Financial Performance - Total revenue for Q3 2025 was $12.0 million, a decrease of 19% from $14.8 million in Q3 2024[4] - Total revenues for Q3 2025 were $12,000,000, a decrease of 18.9% from $14,785,000 in Q3 2024[22] - Interest income from loans decreased to $8,326,000 in Q3 2025 from $11,420,000 in Q3 2024, representing a decline of 27.5%[22] - Net income attributable to common shareholders was a loss of $120,000 in Q3 2025 compared to a loss of $6,146,000 in Q3 2024[22] - Net loss attributable to common shareholders was $0.1 million, or $0.00 per share, compared to a net loss of $6.1 million, or $0.13 per share in Q3 2024[7] Operating Costs - Total operating costs and expenses decreased to $12.4 million in Q3 2025 from $19.6 million in the same quarter last year[5] - Operating expenses decreased to $12,367,000 in Q3 2025 from $19,607,000 in Q3 2024, a reduction of 37.0%[22] - The provision for credit losses related to loans held for investment was $812,000 in Q3 2025, significantly lower than $8,096,000 in Q3 2024[22] Assets and Liabilities - Total assets at the end of Q3 2025 were $484.4 million, down from $492.0 million as of December 31, 2024[8] - Total liabilities decreased to $308.8 million from $310.3 million as of December 31, 2024[8] - Total shareholders' equity as of September 30, 2025, was $175.6 million, down from $181.7 million as of December 31, 2024[10] - Book value per common share decreased to $2.47 as of September 30, 2025, from $2.64 as of December 31, 2024[11] Cash Flow and Dividends - Cash and cash equivalents at the end of the period were $5,881,000, down from $11,172,000 at the end of Q3 2024[23] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $13,510,000, compared to $5,624,000 for the same period in 2024[23] - Dividends paid on common shares increased to $14,159,000 in the nine months ended September 30, 2025, from $7,114,000 in the same period of 2024[24] - The company paid a dividend of $0.05 per share to common shareholders on September 30, 2025[13] Financing Activities - The company reported a net cash used in financing activities of $64,489,000 for the nine months ended September 30, 2025, compared to $14,107,000 in the same period of 2024[24] - The company issued Senior Secured Notes amounting to $90,000,000 during the reporting period[24] Company Strategy - The company intends to continue operating as a Real Estate Investment Trust (REIT) and comply with the requirement to distribute a minimum of 90% of taxable income to shareholders[12]

Group 1: Earnings Performance - Sachem Capital Corp. reported break-even quarterly earnings per share, compared to a loss of $0.13 per share a year ago, representing an earnings surprise of -100.00% [1] - The company posted revenues of $12 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 11.42%, but down from $14.78 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and topped consensus revenue estimates only once [2] Group 2: Stock Performance and Outlook - Sachem Capital shares have lost about 21.5% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the coming quarter is $0.02 on revenues of $10.98 million, and $0.04 on revenues of $43.97 million for the current fiscal year [7] Group 3: Industry Context - The Zacks Industry Rank for Financial - Miscellaneous Services is currently in the top 31% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The estimate revisions trend for Sachem Capital was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Loans and Investments - Loans disbursed for the three months ended September 30, 2025, totaled $44.657 million, while loans repaid amounted to $40.651 million[129]. - As of September 30, 2025, the gross principal amount of loans held for investment was $375.220 million, with a weighted average contractual interest rate of 13.21%[129]. - The allowance for credit losses as of September 30, 2025, was $11.083 million, representing 3.0% of the total gross principal amount of loans held for investment[134]. - The number of loans held for investment outstanding decreased from 157 as of December 31, 2024, to 119 as of September 30, 2025[129]. - The primary markets for the company's loans held for investment included Connecticut (45.5% of loans), Florida (14.3%), and Massachusetts (8.4%) as of September 30, 2025[131]. - The aggregate gross principal amount of residential loans held for investment was $202.220 million, accounting for 53.9% of the total[132]. - The company’s loan portfolio included 54 loans of $1 million or less, representing 45.4% of the total number of loans[131]. - The weighted average term to maturity for loans held for investment increased from 4 months as of December 31, 2024, to 6 months as of September 30, 2025[129]. Financial Performance - Total revenues for the three months ended September 30, 2025, decreased by 18.8% to $12,000,000 compared to $14,785,000 for the same period in 2024[138]. - Interest income from loans fell by 27.1% to $8,326,000, while fee income from loans increased by 6.6% to $1,964,000[138]. - Net income for the three months ended September 30, 2025, was $997,000, a significant improvement from a net loss of $5,051,000 in the same period of 2024[138]. - The provision for credit losses related to loans held for investment dropped by 90.0% to $812,000 compared to $8,096,000 in 2024[138]. - Total operating expenses decreased by 36.9% to $12,367,000 from $19,607,000 in the prior year[138]. Asset and Equity Changes - Total assets decreased by $7.6 million, or 1.5%, to $484.4 million as of September 30, 2025, mainly due to a $6.9 million decrease in cash and cash equivalents[151]. - Total liabilities decreased by $1.5 million, or 0.5%, to $308.8 million as of September 30, 2025, driven by a $55.5 million reduction in notes payable[152]. - Total shareholders' equity decreased by $6.0 million, or 3.3%, to $175.6 million as of September 30, 2025, due to increased dividends paid[153]. - Book value per common share decreased to $2.47 as of September 30, 2025, down from $2.54 as of June 30, 2025[144]. - Book value per common share decreased to $2.47 as of September 30, 2025, from $2.64 at December 31, 2024, primarily due to $10.4 million in dividends paid[150]. Non-Performing Loans - The company reported a total of 104.066 million in non-performing loans as of September 30, 2025, with a direct reserve of $2.372 million[134]. - The aggregate non-performing loan balance as of September 30, 2024, was $147.0 million, an increase of $62.4 million from December 31, 2023[143]. - The aggregate non-performing loan balance increased to $147.0 million as of September 30, 2024, up $62.4 million from $84.6 million at December 31, 2023[149]. Cash and Financing Activities - Cash and cash equivalents increased by 90.0% to $11.2 million as of September 30, 2025, compared to $5.9 million at the end of the previous year[155]. - The company entered into a new Credit Agreement on March 20, 2025, with a maturity date of March 2, 2026, and had borrowed $32.7 million under this facility as of September 30, 2025[158]. - A private placement of $100.0 million in Senior Secured Notes was completed on June 11, 2025, with an initial draw of $50.0 million and an additional draw of $40.0 million in September 2025[159][160]. - The company reduced its investments in limited liability companies by $12.8 million since December 31, 2024, using returns to fund additional loans[140]. - The company has no off-balance sheet transactions that could affect liquidity or capital resource requirements[161]. Employee Compensation - Compensation and employee benefits increased by 33.8% to $2,334,000, attributed to one-time cash bonuses and additional headcount[142].

Core Viewpoint - Sachem Capital Corp. reported its financial results for Q3 2025, highlighting a focus on disciplined portfolio management and capital preservation amid a challenging macroeconomic environment [2][3]. Financial Performance - Total revenue for Q3 2025 was $12.0 million, down from $14.8 million in Q3 2024, primarily due to lower net new origination and an increase in nonperforming loans [4]. - The effective interest rate on loans held for investment was 12.4% for Q3 2025, slightly down from 12.6% in Q3 2024 [4]. - Net loss attributable to common shareholders was $0.1 million, or $0.00 per share, compared to a net loss of $6.1 million, or $0.13 per share, in Q3 2024 [6]. Operating Costs - Total operating costs and expenses for Q3 2025 were $12.4 million, significantly lower than $19.6 million in the same quarter last year [5]. - The provision for credit losses related to loans held for investment decreased to $0.8 million in Q3 2025 from $8.1 million in Q3 2024, reflecting a reduction in non-performing loan balances [5][22]. Balance Sheet - Total assets at the end of Q3 2025 were $484.4 million, down from $492.0 million as of December 31, 2024 [7]. - Total liabilities were $308.8 million, slightly down from $310.3 million at the end of 2024 [7]. - Total shareholders' equity decreased to $175.6 million from $181.7 million as of December 31, 2024 [9]. Dividends - The company paid a dividend of $0.484375 per share to Series A Preferred Stockholders and $0.05 per share to common shareholders on September 30, 2025 [12]. - The company intends to continue qualifying as a Real Estate Investment Trust (REIT) and plans to distribute a minimum of 90% of taxable income to shareholders [11]. Future Outlook - The company aims to capitalize on high-quality lending opportunities to drive long-term shareholder value into 2026 and beyond [3].

Core Viewpoint - Sachem Capital Corp. will release its third quarter 2025 financial results on November 5, 2025, before market open, followed by a webcast and conference call at 8:00 a.m. Eastern Time [1]. Company Overview - Sachem Capital Corp. is a mortgage REIT that focuses on originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property [3]. - The company provides short-term secured, nonbanking loans to real estate investors for property acquisition, renovation, development, rehabilitation, or improvement, with a primary underwriting criterion of a conservative loan-to-value ratio [3]. - The loans are typically secured by residential or commercial real estate, held for resale or investment, and are personally guaranteed by the principal(s) of the borrower [3]. - In addition to lending activities, the company also engages in opportunistic real estate purchases [3]. Conference Call Participation - To participate in the conference call, interested parties should dial in at least 15 minutes prior to the start time, with domestic and international numbers provided [3]. - A playback of the conference call will be available until November 19, 2025, with specific domestic and international numbers for access [3].

Core Viewpoint - Four real estate stocks have shown significant declines in momentum despite the Federal Reserve entering a rate-cutting cycle, indicating persistent challenges in the sector's risk appetite and investor sentiment [2][9]. Group 1: Stock Performance - Cherry Hill Mortgage Investment Corp. (CHMI) saw its momentum score decrease from 10.68 to 10.50, a drop of 0.18 percentile points, with a year-to-date decline of 3.82% and a 30.58% drop over the past year [8]. - National Storage Affiliates Trust (NSA) experienced a momentum percentile slip from 10.68 to 9.35, a decrease of 1.33 points, with an 18.98% decline year-to-date and a 37.14% drop over the year [8]. - Sachem Capital Corp. (SACH) also saw its momentum score fall from 10.68 to 9.35, mirroring NSA's decline, with an 11.11% year-to-date drop and a 55.56% decline over the year [8]. - Smith Douglas Homes Corp. (SDHC) had its ranking decrease from 10.11 to 9.01, a reduction of 1.10 percentile points week-on-week, reflecting uncertainty around housing starts and affordability [7]. Group 2: Market Context - The underperformance of these four realty stocks is notable as rate reductions by the Fed typically stimulate the real estate sector by lowering capital costs and boosting demand [9]. - The decline in momentum rankings suggests that company-specific risks, such as credit quality and supply imbalances, are currently outweighing macro-level benefits [9].

Core Insights - Granite Point Mortgage Trust (NYSE: GPMT) and Sachem Capital (NYSE: SACH) are currently out of favor with investors, with public preferreds trading at discounts to their $25 per share liquidation value [1] Group 1: Market Dynamics - The equity market serves as a powerful mechanism where daily price fluctuations can lead to significant wealth creation or destruction over the long term [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued yet high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Insights - Granite Point Mortgage Trust (NYSE: GPMT) and Sachem Capital (NYSE: SACH) are currently out of favor with investors, with their public preferred shares trading at discounts to the $25 per share liquidation value [1] Group 1: Company Performance - Both GPMT and SACH are categorized as mortgage REITs, indicating their focus on real estate investment trusts that primarily deal with mortgage financing [1] Group 2: Market Dynamics - The equity market is described as a powerful mechanism where daily price fluctuations can lead to significant long-term wealth creation or destruction [1] - Pacifica Yield is mentioned as a firm that aims for long-term wealth creation by focusing on undervalued yet high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Viewpoint - Sachem Capital Corp. has appointed Jeffery C. Walraven as Executive Vice President and Chief Financial Officer, effective September 1, 2025, following his role as Interim CFO since December 2024 [1][2] Company Overview - Sachem Capital Corp. is a mortgage REIT that specializes in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property [4] - The company offers short-term secured, nonbanking loans to real estate investors for property acquisition, renovation, development, and improvement, with a conservative loan-to-value ratio as its primary underwriting criterion [4] Leadership Background - Jeffery C. Walraven has extensive experience in public company finance, accounting, and consulting, having previously served in various leadership roles in real estate companies [2] - His past positions include Chief Operating Officer and co-founder of Freehold Properties, Inc., and Executive Vice President and CFO of MedEquities Realty Trust, Inc. [2] - Walraven holds a Bachelor's degree in Financial Management and a Master's in Professional Accountancy, along with a CPA license [3]

[S&P Global Market Intelligence Estimates](index=1&type=section&id=S%26P%20Global%20Market%20Intelligence%20Estimates) This section provides consensus financial estimates for FY2025 and FY2026, alongside a comparison of historical GAAP EPS against consensus figures FY2025 & FY2026 Consensus Estimates (as of Jul-09-2025) | Metric | FQ2 2025 Consensus | FY 2025 Consensus | FY 2026 Consensus | | :--- | :--- | :--- | :--- | | EPS (GAAP) | $0.01 | $0.03 | NA | | Revenue (million) | $11.30 | $45.12 | NA | Historical EPS (GAAP) vs. Consensus | Quarter | Consensus | Actual | Surprise | | :--- | :--- | :--- | :--- | | FQ2 2024 | $0.12 | ($0.09) | NM | | FQ3 2024 | $0.10 | ($0.13) | NM | | FQ4 2024 | ($0.47) | ($0.79) | NM | | FQ1 2025 | ($0.06) | $0.00 | NM | [Call Participants](index=3&type=section&id=Call%20Participants) Key executives led the call, with analysts from various firms participating in the subsequent Q&A session - The call was led by **John L. Villano**, Founder, Chairman, President & CEO, and **Jeffery C. Walraven**, Interim CFO & Director[6](index=6&type=chunk) - Analysts from **Citizens JMP Securities**, **Ladenburg Thalmann & Co. Inc.**, and **Alliance Global Partners** participated in the Q&A session[6](index=6&type=chunk) [Presentation](index=4&type=section&id=Presentation) The presentation covers strategic financial strengthening, portfolio performance, macro-economic outlook, detailed financial results, and updates on liquidity and capital resources [Opening Remarks & Strategic Progress](index=4&type=section&id=Opening%20Remarks%20%26%20Strategic%20Progress) Sachem Capital focused on strengthening its financial position in Q2 2025, highlighted by the closing of a new $100 million senior secured note facility, intended to repay existing debt and fund new accretive loan originations, leading to asset growth for the first time in five quarters - The company continued efforts from late 2024 and early 2025 to protect its balance sheet, leading to stabilization in the second quarter[12](index=12&type=chunk) - A new **$100 million** senior secured notes offering due June 2030 was closed to provide financial flexibility[12](index=12&type=chunk) - The new financing enabled the company to repay existing obligations and accelerate new loan originations, resulting in asset growth for the first time in **5 quarters**[12](index=12&type=chunk) [Portfolio Performance and Key Exposures](index=4&type=section&id=Portfolio%20Performance%20and%20Key%20Exposures) The company is actively managing its nonperforming loans (NPLs), which stood at $119.6 million gross, with a significant portion tied to a single borrower in South Florida, while also providing updates on development projects and investments that generated $1 million in revenue, as book value per share saw a slight decrease to $2.54 Nonperforming Loans (NPLs) as of Q2 2025 | Metric | Q2 2025 (June 30) | Q1 2025 (March 31) | | :--- | :--- | :--- | | Gross Unpaid Principal | $119.6 million | $107.6 million | | Net NPLs | $107.0 million | $94.3 million | - A single borrower in South Florida represents a significant exposure, with two cross-collateralized loans totaling approximately **$50.4 million**, accounting for **42.1%** of the total NPL balance[14](index=14&type=chunk) - Book value per share was **$2.54** as of June 30, 2025, a slight **1.2%** decrease from **$2.57** at the end of Q1 2025[14](index=14&type=chunk)[30](index=30&type=chunk) - Investments totaling **$41.2 million** in projects managed by Shem Creek Capital generated approximately **$1 million** in revenue for the second quarter[19](index=19&type=chunk) - Development projects with partner Urbane New Haven are progressing on schedule, including a Westport office/residential asset and three high-end homes in Florida[18](index=18&type=chunk) [Macro Environment and Outlook](index=5&type=section&id=Macro%20Environment%20and%20Outlook) The company operates in a challenging macro environment with high interest rates dampening housing demand, yet these conditions create opportunities for selective lenders like Sachem as traditional financing remains constrained, allowing the company to maintain a disciplined underwriting approach focused on experienced sponsors, with post-COVID loan originations performing well - The macro environment is challenging, with elevated interest rates dampening demand in the single-family housing market and increasing costs for developers[20](index=20&type=chunk)[21](index=21&type=chunk) - These challenges create opportunities for Sachem, as traditional lenders like banks face constraints, leading to a pipeline of new origination opportunities that exceeds the company's current capacity[21](index=21&type=chunk)[22](index=22&type=chunk) - Sachem remains committed to a disciplined underwriting approach, emphasizing highly experienced and creditworthy sponsors, and notes that its post-COVID era loan originations are performing exceptionally well[22](index=22&type=chunk) [Financial Results (CFO's Report)](index=5&type=section&id=Financial%20Results%20%28CFO%27s%20Report%29) For Q2 2025, Sachem reported total revenue of $10.8 million and a GAAP net income of $1.9 million, or $0.02 per share attributable to common shareholders, which compares favorably to a net loss in the prior year, driven by a significant reduction in the provision for credit losses, with total assets growing to $501.8 million and the company's debt-to-equity ratio standing at 1.8x Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $10.8 million | $15.1 million | | Total Operating Expenses | $9.7 million | $18.3 million | | Provision for Credit Losses | -$7.6 million (decrease) | - | | GAAP Net Income | $1.9 million | ($4.1 million loss) | | Net Income per Common Share | $0.02 | ($0.09) | Balance Sheet Summary (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total Assets | $501.8 million | | Total Liabilities | $323.9 million | | Shareholders' Equity | $177.9 million | | Debt-to-Equity Ratio | 1.8x | - The loan portfolio consisted of **135 first mortgage loans** with an unpaid principal balance of **$382.1 million** and a net carrying value of **$364.5 million** after a **$17.6 million** allowance for credit losses[28](index=28&type=chunk) [Liquidity, Capital Resources, and Dividends](index=6&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Dividends) The company's liquidity position is solid, with cash increasing to $22.5 million, and a new $100 million private placement of senior secured notes enhances capital resources, with an initial $50 million drawn, as Sachem plans to repay $56.3 million in notes maturing in September 2025 using existing credit facilities and cash from loan repayments, while the dividend policy is under regular evaluation - Cash and cash equivalents increased to **$22.5 million** from **$18.1 million** at the start of the year[30](index=30&type=chunk) - Completed a **$100 million** private placement of 5-year senior secured notes, drawing an initial **$50 million** at closing with the remaining **$50 million** available until May 2026[31](index=31&type=chunk) - The company expects to fully repay **$56.3 million** in notes maturing at the end of September 2025 using existing credit facilities and cash from loan repayments[32](index=32&type=chunk) - The Board of Directors regularly evaluates the dividend distribution policy, and has aligned the timing of common and preferred dividend declarations and payments to March, June, September, and December[33](index=33&type=chunk) [Question and Answer](index=8&type=section&id=Question%20and%20Answer) The Q&A session addressed LLC investment performance, REO resolution velocity, the impact and resolution efforts for the Naples non-accrual loan, and details on financing and new loan origination strategies [Discussion on LLC Investments and REO](index=8&type=section&id=Discussion%20on%20LLC%20Investments%20and%20REO) Management addressed a dip in LLC income, attributing it to timing differences in cash flow waterfalls from Shem Creek investments, but reiterated a low double-digit return outlook, also discussing the Urbane development pipeline, which was slowed in 2024 but is a focus for future growth, and regarding REO, while the balance appears flat, there has been underlying activity, and management expects the velocity of NPL and REO resolutions to accelerate in the second half of the year - The dip in income from Shem Creek investments was due to timing differences in cash flow waterfalls, with the overall investment still expected to generate a low double-digit (**10-12%**) return on the **$41.2 million** invested[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - The company plans to rebuild the Urbane project pipeline to have projects completing on a rolling quarterly basis, a goal that was slowed during a difficult 2024[46](index=46&type=chunk) - Management expects the velocity of NPL and REO resolutions to accelerate in the second half of the year, with an anticipated **$12.5 million** in additional resolutions expected in Q3[49](index=49&type=chunk) [Discussion on Naples Loan and Asset Quality](index=9&type=section&id=Discussion%20on%20Naples%20Loan%20and%20Asset%20Quality) The significant Naples non-accrual loan, with a net book value of $50.4 million, is impacting earnings by approximately $450,000 per month, with a mediation event scheduled and the company optimistic about a resolution, while management confirmed that, excluding this major loan, the portfolio's asset quality is stabilizing as they actively "cleanse" the portfolio of weaker loans - The large Naples non-accrual loan has a net book value of **$50.4 million** and is creating an opportunity cost that negatively impacts earnings by approximately **$450,000 per month**[53](index=53&type=chunk)[55](index=55&type=chunk) - A mediation event regarding the Naples loan was scheduled for the week of the call, with the company working towards a resolution[53](index=53&type=chunk)[54](index=54&type=chunk) - Management confirmed that overall asset quality trends are stabilizing as the company actively works to "cleanse the portfolio" by not extending weaker loans and pushing them towards resolution[56](index=56&type=chunk) [Discussion on Financing and Loan Origination](index=11&type=section&id=Discussion%20on%20Financing%20and%20Loan%20Origination) Management clarified that the remaining $50 million from the new note offering is available for either repaying maturing notes or funding growth, depending on loan payoffs, and in Q2, the company disbursed $39.7 million in new loans and draws while receiving $23.7 million in repayments, maintaining disciplined pricing aiming for yields of 12% interest plus 2 points on new originations - The undrawn **$50 million** from the new senior notes facility is available for either repaying notes maturing in September or for funding new growth, depending on loan payoffs during the quarter[60](index=60&type=chunk) Q2 2025 Loan Activity | Activity | Amount | | :--- | :--- | | New Loan Disbursements & Draws | $39.7 million | | Loan Repayments | $23.7 million | - The company is maintaining its target pricing on new loans at **12% interest** and **2 points**, occasionally going down to **11%** but not below **10%**[62](index=62&type=chunk)