The following is a summary of the AFC Gamma, Inc. (AFCG) Q4 2023 Earnings Call Transcript:
Financial Performance:
AFC Gamma reported distributable earnings of $0.49 per basic weighted average share of common stock for Q4 2023.
The company has declared a fourth consecutive quarterly dividend of $0.48.
AFC reported Q4 net interest income at $16 million but realized a net loss of $9.2 million largely due to unrealized losses and increased provisions for credit losses.
Their annual net interest income was $64.2 million, with distributable earnings amounting to $41.4 million and a GAAP net income of $21 million.
The company finished year with total assets of $466.6 million and cash and cash equivalents of $121.6 million.
Company's shareholder equity is $320.1 million and book value per share is $15.64.
Provisions for credit losses increased to 8.7% of loans at carrying value, from 4.7% in the previous quarter.
Business Progress:
AFC Gamma plans to spin-off its commercial real estate portfolio into an independent publicly-traded REIT, Sunrise Realty Trust, by mid-2024.
The company is focusing on lending to the cannabis industry, specifically in expanding regions like Ohio, Pennsylvania, and Georgia.
Borrowers Private Company A and L are liquidating assets and selling operations respectively, easing their financial burden.
AFC's active pipeline of deals in the cannabis sector is at $279 million.
Following due diligence visits to various operations, the CEO aims to address portfolio issues, diversify AFC's portfolio and originate over $100 million of new deals.
Subsequent to the year-end, AFC funded $48.9 million across two commercial real estate mezzanine loans, with an active pipeline of $701 million.
As of March 1, 2024, portfolio constituted $416.3 million of principal outstanding across 14 loans with a weighted average portfolio yield of approximately 21%.
The line of credit, amounting to $60 million, was fully repaid early 2024, with majority of cash now earning interest at approximately 4.5% to 5.3%.
More details: AFC Gamma IR
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