Community Heritage Financial, Inc. Reports Third Quarter 2026 Results

PR Newswire · 1d ago

MIDDLETOWN, Md., Oct. 27, 2026 /PRNewswire/ -- Community Heritage Financial, Inc. (the "Company" or "CHF") (OTC ID: CMHF), the parent company of Middletown Valley Bank ("MVB" or the "Bank"), reported net income of $4.1 million, or $1.39 diluted earnings per share, for the third quarter of 2026, compared to a net loss of $1.1 million, or $(0.37) diluted earnings per share, for the second quarter of 2026 and net income of $1.9 million, or $0.66 diluted earnings per share, for the third quarter of 2025. Results for the second quarter of 2026 were impacted by a $5.4 million pre-tax loss on the sale of securities associated with the Company's strategic investment portfolio repositioning and approximately $337 thousand of one-time retirement-related costs associated with the retirement of several long-tenured senior officers.

For the first nine months of 2026, net income totaled $5.9 million, or $1.99 diluted earnings per share, compared to $6.3 million, or $2.13 diluted earnings per share, for the same period in 2025. Excluding the second quarter 2026 nonrecurring items associated with the securities portfolio repositioning and executive retirement costs, core earnings¹ for the first nine months of 2026 totaled $10.0 million, or $3.38 diluted earnings per share, representing an increase of 59.9% compared to core earnings¹ of $6.3 million, or $2.13 diluted earnings per share, for the first nine months of 2025.

"Our third quarter results highlight the strength of our core banking franchise," said BJ Goetz, President and Chief Executive Officer. "Loan growth, expansion of our net interest margin, favorable credit quality metrics, and disciplined balance sheet management produced strong earnings performance during the quarter. The strategic actions completed during the second quarter positioned the Company for enhanced earnings and balance sheet performance moving forward."

Third Quarter 2026 Highlights

Net income totaled $4.1 million, compared to a net loss of $1.1 million in the linked quarter and net income of $1.9 million in the third quarter of 2025.
Diluted earnings per share were $1.39, compared to $(0.37) in the second quarter of 2026 and $0.66 in the third quarter of 2025.
Annualized return on average assets increased to 1.39%, compared to (0.38%) in the second quarter of 2026 and 0.70% in the third quarter of 2025.
Annualized return on average equity increased to 18.23%, compared to (4.82%) in the second quarter of 2026 and 8.96% in the third quarter of 2025.
Net interest margin expanded to 3.88%, up from 3.78% in the linked quarter and 3.40% a year ago.
Gross loans increased to $980.5 million, up $10.4 million, or 1.1%, from June 30, 2026, and up $84.3 million, or 9.4%, from September 30, 2025.
Credit quality remained strong, with nonperforming assets declining to $1.1 million, or 0.10% of total assets, compared to $2.0 million, or 0.19% of total assets, one year earlier.
Book value per share was $30.08 and tangible book value per share was $29.52 as of September 30, 2026.

Net Interest Income

Net interest income for the third quarter of 2026 totaled $11.4 million, an increase of $784 thousand, or 7.4%, from the second quarter of 2026 and an increase of $2.2 million, or 24.0%, from the third quarter of 2025. The increase from both prior periods was driven primarily by continued loan and deposit growth and higher earning asset yields, including an improved yield on securities reflective of the second quarter 2026 investment portfolio repositioning.

The Company's net interest margin increased to 3.88% during the third quarter of 2026 from 3.78% during the second quarter of 2026 and 3.40% during the third quarter of 2025. The Company's yield on interest-earning assets increased to 5.71% from 5.55% in the linked quarter and 5.38% a year earlier, while the cost of interest-bearing liabilities declined to 2.61% from 2.85% in the third quarter of 2025.

For the first nine months of 2026, net interest income totaled $32.0 million, an increase of $5.5 million, or 21.0%, from $26.4 million for the first nine months of 2025. The increase reflects strong loan and deposit growth, expansion in earning asset yields, and margin improvement resulting from balance sheet repositioning initiatives.

Provision for Credit Losses

The Company recorded a negative provision for credit losses of $721 thousand during the third quarter of 2026, compared to a provision expense of $344 thousand during the second quarter of 2026 and $961 thousand during the third quarter of 2025. The negative provision reflects favorable credit quality trends, improving asset quality metrics, and net loan loss recoveries during the quarter. Net loan loss recoveries totaled $493 thousand in the third quarter of 2026 compared to $3 thousand during both the linked quarter and the third quarter of 2025. The increase in the third quarter of 2026 reflected a $497 thousand recovery related to a loan charge-off in 2021.

For the first nine months of 2026, the Company recorded a negative provision for credit losses of $454 thousand, compared to provision expense of $1.4 million during the first nine months of 2025. Net recoveries totaled $406 thousand during the first nine months of 2026 compared to $10 thousand during the same period in 2025. Through the nine months of 2026, the Bank recovered a total of $1.2 million related to the 2021 loan charge-off noted above, in addition to other loan loss recoveries of $10 thousand. The loan recoveries were offset by loan charge-offs of $755 thousand, $748 thousand of which was related to a single credit to a borrower that uncovered internal theft by one of its owners.

Noninterest Income

Noninterest income totaled $834 thousand during the third quarter of 2026, compared to a loss of $4.2 million during the second quarter of 2026 and income of $1.1 million during the third quarter of 2025. The linked-quarter improvement was primarily attributable to the absence of the $5.4 million loss on the sale of securities recognized during the second quarter of 2026.

Excluding the securities loss, core noninterest income¹ totaled $1.2 million during the second quarter of 2026. Compared to that amount, third quarter noninterest income declined primarily due to lower mortgage banking revenue and lower earnings on bank-owned life insurance, partially offset by growth in card and merchant service income and deposit service charges.

For the first nine months of 2026, reported noninterest income was a loss of $2.5 million compared to income of $2.9 million for the first nine months of 2025. Excluding the securities loss, core noninterest income¹ for the first nine months of 2026 totaled $2.9 million, substantially consistent with the prior year period.

Noninterest Expense

Noninterest expense totaled $7.3 million during the third quarter of 2026, a decrease of $294 thousand, or 3.9%, from the second quarter of 2026 and an increase of $623 thousand, or 9.3%, from the third quarter of 2025. The linked-quarter decrease principally reflected lower salaries and employee benefits expense following the retirement-related costs incurred during the second quarter of 2026, as well as lower occupancy costs.

Compared to the third quarter of 2025, the increase in noninterest expense was primarily attributable to higher salaries and employee benefits, increased data and item processing, which includes costs associated with ongoing technology investments, and higher occupancy expenses.

For the first nine months of 2026, noninterest expense totaled $22.0 million, compared to $19.6 million for the first nine months of 2025. Excluding one-time retirement-related costs, core noninterest expense¹ totaled $21.7 million, representing an increase of approximately 10.6% over the prior-year period. The increase was primarily driven by higher personnel costs, data and item processing costs, and occupancy expenses.

Balance Sheet

Total assets were $1.19 billion as of September 30, 2026, compared to $1.19 billion as of June 30, 2026 and $1.09 billion as of September 30, 2025. Total loans increased to $983.7 million, up $10.2 million from June 30, 2026 and $83.9 million from September 30, 2025. Growth in loans over the past twelve months was led by residential real estate, owner-occupied commercial real estate, commercial and industrial lending, and multifamily loans.

Total deposits were $1.06 billion as of September 30, 2026, compared to $1.08 billion as of June 30, 2026 and $982.3 million as of September 30, 2025. The linked-quarter decline primarily reflected customer-specific fluctuations in deposit balances. Year-over-year deposit growth totaled $80.0 million, or 8.1%.

Shareholders' equity totaled $88.7 million as of September 30, 2026, while book value per share increased to $30.08 from $29.46 as of September 30, 2025. Tangible book value per share increased to $29.52 from $28.90 one year earlier.

Asset Quality and Capital

Asset quality metrics continued to improve during the quarter. Nonaccrual loans declined to $1.1 million as of September 30, 2026 from $2.0 million as of September 30, 2025. Nonperforming assets represented 0.10% of total assets, compared to 0.19% one year earlier. The allowance for credit losses represented 1.00% of total loans as of September 30, 2026.

The Company and the Bank remained well-capitalized. As of September 30, 2026, the Bank's common equity tier 1 capital ratio was 11.97%, the total risk-based capital ratio was 13.09%, and the tier 1 leverage ratio was 9.27%.

Non-GAAP Financial Measures

Management has provided non-GAAP financial measures in this press release, including in the following table, and has done so as 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.


	Three Months Ended			Nine Months Ended
	9/30/2026	6/30/2026¹	9/30/2025	9/30/2026¹	9/30/2025

Core earnings¹	$ 4,143,191	$ 3,018,455	$ 1,934,396	$ 10,013,895	$ 6,285,036
Core earnings PTPP²	$ 4,883,511	$ 4,458,637	$ 3,529,972	$ 13,111,855	$ 9,752,210
Noninterest income	$ 834,033	$ 1,200,957	$ 1,054,646	$ 2,866,306	$ 2,930,147
Noninterest expense	$ 7,315,262	$ 7,272,279	$ 6,692,500	$ 21,659,448	$ 19,588,876
Provision for credit losses	$ (720,798)	$ 394,791	$ 960,847	$ (403,306)	$ 1,357,735
Core earnings¹ per common share:
Diluted	$ 1.39	$ 1.02	$ 0.66	$ 3.38	$ 2.13
Annualized return on average assets	1.39 %	1.05 %	0.70 %	1.16 %	0.79 %
Annualized return on average stockholders' equity	18.23 %	13.24 %	8.96 %	14.73 %	10.12 %

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 calculated using methods other than those prescribed by generally accepted accounting principles ("GAAP"). See "Reconciliation of non-GAAP Financial Measures" at the end of the press release.

² "PTPP" is a non-GAAP financial measure and represents earnings pre-tax and pre-provision for credit losses. It is calculated by adding income tax expense and the provision for credit losses to net income. 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
			09/30/2026	06/30/2026	03/31/2026	12/31/2025¹	09/30/2025

ASSETS
	Cash and due from banks		$ 61,358,390	$ 76,651,107	$ 41,117,713	$ 30,707,438	$ 28,508,739
	Securities available-for-sale, at fair value		117,796,751	117,130,706	51,710,763	53,681,375	54,390,834
	Securities held-to-maturity		-	-	85,592,007	86,553,557	87,642,810
		Less allowance for credit losses	-	-	50,414	78,511	73,338
		Total securities held-to-maturity	-	-	85,541,593	86,475,046	87,569,472
		Total securities	117,796,751	117,130,706	137,252,356	140,156,421	141,960,306
	Equity securities, at cost		1,502,700	1,027,700	2,709,200	2,281,700	951,700
	Loans		983,736,202	973,493,548	947,933,729	930,855,154	899,798,030
		Less allowance for loan credit losses	9,851,224	10,097,893	9,701,472	9,842,370	9,648,797
		Loans, net	973,884,978	963,395,655	938,232,257	921,012,784	890,149,233
	Loans held for sale		1,369,793	3,078,861	3,241,537	3,935,463	3,782,055
	Premises and equipment		6,546,991	6,331,653	6,238,824	6,423,885	6,335,780
	Right of use asset		5,958,408	5,134,965	4,903,838	5,014,155	1,691,267
	Accrued interest receivable		3,738,786	3,626,025	3,607,585	3,397,155	3,433,569
	Deferred tax assets		6,617,826	5,060,704	4,226,269	4,452,078	4,501,612
	Bank-owned life insurance		8,062,683	8,044,423	7,858,667	7,837,986	7,656,529
	Goodwill		1,656,507	1,656,507	1,656,507	1,656,507	1,656,507
	Other assets		2,990,830	3,556,292	2,311,950	2,204,457	1,836,331

		Total Assets	$ 1,191,484,643	$ 1,194,694,598	$ 1,153,356,703	$ 1,129,080,029	$ 1,092,463,628

LIABILITIES and SHAREHOLDERS' EQUITY

	Liabilities
		Deposits:
		Noninterest-bearing demand	$ 259,660,818	$ 266,326,799	$ 272,084,060	$ 257,415,232	$ 255,052,436
		Interest-bearing	802,720,497	811,348,546	724,715,536	727,389,108	727,289,753
		Total deposits	1,062,381,315	1,077,675,345	996,799,596	984,804,340	982,342,189
		FHLB advances and other borrowings	15,000,000	5,000,000	42,000,000	33,000,000	5,000,000
		Subordinated debt, net	12,062,131	12,059,069	12,056,006	12,052,944	12,049,882
		Lease liabilities	6,040,218	5,218,274	4,983,788	5,088,540	1,760,706
		Accrued interest payable	690,101	484,064	720,468	473,682	709,739
		Other liabilities	6,627,737	5,487,564	5,272,313	4,809,964	4,306,714

		Total Liabilities	1,102,801,502	1,105,924,316	1,061,832,171	1,040,229,470	1,006,169,230

	Shareholders' Equity
		Common stock	29,483	29,481	29,459	29,327	29,291
		Additional paid-in-capital	41,802,851	41,702,821	41,642,026	41,649,351	41,588,025
		Retained earnings	57,504,836	53,597,510	54,931,337	52,313,860	50,180,223
		Accumulated other comprehensive loss	(10,654,029)	(6,559,530)	(5,078,290)	(5,141,979)	(5,503,141)

		Total Shareholders' Equity	88,683,141	88,770,282	91,524,532	88,850,559	86,294,398

		Total Liabilities and Shareholders' Equity	$ 1,191,484,643	$ 1,194,694,598	$ 1,153,356,703	$ 1,129,080,029	$ 1,092,463,628

	¹ December 31, 2025 information derived from the audited financial statements.

Community Heritage Financial, Inc. and Subsidiaries

Statements of Income (unaudited)

			Three Months Ended					Nine Months Ended
			09/30/2026	06/30/2026	03/31/2026	12/31/2025	09/30/2025	09/30/2026	09/30/2025

Interest Income
	Loans, including fees		$ 15,134,399	$ 14,254,582	$ 13,870,716	$ 13,604,427	$ 13,086,145	$ 43,259,697	$ 37,912,479
	Securities		1,179,790	1,044,498	989,011	994,358	946,231	3,213,299	2,693,584
	Fed funds sold and other bank deposits		436,913	244,187	84,701	176,658	511,786	765,801	1,098,017
		Total interest income	16,751,102	15,543,267	14,944,428	14,775,443	14,544,162	47,238,797	41,704,080

Interest Expense
	Deposits		5,126,168	4,587,069	4,431,541	4,873,913	5,031,782	14,144,778	14,195,707
	Subordinated debt		207,249	119,161	295,339	57,799	137,305	621,749	475,685
	Other borrowed funds		52,945	256,664	207,250	207,250	207,249	516,859	621,749
		Total interest expense	5,386,362	4,962,894	4,934,130	5,138,962	5,376,336	15,283,386	15,293,141

Net interest income			11,364,740	10,580,373	10,010,298	9,636,481	9,167,826	31,955,411	26,410,939
Provision for credit losses			(720,798)	344,377	(77,299)	124,140	960,847	(453,720)	1,357,735
Net interest income after provision
	for credit losses		12,085,538	10,235,996	10,087,597	9,512,341	8,206,979	32,409,131	25,053,204

Noninterest income
	Mortgage banking revenue		214,578	402,775	236,836	428,177	348,561	854,189	919,016
	Card and merchant services		343,670	344,548	313,701	337,191	333,325	1,001,919	924,822
	Service charges on deposits		258,988	250,752	262,717	252,477	254,754	772,457	721,707
	Earnings on bank-owned life insurance		2,997	178,191	12,390	48,166	77,570	193,578	220,337
	Loss on sale of securities		-	(5,393,148)	-	-	-	(5,393,148)	-
	Other		13,800	24,691	5,672	18,737	40,436	44,163	144,265
		Total noninterest income (loss)	834,033	(4,192,191)	831,316	1,084,748	1,054,646	(2,526,842)	2,930,147

Noninterest expense
	Salaries and employee benefits		4,256,036	4,658,424	3,979,145	4,101,261	3,861,631	12,893,605	11,368,892
	Data and item processing		1,037,662	953,718	1,030,332	1,043,435	940,872	3,021,712	2,697,643
	Occupancy and equipment		639,360	750,870	761,855	709,382	641,092	2,152,085	1,935,508
	Legal and professional fees		361,168	280,505	257,974	320,853	332,527	899,647	977,272
	FDIC insurance		187,500	161,334	200,001	389,431	166,176	548,835	479,979
	Advertising		112,434	109,101	97,674	74,846	91,883	319,209	278,511
	Other		721,102	695,238	744,926	769,525	658,319	2,161,266	1,851,071
		Total noninterest expense	7,315,262	7,609,190	7,071,907	7,408,733	6,692,500	21,996,359	19,588,876

Income (loss) before income taxes			5,604,309	(1,565,385)	3,847,006	3,188,356	2,569,125	7,885,930	8,394,475
Income tax expense (benefit)			1,461,118	(467,233)	994,757	820,106	634,729	1,988,642	2,109,439
Net income (loss)			$ 4,143,191	$ (1,098,152)	$ 2,852,249	$ 2,368,250	$ 1,934,396	$ 5,897,288	$ 6,285,036

Community Heritage Financial, Inc. and Subsidiaries

Per Share Data (unaudited)

			Three Months Ended					Nine Months Ended
			09/30/2026	06/30/2026	03/31/2026	12/31/2025	09/30/2025	09/30/2026	09/30/2025

Earnings per common share
	Basic		$ 1.41	$ (0.37)	$ 0.97	$ 0.81	$ 0.66	$ 2.00	$ 2.15
	Diluted		$ 1.39	$ (0.37)	$ 0.97	$ 0.80	$ 0.66	$ 1.99	$ 2.13
Common shares outstanding at period end			2,948,308	2,948,143	2,945,928	2,932,680	2,929,053	2,948,308	2,929,053
Average common shares outstanding
	Basic		2,948,267	2,946,683	2,936,041	2,932,562	2,929,012	2,943,708	2,926,865
	Diluted		2,978,354	2,946,683	2,947,910	2,956,327	2,952,922	2,966,872	2,946,201
Cash dividends paid per common share			$ 0.08	$ 0.08	$ 0.08	$ 0.08	$ 0.08	$ 0.24	$ 0.24

Community Heritage Financial, Inc. and Subsidiaries

Selected Financial Data (unaudited)

		As of and for the Three Months Ended					As of and for the Nine Months Ended
		09/30/2026	06/30/2026	03/31/2026	12/31/2025	09/30/2025	09/30/2026	09/30/2025

Per Share Data
	Common shares outstanding at period end	2,948,308	2,948,143	2,945,928	2,932,680	2,929,053	2,948,308	2,929,053
	Book value per share	$ 30.08	$ 30.11	$ 31.07	$ 30.30	$ 29.46	$ 30.08	$ 29.46
	Tangible book value per share¹	$ 29.52	$ 29.55	$ 30.51	$ 29.73	$ 28.90	$ 29.52	$ 28.90

Capital (bank consolidated only unless noted otherwise)
	Common equity tier 1 (CET1) capital	11.97 %	11.72 %	12.02 %	11.96 %	12.15 %	11.97 %	12.15 %
	Tier 1 capital	11.97 %	11.72 %	12.02 %	11.96 %	12.15 %	11.97 %	12.15 %
	Total risk-based capital	13.09 %	12.89 %	13.16 %	13.14 %	13.37 %	13.09 %	13.37 %
	Tier 1 leverage ratio	9.27 %	8.82 %	9.47 %	9.48 %	9.32 %	9.27 %	9.32 %
	Tangible common equity to tangible assets (CHF)¹	7.31 %	7.30 %	7.80 %	7.73 %	7.76 %	7.31 %	7.76 %

Asset Quality Data
	Nonaccrual loans	$ 1,147,894	$ 1,212,877	$ 1,232,834	$ 2,025,128	$ 2,044,469	$ 1,147,894	$ 2,044,469
	Non-performing assets	$ 1,147,894	$ 1,212,877	$ 1,232,834	$ 2,025,128	$ 2,044,469	$ 1,147,894	$ 2,044,469
	Non-performing assets plus loans past due 90+ days	$ 1,147,894	$ 1,220,371	$ 1,232,834	$ 2,025,128	$ 2,044,469	$ 1,147,894	$ 2,044,469
	Non-performing loans to loans	0.12 %	0.13 %	0.13 %	0.22 %	0.23 %	0.12 %	0.23 %
	Non-performing assets to total assets	0.10 %	0.10 %	0.11 %	0.18 %	0.19 %	0.10 %	0.19 %
	Net (charge-offs) / recoveries	$ 493,170	$ 3,450	$ (90,410)	$ 3,450	$ 3,450	$ 406,210	$ 10,370
	Net (charge-offs) / recoveries to average loans	0.05 %	0.00 %	-0.01 %	0.00 %	0.00 %	0.04 %	0.00 %
	ACL - loans²to total loans	1.00 %	1.04 %	1.02 %	1.06 %	1.07 %	1.00 %	1.07 %
	ACL - loans²to non-performing assets plus loans past due 90+ days	858.20 %	827.44 %	786.92 %	486.01 %	471.95 %	858.20 %	471.95 %

Other Data
	Return on average assets	1.39 %	-0.38 %	1.02 %	0.85 %	0.70 %	0.68 %	0.79 %
	Return on average equity	18.23 %	-4.82 %	12.71 %	10.63 %	8.96 %	8.68 %	10.12 %
	Net interest margin	3.88 %	3.78 %	3.67 %	3.56 %	3.40 %	3.78 %	3.37 %
	Yield on interest-earning assets	5.71 %	5.55 %	5.48 %	5.45 %	5.38 %	5.58 %	5.33 %
	Cost of interest-bearing liabilities	2.61 %	2.56 %	2.61 %	2.73 %	2.85 %	2.60 %	2.81 %
	Loans to deposits ratio	92.60 %	90.33 %	95.10 %	94.52 %	91.60 %	92.60 %	91.60 %

	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
			September 30, 2026			June 30, 2026			September 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	$ 982,703,585	$ 15,134,399	6.12 %	$ 954,410,076	$ 14,254,582	5.99 %	$ 883,763,296	$ 13,086,145	5.89 %
		Securities	130,700,857	1,179,790	3.61 %	134,552,222	1,044,498	3.11 %	139,178,904	946,231	2.72 %
		Fed funds sold and other bank deposits	52,928,673	436,913	3.27 %	33,144,617	244,187	2.96 %	51,010,040	511,786	3.98 %
			1,166,333,115	16,751,102	5.71 %	1,122,106,915	15,543,267	5.55 %	1,073,952,240	14,544,162	5.38 %

	Noninterest-earning assets		19,005,279			26,319,812			22,561,809

		Total Assets	$ 1,185,338,394			$ 1,148,426,727			$ 1,096,514,049

LIABILITIES AND SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
		Demand deposits	$ 611,873,884	$ 3,506,008	2.27 %	$ 562,295,257	$ 3,013,089	2.15 %	$ 541,428,761	$ 3,332,702	2.44 %
		Time deposits	190,566,104	1,620,160	3.37 %	185,241,631	1,573,980	3.41 %	184,562,867	1,699,080	3.65 %
		Interest-bearing deposits	802,439,988	5,126,168	2.53 %	747,536,888	4,587,069	2.46 %	725,991,628	5,031,782	2.75 %
		Borrowings	17,171,234	260,194	6.05 %	29,314,083	375,825	5.13 %	23,176,928	344,554	5.93 %
		Interest-bearing liabilities	819,611,222	5,386,362	2.61 %	776,850,971	4,962,894	2.56 %	749,168,556	5,376,336	2.85 %
	Noninterest-bearing liabilities:
		Demand deposits	264,215,906			269,761,926			255,304,997
		Other	11,339,378			10,386,224			6,424,548

		Total Liabilities	1,095,166,506			1,056,999,121			1,010,898,101

		Cost of Total Deposits			1.91 %			1.81 %			2.03 %
		Cost of Total Funds (interest-
		bearing liabilities plus non-
		interest-bearing deposits)			1.96 %			1.87 %			2.09 %

	Shareholders' equity		90,171,888			91,427,606			85,615,948

		Total Liabilities and Shareholders Equity	$ 1,185,338,394			$ 1,148,426,727			$ 1,096,514,049

		Net interest income / NIM		$ 11,364,740	3.88 %		$ 10,580,373	3.78 %		$ 9,167,826	3.40 %

Community Heritage Financial, Inc. and Subsidiaries

Condensed Average Balance Sheet Analysis (unaudited)

			Nine Months Ended
			September 30, 2026			September 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	$ 960,994,637	$ 43,259,697	6.02 %	$ 870,744,610	$ 37,912,479	5.82 %
		Securities	135,983,737	3,213,299	3.15 %	136,582,535	2,693,584	2.63 %
		Fed funds sold and other bank deposits	33,572,332	765,801	3.05 %	38,623,627	1,098,017	3.80 %
			1,130,550,706	47,238,797	5.58 %	1,045,950,772	41,704,080	5.33 %

	Noninterest-earning assets		23,859,068			22,167,616

		Total Assets	$ 1,154,409,774			$ 1,068,118,388

LIABILITIES AND SHAREHOLDERS' EQUITY
	Interest-bearing liabilities:
		Demand deposits	$ 571,721,252	$ 9,377,851	2.19 %	$ 526,941,332	$ 9,443,860	2.40 %
		Time deposits	186,050,082	4,766,927	3.43 %	172,910,792	4,751,847	3.67 %
		Interest-bearing deposits	757,771,334	14,144,778	2.50 %	699,852,124	14,195,707	2.71 %
		Borrowings	29,500,325	1,138,608	5.15 %	26,871,375	1,097,434	5.45 %
		Interest-bearing liabilities	787,271,659	15,283,386	2.60 %	726,723,499	15,293,141	2.81 %
	Noninterest-bearing liabilities:
		Demand deposits	265,015,831			251,454,884
		Other	11,255,789			6,873,118

		Total Liabilities	1,063,543,279			985,051,501

		Cost of Total Deposits			1.85 %			2.00 %
		Cost of Total Funds (interest-
		bearing liabilities plus non-
		interest-bearing deposits)			1.94 %			2.09 %

	Shareholders' equity		90,866,495			83,066,887

		Total Liabilities and Shareholders Equity	$ 1,154,409,774			$ 1,068,118,388

		Net interest income / NIM		$ 31,955,411	3.78 %		$ 26,410,939	3.37 %

Community Heritage Financial, Inc. and Subsidiaries

Loan and Deposit Composition (unaudited)

			As of Period End
			09/30/2026	06/30/2026	03/31/2026	12/31/2025	09/30/2025

Loans:
Commercial real estate:
	Construction and land development		$ 71,760,956	$ 77,375,812	$ 84,428,311	$ 87,098,819	$ 80,671,698
	Multifamily		26,489,201	23,752,016	23,033,500	23,416,919	22,749,443
	Farmland		42,101,228	47,470,183	30,473,035	30,057,354	29,121,486
	Other:
		Owner occupied	160,819,100	152,971,360	152,110,763	147,006,921	142,991,662
		Non-owner occupied	186,297,924	184,240,299	178,593,573	177,115,227	170,462,324

Residential, including home equity			344,933,650	339,069,899	329,551,095	322,126,792	314,145,221
Commercial and industrial			146,958,177	144,278,828	145,316,304	139,246,435	135,174,298
Consumer			1,163,813	976,461	936,235	1,181,301	868,300
		Gross loans	980,524,049	970,134,858	944,442,816	927,249,768	896,184,432
		Net deferred loan costs	3,212,153	3,358,690	3,490,913	3,605,386	3,613,598
			$ 983,736,202	$ 973,493,548	$ 947,933,729	$ 930,855,154	$ 899,798,030

Deposits:
Noninterest-bearing demand			$ 259,660,818	$ 266,326,799	$ 272,084,060	$ 257,415,232	$ 255,052,436
Interest-bearing:
	NOW ¹		234,796,311	240,228,075	197,158,536	199,685,709	202,974,127
	Savings		74,520,077	77,224,221	75,285,399	71,859,873	71,308,729
	Money market ¹		301,187,670	304,000,976	271,791,739	272,585,155	266,564,412
	Time		192,216,439	189,895,274	180,479,862	183,258,371	186,442,485
		Total interest-bearing	802,720,497	811,348,546	724,715,536	727,389,108	727,289,753
		Total Deposits	$ 1,062,381,315	$ 1,077,675,345	$ 996,799,596	$ 984,804,340	$ 982,342,189

	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					Nine Months Ended
			09/30/2026	06/30/2026	03/31/2026	12/31/2025	09/30/2025	09/30/2026	09/30/2025

Financial Measurements:

	Core Earnings
	Net income (loss) (GAAP)		$ 4,143,191	$ (1,098,152)	$ 2,852,249	$ 2,368,250	$ 1,934,396	$ 5,897,288	$ 6,285,036
	Adjustments to net income to exclude non-core items:
		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)	-
	Core earnings (Non-GAAP)		$ 4,143,191	$ 3,018,455	$ 2,852,249	$ 2,368,250	$ 1,934,396	$ 10,013,895	$ 6,285,036
		Income tax expense (benefit)	1,461,118	(467,233)	994,757	820,106	634,729	1,988,642	2,109,439
		Provision for credit losses	(720,798)	344,377	(77,299)	124,140	960,847	(453,720)	1,357,735
		Less: income tax expense (benefit)	-	(1,563,038)	-	-	-	(1,563,038)	-
	Core earnings PTPP (Non-GAAP)		$ 4,883,511	$ 4,458,637	$ 3,769,707	$ 3,312,496	$ 3,529,972	$ 13,111,855	$ 9,752,210

	Core earnings basic earnings per share (Non-GAAP)		$ 1.41	$ 1.02	$ 0.97	$ 0.81	$ 0.66	$ 3.40	$ 2.15
	Core earnings diluted earnings per share (Non-GAAP)		$ 1.39	$ 1.02	$ 0.97	$ 0.80	$ 0.66	$ 3.38	$ 2.13

	Core Earnings Ratios, annualized (Non-GAAP):
		Return on average assets	1.39 %	1.05 %	1.02 %	0.85 %	0.70 %	1.16 %	0.79 %
		Return on average stockholders' equity	18.23 %	13.24 %	12.71 %	10.63 %	8.96 %	14.73 %	10.12 %
		Noninterest expense to average assets	2.45 %	2.51 %	2.49 %	2.67 %	2.42 %	2.51 %	2.39 %

	Provision for Credit Losses
	Provision for credit losses (GAAP)		$ (720,798)	$ 344,377	$ (77,299)	$ 124,140	$ 960,847	$ (453,720)	$ 1,357,735
	Adjustment to provision for credit losses:
		Elimination of ACL - HTM securities	$ -	$ 50,414	$ -	$ -	$ -	$ 50,414	$ -
	Provision for credit losses (Non-GAAP)		$ (720,798)	$ 394,791	$ (77,299)	$ 124,140	$ 960,847	$ (403,306)	$ 1,357,735

	Noninterest Income
	Noninterest income (GAAP)		$ 834,033	$ (4,192,191)	$ 831,316	$ 1,084,748	$ 1,054,646	$ (2,526,842)	$ 2,930,147
	Adjustment to noninterest income:
		Loss on sale of securities	-	5,393,148	-	-	-	5,393,148	-
	Noninterest income (Non-GAAP)		$ 834,033	$ 1,200,957	$ 831,316	$ 1,084,748	$ 1,054,646	$ 2,866,306	$ 2,930,147

	Salaries and Benefits
	Salaries and benefits (GAAP)		$ 4,256,036	$ 4,658,424	$ 3,979,145	$ 4,101,261	$ 3,861,631	$ 12,893,605	$ 11,368,892
	Adjustment to salaries and benefits:
		Retirement costs	-	(336,911)	-	-	-	(336,911)	-
	Salaries and benefits (Non-GAAP)		$ 4,256,036	$ 4,321,513	$ 3,979,145	$ 4,101,261	$ 3,861,631	$ 12,556,694	$ 11,368,892

	Noninterest Expense
	Noninterest expense (GAAP)		$ 7,315,262	$ 7,609,190	$ 7,071,907	$ 7,408,733	$ 6,692,500	$ 21,996,359	$ 19,588,876
	Adjustment to noninterest expense:
		Retirement costs	-	(336,911)	-	-	-	(336,911)	-
	Noninterest expense (Non-GAAP)		$ 7,315,262	$ 7,272,279	$ 7,071,907	$ 7,408,733	$ 6,692,500	$ 21,659,448	$ 19,588,876

	Tangible Common Equity to Tangible Assets
	Total shareholders' equity (GAAP)		$ 88,683,141	$ 88,770,282	$ 91,524,532	$ 88,850,559	$ 86,294,398
		Intangible assets	(1,656,507)	(1,656,507)	(1,656,507)	(1,656,507)	(1,656,507)
	Total shareholders' equity (Non-GAAP)		$ 87,026,634	$ 87,113,775	$ 89,868,025	$ 87,194,052	$ 84,637,891

	Total assets (GAAP)		$ 1,191,484,643	$ 1,194,694,598	$ 1,153,356,703	$ 1,129,080,029	$ 1,092,463,628
		Intangible assets	(1,656,507)	(1,656,507)	(1,656,507)	(1,656,507)	(1,656,507)
	Total assets (Non-GAAP)		$ 1,189,828,136	$ 1,193,038,091	$ 1,151,700,196	$ 1,127,423,522	$ 1,090,807,121

	Tangible common equity to tangible assets (Non-GAAP)		7.31 %	7.30 %	7.80 %	7.73 %	7.76 %

	Tangible Book Value per Share
	Total shareholders' equity (GAAP)		$ 88,683,141	$ 88,770,282	$ 91,524,532	$ 88,850,559	$ 86,294,398
		Intangible assets	(1,656,507)	(1,656,507)	(1,656,507)	(1,656,507)	(1,656,507)
	Tangible shareholders' equity (Non-GAAP)		$ 87,026,634	$ 87,113,775	$ 89,868,025	$ 87,194,052	$ 84,637,891

		Common shares outstanding	2,948,308	2,948,143	2,945,928	2,932,680	2,929,053
	Tangible book value per share (Non-GAAP)		$ 29.52	$ 29.55	$ 30.51	$ 29.73	$ 28.90

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SOURCE Community Heritage Financial, Inc.