HANOVER, N.H., May 01, 2026 (GLOBE NEWSWIRE) -- Ledyard Financial Group, Inc. . (the "Company", OTCQX$(R)$: LFGP), the holding company for Ledyard National Bank (the "Bank"), reported quarterly net income per diluted share of $0.44, for the first quarter ended March 31, 2026, compared to $0.59 in the prior quarter, and $0.36 in the first quarter a year ago, as core business activity remained strong. Reflecting the continued success of the company's strategic investments, net income for the first quarter of 2026 was $1.5 million, up 25% over the comparable year-ago period.
"First quarter earnings were solid, reflecting the durability of the financial foundation we have worked deliberately to build over the past several years. Coming off an exceptional fourth quarter and a year that nearly doubled our net income, we are pleased with how the business has performed to start 2026. We remain focused on strengthening our credit profile, managing liquidity with discipline, and continuing to grow through the integration of our banking and wealth management businesses for the benefit of our clients, employees, shareholders, and the communities we serve," said Josephine Moran, CEO.
"Net income for the first quarter rose 25% over the same period a year ago, a result we are proud of as the U.S.-Iran conflict reshaped the economic backdrop -- pushing energy prices higher, reigniting inflation concerns, and delaying anticipated Fed rate relief. Both loans and deposits grew on the linked quarter and our net interest margin continued to expand. Our wealth management team navigated a more difficult market backdrop this quarter, but their continued success in expanding client relationships speaks to the strength of our business model. These results further validate our strategic plan, and we remain confident we are in an execution phase focused on capturing the full return on those investments," said Peter Sprudzs, CFO.
First Quarter 2026 Highlights
-- First quarter 2026 net income was $1.5 million, or $0.44 per share, up
$296 thousand from the first quarter of 2025 and down $472 thousand from
the prior quarter. Notably, Q4 2025 results included unusual wealth
management revenues of approximately $400 thousand from an accounting
change and the recording of an incentive fee earned over the prior six
months from our brokerage partner.
-- Total assets ended the quarter at $1.04 billion, up $68.5 million or 7.0%
from a year ago and down $15.9 million, or 1.5% from the prior quarter.
The year-over-year increase was driven primarily by loan growth.
-- Cash balances decreased $27.5 million, or 35.0% from the prior
quarter and ended $16.0 million, or 47.1% higher than a year ago.
The decrease compared to the prior quarter end was primarily due
to the paydown of maturing wholesale liabilities, growth in loans,
and securities purchases.
-- Loans increased $13.4 million or 2.0% from the prior quarter and
ended $75.3 million, or 12.5% higher than a year ago.
-- Excluding funds from the wealth management business, client
deposits increased $12.4 million (1.9%) in Q1 2026 and grew $67.7
million (11.6%) from a year ago. Including wealth management
balances, client deposits grew $776 thousand and $71.5 million
over Q4 2025 and Q1 2025, respectively.
-- Net interest margin $(NIM)$ was 2.75%, up 14 basis points from the
prior quarter and up 22 basis points from the first quarter a year
ago.
-- Capital ratios continue to exceed regulatory well-capitalized minimums.
-- Assets under management (AUM) ended the quarter at $2.25 billion, down
1.6% from Q4 2025 and up 7.0% from Q1 2025. The decrease compared to the
prior quarter end was primarily due to market declines. Revenue from the
wealth management business decreased $398 thousand (8.1%) compared to the
prior quarter, primarily due to the absence in Q1 of approximately $400
thousand of unusual one-time revenue items recorded in Q4. Compared to
the first quarter a year ago, revenue from wealth management increased
$453 thousand (11.1%) reflecting the benefit of market increases and
business development efforts.
-- The efficiency ratio was 81.2% in Q1 2026, compared to 78.2% in Q4 2025
and 80.7% in Q1 2025. The efficiency ratio for Q4 2025 would have been
81.0%, excluding the favorable one-time variances within the wealth
management business.
-- The Company declared a regular quarterly cash dividend of $0.21 per
share.
Income Statement Review
The Company generated a return on average common equity of 9.56% and a return on average assets of 0.57% in Q1 2026, compared to 12.48% and 0.74%, respectively, in Q4 2025 and 7.71% and 0.46%, respectively, in Q1 2025.
"Net interest margin expansion continued this quarter, up 14 basis points sequentially and 22 basis points compared to the same period last year, reflecting disciplined management of our funding costs alongside improving earning asset yields. We remain well positioned to benefit from future Fed rate reductions should the monetary policy environment shift," said Sprudzs.
First quarter NIM improved to 2.75%, from 2.61% and 2.53% in Q4 2025 and Q1 2025, respectively. Quarter over quarter, earning asset yields increased by 4 basis points, the cost of interest-bearing liabilities decreased by 16 basis points, and other factors (most notably the contribution from derivative hedge positions) decreased 6 basis points. Reported NIM figures do not reflect the beneficial effect of the tax advantage provided by the Company's $148.9 million in municipal bond holdings.
Provision for credit losses was $346 thousand in Q1 2026, which consisted of a net $419 thousand addition to Allowance for Credit Losses (ACL) and a net $73 thousand reduction of the Liability for Unfunded Commitments. Provision for credit losses was $488 thousand in Q1 2025, which consisted of a net $436 thousand addition to the ACL and a $52 thousand addition in the Liability for Unfunded Commitments. "The increase in the provision for credit losses during the quarter was precautionary, reflecting the uncertain economic backdrop rather than deterioration observed in the performance of our loan portfolio," said Sprudzs.
Non-interest revenue for Q1 2026 totaled $5.1 million, down $242 thousand or 4.5% from Q4 2025, and up $680 thousand or 15.3% from Q1 2025. During the prior quarter, the Company instituted a change in accounting principle related to wealth management revenue recognition. This change resulted in one-time increases for Q4 2025 of approximately $218 thousand in revenue and approximately $905 thousand in equity.
-- Wealth management revenue totaled $4.5 million in Q1 2026, down $398
thousand or 8.1% from Q4 2025, and up $453 thousand or 11.1% from Q1
2025.
-- AUM ended the quarter at $2.25 billion, down 1.6% from $2.29
billion at the end of Q4 2025, and up 7.0% from $2.10 billion at
the end of Q1 2025. The decrease compared to the prior quarter was
primarily due to stock market declines.
-- Net revenue from brokerage commissions in Q1 2026 was $192 thousand, up
from $109 thousand in Q4 2025 and up from $106 thousand in Q1 2025.
Non-interest expense in Q1 2026 was $9.6 million, up $322 thousand (3.5%) from $9.3 million in Q4 2025, and up $1.5 million (19.1%) from $8.1 million in Q1 2025. Seasonally driven personnel costs account for a large portion of the variance.
"Our efficiency ratio moved higher in the first quarter, reflecting seasonal factors and continued investment in process improvements. We remain committed to the disciplined expense management and process improvements that drove our progress throughout 2025 and are confident in our ability to return to a more favorable efficiency trajectory as earnings momentum builds through the year," said Moran. The Company's efficiency ratio was 81.2% for Q1 2026, reflecting an 0.5% increase compared to the first quarter a year ago, and a 2.9% increase compared to the prior quarter. The efficiency ratio for Q4 2025 would have been 81.0%, excluding the favorable one-time variances within the wealth management business.
The Company's investments in Low Income Housing Tax Credits and tax-exempt municipal bonds continue to provide tax benefits. In Q1 2026, the net tax expense was $381 thousand, compared to $533 thousand in Q4 2025 and $233 thousand in Q1 2025. The effective tax rate for the first quarter of 2026 was 20.2%, compared to 21.3% for the fourth quarter of 2025 and 16.2% for the first quarter of 2025.
Balance Sheet Review
The Company's total assets at March 31, 2026 were $1.04 billion, down $15.9 million or 1.5% over Q4 2025, and up $68.5 million or 7.0% from the end of Q1 2025. The year over year increase was primarily driven by loan growth.
Gross loans increased $76.1 million, or 12.5% over the last 12 months, while growing $13.8 million or 2.1%, over the prior quarter, to $684.6 million at March 31, 2026. Loan growth continued to be broad based and well spread across several loan categories. Commercial loans increased 9.6% to $402.3 million at March 31, 2026, compared to $367.1 million a year earlier. Residential loans increased 18.5% to $265.0 million at March 31, 2026, compared to $223.5 million a year earlier. Consumer loans decreased 3.4% to $17.4 million at March 31, 2026, compared to $18.0 million a year earlier.
"Our performance highlights the strength of our balance sheet strategy. Over the past year, we have continued to support loan growth primarily through deposit momentum and a more streamlined investment portfolio, while maintaining excellent credit quality," said Sprudzs.
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