Core Viewpoint - The article revisits Granite Point Mortgage Trust Inc. (NYSE: GPMT) after a 1.5-year hiatus, focusing on the preferred shares and their investment potential [1]. Company Overview - Granite Point Mortgage Trust Inc. is highlighted as a company of interest for investors, particularly in the context of preferred shares [1]. Investment Strategy - The investment group European Small Cap Ideas emphasizes high-quality small-cap investment opportunities, focusing on capital gains and dividend income for continuous cash flow [1]. - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1]. Analyst Position - The analyst has a beneficial long position in GPMT.PR.A shares, indicating a personal investment interest in the company [1].

Financial Performance - For the year ended December 31, 2024, the company recorded a GAAP net loss attributable to common stockholders of $(221.5) million, or $(4.39) per basic common share[261]. - The company reported a net loss attributable to common stockholders of $221,452,000 for 2024, compared to a loss of $77,649,000 in 2023, representing a 184.5% increase in losses[413]. - The basic loss per share for 2024 was $4.39, compared to a loss of $1.50 per share in 2023[413]. - The company reported a net loss for the year ended December 31, 2024, of $207.051 million, compared to a net loss of $63.198 million in 2023, indicating a significant increase in losses[418]. - Total interest income for the year ended December 31, 2024, was $185.6 million, down from $263.7 million in 2023[311]. - Total interest income decreased to $185.6 million in 2024 from $263.7 million in 2023, mainly due to a higher average balance of nonaccrual loans[331]. - Total operating expenses rose to $50.1 million in 2024 from $43.3 million in 2023, with an increase in expenses from real estate owned operations due to acquisitions[335]. - Total expenses increased to $50,073,000 in 2024, up 15.6% from $43,290,000 in 2023[413]. - Provision for credit losses increased to $(201.4) million in 2024 from $(104.8) million in 2023, driven by an increase in the allowance for certain collateral-dependent loans[333]. - Provision for credit losses significantly rose to $201,412,000 in 2024, compared to $104,807,000 in 2023, indicating a 92.2% increase[413]. Dividends and Stockholder Equity - The company declared a cash dividend of $0.30 per share of common stock, totaling $16.1 million, compared to $0.80 per share in 2023[263]. - The company declared a total cash dividend of $0.30 per share for 2024, with $0.15 classified as ordinary dividends and $0.15 as qualified dividends[342]. - Stockholders' equity decreased to $619.1 million in 2024 from $858.9 million in 2023, a decline of about 28.0%[408]. - The total stockholders' equity as of December 31, 2024, was $619,217,000, down from $859,023,000 in 2023, reflecting a decline of 27.9%[415]. - The Company’s dividends payable decreased to $6.2 million in 2024 from $14.1 million in 2023, a reduction of about 56.0%[408]. Loan Portfolio and Credit Risk - The company maintained a portfolio of 54 loan investments with an aggregate unpaid principal balance of $2.1 billion and total commitments of $2.2 billion[261]. - The allowance for credit losses increased by $63.9 million, totaling $201.0 million, approximately 9.2% of total loan commitments of $2.2 billion[261]. - The loan portfolio consisted of 54 investments, with total loan commitments of $2.2 billion and an unpaid principal balance of $2.1 billion as of December 31, 2024[273]. - The weighted average risk rating of the loan portfolio increased to 3.1 as of December 31, 2024, compared to 2.8 at the end of 2023[273]. - The company actively manages loan investments and assesses credit risk quarterly, focusing on the performance of underlying collateral properties[283]. - The allowance for credit losses is reported at $199.7 million, reflecting the company's proactive risk management strategy[280]. - The company is exposed to credit risk due to the performance of its borrowers, which may be adversely affected by rising interest rates and inflation[368]. - The company has maintained its commitment to evaluating and adjusting its credit loss estimates based on macroeconomic conditions and loan-specific factors[401]. Financing and Debt - The company extended the Morgan Stanley financing facility to June 28, 2025, with a maximum borrowing capacity adjusted to $250 million[261]. - The company reported a total debt-to-equity ratio of 2.2:1.0 and a recourse leverage ratio of 1.0:1.0 as of December 31, 2024, reflecting an increase due to higher CECL reserves[306]. - The debt-to-equity ratio as of December 31, 2024, was 2.2:1.0, indicating a significant leverage position[339]. - As of December 31, 2024, the company had outstanding $0.8 billion in securitized debt obligations with a weighted average borrowing rate of 6.6%[338]. - The company had $8.0 million in restricted cash as of December 31, 2024, included in the calculations of collateral assets[302]. - The company had $1.5 billion in loan-level financing, which includes $0.6 billion in secured repurchase agreements and $0.8 billion in CRE CLO securitizations[344]. Cash Flow and Liquidity - The company’s cash and cash equivalents decreased by approximately $84.7 million to $114.5 million for the year ended December 31, 2024[355]. - Cash flows from operating activities increased cash balances by approximately $8.8 million, while financing activities decreased cash balances by approximately $528.7 million[359]. - As of December 31, 2024, the company had immediate liquidity sources totaling $87.8 million, primarily from cash and cash equivalents[349]. - The company has $90.6 million in unfunded loan commitments and plans to manage liquidity needs through various strategies, including potential asset sales[352]. - Cash, cash equivalents, and restricted cash at the end of the period were $114.470 million, down from $199.216 million at the end of 2023, a decrease of approximately 42.5%[418]. Market Conditions and Strategy - The company continues to monitor factors affecting its operating results, including interest rates, credit performance, and market conditions[315]. - The Federal Reserve raised its benchmark overnight interest rates multiple times in 2022 and 2023, impacting the company's interest expense and potentially leading to loan non-performance[372]. - The current macroeconomic environment has led to a decrease in prepayment rates and an increase in loan extension options, potentially impacting operational results[388]. - The company employs a long-term, fundamental value-oriented investment strategy, focusing on a diversified portfolio across property types and geographies[369]. - The company monitors market conditions and capital markets to inform decisions on capital raising, which is critical due to its REIT status[382]. Real Estate Owned (REO) and Asset Management - The company’s real estate owned, net increased to $42.8 million in 2024 from $16.9 million in 2023, reflecting a growth of approximately 153.3%[408]. - The company did not record any impairments of real estate for the years ended December 31, 2024, and 2023, indicating stable asset performance[446]. - As of December 31, 2024, real estate owned (REO) and related acquired assets are depreciated over useful lives ranging from 15 to 39 years[444].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported a GAAP net loss of $42.4 million or negative $0.86 per basic common share, which includes a provision for credit losses of $37.2 million or negative $0.75 per basic common share [30] - The attributable loss for the quarter was $98.2 million or negative $1.98 per basic common share, including write-offs of $95.2 million or negative $1.92 per basic common share [31] - The book value at December 31 was $8.47 per common share, representing a decline of about $0.78 per share from Q3 [32] Business Line Data and Key Metrics Changes - The total loan portfolio commitments at the end of Q4 were $2.2 billion, with an outstanding principal balance of $2.1 billion [17] - The loan portfolio yield for Q4 was approximately 6.6% net of the impact of nonaccrual loans, estimated to be about 214 basis points [18] - The company resolved nine loans totaling about $344 million during 2024, with significant activity in the third and fourth quarters [11] Market Data and Key Metrics Changes - The commercial real estate market showed improved liquidity in the second half of 2024, with a consensus that real estate prices have bottomed out [10] - Liquidity in the floating rate transitional middle market sector remains less robust, particularly among regional and community banks [11] Company Strategy and Development Direction - The company aims to optimize economic outcomes through a balanced portfolio management approach, focusing on timing, profitability, and liquidity [13] - There is an expectation to return to new originations in the latter part of 2025, with a focus on growing the portfolio and improving run rate profitability [16] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging for the commercial real estate industry, but liquidity and transaction volume are expected to improve in 2025 [15] - The company anticipates that ongoing resolutions of nonperforming loans will exceed potential future credit events, leading to improved profitability over time [15] Other Important Information - The company repurchased about 2.4 million shares during 2024, reflecting confidence in the stock's undervaluation [14] - The aggregate CECL reserve at December 31 was about $201 million, down from $259 million in the previous quarter [32] Q&A Session Summary Question: Details on new five-rated assets and comfort on current ratings - Management expressed confidence in the current risk rankings and reserves, noting that the Louisville Student Housing Property was downgraded due to a lower-than-expected arbitration award [40][41] Question: Need for liquidity and rationale for leverage - Management indicated that maintaining liquidity is a priority, with no immediate targeted needs but a desire for flexibility [44] Question: Opportunities in the CLO market - Management acknowledged potential refinancing opportunities in the CLO market but indicated that such actions would not occur in the immediate term [50][52] Question: Concerns about asset management and credit downgrades - Management highlighted ongoing asset management efforts and the complexity of individual loan situations, particularly regarding the Kentucky asset [62][64] Question: Dividend policy and capital management strategy - Management discussed the decision to maintain the dividend while working towards covering it through resolutions and prepayments, emphasizing the importance of preserving valuable liabilities [72][74]

Q4 and Full Year 2024 Earnings Supplemental February 14, 2025 Legal Disclosures 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 differ from our beliefs, expectations, estimates, projections and illustrations and, consequently, you should not rely on these forward-l ...

Company Performance - Granite Point Mortgage Trust (GPMT) reported a quarterly loss of $1.98 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.58, and a significant decline from earnings of $0.14 per share a year ago, indicating a negative earnings surprise of -25.32% [1] - The company posted revenues of $7.57 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 4.17%, and a decrease from year-ago revenues of $17.33 million [2] - Over the last four quarters, GPMT has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Market Comparison - GPMT shares have increased approximately 10% since the beginning of the year, outperforming the S&P 500's gain of 2.9% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.88 on revenues of $8.9 million, and for the current fiscal year, it is -$2.58 on revenues of $39.1 million [7] - The estimate revisions trend for GPMT is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the shares are expected to perform in line with the market in the near future [6] Industry Context - The REIT and Equity Trust industry, to which GPMT belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Performance - Granite Point Mortgage Trust Inc. reported a GAAP net loss attributable to common stockholders of $(221.5) million, or $(4.39) per basic common share for the full year 2024[6]. - The company recognized distributable earnings (loss) of $(143.9) million, or $(2.85) per basic share, including write-offs of $(146.3) million for the full year 2024[6]. - The company recorded a net loss attributable to common stockholders of $42.44 million for the three months ended December 31, 2024, compared to a net loss of $17.07 million for the same period in 2023[20]. - Distributable Earnings (Loss) for the three months ended December 31, 2024, was $(98.16) million, reflecting a significant decline from $(6.41) million in the prior year[21]. - Basic (loss) earnings per weighted average common share for the three months ended December 31, 2024, was $(0.86), compared to $(0.33) for the same period in 2023[20]. Loan Portfolio and Credit Losses - The net loan portfolio activity for the full year 2024 showed a decrease of $(620.8) million in unpaid principal balance, with twelve full loan repayments totaling $(414.7) million[6]. - Granite Point resolved nonperforming loans totaling over $340 million in 2024, with additional resolutions expected in 2025[3]. - The provision for credit losses for the twelve months ended December 31, 2024, was $201.41 million, compared to $104.81 million for the same period in 2023, indicating a substantial increase in expected credit losses[21]. Assets and Cash Position - The total assets of Granite Point Mortgage Trust Inc. decreased to $2.115 billion as of December 31, 2024, down from $2.847 billion in 2023[19]. - The company ended the quarter with $87.8 million in unrestricted cash and a total leverage of 2.2x, with no corporate debt maturities remaining[6]. Shareholder Returns and Dividends - The company repurchased approximately 2.4 million common shares at an average price of $3.16 per share, totaling $7.6 million, resulting in book value accretion of approximately $0.28 per share[6]. - The company declared dividends of $0.05 per common share for the three months ended December 31, 2024, down from $0.20 per share in the same period of 2023[20]. Income and Expenses - For the three months ended December 31, 2024, Granite Point Mortgage Trust Inc. reported total interest income of $38.72 million, a decrease of 37.0% from $61.50 million in the same period of 2023[20]. - Total expenses for the three months ended December 31, 2024, were $12.50 million, an increase from $10.39 million in the same period of 2023[20]. Valuation and Metrics - The book value per common share was reported at $8.47, inclusive of $(4.12) per common share of total CECL reserve[6]. - Granite Point's loan portfolio carried a weighted average stabilized loan-to-value (LTV) ratio at origination of 64.4% and a realized loan portfolio yield of 6.6%[6]. - The weighted average number of basic common shares outstanding for the three months ended December 31, 2024, was 49,492,595, a decrease from 51,156,015 in the same period of 2023[20]. Non-GAAP Measures - Granite Point Mortgage Trust Inc. has adopted Distributable Earnings (Loss) as a non-GAAP measure to evaluate operating performance, which is intended to serve as a proxy for taxable income[21].

Group 1 - Granite Point Mortgage Trust (NYSE: GPMT) has experienced a challenging year, with its common equity declining by 36% [1] - The mortgage REIT primarily holds a portfolio of commercial property-backed loans, historically focusing on office properties [1] - The equity market plays a significant role in wealth creation or destruction over the long term, with daily price fluctuations contributing to this dynamic [1] Group 2 - Pacifica Yield aims to achieve long-term wealth creation by focusing on undervalued, high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Granite Point Mortgage Trust (GPMT) came out with a quarterly loss of $0.04 per share versus the Zacks Consensus Estimate of a loss of $0.96. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 95.83%. A quarter ago, it was expected that this real estate investment trust would post a loss of $0.08 per share when it actually produced a loss of $0.05, delivering a surprise of 37.50%.Over the last f ...

Financial Performance - GAAP net loss attributable to common stockholders for Q3 2024 was $(34.6) million, or $(0.69) per basic share[103]. - Distributable loss to common stockholders for Q3 2024 was $(38.0) million, or $(0.75) per basic share, including $(44.6) million in write-offs[103]. - GAAP net loss attributable to common stockholders for Q3 2024 was $34.6 million, compared to a loss of $24.5 million in Q3 2023[107]. - Distributable loss earnings for Q3 2024 were $38.0 million, significantly higher than a loss of $7.3 million in Q3 2023[107]. - The book value per share of common stock decreased to $9.25 as of September 30, 2024, down from $12.91 at December 31, 2023[108]. - Total interest income for the quarter was $66,687 thousand, compared to $202,232 thousand for the nine months ended September 30, 2023[1]. - Net interest income for the nine months ended September 30, 2024, was $28.3 million, down from $64.7 million for the same period in 2023[158]. Loan Portfolio and Credit Losses - Total allowance for credit losses decreased by $(7.9) million, totaling $259.0 million, approximately 10.5% of total loan commitments of $2.5 billion[103]. - The company recorded a provision for credit losses of $(27.9) million for Q3 2024, which was excluded from Distributable Earnings[105]. - The weighted average risk rating of the loan portfolio increased to 3.1 from 2.8 at December 31, 2023[111]. - Nine loans with a risk rating of "5" had an aggregate principal balance of $508.5 million, with an allowance for credit losses of $200.3 million[123]. - Provision for credit losses for Q3 2024 was $(27.9) million compared to $(60.8) million in Q2 2024, reflecting a smaller increase in the allowance for certain loans[154]. - The provision for credit losses for the nine months ended September 30, 2024, was $(164.2) million compared to $(83.2) million in 2023, driven by an increase in the allowance for certain loans[161]. Operational Metrics - The company maintained a portfolio of 62 loan investments with an aggregate unpaid principal balance of $2.3 billion and total commitments of $2.5 billion[103]. - The company funded $9.8 million under existing loan commitments during Q3 2024[111]. - Total loan activity for Q3 2024 resulted in net reductions of $274.8 million in unpaid principal balance, compared to $187.6 million in Q3 2023[110]. - The company achieved a 5.50% increase in senior loans for the latest quarter, reflecting strong demand[115]. - Revenue from REO operations increased to $3.8 million in Q3 2024 from $1.1 million in Q2 2024, attributed to the first full quarter of activity from a recent acquisition[155]. Liquidity and Capitalization - At September 30, 2024, the company had unrestricted cash of $113.5 million and $53.6 million of unlevered REO assets[103]. - The company maintained unrestricted cash liquidity of $113,500,000, exceeding the required minimum of $30,000,000[134]. - The total debt-to-equity ratio was 2.2:1.0 as of September 30, 2024, reflecting an increase from 2.1:1.0 as of December 31, 2023[137]. - The company had cash and cash equivalents of $113.5 million as of September 30, 2024, with no approved but unused borrowing capacity[167]. - The debt-to-equity ratio improved from 2.5:1.0 to 2.2:1.0 between June 30, 2024, and September 30, 2024, primarily due to a reduction in total outstanding debt[165]. Market Conditions and Risks - The office property market is facing higher vacancies and slower leasing activity due to remote work arrangements, impacting borrowers' performance[101]. - Recent macroeconomic challenges, including inflation and high interest rates, have adversely affected borrowers and the overall economy, impacting the company's operations[176]. - The Federal Reserve's interest rate increases have raised the company's interest expense, which may not be fully offset by increases in interest income[178]. - The company is exposed to risks related to borrower non-performance, particularly if interest rates rise significantly, potentially impacting cash flows[182]. - Liquidity risk is associated with financing longer-maturity investments with shorter-term borrowings, which may lead to adverse changes in liquidity if collateral values decrease[186]. Future Outlook and Strategy - Overall, the company is optimistic about future performance, projecting a steady increase in loan demand across various sectors[115]. - The company is focusing on market expansion, particularly in Texas and California, where growth rates are above 3%[115]. - The company intends to distribute substantially all of its taxable income to stockholders to comply with REIT provisions, with distributions subject to board discretion[172]. - The company actively explores additional funding facilities to diversify financing sources amid market volatility and high interest rates[1]. - The company aims to mitigate credit risk by diversifying its investment portfolio across geographical regions and property types[1].

Granite Point Mortgage Trust Inc. Reports Third Quarter 2024 Financial Results and Post Quarter-End Update NEW YORK, November 6, 2024 – Granite Point Mortgage Trust Inc. (NYSE: GPMT) ("GPMT," "Granite Point" or the "Company") today announced its financial results for the quarter ending September 30, 2024, and provided an update on its activities subsequent to quarter-end. An earnings supplemental containing third quarter 2024 financial results can be viewed at www.gpmtreit.com. "Our third quarter results ar ...