Supports Standard Wellness’s Continued Growth in Missouri, Utah and OhioWEST PALM BEACH, Fla., April 02, 2025 (GLOBE NEWSWIRE) -- Advanced Flower Capital Inc. (Nasdaq:AFCG) (“AFC”) today announced that it has committed to a $14 million senior secured credit facility to various subsidiaries of Standard Wellness Holdings (“Standard Wellness”), a privately held multi-state operator of cannabis cultivation, processing, and retail facilities. $10.5 million of the senior secured credit facility was funded at clos ...

Advanced Flower Capital (NASDAQ: AFCG ), a cannabis mortgage REIT, disappointed investors with its last earnings report on March 13, sending the stock down over 20% in a single session. What happened? The dividend was cut from a quarterlyI objectively search for undervalued stocks of any size across a wide variety of industries using quantitative methods that I've thoroughly backtested for success. I believe the numbers are more important than the story (most of the time), as they tend to paint a more reali ...

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Financial Data and Key Metrics Changes - For Q4 2024, the company generated distributable earnings of $0.29 per basic weighted average share, with a GAAP net loss of $1 million or $0.05 per share [14][31] - For the fiscal year 2024, net interest income was $45.7 million, with distributable earnings of $34.9 million or $1.68 per share, and a GAAP net income of $16.8 million or $0.78 per share [31] - As of December 31, 2024, total assets were $402.1 million, with total shareholder equity of $201.4 million and a book value per share of $9.02 [33] Business Line Data and Key Metrics Changes - The company originated $135 million in new commitments for the fiscal year 2024, exceeding the goal of $100 million [9] - The weighted average portfolio yield to maturity was approximately 18% as of December 31, 2024 [33] - The company received $119 million in paydowns from five underperforming credits during 2024 [28] Market Data and Key Metrics Changes - The active deal pipeline as of March 1, 2025, was over $380 million, indicating strong demand for capital in the cannabis sector [10][17] - The company noted a growing supply-demand imbalance for debt capital in the cannabis industry, driven by refinancing activity and market expansions [18] Company Strategy and Development Direction - The company refocused efforts solely on the cannabis sector after spinning off its commercial real estate portfolio [9] - The management aims to diversify the portfolio while enhancing underwriting and reducing exposure to underperforming credits [9] - The company is targeting loan sizes between $10 million and $40 million for future investments [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities in the cannabis space, citing a demand for capital that exceeds supply [10] - The company is focused on supporting strong operators in attractive limited license states, despite challenges in the market [18] - Management acknowledged the impact of underperforming legacy loans on earnings but emphasized ongoing efforts to manage the portfolio effectively [15][28] Other Important Information - The company declared a first-quarter dividend of $0.23 per share, reflecting a sustainable payout based on current performing assets [15] - The CECL reserve was $30.6 million, approximately 10.4% of loans at carrying value, indicating a cautious approach to credit risk [33] Q&A Session Summary Question: Update on Justice Grown and next steps - Management indicated they would not negotiate in public but emphasized setting dividends at sustainable levels based on performing assets [38][39] Question: Commentary on the pipeline and opportunities - Management noted a robust pipeline of opportunities across refinancing, CapEx, and M&A, with a focus on good operators and strong credits [41][46] Question: Outlook for new fundings in 2025 - Management stated they would likely wait until the next quarter to set a new target for fundings, citing a better opportunity set than the previous year [50][53] Question: Clarification on liquidity and credit lines - Management confirmed approximately $89 million available under revolving credit facilities as of March 1, 2025 [55] Question: Sustainability of the dividend - Management clarified that the recent dividend adjustments were based on new developments and the need to set a sustainable payout level [56][59] Question: Demand for assets in New Jersey and Pennsylvania - Management refrained from commenting on specific market conditions but acknowledged the competitive landscape in those states [66] Question: Perspective on 280E tax implications - Management recognized the complexities of 280E and its impact on companies, expressing a desire for reform but noting it is not a priority for the current administration [72][73]

分组1 - AFC Gamma Inc. reported quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.39 per share, and down from $0.49 per share a year ago, representing an earnings surprise of -25.64% [1] - The company posted revenues of $9.22 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 26.33%, and down from $15.97 million year-over-year [2] - Over the last four quarters, AFC Gamma has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] 分组2 - The stock has added about 1.9% since the beginning of the year, while the S&P 500 has declined by -4.8% [3] - The current consensus EPS estimate for the coming quarter is $0.41 on $13.24 million in revenues, and for the current fiscal year, it is $1.75 on $57.3 million in revenues [7] - The Zacks Industry Rank indicates that the REIT and Equity Trust sector is currently in the bottom 19% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Fourth quarter 2024 GAAP net loss of $(1.0) million or $(0.05) per basic weighted average common share, with Distributable Earnings of $6.3 million or $0.29 per basic weighted average common share[1][3] - Full year 2024 GAAP net income of $16.8 million or $0.78 per basic weighted average common share, with Distributable Earnings of $34.9 million or $1.68 per basic weighted average common share[1][3] - Interest income for the fourth quarter 2024 was $9.2 million, while total expenses were $3.5 million[17] - The company reported a provision for current expected credit losses of $(5.3) million for the fourth quarter 2024[17] - The weighted average number of common shares outstanding for the full year 2024 was 20,821,239[17] Dividends - Dividend declared of $0.23 per common share for the first quarter 2025, payable on April 15, 2025[5] Strategic Focus - The CEO indicated a focus on capital preservation and disciplined investment strategies in the cannabis sector due to ongoing market challenges[4] - The company plans to diversify its portfolio and provide debt capital to successful operators in the cannabis industry[4] Corporate Events - The company issued a presentation of its fourth quarter and full year 2024 results, available on its Investor Relations website[7] - The 2025 Annual Shareholders Meeting is scheduled for May 19, 2025, with a record date of March 24, 2025[6]

Fourth quarter 2024 GAAP net loss of $(1.0) million or $(0.05) per basic weighted average common share and Distributable Earnings¹ of $6.3 million or $0.29 per basic weighted average common share Full year 2024 GAAP net income of $16.8 million or $0.78 per basic weighted average common share and Distributable Earnings of $34.9 million or $1.68 per basic weighted average common share Dividend declared of $0.23 per common share for the first quarter 2025 WEST PALM BEACH, Fla., March 13, 2025 (GLOBE NEWSWIRE) ...

Loan Origination and Management - As of March 1, 2025, the loan origination pipeline consists of potential new loans to cannabis operators with prospective total loan commitments of approximately $383 million[39]. - From January 1, 2020, to March 1, 2025, the management team sourced over $20.6 billion of loans across the cannabis industry[39]. - The management team has underwritten over 400 loans with a principal value exceeding $10.0 billion during their careers[41]. - The company intends to fund potential loans using unused borrowing capacity under its senior secured revolving credit facility and other sources[40]. - The investment strategy focuses on first and second lien loans secured by real estate collateral, specifically targeting loans greater than $10 million[102][106]. - Since January 1, 2020, the company had 9 active loans in its pipeline and passed on 828 of 871 sourced loan opportunities due to various risk factors[107]. - The investment process emphasizes a disciplined underwriting approach, with loans screened based on company profile, state dynamics, and regulatory matters[105][107]. - The company employs a comprehensive review and selection process to mitigate credit risk associated with its loans[549]. Management Agreement and Fees - The Management Agreement automatically renews every year on July 31 for a one-year period unless either party elects not to renew[56]. - The company has entered into multiple amendments to its Management Agreement to update investment guidelines and payment processes[49][50][51][52]. - The Management Agreement allows for termination by the company with 30 days' notice for breaches by the Manager, including fraud or bankruptcy[57]. - The company may terminate the Management Agreement with 60 days' notice if it defaults on material terms, incurring a termination fee[58]. - The Termination Fee upon Management Agreement termination equals three times the sum of the annual Base Management Fee and annual Incentive Compensation earned in the prior 12 months[98]. - For the year ended December 31, 2024, the Manager earned a Base Management Fee of approximately $3.6 million, net of a Base Management Fee Rebate of approximately $0.9 million[78]. - The Incentive Compensation fee payable to the Manager for the year ended December 31, 2024 was approximately $6.8 million, compared to $10.4 million for 2023[78]. - Total management fees for the year ended December 31, 2024 amounted to $13.3 million, down from $17.7 million in 2023[79]. - The Base Management Fees were revised to 0.375% of Equity as of the last day of each quarter[81]. - The Hurdle Amount for Incentive Compensation is now set at 2% of Adjusted Capital as of the last day of the preceding fiscal quarter[84]. - The Annual Hurdle Amount for Clawback Obligation is now equal to 8% of Adjusted Capital as of the last day of the preceding fiscal year[87]. - The Manager did not seek reimbursement for Mr. Tannenbaum's compensation for the year ended December 31, 2024[78]. - The total Base Management Fees for 2023 were approximately $3.7 million, net of a rebate of $1.7 million[78]. - The total management fees for 2023 included approximately $5.4 million before deductions[79]. Investment Guidelines and Compliance - The investment guidelines have been amended to focus on investments in first and second lien loans secured by mortgages to cannabis operators[53]. - The company has established Investment Guidelines to ensure compliance with REIT regulations and investment strategies[63]. - The Investment Committee is responsible for reviewing loan opportunities and ensuring compliance with Investment Guidelines[65]. - Co-investments with other investment vehicles managed by the Manager are permitted, with limited risk to the company[68]. - The company actively monitors the legal landscape affecting the cannabis industry to mitigate risks associated with its loan portfolio[556]. Market and Regulatory Environment - The cannabis industry remains illegal at the federal level, but state legalization efforts are expanding, with 41 states allowing commercial sales for medical purposes[123]. - The company’s borrowers face significant regulatory compliance burdens, which may limit their ability to expand and could impact the company's investments[124]. - The company is subject to various regulations, including the Equal Credit Opportunity Act and the USA Patriot Act, impacting its lending operations[112]. - The Dodd-Frank Act has introduced significant regulatory changes that may affect the company's operations, with ongoing developments in applicable regulations[113]. - The company has not been required to register under the Investment Company Act, maintaining its operations under the Section 3(c)(5) Exemption[115]. Financial Performance and Risk Management - Core Earnings for the quarter were $5,225,000, representing a 5.2% quarterly return on Adjusted Capital of $100 million[93]. - The Hurdle Amount was set at $2,000,000, which is a 2.0% quarterly return on the same Adjusted Capital[93]. - The total Incentive Compensation calculated was $1,045,000, derived from a Catch-Up Amount of approximately $666,667 and an Excess Earnings Amount of approximately $378,333[93]. - The company aims to provide attractive risk-adjusted returns through cash distributions and capital appreciation by funding loans to cannabis companies[100]. - The company operates in a highly competitive market for lending opportunities, facing competition from various institutional investors, including REITs, banks, and private equity funds[110]. - The company has a flexible funding structure that allows for quicker redeployment of capital compared to traditional REIT models, enhancing its competitive advantage[111]. - The company’s operating results depend on the difference between income earned on assets and the cost of borrowing, which is sensitive to market interest rates[544]. - Interest rate risk is managed through a mix of floating- and fixed-rate loans to mitigate the impact of rising interest rates[545]. - A hypothetical 100 basis points increase in the floating benchmark rate would result in an increase in annual interest income of approximately $8.3 million[545]. - The fair value of loans may fluctuate significantly due to market conditions, with a decrease of 50 bps or increase of 50 bps resulting in an unrealized gain (loss) of approximately $0.3 million[545]. - The largest credit facility accounted for approximately 22.2% of the aggregate outstanding principal balances and approximately 20.3% of total loan commitments, with a principal amount of $79.2 million outstanding[553]. - As of December 31, 2024, the company had eight floating-rate loans, representing approximately 44% of the portfolio based on aggregate outstanding principal balances[545]. - The top three borrowers represented approximately 48.2% of the aggregate outstanding principal balances as of December 31, 2024[553].

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to investment advice and positions held by contributors [1][2][3]. Group 1 - No stock, option, or similar derivative positions are held by the contributors in any mentioned companies [1]. - The article emphasizes that it is not financial or investment advice and encourages readers to conduct their own due diligence [2]. - Contributors may have personal positions in equities mentioned, but this is not disclosed in detail [3].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for AFC Gamma Inc. due to lower revenues, with the actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on March 13, 2025, with a consensus estimate of $0.39 per share, reflecting a year-over-year decrease of 20.4% [3]. - Revenues are projected to be $11.74 million, down 26.5% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 4.76% lower in the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -7.69%, complicating predictions for an earnings beat [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with positive readings being more predictive of earnings beats [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced positive surprises nearly 70% of the time [8]. Historical Performance - In the last reported quarter, AFC Gamma was expected to post earnings of $0.34 per share but delivered $0.35, resulting in a surprise of +2.94% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [13]. Conclusion - While AFC Gamma does not appear to be a compelling earnings-beat candidate, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [16].