630,704	)		(10,375	)		(1,611,432	)		(101,006	)		(40,436	)		(2,393,953	)
Recoveries on loans/leases previously charged off		143,188			43,619			170,415			9,623			37,463			404,308
Balance, ending	$	14,402,715		$	14,359,374		$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341

	Nine Months Ended September 30, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,484,080		$	9,375,117		$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906
Provisions (credits) charged to expense		1,357,262			1,644,008			1,580,677			336,865			(39,991	)		4,878,821
Loans/leases charged off		(388,879	)		(23,101	)		(1,983,322	)		(72,261	)		(22,018	)		(2,489,581	)
Recoveries on loans/leases previously charged off		105,503			6,500			49,519			900			134,267			296,689
Balance, ending	$	11,557,966		$	11,002,524		$	3,041,962		$	2,055,654		$	1,168,729		$	28,826,835

	As of September 30, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,062,424		$	2,374,308		$	652,775		$	261,097		$	24,487		$	4,375,091
Allowance for nonimpaired loans/leases		13,340,291			11,985,066			1,999,983			2,137,881			1,144,029			30,607,250
	$	14,402,715		$	14,359,374		$	2,652,758		$	2,398,978		$	1,168,516		$	34,982,341
Impaired loans/leases	$	6,567,909		$	15,588,929		$	3,952,190		$	1,328,160		$	191,941		$	27,629,129
Nonimpaired loans/leases		1,027,962,877			1,142,266,734			143,110,703			238,629,756			89,413,914			2,641,383,984
	$	1,034,530,786		$	1,157,855,663		$	147,062,893		$	239,957,916		$	89,605,855		$	2,669,013,113
Allowance as a percentage of impaired loans/leases		16.18	%		15.23	%		16.52	%		19.66	%		12.76	%		15.84	%
Allowance as a percentage of nonimpaired loans/leases		1.30	%		1.05	%		1.40	%		0.90	%		1.28	%		1.16	%
Total allowance as a percentage of total loans/leases		1.39	%		1.24	%		1.80	%		1.00	%		1.30	%		1.31	%

	As of December 31, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,771,537		$	693,919		$	848,919		$	289,112		$	39,481		$	3,642,968
Allowance for nonimpaired loans/leases		10,773,573			10,976,690			2,262,979			2,053,232			1,048,006			27,114,480
	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Impaired loans/leases	$	8,936,451		$	6,112,114		$	3,256,264		$	1,661,180		$	106,090		$	20,072,099
Nonimpaired loans/leases		818,700,812			1,087,346,746			162,163,096			227,571,924			81,559,605			2,377,342,183
	$	827,637,263		$	1,093,458,860		$	165,419,360		$	229,233,104		$	81,665,695		$	2,397,414,282
Allowance as a percentage of impaired loans/leases		19.82	%		11.35	%		26.07	%		17.40	%		37.21	%		18.15	%
Allowance as a percentage of nonimpaired loans/leases		1.32	%		1.01	%		1.40	%		0.90	%		1.28	%		1.14	%
Total allowance as a percentage of total loans/leases		1.52	%		1.07	%		1.88	%		1.02	%		1.33	%		1.28	%

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:
C&I	$	1,414,985	$	1,425,422	$	-	$	1,129,388	$	42,567	$	42,567
CRE
Owner-Occupied CRE		107,322		107,322		-		26,831		6,783		6,783
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,198,439		1,198,439		-		1,178,032		-		-
Direct Financing Leases		2,971,485		2,971,485		-		2,708,433		97,603		97,603
Residential Real Estate		711,098		785,877		-		619,466		1,161		1,161
Installment and Other Consumer		137,704		137,704		-		124,530		-		-
	$	6,541,033	$	6,626,249	$	-	$	5,786,680	$	148,114	$	148,114
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,152,924	$	5,156,763	$	1,062,424	$	4,994,557	$	150,848	$	150,848
CRE
Owner-Occupied CRE		155,020		155,020		51,520		238,584		-		-
Commercial Construction, Land Development, and Other Land		4,344,742		4,344,742		818,536		4,348,711		-		-
Other Non Owner-Occupied CRE		9,783,406		9,783,406		1,504,252		2,464,981		-		-
Direct Financing Leases		980,705		980,705		652,775		736,537		-		-
Residential Real Estate		617,062		617,062		261,097		496,243		12,830		12,830
Installment and Other Consumer		54,237		54,237		24,487		33,162		317		317
	$	21,088,096	$	21,091,935	$	4,375,091	$	13,312,775	$	163,995	$	163,995
Total Impaired Loans/Leases:
C&I	$	6,567,909	$	6,582,185	$	1,062,424	$	6,123,945	$	193,415	$	193,415
CRE
Owner-Occupied CRE		262,342		262,342		51,520		265,415		6,783		6,783
Commercial Construction, Land Development, and Other Land		4,344,742		4,344,742		818,536		4,348,711		-		-
Other Non Owner-Occupied CRE		10,981,845		10,981,845		1,504,252		3,643,013		-		-
Direct Financing Leases		3,952,190		3,952,190		652,775		3,444,970		97,603		97,603
Residential Real Estate		1,328,160		1,402,939		261,097		1,115,709		13,991		13,991
Installment and Other Consumer		191,941		191,941		24,487		157,692		317		317
	$	27,629,129	$	27,718,184	$	4,375,091	$	19,099,455	$	312,109	$	312,109

	Three Months Ended September 30, 2017						Three Months Ended September 30, 2016
Classes of Loans/Leases	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	1,301,977	$	25,816	$	25,816	$	1,677,527	$	3,301	$	3,301
CRE
Owner-Occupied CRE		53,661		6,783		6,783		767,032		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,173,629		-		-		1,969,034		-		-
Direct Financing Leases		2,820,518		39,759		39,759		2,008,095		21,095		21,095
Residential Real Estate		690,791		-		-		1,481,340		941		941
Installment and Other Consumer		139,533		-		-		322,738		-		-
	$	6,180,109	$	72,358	$	72,358	$	8,225,766	$	25,337	$	25,337
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,157,671	$	53,127	$	53,127	$	4,188,621	$	-	$	-
CRE
Owner-Occupied CRE		155,020		-		-		363,911		-		-
Commercial Construction, Land Development, and Other Land		4,345,880		-		-		187,831		-		-
Other Non Owner-Occupied CRE		4,929,960		-		-		135,141		-		-
Direct Financing Leases		893,042		-		-		793,769		-		-
Residential Real Estate		550,476		5,601		5,601		807,827		1,503		1,503
Installment and Other Consumer		48,164		99		99		160,301		1,458		1,458
	$	16,080,213	$	58,827	$	58,827	$	6,637,401	$	2,961	$	2,961
Total Impaired Loans/Leases:
C&I	$	6,459,648	$	78,943	$	78,943	$	5,866,148	$	3,301	$	3,301
CRE
Owner-Occupied CRE		208,681		6,783		6,783		1,130,943		-		-
Commercial Construction, Land Development, and Other Land		4,345,880		-		-		187,831		-		-
Other Non Owner-Occupied CRE		6,103,589		-		-		2,104,175		-		-
Direct Financing Leases		3,713,560		39,759		39,759		2,801,864		21,095		21,095
Residential Real Estate		1,241,267		5,601		5,601		2,289,167		2,444		2,444
Installment and Other Consumer		187,697		99		99		483,039		1,458		1,458
	$	22,260,322	$	131,185	$	131,185	$	14,863,167	$	28,298	$	28,298

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	841,895	$	951,600	$	-
CRE
Owner-Occupied CRE		-		93,774		-
Commercial Construction, Land Development, and Other Land		-		-		-
Other Non Owner-Occupied CRE		1,196,549		1,196,549		-
Direct Financing Leases		1,690,121		1,690,121		-
Residential Real Estate		853,294		892,495		-
Installment and Other Consumer		55,734		55,734		-
	$	4,637,593	$	4,880,273	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	8,094,556	$	8,098,395	$	1,771,537
CRE
Owner-Occupied CRE		322,148		322,148		57,398
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,817		577,611
Other Non Owner-Occupied CRE		239,600		239,600		58,910
Direct Financing Leases		1,566,143		1,566,143		848,919
Residential Real Estate		807,886		882,018		289,112
Installment and Other Consumer		50,356		50,356		39,481
	$	15,434,506	$	15,512,477	$	3,642,968
Total Impaired Loans/Leases:
C&I	$	8,936,451	$	9,049,995	$	1,771,537
CRE
Owner-Occupied CRE		322,148		415,922		57,398
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,817		577,611
Other Non Owner-Occupied CRE		1,436,149		1,436,149		58,910
Direct Financing Leases		3,256,264		3,256,264		848,919
Residential Real Estate		1,661,180		1,774,513		289,112
Installment and Other Consumer		106,090		106,090		39,481
	$	20,072,099	$	20,392,750	$	3,642,968

Financing Receivable Credit Quality Indicators [Table Text Block]

	As of September 30, 2017
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	1,000,751,792	$	313,179,076	$	161,772,865	$	639,045,018	$	2,114,748,751		96.45	%
Special Mention (Rating 6)		9,694,041		9,155,153		2,167,999		6,297,895		27,315,088		1.25	%
Substandard (Rating 7)		24,084,953		4,810,537		5,051,840		16,375,280		50,322,610		2.30	%
Doubtful (Rating 8)		-		-		-		-		-		-
	$	1,034,530,786	$	327,144,766	$	168,992,704	$	661,718,193	$	2,192,386,449		100.00	%

	As of December 31, 2016
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	796,568,451	$	314,447,662	$	158,108,465	$	582,854,048	$	1,851,978,626		96.40	%
Special Mention (Rating 6)		6,305,772		7,559,380		1,780,000		4,437,122		20,082,274		1.05	%
Substandard (Rating 7)		24,763,040		10,380,369		5,261,026		8,630,578		49,035,013		2.55	%
Doubtful (Rating 8)		-		210		-		-		210		0.00	%
	$	827,637,263	$	332,387,621	$	165,149,491	$	595,921,748	$	1,921,096,123		100.00	%

Financing Receivable Credit Quality Indicators Performance Status [Table Text Block]

	As of September 30, 2017
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	142,924,814	$	238,382,845	$	89,250,837	$	470,558,496		98.73	%
Nonperforming		4,138,079		1,575,071		355,018		6,068,168		1.27	%
	$	147,062,893	$	239,957,916	$	89,605,855	$	476,626,664		100.00	%

	As of December 31, 2016
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	161,749,710	$	227,277,070	$	81,449,104	$	470,475,884		98.77	%
Nonperforming		3,669,650		1,956,034		216,591		5,842,275		1.23	%
	$	165,419,360	$	229,233,104	$	81,665,695	$	476,318,159		100.00	%

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	For the three months ended September 30, 2017								For the three months ended September 30, 2016
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
C&I		4	$	620,452	$	620,452	$	-		-	$	-	$	-	$	-
Direct Financing Leases		4		416,597		416,597		-		2		461,643		461,643		-
		8	$	1,037,049	$	1,037,049	$	-		2	$	461,643	$	461,643	$	-
TOTAL		8	$	1,037,049	$	1,037,049	$	-		2	$	461,643	$	461,643	$	-

	For the nine months ended September 30, 2017								For the nine months ended September 30, 2016
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 - Extension of Maturity
C&I		-	$	-	$	-	$	-		1	$	52,286	$	52,286	$	-
Direct Financing Leases		2		104,382		104,382		-		4		410,653		410,653		-
		2	$	104,382	$	104,382	$	-		5	$	462,939	$	462,939	$	-
CONCESSION - Significant Payment Delay
C&I		7	$	801,650	$	801,650	$	-		1	$	62,140	$	62,140	$	-
Direct Financing Leases		27		1,889,000		1,889,000		-		6		771,672		771,672		-
		34	$	2,690,650	$	2,690,650	$	-		7	$	833,812	$	833,812	$	-
CONCESSION - Interest Rate Adjusted Below Market
CRE - Other		-	$	-	$	-	$	-		1	$	1,233,740	$	1,233,740	$	-
		-	$	-	$	-	$	-		1	$	1,233,740	$	1,233,740	$	-
TOTAL		36	$	2,795,032	$	2,795,032	$	-		13	$	2,530,491	$	2,530,491	$	-

XML

Note 4 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

	Three months ended				Nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Net income	$	7,853,935	$	6,107,501	$	25,804,917	$	19,157,457
Basic EPS	$	0.60	$	0.47	$	1.96	$	1.55
Diluted EPS	$	0.58	$	0.46	$	1.91	$	1.52
Weighted average common shares outstanding*		13,151,350		13,066,777		13,151,672		12,398,491
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan		356,605		202,926		357,894		181,551
Weighted average common and common equivalent shares outstanding		13,507,955		13,269,703		13,509,566		12,580,042

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Note 5 - Fair Value (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2017:
Securities AFS:
U.S. govt. sponsored agency securities	$	39,340,168	$	-	$	39,340,168	$	-
Residential mortgage-backed and related securities		158,968,509		-		158,968,509		-
Municipal securities		56,763,060		-		56,763,060		-
Other securities		4,882,685		1,017		4,881,668		-
Interest rate caps		390,527		-		390,527		-
Interest rate swaps - assets		2,603,002		-		2,603,002		-
Total assets measured at fair value	$	262,947,951	$	1,017	$	262,946,934	$	-
Interest rate swaps - liabilities	$	2,603,002	$	-	$	2,603,002	$	-
Total liabilities measured at fair value	$	2,603,002	$	-	$	2,603,002	$	-
December 31, 2016 :
Securities AFS:
U.S. govt. sponsored agency securities	$	46,083,607	$	-	$	46,083,607	$	-
Residential mortgage-backed and related securities		147,702,127		-		147,702,127		-
Municipal securities		52,604,426		-		52,604,426		-
Other securities		4,722,979		1,361		4,721,618		-
Interest rate caps		576,527		-		576,527		-
Interest rate swaps - assets		2,338,281		-		2,338,281		-
Total assets measured at fair value	$	254,027,947	$	1,361	$	254,026,586	$	-
Interest rate swaps - liabilities	$	2,338,281	$	-	$	2,338,281	$	-
Total liabilities measured at fair value	$	2,338,281	$	-	$	2,338,281	$	-

			Fair Value Measurements at Reporting Date Using
	Fair Value		Level 1		Level 2		Level 3
September 30, 2017:
Impaired loans/leases	$	18,177,320	$	-	$	-	$	18,177,320
OREO		5,545,633		-		-		5,545,633
	$	23,722,953	$	-	$	-	$	23,722,953
December 31, 2016:
Impaired loans/leases	$	12,823,121	$	-	$	-	$	12,823,121
OREO		5,964,952		-		-		5,964,952
	$	18,788,073	$	-	$	-	$	18,788,073

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

	Quantitative Information about Level Fair Value Measurements
	Fair Value September 30, 2017		Fair Value December 31, 2016		Valuation Technique	Unobservable Input	Range
Impaired loans/leases	$	18,177,320	$	12,823,121	Appraisal of collateral	Appraisal adjustments		-10.00%	to	-50.00	%
OREO		5,545,633		5,964,952	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 September 30, 2017				As of December 31, 2016
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Value		Fair Value		Value		Fair Value
Cash and due from banks	Level 1	$	56,274,561	$	56,274,561	$	70,569,993	$	70,569,993
Federal funds sold	Level 2		20,568,000		20,568,000		22,257,000	$	22,257,000
Interest-bearing deposits at financial institutions	Level 2		41,221,383		41,221,383		63,948,925	$	63,948,925
Investment securities:
HTM	Level 2		323,981,227		323,436,578		322,909,056	$	320,414,899
AFS	See Previous Table		259,954,422		259,954,422		251,113,139	$	251,113,139
Loans/leases receivable, net	Level 3		16,830,852		18,177,320		11,873,260	$	12,823,121
Loans/leases receivable, net	Level 2		2,624,941,618		2,607,041,000		2,362,856,277	$	2,344,462,740
Interest rate caps	Level 2		390,527		390,527		576,527	$	576,527
Interest rate swaps - assets	Level 2		2,603,002		2,603,002		2,338,281	$	2,338,281
Deposits:
Nonmaturity deposits	Level 2		2,365,493,644		2,365,493,644		2,188,683,349	$	2,188,683,349
Time deposits	Level 2		528,774,838		526,265,000		480,577,924	$	479,605,000
Short-term borrowings	Level 2		16,010,805		16,010,805		39,971,387	$	39,971,387
FHLB advances	Level 2		169,055,000		169,434,000		137,500,000	$	138,338,000
Other borrowings	Level 2		77,500,000		78,428,000		80,000,000	$	81,282,000
Junior subordinated debentures	Level 2		33,578,744		25,349,715		33,480,202	$	24,881,494
Interest rate swaps - liabilities	Level 2		2,603,002		2,603,002		2,338,281		2,338,281

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Note 6 - Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

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

	Commercial Banking								Wealth					Intercompany			Consolidated
	QCBT		CRBT		CSB		RB&T		Management		All Other			Eliminations			Total
Three Months Ended September 30, 2017
Total revenue	$	11,771,842	$	10,892,025	$	7,678,006	$	4,534,768	$	2,689,853	$	10,028,660		$	(7,052,986	)	$	40,542,168
Net interest income	$	11,664,970	$	7,903,483	$	6,379,111	$	3,245,346	$	-	$	(636,562	)	$	-		$	28,556,348
Provision	$	1,140,436	$	200,000	$	574,000	$	172,000	$	-	$	-		$	-		$	2,086,436
Net income	$	3,929,158	$	3,130,319	$	1,669,209	$	726,926	$	539,091	$	7,853,935		$	(9,994,703	)	$	7,853,935
Goodwill	$	3,222,688	$	-	$	9,888,225	$	-	$	-	$	-		$	-		$	13,110,913
Core deposit intangible	$	-	$	1,122,263	$	5,566,350	$	-	$	-	$	-		$	-		$	6,688,613
Total assets	$	1,456,251,244	$	1,007,062,151	$	631,963,143	$	445,098,530	$	-	$	395,697,820		$	(385,609,794	)	$	3,550,463,094
Three Months Ended September 30, 2016
Total revenue	$	18,026,215	$	10,065,032	$	2,675,741	$	4,232,205	$	2,284,577	$	8,463,636		$	(8,507,270	)	$	37,240,136
Net interest income	$	11,225,414	$	7,594,557	$	2,191,862	$	3,056,989	$	-	$	(438,045	)	$	-		$	23,630,777
Provision	$	1,137,986	$	-	$	270,000	$	200,000	$	-	$	-		$	-		$	1,607,986
Net income	$	3,596,469	$	3,286,724	$	188,608	$	944,781	$	398,859	$	6,107,492		$	(8,415,432	)	$	6,107,501
Goodwill	$	3,222,688	$	-	$	10,408,938	$	-	$	-	$	-		$	-		$	13,631,626
Core deposit intangible	$	-	$	1,321,775	$	6,291,818	$	-	$	-	$	-		$	-		$	7,613,593
Total assets	$	1,407,733,009	$	887,592,695	$	580,210,270	$	393,191,774	$	-	$	368,990,749		$	(356,732,388	)	$	3,280,986,109
Nine Months Ended September 30, 2017
Total revenue	$	39,517,823	$	31,428,339	$	23,981,019	$	12,723,998	$	7,952,495	$	30,086,617		$	(27,283,484	)	$	118,406,807
Net interest income	$	34,381,270	$	22,107,955	$	20,326,439	$	9,308,932	$	-	$	(1,852,668	)	$	-		$	84,271,928
Provision	$	2,624,538	$	750,000	$	2,209,000	$	631,000	$	-	$	-		$	-		$	6,214,538
Net income	$	11,657,941	$	8,893,461	$	5,484,383	$	2,406,337	$	1,554,618	$	25,804,917		$	(29,996,740	)	$	25,804,917
Goodwill	$	3,222,688	$	-	$	9,888,225	$	-	$	-	$	-		$	-		$	13,110,913
Core deposit intangible	$	-	$	1,122,263	$	5,566,350	$	-	$	-	$	-		$	-		$	6,688,613
Total assets	$	1,456,251,244	$	1,007,062,151	$	631,963,143	$	445,098,530	$	-	$	395,697,820		$	(385,609,794	)	$	3,550,463,094
Nine Months Ended September 30, 2016
Total revenue	$	45,706,061	$	31,342,345	$	2,675,741	$	11,945,081	$	6,723,690	$	23,567,906		$	(23,720,471	)	$	98,240,353
Net interest income	$	33,394,620	$	21,755,270	$	2,191,862	$	8,914,380	$	-	$	(1,019,020	)	$	-		$	65,237,112
Provision	$	3,108,821	$	700,000	$	270,000	$	800,000	$	-	$	-		$	-		$	4,878,821
Net income	$	10,326,508	$	9,366,441	$	188,608	$	2,334,735	$	1,232,831	$	19,157,447		$	(23,449,113	)	$	19,157,457
Goodwill	$	3,222,688	$	-	$	10,408,938	$	-	$	-	$	-		$	-		$	13,631,626
Core deposit intangible	$	-	$	1,321,775	$	6,291,818	$	-	$	-	$	-		$	-		$	7,613,593
Total assets	$	1,407,733,009	$	887,592,695	$	580,210,270	$	393,191,774	$	-	$	368,990,749		$	(356,732,388	)	$	3,280,986,109

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Note 7 - Regulatory Capital Requirements (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2017:
Company:
Total risk-based capital	$	356,559		11.49	%	$	248,360	>	8.00	%	$	287,166	>	9.250	%	$	310,450	>	10.00	%
Tier 1 risk-based capital		321,213		10.35	%		186,270	>	6.00			225,076	>	7.250			248,360	>	8.00
Tier 1 leverage		321,213		9.23	%		139,146	>	4.00			139,146	>	4.000			173,932	>	5.00
Common equity Tier 1		289,612		9.33	%		139,703	>	4.50			178,509	>	5.750			201,793	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	152,635		12.25	%	$	99,693	>	8.00	%	$	115,270	>	9.250	%	$	124,616	>	10.00	%
Tier 1 risk-based capital		138,453		11.11	%		74,770	>	6.00			90,347	>	7.250			99,693	>	8.00
Tier 1 leverage		138,453		9.40	%		58,913	>	4.00			58,913	>	4.000			73,642	>	5.00
Common equity Tier 1		138,453		11.11	%		56,077	>	4.50			71,654	>	5.750			81,001	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	114,234		12.16	%	$	75,150	>	8.00	%	$	86,893	>	9.250	%	$	93,938	>	10.00	%
Tier 1 risk-based capital		102,545		10.92	%		56,363	>	6.00			68,105	>	7.250			75,150	>	8.00
Tier 1 leverage		102,545		10.27	%		39,950	>	4.00			39,950	>	4.000			49,938	>	5.00
Common equity Tier 1		102,545		10.92	%		42,272	>	4.50			54,014	>	5.750			61,060	>	6.50
Community State Bank:
Total risk-based capital	$	67,071		12.83	%	$	41,837	>	8.00	%	$	48,374	>	9.250	%	$	52,296	>	10.00	%
Tier 1 risk-based capital		63,356		12.11	%		31,378	>	6.00			37,915	>	7.250			41,837	>	8.00
Tier 1 leverage		63,356		10.14	%		24,991	>	4.00			24,991	>	4.000			31,239	>	5.00
Common equity Tier 1		63,356		12.11	%		23,533	>	4.50			30,070	>	5.750			33,992	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	45,031		11.48	%	$	31,394	>	8.00	%	$	36,299	>	9.250	%	$	39,243	>	10.00	%
Tier 1 risk-based capital		40,120		10.22	%		23,546	>	6.00			28,451	>	7.250			31,394	>	8.00
Tier 1 leverage		40,120		9.26	%		17,328	>	4.00			17,328	>	4.000			21,660	>	5.00
Common equity Tier 1		40,120		10.22	%		17,659	>	4.50			22,564	>	5.750			25,508	>	6.50

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016:
Company:
Total risk-based capital	$	327,440		11.56	%	$	226,587	>	8.00	%	$	244,289	>	8.625	%	$	283,233	>	10.00	%
Tier 1 risk-based capital		296,366		10.46	%		169,940	>	6.00			187,642	>	6.625			226,587	>	8.00
Tier 1 leverage		296,366		9.10	%		130,229	>	4.00			130,229	>	4.000			162,787	>	5.00
Common equity Tier 1		266,419		9.41	%		127,455	>	4.50			145,157	>	5.125			184,102	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	142,990		12.27	%	$	93,212	>	8.00	%	$	100,494	>	8.625	%	$	116,515	>	10.00	%
Tier 1 risk-based capital		129,524		11.12	%		69,909	>	6.00			77,191	>	6.625			93,212	>	8.00
Tier 1 leverage		129,524		9.18	%		56,445	>	4.00			56,445	>	4.000			70,556	>	5.00
Common equity Tier 1		129,524		11.12	%		52,432	>	4.50			59,714	>	5.125			75,735	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	106,791		12.82	%	$	66,623	>	8.00	%	$	71,828	>	8.625	%	$	83,279	>	10.00	%
Tier 1 risk-based capital		96,369		11.57	%		49,968	>	6.00			55,173	>	6.625			66,623	>	8.00
Tier 1 leverage		96,369		10.69	%		36,061	>	4.00			36,061	>	4.000			45,076	>	5.00
Common equity Tier 1		96,369		11.57	%		37,476	>	4.50			42,681	>	5.125			54,132	>	6.50
Community State Bank:
Total risk-based capital	$	68,216		13.81	%	$	39,521	>	8.00	%	$	42,609	>	8.625	%	$	49,402	>	10.00	%
Tier 1 risk-based capital		66,746		13.51	%		29,641	>	6.00			32,729	>	6.625			39,522	>	8.00
Tier 1 leverage		66,746		11.75	%		22,726	>	4.00			22,726	>	4.000			28,408	>	5.00
Common equity Tier 1		66,746		13.51	%		22,231	>	4.50			25,319	>	5.125			32,111	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	42,007		12.26	%	$	27,410	>	8.00	%	$	29,551	>	8.625	%	$	34,262	>	10.00	%
Tier 1 risk-based capital		37,716		11.01	%		20,558	>	6.00			22,699	>	6.625			27,410	>	8.00
Tier 1 leverage		37,716		9.57	%		15,772	>	4.00			15,772	>	4.000			19,716	>	5.00
Common equity Tier 1		37,716		11.01	%		15,418	>	4.50			17,759	>	5.125			22,270	>	6.50

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Note 1 - Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Number of Subsidiaries	4		4
Income Tax Expense (Benefit)	$ 1,921,533	$ 1,858,208	$ 6,946,555	$ 6,030,375
Accounting Standards Update 2016-09 [Member]
Income Tax Expense (Benefit)	$ (191,000)		$ (814,000)

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Note 2 - Investment Securities (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Number of Securities	567		567
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	203		203
Aggregate Depreciation from Amortized Cost Basis, Percent	0.80%		0.80%
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	80		80
Accounts Receivable, Sale of Securities, from Broker		$ 32,100		$ 32,100
General Obligation Bonds [Member] | Stockholders' Equity, Total [Member] | Credit Concentration Risk [Member]
Concentration Risk, Percentage			0.00%		0.00%
Revenue Bonds [Member] | Stockholders' Equity, Total [Member] | Credit Concentration Risk [Member]
Concentration Risk, Percentage			0.00%		0.00%
Municipal Bonds [Member] | General Obligation Bonds [Member]
Number of Issuers	119		119		116
Other Investments	$ 100,400		$ 100,400		$ 116,500
Number of States Investments Held in	21		21		21
Municipal Bonds [Member] | General Obligation Bonds [Member] | Aggregate Fair Value Exceeding 5 Million [Member]
Number of States Investments Held in					5
Municipal Bonds [Member] | General Obligation Bonds [Member] | Minimum [Member]
Other Investments	$ 5,000		$ 5,000		$ 5,000
Number of States Investments Held in	6		6
Municipal Bonds [Member] | Revenue Bonds [Member]
Number of Issuers	132		132		120
Other Investments	$ 278,700		$ 278,700		$ 255,500
Number of States Investments Held in	14		14		12
Municipal Bonds [Member] | Revenue Bonds [Member] | Aggregate Fair Value Exceeding 5 Million [Member]
Number of States Investments Held in	6		6		6
Municipal Bonds [Member] | Revenue Bonds [Member] | Minimum [Member]
Other Investments	$ 5,000		$ 5,000		$ 5,000
Equity Securities [Member]
Percentage of Investment Portfolio	1.00%		1.00%		1.00%
Debt Securities [Member]
Other than Temporary Impairment Losses, Investments	$ 0	$ 0	$ 0	$ 0

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Note 2 - Investment Securities - Amortized Cost and Fair Value of Investment Securities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities HTM:
Securities held to maturity, amortized cost	$ 323,981,227	$ 322,909,056
Securities held to maturity, gross unrealized gains	2,084,997	2,200,577
Securities held to maturity, gross unrealized (losses)	(2,629,646)	(4,694,734)
Securities held to maturity, fair value	323,436,578	320,414,899
Securities AFS:
Securities available for sale, amortized cost	260,367,974	253,609,401
Securities available for sale, gross unrealized gains	1,658,065	1,437,658
Securities available for sale, gross unrealized (losses)	(2,071,617)	(3,933,920)
Securities available for sale, fair value	259,954,422	251,113,139
US States and Political Subdivisions Debt Securities [Member]
Securities HTM:
Securities held to maturity, amortized cost	322,931,227	321,859,056
Securities held to maturity, gross unrealized gains	2,084,997	2,200,577
Securities held to maturity, gross unrealized (losses)	(2,629,646)	(4,694,734)
Securities held to maturity, fair value	322,386,578	319,364,899
Securities AFS:
Securities available for sale, amortized cost	56,621,412	52,816,541
Securities available for sale, gross unrealized gains	435,356	425,801
Securities available for sale, gross unrealized (losses)	(293,708)	(637,916)
Securities available for sale, fair value	56,763,060	52,604,426
Other Securities [Member]
Securities HTM:
Securities held to maturity, amortized cost	1,050,000	1,050,000
Securities held to maturity, gross unrealized gains
Securities held to maturity, gross unrealized (losses)
Securities held to maturity, fair value	1,050,000	1,050,000
Securities AFS:
Securities available for sale, amortized cost	4,077,128	4,046,332
Securities available for sale, gross unrealized gains	826,135	703,978
Securities available for sale, gross unrealized (losses)	(20,578)	(27,331)
Securities available for sale, fair value	4,882,685	4,722,979
US Government Agencies Debt Securities [Member]
Securities AFS:
Securities available for sale, amortized cost	39,340,306	46,281,306
Securities available for sale, gross unrealized gains	129,768	132,886
Securities available for sale, gross unrealized (losses)	(129,906)	(330,585)
Securities available for sale, fair value	39,340,168	46,083,607
Residential Mortgage Backed Securities [Member]
Securities AFS:
Securities available for sale, amortized cost	160,329,128	150,465,222
Securities available for sale, gross unrealized gains	266,806	174,993
Securities available for sale, gross unrealized (losses)	(1,627,425)	(2,938,088)
Securities available for sale, fair value	$ 158,968,509	$ 147,702,127

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Note 2 - Investment Securities - Securities in a Continuous Unrealized Loss Position (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities available for sale, less than 12 months, fair value	$ 155,308,949	$ 180,624,957
Securities available for sale, less than 12 months, gross unrealized losses	(1,575,708)	(3,545,097)
Securities available for sale, 12 months or more, fair value	25,521,304	13,274,726
Securities available for sale, 12 months or more, gross unrealized losses	(495,909)	(388,823)
Securities available for sale, fair value	180,830,253	193,899,683
Securities available for sale, gross unrealized losses	(2,071,617)	(3,933,920)
US States and Political Subdivisions Debt Securities [Member]
Securities held to maturity, less than 12 months, fair value	17,779,999	122,271,533
Securities held to maturity, less than 12 months, gross unrealized losses	(254,147)	(4,076,647)
Securities held to maturity, 12 months or more, fair value	68,663,362	13,010,803
Securities held to maturity, 12 months or more, gross unrealized losses	(2,375,499)	(618,087)
Securities held to maturity, fair value	86,443,361	135,282,336
Securities held to maturity, gross unrealized losses	(2,629,646)	(4,694,734)
Securities available for sale, less than 12 months, fair value	18,776,501	34,152,822
Securities available for sale, less than 12 months, gross unrealized losses	(169,253)	(618,462)
Securities available for sale, 12 months or more, fair value	12,872,616	338,099
Securities available for sale, 12 months or more, gross unrealized losses	(124,455)	(19,454)
Securities available for sale, fair value	31,649,117	34,490,921
Securities available for sale, gross unrealized losses	(293,708)	(637,916)
US Government Agencies Debt Securities [Member]
Securities available for sale, less than 12 months, fair value	23,607,646	21,788,139
Securities available for sale, less than 12 months, gross unrealized losses	(129,906)	(257,640)
Securities available for sale, 12 months or more, fair value		5,499,012
Securities available for sale, 12 months or more, gross unrealized losses		(72,945)
Securities available for sale, fair value	23,607,646	27,287,151
Securities available for sale, gross unrealized losses	(129,906)	(330,585)
Residential Mortgage Backed Securities [Member]
Securities available for sale, less than 12 months, fair value	111,996,030	121,506,582
Securities available for sale, less than 12 months, gross unrealized losses	(1,255,971)	(2,641,664)
Securities available for sale, 12 months or more, fair value	12,648,688	7,437,615
Securities available for sale, 12 months or more, gross unrealized losses	(371,454)	(296,424)
Securities available for sale, fair value	124,644,718	128,944,197
Securities available for sale, gross unrealized losses	(1,627,425)	(2,938,088)
Other Securities [Member]
Securities available for sale, less than 12 months, fair value	928,772	3,177,414
Securities available for sale, less than 12 months, gross unrealized losses	(20,578)	(27,331)
Securities available for sale, fair value	928,772	3,177,414
Securities available for sale, gross unrealized losses	$ (20,578)	$ (27,331)

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Note 2 - Investment Securities - Sales of Securities (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Proceeds from sales of securities	[1]	$ 8,415,795	$ 58,775,764	$ 21,969,870	$ 119,850,909
Pre-tax gross gains from sales of securities		6,312	4,281,828	65,880	4,815,373
Pre-tax gross losses from sales of securities		$ (69,900)	$ (30,055)	$ (91,004)	$ (187,090)

[1] Proceeds from sales of securities for the nine months ended September 30, 2016 includes $32.1 million receivable from the broker for the sale of securities

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Note 2 - Investment Securities - Securities by Contractual Maturity (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities HTM:
Securities held to maturity, due in one year or less, amortized cost	$ 2,940,492
Securities held to maturity, due in one year or less, fair value	2,940,378
Securities held to maturity, due after one year through five years, amortized cost	18,268,264
Securities held to maturity, due after one year through five years, fair value	18,374,059
Securities held to maturity, due after five years, amortized cost	302,772,471
Securities held to maturity, due after five years, fair value	302,122,141
Securities held to maturity, amortized cost	323,981,227
Securities held to maturity, fair value	323,436,578	$ 320,414,899
Securities AFS:
Securities available for sale, due in one year or less, amortized cost	3,135,008
Securities available for sale, Due in one year or less, fair value	3,143,223
Securities available for sale, due after one year through five years, amortized cost	26,545,903
Securities available for sale, Due after one year through five years, fair value	26,712,930
Securities available for sale, due after five years, amortized cost	66,280,807
Securities available for sale, Due after five years, fair value	66,247,075
Securities available for sale, single maturity, amortized cost	95,961,718
Securities available for sale, single maturity, fair value	96,103,228
Securities available for sale, amortized cost	260,367,974
Securities available for sale, fair value	259,954,422
Securities available for sale, callable, amortized cost	260,367,974
Callable Securities [Member]
Securities AFS:
Securities available for sale, amortized cost	50,775,656
Securities available for sale, fair value	50,673,922
Securities available for sale, callable, amortized cost	50,775,656
US States and Political Subdivisions Debt Securities [Member]
Securities HTM:
Securities held to maturity, fair value	322,386,578	319,364,899
US States and Political Subdivisions Debt Securities [Member] | Callable Securities [Member]
Securities AFS:
Securities available for sale, no single maturity, amortized cost	45,727,004
Securities available for sale, no single maturity, fair value	45,640,630
Securities available for sale, callable, amortized cost	45,727,004
Securities available for sale, callable, fair value	45,640,630
US Government-sponsored Enterprises Debt Securities [Member] | Callable Securities [Member]
Securities AFS:
Securities available for sale, no single maturity, amortized cost	5,048,652
Securities available for sale, no single maturity, fair value	5,033,292
Securities available for sale, callable, amortized cost	5,048,652
Securities available for sale, callable, fair value	5,033,292
Residential Mortgage Backed Securities [Member]
Securities AFS:
Securities available for sale, no single maturity, amortized cost	160,329,128
Securities available for sale, no single maturity, fair value	158,968,509
Securities available for sale, callable, amortized cost	160,329,128
Securities available for sale, callable, fair value	158,968,509
Other Securities [Member]
Securities HTM:
Securities held to maturity, fair value	1,050,000	$ 1,050,000
Securities AFS:
Securities available for sale, no single maturity, amortized cost	4,077,128
Securities available for sale, no single maturity, fair value	4,882,685
Securities available for sale, callable, amortized cost	4,077,128
Securities available for sale, callable, fair value	4,882,685
Callable Securities [Member] | US States and Political Subdivisions Debt Securities [Member]
Securities HTM:
Securities held to maturity, callable, amortized cost	170,900,193
Securities held to maturity, callable, fair value	$ 171,633,005

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Note 2 - Investment Securities - General Obligation and Revenue Bonds (Details)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
General Obligation Bonds [Member]
Number of issuers	119	116
Amortized cost	$ 100,310,981	$ 117,205,307
Fair value	100,424,010	116,472,635
Average exposure per issuer (fair value)	$ 843,899	$ 1,004,074
General Obligation Bonds [Member] | North Dakota [Member]
Number of issuers	7	7
Amortized cost	$ 21,625,068	$ 22,169,050
Fair value	21,593,895	21,499,075
Average exposure per issuer (fair value)	$ 3,084,842	$ 3,071,296
General Obligation Bonds [Member] | Iowa [Member]
Number of issuers	21	27
Amortized cost	$ 17,990,978	$ 32,258,612
Fair value	17,993,895	32,231,936
Average exposure per issuer (fair value)	$ 856,852	$ 1,193,775
General Obligation Bonds [Member] | Missouri [Member]
Number of issuers	16	14
Amortized cost	$ 8,956,396	$ 8,291,192
Fair value	8,983,511	8,323,245
Average exposure per issuer (fair value)	$ 561,469	$ 594,518
General Obligation Bonds [Member] | Illinois [Member]
Number of issuers	21	19
Amortized cost	$ 18,319,644	$ 29,214,559
Fair value	18,501,854	29,308,438
Average exposure per issuer (fair value)	$ 881,041	$ 1,542,549
General Obligation Bonds [Member] | Ohio [Member]
Number of issuers	9	8
Amortized cost	$ 8,289,069	$ 6,790,398
Fair value	8,180,432	6,651,897
Average exposure per issuer (fair value)	$ 908,937	$ 831,487
General Obligation Bonds [Member] | Texas [Member]
Number of issuers	10
Amortized cost	$ 6,609,101
Fair value	6,543,660
Average exposure per issuer (fair value)	$ 654,366
General Obligation Bonds [Member] | Other States [Member]
Number of issuers	35	41
Amortized cost	$ 18,520,725	$ 18,481,496
Fair value	18,626,763	18,458,044
Average exposure per issuer (fair value)	$ 532,193	$ 450,196
Revenue Bonds [Member]
Number of issuers	132	120
Amortized cost	$ 279,241,658	$ 257,470,290
Fair value	278,725,628	255,496,690
Average exposure per issuer (fair value)	$ 2,111,558	$ 2,129,139
Revenue Bonds [Member] | North Dakota [Member]
Number of issuers	5	4
Amortized cost	$ 11,496,420	$ 8,089,067
Fair value	11,471,544	7,796,381
Average exposure per issuer (fair value)	$ 2,294,309	$ 1,949,095
Revenue Bonds [Member] | Iowa [Member]
Number of issuers	28	31
Amortized cost	$ 62,468,124	$ 70,788,393
Fair value	62,615,875	71,142,393
Average exposure per issuer (fair value)	$ 2,236,281	$ 2,294,916
Revenue Bonds [Member] | Missouri [Member]
Number of issuers	55	47
Amortized cost	$ 107,274,712	$ 90,784,441
Fair value	107,108,520	89,664,013
Average exposure per issuer (fair value)	$ 1,947,428	$ 1,907,745
Revenue Bonds [Member] | Indiana [Member]
Number of issuers	23	22
Amortized cost	$ 50,080,705	$ 47,994,737
Fair value	49,560,095	47,582,138
Average exposure per issuer (fair value)	$ 2,154,787	$ 2,162,824
Revenue Bonds [Member] | Ohio [Member]
Number of issuers	5	3
Amortized cost	$ 19,674,376	$ 13,650,000
Fair value	19,523,478	13,405,222
Average exposure per issuer (fair value)	$ 3,904,696	$ 4,468,407
Revenue Bonds [Member] | Kansas [Member]
Number of issuers	6	6
Amortized cost	$ 12,877,308	$ 13,476,366
Fair value	12,879,871	13,427,491
Average exposure per issuer (fair value)	$ 2,146,645	$ 2,237,915
Revenue Bonds [Member] | Other States [Member]
Number of issuers	10	7
Amortized cost	$ 15,370,013	$ 12,687,286
Fair value	15,566,245	12,479,052
Average exposure per issuer (fair value)	$ 1,556,625	$ 1,782,722

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Note 3 - Loans Leases Receivable (Details Textual)		3 Months Ended					9 Months Ended		12 Months Ended
		Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)		Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Losses on Residual Value		$ 0				$ 0	$ 0	$ 0
Loans and Leases Receivable, Net of Deferred Income		2,669,013,113		$ 2,397,414,282			2,669,013,113		$ 2,397,414,282
Financing Receivable, Recorded Investment, Nonaccrual Status		20,443,137		13,919,066			20,443,137		13,919,066
Financing Receivable, Modifications, Recorded Investment		$ 9,854,487		8,647,007			$ 9,854,487		8,647,007
Financing Receivable, Modifications, Number of Contracts		8				2	36	13
Financing Receivable, Modifications, Post-Modification Recorded Investment		$ 1,037,049				$ 461,643	$ 2,795,032	$ 2,530,491
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down			$ 112,000	$ 195,000					236,545
Financing Receivable, Modifications, Subsequent Default, Number of Contracts		4	2	2		0	4	0
Nonaccrual [Member]
Financing Receivable, Modifications, Number of Contracts							3	2
Financing Receivable, Modifications, Post-Modification Recorded Investment							$ 139,241	$ 1,384,680
Troubled Debt Restructurings [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 2,291,666		$ 2,300,479			2,291,666		$ 2,300,479
Financing Receivable, Modifications, Number of Contracts									1
Residential Portfolio Segment [Member]
Loans Receivable Held-for-sale, Net, Not Part of Disposal Group, Mortgage		290,320		1,135,500			290,320		$ 1,135,500
Loans and Leases Receivable, Net of Deferred Income	[1],[2]	239,957,916		229,233,104			239,957,916		229,233,104
Financing Receivable, Recorded Investment, Nonaccrual Status		917,857		1,075,639	[3]		917,857		1,075,639	[3]
Residential Portfolio Segment [Member] | Troubled Debt Restructurings [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		40,405		43,579			40,405		43,579
Commercial Portfolio Segment [Member]
Loans and Leases Receivable, Net of Deferred Income	[4]	1,034,530,786		827,637,263			1,034,530,786		827,637,263
Financing Receivable, Recorded Investment, Nonaccrual Status		1,567,813		4,187,786	[3]		1,567,813		4,187,786	[3]
Commercial Portfolio Segment [Member] | Troubled Debt Restructurings [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		258,598		48,501			258,598		48,501
Commercial Portfolio Segment [Member] | m2 Lease Funds, LLC [Member]
Loans and Leases Receivable, Net of Deferred Income		60,981,381		38,668,209			60,981,381		38,668,209
Commercial Real Estate Portfolio Segment [Member]
Loans and Leases Receivable, Net of Deferred Income		1,157,855,663		1,093,458,860			1,157,855,663		1,093,458,860
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans and Leases Receivable, Net of Deferred Income		168,992,704		165,149,491			168,992,704		165,149,491
Financing Receivable, Recorded Investment, Nonaccrual Status		4,344,742		4,353,819	[3]		4,344,742		4,353,819	[3]
Commercial Real Estate Portfolio Segment [Member] | Troubled Debt Restructurings [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		1,198,439		1,380,047			1,198,439		1,380,047
Commercial Real Estate Portfolio Segment [Member] | Troubled Debt Restructurings [Member] | Construction Loans [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		177,606					177,606
Finance Leases Portfolio Segment [Member]
Loans and Leases Receivable, Net of Deferred Income	[2],[5]	147,062,893		165,419,360			147,062,893		165,419,360
Financing Receivable, Recorded Investment, Nonaccrual Status		2,238,372		2,446,181	[3]		2,238,372		2,446,181	[3]
Finance Leases Portfolio Segment [Member] | Troubled Debt Restructurings [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		607,882		816,149			607,882		816,149
Consumer Portfolio Segment [Member]
Loans and Leases Receivable, Net of Deferred Income	[2]	89,605,855		81,665,695			89,605,855		81,665,695
Financing Receivable, Recorded Investment, Nonaccrual Status		237,488		87,344	[3]		237,488		87,344	[3]
Consumer Portfolio Segment [Member] | Troubled Debt Restructurings [Member]
Financing Receivable, Recorded Investment, Nonaccrual Status		$ 8,736		$ 12,203			$ 8,736		$ 12,203

[1] Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

[2] 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 TDRs.

[3] Nonaccrual loans/leases included $2,300,479 of TDRs, including $48,501 in C&I loans, $1,380,047 in CRE loans, $816,149 in direct financing leases, $43,579 in residential real estate loans, and $12,203 in installment loans.

[4] Includes loans outstanding at QCBT's wholly-owned subsidiary, m2, totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

[5] 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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

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Note 3 - Loans Leases Receivable - Composition of the Loan Lease Portfolio (Details) - USD ($)		Sep. 30, 2017		Jun. 30, 2017	Dec. 31, 2016		Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Loans		$ 2,669,013,113			$ 2,397,414,282
Plus deferred loan/lease origination costs, net of fees		7,741,698			8,072,703
Gross loans/leases receivable		2,676,754,811			2,405,486,985
Less allowance		(34,982,341)		$ (33,356,632)	(30,757,448)		$ (28,826,835)	$ (28,097,490)	$ (26,140,906)
Net loans/leases receivable		2,641,772,470			2,374,729,537
Commercial Portfolio Segment [Member]
Loans	[1]	1,034,530,786			827,637,263
Less allowance		(14,402,715)		(14,207,733)	(12,545,110)		(11,557,966)	(10,724,506)	(10,484,080)
Commercial Real Estate Portfolio Segment [Member]
Loans		1,157,855,663			1,093,458,860
Less allowance		(14,359,374)		(12,999,233)	(11,670,609)		(11,002,524)	(10,987,062)	(9,375,117)
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Loans		327,144,766			332,387,621
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans		168,992,704			165,149,491
Commercial Real Estate Portfolio Segment [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Loans		661,718,193			595,921,748
Finance Leases Portfolio Segment [Member]
Loans	[2],[3]	147,062,893			165,419,360
Plus deferred loan/lease origination costs, net of fees	[2]	4,800,719			5,881,778
Gross loans/leases receivable	[2]	151,863,612			171,301,138
Less allowance		(2,652,758)	[2]	(2,638,301)	(3,111,898)	[2]	(3,041,962)	(3,226,194)	(3,395,088)
Net loans/leases receivable	[2]	149,210,854			168,189,240
Net minimum lease payments to be received	[2]	162,728,461			184,274,802
Estimated unguaranteed residual values of leased assets	[2]	1,085,154			1,085,154
Unearned lease/residual income	[2]	(16,750,722)			(19,940,596)
Residential Portfolio Segment [Member]
Loans	[3],[4]	239,957,916			229,233,104
Less allowance		(2,398,978)		(2,430,454)	(2,342,344)		(2,055,654)	(2,014,987)	(1,790,150)
Consumer Portfolio Segment [Member]
Loans	[3]	89,605,855			81,665,695
Less allowance		$ (1,168,516)		$ (1,080,911)	$ (1,087,487)		$ (1,168,729)	$ (1,144,741)	$ (1,096,471)

[1] Includes loans outstanding at QCBT's wholly-owned subsidiary, m2, totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

[2] 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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

[3] 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 TDRs.

[4] Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

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Note 3 - Loans Leases Receivable - Changes in Accretable Yield (Details) - Community State Bank [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Balance	$ (5,409,331)		$ (9,309,920)
Accretion recognized	683,705	395,610	4,584,294	395,610
Discount added at acquisition		(12,193,588)		(12,193,588)
Balance	(4,725,626)	(11,797,978)	(4,725,626)	(11,797,978)
Performing Financial Instruments [Member]
Balance	(5,325,471)		(9,115,614)
Accretion recognized	658,547	366,293	4,448,690	366,293
Discount added at acquisition		(11,916,009)		(11,916,009)
Balance	(4,666,924)	(11,549,716)	(4,666,924)	(11,549,716)
Receivables Acquired with Deteriorated Credit Quality [Member]
Balance	(83,860)		(194,306)
Accretion recognized	25,158	29,317	135,604	29,317
Discount added at acquisition		(277,579)		(277,579)
Balance	$ (58,702)	$ (248,262)	$ (58,702)	$ (248,262)

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Note 3 - Loans Leases Receivable - Aging of the Loan Lease Portfolio (Details) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Current		$ 2,643,166,024	$ 2,378,270,983
Accruing Past Due 90 Days or More		422,880	966,814
Financing Receivable, Recorded Investment, Nonaccrual Status		20,443,137	13,919,066
Loans and Leases Receivable, Net of Deferred Income		$ 2,669,013,113	$ 2,397,414,282
Current as a percentage of total loan/lease portfolio		99.03%	99.20%
Accruing past due 90 days or more as a percentage of total loan/lease portfolio		0.02%	0.04%
Nonaccrual Loans/Leases as a percentage of total loan/lease portfolio		0.77%	0.58%
Loans and leases as a percentage of total loan/lease portfolio		100.00%	100.00%
Financing Receivables, 30 to 59 Days Past Due [Member]
Past Due		$ 3,332,998	$ 3,000,574
Past due as a percentage of total loan/lease portfolio		0.12%	0.13%
Financing Receivables, 60 to 89 Days Past Due [Member]
Past Due		$ 1,648,074	$ 1,256,845
Past due as a percentage of total loan/lease portfolio		0.06%	0.05%
Commercial Portfolio Segment [Member]
Current		$ 1,031,800,612	$ 821,637,507
Accruing Past Due 90 Days or More		12,892	346,234
Financing Receivable, Recorded Investment, Nonaccrual Status		1,567,813	4,187,786	[1]
Loans and Leases Receivable, Net of Deferred Income	[2]	1,034,530,786	827,637,263
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past Due		1,149,469	1,455,185
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past Due			10,551
Commercial Real Estate Portfolio Segment [Member]
Loans and Leases Receivable, Net of Deferred Income		1,157,855,663	1,093,458,860
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Current		326,879,997	331,812,571
Accruing Past Due 90 Days or More
Financing Receivable, Recorded Investment, Nonaccrual Status		155,020	332,148	[1]
Loans and Leases Receivable, Net of Deferred Income		327,144,766	332,387,621
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Current		164,647,962	160,760,034
Accruing Past Due 90 Days or More
Financing Receivable, Recorded Investment, Nonaccrual Status		4,344,742	4,353,819	[1]
Loans and Leases Receivable, Net of Deferred Income		168,992,704	165,149,491
Commercial Real Estate Portfolio Segment [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Current		650,410,884	594,384,926
Accruing Past Due 90 Days or More
Financing Receivable, Recorded Investment, Nonaccrual Status		10,981,845	1,436,149	[1]
Loans and Leases Receivable, Net of Deferred Income		661,718,193	595,921,748
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Past Due		109,749
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Construction Loans [Member]
Past Due			35,638
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Past Due		325,464	100,673
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Past Due			242,902
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Construction Loans [Member]
Past Due
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Past Due
Finance Leases Portfolio Segment [Member]
Current		142,413,187	161,452,627
Accruing Past Due 90 Days or More			215,225
Financing Receivable, Recorded Investment, Nonaccrual Status		2,238,372	2,446,181	[1]
Loans and Leases Receivable, Net of Deferred Income	[3],[4]	147,062,893	165,419,360
Finance Leases Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past Due		1,558,490	730,627
Finance Leases Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past Due		852,844	574,700
Residential Portfolio Segment [Member]
Current		237,860,369	227,023,552
Accruing Past Due 90 Days or More		307,676	294,854
Financing Receivable, Recorded Investment, Nonaccrual Status		917,857	1,075,639	[1]
Loans and Leases Receivable, Net of Deferred Income	[4],[5]	239,957,916	229,233,104
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past Due		116,095	473,478
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past Due		755,919	365,581
Consumer Portfolio Segment [Member]
Current		89,153,013	81,199,766
Accruing Past Due 90 Days or More		102,312	110,501
Financing Receivable, Recorded Investment, Nonaccrual Status		237,488	87,344	[1]
Loans and Leases Receivable, Net of Deferred Income	[4]	89,605,855	81,665,695
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past Due		73,731	204,973
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past Due		$ 39,311	$ 63,111

[1] Nonaccrual loans/leases included $2,300,479 of TDRs, including $48,501 in C&I loans, $1,380,047 in CRE loans, $816,149 in direct financing leases, $43,579 in residential real estate loans, and $12,203 in installment loans.

[2] Includes loans outstanding at QCBT's wholly-owned subsidiary, m2, totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

[3] 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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

[4] 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 TDRs.

[5] Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

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Note 3 - Loans Leases Receivable - Loans Leases Nonperforming Loans Leases (Details) - USD ($)		Sep. 30, 2017		Dec. 31, 2016
Accruing Past Due 90 Days or More		$ 422,880		$ 966,814
Nonaccrual Loans/Leases		20,443,137		13,919,066
Accruing TDRs		9,854,487		8,647,007
Loans		$ 2,669,013,113		$ 2,397,414,282
Percentage of Total NPLs		100.00%		100.00%
Nonperforming Financial Instruments [Member]
Accruing Past Due 90 Days or More		$ 422,880		$ 966,814
Nonaccrual Loans/Leases		20,443,137	[1]	13,919,066	[2]
Accruing TDRs		7,562,821		6,346,528
Loans		$ 28,428,838		$ 21,232,408
Percentage of Total NPLs		100.00%		100.00%
Commercial Portfolio Segment [Member]
Accruing Past Due 90 Days or More		$ 12,892		$ 346,234
Nonaccrual Loans/Leases		1,567,813		4,187,786	[2]
Loans	[3]	1,034,530,786		827,637,263
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Accruing Past Due 90 Days or More		12,892
Nonaccrual Loans/Leases	[1]	1,567,813
Accruing TDRs		5,298,358		4,733,997
Loans		$ 6,879,063		$ 9,268,017
Percentage of Total NPLs		24.19%		43.65%
Commercial Real Estate Portfolio Segment [Member]
Loans		$ 1,157,855,663		$ 1,093,458,860
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases		155,020		332,148	[2]
Loans		327,144,766		332,387,621
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases		4,344,742		4,353,819	[2]
Loans		168,992,704		165,149,491
Commercial Real Estate Portfolio Segment [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases		10,981,845		1,436,149	[2]
Loans		661,718,193		595,921,748
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases	[1]	155,020
Accruing TDRs
Loans		$ 155,020		$ 332,148
Percentage of Total NPLs		0.55%		1.56%
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Construction Loans [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases	[1]	4,344,742
Accruing TDRs
Loans		$ 4,344,742		$ 4,353,819
Percentage of Total NPLs		15.28%		20.51%
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases	[1]	10,981,845
Accruing TDRs
Loans		$ 10,981,845		$ 1,436,149
Percentage of Total NPLs		38.63%		6.77%
Finance Leases Portfolio Segment [Member]
Accruing Past Due 90 Days or More				$ 215,225
Nonaccrual Loans/Leases		2,238,372		2,446,181	[2]
Loans	[4],[5]	147,062,893		165,419,360
Finance Leases Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Accruing Past Due 90 Days or More
Nonaccrual Loans/Leases	[1]	2,238,372
Accruing TDRs		1,899,707		1,008,244
Loans	[5]	$ 4,138,079		$ 3,669,650
Percentage of Total NPLs		14.56%		17.28%
Residential Portfolio Segment [Member]
Accruing Past Due 90 Days or More		$ 307,676		$ 294,854
Nonaccrual Loans/Leases		917,857		1,075,639	[2]
Loans	[5],[6]	239,957,916		229,233,104
Residential Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Accruing Past Due 90 Days or More		307,676
Nonaccrual Loans/Leases	[1]	917,857
Accruing TDRs		349,538		585,541
Loans	[5]	$ 1,575,071		$ 1,956,034
Percentage of Total NPLs		5.54%		9.21%
Consumer Portfolio Segment [Member]
Accruing Past Due 90 Days or More		$ 102,312		$ 110,501
Nonaccrual Loans/Leases		237,488		87,344	[2]
Loans	[5]	89,605,855		81,665,695
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Accruing Past Due 90 Days or More		102,312
Nonaccrual Loans/Leases	[1]	237,488
Accruing TDRs		15,218		18,746
Loans	[5]	$ 355,018		$ 216,591
Percentage of Total NPLs		1.25%		1.02%

[1] Nonaccrual loans/leases included $2,291,666 of TDRs, including $258,598 in C&I loans, $1,198,439 in CRE loans, $607,882 in direct financing leases, $177,606 in construction loans, $40,405 in residential real estate loans, and $8,736 in installment loans.

[2] Nonaccrual loans/leases included $2,300,479 of TDRs, including $48,501 in C&I loans, $1,380,047 in CRE loans, $816,149 in direct financing leases, $43,579 in residential real estate loans, and $12,203 in installment loans.

[3] Includes loans outstanding at QCBT's wholly-owned subsidiary, m2, totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

[4] 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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

[5] 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 TDRs.

[6] Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

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Note 3 - Loans Leases Receivable - Allowance for Estimated Losses on Loans Leases (Details) - USD ($)		3 Months Ended			9 Months Ended
		Sep. 30, 2017		Sep. 30, 2016	Sep. 30, 2017		Sep. 30, 2016	Sep. 30, 2017		Dec. 31, 2016
Balance		$ 33,356,632		$ 28,097,490	$ 30,757,448		$ 26,140,906
Provision for loan/lease losses		2,086,436		1,607,986	6,214,538		4,878,821
Loans/leases charged off		(649,724)		(987,082)	(2,393,953)		(2,489,581)
Recoveries on loans/leases previously charged off		188,997		108,441	404,308		296,689
Balance		34,982,341		28,826,835	34,982,341		28,826,835
Allowance for impaired loans/leases								$ 4,375,091		$ 3,642,968
Allowance for nonimpaired loans/leases								30,607,250		27,114,480
		34,982,341		28,097,490	34,982,341		28,826,835	34,982,341		30,757,448
Impaired loans/leases								27,629,129		20,072,099
Nonimpaired loans/leases								2,641,383,984		2,377,342,183
								$ 2,669,013,113		$ 2,397,414,282
Allowance as a percentage of impaired loans/leases								15.84%		18.15%
Allowance as a percentage of nonimpaired loans/leases								1.16%		1.14%
Total allowance as a percentage of total loans/leases								1.31%		1.28%
Commercial Portfolio Segment [Member]
Balance		14,207,733		10,724,506	12,545,110		10,484,080
Provision for loan/lease losses		469,977		859,031	2,345,121		1,357,262
Loans/leases charged off		(338,361)		(96,330)	(630,704)		(388,879)
Recoveries on loans/leases previously charged off		63,366		70,759	143,188		105,503
Balance		14,402,715		11,557,966	14,402,715		11,557,966
Allowance for impaired loans/leases								$ 1,062,424		$ 1,771,537
Allowance for nonimpaired loans/leases								13,340,291		10,773,573
		14,207,733		10,724,506	14,402,715		11,557,966	14,402,715		12,545,110
Impaired loans/leases								6,567,909		8,936,451
Nonimpaired loans/leases								1,027,962,877		818,700,812
	[1]							$ 1,034,530,786		$ 827,637,263
Allowance as a percentage of impaired loans/leases								16.18%		19.82%
Allowance as a percentage of nonimpaired loans/leases								1.30%		1.32%
Total allowance as a percentage of total loans/leases								1.39%		1.52%
Commercial Real Estate Portfolio Segment [Member]
Balance		12,999,233		10,987,062	11,670,609		9,375,117
Provision for loan/lease losses		1,349,393		8,962	2,655,521		1,644,008
Loans/leases charged off					(10,375)		(23,101)
Recoveries on loans/leases previously charged off		10,748		6,500	43,619		6,500
Balance		14,359,374		11,002,524	14,359,374		11,002,524
Allowance for impaired loans/leases								$ 2,374,308		$ 693,919
Allowance for nonimpaired loans/leases								11,985,066		10,976,690
		12,999,233		10,987,062	14,359,374		11,002,524	14,359,374		11,670,609
Impaired loans/leases								15,588,929		6,112,114
Nonimpaired loans/leases								1,142,266,734		1,087,346,746
								$ 1,157,855,663		$ 1,093,458,860
Allowance as a percentage of impaired loans/leases								15.23%		11.35%
Allowance as a percentage of nonimpaired loans/leases								1.05%		1.01%
Total allowance as a percentage of total loans/leases								1.24%		1.07%
Finance Leases Portfolio Segment [Member]
Balance		2,638,301		3,226,194	3,111,898	[2]	3,395,088
Provision for loan/lease losses		179,190		641,435	981,877		1,580,677
Loans/leases charged off		(268,669)		(847,668)	(1,611,432)		(1,983,322)
Recoveries on loans/leases previously charged off		103,936		22,001	170,415		49,519
Balance		2,652,758	[2]	3,041,962	2,652,758	[2]	3,041,962
Allowance for impaired loans/leases								$ 652,775		$ 848,919
Allowance for nonimpaired loans/leases								1,999,983		2,262,979
		2,652,758	[2]	3,226,194	2,652,758	[2]	3,041,962	2,652,758	[2]	3,111,898	[2]
Impaired loans/leases								3,952,190		3,256,264
Nonimpaired loans/leases								143,110,703		162,163,096
	[2],[3]							$ 147,062,893		$ 165,419,360
Allowance as a percentage of impaired loans/leases								16.52%		26.07%
Allowance as a percentage of nonimpaired loans/leases								1.40%		1.40%
Total allowance as a percentage of total loans/leases								1.80%		1.88%
Residential Portfolio Segment [Member]
Balance		2,430,454		2,014,987	2,342,344		1,790,150
Provision for loan/lease losses		(11,654)		79,221	148,017		336,865
Loans/leases charged off		(25,822)		(38,554)	(101,006)		(72,261)
Recoveries on loans/leases previously charged off		6,000			9,623		900
Balance		2,398,978		2,055,654	2,398,978		2,055,654
Allowance for impaired loans/leases								$ 261,097		$ 289,112
Allowance for nonimpaired loans/leases								2,137,881		2,053,232
		2,430,454		2,014,987	2,398,978		2,055,654	2,398,978		2,342,344
Impaired loans/leases								1,328,160		1,661,180
Nonimpaired loans/leases								238,629,756		227,571,924
	[3],[4]							$ 239,957,916		$ 229,233,104
Allowance as a percentage of impaired loans/leases								19.66%		17.40%
Allowance as a percentage of nonimpaired loans/leases								0.90%		0.90%
Total allowance as a percentage of total loans/leases								1.00%		1.02%
Consumer Portfolio Segment [Member]
Balance		1,080,911		1,144,741	1,087,487		1,096,471
Provision for loan/lease losses		99,530		19,337	84,002		(39,991)
Loans/leases charged off		(16,872)		(4,530)	(40,436)		(22,018)
Recoveries on loans/leases previously charged off		4,947		9,181	37,463		134,267
Balance		1,168,516		1,168,729	1,168,516		1,168,729
Allowance for impaired loans/leases								$ 24,487		$ 39,481
Allowance for nonimpaired loans/leases								1,144,029		1,048,006
		$ 1,080,911		$ 1,144,741	$ 1,168,516		$ 1,168,729	1,168,516		1,087,487
Impaired loans/leases								191,941		106,090
Nonimpaired loans/leases								89,413,914		81,559,605
	[3]							$ 89,605,855		$ 81,665,695
Allowance as a percentage of impaired loans/leases								12.76%		37.21%
Allowance as a percentage of nonimpaired loans/leases								1.28%		1.28%
Total allowance as a percentage of total loans/leases								1.30%		1.33%

[1] Includes loans outstanding at QCBT's wholly-owned subsidiary, m2, totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

[2] 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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

[3] 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 TDRs.

[4] Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

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Note 3 - Loans Leases Receivable - Impaired Loans Leases (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Dec. 31, 2016
Recorded investment with no specific allowance recorded	$ 6,541,033		$ 6,541,033	$ 4,637,593
Unpaid principal balance with no specific allowance recorded	6,626,249		6,626,249	4,880,273
Average recorded investment with no specific allowance recorded	6,180,109	$ 8,225,766	5,786,680
Interest income recognized with no specific allowance recorded	72,358	25,337	148,114
Interest income recognized for cash payments received with no specific allowance recorded	72,358	25,337	148,114
Recorded investment with specific allowance recorded	21,088,096		21,088,096	15,434,506
Unpaid principal balance with specific allowance recorded	21,091,935		21,091,935	15,512,477
Related allowance	4,375,091		4,375,091	3,642,968
Average recorded investment with specific allowance recorded	16,080,213	6,637,401	13,312,775
Interest income recognized with specific allowance recorded	58,827	2,961	163,995
Interest income recognized for cash payments received with specific allowance recorded	58,827	2,961	163,995
Recorded investment	27,629,129		27,629,129	20,072,099
Unpaid principal balance	27,718,184		27,718,184	20,392,750
Average recorded investment	22,260,322	14,863,167	19,099,455
Interest income recognized	131,185	28,298	312,109
Interest income recognized for cash payments received	131,185	28,298	312,109
Interest income recognized with no specific allowance recorded	72,358	25,337	148,114
Interest income recognized for cash payments received with no specific allowance recorded	72,358	25,337	148,114
Commercial Portfolio Segment [Member]
Recorded investment with no specific allowance recorded	1,414,985		1,414,985	841,895
Unpaid principal balance with no specific allowance recorded	1,425,422		1,425,422	951,600
Average recorded investment with no specific allowance recorded	1,301,977	1,677,527	1,129,388
Interest income recognized with no specific allowance recorded	25,816	3,301	42,567
Interest income recognized for cash payments received with no specific allowance recorded	25,816	3,301	42,567
Recorded investment with specific allowance recorded	5,152,924		5,152,924	8,094,556
Unpaid principal balance with specific allowance recorded	5,156,763		5,156,763	8,098,395
Related allowance	1,062,424		1,062,424	1,771,537
Average recorded investment with specific allowance recorded	5,157,671	4,188,621	4,994,557
Interest income recognized with specific allowance recorded	53,127		150,848
Interest income recognized for cash payments received with specific allowance recorded	53,127		150,848
Recorded investment	6,567,909		6,567,909	8,936,451
Unpaid principal balance	6,582,185		6,582,185	9,049,995
Average recorded investment	6,459,648	5,866,148	6,123,945
Interest income recognized	78,943	3,301	193,415
Interest income recognized for cash payments received	78,943	3,301	193,415
Interest income recognized with no specific allowance recorded	25,816	3,301	42,567
Interest income recognized for cash payments received with no specific allowance recorded	25,816	3,301	42,567
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Recorded investment with no specific allowance recorded	107,322		107,322
Unpaid principal balance with no specific allowance recorded	107,322		107,322	93,774
Average recorded investment with no specific allowance recorded	53,661	767,032	26,831
Interest income recognized with no specific allowance recorded	6,783		6,783
Interest income recognized for cash payments received with no specific allowance recorded	6,783		6,783
Recorded investment with specific allowance recorded	155,020		155,020	322,148
Unpaid principal balance with specific allowance recorded	155,020		155,020	322,148
Related allowance	51,520		51,520	57,398
Average recorded investment with specific allowance recorded	155,020	363,911	238,584
Interest income recognized with specific allowance recorded
Interest income recognized for cash payments received with specific allowance recorded
Recorded investment	262,342		262,342	322,148
Unpaid principal balance	262,342		262,342	415,922
Average recorded investment	208,681	1,130,943	265,415
Interest income recognized	6,783		6,783
Interest income recognized for cash payments received	6,783		6,783
Interest income recognized with no specific allowance recorded	6,783		6,783
Interest income recognized for cash payments received with no specific allowance recorded	6,783		6,783
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Recorded investment with no specific allowance recorded
Unpaid principal balance with no specific allowance recorded
Average recorded investment with no specific allowance recorded
Interest income recognized with no specific allowance recorded
Interest income recognized for cash payments received with no specific allowance recorded
Recorded investment with specific allowance recorded	4,344,742		4,344,742	4,353,817
Unpaid principal balance with specific allowance recorded	4,344,742		4,344,742	4,353,817
Related allowance	818,536		818,536	577,611
Average recorded investment with specific allowance recorded	4,345,880	187,831	4,348,711
Interest income recognized with specific allowance recorded
Interest income recognized for cash payments received with specific allowance recorded
Recorded investment	4,344,742		4,344,742	4,353,817
Unpaid principal balance	4,344,742		4,344,742	4,353,817
Average recorded investment	4,345,880	187,831	4,348,711
Interest income recognized
Interest income recognized for cash payments received
Interest income recognized with no specific allowance recorded
Interest income recognized for cash payments received with no specific allowance recorded
Commercial Real Estate Portfolio Segment [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Recorded investment with no specific allowance recorded	1,198,439		1,198,439	1,196,549
Unpaid principal balance with no specific allowance recorded	1,198,439		1,198,439	1,196,549
Average recorded investment with no specific allowance recorded	1,173,629	1,969,034	1,178,032
Interest income recognized with no specific allowance recorded
Interest income recognized for cash payments received with no specific allowance recorded
Recorded investment with specific allowance recorded	9,783,406		9,783,406	239,600
Unpaid principal balance with specific allowance recorded	9,783,406		9,783,406	239,600
Related allowance	1,504,252		1,504,252	58,910
Average recorded investment with specific allowance recorded	4,929,960	135,141	2,464,981
Interest income recognized with specific allowance recorded
Interest income recognized for cash payments received with specific allowance recorded
Recorded investment	10,981,845		10,981,845	1,436,149
Unpaid principal balance	10,981,845		10,981,845	1,436,149
Average recorded investment	6,103,589	2,104,175	3,643,013
Interest income recognized
Interest income recognized for cash payments received
Interest income recognized with no specific allowance recorded
Interest income recognized for cash payments received with no specific allowance recorded
Finance Leases Portfolio Segment [Member]
Recorded investment with no specific allowance recorded	2,971,485		2,971,485	1,690,121
Unpaid principal balance with no specific allowance recorded	2,971,485		2,971,485	1,690,121
Average recorded investment with no specific allowance recorded	2,820,518	2,008,095	2,708,433
Interest income recognized with no specific allowance recorded	39,759	21,095	97,603
Interest income recognized for cash payments received with no specific allowance recorded	39,759	21,095	97,603
Recorded investment with specific allowance recorded	980,705		980,705	1,566,143
Unpaid principal balance with specific allowance recorded	980,705		980,705	1,566,143
Related allowance	652,775		652,775	848,919
Average recorded investment with specific allowance recorded	893,042	793,769	736,537
Interest income recognized with specific allowance recorded
Interest income recognized for cash payments received with specific allowance recorded
Recorded investment	3,952,190		3,952,190	3,256,264
Unpaid principal balance	3,952,190		3,952,190	3,256,264
Average recorded investment	3,713,560	2,801,864	3,444,970
Interest income recognized	39,759	21,095	97,603
Interest income recognized for cash payments received	39,759	21,095	97,603
Interest income recognized with no specific allowance recorded	39,759	21,095	97,603
Interest income recognized for cash payments received with no specific allowance recorded	39,759	21,095	97,603
Residential Portfolio Segment [Member]
Recorded investment with no specific allowance recorded	711,098		711,098	853,294
Unpaid principal balance with no specific allowance recorded	785,877		785,877	892,495
Average recorded investment with no specific allowance recorded	690,791	1,481,340	619,466
Interest income recognized with no specific allowance recorded		941	1,161
Interest income recognized for cash payments received with no specific allowance recorded		941	1,161
Recorded investment with specific allowance recorded	617,062		617,062	807,886
Unpaid principal balance with specific allowance recorded	617,062		617,062	882,018
Related allowance	261,097		261,097	289,112
Average recorded investment with specific allowance recorded	550,476	807,827	496,243
Interest income recognized with specific allowance recorded	5,601	1,503	12,830
Interest income recognized for cash payments received with specific allowance recorded	5,601	1,503	12,830
Recorded investment	1,328,160		1,328,160	1,661,180
Unpaid principal balance	1,402,939		1,402,939	1,774,513
Average recorded investment	1,241,267	2,289,167	1,115,709
Interest income recognized	5,601	2,444	13,991
Interest income recognized for cash payments received	5,601	2,444	13,991
Interest income recognized with no specific allowance recorded		941	1,161
Interest income recognized for cash payments received with no specific allowance recorded		941	1,161
Consumer Portfolio Segment [Member]
Recorded investment with no specific allowance recorded	137,704		137,704	55,734
Unpaid principal balance with no specific allowance recorded	137,704		137,704	55,734
Average recorded investment with no specific allowance recorded	139,533	322,738	124,530
Interest income recognized with no specific allowance recorded
Interest income recognized for cash payments received with no specific allowance recorded
Recorded investment with specific allowance recorded	54,237		54,237	50,356
Unpaid principal balance with specific allowance recorded	54,237		54,237	50,356
Related allowance	24,487		24,487	39,481
Average recorded investment with specific allowance recorded	48,164	160,301	33,162
Interest income recognized with specific allowance recorded	99	1,458	317
Interest income recognized for cash payments received with specific allowance recorded	99	1,458	317
Recorded investment	191,941		191,941	106,090
Unpaid principal balance	191,941		191,941	$ 106,090
Average recorded investment	187,697	483,039	157,692
Interest income recognized	99	1,458	317
Interest income recognized for cash payments received	99	1,458	317
Interest income recognized with no specific allowance recorded
Interest income recognized for cash payments received with no specific allowance recorded

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Note 3 - Loans Leases Receivable - Loans by Internally Assigned Risk Rating (Details) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Loans		$ 2,669,013,113	$ 2,397,414,282
Commercial Portfolio Segment [Member]
Loans	[1]	1,034,530,786	827,637,263
Commercial Portfolio Segment [Member] | Pass [Member]
Loans		1,000,751,792	796,568,451
Commercial Portfolio Segment [Member] | Special Mention [Member]
Loans		9,694,041	6,305,772
Commercial Portfolio Segment [Member] | Substandard [Member]
Loans		24,084,953	24,763,040
Commercial Portfolio Segment [Member] | Doubtful [Member]
Loans
Commercial Real Estate Portfolio Segment [Member]
Loans		1,157,855,663	1,093,458,860
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Loans		327,144,766	332,387,621
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans		168,992,704	165,149,491
Commercial Real Estate Portfolio Segment [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Loans		661,718,193	595,921,748
Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Loans		313,179,076	314,447,662
Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Construction Loans [Member]
Loans		161,772,865	158,108,465
Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Loans		639,045,018	582,854,048
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Loans		9,155,153	7,559,380
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Construction Loans [Member]
Loans		2,167,999	1,780,000
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Loans		6,297,895	4,437,122
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Loans		4,810,537	10,380,369
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Construction Loans [Member]
Loans		5,051,840	5,261,026
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Loans		16,375,280	8,630,578
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Owner Occupied Commercial Real Estate Loans [Member]
Loans			210
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Construction Loans [Member]
Loans
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Other Non-owner Occupied Commercial Real Estate Loans [Member]
Loans
Commercial and Commercial Real Estate Portfolio Segments [Member]
Loans		$ 2,192,386,449	$ 1,921,096,123
As a % of Total		100.00%	100.00%
Commercial and Commercial Real Estate Portfolio Segments [Member] | Pass [Member]
Loans		$ 2,114,748,751	$ 1,851,978,626
As a % of Total		96.45%	96.40%
Commercial and Commercial Real Estate Portfolio Segments [Member] | Special Mention [Member]
Loans		$ 27,315,088	$ 20,082,274
As a % of Total		1.25%	1.05%
Commercial and Commercial Real Estate Portfolio Segments [Member] | Substandard [Member]
Loans		$ 50,322,610	$ 49,035,013
As a % of Total		2.30%	2.55%
Commercial and Commercial Real Estate Portfolio Segments [Member] | Doubtful [Member]
Loans			$ 210
As a % of Total			0.00%

[1] Includes loans outstanding at QCBT's wholly-owned subsidiary, m2, totaling $60,981,381 and $38,668,209 as of September 30, 2017 and December 31, 2016, respectively.

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Note 3 - Loans Leases Receivable - Leases By Delinquency Status (Details) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Loans		$ 2,669,013,113	$ 2,397,414,282
Nonperforming Financial Instruments [Member]
Loans		28,428,838	21,232,408
Finance Leases Portfolio Segment [Member]
Loans	[1],[2]	147,062,893	165,419,360
Finance Leases Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans	[2]	142,924,814	161,749,710
Finance Leases Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans	[2]	4,138,079	3,669,650
Residential Portfolio Segment [Member]
Loans	[2],[3]	239,957,916	229,233,104
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans	[2]	238,382,845	227,277,070
Residential Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans	[2]	1,575,071	1,956,034
Consumer Portfolio Segment [Member]
Loans	[2]	89,605,855	81,665,695
Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans	[2]	89,250,837	81,449,104
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans	[2]	355,018	216,591
Lease Residential and Consumer Portfolio Segments [Member]
Loans	[2]	$ 476,626,664	$ 476,318,159
As a % of Total	[2]	100.00%	100.00%
Lease Residential and Consumer Portfolio Segments [Member] | Performing Financial Instruments [Member]
Loans	[2]	$ 470,558,496	$ 470,475,884
As a % of Total	[2]	98.73%	98.77%
Lease Residential and Consumer Portfolio Segments [Member] | Nonperforming Financial Instruments [Member]
Loans	[2]	$ 6,068,168	$ 5,842,275
As a % of Total	[2]	1.27%	1.23%

[1] 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, which is combined with 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 and nine months ended September 30, 2017 and 2016.

[2] 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 TDRs.

[3] Includes residential real estate loans held for sale totaling $290,320 and $1,135,500 as of September 30, 2017, and December 31, 2016, respectively.

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Note 3 - Loans Leases Receivable - Troubled Debt Restructurings (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Number of Loans / Leases	8	2	36	13
Pre-Modification Recorded Investment	$ 1,037,049	$ 461,643	$ 2,795,032	$ 2,530,491
Post-Modification Recorded Investment	1,037,049	461,643	2,795,032	2,530,491
Specific Allowance
Extended Maturity [Member]
Number of Loans / Leases	8	2	2	5
Pre-Modification Recorded Investment	$ 1,037,049	$ 461,643	$ 104,382	$ 462,939
Post-Modification Recorded Investment	1,037,049	461,643	104,382	462,939
Specific Allowance
Payment Deferral [Member]
Number of Loans / Leases			34	7
Pre-Modification Recorded Investment			$ 2,690,650	$ 833,812
Post-Modification Recorded Investment			2,690,650	833,812
Specific Allowance
Interest Rate Below Market Reduction [Member]
Number of Loans / Leases				1
Pre-Modification Recorded Investment				$ 1,233,740
Post-Modification Recorded Investment				1,233,740
Specific Allowance
Commercial Portfolio Segment [Member] | Extended Maturity [Member]
Number of Loans / Leases	4			1
Pre-Modification Recorded Investment	$ 620,452			$ 52,286
Post-Modification Recorded Investment	620,452			52,286
Specific Allowance
Commercial Portfolio Segment [Member] | Payment Deferral [Member]
Number of Loans / Leases			7	1
Pre-Modification Recorded Investment			$ 801,650	$ 62,140
Post-Modification Recorded Investment			801,650	62,140
Specific Allowance
Commercial Portfolio Segment [Member] | Interest Rate Below Market Reduction [Member]
Number of Loans / Leases				1
Pre-Modification Recorded Investment				$ 1,233,740
Post-Modification Recorded Investment				1,233,740
Specific Allowance
Finance Leases Portfolio Segment [Member] | Extended Maturity [Member]
Number of Loans / Leases	4	2	2	4
Pre-Modification Recorded Investment	$ 416,597	$ 461,643	$ 104,382	$ 410,653
Post-Modification Recorded Investment	416,597	461,643	104,382	410,653
Specific Allowance
Finance Leases Portfolio Segment [Member] | Payment Deferral [Member]
Number of Loans / Leases			27	6
Pre-Modification Recorded Investment			$ 1,889,000	$ 771,672
Post-Modification Recorded Investment			1,889,000	771,672
Specific Allowance

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Note 4 - Earnings Per Share - Basic and Diluted (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016
Net income	$ 7,853,935	$ 8,766,017	$ 9,184,965	$ 6,107,501	$ 6,676,467	$ 6,373,489	$ 25,804,917	$ 19,157,457
Basic EPS (in dollars per share)	$ 0.60			$ 0.47			$ 1.96	$ 1.55
Diluted EPS (in dollars per share)	$ 0.58			$ 0.46			$ 1.91	$ 1.52
Weighted average common shares outstanding (in shares)	13,151,350			13,066,777			13,151,672	12,398,491
Weighted average common shares issuable upon exercise of stock options and under the employee stock purchase plan (in shares)	356,605			202,926			357,894	181,551
Weighted average common and common equivalent shares outstanding (in shares)	13,507,955			13,269,703			13,509,566	12,580,042

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Note 5 - Fair Value - Assets Measured At Fair Value on a Recurring and Nonrecurring Basis (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Securities available for sale, fair value	$ 259,954,422	$ 251,113,139
Impaired loans or leases	23,722,953	18,788,073
Fair Value, Inputs, Level 1 [Member]
Impaired loans or leases
Fair Value, Inputs, Level 2 [Member]
Impaired loans or leases
Fair Value, Inputs, Level 3 [Member]
Impaired loans or leases	23,722,953	18,788,073
Fair Value, Measurements, Recurring [Member]
Assets Fair Value	262,947,951	254,027,947
Liabilities Fair Value	2,603,002	2,338,281
Fair Value, Measurements, Recurring [Member] | Interest Rate Cap [Member]
Derivative Assets	390,527	576,527
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member]
Derivative Assets	2,603,002	2,338,281
Derivative Liabilites	2,603,002	2,338,281
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Fair Value	1,017	1,361
Liabilities Fair Value
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Cap [Member]
Derivative Assets
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]
Derivative Assets
Derivative Liabilites
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Fair Value	262,946,934	254,026,586
Liabilities Fair Value	2,603,002	2,338,281
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Cap [Member]
Derivative Assets	390,527	576,527
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Derivative Assets	2,603,002	2,338,281
Derivative Liabilites	2,603,002	2,338,281
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Fair Value
Liabilities Fair Value
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Cap [Member]
Derivative Assets
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]
Derivative Assets
Derivative Liabilites
US Government Agencies Debt Securities [Member]
Securities available for sale, fair value	39,340,168	46,083,607
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale, fair value	39,340,168	46,083,607
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale, fair value
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale, fair value	39,340,168	46,083,607
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale, fair value
Residential Mortgage Backed Securities [Member]
Securities available for sale, fair value	158,968,509	147,702,127
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale, fair value	158,968,509	147,702,127
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale, fair value
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale, fair value	158,968,509	147,702,127
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale, fair value
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, fair value	56,763,060	52,604,426
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale, fair value	56,763,060	52,604,426
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale, fair value
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale, fair value	56,763,060	52,604,426
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale, fair value
Other Securities [Member]
Securities available for sale, fair value	4,882,685	4,722,979
Other Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale, fair value	4,882,685	4,722,979
Other Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale, fair value	1,017	1,361
Other Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale, fair value	4,881,668	4,721,618
Other Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale, fair value
Impaired Loans Leases [Member]
Impaired loans or leases	18,177,320	12,823,121
Impaired Loans Leases [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans or leases
Impaired Loans Leases [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans or leases
Impaired Loans Leases [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans or leases	18,177,320	12,823,121
Other Real Estate Owned [Member]
Impaired loans or leases	5,545,633	5,964,952
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans or leases
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans or leases
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans or leases	$ 5,545,633	$ 5,964,952

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Note 5 - Fair Value - Quantitative Information About Level 3 Fair Value Measurements (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Fair value	$ 23,722,953	$ 18,788,073
Impaired Loans Leases [Member]
Fair value	$ 18,177,320	12,823,121
Valuation technique	Appraisal of collateral
Impaired Loans Leases [Member] | Minimum [Member]
Appraisal adjustments	(10.00%)
Impaired Loans Leases [Member] | Maximum [Member]
Appraisal adjustments	50.00%
Other Securities [Member]
Fair value	$ 5,545,633	$ 5,964,952
Valuation technique	Appraisal of collateral
Other Securities [Member] | Minimum [Member]
Appraisal adjustments	0.00%
Other Securities [Member] | Maximum [Member]
Appraisal adjustments	35.00%

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Note 5 - Fair Value - Financial Assets and Liabilities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
HTM	$ 323,436,578	$ 320,414,899
AFS	259,954,422	251,113,139
Fair Value, Inputs, Level 1 [Member] | Reported Value Measurement [Member]
Cash and due from banks	56,274,561	70,569,993
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member]
Cash and due from banks	56,274,561	70,569,993
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member]
Federal funds sold	20,568,000	22,257,000
HTM	323,981,227	322,909,056
AFS	259,954,422	251,113,139
Loans/leases receivable, net	2,624,941,618	2,362,856,277
Short-term borrowings	16,010,805	39,971,387
FHLB advances	169,055,000	137,500,000
Other borrowings	77,500,000	80,000,000
Junior subordinated debentures	33,578,744	33,480,202
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Non-maturity Deposits [Member]
Deposits	2,365,493,644	2,188,683,349
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Time Deposits [Member]
Deposits	528,774,838	480,577,924
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Interest Rate Cap [Member]
Interest rate assets	390,527	576,527
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Interest Rate Swap [Member]
Interest rate assets	2,603,002	2,338,281
Interest rate swaps - liabilities	2,603,002	2,338,281
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | Interest-bearing Deposits [Member]
Interest-bearing deposits at financial institutions	41,221,383	63,948,925
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Federal funds sold	20,568,000	22,257,000
HTM	323,436,578	320,414,899
AFS	259,954,422	251,113,139
Loans/leases receivable, net	2,607,041,000	2,344,462,740
Short-term borrowings	16,010,805	39,971,387
FHLB advances	169,434,000	138,338,000
Other borrowings	78,428,000	81,282,000
Junior subordinated debentures	25,349,715	24,881,494
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Non-maturity Deposits [Member]
Deposits	2,365,493,644	2,188,683,349
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Time Deposits [Member]
Deposits	526,265,000	479,605,000
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Cap [Member]
Interest rate assets	390,527	576,527
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Swap [Member]
Interest rate assets	2,603,002	2,338,281
Interest rate swaps - liabilities	2,603,002	2,338,281
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Interest-bearing Deposits [Member]
Interest-bearing deposits at financial institutions	41,221,383	63,948,925
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member]
Loans/leases receivable, net	16,830,852	11,873,260
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Loans/leases receivable, net	$ 18,177,320	$ 12,823,121

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Note 6 - Business Segment Information (Details Textual)	Sep. 30, 2017
Number of Subsidiaries	4

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Note 6 - Business Segment Information - Selected Financial Information on the Company's Business Segments (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Total revenue	$ 40,542,168			$ 37,240,136			$ 118,406,807	$ 98,240,353
Net interest income	28,556,348			23,630,777			84,271,928	65,237,112
Provision for loan/lease losses	2,086,436			1,607,986			6,214,538	4,878,821
Net income (loss)	7,853,935	$ 8,766,017	$ 9,184,965	6,107,501	$ 6,676,467	$ 6,373,489	25,804,917	19,157,457
Goodwill	13,110,913			13,631,626			13,110,913	13,631,626	$ 13,110,913
Core deposit intangible	6,688,613			7,613,593			6,688,613	7,613,593	7,381,213
Total assets	3,550,463,094			3,280,986,109			3,550,463,094	3,280,986,109	$ 3,301,943,748
Operating Segments [Member] | Commercial Banking Segment [Member] | Quad City Bank and Trust Company [Member]
Total revenue	11,771,842			18,026,215			39,517,823	45,706,061
Net interest income	11,664,970			11,225,414			34,381,270	33,394,620
Provision for loan/lease losses	1,140,436			1,137,986			2,624,538	3,108,821
Net income (loss)	3,929,158			3,596,469			11,657,941	10,326,508
Goodwill	3,222,688			3,222,688			3,222,688	3,222,688
Core deposit intangible
Total assets	1,456,251,244			1,407,733,009			1,456,251,244	1,407,733,009
Operating Segments [Member] | Commercial Banking Segment [Member] | Cedar Rapids Bank and Trust [Member]
Total revenue	10,892,025			10,065,032			31,428,339	31,342,345
Net interest income	7,903,483			7,594,557			22,107,955	21,755,270
Provision for loan/lease losses	200,000						750,000	700,000
Net income (loss)	3,130,319			3,286,724			8,893,461	9,366,441
Goodwill
Core deposit intangible	1,122,263			1,321,775			1,122,263	1,321,775
Total assets	1,007,062,151			887,592,695			1,007,062,151	887,592,695
Operating Segments [Member] | Commercial Banking Segment [Member] | Community State Bank [Member]
Total revenue	7,678,006			2,675,741			23,981,019	2,675,741
Net interest income	6,379,111			2,191,862			20,326,439	2,191,862
Provision for loan/lease losses	574,000			270,000			2,209,000	270,000
Net income (loss)	1,669,209			188,608			5,484,383	188,608
Goodwill	9,888,225			10,408,938			9,888,225	10,408,938
Core deposit intangible	5,566,350			6,291,818			5,566,350	6,291,818
Total assets	631,963,143			580,210,270			631,963,143	580,210,270
Operating Segments [Member] | Commercial Banking Segment [Member] | Rockford Bank and Trust [Member]
Total revenue	4,534,768			4,232,205			12,723,998	11,945,081
Net interest income	3,245,346			3,056,989			9,308,932	8,914,380
Provision for loan/lease losses	172,000			200,000			631,000	800,000
Net income (loss)	726,926			944,781			2,406,337	2,334,735
Goodwill
Core deposit intangible
Total assets	445,098,530			393,191,774			445,098,530	393,191,774
Operating Segments [Member] | Wealth Management Segment [Member]
Total revenue	2,689,853			2,284,577			7,952,495	6,723,690
Net interest income
Provision for loan/lease losses
Net income (loss)	539,091			398,859			1,554,618	1,232,831
Goodwill
Core deposit intangible
Total assets
Operating Segments [Member] | Other Segments [Member]
Total revenue	10,028,660			8,463,636			30,086,617	23,567,906
Net interest income	(636,562)			(438,045)			(1,852,668)	(1,019,020)
Provision for loan/lease losses
Net income (loss)	7,853,935			6,107,492			25,804,917	19,157,447
Goodwill
Core deposit intangible
Total assets	395,697,820			368,990,749			395,697,820	368,990,749
Intersegment Eliminations [Member]
Total revenue	(7,052,986)			(8,507,270)			(27,283,484)	(23,720,471)
Net interest income
Provision for loan/lease losses
Net income (loss)	(9,994,703)			(8,415,432)			(29,996,740)	(23,449,113)
Goodwill
Core deposit intangible
Total assets	$ (385,609,794)			$ (356,732,388)			$ (385,609,794)	$ (356,732,388)

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Note 7 - Regulatory Capital Requirements (Details Textual)	9 Months Ended
	Sep. 30, 2017
Annual Phase in Percentage Of Capital Conservation Buffer	0.625%
Capital Required for Capital Adequacy to Risk Weighted Assets with Capital Conservation Buffer Fully Phased in	10.50%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets with Capital Conservation Buffer Fully Phased in	8.50%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets with Capital Conservation Buffer Fully Phased in	7.00%

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Note 7 - Regulatory Capital Requirements - Capital Requirements (Details) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Total risk-based capital, actual, amount		$ 356,559	$ 327,440
Total risk-based capital, actual, ratio		11.49%	11.56%
Total risk-based capital for capital adquacy purposes, amount, without capital conservation buffer		$ 248,360	$ 226,587
Total risk-based capital for capital adquacy purposes, ratio, without capital conservation buffer		8.00%	8.00%
Total risk-based capital for capital adquacy purposes, amount	[1]	$ 287,166	$ 244,289
Total risk-based capital for capital adquacy purposes, ratio	[1]	9.25%	8.625%
Total risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 310,450	$ 283,233
Total risk-based capital to be well capitalized under prompt corrective action provisions, ratio		10.00%	10.00%
Tier 1 risk-based capital, actual, amount		$ 321,213	$ 296,366
Tier 1 risk-based capital, actual, ratio		10.35%	10.46%
Tier 1 risk-based capital for capital adequacy purposes, amount, without capital conservation buffer		$ 186,270	$ 169,940
Tier 1 risk-based capital for capital adequacy purposes, ratio, without capital conservation buffer		6.00%	6.00%
Tier 1 risk-based capital for capital adequacy purposes, amount	[1]	$ 225,076	$ 187,642
Tier 1 risk-based capital for capital adequacy purposes, ratio	[1]	7.25%	6.625%
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 248,360	$ 226,587
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, ratio		8.00%	8.00%
Tier 1 leverage, actual, amount		$ 321,213	$ 296,366
Tier 1 leverage, actual, ratio		9.23%	9.10%
Tier 1 leverage for capital adequacy purposes, amount, without capital conservation buffer		$ 139,146	$ 130,229
Tier 1 leverage for capital adequacy purposes, ratio, without capital conservation buffer		4.00%	4.00%
Tier 1 leverage for capital adequacy purposes, amount	[1]	$ 139,146	$ 130,229
Tier 1 leverage for capital adequacy purposes, ratio	[1]	4.00%	4.00%
Tier 1 leverage to be well capitalized under prompt corrective action provisions, amount		$ 173,932	$ 162,787
Tier 1 leverage to be well capitalized under prompt corrective action provisions, ratio		5.00%	5.00%
Common equity Tier 1, actual, amount		$ 289,612	$ 266,419
Common equity Tier 1, actual ratio		9.33%	9.41%
Common equity Tier 1 for capital adequacy purposes, amount, without capital conservation buffer		$ 139,703	$ 127,455
Common equity Tier 1 for capital adequacy purposes, ratio, without capital conservation buffer		4.50%	4.50%
Common equity Tier 1 for capital adequacy purposes, amount	[1]	$ 178,509	$ 145,157
Common equity Tier 1 for capital adequacy purposes, ratio	[1]	5.75%	5.125%
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, amount		$ 201,793	$ 184,102
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, ratio		6.50%	6.50%
Quad City Bank and Trust Company [Member]
Total risk-based capital, actual, amount		$ 152,635	$ 142,990
Total risk-based capital, actual, ratio		12.25%	12.27%
Total risk-based capital for capital adquacy purposes, amount, without capital conservation buffer		$ 99,693	$ 93,212
Total risk-based capital for capital adquacy purposes, ratio, without capital conservation buffer		8.00%	8.00%
Total risk-based capital for capital adquacy purposes, amount	[1]	$ 115,270	$ 100,494
Total risk-based capital for capital adquacy purposes, ratio	[1]	9.25%	8.625%
Total risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 124,616	$ 116,515
Total risk-based capital to be well capitalized under prompt corrective action provisions, ratio		10.00%	10.00%
Tier 1 risk-based capital, actual, amount		$ 138,453	$ 129,524
Tier 1 risk-based capital, actual, ratio		11.11%	11.12%
Tier 1 risk-based capital for capital adequacy purposes, amount, without capital conservation buffer		$ 74,770	$ 69,909
Tier 1 risk-based capital for capital adequacy purposes, ratio, without capital conservation buffer		6.00%	6.00%
Tier 1 risk-based capital for capital adequacy purposes, amount	[1]	$ 90,347	$ 77,191
Tier 1 risk-based capital for capital adequacy purposes, ratio	[1]	7.25%	6.625%
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 99,693	$ 93,212
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, ratio		8.00%	8.00%
Tier 1 leverage, actual, amount		$ 138,453	$ 129,524
Tier 1 leverage, actual, ratio		9.40%	9.18%
Tier 1 leverage for capital adequacy purposes, amount, without capital conservation buffer		$ 58,913	$ 56,445
Tier 1 leverage for capital adequacy purposes, ratio, without capital conservation buffer		4.00%	4.00%
Tier 1 leverage for capital adequacy purposes, amount	[1]	$ 58,913	$ 56,445
Tier 1 leverage for capital adequacy purposes, ratio	[1]	4.00%	4.00%
Tier 1 leverage to be well capitalized under prompt corrective action provisions, amount		$ 73,642	$ 70,556
Tier 1 leverage to be well capitalized under prompt corrective action provisions, ratio		5.00%	5.00%
Common equity Tier 1, actual, amount		$ 138,453	$ 129,524
Common equity Tier 1, actual ratio		11.11%	11.12%
Common equity Tier 1 for capital adequacy purposes, amount, without capital conservation buffer		$ 56,077	$ 52,432
Common equity Tier 1 for capital adequacy purposes, ratio, without capital conservation buffer		4.50%	4.50%
Common equity Tier 1 for capital adequacy purposes, amount	[1]	$ 71,654	$ 59,714
Common equity Tier 1 for capital adequacy purposes, ratio	[1]	5.75%	5.125%
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, amount		$ 81,001	$ 75,735
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, ratio		6.50%	6.50%
Cedar Rapids Bank and Trust [Member]
Total risk-based capital, actual, amount		$ 114,234	$ 106,791
Total risk-based capital, actual, ratio		12.16%	12.82%
Total risk-based capital for capital adquacy purposes, amount, without capital conservation buffer		$ 75,150	$ 66,623
Total risk-based capital for capital adquacy purposes, ratio, without capital conservation buffer		8.00%	8.00%
Total risk-based capital for capital adquacy purposes, amount	[1]	$ 86,893	$ 71,828
Total risk-based capital for capital adquacy purposes, ratio	[1]	9.25%	8.625%
Total risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 93,938	$ 83,279
Total risk-based capital to be well capitalized under prompt corrective action provisions, ratio		10.00%	10.00%
Tier 1 risk-based capital, actual, amount		$ 102,545	$ 96,369
Tier 1 risk-based capital, actual, ratio		10.92%	11.57%
Tier 1 risk-based capital for capital adequacy purposes, amount, without capital conservation buffer		$ 56,363	$ 49,968
Tier 1 risk-based capital for capital adequacy purposes, ratio, without capital conservation buffer		6.00%	6.00%
Tier 1 risk-based capital for capital adequacy purposes, amount	[1]	$ 68,105	$ 55,173
Tier 1 risk-based capital for capital adequacy purposes, ratio	[1]	7.25%	6.625%
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 75,150	$ 66,623
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, ratio		8.00%	8.00%
Tier 1 leverage, actual, amount		$ 102,545	$ 96,369
Tier 1 leverage, actual, ratio		10.27%	10.69%
Tier 1 leverage for capital adequacy purposes, amount, without capital conservation buffer		$ 39,950	$ 36,061
Tier 1 leverage for capital adequacy purposes, ratio, without capital conservation buffer		4.00%	4.00%
Tier 1 leverage for capital adequacy purposes, amount	[1]	$ 39,950	$ 36,061
Tier 1 leverage for capital adequacy purposes, ratio	[1]	4.00%	4.00%
Tier 1 leverage to be well capitalized under prompt corrective action provisions, amount		$ 49,938	$ 45,076
Tier 1 leverage to be well capitalized under prompt corrective action provisions, ratio		5.00%	5.00%
Common equity Tier 1, actual, amount		$ 102,545	$ 96,369
Common equity Tier 1, actual ratio		10.92%	11.57%
Common equity Tier 1 for capital adequacy purposes, amount, without capital conservation buffer		$ 42,272	$ 37,476
Common equity Tier 1 for capital adequacy purposes, ratio, without capital conservation buffer		4.50%	4.50%
Common equity Tier 1 for capital adequacy purposes, amount	[1]	$ 54,014	$ 42,681
Common equity Tier 1 for capital adequacy purposes, ratio	[1]	5.75%	5.125%
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, amount		$ 61,060	$ 54,132
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, ratio		6.50%	6.50%
Community State Bank [Member]
Total risk-based capital, actual, amount		$ 67,071	$ 68,216
Total risk-based capital, actual, ratio		12.83%	13.81%
Total risk-based capital for capital adquacy purposes, amount, without capital conservation buffer		$ 41,837	$ 39,521
Total risk-based capital for capital adquacy purposes, ratio, without capital conservation buffer		8.00%	8.00%
Total risk-based capital for capital adquacy purposes, amount	[1]	$ 48,374	$ 42,609
Total risk-based capital for capital adquacy purposes, ratio	[1]	9.25%	8.625%
Total risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 52,296	$ 49,402
Total risk-based capital to be well capitalized under prompt corrective action provisions, ratio		10.00%	10.00%
Tier 1 risk-based capital, actual, amount		$ 63,356	$ 66,746
Tier 1 risk-based capital, actual, ratio		12.11%	13.51%
Tier 1 risk-based capital for capital adequacy purposes, amount, without capital conservation buffer		$ 31,378	$ 29,641
Tier 1 risk-based capital for capital adequacy purposes, ratio, without capital conservation buffer		6.00%	6.00%
Tier 1 risk-based capital for capital adequacy purposes, amount	[1]	$ 37,915	$ 32,729
Tier 1 risk-based capital for capital adequacy purposes, ratio	[1]	7.25%	6.625%
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 41,837	$ 39,522
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, ratio		8.00%	8.00%
Tier 1 leverage, actual, amount		$ 63,356	$ 66,746
Tier 1 leverage, actual, ratio		10.14%	11.75%
Tier 1 leverage for capital adequacy purposes, amount, without capital conservation buffer		$ 24,991	$ 22,726
Tier 1 leverage for capital adequacy purposes, ratio, without capital conservation buffer		4.00%	4.00%
Tier 1 leverage for capital adequacy purposes, amount	[1]	$ 24,991	$ 22,726
Tier 1 leverage for capital adequacy purposes, ratio	[1]	4.00%	4.00%
Tier 1 leverage to be well capitalized under prompt corrective action provisions, amount		$ 31,239	$ 28,408
Tier 1 leverage to be well capitalized under prompt corrective action provisions, ratio		5.00%	5.00%
Common equity Tier 1, actual, amount		$ 63,356	$ 66,746
Common equity Tier 1, actual ratio		12.11%	13.51%
Common equity Tier 1 for capital adequacy purposes, amount, without capital conservation buffer		$ 23,533	$ 22,231
Common equity Tier 1 for capital adequacy purposes, ratio, without capital conservation buffer		4.50%	4.50%
Common equity Tier 1 for capital adequacy purposes, amount	[1]	$ 30,070	$ 25,319
Common equity Tier 1 for capital adequacy purposes, ratio	[1]	5.75%	5.125%
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, amount		$ 33,992	$ 32,111
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, ratio		6.50%	6.50%
Rockford Bank and Trust [Member]
Total risk-based capital, actual, amount		$ 45,031	$ 42,007
Total risk-based capital, actual, ratio		11.48%	12.26%
Total risk-based capital for capital adquacy purposes, amount, without capital conservation buffer		$ 31,394	$ 27,410
Total risk-based capital for capital adquacy purposes, ratio, without capital conservation buffer		8.00%	8.00%
Total risk-based capital for capital adquacy purposes, amount	[1]	$ 36,299	$ 29,551
Total risk-based capital for capital adquacy purposes, ratio	[1]	9.25%	8.625%
Total risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 39,243	$ 34,262
Total risk-based capital to be well capitalized under prompt corrective action provisions, ratio		10.00%	10.00%
Tier 1 risk-based capital, actual, amount		$ 40,120	$ 37,716
Tier 1 risk-based capital, actual, ratio		10.22%	11.01%
Tier 1 risk-based capital for capital adequacy purposes, amount, without capital conservation buffer		$ 23,546	$ 20,558
Tier 1 risk-based capital for capital adequacy purposes, ratio, without capital conservation buffer		6.00%	6.00%
Tier 1 risk-based capital for capital adequacy purposes, amount	[1]	$ 28,451	$ 22,699
Tier 1 risk-based capital for capital adequacy purposes, ratio	[1]	7.25%	6.625%
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, amount		$ 31,394	$ 27,410
Tier 1 risk-based capital to be well capitalized under prompt corrective action provisions, ratio		8.00%	8.00%
Tier 1 leverage, actual, amount		$ 40,120	$ 37,716
Tier 1 leverage, actual, ratio		9.26%	9.57%
Tier 1 leverage for capital adequacy purposes, amount, without capital conservation buffer		$ 17,328	$ 15,772
Tier 1 leverage for capital adequacy purposes, ratio, without capital conservation buffer		4.00%	4.00%
Tier 1 leverage for capital adequacy purposes, amount	[1]	$ 17,328	$ 15,772
Tier 1 leverage for capital adequacy purposes, ratio	[1]	4.00%	4.00%
Tier 1 leverage to be well capitalized under prompt corrective action provisions, amount		$ 21,660	$ 19,716
Tier 1 leverage to be well capitalized under prompt corrective action provisions, ratio		5.00%	5.00%
Common equity Tier 1, actual, amount		$ 40,120	$ 37,716
Common equity Tier 1, actual ratio		10.22%	11.01%
Common equity Tier 1 for capital adequacy purposes, amount, without capital conservation buffer		$ 17,659	$ 15,418
Common equity Tier 1 for capital adequacy purposes, ratio, without capital conservation buffer		4.50%	4.50%
Common equity Tier 1 for capital adequacy purposes, amount	[1]	$ 22,564	$ 17,759
Common equity Tier 1 for capital adequacy purposes, ratio	[1]	5.75%	5.125%
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, amount		$ 25,508	$ 22,270
Common equity Tier 1 to be well capitalized under prompt corrective action provisions, ratio		6.50%	6.50%

[1] The minimums under Basel III increase by .625% (the capital conservation buffer) annually until 2019. The fully phased-in minimums are 10.5% (Total risk-based capital), 8.5% (Tier 1 risk-based capital), and 7.0% (Common equity Tier 1).

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Note 8 - Subsequent Event - Acquisition of Guaranty Bank and Trust Company (Details Textual) - USD ($)			3 Months Ended	9 Months Ended
	Oct. 02, 2017	Sep. 27, 2017	Mar. 31, 2018	Sep. 30, 2017	Sep. 30, 2016	Sep. 29, 2017	Dec. 31, 2016
Share Price						$ 45.50
Repayments of Long-term Debt				$ 9,500,000
Assets				3,550,463,094	$ 3,280,986,109		$ 3,301,943,748
Loans and Leases Receivable, Net Amount				2,641,772,470			2,374,729,537
Deposits				$ 2,894,268,482			$ 2,669,261,273
Term Note [Member]
Debt Instrument, Face Amount		$ 7,000,000
Debt Instrument, Term		4 years
Debt Instrument, Interest Rate, Effective Percentage				4.34%
Term Note [Member] | Scenario, Forecast [Member]
Repayments of Long-term Debt			$ 437,500
Term Note [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		3.00%
Subsequent Event [Member] | Guaranty Bank and Trust Company [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Acquisition, Equity Interest Issued or Issuable, Percentage of Aggregate Consideration	79.00%
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	678,670
Payments to Acquire Businesses, Gross, Percentage of Aggregate Consideration	21.00%
Payments to Acquire Businesses, Gross	$ 7,800,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	30,900,000
Business Combination, Consideration Transferred	38,700,000
Subsequent Event [Member] | Guaranty Bank and Trust Company [Member] | Minimum [Member] | Core Deposits [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	2,500,000
Subsequent Event [Member] | Guaranty Bank and Trust Company [Member] | Maximum [Member] | Core Deposits [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 4,500,000
Guaranty Bank and Trust Company [Member] | Subsequent Event [Member]
Number of Branches	5
Assets	$ 257,200,000
Loans and Leases Receivable, Net Amount	196,100,000
Deposits	$ 212,300,000