INVESTOR PRESENTATION March 2019 FORWARD-LOOKING STATEMENTS This - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION March 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

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INVESTOR PRESENTATION

March 2019

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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

  • f 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.

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CANADA’S PREMIER NON-BANK LENDER

ATRIUM MORTGAGE INVESTMENT CORPORATION

Non-bank lender, founded in 2001 Assets - $700 million Market capitalization - $516 million Average mortgage yield - 8.85% Diversified, high quality mortgages Focus on shareholder value:

  • Safe portfolio
  • Steady returns
  • Minimize expenses
  • Maximize distributions to shareholders

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Description

Acquisition financing of a site to be redeveloped into two mixed-use towers of 15 and 12-storeys in height with a proposed density of 5.5x FSR

Property

1 acre site in North Vancouver, improved with

two multi-tenanted, medical office buildings of 4 and 9-storeys in height with rentable areas of 26,779 and 25,302 square feet, respectively

Loan

$46 million blanket first mortgage (shared 50/50 with another lender partner)

Interest Rate

Greater of 8.25% or Prime +4.55% per annum

Term

24 months

Loan-to-value

72.8% on an ‘as is’ appraised basis

Guarantee

Corporate and Personal guarantees

COMMERCIAL REDEVELOPMENT

ACQUISITION FINANCING

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ACQUISITION FINANCING

Description

Acquisition financing for a downtown property to be repositioned by exterior recladding & interior renovation to achieve market level rents

Property

A 0.210 acre site with a 3-storey building comprised of 28,300 square feet in downtown Toronto, currently utilized as retail space and restaurants

Loan

$6.725 million first mortgage

Interest rate

7.75% per annum

Term

24 months

Loan-to-value

74.4% on an ‘as is’ appraised basis

Guarantee

Corporate and Personal guarantees 100% of the loan

COMMERCIAL REPOSITIONING

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Description

Purchase of a 1,614 sq. ft. single-family home.

Property

Detached two storey residential home in Ajax, Ontario

Loan

First mortgage of $575,000

Interest rate

Prime + 4.75% per annum

Term

1 year

Loan-to-value

75.0%

Guarantee

Fully guaranteed by owner

OWNER OCCUPIED HOUSE LOAN

SINGLE FAMILY RESIDENCE LOAN

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$0.70 $0.75 $0.80 $0.85 $0.90 $0.95 $1.00 2013 2014 2015 2016 2017 2018 2019

FINANCIAL OVERVIEW

Objective: preserve capital and focus

  • n 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, plus special

DRIP at 2% discount. RRSP, TFSA, etc. eligible.

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Monthly dividends and annual special

To be determined

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CONSISTENT DIVIDENDS

Equity-type return on a fixed-income-type investment

Atrium yield based upon book value

Atrium listed

  • n the TSX

September 2012

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0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Atrium MIC TSX

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MORTGAGE PORTFOLIO QUARTERLY REVENUES

STEADY GROWTH

$0 $100 $200 $300 $400 $500 $600 $700 $800

Millions

$0 $2 $4 $6 $8 $10 $12 $14 $16 $18

Millions

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STRONG AND CONSISTENT RETURNS

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0% 2% 4% 6% 8% 10% 12% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Rate

Atrium Mortgage Investment Corporation - Return on Equity 5-year Government of Canada bond 1-year Government

  • f Canada treasury

bill - 1.8% 2018 - 9.2% 2018 - 2.1%

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FINANCIAL STRENGTH AND STABILITY

$ millions Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Mortgages receivable $683 $627 $531 $448 Foreclosed properties 17 1 2 Total assets $700 $628 $532 $448 Bank debt and BAs $148 $144 $ 145 67 Convertible debenture $157 126 101 100 Other liabilities 8 9 7 6 Total liabilities $313 279 253 173 Shareholders’ equity 387 349 279 275 Total liabilities and equity $700 $628 $532 $448

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Year 2018 Year 2017 Year 2016 Year 2015 12 months 12 months 12 months 12 months millions millions millions millions Mortgage interest and fees $58.3 $50.4 $44.0 $40.2 Financing costs 15.3 12.7 10.5 9.6 Mortgage servicing and management fees 6.3 5.5 4.7 4.2 General and administrative 1.1 1.2 1.2 1.2 Loss provision 1.8 1.9 1.5 1.9 Expenses 24.5 21.3 17.9 16.9 Net income $33.8 $29.1 $26.1 $23.3

EXCELLENT OPERATING RESULTS

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ATRIUM MIC Management fee 0.85%

  • n mortgages

(not on idle cash) Performance fee None Total expenses 1.10%

  • f assets

LOW RUNNING COSTS

  • Lowest management fee: 0.85% plus

HST

  • Other costs under 0.15%
  • No performance fee
  • Underwriters in two offices knowledgeable

about local markets

Lowest management fee amongst our peers

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MOVEMENT IN AVERAGE MORTGAGE RATE

Interest Rate %

1 2 3 4 5 6 7 8 9 10 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Atrium MIC 5 year Canada bond yields Difference

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MAINTAIN LOW RISK PORTFOLIO

PORTFOLIO LOAN TO VALUE

MICs are lenders, not owners

50% 55% 60% 65% 70% 75% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Atrium MIC average loan-to-value

Loan-to-Value

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MORTGAGE PORTFOLIO TURNOVER

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47.3% 42.8% 35.3% 57.2% 42.2% 44.8% 35.9% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018

Repayments/Average of Mortgages Receivable

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MAINTAIN LOW RISK PORTFOLIO

HIGH 1ST MORTGAGES & LOW RISK UNDERWRITING Atrium

December 31, 2018 84% 16%

First mortgages Other ranks <75% >75%

89% 11%

Loan-t0-value under 75%

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GEOGRAPHIC PORTFOLIO DIVERSIFICATION

Greater Toronto Area 69.0% Non-GTA Ontario 2.9% Saskatchewan 0.9% Alberta 19.5% British Columbia 7.7%

March 31, 2015 Alberta exposure reduced to 2.3% December 31, 2018

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Greater Toronto Area 63.0% Non-GTA Ontario 4.3% Alberta 2.3% British Columbia 30.4%

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LENDING TEAM

EXPERIENCE + GEOGRAPHIC DIVERSIFICATION

4 originators, many with up to 25 years

  • f lending

experience Originator has 25 years of lending experience

Geographic diversification reduces risk

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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

Loblaw Companies Limited; as well as a Chair of the Board of Directors of Gluskin Sheff + Associates, Inc.

Maurice (Maish) Kagan

Director of Pure Multi-Family REIT, Kew Media Group and Cliffside Capital Ltd. Former CFO of Greenwin Properties and ResREIT.

EXPERTISE OF INDEPENDENT DIRECTORS

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COMMERCIAL REAL ESTATE Greater Toronto Area- vacancy rates

Rate

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

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COMMERCIAL MARKET METRO VANCOUVER OFFICE MARKET

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COMMERCIAL MARKET METRO VANCOUVER INDUSTRIAL MARKET

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RESIDENTIAL REAL ESTATE Resale Home Market

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Composite Condominium Townhouse Semi-Detached Single Family

Benchmark Price Change (YoY)

GTA Toronto

$509,700 $541,000 $567,200 $633,900 $712,400 $881,700 $907,900 $1,097,400 $764,200 $845,000

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RESIDENTIAL REAL ESTATE Greater Vancouver Resale Home Market

$664,100 $809,700 $1,479,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000

Condominium Townhouse Single Family

December 2017 December 2018

change: + 0.6% change: + 1.3% change: - 7.8%

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PRICE VOLATILITY OF ATRIUM VS. MAJOR REITS

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0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 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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ATRIUM VERSUS THE TSX COMPOSITE TOTAL RETURN SINCE ATRIUM LISTED

100 110 120 130 140 150 160 170 180 190 200 September 4, 2012 December 31, 2012 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018

Common Shares ($) S&P/TSX Composite Total Return Index ($)

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ATRIUM VERSUS THE TSX COMPOSITE CUMULATIVE TOTAL RETURN

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50 100 150 200 250 300 350 400 450 500 550 600 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Atrium TSX

Steady growth and superior returns

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SUMMARY: COMPELLING VALUE PROPOSITION

 Experienced management team  Local presence in two provinces  Strong mortgage portfolio focused

  • n liquid markets

 Great track record since 2001  Lowest management fees  5% board ownership  6 of 7 independent directors  Dividend stable and high

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