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press release

Nov. 4, 2021, 8:30 a.m. EDT

Sachem Capital Reports 100% Revenue Growth and Net Income of $3.4 Million for the Third Quarter of 2021

Conference Call and Webcast to be held at 8:00 AM EDT on Friday, November 5, 2021

BRANFORD, Conn., Nov 04, 2021 (GLOBE NEWSWIRE via COMTEX) -- BRANFORD, Conn., Nov. 04, 2021 (GLOBE NEWSWIRE) -- Sachem Capital Corp. /zigman2/quotes/209233111/composite SACH -1.43% announces its financial results for the quarter and nine months ended September 30, 2021. The company will host a conference call on Friday, November 5, 2021 at 8:00 a.m. Eastern Daylight Time to discuss in greater detail its financial condition and operating results for the third quarter of 2021.

John Villano, CPA, the company's Chief Executive and Chief Financial Officer stated: "We achieved 100% revenue growth over the same period last year, as well as net income of $3.4 million for the third quarter of 2021, which provides further validation our long-term strategy is working. We have maintained a robust loan pipeline, a healthy balance sheet and continue to generate solid cash flow. Importantly, with the proceeds of our recent Series A Preferred offering, combined with the addition of our Churchill credit facility, we are poised for further growth during the balance of the year and beyond. As previously discussed, we are diversifying our holdings, including larger loans with established developers. We are also opportunistically expanding and diversifying the geographic footprint of our mortgage loan portfolio beyond Connecticut. We have accomplished these goals while maintaining strict underwriting criteria and a conservative loan to value ratio. Looking ahead, we are witnessing strong market demand for our loan products and remain highly encouraged by the outlook for the business."

Results of operations - three months ended September 30, 2021

Total revenue for the three months ended September 30, 2021 was approximately $8.5 million compared to approximately $4.3 million for the three months ended September 30, 2020, an increase of approximately $4.3 million, or 100%. Interest income and origination fees were approximately $6.1 million and $1.0 million, respectively. In comparison, for the three months ended September 30, 2020, interest income and origination fees were approximately $3.5 million and $393,000, respectively. In the third quarter of 2021 the company had approximately $256,000 of gains from the sale of investment securities compared to a loss of approximately $22,000 for the 2020 period. Investment income for the third quarter of 2021 increased to $276,000 compared to approximately $32,000 for the same period last year. Other income was approximately $580,000 for the third quarter of 2021, compared to approximately $337,000 for the same period last year.

Total operating costs and expenses for three months ended September 30, 2021 were approximately $4.2 million compared to approximately $2.1 million for the three months ended September 30, 2020. The increase in operating costs and expenses is primarily attributable to the increase in interests expense and amortization of deferred financing costs, which, in turn, is a direct result of an increase in overall indebtedness, particularly the unsubordinated unsecured notes.

Net income attributable to common shareholders for the three months ended September 30, 2021 was approximately $3.4 million, or $0.12 per share, compared to $2.1 million, or $0.10 per share for the three months ended September 30, 2020.

Results of operations - nine months ended September 30, 2021

Total revenue for the nine months ended September 30, 2021 was approximately $20.9 million compared to approximately $12.9 million for the nine months ended September 30, 2020, an increase of approximately 62.5%. For the nine months ended September 30, 2021, interest income was approximately $15.3 million and origination fees were approximately $2.3 million, respectively. In comparison, for the nine months ended September 30, 2020, interest income and origination fees were approximately $9.6 million and $1.6 million, respectively. Net gain on the sale of investment securities was approximately $212,000 for the 2021 period compared to net gains of approximately $415,000 for the 2020 period. Investment income was approximately $699,000 for the first nine months of 2021 compared to approximately $163,000 for the same period last year. Other income was approximately $1.6 million for the first nine months of 2021, compared to approximately $904,000 for the same period last year.

Total operating costs and expenses for the nine months ended September 30, 2021, were approximately $11.9 million compared to $6.3 million for the nine months ended September 30, 2020. The increase in operating costs and expenses is primarily attributable to the increase in the company's unsecured, unsubordinated notes while growing our lending operations.

Net income attributable to common shareholders for the nine months ended September 30, 2021, was approximately $8.1 million, or $0.32 per share, compared to $6.6 million, or $0.30 per share for the nine months ended September 30, 2020.

Financial Condition

At September 30, 2021, total assets were approximately $313.4 million compared to $226.7 million at December 31, 2020. The increase was due primarily to the increase in cash and cash equivalents and investment securities of $18.6 million, an increase of the mortgage loan portfolio of approximately $64.3 million, an increase in investment in partnership of approximately $1.8 million, a net increase in property and equipment of approximately $756,000, and increases in due from borrowers of approximately $1.4 million and interest and fees receivable of approximately $885,000, offset by a decrease in real estate owned of approximately $2.1 million.

Total liabilities at September 30, 2021 were approximately $154.6 million compared to $145.8 million at December 31, 2020. This increase is principally due to an increase in the line of credit of approximately $2.0 million, advances from borrowers of $8.2 million and deferred revenue of approximately $1.8 million offset by decrease in dividends payable of $2.7 million, mortgage payable of $768,000, other loans of approximately $258,000, and accounts payable and accrued expenses of approximately $180,000.

Shareholders' equity at September 30, 2021 was approximately $158.8 million compared to approximately $80.9 million at December 31, 2020. This increase was due primarily to net proceeds of $45.5 million from the sale of shares of our Series A Preferred Stock, net proceeds of $30.9 million from the sale of common shares and net income of approximately $8.1 million.

On October 13, 2021, the Company authorized and declared a quarterly dividend of $0.12 per share to be paid to shareholders of record as of the close of trading on the NYSE American on October 25, 2021. The dividend was paid on October 29, 2021.

Investor Conference Call

The company will host a conference call on Friday, November 5, 2021 at 8:00 a.m., Eastern Daylight Time, to discuss in greater detail its financial results for the third quarter ending September 30, 2021, as well as its outlook for the balance of 2021.

Interested parties can access the conference call via telephone by dialing toll free 1-877-545-0523 for U.S. callers or 973-528-0016 for international callers and entering the entry code: 664173. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2304/43586 or on Sachem's website at https://ir.sachemcapitalcorp.com/ir-calendar .

The webcast will also be archived on the company's website and a telephone replay of the call will be available approximately one hour following the call through Friday, November 19, 2021 and can be accessed by dialing 877-481-4010 for U.S. callers or 919-882-2331 for international callers and by entering replay passcode: 43586.

About Sachem Capital Corp.

Sachem Capital Corp. specializes in originating, underwriting, funding, servicing, and managing a portfolio of first mortgage loans. It offers short-term (i.e., three years or less) secured, non­banking loans (sometimes referred to as "hard money" loans) to real estate investors to fund their acquisition, renovation, development, rehabilitation or improvement of properties located primarily in Connecticut. The company does not lend to owner occupants. The company's primary underwriting criteria is a conservative loan to value ratio. The properties securing the company's loans are generally classified as residential or commercial real estate and, typically, are held for resale or investment. Each loan is secured by a first mortgage lien on real estate. Each loan is also personally guaranteed by the principal(s) of the borrower, which guaranty may be collaterally secured by a pledge of the guarantor's interest in the borrower. The company also makes opportunistic real estate purchases apart from its lending activities. The company believes that it qualifies as a real estate investment trust (REIT) for federal income tax purposes and has elected to be taxed as a REIT beginning with its 2017 tax year.

Forward Looking Statements

Thispressreleasemaycontainforward-lookingstatements.Allstatementsotherthanstatementsofhistoricalfactscontainedinthispressrelease,includingstatementsregardingourfutureresultsofoperationsandfinancialposition,strategyandplans,andourexpectationsforfutureoperations,areforward-lookingstatements.Thewords"anticipate,""estimate,""expect,""project,""plan,""seek,""intend,""believe,""may,""might,""will,""should,""could,""likely,""continue,""design,"andthenegativeofsuchtermsandotherwordsandtermsofsimilarexpressionsareintendedtoidentifyforward-looking statements.

Wehavebasedtheseforward-lookingstatementslargelyonourcurrentexpectationsandprojectionsaboutfutureeventsandtrendsthatwebelievemayaffectourfinancialcondition,resultsofoperations,strategy,short-termandlong-termbusinessoperationsandobjectivesandfinancialneeds.Theseforward-lookingstatementsaresubjectto severalrisks,uncertaintiesandassumptions as described in our Annual Report on Form 10-K for 2020 filed with the U.S. Securities and Exchange Commission. Because of theserisks,uncertaintiesandassumptions,theforward-lookingeventsandcircumstancesdiscussedinthispressreleasemaynotoccur,andactualresultscoulddiffermateriallyandadverselyfromthoseanticipatedorimpliedin theforward-looking statements.

Youshouldnotrelyuponforward-lookingstatementsaspredictionsoffutureevents.Althoughwebelievethattheexpectationsreflectedintheforward-lookingstatementsarereasonable,wecannotguaranteefutureresults, levelofactivity,performanceorachievements.Inaddition,neitherwenoranyotherpersonassumesresponsibilityfortheaccuracyandcompletenessofanyoftheseforward-lookingstatements.Wedisclaimanyduty to updateanyoftheseforward-looking statements.

Allforward-lookingstatementsattributabletousareexpresslyqualifiedintheirentiretybythesecautionarystatementsaswellasothersmadeinthispressrelease. Youshouldevaluateall forward-looking statementsmadebyusinthe contextoftheserisksand uncertainties.

Investor & Media Contact:
Crescendo Communications, LLC
Email: sach@crescendo-ir.com
Tel: (212) 671-1021

(tables follow)


SACHEM CAPITAL CORP.
BALANCE SHEETS

September 30, 2021 December 31, 2020
(Unaudited) (Audited)
Assets
Assets:
Cash and cash equivalents $ 19,242,316 $ 19,408,028
Investment securities 56,080,725 37,293,703
Investment in partnership 1,804,217 --
Mortgages receivable 219,963,291 155,616,300
Interest and fees receivable 2,705,447 1,820,067
Other receivables 428,391 67,307
Due from borrowers 3,431,015 2,025,663
Prepaid expenses 85,813 71,313
Property and equipment, net 2,189,887 1,433,388
Real estate owned 6,774,522 8,861,609
Other deposits 291,191 --
Deferred financing costs, net 354,936 72,806
Total assets $ 313,351,751 $ 226,670,184
Liabilities and Shareholders' Equity
Liabilities:
Notes payable (net of deferred financing costs of $4,132,355 and $4,866,058) $ 110,394,395 $ 109,640,692
Mortgage payable -- 767,508
Line of credit 30,056,159 28,055,648
Accrued dividends payable -- 2,654,977
Accounts payable and accrued expenses 192,670 372,662
Other loans -- 257,845
Security deposits held 2,000 13,416
Advances from borrowers 10,031,656 1,830,539
Deferred revenue 3,879,291 2,099,331
Notes payable 37,498 54,682
Accrued interest -- 3,344
Total liabilities 154,593,669 145,750,644
Commitments and Contingencies
Shareholders' equity:
Preferred shares - $.001 par value; 5,000,000 shares authorized; 1,903,000 shares of Series A Preferred Stock issued and outstanding 1,903 --
Common stock - $.001 par value; 100,000,000 shares authorized; 28,315,930 and 22,124,801 issued and outstanding 28,316 22,125
Paid-in capital 160,279,468 83,814,376
Accumulated other comprehensive loss (637,990 ) (25,992 )
Accumulated deficit (913,615 ) (2,890,969 )
Total shareholders' equity 158,758,082 80,919,540
Total liabilities and shareholders' equity $ 313,351,751 $ 226,670,184


SACHEM CAPITAL CORP.
STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Revenue:
Interest income from loans $ 6,094,165 $ 3,473,304 $ 15,307,692 $ 9,640,387
Investment income 275,745 32,483 698,556 163,161
Income from partnership investment 35,983 -- 90,225 --
Gain (loss) on sale of investment securities 256,418 (21,858 ) 212,449 415,301
Origination fees 999,287 393,097 2,348,608 1,551,652
Late and other fees 202,572 10,955 300,471 46,835
Processing fees 50,230 37,445 129,615 123,568
Rental income (loss), net 28,320 9,593 23,105 49,777
Debt Forgiveness -- -- 257,845 --
Other income 579,656 336,789 1,579,885 904,071
Total revenue 8,522,376 4,271,808 20,948,451 12,894,752
Operating costs and expenses:
Interest and amortization of deferred financing costs 2,589,847 1,262,278 7,541,536 3,564,533
Professional fees 183,503 158,206 666,431 400,868
Compensation, fees and taxes 771,373 500,165 2,175,603 1,232,733
Exchange fees 12,603 22,713 37,397 29,986
Other expenses and taxes 104,583 26,247 149,898 61,484
Depreciation 20,421 15,348 61,286 46,318
General and administrative expenses 294,981 145,251 702,897 412,677
Loss on sale of real estate 94,450 2,816 111,545 7,276
Impairment loss 150,000 -- 469,000 495,000
Total operating costs and expenses 4,221,761 2,133,024 11,915,593 6,250,875
Net income 4,300,615 2,138,784 9,032,858 6,643,877
Preferred stock dividend (913,791 ) -- (932,089 ) --
Net income attributable to common shareholders 3,386,824 2,138,784 8,100,769 6,643,877
Other comprehensive (loss) gain
Unrealized (loss) gain on investment securities (500,188 ) (72,785 ) (611,998 ) 13,282
Comprehensive income $ 2,886,636 $ 2,065,999 $ 7,488,771 $ 6,657,159
Basic and diluted net income per common share outstanding:
Basic $ 0.12 $ 0.10 $ 0.32 $ 0.30
Diluted $ 0.12 $ 0.10 $ 0.32 $ 0.30
Weighted average number of common shares outstanding:
Basic 27,973,249 22,117,301 24,968,885 22,117,301
Diluted 27,977,095 22,117,301 24,972,837 22,117,301

SACHEM CAPITAL CORP.
STATEMENTS OF CASH FLOW
(unaudited)

Nine Months Ended
September 30,
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 9,032,858 $ 6,643,877
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs and bond discount 839,418 357,497
Write-off of deferred financing costs 72,806 --
Depreciation expense 61,286 46,318
Stock based compensation 126,538 12,321
Impairment loss 469,000 495,000
Loss on sale of real estate 111,545 7,276
Gain on sale of marketable securities (212,449 ) (415,301 )
Debt Forgiveness (257,845 ) --
Changes in operating assets and liabilities:
(Increase) decrease in:
Interest and fees receivable (885,380 ) (180,335 )
Other receivables (361,084 ) 54,090
Due from borrowers (1,405,352 ) (273,202 )
Prepaid expenses (14,500 ) (82,082 )
Deposits on property and equipment -- (100,530 )
(Decrease) increase in:
Accrued interest (3,344 ) 77,256
Accounts payable and accrued expenses (179,992 ) 272,574
Deferred revenue 1,779,960 (91,019 )
Advances from borrowers 8,201,117 565,706
Total adjustments 8,341,724 745,569
NET CASH PROVIDED BY OPERATING ACTIVITIES 17,374,582 7,389,446
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (160,896,229 ) (37,216,177 )
Proceeds from the sale of investment securities 141,709,658 25,905,769
Purchase of interest in investment partnership, net (1,804,217 ) --
Proceeds from sale of real estate owned 1,839,977 1,816,522
Acquisitions of and improvements to real estate owned (333,435 ) (1,584,300 )
Purchase of property and equipment (817,785 ) (118,364 )
Security deposits held (11,416 ) 5,616
Principal disbursements for mortgages receivable (154,810,007 ) (68,029,798 )
Principal collections on mortgages receivable 90,463,016 37,859,270
Costs in connection with investment activities (281,191 ) --
NET CASH USED FOR INVESTING ACTIVITIES (84,941,629 ) (41,361,462 )
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from line of credit 2,000,511 12,080,569
Repayment of mortgage payable (767,508 ) (12,296 )
Principal payments on notes payable (17,184 ) (15,303 )
Dividends paid on Common Stock (8,778,392 ) (5,308,152 )
Dividends paid on Preferred Stock (932,089 ) --
Financings costs incurred (450,651 ) (108,353 )
Proceeds from other loans -- 257,845
Proceeds from issuance of common shares, net of expenses 30,884,022 --
Proceeds from issuance of Series A Preferred Stock, net of expenses 45,462,626 --
Gross proceeds from issuance of fixed rate notes -- 14,363,750
Financings costs incurred in connection with fixed rate notes -- (743,908 )
NET CASH PROVIDED BY FINANCING ACTIVITIES 67,401,335 20,514,152
NET DECREASE IN CASH AND CASH EQUIVALENTS (165,712 ) (13,457,864 )
CASH AND CASH EQUIVALENTS- BEGINNING OF YEAR 19,408,028 18,841,937
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 19,242,316 $ 5,384,073

SACHEM CAPITAL CORP.
STATEMENTS OF CASH FLOW (Continued)
(unaudited)

Nine Months Ended
September 30,
2021 2020
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Interest paid $ 6,745,109 $ 2,093,080

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES

Real estate acquired in connection with the foreclosure of certain mortgages, inclusive of interest and other fees receivable, during the period ended September 30, 2020 amounted to $170,383.

COMTEX_396341894/2471/2021-11-04T08:30:27

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/zigman2/quotes/209233111/composite
US : U.S.: NYSE American
$ 5.50
-0.08 -1.43%
Volume: 594,844
Jan. 24, 2022 4:00p
P/E Ratio
12.86
Dividend Yield
8.73%
Market Cap
$176.10 million
Rev. per Employee
$1.55M
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