Management described as 2025 “Year of Stability” Focused on preserving capital, enhancing liquidity and improving credit quality, and reported GAAP net income. 6.3 million dollars (Net income to common shareholders 1.8 million dollarsor $0.04 per share) against last year’s loss.
Non-performing loans in total 117.6 million dollars At year-end, but subsequent to year-end actions – including the acquisition of Naples Condo Corporation at approximate net book value 39.9 million dollars – almost moved 40 million dollars In and around development estates 12 million dollars Back to doing, with management has minimal expectations 50 million dollars Reduction in NPLs.
Management changed the capital structure by exporting 100 million dollars of senior secured notes (≈90 million dollars Marked 9.875%), repayment of unsecured debt and termination of the Churchill facility, extension 50 million dollars Needham Revolver until March 2028, and finished the year 10.9 million dollars Around the coverage of liabilities to cash and assets 1.61x.
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Sachem Capital (NYSEAMERICAN: SACH) executives used the company’s fourth-quarter and full-year 2025 earnings to describe 2025 as a “stabilization year” following portfolio realignment measures in 2024, with management’s emphasis on balance sheet liquidity, improving AP quality to improve credit quality.
CEO John Villano said the company’s focus through 2025 was to “preserve capital, enhance liquidity and improve the overall credit quality of our portfolio,” positioning the mortgage REIT for what he described as “disciplined growth” in 2026. Interest income and net interest margin, the change is called “presentation only” with no impact on reported net income or shareholders’ equity.
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As of December 31, 2025, Sachem held 115 loans for investment with an aggregate gross principal balance of $377.4 million. During 2025, the company made approximately $152.6 million in 30 loans and received approximately $162.7 million in loan repayments. The weighted average contractual interest rate, including default interest, was 13.1% at year-end, and according to management, the weighted average remaining period was eight months.
Non-performing loans (NPLs) remain a major focus. Villano said the unpaid principal balance included in loans purchased for investments was about $117.6 million at year-end, up $30.5 million from $87.1 million last year. While higher than historical levels, he said actions taken in the past year were aimed at “positioning the portfolio to accelerate solvency performance for the coming quarters” by turning legacy assets back into liquidity and redeploying capital to new startups.
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The company’s collateralized property mix at year-end was about 54% residential, 29% commercial, 12% mixed-use, and 5% land, with a geographic focus by prominent principals in Connecticut (42%) and Florida (14%), Wallraven said.
Real estate owned (REO) decreased by $2.2 million, or 11.7%, during 2025, while the company continued to add assets through closing projections that it is positioned to monetize. REO collected $16.4 million on 14 properties at year’s end.
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Management highlighted a significant fourth quarter disposition: the sale of the Westport, Connecticut office asset. Villano said the sale generated net income of approximately $19.9 million and a book gain of $4 million. In the Q&A, Wallraven said the property was purchased and remodeled in 2023, and that a tenant eventually offered to buy the building, which resulted in the acquisition.
During 2025, Sachem converted $22.1 million of loan principal to REO through foreclosure, Wallraven reported.
Executives also provided an update on Legacy Naples, Florida’s opening from 2021. Villano said that after year-end, Sachem acquired 100% of the membership interest in the company that owns the condominium assets tied to the prior loan at approximate net book value, at a valuation or loss of $39.9 million. The company now directly controls three completed condominium units and a southern parcel that was approved for four additional units, and Urban Capital, the company’s asset management platform, is responsible for actively managing and monetizing the assets over the next 18 to 24 months, depending on market conditions.
In addition, Villano said the company maintained its $12.3 million first mortgage on a separate waterfront parcel as a senior secured lender, which management describes as simplifying the capital structure and clarifying execution.
During the Q&A, management clarified the impact on the non-earnings category. Of the nearly $50 million tied up in Naples, about $40 million was channeled into developing real estate investments, while a little over $10 million was channeled back into loans, Wallraven explained. The Naples amounts were previously classified as non-earnings and “are no longer classified as non-earnings,” he said, noting that the acquisition and related adjustments occurred after year-end.
Asked for an updated snapshot, Wallraven said that if starting from the current outlook of the $117 million in non-earnings reported at the end of the year, that balance would fall to $40 million related to the purchased Naples asset and another $12 million in debt that would go into non-performing status during the quarter. He also said there were other resolutions, adding that the non-performing loan balance would be “at least $50 million less” than year-end levels, with additional resolutions expected.
For the full year 2025, Wallraven reported net interest income of $11.7 million, down from $20.5 million in 2024. Net interest margin was 3.1% compared to 4.4% in 2024. Wallraven attributed the decline in margins to a higher cost of capital after refinancing activity, lower loan yields and lower loan yields. He said yields remained strong on performing loans—12% in 2025 compared to 11.8% in 2024—but overall margin compression reflected balance sheet shrinkage and capital structure realignment.
Total operating expenses were $13.1 million, down from $15.7 million. Compensation and benefits increased to $7.6 million due to strategic hires, while general and administrative expenses decreased to $6.5 million. Impairment on REO increased to $1.1 million, which management said reflected updated valuations and revised timelines. Wallraven said the gain on the sale of real estate and development investments increased to $4.1 million, driven by “successful asset placement and increased regulatory activity.”
Seachem reported GAAP net income of $6.3 million after Series A preferred interest of $4.5 million. Net income attributable to common shareholders was $1.8 million, or $0.04 per share, compared to a loss of $0.93 per share in the prior year.
On the balance sheet, Wallraven said total assets were $460 million and liabilities were $285.1 million, about 1.61 times the assets-to-liabilities ratio. Cash at the end of the year was $10.9 million. Villano said debt represented approximately 61.4% of total capital at the end of the year.
Management described ongoing changes to the capital structure in 2025, including the issuance of $100 million of senior secured notes due 2030 and the repayment of matured unsecured notes. Unsecured notes decreased by $55.2 million year over year, repurchase agreements decreased by $33.7 million, and senior secured notes increased by $86.6 million, Wallraven said. The company also liquidated and paid off the Churchill facility during the fourth quarter. After year-end, management said it extended its $50 million Needham credit facility through March 2028, with an option to extend through 2029.
Regarding certain facilities, Wallraven said Needham Revolver has $19.0 million outstanding at a maximum of minus 50 basis points (6.5% at December 31, 2025) and $90 million of senior secured notes due 2030 at a fixed 9.875%. Management said it was compliant with agreements across facilities at year-end. In response to an analyst’s question, Wallraven said the secured note facility is $100 million, with $90 million.
Book value per common share was $2.46 at year-end, compared with $2.64 a year earlier, a 6.8% decrease. Walraven said the driver was that preferred and common cash dividends totaling $14 million in 2025 exceeded annual GAAP net income of $6.3 million, adding that the board evaluates the dividend level in terms of operating performance, liquidity, and long-term investment management. Management also noted that the first quarter 2026 dividend concept was announced on March 4, 2026, and reiterated its intended cadence to settle dividends in March, June, September, and December.
Regarding market conditions, Villano said short-term rates have come off their highs, but medium- and long-term borrowing costs remain high, inventories are stretched and home sales are below historical averages. He said the environment continues to drive startup activity and contribute to higher NPLs and REO across the industry, while creating opportunities for lenders to provide flexible capital where traditional financing remains limited.
In a Q&A, Villano said the company was “quite positive” on the lending market, describing its pipeline as “complete,” pricing attractive, and borrower quality as improving. He also said the company was looking at big debt amid “price cuts.”
Going forward, management reiterated priorities that include resolving non-performing loans and REO monetization, “disciplined high-return loans supported by strong collateral,” and proactively managing liquidity and future debt maturity. The CEO stated that the expected sources of liquidity to address the sustainability include debt repayments, REO financing, available capacity on credit facilities, and potential capital market activity as conditions permit.
Sachem Capital Corp (NYSEAMERICAN: SACH) is an externally managed, non-diversified closed-end managed investment trust that seeks to provide shareholders with current income and long-term capital appreciation. The trust is managed by Sachem Capital Management, LP, an affiliate of Sachem Wealth Management, and its shares trade on the NYSE American Exchange.
The Trust’s investment strategy focuses on a diversified portfolio of senior secured debt obligations, including first and second rate debt, mezzanine debt, high yield bonds and preferred.
The article “Sachem Capital’s Q4 earnings call highlights” was originally published by MarketBeat.
