Atrium Mortgage Investment (AI) Q2 2024 earnings summary

Executive summary

• Achieved record mortgage portfolio of CAD 907.8 million as of June 30, 2024, up from CAD 893.6 million at the start of the year and CAD 824.6 million in Q2 last year, despite challenging real estate market conditions.

• Q2 2024 net income was CAD 11.5 million, with earnings per share of CAD 0.26; year-to-date EPS reached CAD 0.53, outpacing the fixed dividend rate of CAD 0.45.

• Revenues for Q2 2024 were CAD 24.9 million, a 5.9% increase from Q2 2023; six-month revenue was CAD 50.1 million, up 6.1%.

• Maintained high-quality portfolio: 96.8% in first mortgages, 89.5% below 75% loan-to-value, with an average LTV of 64.4%.

• Amended credit facility, increasing maximum to CAD 340 million and adding Royal Bank to the lending syndicate.

Financial highlights

• Q2 2024 revenue was CAD 24.9 million (up 5.9% year-over-year); net income was CAD 11.5 million (down 20.1% year-over-year).

• Allowance for mortgage losses increased to CAD 29.3 million (3.23% of portfolio) from CAD 22.6 million (2.53%) at year-end.

• Book value per share at June 30, 2024 was CAD 11.06, down from CAD 11.19 a year earlier.

• Average mortgage rate dropped to 10.93% in Q2 from 11.25% in Q1, mainly due to Bank of Canada rate cuts.

• Dividend payout for six months was CAD 0.45 per share, matching prior year.

Outlook and guidance

• Management expects continued soft real estate market for the remainder of 2024, with market recovery anticipated in 2025 as interest rates and construction costs decline.

• Focus remains on defensive lending in preferred sectors and maintaining portfolio quality.

• Targeting higher originations in single-family and select commercial sectors to further de-risk the portfolio.

• Anticipates fewer active non-bank lenders, potentially benefiting from reduced competition.