QCR (QCRH) 8-K QCR Holdings, Inc. Completes Sale of the Operations of Rockford Bank & Trust

Exhibit 99.2

QCR HOLDINGS, INC.

UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma consolidated combined financial information reflects adjustments to the historical financial results of QCR Holdings, Inc. (the “Company”) as reported under U.S. Generally Accepted Accounting Principles (“GAAP”) in connection with the sale of substantially all of the assets and the transfer of substantially all of the deposits and certain other liabilities of the Company’s wholly-owned subsidiary, Rockford Bank & Trust Company (“RB&T”) to Illinois Bank & Trust (“IB&T”), a wholly-owned subsidiary of Heartland Financial USA, Inc.  The all-cash purchase and assumption transaction (the “transaction”), announced in August 2019, closed as of the close of business on November 30, 2019.

The unaudited pro forma consolidated combined balance sheet as of September 30, 2019 was prepared with the assumption that the transaction had closed and was fully completed as of September 30, 2019.

The unaudited pro forma consolidated combined income statement for the nine months ended September 30, 2019 was prepared with the assumption that the transaction had closed and was fully completed as of January 1, 2019.  This does not include the gain on sale and the related one-time costs related to disposition.

The unaudited pro forma consolidated combined income statement for the year ended December 31, 2018 was prepared with the assumption that the transaction had closed and was fully completed as of January 1, 2018.  This also does not include the gain on sale and the related one-time costs related to disposition.

The unaudited pro forma consolidated combined financial information does not purport to be indicative of the results of operations or the financial condition which would have actually resulted if the transaction had been completed on the dates indicated and does not purport to indicate the results of future operations. Assumptions and estimates underlying the pro forma consolidated combined financial information are described in the accompanying footnotes.

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Balance Sheet

				RB&T Pro Forma
	As of September 30, 2019			RB&T at September 30, 2019		Participation Loans / Investments *		Pro Forma **		Adjustments for Sale ***		Pro Forma
ASSETS
Cash and due from banks	$	102,701,879		11,031,151		—		11,031,151		—		$	91,670,728
Federal funds sold	9,300,000			—		—		—		—		9,300,000
Interest-bearing deposits at financial institutions	190,377,549			2,414,900		90,295,048		92,709,948		59,032,000		156,699,601
	—
Securities held to maturity, at amortized cost	386,583,744			43,106,805		(39,863,805	)	3,243,000		—		383,340,744
Securities available for sale, at fair value	234,833,489			22,901,737		—		22,901,737		—		211,931,751
Total securities	621,417,232			66,008,542		(39,863,805	)	26,144,737		—		595,272,495
Loans receivable held for sale	10,540,738			1,650,400		—		1,650,400		—		8,890,338
Loans/leases receivable held for investment	3,968,230,101			417,281,473		(50,431,243	)	366,850,230		—		3,601,379,871
Gross loans/leases receivable	3,978,770,839			418,931,873		(50,431,243	)	368,500,630		—		3,610,270,209
Less allowance for estimated losses on loans/leases	(42,605,570		)	(6,490,001	)	—		(6,490,001	)	—		(36,115,568		)
Net loans/leases receivable	3,936,165,269			412,441,872		(50,431,243	)	362,010,629		—		3,574,154,640
Bank-owned life insurance	69,223,617			10,856,275		—		10,856,275		—		58,367,342
Premises and equipment, net	80,238,693			6,400,970		—		6,400,970		—		73,837,723
Restricted investment securities	26,364,575			1,802,400		—		1,802,400		—		24,562,175
Other real estate owned, net	6,381,359			2,315,083		—		2,315,083		—		4,066,276
Goodwill	77,748,298			—		—		—		—		77,748,298
Intangibles	15,529,058			—		—		—		—		15,529,058
Other assets	156,934,091			5,913,267		—		5,913,267		—		151,020,824
Total assets	$	5,292,381,620		519,184,460		—		519,184,460		59,032,000		$	4,832,229,160
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	852,593,271		70,360,778		—		70,360,778		—		$	782,232,493
Interest-bearing	3,401,193,430			381,184,764		—		381,184,764		—		3,020,008,666
Total deposits	4,253,786,701			451,545,542		—		451,545,542		—		3,802,241,159
Short-term borrowings	19,683,475			1,157,067		—		1,157,067		—		18,526,408
Federal Home Loan Bank advances	210,800,000			15,000,000		—		15,000,000		—		195,800,000
Subordinated debentures	68,333,753			—		—		—		—		68,333,753
Junior subordinated debentures	37,796,751			—		—		—		—		37,796,751
Other liabilities	182,238,233			5,299,443		—		5,299,443		4,712,398		181,651,188
Total liabilities	4,772,638,913			473,002,052		—		473,002,052		4,712,398		4,304,349,259
STOCKHOLDERS’ EQUITY
Preferred stock, $1 par value; shares authorized 250,000	—					—		—		—		—
Common stock, $1 par value; shares authorized 20,000,000	15,790,462			4,950,000		—		4,950,000		4,950,000		15,790,462
Additional paid-in capital	273,474,836			32,628,679		—		32,628,679		32,628,679		273,474,836
Retained earnings	230,891,852			8,918,536		—		8,918,536		17,055,730		239,029,046
Accumulated other comprehensive income (loss)	3,831,783			67,850		—		67,850		67,850		3,831,783
Accumulated other comprehensive income (loss) - Derivatives	(4,246,226		)	(382,657	)	—		(382,657	)	(382,657	)	(4,246,226		)
Total stockholders’ equity	519,742,707			46,182,408		—		46,182,408		54,319,602		527,879,901
Total liabilities and stockholders’ equity	$	5,292,381,620		519,184,460		—		519,184,460		59,032,000		$	4,832,229,160

* Includes affiliate participation loans and investments, net, re-allocated to the originating charter in the month prior to closing.  The loans and investments are as of September 30, 2019.

** Includes estimates for retained assets of $14,727,000, and retained liabilities of $2,573,000, all of which will be liquidated or satisfied post-closing.

*** Includes preliminary entries for the sale of RB&T detailed as follows:

Cash Proceeds from Buyer	$	46,878,000	Includes Purchase Price Premium of $12.5 million
Cash from Liquidiation of Net Retained Balance Sheet	12,154,000
Total Cash Proceeds	59,032,000
Equity Investment in RB&T	46,182,408
Pre-Tax Gain on Sale	$	12,849,592

In addition, the Company is recording an estimated gain on sale of $12,849,592 which is offset by an estimate of $2,000,000 of disposition expenses.  The net is an estimated pre-tax net gain of $10,849,592 and using a tax rate of 25% (which is 21% for Federal and 4% for State), the net impact to equity is estimated at $8,137,000.

Lastly, the offset is $4,712,398 to other liabilties which consists of accruals for various disposition costs and the taxes payable on the net gain on sale.

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Income Statement

	For the nine months ended September 30, 2019
	Consolidated			RB&T Only	Participation Loans / Investments *		Pro Forma
Interest and dividend income:
Loans/leases, including fees	$	143,488,413		13,948,038	1,796,613		$	131,336,988
Securities:
Taxable	5,025,431			577,366	—		4,448,065
Nontaxable	10,461,256			973,825	1,046,425		10,533,856
Interest-bearing deposits at financial institutions	3,041,816			116,147	(1,523,729	)	1,401,940
Restricted investment securities	891,165			86,785	—		804,380
Federal funds sold	191,317			71,596	—		119,721
Total interest and dividend income	163,099,398			15,773,757	1,319,309		148,644,950
Interest expense:
Deposits	39,696,963			4,882,825	—		34,814,138
Short-term borrowings	275,608			25,537	—		250,071
Federal Home Loan Bank advances	2,684,888			632,874	—		2,052,014
Other borrowings	512,367			—	—		512,367
Subordindated debt	2,560,701			—	—		2,560,701
Junior subordinated debentures	1,728,959			—	—		1,728,959
Total interest expense	47,459,486			5,541,236	—		41,918,250
Net interest income	115,639,912			10,232,521	1,319,309		106,726,700
Provision for loan/lease losses	6,086,972			559,000	—		5,527,972
Net interest income after provision for loan/lease losses	109,552,940			9,673,521	1,319,309		101,198,728
Noninterest income:
Trust department fees	7,193,596			729,370	—		6,464,226
Investment advisory and management fees	5,405,734			432,050	—		4,973,684
Deposit service fees	5,025,175			534,068	—		4,491,107
Gains on sales of residential real estate loans	1,747,712			82,829	—		1,664,883
Gains on sales government guaranteed portions of loans	589,366			—	—		589,366
Swap fee income	20,885,993			—	—		20,885,993
Security losses, net	(55,693		)	—	—		(55,693		)
Earnings on bank-owned life insurance	1,440,491			192,519	—		1,247,972
Debit card fees	2,591,291			208,683	—		2,382,608
Correspondent banking fees	578,167			—	—		578,167
Other	3,561,787			252,535	—		3,309,252
Total noninterest income	48,963,619			2,432,054	—		46,531,565
Noninterest expense:
Salaries and employee benefits	67,842,590			5,973,251	—		61,869,339
Occupancy and equipment expense	11,086,782			1,078,687	—		10,008,095
Professional and data processing fees	9,811,003			1,653,100	—		8,157,903
Acquisition costs	—			—	—		—
Post-acquisition compensation, transition and integration costs	1,726,558			—	—		1,726,558
FDIC and other insurance, and regulatory fees	2,431,834			279,696	—		2,152,138
Loan/lease expense	747,689			108,589	—		639,100
Net cost of operations of other real estate	3,557,490			327,147	—		3,230,343
Advertising and marketing	2,877,950			339,284	—		2,538,666
Postage and communication	1,250,397			67,040	—		1,183,357
Stationery and supplies	817,533			93,986	—		723,547
Bank service charges	1,493,792			71,649	—		1,422,143
Loss on debt extinguishment, net	148,149			—	—		148,149
Correspondent banking expense	619,252			—	—		619,252
CDI Amortization	1,706,192			—	—		1,706,192
Other	2,822,704			306,859	—		2,515,845
Total noninterest expense	108,939,915			10,299,288	—		98,640,627
Net income before income taxes	49,576,644			1,806,287	1,319,309		49,089,666
Federal and state income tax expense	8,059,400			129,692	110,078		8,039,786
Net income	$	41,517,244		1,676,595	1,209,231		$	41,049,880
Diluted earnings per common share	$	2.60					$	2.57
Weighted average common and common equivalent shares outstanding	15,946,020						15,976,742

* Includes affiliate particpation loans and investments, net, re-allocated to the originating charter in the month prior to closing.  The offset is to interest-bearing deposits at banks as the Company would fund the net earning assets with excess cash.  Following are the details:

	Amount		Rate **		Net Interest Income		Adjusted for 9 Months
Loans	50,431,243		4.75	%	2,395,484		1,796,613
Federal Tax Exempt Municipal Bonds	39,863,805		3.50	%	1,395,233		1,046,425
Interest-Bearing Deposits at Banks	(90,295,048	)	2.25	%	(2,031,639	)	(1,523,729	)

**  The rate is estimated based on weighted average interest rate of the loans and investments as of September 30, 2019.  For the interest rate on the interest-bearing deposits at banks, the Company used an estimated rate for 2019 based on Fed Funds for the majority of the year.

NOTE:  Excludes the pre-tax gain on sale estimated at $12,849,592 and the related one-time disposition costs estimated at $2,000,000.

QCR Holdings, Inc. and Subsidiaries

Unaudited Pro Forma Consolidated Combined Income Statement

	For the year ended December 31, 2018
	Consolidated		RB&T Only		Participation Loans / Investments *		Pro Forma
Interest and dividend income:
Loans/leases, including fees	$	160,160,173	16,996,007		2,395,484		$	145,559,650
Securities:
Taxable	6,353,413		681,693		—		5,671,720
Nontaxable	13,668,283		1,227,849		1,395,233		13,835,667
Interest-bearing deposits at financial institutions	1,266,530		14,600		(2,257,376	)	(1,005,446		)
Restricted investment securities	1,092,807		149,028		—		943,779
Federal funds sold	338,036		64,764		—		273,272
Total interest and dividend income	182,879,242		19,133,941		1,533,341		165,278,642
Interest expense:
Deposits	30,674,621		4,285,571		—		26,389,050
Short-term borrowings	271,243		22,271		—		248,972
Federal Home Loan Bank advances	4,192,510		611,883		—		3,580,627
Other borrowings	3,346,225		575,247		—		2,770,978
Junior subordinated debentures	1,999,058		—		—		1,999,058
Total interest expense	40,483,657		5,494,972		—		34,988,685
Net interest income	142,395,585		13,638,969		1,533,341		130,289,957
Provision for loan/lease losses	12,658,449		4,618,833		—		8,039,616
Net interest income after provision for loan/lease losses	129,737,136		9,020,136		1,533,341		122,250,341
Noninterest income:
Trust department fees	8,707,406		771,334		—		7,936,072
Investment advisory and management fees	4,725,557		649,676		—		4,075,881
Deposit service fees	6,420,237		708,883		—		5,711,354
Gains on sales of residential real estate loans	900,744		56,044		—		844,700
Gains on sales government guaranteed portions of loans	404,852		—		—		404,852
Swap fee income	10,787,234		176,640		—		10,610,594
Earnings on bank-owned life insurance	1,631,749		260,513		—		1,371,236
Debit card fees	3,262,645		228,936		—		3,033,709
Correspondent banking fees	851,514		—		—		851,514
Participation service fees on commercial loan participations	1,229,333		258,844		—		970,489
Fee income from early termination of leases	446,506		—		—		446,506
Credit card issuing fees	800,499		—		—		800,499
Other	1,372,818		24,370		—		1,348,448
Total noninterest income	41,541,094		3,135,240		—		38,405,854
Noninterest expense:
Salaries and employee benefits	68,994,218		6,410,037		—		62,584,181
Occupancy and equipment expense	12,883,632		1,422,474		—		11,461,158
Professional and data processing fees	11,452,084		1,585,920		—		9,866,164
Acquisition costs	1,795,119		140,796		—		1,654,323
Post-acquisition compensation, transition and integration costs	2,086,386		—		—		2,086,386
FDIC and other insurance, and regulatory fees	3,594,480		531,374		—		3,063,106
Loan/lease expense	1,543,343		89,824		—		1,453,519
Net cost of operations of other real estate	2,488,730		471,712		—		2,017,018
Advertising and marketing	3,551,822		473,824		—		3,077,998
Postage and communication	1,585,282		110,099		—		1,475,183
Stationery and supplies	1,069,744		107,595		—		962,149
Bank service charges	1,837,626		152,648		—		1,684,978
Correspondent banking expense	820,905		—		—		820,905
CDI Amortization	1,692,431		—		—		1,692,431
Other	3,747,617		312,695		—		3,434,922
Total noninterest expense	119,143,419		11,808,998		—		107,334,421
Net income before income taxes	52,134,811		346,378		1,533,341		53,321,774
Federal and state income tax expense	9,015,112		(359,777	)	90,336		9,465,225
Net income	$	43,119,699	706,155		1,443,005		$	43,856,549
Diluted earnings per common share	$	2.86					$	2.91
Weighted average common and common equivalent shares outstanding	15,064,730						15,064,730

* Includes affiliate particpation loans and federal tax exempt municipal investments, net, re-allocated to the originating charter in the month prior to closing.  The offset is to interest-bearing deposits at banks as the Company would fund the net earning assets with excess cash.  Following are the details:

	Amount		Rate **		Net Interest  Income
Loans	50,431,243		4.75	%	2,395,484
Tax Exempt Municipal Bonds	39,863,805		3.50	%	1,395,233
Interest-Bearing Deposits at Banks	(90,295,048	)	2.50	%	(2,257,376	)

**  The rate is estimated based on weighted average interest rate of the loans and investments as of September 30, 2019.  For the interest rate on the interest-bearing deposits at banks, the Company used an estimated rate for 2018 based on Fed Funds for the majority of the year.

NOTE:  Excludes the pre-tax gain on sale estimated at $12,849,592 and the related one-time disposition costs estimated at $2,000,000.