QCR Holdings Reports Record Q2 2026 GAAP EPS of $2.19, Net Income of $36.3 Million
QCR Holdings posted record Q2 2026 GAAP diluted EPS of $2.19 on net income of $36.3 million, a 28% year-over-year increase, driven by robust loan growth of 12% annualized, capital markets revenue surging 69% YoY to $16.7 million, and an efficiency ratio improvement of 310 basis points to 54.61%. Asset quality reached its strongest level in nearly seven years with criticized loans at 1.91% of total loans, while tangible book value per share grew $2.17, or 15% annualized, during the quarter.
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QCR Holdings, Inc., headquartered in Moline, Illinois, reported quarterly net income of $36.3 million and diluted earnings per share (EPS) of $2.19 for the second quarter of 2026, representing a 28% year-over-year increase in diluted EPS. This compares 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. The results reflect record GAAP EPS for the quarter, supported by strong loan production, a rebound in capital markets revenue, and disciplined expense management.
Key Financial Highlights
The following table summarizes the company's quarterly and year-over-year earnings performance:
| Metric: | Q2 2026 | Q1 2026 | Q2 2025 |
|---|---|---|---|
| Net Income: | $36.3 million | $33.4 million | $29.0 million |
| Diluted EPS: | $2.19 | $1.99 | $1.71 |
| Adjusted Net Income: | $36.3 million | $33.4 million | $29.4 million |
| Adjusted Diluted EPS: | $2.19 | $1.99 | $1.73 |
| Return on Average Assets: | 1.51% | 1.40% | 1.27% |
| Net Interest Margin: | 3.10% | 3.13% | 2.97% |
| Efficiency Ratio: | 54.61% | 57.67% | 58.89% |
For the six months ended June 30, 2026, net income totaled $69.6 million with diluted EPS of $4.18, compared to $54.8 million and $3.22 for the same period in 2025.
Loan Growth and Capital Markets Revenue
Total loans grew $216.9 million, or 12% annualized, in the second quarter of 2026, excluding low-income housing tax credit (LIHTC) loan offtake transactions and the planned runoff of the m2 Equipment Finance portfolio. The company executed $443.6 million in LIHTC loan offtake transactions during the quarter, consisting of a Freddie Mac permanent loan securitization and a construction loan portfolio sale. Total LIHTC balances within the loan portfolio were $2.3 billion as of June 30, 2026.
Noninterest income for the second quarter of 2026 was $29.4 million, up from $23.0 million in the first quarter of 2026. Capital markets revenue from LIHTC loan production reached $16.7 million, representing a linked-quarter increase of 56% and a year-over-year increase of 69%. Wealth management revenue totaled $5.8 million for the quarter, a 7% increase from the first quarter of 2026, with assets under management growing 9% on a linked-quarter basis.
"We delivered strong net income and record GAAP EPS for the second quarter, demonstrating the ongoing momentum across our franchise," said Todd Gipple, President and Chief Executive Officer. "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."
Net Interest Income and Margin
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. Net interest margin (NIM) was 3.10% and NIM on a tax-equivalent yield (TEY) basis was 3.55% for the second quarter, compared to 3.13% and 3.58%, respectively, for the prior quarter.
| NIM Metric: | Q2 2026 | Q1 2026 | Q2 2025 |
|---|---|---|---|
| Net Interest Income: | $67.9 million | $67.4 million | $62.1 million |
| Net Interest Margin: | 3.10% | 3.13% | 2.97% |
| NIM TEY (Non-GAAP): | 3.55% | 3.58% | 3.46% |
| Cost of Funds: | 2.61% | 2.64% | 3.01% |
"Our NIM TEY 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."
Deposit Activity and Expense Management
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. Year-to-date, core deposits have increased $85 million, or 2% annualized. Total deposits at the end of the second quarter were $7.4 billion, a decrease of 4.5% from the first quarter, with non-core brokered deposits reduced to just 2% of total deposits.
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. For the third quarter of 2026, the company lowered its noninterest expense guidance to a range of $54 million to $57 million.
Asset Quality and Capital Position
Asset quality continued to improve during the quarter. 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, resulting 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 improved to 1.91%, the lowest level since the fourth quarter of 2019.
| Asset Quality Metric: | Q2 2026 | Q1 2026 |
|---|---|---|
| Nonperforming Assets: | $39.5 million | $42.9 million |
| NPA / Total Assets: | 0.41% | 0.45% |
| ACL / Total Loans (HFI): | 1.24% | 1.26% |
| Criticized Loans / Total Loans: | 1.91% | 2.01% |
| Net Charge-offs / Avg Loans: | 0.05% | 0.05% |
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. Net charge-offs were $3.3 million during the second quarter of 2026, a decline of $0.6 million from the prior quarter.
On the capital front, the tangible book value (TBV) per share increased by $2.17, or 15% annualized, during the second quarter of 2026. As of June 30, 2026, the tangible common equity to tangible assets ratio 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%.
Share Repurchases
The company continued opportunistic share repurchases during the second quarter, repurchasing 149,639 shares at an average price of $90.01 per share, returning approximately $13.5 million of capital to shareholders. 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.
As of June 30, 2026, QCR Holdings had $9.5 billion in assets, $7.0 billion in loans, and $7.4 billion in deposits. The company operates 35 locations across Iowa, Missouri, and Illinois through its subsidiary banks: Quad City Bank & Trust Company, Cedar Rapids Bank & Trust Company, Community State Bank, and Guaranty Bank.
How will the reduction of higher-cost correspondent and public fund deposits impact the company's net interest margin stability in the second half of 2026?
Can the 56% linked-quarter increase in capital markets revenue be sustained given the cyclical nature of LIHTC loan production?
What is the strategic outlook for the m2 Equipment Finance portfolio runoff, and how will it affect future loan growth targets?
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