Sachem Capital Reports 67.4% Increase in Revenue and 59.9% Increase in Net Income for 2018

Earnings per share increases 31.6%

Conference Call and Webcast to be Held at 8:00 AM (Eastern DST) on Tuesday, April 2, 2019

BRANFORD, Conn.--(BUSINESS WIRE)-- Sachem Capital Corp. (NYSE American: SACH) today announced its financial results for the year ended December 31, 2018. In addition, the Company announced that it will host a conference call on Tuesday, April 2, 2019 at 8:00 a.m., Eastern Time.

Operational highlights:

  • Revenue for the year ended December 31, 2018 increased approximately 67.4% to approximately $11.7 million
  • Net income for the year ended December 31, 2018 increased approximately 59.9% to approximately $7.8 million
  • Net income per share (basic and diluted) increased approximately 31.6% to $0.50 from $0.38 in 2017

Balance Sheet highlights:

  • Mortgages receivable at December 31, 2018, approximately $78.9 million, increased approximately 24.7% from December 31, 2017
  • Total assets at December 31, 2018, approximately $86.0 million, increased approximately 27.4% from December 31, 2017

To date, distributions of 2018 income have totaled approximately $7.3 million or approximately 94.6% of 2018 net income.

John Villano, CPA, co-chief executive officer and chief financial officer of Sachem Capital Corp., stated, “Overall, we are extremely pleased with our operating results for 2018, with significant increases in revenues, net income and earnings per share. The first half of the year was extremely robust with loan activity and net income at record levels, fueled, in part, by strong demand for our products and services, a strong economic environment and fresh infusions of capital from our follow-on public offering in the fourth quarter of 2017, as well as a new and larger credit facility we secured in the second quarter of 2018. During the second half of 2018, we witnessed some softening in the local real estate market, however, demand for our products and services remains strong. At the same time, our ability to originate new loans was limited by available capital. As a result, we have begun to explore several options to provide us greater financial flexibility. In the meantime, we are confident that we can continue to grow our business, based, in part, on our current backlog and continuous flow of funding requests. As always, we remain committed to adhering to our conservative lending practices, strict underwriting policies, and providing our investors attractive risk-adjusted returns.”

Results of operations – year ended December 31, 2018

Total revenue for the year ended December 31, 2018 was approximately $11.7 million compared to approximately $7.0 million for the year ended December 31, 2017, an increase of approximately $4.7 million, or 67.4%. The company recorded increases in all revenue categories, including interest income, net origination fees, other income (which includes modification fees, lender fees, income on borrower charges) and gains on the sale of real estate.

Total operating costs and expenses for the year ended December 31, 2018 were approximately $3.9 million compared to approximately $2.1 million for 2017, an increase of $1.8 million, or 84.5%. The increase in operating costs and expenses is due to an increase in lending operations and our financing activities during the year. The company recorded increases in all major cost and expense categories, including interest expense and amortization of deferred financing costs, compensation and related costs, professional fees and general and administrative expenses.

Net income for 2018 was approximately $7.8 million compared to $4.9 million for 2017 due to the increase in our lending activities, partially offset by the increase in operating costs and expenses. Basic and diluted net income per weighted average common share outstanding for the year ended 2018 was $0.50 compared to $0.38 per share for the year ended 2017.

Investor Conference Call

The Company will host a conference call on Tuesday, April 2, 2019 at 8:00 a.m., Eastern Time, to discuss the Company’s financial results for the fourth quarter ending December 31, 2018 as well as the Company’s corporate progress and other meaningful developments.

Interested parties can access the conference call by calling 877-407-8033 for U.S. callers, or +201-689-8033 for international callers. The call will be available on the Company’s website via webcast at John Villano, Co-Chief Executive Officer and Chief Financial Officer will lead the conference call and other Sachem Capital executives will also be available to answer questions.

A 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 8:00 a.m. on April 16, 2019, and can be accessed by calling: 877-481-4010 for U.S. callers or +919-882-2331 for international callers and entering conference ID: 45729.

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 2018 filed with the U.S. Securities and Exchange Commission on March 29, 2019. 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.

December 31,
2018 2017
Cash $ 99,310 $ 954,223
Cash - restricted 59,549 0
Escrow deposits 12,817 111,189
Mortgages receivable 78,011,653 62,166,937
Mortgages receivable, affiliate 879,457 1,104,022
Interest and fees receivable 1,397,038 645,493
Other receivables 155,000 234,570
Due from borrowers 695,218 451,795
Prepaid expenses 14,866 4,520
Property and equipment, net 1,180,107 501,819
Deposits on property and equipment 12,000 -
Real estate owned 2,943,438 1,224,409
Deferred financing costs   553,597     95,560
Total assets $ 86,014,050   $ 67,494,537
Liabilities and Shareholders' Equity
Line of credit $ 27,219,123 $ 9,841,613
Mortgage payable 290,984 301,101
Accounts payable and accrued expenses 316,413 390,758
Security deposits held 7,800 2,550
Advances from borrowers 317,324 519,764
Due to shareholder 1,200,000 -
Due to note purchaser - 723,478
Deferred revenue 1,058,406 1,108,400
Dividend payable 2,624,566 -
Accrued interest   176,619     40,592
Total liabilities   33,211,235     12,928,256
Commitments and Contingencies
Shareholders' equity:

Preferred shares - $.001 par value; 5,000,000 shares authorized; no shares issued



Common stock - $.01 par value; 50,000,000 shares authorized; 15,438,621
and 15,415,737 issued and outstanding

15,439 15,416
Paid-in capital 53,192,859 53,315,772
(Accumulated deficit) retained earnings   (405,483 )   1,235,093
Total shareholders' equity   52,802,815     54,566,281
Total liabilities and shareholders' equity $ 86,014,050   $ 67,494,537
Years Ended
December 31,
  2018   2017
Interest income from loans $ 8,960,883 $ 5,434,502
Origination fees, net 1,411,100 802,264
Late and other fees 189,078 136,834
Processing fees 138,317 124,240
Rental income, net 101,789 88,364
Other income 837,339 410,494
Net gain on sale of real estate   74,864   179
Total revenue   11,713,370   6,996,877
Operating costs and expenses:
Interest and amortization of deferred financing costs 1,665,891 664,134
Compensation to manager - 35,847
Professional fees 417,312 299,935
Compensation, fees and taxes 1,248,107 698,227
Exchange fees 33,535 32,083
Other expenses and taxes 20,707 155,345
Excise tax 19,000 -
Depreciation 32,529 28,358
General and administrative expenses 437,011 222,100
Impairment loss   67,493   -
Total operating costs and expenses   3,941,585   2,136,029
Net income $ 7,771,785 $ 4,860,848

Basic and diluted net income per common share outstanding:

Basic $ 0.50 $ 0.38*
Diluted $ 0.50 $ 0.38*
Weighted average number of common shares outstanding:
Basic   15,425,772   11,956,246
Diluted   15,425,772   -

* Basic and diluted net income per common share outstanding and weighted average number of shares
outstanding are calculated for the period beginning February 9, 2017 (the effective date of the Company’s
initial public offering) through December 31, 2017.


Years Ended
December 31,
  2018     2017  
Net income $ 7,771,785   $ 4,860,848  

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

Amortization of deferred financing costs 137,241 59,118
Depreciation expense 32,529 28,358
Stock based compensation 37,589 -
Impairment loss 67,493 -
Gain on sale of real estate (74,864 ) (179 )
Changes in operating assets and liabilities:
(Increase) decrease in:
Escrow deposits 98,372 (111,189 )
Interest and fees receivable (994,900 ) (166,565 )
Other receivables 234,570 (51,728 )
Due from borrowers (243,423 ) -
Prepaid insurance (10,346 ) (4,520 )
Deposits (12,000 ) -
(Decrease) increase in:
Due to note purchaser (723,478 ) -
Due to member - (656,296 )
Accrued interest 136,027 16,242
Accrued expenses (74,345 ) 194,674
Deferred revenue (49,994 ) 817,944
Advances from borrowers   (116,207 )   (141,995 )
Total adjustments   (1,555,736 )   (16,136 )
Proceeds from sale of real estate owned 1,848,558 530,181
Acquisitions of and improvements to real estate owned (541,525 ) (531,961 )
Purchase of land and building (699,228 ) (39,923 )
Purchase of property and equipment (11,587 ) (92,806 )
Security deposits 5,250 1,750
Principal disbursements for mortgages receivable (42,078,191 ) (53,468,949 )
Principal collections on mortgages receivable 24,641,469 23,948,601
Repurchase of notes sold - (2,000,000 )
Proceeds from notes sold   -     2,723,478  
NET CASH USED FOR INVESTING ACTIVITIES   (16,835,254 )   (28,929,629 )
Proceeds from line of credit 77,564,529 44,177,225
Repayment of line of credit (60,187,019 ) (42,449,555 )
Principal payments on mortgage payable (10,117 ) (8,899 )
Dividends (6,787,795 ) (3,339,655 )
Proceeds from IPO - 30,250,000
Pre-offering costs incurred - (3,258,158 )
Costs in connection with ATM (160,479 )
Financing costs incurred (595,278 ) (87,202 )
Member contributions - 653,646
Member distributions   -     (2,460,125 )
CASH AND RESTRICTED CASH - END OF YEAR $ 158,859   $ 954,223  
Years Ended
December 31,
  2018   2017
Taxes paid $ 53,191 $ -
Interest paid $ 1,370,714 $ 587,442
Dividends declared and payable $ 2,624,566 $ -



On February 8, 2017, Sachem Capital Partners, LLC transferred all its assets and liabilities to the Company in exchange for 6,283,237 shares of the company's Common stock.

Prior year’s pre-offering costs in the amount of $625,890 were charged to paid-in-capital during the year ended December 31, 2017.

During the year ended December 31, 2018, the Company issued notes payable in the amount of $169,338 for the acquisition of mortgages receivable.

On April 24, 2018, the Company purchased a mortgage receivable from a third party at a discount in the amount of $21,433.

Real estate acquired in connection with the foreclosure of certain mortgages, inclusive of interest and other fees receivable, during the year ended December 31, 2018 amounted to $3,173,963.

Assignment of mortgage receivable to shareholder in the amount of $1,200,000, during the year ended December 31, 2018.

Other receivable in the amount of $155,000 obtained in connection with the sale of real estate during the year ended December 31, 2018.

Sachem Capital Corp.
John L. Villano, Co-CEO & CFO
(203) 433-4736

Investor & Media Contact:
Crescendo Communications, LLC
Tel: (212) 671-1021

Source: Sachem Capital Corp.