QCR Holdings Sets Fourth-Quarter NIM as Margin Expands

The Tip Desk · November 8, 2026 · 4 min read

Net interest income rose to $68.7 million as tax-equivalent NIM widened 3 bps to 3.58% and diluted EPS reached a record $2.21.

QCR Holdings, Inc. (QCRH), a relationship-driven multi-bank holding company in the Quad Cities, Cedar Rapids, Des Moines and Springfield markets, reported third-quarter 2026 net income of $36.4 million, or $2.21 a share, a record diluted result, versus $36.3 million and $2.19 in the second quarter. Return on average assets was 1.52%.

Net interest income was $68.7 million, up $0.8 million, or 5% annualized, from the second quarter. Tax-equivalent net interest margin expanded 3 basis points to 3.58%, with NIM at 3.12%. The company attributed the linked-quarter increase to disciplined funding costs and higher average noninterest-bearing deposits. Average earning assets declined $44.5 million after second-quarter LIHTC offtakes, with third-quarter loan and investment growth only partially offsetting that reduction.

Chief Financial Officer Nick Anderson said the margin expansion exceeded the company’s guidance. He said the Federal Reserve’s September rate increase is expected to be slightly accretive to NIM in the near term as variable-rate assets and new loan and investment growth reprice faster than deposits, with the benefit dependent on deposit repricing, customer behavior and the yield-curve shape. Assuming no additional Federal Reserve rate changes, the company is guiding to a relatively static fourth-quarter NIM TEY.

Gross loan growth excluding planned m2 Equipment Finance runoff was 11% annualized, or $189.7 million. Total loans rose $167.0 million, or 9% annualized, to $7.2 billion, remaining consistent with a year earlier after $730.0 million of LIHTC sales and securitizations and $105.6 million of m2 runoff. President and Chief Executive Officer Todd Gipple said the company is reaffirming gross loan growth guidance of 10% to 15% annualized for the fourth quarter.

Noninterest income was $30.5 million. Capital markets revenue was $16.9 million, up 10% on a linked-quarter basis from $15.4 million, a quarter that included a $1.3 million loss from a Freddie Mac LIHTC securitization. Wealth management revenue was $5.7 million, up 12% year-over-year. Gipple said several transactions expected to close in the third quarter shifted into the fourth and that the company is reaffirming $60 million to $70 million of capital markets revenue over the next four quarters, including an expected $18 million to $20 million in the fourth quarter.

Noninterest expense was $54.7 million, compared with $53.2 million in the second quarter. The company cited occupancy and equipment costs related to a third core system conversion completed in early October, higher incentive compensation, and the timing of advertising. The efficiency ratio was 55.2%. The company is reaffirming fourth-quarter noninterest expense guidance of $54 million to $57 million.

Nonperforming assets fell $1.5 million to $38.0 million, improving the NPA-to-assets ratio to 0.39%, the lowest since 2024. Criticized loans declined $13.8 million to $120.4 million, or 1.67% of total loans and leases, the lowest percentage since 2019. Provision for credit losses was $4.5 million. Net charge-offs were $3.1 million, the lowest of the year. The allowance for credit losses to loans held for investment was 1.23%.

Total deposits were $7.2 billion at September 30, compared with $7.4 billion at June 30. Core deposits excluding brokered totaled $7.0 billion. Average noninterest-bearing deposits increased $39.2 million, or 15% annualized, the fourth consecutive quarter of noninterest-bearing growth. Brokered deposits remained 2% of total deposits. Anderson said some correspondent deposit outflows during the quarter were largely timing-related and that those deposits had returned after quarter-end.

Common equity tier 1 capital rose 33 basis points to 11.01% and total risk-based capital rose 37 basis points to 14.50%. Tangible common equity to tangible assets fell 28 basis points to 10.43% on a $19.4 million decline in accumulated other comprehensive income from unrealized investment losses and share repurchases. The company repurchased $9.5 million, or 94,861 shares, in the quarter. Tangible book value per share was $61.79. The company expects its effective tax rate to remain in the range of 8% to 10% for the fourth quarter, assuming a revenue mix in line with its guidance ranges.