Qcr Holdings Inc S-4/A, filed Jan 28, 2022

Qcr Holdings Inc (QCRH)

S-4/A 2022-01-28

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Added on October 20, 2026

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	Large accelerated filer ☐			Accelerated filer ☒
	Non-accelerated filer ☐			Smaller reporting company ☐
				Emerging growth company ☐

	Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)			☐
	Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)			☐


Title of Each Class of Securities to be Registered	Amount to be Registered(1)		Proposed Maximum Offering Price Per Unit(2)		Proposed Maximum Aggregate Offering Price(2)			Amount of Registration Fee(3)(4)
Common Stock, $1.00 par value per share		2,077,265		N/A		$	115,968,136.40		$	10,750.25

	PAGE
QUESTIONS AND ANSWERS ABOUT THE MERGER		1
SUMMARY		7
Information about QCR and Guaranty		7
The merger and the merger agreement		8
What Guaranty stockholders will receive		8
Material U.S. federal income tax consequences of the merger		8
Guaranty’s reasons for the merger; Board recommendation to Guaranty’s stockholders		8
Interests of officers and directors of Guaranty in the merger may be different from, or in addition to, yours		9
Guaranty stockholders will have dissenters’ rights in connection with the merger		9
The merger and the performance of the combined company are subject to a number of risks		9
Stockholder approval will be required to complete the merger and approve the other proposals set forth in the notice		9
Completion of the merger is subject to regulatory approvals		10
Conditions to the merger		10
How the merger agreement may be terminated by QCR and Guaranty		11
Termination fees and expenses may be payable under some circumstances		12
Voting and support agreement		13
Accounting treatment of the merger		13
Certain differences in QCR stockholder rights and Guaranty stockholder rights		13
QCR shares will be listed on Nasdaq		13
SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION		14
UNAUDITED COMPARATIVE PER SHARE COMMON DATA		15
COMPARATIVE PER SHARE MARKET PRICE		16
RISK FACTORS		17
SPECIAL NOTES CONCERNING FORWARD-LOOKING STATEMENTS		22
INFORMATION ABOUT THE SPECIAL MEETING OF GUARANTY STOCKHOLDERS		24
Purpose		24
Record date, quorum and vote required		24
How to vote your shares		25
Shares held in “street name”		25
Revocability of proxies		25
Proxy solicitation		26
Assistance		26
THE GUARANTY PROPOSALS		27
Proposal 1 – Approval of the Merger Agreement		27
Proposal 2 – Compensation Proposal		27
Proposal 3 – Adjournment of the Special Meeting		27
THE MERGER		28
General		28
Background of the merger		28

	PAGE
Guaranty’s reasons for the merger and recommendation of the board of directors		32
Opinion of Guaranty’s Financial Advisor.		34
Prospective financial information of Guaranty		46
QCR’s reasons for the merger		47
Accounting treatment of the merger		48
Material U.S. federal income tax consequences of the merger		48
Regulatory approvals		52
Interests of certain persons in the merger		53
Restrictions on resale of QCR common stock		56
Guaranty stockholder dissenters’ rights		56
DESCRIPTION OF THE MERGER AGREEMENT		61
General		61
Closing and effective time		61
Consideration to be received in the merger		61
Treatment of Guaranty stock awards		63
Voting and support agreement		63
Election and Exchange Procedures		63
Conduct of business pending the merger		64
Certain covenants of the parties		66
No solicitation of or discussions relating to an acquisition proposal		67
Representations and warranties		68
Conditions to completion of the merger		68
Termination		70
Termination fees		71
Management of QCR and Guaranty after the merger		71
Expenses		71
Nasdaq stock listing		71
Amendment		71
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION		72
COMPARISON OF RIGHTS OF QCR STOCKHOLDERS AND GUARANTY STOCKHOLDERS		77
STOCKHOLDER PROPOSALS		85
LEGAL MATTERS		85
EXPERTS		85
WHERE YOU CAN FIND MORE INFORMATION		85
Appendix A: Agreement and Plan of Merger		A-1
Appendix B: Section 262 of the Delaware General Corporation Law		B-1
Appendix C: Form of Voting and Support Agreement		C-1
Appendix D: Opinion of Keefe, Bruyette & Woods, Inc.		D-1

(dollars in thousands)	Nine months ended September 30, 2021			Year ended December 31, 2020
Pro forma condensed combined income statement data
Total interest income		$	182,558		$	245,790
Total interest expense			21,969			41,301
Net interest income			160,589			204,489
Provision for credit losses			16,968			59,304
Net interest income after provision for credit losses			143,621			145,185
Noninterest income			88,386			123,871
Noninterest expense			140,245			195,252
Net income before income taxes		$	91,762		$	73,804
Income taxes			16,868			12,356
Net income		$	74,894		$	61,448

(dollars in thousands)	As of September 30, 2021
Pro forma condensed combined balance sheet data
Loans and loans held for sale		$	5,383,702
Allowance for credit losses			(95,770)
Securities			978,925
Total assets			7,204,226
Deposits			5,883,124
Total stockholders’ equity			756,444

	QCR			Guaranty			QCR Pro Forma Combined			Guaranty Pro Forma Equivalent(1)
Nine months ended September 30, 2021
Basic earnings per share		$	4.54		$	1.87		$	4.18		$	1.97
Diluted earnings per share			4.48			1.86			4.13			1.94
Cash dividends declared per share			0.18			0.45			0.18(2)			0.08
As of September 30, 2021
Book value per share		$	41.68		$	21.79		$	42.81		$	20.13

	QCR			Guaranty			QCR Pro Forma Combined			Guaranty Pro Forma Equivalent (1)
Year ended December 31, 2020
Basic earnings per share		$	3.84		$	1.58		$	3.44		$	1.62
Diluted earnings per share			3.80			1.57			3.41			1.60
Cash dividends declared per share			0.24			0.60			0.24(2)			0.11

	QCR Closing Price			Guaranty Closing Price			Implied Value of Stock Consideration(1)			Cash Consideration(1)			Implied Total Per Share Value(1)
November 8, 2021		$	59.39		$	24.03		$	27.93		$	6.10		$	34.03
January 26, 2022		$	58.12		$	32.57		$	27.33		$	6.10		$	33.43

	Guaranty		Selected Companies
	Guaranty		25th Percentile		Average		Median		75th Percentile
MRQ Core Pre-tax Pre-provision Return on Avg. Assets(1)		1.40%		1.21%		1.35%		1.44%		1.69%
MRQ Core Return on Avg. Assets(1)		1.14%		1.01%		1.10%		1.15%		1.35%
MRQ Core Return on Avg. Tangible Common Equity(1)		14.7%		9.1%		11.7%		12.5%		15.6%
MRQ Net Interest Margin		3.33%		3.13%		3.35%		3.35%		3.66%
MRQ Fee Income / Revenue Ratio(2)		22.9%		15.3%		23.0%		20.0%		28.6%
MRQ Efficiency Ratio		64.9%		73.1%		67.5%		63.7%		60.8%

Acquiror			Acquired Company
First Internet Bancorp Community Bank System, Inc. BancPlus Corporation Amalgamated Financial Corp. German American Bancorp, Inc. Arbor Bancorp, Inc. Stock Yards Bancorp, Inc. First Mid Bancshares, Inc. TriCo Bancshares CVB Financial Corp. Mid Penn Bancorp, Inc. Valley National Bancorp Farmers National Banc Corp. Nicolet Bankshares, Inc. Lake Michigan Credit Union Simmons First National Corporation Simmons First National Corporation United Community Banks, Inc. Farmers & Merchants Bancorp, Inc. Colony Bankcorp, Inc. Bank of Marin Bancorp VyStar Credit Union			First Century Bancorp. Elmira Savings Bank First Trust Corporation Amalgamated Investments Company Citizens Union Bancorp of Shelbyville, Inc. FNBH Bancorp, Inc. Commonwealth Bancshares, Inc. Delta Bancshares Company Valley Republic Bancorp Suncrest Bank Riverview Financial Corporation The Westchester Bank Holding Corporation Cortland Bancorp County Bancorp, Inc. Pilot Bancshares, Inc. Triumph Bancshares, Inc. Landmark Community Bank Aquesta Financial Holdings, Inc. Perpetual Federal Savings Bank SouthCrest Financial Group, Inc. American River Bankshares Heritage Southeast Bancorporation Inc.

	QCR / Guaranty		Selected Transactions
	QCR / Guaranty		25th Percentile		Median		Average		75th Percentile
Price / Tangible Book Value		160%		142%		156%		161%		177%
Pay to Trade Ratio		0.98x		0.80x		0.92x		0.92x		1.04x
Price / LTM EPS		16.3x		13.4x		15.4x		17.1x		18.5x
Core Deposit Premium		6.3%		6.5%		7.2%		7.3%		8.6%
One-Day Market Premium		39.3%		12.1%		37.4%		35.3%		49.6%

	QCR as a % of Total		Guaranty as a % of Total
Pro Forma Ownership
Ownership based on the Mixed Consideration at 0.4702x		88%		12%
Illustrative Ownership assuming 100% Stock Consideration at 0.58775x		86%		14%
Balance Sheet
Assets		84%		16%
Gross Loans Held for Investment		85%		15%
Deposits		83%		17%
Tangible Common Equity		86%		14%
Income Statement
LTM Net Income		91%		9%
2021 Estimated Net Income		90%		10%
2022 Estimated Net Income		88%		12%
2023 Estimated Net Income		88%		12%

	For the Years Ended 12/31,
	2021			2022			2023			2024			2025
Earnings Per Share		$	2.54		$	2.79		$	3.01		$	3.17		$	3.32
Net Income ($M)		$	11.1		$	12.2		$	13.2		$	13.9		$	14.6
Total Assets ($M)		$	1,178		$	1,229		$	1,282		$	1,337		$	1,394

	Guaranty		Selected Companies
	Guaranty		25th Percentile		Average		Median		75th Percentile
Tangible Common Equity / Tangible Assets		7.9%		9.1%		10.2%		9.6%		10.6%
Total Capital Ratio		13.4%(1)		13.6%		15.3%		15.0%		17.6%
Loans / Deposits		78.5%		88.9%		79.7%		82.0%		71.6%
Loan Loss Reserve / Gross Loans		1.33%		0.88%		1.20%		1.32%		1.43%
Nonperforming Assets / Loans and OREO		1.29%		1.49%		0.95%		0.60%		0.29%
Net Charge-Offs / Average Loans(2)		0.03%		0.04%		0.02%		0.00%		(0.02)%

	QCR		Selected Companies
	QCR		25th Percentile		Average		Median		75th Percentile
Tangible Common Equity / Tangible Assets		9.5%		8.0%		9.4%		9.2%		10.9%
Total Capital Ratio		14.5%		13.6%		14.8%		14.8%		16.5%
Loans / Deposits		94.3%		87.2%		78.0%		78.8%		67.4%
Loan Loss Reserve / Gross Loans		1.75%		1.26%		1.49%		1.44%		1.68%
Nonperforming Assets / Loans and OREO		0.16%		1.46%		1.16%		0.87%		0.70%
Net Charge-Offs / Average Loans(1)		0.01%		0.13%		0.04%		0.02%		(0.00)%

	Cash Severance(1)			Estimated Incentive Payout(2)			PTO Payout(3)			Total Cash Payments			Equity Acceleration(4)			Total
Shaun Burke		$	983,178		$	163,863		$	37,815		$	1,184,856		$	249,887		$	1,434,743
Carter Peters		$	436,968		$	109,243		$	25,210		$	571,421		$	138,836		$	710,257
Sheri Biser		$	397,580		$	99,395		$	22,937		$	519,912		$	126,301		$	646,213
Craig Dunn		$	450,000		$	112,500		$	25,962		$	588,462		$	142,984		$	731,446

	QCR			Guaranty			Pro Forma Adjustments			QCRH Pro Forma Combined
Assets
Cash and cash equivalents		$	128,136		$	151,533		$	(26,915)(1)		$	252,754
Securities			828,719			151,206			(1,000)(2)			978,925
Loans and loans held for sale			4,599,730			796,972			(13,000)(3)			5,383,702
Allowance for credit losses			(80,670)			(10,566)			(4,534)(4)(5)			(95,770)
Goodwill			74,066			1,435			59,161(6)(7)			134,662
Intangibles			9,857			1,669			3,331(8)(9)			14,857
Other assets			454,670			73,626			6,800(10)(11)			535,096
Total assets		$	6,014,508		$	1,165,875		$	23,843		$	7,204,226
Liabilities and Stockholders’ Equity
Deposits		$	4,871,828		$	1,011,296		$	—		$	5,883,124
Borrowings			183,514			45,908			(2,000)(12)			227,422
Other liabilities			309,352			13,129			14,755(13)			337,236
Total liabilities			5,364,694			1,070,333			12,755			6,447,782
Stockholders’ equity			649,814			95,542			11,088(14)(15)(16)			756,444
Total liabilities & stockholders’ equity		$	6,014,508		$	1,165,875		$	23,843		$	7,204,226
Book value per common share		$	41.68		$	21.79					$	42.81
Shares outstanding			15,590			4,384			(2,306)			17,668

	(in thousands)
Total purchase price		$	151,600
Allocated to:
Historical book value of Guaranty’s assets and liabilities			95,542
Adjustments to record assets and liabilities at fair value:
Loans, fair value mark			(3,000)
Loans, credit mark on PCD loans			(7,000)
Loans, credit mark on non-PCD loans			(10,000)
Eliminate Guaranty’s allowance for loan losses			10,566
Securities interest rate mark			(1,000)
Core deposit intangible			5,000
Eliminate Guaranty’s goodwill			(1,435)
Eliminate Guaranty’s intangibles			(1,669)
Borrowings interest rate mark			2,000
Deferred taxes			2,000
Total adjustments to record assets and liabilities at fair value			(4,538)
Goodwill		$	60,596

	QCR Stockholder Rights	Guaranty Stockholder Rights
Authorized Capital Stock:	QCR is authorized to issue 20 million shares of common stock, par value $1.00 per share, and 250,000 shares of preferred stock, par value $1.00 per share, which we refer to as “QCR preferred stock.” As of November 1, 2021, QCR had 15,596,681 shares of common stock issued and outstanding, and no shares of QCR preferred stock issued and outstanding. Future issuance of shares of QCR’s preferred stock may affect the relative rights of the holders of its common stock, depending upon the exact terms, qualifications, limitations and relative rights and preferences, if any, of the shares of the preferred stock as determined by QCR’s board of directors.	Guaranty is authorized to issue 10 million shares of common stock, par value $0.10 per share and 2 million shares of serial preferred stock, par value $0.01 per share. As of October 31, 2021, Guaranty had 4,383,721 shares of common stock issued and outstanding, and no shares of Guaranty preferred stock issued and outstanding. Future issuance of shares of Guaranty’s preferred stock may affect the relative rights of the holders of its common stock, depending upon the exact terms, qualifications, limitations and relative rights and preferences, if any, of the shares of the preferred stock as determined by QCR’s board of directors.
Dividends:	Subject to any rights of holders of QCR preferred stock, QCR may pay dividends if, as and when declared by its board of directors from any funds legally available therefor.	Guaranty may pay dividends if, as and when declared by its board of directors from any funds legally available therefor.
Number of Directors; Classification:	The QCR board of directors currently consists of 11 members. QCR’s certificate of incorporation provides that its board of directors must consist of not less than three and no more than 15 directors, as may be established by resolution of not less than 80% of the number of directors of the then-current board. QCR’s board of directors is divided into three classes, with each class consisting of approximately one-third of the total number of directors. Directors are elected for three-year terms, with one class of directors up for	The Guaranty board of directors currently consists of 9 members. Guaranty’s certificate of incorporation provides that its board of directors must consist of not less than three and no more than 15 directors, as may be established by resolution of the directors of the then-current board. Guaranty’s board of directors is divided into three classes, with each class consisting of approximately one third of the total number of directors. Directors are elected for three-year terms, with one class of directors up for election at each annual meeting of

	QCR Stockholder Rights	Guaranty Stockholder Rights
	election at each annual meeting of stockholders. As noted above, following the merger, the board of directors will increase to 12 members.	stockholders.
Election of Directors; Vacancies:	Each QCR stockholder is entitled to one vote for each share of the voting stock held by such stockholder. Directors shall be elected by a plurality vote. QCR’s certificate of incorporation does not provide for cumulative voting. QCR’s bylaws provide that any vacancy on the board of directors may be filled at an annual meeting or special meeting of the stockholders called for such purpose, or if such vacancy arises between meetings of stockholders, by a majority vote of the board of directors then in office.	Each Guaranty stockholder is entitled to one vote for each share of the voting stock held by such stockholder. Directors shall be elected by a plurality vote. Guaranty’s certificate of incorporation does not provide for cumulative voting. Guaranty’s certificate of incorporation provides that any vacancy on the board of directors, however caused, and new directorships may be filled by the vote of two thirds of the directors then in office.
Removal of Directors:	A QCR director may be removed at a stockholders’ meeting, for cause, by the affirmative vote of not less than 75% of the outstanding shares entitled to vote.	A Guaranty director may be removed for cause by the affirmative vote of at least 80% of the outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors cast at a meeting of the stockholders called for that purpose.
Call of Special Meeting of Directors:	QCR’s bylaws provide that a special meeting of the board of directors may be called by or at the request of the chief executive officer or any director.	Guaranty’s bylaws provide that a special meeting of the board of directors may be called by or at the request of the chairman of the board or the president, or by one third of the directors.
Limitation on Director Liability:	QCR’s certificate of incorporation and bylaws provide that, to the fullest extent permitted by the DGCL, a director will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty of directors.	Guaranty’s certificate of incorporation provides that, to the fullest extent permitted by the DGCL, a director will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty of directors.
Indemnification:	QCR’s bylaws provide that the corporation will indemnify any person who was or is a party or is threatened to be made party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director or officer	Guaranty’s certificate of incorporation provides that the corporation shall indemnify (i) any person who is or was a director, officer, employee of the corporation, and (ii) any person who serves or served at the corporation’s request as a director, officer, employee, partner or trustee of another corporation, partnership, joint venture, trust or other enterprise, under

			QCR Stockholder Rights			Guaranty Stockholder Rights
			of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Further, QCR will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of			specified circumstances and to specified limits. Specifically, in the case of a threatened, pending or completed action or suit by or in the right of the corporation against a foregoing individual by reason of his or her holding a position named in the preceding provisions, the corporation shall indemnify such individual for expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection with the defense or settlement of the action or suit, if he meets the following standard: (i) he is successful on the merits, and (ii) he acted in good faith in the transaction which is the subject of the suit or action, and in a manner he reasonably believed to be in, or not opposed to, the best interest of the corporation, including, but not limited to, the taking of any and all actions in connection with the corporation’s response to any tender off or any offer or proposal of another party to engage in a business combination not approved by the board of directors. However, he shall not be indemnified in respect of any claim, issue or matter as to which he has been adjudged liable to the corporation unless (and only to the extent that) the Court of Chancery of the State of Delaware or the court in which the suit was brought shall determine, upon application, that despite the adjudication but in view of all the circumstances, he is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. In the case of nonderivative suits (as defined in the certificate of incorporation), against a foregoing identified person by reason of his holding a position named in the certificate of incorporation, the corporation shall indemnify him, if he satisfies a specified standard, for amounts incurred by him or her in connection with the defense or settlement of the nonderivative suit, including, but not limited to expenses

	QCR Stockholder Rights	Guaranty Stockholder Rights
	Delaware or such other court shall deem proper.	(including attorneys’ fees), amounts paid in settlement, judgments and fines. The applicable standard is as follows: the person shall be indemnified only if he is successful on the merits or otherwise, or he acted in good faith in the transaction which is the subject of the nonderivative suit and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, including, but not limited to, the taking of any and all action in connection with the corporation’s response to any tender offer or any offer or proposal of another party to engage in a business combination not approved by the board of directors and, with respect to any criminal action or proceeding, he had no reasonable cause to believe his conduct was unlawful. The termination of a nonderivative suit by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, in itself, create a presumption that the person failed to satisfy the foregoing standard.
Call of Special Meetings of Stockholders:	QCR’s bylaws provide that a special meeting of the stockholders may be called by the chair of the board, the president, the board of directors or at the request in writing of stockholders owning a majority of the issued and outstanding voting stock of the corporation. Written notice stating the place (if any), date, hour, record date for determining stockholders entitled to vote at the meeting, means of remote communication (if any), place where the stockholder list may examined prior to the meeting and purpose(s) of the special meeting must be delivered, either personally or by mail or facsimile, not less than 10 nor more than 60 days before the date of the meeting.	Guaranty’s certificate of incorporation provides that meetings of the stockholders of the corporation for any purpose or purposes may be called at any time by the board of directors, or by a committee of the board of directors which has been duly designated by the board of directors and whose powers and authorities, as provided in a resolution of the board of directors or in Guaranty’s bylaws, include the power and authority to call such meetings, but such special meetings may not be called by any other person or persons.
Quorum of Stockholders:	QCR’s bylaws provide that a majority of the outstanding shares of voting stock, represented in person or by proxy, constitutes a quorum at any meeting of stockholders.	Guaranty’s certificate of incorporation provides that the presence in person or by proxy of the holders of record of capital stock of Guaranty entitling the holders thereof to cast a majority of

	QCR Stockholder Rights	Guaranty Stockholder Rights
		the votes entitled to be cast by the holders of capital stock of Guaranty shall constitute a quorum.
Advance Notice Regarding Stockholder Proposals (other than Nomination of Candidates for Election to the Board of Directors):	QCR’s bylaws provide that for a stockholder to properly bring business before an annual or special meeting of stockholders, written notice of such proposal must be delivered, mailed or telegraphed to the secretary of the corporation at the principal executive offices of the corporation not less than 30 days nor more than 75 days prior to the date of the originally scheduled meeting (provided, however, that if less than 40 days’ notice of the date of the scheduled meeting is given or made by the corporation, notice by the stockholder to be timely must be so delivered, mailed or telegraphed to the corporation not later than the close of business on the 10th day following the day on which notice of the date of the scheduled meeting was first mailed to stockholders). A stockholder’s notice to the secretary shall set forth the following as to each matter the stockholder proposes to bring before the meeting: (i) a brief description of the proposal desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, (iii) the number of shares of the corporation’s common stock beneficially owned by such stockholder on the date of such stockholder’s notice, and (iv) any financial or other interest of such stockholder in the proposal.	Guaranty’s certificate of incorporation provides that for a stockholder to properly bring business before a meeting of the stockholders, the stockholder must provide a written notice that includes: (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business. Such notice must be written and delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the corporation not less than 30 days nor more than 60 days prior to the stockholder meeting; provided that if less than 30 days’ notice of the meeting is given to the stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the corporation not later than the close of the 10th day following the day on which notice of the meeting was mailed to the stockholders.
Advance Notice Regarding Stockholders Nomination of Candidates for Election to the Board of Directors:	QCR’s bylaws provide that nominations, of persons for election to the board of directors may be made at an annual or special meeting of stockholders by a stockholder of QCR. For nominations for election to the board of directors of QCR to be properly brought before an annual or special meeting, written notice of such nomination(s) must be delivered to or mailed and received by the secretary of	Guaranty’s certificate of incorporation provides that for a stockholder to properly bring a nomination before a meeting of the stockholders, the stockholder must provide a written notice that includes: (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address, as they appear on the corporation’s

	QCR Stockholder Rights	Guaranty Stockholder Rights
	the corporation at the principal executive offices of the corporation not less than 30 days nor more than 75 days prior to the meeting (provided, however, that in the event that less than 40 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the earlier of the day on which such notice of the date of meeting was mailed or such public disclosure was made). A stockholder’s notice to the secretary shall set forth: (i) the name and address of record of the stockholder who intends to make the nomination, (ii) a representation that the stockholder is, a holder of record of shares of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (iii) the name, age, business and residence addresses, and principal occupation or employment of each nominee, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder, (v) such other information regarding such nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, as then in effect, and (vi) the consent of each nominee to serve as a director of the corporation if so elected.	books, of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business. A stockholder’s notice to the Secretary of the corporation must also set forth: (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of such nominees, (iii) the number of shares of stock of the corporation which are beneficially owned by such nominees, (iv) such other information as would be required to be included in a proxy statement soliciting proxies for the election of the proposed nominees pursuant to Regulation 14A of the Exchange Act, including, without limitation, each such person’s written consent to being named in the proxy statement as a nominee and to serving as a director, if elected, and (v) as to the stockholder giving such notice, (a) his name and address as they appear on the corporation’s books, and (b) the class and number of shares of the corporation which are beneficially owned by such stockholder. Such notice must be such written notice, delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the corporation not less than 30 days nor more than 60 days prior to the stockholder meeting; provided that if less than 30 days’ notice of the meeting is given to the stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the corporation not later than the close of the 10th day following the day on which notice of the meeting was mailed to the stockholders.
Stockholder Action by Written Consent:	QCR’s certificate of incorporation provides that 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	Guaranty’s certificate of incorporation provides that no action required to be taken or which may be taken at any annual or special meeting of stockholders of the corporation may be

	QCR Stockholder Rights	Guaranty Stockholder Rights
	special meeting of the holders of capital stock of the corporation and may not be effected by any consent in writing by such holders, unless such action is authorized by not less than 80% of the number of directors.	taken without a meeting. The power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.
Appointment and Removal of Officers:	QCR’s bylaws provide that the officers shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the stockholders. Each officer will hold office until his or her successor is duly elected and qualified or until his or her prior death, resignation or removal. Any officer may be removed by the board of directors whenever in its judgment the best interests of the corporation will be served thereby.	Guaranty’s bylaws provide that the officers shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the stockholders. Each officer will hold office until his successor shall have been duly elected and qualified or until his death or until he shall resign or shall have been removed. Any officer may be removed by the vote of two-thirds of the board of directors whenever, in its judgment, the best interests of the corporation will be served by such removal.
Required Vote for Certain Transactions	The QCR certificate of incorporation requires the affirmative vote of stockholders having at least 75% of the voting power of all outstanding voting stock for the following transactions: (i) sale or consolidation, (ii) sale, lease or exchange of all or substantially all of the assets of the corporation, (iii) issuance or transfer of any voting securities to a corporation, person or entity in exchange for cash, assets or securities, and (iv) voluntary dissolution of the corporation. However, such vote is not necessary for any such transaction if approved by not less than 80% of the number of directors then in office.	The Guaranty certificate of incorporation requires the affirmative vote of stockholders having at least 80% of the outstanding shares of voting stock for the following transactions, subject to certain exceptions: (i) any merger, reorganization, or consolidation of the corporation or its affiliates with or into any principal stockholder, (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or in a series of related transactions) of all or a substantial part of the assets of the corporation or any of its affiliates, (iii) any sale, lease, exchange, or other transfer (in one transaction or in a series of related transactions) by any principal stockholder to the corporation or any of the corporation’s affiliates of any assets, cash or securities in exchange for shares of voting stock, (iv) the adoption at any time when there exists any principal stockholder of any plan or proposal for the liquidation or dissolution of the corporation, or (v) any reclassification of securities, recapitalization, or other transaction at any time where there exists any principal stockholder if such

	QCR Stockholder Rights	Guaranty Stockholder Rights
		reclassification, recapitalization or other transaction would result in a decrease in the number of holders of outstanding shares of voting stock. The proposed merger does not contemplate such a transaction with an 80% approval threshold. As previously noted under “Information About the Special Meeting of Guaranty Stockholders — Record date, quorum and vote required” above, approval of the merger agreement and the transactions contemplated therein requires the affirmative vote of the holders of a majority of the outstanding shares of Guaranty common stock entitled to vote thereon.
Amendment to Charter and Bylaws:	An amendment to the certificate of incorporation that relates to certain provisions, including the amendment process, use of written ballots, business combinations with interested stockholders and stockholder action by written consent, must be approved by 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. Otherwise, as provided by the DGCL, the certificate of incorporation may be amended by the affirmative vote of at least a majority of the shares entitled to vote on the proposal after the board of directors has passed a resolution by majority vote setting forth the proposed amendment and directing that it be submitted to a vote at a stockholders’ meeting. The bylaws of QCR may be amended, altered, changed or repealed by either an affirmative vote of holders of not less than 75% of the outstanding shares of stock entitled to vote or the affirmative vote of not less than 80% of the directors then in office.	In general, the corporation reserves the right to repeal, alter, amend or rescind any provision contained in the certificate of incorporation. An amendment to the certificate of incorporation that relates to certain provisions may only be made if the same is approved by the affirmative vote of the holders of not less than 80% of the outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors cast at a meeting of the stockholders called for such purpose. The board of directors may make, repeal, alter, amend and rescind the bylaws of the corporation. The holders of not less than 80% of the outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors cast at a meeting of stockholders may also make, repeal, alter, amend and rescind the bylaws.

	ARTICLE 1 THE MERGER					A-1
	Section 1.1 The Merger					A-1
	Section 1.2 Effective Time; Closing					A-1
	Section 1.3 Effects of the Merger					A-2
	Section 1.4 Organizational Documents of the Surviving Entity					A-2
	Section 1.5 Directors and Officers					A-2
	Section 1.6 Bank Merger					A-2
	ARTICLE 2 CONVERSION OF SECURITIES IN THE MERGER					A-2
	Section 2.1 Consideration					A-2
	Section 2.2 Cancellation of Shares					A-4
	Section 2.3 No Fractional Shares					A-4
	Section 2.4 Exchange of Certificates					A-4
	Section 2.5 Company Stock Awards					A-5
	Section 2.6 Election Procedure					A-6
	Section 2.7 Dissenting Shares					A-7
	ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY					A-7
	Section 3.1 Company Organization					A-7
	Section 3.2 Company Subsidiary Organizations					A-8
	Section 3.3 Authorization; Enforceability					A-8
	Section 3.4 No Conflict					A-8
	Section 3.5 Company Capitalization					A-9
	Section 3.6 Company Subsidiary Capitalization					A-9
	Section 3.7 Company SEC Reports; Financial Statements and Reports; Regulatory Filings					A-9
	Section 3.8 Books and Records					A-11
	Section 3.9 Properties					A-11
	Section 3.10 Loans; Loan Loss Reserve					A-12
	Section 3.11 Taxes					A-12
	Section 3.12 Employee Benefits					A-14
	Section 3.13 Compliance with Legal Requirements					A-15
	Section 3.14 Legal Proceedings; Orders					A-16
	Section 3.15 Absence of Certain Changes and Events					A-16
	Section 3.16 Material Contracts					A-16
	Section 3.17 No Defaults					A-17
	Section 3.18 Insurance					A-17
	Section 3.19 Compliance with Environmental Laws					A-18
	Section 3.20 Transactions with Affiliates					A-18
	Section 3.21 Brokerage Commissions					A-18
	Section 3.22 Approval Delays; CRA Rating					A-18
	Section 3.23 Labor Matters					A-18
	Section 3.24 Intellectual Property					A-19
	Section 3.25 Investments					A-20
	Section 3.26 Fairness Opinion					A-20

	Section 3.27 No Other Representations or Warranties					A-20
	ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ACQUIROR					A-21
	Section 4.1 Acquiror Organization					A-21
	Section 4.2 Acquiror Subsidiary Organizations					A-21
	Section 4.3 Authorization; Enforceability					A-21
	Section 4.4 No Conflict					A-22
	Section 4.5 Acquiror Capitalization					A-22
	Section 4.6 Acquiror SEC Reports; Financial Statements and Reports; Regulatory Filings					A-23
	Section 4.7 Compliance with Legal Requirements					A-23
	Section 4.8 Legal Proceedings; Orders					A-24
	Section 4.9 Taxes					A-24
	Section 4.10 Employee Benefits					A-24
	Section 4.11 Absence of Certain Changes and Events					A-25
	Section 4.12 Brokerage Commissions					A-25
	Section 4.13 Approval Delays					A-25
	Section 4.14 Financial Capability					A-25
	Section 4.15 Transactions With Affiliates					A-25
	Section 4.16 No Other Representations or Warranties					A-25
	ARTICLE 5 THE COMPANY’S COVENANTS					A-25
	Section 5.1 Access and Investigation					A-25
	Section 5.2 Operation of the Company and Company Subsidiaries					A-26
	Section 5.3 Notice of Changes					A-29
	Section 5.4 Stockholders’ Meeting					A-29
	Section 5.5 Information Provided to Acquiror					A-29
	Section 5.6 Operating Functions					A-30
	Section 5.7 Company Benefit Plans					A-30
	Section 5.8 Acquisition Proposals and Intervening Events					A-30
	ARTICLE 6 ACQUIROR’S COVENANTS					A-31
	Section 6.1 Access and Investigation					A-31
	Section 6.2 Operation of the Acquiror and Acquiror Subsidiaries					A-32
	Section 6.3 Notice of Changes					A-32
	Section 6.4 Information Provided to the Company					A-32
	Section 6.5 Operating Functions					A-33
	Section 6.6 Indemnification					A-33
	Section 6.7 Authorization and Reservation of Acquiror Common Stock					A-34
	Section 6.8 Stock Exchange Listing					A-34
	Section 6.9 Assumption of Debt Instruments					A-34
	Section 6.10 Board Representation					A-34
	ARTICLE 7 COVENANTS OF ALL PARTIES					A-34
	Section 7.1 Regulatory Approvals					A-34
	Section 7.2 SEC Registration					A-34
	Section 7.3 Publicity					A-35
	Section 7.4 Reasonable Best Efforts; Cooperation					A-35
	Section 7.5 Employees and Employee Benefits					A-35

	Section 7.6 Tax Free Reorganization					A-36
	Section 7.7 Takeover Laws					A-37
	Section 7.8 Stockholder Litigation					A-37
	Section 7.9 Exemption from Liability Under Section 16(b)					A-37
	Section 7.10 Adjusted Equity					A-38
	ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR					A-38
	Section 8.1 Accuracy of Representations and Warranties					A-38
	Section 8.2 Performance by the Company					A-39
	Section 8.3 Stockholder Approval					A-39
	Section 8.4 No Injunctions or Restraints; Illegality					A-39
	Section 8.5 Regulatory Approvals					A-39
	Section 8.6 Registration Statement					A-39
	Section 8.7 Officers’ Certificate					A-39
	Section 8.8 Stock Exchange Listing					A-39
	Section 8.9 No Material Adverse Effect					A-39
	ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY					A-39
	Section 9.1 Accuracy of Representations and Warranties					A-39
	Section 9.2 Performance by Acquiror					A-39
	Section 9.3 Stockholder Approval					A-40
	Section 9.4 No Injunctions or Restraints; Illegality					A-40
	Section 9.5 Regulatory Approvals					A-40
	Section 9.6 Registration Statement					A-40
	Section 9.7 Officers’ Certificate					A-40
	Section 9.8 Tax Opinion					A-40
	Section 9.9 Stock Exchange Listing					A-40
	Section 9.10 No Material Adverse Effect					A-40
	ARTICLE 10 TERMINATION					A-40
	Section 10.1 Termination of Agreement					A-40
	Section 10.2 Effect of Termination or Abandonment					A-42
	Section 10.3 Fees and Expenses					A-42
	ARTICLE 11 MISCELLANEOUS					A-43
	Section 11.1 Survival					A-43
	Section 11.2 Governing Law; Venue and Waiver of Jury Trial					A-43
	Section 11.3 Assignments, Successors and No Third Party Rights					A-44
	Section 11.4 Modification					A-44
	Section 11.5 Extension of Time; Waiver					A-44
	Section 11.6 Notices					A-45
	Section 11.7 Entire Agreement					A-45
	Section 11.8 Severability					A-46
	Section 11.9 Further Assurances					A-46
	Section 11.10 Counterparts					A-46
	ARTICLE 12 DEFINITIONS					A-46
	Section 12.1 Definitions					A-46
	Section 12.2 Principles of Construction					A-51

	A			Form of Voting and Support Agreement
	B			Company Employees
	C			Statutory Bank Merger Agreement

	Acquiror								1
	Acquiror Benefit Plan								63
	Acquiror Board								63
	Acquiror Bylaws								63
	Acquiror Capital Stock								63
	Acquiror Capitalization Date								30
	Acquiror Certificate of Incorporation								63
	Acquiror Common Stock								63
	Acquiror Common Stock Price								63
	Acquiror Disclosure Schedules								71
	Acquiror ERISA Affiliate								63
	Acquiror Financial Statements								31
	Acquiror Preferred Stock								30
	Acquiror SEC Reports								63
	Acquiror Stock Issuance								64
	Acquisition Proposal								64
	Adjusted Tangible Equity								52
	Affiliate								64
	Agreement								1
	Available Cash								3
	Available Shares								3
	Bank								64
	Bank Merger								64
	Borrowing Affiliate								37
	Business Day								64
	Cash Electing Company Share								3
	Cash Election								3
	Cash Election Amount								3
	Closing								2
	Closing Balance Sheet								52
	Closing Date								2
	Code								64
	Common Stock Merger Consideration								64
	Company								1
	Company Adverse Recommendation								40
	Company Articles of Incorporation								64
	Company Benefit Plan								64
	Company Board								65
	Company Bylaws								65
	Company Capitalization Date								12
	Company Common Stock								65
	Company Disclosure Schedules								71

	Company Employees								38
	Company Equity Award								65
	Company ERISA Affiliate								65
	Company Evaluation Date								14
	Company Financial Statements								13
	Company Insiders								51
	Company Investment Securities								27
	Company Loans								16
	Company Material Contract								22
	Company Minimum Adjusted Net Worth								52
	Company Permitted Exceptions								15
	Company SEC Reports								65
	Company Stock Award								7
	Company Stock Certificates								6
	Company Stock Plan								66
	Company Stockholder Approval								65
	Company Stockholders’ Meeting								40
	Confidentiality Agreement								36
	Contemplated Transactions								65
	Contract								65
	Control, Controlling or Controlled								66
	Conversion Fund								6
	Covered Employees								48
	CRA								66
	Defective Code								26
	Delaware Certificate of Merger								2
	Deposit Insurance Fund								66
	Derivative Transactions								66
	Determination Date								57
	DGCL								66
	Dissenters’ Shares								9
	DOL								66
	Effective Time								2
	Election Deadline								66
	Election Form Record Date								8
	Environment								66
	Environmental Laws								66
	ERISA								66
	Exchange Act								66
	Exchange Agent								5
	Exchange Ratio								3
	Excluded Shares								67
	FDIC								67
	Federal Reserve								67

	Final Acquiror Market Value								57
	Final Index Price								57
	Form of Election								8
	GAAP								67
	Hazardous Materials								67
	Indemnified Party								45
	Index								57
	Index Ratio								57
	Initial Acquiror Market Value								58
	Initial Index Price								58
	Internal Control Over Financial Reporting								14
	Intervening Event								67
	IRS								67
	IRS Guidelines								50
	IT Assets								26
	Knowledge								67
	Legal Requirement								67
	Letter of Transmittal								6
	Mailing Date								8
	Malicious Code								26
	Material Adverse Effect								67
	Merger								1
	Mixed Consideration Electing Company Share								4
	Mixed Election								4
	Mixed Election Cash Consideration								4
	Mixed Election Share Consideration								4
	Nasdaq Rules								68
	New Plans								49
	Non-Electing Company Share								4
	Old Plans								49
	Order								68
	Ordinary Course of Business								68
	OREO								68
	Outstanding Company Shares								68
	PBGC								69
	Per Share Value								3
	Person								69
	Previously Disclosed								71
	Proceeding								69
	Pro-Rated Cash Amount								3
	Pro-Rated Share Amount								4
	Proxy Statement								69
	Registration Statement								69
	Regulatory Authority								69

	Remaining Cash Amount								4
	Remaining Share Amount								4
	Representative								69
	Requisite Regulatory Approvals								69
	SEC								69
	Securities Act								69
	SFCB								69
	Share Electing Company Share								3
	Share Election								3
	Share Election Amount								3
	Subsidiary								69
	Superior Proposal								69
	Surviving Entity								1
	Tax								70
	Tax Return								70
	Termination Date								56
	Transaction Expenses								52
	Transition Date								70
	Treasury Regulations								70
	U.S								70

	ACQUIROR: QCR Holdings, Inc.						COMPANY: Guaranty Federal Bancshares, Inc.
	By: /s/ Larry J. Helling Name: Larry J. Helling Title: Chief Executive Officer						By: /s/ Shaun A. Burke Name: Shaun A. Burke Title: President and Chief Executive Officer

	Acquiror:			Company:
	QCR Holdings, Inc.			Guaranty Federal Bancshares, Inc.
	By: Name: Larry J. Helling Title: President and Chief Executive Officer			By: Name: Shaun A. Burke Title: President and Chief Executive Officer

	Principal Stockholders			Shares Owned
	Signature
	Name
	Signature
	Name
	Signature
	Name
	Signature
	Name
	Signature
	Name