AFBI stock intrinsic value fair value estimate & owner earnings analysis

Affinity Bancshares is the holding company for Affinity Bank, a national bank headquartered in Covington, Georgia, operating three full-service offices (two in Newton County, one in Atlanta) and gathering deposits nationwide through a digital brand, FitnessBank, that rewards customers for meeting fitness goals. The bank primarily makes commercial real estate, commercial and industrial, and residential loans in its Georgia footprint, alongside a specialty commercial lending niche: roughly $118 million of loans to dental professionals, secured by practice assets, made mostly to solo and small practices in Georgia and adjoining states. The company converted from a mutual to a fully public stock structure in mid-2021 and has since bought back a meaningful portion of its shares outstanding, most recently authorizing a new repurchase program in January 2026. Because this is a bank, the analysis values what the business earns for shareholders after it pays for its deposits and other funding and after setting aside a real cost for expected loan losses -- that is the bank's owner earnings. Debt in the usual sense doesn't apply here: deposits and borrowings are the raw material of a bank's business, not something to subtract from a separate valuation of operations. Earnings since the 2021 conversion have moved with the interest-rate cycle: $1.09 per diluted share in 2021, compressing to $0.83 by 2024 as the cost of deposits and borrowings rose faster than what the bank earned on its loans, then recovering to $1.29 in 2025 as loan yields caught up. The typical, through-the-cycle level over this five-year span is $1.06 per share, and that is the starting point for the base case, rather than either the 2024 trough or the 2025 rebound. Base case: credits two demonstrated, ongoing mechanisms -- modest organic growth in loans and deposits (roughly 3% a year, the pace sustained since 2021) and a shrinking share count from ongoing buybacks (roughly 2% a year, consistent with the pattern since the IPO and the freshly authorized 2026 program). Together these support about 5% annual growth in per-share earnings for the next five years, tapering to 3% for years six through ten as the extra capital raised in the 2021 conversion is fully deployed. Beyond year ten, the model assumes the bank continues operating at that level without further assumed growth -- a going-concern community bank franchise, but with no specific evidence of expansion into new markets or products that would justify crediting further compounding. This works out to about $24 per share. Bear case: a repeat of the same margin squeeze the bank already lived through in 2022-2024, this time cutting starting earnings by about 15-25% and holding them near the prior trough for a few years before a partial, incomplete recovery. This also reflects the risk that the dental-lending concentration or the nationwide, rate-sensitive FitnessBank deposit base proves less sticky in a stress scenario (about 15% of deposits are uninsured). The bank remains comfortably well-capitalized throughout even in this case, so it is a case of reduced profitability, not solvency risk. This works out to about $15.50 per share. Bull case: credits a continuation of the margin recovery already achieved in 2025 (not a hoped-for improvement, but the current actual run rate), plus the same buyback and organic-growth mechanisms as the base case running at a faster pace, for about 7% annual growth over five years tapering to 4%. This works out to about $33.50 per share. What could break the base case: the model assumes the recent shift back toward faster loan and deposit growth (assets grew from $867 million to $925 million in the five quarters to March 2026, versus roughly flat growth for the three years before that) continues at a moderate pace rather than reverting to the slower 2022-2024 trend; if growth instead reverts to that slower pace, the base case would be a few percentage points below $24. Margin-of-safety price: given the cyclicality already demonstrated in this business (a 24% earnings swing from a rate cycle that could recur) and a small share count, a margin of safety of roughly one-third against the base case is used, putting the margin-of-safety price at about $16 per share.