CHICAGO, May 09, 2023 (GLOBE NEWSWIRE) -- Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) (“Chicago Atlantic” or the “Company”), a commercial real estate finance company, today announced its results for the first quarter ended March 31, 2023.
John Mazarakis, Executive Chairman of Chicago Atlantic, noted, “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.”
Tony Cappell, Chief Executive Officer, added, “Our portfolio has continued to perform well with the percentage of floating rate loans increasing to 88%, the weighted average yield to maturity remaining above 19% and our loan to values well below the rest of the lenders in the industry. The balance sheet is under levered, and we have over $50 million of liquidity available to selectively fund the best operators in the cannabis industry.”
PortfolioPerformance
InvestmentActivity
Dividends
FirstQuarter2023FinancialResults
2023OutlookChicago Atlantic affirmed its 2023 outlook previously issued on March 9, 2023.
ConferenceCallandQuarterlyEarningsSupplementalDetailsThe Company will host a conference call later today at 9:00 a.m. Eastern Time. Interested parties may access the conference call live via webcast on Chicago Atlantic’s investor relations website or may participate via telephone by registering using this online form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the conference call webcast will be archived on the Company’s website for at least 30 days.
Chicago Atlantic posted its First Quarter 2023 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.
AboutChicagoAtlanticRealEstateFinance,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 over 40 employees and has deployed over $1.8 billion across more than 50 loans.
Forward-LookingStatementsThis 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 SullivanSCR Partners(615) 942-7077IR@REFI.reit
CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.CONSOLIDATEDBALANCESHEETS
March 31, 2023(unaudited) | December 31,2022 | ||||||
Assets | |||||||
Loans held for investment | $ | 316,226,144 | $ | 339,273,538 | |||
Current expected credit loss reserve | (4,051,934 | ) | (3,940,939 | ) | |||
Loans held for investment at carrying value, net | 312,174,210 | 335,332,599 | |||||
Cash | 4,640,905 | 5,715,827 | |||||
Interest receivable | 4,159,748 | 1,204,412 | |||||
Other receivables and assets, net | 1,668,629 | 1,018,212 | |||||
Related party receivables | 237,885 | - | |||||
TotalAssets | $ | 322,881,377 | $ | 343,271,050 | |||
Liabilities | |||||||
Revolving loan | $ | 37,500,000 | $ | 58,000,000 | |||
Dividend payable | 8,667,701 | 13,618,591 | |||||
Management and incentive fees payable | 2,138,005 | 3,295,600 | |||||
Related party payable | 1,270,126 | 1,397,515 | |||||
Accounts payable and other liabilities | 962,153 | 1,058,128 | |||||
Interest reserve | 220,064 | 1,868,193 | |||||
TotalLiabilities | 50,758,049 | 79,238,027 | |||||
Commitmentsandcontingencies(Note8) | |||||||
Stockholders’equity | |||||||
Common stock, par value $0.01 per share, 100,000,000 shares authorized and 18,088,683 and 17,766,936 shares issued and outstanding, respectively | 180,887 | 176,859 | |||||
Additional paid-in-capital | 274,925,072 | 268,995,848 | |||||
Accumulated earnings (deficit) | (2,982,631 | ) | (5,139,684 | ) | |||
Totalstockholders’equity | 272,123,328 | 264,033,023 | |||||
Totalliabilitiesandstockholders’equity | $ | 322,881,377 | $ | 343,271,050 | |||
CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.CONSOLIDATEDSTATEMENTSOFINCOME (UNAUDITED)
For the threemonthsended | Forthe threemonthsended | For the three monthsended | ||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||
Revenues | ||||||||||
Interest income | $ | 16,527,304 | $ | 15,993,588 | $ | 9,833,053 | ||||
Interest expense | (1,618,296 | ) | (1,230,966 | ) | (72,268 | ) | ||||
Netinterestincome | 14,909,008 | 14,762,622 | 9,760,785 | |||||||
Expenses | ||||||||||
Management and incentive fees, net | 2,138,005 | 3,295,600 | 671,505 | |||||||
Provision for current expected credit losses | 96,119 | 2,483,512 | 51,343 | |||||||
General and administrative expense | 1,274,825 | 1,118,171 | 556,141 | |||||||
Professional fees | 569,375 | 502,355 | 556,904 | |||||||
Stock based compensation | 138,335 | 107,267 | 120,940 | |||||||
Totalexpenses | 4,216,659 | 7,506,905 | 1,956,833 | |||||||
NetIncomebeforeincometaxes | 10,692,349 | 7,255,717 | 7,803,952 | |||||||
Income tax expense | - | - | ||||||||
NetIncome | $ | 10,692,349 | $ | 7,255,717 | $ | 7,803,952 | ||||
Earningspercommonshare: | ||||||||||
Basic earnings per common share (in dollars per share) | $ | 0.60 | $ | 0.41 | $ | 0.44 | ||||
Diluted earnings per common share (in dollars per share) | $ | 0.60 | $ | 0.41 | $ | 0.44 | ||||
Weightedaveragenumberofcommonshares outstanding: | ||||||||||
Basic weighted average shares of common stock outstanding (in shares) | 17,879,444 | 17,657,913 | 17,641,090 | |||||||
Diluted weighted average shares of common stock outstanding (in shares) | 17,960,103 | 17,742,065 | 17,737,975 |
DistributableEarningsandAdjustedDistributableEarnings
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.
For the three monthsended | For the three monthsended | Forthe threemonthsended | ||||
March31, 2023 | December31, 2022 | March31, 2022 | ||||
NetIncome | $ | 10,692,349 | 7,255,717 | 7,803,952 | ||
Adjustmentstonetincome | ||||||
Non-cash equity compensation expense | 138,335 | 107,267 | 120,940 | |||
Depreciation and amortization | 167,304 | 183,820 | 72,268 | |||
Provision for current expected credit losses | 96,119 | 2,483,512 | 51,343 | |||
DistributableEarnings | 11,094,107 | 10,030,316 | 8,048,503 | |||
AdjustmentstoDistributableEarnings | - | - | - | |||
AdjustedDistributableEarnings | 11,094,107 | 10,030,316 | 8,048,503 | |||
Basic distributable earnings per common share (in dollars per share) | $ | 0.62 | $ | 0.57 | $ | 0.46 |
Diluted distributable earnings per common share (in dollars per share) | $ | 0.62 | $ | 0.57 | $ | 0.46 |
Weightedaveragenumberofcommonshares outstanding: | ||||||
Basic weighted average shares of common stock outstanding (in shares) | 17,879,444 | 17,657,913 | 17,641,090 | |||
Diluted weighted average shares of common stock outstanding (in shares) | 17,960,103 | 17,742,065 | 17,737,975 |