Key Highlights

  • GAAP diluted Earnings were USD 0.25 per share in the third quarter of 2026, down from USD 0.42, on Net Income of USD 6.43 million versus USD 8.93 million.
  • Management reported adjusted distributable earnings of USD 0.49 per diluted share, a non-GAAP measure that includes about USD 2.6 million of Koach note interest and fees excluded from GAAP.
  • The company paid its regular USD 0.47 quarterly dividend, its 18th in a row, and reported adjusted Book Value of USD 14.12 per share against USD 14.15 at June 30.
  • The provision for expected Credit losses rose to USD 2.77 million from USD 0.56 million, and non-accruals were about 3.1% of the USD 527.7 million Loan portfolio principal.

GAAP Earnings Trail the Dividend; Distributable Earnings Cover It

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) filed its Quarterly Report and held its call on November 10, 2026. The REIT lends to state-licensed cannabis operators against real estate and other collateral. Net interest income was USD 12.47 million versus USD 13.69 million, and diluted GAAP earnings of USD 0.25 equal about 53% of the USD 0.47 Dividend (calculated). Distributable earnings of USD 0.49 per diluted share equal about 104% of it (calculated). The gap comes from the Koach notes, which GAAP treats as a reduction of Equity instead of interest income. For nine months, net income was USD 18.75 million, or USD 0.82 per diluted share, against USD 27.85 million, or USD 1.30, and the quarter included a USD 0.94 million gain on foreclosure.

Koach Notes, Credit Reserves and the Proposed BDC Merger

In July the company issued about 4.3 million shares in exchange for second Lien Koach notes with USD 62.6 million of principal. One of the 32 Koach notes was repaid after a Florida property sale, producing about USD 0.9 million of fee income. Management said the notes earned an annualized return above 18% in the quarter and that the CECL reserve was USD 12.3 million, about 2.9% of held-for-investment principal. The board has approved a Merger with Chicago Atlantic BDC, ticker LIEN, and REFI's election to be regulated as a business development company, subject to stockholder approval. The registration statement has not been declared effective, and the exchange ratio and timing are listed as risks.

Leverage, Liquidity and a Slower Fourth Quarter

Total Leverage was 48% of book equity, with USD 94.35 million drawn on the revolver and a USD 50 million unsecured term loan. Management said about USD 15.2 million remains available on the senior Facility and expects originations to slow in the fourth quarter. Principal fundings were USD 85.1 million in the quarter, including the Koach transaction, and the portfolio's weighted average Yield to Maturity was 14.8%. About 64% of loans float, and share count rose to 25.6 million from 21.1 million at the end of 2025. Management said each 25 basis point rate rise should add about USD 0.015 per share to quarterly distributable earnings, and that year-to-date total return was about negative 17% to 18% through November 6.

Where Things Stand

On the company's own measure, yes: distributable earnings of USD 0.49 per diluted share exceeded the USD 0.47 dividend, though GAAP earnings of USD 0.25 did not. Chicago Atlantic Real Estate Finance (NASDAQ:REFI) therefore depends on how investors weigh the Koach income, which sits outside GAAP net income but is included in REIT taxable income. Higher credit provisions, steady non-accruals and tight liquidity add caution. The next markers are the BDC merger approvals, fourth-quarter originations, Koach repayments and the next quarterly dividend declaration.