In This Article:
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Loan Portfolio Principal: $410 million across 30 portfolio companies as of December 31, 2024.
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Weighted Average Yield to Maturity: 17.2% as of December 31, 2024, down from 18.3% at September 30, 2024.
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Gross Originations in Q4: $90.7 million in principal funding.
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Net Interest Income: $14.1 million for the fourth quarter, a 2.7% decrease from $14.5 million in the third quarter.
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Interest Expense Increase: $0.4 million increase in the fourth quarter due to new unsecured term notes.
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Total Operating Expenses Increase: Approximately $250,000 increase quarter over quarter.
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Base Management and Incentive Fees for 2024: $8.1 million compared to $8.8 million in 2023.
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Distributable Earnings Per Share: $0.47 basic and $0.46 fully diluted for Q4; $2.08 basic and $2.03 fully diluted for fiscal year 2024.
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Total Dividends Paid in 2024: $2.06 per share, with a payout ratio of approximately 99% of basic distributable earnings.
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Book Value Per Share: $14.83 as of December 30, 2024, down from $14.94 as of December 31, 2023.
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Common Shares Outstanding: Approximately 21.2 million as of December 30, 2024.
Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Chicago Atlantic Real Estate Finance Inc (NASDAQ:REFI) executed a strong fourth quarter, with a stock price increase of 16.7% from November 2024 to March 2025.
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The company deployed $90.7 million in gross originations in Q4 across multiple states, demonstrating strong diversification.
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REFI increased its senior secured credit facility to $110 million and closed on a $50 million unsecured term loan at attractive pricing.
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The company delivered $2.06 per share in dividends to shareholders in 2024, maintaining a high payout ratio.
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REFI's loan portfolio has a weighted average yield to maturity of 17.2%, with a significant portion insulated from interest rate declines.
Negative Points
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The US cannabis industry is facing challenges such as pricing pressure and lack of federal reform, impacting equity values.
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REFI's net interest income decreased by 2.7% in Q4 due to a decrease in the prime rate and timing of deployment of proceeds.
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Interest expense increased due to the new unsecured term notes bearing a fixed interest rate of 9%.
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Loan number 9 remains on non-accrual status, requiring operational and balance sheet restructuring.
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The company's book value decreased due to dividends paid in excess of GAAP net income.
Q & A Highlights
Q: Can you talk about demand for loans and leverage expectations given the $500 million pipeline? A: The demand profile has changed due to compressed equity valuations, but the industry's maturation offsets this. We don't expect to increase leverage beyond what's approved under our senior secured facility. - Peter Sack, Co-CEO