QCR Holdings, Inc.

Second-quarter net income was $36 million, or $2.19 per diluted share, and management said this was a record quarterly GAAP EPS. Net interest income was $68 million, up $500,000 or 3% annualized from the first quarter. Non-interest income totaled $29 million, including $15 million from capital markets revenue and $6 million from wealth management. Non-interest expense was $53 million versus $52 million in the first quarter, and the efficiency ratio improved 310 basis points to 54.6%. Net charge-offs were $3.3 million, provision for credit losses was $4.7 million, and non-performing assets were $40 million, down $3.4 million sequentially. Tangible book value per share rose $2.17 or 15% annualized, tangible common equity to tangible assets was 10.71%, CET1 was 10.68%, and total risk-based capital was 14.13%. For guidance, QCR reaffirmed gross annualized loan growth of 10%-15% over the final two quarters of 2026, capital markets revenue guidance of $60 million-$70 million for the next four quarters, and said third-quarter NIM TEY is expected to be relatively static assuming no Fed rate changes. It lowered third-quarter non-interest expense guidance to $54 million-$57 million and expects an effective tax rate of 8%-10% for Q3 2026.

Todd Gipple said the quarter showed the strength of QCR’s diversified model, citing robust loan production, a rebound in capital markets, strong wealth management momentum, and disciplined expense control. He emphasized that the company continues to gain market share through its multi-charter, locally responsive banking model and said the digital transformation remains a key strategic priority, with the second core conversion completed in April. He also framed LIHTC as a core differentiator and said the business is becoming more capital-efficient as the company explores simpler offload structures and preserves flexibility for buybacks.

Nick Anderson highlighted $36 million of net income, $68 million of net interest income, and $29 million of non-interest income, along with a 54.6% efficiency ratio. He said NIM TEY fell 3 basis points from Q1 and came in below guidance, but improved late in the quarter; he also noted the company’s cost of funds has declined 83 basis points since 2024 versus a 61 basis point decline in earning asset yields. On capital, he pointed to $13.5 million returned in the quarter, about 150,000 shares repurchased, 675,000 shares repurchased since the program began, and nearly $56 million returned in total. He also cited strong capital ratios, including tangible common equity to tangible assets of 10.71% and CET1 of 10.68%, and said Q3 expenses are guided to $54 million-$57 million.

Analysts focused on the LIHTC offload strategy, buybacks, expense discipline, and whether capital markets revenue can ramp in the back half of the year. Management said Freddie Mac’s revised M-Deal process became much more complex and costly, so QCR is working with third parties on an alternative structure that would fully sell the loans, remove the first-loss B tranche, and be executed in early 2027. On buybacks, Todd said the company is pleased with repurchasing 4% of shares at a weighted average cost of around $83 and still has about 1.2 million shares available. On expenses, management said the 5% annual non-interest expense growth guardrail remains intact, with digital conversion benefits expected to build through 2027 and show more visibly in 2028. On M&A, Todd said the strike zone is very tight, but the company is increasingly open to conversations now that the core conversions are nearing completion.