CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. Portfolio Performance
- As of
March 31, 2024 , total loan commitments of approximately$401.3 million (all of which are funded) across 28 portfolio investments. - Weighted average yield to maturity was approximately 19.4% as of
March 31, 2024 andDecember 31, 2023 . - Real estate collateral coverage was 1.3x compared with 1.5x as of
December 31, 2023 . - Loan to enterprise value (calculated as outstanding principal balance divided by total value of collateral on a weighted average basis) was approximately 40.5% as of
March 31, 2024 compared with approximately 44.1% as ofDecember 31, 2023 . - The percentage of loans which bear a variable interest rate was 76.6% as of
March 31, 2024 compared with 80.5% as ofDecember 31, 2023 .
Investment Activity
- During the first quarter, Chicago Atlantic had total gross originations of
$22.5 million , of which$6.7 million and$15.8 million was funded to a new borrower and existing borrowers, respectively.
Capital Activity and Dividends
- On
February 28, 2024 , Chicago Atlantic amended its$100.0 million secured revolving credit facility, without any other change in terms or structure, to extend the maturity date toJune 2026 with a one-year extension option, subject to customary conditions. The amendment also increased the accordion feature of the secured revolving credit facility to facilitate additional commitments up to$150.0 million . - During the quarter, Chicago Atlantic issued 896,443 shares through its ATM program at a weighted average price of
$15.93 , raising net proceeds of approximately$13.9 million . - As of
March 31, 2024 , the Company had$81.3 million outstanding on its secured revolving credit facility, resulting in a leverage ratio (debt to book equity) of approximately 28%. - As of
May 7, 2024 , the Company has$19.2 million available on its secured revolving credit facility, and total liquidity, net of estimated liabilities, of approximately$22 million . - On
April 15, 2024 , Chicago Atlantic paid a regular quarterly cash dividend of$0.47 per share of common stock for the first quarter of 2024 to common stockholders of record onMarch 28, 2024 .
First Quarter 2024 Financial Results
- Net interest income of approximately
$13.2 million , a sequential decrease of 10.8% from$14.8 million in the fourth quarter of 2023 due to no prepayments and related fees received during the first quarter of 2024 compared with$1.8 million of prepayment fees and the acceleration of original issue discounts during the three months endedDecember 31, 2023 . - Total expenses of approximately
$4.1 million before provision for current expected credit losses, representing a sequential decrease of 28.4%; primarily attributable to a decrease in management and incentive fees. - Net Income of approximately
$8.7 million , or$0.47 per weighted average diluted common share, representing a sequential decrease of 7.8% on a per share basis. - The total reserve for current expected credit losses increased sequentially by
$0.4 million to$5.4 million and amounts to approximately 1.4% of the portfolio principal balance of$377.6 million as ofMarch 31, 2024 . - Distributable Earnings of approximately
$9.7 million , or$0.52 per weighted average diluted common share, representing a sequential decrease of 1.9% on a per share basis. - Book value per common share of
$14.97 as ofMarch 31, 2024 compared with$14.94 as ofDecember 31, 2023 , due to first quarter basic earnings per share in excess of the regular quarterly dividend of$0.47 , and accretion from the issuance of common stock at a premium to book value.
2024 Outlook
Chicago
Conference Call and Quarterly Earnings Supplemental Details
The Company will host a conference call later today at
Chicago
About
Forward-Looking Statements
This 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
Contact:
IR@REFI.reit
CONSOLIDATED BALANCE SHEETS | ||||||||
2024 | 2023 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Loans held for investment | $ | 359,317,126 | $ | 337,238,122 | ||||
| Loans held for investment - related party (Note 7) | 16,527,188 | 16,402,488 | ||||||
| Loans held for investment, at carrying value | 375,844,314 | 353,640,610 | ||||||
| Current expected credit loss reserve | (5,356,018 | ) | (4,972,647 | ) | ||||
| Loans held for investment at carrying value, net | 370,488,296 | 348,667,963 | ||||||
| Cash and cash equivalents | 6,904,113 | 7,898,040 | ||||||
| Other receivables and assets, net | 5,143,318 | 705,960 | ||||||
| Interest receivable | 926,852 | 1,004,140 | ||||||
| Related party receivables | 192,354 | 107,225 | ||||||
| Debt securities, at fair value | - | 842,269 | ||||||
| Total Assets | $ | 383,654,933 | $ | 359,225,597 | ||||
| Liabilities | ||||||||
| Revolving loan | $ | 81,250,000 | $ | 66,000,000 | ||||
| Dividend payable | 9,007,244 | 13,866,656 | ||||||
| Related party payables | 1,819,428 | 3,243,775 | ||||||
| Management and incentive fees payable | 1,754,741 | 2,051,531 | ||||||
| Accounts payable and other liabilities | 1,342,872 | 1,135,355 | ||||||
| Interest reserve | 2,519,871 | 1,074,889 | ||||||
| Total Liabilities | 97,694,156 | 87,372,206 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders' equity | ||||||||
| Common stock, par value | 191,003 | 181,972 | ||||||
| Additional paid-in-capital | 291,858,521 | 277,483,092 | ||||||
| Accumulated deficit | (6,088,747 | ) | (5,811,673 | ) | ||||
| Total stockholders' equity | 285,960,777 | 271,853,391 | ||||||
| Total liabilities and stockholders' equity | $ | 383,654,933 | $ | 359,225,597 | ||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||
| For the three months ended | For the three months ended | For the three months ended | ||||||||
| Revenues | ||||||||||
| Interest income | $ | 15,343,667 | $ | 16,530,028 | $ | 16,527,304 | ||||
| Interest expense | (2,104,050 | ) | (1,690,543 | ) | (1,618,296 | ) | ||||
| Net interest income | 13,239,617 | 14,839,485 | 14,909,008 | |||||||
| Expenses | ||||||||||
| Management and incentive fees, net | 1,754,741 | 3,243,775 | 2,138,005 | |||||||
| General and administrative expense | 1,390,267 | 1,426,554 | 1,274,825 | |||||||
| Professional fees | 449,858 | 555,623 | 569,375 | |||||||
| Stock based compensation | 531,293 | 537,131 | 138,335 | |||||||
| Provision for current expected credit losses | 380,279 | (253,495 | ) | 96,119 | ||||||
| Total expenses | 4,506,438 | 5,509,588 | 4,216,659 | |||||||
| Change in unrealized gain on debt securities, at fair value | (75,604 | ) | (37,163 | ) | - | |||||
| Realized gain on debt securities, at fair value | 72,428 | 104,789 | - | |||||||
| Net Income before income taxes | 8,730,003 | 9,397,523 | 10,692,349 | |||||||
| Income tax expense | - | - | - | |||||||
| Net Income | $ | 8,730,003 | $ | 9,397,523 | $ | 10,692,349 | ||||
| Earnings per common share: | ||||||||||
| Basic earnings per common share | $ | 0.48 | $ | 0.52 | $ | 0.60 | ||||
| Diluted earnings per common share | $ | 0.47 | $ | 0.51 | $ | 0.60 | ||||
| Weighted average number of common shares outstanding: | ||||||||||
| Basic weighted average shares of common stock outstanding | 18,273,919 | 18,182,403 | 17,879,444 | |||||||
| Diluted weighted average shares of common stock outstanding | 18,640,492 | 18,564,530 | 17,960,103 | |||||||
Distributable Earnings and Adjusted Distributable Earnings
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 months ended | For the three months ended | For the three months ended | |||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||
| Net Income | $ | 8,730,003 | $ | 9,397,523 | $ | 10,692,349 | |||
| Adjustments to net income | |||||||||
| Stock based compensation | 531,293 | 537,131 | 138,335 | ||||||
| Amortization of debt issuance costs | 90,915 | 145,128 | 167,304 | ||||||
| Provision/(reversal) for current expected credit losses | 380,279 | (253,495 | ) | 96,119 | |||||
| Change in unrealized gain on debt securities, at fair value | 75,604 | 37,163 | - | ||||||
| Realized gain on debt securities, at fair value | (72,428 | ) | (104,789 | ) | - | ||||
| Distributable Earnings | $ | 9,735,666 | $ | 9,758,661 | $ | 11,094,107 | |||
| Adjustments to Distributable Earnings | |||||||||
| Adjusted Distributable Earnings | 9,735,666 | 9,758,661 | 11,094,107 | ||||||
| Basic weighted average shares of common stock outstanding (in shares) | 18,273,919 | 18,182,403 | 17,879,444 | ||||||
| Adjusted Distributable Earnings per Weighted Average Share | $ | 0.53 | $ | 0.54 | $ | 0.62 | |||
| Diluted weighted average shares of common stock outstanding (in shares) | 18,640,492 | 18,564,530 | 17,960,103 | ||||||
| Adjusted Distributable Earnings per Weighted Average Share | $ | 0.52 | $ | 0.53 | $ | 0.62 | |||
2024 GlobeNewswire, Inc., source
