QCR Holdings, Inc. (QCRH) Cash Flow Statement

The OCF/NI ratio of 13.01 in Q2 2026, as reported, suggests significant non-cash adjustments, likely from loan loss provisions and securities gains, which may overstate the true cash generation. However, the consistent quarterly net income, averaging around $30M, provides a stable base for capital retention. This retained capital appears sufficient to fund loan growth and maintain regulatory buffers, though the reliance on non-cash items warrants monitoring for sustainability.

The quarterly purchase and sale volumes, though modest relative to the balance sheet, suggest a tactical approach to securities positioning. The net selling in some quarters, such as Q3 2025 with $50.6M purchases and $15.3M sales, may indicate a preference for liquidity or a shift toward higher-yielding assets. This activity appears to be a secondary source of cash flow, with the primary focus on loan growth, but it provides flexibility to adjust the portfolio's interest rate sensitivity.

The cash flow statement does not explicitly break out loan originations, but the overall operating cash flow volatility, with OCF ranging from -$3.6M to $471.5M, implies significant loan-related cash movements. The strong OCF in Q2 2026 and Q4 2025 likely reflects loan repayments or sales, while negative OCF in Q1 2025 indicates heavy origination activity. This pattern suggests a dynamic loan book, with growth funded by a mix of deposits and wholesale funding, as indicated by the shift toward higher-cost CDs and brokered deposits.

The initiation of buybacks in 2025, with $20.8M in Q1 2026, marks a shift from prior quarters where no repurchases occurred, indicating management's view that the stock is undervalued. The dividend, though modest at $1.7M quarterly, has been consistently paid, and the combined capital return is well within earnings retention capacity. However, the increased buyback activity may signal a lack of higher-return organic opportunities, which investors should monitor for capital allocation discipline.

The cash flow data does not directly show deposit flows, but the balance sheet shift toward time deposits implies higher interest expense, which is a key driver of the stable NIM observed in the income statement. The reliance on non-core funding sources, such as brokered deposits, may increase funding costs and reduce the benefit of asset repricing. This trend warrants close monitoring, as a continued shift could pressure margins and reduce the efficiency gains seen in the efficiency ratio.