AI Atrium Mortgage Investment Corporation

Atrium Mortgage Investment Corporation (TSX:AI) today released its unaudited financial results for the three and six month periods ended June 30, 2016.

Highlights for the quarter

• Record earnings of $6.4 million, up 10.5% from prior year
• Earnings of $0.24 per share
• Revenues of $10.7 million, up 11.1% from prior year
• Regular monthly dividend of $0.215 for the quarter (annualized rate of $0.86)
• High quality mortgage portfolio
  • 80% of portfolio in first mortgages
  • 92% of portfolio is less than 75% loan to value
  • Mortgage portfolio grew to $505 million
  • Continued focus on low risk real estate sectors
  • Exposure in Alberta reduced to below 10%, ahead of schedule

Interested parties are invited to participate in a conference call with management on Friday, July 22, 2016 at 9:00 a.m. EDT. Please refer to the call-in information at the end of this news release.

Results of operations

Atrium achieved record results in the quarter, as its assets grew to $501 million. For the three months ended June 30, 2016, mortgage interest and fee revenue aggregated $10.7 million, an increase of 11.1% from the prior year. For the six months ended June 30, 2016, mortgage interest and fees revenue aggregated $20.8 million, an increase of 8.8% from the prior year.

Net earnings for the three months ended June 30, 2016 were $6.4 million, an increase of 10.5% from the prior year. Basic and diluted earnings per common share were $0.24, for the three months ended June 30, 2016, compared with $0.24 basic and diluted per common share for the prior year. Net earnings for the six months ended June 30, 2016 were $12.6 million, an increase of 9.9% from the prior year. Basic and diluted earnings per common share were $0.47 and $0.46, respectively, for the six months ended June 30, 2016, compared with $0.47 basic and $0.46 diluted earnings per common share for the comparable period in the previous year.

The company had $501 million of mortgages receivable as at June 30, 2016, an increase of 8.8% from the prior quarter and 11.8% from the prior year end. During the quarter, $106 million of gross new mortgages were advanced, and $65 million of gross mortgages were repaid.

Atrium had previously indicated that it expected to reduce exposure to Alberta to 10% of its total mortgage portfolio by year-end, but this objective has been achieved ahead of schedule. Atrium’s exposure to Alberta has been reduced from 25 loans constituting 13.5% of the portfolio at December 31, 2015 to 18 loans and 9.9% of the portfolio at June 30, 2016.

The weighted average interest rate on the mortgage portfolio decreased slightly to 8.60% at June 30, 2016, compared with 8.66% at December 31, 2015 and 8.78% at June 30, 2015.

Interim Statements of Earnings and Comprehensive Income
(Unaudited, 000s, except per share amounts)		Three months ended						Six months ended
		June 30						June 30
		2016			2015			2016			2015
Revenue	$	10,691		$	9,626		$	20,807		$	19,118
Mortgage servicing and management fees		(1,112	)		(1,005	)		(2,178	)		(1,989	)
Other expenses		(286	)		(245	)		(557	)		(516	)
Provision for mortgage losses		(319	)		(250	)		(619	)		(612	)
Income before financing costs		8,974			8,126			17,453			16,001
Financing costs		(2,541	)		(2,306	)		(4,898	)		(4,579	)
Earnings and total comprehensive income	$	6,433		$	5,820		$	12,555		$	11,422
Basic earnings per share	$	0.24		$	0.24		$	0.47		$	0.47
Diluted earnings per share	$	0.24		$	0.24		$	0.46		$	0.46
Dividends declared	$	5,794		$	5,151		$	11,575		$	10,289
Mortgages receivable, end of period	$	500,974		$	437,039		$	500,974		$	437,039
Total assets, end of period	$	501,045		$	442,646		$	501,045		$	442,646
Shareholders’ equity, end of period	$	277,685		$	250,942		$	277,685		$	250,942

For further information on the financial results, and analysis of the company’s mortgage portfolio in addition to that set out below, please refer to Atrium’s unaudited interim financial statements and its management’s discussion and analysis for the three and six month periods ended June 30, 2016, available on SEDAR at www.sedar.com, and on the company’s website at www.atriummic.com.

Analysis of mortgage portfolio
		June 30, 2016											December 31, 2015
					Outstanding			% of								Outstanding			% of
Mortgage category		Number			amount			Portfolio					Number			amount			Portfolio
(outstanding amounts in 000s)
Low-rise residential		30		$	136,939				27.1	%			23		$	110,034				24.3	%
House and apartment		102			88,076				17.4	%			110			84,755				18.8	%
Construction		8			53,493				10.6	%			9			44,701				9.9	%
High-rise residential		7			46,324				9.2	%			9			42,245				9.4	%
Mid-rise residential		5			11,663				2.3	%			7			14,662				3.2	%
Condominium corporation		17			3,890				0.8	%			18			4,111				0.9	%
Residential portfolio		169			340,385				67.4	%			176			300,508				66.5	%
Commercial/mixed use		30			164,600				32.6	%			31			151,083				33.5	%
Mortgage portfolio		199			504,985				100.0	%			207			451,591				100.0	%

		June 30, 2016
Location of underlying property		Number of mortgages			Outstanding amount			Percentage outstanding					Weighted average loan to value					Weighted average interest rate
(outstanding amounts in 000s)
Greater Toronto Area		155		$	349,005				69.1	%				65.3	%				8.54	%
Non-GTA Ontario		14			9,855				1.9	%				65.4	%				9.25	%
Saskatchewan		1			11,989				2.4	%				71.1	%				8.50	%
Alberta		18			49,796				9.9	%				62.5	%				9.10	%
British Columbia		11			84,340				16.7	%				58.0	%				8.48	%
		199		$	504,985				100.0	%				63.9	%				8.60	%

		December 31, 2015
Location of underlying property		Number of mortgages			Outstanding amount			Percentage outstanding					Weighted average loan to value					Weighted average interest rate
(outstanding amounts in 000s)
Greater Toronto Area		152		$	292,547				64.8	%				66.1	%				8.61	%
Non-GTA Ontario		15			11,436				2.5	%				67.3	%				8.99	%
Saskatchewan		1			10,822				2.4	%				71.1	%				8.50	%
Alberta		25			61,078				13.5	%				59.7	%				8.68	%
British Columbia		14			75,708				16.8	%				62.6	%				8.83	%
		207		$	451,591				100.0	%				64.7	%				8.66	%

Conference call

Interested parties are invited to participate in a conference call with management on Friday, July 22, 2016 at 9:00 a.m. EDT 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 4, 2016) please call 1 (855) 859-2056, Conference ID 95465156.

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, please refer to regulatory filings available at www.sedar.com or Atrium’s website at www.atriummic.com.

For additional information, please contact

Robert G. Goodall                       
President and Chief Executive Officer   

Jeffrey D. Sherman
Chief Financial Officer

(416) 607-4200
ir@atriummic.com 
www.atriummic.com