QCR (QCRH) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $25.8 million ($1.52 per diluted share), down from $30.2 million ($1.77 per share) in Q4 2024 and $26.7 million ($1.58 per share) in Q1 2024.

• Adjusted net income (non-GAAP) was $26.0 million ($1.53 per share), with tangible book value per share up $1.43, or 11% annualized.

• Core deposit growth was robust at 20% annualized, and wealth management revenue grew 14% annualized.

• Asset quality remains strong, with criticized loan balances at a five-year low and allowance for credit losses steady at 1.32%.

• CEO transition announced, with Todd Gipple set to succeed Larry Helling after the May shareholder meeting.

Financial highlights

• Net interest income for Q1 2025 was $60 million, up 10% year-over-year, but down $1.2 million sequentially.

• Noninterest income was $16.9 million, down 37% year-over-year, mainly due to lower capital markets revenue.

• Noninterest expense declined to $46.5 million, down 8% year-over-year, primarily from lower variable compensation.

• Tangible book value per share grew by $1.43, or 11% annualized for the quarter.

• Effective tax rate was exceptionally low at 1% for Q1 2025, expected to normalize to 6%-8% in Q2.

Outlook and guidance

• Loan growth guidance suspended for the full year due to uncertainty; Q2 2025 projected at 4%-6% annualized.

• Adjusted net interest margin (NIM) expected to be static to up four basis points in Q2, assuming no Fed cuts.

• Noninterest expenses guided to $50-$53 million for Q2, with potential to rise if LIHTC and loan growth normalize.

• Capital markets revenue from swap fees expected in the $50-$60 million range over the next four quarters.

• Long-term targets include 9% annual loan/lease growth, 6% annual fee income growth, and limiting annual operating expense growth to 5%.