Granite Point Mortgage Trust Inc. (NYSE: GPMT) today
announced its financial results for the quarter and full year ended
December 31, 2019, and provided an update on its activities
subsequent to quarter-end. A presentation containing fourth quarter
2019 highlights and activity post quarter-end can be viewed at
www.gpmtreit.com.
Fourth Quarter 2019 Highlights
- Generated GAAP net income of $17.7 million, or $0.32 per basic
share, and Core Earnings(1) of $18.7 million, or $0.34 per basic
share.
- Closed 11 new loan commitments of $670.9 million, with an
average loan size of $61.0 million, initial fundings of $516.3
million, a weighted average stabilized LTV of 67%(2), and a
weighted average yield of LIBOR + 3.49%(3).
- Funded an additional $86.3 million on existing loan commitments
and received prepayments and principal amortization of $302.8
million.
- Current portfolio principal balance of $4.3 billion that is
over 98% floating rate and comprised of over 98% senior loans with
a weighted average stabilized LTV of 64%(2).
- Declared and paid a dividend of $0.42 per common share. Book
value was $18.58 per common share as of December 31, 2019.
2019 Highlights
- Generated GAAP net income of $70.1 million; Core Earnings(1) of
$74.6 million, an increase of $8.3 million, or 13% as compared to
2018.
- Committed a total of $2.0 billion to 45 new loan investments,
an increase of 27% over 2018 originations volume. Funded over $1.8
billion in total loan balances including $237.6 million for prior
commitments.
- Grew our portfolio's total commitments to over $5.0 billion, an
increase of approximately $1.2 billion, or 31%, from 2018.
Outstanding principal balance increased to $4.3 billion, or 33%,
from 2018.
- Improved the profile of our liabilities by increasing our
non-mark-to-market financing through the issuance of our second CRE
CLO, and by establishing a new financing facility with favorable
structure and terms. Additionally, realized lower financing costs
on the overall portfolio.
- Extended the maturities, modified financial covenants,
increased the overall borrowing capacity and renegotiated various
other terms of our financing facilities.
- Increased our equity capital base by 23% from 2018, growing the
company's scale and market presence by raising over $207 million in
total net proceeds through various capital markets activities.
Activity Post Quarter-End
- Generated a pipeline of senior CRE loans, with total
commitments of $200 million and initial fundings of $125 million,
which have either closed or are in the closing process, subject to
fallout.
- Funded $120 million of loan balances, including prior
commitments, and received $46.7 million of prepayments so far in Q1
2020.
- Extended the maturity of the Citi financing facility to 2023
and increased its borrowing capacity to $500 million.
Jack Taylor, Granite Point’s President and Chief Executive
Officer, stated: “Granite Point had a great 2019 highlighted by
$2.0 billion in originations volume, continued growth of our
business and further expansion of our platform’s brand recognition
in the market. The record fourth quarter originations of over $670
million and fundings of over $600 million significantly contributed
to our over 30% year-over-year portfolio growth. We also expanded
our financing capacity, realized lower financing costs and further
improved the profile of our liabilities by issuing our second CRE
CLO, which provided us with additional matched-term, non-recourse
and non-mark-to-market funding at attractive terms. We continue to
emphasize strong loan underwriting and structuring discipline, and
protecting our stockholders’ capital, and have not realized any
loan credit losses since inception of our business. We are excited
about the future of our business, we are confident that the
franchise value our team has built will accrue to the benefit of
our stockholders over time.”
Process to Internalize Management Function Granite Point
today also announced it has agreed to a process with its external
manager, Pine River Capital Management L.P. (“Pine River”), to
internalize the Company’s management function.
A committee of Granite Point’s Board of Directors comprising its
independent members (the “Independent Committee”) has been
negotiating the internalization on behalf of the Company, and has
retained independent advisors. In connection with the completion of
the internalization, the Company expects to continue to be managed
by its strong senior management team along with other personnel
providing services to Granite Point, who are currently employed by
Pine River, and to whom the Independent Committee expects to extend
offers of employment.
Details are expected to be announced once finalized in several
months, and a final agreement and definitive documentation are
expected to be delivered and executed at that time. Until that
time, the Company does not undertake any obligation to provide
updates with respect to this process. There can be no assurance
that the internalization will be consummated.
(1) Core Earnings is a non-U.S. GAAP measure that we define as
comprehensive income attributable to common stockholders, excluding
“realized and unrealized gains and losses” (impairment losses,
realized and unrealized gains or losses on the aggregate portfolio
and non-cash compensation expense related to restricted common
stock). We believe the presentation of Core Earnings provides
investors greater transparency into our period-over-period
financial performance and facilitates comparisons to peer REITs.
Please see page 7 for a reconciliation of GAAP to non-GAAP
financial information.
(2) Stabilized loan-to-value ratio (LTV) is calculated as the
fully funded loan amount (plus any financing that is pari passu
with or senior to such loan), including all contractually provided
for future fundings, divided by the as stabilized value (as
determined in conformance with USPAP) set forth in the original
appraisal. As stabilized value may be based on certain assumptions,
such as future construction completion, projected re-tenanting,
payment of tenant improvement or leasing commissions allowances or
free or abated rent periods, or increased tenant occupancies.
(3) Yield includes net origination fees and exit fees, but does
not include future fundings, and is expressed as a monthly
equivalent yield.
Conference Call Granite Point Mortgage Trust Inc. will
host a conference call on March 3, 2020 at 10:00 a.m. ET to discuss
fourth quarter and full year 2019 financial results and related
information. To participate in the teleconference, approximately 10
minutes prior to the above start time, please call toll-free (833)
255-2835 (or (412) 902-6769 for international callers), and ask to
be joined into the Granite Point Mortgage Trust Inc. call. You may
also listen to the teleconference live via the Internet at
www.gpmtreit.com, in the Investor
Relations section under the Events & Presentations link. For
those unable to attend, a telephone playback will be available
beginning March 3, 2020 at 12:00 p.m. ET through April 3, 2020 at
12:00 a.m. ET. The playback can be accessed by calling (877)
344-7529 (or (412) 317-0088 for international callers) and
providing the Access Code 10138035. The call will also be archived
on the company’s website in the Investor Relations section under
the Events & Presentations link.
Granite Point Mortgage Trust Granite Point Mortgage Trust
Inc., a Maryland corporation, is a real estate investment trust
that is focused on directly originating, investing in and managing
senior floating rate commercial mortgage loans and other debt and
debt-like commercial real estate investments. Granite Point is
headquartered in New York, NY, and is externally managed by Pine
River Capital Management L.P. Additional information is available
at www.gpmtreit.com.
Forward-Looking Statements This release contains, in
addition to historical information, certain forward-looking
statements that are based on our current assumptions, expectations
and projections about future performance and events. In particular,
statements regarding future economic performance, finances, and
expectations and objectives of management constitute
forward-looking statements. Forward-looking statements are not
historical in nature and can be identified by words such as
“believes,” “expects,” “may,” “will,” “should,” “seeks,”
“approximately,” “intends,” “plans,” “estimates,” “anticipates,”
“targets,” “goals,” “future,” “outlook,” “potential,” “continues,”
“likely” and other expressions that are predictions of or indicate
future events and trends and that do not relate to historical
matters.
Although the forward-looking statements contained in this press
release are based upon information available at the time the
statements are made and reflect the best judgment of our senior
management, forward-looking statements inherently involve known and
unknown risks, uncertainties and other factors, which may cause the
actual results, performance or achievements to differ materially
from anticipated future results. Important factors that could cause
actual results to differ materially from expected results,
including, among other things, those described in our filings with
the Securities and Exchange Commission (“SEC”), including our
annual report on Form 10-K for the year ended December 31, 2019,
and any subsequent Quarterly Reports on Form 10-Q under the caption
“Risk Factors.” Factors that could cause actual results to differ
include, but are not limited to: the general political, economic
and competitive conditions in the markets in which we invest;
defaults by borrowers in paying debt service on outstanding
indebtedness and borrowers’ abilities to manage and stabilize
properties; our ability to obtain financing arrangements on terms
favorable to us or at all; the level and volatility of prevailing
interest rates and credit spreads; reductions in the yield on our
investments and an increase in the cost of our financing; general
volatility of the securities markets in which we participate; the
return or impact of current or future investments; allocation of
investment opportunities to us by our Manager; increased
competition from entities investing in our target asset
investments; effects of hedging instruments on our target
investments; changes in governmental regulations, tax law and
rates, and similar matters; our ability to maintain our
qualification as a REIT for U.S. federal income tax purposes and
our exclusion from registration under the Investment Company Act;
availability of desirable investment opportunities; availability of
qualified personnel and our relationship with our Manager; the time
and cost of the process to internalize our management function;
estimates relating to our ability to make distributions to our
stockholders in the future; hurricanes, earthquakes and other
natural disasters, acts of war and/or terrorism, public health
crises and other events that may cause unanticipated and uninsured
performance declines and/or losses to us or the owners and
operators of the real estate securing our investments;
deterioration in the performance of the properties securing our
investments that may cause deterioration in the performance of our
investments and, potentially, principal losses to us; and
difficulty or delays in redeploying the proceeds from repayments of
our existing investments. These forward-looking statements apply
only as of the date of this press release. We are under no duty to
update any of these forward-looking statements after the date of
this press release to conform these statements to actual results or
revised expectations. You should, therefore, not rely on these
forward-looking statements as predictions of future events.
Non-GAAP Financial Measures In addition to disclosing
financial results calculated in accordance with United States
generally accepted accounting principles (GAAP), this press release
and the accompanying earnings presentation present non-GAAP
financial measures, such as Core Earnings and Core Earnings per
basic common share, that exclude certain items. Granite Point
management believes that these non-GAAP measures enable it to
perform meaningful comparisons of past, present and future results
of the company’s core business operations, and uses these measures
to gain a comparative understanding of the company’s operating
performance and business trends. The non-GAAP financial measures
presented by the company represent supplemental information to
assist investors in analyzing the results of its operations.
However, because these measures are not calculated in accordance
with GAAP, they should not be considered a substitute for, or
superior to, the financial measures calculated in accordance with
GAAP. The company’s GAAP financial results and the reconciliations
from these results should be carefully evaluated. See the GAAP to
non-GAAP reconciliation table on page 7 of this release.
Additional Information Stockholders of Granite Point and
other interested persons may find additional information regarding
the company at the Securities and Exchange Commission’s Internet
site at www.sec.gov or by directing
requests to: Granite Point Mortgage Trust Inc., 3 Bryant Park, 24th
floor, New York, NY 10036, telephone (212) 364-5500.
GRANITE POINT MORTGAGE TRUST
INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
December 31, 2019
December 31, 2018
ASSETS
Loans held-for-investment
$
4,226,212
$
3,167,913
Available-for-sale securities, at fair
value
12,830
12,606
Held-to-maturity securities
18,076
26,696
Cash and cash equivalents
80,281
91,700
Restricted cash
79,483
31,723
Accrued interest receivable
11,323
10,268
Deferred debt issuance costs
6,245
3,924
Prepaid expenses
883
1,055
Other assets
25,529
15,996
Total Assets
$
4,460,862
$
3,361,881
LIABILITIES AND STOCKHOLDERS’
EQUITY
Liabilities
Repurchase agreements
$
1,924,021
$
1,500,543
Securitized debt obligations
1,041,044
654,263
Asset-specific financings
116,465
—
Revolving credit facilities
42,008
75,000
Convertible senior notes
269,634
268,138
Accrued interest payable
7,285
6,394
Unearned interest income
228
510
Dividends payable
23,063
18,346
Other liabilities
16,978
10,156
Total Liabilities
3,440,726
2,533,350
10% cumulative redeemable preferred stock,
par value $0.01 per share; 50,000,000 shares authorized and 1,000
and 1,000 shares issued and outstanding, respectively
1,000
1,000
Stockholders’ Equity
Common stock, par value $0.01 per share;
450,000,000 shares authorized and 54,853,205 and 43,621,174 shares
issued and outstanding, respectively
549
436
Additional paid-in capital
1,048,484
836,288
Accumulated other comprehensive income
(loss)
32
(192
)
Cumulative earnings
162,076
91,875
Cumulative distributions to
stockholders
(192,005
)
(100,876
)
Total Stockholders’ Equity
1,019,136
827,531
Total Liabilities and Stockholders’
Equity
$
4,460,862
$
3,361,881
GRANITE POINT MORTGAGE TRUST
INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(in thousands, except share
data)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Interest income:
Loans held-for-investment
$
63,428
$
51,708
$
240,022
$
179,284
Available-for-sale securities
294
309
1,221
1,160
Held-to-maturity securities
435
716
2,239
3,194
Cash and cash equivalents
547
101
2,775
242
Total interest income
64,704
52,834
246,257
183,880
Interest expense:
Repurchase agreements
19,163
17,000
67,632
62,432
Securitized debt obligations
10,935
7,092
46,815
17,660
Convertible senior notes
4,512
4,182
17,971
10,783
Asset-specific financings
1,174
—
2,891
—
Revolving credit facilities
491
276
1,673
648
Total interest expense
36,275
28,550
136,982
91,523
Net interest income
28,429
24,284
109,275
92,357
Other income:
Fee income
95
—
1,210
1,446
Total other income
95
—
1,210
1,446
Expenses:
Management fees
3,841
3,075
14,854
12,509
Incentive fees
—
—
244
—
Servicing expenses
999
628
3,670
2,196
General and administrative expenses
6,008
3,884
21,507
16,025
Total expenses
10,848
7,587
40,275
30,730
Income before income taxes
17,676
16,697
70,210
63,073
(Benefit from) provision for income
taxes
—
—
(4
)
(2
)
Net income
17,676
16,697
70,214
63,075
Dividends on preferred stock
25
25
100
100
Net income attributable to common
stockholders
$
17,651
$
16,672
$
70,114
$
62,975
Basic earnings per weighted average common
share
$
0.32
$
0.38
$
1.32
$
1.45
Diluted earnings per weighted average
common share
$
0.32
$
0.37
$
1.32
$
1.42
Dividends declared per common share
$
0.42
$
0.42
$
1.68
$
1.62
Weighted average number of shares of
common stock outstanding:
Basic
54,853,205
43,502,583
53,087,395
43,445,384
Diluted
54,853,205
56,264,771
53,087,395
52,039,997
Comprehensive income:
Net income attributable to common
stockholders
$
17,651
$
16,672
$
70,114
$
62,975
Other comprehensive (loss) income, net
of tax:
Unrealized (loss) gain on
available-for-sale securities
—
(224
)
224
(192
)
Other comprehensive (loss) income
—
(224
)
224
(192
)
Comprehensive income attributable to
common stockholders
$
17,651
$
16,448
$
70,338
$
62,783
GRANITE POINT MORTGAGE TRUST
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
(dollars in thousands, except
share data)
Three Months Ended December
31, 2019
Year Ended December 31,
2019
(unaudited)
(unaudited)
Reconciliation of GAAP net income to Core
Earnings:
GAAP Net Income
$
17,651
$
70,114
Adjustments for non-core earnings:
Non-cash equity compensation
1,087
4,436
Core Earnings(1)
$
18,738
$
74,550
Core Earnings per basic common share
$
0.34
$
1.40
Basic weighted average shares
outstanding
54,853,205
53,087,395
(1) Core Earnings is a non-U.S. GAAP measure that we define as
comprehensive income attributable to common stockholders, excluding
“realized and unrealized gains and losses” (impairment losses,
realized and unrealized gains or losses on the aggregate portfolio
and non-cash compensation expense related to restricted common
stock). We believe the presentation of Core Earnings provides
investors greater transparency into our period-over-period
financial performance and facilitates comparisons to peer
REITs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200302006004/en/
Investors: Marcin Urbaszek, Chief Financial Officer, Granite
Point Mortgage Trust Inc., (212) 364-5500,
investors@gpmortgagetrust.com
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