AFC Gamma Inc. (NASDAQ:AFCG) (“AFCG” or “AFC Gamma”) today announced its results for the quarter ended September 30, 2021.
Financial Highlights
- Net income of $7.9 million in Q3 2021, or $0.48 per basic weighted average share of common stock
- Distributable earnings of $7.2 million in Q3 2021, or $0.44 per basic weighted average share of common stock
- Book value per common share of $16.69 as of September 30, 2021
- Closed $119.2 million of new commitments in Q3 2021 and funded $89.3 million of new and existing commitments
- Closed $50.0 million of new commitments and funded $52.3 million of new and existing commitments in the fourth quarter as of November 1, 2021
- Paid a dividend of $0.43 per common share on October 15, 2021 for Q3 2021, representing a 13.2% increase from the prior quarter
- Received a BBB+ investment grade rating from Egan-Jones in October 2021
- Subsequent to the third quarter, AFCG closed its $100 million 5.75% senior unsecured debt offering
“We are pleased with the progress we are making on our business plan. Since the start of the third quarter, AFC Gamma closed on over $165 million in new commitments, and our pipeline remains robust,” stated Leonard Tannenbaum, AFC Gamma’s Chief Executive Officer. “Importantly, our successful completion of a $100 million unsecured debt offering established AFC Gamma’s initial debt cost of capital and enables the continued expansion of our loan portfolio. As a result of our growth and performance, we were also pleased to increase our quarterly dividend by 13.2% and reward our shareholders. We look forward to continuing to amplify our presence as a lender within the growing cannabis industry while delivering enhanced shareholder value.”
Portfolio and Investment Activity
- Total loan commitments of $296.9 million ($243.0 million funded, $53.9 million unfunded) across 15 portfolio companies, as of September 30, 2021
- Total loan commitments of $341.9 million as of November 1, 2021, with $292.4 million of outstanding principal across 14 portfolio companies
- The portfolio’s weighted average yield to maturity was approximately 20% as of November 1, 2021, compared to 21% as of September 30, 2021
- All loans are current and performing
Results of Operations for the Quarter Ended September 30, 2021
- Total interest income of $10.6 million, an increase of $1.9 million, or 21.4%, compared to the prior quarter
- Total expenses of $3.8 million, an increase of $0.9 million, or 28.7%, compared to the prior quarter
- GAAP net income of $7.9 million, an increase of $3.3 million, or 71.4%, compared to the prior quarter
- Earnings of $0.48 per basic weighted average common share
- Distributable earnings of $7.2 million, or $0.44 per basic weighted average common share (see “Non-GAAP Financial Metrics” below for a reconciliation of GAAP net income to Distributable Earnings)
Dividend Payment
- On October 15, 2021, AFC Gamma paid a regular quarterly cash dividend of $0.43 per share of common stock to its stockholders of record as of September 30, 2021
- The aggregate amount of the regular cash dividend payment of $0.43 per share was approximately $7.1 million, which represents a 13.2% increase per share compared to the prior quarter
Capitalization and Liquidity
- In July 2021, and in conjunction with AFCG’s follow-on public offering in June 2021, the underwriters partially exercised their over-allotment option to purchase 269,650 additional shares at $20.50 per share, totaling $5.0 million in net offering proceeds, less commissions and expenses.
- On November 3, 2021, AFCG issued $100 million in aggregate principal amount of 5.75% senior unsecured notes due 2027. AFCG intends to use net proceeds from the offering to fund debt investments and for general corporate purposes.
- On November 3, 2021, AFCG amended its secured revolving line of credit to, among other things, increase the available funding amount from $50 million to $75 million, reduce the interest rate from 6% to 4.75%, and extend the maturity date from December 31, 2021 to September 30, 2022. The line of credit, as amended, includes a one-time commitment fee and an unused fee, and requires that all payments of interest and fees go toward supporting charitable organizations, in each case subject to the terms of the Revolving Credit Agreement, as amended.
Additional Information
AFC Gamma issued a presentation of its third quarter 2021 results, titled “Third Quarter 2021 Earnings Presentation,” which can be viewed at www.afcgamma.com under the Investor Resources section. AFCG also filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, with the Securities and Exchange Commission on November 4, 2021.
AFC Gamma routinely posts important information for investors on its website, www.afcgamma.com. AFCG intends to use this webpage as a means of disclosing material information, for complying with our disclosure obligations under Regulation FD and to post and update investor presentations and similar materials on a regular basis. AFCG encourages investors, analysts, the media and others interested in AFCG to monitor the Investors section of its website, in addition to following its press releases, SEC filings, public conference calls, presentations, webcasts and other information posted from time to time on the website. To sign-up for email-notifications, please visit the “Email Alerts” section of the website under the “IR Resources” section.
Conference Call & Discussion of Financial Results
AFC Gamma, Inc. will host a conference call at 8:30 am (Eastern Time) on Thursday, November 4, 2021 to discuss its quarterly financial results. All interested parties are welcome to participate. The call will be available through a live audio webcast at the Investor Relations section of AFCG’s website at www.afcgamma.com, or live by calling 1-833-693-0548 (domestic) or 1-661-407-1588 (international). All callers will need to enter the Conference ID number 9115448 and reference “AFC Gamma Q3 2021 Earnings Call” after being connected with the operator. The complete webcast will be archived for 90 days on the AFCG’s website. A telephone playback of the conference call will also be available from 12:00 pm Eastern Time on Thursday, November 4, 2021 until 11:00 am Eastern Time on Friday, November 12, 2021, 2021 by calling 855-859-2056 (domestic) and 404-537-3406 (international). For all replays, please reference Conference ID number 9115448.
