Community Heritage Financial, Inc. Reports Record Earnings for the First Quarter 2026

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Apr 23, 2026, 13:04 ET

MIDDLETOWN, Md., April 23, 2026 /PRNewswire/ -- Community Heritage Financial, Inc. (the "Company" or "CHF") (OTCID: CMHF), the parent company of Middletown Valley Bank ("MVB" or the "Bank"), reported net income of $2.9 million, or $0.97 per diluted share, for the three months ended March 31, 2026, representing an increase of $970 thousand, or 51.5%, over net income of $1.9 million, or $0.64 per diluted share, reported for the same period in 2025. Compared to fourth quarter 2025 results of $2.4 million, or $0.80 per diluted share, net income improved $484 thousand, or 20.4%.

Balance Sheet

Assets totaled $1.15 billion as of March 31, 2026, representing an increase of $24.3 million since December 31, 2025, and an increase of $95.3 million since March 31, 2025. Growth since December 31, 2025 was driven by growth in deposits and advances from the Federal Home Loan Bank ("FHLB") of $12.0 million and $9.0 million, respectively. Growth since March 31, 2025 was driven by growth in deposits and advances from the FHLB of $64.1 million and $17.0 million, respectively.

Loan balances outstanding grew to $947.9 million as of March 31, 2026, representing an increase of $17.1 million, or 7.3% annualized from December 31, 2025, and $84.6 million, or 9.8%, from March 31, 2025. Residential loans, including home equity loans, commercial and industrial loans and owner occupied commercial real estate loans, grew $7.4 million, $6.1 million, and $5.1 million, respectively, since December 31, 2025. A decline in construction and land development loans of $2.7 million during the same period offset the growth in other loan portfolios. Since March 31, 2025, growth in residential real estate loans, including home equity loans, construction and land development loans, non-owner occupied commercial real estate loans, commercial and industrial loans and owner occupied commercial real estate loans of $30.7 million, $19.0 million, $15.5 million, $13.7 million, and $8.7 million, respectively, contributed to total net growth of $84.6 million.

Net Interest Income

Net interest income totaled $10.0 million during the three months ended March 31, 2026, compared to $9.6 million for the three months ended December 31, 2025 and $8.4 million for the same period in 2025. On a quarterly basis, the net interest margin (the "NIM") increased from 3.36% during the first quarter of 2025 to 3.56% and 3.62% during the fourth quarter of 2025 and first quarter of 2026, respectively. The Company's improving NIM reflects continued upward repricing of fixed rate loans and securities booked during a period of lower interest rates, and a falling cost of total funds driven by cuts to short-term interest rates during the fourth quarters of both 2024 and 2025 by the Federal Reserve Bank. The Company's yield on earning assets increased from 5.29% for the first quarter of 2025 to 5.39% for the first quarter of 2026. The Company's cost of funds decreased from 2.06% for the first quarter of 2025 to 1.85% for the first quarter of 2026.

Noninterest Income

Linked Quarter: First Quarter 2026 vs. Fourth Quarter 2025 – Noninterest income in the first quarter 2026 declined $253 thousand compared to the fourth quarter 2025. Mortgage banking revenue decreased $191 thousand with decreased mortgage origination and sale activity, reflecting volatile interest rates during the first quarter of 2026. Earnings on bank-owned life insurance decreased $36 thousand and reflected equity market performance on a relative basis.

First Quarter 2026 vs. First Quarter 2025 – Noninterest income increased $49 thousand. Mortgage banking revenue increased $73 thousand with modest improvement in quarterly secondary market sales volume. In addition, card and merchant services fees and service charges on deposits increased $32 thousand and $28 thousand, respectively, with increased transaction volume and account growth. Other noninterest income decreased $72 thousand as broker fees received in 2025 for referrals of Small Business Administration qualified loans totaling $72 thousand were not replicated in 2026.

Noninterest Expense

Linked Quarter: First Quarter 2026 vs. Fourth Quarter 2025 – Noninterest expense decreased $337 thousand on a linked quarter basis. The decrease included decreases in (i) FDIC insurance expense of $189 thousand, as the fourth quarter 2025 expense included a one-time $200 thousand accrual adjustment, and (ii) salaries and employee benefits expense of $122 thousand, reflecting lower health care costs.

First Quarter 2026 vs. First Quarter 2025 – Noninterest expense increased $593 thousand quarter over quarter. Growth included increases in data and item processing of $185 thousand, salaries and employee benefits expense of $132 thousand, occupancy and equipment expense of $91 thousand, and other noninterest expenses of $157 thousand. The increase in data and item processing reflected general growth and increased processing activity. The increase in salaries and employee benefits expense reflected annual merit increases and new hire activity. The increase in occupancy and equipment expense was driven by additional lease and depreciation expense associated with the relocation of an existing branch facility and the renovation of a second branch facility. The increase in other noninterest expenses included increases in donations and sponsorships expense of $40 thousand, training and development expense of $35 thousand and ATM card expenses of $27 thousand.

Asset Quality

The ratio of the allowance for credit losses (the "ACL") to loans (the "ACL – loans ratio") was 1.02% as of March 31, 2026 compared to 1.06% as of December 31, 2025. The ACL as of December 31, 2025 included a specific reserve totaling $748 thousand representing 100% of the outstanding balance of a single commercial loan to a borrower that uncovered internal theft by one of its owners. Exclusive of this specific reserve and the related loan balance, the adjusted ACL – loans ratio as of December 31, 2025 was 0.98%. During the first quarter of 2026, the Bank charged off the balance of $748 thousand. The increase in the ACL – loans ratio from 0.98%, as adjusted, as of December 31, 2025 to 1.02% as of March 31, 2026 generally reflected geopolitical turmoil and the uncertainty of the impact on economic conditions. During the first quarter of 2026, the Bank also recorded a loan loss recovery of $653 thousand related to a loan charged off in 2021. As a result of the loan loss recovery, offset by the increase in the ACL, the Bank recorded a negative provision for credit losses of $77 thousand during the first quarter of 2026.

As of March 31, 2026, non-performing assets totaled $1.2 million, or 0.11% of total assets, compared to $2.0 million, or 0.18% of total assets as of December 31, 2025, and $1.5 million, or 0.14% of total assets, as of March 31, 2025. The ratio of net charge-offs to average total loans was 0.01% for the quarter ended March 31, 2025 and zero percent for the year ended December 31, 2025.

Dividend

The Board of Directors declared a dividend of $0.08 per common share on April 17, 2026, payable on May 8, 2026 to stockholders of record as of May 1, 2026.

Reclassification

Reclassifications of certain previously reported amounts have been made to conform to current period reporting. No such reclassifications were significant.

Non-GAAP Financial Measures

The Company may include certain non-GAAP financial measures in this press release. The Company believes these financial measures provide useful information to investors in understanding the Company's performance and performance trends to facilitate comparisons with the performance of others in the industry. These non-GAAP financial measures should not be considered an alternative to GAAP and users should recognize the non-GAAP financial measures presented by the Company might not be comparable to measures of other companies with similar titles.

Forward-Looking Statements

This press release may contain forward-looking statements with respect to the Company's financial condition, results of operations and business. Forward-looking statements can be identified by words such as "expects", "anticipates", "believes", "estimates", "projects", "continue", "plans", "intends", the negative of these words and other comparable terminology. These forward-looking statements may be included in comments regarding future financial performance, expected levels of future revenue and expenses such as credit losses, growth strategies, new business initiatives, and anticipated trends impacting performance. Forward-looking statements are not historical facts nor an assurance of future performance. While we believe the expectations of forward-looking statements to be reasonable, actual results may differ materially as forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and often outside of the control of the Company. Therefore, users should not rely on forward-looking statements.

Community Heritage Financial, Inc.
Robert E. (BJ) Goetz, Jr.
President & Chief Executive Officer
301-371-3055

John A. Scaldara, Jr.
Executive Vice President and Chief Financial Officer
301-371-3070

Community Heritage Financial , Inc. and Subsidiaries

Balance Sheets (unaudited)

			As of Period End
			3/31/2026	12/31/2025	9/30/2025	6/30/2025	3/31/2025

ASSETS
	Cash and due from banks		$ 41,117,713	$ 30,707,438	$ 28,508,739	$ 67,210,170	$ 41,754,293
	Securities available-for-sale, at fair value		51,710,763	53,681,375	54,390,834	46,712,422	42,514,398
	Securities held-to-maturity		85,592,007	86,553,557	87,642,810	88,807,858	90,382,973
		Less allowance for credit losses	50,414	78,511	73,338	92,176	93,416
		Total securities held-to-maturity	85,541,593	86,475,046	87,569,472	88,715,682	90,289,557

		Total securities	137,252,356	140,156,421	141,960,306	135,428,104	132,803,955
	Equity securities, at cost		2,709,200	2,281,700	951,700	1,426,700	1,901,700
	Loans		947,933,729	930,855,154	899,798,030	872,116,129	863,383,714
		Less allowance for credit losses	9,701,472	9,842,370	9,648,797	8,675,088	8,525,628
		Loans, net	938,232,257	921,012,784	890,149,233	863,441,041	854,858,086
	Loans held for sale		3,241,537	3,935,463	3,782,055	1,445,377	564,685
	Premises and equipment		6,238,824	6,423,885	6,335,780	6,169,205	5,587,862
	Right-of-use asset		4,903,838	5,014,155	1,691,267	1,816,066	1,939,827
	Accrued interest receivable		3,607,585	3,397,155	3,433,569	3,422,469	3,342,795
	Deferred tax assets		4,226,269	4,452,078	4,501,612	4,356,321	4,431,764
	Bank-owned life insurance		7,858,667	7,837,986	7,656,529	7,570,668	7,443,531
	Goodwill		1,656,507	1,656,507	1,656,507	1,656,507	1,656,507
	Other assets		2,311,950	2,204,457	1,836,331	1,666,160	1,781,387

		Total Assets	$ 1,153,356,703	$ 1,129,080,029	$ 1,092,463,628	$ 1,095,608,788	$ 1,058,066,392

LIABILITIES and SHAREHOLDERS' EQUITY

	Liabilities
		Deposits:
		Noninterest-bearing demand	$ 272,084,060	$ 257,415,232	$ 255,052,436	$ 256,355,584	$ 247,511,094
		Interest-bearing	724,715,536	727,389,108	727,289,753	721,494,804	685,201,331
		Total deposits	996,799,596	984,804,340	982,342,189	977,850,388	932,712,425
		FHLB advances and other borrowings	42,000,000	33,000,000	5,000,000	15,000,000	25,000,000
		Subordinated debt, net	12,056,006	12,052,944	12,049,882	12,046,819	12,043,757
		Lease liabilities	4,983,788	5,088,540	1,760,706	1,886,828	2,011,829
		Accrued interest payable	720,468	473,682	709,739	567,996	730,113
		Other liabilities	5,272,313	4,809,964	4,306,714	4,321,095	4,380,812

		Total Liabilities	1,061,832,171	1,040,229,470	1,006,169,230	1,011,673,126	976,878,936

	Shareholders' Equity
		Common stock	29,459	29,327	29,291	29,289	29,289
		Additional paid-in-capital	41,642,026	41,649,351	41,588,025	41,469,625	41,351,223
		Retained earnings	54,931,337	52,313,860	50,180,223	48,480,152	46,246,459
		Accumulated other comprehensive loss	(5,078,290)	(5,141,979)	(5,503,141)	(6,043,404)	(6,439,515)

		Total Shareholders' Equity	91,524,532	88,850,559	86,294,398	83,935,662	81,187,456

		Total Liabilities and Shareholders' Equity	$ 1,153,356,703	$ 1,129,080,029	$ 1,092,463,628	$ 1,095,608,788	$ 1,058,066,392

Community Heritage Financial , Inc. and Subsidiaries

Statements of Income (unaudited)

			Three Months Ended

			3/31/2026	12/31/2025	9/30/2025	6/30/2025	3/31/2025

Interest Income
	Loans, including fees		$ 13,870,716	$ 13,604,427	$ 13,086,145	$ 12,597,796	$ 12,228,538
	Securities		989,011	994,358	946,231	888,721	858,632
	Fed funds sold and other bank deposits		84,701	176,658	511,786	467,029	119,202
		Total interest income	14,944,428	14,775,443	14,544,162	13,953,546	13,206,372

Interest Expense
	Deposits		4,431,541	4,873,913	5,031,782	4,758,194	4,405,731
	Subordinated debt		207,250	207,250	207,249	207,250	207,250
	Other borrowed funds		295,339	57,799	137,305	149,325	189,055
		Total interest expense	4,934,130	5,138,962	5,376,336	5,114,769	4,802,036

Net interest income			10,010,298	9,636,481	9,167,826	8,838,777	8,404,336
Provision for credit losses			(77,299)	124,140	960,847	148,330	248,558
Net interest income after provision
	for credit losses		10,087,597	9,512,341	8,206,979	8,690,447	8,155,778

Noninterest income
	Card and merchant services		313,701	337,191	333,325	310,082	281,415
	Service charges on deposits		262,717	252,477	254,754	231,856	235,097
	Mortgage banking revenue		236,836	428,177	348,561	406,440	164,015
	Earnings on bank-owned life insurance		12,390	48,166	77,570	118,847	23,920
	Other		5,672	18,737	40,436	25,959	77,870
		Total noninterest income	831,316	1,084,748	1,054,646	1,093,184	782,317

Noninterest expense
	Salaries and employee benefits		3,979,145	4,101,261	3,861,631	3,660,059	3,847,202
	Data and item processing		1,030,332	1,043,435	940,872	911,744	845,027
	Occupancy and equipment		761,855	709,382	641,092	623,512	670,904
	Legal and professional fees		257,974	320,853	332,527	366,768	277,977
	FDIC insurance		200,001	389,431	166,176	170,937	142,866
	Advertising		97,674	74,846	91,883	79,253	107,375
	Other		744,926	769,525	658,319	604,861	587,891
		Total noninterest expense	7,071,907	7,408,733	6,692,500	6,417,134	6,479,242

Income before income tax expense			3,847,006	3,188,356	2,569,125	3,366,497	2,458,853
Income tax expense			994,757	820,106	634,729	898,493	576,217
Net income			$ 2,852,249	$ 2,368,250	$ 1,934,396	$ 2,468,004	$ 1,882,636


Community Heritage Financial , Inc. and Subsidiaries

Per Share Data (unaudited)

			Three Months Ended
			3/31/2026	12/31/2025	9/30/2025	6/30/2025	3/31/2025

Earnings per common share
	Basic		$ 0.97	$ 0.81	$ 0.66	$ 0.84	$ 0.64
	Diluted		$ 0.97	$ 0.80	$ 0.66	$ 0.84	$ 0.64
Common shares outstanding at period end			2,945,928	2,932,680	2,929,053	2,928,888	2,928,888
Average common shares outstanding
	Basic		2,936,041	2,932,562	2,929,012	2,928,888	2,922,624
	Diluted		2,947,910	2,956,327	2,952,922	2,944,207	2,937,508
Cash dividends paid per common share			$ 0.08	$ 0.08	$ 0.08	$ 0.08	$ 0.08

Community Heritage Financial , Inc. and Subsidiaries

Selected Financial Data (unaudited)

		As of Period End
		3/31/2026	12/31/2025	9/30/2025	6/30/2025	3/31/2025

Per Share Data
	Common shares outstanding at period end	2,945,928	2,932,680	2,929,053	2,928,888	2,928,888
	Book value per share	$ 31.07	$ 30.30	$ 29.46	$ 28.66	$ 27.72
	Tangible book value per share	$ 30.51	$ 29.73	$ 28.90	$ 28.09	$ 27.15

Capital (bank consolidated only unless noted otherwise)
	Common equity tier 1 (CET1) capital	12.02 %	11.96 %	12.15 %	12.28 %	12.11 %
	Tier 1 capital	12.02 %	11.96 %	12.15 %	12.28 %	12.11 %
	Total risk-based capital	13.16 %	13.14 %	13.37 %	13.41 %	13.23 %
	Tier 1 leverage ratio	9.47 %	9.48 %	9.32 %	9.29 %	9.47 %
	Tangible common equity to tangible assets (CHF)	7.80 %	7.74 %	7.76 %	7.52 %	7.53 %

Asset Quality Data
	Nonaccrual loans	$ 1,232,834	$ 2,025,128	$ 2,044,469	$ 1,442,329	$ 1,488,718
	Non-performing assets	$ 1,232,834	$ 2,025,128	$ 2,044,469	$ 1,442,329	$ 1,488,718
	Non-performing assets plus loans past due 90+ days	$ 1,232,834	$ 2,025,128	$ 2,044,469	$ 1,442,329	$ 1,488,718
	Non-performing loans to loans	0.13 %	0.22 %	0.23 %	0.17 %	0.17 %
	Non-performing assets to total assets	0.11 %	0.18 %	0.19 %	0.13 %	0.14 %
	Net (charge-offs) / recoveries	$ (90,410)	$ 3,450	$ 3,450	$ 4,520	$ 2,400
	Net loan charge-offs to average loans	0.01 %	0.00 %	0.00 %	0.00 %	0.00 %
	ACL - loans¹to total loans	1.02 %	1.06 %	1.07 %	0.99 %	0.99 %
	ACL - loans¹to non-performing assets plus loans past due 90+ days	786.92 %	486.01 %	471.95 %	601.46 %	572.68 %

Other Data
	Return on average assets	1.02 %	0.85 %	0.70 %	0.92 %	0.74 %
	Return on average equity	12.71 %	10.63 %	8.96 %	11.93 %	9.47 %
	Net interest margin	3.62 %	3.56 %	3.40 %	3.37 %	3.36 %
	Yield on interest-earning assets	5.39 %	5.45 %	5.38 %	5.32 %	5.29 %
	Cost of interest-bearing liabilities	2.56 %	2.73 %	2.85 %	2.80 %	2.78 %
	Loans to deposits ratio	95.10 %	94.52 %	91.60 %	89.19 %	92.57 %

	¹ "ACL-loans" relates to the allowance for credit losses specific to loans outstanding and does not include the allowance for credit losses related to off-balance sheet credit exposure or the allowance for credit losses related to securities held-to-maturity.

Community Heritage Financial , Inc. and Subsidiaries

Condensed Average Balance Sheet Analysis (unaudited)

			Three Months Ended
			March 31, 2026			December 31, 2025			March 31, 2025
			Average Balance	Interest	Yield / Rate	Average Balance	Interest	Yield / Rate	Average Balance	Interest	Yield / Rate
			Average Balance	Interest	Yield / Rate	Average Balance	Interest	Yield / Rate	Average Balance	Interest	Yield / Rate
ASSETS
	Interest-earning assets:
		Loans, including LHFS	$ 945,455,025	$ 13,870,716	5.83 %	$ 912,725,275	$ 13,604,427	5.92 %	$ 857,799,175	$ 12,228,538	5.76 %
		Securities	141,858,443	989,011	2.79 %	141,711,495	994,358	2.81 %	135,129,415	858,632	2.54 %
		Fed funds sold and other bank deposits	14,241,106	84,701	2.36 %	23,885,027	176,658	2.93 %	16,389,959	119,202	2.95 %
			1,101,554,574	14,944,428	5.39 %	1,078,321,797	14,775,443	5.45 %	1,009,318,549	13,206,372	5.29 %

	Noninterest-earning assets		27,232,242			22,566,196			22,046,233

		Total Assets	$ 1,128,786,816			$ 1,100,887,993			$ 1,031,364,782

LIABILITIES AND SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
		Demand deposits	$ 540,203,233	$ 2,858,754	2.10 %	$ 543,210,487	$ 3,171,644	2.32 %	$ 511,603,640	$ 2,964,668	2.35 %
		Time deposits	182,279,894	1,572,787	3.42 %	185,466,889	1,702,269	3.64 %	156,928,392	1,441,063	3.72 %
		Interest-bearing deposits	722,483,127	4,431,541	2.43 %	728,677,376	4,873,913	2.65 %	668,532,032	4,405,731	2.67 %
		Borrowings	42,349,733	502,589	4.72 %	17,706,873	265,049	5.98 %	30,466,939	396,305	5.24 %
		Interest-bearing liabilities	764,832,860	4,934,130	2.56 %	746,384,249	5,138,962	2.73 %	698,998,971	4,802,036	2.78 %
	Noninterest-bearing liabilities:
		Demand deposits	260,898,989			259,251,011			244,507,561
		Other	12,053,230			6,860,187			7,266,291

		Total Liabilities	1,037,785,079			1,012,495,447			950,772,823

		Cost of Total Deposits			1.79 %			1.96 %			1.96 %
		Cost of Total Funds (interest-
		bearing liabilities plus non-
		interest-bearing deposits)			1.85 %			2.02 %			2.06 %

	Shareholders' equity		91,001,737			88,392,546			80,591,959

		Total Liabilities and Shareholders Equity	$ 1,128,786,816			$ 1,100,887,993			$ 1,031,364,782

		Net interest income / NIM		$ 10,010,298	3.62 %		$ 9,636,481	3.56 %		$ 8,404,336	3.36 %

Community Heritage Financial , Inc. and Subsidiaries

Loan and Deposit Composition (unaudited)

			As of Period End
			3/31/2026	12/31/2025	9/30/2025	6/30/2025	3/31/2025

Loans:
Commercial real estate:
	Construction and land development		$ 84,428,311	$ 87,098,819	$ 80,671,698	$ 67,819,407	$ 65,421,754
	Multifamily		23,033,500	23,416,919	22,749,443	22,989,449	24,142,268
	Farmland		30,473,035	30,057,354	29,121,486	32,872,235	32,376,907
	Other:
		Owner occupied	152,110,763	147,006,921	142,991,662	139,335,615	143,451,648
		Non-owner occupied	178,593,573	177,115,227	170,462,324	164,434,003	163,089,171

Residential real estate, including home equity			329,551,095	322,126,792	314,145,221	307,500,247	298,829,304
Commercial and industrial			145,316,304	139,246,435	135,174,298	132,669,094	131,591,369
Consumer			936,235	1,181,301	868,300	847,668	915,551
		Gross loans	944,442,816	927,249,768	896,184,432	868,467,718	859,817,972
		Net deferred loan costs	3,490,913	3,605,386	3,613,598	3,648,411	3,565,742
		Total Loans	$ 947,933,729	$ 930,855,154	$ 899,798,030	$ 872,116,129	$ 863,383,714

Deposits:
Noninterest-bearing demand			$ 272,084,060	$ 257,415,232	$ 255,052,436	$ 256,355,584	$ 247,511,094
Interest-bearing:
	NOW ¹		197,158,536	199,685,709	202,974,127	203,465,972	193,760,532
	Savings		75,285,399	71,859,873	71,308,729	73,765,147	72,670,367
	Money market ¹		271,791,739	272,585,155	266,564,412	260,793,172	251,803,391
	Time		180,479,862	183,258,371	186,442,485	183,470,513	166,967,041
		Total interest-bearing	724,715,536	727,389,108	727,289,753	721,494,804	685,201,331
		Total Deposits	$ 996,799,596	$ 984,804,340	$ 982,342,189	$ 977,850,388	$ 932,712,425

	¹ Includes demand transaction accounts enrolled in the Bank's reciprocal deposit program.