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Sachem Capital Reports Second Quarter 2023 Results – Produces Record Revenue Growth of 31.2% to $16.5 Million

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Sachem Capital Corp. announced its financial results for the second quarter of 2023, reporting a total revenue growth of 31.2% to approximately $16.5 million. The company's net income attributable to common shareholders for the quarter was approximately $4.8 million, or $0.11 per share. Total assets grew 10.3% to approximately $624.0 million, while total liabilities increased to approximately $395.0 million. The company paid a quarterly dividend of $0.13 per share to shareholders of record. Sachem Capital Corp. will host a webcast and conference call to discuss its financial results.
Positive
  • Total revenue grew 31.2% to approximately $16.5 million for the second quarter of 2023.
  • Net income attributable to common shareholders was approximately $4.8 million, or $0.11 per share.
  • Total assets grew 10.3% to approximately $624.0 million.
  • The company paid a quarterly dividend of $0.13 per share to shareholders of record.
Negative
  • None.

- Company to Host Webcast and Conference Call -

BRANFORD, Conn., Aug. 14, 2023 (GLOBE NEWSWIRE) -- Sachem Capital Corp. (NYSE American: SACH) announced its financial results for the quarter ended June 30, 2023. The company will host a webcast and conference Tuesday, August 15, 2023 at 8:00 a.m. Eastern Time to discuss in greater detail its financial performance and operating results for the second quarter.

John Villano, CPA, Sachem Capital’s Chief Executive Officer, stated, “We produced another strong quarter of earnings as we effectively navigated the volatility and uncertainty in the current economy. Armed with enhanced underwriting and a high-quality team, Sachem remains steadfast in its ability to originate loans that minimize risk and insulate our portfolio. We continue to explore opportunities to expand our lending business, despite the ongoing market dislocation. Going forward, we will continue to be judicious in our approach to capital deployment to provide our shareholders with long-term and sustainable risk-adjusted returns.”

Results of operations for quarter ended June 30, 2023

Total revenue grew 31.2% to approximately $16.5 million, compared to $12.5 million for the quarter ended June 30, 2022. The growth in revenue was due primarily to an increase in lending operations, as well the rates that the Company was able to charge borrowers. For the second quarter 2023, interest income was approximately $11.9 million compared to approximately $10.4 million for the 2022 period.

Total operating costs and expenses for the quarter ended June 30, 2023 were approximately $10.8 million, compared to $7.3 million for 2022 period. Given the company’s ongoing investments in its growth strategies, the largest contributor to this increase was interest and amortization of deferred financing costs, which were approximately $7.1 million in the quarter, compared to $5.2 million in 2022 period. The balance of the changes was attributable to (i) approximately $671,000 in general and administrative expenses, (ii) approximately $375,000 of compensation, fees and taxes, (iii) approximately $210,000 loss on sale of real estate, and (iv) approximately $183,000 of impairment loss.

Net income attributable to common shareholders for the three months ended June 30, 2023 was approximately $4.8 million, or $0.11 per share, compared to $4.3 million, or $0.12 per share for the three months ended June 30, 2022.

Balance Sheet

Total assets at June 30, 2023 grew 10.3% to approximately $624.0 million compared to $565.7 million at December 31, 2022. The rise in assets was due primarily to the growth in the company’s mortgage loan portfolio and in its investment securities holdings, which increased approximately $46.0 million and $12.6 million, respectively. Total liabilities at June 30, 2023 were approximately $395.0 million compared to $348.0 million at December 31, 2022.

Total indebtedness at quarter end included approximately $281.2 million of notes payable (net of approximately $7.2 million of deferred financing costs), approximately $35.9 million balance on the margin loan account with Wells Fargo Advisors and on the revolving credit facility with Needham Bank, approximately $50.5 million outstanding on the master repurchase financing facility with an affiliate of Churchill Real Estate, approximately $1.7 million outstanding on the mortgage loan with New Haven Bank, and approximately a $6.2 million secured note payable with PeoplesBank.

Total shareholders’ equity at June 30, 2023 rose $11.3 million to approximately $229.0 million compared to $217.7 million at December 31, 2022. The change was primarily due to additional paid-in capital of approximately $10.4 million.

Dividends

Subsequent to quarter end, on August 11, 2023, the company paid a quarterly dividend of $0.13 per share to shareholders of record as of the close of trading on the NYSE American on August 7, 2023.

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.

Investor Conference Webcast and Call

The company will host a webcast and conference call tomorrow, Tuesday, August 15, 2023 at 8:00 a.m. Eastern Time, to discuss in greater detail its financial results for the quarter ended June 30, 2023. A webcast of the call may be accessed on Sachem’s website at https://ir.sachemcapitalcorp.com/ir-calendar.

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 Tuesday, August 29, 2023 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: 13739152.

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 loan 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 will also make 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. The words “anticipate,” “estimate,” “expect,” “project,” “plan,” “seek,” “intend,” “believe,” “may,” “might,” “will,” “should,” “could,” “likely,” “continue,” “design,” and the negative of such terms and other words and terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based primarily on management’s current expectations and projections about future events and trends that management believes may affect the company’s financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the Annual Report on Form 10-K for 2022 filed with the U.S. Securities and Exchange Commission on March 31, 2023, as supplemented by subsequently filed Quarter Reports on Form 10-Q. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, the company cannot guarantee future results, level of activity, performance, or achievements. In addition, 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.
CONSOLIDATED BALANCE SHEETS
(unaudited)
       
  June 30, 2023 December 31, 2022
  (unaudited) (audited)
Assets      
Cash and cash equivalents $15,128,984  $23,713,097 
Investment securities  37,201,120   24,576,462 
Mortgages receivable, net  506,653,156   460,633,268 
Interest and fees receivable  7,736,475   6,309,845 
Due from borrowers  6,765,910   5,276,967 
Real estate owned  4,998,934   5,216,149 
Investments in partnerships  35,399,190   30,831,180 
Property and equipment, net  4,534,711   4,121,721 
Other assets  5,612,286   4,983,173 
Total assets $624,030,766  $565,661,862 
       
Liabilities and Shareholders’ Equity      
Liabilities:      
Unsecured notes payable (net of deferred financing costs of $7,223,456 and $8,352,597) $281,178,294  $280,049,153 
Secured note payable  6,224,000    
Repurchase facility  50,509,605   42,533,466 
Mortgage payable  1,649,167   750,000 
Line of credit  35,900,737   3,587,894 
Accrued dividends payable     5,342,160 
Accounts payable and accrued liabilities  2,124,028   1,439,219 
Advances from borrowers  12,586,438   9,892,164 
Deferred revenue  4,815,702   4,360,452 
Total liabilities  394,987,971   347,954,508 
       
Commitments and Contingencies      
       
Shareholders’ equity:      
Preferred shares - $.001 par value; 5,000,000 shares authorized; 2,903,000 shares designated as Series A Preferred Stock; 1,928,000 and 1,903,000 shares of Series A Preferred Stock issued and outstanding at June 30, 2023 and December 31, 2022, respectively  1,928   1,903 
Common stock - $.001 par value; 200,000,000 shares authorized; 43,822,050 and 41,093,536 issued and outstanding at June 30, 2023 and December 31, 2022, respectively  43,822   41,094 
Paid-in capital  236,595,201   226,220,990 
Accumulated other comprehensive loss  (376,078)  (561,490)
Accumulated deficit  (7,222,078)  (7,995,143)
Total shareholders’ equity  229,042,795   217,707,354 
Total liabilities and shareholders’ equity $624,030,766  $565,661,862 


SACHEM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
             
  Three Months Ended Six Months Ended
  June 30, June 30,
  2023
 2022
 2023
 2022
Revenue:            
Interest income from loans $11,898,484  $10,433,572  $22,881,810  $18,944,947 
Investment gain, net  333,873   230,602   608,669   347,940 
Income from partnership investments  1,006,477   317,004   1,556,200   589,493 
Origination and modification fees, net  1,764,262   2,246,775   3,240,183   4,090,616 
Fee and other income  1,570,976   798,609   2,278,581   1,407,172 
Unrealized gain (loss) on investment securities  (115,789)  (1,478,432)  600,600   (2,530,662)
Total revenue  16,458,283   12,548,130   31,166,043   22,849,506 
             
Operating costs and expenses:            
Interest and amortization of deferred financing costs  7,138,940   5,209,865   14,011,907   9,108,253 
Compensation, fees and taxes  1,562,465   1,187,940   3,341,783   2,181,903 
General and administrative expenses  1,317,348   645,871   2,215,463   1,277,819 
Other expenses  212,822   130,060   296,545   229,331 
(Gain) Loss on sale of real estate  21,239   (188,182)  (126,861)  (122,343)
Provision for Credit Losses  94,932   105,000   196,447   105,000 
Impairment loss  412,500   230,000   412,500   490,500 
Total operating costs and expenses  10,760,246   7,320,554   20,347,784   13,270,463 
Net income  5,698,037   5,227,576   10,818,259   9,579,043 
Preferred stock dividend  (924,762)  (921,766)  (1,849,525)  (1,843,531)
Net income attributable to common shareholders  4,773,275   4,305,810   8,968,734   7,735,512 
             
Other comprehensive loss            
Unrealized gain (loss) on investment securities  93,775   (192,764)  185,412   50,044 
Comprehensive income $4,867,050  $4,113,046  $9,154,146  $7,785,556 
Basic and diluted net income per common share outstanding:            
Basic $0.11  $0.12  $0.21  $0.22 
Diluted $0.11  $0.12  $0.21  $0.22 
Weighted average number of common shares outstanding:            
Basic  43,844,285   36,373,570   43,321,303   35,630,455 
Diluted  43,844,285   36,373,877   43,321,303   35,636,374 


SACHEM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
       
  Six Months Ended
  June 30,
  2023
 2022
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income $10,818,259  $9,579,043 
Adjustments to reconcile net income to net cash provided by operating activities:      
Amortization of deferred financing costs and bond discount  1,224,324   1,108,675 
Depreciation expense  109,497   44,478 
Stock based compensation  395,709   230,167 
Provision for credit losses  196,447   105,000 
Impairment loss  412,500   490,500 
(Gain) Loss on sale of real estate  (126,861)  (122,343)
Unrealized (gain) loss on investment securities  (600,600)  2,530,662 
Gain on sale of investment securities  24,285   148,565 
Changes in operating assets and liabilities:      
(Increase) decrease in:      
Interest and fees receivable  (1,455,807)  (1,620,733)
Other assets - miscellaneous  (863,887)  (393,624)
Due from borrowers  (1,521,226)  (1,102,371)
Other assets - prepaid expenses  163,617   101,149 
(Decrease) increase in:      
Accrued Interest  168,919   301,495 
Accounts payable and accrued liabilities  (9,596)  (323,887)
Deferred revenue  455,250   (15,493)
Advances from borrowers  2,694,274   (3,729,817)
Total adjustments  1,266,845   (2,247,577)
       
NET CASH PROVIDED BY OPERATING ACTIVITIES  12,085,104   7,331,466 
       
CASH FLOWS FROM INVESTING ACTIVITIES      
Purchase of investment securities  (18,346,504)  (36,088,438)
Proceeds from the sale of investment securities  6,560,095   59,710,599 
Purchase of interests in investment partnerships, net  (4,568,010)  (13,561,132)
Proceeds from sale of real estate owned  191,274   1,397,502 
Acquisitions of and improvements to real estate owned, net  (180,146)  (19,917)
Purchase of property and equipment  (722,487)  (815,339)
Principal disbursements for mortgages receivable  (114,468,454)  (191,971,926)
Principal collections on mortgages receivable  66,355,505   60,895,362 
Other assets  19,927   (114,244)
NET CASH USED FOR INVESTING ACTIVITIES  (65,158,800)  (120,567,533)
       
CASH FLOWS FROM FINANCING ACTIVITIES      
Net proceeds from (repayment of) line of credit  32,312,843   (9,771,376)
Net proceeds from repurchase facility  7,976,139   20,285,241 
Proceeds from mortgage  899,167    
Accounts payable and accrued liabilities - principal payments on other notes  (6,014)  (13,281)
Dividends paid on Common Stock  (11,048,257)  (8,253,864)
Dividends paid on Preferred Stock  (1,849,525)  (1,843,531)
Proceeds from issuance of common shares, net of expenses  9,690,580   21,230,975 
Common Stock buyback  (226,327)   
Proceeds from issuance of Series A Preferred Stock, net of expenses  516,977    
Gross proceeds from issuance of fixed rate notes     81,875,000 
Gross proceeds from issuance of secured note  6,224,000    
Financings costs incurred in connection with fixed rate notes     (3,081,500)
NET CASH PROVIDED BY FINANCING ACTIVITIES  44,489,583   100,427,664 
       
NET DECREASE IN CASH AND CASH EQUIVALENTS  (8,584,113)  (12,808,403)
       
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR  23,713,097   41,938,897 
       
CASH AND CASH EQUIVALENTS - END OF PERIOD $15,128,984  $29,130,494 

 


FAQ

What are the financial results of Sachem Capital Corp. for the second quarter of 2023?

Sachem Capital Corp. reported a total revenue growth of 31.2% to approximately $16.5 million. The net income attributable to common shareholders was approximately $4.8 million, or $0.11 per share.

What is the total asset value of Sachem Capital Corp. at the end of June 30, 2023?

The total assets of Sachem Capital Corp. grew 10.3% to approximately $624.0 million.

Did Sachem Capital Corp. pay a dividend to its shareholders?

Yes, Sachem Capital Corp. paid a quarterly dividend of $0.13 per share to shareholders of record.

When will Sachem Capital Corp. host a webcast and conference call to discuss its financial results?

Sachem Capital Corp. will host a webcast and conference call on Tuesday, August 15, 2023 at 8:00 a.m. Eastern Time.

Sachem Capital Corp. Common Shares

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REIT - Mortgage
Real Estate Investment Trusts
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BRANFORD