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

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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


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Source: Sachem Capital Corp.