Sachem Capital(US:SACH)2021-08-16 10:17Revenue and Income - Revenue increased by 44.2% compared to the first half of 2020, driven by a 49.4% increase in interest income due to growth in lending activities [105]. - Net income rose by 4.6%, with earnings per share remaining unchanged at $0.10 [105]. - Total revenue for Q2 2021 was approximately $6.7 million, an increase of 56.0% from $4.3 million in Q2 2020, primarily driven by growth in lending operations [148]. - Interest income for Q2 2021 was approximately $4.7 million, up 43.4% from approximately $3.3 million in Q2 2020 [148]. - Net income for Q2 2021 was approximately $2.5 million, or $0.10 per share, compared to $2.3 million, or $0.10 per share in Q2 2020 [151]. - Total revenue for the six months ended June 30, 2021 was approximately $12.4 million, a 44.2% increase from $8.6 million in the same period of 2020 [152]. Assets and Liabilities - Total assets at June 30, 2021 were approximately $296.3 million, an increase of 30.7% from approximately $226.7 million at December 31, 2020 [159]. - Total liabilities at June 30, 2021 were approximately $150.0 million, a 2.9% increase from approximately $145.8 million at December 31, 2020 [160]. - Total shareholders' equity at June 30, 2021 was approximately $146.3 million, an increase of approximately $65.4 million from approximately $80.9 million at December 31, 2020 [161]. Cash Flow - Net cash provided by operating activities for the six months ended June 30, 2021 was approximately $6.1 million, compared to approximately $4.0 million for the same period in 2020 [163]. - Net cash used for investing activities for the six months ended June 30, 2021 was approximately $26.7 million, compared to approximately $15.7 million for the comparable 2020 period [164]. - Net cash provided by financing activities for the six months ended June 30, 2021, was approximately $63.4 million, a significant increase from $2.5 million in the comparable 2020 period [165]. - Anticipated cash requirements for operating needs are expected to be met by current cash balances and anticipated cash flows from operations for the next 12 months [167]. - Long-term cash needs will be funded through unused net proceeds from financing activities, operating cash flows, and proceeds from sales of real estate owned [168]. Capital Structure - The company's capital structure improved, with debt at 50.6% and equity at 49.4% as of June 30, 2021, compared to 63% debt and 37% equity at March 31, 2021 [120]. - As of June 30, 2021, the company's capital structure was approximately 50.6% debt and 49.4% equity, with total outstanding indebtedness of approximately $148.8 million [126][135]. - The company aims to maintain a modest amount of leverage for financing its portfolio, having reduced its debt level from 63.0% to 50.6% of total capital [134]. Loan Portfolio - Mortgages receivable increased by 55.1%, amounting to $61.4 million compared to June 30, 2020 [105]. - The yield on the loan portfolio decreased to 11.72% as of June 30, 2021, down from 12.38% in the same period of 2020, indicating rate compression [114]. - The yield on the mortgage loan portfolio decreased from 12.38% in 2020 to 11.72% in the first half of 2021, indicating interest rate compression [128]. - The company experienced $58 million in loan payoffs during the first half of 2021, compared to $55 million for all of 2020, attributed to a stronger real estate market [127]. - Approximately 88.5% of the mortgage loans in the portfolio had a term of one year or less as of June 30, 2021, to mitigate risks associated with rising interest rates [129]. - The company had 130 loans with future funding obligations totaling $31.8 million as of June 30, 2021 [117]. Operating Expenses and Financial Performance - Operating expenses increased significantly due to a higher debt load and new personnel hires, impacting overall financial performance [116]. - Total operating costs and expenses for Q2 2021 were approximately $4.2 million, an increase of 105.1% from $2.0 million in Q2 2020, mainly due to higher interest expenses [149]. Future Plans and Strategies - The company plans to use its cash reserves to further increase the mortgage loan portfolio in the second half of 2021 [120]. - The company plans to expand its geographic footprint beyond New England, focusing on markets in Florida and Texas, while exploring partnerships with local lenders [123]. - The company remains focused on maintaining its REIT status by distributing at least 90% of taxable income to shareholders [103]. - The company intends to pay regular quarterly distributions to common shareholders of not less than 90% of REIT taxable income [169]. Financing Activities - The company completed a $200 million master repurchase financing facility with Churchill MRA Funding I LLC, allowing for flexible capital raising at a low cost [123]. - A $200 million master repurchase financing facility was consummated with Churchill MRA Funding I LLC to finance the expansion of the lending business [171]. - The company raised approximately $45.4 million from the sale of 1,903,000 shares of Series A Preferred Stock in June and July 2021 [133]. - The company sold 1,700,000 shares of Series A Preferred Stock for net proceeds of $40.6 million on June 29, 2021 [166]. - From July 1, 2021, to August 9, 2021, the company raised $8,014,203 in net proceeds from the sale of 1,582,717 common shares [173]. Contractual Obligations - Total contractual obligations as of June 30, 2021, amounted to $31,852,145, including unfunded loan commitments of $31,845,533 [176]. - The company has a margin loan account with Wells Fargo, with a balance of approximately $34.3 million at June 30, 2021, bearing interest at 1.5% [139]. - Seven mortgage loans were under enforcement or collection proceedings, representing approximately 0.5% of the aggregate mortgage loan portfolio as of June 30, 2021 [130].