Midwest regional bank QCR Holdings (NASDAQGM:QCRH) reported revenue ahead of Wall Street’s expectations in Q3 CY2025, with sales up 4.3% year on year to $101.5 million. Its non-GAAP profit of $2.17 per share was 24.1% above analysts’ consensus estimates.

Is now the time to buy QCRH? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

QCR Holdings delivered a positive third quarter, with management crediting growth in capital markets revenue, robust loan production, and expansion in net interest margin as key drivers. CEO Todd Gipple emphasized that the rebound in capital markets was “driven by strong new loan production from both our LIHTC and traditional lending businesses.” Management also highlighted an 8% increase in wealth management revenue from the prior quarter, noting continued momentum across all three core business lines. Asset quality improved, with total criticized loans decreasing 9% year-to-date, and the company initiated a new share repurchase program, signaling confidence in its long-term strategy.

Looking ahead, QCR Holdings’ guidance is anchored in expectations for continued loan growth, further digital transformation progress, and a strong pipeline in both traditional and LIHTC lending. Management anticipates gross annualized loan growth in the 10% to 15% range for the next quarter, supported by ongoing investments in technology. CFO Nick Anderson indicated that margin expansion is expected to continue, stating, “We anticipate continued core margin expansion and are guiding to an increase in fourth quarter NIM TEY ranging from 3 to 7 basis points.” The company also expects to benefit from additional Federal Reserve rate cuts and ongoing improvements in operational efficiency.

Key Insights from Management’s Remarks

Management pointed to capital markets strength, digital transformation milestones, and expanding client relationships as the main contributors to QCR Holdings’ quarterly outperformance.

• Capital markets revenue rebound: Increased activity in the Low-Income Housing Tax Credit (LIHTC) lending business drove a sharp rise in capital markets revenue, as developers sought financing for affordable housing projects. Management noted that recent legislation expanding tax credits boosted demand and reinforced the durability of this segment.
• Loan growth acceleration: The company achieved significant loan growth, driven by new production in both LIHTC and traditional lending. Excluding planned runoff from equipment finance, loans grew at a 17% annualized rate, with strong pipelines supporting continued momentum.
• Wealth management expansion: Wealth management saw a 5% increase in assets under management in the quarter, and revenue grew 8% sequentially. Management attributed this to new client relationships and successful market expansion in Central Iowa and Southwest Missouri.
• Digital transformation progress: The conversion of the first core operating system for one of the bank’s charters marked a key digital milestone, with expectations for improved productivity and lower long-term costs as more charters convert. Early feedback from staff highlighted significant time savings and usability improvements.
• Share repurchase program launch: QCR Holdings announced a new authorization to repurchase up to 1.7 million shares, providing flexibility in capital allocation and reflecting management’s confidence in future performance. This is intended to balance capital needs with opportunistic share buybacks.

Drivers of Future Performance

QCR Holdings expects sustained growth driven by loan production, technology upgrades, and LIHTC capital markets activity, while monitoring margin dynamics and regulatory milestones.

• Loan growth and pipeline health: Management guided to gross annualized loan growth of 10% to 15% for the next quarter, citing robust pipelines in both traditional and LIHTC lending. CEO Todd Gipple said recent client wins and new developer relationships support expectations for ongoing double-digit growth.
• Margin expansion and rate sensitivity: The company projects continued net interest margin (NIM) expansion, aided by asset repricing and Federal Reserve rate cuts. CFO Nick Anderson explained that every 25 basis point rate cut could add 2–3 basis points to NIM, while upcoming repricing of fixed-rate loans and certificates of deposit is expected to lift yields.
• Digital transformation and expense management: Technology investments, including core system conversions, are expected to drive operating leverage and future cost efficiency. Management cautioned that expense benefits will be realized gradually, with full impact emerging after all conversions are completed by 2027.

Catalysts in Upcoming Quarters

Over the coming quarters, the StockStory team will be closely monitoring (1) the pace of loan growth and the ability to maintain double-digit production, (2) progress on the digital transformation and further core system conversions, and (3) execution of LIHTC loan sales and securitizations to support both capital flexibility and earnings. The impact of additional share repurchases and any new regulatory developments related to the $10 billion asset threshold will also be areas to watch.

QCR Holdings currently trades at $75.31, up from $71.39 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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