INVESTOR PRESENTATION June 2019 FORWARD-LOOKING STATEMENTS This - - PowerPoint PPT Presentation
INVESTOR PRESENTATION June 2019 FORWARD-LOOKING STATEMENTS This - - PowerPoint PPT Presentation
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
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 - $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
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FINANCIAL STRENGTH AND STABILITY
$ millions Mar 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Mortgages receivable $706 $683 $627 $531 Foreclosed properties 17 17 1 1 Total assets $723 $700 $628 $532 Bank debt and BAs $141 $148 $144 $ 145 Convertible debenture $152 $157 126 101 Other liabilities 7 8 9 7 Total liabilities $300 $313 279 253 Shareholders’ equity 423 387 349 279 Total liabilities and equity $723 $700 $628 $532
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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 fees $15.8 $13.4 $58.3 $50.4 Financing costs 4.2 3.4 15.3 12.7 Mortgage servicing and management fees 1.7 1.5 6.3 5.5 General and administrative 0.3 0.3 1.1 1.2 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
EXCELLENT OPERATING RESULTS
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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
STRONG AND CONSISTENT RETURNS
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0% 2% 4% 6% 8% 10% 12% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019 Rate
Atrium Mortgage Investment Corporation - Return on Equity 5-year Government of Canada bond 1-year Government
- f Canada treasury
bill - 1.7% Q1 2019 - 9.1% Q1 2019 – 1.7%
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 Q1 2019 Atrium MIC 5 year Canada bond yields Difference
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PRIME BASED LOANS PERCENTAGE OF PORTFOLIO Q4 2017 – Q1 2019
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0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 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
% prime based mortgages
Weighted average mortgage rate
% prime based mortgages Weighted average mortgage interest rate
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% 60.6%
50% 55% 60% 65% 70% 75% 2012 2013 2014 2015 2016 2017 2018 Q1 2019
Since going public in 2012
Loan-to-Value
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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 0.20%
- 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 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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LENDING TEAM
EXPERIENCE + GEOGRAPHIC DIVERSIFICATION
5 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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GEOGRAPHIC PORTFOLIO DIVERSIFICATION
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March 31, 2019
GTA 65.3% Non-GTA Ontario 3.4% Alberta 2.1% British Columbia 29.2%
ONTARIO PORTFOLIO
Commercial 19.2% Single Family 10.2% Condo Corps. 0.6% Low Rise 35.4% Mid Rise 17.7% High Rise 16.9%
Ontario Portfolio : $486,236,107 PROPERTY TYPE Q1 2019 LOCATION Q1 2019
GTA 95.1% Hamilton 2.8% Ottawa 1.4% Other 0.7%
MAINTAIN LOW RISK PORTFOLIO
ONTARIO PROFILE
March 31, 2019 80.7% 19.3%
First mortgages Other ranks <75% >75%
85.0% 15.0%
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Mortgage rank Loan-to-value: 64.9%
COMMERCIAL REAL ESTATE Greater Toronto Area- Vacancy Rates
Rate
7.6% 2.7% 1.6% 1.1% 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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MONTHLY NEW HOME SALES: GTA
2018 2016 2017 Low Rise: 19,574 High Rise: 21,991 High Rise: 29,132 TOTAL: 41,565 Low Rise: 18,365 TOTAL: 47,497 High Rise: 21,330 Low Rise: 3,831 TOTAL: 25,161
RESIDENTIAL REAL ESTATE Greater Toronto Area- Home Prices
Source: Altus Group
UNSOLD INVENTORY Greater Toronto Area
Source: Altus Group
Loan Example #1
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 1st 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%
- f the loan
COMMERCIAL LEASE UP AND REPOSITIONING
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Loan Example #2
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
MULTI-RESIDENTIAL ACQUISITION
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B.C. PORTFOLIO
B.C. Portfolio : $206,622,569 PROPERTY TYPE Q1 2019 LOCATION Q1 2019
Mixed Use and Commercial 13.7% Low Rise 21.9% Mid Rise 34.0% High Rise 26.5% House & Apt. 3.9%
Greater Vancouver 100%
METRO VANCOUVER COMMERCIAL MARKET
RESIDENTIAL REAL ESTATE NEW HOME MARKET - SALES
Source: Urban Analytics
14,035 20,280 17,541 17,585 15,317
RESIDENTIAL REAL ESTATE NEW HOME MARKET - INVENTORY
Source: Urban Analytics 8,223 4,097
B.C. Loan Example
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
$13.5 million
Interest rate
Greater of 8% or Prime + 4.05% per annum
Term
12 months
Loan-to-Purchase Price
67.5%
Loan-to-value
45.0%
Guarantee
Corporate and Personal guarantees for 100%
- f the loan
INDUSTRIAL REPOSITIONING
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0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 RBC TD Scotiabank BMO CIBC CWB Equitable Bank Atrium MIC
BETA OF ATRIUM MIC VS. BANKS
Beta is a measure of the volatility of a security in comparison to the stock market as a whole.
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5-year average
ATRIUM VERSUS THE TSX COMPOSITE TOTAL RETURN SINCE ATRIUM LISTED
100 110 120 130 140 150 160 170 180 190 200 September 4, 2012 December 31, 2012 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 March 31, 2019
Common Shares ($) 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 Q1 2019 Atrium TSX
Steady growth and superior returns
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