CHICAGO, Illinois, August 14, 2026- Chicago Atlantic BDC Inc. has announced its financial and operational results for the second quarter of 2026. BDC, whose focus is on senior secured lending to lower middle-market companies as well as those in the cannabis industry, registered a decline in net investment income during the quarter under review, after posting strong numbers in the previous one. While the rate of deployment and revenue from fees was slower than expected, the firm demonstrated outstanding credit underwriting and had no non-accruals and kept the quarterly dividend unchanged before transforming.
The net investment income for the quarter ended June 30, 2026, amounted to $7.7 million or $0.34 per share. It was 22.7% lower than in Q1 2026 when it reached the record-high level of $10 million, or $0.44 per share. Gross investment income for the quarter amounted to $14 million, a 16.2% decrease from the prior quarter’s $16.7 million and below the consensus revenue estimates of $15.45 million and EPS estimates of $0.375 per share.
Despite the quarterly deceleration, the company’s Board of Directors declared a regular second-quarter dividend of $0.34 per share, fully covered by earnings. Peter Sack, Chief Executive Officer of the Company, commented, “The second quarter reflected the continued strength of our portfolio and disciplined underwriting approach. The decline in portfolio fair value was driven primarily by repayments and amortization activity rather than credit deterioration or valuation markdowns. With no investments on non-accrual status, steady portfolio risk ratings, and a 100% senior secured debt portfolio generating a weighted average yield on debt investments of 16.0%, we remain positioned to generate attractive risk-adjusted returns.”
This is the eighth consecutive quarter of uninterrupted distributions, and the annualized dividend paid out is $1.36 per share, with a compelling dividend yield of around 14%. On the other hand, the net asset value per share has dropped marginally from $13.33 to $13.26 for the quarter, providing net assets of $302.5 million. The total fair value of the debt instruments is stated as $334.8 million, which is down from $363.9 million as of March 31, 2026, primarily due to increased payments against the loans.
The quarter saw the natural lumpiness associated with specialized lending approaches. Gross repayments from the portfolio were $32.2 million, including three complete repayments, while the gross originations amounted to $2.7 million in the second quarter. Capital deployment picked up immediately following the close of the quarter, led by a $25 million debt investment made following the close of the quarter. It is important to note that the portfolio still shows solid underwriting, as all the portfolio loans continue to be senior-secured, and there are no non-accrual loans on the portfolio. All the repayments have been made at par without any realized losses, achieving a lifetime weighted-average contractual yield in the high teens.
Moving forward, the company maintains a solid active deal pipeline, totalling $1.1 billion, of which $649 million is related to cannabis deals and $440 million to non-cannabis lower-middle-market lending. The key operational driver is still an ongoing all-stock, NAV-for-NAV merger with Chicago Atlantic Real Estate Finance, Inc. After the filing of Form N-14 and proxy materials with the U.S. Securities and Exchange Commission (SEC) in July, the deal is expected to be completed in the fourth quarter of 2026, pending stockholder and regulatory approval.
The combination would result in a scaled-up, cost-efficient platform with more than $600 million of book equity. Management highlighted that this scale would help to improve cost of capital, gain access to institutional capital, enhance liquidity of secondary share trading, and build up a complementary asset base, which is well-suited for capturing market share in capital-starved lending segments. With total liquidity reaching $47.2 million, including $46.5 million available under the credit facility, and analyst earnings revisions turning favorable due to improved second-half deployment, Chicago Atlantic BDC looks well-prepared for potential macroeconomic challenges.
