QCR Holdings, Inc. (NasdaqGM:QCRH) executed the non-binding letter of intent to acquire Guaranty Federal Bancshares, Inc. (NasdaqGM:GFED) for approximately $150 million on September 9, 2021. QCR Holdings, Inc. signed a definitive agreement to acquire Guaranty Federal Bancshares, Inc. for approximately $150 million on November 9, 2021. Stockholders of Guaranty will have the right to receive for each share of Guaranty common stock owned, at the election of each stockholder, and subject to proration, (i) $30.50 in cash, (ii) 0.58775 shares of QCR Holdings common stock, or (iii) mixed consideration of $6.10 in cash and 0.4702 shares of QCR Holdings common stock, with total consideration to consist of approximately 80% stock and 20% cash. Based upon the $59.99 closing price of QCR Holdings common stock as of November 5, 2021, the transaction is valued at approximately $151.6 million. Guaranty's shareholders shall have until March 25, 2022 to elect the form of consideration to receive for the shares of Guaranty common stock in connection with the deal. Upon completion of the merger, SFC Bank President and Chief Executive Officer Monte McNew will serve as Chief Executive Officer of the combined bank, while Guaranty Bank President and Chief Executive Officer Shaun Burke will serve as President. As of February 17, 2022, in connection with the merger, QCR Holdings' board of directors increased the number of directors constituting the Board from 11 to 12 and appointed John F. Griesemer as a Class III director to fill the resultant vacancy, with such appointment effective on the closing date of the merger as part of the agreement, if terminated Guaranty Federal shall pay a termination of $4.7 million to QCR Holdings. As a result of the transaction, the Guaranty team will be joining the QCR family.

The transaction is subject to regulatory approvals, approval by Guaranty's stockholders, the Registration Statement shall have become effective under the Securities Act, Stock Exchange Listing, tax opinion and certain customary closing conditions. The transaction is unanimously approved by the Boards of Directors of both companies. As of January 28, 2022, the shareholders meeting of Guaranty shall be held on March 21, 2022. As of March 21, 2022, the shareholders of Guaranty Federal Bancshares have approved the transaction. As of March 23, 2022, QCR Holdings has received approval of the Merger from the Board of Governors of the Federal Reserve System and approval of the Bank Merger from the Missouri Division of Finance. The approval of the Board of Governors of the Federal Reserve System was contingent on QCR Holdings receiving all other regulatory approvals, which have now been received. The transaction is expected to close in the first or second quarter of 2022. As of January 20, 2022, the transaction is expected to be completed in early second quarter of 2022. As of March 11, 2022, the transaction is expected to close in second quarter of 2022. As of March 23, 2022, the transaction is expected to close on April 1, 2022. Excluding one-time merger-related expenses, QCR Holdings expects the transaction to be approximately 13% accretive to earnings per share in 2023, the first full year of combined operations. QCR Holdings also expects to incur tangible book value per share dilution of approximately 5% upon closing of the transaction, with a tangible book value per share dilution earn back period of approximately 2.75 years.

Piper Sandler & Co. served as financial advisor and provided a fairness opinion to QCR Holdings and Patrick Koster, Eric Kalinowski, Charlie Martin, Will Park Adam, Silverstone and Abdul R. Mitha of Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsels. Keefe, Bruyette & Woods, Inc. served as financial advisor with a percentage fee of 1.35% and provided a fairness opinion with a fee of $0.5 million to Guaranty Bancshares and Vijay S. Sekhon, Eric G. Hoffman, Stephen M. Fronk, Rachelle Soderstrom, Ash Nagdev, Christian Brause and Michael D. Lewis of Sidley Austin, LLP served as legal counsels to Guaranty. Georgeson LLC acted as the information agent to Guaranty and will receive a fee of $15,000 for its services.

QCR Holdings, Inc. (NasdaqGM:QCRH) completed the acquisition of Guaranty Federal Bancshares, Inc. (NasdaqGM:GFED) on April 1, 2022. As of May 9, 2022, QCR Holdings funded the cash portion of the purchase price through operating cash.