Core Points - Sunrise Realty Trust, Inc. (SUNS) declared a quarterly dividend of $0.30 per share for the quarter ending June 30, 2025, consistent with the previous quarter's dividend [2] - The dividend will be payable on July 15, 2025, to stockholders of record as of June 30, 2025 [2] - SUNS operates as an institutional commercial real estate lender, focusing on transitional CRE projects in the Southern United States [3] Company Overview - Sunrise Realty Trust, Inc. is a lender on the TCG Real Estate platform, providing flexible financing solutions primarily for transitional commercial real estate projects [3][4] - The company targets top-tier assets in established and rapidly growing Southern markets, aiming for near-term value creation [3][4] TCG Real Estate - TCG Real Estate comprises affiliated CRE-focused debt funds, including SUNS and Southern Realty Trust Inc., which provide financing for transitional CRE properties [4] - The focus is on properties that present opportunities for near-term value creation, particularly in Southern U.S. markets benefiting from economic growth [4]

Core Viewpoint - Sunrise Realty Trust, Inc. has expanded its senior secured revolving credit facility to $140 million with the addition of EverBank, enhancing its financial flexibility for growth opportunities in commercial real estate [1][3]. Group 1: Credit Facility Expansion - The credit facility now totals $140 million, with EverBank committing $50 million, and it remains expandable to $200 million under certain conditions [1][2]. - Proceeds from the credit facility will support unfunded commitments under existing loans, fund the commercial real estate loan pipeline, and provide general working capital [2]. Group 2: Company Strategy and Market Position - The expansion of the credit facility demonstrates the strength of the company's lending platform and the trust established with financing partners [3]. - The company focuses on transitional commercial real estate projects in the Southern United States, aiming for near-term value creation [4][5]. Group 3: Partner Institutions - EverBank's involvement signifies a commitment to providing customized loan structures that meet borrowers' specific needs [3][6]. - East West Bank, the original partner in the credit facility, is a significant player with total assets of $76 billion as of December 31, 2024 [7].

Core Insights - Sunrise Realty Trust, Inc. ("SUNS") has expanded its senior secured revolving credit facility to $90 million, following a new $40 million commitment from City National Bank of Florida (CNB) [1][2] - The credit facility is expandable to $200 million, subject to customary conditions and additional lender participation [1] - Proceeds from the credit facility will be utilized to fund SUNS' commercial real estate loan pipeline, support existing commitments, and provide general working capital [2] Company Overview - Sunrise Realty Trust, Inc. is an institutional commercial real estate lender focusing on transitional CRE business plans with potential for near-term value creation, primarily in the Southern United States [4] - The company is part of the TCG Real Estate platform, which includes affiliated CRE-focused debt funds [5] Financial Institutions Involved - City National Bank of Florida (CNB) is the second-largest financial institution in Florida, with over $26 billion in assets and a strong focus on commercial banking and real estate lending [6] - East West Bank, the Administrative Agent for the credit facility, has total assets of $76 billion and operates over 110 locations in the U.S. and Asia [7]

Financial Data and Key Metrics Changes - For the quarter ended 03/31/2025, the company generated distributable earnings of $0.31 per basic weighted average share, which was in the middle of the preannounced range [7] - The book value per share as of 03/31/2025 was $13.77, also in the middle of the expected range of $13.6 to $13.9 [8] - The company declared a dividend of $0.30 per share for March, which aligns with the distributable earnings guidance [9] - Net interest income for the quarter was $4.6 million, with GAAP net income at $3.1 million or $0.27 per share [16][17] Business Line Data and Key Metrics Changes - The TCG real estate platform originated $213 million in loans during the quarter, with SUNS committing $148 million and funding $110 million [12] - As of 03/31/2025, the SUNS portfolio had $352 million in commitments, with $233 million funded across 12 loans [17] - The weighted average portfolio yield to maturity was reported at 12.1% [17] Market Data and Key Metrics Changes - The company noted that banks have pulled back from the market, focusing on more liquid loans, which has created opportunities for alternative lenders like SUNS [11] - The current administration's tariff policy has introduced uncertainty in the real estate markets, but the company does not anticipate material impacts on project budgets or timelines at this time [12] Company Strategy and Development Direction - The company is focused on providing credit to sponsors of transitional commercial real estate projects in the Southern United States, emphasizing high-quality assets in growing markets [11] - The portfolio is expected to remain similar in composition, with a focus on well-located residential and mixed-use assets backed by experienced sponsors [14] - The company plans to execute an unsecured raise in the fourth quarter of the year, depending on market conditions [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about potential earnings growth in the second half of 2025 and into 2026, as construction loans in the current portfolio are expected to accelerate funding [9] - The company is monitoring the impact of tariffs on the residential housing market, particularly in Florida, but has not seen significant weakness yet [44] Other Important Information - The company has increased analyst coverage from one in 2024 to five currently, enhancing communication with investors [9] - The CECL reserve as of 03/31/2025 was approximately $158,000, representing seven basis points for loans at carrying value [17] Q&A Session Summary Question: Changes in loan pipeline - The loan pipeline has decreased from $1.4 billion to $800 million due to evolving deals, with a strong opportunity set as lenders pull back [20][21] Question: Dallas loan rate concerns - The Dallas loan aligns with portfolio construction goals, and the company expects to back lever it in the future [25][27] Question: Management fee waivers - The company has waived approximately $570,000 of base management fees and $300,000 of incentive fees for the quarter, with expectations to fulfill a total waiver of $1 million [28][33] Question: Construction activity and geographic expansion - The company remains focused on Florida and Texas but is also exploring opportunities in other Southern states like Georgia and the Carolinas [39] Question: Florida residential market outlook - The company is cautious about new deals in Florida due to potential absorption slowdowns but is currently seeing good activity in existing projects [44] Question: Capital availability and funding plans - The company has sufficient capital to execute its business plan and plans to fill its bank line to $200 million in the coming quarters [48][49] Question: Allocation of signed term sheets - Allocation decisions for signed term sheets depend on capital availability and conditions precedent for closing deals [54] Question: Dividend expectations - The company expects the Q2 dividend to be at or around the Q1 level of $0.30, with potential for increased earnings from construction loans in the future [61][62]

Financial Data and Key Metrics Changes - For Q1 2025, the company generated distributable earnings of $0.31 per basic weighted average share, aligning with preannounced expectations [5][6] - Book value per share as of 03/31/2025 was $13.77, within the expected range of $13.6 to $13.9 [5][6] - Net interest income for the quarter was $4.6 million, with GAAP net income at $3.1 million or $0.27 per share [14][16] Business Line Data and Key Metrics Changes - The TCG real estate platform originated $213 million in loans during the quarter, with SUNS committing $148 million and funding $110 million [10][11] - As of 03/31/2025, SUNS had $352 million in commitments and $233 million funded across 12 loans [15][16] - The weighted average portfolio yield to maturity was reported at 12.1% [16] Market Data and Key Metrics Changes - The company noted a pullback from banks in the commercial real estate lending market, creating opportunities for alternative lenders like SUNS [9][10] - The current portfolio is well-positioned with 88% of outstanding principal at floating rates, benefiting from a weighted average floor of 4.1% [11][12] Company Strategy and Development Direction - The company aims to focus on high-quality assets in growing markets, particularly in the Southern United States [9][10] - There is an emphasis on well-located residential and mixed-use assets backed by experienced sponsors [12] - The management team is optimistic about earnings growth in the second half of 2025 and into 2026 due to the acceleration of construction loan funding [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the existing portfolio's resilience despite market volatility and tariff policy uncertainties [9][10] - The company is monitoring potential impacts on construction projects but does not anticipate material effects at this time [10][39] - Management indicated that they have sufficient capital to execute their business plan and are planning an unsecured raise in Q4 2025 [43][44] Other Important Information - The Board declared a dividend of $0.30 per share for Q1 2025, with expectations for a similar dividend in Q2 [14][56] - The company has waived approximately $570,000 of base management fees and $300,000 of incentive fees for the quarter [25][29] Q&A Session Summary Question: Changes in loan pipeline - The loan pipeline has decreased from $1.4 billion to $800 million due to evolving market conditions and the withdrawal of some lenders, but the overall opportunity set remains strong [18][20] Question: Dallas loan rate concerns - The Dallas loan aligns with portfolio construction strategies, and while it has a lower rate, it is expected to provide good risk-adjusted returns [21][23] Question: Future management fee waivers - The company has waived a total of $800,000 in fees so far and plans to fulfill the commitment of waiving $1 million by the end of the year [29][30] Question: Florida residential market outlook - The company is cautious about the Florida market but has not seen significant weakness yet; they are extending absorption schedules for new deals [38][39] Question: Capital availability and funding plans - The company has sufficient capital to execute its business plan and plans to expand its bank line to $200 million [43][44] Question: Allocation of signed term sheets - Allocation decisions for the signed term sheets depend on capital availability and conditions precedent for closing deals [48][49] Question: Dividend expectations for the rest of the year - The company expects Q2 dividends to be in line with distributable earnings, with guidance for future dividends remaining consistent [54][56]

Company Overview - Sunrise Realty Trust (SUNS) is an institutional lender focused on commercial real estate projects in the Southern United States[12] - The management team has structured over $21 billion in CRE and credit transactions[12] - SUNS targets a portfolio net internal rate of return (IRR) in the low-teens[12] Portfolio Composition - As of May 1, 2025, total current commitments were approximately $352 million[52] - Residential assets comprise approximately 71% of the portfolio[52] - Approximately 88% of the portfolio consists of senior loans[55] - Approximately 12% of the portfolio consists of subordinate loans[55] - The portfolio's weighted average yield to maturity is approximately 12.1%[51] Market Opportunity - The company sourced approximately $47.6 billion of CRE deals since October 2023, pursuing approximately 1.5% of deals sourced[13] - The company has an active pipeline of approximately $800 million[13] - Over $2 trillion in CRE loans maturing by the end of 2027 create opportunity for SUNS to scale quickly[13] Financial Performance (Q1 2025) - Net income for the three months ended March 31, 2025, was $3099437, or $027 per common share[62] - Distributable earnings for the three months ended March 31, 2025, were $3460706, or $031 per basic weighted average share[63]

Core Viewpoint - Sunrise Realty Trust, Inc. reported a GAAP net income of $3.1 million or $0.27 per basic weighted average common share for the first quarter of 2025, alongside Distributable Earnings of $3.5 million or $0.31 per share, indicating a stable financial performance in a favorable market environment for commercial real estate lending [1][2]. Financial Performance - The company achieved a GAAP net income of $3.1 million for Q1 2025, translating to $0.27 per basic weighted average common share [1][2]. - Distributable Earnings for the same period were reported at $3.5 million, or $0.31 per basic weighted average common share [1][2]. - A cash dividend of $0.30 per common share was paid on April 15, 2025, totaling $4.0 million in dividends distributed [4]. Market Position and Strategy - The CEO highlighted that SUNS entered 2025 with a strong balance sheet and a portfolio of performing loans, positioning the company to capitalize on attractive commercial real estate loan opportunities, particularly in residential and mixed-use assets across the Southern United States [3]. - The current market conditions are favorable for SUNS, as many transitional lenders are focused on legacy loan books, allowing SUNS to pursue new lending opportunities [3]. Guidance and Future Outlook - The company anticipates generating Distributable Earnings close to $0.30 per share for the first two quarters of 2025, based on the deployment of capital from its January 2025 equity offering [5]. - The company maintains its guidance for the second quarter of 2025, although this estimate is subject to change [5]. Additional Information - SUNS has made available an investor presentation titled "First Quarter 2025 Investor Presentation" on its website, along with its Quarterly Report on Form 10-Q filed with the SEC [6]. - A conference call to discuss financial results was scheduled for May 7, 2025, allowing interested parties to participate and gain further insights into the company's performance [8].

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a net income of **$3.1 million** for Q1 2025, with significant loan portfolio growth to **$230.5 million** funded by a **$71.4 million** stock offering [Consolidated Balance Sheets](index=4&type=section&id=Balance%20Sheets) Total assets decreased to **$234.4 million** due to cash deployment into loans, while shareholders' equity increased to **$184.8 million** following a stock issuance Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | **Assets** | | | | Loans held for investment, net | $230,480,478 | $130,711,848 | | Cash and cash equivalents | $1,642,780 | $184,626,770 | | **Total assets** | **$234,442,565** | **$317,535,780** | | **Liabilities** | | | | Line of credit payable | $43,200,000 | $123,840,000 | | Line of credit payable to affiliate | $0 | $75,000,000 | | **Total liabilities** | **$49,634,467** | **$203,398,033** | | **Shareholders' Equity** | | | | **Total shareholders' equity** | **$184,808,098** | **$114,137,747** | [Consolidated Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Net income increased to **$3.1 million** for Q1 2025, driven by a significant rise in interest income to **$5.0 million** from an expanded loan portfolio Consolidated Statements of Operations Highlights (unaudited) | Metric | Three months ended March 31, 2025 (USD) | Three months ended March 31, 2024 (USD) | | :--- | :--- | :--- | | Interest income | $4,958,523 | $2,026,306 | | Net interest income | $4,622,364 | $2,026,306 | | Total expenses | $1,405,279 | $263,961 | | **Net income** | **$3,099,437** | **$1,762,345** | | Diluted earnings per share | $0.27 | $0.26 | [Consolidated Statement of Cash Flows](index=7&type=section&id=Statement%20of%20Cash%20Flows) Cash and cash equivalents decreased by **$183.0 million** due to significant cash usage in investing activities for new loans and financing activities for credit facility repayments Cash Flow Summary (unaudited) | Activity | Three months ended March 31, 2025 (USD) | Three months ended March 31, 2024 (USD) | | :--- | :--- | :--- | | Net cash from operating activities | $(914,591) | $1,117,808 | | Net cash from investing activities | $(95,727,807) | $(46,414,144) | | Net cash from financing activities | $(86,341,592) | $14,400,000 | | **Net decrease in cash** | **$(182,983,990)** | **$(30,896,336)** | [Notes to the Financial Statements](index=8&type=section&id=Notes%20to%20the%20Financial%20Statements) Notes detail the company's spin-off, REIT election intent, loan portfolio growth to **$230.5 million**, and a **$71.4 million** stock offering - The company was spun-off from Advanced Flower Capital Inc. ("AFC") on July 9, 2024, becoming an independent, publicly traded company focused on commercial real estate (CRE) debt investments in the Southern United States[19](index=19&type=chunk)[22](index=22&type=chunk) - The company intends to elect to be taxed as a REIT for the taxable year ending December 31, 2024[21](index=21&type=chunk)[76](index=76&type=chunk) - In January 2025, the company completed a public offering of **6.4 million** shares of common stock, raising total net proceeds of approximately **$71.4 million**[63](index=63&type=chunk) - For Q1 2025, the Manager waived Base Management Fees of **$568,790** and Incentive Fees of **$298,306**[88](index=88&type=chunk)[89](index=89&type=chunk) - A regular cash dividend of **$0.30 per share**, totaling approximately **$4.0 million**, was declared on March 4, 2025[98](index=98&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on CRE loan origination, significant portfolio growth in Q1 2025, and a net income of **$3.1 million** with **$3.5 million** in Distributable Earnings - The company focuses on originating secured CRE loans of **$15-100 million** with 2-5 year durations, targeting a portfolio net IRR in the low-teens and an expected leverage ratio of **1.5:1** debt-to-equity[114](index=114&type=chunk) - In Q1 2025, the company originated several new loans, including a **$30.8 million** commitment in Aventura, FL, a **$44.0 million** commitment in New Orleans, LA, and a **$46.5 million** commitment in Dallas, TX[117](index=117&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk) Reconciliation of GAAP Net Income to Distributable Earnings | Metric | Three months ended March 31, 2025 (USD) | Three months ended March 31, 2024 (USD) | | :--- | :--- | :--- | | Net income | $3,099,437 | $1,762,345 | | Adjustments | $361,269 | $0 | | **Distributable earnings** | **$3,460,706** | **$1,762,345** | | Distributable earnings per basic share | $0.31 | $0.26 | - Book value per share was approximately **$13.77** as of March 31, 2025, compared to **$16.29** as of December 31, 2024[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate, credit, and real estate market risks, with **89%** of its loan portfolio having floating rates and a **$2.1 million** estimated annual interest income increase from a 100 bps rate hike - As of March 31, 2025, **89%** of the company's loan portfolio had floating interest rates, primarily tied to SOFR[143](index=143&type=chunk)[182](index=182&type=chunk) - A hypothetical **100 basis point** increase in the floating benchmark rate would increase annual interest income by approximately **$2.1 million**; a **100 basis point** decrease would reduce annual interest income by approximately **$0.4 million**, limited by interest rate floors[182](index=182&type=chunk) - The loan portfolio is concentrated, with the top three borrowers accounting for **41.9%** of the aggregate outstanding principal balance as of March 31, 2025[190](index=190&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[192](index=192&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[193](index=193&type=chunk) [Part II. Other Information](index=36&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company was not subject to any material legal proceedings as of March 31, 2025 - The company reports no material legal proceedings as of March 31, 2025[194](index=194&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported, except for a new risk concerning U.S. tariff regulations impacting construction costs and real estate asset values - A new risk factor was noted regarding U.S. tariff regulations, which could adversely affect borrowers and the value of real estate assets, particularly due to tariffs on foreign goods used in construction[195](index=195&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales or repurchases of its equity securities during the three months ended March 31, 2025 - There were no unregistered sales of equity securities during the quarter[196](index=196&type=chunk) - The company did not repurchase any of its Common Stock during the quarter[197](index=197&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None[198](index=198&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[199](index=199&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[200](index=200&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements related to spin-off, management, credit facilities, and officer certifications

Financial Results - Sunrise Realty Trust, Inc. announced preliminary financial results for Q1 2025 on April 22, 2025[4] - The press release detailing financial results is included as Exhibit 99.1[6] Company Classification - The company is classified as an emerging growth company under the Securities Act of 1933[3]

Core Insights - Sunrise Realty Trust, Inc. ("SUNS") has provided a preliminary estimate of distributable earnings for Q1 2025, ranging from $0.30 to $0.32 per basic weighted average common share, consistent with the previous quarter's earnings of $0.30 [2][4] - The expected book value per share for SUNS is projected to be between $13.60 and $13.90 [2] Financial Performance - For the quarter ended March 31, 2025, the Tannenbaum Capital Group (TCG) Real Estate platform originated loans totaling $212.5 million, with SUNS committing $147.5 million and funding $109.8 million [3] - As of March 31, 2025, SUNS had $352.1 million in commitments, with $233.4 million funded, which increased to $235.4 million funded by April 18, 2025 [3] Company Overview - SUNS operates as an institutional commercial real estate lender, focusing on transitional CRE projects in the Southern United States, aiming for near-term value creation [5][6] - The company is part of a group of affiliated CRE-focused debt funds under TCG Real Estate, which includes both public and private mortgage REITs [6] Non-GAAP Metrics - Distributable Earnings is a non-GAAP financial measure used by the company to evaluate performance, excluding certain transactions and GAAP adjustments [7][9] - This measure is considered useful for investors to assess the overall performance of the business, as it reflects the company's current loan activity and operations [8][10]