MIDDLETOWN, Md., July 23, 2026 /PRNewswire/ -- Community Heritage Financial, Inc. (the "Company" or "CHF") (OTC:CMHF), the parent company of Middletown Valley Bank ("MVB" or the "Bank"), reported a net loss of $1.1 million, or ($0.37) per diluted common share, for the quarter ended June 30, 2026 and net income of $1.8 million, or $0.59 per diluted common share, for the six months ended June 30, 2026, reflecting the impact of a strategic securities portfolio repositioning completed during the quarter.
On May 18, 2026, the Bank executed an investment portfolio repositioning strategy to strengthen the balance sheet, increase future earnings, and enhance shareholder value. The Bank sold securities classified as both available-for-sale ("AFS") and held-to-maturity ("HTM") with an amortized cost balance of $77.3 million and a weighted average yield of 2.73%. The sale of the securities resulted in a pre-tax loss of $5.4 million ($3.9 million after-tax loss), which was recognized in the second quarter of 2026. HTM securities not sold were reclassified to AFS on the transaction date.
As of June 30, 2026, the Bank had reinvested $57.0 million of the transaction's $68.3 million proceeds. The Bank intends to reinvest the remaining proceeds prior to the end of the third quarter of 2026 and estimates a weighted average tax-equivalent yield associated with the fully invested proceeds of 5.10%.
Also, during the second quarter of 2026, several senior officers of the Bank retired and one-time severance and other benefit costs totaling $337 thousand were incurred.
The following table presents selected comparative operating performance measurements for the periods indicated, with the operating performance measurements for the periods ended June 30, 2026 adjusted to exclude the impact of the loss incurred on the sale of securities and the retirement costs1:
Three Months Ended Six Months Ended | 6/30/20261 3/31/2026 6/30/2025 6/30/20261 6/30/2025 | Net income $ 3,018,455 $ 2,852,249 $ 2,468,004 $ 5,870,704 $ 4,350,640 | Noninterest income $ 1,200,957 $ 831,316 $ 1,093,184 $ 2,032,273 $ 1,875,501 | Noninterest expense $ 7,272,279 $ 7,071,907 $ 6,417,134 $ 14,344,186 $ 12,896,376 | Provision for credit losses $ 394,791 $ (77,299) $ 148,330 $ 317,492 $ 396,888 | Earnings per common share: | Basic $ 1.02 $ 0.97 $ 0.84 $ 2.00 $ 1.49 | Diluted $ 1.02 $ 0.97 $ 0.84 $ 1.98 $ 1.48 | Annualized return on average assets 1.05 % 1.02 % 0.92 % 1.04 % 0.83 % | Annualized return on average equity 13.24 % 12.71 % 11.93 % 12.98 % 10.73 % | 1 Financial measures are calculated using methods other than those prescribed by generally accepted accounting principles ("GAAP"). Refer to "Reconciliations of non-GAAP Financial Measures" at the end of the press release. |
Net Income (Loss)
The Company recorded a net loss of $1.1 million for the three months ended June 30, 2026 as a result of the loss on the sale of securities of $5.4 million previously mentioned. Net income, as adjusted1, totaled $3.0 million, or $1.02 per diluted common share, for the three months ended June 30, 2026 compared to $2.9 million, or $0.97 per diluted common share, for the three months ended March 31, 2026 and $2.5 million, or $0.84 per diluted common share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, net income, as adjusted1, totaled $5.9 million, or $1.98 per diluted common share, compared to the $4.4 million, or $1.48 per diluted common share, for the same period in 2025, representing an increase of 34.9%.
Net Interest Income
Net interest income totaled $10.6 million during the three months ended June 30, 2026, compared to $10.0 million for the three months ended March 31, 2026 and $8.8 million for the three months ended June 30, 2025. On a quarterly basis, the net interest margin (the "NIM") increased from 3.37% during the second quarter of 2025 to 3.56% during the fourth quarter of 2025, and to 3.67% and 3.78% during the first and second quarters 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. In addition, the strategic repositioning of the securities portfolio in mid-May 2026 contributed to NIM improvement. The Company's yield on earning assets increased from 5.32% for the second quarter of 2025 to 5.55% for the second quarter of 2026. The Company's cost of funds decreased from 2.05% for the second quarter of 2025 to 1.87% for the second quarter of 2026.
Noninterest Income
Linked quarter 2026 – Noninterest income decreased $5.0 million linked quarter as a result of the loss on the sale of securities of $5.4 million recognized in the second quarter, offset by increases in mortgage banking revenue and earnings on bank-owned life insurance. Noninterest income, as adjusted1, increased $370 thousand linked quarter. Mortgage banking revenue increased $166 thousand with an increase in mortgage origination and sale activity associated with the spring and summer seasons. Earnings on bank-owned life insurance increased $166 thousand with improved equity market performance in the second quarter.
Second Quarter 2026 vs. Second Quarter 2025 – Noninterest income decreased $5.3 million quarter over quarter as a result of the loss on the sale of securities recognized in the second quarter of 2026. Noninterest income, as adjusted1, increased $108 thousand quarter over quarter. Earnings on bank-owned life insurance increased $59 thousand, driven by relative performance of the equity market. Card and merchant services income increased $34 thousand and reflected increased transaction activity.
Six Months June 30, 2026 vs. Six Months June 30, 2025 – Noninterest income decreased $5.2 million during the six months ended June 30, 2026 compared to the same period in 2025 as a result of the loss on the sale of securities of $5.4 million recognized in 2026. Noninterest income, as adjusted1, increased $157 thousand for the six months ended June 30, 2026 compared to the same period in 2025. Increases in mortgage banking revenue, card and merchant services income and service charges on deposits reflected growth in business activity. Earnings on bank-owned life insurance increased $48 thousand, reflecting relative performance of the equity market. Other noninterest income decreased $73 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 2026 – Noninterest expense increased $537 thousand linked quarter primarily driven by an increase in salaries and benefits expense of $679 thousand, inclusive of one-time retirement costs incurred of $337 thousand. Noninterest expense, as adjusted1, increased $200 thousand linked quarter. The increase was driven by an increase in salaries and benefits expense, as adjusted1, of $342 thousand, offset by decreases in data and item processing expense and other expense of $77 thousand and $50 thousand, respectively. Salaries and benefits expense increased due to (i) merit increases and new hire activity, and (ii) increased health care claims expense of $148 thousand. Data and item processing expense decreased largely due to a decline in fraud related charges. The decrease in other expense included decreases in card expenses, donations, sponsorships and public relations expense, and employee development expenses.
Second Quarter 2026 vs. Second Quarter 2025 – Noninterest expense increased $1.2 million quarter over quarter as a result of increases in salaries and benefits expense of $1.0 million, inclusive of one-time retirement costs incurred of $337 thousand. Noninterest expense, as adjusted1, increased $855 thousand quarter over quarter. The increase was driven primarily by increases in salaries and benefits expense, as adjusted1, of $662 thousand and occupancy and equipment expense of $127 thousand. Salaries and benefits expense increased due to (i) merit increases and new hire activity, and (ii) increased health care claims expense of $200 thousand. The increase in occupancy and equipment expense reflected added lease costs associated with branch relocation activity in the second half of 2025 and the current period.
Six Months June 30, 2026 vs. Six Months June 30, 2025 – Noninterest expense increased $1.8 million during the six months ended June 30, 2026 compared to the same period in 2025 as salaries and benefits expense increased $1.1 million, inclusive of one-time retirement costs incurred of $337 thousand, data and item processing expense, occupancy and equipment expense, and other expense, offset by a decline in legal and professional fee expense. Noninterest expense, as adjusted1, increased $1.4 million during the six months ended June 30, 2026 compared to the same period in 2025. The increase was largely attributable to increases in salaries and benefits expense, as adjusted1, of $793 thousand, data and item processing expense of $227 thousand, occupancy and equipment expense of $218 thousand and other expense of $247 thousand, offset by a decrease in legal and professional fees of $106 thousand. The increase in salaries and benefits reflected (i) increased merit and incentive pay expenses and new hire activity, and (ii) increased health care claims expense of $83 thousand. The increase in data and item processing expense generally reflected increased activity. The increase in occupancy and equipment expense reflected added lease costs associated with branch relocation activity in the second half of 2025 and the current period. The increase in other expenses resulted from increased sponsorship, donation, and public relations expenses of $83 thousand, increased state tax expense other than income taxes of $30 thousand, and increased employee development expenses of $29 thousand. The decrease in professional fees was primarily driven by reduced accounting and audit fees given relief from next level compliance with the FDIC Improvement Act after an increase in the asset threshold from $1 billion to $5 billion in November 2025.
Balance Sheet
Assets totaled $1.2 billion as of June 30, 2026, representing an increase of $99.0 million since June 30, 2025 and an increase of $41.3 million since March 31, 2026. Growth in the balance sheet during both periods was primarily driven by growth in customer deposits, with the majority of growth coming during a second quarter 2026 deposit campaign. Since June 30, 2025, deposits grew $99.8 million. Since March 31, 2026, deposits grew $80.9 million. Second quarter 2026 deposit growth included growth in NOW balances of $43.1 million, money market balances of $32.3 million and time deposit balances of $9.4 million, offset by a decline in DDA balances of $5.8 million.
Loan balances outstanding grew to $973.5 million as of June 30, 2026, representing an increase of $101.4 million, or 11.6% from June 30, 2025, and $25.6 million, or 10.8% annualized from March 31, 2026. Since June 30, 2025, all loan portfolio segments recorded growth with the residential segment, inclusive of home equity loans, recording the largest balance growth of $31.6 million followed by the non-owner occupied commercial real estate segment with growth of $19.8 million. Since March 31, 2026, growth in loans secured by farmland, residential loans, including home equity loans, and non-owner occupied commercial real estate loans of $17.0 million, $9.5 million, and $5.6 million, respectively, offset by a decline in construction and land development loans of $7.1 million contributed to total net loan growth of $25.6 million.
Asset Quality
Asset quality remained strong with non-performing assets to total assets of 0.10% as of June 30, 2026, compared to 0.11% as of March 31, 2026 and 0.13% as of June 30, 2025. The ratio of net charge-offs to average total loans was zero percent for the quarter ended June 30, 2026 and 0.01% for the six months ended June 30, 2026. The provision for credit losses, as adjusted1, increased $472 thousand in the second quarter of 2026 compared to the first quarter of 2026. The increase reflected loan growth of $25.6 million and an increase in the allowance for credit losses as a percentage of loans from 1.02% at March 31, 2026 to 1.04% at June 30, 2026 based on management's assessment of macro-economic conditions. The first quarter of 2026 also included a loan loss recovery of $653 thousand related to a loan charged off in 2021.
Capital
As a result of the loss on the sale of securities and balance sheet growth during the second quarter 2026, capital ratios of both the Company and the Bank declined from the prior quarter. The Company's shareholders' equity at June 30, 2026 totaled $88.8 million, down $2.8 million, or 3.0%, from March 31, 2026. The Company's ratio of tangible common equity to tangible assets1 fell 50 basis points linked quarter to 7.30%. The Bank's CET1 ratio is estimated to be 11.72% at June 30, 2026, down 30 basis points linked quarter. The Bank's total risk-based capital ratio is estimated to be 12.89% at June 30, 2026, down 27 basis points linked quarter. As of June 30, 2026, the Bank was well capitalized under the regulatory framework for prompt corrective action.
Dividend
A dividend of $0.08 per share was declared by the Board of Directors on July 17, 2026, for stockholders of record as of July 31, 2026 and payable on August 7, 2026.
Non-GAAP Financial Measures
The Company included certain non-GAAP financial measures in this press release. The Company believes these financial measures provide information that is useful 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. See "Reconciliation of non-GAAP Financial Measures" at the end of the press release.
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.
1 A non-GAAP financial measure. See "Reconciliation of non-GAAP Financial Measures" at the end of the press release.
Community Heritage Financial, Inc.
Robert E. Goetz, Jr. ("BJ")
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)1 | As of Period End | 6/30/2026 3/31/2026 12/31/20251 9/30/2025 6/30/2025 | ASSETS | Cash and due from banks $ 76,651,107 $ 41,117,713 $ 30,707,438 $ 28,508,739 $ 67,210,170 | Securities available-for-sale, at fair value 117,130,706 51,710,763 53,681,375 54,390,834 46,712,422 | Securities held-to-maturity - 85,592,007 86,553,557 87,642,810 88,807,858 | Less allowance for credit losses - 50,414 78,511 73,338 92,176 | Total securities held-to-maturity - 85,541,593 86,475,046 87,569,472 88,715,682 | Total securities 117,130,706 137,252,356 140,156,421 141,960,306 135,428,104 | Equity securities, at cost 1,027,700 2,709,200 2,281,700 951,700 1,426,700 | Loans 973,493,548 947,933,729 930,855,154 899,798,030 872,116,129 | Less allowance for loan credit losses 10,097,893 9,701,472 9,842,370 9,648,797 8,675,088 | Loans, net 963,395,655 938,232,257 921,012,784 890,149,233 863,441,041 | Loans held for sale 3,078,861 3,241,537 3,935,463 3,782,055 1,445,377 | Premises and equipment 6,331,653 6,238,824 6,423,885 6,335,780 6,169,205 | Right of use asset 5,134,965 4,903,838 5,014,155 1,691,267 1,816,066 | Accrued interest receivable 3,626,025 3,607,585 3,397,155 3,433,569 3,422,469 | Deferred tax assets 5,060,704 4,226,269 4,452,078 4,501,612 4,356,321 | Bank owned life insurance 8,044,423 7,858,667 7,837,986 7,656,529 7,570,668 | Goodwill 1,656,507 1,656,507 1,656,507 1,656,507 1,656,507 | Other assets 3,556,292 2,311,950 2,204,457 1,836,331 1,666,160 | Total Assets $ 1,194,694,598 $ 1,153,356,703 $ 1,129,080,029 $ 1,092,463,628 $ 1,095,608,788 | LIABILITIES and SHAREHOLDERS' EQUITY | Liabilities | Deposits: | Noninterest-bearing demand $ 266,326,799 $ 272,084,060 $ 257,415,232 $ 255,052,436 $ 256,355,584 | Interest-bearing 811,348,546 724,715,536 727,389,108 727,289,753 721,494,804 | Total deposits 1,077,675,345 996,799,596 984,804,340 982,342,189 977,850,388 | FHLB advances and other borrowings 5,000,000 42,000,000 33,000,000 5,000,000 15,000,000 | Subordinated debt, net 12,059,069 12,056,006 12,052,944 12,049,882 12,046,819 | Lease liabilities 5,218,274 4,983,788 5,088,540 1,760,706 1,886,828 | Accrued interest payable 484,064 720,468 473,682 709,739 567,996 | Other liabilities 5,487,564 5,272,313 4,809,964 4,306,714 4,321,095 | Total Liabilities 1,105,924,316 1,061,832,171 1,040,229,470 1,006,169,230 1,011,673,126 | Shareholders' Equity | Common stock 29,481 29,459 29,327 29,291 29,289 | Additional paid-in-capital 41,702,821 41,642,026 41,649,351 41,588,025 41,469,625 | Retained earnings 53,597,510 54,931,337 52,313,860 50,180,223 48,480,152 | Accumulated other comprehensive loss (6,559,530) (5,078,290) (5,141,979) (5,503,141) (6,043,404) | Total Shareholders' Equity 88,770,282 91,524,532 88,850,559 86,294,398 83,935,662 | Total Liabilities and Shareholders' Equity $ 1,194,694,598 $ 1,153,356,703 $ 1,129,080,029 $ 1,092,463,628 $ 1,095,608,788 | 1 December 31, 2025 information derived from the audited financial statements. |
Community Heritage Financial, Inc. and Subsidiaries | Statements of Income (unaudited) | Three Months Ended Six Months Ended | 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025 6/30/2026 6/30/2025 | Interest Income | Loans, including fees $ 14,254,582 $ 13,870,716 $ 13,604,427 $ 13,086,145 $ 12,597,796 $ 28,125,298 $ 24,826,334 | Securities 1,044,498 989,011 994,358 946,231 888,721 2,033,509 1,747,353 | Fed funds sold and other bank deposits 244,187 84,701 176,658 511,786 467,029 328,888 586,231 | Total interest income 15,543,267 14,944,428 14,775,443 14,544,162 13,953,546 30,487,695 27,159,918 | Interest Expense | Deposits 4,587,069 4,431,541 4,873,913 5,031,782 4,758,194 9,018,610 9,163,925 | Subordinated debt 119,161 295,339 57,799 137,305 149,325 414,500 414,500 | Other borrowed funds 256,664 207,250 207,250 207,249 207,250 463,914 338,380 | Total interest expense 4,962,894 4,934,130 5,138,962 5,376,336 5,114,769 9,897,024 9,916,805 | Net interest income 10,580,373 10,010,298 9,636,481 9,167,826 8,838,777 20,590,671 17,243,113 | Provision for credit losses 344,377 (77,299) 124,140 960,847 148,330 267,078 396,888 | Net interest income after provision | for credit losses 10,235,996 10,087,597 9,512,341 8,206,979 8,690,447 20,323,593 16,846,225 | Noninterest income | Mortgage banking revenue 402,775 236,836 428,177 348,561 406,440 639,611 570,455 | Card and merchant services 344,548 313,701 337,191 333,325 310,082 658,249 591,497 | Service charges on deposits 250,752 262,717 252,477 254,754 231,856 513,469 466,953 | Earnings on bank-owned life insurance 178,191 12,390 48,166 77,570 118,847 190,581 142,767 | Loss on sale of securities (5,393,148) - - - - (5,393,148) - | Other 24,691 5,672 18,737 40,436 25,959 30,363 103,829 | Total noninterest income (loss) (4,192,191) 831,316 1,084,748 1,054,646 1,093,184 (3,360,875) 1,875,501 | Noninterest expense | Salaries and employee benefits 4,658,424 3,979,145 4,101,261 3,861,631 3,660,059 8,637,569 7,507,261 | Data and item processing 953,718 1,030,332 1,043,435 940,872 911,744 1,984,050 1,756,771 | Occupancy and equipment 750,870 761,855 709,382 641,092 623,512 1,512,725 1,294,416 | Legal and professional fees 280,505 257,974 320,853 332,527 366,768 538,479 644,745 | FDIC insurance 161,334 200,001 389,431 166,176 170,937 361,335 313,803 | Advertising 109,101 97,674 74,846 91,883 79,253 206,775 186,628 | Other 695,238 744,926 769,525 658,319 604,861 1,440,164 1,192,752 | 7,609,190 7,071,907 7,408,733 6,692,500 6,417,134 14,681,097 12,896,376 | Total noninterest expense | Income (loss) before income taxes (1,565,385) 3,847,006 3,188,356 2,569,125 3,366,497 2,281,621 5,825,350 | Income tax expense (benefit) (467,233) 994,757 820,106 634,729 898,493 527,524 1,474,710 | Net income (loss) $ (1,098,152) $ 2,852,249 $ 2,368,250 $ 1,934,396 $ 2,468,004 $ 1,754,097 $ 4,350,640 | Community Heritage Financial, Inc. and Subsidiaries | Per Share Data (unaudited) | Three Months Ended Six Months Ended | 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025 6/30/2026 6/30/2025 | Earnings per common share | Basic $ (0.37) $ 0.97 $ 0.81 $ 0.66 $ 0.84 $ 0.60 $ 1.49 | Diluted $ (0.37) $ 0.97 $ 0.80 $ 0.66 $ 0.84 $ 0.59 $ 1.48 | Common shares outstanding at period end 2,948,143 2,945,928 2,932,680 2,929,053 2,928,888 2,948,143 2,928,888 | Average common shares outstanding | Basic 2,946,683 2,936,041 2,932,562 2,929,012 2,928,888 2,941,391 2,925,773 | Diluted 2,946,683 2,947,910 2,956,327 2,952,922 2,944,207 2,960,233 2,942,204 | Cash dividends paid per common share $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.16 $ 0.16 |
Community Heritage Financial, Inc. and Subsidiaries | Selected Financial Data (unaudited) | As of and for the Three Months Ended As of and for the Six Months Ended | 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025 6/30/2026 6/30/2025 | Per Share Data | Common shares outstanding at period end 2,948,143 2,945,928 2,932,680 2,929,053 2,928,888 2,948,143 2,928,888 | Book value per share $ 30.11 $ 31.07 $ 30.30 $ 29.46 $ 28.66 $ 30.11 $ 28.66 | Tangible book value per share1 $ 29.55 $ 30.51 $ 29.73 $ 28.90 $ 28.09 $ 29.55 $ 28.09 | Capital (bank consolidated only unless noted otherwise) | Common equity tier 1 (CET1) capital 11.72 % 12.02 % 11.96 % 12.15 % 12.28 % 11.72 % 12.28 % | Tier 1 capital 11.72 % 12.02 % 11.96 % 12.15 % 12.28 % 11.72 % 12.28 % | Total risk-based capital 12.89 % 13.16 % 13.14 % 13.37 % 13.41 % 12.89 % 13.41 % | Tier 1 leverage ratio 8.82 % 9.47 % 9.48 % 9.32 % 9.29 % 8.82 % 9.29 % | Tangible common equity to tangible assets (CHF)1 7.30 % 7.80 % 7.73 % 7.76 % 7.52 % 7.30 % 7.52 % | Asset Quality Data | Nonaccrual loans $ 1,212,877 $ 1,232,834 $ 2,025,128 $ 2,044,469 $ 1,442,329 $ 1,212,877 $ 1,442,329 | Non-performing assets $ 1,212,877 $ 1,232,834 $ 2,025,128 $ 2,044,469 $ 1,442,329 $ 1,212,877 $ 1,442,329 | Non-performing assets plus loans past due 90+ days $ 1,220,371 $ 1,232,834 $ 2,025,128 $ 2,044,469 $ 1,442,329 $ 1,220,371 $ 1,442,329 | Non-performing loans to loans 0.13 % 0.13 % 0.22 % 0.23 % 0.17 % 0.13 % 0.17 % | Non-performing assets to total assets 0.10 % 0.11 % 0.18 % 0.19 % 0.13 % 0.10 % 0.13 % | Net (charge-offs) / recoveries $ 3,450 $ (90,410) $ 3,450 $ 3,450 $ 4,520 $ (86,960) $ 4,520 | Net loan charge-offs to average loans 0.00 % 0.01 % 0.00 % 0.00 % 0.00 % 0.01 % 0.00 % | ACL - loans2 to total loans 1.04 % 1.02 % 1.06 % 1.07 % 0.99 % 1.04 % 0.99 % | ACL - loans2 to non-performing assets plus loans past due 90+ days 827.44 % 786.92 % 486.01 % 471.95 % 601.46 % 827.44 % 601.46 % | Other Data | Return on average assets -0.38 % 1.02 % 0.85 % 0.70 % 0.92 % 0.31 % 0.83 % | Return on average equity -4.82 % 12.71 % 10.63 % 8.96 % 11.93 % 3.88 % 10.73 % | Net interest margin 3.78 % 3.67 % 3.56 % 3.40 % 3.37 % 3.72 % 3.36 % | Yield on interest-earning assets 5.55 % 5.48 % 5.45 % 5.38 % 5.32 % 5.52 % 5.30 % | Cost of interest-bearing liabilities 2.56 % 2.61 % 2.73 % 2.85 % 2.80 % 2.59 % 2.79 % | Loans to deposits ratio 90.33 % 95.10 % 94.52 % 91.60 % 89.19 % 90.33 % 89.19 % | 1 Financial measures are calculated using methods other than those prescribed by generally accepted accounting principles ("GAAP"). Refer to "Reconciliations of Non-GAAP Financial Measures" at the end of the press release. | 2 "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 | June 30, 2026 March 31, 2026 June 30, 2025 | Average Balance Interest Yield / Rate Average Balance Interest Yield / Rate Average Balance Interest Yield / Rate | ASSETS | Interest-earning assets: | Loans, including LHFS $ 954,410,076 $ 14,254,582 5.99 % $ 945,455,025 $ 13,870,716 5.93 % $ 868,901,865 $ 12,597,796 5.81 % | Securities 134,552,222 1,044,498 3.11 % 141,858,443 989,011 2.79 % 135,415,559 888,721 2.63 % | Fed funds sold and other bank deposits 33,144,617 244,187 2.96 % 14,241,106 84,701 2.40 % 47,920,689 467,029 3.91 % | 1,122,106,915 15,543,267 5.55 % 1,101,554,574 14,944,428 5.48 % 1,052,238,113 13,953,546 5.32 % | Noninterest-earning assets 26,319,812 27,232,242 23,523,401 | Total Assets $ 1,148,426,727 $ 1,128,786,816 $ 1,075,761,514 | LIABILITIES AND SHAREHOLDERS' EQUITY | Interest-bearing liabilities: | Demand deposits $ 562,295,257 $ 3,013,089 2.15 % $ 540,203,233 $ 2,858,754 2.15 % $ 527,492,595 $ 3,146,490 2.39 % | Time deposits 185,241,631 1,573,980 3.41 % 182,279,894 1,572,787 3.50 % 176,936,573 1,611,704 3.65 % | Interest-bearing deposits 747,536,888 4,587,069 2.46 % 722,483,127 4,431,541 2.49 % 704,429,168 4,758,194 2.71 % | Borrowings 29,314,083 375,825 5.13 % 42,349,733 502,589 4.79 % 27,044,756 356,575 5.28 % | Interest-bearing liabilities 776,850,971 4,962,894 2.56 % 764,832,860 4,934,130 2.61 % 731,473,924 5,114,769 2.80 % | Noninterest-bearing liabilities: | Demand deposits 269,761,926 260,898,989 254,468,601 | Other 10,386,224 12,053,230 6,873,331 | Total Liabilities 1,056,999,121 1,037,785,079 992,815,856 | Cost of Total Deposits 1.81 % 1.83 % 1.99 % | Cost of Total Funds (interest- | bearing liabilities plus non- | interest-bearing deposits) 1.87 % 1.95 % 2.05 % | Shareholders' equity 91,427,606 91,001,737 82,945,658 | Total Liabilities and Shareholders Equity $ 1,148,426,727 $ 1,128,786,816 $ 1,075,761,514 | Net interest income / NIM $ 10,580,373 3.78 % $ 10,010,298 3.67 % $ 8,838,777 3.37 % |
Community Heritage Financial, Inc. and Subsidiaries | Condensed Average Balance Sheet Analysis (unaudited) | Six Months Ended | June 30, 2026 June 30, 2025 | Average Balance Interest Yield / Rate Average Balance Interest Yield / Rate | ASSETS | Interest-earning assets: | Loans $ 949,952,286 $ 28,125,298 5.96 % $ 863,910,059 $ 24,826,334 5.78 % | Securities 138,680,430 2,033,509 2.93 % 135,273,444 1,747,353 2.58 % | Fed funds sold and other bank deposits 23,712,187 328,888 2.80 % 32,240,014 586,231 3.67 % | 1,112,344,903 30,487,695 5.52 % 1,031,423,517 27,159,918 5.30 % | Noninterest-earning assets 26,319,275 22,237,546 | Total Assets $ 1,138,664,178 $ 1,053,661,063 | LIABILITIES AND SHAREHOLDERS' EQUITY | Interest-bearing liabilities: | Demand deposits $ 551,288,106 $ 5,871,842 2.15 % $ 519,577,191 $ 6,111,158 2.37 % | Time deposits 183,760,648 3,146,768 3.45 % 166,993,913 3,052,767 3.69 % | Interest-bearing deposits 735,048,754 9,018,610 2.47 % 686,571,104 9,163,925 2.69 % | Borrowings 35,768,279 878,414 4.93 % 28,715,359 752,880 5.26 % | Interest-bearing liabilities 770,817,033 9,897,024 2.59 % 715,286,463 9,916,805 2.79 % | Noninterest-bearing liabilities: | Demand deposits 265,407,529 249,504,107 | Other 11,216,689 7,095,291 | Total Liabilities 1,047,441,251 971,885,861 | Cost of Total Deposits 1.82 % 1.97 % | Cost of Total Funds (interest- | bearing liabilities plus non- | interest-bearing deposits) 1.93 % 2.07 % | Shareholders' equity 91,222,927 81,775,202 | Total Liabilities and Shareholders Equity $ 1,138,664,178 $ 1,053,661,063 | Net interest income / NIM $ 20,590,671 3.72 % $ 17,243,113 3.36 % |
Community Heritage Financial, Inc. and Subsidiaries | Loan and Deposit Composition (unaudited) | As of Period End | 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025 | Loans: | Commercial real estate: | Construction and land development $ 77,375,812 $ 84,428,311 $ 87,098,819 $ 80,671,698 $ 67,819,407 | Multifamily 23,752,016 23,033,500 23,416,919 22,749,443 22,989,449 | Farmland 47,470,183 30,473,035 30,057,354 29,121,486 32,872,235 | Other: | Owner occupied 152,971,360 152,110,763 147,006,921 142,991,662 139,335,615 | Non-owner occupied 184,240,299 178,593,573 177,115,227 170,462,324 164,434,003 | Residential, including home equity 339,069,899 329,551,095 322,126,792 314,145,221 307,500,247 | Commercial and industrial 144,278,828 145,316,304 139,246,435 135,174,298 132,669,094 | Consumer 976,461 936,235 1,181,301 868,300 847,668 | Gross loans 970,134,858 944,442,816 927,249,768 896,184,432 868,467,718 | Net deferred loan costs 3,358,690 3,490,913 3,605,386 3,613,598 3,648,411 | Total Loans $ 973,493,548 $ 947,933,729 $ 930,855,154 $ 899,798,030 $ 872,116,129 | Deposits: | Noninterest-bearing demand $ 266,326,799 $ 272,084,060 $ 257,415,232 $ 255,052,436 $ 256,355,584 | Interest-bearing: | NOW 1 240,228,075 197,158,536 199,685,709 202,974,127 203,465,972 | Savings 77,224,221 75,285,399 71,859,873 71,308,729 73,765,147 | Money market 1 304,000,976 271,791,739 272,585,155 266,564,412 260,793,172 | Time 189,895,274 180,479,862 183,258,371 186,442,485 183,470,513 | Total interest-bearing 811,348,546 724,715,536 727,389,108 727,289,753 721,494,804 | Total Deposits $ 1,077,675,345 $ 996,799,596 $ 984,804,340 $ 982,342,189 $ 977,850,388 | 1 Includes transaction accounts enrolled in the Bank's reciprocal deposit program. |
Community Heritage Financial, Inc. and Subsidiaries | Reconciliation of GAAP to non-GAAP Financial Measurements (unaudited) | Three Months Ended Six Months Ended | 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025 6/30/2026 6/30/2025 | Financial Measurements: | Net Income | GAAP Net income (loss) $ (1,098,152) $ 2,852,249 $ 2,368,250 $ 1,934,396 $ 2,468,004 $ 1,754,097 $ 4,350,640 | Adjustments to net income: | Loss on sale of securities 5,393,148 - - - - 5,393,148 - | Elimination of ACL - HTM securities (50,414) - - - - (50,414) | Retirement costs 336,911 - - - - 336,911 | Tax effect of adjustments to net income (1,563,038) - - - - (1,563,038) - | Non-GAAP Net income $ 3,018,455 $ 2,852,249 $ 2,368,250 $ 1,934,396 $ 2,468,004 $ 5,870,704 $ 4,350,640 | Provision for Credit Losses | GAAP Provision for credit losses $ 344,377 $ (77,299) $ 124,140 $ 960,847 $ 148,330 $ 267,078 $ 396,888 | Adjustment to provision for credit losses: | Elimination of ACL - HTM securities $ 50,414 $ - $ - $ - $ - $ 50,414 $ - | Non-GAAP Provision for credit losses $ 394,791 $ (77,299) $ 124,140 $ 960,847 $ 148,330 $ 317,492 $ 396,888 | Noninterest Income | GAAP Noninterest income (loss) $ (4,192,191) $ 831,316 $ 1,084,748 $ 1,054,646 $ 1,093,184 $ (3,360,875) $ 1,875,501 | Adjustment to noninterest income: | Loss on sale of securities 5,393,148 - - - - 5,393,148 - | Non-GAAP Noninterest income $ 1,200,957 $ 831,316 $ 1,084,748 $ 1,054,646 $ 1,093,184 $ 2,032,273 $ 1,875,501 | Salaries and Benefits | GAAP Salaries and benefits $ 4,658,424 $ 3,979,145 $ 4,101,261 $ 3,861,631 $ 3,660,059 $ 8,637,569 $ 7,507,261 | Adjustment to salaries and benefits: | Retirement costs (336,911) - - - - (336,911) - | Non-GAAP Salaries and benefits $ 4,321,513 $ 3,979,145 $ 4,101,261 $ 3,861,631 $ 3,660,059 $ 8,300,658 $ 7,507,261 | Noninterest Expense | GAAP Noninterest expense $ 7,609,190 $ 7,071,907 $ 7,408,733 $ 6,692,500 $ 6,417,134 $ 14,681,097 $ 12,896,376 | Adjustment to noninterest expense: | Retirement costs (336,911) - - - - (336,911) - | Non-GAAP Noninterest expense $ 7,272,279 $ 7,071,907 $ 7,408,733 $ 6,692,500 $ 6,417,134 $ 14,344,186 $ 12,896,376 | Earnings per Common Share - Basic | GAAP Earnings per common share - basic $ (0.37) $ 0.97 $ 0.81 $ 0.66 $ 0.84 $ 0.60 $ 1.49 | Effect of adjustments to net income 1.39 - - - - 1.40 - | Non-GAAP Earnings per common share - basic $ 1.02 $ 0.97 $ 0.81 $ 0.66 $ 0.84 $ 2.00 $ 1.49 | Earnings per Common Share - Diluted | GAAP Earnings per common share - diluted $ (0.37) $ 0.97 $ 0.80 $ 0.66 $ 0.84 $ 0.59 $ 1.48 | Effect of adjustments to net income 1.39 - - - - 1.39 - | Non-GAAP Earnings per common share - diluted $ 1.02 $ 0.97 $ 0.80 $ 0.66 $ 0.84 $ 1.98 $ 1.48 | Annualized Return on Average Assets | GAAP Annualized return on average assets -0.38 % 1.02 % 0.85 % 0.70 % 0.92 % 0.31 % 0.83 % | Effect of adjustments to net income 1.44 % - - - - 0.73 % - | Non-GAAP Annualized return on average assets 1.05 % 1.02 % 0.85 % 0.70 % 0.92 % 1.04 % 0.83 % | Annualized Return on Average Equity | GAAP Annualized return on average equity -4.82 % 12.71 % 10.63 % 8.96 % 11.93 % 3.88 % 10.73 % | Effect of adjustments to net income 18.06 % - - - - 9.10 % - | Non-GAAP Annualized return on average equity 13.24 % 12.71 % 10.63 % 8.96 % 11.93 % 12.98 % 10.73 % | Tangible Common Equity to Tangible Assets | GAAP Total shareholders' equity $ 88,770,282 $ 91,524,532 $ 88,850,559 $ 86,294,398 $ 83,935,662 | Intangible assets (1,656,507) (1,656,507) (1,656,507) (1,656,507) (1,656,507) | Non-GAAP Total shareholders' equity $ 87,113,775 $ 89,868,025 $ 87,194,052 $ 84,637,891 $ 82,279,155 | GAAP Total assets $ 1,194,694,598 $ 1,153,356,703 $ 1,129,080,029 $ 1,092,463,628 $ 1,095,608,788 | Intangible assets (1,656,507) (1,656,507) (1,656,507) (1,656,507) (1,656,507) | Non-GAAP Total assets $ 1,193,038,091 $ 1,151,700,196 $ 1,127,423,522 $ 1,090,807,121 $ 1,093,952,281 | Non-GAAP Tangible common equity to tangible assets 7.30 % 7.80 % 7.73 % 7.76 % 7.52 % | Tangible Book Value per Share | GAAP Total shareholders' equity $ 88,770,282 $ 91,524,532 $ 88,850,559 $ 86,294,398 $ 83,935,662 | Intangible assets (1,656,507) (1,656,507) (1,656,507) (1,656,507) (1,656,507) | Non-GAAP Tangible shareholders' equity $ 87,113,775 $ 89,868,025 $ 87,194,052 $ 84,637,891 $ 82,279,155 | Common shares outstanding 2,948,143 2,945,928 2,932,680 2,929,053 2,928,888 | Non-GAAP Tangible book value per share $ 29.55 $ 30.51 $ 29.73 $ 28.90 $ 28.09 |
SOURCE Community Heritage Financial, Inc.