Granite Point Mortgage Trust Inc.

Good afternoon. My name is Diego, and I will be your conference facilitator. At this time, I would like to welcome everyone to Granite Point Mortgage Trust's third quarter 2023 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. Please note, today's call is being recorded. I would now like to turn over the call to Chris Peta with Investor Relations for Granite Point.

Thank you, and good afternoon, everyone. Thank you for joining our call to discuss Granite Point's third quarter 2023 financial results. With me on the call this morning are Jack Taylor, our President and Chief Executive Officer, Marcin Urbacik, 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 Plus, our Chief Operating Officer. After my introductory comments, Jack will provide a brief recap of market conditions and review our current business activities. Steve Alport will discuss our portfolio, and Marcin will highlight key items from our financial results and capitalization. The press release, financial tables, and earnings supplemental associated with today's call were filed yesterday with the SEC and are available in the investor relations section of our website, along with our form 10-Q. 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 FCC for discussion of some of the risks that could affect results. We do not undertake any obligation 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 a substitute for financial information presented in accordance with GAAP. And reconciliation of these non-GAAP financial measures for the most comparable GAAP measures can be found in our earnings release and slides, which are available on our website. We'll now turn the call over to Jack.

Thank you, Chris, and good afternoon, everyone. We would like to welcome you and thank you for joining us for Granite Point's third quarter 2023 earnings call. We are happy to report ongoing progress on our business objectives as we continue to proactively manage our assets and liabilities in light of the uncertain market environment. The continued strength of the U.S. economy, supported by the strong labor market and consumer spending, has surpassed many expectations, notwithstanding the dramatic rise in interest rates. Despite this positive economic backdrop, there remains a high degree of uncertainty about the macroeconomy, and the commercial real estate market remains challenged. High interest rates and uneven fundamental performance across property types contribute to limited market liquidity and a greatly reduced overall volume of property sales and refinancing transactions. Accordingly, we intend to maintain our conservative position, emphasizing the maintenance of higher liquidity and one of the lowest leverage ratios in the sector, as we believe that property values and liquidity will continue to be under pressure. Our granular and over 99% senior floating rate loan portfolio in general continues to produce attractive returns benefiting from higher rates and diversification across 77 investments and mostly middle market loans. In general, our borrowers remain supportive of their properties and continue to protect their investments. Although transaction volumes are down across the commercial real estate market, reflecting higher cost of capital and associated reset property values, Our portfolio continues to experience repayments across various property types and asset resolutions. Since the beginning of the year, we have realized over $500 million in repayments, paydowns, and sales, many of which were from loans that were previously modified to give borrowers more time to progress on their business plans. The pace of repayments remains volatile and uncertain, but we have been pleased with the trends and will continue to manage our business accordingly. The run rate operating results generated by our portfolio over the last few quarters have generally been around our dividend level, including the third quarter pre-loss distributable earnings of 18 cents per share, which was reduced by a couple of pennies per share of one-time items, which Marcin will discuss later. Our gap results include additional CECL reserves mainly related to the five-rated loans and reflect the ongoing market challenges, especially for office properties in certain markets, that have been particularly affected by work from home trends and other factors. The eval part will discuss the progress we are making on our five rated loans. Our overall CECL reserve increased in the third quarter to about 4.9% of total commitments from about 4.1% last quarter. As we discussed on prior calls, our defensively positioned balance sheet with a diversified funding mix, low leverage and higher liquidity, provides optionality in an uncertain market. As planned, we redeemed the $132 million convertible note that matured in early October with cash, leaving no corporate debt maturities remaining. In less than a year, we have repaid over 275 million of corporate debt. We are very pleased to have accomplished that without needing to access the capital markets during this time of elevated volatility and uncertainty. We believe this outcome further illustrates the liquidity embedded in our portfolio as shown by the level of repayment, and the effectiveness of our strategy of proactively lowering our leverage during times of market dislocations, which creates opportunities to increase financing levels on certain assets later. Since quarter end, we are happy to report that consistent with this strategy, we have successfully upsized our borrowings on our JPMorgan facility in October, generating an additional $75 million in proceeds with the potential to increase them up to $100 million, illustrating our lending partners' continued support of our business and desire to expand those relationships as we navigate this challenging environment. Our priorities in the near to medium term remain centered around maintaining higher liquidity, working with borrowers to facilitate repayments, and resolving our non-accrual loans, giving their meaningful impact on our profitability, which is estimated to be an over $6 million drag on interest income during the third quarter. We are actively pursuing a range of resolutions for these loans, each of which may have a different strategy depending on individual circumstances as we determine the best course of action to maximize the economic outcome for our shareholders over the long term. We believe that these actions over time will help improve our run rate profitability and close the gap between our stock price and our book value. They will also provide us with great opportunities to redeploy our capital into attractive investments and meaningfully grow our portfolio as the real estate market stabilizes. I would now like to turn the call over to Steve Halpert to discuss our portfolio activities in more detail.