QCR (US:QCRH)2026-01-28 17:02Financial Data and Key Metrics Changes - The company reported record adjusted net income of $37 million, or $2.21 per diluted share for Q4 2025, and $130 million, or $7.64 per diluted share for the full year 2025, driven by significant growth in net interest income and capital markets revenue [17][29] - Net interest income increased by $4 million, or 22% annualized in Q4, and $23 million, or 10% for the year, supported by margin expansion [17][18] - The net interest margin (NIM) increased by 6 basis points from Q3, nearing the upper end of guidance, with a 14% increase in average earning assets [18][19] Business Line Data and Key Metrics Changes - The wealth management business added nearly 500 new client relationships, bringing in over $1 billion in new assets under management, with a five-year compound annual growth rate of 10% for both assets and revenue [8][9] - The LIHTC lending platform performed exceptionally well, with the company adding 18 new developer partners and benefiting from strong demand for affordable housing [9][10] Market Data and Key Metrics Changes - The company experienced strong organic growth and enhanced profitability in traditional banking operations, with total loans growing by $304 million, or 17% annualized in Q4 [24][25] - Total criticized loans decreased by $5 million in Q4 and $20 million for the full year, reflecting a 12% reduction, indicating improved asset quality [26][27] Company Strategy and Development Direction - The company aims to continue advancing its digital transformation, expand its wealth management business, and grow its LIHTC lending platform, supported by a positive NIM outlook and solid loan and deposit pipelines [16][19] - The multi-charter model allows the company to outperform competitors and gain market share, with a focus on improving balance sheet efficiency and enhancing service capabilities through technology investments [7][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum into 2026, with expectations for continued growth in net interest income and capital markets revenue [5][16] - The company anticipates additional core margin expansion in Q1 2026, supported by repricing opportunities and a favorable deposit mix [20][21] Other Important Information - The company executed share repurchases totaling approximately $13 million in Q4, returning nearly $22 million to shareholders for the full year [27][28] - The effective tax rate for Q4 was 8%, down from 10% in the prior quarter, reflecting a favorable mix of tax-exempt income [29] Q&A Session Summary Question: Guidance on capital markets revenues - Management indicated that Q1 is historically the slowest quarter for capital markets revenue, setting expectations accordingly [34][36] Question: Update on securitization plans - The company expects to securitize approximately $300 million-$350 million in loans before June 30, 2026, despite some delays in the process [37] Question: Earning assets starting point for Q1 - Earning assets heading into Q1 will be consistent with the end of Q4, with robust loan growth anticipated throughout the year [43][45] Question: Deposit gathering expectations - The company is focused on improving core deposit growth and enhancing the mix, with strategies in place to attract new retail checking accounts and private banking clients [54][55] Question: LIHTC business growth opportunities - Management expressed optimism about the LIHTC business, emphasizing the importance of maintaining a balanced growth approach across all business segments [66][70]