Ledyard Financial Group Earns a Record $2.5 Million, or $0.73 Per Diluted Share, in Q3 2026 and Declares Quarterly Cash Dividend of $0.21 Per Share

Ledyard delivered record Q3 earnings, driven by strong loan and deposit growth.

What the company is saying

Ledyard Financial Group positions its third quarter as a record-breaking period, highlighting net income per diluted share of $0.73, up from $0.52 last quarter and $0.46 a year ago. CEO Josephine Moran attributes this performance to strategic investments, operational efficiency, and the 'One Ledyard' relationship model, expressing confidence in sustaining momentum. CFO Peter Sprudzs emphasizes disciplined loan pricing, improved deposit mix, and technology-driven efficiencies as drivers of the 42% quarter-over-quarter and 60.2% year-over-year net income growth. The company stresses broad-based loan growth, increased wealth management revenue, and a lower efficiency ratio as evidence that its strategy is working. Management also notes ongoing exploration of strategic partnerships in wealth management and a continued focus on community and employee priorities. The tone is confident, with claims of responsible growth and prudent balance sheet management.

What the data suggests

The numbers confirm a sharp improvement in profitability and operational scale. Net income for Q3 2026 was $2.5 million, up 60.2% year-over-year and 42.0% from the prior quarter, with EPS at $0.73. Total assets reached $1.16 billion, increasing $135.7 million (13.2%) from a year ago and $93.8 million (8.8%) from Q2. Gross loans grew $155.9 million (24.1%) year-over-year and $67.3 million (9.1%) quarter-over-quarter to $803.2 million, with commercial, residential, and consumer segments all expanding. Client deposits excluding wealth funds rose $45.8 million (7.2%) from Q2 and $72.5 million (11.9%) from Q3 2025, while including wealth balances, deposits increased $36.8 million and $67.3 million over the same periods. Net interest margin improved to 2.91%, up 10 basis points sequentially and 37 basis points year-over-year. Wealth management revenue increased $61 thousand (1.3%) from Q2 and $519 thousand (12.1%) from Q3 2025, with AUA at $2.59 billion. The efficiency ratio fell to 74.0% from 81.0% last quarter, showing better cost control. Non-interest revenue was $6.0 million, up $608 thousand (11.2%) from Q2 and $1.2 million (25.3%) from Q3 2025, with notable one-time gains offset by securities and loan sale losses. Credit quality remains solid, with ACL at 0.70% of loans and coverage of non-performing assets at 2.6x. The company declared a $0.21 per share dividend, yielding 3.82% annualized. No material gaps exist between claims and evidence; all major financial metrics are disclosed and trending positively.

Analysis

The announcement is a standard quarterly financial update, with all key claims supported by detailed, realised financial and operational data. The company discloses net income, EPS, loan and deposit growth, net interest margin, efficiency ratio, and other profitability and capital metrics, all with clear period-over-period comparisons. There is no reliance on forward-looking projections or aspirational statements in the headline claims; all improvements are already realised as of the reporting date. While some management commentary references ongoing strategy and confidence in future outlook, these are not presented as key claims or used to inflate the results. No large capital outlay is disclosed without immediate earnings impact, and the capital management actions (such as increased wholesale funding) are fully contextualised within the quarter's results. The tone is positive but proportionate to the strong, well-supported financial performance.

Risk flags

• ●Rapid loan growth—$155.9 million (24.1%) year-over-year and $67.3 million (9.1%) quarter-over-quarter—raises the risk of future credit quality deterioration if underwriting discipline weakens or economic conditions change.
• ●The efficiency ratio, while improved to 74.0%, still indicates relatively high non-interest expense, and further cost control may be needed to sustain margin gains if revenue growth slows.
• ●Increased reliance on wholesale funding, with borrowings and brokered deposits up $55.1 million and average term declining to 1.7 years, could expose the company to refinancing risk or higher funding costs if market conditions tighten.
• ●Non-recurring gains, such as the $1.1 million building sale, contributed to non-interest revenue and may not be repeatable, potentially making current earnings less sustainable if core revenue growth moderates.
• ●The effective tax rate rose to 19.6% from 16.4% last quarter, which could impact net income if it continues to climb, especially as tax benefits from municipal bonds and housing credits fluctuate.

Bottom line

Ledyard Financial Group's Q3 2026 results show strong, broad-based growth in earnings, loans, and deposits, with all key financial metrics moving in the right direction. The company has delivered on its operational and profitability targets, with realised improvements in net interest margin, efficiency, and wealth management revenue. While management's confidence is supported by the data, investors should monitor the sustainability of loan growth, the potential impact of higher funding and tax costs, and the one-off nature of some revenue gains. The dividend yield of 3.82% adds income appeal, but future quarters will need to show that core earnings momentum can be maintained without relying on asset sales or non-recurring items. The most important takeaway is that Ledyard is executing well on its growth strategy, but continued discipline in credit and cost management will be essential as the balance sheet expands.

Announcement summary

(OTC:LFGP) Ledyard Financial Group, Inc., the holding company for Ledyard National Bank, reported net income per diluted share of $0.73 for the third quarter ended September 30, 2026, compared to $0.52 in the prior quarter and $0.46 in the third quarter of 2025. Net income for Q3 2026 was $2.5 million, representing a 60.2% increase over the year-ago period and a 42.0% increase over the prior quarter. Total assets at quarter-end were $1.16 billion, up $135.7 million or 13.2% from a year ago and up $93.8 million or 8.8% from the prior quarter. Loans grew $67.1 million or 9.2% from the prior quarter and $154.7 million or 24.1% from a year ago. Excluding wealth management funds, client deposits increased $45.8 million (7.2%) from the prior quarter and $72.5 million (11.9%) from Q3 2025; including wealth management balances, client deposits increased $36.8 million over Q2 2026 and $67.3 million over Q3 2025. Net interest margin was 2.91%, up 10 basis points from Q2 2026 and 37 basis points from Q3 2025. Assets Under Administration (AUA) ended the quarter at $2.59 billion, up 0.8% from $2.57 billion at Q2 2026 and up 7.9% from $2.40 billion at Q3 2025. Wealth management revenue increased $61 thousand (1.3%) from the prior quarter and $519 thousand (12.1%) from the year-ago quarter. The efficiency ratio was 74.0% for Q3 2026, compared to 81.0% in Q2 2026 and 82.4% in Q3 2025. The company declared a regular quarterly cash dividend of $0.21 per share. Return on average common equity was 15.08% and return on average assets was 0.90% in Q3 2026. Provision for credit losses was $471 thousand, with a net increase in credit reserves of $192 thousand and net charge-offs of $279 thousand. Non-interest revenue for Q3 2026 totaled $6.0 million, up $608 thousand (11.2%) from Q2 2026 and up $1.2 million (25.3%) from Q3 2025. Net revenue from brokerage commissions in Q3 2026 was $114 thousand, down from $196 thousand in Q2 2026 and $124 thousand in Q3 2025. Non-interest revenue included $174 thousand in swap gain revenue and a $1.1 million gain from the sale of a portion of a bank-owned building, with a net effect of $374 thousand to non-interest revenue and a $31 thousand reduction in non-interest income due to derivatives accounting. The company sold $13.3 million in available-for-sale securities and $3.5 million in residential loans during the quarter. Non-interest expense in Q3 2026 was $10.1 million, up $78 thousand (0.8%) from Q2 2026 and up $1.1 million (11.6%) from Q3 2025. Net tax expense was $602 thousand in Q3 2026, with an effective tax rate of 19.6%. Gross loans increased $155.9 million (24.1%) over the last 12 months and $67.3 million (9.1%) over the prior quarter, to $803.2 million at September 30, 2026. Commercial loans increased 17.0% to $448.9 million, residential loans increased 36.0% to $333.9 million, and consumer loans increased 13.5% to $20.4 million, all compared to a year earlier. Credit reserves totaled $5.9 million, including $5.6 million in ACL and $230 thousand in liability for unfunded commitments. ACL was 0.70% of gross loan balances at September 30, 2026. Client deposits excluding wealth funds increased $45.8 million (7.2%) during Q3 2026 and $72.5 million (11.9%) from a year ago. Wealth management fund deposit balances decreased $9.0 million from Q2 2026 and $5.1 million from Q3 2025. The company maintained a deposit base of approximately 80% retail and 20% commercial deposits, with about 83% of deposits insured. Wholesale borrowings and brokered deposits increased by $55.1 million quarter over quarter, with an average wholesale funding term of 1.7 years at September 30, 2026. Readily accessible borrowing capacity exceeded $158.0 million at quarter-end. Shareholders’ equity was $64.9 million, up $13 thousand from the prior quarter and $5.5 million (9.2%) from September 30, 2025. Book value per share excluding and including AOCI was $22.85 and $18.62, respectively, at September 30, 2026. The quarterly dividend of $0.21 per share is payable December 11, 2026, to shareholders of record as of November 20, 2026, representing an annualized yield of approximately 3.82%.

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