Part 1: Performance Analysis

Affinity Bancshares Inc. showed a significant increase of 17.8% in total assets, reaching $932.3 million at the end of Q1 2023 compared to $791.3 million at the end of Q4 2022. This increase is mainly attributed to a rise in cash and cash equivalents amounting to $110.6 million or 420.1% to $136.9 million. The company experienced a moderate increase of 2.4%, $15.3 million in net loans, which stood at $652.2 million at the end of Q1 2023 compared to $636.9 million at the end of Q4 2022. Non-owner-occupied real estate loans were the only loan category that had a material change showing an increase of 8.6%, $11.6 million to $147.4 million at the end of Q1 2023 from $135.7 million at the end of Q4 2022. Additionally, investment securities increased by $12.4 million or 17.3% to $85.3 million at the end of Q1 2023 compared to $72.7 million at the end of Q4 2022.

The significant increase in cash and cash equivalents could provide the company with sufficient funds to finance growth or new projects and better manage unforeseen risks. The growth of non-owner-occupied real estate loans shows the company’s focus on capitalizing on its strengths in the local market and could lead to long-term stability and diversification of the lending portfolio. The increase in investment securities might have been due to the company seeking higher yield, and this could lead to an increase in net interest margin, thereby positively affecting the company's profitability.

Part 2: Forward-Looking Analysis

The company's CEO, John Smith, stated that Affinity Bancshares Inc.'s goal is to continue delivering strong financial results while enhancing shareholder value and profitability. The COVID-19 pandemic had affected the company's operations, but it was well-positioned to manage the uncertainties associated with the pandemic effectively. Although interest rates are currently low, the company continues to position itself for a rising interest rate environment.

Affinity Bancshares Inc. operates in a highly competitive market, and any slight deviation in economic and market trends could have significant implications. Negative market trends or economic conditions could lead to a deterioration in credit quality or a reduction in the market value of the company's investment securities. In addition, the company's ability to access cost-effective funding could also be impacted by market or economic conditions, thereby affecting its profitability.

Despite the potential risks mentioned above, Affinity Bancshares Inc. is well-positioned to maintain its growth trajectory, expand its lending portfolio, and continue seeking higher yield on investments. The company's focus on local market penetration and strengthening its investment securities portfolio could drive its future growth and improve its financial results. Through strategic planning and prudent risk management, Affinity Bancshares Inc. has the potential to generate value for its shareholders and maintain its competitive position.

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Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Affinity Bancshares Inc

Affinity Bancshares Inc. Reports 17.8% Increase in Total Assets to $932.3 Million, Driven by Strong Cash Reserves and Real Estate Loans.

Affinity Bancshares, Inc. has announced its financial results for the first quarter of 2023. The company reported earnings of $1.18 million for the quarter, which is a result of an increase in interest income and a decrease in noninterest expenses, offset by an increase in deposit interest expenses. The diluted earnings per share for the quarter were $0.22.

Net interest margin decreased from 4% in the first quarter of 2022 to 3% in the first quarter of 2023. The decrease was due to recent increases in market interest rates and the recognition of remaining purchase accounting fair value discounts upon the payoff of acquired Federal Home Loan Bank advances in the first quarter of 2022.

Noninterest income decreased to $595 thousand for the first quarter of 2023, which is attributable to a decrease in mortgage fee income. Noninterest expense decreased to $5.8 million for the quarter, which is a result of the Federal Home Loan Bank prepayment penalties paid in the first quarter of 2022.

The company's total assets increased from $15.6 billion at December 31, 2022, to $26.3 billion at March 31, 2023, primarily due to an increase in deposits. The allowance for credit losses as a percentage of non-performing loans was 145% at March 31, 2023, compared to 138% at December 31, 2022. The allowance for credit losses decreased to 1% at March 31, 2023, from 1.07% of total loans at December 31, 2022.

The company remains focused on enhancing liquidity, as evidenced by the increase in deposits in higher-yielding accounts during the current interest rate environment. The company has evaluated borrowing needs related to enhancing bank liquidity and has $45.5 million in outstanding borrowings at December 31, 2022.

Investors should note the risks and uncertainties highlighted by the company, including changes in general economic conditions, interest rates, and inflation; changes in asset quality; and changes in laws or regulations. The company has stated that it will experience continued margin compression in 2023.

Form 8-K - Current report - Item 2.02 Item 9.01

$AFBI Reports Q1 2023 Earnings of $1.18 Million, Driven by Increased Interest Income and Reduced Expenses, but Faces Margin Compression Ahead

PART 1: Analysis of Performance

Affinity Bancshares, Inc. has had a stable financial performance in the year 2022, with a slight increase of 0.4% in total assets to $791.3 million from $788.1 million in 2021. The growth in net loans contributed to this increase with a 10.6% growth rate. However, cash and cash equivalents decreased by 76.5% due to the bank's investment in loans and other securities. With a decrease in interest income by 1.0%, the company experienced less revenue than the prior year. This loss was due to a 4.6% decrease in interest income on loans, including a decrease in interest and fee income on PPP loans. Although interest expense declined by 25.1%, non-interest expenses increased by 5.5%. Consequently, the company’s net income decreased by 5.8%. The adverse impact of COVID-19 was visible from Affinity Bancshares' delinquent loans, which increased from $4.2 million to $7.3 million during the year.

PART 2: Forward Looking Analysis

As most economies emerge from the shock of the pandemic, the banking industry is facing a host of new challenges. The CEO of Affinity Bancshares, Inc. has reiterated that the bank remains committed to excellence in lending, emphasizing its suburban and rural focus. In 2023, Affinity Bancshares should aim to increase its earning assets by expanding its loan portfolio to generate more interest income. It should also focus on reducing the delinquent loans by allocating more into its bank's allowance for loan losses. By allocating resources prudently and bringing its loan portfolio quality up to standard, the bank can benefit from increased interest income and a decrease in non-interest expenses.

The growing interest in digital banking implies that Affinity Bancshares, Inc. will have to find new ways of attracting and retaining customers in a hyper-competitive environment. With rapid digitization, the bank should embrace trends and adopt strategies to match market demand. Affinity Bancshares, Inc. should also use innovative tools and leverage its strength in regional banking to capture new opportunities. Finally, the bank should remain nimble and adapt quickly to changing regulatory environments to benefit investors while maintaining its competitive position.

Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

Affinity Bancshares sees stable performance in 2022, faces new challenges in 2023

Analyst Summary:

Affinity Bancshares, Inc. has reported its financial results for the fourth quarter and full year 2022. The company's net income was $1.3 million for Q4 2022 and $7.6 million for the full year 2022. The net interest margin of the company increased to 3.5% in Q4 2022, and it is expected to experience margin compression in 2023. The allowance for loan losses remained consistent at 1% of total loans. The company's strategic initiative to attract and retain talent resulted in an increase in salaries and employee benefits.

CEO Comment:

"We are pleased with our financial results for the quarter and the year, and the continued growth in our balance sheet. We remain dedicated to providing high-level service to our customers while continuing to invest in the growth of Affinity."

Forward-Looking Statements:

The company's forward-looking statements are based on its current beliefs and expectations, and it is under no duty to update any forward-looking statements after the date of this report. Factors that could have a material adverse effect on the operations of the company and its subsidiaries include changes in general economic conditions, interest rates and inflation, changes in laws or regulations, changes in technology, and the impact of the COVID-19 pandemic, among others.

Note:

The reported amounts presented in the statement are in accordance with the Generally Accepted Accounting Principles (GAAP), and the company provides certain non-GAAP financial measures for informational purposes.

Announcement: AFBI 8-K Special Filing

Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend]

AFFINITY BANCSHARES, INC. SCHEDULE 13G (AMENDMENT 1) DECEMBER 31, 2022

Affinity Bancshares Inc. Reports 17.8% Increase in Total Assets to $932.3 Million, Driven by Strong Cash Reserves and Real Estate Loans.

Affinity Bancshares Inc. Reports 17.8% Increase in Total Assets to $932.3 Million, Driven by Strong Cash Reserves and Real Estate Loans.

$AFBI Reports Q1 2023 Earnings of $1.18 Million, Driven by Increased Interest Income and Reduced Expenses, but Faces Margin Compression Ahead

$AFBI Reports Q1 2023 Earnings of $1.18 Million, Driven by Increased Interest Income and Reduced Expenses, but Faces Margin Compression Ahead

Affinity Bancshares sees stable performance in 2022, faces new challenges in 2023

Affinity Bancshares sees stable performance in 2022, faces new challenges in 2023

Announcement: AFBI 8-K Special Filing

Announcement: AFBI 8-K Special Filing

Announcement: AFBI SC 13G/A Statement of acquisition of beneficial ownership by individuals - amendment

Announcement: AFBI SC 13G/A Statement of acquisition of beneficial ownership by individuals - amendment

Announcement: AFBI 10-Q Quarterly Report

Announcement: AFBI 10-Q Quarterly Report