Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (January 2025)
49 slides from Granite Point Mortgage Trust's investor presentation, January 2025
Slide 1: Investor Presentation
Investor Presentation January 2025
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 in the U.S. • Investment objective emphasizes preservation
Slide 6: Corporate Snapshot
Corporate Snapshot $2.5 billion* 100% Loans ~$37.9 million 7.0% 63.9% Portfolio of 62 99% Senior Loans Average UPB Realized Loan Weighted Loan Investments 97% Floating Rate Portfolio Yield** Average LTV** $2.2 billion 2.2x 1.0x ~56% $87.5 million† Financing Capacity Total Debt-to-Equity Recourse Deb
Slide 7: Investment Highlights
Investment Highlights EXPERIENCED AND ▪ Each senior investment team member has over 25 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 ET S O F ST R AT EGY P O R T FO L I O C O N ST RU C T I O N ✓ Long-term, fundamental, value-driven philoso
Slide 13: Diversified Investment Portfolio with Scale
Diversified Investment 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 cons
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
Portfolio Overview
Slide 20: Investment Portfolio Diversification
Investment Portfolio Diversification PORTFOLIO DIVERSIFICATION IS A KEY TENET OF OUR INVESTMENT AND RISK MANAGEMENT STRATEGY JUNE 30, 2017 December 31, 2019 September 30, 2024 Total Portfolio: $1.8 billion Total Portfolio: $5.0 billion Total Portfolio: $2.5 billion* Average Loan Balance: ~$42.8 mill
Slide 21: Loan Portfolio Overview
Loan Portfolio Overview Well-diversified and granular portfolio comprised of over 99% senior loans with a weighted average stabilized LTV at origination of 63.9%*. KEY LOAN PORTFOLIO STATISTICS PROPERTY TYPE(1) Industrial, 5.5% Other, 3.1% Outstanding Principal Balance $2.3 billion Hotel, 6.2% Retai
Slide 22: Loan Portfolio Credit Overview
Loan Portfolio Credit Overview GENERAL AND SPECIFIC CECL RESERVE BY QTR.* CECL RESERVE AS % OF COMMITMENTS BY QTR. General Specific $266.9 $259.0 10.5% $212.7 9.7% 7.5% $137.1 $195.0 $200.3 $155.3 4.7% $91.4 $45.7 $57.4 $71.9 $58.8 12/31/2023 3/31/2024 6/30/2024 9/30/2024 12/31/2023 3/31/2024 6/30/2
Slide 23: Select Case Studies
Select Case Studies * Investment Chicago Multifamily Greenwich Office Nashville Hotel Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 12/2019 07/2021 02/2020 918 Unit Garden Style 161 Key Full-Service Collateral 173,834 SF Office Multifamily Pr
Slide 24: Select Case Studies (cont'd)
Select Case Studies (cont’d) * Investment Boston Industrial Orlando Retail Virginia Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 03/2022 10/2019 06/2019 Collateral 586,590 SF Industrial Property 78,688 SF Retail 407,769 SF Office Port
Slide 25: Overview of Risk-Rated "5" Loans
Overview of Risk-Rated “5” Loans • As of September 30, 2024, the Company held nine loans that were risk-rated “5” with an aggregate principal balance of $508.5 million. The Company is actively pursuing resolution options with respect to these loans, which may include a foreclosure, a deed-in-lieu of
Slide 26: Office Loan Portfolio Overview
Office Loan Portfolio Overview • Since 2021, reduced the office exposure by over $625 REDUCTION IN OFFICE EXPOSURE* ($ IN MILLIONS) million, or over 35%, primarily through repayments and paydowns, and also proactive loan resolutions. • Granular office portfolio across 20 MSAs and 17 States. $1,723 •
Slide 27: Financial Highlights and Capitalization
Financial Highlights and Capitalization
Slide 28: Q4 2024 Business Update
Q4 2024 Business Update ▪ In December, the Company resolved a $28.8 million loan secured by a hotel property located in Minneapolis, MN. As of September 30th, the loan had a risk-rating of “5” and was on nonaccrual status. As a result of this transaction, the Company expects to realize a write-off o
Slide 29: Q3 2024 Summary Results
Q3 2024 Summary Results ▪ GAAP Net (Loss)* of $(34.6) million, or $(0.69) per basic share, inclusive of a $(27.9) million, or $(0.55) per basic share, provision for credit losses. ▪ Distributable (Loss)** of $(38.0) million, or $(0.75) per basic share, inclusive of loan write-offs of $(44.6) million
Slide 30: Prudent and Proactive Balance Sheet Management
Prudent and Proactive Balance Sheet Management GPMT MAINTAINS A CONSERVATIVE FINANCIAL POLICY ✓ Generally, seek to match fund assets and liabilities to minimize interest-rate risk and duration ✓ Proven access to diverse sources of public and private equity and debt capital at the corporate and asset
Slide 31: Overview of Funding Sources Over Time
Overview of Funding Sources Over Time CONSERVATIVE MANAGEMENT OF BROADLY DIVERSIFIED FUNDING SOURCES FOCUSED ON NON-MARK-TO- MARKET LIABILITIES • Balance sheet management strategy emphasizes maintaining access to various sources of secured and unsecured funding while focusing on matching the term of
Slide 32: Funding Mix and Capitalization Highlights
Funding Mix and Capitalization Highlights WELL-BALANCED CAPITAL STRUCTURE WITH MODERATE LEVERAGE FINANCING SUMMARY AS OF SEPTEMBER 30, 2024 LEVERAGE* Total Outstanding Wtd. Avg Advance Non- 3.0x ($ IN MILLIONS) Capacity Balance(9) Coupon* Rate MTM* 2.2x 2.0x Repurchase Facilities $1,253 $706 S + 3.3
Slide 33: Endnotes
Endnotes
Slide 34: Endnotes
Endnotes 1) Mixed-use properties represented based on allocated loan amounts. Percentages are based off of carrying value. 2) Max remaining term assumes all extension options are exercised and excludes four loans that have passed its maturity date and are not eligible for extension, if applicable. 3
Slide 35: Appendix
Appendix
Slide 36: Q3 2024 Financial Summary
Q3 2024 Financial Summary SUMMARY INCOME STATEMENT SUMMARY BALANCE SHEET ($ IN MILLIONS, EXCEPT PER SHARE DATA) ($ IN MILLIONS, EXCEPT PER SHARE DATA, REFLECTS CARRYING VALUES) (UNAUDITED) (UNAUDITED) Net Interest Income $7.7 Cash $113.5 (Provision) for Credit Losses $(27.9) Restricted Cash $11.2 Re
Slide 37: Key Drivers of Q3 2024 Earnings and Book Value Per Share
Key Drivers of Q3 2024 Earnings and Book Value Per Share • GAAP Net (Loss)* of $(34.6) million, or $(0.69) per basic share, inclusive of a $(27.9) million, or $(0.55) per basic share, provision for credit losses. • Distributable (Loss)** of $(38.0) million, or $(0.75) per basic share, inclusive of l
Slide 38: Reconciliation of GAAP Net (Loss) Income to Distributable (Loss) Earnings
Reconciliation of GAAP Net (Loss) Income to Distributable (Loss) Earnings * ($ IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) Q4 2023 Q1 2024 Q2 2024 Q3 2024 GAAP Net (Loss) Income* $(17.1) $(77.7) $(66.7) $(34.6) Adjustments: Provision (Benefit from) for Credit Losses $21.6 $75.6 $60.8 $27.9 Non-C
Slide 39: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves • Total allowance for credit losses of $259.0 million, of which $2.2 million is related to future funding obligations and recorded in other liabilities. • Loans reported on the balance sheet are net of the allowance for credit losses. ($ in thousands) Q3
Slide 40: Summary of Investment Portfolio
Summary of Investment Portfolio Maximum Original Stabilized Loan Principal Carrying Cash All-in Yield at Term Initial LTV at LTV at ($ IN MILLIONS) Commitment Balance Value Coupon* Origination* (Years)* Origination* Origination* Senior Loans* $2,445.2 $2,335.7 $2,070.5 S + 3.77% S + 4.06% 3.1 67.1%
Slide 41: Investment Portfolio
Investment Portfolio All-in Origination Maximum Loan Principal Carrying Cash Yield at Original Term Property Initial LTV at Stabilized LTV ($ IN MILLIONS) Type* Date Commitment Balance Value Coupon* Origination* (Years)* State Type Origination* at Origination* Asset 1 Senior 12/19 $111.1 $109.2 $109
Slide 42: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets GRANITE POINT MORTGAGE TRUST INC. September 30, December 31, CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) 2024 2023 ASSETS (unaudited) Loans held-for-investment $ 2,340,332 $ 2,718,486 Allowance for credit losses (256,770) (134,661) Lo
Slide 43: Condensed Consolidated Statements of Comprehensive (Loss) Income
Condensed Consolidated Statements of Comprehensive (Loss) Income GRANITE POINT MORTGAGE TRUST INC. Three Months Ended Nine Months Ended CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) September 30, September 30, (in thousands, except share data) (unaudited) 2024 2023 2024 2023 Inter
Slide 44: Distributable Earnings
Distributable Earnings ▪ Beginning with our Annual Report on Form 10-K for the year ended December 31, 2023, and for all subsequent reporting periods ending on or after December 31, 2023, we have elected to present Distributable (Loss) Earnings, a measure that is not prepared in accordance with GAAP
Slide 45: Distributable Earnings (cont'd)
Distributable Earnings (cont’d) ▪ While Distributable (Loss) 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 (Loss) Earnings if and when such amounts are deemed non-recoverable. Thi
Slide 46: Other Definitions
Other Definitions ▪ Provided for illustrative purposes only. Calculations of realized loan portfolio yield are based on a number of assumptions (some or all Realized Loan of which may not occur) and are expressed as monthly equivalent yields that include net origination fees and exit fees and exclud
Slide 47: Other Definitions (cont'd)
Other Definitions (cont’d) REO ▪ Real estate owned. ▪ “Senior” means a loan primarily secured by a first priority lien on commercial real property and related personal property and also Senior Loans includes, when applicable, any companion subordinate loans. Total Leverage ▪ Borrowings outstanding o
Slide 48: 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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