Sachem Capital(US:SACH)2021-05-18 16:40Financial Data and Key Metrics Changes - The company achieved a 33% increase in quarterly revenue, reaching approximately $5.7 million compared to $4.3 million in the same period last year [8][22] - Interest income on the loan portfolio increased by 56% year-over-year [8][22] - Net income for the first quarter was approximately $2.2 million, maintaining the same per-share earnings of $0.10 as the previous year [25] - Total assets increased by $1.6 million from $226.7 million to $228.4 million [28] - Total liabilities decreased to $143.8 million from $145.8 million at the end of the previous year [29] - Shareholders' equity increased by approximately $3.7 million to $84.6 million [30] Business Line Data and Key Metrics Changes - Loan repayments in Q1 2021 were $30.5 million, while new loan fundings were $31.7 million, both record highs for any quarter in the company's history [9] - Origination fee income remained relatively flat, increasing by approximately 1% [22] - Late and processing fees increased by 17%, and other income rose by 61% [22] Market Data and Key Metrics Changes - Nationally, active listings decreased by 53%, and median list home prices increased by 17% year-over-year [12] - In Connecticut, days on market decreased between 43% and 52%, with median list prices increasing by 2% to 18% depending on the county [12] Company Strategy and Development Direction - The company aims to grow its loan portfolio while maintaining strict underwriting guidelines to protect capital and provide attractive risk-adjusted returns [12][33] - Expansion beyond Connecticut is a priority, with a focus on Florida and Texas, targeting larger value commercial loans [18][34] - The company is exploring various financing alternatives to lower its cost of capital [41] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the economic climate in the Northeast and the favorable competitive landscape due to restrictive lending criteria from traditional lenders [16][17] - The company believes its quick turnaround and flexibility with borrowers provide a competitive advantage [17] - Despite challenges from COVID-19, the company remains confident in its long-term growth prospects [26] Other Important Information - The company raised approximately $56 million of unsecured unsubordinated notes in 2020, which has provided liquidity for growth [13] - A dividend of $0.12 per share was declared and paid to shareholders [36] - The company has a low interest line of credit with Wells Fargo, secured by its portfolio of short-term securities [14] Q&A Session Summary Question: What is the target leverage ratio for the second half of 2021? - The company currently has $200 million in assets versus $100 million in debt, maintaining a conservative approach to growth and avoiding over-leveraging [45][46] Question: Should the evaluation of ways to lower the cost of capital be expected in the second half of the year? - The company is in the process of evaluating opportunities and expects to make an announcement in approximately 45 days [49] Question: Can you provide an update on the expansion in Florida and Texas? - The company has approximately $15 million to $20 million in Florida, focusing on the Cape Coral area, and is cautiously exploring opportunities in Austin [53][55]