QCR Holdings profit jumps as housing-tax-credit revenue surges

A record quarter with an unusual engine

QCR Holdings reported second-quarter net income of $36.3 million, up from $29 million a year earlier, while diluted earnings per share rose 28% to a record $2.19.globenewswire The result topped the $1.90 average estimate from four analysts surveyed by Zacks Investment Research.wkyc For the Moline, Illinois-based regional lender, the standout contribution came from financing tied to affordable housing rather than a widening lending spread.

Revenue net of interest expense reached $97.3 million, according to an Associated Press earnings snapshot.wkyc Zacks calculated that adjusted earnings exceeded consensus by 15.26% and said QCR has now beaten per-share estimates in four consecutive quarters.yahoo

Affordable housing deals lift fee income

Revenue from low-income housing tax credit production climbed 69% from a year earlier to $16.7 million, helping noninterest income rise to $29.4 million from $23 million in the first quarter.globenewswire The bank also completed $443.6 million of transactions that moved affordable-housing loans off its balance sheet through a Freddie Mac securitization and a construction-loan portfolio sale.stocktitan

Those transactions support QCR’s strategy of earning fees while releasing capital for new lending. Excluding the housing-loan sales and the planned runoff of its m2 Equipment Finance portfolio, loans grew by $216.9 million, or a 12% annualized rate.stocktitan Management reaffirmed annualized gross loan-growth guidance of 10% to 15% for the final two quarters of 2026 and projected $60 million to $70 million of capital-markets revenue over the next four quarters.globenewswire

Deposit and margin pressure temper the beat

The quarter was not uniformly strong. Total deposits fell 4.5% from March to $7.4 billion as QCR deliberately reduced higher-cost correspondent and public-fund balances, while its tax-equivalent net interest margin slipped three basis points to 3.55% and missed company guidance.stocktitan A separate analysis estimated revenue at $97.34 million, 6.8% below its Wall Street consensus, even as adjusted earnings beat expectations.stockstory

Credit indicators moved in the other direction. Nonperforming assets declined by $3.4 million to $39.5 million, or 0.41% of assets, and criticized loans fell to 1.91% of total loans, their lowest share since late 2019.globenewswire Tangible book value reached $61.35 per share, narrowly above analyst expectations, while QCR repurchased nearly 150,000 shares for about $13.5 million.stockstory +1

The contrast defines the outlook: stronger fee income, loan demand and credit quality are cushioning a still-competitive funding market. QCR expects its tax-equivalent margin to remain roughly flat in the third quarter if the Federal Reserve leaves rates unchanged, making execution on the affordable-housing pipeline central to sustaining the earnings momentum.globenewswire