[LETTERHEAD OF TRI-COUNTY FINANCIAL CORPORATION]

Dear Shareholder:

         I am pleased to report to you the results of operations for Tri-County
Financial Corporation and its banking subsidiary, Community Bank of Tri-County,
for the nine months ended September 30, 2005. Net income for the period was
$3,093,517 compared to $2,774,080 during the same period in 2004; an increase of
11.5%. Basic earnings per share increased by $0.26 to $2.68 per share compared
to $2.42 for the nine months ended September 2004.

         Total assets increased to $528,722,498 from $505,767,123 at December
31, 2004. As in the past several quarters, lending accounted for the largest
component of the asset growth. During the nine-month period, net loans
receivable grew by 14.1% to $348,652,999 while overall investments in securities
decreased by 22% or $39,600,166. This reflects the rapid principal reductions of
the investment portfolio and its corresponding wholesale funding. The net
proceeds from maturing securities, combined with retail deposit increases,
funded the robust lending growth. As the economy shifts into its expansionary
phase, it is expected that the level of investment securities held by the
Company will continue to diminish as a percentage of earning assets and should
be replaced by retail growth.

         With respect to retail deposits, the Bank continues to increase its
share of the market throughout Southern Maryland and has experienced 15.3%
retail deposit growth for the nine-month period. With the internet bank, nine
well-positioned retail centers and a product mix of retail and commercial
offerings, I am optimistic that Community Bank will become the bank of choice.

         With your continued support, I am optimistic about the success of the
company and its efforts to enhance our shareholders' investment.

                                               Yours truly,

                                               /s/ Michael L. Middleton

                                               Michael L. Middleton
                                               President
                                               Chairman of the Board