Exhibit 99.1

 

Sachem Capital Reports Record 2022 Annual Revenue of $52.3 Million and Net Income Attributable to Common Shareholders of $17.2 Million or $0.46 per Share

 

Conference Call and Webcast to be held at 8:00 AM ET on Friday, March 31, 2023

 

BRANFORD, Conn., March 30, 2023 (GLOBE NEWSWIRE) -- Sachem Capital Corp. (NYSE American: SACH) announced its financial results for the year ended December 31, 2022. The company will host a conference call on Friday, March 31, 2023 at 8:00 a.m. Eastern Time to discuss in greater detail its financial and operating results for 2022.

 

John Villano, CPA, the company’s Chief Executive Officer, stated: “2022 was another record year for our company with revenue of $52.3 million and net income attributable to common shareholders of $17.2 million. Earnings per share was $0.46 per share compared to $0.44 for the prior year. Further we achieved approximately $20.2 million of non-GAAP adjusted earnings or $0.53 per share in earnings, reflecting the strength of our business and specifically our loan portfolio in a very challenging interest rate environment. We fully understand the effects of rapid interest rate increases on our business and, more importantly, our borrowers and will continue to take appropriate measures to further reduce risk and insulate our loan portfolio, including additional enhancements to our underwriting process and limiting the term of new loans.

 

“In 2022, we acquired Urbane New Haven, LLC, which added construction finance service expertise in all phases of our business. This acquisition provides us the ability to reduce risks associated with distressed properties, as well as new income streams to help ensure the highest level of oversight and planning diligence on all construction financing. We are extremely pleased with the addition of the Urbane team and their operational excellence.

 

“Certainly, the process of lending has undergone significant changes the past year and despite the ongoing crosscurrents, our business model has proven to be highly scalable and resilient, as evidenced by our continued strong performance during the year.”

 

Results of operations for year ended December 31, 2022

 

Total revenue grew 71.8% to approximately $52.3 million compared to approximately $30.4 million for the year ended December 31, 2021. The growth in revenue was due primarily to an increase in lending operations. For 2022, interest income was approximately $42.6 million, origination fees were approximately $7.3 million and various other fees relating to the company’s lending activities were approximately $3.0 million.

 

Total operating costs and expenses for the year ended December 31, 2022 were approximately $31.4 million compared to approximately $17.1 million for 2021, an increase of approximately $14.3 million. Given the company’s implementation of its growth strategies, the largest contributor to this increase was interest and amortization of deferred financing costs, which were $21.5 million in 2022 compared to $10.4 million in 2021. The balance of the increases was attributable to (i) approximately $2.2 million of compensation (including stock-based compensation), fees and taxes and (ii) approximately $854,000 general and administrative expenses. These increases are attributable to the implementation of certain growth strategies.

 

 

 

 

Net income for 2022 attributable to common shareholders was approximately $17.2 million compared to approximately $11.5 million for 2021, an increase of approximately $5.8 million or 50.2%. Net income per weighted average common share outstanding for 2022 was $0.46 compared to $0.44 for 2021.

 

Balance Sheet

 

Total assets at December 31, 2022 were approximately $565.7 million compared to approximately $418.0 million at December 31, 2021, an increase of approximately $147.7 million, or 35.3%. The increase was due primarily to the growth in the company’s mortgage loan portfolio, which increased approximately $168.3 million, and an approximately $24.8 million increase in partnership investments. Total liabilities were approximately $348.0 million compared to approximately $237.9 million.

 

Total indebtedness at December 31, 2022 included $280.0 million of notes payable (net of $8.4 million of deferred financing costs), $3.6 million balance on our margin loan account with Wells Fargo Advisors, $42.5 million outstanding on the company’s master repurchase financing facility with an affiliate of Churchill Real Estate and $750,000 outstanding on a mortgage with New Haven Bank.

 

Total shareholders’ equity at December 31, 2022 increased approximately $37.6 million to $217.7 million compared to approximately $180.1 million at December 31, 2021. The change was primarily due to net income of approximately $20.9 million, net proceeds from the sale of common shares of $39.3 million, and approximately $1.0 million related to the acquisition of Urbane New Haven’s assets.

 

Dividends

 

The company declared and paid dividends of approximately $14.9 million on common shares approximately $3.7 million on Series A preferred shares, and reported approximately $5.3 million of accrued 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.

 

Investor Conference Call

 

The company will host a conference call on Friday, March 31, 2023, at 8:00 a.m., Eastern Time, to discuss in greater detail its financial results for the year ended December 31, 2022.

 

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. A webcast of the call may be accessed 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 through Friday, April 14, 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: 13737135.

 

 

 

 

About Sachem Capital Corp

 

Sachem Capital Corp. is a financing REIT that 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 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 to be filed with the U.S. Securities and Exchange Commission on March 31, 2023. 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
     
   December 31, 2022   December 31, 2021 
Assets:          
Cash and cash equivalents  $23,713,097   $41,938,897 
Investment securities   24,576,462    60,633,661 
Mortgages receivable   460,633,268    292,301,209 
Interest and fees receivable   6,309,845    3,693,645 
Due from borrowers   5,276,967    3,671,016 
Real estate owned   5,216,149    6,559,010 
Investments in partnerships   30,831,180    6,055,838 
Property and equipment, net   4,121,721    2,172,185 
Other assets   4,983,173    936,290 
Total assets  $565,661,862   $417,961,751 
           
Liabilities and Shareholders' Equity:          
Liabilities:          
Notes payable (net of deferred financing costs of $8,352,597 and $5,747,387)  $280,049,153   $160,529,363 
Repurchase facility   42,533,466    19,087,189 
Mortgage payable   750,000    750,000 
Line of credit   3,587,894    33,178,031 
Accrued dividends payable   5,342,160    3,927,600 
Accounts payable and accrued liabilities   1,439,219    697,403 
Advances from borrowers   9,892,164    15,066,114 
Deferred revenue   4,360,452    4,643,490 
Total liabilities   347,954,508    237,879,190 
           
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    1,903 
Common stock - $.001 par value; 200,000,000 shares authorized; 41,093,536 and 32,730,004
   issued and outstanding
   41,094    32,730 
Paid-in capital   226,220,990    185,516,394 
Accumulated other comprehensive loss   (561,490)   (476,016)
Accumulated deficit   (7,995,143)   (4,992,450)
Total shareholders' equity   217,707,354    180,082,561 
Total liabilities and shareholders' equity  $565,661,862   $417,961,751 

 

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

                 

 

 

 

SACHEM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
         
   Years Ended 
   December 31, 
     
   2022   2021 
Revenue:          
Interest income from loans  $42,618,817   $22,305,530 
Investment gain (loss), net   521,662    1,069,374 
Income from partnership investments   1,809,564    142,026 
Origination and modification fees, net   7,320,625    4,322,883 
Fee and other income   2,969,117    2,299,970 
Unrealized losses on investment securities   (2,963,760)   284,769 
Total revenue   52,276,025    30,424,552 
           
Operating costs and expenses:          
Interest and amortization of deferred financing costs   21,549,859    10,422,101 
Compensation, fees and taxes   5,315,455    3,122,934 
Other expenses   544,684    432,868 
General and administrative expenses   3,097,219    2,243,038 
Loss (Gain) on sale of real estate   (44,752)   165,915 
Impairment loss   904,909    719,000 
Total operating costs and expenses   31,367,374    17,105,856 
Net income   20,908,651    13,318,696 
Preferred stock dividend   (3,687,062)   (1,853,855)
Net income attributable to common shareholders   17,221,589    11,464,841 
           
Other comprehensive loss          
Unrealized gain (loss) on investment securities   (85,474)   (476,016)
Comprehensive income  $17,136,115   $10,988,825 
Basic and diluted net income per common share outstanding:          
Basic  $0.46   $0.44 
Diluted  $0.46   $0.44 
Weighted average number of common shares outstanding:          
Basic   37,741,657    26,316,286 
Diluted   37,749,169    26,324,986 

 

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

                 

 
 

 

 

SACHEM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
                 
                       Accumulated         
                   Additional   Other         
   Preferred Stock   Common Stock   Paid in   Comprehensive   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Loss   Deficit   Totals 
Balance, January 1, 2021   -    -    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 investments                            (450,024)        (450,024)
                                         
Dividends paid on Common shares                                 (9,638,722)   (9,638,722)
                                         
Dividends paid on Series A Preferred Stock                                 (1,853,855)   (1,853,855)
                                         
Dividends declared and payable                                 (3,927,600)   (3,927,600)
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 
                                         
Issuance of Preferred Stock, net of expenses   -    -              (70,000)             (70,000)
                                         
Issuance of Common Stock, net of expenses             7,879,907    7,880    39,284,065              39,291,945 
                                         
Acquisition of Urbane New Haven assets             300,000    300    995,700              996,000 
                                         
Exercise of warrants             19,658    20    (20)             - 
Stock based compensation             163,967    164    494,851              495,015 
                                         
Unrealized loss on investments                            (85,474)        (85,474)
                                         
Dividends paid on Common shares                                 (14,882,122)   (14,882,122)
                                         
Dividends paid on Series A Preferred Stock                                 (3,687,062)   (3,687,062)
                                         
Accrued Dividends                                 (5,342,160)   (5,342,160)
                                         
Net income for the year ended December 31, 2022                                 20,908,651    20,908,651 
Balance, December 31, 2022   1,903,000   $1,903    41,093,536   $41,094   $226,220,990   $(561,490)  $(7,995,143)  $217,707,354 

                                                                 

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

                                                                 

 

 

 

SACHEM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW
         
   Years Ended 
   December 30, 
     
   2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net income  $20,908,651   $13,318,696 
           
Adjustments to reconcile net income to net cash provided by operating activities:          
Amortization of deferred financing costs and bond discount   2,104,093    1,215,200 
Write-off of deferred financing costs   -    72,806 
Depreciation expense   106,414    83,525 
Stock based compensation   495,015    191,318 
Impairment loss   904,909    719,000 
(Gain) Loss on sale of real estate   (44,752)   165,915 
Unrealized loss on investment securities   2,963,760    (284,769)
Gain on sale of investment securities   (521,662)   - 
Changes in operating assets and liabilities:          
(Increase) decrease in:          
Interest and fees receivable   (2,616,200)   (1,873,578)
Other assets   (3,599,779)   (26,801)
Due from borrowers   (1,605,951)   (1,645,353)
Accrued Dividends Payable   (1,414,560)   - 
Other Assets - Prepaid Expenses   -    (199,978)
(Decrease) increase in:          
Accrued Interest   158,687    161,385 
Accounts payable and accrued liabilities   766,723    129,091 
Deferred revenue   (283,038)   2,544,159 
Advances from borrowers   (5,173,950)   13,235,575 
Total adjustments   (7,760,291)   14,487,495 
           
NET CASH PROVIDED BY OPERATING ACTIVITIES   13,148,360    27,806,191 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of investment securities   (51,651,930)   (204,064,590)
Proceeds from the sale of investment securities   85,113,227    180,533,333 
Purchase of interests in investment partnerships, net   (24,775,342)   (6,055,838)
Proceeds from sale of real estate owned   2,090,879    2,399,557 
Acquisitions of and improvements to real estate owned, net   (126,442)   (981,873)
Purchase of property and equipment   (1,581,350)   (822,322)
Security deposits held   -    (13,415)
Principal disbursements for mortgages receivable   (300,277,303)   (251,832,318)
Principal collections on mortgages receivable   131,840,244    115,147,409 
Other Assets - Pre-offering Costs   (170,606)   (306,440)
NET CASH USED FOR INVESTING ACTIVITIES   (159,538,623)   (165,996,497)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Net proceeds from (repayment of) line of credit   (29,590,137)   5,122,383 
Net proceeds from repurchase facility   23,446,277    19,087,189 
Proceeds from mortgage   -    750,000 
Repayment of mortgage payable   -    (767,508)
Accounts payable and accrued liabilities - principal payments on other notes   (24,907)   (23,761)
Dividends paid on Common Stock   (18,809,722)   (12,267,706)
Dividends paid on Preferred Stock   (3,687,062)   (1,853,855)
Financings costs incurred   -    (461,357)
Repayment of other loans   -    (257,845)
Proceeds from issuance of common shares, net of expenses   39,291,945    56,060,472 
Proceeds from issuance of Series A Preferred Stock, net of expenses   (70,000)   45,462,626 
Gross proceeds from issuance of fixed rate notes   122,125,000    51,750,000 
Financings costs incurred in connection with fixed rate notes   (4,516,931)   (1,879,463)
NET CASH PROVIDED BY FINANCING ACTIVITIES   128,164,463    160,721,175 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (18,225,800)   22,530,869 
           
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR   41,938,897    19,408,028 
           
CASH AND CASH EQUIVALENTS - END OF PERIOD  $23,713,097   $41,938,897 

 

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

  

 

 

SACHEM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW (Continued)
         
   Years Ended 
   December 30, 
     
   2022   2021 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS          
INFORMATION          
Interest paid  $19,286,819   $9,097,631 
           
SUPPLEMENTAL INFORMATION-NON-CASH          
Dividends declared and payable  $5,342,160   $3,927,600