906465--3/5/2010--QCR_HOLDINGS

related topics

{system, service, information}

{loss, insurance, financial}

{regulation, change, law}

{loan, real, estate}

{condition, economic, financial}

{competitive, industry, competition}

{product, market, service}

{stock, price, share}

{stock, price, operating}

{personnel, key, retain}

{tax, income, asset}

{cost, contract, operation}

{regulation, government, change}

Our business is concentrated in and dependent upon the continued growth and welfare of the Quad City, Cedar Rapids, and Rockford markets. Liquidity risks could affect operations and jeopardize our business, results of operations and financial condition. We face intense competition in all phases of our business from other banks and financial institutions. 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 are required to maintain capital to meet regulatory requirements, and if we fail to maintain sufficient capital, whether due to losses, an inability to raise additional capital or otherwise, our financial condition, liquidity and results of operations, as well as our ability to maintain regulatory compliance, would be adversely affected. Interest rates and other conditions impact our results of operations. We must effectively manage our credit risk. Commercial and industrial loans make up a large portion of our loan/lease portfolio. Our loan/lease portfolio has a significant concentration of commercial real estate loans, which involve risks specific to real estate value. Our allowance for loan/lease losses may prove to be insufficient to absorb potential losses in our loan/lease portfolio. Increases in FDIC insurance premiums may have a material adverse effect on the Company s earnings. We have a continuing need for technological change, and we may not have the resources to effectively implement new technology. System failure or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities. We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors. Government regulation can result in limitations on our operations. Failure to pay interest on our debt or dividends on our preferred stock may adversely impact our ability to pay common stock dividends. Declines in asset values may result in impairment charges and adversely affect the value of our investments, financial performance and capital. We cannot predict the effect on our operations of recent legislative and regulatory initiatives that were enacted in response to the ongoing financial crisis. Changes in future rules applicable to participants in the Capital Purchase Program could adversely affect our business, results of operations and financial condition.

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906465--3/5/2010--QCR_HOLDINGS_INC