#United States #Middletown Valley Bank #CMHF #Community Heritage Financial #Middletown, MD

Community Heritage Financial, Inc. Reports Strong Third Quarter Results for 2026

In a noteworthy financial announcement on October 27, 2026, Community Heritage Financial, Inc. (CHF), the parent company of Middletown Valley Bank (MVB), reported substantial growth in its financial performance for the third quarter of 2026.

Financial Overview

The Company announced a net income of $4.1 million, translating to a $1.39 diluted earnings per share. This is a remarkable rebound from the previous quarter, where the organization faced a net loss of $1.1 million or $(0.37) per share. When compared to Q3 2025, which recorded a net income of $1.9 million with earnings per share of $0.66, the latest figures indicate a year-over-year improvement.

For the year-to-date performance, CHF has recorded a net income of $5.9 million, which amounts to $1.99 diluted earnings per share compared to $6.3 million or $2.13 diluted earnings per share for the same period in 2025. Notably, amidst various challenges like a $5.4 million pre-tax loss from a securities sale and other costs related to executive retirements, CHF achieved a remarkable 59.9% growth in core earnings, totaling $10.0 million for the first nine months of 2026.

Key Highlights

The performance in the third quarter unfolded several important metrics, including:

• - Annualized return on average assets reached 1.39%, up from (0.38%) in the preceding quarter.
• - Annualized return on average equity also saw an increase to 18.23%, compared to (4.82%) in the second quarter of 2026.
• - The net interest margin expanded to 3.88%, showcasing improved financial health.
• - Total loans skyrocketed to $980.5 million, growing by 1.1% since the last quarter and a robust 9.4% year-on-year.

Loan Growth and Strategies

The increase in loans was primarily fostered by growth across various sectors, particularly residential and commercial real estate, industrial lending, and multifamily loans. President and CEO BJ Goetz commented on these advancements, stating, "Our third-quarter results underscore the strength of our core banking franchise. The strategic actions set in place during the second quarter have effectively positioned the Company to maximize earnings and optimize balance sheet performance going forward."

Moreover, the organization noted a significant drop in nonperforming assets, which declined to 0.10% of total assets. This positive credit quality trend reflects the rigorous assessments and management processes employed within the firm.

Revenue Breakdown

For the third quarter of 2026, CHF reported net interest income of $11.4 million, an increase of 7.4% from the second quarter and a substantial 24.0% rise from the previous year. This increase has largely been attributed to ongoing loan growth and heightened yield on earning assets post reallocation of the investment portfolio. Additionally, the negative provision for credit losses of $721 thousand in Q3 2026 signifies favorable trends in credit quality, marking a noteworthy recovery from previous provisions.

In contrast to Q2 2026, the Company saw a drastic swing in noninterest income, turning from a loss of $4.2 million to a gain of $834 thousand in the third quarter. This recovery was primarily due to the absence of substantial securities losses that hampered the prior quarter’s results.

Looking Ahead

As CHF continues to navigate through the market dynamics and capitalize on core strengths, the Company remains optimistic about potential growth trajectories, driven by strategic decisions and a commitment to balance sheet optimization. With a firm foundation and enhanced flexibility, the future looks promising for Community Heritage Financial, signifying its resilience and adapting capacity in an evolving banking landscape.

In closing, the results for Q3 2026 stand as a testament to the strength, adaptability, and forward-looking policies that define Community Heritage Financial, positioning it well for further successes in the quarters ahead.