Sachem Capital Reports First Quarter 2025 Results

Positive

• 71.7% increase in income from preferred membership LLC investments
• Reduction in operating costs by $2.1 million year-over-year
• Maintained stable balance sheet with total assets of $491.4 million
• Continued dividend payments maintaining REIT status

Negative

• Revenue declined 32.1% to $11.4 million from $16.8 million YoY
• Net loss of $213,000 compared to $3.6 million profit in Q1 2024
• Elevated amount of nonperforming loans and real estate owned
• Book value per share decreased from $2.64 to $2.57

Insights

Financial Analyst

Sachem Capital posted a slight Q1 loss amid 32% revenue decline, maintained dividend, and showed quarter-over-quarter balance sheet stability despite challenges.

Sachem Capital's Q1 2025 results indicate a company in stabilization mode with mixed signals. Revenue fell 32% year-over-year to $11.4 million from $16.8 million, resulting in a minimal net loss of $213,000 ($0.00 per share) compared to a $3.6 million profit ($0.08 per share) in Q1 2024. This decline stems from reduced loan originations and an elevated level of nonperforming loans.

Despite revenue challenges, the company effectively managed expenses, reducing operating costs by 16.8% to $10.4 million. The balance sheet remained remarkably stable quarter-over-quarter, with total assets of $491.4 million versus $492.0 million at year-end 2024. Book value per share declined slightly to $2.57 from $2.64, with the company attributing most of this decrease to the $3.5 million in dividends paid during the quarter.

The company's continued $0.05 quarterly common dividend despite minimal losses demonstrates management's confidence in near-term cash flow stability. Notably, income from preferred membership investments increased by 71.7%, providing a significant positive offset to declining interest revenue.

Real Estate Investment Expert

Elevated nonperforming loans and reduced originations reflect industry headwinds, but stable balance sheet and maintained dividend suggest effective portfolio management.

Sachem Capital's quarterly results reflect the broader challenges facing real estate lenders, with the 32% year-over-year revenue decline stemming from both strategic decisions and market conditions. The company's reference to "elevated nonperforming loans" is particularly significant for a mortgage REIT, as this directly impacts both current income and potential future write-downs.

The focus on "effectively managing our loan portfolio and protecting our capital" rather than growth indicates a defensive posture appropriate for the current market. With total indebtedness of $305.6 million against $491.4 million in assets, maintaining portfolio quality is crucial to preserving shareholder value.

As a REIT required to distribute 90% of taxable income, Sachem's maintenance of its $0.05 quarterly common dividend alongside the $0.484375 preferred dividend suggests management anticipates sufficient annual taxable income despite the quarterly loss. The significant disparity between common and preferred dividends highlights how the capital structure provides preferred shareholders greater protection during challenging periods.

The quarter-over-quarter stability in the balance sheet is perhaps the most encouraging sign, indicating that while growth remains elusive, the portfolio degradation appears to have stabilized.

- Company to Host Webcast and Conference Call -

BRANFORD, Conn., May 01, 2025 (GLOBE NEWSWIRE) -- Sachem Capital Corp. (NYSE American: SACH) (the “Company”), a real estate lender specializing in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property, today announced its financial results for the quarter ended March 31, 2025.

John Villano, CPA, Sachem Capital’s Chief Executive Officer commented, “The first quarter was one of stability for the Company as we put the challenges of the past year behind us. Our balance sheet showed almost no change from the prior quarter, as we remain focused on effectively managing our loan portfolio and protecting our capital. Our goal is to grow our balance sheet, capitalizing on quality opportunities to invest capital at attractive yields, while maintaining a prudent capital allocation approach. Overall, while uncertainty across the real estate and capital markets remain elevated, we are pleased with the stability of our portfolio and the liquidity on our balance sheet, and we are confident that cash flow and dividend growth will return as we leverage our industry relationships and focus on driving shareholder value.”

Results of operations for the quarter ended March 31, 2025

Total revenue was $11.4 million compared to $16.8 million in the first quarter of 2024. The change in revenue was primarily due to the cumulative effect of fewer originations over the last fifteen months, resulting in a reduction in the unpaid principal balance of loans held for investment, in addition to a currently elevated amount of nonperforming loans and real estate owned. On the other hand, income from our preferred membership limited liability company investments increased approximately 71.7%, compared to the three months ended March 31, 2024.

Total operating costs and expenses for the first quarter of 2025 were $10.4 million compared to $12.5 million in the same quarter last year. The change was primarily due to reductions in interest and amortization expense of $1.4 million, compensation and employee benefits, provision for credit losses related to loans, and other expenses totaling $0.8 million.

Net loss attributable to common shareholders for the first quarter of 2025 was $213,000, or $0.00 per share, compared to net income attributable to common shareholders of $3.6 million, or $0.08 per share for the first quarter of 2024.

Balance Sheet

Total assets as of March 31, 2025 were $491.4 million compared to $492.0 million as of December 31, 2024. Total liabilities as of March 31, 2025 were $312.1 million compared to $310.3 million as of December 31, 2024.

Total indebtedness at quarter-end was $305.6 million. This includes: $227.0 million of notes payable (net of $3.2 million of deferred financing costs) and $78.6 million aggregate outstanding principal amount of the amounts due under various credit facilities and the mortgage loan on the Company’s office building.

Total shareholders’ equity at March 31, 2025 was $179.3 million compared to $181.7 million at year-end 2024. Book value per common share at March 31, 2025 was $2.57 compared to $2.64 at year-end 2024. The $0.07 decrease in book value is primarily due to the aggregate $3.5 million in preferred and common dividends declared and paid during this first quarter 2025.

Dividends

The Company currently operates and qualifies as a Real Estate Investment Trust (REIT) for federal income taxes and intends to continue to qualify and operate as a REIT. Under federal income tax rules, a REIT is required to distribute a minimum of 90% of taxable income each year to its shareholders, and the Company intends to comply with this requirement for the current year.

On March 31, 2025, the Company paid a dividend of $0.484375 per share to the holders of its Series A Preferred Stock of record on March 15, 2025.

On March 31, 2025, the Company paid a dividend of $0.05 per share to its common shareholders of record on March 17, 2025.

Investor Conference Webcast and Call

The Company is hosting a webcast and conference call Thursday, May 1, 2025 at 8:00 a.m. Eastern Time, to discuss in greater detail its financial results for the quarter ended March 31, 2025. A webcast of the call may be accessed on the Company’s website at https://sachemcapitalcorp.com/investor-relations/events-and-presentations/default.aspx.

Interested parties can access the conference call via telephone by dialing toll free 1-877-704-4453 for U.S. callers or 1-201-389-0920 for international callers.

Replay

The webcast will also be archived on the Company’s website and a telephone replay of the call will be available through Thursday, May 15, 2025, and can be accessed by dialing 1-844-512-2921 for U.S. callers or 1-412-317-6671 for international callers and by entering replay passcode: 13752977.

About Sachem Capital Corp

Sachem Capital Corp. is a mortgage REIT that specializes in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property. It offers short-term (i.e., three years or less) secured, nonbanking loans to real estate investors to fund their acquisition, renovation, development, rehabilitation, or improvement of properties. The Company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is secured by a first mortgage lien on real estate and is personally guaranteed by the principal(s) of the borrower. The Company also makes opportunistic real estate purchases apart from its lending activities.

Forward Looking Statements

This press release may contain forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. Such forward-looking statements are subject to several risks, uncertainties and assumptions as described in the Annual Report on Form 10-K for 2024 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2025. Because of these risks, uncertainties and assumptions, any forward-looking events and circumstances discussed in this press release may not occur. You should not rely upon forward-looking statements as predictions of future events. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the Company are expressly qualified in their entirety by these cautionary statements as well as others made in this press release. You should evaluate all forward-looking statements made by the Company in the context of these risks and uncertainties.

Investor & Media Contact:
Email: investors@sachemcapitalcorp.com

SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
		March 31, 2025				December 31, 2024
		(unaudited)				(audited)
Assets
Cash and cash equivalents		$	24,414			$	18,066
Investment securities (at fair value)			1,392				1,517
Loans held for investment (net of deferred loan fees of $2,225 and $1,950)			365,635				375,041
Allowance for credit losses			(18,122	)			(18,470	)
Loans held for investment, net			347,513				356,571
Loans held for sale (net of valuation allowance of $4,876 and $4,880)			10,974				10,970
Interest and fees receivable (net of allowance of $2,981 and $3,133)			4,281				3,768
Due from borrowers (net of allowance of $1,956 and $1,135)			4,413				5,150
Real estate owned, net			18,865				18,574
Investments in limited liability companies			53,935				53,942
Investments in developmental real estate, net			16,432				14,032
Property and equipment, net			3,209				3,222
Other assets			5,967				6,164
Total assets		$	491,395			$	491,976
Liabilities and Shareholders’ Equity
Liabilities:
Notes payable (net of deferred financing costs of $3,232 and $3,713)		$	227,007			$	226,526
Repurchase agreements			41,519				33,708
Mortgage payable			981				1,002
Lines of credit			36,100				40,000
Accounts payable and accrued liabilities			2,705				4,377
Advances from borrowers			3,079				4,047
Below market lease intangible			665				665
Total liabilities			312,056				310,325
Commitments and Contingencies - Note 13
Shareholders’ equity:
Preferred shares - $0.001 par value; 5,000,000 shares authorized; 2,903,000 shares designated as Series A Preferred Stock; 2,306,748 shares of Series A Preferred Stock issued and outstanding at March 31, 2025 and December 31, 2024			2				2
Common Shares - $0.001 par value; 200,000,000 shares authorized; 47,310,139 and 46,965,306 issued and outstanding at March 31, 2025 and December 31, 2024, respectively			47				47
Additional paid-in capital			257,220				256,956
Cumulative net earnings			36,422				35,518
Cumulative dividends paid			(114,352	)			(110,872	)
Total shareholders’ equity			179,339				181,651
Total liabilities and shareholders’ equity		$	491,395			$	491,976

SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data)
		Three Months Ended
		March 31,
		2025				2024
Revenues
Interest income from loans		$	7,887			$	12,641
Fee income from loans			1,425				2,616
Income from limited liability company investments			2,052				1,195
Other investment income			6				316
Other income			72				35
Total revenues			11,442				16,803
Operating expenses
Interest and amortization of deferred financing costs			6,094				7,469
Compensation and employee benefits			1,771				1,943
General and administrative expenses			1,355				1,239
Provision for credit losses related to loans held for investment			1,052				1,365
Change in valuation allowance related to loans held for sale			(4	)			—
Loss on sale of real estate owned and property and equipment, net			—				11
Other expenses			145				503
Total operating expenses			10,413				12,530
Operating income			1,029				4,273
Other (loss) income, net
(Loss) gain on equity securities			(125	)			397
Total other (loss) income, net			(125	)			397
Net income			904				4,670
Preferred stock dividend			(1,117	)			(1,022	)
Net (loss) income attributable to common shareholders		$	(213	)		$	3,648
Basic and diluted (loss) earnings per Common Share		$	(0.00	)		$	0.08
Basic and diluted weighted average Common Shares outstanding			46,784,744				47,128,511

SACHEM CAPITAL CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
		Three Months Ended
		March 31,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	904			$	4,670
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs			545				624
Depreciation expense			92				94
Stock-based compensation			264				239
Provision for credit losses related to loans held for investment			1,052				1,365
Change in valuation allowance related to loans held for sale			(4	)			—
Loss on sale of real estate owned and property and equipment, net			—				11
Loss (gain) on equity securities			125				(397	)
Change in deferred loan fees			275				(291	)
Changes in operating assets and liabilities:
Interest and fees receivable, net			(361	)			392
Other assets			133				(63	)
Due from borrowers, net			(254	)			(1,038	)
Accounts payable and accrued liabilities			(1,612	)			433
Advances from borrowers			(968	)			(1,822	)
Total adjustments and operating changes			(713	)			(453	)
NET CASH PROVIDED BY OPERATING ACTIVITIES			191				4,217
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities			—				(7,725	)
Proceeds from the sale of investment securities			—				7,128
Purchase of interests in limited liability companies			(4,223	)			(3,186	)
Proceeds from limited liability companies returns of capital			4,230				—
Proceeds from sale of real estate owned			89				121
Acquisitions of and improvements to real estate owned			—				(749	)
Purchase of property and equipment			(41	)			(14	)
Improvements in investment in developmental real estate			(742	)			—
Principal disbursements for loans			(41,308	)			(42,654	)
Principal collections on loans			47,742				51,398
NET CASH PROVIDED BY INVESTING ACTIVITIES			5,747				4,319
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from lines of credit			36,100				460
Repayments on lines of credit			(40,000	)			(600	)
Proceeds from repurchase agreements			11,693				—
Repayments of repurchase agreements			(3,882	)			—
Repayment of mortgage payable			(21	)			(20	)
Dividends paid on Common Shares			(2,363	)			(5,144	)
Dividends paid on Series A Preferred Stock			(1,117	)			(1,022	)
Proceeds from issuance of Common Shares, net of expenses			—				2,049
Proceeds from issuance of Series A Preferred Stock, net of expenses			—				1,556
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			410				(2,721	)
NET INCREASE IN CASH AND CASH EQUIVALENTS			6,348				5,815
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD			18,066				12,598
CASH AND CASH EQUIVALENTS – END OF PERIOD		$	24,414			$	18,413

FAQ

What were Sachem Capital's (SACH) Q1 2025 earnings results?

Sachem Capital reported a net loss of $213,000 ($0.00 per share) on revenue of $11.4 million, compared to net income of $3.6 million ($0.08 per share) on revenue of $16.8 million in Q1 2024.

What dividend did SACH pay in Q1 2025?

Sachem Capital paid a dividend of $0.05 per common share and $0.484375 per Series A Preferred Share on March 31, 2025.

What is Sachem Capital's (SACH) book value per share as of Q1 2025?

Sachem Capital's book value per share was $2.57 as of March 31, 2025, down from $2.64 at the end of 2024.

What caused Sachem Capital's revenue decline in Q1 2025?

The revenue decline was primarily due to fewer loan originations over the last fifteen months and an elevated amount of nonperforming loans and real estate owned.

What is Sachem Capital's (SACH) total debt as of Q1 2025?

Total indebtedness was $305.6 million, including $227.0 million in notes payable and $78.6 million in credit facilities and mortgage loan.