Executive Summary

Q1 2024 EPS was $0.20 and net income was $1.335M, down year over year due to higher deposit interest expense, with sequential EPS decline from $0.23 in Q4 2023 and $0.25 in Q3 2023 .
Net interest margin ticked up sequentially to 3.38% from 3.32% in Q4 2023, though still below 3.58% in Q1 2023 as cost of funds pressures persist .
Balance sheet strengthened: assets +$26.3M QoQ to $869.5M, deposits +$13.0M QoQ to $687.4M, and cash & equivalents +$11.4M QoQ to $61.4M; uninsured deposits rose to $107.1M (15.6% of total) .
Asset quality steady-to-improving: NPLs decreased to $7.2M QoQ; ACL coverage of NPLs ~120%, though net charge-offs increased to $326k in the quarter .
No formal guidance or earnings call transcript was published; estimate comparisons via S&P Global were unavailable at the time of review.

What Went Well and What Went Wrong

What Went Well

Sequential NIM improvement: “Net interest margin…decreased to 3.38% from 3.58% for the three months ended March 31, 2023,” but improved vs Q4 2023 (3.32%), aided by higher earning asset yields .
Liquidity enhanced: Cash and cash equivalents increased to $61.4M (+$11.4M QoQ), with deposits up $13.0M QoQ (notably +$11.3M in demand deposits) .
Loan growth: Total gross loans increased $14.6M QoQ to $674.5M, reflecting steady demand; NOO office exposure remains modest ($26.4M) with low average LTV of 41% .

What Went Wrong

Earnings pressure from funding costs: Net income fell YoY as “an increase in deposit interest expense” more than offset interest income gains; efficiency ratio deteriorated to 75.96% vs 69.73% in Q1 2023 .
Higher net charge-offs: Net loan charge-offs rose to $326k vs $91k in Q1 2023, an uptick despite stable ACL coverage .
Uninsured deposits increased: Uninsured deposits rose to $107.1M (15.6% of total), up from 14.0% at YE 2023, modestly increasing headline liquidity sensitivity .

Financial Results

Metric	Q3 2023	Q4 2023	Q1 2024
Diluted EPS ($)	$0.25	$0.23	$0.20
Net Income ($USD Millions)	$1.623	$1.514	$1.335
Revenue (Total Interest Income, $USD Millions)	$11.024	$11.083	$11.221
Net Interest Income ($USD Millions)	$6.901	$6.705	$6.749
Noninterest Income ($USD Millions)	$0.630	$0.606	$0.584
Net Interest Margin (%)	3.36%	3.32%	3.38%
Efficiency Ratio (%)	71.78%	74.30%	75.96%

Balance Sheet & Deposits	Q3 2023	Q4 2023	Q1 2024
Total Assets ($USD Millions)	$855.4	$843.3	$869.5
Gross Loans ($USD Millions)	$661.0	$659.9	$674.5
Deposits ($USD Millions)	$709.0	$674.4	$687.4
Demand Deposits / Total Deposits (%)	37%	36%	37%
Dental Deposits ($USD Millions)	$117.3	$104.8	$113.2
Uninsured Deposits ($USD Millions)	$98.7	$95.5	$107.1
Uninsured Deposits (% of Total)	13.9%	14.0%	15.6%
Cash & Cash Equivalents ($USD Millions)	$61.5	$50.0	$61.4

Asset Quality	Q3 2023	Q4 2023	Q1 2024
Non-performing Loans ($USD Millions)	$7.6	$7.4	$7.2
ACL to Total Loans (%)	1.39%	1.35%	1.27%
ACL Coverage of NPLs (%)	120.6%	120.1%	120.0%
Net Charge-offs ($USD Millions)	$0.114 (9M)	$0.404 (FY)	$0.326 (Q)

Note: “Revenue” shown as Total Interest Income due to banking reporting conventions; operating revenue (Net Interest Income after provision + Noninterest Income) for Q1 2024 approximated $7.333M using cited components .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	Q2–FY2024	None provided	None provided	Maintained (no formal guidance)

No formal guidance was disclosed in Q1 2024 press materials .

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was available; themes below reflect management commentary from press releases.

Topic	Previous Mentions (Q3 2023, Q4 2023)	Current Period (Q1 2024)	Trend
Funding costs / NIM	Cost of funds up; NIM down YoY to 3.36% (Q3) and 3.32% (Q4) as increases in funding costs outpaced asset yields	NIM 3.38%; still below prior year; margin pressure attributed to higher costs of funds	Sequential improvement; YoY compression persists
Liquidity positioning	Cash increased materially; brokered CDs issued ($72.4M in 2023), average rate 4.87%	Cash & equivalents +$11.4M QoQ; deposits +$13.0M QoQ (DDA +$11.3M)	Strengthening liquidity; improved DDA mix
Uninsured deposits	~13.9% of total (Q3); ~14.0% (Q4)	15.6% of total; $107.1M	Modest increase QoQ
Office CRE exposure (NOO)	$25.4M; avg LTV ~43%	$26.4M; avg LTV 41% (medical/dental $10.5M; other $15.9M)	Stable exposure; conservative LTV
Asset quality	NPLs up to $7.6M (Q3), $7.4M (Q4); ACL/NPL ~120%	NPLs down to $7.2M; ACL/NPL ~120%; NCOs higher QoQ	Slight improvement in NPLs; watch NCOs

Management Commentary

“Net income was $1.3 million…as a result of an increase in deposit interest expense partially offset by an increase in interest income.”
“Net interest margin…decreased to 3.38% from 3.58%… The decreases in the margin relate to increases in our costs of funds exceeding our increases in our yield on interest-earning assets.”
“Deposits increased by $13.0 million…with $11.3 million of the increase in demand deposits… Cash and cash equivalents increased to $61.4 million… primarily due to an increase in deposits.”
“Non-performing loans decreased to $7.2 million… Allowance for credit losses to total loans decreased to 1.27%… Net loan charge-offs were $326,000.”

Q&A Highlights

No Q&A section available as no earnings call transcript was found for Q1 2024; management commentary was provided via press release .

Estimates Context

S&P Global/Capital IQ consensus estimates for Q1 2024 EPS and revenue were unavailable at the time of this analysis; comparisons to Street consensus could not be made. Values would be retrieved from S&P Global if available.

Key Takeaways for Investors

Margin dynamics: Sequential NIM improvement to 3.38% suggests stabilization, but persistent YoY compression highlights ongoing funding cost pressure—watch deposit pricing and mix .
Liquidity and deposits: QoQ growth in deposits (+$13.0M) and cash (+$11.4M) indicates healthier liquidity posture; DDA growth (+$11.3M) is positive for future cost of funds .
Asset quality: NPLs improved QoQ with solid ACL coverage (~120%), but the rise in quarterly net charge-offs warrants monitoring into Q2 .
Office CRE exposure: NOO office loans are limited ($26.4M) with conservative LTVs (41%), mitigating sector-specific risk .
Uninsured deposits: Increase to 15.6% of deposits ($107.1M) is manageable but a watchpoint for market sensitivity and liquidity planning .
Efficiency ratio drift: Elevated to 75.96%; focus on operating discipline and technology/data processing spend to protect earnings .
With no formal guidance or Street benchmarks, trading likely hinges on narrative around NIM stabilization, deposit mix improvements, and asset quality trajectory; near term, sequential NIM and deposit mix trends can be catalysts, while medium term hinges on funding costs normalizing and disciplined growth .

Sources: AFBI Q1 2024 8-K and exhibits ; AFBI Q4 2023 8-K ; AFBI Q3 2023 8-K .

Affinity Bancshares, Inc. (AFBI)·Q1 2024 Earnings Summary