Executive Summary

Q1 2025 delivered GAAP net income of $3.10M ($0.27 per share) and Distributable Earnings (DE) of $3.46M ($0.31 per share); EPS and “revenue” modestly beat S&P Global consensus, and DE covered the $0.30 dividend paid on April 15 .*
Management maintained prior guidance that Q2 distributable earnings should be at or close to $0.30 per share; they expect an earnings ramp in 2H25–2026 as construction loans accelerate funding and benefit from loan rate floors vs. credit line floors .
Portfolio scaled to $352.1M of commitments with $233.4M funded across 12 loans; net interest income grew to $4.6M and book value per share ended Q1 at $13.77, mid-point of the preannounced range .
Near-term catalysts: completion of the $1M fee waiver (remaining ~$0.14M expected in Q2), potential expansion of the bank line toward $200M, and a contemplated unsecured raise in Q4 2025 to fund growth while exploiting attractive credit spreads and floors .

What Went Well and What Went Wrong

What Went Well

“All loans are current and performing” with a new-vintage portfolio built in favorable vintages; Q1 DE of $0.31 was mid-range of the April 22 preannouncement, and book value per share landed at $13.77, in the middle of the guided range .
SUNS originated $213M at the platform level with $148M committed and $110M funded for SUNS; Q1 net interest income rose to $4.6M and portfolio yield to maturity stood at 12.1% .
Competitive advantage from loan floors: 88% floating with weighted average floor of 4.1% vs. credit line floor ~2.6%, positioning NIM favorably if rates decline; Dallas loan floor at 3.9% cited explicitly .

What Went Wrong

Macro uncertainty and administration tariff policy prompted caution: management expects construction activity to slow and is extending absorption schedules, which can delay funding and earnings recognition .
Bank line expansion pace slower than hoped; while management still “expects” the accordion to $200M over coming quarters, they could not add banks in Q1 as initially anticipated .
Pipeline commentary suggests variability: active pipeline cited at ~$800M in Q1 vs. ~$1.4B in prior presentation, reflecting evolving deal selection and market volatility (management emphasized quality over quantity) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($USD Millions)	$3.20	$3.44	$4.60
GAAP Net Income ($USD Millions)	$1.74	$1.85	$3.10
GAAP Diluted EPS ($USD)	$0.26	$0.27	$0.27
Distributable Earnings ($USD Millions)	$1.85	$2.05	$3.46
Distributable EPS ($USD)	$0.27	$0.30	$0.31
Dividend per Share ($USD)	$0.21 (paid)	$0.42 (declared)	$0.30 (paid)
Book Value per Share ($USD)	$16.19	$16.29; pro forma $13.93 with Jan equity	$13.77
Basic Weighted Avg Shares (Millions)	6.80	6.80	11.21
Net Income Margin (%)	54.3%	53.8%	67.4%

Notes: Net income margin computed as GAAP net income / net interest income using cited values.

Q1 2025 vs. S&P Global Consensus

Metric	Consensus	Actual	# of Estimates
Primary EPS ($USD)	$0.2667*	$0.27	3*
Revenue ($USD)	$4,503,350*	$4,504,716*	2*

Values marked with * retrieved from S&P Global. Disclosures: CFO cited net interest income of $4.6M; consensus “Revenue” appears to track a different revenue definition (likely total investment/interest income), resulting in small deltas; management’s reported GAAP and DE remain the anchor for performance assessment .*

Portfolio Trend (Scale and Funding)

KPI	Q3 2024	Q4 2024	Q1 2025
Commitments ($USD Millions)	$120	$190.9	$352.1
Funded Principal ($USD Millions)	$98	$132.6	$233.4 (Mar 31) / $239.3 (May 1)
Loans (Count)	6	9	12

Q1 2025 KPIs

KPI	Q1 2025
Floating Rate (% of outstanding principal)	88%
Weighted Avg Loan Rate Floor (%)	4.1%
Credit Line Floor (%)	~2.6%
Weighted Avg Portfolio Yield to Maturity (%)	12.1%
CECL Reserve ($USD; bps of loans at carrying value)	~$158,000; ~7 bps

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Distributable EPS	Q2 2025	At/near $0.30 per share (from prior commentary)	Maintained at/near $0.30 per share	Maintained
Dividend per Share	Q2 2025	Expect declaration around June 15	Board to declare around June 15; intent aligned with earnings	Maintained (timing reaffirmed)
Book Value per Share	Q1 2025	$13.60–$13.90 preannouncement	Actual $13.77	Finalized within range
Management Fee/Incentive Waiver	FY 2025	Total $1.0M waiver commitment	~$0.86M waived by Q1; ~$0.14M expected Q2	On track to complete
Bank Revolving Credit Facility	2025	Accordion target up to $200M; terms expected unchanged	Expansion timeline “slower than hoped,” still expected over next quarter(s)	Timing slower; terms expected maintained
Capital Markets (Unsecured Raise)	Q4 2025	N/A	Intends unsecured raise in Sep–Dec window, market permitting	New disclosure (intent)

Earnings Call Themes & Trends

Topic	Q3 2024 (Nov)	Q4 2024 (Mar)	Q1 2025 (May)	Trend
Pipeline size/quality	~$1.2B active; senior-weighted; high selectivity	~$1.4B active; 2 term sheets; focus on senior; platform originations ramping	~“$800M active” noted vs. $1.4B prior; emphasizes actionable quality; 2 term sheets ~$100M	Quality-first; variable size amid volatility
Rate floors/NIM	Introduced benefit of loan floors vs. credit line floor	Floors ~4.2% vs. ~2.6% line; NIM asymmetric to rate moves	88% floating; loan floors 4.1%; Dallas loan floor 3.9%	Persistent structural NIM tailwind
Capital/Leverage	New $50M EW Bank revolver; target 1.5x	Equity raised; revolver path to $200M; fee waivers to offset drag	Revolver expansion slower than hoped; unsecured raise contemplated 4Q25	Building capacity; cautious pacing
Macro/tariffs/supply chain	Fed cuts improved sentiment; lenders pulling back	Elevated short rates; alternative lenders filling gaps	Tariff policy uncertainty; cautious on new construction; extended absorption schedules	More cautious underwriting
Geography/portfolio	Residential-heavy; no office exposure	FL/TX 83% commitments; diversify to GA/SC/TN/LA	Expand aperture to Carolinas/VA/GA/TN; still FL/TX heavy	Diversifying within Southern U.S.

Management Commentary

Executive Chairman: “For the quarter ended March 31, 2025, SUNS generated distributable earnings of $0.31…book value per share came…$13.77” and “we are excited for…earnings growth in the second half of 2025 and the full year 2026…loans…structured with attractive rates and floors” .
CEO: “Banks have again pulled back…allowing alternative lenders like SUNS to continue meeting borrowers’ transitional capital needs…we expect that the continued uncertainty will create attractive opportunities to provide near-term financing solutions” .
CFO: “Net interest income of $4.6M…DE of $3.5M…portfolio…$352.1M commitments and $233.4M principal outstanding…weighted average portfolio yield to maturity of 12.1%…CECL reserve ~$158,000 (~7 bps)” .

Q&A Highlights

Pipeline dynamics: active pipeline cited at ~$800M vs. $1.4B prior; management emphasized evolving quality mix and 2 signed term sheets totaling ~$100M in documentation .
Loan floor specifics: Dallas residential loan floor at 3.9% vs. ~2.6% line, highlighting upside to NIM if rates fall .
Fee waivers: ~$570k base management fee and ~$300k incentive fee waived in Q1; ~$140k expected in Q2 to complete the $1M commitment .
Bank line: expansion toward $200M remains expected, but timing slower than hoped; terms expected unchanged .
Macro caution: Florida residential absorption under watch post tariff headlines; underwriting now extends absorption schedules and bolsters reserves .

Estimates Context

Q1 2025 results modestly beat consensus: EPS $0.27 vs. $0.2667; “Revenue” $4.505M vs. $4.503M; 3 EPS estimates and 2 revenue estimates contributed to the consensus.*
Target price consensus mean stood at $12.50 with 4 estimates; formal “Consensus Recommendation (Text)” unavailable in the dataset.*
Implication: Small beats likely support stability in near-term dividend expectations and may nudge DE estimates higher as funding ramps in 2H25, contingent on construction draw timing and line expansion .*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Near-term earnings stability with DE at/near $0.30 per share and structural NIM support from loan rate floors vs. line floors; dividend alignment reaffirmed for Q2 .
Growth visibility improves into 2H25–2026 as construction loans draw; watch monthly funding updates and bank line expansion progress for execution signals .
Portfolio quality narrative intact (all loans current and performing; new vintage) with diversification broadening beyond FL/TX while maintaining residential/mixed-use focus .
Fee waivers mitigated dilution post equity raise; remaining ~$0.14M expected in Q2 completes the $1M commitment, after which fees normalize .
Macro/tariff caution argues for disciplined underwriting—expect slower new construction starts and elongated absorption schedules; SUNS’ structures (guarantees, escrows) aim to cushion risk .
Capital plans (unsecured raise in Q4 2025) and revolver accordion toward $200M are the key financing milestones to scale assets while protecting spreads .
Trading lens: modest consensus beats and dividend coverage in Q1 support downside protection; stock sensitivity near-term likely tied to updates on funding pace, line expansion, and macro headlines on tariffs/absorption .

Sunrise Realty Trust, Inc. (SUNS)·Q1 2025 Earnings Summary