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What changed in Affinity Bancshares, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Affinity Bancshares, Inc.'s 2024 and 2025 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 2025 report.

+156 added−174 removedSource: 10-K (2026-03-20) vs 10-K (2025-03-21)

Top changes in Affinity Bancshares, Inc.'s 2025 10-K

156 paragraphs added · 174 removed · 150 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

74 edited+3 added−16 removed204 unchanged
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.
Biggest changeAt December 31, 2025 2024 (Dollars in thousands) Non-accrual loans: Commercial (secured by real estate - owner occupied) $ 1,878 $ 1,996 Commercial (secured by real estate - non-owner occupied) 126 152 Commercial and industrial 564 — Construction, land and acquisition & development 14 17 Residential mortgage 1-4 family 657 2,313 Consumer installment 331 299 Total non-accrual loans 3,570 4,777 Total non-performing assets $ 3,570 $ 4,777 Total non-performing loans to total loans 0.48 % 0.67 % Total non-performing assets to total assets 0.40 % 0.55 % Classified Assets .
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.
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 reciprocal 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.
The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or perpetual preferred stock, to provide opportunity for supervisory review and possible objection, if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or 22 repurchase occurred.
The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or perpetual preferred stock, to provide opportunity for supervisory review and possible objection, if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.
Affinity Bank’s operations are also subject to federal laws applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; • Truth in Savings Act; and 21 • rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Affinity Bank’s operations are also subject to federal laws applicable to credit transactions, such as the: • Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; 20 • Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; • Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; • Truth in Savings Act; and • rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
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.
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.
In addition, we receive funds from scheduled loan payments, investment maturities, loan prepayments, retained earnings and income on earning assets. While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. 14 Deposits.
In addition, we receive funds from scheduled loan payments, investment maturities, loan prepayments, retained earnings and income on earning assets. While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. Deposits.
Newton Federal Bank was originally chartered in 1928 as a Georgia-chartered mutual building and loan association under the name Newton County Building and Loan Association, and we continue to operate under the name “Newton Federal Bank, a Division of Affinity Bank” in Newton Federal Bank’s legacy market area. We converted to a national bank charter in September 2023.
Newton Federal Bank was originally chartered in 1928 as a Georgia-chartered mutual building and loan association under the name Newton County Building and Loan Association, and we continue to operate under the name “Newton Federal Bank, a Division of Affinity Bank” in Newton Federal Bank’s legacy market area. We converted to a national bank charter in 2023.
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 .
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. Capital Requirements .
The guidance also provides for prior consultation with supervisory staff for material increases in the amount of a holding company’s common stock dividend. The ability of a holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized.
The guidance also 21 provides for prior consultation with supervisory staff for material increases in the amount of a holding company’s common stock dividend. The ability of a holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized.
Formal enforcement action by the Office of the Comptroller of the Currency may range from the assessment of civil money penalties and the issuance of a capital directive or cease and desist order to removal of officers and/or directors of the institution and the appointment of a receiver or conservator.
Formal enforcement action by the Office of the Comptroller of the 18 Currency may range from the assessment of civil money penalties and the issuance of a capital directive or cease and desist order to removal of officers and/or directors of the institution and the appointment of a receiver or conservator.
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.
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.
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.
The following table sets forth the contractual maturities of our total loan portfolio at December 31, 2025. 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, 2024 and 2023 , 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, 2025 and 2024 , Affinity Bank was in compliance with the loans-to-one borrower limitations. 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.
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, 2025 and 2024, 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, 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.
All bank tax credits were utilized in 2021, so there are no bank tax credits remaining at December 31, 2025 and 2024. 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, 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.
At December 31, 2025, 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.
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.
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, 2025 and 2024, Affinity Bank had no Georgia net operating loss carryforwards. Bank Tax Credit.
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.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. 17 Affinity Bank did not opt in to the community bank leverage ratio framework. At December 31, 2025 and 2024, Affinity Bank’s capital exceeded all applicable requirements. Loans-to-One Borrower.
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.
We do not originate significant amounts of loans for sale, but we occasionally sell loans, primarily to generate fee income. At December 31, 2025, we had no loans held for sale.
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 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, 2025, we owned $250,000 of First National Bankers Bank stock and $2.8 million in Federal Reserve Bank stock.
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.
At December 31, 2025 and 2024, 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, 2025 and 2024, Affinity Bancshares, Inc. had no federal net operating loss carryforwards. 15 Capital Loss Carryovers.
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.
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.
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.
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, 2025, we had no loans held for sale, no loans in process, $893,000 of deferred loan fees, and $3.5 million in indirect auto dealer reserve costs.
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.
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, 2025 totaled $2.9 million, was originated in 2020 and is secured by all business assets.
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.
We have a specialized expertise in lending to dentists and dental practices, since 2002, with loans to the dental industry totaling $194.1 million, or 26.1% of our loan portfolio, as of December 31, 2025. Of this amount, 62% consisted of commercial business loans and 38% consisted of commercial real estate loans. 4 Loan Portfolio Composition.
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, 2025, based on the 15% limitation, Affinity Bank’s loans-to-one-borrower limit was approximately $16.1 million . On the same date, Affinity Bank had no borrowers with outstanding balances in excess of this amount.
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, 2025, our largest loan relationship with one borrower was $9.5 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.
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 December 31, 2025, we had $50.6 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 at both December 31, 2025 and 2024, respectively. The weighted average rate was 3.86% and 3.81% at December 31, 2025 and 2024, respectively.
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.
At December 31, 2025, our investment portfolio consisted of 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, 2025, we owned $3.2 million of Federal Home Loan Bank of Atlanta stock.
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.
At December 31, 2025, our largest commercial real estate loan totaled $9.52 million and is secured by a well-established, anchored, retail shopping center. At December 31, 2025, this loan was performing in accordance with its terms. We consider several factors in originating commercial real estate loans.
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.
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 $79.5 million in brokered certificates of deposit as of December 31, 2025.
The following table sets forth the maturity of these certificates as of December 31, 2024.
The following table sets forth the maturity of these certificates as of December 31, 2025.
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, 2025 2024 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 431 — — 1,117 97 — Consumer installment 259 — — 526 76 — Total $ 690 $ $ — $ 2,014 $ 493 $ — 10 Non-Performing Assets.
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.
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, 2025, we had $8.9 million of whole loans that we purchased.
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.
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.
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.
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, 2025, $17.6 million, or 36.7%, of our one- to four-family residential real estate loans were adjustable-rate loans.
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 .
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 $117.9 million at December 31, 2025 .
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.
At December 31, 2025, we had $48.0 million of loans secured by one- to four-family real estate, representing 6.5% 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, 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.
At December 31, 2025, commercial and industrial loans were $146.5 million, or 19.7% 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.
Institutions with capital complying with the ratio and otherwise meeting the specified requirements and electing the alternative framework are considered to comply with the applicable regulatory capital requirements, including the risk-based requirements. The community bank leverage ratio was established at 9% Tier 1 capital to total average assets, effective January 1, 2020.
Institutions with capital complying with the ratio and otherwise meeting the specified requirements and electing the alternative framework are considered to comply with the applicable regulatory capital requirements, including the risk-based requirements. The community bank leverage ratio is currently 9% Tier 1 capital to total average assets.
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.
As of June 30, 2025 (the most recent date for which data is available), our market share of deposits represented 19.99% of Federal Deposit Insurance Corporation-insured deposits in Newton County and 1.80% in Cobb County, ranking us first and 13th, respectively, in market share of deposits out of eight institutions operating in Newton County and 25 institutions operating in Cobb County.
All dealerships that submit retail installment contracts to ABDS sign a separate retail dealer agreement that makes representations and warranties to ABDS with respect to our security interest and the accuracy and validity of all information provided during the credit application and contract process.
Applications that are approved and counter-offered are submitted to ABDS for verification and funding. All dealerships that submit retail installment contracts to ABDS sign a separate retail dealer agreement that makes representations and warranties to ABDS with respect to our security interest and the accuracy and validity of all information provided during the credit application and contract process.
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. The ACL-loans is measured on a collective basis when similar risk characteristics exist.
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.
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, 2025, we had $339.8 million in commercial real estate loans, representing 45.8% of our total loan portfolio. At that date, $163.2 million, or 22.0% of our commercial real estate loans, were secured by owner-occupied properties. This amount included $73.1 million of dental and medical loans, $18.1 million of church loans and $10.9 million of convenience store loans.
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.
Years Ended December 31, 2025 2024 (Dollars in thousands) Allowance at beginning of period $ 8,496 $ 8,921 Provision for credit losses 270 225 Charge offs: Commercial (secured by real estate - owner occupied) — (164 ) Commercial (secured by real estate - non-owner occupied) — — Commercial and industrial — — Construction, land and acquisition & development — — Residential mortgage 1-4 family (17 ) (50 ) Consumer installment (316 ) (527 ) Total charge-offs (333 ) (741 ) Recoveries: Commercial (secured by real estate - owner occupied) — — Commercial (secured by real estate - non-owner occupied) — — Commercial and industrial 3 9 Construction, land and acquisition & development — — Residential mortgage 1-4 family 464 — Consumer installment 94 82 Total recoveries 561 91 Net recoveries (charge-offs) 228 (650 ) Allowance at end of period $ 8,994 $ 8,496 Allowance to non-performing loans 251.94 % 177.86 % Allowance to total loans outstanding at the end of the period 1.21 % 1.19 % Net recoveries (charge-offs) to average loans outstanding during the period 0.03 % (0.09 )% The following table sets forth information with respect to charge-offs and recoveries by loan category.
We believe that we have developed products and services that will meet the financial needs of our current and future customer base, and we continually plan to enhance our products and services to meet the changing needs of customers.
In addition, we gather deposits nationwide through our virtual bank, FitnessBank. We believe that we have developed products and services that will meet the financial needs of our current and future customer base, and we continually plan to enhance our products and services to meet the changing needs of customers.
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, 2025, our residential construction loans totaled $72.6 million, representing 9.8% of our total loan portfolio, and included $5.9 million of land and lot loans. At December 31, 2025 there was $4.6 million of single-family construction loans to individuals and $46.8 million to contractors and builders.
The previously referenced final rule establishing an elective “community bank leverage ratio” regulatory capital framework provides that a qualifying institution whose capital exceeds the community bank leverage ratio and opts to use that framework will be considered “well-capitalized” for purposes of prompt corrective action.
The previously referenced final rule establishing an elective “community bank leverage ratio” regulatory capital framework provides that a qualifying institution whose capital exceeds the community bank leverage ratio and opts to use that framework will be considered “well-capitalized” for purposes of prompt corrective action. 19 At December 31, 2025 and 2024, Affinity Bank met the criteria for being considered “well capitalized.” Insurance of Deposit Accounts.
These standards relate to, among other things, internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, compensation and other operational and managerial standards as the agency deems appropriate.
Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions. These standards relate to, among other things, internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, compensation and other operational and managerial standards as the agency deems appropriate.
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.
In addition, we had $15.4 million of commercial construction and development loans as of December 31, 2025, which included $2.9 million of commercial development and land loans.
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.
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.
As an integral part of their examination process, the Office of the Comptroller of the Currency will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.
The ACL-loans is measured on a collective basis when similar risk characteristics exist. 11 As an integral part of their examination process, the Office of the Comptroller of the Currency will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.
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, 2025, Affinity Bancshares, Inc. had total assets of $881.7 million, loans of $742.7 million, deposits of $695.0 million, and stockholders’ equity of $127.0 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.
Government agencies have the authority to impose monetary penalties and other sanctions on institutions that fail to comply with these laws and regulations, which could significantly affect our business activities, including our ability to acquire other financial institutions or expand our branch network.
Government agencies have the authority to impose monetary penalties and other sanctions on institutions that fail to comply with these laws and regulations, which could significantly affect our business activities, including our ability to acquire other financial institutions or expand our branch network. 16 As a bank holding company, Affinity Bancshares, Inc. is required to comply with the rules and regulations of the Federal Reserve Board.
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 .
At December 31, 2025 2024 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) $ 1,152 14.25 % 21.98 % $ 1,082 13.62 % 21.97 % Commercial (secured by real estate - non-owner occupied) 1,258 15.56 % 23.78 % 1,115 14.04 % 23.34 % Commercial and industrial loans 1,495 18.50 % 19.72 % 1,753 22.07 % 20.75 % Construction and land 1,204 14.90 % 9.77 % 1,134 14.28 % 9.47 % One-to four-family residential 1,342 16.60 % 6.46 % 1,227 15.45 % 7.58 % Consumer loans 1,632 20.19 % 18.29 % 1,632 20.54 % 16.89 % Total allocated allowance 8,083 100.00 % 100.00 % 7,943 100.00 % 100.00 % Unallocated 911 553 Total $ 8,994 $ 8,496 Investment Activities General .
As a bank holding company, Affinity Bancshares, Inc. is required to comply with the rules and regulations of the Federal Reserve Board. It is required to file certain reports with the Federal Reserve Board and is subject to examination by and the enforcement authority of the Federal Reserve Board.
It is required to file certain reports with the Federal Reserve Board and is subject to examination by and the enforcement authority of the Federal Reserve Board. Affinity Bancshares, Inc. is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.
The Federal Deposit Insurance Corporation also has the authority to terminate deposit insurance or recommend to the Office of the Comptroller of the Currency that enforcement action be taken with respect to a particular bank.
The Federal Deposit Insurance Corporation also has the authority to terminate deposit insurance or recommend to the Office of the Comptroller of the Currency that enforcement action be taken with respect to a particular bank. If such action is not taken, the Federal Deposit Insurance Corporation has authority to take the action under specified circumstances. Standards for Safety and Soundness.
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.
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. The Federal Deposit Insurance Corporation charges insured depository institutions premiums to maintain the Deposit Insurance Fund.
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.
At December 31, 2025 2024 Amount Percent Average Rate Amount Percent Average Rate (Dollars in thousands) Non-interest-bearing checking $ 132,796 19.11 % — $ 151,395 22.48 % — Interest-bearing checking 82,612 11.89 % 0.50 % 73,841 10.96 % 0.51 % Money market accounts 157,439 22.65 % 3.00 % 148,752 22.09 % 3.24 % Savings accounts 96,981 13.95 % 2.93 % 76,053 11.29 % 2.86 % Certificates of deposit 225,177 32.40 % 4.05 % 223,440 33.18 % 4.21 % Total $ 695,005 100.00 % 3.06 % $ 673,481 100.00 % 2.49 % 14 As of December 31, 2025, the aggregate amount of all our certificates of deposit in amounts greater than or equal to $250,000 was approximately $38.6 million.
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.
For the Year Ended December 31, 2025 2024 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) $ 164,385 $ — — $ 162,326 $ — — Commercial (secured by real estate - non-owner occupied) 166,071 — — 155,991 164 0.11 % Commercial and industrial 150,091 (3 ) (0.00 )% 146,035 (9 ) (0.01 )% Construction, land and acquisition & development 70,667 — — 54,669 — — Residential mortgage 49,474 (447 ) (0.90 )% 51,816 50 0.10 % Consumer installment 129,011 222 0.17 % 117,464 445 0.38 % Total gross loans 729,699 $ (228 ) (0.03 )% 688,301 650 0.09 % Deferred loan fees, net 881 814 Total loans outstanding at end of year $ 728,818 $ 687,487 12 Allocation of Allowance for Credit Losses.
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.
At December 31, 2025 2024 Amount Percent Amount Percent (Dollars in thousands) Commercial (secured by real estate - owner occupied) $ 163,225 21.98 % $ 156,923 21.97 % Commercial (secured by real estate - non-owner occupied) 176,580 23.78 % 166,662 23.34 % Commercial and industrial 146,491 19.72 % 148,150 20.75 % Construction, land and acquisition & development 72,596 9.77 % 67,622 9.47 % Residential mortgage 1-4 family 47,966 6.46 % 54,142 7.58 % Consumer installment 135,824 18.29 % 120,616 16.89 % Total 742,682 100.00 % 714,115 100.00 % Less: Allowance for losses (8,994 ) (8,496 ) Total loans, net $ 733,688 $ 705,619 Contractual Maturities.
In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices.
Affinity Bank received a “satisfactory” Community Reinvestment Act rating in its most recent federal examination. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices.
Assessments for institutions of less than $10 billion of assets are based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of an institution's failure within three years. The current assessment range (inclusive of possible adjustments) for insured institutions of less than $10 billion of total assets is between 2.5 and 32 basis points.
Under the Federal Deposit Insurance Corporation’s risk-based assessment system, institutions deemed less risky of failure pay lower assessments. Assessments for institutions of less than $10 billion of assets are based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of an institution's failure within three years.
Market Area We conduct our operations from our main office and one additional branch office in Covington, Georgia, which is located in Newton County, Georgia, and one branch office in Atlanta, Georgia, which is located in Cobb County, as well as a commercial loan production office located in Alpharetta, Georgia, which is in Fulton County.
Market Area We conduct our operations from our main office and one additional branch office in Covington, Georgia, which is located in Newton County, Georgia, and one branch office in Atlanta, Georgia, which is located in Cobb County. Our indirect automobile lending division, Affinity Bank Dealer Select, operates from an office in Monroe, Georgia.
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.
At December 31, 2025 (In thousands) Maturity Period: Three months or less $ 4,755 Over three through six months 14,837 Over six through twelve months 10,495 Over twelve months 8,515 Total $ 38,602 At December 31, 2025 and 2024, there was $102.4 million and $97.2 million, respectively of uninsured deposits.
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.
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. At December 31, 2025 and 2024, $0 was outstanding on these lines of credit. Subsidiary Activities Affinity Bancshares, Inc. has no subsidiaries other than Affinity Bank.
A dealership submits credit applications to ABDS for consideration. ABDS fully underwrites each loan for creditworthiness, vehicle valuation, debt ratios and the consumer’s stability. ABDS underwrites each loan to ensure all credit policy guidelines are followed. Applications that are approved and counter-offered are submitted to ABDS for verification and funding.
ABDS purchases retail installment sales contracts from dealerships in the states of Alabama, Georgia, Florida, Tennessee, North Carolina, South Carolina, Kentucky and Virginia. A dealership submits credit applications to ABDS for consideration. ABDS fully underwrites each loan for creditworthiness, vehicle valuation, debt ratios and the consumer’s stability. ABDS underwrites each loan to ensure all credit policy guidelines are followed.
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.
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, 2025, consumer and other loans were $135.8 million, or 18.3% of gross loans. Our indirect automobile lending division, Affinity Bank Dealer Select (“ABDS”), operates from an office in Monroe, Georgia.
The Federal Deposit Insurance Corporation has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of Affinity Bank. We cannot predict what assessment rates will be in the future.
The current assessment range (inclusive of possible adjustments) for insured institutions of less than $10 billion of total assets is between 2.5 and 32 basis points. The Federal Deposit Insurance Corporation has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of Affinity Bank.
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.
The table below presents the maturity schedule at December 31, 2025 for available-for-sale securities. 13 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) Municipal securities – tax exempt $ — — $ — — $ — — $ 514 2.09 % $ 514 $ 459 2.09 % Municipal securities – taxable — — — — 2,040 2.11 % — — 2,040 1,790 2.11 % U.S.
The following table sets forth information regarding our non-performing assets.
The following table sets forth information regarding our non-performing assets. There is no real estate owned as of December 31, 2025 and 2024.
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.
This division has an experienced manager and sales team to operate this line of business. At December 31, 2025, we had $134.8 million in indirect automobile loans, and our internal policies limit such loans to 200% of capital and 25% of our loan portfolio.
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.
Personnel As of December 31, 2025, we had 79 full-time employees and three part-time employees. Our employees are not represented by any collective bargaining group. Management believes that we have good working relations with our employees.
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.
December 31, 2025 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) $ 18,516 $ 70,687 $ 67,715 $ 6,307 $ 163,225 Commercial (secured by real estate - non-owner occupied) 19,784 111,719 41,018 4,059 176,580 Commercial and industrial 4,941 33,755 107,795 — 146,491 Construction, land and acquisition & development 49,695 11,753 8,752 2,396 72,596 Residential mortgage 1,132 3,199 21,151 22,484 47,966 Consumer installment 1,041 78,297 56,486 — 135,824 $ 95,109 $ 309,410 $ 302,917 $ 35,246 $ 742,682 The following table sets forth our fixed and adjustable-rate loans at December 31, 2025 that are contractually due after December 31, 2026.
Removed
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.
Added
Due After December 31, 2026 Fixed Adjustable Total (In thousands) Commercial (secured by real estate - owner occupied) $ 141,264 $ 3,445 $ 144,709 Commercial (secured by real estate - non-owner occupied) 145,094 11,702 156,796 Commercial and industrial 138,277 3,273 141,550 Construction, land and acquisition & development 20,909 1,992 22,901 Residential mortgage 1-4 family 29,216 17,618 46,834 Consumer installment 134,783 - 134,783 Total loans $ 609,543 $ 38,030 $ 647,573 Commercial and Industrial Loans.
Removed
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.
Added
Government sponsored enterprises — — — — — — 9,815 2.46 % 9,815 7,338 2.46 % Government agency mortgage-backed securities — — 6,000 4.07 % 8,198 2.54 % 3,939 1.86 % 18,137 16,187 2.90 % Corporate securities 1,000 6.05 % 4,019 5.73 % 8,124 5.29 % — — 13,143 12,985 5.48 % Total $ 1,000 6.05 % $ 10,019 4.74 % $ 18,362 3.71 % $ 14,268 2.28 % $ 43,649 $ 38,759 3.53 % Sources of Funds General.
Removed
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.
Added
We cannot predict what assessment rates will be in the future.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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.
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.
The information security program is periodically reviewed by such personnel with the goal of addressing changing threats and conditions. We leverage people, processes, and technology as part of our efforts to manage and maintain cybersecurity controls.
The information security program is periodically reviewed by such personnel with the goal of addressing changing threats and conditions. 22 We leverage people, processes, and technology as part of our efforts to manage and maintain cybersecurity controls.
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.
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.
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 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 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 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.
Removed
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, 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.
Biggest changeITEM 2. Pr operties As of December 31, 2025, the net book value of our office properties and land was $1.9 million, and the net book value of our furniture, fixtures and equipment was $893,000. Our properties include our main office and branch office in Covington and leased 23 offices in Atlanta.

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. 24 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. 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 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.
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 18, 2026 we had 280 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms), and 6,094,885 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, 2024.
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, 2025.
Removed
There were no shares of the Company’s common stock repurchased during the quarter ended December 31, 2024. ITEM 6. [ R eserved] 25
Added
Shares of the Company’s common stock totaling 96,079 were repurchased during the quarter ended December 31, 2025 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, 2025 through October 31, 2025 25,561 19.73 25,561 75,662 November 1, 2025 through November 30, 2025 69,202 18.98 69,202 6,460 December 1, 2025 through December 31, 2025 1,316 19.58 1,316 5,144 96,079 61.65 96,079 5,144 ITEM 6. [ R eserved] 24

Item 7. Management's Discussion & Analysis

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

67 edited+2 added−6 removed44 unchanged
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.
Biggest changeFor the Year Ended December 31, 2025 2024 Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Dollars in thousands) Interest-earning assets: Loans $ 728,818 $ 44,876 6.16 % $ 687,487 $ 41,349 6.01 % Investment securities held-to-maturity 21,797 1,330 6.10 % 32,723 2,018 6.17 % Investment securities available-for-sale 40,560 1,495 3.69 % 47,449 1,778 3.75 % Interest-earning deposits and federal funds 70,591 2,926 4.15 % 49,385 2,459 4.98 % Other investments 6,231 382 6.13 % 5,801 369 6.36 % Total interest-earning assets 867,997 51,009 5.88 % 822,845 47,973 5.83 % Non-interest-earning assets 47,708 49,505 Total assets $ 915,705 $ 872,350 Interest-bearing liabilities: Interest-bearing checking accounts $ 85,552 $ 429 0.50 % $ 87,058 $ 448 0.51 % Money market accounts 165,222 4,950 3.00 % 147,049 4,760 3.24 % Savings accounts 87,611 2,570 2.93 % 73,176 2,091 2.86 % Certificates of deposit 242,720 9,831 4.05 % 217,517 9,157 4.21 % Total interest-bearing deposits 581,105 17,780 3.06 % 524,800 16,456 3.14 % FHLB advances and other borrowings 54,211 2,092 3.86 % 55,104 2,351 4.27 % Total interest-bearing liabilities 635,316 19,872 3.13 % 579,904 18,807 3.24 % Non-interest-bearing liabilities 154,016 166,702 Total liabilities 789,332 746,606 Total stockholders' equity 126,373 125,744 Total liabilities and stockholders' equity $ 915,705 $ 872,350 Net interest rate spread 2.75 % 2.59 % Net interest income $ 31,137 $ 29,166 Net interest margin 3.59 % 3.54 % 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.
Net cash used in investing activities typically consists primarily of disbursements for loan originations and purchases of investment securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and paydowns on securities.
Net cash used in investing activities typically consists primarily of disbursements for loan 31 originations and purchases of investment securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and paydowns on securities.
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.
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. 25 The Company files a consolidated federal and a state income tax return.
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 .
At December 31, 2025, we exceeded all of our regulatory capital requirements, and we were categorized as well capitalized at December 31, 2025 and 2024. 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, 2024 and 2023.
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, 2025 and 2024.
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.
We seek to maintain a liquidity ratio of 12.0% or greater. At December 31, 2025 and 2024, 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.
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.
For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been 27 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.
In addition, the Office of the Comptroller of the Currency, as an integral part of its examination process, will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.
In addition, the Office of the Comptroller of the Currency, as an integral part of its examination process, will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses. Noninterest Income.
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.
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. 30 The table below sets forth, as of December 31, 2025, 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.
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. See “—Summary of Significant Accounting Policies” for additional information.
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. See “Summary of Significant Accounting Policies” for additional information.
We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.
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.
Time deposits that are scheduled to mature in less than one year from December 31, 2025 totaled $123.8 million. Management expects that a substantial portion of the maturing time deposits will be renewed.
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.
The loan-to-deposit ratio at December 31, 2025 was 106.9%, as compared to 106.0% at December 31, 2024. We had $54.0 million of Federal Home Loan Bank advances at December 31, 2025, compared to $54.0 million of Federal Home Loan Bank advances and $4.8 million outstanding under the Bank Term Funding Program at December 31, 2024.
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.
Such commitments are subject to the same credit policies and approval process according to loans we make. At December 31, 2025, we had outstanding commitments to originate loans of $72.0 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 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.
After an evaluation of these factors, we recorded a provision for credit losses of $125,000 for the year ended December 31, 2025, compared to $438,000 for the year ended December 31, 2024. Our allowance for credit losses was $9.0 million at December 31, 2025 compared to $8.5 million at December 31, 2024.
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.
Our net interest margin was 3.59% for the year ended December 31, 2025 compared to 3.54% for the year ended December 31, 2024. Provisions for Credit Losses.
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.
We also have the ability to borrow from the Federal Home Loan Bank of Atlanta. At December 31, 2025, we had a $50.6 million line of credit with the Federal Home Loan Bank of Atlanta with $54.0 million in borrowings and a $13.0 million letter of credit outstanding which is used to collateralize public deposits.
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.
In addition, at December 31, 2025, we had a $32.5 million in unsecured federal funds lines of credit. Nothing was outstanding on these lines of credit at December 31, 2025. We also have a line of $56.7 million with the Federal Reserve Bank of Atlanta Discount Window (the "Discount Window") secured by $77.0 million in loans.
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 .
Income Tax Expense. We recorded income tax expense of $2.9 million and $1.5 million for the years ended December 31, 2025 and 2024. The increase in income tax expense was due to increased income before income taxes in 2025. Management of Market Risk General .
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.
We use a sources and uses of liquidity analysis as our primarily liquidity test to assess our ability to meet short-term and long-term funding needs on at least a monthly basis and more often when needed.
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.
Interest income on securities available for sale and held to maturity decreased $971,000 to $2.8 million for the year ended December 31, 2025 from $3.8 million for the year ended December 31, 2024.
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.
The increase was due to a $3.5 million increase in interest income on loans and a $467,000 increase in interest income on interest-earning deposits, offset by a $958,000 decrease in income on investment securities.
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 .
In addition, construction loans increased $5.0 million, or 7.4% to $72.6 million at December 31, 2025 from $67.6 million at December 31, 2024, as we have seen continued success with our strategic initiative to increase construction lending to continue to diversify our loan portfolio .
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-bearing demand deposits.
No amount was outstanding on the Discount Window line at December 31, 2025. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-bearing demand deposits.
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 on deposits increased $1.3 million, or 8.1%, to $17.8 million for the year ended December 31, 2025 from $16.5 million for the year ended December 31, 2024. We recorded increases in interest expense on all deposits products, except interest bearing checking accounts.
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.
Noninterest expenses decreased $2.1 million, or 8.7%, to $21.7 million for the year ended December 31, 2025, from $23.8 million for the year ended December 31, 2024. Income tax expense increased $1.4 million, or 88.5%, to $2.9 million for the year ended December 31, 2025 compared to $1.5 million for the year ended December 31, 2024.
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.
Interest income on interest-earning deposits and federal funds increased $467,000 to $2.9 million for the year ended December 31, 2025 from $2.5 million for the year ended December 31, 2024.
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.
Interest expense increased $1.1 million, or 5.7%, to $19.9 million for the year ended December 31, 2025 compared to $18.8 million for the year ended December 31, 2024, due to increases in interest expense on deposits offset by decreases Federal Home Loan Bank advances and other borrowings.
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.
Interest income increased $3.0 million, or 6.3%, to $51.0 million for the year ended December 31, 2025 from $48.0 million for the year ended December 31, 2024. Our average yield on loans increased 15 basis points to 6.16% for the year ended December 31, 2025 from 6.01% for the year ended December 31, 2024.
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.
Interest expense on certificates of deposit increased $674,000, or 7.4%, to $9.8 million for the year ended December 31, 2025 from $9.2 million for the year ended December 31, 2024.
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 expense increased $1.1 million, or 5.7%, to $19.9 million for the year ended December 31, 2025 compared to $18.8 million for the year ended December 31, 2024, due to increases in nearly all interest expense categories.
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%.
Our average balance of securities decreased $17.8 million, or 22.2%, to $62.4 million for the year ended December 31, 2025 from $80.2 million for the year ended December 31, 2024. The average rate earned on securities available for sale and held to maturity decreased 20 basis points during 2025, to 4.53% from 4.73%.
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.
Interest income increased $3.0 million, or 6.3%, to $51.0 million for the year ended December 31, 2025 from $48.0 million for the year ended December 31, 2024.
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 .
One-to-four family residential real estate loans decreased $6.2 million, or 11.4%, to $48.0 million at December 31, 2025 from $54.1 million at December 31, 2024. Commercial and industrial loans decreased $1.7 million, or 1.1%, to $146.5 million at December 31, 2025 from $148.2 million at December 31, 2024.
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.
Our average interest-earning assets increased by $45.2 million, or 5.5%, to $868.0 million for the year ended December 31, 2025 from $822.8 million for the year ended December 31, 2024, while our net interest rate spread increased by 16 basis points to 2.75% for the year ended December 31, 2025 from 2.59% for the year ended December 31, 2024, reflecting a five basis point increase in the average rate earned on interest-earning assets and a decrease of 11 basis points in the rate paid on interest-bearing liabilities.
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.
Net income increased $2.9 million, or 53.1%, to $8.3 million for the year ended December 31, 2025, compared to $5.4 million for the year ended December 31, 2024. An increase in net interest income and a decrease in noninterest expense were offset by a decrease in noninterest income. Interest Income.
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%).
Overview Total assets increased $14.9 million, or 1.7%, to $881.7 million at December 31, 2025 from $866.8 million at December 31, 2024. The increase was due primarily to increases in net loans ($28.6 million, or 4.0%), and in cash and cash equivalents ($12.4 million, or 30.0%) and offset by decreases in investments (available-for-sale, held-to-maturity, and other) ($25.0 million or 35.7%).
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.
Net cash provided by financing activities, which consists primarily of activity in deposit accounts and proceeds from or repayments of borrowings, and equity transactions such as stock repurchase and dividends paid was $2.0 million for the year ended December 31, 2025, compared to net cash provided by financing activities of $17.9 for the year ended December 31, 2024.
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.
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 $11.6 million and $6.8 million for the years ended December 31, 2025 and 2024, respectively.
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.
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.
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%.
We also recognized increases in interest expense on savings accounts of $479,000, or 22.9%, as increases in average balances of $14.4 million and market interest rates increased the rates we paid on these types of deposits by seven basis points to 2.93%.
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.
Comparison of Financial Condition at December 31, 2025 and December 31, 2024 Total assets increased $14.9 million, or 1.7%, to $881.7 million at December 31, 2025 from $866.8 million at December 31, 2024.
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.
Non-owner occupied commercial real estate loans increased $9.9 million, or 6.0%, to $176.6 million at December 31, 2025 from $166.7 million at December 31, 2024, and consumer loans increased $15.2 million, or 12.6%, to $135.8 million at December 31, 2025 from $120.6 million at December 31, 2024.
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.
Net cash used in investing activities was $1.2 million and $33.2 million for the years ended December 31, 2025 and 2024, respectively.
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.
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.
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%).
The increase was due primarily to increases in gross loans ($28.6 million, or 4.0%) and in cash and cash equivalents ($12.4 million, or 30.0%), offset by decreases in investments (available-for-sale, held-to-maturity, and other) ($25.0 million or 35.7%).
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.
The average balance of interest-earning deposits increased $21.2 million, or 42.9%, to $70.6 million for the year ended December 31, 2025 from $49.4 million for the year ended December 31, 2024. 28 Interest Expense.
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.
Certificates of deposit increased $1.7 million, or 0.8%, to $225.2 million at December 31, 2025 from $223.4 million at December 31, 2024, money market accounts increased $8.7 million or 5.9% to $157.4 million at December 31, 2025 from $148.8 million at December 31, 2024, interest-bearing checking increased $8.8 million or 11.9% to $82.6 million at December 31, 2025 from $73.8 million at December 31, 2024, and savings accounts increased $20.9 million, or 27.5% to $97.0 million at December 31, 2025 from $76.1 million at December 31, 2024.
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.
Noninterest income decreased $91,000, or 4.5%, to $1.9 million for the year ended December 31, 2025 from $2.0 million for the year ended December 31, 2024. The decrease resulted primarily from a decrease in service charges on deposit accounts of $136,000 and gain on sale of other real estate of $135,000 in prior year. Noninterest Expenses.
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.
Interest expense on borrowings decreased to $2.1 million for the year ended December 31, 2025 compared to $2.4 million for the year ended December 31, 2024. The average balance of borrowings decreased $893,000 to $54.2 million at December 31, 2025 compared to $55.1 million at December 31, 2024.
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.
Noninterest expenses information is as follows. 29 Year Ended December 31, Change 2025 2024 Amount Percent (Dollars in thousands) Salaries and employee benefits $ 12,904 $ 13,126 $ (222 ) (1.7 )% Occupancy 2,368 2,451 (83 ) (3.4 )% Data processing 2,203 2,087 116 5.5 % Other 4,224 6,097 (1,873 ) (30.7 )% Total non-interest expenses $ 21,699 $ 23,761 $ (2,062 ) (8.7 )% Noninterest expenses decreased $2.1 million, or 8.7%, to $21.7 million for the year ended December 31, 2025, from $23.8 million for the year ended December 31, 2024, due mainly to a decrease in other expenses, and specifically merger-related expenses.
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.
Borrowing decreases related to paying off the $4.8 million outstanding under the Bank Term Funding Program at December 31, 2024. Net Interest Income. Net interest income before provision for credit losses increased by $2.0 million, or 6.8%, to $31.1 million for the year ended December 31, 2025 from $29.2 million for the year ended December 31, 2024.
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.
Change in Interest Rates (basis points) (1) Net Interest Income Year 1 Forecast Year 1 Change from Level (Dollars in thousands) +400 $ 29,935 (8.27 )% +200 31,350 (3.93 )% Level 32,633 — -200 32,393 (0.74 )% -400 32,233 (1.23 )% (1) Assumes an immediate uniform change in interest rates at all maturities.
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 allowance for credit losses to total loans was 1.21% at December 31, 2025 compared to 1.19% at December 31, 2024, while the allowance for credit losses to non-performing loans was 251.9% at December 31, 2025 compared to 177.9% at December 31, 2024.
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.
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.
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.
Cash and cash equivalents increased $12.4 million, or 30.0% to $53.9 million at December 31, 2025 from $41.4 million at December 31, 2024, due mainly to deposit growth. Gross loans increased $28.6 million, or 4.0%, to $742.7 million at December 31, 2025 from $714.1 million at December 31, 2024.
Total deposits decreased $962,000, or 0.1%, to $673.5 million at December 31, 2024 from $674.4 million at December 31, 2023.
Total deposits increased $21.5 million, or 3.2%, to $695.0 million at December 31, 2025 from $673.5 million at December 31, 2024.
Loan fees are included in the interest income computations presented below, but such amounts were not material.
The yields set forth below include the 26 effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Loan fees are included in the interest income computations presented below, but such amounts were not material.
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.
We recognized net income of $8.3 million for the year ended December 31, 2025, change in accumulated other comprehensive loss of $2.1 and $2.2 million related to stock compensation and ESOP expenses, along with $8.8 million of dividends paid, and $5.9 million in common stock repurchases.
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.
We recorded an increase in owner occupied commercial real estate loans of $6.3 million, or 4.0% to $163.2 million at December 31, 2025 from $156.9 million at December 31, 2024.
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.
Net income increased $2.9 million, or 53.1%, to $8.3 million for the year ended December 31, 2025, compared to $5.4 million for the year ended December 31, 2024. The increase was due to an increase in interest income and decreases in noninterest expense and provision for credit loss partially offset by increases in deposit costs.
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 loans increased $41.3 million, or 6.0%, to $728.8 million for the year ended December 31, 2025 from $687.5 million for the year ended December 31, 2024, as we continued to focus our growth in commercial loans secured by real estate, indirect loans and construction.
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.
Year Ended December 31, 2025 vs. 2024 Increase (Decrease) Due to Total Increase Volume Rate (Decrease) (In thousands) Interest-earning assets: Loans $ 3,440 $ 87 $ 3,527 Investment securities held-to-maturity (687 ) (1 ) (688 ) Investment securities available-for-sale (282 ) (1 ) (283 ) Interest-earning deposits and federal funds 1,600 (1,133 ) 467 Other investments 40 (27 ) 13 Total interest-earning assets 4,111 (1,075 ) 3,036 Interest-bearing liabilities: Interest-bearing checking accounts (19 ) — (19 ) Money market accounts 965 (775 ) 190 Savings accounts 477 2 479 Certificates of deposit 1,426 (752 ) 674 Total interest-bearing deposits 2,849 (1,525 ) 1,324 FHLB advances and other borrowings (208 ) (51 ) (259 ) Total interest-bearing liabilities 2,641 (1,576 ) 1,065 Change in net interest income $ 1,470 $ 501 $ 1,971 Comparison of Operating Results for the Years Ended December 31, 2025 and 2024 General.
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.
The growth in savings is attributed to the opening of additional FitnessBank accounts, the timing of our rate adjustments relative to competitors, as well as an increase in the advertisement of rates. These increases were offset by decreases in non-interest-bearing checking ($18.6 million, or 12.3%).
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.
Securities held-to-maturity decreased to $0 at December 31, 2025, from $27.3 million at December 31, 2024, as securities were sold, called or transferred to available-for-sale securities throughout the year. Securities available-for-sale increased $2.3 million to $38.8 million at December 31, 2025 from $36.5 million at December 31, 2024.
Removed
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.
Added
Stockholders’ equity decreased $2.1 million or 1.6%, to $127.0 million at December 31, 2025 from $129.1 million at December 31, 2024.
Removed
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.
Added
We had charge-offs of $333,000 and recoveries of $561,000 during the year ended December 31, 2025 compared to charge-offs of $225,000 and recoveries of $741,000 during the year ended December 31, 2024. To the best of our knowledge, we have recorded all credit losses that are both probable and reasonable to estimate at December 31, 2025.
Removed
However, regulatory agencies are not directly involved in the process of establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. We adopted a new accounting standard, referred to as Current Expected Credit Loss (“CECL”), effective January 1, 2023.
Removed
CECL requires financial institutions to determine periodic estimates of lifetime expected credit losses on loans and recognize the expected credit losses as allowances for credit losses. This has changed our prior method of recording allowances for credit losses that are probable. Noninterest Income.
Removed
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.
Removed
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

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