QCR HOLDINGS INC

The following table sets forth the various categories of noninterest income for the three and nine months ended September 30, 2026 and 2025:

The Company continues to be successful in expanding its wealth management client base. Trust and investment advisory and management fees continue to be a significant contributor to noninterest income. Assets under management have increased $77.6 million since June 30, 2026 and have increased $648.3 million since September 30, 2025 due primarily to new relationships and favorable market performance. Income is generated primarily from fees charged based on assets under administration for corporate and personal trusts and for custodial services. The majority of trust fees are determined based on the value of the investments within the fully-managed trusts. Trust fees increased 12% in the third quarter of 2026 as compared to the same period of the prior year and increased 14% when comparing the first nine months of 2026 to the first nine months of 2025 due to growth in assets under management and market performance. The Company expects trust and investment advisory and management fees to be negatively impacted during periods of significantly lower market valuations and positively impacted during periods of significantly higher market valuations.

Investment advisory and management fees increased 13% comparing the third quarter of 2026 to the same period of the prior year and increased 19% when comparing the first nine months of 2026 to the first nine months of 2025. Similar to trust fees, fees from these services are largely determined based on the market value of the investments managed. As a result, fee income from this line of business fluctuates with market valuations.

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Deposit service fees remained stable in the third quarter of 2026 as compared to the same period of the prior year, and decreased 4% in the first nine months of 2026 as compared to the first nine months of 2025 due to decreases in nonsufficient funds and overdraft fees. The Company’s total deposits decreased by $176.9 million, or 2%, when comparing September 30, 2026 to September 30, 2025.

Gains on sales of residential real estate loans, net, decreased 39% when comparing the third quarter of 2026 to the same period of the prior year due to lower volumes of client residential real estate purchase activity in the third quarter generating lower levels of gains. Gains on sales of residential real estate loans, net, increased 5% when comparing the first nine months of 2026 to the first nine months of 2025. The increase was due to higher volumes of client residential real estate purchase activity generating higher levels of gains.

Capital markets revenue totaled $16.9 million for the third quarter of 2026, compared to $23.8 million for the third quarter of 2025. Capital markets revenue totaled $43.0 million for the first nine months of 2026, compared to $40.2 million for the first nine months of 2025. As discussed in the “Executive Overview” section of this report, demand for affordable housing remains strong. In the traditional commercial portfolio, the pricing is more competitive and the duration is shorter as compared to the LIHTC permanent loans. Therefore, the mix of loans with interest rate swaps continued to be heavily weighted towards LIHTC permanent loans. Future levels of swap fees are dependent upon the needs of our traditional commercial and LIHTC borrowers, and the size of the related nonrefundable swap fee may fluctuate depending on the interest rate environment.

The Company’s interest rate swap program consists of back-to-back interest rate swaps with two types of commercial borrowers: (1) traditional commercial loans of a certain minimum size and sophistication, and (2) LIHTC permanent loans. Most of the growth has been in the latter category as the Company has grown relationships with strong LIHTC developers with many years of experience. The LIHTC industry is strong and growing with an increased need for affordable housing. The back-to-back interest rate swaps allow commercial borrowers to pay a fixed interest rate while the Company receives a variable interest rate as well as an upfront nonrefundable fee dependent upon the pricing from an upstream counter party.

Earnings on BOLI decreased 7%, comparing the third quarter of 2026 to the same period of the prior year, due primarily a portion of the Company’s BOLI portfolio carrying a variable rate whereby returns are determined by the performance of the equity markets. Earnings on BOLI increased 15% when comparing the first nine months of 2026 to the same period of the prior year. The increase for the first nine months of 2026 was driven by BOLI exchanges in the first nine months of 2025 resulting in surrender charges of $168 thousand. There were no purchases of BOLI in the first nine months of 2026 or 2025. Management intends to continue to review its BOLI investments to be consistent with policy and regulatory limits in conjunction with the rest of its earning assets in an effort to maximize returns while minimizing risk.

Debit card fees are the interchange fees paid on certain debit card customer transactions. Debit card fees increased 6% when comparing the third quarter of 2026 to the same period of the prior year, and increased 8% when comparing the first nine months of 2026 to the first nine months of 2025. The Company continues to be successful in adding net new demand deposit accounts. The fees can vary based on customer debit card usage, so fluctuations from period to period may occur. As an opportunity to maximize fees, the Company offers a deposit product with a higher interest rate that incentivizes debit card activity.

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Correspondent banking fees increased 11% comparing the third quarter of 2026 to the same period of the prior year and increased 10% comparing the first nine months of 2026 to the first nine months of 2025. The increases across both periods were primarily due to an increase in correspondent banking balances. Fees from correspondent banks generally increase when non-interest bearing account balances decrease due to lower associated earnings credits. Correspondent banking continues to be a core strategy for the Company, as this line of business provides a high level of deposits that can be used to fund loan growth as well as a steady source of fee income. The Company now serves 187 banks in Iowa, Illinois, Missouri and Wisconsin.

Loan-related fee income increased 24% comparing the third quarter of 2026 to the same period of the prior year and increased 8% comparing the first nine months of 2026 to the first nine months of 2025, primarily due to higher participation service fees.

Fair value gains on derivatives and trading securities were $442 thousand in the third quarter of 2026, as compared to $324 thousand in gains in the same period of the prior year. Fair value gains on derivatives and trading securities were $375 thousand in the first nine months of 2026, as compared to $453 thousand in losses in the first nine months of 2025.

Other noninterest income decreased $81 thousand, or 14%, in the third quarter of 2026 as compared to the same period of the prior year, and increased $353 thousand, or 29% in the first nine months of 2026 as compared to the first nine months of 2025, due to fluctuations in the market value of the Company’s equity investments. Income on equity investments is largely determined based on the market value of the investments managed.

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