Note 20. Parent Company Only Financial Statements

The following is condensed financial information of QCR Holdings, Inc. (parent company only):

Condensed Balance Sheets
December 31, 2018 and 2017


	2018		2017
Assets
Cash and due from banks	$	6,606,126	$	4,325,582
Interest-bearing deposits at financial institutions		1,000,552		601
Securities available for sale, at fair value		—		1,690,726
Loans/leases receivable, held for investment		—		1,710,000
Investment in bank subsidiaries		532,163,635		410,105,525
Investment in nonbank subsidiaries		4,879,873		2,956,337
Premises and equipment, net		6,956,040		4,947,572
Goodwill		3,766,074		—
Intangibles		1,854,932		—
Other assets		14,794,944		11,630,304
Total assets	$	572,022,176	$	437,366,647

Liabilities and Stockholders' Equity
Liabilities:
Other borrowings	$	32,250,000	$	31,000,000
Junior subordinated debentures		37,670,043		37,486,487
Other liabilities		28,963,730		15,593,031
Total liabilities		98,883,773		84,079,518

Stockholders' Equity:
Common stock		15,718,208		13,918,168
Additional paid-in capital		270,760,511		189,077,550
Retained earnings		192,203,333		151,962,661
Accumulated other comprehensive loss		(5,543,649)		(1,671,250)
Total stockholders' equity		473,138,403		353,287,129
Total liabilities and stockholders' equity	$	572,022,176	$	437,366,647

Note 20. Parent Company Only Financial Statements (continued)

Condensed Statements of Income
Years Ended December 31, 2018, 2017, and 2016


	2018		2017		2016
Total interest income	$	87,532	$	12,802	$	74,489
Equity in net income of bank subsidiaries		55,209,382		45,103,593		33,467,712
Equity in net income of nonbank subsidiaries		(435,941)		75,344		32,674
Securities gains		—		6,312		37,596
Other		(322,119)		2,700		(2,933)
Total income		54,538,854		45,200,751		33,609,538

Interest expense		3,637,126		2,658,414		1,735,769
Salaries and employee benefits		6,597,881		5,021,998		4,607,887
Professional fees		1,871,655		1,344,721		949,442
Acquisition costs		1,654,323		1,068,918		1,400,004
Post-acquisition compensation, transition and integration costs		165,314		3,151,384		313,598
Gains on debt extinguishment		—		—		(1,200,000)
Other		1,026,016		1,134,139		988,057
Total expenses		14,952,315		14,379,574		8,794,757

Income before income tax benefit		39,586,539		30,821,177		24,814,781

Income tax benefit		3,533,160		4,885,330		2,872,006
Net income	$	43,119,699	$	35,706,507	$	27,686,787

Note 20. Parent Company Only Financial Statements (continued)

Condensed Statements of Cash Flows
Years Ended December 31, 2018, 2017, and 2016


	2018		2017		2016
Cash Flows from Operating Activities:
Net income	$	43,119,699	$	35,706,507	$	27,686,787
Adjustments to reconcile net income to net cash provided by operating activities:
Earnings of bank subsidiaries		(55,209,382)		(45,103,593)		(33,467,712)
Earnings (losses) of nonbank subsidiaries		435,941		(75,344)		(32,674)
Distributions from bank subsidiaries		34,500,000		21,000,000		26,000,000
Distributions from nonbank subsidiaries		63,270		38,734		32,860
Accretion of acquisition fair value adjustments		183,556		149,010		136,150
Depreciation		248,827		225,947		222,256
Stock-based compensation expense		1,443,346		1,187,036		947,174
Securities gains, net		—		(6,312)		(37,596)
Gains on debt extinguishment		—		—		(1,200,000)
Decrease (increase) in other assets		2,232,402		(968,808)		(2,346,253)
(Decrease) increase in other liabilities		(7,226,127)		(6,918,921)		5,105,251
Net cash provided by operating activities		19,791,532		5,234,256		23,046,243

Cash Flows from Investing Activities:
Net increase (decrease) in interest-bearing deposits at financial institutions		(999,951)		50		50
Activity in securities portfolio:
Purchases		—		—		(3,873,060)
Calls, maturities and redemptions		—		6,312		3,800,000
Sales		—		31,713		132,738
Capital infusion, bank subsidiaries		(3,500,000)		—		—
Net cash paid for acquisitions		(5,182,804)		(3,368,909)		(80,000,000)
Purchase of premises and equipment		(2,257,295)		(68,842)		(824,498)
Net cash (used in) investing activities		(11,940,050)		(3,399,676)		(80,764,770)

Cash Flows from Financing Activities:
Activity in other borrowings:
Proceeds from other borrowings		9,000,000		7,000,000		35,000,000
Calls, maturities and scheduled principal payments		(12,550,000)		(11,000,000)		—
Retirement of junior subordinated debentures		—		—		(3,955,000)
Payment of cash dividends on common and preferred stock		(3,300,091)		(2,494,260)		(1,981,541)
Proceeds from issuance of common stock, net		1,279,153		2,055,507		31,934,690
Net cash provided by (used in) financing activities		(5,570,938)		(4,438,753)		60,998,149

Net increase (decrease) in cash and due from banks		2,280,544		(2,604,173)		3,279,622

Cash and due from banks:
Beginning		4,325,582		6,929,755		3,650,133
Ending	$	6,606,126	$	4,325,582	$	6,929,755