Exhibit 99.1
Investor Presentation November 2018
2 Forward Looking Statement This presentation includes forward - looking statements . All statements in this presentation, other than statements of historical facts, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward - looking statements . The words “anticipate,” “estimate,” “expect,” “project,” “plan,” “seek,” “intend,” “believe,” “may,” “might,” “will,” “should,” “could,” “likely,” “continue,” “design,” “expectation,” and the negative of such terms and other words and terms of similar expressions are intended to identify forward - looking statements . We have based these forward - looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short - term and long - term business operations and objectives and financial needs . These forward - looking statements are subject to a number of risks, uncertainties and assumptions, some of which cannot be quantified and some of which are beyond our control . In light of these risks, uncertainties and assumptions, the forward - looking events and circumstances discussed in this presentation may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward - looking statements . You should not rely upon forward - looking statements as predictions of future events . Although we believe that the expectations reflected in the forward - looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements . In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward - looking statements . We disclaim any duty to update any of these forward - looking statements after the date of this presentation to confirm these statements in relationship to actual results or revised expectations . All forward - looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this presentation . You should evaluate all forward - looking statements made by us in the context of these risks and uncertainties .
Management Team ▪ Co - founder and Chairman, Co - Chief Executive Officer, Chief Financial Officer and Secretary. ▪ Co - founder of Sachem Capital Partners (“SCP”), and co - founder and Managing Partner of JJV, LLC, manager of SCP since its inception in December 2010. ▪ Mr. Villano, a certified public accountant, was previously engaged in private practice for over 30 years performing accounting, auditing and tax preparation services. ▪ Mr. Villano’s responsibilities include oversight of all aspects of business operations, including loan origination and servicing, investor relations, brand development and business development. ▪ Also responsible for the direction and oversight of all financial and accounting matters. ▪ Mr. Villano holds a Bachelor’s Degree in Accounting from the University of Rhode Island. . John L. Villano, CPA Jeffrey C. Villano ▪ Co - founder and Co - Chief Executive Officer, President and Treasurer. ▪ Co - founder of SCP, and co - founder and Managing Partner of JJV, LLC, manager of SCP since its inception in December 2010. ▪ Mr. Villano’s responsibilities include oversight of all aspects of our business operations, including loan origination and servicing, investor relations, brand development and business development. ▪ Mr. Villano received an Associate’s Degree from Eastern Connecticut State University. 3
Overview 4 ▪ Connecticut - based real estate finance company o Specializing in originating, underwriting, funding, servicing and managing a portfolio of short - term (“hard money”) loans o Loans secured by first mortgage liens ▪ Since inception in 2010 through September 30, 2018 Sachem has made approximately 832 loans o Aggregate original principal amount of $155.8 million ▪ As of September 30, 2018, the loan portfolio consisted of 395 loans o Aggregate outstanding principal balance of approximately $77.8 million ▪ Loans range in size from $6,000 to $2.0 million. ▪ Paying regular quarterly dividends o Plan to distribute at least 90% of our taxable income to shareholders annually Primary goal is to grow the loan portfolio while preserving capital and provide investors with above - market risk adjusted returns .
Business Model 5 ▪ Grow first mortgage loan portfolio while protecting and preserving capital ▪ Provide investors with risk adjusted returns through dividends and capital appreciation ▪ Disciplined underwriting and extensive due diligence culture focusing primarily on value of underlying collateral as well as the borrower and its principals ▪ Intimate knowledge of Connecticut real estate market and ability to respond quickly to customer needs and demands ▪ Structure mortgage loans to fit needs and business plans of borrowers » Acquire and/or renovate existing residential real estate properties » Acquire vacant real estate and construct residential real estate properties » Purchase and hold income producing properties ▪ Loans are secured by first mortgages on real estate and personally guaranteed by borrower ▪ Revenue is generated from interest borrowers pay on loans as well as fee income generated from origination, processing and extension of loans
Loan Structure Principal Amount $6,000 to $2.0 million (maximum loan amount cannot exceed 10% of portfolio) Loan - to - Value Ratio Up to 70% Interest Rate Fixed rate between 5.0% (note purchased at discount) and 12.5% with a default rate of 18%. Average portfolio yield 12.48% Origination 2% - 5% for one - to - three year loans Portfolio average as of 09/30/2018: 3.00% Average on loans funded in Q3 2018: 2.70% Terms One to three years Prepayments No prepayment penalty Payment Terms Interest payable monthly with principal payable at maturity 6
Loan Amount Number of Loans Aggregate Principal Amount $100,000 or less 132 $9,002,827 $100,001 to $250,000 182 28,625,922 $250,001 to $500,000 63 22,156,355 $500,001 to $1,000,000 10 6,869,834 Over $1,000,000 8 11,150,371 Total 395 $77,805,309 Mortgage Loan Portfolio as of September 30, 2018 ▪ Approximately 80% of the loans had an original principal amount of $250,000 or less. ▪ Approximately 95% of the loans had an original principal amount of $500,000 or less. ▪ The average loan size was approximately $197,000 and the median loan size was approximately $136,000. 7
Sources of Capital As of September 30, 2018 Debt Line of Credit Mortgage Payable $27,260,147 293,566 Total Debt $27,553,713 Other Liabilities 1,684,336 Capital (equity) 55,794,781 Total sources of capital $85,032,830 Assets Mortgage receivable $77,805,309 Other assets 7,227,521 Total assets $85,032,830 8 Sources of Capital as of September 30, 2018
Nine Months ended September 30, Years Ended December 31, 2018 2017 2016 Principal amount of loans earning interest $77,805,309 $63,270,959 $33,750,610 Loans originated in period $37,278,346 $53,468,949 21,580,103 Total revenue $8,810,066 $6,996,877 $4,133,495 Total operating costs and expenses $2,675,451 $2,136,029 $1,082,868 Number of loans outstanding 395 337 217 Average outstanding loan balance $196,975 $187,748 $155,533 Net Portfolio Rate of Return (1) 12.48% 12.08% 12.23% Weighted average term to maturity (in months) (2) 12 12 18 9 (1) Does not include origination fees (2) Without giving effect to extensions Loan Portfolio
As of September 30, As of December 31, 2018 2017 2016 Developer – Residential Mortgages $52,432,930 $43,855,827 $21,343,927 Developer – Commercial Mortgages 19,326,891 12,480,612 9,049,942 Land Mortgages 5,342,393 6.676,060 3,149,602 Mixed Use 703,095 258,460 207,139 Total Mortgages Receivable $77,805,309 $63,270,959 $33,750,610 Loan Portfolio 10
▪ Capitalize on opportunities created by the long - term structural changes in the real estate lending market and the continuing limited liquidity in the commercial and investment real estate markets ▪ Take advantage of the prevailing economic environment as well as economic, political and social trends that may impact real estate lending ▪ Remain flexible in order to capitalize on changing sets of investment opportunities that may be present in the various points of an economic cycle ▪ Operate so as to qualify as a REIT and for an exemption from registration under the Investment Company Act ▪ Capitalize on competitor policies that inhibit borrower’s repeat business ▪ Enhance marketing efforts that focus on borrower retention and acquisition Strategy 11
Portfolio Performance Year Ended 2016 Year Ended 2017 Change (`17 vs `16) Nine Months Ended 9/30/17 Nine Months Ended 9/30/18 Change (`18 vs `17) Total Assets $38,369,421 67,494,537 75.9% $56,875,005 $85,032,830 49.5% No. of loans in Portfolio 217 337 55.3% 311 395 27.0% Principal Amount of Loans in Portfolio $33,750,610 $63,270,959 87.5% $52,693,657 $77,805,309 47.7% Interest Income $3,648,427 $5,434,502 49.0% $3,831,636 $6,610,273 72.5% Gross Origination Fee Income (1) $824,008 $1,735,023 111% $1,159,216 $1,095,123 - 5.9% Wtd . Average Contractual Interest Rate (2) 12.23% 12.08% - 1.2% 12.13% 12.48% - 0.29% Foreclosures In Process 1 12 1200% 5 11 120% Loan Principal Paid Off $14,861,360 $23,948,601 61.2% $14,849,831 $20,958,280 41.2% 12 (1) Origination Fees net of manager compensation and deferred origination fees were $197,378, $802,264 and $97,461 and $348, 548 (deferred origination fees only) for the years ended 2016 and 2017 and three months ended March 31, 2017 and 2018, respectively. Prior to the completion of Sachem’s IPO, 75% of g ros s origination fees were paid to JJV, LLC, SCP’s managing member. Accordingly, for the 2016 period and, roughly, the first half of the 2017 period, net origination fee income is net of the amounts payable to JJV and other adjustments. From and after February 9, 2017, JJV is no longer entitled to any payments from Sachem (other than dividends paid to it in its capacit y a s a shareholder of Sachem). (2) Weighted average contractual interest rate does not include origination fee income.
Annual Interest Income Growth 13 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 2012 2013 2014 2015 2016 2017 2018* • 9/30/18 annualized
14 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 % Change 2018 2017 % Change Interest income from loans $2,272,100 $1,570,877 44.6% $6,610,273 $3,831,636 72.5% Total revenue $3,051,124 $1, 938,930 57.4% $8,810,066 $4,745,973 85.6% Total operating costs and expenses $1,088,460 $621,043 75.3% $2,675,451 $1,574,658 69.9% Net income $1,962,664 $1,317,887 48.9% $6,134,615 $3,171,315 93.4% Financial Highlights
Dividends Paid 15 Quarter Dividend Yield Q2 2017 $0.105 8.75% Q3 2017 $0.105 9.40% Q4 2017 $0.105 11.20% Q1 2018 $0.105 12.50% Q2 2018 $0.110 12.00% Q3 2018 $0.120 11.51% Dividend Paid YTD 2018 $4.9 million Net Income YTD 2018 $6.1 million Plan to distribute 90+% of taxable income to shareholders annually
Investment Highlights x Internally managed, with co - founders owning approximately 20% of the company, aligning management’s interests with equity investors x Strong asset level return with nominal leverage and low cost structure generates attractive risk adjusted return on equity x Experienced management team with intimate knowledge of the Connecticut and surrounding area real estate market x Significant demand for real estate loans under $500k in Connecticut and surrounding areas as traditional lenders are unable to satisfy demand x Disciplined lending x Vertically - integrated loan origination platform x Increased flexibility to structure loans to suit the needs of our clients x History of successful operations, annual interest income growth and profitability. 16
Key Statistics 17 Ticker: SACH Exchange: NYSE Amer Share Price (9/28/18): $4.17 Shares Outstanding (9/30/18): 15.4 M Market Cap (9/28/18): $64.3M Shareholders’ Equity (09/30/18): $55.8 M Dividends (TTM): $0.43/share Insider Ownership 21.7% Fiscal Year End: December 31
John L. Villano, CPA 23 Laurel Street Branford, CT 06405 203 - 433 - 4736 jlv@sachemcapitalcorp.com