10-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2008.

Commission file number: 0-22208

QCR HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation) 42-1397595
(I.R.S. Employer Identification No.)

3551 Seventh Street, Moline, Illinois 61265
(Address of principal executive offices)

(309) 736-3580
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Common stock, $1.00 Par Value The NASDAQ Capital Market

Securities registered pursuant to Section 12(g) of the Exchange Act:
Preferred Share Purchase Rights

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the last sales price quoted on The NASDAQ Capital Market on June 30, 2008, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $52,355,814.

As of February 27, 2009, the Registrant had outstanding 4,531,366 shares of common stock, $1.00 par value per share.

Documents incorporated by reference:
Part III of Form 10-K — Proxy statement for annual meeting of stockholders to be held in May 2009.

QCR HOLDINGS, INC. AND SUBSIDIARIES

INDEX

	Page
	Number
Part I
Item 1. Business		3-7
Item 1A. Risk Factors		8-13
Item 1B. Unresolved Staff Comments		13
Item 2. Properties		14
Item 3. Legal Proceedings		14
Item 4. Submission of Matters to a Vote of Security Holders		14
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		15-16
Item 6. Selected Financial Data		17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18-34
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		35
Item 8. Financial Statements		36-84
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		85
Item 9A. Controls and Procedures		85-87
Item 9B. Other Information		87
Part III
Item 10. Directors, Executive Officers and Corporate Governance		87
Item 11. Executive Compensation		87
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		87
Item 13. Certain Relationships and Related Transactions, and Director Independence		88
Item 14. Principal Accountant Fees and Services		88
Part IV
Item 15. Exhibits and Financial Statement Schedules		88-91
Signatures		92-93
Exhibit 3.1
Exhibit 10.19
Exhibit 10.20
Exhibit 10.21
Exhibit 10.22
Exhibit 10.23
Exhibit 10.24
Exhibit 10.25
Exhibit 10.26
Exhibit 10.27
Exhibit 10.28
Exhibit 10.29
Exhibit 10.30
Exhibit 10.31
Exhibit 10.32
Exhibit 21.1
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

Part I

Item 1. Business

General. QCR Holdings, Inc. (the “Company”) is a multi-bank holding company headquartered in Moline, Illinois that was formed in February 1993 under the laws of the state of Delaware. The Company serves the Quad City, Cedar Rapids, and Rockford communities through the following three wholly-owned banking subsidiaries, which provide full-service commercial and consumer banking and trust and asset management services:

• Quad City Bank and Trust Company (“Quad City Bank & Trust”), which is based in Bettendorf, Iowa and commenced operations in 1994;

• Cedar Rapids Bank and Trust Company (“Cedar Rapids Bank & Trust”), which is based in Cedar Rapids, Iowa and commenced operations in 2001; and

• Rockford Bank and Trust Company (“Rockford Bank & Trust”), which is based in Rockford, Illinois and commenced operations in 2005.

The Company also engages in cardholder credit card processing through its wholly-owned subsidiary, Quad City Bancard, Inc. (“Bancard”), based in Moline, Illinois, in direct financing lease contracts through its 80% equity investment in m2 Lease Funds, LLC (“m2 Lease Funds”), based in Brookfield, Wisconsin, and in real estate holdings through its 57% equity investment in Velie Plantation Holding Company, LLC (“Velie Plantation Holding Company”), based in Moline, Illinois.

During the year, Bancard sold its merchant credit card acquiring business. The resulting gain on sale, net of taxes and related expenses, was approximately $3.0 million. The current and comparative financial results associated with the merchant credit card acquiring business have been reflected as discontinued operations throughout the annual report.

On December 31, 2008, the Company sold its Milwaukee subsidiary, First Wisconsin Bank and Trust Company (“First Wisconsin Bank & Trust”), for $13.7 million which resulted in a pre-tax gain on sale of approximately $495,000. The current and comparative financial results associated with First Wisconsin Bank & Trust have been reflected as discontinued operations throughout the annual report.

Subsidiary Banks. Quad City Bank & Trust was capitalized on October 13, 1993 and commenced operations on January 7, 1994. Quad City Bank & Trust is an Iowa-chartered commercial bank that is a member of the Federal Reserve System with depository accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”) to the maximum amount permitted by law. Quad City Bank & Trust provides full service commercial and consumer banking and trust and asset management services in the Quad Cities and adjacent communities through its five offices that are located in Bettendorf and Davenport, Iowa and in Moline, Illinois. Quad City Bank & Trust had total segment assets of $908.6 million and $860.7 million as of December 31, 2008 and 2007, respectively. See Financial Statement Note 21 for additional business segment information.

Cedar Rapids Bank & Trust is an Iowa-chartered commercial bank that is a member of the Federal Reserve System with depository accounts insured by the FDIC to the maximum amount permitted by law. The Company commenced operations in Cedar Rapids in June 2001 operating as a branch of Quad City Bank & Trust. The Cedar Rapids branch operation then began functioning under the Cedar Rapids Bank & Trust charter in September 2001. Cedar Rapids Bank & Trust provides full-service commercial and consumer banking and trust and asset management services to Cedar Rapids, Iowa and adjacent communities through its two facilities. The headquarters for Cedar Rapids Bank & Trust is located in downtown Cedar Rapids, and its first branch location is located in northern Cedar Rapids. Cedar Rapids Bank & Trust had total segment assets of $468.3 million and $383.9 million as of December 31, 2008 and 2007, respectively. See Financial Statement Note 21 for additional business segment information.

3

Rockford Bank & Trust is an Illinois-chartered commercial bank that is a member of the Federal Reserve System with depository accounts insured by the FDIC to the maximum amount permitted by law. The Company commenced operations in Rockford, Illinois in September 2004 operating as a branch of Quad City Bank & Trust, and that operation began functioning under the Rockford Bank & Trust charter in January 2005. It provides full-service commercial and consumer banking and trust and asset management services to Rockford and adjacent communities through its original office located in downtown Rockford and its branch facility located on Guilford Road at Alpine Road in Rockford. Rockford Bank & Trust had total segment assets of $228.0 million and $157.8 million as of December 31, 2008 and 2007, respectively. See Financial Statement Note 21 for additional business segment information.

Operating Subsidiaries. Bancard was capitalized in April 1995 as a Delaware corporation that provided merchant and cardholder credit card processing services. Bancard currently provides credit card processing for cardholders of the Company’s three subsidiary banks and 128 agent banks.

On August 26, 2005, Quad City Bank & Trust acquired 80% of the membership units of m2 Lease Funds. John Engelbrecht, the President and Chief Executive Officer of m2 Lease Funds, retained 20% of the membership units. m2 Lease Funds, which is based in Brookfield, Wisconsin, is engaged in the business of leasing machinery and equipment to commercial and industrial businesses under direct financing lease contracts.

Since 1998, the Company had held a 20% equity investment in Velie Plantation Holding Company. In 2006, the Company acquired an additional 37% of the membership units bringing its total investment to 57% in aggregate. Velie Plantation Holding Company is engaged in holding the real estate property known as the Velie Plantation Mansion in Moline, Illinois.

On January 1, 2008, Quad City Bank & Trust acquired 100% of the membership units of CMG Investment Advisors, LLC, which is an investment management and advisory company.

Trust Preferred Subsidiaries. Following is a listing of the Company’s non-consolidated subsidiaries formed for the issuance of trust preferred securities, including pertinent information as of December 31, 2008 and 2007:

						Interest			Interest
						Rate as of			Rate as of
Name	Date Issued	Amount Issued		Interest Rate		12/31/08			12/31/07
QCR Holdings Statutory Trust II	February 2004	$	12,372,000	6.93%*			6.93	%		6.93	%
QCR Holdings Statutory Trust III	February 2004		8,248,000	2.85% over 3-month LIBOR			6.61	%		8.08	%
QCR Holdings Statutory Trust IV	May 2005		5,155,000	1.80% over 3-month LIBOR		6.62		%		7.04	%
QCR Holdings Statutory Trust V	February 2006		10,310,000		6.62%**		6.62	%		6.62	%

*	Rate is fixed until March 31, 2011, then becomes variable based on 3-month LIBOR plus 2.85%, reset quarterly.
**	Rate is fixed until April 7, 2011, then becomes variable based on 3-month LIBOR plus 1.55%, reset quarterly.

Securities issued by Trust II mature in thirty years, but are callable at par anytime after seven years from issuance. Securities issued by Trust III, Trust IV, and Trust V mature in thirty years, but are callable at par anytime after five years from issuance.

Other Ownership Interests. The Company invests limited amounts of its capital in stocks of financial institutions and mutual funds. In addition to its wholly-owned and majority-owned subsidiaries, the Company owns a 20% equity position in Nobel Real Estate Investors, LLC (“Nobel Real Estate”). In July 2007, the Company sold its 20% equity interest in Nobel Electronic Transfer, LLC (“Nobel”) to TriSource Solutions, LLC (“TriSource”) in exchange for $500 thousand in cash and a 2.25% equity interest in TriSource, which it continues to own. In June 2005, Cedar Rapids Bank & Trust entered into a joint venture as a 50% owner of Cedar Rapids Mortgage Company, LLC (“Cedar Rapids Mortgage Company”).

The Company and its subsidiaries collectively employed 345 full-time equivalents at December 31, 2008.

4

Business. The Company’s principal business consists of attracting deposits and investing those deposits in loans/leases and securities. The deposits of the subsidiary banks are insured to the maximum amount allowable by the FDIC. The Company’s results of operations are dependent primarily on net interest income, which is the difference between the interest earned on its loans/leases and securities and the interest paid on deposits and borrowings. The Company’s operating results are affected by economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities, as described more fully in this Form 10-K. Its operating results also can be affected by trust fees, deposit service charge fees, fees from the sale of residential real estate loans and other income. Operating expenses include employee compensation and benefits, occupancy and equipment expense, professional and data processing fees, advertising and marketing expenses, bank service charges, insurance, and other administrative expenses.

The Board of Governors of the Federal Reserve System (the “Federal Reserve”) is the primary federal regulator of the Company and its subsidiaries. In addition, Quad City Bank & Trust and Cedar Rapids Bank & Trust are regulated by the Iowa Superintendent of Banking (the “Iowa Superintendent”), and Rockford Bank & Trust is regulated by the State of Illinois Department of Financial and Professional Regulation (“the Illinois DFPR”). The FDIC, as administrator of the Deposit Insurance Fund, has regulatory authority over the subsidiary banks.

Lending/Leasing. The Company and its subsidiaries provide a broad range of commercial and retail lending and investment services to corporations, partnerships, individuals and government agencies. The subsidiary banks actively market their services to qualified lending customers. Lending officers actively solicit the business of new borrowers entering their market areas as well as long-standing members of the local business community. The subsidiary banks have established lending policies which include a number of underwriting factors to be considered in making a loan, including location, loan-to-value ratio, cash flow, collateral and the credit history of the borrower.

Quad City Bank & Trust’s current legal lending limit is approximately $11.7 million. As of December 31, 2008, commercial loans, including commercial real estate loans, made up approximately 83% of the loan portfolio, while residential mortgages comprised approximately 8%, and consumer loans comprised approximately 9%.

Cedar Rapids Bank & Trust’s current legal lending limit is approximately $5.6 million. As of December 31, 2008, commercial loans, including commercial real estate loans, made up approximately 87% of the loan portfolio, while residential mortgages comprised approximately 6% and consumer loans comprised approximately 7%.

Rockford Bank & Trust’s current legal lending limit is approximately $5.2 million. As of December 31, 2008, commercial loans, including commercial real estate loans, made up approximately 88% of the loan portfolio, while residential mortgages and consumer loans each comprised approximately 6%.

As part of the loan monitoring activity at the three subsidiary banks, credit administration personnel interact closely with senior bank management. The Company has also instituted a separate loan review function to analyze credits of the subsidiary banks. Management has attempted to identify problem loans at an early stage and to aggressively seek a resolution of these situations.

As noted above, the subsidiary banks are active commercial lenders. The current areas of emphasis include loans to wholesalers, manufacturers, building contractors, business services companies, other banks, and retailers. The banks provide a wide range of business loans, including lines of credit for working capital and operational purposes, and term loans for the acquisition of facilities, equipment and other purposes. Collateral for these loans generally includes accounts receivable, inventory, equipment and real estate. In addition, the subsidiary banks often take personal guarantees to help assure repayment. Loans may be made on an unsecured basis if warranted by the overall financial condition of the borrower. Terms of commercial business loans generally range from one to five years. Some of the subsidiary banks’ commercial business loans have floating interest rates or reprice within one year. The banks also make commercial real estate loans. Collateral for these loans generally includes the underlying real estate and improvements, and may include additional assets of the borrower.

5

The subsidiary banks sell the majority of their residential real estate loans in the secondary market. During the year ended December 31, 2008, the subsidiary banks originated $116.7 million of residential real estate loans and sold $87.9 million, or 75%, of these loans. During the year ended December 31, 2007, the subsidiary banks originated $135.0 million of residential real estate loans and sold $103.6 million, or 77%, of these loans. During the year ended December 31, 2006, the subsidiary banks originated $134.3 million of residential real estate loans and sold $84.2 million, or 63%, of these loans. Generally, the subsidiary banks’ residential mortgage loans conform to the underwriting requirements of Freddie Mac and Fannie Mae to allow the subsidiary banks to resell loans in the secondary market. The subsidiary banks structure most loans that will not conform to those underwriting requirements as adjustable rate mortgages that mature or adjust in one to five years, and then retain these loans in their portfolios. Servicing rights are not presently retained on the loans sold in the secondary market.

The consumer lending departments of each bank provide many types of consumer loans including motor vehicle, home improvement, home equity, signature loans and small personal credit lines.

m2 Lease Funds leases machinery and equipment to commercial and industrial customers under direct financing leases.

Competition. The Company currently operates in the highly competitive Quad City, Cedar Rapids, and Rockford markets. Competitors include not only other commercial banks, credit unions, thrift institutions, and mutual funds, but also, insurance companies, finance companies, brokerage firms, investment banking companies, and a variety of other financial services and advisory companies. Many of these competitors are not subject to the same regulatory restrictions as the Company. Many of these unregulated competitors compete across geographic boundaries and provide customers increasing access to meaningful alternatives to banking services. The Company competes in markets with a number of much larger financial institutions with substantially greater resources and larger lending limits. Additionally, if the trend toward reducing restrictions on the interstate operations of financial institutions continues, we will continue to experience increased competition as a result.

Recent Industry Developments. Recent events in the U.S. and global financial markets, including the deterioration of the worldwide credit markets, have created significant challenges for financial institutions throughout the country. Dramatic declines in the housing market during the past year, marked by falling home prices and increasing levels of mortgage foreclosures, have resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks. In addition, many lenders and institutional investors have reduced, and in some cases, ceased to provide funding to borrowers, including other financial institutions, as a result of concern about the stability of the financial markets and the strength of counterparties.

In response to the crises affecting the U.S. banking system and financial markets and to bolster the distressed economy and improve consumer confidence in the financial system, on October 3, 2008, the U.S. Congress passed, and the President signed into law, the Emergency Economic Stabilization Act of 2008 (the “EESA”). The EESA authorizes the Secretary of the United States Department of Treasury (“Treasury”) to implement various temporary emergency programs designed to strengthen the capital positions of financial institutions and stimulate the availability of credit within the U.S. financial system. Financial institutions participating in certain of the programs established under the EESA will be required to adopt Treasury’s standards for executive compensation, as they are modified and amended from time to time by Congress, and corporate governance.

On October 14, 2008, Treasury announced that it will provide Tier 1 capital (in the form of perpetual preferred stock) to eligible financial institutions. This program, known as the TARP Capital Purchase Program (the “CPP”), allocates $250 billion from the $700 billion authorized by the EESA to Treasury for the purchase of senior preferred shares from qualifying financial institutions (the “CPP Preferred Stock”). Under the program, eligible institutions are able to sell equity interests to the Treasury in amounts equal to between 1% and 3% of the institution’s risk-weighted assets. The CPP Preferred Stock will generally be non-voting and will pay dividends at a rate of 5% per annum for the first five years and thereafter at a rate of 9% per annum. In conjunction with the purchase of the CPP Preferred Stock, the Treasury will receive warrants to purchase common stock from the participating public institutions with an aggregate market price equal to 15% of the preferred stock investment. Participating financial institutions will be required to adopt Treasury’s standards for executive compensation and corporate governance for the period during which Treasury holds equity issued under the CPP.

6

Pursuant to the CPP, on February 13, 2009, the Company entered into a Letter Agreement with Treasury, pursuant to which the Company issued: (i) 38,237 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series D, and (ii) a warrant to purchase 521,888 shares of the Company’s common stock for an aggregate purchase price of $38.237 million in cash. The Company expects that its federal regulators and the Treasury will maintain significant oversight over the Company, as a participating institution, to evaluate how it uses the capital provided and to ensure that it strengthens its efforts to help its borrowers avoid foreclosure, which is one of the core aspects of the EESA.

As another component of the EESA, Treasury has authorized the FDIC to provide a 100% guarantee of the following: (i) newly-issued senior unsecured debt and (ii) non-interest bearing transactional deposit accounts maintained at FDIC-insured institutions. This program is known as the Temporary Liquidity Guarantee Program (the “TLGP”), with the guarantee of senior unsecured debt referred to as the Debt Guarantee Program (the “DGP”) and the guarantee of non-interest bearing transactional accounts referred to as the Transaction Account Guarantee Program (the “TAGP”). FDIC insured institutions and their holding companies were required to opt in or out of each of the DGP and the TAGP by December 5, 2008. All insured depository institutions automatically participated in the Temporary Liquidity Guarantee Program for 30 days following the announcement of the program without charge (subsequently extended to December 5, 2008) and thereafter, unless an institution opted out, at a cost of 75 basis points per annum for senior unsecured debt and 10 basis points per annum for noninterest-bearing transaction deposits. The Company opted to continue its participation in both the DGP and the TAGP.

On February 17, 2009, President Obama signed into law, The American Recovery and Reinvestment Act of 2009 (the “ARRA”), which is more commonly known as the economic stimulus or economic recovery package. The ARRA includes a wide variety of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health and education needs. In addition, the ARRA imposes new executive compensation and corporate governance limits on current and future participants in the CPP, which are in addition to those previously announced by Treasury. The new limits remain in place until the participant has redeemed the CPP Preferred Stock sold to Treasury, which is now permitted under the ARRA without penalty and without the need to raise new capital, subject to Treasury’s consultation with the recipient’s appropriate federal regulator.

It is not clear at this time what impact the EESA, the CPP, the TLGP, or other liquidity and funding initiatives will have on the financial markets and the other difficulties described above, including the high levels of volatility and limited credit availability currently being experienced, or on the U.S. banking and financial industries and the broader U.S. global economies.

Appendices. The commercial banking business is a highly regulated business. See Appendix A for a summary of the federal and state statutes and regulations that are applicable to the Company and its subsidiaries. Supervision, regulation and examination of banks and bank holding companies by bank regulatory agencies are intended primarily for the protection of depositors rather than stockholders of bank holding companies and banks.

See Appendix B for tables and schedules that show selected comparative statistical information relating to the business of the Company required to be presented pursuant to the securities laws, Consistent with the information presented in Form 10-K, results are presented for the fiscal years ended December 31, 2008, 2007, 2006, 2005 and 2004 and have been reclassified, as appropriate, for discontinued operations comparative purposes.

Internet Site, Securities Filings and Governance Documents. The Company maintains Internet sites for itself and its three banking subsidiaries. The Company makes available free of charge through these sites its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act after it electronically files such material with, or furnishes it to, the Securities and Exchange Commission. Also available are many of our corporate governance documents, including our Code of Conduct and Ethics Policy. The sites are www.qcrh.com, www.qcbt.com, www.crbt.com, and www.rkfdbank.com.

7

Item 1A. Risk Factors

In addition to the other information in this Annual Report on Form 10-K, stockholders or prospective investors should carefully consider the following risk factors:

Our business may be adversely affected by conditions in the financial markets and economic conditions generally.

The United States has been in a recession since December, 2007. Business activity across a wide range of industries and regions is greatly reduced, and many businesses and local governments are experiencing serious difficulty in remaining profitable due to the lack of consumer spending and the lack of liquidity in the credit markets. Unemployment has increased significantly. Since mid-2007, and particularly during the second half of 2008, the financial services industry and the securities markets generally were materially and adversely affected by significant declines in the values of nearly all asset classes and by a serious lack of liquidity.

As a result of this economic downturn, many lending institutions, including us, have experienced declines in the performance of their loans, including commercial loans, commercial real estate loans and consumer loans. Moreover, competition among depository institutions for deposits and quality loans has increased significantly. In addition, the values of real estate collateral supporting many commercial loans and home mortgages have declined and may continue to decline. Bank and bank holding company stock prices have been negatively affected, and the ability of banks and bank holding companies to raise capital or borrow in the debt markets has become more difficult compared to recent years. There is also the potential for new federal or state laws and regulations regarding lending and funding practices and liquidity standards, and bank regulatory agencies are expected to be very aggressive in responding to concerns and trends identified in examinations, including the expected issuance of many formal or informal enforcement actions or orders. The impact of new legislation in response to those developments, may negatively impact our operations by restricting our business operations, including our ability to originate or sell loans, and adversely impact our financial performance or our stock price.

In addition, further negative market developments may affect consumer confidence levels and may cause adverse changes in payment patterns, causing increases in delinquencies and default rates, which may impact our charge-offs and provision for credit losses. A worsening of these conditions would likely exacerbate the adverse effects of these difficult market conditions on us and others in the financial services industry.

Overall, during the past year, the general business environment has had an adverse effect on our business, and there can be no assurance that the environment will improve in the near term. Until conditions improve, we expect our business, financial condition and results of operations to be adversely affected.

Our business is concentrated in and dependent upon the continued growth and welfare of the Quad City, Cedar Rapids, and Rockford markets.

We operate primarily in the Quad City, Cedar Rapids, and Rockford markets, and as a result, our financial condition, results of operations and cash flows are subject to changes in the economic conditions in those areas. We have developed a particularly strong presence in Bettendorf, Cedar Rapids and Davenport, Iowa and Moline and Rockford, Illinois and their surrounding communities. Our success depends upon the business activity, population, income levels, deposits and real estate activity in these markets. Although our customers’ business and financial interests may extend well beyond these market areas, adverse economic conditions that affect these market areas could reduce our growth rate, affect the ability of our customers to repay their loans to us and generally affect our financial condition and results of operations. Because of our geographic concentration, we are less able than other regional or national financial institutions to diversify our credit risks across multiple markets.

8

We face intense competition in all phases of our business from other banks and financial institutions.

The banking and financial services businesses in our markets are highly competitive. Our competitors include large regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market mutual funds, credit unions and other non-bank financial services providers. Many of these competitors are not subject to the same regulatory restrictions as we are. Many of our unregulated competitors compete across geographic boundaries and are able to provide customers with a feasible alternative to traditional banking services. Additionally, if the regulatory trend toward reducing restrictions on the interstate operations of financial institutions continues, we will continue to experience increased competition as a result.

Increased competition in our markets may result in a decrease in the amounts of our loans and deposits, reduced spreads between loan rates and deposit rates or loan terms that are more favorable to the borrower. Any of these results could have a material adverse effect on our ability to grow and remain profitable. If increased competition causes us to significantly discount the interest rates we offer on loans or increase the amount we pay on deposits, our net interest income could be adversely impacted. If increased competition causes us to modify our underwriting standards, we could be exposed to higher losses from lending activities. Additionally, many of our competitors are much larger in total assets and capitalization, have greater access to capital markets, have larger lending limits and offer a broader range of financial services than we can offer.

Our community banking strategy relies heavily on our subsidiaries’ independent management teams, and the unexpected loss of key managers may adversely affect our operations.

We rely heavily on the success of our bank subsidiaries’ independent management teams. Accordingly, much of our success to date has been influenced strongly by our ability to attract and to retain senior management experienced in banking and financial services and familiar with the communities in our market areas. Our ability to retain the executive officers, current management teams, branch managers and loan officers of our operating subsidiaries will continue to be important to the successful implementation of our strategy. It is also critical, as we grow, to be able to attract and retain qualified additional management and loan officers with the appropriate level of experience and knowledge about our market areas to implement our community-based operating strategy. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations.

Our continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. We anticipate that our existing capital resources, including the $38.24 million we received from Treasury under the Capital Purchase Program, will satisfy our capital requirements for the foreseeable future. However, we may at some point need to raise additional capital to support our continued growth. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside our control, and on our financial performance. Accordingly, we cannot assure you of our ability to raise additional capital, if needed, on terms acceptable to us. If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth, branching, de novo bank formations and/or acquisitions could be materially impaired.

We may experience difficulties in managing our growth, and our growth strategy involves risks that may negatively impact our net income.

While we have no current plans, we may expand into additional communities or attempt to strengthen our position in our current markets by undertaking additional de novo bank formations or branch openings. Based on our experience, we believe that it generally takes several years for new banking facilities to achieve overall profitability, due to the impact of organizational and overhead expenses and the start-up phase of generating loans and deposits. If we undertake additional de novo bank formations and branch openings, we are likely to continue to experience the effects of higher operating expenses relative to operating income from the new operations, which may have an adverse effect on our levels of reported net income, return on average equity and return on average assets. Other effects of engaging in such growth strategies may include potential diversion of our management’s time and attention and general disruption to our business.

9

In addition to de novo bank formations and branching, we may acquire banks and related businesses that we believe provide a strategic fit with our business. To the extent that we grow through acquisitions, we cannot assure you that we will be able to adequately and profitably manage this growth. Acquiring other banks and businesses will involve similar risks to those commonly associated with de novo bank formations and branching but may also involve additional risks, including:

• potential exposure to unknown or contingent liabilities of banks and businesses we acquire;

• exposure to potential asset quality issues of the acquired bank or related business;

• difficulty and expense of integrating the operations and personnel of banks and businesses we acquire; and

• the possible loss of key employees and customers of the banks and businesses we acquire.

Interest rates and other conditions impact our results of operations.

Our profitability is in large part a function of the spread between the interest rates earned on investments and loans/leases and the interest rates paid on deposits and other interest-bearing liabilities. Like most banking institutions, our net interest spread and margin will be affected by general economic conditions and other factors, including fiscal and monetary policies of the federal government, that influence market interest rates and our ability to respond to changes in such rates. At any given time, our assets and liabilities will be such that they are affected differently by a given change in interest rates. As a result, an increase or decrease in rates, the length of loan/lease terms or the mix of adjustable and fixed rate loans/leases in our portfolio could have a positive or negative effect on our net income, capital and liquidity. We measure interest rate risk under various rate scenarios and using specific criteria and assumptions. A summary of this process, along with the results of our net interest income simulations is presented at “Quantitative and Qualitative Disclosures about Market Risk” included under Item 7A of Part II of this Form 10-K. Although we believe our current level of interest rate sensitivity is reasonable and effectively managed, significant fluctuations in interest rates may have an adverse effect on our business, financial condition and results of operations.

We must effectively manage our credit risk.

There are risks inherent in making any loan, including risks inherent in dealing with individual borrowers, risks of nonpayment, risks resulting from uncertainties as to the future value of collateral and risks resulting from changes in economic and industry conditions. We attempt to minimize our credit risk through prudent loan application approval procedures, careful monitoring of the concentration of our loans within specific industries and periodic independent reviews of outstanding loans by our credit review department. However, we cannot assure you that such approval and monitoring procedures will reduce these credit risks.

The majority of our subsidiary banks’ loan/lease portfolios are invested in commercial loans/leases, and we focus on lending to small to medium-sized businesses. The size of the loans/leases we can offer to commercial customers is less than the size of the loans/leases that our competitors with larger lending limits can offer. This may limit our ability to establish relationships with the area’s largest businesses. As a result, we may assume greater lending risks than financial institutions that have a lesser concentration of such loans/leases and tend to make loans/leases to larger businesses. Collateral for these loans/leases generally includes accounts receivable, inventory, equipment and real estate. However, depending on the overall financial condition of the borrower, some loans are made on an unsecured basis. In addition to commercial loans/leases and commercial real estate loans, our subsidiary banks are also active in residential mortgage and consumer lending. Should the economic climate worsen, our borrowers may experience financial difficulties, and the level of non-performing loans, charge-offs and delinquencies could rise, which could negatively impact our business.

Commercial and industrial loans/leases make up a large portion of our loan/lease portfolio.

Commercial and industrial loans/leases were $436.7 million, or approximately 36% of our total loan/lease portfolio, as of December 31, 2008. Our commercial loans/leases are primarily made based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral is accounts receivable, inventory and equipment. Credit support provided by the borrower for most of these loans/leases and the probability of repayment is based on the liquidation value of the pledged collateral and enforcement of a personal guarantee, if any exists. As a result, in the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. The collateral securing these loans/leases may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. In addition, a continued decline in the United States economy could harm or continue to harm the businesses of our commercial and industrial customers and reduce the value of the collateral securing these loans/leases.

10

Our loan/lease portfolio has a significant concentration of commercial real estate loans, which involve risks specific to real estate value.

Commercial real estate lending comprises a significant portion of our lending business. Specifically, commercial real estate loans were $529.1 million, or approximately 44% of our total loan/lease portfolio, as of December 31, 2008. Of this amount, $206.4 million, or approximately 39%, is owner-occupied. The market value of real estate securing our commercial real estate loans can fluctuate significantly in a short period of time as a result of market conditions in the geographic area in which the real estate is located. Although a significant portion of such loans are secured by real estate as a secondary form of collateral, adverse developments affecting real estate values in one or more of our markets could increase the credit risk associated with our loan portfolio. Additionally, real estate lending typically involves higher loan principal amounts and the repayment of the loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic events or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties.

If the problems that have occurred in residential real estate and mortgage markets throughout much of the United States were to spread to the commercial real estate market, particularly within one or more of our markets, the value of collateral securing our commercial real estate loans could decline. In such case, we may not be able to realize the amount of security that we anticipated at the time of originating the loan, which could cause us to increase our provision for loan losses and adversely affect our operating results, financial condition and/or capital. We generally have not experienced a downturn in credit performance by our commercial real estate loan customers, but in light of the uncertainty that exists in the economy and credit markets nationally, there can be no guarantee that we will not experience any deterioration in such performance.

Our allowance for loan/lease losses may prove to be insufficient to absorb potential losses in our loan/lease portfolio.

We established our allowance for loan/lease losses in consultation with management of our subsidiaries and maintain it at a level considered adequate by management to absorb loan/lease losses that are inherent in the portfolio. The amount of future loan/lease losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates, which may be beyond our control, and such losses may exceed current estimates. At December 31, 2008, our allowance for loan/lease losses as a percentage of total gross loans/leases was 1.47% and as a percentage of total non-performing loans/leases was approximately 89%. Although management believes that the allowance for loan/lease losses is adequate to absorb losses on any existing loans/leases that may become uncollectible, we cannot predict loan/lease losses with certainty, and we cannot assure you that our allowance for loan/lease losses will prove sufficient to cover actual loan/lease losses in the future. Loan/lease losses in excess of our reserves may adversely affect our business, financial condition and results of operations.

11

We have a continuing need for technological change, and we may not have the resources to effectively implement new technology.

The financial services industry continues to undergo rapid technological changes with frequent introductions of new technology-driven products and services. In addition to enabling us to better serve our customers, the effective use of technology increases efficiency and the potential for cost reduction. Our future success will depend in part upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow our market share. Many of our larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products to those that we will be able to offer, which would put us at a competitive disadvantage. Accordingly, we cannot provide you with assurance that we will be able to effectively implement new technology-driven products and services or be successful in marketing such products and services to our customers.

System failure or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities.

The computer systems and network infrastructure we use could be vulnerable to unforeseen problems. Our operations are dependent upon our ability to protect our computer equipment against damage from physical theft, fire, power loss, telecommunications failure or a similar catastrophic event, as well as from security breaches, denial of service attacks, viruses, worms and other disruptive problems caused by hackers. Any damage or failure that causes an interruption in our operations could have a material adverse effect on our financial condition and results of operations. Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us. Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage, there can be no assurance that these security measures will be successful. In addition, advances in computer capabilities, new discoveries in the field of cryptography or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protect customer transaction data. A failure of such security measures could have a material adverse effect on our financial condition and results of operations.

We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors.

Employee errors and employee and customer misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence.

We maintain a system of internal controls and insurance coverage to mitigate against operational risks, including data processing system failures and errors and customer or employee fraud. Should our internal controls fail to prevent or detect an occurrence, and if any resulting loss is not insured or exceeds applicable insurance limits, such failure could have a material adverse effect on our business, financial condition and results of operations.

Government regulation can result in limitations on our operations.

We operate in a highly regulated environment and are subject to supervision and regulation by a number of governmental regulatory agencies, including Treasury, the Federal Reserve, the FDIC, the Iowa Superintendent, and the Illinois DFPR. Regulations adopted by these agencies, which are generally intended to provide protection for depositors and customers rather than for the benefit of stockholders, govern a comprehensive range of matters relating to ownership and control of our shares, our acquisition of other companies and businesses, permissible activities for us to engage in, maintenance of adequate capital levels and other aspects of our operations. These bank regulators possess broad authority to prevent or remedy unsafe or unsound practices or violations of law. The laws and regulations applicable to the banking industry could change at any time and we cannot predict the effects of these changes on our business and profitability. Increased regulation could increase our cost of compliance and adversely affect profitability. For example, new legislation or regulation may limit the manner in which we may conduct our business, including our ability to offer new products, obtain financing, attract deposits, make loans and achieve satisfactory interest spreads.

12

Failure to pay interest on our debt or dividends on our preferred stock may adversely impact our ability to pay common stock dividends.

As of December 31, 2008, we had $36.1 million of junior subordinated debentures held by four business trusts that we control. Interest payments on the debentures, which totaled $2.4 million for 2008, must be paid before we pay dividends on our capital stock, including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on our capital stock. As of December 31, 2008, the Company had 568 shares of non-cumulative perpetual preferred stock issued and outstanding. Although these non-cumulative preferred shares will accrue no dividends, dividends will be payable on the preferred shares if declared, but no dividends may be declared on the Company’s common stock unless and until dividends have been declared on the outstanding shares. Deferral, of either interest payments on the debentures or preferred dividends on the preferred shares, could cause a subsequent decline in the market price of our common stock because the Company would not be able to pay dividends on its common stock.

In addition, on February 13, 2009, we issued shares of perpetual senior preferred stock to Treasury as part of the Capital Purchase Program. The terms of the senior preferred stock restrict the payment of dividends on shares of our common stock. Without the prior consent of Treasury, we are prohibited from increasing common stock dividends for the first three years while Treasury holds the senior preferred stock. Further, we are prohibited from continuing to pay dividends on our common stock unless we have fully paid all required dividends on the senior preferred stock. Although we expect to be able to pay all required dividends on the senior preferred stock (and to continue to pay dividends on common stock at current levels), there is no guarantee that we will be able to do so.

There is a limited trading market for our common shares, and you may not be able to resell your shares at or above the price stockholders paid for them.

Although our common shares are listed for quotation on The NASDAQ Capital Market, the trading in our common shares has substantially less liquidity than many other companies listed on NASDAQ. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the market of willing buyers and sellers of our common shares at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. We cannot assure you that the volume of trading in our common shares will increase in the future.

Item 1B. Unresolved Staff Comments

There are no unresolved staff comments.

13

Item 2. Properties

The following table is a listing of the Company’s operating facilities for its subsidiary banks:

	Facility
	Square		Facility Owned or
Facility Address	Footage		Leased
Quad City Bank & Trust
2118 Middle Road in Bettendorf, IA		6,700	Owned
4500 Brady Street in Davenport, IA		36,000	Owned
3551 7th Street in Moline, IL		30,000	Owned	*
5515 Utica Ridge Road in Davenport, IA		6,000	Leased
1700 Division Street in Davenport, IA		12,000	Owned
Cedar Rapids Bank & Trust
500 1st Avenue NE, Suite 100 in Cedar Rapids, IA		36,000	Owned
5400 Council Street in Cedar Rapids, IA		5,900	Owned
Rockford Bank & Trust
127 North Wyman Street in Rockford, IL		7,800	Leased
4571 Guilford Road in Rockford, IL		20,000	Owned

* The building is owned by Velie Plantation Holding Company, in which the Company has a 57% interest.

The subsidiary banks intend to limit their investment in premises to no more than 50% of their capital. Management believes that the facilities are of sound construction, in good operating condition, are appropriately insured and are adequately equipped for carrying on the business of the Company.

No individual real estate property or mortgage amounts to 10% or more of consolidated assets.

Item 3. Legal Proceedings

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

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to the stockholders of the Company for a vote during the fourth quarter of the fiscal year ended December 31, 2008.

14

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information. The common stock, par value $1.00 per share, of the Company is listed on The NASDAQ Capital Market under the symbol “QCRH”. The stock began trading on October 6, 1993. As of December 31, 2008, there were 4,509,637 shares of common stock outstanding held by approximately 2,600 holders of record. The following table sets forth the high and low sales prices of the common stock, as reported by The NASDAQ Capital Market, for the periods indicated.

	2008				2007				2006
	sales price				sales price				sales price
	High		Low		High		Low		High		Low
First quarter	$	17.020	$	14.150	$	17.900	$	15.280	$	19.660	$	17.440
Second quarter		16.200		12.130		17.750		15.150		19.950		16.250
Third quarter		16.200		9.700		16.430		13.760		18.169		16.210
Fourth quarter		14.240		9.440		16.000		14.250		18.860		16.772

Dividends on Common Stock. On April 24, 2008, the Company declared a cash dividend of $0.04 per share, or $185 thousand, which was paid on July 7, 2008, to stockholders of record as of June 23, 2008. On October 23, 2008, the Company declared a cash dividend of $0.04 per share, or $185 thousand, which was paid on January 7, 2009, to stockholders of record as of December 22, 2008. In the future, it is the Company’s intention to continue to consider the payment of dividends on a semi-annual basis. The Company anticipates an ongoing need to retain much of its operating income to help provide the capital for continued growth, but believes that operating results have reached a level that can sustain dividends to stockholders as well.

The Company is heavily dependent on dividend payments from its subsidiary banks to make dividend payments on the Company’s preferred and common stock. Under applicable state laws, the banks are restricted as to the maximum amount of dividends that they may pay on their common stock. Iowa and Illinois law provide that state-chartered banks in those states may not pay dividends in excess of their undivided profits.

The Company’s ability to pay dividends to its shareholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies. The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.

The Company also has certain contractual restrictions on its ability to pay dividends. The Company has issued junior subordinated debentures in four private placements. Under the terms of the debentures, the Company may be prohibited, under certain circumstances, from paying dividends on shares of its common stock. During the fourth quarters of 2006 and 2007, the Company issued shares of non-cumulative perpetual preferred stock. Also, under the terms of this preferred stock, the Company may be prohibited, under certain circumstances, from paying dividends on shares of its common stock. None of these circumstances currently exist.

In addition, as a result of the Company’s issuance of the CPP Preferred Stock to Treasury on February 13, 2009, the ability of the Company to declare or pay dividends on its common stock is subject to restrictions, including the restriction on increasing dividends from the last semi-annual cash dividend declared prior to October 14, 2008, which was $0.04 per share. This restriction will terminate on the earlier of (a) the third anniversary of the date of issuance of the Series D Preferred Stock and (b) the date on which the CPP Preferred Stock has been redeemed in whole or Treasury has transferred all of the CPP Preferred Stock to one or more third parties. Further, the ability of the Company to declare or pay dividends on its common stock will be subject to restrictions in the event that the Company fails to declare and pay full dividends on the CPP Preferred Stock.

15

Purchase of Equity Securities by the Company. On December 31, 2008, the Company repurchased 121,246 shares of its common stock. The common stock was repurchased at $13.25 per share for a total cost of $1,606,510.

Stockholder Return Performance Graph. The following graph indicates, for the period commencing December 31, 2003, a comparison of cumulative total returns for QCR Holdings, Inc., the NASDAQ Composite Index and the SNL Bank NASDAQ Index prepared by SNL Securities, Charlottesville, Virginia. The graph was prepared at the Company’s request by SNL Securities.

	Period Ending
Index	12/31/03		12/31/04		12/31/05		12/31/06		12/31/07		12/31/08
QCR Holdings, Inc.		100.00		112.96		106.38		95.80		77.70		54.89
NASDAQ Composite		100.00		108.59		110.08		120.56		132.39		78.72
SNL Bank NASDAQ		100.00		114.61		111.12		124.75		97.94		71.13

16

Item 6. Selected Financial Data

The following “Selected Consolidated Financial Data” of the Company is derived in part from, and should be read in conjunction with, our consolidated financial statements and the accompanying notes thereto. See Item 8 “Financial Statements.” Results for past periods are not necessarily indicative of results to be expected for any future period. All periods reported have been reclassified, as appropriate, for discontinued operations comparative purposes.

SELECTED CONSOLIDATED FINANCIAL DATA
(dollars in thousands, except per share data)

	Years Ended December 31,
	2008			2007			2006			2005			2004
Statement of Income Data:
Continuing Operations:
Interest income	$	85,467		$	83,140		$	68,803		$	48,688		$	38,017
Interest expense		40,524			48,139			38,907			21,281			13,325
Net interest income		44,943			35,001			29,896			27,407			24,692
Provision for loan/lease losses		9,222			2,336			3,284			877			1,372
Non-interest income		13,611			12,850			10,998			9,106			7,968
Non-interest expenses		42,334			35,734			34,063			28,922			23,794
Income tax expense		1,735			2,893			724			2,121			2,424
Minority interest in income of consolidated subsidiaries		288			388			266			78			—
Income from continuing operations		4,975			6,500			2,557			4,515			5,070
Discontinued Operations:
Income (loss) from discontinued operations, before taxes		2,580			(1,221	)		378			456			227
Income tax expense (benefit)		846			(498	)		133			161			80
Income (loss) from discontinued operations		1,734			(723	)		245			295			147
Net income		6,709			5,777			2,802			4,810			5,217
Per Common Share Data:
Income from continuing operations-basic	$	0.69		$	1.18		$	0.52		$	1.00		$	1.20
Net income-basic		1.07			1.03			0.57			1.06			1.23
Income from continuing operations-diluted		0.69			1.18			0.51			0.98			1.17
Net income-diluted		1.06			1.02			0.57			1.04			1.20
Cash dividends declared		0.08			0.08			0.08			0.08			0.08
Dividend payout ratio		7.48	%		7.77	%		14.04	%		7.55	%		6.50	%
Balance Sheet:
Total assets	$	1,605,629		$	1,476,564		$	1,271,675		$	1,042,614		$	870,084
Securities		256,076			220,557			194,774			182,365			149,561
Loans/leases		1,214,690			1,056,988			960,747			756,254			648,351
Allowance for estimated losses on loans/leases		17,809			11,315			10,612			8,884			9,262
Deposits		1,058,959			884,005			875,447			698,504			588,016
Stockholders’ equity:
Preferred		20,158			20,158			12,884			—			—
Common		70,479			65,908			57,999			54,467			50,774
Key Ratios:
Return on average assets		0.43	%		0.43	%		0.24	%		0.51	%		0.65	%
Return on average common equity		9.90			9.31			5.02			9.14			11.89
Return on average total equity		7.63			7.70			4.85			9.14			11.89
Net interest margin (TEY) (1)		3.32			2.92			2.87			3.25			3.41
Efficiency ratio (2)		72.30			74.68			83.30			79.21			72.85
Nonperforming assets to total assets		1.48			0.51			0.58			0.36			1.23
Allowance for estimated losses on loans/leases to total loans/leases		1.47			1.07			1.10			1.17			1.43
Net charge-offs to average loans/leases		0.24			0.14			0.18			0.25			0.13
Average total stockholders’ equity to average assets		5.66			5.55			5.01			5.63			5.49

(1)	Interest earned and yields on nontaxable investments are determined on a tax equivalent basis using a 34% tax rate.
(2)	Non-interest expenses divided by the sum of net interest income before provision for loan/lease losses and non-interest income.

17

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides additional information regarding our operations for the twelve-month periods ending December 31, 2008, 2007, and 2006, and our financial condition at December 31, 2008 and 2007. This discussion should be read in conjunction with “Selected Consolidated Financial Data” and our consolidated financial statements and the accompanying notes thereto included or incorporated by reference elsewhere in this document.

OVERVIEW

The Company was formed in February 1993 for the purpose of organizing Quad City Bank & Trust. Over the past sixteen years, the Company has grown to include two additional banking subsidiaries and a number of nonbanking subsidiaries. As of December 31, 2008, the Company had $1.61 billion in consolidated assets.

The Company reported earnings of $6.7 million, or $1.07 basic earnings per share, for 2008, compared to $5.8 million, or $1.03 basic earnings per share, for 2007, and $2.8 million, or $0.57 basic earnings per share, for 2006. A significant contributor to earnings for 2008 was the gain on sale of the merchant credit card acquiring business within Bancard. The gain on sale, net of taxes and related expenses, totaled approximately $3.0 million, or $0.65 per share.

Earnings from continuing operations were $5.0 million, or $0.69 basic earnings per share, for 2008, compared to $6.5 million, or $1.18 basic earnings per share, for 2007, and $2.6 million, or $0.52 basic earnings per share, for 2006. The reduction in 2008 earnings from continuing operations was due to the significant increase in provision for loan/lease losses of $6.9 million. Throughout the year, the Company increased its qualitative reserves due to the continued weakness and uncertainty in the economy and made increased provisions for specific commercial credits. Helping to offset this increased provision expense was a dramatic improvement in net interest income totaling $9.9 million, or 28%, from $35.0 million for the year ending December 31, 2007 to $44.9 million for the year ending December 31, 2008.

As noted above, net interest income significantly increased $9.9 million, or 28%, to $44.9 million for 2008, from $35.0 million for 2007. For 2008, average earning assets increased by $148.0 million, or 12%, and average interest-bearing liabilities increased by $135.9 million, or 12%, when compared with average balances for 2007. A comparison of yields, spreads and margins from 2008 to 2007 shows the following:

• The average yield on interest-earning assets decreased 58 basis points from 6.87% to 6.29%.

• The average cost of interest-bearing liabilities decreased 108 basis points from 4.33% to 3.25%.

• The net interest spread improved 50 basis points from 2.54% to 3.04%.

• The net interest margin improved 40 basis points from 2.92% to 3.32%.

Net interest income significantly increased $4.6 million, or 15%, to $35.0 million for 2007, from $30.4 million for 2006. For 2007, average earning assets increased by $159.6 million, or 15%, and average interest-bearing liabilities increased by $149.1 million, or 15%, when compared with average balances for 2006. A comparison of yields, spreads and margins from 2007 to 2006 shows the following:

• The average yield on interest-earning assets increased 32 basis points from 6.55% to 6.87%.

• The average cost of interest-bearing liabilities increased 29 basis points from 4.04% to 4.33%.

• The net interest spread improved 3 basis points from 2.51% to 2.54%.

• The net interest margin improved 5 basis points from 2.87% to 2.92%.

The Company’s management closely monitors and manages net interest margin. From a profitability standpoint, an important challenge for the Company’s subsidiary banks is the improvement of their net interest margins. Management continually addresses this issue with the use of alternative funding sources and pricing strategies.

18

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:

	Years Ended December 31,
	2008								2007								2006
				Interest		Average						Interest		Average						Interest		Average
	Average			Earned		Yield or			Average			Earned		Yield or			Average			Earned		Yield or
	Balance			or Paid		Cost			Balance			or Paid		Cost			Balance			or Paid		Cost
	(Dollars in Thousands)
ASSETS
Interest earnings assets:
Federal funds sold	$	5,631		$	100		1.78	%	$	5,450		$	248		4.55	%	$	10,230		$	475		4.64	%
Interest-bearing deposits at at financial institutions		5,313			165		3.11			6,142			346		5.63			6,440			320		4.97
Investment securities (1)		230,342			12,279		5.33			204,364			10,605		5.19			185,468			8,381		4.52
Gross loans/leases receivable (2) (3)		1,124,255			73,381		6.53			1,001,633			72,446		7.23			855,872			60,098		7.02
Total interest earning assets		1,365,541			85,925		6.29			1,217,589			83,645		6.87			1,058,010			69,274		6.55
Noninterest-earning assets:
Cash and due from banks	$	32,651							$	36,880							$	35,318
Premises and equipment, net		31,535								31,705								27,755
Less allowance for estimated losses on loans/leases		(13,770	)							(11,178	)							(9,780	)
Other		136,791								76,486								42,234
Total assets	$	1,552,748							$	1,351,482							$	1,153,537
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits	$	299,417			5,709		1.91	%	$	305,699			10,790		3.53	%	$	272,484			9,082		3.33	%
Savings deposits		57,955			806		1.39			31,300			651		2.08			32,065			703		2.19
Time deposits		443,122			17,379		3.92			404,544			19,786		4.89			380,524			17,280		4.54
Short-term borrowings		154,456			2,962		1.92			141,778			5,217		3.68			97,580			3,169		3.25
Federal Home Loan Bank advances		193,119			8,525		4.41			160,474			7,237		4.51			135,282			5,609		4.15
Junior subordinated debentures		36,085			2,389		6.62			36,085			2,623		7.27			34,796			2,490		7.16
Other borrowings		62,975			2,754		4.37			31,398			1,835		5.84			9,456			574		6.07
Total interest-bearing liabilities		1,247,129			40,524		3.25			1,111,278			48,139		4.33			962,187			38,907		4.04
Noninterest-bearing demand deposits		135,860								125,117								119,561
Other noninterest-bearing liabilities		79,956								38,511								14,026
Total liabilities		1,462,945								1,274,906								1,095,774
Minority interest in consolidated subsidiaries		1,851								1,558
Stockholders’ equity		87,952								75,018								57,763
Total liabilities and stockholders’ equity	$	1,552,748							$	1,351,482							$	1,153,537
Net interest income				$	45,401							$	35,506							$	30,367
Net interest spread							3.04	%							2.54	%							2.51	%
Net interest margin							3.32	%							2.92	%							2.87	%
Ratio of average interest earning assets to average interest- bearing liabilities		109.49	%							109.57	%							109.96	%

(1)	Interest earned and yields on nontaxable investment securities are determined on a tax equivalent basis using a 34% tax rate in each year presented.
(2)	Loan/lease fees are not material and are included in interest income from loans/leases receivable.
(3)	Non-accrual loans are not material and are included in the average balance for gross loans/leases receivable.

19

For the years ended December 31, 2008, 2007 and 2006

	Inc./(Dec.)			Components
	from			of Change (1)
	Prior Year			Rate			Volume
	2008 vs. 2007
	(Dollars in Thousands)
INTEREST INCOME
Federal funds sold	$	(148	)	$	(156	)	$	8
Interest-bearing deposits at other financial institutions		(181	)		(139	)		(42	)
Investment securities (2)		1,674			296			1,378
Gross loans/leases receivable (2) (3) (4)		935			(7,453	)		8,388
Total change in interest income	$	2,280		$	(7,452	)	$	9,732
INTEREST EXPENSE
Interest-bearing demand deposits	$	(5,081	)	$	(4,863	)	$	(218	)
Savings deposits		155			(267	)		422
Time deposits		(2,407	)		(4,172	)		1,765
Short-term borrowings		(2,255	)		(2,687	)		432
Federal Home Loan Bank advances		1,288			(156	)		1,444
Junior subordinated debentures		(234	)		(234	)		—
Other borrowings		919			(555	)		1,474
Total change in interest expense	$	(7,615	)	$	(12,934	)	$	5,319
Total change in net interest income	$	9,895		$	5,482		$	4,413

	Inc./(Dec.)			Components
	from			of Change (1)
	Prior Year			Rate			Volume
	2007 vs. 2006
	(Dollars in Thousands)
INTEREST INCOME
Federal funds sold	$	(227	)	$	(9	)	$	(218	)
Interest-bearing deposits at other financial institutions		26			42			(16	)
Investment securities (2)		2,223			1,317			906
Gross loans/leases receivable (2) (3) (4)		12,349			1,852			10,497
Total change in interest income	$	14,371		$	3,202		$	11,169
INTEREST EXPENSE
Interest-bearing demand deposits	$	1,708		$	557		$	1,151
Savings deposits		(52	)		(35	)		(17	)
Time deposits		2,506			1,377			1,129
Short-term borrowings		2,048			465			1,583
Federal Home Loan Bank advances		1,628			521			1,107
Junior subordinated debentures		133			40			93
Other borrowings		1,261			(22	)		1,283
Total change in interest expense	$	9,232		$	2,903		$	6,329
Total change in net interest income	$	5,139		$	299		$	4,840

(1)	The column “increase/decrease from prior year” 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 are determined on a tax equivalent basis using a 34% tax rate in each year presented.
(3)	Loan/lease fees are not material and are included in interest income from loans/leases receivable.
(4)	Non-accrual loans are not material and are included in the average balance for gross loans/leases receivable.

20

The Company’s operating results are also affected by sources of non-interest income, including trust department fees, deposit service fees, investment advisory and management fees, gains from the sales of residential real estate loans and other income. The Company’s operating results are also affected by economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. The majority of the subsidiary banks’ loan portfolios are invested in commercial loans. Deposits from commercial customers represent a significant funding source, as well.

Trust department income continues to be a significant contributor to non-interest income. During 2008, trust department fees contributed $3.3 million which was a decrease of $339 thousand, or 9%, from $3.7 million for 2007. Trust department fees contributed $3.0 million to our non-interest income during 2006. Income is generated primarily from fees charged based on assets under administration for corporate and personal trusts and for custodial services. Assets under administration at December 31, 2008 totaled $811.9 million which is a decrease of $378.0 million, or 32% from $1.19 billion at December 31, 2007. The majority of trust department income consists of fees determined by the performance of the investments within the managed trusts. Due to the economic recession, the majority of these asset values have decreased significantly over the year.

The Company’s operating results were also affected by non-interest expenses, which include employee compensation and benefits, occupancy and equipment expense, professional and data processing, and other administrative expenses. The Company has continued to add resources to accommodate both our historical growth and anticipated future growth. As such, overhead expenses have had a significant impact on earnings.

CRITICAL ACCOUNTING POLICIES

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

Based on its consideration of accounting policies that involve the most complex and subjective decisions and assessments, management has identified its most critical accounting policy to be that related to the allowance for loan/lease losses. The Company’s allowance for loan/lease loss methodology incorporates a variety of risk considerations, both quantitative and qualitative in establishing an allowance for loan/lease loss 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, governmental guarantees, payment status, changes in nonperforming loans/leases, and other factors. Quantitative factors also incorporate known information about individual loans/leases, including borrowers’ sensitivity to interest rate movements. Qualitative factors include the general economic environment in the Company’s markets, including economic conditions throughout the Midwest, and in particular, the economic health of certain industries. Size and complexity of individual credits in relation to loan/lease structure, existing loan/lease policies and pace of portfolio growth are other qualitative factors that are considered in the methodology. As the Company adds new products and increases the complexity of its loan/lease portfolio, it enhances its methodology accordingly. Management may report a materially different amount for the provision for loan/lease losses in the statement of operations to change the allowance for loan/lease losses if its assessment of the above factors were different. The discussion regarding the Company’s allowance for loan/lease losses should be read in conjunction with the Company’s financial statements and the accompanying notes presented elsewhere in this Form 10-K, as well as the portion of this Management’s Discussion and Analysis section entitled “Financial Condition — Allowance for Loan/Lease Losses.” Although management believes the level of the allowance as of December 31, 2008 was adequate to absorb losses inherent in the loan/lease portfolio, a decline in local economic conditions, or other factors, could result in increasing losses that cannot be reasonably predicted at this time.

The Company’s assessment of other-than-temporary impairment of its available-for-sale securities portfolio is another critical accounting policy as a result of the level of judgment required by management. Available-for-sale securities are evaluated to determine whether declines in fair value below their cost are other-than-temporary. In estimating other-than-temporary impairment losses management considers a number of factors including (1) the length of time and extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for anticipated recovery in fair value. The discussion regarding the Company’s assessment of other-than-temporary impairment should be read in conjunction with the Company’s financial statements and the accompanying notes presented elsewhere in this Form 10-K. As of December 31, 2008, management’s evaluation determined that any declines in fair value of the available-for-sale securities were temporary.

21

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2008, 2007, and 2006

Overview. Net income for 2008 was $6.7 million compared to net income of $5.8 million for 2007, which is an increase of $931 thousand, or 16%. Basic earnings per share for 2008 were $1.07 compared to $1.03 for 2007. During 2008, Bancard sold its merchant credit card acquiring business resulting in a gain on sale of approximately $3.0 million, net of taxes and related expenses, or $0.65 per share. The Company was successful in improving its net interest income during 2008 as net interest income increased $9.9 million, or 28%, from 2007. Offsetting these increases, the Company’s provision for loan/lease losses for 2008 increased $6.9 million, or 295%, from 2007, and noninterest expenses for 2008 increased $6.6 million, or 18%, from 2007.

Net income for 2007 was $5.8 million compared to net income of $2.8 million for 2006 for an increase of $3.0 million, or 107%. Basic earnings per share for 2007 were $1.03 compared to $0.57 for 2006. The increase in net income was comprised of an increase in net interest income after provision for loan losses of $6.1 million in combination with an increase in aggregate non-interest income of $1.9 million, offset by an increase in non-interest expenses of $1.7 million. The primary factor which contributed to the improvement in net income from 2006 to 2007 was the increase in net interest margin from 2.87% to 2.92% coupled with the growth in average earning assets and liabilities of 15%.

Interest income. Interest income increased $2.3 million, or 3%, from $83.1 million for 2007 to $85.5 million for 2008. As a result of the deteriorating economy and a significant declining interest rate environment in 2008, the majority of the increase in interest income was a result of growth in interest-earning assets, principally loans and leases.

Interest income grew $16.7 million from $68.8 million for 2006 to $85.5 million for 2007. The 24% increase in interest income was attributable to greater average outstanding balances in interest-earning assets, principally loans and leases receivable, in combination with an improved aggregate asset yield. The average yield on interest earning assets for 2007 was 6.87% compared to 6.55% for 2006.

Interest expense. Interest expense decreased $7.6 million, or 16%, from $48.1 million for 2007 to $40.5 million for 2008. With the economic recession and drop in rates during 2008, the Company was successful in managing its cost of funds as the average cost on interest bearing liabilities decreased 108 basis points from 4.33% for 2007 down to 3.25% for 2008.

Interest expense increased by $9.2 million, from $38.9 million for 2006 to $48.1 million for 2007. The 24% increase in interest expense was primarily attributable to a general increase in interest rates, in combination with greater average outstanding balances in interest-bearing liabilities, primarily customer deposits. The average cost on interest bearing liabilities was 4.33% for 2007 compared to 4.04% for 2006.

22

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

The Company had an allowance for estimated losses on loans/leases of approximately 1.47% of total gross loans/leases at December 31, 2008, compared to approximately 1.07% of total gross loans/leases at December 31, 2007, and compared to approximately 1.10% of total gross loans/leases at December 31, 2006.

During 2008, the Company’s provision for loan/lease losses increased significantly from $2.3 million for 2007 to $9.2 million. This increase was a result of the following:

• The Company grew its loan portfolio 15% during 2008 as gross loans/leases increased from $1.1 billion as of December 31, 2007 to $1.2 billion as of December 31, 2008,

• Due to the economic recession and related uncertainty as to the severity and duration of its impact on the national and local economies, the Company increased the qualitative factors impacting the allowance for estimate losses on loans/leases, and

• The Company experienced some degradation in specific commercial credits within the loan portfolio that required specific reserves.

The provision for loan/lease losses decreased to $2.3 million for 2007, compared to $3.3 million for 2006. During both periods, management made monthly provisions for loan/lease losses based upon a number of factors; principally the increase in loans/leases and a detailed analysis of the loan/lease portfolio. In 2007, the Company experienced $96.2 million of growth within the loan/lease portfolio which was the largest contributor to the $2.3 million of provision expense. Net charge-offs to average loans/leases improved from 0.18% for 2006 to 0.14% for 2007. The ability to grow profitably is, in part, dependent upon the ability to maintain asset quality. Management has a significant focus on the monitoring and maintenance of the overall quality of the Company’s loan/lease portfolio.

23

Non-interest income. The following tables set forth the various categories of non-interest income for the years ended December 31, 2008, 2007 and 2006.

	Years Ended
	December 31,		December 31,
	2008		2007		$ Change			% Change
Credit card fees, net of processing costs	$	987,769	$	746,725	$	241,044			32.3	%
Trust department fees		3,333,812		3,672,501		(338,689	)		(9.2	)
Deposit service fees		3,134,869		2,606,724		528,145			20.3
Gains on sales of loans, net		1,068,545		1,219,800		(151,255	)		(12.4	)
Securities gains, net		199,500		—		199,500			100.0
Gains on sales of foreclosed assets		394,103		1,007		393,096			100.0
Gains on sales of other assets		—		435,791		(435,791	)		(100.0	)
Earnings on bank-owned life insurance		1,016,864		846,071		170,793			20.2
Investment advisory and management fees, gross		1,975,236		1,575,887		399,349			25.3
Other		1,500,415		1,745,396		(244,981	)		(14.0	)
Total Non-Interest Income	$	13,611,113	$	12,849,902	$	761,211			5.9	%

	Years Ended
	December 31,		December 31,
	2007		2006			$ Change			% Change
Credit card fees, net of processing costs	$	746,725	$	963,360		$	(216,635	)		(22.5	)%
Trust department fees		3,672,501		3,049,440			623,061			20.4
Deposit service fees		2,606,724		1,928,246			678,478			35.2
Gains on sales of loans, net		1,219,800		991,536			228,264			23.0
Securities gains, net		—		(142,866	)		142,866			(100.0	)
Gains on sales of foreclosed assets		1,007		664,223			(663,216	)		(99.8	)
Gains on sales of other assets		435,791		—			435,791			100.0
Earnings on bank-owned life insurance		846,071		759,100			86,971			11.5
Investment advisory and management fees, gross		1,575,887		1,216,350			359,537			29.6
Other		1,745,396		1,569,092			176,304			11.2
Total Non-Interest Income	$	12,849,902	$	10,998,481		$	1,851,421			16.8	%

• Bancard’s credit card fees, net of processing costs, increased during 2008 as a result of improved interchange income from increased processing volumes for cardholders. Additionally, Bancard experienced a reduction of charge-off activity for its cardholder portfolio during 2008 as compared to the same period in 2007. In 2007, Bancard’s credit card fees, net of processing costs, decreased $217 thousand from 2006 due, in large part, to an increase in net charge-offs of $223 thousand from 2006.

• Trust department fees experienced some volatility over the past two years. The majority of these fees are determined based on performance of the investments within the managed trust. With the economic recession in 2008, many of these investments experienced downward volatility. Total trust assets under administration were $811.9 million at December 31, 2008 compared to $1.19 billion at December 31, 2007 and compared to $894.1 million at December 31, 2006.

• Deposit service fees have increased significantly over the past two years. This increase was primarily a result of an increase in NSF (non-sufficient funds or overdraft) charges related to demand deposit accounts at the Company’s subsidiary banks. The amount and number of demand deposit accounts have increased in each of 2007 and 2008. Service charges and NSF charges related to the Company’s demand deposit accounts were the main components of deposit service fees.

24

• Gains on sales of residential mortgage loans, net, decreased in 2008 compared to 2007 as loan origination and sales activity slowed as a result of the economic difficulties experienced in 2008.

• Investment advisory and management fees increased 25.3% and 29.6% year-over-year for 2008 and 2007, respectively. The increase for 2008 was largely attributable to the acquisition of CMG Investment Advisors, LLC, a wholly-owned subsidiary of Quad City Bank & Trust, which occurred in the first quarter of 2008. For 2007, the increase was due to both the continued development of existing customers and the addition of new customers with a resulting growth in the number and value of accounts.

Non-interest expenses. The following tables set forth the various categories of non-interest expenses for the years ended December 31, 2008, 2007 and 2006.

	Years Ended
	December 31,		December 31,
	2008		2007		$ Change			% Change
Salaries and employee benefits	$	26,124,160	$	21,976,683	$	4,147,477			18.9	%
Professional and data processing fees		4,801,087		3,469,331		1,331,756			38.4
Advertising and marketing		1,296,651		1,115,864		180,787			16.2
Occupancy and equipment expense		5,091,545		4,717,054		374,491			7.9
Stationery and supplies		518,639		513,210		5,429			1.1
Postage and telephone		933,508		936,032		(2,524	)		(0.3	)
Bank service charges		559,614		565,092		(5,478	)		(1.0	)
FDIC and other insurance		1,316,710		995,955		320,755			32.2
Loss on sale of premises and equipment		—		223,308		(223,308	)		(100.0	)
Other		1,691,775		1,221,446		470,329			38.5
Total Non-Interest Expense	$	42,333,689	$	35,733,975	$	6,599,714			18.5	%

	Years Ended
	December 31,		December 31,
	2007		2006		$ Change			% Change
Salaries and employee benefits	$	21,976,683	$	20,820,715	$	1,155,968			5.6	%
Professional and data processing fees		3,469,331		3,154,169		315,162			10.0
Advertising and marketing		1,115,864		1,354,323		(238,459	)		(17.6	)
Occupancy and equipment expense		4,717,054		4,714,077		2,977			0.1
Stationery and supplies		513,210		635,195		(121,985	)		(19.2	)
Postage and telephone		936,032		938,129		(2,097	)		(0.2	)
Bank service charges		565,092		583,687		(18,595	)		(3.2	)
FDIC and other insurance		995,955		608,559		387,396			63.7
Loss on sale of premises and equipment		223,308		36,305		187,003			515.1
Other		1,221,446		1,217,429		4,017			0.3
Total Non-Interest Expense	$	35,733,975	$	34,062,588	$	1,671,387			4.9	%

• Salaries and employee benefits, which is the largest component of non-interest expenses, increased $4.1 million in 2008 compared to 2007 and $1.2 million in 2007 compared to 2006. The increases were primarily due to an increase in the number of full-time equivalent employees from 313 at December 31, 2006, to 326 at December 31, 2007, and to 345 at December 31, 2008. The large majority of these employee additions are attributable to the Company’s continued expansion in its existing markets.

25

• Professional and data processing fees increased 38.4% and 10.0% year-over-year during 2008 and 2007, respectively. The primary contributors to the year-over-year increases were legal, consulting, and data processing fees incurred at the subsidiary banks. Fees incurred for data processing experienced an increase as the number of customers and volume of transactions have grown. In addition, the Company incurred significant expenses for consulting and legal services for work on troubled loans/leases, amendments of compensation agreements in compliance with a new regulation, and the evaluation of the EESA.

• FDIC and other insurance expense experienced significant increases in each of the last two years. In 2007, the FDIC introduced its new premium pricing system and assessment methodology for deposit insurance coverage for all depository institutions. The result was increased premium cost for the subsidiary banks. During 2007, the subsidiary banks had credits which were applied to offset some of the increased premium cost. In 2008, the subsidiary banks experienced the full impact of the increased premium cost. The Company expects that its subsidiary banks will continue to experience increased fees and assessments as the FDIC is expected to further increase its assessment rates applicable to all depository institutions. Refer to the New Industry Developments section within Note 1 of the Consolidated Financial Statements for further discussion of FDIC insurance.

Income tax expense. The provision for income taxes from continuing operations was $1.7 million for the year ended December 31, 2008 compared to $2.9 million for the year ended December 31, 2007 for a decrease of $1.2 million, or 40%. The decrease was the result of a decrease in income from continuing operations before income taxes of $2.8 million, or 28%, for 2008 when compared to 2007. Additionally, primarily due to a decrease in the proportionate share of taxable income to total income from year to year, the Company experienced a decrease in the effective tax rate from 29.7% for 2007 to 24.8% for 2008. The Company’s adoption of FIN 48 resulted in no effect to the provision of income taxes for 2008.

The provision for income taxes from continuing operations was $2.9 million for the year ended December 31, 2007 compared to $725 thousand for the year ended December 31, 2006. The increase was the result of a sharp increase in income from continuing operations before income taxes of $6.3 million, or 176%, from $3.5 million in 2006 to $9.8 million in 2007. Primarily due to an increase in the proportionate share of taxable income to total income from year to year, the Company experienced an increase in the effective tax from 20.5% for 2006 to 29.7% for 2007. The Company’s adoption of FIN 48 resulted in no effect to the provision of income taxes for 2007.

Discontinued Operations. Income from discontinued operations for the year ended December 31, 2008 totaled $1.7 million which was a significant improvement from the loss from discontinued operations of $723 thousand incurred for the year ended December 31, 2007. The gain on sale of the merchant credit card acquiring business, after taxes, of approximately $3.0 million more then offset the increase in operating loss by First Wisconsin Bank & Trust, before taxes, of $1.2 million.

For the year ended December 31, 2007, the Company incurred a loss from discontinued operations of $723 thousand which was a decrease of $968 thousand as the Company recognized earnings from discontinued operations of $245 thousand for the year ended December 31, 2006. First Wisconsin Bank & Trust’s first year of operation as a de novo was 2007 and it incurred a loss of $1.6 million which more then offset the increase in operating income from the merchant credit card acquiring business.

26

FINANCIAL CONDITION

Overview. Total assets of the Company increased by $129.1 million, or 9%, to $1.61 billion at December 31, 2008 from $1.48 billion at December 31, 2007. Total assets of the Company increased by $204.9 million, or 16%, to $1.48 billion at December 31, 2007, from $1.27 billion at December 31, 2006. This growth primarily resulted from an increase in the securities and loans/leases portfolio funded by deposits received from customers and by proceeds from Federal Home Loan Bank (“FHLB”) advances and other borrowings.

Investments. The composition of the Company’s securities portfolio is managed to prioritize the impact on asset-liability position and liquidity needs.

Securities increased by $35.5 million, or 16%, to $256.1 million at December 31, 2008, from $220.6 million at December 31, 2007. The Company’s securities available for sale portfolio consists largely of U.S. Treasury and government sponsored agency securities. Mortgage-backed securities represents less than 1% of the entire portfolio as of December 31, 2008.

Securities increased by $25.8 million, or 13%, to $220.6 million at December 31, 2007, from $194.8 million at December 31, 2006. The Company’s securities available for sale portfolio consists largely of U.S. Treasury and government sponsored agency securities. Mortgage-backed securities represents less than 1% of the entire portfolio as of December 31, 2007.

Loans/Leases. Gross loans/leases receivable grew by $157.7 million, or 15%, to $1.21 billion at December 31, 2008, from $1.06 billion at December 31, 2007. Compared to 2006, gross loans/leases receivable increased $96.2 million from $960.3 million as of December 31, 2006 to $1.05 billion as of December 31, 2007.

The mix of the loan/lease types within the Company’s loan/lease portfolio is presented in the following table.

	As of
	December 31,		December 31,		December 31,
	2008		2007		2006
	(dollars in thousands)
Commercial	$	436,699	$	353,401	$	396,598
Commercial Real Estate		529,087		472,284		350,339
Direct Financing Leases		79,408		67,224		52,628
Residential Real Estate		79,229		83,328		81,635
Installment and Other Consumer		88,540		79,220		78,058
Deferred Origination Costs, Net of Fees		1,727		1,531		1,489
	$	1,214,690	$	1,056,988	$	960,747

The majority of residential real estate loans originated by the Company were sold on the secondary market to avoid the interest rate risk associated with long 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.

27

Allowance for Estimated Losses on Loans/Leases. The allowance for estimated losses on loans/leases was $17.8 million at December 31, 2008, compared to $11.3 million at December 31, 2007, for an increase of $6.5 million, or 57%. The allowance for estimated losses on loans/leases was $11.3 million at December 31, 2007, compared to $10.6 million at December 31, 2006, for an increase of $703 thousand, or 7%. The Company incurred net charge-offs totaling $2.7 million for the year ending December 31, 2008, which is an increase of $1.1 million from $1.6 million for each of the years ending December 31, 2007 and 2006.

The adequacy of the allowance for estimated losses on loans/leases was determined by management based on factors that included the overall composition of the loan/lease portfolio, types of loans/leases, historical loss experience, loan/lease delinquencies, potential substandard and doubtful credits, economic conditions and other factors that, in management’s judgment, deserved evaluation in estimating loan/lease losses. To ensure that an adequate allowance was maintained, provisions were made based on the increase in loans/leases and a detailed analysis of the loan/lease portfolio. The loan/lease portfolio was reviewed and analyzed monthly with specific detailed reviews completed on all credits risk-rated less than “fair quality” and carrying aggregate exposure in excess of $100 thousand. The adequacy of the allowance for estimated losses on loans/leases was monitored by the credit administration staff and reported to management and the board of directors. Due to the continued weakness and uncertainty regarding the national economy and the impact on local markets, the Company increased the qualitative reserve factors applied to all loans within the reserve adequacy calculations for all the subsidiary banks and the leasing company. In addition, the Company increased provisions for specific commercial credits. As a direct result, the allowance for estimated losses on loans/leases as a percentage of total gross loans/leases was 1.47% at December 31, 2008, which was a significant increase from 1.07% at December 31, 2007, and 1.10% at December 31, 2006.

Although management believes that the allowance for estimated losses on loans/leases at December 31, 2008 was at a level adequate to absorb probable losses on existing loans/leases, there can be no assurance that such losses will not exceed the estimated amounts or that the Company will not be required to make additional provisions for loan/lease losses in the future. Unpredictable future events could adversely affect cash flows for both commercial and individual borrowers, which could cause the Company to experience increases in problem assets, delinquencies and losses on loans/leases, and require additional 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.

Nonperforming Assets. The table below presents the amounts of nonperforming assets. Balances related to discontinued operations have been eliminated for all 2007 and 2006.

	As of
	December 31,		December 31,		December 31,
	2008		2007		2006
	(dollars in thousands)
Nonaccrual loans/leases	$	19,711	$	6,488	$	6,538
Accruing loans/leases past due 90 days or more		222		500		755
Other real estate owned		3,857		496		93
	$	23,790	$	7,484	$	7,386

The policy of the Company is to place a loan/lease on nonaccrual status if: (a) payment in full of interest or principal is not expected or (b) principal or interest has been in default for a period of 90 days or more unless the obligation is both in the process of collection and well secured. A loan/lease is well secured if it is secured by collateral with sufficient market value to repay principal and all accrued interest. A debt is in the process of collection if collection of the debt is proceeding in due course either through legal action, including judgment enforcement procedures, or in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to current status.

The Company experienced an increase in nonperforming assets of $16.3 million, or 218%, from $7.5 million as of December 31, 2007, to $23.8 million as of December 31, 2008. Of this increase, $9.2 million, or 56%, was attributable to two specific commercial credits. Management has thoroughly reviewed these loans and has provided specific reserves as appropriate. At December 31, 2008, nonperforming assets to total assets was 1.48% which was an increase from 0.50% as of December 31, 2007. As noted above, with the increase in qualitative factors for the heightened economic risk inherent within the portfolio and specific reserves for some of the nonaccrual loans/leases, the Company’s allowance for loan/lease losses increased to 1.47% at December 31, 2008, from 1.07% at December 31, 2007.

28

As of December 31, 2007, nonperforming assets totaled $7.5 million which was a slight increase from $7.4 million as of December 31, 2006. The majority of the nonperforming assets consisted of nonaccrual loans/leases. Of the $6.5 million of nonaccrual loans/leases, $4.2 million was the result of two large lending relationships (one at Quad City Bank & Trust, and the other at Rockford Bank & Trust). Nonaccrual loans at December 31, 2007 represented less than 1% of the Company’s total assets.

Assets Related to Discontinued Operations, Held for Sale. Assets related to discontinued operations, held for sale, were $68.2 million as of December 31, 2007. This consists entirely of the assets of First Wisconsin Bank & Trust. As First Wisconsin Bank & Trust was sold to an independent third party effective December 31, 2008, the Company no longer owned any of these assets.

Deposits. Deposits increased by $175.0 million, or 20%, to $1.1 billion at December 31, 2008, from $884.0 million at December 31, 2007. Deposits increased slightly from $875.5 million at December 31, 2006, to $884.0 million at December 31, 2007. The table below presents the composition of the Company’s deposit portfolio.

	As of
	December 31,		December 31,		December 31,
	2008		2007		2006
	(dollars in thousands)
Non-interest bearing demand deposits	$	161,126	$	160,533	$	124,184
Interest bearing demand deposits		355,990		300,681		303,461
Savings deposits		31,756		33,337		30,548
Time deposits		386,097		341,581		345,847
Brokered time deposits		123,990		47,873		71,407
	$	1,058,959	$	884,005	$	875,447

Short-term Borrowings. Short-term borrowings decreased by $68.7 million, or 40%, from $170.2 million as of December 31, 2007, to $101.5 million as of December 31, 2008. Short-term borrowings increased by $58.5 million, or 52%, from $111.7 million as of December 31, 2006, to $170.2 million as of December 31, 2007. The subsidiary banks offer short-term repurchase agreements to some of their major customers. Also, the subsidiary banks purchase Federal funds for short-term funding needs from the Federal Reserve Bank, or from their correspondent banks. Short-term borrowings were comprised of customer repurchase agreements of $68.1 million, $80.3 million, and $62.3 million at December 31, 2008, 2007, and 2006, respectively, as well as Federal funds purchased from correspondent banks of $33.4 million at December 31, 2008, $89.9 million at December 31, 2007, and $49.4 million at December 31, 2006.

FHLB Advances and Other Borrowings. FHLB advances increased $49.9 million, or 30%, from $168.8 million as of December 31, 2007, to $218.7 million as of December 31, 2008. FHLB advances increased $17.0 million, or 11%, from $151.9 million as of December 31, 2006, to $168.8 million as of December 31, 2007. As of December 31, 2008, the subsidiary banks held $11.8 million of FHLB stock in aggregate. As a result of their memberships in the FHLB of Des Moines and Chicago, the subsidiary banks have the ability to borrow funds for short-term or long-term purposes under a variety of programs. The subsidiary banks utilized FHLB advances for loan matching as a hedge against the possibility of rising interest rates or when these advances provided a less costly source of funds than customer deposits.

Other borrowings increased significantly by $27.9 million, or 58%, from $47.7 million at December 31, 2007, to $75.6 million at December 31, 2008. The Company experienced a similar increase in 2007 as other borrowings increased from $3.8 million at December 31, 2006, to $47.7 million at December 31, 2007, or by $43.9 million. The increases for both years are largely a result of the introduction and increased utilization of wholesale structured repurchase agreements as an alternative funding source to FHLB advances and customer deposits. Additional information regarding other borrowings is described in Note 10 to the consolidated financial statements.

29

Liabilities Related to Discontinued Operations, Held for Sale. Liabilities related to discontinued operations, held for sale, were $59.1 million as of December 31, 2007. This consists entirely of the liabilities of First Wisconsin Bank & Trust. As First Wisconsin Bank & Trust was sold to an independent third party effective December 31, 2008, the Company no longer owned any of these liabilities.

Stockholders’ Equity. Stockholders’ equity increased $4.5 million from $86.1 million as of December 31, 2007 to $90.6 million as of December 31, 2008. Net income of $6.7 million for 2008 increased retained earnings. This increase was offset by the declaration of preferred stock dividends totaling $1.8 million, and the declaration of common stock dividends totaling $370 thousand. Specifically regarding the preferred stock dividends declared, $1.1 million represented the quarterly dividends on the outstanding shares of Series B Non-Cumulative Perpetual Preferred Stock at a stated rate of 8.00%, and $712 thousand was the amount of the quarterly dividends on the outstanding shares of Series C Non-Cumulative Perpetual Preferred Stock at a stated rate of 9.50%. Additionally, the available for sale portion of the securities portfolio experienced an increase in fair value of $817 thousand, net of tax, for 2008 as a result of the decrease in long-term interest rates.

Stockholders’ equity increased $15.2 million from $70.9 million as of December 31, 2006 to $86.1 million as of December 31, 2007. Net income of $5.8 million for 2007 increased retained earnings. In the fourth quarter of 2007, the Company issued 300 shares of Series C Non-Cumulative Perpetual Preferred Stock at $25 thousand per share for a total of $7.5 million with a stated rate of 9.50%. The capital raised was used to pay down the balance on the Company’s line of credit. Additionally, the available for sale portion of the securities portfolio experienced an increase in fair value of $2.8 million, net of tax, for 2008 as a result of the decrease in long-term interest rates.

Additional information regarding the Company’s preferred stock is described in Note 1 to the consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity measures the ability of the Company to meet maturing obligations and its existing commitments, to withstand fluctuations in deposit levels, to fund its operations, and to provide for customers’ credit needs. The Company monitors liquidity risk through contingency planning stress testing on a regular basis. The Company seeks to avoid over concentration of funding sources and to establish and maintain contingent funding facilities that can be drawn upon if normal funding sources become unavailable. One source of liquidity is cash and short-term assets, such as interest-bearing deposits in other banks and federal funds sold, which totaled $56.3 million at December 31, 2008, $53.6 million at December 31, 2007, and $47.0 million at December 31, 2006. The subsidiary banks have a variety of sources of short-term liquidity available to them, including federal funds purchased from correspondent banks, FHLB advances, structured wholesale repurchase agreements, brokered certificates of deposits, lines of credit, borrowing at the Federal Reserve Discount Window, sales of securities available for sale, and loan participations or sales. The Company also generates liquidity from the regular principal payments and prepayments made on its portfolio of loans and mortgage-backed securities.

In recent years, the Company has secured additional capital through various resources including approximately $36.1 million through the issuance of trust preferred securities and $20.4 million through the issuance of non-cumulative perpetual preferred stock. See Financial Statement Notes 10 and 1 for information on the issuance of trust preferred securities, and preferred stock, respectively.

As of December 31, 2008 and 2007, the Company and subsidiary banks remained well-capitalized in accordance with regulatory capital requirements administered by the federal banking authorities. See Financial Statement Note 15 for detail of the capital amounts and ratios for the Company and subsidiary banks.

On February 13, 2009, the Company issued $38.24 million of CPP Preferred Stock to the Treasury as a result of the Company’s participation in the Treasury’s voluntary Capital Purchase Program. See Financial Statement Note 23 for detailed information on the issuance of CPP Preferred Stock.

30

COMMITMENTS, CONTINGENCIES, CONTRACTUAL OBLIGATIONS, AND OFF-BALANCE SHEET ARRANGEMENTS

In the normal course of business, the subsidiary banks make various commitments and incur certain contingent liabilities that are not presented in the accompanying consolidated financial statements. The commitments and contingent liabilities include various guarantees, commitments to extend credit, and standby letters of credit.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The subsidiary banks evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the banks upon extension of credit, is based upon management’s credit evaluation of the counter-party. Collateral held varies but may include accounts receivable, marketable securities, inventory, property, plant and equipment, and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the subsidiary banks to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and, generally, have terms of one year, or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The banks hold collateral, as described above, supporting those commitments if deemed necessary. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the banks would be required to fund the commitments. The maximum potential amount of future payments the banks could be required to make is represented by the contractual amount. If the commitment is funded, the banks would be entitled to seek recovery from the customer. At December 31, 2008 and 2007, no amounts had been recorded as liabilities for the banks’ potential obligations under these guarantees.

As of December 31, 2008 and 2007, commitments to extend credit aggregated $494.8 million and $464.9 million, respectively. As of December 31, 2008 and 2007, standby letters of credit aggregated $15.2 million and $14.1 million, respectively. Management does not expect that all of these commitments will be funded.

Additional information regarding commitments, contingencies, and off-balance sheet arrangements is described in Note 17 of the consolidated financial statements.

31

The Company has various financial obligations, including contractual obligations and commitments, which may require future cash payments. The following table presents, as of December 31, 2008, significant fixed and determinable contractual obligations to third parties by payment date. Further discussion of the nature of each obligation is included in the referenced note to the consolidated financial statements.

	Payments Due by Period
	(in thousands)
Description and			One year						After 5
Financial Statement Note Reference	Total		Or less		1-3 years		4-5 years		years
Deposits without a stated maturity	$	549,229	$	549,229	$	—	$	—	$	—
Certificates of deposits (7)		509,729		395,622		100,993		13,114		—
Short-term borrowings (8)		101,457		101,457		—		—		—
Federal Home Loan Bank advances (9)		218,695		14,345		17,100		58,750		128,500
Other borrowings (10)		75,583		5,583		5,000		40,000		25,000
Junior subordinated debentures (11)		36,085		—		—		—		36,085
Rental commitments (6)		3,655		610		1,144		1,097		804
Operating contracts		3,261		1,874		1,373		14		—
Total contractual cash obligations	$	1,497,694	$	1,068,720	$	125,610	$	112,975	$	190,389

Purchase obligations represent obligations under agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company had no purchase obligations at December 31, 2008. The Company’s operating contract obligations represent short and long-term lease payments for data processing equipment and services, software, and other equipment and professional services.

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements of the Company and the accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollar amounts without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of the Company’s operations. Unlike industrial companies, nearly all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a greater impact on the Company’s performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.

32

IMPACT OF NEW ACCOUNTING STANDARDS

In September 2006, FASB issued Statement of Financial Accounting Standard No. 157 (“SFAS No. 157”), “Fair Value Measurements,” which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. In February 2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157, which permits a one-year deferral for the implementation of SFAS No. 157 with regard to nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis. The Company adopted SFAS No. 157 for the fiscal year beginning January 1, 2008, except for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis for which delayed application is permitted until our fiscal year beginning January 1, 2009. The adoption of the remaining provisions of SFAS No. 157 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. See Note 22 for additional information regarding SFAS No. 157 and its impact on the Company’s consolidated financial statements.

In February of 2007, FASB issued Statement of Financial Accounting Standard No. 159 (“SFAS No. 159”), “The Fair Value Option for Financial Assets and Financial Liabilities”, which gives entities the option to measure eligible financial assets and financial liabilities at fair value on an instrument by instrument basis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available for eligible items that exist on the date that a company adopts SFAS No. 159 or when an entity first recognizes a financial asset or financial liability. The decision to elect the fair value option for an eligible item is irrevocable. Subsequent changes in fair value must be recorded in earnings. This Statement was effective as of the beginning of a company’s first fiscal year after November 15, 2007. The Statement offered early adoption provisions that the Company elected not to exercise. There was no impact on the consolidated financial statements of the Company as a result of the adoption of SFAS No. 159 since the Company has not elected the fair value option for any eligible items, as defined in SFAS No. 159.

In December 2007, FASB issued Statement of Financial Accounting Standard No. 141 (revised 2007), “Business Combinations”. Statement No. 141R fundamentally changes the manner in which the entity will account for a business combination. This Statement is effective for fiscal years beginning on or after December 15, 2008 and is predominantly prospective. Accordingly, this Statement is effective for the Company for business combinations in which the acquisition date is on or after January 1, 2009.

In December 2007, FASB issued Statement of Financial Accounting Standard No. 160 (“SFAS No. 160”), “Noncontrolling Interests in Consolidated Financial Statements”. SFAS No. 160 changes the measurement, recognition and presentation of minority interests in consolidated subsidiaries. Minority interests will be recharacterized as noncontrolling interests and classified as a component of equity. This Statement also establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary and requires expanded disclosures. This Statement is effective for fiscal years beginning on or after December 15, 2008 and is prospective for the change related to measurement and recognition and retrospective for the changes related to presentation. Accordingly, this Statement is effective for the Company beginning on January 1, 2009. The Company is currently evaluating the impact of the adoption of SFAS No. 160.

33

FORWARD LOOKING STATEMENTS

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 that could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries are detailed in the “Risk Factors” section included under Item 1A. of Part I of this Form 10-K. In addition to the risk factors described in that section, there are other factors that may impact any public company, including ours, which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries. These additional factors include, but are not limited to, the following:

• The economic impact of past and any future terrorist attacks, acts of war or threats thereof and the response of the United States to any such threats and attacks.

• The costs, effects and outcomes of existing or future litigation.

• Changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board.

• The ability of the Company to manage the risks associated with the foregoing as well as anticipated.

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

34

Item 7A. 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 income.

In an attempt to manage its 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. Management also reviews the subsidiary banks’ securities portfolios, formulates investment strategies, and oversees the timing and implementation of transactions to assure attainment of the board’s objectives in the most effective manner. Notwithstanding the Company’s interest rate risk management activities, the potential for changing interest rates is an uncertainty that can have an adverse effect on net income.

In adjusting the Company’s asset/liability position, the board 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 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 over a one year horizon, assuming no balance sheet growth and a 200 basis point upward and a 200 basis point downward shift in interest rates, where interest-bearing assets and liabilities reprice at their earliest possible repricing date. The model assumes a parallel and pro rata shift in interest rates over a twelve-month period. Application of the simulation model analysis at December 31, 2008 demonstrated a 2.30% decrease in interest income with a 200 basis point increase in interest rates. Due to the current interest rate environment, consideration of any downward shift is not realistic; therefore, the Company didn’t formally quantify any risk for downward shifts in interest rates. The simulation is within the board-established policy limit of a 10% decline in value.

Interest rate risk is the most significant market risk affecting the Company. For that reason, the Company engages the assistance of a national consulting firm and their 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.

35

Item 8. Financial Statements

QCR Holdings, Inc.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	37
Financial Statements
Consolidated balance sheets as of December 31, 2008 and 2007	38
Consolidated statements of income for the years ended December 31, 2008, 2007, and 2006	39-40
Consolidated statements of changes in stockholders’ equity for the years ended December 31, 2008, 2007, and 2006	41
Consolidated statements of cash flows for the years ended December 31, 2008, 2007, and 2006	42-43
Notes to consolidated financial statements	44-84

36

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
QCR Holdings, Inc.

We have audited the accompanying consolidated balance sheets of QCR Holdings, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of QCR Holdings, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), QCR Holdings, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 6, 2009 expressed an unqualified opinion on the effectiveness of QCR Holdings, Inc. and subsidiaries’ internal control over financial reporting.

/s/ McGladrey & Pullen, LLP

Davenport, Iowa
March 6, 2009

McGladrey & Pullen, LLP is a member firm of RSM International —
an affiliation of separate and independent legal entities.

37

QCR Holdings, Inc.
and Subsidiaries

Consolidated Balance Sheets
December 31, 2008 and 2007

	2008			2007
Assets
Cash and due from banks	$	33,464,074		$	40,490,000
Federal funds sold		20,695,898			7,985,000
Interest-bearing deposits at financial institutions		2,113,904			5,096,048
Securities held to maturity, at amortized cost		350,000			350,000
Securities available for sale, at fair value (Note 4)		255,726,415			220,207,243
		256,076,415			220,557,243
Loans receivable, held for sale (Note 5)		7,377,648			6,507,583
Loans/leases receivable, held for investment (Note 5)		1,207,311,984			1,050,480,273
		1,214,689,632			1,056,987,856
Less allowance for estimated losses on loans/leases (Note 5)		(17,809,170	)		(11,315,253	)
		1,196,880,462			1,045,672,603
Premises and equipment, net (Note 6)		31,389,267			31,884,153
Goodwill		3,222,688			3,222,688
Accrued interest receivable		7,835,835			7,585,690
Bank-owned life insurance		27,450,751			26,549,614
Assets related to discontinued operations, held for sale (Note 2)		—			68,222,699
Other assets		26,499,720			19,298,604
Total assets	$	1,605,629,014		$	1,476,564,342
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	161,126,120		$	160,533,242
Interest-bearing		897,832,478			723,472,017
Total deposits (Note 7)		1,058,958,598			884,005,259
Short-term borrowings (Note 8)		101,456,950			170,204,021
Federal Home Loan Bank advances (Note 9)		218,695,000			168,815,006
Other borrowings (Note 10)		75,582,634			47,690,122
Junior subordinated debentures (Note 11)		36,085,000			36,085,000
Liabilities related to discontinued operations, held for sale (Note 2)		—			59,061,550
Other liabilities		22,355,661			22,916,909
Total liabilities		1,513,133,843			1,388,777,867
Minority interest in consolidated subsidiaries		1,858,298			1,720,683
Commitments and Contingencies (Note 17)
Stockholders’ Equity (Note 15):
Preferred stock, $1 par value, shares authorized 250,000		568			568
December 2008 - 568 shares issued and outstanding
December 2007 - 568 shares issued and outstanding
Common stock, $1 par value; shares authorized 10,000,000		4,630,883			4,597,744
December 2008 - 4,630,883 shares issued and 4,509,637 outstanding
December 2007 - 4,597,744 shares issued and outstanding
Additional paid-in capital		43,090,268			42,317,374
Retained earnings		40,893,304			36,338,566
Accumulated other comprehensive income		3,628,360			2,811,540
		92,243,383			86,065,792
Treasury stock		1,606,510			—
December 2008 - 121,246 common shares, at cost
December 2007 - 0 common shares, at cost
Total stockholders’ equity		90,636,873			86,065,792
Total liabilities and stockholders’ equity	$	1,605,629,014		$	1,476,564,342

See Notes to Consolidated Financial Statements.

38

QCR Holdings, Inc.
and Subsidiaries

Consolidated Statements of Income
Years Ended December 31, 2008, 2007, and 2006

	2008		2007		2006
Interest and dividend income:
Loans/leases, including fees	$	73,380,950	$	72,445,669	$	60,098,090
Securities:
Taxable		10,878,219		9,060,317		6,995,972
Nontaxable		942,667		1,039,623		914,128
Interest-bearing deposits at financial institutions		165,312		346,382		319,491
Federal funds sold		99,814		248,055		475,345
Total interest and dividend income		85,466,962		83,140,046		68,803,026
Interest expense:
Deposits		23,894,324		31,227,361		27,064,755
Short-term borrowings		2,962,169		5,216,576		3,169,069
Federal Home Loan Bank advances		8,524,772		7,237,026		5,609,114
Other borrowings		2,754,097		1,835,464		574,517
Junior subordinated debentures		2,388,574		2,622,531		2,489,879
Total interest expense		40,523,936		48,138,958		38,907,334
Net interest income		44,943,026		35,001,088		29,895,692
Provision for loan/lease losses (Note 5)		9,221,670		2,335,518		3,284,242
Net interest income after provision for loan/lease losses		35,721,356		32,665,570		26,611,450
Noninterest income:
Credit card fees, net of processing costs		987,769		746,725		963,360
Trust department fees		3,333,812		3,672,501		3,049,440
Deposit service fees		3,134,869		2,606,724		1,928,246
Gains on sales of loans, net		1,068,545		1,219,800		991,536
Securities gains (losses), net		199,500		—		(142,866	)
Gains on sales of foreclosed assets		394,103		1,007		664,223
Gains on sales of other assets		—		435,791		—
Earnings on bank-owned life insurance		1,016,864		846,071		759,100
Investment advisory and management fees, gross		1,975,236		1,575,887		1,216,350
Other		1,500,415		1,745,396		1,569,092
Total noninterest income		13,611,113		12,849,902		10,998,481
Noninterest expenses:
Salaries and employee benefits		26,124,160		21,976,683		20,820,715
Professional and data processing fees		4,801,087		3,469,331		3,154,169
Advertising and marketing		1,296,651		1,115,864		1,354,323
Occupancy and equipment expense		5,091,545		4,717,054		4,714,077
Stationery and supplies		518,639		513,210		635,195
Postage and telephone		933,508		936,032		938,129
Bank service charges		559,614		565,092		583,687
FDIC and other Insurance		1,316,710		995,955		608,559
Loss on sale of premises and equipment		—		223,308		36,305
Other		1,691,775		1,221,446		1,217,429
Total noninterest expenses		42,333,689		35,733,975		34,062,588
Income from continuing operations before income taxes		6,998,780		9,781,497		3,547,343
Federal and state income tax expense from continuing operations		1,735,717		2,893,421		724,555
Income from continuing operations before minority interest in net income of consolidated subsidiaries		5,263,063		6,888,076		2,822,788
Minority interest in income of consolidated subsidiaries		288,436		387,791		265,524
Income from continuing operations	$	4,974,627	$	6,500,285	$	2,557,264

(Continued)

39

QCR Holdings, Inc.
and Subsidiaries

Consolidated Statements of Income
Years Ended December 31, 2008, 2007, and 2006

	2008			2007			2006
Discontinued Operations (Note 2)
Operating income from merchant credit card acquiring business		361,160			409,569			378,228
Gain on sale of merchant credit card acquiring business		4,645,213			—			—
Operating loss from First Wisconsin Bank & Trust		(2,921,371	)		(1,630,105	)		—
Gain on sale of First Wisconsin Bank & Trust		494,664			—			—
Income (loss) from discontinued operations before income taxes		2,579,666			(1,220,536	)		378,228
Federal and state income tax expense (benefit) from discontinued operations		845,435			(497,728	)		133,287
Income (loss) from discontinued operations	$	1,734,231		$	(722,808	)	$	244,941
Net Income	$	6,708,858		$	5,777,477		$	2,802,205
Less: preferred stock dividends		1,784,500			1,072,000			164,373
Net income available to common stockholders	$	4,924,358		$	4,705,477		$	2,637,832
Basic earnings per common share (Note 16):
Income from continuing operations	$	0.69		$	1.19		$	0.52
Income (loss) from discontinued operations		0.38			(0.16	)		0.05
Net income	$	1.07		$	1.03		$	0.57
Diluted earnings per common share (Note 16):
Income from continuing operations	$	0.69		$	1.18		$	0.52
Income (loss) from discontined operations		0.37			(0.16	)		0.05
Net income	$	1.06		$	1.02		$	0.57
Weighted average common shares outstanding		4,617,057			4,581,919			4,609,626
Weighted average common and common equivalent shares outstanding		4,634,537			4,599,568			4,653,229
Cash dividends declared per common share	$	0.08		$	0.08		$	0.08

See Notes to Consolidated Financial Statements.

40

QCR Holdings, Inc.
and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity
Years Ended December 31, 2008, 2007, and 2006

												Accumulated
						Additional						Other
	Preferred		Common			Paid-In			Retained			Comprehensive			Treasury
	Stock		Stock			Capital			Earnings			Income (Loss)			Stock			Total
Balance, December 31, 2005	$	—	$	4,531,224		$	20,776,254		$	29,726,700		$	(567,479	)	$	—		$	54,466,699
Comprehensive income:
Net income		—		—			—			2,802,205			—			—			2,802,205
Other comprehensive income, net of tax (Note 3)		—		—			—			—			595,438			—			595,438
Comprehensive income																			3,397,643
Common cash dividends declared, $0.08 per share		—		—			—			(364,319	)		—			—			(364,319	)
Preferred cash dividends declared		—		—			—			(164,373	)		—			—			(164,373	)
Proceeds from issuance of 268 shares of preferred stock		268		—			12,884,146			—			—			—			12,884,414
Proceeds from issuance of 14,552 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan (Note 14)		—		14,552			223,901			—			—			—			238,453
Proceeds from issuance of 16,221 shares of common stock as a result of stock options exercised (Note 14)		—		16,221			109,522			—			—			—			125,743
Exchange of 1,368 shares of common stock in connection with options exercised		—		(1,368	)		(23,458	)		—			—			—			(24,826	)
Tax benefit of nonqualified stock options exercised		—		—			37,795			—			—			—			37,795
Stock-based compensation expense		—		—			285,351			—			—			—			285,351
Balance, December 31, 2006	$	268	$	4,560,629		$	34,293,511		$	32,000,213		$	27,959		$	—		$	70,882,580
Comprehensive income:
Net income		—		—			—			5,777,477			—			—			5,777,477
Other comprehensive income, net of tax (Note 3)		—		—			—			—			2,783,581			—			2,783,581
Comprehensive income																			8,561,058
Common cash dividends declared, $0.08 per share		—		—			—			(367,124	)		—			—			(367,124	)
Preferred cash dividends declared		—		—			—			(1,072,000	)		—			—			(1,072,000	)
Proceeds from issuance of 300 shares of preferred stock		300		—			7,273,279			—			—			—			7,273,579
Proceeds from issuance of 19,834 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan (Note 14)		—		19,834			259,054			—			—			—			278,888
Proceeds from issuance of 19,069 shares of common stock as a result of stock options exercised (Note 14)		—		19,069			154,007			—			—			—			173,076
Exchange of 1,788 shares of common stock in connection with options exercised		—		(1,788	)		(28,643	)		—			—			—			(30,431	)
Tax benefit of nonqualified stock options exercised		—		—			22,370			—			—			—			22,370
Stock-based compensation expense		—		—			343,796			—			—			—			343,796
Balance, December 31, 2007	$	568	$	4,597,744		$	42,317,374		$	36,338,566		$	2,811,540		$	—		$	86,065,792
Comprehensive income:
Net income		—		—			—			6,708,858			—			—			6,708,858
Other comprehensive income, net of tax (Note 3)		—		—			—			—			816,820			—			816,820
Comprehensive income																			7,525,678
Common cash dividends declared, $0.08 per share		—		—			—			(369,620	)		—			—			(369,620	)
Preferred cash dividends declared		—		—			—			(1,784,500	)		—			—			(1,784,500	)
Proceeds from issuance of 22,767 shares of common stock as a result of stock purchased under the Employee Stock Purchase Plan (Note 14)		—		22,767			246,037			—			—			—			268,804
Proceeds from issuance of 7,305 shares of common stock as a result of stock options exercised		—		7,305			82,410			—			—			—			89,715
Exchange of 1,933 shares of common stock in connection with options exercised (Note 14)		—		(1,933	)		(27,284	)		—			—			—			(29,217	)
Tax benefit of nonqualified stock options exercised		—		—			1,611			—			—			—			1,611
Stock-based compensation expense		—		—			475,120			—			—			—			475,120
Restricted stock award		—		5,000			(5,000	)		—			—			—			—
Purchase of 121,246 shares of common stock for the treasury		—		—			—			—			—			(1,606,510	)		(1,606,510	)
Balance, December 31, 2008	$	568	$	4,630,883		$	43,090,268		$	40,893,304		$	3,628,360		$	(1,606,510	)	$	90,636,873

See Notes to Consolidated Financial Statements.

41

QCR Holdings, Inc.
and Subsidiaries

Consolidated Statements of Cash Flows
Years Ended December 31, 2008, 2007, and 2006

	2008			2007			2006
Cash Flows from Operating Activities:
Net income	$	6,708,858		$	5,777,477		$	2,802,205
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,624,433			2,293,874			2,395,174
Provision for loan/lease losses related to continuing operations		9,221,670			2,335,518			3,284,242
Provision for loan/lease losses related to discontinuing operations		1,699,112			528,384			—
Deferred income taxes		(1,816,719	)		472,393			(394,934	)
Amortization of offering costs on subordinated debentures		14,317			14,317			14,317
Stock-based compensation expense		298,921			21,348			171,125
Minority interest in income of consolidated subsidiaries		288,436			387,791			265,524
Gain on sale of foreclosed assets		(394,103	)		(1,007	)		(664,223	)
Gains on sale of other assets		—			(435,791	)		—
Gain on sale of merchant credit card acquiring business		(4,645,213	)		—			—
Gain on sale of First Wisconsin Bank & Trust		(494,664	)		—			—
Amortization of premiums (accretion of discounts) on securities, net		133,819			(92,868	)		252,457
Investment securities (gains) losses, net		(199,500	)		—			142,866
Loans originated for sale		(88,775,395	)		(103,958,168	)		(87,721,100	)
Proceeds on sales of loans		88,975,272			104,860,392			85,161,720
Net gains on sales of loans		(1,068,545	)		(1,219,800	)		(991,536	)
Net loss on sale of premises and equipment		—			223,308			36,305
Increase in accrued interest receivable		(350,007	)		(804,259	)		(2,310,920	)
Increase in other assets		(3,130,898	)		(3,524,814	)		(819,095	)
(Decrease) increase in other liabilities		(2,810,645	)		3,185,676			5,560,811
Net cash provided by operating activities		6,279,149			10,063,771			7,184,938
Cash Flows from Investing Activities:
Net (increase) decrease in federal funds sold		(31,775,898	)		(4,300,000	)		2,130,000
Net decrease (increase) in interest-bearing deposits at financial institutions		2,980,577			(2,965,952	)		(859,430	)
Proceeds from sale of foreclosed assets		1,376,007			93,901			1,220,942
Proceeds from sale of other assets		—			500,000			—
Proceeds from sale of merchant credit card acquiring business, net		4,732,009			—			—
Proceeds from sale of First Wisconsin Bank & Trust, net		13,324,553			—			—
Activity in securities portfolio:
Purchases		(140,985,829	)		(129,121,827	)		(79,759,340	)
Calls, maturities and redemptions		102,733,654			92,041,150			62,386,012
Paydowns		736,057			562,361			705,794
Sales		285,000			—			4,786,122
Activity in bank-owned life insurance:
Purchases		—			(9,119,017	)		(750,766	)
Increase in cash value		(1,001,336	)		(892,395	)		(759,100	)
Net loans/leases originated and held for investment		(195,569,104	)		(147,780,355	)		(202,624,972	)
Purchase of premises and equipment		(2,258,536	)		(2,261,028	)		(9,334,578	)
Purchase of intangible asset		—			(887,542	)		—
Net increase in cash related to discontinued operations, held for sale		(1,789,295	)		(705,890	)		—
Net cash used in investing activities		(247,212,141	)		(204,836,594	)		(222,859,316	)

(Continued)

42

QCR Holdings, Inc.
and Subsidiaries

Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 2008, 2007, and 2006

	2008			2007			2006
Cash Flows from Financing Activities:
Net increase in deposit accounts	$	227,545,345		$	53,979,951		$	176,943,368
Net (decrease) increase in short-term borrowings		(68,160,318	)		71,511,889			4,214,100
Activity in Federal Home Loan Bank advances:
Advances		68,145,000			71,400,000			61,500,000
Payments		(18,265,006	)		(54,443,743	)		(39,642,105	)
Net increase (decrease) in other borrowings		27,892,512			43,928,486			(7,003,278	)
Proceeds from issuance of junior subordinated debentures		—			—			10,310,000
Tax benefit of nonqualified stock options exercised		1,611			22,370			37,795
Payment of cash dividends		(1,974,870	)		(1,334,012	)		(363,143	)
Proceeds from issuance of preferred stock, net		—			7,273,579			12,884,414
Proceeds from issuance of common stock, net		329,302			421,533			339,370
Purchase of treasury stock		(1,606,510	)		—			—
Net cash provided by financing activities		233,907,066			192,760,053			219,220,521
Net (decrease) increase in cash and due from banks		(7,025,926	)		(2,012,770	)		3,546,143
Cash and due from banks, beginning		40,490,000			42,502,770			38,956,627
Cash and due from banks, ending	$	33,464,074		$	40,490,000		$	42,502,770
Supplemental Disclosures of Cash Flow Information, cash payments for:
Interest	$	40,526,554		$	49,277,295		$	36,621,518
Income and franchise taxes		2,306,448			1,960,408			1,496,155
Supplemental Schedule of Noncash Investing Activities:
Change in accumulated other comprehensive income, unrealized gaines on securities available for sale, net		816,820			2,783,581			595,438
Exchange of shares of common stock in connection with options exercised		(29,217	)		(30,431	)		(24,826	)
Transfers of loans to other real estate owned		4,467,520			496,376			129,895
Proceeds from sale of First Wisconsin Bank & Trust, net	$	13,324,553		$	—		$	—
Assets sold:
Cash and due from banks		2,495,185			—			—
Federal funds sold		17,700,000			—			—
Interest-bearing deposits at financial institutions		1,567			—			—
Securities available for sale, at fair value		18,460,320			—			—
Loans/leases receivable held for investment		80,169,171			—			—
Less: Allowance for estimated losses on loans/leases		(1,122,496	)		—			—
Premises and equipment, net		468,522			—			—
Goodwill		—			—			—
Intangilbe assets		887,542			—			—
Accrued interest receivable		478,729			—			—
Bank-owned life insurance		2,453,660			—			—
Other assets		882,028			—			—
Total Assets	$	122,874,228		$	—		$	—
Liabilities sold:
Noninteresting-bearing deposits	$	8,943,882		$	—		$	—
Interest-bearing deposits		89,070,083			—			—
Short-term borrowings		13,578,572			—			—
Other liabilities		(368,528	)		—			—
Total liabilities	$	111,224,009		$	—		$	—
Accrued expenses related to sale of First Wisconsin Bank & Trust		1,179,670			—			—
Gain on sale of First Wisconsin Bank & Trust	$	494,664		$	—		$	—

See Notes to Consolidated Financial Statements.

43

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies

Nature of business:

QCR Holdings, Inc. (the Company) is a bank holding company providing bank and bank related services through its subsidiaries, Quad City Bank and Trust Company (Quad City Bank & Trust), Cedar Rapids Bank and Trust Company (Cedar Rapids Bank & Trust), Rockford Bank and Trust Company (Rockford Bank & Trust), Quad City Bancard, Inc. (Bancard), m2 Lease Funds, LLC (m2 Lease Funds), Velie Plantation Holding Company, LLC (Velie Plantation Holding Company), QCR Holdings Statutory Trust II (Trust II), QCR Holdings Statutory Trust III (Trust III), QCR Holdings Statutory Trust IV (Trust IV), and QCR Holdings Statutory Trust V (Trust V). Quad City Bank & Trust is a commercial bank that serves the Iowa and Illinois Quad Cities and adjacent communities. Cedar Rapids Bank & Trust is a commercial bank that serves Cedar Rapids, Iowa, and adjacent communities. Rockford Bank & Trust is a commercial bank that serves Rockford, Illinois, and adjacent communities.

Quad City Bank & Trust and Cedar Rapids Bank & Trust are chartered and regulated by the state of Iowa, and Rockford Bank & Trust is chartered and regulated by the state of Illinois. All three subsidiary banks are insured and subject to regulation by the Federal Deposit Insurance Corporation (FDIC), and are members of and regulated by the Federal Reserve System. Bancard conducts the Company’s credit card issuing operation and is regulated by the Federal Reserve System. m2 Lease Funds, which is an 80% owned subsidiary, based in the Milwaukee, Wisconsin, area is engaged in the business of direct financing lease contracts. Velie Plantation Holding Company, LLC, which is a 55.6% owned subsidiary, is engaged in holding the real estate property known as the Velie Plantation Mansion in Moline, Illinois. Trust II, Trust III, Trust IV and Trust V were formed for the purpose of issuing various trust preferred securities (see Note 11).

During the year, Bancard sold its merchant credit card acquiring business. The current and comparative results related to the merchant credit card acquiring business have been reflected as discontinued operations (see Note 2).

On December 31, 2008, the Company sold its Wisconsin-chartered bank, First Wisconsin Bank & Trust Company (First Wisconsin Bank & Trust). The current and comparative results related to First Wisconsin Bank & Trust have been reflected as discontinued operations (see Note 2).

Significant accounting policies:

Accounting estimates: The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance for estimated losses on loans/leases is inherently subjective as it requires material estimates that are susceptible to significant change. The fair value of financial instruments is an estimate that can be computed within a range.

Principles of consolidation: The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, except Trust II, Trust III, Trust IV and Trust V, which do not meet the criteria for consolidation. All material intercompany accounts and transactions have been eliminated in consolidation. The results of discontinued operations have been reported separately in the consolidated financial statements and the previously reported financial statements have been reclassified.

Presentation of cash flows: For purposes of reporting cash flows, cash and due from banks include cash on hand and non-interest bearing amounts due from banks. Cash flows from federal funds sold, interest bearing deposits at financial institutions, loans/leases, deposits, and short-term and other borrowings are treated as net increases or decreases.

44

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

Cash and due from banks: The subsidiary banks are required by federal banking regulations to maintain certain cash and due from bank reserves. The reserve requirement was approximately $250,000 and $667,000 as of December 31, 2008 and 2007, respectively.

Investment securities: Investment securities held to maturity are those debt securities that the Company has the ability and intent to hold until maturity regardless of changes in market conditions, liquidity needs, or changes in general economic conditions. Such securities are carried at cost adjusted for amortization of premiums and accretion of discounts. If the ability or intent to hold to maturity is not present for certain specified securities, such securities are considered available for sale as the Company intends to hold them for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other factors. Securities available for sale are carried at fair value. Unrealized gains or losses, net of taxes, are reported as increases or decreases in accumulated other comprehensive income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings.

Management evaluates securities for other-than-temporary impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans receivable, held for sale: Residential real estate loans which are originated and intended for resale in the secondary market in the foreseeable future are classified as held for sale. These loans are carried at the lower of cost or estimated market value in the aggregate. As assets specifically acquired for resale, the origination of, disposition of, and gain/loss on these loans are classified as operating activities in the statement of cash flows.

Loans receivable, held for investment: Loans that management has the intent and ability to hold for the foreseeable future, or until pay-off or maturity occurs, are classified as held for investment. These loans are stated at the amount of unpaid principal adjusted for charge-offs, the allowance for estimated losses on loans, and any deferred fees and/or costs on originated loans. Interest is credited to earnings as earned based on the principal amount outstanding. Deferred direct loan origination fees and/or costs are amortized as an adjustment of the related loan’s yield. As assets held for and used in the production of services, the origination and collection of these loans are classified as an investing activity in the statement of cash flows.

When collection of loan payments is considered doubtful, income recognition is ceased and the loan receivable is placed on nonaccrual status. Previously recorded but uncollected amounts of interest on nonaccrual loans are reversed at the time the loan is placed on nonaccrual status. Cash collected on nonaccrual loans is recorded as income unless the principal is doubtful of collection in which case cash received is applied to principal.

45

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

Direct finance leases receivable, held for investment: The Company leases machinery and equipment to customers under leases that qualify as direct financing leases for financial reporting and as operating leases for income tax purposes. Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the estimated unguaranteed residual values (approximately 3% to 15% of the cost of the related equipment), are recorded as lease receivables when the lease is signed and the lease property delivered to the customer. The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income. Unearned lease income is recognized over the term of the lease on a basis that results in an approximate level rate of return on the unrecovered lease investment. Lease income is recognized on the interest method. Residual is the estimated fair market value of the equipment on lease at lease termination. In estimating the equipment’s fair value at lease termination, the Company relies on historical experience by equipment type and manufacturer and, where available, valuations by independent appraisers, adjusted for known trends. The Company’s estimates are reviewed continuously to ensure reasonableness; however, the amounts the Company will ultimately realize could differ from the estimated amounts.

When collection of lease payments is considered doubtful, income recognition is ceased and the lease receivable is placed on nonaccrual status. Previously recorded but uncollected amounts of interest on nonaccrual leases are reversed at the time the lease is placed on nonaccrual status. Cash collected on nonaccrual leases is recorded as income unless the principal is doubtful of collection in which case cash received is applied to principal.

The Company defers and amortizes fees and certain incremental direct costs over the contractual term of the lease as an adjustment to the yield. These initial direct leasing costs generally approximate 4% of the leased asset’s cost. The unamortized direct costs are recorded as a reduction of unearned lease income.

Allowance for estimated losses on loans/leases: The allowance for estimated losses on loans/leases is maintained at the level considered adequate by management of the Company and the subsidiaries to provide for losses that are probable. The allowance is increased by provisions charged to expense and reduced by net charge-offs. In determining the adequacy of the allowance, the Company, the subsidiary banks, and m2 Lease Funds consider the overall composition of the loan/lease portfolio. Loans/leases which have identified weaknesses are classified into higher risk groups, or are identified for continued monitoring. Historical loss percentages are then applied to various classifications and, considering economic conditions and other factors that in management’s judgment deserve evaluation, additional loss amounts are added.

Loans/leases are considered impaired when, based on current information and events, it is probable the Company and the bank involved will not be able to collect all amounts due. The portion of the allowance for loan/lease losses applicable to an impaired loan/lease is computed based on the present value of the estimated future cash flows of interest and principal discounted at the loan’s/lease’s effective interest rate or on the fair value of the collateral for collateral dependent loans/leases. The entire change in present value of expected cash flows of impaired loans/leases is reported as bad debt expense in the same manner in which impairment initially was recognized or as a reduction in the amount of bad debt expense that otherwise would be reported. The Company and subsidiaries recognize interest income on impaired loans/leases on a cash basis.

Credit related financial instruments: In the ordinary course of business, the Company has entered into commitments to extend credit and standby letters of credit. Such financial instruments are recorded when they are funded.

Transfers of financial assets: Transfers of financial assets are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the assets it received, and no condition both constrains the transferee from taking advantage of its right to pledge or exchange and provides more than a modest benefit to the transferor, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

46

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

Premises and equipment: Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the assets.

Goodwill: The Company has recorded goodwill from the purchase of 80% of m2 Lease Funds. In accordance with the provisions of FAS Statement No. 142, goodwill is not being amortized, but is evaluated at least annually for impairment. An impairment charge is recognized when the calculated fair value of the reporting unit, including goodwill, is less than its carrying amount. Based on the annual analysis completed as of July 31, 2008, the Company believes that no goodwill impairment existed.

Bank-owned life insurance: Bank-owned life insurance is carried at cash surrender value with increases/decreases reflected as income/expense in the statement of income.

Assets and liabilities related to discontinued operations, held for sale: Assets and liabilities related to discontinued operations are carried at the lower of cost or estimated market value in the aggregate. See Note 2 for further information.

Foreclosed assets: Assets acquired through, or in lieu of, loan foreclosures, which are included in other assets on the consolidated balance sheets are held for sale and are recorded at the lower of cost or fair value. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell.

Preferred Stock: The shares of Series B Non-Cumulative Perpetual Preferred Stock (“Series B Preferred Stock”) have a stated dividend rate of 8.00%. Dividends are not accrued and are payable only if declared and no dividends may be declared on the Company’s common stock unless and until dividends have been declared on the outstanding shares of Series B Preferred Stock. The Company has the right at any other time after the first anniversary of the issuance of the shares of Series B Preferred Stock, subject to all required regulatory approvals, to redeem all, but not less than all, of the shares then outstanding. Any such redemption shall be made by the Company upon at least 30 days’ prior written notice. The shares can redeemed for an amount per share in cash which is equal to: (i) the sum of (A) $50,000; plus (B) a premium in the amount of $4,000 multiplied by a fraction the numerator of which is the total number of calendar days the shares being redeemed have been outstanding and the denominator of which is 365; but (ii) less the aggregate amount of any dividends that have been paid on the shares. The Series B Preferred Stock was not registered under the Securities Act of 1933 (the “Act”) and was issued pursuant to an exemption from registration under Regulation D of the rules promulgated under the Act.

The shares of Series C Non-Cumulative Perpetual Preferred Stock (“Series C Preferred Stock”) have a stated dividend rate of 9.50%. Dividends are not accrued and are payable only if declared and no dividends may be declared on the Company’s common stock unless and until dividends have been declared on the outstanding shares of Series C Preferred Stock. The Company has the right at any other time after the first anniversary of the issuance of the shares of Series C Preferred Stock, subject to all required regulatory approvals, to redeem all, but not less than all, of the shares then outstanding. Any such redemption shall be made by the Company upon at least 30 days’ prior written notice. The shares shall be redeemed for an amount per share in cash which is equal to: (i) the sum of (A) $25,000; plus (B) a premium in the amount of $2,375 multiplied by a fraction the numerator of which is the total number of calendar days the shares being redeemed have been outstanding and the denominator of which is 365; but (ii) less the aggregate amount of any dividends that have been paid on the shares. The Series C Preferred Stock was not registered under the Securities Act of 1933 (the “Act”) and was issued pursuant to an exemption from registration under Regulation D of the rules promulgated under the Act.

On February 13, 2009, the Company issued Series D Cumulative Perpetual Preferred Stock (“Series D Preferred Stock”). See Note 23 for a full description.

47

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

Treasury Stock: Treasury stock is accounted for by the cost method, whereby shares of common stock reacquired are recorded at their purchase price. When treasury stock is reissued, any difference between the sales proceeds, or fair value when issued for business combinations, and the cost is recognized as a charge or credit to capital surplus.

Stock-based compensation plans: At December 31, 2008, the Company had three stock-based employee compensation plans, which are described more fully in Note 14.

The Company accounts for stock-based compensation in accordance with Statement of Financial Acconting Standards No. 123R, “Share-Based Payment”, (“SFAS No. 123R”). SFAS No. 123R requires measurement of compensation cost for all stock-based awards at fair value on the grant date and recognition of compensation over the requisite service period for awards expected to vest.

During the years ended December 31, 2008, 2007, and 2006, the Company recognized additional stock-based compensation expense related to stock options, stock purchases, and SARs of $299,000, $21,000, and $171,000, respectively. As required by SFAS 123R, management made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option grants with the following assumptions for the indicated periods:

	2008	2007	2006
Dividend yield	0.49% to 0.68%	0.46% to 0.53%	0.42% to 0.48%
Expected volatility	23.58% to 25.13%	24.33% to 24.74%	24.46% to 26.55%
Risk-free interest rate	3.27% to 4.34%	4.53% to 5.06%	4.47% to 5.26%
Expected life of option grants	6 years	6 years	6 years
Weighted-average grant date fair value	$5.05	$5.80	$6.48

The Company also uses the Black-Scholes option pricing model to estimate the fair value of stock purchase grants with the following assumptions for the indicated periods:

	2008	2007	2006
Dividend yield	0.56% to 0.64%	0.45% to 0.50%	0.41% to 0.46%
Expected volatility	19.40% to 23.91%	13.98% to 17.80%	10.93% to 13.06%
Risk-free interest rate	1.98% to 3.41%	4.94% to 5.04%	4.17% to 5.21%
Expected life of option grants	3 to 6 months	3 to 6 months	3 to 6 months
Weighted-average grant date fair value	$2.00	$2.36	$2.44

48

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

The fair value is amortized on a straight-line basis over the vesting periods of the grants and will be adjusted for subsequent changes in estimated forfeitures. The expected dividend yield assumption is based on the Company’s current expectations about its anticipated dividend policy. Expected volatility is based on historical volatility of the Company’s common stock price. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of grants is derived using the “simplified” method as allowed under the provisions of the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107 (SAB 107) and No. 110 (SAB 110) and represents the period of time that options are expected to be outstanding. Historical data is used to estimate forfeitures used in the model. Two separate groups of employees (employees subject to broad based grants, and executive employees and directors) are used.

As of December 31, 2008, there was $806,468 of unrecognized compensation cost related to share based payments, which is expected to be recognized over a weighted average period of 2.64 years.

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for the 77,966 options that were in-the-money at December 31, 2008. The aggregate intrinsic value at December 31, 2008 was $166,509 on both options outstanding and options exercisable. During the years ended December 31, 2008, 2007, and 2006, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $19,352, $142,817, and $159,349, respectively, determined as of the date of the option exercise.

Income taxes: The Company files its tax return on a consolidated basis with its subsidiaries. The entities follow the direct reimbursement method of accounting for income taxes under which income taxes or credits which result from the inclusion of the subsidiaries in the consolidated tax return are paid to or received from the parent company.

Deferred income taxes are provided under the liability method whereby deferred tax assets are recognized for deductible temporary differences and net operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income.

Trust assets: Trust assets held by the subsidiary banks in a fiduciary, agency, or custodial capacity for their customers, other than cash on deposit at the subsidiary banks, are not included in the accompanying consolidated financial statements since such items are not assets of the subsidiary banks.

49

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

Earnings per common share: Basic earnings per share is computed by dividing net income, less preferred stock dividends declared, by the weighted average number of common stock shares outstanding for the respective period. Diluted earnings per share is computed by dividing net income, less preferred stock dividends declared, by the weighted average number of common stock and common stock equivalents outstanding for the respective period.

Reclassifications: Certain amounts in the prior year financial statements have been reclassified, with no effect on net income or stockholders’ equity, to conform with the current period presentation. All applicable information as of and for the years ended December 31, 2007 and 2006 has been reclassified for discontinued operations comparative purposes.

New Industry Developments: On October 14, 2008, using the systemic risk exception to the FDIC Improvement Act of 1991, the United States Treasury authorized the FDIC to provide a 100% guarantee of newly-issued senior unsecured debt and deposits in non-interest bearing accounts at FDIC insured institutions. Initially, all eligible financial institutions were automatically covered under this program, known as the Temporary Liquidity Gurantee Program, without incurring any fees for a period of 30 days. Coverage under the Temporary Liquidity Guarantee Program after the initial 30-day period was available to insured financial institutions at a cost based on a tiered structure by maturity date for the senior unsecured debt, and 10 basis points per annum for the non-interest bearing deposits. After this initial 30-day period, institutions continued to be covered under the Temporary Liquidity Guarantee Program unless they informed the FDIC that they have decided to opt out of the program. Upon formal resolution by the Board of Directors, the Company opted in and is participating in the Temporary Liquidity Guarantee Program.

New Accounting Pronouncements: In September 2006, FASB issued Statement of Financial Accounting Standard No. 157 (“SFAS No. 157”), “Fair Value Measurements,” which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. In February 2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157, which permits a one-year deferral for the implementation of SFAS No. 157 with regard to nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis. The Company adopted SFAS No. 157 for the fiscal year beginning January 1, 2008, except for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis for which delayed application is permitted until our fiscal year beginning January 1, 2009. The adoption of the remaining provisions of SFAS No. 157 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. See Note 22 for additional information regarding SFAS No. 157 and its impact on the Company’s consolidated financial statements.

In February of 2007, FASB issued Statement of Financial Accounting Standard No. 159 (“SFAS No. 159”), “The Fair Value Option for Financial Assets and Financial Liabilities”, which gives entities the option to measure eligible financial assets and financial liabilities at fair value on an instrument by instrument basis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available for eligible items that exist on the date that a company adopts SFAS No. 159 or when an entity first recognizes a financial asset or financial liability. The decision to elect the fair value option for an eligible item is irrevocable. Subsequent changes in fair value must be recorded in earnings. This Statement was effective as of the beginning of a company’s first fiscal year after November 15, 2007. The Statement offered early adoption provisions that the Company elected not to exercise. There was no impact on the consolidated financial statements of the Company as a result of the adoption of SFAS No. 159 since the Company has not elected the fair value option for any eligible items, as defined in SFAS No. 159.

50

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (Continued)

In December 2007, FASB issued Statement of Financial Accounting Standard No. 141 (revised 2007), “Business Combinations”. Statement No. 141R fundamentally changes the manner in which the entity will account for a business combination. This Statement is effective for fiscal years beginning on or after December 15, 2008 and is predominantly prospective. Accordingly, this Statement is effective for the Company for business combinations in which the acquisition date is on or after January 1, 2009.

In December 2007, FASB issued Statement of Financial Accounting Standard No. 160 (“SFAS No. 160”), “Noncontrolling Interests in Consolidated Financial Statements”. SFAS No. 160 changes the measurement, recognition and presentation of minority interests in consolidated subsidiaries. Minority interests will be recharacterized as noncontrolling interests and classified as a component of equity. This Statement also establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary and requires expanded disclosures. This Statement is effective for fiscal years beginning on or after December 15, 2008 and is prospective for the change related to measurement and recognition and retrospective for the changes related to presentation. Accordingly, this Statement is effective for the Company beginning on January 1, 2009. The Company is currently evaluating the impact of the adoption of SFAS No. 160.

Note 2. Discontinued Operations

Sale of Merchant Credit Card Acquiring Business. On August 29, 2008, the Company’s subsidiary, Quad City Bancard, Inc., sold its merchant credit card acquiring business for $5.2 million and recorded an after-tax gain of approximately $3.0 million. Consequently, the business related to merchant credit card acquiring has been accounted for as discontinued operations. The assets and liabilities related to the merchant credit card acquiring business were not significant as of December 31, 2008 and as of December 31, 2007.

The results from discontinued operations of the merchant credit card acquiring business for the years ending December 31, 2008, 2007 and 2006 are presented in the following table:

	2008		2007		2006
Credit card fees, net of processing costs	$	693,445	$	985,267	$	984,624
Non-interest expense		332,285		575,698		606,396
Income from discontinued operations, excluding gain on sale, before income taxes	$	361,160	$	409,569	$	378,228
Gain on sale of discontinued operations before income taxes		4,645,213		—		—
Income from discontinued operations, before income taxes	$	5,006,373	$	409,569	$	378,228
Income tax expense		1,775,716		144,963		133,287
Income from discontinued operations, net of taxes	$	3,230,657	$	264,606	$	244,941

Sale of First Wisconsin Bank & Trust. On December 31, 2008, the Company sold First Wisconsin Bank & Trust, its wholly-owned commercial banking subsidiary which served the Milwaukee, Wisconsin market. The transaction involved the sale of 100% of the stock of First Wisconsin Bank & Trust for $13.7 million and resulted in a pre-tax gain on sale of approximately $495,000. The activity related to First Wisconsin Bank & Trust is accounted for as discontinued operations. The Company added First Wisconsin Bank & Trust as its fourth charter effective February 20, 2007; as a result there is no activity to report for the year ended December 31, 2006.

51

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 2. Discontinued Operations (Continued)

The assets and liabilities of the discontinued operations consisted of the following as of December 31, 2007:

	As of
	December 31, 2007
Assets:
Cash and cash equivalents	$	705,890
Securities available for sale, at fair value		15,347,410
Loans receivable, net		49,203,667
Other assets		2,965,732
Assets related to discontinued operations, held for sale	$	68,222,699
Liabilities:
Deposits	$	45,421,959
Short-term borrowings		12,991,819
Other liabilities		647,772
Liabilities related to discontinued operations, held for sale	$	59,061,550

The assets and liabilities of First Wisconsin Bank & Trust as of December 31, 2008 are presented as a supplemental disclosure in the Consolidated Statement of Cash Flows.

The results from discontinued operations of First Wisconsin Bank & Trust for the years ending December 31, 2008 and 2007 are presented in the following table:

	2008			2007
Interest income	$	5,292,678		$	2,584,994
Interest expense		2,853,182			1,217,136
Net interest income		2,439,496			1,367,858
Provision for loan losses		1,699,112			528,384
Net interest income after provision for loan losses		740,384			839,474
Noninterest income		515,432			257,807
Noninterest expense		4,177,187			2,727,386
Loss from discontinued operations, excluding gain on sale, before income taxes		(2,921,371	)		(1,630,105	)
Gain on sale of discontinued operations before income taxes		494,664			—
		(2,426,707	)		(1,630,105	)
Income tax benefit		(930,281	)		(642,691	)
Loss from discontinued operations, net of taxes	$	(1,496,426	)	$	(987,414	)

52

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Comprehensive Income

Comprehensive income is the total of net income and other comprehensive income, which for the Company is comprised entirely of unrealized gains and losses on securities available for sale.

Other comprehensive income for the years ended December 31, 2008, 2007, and 2006 is comprised as follows:

				Tax
	Before			Expense			Net
	Tax			(Benefit)			of Tax
Year ended December 31, 2008:
Unrealized gains on securities available for sale:
Unrealized holding gains arising during the period	$	1,100,541		$	154,046		$	946,495
Less reclassification adjustment for gains included in net income		199,500			69,825			129,675
Other comprehensive income	$	901,041		$	84,221		$	816,820
Year ended December 31, 2007:
Unrealized gains on securities available for sale:
Unrealized holding gains arising during the period	$	4,519,576		$	1,735,995		$	2,783,581
Less reclassification adjustment for gains included in net income		—			—			—
Other comprehensive income	$	4,519,576		$	1,735,995		$	2,783,581
Year ended December 31, 2006:
Unrealized gains on securities available for sale:
Unrealized holding gains arising during the period	$	780,219		$	276,937		$	503,282
Less reclassification adjustment for (losses) included in net income		(142,866	)		(50,710	)		(92,156	)
Other comprehensive income	$	923,085		$	327,647		$	595,438

53

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 4. Investment Securities

The amortized cost and fair value of investment securities as of December 31, 2008 and 2007 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
December 31, 2008:
Securities held to maturity, other bonds	$	350,000	$	—	$	—		$	350,000
Securities available for sale:
U.S. Treasury securities	$	4,318,194	$	71,351	$	—		$	4,389,545
U.S. govt. sponsored agency securities		220,560,286		5,773,091		(90,217	)		226,243,160
Mortgage-backed securities		802,485		6,071		(1,417	)		807,139
Municipal securities		23,259,460		307,946		(219,181	)		23,348,225
Trust preferred securities		200,000		—		(35,000	)		165,000
Other securities		1,132,763		18,045		(377,462	)		773,346
	$	250,273,188	$	6,176,504	$	(723,277	)	$	255,726,415
December 31, 2007:
Securities held to maturity, other bonds	$	350,000	$	—	$	(278	)	$	349,722
Securities available for sale:
U.S. Treasury securities	$	3,303,637	$	59,099	$	—		$	3,362,736
U.S. govt. sponsored agency securities		182,680,532		3,717,645		(28,083	)		186,370,094
Mortgage-backed securities		1,599,905		5,842		(7,807	)		1,597,940
Municipal securities		25,119,113		490,081		(38,897	)		25,570,297
Corporate securities		1,864,726		11,942		—			1,876,668
Trust preferred securities		200,000		—		(200	)		199,800
Other securities		1,201,325		64,291		(35,908	)		1,229,708
	$	215,969,238	$	4,348,900	$	(110,895	)	$	220,207,243

54

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 4. Investment Securities (Continued)

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2008 and 2007, 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
December 31, 2008:
Securities available for sale:
U.S. govt. sponsored agency securities	$	8,003,720	$	(90,217	)	$	—	$	—		$	8,003,720	$	(90,217	)
Mortgage-backed securities		630,974		(1,417	)		—		—			630,974		(1,417	)
Municipal securities		8,001,415		(219,181	)		—		—			8,001,415		(219,181	)
Corporate securities		—		—			—		—			—		—
Trust preferred securities		165,000		(35,000	)		—		—			165,000		(35,000	)
Other securities		84,264		(57,316	)		407,630		(320,146	)		491,894		(377,462	)
Total Portfolio	$	16,885,373	$	(403,131	)	$	407,630	$	(320,146	)	$	17,293,003	$	(723,277	)
December 31, 2007:
Securities held to maturity:
Other bonds	$	49,982	$	(18	)	$	49,741	$	(260	)	$	99,723	$	(278	)
Securities available for sale:
U.S. govt. sponsored agency securities	$	3,499,245	$	(921	)	$	11,986,235	$	(27,162	)	$	15,485,480	$	(28,083	)
Mortgage-backed securities		6,244		(8	)		1,352,956		(7,799	)		1,359,200		(7,807	)
Municipal securities		2,175,325		(36,573	)		1,150,219		(2,324	)		3,325,544		(38,897	)
Corporate securities		—		—			—		—			—		—
Trust preferred securities		199,800		(200	)		—		—			199,800		(200	)
Other securities		578,486		(26,216	)		36,804		(9,692	)		615,290		(35,908	)
Total Portfolio	$	6,459,100	$	(63,918	)	$	14,526,214	$	(46,977	)	$	20,985,314	$	(110,895	)

At December 31, 2008, the investment portfolio included 303 securities. Of this number, 51 securities have current unrealized losses; 7 of which have existed for twelve months or more. All of these securities are considered to be acceptable credit risks. Based upon an evaluation of the available evidence, including recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for those securities are temporary. In addition, the Company has the intent and ability to hold these investment securities for a period of time sufficient to allow for an anticipated recovery.

55

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 4. Investment Securities (Continued)

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net earnings in the period on which the other-than-temporary impairment is identified.

All sales of securities, as applicable, for the years ended December 31, 2008, 2007 and 2006, respectively, were from securities identified as available for sale. Information on proceeds received, as well as the gains and losses from the sale of those securities is as follows:

	2008		2007		2006
Proceeds from sales of securities	$	285,000	$	—	$	4,786,122
Gross gains from sales of securities		199,500		—		—
Gross losses from sales of securities		—		—		71,293

The amortized cost and fair value of securities as of December 31, 2008 by contractual maturity are shown below. Expected maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the mortgage-backed securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following summary. Other securities are excluded from the maturity categories as there is no fixed maturity date.

	Amortized
	Cost		Fair Value
Securities held to maturity:
Due after one year through five years	$	300,000	$	300,000
Due after five years		50,000		50,000
	$	350,000	$	350,000
Securities available for sale:
Due in one year or less	$	15,773,748	$	15,981,696
Due after one year through five years		75,153,049		77,015,952
Due after five years		157,411,143		161,148,282
	$	248,337,940	$	254,145,930
Mortgage-backed securities		802,485		807,139
Other securities		1,132,763		773,346
	$	250,273,188	$	255,726,415

As of December 31, 2008 and 2007, investment securities with a carrying value of $251,710,014 and $191,330,770, respectively, were pledged on securities sold under agreements to repurchase and for other purposes as required or permitted by law.

56

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 5. Loans/Leases Receivable

The composition of the loan/lease portfolio as of December 31, 2008 and 2007 is presented as follows:

	2008			2007
Real estate loans held for sale — residential mortgage	$	7,377,648		$	6,507,583
Real estate loans — residential mortgage		69,465,924			68,280,628
Real estate loans — construction		2,385,187			8,539,523
Commercial loans		436,698,541			353,401,349
Commercial real estate loans		529,086,694			472,283,933
Direct financing leases		79,408,464			67,223,693
Installment and other consumer loans		88,540,397			79,220,241
		1,212,962,855			1,055,456,950
Plus deferred loan/lease orgination costs, net of fees		1,726,777			1,530,906
		1,214,689,632			1,056,987,856
Less allowance for estimated losses on loans/leases		(17,809,170	)		(11,315,253	)
	$	1,196,880,462		$	1,045,672,603

Loans/leases on nonaccrual status amounted to $19,710,693 and $6,488,409 as of December 31, 2008 and 2007, respectively. Interest income in the amount of $656,744, $166,883, and $613,250, for the years ended December 31, 2008, 2007, and 2006, respectively, would have been earned on the nonaccrual loans/leases had they been performing in accordance with their original terms. Cash interest collected on nonaccrual loans was $413,046, $574,067, and $246,124, for the years ended December 31, 2008, 2007 and 2006, respectively.

Changes in the allowance for estimated losses on loans/leases for the years ended December 31, 2008, 2007, and 2006 are presented as follows:

	2008			2007			2006
Balance, beginning	$	11,315,253		$	10,612,082		$	8,883,855
Provisions charged to expense		9,221,670			2,335,518			3,284,242
Loans/leases charged off		(3,684,889	)		(2,224,093	)		(1,919,515	)
Recoveries on loans/leases previously charged off		957,136			591,746			363,500
Balance, ending	$	17,809,170		$	11,315,253		$	10,612,082

57

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 5. Loans/Leases Receivable (Continued)

Loans/leases considered to be impaired as of December 31, 2008, 2007 and 2006 are as follows:

	2008		2007		2006
Impaired loans/leases for which an allowance has been provided	$	15,768,281	$	5,058,107	$	5,617,727
Allowance provided for impaired loans/leases, included in the allowance for loan/lease losses	$	5,291,743	$	1,507,674	$	2,032,801
Impaired loans/leases for which no allowance has been provided	$	2,517,574	$	164,330	$	665,785

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

The following summarizes additional information regarding impaired loans/leases:

	2008		2007		2006
Impaired loans/leases for which an allowance has been provided	$	15,768,281	$	5,058,107	$	5,617,727
Allowance provided for impaired loans/leases, included in the allowance for loan/lease losses	$	5,291,743	$	1,507,674	$	2,032,801
Impaired loans/leases for which no allowance has been provided	$	2,517,574	$	164,330	$	665,785

There were no direct financing leases which were past due 90 days or more and still accruing interest as of December 31, 2008.

Loans are made in the normal course of business to directors, officers, and their related interests. The terms of these loans, including interest rates and collateral, are similar to those prevailing for comparable transactions with other persons. An analysis of the changes in the aggregate committed amount of loans greater than or equal to $60,000 during the years ended December 31, 2008, 2007, and 2006, was as follows:

	2008			2007			2006
Balance, beginning	$	21,327,609		$	18,404,968		$	11,386,193
Net (decrease) increase due to change in related parties		(3,798,611	)		7,517,875			5,402,821
Advances		20,948,422			5,118,811			4,379,210
Repayments		(12,076,578	)		(9,714,045	)		(2,763,256	)
Balance, ending	$	26,400,842		$	21,327,609		$	18,404,968

58

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 5. Loans/Leases Receivable (Continued)

The Company’s loan portfolio includes a geographic concentration in the Midwest. Additionally, the loan portfolio includes a concentration of loans in certain industries as of December 31, 2008 as follows:

Industry Name	Balance
Lessors of Non-Residential Buildings & Dwellings	$	193,691,833
Lessors of Residential Buildings & Dwellings		51,680,922
Land Subdivision		43,818,507

Note 6. Premises and Equipment

The following summarizes the components of premises and equipment as of December 31, 2008 and 2007:

	2008		2007
Land	$	5,525,022	$	5,525,022
Buildings (useful lives 15 to 50 years)		25,127,523		25,063,223
Furniture and equipment (useful lives 3 to 10 years)		16,460,090		14,812,361
		47,112,635		45,400,606
Less accumulated depreciation		15,723,368		13,516,453
	$	31,389,267	$	31,884,153

Certain facilities are leased under operating leases. Rental expense was $510,308, $451,324, and $584,813, for the years ended December 31, 2008, 2007, and 2006, respectively.

Future minimum rental commitments under noncancelable leases are as follows as of December 31, 2008:

Year ending December 31:
2009	$	609,735
2010		595,543
2011		548,464
2012		548,464
2013		548,464
Thereafter		803,955
	$	3,654,625

59

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 7. Deposits

The aggregate amount of certificates of deposit, each with a minimum denomination of $100,000, was $347,631,421 and $233,475,121 as of December 31, 2008 and 2007, respectively.

As of December 31, 2008, the scheduled maturities of certificates of deposit were as follows:

Year ending December 31:
2009	$	395,621,718
2010		73,824,752
2011		27,168,704
2012		10,080,846
2013		3,033,344
	$	509,729,364

Note 8. Short-Term Borrowings

Short-term borrowings as of December 31, 2008 and 2007 are summarized as follows:

	2008		2007
Overnight repurchase agreements with customers	$	68,106,950	$	80,264,021
Federal funds purchased		33,350,000		89,940,000
	$	101,456,950	$	170,204,021

Information concerning repurchase agreements is summarized as follows as of December 31, 2008 and 2007:

	2008			2007
Average daily balance during the period	$	74,463,649		$	73,832,762
Average daily interest rate during the period		1.54	%		3.21	%
Maximum month-end balance during the period	$	86,536,776		$	85,831,232
Weighted average rate as of end of period		1.35	%		2.51	%
Securities underlying the agreements as of end of period:
Carrying value	$	96,137,434		$	99,567,226
Fair value		96,137,434			99,567,226

The securities underlying the agreements as of December 31, 2008 and 2007 were under the Company’s control in safekeeping at third-party financial institutions.

Information concerning federal funds purchased is summarized as follows as of December 31, 2008 and 2007:

	2008			2007
Average daily balance during the period	$	82,909,624		$	65,507,198
Average daily interest rate during the period		2.24	%		6.03	%
Maximum month-end balance during the period	$	144,940,000		$	93,100,000
Weighted average rate as of end of period		2.41	%		5.20	%

60

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 9. Federal Home Loan Bank Advances

The subsidiary banks are members of the Federal Home Loan Bank (FHLB) of Des Moines or Chicago. As of December 31, 2008 and 2007, the subsidiary banks held $11,796,100 and $9,561,700, respectively, of FHLB stock, which is included in other assets on the consolidated balance sheet. Maturity and interest rate information on advances from the FHLB as of December 31, 2008 and 2007 is as follows:

	December 31, 2008
			Weighted
			Average
			Interest Rate
	Amount Due		at Year-End
Maturity:
Year ending December 31:
2009	$	14,345,000		4.04	%
2010		8,100,000		5.16
2011		9,000,000		5.08
2012		44,750,000		4.68
2013		14,000,000		2.72
Thereafter		128,500,000		4.11
Total FHLB advances	$	218,695,000		4.24

Of the advances outstanding, $187,500,000 have options which allow the FHLB, at its discretion, to terminate the advances and require the subsidiary banks to repay at predetermined dates prior to the stated maturity date of the advances.

	December 31, 2007
			Weighted
			Average
			Interest Rate
	Amount Due		at Year-End
Maturity:
Year ending December 31:
2008	$	15,100,000		3.48	%
2009		14,200,000		4.05
2010		8,100,000		5.16
2011		9,000,000		5.08
2012		41,750,000		3.45
Thereafter		80,665,006		4.52
Total FHLB advances	$	168,815,006		4.50

Advances are collateralized by securities with a carrying value of $36,523,795 and $23,524,159 as of December 31, 2008 and 2007, respectively, and by loans pledged of $399,511,033 and $326,898,241, respectively, in aggregate. On pledged loans, the FHLB applies varying collateral maintenance levels from 125% to 333% based on the loan type.

61

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 10. Other Borrowings and Unused Lines of Credit

Other borrowings as of December 31, 2008 and 2007 are summarized as follows:

	2008		2007
Wholesale repurchase agreements	$	70,000,000	$	40,000,000
364-day revolving note		5,000,000		7,000,000
Other		582,634		690,122
	$	75,582,634	$	47,690,122

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

	December 31, 2008
			Weighted
			Average
			Interest Rate
	Amount Due		at Year-End
Maturity:
Year ending December 31:
2011	$	5,000,000		3.40	%
2012		40,000,000		4.47
Thereafter		25,000,000		3.54
Total Wholesale Repurchase Agreements	$	70,000,000		4.06

As of December 31, 2007, the wholesale repurchase agreements which comprise the $40,000,000 outstanding mature in 2012. The weighted average rate for these wholesale repurchase agreements is 4.47%.

Each wholesale repurchase agreement has a call option, at the discretion of the counterparty, to terminate the agreement and require the subsidiary bank to repay at predetermined dates prior to the stated maturity date of the agreement.

Embedded within a particular wholesale repurchase agreement is an interest rate cap option. The particular contract was transacted in May 2007 for the amount of $30,000,000 bearing a fixed interest rate of 4.55%. The wholesale repurchase agreement has a 5-year maturity and contains a continuous quarterly put option effective after 2 years. The interest rate cap option results when the 3-month LIBOR rate increases to 5.36% or higher. If that situation occurs, the rate paid will be decreased by the difference between the 3-month LIBOR rate and 5.36%. In no case will the rate paid fall below 0.00%.

At December 31, 2008 and 2007, the Company had a single $25,000,000 unsecured revolving credit note which matures every 364 days. At December 31, 2008, the maturity date is April 3, 2009. At December 31, 2008 and 2007, the note carried a balance outstanding of $5,000,000 and $7,000,000, respectively. Interest is payable monthly at the effective Federal Funds rate plus 1.25% per annum, as defined in the credit agreement. As of December 31, 2008 and 2007, the interest rate on the note was 1.34% and 5.40%, respectively.

The current revolving note agreement contains certain covenants that place restrictions on additional debt and stipulate minimum capital and various operating ratios.

62

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 10. Other Borrowings and Unused Lines of Credit (Continued)

Unused lines of credit of the subsidiary banks as of December 31, 2008 and 2007 are summarized as follows:

	2008		2007
Secured	$	27,695,251	$	3,000,000
Unsecured		141,500,000		88,500,000
	$	169,195,251	$	91,500,000

During 2008, the Company pledged its municipal securities portfolio to the Federal Reserve Bank of Chicago for borrowing at the Discount Window.

Note 11. Junior Subordinated Debentures

Junior subordinated debentures are summarized as of December 31, 2008 and 2007 as follows:

	2008		2007
Note Payable to Trust II	$	12,372,000	$	12,372,000
Note Payable to Trust III		8,248,000		8,248,000
Note Payable to Trust IV		5,155,000		5,155,000
Note Payable to Trust V		10,310,000		10,310,000
	$	36,085,000	$	36,085,000

A schedule of the Company’s trust preferred offerings outstanding as of December 31, 2008 and 2007, is as follows:

					Interest			Interest
					Rate as			Rate as
					of			of
Name	Date Issued	Amount Issued		Interest Rate	12/31/08			12/31/07
QCR Holdings Statutory Trust II	February 2004	$	12,372,000	6.93%*		6.93	%		6.93	%
QCR Holdings Statutory Trust III	February 2004		8,248,000	2.85% over 3-month LIBOR		6.61	%		8.08	%
QCR Holdings Statutory Trust IV	May 2005		5,155,000	1.80% over 3-month LIBOR		6.62	%		7.04	%
QCR Holdings Statutory Trust V	February 2006		10,310,000	6.62%**		6.62	%		6.62	%

*	Rate is fixed until March 31, 2011, then becomes variable based on 3-month LIBOR plus 2.85%, reset quarterly.
**	Rate is fixed until April 7, 2011, then becomes variable based on 3-month LIBOR plus 1.55%, reset quarterly.

Securities issued by Trust II mature in thirty years, but are callable at par anytime after seven years from issuance. Securities issued by Trust III, Trust IV, and Trust V mature in thirty years, but are callable at par anytime after five years from issuance.

63

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 12. Federal and State Income Taxes

Federal and state income tax expense from continuing operations was comprised of the following components for the years ended December 31, 2008, 2007, and 2006:

	2008			2007		2006
Current	$	3,552,436		$	2,421,028	$	1,119,489
Deferred		(1,816,719	)		472,393		(394,934	)
	$	1,735,717		$	2,893,421	$	724,555

A reconciliation of the expected federal income tax expense to the income tax expense included in the consolidated statements of income was as follows for the years ended December 31, 2008, 2007, and 2006:

	Year Ended						Year Ended						Year Ended
	December 31,						December 31,						December 31,
	2008						2007						2006
				% of						% of						% of
				Pretax						Pretax						Pretax
	Amount			Income			Amount			Income			Amount			Income
Computed “expected” tax expense	$	2,449,573			35.0	%	$	3,423,524			35.0	%	$	1,241,570			35.0	%
Effect of graduated tax rates interest		(69,988	)		(1.0	)		(97,815	)		(1.0	)		(35,473	)		(1.0	)
Tax exempt income, net		(608,884	)		(8.7	)		(502,639	)		(5.1	)		(360,351	)		(10.2	)
Bank-owned life insurance		(319,254	)		(4.6	)		(253,536	)		(2.6	)		(234,667	)		(6.6	)
State income taxes, net of federal benefit		315,475			4.5			359,374			3.7			179,298			5.1
Minority interest		(98,068	)		(1.4	)		(131,849	)		(1.3	)		(90,278	)		(2.5	)
Other		66,863			1.0			96,362			1.0			24,456			0.7
	$	1,735,717			24.8	%	$	2,893,421			29.7	%	$	724,555			20.5	%

On January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of SFAS No. 109 (“FIN 48”). This statement clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. FIN 48 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The adoption of FIN 48 had no impact on the Company’s consolidated financial statements.

64

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 12. Federal and State Income Taxes (Continued)

Changes in the unrecognized tax benefits included in liabilities is as follows for the years ended December 31, 2008 and 2007:

	2008			2007
Balance, beginning	$	817,972		$	635,617
Impact of tax positions taken during current year		314,590			150,368
Gross decrease related to tax positions of prior years		—			(210	)
Gross increase related to tax positions of prior years		102,602			35,646
Reduction as a result of a lapse of the applicable statute of limitations		(181,213	)		(3,449	)
Balance, ending	$	1,053,951		$	817,972

All unrecognized tax benefits, if recognized, would affect the effective tax rate. The liability for unrecognized tax benefits includes accrued interest for tax positions, which either do not meet the more-likely-than-not recognition threshold or where the tax benefit is measured at an amount less than the tax benefit claimed or expected to be claimed on an income tax return. At December 31, 2008 and 2007, accrued interest on uncertain tax positions was approximately $227,000 and $139,000, respectively. Estimated interest related to the underpayment of income taxes is classified as a component of Income Taxes in the Statement of Income and totaled $88,000 and $35,000 for the twelve months ended December 31, 2008 and 2007, respectively.

The Company’s federal income tax returns are open and subject to examination from the 2005 tax return year and forward. Various state franchise and income tax returns are generally open from the 2004 and later tax return years based on individual state statute of limitations. m2 Lease Funds currently is under audit from the Internal Revenue Service for its 2005 tax year.

The net deferred tax assets included with other assets on the consolidated balance sheets consisted of the following as of December 31, 2008 and 2007:

	2008			2007
Deferred tax assets:
Compensation	$	2,890,639		$	2,241,883
Loan/lease losses		6,042,711			4,151,989
Other		122,342			132,863
		9,055,692			6,526,735
Deferred tax liabilities:
Net unrealized gains on securities available for sale		1,824,867			1,740,646
Premises and equipment		3,707,863			3,033,744
Investment accretion		43,960			32,493
Deferred loan origination fees, net		(49,803	)		10,706
Other		216,875			129,714
		5,743,762			4,947,303
Net deferred tax asset	$	3,311,930		$	1,579,432

65

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 12. Federal and State Income Taxes (Continued)

The change in deferred income taxes was reflected in the consolidated financial statements as follows for the years ended December 31, 2008, 2007, and 2006:

	2008			2007		2006
Provision for income taxes	$	(1,816,719	)	$	472,393	$	(394,934	)
Statement of stockholders’ equity-accumulated other comprehensive income, unrealized gains on securities available for sale, net		84,221			1,735,995		327,647
	$	(1,732,498	)	$	2,208,388	$	(67,287	)

Note 13. Employee Benefit Plans

The Company has a profit sharing plan which includes a provision designed to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended, to allow for participant contributions. All employees are eligible to participate in the plan. The Company matches 100% of the first 3% of employee contributions, and 50% of the next 3% of employee contributions, up to a maximum amount of 4.5% of an employee’s compensation. Additionally, at its discretion, the Company may make additional contributions to the plan which are allocated to the accounts of participants in the plan based on relative compensation. Company contributions for the years ended December 31, 2008, 2007, and 2006 were as follows:

	2008		2007		2006
Matching contribution	$	965,009	$	719,529	$	674,786
Discretionary contribution		77,000		101,900		52,300
	$	1,042,009	$	821,429	$	727,086

The Company has entered into nonqualified supplemental executive retirement plans (SERPs) with certain executive officers. The SERPs allow certain executives to accumulate retirement benefits beyond those provided by the qualified plans. During the years ended December 31, 2008, 2007 and 2006, the Company expensed $874,240, $594,794, and $533,239, respectively, related to these plans. As of December 31, 2008 and 2007, the liability related to the SERPs was $2,293,086 and $1,438,346, respectively. Payments in the amount of $19,500 were made in 2008.

The Company has entered into deferred compensation agreements with certain executive officers. Under the provisions of the agreements the officers may defer compensation and the Company matches the deferral up to certain maximums. The Company’s matching contribution varies by officer and is a maximum of between $10,000 and $20,000 annually. Interest on the deferred amounts is earned at The Wall Street Journal’s prime rate subject to a minimum of 6% and a maximum of 12% with such limits differing by officer. The Company has also entered into deferred compensation agreements with certain management officers. Under the provisions of the agreements the officers may defer compensation and the Company matches the deferral up to certain maximums. The Company’s matching contribution differs by officer and is a maximum between 4% and 10% of officer’s compensation. Interest on the deferred amounts is earned at The Wall Street Journal’s prime rate plus one percentage point, and has a minimum of 4% and shall not exceed 8%. Upon retirement, the officer will receive the deferral balance in 180 equal monthly installments. As of December 31, 2008 and 2007 the liability related to the agreements totals $2,931,741 and $2,088,665, respectively.

66

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 13. Employee Benefit Plans (Continued)

Changes in the deferred compensation agreements included in liabilities is as follows for the years ended December 31, 2008, 2007 and 2006:

	2008			2007			2006
Balance, beginning	$	2,088,665		$	1,454,436		$	1,001,171
Company expense		496,043			411,615			267,689
Employee deferrals		350,746			226,327			186,195
Cash payments made		(3,713	)		(3,713	)		(619	)
Balance, ending	$	2,931,741		$	2,088,665		$	1,454,436

Note 14. Stock-Based Compensation

Stock-based compensation expense, calculated in accordance with the provisions of SFAS 123, was reflected in the consolidated financial statements as follows for the years ended December 31, 2008, 2007, and 2006.

	2008			2007			2006
Stock option and incentive plans	$	426,765		$	295,763		$	246,340
Stock purchase plan		48,355			48,033			39,011
Stock appreciation rights		(176,199	)		(322,448	)		(114,226	)
	$	298,921		$	21,348		$	171,125

Stock option and incentive plans:

The Company’s Board of Directors and its stockholders adopted in June 1993 the QCR Holdings, Inc. Stock Option Plan (Stock Option Plan). Up to 225,000 shares of common stock may be issued to employees and directors of the Company and its subsidiaries pursuant to the exercise of incentive stock options or nonqualified stock options granted under the Stock Option Plan. All of the options have been granted under this plan, and on June 30, 2003, the plan expired. The Company’s Board of Directors adopted in November 1996 the QCR Holdings, Inc. 1997 Stock Incentive Plan (1997 Stock Incentive Plan). Up to 225,000 shares of common stock may be issued to employees and directors of the Company and its subsidiaries pursuant to the exercise of nonqualified stock options and restricted stock granted under the 1997 Stock Incentive Plan. As of December 31, 2006, there are no remaining options available for grant under this plan. The Company’s Board of Directors adopted in January 2004, and the stockholders approved in May 2004, the QCR Holdings, Inc. 2004 Stock Incentive Plan (2004 Stock Incentive Plan). Up to 225,000 shares of common stock may be issued to employees and directors of the Company and its subsidiaries pursuant to the exercise of nonqualified stock options and restricted stock granted under the 2004 Stock Incentive Plan. As of December 31, 2008, there are no remaining options available for grant under this plan. The Company’s Board of Directors adopted in January 2008, and the stockholders approved in May 2008, the QCR Holdings, Inc. 2008 Equity Incentive Plan (2008 Equity Incentive Plan). Up to 250,000 shares of common stock may be issued to employees and directors of the Company and its subsidiaries pursuant to the exercise of nonqualified stock options and restricted stock granted under the 2008 Equity Incentive Plan. As of December 31, 2008, there are 203,046 remaining options available for grant under this plan. The Stock Option Plan, the 1997 Stock Incentive Plan, and the 2004 Stock Incentive Plan (stock option plans) are administered by the Executive Committee appointed by the Board of Directors (Committee).

67

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 14. Stock-Based Compensation (Continued)

The number and exercise price of options granted under the stock option plans is determined by the Committee at the time the option is granted. In no event can the exercise price be less than the value of the common stock at the date of the grant for incentive stock options. All options have a 10-year life and will vest and become exercisable from 1-to-5 years after the date of the grant. Only nonqualified stock options have been issued to date.

In the case of nonqualified stock options, the stock option plans provide for the granting of “Tax Benefit Rights” to certain participants at the same time as these participants are awarded nonqualified options. Each Tax Benefit Right entitles a participant to a cash payment, which is expensed by the Company, equal to the excess of the fair market value of a share of common stock on the exercise date over the exercise price of the related option multiplied by the difference between the rate of tax on ordinary income over the rate of tax on capital gains (federal and state).

A summary of the stock option plans as of December 31, 2008, 2007, and 2006 and changes during the years then ended is presented below:

	December 31,
	2008					2007					2006
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding, beginning		332,077		$	15.25		281,594		$	14.43		252,658		$	13.25
Granted		100,245			15.59		74,650			16.67		54,650			18.73
Exercised		(7,305	)		14.93		(19,069	)		16.57		(16,221	)		17.82
Forfeited		(16,552	)		15.38		(5,098	)		13.98		(9,493	)		18.72
Outstanding, ending		408,465			15.38		332,077			15.25		281,594			14.43
Exercisable, ending		212,463					186,939					167,455
Weighted average fair value per option of options granted during the period	$	5.05				$	5.80				$	6.48

68

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 14. Stock-Based Compensation (Continued)

A further summary of options outstanding as of December 31, 2008 is presented below:

	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of	Number		Contractual		Exercise		Number		Exercise
Exercise Prices	Outstanding		Life		Price		Exercisable		Price
$6.90		12,870		2.50	$	6.90		12,870	$	6.90
$7.00 to $7.13		33,650		2.25		7.01		33,650		7.01
$7.45 to $8.83		16,350		1.33		8.54		16,350		8.54
$9.87 to $11.64		30,186		2.76		10.35		30,186		10.35
$11.70 to $16.85		168,104		8.44		15.80		24,885		15.19
$17.00 to $18.60		50,420		6.74		18.06		25,381		18.25
$18.67 to $20.90		67,885		6.16		19.48		51,621		19.51
$21.00 to $22.00		29,000		6.16		21.28		17,520		21.28
		408,465						212,463

Stock purchase plan:

The Company’s Board of Directors and its stockholders adopted in October 2002 the QCR Holdings, Inc. Employee Stock Purchase Plan (the “Purchase Plan”). As of January 1, 2008, there were 81,354 shares of common stock available for issuance under the Purchase Plan. For each six-month offering period, the Board of Directors will determine how many of the total number of available shares will be offered. The purchase price is the lesser of 90% of the fair market value at the date of the grant or the investment date. The investment date, as established by the Board of Directors of the Company, is the date common stock is purchased after the end of each calendar quarter during an offering period. The maximum dollar amount any one participant can elect to contribute in an offering period is $5,000. Additionally, the maximum percentage that any one participant can elect to contribute is 8% and 5% of his or her compensation for the years ended December 31, 2008 and 2007, respectively. During the year ended December 31, 2008, 24,233 shares were granted and 22,767 purchased. Shares granted during the year ended December 31, 2008 had a weighted average fair value of $2.00 per share.

Stock appreciation rights:

The 1997 Stock Incentive Plan and 2004 Stock Incentive Plan allow the granting of stock appreciation rights (SARs). SARs are rights entitling the grantee to receive cash equal to the fair market value of the appreciation in the market value of a stated number of shares from the date of grant. Like options, the number and exercise price of SARs granted is determined by the Committee. The SARs vest 20% per year, and the term of the SARs may not exceed 10 years from the date of the grant. As of December 31, 2008, 2007, and 2006 there were 57,600, 86,325, and 94,875 SARs, respectively, outstanding and exercisable. As of December 31, 2008 and 2007 the liability related to the SARs totals $194,287 and $428,986, respectively. Payments made on SARs were $58,500, $74,318 and $95,957 during the years ended December 31, 2008, 2007 and 2006, respectively.

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Notes to Consolidated Financial Statements

Note 14. Stock-Based Compensation (Continued)

A further summary of SARs is presented below:

	December 31, 2008				Liability Recorded for SARs
	SARs		SARs		December 31,
Grant Date Price	Outstanding		Exercisable		2008		2007
$6.90		28,350		28,350	$	126,441	$	241,638
$7.00		9,000		9,000		35,820		69,120
$10.75		15,450		15,450		27,192		70,421
$11.83		4,050		4,050		4,496		16,594
$12.17		750		750		338		2,483
$14.22		—		—		—		28,730
		57,600		57,600	$	194,287	$	428,986

Note 15. Regulatory Capital Requirements and Restrictions on Dividends

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. Prompt corrective action provisions are not applicable to bank holding companies.

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 and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2008 and 2007, that the Company and the subsidiary banks met all capital adequacy requirements to which they are subject.

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Notes to Consolidated Financial Statements

Note 15. Regulatory Capital Requirements and Restrictions on Dividends (Continued)

As of December 31, 2008, the most recent notification from the FDIC categorized the subsidiary banks as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the subsidiary banks’ categories. The Company and the subsidiary banks’ actual capital amounts and ratios as of December 31, 2008 and 2007 are also presented in the table (dollars in thousands).

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2008:
Company:
Total risk-based capital	$	138,008		10.39	%	$	106,283	≥	8.0	%		N/A		N/A
Tier 1 risk-based capital		111,121		8.36	%		53,141	≥	4.0	%		N/A		N/A
Leverage ratio		111,121		6.67	%		66,610	≥	4.0	%		N/A		N/A
Quad City Bank & Trust:
Total risk-based capital	$	79,438		10.72	%	$	59,273	≥	8.0	%	$	74,091	≥	10.00	%
Tier 1 risk-based capital		70,313		9.49	%		29,636	≥	4.0	%		44,455	≥	6.00	%
Leverage ratio		70,313		7.88	%		35,695	≥	4.0	%		44,618	≥	5.00	%
Cedar Rapids Bank & Trust:
Total risk-based capital	$	40,575		10.52	%	$	30,854	≥	8.0	%	$	38,567	≥	10.00	%
Tier 1 risk-based capital		35,752		9.27	%		15,427	≥	4.0	%		23,140	≥	6.00	%
Leverage ratio		35,752		7.85	%		18,212	≥	4.0	%		22,765	≥	5.00	%
Rockford Bank & Trust (A):
Total risk-based capital	$	21,483		10.63	%	$	16,162	≥	8.0	%	$	20,202	≥	10.00	%
Tier 1 risk-based capital		18,943		9.38	%		8,081	≥	4.0	%		12,121	≥	6.00	%
Leverage ratio		18,943		8.65	%		8,755	≥	4.0	%		10,944	≥	5.00	%

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Notes to Consolidated Financial Statements

Note 15. Regulatory Capital Requirements and Restrictions on Dividends (Continued)

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2007:
Company:
Total risk-based capital	$	127,901		10.48	%	$	97,617	≥	8.0	%		N/A		N/A
Tier 1 risk-based capital		105,524		8.65	%		48,808	≥	4.0	%		N/A		N/A
Leverage ratio		105,524		7.42	%		56,879	≥	4.0	%		N/A		N/A
Quad City Bank & Trust:
Total risk-based capital	$	72,074		10.16	%	$	56,752	≥	8.0	%	$	70,940	≥	10.00	%
Tier 1 risk-based capital		66,111		9.32	%		28,376	≥	4.0	%		42,564	≥	6.00	%
Leverage ratio		66,111		7.86	%		33,665	≥	4.0	%		42,081	≥	5.00	%
Cedar Rapids Bank & Trust:
Total risk-based capital	$	31,941		10.32	%	$	24,760	≥	8.0	%	$	30,950	≥	10.00	%
Tier 1 risk-based capital		28,140		9.09	%		12,380	≥	4.0	%		18,570	≥	6.00	%
Leverage ratio		28,140		7.50	%		15,012	≥	4.0	%		18,765	≥	5.00	%
Rockford Bank & Trust (A):
Total risk-based capital	$	15,851		10.95	%	$	11,584	≥	8.0	%	$	14,479	≥	10.00	%
Tier 1 risk-based capital		14,300		9.88	%		5,792	≥	4.0	%		8,688	≥	6.00	%
Leverage ratio		14,300		9.77	%		5,852	≥	4.0	%		7,315	≥	5.00	%

(A) As a de novo bank, Rockford Bank & Trust could not, without the prior consent of the Federal Reserve Bank, pay dividends until after the first three years of operations and two consecutive satisfactory CAMELS ratings. In addition, the Bank was required to maintain a tangible Tier I leverage ratio of at least 9% throughout its first three years of operations. The de novo period for Rockford Bank & Trust expired on January 3, 2008.

The Company’s ability to pay dividends to its shareholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies.

The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. Notwithstanding the availability of funds for dividends, however, the Federal Reserve may prohibit the payment of any dividends by the Banks if the Federal Reserve determines such payment would constitute an unsafe or unsound practice.

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Notes to Consolidated Financial Statements

Note 16. Earnings Per Common Share

The following information was used in the computation of basic and diluted earnings per common share for the years ended December 31, 2008, 2007, and 2006:

	2008		2007			2006
Income from continuing operations	$	4,974,627	$	6,500,285		$	2,557,264
Less preferred stock dividends		1,784,500		1,072,000			164,373
Income from continuing operations available to common stockholders	$	3,190,127	$	5,428,285		$	2,392,891
Income (loss) from discontinued operations		1,734,231		(722,808	)		244,941
Net income		6,708,858		5,777,477			2,802,205
Less preferred stock dividends		1,784,500		1,072,000			164,373
Net income available to common stockholders	$	4,924,358	$	4,705,477		$	2,637,832
Weighted average common shares outstanding		4,617,057		4,581,919			4,609,626
Weighted average common shares issuable upon exercise of stock options and under the Employee Stock Purchase Plan*		17,480		17,649			43,603
Weighted average common and common equivalent shares outstanding	$	4,634,537	$	4,599,568		$	4,653,229
Basic earnings per common share:
Income from continuing operations	$	0.69	$	1.19		$	0.52
Income (loss) from discontinued operations		0.38		(0.16	)		0.05
Net income	$	1.07	$	1.03		$	0.57
Diluted earnings per common share:
Income from continuing operations	$	0.69	$	1.18		$	0.52
Income (loss) from discontinued operations		0.37		(0.16	)		0.05
Net income	$	1.06	$	1.02		$	0.57

* Excludes anti-dilutive shares of 391,843, 213,900, and 138,814 at December 31, 2008, 2007 and 2006, respectively.

Note 17. Commitments and Contingencies

In the normal course of business, the subsidiary banks make various commitments and incur certain contingent liabilities that are not presented in the accompanying consolidated financial statements. The commitments and contingent liabilities include various guarantees, commitments to extend credit, and standby letters of credit.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The subsidiary banks evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the subsidiary banks upon extension of credit, is based upon management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, marketable securities, inventory, property, plant and equipment, and income-producing commercial properties.

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Notes to Consolidated Financial Statements

Note 17. Commitments and Contingencies (Continued)

Standby letters of credit are conditional commitments issued by the subsidiary banks to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and, generally, have terms of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The subsidiary banks hold collateral, as described above, supporting those commitments if deemed necessary. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the subsidiary banks would be required to fund the commitments. The maximum potential amount of future payments the subsidiary banks could be required to make is represented by the contractual amount. If the commitment is funded, the subsidiary banks would be entitled to seek recovery from the customer. At December 31, 2008 and 2007 no amounts have been recorded as liabilities for the subsidiary banks’ potential obligations under these guarantees.

As of December 31, 2008 and 2007, commitments to extend credit aggregated $494,845,000 and $464,920,000, respectively. As of December 31, 2008 and 2007, standby letters of credit aggregated $15,167,000 and $14,146,000, respectively. Management does not expect that all of these commitments will be funded.

The Company has also executed contracts for the sale of mortgage loans in the secondary market in the amount of $7,377,648 and $6,507,583 as of December 31, 2008 and 2007, respectively. These amounts are included in loans held for sale at the respective balance sheet dates.

Residential mortgage loans sold to investors in the secondary market are sold with varying recourse provisions. Essentially, all loan sales agreements require the repurchase of a mortgage loan by the seller in situations such as, breach of representation, warranty, or covenant, untimely document delivery, false or misleading statements, failure to obtain certain certificates or insurance, unmarketability, etc. Certain loan sales agreements contain repurchase requirements based on payment-related defects that are defined in terms of the number of days/months since the purchase, the sequence number of the payment, and/or the number of days of payment delinquency. Based on the specific terms stated in the agreements of investors purchasing residential mortgage loans from the Company’s subsidiary banks, the Company had $75,827,221 and $44,999,539 of sold residential mortgage loans with recourse provisions still in effect at December 31, 2008 and 2007, respectively. Quad City Bank & Trust repurchased one loan from a secondary market investor under the terms of the loan sale agreement during the year ended December 31, 2008. The subsidiary banks did not repurchase any loans from secondary market investors under the terms of loans sales agreements during the years ended December 31, 2007, and 2006. In the opinion of management, the risk of recourse and the subsequent requirement of loan repurchase to the subsidiary banks is not significant, and accordingly no liabilities have been established related to such.

Aside from cash on-hand and in-vault, the majority of the Company’s cash is maintained at upstream correspondent banks. The total amount of cash on deposit, certificates of deposit, and federal funds sold exceeded federal insured limits by approximately $3,130,000 and $14,000,000 as of December 31, 2008 and 2007, respectively. As of December 31, 2008, all of the Company’s upstream correspondent banks are participants in the FDIC’s Temporary Liquidity Guarantee Program; as a result, the cash maintained in non-interest bearing deposits at these insured institutions were fully insured. In the opinion of management, no material risk of loss exists due to the financial condition of the upstream correspondent banks.

In an arrangement with Goldman, Sachs and Company (Goldman Sachs), certain subsidiary banks offer a cash management program for select customers. Based on a predetermined minimum balance, which must be maintained in the account, excess funds are automatically swept daily to an institutional money market fund distributed by Goldman Sachs. At December 31, 2008 and 2007, the Company had $27,919,579 and $47,133,788, respectively of customer funds invested in this cash management program.

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Notes to Consolidated Financial Statements

Note 18. Quarterly Results of Operations (Unaudited)

	Year Ended December 31, 2008
	March			June			September		December
	2008			2008			2008		2008
Total interest income	$	21,261,199		$	21,000,568		$	21,541,068	$	21,664,127
Total interest expense		11,124,682			9,808,829			9,800,026		9,790,399
Net interest income		10,136,517			11,191,739			11,741,042		11,873,728
Provision for loan/lease losses		984,240			1,355,343			2,154,061		4,728,026
Noninterest income		3,414,134			3,653,978			3,311,209		3,231,792
Noninterest expense		10,068,636			10,487,588			10,576,283		11,201,182
Income (loss) from continuing operations before taxes and minority interest		2,497,775			3,002,786			2,321,907		(823,688	)
Federal and state income tax expense (benefit)		668,022			873,178			613,372		(418,855	)
Minority interest in income (loss) of consolidated subsidiary		140,392			128,435			93,386		(73,777	)
Income (loss) from continuing operations		1,689,361			2,001,173			1,615,149		(331,056	)
Income (loss) from discontinued operations, net of taxes		(1,002,917	)		(228,884	)		2,690,333		275,699
Net income (loss)	$	686,444		$	1,772,289		$	4,305,482	$	(55,357	)
Basic earnings per common share:
Income (loss) from continuing operations		0.27			0.34			0.25		(0.17	)
Income (loss) from discontinued operations		(0.22	)		(0.05	)		0.58		0.06
Net income (loss)	$	0.05		$	0.29		$	0.83	$	(0.11	)
Diluted earnings per common share:
Income (loss) from continuing operations		0.27			0.34			0.25		(0.17	)
Income (loss) from discontinued operations		(0.22	)		(0.05	)		0.58		0.06
Net income (loss)	$	0.05		$	0.29		$	0.83	$	(0.11	)

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Notes to Consolidated Financial Statements

Note 18. Quarterly Results of Operations (Unaudited) (Continued)

	Year Ended December 31, 2007
	March			June			September			December
	2007			2007			2007			2007
Total interest income	$	19,594,199		$	20,512,818		$	21,422,251		$	21,610,778
Total interest expense		11,414,994			12,020,305			12,429,483			12,274,176
Net interest income		8,179,205			8,492,513			8,992,768			9,336,602
Provision for loan/lease losses		363,457			763,535			956,967			251,559
Noninterest income		2,887,179			3,317,094			3,548,572			3,097,057
Noninterest expense		8,498,102			8,756,590			9,091,930			9,387,353
Income from continuning operations before taxes and minority interest		2,204,825			2,289,482			2,492,443			2,794,747
Federal and state income taxes		621,391			665,367			744,434			862,229
Minoirtiy interest in income of consolidated subsidiary		90,942			142,947			17,046			136,856
Income from continuing operations		1,492,492			1,481,168			1,730,963			1,795,662
Income (loss) from discontinued operations, net of taxes		(229,806	)		(170,563	)		(137,154	)		(185,285	)
Net income	$	1,262,686		$	1,310,605		$	1,593,809		$	1,610,377
Basic earnings per common share:
Income from continuing operations		0.27			0.27			0.32			0.33
Income (loss) from discontinued operations		(0.05	)		(0.04	)		(0.03	)		(0.04	)
Net income	$	0.22		$	0.23		$	0.29		$	0.29
Diluted earnings per common share:
Income from continuing operations		0.27			0.27			0.32			0.33
Income (loss) from discontinued operations		(0.05	)		(0.04	)		(0.03	)		(0.04	)
Net income	$	0.22		$	0.23		$	0.29		$	0.29

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Notes to Consolidated Financial Statements

Note 19. Parent Company Only Financial Statements

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

Condensed Balance Sheets
December 31, 2008 and 2007

	2008			2007
Assets
Cash and due from banks	$	1,485,858		$	1,390,032
Interest-bearing deposits at financial institutions		179,061			170,145
Securities available for sale, at fair value		773,347			1,229,708
Investment in bank subsidiaries related to continuing operations		130,718,800			113,316,907
Investment in bank subsidiaries related to discontinued operations, held for sale		—			9,161,149
Investment in nonbank subsidiaries		1,692,491			1,639,236
Other assets		3,377,046			4,865,810
Total assets	$	138,226,603		$	131,772,987
Liabilities and Stockholders’ Equity
Liabilities:
Other borrowings	$	5,000,000		$	7,000,000
Junior subordinated debentures		36,085,000			36,085,000
Other liabilities		6,504,730			2,622,195
Total liabilities		47,589,730			45,707,195
Stockholders’ Equity:
Preferred stock		568			568
Common stock		4,630,883			4,597,744
Additional paid-in capital		43,090,268			42,317,374
Retained earnings		40,893,304			36,338,566
Accumulated other comprehensive income		3,628,360			2,811,540
Treasury stock		(1,606,510	)		—
Total stockholders’ equity		90,636,873			86,065,792
Total liabilities and stockholders’ equity	$	138,226,603		$	131,772,987

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Notes to Consolidated Financial Statements

Note 19. Parent Company Only Financial Statements (Continued)

Condensed Statements of Income
Years Ended December 31, 2008, 2007, and 2006

	2008		2007			2006
Total interest income	$	151,742	$	218,795		$	126,990
Securities gains, net		199,500		—			—
Equity in net income of bank subsidiaries related to continuing operations		9,323,385		9,892,911			5,521,908
Equity in net income (loss) of nonbank subsidiaries related to continuing operations		116,479		(48,757	)		125,023
Equity in net income (loss) of subsidiaries related to discontinued operations		1,734,231		(722,808	)		244,941
Other		2,098,260		516,693			244,503
Total income		13,623,597		9,856,834			6,263,365
Interest expense		2,703,617		3,347,664			3,038,143
Salaries and employee benefits related to continuing operations		3,527,004		1,417,738			1,264,543
Salaries and employee benefits related to discontinued operations*		1,280,449		—			—
Professional and data processing fees related to continuing operations		1,113,615		677,874			388,136
Professional and data processing fees related to discontinued operations		224,887		—			—
Other		505,608		433,934			446,057
Total expenses		9,355,180		5,877,210			5,136,879
Income before income tax benefit		4,268,417		3,979,624			1,126,486
Income tax benefit		2,440,441		1,797,853			1,675,719
Net income	$	6,708,858	$	5,777,477		$	2,802,205

* Consisted entirely of severance payments related to the sale of First Wisconsin Bank & Trust.

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Notes to Consolidated Financial Statements

Note 19. Parent Company Only Financial Statements (Continued)

Condensed Statements of Cash Flows
Years Ended December 31, 2008, 2007, and 2006

	2008			2007			2006
Cash Flows from Operating Activities:
Net income	$	6,708,858		$	5,777,477		$	2,802,205
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Distributions in excess of (less than) earnings of:
Bank subsidiaries		1,673,041			2,094,503			(3,621,909	)
Nonbank subsidiaries		(62,744	)		69,656			(35,841	)
Depreciation		2,753			2,633			2,500
Gain on sale of other assets		—			(435,791	)		—
Gain on sale of First Wisconsin Bank & Trust		(494,664	)		—			—
Investment securities gains, net		(199,500	)		—			—
Stock-based compensation expense		475,120			343,796			285,351
(Increase) decrease in accrued interest receivable		35,787			142,974			(103,172	)
(Increase) decrease in other assets		1,601,300			(3,314,476	)		(243,954	)
Increase in other liabilities		2,523,615			912,670			101,394
Net cash (used in) provided by operating activities		12,263,566			5,593,442			(813,426	)
Cash Flows from Investing Activities:
Net increase in interest-bearing deposits at financial institutions		(8,916	)		(11,226	)		(63,192	)
Purchase of securities available for sale		(16,939	)		(24,857	)		(13,675	)
Proceeds from sale of securities		285,000			—			50,000
Proceeds from sale of other assets		—			500,000			—
Proceeds from sale of First Wisconsin Bank & Trust, net		13,324,553			—			—
Capital infusion, bank subsidiaries		(20,500,000	)		(15,750,000	)		(14,100,000	)
Capital infusion, nonbank subsidiaries		—			—			(910,000	)
Purchase of premises and equipment		(971	)		(1,200	)		—
Net cash used in investing activities		(6,917,273	)		(15,287,283	)		(15,036,867	)
Cash Flows from Financing Activities:
Net increase (decrease) in other borrowings		(2,000,000	)		3,500,000			(7,000,000	)
Proceeds from issuance of junior subordinated debentures		—			—			10,310,000
Tax benefit of nonqualified stock options exercised		1,611			22,370			37,795
Payment of cash dividends on common and preferred stock		(1,974,870	)		(1,334,012	)		(363,143	)
Proceeds from issuance of preferred stock, net		—			7,273,579			12,884,414
Proceeds from issuance of common stock, net		329,302			421,533			339,370
Purchase of treasury stock		(1,606,510	)		—			—
Net cash (used in) provided by financing activities		(5,250,467	)		9,883,470			16,208,436
Net increase in cash and due from banks		95,826			189,629			358,143
Cash and due from banks:
Beginning		1,390,032			1,200,403			842,260
Ending	$	1,485,858		$	1,390,032		$	1,200,403

79

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 20. Fair Value of Financial Instruments

FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, requires disclosures of fair value information about financial instruments for which it is practicable to estimate that value. Fair value is determined under the framework established by SFAS No. 157 (see Note 1 and Note 22). Some financial instruments and all nonfinancial instruments are excluded from the disclosures. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The following methods and assumptions were used by the Company in estimating the fair value of their financial instruments.

Cash and due from banks, federal funds sold, and interest-bearing deposits at financial institutions: The carrying amounts reported in the balance sheets for cash and due from banks, federal funds sold, and interest-bearing deposits at financial institutions equal their fair values.

Investment securities: Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

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

Accrued interest receivable and payable: The fair value of accrued interest receivable and payable is equal to its carrying value.

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

Short-term borrowings: The fair value for short-term borrowings is equal to its carrying value.

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

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

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

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

80

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 20. Fair Value of Financial Instruments (Continued)

The carrying values and estimated fair values of the Company’s financial instruments as of December 31, 2008 and 2007 are presented as follows:

	2008				2007
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Cash and due from banks	$	33,464,074	$	33,464,074	$	40,490,000	$	40,490,000
Federal funds sold		20,695,898		20,695,898		7,985,000		7,985,000
Interest-bearing deposits at financial institutions		2,113,904		2,113,904		5,096,048		5,096,048
Investment securities:
Held to maturity		350,000		350,000		350,000		349,722
Available for sale		255,726,415		255,726,415		220,207,243		220,207,243
Loans/leases receivable, net		1,196,880,462		1,189,382,000		1,045,672,603		1,046,974,000
Accrued interest receivable		7,835,835		7,835,835		7,585,690		7,585,690
Assets related to discontinued operations, held for sale		—		—		64,270,834		64,385,167
Deposits		1,058,958,598		1,067,480,000		884,005,259		886,538,000
Short-term borrowings		101,456,950		101,456,950		170,204,021		170,204,021
Federal Home Loan Bank advances		218,695,000		235,309,000		168,815,006		174,912,000
Other borrowings		75,582,634		78,472,000		47,690,122		48,550,000
Accrued interest payable		4,539,122		4,539,122		4,541,740		4,541,740
Liabilities related to discontinued operations, held for sale		—		—		58,646,589		58,851,630

Note 21. 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 QCR Holdings, Inc. have been defined by the structure of the Company’s internal organization, focusing on the financial information that the Company’s operating decision-makers routinely use to make decisions about operating matters.

The Company’s primary segment, Commercial Banking, is geographically divided by markets into the secondary segments which are the three subsidiary banks wholly-owned by the Company: Quad City Bank & Trust, Cedar Rapids Bank & Trust, and Rockford Bank & Trust. Each of these secondary segments offer similar products and services, but are managed separately due to different pricing, product demand, and consumer markets. Each offers commercial, consumer, and mortgage loans and deposit services.

First Wisconsin Bank & Trust is accounted for as discontinued bank operations and has been properly excluded where appropriate. First Wisconsin Bank & Trust’s assets held for sale are reported in the “All Other” segment.

The Company’s Credit Card Processing segment represents the continuing operations of Bancard. Bancard provides credit card processing for cardholders of the Company’s three subsidiary banks and agent banks.

As previously noted, Bancard sold its merchant credit card acquiring business and the Company has accounted for it as discontinued operations. The related financial information has been properly excluded.

81

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 21. Business Segment Information (Continued)

The Company’s Trust Management segment represents the trust and asset management services offered at the Company’s three subsidiary banks in aggregate. This segment generates income primarily from fees charged based on assets under administration for corporate and personal trusts and for custodial services. No assets of the subsidiary banks have been allocated to the Trust 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 and the real estate holding operations of Velie Plantation Holding Company.

Selected financial information on the Company’s business segments, with all intercompany accounts and transactions eliminated, is presented as follows for the years ended December 31, 2008, 2007, and 2006:

	Commercial Banking
	Quad Bank		Cedar Rapids		Rockford			Credit Card			Trust					Intercompany			Consolidated
	& Trust		Bank & Trust		Bank & Trust			Processing			Management		All other			Eliminations			Total
Twelve Months Ended December 31, 2008
Total Revenue	$	59,490,093	$	27,342,969	$	12,002,908		$	987,769		$	3,333,812	$	2,558,859		$	(6,638,335	)	$	99,078,075
Net Interest Income		29,262,931		13,292,023		5,061,770			464,426			—		(4,370,682	)		1,232,558			44,943,026
Income from Continuing Operations		7,484,411		3,045,421		(1,606,051	)		45,090			738,296		(4,255,358	)		(477,182	)		4,974,627
Total Assets		908,594,141		468,306,140		228,014,920			927,894			—		9,995,192			(10,209,273	)		1,605,629,014
Allowance for Loan/Lease Losses		9,124,698		4,968,974		3,715,498			—			—		—			—			17,809,170
Goodwill and Intangible Assets		3,308,368		—		—			—			—		—			—			3,308,368
Twelve Months Ended December 31, 2007
Total Revenue	$	58,138,479	$	25,112,511	$	8,434,430		$	746,725		$	3,672,501	$	793,072		$	(907,770	)	$	95,989,948
Net Interest Income		25,308,208		10,129,436		3,003,697			484,812			—		(5,246,024	)		1,320,959			35,001,088
Income from Continuing Operations		7,485,756		2,359,902		(849,961	)		(127,180	)		1,040,967		(2,993,790	)		(415,409	)		6,500,285
Total Assets		860,707,797		383,953,801		157,816,671			1,069,831			—		82,620,688			(9,604,446	)		1,476,564,342
Allowance for Loan/Lease Losses		5,963,158		3,801,472		1,550,623			—			—		—			—			11,315,253
Goodwill and Intangible Assets		3,222,688		—		—			—			—		—			—			3,222,688
Twelve Months Ended December 31, 2006
Total Revenue	$	50,754,327	$	20,535,062	$	5,015,189		$	963,360		$	3,049,440	$	390,404		$	(906,275	)	$	79,801,507
Net Interest Income		22,418,974		8,820,525		1,728,918			445,954			—		(3,072,699	)		(445,980	)		29,895,692
Income from Continuing Operations		5,588,203		1,634,451		(2,404,317	)		50,588			703,570		(2,895,349	)		(119,882	)		2,557,264
Total Assets		826,583,341		342,574,303		107,234,480			1,311,990			—		10,133,185			(16,162,343	)		1,271,674,956
Allowance for Loan/Lease Losses		6,472,445		3,227,010		912,627			—			—		—			—			10,612,082
Goodwill and Intangible Assets		3,222,688		—		—			—			—		—			—			3,222,688

Note 22. Fair Value Measurements

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements. There was no impact on the consolidated financial statements of the Company as a result of this adoption.

82

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 22. Fair Value Measurements (Continued)

SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value. It also establishes a hierarchy for determining fair value measurement. The hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities. The three levels are as follows:

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

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

• Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement

Assets measured at fair value on a recurring basis comprise the following at December 31, 2008:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
(dollars in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
Securities available for sale	$	255,726	$	216	$	255,510	$	—

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

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

Certain financial assets are measured at fair value on a non-recurring basis; that is, the instruments 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). Financial assets measured at fair value on a non-recurring basis were not significant at December 31, 2008.

83

QCR Holdings, Inc.
and Subsidiaries

Notes to Consolidated Financial Statements

Note 23. Subsequent Event

On February 13, 2009, the Company issued 38,237 shares of Series D Preferred Stock to the U.S. Department of the Treasury (“Treasury”) for an aggregate purchase price of $38,237,000. The sale of Series D Preferred Stock is a result of the Company’s participation in Treasury’s voluntary Capital Purchase Program (“CPP”). This sale also includes the issuance of a warrant (“Warrant”) that allows Treasury to purchase up to 521,888 shares of common stock at an exercise price of $10.99.

The Series D Preferred Stock will qualify as Tier 1 capital and will pay cumulative dividends at a rate of 5% per annum for the first five years, and 9% per annum thereafter. The Series D Preferred Stock may be redeemed by the Company at any time, provided that the Company redeems at least 25 percent of the aggregate issue price of the Series D Preferred Stock. Any redemption of the Series D Preferred Stock will be at the per share liquidation amount of $1,000 per share, plus any accrued and unpaid dividends.

Prior to the third anniversary of Treasury’s purchase of the Series D Preferred Stock, unless the Series D Preferred Stock has been redeemed or Treasury has transferred all of the Series D Preferred Stock to one or more third parties, the consent of Treasury will be required for the Company to: (i) increase the dividend paid on its Common Stock; or (ii) repurchase its Common Stock or other equity or capital securities, other than in connection with benefit plans consistent with past practice. The Series D Preferred Stock will be non-voting except for class voting rights on matters that would adversely affect the rights of the holders of the Series D Preferred Stock.

The Warrant has a ten-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $10.99 per share of the Common Stock.

The Series D Preferred Stock and the Warrant were issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended. Upon the request of Treasury at any time, the Company has agreed to promptly enter into a deposit arrangement pursuant to which the Series D Preferred Stock may be deposited and depositary shares representing fractional shares of Series D Preferred Stock, may be issued. The Company has agreed to register the Warrant and the shares of Common Stock underlying the Warrant. Additionally, the Company has also agreed to register the shares of Series D Preferred Stock upon the written request of Treasury.

Treasury has the ability to unilaterally amend the CPP documents at any time to comply with changes in the law, and as a result, the terms of the CPP could change.

84

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures. An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) as of December 31, 2008. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports filed and submitted under the Exchange Act was recorded, processed, summarized and reported as and when required.

Management’s Report on Internal Control over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting includes controls and procedures designed 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. Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008. Management’s assessment is based on the criteria established in the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and was designed to provide reasonable assurance that the Company maintained effective internal control over financial reporting as of December 31, 2008. Based on this assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2008.

McGladrey & Pullen, LLP, the Company’s independent registered public accounting firm, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2008, which is included on the following page of this Form 10-K.

85

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
QCR Holdings, Inc.

We have audited QCR Holdings, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). QCR Holdings, Inc. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, QCR Holdings, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2008 and 2007, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008 of QCR Holdings, Inc. and subsidiaries and our report dated March 6, 2009 expressed an unqualified opinion.

/s/ McGladrey & Pullen, LLP

Davenport, Iowa
March 6, 2009

McGladrey & Pullen, LLP is a member firm of RSM International —
an affiliation of separate and independent legal entities.

86

Changes in Internal Control over Financial Reporting. During 2005, the Company underwent a comprehensive effort to ensure compliance with the requirements under Section 404 of the Sarbanes-Oxley Act of 2002. Continuing enhancements to the Company’s control environment were made during 2008 as part of the Company’s ongoing efforts to improve 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 effected, or are reasonably likely to affect the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

Part III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is set forth in the Company’s 2009 Proxy Statement and is incorporated herein by reference.

Item 11. Executive Compensation

The information required by this item is set forth under the caption “Executive Compensation” in the Company’s 2009 Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is set forth under the caption “Security Ownership of Certain Beneficial Owners” in the Company’s 2009 Proxy Statement and is incorporated herein by reference, or is presented below.

Equity Compensation Plan Information

The table below sets forth the following information as of December 31, 2008 for (i) all compensation plans previously approved by the Company’s stockholders and (ii) all compensation plans not previously approved by the Company’s stockholders:

(a)	the number of securities to be issued upon the exercise of outstanding options, warrants and rights;
(b)	the weighted-average exercise price of such outstanding options, warrants and rights; and
(c)	other than securities to be issued upon the exercise of such outstanding options, warrants and rights, the number of securities remaining available for future issuance under the plans.

87

EQUITY COMPENSATION PLAN INFORMATION

					Number of securities
	Number of securities				remaining available for
	to be issued upon		Weighted-average exercise		future issuance under
	exercise of		price of outstanding		equity compensation plans
	outstanding options,		options, warrants and		(excluding securities
	warrants and rights		rights		reflected in column(a))
Plan category	(a)		(b)		(c)
Equity compensation plans approved by stockholders		414,286	$	15.29		260,185	(1)
Equity compensation plans not approved by stockholders		—		—		—
Total		414,286	$	15.29		260,185	(1)

(1) Includes 57,139 shares available under the QCR Holdings, Inc. Employee Stock Purchase Plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is set forth under the captions “Security Ownership of Certain Beneficial Owners,” “Corporate Governance and the Board of Directors,” and “Transactions with Management and Directors” in the Company’s 2009 Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this item is set forth under the caption “Independent Registered Public Accounting Firm” in the 2009 Proxy statement and is incorporated herein by reference.

Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1. Financial Statements

These documents are listed in the Index to Consolidated Financial Statements under Item 8.

(a) 2. Financial Statement Schedules

Financial statement schedules are omitted, as they are not required or are not applicable, or the required information is shown in the consolidated financial statements and the accompanying notes thereto.

88

(a) 3. Exhibits

The following exhibits are either filed as a part of this Annual Report on Form 10-K or are incorporated herein by reference:

Exhibit Number.		Exhibit Description
	3.1	Certificate of Incorporation of QCR Holdings, Inc., as amended.
	3.2	Bylaws of QCR Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 of the Registrant’s Form 8-K dated December 20, 2007).
	4.1	Form of Stock Certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series D (incorporated herein by reference to Exhibit 4.1 of Registrant’s Form 8-K dated February 13, 2009).
	4.2	Warrant to Purchase Common Stock (incorporated herein by reference to Exhibit 4.2 of Registrant’s Form 8-K dated February 13, 2009).
	10.1	Employment Agreement between QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated January 1, 2004 (incorporated herein by reference to Exhibit 10.2 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003).
	10.2	Lease Agreement between Quad City Bank and Trust Company and 56 Utica L.L.C. (incorporated herein by reference to Exhibit 10.5 of Registrant’s Annual Report on Form 10-K for the year ended June 30, 2000).
	10.3	Employment Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated January 1, 2004 (incorporated herein by reference to Exhibit 10.6 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003).
	10.4	Employment Agreement between QCR Holdings, Inc. and Todd A. Gipple dated January 1, 2004 (incorporated herein by reference to Exhibit 10.11 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003).
	10.5	QCR Holdings, Inc. Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.1 of Registrant’s Form S-8, file No. 333-101356 dated November 20, 2002).
	10.6	Dividend Reinvestment Plan of QCR Holdings, Inc. (incorporated herein by reference to Exhibit 99.1 of Registrant’s Form S-3D, File No. 333-102699 dated January 24, 2003).
	10.7	Indenture by and between QCR Holdings, Inc. / QCR Holdings Statutory Trust II and U.S. Bank National Association, as debenture and institutional trustee, dated February 18, 2004 (incorporated herein by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10Q for the quarter ended March 31, 2004).
	10.8	Indenture by and between QCR Holdings, Inc. / QCR Holdings Statutory Trust III and U.S. Bank National Association, as debenture and institutional trustee, dated February 18, 2004 (incorporated herein by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10Q for the quarter ended March 31, 2004).
	10.9	Lease Agreement between Quad City Bank and Trust Company and 127 North Wyman Development, L.L.C. dated November 3, 2004 (incorporated herein by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2004).

89

Exhibit Number.		Exhibit Description
	10.10	2004 Stock Incentive Plan of QCR Holdings, Inc. (incorporated herein by reference to Exhibit B of Registrant’s Form Pre 14A, filed March 5, 2004, File No. 000-22208).
	10.11	QCR Holdings, Inc. 2008 Equity Incentive Plan (incorporated herein by reference to Appendix A to QCR Holdings, Inc.’s Definitive Proxy Statement on Schedule 14A dated March 25, 2008).
	10.12	Indenture by and between QCR Holdings, Inc./QCR Holdings Statutory Trust IV and Wells Fargo Bank, National Association, as debenture and institutional trustee, dated May 4, 2005 (incorporated herein by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005).
	10.13	Second Amended and Restated Operating Agreement between Quad City Bank and Trust Company and John Engelbrecht dated August 26, 2005 (incorporated herein by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
	10.14	Indenture by and between QCR Holdings, Inc./QCR Holdings Statutory Trust V and Wells Fargo Bank, National Association, as debenture and institutional trustee, dated February 24, 2006 (incorporated herein by reference to Exhibit 10.27 of the Registrant’s Annual Report on form 10-K for the year ended December 31, 2005).
	10.15	Employment Agreement by and between QCR Holdings, Inc., Quad City Bank and Trust Company and Michael A. Bauer, as amended and restated December 14, 2006 (incorporated herein by reference to Exhibit 10.31 of the Registrant’s Annual Report on form 10-K for the year ended December 31, 2006).
	10.16	Letter Agreement, dated February 13, 2009, by and between QCR Holdings, Inc., and the United States Department of the Treasury, which includes the Securities Purchase Agreement — Standard Terms attached as Exhibit A thereto, with respect to the issuance and sale of Fixed Rate Cumulative Perpetual Preferred Stock, Series D, and the Warrant to Purchase Common Stock (incorporated herein by reference to Exhibit 10.1 of Registrant’s Form 8-K dated February 13, 2009).
	10.17	Form of Waiver, executed by each of the Company’s senior executive officers (incorporated herein by reference to Exhibit 10.2 of Registrant’s Form 8-K dated February 13, 2009).
	10.18	Form of Omnibus Amendment, executed by the Company and each of the Company’s senior executive officers (incorporated herein by reference to Exhibit 10.3 of Registrant’s Form 8-K dated February 13, 2009).
	10.19	First Amendment to the Employment Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated December 27, 2008.
	10.20	First Amendment to the Employment Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated December 30, 2008.
	10.21	First Amendment to the Employment Agreement between QCR Holdings, Inc. and Todd A. Gipple dated December 30, 2008.
	10.22	Executive Deferred Compensation Plan of QCR Holdings, Inc.

90

Exhibit Number.		Exhibit Description
	10.23	Executive Deferred Compensation Plan Participation Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated October 24, 2008.
	10.24	Executive Deferred Compensation Plan Participation Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated October 24, 2008.
	10.25	Executive Deferred Compensation Plan Participation Agreement between QCR Holdings, Inc. and Todd A. Gipple dated October 24, 2008.
	10.26	Executive Deferred Compensation Plan Participation Agreement between Quad City Bank and Trust Company and Michael A. Bauer dated December 31, 2008.
	10.27	Amended and Restated Non-Qualified Supplemental Executive Retirement Plan of QCR Holdings, Inc.
	10.28	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated December 31, 2008.
	10.29	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated December 31, 2008.
	10.30	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement between QCR Holdings, Inc. and Todd A. Gipple dated December 31, 2008.
	10.31	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Michael A. Bauer dated December 31, 2008.
	10.32	2005 Deferred Income Plan of QCR Holdings, as amended and restated on October 23, 2008.
	21.1	Subsidiaries of QCR Holdings, Inc. (exhibit is being filed herewith).
	23.1	Consent of Independent Registered Public Accounting Firm — McGladrey & Pullen, LLP (exhibit is being filed herewith).
	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.

91

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	QCR HOLDINGS, INC.
Dated: March 6, 2009	By:	/s/ Douglas M. Hultquist
		Douglas M. Hultquist
		President and Chief Executive Officer
Dated: March 6, 2009	By:	/s/ Todd A. Gipple
		Todd A. Gipple
		Executive Vice President, Chief Operating Officer, and Chief Financial Officer

92

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/ James J. Brownson James J. Brownson	Chairman of the Board of Directors	March 6, 2009
/s/ Douglas M. Hultquist Douglas M. Hultquist	President, Chief Executive Officer and Director	March 6, 2009
/s/ Michael A. Bauer	Director	March 6, 2009
Michael A. Bauer
/s/ Larry J. Helling	Director	March 6, 2009
Larry J. Helling
/s/ Mark C. Kilmer	Director	March 6, 2009
Mark C. Kilmer
/s/ John K. Lawson	Director	March 6, 2009
John K. Lawson
/s/ Charles M. Peters	Director	March 6, 2009
Charles M. Peters
/s/ Ronald G. Peterson	Director	March 6, 2009
Ronald G. Peterson
/s/ John A. Rife	Director	March 6, 2009
John A. Rife
/s/ John D. Whitcher	Director	March 6, 2009
John D. Whitcher
/s/ Marie Z. Ziegler	Director	March 6, 2009
Marie Z. Ziegler

93

APPENDIX A

SUPERVISION AND REGULATION

General

Financial institutions, their holding companies and their affiliates are extensively regulated under federal and state law. As a result, the growth and earnings performance of the Company may be affected not only by management decisions and general economic conditions, but also by the requirements of federal and state statutes and by the regulations and policies of various bank regulatory authorities, including the Iowa Superintendent of Banking (the “Iowa Superintendent”), the State of Illinois Department of Financial and Professional Regulation (the “Illinois DFPR”), the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Federal Deposit Insurance Corporation (the “FDIC”). Furthermore, taxation laws administered by the Internal Revenue Service and state taxing authorities and securities laws administered by the Securities and Exchange Commission (the “SEC”) and state securities authorities have an impact on the business of the Company. The effect of these statutes, regulations and regulatory policies may be significant, and cannot be predicted with a high degree of certainty.

Federal and state laws and regulations generally applicable to financial institutions regulate, among other things, the scope of business, the kinds and amounts of investments, reserve requirements, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers and consolidations and the payment of dividends. This system of supervision and regulation establishes a comprehensive framework for the respective operations of the Company and its subsidiaries and is intended primarily for the protection of the FDIC-insured deposits and depositors of the Banks, rather than shareholders. In addition to this generally applicable regulatory framework, recent turmoil in the credit markets prompted the enactment of unprecedented legislation that has allowed the U.S. Treasury to make equity capital available to qualifying financial institutions to help restore confidence and stability in the U.S. financial markets, which imposes additional requirements on institutions in which the U.S. Treasury Department invests.

The following is a summary of the material elements of the regulatory framework that applies to the Company and its subsidiaries. It does not describe all of the statutes, regulations and regulatory policies that apply, nor does it restate all of the requirements of those that are described. As such, the following is qualified in its entirety by reference to applicable law. Any change in statutes, regulations or regulatory policies may have a material effect on the business of the Company and its subsidiaries.

A-1

The Company

General. The Company, as the sole shareholder of the Banks (as defined below), is a bank holding company. As a bank holding company, the Company is registered with, and is subject to regulation by, the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHCA”). In accordance with Federal Reserve policy, the Company is expected to act as a source of financial strength to the Banks and to commit resources to support the Banks in circumstances where the Company might not otherwise do so. Under the BHCA, the Company is subject to periodic examination by the Federal Reserve. The Company is also required to file with the Federal Reserve periodic reports of the Company’s operations and such additional information regarding the Company and its subsidiaries as the Federal Reserve may require.

Acquisitions, Activities and Change in Control. The primary purpose of a bank holding company is to control and manage banks. The BHCA generally requires the prior approval of the Federal Reserve for any merger involving a bank holding company or any acquisition by a bank holding company of another bank or bank holding company. Subject to certain conditions (including deposit concentration limits established by the BHCA), the Federal Reserve may allow a bank holding company to acquire banks located in any state of the United States. In approving interstate acquisitions, the Federal Reserve is required to give effect to applicable state law limitations on the aggregate amount of deposits that may be held by the acquiring bank holding company and its insured depository institution affiliates in the state in which the target bank is located (provided that those limits do not discriminate against out-of-state depository institutions or their holding companies) and state laws that require that the target bank have been in existence for a minimum period of time (not to exceed five years) before being acquired by an out-of-state bank holding company.

The BHCA generally prohibits the Company from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries. This general prohibition is subject to a number of exceptions. The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve to be “so closely related to banking ... as to be a proper incident thereto.” This authority would permit the Company to engage in a variety of banking-related businesses, including the ownership and operation of a thrift, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development), and mortgage banking and brokerage. The BHCA generally does not place territorial restrictions on the domestic activities of non-bank subsidiaries of bank holding companies.

Additionally, bank holding companies that meet certain eligibility requirements prescribed by the BHCA and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance underwriting and sales, merchant banking and any other activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature, incidental to any such financial activity or complementary to any such financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. As of the date of this filing, the Company has not applied for approval to operate as a financial holding company.

Federal law also prohibits any person or company from acquiring “control” of an FDIC- insured depository institution or its holding company without prior notice to the appropriate federal bank regulator. “Control” is conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company, but may arise under certain circumstances between 10% and 24.99% ownership.

A-2

Capital Requirements. Bank holding companies are required to maintain minimum levels of capital in accordance with Federal Reserve capital adequacy guidelines. If capital levels fall below the minimum required levels, a bank holding company, among other things, may be denied approval to acquire or establish additional banks or non-bank businesses.

The Federal Reserve’s capital guidelines establish the following minimum regulatory capital requirements for bank holding companies: (i) a risk-based requirement expressed as a percentage of total assets weighted according to risk; and (ii) a leverage requirement expressed as a percentage of total assets. The risk-based requirement consists of a minimum ratio of total capital to total risk-weighted assets of 8% and a minimum ratio of Tier 1 capital to total risk-weighted assets of 4%. The leverage requirement consists of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly rated companies, with a minimum requirement of 4% for all others. For purposes of these capital standards, Tier 1 capital consists primarily of permanent stockholders’ equity less intangible assets (other than certain loan servicing rights and purchased credit card relationships). Total capital consists primarily of Tier 1 capital plus certain other debt and equity instruments that do not qualify as Tier 1 capital and a portion of the company’s allowance for loan and lease losses.

The risk-based and leverage standards described above are minimum requirements. Higher capital levels will be required if warranted by the particular circumstances or risk profiles of individual banking organizations. For example, the Federal Reserve’s capital guidelines contemplate that additional capital may be required to take adequate account of, among other things, interest rate risk, or the risks posed by concentrations of credit, nontraditional activities or securities trading activities. Further, any banking organization experiencing or anticipating significant growth would be expected to maintain capital ratios, including tangible capital positions (i.e., Tier 1 capital less all intangible assets), well above the minimum levels. As of December 31, 2008, the Company had regulatory capital in excess of the Federal Reserve’s minimum requirements.

Emergency Economic Stabilization Act of 2008. Recent events in the U.S. and global financial markets, including the deterioration of the worldwide credit markets, have created significant challenges for financial institutions throughout the country. Dramatic declines in the housing market during the past year, marked by falling home prices and increasing levels of mortgage foreclosures, have resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks. In addition, many lenders and institutional investors have reduced, and in some cases, ceased to provide funding to borrowers, including other financial institutions, as a result of concern about the stability of the financial markets and the strength of counterparties.

In response to the crises affecting the U.S. banking system and financial markets and to bolster the distressed economy and improve consumer confidence in the financial system, on October 3, 2008, the U.S. Congress passed, and the President signed into law, the Emergency Economic Stabilization Act of 2008 (the “EESA”). The EESA authorizes the Secretary of the United States Department of Treasury (“Treasury”) to implement various temporary emergency programs designed to strengthen the capital positions of financial institutions and stimulate the availability of credit within the U.S. financial system. Financial institutions participating in certain of the programs established under the EESA will be required to adopt Treasury’s standards for executive compensation, as they are modified and amended from time to time by Congress, and corporate governance.

A-3

The TARP Capital Purchase Program. On October 14, 2008, Treasury announced that it will provide Tier 1 capital (in the form of perpetual preferred stock) to eligible financial institutions. This program, known as the TARP Capital Purchase Program (the “CPP”), allocates $250 billion from the $700 billion authorized by the EESA to Treasury for the purchase of senior preferred shares from qualifying financial institutions (the “CPP Preferred Stock”). Under the program, eligible institutions are able to sell equity interests to the Treasury in amounts equal to between 1% and 3% of the institution’s risk-weighted assets. The CPP Preferred Stock will generally be non-voting and will pay dividends at the rate of 5% per annum for the first five years and thereafter at a rate of 9% per annum. In conjunction with the purchase of the CPP Preferred Stock, the Treasury will receive warrants to purchase common stock from the participating public institutions with an aggregate market price equal to 15% of the preferred stock investment. Participating financial institutions will be required to adopt Treasury’s standards for executive compensation and corporate governance for the period during which Treasury holds equity issued under the CPP.

Pursuant to the CPP, on February 13, 2009, The Company entered into a Letter Agreement with Treasury, pursuant to which the Company issued (i) 38,237 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series D and (ii) a warrant to purchase 521,888 shares of the Company’s common stock for an aggregate purchase price of $38.237 million in cash. The Company also expects that its federal regulators and the Treasury will maintain significant oversight over the Company as a participating institution, to evaluate how it uses the capital provided and to ensure that it strengthens its efforts to help its borrowers avoid foreclosure, which is one of the core aspects of the EESA.

Dividend Payments. The Company’s ability to pay dividends to its shareholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies. As a Delaware corporation, the Company is subject to the limitations of the Delaware General Corporation Law (the “DGCL”), which allow the Company to pay dividends only out of its surplus (as defined and computed in accordance with the provisions of the DGCL) or if the Company has no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Additionally, policies of the Federal Reserve caution that a bank holding company should not pay cash dividends unless its net income available to common shareholders over the past year has been sufficient to fully fund the dividends and the prospective rate of earnings retention appears consistent with its capital needs, asset quality, and overall financial condition. The Federal Reserve also possesses enforcement powers over bank holding companies and their non-bank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies. The terms of the CPP Preferred Stock provide that no dividends on any common or preferred stock that ranks equal to or junior to the CPP Preferred Stock may be paid unless and until all accrued and unpaid dividends for all past dividend periods on the CPP Preferred Stock have been fully paid.

A-4

Federal Securities Regulation. The Company’s common stock is registered with the SEC under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Consequently, the Company is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act.

The Banks

Quad City Bank and Trust Company (“Quad City Bank & Trust”) and Cedar Rapids Bank and Trust Company (“Cedar Rapids Bank & Trust”) are chartered under Iowa law (collectively, the “Iowa Banks”) and Rockford Bank and Trust Company (“Rockford Bank & Trust”) is chartered under Illinois law (collectively, the “Banks”). The deposit accounts of the Banks are insured by the FDIC’s Deposit Insurance Fund (“DIF”) to the maximum extent provided under federal law and FDIC regulations. The Banks are also members of the Federal Reserve System (“member banks”).

As Iowa-chartered, FDIC-insured member banks, the Iowa Banks are subject to the examination, supervision, reporting and enforcement requirements of the Iowa Superintendent, as the chartering authority for Iowa banks. As an Illinois-chartered, FDIC-insured member bank, Rockford Bank & Trust is subject to the examination, supervision, reporting and enforcement requirements of the Illinois DFPR, as the chartering authority for Illinois banks. The Banks are also subject to the examination, reporting and enforcement requirements of the Federal Reserve, the primary federal regulator of member banks. In addition, the FDIC, as administrator of the DIF, has regulatory authority over the Banks.

Deposit Insurance. As FDIC-insured institutions, the Banks are required to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted a risk-based assessment system whereby FDIC-insured depository institutions pay insurance premiums at rates based on their risk classification. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to the regulators. Under the regulations of the FDIC, as presently in effect, insurance assessments range from 0.12% to 0.50% of total deposits for the first quarter 2009 assessment period only (subject to the application of assessment credits, if any, issued by the FDIC in 2008). Effective April 1, 2009, insurance assessments will range from 0.07% to 0.78% of total deposits, depending on an institution’s risk classification, its levels of unsecured debt and secured liabilities, and, in certain cases, its level of brokered deposits. In addition, under an interim rule, the FDIC plans to impose an emergency special assessment on insured depository institutions on June 30, 2009. The emergency special assessment will be an amount equal to 0.20% of total deposits as of June 30, 2009, and will be collected on September 30, 2009. The interim rule also authorizes the FDIC to impose additional emergency special assessments after June 30, 2009, of up to 0.10% of total deposits, whenever the FDIC estimates that the reserve ratio of the deposit insurance fund will fall to a level that the FDIC believes would adversely affect public confidence in federal deposit insurance or to a level that will be close to zero or negative at the end of a calendar quarter.

A-5

FDIC Temporary Liquidity Guarantee Program. In connection with the recently enacted EESA and in conjunction with the Treasury’s actions to address the current credit and liquidity crisis in financial markets, the FDIC announced the Temporary Liquidity Guarantee Program, which will temporarily provide to participating institutions unlimited deposit insurance coverage for non-interest bearing transaction accounts maintained at FDIC insured institutions (the “transaction account guarantee program”), and provide a limited guarantee on certain newly-issued senior unsecured debt (the “debt guarantee program”). For an initial 30-day period, all eligible financial institutions were automatically covered under this program without incurring any fees. Institutions that did not opt out by December 5, 2008, will be subject to the following potential assessments for participation: (i) for the debt guarantee program, between 50 and 100 basis points per annum for eligible senior unsecured debt (depending on the maturity date) issued between October 14, 2008 and June 30, 2009; and (ii) for the transaction account guarantee program, 10 basis points per annum on amounts in excess of $250,000 in non-interest bearing transaction accounts from November 13, 2008 through and including December 31, 2009. The Banks decided to continue to participate in these programs and did not opt out. As a result, the Banks expect to incur fees associated with the programs.

FICO Assessments. The Financing Corporation (“FICO”) is a mixed-ownership governmental corporation chartered by the former Federal Home Loan Bank Board pursuant to the Federal Savings and Loan Insurance Corporation Recapitalization Act of 1987 to function as a financing vehicle for the recapitalization of the former Federal Savings and Loan Insurance Corporation. FICO issued 30-year non-callable bonds of approximately $8.2 billion that mature by 2019. Since 1996, federal legislation has required that all FDIC-insured depository institutions pay assessments to cover interest payments on FICO’s outstanding obligations. These FICO assessments are in addition to amounts assessed by the FDIC for deposit insurance. During the year ended December 31, 2008, the FICO assessment rate was approximately 0.01% of deposits.

Supervisory Assessments. Each of the Banks is required to pay supervisory assessments to its respective state banking regulator to fund the operations of that agency. The amount of the assessment payable by each Bank is calculated on the basis of that Bank’s total assets. During the year ended December 31, 2008, the Iowa Banks paid supervisory assessments to the Iowa Superintendent totaling $140 thousand and Rockford Bank & Trust paid supervisory assessments to the Illinois DFPR totaling $38 thousand. In addition, during the year ended December 31, 2008, the Company’s Wisconsin bank subsidiary, First Wisconsin Bank and Trust Company, which was sold by the Company in 2008, paid supervisory assessments to its chartering authority, the Wisconsin Department of Financial Institutions, totaling $3 thousand.

Capital Requirements. Banks are generally required to maintain capital levels in excess of other businesses. The Federal Reserve has established the following minimum capital standards for state-chartered insured member banks, such as the Banks: (i) a leverage requirement consisting of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly-rated banks with a minimum requirement of at least 4% for all others; and (ii) a risk-based capital requirement consisting of a minimum ratio of total capital to total risk-weighted assets of 8% and a minimum ratio of Tier 1 capital to total risk-weighted assets of 4%. In general, the components of Tier 1 capital and total capital are the same as those for bank holding companies discussed above.

A-6

The capital requirements described above are minimum requirements. Higher capital levels will be required if warranted by the particular circumstances or risk profiles of individual institutions. For example, regulations of the Federal Reserve provide that additional capital may be required to take adequate account of, among other things, interest rate risk or the risks posed by concentrations of credit, nontraditional activities or securities trading activities.

Further, federal law and regulations provide various incentives for financial institutions to maintain regulatory capital at levels in excess of minimum regulatory requirements. For example, a financial institution that is “well-capitalized” may qualify for exemptions from prior notice or application requirements otherwise applicable to certain types of activities and may qualify for expedited processing of other required notices or applications. Additionally, one of the criteria that determines a bank holding company’s eligibility to operate as a financial holding company is a requirement that all of its financial institution subsidiaries be “well-capitalized.” Under the regulations of the Federal Reserve, in order to be “well-capitalized” a financial institution must maintain a ratio of total capital to total risk-weighted assets of 10% or greater, a ratio of Tier 1 capital to total risk-weighted assets of 6% or greater and a ratio of Tier 1 capital to total assets of 5% or greater.

Federal law also provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions. The extent of the regulators’ powers depends on whether the institution in question is “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” in each case as defined by regulation. Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include: (i) requiring the institution to submit a capital restoration plan; (ii) limiting the institution’s asset growth and restricting its activities; (iii) requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; (iv) restricting transactions between the institution and its affiliates; (v) restricting the interest rate the institution may pay on deposits; (vi) ordering a new election of directors of the institution; (vii) requiring that senior executive officers or directors be dismissed; (viii) prohibiting the institution from accepting deposits from correspondent banks; (ix) requiring the institution to divest certain subsidiaries; (x) prohibiting the payment of principal or interest on subordinated debt; and (xi) ultimately, appointing a receiver for the institution.

As of December 31, 2008: (i) none of the Banks was subject to a directive from the Federal Reserve to increase its capital to an amount in excess of the minimum regulatory capital requirements; (ii) each of the Banks exceeded its minimum regulatory capital requirements under Federal Reserve capital adequacy guidelines; and (iii) each of the Banks was “well-capitalized,” as defined by Federal Reserve regulations.

Liability of Commonly Controlled Institutions. Under federal law, institutions insured by the FDIC may be liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with the default of commonly controlled FDIC-insured depository institutions or any assistance provided by the FDIC to commonly controlled FDIC-insured depository institutions in danger of default. Because the Company controls each of the Banks, the Banks are commonly controlled for purposes of these provisions of federal law.

A-7

Dividend Payments. The primary source of funds for the Company is dividends from the Banks. In general, the Banks may only pay dividends either out of their historical net income after any required transfers to surplus or reserves have been made or out of their retained earnings. The Federal Reserve Act also imposes limitations on the amount of dividends that may be paid by state member banks, such as the Banks. Generally, a member bank may pay dividends out of its undivided profits, in such amounts and at such times as the bank’s board of directors deems prudent. Without prior Federal Reserve approval, however, a state member bank may not pay dividends in any calendar year that, in the aggregate, exceed the bank’s calendar year-to-date net income plus the bank’s retained net income for the two preceding calendar years.

The payment of dividends by any financial institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. As described above, each of the Banks exceeded its minimum capital requirements under applicable guidelines as of December 31, 2008. As of December 31, 2008, approximately $7.4 million would have been available to be paid as dividends by the Banks. Notwithstanding the availability of funds for dividends, however, the Federal Reserve may prohibit the payment of any dividends by the Banks if the Federal Reserve determines such payment would constitute an unsafe or unsound practice.

Insider Transactions. The Banks are subject to certain restrictions imposed by federal law on extensions of credit to the Company and its subsidiaries, on investments in the stock or other securities of the Company and its subsidiaries and the acceptance of the stock or other securities of the Company or its subsidiaries as collateral for loans made by the Banks. Certain limitations and reporting requirements are also placed on extensions of credit by the Banks to their respective directors and officers, to directors and officers of the Company and its subsidiaries, to principal shareholders of the Company and to “related interests” of such directors, officers and principal shareholders. In addition, federal law and regulations may affect the terms upon which any person who is a director or officer of the Company or any of its subsidiaries or a principal shareholder of the Company may obtain credit from banks with which the Banks maintain correspondent relationships.

Safety and Soundness Standards. The federal banking agencies have adopted guidelines that establish operational and managerial standards to promote the safety and soundness of federally insured depository institutions. The guidelines set forth standards for internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, asset quality and earnings.

In general, the safety and soundness guidelines prescribe the goals to be achieved in each area, and each institution is responsible for establishing its own procedures to achieve those goals. If an institution fails to comply with any of the standards set forth in the guidelines, the institution’s primary federal regulator may require the institution to submit a plan for achieving and maintaining compliance. If an institution fails to submit an acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted by its primary federal regulator, the regulator is required to issue an order directing the institution to cure the deficiency. Until the deficiency cited in the regulator’s order is cured, the regulator may restrict the institution’s rate of growth, require the institution to increase its capital, restrict the rates the institution pays on deposits or require the institution to take any action the regulator deems appropriate under the circumstances. Noncompliance with the standards established by the safety and soundness guidelines may also constitute grounds for other enforcement action by the federal banking regulators, including cease and desist orders and civil money penalty assessments.

A-8

Branching Authority. The Iowa Banks have the authority under Iowa law to establish branches anywhere in the State of Iowa, subject to receipt of all required regulatory approvals. In 1997, the Company formed a de novo Illinois bank that was merged into Quad City Bank & Trust, resulting in the Quad City Bank & Trust establishing a branch office in Illinois. Under Illinois law, Quad City Bank & Trust may continue to establish offices in Illinois to the same extent permitted for an Illinois bank (subject to certain conditions, including certain regulatory notice requirements). Similarly, Rockford Bank & Trust has the authority under Illinois law to establish branches anywhere in the State of Illinois, subject to receipt of all required regulatory approvals.

Federal law permits state and national banks to merge with banks in other states subject to: (i) regulatory approval; (ii) federal and state deposit concentration limits; and (iii) state law limitations requiring the merging bank to have been in existence for a minimum period of time (not to exceed five years) prior to the merger. The establishment of new interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) is permitted only in those states the laws of which expressly authorize such expansion.

State Bank Investments and Activities. Each of the Banks generally is permitted to make investments and engage in activities directly or through subsidiaries as authorized by the laws of the state under which it is chartered. However, under federal law and FDIC regulations, FDIC-insured state banks are prohibited, subject to certain exceptions, from making or retaining equity investments of a type, or in an amount, that are not permissible for a national bank. Federal law and FDIC regulations also prohibit FDIC-insured state banks and their subsidiaries, subject to certain exceptions, from engaging as principal in any activity that is not permitted for a national bank unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines the activity would not pose a significant risk to the deposit insurance fund of which the bank is a member. These restrictions have not had, and are not currently expected to have, a material impact on the operations of the Banks.

Federal Reserve System. Federal Reserve regulations, as presently in effect, require depository institutions to maintain reserves against their transaction accounts (primarily NOW and regular checking accounts), as follows: for transaction accounts aggregating $44.4 million or less, the reserve requirement is 3% of total transaction accounts; and for transaction accounts aggregating in excess of $44.4 million, the reserve requirement is $1.023 million plus 10% of the aggregate amount of total transaction accounts in excess of $44.4 million. The first $10.3 million of otherwise reservable balances are exempted from the reserve requirements. These reserve requirements are subject to annual adjustment by the Federal Reserve. The Banks are in compliance with the foregoing requirements.

A-9

Appendix B

GUIDE 3 INFORMATION

The following tables and schedules show selected comparative financial information required by the Securities and Exchange Commission Securities Act Guide 3, regarding the business of QCR Holdings, Inc. (the “Company”) for the periods shown.

I. Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and Interest Differential

A. and B. Consolidated Average Balance Sheets and Analysis of Net Interest Earnings.

The information requested is disclosed in Management’s Discussion and Analysis section of the the Company’s Form 10-K for the fiscal year ended December 31, 2008

C. Analysis of Changes of Interest Income/Interest Expense

The information requested is disclosed in Management’s Discussion and Analysis section of the the Company’s Form 10-K for the fiscal year ended December 31, 2008

B-1

II. Investment Portfolio.

A. Investment Securities

The following tables present the amortized cost and fair value of investment securities as of December 31, 2008, 2007 and 2006.

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		(Losses)			Value
			(Dollars in Thousands)
December 31, 2008
Securities held to maturity:
Other bonds	$	350	$	—	$	—		$	350
Totals	$	350	$	—	$	—		$	350
Securities available for sale:
U.S. Treasury securities	$	4,318	$	71	$	—		$	4,389
U.S. gov’t. sponsored agency securities		220,560		5,773		(90	)		226,243
Mortgage-backed securities		803		6		(1	)		808
Municipal securities		23,259		308		(219	)		23,348
Trust preferred securities		200		—		(35	)		165
Other securities		1,133		18		(378	)		773
Totals	$	250,273	$	6,176	$	(723	)	$	255,726
December 31, 2007
Securities held to maturity:
Other bonds	$	350	$	—	$	—		$	350
Totals	$	350	$	—	$	—		$	350
Securities available for sale:
U.S. Treasury securities	$	3,304	$	59	$	—		$	3,363
U.S. gov’t. sponsored agency securities		182,680		3,718		(28	)		186,370
Mortgage-backed securities		1,600		6		(8	)		1,598
Municipal securities		25,119		490		(39	)		25,570
Corporate securities		1,865		12		—			1,877
Trust preferred securities		200		—		—			200
Other securities		1,201		64		(36	)		1,229
Totals	$	215,969	$	4,349	$	(111	)	$	220,207
December 31, 2006
Securities held to maturity:
Other bonds	$	350	$	8	$	—		$	358
Totals	$	350	$	8	$	—		$	358
Securities available for sale:
U.S. Treasury securities	$	2,107	$	4	$	—		$	2,111
U.S. gov’t. sponsored agency securities		157,623		199		(843	)		156,979
Mortgage-backed securities		2,084		—		(52	)		2,032
Municipal securities		28,584		372		(79	)		28,877
Corporate securities		2,367		28		—			2,395
Trust preferred securities		450		11		—			461
Other securities		1,176		400		(7	)		1,569
Totals	$	194,391	$	1,014	$	(981	)	$	194,424

B-2

B. Investment Securities, Maturities, and Yields

The following table presents the maturity of securities held on December 31, 2008 and the weighted average stated coupon rates by range of maturity:

			Weighted
	Amortized		Average
	Cost		Yield
	(Dollars in Thousands)
U.S. Treasury securities:
Within 1 year		4,318		4.33	%
Total	$	4,318		4.33	%
U.S. Gov’t. Sponsored Agency securities:
Within 1 year	$	10,000		4.62	%
After 1 but within 5 years		69,119		4.34	%
After 5 but within 10 years		91,223		5.39	%
After 10 years		50,218		5.59	%
Total	$	220,560		5.07	%
Mortgage-backed securities:
Within 1 year	$	5		5.00	%
After 1 but within 5 years		798		4.81	%
Total	$	803		4.81	%
Municipal securities:
Within 1 year	$	1,456		5.35	%
After 1 but within 5 years		6,034		4.78	%
After 5 but within 10 years		7,022		4.22	%
After 10 years		8,747		4.27	%
Total	$	23,259		4.45	%
Trust preferred securities:
After 10 years	$	200		7.80	%
Other bonds:
After 1 but within 5 years		300		5.48	%
After 5 but within 10 years		50		5.43	%
Total	$	350		5.47	%
Other securities with no maturity or stated face rate	$	1,133

B-3

III. Loan/Lease Portfolio.

A. Types of Loans/Leases

The composition of the loan/lease portfolio is presented as follows:

	December 31,
	2008			2007			2006			2005			2004
	(Dollars in Thousands)
Real estate loans held for sale — residential mortgage	$	7,377		$	6,508		$	6,187		$	2,632		$	3,499
Real estate loans — residential mortgage		69,466			68,281			68,913			54,125			52,423
Real estate loans — construction		2,385			8,539			6,534			2,811			3,608
Commercial loans		436,699			353,401			396,599			323,732			286,419
Commercial real estate loans		529,087			472,284			350,339			269,730			246,098
Direct financing leases		79,408			67,224			52,628			34,911			—
Installment and other consumer loans		88,540			79,220			78,058			67,090			55,736
Total loans/leases	$	1,212,962		$	1,055,457		$	959,258		$	755,031		$	647,783
Deferred loan/lease origination costs, net of fees		1,727			1,531			1,489			1,223			568
Less allowance for estimated losses on loans/leases		(17,809	)		(11,315	)		(10,612	)		(8,884	)		(9,262	)
Net loans/leases	$	1,196,880		$	1,045,673		$	950,135		$	747,370		$	639,089

B-4

III. Loan/Lease Portfolio.

B. Maturities and Sensitivities of Loans/Leases to Changes in Interest Rates

							Maturities After One Year
	Due in one		Due after one		Due after		Predetermined		Adjustable
At December 31, 2008	year or less		through 5 years		5 years		interest rates		interest rates
	(Dollars in Thousands)
Real estate loans held for sale — residential mortgage	$	—	$	—	$	7,377	$	7,377	$	—
Real estate loans — residential mortgage		439		217		68,810		16,070		52,957
Real estate loans — construction		2,385		—		—		—		—
Commercial loans		183,254		194,000		59,445		183,335		70,110
Commercial real estate loans		107,339		320,115		101,633		366,596		55,152
Direct financing leases		4,136		62,761		12,511		75,272		—
Installment and other consumer loans		32,457		46,451		9,632		35,313		20,770
Total loans/leases	$	330,010	$	623,544	$	259,408	$	683,963	$	198,989

							Maturities After One Year
	Due in one		Due after one		Due after		Predetermined		Adjustable
At December 31, 2007	year or less		through 5 years		5 years		interest rates		interest rates
	(Dollars in Thousands)
Real estate loans held for sale — residential mortgage	$	—	$	—	$	6,508	$	6,508	$	—
Real estate loans — residential mortgage		2,413		331		65,537		14,452		51,416
Real estate loans — construction		8,540		—		—		—		—
Commercial loans		140,072		162,188		51,141		159,875		53,454
Commercial real estate loans		132,961		231,085		108,238		289,835		49,488
Direct financing leases		2,723		48,965		15,535		64,500		—
Installment and other consumer loans		28,116		44,583		6,521		34,289		16,815
Total loans/leases	$	314,825	$	487,152	$	253,480	$	569,459	$	171,173

B-5

III. Loan/Lease Portfolio.

C. Risk Elements

1. Nonaccrual, Past Due and Restructured Loans/Leases

The following tables represent Nonaccrual, Past Due, Renegotiated Loans/Leases, and other Real Estate Owned:

	December 31,
	2008		2007		2006		2005		2004
	(Dollars in Thousands)
Loans/leases accounted for on nonaccrual basis	$	19,711	$	6,488	$	6,538	$	2,579	$	7,608
Accruing loans/leases past due 90 days or more		222		500		755		604		1,133
Other real estate owned		3,857		496		93		545		1,925
Troubled debt restructurings		—		—		—		—		—
Totals	$	23,790	$	7,484	$	7,386	$	3,728	$	10,666

The policy of the Company is to place a loan/lease on nonaccrual status if: (a) payment in full of interest or principal is not expected; or (b) principal or interest has been in default for a period of 90 days or more unless the obligation is both in the process of collection and well secured. A loan/lease is well secured if it is secured by collateral with sufficient market value to repay principal and all accrued interest. A debt is in the process of collection if collection of the debt is proceeding in due course either through legal action, including judgment enforcement procedures, or in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in restoration to current status.

2. Potential Problem Loans/Leases. To management’s best knowledge, there are no such significant loans/leases that have not been disclosed in the above table.

3. Foreign Outstandings. None.

4. Loan/Lease Concentrations. As of December 31, 2008, there was a single concentration of loans/leases exceeding 10%, which is not otherwise disclosed in Item III. A. That concentration is Lessors of Non-Residential Buildings & Dwellings at 15.9%.

D. Other Interest-Bearing Assets

As of December 31, 2008, there are no interest-bearing assets required to be disclosed in this Appendix.

B-6

IV. Summary of Loan/Lease Loss Experience.

A. Analysis of the Allowance for Estimated Losses on Loans/Leases

The following tables summarize activity in the allowance for estimated losses on loans/leases of the Company:

	Years ended
	December 31,
	2008			2007			2006			2005			2004
				(Dollars in Thousands)
Average amount of loans/leases outstanding, before allowance for estimated losses on loans/leases	$	1,124,255		$	1,001,633		$	855,872		$	682,858		$	587,450
Allowance for estimated losses on loans/leases:
Balance, beginning of fiscal period	$	11,315		$	10,612		$	8,884		$	9,262		$	8,643
Charge-offs:
Commercial		(2,274	)		(1,581	)		(1,415	)		(1,530	)		(624	)
Real Estate		(326	)		(174	)		(45	)		(160	)		(49	)
Installment and other consumer		(1,085	)		(469	)		(460	)		(356	)		(292	)
Subtotal charge-offs		(3,685	)		(2,224	)		(1,920	)		(2,046	)		(965	)
Recoveries:
Commercial		733			327			262			245			137
Real Estate		81			173			52			25			—
Installment and other consumer		143			92			50			87			75
Subtotal recoveries		957			592			364			357			212
Net charge-offs		(2,728	)		(1,632	)		(1,556	)		(1,689	)		(753	)
Provision charged to expense		9,222			2,335			3,284			877			1,372
Acquisition of M2 Lease Funds, LLC		—			—			—			434			—
Balance, end of fiscal year	$	17,809		$	11,315		$	10,612		$	8,884		$	9,262
Ratio of net charge-offs to average loans/leases outstanding		0.24	%		0.16	%		0.18	%		0.25	%		0.13	%

B-7

B. Allocation of the Allowance for Estimated Losses on Loans/Leases

The following tables present the allowance for the estimated losses on loans/leases by type of loans/leases and the percentage of loans/leases in each category to total loans/leases:

	As of
	December 31, 2008					December 31, 2007					December 31, 2006
			% of Loans/Leases					% of Loans/Leases					% of Loans/Leases
	Amount		to Total Loans/Leases			Amount		to Total Loans/Leases			Amount		to Total Loans/Leases
						(Dollars in Thousands)
Real estate loans held for sale — residential mortgage	$	64		0.61	%	$	46		0.62	%	$	67		0.64	%
Real estate loans — residential mortgage		605		5.73			472		6.47			356		7.18
Real estate loans — construction		21		0.20			62		0.81			40		0.68
Commercial loans		8,260		36.00			4,697		33.48			4,465		41.35
Commercial real estate loans		6,255		43.62			4,064		44.75			3,943		36.52
Direct financing leases		1,402		6.54			874		6.37			805		5.49
Installment and other consumer loans		1,195		7.30			1,090		7.51			920		8.14
Unallocated		7	NA				10	NA				16	NA
Total	$	17,809		100.00	%	$	11,315		100.00	%	$	10,612		100.00	%

	As of
	December 31, 2005					December 31, 2004
			% of Loans/Leases					% of Loans
	Amount		to Total Loans/Leases			Amount		to Total Loans
			(Dollars in Thousands)
Real estate loans held for sale — residential mortgage	$	16		0.35	%	$	17		0.54	%
Real estate loans — residential mortgage		250		7.17			205		8.09
Real estate loans — construction		12		0.37			21		0.56
Commercial loans		3,999		35.72			4,532		44.22
Commercial real estate loans		3,332		42.88			3,891		37.99
Direct financing leases		546		4.62			—		0.00
Installment and other consumer loans		725		8.89			591		8.60
Unallocated		4	NA				5	NA
Total	$	8,884		100.00	%	$	9,262		100.00	%

B-8

V. Deposits.

The average amount of and average rate paid for the categories of deposits for the years ended December 31, 2008, 2007, and 2006 are discussed in the consolidated average balance sheets and can be found in the Management’s Discussion
and Analysis section of the Company’s Form 10-K for the fiscal year ended December 31, 2008.

Included in interest bearing deposits at December 31, 2008, were certificates of deposit totaling $347,631,421 that were $100,000 or greater. Maturities of these certificates were as follows:

	December 31,
	2008
	(Dollars in Thousands)
One to three months	$	146,230
Three to six months		62,125
Six to twelve months		61,706
Over twelve months		77,570
Total certificates of deposit greater than $100,000	$	347,631

VI. Return on Equity and Assets.

The following tables present the return on assets and equity and the equity to assets ratio of the Company:

	Years ended
	December 31,
	2008			2007			2006
	(Dollars in Thousands)
Average total assets	$	1,552,748		$	1,351,482		$	1,153,537
Average equity		87,952			75,018			57,763
Net income		6,709			5,777			2,802
Return on average assets		0.43	%		0.43	%		0.24	%
Return on average common equity		9.90	%		9.31	%		5.02	%
Return on average total equity		7.63	%		7.70	%		4.85	%
Dividend payout ratio		7.48	%		7.77	%		14.04	%
Average equity to average assets ratio		5.66	%		5.55	%		5.01	%

VII. Short Term Borrowings.

The information requested is disclosed in Note 8 to the December 31, 2008 Consolidated Financial Statements.

B-9

EXHIBIT INDEX

Exhibit Number		Exhibit Description
	3.1	Certificate of Incorporation of QCR Holdings, Inc., as amended.
	10.19	First Amendment to the Employment Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated December 27, 2008.
	10.20	First Amendment to the Employment Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated December 30, 2008.
	10.21	First Amendment to the Employment Agreement between QCR Holdings, Inc. and Todd A. Gipple dated December 30, 2008.
	10.22	Executive Deferred Compensation Plan of QCR Holdings, Inc.
	10.23	Executive Deferred Compensation Plan Participation Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated October 24, 2008.
	10.24	Executive Deferred Compensation Plan Participation Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated October 24, 2008.
	10.25	Executive Deferred Compensation Plan Participation Agreement between QCR Holdings, Inc. and Todd A. Gipple dated October 24, 2008.
	10.26	Executive Deferred Compensation Plan Participation Agreement between Quad City Bank and Trust Company and Michael A. Bauer dated December 31, 2008.
	10.27	Amended and Restated Non-Qualified Supplemental Executive Retirement Plan of QCR Holdings, Inc.
	10.28	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Douglas M. Hultquist dated December 31, 2008.
	10.29	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement between Cedar Rapids Bank and Trust Company and Larry J. Helling dated December 31, 2008.
	10.30	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement between QCR Holdings, Inc. and Todd A. Gipple dated December 31, 2008.
	10.31	Non-Qualified Supplemental Executive Retirement Plan Joinder Agreement among QCR Holdings, Inc., Quad City Bank and Trust Company and Michael A. Bauer dated December 31, 2008.
	10.32	2005 Deferred Income Plan of QCR Holdings, as amended and restated on October 23, 2008.
	21.1	Subsidiaries of QCR Holdings, Inc. (exhibit is being filed herewith).
	23.1	Consent of Independent Registered Public Accounting Firm — McGladrey & Pullen, LLP (exhibit is being filed herewith).
	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.

EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

ARTICLE I

NAME

The name of the corporation is:

Quad City Holdings, Inc.

ARTICLE II

REGISTERED OFFICE AND AGENT

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

ARTICLE III

PURPOSE

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

ARTICLE IV

AUTHORIZED STOCK

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

ARTICLE V

INCORPORATORS

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

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

ARTICLE VI

BYLAWS

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

ARTICLE VII

WRITTEN BALLOTS

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

ARTICLE VIII

AMENDMENTS

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

2

ARTICLE IX

INDEMNIFICATION

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

ARTICLE X

PERSONAL LIABILITY OF DIRECTORS

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

ARTICLE XI

CERTAIN ARRANGEMENTS BETWEEN THE
CORPORATION AND ITS CREDITORS

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

3

ARTICLE XII

BOARD OF DIRECTORS

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

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

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

4

ARTICLE XIII

ADDITIONAL VOTING REQUIREMENTS

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

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

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

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

(d) the voluntary dissolution of the corporation;

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

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

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

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

5

ARTICLE XIV

BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS

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

ARTICLE XV

STOCKHOLDERS’ ACTION

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

Dated: February 4, 1993.

/s/ John S. Gosma  

John S. Gosma, Esq. 

Being the sole incorporator of the corporation. 

6

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
QUAD CITY HOLDINGS, INC.

Adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware

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

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

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

ARTICLE IV

AUTHORIZED STOCK

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

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

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

7

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

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

ATTEST:

/s/ Richard R. Horst

Richard R. Horst

Secretary

8

CERTIFICATE OF CORRECTION

of

CERTIFICATE OF INCORPORATION

of

QUAD CITY HOLDINGS, INC.

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

1. The name of the corporation (hereinafter called the “Corporation”) is Quad City Holdings, Inc.

2. The Certificate of Incorporation of the Corporation, which was filed by the Secretary of Delaware of February 4, 1993, is hereby corrected.

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

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

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

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

ATTEST:

/s/ Richard R. Horst

Richard R. Horst

Secretary

9

CERTIFICATE OF DESIGNATION

of

SERIES A PREFERRED STOCK

of

QUAD CITY HOLDINGS, INC.

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware

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

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

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

Series A Preferred Stock

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

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

10

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

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

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

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

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

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

11

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

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

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

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

GIVEN under my hand on October 9, 1996.

/s/ Patti Easley  

Notary Public 

12

CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

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

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

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

ARTICLE IV

AUTHORIZED STOCK

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

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

Dated as of the 21^st day of October, 1998

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

13

CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION

OF

QUAD CITY HOLDINGS, INC.

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

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

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

ARTICLE I

NAME

The name of the corporation is:

QCR Holdings, Inc.

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

Dated as of the 24^th day of October, 2001

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

14

CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION

OF

QCR HOLDINGS, INC.

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

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

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

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

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

ARTICLE XVI

NON-STOCKHOLDER INTERESTS

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

15

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

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

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

16

CERTIFICATE OF DESIGNATION

of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

of

QCR HOLDINGS, INC.

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware

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

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

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

Series B Junior Participating Preferred Stock

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

17

2. Dividends and Distribution.

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

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

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

18

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

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

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

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

19

4. Certain Restrictions.

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

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

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

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

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

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

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

20

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

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

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

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

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

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

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

21

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

QCR HOLDINGS, INC.
 

/s/ Todd A. Gipple  

Todd A. Gipple 

Executive Vice President and
Chief Financial Officer 

22

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

QCR HOLDINGS, INC.

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

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

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

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

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

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

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

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CERTIFICATE OF DESIGNATION
OF SERIES OF PREFERRED STOCK

QCR HOLDINGS, INC.

STATEMENT OF DESIGNATION
OF
RIGHTS, PREFERENCES AND LIMITATIONS
OF
SERIES B NON-CUMULATIVE PERPETUAL PREFERRED STOCK

Pursuant to Section 151 of the General Corporation Law of
the State of Delaware

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

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

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

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

QCR HOLDINGS, INC.
 

/s/ Todd A. Gipple  

Todd A Gipple 

Executive Vice President and
Chief Financial Officer 

24

EXHIBIT A

DESIGNATION
OF
RIGHTS, PREFERENCES AND LIMITATIONS
OF
SERIES B NON-CUMULATIVE PERPETUAL PREFERRED STOCK
OF
QCR HOLDINGS, INC.

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

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

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

Section 4. Redemption Rights.

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

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

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

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

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

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

26

CERTIFICATE OF DESIGNATION
OF SERIES OF PREFERRED STOCK

QCR HOLDINGS, INC.

STATEMENT OF DESIGNATION
OF
RIGHTS, PREFERENCES AND LIMITATIONS
OF
SERIES C NON-CUMULATIVE PERPETUAL PREFERRED STOCK

Pursuant to Section 151 of the General Corporation Law of
the State of Delaware

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

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

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

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

QCR HOLDINGS, INC.
 

/s/ Todd A. Gipple  

Todd A. Gipple 

Executive Vice President and
Chief Financial Officer 

27

EXHIBIT A

DESIGNATION
OF
RIGHTS, PREFERENCES AND LIMITATIONS
OF
SERIES C NON-CUMULATIVE PERPETUAL PREFERRED STOCK
OF
QCR HOLDINGS, INC.

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

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

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

Section 4. Redemption Rights.

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

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

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

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

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

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

29

CERTIFICATE OF DESIGNATIONS

OF

FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES D

OF

QCR HOLDINGS, INC.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Remainder of Page Intentionally Left Blank]

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

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

32

ANNEX A

STANDARD PROVISIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 3. Dividends.

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

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

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

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

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

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

Section 4. Liquidation Rights.

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

36

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

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

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

Section 5. Redemption.

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

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

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

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

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

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

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

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

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

Section 7. Voting Rights.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
QCR HOLDINGS, INC.

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

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

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

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

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

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

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

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

Section 4. Redemption Rights.

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

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

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

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

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

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

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

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

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

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

Section 4. Redemption Rights.

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

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

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

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

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

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

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

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

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

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EX-10.19

Exhibit 10.19

FIRST AMENDMENT TO THE

EMPLOYMENT AGREEMENT BETWEEN
QCR HOLDINGS, INC.,
QUAD CITY BANK AND TRUST COMPANY
AND DOUGLAS M. HULTQUIST

This Amendment (the “Amendment”) is made this 27th day of December, 2008 (the “Effective Date”) by and between QCR Holdings, Inc. (the “Company”) and Quad City Bank and Trust Company (the “Bank”) (collectively, the “Employer”) and Douglas M. Hultquist (the “Employee”).

WHEREAS, the Employer and the Employee have entered into that certain Employment Agreement dated January 1, 2004 (the “Agreement”);

WHEREAS, the Employer and the Employee desire to amend certain provisions of the Agreement in order to bring such provisions into compliance with the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended (and guidance issued thereunder) (“409A”);

WHEREAS, pursuant to Section 14(d) of the Agreement, the Agreement may be amended in writing with the signature of each party; and

WHEREAS, the parties desire to amend the Agreement on the terms hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is agreed and acknowledged by the parties hereto, effective as of the Effective Date (unless otherwise stated herein) the Agreement be and is hereby amended in the following particulars:

1. The following sentence shall be added following the last sentence of subsection 4(b):

“Payment of such Cash Bonus(es) will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which earned.”

2. The following sentence shall be added following the last sentence of subsection 4(d)(ii):

“Such reimbursement payments will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding expenses are incurred.”

3. The penultimate sentence in Section 6 shall be deleted and replaced with the following:

“‘Disability’ for the purposes of this Agreement shall mean that (i) the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) the Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer.”

4. The following sentence shall be added as an introductory paragraph in Section 10, before subsection (a):

“Employee’s employment during the term of this Agreement may be terminated by the Employer or Employee without any breach of this Agreement only under the circumstances described in this Section 10 (where such termination constitutes a “separation from service” pursuant to Code Section 409A), other than the termination of this Agreement pursuant to Sections 6 and 7.”

5. The second sentence of subsection 10(a) shall be deleted and replaced with the following:

“Such payment will be made in a lump sum within fifteen (15) days of termination.”

6. The following sentence shall be added following the first sentence of subsection 10(b):

“Such amounts shall be paid to the Employee in accordance with the Employer’s regular payroll on the next regular payroll date following the Employee’s voluntary termination or termination for Cause.”

7. The following sentence shall be added following the first sentence of subsection 10(c)(iv):

“Such grossing-up payment shall be made with or following the payment under to this Agreement which constitutes an Excess Parachute Payment, but in no event later than the end of the year following the year in which Employee remits the related taxes to the Internal Revenue Service.”

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8. The following sentence shall be added following the second sentence of subsection 10(c)(iv):

“Such deficiency payment shall be made no later than the end of the year following the year in which Employee remits the payment to the Internal Revenue Service in satisfaction of the deficiency, or if no payment is remitted, the end of the year following the year in which the audit is completed or there is a final and nonappealable settlement or other resolution.”

9. Subsection 10(c)(v) shall be deleted in its entirety and replaced with the following:

“If the Employer is not in compliance with its minimum capital requirements or if the payments required under this Section 10 would cause the Employer’s capital to be reduced below its minimum capital requirements, such payments shall be delayed until the earliest date at which the Employer reasonably anticipates the making of such payment will not cause the Employer’s capital to be reduced below its minimum capital requirements. Such payments shall not be reduced in the event Employee obtains other employment following the termination of employment by the Employer.”

10. The following sentence shall be added after the last sentence in subsection 11(b):

“Any payments pursuant to this indemnification will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding expenses are incurred.”

11. The following sentence shall be added before the second to the last sentence in Section 12:

“Any such reimbursements of legal fees will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding legal fees are incurred.”

12. The following Section 15 shall be added:

“Section 15. Code Section 409A.

(a) To the extent that any of the terms and conditions contained herein which were modified by this amendment constitute an amendment or modification of the time or manner of payment under a non-qualified deferred compensation plan (as defined under Code Section 409A), then to the extent necessary under the transitional guidance under Internal Revenue Service Notice 2007-86, this Agreement constitutes an amendment to, and a new election under, such deferred compensation plan, in order to properly modify the time or manner of payment consistent with such guidance.

3

(b) It is intended that the Agreement shall comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject Employee to the payment of additional taxes and interest under Code Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Employee being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree to amend the Agreement to maintain to the maximum extent practicable the original intent of the Agreement while avoiding the application of such taxes or interest under Code Section 409A.

(c) Notwithstanding any provision in the Agreement to the contrary if, as of the effective date of Employee’s termination of employment, he is a “Specified Employee,” then, only to the extent required pursuant to Section 409A(a)(2)(B)(i), payments due under this Agreement which are deemed to be deferred compensation shall be subject to a six (6) month delay following the Employee’s separation from service. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments and, accordingly, the aforementioned deferral shall only apply to separate payments which would occur during the six (6) month deferral period and all other payments shall be unaffected. All delayed payments shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh-month following separation from service (or, if earlier, the date of death of the Employee) with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the termination shall be paid to the Employee in accordance with the payment schedule established herein.

(d) The term “Specified Employee” shall mean any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Bank based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Employee is determined to be a key employee under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period he shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of such identification period. For purposes of determining whether Employee is a key employee under Code Section 416(i), “compensation” shall mean Employee’s W-2 compensation as reported by the Employer for a particular calendar year.”

[Signature page to follow]

4

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above set forth.

QCR HOLDINGS, INC.		EMPLOYEE
By:	/s/ James J. Brownson	/s/ Douglas M. Hultquist
	Name: James J. Brownson	DOUGLAS M. HULTQUIST
	Title:   Chairman
QUAD CITY BANK AND
TRUST COMPANY
By:	/s/ Mark C. Kilmer
	Name: Mark C. Kilmer
	Title:   Chairman

5

EX-10.20

Exhibit 10.20

FIRST AMENDMENT TO THE

EMPLOYMENT AGREEMENT BETWEEN
CEDAR RAPIDS BANK AND TRUST COMPANY
AND LARRY HELLING

This Amendment (the “Amendment”) is made this 30th day of December, 2008 (the “Effective Date”) by and between Cedar Rapids Bank and Trust Company (the “Employer”) and Larry Helling (the “Employee”).

WHEREAS, the Employer and the Employee have entered into that certain Employment Agreement dated January 1, 2004 (the “Agreement”);

WHEREAS, the Employer and the Employee desire to amend certain provisions of the Agreement in order to bring such provisions into compliance with the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended (and guidance issued thereunder);

WHEREAS, pursuant to Section 14(e) of the Agreement, the Agreement may be amended in writing with the signature of each party; and

WHEREAS, the parties desire to amend the Agreement on the terms hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is agreed and acknowledged by the parties hereto, effective as of the Effective Date, the Agreement be and is hereby amended in the following particulars:

1. The following sentence shall be added following the last sentence of subsection 4(b):

“Payment of such Cash Bonus(es) will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which earned.”

2. The last sentence of the first paragraph of subsection 4(c)(i) shall be deleted and replaced with the following:

“The incentive amount payable hereunder shall be paid within two and one-half (2¹/2) months after the end of such year.”

3. The following sentence shall be added following the last sentence of subsection 4(e)(2):

“Such reimbursement payments will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding expenses are incurred.”

4. The penultimate sentence in Section 6 shall be deleted and replaced with the following:

“‘Disability’ for the purposes of this Agreement shall mean that (i) the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) the Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer.”

5. The following sentence shall be added as an introductory paragraph in Section 10, before subsection (a):

“Employee’s employment during the term of this Agreement may be terminated by the Employer or Employee without any breach of this Agreement only under the circumstances described in this Section 10 (where such termination constitutes a “separation from service” pursuant to Code Section 409A), other than the termination of this Agreement pursuant to Sections 6 and 7.”

6. The second sentence of subsection 10(a) shall be deleted and replaced with the following:

“Such payment will be made in a lump sum within fifteen (15) days of termination.”

7. The following sentence shall be added following the first sentence of subsection 10(b):

“Such amounts shall be paid to the Employee in accordance with the Employer’s regular payroll on the next regular payroll date following the Employee’s voluntary termination or termination for Cause.”

8. The following sentence shall be added following the first sentence of subsection 10(c)(4):

“Such grossing-up payment shall be made with or following the payment under to this Agreement which constitutes an Excess Parachute Payment, but in no event later than the end of the year following the year in which Employee remits the related taxes to the Internal Revenue Service.”

 2 

9. The following sentence shall be added following the second sentence of subsection 10(c)(4):

“Such deficiency payment shall be made no later than the end of the year following the year in which Employee remits the payment to the Internal Revenue Service in satisfaction of the deficiency, or if no payment is remitted, the end of the year following the year in which the audit is completed or there is a final and nonappealable settlement or other resolution.”

10. Subsection 10(c)(5) shall be deleted in its entirety and replaced with the following:

“If the Employer is not in compliance with its minimum capital requirements or if the payments required under this Section 10 would cause the Employer’s capital to be reduced below its minimum capital requirements, such payments shall be delayed until the earliest date at which the Employer reasonably anticipates the making of such payment will not cause the Employer’s capital to be reduced below its minimum capital requirements. Such payments shall not be reduced in the event Employee obtains other employment following the termination of employment by the Employer.”

11. The following sentence shall be added after the last sentence in subsection 11(b):

“Any payments pursuant to this indemnification will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding expenses are incurred.”

12. The following sentence shall be added before the second to the last sentence in Section 12:

“Any such reimbursements of legal fees will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding legal fees are incurred.”

13. The following Section 15 shall be added:

“Section 15. Code Section 409A.

(a) To the extent that any of the terms and conditions contained herein which were modified by this amendment constitute an amendment or modification of the time or manner of payment under a non-qualified deferred compensation plan (as defined under Code Section 409A), then to the extent necessary under the transitional guidance under Internal Revenue Service Notice 2007-86, this Agreement constitutes an amendment to, and a new election under, such deferred compensation plan, in order to properly modify the time or manner of payment consistent with such guidance.

 3 

(b) It is intended that the Agreement shall comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject Employee to the payment of additional taxes and interest under Code Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Employee being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree to amend the Agreement to maintain to the maximum extent practicable the original intent of the Agreement while avoiding the application of such taxes or interest under Code Section 409A.

(c) Notwithstanding any provision in the Agreement to the contrary if, as of the effective date of Employee’s termination of employment, he is a “Specified Employee,” then, only to the extent required pursuant to Section 409A(a)(2)(B)(i), payments due under this Agreement which are deemed to be deferred compensation shall be subject to a six (6) month delay following the Employee’s separation from service. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments and, accordingly, the aforementioned deferral shall only apply to separate payments which would occur during the six (6) month deferral period and all other payments shall be unaffected. All delayed payments shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh-month following separation from service (or, if earlier, the date of death of the Employee) with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the termination shall be paid to the Employee in accordance with the payment schedule established herein.

(d) The term “Specified Employee” shall mean any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Bank based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Employee is determined to be a key employee under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period he shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of such identification period. For purposes of determining whether Employee is a key employee under Code Section 416(i), “compensation” shall mean Employee’s W-2 compensation as reported by the Employer for a particular calendar year.”

[Signature page to follow]

 4 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above set forth.

CEDAR RAPIDS BANK AND		EMPLOYEE
TRUST COMPANY
By:	/s/ Douglas M. Hultquist	/s/ Larry J. Helling
	Name: Douglas M. Hultquist	LARRY J. HELLING
	Title:   President of QCR Holdings, Inc. Parent        company of Cedar Rapids Bank & Trust

 5 

EX-10.21

Exhibit 10.21

FIRST AMENDMENT TO THE

EMPLOYMENT AGREEMENT BETWEEN
QCR HOLDINGS, INC.
AND TODD A. GIPPLE

This Amendment (the “Amendment”) is made this 30^th day of December, 2008 (the "Effective Date”) by and between QCR Holdings, Inc. (the “Employer”) and Todd A. Gipple (the "Employee”).

WHEREAS, the Employer and the Employee have entered into that certain Employment Agreement dated January 1, 2004 (the “Agreement”);

WHEREAS, the Employer and the Employee desire to amend certain provisions of the Agreement in order to bring such provisions into compliance with the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended (and guidance issued thereunder) (“409A”);

WHEREAS, pursuant to Section 14(d) of the Agreement, the Agreement may be amended in writing with the signature of each party; and

WHEREAS, the parties desire to amend the Agreement on the terms hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is agreed and acknowledged by the parties hereto, effective as of the Effective Date (unless otherwise stated herein) the Agreement be and is hereby amended in the following particulars:

1. The following sentence shall be added following the last sentence of subsection 4(b):

“Payment of such Cash Bonus(es) will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which earned.”

2. The following sentence shall be added following the last sentence of subsection 4(d)(ii):

“Such reimbursement payments will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding expenses are incurred.”

3. The penultimate sentence in Section 6 shall be deleted and replaced with the following:

“‘Disability’ for the purposes of this Agreement shall mean that (i) the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) the Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer.”

4. The following sentence shall be added as an introductory paragraph in Section 10, before subsection (a):

“Employee’s employment during the term of this Agreement may be terminated by the Employer or Employee without any breach of this Agreement only under the circumstances described in this Section 10 (where such termination constitutes a “separation from service” pursuant to Code Section 409A), other than the termination of this Agreement pursuant to Sections 6 and 7.”

5. The second sentence of subsection 10(a) shall be deleted and replaced with the following:

“Such payment will be made in a lump sum within fifteen (15) days of termination.”

6. The following sentence shall be added following the first sentence of subsection 10(b):

“Such amounts shall be paid to the Employee in accordance with the Employer’s regular payroll on the next regular payroll date following the Employee’s voluntary termination or termination for Cause.”

7. The following sentence shall be added following the first sentence of subsection 10(c)(iv):

“Such grossing-up payment shall be made with or following the payment under to this Agreement which constitutes an Excess Parachute Payment, but in no event later than the end of the year following the year in which Employee remits the related taxes to the Internal Revenue Service.”

8. The following sentence shall be added following the second sentence of subsection 10(c)(iv):

“Such deficiency payment shall be made no later than the end of the year following the year in which Employee remits the payment to the Internal Revenue Service in satisfaction of the deficiency, or if no payment is remitted, the end of the year following the year in which the audit is completed or there is a final and nonappealable settlement or other resolution.”

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9. Subsection 10(c)(v) shall be deleted in its entirety and replaced with the following:

“If the Employer is not in compliance with its minimum capital requirements or if the payments required under this Section 10 would cause the Employer’s capital to be reduced below its minimum capital requirements, such payments shall be delayed until the earliest date at which the Employer reasonably anticipates the making of such payment will not cause the Employer’s capital to be reduced below its minimum capital requirements. Such payments shall not be reduced in the event Employee obtains other employment following the termination of employment by the Employer.”

10. The following sentence shall be added after the last sentence in subsection 11(b):

“Any payments pursuant to this indemnification will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding expenses are incurred.”

11. The following sentence shall be added before the second to the last sentence in Section 12:

“Any such reimbursements of legal fees will be made as soon as practicable, but in no event later than two and one-half (2¹/2) months following the end of the year in which the corresponding legal fees are incurred.”

12. The following Section 15 shall be added:

“Section 15. Code Section 409A.

(a) To the extent that any of the terms and conditions contained herein which were modified by this amendment constitute an amendment or modification of the time or manner of payment under a non-qualified deferred compensation plan (as defined under Code Section 409A), then to the extent necessary under the transitional guidance under Internal Revenue Service Notice 2007-86, this Agreement constitutes an amendment to, and a new election under, such deferred compensation plan, in order to properly modify the time or manner of payment consistent with such guidance.

(b) It is intended that the Agreement shall comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject Employee to the payment of additional taxes and interest under Code Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Employee being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree to amend the Agreement to maintain to the maximum extent practicable the original intent of the Agreement while avoiding the application of such taxes or interest under Code Section 409A.

3

(c) Notwithstanding any provision in the Agreement to the contrary if, as of the effective date of Employee’s termination of employment, he is a “Specified Employee,” then, only to the extent required pursuant to Section 409A(a)(2)(B)(i), payments due under this Agreement which are deemed to be deferred compensation shall be subject to a six (6) month delay following the Employee’s separation from service. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments and, accordingly, the aforementioned deferral shall only apply to separate payments which would occur during the six (6) month deferral period and all other payments shall be unaffected. All delayed payments shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh-month following separation from service (or, if earlier, the date of death of the Employee) with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the termination shall be paid to the Employee in accordance with the payment schedule established herein.

(d) The term “Specified Employee” shall mean any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Bank based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Employee is determined to be a key employee under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period he shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of such identification period. For purposes of determining whether Employee is a key employee under Code Section 416(i), “compensation” shall mean Employee’s W-2 compensation as reported by the Employer for a particular calendar year.”

[Signature page to follow]

4

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above set forth.

QCR HOLDINGS, INC.		EMPLOYEE
By:	/s/ Douglas M. Hultquist Name: Douglas M. Hultquist	/s/ Todd A. Gipple TODD A. GIPPLE
	Title:   President and Chief Executive Officer

5

EX-10.22

Exhibit 10.22

QCR HOLDINGS, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

(Effective October 23, 2008)

This QCR HOLDINGS, INC. EXECUTIVE DEFERRED COMPENSATION PLAN (the “Plan”) was adopted by OCR Holdings, Inc. (the “Company”) and its affiliates to replace all existing individual deferred compensation agreements, as an amended and restated compilation of all such agreements. The Plan is intended to be an unfunded arrangement maintained by the specific Company or affiliate that employs the participant (the “Employer”) primarily for the purpose of providing deferred compensation for the directors and a select group of management or highly compensated employees of the Employer and is intended to be exempt from Sections 201, 301 and 401 of the Employee Retirement Income Security Act of 1974, as amended. The Plan is effective as of October 23, 2008. The Plan, along with any Participation Agreements, is intended to replace the individual deferred compensation agreements in effect on or after January 1, 2005. The Plan is intended to be a material modification of the individual deferred compensation agreements such that all amount under the Plan, including amounts accrued prior to December 31, 2004, shall be subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended. All obligations under the Plan will be solely borne by the Employer.

Article 1
Definitions

For purposes of this Plan, unless otherwise provided in the Participation Agreement, the following words and phrases shall have the following meanings:

1.1 “Administrator” means the Board of the Employer or a designated committee thereof.

1.2 “Board” means the Board of Directors of the Company, unless specifically noted otherwise.

1.3 “Cause” shall mean:

1.3.1 as such term is defined in an employment agreement between the Participant and an Employer, or if no such agreement or definition exists, then as provided below in this Section 1.3:

1.3.2 a material violation by the Participant of any applicable material law or regulation respecting the business of Employer;

1.3.3 the Participant being found guilty of a felony, an act of dishonesty in connection with the performance of the Participant’s duties as an officer of Employer, or which disqualifies the Participant from serving as an officer or director of Employer; or

1.3.4 the willful or negligent failure of the Participant to perform Participant’s duties for Employer in any material respect.

1.4 A “Change in Control” shall mean and include the following with respect to the Company, or as provided below, the Employer and shall be deemed to have occurred on the earliest of the following dates:

1.4.1 The date of the consummation of the acquisition by any person (as such term is defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of thirty-three percent (33%) or more of the combined voting power of the then outstanding voting securities of the Company or the Employer; or

1.4.2 The date that individuals who, as of the date hereof, are members of the Board of Directors of the Company (the “Company Board”) cease for any reason during any twelve (12) month period, to constitute a majority of the Company Board, unless the election, or nomination for election by the stockholders, of any new director was approved by a vote of a majority of the Company Board, and such new director shall, for purposes of this Plan, be considered as a member of the Company Board; or

1.4.3 The date of the consummation by the Company, or the Employer, of (i) a merger or consolidation if the stockholders of the Company, immediately before such merger or consolidation, do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation, in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation or (ii) a complete liquidation or dissolution or an agreement for the sale or other disposition of two-thirds or more of the consolidated assets of the Company or the Employer.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because thirty-three percent (33%) or more of the combined voting power of the then outstanding securities of the Company or the Employer is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the entity or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company or the Employer in substantially the same proportion as their ownership of stock of the Company or the Employer immediately prior to such acquisition.

In the event that any benefit under the Plan constitutes Deferred Compensation (as defined in Section 409A) and the settlement of or distribution of benefits under this Plan is to be triggered by a Change in Control, then such settlement or distribution shall be subject to the event constituting the Change in Control also constituting a “change in control event” permitted under Section 409A.

1.5 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder from time to time.

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1.6 “Company” means QCR Holdings, Inc. or its successors.

1.7 “Compensation” means an employee Participant’s salary, incentive compensation and bonus paid during the Plan Year and a director Participant’s director fees paid during the Plan Year. The Administrator shall have the continuing authority to determine in advance of any Plan Year, which elements (and any limits on such elements) of Compensation shall be eligible for deferral in that Plan Year.

1.8 “Deferral Account” means the bookkeeping account established for each Participant as provided in Section 4.1 hereof.

1.9 “Deferral Date” means the date the Deferrals will be credited to the Participant’s Deferral Account, which date shall be the date the Compensation would otherwise have been payable to the Participant.

1.10 “Deferrals” mean that portion of a Participant’s Compensation that a Participant elects to defer in accordance with Section 3.1 hereof.

1.11 “Disability” means that the Participant: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Employer’s employees.

1.12 “Effective Date” means October 23, 2008; provided, however, that if any changes pursuant to the amendment and restatement of this Plan constitute a change in the form or timing of distributions under Code Section 409A, such changes shall be effective as of January 1, 2009, in accordance with the transition relief provided under IRS Notice 2007-86.

1.13 “Election Form” means the separate written agreement, submitted to the Administrator, by which a Participant elects to participate in the Plan and to make Deferrals where, in the discretion of the Administrator, such Election Form may be included, all or in part, in the terms of the Participation Agreement.

1.14 “Employer” means (i) with respect to an employee Participant, the Company or the affiliated entity which employs the Participant or any successor thereto, and (ii) with respect to a director Participant, the Company or the affiliated entity on which Participant serves as a Board member.

1.15 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder from time to time.

1.16 “Investment Funds” means those mutual funds, insurance policies, investment indexes or other measures of performance identified by the Administrator that shall be used to determine the return increments to be credited to each Participant’s Deferral Account. The Administrator, in its sole discretion, may change the Investment Funds from time to time.

1.17 “Normal Retirement Age” means the Participant’s sixty-fifth (65th) birthday.

1.18 “Normal Retirement Date” means the later of Normal Retirement Age or Separation of Service.

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1.19 “Participant” means all members of the Board and any employee who is selected to participate in the Plan, provided such individual: (i) elects to participate in the Plan, (ii) signs an Election Form which is accepted by the Administrator, (iii) commences participation in the Plan, and (iv) has not had Plan participation terminated by reason of Separation of Service followed by complete distribution of the Participant’s Deferral Account.

1.20 “Participation Date” means the date the Participant commenced participation in the Plan or under an individual deferred compensation agreement as set forth in the Participant’s Participation Agreement.

1.21 “Participation Agreement” means a written agreement, as may be amended from time to time, which is entered into by and between an Employer and a Participant. Each Participation Agreement executed by a Participant and the Participant’s Employer shall set forth terms applicable to the Participant.

1.22 “Plan Year” means the calendar year.

1.23 “Section 409A” means Code Section 409A and any U.S. Treasury regulations and guidance promulgated thereunder, including such regulations and guidance promulgated after the Effective Date of the Plan as deemed appropriate by the Administrator.

1.24 “Separation from Service” means a Participant’s “separation from service” as defined under Section 409A.

1.25 “Specified Employee” means any Participant who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Administrator based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). All Participants who are determined to be key employees under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the 12-month period that begins on April 1st following the close of such identification period. For purposes of determining whether an individual is a key employee under Code Section 416(i), “Compensation” shall mean such individual’s W-2 compensation as reported by the Employer for a particular calendar year.

1.26 “Unforeseeable Emergency” means an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, (b) a loss of the Participant’s property due to casualty, or (c) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Administrator.

1.27 “Valuation Date” means the last day of each month or such other dates as may be determined by the Administrator for valuing Participant’s Deferral Accounts.

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ARTICLE 2
Participation

2.1 Commencement of Participation. Each employee or director shall become a Participant of the Plan on the date the Participant’s Election Form first becomes effective or became effective with respect to previously existing individual deferred compensation agreements.

2.2 Deferral Continuance Requirement. A Participant’s Election Form shall continue in effect until the Participant delivers to the Administrator a written revocation or modification of such election (as may be permitted herein) with respect to Compensation that relates to services yet to be performed in the following calendar year. Subject to Section 3.5 below, once an Election Form is in place for a calendar year it shall remain in effect for the entire calendar year.

ARTICLE 3
Deferral Elections

3.1 Deferral Elections.

3.1.1 Election Form. Each Participant shall deliver an Election Form to the Administrator before any Deferrals may become effective. The Election Form shall set forth the amount of Compensation to be deferred and shall be effective to defer only Compensation earned after the date the Election Form is received by the Administrator. Except as provided in Section 3.2, such Election Form shall be void with respect to any Deferrals unless submitted and accepted by the Administrator before the beginning of the calendar year during which the amount to be deferred will be earned. Subject to the limitations set forth in Sections 2.2 and 3.2, the Election Form shall remain effective until modified or revoked and will contain the following:

(a)	the Participant’s designation as to the amount of Compensation to be deferred with respect to a given Plan Year;
(b)	the beneficiary or beneficiaries of the Participant;
(c)	the timing and manner of distributions with respect to Deferrals from a given Plan Year as may be permitted hereunder; and
(d)	such other information as the Administrator may require.

3.1.2 Deferral Limitation. Each Participant may elect to defer a percentage of his or her Compensation up to the maximum deferral percentage specified in the Participation Agreement.

3.2 Initial Election. The Participant shall make an initial deferral election under the Plan by filing with the Administrator a signed Election Form within thirty (30) days of the date on which the Plan is adopted or the date on which the Participant is first eligible to participate in the Plan, taking into consideration the Plan aggregation rules of Section 409A. The completed Election Form shall only apply to Compensation earned after the Election Form is received by the Administrator.

3.3 Performance-Based Compensation. Notwithstanding the foregoing, with respect to any bonus eligible for deferral under the Plan that satisfies the requirements of “performance-based compensation” within the meaning of Section 409A, any election to defer such bonus must be made no later than six (6) months preceding the end of the performance period to which the bonus relates, or by such other date as the Employer determines appropriate and consistent with the intent and purpose of Section 409A.

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3.4 Election Changes. Upon the Employer’s approval, the Participant may modify the amount of Compensation to be deferred annually by filing a new Election Form with the Administrator prior to the beginning of the Plan Year in which the Compensation is to be deferred. A modified Election Form shall not be effective until the Plan Year following the year in which the modified Election Form is received and approved by the Administrator.

3.5 Unforeseeable Emergency. In the case of an Unforeseeable Emergency, a Participant’s deferrals as set forth on the Participant’s Election Form shall be cancelled, as permitted by Section 409A, and such additional Compensation shall be taken into account for determining the amount of payment needed to satisfy the unforeseeable emergency.

ARTICLE 4
Deferral Accounts

4.1 Establishing and Crediting. The Employer shall establish a Deferral Account on its books for each Participant and shall credit each Participant’s Deferral Account with the following amounts:

4.1.1 Deferrals. The Compensation deferred by the Participant as of the time the Compensation would have otherwise been paid to the Participant.

4.1.2 Matching Contribution. A matching contribution equal to the amount set forth in the Participation Agreement, and credited to the Employee Participant’s Deferral Account at the same time as the amounts credited to each Participant’s Deferral Account under Section 4.1.1.

4.1.3 Discretionary Contribution. For each Plan Year, the Employer, in its sole discretion, may, but is not required to, credit any amount it determines to Participants’ Deferral Accounts under the Plan, which amount shall be the discretionary contribution for that Plan Year. The discretionary contribution, if any, shall be credited as of the last day of the Plan Year unless otherwise specified by the Employer, as the case may be. The Employer may, in its sole discretion, provide terms and conditions on the discretionary contributions regarding vesting and forfeiture.

4.1.4 Interest. On the last day of each Plan Year and continuing until all benefit payments under the Plan have been made, interest is to be accrued on the account balances and compounded at an annual rate equal to the Wall Street Journal Prime Rate as established on the first business day of the Plan Year (the “Prime Rate”). Notwithstanding the foregoing, the applicable interest rate may be modified under the terms of a Participation Agreement.

4.2 Statement of Accounts. The Employer shall provide each Participant, within one hundred twenty (120) days after the close of each Plan Year, a statement setting forth the Participant’s Deferral Account balance.

4.3 Accounting Device Only. The Deferral Accounts are solely a device for measuring amounts to be paid under the Plan. The Deferral Accounts are not a trust fund of any kind. The Participants shall be general unsecured creditors of the Employer for the payment of benefits. The benefits represent the Employer’s mere promise to pay such benefits. The Participant’s rights are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by any of the Participant’s creditors.

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ARTICLE 5
Plan Benefits

5.1 Plan Benefit. Upon the Participant’s Separation from Service prior to the Normal Retirement Age for reasons other than death or Change in Control, the Employer shall pay to the Participant the benefit described in this Section 5.1 in lieu of any other benefit under the Plan.

5.1.1 Amount of Benefit. The benefit under this Section 5.1 is a Participant’s vested Deferral Account balance as of Separation from Service.

5.1.2 Payment of Benefit. The Employer shall pay a Participant’s benefit following Separation from Service in one hundred-eighty (180) monthly installments commencing on the first day of the month following such Participant’s Separation from Service, unless Participant is a “specified employee” as provided in Section 12.1 in which case the Participant’s payment commencement date may be delayed as set forth in Section 5.6. The Employer shall credit interest pursuant to Section 4.1.4 on the remaining account balance during any applicable installment period. Notwithstanding the foregoing, an alternate payment commencement date may be designated under the terms of the Participation Agreement.

5.2 Normal Retirement Benefit. Upon a Participant’s Normal Retirement Date, the Employer shall pay such Participant the benefit described in this Section 5.2 in lieu of any other benefit under the Plan.

5.2.1 Amount of Benefit. A Participant’s benefit under this Section 5.2 is the Participant’s Deferral Account balance as of the Participant’s Normal Retirement Date.

5.2.2 Payment of Benefit. The Employer shall pay each Participant’s benefit in 180 monthly installments commencing on the first day of the month following the Participant’s Normal Retirement Date, unless Participant is a “specified employee” as provided in Section 12.1 in which case the Participant’s payment commencement date may be delayed as set forth in Section 5.6. The Employer shall credit interest pursuant to Section 4.1.4 on the remaining account balance during any applicable installment period. Notwithstanding the foregoing, an alternate payment commencement date may be designated under the terms of the Participation Agreement.

5.3 Change of Control Benefit. Upon a Participant’s Separation from Service during the twenty-four (24) month period immediately following a Change of Control, the Employer shall pay such Participant the benefit described in this Section 5.3 in lieu of any other benefit under the Plan.

5.3.1 Amount of Benefit. A Participant’s benefit under this Section 5.3 is the Participant’s Deferral Account balance as of the Participant’s Separation from Service related to a Change of Control or such other benefit amount as may be provided under the terms of the Participant’s Participation Agreement.

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5.3.2 Payment of Benefit. The Employer shall pay each Participant’s benefit in 180 monthly installments commencing on the first day of the month following the Participant’s Separation from Service under this Section 5.3.2, unless Participant is a “specified employee” as provided in Section 12.1 in which case the Participant’s payment commencement date may be delayed as set forth in Section 5.6. The Employer shall credit interest pursuant to Section 4.1.4 on the remaining account balance during any applicable installment period. Notwithstanding the foregoing, an alternate payment commencement date may be designated under the terms of the Participation Agreement.

5.3.3 Obligation to Fund. Notwithstanding any provision to the contrary contained herein, no later than the date of a Change of Control of the Company, the Employer shall fund a “Rabbi Trust” (as such term is described in Revenue Procedure 92-64) in the amount of the payment required under Section 5.3.2, with the trustee of such trust being a third party trustee designated by the Board in its sole and absolute discretion.

5.4 Unforeseeable Emergency. Upon the Board’s determination (following petition by a Participant) that the Participant has suffered an Unforeseeable Emergency, the Employer shall distribute to the Participant all or a portion of such Participant’s vested Deferral Account balance, but in no event shall the distribution be greater than is necessary to relieve the financial hardship after taking into account additional Compensation that will be available to the Participant following the cancellation of the Participant’s deferral election.

5.5 De Minimus Payment. Notwithstanding any provision of the Plan or any Participation Agreement to the contrary, if a Participant’s Deferral Account has a balance, along with any other nonqualified deferred compensation that must be aggregated with this Plan pursuant to Section 409A, at the time of the Participant’s Separation of Service, that is not greater than the applicable dollar limit under Code Section 402(g)(1)(B) ($15,500 for plan year 2007), the Participant’s balance in the Deferral Account, and all other plans aggregated pursuant to Section 409A, shall be distributed in a single lump sum. This Section 5.5 shall be applied in accordance with the plan aggregation rules of Section 409A and such Deferral Account balance shall be paid to the Participant in a lump sum payment on or before the later of: (i) December 31st of the calendar year in which the Participant’s Separation of Service occurs; or (ii) the 15th day of the third month following the Participant’s Separation of Service. Upon the date of payment pursuant to this Section 5.5, Participant shall have no further interest under the Plan or any similar deferred compensation arrangements, as defined under Section 409A with the Employer.

5.6 Delay of Payment Commencement. If, as of the effective date of the Participant’s Separation from Service, the Company is publicly traded and the Participant is a Specified Employee, then, to the extent required pursuant to Section 409A, payment of any portion of Plan benefits that would otherwise have been paid to the Participant during the six-month period following the Participant’s Separation from Service and which would constitute deferred compensation under Section 409A (the “Delayed Payments”) shall be delayed until the date that is six (6) months and one day following Participant’s Separation from Service or, if earlier, the date of the Participant’s death (the “Delayed Payment Date”). As of the Delayed Payment Date, the Delayed Payments plus interest (as provided in Section 4.1.4), for the period of delay, shall be paid to the Participant in a single lump sum. Any portion of the Plan benefit that was not otherwise due to be paid during the six-month period following the Participant’s Separation from Service shall be paid to the Participant in accordance with the payment schedule set forth under the applicable distribution provision of the Plan.

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5.7 Participation Agreement Payment Provisions. To the extent a Participant’s Participation Agreement provides for alternate payment dates or forms of payment, such Participation Agreement must include such alternate elections at the time the Participant makes a deferral election or subsequently for benefit payments to commence as of such alternate payment date or in such alternate payment form. Subsequent to making a deferral election and entering into a Participation Agreement, the Participant may elect an alternate payment date or alternate form of payment by entering into a new Participation Agreement with the Employer, provided that such new Participation Agreement: (1) shall be made at least twelve (12) months in advance of the originally-scheduled distribution date and may not take effect for at least twelve (12) months after the date the new election is made; (ii) shall not accelerate the time or schedule of any payment, except as permitted under Treasury regulations; and (iii) shall provide for an additional deferral period that is not less than five (5) years from the date benefit payments otherwise would have commenced, each as may be required by Section 409A. Notwithstanding any provision in the Plan or a Participation Agreement to the contrary, the provisions of Section 5.6 shall apply.

ARTICLE 6
Death Benefits

6.1 Death During Active Service. If a Participant dies while in the employment of the Employer, the Employer shall pay to such Participant’s beneficiary the benefit described in this Section 6.1 in lieu of any other benefit under the Plan.

6.1.1 Amount of Benefit. The benefit under Section 6.1 is the Deferral Account balance as of the Participant’s death or such other benefit amount as may be provided under the terms of the Participant’s Participation Agreement.

6.1.2 Payment of Benefit. The Employer shall pay the benefit to the beneficiary in the manner elected by the Participant on the Beneficiary Designation Form, as in effect immediately prior to the Participant’s death, provided, however, that an amended Beneficiary Designation Form which changes the time or manner of payment shall not be effective except as it applies to the designation of beneficiaries until twelve (12) months following the date it is filed with the Employer. If the Participant does not have a valid Election Form on file at the time of the Participant’s death, the Employer shall pay the benefit to the Participant’s beneficiary in a lump-sum payment.

6.2 Death During Installment Payout. If a Participant dies following a Separation from Service or after any installment payments have commenced under the Plan but before receiving all such payments, the Employer shall continue to pay the remaining benefits to the Participant’s beneficiary at the same time and in the same amounts they would have been paid to the Participant, had the Participant survived.

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ARTICLE 7
Beneficiaries

7.1 Beneficiaries. Each Participant shall designate one or more persons (who may be any one or more members of such person’s family or other persons, administrators, trusts, foundations or other entities) as the Participant’s beneficiary under the Plan. Such designation shall be made on a form prescribed by the Administrator. Each Participant may at any time and from time to time, change any previous beneficiary designation, without notice to or consent of any previously designated beneficiary, by amending the Participant’s previous designation on a form prescribed by the Administrator. Designations will only be effective if signed by the Participant and accepted by the Administrator during the Participant’s lifetime. If (i) the beneficiary does not survive the Participant (or is otherwise unavailable to receive payment); (ii) the Participant names a spouse as a beneficiary and the marriage is subsequently dissolved; or (iii) if no beneficiary is validly designated, then the amounts payable under this Plan shall be paid to the Participant’s estate. If more than one person is the beneficiary of a deceased Participant, each such person shall receive a pro rata share of any death benefit payable unless otherwise designated on the applicable form. If a beneficiary who is receiving benefits dies, all benefits that were payable to such beneficiary shall then be payable to the estate of that beneficiary.

7.2 Lost Beneficiary.

7.2.1 All Participants and beneficiaries shall have the obligation to keep the Administrator informed of their current address until such time as all benefits due have been paid.

7.2.2 If a Participant or beneficiary cannot be located by the Administrator exercising due diligence, then, in its sole discretion, the Administrator may presume that the Participant or beneficiary is deceased for purposes of the Plan and all unpaid amounts (net of due diligence expenses) owed to the Participant or beneficiary shall be paid accordingly or, if a beneficiary cannot be so located, then such amounts shall be paid to the Participants’ or the beneficiary’s estate, as applicable. Any such presumption of death shall be final, conclusive and binding on all parties. Notwithstanding the foregoing, if any such beneficiary is located within five (5) years from the date of any such forfeiture, such beneficiaries shall be entitled to receive the amount previously forfeited to the extent recoverable, but in no event shall the Employer be obligated to pay a benefit more than once.

7.3 Facility of Payment. If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of the Participant’s property, the Employer may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Employer may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Employer from all liability with respect to such benefit.

ARTICLE 8
General Limitations

8.1 Termination for Cause. Notwithstanding any provision of the Plan to the contrary, the Employer shall not pay any benefit under the Plan that is attributable to the matching contribution credited under Section 4.1.2 of the Plan or to the discretionary contribution, if any, credited under Section 4.1.3 of the Plan and any and all interest earned on the Deferral Account (on all account balances) if the Employer terminates the Participant’s employment for Cause.

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8.2 Suicide or Misstatement. The Employer shall not pay any death benefit under the Plan exceeding the Participant’s deferrals into Participant’s Deferral Account if the Participant commits suicide within two (2) years after the Participant’s Participation Date, or if the Participant has made any material misstatement of fact on any application for life insurance purchased by the Employer which invalidates such insurance.

ARTICLE 9
Claims and Review Procedures

9.1 Presentation of Claim. Any Participant or beneficiary of a deceased Participant (such Participant or beneficiary being referred to below as a “Claimant”) may deliver to the Employer a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred-eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

9.2 Notification of Decision. The Employer shall consider a Claimant’s claim within a reasonable time, but no later than ninety (90) days; provided, that claims based on Disability shall be considered within forty-five (45) days, unless, within such time, the Employer notifies the Claimant in writing that an extension is required pursuant to Labor Regulation 2560.503-1 (up to ninety (90) days for non-disability claims and thirty (30) days for disability claims). Once a decision is made, the Employer shall notify the Claimant in writing:

9.2.1 That the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

9.2.2 That the Employer has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

(a) the specific reason(s) for the denial of the claim, or any part of it;

(b) the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

(c) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(d) an explanation of the claim review procedure set forth in Section 9.3 below, including Claimants right to bring a civil action under Section 502(a) of ERISA as described in Section 9.5.

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9.3 Review of a Denied Claim. Within sixty (60) days (one hundred-eighty (180) days for a claim based on Disability) after receiving a notice from the Employer that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s’ duly authorized representative) may file with the Employer a written request for a review of the denial of the claim. Therefore, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

9.3.1 may review pertinent documents;

9.3.2 may submit written comments or other documents; and/or

9.3.3 may request a hearing, which the Employer, in its sole discretion, may grant.

9.4 Decision on Review. The Employer shall render its decision on review promptly, and not later than sixty (60) days (forty-five (45) days for a claim based on Disability) after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Employer’s decision must be rendered within one hundred-twenty (120) days after such date; provided, that this period shall be up to one (1) forty-five (45)-day extension for claims based on Disability. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

9.4.1 specific reasons for the decision;

9.4.2 specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

9.4.3 such other matters as the Employer deems relevant.

9.5 Legal Action. A Claimant’s compliance with the foregoing provisions of this ARTICLE 9 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

9.6 Arbitration. If Claimant continues to dispute the benefit denial based upon completed performance of this Plan and the Joinder Agreement or the meaning and effect of the terms and conditions thereof, it shall be settled by arbitration administered by the AAA under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

ARTICLE 10
Funding

10.1 Prohibition Against Funding. Should any investment be acquired in connection with the liabilities assumed under this Plan, it is expressly understood and agreed that the Participants and beneficiaries shall not have any rights with respect to, or claim against, such assets nor shall any such purchase be construed to create a trust of any kind or a fiduciary relationship between the Employer and the Participants, their beneficiaries or any other person. Any such assets shall be and remain a part of the general, unpledged, unrestricted assets of the Employer, subject to the claims of its general creditors. It is the express intention of the parties hereto that this arrangement shall be unfunded for tax purposes. Each Participant and beneficiary shall be required to look to the provisions of this Plan and to the Employer itself for enforcement of any and all benefits due under this Plan, and to the extent any such person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer. The Employer shall be designated the owner and beneficiary of any investment acquired in connection with its obligation under this Plan.

10.2 Deposits. Notwithstanding Section 10.1, or any other provision of this Plan to the contrary, the Employer may deposit any amounts it deems appropriate to pay any or all of the benefits under this Plan to a ‘Rabbi Trust’ as established pursuant to Treasury Department Revenue Procedures 92-64 and 92-65.

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ARTICLE 11
Amendment and Termination

11.1 Authority to Amend or Terminate. Except as otherwise provided in this ARTICLE 11, the Board shall have the sole authority to modify, amend or terminate this Plan, including a termination of this Plan in its entirety following a Change in Control; provided, however, that any modification or termination of this Plan shall not reduce, without the consent of a Participant, a Participant’s right to any amounts already credited to the Participant’s Deferral Account, or lengthen the time period for a distribution from an established Deferral Account, on the day before the effective date of such modification or termination. Following such termination, payment of such credited amounts may be made in a single sum payment if the Company or Employer so designates, only to the extent permitted under Section 409A, or as may be required under Section 409A. Any such decision to pay in a single sum shall apply to all Participants.

11.2 Required Action. Notwithstanding the preceding paragraph, to the extent permitted by Section 409A, the Company or Employer may amend or terminate this Plan at any time if, pursuant to legislative, judicial or regulatory action, continuation of the Plan would (i) cause benefits to be taxable to the Participant prior to actual receipt, or (ii) result in significant financial penalties or other significantly detrimental ramifications to the Company or the Bank (other than the financial impact of paying the benefits).

11.3 Residual Assets. Any funds remaining after the termination of the Plan, and satisfaction of all liabilities to Participants and others, shall be returned to the Employer.

ARTICLE 12
Section 409A

12.1 Section 409A. The Participant’s Deferral Account balances constitute “deferred compensation” under Section 409A and are subject to the following:

12.1.1 All documents and agreements, or rules and regulations created by the Company or Employer pertaining to the Participant’s Deferral Accounts, shall provide for the required procedures under Section 409A, including the timing of deferral elections and the timing and method of payment distributions.

12.1.2 With respect to the Participant’s Deferral Account balances, it is the intention of the Company and Employer to operate the Plan at all times in conformity with the known rules, regulations and guidance promulgated under Section 409A, and the Company and Employer shall reserve the right (including the right to delegate such right) to unilaterally amend the Plan with respect to the Deferral Account balances, without the consent of the Participant, to maintain compliance with Section 409A. A Participant’s acceptance of any benefits under the Plan constitutes acknowledgement and consent to such rights of the Company and Employer.

12.2 Transition Rule for Distribution Elections. In a manner that is consistent with Section 409A, the Employer may solicit new Election Forms from Participants in order for the Participants to change the method or timing of distributions of all amounts subject to Section 409A under the Plan, provided such elections are solicited and properly made prior to December 31, 2008. In the event the Employer elects to solicit new Election Forms under this Section, the failure by a Participant to submit a complete and timely Election Form will result in the continued application of the most recently submitted Election Form.

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12.3 Distribution in the Event of Income Inclusion under Section 409A. If any portion of a Participant’s Deferral Account under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to meet the requirements of Section 409A, the Participant may petition the Employer for a distribution of that portion of the Participant’s Deferral Account balance that is required to be included in the Participant’s income. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Employer shall distribute to the Participant immediately available funds in an amount equal to the portion of the Participant’s Deferral Account balance required to be included in income as a result of the failure of the Plan to meet the requirements of Section 409A, which amount shall not exceed the Participant’s unpaid vested Deferral Account balance under the Plan. If the petition is granted, such distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the Participant’s benefits to be paid under this Plan.

ARTICLE 13
Miscellaneous

13.1 Administration. The Administrator shall have powers which are necessary to administer the Plan, including but not limited to:

13.1.1 interpreting the provisions of the Plan;

13.1.2 establishing and revising the method of accounting for the Plan;

13.1.3 maintaining a record of benefit payments; and

13.1.4 establishing rules and prescribing any forms necessary or desirable to administer the Plan.

The Administrator may delegate to others certain ministerial aspects of the management and operation of the Plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals and may, from time to time, consult with legal counsel who may be counsel to the Company or Employer.

The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Plan.

13.2 Status of Plan. The Plan is intended to be a plan that is: (a) not qualified within the meaning of Code Section 401(a); (b) “unfunded and is maintained by the Company or Employer primarily for the purpose of providing deferred compensation for a select group of management and highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(l); and (c) compliant in all respects with Section 409A. The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

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13.3 No Assignment. Benefits or payments under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s beneficiary, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish the same shall not be valid, nor shall any such benefit or payment be in any way liable for or subject to the debts, contracts, liabilities, engagement or torts of any Participant or beneficiary, or any other person entitled to such benefit or payment pursuant to the terms of this Plan, except to such extent as may be required by law. If any Participant or beneficiary or any other person entitled to a benefit or payment pursuant to the terms of this Plan becomes bankrupt or attempts to alienate, sell, transfer, assign, pledge, encumber, attach or garnish any benefit or payment under this Plan, in whole or in part, or if any attempt is made to subject any such benefit or payment, in whole or in part, to the debts, contracts, liabilities, engagements or torts of the Participant or beneficiary or any other person entitled to any such benefit or payment pursuant to the terms of this Plan, then such benefit or payment, in the discretion of the Administrator, shall cease and terminate with respect to such Participant or beneficiary, or any other such person.

13.4 No Rights to Remain a Participant. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained as a Participant, or give a Participant or beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to removal as a Participant to the same extent as if this Plan had never been adopted or the Participant was not selected to participate.

13.5 No Effect on Employment Rights. Participation in this Plan is not a contract for employment. It does not give the Participant the right to remain an employee of the Employer, nor does it interfere with the shareholders’ rights to replace the Participant. It also does not require the Participant to remain an employee nor interfere with the Participant’s right to terminate employment at any time.

13.6 Inurement. The Plan shall be binding upon and shall inure to the benefit of the Employer, its successors and assigns, and the Participant, the Participant’s successors, heirs, executors, administrators, and beneficiaries, and the Company shall require any acquirer in a Change in Control to expressly assume this Plan.

13.7 Tax Withholding. When payments are made under the Plan, the Employer shall have the right to deduct from each payment made under the Plan, or any other compensation payable to a Participant or beneficiary, any required withholding taxes respecting such payments. Prior to the date a Participant’s Deferral Account becomes payable, the Employer may deduct from the Participant’s Deferral Account, or from other compensation payable to the Participant, any required federal employment taxes imposes under Code Sections 3101, 3121(a) and 3121(v)(2) and any taxes required under any state, local and foreign laws, in each case only to the extent such taxes are attributable to the Participant’s participation in the Plan.

13.8 Entire Agreement. This Plan, along with the Participant’s Participation Agreement and Election Form, constitute the entire agreement between the Employer and the Participant as to the subject matter hereof. No rights are granted to the employee by virtue of this Plan other than those specifically set forth herein or in the Participant’s Participation Agreement or Election Form.

13.9 No Liability. No liability shall attach to or be incurred by any officer or director of the Company or Employer, or any Administrator under or by reason of the terms, conditions and provisions contained in this Plan, or for the acts or decisions taken or made thereunder or in connection therewith; and as a condition precedent to the establishment of this Plan or the receipt of benefits thereunder, or both, such liability, if any, is expressly waived and released by each Participant and by any and all persons claiming under or through any Participant or any other person. Such waiver and release shall be conclusively evidenced by any act or participation in or the acceptance of benefits or the making of any election under this Plan.

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13.10 Reorganization. The Employer shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of the Employer under the Plan.

13.11 Named Fiduciary. For purposes of ERISA, if applicable, the Employer shall be the named fiduciary and plan administrator under the Plan. The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the plan including the employment of advisors and the delegation of ministerial duties to qualified individuals.

13.12 Expenses. All expenses incurred in the administration of the Plan, whether incurred by the Employer or the Plan, shall be paid by the Employer or the Company.

13.13 Insolvency. Should the Employer be considered insolvent, the Company, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan, if the Company is not the Administrator. Upon receipt of such notice, the Administrator shall cease to make any payments to Participants who were Participants or their beneficiaries and shall hold any and all assets attributable to the Employer for the benefit of the general creditors of the Employer.

13.14 Company Determinations. Any determinations, actions or decisions of the Company (including but not limited to, Plan amendments and Plan termination) shall be made by the Board or a properly delegated committee thereof in accordance with its established procedures.

13.15 Interpretation. The provisions of this Plan shall be interpreted consistently with Section 409A, and to the extent inconsistent with such authority, shall be deemed to be modified to the extent necessary to make such provisions consistent with such authority. In addition, all questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole and final discretion, whose decision shall be final, binding and conclusive upon all persons.

13.16 Severability and Interpretation of Provisions. In the event that any of the provisions of this Plan or portion hereof, are held to be inoperative or invalid by any court of competent jurisdiction, or in the event that any legislation adopted by any governmental body having jurisdiction over the Employer would be retroactively applied to invalidate this Plan or any provision hereof or cause the benefits hereunder to be taxable, then: (1) insofar as is reasonable, effect will be given to the intent manifested in the provisions held invalid or inoperative, and (2) the validity and enforceability of the remaining provisions will not be affected thereby. In the event that the intent of any provision shall need to be construed in a manner to avoid taxability, such construction shall be made by the plan administrator in a manner that would manifest to the maximum extent possible the original meaning of such provisions.

16

13.17 Payment of Legal Fees. The Employer is aware that after a Change in Control, management of the Employer or its successor could cause or attempt to cause the Employer to refuse to comply with its obligations under this Plan, including the possible pursuit of litigation to avoid its obligations under this Plan. In these circumstances, the purpose of this Plan would be frustrated. It is the Employer’s intention that the Participant not be required to incur the expenses associated with the enforcement of the Participant’s rights under this Plan, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Participant hereunder. It is the Employer’s intention that the Participant not be forced to negotiate settlement of the Participant’s rights under this Plan under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Participant that (a) the Employer has failed to comply with any of its obligations under this Plan, or (b) the Employer or any other person has taken any action to avoid its obligations under this Plan, the Employer irrevocably authorizes the Participant from time to time to retain counsel of Participant’s choice, at the expense of the Employer as provided in this Section 13.17, to represent the Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Employer or any director, officer, stockholder, or other person affiliated with the Employer, in any jurisdiction. Notwithstanding any existing or previous attorney-client relationship between the Employer and any counsel chosen by the Participant under this Section 13.17, the Employer irrevocably consents to the Participant entering into an attorney-client relationship with that counsel, and the Employer and the Participant agree that a confidential relationship shall exist between the Participant and that counsel. The fees and expenses of counsel selected from time to time by the Employee as provided in this Section 13.17 shall be paid or reimbursed to the Participant by the Employer on a regular, periodic basis upon presentation by the Participant of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices. The Employer’s obligation to reimburse Participant for legal fees as provided under this Section 13.17 and any separate employment, severance or other agreement between the Participant and the Employer shall not exceed $200,000 in the aggregate. Accordingly, the Employer’s obligation to pay the Participant’s legal fees provided by this Section 13.17 shall be offset by any legal fee reimbursement obligation the Employer may have with the Participant under any separate employment, severance or other agreement between the Participant and the Employer. All payments made hereunder shall be paid or reimbursed by the Employer not later than December 31 of the year incurred.

13.18 Governing Law. This Plan shall be governed by, construed and administered in accordance with the laws of the State of Iowa without regard to the conflict of laws provisions of any jurisdiction, except to the extent preempted by the laws of the United States of America.

13.19 Headings. The Article headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of this Plan, nor in any way shall they affect this Plan or the construction of any provision thereof.

13.20 Terms. Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.

17

EX-10.23

Exhibit 10.23

QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective October 23, 2008)

PARTICIPATION AGREEMENT

THIS PARTICIPATION AGREEMENT (the “Participation Agreement”) is entered into as of this 24^th day of October, 2008 by and between QCR Holdings, Inc. and Quad City Bank and Trust Company (the “Employer”) and Douglas M. Hultquist, an executive of the Employer (the “Participant”).

RECITALS:

WHEREAS, QCR Holdings, Inc. (“QCR”) has adopted the QCR Holdings Executive Deferred Compensation Plan (Effective October 23, 2008) (the “Plan”), the Employer provides for participation in such Plan and the Administrator has determined that the Participant is eligible to participate in the Plan on the terms and conditions set forth in this Participation Agreement and the Plan.

NOW, THEREFORE, in consideration of the foregoing and the agreements and covenants set forth herein, the parties agree as follows:

1. Definitions. Except as otherwise specifically provided herein, or unless the context otherwise requires, the terms used in this Participation Agreement shall have the same meanings as set forth in the Plan.

2. Incorporation of Plan. The Plan, a copy of which is attached hereto as Exhibit A, is hereby incorporated into this Participation Agreement as if fully set forth herein, and the parties hereby agree to be bound by all of the terms and provisions contained in the Plan. The Participant hereby acknowledges receipt of a copy of the Plan and, subject to the foregoing, confirms the Participant’s understanding and acceptance of all of the terms and conditions contained therein. The Plan and this Participation Agreement supersede and replace in their entirety any prior agreements relating to such benefits.

3. Effective Date of Participation. The effective date of the Participant’s participation in the Plan shall be June 28, 2000 (the “Participation Date”), which includes any period Participant participated under an individual deferred compensation agreement between the Participant and the Employer which was amended and restated as the Plan.

4. Maximum Deferral Percentage. For purposes of Section 3.1.2 of the Plan, the Participant is permitted to elect to defer up to one hundred percent (100%) of the Participant’s Compensation on an annual basis to the Participant’s Deferral Account.

5. Matching Contribution. For purposes of Section 4.1.2 of the Plan, the Employer will credit the Participant’s Deferral Account with a Matching Contribution equal to one hundred percent (100%) of the Participant’s Deferrals, but not to exceed $20,000 (twenty thousand dollars).

6. Interest. For purposes of Section 4.1.4 of the Plan, interest is to be accrued on the account balances and compounded at an annual rate equal to the Prime Rate as established on the first business day of the Plan Year. This interest rate shall have a minimum or floor of eight percent (8%) and shall not exceed ten percent (10%).

7. Change of Control Benefit — Amount of Benefit. For purpose of Section 5.3.1 of the Plan, the Participant’s benefit due to a Change of Control shall be greater of (a) the Participant’s Deferral Account balance at the time of the Separation from Service related to the Change of Control, or (b) $1,427,500 (one million four hundred twenty seven thousand five hundred dollars).

8. Change of Control Benefit — Form of Payment and Payment Date. For purposes of Section 5.3.2 of the Plan, the Participant’s benefit due to a Change of Control shall be paid in a single lump sum within 60 days following the separation from service on or after a Change of Control, subject to Section 5.6 of the Plan.

9. Death Benefits. For purposes of Section 6.1.1 of the Plan, the benefit due to the death of the Participant shall be the greater of (a) the Participant’s Deferred Account balance at the time of death, or (b) $1,472,500 (one million four hundred seventy two thousand five hundred dollars).

10. Successors. This Participation Agreement shall be binding upon each of the parties and shall also be binding upon their respective successors and the Employer’s assigns.

11. Amendments. This Participant Agreement may not be modified or amended except by a duly executed instrument in writing signed by the Employer and the Participant consistent with the provisions of Code Section 409A.

[signature page follows]

B-2

IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be executed as of the day first above written.

PARTICIPANT:	QCR HOLDINGS, INC.
/s/ Douglas M. Hultquist Douglas M. Hultquist	By:	/s/ James J. Brownson James J. Brownson
		Chairman, QCR Holdings, Inc.
	QUAD CITY BANK & TRUST
	By:	/s/ Mark C. Kilmer Mark C. Kilmer
		Chairman, Quad City Bank & Trust

B-3

EX-10.24

Exhibit 10.24

QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective October 23, 2008)

PARTICIPATION AGREEMENT

THIS PARTICIPATION AGREEMENT (the “Participation Agreement”) is entered into as of this 24^th day of October, 2008 by and between Cedar Rapids Bank and Trust Company (the "Employer”) and Larry J. Helling, an executive of the Employer (the “Participant”).

RECITALS:

WHEREAS, QCR Holdings, Inc. (“QCR”) has adopted the QCR Holdings Executive Deferred Compensation Plan (Effective October 23, 2008) (the “Plan”), the Employer provides for participation in such Plan and the Administrator has determined that the Participant is eligible to participate in the Plan on the terms and conditions set forth in this Participation Agreement and the Plan.

NOW, THEREFORE, in consideration of the foregoing and the agreements and covenants set forth herein, the parties agree as follows:

1. Definitions. Except as otherwise specifically provided herein, or unless the context otherwise requires, the terms used in this Participation Agreement shall have the same meanings as set forth in the Plan.

2. Incorporation of Plan. The Plan, a copy of which is attached hereto as Exhibit A, is hereby incorporated into this Participation Agreement as if fully set forth herein, and the parties hereby agree to be bound by all of the terms and provisions contained in the Plan. The Participant hereby acknowledges receipt of a copy of the Plan and, subject to the foregoing, confirms the Participant’s understanding and acceptance of all of the terms and conditions contained therein. The Plan and this Participation Agreement supersede and replace in their entirety any prior agreements relating to such benefits.

3. Effective Date of Participation. The effective date of the Participant’s participation in the Plan shall be June 29, 2001 (the “Participation Date”), which includes any period Participant participated under an individual deferred compensation agreement between the Participant and the Employer which was amended and restated as the Plan.

4. Maximum Deferral Percentage. For purposes of Section 3.1.2 of the Plan, the Participant is permitted to elect to defer up to one hundred percent (100%) of the Participant’s Compensation on an annual basis to the Participant’s Deferral Account.

5. Matching Contribution. For purposes of Section 4.1.2 of the Plan, the Employer will credit the Participant’s Deferral Account with a Matching Contribution equal to one hundred percent (100%) of the Participant’s Deferrals, but not to exceed $15,000 (fifteen thousand dollars).

6. Interest. For purposes of Section 4.1.4 of the Plan, interest is to be accrued on the account balances and compounded at an annual rate equal to the Prime Rate as established on the first business day of the Plan Year. This interest rate shall have a minimum or floor of eight percent (8%) and shall not exceed twelve percent (12%).

7. Change of Control Benefit — Amount of Benefit. For purpose of Section 5.3.1 of the Plan, the Participant’s benefit due to a Change of Control shall be greater of (a) the Participant’s Deferral Account balance at the time of the Separation from Service related to the Change of Control, or (b) $1,130,000 (one million one hundred and thirty thousand dollars).

8. Change of Control Benefit — Form of Payment and Payment Date. For purposes of Section 5.3.2 of the Plan, the Participant’s benefit due to a Change of Control shall be paid in a single lump sum within 60 days following the separation from service on or after a Change of Control, subject to Section 5.6 of the Plan.

9. Death Benefits. For purposes of Section 6.1.1 of the Plan, the benefit due to the death of the Participant shall be the greater of (a) the Participant’s Deferred Account balance at the time of death, or (b) $1,130,000 (one million one hundred and thirty thousand dollars).

10. Successors. This Participation Agreement shall be binding upon each of the parties and shall also be binding upon their respective successors and the Employer’s assigns.

11. Amendments. This Participant Agreement may not be modified or amended except by a duly executed instrument in writing signed by the Employer and the Participant consistent with the provisions of Code Section 409A.

[signature page follows]

B-2

IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be executed as of the day first above written.

PARTICIPANT:	CEDAR RAPIDS BANK & TRUST
/s/ Larry J. Helling Larry J. Helling	By:	/s/ James J. Brownson James J. Brownson
		Chairman, QCR Holdings, Inc.,
		the parent company of the Employer

B-3

EX-10.25

Exhibit 10.25

QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective October 23, 2008)

PARTICIPATION AGREEMENT

THIS PARTICIPATION AGREEMENT (the “Participation Agreement”) is entered into as of this 24^th day of October, 2008 by and between QCR Holdings, Inc. (the “Employer”) and Todd A. Gipple, an executive of the Employer (the “Participant”).

RECITALS:

WHEREAS, QCR Holdings, Inc. (“QCR”) has adopted the QCR Holdings Executive Deferred Compensation Plan (Effective October 23, 2008) (the “Plan”), the Employer provides for participation in such Plan and the Administrator has determined that the Participant is eligible to participate in the Plan on the terms and conditions set forth in this Participation Agreement and the Plan.

NOW, THEREFORE, in consideration of the foregoing and the agreements and covenants set forth herein, the parties agree as follows:

1. Definitions. Except as otherwise specifically provided herein, or unless the context otherwise requires, the terms used in this Participation Agreement shall have the same meanings as set forth in the Plan.

2. Incorporation of Plan. The Plan, a copy of which is attached hereto as Exhibit A, is hereby incorporated into this Participation Agreement as if fully set forth herein, and the parties hereby agree to be bound by all of the terms and provisions contained in the Plan. The Participant hereby acknowledges receipt of a copy of the Plan and, subject to the foregoing, confirms the Participant’s understanding and acceptance of all of the terms and conditions contained therein. The Plan and this Participation Agreement supersede and replace in their entirety any prior agreements relating to such benefits.

3. Effective Date of Participation. The effective date of the Participant’s participation in the Plan shall be January 1, 2002 (the “Participation Date”), which includes any period Participant participated under an individual deferred compensation agreement between the Participant and the Employer which was amended and restated as the Plan.

4. Maximum Deferral Percentage. For purposes of Section 3.1.2 of the Plan, the Participant is permitted to elect to defer up to one hundred percent (100%) of the Participant’s Compensation on an annual basis to the Participant’s Deferral Account.

5. Matching Contribution. For purposes of Section 4.1.2 of the Plan, the Employer will credit the Participant’s Deferral Account with a Matching Contribution equal to one hundred percent (100%) of the Participant’s Deferrals, but not to exceed $15,000 (fifteen thousand dollars).

6. Interest. For purposes of Section 4.1.4 of the Plan, interest is to be accrued on the account balances and compounded at an annual rate equal to the Prime Rate as established on the first business day of the Plan Year. This interest rate shall have a minimum or floor of six percent (6%) and shall not exceed twelve percent (12%).

7. Change of Control Benefit — Amount of Benefit. For purpose of Section 5.3.1 of the Plan, the Participant’s benefit due to a Change of Control shall be greater of (a) the Participant’s Deferral Account balance at the time of the Separation from Service related to the Change of Control, or (b) $1,288,000 (one million two hundred and eighty-eight thousand dollars).

8. Change of Control Benefit — Form of Payment and Payment Date. For purposes of Section 5.3.2 of the Plan, the Participant’s benefit due to a Change of Control shall be paid in a single lump sum within 60 days following the separation from service on or after a Change of Control, subject to Section 5.6 of the Plan.

9. Death Benefits. For purposes of Section 6.1.1 of the Plan, the benefit due to the death of the Participant shall be the greater of (a) the Participant’s Deferred Account balance at the time of death, or (b) $1,288,000 (one million two hundred and eighty-eight thousand dollars).

10. Successors. This Participation Agreement shall be binding upon each of the parties and shall also be binding upon their respective successors and the Employer’s assigns.

11. Amendments. This Participant Agreement may not be modified or amended except by a duly executed instrument in writing signed by the Employer and the Participant consistent with the provisions of Code Section 409A.

[signature page follows]

B-2

IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be executed as of the day first above written.

PARTICIPANT:	QCR HOLDINGS, INC.
/s/ Todd A. Gipple Todd A. Gipple	By:	/s/ James J. Brownson James J. Brownson
		Chairman, QCR Holdings, Inc.

B-3

EX-10.26

Exhibit 10.26

QCR HOLDINGS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective October 23, 2008)

PARTICIPATION AGREEMENT

THIS PARTICIPATION AGREEMENT (the “Participation Agreement”) is entered into as of this 31st day of December, 2008 by and between Quad City Bank and Trust Company (the “Employer”) and Michael A. Bauer, an executive of the Employer (the “Participant”).

RECITALS:

WHEREAS, QCR Holdings, Inc. (“QCR”) has adopted the QCR Holdings Executive Deferred Compensation Plan (Effective October 23, 2008) (the “Plan”), the Employer provides for participation in such Plan and the Administrator has determined that the Participant is eligible to participate in the Plan on the terms and conditions set forth in this Participation Agreement and the Plan.

NOW, THEREFORE, in consideration of the foregoing and the agreements and covenants set forth herein, the parties agree as follows:

1. Definitions. Except as otherwise specifically provided herein, or unless the context otherwise requires, the terms used in this Participation Agreement shall have the same meanings as set forth in the Plan.

2. Incorporation of Plan. The Plan, a copy of which is attached hereto as Exhibit A, is hereby incorporated into this Participation Agreement as if fully set forth herein, and the parties hereby agree to be bound by all of the terms and provisions contained in the Plan. The Participant hereby acknowledges receipt of a copy of the Plan and, subject to the foregoing, confirms the Participant’s understanding and acceptance of all of the terms and conditions contained therein. The Plan and this Participation Agreement supersede and replace in their entirety any prior agreements relating to such benefits.

3. Effective Date of Participation. The effective date of the Participant’s participation in the Plan shall be June 28, 2000 (the “Participation Date”), which includes any period Participant participated under an individual deferred compensation agreement between the Participant and the Employer which was amended and restated as the Plan.

4. Maximum Deferral Percentage. For purposes of Section 3.1.2 of the Plan, the Participant is permitted to elect to defer up to one hundred percent (100%) of the Participant’s Compensation on an annual basis to the Participant’s Deferral Account.

5. Matching Contribution. For purposes of Section 4.1.2 of the Plan, the Employer will credit the Participant’s Deferral Account with a Matching Contribution equal to one hundred percent (100%) of the Participant’s Deferrals, but not to exceed $20,000 (twenty thousand dollars).

6. Interest. For purposes of Section 4.1.4 of the Plan, interest is to be accrued on the account balances and compounded at an annual rate equal to the Prime Rate as established on the first business day of the Plan Year. This interest rate shall have a minimum or floor of eight percent (8%) and shall not exceed ten percent (10%).

7. Payment of Benefit. In full satisfaction of Participant’s benefits under the plan, and notwithstanding anything in the Plan to the contrary, Participant’s Deferred Account shall be fully paid to Participant in a single lump sum as of the Employer’s first regular payroll date in December, 2009.

8. Change of Control Benefit — Amount of Benefit. For purpose of Section 5.3.1 of the Plan, the Participant’s benefit due to a Change of Control shall be greater of (a) the Participant’s Deferral Account balance at the time of the Separation from Service related to the Change of Control, or (b) eight hundred ninety eight thousand three hundred and ninety-nine dollars $898,399.

9. Death Benefits. For purposes of Section 6.1.1 of the Plan, the benefit due to the death of the Participant (occurring prior to a Separation from Service) shall be the greater of (a) the Participant’s Deferred Account balance at the time of death, or (b)  $898,399 (eight hundred ninety eight thousand three hundred and ninety-nine dollars).

10. Successors. This Participation Agreement shall be binding upon each of the parties and shall also be binding upon their respective successors and the Employer’s assigns.

11. Amendments. This Participant Agreement may not be modified or amended except by a duly executed instrument in writing signed by the Employer and the Participant consistent with the provisions of Code Section 409A.

IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be executed as of the day first above written.

PARTICIPANT:	QUAD CITY BANK & TRUST
/s/ Michael A. Bauer	By:	/s/ James J. Brownson
Michael A. Bauer		James J. Brownson
		Chairman, QCR Holdings, Inc.
		the parent company of the Employer

B-2

EX-10.27

Exhibit 10.27

AMENDED AND RESTATED
NON-QUALIFIED SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN

QCR HOLDINGS, INC.
(As Amended and Restated July 24, 2008)

QCR HOLDINGS, INC.

NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AMENDED AND RESTATED JULY 24, 2008)

QCR HOLDINGS, INC. and its affiliates maintain individual non-qualified supplemental executive retirement plans and various Non-qualified Supplemental Retirement Joinder Agreements, which are applicable to certain key employees (the “Executives”) set forth in Appendix A (the “Joinder Agreements”). As of July  _____, 2008 (the “Restatement Date”), the plan is hereby amended and restated in its entirety as the QCR HOLDINGS, INC. NON-QUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (As Amended and Restated July 24, 2008) (the “Plan”). All obligations under the Plan will be solely borne by the Company or the affiliate that employs the Executive (the “Employer”). QCR HOLDINGS, INC. (the “Company”) is a party to this Plan for the sole purpose of guaranteeing the Employer’s performance hereunder.

The Company and the Employers intend this amendment and restatement of the Plan to be a material modification of the Plan such that all amounts accrued under the Plan, including amounts accrued prior to December 31, 2004, shall be subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended.

The purpose of this Plan is to provide supplemental retirement benefits to selected Executives, each of whom is a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future business success of the Employer. This Plan shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended.

SECTION I
DEFINITIONS

When used herein, the following words and phrases shall have the meanings below unless the context clearly indicates otherwise:

1.1	“Accrued Benefit” means as of any date, that portion of the Supplemental Retirement Benefit which is required to be expensed and accrued under generally accepted accounting principles (GAAP) where such benefit is computed with all current census data as of the date of the relevant determination.
1.2	“Act” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
1.3	“Administrator” means the Board of the Employer, or a designated committee thereof.
1.4	“Beneficiary” means the person or persons (and their heirs) designated as Beneficiary by the Executive to whom the deceased Executive’s benefits are payable. If no Beneficiary is so designated, then the Executive’s Spouse, if living, will be deemed the Beneficiary. If the Executive’s Spouse is not living, then the Children of the Executive will be deemed the Beneficiaries and will take on a per stirpes basis. If there are no living Children, then the Estate of the Executive will be deemed the Beneficiary.

1.5	“Benefit Age” shall be the birthday on which the Executive attains the age of 65, unless otherwise set forth in such Executive’s Joinder Agreement.
1.6	“Benefit Eligibility Date” shall be the later of (1) the 1st day of the month following the month in which the Executive attains the Benefit Age, or (ii) the 1st day of the month following the month in which the Executive actually Retires.
1.7	“Benefit Commencement Date” shall mean the date set forth in Section 4.1.
1.8	“Board” shall mean the Board of Directors of the Company, unless specifically noted otherwise.
1.9	“Cause” shall mean:

(A)	as such term is defined in an employment agreement between the Executive and an Employer, or if no such agreement or definition exists, then as provided below in this Section 1.9;
(B)	a material violation by the Executive of any applicable material law or regulation respecting the business of the Employer;
(C)	the Executive being found guilty of a felony, an act of dishonesty in connection with the performance of his duties as an officer of the Employer, or an act or acts which disqualify the Executive from serving as an officer or director of the Employer; or
(D)	the willful or negligent failure of the Executive to perform his duties in any material respect.

1.10 A “Change in Control” shall mean and include the following with respect to the Company, or as provided below, the Employer and shall be deemed to have occurred on the earliest of the following dates:

(A)

The date of the consummation of the acquisition by any person (as such term is defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of thirty-three percent (33%) or more of the combined voting power of the then outstanding voting securities of the Company or the Employer; or

(B)

The date that individuals who, as of the date hereof, are members of the Board of Directors of the Company (the “Company Board”) cease for any reason during any 12 month period, to constitute a majority of the Company Board, unless the election, or nomination for election by the stockholders, of any new director was approved by a vote of a majority of the Company Board, and such new director shall, for purposes of this Plan, be considered as a member of the Company Board; or

2

(C)	The date of the consummation by the Company, or the Employer, of (i) a merger or consolidation if the stockholders of the Company, immediately before such merger or consolidation, do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation, in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation or (ii) a complete liquidation or dissolution or an agreement for the sale or other disposition of two-thirds or more of the consolidated assets of the Company or the Employer.
	Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because thirty-three percent (33%) or more of the combined voting power of the then outstanding securities of the Company or the Employer is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the entity or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company or the Employer in substantially the same proportion as their ownership of stock of the Company or the Employer immediately prior to such acquisition.
	In the event that any benefit under the Plan constitutes Deferred Compensation (as defined in Section 409A) and the settlement of or distribution of benefits under this Plan is to be triggered by a Change in Control, then such settlement or distribution shall be subject to the event constituting the Change in Control also constituting a “change in control event” permitted under Section 409A.

1.11	“Change in Control Termination” means the Executive’s Termination of Employment either voluntary or involuntary which occurs within thirty-six (36) months of a Change in Control.
1.12	“Children” means the Executive’s children, or the issue of any deceased Children, then living at the time payments are due the Children under this Plan. The term “Children” shall include both natural and adopted Children.
1.13	“Code” means the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder from time to time.
1.14	“Company” means QCR Holdings, Inc., or its successor.
1.15	“Disabled” means that the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Employer’s employees.

3

1.16	“Disability Benefit” means the monthly benefit payable to the Executive following a determination, in accordance with Section 4.10, that he is Disabled.
1.17	“Early Retirement” means the Executive’s Termination of Employment following the Executive’s attainment of age 55 and completion of ten (10) Years of Service with the Employer or affiliated entity provided the Original Effective Date of the Executive’s Joinder Agreement is at least two (2) years prior to his Termination of Employment.
1.18	“Early Retirement Eligibility Date” means the date on which the Executive is first eligible for Early Retirement.
1.19	“Employer” means the Company or the affiliated entity which employs the Executive, as reflected in the applicable Joinder Agreement, or any successor thereto.
1.20	“Executive” means a key employee of the Employer selected by the Company to participate in the Plan.
1.21	“Estate” means the estate of the Executive.
1.22	“Full-Time” means employment during a Plan Year in which the Executive works at least 1,600 hours.
1.23	“Interest Factor” unless specifically designated otherwise in this Section or in another place in this Plan, means annual compounding or discounting, as applicable, at six percent (6%). In the event a lump sum benefit is paid to Executive upon a Change in Control, for purposes of determining the value of an Executive’s lump sum benefit, the Interest Factor shall mean 120% of the semiannual applicable federal rate (AFR) as determined under Code Section 1274(d).
1.24	“Joinder Agreement” means the Non-Qualified Supplemental Executive Retirement Joinder Agreement between the Executive and Employer.
1.25	“Original Effective Date” is the date of a prior Joinder Agreement, if any, and set forth in the current Joinder Agreement, and if no such prior Joinder existed, then the date of execution of the Joinder Agreement.
1.26	“Part-Time” means employment on less than a Full-Time basis.
1.27	“Payout Period” means the time frame during which benefits payable hereunder shall be distributed pursuant to the applicable distribution provisions set forth in this Plan.
1.28	“Plan Year” shall mean the calendar year.

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1.29	“Retire(s)” or “Retirement” means the Executive’s Termination of Employment following Executive’s attainment of Benefit Age.
1.30	“Section 409A” means Code Section 409A and any U.S. Treasury regulations and guidance promulgated thereunder, including such regulations and guidance promulgated after the Restatement Date of the Plan as deemed appropriate by the Administrator.
1.31	“Separation from Service” shall mean an Executive’s “separation from service” as determined under Treas. Reg. Section 1.409A-1(h).
1.32	“Specified Employee” means any Executive who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Administrator based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). All Executives who are determined to be key employees under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the 12-month period that begins on the April 1 following the close of such identification period. For purposes of determining whether an individual is a key employee under Code Section 416(i), “compensation” shall mean such individual’s W-2 compensation as reported by the Employer for a particular calendar year.
1.33	“Spouse” means the individual to whom the Executive is legally married at the time of the Executive’s death, provided, however, that the term “Spouse” shall not refer to an individual to whom the Executive is legally married at the time of death if the Executive and such individual have entered into a formal separation agreement (provided that such separation agreement does not provide otherwise or state that such individual is entitled to a portion of the benefit hereunder) or formally initiated divorce proceedings through the courts.
1.34	“Supplemental Retirement Benefit” means an annual amount (before taking into account federal and state income taxes), equal to two and one-half percent (21/2%) (or a pro-rata percentage of 21/2% for each Year of Service in which the Executive is employed Part-Time) for each Year of Service until the Executive attains his Benefit Age (not to exceed 40 Years of Service) with a maximum of seventy percent (70%), multiplied by the average annual base salary plus cash bonus (excluding insurance bonus compensation) for the three (3) most recently completed Plan Years in which Executive is a Full-Time Employee. Such Supplemental Retirement Benefit shall be reduced by the annual benefit derived from any Employer contributions plus earnings thereon to the credit of Executive in the Company’s or the Employer’s 401(k) or other deferred compensation plans in which Executive is also a participant calculated in accordance with the projections conducted at the time the Plan is adopted. The Supplemental Retirement Benefit shall be payable in monthly installments throughout the Payout Period.
1.35	“Supplemental Early Retirement Benefit” means an annual amount (before taking into account federal and state income taxes) payable under Section 4.7 of the Plan in the event of the Executive’s Early Retirement.

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1.36	“Survivor’s Benefit” means, if the Employer has obtained insurance on the life of the Executive, an amount payable to the Beneficiary in a single lump sum (unless otherwise provided in the Joinder Agreement) equal to the amount designated in the Executive’s Joinder Agreement as the “Survivor’s Benefit.” If the Employer has not obtained insurance on the life of the Executive, the Survivor’s Benefit shall be equal to the Accrued Benefit of the Executive as of Executive’s date of death, and payable in a single lump sum (unless otherwise provided in the Joinder Agreement).
1.37	“Termination of Employment” means the Executive ceases to be employed by the Employer for any reason whatsoever, other than by reason of a leave of absence which is approved by the Employer, provided such termination constitutes a Separation from Service.
1.38	“Year of Service” means a 12 month period during which Executive is employed on a Full-Time or Part-Time basis. A year of service can be measured on the basis of anniversary dates from the Executive’s date of hire in the discretion of the Board.

SECTION II
ESTABLISHMENT OF RABBI TRUST

The Employer may establish a rabbi trust into which the Employer intends to contribute assets which shall be held therein, subject to the claims of the Employer’s creditors in the event of the Employer’s “Insolvency” as defined in the agreement which establishes such rabbi trust, until the contributed assets are paid to the Executives and their Beneficiaries in such manner and at such times as specified in this Plan. It is the intention of the Employer to make contributions to the rabbi trust to provide the Employer with a source of funds to assist it in meeting the liabilities of this Plan. The rabbi trust and any assets held therein shall conform to the terms of the rabbi trust agreement which has been established in conjunction with this Plan. To the extent the language in this Plan is modified by the language in the rabbi trust agreement, the rabbi trust agreement shall supersede this Plan. Any contributions to the rabbi trust shall be made during each Plan Year in accordance with the rabbi trust agreement. The amount of such contribution(s) shall be equal to the full present value of all benefit accruals under this Plan, if any, less: (i) previous contributions made on behalf of the Executive to the rabbi trust, and (ii) earnings to date on all such previous contributions, as may be applicable. In the event of a Change in Control, the Employer shall transfer to the rabbi trust within thirty (30) days prior to such Change in Control, the present value of an amount sufficient to fully fund the Supplemental Early Retirement Benefit for each Executive covered by this Plan.

SECTION III
SELECTION & ELIGIBILITY

3.1 Selection by Company. Participation in the Plan shall be limited to a select group of management and highly compensated employees of an Employer and/or the Company. From that group, the Company shall select, in its sole discretion, employees of an Employer to participate in the Plan.

3.2 Enrollment Requirements. As a condition to participation, each selected employee shall complete, sign and return to the Administrator a Joinder Agreement and a Beneficiary Designation Form. In addition, the Administrator, in its sole discretion, shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

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3.3 Eligibility; Commencement of Participation. Provided an employee selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Administrator, that employee shall commence participation in the Plan on the date specified by the Administrator. If a selected employee fails to meet all such requirements prior to that date, the employee shall not be eligible to participate in the Plan until the completion of those requirements.

3.4 Termination of Participation. If the Administrator determines in good faith that an Executive no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Section 201(2) of ERISA, the Administrator may, to the extent permitted by Section 409A, preclude the Executive from further participation in the Plan.

SECTION IV
BENEFITS

4.1 Benefit Commencement Date. An Executive’s Benefit Commencement Date shall be the earliest to occur of the following dates:

(A)	The date the Executive reaches his Benefit Eligibility Date;
(B)	The date the Executive dies;
(C)	The date of the Executive’s Early Retirement;
(D)	The date of the Executive’s Change in Control Termination; or
(E)	The Early Termination Eligibility Date in the event of a termination under Section 4.6.

4.2 Time of Distribution. Distributions pursuant to the Plan shall be paid in accordance with Section 4.4, 4.5, 4.6, 4.7, 4.8 and 4.10 provided that:

(A)	Any distribution to be made in a lump sum shall be paid no later than sixty (60) days following the Executive’s Benefit Commencement Date.
(B)	Any distributions to be paid in the form of monthly installments shall commence no later than sixty (60) days following the Executive’s Benefit Commencement Date and thereafter shall be made no later than fifteen (15) days after the last business day of the preceding month and continue for One Hundred Eighty (180) months.

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(C)

If, as of the effective date of an Executive’s Termination of Employment, the Company is publicly traded and the Executive is a Specified Employee, then, to the extent required pursuant to Section 409A, payment of any portion of his Supplemental Retirement Benefit that would otherwise have been paid to the Executive during the six-month period following his Termination of Employment and which would constitute deferred compensation under Section 409A (the “Delayed Payments”) shall be delayed until the date that is six (6) months and one day following Executive’s Termination of Employment or, if earlier, the date of the Executive’s death (The “Delayed Payment Date”). As of the Delayed Payment Date, the Delayed Payments plus interest at a rate equal to the Interest Factor, for the period of delay, shall be paid to the Executive in a single lump sum. Any portion of the Supplemental Retirement Benefit that was not otherwise due to be paid during the six-month period following the Executive’s Termination of Employment shall be paid to the Executive in accordance with the payment schedule set forth under the applicable distribution provision of this Plan.

(D)

Notwithstanding any provisions of the Plan or any Joinder Agreement to the contrary, if Executive’s Accrued Benefit, along with any other nonqualified deferred compensation that must be aggregated with this Plan pursuant to Section 409A, as of such Executive’s Termination of Employment has an aggregate value of not greater than the applicable dollar limit under Code Section 402(g)(1)(B) ($15,500 for calendar year 2008), the Executive’s Accrued Benefit, and all other plans aggregated with this Plan pursuant to Section 409A, shall be paid to the Executive in a lump sum payment on or before the later of:

(1)	December 31st of the calendar year in which the Executive’s Termination of Employment occurs; or
(2)	the 15th day of the third month following the Executive’s Termination of Employment.
(3)	Upon the date of payment pursuant to this Section 4.2, Executive shall have no further interest under the Plan or any similar deferred compensation arrangements, as defined under Section 409A with the Employer.

4.3 Change to Time or Manner of Payment. Any changes made to the time or form of payment shall be subject to the following constraints:

(A)	Any change shall be subject to approval of the Administrator;
(B)	The change to modify the time or form of payment shall not take effect until at least twelve (12) months after the date on which the change is made;
(C)	The first payment pursuant to the change shall be delayed for a period of not less than five (5) years from the Executive’s originally scheduled Benefit Commencement Date; and
(D)	Notwithstanding the foregoing, the Administrator shall interpret all provisions relating to the change under this Section in a manner that is consistent with Section 409A.

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4.4 Retirement Benefit. If the Executive is in service with the Employer until reaching his Benefit Age, the Executive shall be entitled to the Supplemental Retirement Benefit. Such benefit shall commence on the Executive’s Benefit Commencement Date and shall be payable in monthly installments throughout the Payout Period. In the event the Executive dies at any time after attaining his Benefit Age, but prior to the commencement or completion of all such payments due and owing hereunder, the Employer shall pay to the Executive’s Beneficiary a lump sum payment equal to the Accrued Benefit at the time of death.

4.5 Death Prior to Benefit Age. If the Executive dies prior to attaining his Benefit Age, but while employed at the Employer, the Executive’s Beneficiary shall be entitled to the Survivor’s Benefit. Payment of the Survivor’s Benefit shall commence within thirty (30) days of the Executive’s death and shall be payable as provided in Section 1.36.

4.6 Involuntary Termination (Other Than for Cause) or Voluntary Termination of Employment. If the Executive’s employment with the Employer is involuntarily terminated prior to the attainment of his Benefit Age, for any reason other than: (i) for Cause; (ii) a Change in Control Termination; (iii) the Executive’s death; (iv) Disability; or (v) if the Executive voluntarily terminates his employment, other than due to Early Retirement, as defined below, then the Executive (or his Beneficiary) shall be entitled to Executive’s Accrued Benefit determined at the time of the Executive’s Termination of Employment. Such benefit shall commence on the first day of the first month following the Early Retirement Benefit Eligibility Date, shall be annuitized (using the Interest Factor) and be payable in monthly installments throughout the Payout Period. For purposes of clarity, such amounts shall not be credited with the Interest Factor prior to Benefit Commencement Date. In the event the Executive dies prior to his Benefit Commencement Date, the Employer shall pay to the Executive’s Beneficiary a Survivor’s Benefit calculated as if the Employer had not obtained insurance on the Executive. In the event the Executive dies prior to completion of all such payments due and owing hereunder, the Employer shall pay to the Executive’s Beneficiary a lump sum payment equal to the Accrued Benefit at the time of death.

4.7 Early Retirement Prior to Benefit Age. If the Executive terminates employment due to Early Retirement prior to attainment of his Benefit Age, Executive shall be entitled to receive the Supplemental Early Retirement Benefit, as described below. The Supplemental Early Retirement Benefit shall be the Executive’s Supplemental Retirement Benefit calculated using the Executive’s Years of Service on the date of the Executive’s Early Retirement. Such benefit shall commence on the Executive’s Benefit Commencement Date and shall be payable in monthly installments throughout the Payout Period. In the event the Executive dies following his Termination of Employment prior to completion of all such payments due and owing hereunder, the Employer shall pay to the Executive’s Beneficiary a lump sum payment equal to the Accrued Benefit at the time of death.

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4.8 Change in Control Termination. If an Executive experiences a Change in Control Termination, the Executive shall be entitled to receive the Executive’s Supplemental Retirement Benefit calculated using the Executive’s Years of Service as of Executive’s Termination of Employment (without regard to a minimum number of Years of Service or age). Unless otherwise provided in the Joinder Agreement, such benefit shall commence on the Executive’s Benefit Commencement Date and shall be payable in monthly installments throughout the Payout Period. In the event the Executive dies following his Change in Control Termination and prior to commencement or completion of all such payments due and owing hereunder, the Employer shall pay to the Executive’s Beneficiary a lump sum payment equal to the Accrued Benefit at the time of death.

4.9 Termination for Cause. Other than with respect to a Change in Control Termination, if the Executive is terminated for Cause, all benefits under this Plan shall be forfeited and this Plan shall become null and void with respect to the Executive or the Executive’s Beneficiaries. In the event of a Change in Control Termination for Cause, the benefit here under shall be calculated as an Early Retirement occurrence on the Change in Control date.

4.10 Disability Benefit. Notwithstanding any other provision hereof, if the Executive becomes Disabled and then experiences a Termination of Employment, the Executive shall be entitled to receive his Disability Benefit hereunder. The Disability Benefit shall be the Executive’s Accrued Benefit on the date of the Executive’s Termination of Employment due to Disability. Such benefit shall be annuitized (using the Interest Factor) and be payable as of the Executive’s Benefit Commencement Date and shall be payable commencing on the first day of the first month following the Benefit Eligibility Date and shall be paid in the form of monthly installments throughout the Payout Period. For purposes of clarity, such Accrued Benefit amount shall be credited with the Interest Factor prior to Benefit Eligibility Date. In the event the Executive dies at any time after Termination of Employment due to disability but prior to his Benefit Commencement Date, the Employer shall pay to the Executive’s Beneficiary a lump sum payment equal to the Accrued Benefit at the time of death.

4.11 Additional Death Benefit — Burial Expense. Unless provided under any other plan or agreement, in addition to the above-described death benefits, upon the Executive’s death, the Executive’s Beneficiary shall be entitled to receive a one-time lump sum death benefit in the amount of Ten Thousand ($10,000.00) Dollars. This benefit shall be provided specifically for the purpose of providing payment for burial and/or funeral expenses of the Executive. Such death benefit shall be payable within thirty (30) days of the Executive’s death. The Executive’s Beneficiary shall not be entitled to such benefit if the Executive is terminated for Cause prior to death.

4.12 Transition Rule. In a manner that is consistent with Section 409A, the Administrator may solicit new Joinder Agreements from the Executives in order for the Executives to change the method or timing of such distributions of all amounts subject to Section 409A under the Plan, provided such elections are solicited and properly made prior to December 31, 2008. In the event that the Administrator elects to solicit new Joinder Agreements pursuant to this Section, the failure by the Executive to submit a complete and timely Joinder Agreement will result in the application of the most recently submitted Joinder Agreement.

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SECTION V
BENEFICIARY DESIGNATION

The Executive shall make an initial designation of primary and secondary Beneficiaries upon execution of his Joinder Agreement and shall have the right to change such designation, at any subsequent time, by submitting to the Administrator in substantially the form attached as Exhibit A to the Joinder Agreement, a written designation of primary and secondary Beneficiaries. Any Beneficiary designation made subsequent to execution of the Joinder Agreement shall become effective only when receipt thereof is acknowledged in writing by the Administrator. The most recent Beneficiary designation acknowledged in writing by the Administrator shall apply at the time of the Executive’s death.

SECTION VI
EXECUTIVE’S RIGHT TO ASSETS:
ALIENABILITY AND ASSIGNMENT PROHIBITION

At no time shall the Executive be deemed to have any lien, right, title or interest in or to any specific investment or asset of the Employer. The rights of the Executive, any Beneficiary, or any other person claiming through the Executive under this Plan, shall be solely those of an unsecured general creditor of the Employer. The Executive, the Beneficiary, or any other person claiming through the Executive, shall only have the right to receive from the Employer those payments so specified under this Plan. Neither the Executive nor any Beneficiary under this Plan shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of the benefits payable hereunder, nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by the Executive or his Beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise.

SECTION VII
REGULATORY SUSPENSION AND TERMINATION

7.1 If the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served under Section 8(e)(3) (12 U.S.C. §1818(e)(3)) or 8(g) (12 U.S.C. §1818(g)) of the Federal Deposit Insurance Act, as amended, the Employer’s obligations under this Plan shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer shall (A) pay the Executive all of the compensation withheld while their contract obligations were suspended and (B) reinstate any of the obligations, which were suspended.

7.2 If the Executive is removed and/or permanently prohibited from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e) (12 U.S.C. §1818(e)) or 8(g) (12 U.S.C. §1818(g)) of the Federal Deposit Insurance Act, as amended, all obligations of the Employer under this contract shall terminate as of the effective date of the order.

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7.3 If the Employer is in default as defined in Section 3(x) (12 U.S.C. §1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all obligations of the Employer under this Plan shall terminate as of the date of default.

7.4 All obligations of the Employer under this Plan shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the institution by the Federal Deposit Insurance Corporation (the “FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Employer under the authority contained in Section 13(c) (12 U.S.C. §1823(c)) of the Federal Deposit Insurance Act, as amended, or when the Employer is determined by the FDIC to be in an unsafe or unsound condition.

7.5 Any payments made to the Executive pursuant to this Plan, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) (12 U.S.C. § 1828(k)) of the Federal Deposit Insurance Act as amended, and any regulations promulgated thereunder, if the Employer is subject to such rules and regulations.

SECTION VIII
ADMINISTRATION AND CLAIMS PROVISIONS

8.1 Named Fiduciary and Administrator. The Employer shall be the Named Fiduciary and Administrator (the “Administrator”) of this Plan with respect to such Employer’s Executives. As Administrator, the Employer shall be responsible for the management, control and administration of the Plan as established herein. The Administrator may delegate to others certain aspects of the management and operational responsibilities of the Plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

8.2 Presentation of Claim. Any Executive or Beneficiary of a deceased Executive (such Executive or Beneficiary being referred to below as a “Claimant”) may deliver to the Administrator a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

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8.3 Notification of Decision. The Administrator shall consider a Claimant’s claim within a reasonable time; provided that claims based on Disability shall be considered within 45 days, unless, within such time, the Administrator notifies the Claimant in writing that a 30-day extension is required pursuant to Labor Regulation 2560.503-1. Once a decision is made, the Administrator shall notify the Claimant in writing:

(A)	that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or
(B)	that the Administrator has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

(1)	the specific reason(s) for the denial of the claim, or any part of it;
(2)	the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
(3)	a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and
(4)	an explanation of the claim review procedure set forth in Section 8.4 below, including Claimant’s right to bring a civil action as described in Section 8.6.

8.4 Review of a Denied Claim. Within 60 days (180 days for a claim based on Disability) after receiving a notice from the Administrator that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Administrator a written request for a review of the denial of the claim. Therefore, but not later than 30 days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(A)	may review pertinent documents;
(B)	may submit written comments or other documents; and/or
(C)	may request a hearing, which the Administrator, in its sole discretion, may grant.

8.5 Decision on Review. The Administrator shall render its decision on review promptly, and not later than 60 days (45 days for a claim based on Disability) after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Administrator’s decision must be rendered within 120 days after such date; provided, that this period shall be up to one 45-day extension for claims based on Disability. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(A)	specific reasons for the decision;
(B)	specific reference(s) to the pertinent Plan provisions upon which the decision was based; and
(C)	such other matters as the Administrator deems relevant.

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8.6 Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 7 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

8.7 Arbitration. If Claimant continues to dispute the benefit denial based upon completed performance of this Plan and the Joinder Agreement or the meaning and effect of the terms and conditions thereof, it shall be settled by arbitration administered by the AAA under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

SECTION IX
MISCELLANEOUS

9.1 Status of Plan. The Plan is intended to be a plan that is: (a) not qualified within the meaning of Code Section 401(a); (b) “unfunded and is maintained by the Company or Employer primarily for the purpose of providing deferred compensation for a select group of management and highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(l); and (c) compliant in all respects with Section 409A. The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

9.2 No Effect on Employment Rights. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence of the Plan.

9.3 State Law. The Plan is established under, and will be construed according to, the laws of the State of Iowa, to the extent such laws are not preempted by the Act and valid regulations published thereunder.

9.4 Severability and Interpretation of Provisions. In the event that any of the provisions of this Plan or portion hereof, are held to be inoperative or invalid by any court of competent jurisdiction, or in the event that any legislation adopted by any governmental body having jurisdiction over the Employer would be retroactively applied to invalidate this Plan or any provision hereof or cause the benefits hereunder to be taxable, then: (1) insofar as is reasonable, effect will be given to the intent manifested in the provisions held invalid or inoperative, and (2) the validity and enforceability of the remaining provisions will not be affected thereby. In the event that the intent of any provision shall need to be construed in a manner to avoid taxability, such construction shall be made by the plan administrator in a manner that would manifest to the maximum extent possible the original meaning of such provisions.

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9.5 Payment of Legal Fees. The Employer is aware that after a Change in Control, management of the Employer or the Company or their successors could cause or attempt to cause the Employer to refuse to comply with their obligations under this Plan, including the possible pursuit of litigation to avoid their obligations under this Plan. In these circumstances, the purpose of this Plan would be frustrated. It is the Employer’s intentions that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Plan, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive hereunder. It is the Employer’s intentions that the Executive not be forced to negotiate settlement of his rights under this Plan under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (a) the Employer has failed to comply with any of their obligations under this Plan, or (b) the Employer or any other person has taken any action to avoid its obligations under this Plan, the Employer irrevocably authorizes the Executive from time to time to retain counsel of his choice, at the expense of the Employer as provided in this Section 9.5, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Employer or any director, officer, stockholder, or other person affiliated with the Employer, in any jurisdiction. Notwithstanding any existing or previous attorney-client relationship between the Employer and any counsel chosen by the Executive under this Section 9.5, the Employer irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and the Employer and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this Section 9.5 shall be paid or reimbursed to the Executive by Employer on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices. The Employer’s obligation to reimburse Executive for legal fees as provided under this Section 9.5 and any separate employment, severance or other agreement between the Executive and the Employer shall not exceed $200,000 in the aggregate. Accordingly, the Employer’s obligations to pay the Executive’s legal fees provided by this Section 9.5 shall be offset by any legal fee reimbursement obligation the Employer may have with the Executive under any separate employment, severance or other agreement between the Executive and the Employer.

9.6 Facility of Payment. If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Employer may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Employer from all liability with respect to such benefit.

9.7 Unclaimed Benefit. The Executive shall keep the Employer informed of his current address and the current address of his Beneficiaries. If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s Beneficiary. If the location of the Executive’s Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s Estate. If there is no Estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and his Beneficiary(ies) shall thereupon forfeit any rights to the balance, if any, of any benefits provided for such Executive and/or Beneficiary under this Plan.

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9.8 Limitations on Liability. Notwithstanding any of the preceding provisions of the Plan, no individual acting as an employee or agent of the Employer, or as a member of the Board of Directors of the Employer or the Company shall be personally liable to the Executive or any other person for any claim, loss, liability or expense incurred in connection with the Plan.

9.9 Terms. Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.

9.10 Effect on Other Corporate Benefit Agreements. Nothing contained in this Plan shall affect the right of the Executive to participate in or be covered by any qualified or non-qualified pension, profit sharing, group, bonus or other supplemental compensation or fringe benefit agreement constituting a part of the Employer’s or the Company’s existing or future compensation structure.

9.11 Suicide. Notwithstanding anything to the contrary in this Plan, the benefits otherwise provided herein shall not be payable and this Plan shall become null and void if the Executive’s death results from suicide, whether sane or insane, within twenty-six (26) months after the Original Effective Date of his Joinder Agreement under this Plan.

9.12 Inurement. This Plan shall be binding upon and shall inure to the benefit of the Employer, its successors and assigns, and the Executive, his successors, heirs, executors, administrators, and Beneficiaries, and the Company shall require any acquirer in a Change in Control to expressly assume this Plan.

9.13 Tax Withholding. The Employer shall withhold from any benefits payable under this Plan all federal, state, city, employment and other taxes as shall be required pursuant to any law or governmental regulation then in effect in amounts and in a manner determined in the sole discretion of the Employer.

9.14 Expenses. All expenses incurred in the administration of the Plan, whether incurred by the Employer or the Plan, shall be paid by the Employer or the Company.

9.15 Distribution in the Event of Income Inclusion under Section 409A. If any portion of the Executive’s Supplemental Retirement Benefit or Supplemental Early Retirement Benefit under this Plan is required to be included in income by the Executive prior to receipt due to a failure of the Plan to meet the requirements of Section 409A, the Executive may petition the Administrator for a distribution of that portion of his Supplemental Retirement Benefit or Supplemental Early Retirement Benefit that is required to be included in his name. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Employer shall distribute to the Executive immediately available funds in an amount equal to the portion of Executive’s Supplemental Retirement Benefit or Supplemental Early Retirement Benefit required to be included in income as a result of the failure of the Plan to meet the requirements of Section 409A, which amount shall not exceed the Executive’s unpaid Supplemental Retirement Benefit or Supplemental Early Retirement Benefit under the Plan. If the petition is granted, such distribution shall be made within ninety (90) days of the date when the Executive’s petition is granted. Such a distribution shall affect and reduce the Executive’s benefits to be paid under this Plan.

16

9.16 Deduction Limitation on Benefit Payments. If the Employer determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to an Executive for a taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution to the Executive pursuant to the Plan prior to the Change in Control is deductible, the Employer may defer all or any portion of a distribution under the Plan. Any amounts deferred pursuant to this limitation shall continue to be credited with interest at a rate equal to the Interest Factor. The amounts so deferred and amounts credited thereon shall be distributed, in accordance with the requirements of Section 409A, to the Executive or his Beneficiary (in the event of the Executive’s death) in a single lump sum at the earliest possible date, as determined by the Employer in good faith, on which the deductibility of compensation paid or payable to the Executive for the taxable year of the Employer during which the distribution is made and will not be limited by Code Section 162(m).

9.17 Insolvency. Should the Employer be considered insolvent, the Company, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan, if the Company is not the Administrator. Upon receipt of such notice, the Administrator shall cease to make any payments to Executives who were Executives or their beneficiaries and shall hold any and all assets attributable to the Employer for the benefit of the general creditors of the Employer.

9.18 Interpretation. The provisions of this Plan shall be interpreted consistently with Section 409A, and to the extent inconsistent with such authority, shall be deemed to be modified to the extent necessary to make such provisions consistent with such authority. In addition, all questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole discretion, whose decision shall be final, binding and conclusive upon all persons.

9.19 Headings. Headings and sub-headings in this Plan are inserted for reference and convenience only and shall not be deemed a part of this Plan.

SECTION X
AMENDMENT/REVOCATION

10.1 The Company may, at any time, amend or modify the Plan in whole or in part by the action of its Board; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of an Executive’s Supplemental Retirement Benefit in existence at the time the amendment or modification is made, calculated as if the Executive had experienced a Termination of Employment as of the effective date of the amendment or modification, (ii) no amendment or modification of this Section 10.1 of the Plan shall be effective, and (iii) no amendment or modification shall be made unless such amendment or modification complies with Section 409A. The amendment or modification of the Plan shall not affect any Executive or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification.

17

10.2 Notwithstanding any provisions of the Plan to the contrary, in the event that the Company or Employer determines that any provision of the Plan may violate or otherwise not comply with Section 409A, the Company or Employer may, without consent of any Executive or Beneficiary: (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company or Employer determines necessary or appropriate to preserve the intended treatment of the Plan or the benefits provided by the Plan and/or (ii) take such other actions as the Company or Employer determines necessary or appropriate to comply with the requirements of Section 409A.

SECTION XI
TERMINATION

Although the Employer anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Employer will continue the Plan or will not terminate or freeze the Plan at any time in the future. Accordingly, to the maximum extent permissible under Section 409A, the Employer reserves the right to discontinue its sponsorship of the Plan and/or to terminate the Plan at any time with respect to any or all of the Executives, by action of its Board. Upon the termination of the Plan, the affected Executives’ Supplemental Retirement Benefit shall be distributed in accordance with the requirements of Section 409A; which, at the discretion of the Board may be in a single lump sum. The termination of the Plan shall not adversely affect any Executive or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination of the Plan.

SECTION XII
EXECUTION

This Plan sets forth the entire understanding of the parties hereto with respect to the transactions contemplated hereby, and any previous agreements or understandings between the parties hereto regarding the subject matter hereof are merged into and superseded by this Plan.

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IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of this first day of               .

QCR HOLDINGS, INC.
By:
	Title:

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Exhibit A

QCR HOLDINGS, INC. NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
BENEFICIARY DESIGNATION

The Executive, under the terms of the QCR Holdings, Inc. Non-qualified Supplemental Executive Retirement Plan (as Amended and Restated                     , 2008), hereby designates the following Beneficiary to receive any guaranteed payments or death benefits under such Plan, following his death:

PRIMARY BENEFICIARY:

SECONDARY BENEFICIARY:

This Beneficiary Designation hereby revokes any prior Beneficiary Designation which may have been in effect. Such Beneficiary Designation is revocable.

DATED:                       _____, 20_____.

(WITNESS) EXECUTIVE

A-1

Appendix A

QCR HOLDINGS INC. NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

JOINDER AGREEMENT

The Executive specified below is hereby participating in the QCR Holdings, Inc. Non-Qualified Supplemental Executive Retirement Plan (the “Plan”). In addition to the terms of the Plan, the Executive and the Employer agree that the Executive’s terms of participation are also subject to the following terms and conditions. In the event that any terms or conditions of the Plan are inconsistent with or contrary to the terms of this Joinder Agreement, the terms of this Joinder Agreement shall control.

Section 1. Terms of Joinder Agreement. The following words and phrases relate to Executive’s participation in the Plan:

(i)	The “Executive” is [                                        ].
(ii)	The “Employer” is [                                        ], and any successors thereto.
(iii)	The “Original Effective Date” is [                                        ].
(iv)	The “Benefit Age” is age [65].
(v)	The “Survivor Benefit” covered by insurance is [$                    ] annually for 15 years.

Section 2. Elections.

(i)	I elect to have the Survivor’s Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Survivor’s Benefit being paid in a single lump sum*.)
(ii)	I elect to have the Change in Control Termination Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Change in Control Termination Benefit being paid in a single lump sum*.)

*      Lump sum payment amounts will be calculated based on a discounted present value using the Interest Factor.

Section 3. Participation. Executive understands that this Joinder Agreement must be executed and provided to the Administrator in order for Executive to continue his participation in the Plan and that by executing this Joinder Agreement Executive acknowledges and agrees to the amendment and restatement of the Plan as provided therein.

Appendix A-1

Section 4. Miscellaneous. Executive understands that he is entitled to review or obtain a copy of the Joinder Agreement and the Plan, at any time, and may do so by contacting the Employer.

Section 5. Effective Date. This Joinder Agreement shall become effective upon its execution by both the Executive and a duly authorized officer of the Employer.

IN WITNESS WHEREOF, the Employer has caused this Joinder Agreement to be executed by its duly authorized officer, and Executive has signed this Agreement as of the dates set forth below.

[Executive]		Date
[Employer]		Date
By:
	Its:

Appendix A-2

EX-10.28

Exhibit 10.28

QCR HOLDINGS INC. NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

JOINDER AGREEMENT

The Executive specified below is hereby participating in the QCR Holdings, Inc. Non-Qualified Supplemental Executive Retirement Plan (the “Plan”). In addition to the terms of the Plan, the Executive and the Employer agree that the Executive’s terms of participation are also subject to the following terms and conditions. In the event that any terms or conditions of the Plan are inconsistent with or contrary to the terms of this Joinder Agreement, the terms of this Joinder Agreement shall control.

Section 1. Terms of Joinder Agreement. The following words and phrases relate to Executive’s participation in the Plan:

(i) The “Executive” is Douglas M. Hultquist.

(ii) The “Employer” is QCR Holdings, Inc. and Quad City Bank and Trust Company, and any successors thereto.

(iii) The “Original Effective Date” is May 14, 2004.

(iv) The “Benefit Age” is age 65.

(v) The “Survivor Benefit” covered by insurance is $255,912.00 annually for 15 years.

Section 2. Elections.

(i) I elect to have the Survivor’s Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Survivor’s Benefit being paid in a single lump sum*.)

(ii) I elect to have the Change in Control Termination Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Change in Control Termination Benefit being paid in a single lump sum*.)

*      Lump sum payment amounts will be calculated based on a discounted present value using the Interest Factor.

Section 3. Participation. Executive understands that this Joinder Agreement must be executed and provided to the Administrator in order for Executive to continue his participation in the Plan and that by executing this Joinder Agreement Executive acknowledges and agrees to the amendment and restatement of the Plan as provided therein.

Section 4. Miscellaneous. Executive understands that he is entitled to review or obtain a copy of the Joinder Agreement and the Plan, at any time, and may do so by contacting the Employer.

Section 5. Effective Date. This Joinder Agreement shall become effective upon its execution by both the Executive and a duly authorized officer of the Employer.

IN WITNESS WHEREOF, the Employer has caused this Joinder Agreement to be executed by its duly authorized officer, and Executive has signed this Agreement as of the dates set forth below.

/s/ Douglas M. Hultquist		December 31, 2008
Douglas M. Hultquist		Date
/s/ James J. Brownson		December 31, 2008
QCR Holdings, Inc.		Date
By:	James J. Brownson
	Its: Chairman
/s/ Shellee R. Showalter		December 31, 2008
Quad City Bank and Trust Company		Date
By:	Shellee R. Showalter
	Its: Secretary

EX-10.29

Exhibit 10.29

QCR HOLDINGS INC. NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

JOINDER AGREEMENT

The Executive specified below is hereby participating in the QCR Holdings, Inc. Non-Qualified Supplemental Executive Retirement Plan (the “Plan”). In addition to the terms of the Plan, the Executive and the Employer agree that the Executive’s terms of participation are also subject to the following terms and conditions. In the event that any terms or conditions of the Plan are inconsistent with or contrary to the terms of this Joinder Agreement, the terms of this Joinder Agreement shall control.

Section 1. Terms of Joinder Agreement. The following words and phrases relate to Executive’s participation in the Plan:

(i) The “Executive” is Larry Helling.

(ii) The “Employer” is Cedar Rapids Bank and Trust Company and any successors thereto.

(iii) The “Original Effective Date” is May 13, 2004.

(iv) The “Benefit Age” is age 65.

(v) The “Survivor Benefit” covered by insurance is $149,676.00 annually for 15 years.

Section 2. Elections.

(i) I elect to have the Survivor’s Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Survivor’s Benefit being paid in a single lump sum*.)

(ii) I elect to have the Change in Control Termination Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Change in Control Termination Benefit being paid in a single lump sum*.)

*      Lump sum payment amounts will be calculated based on a discounted present value using the Interest Factor.

Section 3. Participation. Executive understands that this Joinder Agreement must be executed and provided to the Administrator in order for Executive to continue his participation in the Plan and that by executing this Joinder Agreement Executive acknowledges and agrees to the amendment and restatement of the Plan as provided therein.

Section 4. Miscellaneous. Executive understands that he is entitled to review or obtain a copy of the Joinder Agreement and the Plan, at any time, and may do so by contacting the Employer.

Section 5. Effective Date. This Joinder Agreement shall become effective upon its execution by both the Executive and a duly authorized officer of the Employer.

IN WITNESS WHEREOF, the Employer has caused this Joinder Agreement to be executed by its duly authorized officer, and Executive has signed this Agreement as of the dates set forth below.

/s/ Larry J. Helling		December 31, 2008
Larry J. Helling		Date
/s/ Dana L. Nichols		December 31, 2008
Cedar Rapids Bank and Trust Company		Date
By:	Dana L. Nichols
	Its: Senior Vice Present

EX-10.30

Exhibit 10.30

QCR HOLDINGS INC. NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

JOINDER AGREEMENT

The Executive specified below is hereby participating in the QCR Holdings, Inc. Non-Qualified Supplemental Executive Retirement Plan (the “Plan”). In addition to the terms of the Plan, the Executive and the Employer agree that the Executive’s terms of participation are also subject to the following terms and conditions. In the event that any terms or conditions of the Plan are inconsistent with or contrary to the terms of this Joinder Agreement, the terms of this Joinder Agreement shall control.

Section 1. Terms of Joinder Agreement. The following words and phrases relate to Executive’s participation in the Plan:

(i) The “Executive” is Todd A. Gipple.

(ii) The “Employer” is QCR Holdings, Inc. and any successors thereto.

(iii) The “Original Effective Date” is May 14,2004.

(iv) The “Benefit Age” is age 65.

(v) The “Survivor Benefit” covered by insurance is $270,024.00 annually for 15 years.

Section 2. Elections.

(i) I elect to have the Survivor’s Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Survivor’s Benefit being paid in a single lump sum*.)

(ii) I elect to have the Change in Control Termination Benefit paid [_____] in a single lump sum*, or [_____] in 180 monthly installments. (Failure to elect one method will result in the Change in Control Termination Benefit being paid in a single lump sum*.)

*      Lump sum payment amounts will be calculated based on a discounted present value using the Interest Factor.

Section 3. Participation. Executive understands that this Joinder Agreement must be executed and provided to the Administrator in order for Executive to continue his participation in the Plan and that by executing this Joinder Agreement Executive acknowledges and agrees to the amendment and restatement of the Plan as provided therein.

Section 4. Miscellaneous. Executive understands that he is entitled to review or obtain a copy of the Joinder Agreement and the Plan, at any time, and may do so by contacting the Employer.

Section 5. Effective Date. This Joinder Agreement shall become effective upon its execution by both the Executive and a duly authorized officer of the Employer.

IN WITNESS WHEREOF, the Employer has caused this Joinder Agreement to be executed by its duly authorized officer, and Executive has signed this Agreement as of the dates set forth below.

/s/ Todd A. Gipple		December 31, 2008
Todd A. Gipple		Date
/s/ James J. Brownson		December 31, 2008
QCR Holdings, Inc.		Date
By:	James J. Brownson
	Its: Chairman

EX-10.31

Exhibit 10.31

QCR HOLDINGS INC. NON-QUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

JOINDER AGREEMENT

The Executive specified below is hereby participating in the QCR Holdings, Inc. Non-Qualified Supplemental Executive Retirement Plan (the “Plan”). In addition to the terms of the Plan and any Amendments thereto, the Executive and the Employer agree that the Executive’s terms of participation are also subject to the following terms and conditions. In the event that any terms or conditions of the Plan are inconsistent with or contrary to the terms of this Joinder Agreement, the terms of this Joinder Agreement shall control.

Section 1. Terms of Joinder Agreement. The following words and phrases relate to Executive’s participation in the Plan:

(i) The “Executive” is Michael A. Bauer.

(ii) The “Employer” is QCR Holdings, Inc. and Quad City Bank and Trust Company, and any successors thereto.

(iii) The “Original Effective Date” is February 1, 2004.

(iv) The “Benefit Age” is age 60.

(v) The “Survivor Benefit” covered by insurance is $117,000.00 annually for 15 years.

Section 2. Benefits.

(i) Notwithstanding any provision in the Plan to the contrary, if the Executive is continually employed by the Employer from the Effective Date until the date that he attains the Benefit Age, the Executive shall begin receiving his Supplemental Retirement Benefit within 30 days following the Executive’s attainment of the Benefit Age, regardless of whether the Executive remains employed by the Employer subsequent to his attainment of the Benefit Age.

(ii) Notwithstanding any provision in the Plan to the contrary, the Executive’s Supplemental Retirement Benefit upon attainment of the Benefit Age shall be an annual amount (before taking into account any applicable federal and state tax withholding) equal to $117,000. Such annual amount shall be paid to the Executive for a period of 15 years in the form of substantially equal monthly installment payments. The Supplemental Retirement Benefit shall be paid to the Executive in lieu of any other the Supplemental Retirement Benefit that would otherwise be paid to the Executive under the terms of the Plan.

(iii) If the Executive’s employment with the Employer terminates for any reason prior to the Executive’s attainment of the Benefit Age, his benefit under the Plan and if applicable, the benefit of his Beneficiaries under the Plan, shall be determined in accordance with the terms of the Plan, including the benefit formula provided therein.

Section 3. Participation. Executive understands that this Joinder Agreement must be executed and provided to the Administrator in order for Executive to continue his participation in the Plan and that by executing this Joinder Agreement Executive acknowledges and agrees to the amendment and restatement of the Plan as provided therein.

Section 4. Miscellaneous. Executive understands that he is entitled to review or obtain a copy of the Joinder Agreement and the Plan, at any time, and may do so by contacting the Employer.

Section 5. Effective Date. This Joinder Agreement shall become effective upon its execution by both the Executive and a duly authorized officer of the Employer.

IN WITNESS WHEREOF, the Employer has caused this Joinder Agreement to be executed by its duly authorized officer, and Executive has signed this Agreement as of the dates set forth below.

/s/ Michael A. Bauer		December 31, 2008
Michael A. Bauer		Date
/s/ James J. Brownson		December 31, 2008
QCR Holdings, Inc.		Date
By:	James J. Brownson
	Its: Chairman
/s/ Shellee R. Showalter		December 31, 2008
Quad City Bank and Trust Company		Date
By:	Shellee R. Showalter
	Its: Secretary

EX-10.32

Exhibit 10.32

QCR HOLDINGS, INC.

2005 DEFERRED INCOME PLAN
(As amended and Restated October 23, 2008)

QCR Holdings, Inc.

2005 Deferred Income Plan

Section 1. Purpose

The purpose of the QCR HOLDINGS, INC. 2005 DEFERRED INCOME PLAN (“Plan”) is to enable directors and selected key officers of QCR HOLDINGS, INC. (“Company”), and any affiliates, to elect to defer all or a portion of the fees and cash compensation payable on account of service as a director or employee. The Plan is intended as a means of maximizing the effectiveness and flexibility of the compensation arrangements to directors and a select group of management or highly compensated employees of the Company and its affiliates, and as an aid in attracting and retaining individuals of outstanding abilities and specialized skills for service. All obligations under the Plan will be solely borne by the Company or the affiliate that employs the participating employee or for which the director performs services (in each case, the “Employer”). It is the intent of the Company and the Employers that this Plan comply in its entirety with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder ( collectively referred to herein as “Section 409A”).

Section 2. Effective Date

The Plan is effective as of October 23, 2008; provided, however, that if any changes pursuant to the amendment and restatement of this Plan constitute a change in the form or timing of distributions under Code Section 409A, such changes shall be effective as of January 1, 2009, in accordance with the transition relief provided under IRS Notice 2007-86.

Section 3. Plan Administration

The Plan shall be administered by the Executive Committee (“Committee”), or other committee as may be designated by the Board of Directors of the Company (“Board”) from time to time. The Committee shall have sole authority to select the individuals, from among those eligible, who may participate under the Plan and to establish all other participation requirements. The Committee is authorized, subject to Board approval, to interpret the Plan and may from time to time adopt such rules, regulations, forms and agreements, not inconsistent with the provisions of the Plan, as it may deem advisable to carry out the Plan. All decisions made by the Committee in administering the Plan shall be final and binding on the applicable Participants, their heirs and personal representatives.

Section 4. Eligibility

Any director or key officer of an Employer may be designated by the Board to participate in the Plan; provided, however, that officers eligible for designation shall be limited to a select group of management or highly compensated employees within the meaning of Section 201(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Any such director or key officer shall be a “Participant” as of the date designated by the Board, and his or her status as a Participant shall continue until the date on which all payments due under the terms of the Plan have been made.

Section 5. Shares Subject to the Plan

The aggregate number of shares of common stock of the Company (“Shares”) which may be distributed to directors and employees under the Plan shall be One Hundred Thousand (100,000) Shares. Any Shares that remain unissued at the termination of the Plan shall cease to be subject to the Plan, but until termination of the Plan, the Company shall at all times make available sufficient Shares to meet the requirements of the Plan. The aggregate number of Shares which may be distributed under the Plan shall be automatically adjusted to reflect a change in capitalization of the Company, such as a stock dividend or stock split, unless the Board determines in its sole discretion that, based on the facts and circumstances, a formulaic adjustment is not appropriate, and that a differing adjustment, or no adjustment, is more equitable.

Section 6. Election to Defer Income

(a) In General. Each Participant shall be entitled to make an irrevocable election (“Election”) to defer receipt of all or a portion of the fees or compensation otherwise payable to him or her in cash (“Income”). Income with respect to which an Election has been made (and shall not have been revoked) shall be referred to hereinafter as “Deferred Income.”

(b) Timing of Elections. An Election to defer Income under the Plan must be properly filed with the Company not later than the following:

(i)	the last business day of the tax year preceding the year in which the Income is earned, or such earlier time as established by the Committee;
(ii)	thirty (30) days after first becoming eligible to participate in the Plan; provided such Income relates to services performed after the date of the Election; or
(iii)	six (6) months prior to the end of an applicable performance period; provided such Election is with respect to incentive compensation which qualifies as “bonus compensation” as defined under Section 409A.

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All such Elections shall continue in effect until the Participant delivers to the Board a written revocation or modification of such Election pursuant to paragraph (d) below.

(c) Manner of Election. Elections to defer receipt of Income shall be made in writing in accordance with such rules and procedures as the Committee may prescribe; provided, however, that each such Election to defer shall include:

(i) the amount to be deferred, expressed either as a fixed dollar amount or a percentage of Income;

(ii) the date on which the Deferred Income payment(s) shall be paid or commence; and

(iii) the number of annual installments for the payment of Deferred Income (maximum ten (10)).

(d) Changes to Elections. Modifications to existing Elections which change the timing or method of payment shall be subject to the following:

(i) A revised Election must be made not later than twelve (12) months prior to the scheduled payment date reflected in the most recent Election; and

(ii) To the extent required under Code Section 409A, the revised payment date must be not sooner than the five (5) year anniversary of the previously scheduled payment date.

(iii) Notwithstanding the foregoing, in a manner that is consistent with Section 409A, the Employer may solicit special transition rule Elections (“Special Election”) from Participants to change the method and/or timing of distributions of all amounts subject to Section 409A under the Plan, provided such Special Elections are solicited and properly made before December 31, 2008. In the event the Employer elects to solicit Special Elections under this Section, the failure by a Participant to submit a complete and timely Special Election will result in the continued application of the most recently submitted Election.

Section 7. Record and Crediting of Deferred Amounts

(a) Deferred Income. The Employer shall credit the amount of any Deferred Income to a memorandum account for the benefit of the Participant (“Deferred Income Account”) no later than the last day of the calendar quarter in which such Income would otherwise have been paid to the Participant.

(b) Investment Direction. The Committee will allow a Participant to direct the investment of his or her Deferred Income Account in accordance with such rules and procedures as the Committee may prescribe, in its sole discretion, which may include a single investment selection, including Shares of the Company’s common stock. The Company will be relieved of all investment responsibility and liability for such investment direction. A direction to purchase Shares may not be made within six (6) months of a direction to sell Shares, and a direction to sell Shares may not be made within six (6) months of a direction to purchase Shares, under the Plan or any other plan or program maintained by the Company.

(c) Value and Statement of Account. The Committee shall provide each Participant with a statement of the value of his or her Deferred Income Account, including the amount of Deferred Income and income or loss thereon, determined as of each December 31 (the “Valuation Date”).

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Section 8. Payment of Deferred Account

(a) In General. No withdrawals or payment shall be made from the Participant’s Deferred Income Account except as provided in this Section 8.

(b) Payment Event. Unless otherwise provided in the Election, the value of a Participant’s Deferred Income Account shall be payable in a single payment. A “Payment Event” shall be the date specified in the Participant’s Election, which may be any one of the following:

(i) the date of the Participant’s separation from service (as defined herein) with the Company or related company (six (6) months from such date if the Participant is a “Specified Employee” as defined in subsection (g) below);

(ii) the date the Participant attains an age specified in the Election; or

(iii) the first or later to occur of either of such dates, as may be specified in the Election.

“Separation from Service” means a Participant’s “separation from service” as determined under Treas. Reg. Section 1.409A-1(h).

(c) Manner of Payment.

(i) If a Participant elects a single installment, the value of Participant’s entire Deferred Income Account as of the Valuation Date preceding payment shall be paid to him or her in one lump sum.

(ii) If a Participant elects two (2) or more installment payments, the amount of an installment payment shall be a fraction of the value of the Participant’s Deferred Income Account on the Valuation Date preceding such installment payment date, the numerator of which is one (1) and the denominator which is the total number of installments elected minus the number of installments previously paid.

(d) Hardship Distributions. The Committee, in its sole discretion, and whether or not a Payment Event shall have occurred, may accelerate payment of amounts credited to a Participant’s Deferred Income Account if requested to do so and if the requirements of this paragraph (d) are met. Such acceleration may occur only in the event of an unforeseeable financial emergency and the amount of any distribution is limited to the amount deemed reasonably necessary to satisfy such unforeseeable financial emergency. For purposes of this paragraph (d), an “Unforeseeable Financial Emergency” is an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the participant resulting from (i) a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee. In the event the Committee authorizes a payment due to an Unforeseeable Financial Emergency, any deferral Election in place for that Plan Year shall be void.

5

(e) Death of Participant. Unless otherwise provided in an Election, if a Participant dies at any time prior to complete distribution of all amounts payable to him or her under the provisions of the Plan, the unpaid balance of the Participant’s Deferred Income Account shall be paid to the Participant’s beneficiary or beneficiaries in a lump sum.

(f) Payment in the Event of Income Inclusion under Section 409A. If any portion of a Participant’s Deferred Income Account under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to meet the requirements of Section 409A, the Participant may petition the Employer for a distribution of that portion of his Deferred Income Account balance that is required to be included in his income. Upon the grant of such a petition, which grant shall not be unreasonably withhold, the Employer shall distribute to the Participant immediately available funds in an amount equal to the portion of his Deferred Income Account balance required to be included in income as a result of the failure of the Plan to meet the requirements of Section 409A, which amount shall not exceed the Participant’s unpaid vested Deferred Income Account balance under the Plan. If the petition is granted, such distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the Participant’s benefits to be paid under this Plan.

(g) Definition of Specified Employee. A “Specified Employee” means any Participant who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Committee based upon the 12-month period ending on each December 31^st (such 12-month period is referred to below as the “identification period”). All Participants who are determined to be key employees under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the 12-month period that begins on the April 1^st following the close of such identification period. For purposes of determining whether an individual is a key employee under Code Section 416(i), “compensation” shall mean [such individual’s W-2 compensation (1099 if Director) as reported by the Employer for a particular calendar year.]

Section 9. De Minimus Payment

Notwithstanding any provision of the plan or any Election to the contrary, is a Participant’s Deferred Income Account has a balance, along with any other nonqualified deferred compensation that may be aggregated with the Plan pursuant to Section 409A, at the time of his or her Separation of Service, that is not greater than the applicable dollar limit under Code Section 402(g)(1)(B) ($15,500 for plan year 2008), the Participant’s balance in his or her Deferred Income Account, and all other plans aggregated pursuant to Section 409A, shall be distributed in a single lump sum. This Section 9 shall be applied in accordance with the Plan aggregation rules of Section 409A and such Deferred Income Account balance shall be paid to the Participant in a lump sum payment on or before the later of: (i) December 31^st of the calendar year in which the Participant’s Separation of Service occurs; or (ii) the 15^th day of the third month following the Participant’s Separation of Service. Upon the date of payment pursuant to this Section 9, Participant shall have no further interest under the Plan or any similar deferred compensation arrangements, as defined under Section 409A with the Company or any Employer.

6

Section 10. Designation of Beneficiary

Participants shall designate in writing, in accordance with such rules and procedures as the Committee may prescribe, the beneficiary or beneficiaries who are to receive the Participant’s Deferred Income Account in the event of the Participant’s death.

Section 11. Lost Beneficiary

(a) All Participants and beneficiaries shall have the obligation to keep the Administrator informed of their current address until such time as all benefits due have been paid.

(b) If a Participant or beneficiary cannot be located by the Administrator exercising due diligence, then, in its sole discretion, the Administrator may presume that the Participant or beneficiary is deceased for purposes of the Plan and all unpaid amounts (net of due diligence expenses) owed to the Participant or beneficiary shall be paid accordingly or, if a beneficiary cannot be so located, then such amounts shall be paid to the Participants’ or the beneficiary’s estate, as applicable. Any such presumption of death shall be final, conclusive and binding on all parties. Notwithstanding the foregoing, if any such beneficiary is located within five (5) years from the date of any such forfeiture, such beneficiaries shall be entitled to receive the amount previously forfeited.

Section 12. Facility of Payment

If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his property, the Employer may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Employer may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Employer from all liability with respect to such benefit.

Section 13. Unsecured Obligations

The obligation of an Employer to make payments under the Plan shall be a general obligation of that entity only, and such payments shall be made from general assets and property of such entity. The Participant’s relationship to the Employer under the Plan shall be only that of a general unsecured creditor and neither this Plan nor any agreement entered into hereunder or action taken pursuant hereto shall create or be construed to create a trust or fiduciary relationship of any kind. The Employer may establish an irrevocable grantor trust for purposes of holding and investing the Deferred Income Account balances but such establishment shall not create any rights in or against any amount so held, except that the trustee of such trust may vote any Shares thereunder in accordance with the direction of the Participants.

7

Section 14. Status of Plan

The Plan is intended to be a plan that is: (a) not qualified within the meaning of Code Section 401(a); (b) “unfunded and is maintained by the Company or Employer primarily for the purpose of providing deferred compensation for a select group of management and highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1); and (c) compliant in all respects with Section 409A. The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

Section 15. No Effect on Employment Rights

Nothing contained herein will confer upon the Participant the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Participant without regard to the existence of the Plan.

Section 16. Amendment and Termination

(a) To the maximum extent permissible under Section 409A, the Board may amend, suspend or terminate the Plan or any portion thereof at any time; provided, however, that no such amendment, suspension or termination shall impair the rights of any Participant in such Participant’s Deferred Income Account under the Plan, without such Participant’s consent.

(b) Notwithstanding the foregoing, the Board shall retain the right to amend the Plan or any portion thereof at any time, or from time to time, without the consent of the Participants, to the extent deemed necessary by the Board, in its sole discretion, in order for the Plan and Deferred Income to be compliant with the requirements of Code Section 409A.

Section 17. Effect of Transfer

(a) In the event of a Change in Control of the Company, the entire unpaid balance of each Deferred Income Account shall be paid in a single lump sum to the Participant as of the effective date thereof.

(b) For purposes of this Plan, the term Change in Control shall be as defined in the Company’s Executive Deferred Compensation Plan, as may be amended from time to time.

(c) In the event of a corporate transaction in which Shares are converted into another security or into cash, where such event does not constitute a Change in Control, the Committee may substitute a dollar-based equivalent for the Deferred Income Account and distribute it in cash as provided herein.

Section 18. Non-Assignability

No right to receive payments under the provisions of this Plan shall be transferable or assignable by a Participant, except by will or the laws of descent and distribution or by gifting for the benefit of descendants in estate planning situations, and during his or her lifetime payment may only be received by the Participant or his or her legal representative or guardian.

8

Section 19. Delivery and Registration of Stock

The Company’s obligation to deliver Shares shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the individual to whom such Shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933 (“Act”) or any other federal, state or local securities legislation or regulation. It may be provided that any representation requirement shall become inoperative upon a registration of the Shares or other action eliminating the necessity of such representation under securities legislation. The Company shall not be required to deliver any Shares under the Plan prior to (i) the admission of such Shares to listing on any stock exchange on which Shares may then be listed, and (ii) the completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation, as the Committee shall determine to be necessary or advisable.

This Plan is intended to comply with Rule 16b-3 under the Act. Any provision of the Plan which is inconsistent with said rule shall, to the extent of such inconsistency, be inoperative and shall not affect the validity of the remaining provisions of the Plan.

Section 20. Binding Provisions

All of the provisions of this Plan shall be binding upon all persons who shall be entitled to any benefits hereunder and their heirs and personal representatives.

Section 21. Severability and Interpretation of Provisions

In the event that any of the provisions of this Plan or portion hereof, are held to be inoperative or invalid by any court of competent jurisdiction, or in the event that any legislation adopted by any governmental body having jurisdiction over the Employer would be retroactively applied to invalidate this Plan or any provision hereof or cause the benefits hereunder to be taxable, then: (1) insofar as is reasonable, effect will be given to the intent manifested in the provisions held invalid or inoperative, and (2) the validity and enforceability of the remaining provisions will not be affected thereby. In the event that the intent of any provisions shall need to be construed in a manner to avoid taxability, such construction shall be made by the Committee in a manner that would manifest to the maximum extent possible the original meaning of such provisions.

Section 22. Claims Procedure

(a) Presentation of Claim. Any Participant or beneficiary of a deceased Participant (such Participant or beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred-eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

9

(b) Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, but no later than ninety (90) days, unless, within such time, the Employer notifies the Claimant in writing that an extension is required pursuant to Labor Regulation 2560.503-1 (up to ninety (90) days). Once a decision is made, the Committee shall notify the Claimant in writing:

(i) That the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

(ii) That the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

(A) the specific reason(s) for the denial of the claim, or any part of it;

(B) the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

(C) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(D) an explanation of the claim review procedure set forth in subsection (c) below, including Claimants right to bring a civil action under Section 502(a) of ERISA as described in subsection (e).

(c) Review of a Denied Claim. Within sixty (60) days after receiving a notice from the Employer that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s’ duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Therefore, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(i) may review pertinent documents;

(ii) may submit written comments or other documents; and/or

(iii) may request a hearing, which the Committee, in its sole discretion, may grant.

10

(d) Decision on Review. The Committee shall render its decision on review promptly, and not later than sixty (60) days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within one hundred-twenty (120) days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(i) specific reasons for the decision;

(ii) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

(iii) such other matters as the Committee deems relevant.

(e) Legal Action. A Claimant’s compliance with the foregoing provisions of this Section 20 is a mandatory prerequisite to a Claimant’s right to commence any legal action brought pursuant to Section 502(a) of ERISA with respect to any claim for benefits under this Plan.

(f) Arbitration. If Claimant continues to dispute the benefit denial based upon completed performance of this Plan or the meaning and effect of the terms and conditions thereof, it shall be settled by arbitration administered by the AAA under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

11

Section 23. Inurement

The Plan shall be binding upon and shall inure to the benefit of the Employer, its successors and assigns, and the Participant, his successors, heirs, executors, administrators, and beneficiaries, and the Company shall require any acquirer in a Change in Control to expressly assume this Plan.

Section 24. Tax Withholding

When payments are made under the Plan, the Employer shall have the right to deduct from each payment made under the Plan, or any other compensation payable to a Participant or beneficiary, any required withholding taxes respecting such payments. Prior to the date a Participant’s Deferral Account becomes payable, the Employer may deduct from the Participant’s Deferral Account, or from other compensation payable to the Participant, any required federal employment taxes imposes under Code Sections 3101, 3121(a) and 3121(v)(2) and any taxes required under any state, local and foreign laws, in each case only to the extent such taxes are attributable to the Participant’s participation in the Plan.

Section 25. No Liability

No liability shall attach to or be incurred by any officer or director of the Company or Employer, or any Administrator under or by reason of the terms, conditions and provisions contained in this Plan, or for the acts or decisions taken or made thereunder or in connection therewith; and as a condition precedent to the establishment of this Plan or the receipt of benefits thereunder, or both, such liability, if any, is expressly waived and released by each Participant and by any and all persons claiming under or through any Participant or any other person. Such waiver and release shall be conclusively evidenced by any act or participation in or the acceptance of benefits or the making of any election under this Plan.

Section 26. Expenses

All expenses incurred in the administration of the Plan, whether incurred by the Employer or the Plan, shall be paid by the Employer or the Company.

Section 27. Insolvency

Should the Employer be considered insolvent, the Company, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan, if the Company is not the Administrator. Upon receipt of such notice, the Administrator shall cease to make any payments to Participants who were Participants or their beneficiaries and shall hold any and all assets attributable to the Employer for the benefit of the general creditors of the Employer.

12

Section 28. Interpretation

The provisions of this Plan shall be interpreted consistently with Section 409A, and to the extent inconsistent with such authority, shall be deemed to be modified to the extent necessary to make such provisions consistent with such authority. In addition, all questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Committee, in its sole discretion, whose decision shall be binding and conclusive upon all persons.

Section 29. Governing Law

This Plan shall be governed by, construed and administered in accordance with the laws of the State of Iowa without regard to the conflict of laws provisions of any jurisdiction, except to the extent preempted by the laws of the United States of America.

Section 30. Terms

Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.

Section 31. Headings

Headings and sub-headings in this Plan are inserted for reference and convenience only and shall not be deemed a part of this Plan.

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Exhibit To
QCR Holdings, Inc.
2005 Deferred Income Plan
Election Form
(For plan years beginning on or after January 1, 20___)

EMPLOYER:                                                                                                          

GENERAL INFORMATION

EMPLOYEE’S NAME
	(Last)	(First)	(M.I.)

HOME ADDRESS                                                                                                                                                                          

CITY                                                                  STATE                                            ZIP                                           

SOCIAL SECURITY NUMBER  _____-_____-_____  BIRTH DATE  _____/_____/19_____ 

INCOME DEFERRAL AGREEMENT

I understand that this Election must be returned to my Employer no later than December 15 prior to the year for which this Election is applicable. If this Election is being made due to a Participant’s initial participation commencing other than the first day of a year, this Election must be returned to your Employer no later than the thirtieth (30th) day after the Participant first becomes eligible to participate, with such Election being effective only for compensation earned after it is filed.

I understand that if this Election includes Incentive Compensation that qualifies as performance-based compensation under Code Section 409A, this Election must be filed no later than six (6) months prior to the end of the applicable performance period.

I understand that, unless otherwise provided by the Committee, the only investment under Section 7(b) of the Plan shall be the Employer’s Common Stock.

I agree that my Income earned during a plan year beginning on or after January 1, 20_____, will be reduced by the amount or percentage I have indicated below, and that these dollars will be contributed to my Deferral Account. This agreement will continue to be effective for subsequent plan years while I am employed unless I change or terminate it. I will be only an unsecured creditor of the Employer as to amounts deferred, and may lose part or all of the deferred amount if the Employer becomes insolvent. I acknowledge that I have read this entire agreement, understand it and agree to its terms.

Select one of the following:

o I elect to defer                     % or $                     of my director fees paid during the plan year.

o I elect to defer                     % or $                     of my salary paid during the plan year.

o I elect to defer                     % or $                     of my incentive compensation for the plan year.

o I decline participation.

Check if applicable:

o The above is a change from my prior elections.

I may change or revoke this election by filing a new election with the Employer in this format, but only for compensation earned in the tax year following the year in which my election is received by the Employer.

PAYMENT OF BENEFITS

o I elect to commence payment of my Deferred Income Account upon the (circle one) earlier of OR later of: choose one of the following: o Age  _____; o  _____, 20_____  (insert date); o my Separation from Service; o the earlier of my Separation from Service or attainment of age  _____; or o the later of my Separation from Service or attainment of age  _____.

o I elect to receive payment of any account balance in a series of annual installments over a period of  _____  years (insert one (1) for a lump sum or a number of years, maximum of ten (10)). The amount of each installment shall be determined in accordance with the provisions of the Plan. I understand that, if I do not affirmatively elect a number of installments, payment of my account balance shall be made in a single lump sum.

14

** Note that any change in the installment method will become subject to the following:

(i)	The revised election must be filed not less than 12 months prior to a scheduled payment date,
(ii)	The revised election can not take effect until 12 months after it is filed with the plan administrator, and
(iii)	The first scheduled payment must be deferred for at least 5 years from the originally scheduled payment date.

DESIGNATION OF BENEFICIARIES

I designate the following as the beneficiary of any and all benefits under the terms of the QCR Holdings, Inc. Deferred Income Plan which may be payable at the time my death:

[Add additional sheets as necessary]

Primary
	Name				Percentage	%	Relation
		(Last)	(First)	(M.I.)
	Name				Percentage	%	Relation
		(Last)	(First)	(M.I.)

Contingent

Name				Percentage	%	Relation
	(Last)	(First)	(M.I.)
Name				Percentage	%	Relation
	(Last)	(First)	(M.I.)

Note: To name a trust as beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.

In the event of my death during my employment, my benefits are to be paid to my beneficiaries as follows:

o in a lump sum

o in  _____  monthly installments (maximum ten (10))

I understand: (i) that I may change these beneficiary designations by filing a new written designation with the Employer; (ii) that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved; and (iii) that any change in the form of payment (lump sum or installment payments) upon my death during employment will not be effective until the twelve-month anniversary of the date a revised election form is accepted by the Administrator.

SIGNATURES

Participant

		Date
Employer
By:
	Its:	Date

15

EX-21.1

Exhibit 21.1 – Subsidiaries of the Registrant

Subsidiaries	State of Incorporation/Formation
Quad City Bank and Trust Company	Iowa
Cedar Rapids Bank and Trust Company	Iowa
Rockford Bank and Trust Company	Illinois
Quad City Bancard, Inc.	Delaware
m2 Lease Funds, LLC	Wisconsin
QCR Holdings Statutory Trust II	Connecticut
QCR Holdings Statutory Trust III	Connecticut
QCR Holdings Statutory Trust IV	Delaware
QCR Holdings Statutory Trust V	Delaware
Velie Plantation Holding Company, LLC	Iowa

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

McGladrey & Pullen
Certified Public Accountants

We hereby consent to the incorporation by reference in the Registration Statements on form S-8 pertaining to the QCR Holdings, Inc. 401(k) / Profit Sharing Plan (File No.33-77420), QCR Holdings, Inc. 2005 Deferred Income Plan (File No. 33-127466), and QCR Holdings, Inc. 2008 Equity Incentive Plan (File No. 33-151042) of our reports dated March 6, 2009 relating to our audits of QCR Holdings, Inc.’s December 31, 2008 consolidated financial statements and internal control over financial reporting and to the reference to our Firm under the caption “experts” contained therein.

/s/ McGladrey & Pullen LLP

Davenport, Iowa
March 6, 2009

McGladrey & Pullen, LLP is a member firm of RSM International – an affiliation of separate and independent legal entities.

EX-31.1

Exhibit 31.1

I, Douglas M. Hultquist, certify that:

1. I have reviewed this annual report on Form 10-K 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 registrant’s board of directors (or persons performing the equivalent function):

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

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

Date: March 6, 2009	/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 annual report on Form 10-K 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 registrant’s board of directors (or persons performing the equivalent function):

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

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

Date: March 6, 2009	/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 Annual Report of QCR Holdings, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2008 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), as applicable, of the Securities Exchange Act of 1934; and

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

/s/ Douglas M. Hultquist

Douglas M. Hultquist
Chief Executive Officer
March 6, 2009

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 Annual Report of QCR Holdings, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2008 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), as applicable, of the Securities Exchange Act of 1934; and

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

/s/ Todd A. Gipple

Todd A. Gipple
Chief Operating Officer
Chief Financial Officer
March 6, 2009