Granite Point Mortgage Trust (GPMT) Q2 2024 earnings summary

Executive summary

• Q2 2024 GAAP net loss was $66.7 million ($1.31 per share), driven by a $60.8 million credit loss provision and realized loan write-offs, with distributable loss of $9.1 million ($0.18 per share).

• Book value per share declined to $9.84 at June 30, 2024, including $5.27 per share in CECL reserves.

• Portfolio comprised 68 loans with $2.7 billion in commitments and $2.6 billion outstanding, 99% senior and 98% floating rate, with a weighted average stabilized LTV at origination of 63.7%.

• Dividend reduced to $0.05 per share to preserve capital amid challenging credit conditions and near-term earnings pressure; $0.4375 per share paid on Series A preferred.

• Repurchased 0.5 million shares at $3.10 per share, accreting $0.05 per share to book value; 3.6 million shares remain authorized for buyback.

Financial highlights

• Net interest income for Q2 2024 was $8.1 million, down from $21.8 million in Q2 2023, due to higher nonaccrual loans and lower average interest-earning assets.

• Provision for credit losses was $60.8 million, with total CECL reserve at $266.9 million (9.7% of portfolio commitments), up from $213 million (7.5%) in Q1.

• Distributable loss was $9.1 million ($0.18 per share), reflecting $6.6 million in loan write-offs and lower net interest income.

• Book value at June 30 was $9.84 per share, down $1.30 from Q1, primarily due to loan loss provisions, partially offset by share buybacks.

• Ended Q2 with $86 million in unrestricted cash and a leverage ratio of 2.5x.

Outlook and guidance

• Expect higher loan repayments and nonaccrual resolutions in H2 2024, with portfolio balance likely to trend lower by year-end.

• Run rate profitability anticipated to improve as non-earning assets are resolved, though timing and magnitude remain uncertain.

• CECL reserves projected to decline as nonaccrual resolutions progress and market stabilizes.

• Remain opportunistic with future share buybacks and focused on liquidity and prudent capital allocation.