2024
Report to
Shareholders
December 31, 2024
Safety | Consistency | Yield
Atrium lends in major urban centres and where the stability
and liquidity of real estate is high. As a mortgage lender, we
fill the lending gap that results from the limited number of
financial institutions operating in Canada. 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 property
located in Canada, and must all be in strict compliance with
our investment policies.
Atrium has a 23-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.
About Atrium Mortgage Investment Corporation
1 Earnings Press Release
5 Management's Discussion and Analysis
21 Consolidated Financial Statements
51 Corporate Directory
TABLE
OF CONTENTS
Since commencing operations in 2001, our investment
objectives have been to preserve our shareholders' equity
and provide our shareholders with stable and secure
dividends from our investments in mortgage loans within the
criteria permitted 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.
We were listed on the Toronto Stock Exchange in 2012. Our
regular dividend is paid monthly, currently at a rate of
$0.0775 per share per month. Our dividends since 2020
are as follows:
Regular Dividend
$0.90
$0.90
$0.90
$0.90
$0.90
$0.93
Year
2020
2021
2022
2023
2024
Special Dividend
$0.02
$0.07
$0.23
$0.29
$0.16
To be
determined
Total Dividends Paid
$0.92
$0.97
$1.13
$1.19
$1.06
Earnings Per Share
(basic)
$0.93
$0.98
$1.08
$1.18
$1.06
2025
1
FOR IMMEDIATE RELEASE
ATRIUM MORTGAGE INVESTMENT CORPORATION
ANNOUNCES A STRONG FINISH TO A VERY SUCCESSFUL YEAR
AND $0.16 SPECIAL DIVIDEND FOR 2024
TORONTO: March 6, 2025 – Atrium Mortgage Investment Corporation (TSX: AI, AI.DB.D, AI.DB.E,
AI.DB.F, AI.DB.G) today released its financial results for the year ended December 31, 2024.
Highlights
Annual basic and diluted earnings per share of $1.06 and $1.05, respectively, compared to
$1.18 and $1.14 basic and diluted earnings per share, respectively in 2023
Annual net income of $47.9 million, compared to $51.5 million in the prior year
$0.16 per share special dividend to shareholders of record on December 31, 2024 to be paid
on March 19, 2025
High quality mortgage portfolio
o 96.7% of portfolio in first mortgages
o 95.7% of portfolio is less than 75% loan-to-value
o average loan-to-value is 61.9%
“Atrium’s results for calendar 2024 were very strong. Our earnings per share of $1.06 was the third best
result in our history as a public company. This performance has produced a sizeable special dividend of
$0.16 which is above the five-year average of $0.13. I am very proud that the last three years have been the
best three years since Atrium went public in 2012. Some of the credit for our results has been due to higher
interest rates, but we also underwrote more conservatively than other non-bank lenders and therefore had
fewer problem loans. For example, our Stage 2 & 3 loans decreased dramatically to $79 million in Q4 from
$129.7 million in Q3. Over 2024, we shifted loan origination towards lower risk sectors to protect
shareholder capital throughout this economic downturn and our mortgage portfolio ended the year with a
low loan-to-value of 61.9%. We believe that there may be less competition from non-bank lenders in 2025
so we also took steps to increase our funding capacity to support future growth. The maximum amount on
our credit facility was increased by $25 million to $340 million by adding Royal Bank to the lending
syndicate. We also completed an oversubscribed bought deal equity offering in Q4 that raised gross
proceeds of $28.8 million. Given our superior financial performance, we were pleased to cap off the year
with an increase in the monthly dividend from an annualized rate of $0.90 to $0.93 beginning in December.
We are well positioned in 2025 to navigate an unpredictable year caused by weak real estate market
conditions and tariffs imposed by the United States on Canadian goods” said Rob Goodall, CEO of Atrium.
Conference call
Interested parties are invited to participate in a conference call with management on Friday, March 7, 2025
at 9:00 a.m. ET to discuss the results. To participate or listen to the conference call live, please call 1-833-
491-0507 (call topic: Fourth quarter results). For a replay of the conference call (available until March 21,
2025) please call 1-833-607-0619, passcode 4174703#.
2
Results of operations
For the year ended December 31, 2024, Atrium reported assets of $864.3 million, down from $877.9 million
at the end of 2023. Revenues were $97.3 million, a decrease of 1.3% from the prior year. Net income for
2024 was $47.9 million, a decrease of 7.1% from the prior year. Atrium’s allowance for mortgage losses at
December 31, 2024 totaled $29.6 million or 3.33% of the gross mortgage portfolio. Basic and diluted
earnings per common share were $1.06 and $1.05, respectively, for the year ended December 31, 2024,
compared with $1.18 and $1.14 basic and diluted earnings per common share in the prior year, a decrease
of 10.2% (basic). Basic and diluted earnings per common share were $0.27 and $0.26, respectively, for the
fourth quarter compared to $0.27 and $0.26 basic and diluted in the comparative quarter.
The board of directors declared a special dividend of $0.16 for 2024, resulting in a total dividend of $1.0625
per common share paid to shareholders for the year, compared to $1.19 for the prior year. Mortgages
receivable as at December 31, 2024 was $863.2 million, down from $876.7 million as at December 31,
2023. This was due to mortgage interest and principal repayments exceeding advances and a higher
allowance for mortgage losses. During the year ended December 31, 2024, $352.2 million of mortgage
principal was advanced and $327.3 million was repaid. The weighted average interest rate on the mortgage
portfolio at December 31, 2024 was 9.98%, compared to 11.42% at December 31, 2023.
Financial summary
Consolidated Statements of Income and Comprehensive Income
(000s, except per share amounts)
Year
Year
Year
ended
ended
ended
December 31
December 31
December 31
2024
2023
2022
Revenue
$
97,263
$
98,574
$
78,371
Mortgage servicing and management fees
(8,558)
(8,465)
(8,526)
Other expenses
(1,301)
(1,299)
(1,098)
Impairment loss on investment property held for sale
−
−
(1,832)
Recovery of prior mortgage losses
268
492
1,050
Provision for mortgage losses
(13,839)
(11,894)
(1,914)
Income before financing costs
73,833
77,408
66,051
Financing costs
(25,981)
(25,923)
(19,719)
Net income and comprehensive income
$
47,852
$
51,485
$
46,332
Basic earnings per share
$
1.06
$
1.18
$
1.08
Diluted earnings per share
$
1.05
$
1.14
$
1.06
Dividends declared
$
48,171
$
52,095
$
48,736
Mortgages receivable, end of year
$
863,169
$
876,733
$
860,374
Total assets, end of year
$
864,304
$
877,877
$
874,780
Shareholders’ equity, end of year
$
516,980
$
482,206
$
475,564
Book value per share, end of year
$ 10.96 $ 10.97 $
10.97
3
Analysis of mortgage portfolio
As at December 31, 2024
As at December 31, 2023
Outstanding
% of
Outstanding
% of
Property Type
Number
amount
Portfolio
Number
amount
Portfolio
(outstanding amounts in 000s)
High-rise residential
17
$
247,202
27.9%
22
$
323,340
36.2%
Mid-rise residential
20
139,738
15.8%
25
208,289
23.3%
Low-rise residential
12
152,827
17.2%
14
153,561
17.2%
House and apartment
219
154,713
17.5%
153
117,943
13.2%
Condominium corporation
6
1,279
0.1%
10
1,786
0.2%
Residential portfolio
274
695,759
78.5%
224
804,919
90.1%
Commercial
24
190,939
21.5%
19
88,640
9.9%
Mortgage portfolio
298
$
886,698
100.0%
243
$
893,559
100.0%
As at December 31, 2024
Weighted
Weighted
Number of
Outstanding
Percentage
average
average
Location of underlying property mortgages
amount
outstanding
loan-to-value
interest rate
(outstanding amounts in 000s)
Greater Toronto Area
211
$
791,809
89.3%
60.6%
9.96%
Non-GTA Ontario
73
40,816
4.6%
69.6%
9.15%
British Columbia
14
54,073
6.1%
75.0%
10.96%
298
$
886,698
100.0%
61.9%
9.98%
As at December 31, 2023
Weighted
Weighted
Number of
Outstanding
Percentage
average
average
Location of underlying property mortgages
amount
outstanding
loan-to-value
interest rate
(outstanding amounts in 000s)
Greater Toronto Area
166
$
653,401
73.1%
61.4%
11.63%
Non-GTA Ontario
52
40,753
4.6%
64.6%
9.81%
British Columbia
24
191,955
21.5%
60.6%
10.95%
Alberta
1
7,450
0.8%
71.0%
14.00%
243
$
893,559
100.0%
61.4%
11.42%
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, 2024, available on SEDAR+ at www.sedarplus.ca, and on the company’s
website at www.atriummic.com.
Restatement of Comparative Consolidated Statement of Cash Flows
In response to commentary received from an issue oriented review of Atrium Mortgage Investment
Corporation’s continuous disclosure record by the Ontario Securities Commission (the “OSC”),
management determined that cash flows from cash advances of mortgages receivable and cash repayments
of mortgages receivable, previously classified as investing activities, will be reclassified as operating
activities in the consolidated statement of cash flows. In addition, interest and fees on convertible
debentures paid and interest and other financing charges paid, previously classified as financing activities,
will also be reclassified to operating activities on the consolidated statement of cash flows. The consolidated
statement of cash flows for the year ended December 31, 2023 was restated for these reclassifications as
illustrated in the table below, with no change to the cash balance at year end. This adjustment had no impact
on the consolidated statement of financial position, consolidated statement of changes in shareholders’
equity, consolidated statement of income and comprehensive income, earnings per share, or mortgages
receivable.
4
For the year ended December 31, 2023
As previously
reported
Restatement
Restated
Cash provided by operating activities
$
77,316
$
(42,445)
$
34,871
Cash provided by (used in) investing activities
$
(4,635)
$
17,910
$
13,275
Cash used in financing activities
$
(72,681)
$
24,535
$
(48,146)
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.sedarplus.ca or investor information on Atrium’s
website at www.atriummic.com.
For additional information, please contact
Robert G. Goodall
John Ahmad
Chief Executive Officer
Chief Financial Officer
(416) 867-1053
info@atriummic.com
www.atriummic.com
2024
MD&A
Management's
Discussion and Analysis
For the years ended
December 31, 2024 and 2023
6 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis
December 31, 2024
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 23-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 March 6, 2025.
Highlights
Atrium continued to generate strong financial results for shareholders. For the year ended
December 31, 2024, we had revenues of $97.3 million compared to $98.6 million in the prior year,
a decrease of 1.3%. Net income was $47.9 million compared with $51.5 million in the prior year,
a decrease of 7.1%. Basic and diluted earnings per share were $1.06 and $1.05, respectively,
compared with $1.18 basic and $1.14 diluted earnings per share in the prior year, a decrease of
10.2% basic and 7.9% diluted. All the figures from the prior year were the highest ever recorded
by Atrium, and the calendar 2024 figures represent our third best as a public company.
We declared a regular dividend of $0.9025 for the year, compared to $0.90 in the prior year. In
addition, we declared a special dividend of $0.16, for a total dividend of $1.0625 for 2024,
compared to $1.19 for the previous year. For 2025, our board of directors has set the regular
dividend rate at $0.93 per annum.
Our regular and special dividends for the past five years are as follows:
Year
Regular
dividend
Special
dividend
Total dividends
paid
Earnings per
share (basic)
2020
$0.90
$0.02
$0.92
$0.93
2021
$0.90
$0.07
$0.97
$0.98
2022
$0.90
$0.23
$1.131
$1.08
2023
$0.90
$0.29
$1.191
$1.18
2024
$0.9025
$0.16
$1.06251
$1.06
1)
The difference between dividends paid and earnings per share is largely due to a timing difference created by
an impairment and/or provision for accounting that is excluded from the calculation of taxable income.
We had $863.2 million of mortgages receivable as at December 31, 2024, a decrease of 1.6% from
December 31, 2023. This was due to mortgage interest and principal repayments exceeding
advances and a higher allowance for mortgage losses. During the year, $352.2 million of mortgage
principal was advanced and $327.3 million was repaid. The portfolio had a weighted average
remaining term of 8.6 months.
Our focus continues to be lending in the major metropolitan areas of Ontario and British
Columbia.
Fourth quarter net
income of $12.7
million,
increase of 7.0%
from prior year
period
Annual earnings per
share
$1.06 basic and $1.05
diluted
Strong, high quality
mortgage portfolio
96.7%
first mortgages
95.7%
less than 75%
loan-to-value
Mortgages receivable
$863.2 million, down
1.6% from prior year
We focus on
first mortgages
with high liquidity
and low
loan-to-value
ratios
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 7
Investment portfolio
Our mortgage portfolio consisted of 298 mortgage loans and aggregated $886.7 million as at December 31, 2024, a
decrease of 0.8% from December 31, 2023.
As at December 31, 2024
As at December 31, 2023
Outstanding
% of
Outstanding
% of
Property Type
Number
amount
Portfolio Number
amount
Portfolio
(outstanding amounts in 000s)
High-rise residential1
17
$ 247,202
27.9%
22
$ 323,340
36.2%
Mid-rise residential1
20
139,738
15.8%
25
208,289
23.3%
Low-rise residential1
12
152,827
17.2%
14
153,561
17.2%
House and apartment2
219
154,713
17.5%
153
117,943
13.2%
Condominium corporation3
6
1,279
0.1%
10
1,786
0.2%
Residential portfolio
274
695,759
78.5%
224
804,919
90.1%
Commercial 4
24
190,939
21.5%
19
88,640
9.9%
Mortgage portfolio
298
886,698
100.0%
243
893,559
100.0%
Accrued interest receivable
6,321
6,049
Mortgage discount
(47)
(68)
Unamortized origination fees
(247)
(207)
Allowance for mortgage losses
(29,556)
(22,600)
Mortgages receivable
$ 863,169
$ 876,733
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.
As at December 31, 2024
As at December 31, 2023
Outstanding
% of
Outstanding
% of
Loan type
Number
amount
Portfolio Number
amount
Portfolio
(outstanding amounts in 000s)
Term loans
293
$ 838,520
94.6%
237
$ 853,654
95.5%
Construction loans
5
48,178
5.4%
6
39,905
4.5%
298
$ 886,698
100.0%
243
$ 893,559
100.0%
A summary of our mortgages by size is presented below.
As at December 31, 2024
As at December 31, 2023
Outstanding
% of
Outstanding
% of
Mortgage amount
Number
amount
Portfolio Number
amount
Portfolio
(outstanding amounts in 000s)
$0 - $2,500,000
230
$ 148,761
16.8%
169
$ 109,873
12.3%
$2,500,001 - $5,000,000
16
62,356
7.0%
19
72,477
8.1%
$5,000,001 - $7,500,000
18
112,966
12.7%
17
104,924
11.8%
$7,500,001 - $10,000,000
5
44,558
5.0%
8
69,035
7.7%
$10,000,001 +
29
518,057
58.5%
30
537,250
60.1%
298
$ 886,698
100.0%
243
$ 893,559
100.0%
As at December 31, 2024, the average outstanding mortgage balance was $3.0 million (December 31, 2023 – $3.7
million), and the median outstanding mortgage balance was $0.7 million (December 31, 2023 – $0.7 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, 2024, 84.3% of our portfolio was priced at floating rates, the majority with rate floors, down from
89.8% at December 31, 2023.
8 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
As at December 31, 2024
Weighted Weighted
Number of
Outstanding Percentage
average average
Location of underlying property mortgages
amount
outstanding
loan-to-value interest rate
(outstanding amounts in 000s)
Greater Toronto Area
211
$ 791,809
89.3%
60.6%
9.96%
Non-GTA Ontario
73
40,816
4.6%
69.6%
9.15%
British Columbia
14
54,073
6.1% 75.0%
10.96%
298
$ 886,698
100.0%
61.9%
9.98%
As at December 31, 2023
Weighted Weighted
Number of
Outstanding Percentage
average average
Location of underlying property mortgages
amount
outstanding
loan-to-value interest rate
(outstanding amounts in 000s)
Greater Toronto Area
166
$ 653,401
73.1%
61.4%
11.63%
Non-GTA Ontario
52
40,753
4.6%
64.6%
9.81%
British Columbia
24
191,955
21.5%
60.6%
10.95%
Alberta
1
7,450
0.8%
71.0%
14.00%
243
$ 893,559
100.0%
61.4%
11.42%
We have an exceptionally high proportion of our portfolio invested in first mortgages (96.7%), which is one of our
core strategies.
As at December 31, 2024, the weighted average loan-to-value ratio in our mortgage portfolio was 61.9%, with
95.7% of the portfolio below 75% loan-to-value (At December 31, 2023, the weighted average loan-to-value ratio was
61.4%, and 94.0% of the portfolio was below 75% loan-to-value).
As at December 31, 2024
Weighted
Number of Outstanding Percentage average
Type of mortgage
mortgages
amount
outstanding interest rate
(outstanding amounts in 000s)
First mortgages
Conventional
267
$ 817,867
92.2% 9.91%
Non-Conventional
22
38,520
4.3% 10.63%
Other
6
1,279
0.2%
7.51%
295
857,666
96.7% 9.94%
Second and third mortgages
Conventional
3
29,032
3.3% 11.24%
Non-conventional
-
-
- -
3
29,032
3.3% 11.24%
298
$ 886,698
100.0% 9.98%
As at December 31, 2023
Weighted
Number of Outstanding Percentage average
Type of mortgage
mortgages
amount
outstanding interest rate
(outstanding amounts in 000s)
First mortgages
Conventional
209
$ 801,323
89.7% 11.40%
Non-Conventional
16
42,367
4.7% 11.58%
Other
10
1,786
0.2%
7.43%
235
845,476
94.6% 11.40%
Second and third mortgages
Conventional
6
37,008
4.1% 12.11%
Non-conventional
2
11,075
1.3% 10.84%
8
48,083
5.4% 11.81%
243
$ 893,559
100.0% 11.42%
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • 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 have a loan-to-value in excess of 75%.
The weighted average term remaining for our mortgage portfolio at December 31, 2024 is 8.6 months (December
31, 2023 – 9.2 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 centers 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, 2024, the weighted average loan-to-
value ratio of the mortgage portfolio was considerably lower than that, at 61.9%, compared to 61.4% at December 31,
2023.
A typical loan in our portfolio has an interest rate of 8.24% to 13.71% per annum, a one or two-year term and
monthly interest-only mortgage payments. Pricing on new loans during the fourth quarter typically ranged between
8.24% to 11.47%.
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, 2024 was $49.9 million, secured by five properties as part of a master facility (December
31, 2023 – $48.1 million).
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: 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%.
Maintain a debt to total assets ratio of not more than 0.55:1.00.
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.
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.
10 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
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, 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. For larger loan amounts, we generally co-lend with a financial institution or
private lender.
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 Canada Income Tax Act (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, 2024, which is available at www.sedarplus.ca.
Recent Developments
Atrium generated earnings per share (EPS) of $1.06 for fiscal 2024 which includes EPS of $0.27 in the fourth quarter
of 2024. This earnings performance represented the third best year in our company’s history as a public company and
resulted in a sizeable special dividend of $0.16 for the year. Real estate markets remained challenging but the
macroeconomic environment has been stabilizing over the course of the year as interest rates and inflation have been
trending downward. The mortgage portfolio remained relatively stable at $886.7 million at year end compared to
$893.6 million at the beginning of the year despite reaching a record $926.3 million in the third quarter. Despite
challenging market conditions that persisted over the course of the year, principal advances of $352.2 million were
more than offset by principal and interest repayments. The decrease in the mortgage portfolio over the fourth quarter
was largely driven by payouts of higher risk loans in Stages 2 and 3 which helps reinforce a stronger mortgage
portfolio. The company has significantly reduced the percentage of higher risk Stage 2 and 3 loans in the portfolio
from 17.8% at the beginning of the year down to 8.9% at year end. The company was able to source high quality loans
due to reduced market competition from non-bank lenders but the market did see more competitive pressure as the
year progressed. Earnings remained strong over the course of the year despite higher loan loss reserves to prudently
recognize elevated credit risk in the portfolio due to weak market conditions. This consistency in earnings supported
an increase in the annual dividend rate from $0.90 per share to $0.93 beginning in December 2024.
Over the course of the year, Atrium continued to build a strong balance sheet that remains highly capitalized with
shareholder capital representing 59.8% of total funding sources at year end. On June 30, 2024, one convertible
debenture of $25.3 million matured and was repaid in full using the credit facility. Maintaining ample capacity on the
credit facility provides optionality in terms of assessing market conditions for the optimal time to issue long-term debt.
During the second quarter, the company added Royal Bank of Canada as a lender and increased the maximum balance
available on the credit facility by $25,000 to $340,000. The lending syndicate supporting the facility now includes
four of top six financial institutions in the country which reflects the strength of our business model and mortgage
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 11
portfolio. The credit facility also has an accordion feature of $60 million which can increase the maximum availability
to $400 million to provide further funding capacity and liquidity. In October 2024, Atrium also successfully completed
a bought deal offering resulting in the issuance, including the over-allotment option, of 2,512,750 common shares for
gross proceeds of $28.8 million. The proceeds were used to repay existing indebtedness on the credit facility and
provides additional capital that can be leveraged for future growth.
The rate on the mortgage portfolio was 9.98% at year end which was down from 10.52% in the third quarter. The
decrease was largely driven by two 50 bps Bank of Canada rate cuts announced on October 23, 2024 and December
11, 2024 as 84.3% of the mortgage portfolio is priced off floating rates with the majority having rate floors in place.
The business, however, also focused on lower risk profile mortgages over the course of year which are priced at lower
rates. After raising the policy interest rate by a total of 475 bps over 2022 and 2023, the Bank of Canada cut rates five
times over 2024 for a total of 175 bps. The credit facility is priced off prime and the market rate for Term CORRA
loans and has benefited from lower rates. The average cost of borrowing on the credit facility was 6.34% in the fourth
quarter of 2024 which is down from 6.96% in the third quarter and 7.55% in the prior year comparative quarter.
The allowance for mortgage losses was $29.6 million at year end which represented 333 bps of the mortgage portfolio.
This is up from $22.6 million and 253 bps, respectively, from the beginning of the year. These increases were largely
driven by a higher assessment of credit risk relating to specific loans in the mortgage portfolio. Numerous factors
including elevated interest rates, increased construction costs, and higher financial stress on end consumers put
increased pressure on borrowers across the industry. The company, however, made material progress in terms of
resolving loans classified as Stages 2 and 3 as the balance decreased steadily from $158.7 million at the beginning of
the year to $79.0 million at year end. The Stage 1 provision was 0.91% of the mortgage portfolio at year end, a slight
drop from 1.04% at the beginning of the year due to some improvements in macroeconomic indicators that still
incorporate relatively stagnant growth and high unemployment figures.
The primary focus of the business over the year has been to maintain a resilient mortgage portfolio that can withstand
the downturn in the credit cycle. The business was able to generate solid, consistent returns for shareholders over 2024
despite challenging market conditions and maintaining strict risk parameters. In fact, despite weak real estate
conditions over the last couple of years, our highest earnings per share in our history as a public company were
generated in 2022, 2023 and 2024. The deep experience of our management team across all market cycles has helped
maintain our mortgage portfolio in terms of size but more importantly mitigate risk through disciplined underwriting
and the focus on lower risk sectors. The mortgage portfolio ended the year with 96.7% of mortgages in first position
and a low LTV of 61.9%. The portfolio also remained concentrated in the major urban centers of the GTA and GVA
where liquidity is highest. All things being equal, Management remains cautiously optimistic that real estate markets
will gradually improve over the course of 2025 and has positioned the business with the resources and capacity to
capitalize on any growth opportunities that should arise. Tariffs stemming from recent border and trade disputes with
the new US Administration, however, represents a significant risk factor that could prolong the downturn in the real
estate cycle. We plan to remain cautious with disciplined underwriting and excess liquidity to navigate through these
market uncertainties.
Results of Operations
(In this section, dollars are in thousands of Canadian dollars, except per share amounts)
Financial summary
Year Year Year
ended
ended
ended
December 31 December 31 December 31
2024
2023
2022
Revenue
$
97,263
$
98,574
$
78,371
Mortgage servicing and management fees
(8,558)
(8,465)
(8,526)
Other expenses
(1,301)
(1,299)
(1,098)
Impairment loss on investment property held for sale
−
−
(1,832)
Recovery of prior mortgage loss
268
492
1,050
Provision for mortgage losses
(13,839)
(11,894)
(1,914)
Income before financing costs
73,833
77,408
66,051
Financing costs
(25,981)
(25,923)
(19,719)
Net income and comprehensive income
$
47,852
$
51,485
$
46,332
12 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
Year Year Year
ended
ended
ended
December 31 December 31 December 31
2024
2023
2022
Basic earnings per share
$
1.06
$
1.18
$
1.08
Diluted earnings per share
$
1.05
$
1.14
$
1.06
Dividends declared
$
48,171
$
52,095
$
48,736
Mortgages receivable, end of year
$ 863,169
$ 876,733
$ 860,374
Total assets, end of year
$ 864,304
$ 877,877
$ 874,780
Shareholders’ equity, end of year
$ 516,980
$ 482,206
$ 475,564
Book value per share, end of year
$
10.96
$
10.97
$
10.97
Summary of quarterly results (unaudited)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Revenue
$ 22,626
$ 24,514
$ 24,930
$ 25,193
$ 25,907
$ 25,412
$ 23,548
$ 23,707
Mortgage servicing and management fees
(2,144)
(2,168)
(2,170)
(2,076)
(2,206)
(2,153)
(2,052)
(2,054)
Other expenses
(237)
(414)
(244)
(406)
(282)
(241)
(332)
(444)
Recovery of prior mortgage losses
85
−
183
−
115
220
−
157
Provision for mortgage losses
(2,132)
(3,488)
(4,365)
(3,854)
(4,810)
(5,442)
(690)
(952)
Income before financing costs
18,198
18,444
18,334
18,857
18,724
17,796
20,474
20,414
Financing costs
(5,521)
(6,839)
(6,805)
(6,816)
(6,872)
(6,804)
(6,045)
(6,202)
Net income and comprehensive income
$ 12,677
$ 11,605
$ 11,529
$ 12,041
$ 11,852
$ 10,992
$ 14,429
$ 14,212
Basic earnings per share
$ 0.27
$ 0.26
$ 0.26
$ 0.27
$ 0.27
$ 0.25
$ 0.33
$ 0.33
Diluted earnings per share
$ 0.26
$ 0.26
$ 0.26
$ 0.27
$ 0.26
$ 0.25
$ 0.32
$ 0.31
Dividends declared
$ 18,265
$ 10,004
$ 9,971
$ 9,931
$ 22,634
$ 9,854
$ 9,822
$ 9,785
The following is a quarterly summary of the company’s restated consolidated statements of cash flows for the eight
most recently completed quarters:
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Net cash provided by (used in) operating
activities
$ 51,819
$ (7,836) $ 1,048 $ 23,097
$ (469)
$ (34,813) $ 36,885
$ 33,268
Net cash provided by investing activities
$ −
$ −
$ −
$ − $ −
$ 13,275 $ − $ −
Net cash provided by (used in) financing
activities
$ (51,819)
$ 7,836
$ (1,048)
$ (23,097)
$ 469
$ 21,538
$ (36,885) $ (33,268)
Results of operations – Three months ended December 31, 2024
For the three months ended December 31, 2024, mortgage interest and fees revenues aggregated $22,612, compared
to $25,900 in the comparative period, a decrease of 12.7%. Virtually all our revenues are mortgage interest, and the
decrease in revenue is due to a lower weighted average interest rate for the current quarter compared to the fourth
quarter of 2023. The lower weighted average interest rate was driven largely by lower benchmark market rates in the
quarter compared to the prior year quarter as well as the composition of the mortgage portfolio balance. 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 other 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 9.98% as at December 31, 2024, compared with 11.42% as at December 31, 2023.
Operating expenses, excluding the provision for mortgage losses, and recovery of prior mortgage losses for the
three months ended December 31, 2024 were $2,381, compared to $2,488 in the comparative period, a decrease of
4.3%. This decrease is primarily due to lower mortgage servicing and management fees and a higher adjustment to
fair value of deferred share units. Mortgage servicing and management fees paid (that is, the management fee plus
HST) aggregated $2,144 for the three months ended December 31, 2024, compared with $2,206 in the comparative
period. This decrease was due to a decrease 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. The adjustment to the fair value of deferred
share units was ($61) for the three months ended December 31, 2024 compared with ($21) for the comparative quarter
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 13
due to a decrease in the company’s stock price over the quarter which decreased the amount due to directors at quarter
end. The recovery of prior mortgage loss was ($85) in the quarter compared to ($115) in the comparative period. The
provision for mortgage losses was $2,132 in the quarter, for a total allowance of $29,556 as at December 31, 2024
compared to a provision of $4,810 in the comparative period and a total allowance of $22,600 as at December 31,
2023. The decrease in the provision for mortgage losses was due to a lower increase in credit risk in the mortgage
portfolio compared to the prior year comparative quarter.
Financing costs for the three months ended December 31, 2024 were $5,521, compared to $6,872 in the same
period of 2024, a decrease of 19.7%. Coupon rate interest on convertible debentures was $1,821 for the three months
ended December 31, 2024 compared to $2,150 for the comparative period. Accretion and other costs were $366 for
the three months ended December 31, 2024 compared to $413 for the comparative period. The carrying amount of
convertible debentures as at December 31, 2024 was $133,858 compared to $157,610 as at December 31, 2023 due to
the maturity of the 5.30% convertible debenture of $25.3 million on June 30, 2024. Interest expense on the credit
facility was $3,222 for the three months ended December 31, 2024, down from $4,129 in the comparative period. This
decrease is due to a lower credit facility balance in the three months ended December 31, 2024 compared to the prior
period and a lower weighted average cost of borrowing in the fourth quarter of 2024 (6.34%) compared to the fourth
quarter of 2023 (7.55%) due to decreases in market benchmark rates.
Net income and comprehensive income for the three months ended December 31, 2024 was $12,677, an increase
of 7.0% from net income and comprehensive income of $11,852 for the same period in the prior year. Basic and
diluted earnings per common share were $0.27 and $0.26 respectively, for the three months ended December 31, 2024,
compared with $0.27 and $0.26 basic and diluted earnings per share, respectively, for the comparable period.
During the three months ended December 31, 2024, we funded mortgages receivable aggregating $123,757. Of
those advances, $119,757 were first mortgages, representing 96.8% of the total loans funded. British Columbia
advances were $5,572, non-GTA Ontario were $8,452 and the remaining $109,733 were for mortgages on properties
located in the Greater Toronto Area. There were $160,858 of repayments during the period.
Results of operations – Year ended December 31, 2024
For the year ended December 31, 2024, mortgage interest and fees revenues aggregated $97,220, compared to $97,940
in the prior year, a decrease of 0.7%. Virtually all our revenues are mortgage interest and therefore the decrease in
revenue is due to a lower weighted average interest rate partially offset by a higher average mortgage portfolio balance
in the current year compared to the prior year. The lower weighted average interest rate was driven by changes in
benchmark 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 other 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 year, the types of properties
on which mortgage loans are advanced and/or repaid in the year, the location of the underlying properties on which
mortgage loans are advanced and/or repaid, the types of mortgage loans advanced and/or repaid during the year and
whether the mortgage loans advanced and/or repaid during the year are conventional or non-conventional mortgages.
The weighted average interest rate on our mortgage portfolio was 9.98% at December 31, 2024, compared with
11.42% at December 31, 2023. We generated net rental income of $43 for the year December 31, 2024 from our
investment properties compared to net rental income of $634 for the year ended December 31, 2023. The decrease
was a result of the disposition of the 90 unit property in Regina in the third quarter of 2023.
Operating expenses, excluding the provision for mortgage losses, and recovery of prior mortgage losses for the
year ended December 31, 2024 were $9,859, compared to $9,764 in the prior year. This increase is primarily due to
higher mortgage servicing and management fees and adjustment to fair value of deferred share units; partially offset
by lower transfer agent, regulatory fees and investor relations. Mortgage servicing and management fees paid (that is,
the management fee plus HST) aggregated $8,558 for the year ended December 31, 2024, compared with $8,465 in
the prior year. This increase was due to a higher average 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. Adjustment to fair value of deferred
share units for the year ended December 31, 2024 of $45 increased from ($29) in the prior year due to an increase in
the company’s stock price. Transfer agent, regulatory fees and investor relations expense for the year ended December
31, 2024 of $231 compared to $283 in the prior year due to an expenditure for investment research in the prior year
and lower transfer agent and registrar costs in the current year. Recovery of prior mortgage losses for the year ended
December 31, 2024 was ($268) compared to ($492) in the prior year. The provision for mortgage losses was $13,839
in 2024, for a total allowance of $29,556 at December 31, 2024 compared to a provision of $11,894 in the prior year
for a total allowance of $22,600 at December 31, 2023. The increase in the provision was due to a higher assessment
of credit risk in the mortgage portfolio.
Financing costs year ended December 31, 2024 were $25,981, compared to $25,923 in the prior year, an increase
of 0.2%. Coupon rate interest on convertible debentures was $7,955 for the year ended December 31, 2024 compared
14 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
to $8,626 for the prior year. Accretion and other costs were $1,569 for the year ended December 31, 2024 compared
to $1,666 for the prior year. The 5.30% convertible debenture of $25,300 which matured on a non-business day, June
30, 2024, was settled on the first business day in the third quarter using the credit facility. Interest expense on the
credit facility was $15,954 for the year ended December 31, 2024, up from $15,129 for the prior year. This increase
is due to a higher average credit facility balance in the year ended December 31, 2024 compared to the prior year
offset by a lower weighted average cost of borrowing in the year (7.03%) compared to the prior year (7.19%) due to
lower average market benchmark rates.
Net income and comprehensive income for the year ended December 31, 2024 was $47,852, a decrease of 7.1%
from net income and comprehensive income of $51,485 for the prior year. Basic and diluted earnings per common
share were $1.06 and $1.05 respectively, for the year ended December 31, 2024, compared with $1.18 and $1.14
basic and diluted earnings per share in the previous year.
During the year ended December, 2024, we funded mortgages receivable aggregating $375,026. Of those advances,
$362,140 were first mortgages, representing 96.6% of the total loans funded. British Columbia advances were
$30,992, non-GTA advances were $25,297 and the remaining $318,737 were for mortgages on properties located in
the Greater Toronto Area. There were $375,004 of repayments during the year.
Liquidity and capital resources
As at December 31, 2024, we had borrowings under the credit facility (excluding unamortized and prepaid financing
costs) of $193,787. The credit facility, currently authorized for up to $340,000 (December 31, 2023 – $315,000), is
provided by a syndicate of six major chartered banks, drawn through a combination of term CORRA loans and bank
loans to minimize our borrowing costs. At any time during the term of the credit facility, we have the right to increase
the credit facility by up to $60,000 (such that the total maximum availability would be up to $400,000). At December
31, 2024, we had four series of convertible debentures outstanding, with a total carrying amount of $133,858 and a
face value (and maturity value) of $137,933. 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, 2024,
total balance sheet debt was 40.2% of total assets (December 31, 2023 – 45.1%).
Changes in financial position
Cash provided by operating activities during the year ended December 31, 2024 included advances of principal on
mortgage loans of $352,157 less principal repayments received of $327,297, for net cash advances of mortgage loans
of $24,860.
Borrowings under our operating credit facility (excluding unamortized and prepaid financing costs) decreased to
$193,787 at December 31, 2024, from $218,281 at December 31, 2023, due to the issuance of common shares
completed in the fourth quarter, decrease in the mortgage portfolio and repayments of credit facility, partially offset
by the 5.30% convertible debenture which matured in the year.
Accounts payable and accrued liabilities, including accrued convertible debenture interest, was $8,684 at December
31, 2024 compared to $5,025 at December 31, 2023. Dividends payable was $11,202 at December 31, 2024, down
from $16,047 at December 31, 2023 due to a lower special dividend of $0.16 in 2024 compared to $0.29 in 2023.
Share capital increased to $513,811 at December 31, 2024 from $478,903 at December 31, 2023, primarily due to
the issuance of common shares by prospectus and issuance of common shares under the dividend reinvestment plan.
Contractual obligations
Contractual obligations due at December 31, 2024 were as follows:
As at December 31, 2024
Total
obligation
Within 1
year
1 to 3
years
3 to 5
years
More
than
5 years
Borrowings under credit facility
$202,075
$202,075
$ –
$ –
$ –
Accounts payable and accrued liabilities
7,768
7,768
–
–
–
Accrued convertible debenture interest
916
916
–
–
–
Dividends payable
11,202
11,202
–
–
–
Convertible debentures
155,918
69,321
7,556
79,041
–
Total contractual obligations
$377,879
$291,282
$7,556
$ 79,041
$ –
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 15
We have commitments to advance additional funds under existing mortgages of $20,421, and for new mortgages of
$33,750 at December 31, 2024 (December 31, 2023 – $37,239, $1,992 respectively). Generally, outstanding
commitments are expected to be funded within the next 24 months. Our experience, however, has been that a portion
of the unfunded amounts on existing mortgages will never be drawn.
Off-balance sheet arrangements
As at December 31, 2024, we had $5,191 (December 31, 2023 – $12,171) 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, 2024 was $25,000 (December 31, 2023 – $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.
$4,426 of cash was received, and is recorded in accounts payable and accrued liabilities for letters of credit on
mortgages that are discharged (December 31, 2023 – $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 $8,553 for the year ended December 31, 2024 (year ended December 31, 2023 –
$8,379). 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, 2024, CMCC reimbursed the company for share-based payments of $82
related to grants under the company’s DSIP (year ended December 31, 2023 –$113).
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, 2024 was $76 (year
ended December 31, 2023 –$69).
Certain of the company’s mortgages receivable are shared with other investors. As at December 31, 2024,
companies owned by a director and/or officer of the company were co-invested in one syndicated mortgage receivable
of $536, of which the company’s share was $502, of which $502 had been funded (December 31, 2023 – nil syndicated
mortgages receivable of $nil).
During the year ended December 31, 2024, the company recognized net mortgage interest and fees of $nil (year
ended December 31, 2023 – $377) from no borrowers (2023 – two) 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, 2024 are prepared in accordance with Canadian
generally accepted accounting principles (GAAP) and IFRS Accounting Standards as issued by the International
Accounting Standards Board (IASB), as set out in Part I of the CPA Canada Handbook – Accounting. The preparation
of consolidated financial statements in accordance with IFRS Accounting Standards as issued by the IASB 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 property;
16 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
(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; and
(e) 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 have 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, allowance for mortgage losses and valuation of investment property. 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
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. The ECL methodology was modified to include an overlay adjustment to account for
the uncertainty and difficulty in forecasting future economic conditions.
Mortgages receivable are presented on the consolidated statements of financial position net of the allowance for
mortgage losses. A loss on a mortgage is written off against the related allowance for mortgage losses when there is
no reasonable expectation of further recovery, which is the point at which the underlying real property has been
liquidated and claims against guarantors, if any, are unlikely to recover any further losses. For any mortgages
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, 2024.
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.
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 17
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 carrying amount of the debt is accreted up to its face value over the life of the financial liability using the
effective interest method, which provides for the application of a constant interest rate over the term of the debt. The
value of the equity component is not re-measured subsequent to its initial measurement date.
Income taxes
We are, and intend to maintain our status as, a MIC, and as such are not taxed on income provided that it flows through
to our shareholders as dividends during the year or within 90 days after December 31 each year. It is our policy to pay
such dividends to our shareholders to remain non-taxable. Accordingly, no provision for current or future income
taxes is required.
Future changes in accounting policies
Various pronouncements have been issued by the 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. In particular, IFRS
18, Presentation and Disclosure in Financial Statements was issued in April 2024 and applies to an annual reporting
period beginning on or after January 1, 2027. This new standard introduces changes to the structure of the statement
of profit or loss, disclosure requirements around management defined performance measures and introduces enhanced
principles on aggregation and disaggregation which focus on grouping items based on their shared characteristics.
Management is evaluating the impact of the new standard in preparation for its adoption on January 1, 2027. In
addition, the IASB, has issued amendments to the classification and measurement of financial instruments in May
2024 with amendments to IFRS 9 and IFRS 7 Financial Instruments: disclosures, this amendment applies to an annual
reporting period beginning on or after January 1, 2026. Management is evaluating the impact of the amendment
relating to the derecognition of a financial liability and classification of financial assets in preparation for its adoption
on January 1, 2026.
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, 2024. Based on this evaluation, they concluded that the designs of the DC&P and ICFR were effective
18 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • MANAGEMENT’S DISCUSSION AND ANALYSIS
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 47,165,259 were issued and
outstanding at December 31, 2024, and 47,258,818 were issued and outstanding as at the date hereof. In addition, as
at the date hereof, 2,211,540, 1,948,678, 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 5.50%, 5.60%, 5.00% and the 5.10% convertible
debentures, using the conversion price of $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.
Normal course issuer bid
On June 16, 2022, the company announced that the Toronto Stock Exchange (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. On June 13, 2023, the company announced that the TSX had approved
renewal of the NCIB to purchase up to 4,176,336 common shares during the twelve month period commencing June
24, 2023 and ending on June 23, 2024. On June 17, 2024, the company announced that the TSX had approved renewal
of the NCIB to purchase up to 4,232,634 common shares during the twelve month period commencing June 24, 2024
and ending on June 23, 2025. During the year ended December 31, 2024, the company did not purchase any common
shares under the NCIB for a total cost of $nil (year ended December 31, 2023 – 37,527 and $378, respectively).
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, 2024 which is incorporated herein by reference and is available at
www.sedarplus.ca 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
MANAGEMENT’S DISCUSSION AND ANALYSIS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 19
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, 2024 which is available at www.sedarplus.ca 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, 2024.
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.
Additional information
Additional information about Atrium, including our Annual Information Form for the year ended December 31, 2024,
is available on SEDAR+ at www.sedarplus.ca. 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.
2024
Financial
Statements
Consolidated
Financial Statements
For the years ended
December 31, 2024 and 2023
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 IFRS Accounting 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
March 6, 2025
“Robert Goodall”
“John Ahmad”
Robert Goodall
John Ahmad
Chief Executive Officer
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, 2024
and December 31, 2023, 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 material accounting policy information.
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, 2024 and December 31, 2023, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (IASB).
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.
Emphasis of Matter – Restated Comparative Information
We draw attention to Note 16 of the consolidated financial statements, which explains that certain comparative
information presented for the year ended December 31, 2023 has been restated. Our opinion is not modified in
respect of this matter.
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; and
testing the inputs used in management's model and recalculating the Group's ECL.
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 IFRS Accounting Standards as issued by the IASB, 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 Patrick Truckle.
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
March 6, 2025
CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 27
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of Canadian dollars)
December 31,
December 31,
Notes
2024
2023
Assets
Mortgages receivable
5, 8
$ 863,169
$ 876,733
Investment property
6
1,101
1,101
Prepaid expenses
34
43
Total assets
$ 864,304
$ 877,877
Liabilities
Borrowings under credit facility
7
$ 193,580
$ 216,989
Accounts payable and accrued liabilities
8, 12
7,768
4,109
Accrued convertible debenture interest
916
916
Dividends payable
11,202
16,047
Convertible debentures
9
133,858
157,610
Total liabilities
347,324
395,671
Shareholders’ equity
Share capital
10
513,811
478,903
Deferred share incentive plan units
1,128
943
Equity component of convertible debentures
3,526
3,786
Contributed surplus
1,848
1,588
Deficit
(3,333)
(3,014)
Total shareholders’ equity
516,980
482,206
Total liabilities and shareholders’ equity
$ 864,304
$ 877,877
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”
“Mark Silver”
Robert Goodall, Director
Mark Silver, Director
28 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(in thousands of Canadian dollars, except for number of common shares)
Deferred
Equity
share
component
Total
Share capital
incentive
of convertible
Contributed
shareholders’
Notes
Number
Amount
plan units
debentures
surplus
Deficit
equity
Balance, December 31, 2022
43,335,995
$
471,882
$
712
$
3,786
$
1,588
$
(2,404)
$
475,564
Shares issued under dividend reinvestment plan
10
631,187
6,969
–
–
–
–
6,969
Shares purchased under normal course issuer bid
10
(37,527)
(378)
–
−
−
−
(378)
Shares issued under employee share purchase plan
10
18,710
207
–
–
–
–
207
Shares issued under deferred share incentive plan
11
17,116
223
(223)
–
–
–
–
Share-based payments
11
–
–
454
–
–
–
454
Net income and comprehensive income
–
–
–
–
–
51,485
51,485
Dividends declared
–
–
–
–
–
(52,095)
(52,095)
Balance, December 31, 2023
43,965,481
$
478,903
$
943
$
3,786
$
1,588
$
(3,014)
$
482,206
Shares issued under dividend reinvestment plan
10
648,584
7,102
–
–
–
–
7,102
Shares issued under employee share purchase plan
10
20,554
229
–
–
–
–
229
Shares issued under deferred share incentive plan
11
17,416
218
(218)
–
–
–
–
Shares issued by prospectus
10
2,512,750
28,771
–
–
–
–
28,771
Shares issued on debenture conversion
474
7
–
–
–
–
7
Maturity of convertible debentures
9
–
–
–
(260)
260
–
–
Issue cost
10
–
(1,419)
–
–
–
–
(1,419)
Share-based payments
11
–
–
403
–
–
–
403
Net income and comprehensive income
–
–
–
–
–
47,852
47,852
Dividends declared
–
–
–
–
–
(48,171)
(48,171)
Balance, December 31, 2024
47,165,259
$
513,811
$
1,128
$
3,526
$
1,848
$
(3,333)
$
516,980
Dividends amounted to $1.0625 per share for the year ended December 31, 2024 (year ended December 31, 2023 – $1.19).
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 29
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands of Canadian dollars, except for per share amounts)
Years ended December 31
Notes
2024
2023
Revenues
Mortgage interest and fees
8
$
97,220
$
97,940
Rental income
6
43
634
Total revenues
97,263
98,574
Operating expenses
Mortgage servicing and management fees
8
8,558
8,465
Transfer agent, regulatory fees and investor relations
231
283
Share-based payments
8, 11
321
341
Professional fees
245
240
Directors’ expense
8, 12
304
301
Administration and general
155
163
Adjustment to fair value of deferred share units
8, 12
45
(29)
Recovery of prior mortgage loss
(268)
(492)
Provision for mortgage losses
5(b)
13,839
11,894
Total operating expenses
23,430
21,166
Income before financing costs
73,833
77,408
Financing costs
Interest on convertible debentures
9
9,524
10,292
Interest and other financing charges
7, 12
16,457
15,631
Total financing costs
25,981
25,923
Net income and comprehensive income for the year
$
47,852
$
51,485
Earnings per common share
Basic
13
$
1.06
$
1.18
Diluted
13
$
1.05
$
1.14
The accompanying notes are an integral part of these consolidated financial statements.
30 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of Canadian dollars)
Years ended December 31
2024
2023
Cash provided by (used in):
(Restated – note 16)
Operating activities
Net income and comprehensive income for the year
$
47,852
$
51,485
Adjustments to determine net cash flows
provided by (used in) operating activities
Share-based payments
403
454
Mortgage interest and fees earned
(97,220)
(97,940)
Mortgage interest and fees received
121,614
87,721
Interest on convertible debentures expensed
9,524
10,292
Interest and other financing charges expensed
16,457
15,631
Adjustment to fair value of deferred share units
45
(29)
Provision for mortgage losses
13,839
11,894
Recovery of prior mortgage loss
(268)
(492)
Gain on disposition of investment property
–
(74)
Changes in operating assets and liabilities
Cash advances of mortgages receivable
(352,157)
(281,507)
Cash repayments of mortgages receivable
327,297
263,597
Additions to unamortized origination fees
459
369
Prepaid expenses
9
61
Accounts payable and accrued liabilities
3,117
(2,056)
Interest and fees on convertible debentures paid
(7,969)
(8,646)
Interest and other financing charges paid
(14,874)
(15,889)
Cash provided by operating activities
68,128
34,871
Investing activity
Proceeds from disposition of investment property
–
13,275
Cash provided by investing activity
–
13,275
Financing activities
Advances under credit facility
447,506
274,072
Repayments under credit facility
(472,000)
(279,750)
Issuance of common shares
29,000
207
Repurchase of common shares
–
(378)
Repayment of convertible debenture
(25,300)
–
Share capital issue cost
(1,419)
–
Cash dividends paid
(45,915)
(42,297)
Cash used in financing activities
(68,128)
(48,146)
Increase in cash
–
–
Cash, beginning of year
–
–
Cash, end of year
$
–
$
–
The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 31
NOTE 1 – NATURE OF OPERATIONS
Atrium Mortgage Investment Corporation (the “company”) is a corporation domiciled in Canada, incorporated
under the Ontario Business Corporations Act. The address of the company’s registered head office and
principal place of business is Suite 1010, 18 King Street East, Toronto, Ontario M5C 1C4.
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.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 IFRS Accounting Standards
as issued by the International Accounting Standards Board (IASB), as set out in Part I of the CPA Canada
Handbook – Accounting. Material 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 March
6, 2025.
(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 Accounting Standards as issued
by the IASB 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 property;
32 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – BASIS OF PRESENTATION (continued)
(e) Use of estimates and judgements (continued)
(d) the measurement of the liability and equity components of the convertible debentures, which
depend upon the estimated market interest rates for a comparable debenture without the
convertibility feature;
(e) 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 have 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, allowance for mortgage losses and valuation of investment property.
Management continues to monitor and assess the impacts of these economic uncertainties on its estimates,
judgements and assumptions.
NOTE 3 – MATERIAL ACCOUNTING POLICY INFORMATION
(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 • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 33
NOTE 3 – MATERIAL ACCOUNTING POLICY INFORMATION (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 mortgage, 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:
34 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – MATERIAL ACCOUNTING POLICY INFORMATION (continued)
(c) Financial instruments – impairment of assets (continued)
Credit stage and financial assets included
Impairment loss recognized
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
12-month ECL – portion of lifetime ECLs
that represent the ECL from possible default
events within the next 12 months
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
Lifetime ECL – expected losses from
possible default events over the expected life
of the instrument, weighted by the likelihood
of loss
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
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 35
NOTE 3 – MATERIAL ACCOUNTING POLICY INFORMATION (continued)
(c) Financial instruments – impairment of assets (continued)
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 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.
The ECL methodology was modified to include an overlay adjustment to account for the uncertainty and
difficulty in forecasting future economic conditions. The financial reports of other lenders and financial
institutions are 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 collection is virtually certain.
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 revenue 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 revenue 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 it’s 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 revenue on purchased or originated credit-impaired financial assets are
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.
36 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – MATERIAL ACCOUNTING POLICY INFORMATION (continued)
(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.
The company defines financial asset modification as changes to the original contractual terms of a
financial asset that either represent a fundamental change to the contract or have a significant impact on the
cash flow of the asset. If the modification leads to a substantial change or the expiration of the original cash
flows, the company derecognizes the original asset and recognizes a new one based on the new contractual
terms. The new asset is then evaluated for staging and credit risk to determine the necessary ECL measurement
as of the origination date. If the modifications do not result in derecognition, the asset will maintain its original
staging and credit risk assessment.
Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled, or
expires.
(f) Investment property
Investment property is a property over which the company has taken title through exercise of its security
interest. Such property is 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, an investment property is 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 an investment property is 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 it’s carrying amount, then an impairment loss is recognized for the excess.
Any impairment loss, or gain or loss realized on disposal, is recognized in the consolidated statements of
income and comprehensive income.
(g) Convertible debentures
Convertible debentures can be converted into common shares of the company at the option of the investor.
They are compound financial instruments with two components: a financial liability, and a call option which
is an equity instrument. The fair value of the liability component is measured as of the date that the convertible
debentures were issued, and the equity instrument is valued on that date based upon the difference between
the fair value of the convertible debenture and the fair value of the liability component. The measurement of
the fair value of the liability component is based upon market rates of interest on similar debt instruments
without the conversion feature. Expenses of issue are allocated between the two components on a pro-rata
basis. The carrying amount of the debt is accreted up to its face value over the life of the financial liability
using the effective interest method, which applies a constant interest rate over the term of the debt. The value
of the equity component is not remeasured subsequent to its initial measurement date.
(h) Income taxes
The company qualifies as a MIC under the ITA, and as such is not taxed on income provided that its taxable
income is distributed to its shareholders in the form of dividends within 90 days after December 31 each year.
It is the company’s policy to pay such dividends to remain non-taxable. Accordingly, no provision for current
or deferred income taxes is required.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 37
NOTE 3 – MATERIAL ACCOUNTING POLICY INFORMATION (continued)
(i) Earnings per common share
Basic earnings per common share is calculated by dividing earnings during the period by the weighted average
number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting
the income and comprehensive income attributable to common shareholders and the weighted average number
of common shares outstanding for the effects of all dilutive items such as convertible debentures and deferred
share incentive plan.
(j) Share-based payments
The company has an equity-settled share-based compensation plan for grants to eligible directors, officers,
and senior management under its deferred share incentive plan that vest over a number of years. 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.
(k) Deferred share unit plan
The company has a cash-settled deferred share unit plan for non-executive directors pursuant to which each
non-executive director is required to receive one-half of their director compensation in the form of deferred
share units. Each non-executive director can elect to receive the remaining one-half of their director
compensation in deferred share units or cash or a combination thereof.
The deferred share units represent a financial liability as they can only be settled in cash when the non-
executive directors cease to serve in any capacity with the company. As such, the deferred share units are
initially recognized at their fair value, using the volume-weighted average trading price of the company’s
common shares on the TSX for the five trading days prior to the last day of the reporting period, as directors’
expense with a corresponding amount recorded in accounts payable and accrued liabilities. The liability is
subsequently remeasured to its fair value at each period end with the change in fair value during the period
recognized as an operating expense.
NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS
Various pronouncements have been issued by the 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. In particular, IFRS 18, Presentation and Disclosure in Financial Statements was issued
in April 2024 and applies to an annual reporting period beginning on or after January 1, 2027. This new
standard introduces changes to the structure of the statement of profit or loss, disclosure requirements around
management defined performance measures and introduces enhanced principles on aggregation and
disaggregation which focus on grouping items based on their shared characteristics. Management is evaluating
the impact of the new standard in preparation for its adoption on January 1, 2027. In addition, the IASB, has
issued amendments to the classification and measurement of financial instruments in May 2024 with
amendments to IFRS 9 and IFRS 7 Financial Instruments: disclosures, this amendment applies to an annual
reporting period beginning on or after January 1, 2026. Management is evaluating the impact of the
amendment relating to the derecognition of a financial liability and classification of financial assets in
preparation for its adoption on January 1, 2026.
38 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – MORTGAGES RECEIVABLE
(a) Mortgage portfolio
As at December 31, 2024
As at December 31, 2023
Outstanding
% of
Outstanding
% of
Property type
Number
amount
Portfolio Number
amount
Portfolio
High-rise residential
17
$
247,202
27.9%
22 $
323,340
36.2%
Mid-rise residential
20
139,738
15.8%
25
208,289
23.3%
Low-rise residential
12
152,827
17.2%
14
153,561
17.2%
House and apartment
219
154,713
17.5%
153
117,943
13.2%
Condominium corporation
6
1,279
0.1%
10
1,786
0.2%
Residential portfolio
274
695,759
78.5%
224
804,919
90.1%
Commercial
24
190,939
21.5%
19
88,640
9.9%
Mortgage portfolio
298
886,698
100.0%
243
893,559
100.0%
Accrued interest receivable
6,321
6,049
Mortgage discount
(47)
(68)
Unamortized origination fees
(247)
(207)
Allowance for mortgage losses
(29,556)
(22,600)
Mortgages receivable
$ 863,169
$ 876,733
The mortgage portfolio has maturity dates between 2025 and 2032 with a weighted average remaining term
of 8.6 months at December 31, 2024 (December 31, 2023 – 9.2 months). The portfolio has a weighted average
interest rate (which excludes lender fees earned by the company) of 9.98% as at December 31, 2024 (11.42%
as at December 31, 2023).
Within the mortgage portfolio, at December 31, 2024, there were 21 mortgages receivable aggregating to
$138,195 (15.6% of the mortgage portfolio) in which the company has a subordinate position in a syndicated
mortgage receivable (December 31, 2023 – 26 mortgages receivable aggregating to $187,789; 21.0% 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, 2024.
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, 2025
$ 619,868
69.9%
2026
199,902
22.5%
2027
30,423
3.4%
2028
35,290
4.0%
2029
357
0.1%
Thereafter
858
0.1%
$ 886,698
100.0%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 39
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, 2024
Gross carrying amount
Stage 1
Stage 2 Stage 3
Total
High-rise residential
$ 231,352
$ 15,850 $
– $ 247,202
Mid-rise residential
115,836
14,628
9,274
139,738
Low-rise residential
138,567
–
14,260
152,827
House and apartment
138,086
13,997
2,630
154,713
Condominium corporation
1,279
–
–
1,279
Commercial
182,618
5,471
2,850
190,939
Mortgage portfolio
$ 807,738
$ 49,946 $ 29,014 $ 886,698
Allowance for mortgage losses
High-rise residential
$
2,465
$
1,589 $
– $
4,054
Mid-rise residential
1,478
3,494
3,077
8,049
Low-rise residential
1,371
–
6,589
7,960
House and apartment
1,222
121
808
2,151
Condominium corporation
9
–
–
9
Commercial
1,551
2,932
2,850
7,333
Mortgage portfolio
$
8,096
$
8,136 $ 13,324 $ 29,556
As at December 31, 2023
Gross carrying amount
Stage 1
Stage 2 Stage 3
Total
High-rise residential
$ 275,271
$ 48,069 $
– $ 323,340
Mid-rise residential
171,586
36,703
–
208,289
Low-rise residential
104,368
12,450
36,743
153,561
House and apartment
105,009
12,934
–
117,943
Condominium corporation
1,786
–
–
1,786
Commercial
76,809
11,831
–
88,640
Mortgage portfolio
$ 734,829
$ 121,987 $ 36,743 $ 893,559
Allowance for mortgage losses
Stage 1
Stage 2 Stage 3
Total
High-rise residential
$
3,313
$
5,156 $
– $
8,469
Mid-rise residential
2,605
1,120
–
3,725
Low-rise residential
1,526
49
6,857
8,432
House and apartment
830
38
–
868
Condominium corporation
7
–
–
7
Commercial
1,052
47
–
1,099
Mortgage portfolio
$
9,333
$
6,410 $
6,857 $ 22,600
The allowance for mortgage losses at December 31, 2024 is $29,556 (December 31, 2023 – $22,600). Of this
allowance, $8,096 (December 31, 2023 – $9,333) 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). Management estimated the ECL as $8,136 for mortgages receivable
classified as Stage 2 and $13,324 for mortgages receivable classified as Stage 3 at December 31, 2024
(December 31, 2023 – $6,410 and $6,857, respectively).
40 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • 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, 2024
Stage 1
Stage 2
Stage 3
Total
Opening balance, January 1, 2024
$ 9,333
$ 6,410 $
6,857 $ 22,600
Allowance for mortgage losses
Transfers to Stage 1 (1)
73
(73)
–
–
Transfers to Stage 2 (1)
(123)
183
(60)
–
Transfers to Stage 3 (1)
(18)
(7,571)
7,589
–
Net remeasurement (2)
(1,669)
9,491
5,729
13,551
Mortgage advances
1,882
45
20
1,947
Mortgage repayments
(1,382)
(196)
(81)
(1,659)
Write-off
−
(153)
(6,730)
(6,883)
Balance, December 31, 2024
$ 8,096
$ 8,136 $
13,324 $
29,556
(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.
During the year ended December 31, 2024, the allowance for mortgage losses for mortgages classified as
Stage 1 decreased due to changes in assumptions in the expected credit loss model and overlay adjustments
due to economic uncertainties which was partially offset by an increase in mortgages classified in Stage 1.
The allowance for mortgage losses classified as Stage 2 increased due to a higher ECL assessment of the
individual loans classified as Stage 2 at year end compared to the beginning of the year partially offset by the
transfer of mortgages classified as Stage 2 into Stage 3. The allowance for mortgage losses classified as Stage
3 increased due to the transfer of mortgages classified as Stage 2 into Stage 3 and a higher ECL assessment of
the individual loans classified as Stage 3 at year end partially offset by a write-off of mortgages receivable.
Year ended December 31, 2023
Stage 1
Stage 2
Stage 3
Total
Opening balance, January 1, 2023
$ 8,967
$ 1,739 $
– $ 10,706
Allowance for mortgage losses
Transfers to Stage 1 (1)
1,677
(1,677)
–
–
Transfers to Stage 2 (1)
(424)
424
–
–
Transfers to Stage 3 (1)
(8)
(1,573)
1,581
–
Net remeasurement (2)
(1,017)
7,517
5,273
11,773
Mortgage advances
868
14
3
885
Mortgage repayments
(730)
(34)
–
(764)
Balance, December 31, 2023
$ 9,333
$ 6,410 $ 6,857 $
22,600
(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.
During the year ended December 31, 2023, the allowance for mortgage losses for mortgages classified as
Stage 1 increased due to changes in assumptions in the expected credit loss model and overlay adjustments
due to economic uncertainties which were partially offset by a decrease in mortgages classified as Stage 1.
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 increased due to an increase in loans classified as Stage 3. The ECL is assessed individually for Stage 2 and
Stage 3 mortgages receivable.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 41
NOTE 6 – INVESTMENT PROPERTY
Year ended
Year ended
December 31,
December 31,
2024
2023
Balance, beginning of year
$
1,101
$
14,302
Disposition
−
(13,201)
Balance, end of year
$
1,101
$
1,101
Investment property consists of a four unit property in Leduc, Alberta. During the year ended December 31,
2024, the value in use was estimated using available market evidence and comparable transactions. During
the year ended December 31, 2023, the company sold the 90 unit property in Regina, Saskatchewan. Net sales
proceeds were $13,275, resulting in a gain on disposition of $74.
Years ended December 31
Rental income
2024
2023
Revenue
$
79
$
903
Gain on disposition of investment property
−
74
Property operating costs
(36)
(343)
Rental income
$
43
$
634
NOTE 7 – CREDIT FACILITY
As at December 31, 2024, the company had a credit facility from a syndicate of six Canadian financial
institutions of $340,000 (December 31, 2023 – $315,000) at a formula rate that varies with bank prime and
the market Term Canadian Overnight Repo Rate Average (CORRA) rate. On June 4, 2024, the company
entered into an amendment to its credit facility to, among other things, add Royal Bank of Canada as a lender,
increase the maximum balance available by $25,000 to $340,000, and replace draws using bankers’
acceptances with Term CORRA loans. 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 $60,000 (such that the total maximum availability
would be up to $400,000).
Drawings under the credit facility may be by way of a bank loan (including an overdraft facility of up to $5,000
(December 31, 2023 – $5,000)), Term CORRA loans 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 July 31, 2025, 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. As at December 31, 2024, the maximum balance
available to be drawn on the credit facility was $340,000 (December 31, 2023 – $315,000). Under the terms
of the credit facility, covenants must be met in respect of shareholders’ equity, debt to total assets and interest
coverage. As at December 31, 2024 and December 31, 2023, the company met these covenants.
The annualized weighted average interest rate for the year ended December 31, 2024 was 7.03% (7.19%
for the year ended December 31, 2023).
42 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – CREDIT FACILITY (continued)
As at December As at December
Credit facility
31, 2024
31, 2023
Term CORRA and bankers’ acceptances(1)
$ 180,000
$ 205,000
Bank loan
13,000
11,000
Overdraft facility
787
2,281
Unamortized and prepaid financing costs
(207)
(1,292)
Borrowings under credit facility
193,580
216,989
Letters of credit(2)
5,191
12,171
Total credit facility utilization
$ 198,771
$ 229,160
(1)
Effective June 4, 2024, draws under the credit facility using Term CORRA loans replaced draws using bankers’ acceptances as part
of the amendment of the credit facility.
(2)
$4,426 of cash was received, and is recorded in accounts payable and accrued liabilities, for letters of credit on mortgages that are
discharged (December 31, 2023 – $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, 2024 is interest on
the credit facility of $15,954 (December 31, 2023 – $15,129) and bank fees and amortization of financing
costs of $384 (December 31, 2023 – $423).
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, 2024, the company incurred mortgage servicing and management fees of $8,553
(year ended December 31, 2023 - $8,379). 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 $1,012 (December 31, 2023
– $1,320) 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 ended December 31, 2024, 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, 2024 was
$76 (year ended December 31, 2023 – $69).
Certain of the company’s mortgages receivable are shared with other investors. As at December 31, 2024,
companies owned by a director and/or officer of the company were co-invested in one syndicated mortgage
receivable of $536, of which the company’s share was $502, of which $502 had been funded (December 31,
2023 – nil syndicated mortgages receivable of $nil).
During the year ended December 31, 2024, the company recognized net mortgage interest and fees of $nil
(year ended December 31, 2023 – $377) from no borrowers (2023 – two) 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
2024
2023
Directors’ fees (1) (Note 12)
$
284
$
284
Share-based payments to directors (Note 11)
129
145
Share-based payments to officers (Note 11)
98
80
$
511
$
509
(1)
The cumulative adjustment for the fair value of deferred share units issued under the deferred share unit plan was $(68) as at
December 31, 2024 (year ended December 31, 2023 – $(112)) (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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 43
NOTE 9 – CONVERTIBLE DEBENTURES
Convertible debentures
5.10%
5.00%
5.60%
5.50%
5.30%
AI.DB.G
AI.DB.F
AI.DB.E
AI.DB.D
AI.DB.C
Total
Year ended December 31, 2024
Issued and outstanding face value
$ 40,250
$ 34,500
$ 28,743
$ 34,500
$ –
$ 137,933
Carrying amount –
Convertible debentures,
beginning of year
$ 37,667
$ 32,409
$ 28,391
$ 33,953
$ 25,190
$ 157,610
Conversion of shares
–
–
(7)
–
–
(7)
Repayment of
convertible debenture
–
–
–
–
(25,300)
(25,300)
Accretion for the year
479
408
286
272
110
1,555
Convertible debentures,
end of year
$ 38,146
$ 32,817
$ 28,670
$ 34,225
$ –
$ 133,858
Convertible debentures
5.10%
5.00%
5.60%
5.50%
5.30%
AI.DB.G
AI.DB.F
AI.DB.E
AI.DB.D
AI.DB.C
Total
Year ended December 31, 2023
Issued and outstanding face value
$ 40,250
$ 34,500
$ 28,750
$ 34,500
$ 25,300
$ 163,300
Carrying amount –
Convertible debentures,
beginning of year
$ 37,194
$ 32,006
$ 28,108
$ 33,683
$ 24,973
$ 155,964
Accretion for the year
473
403
283
270
217
1,646
Convertible debentures,
end of year
$ 37,667
$ 32,409
$ 28,391
$ 33,953
$ 25,190
$ 157,610
Convertible debentures
5.10%
5.00%
5.60%
5.50%
AI.DB.G
AI.DB.F
AI.DB.E
AI.DB.D
Maturity date
Mar. 31, 2029
Dec. 31, 2028
Mar. 31, 2025
Dec. 31, 2025
Initial term
7 years
7 years 6 years
7 years
Conversion at option of shareholder at:
$16.75/share
$17.50/share
$14.75/share
$15.60/share
Interest payments date:
March 31,
June 30,
March 31,
June 30,
Sept. 30
Dec. 31
Sept. 30
Dec. 31
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:
Mar. 31, 2025
Dec. 31, 2024
Mar. 31, 2022
Dec. 31, 2021
to:
Redeemable at the company’s option at par plus
Mar. 31, 2027
Dec. 31, 2026
Mar. 31, 2024
Dec. 31, 2023
accrued interest and unpaid interest after:
Mar. 31, 2027
Dec. 31, 2026
Mar. 31, 2024
Dec. 31, 2023
The 5.30% convertible debenture matured on June 30, 2024, and the aggregate principal amount of $25,300
plus all accrued and unpaid interest was repaid in full on the first subsequent business day. On repayment of
the 5.30% convertible debenture, the $260 equity component of convertible debentures associated with this
convertible debenture was recorded to contributed surplus.
Interest costs related to the convertible debentures are recorded in financing costs using the effective interest
method and consist of the following:
Years ended December 31
2024
2023
Coupon rate interest on convertible debentures
$
7,955
$
8,626
Accretion and other costs
1,569
1,666
Interest on convertible debentures
$
9,524
$
10,292
44 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – SHARE CAPITAL
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, 2024, 648,584 common shares were issued under the company’s
DRIP (year ended December 31, 2023 – 631,187), using reinvested dividends of $7,102 (year ended December
31, 2023 – $6,969). Shares issued under the DRIP are issued by the company from treasury.
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. On June 13, 2023, the company announced that the TSX had
approved renewal of the NCIB to purchase up to 4,176,336 common shares during the twelve month period
commencing June 24, 2023 and ending on June 23, 2024. On June 17, 2024, the company announced that the
TSX had approved renewal of the NCIB to purchase up to 4,232,634 common shares during the twelve month
period commencing June 24, 2024 and ending on June 23, 2025. During the year ended December 31, 2024,
the company did not purchase any common shares under the NCIB for a total cost of $nil (year ended
December 31, 2023 – 37,527 and $378, respectively).
On October 4, 2024, the company completed a public offering of common shares issuing 2,185,000
common shares at a price of $11.45 per share for gross proceeds of $25,018. On October 25, 2024, the
company completed a public offering of common shares via its over-allotment option issuing 327,750 common
shares at a price of $11.45 per share for gross proceeds of $3,753. The company incurred share issuance costs
of $1,419 associated with these public offerings.
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.
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 dates of September 1, 2024 ($11.65), September 28, 2024 ($11.54), September 1, 2023
($11.17) and September 29, 2023 ($10.71).
Year ended
Year ended
December 31, 2024
December 31, 2023
DSIP
IDSIP
DSIP
IDSIP
units
units
Total
units
units
Total
Balance, beginning of year
101,400
12,802
114,202
87,566
10,368
97,934
Units granted
28,500
–
28,500
30,950
–
30,950
Units earned
–
2,879
2,879
–
2,434
2,434
Units cancelled
(1,183)
–
(1,183)
–
–
–
Common shares issued
(17,416)
–
(17,416)
(17,116)
–
(17,116)
Balance, end of year
111,301
15,681
126,982
101,400
12,802
114,202
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 45
NOTE 11 – SHARE-BASED PAYMENTS (continued)
Share-based payments expense:
Years ended December 31
2024
2023
September 28, 2024 grant(1)
$
–
$
–
September 1, 2024 grant
61
–
September 29, 2023 grant(1)
–
–
September 1, 2023 grant
143
58
September 1, 2022 grant
64
164
August 11, 2022 grant(1)
–
–
September 2, 2021 grant
21
74
September 1, 2020 grant
–
18
September 1, 2016 grant
4
4
September 1, 2015 grant
12
10
September 1, 2014 grant
10
9
August 30, 2013 grant
6
4
$
321
$
341
(1)
During the year ended December 31, 2024, CMCC reimbursed the company for share-based expenses of $82 related to grants under
the company’s DSIP (year ended December 31, 2023 – $113).
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 $1,336 (December 31, 2023 – $932) 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.
Years ended December 31
2024
2023
Directors’ fees paid in DSUs
$
241
$
241
Dividends on DSUs
119
79
Adjustment to fair value of DSUs
45
(29)
$
405
$
291
Years ended December 31
2024
2023
Outstanding DSUs, beginning of year
89,225
60,358
Granted
21,656
21,876
Reinvested
10,625
6,991
Balance, end of year
121,506
89,225
46 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – EARNINGS PER SHARE
Years ended December 31
2024
2023
Basic earnings per share –
Numerator
Net income and comprehensive income for the year
$
47,852
$
51,485
Denominator
Weighted average common shares outstanding
44,935,826
43,693,240
Basic earnings per share
$
1.06
$
1.18
Diluted earnings per share –
Numerator
Net income and comprehensive income for the year
$
47,852
$
51,485
Interest on convertible debentures
9,524
10,292
Net income and comprehensive income for diluted earnings per share $
57,376
$
61,777
Denominator
Weighted average common shares outstanding
44,935,826
43,693,240
Convertible debentures
9,376,826
10,228,549
Deferred share incentive plan
109,886
92,392
Income deferred share units
14,463
11,721
Weighted average common shares outstanding – diluted basis
54,437,001
54,025,902
Diluted earnings per share
$
1.05
$
1.14
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, included in accounts payable and accrued liabilities, is measured at
FVTPL. All other financial liabilities are measured at amortized cost.
(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 unit plan, 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 unit plan 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 47
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(b) Fair value (continued)
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.
As at December
As at December
Convertible debentures
31, 2024 31, 2023
Fair value
$ 135,211
$ 146,408
Less carrying amount of equity component
(3,526)
(3,786)
$ 131,685
$ 142,622
Carrying amount of financial liability component
$ 133,858
$ 157,610
(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, 2024 is $868,654 (December 31, 2023 – $889,179).
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, 2024.
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, 2024. Management continuously monitors real estate values to ensure that the quality of the collateral
underlying the remaining mortgage portfolio remains adequate.
As at December 31, 2024, the largest borrower group accounted for 7.87% of the mortgage portfolio
(December 31, 2023 – 6.82%). 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.
(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 the credit facility.
48 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 2024 • NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – FINANCIAL INSTRUMENTS (continued)
(d) Liquidity risk (continued)
As at December 31, 2024, management considers that it has adequate procedures in place to manage
liquidity risk.
As at December 31, 2024
Carrying
value
Contractual
cash flow
Within 1
year
1 to 3
years
3 to 5
years
More than
5 years
Borrowings under credit facility(1)
$193,787
$202,075
$202,075
$ –
$ –
$ –
Accounts payable and accrued
liabilities(2)
7,768
7,768
7,768
–
–
–
Accrued convertible debenture
interest
916
916
916
–
–
–
Dividends payable
11,202
11,202
11,202
–
–
–
Convertible debentures(3)
133,858
146,938
67,897
79,041
−
–
Total
347,531
368,899
289,858
79,041
−
–
Unadvanced mortgage
commitments(4)
–
54,171
54,171
–
–
–
Total contractual liabilities
$347,531
$423,070
$344,029
$79,041
$ −
$ –
Notes:
(1) Includes interest at the annualized weighted average interest rate of the credit facility and assumes the outstanding balance is not repaid
until maturity on July 31, 2025.
(2) For purposes of contractual cash flows, the DSUs owing to non-executive directors are assumed to be repaid within the first quarter of
2025.
(3) The 5.50% debentures are assumed but not required to be repaid in the first quarter of 2025; 5.60% debentures will be repaid in the
first quarter of 2025; 5.00% debentures are assumed but not required to be repaid December 31, 2026; and the 5.10% debentures are
assumed but not required to be repaid March 31, 2027.
(4) 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,
2024, income and comprehensive income would have been reduced (increased) by approximately $2,173
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 one percentage point higher
(lower) interest rates, the resulting reduction of income and comprehensive income would have been less than
(greater than) $2,173.
(e) 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • 2024 • ATRIUM MORTGAGE INVESTMENT CORPORATION • 49
NOTE 15 – CAPITAL MANAGEMENT
The company defines capital as total debt plus shareholders’ equity, as shown below:
As at December 31
2024
2023
Borrowings under credit facility
$ 193,580
$ 216,989
Convertible debentures
133,858
157,610
Total debt
327,438
374,599
Shareholders’ equity
516,980
482,206
Capital employed
$ 844,418
$ 856,805
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.
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 – RESTATEMENT OF COMPARATIVE CONSOLIDATED STATEMENT OF CASH FLOWS
During the year ended December 31, 2024, management determined that cash flows from cash advances of
mortgages receivable and cash repayments of mortgages receivable, previously classified as investing
activities, should have been classified as operating activities in the consolidated statement of cash flows. Cash
flows from interest and fees on convertible debentures paid and interest and other financing charges paid,
previously classified as financing activities, should have been classified as operating activities in the
consolidated statement of cash flows. In order to correct the presentation, the consolidated statement of cash
flows for the year ended December 31, 2023 was restated as per the table below, with no change to the total
increase in cash. The restatement had no impact on the consolidated statement of income and comprehensive
income, consolidated statement of changes in shareholders' equity or consolidated statement of financial
position.
For the year ended December 31, 2023
As previously
reported
Restatement
Restated
Cash provided by operating activities
$
77,316
$
(42,445)
$
34,871
Cash provided by (used in) investing activities
$
(4,635)
$
17,910
$
13,275
Cash used in financing activities
$
(72,681)
$
24,535
$
(48,146)
NOTE 17 – SUBSEQUENT EVENTS
On January 10, 2025, the company issued 45,645 common shares for $493 to shareholders under its dividend
reinvestment plan.
On February 12, 2025, the company issued 47,914 common shares for $511 to shareholders under its dividend
reinvestment plan.
Transfer Agent
CORPORATE DIRECTORY
Mark L. Silver
Chair of the Board, Atrium Mortgage
Investment Corporation
President, Optus Capital Corporation
Robert G. Goodall
CEO, Atrium Mortgage Investment
Corporation
Peter P. Cohos 1, 4
President, Copez Properties Ltd.
Robert H. DeGasperis
President, Metrus Properties Inc.
Andrew Grant 4
President, PCI Holdings Corp.
Maish Kagan 2
President, Canal Group
Nancy H. O. Lockhart 2, 3
Director, George Weston Ltd.
Director, Choice Properties REIT
Jennifer Scoffield, CPA, CA
Director, Dream Industrial REIT
1.
Chair of Audit Committee
2.
Member of Audit Committee
3.
Chair of Compensation,
Nominating and Governance
Committee
4.
Member of Compensation,
Nominating and Governance
Committee
Computershare Trust Co. of Canada
100 University Ave. 9th Floor, North
Tower
Toronto, ON M5J 2Y1
T. (800) 564 6523
For Convertible Debentures
TSX Trust Company
2001 Robert-Bourassa Blvd, Suite 1600
Montreal, QC H3A 2A6
Board of Directors
Robert G. Goodall
CEO
Richard Munroe
President & COO
John Ahmad, CPA, CA
CFO & Corporare Secretary
Bram Rothman
Managing Director - Ontario
Phil Fiuza
Managing Director - National Accounts,
Residential
Ian Jarvis
Managing Director - British Columbia
Management
Auditors
Crowe Soberman LLP
1100-2 St. Clair Ave. E
Toronto, ON M4T 2T5
T. (416) 964 7633
Share Listings
Common shares,
TSX: AI
Convertible debentures 5.50%
TSX: AI.DB.D
Convertible debentures 5.60%
TSX: AI.DB.E
Convertible debentures 5.00%
TSX: AI.DB.F
Convertible debentures 5.10%
TSX: AI.DB.G
HEAD OFFICE
18 King Street East, Suite 1010
Toronto, Ontario M5C 1C4
T.416-867-1053
F.416-867-1303
E. info@atriummic.com