Advanced Flower Capital Inc. (formerly AFC Gamma, Inc.) reported net income from continuing operations of $13.9 million, or $0.64 per basic share, for the year ended December 31, 2024, compared to $20.7 million, or $1.01 per basic share, in 2023. Interest income decreased by $18.3 million (26%), primarily due to loans placed on non-accrual status and lower capital deployment. This decrease was partially offset by higher fee income ($3.8 million increase) and OID income ($3.5 million increase) resulting from loan exits and prepayments. Management fees decreased by $0.1 million (2.9%), and incentive fees decreased by $3.6 million (34.7%) due to lower Core Earnings and Adjusted Capital.
The company's loan portfolio consisted of 16 loans with an aggregate originated commitment of approximately $361.3 million and outstanding principal of $356.8 million as of December 31, 2024. The portfolio had a weighted-average estimated yield-to-maturity of approximately 18%. Significant portfolio activity during 2024 included principal prepayments, loan sales, and the initiation of foreclosure proceedings on certain loans. The company also entered into several new credit facilities during the year, totaling $128.8 million in new fundings. As of March 1, 2025, the loan origination pipeline included potential new loans totaling $383 million.
The company's cash and cash equivalents totaled $103.6 million as of December 31, 2024, down from $90.4 million in 2023. Net cash provided by operating activities was $18.3 million in 2024, compared to $21 million in 2023. The company's financing activities included borrowings and repayments under its revolving credit facility and an unsecured revolving credit facility with an affiliate, as well as proceeds from an at-the-market offering program. The company declared cash dividends totaling $0.78 per share in 2024 and $1.02 per share in 2023. A one-time dividend of $0.15 per share was also paid in connection with the spin-off of Sunrise Realty Trust, Inc.
Advanced Flower Capital Inc. completed the spin-off of its commercial real estate portfolio (Sunrise Realty Trust, Inc.) on July 9, 2024. Following the spin-off, the company's investment guidelines were amended to focus solely on first and second lien loans to cannabis operators in states with legalized cannabis. The company's management is provided by AFC Management, LLC, under a management agreement that automatically renews annually. The company's financial statements include a reconciliation of GAAP net income to distributable earnings, a non-GAAP measure used by management.
The company's 10-K filing also details numerous risk factors, including competition, limited operating history, concentration of loans, regulatory risks related to the cannabis industry, liquidity risks, interest rate fluctuations, and risks related to its REIT status and management agreement. The company's outlook for the first two quarters of 2025 anticipates distributable earnings of approximately $0.23 per basic weighted average common share, but this is subject to change.
About Advanced Flower Capital Inc.
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