Executive Summary

Q2 EPS of $0.16 on net income of $1.0M, down 36% YoY on higher professional fees tied to the announced APCU transaction; QoQ EPS fell from $0.20 as expenses outpaced robust NII growth .
Net interest margin expanded sharply to 3.71% from 3.38% in Q1 and 3.17% a year ago as asset yields outpaced funding cost increases — a key positive inflection for earnings power .
Credit quality improved materially: non‑performing loans fell to $3.0M (from $7.2M in Q1; $7.4M at YE), lifting ACL/NPL coverage to 282% vs 120% at YE; however, YTD net charge‑offs rose to $0.46M vs $0.07M in 1H23 .
Deposits increased YTD to $689.7M with demand deposits up $18.4M; uninsured deposits remain manageable at ~15.4% of total, broadly stable vs Q1 (15.6%) .
No formal guidance and no earnings call transcript available; Street consensus from S&P Global was unavailable at time of writing, so beat/miss cannot be assessed (consensus unavailable via S&P Global).

What Went Well and What Went Wrong

What Went Well
- Net interest margin expanded to 3.71% as “increases in our yield on earning assets” exceeded funding cost increases, boosting NII to $7.6M (+13% YoY, +12% QoQ) .
- Credit metrics strengthened: NPLs declined to $3.0M and ACL/NPL coverage rose to 282%, reflecting improved asset quality and strong reserve coverage .
- Deposit mix improved: demand deposits rose $18.4M YTD; uninsured deposits held at ~15.4%, supporting liquidity .
What Went Wrong
- Noninterest expense surged $1.4M YoY to $6.7M, driven by “professional fees related to our recently announced merger with Atlanta Postal Credit Union” and higher compensation, pressuring earnings and the efficiency ratio (78.7% vs 71.7% YoY) .
- Provision for credit losses of $0.21M (unfunded commitments) vs zero a year ago; YTD net charge‑offs rose to $0.46M vs $0.07M in 1H23 .
- No formal guidance and no transcript/Q&A to clarify outlook, leaving investors without management’s forward view (no document found via transcript search).

Financial Results

Quarterly P&L trend (oldest → newest)

Metric	Q4 2023	Q1 2024	Q2 2024
Total Interest Income ($M)	$11.083	$11.221	$12.222
Net Interest Income ($M)	$6.705	$6.749	$7.568
Noninterest Income ($M)	$0.606	$0.584	$0.706
Provision for Credit Losses ($M)	-$0.049	$0.000	$0.213
Noninterest Expense ($M)	$5.432	$5.570	$6.719
Net Income ($M)	$1.514	$1.335	$1.031
Diluted EPS ($)	$0.23	$0.20	$0.16
Net Interest Margin (%)	3.32%	3.38%	3.71%
Efficiency Ratio (%)	74.30%	75.96%	78.74%

YoY comparison

Metric	Q2 2023	Q2 2024
Total Interest Income ($M)	$10.863	$12.222
Net Interest Income ($M)	$6.693	$7.568
Noninterest Income ($M)	$0.678	$0.706
Provision for Credit Losses ($M)	$0.000	$0.213
Noninterest Expense ($M)	$5.284	$6.719
Net Income ($M)	$1.590	$1.031
Diluted EPS ($)	$0.24	$0.16
Net Interest Margin (%)	3.17%	3.71%
Efficiency Ratio (%)	71.68%	78.74%

Balance sheet and funding (period-end; oldest → newest)

Metric	Dec 31, 2023	Mar 31, 2024	Jun 30, 2024
Total Assets ($M)	$843.3	$869.5	$872.6
Gross Loans ($M)	$659.9	$674.5	$692.6
Total Deposits ($M)	$674.4	$687.4	$689.7
Borrowings ($M)	$40.0	$51.8	$51.8
Uninsured Deposits ($M, %)	$95.5 (14.0%)	$107.1 (15.6%)	$106.3 (15.4%)
Demand Deposits (% of Total)	36%	37%	36%

Key KPIs and asset quality

KPI	Dec 31, 2023	Mar 31, 2024	Jun 30, 2024
Non‑Performing Loans ($M)	$7.4	$7.2	$3.0
ACL / Loans (%)	1.35%	1.27%	1.22%
ACL / NPLs (%)	120.1%	120.0%	282.0%
Tangible BVPS ($)	$16.08	$16.36	$16.64
Equity / Assets (%)	14.41%	14.18%	14.33%
Cost of Funds (%)	2.36% (4Q23)	2.42% (1Q24)	2.47% (2Q24)
Net Charge‑offs (YTD) ($M)	$0.404 (FY23)	—	$0.460 (1H24) vs $0.072 (1H23)

KPIs/segment notes: No reportable operating segments; notable specialty exposure includes $29.4M of non‑owner occupied office loans at 46% avg LTV (medical/dental $15.0M; other tenants $14.4M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
All metrics	FY 2024	N/A	No formal guidance provided	Maintained (no guidance)

(No guidance or outlook ranges were provided in the Q2 materials – –.)

Earnings Call Themes & Trends

(No Q2 earnings call transcript was available; themes reflect company disclosures across recent quarters.)

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Net Interest Margin	Q4: NIM 3.32% declined as funding costs outpaced asset yields . Q1: NIM 3.38%, YoY decline tied to cost of funds > asset yields .	NIM rose to 3.71% as asset yields exceeded deposit/borrowing cost increases .	Improving
Deposit Mix & Liquidity	Q4: Shift to CDs/brokered deposits; deposits +$17.2M YoY; uninsured 14% . Q1: DDA +$11.3M QoQ; uninsured 15.6% .	Deposits +$15.3M YTD; DDA +$18.4M YTD; uninsured 15.4% .	Stable to improving mix
CRE/Office Exposure	$26.7M NOO office, 41% LTV (YE) . Q1: $26.4M, 41% LTV .	$29.4M NOO office, 46% LTV; diversified tenants .	Modest growth; low LTVs
Credit Quality	NPLs $7.4M (YE), ACL/NPL 120% . Q1: NPLs $7.2M; ACL/NPL 120% .	NPLs down to $3.0M; ACL/NPL 282%; provision $0.21M (unfunded) .	Material improvement
Expenses & Efficiency	Q4 expenses $5.4M; efficiency 74.3% . Q1 $5.6M; 76.0% .	Expenses $6.7M on APCU deal fees; efficiency 78.7% .	Deteriorated on merger costs
Borrowings/Liquidity	YE borrowings $40.0M . Q1 borrowings $51.8M .	Borrowings $51.8M as liquidity tool .	Elevated

Management Commentary

“Net interest margin for the three months ended June 30, 2024 increased to 3.71%… The increases in the margin relate to increases in our yield on earning assets exceeding our increases in our deposits and borrowing costs.” (Q2 press release) .
“Non‑interest expense increased $1.4 million… due to increases in professional fees related to our recently announced merger with Atlanta Postal Credit Union and increases in salaries and employee benefits.” (Q2 press release) .
“Deposits increased by $15.3 million to $689.7 million… with an $18.4 million increase in demand deposits…” (Q2 press release) .
“Non‑performing loans decreased to $3.0 million… [and] the allowance for credit losses as a percentage of non‑performing loans was 282.0%...” (Q2 press release) .

Q&A Highlights

No public Q2 earnings call transcript was found; therefore, Q&A highlights and any in‑call guidance clarifications are unavailable (no earnings-call-transcript documents for AFBI in 2024).

Estimates Context

Wall Street consensus (S&P Global) for Q2 2024 EPS and revenue was unavailable at time of writing; as a result, we cannot assess beat/miss or magnitude versus estimates (consensus unavailable via S&P Global).

Key Takeaways for Investors

NIM inflection to 3.71% is the key positive; if sustained, it supports operating leverage as funding costs stabilize .
Expense drag from APCU transaction fees is the primary earnings headwind near term; normalization post‑deal could re‑rate the efficiency ratio from 78.7% closer to low‑70s historically .
Credit trends improved markedly with NPLs down and coverage up; continued discipline on office‑CRE (low LTV, diversified tenants) reduces tail risk .
Deposit base looks stable with growing DDA and manageable uninsured exposure (~15%); this underpins liquidity alongside steady borrowings .
No guidance and no call transcript introduce communication opacity; monitor subsequent filings/closing updates on the APCU transaction and any fee run‑rate commentary .
Near‑term trading implication: prints may be headline‑constrained by elevated opex, but improving core margin/credit could be a support on weakness; the APCU process and related disclosures are catalysts. External legal “investigation” PRs around the deal also featured post‑quarter, indicating scrutiny but no change to disclosed terms in company releases .

Source Documents Reviewed

Q2 2024 8‑K with Exhibits (press release and supplemental financials) –.
Q2 2024 press release (Business Wire) –.
Q1 2024 8‑K and press release –.
Q4 2023 8‑K and press release –.
Additional press notices around APCU transaction by third‑party law firms (context) .

Affinity Bancshares, Inc. (AFBI)·Q2 2024 Earnings Summary