Chicago Atlantic Real Estate Finance (REFI) Q1 2025 Earnings Call May 07, 2025 09:00 AM ET Company Participants Tripp Sullivan - PresidentPeter Sack - CEODavid Kite - Chief Operating Officer of Chicago Atlantic REIT Manager, LLCPhil Silverman - CFOAaron Grey - Managing Director, Head of Consumer ResearchChris Muller - Director - Equity ResearchPablo Zuanic - Managing Partner Operator Good day, and welcome to Chicago Atlantic Real Estate Finance Inc. First Quarter twenty twenty five Earnings Conference Call. ...

Financial Data and Key Metrics Changes - The company's net interest income for Q1 2025 was $13 million, a 7.3% decrease from $14.1 million in Q4 2024, primarily due to a decrease in non-recurring fees and the impact of a 50 basis point decrease in the prime rate [14][18] - The loan portfolio principal totaled $407 million across 30 portfolio companies, with a weighted average yield to maturity of 16.9%, down from 17.2% in the previous quarter [10][11] - Total leverage was 28% of book equity as of March 31, compared to 34% at the end of 2024 [11] Business Line Data and Key Metrics Changes - Gross originations during the quarter were $4.4 million, with $500,000 funded to new borrowers and $3.9 million to existing borrowers on delayed draw, offset by sales and repayments of $9.2 million [10] - The percentage of fixed-rate loans and floating-rate loans with floors at or above the prevailing prime rate was 71.2% [10] Market Data and Key Metrics Changes - The cannabis pipeline across the Chicago Intake platform stands at $462 million, with expectations for deployments to accelerate in Q2 and Q3 [8][21] - The company remains the third top-performing exchange-listed mortgage REIT, outperforming the median and average total return for all exchange-listed mortgage REITs by approximately 51% and 55% respectively since inception [9] Company Strategy and Development Direction - The company aims to create a differentiated and low-levered risk-return profile insulated from cannabis equity volatility, focusing on credit and collateral first [6][8] - The management emphasizes a disciplined and patient approach to capital deployment, prioritizing credit protection and risk-adjusted returns [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the current operating environment is characterized by volatility in the cannabis equity markets, which affects capital providers [6] - The company is optimistic about net portfolio growth in 2025, with significant maturities expected and a focus on refinancing strong-performing assets [30][42] Other Important Information - The company raised approximately $1 million in net proceeds from the issuance of common stock through its ATM program, with a weighted average selling price representing a premium to book value [18] - The CECL reserve on loans held for investment decreased to approximately $3.3 million from $4.4 million, primarily due to the reversal of reserves related to loan number nine [15][16] Q&A Session Summary Question: Can you provide details on the near-term pipeline of $462 million? - Management indicated that the pipeline is generally related to CapEx and expects deployments to accelerate in Q2 and Q3 [21][22] Question: How are pricing assumptions being adjusted in underwriting? - Management noted that pricing in the industry is evolving, with downward price compression observed in various states, including Massachusetts [24][26] Question: What visibility do you have into repayments and net portfolio growth? - Management aims for net portfolio growth in 2025, with a focus on refinancing strong-performing assets [30][42] Question: How would rescheduling impact the business? - Management believes rescheduling would significantly increase after-tax free cash flow for borrowers, enhancing downside protection and supporting growth [33] Question: What are the unfunded commitments at the end of the quarter? - The company has approximately $19.8 million in unfunded commitments, which are contingent on meeting certain conditions [44] Question: How does the allocation process for funding opportunities work? - Management explained that all opportunities are given equal consideration across funds, but specific allocations depend on eligibility and diversification requirements [50]

Company Performance - Chicago Atlantic Real Estate Finance, Inc. reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, but down from $0.52 per share a year ago, representing an earnings surprise of 2.22% [1] - The company posted revenues of $13.04 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 6.38%, and down from $15.34 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Outlook - The stock has underperformed the market, losing about 5.3% since the beginning of the year compared to the S&P 500's decline of 4.7% [3] - The current consensus EPS estimate for the coming quarter is $0.47 on revenues of $14.13 million, and for the current fiscal year, it is $1.83 on revenues of $56.98 million [7] - The estimate revisions trend for the company is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Chicago Atlantic belongs, is currently in the bottom 43% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Earnings Supplemental For the quarter ended March 31, 2025 Important Disclosure Information Forward Looking Statements This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), regarding future events and the future results of Chicago Atlantic Real Estate Finance, Inc. ("Chicago Atlantic", "REFI", the "Company", and "we", "us", and "our") that a ...

Financial Performance - Net interest income for the first quarter of 2025 was approximately $13.0 million, a decrease from $14.1 million as of December 31, 2024[6]. - Net income was approximately $10.0 million, or $0.47 per weighted average diluted common share, reflecting a sequential increase of 20.5% on a per share basis[6]. - Net income for Q1 2025 reached $10,041,312, an increase of 26.8% compared to $7,919,692 in Q4 2024[19]. - Distributable earnings were approximately $9.7 million, or $0.47 and $0.46 per basic and diluted weighted average common share, respectively[12]. - Distributable earnings for Q1 2025 were $9,727,657, compared to $9,214,434 in Q4 2024, reflecting a growth of 5.6%[19]. - Basic distributable earnings per weighted average share remained stable at $0.47 for both Q1 2025 and Q4 2024[19]. - Diluted distributable earnings per weighted average share also held steady at $0.46 for Q1 2025, consistent with Q4 2024[19]. Portfolio and Investments - As of March 31, 2025, total loan principal outstanding was $407.0 million across 30 portfolio companies, with $19.8 million of unfunded commitments[6]. - The portfolio weighted average yield to maturity was approximately 16.9% as of March 31, 2025, compared to 17.2% as of December 31, 2024[6]. - The total reserve for current expected credit losses decreased to $3.3 million, approximately 0.8% of the aggregate portfolio principal balance of loans held for investment of $401.5 million[12]. - The provision for current expected credit losses showed a benefit of $(1,073,276) in Q1 2025, compared to a provision of $301,491 in Q4 2024[19]. - The change in unrealized gain on investments was not reported for Q1 2025, while it was $165,000 in Q4 2024[19]. Shareholder Returns - Chicago Atlantic paid a regular quarterly cash dividend of $0.47 per share for the first quarter of 2025[6]. - Book value per common share increased from $14.83 as of December 31, 2024, to $14.87 as of March 31, 2025[12]. Expenses and Leverage - Total expenses were approximately $4.1 million, representing a sequential decrease of approximately 28.3%[6]. - The Company had $88.0 million of total leverage, resulting in a consolidated leverage ratio of approximately 28%[6]. Share Count and Adjustments - The number of basic weighted average shares outstanding increased to 20,858,466 in Q1 2025 from 19,830,596 in Q4 2024, representing a growth of 5.2%[19]. - The diluted weighted average shares outstanding rose to 21,264,891 in Q1 2025, up from 20,256,628 in Q4 2024, indicating an increase of 5.0%[19]. - Adjustments to net income included a stock-based compensation of $649,312 for Q1 2025, down from $845,524 in Q4 2024[19].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41123 CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. (Exact name of Registrant as specified in its charter) | Maryland | 86-3125132 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or org ...

CHICAGO, May 07, 2025 (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 first quarter ended March 31, 2025. Peter Sack, Co-Chief Executive Officer, noted, "We have entered 2025 much like we did in 2024 with significant volatility in the financial services sector and within the cannabis industry. The broader sentiment in cannabis is more muted than most pa ...

Group 1 - Chicago Atlantic Real Estate Finance declared a base quarterly cash dividend of $0.47 per share, unchanged from the previous distribution, resulting in an annualized dividend of $1.88 per share, which equates to a 13.52% dividend yield [1] - The mortgage REIT has maintained this base quarterly dividend, indicating stability in its dividend policy [1] Group 2 - Pacifica Yield focuses on long-term wealth creation by targeting undervalued yet high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]

CHICAGO, April 17, 2025 (GLOBE NEWSWIRE) -- Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) ("Chicago Atlantic" or the "Company"), a commercial mortgage real estate investment trust, announced details for the release of its results for the first quarter ended March 31, 2025. The Company plans to issue its earnings release and supplemental financial information before the market opens on Wednesday, May 7, 2025. Chicago Atlantic will host a conference call and live audio webcast, both open for the ge ...

CHICAGO, March 17, 2025 (GLOBE NEWSWIRE) -- Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI), a commercial mortgage real estate investment trust, announced that its board of directors has declared a regular quarterly cash dividend of $0.47 per share for the first quarter of 2025. The regular quarterly dividend, which equates to an annualized rate of $1.88 per common share, is payable on April 15, 2025, to shareholders of record as of the close of business on March 31, 2025. About Chicago Atlantic Re ...