Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (November 2021)
46 slides from Granite Point Mortgage Trust's investor presentation, Nov 15, 2021
Slide 1: November 2021 Investor Presentation
November 2021Investor Presentation
Slide 2: 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 actual results may diffe
Slide 3: Company Overview
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Slide 4: Experienced and Cycle-Tested Senior Leadership
Experienced and Cycle-Tested Senior Leadership 4 JACK TAYLOR PRESIDENT AND CHIEF EXECUTIVE OFFICER • Previous experience: Head of Global Real Estate Finance, Prudential Real Estate Investors; earlier built and led real estate finance businesses at: Kidder, Peabody; PaineWebber; UBS; and Five Mile Ca
Slide 5: Company Overview
Company Overview(1) • An internally-managed (2) commercial real estate finance company operating as a REIT and focused on direct origination of floating-rate, senior first mortgage loans secured by institutional-quality, transitional properties. • Investment objective emphasizes preservation of capi
Slide 6: Corporate Snapshot
Corporate Snapshot • Originate high quality senior floating-rate loans on transitional U.S. commercial real estate • Long-term, fundamental value-oriented philosophy • Heavy focus on relative value; highly selective and emphasizing broad diversification • Extensive diligence with bottom-up underwrit
Slide 7: Investment Highlights
Investment Highlights 7 EXPERIENCED AND CYCLE-TESTED SENIOR CRE TEAM ▪ Each senior investment team member has over 20 years of experience in the commercial real estate debt markets. Includes extensive background in investment management and structured finance. ▪ Broad and long-standing direct relati
Slide 8: Seasoned and Cohesive Team with Top Tier Multidisciplinary Expertise
Seasoned and Cohesive Team with Top Tier Multidisciplinary Expertise 8 DECADES OF BROAD EXPERIENCE SUCCESSFULLY NAVIGATING MANY ECONOMIC & MARKET CYCLES ✓ Leaders in the development of the CMBS market with decades of experience managing levered portfolios of CRE debt investments and serving as a fid
Slide 9: Investment Strategy and Origination Platform
Investment Strategy and Origination Platform
Slide 10: Investment Strategy Targeting Senior Loans
$100 million GPMT Senior Loan $65 million 100% 65% 48.75% GPMT Equity Investment $16.25 million Financing Facility Advance $48.75 million Borrower’s Equity $35 million LTV Investment Strategy Targeting Senior Loans 10 I LLUSTR AT IVE PROPE RT Y CAP ITAL STRUCTUR E SENIOR FLOATING RATE LOANS PROVIDE
Slide 11: Target Investments and Portfolio Construction
(1) See definition in appendix Target Investments and Portfolio Construction 11 KEY TENETS OF STRATEGY PORTFOLIO CONSTRUCTION ✓ Long-term, fundamental, value-driven philosophy avoiding “sector bets” and “momentum investments” ✓ Emphasize durable and identifiable cash flow rather than sale value of c
Slide 12: High-quality Diversified Portfolio with Scale
High-quality Diversified Portfolio with Scale 12 • We emphasize diversification as a key tenet of our investment strategy and search for relative value nationwide as we construct our portfolio • Approximately 75% of our portfolio is secured by properties located in the largest 25 markets with signif
Slide 13: Relationships, Process and Results
Relationships •Directly source a large volume of investment opportunities through strong relationships, excellent reputation and extensive lending market experience •Because most deals have multiple counterparties, both operating and capital partners, and brokers, multiple touch points help drive tr
Slide 14: Rigorous and Highly Selective Investment Process
We Have Designed a Rigorous and Highly Selective Investment Process 14 ORIGINATION APPROACH PRODUCES A LARGE UNIVERSE OF OPPORTUNITIES FROM WHICH WE SELECT THE MOST ATTRACTIVE INVESTMENTS FOR OUR PORTFOLIO Tens of billions of dollars of investment opportunities volume sourced and reviewed. For every
Slide 15: Credit Culture Based on Key Principles
Credit Culture Based on Key Principles 15 • Portfolio construction on a loan-by-loan basis with each investment standing on its own merits and adhering to our overall credit culture • Significant amount of resources are committed upfront to ensure comprehensive underwriting and structuring • Team or
Slide 16: Life Cycle of a Loan Investment
Life Cycle of a Loan Investment ORIGINATIONS AND OPERATIONS PROCESS INVOLVES CONTINUOUS COMMUNICATIONS ACROSS THE COMPANY FROM DEAL SOURCING THROUGH ASSET MANAGEMENT 16 Sourcing Underwriting Closing Financing Ongoing Asset Management • Broad industry relationships with a variety of market participan
Slide 17: Coordinated and Comprehensive Approach to Asset Management
Coordinated and Comprehensive Approach to Asset Management 17 • 5-point loan risk rating system • Deal teams retain key decision-making authority on asset management (budgets, lease approvals, monitoring, tracking business plan, etc.) – Frequent communication and feedback with property owners • Whil
Slide 18: Portfolio Overview
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Slide 19: Track Record of Investment Portfolio Expansion and Diversification
Northeast 37.2% West 19.6% Southwest 18.6% Southeast 18.5% Midwest 6.0% Total Portfolio: $1.8 billion Average Loan Balance: ~$42.8 million Senior Loans: 89.6% Office, 50.8% Multifamily, 17.1% Retail, 15.9% Industrial, 9.3% Hotel, 6.9% Track Record of Investment Portfolio Expansion and Diversificatio
Slide 20: Third Quarter 2021 Portfolio Activity
$3,647 $3,673 $- $1,000 $2,000 $3,000 $4,000 $5,000 6/30/2021 Portfolio 3Q21 Fundings & Deferrals 3Q21 Prepayments & Amortization 9/30/2021 $ I n M il li o n s Q3 2021 PORTFOLIO ACTIVITY(1) Third Quarter 2021 Portfolio Activity 20 (1) Mixed-use properties represented based on allocated loan amounts
Slide 21: Investment Portfolio as of September 30, 2021
7.7% 50.2% 22.9% 14.7% 4.5% 1 2 3 4 5 Investment Portfolio as of September 30, 2021 21 PROPERTY TYPE(2) GEOGRAPHY STABILIZED LTV(1) RISK RATINGS (1) See definition in the appendix. (2) Mixed-use properties represented based on allocated loan amounts. KEY PORTFOLIO STATISTICS Outstanding Principal Ba
Slide 22: Select Case Studies
Investment Chicago Multifamily Houston Multifamily Greenwich Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 12/2019 08/2021 07/2021 Collateral 918 Unit Garden Style Multifamily Property 351 Unit Garden Style Multifamily Property 173,834
Slide 23: Select Case Studies
Investment Quantico, VA Office Pittsburgh Mixed Use Denver Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 06/2019 11/2021 01/2020 Collateral Three Class ‘A’ Office Buildings 258,385 SF Mixed Use Property 488,692 SF Industrial Proper
Slide 24: Strong Portfolio Performance Through the Pandemic
Strong Portfolio Performance Through the Pandemic 24 Retail – Pasadena, CA Office – Washington D.C. Student Housing – Louisville, KY Loan Structure Senior floating-rate Senior floating-rate Senior floating-rate Origination Date July 2018 October 2017 August 2017 Collateral Property 463k square foot
Slide 25: Financial Highlights and Capitalization
Financial Highlights and Capitalization
Slide 26: Resilience Through COVID-19
Resilience Through COVID-19 26 STRONG PERFORMANCE THROUGH COVID -19 • Despite market disruption, GPMT demonstrated strong credit performance and active balance sheet management. • Asset management – Proactive portfolio management and constructive dialogue with borrowers resulted in 100% of contractu
Slide 27: Proactive Financial Management
Proactive Financial Management 27 ✓ Match funding of assets and liabilities to minimize interest-rate risk and maturities ✓ Proven access to diverse sources of public and private debt and equity capital ✓ Emphasis on liability management with 75% non-mark-to-market borrowings(1) ✓ Focus on maintaini
Slide 28: Diversification of Funding Sources Over Time
Diversification of Funding Sources Over Time 28 CONSERVATIVE MANAGEMENT OF BROADLY DIVERSIFIED FUNDING SOURCES FOCUSED ON NON-MARK- TO-MARKET LIABILITIES • Balance sheet management strategy emphasizes maintaining access to various sources of secured and unsecured funding while focusing on matching t
Slide 29: Third Quarter 2021 Highlights
Third Quarter 2021 Highlights 29(1) Represents Net Income Attributable to Common Stockholders; see definition in the appendix. (2) See definition and reconciliation to a GAAP measure in the appendix. FINANCIAL SUMMARY ▪ GAAP net income(1) of $18.6 million, or $0.34 per basic share, including a relea
Slide 30: Q3 2021 Capitalization
CLOs Repurchase Facilities Senior Convertible Notes Term Loan Term Financing Facility Asset Specific Q3 2021 Capitalization 30 (1) Outstanding principal balance, excludes deferred debt issuance costs. (2) Does not include fees and other transaction related expenses. (3) Non-Mark-to-Market. (4) See d
Slide 31: Portfolio Credit Quality, Activity and Financing
PORTFOLIO CREDIT QUALITY ▪ Defensively-positioned and broadly-diversified portfolio of 100% CRE loans (over 99% senior first mortgages) with weighted average stabilized LTV of 63.3%.(1) ▪ Strong collections of interest through October 2021 with 100% of borrowers making their contractual payments in
Slide 32: Appendix
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Slide 33: Third Quarter 2021 Financial Summary
Third Quarter 2021 Financial Summary 33 SUMMARY INCOME STATEMENT ($ IN MILLIONS, EXCEPT PER SHARE DATA) Net Interest Income $22.1 Benefit from (Provision for) Credit Losses $5.8 Operating Expenses $(9.3) GAAP Net Income(1) $18.6 Basic Wtd. Avg. Common Shares 54,453,546 Diluted Wtd. Avg. Common Share
Slide 34: Key Drivers of Third Quarter 2021 Earnings and Book Value Per Share
$17.27 $17.33 $16.00 $16.50 $17.00 $17.50 $18.00 6/30/2021 Pre-Provision Earnings Benefit from (Provision for) Credit Losses Dividend Declaration Share Repurchases Partial Warrant Exercise Equity Compensation 9/30/2021 $(0.25) $0.23 Key Drivers of Third Quarter 2021 Earnings and Book Value Per Share
Slide 35: Investment Portfolio LIBOR Floors
1.30% 5.4% 3.0% 12.2% 23.5% 39.4% 4.0% 12.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 2015 2016 2017 2018 2019 2020 2021 % o f P o rt fo li o 1 -M o n th U .S . L IB O R % of Floating Rate Loan Portfolio Wtd. Avg. LIBOR Floor by Loan Vintage Wtd. A
Slide 36: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings(1) 36 ($ IN MILLIONS, EXCEPT PER SHARE DATA) Q3 2021 Q2 2021 Q1 2021 GAAP Net Income(1) $18.6 $14.2 $28.0 Adjustments: (Benefit from) Provision for Credit Losses $(5.8) $(0.2) $(9.1) Non-Cash Equity Compensation $2.0 $1.6 $1.9 Distributable
Slide 37: Financial Statements Impact of CECL Reserves
($ in thousands) At 9/30/20 At 12/31/20 At 3/31/21 At 6/30/21 At 9/30/21 ASSETS Loans and securities $4,052,201 $3,914,469 $3,859,269 $3,635,315 $3,659,691 Allowance for credit losses $(73,339) $(66,666) $(59,433) $(57,671) $(45,480) Carrying Value $3,978,862 $3,847,803 $3,799,836 $3,577,644 $3,614,
Slide 38: Summary of Investment Portfolio
Summary of Investment Portfolio 38 ($ IN MILLIONS) Maximum Loan Commitment Principal Balance Carrying Value Cash Coupon(1) All-in Yield at Origination(1) Original Term (Years)(1) Initial LTV(1) Stabilized LTV(1) Senior Loans(1) $4,087.5 $3,657.4 $3,603.3 L + 3.48% L + 4.11% 3.1 66.1% 63.4% Subordina
Slide 39: Investment Portfolio Detail
Investment Portfolio Detail 39 ($ IN MILLIONS) Type(1) Origination Date Maximum Loan Commitment Principal Balance Carrying Value Cash Coupon(1) All-in Yield at Origination(1) Original Term (Years)(1) State Property Type Initial LTV(1) Stabilized LTV(1) Asset 1 Senior 12/15 120.0 120.0 119.6 L + 4.15
Slide 40: Condensed Balance Sheets
Condensed Balance Sheets 40 GRANITE POINT MORTGAGE TRUST INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) September 30, 2021 December 31, 2020 ASSETS (unaudited) Loans held-for-investment $ 3,659,691 $ 3,914,469 Allowance for credit losses (45,480) (66,666) Loans held-for
Slide 41: Condensed Statements of Comprehensive Income
Condensed Statements of Comprehensive (Loss) Income 41 GRANITE POINT MORTGAGE TRUST INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except share data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest income: (unaudited) (unau
Slide 42: Distributable Earnings Definition
▪ Beginning with our Annual Report on Form 10-K for the year ended December 31, 2020, and for all subsequent reporting periods ending on or after December 31, 2020, we have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental method of
Slide 43: Distributable Earnings Discussion
▪ 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 at the time a loan is repaid,
Slide 44: Other Definitions
Other Definitions 44 All-in Yield at Origination ▪ Provided for illustrative purposes only. Calculations of all-in yield at origination are based on a number of assumptions (some or all of which may not occur) and are expressed as monthly equivalent yields that include net origination fees and exit
Slide 45: Company Information
Company Information 45 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. Gran
Slide 46: Granite Point Mortgage Trust
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