Chicago Atlantic Real Estate Finance (REFI) Q1 2025 earnings summary

Executive summary

• Maintains a disciplined, credit-first approach in cannabis lending, focusing on downside protection, consistent yield, and strong real estate collateral coverage amid industry volatility.

• Outperformed median and average total return for all exchange-listed mortgage REITs by 51% and 55% since inception, ranking #3 among public mortgage REITs since December 2021.

• Net income for Q1 2025 was $10.0 million, up 15% year-over-year, with EPS of $0.48 per share, driven by lower expenses and a reversal of credit loss reserves.

• Q1 2025 saw limited new originations due to selectivity and industry caution, but a robust $462 million pipeline supports expectations for meaningful portfolio growth in 2025.

• Annualized dividend yield of 12-14%, with a $0.47 per share dividend declared and paid in April 2025.

Financial highlights

• Net interest income for Q1 2025 was $13.0 million, down from $14.1 million in Q4 2024, mainly due to lower non-recurring fees and a 50 bps prime rate decrease.

• Distributable earnings per share were $0.47 (basic) and $0.46 (diluted), consistent with Q4 2024.

• Book value per share was $14.87 as of March 31, 2025, with 21.3 million shares outstanding.

• Total assets as of March 31, 2025, were $414.7 million; total liabilities were $103.9 million.

• Raised $1 million in net proceeds from ATM common stock issuance at a 5.5% premium to book value.

Outlook and guidance

• Expects deployments to accelerate in Q2 and Q3 2025, with a healthy $462 million pipeline, mostly CapEx-related.

• Aims for net portfolio growth in 2025, competing to refinance upcoming maturities and maintain borrower relationships.

• Dividend payout ratio expected to remain at 90%-100% of distributable earnings for 2025; special dividend possible if taxable income exceeds regular dividends.

• Management expects continued portfolio growth, supported by favorable market conditions for non-bank lenders in the cannabis sector.

• Affirmed previously issued 2025 outlook as of March 12, 2025.