QCR (QCRH) Q4 2024 earnings summary

Executive summary

• Achieved record full-year net income of $114 million ($6.71 per diluted share) and adjusted net income of $119 million ($7.03 per diluted share) in 2024, with the strongest results in Q4.

• Midwest-based bank holding company with $9.0B in assets and $6.3B in wealth management AUM as of 12/31/24, operating 36 locations across four states.

• Diversified business lines include traditional banking, wealth management, correspondent banking, and a specialty finance group.

• Four distinct bank charters with leading market share in key mid-sized metros, emphasizing relationship-driven, customized solutions.

• Asset quality remained strong, with a temporary increase in nonperforming assets primarily due to a few discrete loans.

Financial highlights

• Net interest income grew $11 million (5%) year-over-year, reaching $61 million in Q4, and full-year net interest income was $231.8 million.

• Loans increased from $3.7B to $6.8B (12.9% CAGR); core deposits grew from $3.3B to $6.7B (15.4% CAGR) since 2019.

• Non-interest income reached $116 million for the year, led by $71 million in capital markets revenue and $1 billion (20%) growth in wealth management AUM.

• Adjusted ROAA was 1.35% and adjusted ROAE was 12.61%, both at the higher end of the peer group.

• Tangible book value per share increased by $1.21 in Q4, representing 10% annualized growth and 15% year-over-year.

Outlook and guidance

• Anticipates gross loan growth of 8%-10% in 2025, with net loan growth of 1%-3% after planned securitizations and runoff.

• Expects capital markets swap fee revenue of $50-$60 million in 2025, with Q1 typically lighter and variability due to market conditions.

• Projects Q1 2025 adjusted NIM TEY to be static to up five basis points, despite a four basis point headwind from expiring interest rate caps.

• Non-interest expenses expected to be $52-$55 million in Q1 2025, remaining fairly static throughout the year.

• Securitization of LIHTC loans expected to provide capacity for future asset and capital markets revenue growth, enhance liquidity, and maintain portfolio concentration levels.