AI Atrium Mortgage Investment Corporation

Atrium Mortgage Investment Corporation (TSX:AI) (TSX:AI.DB) (TSX:AI.DB.A) (TSX:AI.DB.B) today released its financial results for the year ended December 31, 2016.

Highlights

• $0.97 basic and $0.95 diluted earnings per share for the year ended December 31, 2016
• $0.10 per share special dividend to shareholders of record December 31, 2016
• $0.96 total dividends per share in 2016, representing a yield of 9.3% on book value
• 2017 regular dividend increased to $0.88 per annum, paid monthly
• Mortgage portfolio increased 18.5% year-over-year to $535 million at December 31, 2016
• High quality mortgage portfolio- 80.8% of portfolio in first mortgages- 88.4% of loan portfolio is less than 75% loan to value- Continued focus on low risk real estate sectors- Alberta exposure reduced from 13.5% of portfolio at December 31, 2015 to 6.9% at year-end; 96.9% of remaining Alberta loans are first mortgages

“Our performance in 2016 was the most impressive in Atrium’s 15 year history,” said Robert Goodall, CEO of Atrium. He continued, “What I am most proud of is our ability to lower the risk in the portfolio by reducing our exposure in Alberta from 19.5% of the total portfolio 18 months ago to less than 7% today. And we accomplished that feat while generating record earnings per share. This re-orientation of the portfolio demonstrates the quality of our management team, who have proven that they can operate effectively in both a weak or strong economy.”

“Once again we would like to thank our real estate clients for their continued loyalty, and our shareholders for their continuing support.  We are proud to state that Atrium continues to be regarded as Canada’s premier non-bank lender™.”

Interested parties are invited to participate in a conference call with management on Thursday, February 9, 2017 at 4:00 p.m. EST. Please refer to the call-in information at the end of this news release.

Results of operations

For the year ended December 31, 2016, mortgage interest and fees revenue aggregated $44.0 million, compared to $40.2 million in the prior year, an increase of 9.5%. The weighted average interest rate on the mortgage portfolio was 8.50% at December 31, 2016, compared with 8.66% at December 31, 2015. Earnings and total comprehensive income were up 11.9% from the previous year.

Condensed Statements of Earnings and Comprehensive Income
($000s, except per share amounts)
	Year				Year				Year
	ended				ended				ended
	December 31				December 31				December 31
	2016				2015				2014
Revenue	$	44,042			$	40,206			$	34,956
Mortgage servicing and management fees		(4,661	)			(4,173	)			(3,553	)
Other expenses		(1,221	)			(1,187	)			(1,014	)
Provision for mortgage losses		(1,519	)			(1,912	)			(1,817	)
Income before financing costs		36,641				32,934				28,572
Financing costs		(10,521	)			(9,597	)			(7,535	)
Earnings and total comprehensive income	$	26,120			$	23,337			$	21,037
Basic earnings per share	$	0.97			$	0.94			$	0.91
Diluted earnings per share	$	0.95			$	0.93			$	0.91

For further information on the financial results, please refer to Atrium’s financial statements for the year ended December 31, 2016, and its management’s discussion and analysis for the same period, available on SEDAR at www.sedar.com, and on the company’s website at www.atriummic.com. 

Mortgage portfolio
($000s)		December 31, 2016											December 31, 2015
				Outstanding				% of								Outstanding				% of
Mortgage category		Number		amount				Portfolio					Number			amount				Portfolio
(outstanding amounts in 000s)
Low-rise residential		30			$	135,701				25.4	%			23			$	110,034				24.3	%
House and apartment		102				99,456				18.6	%			110				84,755				18.8	%
High-rise residential		7				53,182				9.9	%			9				42,245				9.4	%
Construction		8				49,345				9.2	%			9				44,701				9.9	%
Mid-rise residential		5				28,787				5.4	%			7				14,662				3.2	%
Condominium corporation		16				3,548				0.7	%			18				4,111				0.9	%
Residential portfolio		168				370,019				69.2	%			176				300,508				66.5	%
Commercial/mixed use		29				165,231				30.8	%			31				151,083				33.5	%
Mortgage portfolio		197				535,250				100.0	%			207				451,591				100.0	%
Accrued interest receivable						2,126												1,960
Mortgage discount						(360	)											(440	)
Mortgage origination fees						(626	)											(712	)
Provision for mortgage losses						(5,800	)											(4,300	)
Mortgages receivable					$	530,590											$	448,009

A summary of mortgages by size is presented below.

($000s)		December 31, 2016								December 31, 2015
			Outstanding			% of						Outstanding			% of
Mortgage amount		Number	amount			Portfolio					Number	amount			Portfolio
(outstanding amounts in 000s)
$0 - $2,500,000		145		$	102,656		19.2	%			154		$	118,170		26.2	%
$2,500,001 - $5,000,000		24			89,340		16.7	%			28			99,800		22.1	%
$5,000,001 - $7,500,000		5			29,972		5.6	%			13			83,259		18.4	%
$7,500,001 - $10,000,000		8			69,688		13.0	%			4			32,538		7.2	%
$10,000,001 +		15			243,594		45.5	%			8			117,824		26.1	%
		197		$	535,250		100.0	%			207		$	451,591		100.0	%

As of December 31, 2016, the average outstanding mortgage balance was $2.7 million (December 31, 2015 – $2.2 million), and the median outstanding mortgage balance was $0.8 million (December 31, 2015 – $1.0 million).

Conference call

Interested parties are invited to participate in a conference call with management on Thursday, February 9, 2017 at 4:00 p.m. EST.

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 February 22, 2017) please call 1 (855) 859-2056, Conference ID 19831052.

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 Income Tax Act. Accordingly, Atrium 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