Granite Point Mortgage Trust(US:GPMT)2025-08-05 20:45markdown [Company Overview](index=1&type=section&id=Company%20Overview) [About the Company](index=2&type=section&id=About%20Granite%20Point%20Mortgage%20Trust%20Inc.) Granite Point Mortgage Trust Inc. is a Maryland corporation specializing in originating, investing in, and managing senior floating rate commercial mortgage loans and other debt-like commercial real estate investments - Granite Point Mortgage Trust Inc. focuses on directly originating, investing in, and managing senior floating rate commercial mortgage loans and other debt and debt-like commercial real estate investments[8](index=8&type=chunk) [CEO Statement](index=1&type=section&id=CEO%20Statement) The CEO highlighted continued progress in resolving nonperforming loans and reducing higher-cost debt, with five risk-rated 5 loans resolved year-to-date. The company also repurchased common shares, believing them to be undervalued, and looks forward to returning to core loan origination - Continued progress in resolving nonperforming loans and reducing higher-cost debt[3](index=3&type=chunk) - Five risk-rated 5 loans resolved year-to-date, including one after quarter-end, leaving two remaining[3](index=3&type=chunk) - Repurchased **1.25 million** common shares during the quarter, citing significant undervaluation[3](index=3&type=chunk) [Second Quarter 2025 Financial & Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Activity) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics%20Q2%202025) For Q2 2025, the company reported a GAAP net loss attributable to common stockholders of $(17.0) million, or $(0.35) per basic common share, inclusive of a $(11.0) million provision for credit losses. Book value per common share was $7.99, and a common stock dividend of $0.05 per share was declared Q2 2025 Key Financial Metrics | Metric | Value | | :------------------------------------------------ | :------------------- | | GAAP Net (Loss) Attributable to Common Stockholders | $(17.0) million | | Basic Common Share GAAP Net (Loss) | $(0.35) | | Provision for Credit Losses (GAAP) | $(11.0) million | | Provision for Credit Losses per Basic Common Share | $(0.23) | | Distributable Earnings (Loss) | $(45.3) million | | Distributable Earnings (Loss) per Basic Common Share | $(0.94) | | Distributable Earnings (Loss) Before Realized Gains and Losses | $(2.0) million | | Distributable Earnings (Loss) Before Realized Gains and Losses per Basic Common Share | $(0.04) | | Book Value per Common Share | $7.99 | | Common Stock Dividend Declared per Share | $0.05 | | Series A Preferred Stock Dividend Declared per Share | $0.4375 | [Loan Portfolio Activity](index=1&type=section&id=Loan%20Portfolio%20Activity%20Q2%202025) The company experienced net loan portfolio activity of $(115.1) million in unpaid principal balance, driven by significant loan repayments and resolutions, partially offset by new fundings. The portfolio remains predominantly floating rate and senior loans with a weighted average risk-rating of 2.8 Q2 2025 Loan Portfolio Activity | Activity | Amount (Millions) | | :----------------------------------- | :------------------ | | Net Loan Portfolio Activity (UPB) | $(115.1) | | Full Loan Repayments | $(32.1) | | Partial Repayments | $(2.4) | | Loan Resolutions (inclusive of write-offs) | $(94.1) | | Write-offs (part of resolutions) | $(36.1) | | Fundings | $13.5 | - Carried a **98%** floating rate loan portfolio with **$1.9 billion** in total loan commitments, over **99%** senior loans[6](index=6&type=chunk) - Portfolio weighted average stabilized LTV at origination was **64.7%** and realized loan portfolio yield was **7.1%**[6](index=6&type=chunk) - Total CECL reserve of **$155.1 million**, or **8.1%** of total loan portfolio commitments, with a weighted average loan portfolio risk-rating of **2.8**[6](index=6&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights%20Q2%202025) During Q2 2025, Granite Point sold an REO property for a net sales price of $16.7 million, resulting in a gain of $0.3 million. The company also repurchased 1.25 million common shares, leading to book value accretion of $0.15 per share, and ended the quarter with $85.1 million in unrestricted cash - Sold an REO property located in Phoenix, AZ, for a net sales price of **$16.7 million**, resulting in a gain on sale of **$0.3 million** (**$0.01** per basic share)[6](index=6&type=chunk) - Repurchased **1.25 million** common shares at an average price of **$2.48** per share for a total of **$3.1 million**, resulting in book value accretion of **$0.15** per share[6](index=6&type=chunk) - Ended the quarter with **$85.1 million** in unrestricted cash and a Total Leverage Ratio of **2.1x**, with no corporate debt maturities remaining[6](index=6&type=chunk) [Post Quarter-End Update](index=1&type=section&id=Post%20Quarter-End%20Update) [Subsequent Activities](index=1&type=section&id=Subsequent%20Activities) Subsequent to quarter-end, the company resolved a nonaccrual loan secured by a student housing property, expecting a write-off of approximately $(19.3) million, largely covered by existing reserves. They also funded additional loan commitments and extended their secured credit facility to December 2026 with improved terms - In July, resolved a loan secured by a student housing property located in Louisville, KY, which was on nonaccrual status with an unpaid principal balance of $50.0 million and risk rating of '5'[6](index=6&type=chunk) - Expects to recognize a write-off of approximately **$(19.3) million** from the property sale, which had been reserved for through a previously recorded **$(22.6) million** allowance for credit losses, and expects a GAAP benefit from provision for credit losses of approximately **$3.3 million**[6](index=6&type=chunk) - So far in Q3'25, funded about **$5.4 million** on existing loan commitments and extended the maturity of the secured credit facility to December 2026, reducing the financing spread by **75 basis points** and borrowings by **$7.5 million**[6](index=6&type=chunk) - As of August 4, 2025, carried approximately **$73.3 million** in unrestricted cash[6](index=6&type=chunk) [Condensed and Consolidated Financial Statements](index=4&type=section&id=Condensed%20and%20Consolidated%20Financial%20Statements) [Balance Sheets](index=4&type=section&id=CONDENSED%20AND%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet shows a decrease in total assets from $2,115.1 million at December 31, 2024, to $1,918.1 million at June 30, 2025, primarily due to a reduction in net loans held-for-investment and a decrease in the allowance for credit losses. Total liabilities also decreased, while total equity saw a modest decline Condensed and Consolidated Balance Sheets (Selected Items) | Metric | June 30, 2025 (unaudited) (Thousands) | December 31, 2024 (Thousands) | | :----------------------------------- | :-------------------------- | :------------------ | | **ASSETS** | | | | Loans held-for-investment, net | $1,671,311 | $1,897,648 | | Allowance for credit losses | $(151,968) | $(199,727) | | Cash and cash equivalents | $85,102 | $87,788 | | Real estate owned, net | $98,704 | $42,815 | | Total Assets | $1,918,085 | $2,115,115 | | **LIABILITIES** | | | | Repurchase facilities | $474,400 | $597,874 | | Securitized debt obligations | $743,544 | $788,313 | | Total Liabilities | $1,333,756 | $1,495,898 | | **STOCKHOLDERS' EQUITY** | | | | Total Granite Point Mortgage Trust Inc. Stockholders' Equity | $584,204 | $619,092 | | Total Equity | $584,329 | $619,217 | [Statements of Comprehensive (Loss) Income](index=5&type=section&id=CONDENSED%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20(LOSS)%20INCOME) For the three months ended June 30, 2025, the company reported a net interest income of $8.0 million, a slight decrease from $8.1 million in the prior year period. Net loss attributable to common stockholders significantly improved to $(17.0) million from $(66.7) million year-over-year, primarily due to a much lower provision for credit losses Condensed and Consolidated Statements of Comprehensive (Loss) Income (Selected Items) | Metric | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | Six Months Ended June 30, 2025 (Thousands) | Six Months Ended June 30, 2024 (Thousands) | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total interest income | $33,803 | $48,479 | $68,947 | $102,534 | | Total interest expense | $25,758 | $40,348 | $52,862 | $81,880 | | Net interest income | $8,045 | $8,131 | $16,085 | $20,654 | | Provision for credit losses | $(10,984) | $(60,756) | $(14,754) | $(136,308) | | Total expenses | $14,479 | $10,769 | $28,788 | $23,006 | | Net (loss) income attributable to common stockholders | $(16,964) | $(66,668) | $(27,579) | $(144,391) | | Basic (loss) earnings per weighted average common share | $(0.35) | $(1.31) | $(0.57) | $(2.84) | | Dividends declared per common share | $0.05 | $0.05 | $0.10 | $0.20 | - Net (loss) income attributable to common stockholders improved significantly from **$(66,668) thousand** in Q2 2024 to **$(16,964) thousand** in Q2 2025[17](index=17&type=chunk) - Basic (loss) earnings per weighted average common share improved from **$(1.31)** in Q2 2024 to **$(0.35)** in Q2 2025[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Distributable Earnings (Loss) Reconciliation](index=6&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) The company provides a reconciliation from GAAP net (loss) income to Distributable Earnings (Loss) and Distributable Earnings (Loss) Before Realized Gains and Losses, which are non-GAAP measures used to evaluate core business operations and dividend-paying capacity. For Q2 2025, Distributable Earnings (Loss) was $(45.3) million, or $(0.94) per basic common share Q2 2025 GAAP to Non-GAAP Reconciliation (Selected Items) | Metric | Three Months Ended June 30, 2025 (Thousands) | | :------------------------------------------------ | :------------------------------- | | GAAP net (loss) income attributable to common stockholders | $(16,964) | | Adjustments (e.g., Provision for credit losses, non-cash equity comp, depreciation) | $10,984 (PCL) + $2,228 (Non-cash equity comp) + $2,089 (Depreciation) | | Distributable Earnings (Loss) Before Realized Gains and Losses | $(1,964) | | Write-offs | $(36,074) | | Distributable Earnings (Loss) | $(45,306) | | Distributable Earnings (Loss) Before Realized Gains and Losses per basic common share | $(0.04) | | Distributable Earnings (Loss) per basic common share | $(0.94) | [Definition and Purpose of Non-GAAP Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20Definition) Distributable Earnings (Loss) is a non-GAAP measure intended to serve as a proxy for taxable income, crucial for REIT status and assessing dividend capacity. It excludes non-cash items like equity compensation, depreciation, unrealized gains/losses, and certain one-time expenses, aiming to reflect the company's economic experience related to loan realization - Distributable Earnings (Loss) is a non-GAAP measure presented as a supplemental method for evaluating operating performance and serves as a general proxy for taxable income, important for REIT status and dividend payments[12](index=12&type=chunk)[18](index=18&type=chunk) - It excludes non-cash equity compensation, depreciation and amortization, unrealized gains/losses, and certain non-cash and one-time expenses from GAAP net income[19](index=19&type=chunk) - Realized credit losses are recognized in Distributable Earnings (Loss) when amounts are deemed non-recoverable, typically at loan repayment or asset sale, reflecting the economic experience of loan realization[20](index=20&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) [Conference Call Details](index=2&type=section&id=Conference%20Call) Granite Point Mortgage Trust Inc. will host a conference call on August 6, 2025, at 11:00 a.m. ET to discuss second quarter 2025 financial results, with teleconference and webcast options available for participation and playback - Conference call to discuss Q2 2025 financial results scheduled for August 6, 2025, at 11:00 a.m. ET[7](index=7&type=chunk) - Participation available via toll-free call (877) 407-8031 or live webcast at www.gpmtreit.com[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements that involve numerous risks and uncertainties, meaning actual results may differ materially from expectations. The company explicitly states it undertakes no obligation to update or revise these statements - The press release contains forward-looking statements, which are not historical facts and involve numerous risks and uncertainties[9](index=9&type=chunk) - Actual results may differ materially from beliefs, expectations, estimates, projections, and illustrations[9](index=9&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements[10](index=10&type=chunk) [Investor Information](index=2&type=section&id=Additional%20Information%20(Investor)) Stockholders and other interested persons can find additional information regarding the company at the SEC's website or by directing requests to Granite Point Mortgage Trust Inc. directly - Additional information is available at the SEC's Internet site (www.sec.gov) or by contacting Granite Point Mortgage Trust Inc. at (212) 364-5500[13](index=13&type=chunk)[14](index=14&type=chunk)