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20(cid:446)(cid:446)
(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:446)
CANADA’S PREMIER NON-BANK LENDER™
Table
of Contents
1
5
(cid:446)(cid:417)
(cid:448)(cid:418)
Earnings Press Release
Management’s Discussion and Analysis(cid:1)
Consolidated Financial Statements(cid:1)
Corporate Directory
About Atrium Mortgage Investment Corporation
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(cid:392)(cid:149)(cid:389)(cid:148)(cid:396)(cid:390)(cid:1) (cid:147)(cid:149)(cid:407)(cid:1) (cid:407)(cid:392)(cid:402)(cid:392)(cid:407)(cid:390)(cid:149)(cid:407)(cid:141)(cid:1) (cid:400)(cid:140)(cid:399)(cid:148)(cid:401)(cid:139)(cid:140)(cid:1) (cid:389)(cid:147)(cid:399)(cid:390)(cid:391)(cid:401)(cid:395)(cid:1) (cid:401)(cid:149)(cid:407)(cid:390)(cid:399)(cid:403)(cid:399)(cid:392)(cid:400)(cid:392)(cid:149)(cid:139)(cid:1) (cid:147)(cid:149)(cid:407)(cid:1)
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(cid:29)(cid:148)(cid:399)(cid:397)(cid:148)(cid:399)(cid:147)(cid:400)(cid:392)(cid:148)(cid:149)(cid:1)
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(cid:82)(cid:401)(cid:399)(cid:1) (cid:399)(cid:390)(cid:139)(cid:401)(cid:395)(cid:147)(cid:399)(cid:1) (cid:407)(cid:392)(cid:402)(cid:392)(cid:407)(cid:390)(cid:149)(cid:407)(cid:1) (cid:392)(cid:141)(cid:1) (cid:397)(cid:147)(cid:392)(cid:407)(cid:1) (cid:396)(cid:148)(cid:149)(cid:400)(cid:140)(cid:395)(cid:405)(cid:232)(cid:1) (cid:389)(cid:401)(cid:399)(cid:399)(cid:390)(cid:149)(cid:400)(cid:395)(cid:405)(cid:1) (cid:147)(cid:400)(cid:1) (cid:147)(cid:1) (cid:399)(cid:147)(cid:400)(cid:390)(cid:1)
(cid:148)(cid:391)(cid:1)(cid:144)(cid:416)(cid:234)(cid:416)(cid:419)(cid:448)(cid:1)(cid:397)(cid:390)(cid:399)(cid:1)(cid:141)(cid:140)(cid:147)(cid:399)(cid:390)(cid:1)(cid:397)(cid:390)(cid:399)(cid:1)(cid:396)(cid:148)(cid:149)(cid:400)(cid:140)(cid:234)
(cid:82)(cid:401)(cid:399)(cid:1)(cid:407)(cid:392)(cid:402)(cid:392)(cid:407)(cid:390)(cid:149)(cid:407)(cid:141)(cid:1)(cid:141)(cid:392)(cid:149)(cid:389)(cid:390)(cid:1)(cid:446)(cid:416)(cid:417)(cid:419)(cid:1)(cid:147)(cid:399)(cid:390)(cid:1)(cid:147)(cid:141)(cid:1)(cid:391)(cid:148)(cid:395)(cid:395)(cid:148)(cid:403)(cid:141)(cid:235)(cid:1)
Year
(cid:446)(cid:416)(cid:417)(cid:419)
(cid:446)(cid:416)(cid:417)(cid:420)
(cid:446)(cid:416)(cid:417)(cid:214)
(cid:446)(cid:416)(cid:446)(cid:416)
(cid:446)(cid:416)(cid:446)(cid:417)
(cid:446)(cid:416)(cid:446)(cid:446)
(cid:446)(cid:416)(cid:446)(cid:418)
Regular dividend
(cid:100)(cid:397)(cid:390)(cid:389)(cid:392)(cid:147)(cid:395) dividend
Total dividends paid
Earnings per share (basic)
(cid:144)(cid:416)(cid:234)(cid:420)(cid:420)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:416)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:416)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:416)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:416)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:416)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:416)
(cid:144)(cid:416)(cid:234)(cid:416)(cid:447)
(cid:144)(cid:416)(cid:234)(cid:416)(cid:447)
(cid:144)(cid:416)(cid:234)(cid:416)(cid:213)
(cid:144)(cid:416)(cid:234)(cid:416)(cid:446)
(cid:144)(cid:416)(cid:234)(cid:416)(cid:419)
(cid:144)(cid:416)(cid:234)(cid:446)(cid:418)
(cid:400)(cid:148)(cid:1)(cid:388)(cid:390)(cid:1)(cid:407)(cid:390)(cid:400)(cid:390)(cid:399)(cid:396)(cid:392)(cid:149)(cid:390)(cid:407)
(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:214)(cid:419)
(cid:144)(cid:417)(cid:234)(cid:417)(cid:418)
(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)
(cid:144)(cid:416)(cid:234)(cid:214)(cid:420)
(cid:144)(cid:417)(cid:234)(cid:416)(cid:420)
00
FOR IMMEDIATE RELEASE
ATRIUM MORTGAGE INVESTMENT CORPORATION
ANNOUNCES HIGHEST QUARTERLY AND ANNUAL NET INCOME IN ITS HISTORY
AND A RECORD SPECIAL DIVIDEND
TORONTO: February 14, 2023 – Atrium Mortgage Investment Corporation (TSX: AI, AI.DB.C, AI.DB.D,
AI.DB.E, AI.DB.F, AI.DB.G) today released its financial results for the year ended December 31, 2022.
Highlights
Record annual basic and diluted earnings per share since going public 10 years ago of $1.08
and $1.06, respectively, compared to $0.98 basic and diluted per share in the prior year
Record quarterly basic and diluted earnings per share since going public of $0.31 and $0.30,
respectively, compared to $0.25 basic and diluted per share in the comparative period
Record net income of $46.3 million, up 10.9% from prior year
Record gross mortgage portfolio of $866.3 million, an 12.9% increase from December 31,
2021
$0.23 per share special dividend to shareholders of record on December 30, 2022
High quality mortgage portfolio
o 92.5% of portfolio in first mortgages
o 97.1% of portfolio is less than 75% loan to value
o average loan-to-value of 59.4%
“2022 proved to be a record year for Atrium in terms of portfolio growth and earnings. Our EPS of $1.08
was the highest in our company’s history as a publicly traded company. The mortgage portfolio of $866
million was almost $100 million larger than last year, which reflects the increased size and quality of our
underwriting teams in Toronto and Vancouver. Over the course of the year, we repositioned the portfolio
to benefit from rising short term rates and by year end over 75% of the portfolio had prime-based pricing,
compared to 60% at the start of the year. Most importantly, we continued to lend on a disciplined basis
through conservative underwriting, active portfolio management, and a focus on high quality borrowers in
large urban centers. As a result, the mortgage portfolio was defensively positioned at year end with a
weighted average portfolio loan to value of 59.4%, only 1.1% of the portfolio in default, and first mortgages
representing 92.5% of the portfolio. Our primary focus in 2023 will be maintaining a resilient mortgage
portfolio that can withstand an economic slowdown and soft real estate market conditions” said Robert
Goodall, CEO of Atrium.
Results of operations
For the year ended December 31, 2022, Atrium reported record assets of $874.8 million, up from $775.5
million at the end of 2021. Revenues were $78.4 million, an increase of 22.0% from the prior year. Net
income for 2022 was $46.3 million, an increase of 10.9% from the prior year. Atrium’s allowance for
mortgage losses at December 31, 2022 totaled $10.7 million, or 1.24% of the gross mortgage portfolio.
1
Basic and diluted earnings per common share were $1.08 and $1.06, respectively, for the year ended
December 31, 2022, compared with $0.98 basic and diluted earnings per common share in the prior year,
an increase of 10.2% (basic). Basic and diluted earnings per common share were $0.31 and $0.30,
respectively, for the fourth quarter compared to $0.25 basic and diluted in the comparative quarter.
The board of directors declared a special dividend of $0.23 for 2022, resulting in a total dividend of $1.13
per common share paid to shareholders in the year, compared to $0.97 for the prior year.
Mortgages receivable as at December 31, 2022 was a record $860.4 million, up from $759.2 million as at
December 31, 2021. During the year ended December 31, 2022, $517.6 million of mortgage principal was
advanced and $429.8 million was repaid. The weighted average interest rate on the mortgage portfolio at
December 31, 2022 was 10.77%, compared to 8.26% at December 31, 2021.
Financial summary
Consolidated Statements of Income and Comprehensive Income
(000s, except per share amounts)
Year
ended
December 31
2022
Year
ended
December 31
2021
Year
ended
December 31
2020
Revenue
Mortgage servicing and management fees
Other expenses
Impairment loss on investment property held for sale
Recovery of prior mortgage losses
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
Property Type
(outstanding amounts in 000s)
High-rise residential
Mid-rise residential
Low-rise residential
House and apartment
Condominium corporation
Residential portfolio
Commercial
Mortgage portfolio
$
$
$
$
$
$
$
$
78,371 $
(8,526)
(1,098)
(1,832)
1,050
(1,914)
66,051
(19,719)
46,332 $
64,235 $
(7,241 )
(1,382 )
−
−
(1,289 )
54,323
(12,530 )
41,793 $
1.08 $
1.06 $
0.98 $
0.98 $
65,019
(7,036)
(1,410)
−
−
(3,760)
52,813
(13,625)
39,188
0.93
0.93
48,736 $
41,346 $
38,970
860,374 $
874,780 $
475,564 $
759,225 $
$
775,487
$
470,167
739,025
755,315
462,887
As at December 31, 2022
As at December 31, 2021
Outstanding % of
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
20 $
30
14
158
12
234
26
260 $
300,989
225,281
128,244
108,124
2,189
764,827
101,435
866,262
34.7%
26.0%
14.8%
12.5%
0.3%
88.3%
11.7%
100.0%
18 $
34
15
101
13
181
16
197 $
234,847
253,507
122,569
70,944
1,752
683,619
83,512
767,131
30.6%
33.0%
16.0%
9.3%
0.2%
89.1%
10.9%
100.0%
2
Number of
Location of underlying property mortgages
(outstanding amounts in 000s)
Greater Toronto Area
Non-GTA Ontario
British Columbia
Alberta
169
61
28
2
260
Number of
Location of underlying property mortgages
(outstanding amounts in 000s)
Greater Toronto Area
Non-GTA Ontario
British Columbia
Alberta
126
44
25
2
197
As at December 31, 2022
Outstanding
amount
Percentage
outstanding
Weighted
average
loan to value
Weighted
average
interest rate
598,207
38,950
220,727
8,378
866,262
69.0%
4.5%
25.5%
1.0%
100.0%
59.7%
68.7%
56.4%
71.2%
59.4%
11.04%
8.25%
10.41%
12.55%
10.77%
As at December 31, 2021
Outstanding
amount
Percentage
outstanding
Weighted
average
loan to value
Weighted
average
interest rate
472,851
33,361
253,771
7,148
767,131
61.6%
4.4%
33.1%
0.9%
100.0%
62.3%
67.4%
56.7%
94.4%
60.9%
8.34%
7.65%
8.17%
8.90%
8.26%
$
$
$
$
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, 2022, available on SEDAR at www.sedar.com, and on the company’s website
at www.atriummic.com.
Conference call
Interested parties are invited to participate in a conference call with management Wednesday, February 15,
2023 at 4:00 p.m. ET to discuss the results. To participate or listen to the conference call live, please call 1
(888) 886-7786 or (416) 764-8658, conference ID 01171657. For a replay of the conference call (available
until February 28, 2023) please call 1 (877) 674-6060, conference ID 171657#.
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
John Ahmad
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:1)(cid:418)(cid:417)(cid:232)(cid:1)(cid:446)(cid:416)(cid:446)(cid:446)
CANADA’S PREMIER NON-BANK LENDER™
6 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis
December 31, 2022
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 21-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 14, 2023.
Highlights
Atrium continues to demonstrate strength and stability. For the year ended December 31, 2022, we
had revenues of $78.4 million compared to $64.2 million in the prior year, an increase of 22.0%.
Net income was $46.3 million compared with $41.8 million in the prior year, an increase of 10.9%.
Basic and diluted earnings per share were $1.08 and $1.06, respectively, compared with $0.98
basic and diluted earnings per share in the prior year, an increase of 10.2% basic and 8.2% diluted.
We declared a regular dividend of $0.075 per share for each month in the year, a total of $0.90
for 2022, consistent with dividends of $0.90 for the prior year. In addition, we declared a special
dividend of $0.23, for a total dividend of $1.13 for 2022, compared to $0.97 for the previous year.
For 2023, our board of directors has set the regular dividend rate at $0.90 per annum.
Our regular and special dividends for the past five years are as follows:
Year
2018
2019
2020
2021
2022
2023
Regular
dividend
$0.90
$0.90
$0.90
$0.90
$0.90
$0.90
Special
dividend
$0.04
$0.06
$0.02
$0.07
$0.23
to be determined
Total dividends
paid
$0.94
$0.96
$0.92
$0.97
$1.131
Earnings per
share (basic)
$0.95
$0.97
$0.93
$0.98
$1.08
1)
The difference between dividends paid and earnings per share is largely due to a timing difference created by
an impairment and provision for accounting that is excluded from the calculation of taxable income.
We had $860.4 million of mortgages receivable as at December 31, 2022, an increase of 13.3%
from December 31, 2021. During the year, $517.6 million of mortgage principal was advanced
and $429.8 million was repaid. The portfolio has a weighted average remaining term of 10.9
months.
Our focus continues to be lending in the major metropolitan areas of Ontario and British
Columbia.
Revenues of $78.4
million,
increase of 22.0%
over prior year
Earnings per share
$1.08 basic and $1.06
diluted
Strong, high quality
mortgage portfolio
92.5%
first mortgages
97.1%
less than 75%
loan-to-value
Mortgages receivable
$860.4 million, up
13.3% from prior year
We focus on
first mortgages
with high liquidity
and low
loan-to-value
ratios
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 7
Investment portfolio
Our mortgage portfolio consisted of 260 mortgage loans and aggregated $866.3 million at December 31, 2022, an
increase of 12.9% from December 31, 2021.
Property Type
(outstanding amounts in 000s)
High-rise residential1
Mid-rise residential1
Low-rise residential1
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
As at December 31, 2022
As at December 31, 2021
Outstanding % of
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
34.7%
26.0%
14.8%
12.5%
0.3%
88.3%
11.7%
100.0%
18
34
15
101
13
181
16
197
20
30
14
158
12
234
26
260
$ 300,989
225,281
128,244
108,124
2,189
764,827
101,435
866,262
5,418
(94)
(506)
(10,706)
$ 860,374
30.6%
33.0%
16.0%
9.3%
0.2%
89.1%
10.9%
100.0%
$ 234,847
253,507
122,569
70,944
1,752
683,619
83,512
767,131
3,098
(135)
(430)
(10,439)
$ 759,225
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.
A summary of our mortgages by loan type is presented below.
Loan type
(outstanding amounts in 000s)
Term loans
Construction loans
As at December 31, 2022
As at December 31, 2021
Outstanding % of
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
252
8
260
$ 809,722
56,540
$ 866,262
93.5%
6.5%
100.0%
189
8
197
$ 695,374
71,757
$ 767,131
90.7%
9.3%
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 +
As at December 31, 2022
As at December 31, 2021
Outstanding % of
Outstanding % of
Number
amount
Portfolio Number
amount
Portfolio
182
26
19
7
26
260
$ 121,213
101,884
118,391
58,103
466,671
$ 866,262
14.0%
11.8%
13.6%
6.7%
53.9%
100.0%
124
27
19
3
24
197
80,031
$
109,831
115,401
26,215
435,653
$ 767,131
10.5%
14.3%
15.0%
3.4%
56.8%
100.0%
As of December 31, 2022, the average outstanding mortgage balance was $3.3 million (December 31, 2021 – $3.9
million), and the median outstanding mortgage balance was $0.8 million (December 31, 2021 – $0.8 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.
As at December 31, 2022, 75.4% of our portfolio was priced at floating rates, the majority with rate floors, up from
60.0% at December 31, 2021.
8 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
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
As at December 31, 2022
Number of
mortgages
Outstanding
amount
Percentage
outstanding
Weighted
average
loan to value
Weighted
average
interest rate
169
61
28
2
260
$ 598,207
38,950
220,727
8,378
$ 866,262
69.0%
4.5%
25.5%
1.0%
100.0%
59.7%
68.7%
56.4%
71.2%
59.4%
11.04%
8.25%
10.41%
12.55%
10.77%
As at December 31, 2021
Number of
mortgages
Outstanding Percentage
outstanding
amount
Weighted
average
loan to value
Weighted
average
interest rate
126
44
25
2
197
$ 472,851
33,361
253,771
7,148
$ 767,131
61.6%
4.4%
33.1%
0.9%
100.0%
62.3%
67.4%
56.7%
94.4%
60.9%
8.34%
7.65%
8.17%
8.90%
8.26%
We have an exceptionally high proportion of our portfolio invested in first mortgages (92.5%), which is one of our
core strategies.
As at December 31, 2022, the weighted average loan-to-value ratio in our mortgage portfolio was 59.4%, with
97.1% of the portfolio below 75% loan-to-value (At December 31, 2021, the weighted average loan-to-value ratio in
our mortgage portfolio was 60.9%, with 99.3% 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
Type of mortgage
(outstanding amounts in 000s)
First mortgages
Conventional
Non-Conventional
Other
Second and third mortgages
Conventional
Non-conventional
As at December 31, 2022
Number of Outstanding
amount
mortgages
Weighted
Percentage average
outstanding interest rate
229
8
12
249
10
1
11
260
$ 780,133
18,956
2,189
801,278
57,624
7,360
64,984
$ 866,262
90.1%
2.1%
0.3%
92.5%
10.74%
10.49%
7.48%
10.72%
6.7%
0.8%
7.5%
100.0%
11.61%
9.50%
11.37%
10.77%
As at December 31, 2021
Number of
mortgages
Outstanding
amount
Weighted
Percentage average
outstanding interest rate
169
1
13
183
14
−
14
197
$ 694,055
5,713
1,752
701,520
65,611
−
65,611
$ 767,131
90.5%
0.7%
0.2%
91.4%
8.6%
−%
8.6%
100.0%
8.16%
9.00%
7.25%
8.17%
9.26%
−%
9.26%
8.26%
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 9
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, 2022 is 10.9 months (December
31, 2021 – 12.0 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, 2022, the weighted average loan-to-
value ratio of the mortgage portfolio was considerably lower than that, at 59.4%, compared to 60.9% at December 31,
2021.
A typical loan in our portfolio has an interest rate of 6.99% to 12.99% per annum, a one or two-year term and
monthly interest-only mortgage payments. Pricing on new loans during the fourth quarter typically range between
8.99% to 12.99%.
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, 2022 was $44.8 million (December 31, 2021 – $40.8 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 45% 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%.
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) $4,000,000 or more requires approval of the board; (ii) between $2,000,000
and $4,000,000 requires approval of three members of the board, including at least two independent
directors; and (iii) $2,000,000 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 (i) for changes to the loan that
do not exceed the approved amount by more than the greater of (a) $200,000 or (b) 2% of the previously
approved loan amount; or (ii) for minor technical amendments that do not change other underwriting
considerations, provided in all cases that 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.
10 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
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, 2022, which is available at www.sedar.com.
Recent Developments
Atrium ended the year with a gross mortgage portfolio of $866.3 million at December, 31, 2022 which was the highest
balance in the company’s history. This represented an increase of $99.1 million or 12.9% over the prior year despite
challenging market conditions that manifested in the latter half of the year. The gross mortgage portfolio grew $9.4
million over the fourth quarter due to $63.1 million of new originations and $56.3 million of repayments. The
slowdown in the residential, commercial and multi-family residential real estate markets put downward pressure on
origination volumes in the fourth quarter. Current market conditions also reduced turnover in the portfolio due to
fewer refinancing options for borrowers as big banks became more restrictive. Real estate markets overall remained
plagued with uncertainties around interest rates, inflation and an impending economic slowdown resulting in less
capital deployment into new development projects.
The weighted average interest rate on the mortgage portfolio was a record 10.77% at December 31, 2022. The
weighted average interest rate increased from 10.04% at the end of the third quarter and 8.26% over the prior year.
These increases were largely driven by interest rate increases instituted by the Bank of Canada which totaled 400bps
over the course of the year, including 100bps over the fourth quarter. The portfolio was also successfully repositioned
towards floating rates given the changing interest rate environment. 75.4% of the portfolio was priced at floating rates
at December 31, 2022 versus 60.0% in the prior year with the majority of loans having rate floors in place. The
business remains increasingly well positioned to benefit from higher interest rates on a go forward basis, including
the most recent Bank of Canada rate increase of 25bps announced on January 25, 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 11
Stage 2 loans remained relatively low at 3.0% of the gross mortgage portfolio at December 31, 2022. This represented
a modest increase over the previous quarter but was down significantly from the prior year. $26.0 million of mortgages
were classified as stage 2 at year end compared to $7.4 million at September 30, 2022 and $45.0 million at December
31, 2021. One impaired loan was sold and closed in April 2022 and although we incurred a loss, it was considerably
less than previously estimated. Overall, credit quality of the portfolio remained strong at year end with a high
proportion of first mortgages (92.5%), no impaired or Stage 3 loans, and a low portfolio LTV of 59.4% which is down
from 60.9% in the prior year. Our primary focus is centered on protecting our capital through disciplined underwriting
and proactive portfolio management. Management continues to focus on high quality properties, developers, and
geographies as opposed to moving up the risk curve to chase higher yields.
The weighted average rate on our debt facility was 6.25% in the fourth quarter and 4.57% for the year compared to
2.86% in the prior year. These increases were again driven by interest rate increases enacted by the Bank of Canada
but the impact on the business was mitigated by the fact that our prime-based credit facility represented only 26.2%
of our sources of capital at year end. During the fourth quarter, we amended our credit facility by adding another major
Canadian Financial Institution to our syndicate and exercised the accordion option to increase the maximum available
facility to $315 million. The company has the right to increase the credit facility by up to an additional $35 million
(such that the total maximum availability would be up to $350 million). Our lending syndicate now includes three of
the top six banks in Canada. During the first quarter of 2022, we also issued a new series of 5.10% convertible
debentures maturing March 31, 2029 for gross proceeds of $40.25 million, including the exercise in full of the
overallotment option. The fixed rate on the debentures has proven to be accretive in a rising interest rate environment.
The provision for mortgages losses was $1.2 million in the fourth quarter which increased the allowance for mortgage
losses to $10.7 million or 1.24% of the gross mortgage portfolio versus 1.11% in the previous quarter. This allowance
is entirely for Stage 1 and 2 loans as there were no Stage 3 or impaired loans at year end. The increase of the allowance
over the previous quarter was largely due to an increase in Stage 2 loans which were identified as experiencing a
material increase in credit risk. Overall allowance levels, however, are mainly driven by weak macroeconomic factors
as evidenced by declines in real estate values, persistent inflation, elevated interest rates, and a potential recession on
the horizon. Steep declines in market activity and real estate prices from the peak in the first quarter combined with
higher cap rates in commercial markets signal heightened credit risk for all lenders including Atrium. Management
believes that real estate markets will contain an elevated level of risk until economic uncertainties subside.
Overall, 2022 was a strong year for Atrium in terms of portfolio growth and record earnings. It was also a year of stark
change as real estate market conditions started strong out of the gate but progressively weakened due to rapid interest
rate increases and inflationary pressures. The mid-to-long term demand fundamentals that support growth in
residential real estate markets have not changed. Housing shortages and demographic trends will provide strong
momentum once economic uncertainties subside. The commercial markets outside of the office sector remain
fundamentally solid as well but have come under valuation pressure due to higher interest rate levels. Management
remains focused on positioning the business to navigate through current headwinds that will likely persist for the
coming quarters. The business remains focused on mitigating risk through disciplined underwriting standards that are
aligned to the current market environment and active portfolio management. The focus will remain on low LTVs and
lending in major urban centers in Ontario and BC where liquidity is high and our market knowledge and relationships
are deepest. The business has capacity to grow but will do so in a very prudent manner should the right risk-reward
opportunities arise.
12 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • 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 held for sale
Recovery of prior mortgage losses
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
$
$
Year Year Year
ended
ended
ended
December 31
December 31
December 31
2020
2021
2022
65,019
64,235
78,371
(7,036)
(7,241)
(8,526)
(1,410)
(1,382)
(1,098)
−
−
(1,832)
−
−
1,050
(3,760)
(1,289)
(1,914)
52,813
54,323
66,051
(13,625)
(12,530)
(19,719)
39,188
41,793
46,332
$
$
$
$
$
$
$
1.08
1.06
48,736
$ 860,374
$ 874,780
$ 475,564
$
$
$
0.98
0.98
41,346
$ 759,225
$ 775,487
$ 470,167
$
$
$
0.93
0.93
38,970
$ 739,025
$ 755,315
$ 462,887
Summary of quarterly results (unaudited)
Revenue
Mortgage servicing and management fees
Other expenses
Impairment of investment property held for sale
Recover of prior mortgage losses
Recovery of (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
Q4 2022
$ 23,159
(2,131)
(270)
−
50
(1,230)
19,578
(6,345)
$ 13,233
$ 0.31
$ 0.30
$ 19,707
Q3 2022
$ 20,634
(2,056)
(292)
−
−
(1,114)
17,172
(5,346)
$ 11,826
$ 0.27
$ 0.27
$ 9,706
Q2 2022
$ 18,201
(2,461)
(212)
−
200
(583)
15,145
(4,470)
$ 10,675
$ 0.25
$ 0.25
$ 9,675
Q1 2022
$ 16,377
(1,878)
(324)
(1,832)
800
1,013
14,156
(3,558)
$ 10,598
$ 0.25
$ 0.25
$ 9,648
Q4 2021
$ 15,767
(1,778)
(249)
−
−
(20)
13,720
(2,981)
$ 10,739
$ 0.25
$ 0.25
$ 12,620
Q3 2021
$ 15,870
(1,792)
(283)
−
−
(400)
13,395
(2,840)
$ 10,555
$ 0.25
$ 0.25
$ 9,601
Q2 2021
$ 16,147
(1,775)
(388)
−
−
−
13,984
(3,359)
$ 10,625
$ 0.25
$ 0.25
$ 9,575
Q1 2021
$ 16,451
(1,896)
(462)
−
−
(869)
13,224
(3,350)
$ 9,874
$ 0.23
$ 0.23
$ 9,550
Results of operations – Three months ended December 31, 2022
For the three months ended December 31, 2022, mortgage interest and fees revenues aggregated $22,961, compared
to $15,650 in the comparative period, an increase of 46.7%. Virtually all our revenues are mortgage interest; therefore,
the increase in revenue is due to a higher weighted average interest rate in the current quarter and a higher mortgage
portfolio balance this quarter compared to the fourth quarter of 2021. The higher weighted average interest rate was
driven by higher benchmark market rates compared to the prior year. A variety of other factors can 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, the timing of
changes in the prime rate of interest, the timing and 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 10.77% at December 31,
2022, compared with 8.26% at December 31, 2021. We generated a net rental income of $198 for the three months
ended December 31, 2022 from our investment properties compared to net rental income of $117 for the three months
ended December 31, 2021 as a result of an improvement in the vacancy rate in the current quarter.
Operating expenses, excluding the provision for mortgage losses, impairment of investment properties held for sale
and recovery of prior mortgage losses for the three months ended December 31, 2022 were $2,401, compared to
$2,027 in the comparative period, an increase of 18.5%. This increase is primarily due to an increase in mortgage
servicing and management fees and increase in professional fees and is partially offset by the adjustment to fair value
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 13
of unit-based compensation. Mortgage servicing and management fees paid (that is, the management fee plus HST)
aggregated $2,131 for the three months ended December 31, 2022, compared with $1,778 in the comparative period.
This increase was due to an increase in the mortgage portfolio balance in the current quarter as well as timing variations
in mortgage fundings between the quarters, as mortgage servicing fees are calculated and paid monthly based on the
mortgage portfolio balance outstanding during the month. Other expenses include a fair value adjustment on deferred
share units of ($22) compared to a fair value adjustment of ($19) in the comparative quarter due to fluctuations in the
share price between the quarters. The recovery of prior mortgage losses was ($50) in the quarter compared to $nil in
the comparative period. The provision for mortgage losses was $1,230 in the quarter, for a total allowance of $10,706
at December 31, 2022 compared to a provision of $20 in the comparative period and a total allowance of $10,439 at
December 31, 2021.
Financing costs for the three months ended December 31, 2022 were $6,345, compared to $2,981 in the same
period of 2021, an increase of 112.8%. Coupon rate interest on convertible debentures was $2,156 for the three months
ended December 31, 2022 compared to $1,363 for the comparative period. This increase was a result of more
convertible debentures being outstanding in the current period. The book value of convertible debentures as at
December 31, 2022 was $155,964, compared to $117,609 as at December 31, 2021. Accretion and other costs were
$413 for the three months ended December 31, 2022 compared to $225 for the comparative period. Interest expense
on the credit facility was $3,612 for the three months ended December 31, 2022, up from $1,302 for the comparative
period. This increase is due to a higher balance drawn on the credit facility during the current quarter and a higher
weighted average cost of borrowing in the fourth quarter of 2022 (6.25%) compared to the fourth quarter of 2021
(2.89%) as a result of increases in the prime rate and banker’s acceptance rates between the periods.
Net income and comprehensive income for the three months ended December 31, 2022 was $13,233, an increase
of 23.2% from net income and comprehensive income of $10,739 for the same period in the prior year. Basic and
diluted earnings per common share were $0.31 and $0.30, respectively, for the three months ended December 31,
2022, compared with $0.25 basic and diluted earnings per share for the comparable period in the comparative period.
During the three months ended December 31, 2022, we funded mortgages receivable aggregating $70,966. Of those
advances, $69,827 were first mortgages, representing 98.4% of the total loans funded. British Columbia advances
were $20,223, advances of $38 were on properties in Alberta, $7,795 were non-GTA Ontario and the remaining
$42,910 were for mortgages on properties located in the Greater Toronto Area. There were $61,559 of repayments
during the period.
Results of operations – Year ended December 31, 2022
For the year ended December 31, 2022, mortgage interest and fees revenues aggregated $77,863, compared to $63,536
in the prior year, an increase of 22.5%. Virtually all our revenues are mortgage interest; therefore, the increase in
revenue is due to a higher weighted average interest rate in the current period and a higher mortgage portfolio balance
this period compared to the prior year. The higher weighted average interest rate was driven by higher benchmark
market rates compared to the prior year. A variety of other factors can 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, the timing of changes in the prime rate of
interest, the timing and 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 10.77% at December 31, 2022, compared
with 8.26% at December 31, 2021. We generated net rental income of $508 for the year ended December 31, 2022
from our investment properties compared to net rental income of $699 for the year ended December 31, 2021. This
decrease in rental revenue was primarily a result of repairs made to one of the properties in the second quarter of 2022.
Operating expenses, excluding the provision for mortgage losses, impairment of investment properties held for sale
and recovery from prior mortgage losses for the year ended December 31, 2022 were $9,624, compared to $8,623 in
the prior year, an increase of 11.6%. This increase is primarily due to the increase in mortgage servicing and
management fees and is partially offset by the adjustment to fair value of unit-based compensation and the decrease
in administration and general expenses. Mortgage servicing and management fees paid (that is, the management fee
plus HST) aggregated $8,526 for the year ended December 31, 2022, compared with $7,241 in the comparative year.
This increase was due to an increase in the mortgage portfolio balance in the current year as well as timing variations
in mortgage fundings between the periods, as mortgage servicing fees are calculated and paid monthly based on the
mortgage portfolio balance outstanding during the month. Other expenses include a fair value adjustment on deferred
share units of ($160) compared to a fair value adjustment of $32 in the prior year due to fluctuations in the share price
during the quarters. Administration and general costs for the year were $142 compared to $278 in the prior year as a
result of costs incurred in the comparative year to settle a contract dispute. As a result of the economic conditions in
Saskatchewan affecting vacancy and rental rates and other market information, the company estimated that the
14 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
carrying value of the Regina property exceeded its recoverable amount at March 31, 2022, resulting in an impairment
of investment properties held for sale of $1,832. The recovery of prior mortgage losses was ($1,050) in the year
compared to $nil in the comparative period. The provision for mortgage losses was $1,914 in the year, for a total
allowance of $10,706 at December 31, 2022 compared to a provision of $1,289 in the comparative year for a total
allowance of $10,439 at December 31, 2021. The property securing the Stage 3 mortgage that was outstanding at the
prior year end was sold in the current year. The agreed upon sales price was higher than the estimate used in the
expected credit loss model at December 31, 2021 which contributed to the reversal of a portion of the allowance on
this mortgage. Additionally, we negotiated a settlement with guarantors to recover a portion of a losses incurred on
two loans that were impaired in prior years. To date, a total of $1,050 has been received under these settlements.
Financing costs for the year ended December 31, 2022 were $19,719, compared to $12,530 in the prior year, an
increase of 57.4%. Coupon rate interest on convertible debentures was $8,174 for the year ended December 31, 2022
compared to $6,103 for the prior year. This increase was a result of more convertible debentures being outstanding in
the current year. Accretion and other costs were $1,547 for the year ended December 31, 2022 compared to $1,070
for the comparative year. Interest expense on the credit facility was $9,463 for the year ended December 31, 2022, up
from $5,012 for the comparative year. This increase is due to a higher balance drawn on the credit facility during the
current period and a higher weighted average cost of borrowing in the year ended December 31, 2022 (4.57%)
compared to the year ended December 31, 2021 (2.86%) as a result of increases in the prime rate and banker’s
acceptance rates between the periods.
Net income and comprehensive income for the year ended December 31, 2022 was $46,332, an increase of 10.9%
from net income and comprehensive income of $41,793 in the prior year. Basic and diluted earnings per common
share were $1.08 and $1.06, respectively, for the year ended December 31, 2022, compared with $0.98 basic and
diluted earnings per share for the previous year.
During the year ended December 31, 2022, we funded mortgages receivable aggregating $545,814. Of those
advances, $465,888 were first mortgages, representing 85.4% of the total loans funded. British Columbia advances
were $94,933, advances of $7,030 were on properties in Alberta, $29,454 were non-GTA Ontario and the remaining
$414,397 were for mortgages on properties located in the Greater Toronto Area. There were $445,036 of repayments
during the year.
Liquidity and capital resources
At December 31, 2022, we had borrowings under the credit facility (excluding unamortized and prepaid financing
costs) of $223,959. The credit facility, currently authorized for up to $315,000 (December 31, 2021 – $240,000), is
provided by a syndicate of five major chartered banks, drawn through a combination of bankers’ acceptances and bank
loans to minimize our borrowing costs. On May 10, 2022, the company entered into an amendment to its existing
credit facility in order to, among other things, extend the maturity date, increase the accordion option from $30,000 to
$60,000 and reduce the applicable margin rates. On June 22, 2022, the company entered into an amendment to the
existing credit facility and exercised the accordion option, increasing the credit facility by $50,000 (such that the total
maximum availability is $290,000). At any time during the term of the credit facility, the company had the right to
increase the credit facility by up to $60,000 (such that the total maximum availability would be up to $350,000). On
November 4, 2022, the company entered into another amendment to its existing credit facility in order to add another
Canadian financial institution to its lending syndicate and to exercise the accordion option, increasing the facility by
$25,000 such that the total maximum is $315,000. At any time during the term of the credit facility, the company has
the right to increase the credit facility by up to an additional $35,000 (such that the total maximum availability would
be up to $350,000).
At December 31, 2022, we had five series of convertible debentures outstanding, with a total book value of
$155,964, and a face value (and maturity value) of $163,300. 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, 2022,
total debt was 45.6% of total assets (December 31, 2021 – 39.4%). Our policy and our banking arrangements both
require that total debt not exceed 50.0% of total assets.
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 15
Changes in financial position
Cash used in investing activities during the year ended December 31, 2022 consisted of principal repayments received
of $429,790, less advances of principal on mortgage loan investments of $517,601 for net cash advances of mortgage
loan investments of $87,811.
Borrowings under our operating credit facility (excluding unamortized and prepaid financing costs) increased to
$223,959 at December 31, 2022, from $178,404 at December 31, 2021, due to the increase in our mortgage portfolio.
Accounts payable and accrued liabilities, including accrued convertible debenture interest, were $7,041 at
December 31, 2022 compared to $3,574 at December 31, 2021. Dividends payable were $13,217 at December 31,
2022, up from $6,206 at December 31, 2021 as the December 31, 2022 balance included the special dividend for 2022
that will paid on February 28, 2023 of $0.23 per share compared to $0.07 per share in 2021.
Share capital increased to $471,882 at December 31, 2022 from $465,491 at December 31, 2021, primarily due to
the issuance of common shares under the dividend reinvestment plan.
Contractual obligations
Contractual obligations due at December 31, 2022 were as follows:
As at December 31, 2022
Borrowings under credit facility
Accounts payable and accrued liabilities
Accrued convertible debenture interest
Dividends payable
Convertible debentures
Total contractual obligations
Total
obligation
Within 1
year
1 to 3
years
3 to 5
years
$236,644
6,125
916
13,217
197,808
$454,710
$ 10,599 $226,045
–
–
–
102,584
$ 39,484 $328,629
6,125
916
13,217
8,627
$ –
–
–
–
7,556
$ 7,556
More
than
5 years
$ –
–
–
–
79,041
$ 79,041
We have commitments to advance additional funds under existing mortgages of $76,625 and for new mortgages of
$1,693 at December 31, 2022 (December 31, 2021 – $100,592, $6,598, 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, 2022, we had $12,158 (December 31, 2021 – $8,182) 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, 2022 was $25,000 (December 31, 2021 – $25,000). 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.
$3,551 of cash was received, and is recorded in accounts payable and accrued liabilities for letters of credit on
mortgages that are discharged (December 31, 2021 – $601).
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 $7,977 (including HST) for the year ended December 31, 2022 (year ended
December 31, 2021 – $7,241). 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.
During the year ended December 31, 2022 CMCC reimbursed the company for share-based payments of $42 related
to grants under the company’s DSIP (year ended December 31, 2021 – $nil).
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
16 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
participants’ contributions. The total amount matched by CMCC for the year ended December 31, 2022 was $64 (year
ended December 31, 2021 – $64).
Certain of the company’s mortgages receivable are shared with other investors. As at December 31, 2022,
companies owned by a director and or officer of the company were co-invested in one syndicated mortgage receivable
of $22,000, of which the company’s share was $21,000 and $19,750 had been funded (December 31, 2021 – the
company was not co-invested in any syndicated mortgage receivables with companies owned by a director and or
officer of the company).
As at December 31, 2022, the company had two mortgages receivable (December 31, 2021 – four) from borrowers
over which a director and or officer of the company has joint control, with the company’s share of the gross
commitments totaling $9,200 (December 31, 2021 – $23,190), of which $8,350 had been funded at December 31,
2022 (December 31, 2021 – $19,342). During the year ended December 31, 2022, the company recognized net
mortgage interest and fees of $1,428 (year ended December 31, 2021 –$808) from four (December 31, 2021 – four)
mortgage receivables from borrowers over which a director and or officer of the company has joint control.
Critical accounting estimates and policies
Our consolidated financial statements for the year ended December 31, 2022 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.
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;
(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;
(e) the measurement of fair value less costs to sell of the investment property held for sale; and
(f) the measurement of fair value of the purchased or originated credit-impaired financial assets reflecting the
lifetime expected credit losses.
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.
Economic uncertainties that began from the onset of the COVID-19 pandemic continue to persist. This has resulted
in a challenge of reliably estimating the impact on financial results and condition of the company in future periods.
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 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 and investment property held for sale. Management continues to monitor and
assess the impacts of these economic uncertainties on its estimates, judgements and assumptions.
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 SPPI.
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 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
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 17
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 an overlay
adjustment to account for the uncertainty and difficulty in forecasting future economic conditions which continue to
persist.
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
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, 2022.
Revenue recognition
Mortgage interest and fees revenues are recognized in the statement of income and comprehensive income using the
effective interest method, except mortgage interest and fees revenue on purchased or originated credit-impaired
financial assets. 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.
Mortgage interest and fees revenue on purchased or originated credit-impaired financial assets is recognized in the
consolidated statements of income and comprehensive income using the credit-adjusted effective interest rate,
reflecting the expected credit losses, to the financial asset from initial recognition.
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.
18 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
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. Most of the standards are not expected to have a material impact to the company
but one standard that is applicable and currently being evaluated is summarized below.
Amendment to IAS 1 and IFRS Practice Statement 2
In February 2021, the International Accounting Standards Board issued narrow-scope amendments to IAS 1,
Presentation of Financial Statements, IFRS Practice Statement 2, Making Materiality Judgements, and IAS 8,
Accounting Policies, Changes in Accounting Estimates and Errors. The amendments require the disclosure of material
accounting policy information rather than disclosing significant accounting policies, and clarify how to distinguish
changes in accounting policies from changes in accounting estimates. The amendments are effective for annual periods
beginning on or after January 1, 2023, although earlier application was permitted. We are currently assessing the
impacts of the amended standards but do not expect a significant impact to our financial disclosures.
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, 2022. 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.
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 43,335,995 were issued and
outstanding at December 31, 2022, and 43,423,743 were issued and outstanding as at the date hereof. In addition, as
at the date hereof, 1,693,440, 2,211,540, 1,949,152, 1,971,430 and 2,402,986 common shares are issuable upon
conversion or redemption or in respect of repayment at maturity of the outstanding 5.30%, 5.50%, 5.60%, 5.00% and
the 5.10% convertible debentures, using the conversion price of $14.94, $15.60, $14.75, $17.50 and $16.75
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.
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 19
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 debt or equity financing 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, 2022 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
31, 2022 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, 2022.
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.
20 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • MANAGEMENT’S DISCUSSION AND ANALYSIS
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, 2022,
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) 867-1053, or by email at info@atriummic.com.
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(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)
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CANADA’S PREMIER NON-BANK LENDER™
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
To the shareholders of
Atrium Mortgage Investment Corporation:
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 14, 2023
“Robert Goodall”
Robert Goodall
President and Chief Executive Officer
“John Ahmad”
John Ahmad
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, 2022
and December 31, 2021, 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, 2022 and December 31, 2021, 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 statements 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.
The ECL model was modified to include a post-model overlay to adjust for the uncertainty of future economic
conditions. 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 ECL 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 management'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 and investment property held
for sale.
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 Group's 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.
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
February 14, 2023
CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 29
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of Canadian dollars)
Notes
2022
2021
December 31
Assets
Mortgages receivable
Investment properties
Investment property held for sale
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
Retained earnings (deficit)
Total shareholders’ equity
Total liabilities and shareholders’ equity
5
6
6
7
8, 12
9
10
$ 860,374
14,302
–
104
$ 874,780
$ 222,994
6,125
916
13,217
155,964
399,216
471,882
712
3,786
1,588
(2,404)
475,564
$ 874,780
$ 759,225
1,101
15,033
128
$ 775,487
$ 177,931
3,020
554
6,206
117,609
305,320
465,491
866
2,222
1,588
–
470,167
$ 775,487
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
30 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • 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, 2020
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
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, 2021
Shares issued under dividend reinvestment plan
Shares issued under employee share purchase plan
Shares issued under deferred share incentive plan
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, 2022
Notes
10
10
11
9
9
11
9
9
10
10
11
11
9
9
42,411,853
337,337
13,519
12,567
31,738
–
–
–
–
–
–
42,807,014
470,927
16,440
41,614
–
–
–
–
–
43,335,995
Deferred
share
incentive
plan units
716
$
–
–
(160)
–
–
310
–
$
Equity
component
of convertible
debentures
1,470
–
–
–
(6)
(505)
–
1,327
Amount
460,065
$
4,606
191
160
469
–
–
–
–
–
–
465,491
5,666
193
532
–
–
–
–
–
471,882
$
$
–
–
–
866
–
–
(532)
378
–
–
–
–
712
$
$
(64)
–
–
2,222
–
–
–
–
1,640
(76)
–
–
3,786
$
$
Contributed
surplus
Retained
earnings
(deficit)
$
$
$
1,083
–
–
–
–
505
–
–
–
–
–
1,588
–
–
–
–
–
–
–
–
1,588
$
$
$
(447)
–
–
–
–
–
–
–
–
41,793
(41,346)
–
–
–
–
–
–
–
46,332
(48,736)
(2,404)
$
Total
shareholders’
equity
462,887
4,606
191
–
463
–
310
1,327
(64)
41,793
(41,346)
470,167
5,666
193
–
378
1,640
(76)
46,332
(48,736)
475,564
$
$
Dividends amounted to $1.13 per share for the year ended December 31, 2022 (year ended December 31, 2021 – $0.97).
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 31
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands of Canadian dollars, except for per share amounts)
Years ended December 31
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
Adjustment to fair value of deferred share units
Impairment of investment property held for sale
Recovery of prior mortgage loss
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
Notes
2022
8
6
8
8, 11
8, 12
8, 12
6
5(b)
9
7, 12
$
77,863
508
78,371
8,526
292
336
233
255
142
(160)
1,832
(1,050)
1,914
12,320
66,051
9,721
9,998
19,719
$
2021
63,536
699
64,235
7,241
334
310
180
248
278
32
–
–
1,289
9,912
54,323
7,173
5,357
12,530
Net income and comprehensive income for the year
$
46,332
$ 41,793
Earnings per common share
Basic
Diluted
13
13
$
$
1.08
1.06
$
$
0.98
0.98
The accompanying notes are an integral part of these consolidated financial statements.
32 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • 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
Adjustment to fair value of deferred share units
Impairment of investment property held for sale
Provision for mortgage losses
Recovery of prior mortgage loss
Changes in operating assets and liabilities
Prepaid expenses
Accounts payable and accrued liabilities
Additions to unamortized origination fees
Cash provided by operating activities
Investing activities
Cash advances of mortgages receivable
Cash repayments of mortgages receivable
Recovery of acquisition costs in investment properties
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
Repayment of convertible debentures
Issuance of convertible debentures
Convertible debenture issue costs
Cash dividends paid
Cash provided by (used in) financing activities
Increase in cash
Cash, beginning of year
Cash, end of year
Years ended December 31
2022
2021
$
46,332
$
41,793
378
(77,863)
62,858
9,721
9,998
(160)
1,832
1,914
(1,050)
24
3,283
803
58,070
(517,601)
429,790
–
(87,811)
569,855
(524,300)
(7,829)
(10,508)
193
–
40,250
(1,861)
(36,059)
29,741
–
–
–
$
310
(63,536)
74,563
7,173
5,357
32
–
1,289
–
(39)
372
571
67,885
(469,999)
436,911
67
(33,021)
783,415
(765,450)
(6,518)
(4,991)
191
(39,785)
34,500
(1,663)
(34,563)
(34,864)
–
–
–
$
The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 33
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.C, AI.DB.D, AI.DB.E, AI.DB.F and AI.DB.G.
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 14, 2023.
(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;
(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;
34 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – BASIS OF PRESENTATION (continued)
(e) Use of estimates and judgements (continued)
(e) the measurement of fair value less costs to sell of the investment property held for sale; and
(f) the measurement of fair value of the purchased or originated credit-impaired financial assets
reflecting the lifetime expected credit losses.
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.
Economic uncertainties that began from the onset of the COVID-19 pandemic continue to persist. This
has resulted in a challenge of reliably estimating the impact on financial results and condition of the company
in future periods. 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 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.
Management continues to monitor and assess the impacts of these economic uncertainties on its estimates,
judgements and assumptions.
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 • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 35
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.
Purchased or originated credit-impaired financial assets are initially recognized at fair value and are
subsequently carried at amortized cost using the credit-adjusted effective interest rate.
(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:
36 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • 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 • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 37
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 an overlay
adjustment to account for the uncertainty and difficulty in forecasting future economic conditions which
continue to persist. 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.
Purchased or originated credit-impaired financial assets are identified as credit-impaired at the time of
origination based on specific characteristics of the asset, including financial difficulty of the borrower or
issuer, borrower credit history or a past due event. Originated credit-impaired financial assets are accounted
for based on the present value of expected cash flows as opposed to their contractual cash flows. Any changes
in expected cash flows over the life of the originated credit-impaired financial asset are recognized in net
income and comprehensive income.
(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, except mortgage interest and fees revenue on
purchased or originated credit-impaired financial assets. 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.
Mortgage interest and fees revenues on purchased or originated credit-impaired financial assets is
recognized in the consolidated statements of income and comprehensive income using the credit-adjusted
effective interest rate, reflecting the expected credit losses, to the amortized cost of the financial assets from
initial recognition.
(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.
38 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • 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 International Accounting Standard (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) Investment properties held for sale
Investment properties held for sale are properties that are available immediately for sale with the intention to
sell the property within one year. Such properties are accounted for under IFRS 5 Non-current Assets Held for
Sale and Discontinued Operations. A property is transferred from investment properties to investment
properties held for sale when a plan to sell the property is initiated, the property is actively marketed for sale
and management believes a sale is highly probable. Management measures investment properties held for sale
at the lower of its carrying amount and fair value less costs to sell.
(h) 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.
(i) 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.
(j) 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 plan.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 39
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)
(k) 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 price of the company’s common shares on
the TSX for the five trading days prior to the date of the grant.
(l) 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. Most of the standards are not expected to have a material
impact to the company but one standard that is applicable and currently being evaluated is summarized below.
In February 2021, the IASB issued narrow-scope amendments to IAS 1, Presentation of Financial Statements,
IFRS Practice Statement 2, Making Materiality Judgements, and IAS 8, Accounting Policies, Changes in
Accounting Estimates and Errors. The amendments require the disclosure of material accounting policy
information rather than disclosing significant accounting policies, and clarify how to distinguish changes in
accounting policies from changes in accounting estimates. The amendments are effective for annual periods
beginning on or after January 1, 2023, although earlier application was permitted. We are currently assessing
the impacts of the amended standards but do not expect a significant impact to our financial disclosures.
40 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – MORTGAGES RECEIVABLE
(a) Mortgage portfolio
As at December 31, 2022
As at December 31, 2021
Outstanding % of
Outstanding % of
Number
20
30
14
158
12
234
26
260
Property type
High-rise residential
Mid-rise residential
Low-rise residential
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
$
$
300,989
225,281
128,244
108,124
2,189
764,827
101,435
866,262
5,418
(94)
(506)
(10,706)
860,374
34.7%
26.0%
14.8%
12.5%
0.3%
88.3%
11.7%
100.0%
18 $
34
15
101
13
181
16
197
$
234,847
253,507
122,569
70,944
1,752
683,619
83,512
767,131
3,098
(135)
(430)
(10,439)
759,225
Portfolio
30.6%
33.0%
16.0%
9.3%
0.2%
89.1%
10.9%
100.0%
The mortgage portfolio has maturity dates between 2023 and 2032 with a weighted average remaining term
of 10.9 months at December 31, 2022 (December 31, 2021 – 12.0 months). The portfolio has a weighted
average interest rate (which excludes lender fees earned by the company) of 10.77% as at December 31, 2022
(8.26% as at December 31, 2021).
Within the mortgage portfolio, at December 31, 2022, there were 38 mortgages receivable aggregating to
$231,318 (26.7% of the mortgage portfolio) in which the company has a subordinate position in a syndicated
mortgage receivable (December 31, 2021 – 27 mortgages receivable aggregating $170,832; 22.3% 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, 2022.
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, 2023
2024
2025
2026
2027
Thereafter
$ 552,620
202,430
72,466
37,306
–
1,440
$ 866,262
63.8%
23.4%
8.4%
4.3%
0.0%
0.1%
100.0%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 41
NOTE 5 – MORTGAGES RECEIVABLE (continued)
(b) Allowance for mortgage losses
The gross carrying amounts of mortgages receivable and the allowance for mortgage losses by property type
are as follows:
As at December 31, 2022
Gross carrying amount
High-rise residential
Mid-rise residential
Low-rise residential
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
Allowance for mortgage losses
High-rise residential
Mid-rise residential
Low-rise residential
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
As at December 31, 2021
Gross carrying amount
High-rise residential
Mid-rise residential
Low-rise residential
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
Allowance for mortgage losses
High-rise residential
Mid-rise residential
Low-rise residential
House and apartment
Condominium corporation
Commercial
Mortgage portfolio
Stage 1
$ 300,989
225,281
104,578
105,798
2,189
101,435
$ 840,270
Stage 2 Stage 3
– $
$
–
23,666
2,326
–
–
Total
– $ 300,989
225,281
–
128,244
–
108,124
–
2,189
–
–
101,435
− $ 866,262
$ 25,992 $
$
$
3,454
2,597
1,335
786
7
788
8,967
$
$
– $
–
1,734
5
–
–
1,739 $
3,454
– $
2,597
–
3,069
–
791
–
7
–
788
–
− $ 10,706
Stage 1
$ 234,847
216,259
110,709
69,379
1,752
83,512
$ 716,458
Stage 2 Stage 3
– $
$
Total
– $ 234,847
253,507
–
122,569
5,713
70,944
–
1,752
–
83,512
–
5,713 $ 767,131
37,248
6,147
1,565
–
–
$ 44,960 $
$
$
2,124
2,564
1,574
499
7
690
7,458
$
$
– $
151
25
2
–
–
178 $
– $
–
2,803
–
–
–
2,124
2,715
4,402
501
7
690
2,803 $ 10,439
The allowance for mortgage losses at December 31, 2022 is $10,706 (December 31, 2021 – $10,439). Of this
allowance, $8,967 (December 31, 2021 – $7,458) 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 Stage 2 and 3 and management estimated the ECL as $1,739 for mortgages
receivable classified as Stage 2 and $nil for Stage 3 at December 31 2022 (December 31, 2021 – $178 and
$2,803, respectively).
42 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – MORTGAGES RECEIVABLE (continued)
(b) Allowance for mortgage losses (continued)
The changes in the allowance for mortgage losses are shown in the following table:
Year ended December 31, 2022
Stage 1
$ 7,458
Stage 2
$
Stage 3
Total
2,803 $ 10,439
178 $
Opening balance, January 1, 2022
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
Write-off
Balance, December 31, 2022
(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 macro-economic conditions, and changes in measurement following a transfer between stages. It also includes overlay
adjustments as a result of economic uncertainties.
–
–
–
1,544
2,210
(1,840)
(1,647)
− $ 10,706
2
(84)
–
1,072
2,210
(1,691)
−
$ 8,967
(2)
84
–
1,628
–
(149)
−
$ 1,739 $
(1,647)
(1,156)
–
–
–
–
–
During the year ended December 31, 2022, the allowance for mortgage losses for mortgages classified as
Stage 1 increased due to an increase in the mortgage portfolio balance as well as changes in assumptions in
the expected credit loss model and overlay adjustment due to economic uncertainties. The allowance for
mortgage losses classified as Stage 2 increased due to a higher ECL assessment of the individual loans at year
end compared to the prior year. The allowance for mortgage losses classified as Stage 3 decreased due to the
partial repayment and write-off of a loan classified as Stage 3. The ECL is assessed individually for Stage 2
and Stage 3 mortgages receivable.
Generally, the company continues to seek recovery on amounts that were written off during the reporting
period, unless the company no longer has the right to collect or has exhausted all reasonable collection efforts.
During the second quarter of 2022, the company wrote off $1,647 on one loan previously provided for and
included in the Stage 3 allowance for mortgage losses. The company negotiated a settlement agreement with
the borrower and guarantors on this loan that provides for a recovery over time of the amount written off. This
settlement agreement has been accounted for as an originated credit-impaired financial asset.
Year ended December 31, 2021
Stage 1
$ 7,005
Stage 2
$
Stage 3
Total
9,150
211 $
1,934 $
Opening balance, January 1, 2021
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, 2021
(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 macro-economic 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.
–
–
–
1,254
1,895
(1,860)
2,803 $ 10,439
22
(28)
–
374
1,895
(1,810)
$ 7,458
(22)
28
–
11
–
(50)
178 $
–
–
–
869
–
–
$
During the year ended December 31, 2021, the allowance for mortgage losses for mortgages classified as
Stage 1 increased as a result of an increase in the mortgage portfolio balance, changes in assumptions in the
expected credit loss model and a post-model adjustment made as a result of the continued economic
uncertainty of the worldwide COVID-19 pandemic. The allowance for mortgage losses classified as Stage 2
decreased due to a decrease in the balances of loans in this stage and changes in assumptions in the expected
credit loss model. The allowance for mortgage losses classified as Stage 3 increased due to changes in
assumptions in the expected credit loss model. The ECL is assessed individually for Stage 2 and Stage 3
mortgages receivable.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 43
NOTE 6 – INVESTMENT PROPERTIES AND INVESTMENT PROPERTY HELD FOR SALE
Years ended December 31
2022
Investment
property
2021
Investment
property
Investment held for
properties sale
Total
Investment held for
properties sale
Beginning of year
Gross carrying amount
$ 15,033
–
Impairment
–
–
Balance, beginning of year
15,033
–
Recovery of acquisition costs
–
–
Impairment
(1,832)
–
Reclassification1
(13,201)
15,033
$ 15,033
–
$
Balance, end of year
(1) Reclassification included cumulative impairment of $2,638 at December 31, 2022 and $806 at December 31, 2021.
$ 17,007
(806)
16,201
(67)
–
(15,033)
$ 1,101
$ 16,134
–
16,134
–
(1,832)
–
$ 14,302
$ 1,101
–
1,101
–
–
13,201
$ 14,302
$
Total
$ 17,007
(806)
16,201
(67)
–
–
$ 16,134
Investment properties consist of a four unit property in Leduc, Alberta and a 90 unit property in Regina,
Saskatchewan. During the year ended December 31, 2022, the company made the decision to delist the 90 unit
property in Regina, Saskatchewan from the sales market due to a higher than usual vacancy rate at the
beginning of the period and to allow for the completion of maintenance work on the property. After
considering the above and other real estate transactions under negotiation in Regina, Saskatchewan at that
time, as well as, the economic conditions in Saskatchewan, the company estimated that the carrying value of
the Regina, Saskatchewan property exceeded its recoverable amount by $1,832, an impairment was
recognized, and the Regina, Saskatchewan property was reclassified as investment property at its carrying
value of $13,201. 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.
Investment property held for sale at December 31, 2021 consisted of one residential 90 unit rental property in
Regina, Saskatchewan. This property was classified as held for sale at that time after the company listed it for
sale on July 5, 2021 and a realtor began actively marketing it in a manner typical for properties of this nature.
As at December 31, 2022, the property is not being actively marketed for sale and the property is classified as
an investment property.
Rental income
Revenue
Property operating costs
Rental income
Years ended December 31
2021
2022
$
$
1,181
(673)
508
$
$
1,078
(379)
699
44 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – CREDIT FACILITY
At December 31, 2022, the company had a credit facility from a syndicate of five Canadian financial
institutions of $315,000 (December 31, 2021 – $240,000) at a formula rate that varies with bank prime and
the market bankers’ acceptance rate. On May 10, 2022, the company entered into an amendment to its existing
credit facility in order to, among other things, extend the maturity date, increase the accordion option from
$30,000 to $60,000 and reduce the applicable margin rates. On June 22, 2022, the company entered into an
amendment to the existing credit facility and exercised the accordion option, increasing the credit facility by
$50,000 (such that the total maximum availability is $290,000). At any time during the term of the credit
facility, the company had the right to increase the credit facility by up to $60,000 (such that the total maximum
availability would be up to $350,000). On November 4, 2022, the company entered into another amendment
to its existing credit facility in order to add another Canadian financial institution to its lending syndicate and
to exercise the accordion option, increasing the facility by $25,000 such that the total maximum is $315,000.
At any time during the term of the credit facility, the company has the right to increase the credit facility by
up to an additional $35,000 (such that the total maximum availability would be up to $350,000). Drawings
under the credit facility may be by way of a bank loan (including an overdraft facility of up to $5,000
(December 31, 2021 – $5,000)), 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 March 11, 2024, 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. At December 31, 2022, the maximum balance
available to be drawn on the credit facility was $315,000 (December 31, 2021 – $240,000). 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, 2022 and December 31, 2021, the company was in compliance with these
covenants.
The annualized weighted average interest rate for the year ended December 31, 2022 was 4.57% (2.86%
for the year ended December 31, 2021).
As at December 31
Credit facility
Bankers’ acceptances
Bank loan
Overdraft facility
Unamortized and prepaid financing costs
2021
$ 121,000
53,600
3,804
(473)
177,931
8,182
$ 186,113
(1) $3,551 of cash was received, and is recorded in accounts payable and accrued liabilities, for letters of credit on mortgages that are
2022
$ 210,000
11,000
2,959
(965)
222,994
12,158
$ 235,152
Borrowings under credit facility
Total credit facility utilization
Letters of credit(1)
discharged (December 31, 2021 – $601).
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, 2022 is interest on
the credit facility of $9,463 (December 31, 2021 – $5,012) and bank fees and amortization of financing costs
of $491 (December 31, 2021 – $320).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 45
NOTE 8 – RELATED PARTY TRANSACTIONS
The company pays mortgage servicing and management 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. During the
year ended December 31, 2022 the company incurred mortgage servicing and management fees of $7,977
(year ended December 31, 2021 – $7,241). 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 $717 (December 31, 2021
– $631) 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.
During the year December 31, 2022, CMCC reimbursed the company for share-based payments (see Note
11 – Share-based payments).
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, 2022 was
$64 (year ended December 31, 2021 – $64).
Certain of the company’s mortgages receivable are shared with other investors. As at December 31, 2022,
companies owned by a director and or officer of the company were co-invested in one syndicated mortgage
receivable of $22,000, of which the company’s share was $21,000, of which $19,750 had been funded
(December 31, 2021 – the company was not co-invested in any syndicated mortgage receivables with
companies owned by a director and or officer of the company).
As at December 31, 2022, the company had two mortgages receivable (December 31, 2021 – four) from
borrowers over which a director and or officer of the company has joint control, with the company’s share of
the gross commitments totaling $9,200 (December 31, 2021 – $23,190), of which $8,350 had been funded at
December 31, 2022 (December 31, 2021 – $19,342). During the year ended December 31 2022, the company
recognized net mortgage interest and fees of $1,428 (year ended December 31, 2021 – $808) from four
(December 31, 2021 – four) mortgages receivable from borrowers over which a director and or officer of the
company has joint control.
Key management includes directors and officers of the company. Compensation expenses for key
management personnel include:
Years ended December 31
2022
2021
Directors’ fees (1) (Note 12)
Share-based payments to directors (Note 11)
Share-based payments to officers (Note 11)
249
112
71
432
(1) The cumulative adjustment for the fair value of deferred share units issued under the deferred share unit plan was $(83) as at
255
128
92
475
$
$
$
$
December 31, 2022 (year ended December 31, 2021 – $76) (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.
46 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – CONVERTIBLE DEBENTURES
Year ended December 31, 2022
Issued and outstanding face value
Book value –
Convertible debentures,
beginning of year
Issued
Equity component
Issue costs
Issue costs attributed to
equity component
Accretion for the year
Convertible debentures,
end of year
5.10%
AI.DB.G
$ 40,250
5.00%
AI.DB.F
$ 34,500
Convertible debenture
5.60%
AI.DB.E AI.DB.D.A
$ 28,750
$ 34,500
6.5.50%5% .5.30%
AI.DB.C
$ 25,300
Total
$ 163,300
$
–
40,250
(1,640)
(1,861)
$ 31,608
–
–
–
$ 27,827
–
–
–
$ 33,416
–
–
–
$ 24,758
–
–
–
$ 117,609
40,250
(1,640)
(1,861)
76
369
–
398
–
281
–
267
–
215
76
1,530
$ 37,194
$ 32,006
$ 28,108
$ 33,683
$ 24,973
$ 155,964
On March 18, 2022, the company completed a public offering of 5.10% convertible debentures for gross
proceeds of $35,000. On March 23, 2022, the company received gross proceeds of $5,250 from the exercise
in full of the over-allotment option on the 5.10% convertible debentures.
Year ended December 31, 2021
Issued and outstanding 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,
end of year
5.00%
AI.DB.F
$ 34,500
5.60%
AI.DB.E
$ 28,750
Convertible debenture
5.50%
AI.DB.D AI.DB.C.A
$ 34,500
$ 25,300
6.5.30%5%
.5.50%
AI.DB.B
–
$
Total
$ 123,050
$
–
–
34,500
(1,327)
(1,663)
$ 27,549
–
–
–
–
$ 33,151
–
–
–
–
$ 24,545
–
–
–
–
$ 39,982
(463)
–
–
–
$ 125,227
(463)
34,500
(1,327)
(1,663)
64
–
34
–
–
278
–
–
265
–
–
64
–
213
(39,785)
266
(39,785)
1,056
$ 31,608
$ 27,827
$ 33,416
$ 24,758
$
–
$ 117,609
On June 30, 2021, the company redeemed early all of the outstanding 5.50% 2021 convertible debentures for
cash. The redemption totalled an aggregate principal amount of $39,785 plus all accrued and unpaid interest.
On November 30, 2021, the company completed a public offering of 5.00% convertible debentures for
gross proceeds of $30,000. On December 6, 2021, the company received gross proceeds of $4,500 from the
exercise in full of the over-allotment option on the 5.00% convertible debentures.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 47
NOTE 9 – CONVERTIBLE DEBENTURES (continued)
Maturity date
Initial term
5.10%
AI.DB.G
March 31, 2029
7 years
5.00%
5.60%
AI.DB.F AI.DB.E
Dec. 31, 2028 March 31, 2025
6 years
Convertible debenture
5.50%
AI.DB.D
Dec. 31, 2025
7 years
7 years
5.30%
AI.DB.C
June 30, 2024
7 years
5.50%
AI.DB.B
Sept. 30, 2021
7 years
Conversion at option of shareholder at:
Interest payments date:
$16.75/share
March 31,
Sept. 30
$17.50/share
June 30,
Dec. 31
$14.75/share
March 31,
Sept. 30
$15.60/share
June 30,
Dec. 31
$14.94/share
June 30,
Dec. 31
$14.65/share
March 31,
Sept. 30
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 conversion
price from:
to:
Redeemable at the company’s option at
par plus accrued interest and unpaid interest
after:
March 31, 2025
March 31, 2027
Dec. 31, 2024 March 31, 2022
Dec. 31, 2026 March 31, 2024
Dec, 31, 2021
Dec. 31, 2023
June 30, 2020
June 30, 2022
Sept. 30, 2017
Sept. 30, 2019
March 31, 2027
Dec. 31, 2026 March 31, 2024
Dec. 31, 2023
June 30, 2022
Sept. 30, 2019
Interest costs related to the convertible debentures are recorded in financing costs using the effective
interest method and consist 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
2022
$
$
8,174
1,547
9,721
2021
6,103
1,070
7,173
$
$
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.
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, 2022, 470,927
common shares were issued under the company’s DRIP (year ended December 31, 2021 – 337,337), using
reinvested dividends of $5,666 (year ended December 31, 2021 – $4,606). 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. On January 14, 2021, the company announced the reinstatement of its dividend
reinvestment plan commencing with the dividend payable on February 12, 2021.
On June 16, 2022, 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 3,000,000 common shares during the twelve month period
commencing June 24, 2022 and ending on June 23, 2023. The company did not purchase any common shares
under the NCIB from the period June 24, 2022 to December 31, 2022.
Under the 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.
48 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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, 2022 ($13.31), August 11, 2022 ($11.92), and September 2, 2021
($14.49).
Balance, beginning of year
Units granted
Units earned
Units cancelled
Common shares issued
Balance, end of year
Share-based payments expense:
Years ended December 31
DSIP
units
82,983
41,000
–
(567)
(35,850)
87,566
2022
IDSIP
units
13,636
–
2,496
–
(5,764)
10,368
DSIP
units
72,400
23,350
–
(200)
(12,567)
82,983
2021
IDSIP
units
11,343
–
2,293
–
–
13,636
Total
83,743
23,350
2,293
(200)
(12,567)
96,619
Total
96,619
41,000
2,496
(567)
(41,614)
97,934
Years ended December 31
2022
2021
$
September 1, 2022 grant
August 11, 2022 grant(1)
September 2, 2021 grant
September 1, 2020 grant
September 3, 2019 grant
September 1, 2018 grant
September 1, 2016 grant
September 1, 2015 grant
September 1, 2014 grant
August 30, 2013 grant
–
–
69
120
67
22
9
10
9
4
310
(1) During the year ended December 31, 2022, CMCC reimbursed the company for share-based expenses of $42 related to grants under
64
–
165
53
22
–
8
10
10
4
336
$
$
$
the company’s DSIP (year ended December 31, 2021 – $nil).
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 value of the common shares on the last day of the quarter. The fair 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 value on the dividend payment date.
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 value of the company’s common shares on or about the date of the payment.
Amounts owed in relation to this plan of $642 (December 31, 2021 – $539) 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 49
NOTE 12 – DEFERRED SHARE UNIT PLAN (continued)
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
2022
219
44
(159)
104
$
$
2021
215
25
32
272
$
$
Years ended December 31
2022
38,080
18,663
3,615
60,358
2021
21,072
15,186
1,822
38,080
Years ended December 31
2022
2021
$
46,332
$
41,793
43,057,886
1.08
$
42,596,713
0.98
$
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
$
46,332
9,721
56,053
43,057,886
9,717,324
83,022
12,949
52,871,181
1.06
$
$
41,793
7,173
48,966
42,596,713
7,379,272
76,342
12,541
50,064,868
0.98
$
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.
50 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • 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 due to the fact that the majority of the
mortgages receivable have floating interest rates. 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 approximate 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 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 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
2022
$ 144,982
(3,786)
$ 141,196
2021
$ 125,173
(2,222)
$ 122,951
Book value of financial liability component
$ 155,964
$ 117,609
(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, 2022 is $873,132 (December 31, 2021 – $767,972).
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, 2022.
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) –
Mortgage portfolio and to the “Investment Portfolio” section of the Management’s Discussion and Analysis
for the year ended December 31, 2022. Management continuously monitors real estate values to ensure that
the quality of the collateral underlying the remaining mortgage portfolio remains adequate.
At December 31, 2022, the largest borrower group accounted for 5.74% of mortgages receivable
(December 31, 2021 – 7.0%). See Note 5(a) – Mortgage portfolio and Note 5(b) – Allowance for mortgage
losses for a breakdown of mortgages receivable and the allowance for mortgage losses by property type.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2022 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 51
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(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, fund loan activity, 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.
As at December 31, 2022, management considers that it has adequate procedures in place to manage
liquidity risk.
As at December 31, 2022
Borrowings under credit facility(1)
Accounts payable and accrued
liabilities
Accrued convertible debenture
interest
Dividends payable
Convertible debentures(2)
Total
Unadvanced mortgage
commitments(3)
Total contractual liabilities
Carrying
value
$223,959
Contractual
cash flow
$236,644
Within 1
year
1 to 3
years
$ 10,599 $226,045
3 to 5
years
$ –
More than
5 years
$ –
6,125
6,125
6,125
–
–
916
13,217
155,964
400,181
–
$400,181
916
13,217
182,836
439,738
916
13,217
67,086
97,943
–
–
36,709
262,754
–
–
79,041
79,041
78,318
–
$518,056 $176,261 $262,754
78,318
–
$79,041
–
$ –
–
–
–
–
–
Notes:
(1) Includes interest assuming the outstanding balance is not repaid until maturity on March 11, 2024.
(2) The 5.30% debentures are assumed but not required to be repaid in the first quarter of 2023; 5.50% debentures are assumed but not required to be
repaid December 31, 2023; 5.60% debentures are assumed but not required to be repaid March 31, 2024; 5.00% debentures are assumed to be repaid
December 31, 2026; and the 5.10% debentures are assumed but not required to be repaid March 31, 2027.
(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.
(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 floating rates. The financial structure of the company results in relatively
moderate interest rate risk because the 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,
2022, income and comprehensive income would have been reduced (increased) by approximately $2,055
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) $2,055.
52 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2022 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(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
As at December 31
2022
$ 222,994
155,964
378,958
475,564
$ 854,522
2021
$ 177,931
117,609
295,540
470,167
$ 765,707
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. 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 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 12, 2023, the company issued 45,101 common shares ($474) to shareholders under its dividend
reinvestment plan.
On February 10, 2023, the company issued 42,647 common shares ($478) to shareholders under its dividend
reinvestment plan.
Corporate Directory
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