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

1. Net income decreased to $5.4 million in 2024 from $6.4 million in 2023. 2. Operating income increased slightly year-over-year, from $6.4 million to $6.8 million. 3. Net interest margin improved to 3.54%, benefiting from higher yielding loans. 4. Total assets grew to approximately $866.8 million, fueled by loan growth. 5. Noninterest income fell due to a loss on investment securities.

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AFBI's net income decline may raise concerns, but operating income growth offsets it.

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Current performance may affect market perception but not long-term valuation.

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AFBI
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.

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