Investor Presentation September 2019 Forward Looking Statement - PowerPoint PPT Presentation

Investor Presentation September 2019

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 our actual operating and financial 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. 1

Management Team § Co-founder and Chairman, Co-Chief Executive Officer, Chief Financial Officer and John L. Villano, Secretary CPA § 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 § Co-founder and Co-Chief Executive Officer, President and Treasurer Jeffrey C. § Co-founder of SCP, and co-founder and Managing Partner of JJV, LLC, manager of SCP Villano since its inception in December 2010 § Mr. Villano’s responsibilities include oversight of all aspects of 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 2

Sachem Capital Corp. Overview § Sachem Capital Corp. is a mortgage REIT specializing in originating, underwriting, funding, servicing and managing a portfolio of short-term, high yielding real estate loans conservatively secured by first lien mortgages § Since inception in 2010 through June 30, 2019 Sachem has made over 1,000 loans with an aggregate original principal amount of $198.0 million § With the aging housing stock and lack of bank financing, there is significant demand for business-purpose real estate loans that is not being met by traditional lenders § Sachem has grown its loan portfolio from $33.8 million at year-end 2016 to $83.5 million at June 30, 2019 § Headquartered in Branford, CT with 14 employees Q2 2019 L OAN P ORTFOLIO (1) T OTAL L OAN P ORTFOLIO K EY S TATISTICS (1) ($ in millions) Ticker: SACH 100,000 Land Mixed Use Exchange: NYSE American Mortgages 1.8% 7.3% 80,000 Share Price (3) : $4.81 Commercial Shares Outstanding (2) : 21.57 million 60,000 Mortgages 23.5% Market Cap (3) : $103.75 million Residential 40,000 Mortgages Shareholders’ Equity: $69.4 million 67.4% 20,000 Dividends (TTM): $0.53 / share 0 Insider Ownership: 15.3% 2016 2017 2018 H1 2019 (1) As of 6/30/2019 (2) As of 8/12/2019 (3) As of 8/27/2019 3

Investment Highlights ü Internally managed, with co-founders owning approximately 15.3% of the company, aligning management’s interests with investors ü High yielding assets and low cost structure generates attractive risk adjusted return on equity ü Conservative leverage profile ü Experienced management team with intimate knowledge of the Connecticut and surrounding area real estate market ü Significant demand for business purpose real estate loans that traditional lenders are unable to satisfy ü Disciplined underwriting process with thorough collateral and borrower analysis with no net realized losses since IPO ü Vertically-integrated loan origination platform allows for flexibility to structure loans that cater to the needs of clients ü Long track record of successful operations with positive total returns generated for shareholders Ø Since its IPO, Sachem has paid regular quarterly dividends and plans to distribute 90% of the Company’s taxable income to shareholders 4

Aging U.S. Housing Stock § The fix-and-flip market will remain robust as the aging U.S. housing stock requires renovation and updating § Aging inventory stokes demand for remodeled homes Ø Recently, the median age of housing stock has increased each year by approximately 0.9 year Ø Many homebuyers lack the desire or expertise to renovate a home and would prefer to buy a recently-renovated home M EDIAN A GE OF H OUSING S TOCK A MONG O WNER -O CCUPIED H OMES 40 38 36 Median Housing Unit Age 34 32 30 28 26 24 22 20 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: RealtyTrac, U.S. Census 5

Fix-and-Flip Activity Growing V ALUE OF U.S. H OMES F LIPPED AND R ELATED F INANCING A RE G ROWING P ERCENTAGE OF U.S. F IX - AND -F LIP H OMES F INANCED ($ in billions) 35% $70 100% $61 29% 30% $60 $57 28% $52 23% 24% 25% $50 $46 $44 21% 20% 21% $41 19% 18% 20% $40 $37 $36 $34 16% $30 15% $30 10% $20 5% $10 0% $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: ATTOM Data Solutions 6

Robust Business Model § § Structure mortgage loans to fit needs and Grow first mortgage loan portfolio while business plans of borrowers: protecting and preserving capital § Disciplined underwriting and extensive due Acquire and/or renovate existing residential Ø real estate properties diligence culture focusing primarily on value of underlying collateral Acquire vacant real estate and construct Ø residential real estate properties § Intimate knowledge of Connecticut real Purchase and hold income producing Ø estate market and ability to respond quickly properties to customer needs and demands § Revenue is generated from interest on loans, § Loans are secured by first mortgages on real rental income on REO properties, and fee estate and personally guaranteed by the income generated from origination, principals of the borrowers processing, modifications and extension of loans § Continue to operate as a REIT and pay quarterly dividends to shareholders Through execution of its business plan, Sachem aims to provide investors with attractive risk adjusted returns 7

Key Strategic Initiatives Capitalize on opportunities arising from structural changes in the real estate lending market and continued limited liquidity Enhance marketing efforts Take advantage of the that focus on borrower prevailing positive economic retention and acquisition environment Remain flexible to capitalize Capitalize on competitor on changing investment policies that inhibit opportunities at various borrower’s repeat business points of the economic cycle 8

Typical Loan Structure § Average loan amount: $202,000; Median loan amount: $137,000 Principal § Range of $7,000 to $2.3 million Amount Maximum loan amount cannot exceed 10% of portfolio § Loan-to-Value Up to 70% § Fixed rate between 5.0% and 13.0% with a default rate of 18.0% § Interest Rate § Average portfolio yield of 12.83% 2.0% to 5.0% for one to three year loans § Origination Average on loans funded for the first half of 2019 is 2.4% § Terms One to three years § Prepayments No prepayment penalty § Payment Interest payable monthly with principal payable at maturity § Terms Sachem generates high yielding, short term business- purpose real estate loans that are not provided by traditional lenders 9