QCR Holdings, Inc. Announces Net Income of $36.3 Million for the Second Quarter of 2026

QCR Holdings, Inc. Announces Net Income of $36.3 Million for the Second Quarter of 2026 Second Quarter 2026 Highlights

MOLINE, Ill., July 22, 2026 (GLOBE NEWSWIRE) -- QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced quarterly net income of $36.3 million and diluted EPS of $2.19 for the second quarter of 2026, compared to net income of $33.4 million and diluted EPS of $1.99 for the first quarter of 2026, and $29.0 million and $1.71 for the second quarter of 2025.

“We delivered strong net income and record GAAP EPS for the second quarter, demonstrating the ongoing momentum across our franchise. Adjusted EPS 1 also remained near record levels, exceeded only by the fourth quarter of 2025. These results were supported by substantial loan production, a rebound in capital markets revenue, higher net interest income despite significant LIHTC loan sales, and strong contributions from our wealth management business. Noninterest expenses also outperformed our guidance. Together, these results produced meaningful operating leverage and demonstrated the strength of our diversified business model,” said Todd Gipple, President and Chief Executive Officer.

“We also made important progress on several strategic priorities during the quarter, improving asset quality to the strongest levels in nearly seven years, completing our second core conversion, executing LIHTC offtake transactions that advanced our asset and capital-light strategy, and returning $13.5 million to shareholders through opportunistic share repurchases,” said Mr. Gipple.

Robust Loan Growth

In the second quarter of 2026, total loans grew $216.9 million, or 12% annualized, excluding LIHTC loan offtake transactions and the planned runoff of the m2 portfolio. The Company executed $443.6 million of LIHTC loan offtake transactions during the quarter, consisting of a Freddie Mac permanent loan securitization and a construction loan portfolio sale.

“We delivered strong loan growth fueled by solid production across both our LIHTC and traditional lending businesses, in line with our guidance. Our 7% annualized traditional loan growth, excluding the planned m2 portfolio runoff, reflects robust local client demand and continued strength across our markets,” said Mr. Gipple.

“With very strong pipelines and a healthy outlook for future originations, we expect increased lending activity to fully offset the near-term impact of LIHTC offtake transactions on net interest income. Over time, these transactions will allow us to expand our capital markets revenue opportunities. Accordingly, we are reaffirming our gross loan growth guidance of 10% to 15% annualized for the final two quarters of 2026,” said Mr. Gipple.

Significant Capital Markets and Wealth Management Revenue Growth

Noninterest income for the second quarter of 2026 was $29.4 million, up from $23.0 million in the first quarter of 2026. The Company generated $16.7 million of capital markets revenue from LIHTC loan production in the second quarter of 2026, representing a linked-quarter increase of 56% and a year-over-year increase of 69%. Capital markets revenue growth was partially offset by a $1.3 million loss from the Freddie Mac LIHTC securitization. Wealth management revenue totaled $5.8 million for the quarter, representing a 7% increase from the first quarter of 2026, reflecting strong market performance and continued new relationship and AUM growth.

“Our wealth management business continues to perform at a high level, delivering 7% revenue growth and 9% AUM growth during the quarter. We believe our investments in this business position us well to sustain this momentum and capture additional growth opportunities,” said Mr. Gipple.

“As expected, capital markets revenue increased sharply from a seasonally slower first quarter, supported by growth in our LIHTC lending platform. These results reflect the continued robust demand for affordable housing and the strength of our experienced team. We continue to create new relationships with some of the best LIHTC developers in the country while expanding our relationships with existing clients. We remain particularly excited about the momentum in our LIHTC business, as the outlook in this segment remains very strong, supported by an outstanding pipeline and favorable affordable housing fundamentals. As a result, we are reaffirming our guidance of $60 million to $70 million of capital markets revenue over the next four quarters,” said Mr. Gipple.

“As noted in prior quarters, Freddie Mac has significantly increased the complexity of its M-Series securitization program since our earlier transactions. While the underlying securities priced better than expected, higher transaction costs under the revised program drove the loss on this securitization. We are pursuing alternative loan sale structures for our permanent LIHTC loans that we believe will be less complex, faster to execute, and more economically attractive. These structures are also expected to allow for a complete sale of the underlying loans without retaining the first-loss B-Tranche, removing the loans from risk-based assets and more effectively freeing regulatory capital. We are targeting early 2027 for our first transaction under this revised structure,” said Mr. Gipple.

Strong Earning Asset Growth Offsets Impact of LIHTC Loan Sales

Net interest income for the second quarter of 2026 was $67.9 million, an increase of $0.5 million, or 3% annualized, from the first quarter of 2026. Average earning assets increased $46.3 million during the quarter, more than offsetting the impact of LIHTC offtake transactions and driving higher interest income.

Net interest margin (“NIM”) was 3.10% and NIM on a tax-equivalent yield (“TEY”) basis 1 was 3.55% for the second quarter, as compared to 3.13% and 3.58%, respectively for the prior quarter. Continued progress in lowering interest-bearing and time deposit costs, along with the accretive impact of the LIHTC offtake transactions, was more than offset by a shift toward higher-cost wholesale funding and lower loan yields. The majority of the reduction in loan yields was driven by lower nonaccrual interest recoveries and reduced loan discount accretion.

“Our NIM TEY 1 declined 3 basis points from the first quarter of 2026 and came in below our guidance range,” said Nick Anderson, Chief Financial Officer. “After early quarter pressure, NIM improved and stabilized in May and June, with June exceeding the quarterly average by 1 basis point. We continued to maintain deposit pricing discipline in a competitive environment, driving a further decline in our cost of deposits during the quarter. While lower loan discount accretion and nonaccrual interest recoveries pressured our loan yield, significant earning asset growth helped support net interest income as we executed on our LIHTC offtake transactions.”

“We are encouraged by the strength of our lending pipeline and consistent loan demand, which continue to support profitable growth opportunities across our footprint. Combined with our disciplined approach to deposit costs, this positive momentum supports our guidance for a relatively static third quarter NIM TEY 1, assuming no Federal Reserve rate changes,” said Mr. Anderson.

Core Deposits Normalize Following Exceptional First Quarter

Total core deposit activity in the second quarter of 2026 normalized from the exceptional first quarter performance, decreasing $323.8 million. The decline primarily reflected the Company’s intentional reduction of higher-cost correspondent and public fund balances, supported by liquidity generated from LIHTC offtake transactions and a steady increase in noninterest bearing deposits. Year-to-date, core deposits have increased $85 million, or 2% annualized.

The Company’s total deposits at the end of the second quarter were $7.4 billion, a decrease of 4.5% from the first quarter and includes a further reduction in non-core brokered deposits to just 2% of total deposits. “We remain focused on growing core deposits, optimizing our funding mix, and maintaining disciplined deposit pricing in a competitive environment. We also delivered our third consecutive quarter of noninterest bearing deposit growth, reflecting continued progress on a key strategic priority for our Company,” said Mr. Anderson.

Efficient Expense Structure Drives Operating Leverage

Noninterest expense for the second quarter of 2026 totaled $53.2 million, compared to $52.1 million for the first quarter of 2026. The $1.0 million linked-quarter increase primarily reflected higher salary and benefits associated with increased capital markets activity, as well as higher professional and data processing expense, related to the core conversion completed during the quarter. The increase in salary and benefits expense was partially offset by an $825 thousand linked-quarter decline in stock-based compensation expense, as most of this expense is recognized in the first quarter, and by higher deferred loan origination costs associated with strong loan growth.

“Stronger capital markets production drove higher variable compensation with digital transformation costs also contributing to the linked-quarter increase in noninterest expense. Even with these increases, expenses remained below our guided range, reflecting disciplined expense management and improving operating leverage,” said Mr. Anderson.

For the third quarter of 2026, the Company is lowering its noninterest expense guidance to be in the range of $54 million to $57 million, assuming capital markets revenue and loan growth are within the guidance ranges and includes the Company’s continued investments in digital transformation initiatives. “This outlook reflects our approach to expense management under our 9/6/5 strategic model, which is designed to keep annual noninterest expense growth below 5%, driving operating leverage, improving efficiency, and enhancing profitability,” added Mr. Anderson.

Continued Strong Asset Quality

Nonperforming assets (“NPAs”) totaled $39.5 million at the end of the second quarter of 2026, a decrease of $3.4 million from the prior quarter, which resulted in the NPA to total assets ratio improving by 4 basis points to 0.41%. The ratio of criticized loans to total loans and leases also improved to 1.91%, the lowest level since the fourth quarter of 2019.

The Company recorded a total provision for credit losses of $4.7 million during the second quarter, compared to $2.5 million in the first quarter, reflecting loan growth in the current quarter and the prior quarter’s benefit from a reversal of credit loss expense related to loans transferred to held for sale. Net charge-offs were $3.3 million during the second quarter of 2026, a decline of $0.6 million from the prior quarter, as the Company continues to benefit from the positive trends in charge-off activity from the winddown of the m2 portfolio. The allowance for credit losses to total loans held for investment declined by 2 basis points from the prior quarter, to 1.24%.

Earnings Growth Drives TBV Per Share 1 Expansion

The Company’s TBV per share¹ increased by $2.17, or 15% annualized, during the second quarter of 2026. This growth was driven by strong earnings during the quarter partially offset by share repurchases.

As of June 30, 2026, the tangible common equity to tangible assets ratio¹ increased 40 basis points to 10.71%, the common equity tier 1 ratio increased 14 basis points to 10.68%, and the total risk-based capital ratio increased 13 basis points to 14.13%. These quarterly changes reflect the combined impact of strong earnings, loan sales, and share repurchases during the quarter. By comparison, these ratios were 10.31%, 10.54%, and 14.00%, respectively, as of March 31, 2026.

Continued Opportunistic Share Repurchases

The Company continued share repurchases during the second quarter consistent with capital allocation priorities, returning approximately $13.5 million of capital to shareholders at an attractive multiple relative to tangible book value¹. Since the Company began repurchasing shares in 2025, it has purchased over 675 thousand shares, approximately 4% of total shares outstanding, returning $55.9 million of capital to shareholders. The share repurchase program authorized in October 2025 enhances the Company’s capital allocation flexibility and allows for organic growth, shareholder returns, and capital strength while reinforcing confidence in the Company’s long-term outlook.

Conference Call Details

The Company will host an earnings call/webcast tomorrow, July 23, 2026, at 10:00 a.m. Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through July 30, 2026. The replay access information is 855-669-9658 (international 412-317-0088); access code 5347347. A webcast of the teleconference can be accessed on the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us

QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Guaranty Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. The Company has 35 locations in Iowa, Missouri, and Illinois. As of June 30, 2026, the Company had $9.5 billion in assets, $7.0 billion in loans and $7.4 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

Endnotes

1Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these adjusted measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

Special Note Concerning Forward-Looking Statements. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

Forward-looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by forward-looking statements. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, but are not limited to: (i) the strength of the local, state, national and international economies and financial markets, including effects of inflationary pressures, the threat or implementation of tariffs, immigration enforcement and changes in foreign policy; (ii) effects on the U.S. economy resulting from actions taken by federal and local governments, including changes in local, state and federal laws and regulations, the threat or implementation of tariffs, immigration enforcement and changes in foreign policy; (iii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, military conflicts, acts of war or threats thereof (including the Russian invasion of Ukraine ongoing conflicts in the Middle East, and other adverse external events that can increase levels of political and economic unpredictability, contribute to rising energy and commodity prices, affect global supply chains, increase the volatility of financial markets, and other matters beyond our control, and the response of the local, state and national governments to any such adverse external events; (iv) new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB, the Securities and Exchange Commission (the “SEC”) or the PCAOB; (v) the imposition of tariffs or other governmental policies impacting the value of products produced by the Company’s commercial borrowers; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions, private credit firms, fintech companies, and digital asset service providers and the inability to attract new customers; (vii) rapid technological changes implemented by us and our third-party vendors, including the development and implementation of tools incorporating artificial intelligence; (viii) unexpected results of acquisitions, including failure to realize the anticipated benefits of the acquisitions and the possibility that transaction and integration costs may be greater than anticipated; (ix) the loss of key executives and employees, talent shortages and employee turnover; (x) changes in consumer spending; (xi) unexpected outcomes and costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company; (xii) the economic impact on the Company and its customers of climate change, natural disasters and exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates; (xiv) credit risk and risks from concentrations (by type of borrower, geographic area, collateral and industry) within our loan portfolio and large loans to certain borrowers (including CRE loans); (xv) the overall health of the local and national real estate market; (xvi) the ability to maintain an adequate level of allowance for credit losses on loans; (xvii) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure; (xviii) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds; (xix) the level of non-performing assets on our balance sheet; (xx) interruptions involving our information technology and communications systems or third-party servicers; (xxi) the occurrence of fraudulent activity, breaches or failures of the Company’s or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (xxii) emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business or customers; (xxiii) changes in the interest rates and repayment rates of the Company’s assets; (xxiv) the effectiveness of the Company’s risk management framework; and (xxv) the ability of the Company to manage the risks associated with the foregoing. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the SEC.

Contact:

Doug Neumann

VP, Investor Relations

(309) 743-7753

dneumann@qcrh.com

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