Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Q4 2020 Earnings Presentation
36 slides from Granite Point Mortgage Trust's earnings presentation, Mar 10, 2021
Slide 1: Fourth Quarter 2020 Investor Presentation
Fourth Quarter 2020Investor 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
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 4: Granite Point Investment Highlights
Granite Point Investment Highlights 4 EXPERIENCED AND CYCLE-TESTED SENIOR CRE TEAM ▪ Each senior CRE 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
Slide 5: Portfolio Credit Quality
PORTFOLIO CREDIT QUALITY ▪ Investment portfolio comprised of over 99% senior first mortgage loans with no exposure to securities; wtd. avg. initial LTV of 65.7%(1) means sponsors generally have significant equity in their properties. ▪ Strong collections of interest in 2020 and through February 2021
Slide 6: Commercial Real Estate Market Overview
Commercial Real Estate Market Overview
Slide 7: Market Environment
$- $100 $200 $300 $400 $500 2021 2022 2023 2024 2025 $ i n b il li o n s Over $2.2 trillion of loans maturing over the next 5 years(1) Banks CMBS Life Cos Other Banks 50.7% CMBS 17.2% Life Cos 12.1% GSE 8.2% Other 11.8% Market Environment 7 (1) Source: MS, Trepp LLC and Federal Reserve Bank, dated a
Slide 8: Investment Strategy and Origination Platform
Investment Strategy and Origination Platform
Slide 9: Investment Philosophy
Investment Philosophy 9 • Long-term, fundamental, value-driven investing philosophy; focus on relative value. • $4+ trillion market provides ability to invest selectively. • Key focus on diversification by market, property type and sponsor reduces concentrated event risk. • Prioritize income-produci
Slide 10: Investing in Primary & Secondary Markets
PRIMARY AND SECONDARY MARKETS CONTINUE TO OFFER ATTRACTIVE INVESTMENT CHARACTERISTICS ALIGNED WITH OUR INVESTMENT THESIS • We target the top 25 and, generally, up to the top 50 MSAs, searching for value nationwide • We actively participate in the top 5 markets, which are large and more liquid • The
Slide 11: Investment Strategy Overview
Investment Strategy Overview 11 INVESTMENT STRATEGY PRIMARY VS SECONDARY MARKETS • Focus on generating stable and attractive earnings while maintaining a conservative risk profile • Direct origination of senior loans funding: • Property acquisitions • Refinancings • Recapitalizations / restructuring
Slide 12: Target Investments
Target Investments 12 PRIMARY TARGET INVESTMENTS • Floating rate senior first mortgage loans secured by income-producing U.S. commercial real estate • Loan commitments of $25 million to $150 million (averaging $35-40 million) • Institutional-quality properties located in the primary and secondary ma
Slide 13: Investment Strategy Targeting Senior Loans
$100 million GPMT Senior Loan $65 million 100% 65% 52% GPMT Equity Investment $13 million Financing Facility Advance $52 million Borrower’s Equity $35 million LTV Investment Strategy Targeting Senior Loans 13 I LLUSTR AT IVE PROPE RT Y CAP ITAL STRUCTUR E SENIOR FLOATING RATE LOANS PROVIDE EXPOSURE
Slide 14: Origination Platform Overview
Origination Platform Overview OUR ORIGINATION APPROACH PRODUCES A LARGE UNIVERSE OF OPPORTUNITIES FROM WHICH WE CAN SELECT THE MOST ATTRACTIVE INVESTMENTS FOR OUR PORTFOLIO 14 PORTFOLIO SINCE INCEPTION(1)RELATIONSHIPS • Extensive and longstanding direct relationships with a wide array of private equ
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: Portfolio Overview
Portfolio Overview
Slide 17: Investment Portfolio as of December 31, 2020
Investment Portfolio as of December 31, 2020 17 PROPERTY TYPE(2) GEOGRAPHY COUPON STRUCTURE INVESTMENT TYPE (1) See definition in the appendix. (2) Includes mixed-use properties. KEY PORTFOLIO STATISTICS Outstanding Principal Balance $3,932.4m Total Loan Commitments $4,436.2m Number of Investments 1
Slide 18: Investment Portfolio LIBOR Floors
5.2% 2.7% 17.9% 29.0% 41.7% 3.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 2015 2016 2017 2018 2019 2020 % 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. Avg. Portfolio LIBOR Fl
Slide 19: Case Studies
19 Case Studies(1) (1) For illustrative purposes only. • $102 million floating rate, first mortgage loan secured by a 918- unit garden style apartment building in Des Plaines, IL • Well-located in the Chicago submarket, north of O’Hare airport, in an infill location • Sponsor is a top-tier multifami
Slide 20: Financial Highlights
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Slide 21: Fourth Quarter and Full Year 2020 Highlights
Fourth Quarter and Full Year 2020 Highlights 21(1) Represents Net Income Attributable to Common Stockholders, see definition in the appendix. (2) Distributable Earnings is a non-GAAP measure. See definition in the appendix. (3) 1.516 million warrants are subject to vesting depending on future draws
Slide 22: Fourth Quarter 2020 Earnings Summary
Fourth Quarter 2020 Earnings Summary 22 SUMMARY INCOME STATEMENT ($ IN MILLIONS, EXCEPT PER SHARE DATA) Net Interest Income $27.4 Provision for Credit Losses $8.5 Operating Expenses $(12.2) Provision for Income Taxes $(0.6) GAAP Net Income $23.1 Wtd. Avg. Basic Common Shares 55,205,082 Diluted Commo
Slide 23: Balance Sheet and Financing Summary
Balance Sheet and Financing Summary as of December 31, 2020 23 (1) Net outstanding balance after deduction of transaction related expenses and warrants. (2) Does not include fees and other transaction related expenses. (3) Includes all loan repurchase agreements. (4) Includes option to be exercised
Slide 24: Summary of Investment Portfolio
Summary of Investment Portfolio 24 ($ 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) $4,419.6 $3,915.8 $3,847.7 L + 3.52% L + 4.19% 3.1 65.8% 63.4% Subordina
Slide 25: Diversified Capital Sources
2.2x 3.2x 1.0x 2.0x 3.0x 4.0x 12/31/2020 Recourse Leverage Total Leverage Diversified Capital Sources 25 REPURCHASE FACILITIES ▪ Borrowings of $1.7 billion with an advance rate of 68.0%.(1) CRE CLOs(2) ▪ $927.1 million of fully term-matched, non-recourse and non-mark-to-market financing. CONVERTIBLE
Slide 26: Appendix
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Slide 27: Key Drivers of Fourth Quarter 2020 Earnings and Book Value Per Share
$16.93 $16.92 $15.00 $15.50 $16.00 $16.50 $17.00 $17.50 9/30/2020 Provision GAAP Earnings Provision for Credit Losses Dividend Declaration Other 12/31/2020 $(0.45)$0.26 Key Drivers of Fourth Quarter 2020 Earnings and Book Value Per Share • Q4 GAAP earnings benefited from an $8.5 million, or $0.16 pe
Slide 28: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves 28 • Total allowance for credit losses of $72.2 million, of which $5.5 million is related to future funding obligations and recorded in other liabilities. • Loans reported on the balance sheet are net of the allowance for credit losses. ($ in thousands) A
Slide 29: Investment Portfolio Detail
Investment Portfolio Detail 29 ($ 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 12/15 120.0 120.0 118.8 L
Slide 30: Condensed Balance Sheets
Condensed Balance Sheets 30 GRANITE POINT MORTGAGE TRUST INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, 2020 December 31, 2019 ASSETS Loans held-for-investment $ 3,914,469 $ 4,226,212 Allowance for credit losses (66,666) — Loans held-for-investment, net 3,8
Slide 31: Condensed Statements of Comprehensive (Loss) Income
Condensed Statements of Comprehensive (Loss) Income 31 GRANITE POINT MORTGAGE TRUST INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except share data) Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Interest income: Loans held-for-investment
Slide 32: Distributable Earnings Definition
▪ We have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental method of evaluating our operating performance. Distributable Earnings replaces our prior presentation of Core Earnings with no changes to the definition. In order to mainta
Slide 33: Distributable Earnings and Provision for Credit Losses
▪ 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 34: Other Definitions
Other Definitions 34 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 35: Company Information
Company Information 35 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 36: Granite Point Mortgage Trust
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