Tri-County Financial Corp. Optimistic About Future

Located in Waldorf, Md, the company operates 10 retail banking centers throughout Southern Maryland.

Tri-County Financial got $15.5 million from the Treasury Department in December through the Troubled Asset Relief Program, in exchange for preferred stock and warrants. As of the end of May, it has paid the government $343,500 in dividends on the shares.

According to the letter, although income declined by more than $1.1 million in the first six months of 2009 compared to the same period in 2008, the bank reported that its total assets grew nearly $61.7 million in the first half of the year (mainly from a 7.49 percent increase in the bank's loan portfolio).

Michael Middleton, chairman and president, assured shareholders in the letter that "The quality of the Bank's portfolio of investments and loans continued to remain strong," and that the management is "carefully monitoring asset quality" and conservatively calculating its loan loss provisions.

Middleton said that the aid from the Treasury department, together with its own capital, had "allowed the Bank to capitalize on local market opportunities." As a result, he said that non-interest-bearing deposits had increased 32.5 percent, the bank had not borrowed as much, costs had been reduced, and the bank's capacity to borrow money - if needed - had strengthened.

And he ended the letter on a hopeful note:

As we progress through the year, new economic data demonstrates the broad scope and impact of the crisis on our economy. Our market area, due to its proximity to the center of our government, has not experienced the profound effects as some have felt in other areas. Your Board and management approached this crisis in a very conservative manner and we are carefully navigating towards the recovery. There are significant opportunities in Southern Maryland and we are well positioned to capitalize on them. To that point, Tri-County Financial and its banking subsidiary, Community Bank, were named by U.S. Banker Magazine as one of the top 200 community banks with assets under two billion. The performance criterion for this category was the three year trend on Return on Equity. I look forward to your continued support as we serve Southern Maryland's banking needs.