Qcr Holdings Inc S-4, filed Oct 28, 2022

Qcr Holdings Inc (QCRH)

S-4 2022-10-28

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	Large accelerated filer ☒			Accelerated filer ☐
	Non-accelerated filer ☐ (Do not check if a smaller reporting company)			Smaller reporting company ☐
				Emerging growth company ☐

	ABOUT THIS PROSPECTUS					i
	WHERE YOU CAN FIND MORE INFORMATION					iii
	INFORMATION INCORPORATED BY REFERENCE					iii
	SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS					iv
	SUMMARY					1
	RISK FACTORS					8
	USE OF PROCEEDS					17
	THE EXCHANGE OFFER					18
	DESCRIPTION OF THE NOTES					28
	MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS					44
	PLAN OF DISTRIBUTION					46
	LEGAL MATTERS					46
	EXPERTS					46

	Old Notes			Up to $45,000,000 in aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes due 2032.
	New Notes			Up to $45,000,000 in aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes due 2032, which have terms that are identical in all material respects to the terms of the Old Notes, except that the New Notes are registered under the Securities Act and are generally not subject to transfer restrictions, are not entitled to registration rights under the registration rights agreement and do not have the right to additional interest under the circumstances described in the registration rights agreement relating to our fulfillment of our registration obligations.
	Exchange Offer			We are offering to exchange the New Notes for a like principal amount of Old Notes. Subject to the terms of the exchange offer, promptly following the termination of the exchange offer, we will exchange New Notes for all Old Notes that have been validly tendered and not validly withdrawn prior to the expiration of the exchange offer.
	Expiration Date			The exchange offer will expire at 11:59 p.m., New York City time, on , 2022, unless extended.
	Withdrawal Rights			You may withdraw the tender of your Old Notes at any time before the expiration date.
	Conditions to Exchange Offer			This exchange offer is subject to customary conditions, which we may waive. See “The Exchange Offer — Conditions.”
	Procedures for Tendering Old Notes			For Old Notes that are represented by global book-entry notes, The Depository Trust Company (“DTC”), as depositary, or its nominee is treated as the registered holder of such Old Notes and will be the only entity that can tender such Old Notes for New Notes. In order to participate in the exchange offer, you must follow the procedures established by DTC for tendering such Old Notes held in book-entry form. These procedures, which we call “ATOP” (“Automated Tender Offer Program”) procedures, require that (i) the exchange agent receive, prior to the expiration date of the exchange offer, a computer generated message known as an “agent’s message” that is transmitted through ATOP, and (ii) DTC has received (a) your instructions to exchange your Old Notes, and (b) your agreement to be bound by the terms of the accompanying letter of transmittal.
				For Old Notes that are represented by a physical note that is registered in the initial purchaser’s name, each beneficial holder of such Old Note must transmit a properly completed and duly executed letter of transmittal, the physical note, and all other documents required by the letter of transmittal to the exchange agent, at its address listed under “The Exchange Offer — Exchange Agent.”

				Please note that by signing, or agreeing to be bound by, the letter of transmittal, you will be making a number of important representations to us. See “The Exchange Offer — Eligibility; Transferability.”
	Material United States Federal Income Tax Considerations			The exchange of Old Notes for New Notes in the exchange offer generally should not constitute a taxable event for U.S. federal income tax purposes. See “Material United States Federal Income Tax Considerations.” You should consult your own tax advisor as to the tax consequences of exchanging your Old Notes for New Notes.
	Registration Rights			Under the terms of the registration rights agreement that we entered into with the initial purchasers of the Old Notes at the time we issued the Old Notes, we agreed to register the New Notes and undertake this exchange offer. This exchange offer is intended to satisfy the rights of holders of Old Notes under that registration rights agreement. After the exchange offer is completed, we will have no further obligations, except under certain limited circumstances, to provide for any exchange or undertake any further registration with respect to the Old Notes.
	Transferability			Based upon existing interpretations of the Securities Act by the staff of the SEC contained in several no-action letters issued to third parties, we believe that the New Notes may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that:
				• you are acquiring the New Notes in the ordinary course of your business;
				• you are not participating or engaged in, do not intend to participate or engage in, and have no arrangement or understanding with any person to participate in, the distribution of the New Notes issued to you;
				• you are not an “affiliate” of ours within the meaning of Rule 405 under the Securities Act; and
				• you are not acting on behalf of any person who could not truthfully make these statements.
				Our belief that transfers of New Notes would be permitted without registration or prospectus delivery under the conditions described above is based on interpretations by the staff of the SEC given to other, unrelated issuers in similar exchange offers. The staff of the SEC has not considered this exchange offer in the context of a no-action letter, and we cannot assure you that the staff of the SEC would make a similar interpretation with respect to our exchange offer.
				If our belief is not accurate and you transfer a New Note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from such requirements, you may incur liability under the Securities Act. We do not and will not assume, or indemnify you against, such liability.

				Each broker-dealer that receives New Notes for its own account under the exchange offer in exchange for Old Notes that were acquired by the broker-dealer as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the New Notes.
				See “The Exchange Offer — Eligibility; Transferability” and “Plan of Distribution.”
	Consequences of Failing to Exchange Old Notes			Any Old Notes that are not exchanged in the exchange offer will continue to be governed by the indenture relating to the Old Notes and the terms of the Old Notes. Old Notes that are not exchanged will remain subject to the restrictions on transfer described in the Old Notes, and you will not be able to offer or sell the Old Notes except under an exemption from the requirements of the Securities Act or unless the Old Notes are registered under the Securities Act. Upon the completion of the exchange offer, we will have no further obligations, except under limited circumstances, to provide for registration of the Old Notes under the U.S. federal securities laws. If you do not participate in the exchange offer, the liquidity of your Old Notes could be adversely affected. See “The Exchange Offer — Consequences of Failure to Exchange.”
	Use of Proceeds			We will not receive any cash proceeds from the exchange of Old Notes for New Notes as a result of the exchange offer.
	Cancellation of Exchanged Old Notes			Old Notes that are surrendered in exchange for New Notes will be retired and cancelled by us upon receipt and will not be reissued. Accordingly, the issuance of the New Notes under this exchange offer will not result in any increase in our outstanding indebtedness.
	Exchange Agent			Wilmington Trust, National Association is serving as the exchange agent for this exchange offer. See “The Exchange Offer — Exchange Agent” for the address and telephone number of the exchange agent.

	Issuer			QCR Holdings, Inc.
	Securities Offered			Fixed-to-Floating Rate Subordinated Notes due 2032.
	Aggregate Principal Amount			Up to $45,000,000.
	Maturity Date			September 1, 2032, unless previously redeemed.
	Form and Denomination			The New Notes will be issued only in fully registered form without interest coupons, in minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof. Unless otherwise required for institutional accredited investors, the New Notes will be evidenced by a global note deposited with the trustee for the New Notes, as custodian for DTC, and transfers of beneficial interests will be facilitated only through records maintained by DTC and its participants.
	Interest Rate and Interest Rate Payment Dates During Fixed Rate Period			From and including August 18, 2022, to but excluding September 1, 2027 or earlier redemption date, the New Notes will bear interest at a fixed rate equal to 5.500% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2023.
	Interest Rate and Interest Rate Payment Dates During Floating Rate Period			From and including September 1, 2027, to but excluding the maturity date or earlier redemption date (the “Floating Rate Period”), the New Notes will bear interest at an annual floating rate, reset quarterly, equal to the Benchmark rate (which is expected to be the then-current Three-Month SOFR), plus a spread of 279 basis points, provided, however, that in the event that the Three-Month Term SOFR is less than zero, Three-Month Term SOFR shall be deemed to be zero (as defined under “Description of the Notes — Principal, Maturity and Interest”). During the Floating Rate Period, interest on the New Notes will be payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year commencing on December 1, 2027.
				For each interest period during the Floating Rate Period, “Three-Month Term SOFR” means the rate for Term SOFR for a tenor of three months that is published by the Term SOFR Administrator at the Reference Time for any Floating Rate Interest Period, as determined by the calculation agent after giving effect to the Three-Month Term SOFR Conventions (each as defined under “Description of the Notes — Principal, Maturity and Interest”). If the calculation agent determines on or prior to the relevant Reference Time that a Benchmark Transition Event and its related

				Benchmark Replacement Date (each as defined under “Description of the Notes — Principal, Maturity and Interest”) have occurred with respect to Three-Month Term SOFR, then the calculation agent shall promptly provide notice of such determination to the holders and the provisions under “Description of the Notes — Effect of Benchmark Transition Event,” which are referred to herein as the benchmark transition provisions, will thereafter apply to all determinations of the interest rate on the New Notes for each interest period during the Floating Rate Period. In accordance with the benchmark transition provisions, after a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the interest rate on the New Notes for each interest period during the Floating Rate Period will be an annual rate equal to the sum of the applicable Benchmark Replacement (as defined under “Description of the Notes — Effect of Benchmark Transition Event”), plus 279 basis points.
	Day Count Convention			30-day month/360-day year to but excluding September 1, 2027, and thereafter, a 360-day year and the number of days actually elapsed.
	Record Dates			Each interest payment will be made to the holders of record who held the New Notes at the close of business on the fifteenth calendar day (whether or not a business day) prior to the applicable interest payment date.
	Subordination; Ranking			The New Notes will be our general unsecured, subordinated obligations and:
				• will rank junior in right of payment and upon our liquidation to any of our existing and all future Senior Indebtedness (as defined in “Description of Notes — Subordination”), all as described under “Description of the Notes”;
				• will rank junior in right of payment and upon our liquidation to any of our existing and all of our future general creditors;
				• will rank equal in right of payment and upon our liquidation with any of our existing and all of our future indebtedness the terms of which provide that such indebtedness ranks equally with the New Notes;
				• will rank senior in right of payment and upon our liquidation to any of our indebtedness the terms of which provide that such indebtedness ranks junior in right of payment to note indebtedness such as the New Notes; and
				• will be effectively subordinated to our future secured indebtedness to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to the existing and future indebtedness of our subsidiaries, including without limitation the Banks’ depositors, liabilities to general creditors and liabilities arising in the ordinary course of business or otherwise.

	Optional Redemption			We may, at our option, redeem the New Notes (i) in whole or in part, beginning with the interest payment date of September 1, 2027 and on any scheduled interest payment date thereafter and (ii) in whole but not in part, at any time upon the occurrence of a Tier 2 Capital Event, Tax Event or a 1940 Act Event (each as described in “Description of the Notes — Redemption”).
				Any redemption of the New Notes will be subject to prior approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), to the extent such approval is then required. Any redemption of the New Notes will be at a redemption price equal to 100% of the principal amount of the New Notes being redeemed plus accrued and unpaid interest to, but excluding, the date of redemption.
				The New Notes are not subject to repayment at the option of the holders and there is no sinking fund for the New Notes.
	No Limitations on Indebtedness			The terms of the New Notes do not limit the amount of additional indebtedness the Company, the Banks or any of our respective subsidiaries may incur or the amount of other obligations ranking senior or equal to the New Notes that we may incur.
	Limited Indenture Covenants			The indenture governing the New Notes contains no financial covenants requiring us to achieve or maintain any minimum financial results relating to our financial position or results of operations or meet or exceed any financial ratios as a general matter or in order to incur additional indebtedness or obligations or to maintain any reserves.
				Moreover, neither the indenture nor the New Notes contain any covenants prohibiting us from, or limiting our right to, grant liens on our assets to secure our indebtedness or other obligations that are senior in right of payment to the New Notes, to repurchase our stock or other securities, including any of the New Notes, or to pay dividends or make other distributions to our stockholders.
	Listing; No Public Market			The New Notes are a new issue of securities with no established trading market and we do not expect any public market to develop in the future for the New Notes. We do not intend to list the New Notes on any national securities exchange or quotation system.
	Risk Factors			See “Risk Factors” beginning on page 8 of this prospectus, as well as in our reports filed with the SEC, and other information included or incorporated by reference in this prospectus for a discussion of factors you should consider carefully before deciding to participate in the exchange offer.
	Trustee			Wilmington Trust, National Association.
	Governing Law			The New Notes and the indenture will be governed by and construed in accordance with the laws of the State of New York.

	By Mail or Hand Delivery:			Wilmington Trust, National Association Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attention: Workflow Management — 5th Floor
	Facsimile:			(302) 636-4139
	Email:			DTC@wilmingtontrust.com

	Exhibit Number			Description
	3.1			Certificate of Incorporation of QCR Holdings, Inc., as amended (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q/A Amendment No. 1 for the period ended September 30, 2011).
	3.2			Bylaws of QCR Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed on August 19, 2022).

	Exhibit Number			Description
	4.1			Indenture, dated February 12, 2019, by and between QCR Holdings, Inc. and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed on February 12, 2019).
	4.2			Second Supplemental Indenture, dated August 18, 2022, by and between QCR Holdings, Inc. and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed on August 18, 2022).
	4.3			Forms of Fixed-to-Floating Rate Subordinated Note due 2032 (included as Exhibit A and Exhibit B to the Second Supplemental Indenture filed as Exhibit 4.2 hereto).
	4.4			Form of Registration Rights Agreement, dated August 18, 2022, by and among QCR Holdings, Inc. and the Purchasers signatory thereto (incorporated herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on August 18, 2022).
	5.1			Opinion of Barack Ferrazzano Kirschbaum & Nagelberg LLP (filed herewith).
	23.1			Consent of RSM US LLP (filed herewith).
	23.2			Consent of Barack Ferrazzano Kirschbaum & Nagelberg LLP (included in the opinion filed as Exhibit 5.1).
	24.1			Power of Attorney (included in Part II as a part of the signature page of this Registration Statement).
	25.1			Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Wilmington Trust, National Association (filed herewith).
	99.1			Form of Letter of Transmittal (filed herewith).
	107			Filing Fee Table (filed herewith).

Name	Title	Date
/s/ Marie Z. Ziegler Marie Z. Ziegler	Chair of the Board of Directors	October 28, 2022
/s/ Larry J. Helling Larry J. Helling	Chief Executive Officer and Director (Principal Executive Officer)	October 28, 2022
/s/ Nick W. Anderson Nick W. Anderson	Chief Accounting Officer (Principal Accounting Officer)	October 28, 2022
/s/ John Paul E. Besong John Paul E. Besong	Director	October 28, 2022
/s/ Todd A. Gipple Todd A. Gipple	President, Chief Operating Officer, Chief Financial Officer and Director (Principal Financial Officer)	October 28, 2022
/s/ Mary K. Bates Mary K. Bates	Director	October 28, 2022

	Very truly yours,

	/s/ BARACK FERRAZZANO
		KIRSCHBAUM & NAGELBERG LLP

	BARACK FERRAZZANO KIRSCHBAUM & NAGELBERG LLP

	(b)	Whether it is authorized to exercise corporate trust powers.

		The trustee is authorized to exercise corporate trust powers.

	WILMINGTON TRUST, NATIONAL ASSOCIATION

	By:	/s/ Michael H. Wass
	Name: Michael H. Wass
	Title: Vice President

	WILMINGTON TRUST, NATIONAL ASSOCIATION


Dated: October 28, 2022	By:	/s/ Michael H. Wass
	Name: Michael H. Wass
	Title: Vice President

ASSETS	Thousands of Dollars
Cash and balances due from depository institutions:		676,053
Securities:		5,734
Federal funds sold and securities purchased under agreement to resell:		0
Loans and leases held for sale:		0
Loans and leases net of unearned income, allowance:		67,670
Premises and fixed asset		23,935
Other real estate owned:		412
Investments in unconsolidated subsidiaries and associated companies:		0
Direct and indirect investments in real estate ventures:		0
Intangible assets:		0
Other assets:		65,657
Total Assets:		839,461

LIABILITIES		Thousands of Dollars
Deposits		11,317
Federal funds purchased and securities sold under agreements to repurchase		0
Other borrowed money:		0
Other Liabilities:		81,479
Total Liabilities		92,796

EQUITY CAPITAL		Thousands of Dollars
Common Stock		1,000
Surplus		527,260
Retained Earnings		218,675
Accumulated other comprehensive income		(270	)
Total Equity Capital		746,665
Total Liabilities and Equity Capital		839,461

BOX II SIGNATURE (See Instructions 1 and 3)
BOX II SIGNATURE (See Instructions 1 and 3)

			, 2022
			, 2022
			, 2022
	Signatures by Tendering Beneficial Owners	Date

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