Ledyard Financial Group Reports Financial Results for the Second Quarter

Ledyard Financial Group, Inc. (ticker symbol LFGP), the holding company for Ledyard National Bank, today reported its financial results for the second quarter of 2010. Some of the highlights were:

• Record total revenue [net interest income plus non-interest income] was reported for the quarter and on a year to date basis.
• Capital remains strong as shareholders’ equity was $34.2 million at the end of the second quarter 2010, a record high.
• Ledyard Financial Advisors reported record revenue for the quarter and on a year-to-date basis.
• Revenue from new business at Ledyard Financial Advisors totaled $416,136 for the first six months of 2010.

Net income for the quarter ended June 30, 2010 was $628,165, or $0.61 per share compared to $434,389 or $0.42 per share for the same period in 2009, an increase of $193,776 or 44.61%. Net income for the six months ended June 30, 2010, was $1,294,759 or $1.26 per share compared to $867,967 or $0.85 per share for the same period in 2009, an increase of $426,792 or 49.17%.

Our total revenue for the quarter ended June 30, 2010 was $4,993,487, compared to $4,978,767 for the same period in 2009. Total revenue for the six months ended June 30, 2010 was $9,939,245, compared to $9,749,113 for the same period in 2009, an increase of $190,132 or 1.95%. Net interest income for the quarter ended June 30, 2010 was $3,005,245, compared to $3,224,692 for the same period in 2009, for a decrease of $219,447 or 6.81%. Net interest income for the six months ended June 30, 2010 was $6,100,417 compared to $6,425,767 for the same period in 2009, for a decrease of $325,350 or 5.06%. The primary factors contributing to the decrease in net interest income have been the slow down in lending activity and the low level of interest rates.

For the quarter ended June 30, 2010, $150,000 was added to the allowance for loan losses ("Allowance”) compared to $600,000 for the same period in 2009. For the six months ended June 30, 2010, $300,000 was added to the Allowance compared to $1,550,000 for the same period in 2009. The total Allowance was $6.6 million at June 30, 2010, compared to $6.2 million for the same period in 2009. Total non-performing assets were $5.26 million at June 30, 2010, compared to $5.05 million for the same period in 2009.

Ledyard Financial Advisors, a division of Ledyard National Bank, reported record revenue for the quarter ended June 30, 2010 of $1,535,857, compared to $1,212,332 for the same period in 2009, an increase of $323,525 or 26.69%. Revenue for the six months ended June 30, 2010 was $2,987,772, also a record, compared to $2,376,261 for the same period in 2009, for an increase of $611,511 or 25.73%. Assets under management and custody at Ledyard Financial Advisors totaled $805 million as of quarter end, an increase of $120 million over the prior year.

Non-interest expense for the quarter ended June 30, 2010 was $4,010,621, compared to $3,796,077 for the same period in 2009, for an increase of $214,544 or 5.65%. Non-interest expense for the six months ended June 30, 2010 was $7,924,636 compared to $6,996,946 for the same period in 2009, for an increase of $927,690 or 13.26%. The majority of the increase was due to increases in salary and employee benefits. Increased staffing expense is due to additions to staff in our lending and credit areas, as well as at Ledyard Financial Advisors, as we continue to invest in our core businesses. Increased health care costs contributed to the increase in employee benefits.

At June 30, 2010, the Company’s shareholders’ equity stood at $34.2 million, compared to $31.9 million for the same period in 2009. All of the Company’s capital ratios are well in excess of the amount required by the Federal Reserve for a bank holding company to be considered "well capitalized.” At June 30, 2010, the Company’s book value per share stood at $33.33 compared to $31.25 for the same period in 2009.

Loans, net of the allowance for loan losses at June 30, 2010, were $197.4 million, compared to $218.4 for the same period last year. Total deposits at June 30, 2010 were $306.8 million, a decrease of $3.6 million from the same period last year. Total assets of the Company were $387.1 million at June 30, 2010, an increase of $11.8 million over the prior year. Advances from the Federal Home Loan Bank increased by $10.0 million from $19.7 million at June 30, 2009 to $29.7 million at June 30, 2010.

A quarterly cash dividend of $.31 per share was declared on July 23, 2010 to shareholders of record as of August 6, 2010, payable September 3, 2010.

Ledyard Financial Group, Inc., headquartered in Hanover, New Hampshire, is the holding company for Ledyard National Bank. Ledyard National Bank, founded in 1991, is a full service community bank offering a broad range of banking, investment, tax and wealth management services in the Dartmouth-Lake Sunapee Region. Ledyard National Bank has eight offices with locations in Hanover, Lebanon, Lyme, New London, and West Lebanon, New Hampshire and in Norwich, Vermont.

Ledyard Financial Group, Inc. shares can be bought and sold through the NASD sanctioned "Pink Sheets” under the trading symbol LFGP. Shares may be traded through an individual’s broker. For more information, please refer to the "Investor Relations” section of the bank’s website at www.ledyardbank.com or contact the Company’s Chief Financial Officer, Gregory D. Steverson.