Granite Point Mortgage Trust Inc.

Good morning. My name is Diego, and I'll be your conference facilitator. At this time, I would like to welcome everyone to the Granite Point Mortgage Trust's fourth quarter and full year 2022 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 session. Please note, today's call is being recorded. I would now like to turn the call over 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 fourth quarter and full year 2022 financial results. With me on the call this morning are Jack Taylor, our President and Chief Executive Officer, Marcin Urbacek, 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 Plouft, our Chief Operating Officer. After my introductory comments, Jack will provide a brief recap of market conditions and review of our current business activities. The eval part 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 were filed yesterday with the SEC and are available in the investor relations section of our website. We expect to file our foreign 10-K next week. 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. Please see our filings with the SEC for a discussion of some of our risks that could affect results. We do not undertake any obligation to update any forward-looking statements. We will also refer to non-GAAP measures on this call This information is not intended to be considered in isolation or a substitute for the financial information presented in accordance with GAAP. A reconciliation of those 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'll now turn the call over to Jack.

Thank you, Chris, and good morning, everyone. We would like to welcome you to our fourth quarter and full year 2022 earnings call, And thank you for joining us today. Despite the challenging market backdrop and the Fed's dramatic actions in raising interest rates, we successfully navigated this unstable environment and accomplished many of our objectives over the course of 2022. Earlier in the year, we opportunistically grew our equity base through the $87.5 million add-on preferred equity offering and repaid the remainder of our higher-cost term loan borrowings. We refinanced two of our legacy delevered funding vehicles, releasing a substantial amount of capital, further strengthening our liquidity position. During the second half of the year, we closed on two new credit facilities with an aggregate borrowing capacity of up to $300 million, which are designed to fund performing, sub-performing, and non-performing loans on a non-mark-to-market basis. These facilities highlight our ability to add to our already diverse funding sources and provide us with more asset management and liquidity flexibility during the current volatile environment. In anticipation of potential macroeconomic challenges and consistent with our conservative approach to managing our business, early in the first half of 2022, we shifted our business objectives from originating new loans and growing our portfolio to preserving our liquidity to further bolster our balance sheet. For example, We further emphasized proactive asset management, working with our borrowers and driving loan repayments through active dialogue well in advance of loan maturities. This contributed to a healthy volume of loan repayments of about $1 billion over the course of the year. These and other actions allowed us to strengthen our balance sheet while also redeeming the $144 million of convertible notes that matured in December with cash on hand. without needing to access the funds in the capital markets, which were quite difficult at the time. As we have said in the past, we expect the commercial real estate and capital markets environment to remain challenging and uncertain in the nearer term. It remains unclear when the Fed will ultimately stop raising short-term interest rates or for how long they will keep them elevated, when the market environment will stabilize, or when the commercial real estate markets will improve. While we continue to see headwinds in the office sector, they are impacting properties and markets very unevenly. In our portfolio, the biggest impact has been on those markets and properties more affected by the pandemic and work-from-home trends, and where a high-quality, well-located property with a strong sponsor has encountered a very tough leasing market. These trends, coupled with rising interest rates, have resulted in a few borrowers electing to stop funding additional equity However, these loans have been very much the exception. In general, we are seeing ongoing commitment by our borrowers to their properties and the loan assets in our portfolio. We recognize and are addressing the challenges in the office sector, and consistent with our intermediate term macro views, we have meaningfully increased our CECL reserves over the last couple of quarters to about 2.4% of our portfolio commitment as of the end of 2022. In the nearer term, we will continue to manage our business in a conservative manner, protect our balance sheet, and maintain lower leverage, while emphasizing liquidity and collaboratively working with our borrowers to maximize outcomes. As we have seen during previous global dislocations, the U.S. commercial real estate market has always been viewed as a compelling place to invest over the long term and has attracted significant amounts of capital over time. Currently, a lot of capital is on the sidelines and is waiting for more intermediate clarity and capital market stability. We believe that our significantly delevered balance sheet, combined with our team's proven expertise, will allow us to both mitigate the effects on our portfolio of the market uncertainty and ultimately take advantage of attractive new market opportunities as we normalize our levels of leverage. We believe that our strategy of targeting middle market and moderately leveraged U.S. commercial real estate loans with an average loan size of about $37 million with significant borrower equity cushion is more resilient in a market like this, as our loan sizes are suited to a broader universe of potential refinancing lenders and property buyers. Given the environment, we intend to maintain our cautious stance while drawing on the broad expertise and experience of our team to successfully navigate the challenges as we have done over our long careers in real estate lending. I would now like to turn the call over to Steve Halpert to discuss our portfolio activities in more detail.