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Tri-County Financial Group, Inc. (TYFG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid results: total revenue rose 13% year over year to $17.42M, net income increased 21% to $3.71M, and diluted EPS reached $1.53; net interest margin expanded to 3.47% and the efficiency ratio improved to 69.6% .
  • Positive drivers were higher loan yields and lower funding costs; net interest income grew 19% YoY to $12.97M, while non-interest income was broadly stable at $4.45M .
  • Asset quality remained sound, though nonperforming loans rose to 0.54% of total loans from 0.41% YoY; allowance for credit losses stood at $14.8M (1.13% of gross loans) .
  • Deposits were $1.253B (down $4.3M YoY), but brokered deposits declined sharply to $28.9M from $71.2M; FHLB advances climbed to $121.9M vs. $74.9M YoY, and Tier 1 leverage ratio remained solid at 9.91% .
  • No formal numeric guidance; management expects continued earnings strength driven by ongoing repricing of loans and lower funding costs, and declared a $0.25 dividend payable Oct 9, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.47% in Q3 (vs. 2.98% in Q3’24 and 3.40% in Q2’25), reflecting higher loan yields and reduced time deposit/FHLB costs; management emphasized repricing tailwinds on earning assets and lower funding costs .
  • Efficiency improved meaningfully, with the ratio at 69.6% vs. 74.2% a year ago, driven by stronger net interest income and steady non-interest income .
  • Strategic deposit actions: brokered deposits cut to $28.9M from $71.2M YoY, supporting lower funding costs and balance sheet resilience .
  • Management quote: “Our third quarter results reflected solid earnings with strong growth in net interest income and continued improvement in our net interest margin… we believe solid earnings performance will continue” — Kirk Ross, President & CEO, First State Bank .

What Went Wrong

  • Nonperforming loans increased to 0.54% of total loans (from 0.41% YoY), and loans past due 90+ days were $4.75M vs. $3.78M at year-end 2024, indicating some credit normalization even as overall asset quality remains solid .
  • Mortgage banking contributed a segment loss of $0.22M in Q3 despite revenue of $2.65M; mortgage banking income declined 4% YoY to $2.99M at the consolidated level .
  • Greater reliance on wholesale funding: FHLB advances increased to $121.9M from $74.9M YoY, tightening liquidity flexibility amid competitive deposit markets .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Revenue ($USD Millions)$15.37 $16.90 $17.42
Net Interest Income ($USD Millions)$10.87 $12.24 $12.97
Non-Interest Income ($USD Millions)$4.50 $4.66 $4.45
Net Income ($USD Millions)$3.06 $3.51 $3.71
Basic EPS ($)$1.27 $1.47 $1.56
Diluted EPS ($)$1.26 $1.46 $1.53
Net Interest Margin (FTE) %2.98% 3.40% 3.47%
Efficiency Ratio %74.2% 72.3% 69.6%

Segment performance (selected):

Segment MetricQ3 2024Q2 2025Q3 2025
Commercial Banking Net Interest Income ($M)$10.82 $12.20 $12.91
Mortgage Banking Revenues ($M)$2.75 $2.99 $2.65
Commercial Banking Net Income ($M)$3.15 $3.53 $3.84
Mortgage Banking Net Income ($M)$(0.25) $0.01 $(0.22)

Key KPIs:

KPIQ3 2024Q2 2025Q3 2025
Total Loans ($USD Billions)$1.27 $1.28 $1.31
Nonperforming Loans / Total Loans (%)0.41% 0.29% 0.54%
Allowance for Credit Losses ($USD Millions)$14.21 $14.67 $14.82
ACL as % of Gross Loans (%)1.11% 1.13% 1.13%
Total Deposits ($USD Billions)$1.26 $1.27 $1.25
Brokered Deposits ($USD Millions)$71.2 $32.5 $28.9
FHLB Advances ($USD Millions)$74.9 $86.9 $121.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ3 2025$0.25 (Q2 2025) $0.25 payable Oct 9, 2025 Maintained
Financial GuidanceQ3 2025No formal quantitative guidance No formal quantitative guidance; management expects continued earnings strength from repricing/lower funding costs Maintained (qualitative)

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not publicly available; themes below reflect MD&A and press releases.

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Net Interest MarginNIM improved to 3.31% in Q1; driven by higher loan yields and lower time deposit costs NIM expanded to 3.47% vs 2.98% YoY; benefit from loan repricing and lower FHLB/time deposit costs Improving
Funding Costs/DepositsQ2 noted reduction in brokered deposits to $32.5M; deposit costs declined; mix shifted toward interest-bearing demand/savings Brokered deposits down further to $28.9M YoY; total deposits modestly lower; efficiency improved Mix improving, total flat/down slightly
Mortgage BankingQ2 mortgage banking revenues up 22% YoY; small profit at FSM Q3 mortgage banking revenues $2.65M; segment net loss $(0.22)M; mortgage banking income down 4% YoY Mixed; revenue stable, profitability soft
Credit QualityQ2 NPLs were 0.29%; solid asset quality NPLs rose to 0.54%; ACL 1.13% of loans; charge-offs low Normalizing but still strong
Macro/Rate EnvironmentFOMC cuts in late 2024 reduced funding costs; maintained target through mid-2025 FOMC maintained 3.75–4.00% through Oct 2025; continued benefit to deposit/advance costs Supportive for NIM

Management Commentary

  • “Our third quarter results reflected solid earnings with strong growth in net interest income and continued improvement in our net interest margin… increased yields on our earning assets and lower funding costs… asset quality remains strong… deposit growth strategies in a competitive market.” — Kirk Ross, President and CEO, First State Bank .
  • Company note: Investment portfolio remains AFS, with unrealized losses reported in equity; fair value improved vs year-end .

Q&A Highlights

  • No Q3 2025 earnings call transcript was available; no public Q&A to report [functions ListDocuments result: 0 earnings-call-transcript].

Estimates Context

  • S&P Global consensus estimates for EPS/EBITDA were not available; revenue fields returned actuals only and no consensus counts. Result comparisons to Street are therefore unavailable for Q3 2025 (Values retrieved from S&P Global).*
  • Actuals: diluted EPS $1.53, total revenue $17.42M, net income $3.71M .
  • Implication: With net interest margin expansion and efficiency gains, Street estimates, where they emerge, would likely need upward adjustments on NIM/Net Interest Income and potentially lower deposit cost assumptions (Values retrieved from S&P Global).*

Key Takeaways for Investors

  • Margin trajectory remains favorable: NIM rose to 3.47% (3.40% in Q2; 2.98% YoY), pointing to sustained earnings leverage from loan repricing and lower funding costs .
  • Operational efficiency is improving: efficiency ratio fell to 69.6% from 74.2% YoY, amplifying NII gains into EPS growth .
  • Funding mix progress: brokered deposits fell sharply YoY (to $28.9M), yet total deposits were modestly lower; investors should monitor competitive pricing and deposit retention strategies .
  • Liquidity posture: FHLB advances increased to $121.9M vs. $74.9M YoY; watch refinancing risk and rate resets, though capital remains solid (Tier 1 leverage 9.91%) .
  • Credit normalization: NPLs rose to 0.54% from 0.41% YoY; ACL coverage at 1.13% appears adequate with low charge-offs; continue to track past-due trends and segment exposures .
  • Mortgage banking: revenue steady but segment loss in Q3; with rate stability, volumes may improve, but profitability is sensitive to market rates/volumes .
  • Near-term setup: Strong NII and improving efficiency are near-term catalysts; key watch items include deposit pricing, wholesale funding levels, and credit metrics as the rate cycle evolves .

Sources: Q3 2025 8-K press release and exhibits ; Q3 2025 10‑Q and MD&A ; Q2 2025 10‑Q ; Q2 2025 press release (OTC Markets) ; Q1 2025 press release (PR Newswire) .