Company Overview - Sunrise Realty Trust (SUNS) is an institutional lender focused on commercial real estate projects in the Southern United States, targeting a low-teens net internal rate of return (IRR)[16] - The management team has structured over $21 billion in CRE and credit transactions[16] - SUNS deal selectivity since inception is approximately 1.5%, reflecting a focus on high-quality originations[17, 51] - The company has an active pipeline of over $1 billion in potential investments[17, 51] Financial Performance and Portfolio Composition - As of August 1, 2025, SUNS had approximately $360 million in current commitments[51, 57] - The portfolio is heavily weighted towards residential assets, comprising approximately 71% of current commitments[57] - Approximately 86% of the portfolio consists of floating-rate loans[60] - The portfolio's weighted average yield to maturity is approximately 12.2%[56, 57] Market Opportunity and Strategy - Over $2 trillion in CRE loans maturing by the end of 2027 create opportunity for SUNS to scale quickly[17] - SUNS is strategically focused on established and high-growth areas in the Southern U S , benefiting from accelerated population and employment migration trends[17] - The company targets opportunities with clear potential for value creation, focusing on supply-constrained markets, sound business plans, and strong financial sponsors[43, 48]

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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]

NASDAQ:SUNS | INVESTOR PRESENTATION N A S D A Q : S U N S | I N V E S T O R P R E S E N T A T I O N A TCG Company D I S C L A I M E R S Some of the statements contained in this presentation constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, and we intend such statements to be covered by the safe harbor provisions contained therein. Such forward-looking statements are based on the current intent, belief, expectations and views of future events o ...

Financial Data and Key Metrics Changes - The company reported distributable earnings of $0.34 per share, exceeding the high end of the guidance range [6][18] - A quarterly dividend of $0.35 per share was declared and paid [6][18] - The weighted average risk rating improved to 2.9 from 3.1 in the previous quarter [6][18] - Total debt to equity remained at 1.6 times, with a cash balance of approximately $42 million [19] Business Line Data and Key Metrics Changes - The loan portfolio totaled $691 million in commitments, with 23 first mortgage loans and a weighted average yield of 8.5% [7] - Office exposure decreased to 25% of the portfolio from 27% at year-end [8] - The company closed two new student housing loans totaling approximately $50 million during the quarter [7] Market Data and Key Metrics Changes - The company noted a robust pipeline with increased requests for new acquisitions, indicating improved market conditions [13] - There was a shift in market sentiment with signs of spreads widening due to tariff-related headlines and uncertainties surrounding the Fed's rate path [14] Company Strategy and Development Direction - The company is focused on reducing exposure to office loans while increasing investments in multifamily, student housing, industrial, and necessity-based retail sectors [8] - The management emphasized a disciplined credit selection approach and maintaining strong sponsor relationships to navigate market volatility [11][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that a lower rate environment could pressure earnings, particularly as older loans with higher margins are expected to be repaid [20] - The company remains confident in its portfolio's quality and the ability to capitalize on new opportunities despite a cautious outlook [11] Other Important Information - The company has a modest CECL reserve of 130 basis points of total loan commitments, down from 140 basis points [18] - New slides were added to the earnings presentation to illustrate earnings trends and net interest rate spreads [21] Q&A Session Summary Question: Discussions with lenders and market sentiment - Management reported supportive conversations with lenders, maintaining steady borrowing costs despite widening market spreads [24][25] Question: Underwriting approach and credit standards - Management confirmed no modifications to their underwriting approach, emphasizing the importance of maintaining credit standards [27] Question: Credit performance and portfolio growth expectations - Management highlighted strong credit performance due to diligent underwriting and sponsorship, with a robust pipeline for new loans [32][34] Question: Updates on specific loans and maturities - Management provided updates on loan extensions and anticipated repayments, indicating a proactive approach to managing the portfolio [42][45] Question: Dividend evaluation timing - The Board of Trustees evaluates the dividend each quarter, considering overall performance and market conditions [48]