Sachem Capital Corp. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with total revenue decreasing by 11.2% to $57.5 million, down from $64.7 million in 2023. The company experienced a net loss attributable to common shareholders of $43.9 million, a stark contrast to the net income of $12.1 million reported in the previous year. This loss was primarily driven by a $22.0 million realized loss on the sale of loans, a $26.9 million provision for credit losses, and a $4.9 million valuation allowance for loans held for sale. The earnings per share reflected this downturn, falling to a loss of $0.93 compared to a profit of $0.27 in 2023.
In terms of operational changes, Sachem Capital's loan portfolio saw a reduction in the number of loans held for investment, decreasing from 311 loans in 2023 to 157 loans by the end of 2024. The gross principal amount of loans held for investment also fell to $376.99 million from $499.24 million the previous year. The company funded $134.3 million in mortgage loans during 2024, a decrease from $204.9 million in 2023, while loans repaid increased to $190.97 million from $167.04 million. The company also sold 32 loans with an aggregate unpaid principal balance of $55.8 million, generating approximately $36.1 million in net proceeds.
Strategically, Sachem Capital has shifted its focus towards larger loans, which it believes are secured by higher-quality properties and are being developed by more stable borrowers. This strategy aims to mitigate future problem loans. The company has also enhanced its underwriting guidelines to strengthen its documentation and collateral positions. As of December 31, 2024, the company maintained a leverage ratio of 62.0% debt to 38.0% equity, a slight increase from 60.4% debt to 39.6% equity in 2023.
Looking ahead, Sachem Capital's management expressed uncertainty regarding its ability to return to profitability in 2025, citing ongoing challenges in accessing capital markets and the impact of economic conditions on its operations. The company has reduced its dividend payments to shareholders, reflecting its need to conserve cash amid declining revenues and increased credit loss provisions. The outlook remains cautious as the company navigates these financial challenges while attempting to stabilize its operations and maintain its status as a real estate investment trust (REIT).
About Sachem Capital Corp.
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