Atrium Mortgage Investment Corporation

Ladies and gentlemen, please stand by. Your conference is about to begin. Welcome to the Atrium Mortgage Investment Corporation's second quarter results conference call. At this time, all lines are in listen-only mode. Later in the call, we will conduct a question-and-answer session. At that time, if you have a question, you will be asked for a star tool on your touch-tone keypad. A reminder that this conference is being recorded Thursday, August 6, 2026. 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 upon beliefs, estimates, and opinions of Atrium's management the date the statements are made. Atrium undertakes no obligations to update these forward-looking statements in the event that management's beliefs, estimates, opinions, or other factors change. I would now like to turn the conference over to your host, Robert Goodall, CEO of Atrium. Mr. Goodall, please go ahead.

Thank you, and thank you all for calling in this morning. Our CFO, Chris Anastasopoulos, is joining me today. Chris will begin with an overview of our financial results, and then I will speak about our performance from an operational and portfolio perspective.

Thank you, Rob. Atrium delivered solid financial results for shareholders in the second quarter, despite mixed market conditions and ongoing economic uncertainty. For the second quarter, Atrium generated net income of $11.7 million, and our basic earnings per share was $0.24 per share, compared to net income of $13.1 million and basic earnings per share of $0.28 in the comparative quarter of 2025. Our quarterly earnings continue to exceed our regular quarterly dividend of $0.2325 per share. The weighted average interest rate on our mortgage portfolio declined to 8.69% at June 30th from 8.86% at March 31, 2026, as higher-yielding loans were repaid and replaced with new loan originations priced at lower yields based on current market conditions. As of June 30, 2026, 80.9% of the mortgage portfolio was priced at floating interest rates, with the majority of loans having interest rate floors in place. The mortgage portfolio ended the quarter at $860.1 million, which was a decrease of 6.2% from $917.1 million at December 31, 2035. The decrease was due to unusually high mortgage repayments outpacing mortgage advances in the second quarter, with $88.2 million of mortgage principal advanced and $121.9 million repaid and transferred net up write-offs of $1 million during the quarter. This resulted in a portfolio turnover rate of 58% on an annualized basis compared to 38% for 2025, which is an indicator of a healthy portfolio. We expect repayment activity to moderate over the balance of the year. As of June 30, 2026, 96.9% of our mortgages were first mortgages, and we had maintained a conservative weighted average loan-to-value ratio of 62.5% for the portfolio, up from 61.4% at year-end. Our mortgages classified as Stage 1 were $704.6 million at June 30, 2026, down $77.8 million from $782.4 million at December 31, 2025. Stage 2 mortgages rose to $93.9 million, up $45.2 million from December 31, 2025. $48.7 million at December 31, 2025. This included 24.4 million of mortgages transferred to Stage 2 for being over 30 days past their maturity. However, these loans remain current on their interest payments. Most importantly, Stage 3 loans decreased 28% to $61.5 million at June 30, 2026, down from $86 million at December 31, 2025. This was primarily due to $46.3 million in repayments, partially offset by the addition of a $13.5 million loan that went into default for being over 30 days past maturity, although the loan remains current on its interest payments. The total allowance for credit losses was $30.1 million at June 30, 2026, a 1.3% decrease from $30.5 million at December 31, 2025. However, due to the reduction in the mortgage portfolio, the allowance for credit losses represents 3.5% of the portfolio, up from 3.32% at December 31, 2025. By stage, the allowance breaks down as follows. the Stage 1 allowance increased to $7.3 million from $6.1 million at year-end, representing a 1.04% increase in Stage 1 loans. The Stage 2 allowance grew to $8.1 million from $2.9 million at year-end, consistent with the migration of loans into this category. And the Stage 3 allowance declined significantly to $14.7 million from $21.5 million at year-end, in line with the reductions in Stage 3 balances discussed previously. Our balance sheet remains strong, liquid, and well-capitalized. At June 30, 2026, our debt remained low at 36.5% of total assets, with $224.1 million drawn on our $208 million credit facility, leaving healthy available capacity. The weighted average cost of borrowing on the credit facility declined to 4.67% for the quarter compared to 5.1% in the same quarter last year and 5.08% for the full year of 2025. The Board also declared monthly dividends of 7.75 cents per share for the months of October, November, and December 2026 consistent with our previously announced 93 cents per share standard dividend for the year. Overall, these results reflect another quarter of consistent performance for our shareholders, notwithstanding the challenging market backdrop. We remain disciplined in our risk management approach, continue to strengthen our team's capability, manage expenses prudently, and are focused on maintaining a balance sheet that can weather the pressures of the current economic cycle while pursuing new lending opportunities as they arise. I'll now pass you back to Rob for the business and portfolio updates.