QCR Holdings, Inc., the parent of Quad City Bank & Trust (QCBT) and three other Midwest banks, announced net income of $36.3 million and diluted earnings per share of $2.19 for the 2026 second quarter.
The results, reported in an earnings release on Wednesday, July 22, 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, respectively, for the 2025 second quarter.
“We delivered strong net income and record GAAP EPS for the second quarter, demonstrating the ongoing momentum across our franchise,” QCR President and CEO Todd Gipple said in the news release.
He said adjusted EPS also remained near record levels and were exceeded only by 2025’s fourth quarter.
“These results were supported by substantial loan production, a rebound in capital markets revenue, higher net interest income despite significant LIHTC (low-income housing tax credit) loan sales, and strong contributions from our wealth management business…,” he added. “Together, these results produced meaningful operating leverage and demonstrated the strength of our diversified business model.”
The Moline-based company operates subsidiary banks in four markets including the Quad Cities, Cedar Rapids and Ankeny, Iowa, as well as Springfield, Missouri.
Currently, QCR has a new headquarters building under construction in north Bettendorf at the intersection of Forest Grove Drive and Middle Road. The four-story office building, which will also house a new QCBT branch, is expected to be completed in late summer 2027.
Mr. Gipple said several strategic priorities advanced in 2Q including “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.”
2Q 2026 highlights
Here are some of the quarter’s financial highlights:
- Strong return on average assets of 1.51%.
- Significant capital markets revenue from LIHTC production increased 69% year-over-year to $16.7 million.
- Wealth Management assets under management increased 9% and revenue increased 7% on a linked-quarter basis.
- Enhanced operating leverage, reflected in a 310-basis point improvement in the efficiency ratio to 54.6%.
- Robust gross loan growth of 12% annualized.
- Successful execution of $443.6 million in LIHTC loan offtake transactions.
- Asset quality improved with criticized loans to total loans at the lowest level since the 4Q of 2019.
- Tangible book value per share growth of $2.17, or 15% annualized on a linked-quarter basis.
- 149,639 share repurchases at an average price of $90.01 per share.
“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,” said Mr. Gipple, who took the company’s helm more than a year ago. “Over time, these transactions will allow us to expand our capital markets revenue opportunities.”
Capital markets, wealth management growth
The wealth management business also continues to perform at a high level, he said. “We believe our investments in this business position us well to sustain this momentum and capture additional growth opportunities.”
Capital markets revenue increased sharply from a seasonally slower first quarter, supported by growth in LIHTC lending fueled by robust demand for affordable housing. “We continue to create new relationships with some of the best LIHTC developers in the country while expanding our relationships with existing clients.”
As a result, the company reaffirmed its guidance of $60 million to $70 million of capital markets revenue over the next four quarters, Mr. Gipple said.
Net interest income for the second quarter of 2026 was $67.9 million, an increase of $0.5 million, or 3% annualized, from the previous quarter.
Chief Financial Officer Nick Anderson said net interest margin (“NIM”) was 3.10% and NIM on a tax-equivalent yield (TEY) basis was 3.55% for the second quarter, as compared to 3.13% and 3.58%, respectively, for the prior quarter.
In the release, Mr. Anderson said NIM came in under the company’s guidance. “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.”
He added that its lending pipeline and consistent loan demand is encouraging. “Combined with our disciplined approach to deposit costs, this positive momentum supports our guidance for a relatively static third quarter NIM TEY, assuming no Federal Reserve rate changes.”
Core deposits normalize
Total core deposit activity in 2Q normalized from the exceptional first quarter performance, decreasing $323.8 million. Year-to-date, core deposits have increased $85 million, or 2% annualized.
The company’s total deposits were $7.4 billion at the quarter’s end – a decrease of 4.5% from the first quarter.
“We remain focused on growing core deposits, optimizing our funding mix, and maintaining disciplined deposit pricing in a competitive environment,” Mr. Anderson said, adding that it marked the third consecutive quarter QCR delivered noninterest bearing deposit growth.
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. The ratio of criticized loans to total loans and leases also improved to 1.91%, the lowest level since the 4Q of 2019.
The company recorded a total provision for credit losses of $4.7 million in 2Q compared to $2.5 million in the prior quarter.
The TBV per share increased by $2.17, or 15% annualized, during the second quarter driven by strong earnings and partially offset by share repurchases. QCR returned about $13.5 million of capital to shareholders at an attractive multiple relative to tangible book value.
Since it began repurchasing shares in 2025, the company has purchased more than 675,000 shares, or about 4% of total shares outstanding, returning $55.9 million of capital to shareholders.
