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

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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


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INVESTOR PRESENTATION

June 2019

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SLIDE 2

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

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SLIDE 7

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%

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SLIDE 8

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

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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% 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%

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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%

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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%

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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

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RESIDENTIAL REAL ESTATE Greater Toronto Area- Home Prices

Source: Altus Group

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UNSOLD INVENTORY Greater Toronto Area

Source: Altus Group

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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%

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METRO VANCOUVER COMMERCIAL MARKET

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RESIDENTIAL REAL ESTATE NEW HOME MARKET - SALES

Source: Urban Analytics

14,035 20,280 17,541 17,585 15,317

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RESIDENTIAL REAL ESTATE NEW HOME MARKET - INVENTORY

Source: Urban Analytics 8,223 4,097

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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

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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 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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