U.S. Markets closed
  • S&P 500

    4,274.04
    -31.16 (-0.72%)
     
  • Dow 30

    33,980.32
    -171.69 (-0.50%)
     
  • Nasdaq

    12,938.12
    -164.43 (-1.25%)
     
  • Russell 2000

    1,987.31
    -33.22 (-1.64%)
     
  • Crude Oil

    87.53
    -0.58 (-0.66%)
     
  • Gold

    1,778.00
    +1.30 (+0.07%)
     
  • Silver

    19.74
    +0.01 (+0.05%)
     
  • EUR/USD

    1.0181
    +0.0010 (+0.1018%)
     
  • 10-Yr Bond

    2.8930
    +0.0690 (+2.44%)
     
  • Vix

    19.90
    +0.21 (+1.07%)
     
  • GBP/USD

    1.2050
    -0.0044 (-0.3639%)
     
  • USD/JPY

    135.0710
    +0.8560 (+0.6378%)
     
  • BTC-USD

    23,372.72
    -524.03 (-2.19%)
     
  • CMC Crypto 200

    557.23
    -15.58 (-2.72%)
     
  • FTSE 100

    7,515.75
    -20.31 (-0.27%)
     
  • Nikkei 225

    29,222.77
    +353.86 (+1.23%)
     

Affinity Bancshares, Inc. Announces 2021 Year End Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·13 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

COVINGTON, Ga., February 22, 2022--(BUSINESS WIRE)--Affinity Bancshares, Inc. (NASDAQ:"AFBI") (the "Company"), the holding company for Affinity Bank (the "Bank"), today announced net income of $7.6 million for the year ended December 31, 2021 as compared to $3.1 million for the year ended December 31, 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220222006171/en/

AFBI Selected Data (Graphic: Business Wire)

For the three months ended,

For the year ended,

Performance
Ratios:

December
31, 2021

September
30, 2021

June
30, 2021

March
31, 2021

December
31, 2021

December
31, 2020

Return on average assets

0.66

%

0.91

%

1.18

%

1.11

%

0.96

%

0.42

%

Return on average equity

4.36

%

6.00

%

7.95

%

8.03

%

6.52

%

3.97

%

Net interest margin

3.64

%

3.78

%

4.10

%

4.65

%

4.04

%

3.77

%

Efficiency ratio

74.29

%

65.87

%

58.30

%

64.96

%

65.62

%

78.46

%

Results of Operations

Net income was $7.6 million for the year ended December 31, 2021 as compared to $3.1 million for the year ended December 31, 2020, as we have increased our interest income while reducing interest and non-interest expense. Our net income in 2020 was reduced as a result of merger related expenses. Merger related expenses for the year ended December 31, 2020, were $2.8 million.

Net Interest Income and Margin

Net interest income increased $4.1 million, and was $29.3 million for the year ended December 31, 2021, compared to $25.1 million for the year ended December 31, 2020. Average interest-earning assets increased by $57.8 million for the year ended December 31, 2021. Net interest margin for the year ended December 31, 2021, increased to 4.04%, from 3.77% for the year ended December 31, 2020. The increase in net interest margin was primarily due to the decrease in the cost of funds. For the year ended December 31, 2021, the cost of average interest-bearing liabilities decreased to 0.67% from 1.10% for the year ended December 31, 2020. The total cost of deposits was 0.63% for the year ended December 31, 2021 compared to 1.12% for the year ended December 31, 2020. The decrease was due to decreasing deposit rates related to the decrease in market rates.

Provision for Loan Losses

For the year ended December 31, 2021, the provision for loan loss expense was $1.1 million compared to $2.0 million for the year ended December 31, 2020. We increased our provision expense in 2020 due to the uncertainty related to the COVID-19 pandemic. As the economy began to improve in 2021, less provision expense was required. Net loan recoveries were $1.1 million for the year ended December 31, 2021, compared to $227,000 for the year ended December 31, 2020. The increase in net recoveries was primarily driven by a $1.0 million recovery on a previously charged off commercial real estate loan.

Non-interest Income

For the year ended December 31, 2021, noninterest income increased $522,000 to $2.7 million compared to $2.2 million for the year ended December 31, 2020. This was a result of increases in service charges on deposits accounts, interchange income, and secondary market fee income.

Non-interest Expense

Operating expenses decreased $450,000 to $21.0 million for the year ended December 31, 2021, compared to $21.4 million for the year ended December 31, 2020. We saw an increase in legal and accounting fees as well as salary and employee expense in 2020 due to the merger.

Income Tax Expense

We recorded income tax expense of $2.3 million for year ended December 31, 2021, compared to $792,000 for the year ended December 31, 2020. The higher tax expense for the year ended December 31, 2021, was primarily due to higher pretax income.

Financial Condition

Total assets decreased by $62.5 million to $788.1 million at December 31, 2021, from $850.6 million at December 31, 2020. The decrease was due primarily to a decrease in cash and cash equivalents of $66.5 million due to our no longer using the Paycheck Protection Program Liquidity Facility (PPPLF) for funding as well as a decrease in net loans of $16.4 million. Cash and equivalents decreased $66.5 million, to $111.8 million at December 31, 2021, from $178.3 million at December 31, 2020, as the PPPLF was not used for funding at year end and excess cash from the stock offering was returned. Total investment securities available for sale increased by $24.6 million at December 31, 2021, as compared to December 31, 2020, as we deployed excess liquidity. Total loans decreased $14.2 million to $584.4 million at December 31, 2021 from $598.6 million at December 31, 2020, including Paycheck Protection Program (PPP) loans of $17.9 million and $101.7 million at December 31, 2021 and December 31, 2020, respectively. Deposits decreased by $25.4 million to $614.8 million at December 31, 2021 compared to $640.2 million at December 31, 2020, which reflected a decrease in certificate of deposits of $34.9 million, partly offset by an increase in non-interest-bearing deposits of $33.1 million. The loan-to-deposit ratio at December 31, 2021 was 93.7%, as compared to 92.5% at December 31, 2020. Interest-bearing checking accounts decreased $38.4 million as a result of the completion of the second step conversion. Stockholders’ equity increased to $121.0 million at December 31, 2021, as compared to $80.8 million at December 31, 2020, primarily due to the completion of our mutual-to-stock conversion and related stock offering on January 20, 2021. We sold 3,701,509 shares of common stock at $10.00 per share and raised gross proceeds of $37.1 million in the offering.

Asset Quality

The Company’s non-performing loans increased to $7.0 million at December 31, 2021, as compared to $4.9 million at December 31, 2020. The allowance for loan losses as a percentage of non-performing loans was 122.1% at December 31, 2021, as compared to 129.8% at December 31, 2020. The Company’s allowance for loan losses was 1.46% of total loans at December 30, 2021, as compared to 1.06% at December 31, 2020. The allowance as a percentage of total loans increased due to the decrease in PPP loans as well as a large recovery of a previously charged off loan.

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.

Average Balance Sheets

The following tables set forth average balance sheets, average yields and costs, and certain other information for the years 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,

2021

2020

Average
Outstanding
Balance

Interest

Average
Yield/Rate

Average
Outstanding
Balance

Interest

Average
Yield/Rate

(Dollars in thousands)

Interest-earning assets:

Loans

$

588,976

$

31,484

5.35

%

$

575,548

$

29,933

5.20

%

Securities

35,109

709

2.02

%

19,917

380

1.91

%

Interest-earning deposits and federal funds

98,554

180

0.18

%

69,137

212

0.31

%

Other investments

2,324

80

3.43

%

2,523

107

4.24

%

Total interest-earning assets

724,963

32,453

4.48

%

667,125

30,632

4.59

%

Noninterest-earning assets

63,373

60,601

Total assets

$

788,336

$

727,726

Interest-bearing liabilities:

Savings accounts

$

93,113

403

0.43

%

$

88,425

878

0.99

%

Interest-bearing checking accounts

88,852

185

0.21

%

70,678

286

0.40

%

Money market checking accounts

133,835

469

0.35

%

112,863

965

0.86

%

Certificates of deposit

110,742

1,623

1.47

%

154,020

2,623

1.70

%

Total interest-bearing deposits

426,542

2,680

0.63

%

425,986

4,752

1.12

%

Federal Home Loan Bank advances

43,370

482

1.11

%

44,574

569

1.28

%

Paycheck Protection Program Liquidity Facility borrowings

1,023

4

0.35

%

20,324

72

0.35

%

Other borrowings

418

11

2.59

%

8,184

97

1.18

%

Total interest-bearing liabilities

471,353

3,177

0.67

%

499,068

5,490

1.10

%

Noninterest-bearing liabilities

200,756

150,781

Total liabilities

672,109

649,849

Total stockholders' equity

$

116,227

$

77,877

Total liabilities and retained earnings

$

788,336

$

727,726

Net interest income

$

29,276

$

25,142

Net interest rate spread (1)

3.81

%

3.49

%

Net interest-earning assets (2)

$

253,610

$

168,057

Net interest margin (3)

4.04

%

3.77

%

Average interest-earning assets to interest- bearing liabilities

153.80

%

133.67

%

(1)

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(2)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(3)

Net interest margin represents net interest income divided by average total interest-earning assets.

AFFINITY BANCSHARES, INC.

Consolidated Balance Sheets

December 31,
2021

December 31,
2020

(In thousands except share amounts)

Assets

Cash and due from banks, including reserve requirement of $0 at December 31, 2021 and 2020, respectively

$

16,239

5,552

Interest-earning deposits in other depository institutions

95,537

172,701

Cash and cash equivalents

111,776

178,253

Investment securities available-for-sale

48,557

24,005

Other investments

2,476

1,596

Loans, net

575,825

592,254

Other real estate owned

3,538

1,292

Premises and equipment, net

3,783

8,617

Bank owned life insurance

15,377

15,311

Intangible assets

18,749

18,940

Accrued interest receivable and other assets

8,007

10,360

Total assets

$

788,088

850,628

Liabilities and Stockholders' Equity

Liabilities :

Savings accounts

$

86,745

96,591

Interest-bearing checking

91,387

129,813

Market rate checking

145,969

121,317

Noninterest-bearing checking

193,940

160,819

Certificate of deposits

96,758

131,625

Total deposits

614,799

640,165

Federal Home Loan Bank (FHLB) advances

48,988

19,117

Paycheck Protection Program Liquidity Facility (PPPLF) borrowings

100,814

Other borrowings

5,000

Accrued interest payable and other liabilities

3,333

4,748

Total liabilities

667,120

769,843

Commitments

Stockholders' equity:

Common stock (par value $0.01 per share, 40,000,000 shares authorized,
6,872,634 issued and outstanding at December 31, 2021 and 19,000,000
shares authorized, 6,968,469 issued and 6,865,653 outstanding at December 31, 2020) (1)

69

69

Preferred stock (1,000,000 shares authorized, no shares outstanding)

Additional paid in capital

68,038

33,628

Treasury stock, 0 shares at December 31, 2021 and 102,816 shares at December 31, 2020, at cost

(1,268

)

Unearned ESOP shares

(5,004

)

(2,453

)

Retained earnings

58,223

50,650

Accumulated other comprehensive (loss) income

(358

)

159

Total stockholders' equity

120,968

80,785

Total liabilities and stockholders' equity

$

788,088

850,628

(1)

Amounts related to periods prior to the date of Conversion (January 20, 2021) have been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (0.90686).

AFFINITY BANCSHARES, INC.

Consolidated Statements of Income

For the Year Ended December 31,

For the Year Ended December 31,

2021

2020

(In thousands except per share amounts)

Interest income:

Loans, including fees

$

31,484

29,933

Investment securities, including dividends

789

487

Interest-earning deposits

180

212

Total interest income

32,453

30,632

Interest expense:

Deposits

2,680

4,752

Borrowings

497

738

Total interest expense

3,177

5,490

Net interest income before provision for loan losses

29,276

25,142

Provision for loan losses

1,075

2,000

Net interest income after provision for loan losses

28,201

23,142

Noninterest income:

Service charges on deposit accounts

1,506

1,359

Gain on sales of investment securities available-for-sale

20

Other

1,172

777

Total noninterest income

2,678

2,156

Noninterest expenses:

Salaries and employee benefits

10,415

10,969

Deferred compensation

248

279

Occupancy

2,935

2,820

Advertising

339

200

Data processing

1,975

2,343

Other real estate owned

18

20

Net loss (gain) on sale and write-down of other real estate owned

(127

)

289

Legal and accounting

827

1,447

Organizational dues and subscriptions

363

306

Director compensation

198

203

Federal deposit insurance premiums

260

401

Other

3,517

2,141

Total noninterest expenses

20,968

21,418

Income before income taxes

9,911

3,880

Income tax expense

2,338

792

Net income

$

7,573

3,088

Basic earnings per share (1)

$

1.10

0.41

Diluted earnings per share (1)

$

1.09

$

0.41

(1)

Amounts related to periods prior to the date of the Conversion (January 20, 2021) have been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (0.90686-to-one).

Non-GAAP Reconciliation

Reported amounts for total loans are presented in accordance with GAAP. The Company’s management believes that the following supplemental non-GAAP information, which consists of total loans excluding PPP loans, deferred loan fees and other loan adjustments (consisting of loans in process), provides a better comparison of the amount of the Company’s loan portfolio. Additionally, the Company believes this information is utilized by 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.

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2020

(In thousands)

Non-GAAP Reconciliation

Total Loans

$

584,384

$

571,170

$

590,011

$

626,096

$

598,615

Plus:

Fair Value Marks

1,350

1,422

1,529

1,607

1,772

Deferred loan fees

953

1,077

1,666

2,466

1,980

Less:

Payroll Protection Program

18,124

32,204

73,020

126,054

101,749

loans

Indirect Auto Dealer

Reserve

1,846

1,724

1,495

1,302

1,167

Other Loan Adjustments

219

102

447

0

591

Gross Loans

$

566,498

$

539,639

$

518,244

$

502,813

$

498,860

View source version on businesswire.com: https://www.businesswire.com/news/home/20220222006171/en/

Contacts

Edward J. Cooney
Chief Executive Officer
(678) 742-9990