Breaking Down QCR Holdings, Inc. (QCRH) Financial Health: Key Insights for Investors

You're looking at QCR Holdings, Inc. (QCRH) right now and wondering if the regional bank story holds up, especially with the latest volatility, so let's cut straight to the numbers: the company is defintely delivering a strong financial picture as of Q3 2025, but you need to understand the drivers. They just posted a record quarterly net income of $36.7 million, which translated to an adjusted Earnings Per Share (EPS) of $2.17-a solid 25.1% beat over consensus estimates. This performance wasn't a fluke; it was driven by exceptional loan growth, which was up 15% on an annualized basis, and a rebound in Capital Markets revenue to $23.8 million. Still, a keen eye notes that while the Net Interest Margin (NIM) on a tax-equivalent yield basis expanded by 5 basis points to 3.51%, the sheer speed of that loan growth, plus opportunistic share repurchases, actually caused the Common Equity Tier 1 ratio to decrease slightly, a normal trade-off between growth and capital retention. The key takeaway is that with total assets at $9.6 billion and Tangible Book Value per Share (TBVPS) climbing to $55.78, QCRH is executing a high-growth strategy that is paying off in earnings, but that growth requires careful capital management.

Revenue Analysis

You're looking for a clear picture of QCR Holdings, Inc. (QCRH)'s financial engine, and the takeaway is this: while overall trailing revenue has seen a slight contraction, the most recent quarter shows a powerful surge in key non-interest areas that you defintely need to watch.

As a multi-bank holding company, QCR Holdings, Inc. generates the bulk of its income from two primary streams: Net Interest Income (NII), which is the difference between what the company earns on loans and investments and what it pays on deposits, and Noninterest Income (fee-based services). For the trailing twelve months (TTM) ending September 30, 2025, the company's total revenue stood at approximately $345 million.

Here's the quick math on the most recent quarter, Q3 2025, which shows a significant shift. Net Interest Income was $64.8 million, while Noninterest Income was $36.7 million. This means NII still drives the core business at about 63.8% of the quarter's total revenue, but the noninterest side is now a much more powerful engine.

The year-over-year revenue story has been mixed. For the twelve months ending June 30, 2025, QCR Holdings, Inc. reported a year-over-year revenue decrease of -4.04%, with TTM revenue at $322.87 million. That contraction reflects a challenging operating environment, but the third quarter of 2025 has shown a clear rebound in specific high-margin segments.

• Net Interest Income: Grew by an 18% annualized rate on a linked-quarter basis in Q3 2025.
• Wealth Management Revenue: Increased by 15% annualized year-over-year, hitting $5.0 million in Q3 2025.
• Capital Markets Revenue: The biggest mover, up 141% linked-quarter to $23.8 million in Q3 2025.

The massive 141% spike in Capital Markets revenue in Q3 2025 is the most significant change, moving the needle for the entire Noninterest Income segment, which was up 66% from the prior quarter. This jump was primarily fueled by robust activity in Low-Income Housing Tax Credit (LIHTC) transactions, which is a lumpy business, so you shouldn't expect that exact growth rate to repeat every quarter. Still, it proves the strategic value of that segment.

The company operates through three main segments-Commercial Banking, Wealth Management, and all other segments-but the revenue breakdown is most actionable when looking at the components of interest and noninterest income. Here is the Q3 2025 picture:

The core Commercial Banking business drives the NII, but the fee-based businesses, especially the Capital Markets group, are now providing crucial revenue diversification and growth. That's a good sign for stability, but you must factor in the volatility of those capital markets fees. To get the full context on QCR Holdings, Inc.'s financial footing, check out the full analysis: Breaking Down QCR Holdings, Inc. (QCRH) Financial Health: Key Insights for Investors.

Next step: Dig into the loan portfolio quality to see if the NII growth is sustainable.

Profitability Metrics

You want to know if QCR Holdings, Inc. (QCRH) is truly profitable, not just busy. The direct takeaway is that their profitability is strong and expanding, driven by a rebound in fee-based income and disciplined cost management, which is defintely a good sign.

For a bank like QCR Holdings, Inc., the traditional retail concept of 'Gross Profit' doesn't quite apply. Instead, we look at their core revenue streams: Net Interest Income (NII) and Noninterest Income. In the third quarter of 2025, the company reported a total revenue of nearly $101.5 million. This was split between a strong $64.8 million in Net Interest Income and a significant rebound in Noninterest Income, which hit $36.7 million. The Net Interest Margin (NIM) on a tax-equivalent yield (TEY) basis was 3.51% in Q3 2025, demonstrating effective management of the spread between lending and deposit costs.

When we look at operational efficiency-how well they control costs-the numbers are compelling. The Efficiency Ratio (Noninterest Expense divided by Revenue) is the key metric here. A lower number is better. QCR Holdings, Inc. drove its Efficiency Ratio down to 55.8% in Q3 2025, which is the lowest level in four years. Here's the quick math: with $101.5 million in Q3 revenue, this ratio implies Noninterest Expenses were roughly $56.6 million, leaving an Operating Profit (pre-tax, pre-provision) of about $44.9 million. That's a solid operating margin of around 44.2%, showing they're running a tight ship, even while investing in their digital transformation.

The bottom line, or Net Profit, tells the final story. QCR Holdings, Inc. delivered a record quarterly Net Income of $36.7 million in Q3 2025. Over the trailing twelve months (TTM) ending September 30, 2025, the company's Net Income was approximately $121.8 million on $345 million in revenue. This translates to a TTM Net Profit Margin of about 35.3%. Analysts have noted that net profit margins climbed to 36.2% recently, up from 34.1% a year ago, which supports the narrative of operational improvements taking root. Still, while revenue is forecast to grow at a robust 12.2% per year, analysts predict profit margins might fall from the current 34.9% to 24.4% in three years due to anticipated margin compression. That's a near-term risk to watch.

Comparing QCR Holdings, Inc. to its peers shows a different picture on valuation versus performance. The company's Price-to-Earnings (P/E) ratio of 10.2x is currently trading below the industry average of 11.3x, suggesting the market is pricing in some skepticism despite the strong recent earnings. This valuation gap is what draws value-focused investors. For a deeper look into who is making these bets, you should check out Exploring QCR Holdings, Inc. (QCRH) Investor Profile: Who's Buying and Why?

The trend analysis highlights a few key points:

• Net Interest Margin (NIM) on a TEY basis expanded by five basis points to 3.51% in Q3 2025.
• The five-year average annual earnings growth was a strong 10.9%, but it has recently moderated to 4.5%.
• Operational efficiency is improving, evidenced by the 55.8% Efficiency Ratio.
• Capital markets revenue, particularly from Low-Income Housing Tax Credit (LIHTC) lending, rebounded sharply to $23.8 million in Q3 2025, which is a major driver of the recent profit jump.

The table below summarizes the key 2025 profitability figures:

Debt vs. Equity Structure

You want to know how QCR Holdings, Inc. (QCRH) is funding its growth-is it leaning too hard on borrowed money (debt) or relying on shareholder capital (equity)? The quick takeaway is that QCRH is operating with a balanced, slightly conservative financial structure, keeping its leverage right in line with its regional bank peers.

As of November 2025, QCR Holdings, Inc.'s debt-to-equity (D/E) ratio stands at approximately 0.48. This means that for every dollar of shareholder equity, the company has 48 cents of debt. For a bank holding company, which naturally uses financial leverage to generate returns, this is a very healthy figure. To be fair, the average D/E ratio for US Regional Banks in November 2025 is right around 0.49, so QCRH is managing its balance sheet with a similar, disciplined approach to its competitors.

Here's the quick math on their leverage compared to the sector:

When you look at the debt side, QCR Holdings, Inc. is actively managing its long-term financing. In September 2025, the company executed a debt refinancing, issuing $70 million in new subordinated notes. This included a $50 million note due in 2035 and a $20 million note due in 2037, with the proceeds used to retire existing debt. This kind of activity shows a focus on extending the maturity profile of their debt, which is a smart move in a volatile interest rate environment.

The market recognizes this stability. In September 2025, KBRA assigned a credit rating of BBB- with a Stable Outlook to the new subordinated notes. Earlier in the year, in January 2025, KBRA affirmed the senior unsecured debt rating at BBB and the short-term debt rating at K3, which tells you the rating agency sees a low risk of default and a solid capacity to meet financial commitments.

The company balances this debt financing with a clear focus on equity funding and shareholder returns. They are not just borrowing; they are also managing the denominator of that D/E ratio. Through October 20, 2025, QCR Holdings, Inc. repurchased 129,056 shares, and the board authorized a new share repurchase program for up to 1.7 million shares. This action reduces the share count, which can boost earnings per share and is a direct way to return capital to investors. It's a defintely good sign of management confidence and a commitment to capital efficiency.

The company's ability to grow while maintaining a peer-aligned D/E ratio, coupled with a focus on both debt refinancing and share buybacks, suggests a mature and strategic approach to capital allocation. For a deeper understanding of the firm's direction, consider reviewing their foundational principles: Mission Statement, Vision, & Core Values of QCR Holdings, Inc. (QCRH).

Liquidity and Solvency

You need a clear picture of QCR Holdings, Inc. (QCRH)'s ability to meet its near-term obligations, and the data from the 2025 fiscal year shows a regional bank holding company managing strong growth while investing heavily in its future. The overall liquidity position is sound, anchored by robust deposit growth and strategic capital management, but you must watch the cash flow from investing activities.

For a bank holding company like QCR Holdings, Inc. (QCRH), traditional liquidity ratios are less than what you'd see for a manufacturing firm, but they are still important. As of November 2025, the company's Current Ratio and Quick Ratio both stood at 0.98. This means that for every dollar of current liabilities, the company has roughly 98 cents in current assets that can be converted to cash quickly. This is defintely a healthy figure within the banking sector, showing strong coverage of short-term obligations without relying on longer-term assets.

The working capital trend for QCR Holdings, Inc. (QCRH) isn't about inventory; it's about the balance between deposits and loans. Core deposits-a key source of working capital-increased by $410 million, or 8% annualized, year-to-date through the third quarter of 2025. This strong, sticky liability growth directly supports the exceptional loan growth of 15% annualized reported in Q3 2025, indicating a solid, self-funding expansion model. You can see more details on the institutional interest driving this growth by Exploring QCR Holdings, Inc. (QCRH) Investor Profile: Who's Buying and Why?

Analyzing the cash flow statement for the latest twelve months (TTM) ending June 2025 reveals three distinct trends you need to understand:

• Operating Cash Flow: This is strong and positive, coming in at $454.13 million TTM. This is the core engine of the business, showing the bank is generating substantial cash from its primary lending and fee-based activities.
• Investing Cash Flow: This is the major cash sink, with a TTM outflow of -$845.2 million. This is not a concern, but a strategic decision. It reflects the massive investment in the loan portfolio and other long-term assets, which drives future net interest income.
• Financing Cash Flow: This shows a TTM inflow of $395.3 million, largely due to deposit growth and strategic debt issuance, partially offset by dividends and share repurchases.

Here's the quick math: the large outflow from investing activities is almost fully covered by the cash generated from operations and the cash raised from financing, which is exactly how a high-growth bank should operate. What this estimate hides, however, are the near-term costs of the company's digital transformation. Non-interest expenses grew by $7 million in Q3 2025, directly tied to these modernization efforts, with significant costs expected to continue into 2026. This is a temporary drag on efficiency, but management forecasts operating leverage benefits starting in the back half of 2027.

The company's liquidity strengths are clear: record quarterly net income of $36.7 million in Q3 2025 and a major rebound in capital markets revenue to $23.8 million for the quarter, up 141% linked-quarter. The primary risk is execution on the digital transformation and maintaining asset quality during this period of high loan growth, though the nonperforming assets (NPAs) to total assets ratio remains low at 0.45% as of September 30, 2025. The company is actively managing its capital, including a new share repurchase authorization for up to 1.7 million shares, showing confidence in its capital position despite the strong loan growth. The liquidity is sound, but the expense line needs to be monitored for the next few quarters.

Valuation Analysis

You're looking at QCR Holdings, Inc. (QCRH) and wondering if the market has it right. Honestly, the data suggests it's a classic case of a solid regional bank trading at a discount. Wall Street analysts currently tag QCR Holdings as a Moderate Buy, with a consensus fair value of $89.30. Considering the stock was trading around $75.59 as of mid-November 2025, that implies a clear upside for investors who can tolerate some near-term volatility.

Here's the quick math on the core valuation multiples. For a bank, Price-to-Earnings (P/E) and Price-to-Book (P/B) are your primary tools. QCR Holdings' P/E ratio sits at about 10.61x, which is slightly higher than its peer average of 9.9x. Still, the Price-to-Book ratio is where the value argument strengthens, showing the stock trades close to its tangible assets.

The stock price trend over the last year paints a picture of volatility, but also resilience. QCR Holdings has bounced between a 52-week low of $60.83 and a high of $96.08. That range is wide. The total shareholder return for the last year is down slightly at -1.9%, but zoom out to the five-year view, and you see a robust 153% total return. This is not a quick-flip stock; it's a long-term value creator that has recently faced headwinds, defintely common in the banking sector right now.

When it comes to income, QCR Holdings is not a high-yield play, but its dividend is rock-solid. The annual dividend is $0.24 per share, giving a yield of about 0.31%. What matters more for a growth-focused bank is the payout ratio, which is a very conservative 3.36%. That low payout ratio means the bank is retaining nearly all its earnings to fuel loan growth and build capital, not because it can't afford the dividend. That's smart capital allocation.

The analyst community is aligned on the opportunity here. Based on research from six Wall Street firms, the consensus is a Moderate Buy. The breakdown shows strong conviction: one Strong Buy, three Buy, and two Hold ratings. No one is suggesting a Sell, which is a powerful signal. The average price target of $90.00 suggests a potential gain of over 18% from the current market price. If you want a deeper dive into the operational metrics supporting this valuation, you should read the full post: Breaking Down QCR Holdings, Inc. (QCRH) Financial Health: Key Insights for Investors.

Your clear action here is to check your portfolio's current exposure to regional banks and see if QCR Holdings fits your risk profile at this undervalued entry point. You need to start by modeling a discounted cash flow (DCF) view against that $90.00 target.

Risk Factors

You're looking at QCR Holdings, Inc. (QCRH) after a strong Q3 2025, but a seasoned investor knows that growth always comes with a new set of risks. The direct takeaway here is that while the company is executing a critical digital transformation and posting record income, the primary near-term concerns are capital strain from rapid loan growth and the operational drag of that very same technology overhaul.

The company reported a record quarterly net income of $37 million in Q3 2025, a great number, but let's look under the hood. The biggest internal risk is the pressure on capital ratios. Strong loan growth, which hit an annualized rate of 17% in the third quarter, combined with share repurchases, is reducing the Common Equity Tier One (CET1) ratio and total risk-based capital ratio. That's the classic trade-off: fast growth eats capital.

Operationally, the digital transformation is a double-edged sword. Non-interest expenses grew by $7 million in Q3 2025, largely due to increased variable compensation and the costs of this tech overhaul, which management expects will persist into 2026. Plus, there is a specific challenge in managing the balance sheet efficiency of their light tech lending business during its construction phase. Here's the quick math: you're paying for the future efficiency now, and that cost is hitting the bottom line.

• Capital Strain: Rapid loan growth reduces regulatory capital ratios.
• Credit Risk: Provision for credit losses increased to $4,305 thousand in Q3 2025.
• Tech Overhaul Costs: Non-interest expenses rose by $7 million, a temporary but real headwind.

Externally, the macroeconomic picture is still a mixed bag. Management has cited general macroeconomic uncertainties, including potential Washington-related disruptions and tariff impacts, as key challenges. For a regional bank, a shift in market sentiment is always a risk; the company's Price-to-Earnings (P/E) ratio of 10.5x is already slightly above the peer average of 9.9x, meaning any stall in growth could trigger a correction. Also, like many banks, QCR Holdings, Inc. faces liquidity risk from a concentration of large deposits that exceed current FDIC insurance limits, which could be withdrawn to diversify exposure.

The company is defintely not sitting still, though. Their mitigation strategies are clear and action-oriented. To shore up the capital base, QCR Holdings, Inc. completed private placements of $70 million in aggregate principal amount subordinated notes in September 2025, with a blended rate below 7%, to maintain Tier 2 capital. This reinforces their financial strength for continued growth.

For the operational risks, the digital transformation is the solution. The company is transitioning all four of its subsidiary banks to Jack Henry's modern core processing platform to standardize operations, improve efficiency, and reduce costs over the long term. This focus on a unified, efficient core banking system is a smart, strategic move to support their growth trajectory. They are also highlighting proactive credit monitoring and portfolio reviews to manage the potential rise in credit risk indicated by the higher provision for credit losses.

To understand the foundation of these strategies, you can review the Mission Statement, Vision, & Core Values of QCR Holdings, Inc. (QCRH).

Your next step should be to track the CET1 ratio in the Q4 2025 filing to see if the subordinated debt placement has stabilized the capital pressure.

Growth Opportunities

You're looking at QCR Holdings, Inc. (QCRH) after a strong Q3 2025, and the core question is whether this momentum is defintely sustainable. The short answer is yes, based on their strategic positioning and clear guidance, but you need to watch a few key metrics closely.

The company's future growth isn't relying on a single engine; it's a three-part strategy built around specialty lending, technology, and wealth management. Their biggest driver right now is the rebound in capital markets revenue, which surged to $23.8 million in the third quarter of 2025, a massive 141% jump from Q2 2025. This is mostly tied to their Low-Income Housing Tax Credit (LIHTC) business, a niche where they excel.

Here's the quick math on their lending pipeline: Management is guiding for gross annualized loan growth in the range of 10% to 15% for the fourth quarter of 2025. This follows a Q3 2025 performance where total loans grew by 15% annualized. They are also leveraging securitization and construction loan sales in the LIHTC space, which is a smart way to manage balance sheet risk while still generating significant fee income.

What really sets QCR Holdings, Inc. apart from its peers is its differentiated business model, which acts as a competitive advantage. They generate a higher portion of non-interest income-about 26% of Q2 2025 revenue-compared to the typical regional bank, thanks to their Specialty Finance Group and Wealth Management. Plus, their structure of four autonomous, locally-managed bank charters gives them a deep, relationship-driven presence in markets like the Quad Cities and Cedar Rapids, where they hold a #1 market share position.

The strategic initiatives driving future performance are clear:

• Capital Markets Expansion: Management raised guidance for capital markets revenue to be between $55 million and $65 million over the next four quarters.
• Digital Transformation: The ongoing core operating system conversion, though causing elevated expenses in 2025, is a necessary step to drive productivity and cost efficiencies starting around 2027.
• Wealth Management Momentum: This segment continues to grow, delivering $5.0 million in Q3 2025 revenue, an 8% increase linked-quarter.

For investors, the near-term revenue projections are strong. The consensus revenue forecast for Q4 2025 is $106.867 million, with an EPS forecast of $1.986. This is supported by continued net interest margin (NIM) expansion, which rose 5 basis points to 3.51% (on a tax-equivalent yield basis) in Q3 2025, with a further expansion of 3 to 7 basis points expected in Q4 2025. You can find more details on the balance sheet and credit quality in the full post: Breaking Down QCR Holdings, Inc. (QCRH) Financial Health: Key Insights for Investors.

Here is a snapshot of the Q3 2025 results and the Q4 2025 outlook:

What this estimate hides is the potential for higher-than-expected expenses in 2026 as the digital transformation continues, but the payoff is a more efficient cost structure down the road. Still, the core business is performing, and the specialty finance niche provides a consistent, high-margin revenue stream.