Tri-County Financial Soars with 32% Annual Profit Growth

MENDOTA, IL – February 26, 2026 – Tri-County Financial Group, Inc. (OTCQX: TYFG) announced blockbuster financial results for 2025, capped by a fourth quarter that saw profits skyrocket 62.5% over the previous year. The Mendota-based parent company of First State Bank reported a full-year net income of $13.7 million, a 32% increase from 2024, signaling robust health and outperforming broader industry trends.

A Year of Exceptional Profitability

The company's fourth-quarter performance was particularly striking. Net income for the quarter ending December 31, 2025, reached $3.9 million, or $1.64 per share, a substantial leap from the $2.4 million, or $1.00 per share, recorded in the same period of 2024. This quarterly surge contributed to a full-year net income of $13.7 million ($5.73 per share), a significant 32% rise from the $10.4 million ($4.33 per share) earned in 2024.

A key driver of this success was a 21% increase in net interest income, which climbed to $13.2 million in the fourth quarter from $10.9 million a year prior. This growth demonstrates the bank's increasing effectiveness at generating profit from its core lending and deposit activities. The company’s performance stands in sharp contrast to wider trends in the community banking sector. While the FDIC reported that community banks nationally saw a healthy 22.5% increase in full-year net income for 2025, Tri-County's 32% growth outpaced the average. More notably, while the aggregate net income for community banks saw a quarterly decline of 3.8% in Q4 2025, Tri-County posted its impressive 62.5% quarterly gain.

In the company's announcement, President and CEO Kirk Ross stated, "Our fourth quarter results reflected solid earnings with strong growth in net interest income and continued improvement in our net interest margin."

Mastering the Margin in a Shifting Rate Environment

The significant improvement in net interest margin, a critical measure of bank profitability, was central to Tri-County's 2025 success story. Ross attributed this to "increased yields on our earning assets and lower funding costs," a strategy that appears to have paid dividends throughout the year. The bank successfully navigated the monetary policy shifts of 2025, where the Federal Reserve pivoted from a holding pattern to a series of rate cuts in the latter half of the year, lowering the federal funds rate by 0.75% over its final three meetings.

This environment allowed agile banks to benefit from repricing their loan portfolios. As Ross noted, the company expects "solid earnings performance will continue... as we continue to see repricing in our loan portfolio." This suggests the bank's loan book is structured to capitalize on interest rate dynamics, boosting its income.

Furthermore, the company demonstrated disciplined management of its funding sources. Total deposits grew by a healthy $30.6 million year-over-year to reach $1.304 billion. Critically, within that growth, Tri-County reduced its reliance on more expensive brokered deposits, which fell from $49.3 million at the end of 2024 to $44.9 million at the end of 2025. This strategic shift towards core deposits, cultivated through its extensive network of First State Bank branches across Illinois, helped lower its overall cost of funds and widen its profit margin.

Prudent Growth and Strong Asset Quality

While pursuing growth, Tri-County maintained a focus on the health of its balance sheet. Total loans increased by a measured 3%, or $42.6 million, to reach $1.33 billion by year-end. This growth, while slightly below the 5.4% average for community banks in 2025, was paired with diligent risk management.

The company did report a slight increase in nonperforming loans, which rose from 0.33% to 0.43% of total loans over the year. However, this level remains exceptionally low when compared to broader industry benchmarks. For context, the industry-wide rate for past-due and nonaccrual loans was significantly higher, indicating that Tri-County's asset quality remains a key strength. The company also increased its allowance for credit losses to $15.0 million, or 1.13% of gross loans, a prudent measure to cushion against potential future loan issues.

Reinforcing this picture of financial stability is the company's strong capital position. Its Tier 1 leverage ratio stood at a robust 10.02% as of December 31, 2025, comfortably exceeding regulatory requirements and providing a substantial buffer against economic headwinds. This strong capitalization, combined with what external analyses describe as a "sufficient allowance for bad loans," underscores the bank's conservative and sustainable approach to its operations.

Delivering Value to Shareholders

The strong financial performance translated directly into increased value for Tri-County's shareholders. The company's board declared a regular quarterly dividend of $0.25 per share in December, continuing its practice of returning capital to investors. The book value per share saw a significant increase, rising to $66.43 from $59.81 a year earlier, while tangible book value per share grew to $62.77 from $56.18.

On the OTCQX market, the company's stock (TYFG) has reflected this positive momentum, recently trading near its all-time high. Despite the strong performance, some market analysis suggests the stock may be undervalued relative to its peers, trading at a lower price-to-earnings ratio than the sector average. This has led some observers to view TYFG as a solid "income play" for investors, given its consistent dividend and strong fundamentals.

Looking ahead, the company's leadership projects continued stability and growth. Ross concluded his remarks by emphasizing the bank's strategic focus, stating, "We remain attentive to our loan strategies and our asset quality remains strong. We are continuing our deposit growth strategies in a competitive market and monitor our local competition to offer competitive rates while continuing to provide exceptional community banking services." This commitment to core community banking principles, backed by strong financial execution, positions Tri-County Financial Group for continued success.