Key Highlights

  • Diluted earnings reached a record USD 2.21 per share, versus a USD 2.09 estimate.
  • Revenue was USD 99.2 million, below the USD 109.0 million consensus estimate.
  • Net interest margin on a tax-equivalent basis rose 3 bps to 3.58%.
  • Nonperforming assets fell to 0.39% of total assets, the lowest since 2024.

QCR Holdings (NASDAQ:QCRH) reported third quarter 2026 results on Oct. 20, with record diluted earnings of USD 2.21 per share on net income of USD 36.4 million. Earnings per share beat the USD 2.09 consensus estimate and compared with USD 2.19 in the second quarter and USD 2.16 a year earlier. Revenue of USD 99.2 million, the sum of net interest income and noninterest income, fell short of the USD 109.0 million estimate.

QCR is a multi-bank holding company based in Moline, Ill., operating four subsidiary banks across the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines and Springfield markets. It reported USD 9.8 billion in assets at quarter end.

Earnings Beat Meets a Revenue Gap

Net income was nearly flat, at USD 36.4 million versus USD 36.3 million in the second quarter and USD 36.7 million a year earlier. Per-share earnings rose because the company repurchased shares, including USD 9.5 million, or 94,861 shares, in the quarter. Return on average assets was 1.52%.

The revenue shortfall sits mainly in the total. Net interest income was USD 68.7 million, up USD 0.8 million from the second quarter, and noninterest income was USD 30.5 million versus USD 29.4 million. Management said several capital markets transactions slated to close in the third quarter slid into the fourth.

Capital Markets and Margin Detail

Capital markets revenue was USD 16.9 million, up 10% from the second quarter, which had absorbed a USD 1.3 million loss on a Freddie Mac securitization of low-income housing tax credit loans. Wealth management revenue was USD 5.7 million, up 12% from a year earlier. The company guides capital markets revenue to USD 18 million to USD 20 million in the fourth quarter and USD 60 million to USD 70 million over the next four quarters.

The net interest margin on a tax-equivalent basis was 3.58%, up from 3.55%, and the unadjusted margin was 3.12% versus 3.10%. The chief financial officer said the Federal Reserve's September rate increase adds slightly to the margin in the near term, but that deposit competition offsets most of it, so the company guides to a relatively static fourth quarter margin.

Noninterest expense was USD 54.7 million versus USD 53.2 million in the second quarter, with costs tied to a core system conversion completed in early October. The efficiency ratio was 55.2%, and fourth quarter expense guidance is USD 54 million to USD 57 million.

Loans, Deposits and Credit

Total loans rose USD 167.0 million, or 9% annualized, to USD 7.2 billion. Excluding planned runoff in the m2 Equipment Finance portfolio, growth was USD 189.7 million, or 11% annualized. Chief executive Todd Gipple reaffirmed fourth quarter gross loan growth guidance of 10% to 15% annualized.

Deposits fell to USD 7.2 billion from USD 7.4 billion, with correspondent balances leaving during the quarter. Management said those balances have since returned. Noninterest-bearing deposits grew for a fourth straight quarter.

Nonperforming assets declined USD 1.5 million to USD 38.0 million, and criticized loans fell USD 13.8 million to USD 120.4 million, or 1.67% of loans. The provision was USD 4.5 million, net charge-offs were USD 3.1 million, the lowest of the year, and the allowance was 1.23% of loans. Tangible book value per share rose to USD 61.79, up 11% year over year.

Guidance Markers to Follow

Several items frame the fourth quarter: whether capital markets deals that slid out of the third quarter close within the USD 18 million to USD 20 million guidance, how loan growth compares with the 10% to 15% range, and whether the margin stays near 3.58%. Deposit balances after the correspondent outflows and the tangible common equity ratio, which fell to 10.43%, also remain on the watch list.