Sachem Capital's Q2 2025: Key Contradictions in Loan Yields, Sales Strategy, and Nonaccruals

Loan yields, loan sales and origination, REO activity and sales strategy, Naples loan impact on nonaccruals, and loan sales strategy and impact on portfolio size are the key contradictions discussed in Sachem Capital Corp.'s latest 2025Q2 earnings call.



Financial Performance and Stabilization:
- Sachem Capital reported GAAP net income of $1.9 million for Q2 2025, compared to a net loss of $4.1 million in Q2 2024.
- The improvement was driven by reduced credit losses, lower interest expenses, and strategic debt repayments, despite a decline in revenue due to lower net new loan originations and elevated NPLs.

Balance Sheet Strengthening:
- Sachem Capital's total assets increased to $501.8 million in Q2 2025, and the company successfully issued a $100 million senior secured notes facility, enhancing liquidity and supporting growth initiatives.
- The issuance enabled Sachem to repay existing obligations and support asset growth for the first time in five quarters, reflecting the company's strategic focus on strengthening its financial position.

Nonperforming Loan Management:
- As of June 30, 2025, Sachem Capital had approximately $119.6 million in gross unpaid principal balance of nonperforming loans.
- The company continues to make progress in working through legacy assets, which is critical for unlocking value and supporting future dividend growth, despite ongoing challenges with a single borrower in South Florida.

Macroeconomic Challenges and Opportunities:
- The single-family housing market experienced a decline in demand due to rising mortgage rates, impacting existing home sales and new construction.
- Despite these challenges, Sachem Capital sees opportunities to selectively provide capital solutions where traditional financing remains constrained, positioning the company to capitalize on future growth opportunities.