AFC Gamma Reports Q2 2024 Earnings with Transition to Pure-Play Cannabis Lender

LOS ANGELES- AFC Gamma, Inc. a Florida-based commercial focused on the cannabis sector, reported solid financial results for the second quarter of 2024, reflecting its strategic shift to become a pure-play cannabis lender. The company posted GAAP net income of $16.4 million, or $0.80 per basic weighted average common share, and distributable earnings of $11.4 million, or $0.56 per share.

The transition to a cannabis-focused lender follows the spin-off of AFC Gamma’s commercial real estate portfolio on July 9, 2024, a move aimed at capitalizing on growing opportunities within the cannabis industry. CEO Daniel Neville expressed confidence in the company’s ability to meet or exceed its $100 million origination goal for the year, noting the positive momentum in portfolio management, including reduced reserves and increased book value.

For the quarter ending June 30, 2024, AFC Gamma generated $18.3 million in interest income, contributing to a total of $33.1 million for the first half of the year. This marks an increase from $16 million in Q2 2023 and $32.9 million for the first half of last year. Despite this growth, the company’s six-month net income of $16.3 million is lower than the $22.1 million reported in the first half of 2023.

AFC Gamma distributed $9.9 million in dividends during the second quarter, paying $0.48 per common share, compared to its distributable earnings of $0.56 per share. The company also reported a strong balance sheet with $457.9 million in total assets, including $170.2 million in cash, and $143.7 million in total liabilities.

The company’s recent earnings exceeded analyst expectations, with an EPS of $0.56 per share, beating the consensus estimate of $0.50. However, AFC Gamma’s stock has declined by 27.9% since the start of the year, underperforming the S&P 500’s 9.9% gain.

Looking forward, investor attention will likely focus on how AFC Gamma’s earnings estimates evolve in response to its recent financial performance and strategic repositioning within the cannabis sector.