Greetings and welcome to the QCR Holdings Inc Conference Call to discuss the acquisition of Guaranty Federal Bancshares. This morning, the company distributed a press release and slide presentation detailing the proposed acquisition. If there is anyone on the call who has not received copies, you may access them in the investor relations section of the company's website. With us today from management are Larry Helling, CEO, and Todd Gipple, President, COO, and CFO. Management will provide a brief overview of the acquisition, and then we will open up the call to questions from Analysts. Before we begin, I would like to remind everyone that some of the information management will be providing today falls under the guidelines of forward-looking statements as defined by the Securities and Exchange Commission. As part of these guidelines, any statements made during this call concerning the company's hopes, beliefs, expectations, and predictions of the future are forward-looking statements, and actual results could differ materially from those projected. Additional information on these factors is included in the company's SEC filings, which are available on the company's website. As a reminder, this conference is being recorded and will be available for replay through November 16th, 2021, starting this afternoon approximately one hour after the completion of this call. It will also be accessible on the company's website. At this time, I will now turn the call over to Mr. Larry Helling at QCR Holdings. Please go ahead. Thank you, Operator. Welcome, ladies and gentlemen, and thanks for taking the time to join us today. I will start the call with a brief overview of the acquisition and what we believe is a compelling strategic fit to expand our presence in the Southwest Missouri market. Then Todd will walk us through the financial details of the deal. Over the years, we have grown our market reach and our family of Autonomous Local Banking charters through organic growth and strategic acquisitions. Our goal to increase scale in the markets we serve has enabled us to improve our operating efficiency and significantly enhance our earnings power. A recent example was our entry into the Springfield, Missouri market with our 2018 acquisition of SFC Bank. That transaction enabled us to gain a solid position in a vibrant market that was similar to our existing MSAs, those with favorable economic and demographic trends and where relationship-based community banking is valued by clients. Today, we are excited to be taking the next step in that strategy by joining forces with Guaranty Bank and significantly building upon our presence in this region. Because of our shared core values, culture, and business strategy, Guaranty Bank has been on our Radar Screen ever since we acquired SFC Bank. We are very pleased to be welcoming Sean Burke and his team to QCR Holdings. For us, it's about finding a strong cultural fit in the right market, and we believe we have done just that. Guaranty Bank has a deep-rooted and prominent brand, a long history of profitable growth, and a talented team of bankers. Guaranty is also known for its commitment to exceptional client service and relationship banking, including outstanding community support. In addition, the management team has been committed to developing their employees and supporting their career development. We share these same values, making the combination a natural fit. Blending the talent and expertise from both banks will enable us to serve our combined client base more effectively, accelerate our earnings growth, and improve our shareholder returns. In addition, we remain bullish on the Southwest Missouri market. This region has a growing workforce and a diverse economy, including a strong presence of companies that operate in the healthcare, manufacturing, transportation, and education sectors. Major corporate employers include 3M, Kraft Foods, Expedia, Freeman Health Systems, T-Mobile, and AT&T, and the market is headquarters to Bass Pro Shops, O'Reilly Auto Parts, and Jack Henry & Associates. It's also home to many small to medium-sized businesses. These companies drive a significant part of the economy and are ideal clients for our relationship-based banking model. To summarize, we are very excited about this combination for a number of reasons. First, our deposit market share will grow to be number four in the market, creating the second largest locally managed bank in the community. Second, this will create the opportunity for accelerated growth in the market by offering our niche products and services to an expanded client base. Third, we plan to reward our shareholders by achieving improved profitability metrics, which Todd will discuss in detail. Finally, the cultural fit and shared core values between the two organizations give us confidence in a smooth integration and ongoing success in the pursuit of our strategic goals. With that, I will turn the call over to Todd to provide further details on the proposed transaction. Thank you, Larry. We have provided information on the transaction in the presentation that is posted on our website, so I won't go into all the details in my prepared remarks, but I would like to point out some key highlights. As Larry noted, Guaranty Bank is led by Sean Burke. Sean has been with Guaranty for more than 17 years and has guided the bank through a period of strong growth and increased profitability. In the past five years, assets have grown at an annual rate of over 11% to $1.2 billion today. Loans have grown more than 8% per year and deposits at a strong 14% annual rate. During the same period of Balance Sheet growth, earnings growth has been impressive as well, with net income growing by 15% per year, demonstrating solid operating leverage in the company's business model. Asset quality is also strong as NPAs have declined from 2% of total assets in 2016 to 91 basis points today. Guaranty Bank currently has 16 banking locations and 225 employees in Springfield and the Southwest Missouri area, significantly increasing our presence in the region. The combined bank charter will have approximately $2 billion in assets, $1.5 billion in loans, and $1.6 billion in deposits, ranking it number four in deposit market share in the Springfield market, a meaningful improvement from SFC Bank's number seven position on a standalone basis. Similar to SFC Bank, Guaranty Bank focuses on serving commercial clients, offering traditional Commercial Banking services and products. As such, its loan portfolio has a similar profile to SFC Bank, with approximately 83% of its portfolio consisting of CRE, C&I, and Construction Loans, with the remainder primarily in One-to-four Family Residential. As Larry mentioned, we are very excited to be able to introduce our SFC lending products and services, as well as our Wealth Management Services, to Guaranty's existing client base, as we believe it will serve as a strong catalyst for further growth, both in earnings and shareholder value. Guaranty has a very attractive $1 billion deposit franchise, with nearly 100% consisting of Core Deposits, of which $270 million, or 27%, are non-interest-bearing. In the September quarter, the bank's average cost of total deposits was 34 basis points, which benefited their reported net interest margin of 3.30%. The financial impact of the acquisition on our pro forma consolidated results will be quite attractive. We anticipate the transaction to be 13% accretive to earnings per share in the 1st full year of combined operations. While we expect to incur tangible book value dilution of approximately 5% at closing, we expect a relatively quick earnback period of 2.75 years. We are forecasting a post-closing consolidated tangible common equity to tangible assets ratio of approximately 9.3%, a total risk-based capital ratio of 14.1%, and other pro forma regulatory capital ratios in excess of well-capitalized thresholds. Additionally, we estimate that this transaction will generate an internal rate of return of 20.4%, which is above our internal targets. We also expect that the transaction will be accretive to our already strong year-to-date ROAA of 1.66%. We have identified cost savings and efficiency measures of approximately $7.6 million per year, representing 24.5% of Guaranty Federal's consolidated non-interest expense. Much of the savings will be realized in areas of redundant public company reporting and other duplicative costs, as well as operational back-office support that will be transitioned to our QCR Holdings centralized group operations teams. Finally, we expect to incur $13.4 million in pre-tax one-time integration costs. There are additional details on key transaction assumptions on slide 10 in the presentation. The transaction is valued at $152 million and will consist of 80% stock and 20% cash consideration. The combined bank will operate under the Guaranty Bank name, given its strong brand recognition in Springfield and Southwest Missouri. Current SFC Bank President and CEO, Monte McNew, will serve as CEO of the resulting combined bank, while Sean Burke will serve as its president. We expect the current board members of both SFC Bank and Guaranty Bank to serve on the board of the resulting combined bank and are planning to have one Guaranty Federal Bancshares board member join our QCR Holdings board. We expect to close the transaction in the 1st quarter or early 2nd quarter of 2022, subject to Customary Regulatory approvals and approval by Guaranty Federal Bancshares shareholders. To conclude, I want to reiterate Larry's comments regarding how pleased we are to welcome Guaranty Bank into the QCR family. By partnering with Guaranty Bank's great team, we have the opportunity to further expand in the thriving Southwest Missouri market. We are adding a highly regarded, profitable, and growing institution with a shared client service culture and core values and a very strong commitment to relationship-based community banking. Combining SFC Bank and Guaranty Bank will position us well to continue growing our Southwest Missouri franchise while creating significant value for our shareholders in the years ahead. With that, let's open up the call for your questions. Operator, we're ready for our first question. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question today will be from Nathan Race with Piper Sandler. Please go ahead. Yep. Hi, guys. Good morning. Congrats on the announcement. Morning, Nathan. Thank you. Question just on the pro forma Balance Sheet composition. Obviously, with Guaranty Bank's Commercial Real Estate concentration being a little bit above legacy QCR, curious how you guys are kind of thinking about the potential for some securitizations that have been discussed in the past subsequent to closing. Yeah, Nathan. As you know, we talked about some off-take in the form of securitization. This probably does not impact our thought process too much. The Commercial Real Estate book that they have there, I think we like that. We feel comfortable with the credit risk, and we would likely continue to hold that on the Balance Sheet. Okay, got it. Changing gears a little bit, this deal, it'll bring down your Capital Ratios a bit, but it looks like they'll still be pretty robust on a pro forma basis. I believe, Larry, you mentioned on the last conference call, M&A discussions have increased, obviously, as reflected in today's announcement. Just curious kind of what you've seen in terms of additional M&A opportunities and if you guys would be willing to entertain other M&A scenarios as Guaranty is integrated over the next several quarters. Yeah, certainly, this will be a lot of work for our people, but we are not out of the M&A market at this point. If the right opportunity came up, we certainly are in a capital position and a liquidity position to be able to execute on something. If the right strategic fit came along, we would still entertain that. As you know, the markets become a little more active, and if the right long-term fit came along, we would still entertain that. Okay, got it. One last one just on the combined interest rate sensitivity position. Todd, I believe you guys are in a pretty asset-sensitive position coming out of the most recent quarter. Just curious to what degree, if any, QCR kind of changes that complexion going forward. Sure, Nathan. Actually, it's even more helpful to our asset sensitivity positions. Very well for rates up. These two Balance Sheets fit exceptionally well together. There is some excess liquidity at GFED that's going to be put to work quite quickly post-closing, but we really like the branch footprint, the Core Deposits, the pricing on the retail Core Deposits. It's a very strong Core Deposit franchise, and as rates go up, that will become even more valuable. Got it. Makes sense. I appreciate you guys taking the questions. Congrats again. Thanks, Nate. Thank you, Nate. The next question is from Jeff Rulis from D.A. Davidson. Please go ahead. Morning, Jeff. Good morning. Morning, Jeff. Larry, you mentioned you kind of had your eye on this one for some time, and my guess is that that suggests more of a negotiated transaction. Maybe that's question one to confirm that, but also just the 2nd piece is why are they selling, or what was the timing on their end that led to the deal? Thanks. Yeah. Certainly, Jeff, you know that we do not necessarily control what the seller is doing here, but certainly, a meaningful part of this was the liquidity that we could offer to their shareholders and the ability to monetize if their shareholders wanted to because of our trading volumes and those kind of things. I think they also saw someone, because of our Autonomous Charter Model, that was a good strategic fit and that they could be proud to hitch their wagons to. We feel like by combining the two teams and the two footprints, it was just a really natural combination. You are right, we have been—Jeff, sorry, we had a connection problem there. We were talking about why GFED was a fit and what is the right timing on this. My standard line with our employees here is just because we're ready to buy doesn't mean that the seller's ready to sell, but we've been positioning ourselves for three years now since we did our last M&A transaction to be ready for this one. From a capital and earnings standpoint, you know how we performed over the last few years, and this just seemed like the right fit at the right time. I think their shareholders will be happy and proud to link up with us. It was a negotiated transaction, but certainly one that we feel good about, and I think their shareholders will feel good about. Thanks, Larry. Todd, you mentioned back in 2016, sort of NPAs had peaked. What was the source of some of those problem loans that were on the books? Yeah, I think in a couple of cases, CRE and a little bit of development lending that has been sold off. We did a very rigorous deep dive in looking at the portfolio, looked at any and all loans over $2 million, looked at anything with any significant credit risk associated, and feel very good about the credit mark that we've implied here. Feel very good about the portfolio going forward. It certainly helps us that we're already in the market at SFC, and certainly, Monty was able to help us take a look at some of the local credit here in addition to our other team. Jeff, I'd add that the team of people that's led us through the credit review and due diligence and helped us set the credit mark is really the same people we've been leaning on for all of our past acquisitions. We feel really comfortable that we're going to land in the right space because they've done it before for us, and we felt good about the credit mark. Thanks. Last one, just housekeeping, Todd, do you have a Goodwill estimate, and do you expect a CECL sort of date to like a double count as you bring that in through the provision line? Yeah. Actually, we feel pretty good about where we've landed in terms of the overall metrics that are in the deck. The Goodwill mark is not overly significant, while we are taking a 5% TBV dilution upfront on both the crossover and simple methods. We're getting that back in around two and three-quarter years, so we feel very good about that. Overall, feel very good about the marks we've taken. We are going to have that double count, about $10 million in Day two CECL to bring that portfolio on, but have modeled everything under CECL. GFED was not a CECL adopter, but fortunately, had some metrics that we could use to model it over and map it over to the SFC portfolio under CECL. That all went pretty smoothly. Appreciate it. Thanks. You bet. Thanks, Jeff. Thanks, Jeff. The next question will be from Damon DelMonte with KBW. Please go ahead. Hey, good morning, guys. Congrats on what appears to be a pretty nice transaction for you. Just a quick question on the kind of when we go to model this in. Todd, you're saying late first quarter, possibly early 2nd quarter for a closing? Correct. Our expectation would be March or April sometime. Yes. Okay. When would you expect to do a conversion? Yeah. Damon, great question. We historically have been pretty deliberate about doing that. For example, when we acquired here in Springfield, SFC, we ran on their core for 13 months before conversion. When we acquired in Des Moines, we actually ran it for 25 months. Because of our multi-charter structure and the Group Operations Team supporting all the charters, we can actually run dual core very efficiently and effectively for a while. It may be a while. It will be sometime in 2022, of course, when we get these linked up, but I would say probably. Apologies to Damon and everyone else on the call. We actually have gotten dropped twice on a landline, not a mobile, but now we're going to a mobile device. Apologize for the problems on connectivity. I was in the middle of my answer to Damon on conversion. We'll likely have both banks synced up within 30-60 days after closing. We do have the capability of running them separately on independent cores for a bit, again, because of the group operations structure we have and can support that quite well. We don't anticipate any client disruption. Got it. Am I still live? Yes. Yes. Oh, okay. Okay. Okay. Great. Just as a follow-up to that, the cost savings of 24.5% are kind of on the low side of what we see for most recent deals. Is that attributable to what you just described with the prolonged time to an actual conversion because you're going to be running the Parallel Systems? Yeah. Damon, I think it's a little bit more just our nature. You've known us for quite some time. Many on the call have. We tend to take very conservative estimates with respect to things like this. We're at 24.5% of their total non-interest expense. It's really going to come in five buckets: public company reporting, of course, other duplicative costs, significant operational support moving to group operations, which we already have in place here for the Springfield charter, several contractual redundancies in IT and service contracts, including Core Systems, and then a little bit of branch overlap. What I would tell you, Damon, is when we have estimates that are in a range, and most of these things are, we would pick the lower number on the range, and we intend to overdeliver on that. I think if you looked at a couple of slides in our deck, on slide deck 24 and 25, we're showing you what we told the market we would do in 2016 in Des Moines and 2018 here in Springfield and how we've outperformed that guidance. It is probably more to do with us being conservative versus anything else. That's great, Caller. I appreciate that. That's all that I had. Thank you very much. Thanks, Damon. Thanks, Damon. The next question will come from Daniel Tamayo from Raymond James. Please go ahead. Good morning, everyone. Congratulations on the deal. Good morning. Yeah. First, maybe on the margin, it looks like Guaranty runs a little bit lower margin, core margin than what you guys are running. But they do have—you talked about 100% Core Deposits, but there is a pretty good amount of CD balances there. Just wanted to see what your thoughts on those CD balances were going forward and then kind of how that impacts what you think the core margin is going to look like next year. Sure. Great point. We certainly expect those CD balances to start running down and rolling off and repricing favorably given the rate environment today. Just like we've been able to take advantage of that with our legacy charters, we would expect the same result here with Guaranty's Balance Sheet. Again, just at a very high level, these two Balance Sheets fit very well together. We do expect to see some continued improvement in margin on a merged bank basis, actually a fairly significant one, and feel very good about the Core Deposits that they do have: 27% non-interest bearing, fairly low-priced deposits, again, outside of that CD portfolio. We'll be looking for that to roll off and really burn down to lower rates over the next 12 months. Thanks for that detail. Would you say that the improvement in NIM on a combined basis is—how does that compare to your thoughts? Apply to the combination. I'm sorry, Daniel, you kind of cut out there at the end. I'm sorry. Just curious how the NIM path, the core NIM path, compares to your expectations for that prior to the combination. Gotcha. Our prior guidance on static and maybe a little bit down. I think that this Balance Sheet will help us protect against that a bit more in 2022, actually. Okay. We think it will help us have a more stable, more static margin considering the very Large Core Deposit portfolio that we believe would perform well on rates up. Daniel, they also have some excess liquidity, and we feel like we've got the ability to deploy that, which will also help our margin as we go forward. All right. Terrific. And then on the fee income side, you talked about some synergies, not modeled for, but perhaps some opportunities to grow the Wealth Management business, which Guaranty Federal really did not have. Maybe you can talk about that and any other fee income opportunities you might see, including the LIHTC business. I'm not sure if that would be impacted at all by this deal. Thanks. Yeah. Great question. I would note that our merger modeling and our metrics do not include any of those revenue synergies, but we certainly do expect some enhanced traditional business in Commercial Banking and Treasury Management. We do expect some additional traction there with the existing client base at Guaranty Bank. Our very potent niche businesses, especially Equipment Finance, Wealth Management, and Correspondent Banking. Similarly, we would have some solid expectations to get some enhanced revenue from those three businesses that are deployed here in Southwest Missouri and actually feel like all three of them will benefit from this acquisition. We have not modeled that, but certainly expect that to happen for us in the future and provide even better shareholder value from the acquisition. Okay. The LIHTC business, that would be unchanged. Yeah. It could have a modest positive impact on the LIHTC business. Certainly, there's some active parties in this market that are in the LIHTC space, so it certainly will be a nice little lift, but we probably will maintain our guidance on the LIHTC and the Swap Guidance as we go forward. Okay. Great. That's all I have. Thanks, guys. Thank you. The next question will come from Brian Martin from Janney. Please go ahead. Hey, guys. Good morning. Congratulations. Morning, Brian. Morning, Brian. Hey, just Todd or Larry, just back to the last question on the revenue part for a moment. Would you say that is the biggest opportunity for revenue enhancements, which I understand aren't factored in today? Is it on the wealth side or the fee income side? Is that kind of how we should think about it here? I know you talked about the opportunities on the margin and other areas there, but just kind of making clear what are the biggest opportunities on the revenue side. Sure. Yeah. I think really the traditional banking business and Commercial Banking and Treasury Management will provide some immediate upside for us. If you look at our three more niche businesses that we're very happy to have, Monty has been working on adding Wealth Management to the charter here in Springfield and is very close to having some of that put together. The opportunities there are far greater considering the combined bank size and branch footprint and multiple geographies, multiple communities. We are very happy about this for a number of reasons, but certainly Wealth Management and getting it installed here and having it be a big part of the combined bank here in Springfield would be a very significant upside longer term. Gotcha. Okay. That's helpful. Just the part about the conversion, Todd, I guess, depending on how you guys do it, when would you expect to have your recognition of the 24.5%? Kind of a clean quarter from an expense standpoint, when should we anticipate that being the case based on how you're thinking about the conversion here today? Sure. Great question. Actually, it's modeled in to be at 100% cost saves full year 2023. I'd like to think that very early in 2023, so maybe 1st or 2nd quarter, we'd be all the way there. That would give us roughly 12 months after closing the transaction that would be all the way there. Some of the things are easy to do right away, of course. Some take a little more time. Some of the bigger issues we think will be flushed out in the 1st couple of quarters. Gotcha. Okay. Just the last two for me was does this change, I guess, how does this impact your growth trajectory on the loan side? Does it accelerate it, maintain it? I guess if you guys kind of think about how well you've done on the loan side, the growth side, I guess maybe just talk about what this transaction would do to that growth rate outlook. Yeah. I think it'll make us consistent in what our growth path has been. Certainly, it will provide a better mix of core funding as we go forward. We like what that does for us from a potential margin and interest rate risk standpoint. We feel good about that. I think it'll continue and probably increase the opportunity for us to continue our growth trajectory that we've been on. Okay. Gotcha. Okay. Todd, you mentioned the benefit to ROA of a standalone company. I guess, can you just talk about how you're thinking about the benefit from the transaction as far as what it does to ROA perspectively? Sure. For a long time, we've said that we had really four issues with any prospective M&A, and having better than 10% EPS accretion was a requirement for us. We're at 13% here. Obviously, less than three-year earned back, we're at 2.75. Greater than 20% internal rate of return, we're a little over 20% here. We'd always mentioned that we want M&A to be accretive to ROAA. That's become a pretty high bar for us lately. We're at 166 basis points ROAA so far this year. We do expect this to be further accretive to ROAA. It will come in the form of the significant fit between the two Balance Sheets and being able to put close to $150 million of excess liquidity at Guaranty to work nearly immediately. Some of the other benefits that the Balance Sheet provides are in terms of pricing and margin improvement. Of course, the cost saves will contribute to that. We are very optimistic that this will result in a combined bank franchise here that can make over 166 basis points ROA once everything's accomplished. Okay. I appreciate the call, guys. Congrats again. Thanks. Thanks, Brian. Thanks, Brian. Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Larry Helling for any closing remarks. I'd like to thank all of you for joining our call today. As you can tell, we are very excited about this combination and look forward to speaking with you all about it again over the following days and weeks. Have a great day, everyone. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.