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MIDDLETOWN, Md., May 20, 2026
MIDDLETOWN, Md., May 20, 2026 /PRNewswire/ -- Community Heritage Financial, Inc. (the "Company" or "CHF") (OTCID: CMHF), the parent company of Middletown Valley Bank ("MVB" or the "Bank"), announced today it initiated a strategic repositioning of its balance sheet with the sale of lower-yielding investment securities with a book value of $73.3 million.
The sale included both securities available-for-sale and securities held-to-maturity. Securities sold had a weighted average yield of 2.73% and the sale transaction produced an after-tax loss of approximately $3.9 million. The Bank expects to use the proceeds from the sale to purchase securities totaling $68.0 million, all of which will be classified as available-for-sale at the time of purchase, with an estimated weighted average tax equivalent yield of 5.10%. On an annualized basis, the purchased securities are expected to add approximately $1.1 million to net income and improve the net interest margin approximately 13 basis points. The estimated earn-back period is 3.6 years.
The Company's consolidated shareholders' equity and tangible book value will decline approximately $4.8 million and $1.64, respectively, upon recognition of the loss associated with the sale of the securities and the mark-to-market of those securities previously classified as held-to-maturity that were not sold and must now be classified as available-for-sale. The sale will result in a decline in the Company's tangible common equity to tangible common asset ratio of approximately 42 basis points. The Bank's regulatory capital will decline approximately $3.9 million with the sale transaction. The Bank's regulatory capital position will continue classification as well-capitalized.
President and CEO Robert E. (BJ) Goetz, Jr. commented, "Management and the Board of Directors chose to allocate capital to reposition the investment securities portfolio as we believe the initial loss is recovered over a reasonable period of time and the accretive impact to earnings will meaningfully enhance future shareholder value."
Forward-Looking Statements
This press release may contain forward-looking statements with respect to the Company's financial condition, results of operations and business initiatives. 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.
Community Heritage Financial, Inc.
Robert E. (BJ) Goetz, Jr.
President & Chief Executive Officer
301-371-3055
John A. Scaldara, Jr.
Executive Vice President and Chief Financial Officer
301-371-3070
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SOURCE Community Heritage Financial, Inc.
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