Sachem Capital Corp., a real estate lender, announced its financial results for the year ended December 31, 2025.

Sachem Capital Corp. (NYSE American: SACH) (the "Company"), a real estate lender specializing in originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property, today announced its financial results for the year ended December 31, 2025.

John Villano, CPA, Sachem's Chief Executive Officer, commented, "We closed 2025 with strong momentum and a continued focus on disciplined capital allocation and balance sheet strength. We're taking decisive steps to address legacy exposures while positioning the company for meaningful value creation. As we move forward, we remain focused on originating high-quality, secured real estate loans under conservative underwriting standards, while driving profitable growth and operational excellence. With a strong balance sheet and experienced team, we believe we are well positioned to deliver attractive risk-adjusted returns and long-term shareholder value."

2025 Year in Review

During 2025, the Company focused on stabilizing its credit profile and strengthening its capital structure following the portfolio repositioning actions taken in 2024 and 2025. Key developments during 2025 included:

A significant reduction in credit-related charges compared to 2024, as provisioning reflected loan-specific adjustments rather than broad-based reserve recalibration.

No comparable large-scale loan sale losses, resulting in improved earnings comparability relative to the prior year.

Issuance of $100.0 million ($90.0 million drawn as of December 31, 2025) of Senior Secured Notes due 2030 bearing interest at 9.875%, which extended the Company's weighted average debt maturity profile and diversified funding sources.

Reduction of certain short-term borrowings and repayment of maturing unsecured notes, decreasing near-term refinancing concentration.

Successfully completed the sale of its office property located in Westport, Connecticut generating net cash proceeds of approximately $19.9 million and realized a book gain of approximately $4.0 million. The Westport asset was sourced, managed, and executed through Urbane Capital, the Company's in-house development and asset management platform.

Continued disciplined underwriting in a higher interest rate environment, resulting in moderated net loan originations and a focus on sponsor quality and collateral protection.

 

Results of operations for the year ended December 31, 2025

Net interest income was $11.7 million compared to $20.5 million in 2024. The decrease was primarily driven by lower interest income, as loan originations have moderated since peaking in June 2024, resulting in a lower average loan balance. Utilizing the average performing loans held for investment balance for the year ended December 31, 2025 of $269.3 million, the effective interest rate on loans held for investment for the year ended December 31, 2025 was 12.0%. Comparatively, utilizing the average performing loans held for investment balance for the year ended December 31, 2024 of $366.6 million, the effective interest rate on loans held for investment for the year ended December 31, 2024 was 11.8%.

The Company's net interest margin for the year ended December 31, 2025 was 3.1% as compared to 4.4% for the year ended December 31, 2024. Net interest margin represents net interest income, calculated as interest income less interest expense, expressed as a percentage of average loans outstanding for the applicable period. The 130 basis point decline in net interest margin reflects both structural and cyclical factors. Structurally, refinancing activity during the year increased the weighted average cost of capital. Cyclically, lower average earning assets and a higher concentration of nonaccrual loans reduced interest-earning balances.

Total other income remained relatively consistent year over year at $9.9 million for the year ended December 31, 2025 as compared to $9.4 million for year ended December 31, 2024, with underlying components shifting in composition rather than magnitude.

Total operating expenses for 2025 were $13.1 million compared to $15.7 million in 2024. Total operating expenses declined year over year due to lower credit-related charges and improved expense discipline relative to portfolio size.

Compensation and employee benefits were $7.6 million, an increase of $0.8 million compared to $6.8 million in 2024, reflecting strategic additions to personnel and performance-based compensation adjustments as management continues to align staffing levels with portfolio scale and operational complexity.

General and administrative expenses were $6.5 million, a decrease of $0.3 million from $6.8 million in 2024, primarily due to reduced professional fees and a continued focus on cost management following the prior year's market slowdown.

Impairment loss on real estate owned totaled $1.1 million, compared to $0.5 million in 2024, representing an increase of $0.6 million related to specific property-level valuation adjustments based on updated market data and revised liquidation timelines.

Gain on sale of investments in developmental real estate, real estate owned and property and equipment, net was $4.1 million, compared to $0.4 million in 2024, reflecting gains realized on the disposition of select real estate assets and developmental projects driven by improved value creation execution relative to carrying value and successful asset repositioning, whereas the prior year included more limited disposition activity.

 

Net income attributable to common shareholders for 2025 was $1.8 million, or $0.04 per common share, compared to net loss attributable to common shareholders of $43.9 million, or $0.93 per common share for 2024.

Balance Sheet

As of December 31, 2025, total assets were $460.0 million compared to $492.0 million as of December 31, 2024 and total liabilities were $285.1 million compared to $310.3 million as of December 31, 2024.

Total indebtedness at December 31, 2025 was $277.8 million. This includes: $171.3 million of unsecured notes payable (net of $1.9 million of deferred financing costs), $86.6 million of senior secured notes payable (net of $3.4 million of deferred financing costs), $19.0 million outstanding on a $50.0 million revolving credit facility and $0.9 million of outstanding principal on a loan secured by a mortgage on the Company's office building.

Total shareholders' equity as of December 31, 2025 was $174.9 million compared to $181.7 million as of December 31, 2024.

Book value per common share

Book value per common share as of December 31, 2025, was $2.46, compared to book value per common share as of December 31, 2024 of $2.64. This change is primarily due to aggregate cash dividends declared and paid for the year ended December 31, 2025 on issued and outstanding common shares and shares of Series A Preferred Stock totaling $14.0 million, partially offset by net income for the year ended December 31, 2025 of $6.3 million. The change is also impacted by an increase in the liquidation preference amount for the Series A Preferred stock as we issued 6,010 shares during the year ended December 31, 2025, as well as an increase in common shares outstanding of approximately 720,000 shares.

Dividends

The Company currently operates and qualifies as a Real Estate Investment Trust (REIT) for federal income tax purposes and intends to continue to qualify and operate as a REIT. Under federal income tax rules, a REIT is required to distribute a minimum of 90% of taxable income each year to its shareholders, and the Company intends to comply with this requirement for the current year.

Over the course of 2025, the Company paid an aggregate of $4.5 million in dividends to holders of its Series A Cumulative Redeemable Preferred Stock and $9.5 million to the holders of its common shares.

Investor Conference Webcast and Call

The Company is hosting a webcast and conference call Friday, March 13, 2026 at 8:00 a.m. Eastern Time, to discuss its financial results for the year ended December 31, 2025 in greater detail.

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