INVESTOR PRESENTATION June 2019
FORWARD-LOOKING STATEMENTS This presentation contains certain statements that may be forward-looking statements. All statements in this document, other than statements of historical fact, that address events or developments that Atrium Mortgage Investment Corporation expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and 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 are based upon reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward- looking statements. Factors that could cause the actual results to differ materially from those in forward looking statements include: failure to successfully negotiate or subsequently close transactions, adverse results from mortgage investments and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results may differ materially from those projected in the forward-looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Atrium’s management on the date the statements are made. Atrium undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, change. 2
CANADA’S PREMIER NON-BANK LENDER ATRIUM MORTGAGE INVESTMENT CORPORATION Non-bank lender, founded in 2001 Assets - $720 million Market capitalization - $530 million Average mortgage yield - 8.90% Diversified, high quality mortgages Focus on shareholder value: Safe portfolio Steady returns Minimize expenses Maximize distributions to shareholders 3
FINANCIAL STRENGTH AND STABILITY $ millions Mar 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Mortgages $706 $683 $627 $531 receivable Foreclosed 17 17 1 1 properties Total assets $723 $700 $628 $532 Bank debt and BAs $141 $148 $144 $ 145 Convertible $152 $157 126 101 debenture Other liabilities 7 8 9 7 Total liabilities $300 $313 279 253 Shareholders’ equity 423 387 349 279 Total liabilities and $723 $700 $628 $532 equity 4
EXCELLENT OPERATING RESULTS Mar 31, 2019 Mar 31,2018 Year 2018 Year 2017 3 months 3 months 12 months 12 months millions millions millions millions Mortgage interest and $15.8 $13.4 $58.3 $50.4 fees Financing costs 4.2 3.4 15.3 12.7 Mortgage servicing and 1.7 1.5 6.3 5.5 management fees General and 0.3 0.3 1.1 1.2 administrative Loss provision 0.4 0.3 1.8 1.9 Expenses 6.6 5.5 24.5 21.3 Net income $9.2 $7.9 $33.8 $29.1 5
FINANCIAL OVERVIEW Monthly dividends and annual special Objective: preserve capital and focus on steady, safe return to shareholders. $1.00 Monthly dividends + special annually To be determined • 2013: $0.80 rate + $0.05 = $0.85 $0.95 • 2014: $0.82 rate + $0.07 = $0.89 • $0.90 2015: $0.84 rate + $0.09 = $0.93 • 2016: $0.86 rate + $0.10 = $0.96 $0.85 • 2017: $0.88 rate + $0.04 = $0.92 • 2018: $0.90 rate + $0.04 = $0.94 $0.80 • 2019: $0.90 rate, plus special $0.75 DRIP at 2% discount. RRSP, TFSA, etc. eligible. $0.70 2013 2014 2015 2016 2017 2018 2019 6
STRONG AND CONSISTENT RETURNS Atrium Mortgage Investment Corporation - Return on Equity 12% 10% Q1 2019 - 9.1% 8% Rate 6% 4% 5-year Government of Canada bond Q1 2019 – 1.7% 2% 1-year Government of Canada treasury bill - 1.7% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019 7
MOVEMENT IN AVERAGE MORTGAGE RATE 10 9 8 7 6 Interest Rate % 5 4 3 2 1 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 Atrium MIC 5 year Canada bond yields Difference 8
PRIME BASED LOANS PERCENTAGE OF PORTFOLIO Q4 2017 – Q1 2019 9.00% 80.00% Weighted average mortgage rate 8.90% 70.00% % prime based mortgages 8.80% 60.00% 8.70% 50.00% 8.60% 40.00% 8.50% 30.00% 8.40% 20.00% 8.30% 10.00% 8.20% 0.00% Q4 2017 Q1 2018 Q2 2108 Q3 2018 Q4 2018 Q1 2019 % prime based mortgages Weighted average mortgage interest rate 9
MAINTAIN LOW RISK PORTFOLIO PORTFOLIO LOAN TO VALUE Since going public in 2012 75% 70% Loan-to-Value 66.6% 64.7% 64.1% 64.3% 65% 62.7% 61.5% 61.1% 60.6% 60% 55% 50% 2012 2013 2014 2015 2016 2017 2018 Q1 2019 MICs are lenders, not owners 10
LOW RUNNING COSTS Lowest management fee amongst our peers ATRIUM MIC Lowest management fee: 0.85% plus 0.85% HST Management fee on mortgages (not on idle cash) Other costs under 0.20% No performance fee Performance fee None Underwriters in two offices knowledgeable 1.10% Total expenses about local markets of assets 11
EXPERTISE OF INDEPENDENT DIRECTORS 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) Director of Pure Multi-Family REIT, Kew Media Group and Cliffside Capital Ltd. Former CFO of Greenwin Kagan Properties and ResREIT. 12
LENDING TEAM EXPERIENCE + GEOGRAPHIC DIVERSIFICATION Originator has 25 years of lending experience 5 originators, many with up to 25 years of lending experience Geographic diversification reduces risk 13
GEOGRAPHIC PORTFOLIO DIVERSIFICATION March 31, 2019 British Columbia 29.2% GTA 65.3% Non-GTA Ontario Alberta 3.4% 2.1% 14
ONTARIO PORTFOLIO PROPERTY TYPE LOCATION Q1 2019 Q1 2019 Mid Rise High Rise 17.7% 16.9% GTA 95.1% Commercial 19.2% Hamilton 2.8% Ottawa Single Family 1.4% 10.2% Other Low Rise Condo Corps. 0.7% 35.4% 0.6% Ontario Portfolio : $486,236,107
MAINTAIN LOW RISK PORTFOLIO ONTARIO PROFILE March 31, 2019 80.7% 85.0% 15.0% 19.3% <75% >75% First mortgages Other ranks Mortgage rank Loan-to-value: 64.9% 16
COMMERCIAL REAL ESTATE Greater Toronto Area- Vacancy Rates 2014 2015 2016 2017 2018 15% 14% 13% 12% 11% 10% 9% 7.6% 8% Rate 7% 6% 5% 4% 2.7% 3% 1.6% 2% 1.1% 1% 0% Office - Overall Office - Downtown Industrial Apartment 17
MONTHLY NEW HOME SALES: GTA 2018 2017 2016 High Rise: 21,991 High Rise: 29,132 High Rise: 21,330 Low Rise: 3,831 Low Rise: 18,365 Low Rise: 19,574 TOTAL: 47,497 TOTAL: 25,161 TOTAL: 41,565
RESIDENTIAL REAL ESTATE Greater Toronto Area- Home Prices Source: Altus Group
UNSOLD INVENTORY Greater Toronto Area Source: Altus Group
Loan Example #1 COMMERCIAL LEASE UP AND REPOSITIONING Description Acquisition financing of an historic bank building for re-leasing and possibly re- positioning Property A single storey commercial building totaling 8,250 square feet. 4 parking stalls at rear of site Loan $4.9 million subordinate tranche of a $8.3 million 1 st mortgage Interest rate 9.50% per annum Term 24 months Loan-to-value 64.5% of appraised value Guarantee Corporate and Personal guarantees for 100% of the loan 21
Loan Example #2 MULTI-RESIDENTIAL ACQUISITION Description Acquisition financing for an assembly of 10 detached homes on Lawrence Avenue West Property Two blocks of townhouses with a combined GFA of 70,000 square feet Loan $9.9 million first mortgage Interest rate 8.00% per annum Term 24 months Loan-to-value 66.0 % on an ‘as is’ appraised basis Guarantee Personal guarantees for 25% of the loan 22
B.C. PORTFOLIO LOCATION PROPERTY TYPE Q1 2019 Q1 2019 Mid Rise 34.0% Greater Vancouver 100% Low Rise High Rise 21.9% 26.5% House & Apt. 3.9% Mixed Use and Commercial 13.7% B.C. Portfolio : $206,622,569
METRO VANCOUVER COMMERCIAL MARKET
RESIDENTIAL REAL ESTATE NEW HOME MARKET - SALES 20,280 17,585 17,541 15,317 14,035 Source: Urban Analytics
RESIDENTIAL REAL ESTATE NEW HOME MARKET - INVENTORY 8,223 4,097 Source: Urban Analytics
B.C. Loan Example INDUSTRIAL REPOSITIONING Description Acquisition financing of two adjacent industrial properties for redevelopment Property Two single storey industrial buildings totalling 32,247 sq. ft. leasable area on a 38,594 sq. ft. site. Loan $13.5 million Interest rate Greater of 8% or Prime + 4.05% per annum Term 12 months Loan-to-Purchase Price 67.5% Loan-to-value 45.0% Guarantee Corporate and Personal guarantees for 100% of the loan 27
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