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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 September 30, 2022
or
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 York10036
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareGPMTNYSE
7.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, par value $0.01 per shareGPMTPrANYSE
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 filerAccelerated 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 November 4, 2022, there were 52,350,989 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)
PART II - OTHER INFORMATION

i


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)
September 30,
2022
December 31,
2021
ASSETS
Loans held-for-investment$3,603,016 $3,782,205 
Allowance for credit losses(82,611)(40,897)
Loans held-for-investment, net3,520,405 3,741,308 
Cash and cash equivalents168,414 191,931 
Restricted cash45,242 12,362 
Accrued interest receivable11,056 10,716 
Other assets37,541 32,201 
Total Assets (1)
$3,782,658 $3,988,518 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Repurchase facilities$1,195,965 $677,285 
Securitized debt obligations1,224,035 1,677,619 
Asset-specific financings44,913 43,622 
Term financing facility 127,145 
Convertible senior notes274,289 272,942 
Senior secured term loan facilities 139,880 
Dividends payable17,023 14,406 
Other liabilities21,792 21,436 
Total Liabilities (1)
2,778,017 2,974,335 
Commitments and Contingencies (see Note 10)
10.00% 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
7.00% Series A cumulative redeemable preferred stock, par value $0.01 per share; 8,280,000 shares authorized, and 8,229,500 and 4,596,500 shares issued and outstanding, respectively; liquidation preference $25.00 per share
82 46 
Common stock, par value $0.01 per share; 450,000,000 shares authorized, and 52,350,989 and 53,789,465 shares issued and outstanding, respectively
524 538 
Additional paid-in capital1,201,716 1,125,241 
Cumulative earnings136,919 171,518 
Cumulative distributions to stockholders(335,725)(284,285)
Total Granite Point Mortgage Trust Inc. Stockholders’ Equity1,003,516 1,013,058 
Non-controlling interests125 125 
Total Equity$1,003,641 $1,013,183 
Total Liabilities and Stockholders’ Equity$3,782,658 $3,988,518 
____________________
(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 September 30, 2022, and December 31, 2021, assets of the VIEs totaled $1,644,528 and $2,266,044, respectively, and liabilities of the VIEs totaled $1,225,758 and $1,679,435, 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.
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GRANITE POINT MORTGAGE TRUST INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands, except share data)
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Interest income:
Loans held-for-investment$52,121 $48,312 $148,475 $151,701 
Cash and cash equivalents714 95 960 298 
Total interest income52,835 48,407 149,435 151,999 
Interest expense:
Repurchase facilities15,098 5,451 30,486 20,449 
Securitized debt obligations14,416 8,777 34,992 20,523 
Convertible senior notes4,585 4,556 13,703 13,618 
Term financing facility 1,453 1,713 6,208 
Asset-specific financings442 414 1,046 1,959 
Senior secured term loan facilities 5,654 3,754 16,587 
Total interest expense34,541 26,305 85,694 79,344 
Net interest income18,294 22,102 63,741 72,655 
Other (loss) income:
(Provision for) benefit from credit losses(35,442)5,760 (52,757)15,072 
Loss on extinguishment of debt  (18,823) 
Fee income  954  
Total other (loss) income(35,442)5,760 (70,626)15,072 
Expenses:
Compensation and benefits4,953 5,634 16,539 16,111 
Servicing expenses1,336 1,323 4,297 3,763 
Other operating expenses2,068 2,276 6,867 6,967 
Total expenses8,357 9,233 27,703 26,841 
(Loss) income before income taxes(25,505)18,629 (34,588)60,886 
(Benefit from) provision for income taxes(1)(1)11 (4)
Net (loss) income
(25,504)18,630 (34,599)60,890 
Dividends on preferred stock
3,626 25 10,876 75 
Net (loss) income attributable to common stockholders$(29,130)$18,605 $(45,475)$60,815 
Basic (loss) earnings per weighted average common share
$(0.56)$0.34 $(0.85)$1.11 
Diluted (loss) earnings per weighted average common share
$(0.56)$0.33 $(0.85)$1.05 
Weighted average number of shares of common stock outstanding:
Basic
52,350,989 54,453,546 53,234,498 54,864,456 
Diluted
52,350,989 56,735,278 53,234,498 70,902,745 
Comprehensive (loss) income$(29,130)$18,605 $(45,475)$60,815 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2




GRANITE POINT MORTGAGE TRUST INC
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)

Common StockPreferred Stock
SharesAmountSharesAmountAdditional Paid-in CapitalCumulative EarningsCumulative Distributions to StockholdersTotal Stockholders’ EquityNon-controlling InterestsTotal Equity
Balance, December 31, 202055,205,082 552   1,058,298 103,165 (228,169)933,846  933,846 
Net income— — — — — 27,991 — 27,991 — 27,991 
Restricted stock forfeiture(97,425)(1)— — (918)— — (919)— (919)
Preferred dividends declared, $25.00 per share
— — — — — — (25)(25)— (25)
Common dividends declared, $0.25 per share
— — — — — — (14,008)(14,008)— (14,008)
Contributions from non-controlling interests— — — — — — — — 125 125 
Non-cash equity award compensation— — — — 1,887 — — 1,887 — 1,887 
Balance, March 31, 202155,107,657 551   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)
Preferred dividends declared, $25.00 per share
— — — — — — (25)(25)— (25)
Common dividends declared, $0.25 per share
— — — — — — (13,939)(13,939)— (13,939)
Non-cash equity award compensation1,048 — — — 1,639 — — 1,639 — 1,639 
Balance, June 30, 202154,790,186 548   1,056,364 145,425 (256,166)946,171 125 946,296 
Net income— — — — — 18,630 — 18,630 — 18,630 
Settlement of warrants to purchase common stock— — — — (7,478)— — (7,478)— (7,478)
Repurchase of common stock(1,000,721)(10)— — (13,523)— — (13,533)(13,533)
Common dividends declared, $0.25 per share
— — — — — — 0(13,688)(13,688)(13,688)
Preferred dividends declared, $25.00 per share
— — — — — — (25)(25)(25)
Non-cash equity award compensation— — — — 2,032 — — 2,032 2,032 
Balance, September 30, 202153,789,465 538   1,037,395 164,055 (269,879)932,109 125 932,234 
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GRANITE POINT MORTGAGE TRUST INC
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data) (Continued)
Common StockPreferred Stock
SharesAmountSharesAmountAdditional Paid-in CapitalCumulative EarningsCumulative Distributions to StockholdersTotal Stockholders’ EquityNon-controlling InterestsTotal Equity
Balance, December 31, 202153,789,465 538 4,596,500 46 1,125,241 171,518 (284,285)1,013,058 125 1,013,183 
Net income— — — — — 4,636 — 4,636 — 4,636 
Issuance of preferred stock, net of offering costs— 3,633,000 36 87,485 — — 87,521 — 87,521 
Restricted stock forfeiture(69,039) — — (824)— — (824)— (824)
Restricted Stock Unit (RSU) forfeiture— — — — (798)— — (798)— (798)
Preferred dividends declared, $25.00 per share
— — — — — — (25)(25)— (25)
Preferred dividends declared, $0.4375 per share
— — — — — — (3,600)(3,600)— (3,600)
Common dividends declared, $0.25 per share
— — — — — — (13,770)(13,770)— (13,770)
Non-cash equity award compensation135,151 1 — — 2,170 — — 2,171 — 2,171 
Balance, March 31, 202253,855,577 539 8,229,500 82 1,213,274 176,154 (301,680)1,088,369 125 1,088,494 
Net (loss) income— — — — — (13,731)— (13,731)— (13,731)
Repurchase of common stock(1,539,134)(15)— — (15,699)— — (15,714)— (15,714)
Restricted Stock Unit (RSU) forfeiture— — — — (114)— — (114)— (114)
Preferred dividends declared, $25.00 per share
— — — — — — (25)(25)— (25)
Preferred dividends declared, $0.4375 per share
— — — — — — (3,600)(3,600)— (3,600)
Common dividends declared, $0.25 per share
— — — — — — (13,382)(13,382)— (13,382)
Non-cash equity award compensation34,546  — — 1,906 — — 1,906 — 1,906 
Balance, June 30, 202252,350,989 524 8,229,500 82 1,199,367 162,423 (318,687)1,043,709 125 1,043,834 
Net (loss) income— — — — — (25,504)— (25,504)— (25,504)
Preferred dividends declared, $25.00 per share
— — — — — — (25)(25)— (25)
Preferred dividends declared, $0.4375 per share
— — — — — — (3,601)(3,601)— (3,601)
Common dividends declared, $0.25 per share
— — — — — — (13,412)(13,412)— (13,412)
Non-cash equity award compensation  — — 2,349 — — 2,349 — 2,349 
Balance, September 30, 202252,350,989 524 8,229,500 82 1,201,716 136,919 (335,725)1,003,516 125 1,003,641 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4




GRANITE POINT MORTGAGE TRUST INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Nine Months Ended
September 30,
20222021
Cash Flows From Operating Activities:
Net (loss) income$(34,599)$60,890 
Adjustments to reconcile net (loss) income 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
(10,014)(20,310)
Amortization of deferred debt issuance costs
9,977 9,692 
Provision for (benefit from) credit losses52,757 (15,072)
Loss on extinguishment of debt11,307  
Amortization of equity-based compensation6,426 5,558 
Proceeds received from deferred interest capitalized on loans held-for-investment4,069  
Net change in assets and liabilities:
(Increase) decrease in accrued interest receivable(340)2,490 
Decrease in other assets2,276 (4,069)
Increase (decrease) in other liabilities(1,092)5,846 
Net cash provided by operating activities40,767 45,025 
Cash Flows From Investing Activities:
Originations, acquisitions and additional fundings of loans held-for-investment, net of deferred fees
(449,844)(549,705)
Proceeds from loan sales43,714  
Proceeds from repayment of loans held-for-investment581,669 815,054 
Increase in other assets, due from servicer on repayments of loans held-for-investment (4,248)(66,944)
Net cash provided by investing activities171,291 198,405 
Cash Flows From Financing Activities:
Proceeds from repurchase facilities746,713 347,261 
Principal payments on repurchase facilities(228,034)(1,139,378)
Proceeds from issuance of securitized debt obligations 685,766 
Principal payments on securitized debt obligations(457,416)(254,647)
Repayment of senior secured term loan facilities(150,000) 
Proceeds from asset-specific financings1,291 2,785 
Repayment of asset-specific financings (81,123)
Proceeds from term financing facility 349,291 
Repayment of term financing facility(129,099)(219,311)
Payment of debt issuance costs(7,398)(8,353)
Settlement of warrants to purchase common stock (7,478)
Contributions from non-controlling interests 125 
Proceeds from issuance of preferred stock, net of offering costs87,521  
Tax withholding on restricted stock and RSUs(1,736)(1,194)
Repurchase of common stock(15,714)(17,804)
Dividends paid on preferred stock(7,968)(75)
Dividends paid on common stock(40,855)(52,970)
Net cash used in financing activities(202,695)(397,105)
Net increase (decrease) in cash, cash equivalents and restricted cash9,363 (153,675)
Cash, cash equivalents, and restricted cash at beginning of period204,293 329,193 
Cash, cash equivalents, and restricted cash at end of period$213,656 $175,518 
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest$83,391 $75,818 
Cash paid for taxes$440 $607 
Noncash Activities:
Dividends declared but not paid at end of period$17,023 $13,713 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5




GRANITE POINT MORTGAGE TRUST INC.
Notes to the Condensed Consolidated Financial Statements


Note 1. Organization and Operations
Granite Point Mortgage Trust Inc., or the Company, 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 sources, including borrowing under the Company’s bank credit facilities or other asset-specific financings, issuing commercial real estate collateralized loan obligations, or CRE CLOs, and issuing other forms of secured and unsecured debt and equity securities, depending on market conditions and the Company’s view of the most appropriate funding option available for the Company’s investments. The Company is not in the business of buying or trading securities, and the only securities it owns are the retained interests from its CRE CLOs. The Company’s investment objective is to preserve the Company’s stockholders’ capital while generating attractive risk-adjusted returns over the long term, primarily through dividends derived from current income produced by the Company’s investment portfolio. The Company’s common stock is listed on the New York Stock Exchange, or NYSE, under the symbol “GPMT”. The Company operates its business in a manner that is intended to permit it to maintain its exclusion from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. The Company operates its business as one segment. The Company was 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.
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 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, 2021. In the opinion of management, all normal and recurring adjustments necessary to present fairly the financial condition of the Company at September 30, 2022, and results of operations for all periods presented, have been made. The results of operations for the three and nine months ended September 30, 2022, 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 interest and 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.
6



GRANITE POINT MORTGAGE TRUST INC.
Notes to the Condensed Consolidated Financial Statements
The Company believes the estimates and assumptions underlying its condensed consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2022. However, uncertainty over the ultimate impact COVID-19, Federal Reserve actions and geopolitical unrest will have on the global and U.S. economies generally, and the Company’s business in particular, makes any estimates and assumptions as of September 30, 2022, inherently less certain than they would be absent the current and potential impacts of these factors. 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, 2021, 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 nine months ended September 30, 2022.
Recently Issued and/or Adopted Accounting Standards
Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures
In March 2022, the Financial Accounting Standards Board, or FASB, issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, or ASU 2022-02. The intention of ASU 2022-02 is to simplify the guidance surrounding loan modifications and restructurings and to eliminate the accounting guidance related to troubled debt restructurings, or TDR. The new guidance deviates from current TDR guidance as disclosures will now be based on whether a modification or restructuring with a borrower experiencing financial difficulty results in principal forgiveness, an interest rate reduction, a significant payment delay or term extension as opposed to simply a concession. The new guidance requires disclosure by class of financing receivables, of the types of modifications, the financial effects of those modifications and the performance of those modified receivables in the last twelve months. As it relates to ASC 326-20 the Company is now allowed to use any acceptable method to determine credit losses as a result of modification or restructuring with a borrower experiencing financial difficulty. ASU 2022-02 also requires disclosure of gross write-offs recorded in the current period, on a year-to-date basis, by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022. Entities are able to early adopt these amendments and have the ability to early adopt the TDR enhancements separately from the vintage disclosures. The Company has not yet adopted this ASU and will continue to evaluate the effects of adoption.
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 the London Interbank Offered Rate, or 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 September 30, 2022, but will continue to evaluate the possible adoption of any such expedients or exceptions.
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.
7



GRANITE POINT MORTGAGE TRUST INC.
Notes to the Condensed Consolidated Financial Statements
The following tables summarize the Company’s loans held-for-investment by asset type, property type and geographic location as of September 30, 2022, and December 31, 2021:
September 30,
2022
(dollars in thousands)
Senior
    Loans (1)
Mezzanine LoansB-NotesTotal
Unpaid principal balance$3,601,341 $10 $13,826 $3,615,177 
Unamortized (discount) premium
(51)  (51)
Unamortized net deferred origination fees
(12,110)  (12,110)
Allowance for credit losses(81,921)(10)(680)(82,611)
Carrying value$3,507,259 $ $13,146 $3,520,405 
Unfunded commitments$312,649 $ $