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Chicago Atlantic Real Estate Finance Announces Third Quarter 2024 Financial Results

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Chicago Atlantic Real Estate Finance (NASDAQ: REFI) reported its Q3 2024 financial results with net income of $11.2 million, or $0.56 per diluted share, up 21.7% sequentially. The portfolio includes $362.3 million in total loan principal across 29 companies, with a weighted average yield of 18.3%. The company had total gross originations of $32.7 million in Q3. Notable developments include securing a $50 million unsecured term loan at 9% interest and receiving a BBB+ investment grade rating. The company maintains strong liquidity with approximately $80 million available and affirmed its 2024 outlook.

Chicago Atlantic Real Estate Finance (NASDAQ: REFI) ha riportato i risultati finanziari del Q3 2024 con un utile netto di 11,2 milioni di dollari, ovvero 0,56 dollari per azione diluita, in aumento del 21,7% rispetto al trimestre precedente. Il portafoglio include 362,3 milioni di dollari in totale di capitale prestato attraverso 29 aziende, con un rendimento medio ponderato del 18,3%. L'azienda ha registrato origini lorde totali di 32,7 milioni di dollari nel Q3. Sviluppi significativi includono l'ottenimento di un prestito non garantito di 50 milioni di dollari con un tasso d'interesse del 9% e l'assegnazione di un rating investment grade BBB+. L'azienda mantiene una forte liquidità con circa 80 milioni di dollari disponibili e ha confermato le sue previsioni per il 2024.

Chicago Atlantic Real Estate Finance (NASDAQ: REFI) informó sus resultados financieros del Q3 2024 con ingresos netos de 11,2 millones de dólares, o 0,56 dólares por acción diluida, un aumento del 21,7% secuencialmente. La cartera incluye 362,3 millones de dólares en total de capital de préstamo a través de 29 empresas, con un rendimiento promedio ponderado del 18,3%. La compañía tuvo un total de originaciones brutas de 32,7 millones de dólares en el Q3. Los desarrollos notables incluyen la obtención de un préstamo a plazo no garantizado de 50 millones de dólares al 9% de interés y la recepción de una calificación de grado de inversión BBB+. La compañía mantiene una sólida liquidez con aproximadamente 80 millones de dólares disponibles y confirmó su perspectiva para 2024.

시카고 애틀랜틱 부동산 금융 (NASDAQ: REFI)는 Q3 2024 재무 결과를 보고하였으며, 순이익 1,120만 달러를 기록하였고, 희석 주당 0.56달러로, 전 분기 대비 21.7% 증가하였습니다. 포트폴리오에는 29개 기업에 걸쳐 총 3억 6,230만 달러의 대출 원금이 포함되어 있으며, 가중 평균 수익률은 18.3%입니다. 회사는 Q3에 총 3천 270만 달러의 원료 창출을 기록하였습니다. 주요 발전 사항으로는 9% 이자로 보장되지 않은 5천만 달러의 대출을 확보하고 BBB+ 투자 등급을 받은 것입니다. 회사는 약 8천만 달러의 유동성을 보유하고 있으며, 2024년 전망을 확인하였습니다.

Chicago Atlantic Real Estate Finance (NASDAQ: REFI) a annoncé ses résultats financiers pour le Q3 2024, avec un revenu net de 11,2 millions de dollars, soit 0,56 dollar par action diluée, en hausse de 21,7% par rapport au trimestre précédent. Le portefeuille comprend un total de 362,3 millions de dollars en principal de prêts à travers 29 entreprises, avec un rendement moyen pondéré de 18,3%. L'entreprise a réalisé des origines brutes totales de 32,7 millions de dollars au Q3. Parmi les développements notables figurent l'obtention d'un prêt à terme non garanti de 50 millions de dollars à 9% d'intérêt et la réception d'une note de crédit BBB+. L'entreprise maintient une forte liquidité avec environ 80 millions de dollars disponibles et a confirmé ses prévisions pour 2024.

Chicago Atlantic Real Estate Finance (NASDAQ: REFI) hat seine finanziellen Ergebnisse für das Q3 2024 veröffentlicht, mit einem Nettogewinn von 11,2 Millionen Dollar, oder 0,56 Dollar pro verwässerter Aktie, was einem Anstieg von 21,7% im Vergleich zum Vorquartal entspricht. Das Portfolio umfasst 362,3 Millionen Dollar an Gesamtdarlehenshauptsumme über 29 Unternehmen, mit einer gewichteten durchschnittlichen Rendite von 18,3%. Das Unternehmen hatte im Q3 eine Gesamtsumme von 32,7 Millionen Dollar an brutto Neuvergaben. Zu den bemerkenswerten Entwicklungen gehört die Sicherstellung eines ungesicherten Terminkredits über 50 Millionen Dollar mit 9% Zinsen und die Erteilung einer BBB+ Investment-Grade-Bewertung. Das Unternehmen hält eine starke Liquidität mit etwa 80 Millionen Dollar zur Verfügung und hat seine Prognose für 2024 bestätigt.

Positive
  • Net income increased 21.7% quarter-over-quarter to $11.2 million
  • Portfolio yield remains strong at 18.3%
  • Secured $50 million unsecured term loan with BBB+ rating
  • Total gross originations of $32.7 million in Q3
  • Book value per share increased to $15.05 from $14.92
Negative
  • Portfolio weighted average yield decreased from 18.7% to 18.3%
  • Real estate collateral coverage declined from 1.3x to 1.2x in Q3
  • Variable rate loan percentage decreased from 76.4% to 62.8%

Insights

The Q3 2024 results show solid performance with notable metrics: net income of $11.2 million ($0.56 per share), representing a 21.7% sequential increase. The loan portfolio maintains a healthy 18.3% weighted average yield despite a slight decrease from Q2. The company's strong liquidity position of $80 million and recent BBB+ investment grade rating demonstrate financial stability.

Key positives include reduced credit loss reserves, improved book value per share and strategic portfolio management. The shift toward fixed-rate loans (increasing to 51.8%) provides better interest rate risk protection. The new $50 million unsecured term loan at 9% interest offers additional growth capital while maintaining a conservative leverage ratio of 18%.

CHICAGO, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) (“Chicago Atlantic” or the “Company”), a commercial mortgage real estate investment trust, today announced its results for the third quarter ended September 30, 2024.

Peter Sack, Co-Chief Executive Officer, noted, “We have managed our portfolio and its maturities very well throughout 2024 with extensions, modifications and refinancings while improving credit quality and loan coverage. We knew this was the year to rise to this opportunity by sticking to our stringent underwriting and working collaboratively with our borrowers. I am pleased with how we have responded. A strong pipeline in both existing states and a growing number of new states that have recently added adult use, or soon to do so, keeps us well-positioned for the balance of the year and into 2025. With the increased liquidity generated by our recent unsecured note, we expect to put more of this accretive capital to work soon. Chicago Atlantic remains at the forefront of this industry with the largest platform focused on cannabis, and we expect to continue to lead as a preferred capital partner.”

Portfolio Performance

  • As of September 30, 2024, total loan principal outstanding of $362.3 million, across 29 portfolio companies, with a $6.0 million unfunded commitment. The unfunded commitment was advanced in October 2024.
  • Portfolio weighted average yield to maturity was approximately 18.3% as of September 30, 2024, compared with 18.7% as of June 30, 2024, primarily due to repricing amendments related to improved collateral and borrower performance, as well as the 50-basis point decrease in the prime rate impacting our variable rate portfolio.
  • Real estate collateral coverage was 1.2x as of September 30, 2024, compared to 1.3x as of June 30, 2024. As of November 7, 2024, real estate collateral coverage is approximately 1.3x.
  • The percentage of loans, including those held for investment and held for sale, which bear a variable interest rate was 62.8% as of September 30, 2024, compared with 76.4% as of June 30, 2024. Fixed rate loans and loans with a prime rate floor greater than or equal to the prevailing prime rate increased from 31.9% as of December 31, 2023 to 51.8% as of October 31, 2024.

Investment Activity

  • During the third quarter, Chicago Atlantic had total gross originations of $32.7 million, of which $24.0 million and $8.7 million was funded to new borrowers and existing borrowers, respectively.
  • Subsequent to quarter end, the Company has funded an additional $36.5 million of gross originations, which included the advance of the unfunded commitment that existed on September 30, 2024 of $6.0 million, as well as a $25.0 million advance on a new credit facility to an operator in Illinois.

Capital Activity and Dividends

  • During the third quarter, the Company increased the current commitments on its secured revolving credit facility from $105.0 million to $110.0 million. The facility matures in June 2026 with a one-year extension option, subject to customary conditions, and can facilitate additional commitments up to $150.0 million.
  • As of September 30, 2024, the Company had $54.0 million drawn on its secured revolving credit facility, resulting in a consolidated leverage ratio (debt to book equity) of approximately 18%.
  • On October 18, 2024, the Company entered into a $50.0 million unsecured term loan with a fixed interest rate of 9.0% and a maturity date of October 2028. The unsecured note can be prepaid in whole or in part at any time and can be repaid without penalty after two years. The full balance of the loan was drawn at closing and used to repay current outstanding borrowings on the Company’s senior secured revolving credit facility and for other working capital purposes.
  • Subsequent to quarter end, in connection with the senior unsecured term loan, the Company received an investment grade rating of BBB+ from Egan-Jones for the unsecured term loan and corporate credit rating.
  • As of November 7, 2024, the Company has approximately $94.5 million available on its secured revolving credit facility, and total liquidity, net of estimated liabilities, of approximately $80 million.
  • On October 15, 2024, Chicago Atlantic paid a regular quarterly cash dividend of $0.47 per share of common stock for the third quarter of 2024 to common stockholders of record on September 30, 2024.

Third Quarter 2024 Financial Results

  • Net interest income of approximately $14.5 million as of September 30, 2024, compared to $13.2 million as of June 30, 2024. During the quarter, we recognized approximately $0.7 million in prepayment and other fee income.
  • Interest expense decreased approximately $0.1 million due to lower weighted average borrowings during the comparative period ending June 30, 2024.
  • Total expenses of approximately $4.2 million before provision for current expected credit losses, representing a sequential decrease of approximately 1%.
  • Net Income of approximately $11.2 million, or $0.56 per weighted average diluted common share, representing a sequential increase of 21.7% on a per share basis.
  • The total reserve for current expected credit losses decreased sequentially by $1.0 million to $4.1 million and amounts to approximately 1.1% of the aggregate portfolio principal balance of $362.3 million as of September 30, 2024.
  • Distributable Earnings of approximately $11.2 million, or $0.56 per weighted average diluted common share, representing a quarter over quarter increase of 12.0% on a per share basis.
  • Book value per common share of $15.05 as of September 30, 2024, compared with $14.92 as of June 30, 2024. On a fully diluted basis, there were 20,060,677 and 20,057,977 common shares outstanding as of September 30, 2024 and June 30, 2024, respectively.

2024 Outlook

Chicago Atlantic affirmed its 2024 outlook previously issued on March 12, 2024.

Conference Call and Quarterly Earnings Supplemental Details

Chicago Atlantic will host a conference call and live audio webcast, both open for the general public to hear, later today at 9:00 a.m. Eastern Time. The number to call for this interactive teleconference is (833) 630-1956 (international callers: 412-317-1837). The live audio webcast of the Company’s quarterly conference call will be available online in the Investor Relations section of the Company’s website at www.refi.reit. The online replay will be available approximately one hour after the end of the call and archived for one year.

Chicago Atlantic posted its Third Quarter 2024 Earnings Supplemental on the Investor Relations page of its website. Chicago Atlantic routinely posts important information for investors on its website, www.refi.reit. The Company intends to use this website 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. The Company encourages investors, analysts, the media and others interested in Chicago Atlantic to monitor the Investor Relations page of its website, in addition to following its press releases, SEC filings, publicly available earnings calls, presentations, webcasts and other information posted from time to time on the website. Please visit the IR Resources section of the website to sign up for email notifications.

About Chicago Atlantic Real Estate Finance, Inc.

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) is a market-leading commercial mortgage REIT utilizing significant real estate, credit and cannabis expertise to originate senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States. REFI is part of the Chicago Atlantic platform which has offices in Miami, Florida, and Chicago, Illinois and has deployed over $2.2 billion in credit and equity investments to date.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views and projections with respect to, among other things, future events and financial performance. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward- looking statements. These forward-looking statements, including statements about our future growth and strategies for such growth, are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. More information on these risks and other potential factors that could affect our business and financial results is included in our filings with the SEC. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact:
Tripp Sullivan
SCR Partners
IR@REFI.reit

 
CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.
CONSOLIDATED BALANCE SHEETS
 
  September 30,
2024
  December 31,
2023
 
  (unaudited)    
Assets      
Loans held for investment $338,270,022  $337,238,122 
Loans held for investment - related party (Note 8)  16,402,488   16,402,488 
Loans held for investment, at carrying value  354,672,510   353,640,610 
Current expected credit loss reserve  (4,090,950)  (4,972,647)
Loans held for investment at carrying value, net  350,581,560   348,667,963 
Loans held for sale - related party, at fair value (Note 8)  6,000,000   - 
Cash and cash equivalents  6,760,433   7,898,040 
Other receivables and assets, net  614,762   705,960 
Interest receivable  484,361   1,004,140 
Related party receivables  1,471,621   107,225 
Debt securities, at fair value  -   842,269 
Total Assets $365,912,737  $359,225,597 
       
Liabilities      
Revolving loan $54,000,000   66,000,000 
Dividend payable  9,267,714   13,866,656 
Related party payables  1,570,544   2,051,531 
Management and incentive fees payable  1,669,116   3,243,775 
Accounts payable and other liabilities  1,357,718   1,135,355 
Interest reserve  2,580,887   1,074,889 
Total Liabilities  70,445,979   87,372,206 
Commitments and contingencies (Note 9)      
       
Stockholders' equity      
Common stock, par value $0.01 per share, 100,000,000 shares authorized and 19,634,482 and 18,197,192 shares issued and outstanding, respectively  196,345   181,972 
Additional paid-in-capital  299,721,916   277,483,092 
Accumulated deficit  (4,451,503)  (5,811,673)
Total stockholders' equity  295,466,758   271,853,391 
       
Total liabilities and stockholders' equity $365,912,737  $359,225,597 


CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
  Three months ended September 30, 2024  Three months ended September 30, 2023  For the nine months ended September 30, 2024  For the nine months ended September 30, 2023 
Revenues            
Interest income $16,258,744  $15,183,450  $46,624,842  $46,369,976 
Interest expense  (1,799,351)  (1,449,143)  (5,742,333)  (4,062,365)
Net interest income  14,459,393   13,734,307   40,882,509   42,307,611 
             
Expenses            
Management and incentive fees, net  1,669,116   1,601,387   5,198,738   5,539,059 
General and administrative expense  1,254,062   1,251,307   3,898,864   3,833,733 
Professional fees  468,652   491,107   1,327,659   1,598,376 
Stock based compensation  845,524   540,426   2,213,150   942,605 
(Decrease) increase in provision for current expected credit losses  (989,597)  (41,351)  (884,789)  1,193,880 
Total expenses  3,247,757   3,842,876   11,753,622   13,107,653 
Change in unrealized gain on debt securities, at fair value  -   85,567   (75,604)  112,767 
Realized gain on debt securities, at fair value  -   -   72,428   - 
Net Income before income taxes  11,211,636   9,976,998   29,125,711   29,312,725 
Income tax expense  -   -   -   - 
Net Income $11,211,636  $9,976,998  $29,125,711  $29,312,725 
             
Earnings per common share:            
Basic earnings per common share $0.57  $0.55  $1.53  $1.62 
Diluted earnings per common share $0.56  $0.54  $1.49  $1.60 
             
Weighted average number of common shares outstanding:            
Basic weighted average shares of common stock outstanding  19,625,190   18,175,467   19,094,462   18,052,293 
Diluted weighted average shares of common stock outstanding  20,058,417   18,562,930   19,531,691   18,269,171 


Distributable Earnings and Adjusted Distributable Earnings

In addition to using certain financial metrics prepared in accordance with GAAP to evaluate our performance, we also use Distributable Earnings and Adjusted Distributable Earnings to evaluate our performance. Each of Distributable Earnings and Adjusted Distributable Earnings is a measure that is not prepared in accordance with GAAP. We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss); provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for current expected credit losses and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors. We define Adjusted Distributable Earnings, for a specified period, as Distributable Earnings excluding certain non-recurring organizational expenses (such as one- time expenses related to our formation and start-up). We believe providing Distributable Earnings and Adjusted Distributable Earnings on a supplemental basis to our net income as determined in accordance with GAAP is helpful to stockholders in assessing the overall performance of our business. As a REIT, we are required to distribute at least 90% of our annual REIT taxable income and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of such taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons that stockholders invest in our common stock, we generally intend to attempt to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our Board. Distributable Earnings is one of many factors considered by our Board in authorizing dividends and, while not a direct measure of net taxable income, over time, the measure can be considered a useful indicator of our dividends.

In our Annual Report on Form 10-K, we defined Distributable Earnings so that, in addition to the exclusions noted above, the term also excluded from net income Incentive Compensation paid to our Manager. We believe that revising the term Distributable Earnings so that it is presented net of Incentive Compensation, while not a direct measure of net taxable income, over time, can be considered a more useful indicator of our ability to pay dividends. This adjustment to the calculation of Distributable Earnings has no impact on period-to-period comparisons. Distributable Earnings and Adjusted Distributable Earnings should not be considered as substitutes for GAAP net income. We caution readers that our methodology for calculating Distributable Earnings and Adjusted Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our reported Distributable Earnings and Adjusted Distributable Earnings may not be comparable to similar measures presented by other REITs.

             
  Three months ended  Three months ended  Nine months ended  Nine months ended 
  September 30, 2024  September 30, 2023  September 30, 2024  September 30, 2023 
Net Income $11,211,636  $9,976,998  $29,125,711  $29,312,725 
Adjustments to net income            
Stock based compensation  845,524   540,426   2,213,150   942,605 
Amortization of debt issuance costs  91,678   146,676   182,593   405,778 
(Decrease) increase in provision for current expected credit losses  (989,597)  (41,351)  (884,789)  1,193,880 
Change in unrealized gain on debt securities, at fair value  -   (85,567)  75,604   (112,767)
Realized gain on debt securities, at fair value  -   -   (72,428)  - 
Distributable Earnings $11,159,241  $10,537,182  $30,639,841  $31,742,221 
Adjustments to Distributable Earnings  -   -   -   - 
Adjusted Distributable Earnings $11,159,241  $10,537,182  $30,639,841  $31,742,221 
Basic weighted average shares of common stock outstanding (in shares)  19,625,190   18,175,467   19,094,462   18,052,293 
Adjusted Distributable Earnings per Weighted Average Share $0.57  $0.58  $1.61  $1.76 
Diluted weighted average shares of common stock outstanding (in shares) $20,058,417  $18,562,930  $19,531,691   18,269,171 
Adjusted Distributable Earnings per Weighted Average Share $0.56  $0.57  $1.57  $1.74 

FAQ

What was REFI's net income for Q3 2024?

Chicago Atlantic Real Estate Finance reported net income of $11.2 million, or $0.56 per weighted average diluted common share, for Q3 2024.

What is REFI's total loan portfolio size as of September 30, 2024?

REFI's total loan principal outstanding was $362.3 million across 29 portfolio companies as of September 30, 2024.

What was REFI's Q3 2024 dividend payment?

REFI paid a quarterly cash dividend of $0.47 per share for Q3 2024 on October 15, 2024.

What new financing did REFI secure in October 2024?

REFI secured a $50.0 million unsecured term loan with a fixed interest rate of 9.0% and a maturity date of October 2028.

Chicago Atlantic Real Estate Finance, Inc.

NASDAQ:REFI

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