Sutherland Asset Management Corp (Form: 8-K, Received: 11/09/2017 06:07:31)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2017

SUTHERLAND ASSET MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)


Maryland	001-35808	90-0729143
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1140 Avenue of the Americas, 7 th Floor

New York, NY 10036

(Address of principal executive offices))
(Zip Code)

Registrant's telephone number, including area code: (212) 257-4600

n/a
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


	◻	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	
	◻	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	◻	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	◻	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 2.02.

Results of Operations and Financial Condition.

On November 9, 2017, the Company issued an earnings release announcing the financial results for the quarter ended September 30, 2017. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

On November 9, 2017, Sutherland Asset Management Corporation (the “Company”) posted supplemental financial information on the Investor Relations section of its website (www.sutherlandam.com). A copy of the supplemental financial information is furnished as Exhibit 99.2 hereto and incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.

Item 9.01 Financial Statements and Exhibits.


	(d)	Exhibits

1,
Exhibit No.		Description

99.1		Earnings Release, dated November 9, 2017
99.2		Supplemental Financial Information for the quarter ended September 30, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUTHERLAND ASSET MANAGEMENT CORPORATION


	By:	/s/ Frederick C. Herbst
		Name: Frederick C. Herbst
		Title: Chief Financial Officer

Date: November 9, 2017

Exhibit 99.1

SUTHERLAND ASSET MANAGEMENT CORPORATION ANNOUNCES THIRD QUARTER 2017 RESULTS

- Quarterly Net Income of $0.37 per share of common stock -

- Quarterly Core Earnings of $0.38 per share of common stock -

- Originated $808.6 Million of Loans During Third Quarter 2017 -

- Declared and Paid Third Quarter Dividend of $0.37 Per Share -

New York, New York, November 9, 2017 / PRNewswire / – Sutherland Asset Management Corporation (“Sutherland” or the “Company”) (NYSE: SLD) today reported financial results for the quarter ended September 30, 2017.

Third Quarter Highlights:

Net income of $12.4 million, or $0.37 per share of common stock

Core earnings of $12.9 million, or $0.38 per share of common stock

Adjusted net book value of $16.68 per share of common stock as of September 30, 2017

Originated $278.8 million of small balance commercial (“SBC”) loans

Originated $38.9 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program

Originated $490.9 million of residential mortgage loans

Completed the securitization of $154.9 million of acquired SBC owner-occupied loans and sold $139.4 million of the senior bonds at a weighted average pass-through rate of 3.3%

Completed issuance of a Collateralized Loan Obligation (“CLO”) of $243.8 million of originated transitional loans and sold $198.8 million of the senior bonds at a floating rate of LIBOR plus 139 basis points.

A summary of Sutherland’s operating results for the quarter ended September 30, 2017 is presented below. Sutherland reported U.S. GAAP net income for the three months ended September 30, 2017 of $12.4 million, or $0.37 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $12.9 million, or $0.38 per share of common stock.

Thomas Capasse, Chairman and Chief Executive Officer commented, “We are quite energized by the team’s ability to originate over $800 million in the third quarter which resulted in quarterly per share earnings growth of 9%. Our ongoing effort to grow our platform and strengthen our balance sheet was supported by a successful Convertible Note offering, which further strengthened our funding mix. As we look to the remainder of 2017 and beyond, we remain committed to executing on our strategic objectives to raise funds in an accretive manner to continue to expand our platform and build long term value for our shareholders.”

Common Dividends

During the third quarter of 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.37 per share of common stock and operating partnership unit (“OP unit”) in its operating partnership subsidiary for the quarter ended September 30, 2017 to common stockholders and OP unit holders of record as of September 30, 2017. The dividend was paid on October 20, 2017.

The Company issued a full detailed presentation of its third quarter 2017 results, which can be viewed in the investor relations section at www.sutherlandam.com.

Use of Non-GAAP Financial Information

In addition to the results presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), this press release includes Core Earnings which is a non-U.S. GAAP financial measure. The Company defines Core Earnings as net income adjusted for unrealized or realized gains (losses) related to mortgage backed securities, unrealized gains (losses) related to residential mortgage servicing rights, and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains or merger related expenses.

The Company believes that providing investors with this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, gives investors greater transparency into the information used by management in its financial and operational decision-making. However, because Core Earnings is an incomplete measure of the Company's financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, the Company's net income computed in accordance with U.S. GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of Core Earnings may not be comparable to other similarly-titled measures of other companies.

The following table reconciles net income computed in accordance with U.S. GAAP to Core Earnings for the three months ended September 30, 2017:


(In Millions)		Three Months Ended September 30, 2017
Net Income	$	12.4
Reconciling items:
Unrealized (gain) loss on mortgage-backed securities		(0.2)
Unrealized (gain) loss on mortgage servicing rights		1.7
Total reconciling items		1.5
Income tax adjustments		(1.0)
Core earnings	$	12.9

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Thursday, November 9, 2017 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended September 30, 2017. The conference call can be accessed by dialing 877-545-1402 (domestic) or 719-457-2716 (international).

The conference call will also be available in the Investor Relations section of the Company’s website at www.sutherlandam.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay of the call will also be available on the Company’s website approximately two hours after the live call through November 23, 2017. To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 1816994.

Safe Harbor Statement

This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, applicable regulatory changes; general volatility of the capital markets; changes in the Company’s investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company’s assets; the degree and nature of competition, including competition for the Company's target assets; and other factors, including those set forth in the Risk Factors section of the Company's most recent Annual Report on Form 10-K filed with the SEC, and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Contact

Investor Relations
Sutherland Asset Management
212-257-4666
SutherlandIR@waterfallam.com

Additional information can be found on the Company’s website at www.sutherlandam.com .

SUTHERLAND ASSET MANAGEMENT CORPORATION

Unaudited CONS OLIDATED BALANCE SHEETS


(In Thousands)	September 30, 2017		December 31, 2016
Assets
Cash and cash equivalents	$	70,590	$	59,566
Restricted cash		16,057		20,190
Short-term investments		99,994		319,984
Loans, net (including $158,393 and $81,592 held at fair value)		892,896		1,011,121
Loans, held for sale, at fair value		200,318		181,797
Mortgage backed securities, at fair value		41,371		32,391
Loans eligible for repurchase from Ginnie Mae		101,408		137,986
Derivative instruments		4,131		5,785
Servicing rights (including $68,815 and $61,376 held at fair value)		89,372		83,854
Receivable from third parties		6,756		7,220
Other assets		35,356		54,277
Assets of consolidated VIEs		944,894		691,096
Total Assets	$	2,503,143	$	2,605,267
Liabilities
Secured short-term borrowings		522,767		927,462
Promissory note, net		6,494		7,378
Securitized debt obligations of consolidated VIEs, net		680,282		492,942
Convertible note, net		109,414		—
Senior secured note, net		138,074		—
Guaranteed loan financing		313,388		390,555
Contingent consideration		9,037		14,487
Liabilities for loans eligible for repurchase from Ginnie Mae		101,408		137,986
Derivative instruments		358		643
Dividends payable		12,289		11,505
Accounts payable and other accrued liabilities		54,579		70,207
Total Liabilities	$	1,948,090	$	2,053,165
Stockholders’ Equity
Common stock, $0.0001 par value, 500,000,000 shares authorized, 31,996,440 and 30,549,084 shares issued and outstanding, respectively		3		3
Additional paid-in capital		539,664		513,295
Deficit		(3,952)		(201)
Total Sutherland Asset Management Corporation equity		535,715		513,097
Non-controlling interests		19,338		39,005
Total Stockholders’ Equity	$	555,053	$	552,102
Total Liabilities and Stockholders’ Equity	$	2,503,143	$	2,605,267

SUTHERLAND ASSET MANAGEMENT CORPORATION

Unaudited CONSO LIDATED STATEMENTS OF INCOME


	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, except share data)	2017		2016		2017		2016
Interest income	$	35,038	$	31,890	$	102,169	$	104,282
Interest expense		(19,908)		(14,097)		(53,579)		(42,043)
Net interest income before provision for loan losses	$	15,130	$	17,793	$	48,590	$	62,239
Provision for loan losses		(466)		(488)		(1,857)		(4,689)
Net interest income after provision for loan losses	$	14,664	$	17,305	$	46,733	$	57,550
Non-interest income (expense)
Gains on residential mortgage banking activities, net of variable loan expenses		10,735		—		32,229		—
Other income		1,853		1,729		4,281		5,335
Servicing income, net of amortization and impairment of $976 and $5,252 for the three and nine months ended September 30, 2017, and $1,850 and $6,079 for the three and nine months ended September 30, 2016, respectively		6,134		1,661		16,208		4,420
Employee compensation and benefits		(13,715)		(4,822)		(40,630)		(14,005)
Allocated employee compensation and benefits from related party		(990)		(900)		(3,010)		(2,700)
Professional fees		(2,151)		(3,120)		(6,334)		(8,573)
Management fees – related party		(2,034)		(1,793)		(6,018)		(5,464)
Loan servicing expense		(3,388)		(1,830)		(7,513)		(3,889)
Other operating expenses		(7,447)		(3,373)		(19,183)		(11,185)
Total non-interest income (expense)	$	(11,003)	$	(12,448)	$	(29,970)	$	(36,061)
Net realized gain on financial instruments		5,695		2,454		13,151		3,720
Net unrealized gain on financial instruments		2,678		3,557		4,933		5,800
Income from continued operations before provision for income (taxes) benefit	$	12,034	$	10,868	$	34,847	$	31,009
Provision for income (taxes) benefit		340		(1,297)		(1,763)		(3,326)
Net income from continuing operations	$	12,374	$	9,571	$	33,084	$	27,683
Discontinued operations
Loss from discontinued operations (including gain on disposal of $267 in the nine months ended September 30, 2016)		—		—		—		(576)
Income tax benefit		—		—		—		225
Loss from discontinued operations		—		—		—		(351)
Net income	$	12,374	$	9,571	$	33,084	$	27,332
Less: Net income attributable to non-controlling interest		533		777		1,891		2,217
Net income attributable to Sutherland Asset Management Corporation	$	11,841	$	8,794	$	31,193	$	25,115

Earnings (loss) per basic common share
Continuing operations	$	0.37	$	0.34	$	1.00	$	0.98
Discontinued operations		—		—		—		(0.01)
Earnings per basic common share	$	0.37	$	0.34	$	1.00	$	0.97

Earnings (loss) per diluted common share
Continuing operations	$	0.37	$	0.34	$	1.00	$	0.98
Discontinued operations	$	—	$	—	$	—	$	(0.01)
Earnings per diluted common share	$	0.37	$	0.34	$	1.00	$	0.97

Weighted-average shares outstanding
Basic		32,026,494		25,870,485		31,120,476		25,870,485
Diluted		32,028,980		25,870,485		31,121,449		25,870,485

Dividends declared per share of common stock	$	0.37	$	0.45	$	1.11	$	0.90

SUTHERLAND ASSET MANAGEMENT CORPORATION

Unaudited SEGMENT REPORTING

fOR THE three MONTHS ENDED september 30, 2017


					SBA Originations,		Residential
	Loan		SBC		Acquisitions,		Mortgage		Corporate-
(In Thousands)	Acquisitions		Originations		and Servicing		Banking		Other		Consolidated
Interest income	$	7,800	$	17,258	$	9,039	$	941	$	—	$	35,038
Interest expense		(3,937)		(10,252)		(3,795)		(797)		(1,127)		(19,908)
Net interest income before provision for loan losses	$	3,863	$	7,006	$	5,244	$	144	$	(1,127)	$	15,130
Provision for loan losses		(1,063)		168		429		—		—		(466)
Net interest income after provision for loan losses	$	2,800	$	7,174	$	5,673	$	144	$	(1,127)	$	14,664
Non-interest income (expense)
Gains on residential mortgage banking activities, net of variable loan expenses	$	—	$	—	$	—	$	10,735	$	—	$	10,735
Other income (loss)		402		961		444		46		—		1,853
Servicing income		4		166		1,556		4,408		—		6,134
Employee compensation and benefits		(106)		(1,879)		(2,862)		(8,735)		(133)		(13,715)
Allocated employee compensation and benefits from related party		(99)		—		—		—		(891)		(990)
Professional fees		(343)		(446)		(534)		(264)		(564)		(2,151)
Management fees – related party		—		—		—		—		(2,034)		(2,034)
Loan servicing expense		(787)		(661)		(228)		(1,712)		—		(3,388)
Other operating expenses		(1,467)		(2,750)		(993)		(1,677)		(560)		(7,447)
Total non-interest income (expense)	$	(2,396)	$	(4,609)	$	(2,617)	$	2,801	$	(4,182)	$	(11,003)
Net realized (loss) gain on financial instruments		(377)		2,768		3,304		—		—		5,695
Net unrealized gain (loss) on financial instruments		173		3,807		414		(1,728)		12		2,678
Net income (loss) before provision for income taxes	$	200	$	9,140	$	6,774	$	1,217	$	(5,297)	$	12,034
Provision for income taxes		—		(352)		(2,169)		(282)		3,143		340
Net income (loss)	$	200	$	8,788	$	4,605	$	935	$	(2,154)	$	12,374
Total Assets	$	426,699	$	1,152,153	$	525,862	$	298,435	$	99,994	$	2,503,143

SUTHERLAND ASSET MANAGEMENT CORPORATION

Unaudited SEGMENT REPORTING

fOR THE nine MONTHS ENDED september 30, 2017


					SBA Originations,		Residential
	Loan		SBC		Acquisitions,		Mortgage		Corporate-
(In Thousands)	Acquisitions		Originations		and Servicing		Banking		Other		Consolidated
Interest income	$	28,242	$	41,972	$	28,935	$	3,020	$	—	$	102,169
Interest expense		(12,472)		(23,798)		(12,120)		(2,310)		(2,879)		(53,579)
Net interest income before provision for loan losses	$	15,770	$	18,174	$	16,815	$	710	$	(2,879)	$	48,590
Provision for loan losses		(1,787)		84		(154)		—		—		(1,857)
Net interest income after provision for loan losses	$	13,983	$	18,258	$	16,661	$	710	$	(2,879)	$	46,733
Non-interest income (expense)
Gains on residential mortgage banking activities, net of variable loan expenses	$	—	$	—	$	—	$	32,229	$	—	$	32,229
Other income (loss)		769		2,708		706		98		—		4,281
Servicing income		37		(197)		3,598		12,770		—		16,208
Employee compensation and benefits		(386)		(5,713)		(7,457)		(26,359)		(715)		(40,630)
Allocated employee compensation and benefits from related party		(301)		—		—		—		(2,709)		(3,010)
Professional fees		(868)		(1,110)		(1,499)		(753)		(2,104)		(6,334)
Management fees – related party		—		—		—		—		(6,018)		(6,018)
Loan servicing expense		(2,155)		(1,724)		1,359		(4,993)		—		(7,513)
Other operating expenses		(2,871)		(6,486)		(2,951)		(5,116)		(1,759)		(19,183)
Total non-interest income (expense)	$	(5,775)	$	(12,522)	$	(6,244)	$	7,876	$	(13,305)	$	(29,970)
Net realized (loss) gain on financial instruments		(106)		6,082		6,714		—		461		13,151
Net unrealized gain (loss) on financial instruments		1,647		6,671		625		(3,953)		(57)		4,933
Net income (loss) before provision for income taxes	$	9,749	$	18,489	$	17,756	$	4,633	$	(15,780)	$	34,847
Provision for income taxes		—		(10)		(4,999)		(1,252)		4,498		(1,763)
Net income (loss)	$	9,749	$	18,479	$	12,757	$	3,381	$	(11,282)	$	33,084
Total Assets	$	426,699	$	1,152,153	$	525,862	$	298,435	$	99,994	$	2,503,143

Exhibit 99.2

NEW MICROSOFT WORD DOCUMENT_SLIDE001.GIF

Supplemental Financial Data Third Quarter 2017

NEW MICROSOFT WORD DOCUMENT_SLIDE002.GIF

Disclaimer This presentation contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; Sutherland Asset Management Corporation (the "Company") can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include those set forth in the Risk Factors section of the most recent Annual Report on Form 10-K filed with the SEC and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. This presentation includes certain non-GAAP financial measures, including Core Earnings. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures in accordance with GAAP. Please refer to Appendix A for the most recent GAAP information. This presentation also contains market statistics and industry data which are subject to uncertainty and are not necessarily reflective of market conditions. These have been derived from third party sources and have not been independently verified by the Company or its affiliates. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. All data is as of September 30, 2017, unless otherwise noted. 1

NEW MICROSOFT WORD DOCUMENT_SLIDE003.GIF

Third Quarter 2017 Highlights ► Net income of $12.4 million(1), or $0.37 per common share ► Core earnings of $12.9 million(1), or $0.38 per common share ► Declared dividend of $0.37 per share for the third quarter ► Adjusted net book value of $16.68 per common share at September 30, 2017 ► Originations(5) for the quarter: ► $278.8 million in SBC loans ► $38.9 million in SBA loans ► $490.9 million in Residential mortgage loans ► Completed the issuance of $115.0 million 7.0% Convertible Senior Notes in August 2017 ► Completed the securitization of $154.9 million of acquired SBC owner-occupied loans and sold $139.4 million of senior bonds at a weighted average pass-through rate of 3.3% ► Completed our first CLO issuance of $243.8 million of originated transitional loans and sold $198.8 million of senior bonds at a floating rate of LIBOR + 139 basis points Returns 3Q 2017 YTD 2017 Return on Equity(2) 8.9% 8.0% Core Return on Equity(3) 9.3% 8.4% Dividend Yield(4) 9.4% 9.4% Inclusive of non-controlling interest Return on Equity is a annualized percentage equal to quarterly net income over the average monthly total stockholders’ equity for the period Core Return on Equity is an annualized percentage equal to core earnings over the average monthly total stockholders’ equity for the period. Refer to slide 19 for a reconciliation of GAAP Net Income to Core Earnings Dividend yield for the period based on the 9/28/2017 closing share price of $15.70 Represents fully committed amounts 2

NEW MICROSOFT WORD DOCUMENT_SLIDE004.GIF

Return on Equity Acquisitions 14.5% 14.5% 16.0% SBC Conventional Originations 17.1% 17.1% 46.9% SBA Originations & Servicing 30.5% 30.5% 22.1% Residential Mortgage Banking(3) 6.0% 9.6% 15.0% Corporate finance and non-earning assets, net Gross return on equity Realized & unrealized gains, net Operating income and expenses, net Investment advisory fees Provision for income taxes Return on Equity 18.0% (1.8%) 16.2% 3.6% (9.6%) (1.5%) 0.2% 8.9% 3 Levered yields include interest income, accretion of discount, MSR creation, realized gains (losses) on loans held for sale, unrealized gains (losses) on loans held for sale and servicing income net of interest expense and amortization of deferred financing costs on an annualized basis Based on GAAP Net Income ROE based on net income before tax of the Residential Mortgage Banking business line divided by the business line’s equity. Business Line Levered Yield(1) Core Levered Yield Equity Allocation 18.5% (1.8%) 16.7% 3.5% (9.6%) (1.5%) 0.2% 9.3% Q3’17 15.1% (1.6%) 13.5% 4.8% (8.0%) (1.4%) (0.8%) 8.1% Q2’17 GAAP ROE(2) Q3’17 Q2’17 16.4% (1.7%) 14.7% 3.9% (8.0%) (1.4%) (1.1%) 8.1% Core ROE

NEW MICROSOFT WORD DOCUMENT_SLIDE005.GIF

L SBC Origination Volume by Product Type 4 Q3 2016 – Q3 2017 YoY Growth Rate: 88 % Origination volumes are based on fully committed amounts

NEW MICROSOFT WORD DOCUMENT_SLIDE006.GIF

SBC Conventional Originations ► Originations of $278.8 million(1), up 24% quarter over quarter, 66% of which are floating rate ► Gains on sales of Freddie Mac loans of $1.8 million, up 46% quarter over quarter ► Origination pipeline of $160 million(2) Number of loans 368 Unpaid principal balance(3) $1,068 Carrying value(3) $1,088 Weighted average LTV 60% Weighted average interest rate 6.3% Weighted average remaining maturity 5 years Weighted average UPB(3) $2.9 Percentage of loans fixed/floating 64% / 36% Percentage of loans 30+ days delinquent 0.16% Portfolio Metrics Gross Levered Yield 5 Represents fully committed amounts As of September 30, 2017 $ in millions Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. (4) (5) 12.1% 10.9% 11.2% 11.2% 13.8% 0.9% 1.7% 1.5% 1.7% 3.3% 2.5% 4.5% 6.5% 8.5% 10.5% 12.5% 14.5% 16.5% 18.5% Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Gross Levered Yield (ex. Gains) Gains on Loans, held for sale

NEW MICROSOFT WORD DOCUMENT_SLIDE007.GIF

SBA Originations, Acquisitions & Servicing Number of loans 2,194 Unpaid principal balance(3) $530 Carrying value(3) $471 Weighted average LTV 78% Weighted average interest rate 5.9% Weighted average remaining maturity 14 years Weighted average UPB(3) $0.2 Percentage of loans fixed/floating 1% / 99% Percentage of loans 30+ days delinquent 6% Gross Levered Yield Portfolio Metrics ► $32.9 million of SBA secondary market loans sales, up 39% quarter over quarter, with an average sale premium of 11.9% ► Originations of $38.9 million(1), a 50% increase from second quarter ► Origination pipeline in excess of $114 million SBA loans(2) and an acquisition pipeline of $15.0 million in SBA loans 6 Represents fully committed amounts As of September 30, 2017. $ in millions Includes interest income, accretion of discount, and servicing income net of interest expense and amortization of deferred financing costs. Includes realized and unrealized gains (losses) on loans held for sale and MSR creation. (4) (5) 31.2% 29.7% 25.6% 21.9% 21.7% 4.4% 4.3% 3.2% 5.9% 8.8% 2.5% 7.5% 12.5% 17.5% 22.5% 27.5% 32.5% 37.5% Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Gross Levered Yield (ex. Gains) Gains on Loans, held for sale

NEW MICROSOFT WORD DOCUMENT_SLIDE008.GIF

Acquired portfolio ► At this stage of the credit cycle, ample inventory of opportunistic performing SBC loans ► Acquired $16.0 million of SBC loans with a weighted average coupon of 7.0% ► Acquisition pipeline of $307.0 million SBC loans(1) Number of loans 766 Unpaid principal balance(2) $378 Carrying value(2) $335 Weighted average LTV 52% Weighted average interest rate 6.3% Weighted average remaining maturity 9 years Weighted average UPB(2) $0.5 Percentage of loans fixed/floating 46% / 54% Percentage of loans perf./non-perf. 93% / 7% Portfolio Metrics Gross Levered Yield 7 As of October 27, 2017 $ in millions 15.7% 15.6% 14.3% 15.0% 14.5% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 17.0% Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17

NEW MICROSOFT WORD DOCUMENT_SLIDE009.GIF

Residential Mortgage Banking Unpaid principal balance $490.9 million % of Originations Purchased 78.8% % of Originations Refinanced 21.2% Channel - % Correspondent 37.7% Channel - % Retail 37.6% Channel - % Wholesale 24.7% Unpaid principal balance $503.9 million % of UPB- Fannie/ Freddie securitizations 62.0 % % of UPB- Ginnie Mae securitizations 26.4 % % of UPB – Other investors 11.6 % MSR Servicing Portfolio (UPB in $billions)(3) Portfolio Metrics ► MSR portfolio of approximately $6.3 billion in UPB, up 3% quarter over quarter ► Fair market value of $68.8 million ► Originations of $490.9 million(1) ► Loan sales of $503.9 million ► Origination pipeline of $193.4 million in commitments to originate residential agency loans(2) 8 Represents fully committed amounts As of September 30, 2017 Historical information relating to the GMFS servicing portfolio that existed prior to the merger with ZAIS Financial on October 31, 2016 has been included for comparative purposes. Originations Sales $5.1 $5.5 $5.8 $6.1 $6.3 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 Q3' 16 Q4' 16 Q1' 17 Q2' 17 Q3' 17

NEW MICROSOFT WORD DOCUMENT_SLIDE010.GIF

Quarterly SBC Investment Allocation Loans Acquisitions(1) Originations(1) SBC Freddie MAC Transitional SBA Total Gross investments(2) $16.0 $36.2 $126.9 $90.2 $41.3 $294.6 Number of loans 17 19 46 28 47 140 Average balance(3) $0.9 $2.7 $2.7 $6.5 $0.9 $2.8 Gross Yield(4) 7.0% 7.7% 4.2% 6.9% 6.4% 6.3% Weighted average duration(3) 6 years 7 years 13 years 3 years 21 years 7 years FX / ARM 100% / 0% 62% / 38% 64% / 36% 0% / 100% 0% / 100% 23% / 77% Avg. Advance Rate(5) 61% 73% 100% 60% 61% 73% Debt Cost(6) Libor + 325 Libor + 275 Libor + 175 Libor + 289 Libor + 350 Libor + 218 $ in millions Represents actual disbursements during the quarter. Loan acquisitions includes loans repurchased. Based on fully funded loan amount Gross yield equals contractual interest rates and accretion of discount based on Sutherland’s estimates of loan performance where applicable Weighted average advance rate of all assets of this loan type currently financed on the Company’s facilities Weighted average debt cost of all assets of this loan type currently financed on the Company’s facilities 9

NEW MICROSOFT WORD DOCUMENT_SLIDE011.GIF

SBC Portfolio Migration Towards Originated Product 10 Net of Guaranteed loan financing Net interest margin is based on interest income, which reflects contractual interest rates and accretion of discount net of interest expense, which reflects contractual interest rates and deferred financing amortization. ► 2017 business plan continues emphasis on deploying capital in Origination businesses ► Originated loans now account for over 77% of stabilized net interest margin, as compared to 56% in Q3’16 ► Franchise value increasing 10.0% 20.0% 30.0% 40.0% 50.0% Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Net Interest Margin (2) Contribution Acquired Originated SBA - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q316 Q416 Q117 Q217 Q317 Portfolio Composition (1) Originated Acquired

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SBC Portfolio Composition as of September 30, 2017 Collateral Diversification(1) SBA Segment Details(1) 11 As a percent of carrying value Multi - Family 27% Retail 22% Office 18% SBA 10% Industrial 7% Mixed Use 8% Lodging/ Residential 3% Other 5% Acquired 26% Conventional SBC 53% Transitional 21% R ETAIL S EGMENT D ETAILS (1) A VG . C ARRYING VALUE $1.6 M Day Care 11% Hotels 10% Dentists 8% Restaurants 5% Veterinarian 5% Physicians 4% Auto 3% Grocery 3% Other 51%

NEW MICROSOFT WORD DOCUMENT_SLIDE013.GIF

SBC Portfolio Composition as of September 30, 2017 Lien position(1) Loan Size(1) 12 As a percent of carrying value First Mortgage 96.5% Sub. Mortgage 3.2% Other 0.3% Top 10 Loans 8% Remaining 92% CA 16% TX 12% FL 11% NY 8% GA 7% AZ 4% IL 4% NC 4% OH 3% Other 31% G EOGRAPHIC D IVERSIFICATION (1)

NEW MICROSOFT WORD DOCUMENT_SLIDE014.GIF

Financing and Leverage Deutsche Bank L + 250 - 325 1 – Year $275 $198 Master repurchase agreement used to finance newly originated SBC loans Citibank L + 225 - 300 1 – Year $200 $150 Master repurchase agreement used to finance acquired legacy SBC loans and newly originated SBC loans J.P. Morgan L + 250 – 450 2 – Year $250 $205 Master repurchase agreement used to finance newly originated SBC loans, CRE bridge loans and acquired CRE J.P. Morgan L + 325 – 350 1 – Year $250 $219 Credit facility to fund CIT loan acquisition, legacy SBA 504 and 7(a) loans and newly originated SBA loans KeyBank L + 175 1 – Year $100 $23 Credit facility to fund Freddie Mac Small Balance originations GMFS Credit Facilities L + 212 – 230 1 – Year $295 $200 Credit facilities used to finance GMFS loans Total short-term financing $1,370 $995 Senior Secured Note Convertible note 7.5% 7.0% 5 Years 6 Years $140 $115 N/A N/A Long term financing used primarily to finance newly originated and acquired SBC and SBA loans Total short and long-term financing $1,625 $995 Bank Rate Term Facility Size(1) Available Capacity(1) Description Historical Leverage(2) 13 $ in millions Excludes reverse repurchase agreement secured by U.S. Treasuries and guaranteed loan financings 1.2x 1.1x 1.1x 1.6x 1.6x 1.9x 2.0x 1.9 x 2.3x 2.3x 0 0.5 1 1.5 2 2.5 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Recourse Total

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Sutherland Snapshot ($ amounts in thousands, except per share data) Acquired portfolio $364,724 7.7% $280,852 5.7% 14.5% SBC conventional origination portfolio $1,078,514 7.7% $831,906 4.9% 17.1% SBA Originations, Acquisitions & Servicing $499,970 10.1% $383,761 4.0% 30.5% Total $1,943,208 8.3% $1,496,519 4.8% 20.1% Investment Type Avg. Carrying Value(1) Gross Yield Avg. Debt Balance Debt Cost(2) Levered yield Book Equity Value per Common Share Third Quarter 2017 Earnings Data per Common Share 14 Average carrying value includes average quarterly carrying value of loan and servicing asset balances Sutherland finances the assets included in the Investment Type through securitizations, repurchase agreements, warehouse facilities and bank credit facilities. Interest expense is calculated based on interest expense and deferred financing amortization for the quarter ended 9/30/2017 on an annualized basis. Common Stockholders’ equity $535,715 Common Stockholders’ equity (adjusted)(3) $533,568 Total Common Shares outstanding 31,996,440 Net Book value per Common Share $16.74 Adjusted Net Book value per Common Share $16.68 Net income attributable to Sutherland Asset Management Corporation $12,374 Earnings per share – Basic and diluted $0.37 Core Earnings per share $0.38 Return on Equity per Common Share 8.9% Core Return on Equity per Common Share 9.3% Dividend yield (based on share price as of 9/30/2017) 9.4% (3) Excludes the equity component of our 2017 convertible note issuance

NEW MICROSOFT WORD DOCUMENT_SLIDE016.GIF

Investment Highlights 15  Only nationwide specialty finance company focused on SBC market and structured as a tax-efficient REIT  Compelling risk-adjusted returns due to competitive dynamics and fragmentation in the SBC market  Dual strategy of acquisitions and originations with extensive track record  Embedded origination and servicing platforms drive future growth with benefit to shareholders  Demonstrated access to cost-effective financing through securitization and bank markets  Attractive business model with $555 million of Total Stockholders’ Equity and $2.5 billion of Total Assets

NEW MICROSOFT WORD DOCUMENT_SLIDE017.GIF

Appendix

NEW MICROSOFT WORD DOCUMENT_SLIDE018.GIF

Historical Financial Performance(1) 16 Retroactively adjusted for the equivalent number of shares after reverse acquisition using an exchange rate of 0.8356 Refer to slide 19 for a reconciliation of GAAP earnings to Core earnings $0.34 $0.83 $0.29 $0.34 $0.37 $0.36 $0.35 $0.33 $0.34 $0.38 $0.36 $0.35 $0.37 $0.37 $0.37 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 $ Per share Earnings Core earnings (2) Dividend declared Bargain purchase gain $0.48

NEW MICROSOFT WORD DOCUMENT_SLIDE019.GIF

Balance Sheet by Quarter 17 Certain balances have been reclassified to match current period presentation Q3 2016 Adjusted Book Value per Share was retroactively adjusted for the equivalent number of shares after the reverse merger using an exchange rate of 0.8356 (In millions, except per share values) 9/30/2016(1) 12/31/2016(1) 3/31/2017(1) 6/30/2017(1) 9/30/2017 Assets Cash and cash equivalents $ 38.5 $ 59.6 $ 40.0 $ 63.9 $ 70.6 Restricted cash 15.9 20.2 19.8 17.6 16.1 Short term investments 250.0 320.0 239.9 - 100.0 Loans, net 1,157.1 1,011.1 1,033.8 1,175.4 892.9 Loans, held for sale, at fair value 23.3 181.8 152.2 206.7 200.3 Loans eligible for repurchase from Ginnie Mae - 138.0 117.2 105.2 101.4 Mortgage backed securities, at fair value 34.8 32.4 31.4 43.9 41.4 Servicing rights 23.4 83.8 85.0 86.8 89.4 Assets of consolidated VIEs 554.3 691.1 631.8 597.3 944.9 Other assets 51.4 67.3 176.4 150.2 46.1 Total Assets $ 2,148.7 $ 2,605.3 $ 2,527.5 $ 2,446.9 $ 2,503.1 Liabilities Secured short-term borrowings 809.8 927.5 899.3 837.1 522.8 Promissory note payable, net 9.0 7.4 7.0 6.8 6.5 Securitized debt obligations of consolidated VIEs, net 374.8 492.9 434.1 397.9 680.3 Convertible note, net - - - - 109.4 Senior secured note, net - - 73.4 138.3 138.1 Guaranteed loan financing 415.4 390.6 361.9 332.8 313.4 Contingent consideration - 14.5 8.8 8.9 9.0 Liabilities for loans eligible for repurchase from Ginnie Mae - 138.0 117.2 105.2 101.4 Accounts payable and other accrued liabilities 55.1 82.3 76.0 67.0 67.2 Total Liabilities $ 1,664.1 $ 2,053.2 $ 1,977.7 $ 1,894.1 $ 1,948.1 Stockholders’ Equity Additional paid-in capital 449.5 513.3 513.7 537.4 539.7 Retained earnings (deficit) (4.3) (0.2) (2.6) (4.0) (4.0) Sutherland Asset Management Corporation Equity 448.2 513.1 511.0 533.4 535.7 Non-controlling interests 39.4 39.0 38.8 19.4 19.3 Total Stockholders' Equity 487.9 552.1 549.8 552.8 555.1 Total Liabilities and Stockholders' Equity $ 2,147.3 $ 2,148.7 $ 2,527.5 $ 2,446.9 $ 2,503.1 Adjusted Book Value per Share(2) $ 17.21 $ 16.80 $ 16.73 $ 16.67 $ 16.68

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Statement of Income by Quarter 18 Certain balances have been reclassified to match current period presentation Q3 2016 share information has been retroactively adjusted for the equivalent number of shares after the reverse merger using an exchange rate of 0.8356 (In millions, except per share values) Q3 2016(1) Q4 2016(1) Q1 2017(1) Q2 2017(1) Q3 2017 Interest income $ 31.8 $ 32.7 $ 33.8 $ 33.2 $ 35.0 Interest expense (14.0) (15.7) (16.4) (17.2) (19.9) Net interest income before provision for loan losses 17.8 17.0 17.4 16.0 15.1 Provision for loan losses (0.5) (3.1) (1.2) (0.2) (0.5) Net interest income after provision for loan losses 17.3 13.9 16.2 15.8 14.7 Non-interest income (expense) Gains on residential mortgage banking activities, net of variable loan expenses - 3.9 10.5 11.0 10.7 Other income 1.7 3.8 0.8 1.6 1.9 Servicing income, net of amortization and impairment 1.7 4.2 4.4 5.6 6.1 Gain on bargain purchase - 15.2 - - - Employee compensation and benefits (5.7) (11.6) (14.4) (14.5) (14.7) Professional fees (3.1) (4.8) (2.2) (2.0) (2.2) Management and incentive fees (1.8) (2.0) (2.0) (2.0) (2.0) Loan servicing expense (1.8) (0.7) (1.5) (2.6) (3.4) Other operating expenses (3.4) (6.2) (5.5) (6.2) (7.4) Total non-interest income (expense) (12.4) 1.8 (9.9) (9.1) (11.0) Realized gain 2.5 6.4 3.0 4.5 5.7 Unrealized gain (loss) 3.5 12.1 1.3 1.0 2.7 Net income before income tax expense and discontinued operations 10.9 34.2 10.6 12.2 12.0 Loss from discontinued operations, net of tax - (1.8) - - - Income tax (expense) / benefit (1.3) (6.3) (1.0) (1.0) 0.3 Net income after tax expenseand discontinued operations 9.6 26.1 9.6 11.2 12.4 Less: Net income attributable to non-controlling interests 0.8 2.0 0.7 0.7 0.5 Net income attributable to Common Shareholders $ 8.8 $ 24.1 $ 8.9 $ 10.5 $ 11.8 Earnings per share(2) $ 0.34 $ 0.83 $ 0.29 $ 0.34 $ 0.37 Weighted average common shares outstanding (2) 25,870,485 28,963,695 30,549,806 30,768,900 32,026,494

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Core Earnings Reconciliation 19 Represents RSU grant for services rendered to date Q3 2016 share information has been retroactively adjusted for the equivalent number of shares after the reverse merger using an exchange rate of 0.8356 (In millions, except per share values) Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Net income $ 9.6 $ 26.1 $ 9.6 $ 11.2 $ 12.4 Reconciling items: Unrealized (gain) loss on mortgage-backed securities (0.7) 0.6 - (1.2) (0.2) Realized loss on mortgage-backed securities - 0.1 - - - Unrealized (gain) loss on mortgage servicing rights - (6.9) 1.1 1.7 1.7 Bargain purchase gain - (15.2) - - - Merger transaction costs 0.9 2.0 0.1 - - Employee severance, net of tax 0.3 0.1 - - - Restricted Stock Unit grant to Independent Directors(1) - - 0.3 - - Loss on discontinued operations - 3.0 - - - Total reconciling items $ 0.5 $ (16.3) $ 1.5 $ 0.5 $ 1.5 Core earnings before income taxes $ 10.1 $ 9.8 $ 11.1 $ 11.7 $ 13.9 Income tax adjustments - 1.3 (0.2) (0.5) (1.0) Core earnings $ 10.1 $ 11.1 $ 10.9 $ 11.2 $ 12.9 Less: Core earnings attributable to non-controlling interests 0.8 0.9 0.8 0.7 0.6 Core earnings attributable to Common Shareholders $ 9.3 $ 10.2 $ 10.1 $ 10.5 $ 12.3 Core earnings per share (2) $ 0.36 $ 0.35 $ 0.33 $ 0.34 $ 0.38 Weighted average common shares outstanding (2) 25,870,485 28,963,695 30,549,806 30,768,900 32,026,494

NEW MICROSOFT WORD DOCUMENT_SLIDE022.GIF

Small Cap CRE Price Relationships Through the Cycle 20