Granite Point Mortgage Trust Inc. (NYSE:GPMT) Q2 2023 Earnings Conference Call August 9, 2023 11:00 AM ET Company Participants Chris Petta - Investor Relations Jack Taylor - President and Chief Executive Officer Steve Alpart - Chief Investment Officer and Co-Head-Originations Marcin Urbaszek - Chief Financial Officer Steve Plust - Chief Operating Officer Peter Morral - Chief Development Officer and Co-Head of Originations Conference Call Participants Steve DeLaney - JMP Securities Stephen Laws - Raymond Jam ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for June 30, 2023, including balance sheets, income, equity, and cash flow statements, which show total assets decreased to **$3.31 billion**, net income for common stockholders was **$1.4 million** in Q2 2023, and cash increased by **$136.7 million** in the first six months due to loan repayments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Loans held-for-investment, net | $2,966,088 | $3,267,815 | | Cash and cash equivalents | $235,840 | $133,132 | | Total Assets | $3,310,856 | $3,454,101 | | Total Liabilities | $2,386,409 | $2,469,431 | | Total Equity | $924,447 | $983,670 | Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Account | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $21,840 | $21,935 | $44,753 | $45,447 | | Provision for credit losses | $(5,818) | $(13,627) | $(52,228) | $(17,315) | | Net income (loss) | $5,041 | $(13,731) | $(28,788) | $(9,095) | | Net income (loss) attributable to common stockholders | $1,416 | $(17,356) | $(36,038) | $(16,345) | | Basic earnings (loss) per share | $0.03 | $(0.32) | $(0.69) | $(0.30) | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended, in thousands) | Cash Flow Activity | June 30, 2023 (in thousands) | June 30, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $26,391 | $22,780 | | Net cash provided by (used in) investing activities | $231,305 | $(99,874) | | Net cash (used in) provided by financing activities | $(121,011) | $92,485 | | Net increase (decrease) in cash | $136,685 | $15,391 | [Note 3. Loans Held-for-Investment, Net of Allowance for Credit Losses](index=11&type=section&id=Note%203.%20Loans%20Held-for-Investment%2C%20Net%20of%20Allowance%20for%20Credit%20Losses) This note details the company's loan portfolio, with a carrying value of **$2.97 billion** as of June 30, 2023, a significantly increased allowance for credit losses of **$130.4 million** due to a **$52.3 million** provision, and a slightly increased weighted average risk rating from **2.5 to 2.7** Loan Portfolio by Property Type (Carrying Value) | Property Type | June 30, 2023 (in thousands) | % of Portfolio | | :--- | :--- | :--- | | Office | $1,240,544 | 41.8% | | Multifamily | $917,566 | 30.9% | | Hotel | $258,638 | 8.7% | | Retail | $275,440 | 9.3% | | Industrial | $187,072 | 6.4% | | Other | $86,828 | 2.9% | | **Total** | **$2,966,088** | **100.0%** | - The allowance for credit losses on loans held-for-investment increased to **$130.4 million** as of June 30, 2023, from **$82.3 million** at year-end 2022. The provision for credit losses for the first six months of 2023 was **$52.3 million**[50](index=50&type=chunk)[55](index=55&type=chunk) - As of June 30, 2023, there were four senior loans with a total unpaid principal balance of **$245.6 million** on nonaccrual status[55](index=55&type=chunk) Loan Portfolio by Risk Rating (Unpaid Principal Balance) | Risk Rating | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | 1 - Lower Risk | $158,427 | $291,236 | | 2 - Average Risk | $1,541,383 | $1,857,744 | | 3 - Acceptable Risk | $797,189 | $697,532 | | 4 - Higher Risk | $362,744 | $268,236 | | 5 - Loss Likely | $245,619 | $247,258 | | **Total** | **$3,105,362** | **$3,362,006** | [Note 4. Real Estate Owned, Net](index=17&type=section&id=Note%204.%20Real%20Estate%20Owned%2C%20Net) On May 16, 2023, the company acquired an office property in Phoenix, AZ, via deed-in-lieu of foreclosure, recognizing it as REO with a **$24.0 million** carrying value, generating **$0.46 million** in revenue and incurring **$1.66 million** in expenses for the quarter - On May 16, 2023, the company acquired legal title to an office property in Phoenix, AZ, via a negotiated deed-in-lieu of foreclosure. The property was recognized as REO with a carrying value of **$24.0 million**[67](index=67&type=chunk) REO Operations (in thousands) | Account | Three Months Ended June 30, 2023 (in thousands) | | :--- | :--- | | Revenue from real estate owned operations | $462 | | Expenses from real estate owned operations | $(1,664) | | **Total** | **$(1,202)** | [Note 6. Secured Financing Agreements](index=20&type=section&id=Note%206.%20Secured%20Financing%20Agreements) This note details the company's secured financing, totaling **$1.22 billion** in outstanding borrowings as of June 30, 2023, confirming compliance with all financial covenants, including a tangible net worth of **$1.1 billion** against a **$931.7 million** requirement and a **1.5:1.0** interest coverage ratio Outstanding Secured Financing as of June 30, 2023 (in thousands) | Facility Type | Amount Outstanding (in thousands) | | :--- | :--- | | Repurchase facilities | $1,072,132 | | Asset-specific financings | $45,823 | | Secured credit facility | $100,000 | | **Total** | **$1,217,955** | - The company was in compliance with all financial covenants as of June 30, 2023. Key covenants include a minimum tangible net worth of **$931.7 million** (actual **$1.1 billion**) and a minimum interest coverage ratio of **1.5:1.0** (actual **1.5:1.0**)[94](index=94&type=chunk)[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the challenging macroeconomic environment impacting commercial real estate, reporting Q2 2023 GAAP net income of **$0.03 per share** and Distributable Earnings of **$0.12 per share**, with a slight decline in loan portfolio credit quality to a **2.7** weighted average risk rating, while maintaining **$235.8 million** in unrestricted cash and a **2.3:1.0** total debt-to-equity ratio [Second Quarter 2023 Activity](index=32&type=section&id=Second%20Quarter%202023%20Activity) In Q2 2023, the company generated **$1.4 million** GAAP net income (**$0.03/share**) and **$6.0 million** Distributable Earnings (**$0.12/share**), declared a **$0.20 per share** dividend, and saw **$206.2 million** in loan repayments and a **$24.0 million** office property acquisition, with book value per share at **$13.93** Q2 2023 Key Operating Results | Metric | Value | | :--- | :--- | | GAAP net income (to common) | $1.4 million | | GAAP EPS (basic) | $0.03 | | Distributable Earnings (to common) | $6.0 million | | Distributable EPS (basic) | $0.12 | | Common Dividend Declared | $0.20 per share | | Book Value per Share | $13.93 | - Portfolio activity included **$206.2 million** in loan repayments and the acquisition of an office property valued at **$24.0 million** through a deed-in-lieu of foreclosure[160](index=160&type=chunk) [Loan Portfolio Overview and Management](index=35&type=section&id=Loan%20Portfolio%20Overview%20and%20Management) As of June 30, 2023, the loan portfolio comprised **82 investments** with a **$3.1 billion** unpaid principal balance, primarily senior first mortgage loans, and saw its weighted average risk rating increase from **2.5 to 2.7** due to office sector downgrades, with four loans on nonaccrual status Loan Portfolio Summary as of June 30, 2023 | Metric | Value | | :--- | :--- | | Number of loans | 82 | | Unpaid principal balance | $3.1 billion | | Carrying value | $2.97 billion | | Weighted-average all-in yield | S+4.03% | | Stabilized LTV at origination | 62.9% | - The weighted average risk rating of the loan portfolio increased to **2.7** as of June 30, 2023, compared to **2.5** as of December 31, 2022, mainly due to downgrades of office-related loans[190](index=190&type=chunk) - During Q2 2023, two loans were downgraded from a risk rating of '**3**' to '**4**', including a **$79.8 million** office loan in Chicago and a **$37.1 million** mixed-use property in Los Angeles[65](index=65&type=chunk)[191](index=191&type=chunk) [Portfolio Financing and Liquidity](index=40&type=section&id=Portfolio%20Financing%20and%20Liquidity) The company's financing structure includes repurchase agreements and CRE CLOs, with non-mark-to-market sources accounting for **52%** of its **$2.2 billion** loan-level financing, while maintaining **$235.8 million** in unrestricted cash and a **2.3:1.0** total debt-to-equity ratio, in compliance with all financial covenants - As of June 30, 2023, non-mark-to-market financing sources (CRE CLOs, asset-specific financing, etc.) accounted for approximately **52.0%** of the total **$2.2 billion** in portfolio loan-level financing[194](index=194&type=chunk)[195](index=195&type=chunk) - The company maintained unrestricted cash of **$235.8 million** as of June 30, 2023[162](index=162&type=chunk)[254](index=254&type=chunk) Leverage Ratios | Ratio | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Recourse leverage ratio | 1.2:1.0 | 1.2:1.0 | | Total leverage ratio | 2.3:1.0 | 2.3:1.0 | [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Comparing Q2 2023 to Q1 2023, net interest income slightly decreased to **$21.8 million** due to rising interest expenses, while the provision for credit losses was significantly lower at **$5.8 million** in Q2, though the first half of 2023 saw a larger net loss due to a substantially higher **$52.2 million** provision compared to H1 2022 Quarterly Net Interest Income Comparison (in thousands) | Period | Total Interest Income (in thousands) | Total Interest Expense (in thousands) | Net Interest Income (in thousands) | | :--- | :--- | :--- | :--- | | Q2 2023 | $68,826 | $46,986 | $21,840 | | Q1 2023 | $66,719 | $43,806 | $22,913 | Six-Month Provision for Credit Losses Comparison (in thousands) | Period | Provision for Credit Losses (in thousands) | | :--- | :--- | | H1 2023 | $(52,228) | | H1 2022 | $(17,315) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's primary market risks—credit, interest rate, liquidity, and real estate—all magnified by current macroeconomic conditions, with a strategy to mitigate interest rate risk by matching floating-rate assets and liabilities, and an analysis showing a **100 basis point** rate increase would boost annualized net interest income by **$5.7 million**, while also facing extension risk - The company's primary risks are **credit risk**, **interest rate risk**, **liquidity risk**, and **real estate risk**[263](index=263&type=chunk)[265](index=265&type=chunk)[281](index=281&type=chunk)[283](index=283&type=chunk) Interest Rate Sensitivity Analysis (in thousands) | Change in Interest Rates | Change in Annualized Net Interest Income (in thousands) | | :--- | :--- | | +100 bps | $5,682 | | +50 bps | $2,841 | | -50 bps | $(2,841) | | -100 bps | $(5,682) | - The company faces **extension risk**, as rising interest rates and market disruptions may cause borrowers to exercise extension options, potentially creating a maturity mismatch with the company's financing facilities[284](index=284&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2023, with **no material changes** to internal control over financial reporting during the second quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[286](index=286&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, internal controls[287](index=287&type=chunk) [PART II - OTHER INFORMATION](index=59&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is **not currently involved** in any legal proceedings expected to have a material adverse effect on its financial condition or results of operations - As of the filing date, the company is **not party** to any litigation or legal proceedings that would have a material adverse effect on its results of operations or financial condition[289](index=289&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the Annual Report on Form 10-K for the year ended December 31, 2022, for a comprehensive discussion of risk factors - The report refers to Part I, Item 1A. 'Risk Factors' in the Annual Report on Form 10-K for the year ended December 31, 2022, for information on risk factors[290](index=290&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported **no unregistered sales** of equity securities or use of proceeds from such sales during the period - **None reported**[291](index=291&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported **no defaults** upon its senior securities - **None reported**[292](index=292&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) The company disclosed that **no director or officer adopted or terminated** a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2023 - During the three months ended June 30, 2023, **no director or officer adopted or terminated** a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'[294](index=294&type=chunk)

Safe Harbor Statement First Quarter 2023 Results * See definition in the appendix. 4 First Quarter 2023 Earnings Supplemental This presentation is for informational purposes only and shall not constitute, or form a part of, an offer to sell or buy or the solicitation of an offer to sell or the solicitation of an offer to buy any securities. First Quarter 2023 Financial Summary • GAAP Net (Loss)* of $(37.5) million, or $(0.72) per basic share, inclusive of a $(46.4) million, or $(0.89) per basic share, of pr ...

Granite Point Mortgage Trust Inc. (NYSE:GPMT) Q1 2023 Earnings Conference Call May 10, 2023 11:00 AM ET Company Participants Chris Petta – Investor Relations Jack Taylor – President and Chief Executive Officer Steve Alpart – Chief Investment Officer and Co-Head-Originations Marcin Urbaszek – Chief Financial Officer Steve Plust – Chief Operating Officer Conference Call Participants Steve DeLaney – JMP Securities Stephen Laws – Raymond James Douglas Harter – Credit Suisse Jade Rahmani – KBW Operator Good morn ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38124 GRANITE POINT MORTGAGE TRUST INC. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Maryland 61-1843143 (State or other jurisdi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 GRANITE POINT MORTGAGE TRUST INC. For the transition period from to (Exact Name of Registrant as Specified in Its Charter) Commission file number 001-38124 Securities registered pursuant to Section 12(b) of ...

Granite Point Mortgage Trust Inc. (NYSE:GPMT) Q4 2022 Earnings Conference Call February 24, 2023 11:00 AM ET Company Participants Chris Petta - IR Jack Taylor - President and CEO Steve Alpart - Chief Investment Officer and Co-Head of Originations Marcin Urbaszek - CFO Peter Morral - Chief Development Officer and Co-Head of Originations Steve Plust - Chief Operating Officer Conference Call Participants Doug Harter - Credit Suisse Steve Delaney - JMP Securities Jade Rahmani - Keefe, Bruyette, & Woods Operat ...

Granite Point Mortgage Trust Inc. (NYSE:GPMT) Q3 2022 Earnings Conference Call November 9, 2022 11:00 AM ET Company Participants Chris Petta - IR Jack Taylor - President and CEO Steve Alpart - Chief Investment Officer and Co-Head of Originations Marcin Urbaszek - CFO Conference Call Participants Doug Harter - Credit Suisse Steve Delaney - JMP Securities Operator Good morning. My name is Jason. I will be your conference facilitator. At this time, I would like to welcome everyone to Granite Point Mortgage Tru ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38124 GRANITE POINT MORTGAGE TRUST INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpo ...

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $17.4 million or $0.32 per basic share for Q2 2022, compared to a GAAP net income of $1 million or $0.02 per basic share in Q1 2022 [28] - Distributable earnings for Q2 were $11.7 million or $0.22 per basic share, excluding provisions for credit losses and losses on debt extinguishment [28] - The book value as of June 30 was $16.01 per share, down from $16.39 per share in the previous quarter [29] Business Line Data and Key Metrics Changes - The company funded over $380 million in loans in the first half of 2022, exceeding $290 million in repayments, resulting in modest portfolio growth [8] - In Q2, the company closed five new loans totaling about $202 million in commitments, with over $165 million in initial fundings [18] - The portfolio ended Q2 with an aggregate committed balance of $4.2 billion, including $360 million of future funding commitments [21] Market Data and Key Metrics Changes - The company noted a slowdown in real estate transaction activity due to elevated macroeconomic uncertainty and capital markets volatility, primarily driven by rising interest rates [8][9] - The repayment pace has moderated, with year-to-date repayments totaling approximately $450 million across various property types, including over $185 million in office loans [26] Company Strategy and Development Direction - The company has focused on refinancing inefficient legacy funding vehicles and repaying high-cost term loan borrowings to improve earnings and balance sheet flexibility [7][12] - The strategy includes a measured approach to loan origination, with a focus on building liquidity in light of uncertain market conditions [9][25] - The company plans to remain opportunistic in rationalizing funding and capitalization to position itself for future growth as markets stabilize [15] Management's Comments on Operating Environment and Future Outlook - Management expressed that the current macroeconomic landscape is uncertain, leading to a reduction in loan origination activities and an increase in reserves for credit losses [10][31] - The company anticipates that the balance of its portfolio may modestly decline over the remainder of the year due to a measured approach to capital deployment [11] - Management believes that markets may stabilize in the coming months, which could provide clarity on macroeconomic trends and the Fed's monetary policy [9] Other Important Information - The company repurchased over 1.5 million common shares totaling over $15 million during Q2, benefiting its book value by about $0.17 per share [14] - The CECL reserve increased to about $50 million or 118 basis points of total portfolio commitments, driven by conservative macroeconomic forecasts [31] Q&A Session Summary Question: Expectations on loan origination volume and share repurchase - Management indicated that while they cannot comment specifically on buybacks, they will consider the discount to book valuation when assessing liquidity uses [36] Question: Update on initiatives to drive ROE higher - Management confirmed that significant progress has been made, including repayment of the term loan and refinancing legacy funding vehicles, but further progress depends on resolving non-accrual assets [37][38] Question: Details on the San Diego office loan situation - Management noted that the office property is well-located and recently renovated, but has been impacted by a slow leasing market, and they are in constructive discussions with the borrower [41][45] Question: Clarification on refinancing legacy financing vehicles - Management confirmed that they refinanced two legacy facilities earlier in the quarter and are looking to potentially refinance another legacy facility [48][49] Question: Considerations for liquidity and future drawdowns - Management stated that liquidity uses will depend on market conditions and the resolution of loans, with expectations for drawdowns to trend lower over the next several quarters [58][60]