Chicago Atlantic Real Estate Finance (REFI) Q2 2026 earnings summary

Executive summary

• Delivered a productive Q2 2026 despite geopolitical tensions and interest rate uncertainty, with net income of $7.47 million, down from $8.88 million in Q2 2025, and distributable earnings of $0.44 per share, below the dividend due to timing of capital redeployment, not portfolio quality.

• Announced a merger with Chicago Atlantic BDC (LIEN), expected to close in Q4 2026, aiming to unlock value, improve scale, and enhance stock liquidity, with REFI shareholders expected to own about 50.5% of the combined entity based on March 2026 NAVs.

• Closed a $62.5 million Koach transaction, issuing 4.3 million shares in exchange for second lien promissory notes secured by cannabis retail properties, diversifying revenue and providing exposure to longer-duration assets.

• Focuses on lending to state-licensed cannabis operators, leveraging a diversified portfolio across geographies and asset types.

• Gross originations reached $59.2 million for the quarter, with portfolio performance remaining strong despite earnings being impacted by the timing of repayments and deployments.

Financial highlights

• Net interest income for Q2 2026 was $12.83 million, down from $14.42 million in Q2 2025, with total interest income of $15.2 million.

• Distributable earnings per share were $0.44 (basic) and $0.43 (diluted); Q2 dividend was $0.47 per share.

• Book value per share was $14.15 as of June 30, 2026, down from $14.71 a year earlier; 21.7 million shares outstanding, increasing to 26 million pro forma for Koach Capital transaction.

• Since inception, $9.41 per share distributed in dividends, representing a 12.4% annualized yield on IPO price.

• Gross unlevered weighted average yield to maturity was 15.8%, slightly lower than 16.8% in Q2 2025.

Outlook and guidance

• Expectation to distribute all or nearly all distributable earnings through the merger date, with dividend payout ratio to remain at 90%-100% of distributable earnings per share for 2026.

• A special dividend may be issued in Q4 2026 if required to meet taxable income distribution requirements.

• Conservative outlook maintained despite positive regulatory momentum; strategy does not depend on regulatory changes.

• Guidance assumes standalone operation and does not reflect effects of the pending merger.

• Merger with LIEN expected to deliver long-term net investment income accretion and improved competitive positioning.