Sunrise Realty Trust, Inc. Q4 FY2025 earnings call

• General business overview: Remain focused on providing loans to sponsors of transitional real estate business plans in the southern US, portfolio construction similar to start of year with focus on residential loans. TCG real estate platform affiliated, providing scalable infrastructure, etc. - Commercial real estate lending markets: 2025 was a transition year with limited transaction volume early then improving conditions as Fed rate easing cycle took hold. Bifurcation in lending market between lenders working through problem loans and those constrained by legacy issues. Our approach differentiated, focusing on transitional business plan sponsors, structured bespoke solutions. - Portfolio updates: Fourth quarter 2025 closed on $56 million of commitments including various loans. Year end to March 1st 2026 committed $62 million to two loans. Took ownership of Thompson Hotel in San Antonio in March 3rd, believe medium to long-term prospects attractive, will hire broker to market asset. Portfolio well positioned interest rate-wise with 97% of outstanding principal floating rate with floors. - Financial position: Quarter ended December 31st, 2025 had net interest income $5.2M, distributable earnings $3.5M or $0.27 per share. Full year 2025 net interest income $21.6M, distributable earnings $15.2M or $1.19 per share. Ended fourth quarter 2025 with $420.7M current commitments and $305.5M principal outstanding across 16 loans. As of December 31st, 2025, CECL reserve $2.1M, total assets $310.2M, total shareholder equity $182M with book value $13.56 per share. Board declared 30 cent dividend per share for quarter ended March 31st, 2026, paid April 15th to shareholders of record March 31st, 2026.

For the quarter ended December 31st, 2025, net interest income was $5.2 million and distributable earnings were $3.5 million or $0.27 per basic weighted average common share. For the full year ended December 31st, 2025, net interest income was $21.6 million and distributable earnings were $15.2 million or $1.19 per basic weighted average common share. As of February 27th, 2026, excluding the Thompson Hotel, the portfolio consisted of $442.1 million of current commitment and $337 million of principal outstanding across 16 loans with a weighted average portfolio yield to maturity of approximately 12%. The portfolio construction focuses on residential loans mainly senior secured and floating rate, with a focus on providing loans to sponsors of transitional real estate business plans in the southern United States. Revenue contribution details not explicitly broken down by product segment but overall focus on specific loan types and target market.

• Board declared a 30 cent dividend per share for the quarter ended March 31st, 2026. - Increased revolving credit facility to $165 million with addition of Customers Bank, facility expandable to $200 million. - Expect volatility in market to create opportunities but need to wait and see how things settle out. - Focus on finding opportunities in dislocation in the market. - Portfolio yield to maturity approximately 12% as of February 27th, 2026 excluding Thompson Hotel.

• Market volatility can create uncertainty regarding whether deals make sense. - Rates going back up create question mark on deal viability. - Differentiation in pricing on multifamily and industrial side can affect pipeline. - Thompson Hotel in San Antonio foreclosure issue, though believe medium to long-term prospects attractive but initial operations slower than expected, sponsor's ability to support loan became harder. - Non-accrual of loan on Thompson Hotel reduced distributable earnings by approximately three cents per share in fourth quarter.

Q: Regarding originations, 62 million committed in February and market volatility, how does investment opportunity and market look?

A: Brian said there's a dichotomy in multifamily and industrial spreads tightening creating opportunity for transitional deals but recent volatility creates uncertainty, rates going up making deal viability a question mark, but volatility creates opportunities and need to wait and see.

Q: In loan pipeline, $652 million lower than last quarter, does reflect market volatility?

A: Brian said there's differentiation in pricing on multifamily industrial side, been more discerning, focus on durable transactions, 650 still strong pipeline.

Q: Hospitality asset in San Antonio, why foreclosed, specific about asset?

A: Brian said Thompson in San Antonio a high-quality asset, San Antonio had recent deliveries, loan interest rate high, asset took longer to ramp up, management issues, sponsor couldn't continue to put dollars in, have personal guarantees.

Q: Dividend $0.30 higher than 4Q earnings, how expect dividend coverage?

A: Len said goal is not to overpay dividend, board felt comfortable it would be covered over next 6 - 12 months aggregate.

Q: Bumping up east-west bank facility, 140 to 155, potential to get to 200, expecting in next couple quarters? Sources of capital?

A: Len said the Thompson Hotel asset comes out of borrowing business, proactively told banks, when resolve asset, can re-momentum, expand borrowing base.

Q: Reflect on 2025 and 2026 so far, how capital deployment trending versus plans?

A: Len said view and projections dependent on opportunity set, 2025 markets tightened up, opportunity set a bit thinner than expected, end of 2025 had tighter gap between buyer and seller bids, more acquisitions, now more tumultuous due to market uncertainty, but volatility creates opportunities for off-the-run interesting transactions.