Form type: 10-Q
Period end: 2026-03-31
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Interest income | 12,349,000 | 12,105,000 |
| Total interest income | ||
| Income tax expense (benefit) | 718,000 | 578,000 |
| Interest expense, operating | 4,784,000 | 4,768,000 |
| Other income statement items (derived) | 4,563,000 | 4,928,000 |
| Total Expenses | ||
| Net Income | ||
| Basic earnings per share |
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Bank-owned life insurance | 17,279,000 | 17,161,000 |
| Cash and cash equivalents | 89,352,000 | 53,850,000 |
| Debt securities available for sale | 37,286,000 | 38,759,000 |
| Federal Home Loan Bank stock | 3,200,000 | 3,200,000 |
| Goodwill and intangibles | 17,200,000 | 17,200,000 |
| Intangible assets, net | 0 | 765,000 |
| Loans receivable, net | 742,868,000 | 733,688,000 |
| Operating lease right-of-use assets | 0 | 709,000 |
| Other assets (derived) | 8,508,000 | 7,265,000 |
| Other investments | 6,284,000 | 6,264,000 |
| Property, plant and equipment | 2,700,000 | 2,836,000 |
| Total Assets | ||
| Liabilities | ||
| Advances from Federal Home Loan Banks | 54,000,000 | 54,000,000 |
| Deposits | 734,337,000 | 695,005,000 |
| Operating lease liabilities | 0 | 911,000 |
| Other liabilities (derived) | 6,876,000 | 4,762,000 |
| Total Liabilities | ||
| Equity | ||
| Stockholders equity | 129,464,000 | 127,019,000 |
| Total Equity | ||
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | 2,284,000 | 1,831,000 |
| Changes in operating assets and liabilities, net | 2,119,000 | 86,000 |
| Net cash from operating activities | ||
| Investing activities | ||
| Investing activities, net | -8,218,000 | -10,710,000 |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Financing activities, net | 39,317,000 | 42,073,000 |
| Net cash from financing activities | ||
| Net change in cash | ||
| Cash at beginning of period | 41,425,000 | |
| Cash at end of period | 74,704,000 | |
| Amount | |
|---|---|
| Balance at beginning of period | 127,019,000 |
| Net income | 2,284,000 |
| Other equity movements | 161,000 |
| Balance at end of period | 129,464,000 |
Affinity Bancshares, Inc. is a public reporting company classified under Savings Institutions, Not Federally Chartered. The accompanying unaudited condensed financial statements have been prepared from the Company's books and records and, in the opinion of management, reflect all adjustments necessary for a fair presentation of the interim periods presented. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full fiscal year. These notes relate to the period ended March 31, 2026.
Revenue for the period, consisting of interest income, was $12,349,000, compared with $12,105,000 in the prior period, an increase of 2.0%. Interest expense from operations was $4,784,000, compared with $4,768,000 in the prior period, and income tax expense was $718,000, compared with $578,000 in the prior period. Net income for the period was $2,284,000. Basic earnings per share for the period were $0.37, computed using weighted-average basic shares outstanding of 6,095,117.
At the end of the period, the Company's debt consisted of advances from Federal Home Loan Banks of $54,000,000 and deposits of $734,337,000, and the Company had no operating lease liabilities. Advances from Federal Home Loan Banks were unchanged from the prior period, while deposits increased 0.6% from $730,292,000 in the prior period. Total liabilities were $795,213,000 at period end.
Total stockholders' equity was $129,464,000 at March 31, 2026, an increase of 5.9% from $122,279,000 in the prior period. The increase in stockholders' equity primarily reflects the results of operations for the period. [COMPLETE: description of components of stockholders' equity, including common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income, and any dividends or share repurchase activity during the period]
| Current | Prior | |
|---|---|---|
| Advances from Federal Home Loan Banks | 54,000,000 | 54,000,000 |
| Deposits | 734,337,000 | 695,005,000 |
| Operating lease liabilities | 0 | 911,000 |
| Total debt | 788,337,000 | 749,916,000 |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | 2,700,000 | 2,836,000 |
| Total property and equipment | 2,700,000 | 2,836,000 |
| Current | Prior | |
|---|---|---|
| Stockholders equity | 129,464,000 | 127,019,000 |
| Total stockholders' equity | 129,464,000 | 127,019,000 |
Affinity Bancshares, Inc. is a public reporting company classified under Savings Institutions, Not Federally Chartered. For the period ended March 31, 2026, we reported net income of $2,284 thousand, or basic earnings per share of $0.37 based on weighted-average basic shares outstanding of 6,095,117. The following discussion compares our results of operations for the current period to the comparable prior-year period and should be read in conjunction with our unaudited consolidated financial statements and the related notes included elsewhere in this report.
Interest income increased 2.0% to $12,349 thousand for the current period from $12,105 thousand for the prior-year period. The increase in interest income was driven primarily by growth in loans receivable, net, which increased 4.3% to $742,868 thousand from $712,523 thousand. Interest expense increased 0.3% to $4,784 thousand from $4,768 thousand, reflecting a 0.6% increase in deposits to $734,337 thousand from $730,292 thousand, while advances from Federal Home Loan Banks remained unchanged at $54,000 thousand. Other income statement items decreased 7.4% to $4,563 thousand of net expense from $4,928 thousand in the prior-year period. Income tax expense increased 24.2% to $718 thousand from $578 thousand, consistent with the improvement in pre-tax earnings.
Our balance sheet reflected a repositioning of the securities portfolio, as debt securities held to maturity declined to zero from $27,338 thousand and debt securities available for sale decreased 9.0% to $37,286 thousand from $40,979 thousand. Bank-owned life insurance increased 4.2% to $17,279 thousand, other investments increased 1.3% to $6,284 thousand, and goodwill and intangibles were unchanged at $17,200 thousand, while property, plant and equipment decreased 15.0% to $2,700 thousand and other assets decreased 19.6% to $8,508 thousand. Other liabilities increased 16.1% to $6,876 thousand from $5,925 thousand. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure.
Cash and cash equivalents increased 19.6% to $89,352 thousand at March 31, 2026 from $74,704 thousand at the end of the prior period, supported in part by deposit growth and the runoff of the held-to-maturity securities portfolio. Stockholders' equity increased 5.9% to $129,464 thousand from $122,279 thousand, reflecting the retention of current-period earnings, and total liabilities were $795,213 thousand against total equity of $129,464 thousand. In addition to cash on hand, our liquidity sources include our investment in Federal Home Loan Bank stock of $3,200 thousand and available-for-sale debt securities of $37,286 thousand. Based on our current level of cash and cash equivalents, deposit base, and available borrowing capacity, management believes that our liquidity and capital resources are sufficient to meet our operating needs and commitments for at least the next twelve months.
As of March 31, 2026, our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments. Affinity Bancshares, Inc. is a savings institution, not federally chartered, and as such our earnings and financial condition are sensitive to changes in market interest rates, which affect both the yields we earn on interest-earning assets and the rates we pay on interest-bearing liabilities. We do not have material foreign currency or commodity price exposure, and accordingly our market risk discussion is focused on interest rate risk. Because we do not conduct significant operations outside the United States, changes in foreign exchange rates and commodity prices are not expected to have a material effect on our results of operations or financial position.
Our interest rate risk arises principally from the composition of our balance sheet. At March 31, 2026, our interest-earning assets included loans receivable, net, of $742.9 million, an increase of 4.3% from $712.5 million at the prior period end, and cash and cash equivalents of $89.4 million, an increase of 19.6% from $74.7 million. Our debt securities available for sale declined 9.0% to $37.3 million from $41.0 million, and debt securities held to maturity declined to zero from $27.3 million, while Federal Home Loan Bank stock remained unchanged at $3.2 million and other investments increased 1.3% to $6.3 million. The fair value of our available-for-sale securities portfolio is directly sensitive to changes in market interest rates, and repricing of our loan portfolio and short-term investments affects our interest income as rates change.
On the funding side, our interest rate risk is driven by the cost and repricing characteristics of our interest-bearing liabilities. At March 31, 2026, deposits totaled $734.3 million, an increase of 0.6% from $730.3 million, and advances from Federal Home Loan Banks were unchanged at $54.0 million. For the period, interest income was $12.3 million, an increase of 2.0% from $12.1 million in the prior period, while interest expense was $4.8 million, an increase of 0.3%, reflecting the impact of the current rate environment on both asset yields and funding costs. Management monitors our interest rate risk position on an ongoing basis and seeks to manage the repricing characteristics of our assets and liabilities to limit the effect of interest rate changes on net interest income and the economic value of equity. [COMPLETE: quantitative interest rate sensitivity analysis, such as net interest income simulation or economic value of equity results under specified rate shock scenarios, from prior filings]
Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, Affinity Bancshares, Inc. carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of March 31, 2026, the end of the period covered by this report. Based on that evaluation, management concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period. In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
[COMPLETE: Management's conclusion language in this section must be reviewed and adopted by management before filing.]
Affinity Bancshares, Inc. is periodically involved in legal proceedings that arise in the ordinary course of its business. Such matters are incidental to the conduct of the Company's operations and may include claims and litigation of a nature typical for companies in its industry.
Management does not currently believe that any pending legal matter is material to the Company's financial statements. While the outcome of legal proceedings is inherently uncertain, the Company does not expect that the resolution of any currently pending matters will have a material adverse effect on its financial condition, results of operations, or cash flows.
Affinity Bancshares, Inc. is a public reporting company classified under Savings Institutions, Not Federally Chartered, and an investment in our securities involves risks. In addition to the other information set forth in this report, investors should carefully consider the risk factors previously disclosed in our prior filings with the Securities and Exchange Commission. [COMPLETE: statement regarding whether there have been any material changes to the risk factors previously disclosed in the Company's most recent Annual Report on Form 10-K].
Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. Changes in interest rates could adversely affect our results of operations and financial condition. For the period ended March 31, 2026, we reported revenue of $12,349,000 and net income of $2,284,000, and interest income of $12,349,000 was partially offset by interest expense of $4,784,000, results that could be affected by future movements in market interest rates. Our balance sheet includes cash and cash equivalents of $89,352,000 and debt securities available for sale of $37,286,000, the values and yields of which are sensitive to interest rate fluctuations. We do not have material foreign currency or commodity price exposure.
Our business is also subject to credit risk associated with our lending activities, and deterioration in the credit quality of our loan portfolio could adversely affect our earnings and capital. Loans receivable, net totaled $742,868,000 at the end of the current period, an increase of 4.3% from $712,523,000 in the prior period, and growth in the loan portfolio may increase our exposure to borrower defaults. We also rely on deposits of $734,337,000 and advances from Federal Home Loan Banks of $54,000,000 as funding sources, and the loss of, or increases in the cost of, these funding sources could adversely affect our liquidity and results of operations. In addition, we are involved in legal proceedings arising in the ordinary course of business from time to time, although management does not currently believe any pending matter is material to the financial statements; an adverse outcome in any such matter could nonetheless result in losses or reputational harm.
The following disclosure is provided pursuant to Item 408(a) of Regulation S-K with respect to Rule 10b5-1 trading arrangements for the quarter ended March 31, 2026. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]