Sachem Capital Corp. Reports 2025 Full-Year Earnings: Return to Profitability, Strategic Portfolio Actions, and Strengthened Balance Sheet

Key Highlights

• Return to Profitability: Net income attributable to common shareholders was \$1.8 million (\$0.04 per share) versus a net loss of \$43.9 million (\$0.93 per share) in 2024.
• Reduction in Credit-related Charges: Credit provisioning reflected loan-specific adjustments and no large-scale loan sale losses, supporting improved earnings comparability.
• Strengthened Capital Structure: Issued \$100 million in Senior Secured Notes due 2030 at 9.875% interest, with \$90 million drawn at year-end, extending average debt maturity and diversifying funding.
• Asset Sales: Sold Westport, Connecticut office property, generating \$19.9 million in net cash proceeds and \$4 million book gain.
• Disciplined Loan Origination: Continued conservative underwriting, moderating net loan originations and emphasizing sponsor quality and collateral protection amid higher rates.
• Dividend Payments: Aggregate \$14 million dividends paid in 2025 (\$4.5 million to Series A Preferred, \$9.5 million to common shareholders).

Detailed Financial Review

Sachem Capital Corp., a real estate lender specializing in short-term, secured loans for real estate investors, reported its full-year financial results for 2025. The company returned to profitability in 2025, signaling a turnaround after a challenging 2024 marked by significant losses and portfolio repositioning.

Net Interest Income: Net interest income was \$11.7 million, down from \$20.5 million in 2024, driven by lower interest income following reduced loan originations since mid-2024. The average performing loan balance for 2025 was \$269.3 million, with an effective interest rate of 12.0%, marginally higher than 11.8% in 2024 (average balance \$366.6 million).

Net Interest Margin: Net interest margin dropped to 3.1% from 4.4% in 2024, a 130 basis point decline attributed to increased cost of capital from refinancing and higher nonaccrual loan concentrations.

Other Income: Total other income was steady at \$9.9 million, with changes in underlying components rather than overall magnitude.

Operating Expenses: Operating expenses declined to \$13.1 million (vs. \$15.7 million in 2024), due to improved expense discipline and lower credit charges. Notably:

• Compensation and benefits rose to \$7.6 million (up \$0.8 million), reflecting strategic personnel additions and performance-based adjustments.
• General and administrative expenses fell to \$6.5 million (down \$0.3 million), primarily from reduced professional fees and cost management.
• Impairment loss on real estate owned increased to \$1.1 million (up \$0.6 million), reflecting updated property valuations and revised liquidation timelines.
• Gain on sale of investments in developmental real estate, real estate owned, and property/equipment was \$4.1 million, up sharply from \$0.4 million in 2024, due to successful asset repositioning and improved execution.

Balance Sheet: As of December 31, 2025, total assets were \$460.0 million (down from \$492.0 million at year-end 2024), and total liabilities were \$285.1 million (vs. \$310.3 million). Shareholders’ equity declined to \$174.9 million from \$181.7 million, primarily due to dividend payments and an increase in preferred shares outstanding. Book value per common share was \$2.46, down from \$2.64.

Debt and Liquidity:

• Total indebtedness: \$277.8 million, including \$171.3 million unsecured notes, \$86.6 million senior secured notes, \$19 million on a \$50 million revolving facility, and \$0.9 million mortgage.
• The company reduced short-term borrowings and repaid maturing unsecured notes, decreasing near-term refinancing risk.

Strategic Actions and Outlook

Management emphasized a disciplined approach to capital allocation and balance sheet management, addressing legacy exposures while focusing on originating high-quality, secured loans under conservative standards. The sale of the Westport office property, sourced and managed through Urbane Capital (in-house platform), generated significant cash and a notable book gain. The company’s ongoing commitment to conservative underwriting and operational discipline is expected to position Sachem Capital for long-term value creation.

The issuance of long-term senior secured notes notably extends debt maturity and diversifies funding, which is a positive for liquidity and stability.

Dividend Policy and REIT Status

Sachem Capital operates and qualifies as a Real Estate Investment Trust (REIT), requiring it to distribute at least 90% of taxable income to shareholders. In 2025, it paid \$4.5 million in dividends to Series A Preferred shareholders and \$9.5 million to common shareholders, demonstrating continued commitment to shareholder returns.

Noteworthy and Potentially Price-Sensitive Information

• Return to Profitability: The swing from a \$43.9 million loss in 2024 to a \$1.8 million profit in 2025 is significant and may positively affect share price sentiment.
• Reduction in Credit Charges: Lower provisioning and absence of large-scale loan losses signal improved credit quality.
• Strategic Asset Sale: The \$19.9 million cash proceeds and \$4 million book gain from the Westport office sale improve liquidity and demonstrate effective asset management.
• Long-Term Debt Issuance: The \$100 million senior secured notes issuance strengthens the company’s financial footing and reduces refinancing risk.
• Dividend Payments and REIT Compliance: Continued dividend payments reinforce Sachem’s commitment to shareholder returns and its REIT status.
• Book Value Decline: Book value per share declined, primarily due to dividend distributions and increased preferred shares, which may be a concern for value-focused investors.

Investor Event

Sachem Capital will host a webcast and conference call on March 13, 2026, at 8:00 a.m. Eastern Time to discuss these results in detail. The call and replay will be accessible via the company’s website and dedicated phone lines.

Company Profile

Sachem Capital is a mortgage REIT focused on short-term, secured lending to real estate investors, primarily for acquisition, renovation, development, and improvement of residential and commercial properties. Its loans are secured by first mortgages and often personally guaranteed by borrowers’ principals. The company also makes opportunistic real estate purchases and manages assets through its Urbane Capital platform.

Forward-Looking Statements Disclaimer

Disclaimer: This article contains forward-looking statements based on the company’s current expectations, projections, and assumptions. Actual results could differ materially due to risk factors, uncertainties, and assumptions outlined in Sachem Capital’s SEC filings. Readers should not rely on these statements as guarantees of future performance. Sachem Capital disclaims any obligation to update forward-looking statements.

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