Chicago Atlantic Q2 FY23 Net Income Grows 15.8% YoY, Here Are The Details

Chicago Atlantic Real Estate Finance, Inc. REFI released its results for the second quarter ended June 30, 2023, revealing net interest income of approximately $13.7 million, representing a sequential decrease of 8.3%, and an increase of 19.9% compared to Q2 2022.

Q2 2023 Financial Highlights

• Total expenses of approximately $3.9 million before provision for current expected credit losses, representing a sequential decrease of 5.8%; primarily attributable to a $0.3 million decrease in net management and incentive fees.

• Net income of $8.6 million, an increase of 15.8% compared to $7.5 million in Q2 2022.

• The total reserve for current expected credit losses of $5.2 million increased sequentially by $1.1 million and amounts to approximately 1.6% of the portfolio principal balance of $318.0 million as of June 30, 2023.

• Distributable earnings of approximately $10.1 million, or $0.55 per weighted average diluted common share, representing a sequential decrease of 11.3%.

• Book value per common share of $15.06 as of June 30, 2023 compared with $15.04 as of March 31, 2023, primarily due to second quarter distributable earnings in excess of the regular quarterly dividend of $0.47, offset by the increase in the provision for current expected credit losses.

• As of June 30, 2023, the company had $43.0 million outstanding on its $100.0 million secured credit facility, resulting in a leverage ratio (debt to book equity) of approximately 16%.

John Mazarakis, executive chairman of Chicago Atlantic, stated, “Our capital structure is among the best in the mortgage REIT sector and the strongest in the cannabis space. We have no shortage of demand for capital from strong credit operators, and that demand is reflected in our pipeline. As planned, we intentionally held back on our loan originations pace during the quarter to remain highly selective on new investments. In doing so, we have been able to take advantage of a new program with the State of New York that offers the opportunity within the REIT to fund up to $50 million in long-term financing at an attractive rate.”

Dividends

On July 14, 2023, Chicago Atlantic paid a regular quarterly cash dividend of $0.47 per share of common stock for the second quarter of 2023 to common stockholders of record on June 30, 2023.

2023 Outlook
Chicago Atlantic affirmed its 2023 outlook previously issued on March 9, 2023.

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