Ledyard Financial's Q1 Net Income Soars 25% Amid Economic Headwinds

HANOVER, NH – May 01, 2026 – Ledyard Financial Group, Inc. (OTCQX: LFGP) announced a robust start to 2026, reporting first-quarter net income of $1.5 million, a 25% increase over the same period last year. The performance, translating to $0.44 per diluted share, comes despite a challenging economic environment marked by geopolitical tensions and persistent inflation concerns.

Reflecting its solid financial standing, the company's Board of Directors also declared a regular quarterly cash dividend of $0.21 per share. The results underscore the community bank's ability to execute its strategic plan, which integrates its core banking and wealth management services to drive growth.

“First quarter earnings were solid, reflecting the durability of the financial foundation we have worked deliberately to build over the past several years,” said CEO Josephine Moran. She noted that after a record-setting 2025, the company is pleased with its performance to start the new year.

Navigating a Turbulent Economic Landscape

Ledyard's strong year-over-year growth was achieved against a complex global backdrop. CFO Peter Sprudzs pointed to the “U.S.-Iran conflict,” which “reshaped the economic backdrop — pushing energy prices higher, reigniting inflation concerns, and delaying anticipated Fed rate relief.”

This geopolitical volatility roiled broader financial markets in the first quarter of 2026. While larger Wall Street institutions benefited from a surge in trading volumes, the uncertainty created a more cautious outlook for regional banking, lending, and wealth management. In this environment, many community banks focused on shoring up their balance sheets and managing risk.

Ledyard's management responded proactively, increasing its provision for credit losses to $346 thousand for the quarter. Sprudzs clarified this was a “precautionary” measure “reflecting the uncertain economic backdrop rather than deterioration observed in the performance of our loan portfolio.” This move aligns with a broader industry trend where banks have been cautiously building reserves despite asset quality remaining generally strong. The bank's net charge-offs for the quarter were a minimal $12 thousand, and its allowance for credit losses provides nearly three times the coverage of its non-performing assets, indicating a healthy loan book.

Core Business Strength Drives Growth

Beneath the headline numbers, Ledyard's core business metrics reveal significant momentum. The bank's total assets stood at $1.04 billion, a 7.0% increase from the prior year, primarily fueled by impressive loan generation.

Gross loans surged 12.5% year-over-year to $684.6 million. This growth was broad-based, with commercial loans rising 9.6% to $402.3 million and residential loans climbing 18.5% to $265.0 million. This rate of expansion notably outpaces that of several regional peers, some of whom reported loan growth in the mid-single digits for the same period. The performance highlights Ledyard's success in deploying capital and serving the credit needs of its community.

This loan growth was supported by strong deposit gathering. Client deposits, excluding funds from the wealth management business, grew by $67.7 million, or 11.6%, from a year ago. This organic funding is crucial for managing costs and maintaining a stable liquidity profile.

Another key highlight was the continued expansion of the bank's net interest margin (NIM), which rose to 2.75%. This represents a 22-basis-point improvement from Q1 2025 and a 14-basis-point increase from the prior quarter. While Ledyard's NIM remains more modest than some high-performing peers in the sector, its consistent upward trajectory is a positive signal. “Net interest margin expansion continued this quarter... reflecting disciplined management of our funding costs alongside improving earning asset yields,” Sprudzs stated, adding that the bank is “well positioned to benefit from future Fed rate reductions.”

Integrated Wealth Management Proves Resilient

Ledyard's wealth management division also delivered strong results, demonstrating the value of its integrated business model. Revenue from the division grew 11.1% year-over-year to $4.5 million, a significant achievement in what management described as a “more difficult market backdrop.”

Assets under management (AUM) ended the quarter at $2.25 billion. While this was down 1.6% from the end of 2025 due to market declines, it represents a solid 7.0% increase from the first quarter a year ago. The year-over-year revenue growth reflects successful business development and the ability to expand client relationships even as markets fluctuate.

It is important to note that a direct comparison to the fourth quarter of 2025 is skewed by approximately $400,000 in unusual, one-time revenue items recorded in that period. When normalizing for these items, the underlying performance of the wealth division remains steady and continues its positive long-term trend. This success validates the company's “OneLedyard” strategy, which focuses on seamlessly integrating its banking and wealth services for the benefit of its clients.

A Commitment to Shareholder Returns

Alongside its operational performance, Ledyard maintained its focus on delivering value to its shareholders. The declared quarterly dividend of $0.21 per share translates to an attractive annualized yield of approximately 4.93% based on recent trading prices, placing it in the upper tier for its sector.

Furthermore, the company continued to execute its share repurchase program. During the first quarter, Ledyard bought back 13,100 shares of its common stock at an average price of $16.98. The board had previously authorized the repurchase of up to 173,135 shares, signaling management’s confidence that its own stock represents a compelling investment.

These capital return strategies are supported by a strong and growing capital base. The bank’s capital ratios continue to exceed all regulatory “well-capitalized” minimums. Book value per share, a key metric of intrinsic worth, increased to $18.32 from $16.76 a year ago.

The company's efficiency ratio, a measure of non-interest expenses as a percentage of revenue, was 81.2% for the quarter. While higher than the prior quarter, Moran attributed the increase to seasonal personnel costs and ongoing investments in process improvements. Excluding the one-time revenue items from Q4 2025, that quarter's efficiency ratio would have been 81.0%, showing a more stable trend. Moran expressed confidence in the bank’s ability to “return to a more favorable efficiency trajectory as earnings momentum builds through the year.”

With a fortified balance sheet, expanding margins, and a proven strategy that combines community banking with sophisticated wealth management, Ledyard Financial Group has positioned itself to continue its growth trajectory, even as it navigates an uncertain economic path forward.