Chicago Atlantic Real Estate Finance, Inc. reported its financial results for the first quarter of 2026, revealing a net income of $4.84 million, a decrease of 52% from $10.04 million in the same period last year. The company's interest income increased slightly to $15.16 million from $15.11 million, primarily due to higher exit fees associated with loan repayments. However, total expenses surged to $8.08 million, up from $3.00 million, largely driven by a significant increase in the provision for current expected credit losses (CECL), which rose to $3.84 million compared to a benefit of $1.07 million in the prior year.
The company's total assets as of March 31, 2026, stood at approximately $435.95 million, up from $424.92 million at the end of 2025. This increase was supported by a rise in cash and cash equivalents, which more than doubled to $27.86 million from $14.95 million. Loans held for investment, net of the CECL reserve, totaled $400.56 million, a slight decrease from $403.89 million at the end of the previous fiscal year. The CECL reserve itself increased to $8.68 million, reflecting a more cautious outlook on credit quality amid changing market conditions.
Operationally, Chicago Atlantic's loan portfolio consisted of 29 loans with a total principal outstanding of $413.59 million. The company advanced approximately $52.8 million to borrowers during the quarter while receiving $51.6 million in repayments. The portfolio's weighted average yield-to-maturity internal rate of return (YTM IRR) decreased to 15.8% from 16.3% year-over-year, influenced by recent loan repricing and a decline in the Prime rate. The company also reported that 64.8% of its loans were floating-rate, which exposes it to interest rate risk.
Looking ahead, Chicago Atlantic remains focused on the cannabis industry, which continues to present both opportunities and risks. The company is closely monitoring the evolving legal landscape surrounding cannabis, particularly following recent federal actions that may impact its borrowers. Management expressed confidence in the company's ability to navigate these challenges while maintaining its REIT status and meeting its dividend obligations, having declared a quarterly dividend of $0.47 per share for the first quarter of 2026. The company plans to leverage its existing cash reserves and borrowing capacity to support future growth and investment opportunities.
About Chicago Atlantic Real Estate Finance, Inc.
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