On November 8, 2023, Chicago Atlantic Real Estate Finance Inc (REFI, Financial), a commercial mortgage REIT specializing in loans to state-licensed cannabis operators, released its financial results for the third quarter ended September 30, 2023. The company highlighted its diligent underwriting practices and focus on strong operators in limited license states, which have contributed to the robust performance of its loan portfolio.
Executive Insights
Executive Chairman John Mazarakis commented on the quarter's achievements,
The underlying performance of the loan portfolio during the quarter continues to demonstrate that our diligent underwriting and focus on the strongest operators in limited license states are accomplishing these two primary objectives for our investors."He also noted the improved creditworthiness of borrowers and a more positive outlook for future regulatory relief in the cannabis industry.
CEO Tony Cappell emphasized the company's growth and strategic positioning,
The sequential gross originations growth of $35 million and the ability to improve our weighted average yield to maturity to 19.3% this quarter demonstrate our success in continuing to capture a greater share of new loan demand in the cannabis industry."He also mentioned the company's under-levered position and plans to expand its credit facility to fund new opportunities.
Financial Highlights
REFI reported a net income of $9.97 million for the third quarter of 2023, with basic and diluted earnings per common share at $0.55 and $0.54, respectively. This performance reflects an increase in interest income to $15.18 million, up from $13.79 million in the same period last year. The company's net interest income after interest expense amounted to $13.73 million.
On the balance sheet, REFI's total assets increased to $352.31 million as of September 30, 2023, up from $343.27 million at the end of 2022. The loans held for investment stood at $322.51 million, while cash and cash equivalents were reported at $8.70 million.
The company's liabilities totaled $76.52 million, with a revolving loan balance of $63 million. Stockholders' equity increased to $275.78 million, reflecting a solid financial position.
Dividends and Investment Activity
REFI's commitment to delivering shareholder value is evident in its dividend strategy and investment activities. The company has affirmed its 2023 outlook, which was previously issued on March 9, 2023, indicating confidence in its ability to meet financial targets.
Looking Ahead
Chicago Atlantic remains focused on leveraging its expertise in the cannabis financing space to drive growth and deliver value to its investors. With a conservative leverage position and substantial liquidity, the company is well-positioned to capitalize on new opportunities and navigate the evolving landscape of the cannabis industry.
For more detailed information, investors and analysts are encouraged to review the Third Quarter 2023 Earnings Supplemental on the Investor Relations page of REFI's website and to participate in the conference call hosted by the company.
Chicago Atlantic Real Estate Finance Inc (REFI, Financial) continues to demonstrate its commitment to prudent financial management and strategic growth within the dynamic cannabis financing sector, positioning itself as a key player for value investors to watch.
Explore the complete 8-K earnings release (here) from Chicago Atlantic Real Estate Finance Inc for further details.
