Chicago Atlantic Real Estate Finance Q4 2022 Net Income Declines Sequentially 25.7% To $7.3M

Chicago Atlantic Real Estate Finance, Inc. REFI net income in 2022 was approximately $32.3 million, or $1.82 per weighted average diluted common share.

Q4 2022 Financial Highlights

• Net interest income of approximately $14.8 million, representing a sequential increase of 14.1%;

• Net income of approximately $7.3 million, or $0.41 per weighted average diluted common share, representing a sequential decrease of 25.7%;

• Distributable earnings of approximately $10.0 million, or $0.57 per weighted average diluted common share, representing a sequential decrease of 1.7%.

• Book value per common share of $14.86 as of December 31, 2022 compared with $15.23 as of September 30, 2022, primarily due to the special dividend of $0.29 per share declared in the fourth quarter.

• As of December 31, 2022, the company had borrowed $58.0 million on its $92.5 million secured credit facility, resulting in a leverage ratio of approximately 22%.

Full Year 2022 Financial Highlights

• Net interest income of approximately $48.9 million.

• Distributable earnings of approximately $37.2 million, or $2.10 per weighted average diluted common share.

• The company declared a total of $2.10 in dividends per common share during 2022, including regular quarterly dividends totaling $1.81 per diluted share and a special dividend of $0.29 per diluted share.

John Mazarakis, executive chairman of Chicago Atlantic, stated, “The safety and stability of our dividend is paramount, and we have worked hard to assemble a well-diversified portfolio with strong real estate and other asset collateral to create a fortress balance sheet. Cannabis lending is a nascent industry with tremendous upside within the limited-license states in the U.S. accompanied by a rapidly changing environment that requires constant vigilance. Our focus on creating a long-term, sustainable platform has positioned us to trade faster loan portfolio growth for higher returns and stronger credit operators without sacrificing the ability for Chicago Atlantic to continue to lead this market as its first and largest capital provider.”

Dividends

• On January 13, 2023, Chicago Atlantic paid a regular quarterly cash dividend of $0.47 per share of common stock for the fourth quarter of 2022 to common stockholders of record on December 30, 2022.

• On January 13, 2023, Chicago Atlantic paid a special cash dividend of $0.29 per share of common stock, which was included in the fiscal 2022 taxable income, to common stockholders of record on December 30, 2022.

2023 Outlook

• The company expects to maintain a dividend payout ratio of approximately 90% to 100% on a full year basis.

• The regular quarterly common dividend is expected to be a minimum of $0.47 per weighted average diluted share.

• If its net income requires additional dividends over and above the regular quarterly dividend amount to meet its 2023 taxable income distribution requirements, the company expects to meet that requirement with a special dividend in the fourth quarter of 2023.

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