Sutherland Asset Management Corp (Form: 8-K, Received: 05/09/2017 16:53:27)

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): May 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 May 9, 2017, the Company issued an earnings release announcing the financial results for the quarter ended March 31, 2017. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

On May 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 May 9, 2017
99.2		Supplemental Financial Information for the quarter ended March 31, 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: May 9, 2017

Exhibit 99.1

SUTHERLAND ASSET MANAGEMENT CORPORATION ANNOUNCES FIRST QUARTER 2017 RESULTS

- Originated Approximately $640 Million of Loans During First Quarter 2017 -

- Declared and Paid First Quarter 2017 Dividend of $0.37 Per Share -

New York, New York, May 9, 2017 / PRNewswire / – Sutherland Asset Management Corporation (“Sutherland” or the “Company”) (NYSE: SLD) today reported financial results for the quarter ended March 31, 2017.

First Quarter Highlights:

Net income of $9.6 million, or $0.29 per share of common stock

Core earnings of $10.9 million, or $0.33 per share of common stock

Net Book Value of $16.73 per share of common stock as of March 31, 2017

Originated $148.4 million of small balance commercial (“SBC”) loans

Originated $28.5 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program

Originated $461.0 million of residential mortgage loans

Completed a $75.0 million debt offering in February 2017 with the issuance of 7.5% Senior Secured Notes

Highlight Subsequent to Quarter End

The Company and its origination subsidiary, GMFS, LLC (“GMFS”) entered into a definitive agreement to settle all claims with a counterparty relating to asserted claims against GMFS; the financial impact of the settlement is reflected on the Balance Sheet as of March 31, 2017 and the settlement did not result in a charge to our earnings or otherwise adversely impact our results of operations.

A summary of Sutherland’s operating results for the quarter ended March 31, 2017 is presented below. Sutherland reported U.S. GAAP net income for the three months ended March 31, 2017 of $9.6 million, or $0.29 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $10.9 million, or $0.33 per share of common stock.

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

Thomas Capasse, Chairman and Chief Executive Officer commented, “Sutherland continues its efforts to accelerate its pace of originations reaching approximately $640 million in our first quarter. While we would have preferred to produce stronger results in the quarter, we are still overcoming the drag on the cash on our balance sheet, which should dissipate in the coming quarters. With a robust pipeline across our core businesses, SBA, SBC and Residential, along with our proven securitization capabilities, Sutherland is positioned to build on our history of success and to grow our platform in efforts to build value for our shareholders.”

Common Dividends

During the first 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 March 31, 2017 to common stockholders and OP unit holders of record as of March 31, 2017. The dividend was paid on April 13, 2017.

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, losses on discontinued operations and non-recurring 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 March 31, 2017:


(In Millions)
Net Income	$	9.6
Reconciling items:
Unrealized (gain) loss on mortgage servicing rights		1.1
Merger transaction costs		0.1
Restricted Stock Unit (RSU) grant to Independent Directors (1)		0.3
Total reconciling items		1.5
Income tax adjustments		(0.2)
Core earnings	$	10.9
(1) Represents RSU grant for services rendered to date.

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Wednesday May 10, 2017 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended March 31, 2017. The conference call can be accessed by dialing 888-438-5453 (domestic) or 719-457-2628 (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 May 24, 2017. To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 5677994.

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)	March 31, 2017		December 31, 2016
Assets:
Cash and cash equivalents	$	40,000	$	59,566
Restricted cash		19,772		20,190
Short-term investments		239,856		319,984
Loans, held-for-investment (net of allowances for loan losses of $12,610 at March 31, 2017 and $12,721 at December 31, 2016)		926,106		929,529
Loans, held at fair value		107,691		81,592
Loans, held for sale, at fair value		152,231		181,797
Mortgage backed securities, at fair value		31,365		32,391
Loans eligible for repurchase from Ginnie Mae		117,229		137,986
Derivative instruments, at fair value		4,351		5,785
Servicing rights		20,372		22,478
Residential mortgage servicing rights, at fair value		64,625		61,376
Receivable from third parties		111,221		7,220
Other assets		60,938		54,277
Assets of consolidated VIEs		631,765		691,096
Total Assets	$	2,527,522	$	2,605,267
Liabilities:
Borrowings under credit facilities		266,323		326,610
Promissory note payable		7,046		7,378
Securitized debt obligations of consolidated VIEs		434,055		492,942
Borrowings under repurchase agreements		632,951		600,852
Senior secured note		73,390		—
Guaranteed loan financing		361,916		390,555
Contingent consideration		8,841		14,487
Liabilities for loans eligible for repurchase from Ginnie Mae		117,229		137,986
Derivative instruments, at fair value		619		643
Dividends payable		12,162		11,505
Accounts payable and other accrued liabilities		63,130		70,207
Total Liabilities	$	1,977,662	$	2,053,165
Stockholders’ Equity:
Common stock, $0.0001 par value, 500,000,000 shares authorized, 30,549,084 and 30,549,084 shares issued and outstanding, respectively		3		3
Additional paid-in capital		513,658		513,295
Retained deficit		(2,648)		(201)
Total Sutherland Asset Management Corporation equity		511,013		513,097
Non-controlling interests		38,847		39,005
Total Stockholders’ Equity	$	549,860	$	552,102
Total Liabilities and Stockholders’ Equity	$	2,527,522	$	2,605,267

SUTHERLAND ASSET MANAGEMENT CORPORATION

Unaudited CONSO LIDATED STATEMENTS OF INCOME


	Three Months Ended March 31,
(In Thousands, except share data)	2017		2016
Interest income
Loans, held-for-investment	$	30,101	$	32,332
Loans, held at fair value		1,626		3,362
Loans, held for sale, at fair value		1,434		—
Mortgage backed securities, at fair value		723		2,173
Total interest income		33,884		37,867
Interest expense
Securitized debt obligations of consolidated VIEs		(5,122)		(4,541)
Borrowings under repurchase agreements		(4,221)		(3,859)
Guaranteed loan financing		(3,264)		(3,949)
Borrowings under credit facilities		(2,976)		(1,952)
Senior secured note		(790)		—
Promissory note payable		(68)		—
Total interest expense		(16,441)		(14,301)
Net interest income before provision for loan losses		17,443		23,566
Provision for loan losses		(1,232)		(2,184)
Net interest income after provision for loan losses		16,211		21,382
Other income (expense)
Other income		2,702		2,308
Servicing income, net of amortization and impairment of $2,765 and $1,212 respectively		4,442		1,413
Employee compensation and benefits		(13,464)		(5,070)
Allocated employee compensation and benefits from related party		(1,012)		(900)
Professional fees		(2,159)		(1,776)
Management fees – related party		(1,977)		(1,838)
Loan servicing expense		(1,513)		(876)
Other operating expenses		(12,508)		(3,863)
Total other income (expense)		(25,489)		(10,602)
Net realized gain on financial instruments		20,261		191
Net unrealized loss on financial instruments		(392)		(336)
Income from continued operations before income tax provisions		10,591		10,635
Provision for income taxes		(1,034)		(1,171)
Net income from continuing operations		9,557		9,464
Discontinued operations
Loss from discontinued operations (including loss on disposal of $267 in in the three months ended March 31, 2016)		—		(576)
Income tax benefit		—		225
Loss from discontinued operations		—		(351)
Net income		9,557		9,113
Less: Net income attributable to non-controlling interest		701		737
Net income attributable to Sutherland Asset Management Corporation	$	8,856	$	8,376
Basic and diluted earnings (loss) per share:
Continuing operations	$	0.29	$	0.34
Discontinued operations	$	—	$	(0.01)
Basic and diluted weighted-average shares outstanding		30,549,806		25,764,953
Dividends declared per share of common stock	$	0.37	$	—

SUTHERLAND ASSET MANAGEMENT CORPORATION

Unaudited SEGMENT REPORTING

fOR THE THREE MONTHS ENDED March 31, 2017


			SBC		SBA Originations,		Residential
	Loan		Conventional		Acquisitions,		Mortgage
(In Thousands)	Acquisitions		Originations		and Servicing		Banking		Consolidated
Interest income
Loans, held-for-investment	$	18,567	$	1,191	$	10,143	$	200	$	30,101
Loans, held at fair value		264		1,362		—		—		1,626
Loans, held for sale, at fair value		421		183		—		830		1,434
Mortgage backed securities, at fair value		723		—		—		—		723
Total interest income	$	19,975		2,736	$	10,143	$	1,030	$	33,884
Interest expense
Securitized debt obligations of consolidated VIEs		(4,824)		—		(298)		—		(5,122)
Borrowings under repurchase agreements		(3,016)		(1,205)		—		—		(4,221)
Guaranteed loan financing		—		—		(3,264)		—		(3,264)
Borrowings under credit facilities		(1,676)		(189)		(425)		(686)		(2,976)
Senior secured note		—		(790)		—		—		(790)
Promissory note payable		(68)		—		—		—		(68)
Total interest expense	$	(9,584)	$	(2,184)	$	(3,987)	$	(686)	$	(16,441)
Net interest income before provision for loan losses	$	10,391	$	552	$	6,156	$	344	$	17,443
Provision for loan losses		(622)		(96)		(514)		—		(1,232)
Net interest income after provision for loan losses	$	9,769	$	456	$	5,642	$	344	$	16,211
Other income (expense)
Other income	$	134	$	554	$	133	$	1,881	$	2,702
Servicing income		6		(503)		797		4,142		4,442
Employee compensation and benefits		(621)		(2,026)		(2,199)		(8,618)		(13,464)
Allocated employee compensation and benefits from related party		(584)		(142)		(162)		(124)		(1,012)
Professional fees		(1,044)		(328)		(487)		(300)		(2,159)
Management fees – related party		(1,140)		(277)		(317)		(243)		(1,977)
Loan servicing expense		(900)		(247)		1,108		(1,474)		(1,513)
Other operating expenses		(1,593)		(1,804)		(885)		(8,226)		(12,508)
Total other income (expense)	$	(5,742)	$	(4,773)	$	(2,012)	$	(12,962)	$	(25,489)
Net realized gain on financial instruments		592		1,320		1,054		17,295		20,261
Net unrealized gain (loss) on financial instruments		605		1,018		211		(2,226)		(392)
Net income before income tax provisions	$	5,224	$	(1,979)	$	4,895	$	2,451	$	10,591
Provision for income taxes		103		260		(907)		(490)		(1,034)
Net income	$	5,327	$	(1,719)	$	3,988	$	1,961	$	9,557
Less: Net income attributable to non-controlling interests										701
Net income attributable to Sutherland Asset Management Corporation									$	8,856
Total Assets	$	1,459,837	$	213,937	$	543,666	$	310,082	$	2,527,522

Exhibit 99.2

Supplemental Financial Data First Quarter 2017

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 March 31, 2017, unless otherwise noted. 1

First Quarter 2017 Highlights ► Net income of $9.6 million(1), or $0.29 per common share ► Core earnings of $10.9 million(1), or $0.33 per common share ► Declared dividend of $0.37 per share for the first quarter ► Net book value of $16.73 per common share at March 31, 2017 ► Originations(5) for the quarter: ► $148.4 million in SBC loans ► $28.5 million in SBA loans ► $461.0 million in Residential mortgage loans ► Completed the issuance of $75.0 million 7.5% Senior Secured Notes in February 2017 ► On April 25, 2017, the Company and GMFS entered into a definitive agreement to settle all claims with a counterparty relating to asserted claims against GMFS; the financial impact is reflected on the 3/31/17 Balance Sheet and the settlement did not result in a charge to the Company’s earnings or otherwise adversely impact its results of operations Returns 1Q 2017 Return on Equity(2) 6.9% Core Return on Equity(3) 7.9% Dividend Yield(4) 10.2% 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 3/31/2017 share price of $14.45 Represents fully committed amounts 2

GAAP ROE(2) CORE ROE LEVERED YIELD(1) EQUITY ALLOCATION 1Q2017 1Q2017 4Q2016 4Q2016 BUSINESS LINE Acquisitions 14.2% 20.8% SBC Conventional Originations 10.5% 49.2% SBA Originations, Acquisitions & Servicing 24.4% 18.6% Residential Mortgage Banking(3) 15.3% 11.4% Cash and other non-earnings assets, net Realized & unrealized gains, net Corporate debt financing Operating income and expenses, net Investment advisory fees Provision for income taxes Non-recurring expenses, net Return on Equity before bargain purchase gain Bargain purchase gain Return on Equity amortization of deferred financing costs on an annualized basis (3) ROE based on net income of the Residential Mortgage Banking business line divided by the business line’s equity. (1) Levered yields for the quarter ended 3/31/2017 include interest income, accretion of discount, MSR creation, and servicing income net of interest expense and3 (2) Based on GAAP Net Income 14.7% (1.3%) 5.3% (0.6%) (8.3%) (1.4%) (0.5%) --7.9% --7.9% 15.5% (2.5%) 7.2% --(8.1%) (1.5%) (2.2%) --8.4% --8.4% 19.3% (3.2%) 6.6% --(8.1%) (1.5%) (1.2%) (3.8%) 8.1% 11.5% 19.6% 14.4% (1.3%) 4.7% (0.6%) (8.3%) (1.4%) (0.4%) (0.2%) 6.9% --6.9% RETURN ON EQUITY – FIRST QUARTER 2017

► At this stage of the credit cycle, ample inventory of opportunistic performing SBC loans ► Acquired $11.0 million of loans ► Acquisition pipeline of $128 million SBC loans(2) GROSS LEVERED YIELD PORTFOLIO METRICS 25.0% 22.2% 20.0% 15.7% 15.6% 14.2% 15.0% 10.0% 5.0% 0.0% Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 (2) As of May 1, 2017 (1) $ in thousands4 17.0% Number of loans 885 Unpaid principal balance(1) $466,587 Carrying value(1) $408,343 Weighted average LTV 55% Weighted average interest rate 6.0% Weighted average maturity 120 months Weighted average UPB $527,217 Percentage of loans fixed/floating 46% / 54% Percentage of loans perf./non-perf. 94% / 6% ACQUIRED PORTFOLIO

SBC Conventional Originations ► Originations of $148.4 million(1), 45% of which are floating rate ► Post-election rise in 10-year Treasury yields likely to benefit SBC conventional originations ► Extended $250 million repo facility for an additional year through February 2018 ► Origination pipeline of $192.3 million(2) Number of loans 297 Unpaid principal balance(3) $784,803 Carrying value(3) $800,966 Weighted average LTV 62% Weighted average interest rate 6.1% Weighted average maturity 62 months Weighted average UPB $2,642,435 Percentage of loans fixed/floating 73% / 27% Percentage of loans perf./non-perf. 100% / 0% Portfolio Metrics Gross Levered Yield 5 Represents fully committed amounts As of May 4, 2017 $ in thousands 15.0% 11.6% 13.0% 12.5% 10.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17

SBA Originations, Acquisitions & Servicing Number of loans 2,398 Unpaid principal balance(1) $588,289 Carrying value(1) $520,665 Weighted average LTV 80% Weighted average interest rate 5.4% Weighted average maturity 168 months Weighted average UPB $245,325 Percentage of loans fixed/floating 1% / 99% Percentage of loans perf./non-perf. 96% / 4% Gross Levered Yield Portfolio Metrics ► $10.6 million of SBA secondary market loans sales with an average sale premium of 10.9% ► Originated $28.5 million(1), up 108% quarter on quarter ► Origination pipeline in excess of $80 million(2) 6 Represents fully committed amounts $ in thousands As of May 2, 2017 31.2% 29.1% 28.6% 28.4% 24.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17

Residential Mortgage Banking Unpaid principal balance $461.0 million % of Originations Purchased 74.4% % of Originations Refinanced 25.6% Unpaid principal balance $481.7 million % of UPB- Fannie/ Freddie securitizations 62.0 % % of UPB- Ginnie Mae securitizations 25.5 % % of UPB – Other investors 12.5 % MSR Servicing Portfolio (UPB in $billions)(3) Portfolio Metrics – Q1 2017 ► Operates through our wholly-owned subsidiary, GMFS, LLC, which was acquired from ZAIS Financial in fourth quarter 2016 ► GMFS originates residential mortgage loans eligible to be purchased, guaranteed or insured by Fannie Mae, Freddie Mac, FHA, USDA and VA through retail, correspondent and broker channels ► MSR portfolio of approximately $5.8 billion in UPB with fair market value of $64.6 million ► Originations of $461.0 million(1) ► Loan sales of $481.7 million ► Origination pipeline of $248.7 million in commitments to originate residential agency loans(2) 7 Originations Sales Represents fully committed amounts As of March 31, 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. $4.4 $4.8 $5.1 $5.5 $5.8 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17

Quarterly Investment Allocation Acquisitions(1) Originations(1) SBC Freddie MAC Transitional SBA Residential Total Gross investments(2) $11,310 $27,499 $69,666 $45,376 $25,896 $460,996 $629,433 Number of loans 8 14 36 6 30 2,296 2,382 Average balance(3) $1,352 $2,592 $1,935 $9,745 $1,172 $199 $261 Gross Yield(4) 6.7% 6.0% 4.2% 6.9% 6.4% 4.1% 4.6% Weighted average duration(3) 25 months 76 months 149 months 32 months 227 months 341 months 274 months FX / ARM 100% / 0% 74% / 26% 72% / 28% 23% / 77% 0% / 100% 100% / 0% 83% / 17% Avg. Advance Rate(5) 68% 64% 100% 62% 40% 97% 72% Debt Cost(6) Libor + 318 Libor + 250 Libor + 175 Libor + 272 Libor + 350 Libor + 225 Libor + 251 $ in thousands Represents actual disbursements during the quarter. 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 8

Net Interest Margin(1) Contribution by SBC Operating Segment 9 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 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Acquired Originated SBA

SBC Portfolio Composition as of March 31, 2017 Collateral Diversification(1) SBA Segment Details(1) 10 As a percent of carrying value Multi - Family 22% Retail 20% Office 17% SBA 12% Industrial 9% Mixed Use 7% Lodging/ Residential 7% Other 6% Acquired 33% Conventional SBC 63% Transitional 4% R ETAIL S EGMENT D ETAILS (1 ) A VG . C ARRYING VALUE $1.3 M Day Care 12% Dentists 9% Hotels 9% Restaurants 6% Veterinarian 6% Physicians 5% Grocery 3% Auto 3% Other 47%

SBC Portfolio Composition as of March 31, 2017 Lien position(1) Loan Size(1) 11 As a percent of carrying value First Mortgage 96% Sub. Mortgage 3.5% Other 0.5% Top 10 Loans 7% Remaining 93% CA 17% TX 12% FL 10% NY 9% GA 6% AZ 4% NC 3% PA 3% IL 3% Other 33% G EOGRAPHIC D IVERSIFICATION (1)

Financing and Leverage Deutsche Bank L + 250 - 325 1 – Year $275 $185 Master repurchase agreement used to finance newly originated SBC loans Citibank L + 300 1 – Year $200 $98 Master repurchase agreement used to finance legacy SBC loans J.P. Morgan L + 250 – 450 2 – Year $100 $30 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 $114 Credit facility to fund CIT loan acquisition, legacy SBA 504 and 7(a) loans and newly originated SBA loans KeyBank L + 175 1 – Year $50 $17 Credit facility to fund Freddie Mac Small Balance originations GMFS Credit Facilities L + 225 – 230 1 – Year $205 $108 Credit facilities used to finance GMFS loans Total short-term financing $1,080 $551 Senior Secured Note 7.5% 5 Years $75 N/A Senior secured note used primarily to finance newly originated SBC and SBA loans Total short and long-term financing $1,155 $551 Bank Rate Term Facility Size(1) Available Capacity(1) Description Historical Leverage(2) 12 $ in millions Excludes reverse repurchase agreement secured by U.S. Treasuries and guaranteed loan financings 1.1x 1.1x 1.2x 1.1x 1.1x 2.0x 1.9x 1.9 x 2.0x 2.0x 0 0.5 1 1.5 2 2.5 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Recourse Total

• Completed $75 million, 7.5%, due 2022 • Fund new originations or acquisitions of up to approximately $300 million Secured Note Offering • 5-10 additional loan officers hired in 2017 • Accelerated loan screening process • Enhance and expand affinity relationships Increase Origination Volumes Planned Securitizations -Transitional Loan CLO -Acquired SBC Owner Occupied -Originated Freddie Mac • Ability to optimize leverage on the transitional loan portfolio • Expected decrease in cost of capital • Conversion of loan portfolio into liquid securities • Reduction in Taxable REIT Subsidiary tax drag (effects included in 1Q2017 earnings) • Transfer of taxable income to tax efficient entities Tax Efficient Structure 13 2017 STRATEGIC INITIATIVES

Sutherland Snapshot ($ amounts in thousands, except per share data) Acquired portfolio $413,593 7.6% $309,113 5.4% 14.2% SBC conventional origination portfolio $809,535 6.3% $561,952 4.4% 10.5% SBA Originations, Acquisitions & Servicing $551,563 7.0% $457,880 3.5% 24.4% Total $1,774,691 6.8% $1,328,945 4.3% 14.3% Investment Type Avg. Carrying Value Gross Yield(1) Avg. Debt Balance Debt Cost(2) Levered yield(3) Book Equity Value per Common Share First Quarter 2017 Earnings Data per Common Share 14 Gross yields are based on interest income, MSR creation, and net servicing income for the quarter ended 3/31/2017 on an annualized basis, which reflects contractual interest rates and accretion 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 3/31/2017 on an annualized basis. Levered yields for the quarter ended 3/31/2017 include interest income, accretion of discount, MSR creation, and servicing income net of interest expense and amortization of deferred financing costs on an annualized basis Common Stockholders’ equity $511,013 Total Common Shares outstanding 30,549,084 Book value per Common Share $16.73 Net income attributable to Sutherland Asset Management Corporation $8,856 Earnings per share – Basic and diluted $0.29 Core Earnings per share $0.33 Return on Equity per Common Share 6.9% Core Return on Equity per Common Share 7.9% Dividend yield (based on share price as of 3/31/2017) 10.2%

Investment Highlights 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 $550 million of Total Stockholders’ Equity and $2.5 billion of Total Assets 15

Appendix

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 $0.33 $0.31 $0.34 $0.83 $0.29 $0.37 $0.32 $0.36 $0.35 $0.33 $0.45 $0.45 $0.36 $0.35 $0.37 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 $ Per share Earnings Adjusted core earnings (2) Dividend declared Bargain purchase gain $0.48

Balance Sheet by Quarter 17 Retroactively adjusted for the equivalent number of shares after reverse acquisition using an exchange rate of 0.8356 (In millions, except per share values) 3/31/2016 6/30/2016 9/30/2016 12/31/2016 3/31/2017 Assets Cash and cash equivalents $ 59.9 $ 55.0 $ 38.5 $ 59.6 $ 40.0 Restricted cash 16.7 14.7 15.9 20.2 19.8 Short term investments 250.0 250.0 250.0 320.0 239.9 Loans, held at fair value 174.3 212.9 233.6 81.6 107.7 Loans held for sale, at fair value - - 23.3 181.8 152.2 Loans, held-for-investment 899.5 939.0 923.5 929.5 926.1 Loans eligible for repurchase from Ginnie Mae - - - 138.0 117.2 Mortgage backed securities, at fair value 117.1 27.0 34.8 32.4 31.4 Servicing rights 26.0 24.4 23.4 83.8 85.0 Assets of consolidated VIEs 622.7 577.5 554.3 691.1 631.8 Other assets 51.1 46.8 51.4 67.3 176.4 Total Assets $ 2,217.3 $ 2,147.3 $ 2,148.7 $ 2,605.3 $ 2,527.5 Liabilities Borrowings under credit facilities 161.4 191.0 228.0 326.6 266.3 Promissory note payable - 9.2 9.0 7.4 7.0 Securitized debt obligations of consolidated VIEs 435.0 401.8 374.8 492.9 434.1 Borrowings under repurchase agreements 614.6 568.8 581.8 600.9 633.0 Senior secured note - - - - 73.4 Guaranteed loan financing 470.6 439.5 415.4 390.6 361.9 Contingent consideration - - - 14.5 8.8 Liabilities for loans eligible for repurchase from Ginnie Mae - - - 138.0 117.2 Accounts payable and other accrued liabilities 46.4 49.1 55.1 82.3 76.0 Total Liabilities $ 1,728.0 $ 1,659.4 $ 1,664.1 $ 2,053.2 $ 1,977.7 Stockholders’ Equity Additional paid-in capital 447.2 449.5 449.5 513.3 513.7 Retained earnings (deficit) 2.5 (1.3) (4.3) (0.2) (2.6) Sutherland Asset Management Corporation Equity 449.7 448.2 445.2 513.1 511.0 Non-controlling interests 39.6 39.7 39.4 39.0 38.8 Total Stockholders' Equity 489.3 487.9 484.6 552.1 549.8 Total Liabilities and Stockholders' Equity $ 2,217.3 $ 2,147.3 $ 2,148.7 $ 2,605.3 $ 2,527.5 Book Value per Share(1) $ 17.46 $ 17.32 $ 17.21 $ 16.80 $ 16.73

Statement of Income by Quarter 18 Certain balances have been reclassified to match current period presentation Retroactively adjusted for the equivalent number of shares after reverse acquisition using an exchange rate of 0.8356 (In millions, except per share values) Q1 2016(1) Q2 2016(1) Q3 2016(1) Q4 2016 Q1 2017 Interest income Loans, held-for-investment $ 32.3 $ 30.8 $ 27.0 $ 26.9 $ 30.1 Loans, held at fair value 3.4 2.8 4.0 3.3 1.6 Loans, held for sale, at fair value - - - 1.6 1.4 Mortgage backed securities, at fair value 2.2 1.0 0.8 0.9 0.7 Total interest income 37.9 34.6 31.8 32.7 33.8 Interest expense Credit facilities and promissory note (2.0) (2.1) (2.4) (3.3) (3.0) Securitized debt obligations (4.5) (4.5) (4.2) (4.4) (5.1) Borrowings under repurchase agreements (3.9) (3.6) (4.1) (4.7) (4.2) Guaranteed loan financing (3.9) (3.5) (3.3) (3.3) (3.3) Senior secured note - - - - (0.8) Total interest expense (14.3) (13.7) (14.0) (15.7) (16.4) Net interest income before provision for loan losses 23.6 20.9 17.8 17.0 17.4 Provision for loan losses (2.2) (2.0) (0.5) (3.1) (1.2) Net interest income after provision for loan losses 21.4 18.9 17.3 13.9 16.2 Other income (expense) Other income 2.4 1.3 1.7 5.2 2.7 Servicing income, net of amortization and impairment 1.4 1.4 1.7 4.2 4.4 Gain on bargain purchase - - - 15.2 - Employee compensation and benefits (6.0) (5.0) (5.7) (11.6) (14.5) Professional fees (1.8) (3.7) (3.1) (4.8) (2.2) Management and incentive fees (1.8) (1.8) (1.8) (2.0) (2.0) Loan servicing expense (0.9) (1.2) (1.8) (0.7) (1.5) Other operating expenses (4.0) (3.8) (3.4) (6.8) (12.4) Total other income (expense) (10.7) (12.8) (12.4) (1.3) (25.5) Realized gain 0.1 1.1 2.5 12.3 20.3 Unrealized gain (loss) (0.3) 2.6 3.5 9.3 (0.4) Net income before income tax expense and discontinued operations 10.5 9.8 10.9 34.2 10.6 Loss from discontinued operations, net of tax (0.4) - - (1.8) - Income tax expense (1.0) (1.2) (1.3) (6.3) (1.0) Net income after tax expenseand discontinued operations 9.1 8.6 9.6 26.1 9.6 Less: Net income attributable to non-controlling interests 0.7 0.7 0.8 2.0 0.7 Net income attributable to Common Shareholders $ 8.4 $ 7.9 $ 8.8 $ 24.1 $ 8.9 Earnings per share(1) $ 0.33 $ 0.31 $ 0.34 $ 0.83 $ 0.29 Weighted average common shares outstanding (2) 25,764,953 25,739,847 25,870,485 28,963,695 30,549,806

Core Earnings Reconciliation 19 Represents RSU grant for services rendered to date Certain balances have been reclassified to match current period presentation Retroactively adjusted for the equivalent number of shares after reverse acquisition using an exchange rate of 0.8356 (In millions, except per share values) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Net income $ 9.1 $ 8.6 $ 9.6 $ 26.1 $ 9.6 Reconciling items: Unrealized (gain) loss on mortgage-backed securities (2.0) (1.6) (0.7) 0.6 - Realized loss on mortgage-backed securities 3.1 0.5 - 0.1 - Unrealized (gain) loss on mortgage servicing rights - - - (6.9) 1.1 Bargain purchase gain - - - (15.2) - Merger transaction costs - 1.7 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 0.6 - - 3.0 - Total reconciling items $ 1.7 $ 0.6 $ 0.5 $ (16.3) $ 1.5 Core earnings before income taxes $ 10.8 $ 9.2 $ 10.1 $ 9.8 $ 11.1 Income tax adjustments (0.3) - - 1.3 (0.2) Core earnings $ 10.5 $ 9.2 $ 10.1 $ 11.1 $ 10.9 Less: Core earnings attributable to non-controlling interests 0.9 1.0 0.8 0.9 0.8 Core earnings attributable to Common Shareholders $ 9.6 $ 8.2 $ 9.3 $ 10.2 $ 10.1 Core earnings per share (2) $ 0.37 $ 0.32 $ 0.36 $ 0.35 $ 0.33 Weighted average common shares outstanding (3) 25,764,953 25,739,847 25,870,485 28,963,695 30,549,806