Affinity Bancshares (AFBI), a community bank holding company known for its commercial and dental sector lending, reported its second quarter 2025 earnings on July 25, 2025. The headline news from the release was significant growth in both net income and adjusted (non-GAAP) earnings per share, along with improved efficiency and continued deposit and loan expansion. The period was marked by a jump in net income to $2.2 million and adjusted diluted EPS (non-GAAP) to $0.36, both up sharply from the prior year. No formal analyst estimates were available for the quarter, so results were measured against prior periods rather than consensus targets. The overall quarter showed notable gains in profitability and efficiency, offset by margin pressure and soft noninterest income.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| EPS – Diluted | $0.33 | $0.16 | 106.3% |
| EPS – Adjusted Diluted (Non-GAAP) | $0.36 | $0.27 | 33.3% |
| Net Income | $2.2 million | $1.0 million | 120.0% |
| Net Interest Income | $7.8 million | $7.6 million | 2.6% |
| Net Interest Margin | 3.57% | 3.71% | (0.14 pp) |
| Total Assets | $933.8 million | $873.6 million | 6.9% |
About Affinity Bancshares and Its Business Focus
Affinity Bancshares is the bank holding company for Affinity Bank, serving both local Georgia communities and a nationwide base via its digital platform, FitnessBank. Its business centers on commercial lending, with a unique focus on dental and medical office loans, alongside residential and consumer banking services.
In recent years, the company concentrated on growing its specialized loan portfolio and expanding deposit gathering, both locally and online. Key factors for success have included prudent credit underwriting, efficient operations, and a strong reputation in healthcare-related commercial real estate lending.
Quarterly Highlights: Operations and Performance
The company saw net income more than double compared to the same quarter last year. This result was due in part to higher net interest income and a sharp reduction in noninterest expenses. Operating income also improved, showing that tighter spending had a material impact. However, noninterest income (GAAP) dropped, mainly due to lower deposit service charges and fewer gains on real estate sales.
Net interest income, the core source of profit for banks, saw a modest increase for the six months ended June 30, 2025 compared to the same period in 2024. This was driven by loan growth, as total loan balances increased by $17.0 million from December 31, 2024 to June 30, 2025. The company's loan book continues to reflect its specialty, with significant exposure to commercial real estate and medical sectors. Non-owner-occupied office loans totaled $39.9 million as of June 30, 2025, with an average loan-to-value of 48.8% as of June 30, 2025.
Deposits increased by $75.9 million to $749.3 million as of June 30, 2025, compared to $673.5 million at December 31, 2024. This rise was supported by both interest-bearing and demand accounts. Borrowings decreased by $4.8 million to $54.0 million as of June 30, 2025, compared to $58.8 million at December 31, 2024.
Asset quality metrics stayed solid. Non-performing loans dropped to $4.6 million as of June 30, 2025, and net loan charge-offs were minimal at $79,000 for the six months ended June 30, 2025. The bank's allowance for credit losses stood at 1.17% of total loans as of June 30, 2025, and coverage of non-performing loans rose to 187.1% as of June 30, 2025.
Product and Service Context
The company’s virtual bank, FitnessBank, is a digital savings product that targets customers from across the United States. FitnessBank operates as a platform for nationwide deposit gathering, strengthening the bank’s position in the online banking sphere and providing access to low-cost deposits beyond its physical branch network.
Affinity’s largest pool of lending comes from commercial real estate loans, especially in the dental medical field. This specialization leads to sector concentration. Residential and consumer loans are available but represent a smaller share of total bank activity.
Outlook and What to Watch
Management did not provide explicit financial guidance for the coming quarters. No targets for earnings, margin, or loan growth were included in the release.
Investors should continue to watch net interest margin trends and noninterest income, both of which showed negative pressure in the period. Deposit growth remains a positive, but margin compression could affect profits if loan yields fall or funding costs rise. The ongoing focus on commercial and dental sector lending is a double-edged sword, delivering strong past returns but exposing the company to risks should those sectors weaken. Noninterest income is another area to monitor, as its continued decline leaves profitability more reliant on core lending operations.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
