Chicago Atlantic Real Estate Finance(REFI) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights This section summarizes Chicago Atlantic Real Estate Finance's Q2 2025 performance, strategic focus, subsequent portfolio activities, and affirmed 2025 outlook Company Announcement & Strategic Focus Chicago Atlantic Real Estate Finance announced its Q2 2025 financial results, highlighting a disciplined focus on solid cannabis operators and the extension of its secured revolving credit facility to June 30, 2028. The company maintains a significant pipeline of cannabis opportunities - Chicago Atlantic Real Estate Finance, Inc. announced its results for the quarter ended June 30, 2025[2] - The Company is managing its loan portfolio with a disciplined focus on solid consumer and product-focused cannabis operators in limited-license states[3] - The secured revolving credit facility was amended to extend the contractual maturity for an additional two-year period, from June 30, 2026, to June 30, 2028[3] - The company has a pipeline of approximately $650 million of cannabis opportunities, remaining the largest capital provider to the industry[3] Subsequent Portfolio Activity From July 1, 2025, to August 7, 2025, the Company received approximately $56.8 million in unscheduled principal repayments from six credit facilities, generating $1.0 million in prepayment fees - Unscheduled principal repayments received from July 1, 2025, to August 7, 2025: approximately $56.8 million (full prepayment of six credit facilities)[5] - Prepayment fees recognized in connection with these prepayments: approximately $1.0 million[5] 2025 Outlook Chicago Atlantic affirmed its previously issued 2025 outlook - Chicago Atlantic affirmed its outlook previously issued on March 12, 2025[6] Financial Performance Overview This section details Chicago Atlantic's Q2 2025 operating results, portfolio performance, and liquidity position, showing changes quarter-over-quarter and year-over-year Operating Results (QoQ & YoY) For Q2 2025, net interest income increased QoQ but net income and diluted EPS decreased. Distributable earnings per share saw a slight increase QoQ Operating Results Summary | Metric | Q2 2025 (Amount) | Q2 2025 (Per Share) | Q1 2025 (Amount) | Q1 2025 (Per Share) | Q2 2024 (Amount) | Q2 2024 (Per Share) | | :-------------------------------- | :----------------- | :------------------ | :----------------- | :------------------ | :----------------- | :------------------ | | Net interest income ($) | $14,424,987 | $0.67 | $13,041,933 | $0.61 | $13,183,499 | $0.66 | | Net income – diluted ($) | $8,877,375 | $0.41 | $10,041,312 | $0.47 | $9,184,073 | $0.46 | | Distributable earnings – diluted ($) | $10,850,941 | $0.51 | $9,727,657 | $0.46 | $9,927,528 | $0.50 | Portfolio Performance The total loan principal outstanding increased QoQ to $421.9 million, while the weighted average yield to maturity slightly decreased. The proportion of variable interest rate loans remained stable QoQ but significantly lower YoY Portfolio Performance Summary | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------------- | :-------------- | :------------- | :------------ | | Total loan principal outstanding ($) | $421,918,148 | $407,011,816 | $383,281,127 | | Portfolio companies | 30 | 30 | 31 | | Unfunded commitments ($) | $16,595,000 | $19,795,000 | $6,000,000 | | Weighted average yield to maturity (%) | 16.8% | 16.9% | 18.7% | | Aggregate variable interest rate loan portfolio (%) | 59.3% | 58.5% | 76.4% | Liquidity and Capital Structure The company's book value per share slightly decreased QoQ, while the debt/equity ratio increased significantly. As of August 7, 2025, the company reported $97.6 million available on its credit facility and $94.0 million in total liquidity Capital Structure Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------- | :------------ | :------------- | :------------ | | Book value per share ($) | $14.71 | $14.87 | $14.92 | | Debt/equity ratio (%) | 38.8% | 28.0% | 26.2% | - As of June 30, 2025, total leverage was approximately $121.2 million, comprising $71.2 million drawn on the Revolving Loan and $50.0 million of Notes Payable due 2028[11] - As of August 7, 2025, the Company has $97.6 million available on its secured revolving credit facility and total liquidity, net of estimated liabilities, of approximately $94.0 million[11] Consolidated Financial Statements This section presents Chicago Atlantic's consolidated balance sheets and statements of income, detailing asset, liability, equity, revenue, and expense trends Consolidated Balance Sheets As of June 30, 2025, total assets increased to $455.2 million from $435.1 million at year-end 2024, driven by an increase in loans held for investment and cash. Total liabilities also increased, primarily due to higher revolving loan balances Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change (vs. Dec 31, 2024) | | :-------------------------------------- | :-------------- | :---------------- | :------------------------ | | Total Assets ($) | $455,214,325 | $435,148,974 | +$20,065,351 | | Loans held for investment, at carrying value ($) | $413,975,484 | $402,477,046 | +$11,498,438 | | Cash and cash equivalents ($) | $35,562,084 | $26,400,448 | +$9,161,636 | | Total Liabilities ($) | $145,185,935 | $126,190,877 | +$18,995,058 | | Revolving loan ($) | $71,200,000 | $55,000,000 | +$16,200,000 | | Total Stockholders' Equity ($) | $310,028,390 | $308,958,097 | +$1,070,293 | Consolidated Statements of Income For the three months ended June 30, 2025, interest income increased YoY, leading to higher net interest income. However, total expenses also rose significantly, resulting in a slight decrease in net income compared to the prior year quarter Consolidated Statements of Income Highlights | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income ($) | $16,502,035 | $15,022,431 | $31,609,350 | $30,366,098 | | Net interest income ($) | $14,424,987 | $13,183,499 | $27,466,920 | $26,423,116 | | Total expenses ($) | $5,712,612 | $3,999,426 | $8,713,234 | $8,505,864 | | Net Income ($) | $8,877,375 | $9,184,073 | $18,918,686 | $17,914,076 | | Diluted earnings per common share ($) | $0.41 | $0.46 | $0.89 | $0.93 | Non-GAAP Financial Measures This section defines Distributable Earnings, a non-GAAP measure, and provides its reconciliation, highlighting its use for performance evaluation and dividend capacity assessment Distributable Earnings Definition and Reconciliation Distributable Earnings, a non-GAAP measure, is used to evaluate performance and assess dividend capacity. The definition was revised to be net of Incentive Compensation. For Q2 2025, diluted distributable earnings per share was $0.51, an increase from $0.50 in Q2 2024 - Distributable Earnings is a non-GAAP measure used to evaluate performance and is considered a useful indicator of the company's ability to pay dividends[16] - The definition of Distributable Earnings was revised to be presented net of Incentive Compensation, which has no impact on period-to-period comparisons[17] Distributable Earnings Summary | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income ($) | $8,877,375 | $9,184,073 | $18,918,686 | $17,914,076 | | Distributable Earnings ($) | $10,850,941 | $9,927,528 | $20,578,598 | $19,644,707 | | Diluted Distributable Earnings per Weighted Average Share ($) | $0.51 | $0.50 | $0.96 | $1.02 | Additional Information This section provides details on Chicago Atlantic's Q2 2025 conference call, investor resources, company overview, and a disclaimer regarding forward-looking statements Conference Call & Investor Information Chicago Atlantic hosted a conference call and webcast on August 7, 2025, to discuss Q2 2025 results. Investors can find supplemental earnings details and other material information on the company's investor relations website - A conference call and live audio webcast were hosted on August 7, 2025, at 9:00 a.m. Eastern Time[7] - The Second Quarter 2025 Earnings Supplemental is available on the Investor Relations page of the company's website (www.refi.reit)[8](index=8&type=chunk) - The company uses its website as a means of disclosing material information and complying with Regulation FD[8] About the Company Chicago Atlantic Real Estate Finance, Inc. is a commercial mortgage REIT that provides senior secured loans primarily to state-licensed cannabis operators in limited-license states, leveraging its expertise in real estate, credit, and cannabis - Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) is a commercial mortgage REIT[9] - The company originates senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States[9] - REFI is part of the Chicago Atlantic platform, which has closed over $2.8 billion in credit and equity investments to date[9] Forward-Looking Statements The release contains forward-looking statements subject to inherent uncertainties and risks. The company does not commit to publicly update or revise these statements unless legally required - This release contains forward-looking statements that reflect current views and projections with respect to future events and financial performance[10] - These statements are subject to inherent uncertainties and are not guarantees of future performance, conditions, or results[10] - The Company does not undertake any obligation to publicly update or revise any forward-looking statements, except as required by law[10]