Chicago Atlantic Real Estate Finance Inc (REFI) 2024 Q2 法說會逐字稿

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)

美好的一天，感謝您的支持。歡迎參加芝加哥大西洋房地產金融公司 2024 年第二季財報電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後，將進行問答環節。（操作員說明）

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.

請注意，今天的會議正在錄製中。現在我想介紹一下今天會議的主持人，投資者關係部的特里普·沙利文先生。請繼續。

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.

謝謝。早安.歡迎參加芝加哥大西洋房地產金融電話會議，回顧該公司的表現。今天的電話會議由執行主席約翰·馬扎拉基斯 (John Mazarakis) 主持；彼得·薩克，聯合執行長；菲爾·西爾弗曼（Phil Silverman），財務長。

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 made available today. For those who listen to the replay of this webcast, we remind you that the remarks made herein are as of today and will not be updated subsequent to this call.

我們的業績今天早上在我們的收益新聞稿中發布，您可以在我們網站的投資者關係部分找到該新聞稿，以及我們向 SEC 提交的補充資料。今天將提供本次電話會議的現場音訊網路廣播。對於那些收聽本次網路廣播重播的人，我們提醒您，本文中的言論截至今天，不會在本次電話會議後更新。

During this call, certain comments and statements we make may be deemed forward-looking statements within the meaning prescribed by the securities laws, including statements related to the future performance of our portfolio, our pipeline of potential loans and other investments, future dividends, and financing activities.

在本次電話會議中，我們所做的某些評論和聲明可能被視為證券法規定含義內的前瞻性聲明，包括與我們投資組合的未來業績、我們的潛在貸款和其他投資管道、未來股息和融資活動。

All forward-looking statements represent Chicago Atlantic's judgment as of the date of this conference call and are subject to risk and uncertainties that can cause actual results to differ materially from our current expectations. Investors are urged to carefully review various disclosures made by the company, including the risk and other information disclosed in the company's filings with the SEC.

所有前瞻性陳述均代表芝加哥大西洋航空公司截至本次電話會議之日的判斷，並受到風險和不確定性的影響，這些風險和不確定性可能導致實際結果與我們當前的預期有重大差異。投資者應仔細審查公司披露的各種信息，包括公司向 SEC 提交的文件中披露的風險和其他信息。

We also will discuss certain non-GAAP measures, including but not limited to distributable earnings and adjusted distributable earnings. Definitions of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in our filings with the SEC.

我們也將討論某些非公認會計原則措施，包括但不限於可分配收益和調整後的可分配收益。這些非 GAAP 衡量標準的定義以及與最具可比性的 GAAP 衡量標準的調整均包含在我們向 SEC 提交的文件中。

I will now turn the call over to John Mazarakis. Please go ahead.

我現在將把電話轉給約翰·馬扎拉基斯。請繼續。

Thanks, Tripp. Good morning, everyone. The possible federal rescheduling, the addition of adult use on the ballot in Florida this November, and the optimism surrounding the Ohio adult use rollout have many of our operators and those in our pipeline planning for future growth. We will be ready to help them grow.

謝謝，特里普。大家早安。可能的聯邦重新安排、今年 11 月在佛羅裡達州的選票上增加成人使用，以及圍繞俄亥俄州成人使用推出的樂觀情緒，讓我們的許多運營商和正在規劃未來增長的運營商。我們將準備好幫助他們成長。

Despite those tailwinds, you should not be shocked to hear from us that we have maintained a very conservative approach to growing the portfolio, especially given the recent volatility in the public markets. We are focused on attractive risk-adjusted returns that provide an appropriate spread over our cost of capital with exceptionally strong coverage and collateral.

儘管有這些順風車，但當您聽到我們的消息時，您不應該感到驚訝，因為我們在擴大投資組合方面一直保持著非常保守的態度，特別是考慮到最近公開市場的波動。我們專注於有吸引力的風險調整回報，透過異常強大的覆蓋範圍和抵押品，為我們的資本成本提供適當的利差。

Until federal legalization is passed, we will continue to underwrite new loans as if rescheduling never happens. We are never surprised on the downside and like to think that we have already accounted for the potential upside in any opportunity.

在聯邦合法化通過之前，我們將繼續承銷新貸款，就好像重新安排從未發生過一樣。我們對不利因素從不感到驚訝，並且喜歡認為我們已經考慮到了任何機會的潛在好處。

Our pipeline across the Chicago Atlantic platform currently stands at $508 million. We are still prioritizing operators in limited licensed states and those positioned to transition from medical to adult use. That means we are active in Maryland, Missouri, Minnesota and Ohio with investments in Florida-based assets accounting for 12% of our portfolio at quarter end. We believe we are very well positioned to continue backing the best operators in that state if adult use is ultimately approved.

我們橫跨芝加哥大西洋平台的管道目前價值 5.08 億美元。我們仍然優先考慮有限許可州的運營商以及那些定位於從醫療過渡到成人用途的運營商。這意味著我們活躍在馬裡蘭州、密蘇裡州、明尼蘇達州和俄亥俄州，截至季度末，佛羅裡達州資產的投資占我們投資組合的 12%。我們相信，如果成人使用最終獲得批准，我們有能力繼續支持州內最好的操作員。

We once again deployed the ATM program to source accretive capital. During the quarter, we issued approximately 410,000 shares at a weighted average price of $15.76, raising net proceeds of approximately $6.3 million. Each issuance was transacted at a premium-to-book value.

我們再次部署ATM專案來獲取增值資金。本季度，我們以 15.76 美元的加權平均價格發行了約 41 萬股股票，籌集了約 630 萬美元的淨收益。每次發行均以帳面價值溢價進行交易。

Peter, why don't you take it from here?

彼得，你為什麼不把它從這裡拿走？

Good morning. As of June 30, our loan portfolio totaled $383 million across 31 portfolio companies with a weighted average yield to maturity of 18.7%. That's down from 19.4% as of March 31 due to primarily two idiosyncratic actions related to derisking.

早安.截至 6 月 30 日，我們的貸款組合總額為 3.83 億美元，涉及 31 家投資組合公司，加權平均到期收益率為 18.7%。這一比例較截至 3 月 31 日的 19.4% 有所下降，這主要是由於兩項與去風險相關的特殊行動所致。

In one instance, a loan that is priced on a grid relative to performance shifted down in its pricing due to strong execution and performance of the borrower. In the second instance, we refinanced the position to create stronger real estate collateral and accepted a lower return profile in the process. Our weighted average loan-to-enterprise value was 42%, compared with 40.5% as of March 31.

在一個例子中，由於借款人的強勁執行力和表現，按績效定價的貸款其定價下降。在第二種情況下，我們對該頭寸進行了再融資，以創造更強大的房地產抵押品，並在此過程中接受了較低的回報率。我們的加權平均企業貸款價值為 42%，而截至 3 月 31 日為 40.5%。

Gross originations were $20.9 million of principal fundings, of which, $11.2 million and $9.7 million was funded to new borrowers and existing borrowers, respectively. We had an unscheduled principal repayment of loan number one for $4.3 million during the quarter, which, together with new originations, contributed to the approximate $6 million in portfolio growth. The percentage of our portfolio that is floating rate based off the prime rate remained at approximately 76% compared with March 31.

原始資金總額為 2,090 萬美元，其中 1,120 萬美元和 970 萬美元分別提供給新借款人和現有借款人。本季度，我們對第一筆貸款進行了 430 萬美元的計劃外本金償還，加上新的貸款，為投資組合增長做出了約 600 萬美元的貢獻。與 3 月 31 日相比，我們的投資組合中基於最優惠利率的浮動利率的比例仍維持在約 76%。

We've kept leverage low at 26% of book equity at quarter end compared with 28% at year end. Our debt service coverage ratio on a consolidated basis for the quarter was approximately 5.3 to 1 compared with a requirement of 1.35 to 1. We continued to enhance our revolving credit facility by increasing the size once again to $105 million in total.

季度末我們將槓桿率保持在帳面淨值 26% 的低水平，而年底則為 28%。本季綜合償債覆蓋率約為 5.3 比 1，而要求為 1.35 比 1。我們持續增強循環信貸額度，再次將總規模增至 1.05 億美元。

As of June 30, we had $76.8 million outstanding on the facility and we've subsequently drawn down another $4.5 million. That leaves us a total of approximately $31.5 million in operational liquidity, net of estimated liabilities. The facility is our primary means of funding new originations, along with the continued disciplined execution on the ATM program.

截至 6 月 30 日，我們的貸款餘額為 7,680 萬美元，隨後我們又提領了 450 萬美元。扣除預計負債後，我們的營運流動資金總計約 3,150 萬美元。該設施是我們資助新項目以及持續嚴格執行 ATM 計劃的主要手段。

Given the substantial spread we are earning with capital that we put to work with new originations, we continue to explore other sources of capital that position us to accelerate deployment later in the year.

鑑於我們透過用於新專案的資本獲得了巨大的利差，我們將繼續探索其他資本來源，使我們能夠在今年稍後加速部署。

I'll now turn it over to Phil.

我現在把它交給菲爾。

Thanks, Peter. Our net interest income for the second quarter was consistent with the first quarter at $13.2 million. Gross interest income from occurring cash interest, PIK interest, unused fees, and amortization of discounts decreased by $0.3 million for the comparable period.

謝謝，彼得。我們第二季的淨利息收入與第一季持平，為 1,320 萬美元。同期發生的現金利息、PIK 利息、未使用費用和折扣攤銷產生的總利息收入減少了 30 萬美元。

Interest expenses also decreased $0.3 million due to low to weighted average borrowings of $78.3 million during the second quarter, compared with $90.3 million during the first quarter. We recognized approximately $0.1 million of prepayment fees during Q2.

由於第二季加權平均借款為 7,830 萬美元，而第一季為 9,030 萬美元，利息支出也減少了 30 萬美元。我們在第二季確認了約 10 萬美元的預付款費用。

Unscheduled loan repayments remain largely unpredictable and we believe the second quarter net interest income remains representative of the current portfolio's run rate performance.

計劃外貸款償還在很大程度上仍然不可預測，我們認為第二季淨利息收入仍然代表當前投資組合的運行率表現。

Total operating expenses before the provision for credit losses increased approximately $150,000 from Q1 2024, primarily resulting from incremental stock-based compensation of $300,000 resulting from restricted stock award grants made during the second quarter. Other administrative and professional fees remained relatively consistent, decreasing by $100,000 in Q2 compared with Q1.

信貸損失撥備前的總營運費用較 2024 年第一季增加了約 15 萬美元，主要是由於第二季授予的限制性股票獎勵導致股票補償增加了 30 萬美元。其他行政和專業費用保持相對穩定，第二季比第一季減少了 10 萬美元。

Our CECL reserve as of June 30, 2024 was approximately $5.1 million, compared with $5.4 million as of March 31. And on a relative size basis, our reserve for expected credit losses represents 1.3% of outstanding principal.

截至 2024 年 6 月 30 日，我們的 CECL 儲備金約為 510 萬美元，而截至 3 月 31 日為 540 萬美元。從相對規模來看，我們的預期信用損失準備金佔未償本金的 1.3%。

Credit quality of the portfolio has remained stable with 88% of the portfolio risk-graded 3 or better as of June 30. Loan number nine remains on non-accrual status and is included in risk-grading number four and carries a reserve for credit losses of approximately $1.7 million. In July, subsequent to quarter end, we received a full repayment of loan number 14 together with all applicable interest and fees payable. This loan is included in risk-grading one as of June 30. Our portfolio, on a weighted average basis, had real estate collateral coverage of 1.3 times as of both June 30th and March 31.

截至6月30日，投資組合的信用品質維持穩定，88%的投資組合風險評等為3級或以上。第九號貸款仍處於非應計狀態，屬於第四號風險評級，並保留了約 170 萬美元的信貸損失準備金。7 月，季度末後，我們收到了 14 號貸款的全額償還以及所有適用的應付利息和費用。截至 6 月 30 日，這筆貸款已納入風險評級之一。截至 6 月 30 日和 3 月 31 日，我們的投資組合以加權平均計算，房地產抵押品覆蓋率為 1.3 倍。

Adjusted distributable earnings per weighted average diluted share was $0.50 for Q2 2024, compared with $0.52 for the first quarter. In July, we distributed the second quarter regular dividend declared by our board of $0.47 per common share, which was consistent with prior quarter and the second quarter of last year.

2024 年第二季調整後加權平均稀釋每股可分配收益為 0.50 美元，而第一季為 0.52 美元。7 月，我們派發了董事會宣布的第二季定期股息，每股普通股 0.47 美元，與上一季和去年第二季一致。

Our book value as of June 30 was $14.92 per common share, compared with $14.97 as of March 31. On a fully diluted basis, there were approximately 20.1 million common shares outstanding as of June 30, compared with 19.5 million common shares outstanding as of March 31. Lastly, we've affirmed our guidance previously issued on March 12.

截至 6 月 30 日，我們的帳面價值為每股普通股 14.92 美元，而截至 3 月 31 日，我們的帳面價值為每股普通股 14.97 美元。在完全稀釋的基礎上，截至 6 月 30 日，已發行普通股約為 2,010 萬股，而截至 3 月 31 日，已發行普通股為 1,950 萬股。最後，我們確認了 3 月 12 日發布的指導意見。

Operator, we're now ready to take questions.

接線員，我們現在準備好回答問題。

Thank you. (Operator Instructions) Crispin Love, Piper Sandler.

謝謝。（操作說明）Crispin Love，Piper Sandler。

First, just let me talk about the potential for a pickup in origination from the second half of the year. Can you discuss your capacity to take advantage of those opportunities? I think you mentioned you have $24 million available in the credit facility. So are there other actions you think you need to take, either on the debt side or continue to tap the ATM to fund those originations, or do you feel good from a capacity perspective here?

首先，我想談談下半年開始回升的可能性。您能談談您利用這些機會的能力嗎？我想你提到過你有 2400 萬美元的可用信貸額度。那麼，您認為還需要採取其他行動嗎？

Crispin, I'm not sure if you heard the answer to my question, but we have $31.5 million of operational liquidity going into the second half of the year and we're excited for the opportunities that are in front of us.

Crispin，我不確定您是否聽到了我的問題的答案，但我們下半年的營運流動資金為 3150 萬美元，我們對擺在我們面前的機會感到興奮。

There is a pretty profound change in optimism in the industry, additional investment, additional growth opportunities, additional M&A and we continue to evaluate opportunities in the market for additional debt and equity capital to take advantage of those opportunities.

該行業的樂觀情緒發生了相當深刻的變化，增加了投資，增加了成長機會，增加了併購，我們繼續評估市場上增加債務和股權資本的機會，以利用這些機會。

All right. Thank you. I appreciate that. And then, just with the presidential election just a few months away, along with other state elections, I think you mentioned Florida specifically, but can you discuss what you might be looking for leading up to and post the elections from a cannabis perspective? And what are some of the pros and cons that could come from them and impact the business over the near and intermediate term?

好的。謝謝。我很欣賞這一點。然後，就在幾個月後的總統選舉以及其他州選舉中，我想您特別提到了佛羅裡達州，但您能否從大麻的角度討論一下您在選舉前和選舉後可能會尋找什麼？它們可能帶來哪些優缺點並在短期和中期影響業務？

I think there is -- all eyes are on rescheduling and how that process unfolds prior to the election and we're hopeful that as much of the rulemaking process as possible can occur before the election, but we'll have to see. And I think there's a lot of uncertainty as to what will be accomplished before the election and how the election and a new presidency may impact that.

我認為，所有的目光都集中在重新安排以及選舉前如何展開這一過程，我們希望盡可能多的規則制定過程能夠在選舉前進行，但我們必須拭目以待。我認為，選舉前將完成什麼以及選舉和新總統任期可能會如何影響這一點存在很大的不確定性。

I think one of the positives of an election, regardless of who's on the ballot, is greater dialogue about this topic and about greater liberalization of cannabis policies, both at a federal level and a state level. And I think the history of the last 10 years has shown that that dialogue tends to lead to progress, even if it's slow and even if it is halting at times.

我認為，無論誰參加選票，選舉的積極因素之一是在聯邦一級和州一級就這一主題以及大麻政策更大程度的自由化進行更多對話。我認為過去十年的歷史已經表明，這種對話往往會帶來進步，即使進展緩慢，甚至有時會停止。

Great. Thank you. And then just one last quick one for me, just on scheduling, can you update us where we stand today and then just on any key milestones you're looking for over the near and intermediate term? I think you talked about kind of the rule process making, but any other detail there on scheduling? Thanks.

偉大的。謝謝。對我來說，最後一個快速的問題是關於日程安排，您能否向我們介紹我們今天的最新情況，以及您在近期和中期尋找的任何關鍵里程碑？我想你談到了規則流程的製定，但還有關於日程安排的其他細節嗎？謝謝。

We're looking for the outcome of the review of the comment period. I think that's probably the next benchmark on the horizon and then I think there's a lot of uncertainty.

我們正在尋找評論期的審查結果。我認為這可能是即將到來的下一個基準，而且我認為存在許多不確定性。

And at Chicago Atlantic, we don't have a secret crystal ball to evaluate how the DoJ will proceed in this process and so we're underwriting our loan book appropriately. I think you'll continue to see a conservative approach from us until there is more certainty on rescheduling and what a formal rule looks like and what potential challenges to that rule look like.

在芝加哥大西洋航空公司，我們沒有秘密的水晶球來評估司法部將如何推進這一過程，因此我們正在適當地承保我們的貸款簿。我認為您將繼續看到我們採取保守的做法，直到重新安排、正式規則是什麼樣子以及該規則可能面臨什麼樣的潛在挑戰變得更加確定。

Mark Smith, Lake Street.

馬克史密斯，湖街。

First question for me, just wanted to ask about kind of new states. You call that kind of Ohio, Minnesota, some others. Kind of what you're seeing from newly legal states, as well as anywhere where you see geographic strength or weakness?

我的第一個問題，只是想問一些新的狀態。你稱這種情況為俄亥俄州、明尼蘇達州或其他一些州。您從新合法化的州以及您認為地理優勢或劣勢的任何地方看到了什麼？

I think the news out of Ohio this week has been very exciting and we've seen flash numbers from our borrowers in Ohio from the first day of adult use sales that are extremely encouraging about the prospects of that state. And I expect we're going to continue to see opportunities to deploy as existing dispensary owners who received additional licenses seek to build out their footprint and as the wholesale market looks to catch up with demand.

我認為本週來自俄亥俄州的消息非常令人興奮，從成人使用銷售的第一天起，我們就看到俄亥俄州借款人的閃現數字，這對該州的前景非常令人鼓舞。我預計我們將繼續看到部署的機會，因為獲得額外許可證的現有藥房所有者尋求擴大其足跡，並且批發市場希望趕上需求。

Depending on the outlook on the results of the ballot initiative in Florida in November, we're going to see additional opportunities to deploy in that state and we are optimistic -- cautiously optimistic about the outcome of that referendum.

根據 11 月佛羅裡達州投票倡議結果的前景，我們將看到在該州部署的更多機會，我們對公投的結果持樂觀態度——謹慎樂觀。

Pennsylvania is in the center of the industry's focus to see where the debate on adult use will lead. And I think smaller state of Kentucky's medical program is an interesting example of a new medical program in a conservative jurisdiction that I think will present opportunities for us and others.

賓州處於行業焦點的中心，看看關於成人使用的爭論將走向何方。我認為肯塔基州較小的州的醫療計劃是保守管轄區新醫療計劃的一個有趣的例子，我認為這將為我們和其他人提供機會。

Perfect. And then any thoughts? I know you just kind of said that you don't have a crystal ball, but if you're seeing any changes or kind of early green shoots around kind of build out ahead of potential rescheduling? Are you seeing people start to make moves or is everybody really just in kind of a wait and see mode until there's something more concrete?

完美的。然後有什麼想法嗎？我知道你只是說你沒有水晶球，但如果你在可能的重新安排之前看到任何變化或早期的綠芽？您是否看到人們開始採取行動，或者每個人都只是處於觀望狀態，直到出現更具體的情況？

Operators are -- I think some operators are making more aggressive moves, some are making more conservative moves. But that optimism has definitely led to additional willingness to take risk that I think wasn't there six months ago or a year ago.

營運商—我認為一些營運商正在採取更激進的舉措，一些營運商正在採取更保守的舉措。但這種樂觀情緒肯定會導致人們更願意承擔風險，我認為這是六個月前或一年前所沒有的。

Thank you. Showing no further questions. Ladies and gentlemen, this will conclude today's conference call. Thank you for participating and you may now disconnect. Everyone, have a great day.

謝謝。沒有顯示任何進一步的問題。女士們、先生們，今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。大家，祝你有美好的一天。