FY2025 Results Reflect Strong Growth, Yield, and Credit Quality

• Mortgage Receivables: In FY2025 (year ended June 2025), mortgage receivables increased 3% YoY to $912M, slightly above our September 2024 report’s forecast of $910M. Antrim remains one of the largest Mortgage Investment Corporations (MICs) in Canada.
• Yield and Earnings: The yield rose to 8.53% in FY2025 (FY2024: 7.24%), ahead of our 8.03% forecast, driven by higher lending rates. Revenue grew 9% YoY (3% above forecast), while net income rose 25% YoY (10% above forecast).
• As Antrim’s mortgages are fixed-rate, average lending rates declined more slowly than the broader market. The weighted average lending rate fell just 0.36 pp (from 9.77% to 9.41%) between June 2024 and June 2025, compared to a 200 bps decline in market rates over the same period.

• Portfolio Mix: The portfolio remains focused on first mortgages on single-family homes. As of June 2025, 61% of mortgages were in B.C., 32% in Ontario, and 84% were first mortgages.
• Credit Quality: Impaired/foreclosed mortgages increased slightly from 2.4% to 2.6% of receivables, but remain well below the sector average of 6.0%, reflecting superior credit quality. The portfolio is further supported by a conservative weighted average loan-to-value (LTV) of 60%.
• Macro Backdrop: Since June 2024, the Bank of Canada has cut rates eight times (totaling 250 bps), bringing the policy rate to 2.50%. We believe one more cut is possible over the next six months amid slowing GDP growth, elevated trade tensions, and high unemployment. While delinquencies remain a concern, easing monetary policy should help mitigate risks.
• Outlook: We find high-yielding funds such as Antrim increasingly attractive in a declining rate environment. MIC lending rates tend to be less elastic, declining less in falling rate environments, and rising more slowly in rising rate environments. We project a yield of 7.64% in FY2026 (vs. 8.53% in FY2025).

Mortgage Investment Corporations (MICs) by AUM – June 2025

Antrim remains one of the largest MICs in Canada

Antrim’s yield is lower due to its relatively conservative risk profile, including higher exposure to first mortgages and limited use of leverage

The fund also has significantly fewer impaired mortgages, suggesting a healthier portfolio

Portfolio Update 

In FY2025, mortgage advancements increased 33% YoY, while repayments increased 13% YoY

As a result, mortgage receivables rose 3% YoY to $912M, closely aligning with our September 2024 estimate of $910M

Exposure to first mortgages increased 2 pp to 84%, indicating reduced portfolio risk

The average mortgage size increased 5% YoY to  $451k. Remains focused on single-family residential units

No material change in LTV. Exposure to ON and AB increased, while B.C. exposure declined, enhancing portfolio diversification

As Antrim's mortgages are fixed-rate, the average lending rate declined at a slower pace compared to market rates

No realized losses

Foreclosures and delinquent mortgages rose slightly, from 2.4% to 2.6% of receivables, but remain well below the sector average of 6.0%, reflecting strong portfolio quality

Debt-to-capital declined YoY from 12% to 5%, reflecting management’s mandate for limited leverage. By comparison, other MICs typically employ higher leverage (35%-45%) to boost yields

In summary, we believe the portfolio’s risk profile has decreased (two red vs three green signalsFinancials: YE: June 30th 

FY2025 revenue was up 9% YoY, beating our estimate by 3%, due to higher than expected lending rates

Net income was up 25% YoY, beating our estimate by 10%

Distributions as a percentage of invested capital increased 1.30 pp to 8.45% due to higher lending rates vs our forecast of 8.03% 

FRC Rating

With rates trending downward, we expect yields to have peaked in FY2025, and decline through FY2026 and FY2027

That said, we are revising our FY2026 projections upward, reflecting higher-than-expected portfolio lending rates at FY2025 year-end

We find high-yielding funds, like Antrim, increasingly attractive in the current declining rate environment. This is because MIC lending rates are less elastic, meaning their yields tend to decline less in a falling rate environment, and rise more slowly in a rising rate environment. Given the BoC’s rate cuts, yields are set to decline. However, we believe the risk of higher default rates is easing, and the mortgage origination market is likely to gain momentum in 2026.

Risks 

We believe the MIC is exposed to the following key risks (not exhaustive):

• Loans are short term and need to be sourced and replaced quickly
• Concentration risk – over 60% of mortgages are in B.C. 
• Cower housing prices will result in higher LTVs 
• Shareholders’ principal is not guaranteed 
• Timely deployment of capital is critical
• Default rates can rise during recessions

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