8-K

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

       Date of Report (Date of earliest event reported): December 28, 2006
                                                         -----------------

                        TRI-COUNTY FINANCIAL CORPORATION
                        --------------------------------
             (Exact name of registrant as specified in its charter)

         Maryland                       0-18279               52-1652138
         --------                       ---------             ----------
(State or other Jurisdiction of        (Commission           (IRS Employer
incorporation or organization)         File Number)         Identification No.)

                 3035 Leonardtown Road, Waldorf, Maryland 20601
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (301) 645-5601
                                 --------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
                                 --------------
          (Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.01       RESULTS OF OPERATION AND FINANCIAL CONDITION.
                --------------------------------------------

         On December 28, 2006, Tri-County Financial Corporation, the holding
company for Community Bank of Tri-County, disseminated a letter to its
stockholders in which it reported the results of operations and financial
condition for the nine months ended September 30, 2006.

         A copy of the letter sent to stockholders is attached as Exhibit 99.1
and incorporated herein by reference.

ITEM 9.01       FINANCIAL STATEMENTS AND EXHIBITS.
                ---------------------------------

         (a)    Financial Statements of Businesses Acquired: Not applicable

         (b)    Pro Forma Financial Information:  Not applicable

         (c)    Shell Company Transactions:  Not applicable

         (d)    Exhibits


                Number            Description
                ------            -----------

                99.1              Letter to Stockholders




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                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.



Dated: December 28, 2006               By:/s/ Michael L. Middleton
                                           -------------------------------------
                                           Michael L. Middleton
                                           President and Chief Executive Officer

EX-99.1

                                                                    EXHIBIT 99.1

                [LETTERHEAD OF TRI-COUNTY FINANCIAL CORPORATION]


Dear Shareholder:

I am pleased to report to you the results of operations of Tri-County Financial
Corporation and its banking subsidiary, Community Bank of Tri-County, for the
nine months ended September 30, 2006. Net income increased by $41,608 compared
to the nine months ended September 30, 2005 and diluted earnings per share were
$1.11 compared to $1.12 for the nine months ended September 30, 2005. Total
assets increased to $566,301,197 up $25,013,172, or 4.6%, from December 31,
2005.

The modest increase in net income for the nine months of 2006 was produced by
the increase in net interest income of $1,413,412, or 12.3%, over the same
period for 2005, and an increase in non-interest income of $200,000, or 15.4%,
over the same period for 2005 that offset the growth in non-interest expense.
The increase in net interest income was achieved during an interest rate
condition called a "negative yield curve." During periods, such as this stage of
the economic recovery when short-term rates exceed long-term rates, it is
difficult for financial institutions to maintain a positive spread over the cost
of funds as rates on deposits and borrowings tend to reprice quicker than rates
on loans. Tri-County's net interest income growth reflects the emphasis on
shorter-term, floating-rate loans, particularly commercial loans, and
lower-costing retail funding during the expansion phase of the recovery. With
the increase in commercial lending experienced over the last several quarters,
the loan loss provision for the nine months ended September 30, 2006 increased
by $88,828. Non-interest income increased through increased bank service fees
and income earned on additional Bank Owned Life Insurance (BOLI) purchases
during the period. Non-interest expense increased by $1,491,641, or 18.9%,
reflecting the cost of compliance with Sarbanes-Oxley certification, and other
regulatory and internal audit expenses. These costs, coupled with the cost of
attracting and retaining professional banking management and staff, as well as
increased marketing expenditures, accounted for the increase.

Retail loan growth continues to be strong despite the slowing of the economic
pace in southern Maryland. Funding for this growth was achieved largely through
retail deposit growth of 10%, or $37,002,149, from the December 31, 2005 level.
With the robust deposit growth experienced over the last several quarters, and
the award winning marketing campaigns, according to the latest FDIC Survey,
Community Bank garnered the third place in deposit market share in southern
Maryland.

As mentioned in previous reports, the Bank is in the process of establishing its
tenth branch in Lusby, Calvert County, Maryland. Based on recent estimates from
the developer of the project, construction should start in the second quarter of
2007. Separate from this project, additional property was purchased adjacent to
the Leonardtown facility that will permit the construction of a 13,000 sq. ft.
building to serve as a retail center and regional office for the Bank. This is
an important addition of space to accommodate the Bank's rapid growth.
Construction is expected to commence in the second quarter of 2007 as well.

On behalf of your board and management, I look forward to the future with
optimism as we strive to increase our shareholder's franchise value. Thank you
for your continued support.

Yours truly,


/s/ Michael L. Middleton

Michael L. Middleton
President
Chairman of the Board