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Sachem Capital Reports 100% Revenue Growth and Net Income of $3.4 Million for the Third Quarter of 2021

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Conference Call and Webcast to be held at 8:00 AM EDT on Friday, November 5, 2021

BRANFORD, Conn., Nov. 04, 2021 (GLOBE NEWSWIRE) -- Sachem Capital Corp. (NYSE American: SACH) announces its financial results for the quarter and nine months ended September 30, 2021. The company will host a conference call on Friday, November 5, 2021 at 8:00 a.m. Eastern Daylight Time to discuss in greater detail its financial condition and operating results for the third quarter of 2021.

John Villano, CPA, the company’s Chief Executive and Chief Financial Officer stated: “We achieved 100% revenue growth over the same period last year, as well as net income of $3.4 million for the third quarter of 2021, which provides further validation our long-term strategy is working. We have maintained a robust loan pipeline, a healthy balance sheet and continue to generate solid cash flow. Importantly, with the proceeds of our recent Series A Preferred offering, combined with the addition of our Churchill credit facility, we are poised for further growth during the balance of the year and beyond. As previously discussed, we are diversifying our holdings, including larger loans with established developers. We are also opportunistically expanding and diversifying the geographic footprint of our mortgage loan portfolio beyond Connecticut. We have accomplished these goals while maintaining strict underwriting criteria and a conservative loan to value ratio. Looking ahead, we are witnessing strong market demand for our loan products and remain highly encouraged by the outlook for the business.”

Results of operations – three months ended September 30, 2021

Total revenue for the three months ended September 30, 2021 was approximately $8.5 million compared to approximately $4.3 million for the three months ended September 30, 2020, an increase of approximately $4.3 million, or 100%. Interest income and origination fees were approximately $6.1 million and $1.0 million, respectively. In comparison, for the three months ended September 30, 2020, interest income and origination fees were approximately $3.5 million and $393,000, respectively. In the third quarter of 2021 the company had approximately $256,000 of gains from the sale of investment securities compared to a loss of approximately $22,000 for the 2020 period. Investment income for the third quarter of 2021 increased to $276,000 compared to approximately $32,000 for the same period last year. Other income was approximately $580,000 for the third quarter of 2021, compared to approximately $337,000 for the same period last year.

Total operating costs and expenses for three months ended September 30, 2021 were approximately $4.2 million compared to approximately $2.1 million for the three months ended September 30, 2020. The increase in operating costs and expenses is primarily attributable to the increase in interests expense and amortization of deferred financing costs, which, in turn, is a direct result of an increase in overall indebtedness, particularly the unsubordinated unsecured notes.

Net income attributable to common shareholders for the three months ended September 30, 2021 was approximately $3.4 million, or $0.12 per share, compared to $2.1 million, or $0.10 per share for the three months ended September 30, 2020.

Results of operations – nine months ended September 30, 2021

Total revenue for the nine months ended September 30, 2021 was approximately $20.9 million compared to approximately $12.9 million for the nine months ended September 30, 2020, an increase of approximately 62.5%. For the nine months ended September 30, 2021, interest income was approximately $15.3 million and origination fees were approximately $2.3 million, respectively. In comparison, for the nine months ended September 30, 2020, interest income and origination fees were approximately $9.6 million and $1.6 million, respectively. Net gain on the sale of investment securities was approximately $212,000 for the 2021 period compared to net gains of approximately $415,000 for the 2020 period. Investment income was approximately $699,000 for the first nine months of 2021 compared to approximately $163,000 for the same period last year. Other income was approximately $1.6 million for the first nine months of 2021, compared to approximately $904,000 for the same period last year.

Total operating costs and expenses for the nine months ended September 30, 2021, were approximately $11.9 million compared to $6.3 million for the nine months ended September 30, 2020. The increase in operating costs and expenses is primarily attributable to the increase in the company’s unsecured, unsubordinated notes while growing our lending operations.

Net income attributable to common shareholders for the nine months ended September 30, 2021, was approximately $8.1 million, or $0.32 per share, compared to $6.6 million, or $0.30 per share for the nine months ended September 30, 2020.

Financial Condition

At September 30, 2021, total assets were approximately $313.4 million compared to $226.7 million at December 31, 2020. The increase was due primarily to the increase in cash and cash equivalents and investment securities of $18.6 million, an increase of the mortgage loan portfolio of approximately $64.3 million, an increase in investment in partnership of approximately $1.8 million, a net increase in property and equipment of approximately $756,000, and increases in due from borrowers of approximately $1.4 million and interest and fees receivable of approximately $885,000, offset by a decrease in real estate owned of approximately $2.1 million.

Total liabilities at September 30, 2021 were approximately $154.6 million compared to $145.8 million at December 31, 2020. This increase is principally due to an increase in the line of credit of approximately $2.0 million, advances from borrowers of $8.2 million and deferred revenue of approximately $1.8 million offset by decrease in dividends payable of $2.7 million, mortgage payable of $768,000, other loans of approximately $258,000, and accounts payable and accrued expenses of approximately $180,000.

Shareholders’ equity at September 30, 2021 was approximately $158.8 million compared to approximately $80.9 million at December 31, 2020. This increase was due primarily to net proceeds of $45.5 million from the sale of shares of our Series A Preferred Stock, net proceeds of $30.9 million from the sale of common shares and net income of approximately $8.1 million.

On October 13, 2021, the Company authorized and declared a quarterly dividend of $0.12 per share to be paid to shareholders of record as of the close of trading on the NYSE American on October 25, 2021. The dividend was paid on October 29, 2021.

Investor Conference Call

The company will host a conference call on Friday, November 5, 2021 at 8:00 a.m., Eastern Daylight Time, to discuss in greater detail its financial results for the third quarter ending September 30, 2021, as well as its outlook for the balance of 2021.

Interested parties can access the conference call via telephone by dialing toll free 1-877-545-0523 for U.S. callers or 973-528-0016 for international callers and entering the entry code: 664173. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2304/43586 or on Sachem’s website at https://ir.sachemcapitalcorp.com/ir-calendar.

The webcast will also be archived on the company’s website and a telephone replay of the call will be available approximately one hour following the call through Friday, November 19, 2021 and can be accessed by dialing 877-481-4010 for U.S. callers or 919-882-2331 for international callers and by entering replay passcode: 43586.

About Sachem Capital Corp.

Sachem Capital Corp. specializes in originating, underwriting, funding, servicing, and managing a portfolio of first mortgage loans. It offers short-term (i.e., three years or less) secured, non­banking loans (sometimes referred to as “hard money” loans) to real estate investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut. The company does not lend to owner occupants. The company’s primary underwriting criteria is a conservative loan to value ratio. The properties securing the company’s 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. Each loan is also personally guaranteed by the principal(s) of the borrower, which guaranty may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The company also makes opportunistic real estate purchases apart from its lending activities. The company believes that it qualifies as a real estate investment trust (REIT) for federal income tax purposes and has elected to be taxed as a REIT beginning with its 2017 tax year.

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.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our 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 our Annual Report on Form 10-K for 2020 filed with the U.S. Securities and Exchange Commission. 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 we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We disclaim any duty to update any of these forward-looking statements.

All forward-looking statements attributable to us 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 us in the context of these risks and uncertainties.

Investor & Media Contact:
Crescendo Communications, LLC
Email: sach@crescendo-ir.com
Tel: (212) 671-1021

(tables follow)


SACHEM CAPITAL CORP.
BALANCE SHEETS

September 30, 2021

December 31, 2020

(Unaudited)

(Audited)

Assets

Assets:

Cash and cash equivalents

$

19,242,316

$

19,408,028

Investment securities

56,080,725

37,293,703

Investment in partnership

1,804,217

Mortgages receivable

219,963,291

155,616,300

Interest and fees receivable

2,705,447

1,820,067

Other receivables

428,391

67,307

Due from borrowers

3,431,015

2,025,663

Prepaid expenses

85,813

71,313

Property and equipment, net

2,189,887

1,433,388

Real estate owned

6,774,522

8,861,609

Other deposits

291,191

Deferred financing costs, net

354,936

72,806

Total assets

$

313,351,751

$

226,670,184

Liabilities and Shareholders’ Equity

Liabilities:

Notes payable (net of deferred financing costs of $4,132,355 and $4,866,058)

$

110,394,395

$

109,640,692

Mortgage payable

767,508

Line of credit

30,056,159

28,055,648

Accrued dividends payable

2,654,977

Accounts payable and accrued expenses

192,670

372,662

Other loans

257,845

Security deposits held

2,000

13,416

Advances from borrowers

10,031,656

1,830,539

Deferred revenue

3,879,291

2,099,331

Notes payable

37,498

54,682

Accrued interest

3,344

Total liabilities

154,593,669

145,750,644

Commitments and Contingencies

Shareholders’ equity:

Preferred shares - $.001 par value; 5,000,000 shares authorized; 1,903,000 shares of Series A Preferred Stock issued and outstanding

1,903

Common stock - $.001 par value; 100,000,000 shares authorized; 28,315,930 and 22,124,801 issued and outstanding

28,316

22,125

Paid-in capital

160,279,468

83,814,376

Accumulated other comprehensive loss

(637,990

)

(25,992

)

Accumulated deficit

(913,615

)

(2,890,969

)

Total shareholders’ equity

158,758,082

80,919,540

Total liabilities and shareholders’ equity

$

313,351,751

$

226,670,184


SACHEM CAPITAL CORP.
STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Revenue:

Interest income from loans

$

6,094,165

$

3,473,304

$

15,307,692

$

9,640,387

Investment income

275,745

32,483

698,556

163,161

Income from partnership investment

35,983

90,225

Gain (loss) on sale of investment securities

256,418

(21,858

)

212,449

415,301

Origination fees

999,287

393,097

2,348,608

1,551,652

Late and other fees

202,572

10,955

300,471

46,835

Processing fees

50,230

37,445

129,615

123,568

Rental income (loss), net

28,320

9,593

23,105

49,777

Debt Forgiveness

257,845

Other income

579,656

336,789

1,579,885

904,071

Total revenue

8,522,376

4,271,808

20,948,451

12,894,752

Operating costs and expenses:

Interest and amortization of deferred financing costs

2,589,847

1,262,278

7,541,536

3,564,533

Professional fees

183,503

158,206

666,431

400,868

Compensation, fees and taxes

771,373

500,165

2,175,603

1,232,733

Exchange fees

12,603

22,713

37,397

29,986

Other expenses and taxes

104,583

26,247

149,898

61,484

Depreciation

20,421

15,348

61,286

46,318

General and administrative expenses

294,981

145,251

702,897

412,677

Loss on sale of real estate

94,450

2,816

111,545

7,276

Impairment loss

150,000

469,000

495,000

Total operating costs and expenses

4,221,761

2,133,024

11,915,593

6,250,875

Net income

4,300,615

2,138,784

9,032,858

6,643,877

Preferred stock dividend

(913,791

)

(932,089

)

Net income attributable to common shareholders

3,386,824

2,138,784

8,100,769

6,643,877

Other comprehensive (loss) gain

Unrealized (loss) gain on investment securities

(500,188

)

(72,785

)

(611,998

)

13,282

Comprehensive income

$

2,886,636

$

2,065,999

$

7,488,771

$

6,657,159

Basic and diluted net income per common share outstanding:

Basic

$

0.12

$

0.10

$

0.32

$

0.30

Diluted

$

0.12

$

0.10

$

0.32

$

0.30

Weighted average number of common shares outstanding:

Basic

27,973,249

22,117,301

24,968,885

22,117,301

Diluted

27,977,095

22,117,301

24,972,837

22,117,301


SACHEM CAPITAL CORP.
STATEMENTS OF CASH FLOW
(unaudited)

Nine Months Ended

September 30,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

9,032,858

$

6,643,877

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of deferred financing costs and bond discount

839,418

357,497

Write-off of deferred financing costs

72,806

Depreciation expense

61,286

46,318

Stock based compensation

126,538

12,321

Impairment loss

469,000

495,000

Loss on sale of real estate

111,545

7,276

Gain on sale of marketable securities

(212,449

)

(415,301

)

Debt Forgiveness

(257,845

)

Changes in operating assets and liabilities:

(Increase) decrease in:

Interest and fees receivable

(885,380

)

(180,335

)

Other receivables

(361,084

)

54,090

Due from borrowers

(1,405,352

)

(273,202

)

Prepaid expenses

(14,500

)

(82,082

)

Deposits on property and equipment

(100,530

)

(Decrease) increase in:

Accrued interest

(3,344

)

77,256

Accounts payable and accrued expenses

(179,992

)

272,574

Deferred revenue

1,779,960

(91,019

)

Advances from borrowers

8,201,117

565,706

Total adjustments

8,341,724

745,569

NET CASH PROVIDED BY OPERATING ACTIVITIES

17,374,582

7,389,446

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investment securities

(160,896,229

)

(37,216,177

)

Proceeds from the sale of investment securities

141,709,658

25,905,769

Purchase of interest in investment partnership, net

(1,804,217

)

Proceeds from sale of real estate owned

1,839,977

1,816,522

Acquisitions of and improvements to real estate owned

(333,435

)

(1,584,300

)

Purchase of property and equipment

(817,785

)

(118,364

)

Security deposits held

(11,416

)

5,616

Principal disbursements for mortgages receivable

(154,810,007

)

(68,029,798

)

Principal collections on mortgages receivable

90,463,016

37,859,270

Costs in connection with investment activities

(281,191

)

NET CASH USED FOR INVESTING ACTIVITIES

(84,941,629

)

(41,361,462

)

CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from line of credit

2,000,511

12,080,569

Repayment of mortgage payable

(767,508

)

(12,296

)

Principal payments on notes payable

(17,184

)

(15,303

)

Dividends paid on Common Stock

(8,778,392

)

(5,308,152

)

Dividends paid on Preferred Stock

(932,089

)

Financings costs incurred

(450,651

)

(108,353

)

Proceeds from other loans

257,845

Proceeds from issuance of common shares, net of expenses

30,884,022

Proceeds from issuance of Series A Preferred Stock, net of expenses

45,462,626

Gross proceeds from issuance of fixed rate notes

14,363,750

Financings costs incurred in connection with fixed rate notes

(743,908

)

NET CASH PROVIDED BY FINANCING ACTIVITIES

67,401,335

20,514,152

NET DECREASE IN CASH AND CASH EQUIVALENTS

(165,712

)

(13,457,864

)

CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR

19,408,028

18,841,937

CASH AND CASH EQUIVALENTS - END OF PERIOD

$

19,242,316

$

5,384,073

SACHEM CAPITAL CORP.
STATEMENTS OF CASH FLOW (Continued)
(unaudited)

Nine Months Ended

September 30,

2021

2020

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

Interest paid

$

6,745,109

$

2,093,080

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES

Real estate acquired in connection with the foreclosure of certain mortgages, inclusive of interest and other fees receivable, during the period ended September 30, 2020 amounted to $170,383.