Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (January 2024)
49 slides from Granite Point Mortgage Trust's investor presentation, January 2024
Slide 1: Investor Presentation January 2024
Investor Presentation January 2024
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 32 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 capita
Slide 6: Corporate Snapshot
Corporate Snapshot $3.1 billion* 100% Loans $38 million 8.4% 63.3% Portfolio of 77 99% Senior Loans Average UPB Realized Loan Weighted Loan Investments 98% Floating Rate Portfolio Yield ** Average LTV ** $3.3 billion 2.2x 1.1x ~58% ~$185 Financing Capacity Total Debt-to-Equity Recourse Debt-to- Non-
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 EY TENETS O F S TR ATEGY P O R TF O LI O C O NS TR U C TI O N ✓ Long-term, fundamental, value-driven philosophy avoi
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 At IPO December 31, 2019 September 30, 2023 Total Portfolio: $1.8 billion Total Portfolio: $5.0 billion Total Portfolio: $3.1 billion* Average Loan Balance: ~$42.8 million Ave
Slide 21: Loan Portfolio Overview as of September 30, 2023
Loan Portfolio Overview as of September 30, 2023 Well-diversified and granular portfolio comprised of over 99% senior loans with a weighted average stabilized LTV at origination of 63.3%*. KEY PORTFOLIO STATISTICS PROPERTY TYPE(1) Industrial, 4.1% Other, 3.2% Outstanding Principal Balance $2.9 billi
Slide 22: Loan Portfolio Credit Overview
Loan Portfolio Credit Overview • Weighted average portfolio risk rating of 2.7 as of September 30, 2023. GENERAL AND SPECIFIC CECL RESERVE BY QTR.* CECL RESERVE AS % OF COMMITMENTS BY QTR. General Specific $148.9 $133.0 $134.6 4.9% $85.1 4.1% 3.8% $67.5 $62.3 $86.6 2.4% $39.3 $65.5 $72.3 $63.8 $47.3
Slide 23: Select Case Studies
Select Case Studies* Investment Chicago Multifamily Nashville Office Nashville Hotel Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 12/2019 10/2019 02/2020 918 Unit Garden Style 161 Key Full-Service Collateral 461,541 SF Office Portfolio Multi
Slide 24: Select Case Studies (cont’d)
Select Case Studies (cont’d) * Investment Boston Industrial Birmingham Multifamily Atlanta Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 03/2022 05/2021 08/2019 408 Unit Garden Collateral 586,590 SF Industrial Property 114,370 SF Medic
Slide 25: Overview of Risk-Rated “5” Loans
Overview of Risk-Rated “5” Loans • During Q3 2023, the Company downgraded to a risk rating of “5” a $37.1 million senior loan collateralized by a mixed-use office and retail property located in Los Angeles, CA as the collateral property’s operating performance was adversely affected by the ongoing o
Slide 26: Financial Highlights and Capitalization
Financial Highlights and Capitalization
Slide 27: Q4 2023 Business Update
Q4 2023 Business Update ▪ The Company funded approximately $15 million on existing loan commitments and upsizes during the quarter and realized over $275 million in loan repayments, paydowns and resolutions, over 60% of which were office assets, including the nonaccrual resolution described below. P
Slide 28: Third Quarter 2023 Results
Third Quarter 2023 Results ▪ GAAP Net (Loss)* of $(24.5) million, or $(0.48) per basic share, inclusive of a $(31.0) million, or $(0.60) per basic share, provision for credit losses. FINANCIAL ▪ Pre-loss Distributable Earnings** of $9.5 million, or $0.18 per basic share. Distributable (Loss)** of $(
Slide 29: Prudent and Proactive Balance Sheet Management
Prudent and Proactive Balance Sheet Management GPMT MAINTAINS A CONSERVATIVE FINANCIAL POLICY ✓ Generally, seek to match fund assets and liabilities to minimize interest-rate risk and duration ✓ Proven access to diverse sources of public and private equity and debt capital at the corporate and asset
Slide 30: Overview of Funding Sources Over Time
Overview of Funding Sources Over Time CONSERVATIVE MANAGEMENT OF BROADLY DIVERSIFIED FUNDING SOURCES FOCUSED ON NON-MARK-TO- MARKET LIABILITIES • Balance sheet management strategy emphasizes maintaining access to various sources of secured and unsecured funding while focusing on matching the term of
Slide 31: Funding Mix and Capitalization Highlights
Funding Mix and Capitalization Highlights WELL-DIVERSIFIED CAPITAL STRUCTURE WITH MODERATE LEVERAGE FINANCING SUMMARY AS OF SEPTEMBER 30, 2023 LEVERAGE* Total Outstanding Wtd. Avg Advance Non- 3.0x ($ IN MILLIONS) Capacity Balance(7) Coupon* Rate MTM* 2.2x 2.0x Repurchase Facilities(8) $1,750 $914 S
Slide 32: Endnotes
Endnotes
Slide 33: Endnotes
Endnotes 1) Mixed-use properties represented based on allocated loan amounts. 2) Max remaining term assumes all extension options are exercised and excludes four loans that have passed its maturity date and are not eligible for extension, if applicable. 3) Loan was placed on nonaccrual status as of
Slide 34: Appendix
Appendix
Slide 35: Third Quarter 2023 Financial Summary
Third Quarter 2023 Financial Summary SUMMARY INCOME STATEMENT SUMMARY BALANCE SHEET ($ IN MILLIONS, EXCEPT PER SHARE DATA) ($ IN MILLIONS, EXCEPT PER SHARE DATA, REFLECTS CARRYING VALUES) Net Interest Income $19.9 Cash $257.6 Fee Income $0.1 Restricted Cash $26.0 (Provision) for Credit Losses $(31.0
Slide 36: Key Drivers of Q3 2023 Earnings and Book Value Per Share
Key Drivers of Q3 2023 Earnings and Book Value Per Share • GAAP Net (Loss)* of $(24.5) million, or $(0.48) per basic share, inclusive of a $(31.0) million, or $(0.60) per basic share, of provision for credit losses. • Distributable (Loss)** of $(7.3) million, or $(0.14) per basic share, inclusive of
Slide 37: Sensitivity to Short-term Interest Rates
Sensitivity to Short-term Interest Rates • Portfolio is over 98% floating rate. • Well-positioned for further increases in short-term benchmark interest rates. QTR. NET INTEREST INCOME PER SHARE SENSITIVITY TO WEIGHTED AVERAGE SOFR BY LOAN VINTAGE CHANGES IN 1-MO. U.S. SOFR AS OF SEPTEMBER 30, 2023(
Slide 38: Reconciliation of GAAP Net (Loss) Income to Distributable Earnings
Reconciliation of GAAP Net (Loss) Income to Distributable Earnings * ($ IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) Q3 2023 Q2 2023 Q1 2023 Q4 2022 GAAP Net (Loss) Income* $(24.5) $1.4 $(37.5) $(9.9) Adjustments: Provision (Benefit from) for Credit Losses $31.0 $5.8 $46.4 $16.5 Loss (Gain) on Ex
Slide 39: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves • Total allowance for credit losses of $148.9 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) Q3
Slide 40: 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* $3,046.2 $2,904.2 $2,750.4 S + 3.72% S + 3.98% 3.1 66.5% 63.5% Subordinated Loans $13.
Slide 41: Investment Portfolio
Investment Portfolio All-in Origination Maximum Loan Principal Carrying Cash Yield at Original Term Property ($ IN MILLIONS) Type* Date Commitment Balance Value Coupon* Origination* (Years)* State Type Initial LTV* Stabilized LTV* Asset 1 Senior 12/19 $111.1 $109.2 $109.1 S + 2.80% S + 3.23% 3.0 IL
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) 2023 2022 ASSETS (unaudited) Loans held-for-investment $ 2,908,855 $ 3,350,150 Allowance for credit losses (145,297) (82,335) Loa
Slide 43: Condensed Consolidated Statements of Comprehensive Income (Loss)
Condensed Consolidated Statements of Comprehensive Income (Loss) 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) 2023 2022 2023 2022 In t erest income
Slide 44: Distributable Earnings
Distributable Earnings ▪ Beginning with our Annual Report on Form 10-K for the year ended December 31, 2022, and for all subsequent reporting periods ending on or after December 31, 2022, we have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a
Slide 45: 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 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) ▪ 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 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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