Advanced Flower Capital Inc. · NASDAQ:AFCG
Advanced Flower Capital — Q3 2023 Earnings Presentation
22 slides from Advanced Flower Capital's earnings presentation, Nov 8, 2023
Slide 1: Third Quarter 2023 Investor Presentation
Third Quarter 2023 Investor Presentation November 8, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements contained in this presentation constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend su
Slide 3: Legal Disclaimers
Legal Disclaimers Important Notices This presentation is by AFC Gamma, Inc. (“AFCG” or the “Company”), a publicly traded company that has elected to be taxed as a REIT for federal income tax purposes and is being furnished in connection with AFCG’s financial results. This presentation is provided fo
Slide 4: Sections
Sections 1. Why AFC Gamma 2. Market Opportunity 3. Corporate Overview 4. Q3 2023 Financial Highlights 5. Appendix
Slide 5: Why AFC Gamma
Why AFC Gamma Backed by its management team’s years of collective lending and real estate experience, AFC Gamma is well-positioned in the commercial real estate (“CRE”) sector Institutional Commercial Experienced, Cycle-Tested Poised to Capitalize on Target Mortgage REIT Leadership Team Market Oppor
Slide 6: AFC Gamma Company Overview
AFC Gamma Company Overview Institutional Commercial Mortgage REIT Company Highlights(2) (NASDAQ: AFCG) • AFC Gamma is an institutional lender to the commercial real estate sector, with a specialization in loans backed by real estate collateral, cash flows and licenses to state law compliant cannabis
Slide 7: Experienced, Cycle-Tested Leadership Team
Experienced, Cycle-Tested Leadership Team Leonard Dan Robyn Brandon Tannenbaum, CFA Neville Tannenbaum Hetzel Founder, Chief Chief Executive Partner, President Chief Financial Officer Investment Officer(1) Officer(1) and Treasurer • 25+ years of experience in • 15+ years of experience in • 15+ years
Slide 8: Attractive Market Opportunity in CRE
Attractive Market Opportunity in CRE Macroeconomic Environment + State of the CRE Sector…(1) • Real GDP has increased 2.1% in 2023, compared to Net New CRE Loans by Large US Banks(4) an increase of 2.1% YoY in 2022, and a bigger ($ in billions) increase of 5.9% in 2021(2) • The Federal Reserve began
Slide 9: Diversified Cannabis Portfolio Across the United States
Diversified Cannabis Portfolio Across the United States Cannabis is a rapidly expanding 41 states and DC have legalized As of November 3, 2023, market in the United States with a medical cannabis; of those, 22 AFCG's loan portfolio included limited supply of institutional states and DC have legalize
Slide 10: Poised to Capitalize on Target Market Opportunity
Poised to Capitalize on Target Market Opportunity AFC Gamma expanded the Company’s strategy to include CRE lending with an aim to take advantage of market opportunities in this environment AFCG’s Competitive Advantages ✓Leadership team’s extensive credit and real estate knowledge resulting in discip
Slide 11: Disciplined and Selective Investment Process
Disciplined and Selective Investment Process AFC Gamma is involved in all key phases of the lending process, with an aim to source loans with high return potential and downside risk protection AFCG maintains a direct origination platform, which works to create enhanced yields and allows us to put in
Slide 12: Rigorous Underwriting Criteria
Rigorous Underwriting Criteria Borrower & Operations Real Estate & Structure State-by-State / Local Analysis • Type of operations – industrial, land, retail, • Type of real estate – industrial, land, • Population statistics in location area condo, office, rental, etc. retail, office, multifamily, ho
Slide 13: AFCG Maintains a Strong Deal Funnel and Pipeline
AFCG Maintains a Strong Deal Funnel and Pipeline(1) Through its direct origination platform, AFC Gamma sources deals via various leads in select jurisdictions, maintaining a robust pipeline of active opportunities $10.6Bn $19.3Bn $29.9Bn Total Deals Sourced(2) Deals Sourced $743MM $9.4B (1) Total Co
Slide 14: Investment Portfolio Activity
Investment Portfolio Activity Current Commitments(1) ($ in millions) $483 $502 $56 $447 $433 $433 $419 $420 $62 $421 $409 $46 $32 $12 $10 $10 Weighted average $56 $49 $446 $421 $423 $423 yield-to-maturity of ~19% $297 $401 $389 $397 $371 $54 $364 as of $243 November 3, 2023(2) Q3 2021 Q4 2021 Q1 202
Slide 15: AFC Gamma Portfolio Summary
AFC Gamma Portfolio Summary AFCG’s manager AFCM has reviewed 1,079 deals, representing over $29 billion in aggregate value* 23 Current 1,010 17 12 Current Rejected* CRE Deals Cannabis Deals Current Funded in Review in Review Principal Original Funding Loan AFCG Loan, net % of Total TOTAL Cash Intere
Slide 16: AFC Gamma Q3 2023 Book Value
AFC Gamma Q3 2023 Book Value(1) $1.53 $16.65 $16.56 ($1.52) ($0.10) Book Value YTD 2023 YTD 2023 Regular YTD 2023 CECL, Book Value December 31, 2022 Distributable Dividend FV Adjustments and September 30, 2023 Earnings* Stock Compensation * Distributable Earnings is a non-GAAP financial measure. See
Slide 17: Distributable Earnings & Dividends
Distributable Earnings & Dividends Distributable Earnings & Dividends $0.69 $0.62 $0.56 $0.59 $0.56 $0.62 $0.56 $0.57 $0.56 $0.52 $0.50 $0.55 $0.49 $0.48 $0.44 $0.43 $0.49 $0.48 (1) (2) (3) (4) (5) (6) (7) (8) (9) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Distributable
Slide 18: Appendix
QWAFC GAMMA Appendix
Slide 19: Appendix A: Balance Sheet
Appendix A AFC Gamma Balance Sheet As of Sep t emb er 3 0 , 2 0 2 3 D ecemb er 3 1, 2 0 2 2 (unaudited) A sset s Loans held for investment at fair value (cost of $72,573,622 and $100,635,985 at September 30, 2023 and December 31, 2022, respectively, net) $ 70,010,878 $ 99,226,051 Loans held for inve
Slide 20: Appendix B: Income Statement
Appendix B AFC Gamma Income Statement T hr ee mo nt hs end ed N ine mo nt hs end ed Sep t emb er 3 0 , Sep t emb er 3 0 , (unaudited) 2023 2022 2023 2022 R evenue Interest income $ 16,806,193 $ 19,785,583 $ 52,981,867 $ 60,072,643 Interest expense (1,532,928) (1,644,088) (4,776,863) (5,091,207) N et
Slide 21: Appendix C: Reconciliation of GAAP Net Income to Distributable Earnings
Appendix C Reconciliation of GAAP Net Income to Distributable Earnings T hr ee mo nt hs end ed N ine mo nt hs end ed Sep t emb er 3 0 , Sep t emb er 3 0 , 2023 2022 2023 2022 N et inco me $ 7,9 79 ,8 75 $ 11,4 8 0 ,519 $ 3 0 ,14 0 ,4 8 2 $ 3 2 ,9 9 4 ,3 12 Adjustments to net income: Stock-based comp
Slide 22: www.afcgamma.com
www.afcgamma.com
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