Sachem Capital Corp. has filed its Form 10-Q for the quarter ended March 31, 2024, reporting its financial results. The company’s financial statements, including balance sheets, statements of comprehensive income, changes in shareholders’ equity, and cash flows, are unaudited. Management’s discussion and analysis of financial condition and results of operations, as well as quantitative and qualitative disclosures about market risk, are also included in the filing.
Company Overview
We are a real estate finance company that specializes in short-term loans secured by properties. We started in 2010 as a limited liability company and became a real estate investment trust (REIT) in 2017. As a REIT, we don’t pay corporate taxes on income we distribute to shareholders.
First Quarter Review and Outlook
Metric | Q1 2024 | Q1 2023 | Change |
---|---|---|---|
Revenue | $17.2 million | $14.7 million | +17.0% |
Net Income | $3.6 million | $4.2 million | -13.0% |
Earnings Per Share | $0.08 | $0.10 | -$0.02 |
Revenue increased due to higher interest rates we can charge borrowers. However, expenses also increased significantly, lowering net income. We expect continued high interest rates and expenses for 2024.
Our strategy is to grow our loan portfolio while protecting capital to provide attractive returns for shareholders. We aim to do this by:
Challenges
Major challenges we face in 2024:
Despite the challenges, we see opportunities in real estate lending due to lack of liquidity and our flexible loan products.
Financing Strategy
We use debt financing to grow our loan portfolio and increase potential returns. We have credit facilities, loans secured by our securities portfolio, and notes offerings. We may take on more leverage depending on market conditions, but currently have 60.3% debt-to-equity ratio compared to 59.9% last year.
We intend to maintain leverage and reduce borrowing costs to grow while satisfying requirements as a REIT.
Results of Operations
Q1 2024 vs. Q1 2023
Liquidity and Capital Resources
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contractual Obligations
Our major contractual obligations are commitments to fund construction loans and investments in partnerships.
Type | Total | Less than 1 year | 1-3 years |
---|---|---|---|
Construction Loans | $95.5 million | $61.2 million | $34.2 million |
Partnerships | $2.4 million | $2.4 million | - |
In summary, the report covers the company’s performance, strategies, challenges, financial position, and obligations in an accessible way for general audiences. Key metrics and data are presented in tables. The analysis aims to communicate important details without overly technical terminology.