Atrium Mortgage Investment Corporation Achieves Strong Results in Second Quarter of 2018

July 26, 2018 5:20 PM EDT | Source: Atrium Mortgage Investment Corporation

Toronto, Ontario--(Newsfile Corp. - July 26, 2018) - Atrium Mortgage Investment Corporation (TSX: AI) today released its unaudited financial results for the three- and six-month periods ended June 30, 2018.

Highlights for the quarter

  • Record net income of $8.6 million for the quarter, up 26.5% from prior year

  • Record revenues of $14.6 million, up 21.1% from prior year

  • $0.24 basic and diluted earnings per share for the quarter

  • Portfolio of $710 million, up 12.2% from December 31, 2017

  • High quality mortgage portfolio

    • 80.6% of portfolio in first mortgages

    • 86.9% of portfolio is less than 75% loan to value

    • average loan-to-value is 61.0%

"We had a solid second quarter of 2018. Our mortgage portfolio grew to over $709 million, but more importantly we continued to lend conservatively, with a high percentage of first mortgages and an average loan to value of 61.0 %. Our weighted average interest rate increased for the third consecutive quarter, climbing to 8.54%, up from 8.50% at March 31, 2018, and 8.44% at December 31, 2017. On July 18, 2018, subsequent to quarter end, we successfully completed a $30 million public offering of 5.50% convertible unsecured subordinated debentures, which was upsized from the initial offer of $25 million due to strong shareholder demand," said Rob Goodall, CEO of Atrium.

Interested parties are invited to participate in a conference call with management on Friday, July 27, 2018, at 9:00 a.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. For a replay of the conference call (available until August 9, 2018) please call 1-(855)-859-2056, Conference ID 5083029.

Results of operations

Atrium achieved record results, as its assets grew to $702.7 million, and revenues grew for the quarter to a record $14.6 million, an increase of 21.1% from the prior year.

Net income for the three months ended June 30, 2018, were a record $8.6 million, an increase of 26.5% from the prior year. Basic and diluted earnings per common share were $0.24, for the three months ended June 30, 2018, compared with $0.23 basic and diluted earnings per common share, respectively, for the comparable quarter in the prior year. Net earnings for the six months ended June 30, 2018, were $28.0 million, an increase of 16.5% from the prior year. Basic and diluted earnings per common share were $0.48 and $0.47, respectively, for the six months ended June 30, 2018, compared with $0.47 basic and diluted earnings per common share for the comparable period in the previous year.

The company had $701.6 million of mortgages receivable as at June 30, 2018, an increase of 11.9% from the December 31, 2017. During the quarter, $70.3 million of mortgages were advanced, and $21.2 million of mortgages were repaid.

The weighted average interest rate on the mortgage portfolio increased to 8.54% at June 30, 2018, compared with 8.44% at December 31, 2017 and 8.42% at June 30, 2017.

Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited, 000s, except per share amounts)

Financial summary   Three months ended
June 30
    Six months ended
June 30
 
 
    2018     2017     2018     2017  
Revenue $  14,616   $  12,069   27,990   $ 24,035  
Mortgage servicing and management fees   (1,610 )   (1,292 )   (3,064 )   (2,584 )
Other expenses   (317 )   (303 )   (569 )   (588 )
Provision for mortgage losses   (400 )   (745 )   (700 )   (1,048 )
Income before financing costs   12,289     9,729     23,657     19,815  
Financing costs   (3,684 )   (2,927 )   (7,125 )   (5,855 )
Net income and comprehensive income $  8,605   $  6,802   16,532     13,960  
                         
Basic earnings per share $  0.24   0.23   0.48   $ 0.47  
Diluted earnings per share $  0.24   0.23   0.47   $ 0.47  
                         
Dividends declared $  8,140   $  6,635   15,817   $ 13,039  
                         
Mortgages receivable, end of period $  701,568   $  567,895   701,568   $ 567,895  
Total assets, end of period $  702,709   $  568,663   702,709   $ 568,663  
Shareholders’ equity, end of period $  382,911   $  314,683   382,911   314,683  

 

Analysis of mortgage portfolio                              
(dollars in 000s)                              
    June 30, 2018     December 31, 2017  
    Number     Outstanding
amount
    % of
Portfolio
    Number     Outstanding
amount
    % of
Portfolio
 
Mortgage category
Low-rise residential   32   $  209,334     29.5%     36   $  234,343     37.1%  
House and apartment   104     104,614     14.7%     120     86,287     13.6%  
Mid-rise residential   12     99,840     14.1%     4     31,471     5.0%  
Construction   9     80,410     11.3%     8     64,828     10.3%  
High-rise residential   6     28,047     4.0%     7     44,949     7.1%  
Condominium corporation   14     2,713     0.4%     14     2,887     0.4%  
   Residential portfolio   177     524,958     74.0%     189     464,765     73.5%  
Commercial   24     184,636     26.0%     27     167,622     26.5%  
   Mortgage portfolio   201     709,594     100.0%     216     632,387     100.0%  

 

    June 30, 2018  
    Number of
mortgages
    Outstanding
amount
    Percentage
outstanding
    Weighted
average
loan to value
    Weighted
average
interest rate
 
 
Location of underlying property
(outstanding amounts in 000s)                              
Greater Toronto Area   151   $  428,613     60.4%     62.3%     8.65%  
Non-GTA Ontario   25     17,402     2.5%     67.0%     8.50%  
Saskatchewan   2     19,798     2.8%     100.0%     7.90%  
Alberta   4     16,931     2.4%     54.1%     8.92%  
British Columbia   19     226,850     31.9%     55.3%     8.36%  
    201   $  709,594     100.0%     61.0%     8.54%  
                               
    December 31, 2017  
    Number of
mortgages
    Outstanding
amount
    Percentage
outstanding
    Weighted
average
loan to value
    Weighted
average
interest rate
 
 
Location of underlying property
(outstanding amounts in 000s)                              
Greater Toronto Area   159   $  397,293     62.8%     62.5%     8.51%  
Non-GTA Ontario   35     26,383     4.2%     65.9%     8.54%  
Saskatchewan   2     17,107     2.7%     100.0%     8.06%  
Alberta   5     22,518     3.6%     59.4%     8.87%  
British Columbia   15     169,086     26.7%     54.7%     8.24%  
    216   $  632,387     100.0%     61.5%     8.44%  

 

For further information on the financial results, and further analysis of the company's mortgage portfolio, please refer to Atrium's unaudited interim consolidated financial statements and its management's discussion and analysis for the three- and six-month periods ended June 30, 2018, 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 on Friday, July 27, 2018 at 9:00 a.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. For a replay of the conference call (available until August 9, 2018) please call 1-(855)-859-2056, Conference ID 5083029.

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

info