Granite Point Mortgage Trust Inc. Reports First Quarter 2024 Financial Results and Post Quarter-End Update

Represents Net (Loss) Income Attributable to Common Stockholders.

Please see page 5 for Distributable Earnings and Distributable Earnings before realized losses definition and a reconciliation of GAAP to non-GAAP financial information.

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 occupancy.

Yield includes net origination fees and exit fees, but does not include future fundings, and is expressed as a monthly equivalent yield. Portfolio yield includes nonaccrual loans.

Borrowings outstanding on repurchase facilities, non-mtm repurchase facility, secured credit facility and CLO's, less cash, divided by total stockholders' equity.

GRANITE POINT MORTGAGE TRUST INC.

CONDENSED AND CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

March 31,
2024

December 31,
2023

ASSETS

(unaudited)

Loans held-for-investment

$

2,702,684

$

2,718,486

Allowance for credit losses

(210,145

)

(134,661

)

Loans held-for-investment, net

2,492,539

2,583,825

Cash and cash equivalents

155,216

188,370

Restricted cash

12,809

10,846

Real estate owned, net

16,365

16,939

Accrued interest receivable

11,366

12,380

Other assets

31,950

34,572

Total Assets

$

2,720,245

$

2,846,932

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Repurchase facilities

$

842,496

$

875,442

Securitized debt obligations

990,617

991,698

Secured credit facility

84,000

84,000

Dividends payable

11,643

14,136

Other liabilities

17,246

22,633

Total Liabilities

1,946,002

1,987,909

Stockholders' Equity

7.00% Series A cumulative redeemable preferred stock, par value $0.01 per share; 11,500,000 shares authorized, and 8,229,500 and 8,229,500 shares issued and outstanding, respectively; liquidation preference $25.00 per share

82

82

Common stock, par value $0.01 per share; 450,000,000 shares authorized, and 51,034,800 shares and 50,577,841 issued and outstanding, respectively

510

506

Additional paid-in capital

1,199,030

1,198,048

Cumulative earnings

(6,628

)

67,495

Cumulative distributions to stockholders

(418,876

)

(407,233

)

Total Granite Point Mortgage Trust Inc. Stockholders' Equity

774,118

858,898

Non-controlling interests

125

125

Total Equity

774,243

859,023

Total Liabilities and Stockholders' Equity

$

2,720,245

$

2,846,932

GRANITE POINT MORTGAGE TRUST INC.

CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands, except share data)

Three Months Ended

March 31,

2024

2023

Interest income:

(unaudited)

Loans held-for-investment

$

51,965

$

65,291

Cash and cash equivalents

2,090

1,428

Total interest income

54,055

66,719

Interest expense:

Repurchase facilities

20,728

19,772

Secured credit facility

2,689

2,929

Securitized debt obligations

18,115

18,051

Convertible senior notes

-

2,311

Asset-specific financings

-

743

Total interest expense

41,532

43,806

Net interest income

12,523

22,913

Other income (loss):

Revenue from real estate owned operations

1,142

-

Provision for credit losses

(75,552

)

(46,410

)

Gain (loss) on extinguishment

-

238

Total other loss

(74,410

)

(46,172

)

Expenses:

Compensation and benefits

5,987

5,912

Servicing expenses

1,376

1,378

Expenses from real estate owned operations

2,045

-

Other operating expenses

2,829

3,271

Total expenses

12,237

10,561

(Loss) income before income taxes

(74,124

)

(33,820

)

(Benefit from) provision for income taxes

(1

)

9

Net (loss) income

(74,123

)

(33,829

)

Dividends on preferred stock

3,600

3,625

Net (loss) income attributable to common stockholders

$

(77,723

)

$

(37,454

)

Basic (loss) earnings per weighted average common share

$

(1.53

)

$

(0.72

)

Diluted (loss) earnings per weighted average common share

$

(1.53

)

$

(0.72

)

Dividends declared per common share

$

0.15

$

0.20

Weighted average number of shares of common stock outstanding:

Basic

50,744,532

52,308,380

Diluted

50,744,532

52,308,380

Net (loss) income attributable to common stockholders

$

(77,723

)

$

(37,454

)

Comprehensive (loss) income

$

(77,723

)

$

(37,454

)

GRANITE POINT MORTGAGE TRUST INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(dollars in thousands, except share data)

Three Months Ended
March 31, 2024

(unaudited)

Reconciliation of GAAP Net (Loss) to Distributable Earnings⁽¹⁾:

GAAP Net (Loss)

$

(77,723

)

Adjustments for non-distributable earnings:

Provision for (benefit from) credit losses

75,552

Non-cash equity compensation

2,171

Depreciation and Amortization on Real Estate Owned

1,302

Distributable Earnings⁽¹⁾

$

1,302

Basic weighted average shares outstanding

50,744,532

Distributable Earnings⁽¹⁾ per basic common share

$

0.03

(1) Beginning with our Annual Report on Form 10-K for the year ended December 31, 2023, and for all subsequent reporting periods ending on or after December 31, 2023, we have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental method of evaluating our operating performance. Distributable Earnings replaces our prior presentation of Core Earnings with no changes to the definition. In order to maintain our status as a REIT, we are required to distribute at least 90% of our taxable income as dividends. Distributable Earnings is intended to overtime serve as a general, though imperfect, proxy for our taxable income. As such, Distributable Earnings is considered a key indicator of our ability to generate sufficient income to pay our common dividends, which is the primary focus of income-oriented investors who comprise a meaningful segment of our stockholder base. We believe providing Distributable Earnings on a supplemental basis to our net income and cash flow from operating activities, as determined in accordance with GAAP, is helpful to stockholders in assessing the overall run-rate operating performance of our business.

For reporting purposes, we define Distributable Earnings as net income attributable to our stockholders, computed in accordance with GAAP, excluding: (i) non-cash equity compensation expenses; (ii) depreciation and amortization; (iii) any unrealized gains (losses) or other similar non-cash items that are included in net income for the applicable reporting period (regardless of whether such items are included in other comprehensive income or in net income for such period); and (iv) certain non-cash items and one-time expenses. Distributable Earnings may also be adjusted from time to time for reporting purposes to exclude one-time events pursuant to changes in GAAP and certain other material non-cash income or expense items approved by a majority of our independent directors. The exclusion of depreciation and amortization from the calculation of Distributable Earnings only applies to debt investments related to real estate to the extent we foreclose upon the property or properties underlying such debt investments.

While Distributable Earnings excludes the impact of the unrealized non-cash current provision for credit losses, we expect to only recognize such potential credit losses in Distributable Earnings if and when such amounts are deemed non-recoverable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received, or expected to be received, and the carrying value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan. During the three months ended March 31, 2024, we recorded provision for credit losses of $(75.6) million, which has been excluded from Distributable Earnings, consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings referenced above. During the three months ended March 31, 2024, we recorded $(1.3) million in depreciation and amortization on REO and related intangibles, which has been excluded from Distributable Earnings consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings referenced above.

Distributable Earnings does not represent net income or cash flow from operating activities and should not be considered as an alternative to GAAP net income, or an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and, accordingly, our reported Distributable Earnings may not be comparable to the Distributable Earnings reported by other companies.

We believe it is useful to our stockholders to present Distributable Earnings before realized losses to reflect our run-rate operating results as (i) our operating results are mainly comprised of net interest income earned on our loan investments net of our operating expenses, which comprise our ongoing operations, (ii) it helps our stockholders in assessing the overall run-rate operating performance of our business, and (iii) it has been a useful reference related to our common dividend as it is one of the factors we and our Board of Directors consider when declaring the dividend. We believe that our stockholders use Distributable Earnings and Distributable Earnings before realized losses, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.