Sachem Capital's Q1 2025: Navigating Contradictions in Loan Origination, Funding, and Dividend Strategy

Loan origination opportunities and market conditions, funding for debt maturity and loan origination, loan market conditions and opportunities, advance rates on facilities, and dividend policy are the key contradictions discussed in Sachem Capital's latest 2025Q1 earnings call.



Financial Performance Decline:
- Sachem Capital Corp. reported total revenue of $11.4 million for Q1 2025, down 31.9% compared to Q1 2024.
- This decline is primarily due to fewer loan originations over the past 15 months and a compression in the earning unpaid principal loan balance portfolio.

Non-Performing Loans and Book Value Stability:
- As of March 31, 2025, Sachem's non-performing loans (NPLs) net increased to $124 million.
- The book value per common share remained relatively stable at $2.57, a decrease of less than 3% from year-end 2024, reflecting stability in financial health despite NPLs.

Partnership Growth and Revenue:
- Income from Sachem's preferred membership in Shem Creek LLC investment earnings increased by approximately 71.7% compared to Q1 2024.
- This growth is attributed to the company's expansion into multifamily finance through partnerships, such as Shem Creek Capital, which provides risk-adjusted returns and strong sponsor alignment.

Capitalization and Liquidity:
- Sachem's outstanding debt as of March 31, 2025, was $306 million, maintaining a total asset to total liability coverage ratio of 1.57 times.
- The company's liquidity is supported by an additional credit facility with Needham Bank, providing up to $50 million of committed liquidity, which aids in managing debt maturities and funding requirements.