Community Heritage Financial, Inc. Completes $12.1 Million Subordinated Debt Offering

MIDDLETOWN, Md., Oct. 31, 2024 — Community Heritage Financial, Inc. (the “Company” or “CHF”) (OTC PK: CMHF), the parent company of Middletown Valley Bank (“MVB” or the “Bank”), today announced the completion of a private offering of $12.1 million in aggregate principal amount of 6.75% Fixed-to-Floating Rate Subordinated Notes due 2034 (the “Notes”). The Company used the net proceeds of the offering, in addition to other internal funds, to fully redeem the Company’s $15.0 million in aggregate principal amount of 5.75% Fixed-to-Floating Notes due 2029, the interest rate for which was scheduled to increase significantly with the transition to a floating rate.

“We are pleased to announce the successful completion of our private, in-market subordinated debt offering. The capital raised provided Community Heritage Financial, Inc. the ability to lower its future cost of capital with the redemption of existing subordinated debt. We are also grateful for the confidence shown and support provided by members of our community who participated in the offering,” said Robert “BJ” Goetz, Jr., President and Chief Executive Officer of the Company.

The Notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. The Notes will initially bear interest at a rate of 6.75% per annum, with interest paid semi-annually in arrears on April 30 and October 30 through October 30, 2029. Thereafter, the Notes will bear interest at an annual floating rate equal to the three-month SOFR, plus 300 basis points, with interest payable semi-annually in arrears. The Notes are redeemable by the Company at its option, in whole or in part, on any interest payment date on or after October 30, 2029.

The offer and sale of the Notes has not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy, any security, nor shall there be any sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC served as legal counsel to the Company.

About Community Heritage Financial, Inc.

Community Heritage Financial, Inc. is the parent company of Middletown Valley Bank (the “Bank”). Middletown Valley Bank provides personal and business banking services, as well as mortgage lending services through its wholly owned subsidiary, Millennium Financial Services, Inc. (Mlend). Originating in Middletown, Maryland in 1908, today the Bank operates offices in the Maryland counties of Frederick, Washington, Garrett and Anne Arundel, and in Franklin County, Pennsylvania. For more information, visit www.communityheritageinc.com or www.mvbbank.com.

Community Heritage Financial, Inc.
Robert E. (BJ) Goetz, Jr.
President & Chief Executive Officer
301-371-3055

SOURCE Community Heritage Financial, Inc.

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