Banco BV Reports Q1 Net Income of R$480mln, ROE at 16%.

Banco Votorantim (BV) reported a net profit of R$480 million in Q1, a 49% increase YoY, with a return on equity (ROE) of 16%. The bank's loan portfolio expanded 2.1% YoY to R$90.4 billion. The financing for used light vehicles, a segment in which BV is a leader, increased 1.8%, and the cost of credit fell 8% to R$868 million. The bank's Basileia index was 15.4% at the end of March.

Granite Point Mortgage Trust Inc (GPMT) reported its Q1 2025 earnings, highlighting the company's ability to navigate market challenges while maintaining stability in its operations. The company's total loan portfolio commitments stood at $2 billion, with an outstanding principal balance of $1.9 billion [1]. Despite the challenges, GPMT successfully resolved two non-accrual loans totaling $97 million, demonstrating its commitment to managing risk [1].

The company's weighted average stabilized loan-to-value (LTV) ratio at origination was 64%, while the realized loan portfolio yield was 6.8% for Q1, increasing to 8.5% excluding non-accrual loans [1]. Loan repayments, paydowns, and resolutions totaled $172 million in Q1, resulting in a net loan portfolio reduction of $161 million [1]. However, GPMT reported a GAAP net loss of $10.6 million, or negative $0.22 per basic common share, and a distributable loss of $27.7 million, or negative $0.57 per basic common share [1].

Despite the losses, GPMT exhibited confidence in its valuation by repurchasing approximately 900,000 of its common shares and extending all three of its repurchase facilities for approximately one year [1]. The company's loan portfolio's weighted average risk rating improved slightly to 3.0 with no new negative credit migration during the quarter [1]. Additionally, GPMT anticipates returning to new loan originations later in 2025, which could enhance profitability [1].

The company's book value per common share declined by about $0.23 from the previous quarter, while the CECL reserve stood at $180 million, or $3.72 per common share [1]. Unrestricted cash at the quarter end was $86 million, with a total leverage of 2.2 times [1]. However, ongoing uncertainty in the commercial real estate market due to recent tariff announcements and potential recession concerns persists [1]. GPMT has three remaining non-accrual loans rated 5 with a balance of about $223 million, indicating ongoing credit challenges [1].

During the earnings call, John Taylor, President and CEO, explained that the company is currently focused on preserving liquidity and has been directing available liquidity towards stock buybacks. They have authorization for further buybacks and intend to balance this with new originations later in the year [1]. Stephen Alpart, Chief Investment Officer, stated that the majority of the portfolio is performing well, with no negative credit migration in the first quarter [1]. Blake Johnson, CFO, clarified that the $37 million in write-offs includes $22 million related to one resolution and approximately $15.4 million related to another [1].

In summary, GPMT's Q1 2025 earnings report showcased the company's resilience in navigating market challenges while maintaining operational stability. The company's ability to resolve non-accrual loans and extend repurchase facilities demonstrates its commitment to risk management and shareholder value. However, ongoing credit challenges and market uncertainties will require continued vigilance.

References:
[1] GuruFocus - Granite Point Mortgage Trust Inc (NYSE:GPMT) Q1 2025 Earnings Call Highlights Navigating Challenges - https://ca.investing.com/news/company-news/granite-point-mortgage-trust-inc-gpmt-q1-2025-earnings-call-highlights-navigating-challenges--4002166