Sachem Capital’s Earnings Call: Mixed Results and Strategic Moves

Sachem Capital Corp. ((SACH)) has held its Q2 earnings call. Read on for the main highlights of the call.

Sachem Capital Corp.’s recent earnings call presented a mixed sentiment, highlighting both achievements and ongoing challenges. The company has gained significant financial flexibility through new secured notes and has successfully reduced operating expenses. However, it continues to face hurdles such as declining revenue, high levels of nonperforming loans, and a decrease in book value.

New $100 Million Senior Secured Notes

Sachem Capital Corp. has successfully closed a new $100 million senior secured notes due in June 2030. This strategic move is expected to provide the company with the financial flexibility needed to repay existing obligations and accelerate new loan originations, marking a significant step forward in strengthening its financial position.

Reduction in Operating Expenses

The company reported a notable reduction in operating expenses for the second quarter of 2025, with total costs amounting to $9.7 million compared to $18.3 million in the same period of 2024. This decrease is primarily attributed to a reduction in the provision for credit losses, reflecting improved financial management.

Increase in Total Assets

Sachem Capital’s total assets have increased to $501.8 million from $492 million at the end of 2024. This growth in assets underscores the company’s ability to expand its financial base despite facing market challenges.

Strong Investment Performance with Shem Creek Capital

Investments in Shem Creek Capital have yielded positive results, generating approximately $3 million in revenue during the first half of 2025. The investments are characterized by a low-risk, double-digit yield, contributing to the company’s overall financial performance.

Decrease in Total Revenue

The company experienced a decline in total revenue, reporting $10.8 million compared to $15.1 million in the second quarter of 2024. This decrease is mainly due to lower net new loan originations and elevated levels of nonperforming loans.

High Nonperforming Loans and Specific Borrower Challenges

Sachem Capital is dealing with approximately $119.6 million in nonperforming loans, with a significant portion tied to a single borrower in South Florida. This exposure presents ongoing challenges for the company as it seeks to manage and mitigate these risks.

Decrease in Book Value

The company’s book value per share has decreased by 1.2% from March 31, 2025, primarily due to dividend payments exceeding net earnings. This decline reflects the financial pressures faced by Sachem Capital in the current economic climate.

Interest Income Decline

Interest income from loans has seen a decline, with the company reporting $7.5 million, down from $11.8 million in the previous year. This reduction is indicative of the broader challenges in the lending market.

Forward-Looking Guidance

Sachem Capital Corp. remains committed to growing its lending platform and strengthening its financial position. The recent $100 million senior secured notes financing is expected to provide the necessary flexibility to repay obligations and boost new loan originations. Despite challenges with nonperforming loans, the company is optimistic about resolving these issues and recovering capital. It continues to focus on single-family and multifamily residential assets, maintaining a disciplined approach to new loan evaluations and capitalizing on future growth opportunities.

In conclusion, Sachem Capital Corp.’s earnings call reflects a company navigating through a complex financial landscape. While it has achieved financial flexibility and reduced expenses, challenges such as declining revenue and high nonperforming loans persist. The company’s forward-looking guidance suggests a strategic focus on growth and recovery, with optimism about overcoming current hurdles.