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INVESTOR PRESENTATION Investor Presentatio… · A 4.06 acre parcel of land located in Oakville....
Transcript of INVESTOR PRESENTATION Investor Presentatio… · A 4.06 acre parcel of land located in Oakville....
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INVESTOR PRESENTATIONSeptember 2020
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FORWARD-LOOKING STATEMENTS
This presentation contains certain statements that may be forward-looking statements. Allstatements in this document, other than statements of historical fact, that address events ordevelopments that Atrium Mortgage Investment Corporation expects to occur, are forwardlooking statements. Forward looking statements are statements that are not historical factsand may be identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”,“estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”,“would”, “may”, “could” or “should” occur.
Although Atrium believes the expectations expressed in such forward-looking statements arebased upon reasonable assumptions, such statements are not guarantees of futureperformance and actual results may differ materially from those in the forward- lookingstatements. Factors that could cause the actual results to differ materially from those inforward looking statements include: failure to successfully negotiate or subsequently closetransactions, adverse results from mortgage investments and general economic, market orbusiness conditions. Investors are cautioned that any such statements are not guarantees offuture performance and actual results may differ materially from those projected in theforward-looking statements. Forward looking statements are based on the beliefs, estimatesand opinions of Atrium’s management on the date the statements are made. Atriumundertakes no obligation to update these forward-looking statements in the event thatmanagement’s beliefs, estimates or opinions, or other factors, change.
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CANADA’S PREMIER NON-BANK LENDER
ATRIUM MORTGAGE INVESTMENT CORPORATION
Non-bank lender, founded in 2001Assets - $692 millionMarket capitalization - $450 millionAverage mortgage yield - 8.55%Diversified, high quality mortgagesFocus on shareholder value: Safe portfolio Steady returns Minimize expenses Maximize distributions to shareholders
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FINANCIAL STRENGTH AND STABILITY
$ millions June 30, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Mortgages receivable $675 $727 $683 $627
Foreclosed properties 16 16 17 1
Total assets $692 $744 $700 $628
Bank debt and BAs $97 $123 $148 $144
Convertibledebenture $125 $154 $157 126
Other liabilities 7 11 8 9
Total liabilities $229 $288 $313 279
Shareholders’ equity 463 456 387 349
Total liabilities andequity $692 $744 $700 $628
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June 2020 June 2019 Year 2019 Year 2018
6 months 6 months 12 months 12 months
millions millions millions millions
Total revenues $33.3 $32.3 $66.2 $58.3
Financing costs 7.5 8.7 17.2 15.3
Mortgage servicing and management fees 3.5 3.4 7.0 6.3
General and administrative 0.6 0.5 1.1 1.1
Impairment loss - - 0.8 -
Provision for mortgage losses 2.0 0.8 1.5 1.8
Expenses 13.6 13.4 27.6 24.5
Net income $19.7 $18.9 $38.6 $33.8
Earnings per common share – basic $0.47 $0.49 $0.97 $0.95
EXCELLENT OPERATING RESULTS
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FINANCIAL OVERVIEW
Objective: preserve capital and focus on steady, safe return to shareholders.Monthly dividends + special annually• 2013: $0.80 rate + $0.05 = $0.85• 2014: $0.82 rate + $0.07 = $0.89• 2015: $0.84 rate + $0.09 = $0.93• 2016: $0.86 rate + $0.10 = $0.96• 2017: $0.88 rate + $0.04 = $0.92• 2018: $0.90 rate + $0.04 = $0.94• 2019: $0.90 rate + $0.06 = $0.96• 2020: $0.90 rate, plus special
RRSP, TFSA, etc. eligible.
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Monthly dividends and annual special
To b
e de
term
ined
$0.70
$0.75
$0.80
$0.85
$0.90
$0.95
$1.00
2013 2014 2015 2016 2017 2018 2019 2020
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STRONG AND CONSISTENT RETURNS
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0%
2%
4%
6%
8%
10%
12%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2 2020
Rat
e
Atrium Mortgage Investment Corporation - Return on Equity
5-year Government of Canada bond
1-year Government of Canada treasury bill – 0.74%
Q2 2020 – 8.6%
Q2 2020 – 0.75%
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MOVEMENT IN AVERAGE MORTGAGE RATE
Inte
rest
Rat
e %
0
1
2
3
4
5
6
7
8
9
10
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Q22020
Atrium MIC 5 year Canada bond yields Difference
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PRIME BASED LOANSPERCENTAGE OF PORTFOLIO
Q4 2017 – Q2 2020
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0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
8.00%
8.10%
8.20%
8.30%
8.40%
8.50%
8.60%
8.70%
8.80%
8.90%
9.00%
Q4 2017 Q1 2018 Q2 2108 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
% p
rim
e ba
sed
mor
tgag
es
Wei
ghte
d av
erag
e m
ortg
age
inte
rest
rat
e
% prime based mortgages Weighted average mortgage interest rate
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MAINTAIN LOW RISK PORTFOLIO PORTFOLIO LOAN TO VALUE
MICs are lenders, not owners
66.6%
64.1% 64.3% 64.7%
62.7%61.5% 61.1%
59.5%59.00%
50%
55%
60%
65%
70%
75%
2012 2013 2014 2015 2016 2017 2018 2019 Q2 2020
Since going public in 2012
Loa
n-to
-Val
ue
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ATRIUM MIC
Management fee0.85%
on mortgages(not on idle cash)
Performance fee None
Total expenses 1.20%of assets
LOW RUNNING COSTS
Lowest management fee: 0.85% plus HST Other costs under 0.20% No performance fee Underwriters in two offices knowledgeable
about local markets
Lowest management fee amongst our peers
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Mark L. Silver, Chair President of Optus Capital Corporation and founding partner and past CEO of Universal Energy.
Robert H. DeGasperis President of Metrus Properties and DG Group, family owned and operated real estate companies.
Peter P. Cohos President and founder of Copez Properties Ltd., a Calgary-based real estate investment company.
Andrew Grant President of PCI Group, a major developer in British Columbia.
Nancy H.O. Lockhart Director of George Weston Limited and Choice Properties REIT.
Maurice (Maish) Kagan
Director of Cliffside Capital Ltd. Former CFO of Greenwin Properties and ResREIT. Former director of Pure Multi-Family REIT
EXPERTISE OF INDEPENDENT DIRECTORS
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LENDING TEAMEXPERIENCE + GEOGRAPHIC DIVERSIFICATION
6 originators, many with up to 30 years of lending experience
Originator has 25 years of lending experience
Geographic diversification reduces risk13
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GEOGRAPHIC PORTFOLIO DIVERSIFICATION
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June 30, 2020
GTA69.6%
Non-GTA Ontario3.4%
Alberta 2.3%
British Columbia24.7%
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MAINTAIN LOW RISK PORTFOLIO MORTGAGE PORTFOLIO PROFILE
June 30, 2020
85%
15%
First mortgages Other ranks 75%
94%
6%
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Mortgage rank Loan-to-value: 59.0%
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ONTARIO PORTFOLIO
Commercial21.4%
House & apartment
8.4%Condo Corps.
0.5%Low Rise
30.0%
Mid Rise 17.0%
High Rise22.7%
Ontario Portfolio : $496,763,000
PROPERTY TYPEQ2 2020
LOCATIONQ2 2020
GTA96.8%
Hamilton1.9%
Ottawa0.9%
Other0.3%
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COMMERCIAL REAL ESTATEGreater Toronto Area- Vacancy Rates
Rat
e 6.8%
2.7%2.0%
1.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
Office - Overall Office - Downtown Industrial Apartment
2014 2015 2016 2017 2018 2019 2020
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MONTHLY NEW HOME SALES:GTA
2018 2019 2020
Low Rise: 9,523
High Rise: 26,948 High Rise: 10,381
TOTAL: 36,471
Low Rise: 7,779
TOTAL: 18,160
High Rise: 21,330
Low Rise: 3,831
TOTAL: 25,161
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As at July 2020
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RESIDENTIAL REAL ESTATE Greater Toronto Area- Home Prices
Source: Altus Group19
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B.C. PORTFOLIO
B.C. Portfolio : $167,755,000
PROPERTY TYPEQ2 2020
LOCATIONQ1 2020
Mixed Use and Commercial8.0%
Low Rise 18.2%
Mid Rise 34.6%
High Rise34.4%
House & Apartment
4.8%
Greater Vancouver
100%
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Loan Example #1
DescriptionAcquisition financing for a site in downtown
Toronto that is proposed for a purpose-built rental projectProperty
A 12,594 square foot site proposed for a9-storey building containing a GFA of 52,600 square feetLoan
$6.21 million first mortgage
Interest rate7.70% per annum
Term24 months
Loan-to-Purchase Price60.0% of purchase price
GuaranteePersonal guarantees for 50% of the loan
PURPOSE BUILT RENTAL PROJECT
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Loan Example #2
DescriptionFirst mortgage on a site zoned for a 10-storey
midrise project which is 65% presoldProperty
A 4.06 acre parcel of land located in OakvilleLoan
$12.8 million first mortgage with two facilities:
1. $7.25 million loan 2. $5.6 million letters of credit
Interest rate7.75% per annum for the loan facility
Term18 months
Loan-to-Purchase Price69.8% of appraised value
GuaranteeCorporate and personal guarantees for 50%
of the loan
MID-RISE RESIDENTIAL DEVELOPMENT
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B.C. Loan Example
DescriptionFinancing to assist with the purchase,
renovation and re-leasing of a mixed use apartment and retail building Property
A 4,323 square foot site in downtown Vancouver, BC.Loan
$3 million first mortgage
Interest rate7.75% per annum
Term18 months
Loan-to-Purchase Price69.2%
GuaranteeJoint and several guarantees for 100% of the
loan
EXISTING MIXED USE
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Loan Example #3
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0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
RBC TD Scotiabank BMO CIBC CWB Equitable Bank Atrium MIC
BETA OF ATRIUM MIC VS. BANKS
Beta is a measure of the volatility of a security in comparison to the stock market as a whole.
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5-year averageat June 30, 2020
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ATRIUM VERSUS THE TSX COMPOSITETOTAL RETURN SINCE ATRIUM LISTED
100
120
140
160
180
200
220
240
September 4,2012
December31, 2012
December31, 2013
December31, 2014
December31, 2015
December31, 2016
December31, 2017
December31, 2018
December31, 2019
June 30,2020
Common Shares ($)
S&P/TSX Composite Total Return Index ($)
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ATRIUM VERSUS THE TSX COMPOSITECUMULATIVE TOTAL RETURN
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0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q22020
Atrium
TSX
Steady growth and superior returns
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Slide Number 1FORWARD-LOOKING STATEMENTSCanada’s Premier Non-Bank LenderSlide Number 4Slide Number 5Slide Number 6Slide Number 7MOVEMENT IN �AVERAGE MORTGAGE RATE�PRIME BASED LOANS�PERCENTAGE OF PORTFOLIO�Q4 2017 – Q2 2020�Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15ONTARIO PORTFOLIOCOMMERCIAL REAL ESTATE�Greater Toronto Area- Vacancy Rates�MONTHLY NEW HOME SALES:�GTASlide Number 19B.C. PORTFOLIOSlide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26Slide Number 27Slide Number 28