Chicago Atlantic Real Estate Finance Inc (REFI) Reports Q4 and Full Year 2023 Results
Net Income: Q4 net income reached $9.4 million, with a full-year total of $38.7 million.
Interest Income: Interest income for Q4 was $16.5 million, contributing to a robust year.
Loan Portfolio: Loans held for investment at year-end totaled approximately $348.7 million.
Distributable Earnings: Adjusted Distributable Earnings per Weighted Average Share for the full year stood at $2.26.
Dividends: The company continues to focus on delivering shareholder value through consistent dividends.
Management Promotions: Peter Sack and Phil Silverman elevated to Co-CEO and CFO, respectively.
On March 12, 2024, Chicago Atlantic Real Estate Finance Inc (NASDAQ:REFI), a commercial mortgage real estate investment trust, announced its financial results for the fourth quarter and full year ended December 31, 2023. The company released its 8-K filing, detailing a period of solid performance and strategic positioning within the cannabis financing industry.
Chicago Atlantic Real Estate Finance Inc is a market-leading commercial mortgage REIT with a primary investment objective to provide attractive risk-adjusted returns through consistent current income dividends and capital appreciation. The company specializes in originating senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States.
Performance Highlights and Industry Outlook
Executive Chairman John Mazarakis highlighted the improvement in the regulatory landscape, which has opened new investment opportunities and improved the equity value of borrowers. Anticipating a significant opportunity in the next 12 to 18 months due to debt maturities among larger cannabis operators, Chicago Atlantic is poised to leverage its direct lending expertise to capitalize on industry growth.
Co-Chief Executive Officer Tony Cappell noted the company's growth in gross loan originations and an increase in the weighted average yield to maturity to 19.4%. The extension of the credit facility until June 2026, with an increase in the accordion feature up to $150 million, is expected to support additional opportunities.
Financial Achievements and Metrics
Chicago Atlantic's financial achievements include a net income of $9.4 million for Q4 and $38.7 million for the full year. The company's loan portfolio, consisting of loans held for investment, stood at approximately $348.7 million after accounting for the current expected credit loss reserve. Interest income for the fourth quarter was reported at $16.5 million, contributing to a robust year for the company.
Adjusted Distributable Earnings per Weighted Average Share for the full year was $2.26, reflecting the company's ability to generate earnings and potentially provide dividends to shareholders. The company's balance sheet remains strong, with total assets amounting to $359.2 million as of December 31, 2023.
"With our continued growth in gross loan originations, increase in our weighted average yield to maturity to 19.4% and the improving credit quality of our operators, our diligent underwriting process and dedicated originations team has helped position us to remain selective in putting our capital to work." - Tony Cappell, Co-Chief Executive Officer
Management Team and Dividends
Chicago Atlantic also announced the promotions of Peter Sack to Co-Chief Executive Officer and Phil Silverman to Chief Financial Officer, effective March 7, 2024. These strategic moves within the senior management team are expected to further strengthen the company's leadership.
As a REIT, Chicago Atlantic is required to distribute at least 90% of its annual REIT taxable income. The company's focus on delivering shareholder value is evident in its commitment to consistent dividend payments, aligning with its investment objectives.
Conclusion and Investor Relations
Chicago Atlantic's performance in the fourth quarter and full year of 2023 demonstrates the company's resilience and strategic positioning in a dynamic industry. With a solid financial foundation and a clear focus on value creation for shareholders, Chicago Atlantic continues to navigate the evolving landscape of cannabis financing with confidence.
Investors and interested parties can access more detailed financial information and updates on Chicago Atlantic's investor relations website, including the Fourth Quarter 2023 Earnings Supplemental.
For further information and to stay updated on Chicago Atlantic's latest developments, please visit the Investor Relations page at www.refi.reit.
Explore the complete 8-K earnings release (here) from Chicago Atlantic Real Estate Finance Inc for further details.
This article first appeared on GuruFocus.
