Executive Summary

Record quarter: adjusted diluted EPS $2.17 (+25% q/q) on adjusted net income $36.9M; GAAP diluted EPS $2.16 and net income $36.7M. Strength came from capital markets revenue rebound, robust loan growth, and NIM TEY expansion to 3.51% .
EPS beat Wall Street: Primary EPS consensus $1.748 vs actual $2.17 (adjusted) — a significant beat; revenue consensus $100.85M vs actual $97.15M* — a slight miss. Management highlighted total income of $101.45M on reported basis, reflecting definition differences in “revenue”* .
Guidance raised: Capital markets revenue next four quarters increased to $55–$65M (from $50–$60M); Q4 NIM TEY guided +3–7 bps; Q4 noninterest expense guided $52–$55M; Q4 effective tax rate guided 7–8% .
Strategic catalysts: Authorized buyback up to 1.7M shares (~10% of shares); executed $10.0M of repurchases; continued LIHTC lending growth and pipeline; digital transformation progressing (first core conversion completed), providing future operating leverage .

What Went Well and What Went Wrong

What Went Well
- Capital markets revenue surged to $23.8M (+141% q/q), exceeding guidance; Wealth Management revenue increased to ~$5.0M (+8% q/q) .
- NIM TEY expanded 5 bps to 3.51% (NIM 3.00%), driving net interest income growth to $64.8M (+$2.7M q/q) .
- Loan growth accelerated: loans/leases HFI up $253.7M to $7.18B; core deposits up $99.0M; ROAA 1.57% annualized .
- Quote: “We delivered outstanding third quarter results...driven by a strong rebound in capital markets revenue, robust loan growth and continued net interest margin expansion” — Todd Gipple, CEO .
- Quote: “Our NIM TEY increased five basis points...we anticipate continued margin expansion and are guiding to an increase in fourth quarter NIM TEY ranging from 3 to 7 basis points” — Nick Anderson, CFO .
- LIHTC momentum: “Activity rebounded sharply...we are increasing our capital markets revenue guidance to...$55 to $65 million over the next four quarters” — CEO .
What Went Wrong
- Noninterest expense rose to $56.6M (+$7.0M q/q) on variable compensation tied to revenue and digital transformation costs; efficiency still strong at 55.78% .
- Revenue vs consensus: S&P Global “Revenue” shows a slight miss (actual $97.15M* vs $100.85M*), reflecting definitional differences relative to company “total income” of $101.45M .
- Credit costs ticked up: provision $4.3M (vs $4.0M q/q), though net charge-offs fell to ~$4.2M; ACL/TL declined to 1.24% from 1.28% .
- Analyst concerns: visibility on NII impact from planned LIHTC construction loan sales and permanent loan securitization timing remained limited until January call; management expects capital markets revenue to offset any NII give-up .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Net Income ($USD Millions)	$27.785	$29.019	$36.714
Diluted EPS (GAAP) ($)	$1.64	$1.71	$2.16
Adjusted Net Income ($USD Millions)	$30.302	$29.416	$36.937
Adjusted Diluted EPS ($)	$1.78	$1.73	$2.17
Net Interest Income ($USD Millions)	$59.722	$62.082	$64.799
Noninterest Income ($USD Millions)	$27.157	$22.115	$36.651
Capital Markets Revenue ($USD Millions)	$16.290	$9.869	$23.832
NIM (GAAP) (%)	2.90%	2.97%	3.00%
NIM (TEY) (%)	3.37%	3.46%	3.51%
Efficiency Ratio (%)	61.65%	58.89%	55.78%
ROAA (annualized) (%)	1.24%	1.27%	1.57%

Segment/noninterest income detail

Noninterest Income Components	Q3 2024	Q2 2025	Q3 2025
Trust Fees ($USD Thousands)	$3,270	$3,395	$3,544
Investment Advisory Fees ($USD Thousands)	$1,229	$1,254	$1,488
Deposit Service Fees ($USD Thousands)	$2,294	$2,187	$2,231
Gains on Sale of Residential RE Loans ($USD Thousands)	$385	$556	$529
Capital Markets Revenue ($USD Thousands)	$16,290	$9,869	$23,832
BOLI Earnings ($USD Thousands)	$814	$998	$952
Debit Card Fees ($USD Thousands)	$1,575	$1,648	$1,648
Other ($USD Thousands)	$730	$143	$587

Balance sheet/KPI snapshot

KPI	Q3 2024	Q2 2025	Q3 2025
Loans/Leases HFI ($USD Thousands)	$6,661,755	$6,923,762	$7,177,464
Total Deposits ($USD Thousands)	$6,984,633	$7,318,353	$7,380,068
TBV/Share ($)	$49.00	$53.28	$55.78
TCE/TA (%)	9.24%	9.92%	9.97%
NPAs/Total Assets (%)	0.39%	0.46%	0.45%
Criticized Loans/Total Loans (%)	2.20%	2.16%	2.01%
ACL / Loans (%)	1.30%	1.28%	1.24%

Comparison vs Wall Street estimates (S&P Global)

Metric (Q3 2025)	Consensus	Actual	Surprise
Primary EPS Consensus Mean ($)	1.748	2.17	+24%
Primary EPS – # of Estimates	5	—	—
Revenue Consensus Mean ($USD)	100,849,330	97,145,000	-3.7%
Revenue – # of Estimates	3	—	—

Values marked with “Actual” in this table are from S&P Global’s dataset and may differ from company-defined “total income” ($101.45M reported). Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Markets Revenue (next four quarters)	Rolling 12 months	$50–$60M (reaffirmed in Q2 2025)	$55–$65M (raised)	Raised
NIM TEY	Q3 2025	Static to +4 bps (Q1 guide into Q2; Q2 guided Q3 static to +4 bps)	Actual +5 bps; Q4 guided +3–7 bps	Beat prior guide; raised Q4
Noninterest Expense	Q3 2025	$52–$55M (Q2 guide)	Actual $56.6M; Q4 guided $52–$55M	Maintained Q4 guide
Loan Growth (gross, annualized)	H2/Q4 2025	H2: 8–10% (Q2 guide)	Q4: 10–15%	Raised
Effective Tax Rate	Q4 2025	Q2 guide 6–8% for Q2	Q4: 7–8%	Set Q4 guide
CDs Repricing	Q4 2025	Not previously quantified	~$400M maturing, repricing from 4.13% to ~3.45–3.75%	New disclosure
Share Repurchase Authorization	Ongoing	Prior 2022 program (terminated)	New authorization up to 1.7M shares (~10%)	New program

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Digital transformation/core conversion	Discussed as driver of expenses; platform changes underway	First core conversion completed; efficiency improvements anticipated; “Bank of the Future” rollout continues through 2026–2027	Execution progressing; long-term leverage-positive
Margin sensitivity to rates	Guided NIM TEY expansion; deposit betas outpacing asset betas	+5 bps NIM TEY; guidance +3–7 bps Q4; +2–3 bps NIM accretion per 25 bp cut; $1.1B liabilities more rate-sensitive	Positive margin momentum
LIHTC lending platform	Short-term pipeline normalization expected; reaffirmed $50–$60M next-4Q	Rebounced sharply; raise to $55–$65M next-4Q; plan large $~350M securitization in H1’26; introduce construction loan participations	Strong pipeline; scaling with offtake
Asset quality/m2 runoff	ACL/loans steady ~1.3%; m2 runoff planned	NPAs 0.45%; criticized loans 2.01%; m2 credit loss expenses down 45% y/y; portfolio approaching <$200M by year-end	Improving
Approaching $10B asset threshold	—	Prepared to cross with modest impact; higher interchange and lower debit processing costs partially offset Durbin	Well-prepared
Funding & liquidity	Reduced FHLB in Q1; strong core deposit growth	Secured $134M borrowing at 4.05% by pledging HTM municipals; pipeline for muni purchases mid-7% TEY	Expanded liquidity toolkit

Management Commentary

“We delivered exceptional third-quarter results...we exceeded the upper end of our guidance range for loan growth, NIM expansion, and capital markets revenue” — CEO .
“We are increasing our guidance for capital markets revenue to be...$55 to $65 million over the next four quarters” — CEO .
“Our NIM TEY...increased by five basis points...we anticipate continued margin expansion...guiding to an increase in fourth quarter NIM TEY ranging from three to seven basis points” — CFO .
“We successfully completed the replacement of $70 million of subordinated debt...and secured...$134 million term borrowings by pledging HTM municipal bonds” — CFO .
“The new share repurchase program authorization...up to 1.7 million shares...equips us with a flexible capital allocation tool” — CEO .

Q&A Highlights

Margin outlook: Q4 NIM TEY +3–7 bps (no additional cuts assumed); +2–3 bps per 25 bp cut near term; fixed-rate loan repricings (~$168M in Q4, ~$560M in 2026) and CD repricing support margins .
Buybacks: Opportunistic repurchases favored at current valuations; capital flexibility improved with LIHTC offtake and moderate dividend policy .
LIHTC securitizations/participations: Target ~$350M permanent loan securitization in H1’26; construction loan sale participations intended to free capital with minimal client impact; expect capital markets revenue to more than offset any NII give-up .
Digital transformation costs: 2025 NII expense impact ~$$4–$5M; ~$3–$4M in 2026; efficiencies expected back half of 2027 as conversions complete .
Reserves trajectory: ACL/loans at 1.24%; not expected to drop materially from here; m2 charge-off velocity slowing; reserve releases tied to NPA resolutions and m2 runoff .

Estimates Context

EPS: Beat. Primary EPS consensus $1.748 vs actual $2.17 (adjusted), a ~24% beat; consensus based on 5 estimates*.
Revenue: Slight miss per S&P “Revenue” ($100.85M vs $97.15M*). Note: Company-reported “total income” was $101.45M, which may differ in definition from S&P “Revenue”* .
Implications: Estimate models likely to raise EPS forecasts given strong margin expansion, fee rebound, and buyback; revenue models may need alignment to company presentation of “total income” and capital markets mix*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

EPS beat was driven by both spread and fee income; margin tailwinds and CD/loan repricing support further core margin expansion into Q4 .
Capital markets revenue durability enhanced; raised next-4Q guide to $55–$65M with planned H1’26 securitization and construction loan participations to expand capacity .
Operating leverage improving: efficiency ratio 55.78%, lowest in four years, with longer-term benefits from digital transformation (first core conversion successful) .
Balance sheet growth: loans +$253.7M; core deposits +$99.0M; TCE/TA 9.97%; TBV/share +$2.50 (19% annualized); continued capital strength supports buybacks .
Asset quality strong and improving: NPAs 0.45%; criticized loans 2.01%; m2 runoff reduces credit costs (down 45% y/y) .
Buyback authorization (up to 1.7M shares) provides EPS accretion lever amid attractive valuations; management intends opportunistic execution .
Near-term trading: Expect positive post-earnings drift from EPS beat and raised capital markets guide; watch Q4 NIM TEY delivery and any updates on LIHTC offtake transactions at January call .

Notes: Where “Revenue” is sourced from S&P Global estimates, values may reflect a different revenue definition than the company’s reported “total income”.

QCR HOLDINGS INC (QCRH)·Q3 2025 Earnings Summary