Community Heritage Financial Reports Q2 Results, Including $1.1 Million Loss

Middletown, Maryland – Community Heritage Financial, Inc. (CHF), the parent company of Middletown Valley Bank, reported a net loss of $1.1 million for the quarter ended June 30, 2026. This loss equates to ($0.37) per diluted common share. The company's shares trade on the OTC market.

The bank undertook a strategic repositioning of its investment securities portfolio in May 2026, aiming to strengthen its balance sheet and enhance future earnings. The sale resulted in a pre-tax loss of $5.4 million ($3.9 million after-tax), which was recognized in the second quarter. Of the $68.3 million in proceeds from the transaction, the bank had reinvested $57.0 million by the end of June 2026.

Additionally, several senior bank officers retired during the second quarter, incurring $337,000 in one-time severance and other benefit costs. For the six months ended June 30, 2026, the company reported a net income of $1.8 million, or $0.59 per diluted common share, reflecting the impact of the securities portfolio repositioning.

Adjusted figures, excluding the loss on securities sale and retirement costs, indicate a stronger operational performance. The adjusted net income for the second quarter was $3.0 million ($1.02 per share), compared to $2.9 million in the prior quarter. For the six-month period, adjusted net income reached $5.9 million ($1.98 per share), a 34.9% increase year-over-year. The bank's net interest margin improved to 3.78%, driven by the repricing of assets from lower-interest rate periods and a decreasing cost of funds.