Sachem Capital Corp's Q3 2024 Earnings: Navigating Market Challenges

Sachem Capital Corp (NYSE American: SACH), a real estate lender specializing in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property, recently announced its financial results for the third quarter ended September 30, 2024. The earnings call provided insights into the company's strategic initiatives and financial performance amidst a challenging macroeconomic environment.

During the quarter, Sachem Capital maintained discipline with short-term debt coming due and executed several strategic initiatives to position the company for future growth. The company diversified its business model with an additional investment in Shem Creek Capital and initiated a sale of non-performing mortgages, which is expected to strengthen its balance sheet and enable capital redeployment towards more attractive opportunities in 2025.

Total revenue for the quarter was $14.8 million, compared to $17.8 million in the same quarter of 2023. The reduction in interest income, primarily due to a lower number of loans originated, modified, or extended, and a decline in fee income from loans, contributed to the decrease in total revenue. Total operating costs and expenses for the quarter were $19.6 million, up from $11.3 million in the same 2023 quarter, primarily due to an $8.1 million provision for credit losses.

Net loss attributable to common shares for the three months ended September 30, 2024, was $6.1 million, or $0.13 per share, compared to net income of $5.2 million, or $0.12 per share, in the same period of 2023. The change is mainly attributable to the larger provision for credit losses and the decrease in interest and fee income from loans.

Total assets were $555.5 million at September 30, 2024, compared to $625.5 million at December 31, 2023. The change reflects reductions in the net mortgage loan portfolio, investment securities, and cash and cash equivalents, offset by increases in partnership investments and real estate owned. Total liabilities at September 30, 2024, were $334.9 million, down from $395.5 million at December 31, 2023, primarily due to reductions in notes payable and credit facilities.



On November 7, 2024, the Company declared a quarterly dividend of $0.05 per share, payable to shareholders of record on November 18, 2024, and expected to be paid on November 26, 2024. 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.

In conclusion, Sachem Capital Corp's Q3 2024 earnings call highlighted the company's strategic initiatives to navigate market challenges and position itself for future growth. Despite a net loss and a decrease in total revenue, the company's proactive approach to managing short-term debt and expanding its lending platform demonstrates its commitment to long-term success. Investors should monitor the company's progress as it continues to execute on its strategic plans.