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PHILADELPHIA, April 19, 2021 /PRNewswire/ — PREIT (NYSE: PEI), a leading operator of distinctive real estate in high barrier-to-entry markets, today provided an update on collections and activity and its improving liquidity position.

Collections
The Company reports continued sequential improvement in collection levels and recouping deferred rents from prior periods.  During the first quarter of 2021, the Company received 119% of billed rents, compared to 112% and 99% in Q4 and Q3 2020, respectively. 

Liquidity
Improvement in collections and operations, generally, have generated a significantly improved liquidity profile.  Upon closing of our expanded credit facility, we put into place a $130 million revolving line of credit.  Of that, we had drawn $55 million, leaving $75 million of availability.  In returning to a positive cash flow profile with improved collections exceeding 100% of billed rents, we now have over $30 million of cash on hand, improving our current liquidity position to over $100 million.

“Our commitment to restoring a strong liquidity position is generating results.  It’s clear that there is pent-up appetite fueling consumer demand with half of comparable properties last week posting traffic results in excess of the same period in 2019,” said Joseph F. Coradino, Chairman and CEO of PREIT.  “The strong return of the customer coupled with our planned multifamily land sales is expected to form the basis for continued improvement in the Company’s balance sheet.”

About PREIT

PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages distinctive real estate in high barrier-to-entry markets at  the forefront of shaping consumer experiences through the built environment. PREIT’s robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in densely-populated, high barrier-to-entry markets with tremendous opportunity to create vibrant multi-use destinations. Additional information is available at www.preit.com or on Twitter or LinkedIn.

Forward Looking Statements

This press release contains certain forward-looking statements that can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “intend,” “may” or similar expressions. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current expectations and assumptions regarding our business, the economy and other future events and conditions and are based on currently available financial, economic and competitive data and our current business plans. Actual results could vary materially depending on risks, uncertainties and changes in circumstances that may affect our operations, markets, services, prices and other factors as discussed in the Risk Factors section of our other filings with the Securities and Exchange Commission. While we believe our assumptions are reasonable, we caution you against relying on any forward-looking statements as it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to achieve our forecasted revenue and pro forma leverage ratio and generate free cash flow to further reduce our indebtedness; our ability to manage our business through the impacts of the COVID-19 pandemic, a weakening of global economic and financial conditions, changes in governmental regulations and related compliance and litigation costs and the other factors listed in our SEC filings. Additionally, our business might be materially and adversely affected by changes in the retail and real estate industries, including consolidation and store closings, particularly among anchor tenants; current economic conditions, including the impact of the COVID-19 pandemic and the steps taken by governmental authorities and other third parties to reduce its spread, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions; our inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; our ability to maintain and increase property occupancy, sales and rental rates; increases in operating costs that cannot be passed on to tenants; the effects of online shopping and other uses of technology on our retail tenants; risks related to our development and redevelopment activities, including delays, cost overruns and our inability to reach projected occupancy or rental rates; acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and sales; our ability to sell properties that we seek to dispose of or our ability to obtain prices we seek; our substantial debt and the liquidation preference of our preferred shares and our high leverage ratio and our ability to remain in compliance with our financial covenants under our debt facilities; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all; our ability to raise capital, including through sales of properties or interests in properties and through the issuance of equity or equity-related securities if market conditions are favorable; and potential dilution from any capital raising transactions or other equity issuances.

Additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed herein, and in the sections entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020. We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

PREIT Contact:

Heather Crowell

EVP, Strategy and Communications
(215) 454-1241
[email protected] 

 

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SOURCE PREIT

SAN DIEGO, April 19, 2021 /PRNewswire/ — Building on the sustainability strategy it released last October and its pledge to reach net zero greenhouse gas (GHG) emissions by 2045, San Diego Gas & Electric (SDG&E) announced it is developing two hydrogen pilot projects, nearing completion of an additional battery storage facility and will break ground on another, and launching a vehicle-to-grid pilot program featuring six electric school buses, among other efforts.

“Getting to a net zero future is the moonshot challenge of our era and one that the SDG&E team fully embraces,” said SDG&E Chief Executive Officer Caroline Winn. “SDG&E has worked hard to align our investments with the climate objectives of local cities, the region and state and while there is a lot more work to be done, we are seeing many clean energy innovations emerge, and progress being made toward our mutual goal of a 100% clean energy future. While we’ll continue to evolve our efforts to reflect stakeholder feedback, regulatory changes, and technological breakthroughs, I believe we can get there…one project at a time.”

In partnership with local startups and organizations, SDG&E has advanced a number of hydrogen, energy storage, and electric vehicle charging infrastructure projects over the past year. (See fact sheet).

These projects illustrate some of the concrete steps SDG&E is taking to deliver on its sustainability commitments.

Hydrogen Innovations: SDG&E will begin construction this year on two hydrogen pilot projects that will test half a dozen use cases and anticipates putting them into service in 2022.

• The Borrego Springs Green Hydrogen Project will demonstrate hydrogen’s use as long-duration energy storage; a microgrid asset; and a resource for dispatch by the California Independent System Operator (CAISO) to support grid reliability.
• The Palomar Green Hydrogen Systems Project will demonstrate the blending of hydrogen with natural gas as fuel for an electric generator, as well as onsite production of green hydrogen for use as a cooling gas. Additionally, SDG&E will install its first hydrogen fueling station to support the first fuel cell vehicles in its fleet.
  

Energy Storage: Currently, SDG&E owns and operates 13 energy storage projects, totaling about 45 MW of energy storage. To maximize the use of renewable energy and enhance reliability, SDG&E expects to have a total of 135 MW of utility-owned energy storage integrated into the local with the addition of the following:

• Top Gun Energy Storage in Miramar area of San Diego(30MW/120MWh): Expected to be operational in June 2021.
• Kearny Energy Storage in the City of San Diego (20MW/80MWh): Breaking ground this month with completion expected in late summer/early fall 2021.
• Fallbrook Energy Storage in unincorporated North San Diego County (40MW/160MWh facility): Construction is expected to begin late 2021/early 2022.

Clean Transportation: In addition to expanding the EV charging network through multiple programs, SDG&E is striving to pioneer vehicle-to-grid (V2G) technology.

• 
  Vehicle-to-Grid Pilot Program
  
  : SDG&E anticipates breaking ground this month on the construction of bi-directional DC fast chargers at the Cajon Valley Union School District to support six electric buses.
• 
  Bringing Chargers to Parks and Beaches
  
  : SDG&E kicked off construction on the first project in its parks and beaches program, which will bring 140 chargers to 22 locations.
• 
  Power Your Drive for Fleets
  
  : In March, SDG&E energized the first EV chargers it installed as part of its medium and heavy-duty EV infrastructure program, which aims to serve at least 3,000 vehicles at 300 sites.

“The development and the implementation of clean technologies have already helped create thousands of high-quality jobs in our region,” said Cleantech San Diego President and CEO Jason Anderson. “This burgeoning sector is poised for continued growth, as more companies like SDG&E take the lead to drive innovations.”

“Clean air goes hand in hand with clean energy and clean transportation,” said Rita Redaelli, executive director of the American Lung Association in California – San Diego. “We are excited about the prospect of more electric cars, buses, and trucks on the road, as SDG&E scales up the charging network in our region.”

SDG&E’s climate pledge to achieve net zero emissions by 2045 covers all emissions (Scope 1, 2, and 3), which would eliminate not only its own direct emissions, but also those generated by customers.  Efforts are already underway, and the company will seek out more opportunities to collaborate with business and industry in the communities it serves.

“Our school district has benefitted greatly from the electrification of our school buses,” said Scott Buxbaum, assistant superintendent, business services, Cajon Valley Union School District.  “Working with SDG&E on the vehicle to grid pilot program, we will be able to take it a step further by providing energy from the batteries back to the electric grid, which we can use to benefit our community during times of high demand and explore ways to save money.”

“SDG&E’s announcement aligns with the Port of San Diego’s focus on environmental justice,” said Sandy Naranjo, National City’s representative on the Port of San Diego Board of Port Commissioners. “I’m also pleased that a working group with SDG&E and other key environmental and community stakeholders has been formed to explore how we can put words into action to further improve air quality and reduce greenhouse gas emissions on and around San Diego Bay and throughout our region.”

SDG&E is an innovative San Diego-based energy company that provides clean, safe and reliable energy to better the lives of the people it serves in San Diego and southern Orange counties. The company is committed to creating a sustainable future by providing its electricity from renewable sources; modernizing natural gas pipelines; accelerating the adoption of electric vehicles; supporting numerous non-profit partners; and, investing in innovative technologies to ensure the reliable operation of the region’s infrastructure for generations to come. SDG&E is a subsidiary of Sempra Energy (NYSE: SRE). For more information, visit SDGEnews.com or connect with SDG&E on Twitter (@SDGE), Instagram (@SDGE) and Facebook.

B-roll: https://www.dropbox.com/sh/mmy2l2asnoxilq5/AABXyE368J38UjpqfAHcO-gDa?dl=0
Fact sheet: www.sdge.com/sustainabilityfacts

 

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SOURCE SDG&E

Designated News Release
(in U.S. dollars unless otherwise noted)

TORONTO, April 19, 2021 /PRNewswire/ – Franco-Nevada has acquired 14.7% of Vale’s outstanding Participating Debentures (“Royalty Debentures”) from the Brazilian Development Bank (“BNDES”) and the Government of Brazil for $538M. The Royalty Debentures provide holders with life of mine net sales royalties on Vale’s Northern and Southeastern Iron Ore Systems and on certain copper and gold operations (together, the “Royalty”). This transaction provides royalty exposure to some of the world’s largest and most profitable integrated iron ore mines with reserve weighted mine lives of 30 years and potential for multiple additional decades through reserve growth. The Royalty covers a total of 15.6 thousand square kilometers of mineral properties held by Vale in Brazil, also offering exposure to a number of development properties. The Royalty currently generates an annualized pre-tax cash yield of 10% based on acquisition cost and the most recent semi-annual Royalty Debenture payment. The amount of production capacity subject to the Royalty is expected to grow by approximately +60% by 2026 which would imply an 8% yield on investment at that time, assuming consensus long term iron ore prices.

Franco-Nevada has also accumulated a 9.9% equity investment in Labrador Iron Ore Royalty Corporation (“LIORC”). The position was acquired over a number of years for a total investment of C$93M, representing an average cost of C$14.72/share, versus recent trading of approximately C$38/share. An investment in LIORC functions as a flow through of income from its royalty and equity interest in the Iron Ore Company of Canada’s (“IOC”) Carol Lake mine operated by Rio Tinto in Labrador. Reserves at Carol Lake are sufficient to sustain mining for 24 years and resources indicate potential for further multi-decade extensions. Since starting to accumulate the position, Franco-Nevada has recouped more than 95% of its original investment (inclusive of Q1 2021 dividends declared and to be paid April 26, 2021). Our LIORC investment is generating an annualized cash yield of 27% based on acquisition cost and the most recent dividend payment. Franco-Nevada has no intention of increasing the position at current prices.

Both investments provide exposure to mines producing high grade iron ore products that are preferred by steelmakers seeking to reduce CO2 and other emissions from their operations. The two transactions further diversify Franco-Nevada’s asset, geographic and operator mix.  Assuming the commodity prices used in Franco-Nevada’s five-year guidance and consensus iron ore prices, iron ore is expected to contribute between 5-6% of total revenues in 2021 and 4-5% in 2025. Franco-Nevada’s revenue mix is expected to remain greater than 80% precious metals through 2025.

“The Vale Royalty and the LIORC equity investments, along with our by-product precious metal streams from copper mines, provide a base of low-risk long-life cash flow. We believe the combination of this foundation with exposure to the exploration success and commodity price optionality of our gold royalties and streams and energy assets is a very attractive investment proposition,” commented Paul Brink, President and CEO.

$538 Million Vale Royalty Debenture Acquisition

Franco-Nevada acquired 57 million Royalty Debentures for $538 million on April 16, 2021. The acquisition represents 14.7% of the total issued Royalty Debentures. The acquisition was made through a secondary offering of Royalty Debentures held by BNDES and the Government of Brazil. The Royalty Debentures were issued in 1997 with the privatization of Vale to provide the existing shareholders exposure to future resource growth. The Royalty Debentures are economically equivalent to royalty interests with no maturity until the underlying mining rights are extinguished.

The Royalty terms, on a 100% basis, provide for a 1.8% (0.264% attributable) net sales royalty on (i) iron ore sales from the Northern System and (ii) approximately 70% of sales from the Southeastern System. Both systems are fully integrated, allowing strong margins and a low cost position.

• The Northern System covers Serra Sul (i.e. S11A-D), Serra Norte and Serra Leste and represents one of the most profitable mining complexes globally with long-life reserves and excellent potential for mine life extensions. The Northern System produced 192 Mt of premium +65% iron ore in 2020. Production capacity is expected to be 206 Mt in 2021 and to increase to 260 Mt long term through the approved expansion of Serra Sul and other growth projects, representing an increase of +26% over 2021 levels. Royalty payments from the Northern System commenced in 2H 2013.
• The Southeastern System is a key global producer of pellet feed and will start contributions to the Royalty once a cumulative sales threshold of 1.7 Bt of iron ore has been reached, expected during 2024. The Southeastern System is expected to increase capacity from reduced 2021 levels of 77 Mt to 101 Mt capacity in 2022. At this level of production, the Southeastern System is expected to increase attributable production to the Royalty by a further 35% once the threshold is met.

The Royalty also provides for a 2.5% (0.367% attributable) net sales royalty on certain copper and gold assets. The Royalty applies on a 50% basis (i.e. 1.25% of net sales) to Sossego, reflecting Vale’s ownership at the time of issuance. Additionally, the Royalty provides for a 1% (0.147% attributable) net sales royalty on all other minerals (covered mining rights include prospective deposits for other minerals including zinc, manganese, amongst others), subject to certain thresholds. The 1% (0.147% attributable) also applies to proceeds in the event of an underlying asset sale. In total, the Royalty covers 15.6 thousand square kilometers of prospective geology.

Royalty payments are made on a semi-annual basis on March 31st and September 30th of each year reflecting production in the preceding half calendar year period. The first payment for 1H 2021 will be payable to Franco-Nevada on September 30, 2021, making  the transaction effective as of January 1, 2021. Franco-Nevada will accrue the Royalty revenue quarterly with the revenue from the Royalty received by Franco-Nevada to be reflected as Other Mining Assets in our public disclosure and will be included in Franco-Nevada’s calculation of GEOs, consistent with the treatment of LIORC revenue. While production attributable to the Royalty is expected to increase through 2025, analyst consensus iron ore prices decline over that period.  As a result, Franco-Nevada expects to record between 25,000 and 35,000 GEOs in both 2021 and 2025 from the Royalty.

The transaction was financed with a combination of cash on hand and a draw on the Company’s $1B credit facility. Following the acquisition, Franco-Nevada has approximately $1.2B of available capital to complete additional transactions and continues to be in a net cash position.

Investment in Labrador Iron Ore Royalty Corporation

Franco-Nevada has accumulated holdings of 6.3M common shares of LIORC (9.9% of total issued). The investment in LIORC functions similar to a royalty given the flow through of revenue generated from LIORC’s underlying 7% gross overriding royalty interest, C$0.10 per tonne commission, and 15.1% equity interest in IOC’s Carol Lake mine, operated by Rio Tinto. LIORC normally pays cash dividends from net income derived from IOC to the maximum extent possible, while maintaining appropriate levels of working capital. Similar to Vale’s Northern and Southeastern Systems, IOC produces high grade +65% Fe iron ore concentrate for sale and pellets with a reserve-only 24-year mine life and a large mineral resource supporting further extensions. IOC has nominal capacity of 23 Mtpa (combined concentrate and pellets) with 2020 attributable royalty sales of 18.3 Mt and Rio Tinto has provided 2021 guidance of saleable production between 17.9 Mt and 20.4 Mt. IOC benefits from integrated infrastructure, including the mine, concentrator/pellet facilities, railway, and a port at Sept-Îles, Quebec. IOC has a long history as a supplier of high quality, low impurity, premium iron ore and pellets which has typically received premium prices from the European steel making industry. The expected contribution from the LIORC investment is already included in Franco-Nevada’s GEO guidance for 2021 and 2025, provided in March 2021.

Additional information on both investments is included in the Virtual Analyst Day presentation available on our website.

Revised 2021 Guidance and 5-Year Outlook

Reflecting the acquisition of the Royalty Debentures, Franco-Nevada now expects attributable royalty and stream sales in 2021 to total 580,000 to 615,000 GEOs from our Mining assets, an increase from 555,000 to 585,000 GEOs previously, and additional revenue of $115 to $135 million from our Energy assets. For 2021 guidance, silver, platinum, palladium and iron ore prices have been converted to GEOs using commodity prices of $1,750/oz Au, $25.00/oz Ag, $1,100/oz Pt, $2,200/oz Pd and $150/t Fe 65%. The WTI oil price and Henry Hub natural gas price are assumed to average $55 per barrel and $2.50 per mcf. We estimate depletion expense to be $265 to $300 million.

For its 5-year outlook, Franco-Nevada now expects its existing portfolio to produce between 630,000 and 660,000 GEOs by 2025, an increase from 600,000 to 630,000 GEOs, and additional revenue of $150 to $170 million from our Energy assets. The commodity price assumptions (excluding Fe 65% at $89/t) are the same as those used for our 2021 guidance and assume no other acquisitions other than the Condestable stream, Séguéla royalty and Royalty Debentures.

Statements regarding Vale’s and LIORC’s operational performance and expectations and Franco-Nevada’s 2021 guidance and 5-year outlook are based on public forecasts and other disclosure by the third-party owners and operators of our assets or on our assessment thereof including certain estimates based on such information.

Corporate Summary

Franco-Nevada Corporation is the leading gold-focused royalty and streaming company with the largest and most diversified portfolio of cash-flow producing assets.  Its business model provides investors with gold price and exploration optionality while limiting exposure to cost inflation.  Franco-Nevada uses its free cash flow to expand its portfolio and pay dividends.  It trades under the symbol FNV on both the Toronto and New York stock exchanges.  Franco-Nevada is the gold investment that works.

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995, respectively, which may include, but are not limited to, statements with respect to future events or future performance, management’s expectations regarding Franco-Nevada’s growth, results of operations, estimated future revenues, performance guidance, carrying value of assets, future dividends and requirements for additional capital, mineral reserve and mineral resource estimates, production estimates, production costs and revenue, future demand for and prices of commodities, expected mining sequences, business prospects and opportunities, the performance and plans of third party operators, audits being conducted by the Canada Revenue Agency (“CRA”), the expected exposure for current and future assessments and available remedies, the remedies relating to and consequences of the ruling of the Supreme Court of Panama in relation to the Cobre Panama project, the aggregate value of common shares which may be issued pursuant to the Franco-Nevada’s at-the-market equity program (the “ATM Program”), and the Company’s expected use of the net proceeds of the ATM Program, if any. In addition, statements (including data in tables) relating to reserves and resources and gold equivalent ounces (“GEOs”) are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such reserves and resources and GEOs will be realized. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budgets”, “potential for”, “scheduled”, “estimates”, “forecasts”, “predicts”, “projects”, “intends”, “targets”, “aims”, “anticipates” or “believes” or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Franco-Nevada to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual events or results to differ materially from any forward-looking statement, including, without limitation: the price at which common shares are sold in the ATM Program and the aggregate net proceeds received by the Company as a result of the ATM Program; fluctuations in the prices of the primary commodities that drive royalty and stream revenue (gold, platinum group metals, copper, nickel, uranium, silver, iron ore and oil and gas); fluctuations in the value of the Canadian and Australian dollar, Mexican peso, and any other currency in which revenue is generated, relative to the U.S. dollar; changes in national and local government legislation, including permitting and licensing regimes and taxation policies and the enforcement thereof; regulatory, political or economic developments in any of the countries where properties in which Franco-Nevada holds a royalty, stream or other interest are located or through which they are held; risks related to the operators of the properties in which Franco-Nevada holds a royalty, stream or other interest, including changes in the ownership and control of such operators; influence of macroeconomic developments; business opportunities that become available to, or are pursued by Franco-Nevada; reduced access to debt and equity capital; litigation; title, permit or license disputes related to interests on any of the properties in which Franco-Nevada holds a royalty, stream or other interest; whether or not the Company is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatment of offshore streams; excessive cost escalation as well as development, permitting, infrastructure, operating or technical difficulties on any of the properties in which Franco-Nevada holds a royalty, stream or other interest; access to sufficient pipeline capacity; actual mineral content may differ from the reserves and resources contained in technical reports; rate and timing of production differences from resource estimates, other technical reports and mine plans; risks and hazards associated with the business of development and mining on any of the properties in which Franco-Nevada holds a royalty, stream or other interest, including, but not limited to unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters, terrorism, civil unrest or an outbreak of contagious disease; the impact of the COVID-19 (coronavirus) pandemic; and the integration of acquired assets. The forward-looking statements contained in this press release are based upon assumptions management believes to be reasonable, including, without limitation: the ongoing operation of the properties in which Franco-Nevada holds a royalty, stream or other interest by the owners or operators of such properties in a manner consistent with past practice; the accuracy of public statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that underlie the asset portfolio; the Company’s ongoing income and assets relating to determination of its PFIC status; no material changes to existing tax treatment; the expected application of tax laws and regulations by taxation authorities; the expected assessment and outcome of any audit by any taxation authority; no adverse development in respect of any significant property in which Franco-Nevada holds a royalty, stream or other interest; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; integration of acquired assets; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended. However, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance. In addition, there can be no assurance as to the outcome of the ongoing audit by the CRA or the Company’s exposure as a result thereof. Franco-Nevada cannot assure investors that actual results will be consistent with these forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.

For information regarding Franco-Nevada’s 2021 and 2025 GEO guidance, please refer to Franco-Nevada’s most recent annual Management’s Discussion and Analysis filed with the Canadian securities regulatory authorities on www.sedar.com
 and filed with the SEC on www.sec.gov. For additional information with respect to risks, uncertainties and assumptions, please refer to Franco-Nevada’s most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com
 and Franco-Nevada’s most recent Annual Report filed on Form 40-F filed with the SEC on www.sec.gov
. The forward-looking statements herein are made as of the date of this press release only and Franco-Nevada does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable law.

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SOURCE Franco-Nevada Corporation

WATERBURY, Conn., April 19, 2021 /PRNewswire/ — Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $105.5 million, or $1.17 per diluted share, for the quarter ended March 31, 2021, compared to $36.0 million, or $0.39 per diluted share, for the quarter ended March 31, 2020. Earnings per diluted share would have been $1.25 for the quarter ended March 31, 2021, adjusting for $9.4 million ($6.9 million after tax) of charges related to strategic optimization initiatives.

“We continued to make meaningful progress on our strategic initiatives during a solid first quarter,” said John R. Ciulla, chairman and chief executive officer. “Our focus remains on delivering for our customers, communities, bankers and shareholders.”

Highlights for the first quarter of 2021:

• Revenue of $300.5 million.
• Loan growth of $0.4 billion, or 2.0 percent from a year ago, led by commercial and commercial real estate, which increased 7.9 percent.
• Originated $533.0 million of second round Paycheck Protection Program (PPP) loans.
• Results include a Current Expected Credit Loss (CECL) benefit of $25.8 million with a reserve decrease of $31.1 million compared to the prior quarter, resulting in an allowance coverage of 1.54 percent, or 1.64 percent excluding $1.3 billion of PPP loans.
• Deposit growth of $4.0 billion, or 16.2 percent from a year ago, with growth of $1.8 billion in demand deposits and $719.0 million in HSA deposits.
• Results include $9.4 million of charges related to strategic optimization initiatives.
• Net interest margin of 2.92 percent.
• Efficiency ratio (non-GAAP) of 58.5 percent.

“First quarter results were favorably impacted by positive credit trends and an improving economic outlook resulting in a meaningful release of loan reserve,” said Glenn MacInnes, executive vice president and chief financial officer. “While near term our liquidity position results in net interest margin compression, it along with our strong capital level positions us well for future growth.”

Line of Business performance compared to the first quarter of 2020

Effective January 1, 2021 Webster realigned certain of its business banking and investment services related operations from Retail Banking to Commercial Banking to deliver operational efficiencies and better serve its customers.  As a result $1.9 billion of loans, $2.2 billion of deposits, and $3.9 billion of assets under administration (off balance sheet) were moved from Retail Banking to Commercial Banking. Prior period results have been restated accordingly.

Commercial Banking

Webster’s Commercial Banking segment serves businesses that have more than $2 million of revenue through our business banking, middle market, asset-based lending, equipment finance, commercial real estate, sponsor finance, and treasury services business units. Additionally, our Wealth group provides wealth management solutions to business owners, operators, and consumers within our targeted markets and retail footprint. As of March 31, 2021, Commercial Banking had $14.4 billion in loans and leases and $8.4 billion in deposit balances.

Commercial Banking Operating Results:

Pre-tax, pre-provision net revenue increased $27.6 million to $102.4 million in the quarter as compared to prior year. Net interest income increased $24.5 million to $142.0 million, primarily driven by PPP loan fee accretion and growth in loans and deposits. Non-interest income increased $2.8 million to $25.2 million driven by higher loan related fees and trust and investment service fees. Non-interest expense decreased $0.4 million to $64.8 million.

HSA Bank

Webster’s HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits. Health savings accounts are distributed nationwide directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants and financial advisors. As of March 31, 2021, HSA Bank had $10.6 billion in total footings comprising $7.5 billion in deposit balances and $3.1 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

Pre-tax net revenue increased $0.9 million to $32.9 million in the quarter as compared to prior year. Net interest income decreased $0.6 million to $42.1 million, due to a decline in deposit spreads partially offset by a 10.7 percent growth in deposits.  Non-interest income increased $0.6 million to $27.0 million, due primarily to increases in investment and notional account fees. Non-interest expense decreased $0.8 million to $36.3 million, primarily due to reduced travel expenses.

Retail Banking

Retail Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Retail Banking is comprised of the Consumer Lending and Small Business Banking business units, as well as a distribution network consisting of 148 banking centers and 280 ATMs, a customer care center, and a full range of web and mobile-based banking services. As of March 31, 2021, Retail Banking had $6.9 billion in loans and $12.6 billion in deposit balances.

Retail Banking Operating Results:

Pre-tax, pre-provision net revenue increased $9.4 million to $28.8 million in the quarter as compared to prior year. Net interest income increased $7.6 million to $88.8 million, driven by PPP loan fee accretion and deposit growth, partially offset by lower consumer loan balances. Non-interest income decreased $2.4 million to $16.1 million resulting from lower deposit-related service charges and fee income from mortgage banking activities, partially offset by higher loan servicing fee income. Non-interest expense decreased $4.2 million to $76.1 million driven by lower employee-related, occupancy, and marketing expenses.

Consolidated financial performance:

Quarterly net interest income compared to the first quarter of 2020:

• Net interest income was $223.8 million compared to $230.8 million.
• Net interest margin was 2.92 percent compared to 3.23 percent. The yield on interest-earning assets declined by 76 basis points, and the cost of interest-bearing liabilities declined by 48 basis points.
• Average interest-earning assets totaled $31.1 billion and grew by $2.3 billion, or 7.9 percent.
• Average loans totaled $21.5 billion and grew by $1.2 billion, or 5.7 percent.
• Average deposits totaled $28.3 billion and grew by $4.2 billion, or 17.4 percent.

Quarterly provision for credit losses:

• The provision for credit losses reflects a $25.8 million benefit in the quarter, contributing to a $31.1 million decrease in the allowance for credit losses on loans and leases. The decrease in the allowance reflects improvements to the forecasted economic outlook and favorable credit trends resulting in a release of reserves. The provision for credit losses reflected a $1 million benefit in the prior quarter and an expense of $76.0 million a year ago.
• Net charge-offs were $5.3 million, compared to $9.4 million in the prior quarter and $7.8 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.10 percent, compared to 0.17 percent in the prior quarter and 0.15 percent a year ago.
• The allowance for credit losses on loans and leases represented 1.54 percent of total loans at March 31, 2021, compared to 1.66 percent at December 31, 2020 and 1.60 percent at March 31, 2020. Excluding $1.3 billion of risk free PPP loans, the coverage ratio was 1.64 percent at March 31, 2021, compared to 1.76 percent at December 31, 2020. The allowance represented 218 percent of nonperforming loans at March 31, 2021 compared to 214 percent at December 31, 2020 and 206 percent at March 31, 2020.

Quarterly non-interest income compared to the first quarter of 2020:

• Total non-interest income was $76.8 million compared to $73.4 million, an increase of $3.4 million. This primarily reflects an increase of $2.9 million due to fair value adjustments; $1.5 million in miscellaneous fee income; $1.8 million in loan and lease fees primarily related to higher syndication fees; and $0.6 million in HSA fee income driven primarily by higher account service fees. These increases were partially offset by a $2.3 million decrease in deposit service fees driven by lower overdraft and service related fees and a $1.2 million decrease in the mark to market on customer derivatives and swap related fees.

Quarterly non-interest expense compared to the first quarter of 2020:

• Total non-interest expense was $188.0 million compared to $178.8 million, an increase of $9.2 million. This primarily reflects strategic optimization initiative charges of $9.4 million: $2.0 million in compensation and benefits; $2.6 million in occupancy; and $4.8 million in professional and outside services. Excluding these charges, non-interest expense was flat when compared to the first quarter a year ago.

Quarterly income taxes compared to the first quarter of 2020:

• Income tax expense was $30.2 million compared to $11.1 million and the effective tax rate was 21.8 percent compared to 22.6 percent.
• The lower effective tax rate in the quarter reflects the recognition of net discrete tax benefits during the period, partially offset by the effects of increased pre-tax income in 2021 compared to 2020.

Investment securities:

• Total investment securities were $8.9 billion, compared to $8.9 billion at December 31, 2020 and $8.5 billion at March 31, 2020. The carrying value of the available-for-sale portfolio included $51.3 million of net unrealized gains, compared to $92.5 million at December 31, 2020 and $3.1 million of net unrealized gains at March 31, 2020. The carrying value of the held-to-maturity portfolio does not reflect $162.6 million of net unrealized gains, compared to $267.2 million at December 31, 2020 and $156.3 million of net unrealized gains at March 31, 2020.

Loans:

• Total loans were $21.3 billion, compared to $21.6 billion at December 31, 2020 and $20.9 billion at March 31, 2020. Compared to December 31, 2020, commercial real estate loans increased by $15.4 million while commercial loans decreased by $140.4 million, residential mortgages decreased by $113.1 million, and consumer loans decreased by $101.8 million.
• Compared to a year ago, commercial real estate loans increased by $215.6 million while commercial loans, excluding PPP loans, decreased by $436.6 million, consumer loans decreased by $354.7 million and residential mortgages decreased by $322.6 million. PPP loans totaled $1.3 billion at March 31, 2021.
• Loan originations for the portfolio were $1.807 billion ($1.274 billion excluding PPP loan originations), compared to $1.804 billion in the prior quarter and $1.195 billion a year ago. In addition, $81 million of residential loans were originated for sale in the quarter, compared to $125 million in the prior quarter and $60 million a year ago.

Asset quality:

• Total nonperforming loans were $150.4 million, or 0.71 percent of total loans, compared to $168.0 million, or 0.78 percent of total loans, at December 31, 2020 and $162.3 million, or 0.78 percent of total loans, at March 31, 2020. Total paying nonperforming loans were $53.2 million, compared to $59.7 million at December 31, 2020 and $61.9 million at March 31, 2020.
• Past due loans were $20.4 million, compared to $32.9 million at December 31, 2020 and $37.0 million at March 31, 2020.

Deposits and borrowings:

• Total deposits were $28.5 billion, compared to $27.3 billion at December 31, 2020 and $24.5 billion at March 31, 2020. Core deposits to total deposits were 92.2 percent, compared to 90.9 percent at December 31, 2020 and 87.8 percent at March 31, 2020. The loan to deposit ratio was 74.8 percent, compared to 79.2 percent at December 31, 2020 and 85.2 percent at March 31, 2020.
• Total borrowings were $1.2 billion, compared to $1.7 billion at December 31, 2020 and $3.6 billion at March 31, 2020.

Capital:

• The return on average common shareholders’ equity and the return on average tangible common shareholders’ equity were 13.65 percent and 16.79 percent, respectively, compared to 4.75 percent and 5.95 percent, respectively, in the first quarter of 2020.
• The tangible equity and tangible common equity ratios were 8.30 percent and 7.85 percent, respectively, compared to 8.14 percent and 7.67 percent, respectively, at March 31, 2020. The common equity tier 1 risk-based capital ratio was 11.89 percent, compared to 10.95 percent at March 31, 2020.
• Book value and tangible book value per common share were $34.60 and $28.41, respectively, compared to $32.66 and $26.46, respectively, at March 31, 2020.

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $33.3 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 148 banking centers and 280 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.

Conference Call

A conference call covering Webster’s first quarter 2021 earnings announcement will be held today, Monday, April 19, 2021 at 8:30 a.m. Eastern Time. To listen to the live call, please dial 877-407-8289 or 201-689-8341, for international callers. The webcast, along with related slides, will be available on the Webster website (www.wbst.com). A replay of the conference call will be available for one week via the website listed above, beginning at approximately 11:00 a.m. (Eastern) on April 19, 2021. To access the replay, dial 877-660-6853 or 201-612-7415, for international callers. The replay conference ID number is 13718870.

Media Contact

Alice Ferreira, 203-578-2610
[email protected]

Investor Contact

Kristen Manginelli, 203-578-2307
[email protected]

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates,” and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) our ability to successfully execute our business plan and strategic initiatives, and manage our risks; (2) local, regional, national, and international economic conditions and the impact they may have on us and our customers; (3) volatility and disruption in national and international financial markets; (4) the potential adverse effects of the ongoing novel coronavirus (COVID-19) pandemic and any governmental or societal responses thereto, including the deployment and efficacy of COVID-19 vaccines, or any other unusual and infrequently occurring events; (5) changes in the level of nonperforming assets and charge-offs; (6) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (7) adverse conditions in the securities markets that lead to impairment in the value of our investment securities; (8) inflation, changes in interest rate, and monetary fluctuations; (9) the timely development and acceptance of new products and services and the perceived value of those products and services by customers; (10) changes in deposit flows, consumer spending, borrowings, and savings habits; (11) our ability to implement new technologies and maintain secure and reliable technology systems; (12) the effects of any cyber threats, attacks or events or fraudulent activity; (13) performance by our counterparties and vendors; (14) our ability to increase market share and control expenses; (15) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (16) our ability to successfully achieve the anticipated cost reductions from branch consolidations and any higher than anticipated costs or delays in implementing the consolidation plan; (17) changes in laws and regulations (including those concerning banking, taxes, dividends, securities, insurance, and healthcare) with which we and our subsidiaries must comply, including recent and potential legislative and regulatory changes in response to the COVID-19 pandemic such as the CARES Act and the rules and regulations that may be promulgated thereunder; (18) the effect of changes in accounting policies and practices applicable to us, including changes in our allowance for loan and lease losses and other impacts of recently adopted accounting guidance regarding the recognition of credit losses; (19) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (20) our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; and (21) the other factors that are described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings “Risk Factors” and “Management Discussion and Analysis of Financial Condition and Results of Operation.” Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

 

 

 

 

 

 

 

 

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SOURCE Webster Financial Corporation