Granite Point Mortgage Trust Inc.

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

Thank you, and good morning, everyone. Thank you for joining our call to discuss Granite Point's second 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 Alport, our Chief Investment Officer and Co-Head of Originations, Peter Murau, our Chief Development Officer and Co-Head of Originations, and Steve Pluss, our Chief Operating Officer. After my introductory comments, Jack will review our current business activities and provide a brief recap of market conditions. Steve Alpert will discuss our portfolio, and Marcin will highlight key items from our financial results. 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 this call is being webcast 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 slides 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 will now turn the call over to Jack.

Thank you, Chris, and good morning, everyone. We would like to welcome you all to our second quarter 2021 earnings call. We hope everyone continues to stay healthy and safe. Our business delivered another quarter of solid operating results as we continue to successfully execute on our strategy of originating and managing a well-diversified portfolio of first mortgage loans generating attractive returns. Yesterday afternoon, we reported second quarter distributable earnings of $0.29 per share, which again comfortably covered our common stock dividend of $0.25 per share. Our earnings continue to benefit from the in-the-money LIBOR floors on our loans and the strength of our portfolio. In addition, our book value moderately increased to $17.27 per share, partially benefiting from the share repurchases executed during the quarter. We had an active quarter across our business with respect to both assets and liabilities. During the second quarter, we closed seven new loans, totaling over $200 million of commitments. and currently have an additional 280 million of loans that have either closed or are expected to close in the near term. To date, we have originated loans secured primarily by multifamily properties. We have also funded well-leased office properties and are pursuing loans secured by industrial warehouse, self-storage, life sciences, and others. In addition to our existing pipeline of committed loans, We have been actively sourcing new investment opportunities with the goal of deploying our excess liquidity and growing our portfolio, which should help improve our earnings and dividends over time. We are currently actively reviewing several billion dollars of lending opportunities, the scope of which allows us to be selective and pick the most interesting investments for our portfolios. The market for lending on transitional commercial real estate assets remains very active with significantly improved transaction volumes supported by robust levels of available liquidity and well-functioning capital markets. Investors are increasingly enthusiastic about deploying both equity and debt capital and adding to their exposure to U.S. commercial real estate. Granite Point benefits from this increased market activity on both sides of our balance sheet. The loan repayments we realize in our portfolio generally provide us with additional liquidity for new investments, and we are also able to further improve our funding profile by taking advantage of the favorable capital markets conditions. During the second quarter, the pace of our repayments accelerated, resulting in over $420 million in total volume, including $134 million of hotel loan payoffs, which contributed to the decline in our portfolio balance and earnings quarter over quarter. as repayments occurred in advance of our new originations. We view this level of payoffs as elevated and would anticipate it to moderate for the rest of the year. With respect to our borrowings, during the second quarter, we closed our third commercial real estate CLO, an $824 million transaction, and also extended maturities on some of our financing facilities. Our CLO, at attractive cost of funds and leverage, increased our proportion of non-mark-to-market borrowings to about 75%, achieving our targeted levels. We believe the CLO market remains very favorable for well-established and repeat issuers such as Granite Point and is a key component of our balance sheet management strategy. As we originate new loans and grow our portfolio, we intend over time to be an active participant and opportunistically access the commercial real estate CLO market. as we execute on our strategy of maintaining a well-diversified, term-matched funding profile, emphasizing non-mark-to-market and non-recourse financing sources. We are very pleased with the performance of our business through the first half of the year. We have delivered solid earnings driven by the attractive income generated by our well-balanced and defensively positioned investment portfolio, and supported by the benefits from the LIBOR floors embedded in our loans. We have improved our capital structure and will continue to do so to further reduce our funding costs and provide us with more balance sheet flexibility. Refinancing our existing term loan remains a strategic priority. Given the improving market fundamentals and increased transaction volume, our healthy level of liquidity, and the strength of our origination platform, we are well positioned to take advantage of ample investment opportunities and grow our business while delivering attractive risk-adjusted results to our stockholders over time. Supported by our highly experienced and talented team, we intend to continue to expand our already strong forward pipeline to support our earnings and dividends, while also further rationalizing the mix of our funding sources. As an internally managed REIT, we believe we have the opportunity to realize meaningful economies of scale benefits embedded in our business as we grow over time. I would now like to turn the call over to Steve Alpart to discuss our originations, forward pipeline, and portfolio in more detail.