Sachem Capital Reports Record Annual Revenue of $30.4 Million and Net Income Attributable to Common Shareholders of $11.5 Million for 2021

Conference Call and Webcast to be held at 8:00 AM ET on Friday, April 1, 2022


BRANFORD, Conn., March 31, 2022 (GLOBE NEWSWIRE) -- Sachem Capital Corp. (NYSE American: SACH) announces its financial results for the year ended December 31, 2021. The company will host a conference call on Friday, April 1, 2022 at 8:00 a.m. Eastern Time to discuss in greater detail its financial condition and operating results for the year ended December 31, 2021, as well as its outlook for 2022.

John Villano, CPA, the company’s Chief Executive and Chief Financial Officer stated: “We continued to generate solid year-over-year revenue growth and achieved record net income attributable to common shareholders of $11.5 million, or $0.44 per share, for 2021. We believe these results illustrate the success and scalability of our business model. Heading into 2022, we have maintained our momentum with a robust loan pipeline. To support our continued growth, in December 2021 and March 2022 alone, we announced two registered public offerings of unsecured notes, for gross proceeds of $101.8 million, which provides us additional non-dilutive capital to accelerate our lending activities without compromising our goal, which is to provide our shareholders with attractive risk-adjusted returns.

“In addition to diversifying our holdings, including larger loans with established developers, we continue to expand our lending operations across the U.S. and now have a presence in 14 states, with a strong core focus along the Eastern seaboard. Importantly, we are witnessing demand for our loan products due to our ability to close quickly and our flexibility in structuring loans to suit the needs of borrowers. Despite the rise in interest rates, we continue to believe that there exists significant market opportunity for a well-capitalized “hard money” lender to originate attractively priced loans to small and mid-scale real estate developers with good collateral. As a result, we remain encouraged by the outlook for our business and look forward to building upon our strong historical financial performance.”

Results of operations

Total revenue for the year ended December 31, 2021 was approximately $30.4 million compared to approximately $18.6 million for the year ended December 31, 2020, an increase of approximately $11.8 million, or 63.5%. The increase in revenue was due primarily to an increase in lending operations. For 2021, interest income was approximately $22.3 million, origination fees were approximately $3.4 million and various other fees relating to our lending activities were approximately $3.2 million, for a total of approximately $28.9 million, an increase of $11.7 million over the same items in 2020.

Total operating costs and expenses for the year ended December 31, 2021 were approximately $17.1 million compared to approximately $9.6 million for 2020, an increase of approximately $7.5 million, or 78.0%. The largest contributor to this increase was interest and amortization of deferred financing costs, which were $10.4 million in 2021 compared to $5.5 million in 2020, an increase of approximately 87.9%. The increase is directly related to interest paid on our outstanding unsecured unsubordinated five-year notes. The balance of the increase in operating expenses was attributable to (i) compensation (including stock-based compensation), fees and taxes, which increased approximately $1.3 million; (ii) professional fees, which increased approximately $513,000; (iii) general and administrative expenses, which increased approximately $538,000; and (iv) other expenses, which increased approximately $142,000. These increases are attributable to our increased level of operations and the implementation of certain of our growth strategies.

Net income for 2021 attributable to common shareholders was approximately $11.5 million compared to approximately $9.0 million for 2020, an increase of approximately $2.5 million or 27.5%. Our net income per weighted average common share outstanding for 2021 was $0.44 compared to $0.41 for 2020.

Financial Condition

Total assets at December 31, 2021 were approximately $418.0 million compared to approximately $226.7 million at December 31, 2020, an increase of approximately $191.3 million, or 84.4%. The increase was due primarily to the growth in our mortgage loan portfolio, which increased approximately $136.7 million, and an approximately $45.9 million increase in cash and short-term marketable securities.

Total liabilities at December 31, 2021 were approximately $237.9 million compared to approximately $145.8 million at December 31, 2020, an increase of approximately $92.1 million, or approximately 63.2%. This increase is principally due to an overall increase in our total indebtedness, which at December 31, 2021 was approximately $213.5 million compared to approximately $138.7 million at December 31, 2020 (in each case, net of deferred financing costs), an increase of $80.6 million. Total indebtedness at December 31, 2021 included $160.5 million of notes payable (net of $5.7 million of deferred financing costs), $33.2 million balance on our margin loan account with Wells Fargo Advisors, $19.1 million outstanding on our master repurchase financing facility with an affiliate of Churchill Real Estate and $750,000 outstanding on our mortgage with New Haven Bank.

Total shareholders’ equity at December 31, 2021 was approximately $180.1 million compared to approximately $81.0 million at December 31, 2020, an increase of approximately $99.1 million. This increase was due primarily to our net income of approximately $13.3 million, net proceeds from the sale of common shares of $56.0 million, net proceeds from the sale of Series A Preferred Stock of approximately $45.5 million, offset by approximately $13.6 million of dividends paid and declared with respect to our common shares and approximately $1.9 million of dividends paid with respect to our Series A Preferred Stock.   In 2021, the company paid a total of approximately $12.3 million of dividends on the common shares, of which approximately $2.7 million was attributable to 2020. In addition, on January 10, 2022, the company paid a dividend of $0.12 per share, or $3.9 million in the aggregate, to common shareholders of record as of December 31, 2021, which was attributable to 2021.

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 Call

The company will host a conference call on Friday, April 1, 2022, at 8:00 a.m., Eastern Time, to discuss in greater detail its financial results for the year ended December 31, 2021, as well as its outlook for the balance of 2022.

Interested parties can access the conference call via telephone by dialing toll free 1-888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and entering the entry code: 295196. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2304/45135 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, April 15, 2022 and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and by entering replay passcode: 45135.

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 2021 filed with the U.S. Securities and Exchange Commission on March 31, 2022. 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 

     December 31, 2021    December 31, 2020
Assets        
Assets:        
Cash and cash equivalents $41,938,897  $19,408,028 
Investment securities  60,633,661   37,293,703 
Mortgages receivable  292,301,209   155,616,300 
Interest and fees receivable  3,693,645   1,820,067 
Other receivables  94,108   67,307 
Due from borrowers  3,671,016   2,025,663 
Prepaid expenses  271,291   71,313 
Property and equipment, net  2,172,185   1,433,388 
Real estate owned  6,559,010   8,861,609 
Investments in partnerships  6,055,838    
Other assets  306,440    
Deferred financing costs, net  264,451   72,806 
Total assets $417,961,751  $226,670,184 
       
Liabilities and Shareholders’ Equity        
Liabilities:        
Notes payable (net of deferred financing costs of $5,747,387 and $4,866,058) $160,529,363  $109,640,692 
Repurchase facility  19,087,189    
Mortgage payable  750,000   767,508 
Line of credit  33,178,031   28,055,648 
Accrued dividends payable  3,927,600   2,654,977 
Accounts payable and accrued expenses  501,753   372,662 
Other loans     257,845 
Security deposits held     13,416 
Advances from borrowers  15,066,114   1,830,539 
Deferred revenue  4,643,490   2,099,331 
Notes payable  30,921   54,682 
Accrued interest  164,729   3,344 
Total liabilities  237,879,190   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; 32,730,004 and 22,124,801 issued and outstanding  32,730   22,125 
Paid-in capital  185,516,394   83,814,376 
Accumulated other comprehensive loss  (476,016)  (25,992)
Accumulated deficit  (4,992,450)  (2,890,969)
Total shareholders’ equity  180,082,561   80,919,540 
Total liabilities and shareholders’ equity $417,961,751  $226,670,184 

  The accompanying notes are an integral part of these financial statements.

SACHEM CAPITAL CORP.
STATEMENTS OF COMPREHENSIVE INCOME 

  Year Ended
  December 31, 
     2021     2020
Revenue:        
Interest income from loans $22,305,530  $13,821,831
Investment income  1,069,374   399,493
Income from partnership investments  142,026   
Gain on sale of investment securities  284,769   903,257
Origination fees, net  3,389,615   1,893,143
Late and other fees  519,087   85,469
Processing fees  193,492   167,833
Rental income, net  30,663   85,339
Other income  2,489,996   1,246,530
Total revenue  30,424,552   18,602,895
       
Operating costs and expenses:        
Interest and amortization of deferred financing costs  10,422,101   5,547,406
Professional fees  1,142,038   628,797
Compensation, fees and taxes  3,122,934   1,799,889
Exchange fees  50,000   49,054
Other expenses and taxes  299,343   157,194
Depreciation  83,525   61,865
General and administrative expenses  1,101,000   562,607
Loss on sale of real estate  165,915   7,218
Impairment loss  719,000   795,000
Total operating costs and expenses  17,105,856   9,609,030
Net income  13,318,696   8,993,865
Preferred stock dividend  (1,853,855)  
Net income attributable to common shareholders  11,464,841   8,993,865
       
Other comprehensive (loss) income      
Unrealized (loss) gain on investment securities  (476,016)  24,886
Comprehensive income $10,988,825  $9,018,751
Basic and diluted net income per common share outstanding:      
Basic $0.44  $0.41
Diluted $0.44  $0.41
       
Weighted average number of common shares outstanding:        
Basic  26,316,286   22,118,522
Diluted  26,324,986   22,118,522

  The accompanying notes are an integral part of these financial statements.


SACHEM CAPITAL CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

                       
               Accumulated     
               Other      
  Preferred Stock Common Stock Paid in  Comprehensive Accumulated   
     Shares Amount Shares    Amount    Capital    Loss    Deficit    Totals
                             
Balance, January 1, 2020    22,117,301 $22,117 $83,856,308  $(50,878) $(1,266,729) $82,560,818 
                       
Offering costs - ATM        (58,353)        (58,353)
                       
Stock based compensation    7,500  8  16,421         16,429 
                       
Unrealized gain on marketable securities           24,886      24,886 
                       
Dividends paid on Common Stock              (7,963,128)  (7,963,128)
                       
Dividends declared and payable              (2,654,977)  (2,654,977)
                       
Net income for the year ended December 31, 2020              8,993,865   8,993,865 
                       
Balance, December 31, 2020    22,124,801  22,125  83,814,376   (25,992)  (2,890,969)  80,919,540 
                       
Issuance of Preferred Stock, net of expenses 1,903,000 $1,903     45,460,723         45,462,626 
                       
Issuance of Common Stock, net of expenses    10,490,188  10,490  56,049,982         56,060,472 
                       
Exercise of warrants    5,334  5  (5)         
                       
Stock based compensation    109,681  110  191,318         191,428 
                       
Unrealized loss on marketable securities           (450,024)     (450,024)
                       
Dividends paid on Common Stock              (9,638,722)  9,638,722 
                       
Dividends declared and payable              (3,927,600)  (3,927,600)
                       
Dividends paid on Preferred Stock              (1,853,855)  (1,853,855)
                       
Net income for the year ended December 31, 2021              13,318,696   13,318,696 
                       
Balance, December 31, 2021 1,903,000 $1,903 32,730,004 $32,730 $185,516,394  $(476,016) $(4,992,450) $180,082,561 

The accompanying notes are an integral part of these financial statements.


SACHEM CAPITAL CORP.
STATEMENTS OF CASH FLOW 

  Years Ended
  December 31, 
  2021     2020 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net income $13,318,696  $8,993,865 
Adjustments to reconcile net income to net cash provided by operating activities:       
Amortization of deferred financing costs and bond discount  1,215,200   601,959 
Write-off of deferred financing costs  72,806    
Depreciation expense  83,525   61,865 
Stock based compensation  191,318   16,429 
Impairment loss  719,000   795,000 
Loss on sale of real estate  439,525   7,218 
Gain on sale of marketable securities  (284,769)  (903,257)
Changes in operating assets and liabilities:       
(Increase) decrease in:      
Interest and fees receivable  (1,873,578)  (504,578)
Other receivables  (26,801)  74,090 
Due from borrowers  (1,645,353)  (1,537,768)
Prepaid expenses  (199,978)  (46,579)
Deposits on property and equipment     71,680 
(Decrease) increase in:      
Accrued interest  161,385   (72)
Accounts payable and accrued expenses  129,091   122,098 
Deferred revenue  2,544,159   893,591 
Advances from borrowers  13,235,575   982,271 
Total adjustments  14,761,105   633,947 
       
NET CASH PROVIDED BY OPERATING ACTIVITIES  28,079,801   9,627,812 
       
CASH FLOWS FROM INVESTING ACTIVITIES        
Purchase of investment securities  (204,064,590)  (97,555,422)
Proceeds from the sale of investment securities  180,533,333   77,139,664 
Purchase of interests in investment partnerships, net  (6,055,838)   
Proceeds from sale of real estate owned  2,387,721   1,816,522 
Acquisitions of and improvements to real estate owned  (1,243,646)  (1,811,980)
Purchase of property and equipment  (822,322)  (148,857)
Security deposits held  (13,416)  5,616 
Principal disbursements for mortgages receivable  (251,832,318)  (117,230,923)
Principal collections on mortgages receivable  115,147,409   54,961,570 
Costs in connection with investment activities  (306,440)   
NET CASH USED FOR INVESTING ACTIVITIES  (166,270,107)  (82,823,810)
       
CASH FLOWS FROM FINANCING ACTIVITIES        
Net proceeds from line of credit  5,122,383   28,055,648 
Net proceeds from repurchase facility  19,087,189    
Proceeds from mortgage  750,000    
Repayment of mortgage payable  (767,508)   
Principal payments on mortgage payable     (16,573)
Principal payments on notes payable  (23,761)  (20,751)
Dividends paid on Common Stock  (12,267,706)  (7,963,128)
Dividends paid on Preferred Stock  (1,853,855)   
Financings costs incurred  (461,357)  (114,559)
Proceeds from other loans     257,845 
Repayment of other loans  (257,845)   
Proceeds from issuance of common shares, net of expenses  56,060,472    
Proceeds from issuance of Series A Preferred Stock, net of expenses  45,462,626    
Gross proceeds from issuance of fixed rate notes  51,750,000   56,083,750 
Financings costs incurred in connection with fixed rate notes  (1,879,463)  (2,520,143)
NET CASH PROVIDED BY IN FINANCING ACTIVITIES  160,721,175   73,762,089 
       
NET INCREASE IN CASH AND CASH EQUIVALENTS  22,530,869   566,091 
       
CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR  19,408,028   18,841,937 
       
CASH AND CASH EQUIVALENTS - END OF YEAR $41,938,897  $19,408,028 

 The accompanying notes are an integral part of these financial statements.


SACHEM CAPITAL CORP.

STATEMENTS OF CASH FLOW (Continued)

  Years Ended
  December 31, 
     2021    2020
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION        
Interest paid $9,097,631 $4,945,448
SUPPLEMENTAL INFORMATION-NON-CASH        
Dividends declared and payable $3,927,600 $2,654,976