Welcome to the Atrium Mortgage Investment Corporation's fourth quarter conference call. At this time, all lines are in a listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, you will be asked to press star one on your touchtone phone. As a reminder, this conference is being recorded Wednesday, February 16, 2022. Certain statements will be made during this phone call that may be forward-looking statements. Although Atrium believes that such statements are based upon reasonable assumptions, actual results may differ materially. Forward-looking statements are based on the beliefs, estimates, and opinions of Atrium's management on the date the statements are made. Atrium undertakes no obligation to update these forward-looking statements in the event the management's beliefs, estimates, or opinions or other factors change.
I would now like to turn the conference over to your host, Robert Goodall, President. Please go ahead.
Good afternoon, and thank you for calling in today. Our CFO, Jennifer Scoffield, will start by talking about our financial results, and then I'll speak about our performance from an operational and portfolio perspective. Jennifer.
Thanks, Rob. Atrium just completed a strong fourth quarter with record quarterly net income of CAD 10.7 million. Our net income for the year ended December 31, 2021, was also a record at CAD 41.8 million, up 6.7% from the prior year. For the year ended December 31, 2021, we had revenue of CAD 64.2 million, down slightly or 1.2% from the prior year. Our earnings per share for 2021 was CAD 0.98 per share, also a record for Atrium. This compares to earnings per share of CAD 0.93 last year. During 2021, we declared CAD 41.3 million in dividends or CAD 0.97 per share. This is the highest annual dividend per share Atrium has declared since going public in 2012.
A special dividend of CAD 0.07 per share will be paid on February 28. Shares of record on December 31, 2021. In 2022, as previously announced, our board has set the regular dividend rate at CAD 0.90 per annum, paid monthly, which is consistent with prior years' regular dividend. Mortgage interest and fee revenues for the year ended December 31, 2021, were CAD 63.5 million, compared to CAD 64.4 million for 2020. Interest and fee revenue fell slightly as a result of a lower weighted average interest rate in 2021. The weighted average interest rate decreased as a result of a higher proportion of first mortgages in the portfolio at the end of 2021 compared to the prior year. These tend to have lower yields.
A significant reduction in high-ratio loans, as well as increased competition in the markets where we operate, which led to some interest rate compression. In 2021, we had a net rental income of CAD 699,000 compared to CAD 657,000 for 2020. Operating expenses, excluding the provision for mortgage losses for the year ended December 31, 2021, were CAD 8.6 million compared to CAD 8.4 million in 2020. Our operating expenses, including management fees, remained consistent with prior years at 1.1% of assets. We took a provision for mortgage losses in Q4 of CAD 20,000 , resulting in total provision for 2021 of CAD 1.29 million, bringing our total allowance for mortgage losses at December 31 to CAD 10.4 million, or 1.36% of our gross portfolio.
Our allowance for mortgage losses on performing loans, which are the loans classified as stages one and two that are not considered impaired, total CAD 7.6 million, or 1% of the gross balance of performing loans. Our interest expense for the year was CAD 12.5 million, a decrease of 8% from 2020. This drop was a result of the repayment of our 5.5% convertible debentures on June 30, as well as lower cost of borrowing on our credit facility in 2021. Annualized weighted average interest rate on our credit facility was 2.86% this year compared to 3.04% in 2020.
Our mortgages receivable balance at December 31, 2021, was CAD 759 million, an increase of 2.7% from December 30, 2020, and the highest mortgage receivable balance in our history. During the year, CAD 470 million of mortgages were advanced and CAD 437 million of mortgages were repaid, both a record. This resulted in a mortgage turnover rate of 58% for 2021, considerably higher than our average annual turnover of 40%. At December 31, 2021, the portfolio had a weighted average loan-to-value of 60.9%. It had a weighted average interest rate of 8.26%, and 91.4% of the mortgage portfolio were first mortgages. 60% of the total portfolio was priced on a prime plus floating rate basis, the majority with a floor rate.
In November 2021, we completed a successful public offering of 5% convertible debentures for gross proceeds of CAD 34.5 million, including the full amount of the overallotment option, to close the year with a debt-to-total asset ratio of 39.4%. To conclude, we are very pleased with our performance in 2021. We had record net income and earnings per share, and were able to grow the portfolio even with record repayments and loan turnover, all while continuing to lower the risk profile of our portfolio. I'll now pass it over to Rob Goodall, our CEO.
Thank you. As Jennifer mentioned, Atrium net generated strong earnings per share of CAD 0.25 in Q4. For the year as a whole, earnings per share were CAD 0.98, the strongest result in our 9-year history as a public company on the TSX. This result occurred, as Jennifer mentioned, in spite of pandemic, in spite of record CAD 437 million of loan repayments in 2021. We had a record level of CAD 165 million of loan advances in Q4. Any quarter where we get past 100 million mark for mortgage advances is a very good quarter for us. For the year as a whole, we originated and funded CAD 470 million of new loans, a record for Atrium and a 73% gain from last year when we originated CAD 271 million.
As I've mentioned on previous calls, this record level of originations is a reflection of the expansion of our debt team, which now numbers 12 underwriters across Canada and is expected to expand by another two people in 2022. For the year, the mortgage portfolio increased by CAD 22 million from CAD 745 million to CAD 767 million. We experienced a 58% portfolio turnover for the year as a whole, versus 35%-40% in a normal year. While the BC portfolio experienced normal turnover, the Ontario portfolio had 73% loan turnover for the year. I cannot tell if this elevated turnover rate was an aberration or if it's a reflection of a very competitive lending market.
Either way, we have shown that we're capable of originating enough business to deal with whatever turnover level occurs in 2022. If pressed for a forecast, I do believe that Atrium's loan portfolio will grow by a larger amount in 2022, barring a material downturn in the real estate markets. The reason is that the underwriting team will have another year of experience under their belt, and that most of our new loans funded in 2021 have terms of approximately two years. The loan quality of the portfolio actually improved in Q4 and for the year as a whole. 99% of our mortgages are located in our two preferred markets, Ontario and BC. These are the two markets where we have active offices and where we have experienced virtually no loan losses over our 20-year history.
Loan loss provision remains at a very healthy 136 basis points, which provides insurance against a slowdown in the market. It's also worth noting that most of our problem loans are scheduled to be repaid in the next 90 days. The average loan-to-value of the portfolio remained steady in Q4 at 60.9% and continues to remain well below our target of 65%. Turning to our operations. Approximately 82% of the funded loans in Q4 were from Ontario and 18% from BC. For the year as a whole, 76% of new funded loans were in Ontario and 24% in BC. The geographic composition of the portfolio is now 66% in Ontario, 33% in BC, and less than 1% in Alberta. We're very comfortable with this geographic allocation.
By sector, 96% of the new loans funded in Q4 were residential or multi-residential loans, with the balance being commercial loans. The single-family mortgage division had another strong quarter with CAD 17.7 million of funded loans, up from CAD 15 million last quarter. While single-family mortgages have a lower average mortgage rate, it also has a lower risk profile. The single-family mortgage portfolio is entirely located in the GTA, Ottawa, Hamilton, and the Kitchener area, and all the mortgages are under 75% loan to appraised value. In Q4, our average mortgage rate was 8.26%, down from 8.42% last quarter. This is partly due to increased competition in the market, but also due to other factors, namely the repayment of high-ratio loans, which are loans over 75% loan to value, which have attractive coupons.
Secondly, a slightly higher portfolio of lower-yielding single-family loans, as I mentioned earlier. Thirdly, a higher percentage of first mortgages. In fact, Atrium's percentage of first mortgages increased from 81.7% at the beginning of the year to 91.4% by year-end. This is the highest percentage we've had in many years. Each of the three provinces where we operate has more than 88% of its portfolio in first mortgages. Perhaps the risk metric that best exemplifies our defensive lending philosophy is that 99.3% of the portfolio is less than or equal to 75% loan-to-value. This is a percentage that is significantly higher than our peers and reflects a very defensively positioned portfolio. Our record earnings per share was achieved even as we lowered the risk profile of the portfolio.
Turning to defaults. Defaults in our commercial and multi-residential business, which represent 93% of the portfolio, were limited to three borrowers. These are the same three borrowers from last quarter, but there was significant progress made during the quarter. The first are three mortgages in Vancouver totaling CAD 37.25 million. Last quarter, there was one additional loan totaling CAD 8 million plus interest arrears, which was repaid in Q4 from the sale of the asset. The three remaining loans are secured by well-located development sites. They are near a major SkyTrain station and are cross-collateralized. One of the properties with a loan exposure of CAD 12.1 million has been sold firm and is scheduled to close on March 1, 2022.
Another property with a loan exposure of CAD 14.1 million has also firmed up and is scheduled to close on March 30, 2022. If both of these sales close as expected, Atrium will be fully repaid on all three loans. The second property in default is a CAD 5.7 million first mortgage on an estate subdivision in Southwest Calgary. This loan has been in arrears for over a year. Phase II and III of the property were sold for CAD 5.2 million in early 2021, thereby reducing the outstanding loan amount from CAD 10 million to its current balance.
The only remaining security is phase four, and we decided to pull the listing for phase IV from the market in the spring of 2021 as the Calgary market was finally showing signs of strength for the first time in many years. Turns out that market prices for detached homes increased by more than 10% in 2021, so our decision to delay the listing was correct. In January 2022, we decided to re-list the property for sale with a new realtor, and we have already received one conditional offer, which is in line with our expectations and has been adequately reserved for, and we hope to conclude the sale shortly after the end of this first quarter. Please note this is the only loan in the entire portfolio that we expect to incur a loss.
The last loan is a CAD 6.15 million first mortgage in Sutton, Ontario. This loan has been in and out of default over the last couple of years due to the excessive amount of debt subordinate to Atrium and an uncooperative and unscrupulous borrower who has been removed from operation in favor of another homebuilder. Atrium is holding the senior tranche of the first mortgage and has an estimated loan-to-value of 64%, so we do not foresee a loss. Atrium's remaining collateral consists of phases II to V, which is draft plan approved for 138 lots, as well as a 6-acre school site and a small commercial block. A private receiver was engaged in order to prevent the borrower from stalling the completion of the development.
The defaults in the single family portfolio, which represents the other 7% of the total mortgage portfolio, consists of 2 loans totaling CAD 1.56 million. Since the end of Q4, the largest of the 2 loans totaling CAD 937 thousand has been brought current. Overall, we feel very comfortable with the quality of the portfolio. Please note that we analyze and risk rate each loan every quarter to make sure we keep on top of any new issues. Turning to foreclosures, we continue to have 2 foreclosed properties totaling CAD 16.1 million. The first is a four-plex in Leduc, and the second is a 90-unit rental project in Regina. The Leduc cost base is CAD 1.1 million, and the cost base in Regina is CAD 16 million. The four-plex in Leduc is 100% leased through 2021.
The Regina apartment currently has an 80% occupancy rate. In order to improve the occupancy rate, we've recently increased our level of online marketing. Our property manager is now reporting increased traffic at the property, although the winter is generally a period of fewer tenant inquiries. We're also making some modest capital expenditures on the Regina building in order to increase occupancy. These properties generate significant distributions to Atrium each quarter. Our economic commentary is as follows. Despite lockdowns in parts of the country toward the end of Q4, the economy was still expected to grow at 6.3% in Q4 and 4.9% for 2021 as a whole. RBC is forecasting 4% GDP growth in 2022. The economic outlook is relatively bright.
Unfortunately, inflation reached 5.1% in January, and the Bank of Canada intends to start increasing its overnight rate in March of 2022. On February 11, the U.S. announced that their inflation rate rose to 7.5% last month, higher than expected. Most economists expect 3-5 rate increases of 0.25 point or possibly one of 0.5 point in Canada and in the U.S. over the next 12 months. If the rate increases are implemented gradually, the consensus is that the Canadian housing market will slow down from a frantic 2021 pace but still remain relatively strong. If rate increases are overly aggressive, there could be a dampening effect on both resale housing and the new home market. I'll turn to the real estate markets now.
In the fourth quarter, the resale and new home markets remained very strong. First, looking at resales, 2021 was one of the strongest housing markets ever in Canada. The resale market in the GTA had a 28% gain in sales, a 24% gain in average prices, a 31% gain in the Home Price Index, and a 12% drop in new listings, all leading to very tight market conditions. The average price of a detached home in the GTA increased almost 29% on a year-over-year basis, while semi-detached homes and townhouses increased by 25% and 29% respectively. Condo apartment resale prices were up 18.5% on a year-over-year basis. There was a resurgence in demand for homes within the city of Toronto.
Year-over-year unit sales growth was strongest within the 416 area code, with 36.8% sales growth compared to the surrounding GTA suburbs, which showed a combined growth of 23.6%. In the Vancouver area, the market was also very tight. Metro Vancouver home sales increased by 22% year-over-year. 2021 sales are 4% above the previous all-time record in 2015 and are 33% above the 10-year average. The MLS Composite Benchmark Price for all residential properties in Greater Vancouver had a 17% increase year-over-year and a 1.6% increase compared to the previous month. New listings for all property types were down 19% year-over-year and down almost 51% from last month.
The benchmark price for single-family homes was up 22%, for townhouses up 22%, and for condominiums up 213%. Calgary also performed well with a 45% increase in sales and an 8% rise in prices. Over 10% when one looks at the single family detached homes. The new home markets in Toronto and Vancouver are also very healthy. The GTA's positive story about the resale market is also evident in the new home market. New home sales increased by almost 24% year-over-year. The number of high-rise sales were up 60.7%, while low-rise sales actually saw a decline of 20.3%, largely due to a lack of inventory.
On a year-over-year basis, high-rise inventory decreased 25%, while low-rise inventory decreased 67.5% for an overall inventory reduction of almost 33%. The benchmark price of CAD 1.83 million for new low-rise product represents a staggering 38.5% increase on a year-over-year basis. The benchmark price for a new high-rise product increased by 13.5% on a year-over-year basis to CAD 1.16 million. In 2021, we saw the price gap between low-rise and high-rise continue to widen as it has since the pandemic started. In Vancouver, the most recent new home stats are from Q3. Sales in Metro Vancouver were down 16% from the previous quarter, but it was mostly due to fewer new project launches.
Despite this headwind, sales were still the highest Q3 sales recorded in the past decade. The upward pressure of new family home prices in Metro Vancouver continues. Concrete and wood frame condominium prices increased by 1% on a quarterly basis, whereas townhomes rose by 10% due to limited supply throughout the region. Total inventory for the end of Q3 2021 was down 12% from the previous quarter. Further, 88% of all concrete condominium units, which are scheduled to be completed by the end of 2021, were already presold. To summarize, the strength of the resale markets, coupled with a lack of new listings, bodes well for another good year in 2022 for the new home market. However, new home construction for both low-rise and high-rise buildings does face significant cost inflation as well as supply chain issues.
I suspect that these issues will be most severe for the smaller developers who do not have long-term relationships with the trades. So far, cost inflation in the building industry has been offset by increases in end unit pricing, but we will keep monitoring the situation. To summarize, Atrium generated record earnings per share in 2021 and has performed at a high level throughout the pandemic. CMCC, the manager of Atrium, originated a record number of loans, which is a testament to the growth and development of the team of the company's underwriting team. The earnings per share result is all the more impressive when one considers the unprecedented levels of loan repayments, particularly in the Ontario region. Loan quality is also very high, as evidenced by the following risk metrics.
Our loan-to-value ratio on a portfolio basis has remained steady at approximately 61% loan to value throughout the pandemic. We targeted a portfolio geographically toward the two most liquid centers in the country of Toronto and Vancouver, where we've had virtually no losses over our 20-year history as a private and then a public company. Over 99% of our portfolio is now composed of low-ratio loans, described as loans below 75% loan to value. We have a very healthy loan loss provision in place, equal to 1.3%-1.36% of the mortgage portfolio, and over 91% of the portfolio are first mortgages. Lastly, I'm really pleased to announce the appointment of Richard Munroe as Chief Operating Officer, effective February 15, 2022.
Richard joined Atrium in September 2006 and most recently held the title of Managing Director for Ontario. Richard has over 15 years of experience underwriting commercial and residential mortgages on behalf of Atrium and has been gradually taking on a greater number of management roles. This is not a sudden elevation of responsibility, but rather a recognition of how his role has evolved over the last few years. With the quality of our team at CMCC and the portfolio in very good shape, we are defensively positioned to withstand a change in economic conditions. As importantly, we're well positioned to have another very good year in 2022. Thank you, and we'd be pleased to take any questions you might have.
As a reminder, to ask a question, please press star one on your telephone. Again, that's star one on your telephone. Please stand by while we compile the Q&A roster. Your first question comes from the line of Rasib Bhanji from TD Securities. Your line is open.
Thank you. Good afternoon. If I could just start on the mortgage portfolio mix. Appreciate that the credit quality has increased with a significantly higher first mortgages and lower high-ratio loans. I guess the offset is the lower weighted average mortgage rate. Going forward, do you see Atrium maintaining similar portfolio mix? In turn, what would the impact be on the mortgage rate? Should it be sort of stable or how should we expect?
What we've seen from our peers is that everybody's felt a little bit more competition. That competition for us isn't just non-bank lenders. That competition is wide, credit unions, trust companies, because a lot of our loans are repaid. In fact, almost all of our loans are repaid by institutional lenders, not by other non-bank lenders. As long as the market is this high and it stays really competitive, you're gonna have pressure on rates. Having said that, as we mentioned, we had a couple of pretty good high-ratio loans that we were always comfortable with. We had really nice coupon rates, and those were repaid. Now the good news is we virtually have no high-ratio loans.
The bad news is when a loan gets paid off like that, you know, you'll automatically have some drop in your overall income. As we go forward, I think if we were to drop, it would be at a smaller rate because it's sort of an exceptional quarter. It's difficult to know with competition whether our rates will drop or whether they'll basically be stable from this point forward. I think they're more likely to be stable, but depending on the competition, they could drop a bit more. I don't know.
Mm-hmm. Okay. That makes sense. Shifting towards your foreclosed properties, the 90-unit rental property in Regina, am I correct in knowing that as Atrium was set for sale, or am I wrong?
Atrium had it for sale. Yeah. Because of the vacancies now, you know, the occupancy rate's about 80%, we'll wait till the vacancy rate is higher before actively trying to sell it.
Okay.
In a place like Regina, which is pretty cold, if you enter the winter with a lower occupancy rate, you're likely to have to carry that lower occupancy rate until it warms up because there just aren't as many tenant inquiries. Having said that, we're hopeful that when we report back to you at the end of Q1, occupancy will be higher than it is today. Notwithstanding that, because we have no debt against the property, it actually generates really good income. It's still a very profitable project.
Yeah. Makes sense. Just one last question. Sorry.
Yeah. Go ahead.
My last question was just on CMHC prioritizing increasing access towards affordable housing. I'm just wondering, would that have any direct or more likely indirect impact on your business?
I don't think so. Most of that new rental development, it's at extremely favorable rates. Well, you know, I don't know exactly what the rates are, but they start with 2% or something like that, to allow them to make economic sense to developers. I don't see us participating in that type of development because it's so low margin. It's only viable because of the type of financing that CMHCs provide.
Okay. Makes sense. Those are all my questions. Thank you for your time.
Okay.
Again, if you would like to ask a question, please press star one on your telephone. There are no further questions. Speakers, please proceed.
Okay. Thank you for attending the conference call. For those of you who are shareholders, we thank you for your continuing interest in our company. Have a good day.
This concludes today's conference call. Thank you all for participating. You may now disconnect.