Granite Point Mortgage Trust Inc.

Good morning. My name is Grant, and I will be your conference facilitator. At this time, I would like to welcome everyone to Granite Point Mortgage Trust Third Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. 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 Point. Please go ahead.

Thank you. And good morning, everyone. Thank you for joining our call to discuss Granite Point's third quarter 2021 financial results. With me on the call this morning are Jack Taylor, our president and chief executive officer, Marcin Urbasic, our chief financial officer, Steve Alport, our chief investment officer and co-head of originations, Peter Morrell, our chief development officer and co-head of originations, and Steve Plus, 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. The press release and financial tables associated with today's call, as well as our Form 10-Q, were filed yesterday with the SEC and are available in the Investor Relations section of our website. I would like to remind you that remarks made by management during this 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 subject to uncertainties that could cause actual results to differ materially from expectations. We see our filings with the SEC for discussion of some of our risks that could affect results. We do not undertake any obligations to update any forward-looking statements. We also refer to certain non-GAAP measures on this call. This information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures can be found in our earnings release and slides, which are available on our website. 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 third quarter 2021 earnings call. We have made tremendous progress since the beginning of the year to further position Granite Point to successfully execute on our strategy of investing in a diversified portfolio of floating rate first mortgage loans. Since restarting originations in the second quarter, we are on pace to deploy over $800 million of capital into new loans for the year. I am also pleased to report that we continue to further improve our funding profiles. with the recently announced pricing of our second commercial real estate CLO of the year and our fourth overall. GrantaPoint's status as an established and respected repeat issuer afforded us the opportunity to issue the $621 million transaction with attractive financing on a term-matched, non-recourse, and non-mark-to-market basis, including a two-year reinvestment period, providing us with more balance sheet and origination flexibilities. Upon the closing of this securitization, we estimate our percentage of credit non-mark-to-market funding to be over 75% of our total borrowings. Since 2018, we have sponsored four CLOs totaling $3.1 billion, and we continue to view this market as an attractive way to finance a meaningful portion of our business. It matches very well with our senior loan investment strategy, focused on high credit quality and well-diversified assets, with light to moderate transitional business plans. During the third quarter, we advanced our business on a number of fronts. We had an active quarter with respect to originations, closing eight new loans totaling over $310 million in commitments, and we currently have an additional $270 million of loans in our pipeline that have either closed or are in the process of closing. We have been prioritizing loans collateralized by high-quality properties with favorable fundamentals, such as multifamily, well-leased and well-located office, self-storage, and warehouse industrial. The market for lending on transitional properties is very active, which allows us to be highly selective and pick the most appropriate investments for our portfolio. Our overall portfolio risk rating improved during the quarter from 2.8 in the second quarter to 2.6, as the overall credit of our portfolio continues to progress positively. The better overall portfolio average risk rating reflects the progress of business plans for the collateral properties, the ongoing economic and market recovery from the pandemic, and the resulting generally improved performance of the properties securing our loans. These factors resulted in risk rating upgrades of multiple loan investments within our portfolio. We also successfully resolved two of our watch list loans. As we previously disclosed in our press release in October, During the third quarter, we resolved the $68 million Minneapolis hotel loan through a coordinated sale of the property. The resolution of the hotel loan resulted in a previously reserved for write-off and temporarily affected our distributable earnings. As part of the sale, Granite Point provided acquisition financing at a reset basis with the new hotel owner making a meaningful contribution of fresh equity in the property. We also resolved the $22 million loan on the New York mixed-use retail and office property. The borrower brought the loan current with all back interest repaid and funded additional interest reserves. At September 30, we had two remaining loans that were risk-rated 5 as we continued to work with our borrowers and evaluate a variety of potential strategies. During the quarter, we also took advantage of our stock's discounted valuation and deployed some of our excess liquidity into open market repurchases totaling 1 million shares, which meaningfully contributed to our quarter-over-quarter book value growth to $17.33 per share and helped offset some of the dilution related to the settlement of all warrants we issued as part of our term loan financing facility last year. In two transactions, one in late September and the other in early October, we settled all the outstanding warrants to purchase approximately 4.5 million shares for a net cash amount of about $32 million, which resulted in a relatively limited combined book value impact of about 3.5%. Using our excess cash to settle the warrants, rather than issue shares at a discount, helped limit the impact of book value, while at the same time it removed a potential overhang in our stock's market valuation. We have been very pleased with the performance of our platform over the course of this year, delivering solid operating results and earnings supported by income generated by our well-balanced and high credit quality portfolio. With our continued emphasis on further improving our capital structure, lowering overall cost of funds, and focus on delivering attractive risk-adjusted returns to our stockholders, we are excited about the future growth opportunities for the company as we close out 2021 and head into the new year and beyond. I would now like to turn the call over to Steve Alpart to discuss our originations, forward pipeline, and portfolio in more detail.