Community Heritage Financial, Inc. Reports Financial Results for the Second Quarter of 2026

Q: Why did Community Heritage Financial (CMHF) report a net loss in Q2 2026?

The Q2 2026 net loss of $1.1 million was primarily due to a $5.4 million pre‑tax loss on the sale of securities. According to the company, this loss reflects a strategic portfolio repositioning to reinvest proceeds into higher‑yielding investments.

Q: How did loans and deposits grow at Community Heritage Financial (CMHF) through June 30, 2026?

Loans reached $973.5 million , up 11.6% year over year, while deposits increased $99.8 million since June 30, 2025. According to the company, Q2 2026 deposit growth of $80.9 million was driven largely by a targeted deposit campaign across NOW and money market accounts.

Q: What was Community Heritage Financial’s capital position at June 30, 2026?

Shareholders’ equity was $88.8 million , and the tangible common equity ratio was 7.30%, down 50 basis points from March 31, 2026. According to the company, the bank remained well capitalized with an estimated CET1 ratio of 11.72% and total risk‑based capital of 12.89%.

Q: What dividend did Community Heritage Financial (CMHF) declare for Q2 2026?

The board declared a $0.08 per share cash dividend, payable August 7, 2026 to shareholders of record on July 31, 2026. According to the company, this dividend follows its Q2 2026 results, including the impact of the securities portfolio repositioning.

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Rhea-AI Summary

Community Heritage Financial (OTC: CMHF), parent of Middletown Valley Bank, reported a Q2 2026 net loss of $1.1 million, or ($0.37) per diluted share, driven by a $5.4 million pre-tax loss on a strategic sale of $77.3 million in lower-yield securities (2.73% average yield). According to the company, the proceeds of $68.3 million are being reinvested at an estimated 5.10% tax‑equivalent yield, with $57.0 million already deployed by June 30, 2026.

On an adjusted non-GAAP basis, Q2 2026 net income was $3.0 million, or $1.02 per diluted share, and six‑month 2026 adjusted net income rose 34.9% to $5.9 million ($1.98 per diluted share). Net interest income increased to $10.6 million, and net interest margin improved to 3.78% as asset yields rose and funding costs declined.

Total assets reached $1.2 billion, with loans up 11.6% year over year to $973.5 million and deposits up $99.8 million since June 30, 2025, helped by a Q2 deposit campaign. Asset quality remained strong, with nonperforming assets at 0.10% of total assets and negligible net charge‑offs. Capital ratios declined modestly due to the securities loss and balance sheet growth, but the bank remained well capitalized, with an estimated CET1 ratio of 11.72% and total risk‑based capital ratio of 12.89%. The board declared a $0.08 per share dividend, payable August 7, 2026, to shareholders of record on July 31, 2026.

Positive

Adjusted net income six months 2026 $5.9 million, up 34.9% year over year
Net interest margin increased to 3.78% in Q2 2026 from 3.37% in Q2 2025
Loan portfolio grew 11.6% year over year to $973.5 million at June 30, 2026
Deposits increased $99.8 million since June 30, 2025, including $80.9 million in Q2 2026
Asset quality strong with nonperforming assets at 0.10% of total assets and near‑zero net charge‑offs
Regulatory capital remained robust with estimated CET1 11.72% and total risk‑based 12.89% at June 30, 2026

Negative

GAAP Q2 2026 net loss $1.1 million, or ($0.37) per diluted share
Securities repositioning loss $5.4 million pre‑tax ($3.9 million after‑tax) recognized in Q2 2026
Noninterest income down $5.2 million for six months 2026 due to securities loss
Noninterest expense up $1.8 million for six months 2026, including $337 thousand one‑time retirement costs
Tangible common equity ratio declined 50 basis points linked quarter to 7.30% at June 30, 2026

News Market Reaction – CMHF

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In the Jul 23 session, CMHF gained 0.98%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

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07/23/2026 - 10:48 AM

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 - loans²to total loans	1.04 %	1.02 %	1.06 %	1.07 %	0.99 %	1.04 %	0.99 %
	ACL - loans²to 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
			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
			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

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SOURCE Community Heritage Financial, Inc.

FAQ

What were Community Heritage Financial’s (CMHF) Q2 2026 earnings results?

Community Heritage Financial reported a Q2 2026 net loss of $1.1 million, or ($0.37) per diluted share. According to the company, adjusted non‑GAAP net income was $3.0 million, or $1.02 per diluted share, excluding securities losses and retirement costs.

Why did Community Heritage Financial (CMHF) report a net loss in Q2 2026?

The Q2 2026 net loss of $1.1 million was primarily due to a $5.4 million pre‑tax loss on the sale of securities. According to the company, this loss reflects a strategic portfolio repositioning to reinvest proceeds into higher‑yielding investments.

How did Community Heritage Financial’s Q2 2026 securities repositioning impact future earnings?

The bank sold $77.3 million of lower‑yield securities at 2.73% and realized a $5.4 million pre‑tax loss. According to the company, $57.0 million was reinvested by June 30, 2026 at an estimated 5.10% tax‑equivalent yield, supporting higher future net interest income.

How did loans and deposits grow at Community Heritage Financial (CMHF) through June 30, 2026?

Loans reached $973.5 million, up 11.6% year over year, while deposits increased $99.8 million since June 30, 2025. According to the company, Q2 2026 deposit growth of $80.9 million was driven largely by a targeted deposit campaign across NOW and money market accounts.

What was Community Heritage Financial’s capital position at June 30, 2026?

Shareholders’ equity was $88.8 million, and the tangible common equity ratio was 7.30%, down 50 basis points from March 31, 2026. According to the company, the bank remained well capitalized with an estimated CET1 ratio of 11.72% and total risk‑based capital of 12.89%.

What dividend did Community Heritage Financial (CMHF) declare for Q2 2026?

The board declared a $0.08 per share cash dividend, payable August 7, 2026 to shareholders of record on July 31, 2026. According to the company, this dividend follows its Q2 2026 results, including the impact of the securities portfolio repositioning.

How strong was Community Heritage Financial’s asset quality in Q2 2026?

Asset quality remained strong, with nonperforming assets at 0.10% of total assets and net charge‑offs near zero for Q2 2026. According to the company, the allowance for credit losses increased with loan growth, reaching 1.04% of loans at June 30, 2026.