Key Highlights

  • Revenues grew 8% YoY to $17 million in Q3-2019. Net income in Q3-2019 increased 12% YoY to $10 million (EPS: $0.25) – beating the records created in Q2.
  • Atrium’s net mortgage portfolio was up 0.5% QoQ to $737 million by the end of Q3-2019. We believe the risk profile of Atrium’s portfolio has stayed flat QoQ.
  • We estimate that dividends as a percentage of book value decreased YoY from 8.50% to 8.34% p.a. in Q3-2019, primarily due to a decline in the weighted average lending rate as we had expected.
  • Atrium reported nil realized losses in the quarter (nil in Q1 and Q2 2019 as well), versus $7.10 million for 2018 (1.1% of the portfolio).
  • Our forecast for total dividends in the year is now $0.96 per share (previously $0.98 per share) due to an increase in shares outstanding from a recent $27 million equity financing.
  • The Vancouver residential market is showing signs of stabilization. We continue to expect reasonably strong markets for commercial / multi-family mortgages in Vancouver, and commercial / multi-family / residential mortgages in Toronto. This is likely to be partially offset by a lower interest rate environment.
  • Our current fair value estimate reflects potential for a 9.2% total return in the next 12 months.

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