Nasdaq-Traded AFC Gamma Reports 41% YoY Drop In Net Income, Plans To Be Pure-Play Cannabis Lender In 2024

Cannabis-focused commercial real estate finance company AFC Gamma Inc. AFCG announced on Thursday its results for the fourth quarter and year ended Dec. 31, 2023.

The company reported net interest income of $64.2 million in fiscal 2023, compared to $74.7 million in fiscal 2022. Net interest income for the fourth quarter totaled roughly $16 million.

"AFC Gamma has made significant progress on portfolio management initiatives in the fourth quarter and into 2024 in spite of a challenging cannabis backdrop," Daniel Neville, who assumed the role of the company's CEO this past October.

Q4 And FY 2023 Financial Highlights

• Fourth quarter 2023 GAAP net loss of $9.2 million or $0.45 per basic weighted average common share, and distributable earnings of $10 million or $0.49 per basic weighted average common share.
• Full-year 2023 GAAP net income of $21 million or $1.02 per basic weighted average common share, compared to roughly $36 million in 2022, and distributable earnings of $41.4 million or $2.04 per basic weighted average common share.
• Total expenses for 2023 amounted to $21.5 million, down from $23.4 million in the prior year.
• As of Dec. 31, 2023, the company had $466.6 million in total liabilities and shareholders' equity, compared to $519.2 million in the prior year.

Common Stock Dividend

AFC Gamma said on Dec. 15, distributed $9.8 million in dividends, its board of directors declared a regular cash dividend of $0.48 per common share for the fourth quarter of 2023, during which it distributed $9.8 million in dividends.

For the full year 2023, the company distributed $40.9 million in dividends or $2 per common share.

On March 4, the board declared a regular cash dividend of $0.48 per common share for the first quarter of 2024. The first quarter 2024 dividend will be payable on April 15, 2024, to common shareholders of record as of March 31, 2024.

2024 Outlook

"Looking ahead to 2024, we are excited to return to being a pure-play cannabis lender following the completion of the spin-off of our commercial real estate portfolio," Neville said. "We continue to see lending opportunities with the emergence of Cannabis 3.0 operators that have clean capital stacks and are looking to build or expand. As an early mover and one of the leading debt providers in the cannabis industry, AFC Gamma is uniquely positioned to capitalize on these opportunities and deploy capital at attractive risk-adjusted returns."

Related News

• Cannabis Lender Reports 30% YoY Drop In Q3 Net Income, Taps Cannabis Veteran As New CEO
• AFC Gamma Net Income Grows 6.9% YoY, What About Dividend Payments?
• AFC Gamma Declares Q2 2023 Dividends And Announces Share Repurchase Program

AFCG Price Action

AFC Gamma's shares traded 0.09% lower at $11.38 per share at the time of writing on Thursday morning.

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