Wed, May 7, 11:01 AM (16 days ago)
**Chicago Atlantic Real Estate Finance, Inc. (REFI) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $15.11 million (interest income), down 2% YoY. - **Net Income:** $10.04 million, up 15% YoY. - **EPS:** $0.48 (basic) and $0.47 (diluted). - **Profit Margins:** Net margin of 66.5%, up from 58.7% YoY. - **Cash Flow:** Operating cash flow of $7.63 million, up from $6.92 million YoY. - **Earnings Changes:** Net income increased by $1.31 million YoY. **Key Metrics:** - **Loans Held for Investment:** $399.46 million (carrying value), down from $402.48 million. - **Interest Reserve:** $547,526, down from $1.30 million. - **Debt:** Revolving loan of $38.00 million, notes payable of $49.16 million. - **Dividends:** $0.47 per share, totaling $9.80 million. **Quarterly Performance:** - **Interest Income:** $15.11 million, down 2% YoY. - **Interest Expense:** $2.07 million, down 2% YoY. - **Net Interest Income:** $13.04 million, down 1.5% YoY. - **Expenses:** Total expenses of $3.00 million, down 33% YoY. - **Provision for Credit Losses:** Benefit of $1.07 million, down 382% YoY. **Trends & Uncertainties:** - **Loan Portfolio:** 30 loans, weighted-average YTM IRR of 16.9%. - **Credit Quality:** 60.3% of loans rated "1" or "2". - **Market Conditions:** Favorable for non-bank lenders, but competition is increasing. - **Legal Risks:** Cannabis industry regulations may impact business. **Future Operations Impact:** - **Liquidity:** Sufficient cash and borrowing capacity for next 12 months. - **Dividends:** Plans to maintain 90% distribution of REIT taxable income. - **Growth:** Expects to increase loan originations and raise additional capital. **Management's Discussion:** - **Operating Results:** Affected by interest rates, credit losses, and market conditions. - **Interest Rate Risk:** Vulnerable to changes in Prime Rate and SOFR. - **Credit Risk:** Mitigated by collateral and covenants, but unanticipated losses possible. - **Market Risk:** Dependent on cannabis industry regulations and demand. **Conclusion:** Chicago Atlantic Real Estate Finance, Inc. showed strong financial health in Q1 2025, with increased net income and profit margins. However, the company faces challenges from interest rate volatility, credit risks, and regulatory uncertainties in the cannabis industry. The management is focused on maintaining liquidity, credit quality, and growth through strategic loan originations and capital raising.