Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Q1 2022 Earnings Presentation
35 slides from Granite Point Mortgage Trust's earnings presentation, May 11, 2022
Slide 1: First Quarter 2022 Earnings Presentation
First Quarter 2022 Earnings Presentation May 11, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains, or incorporates by reference, not only historical information, but also forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Our ac
Slide 3: Cautionary Statement Regarding Endnotes
Cautionary Statement Regarding Endnotes You are encouraged to carefully read the endnotes that are a part of this presentation and start on slide 20 hereto. The endnotes include important information, including details regarding the assumptions we utilize to prepare the illustrative examples contain
Slide 4: Recent Accomplishments Have the Ability to Meaningfully Improve Run-Rate Earnings
Recent Accomplishments Have the Ability to Meaningfully Improve Run-Rate Earnings OVER THE LAST FEW QUARTERS WE HAVE CONTINUED TO EXECUTE ON OUR STRATEGIC PRIORITIES, WHICH HAVE REPOSITIONED OUR BALANCE SHEET WITH THE GOAL OF IMPROVING OUR RUN-RATE EARNINGS(1) AND DIVIDENDS OVER TIME(2) ✓ Resolved t
Slide 5: The Benefits of Our Actions Have Not Yet Been Fully Reflected in Our Financial Results
The Benefits of Our Actions Have Not Yet Been Fully Reflected in Our Financial Results (5) ACTIONS WE HAVE ALREADY TAKEN, WHEN FULLY-REFLECTED IN OUR FINANCIAL RESULTS, HAVE THE ABILITY TO MEANINGFULLY INCREASE OUR RUN-RATE PROFITABILITY • Our current investment pipeline of about $200 million of tot
Slide 6: Potential Offsets to the Impact of Rising Short-Term Interest Rates
Potential Offsets to the Impact of Rising Short-Term Interest Rates (8) ILLUSTRATIVE SENSITIVITY OF QUARTERLY NET INTEREST INCOME PER SHARE TO CHANGES IN BENCHMARK INTEREST RATES AND ILLUSTRATIVE POTENTIAL FULLY-REFLECTED NET IMPACT OF RECENT ACTIONS(9) Interest Rate at Change in 1-Month U.S. LIBOR/
Slide 7: Further Actions May Generate Additional Benefits
Further Actions May Generate Additional Benefits WE BELIEVE THAT OUR RECENT ACCOMPLISHMENTS, COMBINED WITH THE ADDITIONAL STEPS WE ARE ACTIVELY PURSUING, HAVE THE ABILITY TO GENERATE ATTRACTIVE TOTAL RETURNS TO OUR STOCKHOLDERS KEY PRIORITIES AND GOALS(10) • Resolving the one remaining nonaccrual lo
Slide 8: Potential Attractive Total Return
Potential Attractive Total Return (11) • Our overall objective is to deliver attractive risk-adjusted ILLUSTRATIVE EXAMPLE WITH POTENTIAL TOTAL RETURN OF 68%(12) total returns to our stockholders by generating an attractive dividend income stream while preserving our Total Implied investors’ capital
Slide 9: Post Quarter-End Business Update
Post Quarter-End Business Update ▪ Defensively positioned and broadly diversified portfolio of 100% CRE loans (over 99% senior first mortgages) with weighted average stabilized LTV of 63.2%*. PORTFOLIO CREDIT QUALITY ▪ Strong collections of interest through April 2022, with 100% of borrowers making
Slide 10: First Quarter 2022 Highlights
First Quarter 2022 Highlights ▪ GAAP earnings* of $1.0 million, or $0.02 per basic share, inclusive of $(5.8) million, or $(0.11) per basic share, charge on early extinguishment of debt and $(3.7) million, or $(0.07) per basic share, provision for credit losses. FINANCIAL ▪ Distributable Earnings**
Slide 11: First Quarter 2022 Financial Summary
First Quarter 2022 Financial Summary SUMMARY INCOME STATEMENT SUMMARY BALANCE SHEET ($ IN MILLIONS, EXCEPT PER SHARE DATA) ($ IN MILLIONS, EXCEPT PER SHARE DATA, REFLECTS CARRYING VALUES) Net Interest Income $23.5 Cash $148.2 (Provision for) Credit Losses $(3.7) Loans Held-for-Investment, net $3,750
Slide 12: Key Drivers of First Quarter 2022 Earnings and Book Value Per Share
Key Drivers of First Quarter 2022 Earnings and Book Value Per Share • GAAP earnings* of $1.0 million, or $0.02 per basic share, inclusive of a $(5.8) million, or $(0.11) per basic share, loss on early extinguishment of debt related to partial repayment of the term loan and a $(3.7) million, or $(0.0
Slide 13: First Quarter 2022 Portfolio Activity
First Quarter 2022 Portfolio Activity • Total funding activity of $172.9 million: ORIGINATIONS BY PROPERTY TYPE(15) – Closed on $153.7 million of total commitments; $142.4 million of new originations, and one loan upsize of $11.3 million. Initial fundings of new loans of $131.6 million. • Weighted a
Slide 14: Historical Portfolio Principal Balance
Historical Portfolio Principal Balance 2022 YEAR TO DATE PORTFOLIO ACTIVITY(16) PORTFOLIO SINCE INCEPTION(18) $5,000 $5,000 $4,169 Total maximum $4,288 commitments $4,000 $372 $3,932 $173 $(172) Future funding $4,000 $3,797 $3,797 $3,797 $3,797 commitments $3,233 $ In Millions $3,000 $3,000 $ In Mil
Slide 15: Investment Portfolio as of March 31, 2022
Investment Portfolio as of March 31, 2022 High-quality, well-diversified, 98% floating-rate portfolio comprised of over 99% senior first mortgage loans with a weighted average stabilized LTV at origination of 63.2%.* KEY PORTFOLIO STATISTICS PROPERTY TYPE(15) GEOGRAPHY Industrial, 4.8% Other, 1.4% O
Slide 16: Distribution and Migration of LIBOR/SOFR Floors
Distribution and Migration of LIBOR/SOFR Floors • Portfolio is over 98% floating rate with a weighted average LIBOR/SOFR floor of 1.14%, which is currently benefiting net interest margin and earnings. • Approximately 39% of the portfolio is subject to a LIBOR/SOFR floor of 1.00% or lower and approxi
Slide 17: Portfolio Developments and “Watch List” Loans
Portfolio Developments and “Watch List” Loans • Over the last few quarters, successfully resolved three of four nonaccrual loans, including the $54 million senior loan collateralized by an office property in Washington, D.C., which was sold in Q1 2022. • Actively pursuing resolution options with res
Slide 18: Diversified Capital Sources
Diversified Capital Sources WELL-DIVERSIFIED CAPITALIZATION PROFILE WITH MODERATE LEVERAGE FINANCING SUMMARY AS OF MARCH 31, 2022 LEVERAGE* Total Outstanding Wtd. Avg Advance Non- 3.0x 2.5x ($ IN MILLIONS) Capacity Balance(22) Coupon* Rate MTM* 2.0x Repurchase Facilities(23) $2,100 $749 L/S + 1.96%
Slide 19: Endnotes
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Slide 20: Endnotes
Endnotes 1) Run-rate earnings defined as Distributable Earnings, as defined in the appendix and the Company’s SEC filings, excluding any realized losses and other one- time charges. Please see a reconciliation of Distributable Earnings to GAAP net income in the appendix. 2) As a result of the extrao
Slide 21: Endnotes (cont’d)
Endnotes (cont’d) 11) For illustrative purposes only and should not be relied on as a guaranty of performance or financial guidance. This slide contains specific assumptions regarding performance. There can be no assurance the Company will perform as discussed. GPMT can provide no assurance regardin
Slide 22: Appendix
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Slide 23: Summary of Investment Portfolio
Summary of Investment Portfolio Maximum Original Loan Principal Carrying Cash All-in Yield at Term Stabilized ($ IN MILLIONS) Commitment Balance Value Coupon* Origination* (Years)* Initial LTV* LTV* Senior Loans* $4,155.0 $3,782.7 $3,737.3 L/S + 3.48% L/S+ 4.06% 3.1 66.2% 63.3% Subordinated Loans $1
Slide 24: Investment Portfolio Detail
Investment Portfolio Detail All-in Origination Maximum Loan Principal Carrying Cash Yield at Original Term Property ($ IN MILLIONS) Type* Date Commitment Balance Value Coupon* Origination* (Years)* State Type Initial LTV* Stabilized LTV* Asset 1 Senior 12/15 120.0 120.0 118.7 L + 4.15% L + 4.43% 4.0
Slide 25: Average Balances and Yields/Cost of Funds
Average Balances and Yields/Cost of Funds Quarter Ended March 31, 2022 ($ IN THOUSANDS) Average Balance** Interest Income/Expense† Net Yield/Cost of Funds Interest-earning assets Loans held-for-investment Senior loans* $3,787,743 $46,939 5.0% Subordinated loans 14,808 359 9.7% Other — 23 —% Total in
Slide 26: Condensed Balance Sheets
Condensed Balance Sheets GRANITE POINT MORTGAGE TRUST INC. March 31, December 31, CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) 2022 2021 ASSETS (unaudited) Loans held-for-investment $ 3,784,624 $ 3,782,205 Allowance for credit losses (34,154) (40,897) Loans held-for-invest
Slide 27: Condensed Statements of Comprehensive Income (Loss)
Condensed Statements of Comprehensive Income (Loss) GRANITE POINT MORTGAGE TRUST INC. Three Months Ended CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) March 31, (in thousands, except share data) 2022 2021 Interest income: (unaudited) (unaudited) Loans held-for-investment $ 47,298
Slide 28: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings * ($ IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 GAAP Net Income* $1.0 $6.7 $18.6 $14.2 $28.0 Adjustments: Provision (Benefit from) for Credit Losses $3.7 $(5.0) $(5.8) $(0.2) $(9.1) Loss on Extin
Slide 29: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves • Total allowance for credit losses of $36.0 million, of which $1.8 million is related to future funding obligations and recorded in other liabilities. • Loans reported on the balance sheet are net of the allowance for credit losses. At At At At At ($ in
Slide 30: Distributable Earnings
Distributable Earnings ▪ Beginning with our Annual Report on Form 10-K for the year ended December 31, 2021, and for all subsequent reporting periods ending on or after December 31, 2021, we have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a
Slide 31: Distributable Earnings (cont’d)
Distributable Earnings (cont’d) ▪ While Distributable Earnings excludes the impact of the unrealized non-cash current provision for credit losses, we expect to only recognize such potential credit losses in Distributable Earnings if and when such amounts are deemed non-recoverable. This is generally
Slide 32: Other Definitions
Other Definitions ▪ Provided for illustrative purposes only. Calculations of all-in yield at origination are based on a number of assumptions (some or all of All-in Yield at which may not occur) and are expressed as monthly equivalent yields that include net origination fees and exit fees and exclud
Slide 33: Other Definitions (cont’d)
Other Definitions (cont’d) ▪ The fully funded loan amount (plus any financing that is pari passu with or senior to such loan), including all contractually provided for future fundings, divided by the as stabilized value (as determined in conformance with USPAP) set forth in the original appraisal. A
Slide 34: Company Information
Company Information Granite Point Mortgage Trust Inc. is an internally-managed real estate finance company that focuses primarily on directly originating, investing in and managing senior floating rate commercial mortgage loans and other debt and debt-like commercial real estate investments. Granite
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