SFO Merrill Lynch

JACKSONVILLE, Fla., Oct. 28 /PRNewswire-FirstCall/ -- Sunset Financial Resources, Inc. (NYSE:SFO), today announced that a Special Committee of the Board of Directors, comprised of independent directors, has hired Banc of America Securities LLC to perform a review of the Company's business plan and to advise the Special Committee regarding exploring other alternatives to maximize shareholder value. During recent months, the Company has made significant additions to the senior management team, including the appointment of George Deehan as Chief Executive Officer and Stacy Riffe as Chief Financial Officer. The Board has also added two independent directors, Charles Wolcott and Charles Van Sickle, bringing the number of independent directors of the board to five. George Deehan, President and Chief Executive Officer of Sunset stated, "Our Board of Directors and management are strongly committed to acting in the best interests of all of our shareholders. Over the past several months, we have given much thought to the prospects for our business and the options available to us to create value. We have also spent considerable time listening to our shareholders, and with the new management team firmly in place and the newly constituted board, now is an opportune time to analyze the Company's business plan and all strategic alternatives available to the Company." Sunset cautioned that no decision had been made to pursue any strategic alternative and there could be no assurance that the exploration of strategic alternatives would result in any definitive agreement or transaction. About Sunset Financial Resources Sunset Financial Resources, Inc. is a self-managed real estate investment trust (REIT) that went public on March 17, 2004. Sunset Financial Resources seeks to deliver attractive dividend income and steady growth to its shareholders through the acquisition and management of a portfolio of high quality residential mortgage loans and well secured commercial mortgage bridge loans in the United States. Certain statements in this news release may constitute "forward-looking statements" within the meaning of the federal securities laws and involve risks, uncertainties and other factors, which may cause the actual performance of Sunset Financial Resources, Inc. to be materially different from the performance expressed or implied by such statements. These risks include the failure of the Company to successfully execute its business plan, gain access to additional financing, the availability of additional loan portfolios for future acquisition, continued qualification as a REIT, the cost of capital, as well as the additional risks and uncertainties detailed in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. DATASOURCE: Sunset Financial Resources, Inc. CONTACT: George Deehan, President, Chief Operating Officer, Sunset Financial Resources, +1-904-425-4353, ; Investors: Jeffrey Goldberger, +1-212-896-1249, , or Michael Cimini, +1-212-896-1233, , both of KCSA Worldwide for Sunset Financial Resources

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