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20(cid:446)(cid:416)
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CANADA’S PREMIER NON-BANK LENDER™
Table
of Contents
1
5
(cid:446)(cid:417)
(cid:447)(cid:214)
Earnings Press Release
Management’s Discussion and Analysis
Interim Consolidated Financial Statements
Corporate Directory
About Atrium Mortgage Investment Corporation
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Year
Regular dividend
Bonus dividend
Total dividends paid
Earnings per share (basic)
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(cid:144)(cid:416)(cid:234)(cid:420)(cid:214)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:418)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:213)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:446)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:447)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:213)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:446)
(cid:144)(cid:416)(cid:234)(cid:420)(cid:448)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:417)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:447)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:419)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:448)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:448)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:419)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:418)
FOR IMMEDIATE RELEASE
ATRIUM MORTGAGE INVESTMENT CORPORATION
ANNOUNCES YEAR END RESULTS AND SPECIAL DIVIDEND
TORONTO: February 9, 2021 – Atrium Mortgage Investment Corporation (TSX: AI, AI.DB.B, AI.DB.C,
AI.DB.D, AI.DB.E) today released its financial results for the year ended December 31, 2020.
Highlights
Mortgage portfolio of $745.3 million, 2.1% increase from prior year
High quality mortgage portfolio
o 81.7% of portfolio in first mortgages
o 91.4% of portfolio is less than 75% loan to value
o average loan-to-value is 61.0%
Revenues of $65.0 million
Net income of $39.2 million
$0.93 basic and diluted earnings per share for the year ended December 31, 2020
$0.02 per share special dividend to shareholders of record December 31, 2020
“We are very pleased with our 2020 results. Our mortgage portfolio grew by 6.5%, or $45.5 million, in Q4
on the strength of a record dollar volume of new loan originations. Our mortgage portfolio continues to
show strong resilience to the economic downturn caused by COVID-19 and we continue to have very little
exposure to the hardest hit sectors- retail, hospitality and long-term care/retirement homes. The mortgage
portfolio ended the year with an average loan to value of 61.0%. Atrium earned net income of $39.2 million
in 2020, a record for the company, and up 1.6% from the prior year. Earnings per share exceed our total
dividends for the year, even after expensing a $3.8 million loan loss provision in 2020. Atrium increased
its aggregate loan loss provision to 1.23% of our mortgage portfolio, which will help protect the balance
sheet from the continuing impact of COVID-19 in 2021,” said Rob Goodall, CEO of Atrium. “Lastly, we
are in the process of significantly increasing the size of our loan origination team and feel optimistic about
our ability to grow our portfolio in 2021.”
Conference call
Interested parties are invited to participate in a conference call with management Wednesday, February 10,
2021 at 4:00 p.m. ET to discuss the results. To participate or listen to the conference call live, please call
1 (888) 241-0551 or (647) 427-3415, conference ID 5157028. For a replay of the conference call (available
until February 23, 2021) please call 1 (855) 859-2056, conference ID 5157028.
Results of operations
Atrium ended the year with assets of $755.3 million, up from $743.6 million at the end of 2019. Revenues
were $65.0 million, a decrease of 1.7% from the prior year. Net income for 2020 was a record $39.2 million,
an increase of 1.6% from the prior year. Revenues fell slightly as a result of a lower weighted average
interest rate in 2020 due to the drop in the Prime Rate in March 2020, coupled with a lower mortgage
1
portfolio balance in the second quarter of 2020 as we scaled back lending at the beginning of the COVID-
19 pandemic. Net income increase as a result of lower interest expenses due to the repayment of convertible
debentures and a lower weighted average cost of borrowing on our credit facility in 2020 compared to 2019.
These lower interest expenses were offset largely by the higher provision for mortgage losses. Atrium’s
allowance for mortgage losses at December 31, 2020 totaled $9.2 million, or 1.23% of the mortgage
portfolio.
Basic and diluted earnings per common share were $0.93 for the year ended December 31, 2020, compared
with $0.97 basic and $0.96 diluted earnings per common share for the prior year.
Mortgages receivable as at December 31, 2020 were $739.0 million, an increase of 1.6% from December
31, 2019. During the year ended December 31, 2020, $271.3 million of mortgage principal was advanced
and $254.7 million was repaid. The weighted average interest rate on the mortgage portfolio at December
31, 2020 was 8.65%, compared to 8.81% at December 31, 2019.
Atrium collected 98% of the mortgage interest due in January, which is in line with historical collection
rates.
Financial summary
Consolidated Condensed Statements of Income and Comprehensive Income
Revenue
Mortgage servicing and management fees
Other expenses
Impairment loss on investment property
Provision for mortgage losses
Income before financing costs
Financing costs
Net income and comprehensive income
Basic earnings per share
Diluted earnings per share
Dividends declared
Mortgages receivable, end of year
Total assets, end of year
Shareholders’ equity, end of year
Analysis of mortgage portfolio
Year
ended
December 31
2020
Year
ended
December 31
2019
Year
ended
December 31
2018
65,019 $
(7,036)
(1,410)
−
(3,760)
52,813
(13,625)
39,188 $
66,171 $
(6,996)
(1,086)
(806)
(1,490)
55,793
(17,225)
38,568 $
0.93 $
0.93 $
0.97 $
$
0.96
58,316
(6,279)
(1,142)
−
(1,800)
49,095
(15,326)
33,769
0.95
0.94
38,970 $
38,314
$
33,658
739,025 $
755,315 $
462,887 $
727,325 $
743,631 $
455,520 $
682,721
699,750
387,306
$
$
$
$
$
$
$
$
Property Type
(outstanding amounts in 000s)
Mid-rise residential
Low-rise residential
High-rise residential
House and apartment
Condominium corporation
Residential portfolio
Commercial
Mortgage portfolio
December 31, 2020
Outstanding % of
December 31, 2019
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
26.8%
23.4%
22.8%
6.1%
0.3%
79.4%
20.6%
100.0%
23 $
32
13
91
14
173
19
192 $
177,242
216,144
157,758
66,083
2,659
619,886
109,859
729,745
24.3%
29.6%
21.6%
9.1%
0.4%
85.0%
15.0%
100.0%
25 $
21
16
63
13
138
20
158 $
199,525
174,362
170,074
45,522
2,165
591,648
153,666
745,314
2
Number of
Location of underlying property mortgages
119
Greater Toronto Area
21
Non-GTA Ontario
16
British Columbia
2
Alberta
158
Number of
Location of underlying property mortgages
153
Greater Toronto Area
20
Non-GTA Ontario
15
British Columbia
4
Alberta
192
$
$
$
$
December 31, 2020
Outstanding
amount
548,447
21,706
163,685
11,476
745,314
Percentage
outstanding
73.6%
2.9%
22.0%
1.5%
100.0%
Weighted
average
loan to value
63.2%
64.7%
51.0%
98.5%
61.0%
Weighted
average
interest rate
8.68%
8.32%
8.57%
8.94%
8.65%
December 31, 2019
Outstanding
amount
509,299
20,625
184,680
15,141
729,745
Percentage
outstanding
69.8%
2.8%
25.3%
2.1%
100.0%
Weighted
average
loan to value
64.1%
57.6%
46.9%
64.0%
59.5%
Weighted
average
interest rate
8.85%
8.33%
8.77%
8.80%
8.81%
For further information on the financial results, and further analysis of the company’s mortgage portfolio,
please refer to Atrium’s consolidated financial statements and its management’s discussion and analysis for
the year ended December 31, 2020, available on SEDAR at www.sedar.com, and on the company’s website
at www.atriummic.com.
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 Canada
Income Tax Act, so 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 about
Atrium, please refer to regulatory filings available at www.sedar.com or investor information on Atrium’s
website at www.atriummic.com.
For additional information, please contact
Robert G. Goodall
President and Chief Executive Officer
(416) 867-1053
info@atriummic.com
www.atriummic.com
Jennifer Scoffield
Chief Financial Officer
3
MD&A
Management’s Discussion(cid:1)
And Analysis
(cid:128)(cid:390)(cid:147)(cid:399)(cid:1)(cid:38)(cid:149)(cid:407)(cid:390)(cid:407)(cid:1)
(cid:35)(cid:390)(cid:389)(cid:390)(cid:396)(cid:388)(cid:390)(cid:399) (cid:418)(cid:417), 20(cid:446)(cid:416)
CANADA’S PREMIER NON-BANK LENDER™
6 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis
December 31, 2020
Our business
Atrium is a mortgage lender filling the lending gap that results from the limited number of financial
institutions operating in Canada. We lend in major urban centres and where the stability and
liquidity of real estate are high. Our loan portfolio is high quality but we are able to charge higher
rates than the banks because we offer flexibility, creativity and excellent service. Our mortgages
are secured by all types of residential, multi-residential and commercial real estate located in
Canada, and must all be in strict compliance with our investment policies. Atrium has a 20-year
track record of success and consistency in achieving our strategic objectives: to grow in a
controlled manner by focusing on real estate sectors with the lowest risk profiles.
Our objective is to invest in a diverse portfolio of predominantly first mortgages that are
relatively short-term, to provide our shareholders with stable and secure dividends while
preserving shareholders’ equity, all within the parameters mandated for a Mortgage Investment
Corporation (MIC). Working within conservative risk parameters, we endeavour to maximize
income and dividends through careful underwriting and efficient management of our mortgage
investments.
Information herein is current as of February 9, 2021.
Highlights
Atrium continues to demonstrate strength and stability. For the year ended December 31, 2020, we
had revenues of $65.0 million, down 1.7% from the prior year. Net income was $39.2 million
compared with $38.6 million in the prior year. Basic and diluted earnings per share were $0.93,
compared with $0.97 basic and $0.96 diluted earnings per share in the prior year.
We declared a regular dividend of $0.075 per share for each month in the year, a total of $0.90
for 2020, consistent with dividends of $0.90 for the prior year. In addition, we declared a special
dividend of $0.02, for a total dividend of $0.92 for 2020, compared to $0.96 for the previous year.
For 2021, our board of directors has set the regular dividend rate at $0.90 per annum.
Our regular and special dividends since listing on the Toronto Stock Exchange in 2012 are as
follows:
Revenues $65.0
million,
decreased 1.7%
from prior year
Earnings per share
$0.93 basic
Strong, high quality
mortgage portfolio
81.7%
first mortgages
91.4%
less than 75%
loan-to-value
Mortgages receivable
$739.0 million, up
1.6% from prior year
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
Regular
dividend
$0.80
$0.82
$0.84
$0.86
$0.88
$0.90
$0.90
$0.90
$0.90
Special
dividend
$0.05
$0.07
$0.09
$0.10
$0.04
$0.04
$0.06
$0.02
to be determined
Total dividends
paid
$0.85
$0.89
$0.93
$0.96
$0.92
$0.94
$0.96
$0.92
Earnings per
share (basic)
$0.85
$0.91
$0.94
$0.97
$0.95
$0.95
$0.97
$0.93
We had $739.0 million of mortgages receivable as at December 31, 2020, an increase of 1.6%
from December 31, 2019. During the year, $271.3 million of mortgage principal was advanced
and $254.7 million was repaid. The portfolio has a weighted average remaining term of 9.7 months.
Our focus continues to be lending in the major metropolitan areas of Ontario and British
Columbia.
We focus on
first mortgages
with high liquidity
and low
loan-to-value
ratios
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 7
Investment portfolio
Our mortgage portfolio consisted of 158 mortgage loans and aggregated $745.3 million at December 31, 2020, an
increase of 2.1% from December 31, 2019.
Property Type
(outstanding amounts in 000s)
Mid-rise residential1,5
Low-rise residential1
High-rise residential1,5
House and apartment2
Condominium corporation3
Residential portfolio
Commercial 4
Mortgage portfolio
Accrued interest receivable
Mortgage discount
Unamortized origination fees
Allowance for mortgage losses
Mortgages receivable
December 31, 2020
Outstanding % of
December 31, 2019
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
26.8%
23.4%
22.8%
6.1%
0.3%
79.4%
20.6%
100.0%
23
32
13
91
14
173
19
192
25
21
16
63
13
138
20
158
$ 199,525
174,362
170,074
45,522
2,165
591,648
153,666
745,314
3,458
(181)
(416)
(9,150)
$ 739,025
24.3%
29.6%
21.6%
9.1%
0.4%
85.0%
15.0%
100.0%
$ 177,242
216,144
157,758
66,083
2,659
619,886
109,859
729,745
3,780
(224)
(586)
(5,390)
$ 727,325
1) Mortgage loans on properties where the near-term business plan, as vetted by the lender, is to intensify the property into low-rise
residential (detached, semi-detached, townhomes and/or multi-unit residential buildings up to 4 storeys), mid-rise residential (multi-
unit residential buildings from 5-20 storeys and stacked townhomes) or high-rise residential (multi-unit residential buildings over 20
storeys).
2) Mortgage loans on existing single-family or multi-family residential homes and apartment buildings.
3) Mortgage loans to residential condominium corporations for guest suites, superintendent suites and green loans.
4) Mortgage loans on properties where the existing real estate is currently, or the proposed development project after rezoning will be,
mixed use, commercial or industrial.
5) Comparative figures have been reclassified to conform to the revised definition of high-rise and mid-rise residential property types.
Mortgage loans on properties where the near-term business plan, as vetted by the lender, is to intensify the property into high-rise
residential is now defined as multi-unit residential buildings over 20 storeys and mid-rise residential is now defined as multi-unit
residential buildings from 5-20 storeys and stacked townhomes. Previously, 14 storeys had been used as the upper limit for mid-rise
and over 14 storeys for high-rise. The company believes the revised definition more accurately reflects the distinction between mid-rise
and high-rise buildings. These figures as at December 31, 2019, as reported previously were $160,456 for mid-rise residential and
$174,544 for high-rise residential.
A summary of our mortgages by loan type is presented below.
Loan type
(outstanding amounts in 000s)
Term loans
Construction loans
December 31, 2020
Outstanding % of
December 31, 2019
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
144
14
158
$ 624,089
121,225
$ 745,314
83.7%
16.3%
100.0%
177
15
192
$ 589,967
139,778
$ 729,745
80.9%
19.1%
100.0%
A summary of our mortgages by size is presented below.
Mortgage amount
(outstanding amounts in 000s)
$0 - $2,500,000
$2,500,001 - $5,000,000
$5,000,001 - $7,500,000
$7,500,001 - $10,000,000
$10,000,001 +
December 31, 2020
Outstanding % of
December 31, 2019
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
86
28
14
3
27
158
$
50,405
105,560
85,335
26,165
477,849
$ 745,314
6.8%
14.2%
11.4%
3.5%
64.1%
100.0%
123
25
15
6
23
192
$
84,043
91,707
91,685
53,373
408,937
$ 729,745
11.5%
12.6%
12.6%
7.3%
56.0%
100.0%
8 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
As of December 31, 2020, the average outstanding mortgage balance was $4.7 million (December 31, 2019 – $3.8
million), and the median outstanding mortgage balance was $1.3 million (December 31, 2019 – $0.9 million).
The tables below show our mortgage portfolio by location of the underlying property and type of mortgage. The
weighted average interest rates shown exclude the lender fees paid by the borrower, which reflect the yield to Atrium
including any mortgage discount or premium. As at December 31, 2020, 62.3% of our portfolio was priced at floating
rates, the majority with rate floors, down from 68.9% at December 31, 2019.
Location of underlying property
(outstanding amounts in 000s)
Greater Toronto Area
Non-GTA Ontario
British Columbia
Alberta
Location of underlying property
(outstanding amounts in 000s)
Greater Toronto Area
Non-GTA Ontario
British Columbia
Alberta
December 31, 2020
Number of
mortgages
Outstanding
amount
Percentage
outstanding
Weighted Weighted
average
average
interest rate
loan to value
119
21
16
2
158
$ 548,447
21,706
163,685
11,476
$ 745,314
73.6%
2.9%
22.0%
1.5%
100.0%
63.2%
64.7%
51.0%
96.5%
61.0%
8.68%
8.32%
8.57%
8.94%
8.65%
December 31, 2019
Number of
mortgages
Outstanding Percentage
outstanding
amount
Weighted
average
loan to value
Weighted
average
interest rate
153
20
15
4
192
$ 509,299
20,625
184,680
15,141
$ 729,745
69.8%
2.8%
25.3%
2.1%
100.0%
64.1%
57.6%
46.9%
64.0%
59.5%
8.85%
8.33%
8.77%
8.80%
8.81%
We have an exceptionally high proportion of our portfolio invested in first mortgages (81.7%), which is one of our
core strategies.
At December 31, 2020, the weighted average loan-to-value ratio in our mortgage portfolio was 61.0%, with 91.4%
of the portfolio below 75% loan-to-value. (At December 31, 201p9, the weighted average loan-to-value ratio in our
mortgage portfolio was 59.5%, with 92.0% of the portfolio below 75% loan-to-value.)
Type of mortgage
(outstanding amounts in 000s)
First mortgages
Conventional
Non-Conventional
Other
Second and third mortgages
Conventional
Non-conventional
December 31, 2020
Number of Outstanding
amount
mortgages
Weighted
Percentage average
outstanding interest rate
121
1
13
135
20
3
23
158
$ 596,270
10,041
2,165
608,476
82,868
53,970
136,838
$ 745,314
80.0%
1.4%
0.3%
81.7%
8.30%
9.00%
7.32%
8.31%
11.1%
7.2%
18.3%
100.0%
9.84%
10.65%
10.16%
8.65%
Type of mortgage
(outstanding amounts in 000s)
First mortgages
Conventional
Non-Conventional
Other
Second and third mortgages
Conventional
Non-conventional
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 9
December 31, 2019
Number of
mortgages
Outstanding
amount
Weighted
Percentage average
outstanding interest rate
146
1
14
161
28
3
31
192
$ 590,707
4,305
2,658
597,670
77,871
54,204
132,075
$ 729,745
81.0%
0.6%
0.3%
81.9%
8.47%
8.50%
7.39%
8.47%
10.7%
7.4%
18.1%
100.0%
10.05%
10.81%
10.36%
8.81%
Conventional mortgages are those with a loan-to-value of less than or equal to 75%, which is the industry standard for
determining that a mortgage is conventional. Non-conventional mortgages are those with a loan-to-value in excess of
75%.
The weighted average term remaining for our mortgage portfolio at December 31, 2020 is 9.7 months (December
31, 2019 – 8.7 months).
Our business
In Canada there is a lending gap due to the limited number of financial institutions operating. Our business is to help
fill that gap by focusing on loans that cannot be placed with larger financial institutions but represent an acceptable
underwriting risk. Our borrowers benefit from our efficient, thorough and fast underwriting process. We lend in major
urban centres where the stability and liquidity of real estate are at the highest levels.
Our policy is that the weighted average loan-to-value ratio of our mortgage portfolio, as a whole, at the time of
underwriting each loan in our portfolio, will not exceed 75%. At December 31, 2020, the weighted average loan-to-
value ratio of the mortgage portfolio was considerably lower than that, at 61.0%, compared to 59.5% at December 31,
2019.
A typical loan in our portfolio has an interest rate of 7.75% to 10% per annum, a one or two-year term and monthly
interest-only mortgage payments.
Our lending parameters are as follows:
Mortgages on residential and commercial properties up to a maximum of 75% of appraised value.
Loans on single family residences up to 75% of appraised value.
Mortgages on income-producing real estate up to a maximum of 85% of appraised value.
Construction loans up to a maximum of 90% of cost.
Loans to condominium corporations.
Mortgage loan amounts are generally $300,000 to $30 million. The largest single mortgage in our mortgage
portfolio as at December 31, 2020 was $43.0 million (December 31, 2019 – $43.0 million). For loan amounts in excess
of $30 million, we generally co-lend with a financial institution or private lender.
Our investment policies, which may be changed by our board of directors (“board”), are as follows:
We may invest only in residential mortgages, commercial mortgages, commercial mortgage backed
securities and certain related investments.
All investments must be mortgages on the security of real property situated within Canada, loans to
condominium corporations, or certain permitted interim investments.
Commercial mortgages may not constitute more than 50% of our total assets at any time.
The term of the mortgage may generally be no greater than ten years.
Mortgages are subject to the following geographic limits at the time of funding: Ontario – maximum 80%
of total mortgages; Alberta – maximum 15% of total mortgages; British Columbia – maximum of 35% of
total mortgages.
No single borrower may account for more than 15% of our total assets.
All mortgages are supported by external appraisals by a qualified appraiser. All mortgages, except
mortgages secured by one to six residential units, are also supported by environmental audits.
The maximum initial loan-to-value ratio of an individual mortgage is 85% including any prior ranking
encumbrances, and the weighted average loan-to-value ratio of our mortgage portfolio at the time of
underwriting each loan may not exceed 75%.
10 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
Our ratio of debt to equity must be less than 1:1.
We do not invest directly in real property, although real property may be acquired by foreclosing on a
mortgage.
A mortgage investment of: (i) $2,000,000 or more requires approval of the board; (ii) between $1,000,000
and $2,000,000 requires approval of three members of the board, including at least two independent
directors; and (iii) $1,000,000 or less requires approval of any one member of the board. For loans
previously approved, the approval of one member of the board is required for changes to the loan that do
not exceed the approved amount by more than $200,000 and/or for minor technical amendments that do
not change other underwriting considerations, provided the loan-to-value ratio increases by less than 5%
and the ratio is 75% or less. We may invest in interim investments that are guaranteed by the Government
of Canada or of a province or territory of Canada or deposits or certificates of deposits, acceptances and
other similar instruments issued, endorsed or guaranteed by a Schedule I Bank in any amount without prior
board approval.
We may not make unsecured loans to, nor invest in securities issued by, our manager or its affiliates, nor
make unsecured loans to the directors or officers of the manager.
We may not make any investment, or incur any indebtedness, that would result in our not qualifying as a
MIC.
Our objective is to invest in a diverse portfolio of predominantly first mortgages that are relatively short-term,
to provide our shareholders with stable and secure dividends while preserving shareholders’ equity, all within
the parameters mandated for a MIC. Working within conservative risk parameters, we endeavour to maximize
income and dividends through the sourcing and efficient management of our mortgage investments.
We are a non-bank lender and invest in mortgages secured by all types of residential, multi-residential and commercial
real property located in Canada, subject to compliance with our investment policies. The types of properties that we
finance include residential houses, small multi-family residential properties comprised of six or fewer units, residential
apartment buildings, commercial properties and store-front retail properties, commercial properties and residential
and commercial land development sites. We also finance construction projects and provide short-term bridge financing
for real estate developers. Our strategy is to grow in a controlled manner by diversifying geographically, and focusing
on real estate sectors with the lowest risk profiles.
We qualify as a MIC and are restricted from any activity that would result in us failing to qualify as a MIC. In order
to qualify as a MIC, we must satisfy the requirements in subsection 130.1(6) of the Income Tax Act (Canada) (“ITA”)
throughout the taxation year. Among the requirements are:
We can only invest or manage funds and cannot manage or develop real property.
We cannot own debts secured on real property situated outside Canada, debts owing by non-residents
unless such debts were secured on real property situated in Canada, shares of the capital stock of
corporations not resident in Canada, or real property situated outside of Canada or any leasehold interest
in such property.
No shareholder (together with related persons, as defined in the ITA) may at any time own, directly or
indirectly, more than 25% of our common shares.
The cost for tax purposes of cash on hand, debts secured on specified residential properties, and funds on
deposit with a Canada Deposit Insurance Fund or Régie de l’assurance-dépôts du Québec-insured
institution or credit union must constitute at least 50% of the cost of all of our property.
The cost for tax purposes of any interests in real property (including leaseholds but excepting real or
immovable property acquired by foreclosure after default by the mortgagor) may not exceed 25% of the
cost of all of our property.
There are certain restrictions as to our maximum debt-to-equity ratio.
We are managed by Canadian Mortgage Capital Corporation (the “manager” or “CMCC”), which is our exclusive
manager and arranges and services our mortgage loans and otherwise directs our affairs and manages our business.
For explanations as to some of the terms used herein, please refer to our Annual Information Form for the year ended
December 31, 2020, which is available at www.sedar.com.
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 11
Recent Developments
In March 2020, the World Health Organization declared COVID-19 a global pandemic. The resulting public health
and emergency measures put in place to combat the spread of the virus resulted in a world-wide economic slowdown.
To date, the company has not experienced material changes in the collection of interest and repayments of principal,
however, there is no certainty this will continue going forward.
Atrium’s mortgage portfolio showed strong resilience to the economic downturn throughout 2020. After growing
the portfolio to over $746 million in the first quarter of 2020, we scaled back lending in the second quarter of 2020 in
order to assess the initial impact of COVID-19 on the real estate and financial markets, and to increase our liquidity
so we would be in a position to cautiously resume lending later in the year. In the third quarter of 2020, we began to
actively seek new lending opportunities, which resulted in a record dollar volume of new loan originations in the
fourth quarter of 2020. We continue to lend defensively, focusing on lower leverage first mortgages on high-quality
properties and strong borrowers. We are currently in the process of significantly increasing the size of our loan
origination team and feel optimistic about our ability to grow our mortgage portfolio in 2021.
The Bank of Canada reduced interest rates three times in March 2020, resulting in a drop of 1.5% over a 25 day
span. At the time, approximately 73% of our mortgage portfolio was priced at floating rates, the majority of which
had rate floors. These rate floors helped protect us from the rapid, significant drop in interest rates, with our weighted
average interest rate decreasing 21 basis points, from 8.81% as at December 31, 2019 to 8.60% as at March 31, 2020.
The weighted average interest rate on our portfolio was 8.55% as at June 30, 2020, 8.53% as at September 30, 2020
and ended the year at 8.65%. These lower weighted average interest rates contributed to the decline in interest revenue
for the year ended December 31, 2020. As noted above, in this current market, our focus is on high quality properties
and borrowers as opposed to higher yields.
The decrease in interest rates had a positive impact on our interest expenses for the year. The annualized weighted
average interest rate on our credit facility for the year ended December 31, 2020 was 3.04%, down from 4.07% for
the prior year. Scaling back our lending in the second quarter of 2020, coupled with strong repayments that quarter,
allowed us to repay our 5.25% convertible debentures in full in May 2020 and repay a portion of our credit facility,
both of which contributed to lower financing costs in 2020.
On December 1, 2020, we renewed our credit facility, extending the term to January 11, 2023 and increased the
facility from $210 million to $240 million. This strengthened our balance sheet and provides us with increased
liquidity to grow our portfolio in an accretive manner. The two year term ensures that the credit facility will be
available to us throughout the pandemic.
Our mortgage interest collection rates throughout 2020 were consistent with historical collection rates. As of
February 9, 2021, we collected 98% of the interest due in January.
The increase in our allowance for mortgage losses during the year was a direct response to the economic uncertainty
caused by the pandemic. We expensed a loan loss provision of $3.76 million for the year ended December 31, 2020,
resulting in an allowance for mortgage losses of $9.15 million as at December 31, 2020. This is in line with the
Canadian chartered banks who all significantly increased their allowance for loan losses in 2020. We use an expected
credit loss model to determine our provision for mortgage losses. In response to COVID-19, this methodology was
modified to include a post-model overlay adjustment to account for the uncertainty and difficulty in forecasting future
economic conditions. The financial reports of other lenders and financial institutions were reviewed to inform and
modify our estimates and assist in determining this overlay adjustment.
Fortunately, we have very limited exposure to the retail, hospitality, long-term care and retirement home sectors
which have been some of the hardest hit sectors during the pandemic.
In April 2020, in response to the market disruption caused by the pandemic, we suspended our dividend
reinvestment plan (“DRIP”). The DRIP was reinstated on January 14, 2021. In May 2020, we filed a notice for a
normal course issuer bid (“NCIB”) under which we may purchase up to 4,000,000 common shares if we believe the
market price of our shares is attractive and the purchase would be an appropriate use of corporate funds and in our
best interest. To date, we have not purchased any shares under the NCIB.
The duration and impact of COVID-19 continues to be unknown and it is not possible to reliably estimate the impact
that the length and severity of this pandemic will have on interest rates, capital markets and the financial results and
condition of the company in future periods. We believe our conservative lending approach and our focus on high
quality properties and borrowers will enable our portfolio to remain resilient during these challenging times.
12 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
Results of Operations
(In this section, dollars are in thousands of Canadian dollars, except per share amounts)
Financial summary
Revenue
Mortgage servicing and management fees
Other expenses
Impairment loss on investment property
Provision for mortgage losses
Income before financing costs
Financing costs
Net income and comprehensive income
Basic earnings per share
Diluted earnings per share
Dividends declared
Mortgages receivable, end of year
Total assets, end of year
Shareholders’ equity, end of year
Summary of quarterly results (unaudited)
$
$
Year Year Year
ended
ended
ended
December 31
December 31
December 31
2018
2019
2020
58,316
66,171
65,019
(6,279)
(6,996)
(7,036)
(1,142)
(1,086)
(1,410)
−
(806)
−
(1,800)
(1,490)
(3,760)
49,095
55,793
52,813
(15,326)
(17,225)
(13,625)
33,769
38,568
39,188
$
$
$
$
$
$
0.93
0.93
$
38,970
$ 739,025
$ 755,315
$ 462,887
$
$
$
0.97
0.96
38,314
$ 727,325
$ 743,631
$ 455,520
$
$
$
0.95
0.94
33,658
$ 682,721
$ 699,750
$ 387,306
Revenue
Mortgage servicing and management fees
Other expenses
Impairment loss on investment property
Provision for mortgage losses
Income before financing costs
Financing costs
Net income and comprehensive income
Basic earnings per share
Diluted earnings per share
Dividends declared
(1,700)
(335)
(1,655)
(341)
(1,904)
(385)
Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019
$ 16,467 $ 15,254 $ 16,241 $ 17,057 $ 17,116 $ 16,712 $ 16,565 $ 15,796
(1,680)
(1,777)
(287)
(349)
− − −
− − − −
(390) (400) (400)
(1,000)
(910)
13,429
14,143
13,931
13,268
(4,359) (4,476) (4,194)
(4,067)
(3,241)
$ 10,027 $ 9,476 $ 9,821 $ 9,864 $ 9,731 $ 9,935 $ 9,667 $ 9,235
$ 0.24 $ 0.22 $ 0.23 $ 0.23 $ 0.23 $ 0.25 $ 0.25 $ 0.24
$ 0.24 $ 0.22 $ 0.23 $ 0.23 $ 0.23 $ 0.25 $ 0.24 $ 0.24
$ 10,391 $ 9,539 $ 9,536 $ 9,504 $ 11,906 $ 8,890 $ 8,870 $ 8,648
(1,816)
(267)
(806)
(300)
13,927
(4,196)
(850)
12,408
(2,932)
(1,000)
13,206
(3,385)
(1,757)
(265)
(1,743)
(285)
14,294
Results of operations – Three months ended December 31, 2020
For the three months ended December 31, 2020, mortgage interest and fees revenues aggregated $16,257, compared
to $16,916 in the comparative period, a decrease of 3.9%. Virtually all our revenues are mortgage interest, therefore,
the decrease in revenue is due to the decrease in the weighted average interest rate which was partially offset by the
increase in our mortgage portfolio from the comparative quarter. A variety of factors affect the changes in the weighted
average interest rate of our mortgage portfolio from quarter to quarter. No single factor is determinative or material
for the mortgage portfolio as a whole, however, such factors include, but are not limited to, changes in prime rate of
interest, the dollar amount of mortgages advanced and/or repaid in the period, the types of properties on which
mortgage loans are advanced and/or repaid in the period, the location of the underlying properties on which mortgage
loans are advanced and/or repaid, the types of mortgage loans advanced and/or repaid during the period and whether
the mortgage loans advanced and/or repaid during the period are conventional or non-conventional mortgages. The
weighted average interest rate on our mortgage portfolio was 8.65% at December 31, 2020, compared with 8.81% at
December 31, 2019. We generated net rental income of $210 for the three months ended December 31, 2020 from our
two investment properties compared to net rental income of $200 for the three months ended December 31, 2019
Operating expenses, excluding the provision for mortgage losses, for the three months ended December 31, 2020
were $2,289, compared to $2,083 in the comparative period, an increase of 9.9%. This increase is primarily due to a
increase in mortgage servicing and management fees, professional fees and directors’ expense. Mortgage servicing
and other fees paid to the manager (that is, the management fee plus HST) aggregated $1,904 for the three months
ended December 31, 2020, compared with $1,816 in the prior year period. This increase was due to the increase in the
size of the mortgage portfolio, as mortgage servicing fees are calculated and paid monthly based on the mortgage
portfolio balance outstanding during the month. Professional fees increased as a result of higher audit and legal costs
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 13
during the quarter compared to the prior year period. Directors’ expense increased by $10, or 19.2% as a result of the
increase in director fees for 2020. We incurred a fair value adjustment on deferred share units of $28 resulting from
the new deferred share unit plan that became effective on January 1, 2020. The provision for mortgage losses was
$910 in the quarter, bringing the total allowance to $9,150 at December 31, 2020 compared to $300 in the prior year
period for a total allowance of $5,390 at December 31, 2019. In March 2020, the World Health Organization declared
the outbreak of COVID-19 a pandemic. The duration and economic impact of COVID-19 continues to be uncertain.
This continued economic uncertainty has resulted in an increase to the provision for mortgage losses for the quarter
ended December 31, 2020.
Financing costs for the three months ended December 31, 2020 were $3,241, compared to $4,196 in the same
period of 2019, a decrease of 22.8%. Coupon rate interest on convertible debentures was $1,766 for the three months
ended December 31, 2020 compared to $2,174 for the comparative period. This decrease was a result of interest
savings from the repayment of the 5.25% convertible debentures on May 4, 2020. Accretion and other costs were $274
for the three months ended December 31, 2020 compared to $341 for the comparative period. Interest expense on the
credit facility was $1,113 for the three months ended December 31, 2020, down from $1,610 for the comparative
period. This decrease is due to a lower weighted average cost of borrowing in the fourth quarter of 2020 compared to
the fourth quarter of 2019. Prime rate and the rates for bankers’ acceptances were lower in the fourth quarter of 2020
than they were in the comparable period, both of which contributed to the lower interest expense on the credit facility.
Net income and comprehensive income for the three months ended December 31, 2020 was $10,027, an increase
of 3.0% from net income and comprehensive income of $9,731 for the same period in the prior year. Basic and diluted
earnings per common share were $0.24 for the three months ended December 31, 2020, compared with $0.23 basic
and diluted earnings per share for the comparable period in the previous year. The increase in net income and earnings
per share in the current period were a result of the decrease in financing costs, as described above, which was somewhat
offset by a higher provision for mortgage losses in the current quarter due to the continued uncertainty around the
impact of COVID-19.
During the three months ended December 31, 2020, we funded mortgages receivable aggregating $131,024. Of
those advances, $88,661 were first mortgages, representing 67.7% of the total loans funded. British Columbia
advances were $10,004, advances of $245 were on properties in Alberta, $2,180 were non-GTA Ontario and the
remaining $118,595 were for mortgages on properties located in the Greater Toronto Area. There were $85,482 of
repayments during the period.
Results of operations – Year ended December 31, 2020
For the year ended December 31, 2020, mortgage interest and fees revenues aggregated $64,362, compared to $66,095
in the prior year, a decrease of 2.6%. Virtually all our revenues are mortgage interest, therefore, the decrease in revenue
is due to lower weighted average interest rates during the year compared to the prior year as well as a lower average
balance in our mortgage portfolio during the current year compared to the comparative year. A variety of factors affect
the changes in the weighted average interest rate of our mortgage portfolio from year to year. No single factor is
determinative or material for the mortgage portfolio as a whole, however, such factors include, but are not limited to,
changes in prime rate of interest, the dollar amount of mortgages advanced and/or repaid in the year, the types of
properties on which mortgage loans are advanced and/or repaid in the year, the location of the underlying properties
on which mortgage loans are advanced and/or repaid, the types of mortgage loans advanced and/or repaid during the
year and whether the mortgage loans advanced and/or repaid during the year are conventional or non-conventional
mortgages. The weighted average interest rate on our mortgage portfolio was 8.65% at December 31, 2020, compared
to 8.81% at December 31, 2019. We generated net rental income of $657 for the year ended December 31, 2020 from
our two investment properties compared to net rental income of $76 for the year ended December 31, 2019.
Operating expenses, excluding the provision for mortgage losses and impairment loss on investment property, for
the year ended December 31, 2020 were $8,446, compared to $8,082 in the comparative year, an increase of 4.5%.
Mortgage servicing and other fees paid to the manager (that is, the management fee plus HST) aggregated $7,036 for
the year ended December 31, 2020, compared with $6,996 in the prior year. This increase is a result of a higher average
mortgage portfolio balance over the course of the current year, as mortgage servicing fees are calculated and paid
monthly based on the mortgage portfolio balance outstanding during the month. Professional fees rose by $103, or
59.2% due to increased audit and legal fees during the year. Directors’ expense increased by $60, or 30.3%, due to the
increase in director fees for 2020. We incurred a fair value adjustment on deferred share units of $44 resulting from
the new deferred share unit plan that became effective on January 1, 2020 whereby independent directors are required
to receive at least 50% of their fees in deferred share units. The provision for mortgage losses was $3,760 in the year,
bringing the total allowance to $9,150 at December 31, 2020 compared to $1,490 in the prior year for a total allowance
of $5,390 at December 31, 2019. In March 2020, the World Health Organization declared the outbreak of COVID-19
a pandemic. The duration and economic impact of COVID-19 continues to be uncertain. This continued economic
uncertainty has resulted in a higher provision for mortgage losses for the year ended December 31, 2020.
Financing costs for the year ended December 31, 2020 were $13,625, compared to $17,225 in the prior year, a
14 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
decrease of 20.9%. Coupon rate interest on convertible debentures was $7,521 for the year ended December 31, 2020
compared to $8,818 for the prior year. This decrease was a result of interest savings from the 6.25% convertible
debentures being repaid at maturity on March 31, 2019 and replaced with 5.6% convertible debentures, as well as, the
repayment of the 5.25% convertible debentures on May 4, 2020. Accretion and other costs were $1,211 for the year
ended December 31, 2020 compared to $1,414 for the prior year. Interest expense on the credit facility was $4,586 for
the year December 31, 2020, down from $6,703 for the prior year. This decrease is due to a lower weighted average
cost of borrowing in the year compared to 2019 as well as a decrease in the average credit facility balance between
the years. Prime rate decreased three times in March 2020 and the rates for bankers’ acceptances were lower in 2020
than they were in the prior year, both of which contributed to the lower interest expense on the credit facility. In
October 2019, we completed an issuance of common shares, the proceeds of which were used to pay down the credit
facility.
Net income and comprehensive income for the year ended December 31, 2020 was $39,188, an increase of 1.6%
from net income and comprehensive income of $38,568 for the prior year. Basic and diluted earnings per common
share were $0.93 for the year ended December 31, 2020, compared with $0.97 basic and $0.96 diluted for the prior
year. Earnings per share decreased as there were a greater number of shares outstanding during 2020 due to the
issuances of common shares completed in February and October 2019 and conversions of convertible debentures into
common shares between November 2019 and February 2020.
During the year December 31, 2020, we funded mortgages receivable aggregating $290,873. Of those advances,
$233,612 were first mortgages, representing 80.3% of the total loans funded. British Columbia advances were
$29,935, advances of $1,204 were on properties in Alberta, $7,459 were non-GTA Ontario and the remaining
$252,275 were for mortgages on properties located in the Greater Toronto Area. There were $275,304 of repayments
during the year.
Liquidity and capital resources
At December 31, 2020, we had borrowings under credit facility (excluding unamortized finance costs) of $160,439.
The credit facility, currently authorized for up to $240,000 (December 31, 2019 – $210,000), is provided by a syndicate
of four major chartered banks, drawn through a combination of bankers’ acceptances and bank loans to minimize our
borrowing costs. At any time during the term of the credit facility, we have the one-time right to increase the credit
facility by up to $30,000 (such that the total maximum availability would be up to $270,000). We were in compliance
with the covenants in the credit facility as at December 31, 2020, and we expect to remain in compliance with such
covenants going forward.
At December 31, 2020, we had four series of convertible debentures outstanding, with a total book value of
$125,227, and a face value (and maturity value) of $128,800. For additional information on the operating credit facility
and the debentures, please refer to Notes 7 and 9, respectively, of our accompanying consolidated financial statements.
The growth in our mortgage portfolio since inception has been financed by the issuance of common shares, issuance
of convertible debt, and through the operating credit facility. We expect to be able to generate sufficient funds for
future growth in net mortgage loan investments by utilizing those three sources of funds. As at December 31, 2020,
total debt was 38.7% of total assets (December 31, 2019 – 38.8%). Our policy and our banking arrangements both
require that total debt not exceed 50.0% of total assets.
Changes in financial position
Cash generated from investing activities during the year ended December 31, 2020 consisted of principal repayments
received of $254,726, less advances of principal on mortgage loan investments of $271,280 for net cash advances of
mortgage loan investments of $16,554 to facilitate the increase in the line of credit.
Borrowings under our operating credit facility increased to $160,439 at December 31, 2020, from $123,937 at
December 31, 2019, due to the net advances on our portfolio and the repayment of the 5.25% series of convertible
debentures in May 2020.
Accounts payable and accrued liabilities, including accrued convertible debenture interest, were $3,518 at
December 31, 2020 compared to $5,100 at December 31, 2019. This decrease is due to timing differences in payments.
Dividends payable were $4,029 at December 31, 2020 down from $5,652 at December 31, 2019. The decrease is due
to the decrease in the special dividend accrual at December 31, 2020 compared to December 31, 2019.
Share capital increased to $460,065 at December 31, 2020 from $452,851 at December 31, 2019, primarily due to
the conversion of convertible debentures in the first quarter of 2020.
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 15
Contractual obligations
Contractual obligations due at December 31, 2020 were as follows:
December 31, 2020
Borrowings under credit facility
Accounts payable and accrued
liabilities
Accrued convertible debenture
interest
Dividends payable
Convertible debentures
Total contractual obligations
Total
obligation
$171,067
Within 1
year
$ 5,235
1 to 3
years
$165,832
3 to 5
years
$ –
More than
5 years
$ –
2,562
2,562
–
–
–
956
4,029
128,800
$307,414
956
4,029
40,250
$ 53,032
–
–
–
$165,832
–
–
88,550
$ 88,550
–
–
–
$ –
We have commitments to advance additional funds under existing mortgages of $81,378 and for new mortgages of
$2,717 at December 31, 2020 (December 31, 2019 – $64,932, $28,947, respectively). Generally, outstanding
commitments are expected to be funded within the next 24 months. However, our experience has been that a portion
of the unfunded amounts on existing mortgages will never be drawn.
Off-balance sheet arrangements
As at December 31, 2020, we had $13,397 (December 31, 2019 – $8,428) of letters of credit (LCs) outstanding which
were issued under our operating credit facility. The maximum available by way of LCs under our operating credit
facility at December 31, 2020 was $25,000 (December 31, 2019 – $20,000). LCs represent irrevocable assurances that
our banks will make payments in the event that a borrower of the company cannot meet its obligations to third parties.
LCs carry the same credit risk, recourse and collateral security requirements as mortgages extended to customers.
Transactions with related parties
Transactions with related parties are in the normal course of business and are recorded at the exchange amount, which
is the amount of consideration established and agreed to by the related parties, and are measured at fair value.
The manager is responsible for our day-to-day activities. We incurred management and mortgage servicing fees
from a subsidiary of the manager of $7,036 for the year ended December 31, 2020 (year ended December 31, 2019 –
$6,996). Mr. Robert G. Goodall is a director and part of the key management personnel of the manager, received
compensation from the manager, and is also a director of Atrium. The management agreement between us and the
manager contains provisions for the payment of termination fees to the manager in the event that the management
agreement is terminated in certain circumstances. The manager also acts as broker for our mortgages. The manager
receives origination fees from the borrowers of up to 1% of the amount being funded; origination fees in excess of 1%
are split between the manager and Atrium.
Certain of our mortgages are shared with other investors. As at December 31, 2020, companies owned by a director
and officer of the company had co-invested in one syndicated secured mortgage receivable of $36,878, of which the
company’s share was $26,341, of which $25,534 had been funded at December 31, 2020 (December 31, 2019 – one
syndicated mortgage receivable of $56,186, of which the company’s share was $28,093, of which $28,093 had been
funded).
As at December 31, 2020, the company had two mortgages receivables (December 31, 2019 – three) from borrowers
over which a director and officer of the company has joint control, with the company’s share of the gross commitments
totaling $10,040 (December 31, 2019 – $7,320), of which $6,842 had been funded at December 31, 2020 (December
31, 2019 – $7,320). During the year ended December 31, 2020, the company recognized net mortgage interest and
fees of $821 (year ended December 31, 2019 – $679) from these mortgage receivables.
Critical accounting estimates and policies
Our consolidated financial statements for the year ended December 31, 2020 are prepared in accordance with Canadian
generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), as set out
in Part I of the CPA Canada Handbook. The preparation of consolidated financial statements in accordance with IFRS
requires management to make estimates, assumptions and judgements that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenue
and expenses during the reporting period.
16 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
The most subjective of these estimates relate to:
(a) determining whether the cash flows from the mortgages receivable represent solely payments of principal
and interest (SPPI);
(b) the measurement of impairment losses for mortgages receivable, in particular: measurement of credit risk to
determine whether there has been a significant increase in credit risk since initial recognition; the assessment
of when mortgages receivable become impaired and the incorporation of forward-looking information to
determine expected credit losses;
(c) the measurement of fair value, cost of disposal and the value in use of investment properties; and
(d) the measurement of the liability and equity components of the convertible debentures which depend upon the
estimated market interest rates for a comparable debenture without the convertibility feature.
We believe that management’s estimates are appropriate; however, actual results could differ from the amounts
estimated. Estimates and underlying assumptions are reviewed each quarter. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and in any future periods affected.
In March 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus
(“COVID-19”) as a pandemic which resulted in a series of public health and emergency measures being put in place
to combat the spread of the virus. These measures have caused material disruption to businesses in Canada and globally
resulting in an economic slowdown. The duration and impact of COVID-19 continues to be unknown and it is not
possible to reliably estimate the impact that the length and severity of these developments will have on the financial
results and condition of the company in future periods. To date, the company has not experienced material changes in
the collection of interest and repayments of principal, however, there is no certainty this will continue going forward.
Accordingly, there is inherently more uncertainty associated with the estimates, judgements and assumptions made
by management in the preparation of the consolidated financial statements. It is not possible to forecast with certainty
the extent to which the economic impact of COVID-19 will affect the company’s operations and financial results in
the near term and long-term. Areas of the company’s business that could potentially be adversely impacted include,
but are not limited to, mortgage interest rates, mortgage interest and fees revenue, rental income, allowance for
mortgage losses and valuation of investment properties.
Mortgages receivable
Mortgages receivable are a financial asset and are recognized initially at fair value and are subsequently carried at
amortized cost using the effective interest method. All our mortgages receivable are held in a single business model.
We have concluded that our business model is to hold mortgages receivable to collect contractual cash flows that
represent solely payments of principal and interest.
Mortgages receivable and commitments are assessed for impairment at the end of each reporting period using an
expected credit loss (ECL) model. The ECL model uses a three-stage impairment approach based on changes in the
credit risk of the commitment or mortgage receivable since initial recognition. Credit quality is assessed at each
reporting period and results in commitments and mortgages receivable being moved between stages, as necessary.
Significant credit judgement is required when assessing evidence of credit impairment and estimating expected credit
losses. For commitments and mortgages receivable, the company considers a number of past events, current conditions
and forward-looking information when assessing if there has been a significant increase or subsequent decrease in
credit risk. The company considers a commitment or mortgage receivable to be impaired when there is objective
evidence that one or more events have occurred that have an unfavourable impact on estimated future cash flows such
that there is no longer reasonable assurance as to the timely collection of the full amount of principal and interest.
An ECL represents the difference between the present value of all contractual cash flows that are due under the
original terms of the contract and the present value of all cash flows expected to be received. The company’s
application of the concept uses three inputs to measure ECLs for commitments and mortgages receivable classified as
Stage 1: probability of default (PD), loss given default (LGD) and exposure at default (EAD). These inputs are
determined at each reporting period using historical data and current conditions. Adjustments may be made to the
probability of default if the effects of, for example, forecasts of housing prices, employment and interest rates, are
expected to be significant over the term of the mortgage. The inputs for Stage 1 mortgages receivable are calculated
separately for (i) mortgages receivable on single-family residences and (ii) mortgages receivable on all other properties
on the basis of differences in the credit risk of each. The ECL is assessed individually for each commitment and
mortgage receivable classified as either Stage 2 or Stage 3. For mortgages receivable in these stages, forecast future
information specific to the loan (for example, forecasts of real estate prices) is incorporated when assessing the cash
flows expected to be received. In response to COVID-19, the ECL methodology was modified to include a post-model
overlay adjustment to account for the uncertainty and difficulty in forecasting future economic conditions.
Mortgages receivable are presented on the consolidated statements of financial position net of the allowance for
mortgage losses. A loss on a mortgage is written off against the related allowance for mortgage losses when there is
no reasonable expectation of further recovery, which is the point at which the underlying real property has been
liquidated and claims against guarantors, if any, are unlikely to recover any further losses. For any mortgages
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 17
receivable that have been written off but where guarantors are still being pursued for collection, no recovery is
recognized until it is virtually certain of collection. For further information see Note 3 (a) and (c) of our consolidated
financial statements for the year ended December 31, 2020.
Revenue recognition
Mortgage interest and fees revenues are recognized in the statement of income and comprehensive income using the
effective interest method. Mortgage interest and fees revenues include our share of any fees received, as well as the
effect of any discount or premium on the mortgage. Interest revenue is calculated on the gross carrying amount for
mortgages receivable in Stages 1 and 2 and on the net carrying amount for mortgages receivable in Stage 3.
The effective interest method derives the interest rate that discounts the estimated future cash receipts during the
expected life of the mortgage receivable (or, where appropriate, a shorter period) to its carrying amount. When
calculating the effective interest rate, future cash flows are estimated considering all contractual terms of the financial
instrument, but not future credit losses. The calculation of the effective interest rate includes all fees and transaction
costs paid or received. Fees and transaction costs include incremental revenues and costs that are directly attributable
to the acquisition or issuance of the mortgage.
Convertible debentures
The convertible debentures can be converted into our common shares at the option of the investor. They are compound
financial instruments with two components: a financial liability, and a call option which is an equity instrument. The
fair value of the liability component is measured as of the date that the debentures were issued, and the equity
instrument is valued on that date based upon the difference between the fair value of the debenture and the fair value
of the liability component.
The measurement of the fair value of the liability component is based upon market rates of interest on similar debt
instruments without the conversion feature. Expenses of issue are allocated between the two components on a pro-rata
basis. The book value of the debt is accreted up to its face value over the life of the financial liability using the effective
interest method, which provides for the application of a constant interest rate over the term of the debt. The value of
the equity component is not re-measured subsequent to its initial measurement date.
Income taxes
We are, and intend to maintain our status as, a MIC, and as such are not taxed on income provided that it flows through
to our shareholders as dividends during the year or within 90 days after December 31 each year. It is our policy to pay
such dividends to our shareholders to remain non-taxable. Accordingly, no provision for current or future income
taxes is required.
Future changes in accounting policies
Various pronouncements have been issued by the International Accounting Standards Board (IASB) or IFRS
Interpretations Committee that will be effective for future accounting periods. The company closely monitors new
accounting standards as well as amendments to existing standards and assesses what impact, if any, they will have on
the consolidated financial statements.
Controls and procedures
Our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) are responsible for establishing and
maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those
terms are defined in National Instrument (NI) 52-109 – Certification of Disclosure in Issuers’ Annual and Interim
Filings.
We designed the DC&P and ICFR, the latter of which was using the framework in Internal Control – Integrated
Framework (published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and as
revised in 2013) to provide reasonable assurance (i) that material information relating to us is made known to our CEO
and CFO during the reporting period; (ii) that information required to be disclosed by us in our filings under securities
legislation is recorded, processed, summarized and reported within the required time periods; (iii) regarding the
reliability of financial reporting and preparation of consolidated financial statements for external purposes in
accordance with Canadian GAAP.
Our CEO and CFO evaluated the design effectiveness of the DC&P and ICFR, as defined by NI 52-109, as of
December 31, 2020. Based on this evaluation, they concluded that the designs of the DC&P and ICFR were effective
as of that date. NI 52-109 also requires Canadian public companies to disclose in their MD&A any change in ICFR
during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, ICFR. No
such change to ICFR has occurred during the most recently completed year.
18 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • MANAGEMENT’S DISCUSSION AND ANALYSIS
It should be noted that a control system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that its objectives are met. Because of the inherent limitations in any control system, no
evaluation of control can provide absolute assurance that all control weaknesses including, for example, any instances
of fraud, have been detected. Inherent limitations include: (i) that management’s assumptions and judgements could
ultimately prove to be incorrect as conditions and circumstances vary; (ii) the impact of any undetected errors; and
(iii) controls may be circumvented through the unauthorized acts of individuals, by collusion of two or more people,
or by management override. The design of any system of control is also based upon assumptions as to the likelihood
of future events and there is no assurance that any design will succeed in achieving its goals under future conditions.
Outstanding share data
Our authorized capital consists of an unlimited number of common shares, of which 42,411,853 were issued and
outstanding at December 31, 2020, and 42,411,853 were issued and outstanding as at the date hereof. In addition, as
at the date hereof, 2,747,440, 1,693,440, 2,211,540 and 1,949,152 common shares are issuable upon conversion or
redemption or in respect of repayment at maturity of the outstanding 5.50% (September 2021), 5.30%, 5.50%
(December 2025) and the 5.60% convertible debentures, using the conversion price of $14.65, $14.94, $15.60 and
$14.75 respectively, for each common share.
We also have an employee share purchase plan, a deferred share incentive plan and a dividend reinvestment plan
pursuant to which common shares are issued from time to time. The dividend reinvestment plan was suspended on
April 29, 2020 and reinstated on January 14, 2021.
Risks and uncertainties
We are subject to many risks and uncertainties that may limit our ability to execute our strategies and achieve our
objectives. We have processes and procedures in place in an attempt to control or mitigate certain risks, while others
cannot be or are not mitigated. Material risks that cannot be mitigated include a significant decline in the general real
estate market, interest rates changing markedly, being unable to make mortgage loans at rates consistent with rates
historically achieved, not having adequate mortgage loan opportunities presented to us, and not having adequate
sources of bank finance available.
Under various federal, provincial and municipal laws, an owner or operator of real property could become liable
for the cost of removal or remediation of certain hazardous or toxic substances released on or in its properties or
disposed of at other locations. In rare circumstances where a mortgage is in default, we may take possession of real
property and may become liable for environmental issues as a mortgagee in possession. As part of the due diligence
performed in respect of our mortgage loan investments, we obtain a Phase I environmental audit on the underlying
real property provided as security for a mortgage, unless the manager has determined that a Phase I environmental
audit is not necessary.
Please also refer to “Forward-looking information,” below, and the “Risk Factors” section of our Annual
Information Form for the year ended December 31, 2020 which is incorporated herein by reference and is available at
www.sedar.com and at www.atriummic.com.
Forward-looking information
From time to time in our public communications we provide forward-looking statements. Such statements are
disclosures regarding possible events, conditions, results of operations or changes in financial position that are based
upon assumptions and expectations. These are not based upon historical facts but are with respect to management’s
beliefs, estimates, and intentions. Forward-looking statements generally can be identified by the use of forward-
looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intent”, “estimate”, “anticipate”,
“believe”, “should”, “plans”, “continue” or similar expressions suggesting future outcomes or events. Forward-
looking statements regarding earnings, possible mortgage losses, and mortgage portfolio growth are based upon
assumptions regarding performance of the economy in general and real estate markets in particular. Forward-looking
statements generally assume that our revenues and expenses continue to follow current trends, and that current trends
in our mortgage portfolio growth continue.
All forward-looking statements reflect management’s current beliefs and are based on information currently
available to management. These statements are not guarantees of future performance and are based on our estimates
and assumptions that are subject to risks and uncertainties which could cause our actual results to differ materially
from the forward-looking statements contained in this MD&A or elsewhere. Those risks and uncertainties include
risks associated with mortgage lending, competition for mortgage lending, real estate values, interest rate fluctuations,
environmental matters and the general economic environment. For other risks and uncertainties, please refer to “Risks
and uncertainties” above, and the “Risk Factors” section of our Annual Information Form for the year ended December
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 19
31, 2020 which is available at www.sedar.com and at www.atriummic.com. That list is not exhaustive, as other factors
could adversely affect our results, performance or achievements. The reader is cautioned against undue reliance on
any forward-looking statements.
Although the forward-looking information contained in this MD&A is based upon what management believes are
reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking
statements. We will not publicly update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise, unless required to do so by law.
Responsibility of management and the board of directors
Management is responsible for the information disclosed in this MD&A, and has in place the appropriate information
systems, procedures and controls to ensure that the information used internally by management and disclosed
externally is materially complete and reliable. In addition, our audit committee and board of directors provide an
oversight role with respect to our public financial disclosures, and have reviewed and approved this MD&A and the
consolidated financial statements as at December 31, 2020.
Dividend Reinvestment Plan
We have a Dividend Reinvestment Plan (DRIP) which is available to holders of our common shares. The DRIP allows
participants to have their monthly cash dividends reinvested in additional common shares, at a discount of 2% from
the market price.
On April 29, 2020, in response to the market disruption caused by the COVID-19 pandemic, we suspended the
DRIP commencing with the dividends scheduled to be paid on May 12, 2020 to shareholders of record on April 30,
2020. On January 14, 2021, we announced the reinstatement of the DRIP commencing with the dividend payable on
February 12, 2021 to shareholders of record on January 29, 2021.
Additional information
Additional information about Atrium, including our Annual Information Form for the year ended December 31, 2020,
is available on SEDAR at www.sedar.com. You may also obtain further information about us from our website at
www.atriummic.com, by telephone at (416) 607-4200, or by email at info@atriummic.com.
(cid:29)(cid:148)(cid:149)(cid:141)(cid:148)(cid:395)(cid:392)(cid:407)(cid:147)(cid:400)(cid:390)(cid:407)
(cid:48)(cid:392)(cid:149)(cid:147)(cid:149)(cid:389)(cid:392)(cid:147)(cid:395)(cid:1)(cid:100)(cid:400)(cid:147)(cid:400)(cid:390)(cid:396)(cid:390)(cid:149)(cid:400)(cid:141)
(cid:128)(cid:390)(cid:147)(cid:399)(cid:1)(cid:38)(cid:149)(cid:407)(cid:390)(cid:407)(cid:1)
(cid:35)(cid:390)(cid:389)(cid:390)(cid:396)(cid:388)(cid:390)(cid:399)(cid:1)(cid:418)(cid:417)(cid:232)(cid:1)(cid:446)(cid:416)(cid:446)(cid:416)
CANADA’S PREMIER NON-BANK LENDER™
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
To the shareholders of
Atrium Mortgage Investment Corporation:
The management of Atrium Mortgage Investment Corporation (Atrium) is responsible for the preparation,
presentation and integrity of these consolidated financial statements, and the accompanying Management’s
Discussion and Analysis. This responsibility includes the selection and consistent application of appropriate
accounting principles and methods in addition to making the judgements and estimates necessary to prepare
the consolidated financial statements in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Management of Atrium is responsible to provide reasonable assurance that assets are safeguarded and
that relevant and reliable financial information is produced. We are required to design a system of internal
controls and certify as to the design and operating effectiveness of internal controls over financial reporting.
We have implemented a system of internal controls that we believe provides reasonable assurance in all
material respects that transactions are authorized, assets are safeguarded and financial records are reliable
for producing consolidated financial statements. Crowe Soberman LLP were appointed as the independent
auditors by a vote of Atrium’s shareholders to audit the consolidated financial statements; their report
appears on the next page.
The board of directors, through the Audit Committee comprised solely of independent directors, is
responsible for determining that management fulfills its responsibilities in the preparation of these
consolidated financial statements and the financial control of operations. The Audit Committee
recommends the independent auditors for appointment by the shareholders, and it meets regularly with
senior and financial management to discuss internal controls and financial reporting matters. The
independent auditors have unrestricted access to the Audit Committee.
These consolidated financial statements and accompanying Management’s Discussion and Analysis
have been approved by the board of directors based upon the review and recommendation of the Audit
Committee.
Toronto, Canada
February 9, 2021
“Robert G. Goodall”
Robert G. Goodall
President and Chief Executive Officer
“Jennifer Scoffield”
Jennifer Scoffield
Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
To the Shareholders of Atrium Mortgage Investment Corporation
Opinion
We have audited the consolidated financial statements of Atrium Mortgage Investment Corporation and
its subsidiaries (the Group), which comprise the consolidated statements of financial position as at
December 31, 2020 and December 31, 2019, and the consolidated statements of income and
comprehensive income, consolidated statements of changes in shareholders' equity and consolidated
statements of cash flows for the years then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2020 and December 31, 2019, and its
consolidated financial performance and its consolidated cash flows for the years then ended in accordance
with International Financial Reporting Standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Allowance for credit losses
Refer to Note 2(e) Use of estimates and judgements and Note 5(b) Mortgages receivable, Allowance for
mortgage losses.
The Group’s allowance for credit losses on its consolidated statement of financial position is determined
using an expected credit loss (ECL) model. The ECL model uses a three-stage impairment approach
based on changes in the credit risk of the financial instruments since initial recognition. The 12-month
ECL of financial instruments classified in Stage 1, that have not shown a significant increase in credit risk
(SICR) since initial recognition, are estimated based on the probability of default, loss given default and
exposure at default. The ECL is assessed individually for each financial instrument that has experienced a
SICR and are accordingly classified as either Stage 2 or Stage 3. During the the year, the ECL model was
modified to include a post-model overlay to adjust for the uncertainty and economic conditions as a result
of the COVID-19 pandemic. The ECL is determined by evaluating a range of possible outcomes,
incorporating the time value of money and supportable information about past events, current conditions
and future economic forecasts.
Auditing the allowance for credit losses was complex and identified as a key audit matter because of the
significant judgments and estimates required in the model, the high degree of measurement uncertainty
and the forward-looking nature of the assumptions made for variables used in measuring the ECL.
Our audit work included: Obtaining an understanding of management's ECL model and methodology.
Assessing mortgages receivable identified by management as having experienced a SICR. Assessing the
Group’s mortgage portfolio for potential mortgages receivable that experienced a SICR not identified by
management. Use of a specialist to assess managament's estimates relating to underlying valuations of
mortgages receivable security. Testing the inputs used in management’s model and recalculating the
Group’s ECL.
Valuation of investment properties
Refer to Note 2(e) Use of estimates and judgements and Note 6 Investment properties.
The Group’s investment properties consist of two multi-unit residential rental properties and are measured
using the cost model. The carrying value of the investment properties are assessed for impairment
whenever events or changes in circumstances indicate that the carrying amount of the investment property
may exceed its recoverable amount. The higher of the fair value less cost of disposal and the value in use
is used in calculating the recognized impairment loss. The value in use is estimated using both
comparables and a third-party valuation that considers a net operating income analysis, as well as
available market evidence and comparable transactions. This analysis includes estimates of gross rental
income, vacancy rates, operating and management expenses and capitalization rates.
Auditing the valuation of investment properties was complex and identified as a key audit matter because
of the significant judgments and estimates required, the high degree of measurement uncertainty and the
forward-looking nature of the assumptions made for variables used in the higher of the fair value less cost
of disposal and the value in use calculations.
Our audit work included: Obtaining an understanding of the third-party valuation model and
methodology, testing the inputs used in the calculation and the use of a specialist to assess the model,
methodology and assumptions.
Other Information
Management is responsible for the other information. The other information comprises:
Management's Discussion and Analysis
The information, other than the consolidated financial statements and our auditors' report thereon,
in the Annual Report
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditors' report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors' report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditors' report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors' report is Jonathan Breido.
Crowe Soberman LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
February 9, 2021
CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 27
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of Canadian dollars)
Notes
2020
2019
December 31
Assets
Mortgages receivable
Investment properties
Prepaid expenses
Total assets
Liabilities
Borrowings under credit facility
Accounts payable and accrued liabilities
Accrued convertible debenture interest
Dividends payable
Convertible debentures
Total liabilities
Shareholders’ equity
Share capital
Deferred share incentive plan units
Equity component of convertible debentures
Contributed surplus
Deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity
5
6
7
8, 12
9
$ 739,025
16,201
89
$ 755,315
$ 159,654
2,562
956
4,029
125,227
292,428
460,065
716
1,470
1,083
(447)
462,887
$ 755,315
$ 727,325
16,201
105
$ 743,631
$ 123,449
4,144
956
5,652
153,910
288,111
452,851
716
1,837
781
(665)
455,520
$ 743,631
Commitments
7, 14(d)
The accompanying notes are an integral part of these consolidated financial statements.
Approved on behalf of the board of directors:
“Robert Goodall”
Robert Goodall, Director
“Mark Silver”
Mark Silver, Director
28 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(in thousands of Canadian dollars, except for number of common shares)
Share capital
Number
Balance, December 31, 2018
Shares issued by prospectus
Shares issued under dividend reinvestment plan
Shares issued under employee share purchase plan
Shares issued under deferred share incentive plan
Shares issued on debenture conversion
Maturity of convertible debentures
Issue costs
Share-based payments
Equity component of convertible debentures issued
Issue costs attributable to equity component of
convertible debentures issued
Net income and comprehensive income
Dividends declared
Balance, December 31, 2019
Shares issued under dividend reinvestment plan
Shares issued under employee share purchase plan
Shares issued under deferred share incentive plan
Shares issued on debenture conversion
Maturity of convertible debentures
Share-based payments
Net income and comprehensive income
Dividends declared
Balance, December 31, 2020
Notes
10
10
10
11
9
9
11
9
9
10
10
11
9
9
11
36,561,198
4,679,300
326,876
10,520
19,669
266,213
–
–
–
–
–
–
–
41,863,776
140,436
17,682
24,259
365,700
–
–
–
–
42,411,853
Deferred
share
incentive
plan units
644
$
–
–
–
(248)
–
–
–
320
–
$
Equity
component
of convertible
debentures
1,675
–
–
–
–
(36)
(136)
–
–
351
Amount
385,261
$
61,777
4,336
145
248
3,594
–
(2,510)
–
–
–
–
–
452,851
1,731
187
317
4,979
–
–
–
–
460,065
$
$
–
–
–
716
–
–
(317)
–
–
317
–
–
716
$
$
(17)
–
–
1,837
–
–
–
(65)
(302)
–
–
–
1,470
$
$
Contributed
surplus
Deficit
$
$
$
645
–
–
–
–
–
136
–
–
–
–
–
–
781
–
–
–
–
302
–
–
–
1,083
$
$
$
(919)
–
–
–
–
–
–
–
–
–
–
38,568
(38,314)
(665)
–
–
–
–
–
–
39,188
(38,970)
(447)
$
Total
shareholders’
equity
387,306
61,777
4,336
145
–
3,558
–
(2,510)
320
351
(17)
38,568
(38,314)
455,520
1,731
187
–
4,914
–
317
39,188
(38,970)
462,887
$
$
Dividends amounted to $0.92 per share for the year ended December 31, 2020 (year ended December 31, 2019 – $0.96).
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 29
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands of Canadian dollars, except for per share amounts)
Years ended December 31
Notes
2020
2019
Revenues
Mortgage interest and fees
Rental income
Total revenues
Operating expenses
Mortgage servicing and management fees
Transfer agent, regulatory fees and investor relations
Share-based payments
Professional fees
Directors’ expense
Administration and general
Impairment loss on investment property
Adjustment to fair value of deferred share units
Provision for mortgage losses
Total operating expenses
Income before financing costs
Financing costs
Interest on convertible debentures
Interest and other financing charges
Total financing costs
8
6
8
8, 11
8, 12
6
8, 12
5(b)
9
7, 12
$
64,362
657
65,019
$
66,095
76
66,171
7,036
323
317
277
258
191
–
44
3,760
12,206
52,813
8,732
4,893
13,625
6,996
303
320
174
198
91
806
–
1,490
10,378
55,793
10,232
6,993
17,225
Net income and comprehensive income for the year
$
39,188
$ 38,568
Earnings per common share
Basic
Diluted
13
13
$
$
0.93
0.93
$
$
0.97
0.96
The accompanying notes are an integral part of these consolidated financial statements.
30 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of Canadian dollars)
Cash provided by (used in):
Operating activities
Net income and comprehensive income for the year
Adjustments to determine net cash flows
provided by (used in) operating activities
Share-based payments
Mortgage interest and fees earned
Mortgage interest and fees received
Interest on convertible debentures expensed
Interest and other financing charges expensed
Impairment loss on investment property
Adjustment to fair value of deferred share units
Provision for mortgage losses
Changes in operating assets and liabilities
Prepaid expenses
Accounts payable and accrued liabilities
Additions to mortgage discount
Additions to unamortized origination fees
Cash provided by operating activities
Investing activities
Cash advances of mortgages receivable
Cash repayments of mortgages receivable
Cash used in investing activities
Financing activities
Advances under credit facility
Repayments under credit facility
Interest and fees on convertible debentures paid
Interest and other financing charges paid
Issuance of common shares
Share capital issue costs
Issuance of convertible debentures
Convertible debenture issue costs
Repayment of convertible debentures
Cash dividends paid
Cash used in financing activities
Increase (decrease) in cash
Cash, beginning of year
Cash, end of year
Years ended December 31
2020
2019
$
39,188
$
38,568
317
(64,362)
64,881
8,732
4,893
–
44
3,760
16
(1,639)
–
575
56,405
(271,280)
254,726
(16,554)
558,687
(522,185)
(7,524)
(5,177)
187
–
–
–
(24,977)
(38,862)
(39,851)
–
–
–
$
320
(66,095)
52,923
10,232
6,993
806
–
1,490
(83)
2,110
46
705
48,015
(271,759)
238,086
(33,673)
407,322
(431,715)
(8,876)
(7,056)
61,921
(2,510)
28,750
(1,369)
(28,278)
(32,531)
(14,342)
–
–
–
$
The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 31
NOTE 1 – NATURE OF OPERATIONS
Atrium Mortgage Investment Corporation (the “company”) is a corporation domiciled in Canada,
incorporated under the Ontario Business Corporations Act. The address of the company’s registered head
office and principal place of business is Suite 900, 20 Adelaide Street East, Toronto, Ontario M5C 2T6.
The company is a Mortgage Investment Corporation (MIC) as defined in Section 130.1(6) of the Canada
Income Tax Act (ITA). Accordingly, the company 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.
The company’s common shares are listed on the Toronto Stock Exchange (TSX) under the symbol AI
and its convertible debentures are listed under the symbols AI.DB.B, AI.DB.C, AI.DB.D and AI.DB.E.
NOTE 2 – BASIS OF PRESENTATION
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS), as set out in Part I of the CPA Canada Handbook – Accounting. Significant
accounting policies have been consistently applied in the preparation of these consolidated financial
statements, which were authorized for issuance by the board of directors on February 9, 2021.
(b) Basis of measurement
These consolidated financial statements are prepared on the historical cost basis.
(c) Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars, which is also the company’s
functional currency. Dollars are expressed in thousands except for per share amounts or where the context
requires otherwise.
(d) Principles of consolidation
These consolidated financial statements include the accounts of the company and Canadian Properties LP,
which is considered to be a subsidiary for financial reporting purposes. Consolidation commenced the date
the company obtained control and continues until control ceases. The company has consolidated the
subsidiary from August 5, 2016, the date of its formation. All transactions and balances between the company
and the subsidiary have been eliminated, including unrealized gains and losses, if any.
(e) Use of estimates and judgements
The preparation of consolidated financial statements in accordance with IFRS requires management to make
estimates, assumptions and judgements that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and contingent liabilities at the reporting date and the reported amounts of revenues and
expenses during the reporting period.
The most subjective of these estimates relate to:
(a) determining whether the cash flows from the mortgages receivable represent solely payments
of principal and interest (SPPI);
(b) the measurement of impairment losses for mortgages receivable, in particular: measurement of
credit risk to determine whether there has been a significant increase in credit risk since initial
recognition; the assessment of when mortgages receivable become impaired and the
incorporation of forward-looking information to determine expected credit losses;
(c) the measurement of fair value, costs of disposal and the value in use of investment properties;
and
32 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – BASIS OF PRESENTATION (continued)
(e) Use of estimates and judgements (continued)
(d) the measurement of the liability and equity components of the convertible debentures which
depend upon the estimated market interest rates for a comparable debenture without the
convertibility feature.
Management believes that its estimates are appropriate; however, actual results could differ from the
amounts estimated. Estimates and underlying assumptions are reviewed each quarter. Revisions to
accounting estimates are recognized in the period in which the estimate is revised and in any future periods
affected.
In March 2020, the World Health Organization characterized the outbreak of a strain of the novel
coronavirus (“COVID-19”) as a pandemic which resulted in a series of public health and emergency measures
being put in place to combat the spread of the virus. These measures have caused material disruption to
businesses in Canada and globally resulting in an economic slowdown. The duration and impact of COVID-
19 continues to be unknown and it is not possible to reliably estimate the impact that the length and severity
of these developments will have on the financial results and condition of the company in future periods. To
date, the company has not experienced material changes in the collection of interest and repayments of
principal, however, there is no certainty this will continue going forward.
Accordingly, there is inherently more uncertainty associated with the estimates, judgements and
assumptions made by management in the preparation of the consolidated financial statements. It is not
possible to forecast with certainty the extent to which the economic impact of COVID-19 will affect the
company’s operations and financial results in the near term and long-term. Areas of the company’s business
that could potentially be adversely impacted include, but are not limited to, mortgage interest rates, mortgage
interest and fees revenue, rental income, allowance for mortgage losses and valuation of investment
properties.
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
(a) Financial instrument assets – initial recognition and measurement
Financial instrument assets are initially recognized when the company becomes a party to a contract. On
initial recognition, the measurement category is determined, based on: (i) the business model under which
the asset is held, and (ii) the contractual cash flow characteristics of the instrument.
Upon initial recognition, financial assets are measured as either:
Fair value through profit and loss (FVTPL) – which is the required measurement classification for
instruments that are held for trading and derivative assets;
Amortized cost – if the instrument is held within a business model whose objective is to collect
contractual cash flows and the cash flows represent SPPI;
Fair value through other comprehensive income (FVOCI) – which is required for debt instruments
held in a dual-purpose business model, to collect contractual cash flows and to sell the instruments
and can be irrevocably elected at initial recognition provided they have not been designated as
FVTPL and are not held for trading; or
Designated as FVTPL – available on initial recognition provided certain criteria are met.
All of the company’s mortgages receivable are held in a single business model. The company has
concluded that its business model is to hold mortgages receivable to collect contractual cash flows for the
following reasons:
The performance of the mortgage portfolio is assessed on the basis of effective yield, and not on a
fair value basis, whether realized or unrealized.
Neither key management compensation nor remuneration paid to the company’s manager is based
on the fair values of mortgages receivable.
Historically the company has not sold, and in the future has no expectations to sell, any of its
mortgages receivable. While the company may decrease its interest in a syndicated mortgage
receivable by transferring its interest, at its amortized cost carrying amount, to another lender in
the syndicate, such transfers are consistent with the business model of holding mortgages
receivable to collect contractual cash flows.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 33
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Financial instrument assets – initial recognition and measurement (continued)
The returns earned by the company on its mortgages receivable are interest rates that are set at levels to
provide an acceptable profit margin based on the time value of money and credit risk, although other basic
lending risks (for example, the location and quality of the underlying collateral) may also be built-in. There
are no factors that give rise to variation in the return on the company’s mortgages receivable other than the
time value of money, credit risk and other basic lending risks. Interest rates, or the credit spread for variable
rate mortgages, are set for the full term of the loan, which is considered SPPI because the rate is still based
on the time value of money and credit risk. The majority of the mortgages receivable can be prepaid after an
initial closed period with no penalty, subject to the borrower providing advance written notice according to
the terms of their mortgage so the return therefore represents SPPI.
Mortgages receivable are initially recognized at fair value and are subsequently carried at amortized cost
using the effective interest method. See Note 3(d) Financial instruments – revenue recognition.
(b) Financial instrument liabilities – initial recognition and measurement
Financial liabilities are measured as either:
FVTPL – which is required for any financial instrument liabilities that are held for trading and for
derivative liabilities;
Designated as FVTPL – available on initial recognition if either: the instrument includes one or
more embedded derivatives and the host contract is not a financial asset; or if the designation meets
certain criteria;
Designated as at fair value – if the instrument does not meet the criteria and is designated as at
FVTPL and is not otherwise required to be measured as FVTPL, it can still be irrevocably
designated at initial recognition as at fair value, meaning that changes in fair value related to
changes in own credit risk are presented in other comprehensive income and other changes in fair
value are presented in net income; or
Amortized cost – which is the default category and is also used for any host contract that is a
financial instrument liability.
The company’s borrowings under credit facility, accounts payable and accrued liabilities, except for the
liability for the deferred share unit plan, dividends payable, accrued convertible debenture interest and the
liability component of convertible debentures are measured at amortized cost. These financial instrument
liabilities are initially recognized at fair value and are subsequently measured at amortized cost using the
effective interest method. The liability for the deferred share unit plan is measured at FVTPL. This financial
instrument liability is initially and subsequently measured at fair value. Gains and losses arising from changes
in fair value are recorded in net income and comprehensive income in the period in which they arise.
(c) Financial instruments – impairment of assets
Loan commitments and letters of credit (collectively commitments) and mortgages receivable are assessed
for impairment at the end of each reporting period using an expected credit loss (ECL) model. The ECL
model uses a three-stage impairment approach based on changes in the credit risk of the commitment or
mortgage receivable since initial recognition. The three stages are as follows:
34 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Financial instruments – impairment of assets (continued)
Credit stage and financial assets included
Stage 1 – commitments and mortgages receivable on
initial recognition and existing assets that have not
shown a significant increase in credit risk since initial
recognition
Stage 2 – commitments and mortgages receivable that
have experienced a significant increase in credit risk
since initial recognition and up to the date of approval
of the consolidated financial statements
Stage 3 – impaired commitments and mortgages
receivable for which there is objective evidence of
impairment at the date of approval of the consolidated
financial statements
Impairment loss recognized
12-month ECL – portion of lifetime ECLs
that represent the ECL from possible default
events within the next 12 months
Lifetime ECL – expected
losses from
possible default events over the expected life
of the instrument, weighted by the likelihood
of loss
Lifetime ECL – expected
losses from
possible default events over the expected life
of the instrument, weighted by the likelihood
of loss
Credit quality is assessed at each reporting period and results in commitments and mortgages receivable
being moved between stages, as necessary. Significant judgement is required when assessing evidence of
credit impairment and estimating expected credit losses.
For commitments and mortgages receivable, the company considers a number of past events, current
conditions and forward-looking information when assessing if there has been a significant increase or
subsequent decrease in credit risk. There is a presumption in IFRS 9 Financial Instruments (IFRS 9) that
credit risk has increased significantly once payments are 30 days past due. However, for single-family
residential mortgages receivable, the company’s historical experience is that mortgages receivable can
become 30 days past due, but be brought up to date by the borrower, therefore another additional risk factor
also needs to be identified for the mortgages receivable to move to Stage 2. For single-family residential
mortgages receivable that are not 30 days past due, a significant increase in credit risk may still be evidenced
by the presence of one or more additional risk factors. For all other mortgages receivable, a significant
increase in credit risk is considered to have occurred if payments are 30 days past due or if one or more
additional risk factors are present.
The additional risk factors used in assessing credit risk include:
changes in the financial condition of the borrower;
responsiveness of the borrower;
other borrower specific information that may be available, without consideration of collateral;
current economic conditions: interest rates, housing prices, real estate market statistics and
employment statistics; and
supportable forward-looking information: macro-economic factors, such as forecast real estate
values and interest rate forecasts.
Determining whether there has been a significant increase in credit risk since initial recognition, or a
subsequent reduction in credit risk back to the level at initial recognition, requires the exercise of significant
judgement.
The company considers a commitment or mortgage receivable to be impaired when there is objective
evidence that one or more events have occurred that have an unfavourable impact on estimated future cash
flows such that there is no longer reasonable assurance as to the timely collection of the full amount of
principal and interest.
The company considers a commitment or mortgage receivable to be in default if payments are greater than
90 days past due for single-family residential mortgages receivable or 30 days past due for all other mortgages
receivable, or if an event of default has occurred under the terms of the mortgage commitment, including:
non-payment of property taxes, a material adverse change in the financial position of the borrower and/or
guarantors or a material adverse change in the property given as security. These definitions are consistent
with industry practice.
An ECL represents the difference between the present value of all contractual cash flows that are due
under the original terms of the contract and the present value of all cash flows expected to be received. The
company’s application of the concept uses three inputs to measure ECLs for commitments and mortgages
receivable classified as Stage 1: probability of default (PD), loss given default (LGD) and exposure at default
(EAD). These inputs are determined at each reporting period using historical data and current conditions.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 35
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Financial instruments – impairment of assets (continued)
Adjustments may be made to the probability of default if the effects of, for example, forecasts of housing
prices, employment and interest rates, are expected to be significantly different over the term of the mortgage.
The inputs for Stage 1 mortgages receivable are calculated separately for (i) single-family residential
mortgages receivable and (ii) mortgages receivable on all other properties on the basis of differences in the
credit risk of each. The ECL is assessed individually for each commitment and mortgage receivable classified
as either Stage 2 or Stage 3. For mortgages receivable in these stages, forecast future information specific to
the loan (for example, forecasts of real estate prices) is incorporated when assessing the cash flows expected
to be received. In response to COVID-19, the ECL methodology was modified to include a post-model
overlay adjustment to account for the uncertainty and difficulty in forecasting future economic conditions.
The financial reports of other lenders and financial institutions were reviewed to inform and modify the
company’s estimates and determine the overlay adjustment.
Mortgages receivable are presented on the consolidated statements of financial position net of the
allowance for mortgage losses. A loss on a mortgage receivable is written off against the related allowance
for mortgage losses when there is no reasonable expectation of further recovery, which is the point at which
the underlying real property has been liquidated and claims against guarantors, if any, are unlikely to recover
any further losses. For any mortgages receivable that have been written off but where guarantors are still
being pursued for collection, no recovery is recognized until virtually certain of collection.
(d) Financial instruments - revenue recognition
Mortgage interest and fees revenues are recognized in the consolidated statements of income and
comprehensive income using the effective interest method. Mortgage interest and fees revenues include the
company’s share of any fees received, as well as the effect of any discount or premium on the mortgage.
Interest revenue is calculated on the gross carrying amount for mortgages receivable in Stages 1 and 2 and
on the net carrying amount for mortgages receivable in Stage 3 (see Note 3(c) Financial instruments –
impairment of assets).
The effective interest method derives the interest rate that discounts the estimated future cash receipts
during the expected life of the mortgage receivable (which is the contractual life, if a shorter period is not
expected) to its carrying amount. When calculating the effective interest rate, future cash flows are estimated
considering all contractual terms of the financial instrument, but not future credit losses (see Note 3(c)
Financial instruments – impairment of assets). The calculation of the effective interest rate includes all fees
and transaction costs paid or received. Fees and transaction costs include incremental revenues and costs that
are directly attributable to the acquisition or issuance of the mortgage.
(e) Financial instruments – derecognition
Financial assets are derecognized when the contractual rights to receive cash flows from the asset expire.
When the company exercises its security and takes title to the underlying real estate, a mortgage receivable
is derecognized on the date of foreclosure.
Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled, or
expires.
36 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)
(f) Investment properties
Investment properties are properties over which the company has taken title through exercise of its security
interest. Such properties are accounted for under IAS 40 Investment Property. An investment property is
recognized on the date of acquisition through foreclosure and is measured initially at cost, which is the book
value of the respective mortgage receivable net of any related allowance for mortgage losses, plus any directly
attributable expenditures and transaction costs. Any costs subsequently incurred to complete the construction
or development of a property are capitalized. After initial recognition, investment properties are measured
using the cost model. Depreciation commences from the date the property is substantially complete and is
recognized when the property’s carrying amount exceeds its residual value. The carrying value of investment
properties are assessed for impairment whenever events or changes in circumstances indicate that the carrying
amount of the investment property may exceed its recoverable amount.
If the higher of the fair value less cost of disposal and the value in use of an investment property (its
recoverable amount) is less than its carrying amount, then an impairment loss is recognized for the excess.
Any impairment loss, or gain or loss realized on disposal is recognized in the consolidated statements of
income and comprehensive income.
(g) Convertible debentures
Convertible debentures can be converted into common shares of the company at the option of the investor.
They are compound financial instruments with two components: a financial liability, and a call option which
is an equity instrument. The fair value of the liability component is measured as of the date that the convertible
debentures were issued, and the equity instrument is valued on that date based upon the difference between
the fair value of the convertible debenture and the fair value of the liability component. The measurement of
the fair value of the liability component is based upon market rates of interest on similar debt instruments
without the conversion feature. Expenses of issue are allocated between the two components on a pro-rata
basis. The book value of the debt is accreted up to its face value over the life of the financial liability using
the effective interest method, which applies a constant interest rate over the term of the debt. The value of
the equity component is not remeasured subsequent to its initial measurement date.
(h) Income taxes
The company qualifies as a MIC under the ITA, and as such is not taxed on income provided that its taxable
income is distributed to its shareholders in the form of dividends within 90 days after December 31 each year.
It is the company’s policy to pay such dividends to remain non-taxable. Accordingly, no provision for current
or deferred income taxes is required.
(i) Earnings per common share
Basic earnings per common share is calculated by dividing earnings during the period by the weighted
average number of common shares outstanding during the period. Diluted earnings per share is calculated by
adjusting the income and comprehensive income attributable to common shareholders and the weighted
average number of common shares outstanding for the effects of all dilutive items such as convertible
debentures and deferred share incentive plans.
(j) Share-based payments
The company has an equity-settled share-based compensation plan for grants to eligible directors, officers,
and senior management under its deferred share incentive plan. Grants are measured based upon the fair
value of the awards granted, using the volume-weighted average trading share price for the five trading days
prior to the date of the grant.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 37
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)
(k) Deferred share unit plan
The company has a cash-settled deferred share unit plan for non-executive directors pursuant to which each
non-executive director is required to receive one-half of their director compensation in the form of deferred
share units. Each non-executive director can elect to receive the remaining one-half of their director
compensation in deferred share units or cash or a combination thereof. The deferred share units represent a
financial liability as they can only be settled in cash when the non-executive directors cease to serve in any
capacity with the company. As such, the deferred share units are initially recognized at their fair value, using
the volume-weighted average trading price of the company’s common shares on the TSX for the five trading
days prior to the last day of the reporting period, as directors’ expense with a corresponding amount recorded
in accounts payable and accrued liabilities. The liability is subsequently remeasured to its fair value at each
period end with the change in fair value during the period recognized as an operating expense.
NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS
Various pronouncements have been issued by the International Accounting Standards Board (IASB) or IFRS
Interpretations Committee that will be effective for future accounting periods. The company closely monitors
new accounting standards as well as amendments to existing standards and assesses what impact, if any, they
will have on the consolidated financial statements. None of the standards issued to date are expected to have
a material effect on the consolidated financial statements.
NOTE 5 – MORTGAGES RECEIVABLE
(a) Mortgage portfolio
December 31, 2020
Outstanding % of
December 31, 2019
Outstanding % of
Number
25
21
16
63
13
138
20
158
Property type
Mid-rise residential(1)
Low-rise residential
High-rise residential(1)
House and apartment
Condominium corporation
Residential portfolio
Commercial
Mortgage portfolio
Accrued interest receivable
Mortgage discount
Unamortized origination fees
Allowance for mortgage losses
Mortgages receivable
amount
Portfolio Number
amount
$
$
199,525
174,362
170,074
45,522
2,165
591,648
153,666
745,314
3,458
(181)
(416)
(9,150)
739,025
26.8%
23.4%
22.8%
6.1%
0.3%
79.4%
20.6%
100.0%
23 $
32
13
91
14
173
19
192
$
177,242
216,144
157,758
66,083
2,659
619,886
109,859
729,745
3,780
(224)
(586)
(5,390)
727,325
Portfolio
24.3%
29.6%
21.6%
9.1%
0.4%
85.0%
15.0%
100.0%
(1) Comparative figures have been reclassified to conform to the revised definition of high-rise residential and mid-rise residential
property types. Additional information is set out in the “Investment Portfolio” section of the Management’s Discussion and
Analysis for the year ended December 31, 2020.
The mortgage portfolio has maturity dates between 2021 and 2030 with a weighted average remaining term
of 9.7 months at December 31, 2020 (December 31, 2019 – 8.7 months). The portfolio has a weighted average
interest rate (which excludes lender fees earned by the company) of 8.65% as at December 31, 2020 (8.81%
as at December 31, 2019).
Within the mortgage portfolio, at December 31, 2020 there were 20 mortgages receivable aggregating to
$123,218 (16.5% of the mortgage portfolio) in which the company has a subordinate position in a syndicated
mortgage receivable (December 31, 2019 – 24 mortgages receivable aggregating $108,055, 14.8% of the
mortgage portfolio). Additional analysis of the mortgage portfolio, including by location of underlying
property and type of mortgage, is set out in the “Investment Portfolio” section of the Management’s
Discussion and Analysis for the year ended December 31, 2020.
38 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – MORTGAGES RECEIVABLE (continued)
(a) Mortgage portfolio (continued)
A majority of the mortgages receivable have an initial closed period, after which the borrower may repay the
principal at any time prior to maturity, without penalty, subject to providing advance written notice according
to the terms of their mortgage.
Principal repayments based on contractual maturity dates are as follows:
Years ending December 31, 2021
2022
2023
2024
2025
Thereafter
(b) Allowance for mortgage losses
$ 503,047
137,614
102,784
743
442
684
$ 745,314
67.5%
18.5%
13.7%
0.1%
0.1%
0.1%
100.0%
The gross carrying amounts of mortgages receivable and the allowance for mortgage losses by property type
are as follows:
As at December 31, 2020
Gross carrying amount
Mid-rise residential
Low-rise residential
High-rise residential
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
Allowance for mortgage losses
Mid-rise residential
Low-rise residential
High-rise residential
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
Stage 1
$ 162,030
164,321
170,074
30,940
2,165
153,666
$ 683,196
Stage 2 Stage 3
$ 37,495 $
Total
– $ 199,525
174,362
170,074
45,522
2,165
153,666
$ 52,077 $ 10,041 $ 745,314
10,041
–
–
–
–
–
–
14,582
–
–
$
$
2,200
1,698
1,764
384
9
950
7,005
$
$
154 $
–
–
57
–
–
211 $
– $
1,934
–
–
–
–
1,934 $
2,354
3,632
1,764
441
9
950
9,150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 39
NOTE 5 – MORTGAGES RECEIVABLE (continued)
(b) Allowance for mortgage losses (continued)
As at December 31, 2019
Gross carrying amount
Mid-rise residential(1)
Low-rise residential
High-rise residential(1)
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
Stage 1
$ 177,242
200,928
157,758
65,154
2,659
105,554
$ 709,295
Stage 2 Stage 3
– $
$
15,216
–
929
–
4,305
$ 20,450 $
Total
– $ 177,242
216,144
–
157,758
–
66,083
–
2,659
–
–
109,859
− $ 729,745
$
Allowance for mortgage losses
Mid-rise residential(1)
Low-rise residential
High-rise residential(1)
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
1,233
1,715
1,097
251
18
1,076
5,390
(1) Comparative figures have been reclassified to conform to the revised definition of high-rise residential and mid-rise residential
property types. Additional information is set out in the “Investment Portfolio” section of the Management’s Discussion and
Analysis for the year ended December 31, 2020.
317
–
–
–
342
659 $
1,233
1,398
1,097
251
18
734
4,731
– $
–
–
–
–
–
− $
– $
$
$
$
The allowance for mortgage losses at December 31, 2020 is $9,150 (December 31, 2019 – $5,390). Of this
allowance, $7,005 (December 31, 2019 – $4,731) represents management’s estimate of the ECLs on
mortgages receivable in the company’s portfolio that have not experienced a significant increase in credit
risk since initial recognition (Stage 1). The ECL was assessed individually for each mortgage receivable and
commitment classified as Stages 2 and 3 and management estimated the ECL as $211 for mortgages
receivable classified as Stage 2 and $1,934 for those classified as Stage 3 at December 31, 2020 (December
31, 2019 – $659 and $nil, respectively).
The changes in the allowance for mortgage losses are shown in the following table:
Year ended December 31, 2020
Stage 1
$ 4,729
Stage 2
$
Stage 3
Total
5,390
– $
661 $
Opening balance, January 1, 2020
Allowance for mortgage losses
Transfers to Stage 1 (1)
Transfers to Stage 2 (1)
Transfers to Stage 3 (1)
Net remeasurement (2)
Mortgage advances
Mortgage repayments
Balance, December 31, 2020
(1) Transfers between stages which are presumed to occur before any corresponding remeasurement of the allowance.
(2) Net remeasurement represents the change in the expected credit loss related to changes in model inputs or assumptions, including
changes in macroeconomic conditions, and changes in measurement following a transfer between stages. It also includes post-
model overlays and adjustments as a result of the economic uncertainty related to the worldwide COVID-19 pandemic.
110
(378)
–
2,453
1,483
(1,394)
$ 7,003
–
–
410
1,921
–
(397)
1,934 $
(110)
378
(410)
(301)
–
(5)
213 $
–
–
–
4,073
1,483
(1,796)
9,150
$
During the year ended December 31, 2020, the allowance for mortgage losses for mortgages classified as
Stage 1 increased as a result of an increase in the portfolio and a post model adjustment made as a result of
the economic uncertainty of the worldwide COVID-19 pandemic. The allowance for mortgage losses for
mortgages classified as Stage 2 decreased as a result of transfers of mortgages receivable between Stage 2
and Stages 1 and 3 due to changes in credit risk and estimates of ECL of the mortgages receivable included
in Stage 2 at December 31, 2020. The allowance for mortgage losses classified as Stage 3 increased due to
the transfer of a mortgage receivable from Stage 2 to Stage 3 due to management’s estimate of impairment.
The ECL is assessed individually for Stage 2 and Stage 3 mortgages.
40 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – MORTGAGES RECEIVABLE (continued)
(b) Allowance for mortgage losses (continued)
Year ended December 31, 2019
Stage 1
$ 3,900
Stage 2
$
Stage 3
Total
3,900
– $
Opening balance, January 1, 2019
Allowance for mortgage losses
Transfers to Stage 1 (1)
Transfers to Stage 2 (1)
Transfers to Stage 3 (1)
Net remeasurement (2)
Mortgage advances
Mortgage repayments
Balance, December 31, 2019
(1) Transfers between stages which are presumed to occur before any corresponding remeasurement of the provision.
(2) Net remeasurement represents the change in the expected credit loss related to changes in model inputs or assumptions, including
–
(98)
–
612
1,854
(1,539)
$ 4,729
–
98
–
563
–
–
661 $
–
–
–
1,175
1,854
(1,539)
5,390
–
–
–
–
–
–
– $
– $
$
changes in macroeconomic conditions, and changes in measurement following a transfer between stages.
During the year ended December 31, 2019, the allowance for mortgage losses for mortgages classified as
Stage 1 increased primarily as a result of the overall increase in the mortgage portfolio. The allowance for
mortgage losses for mortgages classified as Stage 2 increased as a result of the transfer of mortgages
receivable from Stage 1 to Stage 2 due to a significant increase in credit risk since initial recognition, as well
as an increase in the ECL of an existing Stage 2 mortgage. The ECL is assessed individually for Stage 2
mortgages.
NOTE 6 – INVESTMENT PROPERTIES
Gross carrying amount
Impairment
Net carrying amount
$
Years ended December 31
2019
$ 17,007
(806)
$ 16,201
2020
17,007
(806)
16,201
$
Investment properties consist of two residential multi-unit rental properties, a four unit property in Leduc,
Alberta and a 90 unit property in Regina, Saskatchewan. At December 31, 2019, as a result of the economic
conditions in Saskatchewan affecting vacancy and rental rates, the company estimated that the carrying value
of the Regina property exceeded its value in use, resulting in an impairment loss of $806. The value in use
was estimated using a third-party valuation that considered a net operating income analysis, including
estimates of gross rental income, vacancy rates, operating and management expenses and capitalization rates,
as well as, available market evidence and comparable transactions. Increases (decreases) in gross rental
income will result in a higher (lower) value in use of the investment property. Increases (decreases) in the
vacancy rates, operating and management expenses or capitalization rates will result in a lower (higher) value
in use of the investment property. The recoverable amount of this Regina property is estimated to be its value
in use of $15,100.
Rental income
Revenue from investment properties
Property operating costs
Rental income
Years ended December 31
2020
$
$
1,132
(475)
657
2019
852
(776)
76
$
$
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 41
NOTE 7 – CREDIT FACILITY
At December 31, 2020, the company had a credit facility from a syndicate of four Canadian financial
institutions of $240,000 (December 31, 2019 – $210,000) at a formula rate that varies with bank prime and
the market bankers’ acceptance rate. At any time during the term of the credit facility, the company has the
one-time right to increase the credit facility by up to $30,000 (such that the total maximum availability would
be up to $270,000). The annualized weighted average rate for the year ended December 31, 2020 was 3.04%
(4.07% for the year ended December 31, 2019). Drawings under the credit facility may be by way of a bank
loan (including an overdraft facility of up to $5,000 (December 31, 2019 – $500)), bankers’ acceptances or
letters of credit (LCs). LCs represent irrevocable assurances that the company’s banks will make payments
in the event that a borrower of the company cannot meet its obligations to third parties. LCs carry the same
credit risk, recourse and collateral security requirements as mortgages extended to customers. The committed
credit facility was effective December 1, 2020, has a term to January 11, 2023, and is subject to certain
conditions of drawdown and other covenants.
The credit facility is secured by a lien over all of the company’s assets by means of a general security
agreement. The amount that may be drawn down under the credit facility is determined by the aggregate
value of mortgages receivable that are acceptable to the lender. Under the terms of the credit facility,
covenants must be met in respect of shareholders’ equity, debt to total assets and interest coverage. At
December 31, 2020 and December 31, 2019, the company was in compliance with these covenants.
Credit facility
Bankers’ acceptances
Bank loan
Overdraft facility
Unamortized finance costs
Borrowings under credit facility
Letters of credit
Total credit facility utilization
December 31
2020
$ 147,000
9,450
3,989
(785)
159,654
13,397
$ 173,051
2019
$ 113,000
10,490
447
(488)
123,449
8,428
$ 131,877
Interest on the credit facility is included in financing costs and calculated using the effective interest
method. Included in interest and other financing charges for the year ended December 31, 2020 is interest on
the credit facility of $4,586 (December 31, 2019 – $6,703) and bank fees and amortization of financing costs
of $299 (December 31, 2019 – $290).
NOTE 8 – RELATED PARTY TRANSACTIONS
The company pays management and mortgage servicing fees to Canadian Mortgage Capital Corporation
(CMCC), which is the manager of the company, and responsible for its day-to-day management. The majority
beneficial owner and Chief Executive Officer (CEO) of the manager is also CEO of the company. The
company incurred mortgage servicing and management fees of $7,036 for the year ended December 31, 2020
(year ended December 31, 2019 – $6,996). The management agreement between the company and CMCC
contains provisions for the payment of termination fees to the manager in the event that the management
agreement is terminated in certain circumstances. Amounts due to related party of $549 (December 31, 2019
– $565) are included in accounts payable and accrued liabilities and are due to CMCC, are in the normal
course of business, are non-interest bearing, due on demand and are paid within 30 days of each period end.
Under an employee share purchase plan (ESPP) for the company’s common shares, participants,
including employees of CMCC, may contribute up to an annual maximum to the ESPP and CMCC matches
50% of the participants’ contributions. The total amount matched by CMCC for the year ended December
31, 2020 was $62 (year ended December 31, 2019 – $48).
Certain of the company’s mortgages receivable are shared with other investors. As at December 31, 2020,
companies owned by a director and officer of the company had co-invested in one syndicated secured
mortgage receivable of $36,878, of which the company’s share was $26,341, of which $25,534 had been
funded at December 31, 2020 (December 31, 2019 – one syndicated mortgage receivable of $56,186, of
which the company’s share was $28,093, of which $28,093 had been funded).
42 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – RELATED PARTY TRANSACTIONS (continued)
As at December 31, 2020, the company had two mortgages receivables (December 31, 2019 – three)
from borrowers over which a director and officer of the company has joint control, with the company’s share
of the gross commitments totaling $10,040 (December 31, 2019 – $7,320), of which $6,842 had been funded
at December 31, 2020 (December 31, 2019 – $7,320). During the year ended December 31, 2020, the
company recognized net mortgage interest and fees of $821 (year ended December 31, 2019 – $679) from
these mortgage receivables.
Key management includes directors and officers of the company. Compensation expenses for key
management personnel include:
Years ended December 31
2020
2019
Directors’ fees (1) (Note 12)
Share-based payments to directors (Note 11)
Share-based payments to officers (Note 11)
179
120
70
369
(1) The cumulative adjustment for the fair value of deferred share units issued under the deferred share unit plan was $44 for the year
249
117
72
438
$
$
$
$
ended December 31, 2020 (year ended December 31, 2019 - $nil) (see Note 12 – Deferred Share Unit Plan)
Related party transactions are in the normal course of business and are recorded at the amount of
consideration established and agreed to by the related parties.
NOTE 9 – CONVERTIBLE DEBENTURES
5.60%
AI.DB.E
5.50%
AI.DB.D
Year ended December 31, 2020
Issued and outstanding
Convertible debenture
5.50%
AI.DB.B
6.25%
AI.DB.A
5.30%
AI.DB.C
5.25%
AI.DB
Total
$ 28,750
$ 34,500
$ 25,300
$ 40,250
$
–
$
–
$ 128,800
face value
Book value –
Convertible debentures,
beginning of year
Conversion to shares
Repayment of
$ 27,274
–
$ 32,888
–
$ 24,334
–
$ 39,639
–
$
convertible debenture
Accretion for the year
Convertible debentures,
–
275
–
263
–
211
–
343
end of year
$ 27,549
$ 33,151
$ 24,545
$ 39,982
$
–
–
–
–
–
$ 29,775
(4,914)
$ 153,910
(4,914)
(24,977)
116
(24,977)
1,208
$
–
$ 125,227
5.60%
AI.DB.E
5.50%
AI.DB.D
Year ended December 31, 2019
Issued and outstanding
Convertible debenture
5.50%
AI.DB.B
6.25%
AI.DB.A
5.30%
AI.DB.C
5.25%
AI.DB
Total
face value
Book value –
Convertible debentures,
beginning of year
Conversion to shares
Issued
Equity component
Issue costs
Issue costs attributed to
equity component
Repayment of
convertible debenture
Accretion for the year
Convertible debentures,
$ 28,750
$ 34,500
$ 25,300
$ 40,250
$
–
$ 29,914
$ 158,714
$
–
–
28,750
(351)
(1,369)
$ 32,627
–
–
–
–
$ 24,124
–
–
–
–
$ 39,299
–
–
–
–
$ 29,186
(990)
–
–
–
$ 32,053
(2,568)
–
–
–
$ 157,289
(3,558)
28,750
(351)
(1,369)
17
–
227
–
–
261
–
–
210
–
–
–
340
(28,278)
82
–
–
290
17
(28,278)
1,410
end of year
$ 27,274
$ 32,888
$ 24,334
$ 39,639
$
–
$ 29,775
$ 153,910
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 43
NOTE 9 – CONVERTIBLE DEBENTURES (continued)
On March 29, 2019, the company completed a public offering of 5.60% convertible debentures for gross
proceeds of $25,000. On April 16, 2019, the company received gross proceeds of $3,750 from the exercise
in full of the over-allotment option on the 5.60% convertible debentures.
Convertible debenture
5.60%
AI.DB.E
5.50%
AI.DB.D
March 31, 2025 Dec. 31, 2025
6 years
7 years
5.30%
AI.DB.C
6.25%
AI.DB.A
June 30, 2024 Sept. 30, 2021 March 31, 2019
7 years
5.50%
AI.DB.B
5 years
7 years
5.25%
AI.DB
June 30, 2020
7 years
$14.75/share
$15.60/share
$14.94/share
$14.65/share
$13.30/share
$13.50/share
March 31,
Sept. 30
June 30,
Dec. 31
June 30,
Dec. 31
March 31,
Sept. 30
March 31,
Sept. 30
June 30,
Dec. 31
Maturity date
Initial term
Conversion at option of
shareholder at:
Interest payment dates
Redeemable at the company’s
option at par plus accrued interest,
provided the weighted average
trading price of common shares is
not less than 125% of the conversion
price from
to
March 31, 2022 Dec. 31, 2021
March 31, 2024 Dec. 31, 2023
June 30, 2020
June 30, 2022
Sept. 30, 2017
Sept. 30, 2019
March 31, 2017
March 31, 2018
June 30, 2016
June 30, 2018
Redeemable at the company’s
option at par plus accrued interest
and unpaid interest after
March 31, 2024 Dec. 31, 2023
June 30, 2022
Sept. 30, 2019
March 31, 2018
June 30, 2018
On May 4, 2020, the company redeemed early all of the outstanding 5.25% convertible debentures for cash.
The redemption totalled an aggregate principal amount of $24,977 plus all accrued and unpaid interest.
Interest costs related to the convertible debentures are recorded in financing costs using the effective
interest rate method. Interest on the convertible debentures is included in financing costs and consists of the
following:
Coupon rate interest on convertible debentures
Accretion and other costs
Interest on convertible debentures
NOTE 10 – SHARE CAPITAL
Years ended December 31
2020
$
$
7,521
1,211
8,732
2019
8,818
1,414
10,232
$
$
The company is authorized to issue an unlimited number of common shares without par value. Common
shares rank equally with each other and have no preference, conversion, exchange or redemption rights.
Common shares participate pro rata with respect to any dividends paid, including distributions upon
termination and dissolution.
In February 2019, the company completed a public equity offering of 2,645,000 common shares,
including the exercise in full of the over-allotment option, at a price of $13.05 per share for gross proceeds
of $34,517.
In October 2019, the company completed a public equity offering of 1,288,000 common shares, including
the exercise in full of the over-allotment option, and a non-brokered private placement of 746,300 common
shares, all at a price of $13.40 per share for gross proceeds of $27,260.
The company has an optional dividend reinvestment plan (DRIP) for shareholders, whereby participants
may reinvest cash dividends in additional common shares of the company at the volume weighted average
price for five days prior to distribution, less a 2% discount. During the year ended December 31, 2020,
140,436 common shares were issued under the company’s DRIP (year ended December 31, 2019 – 326,876),
using reinvested dividends of $1,731 (year ended December 31, 2019 – $4,336). Shares issued under the
DRIP are issued by the company from treasury. On April 29, 2020, in response to the market disruption
caused by the COVID-19 pandemic, the company announced the suspension of its DRIP commencing with
the dividend payable on May 12, 2020 to shareholders of record on April 30, 2020. See Note 16 – Subsequent
events.
44 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – SHARE CAPITAL (continued)
On May 5, 2020, the company announced that the TSX had accepted a notice filed by the company of its
intention to make a normal course issuer bid (“NCIB”) with respect to its common shares. The notice provides
that the company may purchase up to 4,000,000 common shares during the twelve month period commencing
May 11, 2020 and ending on May 10, 2021. During the year ended December 31, 2020, the company did not
purchase any common shares under the NCIB.
Under the employee share purchase plan (ESPP), each participant may contribute up to an annual
maximum to the ESPP, and CMCC matches 50% of the participant’s contribution. Thus, the company does
not bear any of the cost of the ESPP, as it is reimbursed by CMCC and the participants.
NOTE 11 – SHARE-BASED PAYMENTS
Grants are provided to directors and certain employees of the manager under the company’s deferred share
incentive plan (“DSIP”). The DSIP units vest annually over three years. Common shares are issued to
participants on the vesting date of each tranche of the DSIP units, unless a participant elects to defer the
issuance. In addition, income deferred share incentive plan (“IDSIP”) units are credited to holders of DSIP
units granted before 2017 based upon dividends paid on common shares. The fair value of share-based
compensation was based upon the volume weighted average market price of the common shares five days
prior to the grant date of September 1, 2020 ($10.87) and September 3, 2019 ($13.72).
Balance, beginning of year
Units granted
Units earned
Units cancelled
Common shares issued
Balance, end of year
Share-based payments expense:
September 1, 2020 grant
September 3, 2019 grant
September 1, 2018 grant
September 1, 2017 grant
September 1, 2016 grant
September 1, 2015 grant
September 1, 2014 grant
August 30, 2013 grant
Years ended December 31
DSIP
units
73,000
22,600
–
(200)
(23,000)
72,400
2020
IDSIP
units
9,874
–
2,728
–
(1,259)
11,343
DSIP
units
68,667
22,000
–
–
(17,667)
73,000
2019
IDSIP
units
9,056
–
2,820
–
(2,002)
9,874
Total
77,723
22,000
2,820
–
(19,669)
82,874
Total
82,874
22,600
2,728
(200)
(24,259)
83,743
Years ended December 31
2020
2019
$
$
50
151
67
18
9
10
9
3
317
$
$
–
62
151
53
30
12
9
3
320
NOTE 12 – DEFERRED SHARE UNIT PLAN
The board of directors established a deferred share unit plan (“DSUP”) effective January 1, 2020 pursuant to
which each non-executive director is required to receive one-half of their director compensation in the form
of deferred share units (“DSUs”). Each non-executive director can elect to receive the remaining one-half of
their director compensation in DSUs or cash or a combination thereof. DSUs are credited to the director
DSUP accounts quarterly, in arrears, in an amount equal to the non-executive director’s remuneration elected
to be paid in DSUs divided by the fair market value of the common shares on the last day of the quarter. The
fair market value is equal to the volume-weighted average trading price of the company’s common shares on
the TSX for the five trading days immediately preceding that day. Dividend equivalents are credited to a non-
executive director’s DSUP account as if dividends were paid on each DSU held by a non-executive director
on the dividend record date and reinvested in additional DSUs at the fair market value on the dividend
payment date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 45
NOTE 12 – DEFERRED SHARE UNIT PLAN (continued)
DSUs can only be exercised when the non-executive director ceases to serve in any capacity with the
company. Payment will be made, at the election of the non-executive director, in either cash or common
shares of the company purchased in the market, net of applicable taxes or other amounts required to be
withheld or deducted, based on the fair market value of the company’s common shares on or about the date
of the payment. Amounts owed in relation to this plan of $267 (December 31, 2019 – $nil) are included in
accounts payable and accrued liabilities. DSU compensation expense is recognized in directors’ expense,
dividends earned on outstanding DSUs are recognized in interest and other financing charges and the
adjustment to fair value of units issued under the DSUP is recognized as an operating expense.
Directors fees paid in DSUs
Dividends on DSUs
Adjustment to fair value of DSUs
Outstanding DSUs, beginning of year
Granted
Reinvested
Balance, end of year
NOTE 13 – EARNINGS PER SHARE
Basic earnings per share –
Numerator
Net income and comprehensive income for the year
Denominator
Weighted average common shares outstanding
Basic earnings per share
Years ended December 31
2020
2019
$
$
215
8
44
267
–
–
–
–
$
Years ended December 31
2020
–
20,368
704
21,072
2019
–
–
–
–
Years ended December 31
2020
2019
$
39,188
$
38,568
42,323,737
0.93
$
39,596,762
0.97
$
Diluted earnings per share –
Numerator
Net income and comprehensive income for the year
Interest on convertible debentures
Net income and comprehensive income for diluted earnings per share
Denominator
Weighted average common shares outstanding
Convertible debentures
Deferred share incentive plan
Income deferred share units
Weighted average common shares outstanding – diluted basis
Diluted earnings per share
$
39,188
8,732
47,920
42,323,737
9,270,149
70,886
10,328
51,675,100
0.93
$
$
38,568
10,232
48,800
39,596,762
11,028,582
72,790
7,787
50,705,921
0.96
$
NOTE 14 – FINANCIAL INSTRUMENTS
(a) Classification of financial instruments
Financial assets comprise mortgages receivable and are classified and measured at amortized cost. Financial
liabilities comprise borrowings under credit facility, accounts payable and accrued liabilities, dividends
payable, accrued convertible debenture interest and the liability component of convertible debentures. The
liability for the deferred share unit plan is measured at FVTPL. All other financial liabilities are measured at
amortized cost.
46 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(b) Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between arm’s length market participants at the measurement date. The fair value hierarchy
establishes three levels to classify the inputs to valuation techniques used to measure fair value:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or
liabilities in active markets, inputs other than quoted prices that are observable for the asset or
liability, or inputs that are derived principally from or corroborated by observable market data or
other means.
Level 3 inputs are unobservable (supported by little or no market activity).
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3
inputs. All financial assets are classified and measured at amortized cost. Their carrying values approximate
their fair values due to their relatively short-term maturities and because market interest rates have not
fluctuated significantly since the date at which the loans were entered into. The fair value of borrowings
under credit facility approximates book value since it bears interest at floating rates. The accounts payable
and accrued liabilities, excluding the liability for the deferred share units, dividends payable and accrued
convertible debenture interest carrying values approximates their fair values due to the short-term nature of
the items. The liability for the deferred share units is measured at fair value using Level 1 inputs. The deferred
share units are measured at fair market value on the day they are credited to the directors’ DSUP accounts,
with fair value equal to the volume-weighted average trading price of the company’s common shares on the
TSX for the five trading days immediately preceding that day, and are remeasured using fair market value at
each reporting date.
The fair value of convertible debentures at the time of issue is established using Level 2 inputs. The fair
value of convertible debentures has been determined based on the closing prices of the convertible debentures
on the TSX on the respective dates.
Convertible debentures
Fair value
Less book value of equity component
Years ended December 31
2020
$ 130,250
(1,471)
$ 128,779
2019
$ 161,872
(1,837)
$ 160,035
Book value of financial liability component
$ 125,227
$ 153,910
(c) Credit risk
Mortgages receivable and issued letters of credit are exposed to credit risk. Credit risk is the risk that a
counterparty to a financial instrument will fail to discharge its obligation or commitment, resulting in a
financial loss to the company. The maximum exposure to credit risk related to mortgages receivable,
including letters of credit outstanding, at December 31, 2020 is $753,019 (December 31, 2019 – $736,570).
The company mitigates the credit risk by maintaining strict credit policies including due diligence
processes, credit limits, documentation requirements, review and approval of new and renewed mortgages
receivable by the board of directors or a subgroup thereof, quarterly review of the entire portfolio by the
board of directors, and other credit policies approved by the board of directors. Credit risk is approved by the
board of directors. These credit policies and processes have been consistently applied throughout the two
year period ended December 31, 2020.
All mortgages receivable are secured by the underlying real estate, plus other credit enhancements, which
may include guarantees from the borrowers, personal guarantees from the borrower’s shareholder(s) and/or
cross guarantees from related entities. The quality of the mortgage collateral is primarily driven by the
location and type of underlying property and type of mortgage receivable. For further information, refer to
Note 5(a) and to the “Investment Portfolio” section of the Management’s Discussion and Analysis for the
year ended December 31, 2020. Management continuously monitors real estate values and considers there to
have been no significant changes in the quality of the collateral underlying the remaining mortgage portfolio.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2020 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 47
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(c) Credit risk (continued)
At December 31, 2020, the largest borrower group accounted for 10.9% of mortgages receivable
(December 31, 2019 – 11.3%). See Note 5(a) and Note 5(b) for a breakdown of mortgages receivable and
the allowance for mortgage losses by property type.
(d) Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its obligations when due. The primary
sources of liquidity risk are the requirements to fund commitments for new mortgages, advances on existing
mortgages receivable, as well as obligations under the company’s credit facility. The company’s liquidity
risk is managed on an ongoing basis in accordance with the policies and procedures in place that reduce the
risk to an acceptable level. Policies and procedures include continuous monitoring of expected cash flows,
reviewing credit requirements with the company’s bankers, issuing convertible debentures or common shares
in the public markets from time to time as required, and staggering the maturities of convertible debentures
when they are issued.
From time to time the company has arranged temporary increases in its credit facility with its banks in
order to manage liquidity requirements, and expects to be able to continue to do so in the future if required.
The company’s significant financial liabilities include borrowings under credit facility, accounts payable and
accrued liabilities, dividends payable, accrued convertible debenture interest and the liability component of
convertible debentures. The borrowings under credit facility are drawn upon as required to discharge accounts
payable and accrued liabilities as well as to pay out dividends on a monthly basis. The company’s agreement
with the lender is that the operating line will not be called provided that all covenants are met and that any
significant excess cash is used to pay down the borrowings under credit facility.
December 31, 2020
Borrowings under credit facility1
Accounts payable and accrued
liabilities
Accrued convertible debenture
interest
Dividends payable
Convertible debentures2
Total
Unadvanced mortgage
commitments3
Total contractual liabilities
956
4,029
125,227
293,213
–
$293,213
Carrying
value
$160,439
Contractual
cash flow
$171,067
Within 1
year
1 to 3
years
$5,235 $165,832
3 to 5
years
$ –
More than
5 years
$ –
2,562
2,562
2,562
–
–
956
4,029
141,737
320,351
956
4,029
45,099
57,881
–
–
67,485
233,317
–
–
29,153
29,153
84,095
–
$404,446 $141,976 $233,317
84,095
–
$ 29,153
–
$ –
–
–
–
–
–
Notes:
(1) Includes interest assuming the outstanding balance is not repaid until maturity on January 11, 2023.
(2) The 5.50% 2021 debentures are assumed to be repaid in the first quarter of 2021; 5.30% debentures are assumed to be repaid June 30, 2022;
5.50% 2025 debentures are assumed to be repaid December 31, 2023 and 5.60% debentures are assumed to be repaid March 31, 2024.
(3) Unadvanced mortgage commitments include additional funds on existing mortgages receivable and new mortgage commitments. The
experience of the company has been that a portion of the unadvanced amounts on existing mortgages receivable will never be drawn.
As at December 31, 2020, management considers that it has adequate procedures in place to manage liquidity
risk.
48 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2020 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(e) Interest rate risk
The company is exposed to interest rate risk in that an increase in interest rates will result in increased interest
expense due to its borrowings under credit facility being set at a variable rate and mortgages receivable are
set at a combination of fixed and variable rates. The financial structure of the company results in relatively
moderate interest rate risk because a majority of the company’s financing is through common shares and
convertible debentures, with a moderate amount of borrowings under the credit facility that bear floating
interest rates.
If interest rates on debt had been one percentage point higher (lower) during the year ended December
31, 2020, income and comprehensive income would have been reduced (increased) by approximately $1,366
during the year, assuming that no changes had been made to the interest rates at which new mortgage loans
were entered into. However, if new mortgage loans had been entered into at higher (lower) interest rates, the
resulting reduction of income and comprehensive income would have been less than (greater than) $1,366.
(f) Currency risk
Currency risk is the risk that the value of financial assets and financial liabilities will fluctuate due to changes
in foreign exchange rates. The company is not exposed to currency risk as all financial assets and financial
liabilities are denominated in Canadian funds.
NOTE 15 – CAPITAL MANAGEMENT
The company defines capital as total debt plus shareholders’ equity, as shown below:
Borrowings under credit facility
Convertible debentures
Total debt
Shareholders’ equity
Capital employed
December 31
2020
$ 159,654
125,227
284,881
462,887
$ 747,768
2019
$ 123,449
153,910
277,359
455,520
$ 732,879
The company’s objectives for managing capital are to preserve shareholders’ equity, provide shareholders
with stable dividends, and to use leverage in a conservative manner to improve return to shareholders. The
company finances growth of its portfolio by issuing common shares and debt. In addition, a small amount of
equity is raised every month through the employee share purchase plan and through a dividend reinvestment
plan for shareholders. The dividend reinvestment plan was suspended on April 29, 2020. See Note 16 –
Subsequent events.
As bank borrowings increase, the company could expect to raise further funds through public offerings
of convertible debentures or common shares, and through private placements of debt. The borrowings under
credit facility are subject to external covenants as set out in Note 7 – Credit facility. There has been no change
in the company’s capital management objectives since the prior year.
NOTE 16 – SUBSEQUENT EVENTS
On January 14, 2021, the company announced the reinstatement of its dividend reinvestment plan
commencing with the dividend payable on February 12, 2021 to shareholders of record on January 29, 2021.
As at February 9, 2021, the company had collected 98% of the mortgage interest due in January, which is in
line with historical collection rates.
Corporate Directory
Board of Directors
(cid:76)(cid:147)(cid:149)(cid:147)(cid:139)(cid:390)(cid:396)(cid:390)(cid:149)(cid:400)
(cid:16)(cid:401)(cid:407)(cid:392)(cid:400)(cid:148)(cid:399)(cid:141)
(cid:29)(cid:399)(cid:148)(cid:403)(cid:390)(cid:1)(cid:100)(cid:148)(cid:388)(cid:390)(cid:399)(cid:396)(cid:147)(cid:149)(cid:1)(cid:71)(cid:71)(cid:94)(cid:1)
(cid:417)(cid:417)(cid:416)(cid:416)(cid:1)(cid:143)(cid:1)(cid:446)(cid:1)(cid:100)(cid:400)(cid:234)(cid:1)(cid:29)(cid:395)(cid:147)(cid:392)(cid:399)(cid:1)(cid:16)(cid:402)(cid:390)(cid:234)(cid:1)(cid:38)(cid:234)(cid:1)
(cid:106)(cid:148)(cid:399)(cid:148)(cid:149)(cid:400)(cid:148)(cid:232)(cid:1)(cid:82)(cid:77)(cid:1)(cid:76)(cid:447)(cid:106)(cid:1)(cid:446)(cid:106)(cid:448)(cid:1)
(cid:106)(cid:234)(cid:1)(cid:230)(cid:447)(cid:417)(cid:213)(cid:231)(cid:1)(cid:214)(cid:213)(cid:447)(cid:233)(cid:419)(cid:213)(cid:418)(cid:418)
(cid:100)(cid:140)(cid:147)(cid:399)(cid:390)(cid:1)(cid:71)(cid:392)(cid:141)(cid:400)(cid:392)(cid:149)(cid:139)
(cid:29)(cid:148)(cid:396)(cid:396)(cid:148)(cid:149)(cid:1)(cid:141)(cid:140)(cid:147)(cid:399)(cid:390)(cid:141)(cid:232)(cid:1)
(cid:106)(cid:100)(cid:127)(cid:235)(cid:1)(cid:16)(cid:57)
(cid:29)(cid:148)(cid:149)(cid:402)(cid:390)(cid:399)(cid:400)(cid:392)(cid:388)(cid:395)(cid:390)(cid:1)(cid:407)(cid:390)(cid:388)(cid:390)(cid:149)(cid:400)(cid:401)(cid:399)(cid:390)(cid:141)(cid:1)(cid:448)(cid:234)(cid:448)(cid:416)(cid:252)(cid:232)(cid:1)
(cid:106)(cid:100)(cid:127)(cid:235)(cid:1)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:28)
(cid:29)(cid:148)(cid:149)(cid:402)(cid:390)(cid:399)(cid:400)(cid:392)(cid:388)(cid:395)(cid:390)(cid:1)(cid:407)(cid:390)(cid:388)(cid:390)(cid:149)(cid:400)(cid:401)(cid:399)(cid:390)(cid:141)(cid:1)(cid:448)(cid:234)(cid:418)(cid:416)(cid:252)(cid:232)(cid:1)
(cid:106)(cid:100)(cid:127)(cid:235)(cid:1)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:29)
(cid:29)(cid:148)(cid:149)(cid:402)(cid:390)(cid:399)(cid:400)(cid:392)(cid:388)(cid:395)(cid:390)(cid:1)(cid:407)(cid:390)(cid:388)(cid:390)(cid:149)(cid:400)(cid:401)(cid:399)(cid:390)(cid:141)(cid:1)(cid:448)(cid:234)(cid:448)(cid:416)(cid:252)(cid:232)(cid:1)
(cid:106)(cid:100)(cid:127)(cid:235)(cid:1)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:35)
(cid:29)(cid:148)(cid:149)(cid:402)(cid:390)(cid:399)(cid:400)(cid:392)(cid:388)(cid:395)(cid:390)(cid:1)(cid:407)(cid:390)(cid:388)(cid:390)(cid:149)(cid:400)(cid:401)(cid:399)(cid:390)(cid:141)(cid:1)(cid:448)(cid:234)(cid:213)(cid:416)(cid:252)(cid:232)(cid:1)
(cid:106)(cid:100)(cid:127)(cid:235)(cid:1)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:38)
(cid:76)(cid:147)(cid:399)(cid:394)(cid:1)(cid:71)(cid:234)(cid:1)(cid:100)(cid:392)(cid:395)(cid:402)(cid:390)(cid:399)
Chair of the Board,
Atrium Mortgage
Investment Corporation
President, Optus Capital Corporation
(cid:96)(cid:148)(cid:388)(cid:390)(cid:399)(cid:400)(cid:1)(cid:49)(cid:234)(cid:1)(cid:49)(cid:148)(cid:148)(cid:407)(cid:147)(cid:395)(cid:395)
CEO and President,
Atrium Mortgage
Investment Corporation
(cid:94)(cid:390)(cid:400)(cid:390)(cid:399)(cid:1)(cid:94)(cid:234)(cid:1)(cid:29)(cid:148)(cid:140)(cid:148)(cid:141)(cid:1)(cid:417)(cid:232)(cid:447)
President,
Copez Properties Ltd.
(cid:96)(cid:148)(cid:388)(cid:390)(cid:399)(cid:400)(cid:1)(cid:54)(cid:234)(cid:1)(cid:35)(cid:390)(cid:49)(cid:147)(cid:141)(cid:397)(cid:390)(cid:399)(cid:392)(cid:141)
President,
Metrus Properties Inc.
(cid:16)(cid:149)(cid:407)(cid:399)(cid:390)(cid:403)(cid:1)(cid:49)(cid:399)(cid:147)(cid:149)(cid:400)(cid:1)(cid:447)
President,
PCI (cid:35)(cid:390)(cid:402)(cid:390)(cid:395)(cid:148)(cid:397)(cid:396)(cid:390)(cid:149)(cid:400)(cid:141)
(cid:97)(cid:72)(cid:13)(cid:22)(cid:12)(cid:3)(cid:45)(cid:72)(cid:11)(cid:72)(cid:76)(cid:3)(cid:32)
(cid:94)(cid:399)(cid:390)(cid:141)(cid:392)(cid:407)(cid:390)(cid:149)(cid:400)(cid:232)
(cid:29)(cid:147)(cid:149)(cid:147)(cid:395)(cid:1)(cid:49)(cid:399)(cid:148)(cid:401)(cid:397)
(cid:77)(cid:147)(cid:149)(cid:389)(cid:405)(cid:1)(cid:54)(cid:234)(cid:1)(cid:82)(cid:234)(cid:1)(cid:71)(cid:148)(cid:389)(cid:394)(cid:140)(cid:147)(cid:399)(cid:400)(cid:1)(cid:446)(cid:232)(cid:418)
Director, (cid:49)(cid:390)(cid:148)(cid:399)(cid:139)(cid:390)(cid:1)(cid:122)(cid:390)(cid:141)(cid:400)(cid:148)(cid:149)(cid:1)(cid:71)(cid:400)(cid:407)(cid:234)
Director, (cid:29)(cid:140)(cid:148)(cid:392)(cid:389)(cid:390)(cid:1)(cid:94)(cid:399)(cid:148)(cid:397)(cid:390)(cid:399)(cid:400)(cid:392)(cid:390)(cid:141)(cid:1)(cid:96)(cid:38)(cid:57)(cid:106)
1. Chair of Audit Committee
2. Member of Audit Committee
3. (cid:1)Chair of (cid:29)(cid:148)(cid:396)(cid:397)(cid:390)(cid:149)(cid:141)(cid:147)(cid:400)(cid:392)(cid:148)(cid:149)(cid:232)(cid:1)
Nominating and Governance Committee
4. Member of(cid:1)(cid:29)(cid:148)(cid:396)(cid:397)(cid:390)(cid:149)(cid:141)(cid:147)(cid:400)(cid:392)(cid:148)(cid:149)(cid:232)(cid:1)
Nominating and Governance Committee
(cid:96)(cid:148)(cid:388)(cid:390)(cid:399)(cid:400)(cid:1)(cid:49)(cid:234)(cid:1)(cid:49)(cid:148)(cid:148)(cid:407)(cid:147)(cid:395)(cid:395)(cid:1)
(cid:29)(cid:38)(cid:82)(cid:1)(cid:147)(cid:149)(cid:407)(cid:1)(cid:94)(cid:399)(cid:390)(cid:141)(cid:392)(cid:407)(cid:390)(cid:149)(cid:400)
(cid:67)(cid:390)(cid:149)(cid:149)(cid:392)(cid:391)(cid:390)(cid:399)(cid:1)(cid:100)(cid:389)(cid:148)(cid:391)(cid:391)(cid:392)(cid:390)(cid:395)(cid:407)(cid:1)(cid:29)(cid:94)(cid:16)(cid:232)(cid:1)(cid:29)(cid:16)(cid:1)
(cid:29)(cid:48)(cid:82)(cid:1)(cid:147)(cid:149)(cid:407)(cid:1)(cid:100)(cid:390)(cid:389)(cid:399)(cid:390)(cid:400)(cid:147)(cid:399)(cid:405)
(cid:28)(cid:399)(cid:147)(cid:396)(cid:1)(cid:96)(cid:148)(cid:400)(cid:140)(cid:396)(cid:147)(cid:149)(cid:1)
(cid:76)(cid:147)(cid:149)(cid:147)(cid:139)(cid:392)(cid:149)(cid:139)(cid:1)(cid:35)(cid:392)(cid:399)(cid:390)(cid:389)(cid:400)(cid:148)(cid:399)(cid:1)(cid:143)(cid:1)(cid:82)(cid:149)(cid:400)(cid:147)(cid:399)(cid:392)(cid:148)
(cid:96)(cid:392)(cid:389)(cid:140)(cid:147)(cid:399)(cid:407)(cid:1)(cid:76)(cid:401)(cid:149)(cid:399)(cid:148)(cid:390)(cid:1)
(cid:76)(cid:147)(cid:149)(cid:147)(cid:139)(cid:392)(cid:149)(cid:139)(cid:1)(cid:35)(cid:392)(cid:399)(cid:390)(cid:389)(cid:400)(cid:148)(cid:399)(cid:1)(cid:143)(cid:1)(cid:82)(cid:149)(cid:400)(cid:147)(cid:399)(cid:392)(cid:148)
(cid:94)(cid:140)(cid:392)(cid:395)(cid:1)(cid:48)(cid:392)(cid:401)(cid:406)(cid:147)(cid:1)
(cid:76)(cid:147)(cid:149)(cid:147)(cid:139)(cid:392)(cid:149)(cid:139)(cid:1)(cid:35)(cid:392)(cid:399)(cid:390)(cid:389)(cid:400)(cid:148)(cid:399)(cid:1)(cid:143)(cid:1)
(cid:82)(cid:149)(cid:400)(cid:147)(cid:399)(cid:392)(cid:148)(cid:232)(cid:1)(cid:96)(cid:390)(cid:141)(cid:392)(cid:407)(cid:390)(cid:149)(cid:400)(cid:392)(cid:147)(cid:395)
(cid:76)(cid:147)(cid:399)(cid:392)(cid:147)(cid:149)(cid:149)(cid:390)(cid:1)(cid:35)(cid:148)(cid:388)(cid:141)(cid:395)(cid:147)(cid:403)(cid:1)
(cid:76)(cid:147)(cid:149)(cid:147)(cid:139)(cid:392)(cid:149)(cid:139)(cid:1)(cid:35)(cid:392)(cid:399)(cid:390)(cid:389)(cid:400)(cid:148)(cid:399)(cid:1)(cid:143)(cid:1)
(cid:28)(cid:399)(cid:392)(cid:400)(cid:392)(cid:141)(cid:140)(cid:1)(cid:29)(cid:148)(cid:395)(cid:401)(cid:396)(cid:388)(cid:392)(cid:147)
(cid:106)(cid:399)(cid:147)(cid:149)(cid:141)(cid:391)(cid:390)(cid:399)(cid:1)(cid:16)(cid:139)(cid:390)(cid:149)(cid:400)
(cid:29)(cid:148)(cid:396)(cid:397)(cid:401)(cid:400)(cid:390)(cid:399)(cid:141)(cid:140)(cid:147)(cid:399)(cid:390)(cid:1)(cid:106)(cid:399)(cid:401)(cid:141)(cid:400)(cid:1)(cid:29)(cid:148)(cid:234)(cid:1)(cid:1)
(cid:148)(cid:391)(cid:1)(cid:29)(cid:147)(cid:149)(cid:147)(cid:407)(cid:147)(cid:1)
(cid:417)(cid:416)(cid:416)(cid:1)(cid:110)(cid:149)(cid:392)(cid:402)(cid:390)(cid:399)(cid:141)(cid:392)(cid:400)(cid:405)(cid:1)(cid:16)(cid:402)(cid:390)(cid:234)(cid:1)
(cid:214)(cid:400)(cid:140)(cid:1)(cid:48)(cid:395)(cid:148)(cid:148)(cid:399)(cid:232)(cid:1)(cid:77)(cid:148)(cid:399)(cid:400)(cid:140)(cid:1)(cid:106)(cid:148)(cid:403)(cid:390)(cid:399)(cid:1)
(cid:106)(cid:148)(cid:399)(cid:148)(cid:149)(cid:400)(cid:148)(cid:232)(cid:1)(cid:82)(cid:77)(cid:1)(cid:76)(cid:448)(cid:67)(cid:1)(cid:446)(cid:128)(cid:417)(cid:1)
(cid:106)(cid:234)(cid:1)(cid:230)(cid:420)(cid:416)(cid:416)(cid:231)(cid:1)(cid:448)(cid:213)(cid:447)(cid:233)(cid:213)(cid:446)(cid:448)(cid:418)
(cid:48)(cid:148)(cid:397)(cid:1)(cid:446)(cid:234)(cid:416)(cid:414)(cid:252)(cid:1)(cid:230)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:29)(cid:231)(cid:232)(cid:1)(cid:446)(cid:234)(cid:446)(cid:414)(cid:252)
(cid:230)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:35)(cid:231)(cid:232)(cid:1)(cid:147)(cid:149)(cid:405)(cid:1)(cid:446)(cid:234)(cid:213)(cid:414)(cid:252)(cid:1)(cid:230)(cid:16)(cid:57)(cid:234)(cid:35)(cid:28)(cid:234)(cid:38)(cid:231)(cid:1)
(cid:29)(cid:148)(cid:149)(cid:400)(cid:388)(cid:397)(cid:398)(cid:390)(cid:386)(cid:393)(cid:388)(cid:1)(cid:35)(cid:388)(cid:386)(cid:388)(cid:149)(cid:398)(cid:399)(cid:397)(cid:388)(cid:141)(cid:1)
(cid:16)(cid:100)(cid:106)(cid:1)(cid:106)(cid:399)(cid:401)(cid:141)(cid:400)(cid:1)(cid:29)(cid:148)(cid:396)(cid:397)(cid:147)(cid:149)(cid:405)
(cid:417)(cid:1)(cid:106)(cid:148)(cid:399)(cid:148)(cid:149)(cid:400)(cid:148)(cid:1)(cid:100)(cid:400)(cid:234)(cid:232)(cid:1)(cid:100)(cid:401)(cid:392)(cid:400)(cid:390)(cid:1)(cid:417)(cid:446)(cid:416)(cid:416)(cid:1)
(cid:106)(cid:148)(cid:399)(cid:148)(cid:149)(cid:400)(cid:148)(cid:232)(cid:1)(cid:82)(cid:77)(cid:1)(cid:76)(cid:448)(cid:29)(cid:1)(cid:446)(cid:121)(cid:213)
(cid:106)(cid:234)(cid:1)(cid:230)(cid:420)(cid:416)(cid:416)(cid:231)(cid:1)(cid:418)(cid:420)(cid:419)(cid:233)(cid:416)(cid:420)(cid:446)(cid:448)(cid:1)
20 Adelaide Street East - Suite 900
Toronto, Ontario M5C 2T6
T. 416 867 1053
F. 416 867 1303
W. info@atriummic.com