Affinity Bancshares (AFBI) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $1.7 million, up from $1.6 million in Q3 2023, driven by higher net interest income partially offset by increased noninterest expenses; nine-month net income was $4.1 million, down from $4.9 million year-over-year.

• Total assets grew to $878.6 million at September 30, 2024, from $843.3 million at December 31, 2023, driven by loan growth.

• A proposed transaction with Atlanta Postal Credit Union will result in the sale of substantially all assets and liabilities, followed by dissolution and liquidation.

• Noninterest expense increased due to professional fees related to the proposed merger and higher salaries and benefits.

Financial highlights

• Gross loans increased 5.7% to $697.6 million; construction loans rose 33.6% and non-owner-occupied CRE loans rose 9.1%.

• Total deposits rose 1.4% to $683.8 million, with a shift from certificates of deposit to demand deposits.

• Net interest income for Q3 2024 was $7.4 million, up 7.4% year-over-year; nine-month net interest income was $21.7 million, up 6.1%.

• Net interest margin improved to 3.52% in Q3 2024 from 3.36% in Q3 2023; nine-month margin was 3.54%.

• Allowance for credit losses was $8.4 million (1.20% of loans) at September 30, 2024, down from 1.35% at year-end.

Outlook and guidance

• Interest rate risk modeling shows a 200 basis point increase in rates would have minimal impact (+0.15%) on net interest income; a 200 basis point decrease would reduce net interest income by 4.2%.

• Management expects sufficient liquidity and capital to meet obligations and regulatory requirements.

• Management highlights ongoing evaluation of borrowing needs to enhance liquidity and notes continued loan demand, especially in construction and commercial non-owner occupied properties.

• Forward-looking statements caution about risks from economic conditions, interest rates, asset quality, and regulatory changes.