gpmt-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38124

GRANITE POINT MORTGAGE TRUST INC.

(Exact name of registrant as specified in its charter)


Maryland						61-1843143
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


3 Bryant Park, Suite 2400A
New York,	New York	10036
(Address of principal executive offices)		(Zip Code)

(212) 364-5500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

GPMT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 5, 2021, there were 54,789,465 shares of outstanding common stock, par value $0.01 per share, issued and outstanding.

Table of Contents

GRANITE POINT MORTGAGE TRUST INC.

INDEX


		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Comprehensive Income (loss) for the Three a nd Six Months Ended June 30 , 2021 and 2020	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30 , 2021 and 2020	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30 , 2021 and 2020	5
	Notes to the Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	55
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	56
Index of Exhibits		57
Signatures		59

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

GRANITE POINT MORTGAGE TRUST INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	June 30, 2021		December 31, 2020
ASSETS
Loans held-for-investment	$	3,635,315	$	3,914,469
Allowance for credit losses	(57,671)		(66,666)
Loans held-for-investment, net	3,577,644		3,847,803


Cash and cash equivalents	236,953		261,419
Restricted cash	2,077		67,774
Accrued interest receivable	10,149		12,388



Other assets	27,645		30,264
Total Assets (1)	$	3,854,468	$	4,219,648
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Repurchase facilities	$	717,196	$	1,708,875
Securitized debt obligations	1,446,603		927,128
Asset-specific financings	82,768		123,091
Term financing facility	142,414		—
Convertible senior notes	272,074		271,250


Senior secured term loan facilities	207,881		206,448

Dividends payable	13,963		25,049

Other liabilities	24,273		22,961
Total Liabilities (1)	2,907,172		3,284,802
Commitments and Contingencies (see Note 10)
10% cumulative redeemable preferred stock, par value $0.01 per share; 50,000,000 shares authorized and 1,000 shares issued and outstanding ($1,000,000 liquidation preference)	1,000		1,000
Stockholders’ Equity
Common stock, par value $0.01 per share; 450,000,000 shares authorized and 54,790,186 and 55,205,082 shares issued and outstanding, respectively	548		552
Additional paid-in capital	1,056,364		1,058,298
Cumulative earnings	145,425		103,165
Cumulative distributions to stockholders	(256,166)		(228,169)
Total Granite Point Mortgage Trust, Inc. Stockholders’ Equity	946,171		933,846
Non-controlling interests	125		—
Total Equity	$	946,296	$	933,846
Total Liabilities and Stockholders’ Equity	$	3,854,468	$	4,219,648

____________________

(1)The condensed consolidated balance sheets include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of these VIEs, and liabilities of the consolidated VIEs for which creditors do not have recourse to Granite Point Mortgage Trust Inc. At June 30, 2021 and December 31, 2020, assets of the VIEs totaled $1,914,336 and $1,255,932, respectively, and liabilities of the VIEs totaled $1,448,229 and $928,220, respectively. See Note 4 - Variable Interest Entities and Securitized Debt Obligations for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

GRANITE POINT MORTGAGE TRUST INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Interest income:
Loans held-for-investment	$	49,350	$	60,299	$	103,389	$	123,558
Loans held-for-sale	—		121		—		121
Available-for-sale securities	—		247		—		527
Held-to-maturity securities	—		236		—		546
Cash and cash equivalents	103		41		203		367
Total interest income	49,453		60,944		103,592		125,119
Interest expense:
Repurchase facilities	6,047		14,276		14,998		33,951
Securitized debt obligations	7,129		6,502		11,746		15,936
Convertible senior notes	4,544		4,525		9,062		9,041
Term financing facility	2,633		—		4,755		—
Asset-specific financings	668		939		1,545		2,061
Revolving credit facilities	—		320		—		562
Senior secured term loan facilities	5,653		—		10,933		—
Total interest expense	26,674		26,562		53,039		61,551
Net interest income	22,779		34,382		50,553		63,568




Other income (loss):
Benefit from (provision for) credit losses	193		(14,205)		9,312		(67,541)
Realized losses on sales of loans held-for-sale	—		(6,894)		—		(6,894)
Fee income	—		—		—		522

Total other income (loss)	193		(21,099)		9,312		(73,913)
Expenses:
Base management fees	—		3,959		—		7,866
Compensation and benefits	5,017		—		10,477		—
Servicing expenses	1,124		1,002		2,440		2,111
Other operating expenses	2,564		10,060		4,691		18,613

Total expenses	8,705		15,021		17,608		28,590
Income (loss) before income taxes	14,267		(1,738)		42,257		(38,935)
Benefit from income taxes	(2)		(5)		(3)		(11)
Net income (loss)	14,269		(1,733)		42,260		(38,924)
Dividends on preferred stock	25		25		50		50
Net income (loss) attributable to common stockholders	$	14,244	$	(1,758)	$	42,210	$	(38,974)
Basic earnings (loss) per weighted average common share	$	0.26	$	(0.03)	$	0.77	$	(0.71)
Diluted earnings (loss) per weighted average common share	$	0.24	$	(0.03)	$	0.71	$	(0.71)

Weighted average number of shares of common stock outstanding:
Basic	55,009,732		55,158,283		55,073,317		55,107,347
Diluted	58,526,985		55,158,283		72,564,914		55,107,347
Comprehensive income (loss):
Net income (loss) attributable to common stockholders	$	14,244	$	(1,758)	$	42,210	$	(38,974)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale securities	—		3,712		—		(32)
Other comprehensive income (loss)	—		3,712		—		(32)
Comprehensive income (loss)	$	14,244	$	1,954	$	42,210	$	(39,006)

The accompanying notes are an integral part of these condensed consolidated financial statements.

GRANITE POINT MORTGAGE TRUST INC

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)


	Common Stock
	Shares	Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Earnings		Cumulative Distributions to Stockholders		Total Stockholders’ Equity		Non-controlling Interests		Total Equity



































Balance, December 31, 2019	54,853,205	549		1,048,484		32		162,076		(192,005)		1,019,136		—		1,019,136
Cumulative effect of adoption of new accounting principle	—	—		—		—		(18,472)		—		(18,472)		—		(18,472)
Adjusted balance, January 1, 2020	54,853,205	549		1,048,484		32		143,604		(192,005)		1,000,664		—		1,000,664
Net loss	—	—		—		—		(37,191)		—		(37,191)		—		(37,191)
Other comprehensive loss before reclassifications	—	—		—		(4,511)		—		—		(4,511)		—		(4,511)
Amounts reclassified from accumulated other comprehensive income	—	—		—		767		—		—		767		—		767
Net other comprehensive loss	—	—		—		(3,744)		—		—		(3,744)		—		(3,744)



Preferred dividends declared, $25.00 per share	—	—		—		—		—		(25)		(25)		—		(25)

Non-cash equity award compensation	283,680	3		1,352		—		—		—		1,355		—		1,355
Balance, March 31, 2020	55,136,885	552		1,049,836		(3,712)		106,413		(192,030)		961,059		—		961,059
Net loss	—	—		—		—		(1,733)		—		(1,733)		—		(1,733)
Other comprehensive income before reclassifications	—	—		—		4,223		—		—		4,223		—		4,223
Amounts reclassified from accumulated other comprehensive income	—	—		—		(511)		—		—		(511)		—		(511)
Net other comprehensive income	—	—		—		3,712		—		—		3,712		—		3,712



Preferred dividends declared, $25.00 per share	—	—		—		—		—		(25)		(25)		—		(25)

Non-cash equity award compensation	68,197	—		1,323		—		—		—		1,323		—		1,323
Balance, June 30, 2020	55,205,082	$	552	$	1,051,159	$	—	$	104,680	$	(192,055)	$	964,336	$	—	$	964,336

Table of Contents

GRANITE POINT MORTGAGE TRUST INC

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data) (Continued)


	Common Stock
	Shares	Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Earnings		Cumulative Distributions to Stockholders		Total Stockholders’ Equity		Non-controlling Interests		Total Equity

Balance, December 31, 2020	55,205,082	552		1,058,298		$	—	103,165		(228,169)		933,846		—		933,846


Net income	—	—		—		—		27,991		—		27,991		—



Restricted stock forfeiture	(97,425)	(1)		(918)		—		—		—		(919)		—		(919)
Common dividends declared, $0.25 per share	—	—		—		—		—		(14,008)		(14,008)		—		(14,008)
Preferred dividends declared, $25.00 per share	—	—		—		—		—		(25)		(25)		—		(25)
Non-cash equity award compensation	—	—		1,887		—		—		—		1,887		—		1,887
Contributions from non-controlling interests	—	—		—		—		—		—		—		125		125
Balance, March 31, 2021	55,107,657	551		1,059,267		—		131,156		(242,202)		948,772		125		948,897
Net income	—	—		—		—		14,269		—		14,269		—		14,269




Restricted stock forfeiture	(17,628)	—		(275)		—		—		—		(275)		—		(275)
Repurchase of common stock	(300,891)	(3)		(4,267)		—		—		—		(4,270)		—		(4,270)
Common dividends declared, $0.25 per share	—	—		—		—		—		(13,939)		(13,939)		—		(13,939)
Preferred dividends declared, $25.00 per share	—	—		—		—		—		(25)		(25)		—		(25)

Non-cash equity award compensation	1,048	—		1,639		—		—		—		1,639		—		1,639
Balance, June 30, 2021	54,790,186	$	548	$	1,056,364	$	—	$	145,425	$	(256,166)	$	946,171	$	125	$	946,296

The accompanying notes are an integral part of these condensed consolidated financial statements.

GRANITE POINT MORTGAGE TRUST INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six Months Ended
	June 30,
	2021		2020
Cash Flows From Operating Activities:
Net income (loss)	$	42,260	$	(38,924)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Accretion of discounts and net deferred fees on loans held-for-investment and deferred interest capitalized to loans held-for-investment	(16,652)		(9,321)
Amortization of deferred debt issuance costs on repurchase facilities, asset-specific financings, convertible senior notes, securitized debt obligations, senior secured term loan facilities and term financing facilities	5,636		3,280
(Benefit from) provision for credit losses	(9,312)		67,541

Realized losses on sales of loans held-for-sale	—		6,894



Amortization of equity-based compensation	3,526		2,678

Net change in assets and liabilities:
Decrease (increase) in accrued interest receivable	2,239		(326)



Decrease in other assets	1,355		1,501




Increase (decrease) in other liabilities	1,670		(1,018)

Net cash provided by operating activities	30,722		32,305
Cash Flows From Investing Activities:
Originations, acquisitions and additional fundings of loans held-for-investment, net of deferred fees	(228,750)		(257,004)

Proceeds from repayment of loans held-for-investment	524,557		106,115





Principal payments on held-to-maturity securities	—		6,350

Proceeds from sales of loans held-for-sale	—		12,771


Net cash provided by (used in) investing activities	295,807		(131,768)

Cash Flows From Financing Activities:
Proceeds from repurchase facilities	82,931		310,471
Principal payments on repurchase facilities	(1,074,611)		(203,576)
Proceeds from issuance of securitized debt obligations	685,766		—
Principal payments on securitized debt obligations	(162,366)		(60,000)

Proceeds from asset-specific financings	—		4,777
Repayment of asset-specific financings	(40,323)		—
Proceeds from revolving credit facilities	—		38,361
Repayment of revolving credit facilities	—		(67,780)
Proceeds from term financing facility	349,291		—
Repayment of term financing facility	(204,606)		—
Payment of debt issuance costs	(8,353)		—

Contributions from non-controlling interests	125		—
Tax withholding on restricted stock	(1,194)		—
Repurchase of common stock	(4,270)		—
Dividends paid on preferred stock	(50)		(50)
Dividends paid on common stock	(39,032)		(23,038)
Net cash used in financing activities	(416,692)		(835)
Net decrease in cash, cash equivalents and restricted cash	(90,163)		(100,298)
Cash, cash equivalents and restricted cash at beginning of period	329,193		159,764
Cash, cash equivalents and restricted cash at end of period	$	239,030	$	59,466
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	53,505	$	63,350
Cash paid for taxes	$	611	$	—
Noncash Activities:
Transfers of loans held-for-investment to loans held-for-sale	$	—	$	19,665
Dividends declared but not paid at end of period	$	13,964	$	25

The accompanying notes are an integral part of these condensed consolidated financial statements.

GRANITE POINT MORTGAGE TRUST INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)

Note 1. Organization and Operations

Granite Point Mortgage Trust Inc. is an internally managed real estate finance company that focuses primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments. These investments are capitalized by accessing a variety of funding options, including borrowing under our bank credit facilities or other asset-specific financings, issuing commercial real estate collateralized loan obligations, or CRE CLOs, entering into term financing agreements, and issuing other forms of secured and unsecured debt and equity securities, depending on market conditions and our view of the most appropriate funding option available for our investments. Our investment objective is to preserve our stockholders’ capital while generating attractive risk-adjusted returns over the long term, primarily through dividends derived from current income produced by our investment portfolio. Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol “GPMT”. We operate our business in a manner that will permit us to maintain our exclusion from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We operate our business as one segment. We were incorporated in Maryland on April 7, 2017 and commenced operations as a publicly traded company on June 28. 2017.

The Company has elected to be treated as a real estate investment trust, or REIT, as defined under the Internal Revenue Code of 1986, as amended, or the Code, for U.S. federal income tax purposes. As long as the Company continues to comply with a number of requirements under federal tax law and maintains its qualification as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that the Company distributes its taxable income to its stockholders on an annual basis and does not engage in prohibited transactions. However, certain activities that the Company may perform may cause it to earn income which will not be qualifying income for REIT purposes. The Company has designated one of its subsidiaries as a taxable REIT subsidiary, or TRS, as defined in the Code, to engage in such activities.

Through December 31, 2020, the Company was externally managed by Pine River Capital Management L.P., or the Former Manager, at which time the Company internalized its management function, or the Internalization.

Note 2. Basis of Presentation and Significant Accounting Policies

Consolidation and Basis of Presentation

The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted according to such SEC rules and regulations. However, management believes that the disclosures included in these interim condensed consolidated financial statements are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In the opinion of management, all normal and recurring adjustments necessary to present fairly the financial condition of the Company at June 30, 2021 and results of operations for all periods presented have been made. The results of operations for the three and six months ended June 30, 2021 should not be construed as indicative of the results to be expected for future periods or the full year.

The unaudited condensed consolidated financial statements of the Company include the accounts of all subsidiaries; inter-company accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation.

All entities in which the Company holds investments that are considered VIEs for financial reporting purposes were reviewed for consolidation under the applicable consolidation guidance. Whenever the Company has both the power to direct the activities of an entity that most significantly impact the entity’s performance, and the obligation to absorb losses or the right to receive benefits of the entity that could be significant, the Company consolidates the entity.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make a number of significant estimates. These include estimates of amount and timing of allowances for credit losses, fair value of certain assets and liabilities, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g., valuation changes to the underlying collateral of loans due to changes in market capitalization rates, leasing, credit worthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, overall economic and capital markets conditions, the broader commercial real estate market, local geographic sub-markets or other factors) will occur in the near term. As of June 30, 2021, the COVID-19

GRANITE POINT MORTGAGE TRUST INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)

pandemic remains ongoing. During 2020, the pandemic created significant macroeconomic disruptions, increased rates of unemployment and has adversely impacted many industries, including those related to the real estate collateral underlying certain of our loans. So far in 2021, the global and U.S. economic activity has, to varying degrees, begun to improve, as wider distribution of the COVID-19 vaccines has continued. As a result, macroeconomic forecasts have improved over the last few quarters, including expectations for unemployment rates and overall economic output. Nonetheless, the ongoing pandemic may continue to adversely impact macroeconomic recovery, particularly with respect to the emergence of new variants of the COVID-19 virus, the continued distribution and acceptance of vaccines and the effectiveness of such vaccines against new variants of the COVID-19 virus. Even though the overall market conditions have been improving, the fluid nature of this situation precludes any prediction as to the ultimate adverse impact of the COVID-19 pandemic on economic and real estate markets. Accordingly, given the ongoing nature of the outbreak, at this time the Company cannot reasonably estimate the magnitude of the long-term impact that COVID-19 may have on the Company’s business, financial performance and operating results. The Company believes the estimates and assumptions underlying its condensed consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2021. However, uncertainty over the ultimate impact the COVID-19 pandemic will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of June 30, 2021 inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic. The Company’s actual results could ultimately differ from its estimates and such differences may be material.

Significant Accounting Policies

Included in Note 2 to the Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 is a summary of the Company’s significant accounting policies. Provided below is a summary of additional accounting policies that are significant to the Company’s condensed consolidated financial condition and results of operations for the three and six months ended June 30, 2021.

Term Financing Facility

The Company finances certain of its loans held-for-investment through the use of a term financing facility. Borrowings under the term financing facility bear an interest rate of a specified margin over the one-month London Interbank Offered Rate, or LIBOR. The term financing facility financings are treated as collateralized financing transactions and are carried at their contractual amounts, as specified in the respective agreements.

Recently Issued and/or Adopted Accounting Standards

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, or ASU No. 2020-04, which provides optional expedients and exceptions for applying GAAP to debt instruments, derivatives, and other contracts that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This guidance is optional and may be elected through December 31, 2022 using a prospective application on all eligible contract modifications. The Company has loan agreements, and debt agreements that incorporate LIBOR as a referenced interest rate. It is difficult to predict what effect, if any, the phase-out of LIBOR and the use of alternative benchmarks may have on the Company’s business or on the overall financial markets. The Company has not adopted any of the optional expedients or exceptions through June 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions.

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in an Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, or ASU No. 2020-06. The intention of ASU No. 2020-06 is to address the complexities in accounting for certain financial instruments with a debt and equity component. Under ASU No. 2020-06, the number of accounting models for convertible notes will be reduced and entities that issue convertible debt will be required to use the if-converted method for the computation of diluted "Earnings per share" under ASC 260. ASC 2020-06 is effective for fiscal years beginning after December 15, 2021 and may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. The Company is currently assessing the impact this guidance will have on its condensed consolidated financial statements.

Note 3. Loans Held-for-Investment, Net of Allowance for Credit Losses

The Company originates and acquires commercial real estate debt and related instruments generally to be held as long-term investments. These assets are classified as “loans held-for-investment” on the condensed consolidated balance sheets. Loans held-for-investment are reported at cost, net of any unamortized acquisition premiums or discounts, loan fees, origination costs and allowance for credit losses, as applicable.

GRANITE POINT MORTGAGE TRUST INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)

The following tables summarize the Company’s loans held-for-investment by asset type, property type and geographic location as of June 30, 2021 and December 31, 2020:


	June 30, 2021
(dollars in thousands)	Senior Loans (1)			Mezzanine Loans			B-Notes			Total
Unpaid principal balance	$	3,631,658		$	1,713		$	14,121		$	3,647,492
Unamortized (discount) premium	(64)			—			—			(64)
Unamortized net deferred origination fees	(12,113)			—			—			(12,113)
Allowance for credit losses	(53,371)			(1,713)			(2,587)			(57,671)
Carrying value	$	3,566,110		$	—		$	11,534		$	3,577,644
Unfunded commitments	$	441,096					$	—		$	441,096
Number of loans	97			1			1			99
Weighted average coupon	5.0		%	13.0		%	8.0		%	5.0		%
Weighted average years to maturity (2)	0.9			4.4			5.6			1.0


	December 31, 2020
(dollars in thousands)	Senior Loans (1)			Mezzanine Loans			B-Notes			Total
Unpaid principal balance	$	3,915,833		$	2,366		$	14,235		$	3,932,434
Unamortized (discount) premium	(75)			—			—			(75)
Unamortized net deferred origination fees	(17,890)			—			—			(17,890)
Allowance for credit losses	(60,130)			(2,366)			(4,170)			(66,666)
Carrying value	$	3,837,738		$	—		$	10,065		$	3,847,803
Unfunded commitments	$	503,726		$	—		$	—		$	503,726
Number of loans	101			1			1			103
Weighted average coupon	5.1		%	13.0		%	8.0		%	5.1		%
Weighted average years to maturity (2)	1.1			4.9			6.1			1.1

____________________

(1)Loans primarily secured by a first priority lien on commercial real property and related personal property and also includes, when applicable, any companion subordinate loans.

(2)Based on contractual maturity date. Certain loans are subject to contractual extension options with such conditions stipulated in the applicable loan documents. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment fee. The Company may also extend contractual maturities in connection with certain loan modifications.


(dollars in thousands)	June 30, 2021				December 31, 2020
Property Type	Carrying Value		% of Loan Portfolio		Carrying Value		% of Loan Portfolio
Office	$	1,627,802	45.5	%	$	1,720,705	44.7	%
Multifamily	909,150		25.5	%	910,557		23.7	%
Hotel	531,383		14.9	%	646,869		16.8	%
Retail	337,879		9.4	%	332,218		8.6	%
Industrial	130,492		3.6	%	196,677		5.1	%
Other	40,938		1.1	%	40,777		1.1	%
Total	$	3,577,644	100.0	%	$	3,847,803	100.0	%

GRANITE POINT MORTGAGE TRUST INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)


(dollars in thousands)	June 30, 2021				December 31, 2020
Geographic Location	Carrying Value		% of Loan Portfolio		Carrying Value		% of Loan Portfolio
Northeast	$	944,100	26.4	%	$	1,028,584	26.8	%
Southwest	686,121		19.2	%	802,233		20.8	%
West	625,536		17.5	%	682,236		17.7	%
Midwest	679,837		19.0	%	712,675		18.5	%
Southeast	642,050		17.9	%	622,075		16.2	%

Total	$	3,577,644	100.0	%	$	3,847,803	100.0	%

At June 30, 2021 and December 31, 2020, the Company pledged loans held-for-investment with a carrying value, net of allowance for credit losses, of $3.4 billion and $3.8 billion, respectively, as collateral under repurchase facilities, an asset-specific financing facility, a term financing facility and securitized debt obligations. See Note 4 - Variable Interest Entities and Securitized Debt Obligations and Note 5 - Secured Financing Agreements.

The following table summarizes activity related to loans held-for-investment, net of allowance for credit losses, for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended June 30,			Six Months Ended June 30,
(in thousands)	2021		2020	2021	2020
Balance at beginning of period	$	3,799,836