Tri-County Financial Group Reports Strong Q1 2025 Earnings Despite Economic Challenges

Tri-County Financial Group Reports First Quarter 2025 Financial Results

Tri-County Financial Group, Inc. (OTCQX: TYFG) recently released its financial results for the first quarter of 2025. The data indicates solid performance amidst an evolving economic landscape. With net income reported at approximately $2.6 million ($1.07 per share), the results reflect a slight decrease compared to $2.7 million ($1.10 per share) from the first quarter of 2024. However, the overall financial health of the group appears positive.

The company's net interest margin experienced a considerable uptick, moving from 2.93% in Q1 of 2024 to 3.31% in Q1 of 2025. This improvement signals potential growth in interest income streams as the company successfully navigated the interest rate environment.

In terms of figures, net interest income saw a notable increase of 10%, climbing from $10.5 million in the same quarter last year to $11.6 million this year. These figures underscore the firm's ongoing commitment to enhancing revenue through various lending and investment options.

Moreover, Tri-County's non-interest income considerable rose as well, reaching $3.6 million, a 20% increase compared to $3.0 million during the previous year. The boost in non-interest income primarily stems from improved earnings at First State Mortgage, which has outperformed expectations by about $0.5 million compared to the same timeframe last year.

Despite these positives, the company also noted a minor increase in non-interest expenses, which totalled $11.3 million in the first quarter of 2025, a negligible rise from $11.2 million in Q1 of 2024. This increase reflects ongoing investments in operational growth and community banking initiatives.

The investment portfolio, solely composed of debt securities classified as available-for-sale, has seen a decrease of $21.8 million, or 13%, year-over-year. As of March 31, 2025, the portfolio totalled $147.4 million, down from $169.1 million a year earlier. This reduction strategically helped lower borrowings, indicating a controlled approach to asset management.

Additionally, total loans decreased by 1% to $1.278 billion at the end of Q1 2025 from $1.291 billion in Q1 2024. Nonperforming loans as a percentage of total loans also improved, standing at 0.40% compared to 0.63% a year prior, reflecting effective risk management practices.

A provision for credit loss of $0.5 million was noted for the quarter, which the company attributes to changes in economic conditions and a slight uptick in unfunded commitments. The allowance for credit loss concluded at $14.5 million, representing 1.14% of gross loans, with overall asset quality remaining robust.

Total deposits, on the other hand, grew by $18.2 million, marking a 1% uptick year-over-year. In this context, brokered deposits comprised approximately $38 million in 2025, compared to $87.5 million in the previous year, showcasing a strategic pivot in the bank’s funding strategy.

As of the end of March 2025, the company maintained solid capital levels, boasting a Tier 1 leverage ratio of 9.79%. A dividend of $0.25 per share was declared by the Board of Directors, reflecting the company’s commitment to returning value to shareholders.

Tim McConville, President and CEO, commented on the results stating, “Our first quarter numbers indicate solid earnings performance and an improvement in our net interest margin alongside market deposit growth. Although the economic and political environment continues to pose challenges for financial institutions, we remain focused on our loan and deposit strategies.” He further emphasized the importance of competitive rates and exceptional community banking services for local customers.

In its 85th year of operation with First State Bank, Tri-County Financial Group, Inc. continues to demonstrate a commitment to its communities and clients. The company operates numerous branches across various locations, ensuring accessible banking services to a diverse clientele.

As the financial landscape evolves, staying aligned with the community's needs and maintaining financial health will be fundamental priorities for Tri-County Financial Group, Inc. Moving forward, the firm looks to adapt and optimize its offerings while nurturing strong relationships with both clients and shareholders alike.

Disclaimer: This report may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ due to various factors including economic conditions and competitive risks.