Granite Point Mortgage Trust Inc. (GPMT) Earnings Call Transcript & Summary

Welcome to Granite Point Mortgage Trust's 2021 Annual Meeting of Stockholders. I would now like to turn the call over to Steve Kasnet, Chair of the Board. Please go ahead.

Good morning, ladies and gentlemen. My name is Stephen Kasnet, and I'm the Chair of the Board of Directors of Granite Point Mortgage Trust. On behalf of the entire Board of Directors and the management team of Granite Point, it is my pleasure to welcome you to our 2021 Annual Meeting of Stockholders. Thank you for taking the time to join the meeting, especially during the challenging times that we continue to face. During today's meeting, our common stockholders as of the record date for this meeting will be able to vote their shares and submit questions online at virtualshareholdermeeting.com/GPMT2021. The polls for voting on each of the items of business are currently open and will remain open until I announce their closure later in the meeting. If you have previously voted by proxy and do not wish to change your vote, your vote will be cast as you previously instructed, and no further action is needed. If you are a record holder and wish to change your vote or have not already cast your vote using our electronic voting system, you may cast your vote online at the virtual meeting website. Access to the meeting website requires the control number listed on the notice of availability of proxy materials that you received prior to this meeting. If you do not indicate the number of shares you intend to vote on your electronic ballot, your electronic ballot will automatically represent all shares that you are entitled to vote at this meeting. Stockholders who are entitled to vote also have the ability to submit questions online. Our Board of Directors, executive officers and representatives from our registered public accounting firm, Ernst & Young, are attending today's virtual meeting and will be available to respond to questions after the formal meeting has been adjourned. I would now like to take a moment to introduce the members of our Board of Directors who are joining us for this webcast: Jack Taylor, who is also our President and Chief Executive Officer; Devin Chen; Tanuja Dehne; Reid Sanders and Hope Woodhouse. I would like to thank Tino Kamarck for his service as a Director of Granite Point from the time we commenced trading as a public entity. He informed the company that he will not be standing for reelection to our Board, and we wish him well in his future endeavors. In addition to Jack Taylor, we also have several other members of the senior management team with us today, including Marcin Urbaszek, our Chief Financial Officer; Steve Alpart, our Chief Investment Officer and Co-Head of Originations; Peter Morral, our Chief Development Officer and Co-Head of Originations; Steve Plust, our Chief Operating Officer; Mike Karber, our General Counsel and Secretary; and Chris Petta from our Investor Relations department. We are also pleased to have with us today Reece Devlin and [ Dee Lavreau ], who are representing our independent registered public accounting firm, Ernst & Young. The Board of Directors has appointed [ Kristine Sundberg ], a representative of Broadridge Financial Solutions, to serve as the Inspector of Elections at this meeting. Ms. [ Sundberg ] executed the oath of her office prior to the start of the meeting. A detailed agenda and the rules of conduct for this meeting are available on the meeting website. In order to ensure an orderly meeting, today's proceedings will be conducted pursuant to the requirements set forth in the rules of conduct. I would now like to introduce Granite Point's Secretary, Mike Karber, who will serve as Secretary of this meeting. Mike, you may proceed with the report of the Secretary.

Thank you, Steve. Today's meeting will take place as described in the agenda. After the formal meeting has been adjourned, we will then provide a brief company update, followed by a question-and-answer session to address appropriate stockholder questions regarding the business and operations of the company submitted via the meeting website. I note for the record that the company has received an affidavit certifying that the notice of meeting, the accompanying proxy materials and our annual report on Form 10-K were mailed on or about April 16, 2021, to stockholders of record at the close of business on April 1, 2021, which is the record date for this meeting. I also note for the record that copies of the notice of meeting, the proxy statement and the form of proxy were previously filed with the SEC and are available on the meeting website. In addition, I have been advised by the Inspector of Elections that at least the majority of the company's issued and outstanding shares entitled to vote are represented at today's meeting. Finally, some of our comments and responses to questions may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties. The risks, uncertainties and assumptions that could affect these forward-looking statements include risks that are described in our SEC filings. I'd also like to point out that the information presented at this meeting may include references to amounts that are expressed on a non-GAAP basis. A reconciliation of such non-GAAP amounts to GAAP and other information related to these non-GAAP measures is available on our website at www.gpmtreit.com.

Thank you, Mike. A quorum is present, and the meeting is duly convened. The report of the Secretary on the presence of a quorum is accepted. I direct that the affidavit of distribution be made as part of the minutes of this meeting. We may now proceed to transact the business for which this meeting has been called. Since there were no shareholder nominations or proposals filed in advance of this meeting, the only matters on which the stockholders at this meeting are voting are: one, the election of 6 directors; two, an advisory vote on executive compensation; and three, the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2021. I will now address each of these proposals separately. As a reminder, the voting polls are currently open and will remain open until I announce their closure later in the meeting. The first proposal we will consider is the election of 6 directors. As indicated in the company's proxy statement, the Board of Directors has nominated each of the Director nominees to serve as a director until our 2022 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified. A majority of all votes cast at this meeting for a director nominee is sufficient to elect a director. The second proposal is an advisory vote on executive compensation. SEC rules require public companies to provide stockholders with periodic advisory or nonbinding votes on executive compensation practices. As described in our proxy statement, the independent directors of our Board successfully negotiated the internalization of our management function with our former manager. The internalization was completed on December 31, 2020. Throughout 2020, Granite Point was externally managed by its former manager, pursuant to a management agreement and, therefore, did not have any employees prior to the internalization. As a result, other than the onetime cash bonuses paid by Granite Point to our executive officers in connection with the internalization in accordance with the terms of their employment agreements in 2020, our executive officers' compensation was comprised solely of cash compensation paid to them directly by our former manager and equity awards granted to them pursuant to our equity incentive plan. We are required by the SEC rules to seek an advisory vote from our stockholders to approve the compensation of the executive officers listed in our proxy statement. Similar to last year, we are asking stockholders to vote for the adoption of the following advisory resolution. Resolved, that the stockholders of the company approve on a nonbinding advisory basis, the compensation paid to the company's executive officers as disclosed in the company's proxy statement for the 2021 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis and related narrative discussions in the proxy statement. A majority of all the votes cast at this meeting is sufficient to approve this proposal. However, the vote is advisory only and is not binding on Granite Point. The final proposal is the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021. Although ratification is not required by our bylaws or otherwise, we are submitting the selection of Ernst & Young to our stockholders for ratification as a matter of good corporate practice. Representatives from Ernst & Young are present and available to answer appropriate questions. The majority of all the votes cast at this meeting is sufficient to ratify the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm. Any stockholder who has not yet voted or wishes to change their vote should do so now by clicking on the voting button on the meeting website and following the instructions there. Stockholders who have sent in proxies or voted via telephone or the Internet and do not want to change their vote do not need to take any further action. I will pause now for a moment to allow you to finalize your votes. [Voting]

Now that everyone has had the opportunity to vote, I declare the polls for the 2021 Granite Point Trust Annual Meeting of Stockholders closed and direct the Inspector of Elections to tabulate the ballots. Please wait one moment while we confirm the preliminary results. I've been advised by the Inspector of Elections that based on the preliminary count, each of the 6 Director nominees has been elected. The advisory resolution related to the compensation of our executive officers has been approved. And the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, has been ratified. The Inspector of Elections will furnish the Secretary with a written report of the final vote count with respect to the matters voted on today, which shall be included in the minutes of this meeting. The meeting is formally adjourned. I would now like to invite Jack Taylor, Granite Point's President and Chief Executive Officer and a member of the Board of Directors, to provide an update on Granite Point. Jack, the floor is yours.