Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Q1 2021 Earnings Presentation
36 slides from Granite Point Mortgage Trust's earnings presentation, May 25, 2021
Slide 1: First Quarter 2021 Investor Presentation
First Quarter 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
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 and Activity
PORTFOLIO CREDIT QUALITY ▪ Defensively-positioned and broadly-diversified portfolio of 100% CRE loans (over 99% senior first mortgages) with weighted average initial LTV of 65.8%(1) implying sponsors generally have significant equity in their properties. ▪ Strong collections of interest through May
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 $2.3 trillion of loans maturing over the next 5 years(1) Banks CMBS Life Cos Other Banks 50.4% CMBS 17.4% Life Cos 12.0% GSE 8.7% Other 11.5% 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
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Slide 17: Investment Portfolio as of March 31, 2021
31.5% 24.6% 21.5% 21.3% 1.1% 0% - 60% 60% - 65% 65% - 70% 70% - 75% 75% - 80% 4.7% 48.7% 25.7% 19.2% 1.7% 1 2 3 4 5 Investment Portfolio as of March 31, 2021 17 PROPERTY TYPE(2) GEOGRAPHY STABILIZED LTV(1) RISK RATINGS (1) See definition in the appendix. (2) Mixed-use properties represented based on
Slide 18: Investment Portfolio LIBOR Floors
5.2% 2.8% 17.0% 28.8% 42.7% 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: First Quarter 2021 Highlights
First Quarter 2021 Highlights 21 (1) Represents Net Income Attributable to Common Stockholders, see definition in the appendix. (2) See definition in the appendix. FINANCIAL SUMMARY ▪ GAAP net income(1) of $28.0 million, or $0.51 per basic share, inclusive of $0.17 per basic share release of prior C
Slide 22: First Quarter 2021 Financial Summary
First Quarter 2021 Financial Summary 22 SUMMARY INCOME STATEMENT ($ IN MILLIONS, EXCEPT PER SHARE DATA) Net Interest Income $27.8 Benefit from (Provision) for Credit Losses $9.1 Operating Expenses $(8.9) GAAP Net Income(1) $28.0 Wtd. Avg. Basic Common Shares 55,137,608 Diluted Common Shares 71,834,3
Slide 23: Diversified Capital Sources
Diversified Capital Sources 23 (1) Outstanding principal balance, excludes deferred debt issuance costs. (2) Does not include fees and other transaction related expenses. (3) See definitions in the appendix. (4) Includes all repurchase facilities. Includes option to be exercised at the company’s dis
Slide 24: Summary of Investment Portfolio
Summary of Investment Portfolio 24 ($ 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) $4,310.0 $3,856.4 $3,789.6 L + 3.51% L + 4.17% 3.1 65.8% 63.4% Subordina
Slide 25: Appendix
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Slide 26: Key Drivers of Q1 2021 Earnings and Book Value Per Share
$16.92 $17.22 $15.00 $15.50 $16.00 $16.50 $17.00 $17.50 $18.00 12/31/2020 Pre-Provision GAAP Earnings Benefit from (Provision for) Credit Losses Dividend Declaration Other 3/31/2021 $(0.25) $0.34 Key Drivers of First Quarter 2021 Earnings and Book Value Per Share • GAAP earnings and book value benef
Slide 27: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings(1) 27 ($ IN MILLIONS, EXCEPT PER SHARE DATA) Q1 2021 Q4 2020 GAAP Net Income(1) $28.0 $23.1 Adjustments: (Benefit from) Provision for Credit Losses $(9.1) $(8.5) Internalization-related Restructuring Charges $— $2.6 Non-Cash Equity Compensa
Slide 28: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves 28 • Total allowance for credit losses of $63.1 million, of which $3.6 million is related to future funding obligations and recorded in other liabilities. • Loans reported on the balance sheet are net of the allowance for credit losses. ($ 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 12/15 120.0 120.0 119.4 L
Slide 30: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets 30 GRANITE POINT MORTGAGE TRUST INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) March 31, 2021 December 31, 2020 ASSETS (unaudited) Loans held-for-investment $ 3,859,269 $ 3,914,469 Allowance for credit losses (59,433) (66,666) Loans
Slide 31: Condensed Consolidated Statements of Comprehensive (Loss) Income
Condensed Consolidated Statements of Comprehensive (Loss) Income 31 GRANITE POINT MORTGAGE TRUST INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (IN THOUSANDS, EXCEPT SHARE DATA) Three Months Ended March 31, 2021 2020 Interest income: (unaudited) Loans held-for-investment $ 54,
Slide 32: 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 33: Distributable Earnings and 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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