Atrium Mortgage Investment Corporation Announces First Quarter Results

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Toronto, Ontario–(Newsfile Corp. – May 6, 2020) – Atrium Mortgage Investment Corporation  (TSX: AI) (TSX: AI.DB) (TSX: AI.DB.B) (TSX: AI.DB.C) (TSX: AI.DB.D) (TSX: AI.DB.E) today released its financial results for the three month period ended March 31, 2020.

Highlights

  • Quarterly revenues of $17.1 million, up 8.0% from the first quarter of the prior year

  • Quarterly net income of $9.9 million, up 6.8% from the first quarter of the prior year

  • $0.23 basic and diluted earnings per share for the quarter

  • Mortgage portfolio of $746.5 million, 2.3% increase from December 31, 2019

  • High quality mortgage portfolio

    • 83.7% of portfolio in first mortgages

    • 92.0% of portfolio is less than 75% loan to value

    • average loan-to-value is 59.0%

“The operating results for Q1 were relatively strong and even after taking a provision for mortgage losses of $1.0 million this quarter, our earnings exceeded our quarterly dividend. Our increased provision for mortgage losses is consistent with the some of the largest banks in the world, and reflects the common belief that the financial impact of COVID 19 will increase in future quarters. Notwithstanding that belief, we feel that Atrium is well positioned to endure the downturn as we have very little exposure to the hardest hit sectors- retail, hospitality and long-term care/retirement homes. In addition, the weighted average loan to value of our portfolio, at 59.0%, is the lowest since Atrium went public on the TSX in September 2012. Our strategy in Q2 is to scale back lending in the short term in order to be in a position to lend actively when the real estate market emerges from the downturn,” said Rob Goodall, CEO of Atrium.

Interested parties are invited to participate in a conference call with management today, Thursday, May 7, 2020 at 4:00 p.m. ET to discuss the results. To participate or listen to the conference call live, please call 1 (888) 241-0551 or (647) 427-3415, conference ID 7489378. For a replay of the conference call (available until May 20, 2020) please call 1 (855) 859-2056, conference ID 7489378.

Results of operations

Atrium ended its first quarter of 2020 with assets of $759.5 million, and revenues of $17.1 million, an increase of 8.0% from the first quarter of the prior year. Net income for the first quarter of 2020 was $9.9 million, an increase of 6.8% from the first quarter of the prior year.

Basic and diluted earnings per common share were $0.23, for the three month period ended March 31, 2020, compared with $0.24 basic and diluted earnings per common share for the comparable quarter in the prior year.

Atrium had $743.1 million of mortgages receivable as at March 31, 2020 an increase of 2.2% from December 31, 2019. During the three month period ended March 31, 2020, $81.2 million of mortgage principal was advanced, and $64.9 million was repaid.

The weighted average interest rate on the mortgage portfolio at March 31, 2020 was 8.60%, compared to 8.81% at December 31, 2019.

In April 2020, the company collected 98% of the mortgage interest due in April, which is in line with historical collection rates.

Financial summary

Interim Consolidated Statements of Income and Comprehensive Income

(Unaudited, 000s, except per share amounts)

Three months ended
March 31
2020 2019
Revenue $ 17,057 $ 15,796
Mortgage servicing and management fees (1,777 ) (1,680 )
Other expenses (349 ) (287 )
Provision for mortgage losses (1,000 ) (400 )
Income before financing costs 13,931 13,429
Financing costs (4,067 ) (4,194 )
Net income and comprehensive income $ 9,864 $ 9,235
   
Basic earnings per share $ 0.23 $ 0.24
Diluted earnings per share $ 0.23 $ 0.24
   
Dividends declared $ 9,504 $ 8,648
   
Mortgages receivable, end of period $ 743,070 $ 706,098
Total assets, end of period $ 759,494 $ 723,225
Shareholders’ equity, end of period $ 462,249 $ 423,286

 

Analysis of mortgage portfolio

March 31, 2020 December 31, 2019
Outstanding % of Outstanding % of
Property Type Number amount Portfolio Number amount Portfolio
(outstanding amounts in 000s)
Low-rise residential 31 $ 197,052 26.4% 32 $ 216,144 29.6%
High-rise residential 17 191,777 25.7% 15 174,544 23.9%
Mid-rise residential 22 169,788 22.8% 21 160,456 22.0%
House and apartment 82 54,724 7.3% 91 66,083 9.1%
Condominium corporation 14 2,561 0.3% 14 2,659 0.4%
Residential portfolio 166 615,902 82.5% 173 619,886 85.0%
Commercial 21 130,574 17.5% 19 109,859 15.0%
Mortgage portfolio 187 746,476 100.0% 192 729,745 100.0%

 

March 31, 2020 December 31, 2019
Mortgage amount Number Outstanding
amount
% of
Portfolio
Number Outstanding
amount
% of
Portfolio
(outstanding amounts in 000s)
$0 – $2,500,000 117 $ 78,174 10.5% 123 $ 84,043 11.5%
$2,500,001 – $5,000,000 25 91,981 12.3% 25 91,707 12.6%
$5,000,001 – $7,500,000 14 86,376 11.6% 15 91,685 12.6%
$7,500,001 – $10,000,000 7 63,017 8.4% 6 53,373 7.3%
$10,000,001 + 24 426,928 57.2% 23 408,937 56.0%
187 $ 746,476 100.0% 192 $ 729,745 100.0%
March 31, 2020
        Weighted Weighted
Number of Outstanding Percentage average average
Location of underlying property mortgages amount outstanding loan to value interest rate
Greater Toronto Area 147 $ 541,121 72.5% 62.4% 8.54%
Non-GTA Ontario 22 21,446 2.9% 64.4% 8.26%
Alberta 4 15,457 2.0% 74.4% 8.79%
British Columbia 14 168,452 22.6% 46.1% 8.62%
187 $ 746,476 100.0% 59.0% 8.60%
           

 

December 31, 2019
Weighted Weighted
Number of Outstanding Percentage average average
Location of underlying property mortgages amount outstanding loan to value interest rate
Greater Toronto Area 153 $ 509,299 69.8% 64.1% 8.85%
Non-GTA Ontario 20 20,625 2.8% 57.6% 8.33%
Alberta 4 15,141 2.1% 64.0% 8.80%
British Columbia 15 184,680 25.3% 46.9% 8.77%
192 $ 729,745 100.0% 59.5% 8.81%

 

For further information on the financial results, and further analysis of the company’s mortgage portfolio, please refer to Atrium’s interim consolidated financial statements and its management’s discussion and analysis for the quarter ended March 31, 2020, available on SEDAR at www.sedar.com, and on the company’s website at www.atriummic.com.

Conference call

Interested parties are invited to participate in a conference call with management today, Thursday, May 7, 2020 at 4:00 p.m. ET to discuss the results. To participate or listen to the conference call live, please call 1 (888) 241-0551 or (647) 427-3415, conference ID 7489378. For a replay of the conference call (available until May 20, 2020) please call 1 (855) 859-2056, conference ID 7489378.

About Atrium

Canada’s Premier Non-Bank Lender™

Atrium is a non-bank provider of residential and commercial mortgages that lends in major urban centres in Canada where the stability and liquidity of real estate are high. Atrium’s objectives are to provide its shareholders with stable and secure dividends and preserve shareholders’ equity by lending within conservative risk parameters. Atrium is a Mortgage Investment Corporation (MIC) as defined in the Canada Income Tax Act, so is not taxed on income provided that its taxable income is paid to its shareholders in the form of dividends within 90 days after December 31 each year. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same position as if the mortgage investments made by the company had been made directly by the shareholder. For further information about Atrium, please refer to regulatory filings available at www.sedar.com or investor information on Atrium’s website at www.atriummic.com.

For additional information, please contact

Robert G. Goodall
President and Chief Executive Officer

Jennifer Scoffield
Chief Financial Officer

(416) 867-1053
info@atriummic.com
www.atriummic.com