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What changed in Affinity Bancshares, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Affinity Bancshares, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+155 added−155 removedSource: 10-K (2025-03-21) vs 10-K (2024-03-21)

Top changes in Affinity Bancshares, Inc.'s 2024 10-K

155 paragraphs added · 155 removed · 136 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

69 edited+4 added−10 removed221 unchanged
Biggest changeAt December 31, 2023 2022 (Dollars in thousands) Non-accrual loans: Commercial (secured by real estate - owner occupied) $ — $ 85 Commercial (secured by real estate - non-owner occupied) 4,505 3,312 Commercial and industrial — 3 Construction, land and acquisition & development — — Residential mortgage 1-4 family 2,504 3,185 Consumer installment 417 135 Total non-accrual loans 7,426 6,720 Accruing loans past due 90 days or more — 249 Commercial (secured by real estate - owner occupied) Commercial (secured by real estate - non-owner occupied) 2,850 2,901 Commercial and industrial — — Construction, land and acquisition & development — — Residential mortgage 1-4 family — — Consumer installment — — Total real estate owned 2,850 2,901 Total non-performing assets $ 10,276 $ 9,870 Total non-performing loans to total loans 1.13 % 1.04 % Total non-performing assets to total assets 1.22 % 1.25 % Classified Assets .
Biggest changeAt December 31, 2024 2023 (Dollars in thousands) Non-accrual loans: Commercial (secured by real estate - owner occupied) $ 1,996 $ — Commercial (secured by real estate - non-owner occupied) 152 4,505 Commercial and industrial — — Construction, land and acquisition & development 17 — Residential mortgage 1-4 family 2,313 2,504 Consumer installment 299 417 Total non-accrual loans 4,777 7,426 Real estate owned: Commercial (secured by real estate - owner occupied) — — Commercial (secured by real estate - non-owner occupied) — 2,850 Commercial and industrial — — Construction, land and acquisition & development — — Residential mortgage 1-4 family — — Consumer installment — — Total real estate owned — 2,850 Total non-performing assets $ 4,777 $ 10,276 Total non-performing loans to total loans 0.67 % 1.13 % Total non-performing assets to total assets 0.55 % 1.22 % The decrease in non-accrual non-owner occupied commercial real estate loans was due to loans on nonaccrual paid off in 2024, while the decrease in real estate owned was due to sale that occurred in second quarter of 2024.
Unlike federal savings banks, national banks are not generally held to specified percentages of assets on 17 various types of lending. Affinity Bank may also establish subsidiaries that engage in activities permitted for Affinity Bank as well as certain other activities. Capital Requirements .
Unlike federal savings banks, national banks are not generally held to specified percentages of assets on various types of lending. Affinity Bank may also establish subsidiaries that engage in activities permitted for Affinity Bank as well as certain other activities. 17 Capital Requirements .
A bank’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. The Community Reinvestment Act requires all institutions insured by the Federal Deposit Insurance Corporation to publicly disclose their rating.
A bank’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. The Community Reinvestment Act requires all institutions insured by the Federal Deposit Insurance Corporation to 18 publicly disclose their rating.
All investment decisions are made by our Asset/Liability Management Committee, consisting of our President and Chief Executive 13 Officer, the Chairman of the Board, another member of the board of directors, and other members of senior management. The Chief Financial Officer provides an investment schedule detailing the investment portfolio, which is reviewed at least monthly by the board of directors.
All investment decisions are made by our Asset/Liability Management Committee, consisting of our President and Chief Executive Officer, the Chairman of the Board, another member of the board of directors, and other members of senior management. The Chief Financial Officer provides an investment schedule detailing the investment portfolio, which is reviewed at least monthly by the board of directors.
All insured depository institutions have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers. The Office of the Comptroller of the Currency is required to assess the national bank’s records of 18 compliance with the Community Reinvestment Act.
All insured depository institutions have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers. The Office of the Comptroller of the Currency is required to assess the national bank’s records of compliance with the Community Reinvestment Act.
Adjustments to modeled loss estimates may be made for differences in 11 current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors.
Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors.
Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.
Sarbanes-Oxley Act The Sarbanes-Oxley Act is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.
We have invested a substantial portion of the proceeds of the offering in short-term and other investments, including U.S. government securities. Our investment policy was adopted by the board of directors and is reviewed annually by the board of directors.
We have invested a substantial portion of the proceeds of the offering in short-term and other investments, including U.S. government securities. 13 Our investment policy was adopted by the board of directors and is reviewed annually by the board of directors.
The following table sets forth the contractual maturities of our total loan portfolio at December 31, 2023. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. The table presents contractual maturities and does not reflect repricing or the effect of prepayments. Actual maturities may differ.
The following table sets forth the contractual maturities of our total loan portfolio at December 31, 2024. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. The table presents contractual maturities and does not reflect repricing or the effect of prepayments. Actual maturities may differ.
An additional amount may be loaned, equal to 10% of the bank's capital and surplus, if the excess is secured by readily marketable collateral, which generally does not include real estate. At December 31, 2023 and 2022 , Affinity Bank was in compliance with the loans-to-one borrower limitations. Dividends.
An additional amount may be loaned, equal to 10% of the bank's capital and surplus, if the excess is secured by readily marketable collateral, which generally does not include real estate. At December 31, 2024 and 2023 , Affinity Bank was in compliance with the loans-to-one borrower limitations. Dividends.
At December 31, 2023 and 2022, Affinity Bank met the criteria for being considered “well capitalized.” Insurance of Deposit Accounts. The Deposit Insurance Fund of the Federal Deposit Insurance Corporation insures deposits at Federal Deposit Insurance Corporation-insured financial institutions such as Affinity Bank, generally up to a maximum of $250,000 per separately insured depositor per account ownership category.
At December 31, 2024 and 2023, Affinity Bank met the criteria for being considered “well capitalized.” Insurance of Deposit Accounts. The Deposit Insurance Fund of the Federal Deposit Insurance Corporation insures deposits at Federal Deposit Insurance Corporation-insured financial institutions such as Affinity Bank, generally up to a maximum of $250,000 per separately insured depositor per account ownership category.
As a member of Federal Home Loan Bank of Atlanta, we are required to purchase stock in the Federal Home Loan Bank of Atlanta, which stock is carried at cost and classified as restricted equity securities. In addition, at December 31, 2023, we owned $250,000 of First National Bankers Bank stock and $2.7 million in Federal Reserve Bank stock.
As a member of Federal Home Loan Bank of Atlanta, we are required to purchase stock in the Federal Home Loan Bank of Atlanta, which stock is carried at cost and classified as restricted equity securities. In addition, at December 31, 2024, we owned $250,000 of First National Bankers Bank stock and $2.7 million in Federal Reserve Bank stock.
As such, it is grouped with any other capital losses for the year to which it is carried and is used to offset any capital gains. Any loss remaining after the five-year carryover period is not deductible. At December 31, 2023 and 2022, Affinity Bancshares, Inc. had no capital loss carryovers. Corporate Dividends.
As such, it is grouped with any other capital losses for the year to which it is carried and is used to offset any capital gains. Any loss remaining after the five-year carryover period is not deductible. At December 31, 2024 and 2023, Affinity Bancshares, Inc. had no capital loss carryovers. Corporate Dividends.
All bank tax credits were utilized in 2021, so there are no bank tax credits remaining at December 31, 2023 and 2022. Maryland State Taxation. As a Maryland business corporation, Affinity Bancshares is required to file an annual report with and pay franchise taxes to the State of Maryland.
All bank tax credits were utilized in 2021, so there are no bank tax credits remaining at December 31, 2024 and 2023. Maryland State Taxation. As a Maryland business corporation, Affinity Bancshares is required to file an annual report with and pay franchise taxes to the State of Maryland.
At December 31, 2023, our largest commercial real estate loan totaled $8.6 million and is secured by a well-established, anchored, retail shopping center. At December 31, 2023, this loan was performing in accordance with its terms. We consider several factors in originating commercial real estate loans.
At December 31, 2024, our largest commercial real estate loan totaled $8.6 million and is secured by a well-established, anchored, retail shopping center. At December 31, 2024, this loan was performing in accordance with its terms. We consider several factors in originating commercial real estate loans.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. Affinity Bank did not opt in to the community bank leverage ratio framework. At December 31, 2023 and 2022, Affinity Bank’s capital exceeded all applicable requirements. Loans-to-One Borrower.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. Affinity Bank did not opt in to the community bank leverage ratio framework. At December 31, 2024 and 2023, Affinity Bank’s capital exceeded all applicable requirements. Loans-to-One Borrower.
At December 31, 2023, this loan was performing in accordance with its terms. Commercial Real Estate Loans . Our commercial real estate loans (which includes owner occupied and non-owner occupied loans) are secured primarily by dental/medical professional properties, church campuses and other small businesses.
At December 31, 2024, this loan was performing in accordance with its terms. Commercial Real Estate Loans . Our commercial real estate loans (which includes owner occupied and non-owner occupied loans) are secured primarily by dental/medical professional properties, church campuses and other small businesses.
We also invest in securities, which have historically consisted primarily of mortgage-backed securities and obligations issued by U.S. government sponsored enterprises and Federal Home Loan Bank stock. We offer a variety of deposit accounts, including checking accounts, savings accounts and certificate of deposit accounts.
We also invest in securities, which have historically consisted primarily of mortgage-backed securities and obligations issued by U.S. government sponsored enterprises and Federal Home Loan Bank stock. We offer a variety of deposit accounts, including checking accounts, savings accounts and certificates of deposit accounts.
At December 31, 2023, based on the 15% limitation, Affinity Bank’s loans-to-one-borrower limit was approximately $15.7 million . On the same date, Affinity Bank had no borrowers with outstanding balances in excess of this amount.
At December 31, 2024, based on the 15% limitation, Affinity Bank’s loans-to-one-borrower limit was approximately $15.7 million . On the same date, Affinity Bank had no borrowers with outstanding balances in excess of this amount.
At December 31, 2023, our investment portfolio consisted of U.S. Treasury securities, securities and obligations issued by U.S. government-sponsored enterprises and the Federal Home Loan Bank of Atlanta, municipal securities and corporate securities. At December 31, 2023, we owned $2.5 million of Federal Home Loan Bank of Atlanta stock.
At December 31, 2024, our investment portfolio consisted of U.S. Treasury securities, securities and obligations issued by U.S. government-sponsored enterprises and the Federal Home Loan Bank of Atlanta, municipal securities and corporate securities. At December 31, 2024, we owned $2.5 million of Federal Home Loan Bank of Atlanta stock.
Affinity Bancshares, Inc. and Affinity Bank currently report income and expenses on the accrual method of accounting and use a tax year ending December 31 for filing their federal income tax returns. Affinity Bancshares, Inc. and Affinity Bank file a consolidated federal income tax return.
Affinity Bancshares, Inc. and Affinity Bank currently report income and expenses on the accrual method of accounting and use a tax year ending December 31 for filing their federal income tax returns. Affinity Bancshares, Inc. and Affinity Bank file a consolidated federal income tax return. Alternative Minimum Tax.
We remain knowledgeable of trends in the dental industry through regular contact with our borrowers as well as through our participation in dental managers associations and our dental advisory board. Our largest commercial and industrial loan at December 31, 2023 totaled $3.9 million, was originated in 2020 and is secured by all business assets.
We remain knowledgeable of trends in the dental industry through regular contact with our borrowers as well as through our participation in dental managers associations and our dental advisory board. Our largest commercial and industrial loan at December 31, 2024 totaled $3.4 million, was originated in 2020 and is secured by all business assets.
Allowance for Credit Losses ACL is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Accrued interest receivable is excluded from the estimate of credit losses.
Allowance for Credit Losses ACL is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed.
At December 31, 2023, we had $113.3 million in indirect automobile loans, and our internal policies limit such loans to 200% of capital and 25% of our loan portfolio. ABDS purchases retail installment sales contracts from dealerships in the states of Alabama, Georgia, Florida, Tennessee, North Carolina, South Carolina, Kentucky and Virginia.
At December 31, 2024, we had $119.6 million in indirect automobile loans, and our internal policies limit such loans to 200% of capital and 25% of our loan portfolio. ABDS purchases retail installment sales contracts from dealerships in the states of Alabama, Georgia, Florida, Tennessee, North Carolina, South Carolina, Kentucky and Virginia.
At December 31, 2023, we had $53.7 million of loans secured by one- to four-family real estate, representing 8.1% of our total loan portfolio. We currently originate adjustable-rate and fixed-rate one- to four-family residential real estate loans, although our ability to originate adjustable-rate residential mortgage loans is significantly limited in the current interest rate environment.
At December 31, 2024, we had $54.1 million of loans secured by one- to four-family real estate, representing 7.6% of our total loan portfolio. We currently originate adjustable-rate and fixed-rate one- to four-family residential real estate loans, although our ability to originate adjustable-rate residential mortgage loans is significantly limited in the current interest rate environment.
In 2018, we established our indirect automobile lending division, Affinity Bank Dealer Select (“ABDS”, and formerly named Community First Auto), which currently operates from an office in Monroe, Georgia. This division has an experienced manager and sales team to operate this line of business.
In 2018, we established our indirect automobile lending division, Affinity Bank Dealer Select (“ABDS”), which currently operates from an office in Monroe, Georgia. This division has an experienced manager and sales team to operate this line of business.
The table below presents the maturity schedule at December 31, 2023 for available-for-sale securities.
The table below presents the maturity schedule at December 31, 2024 for available-for-sale securities.
We historically originated fixed-rate one- to four-family residential real estate loans with balloon terms, but recently began originating adjustable-rate one- to four-family residential real estate loans. At December 31, 2023, $16.6 million, or 31.0%, of our one- to four-family residential real estate loans were adjustable-rate loans.
We historically originated fixed-rate one- to four-family residential real estate loans with balloon terms, but recently began originating adjustable-rate one- to four-family residential real estate loans. At December 31, 2024, $17.6 million, or 33.0%, of our one- to four-family residential real estate loans were adjustable-rate loans.
Our indirect automobile lending division, Affinity Bank Dealer Select (formerly “Community First Auto”), operates from an office in Monroe, Georgia. In addition, we gather deposits nationwide through our virtual bank, FitnessBank.
Our indirect automobile lending division, Affinity Bank Dealer Select, operates from an office in Monroe, Georgia. In addition, we gather deposits nationwide through our virtual bank, FitnessBank.
Deposit account terms vary, with the principal differences being the minimum balance required, the amount of time the funds must remain on deposit and the interest rate. We have the authority to accept brokered deposits and had $107.3 million in brokered certificate of deposits as of December 31, 2023.
Deposit account terms vary, with the principal differences being the minimum balance required, the amount of time the funds must remain on deposit and the interest rate. We have the authority to accept brokered deposits and had $106.3 million in brokered certificates of deposit as of December 31, 2024.
The following table sets forth the maturity of these certificates as of December 31, 2023.
The following table sets forth the maturity of these certificates as of December 31, 2024.
We sometimes purchase whole loans from third parties to supplement our loan production. These loans generally consist of loans to health care professionals and loans secured by manufactured housing. At December 31, 2023, we had $9.4 million of whole loans that we purchased.
We sometimes purchase whole loans from third parties to supplement our loan production. These loans generally consist of loans to health care professionals and loans secured by manufactured housing. At December 31, 2024, we had $10.2 million of whole loans that we purchased.
Management determines the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses.
Accrued interest receivable is excluded from the estimate of credit losses. 11 Management determines the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses.
Depending on the collateral used to secure the loans, commercial and industrial loans are made in amounts of up to 80% of the value of the collateral securing the loan. Our commercial business loans to dental professionals totaled $109.8 million at December 31, 2023 .
Depending on the collateral used to secure the loans, commercial and industrial loans are made in amounts of up to 80% of the value of the collateral securing the loan. Our commercial business loans to dental professionals totaled $115.1 million at December 31, 2024 .
On October 24, 2023, the Office of the Comptroller of the Currency and the other federal banking agencies issued a final rule to strengthen and modernize the CRA regulations.
In 2023, the Office of the Comptroller of the Currency and the other federal banking agencies issued a final rule to strengthen and modernize the CRA regulations.
Government to remain open, function properly and manage federal debt limits; • our compensation expense associated with equity allocated or awarded to our employees; • the effects of climate change and societal, investor and governmental responses to climate change; • the effects of environmental, social and governance change and societal and investor sentiment and governmental responses to environmental, social and governance matters; • the effects of domestic and international hostilities, including terrorism; • changes in the financial condition, results of operations or future prospects of issuers of securities that we own; and • the effects of any public health emergencies, pandemic disease, natural disaster, war, accident, or similar action or event.
Government to remain open, function properly and manage federal debt limits; • our compensation expense associated with equity allocated or awarded to our employees; • the effects of climate change; • the effects of domestic and international hostilities, including terrorism; • the imposition of tariffs or other domestic or international governmental policies; • changes in the financial condition, results of operations or future prospects of issuers of securities that we own; and • the effects of any public health emergencies, pandemic disease, natural disaster, war, accident, or similar action or event.
In addition, we had $4.9 million of commercial construction and development loans as of December 31, 2023, which included $3.4 million of commercial development and land loans.
In addition, we had $7.4 million of commercial construction and development loans as of December 31, 2024, which included $3.3 million of commercial development and land loans.
At December 31, 2023, commercial and industrial loans were $140.4 million, or 21.3% of our gross loans. As part of our relationship driven focus, we encourage our commercial borrowers to maintain their primary deposit accounts with us, which enhances our interest rate spread and net interest margin. 5 Commercial lending products include term loans and revolving lines of credit.
At December 31, 2024, commercial and industrial loans were $148.2 million, or 20.8% of our gross loans. As part of our relationship driven focus, we encourage our commercial borrowers to maintain their primary deposit accounts with us, which enhances our interest rate spread and net interest margin. 5 Commercial lending products include term loans and revolving lines of credit.
A corporation cannot recognize capital losses in excess of capital gains generated. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years. Any capital loss carryback or carryover is treated as a short-term capital loss for the year to which it is carried.
Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years. Any capital loss carryback or carryover is treated as a short-term capital loss for the year to which it is carried.
Borrowings . As of December 31, 2023, we had $64.0 million available on our line of credit with the Federal Home Loan Bank of Atlanta. The balances outstanding in FHLB advances were $40.0 million and $10.0 million at December 31, 2023 and 2022, respectively. The weighted average rate was 3.86% and 4.23% at December 31, 2023 and 2022, respectively.
As of December 31, 2024, we had $40.0 million available on our line of credit with the Federal Home Loan Bank of Atlanta. The balances outstanding in FHLB advances were $54.0 million and $40.0 million at December 31, 2024 and 2023, respectively. The weighted average rate was 3.81% and 3.86% at December 31, 2024 and 2023, respectively.
As of June 30, 2023 (the most recent date for which data is available), our market share of deposits represented 21.09% of Federal Deposit Insurance Corporation-insured deposits in Newton County and 1.62% in Cobb County, ranking us first and 13th, respectively, in market share of deposits out of eight institutions operating in Newton County and 24 institutions operating in Cobb County.
As of June 30, 2024 (the most recent date for which data is available), our market share of deposits represented 19.83% of Federal Deposit Insurance Corporation-insured deposits in Newton County and 1.60% in Cobb County, ranking us first and 14th, respectively, in market share of deposits out of eight institutions operating in Newton County and 24 institutions operating in Cobb County.
Affiliated corporations that file a consolidated federal income tax return must file separate income tax returns unless they have prior approval or have been requested to file a consolidated return by the Commissioner of the Georgia Department of Revenue.
Affiliated corporations that file a consolidated federal income tax return must file separate income tax returns unless they have prior approval or have been requested to file a consolidated return by the Commissioner of the Georgia Department of Revenue. For state income tax purposes, Affinity Bancshares, Inc. and Affinity Bank file a consolidated federal income tax return.
At December 31, 2023, we had no loans held for sale. Loan Approval Procedures and Authority Pursuant to federal law, the aggregate amount of loans that Affinity Bank is permitted to make to any one borrower or a group of related borrowers is generally limited to 15% of Affinity Bank’s unimpaired capital and surplus.
Loan Approval Procedures and Authority Pursuant to federal law, the aggregate amount of loans that Affinity Bank is permitted to make to any one borrower or a group of related borrowers is generally limited to 15% of Affinity Bank’s unimpaired capital and surplus.
At December 31, 2023, our largest loan relationship with one borrower was for $10.7 million, of which was $9.0 million was funded, which was for commercial real estate, and the underlying loans were performing in accordance with their terms on that date . Our lending is subject to written underwriting standards and origination procedures.
At December 31, 2024, our largest loan relationship with one borrower was $8.6 million for commercial real estate, and the underlying loans were performing in accordance with their terms on that date . Our lending is subject to written underwriting standards and origination procedures.
At December 31, 2023 and 2022, Affinity Bancshares, Inc. had no minimum tax credit carryovers. Net Operating Loss Carryovers. As a result of the Tax Cuts and Jobs Act generally, a financial institution may carry net operating losses forward indefinitely. At December 31, 2023 and 2022, Affinity Bancshares, Inc. had no federal net operating loss carryforwards. Capital Loss Carryovers.
At December 31, 2024 and 2023, Affinity Bancshares, Inc. had no minimum tax credit carryovers. Net Operating Loss Carryovers. Generally, a financial institution may carry net operating losses forward indefinitely. At December 31, 2024 and 2023, Affinity Bancshares, Inc. had no federal net operating loss carryforwards. Capital Loss Carryovers.
Years Ended December 31, 2023 2022 (Dollars in thousands) Allowance at beginning of period $ 9,325 $ 8,559 Provision for credit losses — 704 Charge offs: Commercial (secured by real estate - owner occupied) (204 ) — Commercial (secured by real estate - non-owner occupied) — — Commercial and industrial (3 ) (26 ) Construction, land and acquisition & development — — Residential mortgage 1-4 family — — Consumer installment (307 ) (123 ) Total charge-offs (514 ) (149 ) Recoveries: Commercial (secured by real estate - owner occupied) 8 123 Commercial (secured by real estate - non-owner occupied) — — Commercial and industrial 1 21 Construction, land and acquisition & development — — Residential mortgage 1-4 family 49 39 Consumer installment 52 28 Total recoveries 110 211 Net (charge-offs) recoveries (404 ) 62 Allowance at end of period $ 8,921 $ 9,325 Allowance to non-performing loans 120.14 % 138.75 % Allowance to total loans outstanding at the end of the period 1.35 % 1.44 % Net (charge-offs) recoveries to average loans outstanding during the period (0.06 )% 0.01 % 12 The following table sets forth information with respect to charge-offs and recoveries by loan category.
Years Ended December 31, 2024 2023 (Dollars in thousands) Allowance at beginning of period $ 8,921 $ 9,325 Provision for credit losses 225 — Charge offs: Commercial (secured by real estate - owner occupied) — (204 ) Commercial (secured by real estate - non-owner occupied) (164 ) — Commercial and industrial — (3 ) Construction, land and acquisition & development — — Residential mortgage 1-4 family (50 ) — Consumer installment (527 ) (307 ) Total charge-offs (741 ) (514 ) Recoveries: Commercial (secured by real estate - owner occupied) — 8 Commercial (secured by real estate - non-owner occupied) — — Commercial and industrial 9 1 Construction, land and acquisition & development — — Residential mortgage 1-4 family — 49 Consumer installment 82 52 Total recoveries 91 110 Net (charge-offs) recoveries (650 ) (404 ) Allowance at end of period $ 8,496 $ 8,921 Allowance to non-performing loans 177.86 % 120.14 % Allowance to total loans outstanding at the end of the period 1.19 % 1.35 % Net (charge-offs) recoveries to average loans outstanding during the period (0.09 )% (0.06 )% 12 The following table sets forth information with respect to charge-offs and recoveries by loan category.
At December 31, 2023 and 2022, there was $95.5 million and $168.2 million, respectively of uninsured deposits. The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank's regulatory reporting requirements. As of those dates, we had no deposits that were uninsured for any reason other than being in excess of the federal deposit insurance limit.
The uninsured amounts are estimated based on the methodologies and assumptions used for the Bank's regulatory reporting requirements. As of those dates, we had no deposits that were uninsured for any reason other than being in excess of the federal deposit insurance limit. Borrowings .
Our consumer loans generally consist of indirect loans on new and used automobiles, loans secured by deposit accounts and unsecured personal loans. At December 31, 2023, consumer and other loans were $115.3 million, or 17.5% of gross loans.
Our consumer loans generally consist of indirect loans on new and used automobiles, loans secured by deposit accounts and unsecured personal loans. At December 31, 2024, consumer and other loans were $120.6 million, or 16.9% of gross loans.
Taxation Affinity Bancshares Inc. and Affinity Bank are subject to federal and state income taxation in the same general manner as other corporations, with some exceptions discussed below.
Management believes that we have good working relations with our employees. Taxation Affinity Bancshares Inc. and Affinity Bank are subject to federal and state income taxation in the same general manner as other corporations, with some exceptions discussed below.
At December 31, 2023, Affinity Bancshares, Inc. had total assets of $843.3 million, loans of $659.9 million, deposits of $674.4 million, and stockholders’ equity of $121.5 million. The executive offices of Affinity Bancshares, Inc. are located at 3175 Highway 278, Covington, Georgia 30014, and its telephone number is (770) 786-7088.
At December 31, 2024, Affinity Bancshares, Inc. had total assets of $866.8 million, loans of $714.1 million, deposits of $673.5 million, and stockholders’ equity of $129.1 million. The executive offices of Affinity Bancshares, Inc. are located at 3175 Highway 278, Covington, Georgia 30014, and its telephone number is (770) 786-7088.
At December 31, 2023 2022 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due (In thousands) Commercial (secured by real estate - owner occupied $ — $ — $ — $ — $ — $ — Commercial (secured by real estate - non-owner occupied — — — — — — Commercial and industrial — — — — — — Commercial, land and acquisition & development — — — 85 — — Residential mortgage 2,534 — — 2,341 533 249 Consumer installment 246 — — 571 59 — Total $ 2,780 $ $ $ 2,997 $ 592 $ 249 10 Non-Performing Assets.
At December 31, 2024 2023 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due (In thousands) Commercial (secured by real estate - owner occupied $ 370 $ 320 $ — $ — $ — $ — Commercial (secured by real estate - non-owner occupied — — — — — — Commercial and industrial 1 — — — — — Commercial, land and acquisition & development — — — — — — Residential mortgage 1,117 97 — 2,534 — — Consumer installment 526 76 — 246 — — Total $ 2,014 $ 493 $ — $ 2,780 $ — $ — 10 Non-Performing Assets.
At December 31, 2023, our residential construction loans totaled $47.7 million, representing 7.2% of our total loan portfolio, and included $4.7 million of land loans. At December 31, 2023 there was $592,000 single-family construction loans to individuals and $37.5 million were to contractors and builders.
At December 31, 2024, our residential construction loans totaled $67.6 million, representing 9.5% of our total loan portfolio, and included $5.7 million of land and lot loans. At December 31, 2024 there was $734,000 of single-family construction loans to individuals and $53.6 million to contractors and builders.
At December 31, 2023 2022 Amount Percent Average Rate Amount Percent Average Rate (Dollars in thousands) Non-interest-bearing checking $ 154,689 22.93 % — $ 190,297 28.96 % — Interest-bearing checking 85,362 12.66 % 0.29 % 91,167 13.87 % 0.18 % Money market accounts 138,673 20.56 % 2.52 % 148,097 22.54 % 0.49 % Savings accounts 74,768 11.09 % 2.62 % 101,622 15.46 % 0.96 % Certificates of deposit 220,951 32.76 % 3.81 % 125,989 19.17 % 1.48 % Total $ 674,443 100.00 % 2.09 % $ 657,172 100.00 % 0.41 % As of December 31, 2023, the aggregate amount of all our certificates of deposit in amounts greater than or equal to $250,000 was approximately $31.2 million.
At December 31, 2024 2023 Amount Percent Average Rate Amount Percent Average Rate (Dollars in thousands) Non-interest-bearing checking $ 151,395 22.48 % — $ 154,689 22.93 % — Interest-bearing checking 73,841 10.96 % 0.51 % 85,362 12.66 % 0.29 % Money market accounts 148,752 22.09 % 3.24 % 138,673 20.56 % 2.52 % Savings accounts 76,053 11.29 % 2.86 % 74,768 11.09 % 2.62 % Certificates of deposit 223,440 33.18 % 4.21 % 220,951 32.76 % 3.81 % Total $ 673,481 100.00 % 2.49 % $ 674,443 100.00 % 2.09 % As of December 31, 2024, the aggregate amount of all our certificates of deposit in amounts greater than or equal to $250,000 was approximately $35.2 million.
In addition to the loans included in the table below, at December 31, 2023, we had no loans held for sale, no loans in process, $911,000 of deferred loan fees, and $2.8 million in indirect auto dealer reserve costs.
The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated. In addition to the loans included in the table below, at December 31, 2024, we had no loans held for sale, no loans in process, $969,000 of deferred loan fees, and $3.0 million in indirect auto dealer reserve costs.
For state income tax purposes, Affinity Bancshares, Inc. and Affinity Bank file a consolidated federal income tax return. 16 Net Operating Loss Carryovers. Generally, Georgia law conforms to federal law and a financial institution may carry back Georgia net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years.
Net Operating Loss Carryovers. Generally, Georgia law conforms to federal law and a financial institution may carry back Georgia net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. At December 31, 2024 and 2023, Affinity Bank had no Georgia net operating loss carryforwards. 16 Bank Tax Credit.
At December 31, 2023, we had $302.8 million in commercial real estate loans, representing 45.9% of our total loan portfolio. At that date, $157.7 million, or 23.9% of our commercial real estate loans, were secured by owner-occupied properties. This amount included $66.3 million of dental loans, $17.6 million of church loans and $4.5 million of multi-family residential real estate loans.
At December 31, 2024, we had $323.6 million in commercial real estate loans, representing 45.3% of our total loan portfolio. At that date, $156.9 million, or 22.0% of our commercial real estate loans, were secured by owner-occupied properties. This amount included $77.7 million of dental and medical loans, $18.8 million of church loans and $12.1 million of convenience store loans.
At December 31, 2023 2022 Allowance for Credit Losses Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans Allowance for Credit Losses Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans (Dollars in thousands) Commercial (secured by real estate - owner occupied) $ 1,397 17.46 % 23.89 % $ 2,403 25.89 % 25.22 % Commercial (secured by real estate - non-owner occupied) 1,298 16.23 % 21.99 % 2,079 22.40 % 21.00 % Commercial and industrial loans 1,806 22.57 % 21.28 % 2,292 24.70 % 22.87 % Construction and land 927 11.59 % 7.23 % 487 5.25 % 5.75 % One- to four-family residential 1,038 12.98 % 8.13 % $ 345 3.72 % 7.94 % Consumer loans 1,534 19.17 % 17.48 % 1,675 18.05 % 17.22 % Total allocated allowance 8,000 100.00 % 100.00 % 9,281 100.00 % 100.00 % Unallocated 921 44 Total $ 8,921 $ 9,325 Investment Activities General .
At December 31, 2024 2023 Allowance for Credit Losses Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans Allowance for Credit Losses Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans (Dollars in thousands) Commercial (secured by real estate - owner occupied) $ 1,082 13.62 % 21.97 % $ 1,397 17.46 % 23.89 % Commercial (secured by real estate - non-owner occupied) 1,115 14.04 % 23.34 % 1,298 16.23 % 21.99 % Commercial and industrial loans 1,753 22.07 % 20.75 % 1,806 22.57 % 21.28 % Construction and land 1,134 14.28 % 9.47 % 927 11.59 % 7.23 % One- to four-family residential 1,227 15.45 % 7.58 % 1,038 12.98 % 8.13 % Consumer loans 1,632 20.54 % 16.89 % 1,534 19.17 % 17.48 % Total allocated allowance 7,943 100.00 % 100.00 % 8,000 100.00 % 100.00 % Unallocated 553 921 Total $ 8,496 $ 8,921 Investment Activities General .
We have a specialized expertise in lending to dentists and dental practices, since 2002, with loans to the dental industry totaling $176.1 million, or 26.7% of our loan portfolio, as of December 31, 2023.
We have a specialized expertise in lending to dentists and dental practices, since 2002, with loans to the dental industry totaling $185.4 million, or 26.0% of our loan portfolio, as of December 31, 2024. Of this amount, 62% consisted of commercial business loans and 38% consisted of commercial real estate loans. 4 Loan Portfolio Composition.
The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices.
The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.
At December 31, 2023 and 2022, Affinity Bank had no Georgia net operating loss carryforwards. Bank Tax Credit. All financial depository institutions that conduct business or own property in Georgia are required to file a Georgia Financial Institutions Business Occupation Tax based on Georgia gross receipts.
All financial depository institutions that conduct business or own property in Georgia are required to file a Georgia Financial Institutions Business Occupation Tax based on Georgia gross receipts.
At December 31, 2023 2022 Amount Percent Amount Percent (Dollars in thousands) Commercial (secured by real estate - owner occupied) $ 157,691 23.89 % $ 162,989 25.22 % Commercial (secured by real estate - non-owner occupied) 145,100 21.99 % 135,720 21.00 % Commercial and industrial 140,407 21.28 % 147,775 22.87 % Construction, land and acquisition & development 47,685 7.23 % 37,158 5.75 % Residential mortgage 1-4 family 53,650 8.13 % 51,324 7.94 % Consumer installment 115,343 17.48 % 111,268 17.22 % Total 659,876 100.00 % 646,234 100.00 % Less: Allowance for losses (8,921 ) (9,325 ) Total loans, net $ 650,955 $ 636,909 Contractual Maturities.
At December 31, 2024 2023 Amount Percent Amount Percent (Dollars in thousands) Commercial (secured by real estate - owner occupied) $ 156,923 21.97 % $ 157,691 23.89 % Commercial (secured by real estate - non-owner occupied) 166,662 23.34 % 145,100 21.99 % Commercial and industrial 148,150 20.75 % 140,407 21.28 % Construction, land and acquisition & development 67,622 9.47 % 47,685 7.23 % Residential mortgage 1-4 family 54,142 7.58 % 53,650 8.13 % Consumer installment 120,616 16.89 % 115,343 17.48 % Total 714,115 100.00 % 659,876 100.00 % Less: Allowance for losses (8,496 ) (8,921 ) Total loans, net $ 705,619 $ 650,955 Contractual Maturities.
For the Year Ended December 31, 2023 2022 Average Balance Net (Recoveries) / Charge-offs % of Net (Recoveries) / Charge-offs to Average Balance Average Balance Net (Recoveries) / Charge-offs % of Net (Recoveries) / Charge-offs to Average Balance Commercial (secured by real estate - owner occupied) $ 163,863 $ 196 0.12 % $ 157,482 $ (123 ) (0.08 )% Commercial (secured by real estate - non-owner occupied) 142,404 — — 131,136 — — Commercial and industrial 148,149 2 0.00 % 156,682 5 0.00 % Construction, land and acquisition & development 40,337 — — 31,842 — — Residential mortgage 52,208 (49 ) (0.09 )% 55,416 (39 ) (0.07 )% Consumer installment 113,798 255 0.22 % 91,853 95 0.10 % Total gross loans 660,759 $ 404 0.06 % 624,411 $ (62 ) 0.01 % Deferred loan fees, net 714 1,048 Total loans outstanding at end of year $ 660,045 0.06 % $ 623,363 0.01 % Allocation of Allowance for Credit Losses.
For the Year Ended December 31, 2024 2023 Average Balance Net (Recoveries) / Charge-offs % of Net (Recoveries) / Charge-offs to Average Balance Average Balance Net (Recoveries) / Charge-offs % of Net (Recoveries) / Charge-offs to Average Balance Commercial (secured by real estate - owner occupied) $ 162,326 $ — — $ 163,863 $ 196 0.12 % Commercial (secured by real estate - non-owner occupied) 155,991 164 0.11 % 142,404 — — Commercial and industrial 146,035 (9 ) (0.01 )% 148,149 2 — Construction, land and acquisition & development 54,669 — — 40,337 — — Residential mortgage 51,816 50 0.10 % 52,208 (49 ) 0.09 % Consumer installment 117,464 445 0.38 % 113,798 255 0.22 % Total gross loans 688,301 $ 650 0.09 % 660,759 $ 404 0.06 % Deferred loan fees, net 814 714 Total loans outstanding at end of year $ 687,487 $ 660,045 Allocation of Allowance for Credit Losses.
At December 31, 2023, we had $1.4 million of committed funds for loan participation interests that we purchased, and at that date, we had $12.6 million of loans for which we had sold participation interests. We do not originate significant amounts of loans for sale, but we occasionally sell loans, primarily to generate fee income.
We do not originate significant amounts of loans for sale, but we occasionally sell loans, primarily to generate fee income. At December 31, 2024, we had no loans held for sale.
In addition to the Federal Home Loan Bank of Atlanta line of credit, we have three unsecured federal funds lines of credit, in total $32.5 million. At December 31, 2023 and 2022 $0 and $25,000 was outstanding on one of these lines of credit. 15 Subsidiary Activities Affinity Bancshares, Inc. has no subsidiaries other than Affinity Bank.
We also had $4.8 million outstanding under the Bank Term Funding Program at December 31, 2024. In addition to the Federal Home Loan Bank of Atlanta line of credit, we have three unsecured federal funds lines of credit, totaling $32.5 million.
Treasury securities $ — — $ 2,984 1.33 % $ 2,163 1.69 % $ — — $ 5,147 $ 4,498 1.48 % Municipal securities – tax exempt — — — — — — 527 2.04 % 527 442 2.04 % Municipal securities – taxable — — — — 2,530 2.44 % — — 2,530 2,135 2.44 % U.S.
Treasury securities $— — $2,987 1.33% $2,200 1.69% $— — $5,187 $4,567 1.48% Municipal securities – tax exempt — — — — — — 520 2.07% 520 433 2.07% Municipal securities – taxable — — — — 2,041 2.11% — — 2,041 1,671 2.11% U.S.
Government sponsored enterprises — — — — 2,022 1.62 % 9,815 2.46 % 11,837 8,630 2.32 % Government agency mortgage-backed securities 5 2.99 % 2,806 2.35 % 11,139 2.38 % 4,693 1.97 % 18,643 15,948 2.27 % Corporate securities — — 3,958 7.25 % 14,397 4.74 % — — 18,355 16,908 5.28 % Total $ 5 2.99 % $ 9,748 4.03 % $ 32,251 3.34 % $ 15,035 2.29 % $ 57,039 $ 48,561 3.18 % Following is a maturity schedule at December 31, 2023 for held-to-maturities securities.
Government sponsored enterprises — — — — 2,022 1.62% 9,815 2.31% 11,837 8,481 2.19% Government agency mortgage-backed securities — — 2,481 1.86% 7,891 2.23% 4,704 2.30% 15,076 12,344 2.19% Corporate securities — 3,988 6.45% 5,498 4.54% — — 9,486 9,006 5.34% Total $— — $9,456 3.63% $19,652 2.74% $15,039 2.30% $44,147 $36,502 2.78% Following is a maturity schedule at December 31, 2024 for held-to-maturities securities.
Personnel As of December 31, 2023, we had 91 full-time employees and two part-time employees. Our employees are not represented by any collective bargaining group. Management believes that we have good working relations with our employees.
At December 31, 2024 and 2023 $0 was outstanding on these lines of credit. 15 Subsidiary Activities Affinity Bancshares, Inc. has no subsidiaries other than Affinity Bank. Personnel As of December 31, 2024, we had 88 full-time employees and four part-time employees. Our employees are not represented by any collective bargaining group.
One Year or Less More than One Year through Five Years More than Five Years through Ten Years More than Ten Years Total Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield (Dollars in thousands) U.S.
One Year or Less More than One Year through Five Years More than Five Years through Ten Years More than Ten Years Total Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield (Dollars in thousands) Government agency mortgage-backed securities $— — $— — $— — $715 3.23% $715 $612 3.23% Corporate securities 3,952 5.96% 10,396 6.22% 12,281 6.28% — — 26,629 26,674 6.21% Total $3,952 5.96% $10,396 6.22% $12,281 6.28% $715 3.23% $27,344 $27,286 6.14% Sources of Funds General.
At December 31, 2023 (In thousands) Maturity Period: Three months or less $ 7,258 Over three through six months 755 Over six through twelve months 14,982 Over twelve months 8,168 Total $ 31,163 At December 31, 2023 and 2022, we had $245.0 million and $308.4 million of deposits where the total balanced exceeded $250,000, respectively, which is the federal deposit insurance limit.
At December 31, 2024 (In thousands) Maturity Period: Three months or less $ 7,253 Over three through six months 13,579 Over six through twelve months 11,615 Over twelve months 2,738 Total $ 35,185 At December 31, 2024 and 2023, there was $97.2 million and $95.5 million, respectively of uninsured deposits.
Removed
Of this amount, 62% consisted of commercial business loans and 38% consisted of commercial real estate loans, with the remaining amount being unsecured loans. 4 Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated.
Added
December 31, 2024 Due in one year or less After one through five years After five through 15 years After 15 years Total (In thousands) Amounts due in: Commercial (secured by real estate - owner occupied) $ 10,896 $ 63,453 $ 74,065 $ 8,509 $ 156,923 Commercial (secured by real estate - non-owner occupied) 4,188 108,289 49,200 4,985 166,662 Commercial and industrial 2,614 34,166 111,370 — 148,150 Construction, land and acquisition & development 51,903 11,410 3,575 734 67,622 Residential mortgage 2,265 4,728 22,926 24,223 54,142 Consumer installment 837 76,136 43,643 — 120,616 $ 72,703 $ 298,182 $ 304,779 $ 38,451 $ 714,115 The following table sets forth our fixed and adjustable-rate loans at December 31, 2025 that are contractually due after December 31, 2024.
Removed
December 31, 2023 Due in one year or less After one through five years After five through 15 years After 15 years Total (In thousands) Amounts due in: Commercial (secured by real estate - owner occupied) $ 16,222 $ 55,803 $ 76,391 $ 9,275 $ 157,691 Commercial (secured by real estate - non-owner occupied) 4,032 79,899 52,644 8,525 145,100 Commercial and industrial 2,976 27,918 107,860 1,653 140,407 Construction, land and acquisition & development 39,469 5,898 1,102 1,216 47,685 Residential mortgage 636 5,872 21,796 25,346 53,650 Consumer installment 743 70,695 43,905 — 115,343 $ 64,078 $ 246,085 $ 303,698 $ 46,015 $ 659,876 The following table sets forth our fixed and adjustable-rate loans at December 31, 2023 that are contractually due after December 31, 2024.
Added
Due After December 31, 2025 Fixed Adjustable Total (In thousands) Commercial (secured by real estate - owner occupied) $ 141,758 $ 4,269 $ 146,027 Commercial (secured by real estate - non-owner occupied) 149,232 13,241 162,473 Commercial and industrial 140,285 5,250 145,535 Construction, land and acquisition & development 9,113 6,606 15,719 Residential mortgage 1-4 family 35,008 16,869 51,877 Consumer installment 119,676 103 119,779 Total loans $ 595,072 $ 46,338 $ 641,410 Commercial and Industrial Loans.
Removed
Due After December 31, 2024 Fixed Adjustable Total (In thousands) Commercial (secured by real estate - owner occupied) $ 137,470 $ 3,999 $ 141,469 Commercial (secured by real estate - non-owner occupied) 121,797 19,271 141,068 Commercial and industrial 133,695 3,736 137,431 Construction, land and acquisition & development 4,833 3,383 8,216 Residential mortgage 1-4 family 36,591 16,423 53,014 Consumer installment 114,102 498 114,600 Total loans $ 548,488 $ 47,310 $ 595,798 Commercial and Industrial Loans.
Added
On March 29, 2024, a federal court in the Northern District of Texas issued a preliminary injunction of the new CRA regulations, enjoining the federal banking agencies from enforcing the regulations against the plaintiff bank industry trade groups, and extending the regulations’ implementation dates day-for-day for each day the injunction is in place.
Removed
Treasury securities $ 999 4.48 % $ — — $ — — $ — — $ 999 $ 995 4.48 % Government agency mortgage-backed securities — — — — — — 795 3.51 % 795 719 3.51 % Corporate securities — — 16,770 6.10 % 15,687 6.43 % — 32,457 32,121 6.26 % Total $ 999 4.48 % $ 16,770 6.10 % $ 15,687 6.43 % $ 795 3.51 % $ 34,251 $ 33,835 6.15 % Sources of Funds General.
Added
In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices.
Removed
The Small Business Protection Act of 1996 eliminated the use of the reserve method of accounting for income taxes on bad debt reserves by savings institutions. For taxable years beginning after 1995, Affinity Bank has been subject to the same bad debt reserve rules as commercial banks.
Removed
It currently utilizes the specific charge-off method under Section 582(a) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Alternative Minimum Tax.
Removed
The registration under the Securities Act of 1933 of shares of common stock issued in Affinity Bancshares, Inc.’s public offering does not cover the resale of those shares. Shares of common stock purchased by persons who are not affiliates of Affinity Bancshares, Inc. may be resold without registration.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe engage in regular assessments of our infrastructure, software systems, and network architecture, using internal cybersecurity experts and third-party specialists. We also maintain a third-party risk management program designed to identify, assess, and manage risks, including cybersecurity risks, associated with external service providers and our supply chain.
Biggest changeWe also maintain a third-party risk management program designed to identify, assess, and manage risks, including cybersecurity risks, associated with external service providers and our supply chain. We also actively monitor our email gateways for malicious phishing email campaigns and monitor remote connections.
In addition, we leverage certain industry and government associations, third-party benchmarking, audits, and threat intelligence feeds to facilitate and promote program effectiveness. Our Chief Operations Officer along with members of the IT Committee, regularly 23 collaborate with peer banks, industry groups, and policymakers to discuss cybersecurity trends and issues and identify best practices.
In addition, we leverage certain industry and government associations, third-party benchmarking, audits, and threat intelligence feeds to facilitate and promote program effectiveness. Our Chief Operations Officer along with members of the IT Committee, regularly collaborate with peer banks, industry groups, and policymakers to discuss cybersecurity trends and issues and identify best practices.
In many instances we rely on third-party providers to facilitate providing products and services to our customers. As a part of our overall cybersecurity risk management framework and, in addition to assessing our own cybersecurity preparedness, we also have a process in place to manage cybersecurity risks associated with third-party service providers.
As a part of our overall cybersecurity risk management framework and, in addition to assessing our own cybersecurity preparedness, we also have a process in place to manage cybersecurity risks associated with third-party service providers.
We also actively monitor our email gateways for malicious phishing email campaigns and monitor remote connections. We leverage internal and external auditors and independent external partners to periodically review our processes, systems, and controls, including with respect to our information security program, to assess their design and operating effectiveness and make recommendations to strengthen our risk management program.
We leverage internal and external auditors and independent external partners to periodically review our processes, systems, and controls, including with respect to our information security program, to assess their design and operating effectiveness and make recommendations to strengthen our risk management program. In many instances we rely on third-party providers to facilitate providing products and services to our customers.
We also employ a variety of preventative and detective tools designed to monitor, block, and provide alerts regarding suspicious activity, as well as to report on suspected advanced persistent threats. We have established processes and systems designed to mitigate cyber risk, including regular and on-going education and training for employees, preparedness simulations and tabletop exercises, and recovery and resilience tests.
We also employ a variety of preventative and detective tools designed to monitor, block, and provide alerts regarding suspicious activity, as well as to report on suspected advanced persistent threats.
Added
We have established processes and systems designed to mitigate cyber risk, including regular and on-going education and training for employees, preparedness simulations and tabletop exercises, and recovery 23 and resilience tests. We engage in regular assessments of our infrastructure, software systems, and network architecture, using internal cybersecurity experts and third-party specialists.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Pr operties As of December 31, 2023, the net book value of our office properties was $2.0 million, and the net book value of our furniture, fixtures and equipment was $1.2 million. Our properties include our main office and branch office in Covington and leased 24 offices in Atlanta, Alpharetta, and Monroe.
Biggest changeITEM 2. Pr operties As of December 31, 2024, the net book value of our office properties and land was $2.2 million, and the net book value of our furniture, fixtures and equipment was $814,000. Our properties include our main office and branch office in Covington and leased offices in Atlanta, Alpharetta, and Monroe.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. ITEM 4. Mine Safety Disclosures Not applicable PART II
Biggest changeWe are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. 24 ITEM 4. Mine Safety Disclosures Not applicable PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+1 added−1 removed4 unchanged
Biggest changeMarket for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Capital Market under the symbol “AFBI.” As of March 19, 2024 we had 306 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms), and 6,416,628 shares of common stock outstanding.
Biggest changeMarket for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Capital Market under the symbol “AFBI.” As of March 19, 2024 we had 291 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms), and 6,387,329 shares of common stock outstanding.
Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Federal Reserve Board and the Office of the Comptroller of the Currency, may be paid in addition to, or in lieu of, regular cash dividends. There were no sales of unregistered securities during the quarter ended December 31, 2023.
Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Federal Reserve Board and the Office of the Comptroller of the Currency, may be paid in addition to, or in lieu of, regular cash dividends. There were no sales of unregistered securities during the quarter ended December 31, 2024.
Removed
Shares of the Company’s common stock totaling 21,034 were repurchased during the quarter ended December 31, 2023 as outlined below: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs (1) October 1, 2023 through October 31, 2023 16,652 $ 14.49 16,652 70,345 November 1, 2023 through November 30, 2023 4,382 14.36 4,382 65,963 December 1, 2023 through December 31, 2023 — — — 65,963 21,034 $ 14.46 21,034 65,963 25 ITEM 6. [ R eserved] 26
Added
There were no shares of the Company’s common stock repurchased during the quarter ended December 31, 2024. ITEM 6. [ R eserved] 25

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeLoan fees are included in the interest income computations presented below, but such amounts were not material. 28 For the Year Ended December 31, 2023 2022 Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Dollars in thousands) Interest-earning assets: Loans $ 660,045 $ 35,422 5.37 % $ 624,908 $ 30,045 4.81 % Investment securities held-to-maturity 33,850 2,078 6.14 % 2,220 130 5.86 % Investment securities available-for-sale 49,024 1,772 3.61 % 45,594 1,150 2.52 % Interest-earning deposits and federal funds 65,333 3,236 4.95 % 45,674 771 1.69 % Other investments 3,014 192 6.37 % 1,027 38 3.70 % Total interest-earning assets 811,266 42,700 5.26 % 719,423 32,134 4.47 % Non-interest-earning assets 51,987 51,397 Total assets $ 863,253 $ 770,820 Interest-bearing liabilities: Interest-bearing checking accounts $ 92,030 $ 271 0.29 % $ 96,892 $ 176 0.18 % Money market accounts 140,630 3,542 2.52 % 154,237 752 0.49 % Savings accounts 85,555 2,238 2.62 % 89,015 856 0.96 % Certificates of deposit 211,285 8,042 3.81 % 97,948 1,449 1.48 % Total interest-bearing deposits 529,500 14,093 2.66 % 438,092 3,233 0.74 % FHLB advances and other borrowings 32,808 1,409 4.29 % 9,887 (854 ) (8.64 )% Total interest-bearing liabilities 562,308 15,502 2.76 % 447,979 2,379 0.53 % Non-interest-bearing liabilities 182,144 204,842 Total liabilities 744,452 652,821 Total stockholders' equity 118,801 117,999 Total liabilities and stockholders' equity $ 863,253 $ 770,820 Net interest rate spread 2.50 % 3.94 % Net interest income $ 27,198 $ 29,755 Net interest margin 3.35 % 4.14 % Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
Biggest changeFor 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 % Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
Management determines the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses.
Management determines the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses.
Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors.
Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors.
To the best of our knowledge, we have recorded all credit losses that are both probable and reasonable to estimate at December 31, 2023. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for credit losses.
To the best of our knowledge, we have recorded all credit losses that are both probable and reasonable to estimate at December 31, 2024. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for credit losses.
There can be no assurance that future events, such as court decisions or positions of federal and state taxing authorities, will not differ from management’s current assessment, the impact of which could be significant to the results of operations and reported earnings. 27 The Company files a consolidated federal and a state income tax return.
There can be no assurance that future 26 events, such as court decisions or positions of federal and state taxing authorities, will not differ from management’s current assessment, the impact of which could be significant to the results of operations and reported earnings. The Company files a consolidated federal and a state income tax return.
At December 31, 2023, we exceeded all of our regulatory capital requirements, and we were categorized as well capitalized at December 31, 2023 and 2022. Management is not aware of any conditions or events since the most recent notification that would change our category. Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Commitments.
At December 31, 2024, we exceeded all of our regulatory capital requirements, and we were categorized as well capitalized at December 31, 2024 and 2023. Management is not aware of any conditions or events since the most recent notification that would change our category. Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Commitments .
For the majority of loans and leases, the ACL is calculated using a discounted cash flow methodology applied at a loan level with a one-year reasonable and supportable forecast period and a two-year straight-line reversion period. Management believes the allowance for credit losses was appropriate at December 31, 2023 and 2022.
For the majority of loans and leases, the ACL is calculated using a discounted cash flow methodology applied at a loan level with a one-year reasonable and supportable forecast period and a two-year straight-line reversion period. Management believes the allowance for credit losses was appropriate at December 31, 2024 and 2023.
For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been 29 allocated proportionately based on the changes due to rate and the changes due to volume. No out-of-period item adjustments have been included in the following table.
For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been 28 allocated proportionately based on the changes due to rate and the changes due to volume. No out-of-period item adjustments have been included in the following table.
Net cash provided by financing activities, which consists primarily of activity in deposit accounts and proceeds from or repayments of borrowings, was $44.0 million for the year ended December 31, 2023, compared to net cash provided by financing activities of $701,000 for the year ended December 31, 2022. 33 We are committed to maintaining a strong liquidity position.
Net cash provided by financing activities, which consists primarily of activity in deposit accounts and proceeds from or repayments of borrowings, was $17.9 million for the year ended December 31, 2024, compared to net cash provided by financing activities of $44.0 for the year ended December 31, 2023. We are committed to maintaining a strong liquidity position.
Such commitments are subject to the same credit policies and approval process according to loans we make. At December 31, 2023, we had outstanding commitments to originate loans of $80.0 million. We anticipate that we will have sufficient funds available to meet our current lending commitments.
Such commitments are subject to the same credit policies and approval process according to loans we make. At December 31, 2024, we had outstanding commitments to originate loans of $91.2 million. We anticipate that we will have sufficient funds available to meet our current lending commitments.
After an evaluation of these factors, we recorded a recovery for credit losses of $42,000 for the year ended December 31, 2023, compared to a provision for credit losses of $704,000 for the year ended December 31, 2022. Our allowance for credit losses was $8.9 million at December 31, 2023 compared to $9.3 million at December 31, 2022.
After an evaluation of these factors, we recorded a provision for credit losses of $438,000 for the year ended December 31, 2024, compared to a recovery for credit losses of $42,000 for the year ended December 31, 2023. Our allowance for credit losses was $8.5 million at December 31, 2024 compared to $8.9 million at December 31, 2023.
Time deposits that are scheduled to mature in less than one year from December 31, 2023 totaled $79.8 million. Management expects that a substantial portion of the maturing time deposits will be renewed.
Time deposits that are scheduled to mature in less than one year from December 31, 2024 totaled $123.9 million. Management expects that a substantial portion of the maturing time deposits will be renewed.
Our net interest margin was 3.35% for the year ended December 31, 2023 compared to 4.14% for the year ended December 31, 2022. Provisions for Credit Losses.
Our net interest margin was 3.54% for the year ended December 31, 2024 compared to 3.35% for the year ended December 31, 2023. Provisions for Credit Losses.
Interest income on interest-earning deposits and federal funds increased $2.5 million to $3.2 million for the year ended December 31, 2023 from $771,000 for the year ended December 31, 2022.
Interest income on interest-earning deposits and federal funds decreased $777,000 to $2.5 million for the year ended December 31, 2024 from $3.2 million for the year ended December 31, 2023.
At December 31, 2023, we had a $64.0 million line of credit with the Federal Home Loan Bank of Atlanta with $40.0 million in borrowings and a $12.5 million letter of credit outstanding which is used to collateralize public deposits.
We also have the ability to borrow from the Federal Home Loan Bank of Atlanta. At December 31, 2024, we had a $40.0 million line of credit with the Federal Home Loan Bank of Atlanta with $54.0 million in borrowings and a $12.5 million letter of credit outstanding which is used to collateralize public deposits.
Our average balance of loans increased $35.1 million, or 5.6%, to $660.0 million for the year ended December 31, 2023 from $624.9 million for the year ended December 31, 2022, as we continued to acquire talent to assist with our strategic initiatives to both increase and diversify the loan portfolio.
Our average balance of loans increased $27.4 million, or 4.2%, to $687.5 million for the year ended December 31, 2024 from $660.0 million for the year ended December 31, 2023, as we continued to acquire talent to assist with our strategic initiatives to both increase and diversify the loan portfolio.
Our average balance of securities increased $35.1 million, or 73.3%, to $82.9 million for the year ended December 31, 2023 from $47.8 million for the year ended December 31, 2022. The average rate earned on securities available for sale and held to maturity increased 197 basis points during 2023, to 4.65% from 2.68%.
Our average balance of securities decreased $2.7 million, or 3.2%, to $80.2 million for the year ended December 31, 2024 from $82.9 million for the year ended December 31, 2023. The average rate earned on securities available for sale and held to maturity increased eight basis points during 2024, to 4.73% from 4.65%.
Net interest income before provision for credit losses decreased by $2.6 million, or 8.6%, to $27.2 million for the year ended December 31, 2023 from $29.8 million for the year ended December 31, 2022.
Net Interest Income. Net interest income before provision for credit losses increased by $2.0 million, or 7.2%, to $29.2 million for the year ended December 31, 2024 from $27.2 million for the year ended December 31, 2023.
Non-owner occupied commercial real estate loans increased $9.4 million, or 6.9%, to $145.1 million at December 31, 2023 from $135.7 million at December 31, 2022, and consumer loans increased $4.1 million, or 3.7%, to $115.3 million at December 31, 2023 from $111.3 million at December 31, 2022.
Non-owner occupied commercial real estate loans increased $21.6 million, or 14.9%, to $166.7 million at December 31, 2024 from $145.1 million at December 31, 2023, and consumer loans increased $5.2 million, or 4.6%, to $120.6 million at December 31, 2024 from $115.3 million at December 31, 2023.
The allowance for credit losses to total loans was 1.35% at December 31, 2023 compared to 1.44% at December 31, 2022, while the allowance for credit losses to non-performing loans was 120.1% at December 31, 2023 compared to 138.8% at December 31, 2022. We had charge-offs of $514,000 and recoveries of $110,000 during the year ended December 31, 2023.
The allowance for credit losses to total loans was 1.19% at December 31, 2024 compared to 1.35% at December 31, 2023, while the allowance for credit losses to non-performing loans was 177.9% at December 31, 2024 compared to 120.1% at December 31, 2023. We had charge-offs of $741,000 and recoveries of $91,000 during the year ended December 31, 2024.
The increase in interest income on loans and associated yield was a result of increases in market rates.
The increase in interest income on loans and associated yield was a result of increases in volume with new loans being made at higher market rates.
In addition, construction loans increased $10.5 million, or 28.3% to $47.7 million at December 31, 2023 from $37.2 million at December 31, 2022, as we have seen continued success with our strategic initiative to increase construction lending to continue to diversify our loan portfolio .
In addition, construction loans increased $19.9 million, or 41.8% to $67.6 million at December 31, 2024 from $47.7 million at December 31, 2023, as we have seen continued success with our strategic initiative to increase construction lending to continue to diversify our loan portfolio .
The decrease in income tax expense was due to decreased income before income taxes in 2023. Management of Market Risk General . Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates.
Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates.
Comparison of Financial Condition at December 31, 2023 and December 31, 2022 Total assets increased $52.0 million, or 6.6%, to $843.3 million at December 31, 2023 from $791.3 million at December 31, 2022.
Comparison of Financial Condition at December 31, 2024 and December 31, 2023 Total assets increased $23.6 million, or 2.8%, to $866.8 million at December 31, 2024 from $843.3 million at December 31, 2023.
Interest income on securities available for sale and held to maturity increased $2.6 million to $3.9 million for the year ended December 31, 2023 from $1.3 million for the year ended December 31, 2022.
Interest income on securities available for sale and held to maturity decreased $54,000 to $3.8 million for the year ended December 31, 2024 from $3.9 million for the year ended December 31, 2023.
We also recognized increases in interest expense on savings accounts ($1.4 million, or 161.4%) and money market accounts ($2.8 million, or 371.0%), as increases in market interest rates increased the rates we paid on these types of deposits by 166 basis points to 2.62%, and 203 basis points to 2.52%, respectively.
We also recognized increases in interest expense on money market accounts ($1.2 million, or 34.4%), as increases in market interest rates increased the rates we paid on these types of deposits by 72 basis points to 3.24%.
Interest expense on deposits increased $10.9 million, or 335.9%, to $14.1 million for the year ended December 31, 2023 from $3.2 million for the year ended December 31, 2022. We recorded increases in interest expense on all deposits products.
Interest expense on deposits increased $2.4 million, or 16.8%, to $16.5 million for the year ended December 31, 2024 from $14.1 million for the year ended December 31, 2023. We recorded increases in interest expense on all deposits products, except savings accounts.
Interest expense increased $13.1 million, or 551.6%, to $15.5 million for the year ended December 31, 2023 compared to $2.4 million for the year ended December 31, 2022, due to an increase in interest expense on deposits and Federal Home Loan Bank advances and other borrowings.
Interest expense increased $3.3 million, or 21.3%, to $18.8 million for the year ended December 31, 2024 compared to $15.5 million for the year ended December 31, 2023, due to increases in interest expense on deposits and Federal Home Loan Bank advances and other borrowings.
The increase was due to a $5.3 million increase in interest income on loans, a $2.7 million increase in income on investment securities, and a $2.5 million increase in interest income on interest-earning deposits.
The increase was due to a $5.9 million increase in interest income on loans, and a $123,000 increase in income on investment securities, offset by a $777,000 decrease in interest income on interest-earning deposits.
Overview Total assets increased $52.0 million, or 6.6%, to $843.3 million at December 31, 2023 from $791.3 million at December 31, 2022. The increase was due primarily to increases in net loans ($14.0 million, or 2.2%), cash and cash equivalents of ($23.7 million, or 90.0%) and investments (available-for-sale, held-to-maturity, and other) ($14.4 million or 19.5%).
Overview Total assets increased $23.6 million, or 2.8%, to $866.8 million at December 31, 2024 from $843.3 million at December 31, 2023. The increase was due primarily to an increase in net loans ($54.7 million, or 8.4%), offset by decreases in cash and cash equivalents ($8.6 million, or 17.2%) and investments (available-for-sale, held-to-maturity, and other) ($18.2 million or 20.7%).
Interest expense increased $13.1 million, or 551.6%, to $15.5 million for the year ended December 31, 2023 compared to $2.4 million for the year ended December 31, 2022, due to increases in all interest expense categories.
Interest expense increased $3.3 million, or 21.3%, to $18.8 million for the year ended December 31, 2024 compared to $15.5 million for the year ended December 31, 2023, due to increases in all interest expense categories.
Interest income increased $10.6 million, or 32.9%, to $42.7 million for the year ended December 31, 2023 from $32.1 million for the year ended December 31, 2022. Our average yield on loans increased 56 basis points to 5.37% for the year ended December 31, 2023 from 4.81% for the year ended December 31, 2022.
Interest income increased $5.3 million, or 12.3%, to $48.0 million for the year ended December 31, 2024 from $42.7 million for the year ended December 31, 2023. Our average yield on loans increased 64 basis points to 6.01% for the year ended December 31, 2024 from 5.37% for the year ended December 31, 2023.
Our average net interest-earning assets decreased by $22.5 million, or 8.3%, to $249.0 million for the year ended December 31, 2023 from $271.4 million for the year ended December 31, 2022, while our net interest rate spread decreased by 144 basis points to 2.50% for the year ended December 31, 2023 from 3.94% for the year ended December 31, 2022, reflecting a 223 basis point decrease in the average rate paid on interest-bearing liabilities offset by an increase of 79 basis points increase on interest-earning assets.
Our average interest-earning assets increased by $11.6 million, or 1.4%, to $822.8 million for the year ended December 31, 2024 from $811.3 million for the year ended December 31, 2023, while our net interest rate spread increased by 9 basis points to 2.59% for the year ended December 31, 2024 from 2.50% for the year ended December 31, 2023, reflecting a 57 basis point increase in the average rate earned on interest-earning assets offset by an increase of 48 basis points in the rate paid on interest-bearing liabilities.
Net cash used in investing activities was $28.1 million and $93.7 million for the years ended December 31, 2023 and 2022, respectively.
Net cash provided by operating activities was $6.8 million and $7.9 million for the years ended December 31, 32 2024 and 2023, respectively. Net cash used in investing activities was $33.3 million and $28.1 million for the years ended December 31, 2024 and 2023, respectively.
The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period. Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $7.9 million and $7.6 million for the years ended December 31, 2023 and 2022, respectively.
The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period. Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
Interest expense on certificate of deposits increased $6.6 million, or 455.0%, to $8.0 million for the year ended December 31, 2023 from $1.4 million for the year ended December 31, 2022.
Interest expense on certificates of deposit increased $1.1 million, or 13.9%, to $9.2 million for the year ended December 31, 2024 from $8.0 million for the year ended December 31, 2023.
The table below sets forth, as of December 31, 2023, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.
An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below. 31 The table below sets forth, as of December 31, 2024, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. Subsequent Event On February 27, 2025, the Company declared the payment of a special cash dividend.
One- to four-family residential real estate loans increased $2.3 million, or 4.5%, to $53.7 million at December 31, 2023 from $51.3 million at December 31, 2022.
One-to-four family residential real estate loans increased $492,000, or 0.9%, to $54.1 million at December 31, 2024 from $53.7 million at December 31, 2023. Commercial and industrial loans increased $7.7 million, or 5.5%, to $148.2 million at December 31, 2024 from $140.4 million at December 31, 2023 .
Interest income increased $10.6 million, or 32.9%, to $42.7 million for the year ended December 31, 2023 from $32.1 million for the year ended December 31, 2022.
Interest income increased $5.3 million, or 12.3%, to $48.0 million for the year ended December 31, 2024 from $42.7 million for the year ended December 31, 2023.
We also have a line of $67.4 million with the Federal Reserve Bank of Atlanta Discount Window (the "Discount Window") secured by $96.1 million in loans. No amount was outstanding on the Discount Window line at December 31, 2023.
In addition, at December 31, 2024, we had a $32.5 million in unsecured federal funds lines of credit. Nothing was outstanding on these lines of credit at December 31, 2024. We also have a line of $65.1 million with the Federal Reserve Bank of Atlanta Discount Window (the "Discount Window") secured by $84.0 million in loans.
The increase was due primarily to increases in net loans ($14.0 million, or 2.2%), cash and cash equivalents of ($23.7 million, or 90.0%) and investments (available-for-sale, held-to-maturity, and other) ($14.4 million or 19.5%).
The increase was due primarily to an increase in net loans ($54.7 million, or 8.4%), that was partially offset by decreases in cash and cash equivalents ($8.6 million, or 17.2%) and investments (available-for-sale, held-to-maturity, and other) ($18.2 million or 20.7%).
Net income decreased $686,000, or 9.6%, to $6.4 million for the year ended December 31, 2023, compared to $7.1 million for the year ended December 31, 2022. An increase in interest expense was offset by an increase in interest income, and decreases in provision for credit loss and noninterest expenses. Interest Income.
Net income decreased $1.0 million, or 15.6%, to $5.4 million for the year ended December 31, 2024, compared to $6.4 million for the year ended December 31, 2023. Increases in interest expense and noninterest expense and a decrease in noninterest income were offset by increases in interest income. Interest Income.
Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +400 $ 29,307 (2.75 )% +200 29,888 (0.82 )% Level 30,136 — -200 29,291 (2.80 )% -400 27,425 ` (1) Assumes an immediate uniform change in interest rates at all maturities.
Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +400 $ 29,624 (6.87 )% +200 30,801 (3.17 )% Level 31,810 — -200 31,410 (1.26 )% -400 30,076 (5.45 )% (1) Assumes an immediate uniform change in interest rates at all maturities.
Average Balance Sheets The following table sets 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.
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.
Certificates of deposit increased $95.0 million, or 75.4%, to $221.0 million at December 31, 2023 from $126.0 million at December 31, 2022. The growth in certificate of deposits is attributed to our enhancing liquidity through obtaining brokered deposits and the customer shift towards to longer-term instruments as market interest rates have increased.
The growth in certificates of deposit is attributed to our enhancing liquidity through obtaining brokered deposits and the customer shift towards longer-term instruments as market interest rates have increased. These increases were offset by decreases in non-interest-bearing checking ($3.3 million , or 2.1%), and interest-bearing checking ($11.5 million or 13.5%), accounts.
Noninterest expenses information is as follows. 31 Year Ended December 31, Change 2023 2022 Amount Percent (Dollars in thousands) Salaries and employee benefits $ 12,252 $ 12,221 $ 31 0.3 % Occupancy 2,503 2,523 (20 ) (0.8 )% Data processing 2,025 1,947 78 4.0 % FHLB prepayment penalties — 647 (647 ) (100.0 )% Other 4,538 4,788 (250 ) (5.2 )% Total non-interest expenses $ 21,318 $ 22,126 $ (808 ) (3.7 )% Noninterest expenses decreased $808,000, or 3.7%, to $21.3 million for the year ended December 31, 2023, from $22.1 million for the year ended December 31, 2022.
Noninterest expenses information is as follows. 30 Year Ended December 31, Change 2024 2023 Amount Percent (Dollars in thousands) Salaries and employee benefits $ 13,126 $ 12,252 $ 874 7.1 % Occupancy 2,451 2,503 (52 ) (2.1 )% Data processing 2,087 2,025 62 3.1 % Professional fees 2,068 621 1,447 232.9 % Other 4,029 3,917 112 2.9 % Total non-interest expenses $ 23,761 $ 21,318 $ 2,443 11.5 % Noninterest expenses increased $2.4 million, or 11.5%, to $23.8 million for the year ended December 31, 2024, from $21.3 million for the year ended December 31, 2023, due to the recently terminated merger transaction.
Net income decreased $686,000, or 9.6%, to $6.4 million for the year ended December 31, 2023, compared to $7.1 million for the year ended December 31, 2022. The decrease was due to increases in deposit costs offset by an increase in interest income and decreases in noninterest expenses and provision for credit loss.
The decrease was due to increases in deposit costs, noninterest expenses, and the provision for credit loss and a decrease in noninterest income offset by an increase in interest income and a decrease in income tax expense.
Noninterest expenses decreased $808,000, or 3.7%, to $21.3 million for the year ended December 31, 2023, from $22.1 million for the year ended December 31, 2022.
Noninterest expenses increased $2.4 million, or 11.5%, to $23.8 million for the year ended December 31, 2024, from $21.3 million for the year ended December 31, 2023. Income tax expense decreased $399,000, or 20.6%, to $1.5 million for the year ended December 31, 2024 compared to $1.9 million for the year ended December 31, 2023.
Cash and cash equivalents increased $23.7 million, or 90.0% to $50.0 million at December 31, 2023 from $26.3 million at December 31, 2022, due to increases in deposits. Loans increased $13.6 million, or 2.1%, to $659.9 million at December 31, 2023 from $646.2 million at December 31, 2022.
Cash and cash equivalents decreased $8.6 million, or 17.2% to $41.4 million at December 31, 2024 from $50.0 million at December 31, 2023, due to loan funding at year end. Gross loans increased $54.2 million, or 8.2%, to $714.1 million at December 31, 2024 from $659.9 million at December 31, 2023.
We experienced a decrease in commercial and industrial loans of $7.4 million, or 5.0%, to $140.4 million at December 31, 2023 from $147.8 million at December 31, 2022 and decrease in owner occupied commercial real estate loans of $5.3 million, or 3.3% to $157.7 million at December 31, 2023 from $163.0 million at December 31, 2022.
We recorded a decrease in owner occupied commercial real estate loans of $768,000, or 0.5% to $156.9 million at December 31, 2024 from $157.7 million at December 31, 2023. Securities held-to-maturity decreased to $27.3 million at December 31, 2024, from $34.2 million at December 31, 2023, as securities were called throughout the year.
Noninterest income increased $64,000, or 2.6%, to $2.5 million for the year ended December 31, 2023 from $2.4 million for the year ended December 31, 2022. The increase resulted primarily from an increase in other noninterest income of $55,000, or 7.0%, to $846,000 for the year ended December 31, 2023 from $791,000 for the year ended December 31, 2022.
Noninterest income decreased $451,000, or 18.3%, to $2.0 million for the year ended December 31, 2024 from $2.5 million for the year ended December 31, 2023. The decrease resulted primarily from an increase in loss on sale of securities of $385,000 partially offset by gain on sale of other real estate of $135,000. Noninterest Expenses.
Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Atlanta.
We seek to maintain a liquidity ratio of 12.0% or greater. At December 31, 2024 and 2023, we were in compliance with these guidelines. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities.
The increase in interest income on interest-earning deposits was due to a 326 basis point increase in yield, while the average balance of interest-earning deposits increased $19.7 million, or 43.0%, to $65.3 million for the year ended December 31, 2023 from $45.7 million for the year ended December 31, 2022. 30 Interest Expense.
The average balance of interest-earning deposits decreased $15.9 million, or 24.4%, to $49.4 million for the year ended December 31, 2024 from $65.3 million for the year ended December 31, 2023. 29 Interest Expense.
We had $40.0 million of Federal Home Loan Bank advances at December 31, 2023, compared to $10.0 million of Federal Home Loan Bank advances and $25,000 in Federal Funds Purchased at December 31, 2022. Borrowings were increased during the year ended December 31, 2023 as we evaluated our borrowing needs to enhance the liquidity.
Borrowings were increased during the year ended December 31, 2024 as we evaluated our borrowing needs to enhance liquidity. Stockholders’ equity increased $7.6 million or 6.3%, to $129.1 million at December 31, 2024 from $121.5 million at December 31, 2023.
Year Ended December 31, 2023 vs. 2022 Increase (Decrease) Due to Total Increase Volume Rate (Decrease) (In thousands) Interest-earning assets: Loans $ 4,866 $ 511 $ 5,377 Investment securities held-to-maturity 1,942 6 1,948 Investment securities available-for-sale 537 85 622 Interest-earning deposits and federal funds 2,224 241 2,465 Other investments 148 6 154 Total interest-earning assets 9,717 849 10,566 Interest-bearing liabilities: Interest-bearing checking accounts (110 ) 205 95 Market rate checking accounts (2,416 ) 5,206 2,790 Savings accounts (1,028 ) 2,410 1,382 Certificates of deposit 6,319 274 6,593 Total interest-bearing deposits 2,765 8,095 10,860 FHLB advances 1,910 353 2,263 Total interest-bearing liabilities 4,675 8,448 13,123 Change in net interest income $ 5,042 $ (7,599 ) $ (2,557 ) Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 General.
Year Ended December 31, 2024 vs. 2023 Increase (Decrease) Due to Total Increase Volume Rate (Decrease) (In thousands) Interest-earning assets: Loans $ 5,099 $ 828 $ 5,927 Investment securities held-to-maturity (78 ) 18 (60 ) Investment securities available-for-sale (116 ) 122 6 Interest-earning deposits and federal funds (802 ) 25 (777 ) Other investments 178 (1 ) 177 Total interest-earning assets 4,281 992 5,273 Interest-bearing liabilities: Interest-bearing checking accounts (199 ) 376 177 Market rate checking accounts 1,046 172 1,218 Savings accounts (494 ) 347 (147 ) Certificates of deposit 977 138 1,115 Total interest-bearing deposits 1,330 1,033 2,363 FHLB advances and other borrowings 972 (30 ) 942 Total interest-bearing liabilities 2,302 1,003 3,305 Change in net interest income $ 1,979 $ (11 ) $ 1,968 Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 General.
A basis point equals one-hundredth 32 of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.
A basis point equals one-hundredth of one percent, and 100 basis points equals one percent.
Securities available-for-sale increased $2.3 million to $48.6 million at December 31, 2023 from $46.2 million at December 31, 2022. Total deposits increased $17.3 million, or 2.6%, to $674.4 million at December 31, 2023 from $657.2 million at December 31, 2022.
Total deposits decreased $962,000, or 0.1%, to $673.5 million at December 31, 2024 from $674.4 million at December 31, 2023.
Removed
Securities held-to-maturity increased to $34.2 million at December 31, 2023, from $26.5 million at December 31, 2022, as we began to classify new purchases as held-to-maturity and utilized a portion of our excess liquidity to invest in securities in an effort to increase yield.
Added
Net income decreased $1.0 million, or 15.6%, to $5.4 million for the year ended December 31, 2024, compared to $6.4 million for the year ended December 31, 2023.
Removed
These increases were offset by decreases in non-interest-bearing checking, interest-bearing checking, money market and savings accounts. The loan-to-deposit ratio at December 31, 2023 was 97.8%, as compared to 98.3% at December 31, 2022.
Added
Securities available-for-sale decreased $12.1 million to $36.5 million at December 31, 2024 from $48.6 million at December 31, 2023. The decreases in securities available-for-sale and held-to-maturity related to $10.9 million in paydown of securities and sales of $8.8 million in 2024 with no purchases to offset the decreases.
Removed
Stockholders’ equity increased $4.4 million or 3.8%, to $121.5 million at December 31, 2023 from $117.1 million at December 31, 2022. We recognized net income of $6.4 million for the year ended December 31, 2023, partially offset by the repurchase of 235,934 shares of our common stock totaling $3.3 million with an average price per share of $13.92.
Added
Certificates of deposit increased $2.5 million, or 1.1%, to $223.4 million at December 31, 2024 from $221.0 million at December 31, 2023, money market accounts increased $10.0 million or 7.4% to $148.8 million at December 31, 2024 from $138.7 million at December 31, 2023, and savings accounts increased $1.3 million , or 1.7% to $76.1 million at December 31, 2024 from $74.8 million at December 31, 2023.
Removed
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.
Added
The loan-to-deposit ratio at December 31, 2024 was 106.0%, as compared to 97.8% at December 31, 2023. We had $54.0 million of Federal Home Loan Bank advances and $4.8 million outstanding under the Bank Term Funding Program at December 31, 2024, compared to $40.0 million of Federal Home Loan Bank advances at December 31, 2023.
Removed
Interest expense on borrowings increased to $1.4 million for the year ended December 31, 2023 compared to $(854,000) for the year ended December 31, 2022. During 2022, we repaid acquired Federal Home Loan Bank borrowings, recognizing $1.0 million in accretion from the fair value adjustments on acquired advances.
Added
We recognized net income of $5.4 million for the year ended December 31, 2024, change in accumulated other comprehensive loss of $620,000 and $1.5 million related to stock compensation and ESOP expenses. 27 Average Balance Sheets The following table sets forth average balance sheets, average yields and costs, and certain other information for the years indicated.
Removed
Prepayment penalties in the amount of $647,000 were also recognized with the repayment of these acquired advances for the year ended December 31, 2022. Net Interest Income.
Added
Loan fees are included in the interest income computations presented below, but such amounts were not material.
Removed
We recognized prepayment penalties on Federal Home Loan Bank advances during 2022 of $647,000. The decrease in other expenses, included decreases in advertising expenses and legal and accounting expenses offset by an increase in FDIC insurance expense. Income Tax Expense. We recorded income tax expense of $1.9 million and $2.2 million for the years ended December 31, 2023 and 2022.
Added
Interest expense on borrowings increased to $2.4 million for the year ended December 31, 2024 compared to $1.4 million for the year ended December 31, 2023. The average balance of borrowings increased $22.3 million to $55.1 million at December 31, 2024 compared to $32.8 million at December 31, 2023. Borrowing increases related to company's funding needs throughout the year.
Removed
In addition, at December 31, 2023, we had a $5.0 million unsecured federal funds line of credit, a $7.5 million unsecured federal funds line of credit and a $20.0 million unsecured federal funds line of credit. Nothing was outstanding on these lines of credit at December 31, 2023.
Added
Income Tax Expense. We recorded income tax expense of $1.5 million and $1.9 million for the years ended December 31, 2024 and 2023. The decrease in income tax expense was due to decreased income before income taxes in 2024. Management of Market Risk General .
Added
The estimated changes noted below are within Company's policy guidelines.
Added
The company utilizes the Sources and Uses of Liquidity Analysis as its primarily liquidity test to assess its ability to meet short-term and long-term funding needs on at least a monthly basis and more often when needed.
Added
We calculate our liquidity ratio as the sum of cash, short-term assets (generally securities with a remaining maturity of less than one year) and marketable assets (generally securities with a remaining maturity of greater than one year and are not pledged to liabilities) divided by the sum of net deposits (generally core deposits including time deposits both under and over $250,000), short-term liabilities (generally borrowings with a remaining maturity of one year or less) and volatile liabilities (generally brokered deposits and listing service deposits both under and over $250,000).
Added
No amount was outstanding on the Discount Window line at December 31, 2024. At December 31, 2024, there was $4.8 million outstanding secured by $4.8 million in securities under the Bank Term Funding Program, which expired March 11, 2024.
Added
The dividend of $1.50 per share will be paid on March 27, 2025 to stockholders of record as of March 13, 2025 . On March 7, 2025, the Company adopted a stock repurchase program. Under the repurchase program, the Company may repurchase up to 320,480 shares of its common stock, or approximately 5% of the current outstanding shares. 33

Other AFBI 10-K year-over-year comparisons