CVB Financial Corp. Reports Earnings for the First Quarter 2022

  • Net Earnings of $45.6 million, or $0.31 per share for First Quarter
  • Assets total $17.54 billion as acquisition of Suncrest Bank completed on January 7, 2022
  • Quarterly annualized core loan growth of 8%
  • Net Interest Margin expands to 2.90%

ONTARIO, Calif., April 20, 2022 (GLOBE NEWSWIRE) — CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended March 31, 2022.

CVB Financial Corp. reported net income of $45.6 million for the quarter ended March 31, 2022, compared with $47.7 million for the fourth quarter of 2021 and $63.9 million for the first quarter of 2021. Diluted earnings per share were $0.31 for the first quarter, compared to $0.35 for the prior quarter and $0.47 for the same period last year. The first quarter of 2022 included $2.5 million in provision for credit losses, compared to $19.5 million of provision recaptured in the first quarter of 2021. The fourth quarter of 2021 did not include a recapture of or provision for credit losses. Net income of $45.6 million for the first quarter of 2022 produced an annualized return on average equity (“ROAE”) of 8.24%, an annualized return on average tangible common equity (“ROATCE”) of 13.08%, and an annualized return on average assets (“ROAA”) of 1.06%. Our net interest margin, tax equivalent (“NIM”), was 2.90% for the first quarter of 2022, while our efficiency ratio was 46.93%, or 42.38% when $5.6 million of acquisition expenses are excluded.

On January 7, 2022, we completed the acquisition of Suncrest Bank (“Suncrest”). Our financial statements for the first quarter included 83 days of Suncrest operations, post-merger. At close, Citizens Business Bank acquired loans with a fair value of $774.5 million, assumed $512.8 million of noninterest-bearing deposits, and $669.8 million of interest-bearing deposits.

David Brager, President and Chief Executive Officer of Citizens Business Bank, commented, “We produced $45.6 million in net income during the first quarter, which is a testament to our committed associates and the consistency and focus to executing our core strategies . We also closed and integrated the acquisition of Suncrest Bank, while continuing to organically grow our core loans and deposits. The results demonstrate our ongoing commitment to our customers in the face of rising interest rates, labor constraints, and geopolitical turmoil resulting in inflation and supply chain disruptions. We continue to build on our long track record as a safe, sound, and secure financial institution.”

INCOME STATEMENT HIGHLIGHTS

           
    Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
   
  (Dollars in thousands, except per share amounts)
Net interest income $ 112,840     $ 102,395     $ 103,468  
(Provision for) recapture of credit losses   (2,500 )           19,500  
Noninterest income   11,264       12,385       13,681  
Noninterest expense   (58,238 )     (47,980 )     (47,163 )
Income taxes   (17,806 )     (19,104 )     (25,593 )
     Net earnings $ 45,560     $ 47,696     $ 63,893  
Earnings per common share:          
     Basic $ 0.31     $ 0.35     $ 0.47  
     Diluted $ 0.31     $ 0.35     $ 0.47  
           
NIM   2.90 %     2.79 %     3.18 %
ROAA   1.06 %     1.18 %     1.79 %
ROAE   8.24 %     9.05 %     12.75 %
ROATCE   13.08 %     13.89 %     19.85 %
Efficiency ratio   46.93 %     41.80 %     40.26 %
Noninterest expense to average assets, annualized   1.36 %     1.19 %     1.32 %
           

Net Interest Income

Net interest income was $112.8 million for the first quarter of 2022. This represented a $10.4 million, or 10.20%, increase from the fourth quarter of 2021, and a $9.4 million, or 9.06%, increase from the first quarter of 2021. Total interest income was $114.1 million for the first quarter of 2022, which was $10.6 million, or 10.21%, higher than the fourth quarter of 2021 and $8.6 million, or 8.13%, higher than the same period last year. Total interest income and fees on loans for the first quarter of 2022 of $89.5 million increased $4.8 million, or 5.64%, from the fourth quarter of 2021, and decreased $2.3 million, or 2.54%, from the first quarter of 2021.   The decline in interest income and fees on loans year-over-year was primarily due to lower loan yields of 23 basis points, resulting from the low interest rate environment in 2021.   Total investment income of $23.5 million increased $5.7 million, or 31.94%, from the fourth quarter of 2021 and increased $10.4 million, or 79.36%, from the first quarter of 2021. Investment income growth resulted from higher levels of investment securities and higher yields. Interest expense increased $124,000 or 10.92%, from the prior quarter, due to growth in average interest bearing deposits of approximately $740 million. Although average interest-bearing deposits grew by approximately $1 billion, interest expense decreased $796,000, or 38.72%, compared to the first quarter of 2021.   The year-over-year decrease in interest expense resulted from lower cost of funds, which declined to 3 basis points for the first quarter of 2022 from 7 basis point for the first quarter of 2021.

Net Interest Margin

Our tax equivalent net interest margin was 2.90% for the first quarter of 2022, compared to 2.79% for the fourth quarter of 2021 and 3.18% for the first quarter of 2021. The 11 basis point increase in our net interest margin was due to an 11 basis point increase in our earning asset yield, compared to the fourth quarter of 2021. The increase in the earning asset yield was primarily due to an 18 basis point increase in security yields for the recent quarter and a quarter-over-quarter change in the composition of average earning assets, with investments growing from 32.87% to 36.19% of earnings assets, while funds held at the Federal Reserve declined from 13.7% to 10.4%. We deployed some of our excess liquidity at the end of 2021 into additional investment securities by purchasing approximately $1.17 billion in securities during the first quarter of 2022, with expected yields of approximately 2.37%.   Interest and fee income from Paycheck Protection Program (“PPP”) loans was approximately $2.9 million in the first quarter of 2022, compared to $4.2 million in the fourth quarter of 2021. After excluding discount accretion, nonaccrual interest income and the impact from PPP loans (“core loan yield”), our core loan yields increased from 4.08% in the fourth quarter of 2021 to 4.11% in the most recent quarter. The 28 basis point decline in net interest margin, compared to the first quarter of 2021 was primarily the result of a 32 basis point decline in earning asset yield. The decrease in earning asset yield was impacted by a change in asset mix with loan balances declining to 53.25% of earning assets on average for the first quarter of 2022, compared to 62.25% for the first quarter of 2021, as well as lower loan yields. The decline in interest rates since the start of the pandemic has had a negative impact on loan yields, which, after excluding discount accretion, nonaccrual interest income and the impact from PPP loans, our core loan yield declined by 12 basis points compared to the first quarter of 2021. Additionally, interest and fee income from PPP loans declined by $7.5 million from $10.4 million in the first quarter of 2021. Total cost of funds of 0.03% for the first quarter of 2022 was unchanged from the fourth quarter of 2021 and decreased from 0.07% for the year ago quarter. Compared to the first quarter of 2021, the 4 basis points decrease in cost of funds was the result of a 9 basis point decline in the cost of interest bearing deposits, as well as noninterest-bearing deposits growing on average by $1.48 billion. On average, noninterest-bearing deposits were 61.48% of total deposits during the current quarter.

Earning Asset and Deposit Growth

On average, earning assets grew by $1.22 billion and by $2.68 billion, compared to the fourth and first quarters of 2021, respectively. Of the $1.22 billion quarter-over-quarter increase in earning assets, $930.9 million represented an increase in average investment securities, and average loans increased by $666.7 million which included approximately $775 million in loans acquired from Suncrest on January 7, 2022. Compared to the first quarter of 2021, average investments increased by $2.44 billion. Average loans increased by $230.2 million from the first quarter of 2021, which included a $721.7 million decrease in PPP loans on average. Noninterest-bearing deposits grew on average by $394.7 million, or 4.74%, from the fourth quarter of 2021, while interest-bearing deposits and customer repurchase agreements grew on average by $760 million during the first quarter of 2022, compared to the fourth quarter of 2021. Compared to the first quarter of 2021, total deposits and customer repurchase agreements grew on average by $2.63 billion, or 21.51%.

                         
    Three Months Ended
SELECTED FINANCIAL HIGHLIGHTS March 31, 2022   December 31, 2021   March 31, 2021
Yield on average investment securities (TE)   1.70 %         1.52 %         1.65 %    
Yield on average loans   4.27 %         4.29 %         4.50 %    
Core Loan Yield [1]   4.11 %         4.08 %         4.23 %    
Yield on average earning assets (TE)   2.93 %         2.82 %         3.24 %    
Cost of funds   0.03 %         0.03 %         0.07 %    
Net interest margin (TE)   2.90 %         2.79 %         3.18 %    
                         

Average Earning Asset Mix
Avg   % of Total   Avg   % of Total   Avg   % of Total
  Total investment securities $ 5,776,440     36.19 %   $ 4,845,498     32.87 %   $ 3,333,593     25.09 %
  Interest-earning deposits with other institutions   1,666,473     10.44 %     2,045,124     13.87 %     1,664,193     12.53 %
  Loans   8,500,436     53.25 %     7,833,741     53.14 %     8,270,282     62.25 %
  Total interest-earning assets   15,962,282         $ 14,742,051           13,285,756      
                         
    [1] Represents yield on average loans excluding the impact of discount accretion, nonaccrual interest income and PPP loans.    
                         

Provision for Credit Losses

The first quarter of 2022 included $2.5 million in provision for credit losses. There was no provision or recapture of provision for credit losses recorded in the fourth quarter of 2021. A $19.5 million recapture of provision for credit losses was recorded in the first quarter of 2021, resulting from improvements in our economic forecast of certain macroeconomic variables after reflecting $23.5 million in provision for credit losses for the year ended December 31, 2020 due to the severe economic forecast at that time as a result of the onset of the COVID-19 pandemic. As a result of the acquisition of Suncrest, we recorded a provision for credit loss of $4.9 million on January 7, 2022 for the acquired loans that were not considered purchased credit deteriorated (“PCD”). At March 31, 2022, we recorded a recapture of provision of $2.4 million due to improvements in underlying loan characteristics and the net impact of changes in the economic forecast of certain macroeconomic variables from the end of 2021.

Noninterest Income

Noninterest income was $11.3 million for the first quarter of 2022, compared with $12.4 million for the fourth quarter of 2021 and $13.7 million for the first quarter of 2021. Service charges on deposits increased by $574,000, or 12.8% over the fourth quarter of 2021 and grew by $1.1 million, or 27% in comparison to the fourth quarter of 2021. Trust and investment services income decreased by $290,000 in the first quarter of 2022, compared to the fourth quarter of 2021 but grew by $211,000 year-over-year. Swap fee income declined by $215,000 year-over-year. The first quarter of 2022 included $508,000 in death benefits that exceeded the asset value of certain BOLI policies, compared to $391,000 and $3.5 million in death benefits for the fourth quarter of 2021 and the first quarter of 2021, respectively. The fourth quarter of 2021 included $890,000 for recovery of an acquired loan charged off prior to a previous acquisition and a $700,000 net gain on the sale of an OREO property.

Noninterest Expense

Noninterest expense for the first quarter of 2022 was $58.2 million, compared to $48.0 million for the fourth quarter of 2021 and $47.2 million for the first quarter of 2021. The $10.3 million quarter-over-quarter increase included a $3.1 million increase in salaries and employee benefits, which included additional compensation related expenses for the newly hired and former Suncrest associates.   Occupancy and equipment increased by $749,000 quarter-over-quarter due to the addition of 7 banking centers resulting from the acquisition of Suncrest. Acquisition expense related to the merger of Suncrest was $5.6 million for the first quarter of 2022, compared to $153,000 in the fourth quarter of 2021. As a percentage of average assets, noninterest expense was 1.36% for the first quarter of 2022, compared to 1.19% for the fourth quarter of 2021 and 1.32% for the first quarter of 2021. The efficiency ratio for the first quarter of 2022 was 46.93%, compared to 41.80% for the fourth quarter of 2021 and 40.26% for the first quarter of 2021.   If acquisition expense is excluded, noninterest expense as a percentage of average assets was 1.23% and the efficiency ratio was 42.38% for the first quarter of 2022.

Income Taxes

Our effective tax rate for the quarter ended March 31, 2022 was 28.10%, compared with 28.60% for the same period of 2021.   Our estimated annual effective tax rate can vary depending upon the level of tax-advantaged income as well as available tax credits.

BALANCE SHEET HIGHLIGHTS

Assets

The Company reported total assets of $17.54 billion at March 31, 2022. This represented an increase of $1.66 billion, or 10.42%, from total assets of $15.88 billion at December 31, 2021. Interest-earning assets of $16.1 billion at March 31, 2022 increased by $1.42 billion, or 9.70%, when compared with $14.68 billion at December 31, 2021. The increase in interest-earning assets was primarily due to a $900.2 million increase in investment securities and a $704.0 million increase in total loans, partially offset by a $160.5 million decrease in interest-earning balances due from the Federal Reserve.

Total assets at March 31, 2022 increased by $2.70 billion, or 18.18%, from total assets of $14.84 billion at March 31, 2021. Interest-earning assets increased by $2.49 billion, or 18.24%, when compared with $13.62 billion at March 31, 2021. The increase in interest-earning assets included a $2.11 billion increase in investment securities, a $298.6 million increase in total loans and a $96.5 million increase in interest-earning balances due from the Federal Reserve. The increase in total loans included a $776.5 million decrease in PPP loans with a remaining outstanding balance totaling $121.2 million as of March 31, 2022. Excluding PPP loans, total loans increased by $769.4 million from December 31, 2021 and by $1.08 billion from March 31, 2021.

On January 7, 2022, we completed the acquisition of Suncrest with approximately $1.4 billion in total assets, acquired at fair value, and 7 banking centers. The increase in total assets at March 31, 2022 included $765.9 million of acquired net loans, $131 million of investment securities, and $9 million in bank-owned life insurance. The acquisition resulted in $102.1 million of goodwill and $3.9 million in core deposit premium. Net cash proceeds were used to fund the $39.6 million in cash paid to the former shareholders of Suncrest as part of the merger consideration.

Investment Securities

Total investment securities were $6.01 billion at March 31, 2022, an increase of $900.2 million, or 17.62%, from $5.11 billion at December 31, 2021 and an increase of $2.11 billion, or 54.13%, from $3.90 billion at March 31, 2021.  

At March 31, 2022, investment securities held-to-maturity (“HTM”) totaled $2.36 billion, an increase of $436.8 million, or 22.68%, from December 31, 2021 and a $1.28 billion increase, or 117.37%, from March 31, 2021.

At March 31, 2022, investment securities available-for-sale (“AFS”) totaled $3.65 billion, inclusive of a pre-tax net unrealized loss of $203.4 million. AFS securities increased by $463.4 million, or 14.55%, from $3.18 billion at December 31, 2021 and increased by $835.0 million, or 29.69%, from March 31, 2021.

Combined, the AFS and HTM investments in mortgage backed securities (“MBS”) and collateralized mortgage obligations (“CMO”) totaled $5.07 billion or approximately 84% of the total investment securities at March 31, 2022. Virtually all of our MBS and CMO are issued or guaranteed by government or government sponsored enterprises, which have the implied guarantee of the U.S. Government. In addition, we had $570.3 million of Government Agency securities (HTM) at March 31, 2022, that represent approximately 10% of the total investment securities.

Our combined AFS and HTM municipal securities totaled $370.3 million as of March 31, 2022, or approximately 6% of our total investment portfolio. These securities are located in 35 states. Our largest concentrations of holdings by state, as a percentage of total municipal bonds, are located in Minnesota at 13.28%, Texas at 9.96%, California at 9.01%, Washington at 7.84%, Ohio at 7.49%, and Massachusetts at 7.43%.

Loans

Total loans and leases, at amortized cost, of $8.59 billion at March 31, 2022 increased by $704.0 million, or 8.92%, from December 31, 2021. The increase in total loans included $774.5 million of loans acquired from Suncrest in the first quarter of 2022. After adjusting for acquired loans, seasonality and forgiveness of PPP loans, our core loans grew by $144.5 million, or 1.97%, from the end of the fourth quarter, or approximately 8% annualized.   The $144.5 million core loan growth included $100.3 million in commercial real estate loans, $27.3 million in commercial and industrial loans, $14.2 million in SFR mortgage loans, $2.5 million in SBA loans, and $5.7 million in other loans, partially offset by a decrease of $5.5 million in construction loans. The majority of the $110.1 million decrease in dairy & livestock loans was seasonal.

Total loans and leases, at amortized cost, of $8.59 billion at March 31, 2022 increased by $298.6 million, or 3.60%, from March 31, 2021. Total loans, excluding PPP loans, grew by $1.075 billion, or 14.54%, from the end of the first quarter of 2021. After adjusting for acquired loans and forgiveness of PPP loans, our core loans grew by $340.3 million, or 4.60%, from the end of the first quarter of 2021. Commercial real estate loans grew by $293.2 million, commercial and industrial loans increased $86.6 million, dairy & livestock and agribusiness loans grew by $16.2 million, and municipal lease financings increased by $5.9 million. This core loan growth was partially offset by decreases of $39.6 million in construction loans, $16.6 million in SBA loans, and $4.9 million in consumer and other loans.

Asset Quality

During the first quarter of 2022, we experienced credit charge-offs of $16,000 and total recoveries of $11,000, resulting in net charge-offs of $5,000. The allowance for credit losses (“ACL”) totaled $76.1 million at March 31, 2022, compared to $65.0 million at December 31, 2021 and $71.8 million at March 31, 2021. The ACL was increased by $11.1 million in 2022, including $8.6 million for the acquired Suncrest PCD loans and a $2.5 million provision for credit losses. At March 31, 2022, ACL as a percentage of total loans and leases outstanding was 0.89%. This compares to 0.82% and 0.87% at December 31, 2021 and March 31, 2021, respectively. When PPP loans are excluded, the ACL as a percentage of total loans and leases outstanding was 0.90% at March 31, 2022, compared to 0.84% at December 31, 2021 and 0.97% at March 31, 2021.

Nonperforming loans, defined as nonaccrual loans and loans 90 days past due accruing interest plus nonperforming TDR loans, and nonperforming assets, defined as nonaccrual loans and loans 90 days past due accruing interest plus OREO, are highlighted below.

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
             
             
Nonperforming Assets and Delinquency Trends March 31,   December 31,   March 31,
      2022       2021       2021  
Nonperforming loans            
Commercial real estate   $ 7,055     $ 3,607     $ 7,395  
SBA     1,575       1,034       2,412  
SBA – PPP     2              
Commercial and industrial     1,771       1,714       2,967  
Dairy & livestock and agribusiness     2,655             259  
SFR mortgage     167       380       424  
Consumer and other loans     40       158       312  
Total   $ 13,265     $ 6,893     $ 13,769  
% of Total loans     0.15 %     0.09 %     0.17 %
             
OREO            
Commercial real estate   $     $     $ 1,575  
SFR mortgage                  
Total   $     $     $ 1,575  
             
Total nonperforming assets   $ 13,265     $ 6,893     $ 15,344  
% of Nonperforming assets to total assets     0.08 %     0.04 %     0.10 %
             
Past due 30-89 days            
Commercial real estate   $ 565     $ 438     $ 178  
SBA     549       979       258  
Commercial and industrial     6             952  
Dairy & livestock and agribusiness     1,099              
SFR mortgage     403       1,040       266  
Consumer and other loans                 21  
Total   $ 2,622     $ 2,457     $ 1,675  
% of Total loans     0.03 %     0.03 %     0.02 %
             
Classified Loans   $ 64,108     $ 56,102     $ 69,710  

Of the $13.27 million in nonperforming loans, $4.2 million were acquired from Suncrest. Classified loans are loans that are graded “substandard” or worse. Classified loans increased $8.0 million quarter-over-quarter. Total classified loans at March 31, 2022 included $17.5 million of classified loans acquired from Suncrest. Excluding the $17.5 million of acquired classified Suncrest loans, classified loans decreased $9.5 million quarter-over-quarter and included a $10.5 million decrease in classified commercial real estate loans and a $1.6 million decrease in classified commercial and industrial loans, partially offset by a $2.8 million increase in classified dairy & livestock and agribusiness loans.

Deposits & Customer Repurchase Agreements

Deposits of $14.49 billion and customer repurchase agreements of $598.9 million totaled $15.09 billion at March 31, 2022. This represented an increase of $1.47 billion, or 10.78%, when compared with $13.62 billion at December 31, 2021. Total deposits and customer repurchase agreements increased $2.50 billion, or 19.88% when compared with $12.59 billion at March 31, 2021.

Noninterest-bearing deposits were $9.11 billion at March 31, 2022, an increase of $1.0 billion, or 12.38%, when compared to $8.10 billion at December 30, 2021 and an increase of $1.53 billion, or 20.18%, when compared to $7.58 billion at March 31, 2021. At March 31, 2022, noninterest-bearing deposits were 62.86% of total deposits, compared to 62.45% at December 31, 2021 and 62.74% at March 31, 2021.

Capital

The Company’s total equity was $2.08 billion at March 31, 2022. This represented an overall decrease of $6.5 million from total equity of $2.08 billion at December 31, 2021. Increases to equity included $197.1 million for issuance of 8.6 million shares to acquire Suncrest and $45.6 million in net earnings. Decreases included $25.5 million in cash dividends and a $142.3 million decrease in other comprehensive income from the tax effected impact of the decline in market value of available-for-sale securities. During the first quarter of 2022, we executed on a $70 million accelerated stock repurchase program and retired 2,544,298 shares of common stock, or approximately 80% of the estimated shares repurchased under the program. We also repurchased, under our 10b5-1 stock repurchase plan, 536,010 shares of common stock, at an average repurchase price of $23.40, totaling $12.5 million. Our tangible book value per share at March 31, 2022 was $9.05.

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards.

        CVB Financial Corp. Consolidated
Capital Ratios   Minimum Required Plus
Capital Conservation Buffer
  March 31,
2022
  December 31,
2021
  March 31,
2021
                 
Tier 1 leverage capital ratio   4.0 %   8.7 %   9.2 %   9.8 %
Common equity Tier 1 capital ratio   7.0 %   13.6 %   14.9 %   14.9 %
Tier 1 risk-based capital ratio   8.5 %   13.6 %   14.9 %   15.1 %
Total risk-based capital ratio   10.5 %   14.4 %   15.6 %   16.1 %
                 
Tangible common equity ratio       7.7 %   9.2 %   9.4 %
                 

CitizensTrust

As of March 31, 2022 CitizensTrust had approximately $3.34 billion in assets under management and administration, including $2.49 billion in assets under management. Revenues were $2.8 million for the first quarter of 2022, compared to $2.6 million for the same period of 2021. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.

Merger Update

On January 7, 2022, the Company completed the previously announced merger (the “Merger”) transaction whereby Suncrest merged with and into the Company’s wholly-owned subsidiary Citizens Business Bank (“Citizens”), in accordance with the terms and conditions of that certain Agreement and Plan of Reorganization and Merger (“Merger Agreement”), dated as of July 27, 2021, by and among the Company, Citizens and Suncrest, in a stock and cash transaction valued at approximately $237 million in aggregate, or $18.63 per Suncrest share based on CVB Financial Corp.’s closing stock price of $22.87 on January 7, 2022. Under the terms of the Merger Agreement, the Company issued approximately 8.6 million shares of Company common stock and approximately $39.6 million in aggregate cash consideration, including cash paid out in settlement of outstanding incentive stock option awards at Suncrest.

Suncrest Bank, previously headquartered in Visalia, California, had seven branch locations and two loan production offices in California’s Central Valley and the Sacramento area, which opened as Citizens Business Bank locations on January 10, 2022.

Corporate Overview

CVB Financial Corp. (“CVBF”) is the holding company for Citizens Business Bank. CVBF is one of the 10 largest bank holding companies headquartered in California with over $17 billion in total assets. Citizens Business Bank is consistently recognized as one of the top performing banks in the nation and offers a wide array of banking, lending and investing services with more than 60 banking centers and 3 trust office locations serving the Inland Empire, Los Angeles County, Orange County San Diego County, Ventura County, Santa Barbara County, and Central California.

Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol “CVBF”. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab.

Conference Call

Management will hold a conference call at 7:30 a.m. PDT/10:30 a.m. EDT on Thursday, April 21, 2022 to discuss the Company’s first quarter 2022 financial results

To listen to the conference call, please dial (833) 301-1161, conference ID 2762557. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available through April 28, 2022 at 1:00 p.m. PDT/4:00 p.m. EDT. To access the replay, please dial (855) 859-2056, conference ID 2762557.

The conference call will also be simultaneously webcast over the Internet; please visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab to access the call from the site. Please access the website 15 minutes prior to the call to download any necessary audio software. This webcast will be recorded and available for replay on the Company’s website approximately two hours after the conclusion of the conference call, and will be available on the website for approximately 12 months.

Safe Harbor  
Certain statements set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will likely result”, “aims”, “anticipates”, “believes”, “could”, “estimates”, “expects”, “hopes”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will,” “strategy”, “possibility”, and variations of these words and similar expressions help to identify these forward-looking statements, which involve risks and uncertainties that could cause actual results or performance to differ materially from those projected. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s outlook regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, and the impact of acquisitions we have made or may make. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company, and there can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors in addition to those set forth below could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements.

Given the ongoing and dynamic nature of the COVID-19 pandemic, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, workforce, operating platform and prospects remain uncertain. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, could affect us in substantial and unpredictable ways, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance.

General risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct business; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; the effect of acquisitions we have made or may make, including, without limitation, the failure to obtain the necessary regulatory approvals, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; the transition away from USD LIBOR and uncertainties regarding potential alternative reference rates, including SOFR; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the CECL model, which has changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; possible credit related impairments or declines in the fair value of securities held by us; possible impairment charges to goodwill; changes in consumer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; periodic fluctuations in commercial or residential real estate prices or values; our ability to attract deposits and other sources of liquidity; the possibility that we may reduce or discontinue the payments of dividends on our common stock; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; technological changes in banking and financial services; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, which could impact business and economic conditions in the United States and abroad; catastrophic events or natural disasters, including earthquakes, drought, climate change or extreme weather events that may affect our assets, communications or computer services, customers, employees or third party vendors; public health crises and pandemics, such as the COVID-19 pandemic, and their effects on the economic and business environments in which we operate, including on our credit quality and business operations, as well as the impact on general economic and financial market conditions; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; our ability to recruit and retain key executives, board members and other employees, and changes in employment laws and regulations; unanticipated regulatory or legal proceedings; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s 2021 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company’s earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.


Non-GAAP Financial Measures

— Certain financial information provided in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and is presented on a non-GAAP basis. Investors and analysts should refer to the reconciliations included in this presentation and should consider the Company’s non-GAAP measures in addition to, not as a substitute for or as superior to, measures prepared in accordance with GAAP. These measures may or may not be comparable to similarly titled measures used by other companies.

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
           
           
  March 31,
2022
  December 31,
2021
  March 31,
2021
Assets          
Cash and due from banks $ 171,000     $ 90,012     $ 139,713  
Interest-earning balances due from Federal Reserve   1,482,039       1,642,536       1,385,586  
Total cash and cash equivalents   1,653,039       1,732,548       1,525,299  
Interest-earning balances due from depository institutions   6,859       25,999       27,748  
Investment securities available-for-sale   3,647,330       3,183,923       2,812,348  
Investment securities held-to-maturity   2,362,741       1,925,970       1,086,984  
Total investment securities   6,010,071       5,109,893       3,899,332  
Investment in stock of Federal Home Loan Bank (FHLB)   18,012       17,688       17,688  
Loans and lease finance receivables   8,591,684       7,887,713       8,293,057  
Allowance for credit losses   (76,119 )     (65,019 )     (71,805 )
Net loans and lease finance receivables   8,515,565       7,822,694       8,221,252  
Premises and equipment, net   53,435       49,096       49,735  
Bank owned life insurance (BOLI)   259,254       251,570       223,905  
Intangibles   27,310       25,394       31,467  
Goodwill   765,822       663,707       663,707  
Other assets   229,770       185,108       180,305  
Total assets $ 17,539,137     $ 15,883,697     $ 14,840,438  
Liabilities and Stockholders’ Equity          
Liabilities:          
Deposits:          
Noninterest-bearing $ 9,107,304     $ 8,104,056     $ 7,577,839  
Investment checking   714,567       655,333       567,062  
Savings and money market   4,289,550       3,889,371       3,526,424  
Time deposits   376,357       327,682       407,330  
Total deposits   14,487,778       12,976,442       12,078,655  
Customer repurchase agreements   598,909       642,388       506,346  
Other borrowings         2,281       5,000  
Junior subordinated debentures               25,774  
Payable for securities purchased   257,979       50,340       80,973  
Other liabilities   119,428       130,743       123,024  
Total liabilities   15,464,094       13,802,194       12,819,772  
Stockholders’ Equity          
Stockholders’ equity   2,221,305       2,085,471       2,013,710  
Accumulated other comprehensive (loss) income, net of tax   (146,262 )     (3,968 )     6,956  
Total stockholders’ equity   2,075,043       2,081,503       2,020,666  
Total liabilities and stockholders’ equity $ 17,539,137     $ 15,883,697     $ 14,840,438  
           

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
           
           
    Three Months Ended


  March 31,
2022
  December 31,
2021
  March 31,
2021
Assets          
Cash and due from banks $ 187,061     $ 159,086     $ 150,542  
Interest-earning balances due from Federal Reserve   1,653,349       2,018,516       1,622,093  
Total cash and cash equivalents   1,840,410       2,177,602       1,772,635  
Interest-earning balances due from depository institutions   13,124       26,608       42,100  
Investment securities available-for-sale   3,546,957       3,034,487       2,553,767  
Investment securities held-to-maturity   2,229,483       1,811,011       779,826  
Total investment securities   5,776,440       4,845,498       3,333,593  
Investment in stock of FHLB   18,933       17,688       17,688  
Loans and lease finance receivables   8,500,436       7,833,741       8,270,282  
Allowance for credit losses   (73,082 )     (65,304 )     (93,483 )
Net loans and lease finance receivables   8,427,354       7,768,437       8,176,799  
Premises and equipment, net   54,015       49,711       50,896  
Bank owned life insurance (BOLI)   259,799       252,210       226,914  
Intangibles   28,190       26,216       32,590  
Goodwill   759,014       663,707       663,707  
Other assets   206,671       184,258       189,733  
Total assets $ 17,383,950     $ 16,011,935     $ 14,506,655  
Liabilities and Stockholders’ Equity          
Liabilities:          
Deposits:          
Noninterest-bearing $ 8,720,728     $ 8,326,073     $ 7,240,494  
Interest-bearing   5,464,552       4,723,759       4,434,282  
Total deposits   14,185,280       13,049,832       11,674,776  
Customer repurchase agreements   679,931       660,734       559,395  
Other borrowings   51       81       5,001  
Junior subordinated debentures               25,774  
Payable for securities purchased   165,665       103,635       89,735  
Other liabilities   109,688       106,907       119,298  
Total liabilities   15,140,615       13,921,189       12,473,979  
Stockholders’ Equity          
Stockholders’ equity   2,248,871       2,087,716       1,997,618  
Accumulated other comprehensive (loss) income, net of tax   (5,536 )     3,030       35,058  
Total stockholders’ equity   2,243,335       2,090,746       2,032,676  
Total liabilities and stockholders’ equity $ 17,383,950     $ 16,011,935     $ 14,506,655  
           

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)
           
           
    Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
Interest income:          
Loans and leases, including fees $ 89,461     $ 84,683     $ 91,795  
Investment securities:          
Investment securities available-for-sale   12,832       9,891       9,159  
Investment securities held-to-maturity   10,663       7,917       3,940  
Total investment income   23,495       17,808       13,099  
Dividends from FHLB stock   371       261       217  
Interest-earning deposits with other institutions   773       779       413  
Total interest income   114,100       103,531       105,524  
Interest expense:          
Deposits   1,127       996       1,812  
Borrowings and junior subordinated debentures   133       140       244  
Total interest expense   1,260       1,136       2,056  
Net interest income before provision for (recapture of) credit losses   112,840       102,395       103,468  
Provision for (recapture of) credit losses   2,500             (19,500 )
Net interest income after provision for (recapture of) credit losses   110,340       102,395       122,968  
Noninterest income:          
Service charges on deposit accounts   5,059       4,485       3,985  
Trust and investment services   2,822       3,112       2,611  
Gain on OREO, net         700       429  
Other   3,383       4,088       6,656  
Total noninterest income   11,264       12,385       13,681  
Noninterest expense:          
Salaries and employee benefits   32,656       29,588       29,706  
Occupancy and equipment   5,571       4,822       4,863  
Professional services   2,045       1,925       2,168  
Computer software expense   3,795       3,063       2,844  
Marketing and promotion   1,458       1,242       725  
Amortization of intangible assets   1,998       1,892       2,167  
(Recapture of) unfunded loan commitments                
Acquisition related expenses   5,638       153        
Other   5,077       5,295       4,690  
Total noninterest expense   58,238       47,980       47,163  
Earnings before income taxes   63,366       66,800       89,486  
Income taxes   17,806       19,104       25,593  
Net earnings $ 45,560     $ 47,696     $ 63,893  
           
Basic earnings per common share $ 0.31     $ 0.35     $ 0.47  
Diluted earnings per common share $ 0.31     $ 0.35     $ 0.47  
Cash dividends declared per common share $ 0.18     $ 0.18     $ 0.18  
           
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
           
  Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
Interest income – tax equivalent (TE) $ 114,463     $ 103,795     $ 105,797  
Interest expense   1,260       1,136       2,056  
Net interest income – (TE) $ 113,203     $ 102,659     $ 103,741  
           
Return on average assets, annualized   1.06 %     1.18 %     1.79 %
Return on average equity, annualized   8.24 %     9.05 %     12.75 %
Efficiency ratio [1]   46.93 %     41.80 %     40.26 %
Noninterest expense to average assets, annualized   1.36 %     1.19 %     1.32 %
Yield on average loans   4.27 %     4.29 %     4.50 %
Yield on average earning assets (TE)   2.93 %     2.82 %     3.24 %
Cost of deposits   0.03 %     0.03 %     0.06 %
Cost of deposits and customer repurchase agreements   0.03 %     0.03 %     0.06 %
Cost of funds   0.03 %     0.03 %     0.07 %
Net interest margin (TE)   2.90 %     2.79 %     3.18 %
[1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income.
           
Weighted average shares outstanding          
Basic   144,725,296       134,955,690       135,175,494  
Diluted   145,018,517       135,183,895       135,427,982  
Dividends declared $ 25,467     $ 24,401     $ 24,495  
Dividend payout ratio [2]   55.90 %     51.16 %     38.34 %
[2] Dividends declared on common stock divided by net earnings.
           
Number of shares outstanding – (end of period)   141,626,059       135,526,025       135,919,625  
Book value per share $ 14.65     $ 15.36     $ 14.87  
Tangible book value per share $ 9.05     $ 10.27     $ 9.75  
           
  March 31,   December 31,   March 31,
    2022       2021       2021  
Nonperforming assets:          
Nonaccrual loans $ 13,265     $ 6,893     $ 13,769  
Loans past due 90 days or more and still accruing interest                
Troubled debt restructured loans (nonperforming)                
Other real estate owned (OREO), net               1,575  
Total nonperforming assets $ 13,265     $ 6,893     $ 15,344  
Troubled debt restructured performing loans $ 5,259     $ 5,293     $ 5,813  
           
Percentage of nonperforming assets to total loans outstanding and OREO   0.15 %     0.09 %     0.18 %
Percentage of nonperforming assets to total assets   0.08 %     0.04 %     0.10 %
Allowance for credit losses to nonperforming assets   573.83 %     943.26 %     467.97 %
           
  Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
Allowance for credit losses:          
Beginning balance $ 65,019     $ 65,364     $ 93,692  
Suncrest FV PCD loans   8,605              
Total charge-offs   (16 )     (375 )     (2,475 )
Total recoveries on loans previously charged-off   11       30       88  
Net charge-offs   (5 )     (345 )     (2,387 )
Provision for (recapture of) credit losses   2,500             (19,500 )
Allowance for credit losses at end of period $ 76,119     $ 65,019     $ 71,805  
           
Net charge-offs to average loans   -0.000 %     -0.004 %     -0.029 %
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in millions)
                                 
Allowance for Credit Losses by Loan Type                              
                                 
  March 31, 2022   December 31, 2021   March 31, 2021
  Allowance
For Credit
Losses
  Allowance
as a % of
Total Loans
by
Respective
Loan Type
  Allowance
For Credit
Losses
  Allowance
as a % of
Total Loans
by
Respective
Loan Type
  Allowance
For Credit
Losses
  Allowance
as a % of
Total Loans
by
Respectiv
Loan Type
                                 
Commercial real estate $ 57.8       0.9 %     $ 50.9     0.9 %     $ 56.6     1.0 %
Construction   1.0       1.3 %       0.8     1.2 %       1.9     1.9 %
SBA   2.8       0.9 %       2.7     0.9 %       2.5     0.8 %
SBA – PPP                                  
Commercial and industrial   6.8       0.7 %       6.7     0.8 %       6.4     0.9 %
Dairy & livestock and agribusiness   6.7       2.3 %       3.0     0.8 %       2.7     1.0 %
Municipal lease finance receivables   0.2       0.2 %       0.1     0.2 %           0.1 %
SFR mortgage   0.2       0.1 %       0.2     0.1 %       0.3     0.1 %
Consumer and other loans   0.6       0.7 %       0.6     0.8 %       1.4     1.6 %
                                 
Total $ 76.1       0.9 %     $ 65.0     0.8 %     $ 71.8     0.9 %
                                 
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
                       
Quarterly Common Stock Price
                       
    2022       2021       2020  
Quarter End High   Low   High   Low   High   Low
March 31, $ 24.37     $ 21.36     $ 25.00     $ 19.15     $ 22.01     $ 14.92  
June 30,         $ 22.98     $ 20.50     $ 22.22     $ 15.97  
September 30,         $ 20.86     $ 18.72     $ 19.87     $ 15.57  
December 31,         $ 21.85     $ 19.00     $ 21.34     $ 16.26  
                       
Quarterly Consolidated Statements of Earnings
                       
      Q1   Q4   Q3   Q2   Q1
        2022       2021       2021       2021       2021  
Interest income                      
Loans and leases, including fees     $ 89,461     $ 84,683     $ 88,390     $ 91,726     $ 91,795  
Investment securities and other       24,639       18,848       16,157       15,302       13,729  
Total interest income       114,100       103,531       104,547       107,028       105,524  
Interest expense                      
Deposits       1,127       996       1,113       1,425       1,812  
Other borrowings       133       140       135       215       244  
Total interest expense       1,260       1,136       1,248       1,640       2,056  
Net interest income before provision for                    
(recapture of) credit losses       112,840       102,395       103,299       105,388       103,468  
Provision for (recapture of) credit losses     2,500             (4,000 )     (2,000 )     (19,500 )
Net interest income after provision for                    
(recapture of) credit losses       110,340       102,395       107,299       107,388       122,968  
                       
Noninterest income       11,264       12,385       10,483       10,836       13,681  
Noninterest expense       58,238       47,980       48,099       46,545       47,163  
Earnings before income taxes       63,366       66,800       69,683       71,679       89,486  
Income taxes       17,806       19,104       19,930       20,500       25,593  
Net earnings     $ 45,560     $ 47,696     $ 49,753     $ 51,179     $ 63,893  
                       
Effective tax rate       28.10 %     28.60 %     28.60 %     28.60 %     28.60 %
                       
Basic earnings per common share     $ 0.31     $ 0.35     $ 0.37     $ 0.38     $ 0.47  
Diluted earnings per common share   $ 0.31     $ 0.35     $ 0.37     $ 0.38     $ 0.47  
                       
Cash dividends declared per common share   $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18  
                       
Cash dividends declared     $ 25,467     $ 24,401     $ 24,421     $ 24,497     $ 24,495  
                       
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
                   
Loan Portfolio by Type
  March 31,   December 31,   September 30, June 30,   March 31,
    2022       2021       2021       2021       2021  
                   
Commercial real estate $ 6,470,841     $ 5,789,730     $ 5,734,699     $ 5,670,696     $ 5,596,781  
Construction   73,478       62,264       77,398       88,280       96,356  
SBA   311,238       288,600       307,533       291,778       307,727  
SBA – PPP   121,189       186,585       330,960       657,815       897,724  
Commercial and industrial   924,780       813,063       769,977       749,117       753,708  
Dairy & livestock and agribusiness   292,784       386,219       279,584       257,781       261,088  
Municipal lease finance receivables   65,543       45,933       47,305       44,657       42,349  
SFR mortgage   255,136       240,654       231,323       237,124       255,400  
Consumer and other loans   76,695       74,665       70,741       74,062       81,924  
Gross loans, net of deferred loan fees and discounts   8,591,684       7,887,713       7,849,520       8,071,310       8,293,057  
Allowance for credit losses   (76,119 )     (65,019 )     (65,364 )     (69,342 )     (71,805 )
Net loans $ 8,515,565     $ 7,822,694     $ 7,784,156     $ 8,001,968     $ 8,221,252  
                   
                   
                   
Deposit Composition by Type and Customer Repurchase Agreements
                   
  March 31,   December 31,   September 30, June 30,   March 31,
    2022       2021       2021       2021       2021  
                   
Noninterest-bearing $ 9,107,304     $ 8,104,056     $ 8,310,709     $ 8,065,400     $ 7,577,839  
Investment checking   714,567       655,333       594,347       588,831       567,062  
Savings and money market   4,289,550       3,889,371       3,680,721       3,649,305       3,526,424  
Time deposits   376,357       327,682       344,439       365,521       407,330  
Total deposits   14,487,778       12,976,442       12,930,216       12,669,057       12,078,655  
                   
Customer repurchase agreements   598,909       642,388       659,579       578,207       506,346  
Total deposits and customer repurchase agreements $ 15,086,687     $ 13,618,830     $ 13,589,795     $ 13,247,264     $ 12,585,001  
                   
CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
                   
Nonperforming Assets and Delinquency Trends
  March 31,   December 31,   September 30, June 30,   March 31,
    2022       2021       2021       2021       2021  

Nonperforming loans:
                 
Commercial real estate $ 7,055     $ 3,607     $ 4,073     $ 4,439     $ 7,395  
Construction                            
SBA   1,575       1,034       1,513       1,382       2,412  
SBA – PPP   2                          
Commercial and industrial   1,771       1,714       2,038       1,818       2,967  
Dairy & livestock and agribusiness   2,655             118       118       259  
SFR mortgage   167       380       399       406       424  
Consumer and other loans   40       158       305       308       312  
Total $ 13,265     $ 6,893     $ 8,446     $ 8,471     $ 13,769  
% of Total loans   0.15 %     0.09 %     0.11 %     0.10 %     0.17 %
                   

Past due 30-89 days:
                 
Commercial real estate $ 565     $ 438     $     $     $ 178  
Construction                            
SBA   549       979                   258  
Commercial and industrial   6             122       415       952  
Dairy & livestock and agribusiness   1,099             1,000              
SFR mortgage   403       1,040                   266  
Consumer and other loans                           21  
Total $ 2,622     $ 2,457     $ 1,122     $ 415     $ 1,675  
% of Total loans   0.03 %     0.03 %     0.01 %     0.01 %     0.02 %
                   

OREO:
                 
Commercial real estate $     $     $     $     $ 1,575  
SBA                            
SFR mortgage                            
Total $     $     $     $     $ 1,575  
Total nonperforming, past due, and OREO $ 15,887     $ 9,350     $ 9,568     $ 8,886     $ 17,019  
% of Total loans   0.18 %     0.12 %     0.12 %     0.11 %     0.21 %
                   

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
                 
Regulatory Capital Ratios
                 
                 
                 
        CVB Financial Corp. Consolidated
Capital Ratios Minimum Required Plus Capital Conservation Buffer   March 31, 2022   December 31, 2021   March 31, 2021
                 
Tier 1 leverage capital ratio   4.0 %   8.7 %   9.2 %   9.8 %
Common equity Tier 1 capital ratio   7.0 %   13.6 %   14.9 %   14.9 %
Tier 1 risk-based capital ratio   8.5 %   13.6 %   14.9 %   15.1 %
Total risk-based capital ratio   10.5 %   14.4 %   15.6 %   16.1 %
                 
Tangible common equity ratio 7.7 %   9.2 %   9.4 %

Tangible Book Value Reconciliations (Non-GAAP)
 
The tangible book value per share is a Non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The following is a reconciliation of tangible book value to the Company stockholders’ equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of March 31, 2022, December 31, 2021 and March 31, 2021.  
                       
    March 31,
2022
      December 31,
2021
      March 31,
2021
 
  (Dollars in thousands, except per share data)
                       
Stockholders’ equity $ 2,075,043     $ 2,081,503     $ 2,020,666  
Less: Goodwill   (765,822 )     (663,707 )     (663,707 )
Less: Intangible assets   (27,310 )     (25,394 )     (31,467 )
Tangible book value $ 1,281,911     $ 1,392,402     $ 1,325,492  
Common shares issued and outstanding   141,626,059       135,526,025       135,919,625  
Tangible book value per share $ 9.05     $ 10.27     $ 9.75  
                       
Return on Average Tangible Common Equity Reconciliations (Non-GAAP)
           
The return on average tangible common equity is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The following is a reconciliation of net income, adjusted for tax-effected amortization of intangibles, to net income computed in accordance with GAAP; a reconciliation of average tangible common equity to the Company’s average stockholders’ equity computed in accordance with GAAP; as well as a calculation of return on average tangible common equity.
 
  Three Months Ended
  March 31,   December 31, March 31,
    2022       2021       2021  
  (Dollars in thousands)
           
Net Income $ 45,560     $ 47,696     $ 63,893  
Add: Amortization of intangible assets   1,998       1,892       2,167  
Less: Tax effect of amortization of intangible assets [1]   (591 )     (559 )     (641 )
Tangible net income $ 46,967     $ 49,029     $ 65,419  
           
Average stockholders’ equity $ 2,243,335     $ 2,090,746     $ 2,032,676  
Less: Average goodwill   (759,014 )     (663,707 )     (663,707 )
Less: Average intangible assets   (28,190 )     (26,216 )     (32,590 )
Average tangible common equity $ 1,456,131     $ 1,400,823     $ 1,336,379  
           
Return on average equity, annualized   8.24 %     9.05 %     12.75 %
Return on average tangible common equity, annualized   13.08 %     13.89 %     19.85 %
           
           
[1] Tax effected at respective statutory rates.
           

Contact:        David A. Brager        
President and Chief Executive Officer
(909) 980-4030

 

 



Pinnacle West Declares Quarterly Dividend

Pinnacle West Declares Quarterly Dividend

PHOENIX–(BUSINESS WIRE)–
Pinnacle West Capital Corporation’s (NYSE: PNW) board of directors today declared a quarterly dividend of $0.85 per share of common stock, payable on June 1, 2022, to shareholders of record at the close of business on May 2, 2022.

Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of approximately $22 billion, about 6,300 megawatts of generating capacity and nearly 5,900 employees in Arizona and New Mexico. Through its principal subsidiary, Arizona Public Service, the company provides retail electricity service to more than 1.3 million Arizona homes and businesses. For more information about Pinnacle West, visit the company’s website at pinnaclewest.com.

Media Contact: Alan Bunnell (602) 250-3376

Analyst Contact: Amanda Ho (602) 250-3334

Website: pinnaclewest.com

KEYWORDS: United States North America Arizona

INDUSTRY KEYWORDS: Utilities Energy

MEDIA:

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Brandywine Realty Trust Announces First Quarter Results

PHILADELPHIA, April 20, 2022 (GLOBE NEWSWIRE) — Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three months ended March 31, 2022.



Management Comments

“We continue to experience increased levels of physical occupancy and traffic as tenants focus on higher quality, well amenitized buildings,” stated Gerard H. Sweeney, President and Chief Executive Officer for Brandywine Realty Trust. “During the first quarter, we made excellent progress on our 2022 business plan. At the midpoint of our range, we have achieved 84% of our speculative revenue target and, for the quarter, experienced mark-to-market rents increase 20.4% and 12.9% on an accrual and cash basis, respectively. From a development standpoint our 405 Colorado project in Austin, Texas is now over 80% leased and our development projects continue to see increasing tenant activity. Turning to capital markets, we are excited to acquire a 20% interest in Cira Square with two high quality partners and control an 863,000 square foot property in University City. We funded our portion of the acquisition through the sale of a vacant land parcel located in Washington, DC. Our balance sheet and liquidity remain strong during the quarter and we continue to make excellent progress on our life science development initiatives.”



First Quarter 2022 Highlights


Financial Results

  • Net income allocated to common shareholders; $5.9 million, or $0.03 per diluted share.
  • Funds from Operations (FFO); $60.3 million, or $0.35 per diluted share.


Portfolio Results

  • Core Portfolio: 89.4% occupied and 92.4% leased.
  • New and renewal leases signed: 428,000 square feet.
  • Rental rate mark-to-market: Increased 20.4% on an accrual basis and 12.9% on a cash basis.
  • Same store net operating income: 0.8% on an accrual basis and 2.9% on a cash basis.



Transaction Activity

Joint Venture Activity

  • On March 17, 2022, we formed a joint venture with two institutional investors for the purpose of acquiring Cira Square for $383.0 million. Cira Square is an 863,000 square foot office property located at 2970 Market Street in Philadelphia, Pennsylvania and is 100% leased to a single tenant through August 2030. Our initial contribution was $28.6 million and we own a 20% common equity interest. At closing, the joint venture secured a $257.7 million mortgage loan. Brandywine will provide management and construction management services to the joint venture.

Disposition Activity

  • As previously announced, on January 20, 2022, we completed the sale two adjacent land parcels known as Gateway G & H in Richmond, Virginia for a gross sales price of $1.6 million. We received net cash proceeds of $1.4 million and recorded a gain on sale of $0.9 million during the first quarter of 2022.
  • On April 14, 2022, we completed the sale of a land parcel located at 25 M Street in Washington, DC for a gross sales price of $29.7 million. We received net cash proceeds of $28.6 million and recorded a gain on sale of $3.4 million during the second quarter of 2022.

Finance Activity

  • We had $156.0 million outstanding on our $600.0 million unsecured revolving credit facility as of March 31, 2022.
  • We had $39.3 million of cash and cash equivalents on-hand as of March 31, 2022.



Results for the Three Months Ended March 31, 2022

Net income allocated to common shares totaled $5.9 million, or $0.03 per diluted share, in the first quarter of 2022 compared to a net income allocated to common shares of $6.8 million, or $0.04 per diluted share in the first quarter of 2021.

FFO available to common shares and units in the first quarter of 2022 totaled $60.3 million, or $0.35 per diluted share, versus $60.2 million or $0.35 per diluted share in the first quarter of 2021. Our first quarter 2022 payout ratio ($0.19 common share distribution / $0.35 FFO per diluted share) was 54.3%.



Operating and Leasing Activity

In the first quarter of 2022, our Net Operating Income (NOI) excluding termination revenues and other income items increased 0.8% on an accrual basis and 2.9% on a cash basis for our 76 same store properties, which were 89.3% and 90.3% occupied on March 31, 2022 and March 31, 2021, respectively.

We leased approximately 428,000 square feet and commenced occupancy on 494,000 square feet during the first quarter of 2022.   The first quarter occupancy activity includes 382,000 square feet of renewals, 77,000 square feet of new leases and 35,000 square feet of tenant expansions. We executed on an additional 389,000 square feet of new leases scheduled to commence subsequent to March 31, 2022.   We achieved a 56% tenant retention ratio in our core portfolio with negative absorption of (252,000) square feet during the first quarter of 2022, however, we have relet 144,000 square feet, or 57%, of the negative absorption at an 11% cash mark-to-market with occupancies to occur later this year. First quarter rental rate growth increased 20.4% as our renewal rental rates increased 21.3% and our new lease/expansion rental rates increased 7.3%, all on an accrual basis.

At March 31, 2022, our core portfolio of 77 properties comprising 13.0 million square feet was 89.4% occupied and, as of April 19, 2022, we are now 92.4% leased (reflecting new leases commencing after March 31, 2022).



Distributions

On February 23, 2022, our Board of Trustees declared a quarterly cash dividend of $0.19 per common share and OP Unit that was paid on April 20, 2022 to holders of record on April 6, 2022.



2022 Earnings and FFO Guidance

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are maintaining our 2022 earnings per share guidance of $0.17 – $0.25 per diluted share and maintaining our 2022 FFO guidance of $1.37 – $1.45 per diluted share. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2022 FFO and earnings per diluted share:

Guidance for 2022   Range
             
Earnings per diluted share allocated to common shareholders   $0.17   to   $0.25
Plus:  real estate depreciation, amortization   1.20       1.20
FFO per diluted share   $1.37   to   $1.45
             

Our 2022 FFO key assumptions include:

  • Speculative Revenue Target: $34.0 – $36.0 million, as of April 19, 2022, $29.4 million achieved from a leasing plan of 2.0 million square feet, 1.4 million square feet achieved;
  • Year-end Core Occupancy Range: 91-93%;
  • Year-end Core Leased Range: 92-94%;
  • Tenant Retention Rate Range: 58-60%;
  • Rental Rate Growth (accrual): 16-18%;
  • Rental Rate Growth (cash): 8-10%;
  • Same Store (accrual) NOI Range: 0-2%;
  • Same Store (cash) NOI Range: 0-2%:
    • Timing of occupancy and free rent on 200,000 square feet in Philadelphia CBD would equate to an increase in our range by approximately 3.0%;
  • Property Acquisition Activity: None;
  • Property Sales Activity: None;
  • Joint Venture Activity: Acquired a 20% common equity interest in 2970 Market Street, Philadelphia, PA;
  • Development Starts: Three starts;
  • Financing Activity: Refinance our $600 million unsecured line of credit and our $250 million term loan;
  • Share Buyback Activity: None;
  • Annual earnings and FFO per diluted share based on 174.0 million fully diluted weighted average common shares.


About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Austin and Washington, D.C. markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 168 properties and 23.1 million square feet as of March 31, 2022 which excludes assets held for sale. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.


Conference Call and Audio Webcast

We will hold our first quarter conference call on Thursday, April 21, 2022 at 9:00 a.m. Eastern. The conference call can be accessed by dialing 1-833-818-6810 and providing conference ID: 5163677. Beginning two hours after the conference call, a taped replay of the call can be accessed through Friday, May 6, 2022, by calling 1-855-859-2056 and entering access code 5163677. The conference call can also be accessed via a webcast on our website at www.brandywinerealty.com 


Looking Ahead – Second Quarter 2022 Conference Call

We expect to release our second quarter 2022 earnings on Monday, July 25, 2022, after the market close and will host our second quarter 2022 conference call on Tuesday, July 26, 2022 at 9:00 a.m. Eastern. We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.


Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. Because such statements involve known and unknown risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements, including our 2022 guidance, are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and not within our control. Such risks, uncertainties and contingencies include, among others: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on our financial condition, results of operations and cash flows and those of our tenants as well as on the economy and real estate and financial markets; reduced demand for office space and pricing pressures, including from competitors, that could limit our ability to lease space or set rents at expected levels or that could lead to declines in rent; uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital; the effect of inflation and interest rate fluctuations, including on the costs of our planned debt refinancing; the potential loss or bankruptcy of tenants or the inability of tenants to meet their rent and other lease obligations; risks of acquisitions and dispositions, including unexpected liabilities and integration costs; delays in completing, and cost overruns incurred in connection with, our developments and redevelopments; disagreements with joint venture partners; unanticipated operating and capital costs; uninsured casualty losses and our ability to obtain adequate insurance, including coverage for terrorist acts; asset impairments; our dependence upon certain geographic markets; changes in governmental regulations, tax laws and rates and similar matters; unexpected costs of REIT qualification compliance; and costs and disruptions as the result of a cybersecurity incident or other technology disruption. The declaration and payment of future dividends (both timing and amount) is subject to the determination of our Board of Trustees, in its sole discretion, after considering various factors, including our financial condition, historical and forecast operating results, and available cash flow, as well as any applicable laws and contractual covenants and any other relevant factors. Our Board’s practice regarding declaration of dividends may be modified at any time and from time to time. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2021. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.



Non-GAAP Supplemental Financial Measures

We compute our financial results in accordance with generally accepted accounting principles (GAAP). Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance. At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.



Funds from Operations (FFO)

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us. NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and non-controlling interests. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders. We generally consider FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.



Net Operating Income (NOI)

NOI (accrual basis) is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions. We believe NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property’s results of operations. We use NOI internally to evaluate the performance of our operating segments and to make decisions about resource allocations. We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.



Same Store Properties

In our analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us through the end of the latest period presented as Same Store Properties. Same Store Properties therefore exclude properties placed in-service, acquired, repositioned, held for sale or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired for that property to be included in Same Store Properties.



Core Portfolio

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.

BRANDYWINE REALTY TRUST

CONSOLIDATED BALANCE SHEETS


(unaudited and in thousands)

    March 31, 2022   December 31, 2021
ASSETS        
Real estate investments:        
Operating properties   $ 3,517,995     $ 3,472,602  
Accumulated depreciation     (980,860 )     (957,450 )
Right of use asset – operating leases, net     20,150       20,313  
Operating real estate investments, net     2,557,285       2,535,465  
Construction-in-progress     283,323       277,237  
Land held for development     94,411       114,604  
Prepaid leasehold interests in land held for development, net     27,762       27,762  
Total real estate investments, net     2,962,781       2,955,068  
Assets held for sale, net     25,205       562  
Cash and cash equivalents     39,306       27,463  
Accounts receivable     14,214       11,875  
Accrued rent receivable, net of allowance of $4,081 and $4,133 as of March 31, 2022 and December 31, 2021, respectively     170,275       167,210  
Investment in unconsolidated real estate ventures     461,389       435,506  
Deferred costs, net     87,652       86,862  
Intangible assets, net     25,580       28,556  
Other assets     148,493       133,094  
Total assets   $ 3,934,895     $ 3,846,196  
LIABILITIES AND BENEFICIARIES’ EQUITY        
Unsecured credit facility   $ 156,000     $ 23,000  
Unsecured term loan, net     249,738       249,608  
Unsecured senior notes, net     1,580,845       1,580,978  
Accounts payable and accrued expenses     130,073       150,151  
Distributions payable     32,814       32,765  
Deferred income, gains and rent     24,758       23,849  
Intangible liabilities, net     12,085       12,981  
Lease liability – operating leases     23,014       22,962  
Other liabilities     49,705       48,683  
Total liabilities   $ 2,259,032     $ 2,144,977  
Brandywine Realty Trust’s Equity:        
Common Shares of Brandywine Realty Trust’s beneficial interest, $0.01 par value; shares authorized 400,000,000; 171,383,912 and 171,126,257 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     1,714       1,712  
Additional paid-in-capital     3,147,231       3,146,786  
Deferred compensation payable in common shares     19,386       18,491  
Common shares in grantor trust, 1,185,541 and 1,169,703 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     (19,386 )     (18,491 )
Cumulative earnings     1,128,465       1,122,372  
Accumulated other comprehensive income (loss)     1,920       (2,020 )
Cumulative distributions     (2,611,294 )     (2,578,583 )
Total Brandywine Realty Trust’s equity     1,668,036       1,690,267  
Noncontrolling interests     7,827       10,952  
Total beneficiaries’ equity   $ 1,675,863     $ 1,701,219  
Total liabilities and beneficiaries’ equity   $ 3,934,895     $ 3,846,196  
 
 

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited, in thousands, except share and per share data)

  Three Months Ended March 31,
    2022       2021  
Revenue      
Rents $ 115,901     $ 113,484  
Third party management fees, labor reimbursement and leasing   5,108       6,651  
Other   6,496       634  
Total revenue   127,505       120,769  
Operating expenses      
Property operating expenses   31,548       28,935  
Real estate taxes   13,813       14,761  
Third party management expenses   2,557       2,978  
Depreciation and amortization   43,782       40,343  
General and administrative expenses   10,000       6,584  
Total operating expenses   101,700       93,601  
Gain on sale of real estate      
Net gain on disposition of real estate         74  
Net gain on sale of undepreciated real estate   897       1,993  
Total gain on sale of real estate   897       2,067  
Operating income   26,702       29,235  
Other income (expense):      
Interest and investment income   440       1,674  
Interest expense   (15,742 )     (16,293 )
Interest expense – amortization of deferred financing costs   (709 )     (709 )
Equity in loss of unconsolidated real estate ventures   (4,563 )     (6,924 )
Net income before income taxes   6,128       6,983  
Income tax provision   (27 )     (19 )
Net income   6,101       6,964  
Net income attributable to noncontrolling interests   (8 )     (43 )
Net income attributable to Brandywine Realty Trust   6,093       6,921  
Nonforfeitable dividends allocated to unvested restricted shareholders   (148 )     (146 )
Net income attributable to Common Shareholders of Brandywine Realty Trust $ 5,945     $ 6,775  
PER SHARE DATA      
Basic income per Common Share $ 0.03     $ 0.04  
Basic weighted average shares outstanding   171,294,949       170,624,741  
Diluted income per Common Share $ 0.03     $ 0.04  
Diluted weighted average shares outstanding   172,888,994       171,636,120  
 
 

BRANDYWINE REALTY TRUST

FUNDS FROM OPERATIONS


(unaudited, in thousands, except share and per share data)

  Three Months Ended March 31,
    2022       2021  
Reconciliation of Net Income to Funds from Operations:      
Net income attributable to common shareholders $ 5,945     $ 6,775  
Add (deduct):      
Net income attributable to noncontrolling interests – LP units   10       44  
Nonforfeitable dividends allocated to unvested restricted shareholders   148       146  
Net gain on disposition of real estate         (74 )
Depreciation and amortization:      
Real property   36,162       31,534  
Leasing costs including acquired intangibles   6,994       8,280  
Company’s share of unconsolidated real estate ventures   11,295       13,731  
Partners’ share of consolidated real estate ventures   (5 )     (5 )
Funds from operations $ 60,549     $ 60,431  
Funds from operations allocable to unvested restricted shareholders   (238 )     (213 )
Funds from operations available to common share and unit holders (FFO) $ 60,311     $ 60,218  
FFO per share – fully diluted $ 0.35     $ 0.35  
Weighted-average shares/units outstanding – fully diluted   173,521,633       172,617,754  
Distributions paid per common share $ 0.19     $ 0.19  
FFO payout ratio (distributions paid per common share/FFO per diluted share)   54.3 %     54.3 %
 
 

BRANDYWINE REALTY TRUST

SAME STORE OPERATIONS – 1st QUARTER


(unaudited and in thousands)


  

Of the 81 properties owned by the Company as of March 31, 2022, a total of 76 properties (“Same Store Properties”) containing an aggregate of 12.9 million net rentable square feet were owned for the entire three months ended March 31, 2022 and 2021. As of March 31, 2022, one property was recently completed/acquired, and four properties were in development/redevelopment. Average occupancy for the Same Store Properties was 89.9% and 90.4% during the three-month periods ended March 31, 2022 and 2021, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

    Three Months Ended March 31,
      2022       2021  
Revenue        
Rents   $ 110,846     $ 110,989  
Other     304       213  
Total revenue     111,150       111,202  
Operating expenses        
Property operating expenses     28,896       28,084  
Real estate taxes     13,164       13,102  
Net operating income   $ 69,090     $ 70,016  
Net operating income – percentage change over prior year     (1.3) %        
Net operating income, excluding other items   $ 68,328     $ 67,770  
Net operating income, excluding other items – percentage change over prior year     0.8 %    
Net operating income   $ 69,090     $ 70,016  
Straight line rents & other     (2,831 )     (4,179 )
Above/below market rent amortization     (875 )     (1,351 )
Amortization of tenant inducements     188       193  
Non-cash ground rent expense     204       208  
Cash – Net operating income   $ 65,776     $ 64,887  
Cash – Net operating income – percentage change over prior year     1.4 %    
Cash – Net operating income, excluding other items   $ 64,325     $ 62,502  
Cash – Net operating income, excluding other items – percentage change over prior year     2.9 %    
    Three Months Ended March 31,
      2022       2021  
Net income:   $ 6,101     $ 6,964  
Add/(deduct):        
Interest income     (440 )     (1,674 )
Interest expense     15,742       16,293  
Interest expense – amortization of deferred financing costs     709       709  
Equity in loss of unconsolidated real estate ventures     4,563       6,924  
Net gain on disposition of real estate           (74 )
Net gain on sale of undepreciated real estate     (897 )     (1,993 )
Depreciation and amortization     43,782       40,343  
General & administrative expenses     10,000       6,584  
Income tax provision     27       19  
Consolidated net operating income     79,587       74,095  
Less: Net operating income of non-same store properties and elimination of non-property specific operations     (10,497 )     (4,079 )
Same store net operating income   $ 69,090     $ 70,016  
 

Company / Investor Contact:

 Tom Wirth
 EVP & CFO
 610-832-7434
 [email protected]



Codiak Presents New Preclinical Data Supporting Development of a Broadly Protective Pan Beta-Coronavirus Vaccine

– Engineered exosome vaccine construct generated durable, comprehensive immunity in vivo

CAMBRIDGE, Mass., April 20, 2022 (GLOBE NEWSWIRE) — Codiak BioSciences, Inc. (Nasdaq: CDAK), a clinical-stage biopharmaceutical company focused on pioneering the development of exosome-based candidates as a new class of medicines, today announced new preclinical data from its pan beta-coronavirus vaccine program, which aims to protect against all SARS-CoV-2 variants of concern and potential future strains belonging to the beta-coronavirus family. The data, which are being presented today at the World Vaccine Congress 2022 in Washington, D.C., demonstrate the potential for a novel engineered exosome-based vaccine candidate derived from Codiak’s exoVACC™ platform to induce cross-neutralizing antibody protection against multiple strains of coronaviruses and an antigen-specific and comprehensive immune response against structurally conserved regions of multiple coronavirus variants.

“As the pandemic continues to play out across the world, the need for a single vaccine that can protect against multiple coronavirus variants – those that we know and those we don’t – is increasingly clear,” said Sriram Sathyanarayanan, Ph.D., Chief Scientific Officer, Codiak. “Our exosome engineering platform gives us the unique ability to construct vaccine candidates with intentionally-chosen components to induce a precise, broad and lasting immune response. Our lead candidate incorporates multiple distinct features to accomplish this goal, notably the use of receptor binding domains from multiple coronaviruses to provide broad antibody protection and the integration of highly conserved T cell epitopes that elicit powerful T cell responses resistant to mutational pressure. These data provide further evidence of preclinical proof of concept and we look forward to advancing this program toward IND-enabling studies this year.”

Codiak’s proprietary and modular vaccine platform leverages engineered exosomes – naturally occurring, extracellular nanoparticle vesicles – to precisely control antigen display on the surface or in the lumen, in order to deliver antigens, adjuvants and immunomodulators simultaneously and selectively to antigen presenting cells to maximize immune response. The pan beta-coronavirus vaccine construct, developed in collaboration with the Ragon Institute of MIT, MGH and Harvard, carries the receptor-binding domain (RBD) protein of both SARS-CoV-1 and SARS-CoV-2 at high density on the surface of the exosome, combined with structurally constrained, highly conserved T cell antigens expressed in the lumen, and stable loading of a STING agonist as an adjuvant. This design closely resembles the natural viral structures and is amendable to multiple routes of administration, including subcutaneous, intramuscular and intranasal.

Preclinical data presented late last year demonstrate that Codiak’s vaccine candidate stimulates a comprehensive immune response conferring both antibody and T cell-mediated immunity, a neutralizing antibody response against multiple SARS-CoV-2 variants and the ability to illicit antigen-specific T cell responses against structurally conserved regions of all known coronavirus variants of concern. Key conclusions from additional preclinical studies presented today include:

  • Evidence of a durable antibody response lasting at least eight months in a mouse model;
  • Induction of mucosal immune responses in vaccinated mice that were equivalent to responses in humans vaccinated with an mRNA vaccine and induction of lung resident memory CD4 and CD8 T cells when administered intranasally;
  • Generation of cross-protective neutralizing antibodies in response to vaccination with an exosome carrying the RBD proteins for both SARS-CoV1 and SARS-CoV-2; and
  • Upon challenge with the Delta variant, 100% survival and minimal evidence of infection in lung tissues.

The T cell epitopes used in the vaccine constructs were identified by Gaurav Gaiha, M.D., principal investigator at the Ragon Institute. These structural pieces of the virus are believed to be invariant, lending the candidate the ability to generate CD8 T cell responses that are potentially protective against all beta-coronaviruses, and, in preclinical models of SARS-CoV-2 infection, served to further enhance the overall immune response.

“Exosomes are well-suited to be harnessed as vaccines because of the role they naturally play in the immune system and the opportunity they provide for a modular approach to vaccine design that has distinct advantages over other delivery vehicles,” said Dr. Gaiha. “Our collaboration with Codiak since the early days of the pandemic has been quite productive and we are pleased to see these data, which show in preclinical models that the addition of the T cell epitopes generates a stronger and more complete immune response than the same construct without them.”

About the exoVACC™ Platform

exoVACC is Codiak’s proprietary and modular vaccine system that utilizes the unique properties of exosomes to deliver antigens and adjuvants simultaneously and selectively to the same antigen presenting cells (APCs), driving an integrated innate, cellular and/or antibody-mediated immune response. Utilizing its engEx™ engineering platform, Codiak can incorporate within a single exosome multiple complex antigens and adjuvants, as well as cell-targeting ligands and immune co-stimulatory molecules to potentially enhance and shape an immune response. Codiak is developing this platform for potential applications in infectious disease and oncology.

About Codiak BioSciences

Codiak is a clinical-stage biopharmaceutical company focused on pioneering the development of exosome-based therapeutics, a new class of medicines with the potential to transform the treatment of a wide spectrum of diseases with high unmet medical need. By leveraging the biology of exosomes as natural intercellular transfer mechanisms, Codiak has developed its proprietary engEx Platform to expand upon the innate properties of exosomes to design, engineer and manufacture novel exosome therapeutic candidates. Codiak has utilized its engEx Platform to generate a deep pipeline of engineered exosomes aimed at treating a broad range of disease areas, spanning oncology, neuro-oncology, infectious disease, and rare disease.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, among other things, statements concerning the Company’s development of an exosome-based vaccine for SARS-CoV-2, as well as statements concerning the development and therapeutic potential of the Company’s engEx Platform, engEx product candidates and engineered exosomes generally, including future development plans, regulatory filings, releases of data and timing with respect thereto. Any forward-looking statements in this press release are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. For a discussion of these risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in Codiak’s Annual Report on Form 10-K for the year ended December 31, 2021, and in Codiak’s subsequent filings with the Securities and Exchange Commission, as well as discussions of potential risks, uncertainties and other important factors in Codiak’s subsequent filings with the Securities and Exchange Commission. All information in this press release is current as of the date of this report, and Codiak undertakes no duty to update this information unless required by law.



Investor Contact:
Christopher Taylor
VP, Investor Relations and Corporate Communications
T: 617-949-4220
E: [email protected]

Media Contact:
Lindy Devereux
Scient PR
T: 646-515-5730
E: [email protected]

Core & Main Elects Bhavani Amirthalingam to Board

Core & Main Elects Bhavani Amirthalingam to Board

ST. LOUIS–(BUSINESS WIRE)–Core & Main, Inc.(NYSE: CNM), a leading specialized distributor of water, wastewater, storm drainage, fire protection products and related services, has elected Bhavani Amirthalingam to its board of directors. Amirthalingam serves as the senior vice president and chief digital information officer for Ameren Corporation, driving digital strategy and transformation to deliver a differentiated customer and co-worker experience, leveraging emerging technologies to enable the grid of the future while driving operational excellence at scale.

“Bhavani has effectively established a reputation for herself as an industry leader with a vast and impressive track record that spans global manufacturers, tech giants and utility companies,” said Jim Berges, chairman of the board of directors of Core & Main, partner in private investment firm Clayton, Dubilier & Rice, and former vice chairman and president of Emerson Electric Co. “Her experience in guiding transformative customer-centric innovation is a tremendous asset to this board of directors.”

“Bhavani is the kind of visionary any board would be honored to have,” said Steve LeClair, chief executive officer of Core & Main. “Her work in the information technology and digital sector is second to none. We look forward to the innovative and transformative energy she will bring to our mission and vision as a company.”

Prior to joining Ameren in 2018, Amirthalingam spent her previous 23 years in the industry with Schneider Electric and World Wide Technology. She earned her bachelor’s degree in computer science from the University of Madras, an MBA from the S.P. Jain Institute of Management & Research and pursued extended learning opportunities through Harvard Business School among others. Amirthalingam serves as a member of the Forbes Technology Council and chair of the Electric Power Research Institute (EPRI) Artificial Intelligence (AI) Committee. She is also a member of World 50, a private community for CEOs and other C-level executives at globally-respected organizations to discover better ideas, share valuable experiences and build relationships that make a lasting impact.

In addition to her new work on the Core & Main board of directors, Amirthalingam also serves on the boards of the St. Louis Symphony Orchestra and St. Louis Ballet Company.

“As someone who has built the foundation of their career on large scale customer-centric transformation and growth, I could not have joined Core & Main’s board of directors at a better time. They are looking ahead to the future of waterworks and fire protection infrastructure, and I am honored to be a part of that conversation,” said Amirthalingam.

Amirthalingam becomes the sixth independent director on Core & Main’s 11-member board. In addition to Amirthalingam, independent directors include Jim Castellano, Dennis Gipson, Orv Kimbrough, Kathy Mazzarella and Meg Newman.

About Core & Main

Based in St. Louis, Core & Main is a leading specialized distributor of water, wastewater, storm drainage and fire protection products, and related services, to municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets nationwide. With approximately 300 locations, the company provides its customers local expertise backed by a national supply chain. Core & Main’s 4,100 associates are committed to helping their communities thrive with safe and sustainable infrastructure. Visit coreandmain.com to learn more.

Investor Relations:

Robyn Bradbury, 314-995-9116

[email protected]

Media Relations:

Jennifer Noonan, 314-750-9670

[email protected]

KEYWORDS: Missouri United States North America

INDUSTRY KEYWORDS: Other Energy Utilities Environment Other Construction & Property Energy Construction & Property Urban Planning

MEDIA:

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Hostess Brands, Inc. to Report First Quarter 2022 Financial Results on May 4, 2022

Hostess Brands, Inc. to Report First Quarter 2022 Financial Results on May 4, 2022

LENEXA, Kan.–(BUSINESS WIRE)–
Hostess Brands, Inc. (Nasdaq: TWNK) (the “Company”), a leading sweet snacks company, announced today it will report results for the first quarter ended March 31 on Wednesday, May 4, 2022 after market close. The earnings release will be issued at approximately 4:00 p.m. Eastern Time accompanied by a presentation.

The Company will host a conference call to discuss these results at 4:30 p.m. Eastern Time. Investors interested in participating in the live call can dial 877-451-6152 from the U.S. and 201-389-0879 internationally. A telephone replay will be available approximately two hours after the call concludes through Wednesday, May 18, 2022, by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13728809.

There will also be a simultaneous, live webcast available on the Investor Relations section of the Company’s website at www.hostessbrands.com. The webcast will be archived for 30 days.

About Hostess Brands, Inc.

Hostess Brands, Inc. is a leading sweet snacks company focused on developing, manufacturing, marketing, selling and distributing products in North America under the Hostess® and Voortman® brands. The Company produces a variety of new and classic treats including iconic Hostess® Donettes®, Twinkies®, CupCakes, Ding Dongs® and Zingers®, as well as a variety of Voortman® cookies and wafers. For more information about Hostess Brands, Inc., please visit www.hostessbrands.com.

Investors, please contact:

Amit Sharma

816-701-4662

[email protected]

Media, please contact:

Lauren Bettenga

952-797-6839

[email protected]

KEYWORDS: United States North America Kansas

INDUSTRY KEYWORDS: Food/Beverage Retail

MEDIA:

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Kaiser Aluminum Corporation Reports First Quarter 2022 Financial Results


First Quarter 2022 Highlights:

  • Net Sales $949 Million; Value Added Revenue $370 Million
  • Net Income $8 Million; Net Income per Diluted Share $0.51
  • Adjusted Net Income $11 Million; Adjusted Earnings per Diluted Share $0.66
  • Adjusted EBITDA $55 Million; Adjusted EBITDA Margin 14.8%
  • Strong Demand for General Engineering and Packaging; Aerospace Recovery Continues As Expected
  • Higher Freight Costs of ~$6 Million Due to Rail and Port Shipping Constraints
  • Lingering Supply Chain Issues Related to Metal and Magnesium Continue to Impact Results

FRANKLIN, Tenn., April 20, 2022 (GLOBE NEWSWIRE) — Kaiser Aluminum Corporation (NASDAQ:KALU), a leading producer of semi-fabricated specialty aluminum products, serving customers worldwide with highly-engineered solutions for aerospace and high-strength, packaging, general engineering, custom automotive and other industrial applications, today announced first quarter 2022 results.


Management Summary

First quarter 2022 results reflect continued strength in demand for the Company’s general engineering and packaging applications, and steadily improving demand for its aerospace/high strength applications, while the Company’s automotive business remains muted due to the continued shortage of semiconductor chips that have limited North American vehicle production. Value added revenue increased approximately 17% on a sequential basis as pricing initiatives, including contained metal and commodity surcharges implemented in the latter part of 2021, have largely mitigated the impact of rising metal, freight, energy and other costs to date. However, costs are continuing to increase. In addition, the Company incurred approximately $6 million of incremental freight costs during the quarter due to shipping constraints and transportation disruptions that have now abated. Adjusted EBITDA increased approximately 20% on a sequential basis, reflecting the higher value added revenue and improving efficiencies, although lingering supply chain issues regarding magnesium availability and timely metal supply continued to impact operations at the Company’s Warrick facility during the quarter.

“While we continue to navigate through an inflationary cost environment and manage supply chain challenges, we remain confident in the initiatives we are taking to further improve manufacturing efficiencies and operating performance,” said Keith A. Harvey, President and Chief Executive Officer. “As we look to the remainder of the year, we reiterate our outlook and continue to anticipate a year-over-year increase in value added revenue of 20% to 25% and a consolidated adjusted EBITDA margin of 17% to 20% for the full year 2022. In line with the outlook provided for our full year major maintenance spending, we expect second quarter major maintenance expense to be approximately $8 million to $10 million higher than the first quarter due to the timing of projects planned at several facilities,” concluded Mr. Harvey.

First Quarter 2022 Consolidated Results
(Unaudited)*

(In millions of dollars, except shipments, realized price and per share amounts)

    Quarterly  
    1Q22     4Q21     3Q21     2Q21     1Q21  
Shipments (millions of lbs.)     335       333       315       337       137  
                                         
Net sales   $ 949     $ 806     $ 751     $ 741     $ 324  
Less hedged cost of alloyed metal1     (578 )     (490 )     (445 )     (423 )     (152 )
Value added revenue   $ 370     $ 316     $ 305     $ 318     $ 172  
                                         
Realized price per pound ($/lb.)                                        
Net sales   $ 2.83     $ 2.42     $ 2.38     $ 2.20     $ 2.37  
Less hedged cost of alloyed metal     (1.73 )     (1.47 )     (1.41 )     (1.26 )     (1.12 )
Value added revenue   $ 1.10     $ 0.95     $ 0.97     $ 0.94     $ 1.25  
                                         
As reported                                        
Operating income   $ 25     $ 17     $ 20     $ 11     $ 17  
Net income (loss)   $ 8     $ 2     $ (2 )   $ (22 )   $ 5  
Net income (loss) per share, diluted2   $ 0.51     $ 0.11     $ (0.14 )   $ (1.42 )   $ 0.28  
                                         
Adjusted3                                        
Operating income   $ 28     $ 19     $ 26     $ 33     $ 24  
EBITDA4   $ 55     $ 46     $ 50     $ 59     $ 38  
EBITDA margin5     14.8 %     14.5 %     16.5 %     18.5 %     21.8 %
Net income   $ 11     $ 3     $ 9     $ 16     $ 10  
EPS, diluted2   $ 0.66     $ 0.20     $ 0.57     $ 1.00     $ 0.64  

1 Hedged cost of alloyed metal is our Midwest transaction price of aluminum plus the price of alloying elements plus any realized gains and/or losses on settled hedges, related to the metal sold in the referenced period.
2 Diluted shares for EPS are calculated using the treasury stock method.
3 Adjusted numbers exclude non-run-rate items. For all Adjusted numbers and EBITDA refer to Reconciliation of Non-GAAP Measures.
4 Adjusted EBITDA = Consolidated operating income, excluding operating non-run-rate items, plus Depreciation and amortization.
5 Adjusted EBITDA margin = Adjusted EBITDA as a percent of Value Added Revenue.
* Please refer to GAAP financial statements.
  Totals may not sum due to rounding.


First Quarter 2022

Net sales for the first quarter 2022 increased to $949 million compared to $324 million in the prior year period, reflecting a 145% increase in shipments and a 19% increase in average selling price per pound. The increase in average selling price reflected an approximately 12% decrease in value added revenue per pound and a 54% increase in underlying contained metal costs.

Value added revenue for the first quarter 2022 increased 116% to $370 million from $172 million in the prior year period reflecting $146 million of value added revenue from the packaging business acquired at the end of the first quarter 2021. Value added revenue for aerospace/high strength applications increased 35% to $95 million on a 26% increase in shipments and on a sequential basis value added revenue increased 16% on a 7% increase in shipments reflecting strong demand for defense and business jet applications, and a steady recovery in demand for commercial aerospace applications. Value added revenue for general engineering applications increased approximately 43% to $102 million on a 23% increase in shipments and on a sequential basis, value added revenue increased 40% on a 23% increase in shipments reflecting continued strength in underlying demand, restocking in the service center supply chain and improved pricing. Value added revenue for automotive extrusions decreased 15% to $24 million on a 14% decrease in shipments and on a sequential basis was relatively unchanged as the shortage of semiconductor chips continued to impact North American production levels.

Adjusted EBITDA of $55 million in the first quarter 2022 increased $18 million or 47% compared to the prior year period. Adjusted EBITDA in the first quarter 2022 reflected the addition of the packaging business and improvement in aerospace/high strength and general engineering applications, partially offset by higher costs, supply chain challenges and operating inefficiencies as previously noted. Adjusted EBITDA as a percentage of value added revenue was 14.8% in the first quarter 2022 as compared to 21.8% in the prior year period.

Reported operating income for the first quarter 2022 was approximately $25 million. Adjusting for approximately $2 million of non-run-rate charges, operating income for the first quarter 2022 was approximately $28 million, compared to $24 million in the prior year period. In addition, adjusted operating income in the first quarter 2022 reflected approximately $3 million of amortization expense resulting from purchase accounting adjustments related to the Warrick packaging operation and $11 million of depreciation expense.

Reported net income for the first quarter 2022 was $8 million, or $0.51 income per diluted share, compared to net income and income per diluted share of $5 million and $0.28, respectively, for the prior year period. Excluding the impact of non-run-rate items, adjusted net income was $11 million, for the first quarter 2022, comparable to the prior year period. Adjusted earnings per diluted share were $0.66 and $0.64 for the first quarter 2022 and 2021, respectively.


Cash Flow and Liquidity

Adjusted EBITDA of $55 million reported in the first quarter 2022 funded approximately $28 million of capital investments, $11 million of interest payments and $13 million of cash returned to shareholders through quarterly dividends.

As of March 31, 2022, the Company had cash and cash equivalents of approximately $261 million, and borrowing availability under the Company’s undrawn revolving credit facility of approximately $363 million providing total liquidity of $624 million. In early April 2022, the Company proactively amended its revolving credit facility, increasing the commitment from $375 million to $575 million and extending the maturity date to April 2027. The Company’s total availability under the amended revolving credit facility was $563 million, providing total liquidity of $824 million. There were no borrowings under the revolving credit facility during the quarter and the facility remains undrawn.


Conference Call

Kaiser Aluminum Corporation will host a conference call on Thursday, April 21, 2022, at 10:00am (Pacific Time); 12:00pm (Central Time); 1:00pm (Eastern Time), to discuss first quarter 2022 results. To participate, the conference call can be directly accessed from the U.S. and Canada at (866) 374-5140, and accessed internationally at (404) 400-0571. The conference call ID number is 17782023. A link to the simultaneous webcast can be accessed on the Company’s website at http://investors.kaiseraluminum.com/events.cfm. A copy of a presentation will be available for download prior to the call and an audio archive will be available on the Company’s website following the call.


Company Description

Kaiser Aluminum Corporation, headquartered in Franklin, Tenn., is a leading producer of semi-fabricated specialty aluminum products, serving customers worldwide with highly-engineered solutions for aerospace and high-strength, packaging, general engineering, custom automotive, and other industrial applications. The Company’s North American facilities produce value-added plate, sheet, coil, extrusions, rod, bar, tube, and wire products, adhering to traditions of quality, innovation, and service that have been key components of the culture since the Company was founded in 1946. The Company’s stock is included in the Russell 2000® index and the S&P Small Cap 600® index.


Available Information

For more information, please visit the Company’s website at www.kaiseraluminum.com. The website includes a section for investor relations under which the Company provides notifications of news or announcements regarding its financial performance, including Securities and Exchange Commission (SEC) filings, investor events, and earnings and other press releases. In addition, all Company filings submitted to the SEC are available through a link to the section of the SEC’s website at www.sec.gov, which includes: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Proxy Statements for the Company’s annual stockholders’ meetings, and other information statements as filed with the SEC. In addition, the Company provides a webcast of its quarterly earnings calls and certain events in which management participates or hosts with members of the investment community.


Non-GAAP Financial Measures

This earnings release contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flow of the Company. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying tables.

The non-GAAP financial measures used within this earnings release are value added revenue, adjusted operating income, adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share which exclude non-run-rate items and ratios related thereto. As more fully described in these reports, “non-run-rate” items are items that, while they may occur from period to period, are particularly material to results, impact costs primarily as a result of external market factors and may not occur in future periods if the same level of underlying performance were to occur. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors. Reconciliations of certain forward looking non-GAAP financial measures to comparable GAAP measures are not provided because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted or provided without unreasonable effort.


Forward-Looking Statements

This press release contains statements which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to it at the time such statements are made. Kaiser Aluminum cautions that any forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. These factors include: (a) the effectiveness of management’s strategies and decisions, including strategic investments, capital spending strategies processes and countermeasures implemented to address operational and supply chain challenges, and the execution of those strategies; (b) general economic and business conditions, including the impact of the global outbreak of Coronavirus Disease 2019 and governmental and other actions taken in response, cyclicality, reshoring, supply interruptions, including the most recent disruptions resulting from the supply demand imbalances in the magnesium and silicon markets, and other conditions that impact demand drivers in the aerospace/high strength, automotive, general engineering, packaging and other end markets the Company serves; (c) the Company’s ability to participate in mature and anticipated new automotive programs expected to launch in the future and successfully launch new automotive programs; (d) changes or shifts in defense spending due to competing national priorities; (e) pricing, market conditions and the Company’s ability to effectively execute its commercial and labor strategies, pass through cost increases, including the institution of surcharges, and flex costs in response to changing economic conditions and inflation; (f) developments in technology; (g) the impact of the Company’s future earnings, cash flows, financial condition, capital requirements and other factors on its financial strength and flexibility; (h) new or modified statutory or regulatory requirements; (i) the successful integration of the acquired operations and technologies continue to drive innovative solutions and further advance its capabilities; and (j) other risk factors summarized in the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Form 10-K for the year ended December 31, 2021. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.


Investor Relations and Public Relations Contact:
 
Melinda C. Ellsworth  
Kaiser Aluminum Corporation  
(949) 614-1757  

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)

(1)

    Quarter Ended March 31,  
    2022     2021  
    (In millions of dollars, except share and per share amounts)  
Net sales   $ 948.8     $ 324.0  
Costs and expenses:                
Cost of products sold, excluding depreciation and amortization and other items     865.9       262.5  
Depreciation and amortization     27.5       13.5  
Selling, general, administrative, research and development     30.2       31.8  
Restructuring costs (benefit)           (0.7 )
Total costs and expenses     923.6       307.1  
Operating income     25.2       16.9  
Other expense:                
Interest expense     (12.2 )     (12.3 )
Other expense, net     (1.6 )     (0.4 )
Income before income taxes     11.4       4.2  
Income tax (provision) benefit     (3.3 )     0.3  
Net income   $ 8.1     $ 4.5  
Net income per common share:                
Basic   $ 0.51     $ 0.28  
Diluted2   $ 0.51     $ 0.28  
Weighted-average number of common shares outstanding (in thousands):                
Basic     15,866       15,805  
Diluted2     16,038       15,987  

1 Please refer to the Company’s Form 10-Q for the quarter ended March 31, 2022 for detail regarding the items in the table.
2 Diluted shares for EPS are calculated using the treasury stock method.

   
   

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(1)

    As of March 31, 2022     As of December 31, 2021  
    (In millions of dollars, except share and per

share amounts)
 
ASSETS                
Current assets:                
Cash and cash equivalents   $ 261.0     $ 303.2  
Receivables:                
Trade receivables, net     432.2       332.7  
Other     50.6       53.0  
Contract assets     74.9       63.2  
Inventories     431.5       404.6  
Prepaid expenses and other current assets     71.2       48.7  
Total current assets     1,321.4       1,205.4  
Property, plant and equipment, net     960.2       955.2  
Operating lease assets     44.9       46.2  
Deferred tax assets, net     3.2       3.4  
Intangible assets, net     64.2       67.7  
Goodwill     39.3       39.3  
Other assets     108.2       105.2  
Total   $ 2,541.4     $ 2,422.4  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable     442.8     $ 351.4  
Accrued salaries, wages and related expenses     40.9       46.9  
Other accrued liabilities     70.9       58.4  
Total current liabilities     554.6       456.7  
Long-term portion of operating lease liabilities     40.5       40.8  
Pension and other postretirement benefits     88.7       92.5  
Net liabilities of Salaried VEBA     20.3       20.6  
Deferred tax liabilities     17.9       10.5  
Long-term liabilities     74.4       72.5  
Long-term debt     1,036.8       1,036.3  
Total liabilities     1,833.2       1,729.9  
Commitments and contingencies                
Stockholders’ equity:                
Preferred stock, 5,000,000 shares authorized at both March 31, 2022 and
December 31, 2021; no shares were issued and outstanding at
March 31, 2022 and December 31, 2021
           
Common stock, par value $0.01, 90,000,000 shares authorized at both
March 31, 2022 and December 31, 2021; 22,739,402 shares issued and
15,904,116 shares outstanding at March 31, 2022; 22,700,404 shares
issued and 15,865,118 shares outstanding at December 31, 2021
    0.2       0.2  
Additional paid in capital     1,081.0       1,078.9  
Retained earnings     88.6       93.0  
Treasury stock, at cost, 6,835,286 shares at both March 31, 2022 and
December 31, 2021
    (475.9 )     (475.9 )
Accumulated other comprehensive income (loss)     14.3       (3.7 )
Total stockholders’ equity     708.2       692.5  
Total   $ 2,541.4     $ 2,422.4  

1 Please refer to the Company’s Form 10-Q for the quarter ended March 31, 2022 for detail regarding the items in the table.




Reconciliation of Non-GAAP Measures – Consolidated


(Unaudited)

(In millions of dollars, except share and per share amounts)

  Quarterly  
  1Q22     4Q21     3Q21     2Q21     1Q21  
GAAP net income (loss) $ 8.1     $ 1.7     $ (2.3 )   $ (22.4 )   $ 4.5  
Interest expense   12.2       12.3       12.5       12.4       12.3  
Other expense, net   1.6       0.7       1.2       36.6       0.4  
Income tax provision (benefit)   3.3       1.9       8.4       (15.5 )     (0.3 )
GAAP operating income   25.2       16.6       19.8       11.1       16.9  
Mark-to-market (gain) loss1   (1.0 )     (0.7 )     2.0       0.4       (0.3 )
Restructuring costs (benefits)                     (0.1 )     (0.7 )
Acquisition costs2   0.6       5.8       3.8       7.4       11.0  
Other operating NRR loss (gain)3,4   2.7       (3.0 )     (0.1 )     14.1       (2.9 )
Operating income, excluding operating NRR items   27.5       18.7       25.5       32.9       24.0  
Depreciation and amortization   27.5       27.3       24.9       25.8       13.5  
Adjusted EBITDA5 $ 55.0     $ 46.0     $ 50.4     $ 58.7     $ 37.5  
                                       
GAAP net income (loss) $ 8.1     $ 1.7     $ (2.3 )   $ (22.4 )   $ 4.5  
Operating NRR Items   2.3       2.1       5.7       21.8       7.1  
Non-operating NRR Items6   0.9       0.6       0.5       36.4       0.6  
Tax impact of above NRR Items   (0.7 )     (1.2 )     5.3       (19.9 )     (1.9 )
Adjusted net income $ 10.6     $ 3.2     $ 9.2     $ 15.9     $ 10.3  
                                       
Net income (loss) per share, diluted7 $ 0.51     $ 0.11     $ (0.14 )   $ (1.42 )   $ 0.28  
Adjusted earnings per diluted share7 $ 0.66     $ 0.20     $ 0.57     $ 1.00     $ 0.64  

1 Mark-to-market (gain) loss on derivative instruments represents: (i) the reversal of mark-to-market (gain) loss on hedges entered into prior to the adoption of Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and settled in the periods presented above and (ii) (gain) loss on non-designated commodity hedges. Adjusted EBITDA reflects the realized (gain) loss of such settlements.
2 Acquisition costs are non-run-rate acquisition-related transaction costs, which include professional fees, as well non-cash hedging charges recorded in connection with our Warrick acquisition.
3 NRR is an abbreviation for Non-Run-Rate; NRR items are pre-tax.
4 Other operating NRR items primarily represent the impact of adjustments to plant-level LIFO and environmental expenses.
5 Adjusted EBITDA = Consolidated operating income, excluding operating NRR items, plus Depreciation and amortization.
6 Non-operating NRR items represents the impact of non-cash net periodic benefit cost related to the Salaried VEBA excluding service cost and debt refinancing charges.
7 Diluted shares for EPS are calculated using the treasury stock method.



PROSPERITY BANCSHARES, INC.® ANNOUNCES COMMON STOCK DIVIDEND

PR Newswire


HOUSTON
, April 20, 2022 /PRNewswire/ — Prosperity Bancshares, Inc.® (NYSE: PB) today announced that its Board of Directors declared a quarterly common stock dividend of $0.52 per share for the second quarter of 2022, payable July 1, 2022, to shareholders of record as of June 15, 2022.

Prosperity Bancshares, Inc.®

As of December 31, 2021, Prosperity Bancshares, Inc.® is a $37.834 billionHouston, Texas based regional financial holding company providing personal banking services and investments to consumers and small to medium sized businesses throughout Texas and Oklahoma.

Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses, and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and cash management.

Prosperity currently operates 273 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 63 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, MidlandOdessa and Abilene; 16 in the Bryan/College Station area, 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity’s management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may,” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity’s possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity’s future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity’s loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity’s future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity’s operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on the Bank’s operating income, financial condition and cash flows. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity’s securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; the effect, impact potential duration or other implications of the COVID-19 pandemic; and weather.  These and various other factors are discussed in Prosperity Bancshares’ Annual Report on Form 10-K for the year ended December 31, 2021 and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission (“SEC”). Copies of the SEC filings for Prosperity Bancshares may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

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SOURCE Prosperity Bancshares, Inc.

Steel Dynamics Reports Record First Quarter 2022 Results

PR Newswire


FORT WAYNE, Ind.
, April 20, 2022 /PRNewswire/ —

First Quarter 2022 Performance Highlights:

  • Record steel shipments of 2.9 million tons
  • Record net sales of $5.6 billion
  • Record operating income of $1.5 billion and net income of $1.1 billion
  • Record steel fabrication operating income of $467 million and near record shipments of 210,000 tons
  • Record cash flow from operations of $819 million and record adjusted EBITDA of $1.6 billion
  • Increased first quarter 2022 cash dividends by 31 percent and repurchased $389 million of the company’s common stock, representing 3 percent of its outstanding shares

Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced first quarter 2022 financial results. The company reported first quarter 2022 net sales of $5.6 billion and net income of $1.1 billion, or $5.71 per diluted share. Excluding the impact from the following item, the company’s first quarter 2022 adjusted net income was $1.2 billion, or $6.02 per diluted share.

  • Costs of approximately $84 million, or $0.31 per diluted share (net of capitalized interest), associated with the continued startup of the company’s Sinton Texas Flat Roll Steel Mill growth investment.

Comparatively, the company’s sequential fourth quarter 2021 earnings were $5.49 per diluted share, with adjusted earnings of $5.78 per diluted share excluding additional performance-based companywide compensation of approximately $0.08 per diluted share, a contribution to the company’s charitable foundation of $0.04 per diluted share, and costs of $0.18 per diluted share (net of capitalized interest), associated with construction and startup of the Texas Flat Roll Steel Mill. Prior year first quarter earnings were $2.03 per diluted share, with adjusted earnings of $2.10 per diluted share, excluding costs of $0.07 per diluted share (net of capitalized interest), associated with construction of the company’s Texas Flat Roll Steel Mill.

“The team delivered another tremendous performance, achieving record quarterly operating and financial performance, including record sales, operating income, cash flow from operations, and adjusted EBITDA,” said Mark D. Millett, Chairman, President, and Chief Executive Officer. “Our first quarter 2022 operating income was $1.5 billion, with adjusted EBITDA of $1.6 billion. This record performance displays the power of our highly diversified, value-added, circular manufacturing model — as the strength in our steel fabrication operations more than offset moderation in our flat roll steel business, as realized hot roll coil selling values declined from peak 2021 levels during the quarter. Flat roll steel prices have recently firmed with extending delivery lead-times, related to strong demand dynamics, coupled with higher input costs and global flat roll steel supply disruptions. The automotive, construction, and industrial sectors continue to lead steel demand. We are also starting to see a significant increase in steel demand from the energy sector.

“We also achieved record cash flow from operations of $819 million in the first quarter 2022, while at the same time increasing shareholder distributions, investing in growth, and supporting increased working capital needs based on market dynamics and increased volume,” said Millett. “In February, we increased our quarterly cash dividend by 31 percent and authorized an additional $1.25 billion share repurchase program, reflecting our confidence in the consistency and strength of cash generation capabilities, in alignment with our growth initiatives.

“The teams achieved strong operating and financial results across all of our operating platforms,” continued Millett. “First quarter operating income from our steel and metals recycling operations remained very strong at $1.2 billion and $48 million, respectively. Earnings from our steel fabrication operations soared to $467 million, more than the entirety of full-year 2021 record results, based on significantly higher realized selling values and a continued strong construction demand environment. Steel joist and deck pricing and order activity continues to be robust, supporting our continued record order backlog with higher forward pricing.”  

First Quarter 2022 Comments

First quarter 2022 operating income for the company’s steel operations remained strong at $1.2 billion, but lower than record sequential fourth quarter results of $1.4 billion. The decline in earnings resulted from metal spread compression within the company’s flat roll operations, as hot roll coil pricing moderated. Alternatively, pricing and metal spreads expanded within the company’s long product steel businesses. The first quarter 2022 average external product selling price for the company’s steel operations decreased just over $100 sequentially to $1,561 per ton. The average ferrous scrap cost per ton melted at the company’s steel mills decreased $16 sequentially to $474 per ton.

First quarter operating income from the company’s metals recycling operations remained strong at $48 million slightly above fourth quarter sequential results, based on improved metal spread offsetting modestly lower shipments.

The company’s steel fabrication operations reported record operating income of $467 million in the first quarter 2022, almost double sequential fourth quarter results, as significantly higher selling values and strong shipments, more than offset marginally higher steel input costs. The non-residential construction sector remains strong, resulting in a record order backlog with record forward-pricing for the company’s steel fabrication platform. The company anticipates this momentum to continue through 2022 based on these dynamics.

Based on the company’s differentiated business model and highly variable cost structure, the company generated cash flow from operations of $819 million during the quarter. The company also invested $159 million in capital investments, paid cash dividends of $51 million, and repurchased $389 million of its outstanding common stock representing three percent of its outstanding stock, while maintaining strong liquidity of $2.4 billion as of March 31, 2022.

Outlook

“We remain confident that market conditions are in place for domestic steel consumption to continue to be strong this year and into 2023,” said Millett. “Order entry activity continues to be robust across all of our businesses. We believe steel prices will remain supported by strong demand, balanced customer inventory levels, and elevated raw material costs. We believe the automotive, industrial, and energy sectors will remain solid steel consumers this year, with demand from the construction sector at the lead. Our steel fabrication operations order backlog remains at record volume and forward pricing levels. This combined with continued robust order activity and broad customer optimism, supports strong overall demand dynamics for the construction industry. We believe this overall momentum will continue and that our second quarter 2022 consolidated earnings should represent another record quarterly performance.

“We believe there are strong drivers for our continued growth and remain in a position of strength. Operations continue to ramp at our new Sinton Flat Roll Steel Mill. The team has done a great job with commissioning and starting up the steel mill. Based on our current forecast, we estimate 2022 shipments to be in the range of 1.5 million tons. We are also investing approximately $500 million to build four additional value-added flat roll steel coating lines comprised of two paint lines and two galvanizing lines with Galvalume® coating capability, a set of which will be located onsite at our new Texas steel mill, providing our new Texas steel mill with the same diversification and higher-margin product capabilities as our two existing flat roll steel divisions. The other two lines will be placed at our Heartland Flat Roll Division located in Terre Haute, Indiana to support growing coated flat roll steel demand in the region and to further increase the diversification and cash generation capacity of our existing Midwest operations. Based on current plans, we believe these four lines will begin operating mid-2023.

“Our commitment is to the health and safety of our teams, families, and communities, while meeting the current and future needs of our customers. Our culture and business model continue to positively differentiate our performance from the rest of the industry. We are competitively positioned and focused to generate long-term sustainable value,” concluded Millett.

Conference Call and Webcast

Steel Dynamics, Inc. will hold a conference call to discuss first quarter 2022 operating and financial results on Thursday, April 21, 2022, at 9:00 a.m. Eastern Daylight Time. You may access the call and find dial-in information on the Investors section of the company’s website at www.steeldynamics.com.  A replay of the call will be available on our website until 11:59 p.m. Eastern Daylight Time on April 27, 2022.

About Steel Dynamics, Inc.

Steel Dynamics is one of the largest domestic steel producers and metals recyclers in the United States, based on estimated annual steelmaking and metals recycling capability, with facilities located throughout the United States, and in Mexico. Steel Dynamics produces steel products, including hot roll, cold roll, and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections and steel joists and deck. In addition, the company produces liquid pig iron and processes and sells ferrous and nonferrous scrap.

Note Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that Adjusted Net Income, Adjusted Diluted Earnings Per Share, EBITDA and Adjusted EBITDA, non-GAAP financial measures, provide additional meaningful information regarding the company’s performance and financial strength. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the company’s reported results prepared in accordance with GAAP. In addition, because not all companies use identical calculations, Adjusted Net Income, Adjusted Diluted Earnings Per Share, EBITDA and Adjusted EBITDA included in this release may not be comparable to similarly titled measures of other companies.

Forward-Looking Statements

This press release contains some predictive statements about future events, including statements related to conditions in domestic or global economies, conditions in steel and recycled metals marketplaces, Steel Dynamics’ revenues, costs of purchased materials, future profitability and earnings, and the operation of new, existing or planned facilities. These statements, which we generally precede or accompany by such typical conditional words as “anticipate”, “intend”, “believe”, “estimate”, “plan”, “seek”, “project”, or “expect”, or by the words “may”, “will”, or “should”, are intended to be made as “forward-looking,” subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not a guarantee of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) domestic and global economic factors; (2) global steelmaking overcapacity and imports of steel, together with increased scrap prices; (3) pandemics, epidemics, widespread illness or other health issues, such as the COVID-19 pandemic; (4) the cyclical nature of the steel industry and the industries we serve; (5) volatility and major fluctuations in prices and availability of scrap metal, scrap substitutes, and our potential inability to pass higher costs on to our customers; (6) cost and availability of electricity, natural gas, oil, or other energy resources are subject to volatile market conditions; (7) increased environmental, greenhouse gas emissions and sustainability considerations or regulations; (8) compliance with and changes in environmental and remediation requirements; (9) significant price and other forms of competition from other steel producers, scrap processors and alternative materials; (10) availability of an adequate source of supply of scrap for our metals recycling operations; (11) cybersecurity threats and risks to the security of our sensitive data and information technology; (12) the implementation of our growth strategy; (13) litigation and legal compliance, (14) unexpected equipment downtime or shutdowns; (15) governmental agencies may refuse to grant or renew some of our licenses and permits required to operate our businesses; (16) our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; and (17) the impact of impairment charges.

More specifically, refer to Steel Dynamics’ more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors, in our quarterly reports on Form 10-Q, or in other reports which we file with the Securities and Exchange Commission. These are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on the Steel Dynamics website, www.steeldynamics.com under “Investors — SEC Filings”. 

 


Steel Dynamics, Inc.


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


(in thousands, except per share data)



Three Months Ended



Three Months



March 31,



Ended


2022


2021



Dec. 31, 2021

Net sales

$

5,569,902

$

3,544,597

$

5,310,657

Costs of goods sold

3,787,389

2,744,331

3,548,820



      Gross profit

1,782,513

800,266

1,761,837

Selling, general and administrative expenses

152,015

149,781

182,290

Profit sharing

128,469

48,848

143,243

Amortization of intangible assets

7,162

7,438

7,178



      Operating income

1,494,867

594,199

1,429,126

Interest expense, net of capitalized interest

16,669

17,269

12,338

Other expense (income), net

20,468

10,071

7,940



      Income before income taxes

1,457,730

566,859

1,408,848

Income tax expense

350,376

128,104

313,151



      Net income

1,107,354

438,755

1,095,697

Net income attributable to noncontrolling interests

(3,423)

(8,248)

(5,192)



      Net income attributable to Steel Dynamics, Inc.

$

1,103,931

$

430,507

$

1,090,505



Basic earnings per share attributable to



   Steel Dynamics, Inc. stockholders

$

5.74

$

2.04

$

5.53

Weighted average common shares outstanding

192,158

211,015

197,346



Diluted earnings per share attributable to



   Steel Dynamics, Inc. stockholders, including the



   effect of assumed conversions when dilutive

$

5.71

$

2.03

$

5.49

Weighted average common shares

   and share equivalents outstanding

193,241

212,254

198,794



Dividends declared per share

$

0.34

$

0.26

$

0.26

 


Steel Dynamics, Inc.


CONSOLIDATED BALANCE SHEETS


(in thousands)


March 31,


December 31,


Assets


2022


2021

(unaudited)


Current assets

   Cash and equivalents

$

1,189,528

$

1,243,868

   Accounts receivable, net

2,363,668

1,916,434

   Inventories

3,516,815

3,531,130

   Other current assets

79,624

209,591

      Total current assets

7,149,635

6,901,023


Property, plant and equipment, net

4,827,962

4,751,430


Intangible assets, net

288,183

295,345


Goodwill

453,088

453,835


Other assets

337,769

129,601


      Total assets

$

13,056,637

$

12,531,234


Liabilities and Equity


Current liabilities

   Accounts payable

$

1,213,558

$

1,280,555

   Income taxes payable

229,360

13,746

   Accrued expenses

579,338

835,894

   Current maturities of long-term debt

68,390

97,174

      Total current liabilities

2,090,646

2,227,369


Long-term debt

3,010,109

3,008,702


Deferred income taxes

856,790

854,905


Other liabilities

120,918

120,087


      Total liabilities

6,078,463

6,211,063


Commitments and contingencies


Redeemable noncontrolling interests

227,914

211,414


Equity

   Common stock

649

649

   Treasury stock, at cost

(3,050,497)

(2,674,267)

   Additional paid-in capital

1,204,023

1,218,933

   Retained earnings

8,800,883

7,761,417

   Accumulated other comprehensive income

9,296

(2,091)

      Total Steel Dynamics, Inc. equity

6,964,354

6,304,641

   Noncontrolling interests

(214,094)

(195,884)


      Total equity

6,750,260

6,108,757


      Total liabilities and equity

$

13,056,637

$

12,531,234

 


Steel Dynamics,

Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(
in thousands
)


Three Months Ended


March 31,


2022


2021


Operating activities:

   Net income

$

1,107,354

$

438,755

   Adjustments to reconcile net income to net cash provided by

      operating activities:

      Depreciation and amortization

87,546

86,919

      Equity-based compensation

16,519

17,040

      Deferred income taxes

2,632

66,744

      Other adjustments

11,157

(662)

      Changes in certain assets and liabilities:

         Accounts receivable

(447,234)

(394,545)

         Inventories

14,315

(374,588)

         Other assets

19,402

5,828

         Accounts payable

(75,971)

360,681

         Income taxes receivable/payable

341,905

59,593

         Accrued expenses

(258,657)

(3,574)

      Net cash provided by operating activities

818,968

262,191


Investing activities:

   Purchases of property, plant and equipment

(159,330)

(309,863)

Investments in unconsolidated affiliates

(222,480)

   Other investing activities

410

390

      Net cash used in investing activities

(381,400)

(309,473)


Financing activities:

   Issuance of current and long-term debt

319,779

297,441

   Repayment of current and long-term debt

(349,272)

(304,284)

   Dividends paid

(50,699)

(52,729)

   Purchase of treasury stock

(389,190)

   Other financing activities

(22,527)

(16,598)

      Net cash used in financing activities

(491,909)

(76,170)

Decrease in cash, cash equivalents, and restricted cash

(54,341)

(123,452)

Cash, cash equivalents, and restricted cash at beginning of period

1,249,369

1,374,122


Cash, cash equivalents, and restricted cash at end of period

$

1,195,028

$

1,250,670


Supplemental disclosure information:

   Cash paid for interest

$

9,168

$

11,315

   Cash paid for income taxes, net

$

9,948

$

2,142

 


Steel Dynamics, Inc.


SUPPLEMENTAL INFORMATION


(
dollars in thousands
)


First Quarter


2022


2021


Q4 2021



External Net Sales

   Steel

$

3,762,496

$

2,510,684

3,786,221

   Steel Fabrication

929,981

256,985

680,006

   Metals Recycling

579,625

470,007

550,674

   Other

297,800

306,921

293,756

Consolidated Net Sales

$

5,569,902

$

3,544,597

5,310,657



Operating Income

   Steel

$

1,166,945

$

641,439

1,366,880

   Steel Fabrication

466,916

9,895

237,639

   Metals Recycling

48,146

53,933

43,581

1,682,007

705,267

1,648,100

   Non-cash amortization of intangible assets

(7,162)

(7,438)

(7,178)

   Profit sharing expense

(128,469)

(48,848)

(143,243)

   Non-segment operations

(51,509)

(54,782)

(68,553)

Consolidated Operating Income

$

1,494,867

$

594,199

1,429,126



Adjusted EBITDA

      Net income

$

1,107,354

$

438,755

1,095,697

      Income taxes

350,376

128,104

313,151

      Net interest expense

16,055

16,815

11,999

      Depreciation

78,790

77,888

77,438

      Amortization of intangible assets

7,162

7,438

7,178

      Noncontrolling interest (a)

(3,272)

(8,422)

(5,242)

EBITDA

1,556,465

660,578

1,500,221

      Non-cash adjustments

         Unrealized (gains) losses

300

(6,852)

(2,856)

         Inventory valuation

11,125

109

6,101

         Equity-based compensation

19,794

10,210

20,948

Adjusted EBITDA

$

1,587,684

$

664,045

1,524,414



Other Operating Information

   Steel

      Average external sales price (Per ton) (b)

$

1,561

$

1,041

1,662

      Average ferrous cost (Per ton melted) (c)

$

474

$

372

490

      Flat Roll shipments

         Butler, Columbus, and Sinton Flat Roll divisions

1,551,845

1,496,531

1,416,890

         Steel Processing divisions (d)

411,653

422,850

404,733

      Long Product shipments

         Structural and Rail Division

466,821

478,687

460,651

         Engineered Bar Products Division

226,053

200,628

199,546

         Roanoke Bar Division

143,619

136,420

132,318

         Steel of West Virginia

94,837

87,158

86,381

                                      Total Shipments (Tons)

2,894,828

2,822,274

2,700,519

                            External Shipments (Tons) (b)

2,409,763

2,410,817

2,277,865

                              Steel Mill Production (Tons)

2,508,184

2,476,939

2,395,437

   Metals Recycling

      Nonferrous shipments (000’s of pounds)

260,890

280,809

274,479

      Ferrous shipments (Gross tons)

1,265,222

1,395,843

1,275,062

            External ferrous shipments (Gross tons)


437,228


437,182


434,335

   Steel Fabrication

      Average sales price (Per ton)

$

4,424

$

1,406

3,325

   Shipments (Tons)

210,237

184,243

204,497


(a)   Net of income tax expense (benefit) on noncontrolling interests.


(b)   Represents all steel operations


(c)   Represents ferrous cost per ton melted at our electric arc furnace steel mills


(d)   Includes Heartland, The Techs, and United Steel Supply operations

 

 

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SOURCE Steel Dynamics, Inc.

Mirati Therapeutics to Report First Quarter 2022 Financial Results and Recent Corporate Updates

PR Newswire


SAN DIEGO
, April 20, 2022 /PRNewswire/ — Mirati Therapeutics, Inc. (NASDAQ: MRTX), a clinical-stage targeted oncology company, will announce financial results for the first quarter of 2022 along with recent corporate updates on May 4, 2022. During a conference call at 4:30 p.m. ET / 1:30 p.m. PT on May 4, company executives will provide company updates and review financial results.

Investors and the general public are invited to listen to a live webcast of the call at the “Investors and Media” section on Mirati.com or by dialing the U.S. toll free +1 313-209-4906 or international +1 800-406-5356, confirmation code: 6391007. A replay of the call will be available approximately 2 hours after the event has ended at the same website.

About Mirati Therapeutics, Inc.  

Mirati Therapeutics, Inc. is a clinical-stage biotechnology company whose mission is to discover, design and deliver breakthrough therapies to transform the lives of patients with cancer and their loved ones. The company is relentlessly focused on bringing forward therapies that address areas of high unmet need, including lung cancer, and advancing a pipeline of novel therapeutics targeting the genetic and immunological drivers of cancer. Unified for patients, Mirati’s vision is to unlock the science behind the promise of a life beyond cancer. For more information about Mirati, visit us at Mirati.com or follow us on Twitter, LinkedIn and Facebook.

Forward Looking Statements

This press release contains forward-looking statements regarding the business of Mirati Therapeutics, Inc. (“Mirati”). Any statement describing Mirati’s goals, expectations, financial or other projections, intentions or beliefs, development plans and the commercial potential of Mirati’s drug development pipeline, including without limitation adagrasib (MRTX849), sitravatinib, MRTX1133, MRTX1719 and MRTX0902 is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to risks and uncertainties, particularly those challenges inherent in the process of discovering, developing and commercialization of new drug products that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs.

Mirati’s forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward looking statements. Although Mirati’s forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Mirati. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Mirati’s programs are described in additional detail in Mirati’s quarterly reports on Form 10-Q and annual reports on Form 10-K, which are on file with the U.S. Securities and Exchange Commission (the “SEC”) available at the SEC’s Internet site (www.sec.gov). Mirati assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law.

Mirati Contacts

Investor Relations: [email protected]
Media Relations: [email protected]

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SOURCE Mirati Therapeutics, Inc.