Granite Point Mortgage Trust Inc. Announces Fourth Quarter 2023 Common and Preferred Stock Dividends and Business Update

Rhea-AI Summary

Granite Point Mortgage Trust Inc. (NYSE: GPMT) announced a quarterly cash dividend of $0.20 per share of common stock and $0.4375 per share of the 7.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the fourth quarter of 2023. The company also resolved a $93 million nonaccrual loan, repurchased 1 million shares of common stock, funded $15 million on existing loan commitments, and realized over $275 million in loan repayments, paydowns, and resolutions. The company carried over $190 million in unrestricted cash as of December 18th.

Positive

• The company resolved a $93 million nonaccrual loan, repurchased 1 million shares of common stock, and realized over $275 million in loan repayments, paydowns, and resolutions.

Negative

• The resolution of the nonaccrual loan resulted in a loss of approximately $(30) million, which will be reflected in the company’s financial results for the fourth quarter of 2023.

Insights

Financial Analyst

The declaration of quarterly cash dividends by Granite Point Mortgage Trust Inc. is a notable event for shareholders, indicating the company's ability to generate and distribute income. The resolution of a significant nonaccrual loan and the subsequent loss recognition, however, are critical factors that could influence the company's financial health and investor sentiment.

The repurchase of 1 million shares suggests confidence in the intrinsic value of the company's stock, potentially signaling undervaluation to the market. The emphasis on liquidity and proactive portfolio management is a strategic move aimed at long-term stability and shareholder value creation.

Stakeholders should consider the impact of the loss on the company's earnings and balance sheet, while also acknowledging the positive implications of returning capital to shareholders through dividends and share repurchases.

Industry Analyst

Granite Point's engagement in a significant transaction to resolve a nonaccrual loan and provide a new loan to the purchasing entity reflects the company's active management of its loan portfolio. The loss expected from this resolution, though previously reserved for, will affect the reported financial results and could influence the company's stock performance.

The high proportion of office asset resolutions in the loan repayments and paydowns indicates a focus on this sector, which may be subject to market volatility and changing work trends post-pandemic. Investors should assess the company's exposure to office real estate and the potential risks and rewards associated with this focus.

NEW YORK--(BUSINESS WIRE)-- Granite Point Mortgage Trust Inc. (NYSE: GPMT) (“GPMT,” “Granite Point” or the “Company”) today announced that the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share of common stock for the fourth quarter of 2023. This dividend is payable on January 16, 2024, to holders of record of common stock at the close of business on December 29, 2023.

The Company’s Board of Directors also declared a quarterly cash dividend of $0.4375 per share of the 7.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the fourth quarter of 2023. This dividend is payable on January 16, 2024, to the holders of record of the Series A Preferred Stock at the close of business on December 29, 2023.

“Our recent resolution of the $93 million San Diego, CA office loan represents our continued efforts to address our nonaccrual loans, where appropriate, turning them to earning assets and, over time, improving our run-rate profitability,” said Jack Taylor, President and Chief Executive Officer of Granite Point. “At the same time, consistent with our prevailing view that our stock represents an attractive value opportunity for investors, we repurchased 1 million shares of our common stock during the quarter at a compelling valuation versus our book value. We believe that our strategy of protecting both sides of the balance sheet through emphasizing liquidity and proactive portfolio management will position us well for long-term success and creating value for our stockholders.”

Fourth Quarter Business Update

• In December, the Company resolved a $93 million senior loan that was on nonaccrual status. The resolution involved a coordinated sale of the collateral property, a San Diego, CA office property, and the Company provided the new ownership group with a $49 million senior floating rate loan supported by meaningful fresh cash equity capital invested in the property by the new sponsor. As a result of these transactions, the Company expects to realize a loss of approximately $(30) million, which had been largely reserved for through the previously recorded allowance for credit loss on this loan and will be reflected in the Company’s financial results for the fourth quarter of 2023.
• During the quarter, the Company repurchased 1 million shares of common stock at an average price of $5.15 per share for a total of approximately $5.2 million.
• The Company funded approximately $15 million on existing loan commitments during the quarter and realized over $275 million in loan repayments, paydowns and resolutions, over 60% of which were office assets, including the nonaccrual resolution described above.
• As of December 18th, the Company carried over $190 million in unrestricted cash.

About Granite Point Mortgage Trust Inc.

Granite Point Mortgage Trust Inc. is a Maryland corporation 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. Additional information is available at www.gpmtreit.com.

Forward-Looking Statements

This press release 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 are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “target,” “believe,” “outlook,” “potential,” “continue,” “intend,” “seek,” “plan,” “goals,” “future,” “likely,” “may” and similar expressions or their negative forms, or by references to strategy, plans or intentions. The illustrative examples herein are forward-looking statements. Our expectations, beliefs and estimates are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and estimates will prove to be correct or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2022, under the caption “Risk Factors,” and our subsequent filings made with the SEC. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.

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, 24^th floor, New York, NY 10036, telephone (212) 364-5500.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231219549094/en/

Investors:

Chris Petta, Investor Relations, Granite Point Mortgage Trust Inc., (212) 364-5500, investors@gpmtreit.com.

Source: Granite Point Mortgage Trust Inc.

FAQ

What is the quarterly cash dividend declared by Granite Point Mortgage Trust Inc. for the fourth quarter of 2023?

Granite Point Mortgage Trust Inc. declared a quarterly cash dividend of $0.20 per share of common stock and $0.4375 per share of the 7.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the fourth quarter of 2023.

What nonaccrual loan did the company resolve in December?

The company resolved a $93 million senior loan that was on nonaccrual status in December.

How many shares of common stock did the company repurchase during the quarter?

The company repurchased 1 million shares of common stock during the quarter.

How much unrestricted cash did the company carry over as of December 18th?

As of December 18th, the company carried over $190 million in unrestricted cash.