Affinity Bancshares Stock Gains Post Q4 Earnings, NIM Expands

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].