Affinity Bancshares, Inc. (AFBI): Business Model Canvas [11-2024 Updated]

In the competitive landscape of banking, understanding the business model is crucial for stakeholders. Affinity Bancshares, Inc. (AFBI) stands out with its strategic partnerships and community-focused approach. This blog post delves into AFBI's Business Model Canvas, highlighting its key components such as value propositions, customer segments, and revenue streams. Discover how AFBI navigates the financial sector and creates value for its diverse clientele.

Affinity Bancshares, Inc. (AFBI) - Business Model: Key Partnerships

Federal Home Loan Bank of Atlanta

The Federal Home Loan Bank (FHLB) of Atlanta plays a crucial role in providing liquidity to Affinity Bancshares, Inc. (AFBI). As of September 30, 2024, AFBI had $54.0 million in FHLB advances. These advances are collateralized by loans totaling approximately $421.9 million. The interest rates on these advances range from 3.50% to 5.45%, depending on the maturity dates and terms.

Local Real Estate Agencies

Affinity Bancshares collaborates with local real estate agencies to facilitate mortgage lending. The bank's loan portfolio includes a significant portion of commercial and residential mortgages, which amounted to $697.6 million as of September 30, 2024. This partnership enables AFBI to leverage local market knowledge and enhance its lending capabilities.

Financial Technology Providers

Affinity Bancshares partners with financial technology providers to enhance its operational efficiency and customer service. This includes investments in digital banking solutions and data processing services. The bank reported non-interest expenses of $5.7 million for the three months ended September 30, 2024, which includes costs related to data processing.

Regulatory Bodies

As a regulated financial institution, Affinity Bancshares maintains partnerships with various regulatory bodies to ensure compliance with financial regulations. As of September 30, 2024, the bank exceeded all regulatory capital requirements, categorizing it as "well capitalized". This partnership is vital for managing risks and ensuring the bank's stability in the financial market.

Partnership	Type	Financial Impact	Details
Federal Home Loan Bank of Atlanta	Liquidity Provider	$54.0 million in advances	Collateralized by loans totaling $421.9 million
Local Real Estate Agencies	Mortgage Lending	$697.6 million in mortgage loans	Facilitates commercial and residential mortgage lending
Financial Technology Providers	Operational Efficiency	$5.7 million in data processing expenses	Investments in digital banking solutions
Regulatory Bodies	Compliance	Well capitalized status	Exceeds all regulatory capital requirements

Affinity Bancshares, Inc. (AFBI) - Business Model: Key Activities

Loan origination and servicing

As of September 30, 2024, Affinity Bancshares, Inc. reported gross loans amounting to $697.6 million, which reflects an increase of $37.7 million, or 5.7%, from $659.9 million at December 31, 2023. The breakdown of loans includes:

Loan Type	Balance (in thousands)	Change (in thousands)	Percentage Change
Commercial (secured by real estate - owner occupied)	$158,189	$498	0.3%
Commercial (secured by real estate - non-owner occupied)	$158,250	$13,150	9.1%
Commercial and industrial	$146,863	$6,456	4.6%
Construction, land and acquisition & development	$63,717	$16,032	33.6%
Residential mortgage 1-4 family	$52,684	($966)	(1.8%)
Consumer installment	$117,869	$2,526	2.2%

The total loans, net of allowance for credit losses, stood at $689.2 million at September 30, 2024, compared to $650.9 million at December 31, 2023.

Risk management and compliance

Affinity Bancshares maintains a robust risk management framework. As of September 30, 2024, the allowance for credit losses was $8.4 million, representing 1.20% of total loans, down from 1.35% at year-end 2023. The ratio of allowance for credit losses to non-performing loans was 172.4%. Provisions for credit losses were recorded at $213,000 for the nine months ended September 30, 2024, compared to $7,000 for the same period in 2023.

Deposit mobilization strategies

As of September 30, 2024, Affinity Bancshares reported total deposits of $683.8 million, an increase of $9.3 million, or 1.4%, from $674.4 million at December 31, 2023. Demand deposits rose by $9.2 million, or 3.9%, while money market accounts increased by $12.6 million, or 9.1%. Brokered certificates of deposit amounted to $107.3 million, with an average interest rate of 4.65% and an average maturity of 22 months.

Customer relationship management

Affinity Bancshares focuses on enhancing customer relationships through targeted services, particularly in the dental industry within Georgia. The company’s strategies are evident in its loan portfolio, which includes a significant number of commercial and industrial loans tailored for practice acquisitions and equipment financing. The total non-interest income for the three months ended September 30, 2024, was $566,000, reflecting a decrease of 10.2% from $630,000 in the same period last year.

Affinity Bancshares, Inc. (AFBI) - Business Model: Key Resources

Strong capital base with Tier 1 capital at 12.82%

Affinity Bancshares, Inc. maintains a robust capital structure, with a Tier 1 capital ratio of 12.82% as of September 30, 2024. This is significantly above the regulatory minimum of 6.00%, positioning the bank as well-capitalized under regulatory standards.

The following table outlines the capital ratios for Affinity Bancshares:

Capital Measure	Amount (in thousands)	Ratio	Regulatory Minimum
Common Equity Tier 1	$101,937	12.82%	4.50%
Total Capital	$111,138	13.97%	8.00%
Tier I Capital	$101,937	12.82%	6.00%
Tier I Capital to Average Assets	$101,937	11.66%	4.00%

Diverse loan portfolio totaling $697.6 million

As of September 30, 2024, Affinity Bancshares has a diverse loan portfolio valued at $697.6 million. This portfolio includes various types of loans:

• Construction Loans: $63.7 million (up 33.6% from December 31, 2023)
• Non-owner-occupied Commercial Real Estate Loans: $158.5 million (up 9.1%)
• Commercial and Industrial Loans: $147.4 million (up 4.6%)
• Owner-occupied Commercial Real Estate Loans: $176.1 million (up 0.3%)
• Consumer Installment Loans: $115.5 million (up 2.2%)
• Residential Mortgages: $54.0 million (down 1.8%)

The total loan growth from December 31, 2023, is $37.7 million, or 5.7%.

Experienced management team

Affinity Bancshares benefits from a seasoned management team with extensive experience in banking and financial services. The team's expertise includes:

• Strategic planning and execution
• Risk management and compliance
• Operational excellence and efficiency
• Customer relationship management

This experienced team is pivotal in navigating the complexities of the banking environment and ensuring sustainable growth.

Robust IT infrastructure for banking operations

Affinity Bancshares has invested significantly in a robust IT infrastructure to support its banking operations. This infrastructure includes:

• Advanced banking software systems for transaction processing and customer management
• Secure data management systems to protect customer information
• Digital banking platforms that facilitate online and mobile banking services
• Disaster recovery and business continuity plans to ensure operational resilience

These technological investments are essential in delivering a seamless banking experience to customers and enhancing operational efficiency.

Affinity Bancshares, Inc. (AFBI) - Business Model: Value Propositions

Competitive interest rates on loans

Affinity Bancshares offers competitive interest rates on loans, which are crucial for attracting borrowers. As of September 30, 2024, the average yield on loans increased to 6.03%, compared to 5.47% for the same period in 2023. Interest income from loans for the three months ended September 30, 2024, was $10.6 million, up from $9.1 million in 2023. The total loans outstanding reached $697.6 million as of September 30, 2024.

Personalized banking services

Affinity Bancshares emphasizes personalized banking services tailored to individual customer needs. This approach is reflected in the bank's customer satisfaction metrics and service offerings. Non-interest income for the three months ended September 30, 2024, included $364,000 from service charges on deposit accounts. Additionally, the bank maintains a strong focus on customer relationships, which enhances loyalty and retention.

Focus on community-oriented lending

The bank's commitment to community-oriented lending is evident in its lending strategy, which prioritizes local businesses and individuals. As of September 30, 2024, the bank's loan portfolio included $158.2 million in commercial loans secured by owner-occupied real estate and $158.3 million in commercial loans secured by non-owner-occupied real estate. This focus helps support the local economy and fosters a strong community presence.

Strong liquidity management

Affinity Bancshares maintains a robust liquidity position, crucial for financial stability. As of September 30, 2024, the bank had $54.0 million in Federal Home Loan Bank (FHLB) advances. The loan-to-deposit ratio was 102.0%, indicating effective management of funding sources relative to loan growth. The bank's total deposits increased to $683.8 million, up 1.4% from the previous period. Furthermore, the bank's capital ratios indicate a strong capital position, with a Common Equity Tier 1 ratio of 12.82% as of September 30, 2024.

Metric	September 30, 2024	September 30, 2023
Average Yield on Loans	6.03%	5.47%
Total Loans Outstanding	$697.6 million	$659.9 million
Non-Interest Income from Service Charges	$364,000	$426,000
FHLB Advances	$54.0 million	$40.0 million
Loan-to-Deposit Ratio	102.0%	97.8%
Total Deposits	$683.8 million	$674.4 million
Common Equity Tier 1 Ratio	12.82%	12.41%

Affinity Bancshares, Inc. (AFBI) - Business Model: Customer Relationships

Dedicated customer service teams

Affinity Bancshares has established dedicated customer service teams to enhance customer interactions. As of September 30, 2024, the company reported a total non-interest expense of $5.7 million for the third quarter, which includes salaries and employee benefits amounting to $3.3 million. This investment in personnel reflects the bank's commitment to providing high-quality customer support.

Regular financial health check-ins

Affinity Bancshares conducts regular financial health check-ins for its customers. This initiative aims to improve customer retention and satisfaction. During the nine months ended September 30, 2024, the bank's net income was $4.1 million, indicating a focus on maintaining customer relationships through proactive engagement.

Community engagement initiatives

The bank participates in various community engagement initiatives. These efforts are reflected in their increased deposits, which rose by $9.3 million, or 1.4%, to $683.8 million as of September 30, 2024. This growth can be attributed to a strong emphasis on community involvement, which helps build trust and loyalty among customers.

Online and mobile banking support

Affinity Bancshares offers robust online and mobile banking support, enhancing customer accessibility. As of September 30, 2024, the average yield on interest-earning deposits was reported at 5.09%, facilitating competitive online banking services. The bank's total interest-earning assets amounted to $838.1 million, which underscores the importance of digital solutions in their customer relationship strategy.

Category	Q3 2024 Amount (in thousands)	Q3 2023 Amount (in thousands)	Change (%)
Net Income	$1,730	$1,623	6.6%
Total Non-Interest Expense	$5,704	$5,406	5.5%
Salaries and Employee Benefits	$3,257	$3,007	8.3%
Total Deposits	$683,800	$674,400	1.4%
Total Interest-Earning Assets	$838,053	$814,801	2.9%

Affinity Bancshares, Inc. (AFBI) - Business Model: Channels

Branch locations in Atlanta, Georgia

Affinity Bancshares operates several branch locations throughout Atlanta, Georgia. As of September 30, 2024, the company reported total assets of approximately $878.6 million, reflecting an increase of $35.3 million, or 4.2%, from $843.3 million at December 31, 2023. The bank's strategic presence in the Atlanta area allows it to effectively serve a growing customer base.

Online banking platform

Affinity Bancshares has invested significantly in its online banking platform to enhance customer accessibility. As of September 30, 2024, the average yield on interest-earning deposits was 5.09%, and the average balance of interest-earning deposits was $52.3 million. This platform allows customers to manage their accounts, apply for loans, and access various banking services without the need to visit a physical branch.

Mobile banking applications

The mobile banking applications of Affinity Bancshares provide customers with convenient access to their accounts. The bank reported an increase in mobile banking users, contributing to a 3.4% increase in the average balance of loans to $681.9 million for the nine months ended September 30, 2024. The mobile app facilitates real-time banking transactions, including deposits, transfers, and bill payments.

Direct marketing and community outreach

Affinity Bancshares engages in direct marketing and community outreach initiatives to strengthen its customer relationships. For the nine months ended September 30, 2024, the bank reported total deposits of $683.8 million, an increase of 1.4% from $674.4 million at December 31, 2023. These efforts include targeted marketing campaigns and participation in community events, aimed at increasing brand awareness and customer acquisition.

Channel	Details	Financial Impact
Branch Locations	Multiple branches in Atlanta, Georgia	Total assets of $878.6 million as of September 30, 2024
Online Banking	Accessible online banking platform	Average yield on interest-earning deposits at 5.09%
Mobile Banking	Mobile application for banking transactions	Average loan balance increased by 3.4% to $681.9 million
Direct Marketing	Community outreach and targeted marketing	Total deposits increased by 1.4% to $683.8 million

Affinity Bancshares, Inc. (AFBI) - Business Model: Customer Segments

Individual consumers seeking mortgages

Affinity Bancshares, Inc. offers a variety of mortgage products tailored for individual consumers. As of September 30, 2024, the residential mortgage loans for 1-4 family homes amounted to $52.7 million, showing a slight decrease from $53.7 million at December 31, 2023. The bank focuses on providing competitive rates and flexible terms to meet the diverse needs of individual borrowers, particularly first-time homebuyers and those looking to refinance existing loans.

Small to medium-sized enterprises

The bank actively serves small to medium-sized enterprises (SMEs) by offering commercial loans secured by real estate. The outstanding balance for commercial loans secured by owner-occupied real estate was $158.2 million as of September 30, 2024, while non-owner-occupied commercial loans were $158.3 million. Affinity Bancshares provides tailored financial solutions, including lines of credit and equipment financing, aimed at supporting the growth and operational needs of SMEs in the Atlanta metropolitan area.

Real estate investors

Affinity Bancshares has a significant focus on real estate investors, providing financing options for both residential and commercial properties. The commercial and industrial loans segment amounted to $146.9 million, reflecting the bank's commitment to supporting investment activities. The institution caters to investors looking for acquisition and development financing, as evidenced by the $63.7 million in construction, land, and development loans reported as of September 30, 2024.

Professionals in the dental industry

The bank has developed a niche market by providing specialized financial services for professionals in the dental industry. This includes commercial loans for practice acquisitions and equipment financing. The total loan portfolio reflects a robust engagement with dental professionals, emphasizing Affinity Bancshares' understanding of the unique financial needs of this sector. The bank's strategic focus on this segment aids in fostering long-term relationships with dental practices throughout Georgia and neighboring states.

Customer Segment	Loan Amount (Sept 30, 2024)	Loan Amount (Dec 31, 2023)	Growth Rate
Individual Consumers (Mortgages)	$52.7 million	$53.7 million	-1.86%
Small to Medium-sized Enterprises	$158.2 million (Owner-Occupied)	$157.7 million (Owner-Occupied)	0.32%
Real Estate Investors	$146.9 million (Commercial & Industrial)	$140.4 million (Commercial & Industrial)	4.6%
Dental Industry Professionals	Segment Not Disclosed	Segment Not Disclosed	N/A

Affinity Bancshares, Inc. (AFBI) - Business Model: Cost Structure

Interest expenses on deposits and borrowings

The interest expense incurred by Affinity Bancshares, Inc. for the three months ended September 30, 2024, was reported at $4.9 million, an increase of $765,000 compared to the same period in 2023. For the nine months ended September 30, 2024, the total interest expense rose to $14.0 million, up from $11.1 million in 2023. Notably, interest expenses on deposits alone reached $12.3 million for the nine months, rising from $10.0 million in the prior year.

Within this, the interest expense on certificates of deposit increased by $1.2 million to $6.9 million, with the average rate paid on these deposits rising to 4.21%. Additionally, interest expenses on money market accounts also saw significant growth, totaling $3.5 million for the nine months ended September 30, 2024.

Interest expense on borrowings was recorded at $1.7 million for the nine months ended September 30, 2024, up from $1.1 million in 2023.

Operating costs including salaries and benefits

Affinity Bancshares reported total non-interest expenses of $17.993 million for the nine months ended September 30, 2024, which reflects an increase of $2.109 million or 13.3% compared to the same period in 2023. Operating costs specifically related to salaries and employee benefits amounted to $9.853 million, an increase of $806,000 or 8.9% from $9.047 million in the previous year.

The breakdown of non-interest expenses for the three months ended September 30, 2024, is as follows:

Expense Type	2024 (in thousands)	2023 (in thousands)	Change (in thousands)
Salaries and employee benefits	$3,257	$3,007	$250
Occupancy	$600	$637	($37)
Data processing	$520	$525	($5)
Professional fees	$356	$160	$196
Other	$971	$1,077	($106)
Total non-interest expenses	$5,704	$5,406	$298

IT infrastructure and maintenance costs

Data processing costs for the nine months ended September 30, 2024, were reported at $1.538 million, a slight increase of $34,000 or 2.2% compared to the $1.504 million incurred in the same period of 2023. This cost reflects the ongoing investments in IT infrastructure necessary for efficient operations and customer service management.

Marketing and customer acquisition expenses

Marketing expenses have not been explicitly detailed in the latest reports; however, the total non-interest expenses category, which includes marketing and customer acquisition costs, increased by $2.109 million to $17.993 million for the nine months ended September 30, 2024. This increase may indicate a strategic push towards enhancing customer acquisition efforts amidst a competitive banking environment.

Affinity Bancshares, Inc. (AFBI) - Business Model: Revenue Streams

Interest income from loan portfolio

For the nine months ended September 30, 2024, Affinity Bancshares reported interest income from loans of $30.6 million, representing a 17.0% increase from $26.1 million for the same period in 2023. The average balance of loans increased by $22.5 million, or 3.4%, to $681.9 million. The average yield on loans rose to 5.99% from 5.30% year-over-year.

Service charges on deposit accounts

Service charges on deposit accounts are a key component of non-interest income. For the nine months ended September 30, 2024, total non-interest income was $1.9 million, a decrease of 10.2% compared to $2.1 million for the same period in 2023. This decline was primarily attributed to a decrease in merchant services volume.

Gains from investment securities

Affinity Bancshares recorded interest income on available-for-sale and held-to-maturity securities amounting to $2.9 million for the nine months ended September 30, 2024, up from $2.8 million in the prior year. The average balance of these securities was $81.7 million.

Fees for ancillary banking services

The bank generates additional revenue through various ancillary services. For the nine months ended September 30, 2024, the total fees for ancillary banking services contributed to non-interest income, which was $1.9 million. The breakdown of non-interest income showed a decrease of $5,000 compared to the $1.9 million recorded in the same period of 2023.

Revenue Stream	2024 Amount (9 months)	2023 Amount (9 months)	Change (%)
Interest income from loans	$30.6 million	$26.1 million	17.0%
Service charges on deposit accounts	$1.9 million	$2.1 million	-10.2%
Gains from investment securities	$2.9 million	$2.8 million	3.6%
Fees for ancillary banking services	$1.9 million	$1.9 million	0.0%

Updated on 16 Nov 2024

Resources:

1. Affinity Bancshares, Inc. (AFBI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Affinity Bancshares, Inc. (AFBI)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Affinity Bancshares, Inc. (AFBI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.