Granite Point Mortgage Trust Inc. (NYSE:GPMT) Q4 2020 Earnings Conference Call March 5, 2021 10:00 AM ET Company Participants Chris Petta - IRO John Taylor - President and CEO Stephen Alpart - VP, Chief Investment Officer and Co-Head of Originations Marcin Urbaszek - CFO and Head of IR Steven Plust - VP and COO Conference Call Participants Doug Harter - Credit Suisse Jade Rahmani - Keefe, Bruyette, & Woods, Inc. Charlie Arestia - JPMorgan Chase & Co. Stephen Laws - Raymond James Arren Cyganovich - Citi Grou ...

Fourth Quarter 2020 Earnings Presentation March 5, 2021 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 actual results may differ from our beliefs, expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements ...

Granite Point Mortgage Trust Inc. (NYSE:GPMT) Q3 2020 Earnings Conference Call November 10, 2020 10:00 AM ET Company Participants Chris Petta - Investor Relations Officer John Taylor - President and Chief Executive Officer Stephen Alpart - Vice President, Chief Information Officer and Co-Head of Originations Marcin Urbaszek - Vice President, Chief Financial Officer and Head of Investor Relations Steven Plust - Vice President and Chief Operating Officer Conference Call Participants Douglas Harter - Credit Su ...

G ＲＡＮＩＴＥ ＰＯＩＮＴ MORTGAGE TRUST A Pine River Capital Managed Company Third Quarter 2020 Earnings Presentation November 10, 2020 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 actual results may differ from our beliefs, expectations, estimates and projections and, ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) The unaudited Q3 2020 financial statements show a net loss and reduced equity, driven by CECL, loan losses, and a restructuring charge [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in millions/billions) | Account | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Loans held-for-investment, net | $3.979 billion | $4.226 billion | | Cash and cash equivalents | $353.7 million | $80.3 million | | **Total Assets** | **$4.403 billion** | **$4.461 billion** | | **Liabilities** | | | | Repurchase agreements | $1.851 billion | $1.924 billion | | Securitized debt obligations | $928.6 million | $1.041 billion | | Senior secured term loan facilities | $205.6 million | $— | | **Total Liabilities** | **$3.467 billion** | **$3.441 billion** | | **Total Stockholders' Equity** | **$934.5 million** | **$1.019 billion** | - The balance sheet reflects the adoption of the CECL accounting standard, with a new 'Allowance for credit losses' of **$73.3 million** reducing the net value of loans held-for-investment as of September 30, 2020[11](index=11&type=chunk) - The company entered into new senior secured term loan facilities during the period, with an outstanding balance of **$205.6 million** at quarter-end[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) Statement of Comprehensive (Loss) Income Highlights (in millions, except per share data) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $33.8 million | $27.1 million | $97.4 million | $80.8 million | | Provision for credit losses | $5.3 million | $— | $(62.2) million | $— | | Realized losses on sales | $(10.0) million | $— | $(16.9) million | $— | | Restructuring charges | $43.7 million | $— | $43.7 million | $— | | **Net (loss) income** | **$(24.7) million** | **$17.4 million** | **$(63.6) million** | **$52.5 million** | | **Net (loss) income attributable to common stockholders** | **$(24.7) million** | **$17.4 million** | **$(63.7) million** | **$52.5 million** | | **Diluted (loss) earnings per share** | **$(0.45)** | **$0.32** | **$(1.15)** | **$1.00** | | Dividends declared per common share | $0.20 | $0.42 | $0.20 | $1.26 | - The company reported a net loss of **$24.7 million** for Q3 2020, a significant shift from a net income of **$17.4 million** in Q3 2019. This was primarily driven by a **$43.7 million** restructuring charge and a **$10.0 million** realized loss on sales, partially offset by a **$5.3 million** reversal of provision for credit losses[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Total Stockholders' Equity decreased from **$1.019 billion** at December 31, 2019, to **$934.5 million** at September 30, 2020[16](index=16&type=chunk) - The decrease in equity was driven by a cumulative effect of adopting a new accounting principle (CECL) of **$18.5 million**, a net loss of **$63.6 million** for the nine months, and common dividends declared of **$11.0 million** in Q3[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Nine Months Ended September 30 (in millions) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $36.0 million | $50.4 million | | Net cash provided by (used in) investing activities | $200.5 million | $(741.0) million | | Net cash (used in) provided by financing activities | $(37.3) million | $873.4 million | | **Net increase in cash, cash equivalents and restricted cash** | **$199.2 million** | **$182.7 million** | - For the nine months ended Sep 30, 2020, investing activities provided **$200.5 million** in cash, primarily due to proceeds from loan repayments (**$290.8 million**) and sales of loans (**$193.5 million**) exceeding new originations and fundings (**$314.7 million**)[19](index=19&type=chunk) - Financing activities used **$37.3 million** in cash, reflecting net repayments on repurchase agreements and revolving credit facilities, partially offset by **$205.6 million** in proceeds from new senior secured term loan facilities[19](index=19&type=chunk) [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) - The company will become an internally managed REIT effective December 31, 2020, terminating its external management agreement with Pine River Capital Management L.P[21](index=21&type=chunk)[31](index=31&type=chunk)[112](index=112&type=chunk) - On January 1, 2020, the company adopted the new CECL accounting standard (ASU 2016-13), resulting in a cumulative-effect adjustment to retained earnings of **$18.5 million**[33](index=33&type=chunk)[41](index=41&type=chunk) - On September 25, 2020, the company entered into a new five-year, **$300.0 million** senior secured term loan facility, drawing an initial **$225.0 million**. In conjunction, it issued warrants to purchase up to 6.07 million shares of common stock[99](index=99&type=chunk)[100](index=100&type=chunk) - A one-time restructuring charge of **$44.5 million** was recognized related to the cash payment to be made to the Manager for the internalization of the management function[112](index=112&type=chunk)[136](index=136&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses COVID-19 impacts, the management internalization, Q3 2020 net loss, liquidity, and loan portfolio credit quality [Key Financial Measures and Indicators](index=35&type=section&id=Key%20Financial%20Measures%20and%20Indicators) Key Metrics | Metric | Q3 2020 | Q2 2020 | | :--- | :--- | :--- | | GAAP Net Loss per Share | $(0.45) | $(0.03) | | Core Earnings per Share (Non-GAAP) | $0.27 | $0.25 | | Dividend Declared per Share | $0.20 | $— | | Book Value per Share | $16.93 | $17.47 | - Core Earnings, a non-GAAP measure, is used by management to evaluate performance. For Q3 2020, it was **$15.0 million**, adjusting the GAAP net loss of (**$24.7 million**) primarily for the **$43.7 million** restructuring charge and a **$5.3 million** reversal of credit loss provisions[173](index=173&type=chunk)[177](index=177&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) - Net interest income for Q3 2020 was **$33.8 million**, up from **$27.1 million** in Q3 2019. This was due to a significant decline in interest expense on borrowings (driven by lower short-term rates) that outpaced the decline in interest income[208](index=208&type=chunk)[214](index=214&type=chunk) - The company recorded a **$5.3 million** reversal of its provision for credit losses in Q3 2020, primarily due to changes in portfolio composition from loan sales and repayments. This contrasts with a cumulative provision of **$62.2 million** for the first nine months of 2020, reflecting the negative macroeconomic outlook from COVID-19[223](index=223&type=chunk) - Realized losses on loan sales were **$10.0 million** in Q3 2020 as the company strategically sold certain assets[224](index=224&type=chunk) [Portfolio Overview and Management](index=47&type=section&id=Portfolio%20Overview%20and%20Management) Loan Portfolio Summary as of Sep 30, 2020 | Metric | Value | | :--- | :--- | | Number of Investments | 110 | | Principal Balance | $4.07 billion | | Carrying Value | $3.98 billion | | Weighted Avg. Stabilized LTV | 63.6% | | % Senior Loans | 100% (by loan count) | | % Floating Rate | 98.4% (by carrying value) | - The company collected **99%** of contractual interest payments due in Q3 2020. Management has been actively working with borrowers impacted by COVID-19, modifying **12 loans** with a principal balance of **$319.6 million** during the quarter[238](index=238&type=chunk)[239](index=239&type=chunk) - Loan modifications typically involve temporary interest deferrals, use of reserves for debt service, and covenant waivers, often coupled with additional equity support from sponsors[239](index=239&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2020, the company had **$353.7 million** in available cash and cash equivalents[257](index=257&type=chunk)[258](index=258&type=chunk) - The debt-to-equity ratio (net of cash) decreased to **3.2:1.0** at September 30, 2020, from **3.5:1.0** at June 30, 2020[246](index=246&type=chunk)[257](index=257&type=chunk) - The company amended its financing facilities to exclude the impact of general CECL reserves from the calculation of tangible net worth and leverage ratio covenants, and was in compliance with all covenants as of quarter-end[263](index=263&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces magnified credit, interest rate, and liquidity risks due to COVID-19, managed through portfolio structure and active borrower support - Credit risk has increased due to COVID-19, leading to loan modification requests from borrowers in hard-hit sectors like hotels and retail. The company is actively managing these situations to protect its portfolio[279](index=279&type=chunk)[280](index=280&type=chunk) Interest Rate Sensitivity Analysis (in millions) | Change in Interest Rates | Change in Annualized Net Interest Income | | :--- | :--- | | +100 bps | $(23.3) million | | +50 bps | $(11.8) million | | -50 bps | $3.5 million | | -100 bps | $3.5 million | - The company is exposed to liquidity risk from its repurchase agreement financing, where lenders can make margin calls if collateral value declines. This risk is heightened by market volatility from the pandemic[294](index=294&type=chunk) - The company is monitoring the planned discontinuation of LIBOR after 2021, as the vast majority of its assets and liabilities are indexed to it. All agreements have fallback language for an alternative base rate[288](index=288&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2020, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[297](index=297&type=chunk) - No changes occurred in the internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[298](index=298&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) An arbitration with the external Manager concluded, setting a **$44.5 million** payment for management internalization, with no other material litigation pending - An arbitration with the company's Manager concluded on October 7, 2020, with an award setting the payable amount at **$44.5 million**, which relates to the internalization of management[301](index=301&type=chunk) [Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant new and heightened risks from the COVID-19 pandemic and the upcoming management internalization - The COVID-19 pandemic has caused severe disruptions and may continue to adversely impact the company's performance, borrower stability, collateral values, and liquidity[302](index=302&type=chunk) - Specific pandemic-related risks include potential defaults from borrowers, margin calls from lenders on repurchase agreements, and reduced availability of liquidity sources[303](index=303&type=chunk) - The company may not realize all the targeted benefits of the management internalization and faces risks in attracting and retaining key personnel post-transition[307](index=307&type=chunk)[308](index=308&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities were reported [Defaults Upon Senior Securities](index=62&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported [Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including key financing agreements and documents related to the management internalization - A list of exhibits filed with the report is provided, including key agreements related to financing and the management internalization[313](index=313&type=chunk)[315](index=315&type=chunk)

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, and cash flows, highlighting a $39.0 million net loss for the six months ended June 30, 2020, driven by credit loss provisions [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $4.42 billion as of June 30, 2020, a slight decrease from $4.46 billion, with total stockholders' equity decreasing to $964.3 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$4,415,648** | **$4,460,862** | | Loans held-for-investment, net | $4,290,047 | $4,226,212 | | Allowance for credit losses | ($76,710) | — | | Cash and cash equivalents | $55,969 | $80,281 | | **Total Liabilities** | **$3,450,312** | **$3,440,726** | | Repurchase agreements | $2,030,916 | $1,924,021 | | Securitized debt obligations | $983,521 | $1,041,044 | | **Total Stockholders' Equity** | **$964,336** | **$1,019,136** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a net loss of $1.8 million for Q2 2020 and $39.0 million for the six months ended June 30, 2020, primarily due to significant provisions for credit losses and realized losses on sales Income Statement Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $34,382 | $27,627 | $63,568 | $53,764 | | Provision for credit losses | ($14,205) | — | ($67,541) | — | | Realized losses on sales | ($6,894) | — | ($6,894) | — | | **Net (loss) income attributable to common stockholders** | **($1,758)** | **$18,152** | **($38,974)** | **$35,096** | | **Diluted (loss) earnings per share** | **($0.03)** | **$0.33** | **($0.71)** | **$0.68** | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased to $964.3 million at June 30, 2020, primarily due to a $18.5 million cumulative effect adjustment from adopting ASU 2016-13 and a $38.9 million net loss - Upon adopting ASU 2016-13 on January 1, 2020, the company recorded a cumulative-effect adjustment that reduced cumulative earnings by **$18.5 million**[14](index=14&type=chunk)[36](index=36&type=chunk) - The net loss for the first six months of 2020 further reduced cumulative earnings by **$38.9 million** (net of preferred dividends)[13](index=13&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $32.3 million for the six months ended June 30, 2020, while investing and financing activities resulted in a $100.3 million net decrease in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $32,305 | $28,662 | | Net cash used in investing activities | ($131,768) | ($379,631) | | Net cash (used in) provided by financing activities | ($835) | $396,533 | | **Net (decrease) increase in cash** | **($100,298)** | **$45,564** | | **Cash, cash equivalents and restricted cash at end of period** | **$59,466** | **$168,987** | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including the CECL standard adoption, a $1.5 billion loan portfolio downgrade due to COVID-19, financing arrangements, and the temporary suspension of common stock dividends - The company adopted the new credit loss standard (CECL) on January 1, 2020, recording an initial allowance for credit losses of **$18.5 million** as a cumulative-effect adjustment to equity[28](index=28&type=chunk)[36](index=36&type=chunk) - Due to the ongoing COVID-19 pandemic, the company downgraded **35 loans** with a total principal balance of **$1.5 billion** during Q2 2020, with the number of loans rated 'Higher Risk' increasing from 2 to **18**[55](index=55&type=chunk) - The company has agreed to a process with its Manager to internalize the management function, with a binding arbitration to determine any termination payment, and the hearing is expected in Q3 or Q4 2020[97](index=97&type=chunk)[98](index=98&type=chunk) - The company has temporarily suspended the payment of dividends on its common stock to conserve liquidity due to uncertainty from the COVID-19 pandemic[107](index=107&type=chunk) - Subsequent to quarter-end, on July 30, 2020, the company sold senior floating rate loans with a total unpaid principal balance of approximately **$190.9 million** for a sale price of **$181.4 million**[136](index=136&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of the COVID-19 pandemic, reporting a $39.0 million GAAP net loss for the first six months of 2020, primarily due to credit loss provisions, and outlines actions to strengthen liquidity - The COVID-19 pandemic has caused significant macroeconomic disruptions, adversely impacting the commercial real estate sector, reducing borrower demand, and lowering transaction volume[143](index=143&type=chunk)[149](index=149&type=chunk) - The GAAP net loss for the six months ended June 30, 2020 was largely a result of an increase in the provision for credit losses recognized under the new CECL standard, magnified by the economic dislocation from the pandemic[172](index=172&type=chunk) - The company is focused on strengthening its balance sheet and enhancing liquidity by raising capital, selling assets, and changing its dividend policy, which includes the temporary suspension of the common stock dividend[215](index=215&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Net interest income increased to $63.6 million for the six months ended June 30, 2020, but a $67.5 million provision for credit losses and increased operating expenses resulted in a $38.9 million pre-tax loss Key Operating Results (Six Months Ended June 30) | Metric (in millions) | 2020 | 2019 | | :--- | :--- | :--- | | Total Interest Income | $125.1 | $118.1 | | Total Interest Expense | $61.6 | $64.3 | | **Net Interest Income** | **$63.6** | **$53.8** | | Provision for credit losses | ($67.5) | — | | Realized losses on sales | ($6.9) | — | | Total expenses | $28.6 | $19.7 | | **(Loss) income before income taxes** | **($38.9)** | **$35.1** | - The decrease in yields on the investment portfolio was driven by a significant decline in short-term interest rates and repayments of higher-spread loans[185](index=185&type=chunk) - The increase in operating expenses was primarily from increased expenses related to personnel and infrastructure to support business growth[196](index=196&type=chunk) [Financial Condition](index=45&type=section&id=Financial%20Condition) As of June 30, 2020, the company's investment portfolio had a carrying value of $4.31 billion, primarily financed by $3.4 billion in debt, resulting in a 3.5:1.0 debt-to-equity ratio Portfolio Summary as of June 30, 2020 | Type | Principal Balance | Carrying Value | All-in Yield at Origination | | :--- | :--- | :--- | :--- | | Senior loans | $4,364.1M | $4,264.9M | L+4.19% | | Subordinated loans | $27.2M | $25.2M | L+9.84% | | CMBS | $24.5M | $23.3M | L+7.61% | | **Total/Wtd. Avg.** | **$4,415.8M** | **$4,313.4M** | **L+4.22%** | - As of June 30, 2020, the company had outstanding debt of **$2.0 billion** in repurchase agreements, **$983.5 million** in securitized debt obligations, and **$270.4 million** in convertible senior notes[206](index=206&type=chunk)[208](index=208&type=chunk) - The debt-to-equity ratio (total debt, net of cash, divided by equity) was **3.5 to 1.0** as of June 30, 2020[209](index=209&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company focuses on strengthening liquidity, holding $56.0 million in cash as of June 30, 2020, by suspending common stock dividends and actively managing financing facilities, while remaining compliant with all financial covenants - The company held **$56.0 million** in cash and cash equivalents as of June 30, 2020[219](index=219&type=chunk)[220](index=220&type=chunk) - The pace of loan repayments and prepayments, a key source of liquidity, is expected to slow meaningfully due to the economic impact of COVID-19[213](index=213&type=chunk) Financial Covenant Compliance as of June 30, 2020 | Covenant | Requirement | Actual | | :--- | :--- | :--- | | Unrestricted Cash | > $43.9M | $56.0M | | Tangible Net Worth | > $782.3M | $1.0B | | Total Leverage Ratio | < 80.0% | 78.2% | | Minimum Interest Coverage | > 1.5:1.0 | 2.3:1.0 | [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks, including credit, interest rate, capital markets, and liquidity, are heightened by COVID-19, with interest rate sensitivity showing a $24.6 million decrease in net interest income for a 100 bps rate increase - The company's primary risks include credit, interest rate, liquidity, and capital markets risk, all heightened by the COVID-19 pandemic[235](index=235&type=chunk) - Approximately **98.5%** of the loan portfolio earns a floating rate of interest, which helps mitigate interest rate risk as most borrowings are also floating-rate[239](index=239&type=chunk) Interest Rate Sensitivity Analysis (in thousands) | Change in Interest Rates | Change in Value of Net Assets | Change in Annualized Net Interest Income | | :--- | :--- | :--- | | +100 bps | $5,785 | ($24,615) | | +50 bps | $2,951 | ($12,699) | | -50 bps | ($2,568) | $4,223 | | -100 bps | ($5,000) | $4,223 | - The company is monitoring the expected discontinuation of LIBOR after 2021 and is working with lenders and borrowers to manage the transition, as nearly all floating-rate instruments are indexed to LIBOR[245](index=245&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[253](index=253&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[254](index=254&type=chunk) [PART II - OTHER INFORMATION](index=57&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is engaged in confidential arbitration with its Manager regarding termination payment for management internalization, with the hearing expected in Q3 or Q4 2020 - The company and its Manager are in a confidential, binding arbitration to determine amounts payable for the termination of the management agreement in connection with the planned internalization of the management function[258](index=258&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) This section details heightened risks due to the COVID-19 pandemic, including negative impacts on collateral value, increased loan modification requests, margin call risks, reduced liquidity, and operational challenges - The ongoing COVID-19 pandemic is presented as a primary risk factor, causing severe disruptions to the global economy and the company's business, performance, and results of operations[261](index=261&type=chunk) - Specific pandemic-related risks include: - Negative impact on the value of collateral, particularly for hotel and retail assets - Increased borrower requests for loan modifications and potential for defaults - Risk of margin calls and defaults on repurchase agreements due to market volatility - Reduced liquidity and potential inability to meet funding obligations - Heightened cybersecurity risk due to extended remote working[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) [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 reports no unregistered sales of equity securities or use of proceeds during the period - None reported[266](index=266&type=chunk) [Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - None reported[267](index=267&type=chunk) [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports no mine safety disclosures as this item is not applicable - None reported[268](index=268&type=chunk) [Other Information](index=59&type=section&id=Item%205.%20Other%20Information) The company reports no other information for the period - None reported[269](index=269&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including amendments to financing agreements and CEO/CFO certifications - Lists filed exhibits, including amendments to master repurchase agreements and required CEO/CFO certifications[271](index=271&type=chunk)

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 March 31, 2020 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. Securities registered pursuant to Section 12(b) of the Act: | | Trading | | | --- | --- | --- | | ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) Granite Point Mortgage Trust Inc. is a REIT focused on originating and managing senior floating-rate commercial mortgage loans, with a **$4.3 billion** portfolio as of December 31, 2019 - The company primarily focuses on directly originating, investing in, and managing senior floating-rate commercial mortgage loans and other commercial real estate debt[15](index=15&type=chunk) - Granite Point is externally managed by Pine River Capital Management L.P. but has announced an agreement to begin the process of internalizing its management function[18](index=18&type=chunk)[21](index=21&type=chunk) Portfolio Summary as of December 31, 2019 | Metric | Value | | :--- | :--- | | Number of Investments | 122 | | Aggregate Principal Balance | $4.3 billion | | Potential Future Funding Obligations | $748.9 million | | Weighted Avg. Initial LTV | 66.6% | | Weighted Avg. Stabilized LTV | 64.2% | | Weighted Avg. All-in Yield | L+4.26% | - The company's financing strategy utilizes repurchase facilities, asset-specific financings, a revolving credit facility, and CLOs, with an expected leverage not to exceed a **3.5-to-1** debt-to-equity ratio[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) - The company operates to maintain its qualification as a REIT for U.S. federal income tax purposes and its exclusion from registration under the Investment Company Act[17](index=17&type=chunk)[50](index=50&type=chunk)[52](index=52&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from market conditions, interest rate fluctuations, financing dependencies, management internalization, and maintaining REIT and Investment Company Act exemptions - Difficult conditions in commercial real estate and financial markets, such as the COVID-19 outbreak, could adversely affect borrower operations and increase default risk[57](index=57&type=chunk) - The planned transition away from LIBOR after 2021 creates uncertainty for the company's **$4.2 billion** portfolio of floating-rate loans, potentially affecting financing costs and net investment income[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - The process to internalize the company's management function involves significant uncertainties, including potential delays, unexpected costs, and the need for lender consents, which could disrupt business operations[142](index=142&type=chunk) - Maintaining the company's exclusion from registration under the Investment Company Act imposes operational limits, restricting certain investments and potentially hindering profit maximization[159](index=159&type=chunk)[161](index=161&type=chunk) - Failure to maintain REIT qualification would result in being taxed as a regular corporation, leading to substantial tax liability and reduced cash for stockholder distribution[180](index=180&type=chunk) - The adoption of the new Current Expected Credit Loss (CECL) accounting standard is expected to materially increase the allowance for loan losses and could introduce more volatility in earnings[114](index=114&type=chunk)[115](index=115&type=chunk) [Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[238](index=238&type=chunk) [Properties](index=42&type=section&id=Item%202.%20Properties) The company does not own any real property, operating from a sub-leased office space in New York considered adequate for its operations - The company's principal executive office is located at 3 Bryant Park, Suite 2400A, New York, New York 10036 in a sub-leased space[239](index=239&type=chunk) - The company does not own any real property[239](index=239&type=chunk) [Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) As of the filing date, the company is not party to any litigation expected to materially adversely affect its financial condition or operations - The company is not currently party to any legal proceedings that would have a material adverse effect on its financial condition or results of operations[240](index=240&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[241](index=241&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock is listed on the NYSE under 'GPMT', with regular quarterly distributions and no repurchases in 2019 - The company's common stock is listed on the New York Stock Exchange (NYSE) under the symbol **"GPMT"**[243](index=243&type=chunk) Dividends Declared per Share (2018-2019) | Declaration Date | Cash Dividend Per Share ($)| | :--- | :--- | | December 18, 2019 | $0.42000 | | September 18, 2019 | $0.42000 | | June 20, 2019 | $0.42000 | | March 20, 2019 | $0.42000 | | December 19, 2018 | $0.42000 | | September 20, 2018 | $0.42000 | | June 20, 2018 | $0.40000 | | March 15, 2018 | $0.38000 | - As of December 31, 2019, there were **2,579,965** securities available for future issuance under the company's 2017 Equity Incentive Plan[249](index=249&type=chunk) - The company did not repurchase any of its common stock during the fiscal year ended December 31, 2019[254](index=254&type=chunk) [Selected Financial Data](index=47&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data for 2015-2019 shows significant growth in total interest income to **$246.3 million** and total assets to **$4.46 billion** in 2019 Selected Financial Data (2015-2019) | (in thousands, except per share data) | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Income Statement Data** | | | | | | | Total interest income ($) | $246,257 | $183,880 | $117,837 | $60,828 | $9,139 | | Net interest income ($) | $109,275 | $92,357 | $75,374 | $49,799 | $8,662 | | Net income attributable to common stockholders ($) | $70,114 | $62,975 | $53,255 | $35,357 | $138 | | Diluted earnings per share ($) | $1.32 | $1.42 | $0.60 | — | — | | Dividends declared per common share ($) | $1.68 | $1.62 | $0.70 | — | — | | **Balance Sheet Data (at year-end)** | | | | | | | Loans held-for-investment ($) | $4,226,212 | $3,167,913 | $2,304,266 | $1,364,291 | $582,693 | | Total assets ($) | $4,460,862 | $3,361,881 | $2,499,130 | $1,495,607 | $722,744 | | Total stockholders' equity ($) | $1,019,136 | $827,531 | $828,621 | $427,991 | $486,942 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, the company achieved **$70.1 million** net income, originated **$2.0 billion** in new loans, and strengthened its financial condition with a **3.3:1.0** debt-to-equity ratio - **2019 Operational Highlights:** - Originated **45** senior commercial real estate loans with a total commitment of **$2.0 billion** - Funded **$1.8 billion** in aggregate loan balances - Received **$778.5 million** from principal repayments - Closed a second CLO financing, increasing matched-term, non-recourse funding[267](index=267&type=chunk)[272](index=272&type=chunk) 2019 vs. 2018 Operating Results | (in millions) | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | GAAP Net Income | $70.1 | $63.0 | | Core Earnings (Non-GAAP) | $74.6 | $66.3 | | Dividends Declared | $91.0 | - | | Dividends per Share | $1.68 | $1.62 | - Upon adopting the new CECL accounting standard on January 1, 2020, the company expects to record an initial credit loss reserve of approximately **$18.5 million**, equivalent to about **0.37%** of its aggregate loan commitment balance[292](index=292&type=chunk) - The debt-to-equity ratio increased from **2.9:1.0** at year-end 2018 to **3.3:1.0** at year-end 2019, driven by increased financing on new loan originations[344](index=344&type=chunk) Contractual Obligations as of December 31, 2019 | (in thousands) | Total ($ thousands) | | :--- | :--- | | Repurchase agreements | $1,924,021 | | Asset-specific financings | $116,465 | | Revolving credit facilities | $42,008 | | Convertible senior notes | $269,634 | | Interest expense on borrowings | $178,754 | | Unfunded commitments on loans | $748,878 | | **Total** | **$3,285,083** | [Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks, including credit and liquidity, with **98.5%** of its portfolio in floating-rate assets, making net income positively correlated with rising interest rates - The company's portfolio is primarily composed of floating-rate assets, with approximately **98.5%** of its portfolio by carrying value earning a floating rate of interest as of December 31, 2019, generally resulting in higher net income during periods of rising interest rates[373](index=373&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2019) | (in thousands) | -100 bps | -50 bps | +50 bps | +100 bps | | :--- | :--- | :--- | :--- | :--- | | **Change in annualized net interest income ($ thousands)** | $19,013 | $7,198 | $5,252 | $10,503 | - As of December 31, 2019, none of the commercial real estate loans in the company's portfolio were non-performing[379](index=379&type=chunk) [Financial Statements and Supplementary Data](index=79&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2019, detailing the company's financial position, results of operations, and cash flows, reflecting significant portfolio growth Consolidated Balance Sheet Summary | (in thousands) | Dec 31, 2019 ($ thousands) | Dec 31, 2018 ($ thousands) | | :--- | :--- | :--- | | Loans held-for-investment | $4,226,212 | $3,167,913 | | **Total Assets** | **$4,460,862** | **$3,361,881** | | Total Liabilities | $3,440,726 | $2,533,350 | | **Total Stockholders' Equity** | **$1,019,136** | **$827,531** | Consolidated Statement of Comprehensive Income Summary | (in thousands) | 2019 ($ thousands) | 2018 ($ thousands) | 2017 ($ thousands) | | :--- | :--- | :--- | | Total interest income | $246,257 | $183,880 | $117,837 | | Net interest income | $109,275 | $92,357 | $75,374 | | **Net income attributable to common stockholders** | **$70,114** | **$62,975** | **$53,255** | - The company's loan portfolio is diversified by property type, with Office (**42.0%**), Multifamily (**25.1%**), and Hotel (**15.2%**) being the largest concentrations by carrying value as of December 31, 2019[476](index=476&type=chunk) - As of December 31, 2019, the company had unfunded commitments on commercial real estate loans held-for-investment of **$748.9 million**[534](index=534&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=120&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope - None[590](index=590&type=chunk) [Controls and Procedures](index=120&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2019, affirmed by an unqualified auditor opinion - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[591](index=591&type=chunk) - Management's assessment concluded that the company's internal control over financial reporting was effective as of December 31, 2019, based on the COSO framework[597](index=597&type=chunk) - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[601](index=601&type=chunk) [Other Information](index=123&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[609](index=609&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=124&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[611](index=611&type=chunk) [Executive Compensation](index=124&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[612](index=612&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=124&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[613](index=613&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=124&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2020 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[614](index=614&type=chunk) [Principal Accounting Fees and Services](index=124&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Ernst & Young LLP served as the independent auditor, with total fees of **$936,242** in 2019 for audit and tax services, all pre-approved by the Audit Committee Principal Accountant Fees (Ernst & Young LLP) | Fee Type | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Audit fees | $765,000 | $859,552 | | Tax fees | $171,242 | $197,476 | | **Total** | **$936,242** | **$1,057,028** | PART IV [Exhibits, Financial Statement Schedules](index=125&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report on Form 10-K, including consolidated financial statements and an index of exhibits - The filing includes consolidated financial statements and Schedule IV - Mortgage Loans on Real Estate[621](index=621&type=chunk) - A detailed index of exhibits, including governance documents, material contracts, and certifications, is provided[622](index=622&type=chunk)[625](index=625&type=chunk) [Form 10-K Summary](index=125&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[623](index=623&type=chunk)

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The financial statements for Q3 2019 reflect significant balance sheet growth, driven by increased loans and funded by borrowings, with net income rising but diluted EPS declining due to share issuances [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Account | September 30, 2019 | December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$4,307,612** | **$3,361,881** | **+28.1%** | | Loans held-for-investment | $3,927,095 | $3,167,913 | +24.0% | | Cash and cash equivalents | $137,355 | $91,700 | +49.8% | | **Total Liabilities** | **$3,283,372** | **$2,533,350** | **+29.6%** | | Repurchase agreements | $1,724,912 | $1,500,543 | +15.0% | | Securitized debt obligations | $1,124,820 | $654,263 | +71.9% | | **Total Stockholders' Equity** | **$1,023,240** | **$827,531** | **+23.6%** | - The company's consolidated balance sheets include assets of consolidated variable interest entities (VIEs) totaling **$1.47 billion** at September 30, 2019, which can only be used to settle obligations of these VIEs[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $63,444 | $47,560 | $181,553 | $131,046 | | Net Interest Income | $27,082 | $24,195 | $80,846 | $68,073 | | Net Income Attributable to Common Stockholders | $17,367 | $16,540 | $52,463 | $46,303 | | Diluted EPS | $0.32 | $0.37 | $1.00 | $1.04 | | Dividends Declared per Common Share | $0.42 | $0.42 | $1.26 | $1.20 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total stockholders' equity increased from **$827.5 million** at December 31, 2018, to **$1.023 billion** at September 30, 2019[16](index=16&type=chunk) - The increase in equity was primarily driven by the issuance of common stock, which provided net proceeds of approximately **$207.4 million** (**$157.2 million** in Q1 and **$50.2 million** in Q2), and net income of **$52.5 million**, partially offset by **$68.0 million** in common and preferred dividends declared during the nine-month period[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended September 30 (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $53,668 | $43,630 | | Net Cash used in Investing Activities | ($741,042) | ($383,147) | | Net Cash from Financing Activities | $870,115 | $382,347 | | **Net Increase in Cash** | **$182,741** | **$42,830** | - Investing activities primarily consisted of **$1.22 billion** in originations, acquisitions, and additional fundings of loans, offset by **$468.5 million** in loan repayments[17](index=17&type=chunk) - Financing activities were driven by net proceeds from repurchase agreements, issuance of securitized debt, and **$207.4 million** from the issuance of common stock, which more than funded investment activities and dividends[17](index=17&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the growing senior floating-rate commercial mortgage portfolio, diverse financing methods, and fees paid to the external manager Loan Portfolio by Property Type (Carrying Value) | Property Type | Sep 30, 2019 | % of Portfolio | Dec 31, 2018 | % of Portfolio | | :--- | :--- | :--- | :--- | :--- | | Office | $1,697,438 | 43.2% | $1,495,128 | 47.2% | | Multifamily | $962,810 | 24.5% | $569,259 | 18.0% | | Hotel | $588,639 | 15.0% | $427,611 | 13.5% | | Retail | $374,622 | 9.5% | $324,447 | 10.2% | | Industrial | $269,018 | 6.9% | $351,468 | 11.1% | | **Total** | **$3,927,095** | **100.0%** | **$3,167,913** | **100.0%** | - As of September 30, 2019, the company had unfunded commitments of **$667.0 million** on its loans held-for-investment[99](index=99&type=chunk) - For the nine months ended September 30, 2019, the company incurred **$11.0 million** in base management fees and **$0.2 million** in incentive fees payable to its external manager[126](index=126&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes performance to its strategy of originating senior floating-rate commercial mortgage loans, driving portfolio growth to **$4.0 billion** and increasing net interest income, with a debt-to-equity ratio of 3.0:1.0 - The company's primary target investments are directly originated floating-rate performing senior commercial mortgage loans, typically with terms of three to five years and sizes ranging from **$25 million** to **$150 million**[136](index=136&type=chunk) Portfolio Summary as of September 30, 2019 | Metric | Value | | :--- | :--- | | Total Loan Commitments | $4.66 billion | | Principal Balance | $3.99 billion | | Number of Loans | 116 | | Weighted Avg. All-in Yield | L+4.40% | | Weighted Avg. Initial LTV | 66.1% | | Weighted Avg. Stabilized LTV | 63.7% | - As of September 30, 2019, the debt-to-equity ratio (total debt, net of cash, divided by equity) was **3.0:1.0**, with the company expecting leverage not to exceed a **3.5-to-1** ratio[195](index=195&type=chunk)[201](index=201&type=chunk) - The company was in compliance with all financial covenants as of September 30, 2019, including minimum unrestricted cash, tangible net worth, leverage ratios, and interest coverage[207](index=207&type=chunk)[209](index=209&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include credit, interest rate, liquidity, and real estate, with a largely floating-rate portfolio benefiting from rising rates, and a 100 bps increase projected to boost annualized net interest income by **$9.2 million** - The company's portfolio is primarily composed of floating-rate assets (**98.4%** by carrying value), meaning rising interest rates generally increase net income, while declining rates decrease it[219](index=219&type=chunk) Interest Rate Sensitivity Analysis (in thousands) | Change in Interest Rates | Change in Annualized Net Interest Income | | :--- | :--- | | +100 bps | $9,163 | | +50 bps | $4,582 | | -50 bps | $184 | | -100 bps | $6,694 | - Key risks managed by the company include credit risk from borrower non-performance, liquidity risk associated with short-term financing of long-term assets, and capital markets risk related to the need to access debt and equity markets for financing[218](index=218&type=chunk)[226](index=226&type=chunk)[229](index=229&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[231](index=231&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter ended September 30, 2019[232](index=232&type=chunk) [PART II - OTHER INFORMATION](index=52&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently party to any litigation or legal proceedings that would materially adversely affect its financial condition or operations - As of the filing date, the company is not party to any material litigation or legal proceedings[235](index=235&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the company's 2018 Form 10-K[236](index=236&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[237](index=237&type=chunk)

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: June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38124 GRANITE POINT MORTGAGE TRUST INC. (Exact Name of Registrant as Specified in Its Charter) Maryland 61-1843143 (State or Other Jurisdiction of Incorporation or Organizat ...