Atrium Mortgage Investment Corporation Announces Strong Second Quarter Results with Record Mortgage Portfolio Balance

Rhea-AI Summary

Atrium Mortgage Investment (TSX: AI) reported strong second quarter results for the period ended June 30, 2024. Highlights include:

• Quarterly earnings per share of $0.26
• Net income of $11.5 million
• Record mortgage portfolio of $907.8 million
• 96.8% of portfolio in first mortgages
• 89.5% of portfolio with loan-to-value less than 75%

Despite challenging real estate market conditions, Atrium increased its mortgage portfolio to a record $908 million. The company amended its credit facility, increasing the maximum available amount to $340 million. CEO Rob Goodall emphasized the company's focus on high-quality opportunities and defensive lending in preferred sectors.

Positive

• Record mortgage portfolio balance of $907.8 million
• Quarterly earnings per share of $0.26, above regular dividend rate
• 96.8% of portfolio in first mortgages, indicating lower risk
• 89.5% of portfolio with loan-to-value less than 75%
• Increased credit facility to $340 million, improving liquidity
• Revenue increased by 5.9% from the second quarter of the prior year

Negative

• Net income decreased by 20.1% compared to the same quarter last year
• Allowance for mortgage losses increased to 3.23% of the gross mortgage portfolio, up from 2.53%
• Weighted average interest rate on the mortgage portfolio decreased to 10.93% from 11.42%
• Book value per share decreased to $11.06 from $11.19 at the end of 2023

Toronto, Ontario--(Newsfile Corp. - August 8, 2024) - Atrium Mortgage Investment Corporation (TSX: AI) (TSX: AI.DB.D) (TSX: AI.DB.E) (TSX: AI.DB.F) (TSX: AI.DB.G) today released its financial results for the three and six months period ended June 30, 2024.

Highlights

• Quarterly basic and diluted earnings per share of $0.26

• Quarterly net income of $11.5 million

• Record mortgage portfolio of $907.8 million

• Amended the credit facility to increase the maximum available amount to $340 million

• High quality mortgage portfolio

  • 96.8% of portfolio in first mortgages

  • 89.5% of portfolio is less than 75% loan to value

  • average loan-to-value is 64.4%

"Atrium continued to deliver strong returns for shareholders by posting earnings per share of $0.26 for the second quarter and $0.53 year to date. These results are comfortably above our regular divided rates of $0.225 for the quarter and $0.45 year to date. Our focus remains on navigating through challenging real estate market conditions and the portfolio composition now has 96.8% of the portfolio in first mortgages and 89.5% with a loan to value less than 75%. Despite slower market activity, we managed to source high quality opportunities that increased the mortgage portfolio to a record $908 million at quarter end. We also solidified our funding sources during the quarter by adding Royal Bank to our lending syndicate which is a testament to our strong financial performance and portfolio quality. We continue to believe that credit risk remains elevated across the industry and have prudently increased our provisions accordingly. While we remain hopeful that lower inflation and interest rates will help improve market conditions over the coming quarters, we continue to lend defensively in our preferred sectors," said Rob Goodall, CEO of Atrium.

Conference call

Interested parties are invited to participate in a conference call with management on Friday, August 9, 2024 at 9:00 a.m. ET to discuss the results. To participate or listen to the conference call live, please call 1-833-491-0507 (call topic: Second quarter results). For a replay of the conference call (available until August 22, 2024) please call 1-833-607-0619, password 5756717#.

Results of operations

For the three months ended June 30, 2024, Atrium reported assets of $885.6 million, up from $877.9 million at the end of 2023. Revenues were $24.9 million, an increase of 5.9% from the second quarter of the prior year. Net income for the second quarter of 2024 was $11.5 million, a decrease of 20.1% from the comparative period. Atrium's allowance for mortgage losses at June 30, 2024 totaled $29.3 million, or 3.23% of the gross mortgage portfolio, which is up from $22.6 million or 2.53% of the mortgage portfolio at December 31, 2023.

For the six months ended June 30, 2024, revenues were $50.1 million, an increase of 6.1% from the six months ended June 30, 2023. Net income for the six months ended June 30, 2024 was $23.6 million, a decrease of 17.7% from the prior year period.

Basic and diluted earnings per common share were $0.26 for the three months ended June 30, 2024, compared with $0.33 and $0.32 basic and diluted earnings per common share respectively in the comparable period. Basic and diluted earnings per common share were $0.53 for the six months ended June 30, 2024, compared with $0.66 and $0.63 basic and diluted earnings per common share respectively for the six months ended June 30, 2023.

Mortgages receivable as at June 30, 2024 was $884.4 million, up from $876.7 million as at December 31, 2023. During the six months ended June 30, 2024, $174.4 million of mortgage principal was advanced and $159.8 million was repaid. The weighted average interest rate on the mortgage portfolio at June 30, 2024 was 10.93%, compared to 11.42% at December 31, 2023.

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

		Three months ended						Six months ended
		June 30,						June 30,
		2024			2023			2024			2023
Revenue	$	24,930		$	23,548		$	50,123		$	47,255
Mortgage servicing and management fees		(2,170	)		(2,052	)		(4,246	)		(4,106	)
Other expenses		(244	)		(332	)		(650	)		(776	)
Recovery of prior mortgage loss		183			−			183			157
Provision for mortgage losses		(4,365	)		(690	)		(8,219	)		(1,642	)
Income before financing costs		18,334			20,474			37,191			40,888
Financing costs		(6,805	)		(6,045	)		(13,621	)		(12,247	)
Net income and comprehensive income	$	11,529		$	14,429		$	23,570		$	28,641
Basic earnings per share	$	0.26		$	0.33		$	0.53		$	0.66
Diluted earnings per share	$	0.26		$	0.32		$	0.53		$	0.63
Dividends declared	$	9,971		$	9,822		$	19,902		$	19,607
Mortgages receivable, end of period	$	884,401		$	817,421		$	884,401		$	817,421
Total assets, end of period	$	885,569		$	831,917		$	885,569		$	831,917
Shareholders' equity, end of period	$	490,455		$	489,010		$	490,455		$	489,010
Book value per share, end of period	$	11.06		$	11.19		$	11.06		$	11.19

 

Analysis of mortgage portfolio

	As at June 30, 2024									As at December 31, 2023
				Outstanding			% of						Outstanding			% of
Property Type	Number			amount			Portfolio			Number			amount			Portfolio
(outstanding amounts in 000s)
High-rise residential	21		$	313,174			34.5%			22		$	323,340			36.2%
Mid-rise residential	21			165,852			18.3%			25			208,289			23.3%
Low-rise residential	15			163,292			18.0%			14			153,561			17.2%
House and apartment	177			132,000			14.5%			153			117,943			13.2%
Condominium corporation	8			1,612			0.2%			10			1,786			0.2%
Residential portfolio	242			775,930			85.5%			224			804,919			90.1%
Commercial	19			131,882			14.5%			19			88,640			9.9%
Mortgage portfolio	261		$	907,812			100.0%			243		$	893,559			100.0%

 

	As at June 30, 2024
										Weighted			Weighted
	Number of			Outstanding			Percentage			average			average
Location of underlying property	mortgages			amount			outstanding			loan to value			interest rate
(outstanding amounts in 000s)
Greater Toronto Area	186		$	711,657			78.4%			60.9%			11.05%
Non-GTA Ontario	55			39,033			4.3%			65.5%			9.71%
British Columbia	20			157,122			17.3%			80.0%			10.71%
	261		$	907,812			100.0%			64.4%			10.93%

 

	As at December 31, 2023
										Weighted			Weighted
	Number of			Outstanding			Percentage			average			average
Location of underlying property	mortgages			amount			outstanding			loan to value			interest rate
(outstanding amounts in 000s)
Greater Toronto Area	166		$	653,401			73.1%			61.4%			11.63%
Non-GTA Ontario	52			40,753			4.6%			64.6%			9.81%
British Columbia	24			191,955			21.5%			60.6%			10.95%
Alberta	1			7,450			0.8%			71.0%			14.00%
	243		$	893,559			100.0%			61.4%			11.42%

 

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 three and six month period ended June 30, 2024, available on SEDAR+ at www.sedarplus.ca, and on the company's website at www.atriummic.com.

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.sedarplus.ca or investor information on Atrium's website at www.atriummic.com.

For additional information, please contact
Robert G. Goodall
Chief Executive Officer

John Ahmad
Chief Financial Officer

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219303

FAQ

What was Atrium Mortgage Investment 's (TSX: AI) earnings per share for Q2 2024?

Atrium Mortgage Investment reported earnings per share of $0.26 for the second quarter of 2024.

How much did Atrium's (TSX: AI) mortgage portfolio grow to in Q2 2024?

Atrium's mortgage portfolio grew to a record $907.8 million in the second quarter of 2024.

What percentage of Atrium's (TSX: AI) portfolio was in first mortgages as of June 30, 2024?

As of June 30, 2024, 96.8% of Atrium's portfolio was in first mortgages.

How did Atrium's (TSX: AI) net income in Q2 2024 compare to the previous year?

Atrium's net income for Q2 2024 was $11.5 million, a decrease of 20.1% from the comparative period in the previous year.

What was the average loan-to-value ratio of Atrium's (TSX: AI) mortgage portfolio as of June 30, 2024?

The average loan-to-value ratio of Atrium's mortgage portfolio was 64.4% as of June 30, 2024.