Affinity Bancshares, Inc. ( AFBI ) is the holding company of the Affinity Bank in Georgia. After its sale fell through, the bank has been focusing on improving its financial performance while buying back its own shares inThe Investment Doctor is a financial writer, highlighting European small-caps with a 5-7 year investment horizon. He strongly believes a portfolio should consist of a mixture of dividend and growth stocks. He is the leader of the investment group European Small Cap Ideas which offers exclus ...

Affinity Bancshares, Inc. ( AFBI ) is the holding company of the Affinity Bank in Georgia. After its sale fell through, the bank has been focusing on improving its financial performance while buying back its own shares inThe Investment Doctor is a financial writer, highlighting European small-caps with a 5-7 year investment horizon. He strongly believes a portfolio should consist of a mixture of dividend and growth stocks. He is the leader of the investment group European Small Cap Ideas which offers exclus ...

Core Viewpoint - Affinity Bancshares, Inc. (AFBI) has shown strong earnings growth in Q4 2025, driven by increased net interest income and reduced noninterest expenses, despite some challenges in stock performance compared to the S&P 500 Index [1][2][8]. Financial Performance - For Q4 2025, net income was $2.1 million, a 58.5% increase from $1.3 million in Q4 2024, with diluted EPS rising 70% to $0.34 from $0.20 [2]. - Full-year net income reached $8.3 million in 2025, up 53.1% from $5.4 million in 2024, while diluted EPS increased 55.4% to $1.29 from $0.83 [4]. Revenue and Income Sources - Net interest income for Q4 2025 grew 11% to $8.3 million from $7.4 million a year earlier, primarily due to higher interest income on loans and deposits [3]. - Noninterest income saw a modest increase in Q4, but full-year noninterest income declined due to lower service charges and the absence of real estate sale gains [10]. Balance Sheet and Profitability Metrics - Net interest margin (NIM) expanded to 3.77% in Q4 from 3.56% a year earlier, reflecting improved expense control [5]. - Total assets increased to $881.7 million as of Dec. 31, 2025, from $866.8 million a year earlier, supported by loan growth and higher interest-earning deposits [5]. Loan and Deposit Growth - Total gross loans rose to $742.7 million as of Dec. 31, 2025, from $714.1 million a year earlier, with growth in construction, consumer, and commercial real estate loans [6]. - Deposits increased to $695 million as of Dec. 31, 2025, from $673.5 million, primarily driven by demand deposits [6]. Asset Quality - Non-performing loans decreased to $3.6 million as of Dec. 31, 2025, from $4.8 million at the end of 2024, indicating improved asset quality [7]. - The allowance for credit losses increased to 1.21% of total loans as of Dec. 31, 2025, from 1.19% a year earlier, with coverage of non-performing loans rising to 251.9% from 177.9% [7]. Management Insights - Management attributed improved earnings to higher net interest income and reduced noninterest expenses, with a focus on disciplined balance sheet management [8]. - The reduction in noninterest expenses by 5.6% year-over-year to $5.4 million was a key driver of earnings growth [11]. Shareholder Returns and Corporate Actions - The company paid a dividend of $1.50 per share and repurchased $6 million of common stock during the year [13]. - No acquisitions or divestitures beyond balance sheet actions were reported for the quarter [13].

Financial Performance - Net income for the three months ended December 31, 2025, was $2.1 million, an increase of 61.4% compared to $1.3 million for the same period in 2024[2] - Operating income for the year ended December 31, 2025, was $9.2 million, up from $6.8 million in 2024, reflecting a 35.3% increase[6] - Net interest income for the year ended December 31, 2025, was $31.1 million, compared to $29.2 million in 2024, marking a 6.5% increase[6] - Net income for the three months ended December 31, 2025, was $2,132,000, representing a 58.5% increase from $1,345,000 in the same period of 2024[19] - Basic earnings per share for the year ended December 31, 2025, increased to $1.33, up from $0.85 in 2024, marking a growth of 56.5%[19] - Operating net income for the three months ended December 31, 2025, was $2,510,000, compared to $1,738,000 in the same period of 2024, an increase of 44.4%[21] - Adjusted diluted earnings per share for the year ended December 31, 2025, was $1.43, an increase from $1.03 in 2024, reflecting a growth of 38.8%[21] Asset and Liability Management - Total assets increased by $14.9 million to $881.7 million at December 31, 2025, from $866.8 million at December 31, 2024[9] - Total gross loans rose by $28.6 million to $742.7 million at December 31, 2025, from $714.1 million at December 31, 2024[9] - Cash and cash equivalents increased by $12.5 million to $53.9 million at December 31, 2025, from $41.4 million at December 31, 2024[9] - Deposits increased by $21.5 million to $695.0 million at December 31, 2025, compared to $673.5 million at December 31, 2024[9] - Total assets as of December 31, 2025, reached $915,797 thousand, a rise from $877,654 thousand in 2024, indicating a growth of 4.5%[14] - Total liabilities increased to $789,313 thousand as of December 31, 2025, compared to $748,435 thousand in 2024, reflecting a growth of 5.4%[14] Credit Quality - Non-performing loans decreased to $3.6 million at December 31, 2025, down from $4.8 million at December 31, 2024[12] - The allowance for credit losses as a percentage of non-performing loans was 251.9% at December 31, 2025, compared to 177.9% at December 31, 2024[12] - The allowance for credit loss on loans increased to $8,994 thousand as of December 31, 2025, from $8,496 thousand in 2024, reflecting a rise of 5.9%[17] Interest Income and Expenses - Total interest income for the three months ended December 31, 2025, was $13,161,000, an increase of 7.6% from $12,227,000 in the same period of 2024[19] - Net interest income after provision for credit losses for the year ended December 31, 2025, was $31,012,000, up 8.0% from $28,728,000 in 2024[19] - Interest-bearing deposits totaled $582,951 thousand for the three months ended December 31, 2025, compared to $523,532 thousand in the same period of 2024, marking an increase of 11.3%[14] - The average yield on loans for the year ended December 31, 2025, was 6.16%, up from 6.01% in 2024, indicating a year-over-year increase of 2.5%[15] - Total noninterest expenses decreased to $5,444,000 for the three months ended December 31, 2025, compared to $5,768,000 in the same period of 2024, reflecting a reduction of 5.6%[19] Equity and Valuation - Equity decreased by $2.1 million to $127.0 million at December 31, 2025, from $129.1 million at December 31, 2024[9] - Total stockholders' equity decreased slightly to $126,484 thousand as of December 31, 2025, from $129,219 thousand in 2024, a decline of 2.1%[14] - Tangible book value per common share as of December 31, 2025, was $17.89, up from $17.30 in 2024, indicating a growth of 3.4%[21] - Equity to assets ratio (GAAP) as of December 31, 2025, was 14.41%, compared to 14.90% in 2024, showing a decrease of 3.3%[21]

At or for the three months ended, | Performance Ratios: | December 31, | September 30, | June 30, | March 31, | December 31, | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2025 | 2025 | 2025 | 2025 | 2024 | | | | | Net income (in thousands) | $ | 2,132 | $ | 2,217 | $ | 2,152 $ | 1,831 $ | 1,345 | | Diluted earnings per share | 0.34 | 0.34 | 0.33 | 0.28 | 0.20 | | | | | (1) | 2,510 | 2,389 | 2,316 | 1,996 | 1,738 | | | | | Operating income | | | | | | | | | | (1) | | | | | | | | | | Adj ...

Core Viewpoint - Zacks Investment Research has initiated coverage of Affinity Bancshares, Inc. (AFBI) with a "Neutral" recommendation, reflecting a mixed outlook for the company amid industry challenges [1] Company Overview - Affinity Bancshares, based in Covington, GA, is the holding company for Affinity Bank, National Association, primarily operating in Georgia. The company was formed as a successor to Community First Bancshares, Inc. and offers various financial services including commercial real estate, industrial lending, residential real estate, construction, and consumer lending [2] Financial Performance - Affinity Bancshares has shown notable improvement in earnings performance through 2025, with third-quarter 2025 net income increasing year over year due to higher net interest income and a leaner expense base following the absence of merger-related costs [3] - Profitability metrics have trended higher, indicating effective deployment of assets and shareholder capital despite ongoing funding cost pressures [3] Growth Drivers - Key factors driving future growth include strengthened operating efficiency as one-time expenses rolled off, disciplined capital allocation through active share repurchases enhancing per-share value, and improved balance-sheet profitability supported by steady net interest income and controlled growth [4] Market Performance - Affinity Bancshares' stock has significantly outperformed its industry peers but has underperformed the broader market over the past year. The valuation indicates that the market recognizes AFBI's improving earnings profile but remains cautious, reflecting expectations for steady performance rather than a clear re-rating without further improvements [6] Risks and Challenges - The company's net interest margin is under pressure from elevated deposit costs, including higher-rate brokered deposits that could lock in funding expenses through much of 2026. Although deposit growth has improved and the loan-to-deposit ratio is lower, balance-sheet flexibility remains constrained, increasing sensitivity to liquidity conditions [5] - Credit quality is stable but shows early signs of normalization, with modest increases in non-performing loans and exposure to non-owner-occupied office commercial real estate requiring close monitoring [5]

Financial Position - Total assets increased by $58.4 million, or 6.7%, to $925.2 million at September 30, 2025, from $866.8 million at December 31, 2024[111] - Total deposits increased by $65.9 million, or 9.8%, to $739.4 million at September 30, 2025, reflecting increases in all deposit types[113] - Stockholders' equity decreased by $3.7 million, or 2.9%, to $125.4 million at September 30, 2025, primarily due to a special dividend payment of $1.50 per share totaling $8.8 million[115] - The loan-to-deposit ratio improved to 98.7% at September 30, 2025, compared to 106.0% at December 31, 2024[113] Loan and Interest Income - Gross loans increased by $15.4 million, or 2.2%, to $729.5 million at September 30, 2025, with construction loans rising by $6.8 million, or 10.1%[112] - Net interest income for the three months ended September 30, 2025, was $7.77 million, compared to $7.41 million for the same period in 2024[118] - Average loans outstanding for the three months ended September 30, 2025, were $733.1 million, with an average yield of 6.07%[118] - Interest income rose by $618,000, or 5.0%, to $12.9 million for the three months ended September 30, 2025, primarily due to a $623,000 increase in loan income[123] - Interest income increased by $2.1 million, or 5.9%, to $37.9 million for the nine months ended September 30, 2025, compared to $35.7 million in 2024[141] Interest Expense and Margin - The net interest margin for the three months ended September 30, 2025, was 3.49%, slightly down from 3.52% in the previous year[118] - Interest expense increased by $262,000 to $5.2 million for the three months ended September 30, 2025, mainly due to higher average balances of interest-bearing liabilities[126] - Interest expense on deposits rose by $438,000 to $4.6 million for the three months ended September 30, 2025, with certificates of deposit contributing an increase of $185,000[127] - The net interest rate spread decreased to 2.65% for the three months ended September 30, 2025, down from 2.54% for the same period in 2024[129] Noninterest Income and Expenses - Noninterest income increased by $22,000, or 3.9%, to $588,000 for the three months ended September 30, 2025, from $566,000 in 2024[136] - Total non-interest expenses decreased by $275,000, or 4.8%, to $5.429 million for the three months ended September 30, 2025, compared to $5.704 million in 2024[138] - Noninterest income decreased by $246,000 to $1.6 million for the nine months ended September 30, 2025, compared to $1.9 million in 2024[150] - Total non-interest expenses for the nine months ended September 30, 2025, were $16.254 million, a decrease of $1.739 million, or 9.7%, from $17.993 million in 2024[152] Credit Losses - The provision for credit losses is established to absorb known and inherent losses in the loan portfolio, influenced by various qualitative and quantitative factors[131] - Provision for credit losses recorded was $12,000 for the three months ended September 30, 2025, compared to no provision for the same period in 2024[134] - Provision for credit losses for the nine months ended September 30, 2025, was $79,000, down from $213,000 in 2024[149] Income and Tax - Net income for the three months ended September 30, 2025, was $2.2 million, an increase from $1.7 million for the same period in 2024, driven by higher net interest income and lower noninterest expenses[122] - Net income for the nine months ended September 30, 2025, was $6.2 million, an increase from $4.1 million in the same period in 2024[140] - Income tax expense for the nine months ended September 30, 2025, was $2.0 million, compared to $1.2 million in 2024, with an effective tax rate of 24.0% for both periods[153] Capital and Liquidity - Total capital to risk-weighted assets ratio was 13.21% as of September 30, 2025, exceeding the well-capitalized requirement of 10.00%[170] - The company’s common equity tier 1 capital ratio was 12.08% as of September 30, 2025, above the minimum requirement of 4.50%[170] - The company is categorized as "well capitalized" and has exceeded all regulatory capital requirements as of September 30, 2025[169] - Cash and short-term investments are the most liquid assets, influenced by operating, financing, lending, and investing activities[166] Cash Flow - Net cash provided by operating activities increased to $9.4 million for the nine months ended September 30, 2025, compared to $5.9 million for the same period in 2024, reflecting a 59.32% increase[167] - Net cash provided by financing activities was $48.2 million for the nine months ended September 30, 2025, compared to $28.1 million for the same period in 2024, indicating a 71.34% increase[167] - The company’s net cash used in investing activities decreased to $14.2 million for the nine months ended September 30, 2025, from $31.8 million in the same period of 2024, a reduction of 55.32%[167] Loan Commitments - The company had outstanding commitments to originate loans totaling $80.7 million as of September 30, 2025[171] - The company anticipates retaining a significant portion of maturing time deposits totaling $132.0 million due within one year from September 30, 2025[171] - As of September 30, 2025, the company had a line of credit with the Federal Home Loan Bank of Atlanta totaling $233.2 million, with $54.0 million in advances outstanding[165]

Financial Performance - Net income for the three months ended September 30, 2025, was $2.2 million, an increase of 29.4% compared to $1.7 million for the same period in 2024[2] - Operating income for the three months ended September 30, 2025, was $2.4 million, up from $1.9 million in the same period of 2024, reflecting a 26.3% increase[6] - The company reported a net income of $6,201,000 for the nine months ended September 30, 2025, compared to $4,096,000 for the same period in 2024, representing a significant increase of 51.31%[20] - Basic earnings per share for the nine months ended September 30, 2025, were $0.98, up from $0.64 in the same period of 2024, reflecting a growth of 53.13%[20] - Operating net income for the year ended September 30, 2025, reached $6,702 million, compared to $5,020 million for the previous year, reflecting a 33.5% increase[22] Asset and Deposit Growth - Total assets increased by $58.4 million to $925.2 million at September 30, 2025, compared to $866.8 million at December 31, 2024[10] - Deposits increased by $65.9 million to $739.4 million at September 30, 2025, compared to $673.5 million at December 31, 2024[10] - Total assets as of September 30, 2025, reached $925,221,000, an increase from $866,817,000 as of December 31, 2024, indicating a growth of 6.73%[18] - Total deposits increased to $739,376,000 as of September 30, 2025, from $673,481,000 as of December 31, 2024, marking a growth of 9.79%[18] Loan and Interest Income - Net interest income for the three months ended September 30, 2025, was $7.8 million, an increase from $7.4 million in the same period of 2024[10] - Total gross loans increased by $15.4 million to $729.5 million at September 30, 2025, from $714.1 million at December 31, 2024[10] - For the nine months ended September 30, 2025, total interest income increased to $37,848,000, up from $35,746,000 in the same period of 2024, representing a growth of 5.87%[20] - Net interest income before provision for credit losses for the nine months ended September 30, 2025, was $22,885,000, compared to $21,732,000 for the same period in 2024, reflecting an increase of 5.30%[20] Non-Interest Expense and Margins - Non-interest expense decreased by $275,000 to $5.4 million for the three months ended September 30, 2025, compared to the same period in 2024[10] - The net interest margin for the three months ended September 30, 2025, decreased to 3.49% from 3.52% in the same period of 2024[10] - The net interest margin for the nine months ended September 30, 2025, was 3.53%, slightly down from 3.54% in the same period of 2024[20] - The company’s net interest rate spread improved to 2.68% for the nine months ended September 30, 2025, compared to 2.59% for the same period in 2024[20] Credit Quality - Non-performing loans increased to $5.1 million at September 30, 2025, from $4.8 million at December 31, 2024[9] - The allowance for credit losses as a percentage of non-performing loans was 168.4% at September 30, 2025, down from 177.9% at December 31, 2024[13] Equity and Shareholder Information - The total stockholders' equity as of September 30, 2025, was $125,405,000, a decrease from $129,115,000 as of December 31, 2024, indicating a decline of 2.20%[18] - Tangible book value per common share as of September 30, 2025, was $17.34, compared to $17.18 a year earlier, indicating a 0.93% increase[22] - Equity to assets (GAAP) ratio for the three months ended September 30, 2025, was 13.55%, slightly down from 14.90% in the same quarter last year[22] - Tangible equity to tangible assets ratio for the three months ended September 30, 2025, was 11.83%, down from 13.08% a year ago[22] - Weighted average diluted shares outstanding decreased to 6,427,697 for the three months ended September 30, 2025, from 6,620,602 in the same period last year[22] Expenses and Taxation - Merger-related expenses for the year ended September 30, 2025, totaled $1,185 million, compared to $196 million in the previous year[22] - Income tax expense for the three months ended September 30, 2025, was $(48) million, compared to $(111) million in the same quarter last year[22] - ESOP compensation expense related to dividend for the year ended September 30, 2025, was $641 million, with no expenses recorded in the previous year[22] Adjusted Earnings - Adjusted diluted earnings per share for the three months ended September 30, 2025, was $0.37, up from $0.26 in the same quarter last year, marking a 42.3% increase[22]

Core Viewpoint - Affinity Bancshares, Inc. reported a net income of $2.2 million for Q3 2025, an increase from $1.7 million in Q3 2024, driven by higher net interest income and reduced noninterest expenses [1][6]. Financial Performance - Net income for the three months ended September 30, 2025, was $2,217,000, compared to $1,730,000 for the same period in 2024, reflecting a year-over-year increase of approximately 28% [2][15]. - Diluted earnings per share for Q3 2025 were $0.34, up from $0.26 in Q3 2024 [2][15]. - Operating income for Q3 2025 was $2,389,000, compared to $1,883,000 in Q3 2024 [6][15]. - For the nine months ended September 30, 2025, net income was $6.2 million, up from $4.1 million in the same period of 2024 [6][15]. Income and Expenses - Net interest income for Q3 2025 was $7.8 million, an increase from $7.4 million in Q3 2024 [6][15]. - Noninterest income for Q3 2025 increased to $588,000 from $566,000 in Q3 2024 [6][15]. - Noninterest expenses decreased to $5.4 million in Q3 2025 from $5.7 million in Q3 2024, primarily due to lower other expenses [6][15]. Asset Quality and Financial Condition - Total assets increased to $925.2 million as of September 30, 2025, from $866.8 million at December 31, 2024, driven by loan growth and increased interest-earning deposits [6][11]. - Total gross loans rose to $729.5 million at September 30, 2025, up from $714.1 million at December 31, 2024 [6][11]. - Non-performing loans increased to $5.1 million at September 30, 2025, from $4.8 million at December 31, 2024 [11][12]. Capital and Equity - Total stockholders' equity decreased to $125.4 million at September 30, 2025, from $129.1 million at December 31, 2024, due to dividend payments and stock repurchases [11][14]. - The allowance for credit losses as a percentage of non-performing loans was 168.4% at September 30, 2025, down from 177.9% at December 31, 2024 [11][12]. Key Ratios - Return on average assets for Q3 2025 was 0.94%, consistent with Q2 2025 [2][6]. - Return on average equity for Q3 2025 was 7.03%, slightly up from 5.68% in Q3 2024 [2][6]. - The efficiency ratio improved to 64.96% in Q3 2025 from 68.55% in Q3 2024, indicating better cost management [2][6].

Core Insights - Affinity Bancshares (NASDAQ: AFBI) is the holding company of Affinity Bank, primarily operating in Georgia, and recently had a sale canceled [1] Company Overview - Affinity Bancshares focuses on providing banking services in Georgia, indicating a regional concentration in its operations [1] Investment Focus - The investment group European Small Cap Ideas emphasizes high-quality small-cap investment opportunities, aiming for capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1]