Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (March 2022)
47 slides from Granite Point Mortgage Trust's investor presentation, March 2022
Slide 1: Investor Presentation March 2022
Investor Presentation March 2022
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: Company Overview
Company Overview
Slide 4: Company Overview
Company Overview (1) • 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 cap
Slide 5: Corporate Snapshot
Corporate Snapshot $4.2 billion(1) 100% Loans $36 million 5.0% 63.5% Portfolio of 105 99% Senior Loans Average Loan Weighted Weighted Loan Investments 98% Floating Rate Commitment Average Yield Average LTV $3.9 billion 2.7x 0.9x 75%+ $149 million(3) Financing Capacity Total Debt-to-Equity Recourse D
Slide 6: Well-Positioned for 2022 and Beyond
Well-Positioned for 2022 and Beyond SIGNIFICANT PROGRESS IN 2021 REPOSITIONED GRANITE POINT FOR SUCCESS GOING FORWARD ✓ Recapitalized balance sheet by ✓ Several opportunities exist to continue repositioning the balance raising over $200 million of sheet to potentially improve efficiency of our capit
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 SUCCESSFULLY 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-
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: Track Record of Investment Portfolio Expansion and Diversification
Track Record of Investment Portfolio Expansion and Diversification PORTFOLIO DIVERSIFICATION IS A KEY TENET OF OUR INVESTMENT AND RISK MANAGEMENT STRATEGY At IPO December 31, 2019 December 31, 2021 Total Portfolio: $1.8 billion Total Portfolio: $5.0 billion Total Portfolio: $4.2 billion(1) Average L
Slide 21: Fourth Quarter 2021 Portfolio Activity
Fourth Quarter 2021 Portfolio Activity • Total funding activity of $268.7 million: ORIGINATIONS BY PROPERTY TYPE(1) – Closed 7 newly originated loans with total commitments Self-storage(2), Other, 4.2% of $248.6 million and initial fundings of $220.9 million 9.2% • Weighted average stabilized LTV of
Slide 22: Investment Portfolio as of December 31, 2021
Investment Portfolio as of December 31, 2021 High-quality, well-diversified, 98% floating-rate portfolio comprised of over 99% senior first mortgage loans with a weighted average stabilized LTV at origination of 63.5%(1). KEY PORTFOLIO STATISTICS PROPERTY TYPE(2) GEOGRAPHY Industrial, 3.2% Other, 1.
Slide 23: Select Case Studies
Select Case Studies (1) Investment Chicago Multifamily Houston Multifamily Greenwich Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 12/2019 08/2021 07/2021 918 Unit Garden Style Multifamily 351 Unit Garden Collateral 173,834 SF Class “A
Slide 24: Select Case Studies (cont'd)
Select Case Studies (cont’d) (1) Investment Quantico, VA Office Pittsburgh Mixed Use Denver Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date 06/2019 11/2021 01/2020 Collateral Three Class ‘A’ Office Buildings 258,385 SF Mixed Use Prop
Slide 25: Strong Portfolio Performance Through the Pandemic
Strong Portfolio Performance Through the Pandemic • Strong interest collections – in Q4’21, deferred and added to principal only $0.6 million of interest income related to loans that had been modified in prior quarters. • Weighted average portfolio risk rating of 2.6 at December 31, 2021, unchanged
Slide 26: Financial Highlights and Capitalization
Financial Highlights and Capitalization
Slide 27: Resilience Through COVID-19
Resilience Through COVID-19 STRONG PERFORMANCE THROUGH COVID -19 TOTA L D E B T / E Q U I T Y L E V E R AG E • Despite market disruption, GPMT demonstrated strong credit 3.5x 3.5x 3.3x 3.2x 3.2x 3.0x 3.0x performance and active balance sheet management. 2.8x 2.7x • Asset management – Proactive portf
Slide 28: Proactive Financial Management
Proactive Financial 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 with over 75% non-
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: Fourth Quarter and Full Year 2021 Highlights
Fourth Quarter and Full Year 2021 Highlights ▪ Q4 GAAP earnings(1) per basic share of $0.13, including ▪ FY 2021 GAAP earnings(1) per basic share of $1.24, $(0.17) per share charge on early extinguishment of debt. including $0.37 per share reduction of CECL reserves. FINANCIAL ▪ Q4 Distributable Ear
Slide 31: Diversified Capital Sources
Diversified Capital Sources WELL-DIVERSIFIED CAPITALIZATION PROFILE WITH MODERATE LEVERAGE FINANCING SUMMARY AS OF DECEMBER 31, 2021 LEVERAGE(4) Total Outstanding Wtd. Avg Advance Non- 3.0x 2.7x ($ IN MILLIONS) Capacity Balance(1) Coupon(2) Rate MTM(3) 2.0x Repurchase Facilities(5) $2,100 $677 L + 2
Slide 32: Company Business Update
Company Business Update (1) ▪ Defensively-positioned and broadly-diversified portfolio of 100% CRE loans (over 99% senior first mortgages) with weighted average stabilized LTV of 63.5%(2). ▪ Strong collections of interest through February 2022, with 100% of borrowers making their contractual payment
Slide 33: Appendix
See PERC OLE TELE LY Appendix penne | Bi
Slide 34: Fourth Quarter 2021 Financial Summary
Fourth Quarter 2021 Financial Summary SUMMARY INCOME STATEMENT SUMMARY BALANCE SHEET ($ IN MILLIONS, EXCEPT PER SHARE DATA) ($ IN MILLIONS, EXCEPT PER SHARE DATA, REFLECTS CARRYING VALUES) Net Interest Income $20.0 Cash $191.9 Benefit from (Provision for) Credit Losses $5.0 Loans Held-for-Investment
Slide 35: Key Drivers of Fourth Quarter 2021 Earnings and Book Value Per Share
Key Drivers of Fourth Quarter 2021 Earnings and Book Value Per Share • GAAP earnings of $6.7 million, or $0.13 per basic share, inclusive of an $(8.9) million, or $(0.17) per basic share, loss on early extinguishment of debt related to partial repayment of the term loan and a $5.0 million, or $0.09
Slide 36: LIBOR Floors and Sensitivity of Net Interest Income to Rising Short-Term Interest Rates
LIBOR Floors and Sensitivity of Net Interest Income to Rising Short-Term Interest Rates • Portfolio is over 98% floating rate with a wtd. avg. LIBOR floor of QUARTERLY NET INTEREST INCOME PER SHARE SENSITIVITY TO 1.17%, which is currently benefiting the net interest margin. CHANGES IN 1-MONTH U.S. L
Slide 37: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings (1) ($ IN MILLIONS, EXCEPT PER SHARE DATA) Q4 2021 Q3 2021 Q2 2021 Q1 2021 GAAP Net Income(1) $6.7 $18.6 $14.2 $28.0 Adjustments: (Benefit from) Provision for Credit Losses $(5.0) $(5.8) $(0.2) $(9.1) Loss on Extinguishment of Debt $8.9 $-
Slide 38: Financial Statements Impact of CECL Reserves
Financial Statements Impact of CECL Reserves • Total allowance for credit losses of $42.4 million, of which $1.5 million is related to future funding obligations and recorded in other liabilities. • Loans reported on the balance sheet are net of the allowance for credit losses. At At At At At ($ in
Slide 39: Summary of Investment Portfolio
Summary of Investment Portfolio Original Maximum Loan Principal Carrying Cash All-in Yield at Term Stabilized ($ IN MILLIONS) Commitment Balance Value Coupon(1) Origination(1) (Years)(1) Initial LTV(1) LTV(1) Senior Loans(1) $4,185.4 $3,781.8 $3,728.4 L + 3.48% L + 4.07% 3.1 66.4% 63.6% Subordinated
Slide 40: Investment Portfolio Detail
Investment Portfolio Detail All-in Origination Maximum Loan Principal Carrying Cash Yield at Original Term Property ($ IN MILLIONS) Type(1) Date Commitment Balance Value Coupon(1) Origination(1) (Years)(1) State Type Initial LTV(1) Stabilized LTV(1) Asset 1 Senior 12/15 120.0 120.0 119.3 L + 4.15% L
Slide 41: Condensed Balance Sheets
Condensed Balance Sheets GRANITE POINT MORTGAGE TRUST INC. December 31, December 31, CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) 2021 2020 ASSETS Loans held-for-investment $ 3,782,205 $ 3,914,469 Allowance for credit losses (40,897) (66,666) Loans held-for-investment, net
Slide 42: Condensed Statements of Comprehensive (Loss) Income
Condensed Statements of Comprehensive (Loss) Income GRANITE POINT MORTGAGE TRUST INC. Three Months Ended Year Ended CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, December 31, (in thousands, except share data) 2021 2020 2021 2020 Interest income: (unaudited) (unaudited
Slide 43: Distributable Earnings
Distributable Earnings ▪ 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, 2021, we have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a
Slide 44: 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 45: 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 46: 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
Slide 47: soeee
soeee x ’ ' i E. "yy sranite POINT: — ne A) MORTGAGE TRUST nl ees ”
Granite Point Mortgage Trust — Investor Presentation (March 2022) on 6ix