Affinity Bancshares, Inc. (NASDAQ:“AFBI”) (the
“Company”), the holding company for Affinity Bank (the “Bank”),
today announced net income of $1.9 million for the three months
ended September 30, 2022, as compared to $1.8 million for the three
months ended September 30, 2021. For the nine months ended
September 30, 2022, net income was $5.4 million, as compared to
$6.3 million for the nine months ended September 30, 2021.
At or for the three months
ended,
Performance Ratios:
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
Net income (in thousands)
$
1,861
$
1,783
$
1,791
$
1,318
$
1,805
Diluted earnings per share
0.27
0.27
0.26
0.20
0.26
Common book value per share
17.37
17.51
17.58
17.60
17.42
Tangible book value per share (1)
14.57
14.68
14.75
14.87
14.69
Total assets (in thousands)
776,390
766,679
760,208
788,088
789,965
Return on average assets
0.95
%
0.95
%
0.97
%
0.66
%
0.91
%
Return on average equity
6.30
%
6.13
%
5.97
%
4.36
%
6.00
%
Equity to assets
14.84
%
15.05
%
15.31
%
15.35
%
15.15
%
Tangible equity to tangible assets (1)
12.75
%
12.93
%
13.17
%
13.29
%
13.08
%
Net interest margin
4.12
%
4.06
%
4.47
%
3.60
%
3.74
%
Efficiency ratio
67.62
%
67.23
%
69.00
%
74.29
%
65.87
%
(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 $1.9 million for the three months ended
September 30, 2022, as compared to $1.8 million for the three
months ended September 30, 2021, as a result of a decrease in
Payroll Protection Program (PPP) loan-related interest and fee
income, partially offset by a decrease in interest expense.
- Net income was $5.4 million for the nine months ended September
30, 2022, as compared to $6.3 million for the nine months ended
September 30, 2021, as a result of lower interest and fee income on
PPP loans, partially offset by a decrease in interest expense
primarily related to the recognition of remaining discounts upon
the payoff of acquired Federal Home Loan Bank advances.
Results of Operations
- Net interest income was $7.5 million for the three months ended
September 30, 2022 compared to $6.9 million for the three months
ended September 30, 2021 due to an increase in loan interest,
partially offset by a decrease in PPP loan-related interest and fee
income. Net interest income was $22.4 million for the nine months
ended September 30, 2022 compared to $22.6 million for the nine
months ended September 30, 2021. The decrease for the nine months
ended September 30, 2022 compared to the same period in 2021 was a
result of a decrease in PPP loan-related interest and fee income,
partially offset by a decrease in interest expense primarily
related to the recognition of remaining discounts upon the payoff
of acquired Federal Home Loan Bank advances.
- The Company’s net interest margin increased to 4.12% from 3.78%
for the three months ended September 30, 2022 and 2021. Net
interest margin for the nine months ended September 30, 2022
increased slightly to 4.24% from 4.17% for the nine months ended
September 30, 2021.
- Noninterest income was $593 thousand for the three months ended
September 30, 2022 and $771 thousand for the three months ended
September 30, 2021. For the nine months ended September 30, 2022,
noninterest income was $1.8 million compared to $2.1 million for
the nine months ended September 30, 2021. The decreases were a
result of the Company recognizing gains on sale of other real
estate and death benefits received from bank owned life insurance
in previous periods.
- Non-interest expense was $5.5 million and $5.0 million for the
three months ended September 30, 2022 and 2021. Non-interest
expense was $16.5 million and $15.6 million for the nine months
ended September 30, 2022 and 2021. The increases were due in part
to the increases in salaries and employee benefits as a result of
the Company’s strategic initiative to attract and retain
talent.
Financial Condition
- Total assets decreased $11.7 million to $776.4 million at
September 30, 2022 from $788.1 million at December 31, 2021.
- Total net loans increased $65.3 million to $641.1 million at
September 30, 2022 from $575.8 million at December 31, 2021 due
primarily to strategic lending staff hires made to diversify our
loan portfolio.
- Deposits increased by $31.2 million to $646.0 million at
September 30, 2022 compared to $614.8 million at December 31,
2021.
- Borrowings decreased by $39.0 million to $10.0 million at
September 30, 2022 compared to $49.0 million at December 31, 2021
as we repaid Federal Home Loan Bank borrowings.
Asset Quality
- Non-performing loans remained unchanged at $7.0 million at
September 30, 2022 and December 31, 2021.
- The allowance for loan losses as a percentage of non-performing
loans was 132.8% at September 30, 2022, as compared to 122.1% at
December 31, 2021.
- Allowance for loan losses was 1.43% of total loans at September
30, 2022, as compared to 1.46% of total loans at December 31,
2021.
- Net loan recoveries were $108,000 for the nine months ended
September 30, 2022, as compared to $295,000 for the nine months
ended September 30, 2021.
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 technology; failures or breaches
of our IT security systems; our ability to introduce new products
and services and capitalize on growth opportunities; our ability to
successfully integrate acquired operations or assets; changes in
accounting policies and practices; our ability to retain key
employees; the impact of the COVID-19 pandemic; 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 Three Months Ended
September 30,
2022
2021
Average Outstanding
Balance
Interest
Average Yield/Rate
Average Outstanding
Balance
Interest
Average Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans
$
639,115
$
7,734
4.80
%
$
568,442
$
7,332
5.12
%
Securities
44,690
289
2.56
%
40,569
216
2.13
%
Interest-earning deposits
39,384
189
1.91
%
115,330
53
0.18
%
Other investments
1,163
12
4.19
%
2,476
21
3.37
%
Total interest-earning assets
724,352
8,224
4.50
%
726,817
7,622
4.19
%
Non-interest-earning assets
49,770
64,408
Total assets
$
774,122
$
791,225
Interest-bearing liabilities:
Interest-bearing checking accounts
$
98,473
$
47
0.19
%
$
83,519
$
43
0.21
%
Market rate checking accounts
159,478
100
0.25
%
136,984
117
0.34
%
Savings accounts
83,484
187
0.89
%
93,717
100
0.43
%
Certificates of deposit
89,871
291
1.28
%
105,285
369
1.40
%
Total interest-bearing deposits
431,306
625
0.57
%
419,505
629
0.60
%
FHLB advances
13,696
73
2.12
%
49,039
132
1.07
%
Total interest-bearing liabilities
445,002
698
0.62
%
468,544
761
0.65
%
Non-interest-bearing liabilities
211,986
203,336
Total liabilities
656,988
671,880
Total stockholders' equity
117,134
119,345
Total liabilities and stockholders'
equity
$
774,122
$
791,225
Net interest rate spread
3.88
%
3.54
%
Net interest income
$
7,526
$
6,861
Net interest-earning assets
$
279,350
$
258,273
Net interest margin
4.12
%
3.78
%
For the Nine Months Ended
September 30,
2022
2021
Average Outstanding
Balance
Interest
Average Yield/Rate
Average Outstanding
Balance
Interest
Average Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans
$
616,141
$
22,013
4.78
%
$
596,024
$
24,424
5.48
%
Securities
46,585
827
2.37
%
31,374
472
2.01
%
Interest-earning deposits
43,125
286
0.89
%
92,880
134
0.19
%
Other investments
1,117
30
3.57
%
2,273
57
3.32
%
Total interest-earning assets
706,968
23,156
4.38
%
722,551
25,087
4.63
%
Non-interest-earning assets
51,687
63,028
Total assets
$
758,655
$
785,579
Interest-bearing liabilities:
Interest-bearing checking accounts
$
97,463
$
134
0.18
%
$
88,154
$
138
0.21
%
Market rate checking accounts
151,654
282
0.25
%
130,933
378
0.39
%
Savings accounts
84,042
356
0.57
%
93,823
310
0.44
%
Certificates of deposit
91,493
840
1.23
%
114,623
1,284
1.49
%
Total interest-bearing deposits
424,652
1,612
0.51
%
427,533
2,110
0.66
%
FHLB advances
12,304
(875
)
(9.50
)%
41,471
350
1.13
%
Other borrowings
46
1
3.43
%
1,927
15
1.01
%
Total interest-bearing liabilities
437,002
738
0.23
%
470,931
2,475
0.69
%
Non-interest-bearing liabilities
203,164
199,971
Total liabilities
640,166
670,902
Total stockholders' equity
118,489
114,677
Total liabilities and stockholders'
equity
$
758,655
$
785,579
Net interest rate spread
4.15
%
3.94
%
Net interest income
$
22,418
$
22,612
Net interest margin
4.24
%
4.17
%
AFFINITY BANCSHARES,
INC.
Consolidated Balance
Sheets
September 30, 2022
December 31, 2021
(unaudited)
(In thousands)
Assets
Cash and due from bank
$
6,887
$
16,239
Interest-earning deposits in other
depository institutions
33,619
95,537
Cash and cash equivalents
40,506
111,776
Investment securities
available-for-sale
41,878
48,557
Other investments
1,025
2,476
Loans, net
641,062
575,825
Other real estate owned
3,538
3,538
Premises and equipment, net
4,069
3,783
Bank owned life insurance
15,637
15,377
Intangible assets
18,606
18,749
Other assets
10,069
8,007
Total assets
$
776,390
$
788,088
Liabilities and Stockholders' Equity
Liabilities:
Non-interest-bearing checking
$
204,781
$
193,940
Interest-bearing checking
93,235
91,387
Market rate checking
160,377
145,969
Savings accounts
88,840
86,745
Certificates of deposit
98,784
96,758
Total deposits
646,017
614,799
Federal Home Loan Bank advances
10,000
48,988
Accrued interest payable and other
liabilities
5,152
3,333
Total liabilities
661,169
667,120
Stockholders' equity:
Preferred stock (10,000,000 shares
authorized, no shares outstanding at September 30, 2022 and
December 31, 2021)
—
—
Common stock (par value $0.01 per share,
40,000,000 shares authorized; 6,634,885 issued and outstanding at
September 30, 2022 and 6,872,634 issued and outstanding at December
31, 2021)
65
69
Additional paid in capital
63,289
68,038
Unearned ESOP shares
(4,847
)
(5,004
)
Retained earnings
63,658
58,223
Accumulated other comprehensive loss
(6,944
)
(358
)
Total stockholders' equity
115,221
120,968
Total liabilities and stockholders'
equity
$
776,390
$
788,088
AFFINITY BANCSHARES,
INC.
Consolidated Statements of
Income
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
(In thousands)
Interest income:
Loans, including fees
$
7,734
$
7,332
$
22,013
$
24,424
Investment securities
301
237
857
529
Interest-earning deposits
189
53
286
134
Total interest income
8,224
7,622
23,156
25,087
Interest expense:
Deposits
625
629
1,612
2,110
Borrowings
73
132
(874
)
365
Total interest expense
698
761
738
2,475
Net interest income before provision for
loan losses
7,526
6,861
22,418
22,612
Provision for loan losses
187
225
654
975
Net interest income after provision for
loan losses
7,339
6,636
21,764
21,637
Noninterest income:
Service charges on deposit accounts
420
416
1,205
1,126
Other
173
355
631
980
Total noninterest income
593
771
1,836
2,106
Noninterest expenses:
Salaries and employee benefits
3,187
2,777
9,219
7,797
Occupancy
675
633
1,798
2,329
Advertising
128
116
326
296
Data processing
486
520
1,476
1,518
Writedown of premises and equipment
—
14
—
888
FHLB prepayment penalties
—
—
647
—
Other
1,014
967
3,019
2,764
Total noninterest expenses
5,490
5,027
16,485
15,592
Income before income taxes
2,442
2,380
7,115
8,151
Income tax expense
581
575
1,680
1,896
Net income
$
1,861
$
1,805
$
5,435
$
6,255
Weighted average common shares
outstanding
Basic
Diluted
Basic earnings per share
$
0.28
$
0.26
$
0.81
$
0.90
Diluted earnings per share
$
0.27
$
0.26
$
0.80
$
0.89
Explanation of Certain Unaudited
Non-GAAP Financial Measures
Reported amounts are presented in accordance with GAAP.
Additionally, the Company believes this 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 table
below for details on the earnings impact of these items.
Non-GAAP Reconciliation
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
September 30,
2021
Tangible book value per common share
reconciliation
Book Value per common share (GAAP)
$
17.37
$
17.51
$
17.58
$
17.60
$
17.42
Effect of goodwill and other
intangibles
(2.80
)
(2.83
)
(2.83
)
(2.73
)
(2.73
)
Tangible book value per common share
$
14.57
$
14.68
$
14.75
$
14.87
$
14.69
Tangible equity to tangible assets
reconciliation
Equity to assets (GAAP)
14.84
%
15.05
%
15.31
%
15.35
%
15.15
%
Effect of goodwill and other
intangibles
(2.09
)%
(2.12
)%
(2.14
)%
(2.06
)%
(2.07
)%
Tangible equity to tangible assets
12.75
%
12.93
%
13.17
%
13.29
%
13.08
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221026005921/en/
Edward J. Cooney Chief Executive Officer (678)742-9990
Affinity Bancshares (NASDAQ:AFBI)
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