Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (January 2023)
50 slides from Granite Point Mortgage Trust's investor presentation, January 2023
Slide 1: Investor Presentation January 2023
Investor Presentation January 2023
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 34 hereto. The endnotes include important information, including details regarding the assumptions we utilize to prepare the illustrative examples contain
Slide 4: Company Overview
Company Overview
Slide 5: Company Overview
Company Overview * • An internally-managed commercial real estate finance company operating as a REIT, that is focused on originating and investing in floating-rate, first mortgage loans secured by institutional-quality transitional properties. • Investment objective emphasizes preservation of capit
Slide 6: Corporate Snapshot
Corporate Snapshot $3.9 billion* 100% Loans $37 million 5.6% 63.2% Portfolio of 97 99% Senior Loans Average UPB Weighted Weighted Loan Investments 98% Floating Rate Average Yield Average LTV** $3.4 billion 2.6x 1.3x ~58% $132 million† Financing Capacity Total Debt-to-Equity Recourse Debt-to- Non-Mar
Slide 7: Investment Highlights
Investment Highlights EXPERIENCED AND ▪ Each senior investment team member has over 20 years of experience in the commercial real estate debt CYCLE-TESTED markets: including extensive backgrounds in investment management and structured finance. SENIOR CRE TEAM ▪ Broad and long-standing direct relati
Slide 8: Experienced and Cycle-Tested Senior Leadership
Experienced and Cycle-Tested Senior Leadership YEARS OF JACK TAYLOR EXPERIENCE 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
Slide 9: Seasoned and Cohesive Team with Top-Tier Multidisciplinary Expertise
Seasoned and Cohesive Team with Top-Tier Multidisciplinary Expertise DECADES OF BROAD EXPERIENCE SUCCESSFULLY NAVIGATING MANY ECONOMIC AND MARKET CYCLES ✓ Decades of balance sheet lending experience managing unlevered and levered portfolios of CRE debt investments and serving as a fiduciary for thir
Slide 10: Investment Strategy and Origination Platform
Investment Strategy and Origination Platform
Slide 11: Investment Strategy Targeting Senior Loans
Investment Strategy Targeting Senior Loans FLOATING RATE FIRST MORTGAGE LOANS PROVIDE EXPOSURE TO COMMERCIAL REAL ESTATE SECTOR AT AN ATTRACTIVE POSITION WITHIN A PROPERTY'S CAPITAL STRUCTURE • Our senior loans are senior to a property owner’s I L L U S T R AT I V E P R O P E R T Y C A P I TA L S T
Slide 12: Target Investments and Portfolio Construction
Target Investments and Portfolio Construction THE COMPANY HAS A SUCCESSFUL INVESTMENT PHILOSOPHY THAT HAS BEEN TESTED THROUGH MULTIPLE ECONOMIC, INTEREST RATE AND REAL ESTATE CYCLES K E Y T E N E T S O F ST R AT E GY P O RT FO L I O C O N ST RU C T I O N ✓ Long-term, fundamental, value-driven philos
Slide 13: High-quality Diversified Portfolio with Scale
High-quality Diversified Portfolio with Scale TARGETING LARGER INSTITUTIONAL MARKETS IN THE U.S., THAT OFFER COMPELLING INVESTMENT CHARACTERISTICS CONSISTENT WITH OUR OVERALL INVESTMENT THESIS • Diversification is a key tenet of our investment strategy • Search for relative value nationwide as we co
Slide 14: Direct Origination Platform Supported by Strong Reputation and Longstanding Relationships
Direct Origination Platform Supported by Strong Reputation and Longstanding Relationships DIFFERENTIATED ORIGINATION STRATEGY TARGETING HIGH-QUALITY LOANS ON INSTITUTIONAL-QUALITY PROPERTIES ACROSS ATTRACTIVE MARKETS WITH WELL-CAPITALIZED AND EXPERIENCED SPONSORS • Borrowers range from large private
Slide 15: Rigorous and Highly Selective Investment Process
Rigorous and Highly Selective Investment Process ORIGINATION APPROACH PRODUCES A LARGE UNIVERSE OF OPPORTUNITIES FROM WHICH THE MOST ATTRACTIVE INVESTMENTS ARE SELECTED FOR OUR PORTFOLIO M U LT I P L E S O U R C I N G C H A N N E L S Billions of dollars of investment opportunities annually are sourc
Slide 16: Credit Culture Based on Key Principles
Credit Culture Based on Key Principles OUR CREDIT CULTURE HAS BEEN DEVELOPED AND NURTURED OVER OUR SENIOR CRE TEAM’S LONG TENURE IN COMMERCIAL REAL ESTATE DEBT MARKETS • Portfolio construction on a loan-by-loan basis with each investment standing on its own merits and adhering to our overall credit
Slide 17: 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 Ongoing Asset Sourcing Underwriting Closing Financing Management Members of the Investment Committee involved throughout • Broad indus
Slide 18: Coordinated and Comprehensive Approach to Asset Management
Coordinated and Comprehensive Approach to Asset Management ORIGINATION TEAM THAT SOURCES A LOAN REMAINS RESPONSIBLE FOR ASSET MANAGING IT THROUGHOUT ITS LIFECYCLE UNTIL REPAYMENT • 5-point loan risk rating system • Deal teams retain key decision-making authority on asset management (budgets, lease a
Slide 19: Portfolio Overview
See EL LL HH Portfolio Overview mann |
Slide 20: Investment Portfolio Diversification
Investment Portfolio Diversification PORTFOLIO DIVERSIFICATION IS A KEY TENET OF OUR INVESTMENT AND RISK MANAGEMENT STRATEGY At IPO December 31, 2019 September 30, 2022 Total Portfolio: $1.8 billion Total Portfolio: $5.0 billion Total Portfolio: $3.9 billion* Average Loan Balance: ~$42.8 million Ave
Slide 21: Third Quarter 2022 Portfolio Activity
Third Quarter 2022 Portfolio Activity • Total funding activity of $72.4 million(1): PAYOFFS BY PROPERTY TYPE – Closed one $45.0 million with total commitment and funded $43.4 million in UPB. • Stabilized LTV of 68.2%* and yield of SOFR + 4.25%** Multifamily, 28.1% Office, – Funded $28.4 million of e
Slide 22: Investment Portfolio as of September 30, 2022
Investment Portfolio as of September 30, 2022 High-quality, well-diversified portfolio comprised of over 99% senior loans with a weighted average stabilized LTV at origination of 63.2%.* KEY PORTFOLIO STATISTICS PROPERTY TYPE(3) GEOGRAPHY Industrial, 5.2% Other, 2.5% Outstanding $3.6 billion Retail,
Slide 23: Portfolio Activity YTD Through Third Quarter 2022
Portfolio Activity YTD Through Third Quarter 2022 PORTFOLIO ACTIVITY(2) PAYOFFS BY PROPERTY TYPE Industrial, 4.8% Mixed-Use, 0.3% $5,000 Hotel, 18.6% Total maximum Office, 42.1% $3,928 commitments $4,000 $457 $(639) $313 Future funding $3,797 commitments Multifamily, $3,615 34.2% $ In Millions $3,00
Slide 24: Select Case Studies
Select Case Studies * Investment Boston Industrial Arkansas Multifamily Atlanta Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 03/2022 10/2021 10/2021 264 Unit Garden Collateral 586,590 SF Industrial Property 618,301 SF Industrial P
Slide 25: Select Case Studies (cont'd)
Select Case Studies (cont’d) * Investment Denver Office Pittsburgh Mixed Use Birmingham Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 02/2022 11/2021 11/2021 323 Unit Garden Collateral 194,575 SF Office Building 258,385 SF Mixed-u
Slide 26: Portfolio Developments and "Watch List" Loans
Portfolio Developments and “Watch List” Loans • Over the last several quarters, successfully resolved four nonaccrual loans. Actively pursuing resolution options with respect to the remaining risk-rated “5” loans, which may include a foreclosure, deed-in-lieu, restructuring, a sale of the loan, or a
Slide 27: Financial Highlights and Capitalization
Financial Highlights and Capitalization
Slide 28: Prudent and Proactive Balance Sheet Management
Prudent and Proactive Balance Sheet Management GPMT MAINTAINS A CONSERVATIVE FINANCIAL POLICY ✓ 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 wi
Slide 29: Diversification of Funding Sources Over Time
Diversification of Funding Sources Over Time 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 the
Slide 30: Q4 2022 Business Update
Q4 2022 Business Update ▪ On December 1, 2022, the Company redeemed the $144 million of Convertible Notes due December 1, 2022, with a cash payment upon maturity. CAPITALIZATION ▪ In December, the Company closed on a new $100 million funding facility providing loan-level financing on a non-mark-to-m
Slide 31: Third Quarter 2022 Highlights
Third Quarter 2022 Highlights ▪ GAAP net (loss)* of $(29.1) million, or $(0.56) per basic share, inclusive of a $(35.4) million, or $(0.68) per basic share, provision for credit losses. FINANCIAL ▪ Distributable Earnings** of $8.7 million, or $0.17 per basic share. SUMMARY ▪ Book value per common sh
Slide 32: Diversified Capital Sources
Diversified Capital Sources WELL-DIVERSIFIED CAPITALIZATION PROFILE WITH MODERATE LEVERAGE FINANCING SUMMARY AS OF SEPTEMBER 30, 2022 LEVERAGE* Total Outstanding Wtd. Avg Advance Non- 4.0x ($ IN MILLIONS) Capacity Balance(9) Coupon* Rate MTM* 3.0x 2.6x Repurchase Facilities(10) $1,898 $1,160 L/S + 2
Slide 33: Endnotes
See EL LL HH Endnotes mann |
Slide 34: Endnotes
Endnotes 1) Includes fundings of prior loan commitments of $28.4 million and capitalized deferred interest of $0.6 million. 2) Data based on principal balance of investments. Due to rounding, individual figures may not add up to the totals presented. 3) Mixed-use properties represented based on allo
Slide 35: Appendix
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Slide 36: Third Quarter 2022 Financial Summary
Third Quarter 2022 Financial Summary SUMMARY INCOME STATEMENT SUMMARY BALANCE SHEET ($ IN MILLIONS, EXCEPT PER SHARE DATA) ($ IN MILLIONS, EXCEPT PER SHARE DATA, REFLECTS CARRYING VALUES) Net Interest Income $18.3 Cash $168.4 (Provision) for Credit Losses $(35.4) Restricted Cash $45.2 Loans Held-for
Slide 37: Key Drivers of Third Quarter 2022 Earnings and Book Value Per Share
Key Drivers of Third Quarter 2022 Earnings and Book Value Per Share • GAAP Net (loss)* of $(29.1) million, or $(0.56) per basic share, inclusive of a $(35.4) million, or $(0.68) per basic share, provision for credit losses mainly driven by $(30.0) million increase in CECL reserve related to collater
Slide 38: Sensitivity to Short-term Interest Rates
Sensitivity to Short-term Interest Rates • Portfolio is over 98% floating rate with a weighted average LIBOR/SOFR floor of 0.94%, meaningfully below current level of short- term benchmark interest rates. • All LIBOR/SOFR floors are currently below the level of market rates. • Well positioned for fur
Slide 39: Reconciliation of GAAP Net (Loss) Income to Distributable Earnings
Reconciliation of GAAP Net (Loss) Income to Distributable Earnings * ($ IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 GAAP Net (loss) Income* $18.6 $6.7 $1.0 $(17.4) $(29.1) Adjustments: Provision (Benefit from) for Credit Losses $(5.8) $(5.0) $3.7 $13.6 $35
Slide 40: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves • Total allowance for credit losses of $85.6 million, of which $2.9 million is related to future funding obligations and recorded in other liabilities. • Loans reported on the balance sheet are net of the allowance for credit losses. ($ in thousands) Q3 2
Slide 41: 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* $3,914.0 $3,601.3 $3,507.3 L/S + 3.54% L/S+ 4.07% 3.1 66.4% 63.3% Subordinated Loans $1
Slide 42: Investment Portfolio Detail
Investment Portfolio Detail All-in Origination Maximum Loan Principal Carrying Cash Yield at Original Term Property ($ 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 $119.9 L + 4.15% L + 4.43%
Slide 43: Condensed Balance Sheets
Condensed Balance Sheets GRANITE POINT MORTGAGE TRUST INC. September 30, December 31, CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) 2022 2021 ASSETS (unaudited) Loans held-for-investment $ 3,603,016 $ 3,782,205 Allowance for credit losses (82,611) (40,897) Loans held-for-in
Slide 44: Condensed Statements of Comprehensive Income (Loss)
Condensed Statements of Comprehensive Income (Loss) GRANITE POINT MORTGAGE TRUST INC. Three Months Ended Nine Months Ended CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME September 30, September 30, (in thousands, except share data) 2022 2021 2022 2021 Interest income: (unaudited) (
Slide 45: 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 46: 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 47: 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 48: 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 49: 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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