Affinity Bancshares(AFBI) - 2024 Q4 - Annual Report

Financial Performance - Net income decreased by $1.0 million, or 15.6%, to $5.4 million for the year ended December 31, 2024, compared to $6.4 million for the year ended December 31, 2023, attributed to higher deposit costs and noninterest expenses [190]. - Net income decreased by $1.0 million, or 15.6%, to $5.4 million for the year ended December 31, 2024, compared to $6.4 million for 2023 [210]. - Noninterest income decreased by $451,000, or 18.3%, to $2.0 million for the year ended December 31, 2024, from $2.5 million for 2023 [221]. - Income tax expense decreased to $1.5 million for the year ended December 31, 2024, compared to $1.9 million for the year ended December 31, 2023, due to decreased income before income taxes [224]. Asset and Liability Management - Total assets increased by $23.6 million, or 2.8%, to $866.8 million at December 31, 2024, from $843.3 million at December 31, 2023, primarily due to an increase in net loans of $54.7 million, or 8.4% [189]. - Total deposits decreased by $962,000, or 0.1%, to $673.5 million at December 31, 2024, with increases in certificates of deposit and money market accounts offset by decreases in non-interest-bearing checking accounts [202]. - Cash and cash equivalents decreased by $8.6 million, or 17.2%, to $41.4 million at December 31, 2024, due to loan funding at year end [199]. - Securities held-to-maturity decreased to $27.3 million at December 31, 2024, from $34.2 million at December 31, 2023, as securities were called throughout the year [201]. - The loan-to-deposit ratio at December 31, 2024, was 106.0%, compared to 97.8% at December 31, 2023, indicating a higher reliance on loans relative to deposits [202]. Income and Expense Analysis - Interest income increased by $5.3 million, or 12.3%, to $48.0 million for the year ended December 31, 2024, driven by a $5.9 million increase in interest income on loans [190]. - Interest income increased by $5.3 million, or 12.3%, to $48.0 million for the year ended December 31, 2024, from $42.7 million for 2023 [211]. - Interest expense increased by $3.3 million, or 21.3%, to $18.8 million for the year ended December 31, 2024, reflecting increases across all interest expense categories [190]. - Interest expense increased by $3.3 million, or 21.3%, to $18.8 million for the year ended December 31, 2024, compared to $15.5 million for 2023 [214]. - Net interest income before provision for credit losses increased by $2.0 million, or 7.2%, to $29.2 million for the year ended December 31, 2024, from $27.2 million for 2023 [217]. - Net interest margin improved to 3.54% for the year ended December 31, 2024, compared to 3.35% for 2023 [217]. - Non-interest expenses increased by $2.4 million, or 11.5%, to $23.8 million for the year ended December 31, 2024, from $21.3 million for the year ended December 31, 2023 [223]. Credit and Provisions - Provisions for credit losses recorded were $438,000 for the year ended December 31, 2024, compared to a recovery of $42,000 for 2023 [219]. - Allowance for credit losses to total loans was 1.19% at December 31, 2024, compared to 1.35% at December 31, 2023 [219]. Capital and Liquidity - Stockholders' equity increased by $7.6 million, or 6.3%, to $129.1 million at December 31, 2024, from $121.5 million at December 31, 2023 [204]. - The liquidity ratio was maintained at 12.0% or greater, with compliance confirmed at December 31, 2024 [233]. - The company is categorized as well capitalized and exceeded all regulatory capital requirements as of December 31, 2024 [238]. Future Projections and Commitments - Net interest income is projected to decrease by 6.87% to $29.6 million with a 400 basis point increase in interest rates [230]. - As of December 31, 2024, the company had outstanding commitments to originate loans of $91.2 million [239]. Other Information - The company had a $40.0 million line of credit with the Federal Home Loan Bank of Atlanta, with $54.0 million in borrowings as of December 31, 2024 [233]. - The company does not engage in hedging activities, such as futures or options [227]. - A special cash dividend of $1.50 per share was declared on February 27, 2025, to be paid on March 27, 2025 [243].