Sachem Capital Corp. (NYSE MKT:SACH) Q1 2020 Earnings Conference Call - Final Transcript

May 12, 2020 • 08:00 am ET


Sachem Capital Corp. (NYSE MKT:SACH) Q1 2020 Earnings Conference Call - Final Transcript


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Q & A

Thank you. The floor is now open for question. [Operator Instructions]. We'll take our first question from Ben Zucker with Aegis Capital. Please go ahead. sir.

Ben Zucker

Hi, good morning, guys. Thanks for taking my questions. I guess I'll start off with -- the portfolio growth is actually quite impressive. That might have been a quarterly record of originations, which definitely caught me off guard. I wasn't expecting such a robust level of activity there. So that was an impressive job putting capital to work. I guess just looking at the overall market, I mean, what's kind of the level of activity, the pace at which deals are still being done? I imagine a lot of people are out of the market. Your people still are being extra sensitive. So kind of what's the state of the market? Are things happening? Or is everything just kind of in a standstill and waiting to see how things evolve, John?

John L. Villano

Well. Good morning, Ben and this is a great question. The lending market has kind of been turned upside down here. We are extremely busy. And as you heard, we're very cautious. We're lending slowly, prudently. We have new lending guidelines, and we are finding loans that meet the guidelines. And we're stepping in where deals may have as they say died at the closing table. And we are not -- our pricing our -- mortgage pricing has not been affected. And in fact, where we were getting interest rate compression just two and three months ago, that really hasn't been a topic of conversation here for the past two months. In-house, we have many many millions of dollars of loan requests. We queue them. And it's kind of -- if we're able to collect some payoff money or a couple of our borrowers can refinance, we have capital and we go to work and closing loans. We are trying to maintain a minimum cash balance at this time. And time will tell, right?

If you -- and I think you were on my 10-K call, and my initial worry was my ACH payments for April 1. I was terrified. They turned out fine. Our ACH payments for May 1 turned out fine, right? But -- we have a closing on a piece of REO in a couple of weeks two weeks maybe, maybe even a week. I'm expecting the borrower I was expecting the borrower to call and expect pricing concessions. Guess what, didn't happen. So I'm starting to feel a bit better. My big concern, Ben, is what all the work here. It's not the volume of business. That's going to be there. And it's what I don't know right now. What kind of damage has been done to our existing borrowers? And let me just talk a second about the 42 forbearance requests. Real quick, that number went from 0 point 42. Of the 42, we have closed approximately 7 or 8. The rest are on hold. So that means 1