Granite Point Mortgage Trust Inc.

Good morning. My name is Sarah, and I will be your conference facilitator. At this time, I would like to welcome everyone to Granite Point Mortgage Trust's first quarter 2021 financial results conference call. All participants will be on a listen-only mode. After the speaker's remarks, there will be a question and answer period. I would now like to turn the call to Chris Petta with Investor Relations for Granite Point.

Thank you, and good morning, everyone. thank you for joining our call to discuss Granite Point's first quarter 2021 financial results. With me on the call this morning are Jack Taylor, our President and Chief Executive Officer, Marcin Urbacic, our Chief Financial Officer, Steve Alpark, our Chief Investment Officer and Co-Head of Originations, Peter Morrell, our Chief Development Officer and Co-Head of Originations, and Steve Kluss, our Chief Operating Officer. After my introductory comments, Jack will review our current business activities and provide a brief recap of market conditions. Steve Appart will discuss our portfolio, and Marcin will highlight key items from our financial results. The press release and financial tables associated with today's call, as well as our Form 10-Q, were filed yesterday with the SEC. If you do not have a copy, you may find them on our website or on the SEC's website at sec.gov. In our earnings release and slides, which are now posted in the investor relations section of our website, we have provided a reconciliation of GAAP to non-GAAP financial measures. We urge you to review this information in conjunction with today's call. I would also like to mention that this call is being bypassed and may be accessed on our website in the same location. Before I turn the call over to Jack, I would like to remind you that remarks made by management during this conference call and the supporting slide may include forward-looking statements, which are uncertain and outside of the company's control. Forward-looking statements reflect our views regarding future events and are typically associated with the use of words such as anticipate, expect, estimate, and believe, or other similar expressions. We caution investors not to rely unduly on forward-looking statements. They imply risks and uncertainties, and actual results may differ materially from expectations. We urge you to carefully consider the risks described in our filings with the SEC, including our most recent 10-K and 10-Q reports, which may be obtained on the SEC's website at sec.gov. We do not undertake any obligation to update or correct any forward-looking statements if later events prove them to be inaccurate. I'll now turn the call over to Jack.

Thank you, Chris, and good morning, everyone. We would like to welcome you all to our first quarter 2021 earnings call. We hope everyone continues to stay healthy and safe. The first quarter of 2021 was Granite Point's first as an internally managed REIT, and we are excited to report solid performance across our business. Yesterday afternoon, we reported strong distributable earnings of $0.38 per share, well in excess of our dividend of $0.25 per share. This was accomplished while we have continued to maintain an elevated level of liquidity on our balance sheet. Our earnings benefited from the in-the-money LIBOR floors on our loans, the continued strong credit performance of our portfolio with 100% collections of contractual interest, and lower operating expenses. In March, our board decided to increase our dividend from $0.20 to $0.25 per share, and we believe the dividend has more room to grow as we rationalize our liabilities and grow our portfolio over time. The results generated by our business over the past year illustrate the resilience of our strategy and our team across various market cycles. With the improved tone in the real estate and capital markets, towards the end of the first quarter, we restarted our new loan originations and continue to build our pipeline of attractive investment opportunities, benefiting from the strong reputation Granite Point has established in the lending market. Commercial real estate transaction volume has been steadily increasing, and the lending market is now very active. Despite the level of competition among lenders, we believe the returns currently available on new investments remain compelling and similar to pre-pandemic levels. Over the course of the year, and assuming a stable market environment, we will grow our pipeline of new originations to match and then exceed the volume of portfolio repayments as we redeploy our excess capital. Along with building our pipeline and growing our portfolio, we continue to execute on our strategy to further diversify our financing mix. As previously discussed during the first quarter, we closed a new-term financing facility with Goldman Sachs, which provided us with about $349 million of term match and credit non-market-to-market funding. As a result, we currently have no outstanding borrowings on our Goldman repurchase facility and are negotiating a new term for this facility. Additionally, and as announced earlier this week, we priced our third commercial real estate CLO, which is anticipated to close on or around May 14th. This $824 million transaction achieved very attractive terms with an 83.25% advance rate and a significantly improved cost of funds of LIBOR plus 162 basis points for transaction costs, while financing 27 of our loans on a non-mark-to-market, term-matched, and non-recourse basis. We have consistently viewed the CLO market as a highly beneficial component of our diversified funding sources and are very pleased to have accessed this market again. Upon closing of our CLO, the percentage of our credit non-mark-to-market financing will increase to about 70% of our loan-level borrowings, which achieves our previously discussed targeted goal of two-thirds. Since 2018, we have issued three CLOs totaling about $2.5 billion and have established GranitePoint as a well-respected repeat issuer in this market, which we intend to opportunistically access over time as we grow our portfolio and continue to actively manage our liabilities. GranitePoint is off to a great start to 2021 with strong earnings supported by the resilient credit characteristics of our portfolio, the benefits from the LIBOR floors embedded in our loans, and our improving capital structure. We will continue to actively manage our investments and any potential credit events, which we believe will be relatively isolated, though not unexpected considering the pandemic's impact on the real estate market as certain loans are resolved. Given the improving economic and real estate market fundamentals, we are optimistic about our performance for the rest of the year and beyond. We believe we have positioned our company well to take advantage of emerging investment opportunities in the current environment and for future growth. We will continue on our strategy of delivering attractive risk adjusted returns while providing meaningful downside protection by originating floating rate senior first mortgage loans on institutional quality properties owned by high quality sponsors with value add business plans. Over time, we will emphasize redeploying our excess liquidity, to support our earnings and dividends, rationalizing the mix of our liabilities while further diversifying our funding sources and achieving greater economies of scale as we grow our business as an internally managed REIT. I would now like to turn the call over to Steve Alpart to discuss our portfolio and recent activities in more detail.