Sachem Capital Reports First Quarter 2025 Results
MWN-AI** Summary
Sachem Capital Corp. (NYSE American: SACH) reported its financial results for the first quarter of 2025, highlighting a period marked by stability despite previous challenges. Total revenue decreased to $11.4 million from $16.8 million in the first quarter of 2024, attributed primarily to reduced loan originations and an increase in nonperforming loans. However, income from preferred membership investments rose significantly by 71.7%.
Operating expenses for the quarter were $10.4 million, a reduction from last year’s $12.5 million due to lower interest and amortization costs, along with decreases in compensation and credit loss provisions. The net loss attributable to common shareholders was reported at $213,000, translating to $0.00 per share, in stark contrast to a net income of $3.6 million, or $0.08 per share, in the prior year.
Despite these fluctuations in earnings, the company maintained a robust balance sheet, with total assets of approximately $491.4 million compared to $492 million at year-end 2024. Total liabilities rose marginally to $312.1 million, alongside total indebtedness standing at $305.6 million. Shareholder equity decreased to $179.3 million, impacted by $3.5 million in declared dividends.
Sachem Capital continues to operate as a Real Estate Investment Trust (REIT), adhering to the requirement to distribute at least 90% of taxable income to shareholders. Dividend payments included $0.484375 for Series A Preferred Stock and $0.05 for common shares, reinforcing its commitment to shareholder returns.
CEO John Villano expressed cautious optimism about restoring cash flow and dividends as the company seeks to capitalize on quality investment opportunities while prioritizing prudent capital allocation. A conference call was scheduled to further discuss the results and future outlook.
MWN-AI** Analysis
Sachem Capital Corp. (NYSE American: SACH) recently reported its first-quarter results for 2025, revealing a net loss attributable to common shareholders of $213,000, a stark contrast to the $3.6 million profit in the same quarter of 2024. While the shift prompts concerns, there are several factors to consider before making hasty investment decisions.
Revenue for the quarter was $11.4 million, down from $16.8 million last year. This decline is primarily linked to fewer loan originations over the past 15 months and higher levels of non-performing loans. However, the 71.7% increase in income from preferred membership LLC investments offers a silver lining, indicating diversification in revenue streams that could bolster the company's resilience.
Sachem Capital's operating expenses saw a decrease to $10.4 million, down from $12.5 million in Q1 2024, suggesting effective cost management. This focus on reducing expenses amidst declining revenues is a promising indicator of management's strategic prudence during turbulent market conditions.
The balance sheet remains stable, with total assets effectively unchanged at $491.4 million. The small decline in shareholders' equity to $179.3 million indicates a cautious approach to capital allocation, which could serve the company well in the current uncertain environment.
Investors should also note the continued payment of dividends, with the company’s commitment to maintaining REIT status requiring it to distribute a minimum of 90% of taxable income. The recent dividend payments, though lower than prior distributions, signal an ongoing return of value to shareholders.
Given the current market volatility and the company’s relatively stable financial posture, investors might consider a "hold" position until signs of a robust recovery in loan originations and improvements in credit quality are evident. This strategy could optimize capital preservation while waiting for potentially more favorable market conditions.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
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 specific factors contributed to the decrease in total revenue for Sachem Capital Corp. SACH in the first quarter of 2025 compared to the same period in 2024, particularly regarding loan originations?
How does Sachem Capital Corp. SACH plan to address the elevated amount of nonperforming loans and real estate owned while maintaining stability in its balance sheet?
With a net loss attributable to common shareholders reported for the first quarter of 2025, what strategies does Sachem Capital Corp. SACH have in place to return to profitability and drive dividend growth?
Can you elaborate on the investment opportunities that Sachem Capital Corp. SACH identifies as attractive yields, considering the current uncertainty in the real estate and capital markets?
**MWN-AI FAQ is based on asking OpenAI questions about Sachem Capital Corp. (NYSE: SACH).
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