Granite Point Mortgage Trust Reports Decline in Financial Metrics Amid Challenging Market Conditions

Granite Point Mortgage Trust Inc. reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company, which specializes in originating and managing senior floating-rate commercial mortgage loans, experienced a decline in key financial metrics compared to the previous fiscal period.

As of September 30, 2024, loans held-for-investment totaled $2,340.3 million, down from $2,718.5 million at the end of 2023. Net loans held-for-investment also decreased to $2,083.6 million from $2,583.8 million. The company’s total assets fell to $2,301.4 million, a decrease from $2,846.9 million, while total liabilities decreased to $1,633.5 million from $1,987.9 million. Consequently, total stockholders’ equity dropped to $667.8 million from $858.9 million.

Granite Point reported a net loss attributable to common stockholders of $34.6 million for the third quarter of 2024, compared to a loss of $24.5 million in the same quarter of 2023. The basic earnings per share for the quarter was $(0.69), down from $(0.48) year-over-year. For the nine months ended September 30, 2024, the net loss attributable to common stockholders was $179.0 million, compared to a loss of $60.6 million in the prior year.

The company’s interest income for the three months ended September 30, 2024, was $44.3 million, a decrease from $66.7 million in the same period of 2023. Interest expense also decreased to $36.6 million from $46.8 million, resulting in net interest income of $7.7 million, down from $19.9 million year-over-year. The provision for credit losses for the quarter was $(27.9) million, a decrease from $(60.8) million in the previous quarter.

Strategically, Granite Point has been active in managing its loan portfolio amid challenging market conditions. The weighted average risk rating of the loan portfolio increased to 3.1 from 2.8, indicating a deterioration in credit quality. The company resolved several loans, resulting in significant write-offs, including a $22.3 million write-off from a senior loan secured by a mixed-use property in Los Angeles.

In terms of acquisitions, Granite Point acquired two office properties through deeds-in-lieu of foreclosure in 2023, which contributed to its real estate owned (REO) operations. Revenue from REO operations increased to $3.8 million for the third quarter of 2024, up from $1.1 million in the previous quarter.

Overall, Granite Point Mortgage Trust Inc. is navigating a challenging commercial real estate environment characterized by high interest rates and increased borrower stress, impacting its financial performance and strategic decisions.