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 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 - $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 3
ACQUISITION FINANCING COMMERCIAL REDEVELOPMENT 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 4
ACQUISITION FINANCING COMMERCIAL REPOSITIONING 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 5
SINGLE FAMILY RESIDENCE LOAN OWNER OCCUPIED HOUSE LOAN 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 6
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 7
CONSISTENT DIVIDENDS Equity-type return on a fixed-income-type investment 12.0% Atrium listed Atrium MIC TSX on the TSX September 2012 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Atrium yield based upon book value 8
STEADY GROWTH MORTGAGE PORTFOLIO $800 $700 $600 $500 Millions $400 $300 $200 $100 $0 QUARTERLY REVENUES $18 $16 $14 $12 $10 Millions $8 $6 $4 $2 $0 9
STRONG AND CONSISTENT RETURNS Atrium Mortgage Investment Corporation - Return on Equity 12% 10% 2018 - 9.2% 8% Rate 6% 4% 5-year Government of Canada bond 2018 - 2.1% 2% 1-year Government of Canada treasury bill - 1.8% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10
FINANCIAL STRENGTH AND STABILITY $ millions Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Mortgages $683 $627 $531 $448 receivable Foreclosed 17 1 2 0 properties Total assets $700 $628 $532 $448 Bank debt and BAs $148 $144 $ 145 67 Convertible $157 126 101 100 debenture Other liabilities 8 9 7 6 Total liabilities $313 279 253 173 Shareholders’ equity 387 349 279 275 Total liabilities and $700 $628 $532 $448 equity 11
EXCELLENT OPERATING RESULTS Year 2018 Year 2017 Year 2016 Year 2015 12 months 12 months 12 months 12 months millions millions millions millions Mortgage interest and $58.3 $50.4 $44.0 $40.2 fees Financing costs 15.3 12.7 10.5 9.6 Mortgage servicing and 6.3 5.5 4.7 4.2 management fees General and 1.1 1.2 1.2 1.2 administrative 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 12
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 0.15% No performance fee Performance fee None Underwriters in two offices knowledgeable 1.10% Total expenses about local markets of assets 13
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 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 Atrium MIC 5 year Canada bond yields Difference 14
MAINTAIN LOW RISK PORTFOLIO PORTFOLIO LOAN TO VALUE Atrium MIC average loan-to-value 75% 70% Loan-to-Value 65% 60% 55% 50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 MICs are lenders, not owners 15
MORTGAGE PORTFOLIO TURNOVER 100% Repayments/Average of Mortgages Receivable 80% 60% 57.2% 47.3% 40% 44.8% 42.8% 42.2% 35.9% 35.3% 20% 0% 2012 2013 2014 2015 2016 2017 2018 16
MAINTAIN LOW RISK PORTFOLIO HIGH 1ST MORTGAGES & LOW RISK UNDERWRITING Atrium Loan-t0-value under 75% December 31, 2018 84% 89% First mortgages Other ranks <75% 16% >75% 11% 17
GEOGRAPHIC PORTFOLIO DIVERSIFICATION Greater Toronto Area 63.0% Greater Toronto Area 69.0% Non-GTA Ontario 2.9% Saskatchewan 0.9% Non-GTA Ontario 4.3% Alberta 19.5% Alberta British Columbia British Columbia 2.3% 7.7% 30.4% Alberta exposure reduced to 2.3% March 31, 2015 December 31, 2018 18
LENDING TEAM EXPERIENCE + GEOGRAPHIC DIVERSIFICATION Originator has 25 years of lending experience 4 originators, many with up to 25 years of lending experience Geographic diversification reduces risk 19
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 Loblaw Companies Limited; as well as a Chair of the Board of Directors of Gluskin Sheff + Associates, Inc. Maurice (Maish) Director of Pure Multi-Family REIT, Kew Media Group and Cliffside Capital Ltd. Former CFO of Greenwin Kagan Properties and ResREIT. 20
COMMERCIAL REAL ESTATE Greater Toronto Area- vacancy rates 2014 2015 2016 2017 2018 15% 14% 13% 12% 11% 10% 9% 8% Rate 7% 6% 5% 4% 3% 2% 1% 0% Office - Overall Office - Downtown Industrial Apartment 21
COMMERCIAL MARKET METRO VANCOUVER OFFICE MARKET 22
COMMERCIAL MARKET METRO VANCOUVER INDUSTRIAL MARKET 23
RESIDENTIAL REAL ESTATE Resale Home Market Benchmark Price Change (YoY) GTA Toronto 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Composite Condominium Townhouse Semi-Detached Single Family $712,400 $881,700 $1,097,400 $764,200 $845,000 $509,700 $541,000 $633,900 $907,900 $567,200 24
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