Affinity Bancshares, Inc. Announces Fourth Quarter and the Year 2024 Financial Results

COVINGTON, Ga.--(BUSINESS WIRE)--Affinity Bancshares, Inc. (NASDAQ:"AFBI") (the "Company"), the holding company for Affinity Bank (the "Bank"), today announced net income of $5.4 million for the year ended December 31, 2024 as compared to $6.4 million for the year ended December 31, 2023 $1.3 million for the three months ended December 31, 2024, as compared to $1.5 million for the three months ended December 31, 2023.

		At or for the three months ended,																				At or for the year ended
Performance Ratios:		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Net income (in thousands)		$	1,345			$	1,730			$	1,031			$	1,335			$	1,514			$	5,441			$	6,448
Diluted earnings per share			0.20				0.26				0.16				0.20				0.23				0.83				0.98
Operating income (1)			1,738				1,883				1,763				1,374				1,514				6,758				6,448
Adjusted diluted earnings per share (1)			0.26				0.29				0.27				0.21				0.23				1.03				0.98
Common book value per share			20.14				20.02				19.49				19.21				18.94				20.14				18.94
Tangible book value per share (1)			17.30				17.18				16.64				16.36				16.08				17.30				16.08
Total assets (in thousands)			866,817				878,561				873,582				869,547				843,258				866,817				843,258
Return on average assets			0.61	%			0.78	%			0.48	%			0.63	%			0.70	%			0.62	%			0.75	%
Return on average equity			4.14	%			5.43	%			3.33	%			4.38	%			5.03	%			4.33	%			5.43	%
Equity to assets			14.90	%			14.61	%			14.32	%			14.18	%			14.41	%			14.90	%			14.41	%
Tangible equity to tangible assets (1)			13.08	%			12.80	%			12.49	%			12.33	%			12.50	%			13.08	%			12.50	%
Net interest margin			3.56	%			3.52	%			3.71	%			3.38	%			3.32	%			3.54	%			3.35	%
Efficiency ratio			75.95	%			71.48	%			78.74	%			75.96	%			74.30	%			76.20	%			71.86	%
(1) Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and reconciliation to GAAP.

Net Income

• Net income was $5.4 million for year ended December 31, 2024 as compared to $6.4 million for the year ended December 31, 2023, as a result of an increase in noninterest expenses related to the recently terminated merger partially offset by an increase in net interest income. Operating income for the year ended December 31, 2024 was $6.8 million as compared to $6.4 million for the year ended December 31, 2023.

• Net income was $1.3 million for three months ended December 31, 2024 as compared to $1.5 million for the three months ended December 31, 2023, as a result of a decrease in noninterest income from the loss on sale of $10.4 million in investment securities available-for-sale that were yielding an weighted average rate under 3.00% allowing for investment in higher yielding loans and an increase in noninterest expenses partially offset by an increase in net interest income. Operating income for the three months ended December 31, 2024 was $1.7 million as compared to $1.5 million for the three months ended December 31, 2023.

Results of Operations

• Net interest income was $7.2 million for the three months ended December 31, 2024 compared to $6.8 million for the three months ended December 31, 2023. The increase was due to an increase in interest income on loans, partially offset by a rise in deposit and borrowing costs and a decrease in interest income on interest-earning deposits.
• Net interest margin for the three months ended December 31, 2024 increased to 3.56% from 3.32% for the three months ended December 31, 2023. The increase in the margin relates to increases in our yield on earning assets exceeding our increases in our deposits and borrowing costs.
• Noninterest income decreased $445,000 to $161,000 for the three months ended December 31, 2024, as a result of the loss on securities available-for-sale recorded in the fourth quarter.
• Non-interest expense increased $336,000 to $5.8 million for the three months ended December 31, 2024 compared to the respective period in 2023, due to increases in professional fees related to merger expenses.
• Net interest income was $28.7 million for the year ended December 31, 2024 compared to $27.2 million for the year ended December 31, 2023. The increase was due to an increase in interest income on loans and investment securities, partially offset by a rise in deposit and borrowing costs and a decrease in interest income on interest-earning deposits.
• Net interest margin for the year ended December 31, 2024 increased to 3.54% from 3.35% for the year ended December 31, 2023. The increase in the margin relates to increases in our yield on earning assets exceeding our increases in our deposits and borrowing costs.
• Provision for credit losses was $438,000 for the year ended December 31, 2024 compared to negative provision of $42,000 for the year ended December 31, 2023.
• Noninterest income decreased $451,000 to $2.0 million for the year ended December 31, 2024, as a result of the loss on securities available-for-sale recorded in the fourth quarter.
• Non-interest expense increased $2.4 million to $23.8 million for the year ended December 31, 2024 compared to 2023, due to increases in professional fees related to our merger expenses and increases in salaries and employee benefits.

Financial Condition

• Total assets increased $23.6 million to $866.8 million at December 31, 2024 from $843.3 million at December 31, 2023, as we experienced loan growth.
• Total gross loans increased $54.2 million to $714.1 million at December 31, 2024 from $659.9 million at December 31, 2023. The increase was due to steady loan demand in construction, commercial non-owner occupied properties, commercial and consumer loans.
• Non-owner occupied office loans totaled $44.2 million at December 31, 2024; the average LTV on these loans is 46.8%, including
  • $17.4 million medical/dental tenants and
  • $26.8 million to other various tenants.
• Investment securities held-to-maturity unrealized gains were $44,000, net of tax. Investment securities available-for-sale unrealized losses were $5.7 million, net of tax.
• Cash and cash equivalents decreased $8.6 million to $41.4 million at December 31, 2024 from $50.0 million at December 31, 2023.
• Deposits decreased by $1.0 million to $673.5 million at December 31, 2024 compared to $674.4 million at December 31, 2023, with a $3.5 million net decrease in demand deposits partially offset by $2.5 million increase in certificates of deposits.
• Borrowings increased by $18.8 million to $58.8 million at December 31, 2024 compared to $40.0 million at December 31, 2023 as we continue to evaluate borrowing needs related to enhancing bank liquidity.

Asset Quality

• Non-performing loans decreased to $4.8 million at December 31, 2024 from $7.4 million at December 31, 2023.
• The allowance for credit losses as a percentage of non-performing loans was 177.9% at December 31, 2024, as compared to 120.1% at December 31, 2023.
• Allowance for credit losses to total loans decreased to 1.19% at December 31, 2024 from 1.35% at December 31, 2023.
• Net loan charge-offs were $650,000 for the year ended December 31, 2024, as compared to net loan charge-offs of $404,000 for the year ended December 31, 2023.

About Affinity Bancshares, Inc.

The Company is a Maryland corporation based in Covington, Georgia. The Company's banking subsidiary, Affinity Bank, opened in 1928 and currently operates a full-service office in Atlanta, Georgia, two full-service offices in Covington, Georgia, and a loan production office serving the Alpharetta and Cumming, Georgia markets.

Forward-Looking Statements

In addition to historical information, this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which describe the future plans, strategies and expectations of the Company. Forward-looking statements can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "contemplate," "continue," "target" and words of similar meaning. Forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Accordingly, you should not place undue reliance on such statements. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this report. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in general economic conditions, interest rates and inflation; changes in asset quality; our ability to access cost-effective funding; fluctuations in real estate values; changes in laws or regulations; changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; changes in technology; failures or breaches of our IT security systems; our ability to introduce new products and services and capitalize on growth opportunities; changes in the value of our goodwill and other intangible assets; our ability to successfully integrate acquired operations or assets; changes in accounting policies and practices; our ability to retain key employees; and the effects of natural disasters and geopolitical events, including terrorism, conflict and acts of war. These risks and other uncertainties are further discussed in the reports that the Company files with the Securities and Exchange Commission.

Average Balance Sheets

The following tables set forth average balance sheets, average annualized yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are monthly average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.

		For the Year Ended December 31,
		2024												2023
		Average Outstanding Balance				Interest				Average Yield/Rate				Average Outstanding Balance				Interest				Average Yield/Rate
		(Dollars in thousands)
Interest-earning assets:
Loans		$	687,487			$	41,349				6.01	%		$	660,045			$	35,422				5.37	%
Investment securities held-to-maturity			32,723				2,018				6.17	%			33,850				2,078				6.14	%
Investment securities available-for-sale			47,449				1,778				3.75	%			49,024				1,772				3.61	%
Interest-earning deposits and federal funds			49,385				2,459				4.98	%			65,333				3,236				4.95	%
Other investments			5,801				369				6.36	%			3,014				192				6.37	%
Total interest-earning assets			822,845				47,973				5.83	%			811,266				42,700				5.26	%
Non-interest-earning assets			49,505												51,987
Total assets		$	872,350											$	863,253
Interest-bearing liabilities:
Interest-bearing checking accounts		$	87,058			$	448				0.51	%		$	92,030			$	271				0.29	%
Money market accounts			147,049				4,760				3.24	%			140,630				3,542				2.52	%
Savings accounts			73,176				2,091				2.86	%			85,555				2,238				2.62	%
Certificates of deposit			217,517				9,157				4.21	%			211,285				8,042				3.81	%
Total interest-bearing deposits			524,800				16,456				3.14	%			529,500				14,093				2.66	%
FHLB advances and other borrowings			55,104				2,351				4.27	%			32,808				1,409				4.29	%
Total interest-bearing liabilities			579,904				18,807				3.24	%			562,308				15,502				2.76	%
Non-interest-bearing liabilities			166,702												182,144
Total liabilities			746,606												744,452
Total stockholders' equity			125,744												118,801
Total liabilities and stockholders' equity		$	872,350											$	863,253
Net interest rate spread											2.59	%											2.50	%
Net interest income						$	29,166											$	27,198
Net interest margin											3.54	%											3.35	%

		For the Three Months Ended December 31,
		2024												2023
		Average Outstanding Balance				Interest				Average Yield/Rate				Average Outstanding Balance				Interest				Average Yield/Rate
		(Dollars in thousands)
Interest-earning assets:
Loans		$	704,198			$	10,774				6.09	%		$	661,913			$	9,290				5.57	%
Investment securities held-to-maturity			29,238				451				6.14	%			34,194				528				6.13	%
Investment securities available-for-sale			46,455				402				3.44	%			47,268				473				3.97	%
Interest-earning deposits and federal funds			44,260				495				4.45	%			53,442				709				5.26	%
Other investments			6,172				105				6.77	%			5,177				83				6.36	%
Total interest-earning assets			830,323				12,227				5.86	%			801,994				11,083				5.48	%
Non-interest-earning assets			47,331												52,938
Total assets		$	877,654											$	854,932
Interest-bearing liabilities:
Interest-bearing checking accounts		$	83,529			$	104				0.50	%		$	90,298			$	99				0.43	%
Money market accounts			152,305				1,264				3.30	%			143,312				1,069				2.96	%
Savings accounts			73,533				529				2.86	%			76,732				558				2.89	%
Certificates of deposit			214,165				2,272				4.22	%			221,817				2,352				4.21	%
Total interest-bearing deposits			523,532				4,169				3.17	%			532,159				4,078				3.04	%
FHLB advances and other borrowings			58,815				625				4.23	%			29,348				300				4.06	%
Total interest-bearing liabilities			582,347				4,794				3.27	%			561,507				4,378				3.09	%
Non-interest-bearing liabilities			166,088												174,077
Total liabilities			748,435												735,584
Total stockholders' equity			129,219												119,348
Total liabilities and stockholders' equity		$	877,654											$	854,932
Net interest rate spread											2.59	%											2.39	%
Net interest income						$	7,433											$	6,705
Net interest margin											3.56	%											3.32	%

AFFINITY BANCSHARES, INC. Consolidated Balance Sheets (unaudited)
		December 31, 2024				December 31, 2023
		(Dollars in thousands except per share amounts)
Assets
Cash and due from banks		$	7,092			$	6,030
Interest-earning deposits in other depository institutions			34,333				43,995
Cash and cash equivalents			41,425				50,025
Investment securities available-for-sale			36,502				48,561
Investment securities held-to-maturity (estimated fair value of $32,568, net of allowance for credit losses of $45 at December 31, 2024 and estimated fair value of $33,835, net of allowance for credit losses of $45 at December 31, 2023)			27,299				34,206
Other investments			6,175				5,434
Loans			714,115				659,876
Allowance for credit loss on loans			(8,496	)			(8,921	)
Net loans			705,619				650,955
Other real estate owned			-				2,850
Premises and equipment, net			3,261				3,797
Bank owned life insurance			16,487				16,086
Intangible assets			18,175				18,366
Other assets			11,874				12,978
Total assets		$	866,817			$	843,258
Liabilities and Stockholders' Equity
Liabilities:
Non-interest-bearing checking		$	151,395			$	154,689
Interest-bearing checking			73,841				85,362
Money market accounts			148,752				138,673
Savings accounts			76,053				74,768
Certificates of deposit			223,440				220,951
Total deposits			673,481				674,443
Federal Home Loan Bank advances and other borrowings			58,815				40,000
Accrued interest payable and other liabilities			5,406				7,299
Total liabilities			737,702				721,742
Stockholders' equity:
Common stock (par value $0.01 per share, 40,000,000 shares authorized; 6,409,598 issued and outstanding at December 31, 2024 and 6,416,628 issued and outstanding at December 31, 2023)			64				64
Preferred stock (10,000,000 shares authorized, no shares outstanding)			-				-
Additional paid in capital			62,355				61,026
Unearned ESOP shares			(4,378	)			(4,587	)
Retained earnings			76,786				71,345
Accumulated other comprehensive loss			(5,712	)			(6,332	)
Total stockholders' equity			129,115				121,516
Total liabilities and stockholders' equity		$	866,817			$	843,258

AFFINITY BANCSHARES, INC. Consolidated Statements of Income (unaudited)
			Three Months Ended December 31,								Year Ended December 31,
			2024				2023				2024				2023
			(Dollars in thousands except per share amounts)
Interest income:
Loans, including fees			$	10,774			$	9,290			$	41,349			$	35,422
Investment securities				958				1,084				4,165				4,042
Interest-earning deposits				495				709				2,459				3,236
Total interest income				12,227				11,083				47,973				42,700
Interest expense:
Deposits				4,169				4,078				16,456				14,093
FHLB advances and other borrowings				625				300				2,351				1,409
Total interest expense				4,794				4,378				18,807				15,502
Net interest income before provision for credit losses				7,433				6,705				29,166				27,198
Provision for credit losses				225				(49	)			438				(42	)
Net interest income after provision for credit losses				7,208				6,754				28,728				27,240
Noninterest income:
Service charges on deposit accounts				371				398				1,520				1,620
Loss on sales of investment securities available-for-sale				(385	)			-				(385	)			-
Net gain on sale of other real estate owned				-				-				135				-
Other				175				208				745				846
Total noninterest income				161				606				2,015				2,466
Noninterest expenses:
Salaries and employee benefits				3,273				3,205				13,126				12,252
Occupancy				617				584				2,451				2,503
Data processing				549				520				2,087				2,025
Professional fees				330				146				2,068				621
Other				999				977				4,029				3,917
Total noninterest expenses				5,768				5,432				23,761				21,318
Income before income taxes				1,601				1,928				6,982				8,388
Income tax expense				256				414				1,541				1,940
Net income			$	1,345			$	1,514			$	5,441			$	6,448
Weighted average common shares outstanding
Basic				6,411,014				6,406,156				6,414,182				6,476,767
Diluted				6,620,602				6,486,442				6,575,406				6,557,053
Basic earnings per share			$	0.21			$	0.24			$	0.85			$	1.00
Diluted earnings per share			$	0.20			$	0.23			$	0.83			$	0.98

Explanation of Certain Unaudited Non-GAAP Financial Measures

Reported amounts are presented in accordance with GAAP. Additionally, the Company believes the following information is utilized by regulators and market analysts to evaluate a company's financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the Non-GAAP Reconciliation tables below for details on the earnings impact of these items.

		For the Three Months Ended										For the Year Ended
Non-GAAP Reconciliation		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Operating net income reconciliation
Net income (GAAP)		$1,345		$1,730		$1,031		$1,335		$1,514		$5,441		$6,448
Net loss on securities available for sale		385		-		-		-		-		385		-
Merger-related expenses		119		196		939		50		-		1,304		-
Income tax expense		(111)		(43)		(207)		(11)		-		(372)		-
Operating net income		$1,738		$1,883		$1,763		$1,374		$1,514		$6,758		$6,448
Weighted average diluted shares		6,620,602		6,411,468		6,546,382		6,416,628		6,486,442		6,575,406		6,557,053
Adjusted diluted earnings per share		$0.26		$0.29		$0.27		$0.21		$0.23		$1.03		$0.98
Tangible book value per common share reconciliation
Book Value per common share (GAAP)		$20.14		$20.02		$19.49		$19.21		$18.94		$20.14		$18.94
Effect of goodwill and other intangibles		(2.84)		(2.84)		(2.85)		(2.85)		(2.86)		(2.84)		(2.86)
Tangible book value per common share		$17.30		$17.18		$16.64		$16.36		$16.08		$17.30		$16.08
Tangible equity to tangible assets reconciliation
Equity to assets (GAAP)		14.90%		14.61%		14.32%		14.18%		14.41%		14.90%		14.41%
Effect of goodwill and other intangibles		(1.81)%		(1.81)%		(1.83)%		(1.85)%		(1.91)%		(1.81)%		(1.91)%
Tangible equity to tangible assets (1)		13.08%		12.80%		12.49%		12.33%		12.50%		13.08%		12.50%
(1) Tangible assets is total assets less intangible assets. Tangible equity is total equity less intangible assets.

Contacts

Edward J. Cooney
Chief Executive Officer
[phone]

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