Granite Point Mortgage Trust Inc. Announces Second Quarter 2024 Common and Preferred Stock Dividends and Business Update

Rhea-AI Summary

Granite Point Mortgage Trust Inc. (NYSE: GPMT) announced a quarterly cash dividend of $0.05 per share of common stock and $0.4375 per share of its 7% Series A Preferred Stock for Q2 2024, payable on July 15, 2024. The Board emphasized maintaining book value amid real estate challenges and highlighted strategic share repurchases, having bought back 0.5 million shares this quarter. A $11.6 million nonaccrual loan was resolved, resulting in a $2.5 million expected loss, and a $37.6 million nonaccrual loan is under contract for sale, expected to close in Q3 2024. The company funded $10 million on existing commitments and realized $45 million in repayments.

Positive

• Declared quarterly dividends for both common ($0.05) and preferred stock ($0.4375).
• Repurchased 0.5 million shares of common stock at an average price of $3.10, totaling $1.6 million.
• Realized approximately $45 million in repayments and paydowns.
• Maintained a strategy focused on liquidity and proactive asset management.

Negative

• Expected to realize a $2.5 million loss from the resolution of an $11.6 million nonaccrual loan.
• Continued challenges in the real estate market impacting profitability.

Insights

Financial Analyst

Granite Point Mortgage Trust Inc.'s (GPMT) announcement of second quarter dividends for both common and preferred stock primarily affects income-seeking investors. The relatively modest $0.05 per share dividend for common stock, while steady, suggests the company is prioritizing liquidity and strategic flexibility over high payouts, which might create short-term dissatisfaction among dividend-focused investors. However, the stable $0.4375 per share for Series A preferred stock provides assured income, reflecting the company's commitment to secure obligations.

The business update reveals ongoing challenges and proactive responses, including the resolution of nonperforming loans and strategic repurchases. The repurchase of 0.5 million shares at an average price of $3.10 per share indicates management's confidence in the stock's undervaluation, thus potentially enhancing shareholder value in the long run. However, the realization of a $2.5 million loss from a resolved loan adds a layer of caution regarding the company's credit quality and asset management.

Overall, the careful balance between maintaining liquidity and proactive asset management aligns with long-term strategic goals but may temper short-term investor enthusiasm.

Market Research Analyst

GPMT's actions amid a challenging real estate market reflect a defensive strategy. The ongoing real estate market stress affects profitability, evidenced by the $2.5 million loss from the Milwaukee property. The company's proactive stance on resolving nonperforming loans and opportunistic share repurchases demonstrate strategic management aimed at bolstering market confidence and protecting book value.

Investors should note that the $37.6 million loan secured by a Los Angeles office property is under contract for sale, which might bring future uncertainty until finalized. The company's continued focus on liquidity and asset management should position it for stability, but the real estate sector's volatility remains a significant factor.

For retail investors, the stock buybacks and maintained preferred dividends are positives. However, the overall impact of market conditions on GPMT's performance requires cautious optimism.

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 $0.05 per share of common stock for the second quarter of 2024. This dividend is payable on July 15, 2024, to holders of record of common stock at the close of business on July 1, 2024.

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 second quarter of 2024. This dividend is payable on July 15, 2024, to the holders of record of the Series A Preferred Stock at the close of business on July 1, 2024.

“In setting the current level of our common dividend, the Board considered a number of factors, including our strategic focus on supporting book value during a period of reduced profitability of the Company due to the ongoing real estate market challenges,” said Jack Taylor, President and Chief Executive Officer of Granite Point. “Additionally, it will enhance our flexibility to opportunistically repurchase our common shares. Consistent with our prevailing view that our stock represents an attractive value for investors, during the quarter we repurchased 0.5 million shares of our common stock at a compelling valuation versus our book value. We have also continued to make progress resolving our nonperforming loans, two of which are noted below, and which such resolutions should improve our run-rate profitability. We believe that our strategy of protecting both sides of the balance sheet through emphasizing liquidity and proactive asset management will position us well for long-term success.”

Second Quarter Business Update

• In June, the Company resolved an $11.6 million senior loan that had been on nonaccrual status. The resolution involved a coordinated sale of the collateral property, a multifamily asset located in Milwaukee, WI. As a result of this transaction, the Company expects to realize a loss of approximately $(2.5) million, which had been reserved for through a previously recorded allowance for credit loss on this loan and will be reflected in the Company’s financial results for the second quarter of 2024.
• An office property located in Los Angeles, CA, securing the Company’s $37.6 million senior loan, is currently under contract to be sold. The loan was previously placed on nonaccrual status. The potential transaction is expected to close during the third quarter of 2024.
• During the quarter, the Company repurchased 0.5 million shares of its common stock at an average price of $3.10 per share for a total of approximately $1.6 million. Consistent with its flexible capital return strategy and the goal of supporting long-term shareholder value, since June of 2021, the Company has repurchased approximately 5.4 million of its common shares representing approximately 10% of its common shares outstanding.
• The Company funded approximately $10 million on existing loan commitments during the quarter and realized about $45 million in repayments and paydowns, excluding the nonaccrual resolution referenced above.

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, 2023, 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/20240618528575/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 dividend did Granite Point Mortgage Trust (GPMT) announce for Q2 2024?

Granite Point Mortgage Trust announced a quarterly cash dividend of $0.05 per share of common stock and $0.4375 per share of its 7% Series A Preferred Stock for the second quarter of 2024.

When are GPMT's Q2 2024 dividends payable?

The dividends are payable on July 15, 2024, to holders of record at the close of business on July 1, 2024.

Did Granite Point Mortgage Trust repurchase any shares in Q2 2024?

Yes, Granite Point Mortgage Trust repurchased 0.5 million shares of its common stock at an average price of $3.10 per share, totaling approximately $1.6 million.

What loans did GPMT resolve in Q2 2024?

GPMT resolved an $11.6 million senior loan, resulting in a $2.5 million expected loss, and a $37.6 million senior loan which is under contract for sale, expected to close in Q3 2024.

How much did GPMT fund on existing loan commitments in Q2 2024?

Granite Point Mortgage Trust funded approximately $10 million on existing loan commitments during the second quarter of 2024.

How much did GPMT realize in repayments and paydowns in Q2 2024?

Granite Point Mortgage Trust realized about $45 million in repayments and paydowns during the second quarter of 2024.