QCR HOLDINGS INC (QCRH): what the price assumes

In the published model solve dated 2026-Q2, anchored at $105.15, QCR HOLDINGS INC (QCRH) is priced for 12.3% return on equity. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/QCRH

Headline

FieldValue
TickerQCRH
CompanyQCR HOLDINGS INC
Current price$105.15/sh

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Return on equity needed12.3%
Return on equity now11.4%
ROE gap+0.9pp
Price-to-book1.55x

Solve inputs: computed at a 9.3% cost of equity with 4% terminal growth over a 10-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1.6pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+1.27σ
cohort percentile (of 166 peers)68
sustained it ~10 years at this level69%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.07x3expensive
Earnings1.22x1expensive
Relative—0—
Growth—0—

Families that justify the price: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=4)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$96.151.09xyesTBVPS $58.32 × 1.65x (ROE (TTM) 12.0% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption))
Relative ValuationRelative——noP/E 10x (static sector reference · 2026-04), scenarios: 8.4x / 10.0x / 11.6x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$87.031.21xyesBV/sh $67.05, ROE (TTM) 12.0%, ke 9.3%
Two-Stage Excess ReturnAsset$98.581.07xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth——no—
Peter Lynch Fair ValueRelative——noEPS $7.96, growth 20% (input: historical EPS growth), PEG=0.65 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$109.580.96xyes√(22.5 × EPS $7.96 × BVPS $67.05) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——noEPS $7.96 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative——noEPS $7.96 × (PEG 1.5 × growth 20.2% (input: historical EPS growth)) → PE 30.3x
Earnings YieldEarnings$86.051.22xyesEPS $7.96 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (dilution)1.4%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

A bank is worth the return it earns on its capital, so read the $94.92 price off price-to-book, not an operating multiple. At about 1.4x book the price assumes a sustained return on equity near 11.6%, against the roughly 11.4% the company has recently earned. That is within reach, not a stretch.

The valuation methods cluster tightly around the price. The price sits inside that band rather than above it, which is what a value-supported name looks like.

The distinctive piece is fee income. Alongside the loan book, QCR runs a wealth and trust business and an interest-rate-swap fee stream weighted toward affordable-housing tax-credit lending. That non-spread revenue is the difference between this and a plain community bank, and it is also where the cyclicality hides.

Bull Case

Start with how far the price sits above the methods, because for this name the answer is: not far at all. The bank fair-value model, which prices a bank off tangible book and the spread between its return on equity and its cost of equity, lands near $96 against a $94.92 price. Two-stage excess return lands near $99, relative valuation near $89, and the Graham number near $110. The price sits in the middle of that cluster. Read as a price-to-book inversion, today's quote assumes a sustained return on equity near 11.6%, paying about 1.4x book, which puts QCR in the upper half of its peer group's price-to-book but asks for a return it has essentially already been earning at about 11.4%.

The recent operating record supports the case the multiple is making. First-quarter 2026 net income was a record $33.4 million, diluted EPS of $1.99, up roughly 31% from a year earlier, with return on average assets of about 1.40%. Net interest margin widened to 3.17% from 3.06% the prior quarter as core deposit growth let the company shed higher-cost funding, cutting the cost of funds by 22 basis points. Total deposits reached $7.8 billion with brokered deposits down to about 2% of the total. A bank that is growing the cheap part of its funding base while widening margin is doing the two things that drive a sustainable return on equity.

The second engine is fee income, and it is what separates QCR from a deposit-and-loan utility. The filing describes a capital-markets revenue line built on interest-rate swaps where "the mix of loans with interest rate swaps are heavily weighted towards LIHTC permanent loans" (FY2024 10-K, accession 0001558370-25-001954), tying a fee stream to affordable-housing tax-credit lending where the company has real specialization. On top of that sits a wealth and trust business whose fees "are largely determined based on the market value of the investments managed" and rose 26% in 2024 (same filing). Non-spread income earned at scale is what lets a community-bank franchise sustain a return above its cost of equity, and it is the part of the model the price is paying a modest premium for.

Bear Case

The competitive pressure on a Quad Cities and Cedar Rapids bank does not come from a single disruptor; it comes from larger, denser peers competing for the same deposits and the same commercial relationships. BancFirst, Lakeland Financial, First Financial Bankshares, and Merchants Bancorp all run higher-scale or higher-return franchises in adjacent or overlapping markets, and the deposit-gathering game is won on cost of funds. QCR's own first-quarter improvement came partly from reducing brokered and wholesale funding; if larger competitors with stickier retail bases keep core-deposit costs lower through a rate cycle, QCR's hard-won 22-basis-point cost-of-funds reduction is the kind of gain that reverses when competition for deposits intensifies. The price assumes a return on equity near 11.6% sustained for years, and only about 71% of banks earning at this level have held it for a decade.

The fee income that makes the bull case also makes the cyclicality. The swap-fee capital-markets line is explicitly demand-dependent: the filing notes future swap fee income "is dependent upon the needs of our traditional commercial and LIHTC borrowers, and the size of the" pipeline (FY2024 10-K, accession 0001558370-25-001954). The wealth and trust fees move with market values by the company's own description. Both are pro-cyclical revenue streams dressed up as diversification.

The valuation leaves little room for disappointment. The conservative reads, the relative-valuation $89 and the discounted-future-market-cap $73, sit below today's price. A bank trading at 1.4x book in the upper half of its peer range is priced for continued execution, not for a credit cycle, a margin reversal, or a fee-income air pocket. If any of those arrive, the multiple compresses toward book before the earnings even turn.

Valuation

For a bank the right lens is price-to-book against the return on equity, not an operating multiple, because the balance sheet is funded by deposits rather than corporate leverage. At $94.92 the price implies a sustained return on equity near 11.6%, paying about 1.4x book, computed at a 9.4% cost of equity with 4% terminal growth. Each one-point move in the cost of equity shifts the implied return on equity about 1.4 points. The assumed return is within reach of the roughly 11.4% recently earned, which is why the priced-in assumption reads as within range rather than stretched.

The methods agree on a value close to the price. Two-stage excess return, which fades the excess return toward the cost of equity, lands near $99. Relative valuation at a sector P/E near 10x lands near $89, and the Graham number near $110. The blended central estimate is about $94, essentially the price. The model's reasonable-value band runs from roughly $50 at the low to $71 at the base, with the high case near $93.

The reconciliation is straightforward: this is a value-and-asset-supported name, not a growth bet. The asset, earnings, and relative families all support the price, while the only methods that flash undervaluation (the growth-adjusted Peter Lynch and PEG variants near $160 and $241) lean on extrapolating a 20% historical earnings growth rate that a bank earning a steady mid-teens return on equity is unlikely to repeat. The honest read is the cluster near book-plus, with the regulatory-capital frame, not net debt or interest coverage, as the relevant solvency lens.

Catalysts

The clearest recent catalyst was the record first quarter of 2026: net income of $33.4 million, diluted EPS of $1.99 (up about 31% year over year), return on average assets near 1.40%, and net interest margin expansion to 3.17% from 3.06%. Total deposits reached $7.8 billion with brokered deposits cut to about 2% of the total, evidence the funding mix is improving.

The forward markers to watch are the margin trajectory and the fee lines. Whether QCR can keep widening net interest margin as the rate environment shifts is the test for the return-on-equity assumption embedded in the price. On the fee side, the swap-driven capital-markets revenue tied to affordable-housing tax-credit lending and the market-sensitive wealth and trust fees are the swing factors each quarter; both can add to or subtract from the return on equity depending on loan demand and market levels.

Credit quality and deposit competition are the risks to monitor. A multi-bank community franchise in Iowa and Illinois lives or dies on core-deposit cost and loan credit performance through a cycle, so any uptick in charge-offs or a reversal in the cost-of-funds improvement would matter more than a single quarter's headline.

Sources: QCR Holdings Q1 2026 results (globenewswire.com, stocktitan.net), Investing.com.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive QCRH report on boothcheck