Chicago Atlantic Real Estate Finance, Inc. REFI, a commercial real estate finance company, released its results for the first quarter ended March 31, 2023, revealing net interest income of approximately $14.9 million, representing a sequential increase of 1.0%, and a 52.7% increase compared to $9.8 million in Q1 2022.
Q1 2023 Financial Highlights
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Total expenses of approximately $4.1 million before provision for current expected credit losses, representing a sequential decrease of 18.0%; primarily attributable to a $1.2 million decrease in net management and incentive fees.
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Net income of approximately $10.7 million, or $0.60 per weighted average diluted common share, representing a sequential increase of 46.3%.
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The total reserve for current expected credit losses of $4.1 million increased sequentially by $0.1 million and amounts to approximately 1.3% of the portfolio principal balance of $320.2 million as of March 31, 2023.
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Distributable earnings of approximately $11.1 million, or $0.62 per weighted average diluted common share, representing a sequential increase of 10.6%.
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Book value per common share of $15.04 as of March 31, 2023 compared with $14.86 as of December 31, 2022, primarily due to first quarter distributable earnings in excess of the regular quarterly dividend of $0.47.
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As of March 31, 2023, the company had $37.5 million outstanding on its $92.5 million secured credit facility, resulting in a leverage ratio (debt to book equity) of approximately 14%. Subsequent to quarter end, the company has borrowed an incremental $5.5 million on the credit facility.
John Mazarakis, executive chairman of Chicago Atlantic, stated, “The better-than-anticipated results reflect the benefit of four principal paydowns during the quarter and the timing of our redeployment of the proceeds. We are entering what we believe will be a period of favorable demand for capital from a proven lending platform such as ours. With our fortress balance sheet, we have purposefully reined in our originations to continue to focus on higher yielding investments and funding vertically integrated operators with the strongest credit profile.”
Dividends
On April 14, 2023, Chicago Atlantic paid a regular quarterly cash dividend of $0.47 per share of common stock for the first quarter of 2023 to common stockholders of record on March 31, 2023.
2023 Outlook
Chicago Atlantic affirmed its 2023 outlook previously issued on March 9, 2023.
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