Q2 2024 Chicago Atlantic Real Estate Finance Inc Earnings Call Transcript
Key Points
- Chicago Atlantic Real Estate Finance Inc (REFI) has maintained a conservative approach to growing its portfolio, focusing on attractive risk-adjusted returns.
- The company has a strong pipeline of $508 million, prioritizing operators in limited licensed states and those transitioning from medical to adult use.
- REFI successfully raised approximately $6.3 million through its ATM program, issuing shares at a premium-to-book value.
- The loan portfolio totaled $383 million with a weighted average yield to maturity of 18.7%, indicating strong performance.
- The company has low leverage at 26% of book equity and a strong debt service coverage ratio of 5.3 to 1, showcasing financial stability.
- The weighted average yield to maturity decreased from 19.4% to 18.7% due to derisking actions, indicating a slight decline in returns.
- Net interest income remained flat at $13.2 million, with a decrease in gross interest income and interest expenses.
- Operating expenses increased by $150,000 due to incremental stock-based compensation, impacting overall profitability.
- Loan number nine remains on non-accrual status, carrying a reserve for credit losses of approximately $1.7 million, indicating potential credit risk.
- Adjusted distributable earnings per share decreased from $0.52 in Q1 to $0.50 in Q2, reflecting a slight decline in earnings performance.
Good day and thank you for standing by. Welcome to Chicago Atlantic Real Estate Finance, Inc., second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. (Operator Instructions)
Please be advised today's conference is being recorded. I would now like to introduce the host for today's conference, Mr. Tripp Sullivan of Investor Relations. Please go ahead.
Thank you. Good morning. Welcome to the Chicago Atlantic Real Estate Finance conference call to review the company's results. On the call today will be John Mazarakis, Executive Chairman; Peter Sack, Co-Chief Executive Officer; and Phil Silverman, Chief Financial Officer.
Our results were released this morning in our earnings press release, which can be found on the Investor Relations section of our website, along with our supplemental filed with SEC. A live audio webcast of this call is being
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