Marisa Lobo

Marisa Lobo, Senior Equity Research Analyst at UBS, inquired about Granite Point Mortgage Trust's strategy regarding new loan originations versus returning capital to shareholders, particularly given the company's stock trading at a significant discount to book value. She also asked about the current CECL reserve position, the likelihood of further reserve builds, and how current macroeconomic assumptions are factored into these assessments.

Answer

Blake Johnson, Chief Financial Officer of Granite Point Mortgage Trust, explained that the company's primary objective is to resolve existing loans and reduce leverage before resuming originations later in 2026. Regarding CECL reserves, Mr. Johnson detailed that the general reserve is updated quarterly based on economic forecasts, with a decrease in the CRE price index being a significant driver for the current quarter's increase. He added that specific reserves are based on collateral-dependent loans, and the company believes it is appropriately reserved for these assets.

Marisa Lobo asked about the economics of new originations versus returning capital to shareholders, considering the large discount to book value, and inquired about the current CECL reserve position, the likelihood of further reserve builds, and how current macroeconomic assumptions factor into that assessment.

Answer

Blake Johnson, EVP and CFO, explained that a main objective is resolving loans and decreasing leverage, with plans to return to originations later in the year. He stated that the general CECL reserve is updated quarterly based on economic forecasts, with a decrease in the CRE price index being a key driver this quarter. He added that specific reserves are based on collateral-dependent loans, and they believe they are appropriately reserved for those.