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American Water reports strong first quarter 2023 results; affirms 2023 guidance and long-term targets

  • First quarter 2023 earnings of $0.91 per share, compared to $0.87 per share in 2022
  • 2023 earnings per share guidance range of $4.72 to $4.82 affirmed, long-term targets also affirmed
  • Invested $538 million in the first three months of the year; total capital plan on track to invest approximately $2.9 billion in 2023
  • Sold 12,650,000 shares of common stock on March 3, 2023, for net proceeds of approximately $1.7 billion
  • Announced agreements to purchase the assets related to the wastewater system of Towamencin Municipal Authority in Pennsylvania for a purchase price of $104 million and the wastewater treatment plant from Granite City in Illinois for a purchase price of $83 million
  • Published the 2022 Environmental, Social and Governance Data Summary and the Inclusion, Diversity & Equity Summary, part of the Company’s commitment to data transparency and sharing timely information on key ESG and diversity metrics

 

CAMDEN, N.J. — (BUSINESS WIRE) — American Water Works Company, Inc. (NYSE: AWK) today reported results for the quarter ended March 31, 2023, of $0.91 per share, compared to $0.87 per share in 2022.

 

“We’re off to a great start to the year,” said M. Susan Hardwick, president and CEO of American Water. “Our investments in infrastructure and our success signing new purchase agreements for regulated acquisitions has set the stage well for achieving our expected growth in 2023 and beyond.”

 

“We also successfully executed the 2023 planned equity issuance in March. In total $1.7 billion was issued, reflecting an upsized offering made possible by very strong demand for our securities. We are very pleased with the interest by investors in the company, both existing and new shareholders. Having the issue completed allows us to be very focused on executing on our plan. With this action and solid first quarter results, we are on track to meet our 2023 objectives,” said Hardwick.

 

2023 EPS Guidance and Long-Term Financial Targets Affirmed

The Company affirms its 2023 earnings per share guidance range of $4.72 to $4.82. The Company also affirms its long-term financial targets for the 2023-2027 period announced in Nov. 2022, including its long-term EPS and dividend growth rate targets of 7-9%. The Company’s earnings forecasts are subject to numerous risks and uncertainties, including, without limitation, those described under “Cautionary Statement Concerning Forward-Looking Statements” below and under “Risk Factors” in its annual, quarterly, and current reports filed with the Securities and Exchange Commission (“SEC”). All statements related to earnings and earnings per share refer to diluted earnings and earnings per share.

 

Consolidated Results

For the three months ended March 31, 2023, earnings per share were $0.91, compared to $0.87 per share in the same period in 2022. These increases were primarily driven by the implementation of new rates in the Regulated Businesses for the recovery of capital and acquisition investments, offset somewhat by impacts from inflationary pressures on production costs and higher interest costs since mid-2022. Approximately 75% of the estimated impact of inflation on chemicals, power and other fuel, and from higher pension costs and interest rates, are reflected in higher revenues in 2023 from rate cases recently completed.

 

The Company is on track to meet its capital investment plan for the year with investments of $538 million in the first three months of 2023, including $532 million for infrastructure improvements and replacements in the Regulated Businesses. The Company plans to invest a total of approximately $2.9 billion across its footprint in 2023, including approximately $0.4 billion for acquisitions. As of March 31, 2023, the Company had $481 million of acquisitions under agreement, including Pennsylvania American Water’s agreement announced in March 2023 to purchase the wastewater system assets of Towamencin Township for $104 million. In addition, in April 2023, Illinois American Water announced an agreement to purchase the assets of the wastewater treatment plant from Granite City for $83 million, adding further to the Company’s acquisitions under agreement.

 

Regulated Businesses

In the first quarter of 2023, Regulated Businesses’ net income was $174 million, compared to $160 million for the same period in 2022.

 

Operating revenues increased $82 million for the three months ended March 31, 2023, as compared to 2022. The increase in operating revenues was primarily a result of authorized revenue increases from completed general rate cases and infrastructure proceedings for the recovery of incremental capital and acquisition investments.

 

To date, the Company has been authorized additional annualized revenues of approximately $229 million from general rate cases in 2023. Further, approximately $50 million of additional annualized revenues from infrastructure surcharges have been authorized and are effective in 2023. The Company has general rate cases in progress in three jurisdictions, and has filed for infrastructure surcharges in two jurisdictions, reflecting a total annualized revenue request of approximately $144 million.

 

Operation and maintenance (“O&M”) expenses were higher by $15 million for the three months ended March 31, 2023, as compared to 2022, primarily due to increases in production costs from inflationary pressures that began to accelerate in mid-2022. Depreciation expense was higher by $14 million in the same period due to the growing capital investment. Also, interest expense was higher by $17 million due to additional long-term debt and higher rates on short-term debt.

 

For the 12-month period ended March 31, 2023, the Company’s adjusted regulated O&M efficiency ratio (a non-GAAP financial measure) was 33.6%, compared to 33.9% for the 12-month period ended March 31, 2022. The ratio reflects an increase in operating revenues for the Regulated Businesses, after considering the adjustment for the amortization of the excess accumulated deferred income taxes (“EADIT”) shown in the table below, as well as the continued focus on operating costs.

 

Dividends

On March 1, 2023, the Company paid a quarterly cash dividend of $0.6550 per share to shareholders of record as of February 7, 2023.

On April 26, 2023, the Company’s Board of Directors declared a quarterly cash dividend payment of $0.7075 per share of common stock, an 8.0% increase over the prior quarterly dividend, payable on June 1, 2023, to shareholders of record as of May 9, 2023.

 

2023 First Quarter Earnings Conference Call

The conference call to discuss first quarter 2023 earnings will take place on Thursday, April 27, 2023, at 9 a.m. Eastern Daylight Time. Interested parties may listen to an audio webcast through a link on the Company’s Investor Relations website at ir.amwater.com. Presentation slides that will be used in conjunction with the earnings conference call will also be made available online in advance at ir.amwater.com. The Company recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under SEC Regulation FD.

 

Following the earnings conference call, a replay of the audio webcast will be available for one year on American Water’s investor relations website at ir.amwater.com/events.

 

Non-GAAP Financial Measures

This press release includes a presentation of adjusted regulated O&M efficiency ratio, a “non-GAAP financial measure” under SEC rules, which excludes from its calculation estimated purchased water revenues and purchased water expenses, reductions for the amortization of EADIT, and the allocable portion of non-O&M support services costs, mainly depreciation and general taxes. These items were excluded from the O&M efficiency ratio calculation as they do not reflect management’s ability to increase the efficiency of the Regulated Businesses. This item is derived from American Water’s consolidated financial information but is not presented in its financial statements prepared in accordance with GAAP. This non-GAAP financial measure supplements and should be read in conjunction with the Company’s GAAP disclosures and should be considered as an addition to, and not a substitute for, any GAAP measure.

 

Management evaluates its operating performance using this ratio and believes that this non-GAAP financial measure is useful to the Company’s investors because it directly measures improvement in the operating performance and efficiency of the Company’s Regulated Businesses. The Company’s adjusted regulated O&M efficiency ratio (i) is not an accounting measure that is based on GAAP; (ii) is not based on a standard, objective industry definition or method of calculation; (iii) may not be comparable to other companies’ operating measures; and (iv) should not be used in place of the GAAP information provided elsewhere in this press release.

 

Set forth in this release is a table that calculates the Company’s adjusted regulated O&M efficiency ratio and reconciles each of the components used to calculate this ratio to the most directly comparable GAAP financial measure.

 

About American Water

With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly-traded water and wastewater utility company. The Company employs approximately 6,500 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to over 14 million people in 24 states. More information can be found by visiting amwater.com and follow American Water on Twitter, Facebook and LinkedIn.

 

Throughout this press release, unless the context otherwise requires, references to the “Company” and “American Water” mean American Water Works Company, Inc. and all of its subsidiaries, taken together as a whole.

 

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release including, without limitation, 2023 earnings guidance, the Company’s long-term financial, growth and dividend targets, future capital needs, the ability to achieve the Company’s strategies and goals, including with respect to its ESG focus, the outcome of the Company’s pending acquisition activity, the amount and allocation of projected capital expenditures, and estimated revenues from rate cases and other government agency authorizations, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. In some cases, these forward-looking statements can be identified by words with prospective meanings such as “intend,” “plan,” “estimate,” “believe,” “anticipate,” “expect,” “predict,” “project,” “propose,” “assume,” “forecast,” “outlook,” “likely,” “uncertain,” “future,” “pending,” “goal,” “objective,” “potential,” “continue,” “seek to,” “may,” “can,” “will,” “should” and “could” and or the negative of such terms or other variations or similar expressions. These forward-looking statements are predictions based on American Water’s current expectations and assumptions regarding future events. They are not guarantees or assurances of any outcomes, financial results, levels of activity, performance or achievements, and readers are cautioned not to place undue reliance upon them. The forward-looking statements are subject to a number of estimates and assumptions, and known and unknown risks, uncertainties and other factors. Actual results may differ materially from those discussed in the forward-looking statements included in this press release as a result of the factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and subsequent filings with the SEC, and because of factors such as: the decisions of governmental and regulatory bodies, including decisions to raise or lower customer rates; the timeliness and outcome of regulatory commissions’ and other authorities’ actions concerning rates, capital structure, authorized return on equity, capital investment, system acquisitions and dispositions, taxes, permitting, water supply and management, and other decisions; changes in customer demand for, and patterns of use of, water and energy, such as may result from conservation efforts, or otherwise; a loss of one or more large industrial or commercial customers due to adverse economic conditions, or other factors; limitations on the availability of the Company’s water supplies or sources of water, or restrictions on its use thereof, resulting from allocation rights, governmental or regulatory requirements and restrictions, drought, overuse or other factors; changes in laws, governmental regulations and policies, including with respect to the environment, health and safety, data and consumer privacy, security and protection, water quality and water quality accountability, contaminants of emerging concern, public utility and tax regulations and policies, and impacts resulting from U.S., state and local elections and changes in federal, state and local executive administrations; the Company’s ability to collect, distribute, use, secure and store consumer data in compliance with current or future governmental laws, regulation and policies with respect to data and consumer privacy, security and protection; weather conditions and events, climate variability patterns, and natural disasters, including drought or abnormally high rainfall, prolonged and abnormal ice or freezing conditions, strong winds, coastal and intercoastal flooding, pandemics (including COVID-19) and epidemics, earthquakes, landslides, hurricanes, tornadoes, wildfires, electrical storms, sinkholes and solar flares; the outcome of litigation and similar governmental and regulatory proceedings, investigations or actions; the risks associated with the Company’s aging infrastructure, and its ability to appropriately improve the resiliency of, or maintain and replace, current or future infrastructure and systems, including its technology and other assets, and manage the expansion of its businesses; exposure or infiltration of the Company’s technology and critical infrastructure systems, including the disclosure of sensitive, personal or confidential information contained therein, through physical or cyber attacks or other means; the Company’s ability to obtain permits and other approvals for projects and construction of various water and wastewater facilities; changes in the Company’s capital requirements; the Company’s ability to control operating expenses and to achieve operating efficiencies; the intentional or unintentional actions of a third party, including contamination of the Company’s water supplies or the water provided to its customers; the Company’s ability to obtain and have delivered adequate and cost-effective supplies of pipe, equipment (including personal protective equipment), chemicals, power and other fuel, water and other raw materials and to address or mitigate supply chain constraints that may result in delays or shortages in, as well as increased costs of, supplies, products and materials that are critical to or used in the Company’s business operations; the Company’s ability to successfully meet its operational growth projections, either individually or in the aggregate, and capitalize on growth opportunities, including, among other things, with respect to acquiring, closing and successfully integrating regulated operations, the Company’s Military Services Group entering into new military installation contracts, price redeterminations and other agreements and contracts with the U.S. government, and realizing anticipated benefits and synergies from new acquisitions; risks and uncertainties following the completion of the sale of the Company’s former Homeowner Services Group (“HOS”), including the Company’s ability to receive contingent consideration provided for in the HOS sale as well as amounts due, payable and owing to the Company under the seller note when due, and the ability of the Company to redeploy successfully and timely the net proceeds of this transaction into the Company’s Regulated Businesses; risks and uncertainties associated with contracting with the U.S. government, including ongoing compliance with applicable government procurement and security regulations; cost overruns relating to improvements in or the expansion of the Company’s operations; the Company’s ability to successfully develop and implement new technologies and to protect related intellectual property; the Company’s ability to maintain safe work sites; the Company’s exposure to liabilities related to environmental laws and similar matters resulting from, among other things, water and wastewater service provided to customers; the ability of energy providers, state governments and other third parties to achieve or fulfill their greenhouse gas emission reduction goals, including without limitation through state renewable portfolio standards and carbon transition plans; changes in general economic, political, business and financial market conditions; access to sufficient debt and/or equity capital on satisfactory terms and as needed to support operations and capital expenditures; fluctuations in inflation or interest rates and the Company’s ability to address or mitigate the impacts thereof; the ability to comply with affirmative or negative covenants in the current or future indebtedness of the Company or any of its subsidiaries, or the issuance of new or modified credit ratings or outlooks or other communications by credit rating agencies with respect to the Company or any of its subsidiaries (or any current or future indebtedness thereof), which could increase financing costs or funding requirements and affect the Company’s or its subsidiaries’ ability to issue, repay or redeem debt, pay dividends or make distributions; fluctuations in the value of, or assumptions and estimates related to, its benefit plan assets and liabilities, including with respect to its pension and other post-retirement benefit plans, that could increase expenses and plan funding requirements; changes in federal or state general, income and other tax laws, including (i) future significant tax legislation or regulations; and (ii) the availability of, or the Company’s compliance with, the terms of applicable tax credits and tax abatement programs; migration of customers into or out of the Company’s service territories and changes in water and energy consumption resulting therefrom; the use by municipalities of the power of eminent domain or other authority to condemn the systems of one or more of the Company’s utility subsidiaries, or the assertion by private landowners of similar rights against such utility subsidiaries; any difficulty or inability to obtain insurance for the Company, its inability to obtain insurance at acceptable rates and on acceptable terms and conditions, or its inability to obtain reimbursement under existing or future insurance programs and coverages for any losses sustained; the incurrence of impairment charges, changes in fair value and other adjustments related to the Company’s goodwill or the value of its other assets; labor actions, including work stoppages and strikes; the Company’s ability to retain and attract highly qualified and skilled employees and/or diverse talent; civil disturbances or unrest, or terrorist threats or acts, or public apprehension about future disturbances, unrest, or terrorist threats or acts; and the impact of new, and changes to existing, accounting standards.

 

These forward-looking statements are qualified by, and should be read together with, the risks and uncertainties set forth above and the risk factors included in American Water’s annual, quarterly and other SEC filings, and readers should refer to such risks, uncertainties and risk factors in evaluating such forward-looking statements. Any forward-looking statements American Water makes speak only as of the date of this press release. American Water does not have or undertake any obligation or intention to update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as otherwise required by the federal securities laws. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. Furthermore, it may not be possible to assess the impact of any such factor on the Company’s businesses, either viewed independently or together, or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. The foregoing factors should not be construed as exhaustive.

 

AWK-IR

American Water Works Company, Inc. and Subsidiary Companies

Consolidated Statements of Operations (Unaudited)

(In millions, except per share data)

For the Three Months Ended March 31,

2023

2022

Operating revenues

$

938

$

842

Operating expenses:

Operation and maintenance

393

364

Depreciation and amortization

172

158

General taxes

78

74

Total operating expenses, net

643

596

Operating income

295

246

Other income (expense):

Interest expense

(115

)

(100

)

Interest income

14

13

Non-operating benefit costs, net

9

19

Other, net

11

15

Total other (expense) income

(81

)

(53

)

Income before income taxes

214

193

Provision for income taxes

44

35

Net income attributable to common shareholders

$

170

$

158

Basic earnings per share:

Net income attributable to common shareholders

$

0.91

$

0.87

Diluted earnings per share:

Net income attributable to common shareholders

$

0.91

$

0.87

Weighted-average common shares outstanding:

Basic

186

182

Diluted

186

182

American Water Works Company, Inc. and Subsidiary Companies

Consolidated Balance Sheets (Unaudited)

(In millions, except share and per share data)

March 31, 2023

December 31, 2022

ASSETS

Property, plant and equipment

$

30,214

$

29,736

Accumulated depreciation

(6,582

)

(6,513

)

Property, plant and equipment, net

23,632

23,223

Current assets:

Cash and cash equivalents

213

85

Restricted funds

29

32

Accounts receivable, net of allowance for uncollectible accounts of $55 and $60, respectively

318

334

Income tax receivable

96

114

Unbilled revenues

289

275

Materials and supplies

103

98

Other

290

312

Total current assets

1,338

1,250

Regulatory and other long-term assets:

Regulatory assets

1,004

990

Seller promissory note from the sale of the Homeowner Services Group

720

720

Operating lease right-of-use assets

83

82

Goodwill

1,143

1,143

Other

366

379

Total regulatory and other long-term assets

3,316

3,314

Total assets

$

28,286

$

27,787

American Water Works Company, Inc. and Subsidiary Companies

Consolidated Balance Sheets (Unaudited)

(In millions, except share and per share data)

March 31, 2023

December 31, 2022

CAPITALIZATION AND LIABILITIES

Capitalization:

Common stock ($0.01 par value; 500,000,000 shares authorized; 200,058,247 and 187,200,539 shares issued, respectively)

$

2

$

2

Paid-in-capital

8,519

6,824

Retained earnings

1,437

1,267

Accumulated other comprehensive loss

(23

)

(23

)

Treasury stock, at cost (5,414,795 and 5,342,477 shares, respectively)

(388

)

(377

)

Total common shareholders’ equity

9,547

7,693

Long-term debt

10,485

10,926

Redeemable preferred stock at redemption value

2

3

Total long-term debt

10,487

10,929

Total capitalization

20,034

18,622

Current liabilities:

Short-term debt

—

1,175

Current portion of long-term debt

727

281

Accounts payable

193

254

Accrued liabilities

561

706

Accrued taxes

74

49

Accrued interest

114

91

Other

223

255

Total current liabilities

1,892

2,811

Regulatory and other long-term liabilities:

Advances for construction

321

316

Deferred income taxes and investment tax credits

2,483

2,437

Regulatory liabilities

1,568

1,590

Operating lease liabilities

70

70

Accrued pension expense

215

235

Other

192

202

Total regulatory and other long-term liabilities

4,849

4,850

Contributions in aid of construction

1,511

1,504

Commitments and contingencies

Total capitalization and liabilities

$

28,286

$

27,787

Contacts

Investor Contact:
Aaron Musgrave

Vice President, Investor Relations

856-955-4029

aaron.musgrave@amwater.com

Media Contact:
Maureen Duffy

Senior Vice President, Communications and External Affairs

856-955-4163

maureen.duffy@amwater.com

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Categories
Business Lifestyle Special/Sponsored Content

1st Colonial Bancorp, Inc. reports first quarter 2023 net income

Income Statement Highlights include:

  • Net income was $1.5 million, for the first quarter of 2023 compared to net income of $1.7 million for the first quarter of 2022.
  • Net interest income for the quarter ended March 31, 2023 was $6.5 million, an increase of $720 thousand, or 12%, from the same period in 2022.
  • Net interest margin for the quarter ended March 31, 2023 was 3.53%, a 2% increase over the same period in 2022, and down from 3.92% for the quarter ended December 31, 2022.
  • Provision for credit losses for loans was ($197) thousand for the first quarter of 2023, compared to $350 thousand in the fourth quarter of 2022. The first quarter 2023 net recovery was related to the payoff of a non-performing commercial loan.
  • Non-interest expense for the quarter ended March 31, 2023 was $4.9 million, as compared to $4.8 million for the quarter ended December 31, 2022 and includes $0.3 million of one-time expenses due to the separation of employment with a former executive.
  • For the first quarter of 2023, diluted earnings per share was $0.31, compared to $0.34 per diluted share for the first quarter of 2022.

 

Balance Sheet Highlights include:

  • Total assets grew $18.9 million, or 2%, to $800.9 million as of March 31, 2023 from $782.0 million as of December 31, 2022.
  • Total loans grew $15.8 million, or 3%, to $619.4 million as of March 31, 2023 from $603.6 million as of December 31, 2022.
  • Total deposits declined $8.8 million, or 1%, from $671.1 million as of December 31, 2022 to $662.3 million as of March 31, 2023, which reflects normal and anticipated cyclical changes in client balances.
  • Book value per share increased 2% to $13.01 as of March 31, 2023 from $12.76 as of December 31, 2022.

 

MOUNT LAUREL, N.J. — (BUSINESS WIRE) — 1st Colonial Bancorp, Inc. (FCOB), holding company of 1st Colonial Community Bank, Tuesday reported net income of $1.5 million, or $0.31 per diluted share, for the three months ended March 31, 2023, compared to net income of $1.7 million, or $0.34 per diluted share, for the three months ended March 31, 2022.

 

Robert White, President and Chief Executive Officer, commented, “We are pleased to report our first quarter results, which reflect our continued financial strength and resilience during challenging times in the banking industry. We continue to deliver upon our commitment to be a leading provider of deposit interest pricing for all interest-bearing accounts. We anticipated and planned for the impact of rising rates on our interest margin and we continue to remain focused on delivering high quality, value added products and services to our clients.”

 

“Our non-interest income was down in the first quarter as a result of lower loan sale activity in our residential lending unit. The lack of inventory in the housing market and rising interest rates are having an impact on new loan volume, which is likely to continue in the near term. Commercial loan demand has leveled off, as the rise in debt costs has caused many companies to re-evaluate growth plans and capital expenditures. In addition, we have made some organizational changes to support our sales efforts and to ensure that our sound credit discipline is maintained for new credits and our portfolio management practices. We continue to remain focused on our asset quality metrics and continue to look for early signs of distress within our customer base. We are also closely monitoring and managing our operating costs to account for the expected increase in funding costs, along with the continued impact of high inflation on our bottom line.”

 

“Our team is committed to executing our strategic priorities and delivering exceptional products and services through multiple distribution channels to support the ongoing needs of our customers.”

 

Operating Results

Net Interest Income

Net interest income for the three months ended March 31, 2023 and 2022 was $6.5 million and $5.8 million, respectively. The increase in net interest income was primarily attributable to a $2.4 million increase in interest income on average loans outstanding. For the first quarter of 2023, average loan balances increased $90.3 million to $604.1 million from $513.8 million for the first quarter of 2022. Additionally, approximately 27% of the loan portfolio is tied to the Wall Street Journal (“WSJ”) prime rate and re-prices at various times when that rate changes. The 450 basis point increase in the WSJ prime rate over the last twelve months has had a positive impact on interest income. When compared to the fourth quarter of 2022, net interest income declined $760 thousand from $7.3 million and was related to a $1.2 million increase in interest expense.

 

For the first quarter of 2023, interest expense was $2.6 million, an increase of $1.9 million from $650 thousand for the first quarter of 2022. For the first quarter of 2023, average interest-bearing deposits increased $51.1 million from the first quarter of 2022 and included $32 million in average municipal interest-checking balances. As a result of the cumulative increases in the Federal Funds Rate during 2022, we began increasing our deposit rates in the third quarter of 2022, which resulted in an increase of $1.6 million in deposit interest expense in the first quarter of 2023 compared to the first quarter of 2022. To fund our interest-earning asset growth, our average borrowings increased $30.3 million in the first quarter of 2023 compared to the same period in 2022 and contributed $368 thousand to the overall increase in interest expense of $1.9 million in the first quarter of 2023. When compared to the fourth quarter of 2022, interest expense increased $1.2 million from $1.4 million.

 

The net interest margin was 3.53% for the first quarter of 2023 compared to 3.46% for the first quarter of 2022. The average yield on interest-earning assets grew 109 basis points from 3.85% for the quarter ended March 31, 2022 to 4.94% for the quarter ended March 31, 2023. The average rate paid on average interest-bearing liabilities increased 119 basis points from 0.48% for the first quarter of 2022 to 1.67% for the first quarter of 2023. When compared to the fourth quarter of 2022, the first quarter 2023 net interest margin declined 39 basis points from 3.92% and was mainly related to a 75 basis point increase in the average rate paid on average interest-bearing liabilities.

 

Provision for Credit Losses

For the three months ended March 31, 2023, the provision for credit losses was ($174) thousand. In the first quarter of 2023 we adopted Accounting Standards Update 2016-13 “Financial Instruments-Credit Losses” (“CECL”). With the adoption of CECL the 2023 provision includes ($197) thousand for loans and $23 thousand for off balance sheet (“OBS”) commitments. Prior to the adoption of CECL, the provision for OBS commitments was included in non-interest expense. The provision for loan losses was $300 thousand for the three months ended March 31, 2022. The 2023 decline in provision for loans was due to a $445 thousand decrease in specific reserves on impaired loans due to a loan payoff. The loan loss provision was $350 thousand for the fourth quarter of 2022. Net recoveries were $32 thousand for the first quarter of 2023 compared to $137 thousand for the first quarter of 2022.

 

Non-interest Income

Non-interest income for the first quarter of 2023 was $454 thousand, a decrease of $628 thousand, or 58%, from $1.1 million for the first quarter of 2022. Income from the origination and sales of residential mortgages declined $306 thousand, or 62%, from the first quarter in 2022 due to a $27.4 million, or 54%, decline in originations. Mortgage activity has been challenging due to a drop in refinancing transactions and a lack of inventory in the purchase market. We have been originating adjustable-rate residential mortgages and have retained them in our loan portfolio. Retained mortgage loans accounted for 54% of the total residential mortgage originations in the first quarter of 2023 compared to 42% for the same period in 2022. During the first quarter of 2023, we earned $12 thousand in gains on the sale of SBA loans compared to $347 thousand for the comparable 2022 period. The higher interest rates have tempered new SBA loan origination volume.

 

When compared to the fourth quarter of 2022, non-interest income for the first quarter of 2023 declined $194 thousand from $648 thousand. Income from sales of residential mortgages and the sales of SBA loans declined $59 thousand and $54 thousand, respectively, from their amounts for the fourth quarter of 2022. Additionally, the fourth quarter of 2022 included a nontaxable bank owned life insurance (“BOLI”) death benefit of $98 thousand related to a former employee. There was no nontaxable death benefit in the first quarter of 2023.

 

Non-interest Expense

Non-interest expense was $4.9 million for the quarter ended March 31, 2023, and increased $677 thousand, or 16.2%, from $4.2 million for the quarter ended March 31, 2022. Salaries and benefits and data processing and technology expenses increased $330 thousand and $90 thousand, respectively, and were the main contributors to the increase in non-interest expense. The rise in salaries and benefits was mainly related to the recognition of severance that was negotiated with a former executive.

 

When compared to the fourth quarter of 2022, non-interest expense for the first quarter of 2023 increased $314 thousand from $4.6 million. Salaries and benefits increased $466 thousand and was related to the aforementioned negotiated severance with a former executive.

 

Income Taxes

For the first quarter of 2023, income tax expense was $726 thousand compared to $707 thousand for the first quarter of 2022 and $682 thousand for the fourth quarter of 2022. During the first quarter of 2023, we surrendered a low yielding BOLI policy and reinvested the proceeds at a significantly higher yield. As a result of the surrender, we recorded $113 thousand in tax expense which included a 10% penalty. We expect to earn back the $113 thousand in less than two years.

 

Financial Condition

Assets

As of March 31, 2023, total assets were $800.9 million and grew $18.9 million from $782.0 million as of December 31, 2022.

 

Total loans were $619.4 million as of March 31, 2023, an increase of $15.8 million, or 2.6%, from $603.6 million as of December 31, 2022. During the first quarter, residential mortgages and home equity loans and lines of credit increased $11.7 million and $5.7 million, respectively. Construction loans declined by $2.4 million. Loans held for sale were $2.0 million as of March 31, 2023, compared to $6.7 million as of December 31, 2022.

 

Investments decreased $1.9 million to $127.2 million as of March 31, 2023 from $129.1 million as of December 31, 2022. The unrealized loss improved $1.0 million from $8.1 million as of December 31, 2022 to $7.1 million as of March 31, 2023.

 

Asset Quality

As mentioned previously, we adopted CECL on January 1, 2023. This accounting standard requires that credit losses for financial assets and off-balance-sheet credit commitments be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. As a result of the adoption of CECL, the allowance for credit losses (“ACL”) increased by $1.6 million and included $1.2 million for the ACL on loans and $436 thousand for the ACL on OBS commitments. As a result of the CECL adjustment, retained earnings decreased by $1.1 million.

 

As of March 31, 2023, the ACL for loans was $9.3 million, or 1.50% of total loans. Non-performing assets as of March 31, 2023, were $4.2 million compared to $4.6 million as of December 31, 2022. The ACL to non-accrual loans was 223.7% as of March 31, 2023, compared to the allowance for loan losses to non-accrual loans of 182.5% as of December 31, 2022. As of March 31, 2023, the ratio of non-performing assets to total assets was 0.52% compared to 0.58% as of December 31, 2022.

 

Liabilities

Total deposits were $662.3 million as of March 31, 2023, and declined $8.8 million, or 1.3%, from $671.1 million as of December 31, 2022. Municipal interest checking declined $30.9 million to $248.1 million as of March 31, 2023. During the first quarter of 2023, we consolidated and improved our business deposit products. Approximately $37.0 million migrated from business money market and savings products into business interest-checking products. Total interest-checking accounts increased $45.0 million, while money markets, savings, and demand accounts decreased $24.1 million, $12.7 million and $3.4 million, respectively. Brokered certificates of deposit increased $18.7 million. Short-term borrowings increased $25.8 million to supplement our funding requirements.

 

Shareholder’s Equity

Total shareholders’ equity was $60.9 million as of March 31, 2023, compared to $59.6 million as of December 31, 2022. During the first quarter of 2023, we recorded a charge to retained earnings of $1.1 million related to the adoption of CECL. Accumulated comprehensive loss improved from $5.9 million as of December 31, 2022 to $5.1 million as of March 31, 2023. The accumulated comprehensive loss is related to the unrealized loss in our investment portfolio. Tangible book value per share increased $0.26, or 2.0%, from $12.76 as of December 31, 2022 to $13.01 as of March 31, 2023.

 

Consolidated Financial Statements and Other Highlights:

1st COLONIAL BANCORP, INC.

CONSOLIDATED INCOME STATEMENTS

(Unaudited, dollars in thousands, except per share data)

For the three months ended

Mar 31,

Dec 31,

Mar 31,

2023

2022

2022

Interest income

$

9,079

$

8,666

$

6,421

Interest expense

2,588

1,415

650

Net Interest Income

6,491

7,251

5,771

Provision for credit losses

(174)

350

300

Net interest income after provision for credit losses

6,665

6,901

5,471

Non-interest income

454

648

1,082

Non-interest expense

4,864

4,550

4,187

Income before taxes

2,255

2,999

2,366

Income tax expense

726

682

707

Net Income

$

1,529

$

2,317

$

1,659

Earnings Per Share – Basic

$

0.33

$

0.50

$

0.35

Earnings Per Share – Diluted

$

0.31

$

0.48

$

0.34

SELECTED PERFORMANCE RATIOS:

For the three months ended

Mar 31,

Dec 31,

Mar 31,

2023

2022

2022

Return on Average Assets

0.80%

1.21%

0.96%

Return on Average Equity

10.49%

15.86%

11.69%

Book value per share

$

13.01

$

12.76

$

12.01

As of March 31, 2023

As of December 31, 2022

Bank Capital ratios:

Tier 1 Leverage

9.65%

9.75%

Total Risk Based Capital

13.97%

14.14%

Common Equity Tier 1

12.72%

12.89%

1st COLONIAL BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

As of March 31, 2023

As of December 31, 2022

Cash and cash equivalents

$

28,186

$

20,399

Total investments

127,171

129,131

Mortgage loans held for sale

1,954

6,710

Total loans

619,404

603,609

Less ACL-loans

(9,318)

(8,331)

Loans, net

610,086

595,278

Bank owned life insurance

17,488

14,458

Premises and equipment, net

1,838

1,845

Accrued interest receivable

3,076

2,779

Other assets

11,094

11,273

Total Assets

$

800,893

$

781,963

Total deposits

$

662,301

$

671,052

Other borrowings

60,600

34,788

Subordinated debt

10,577

10,559

Other liabilities

6,535

5,926

Total Liabilities

740,013

722,325

Total Shareholders’ Equity

60,880

59,638

Total Liabilities and Shareholders’ Equity

$

800,893

$

781,963

1st COLONIAL BANCORP, INC.

NET INTEREST INCOME AND MARGIN

(Unaudited, in thousands, except percentages)

For the three months ended

March 31, 2023

December 31, 2022

March 31, 2022

Average

Balance

Interest

Yield/

Rate

Average

Balance

Interest

Yield/

Rate

Average

Balance

Interest

Yield/

Rate

Cash and cash equivalents

$

8,840

$

63

2.89%

$

10,204

$

65

2.52%

$

41,227

$

15

 0.15%

Investment securities

127,843

659

2.09%

128,354

632

1.95%

110,342

378

 1.39%

Loans held for sale

5,025

48

3.87%

5,496

52

3.79%

11,016

81

 2.98%

Loans

604,088

8,309

5.58%

589,869

7,917

5.32%

513,770

5,947

 4.69%

Total interest-earning assets

745,796

9,079

4.94%

733,923

8,666

4.68%

676,355

6,421

 3.85%

Non-interest earning assets

27,616

25,809

22,633

Total average assets

$

773,412

$

759,732

$

698,988

Interest-bearing deposits

Interest checking accounts

$

361,598

$

900

1.01%

$

340,834

$

401

0.47%

$

283,404

$

86

 0.12%

Savings and money markets

86,247

208

0.98%

127,839

222

0.69%

129,219

92

 0.29%

Time deposits

138,825

915

2.67%

112,172

417

1.47%

122,900

275

 0.91%

Total interest-bearing deposits

586,670

2,023

1.40%

580,845

1,040

0.71%

535,523

453

 0.34%

Borrowings

40,851

565

5.61%

27,264

375

5.46%

10,535

197

 7.58%

Total interest-bearing liabilities

627,521

2,588

1.67%

608,109

1,415

0.92%

546,058

650

 0.48%

Non-interest bearing deposits

80,488

88,230

91,335

Other liabilities

6,275

5,433

4,026

Total average liabilities

714,284

701,772

641,419

Shareholders’ equity

59,128

57,960

57,569

Total average liabilities and equity

$

773,412

$

759,732

$

698,988

Net interest income

$

6,491

$

7,251

$

5,771

Net interest margin

3.53%

3.92%

3.46%

Net interest spread

3.26%

3.76%

3.37%

 

1st Colonial Bancorp, Inc, is a Pennsylvania corporation headquartered in Mount Laurel, New Jersey, and the parent company of 1st Colonial Community Bank (the “Bank”). The Bank provides a range of business and consumer financial services, placing emphasis on customer service and access to decision makers. Headquartered in Collingswood, New Jersey, the Bank has branches in Westville, New Jersey and Limerick, Pennsylvania. The bank also has administrative offices in Mount Laurel, New Jersey. To learn more, call (877) 785-8550 or visit www.1stcolonial.com.

 

In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to 1st Colonial Bancorp, Inc.’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance, and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond 1st Colonial Bancorp, Inc.’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, the impact of the ongoing pandemic and government responses thereto; on the U.S. economy, including the markets in which we operate; actions that we and our customers take in response to these factors and the effects such actions have on our operations, products, services and customer relationships; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and the effects of inflation, a potential recession, among others, could cause 1st Colonial Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. 1st Colonial Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. 1st Colonial Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by 1st Colonial Bancorp, Inc. or by or on behalf of 1st Colonial Community Bank.

Contacts

For more information, contact

Mary Kay Shea at 856‑885‑2391

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Business Lifestyle Regulations & Security Special/Sponsored Content

AM Best affirms Performance Assessment of Cargo Risk Corporation

OLDWICK, N.J. — (BUSINESS WIRE) — #insurance — AM Best has affirmed the Performance Assessment (assessment) of PA-3 (Strong) of Cargo Risk Corporation (CargoCorp) (Miami, FL). The outlook of the assessment is stable.

 

The assessment reflects CargoCorp’s strong underwriting capabilities, strong governance and internal controls, strong financial condition, strong organizational talent and strong depth and breadth of relationships.

 

CargoCorp is a managing general agent (MGA) specializing in providing capacity for marine cargo lines in the Latin American market. Since writing its first program in 2015, CargoCorp has proven its underwriting expertise by producing profitable business for its carrier partners. CargoCorp’s underwriting capabilities further benefit from its experienced underwriting staff. Embedded in the underwriting process is use of an internal and proprietary software system that provides the company with extensively detailed assessments of risk for real-time feedback for insureds with potential exposures. The limited track record of several of its programs is considered a partially offsetting factor.

 

CargoCorp’s governance and internal controls are strong given its size and scale. CargoCorp has designed and implemented a robust internal audit process to ensure that the company’s policies and procedures are aligned with its strategic objectives. The company has an experienced board of directors that features internal and external members. Key person risk exists, but processes are in place to moderate the impact should an issue occur.

 

CargoCorp’s financial condition is supported by a trend of consistently profitable earnings and continued positive net worth. The company is privately held. Operations are oriented as a small business with hands-on management. Stability of income benefits from the range of programs underwritten by the company.

 

The company is staffed more than appropriately for its size and scale with extensive industry experience in marine cargo. Its organizational structure is compact for ease of communication and efficient work processes. Many processes are retained in-house to ensure consistency and provide flexibility. CargoCorp experienced elevated staff turnover this last year, a moderate offsetting factor to this component.

 

CargoCorp’s portfolio of programs has progressed since its founding. The company offers a range of programs in its target market of marine cargo and affiliated coverage in Latin America. Management continues to monitor growth opportunities in new markets, as well as maintain relationships with well-rated capacity providers.

 

This press release relates to Performance Assessments that have been published on AM Best’s website. For all information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the Performance Assessments referenced in this release, please see AM Best’s website. For additional information regarding the use and limitations of Performance Assessments, please view Guide to Best’s Performance Assessments for Delegated Underwriting Authority Enterprises. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

 

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

 

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Riley Parnham
Financial Analyst
+1 908 439 2200, ext. 5495
riley.parnham@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Robert Raber
Director
+1 908 439 2200, ext. 5696
robert.raber@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com

Categories
Business Lifestyle Regulations & Security Special/Sponsored Content

AM Best downgrades Credit Ratings of members of Columbian Financial Group; revises under review status to negative

OLDWICK, N.J. — (BUSINESS WIRE) — #insurance — AM Best has downgraded the Financial Strength Rating to B- (Fair) from B (Fair) and the Long-Term Issuer Credit Ratings to “bb-” (Fair) from “bb+” (Fair) of Columbian Mutual Life Insurance Company (Columbian) (Binghamton, NY) and Columbian Life Insurance Company (Chicago, IL), collectively referred to as Columbian Financial Group (CFG). Concurrently, AM Best has maintained the under review status for these Credit Ratings (ratings) and revised the implications status to negative from developing.

The ratings reflect CFG’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.

 

The rating downgrades reflect a decline in CFG’s overall balance sheet strength to an assessed level of weak from an adequate assessment, relating to a significant decline in the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), in the fourth quarter of 2022 well below targeted levels, driven by reserve increases from an unclaimed property review. The company also incurred operating losses primarily related to continued adverse mortality experience from the effects of the COVID-19 pandemic on the senior market, and declining net premium written.

 

The ratings were put under review shortly after CFG’s announcement on June 29, 2021, that its board of directors had approved a strategic transaction with Constellation Insurance Holdings, Inc. (Constellation) that includes the sponsored demutualization of Columbian to a stock company with the issuance of all newly issued stock to Constellation. Constellation is an insurance holding company backed by two large Canadian institutional investors primarily engaged in the management of pension plans, Caisse de Dépôt et Placement du Québec and Ontario Teachers’ Pension Plan Board. The transaction would provide for Constellation to invest up to $100 million to fund cash payments to eligible policyholders and significantly strengthen Columbian’s capitalization. The acquisition of Columbian by Constellation would provide Columbian needed capital support from a substantially larger organization while maintaining its brand, management team and headquarters. Despite an expected positive impact on capital from the planned transaction with Constellation, the anticipated closing date has been pushed back several times due to delays in obtaining regulatory approvals. The negative implications reflect AM Best’s concerns around the potential for continued losses and the level of capital going forward, especially should the transaction not occur. The ratings will remain under review with negative implications until the transaction approvals are finalized, the transaction closes, and AM Best evaluates the overall impact.

 

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

 

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Stratos Laskarides
Senior Financial Analyst
+1 908 439 2200, ext. 5613
stratos.laskarides@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Edward Kohlberg
Director
+1 908 439 2200, ext. 5664
edward.kohlberg@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com

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Business Regulations & Security Special/Sponsored Content

AM Best affirms credit ratings of SiriusPoint Ltd. and its subsidiaries

LONDON — (BUSINESS WIRE) — #insurance — AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of the rated operating subsidiaries of SiriusPoint Ltd. (SiriusPoint) (Bermuda) [NYSE: SPNT]. Additionally, AM Best has affirmed the Long-Term ICR of “bbb-” (Good) of SiriusPoint, which is a non-operating holding company.

 

Concurrently, AM Best has affirmed the Long-Term Issue Credit Rating of “bbb-” (Good) on USD 115 million, 7% senior unsecured notes, due 2025, of SiriusPoint. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings).

 

The ratings reflect SiriusPoint’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings of the group’s operating subsidiaries factor in their strategic importance to SiriusPoint.

 

SiriusPoint’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio. The assessment also considers the significant de-risking of SiriusPoint’s asset base in 2022, owing to the redemption of USD 0.6 billion from related party investment funds and reinvestment of the proceeds into high quality fixed income securities. As a result, cash and fixed income investments comprised 92% of SiriusPoint’s investment portfolio at year-end 2022, up from 78% at year-end 2021. A partially offsetting rating factor is the group’s somewhat limited capital fungibility due to a significant portion of consolidated available capital being held as a safety reserve in the group’s Swedish subsidiary.

 

SiriusPoint is expected to report adequate operating performance over the underwriting cycle. However, recent technical performance has been weak, demonstrated by combined ratios of 120% and 107% (as calculated by AM Best) in 2021 and 2022, respectively. Underwriting profitability is expected to improve and be more stable as SiriusPoint’s management continues to rebalance the group’s business mix away from catastrophe-exposed property business toward less volatile accident and health and specialty lines.

 

SiriusPoint’s neutral business profile assessment reflects its market position as a midtier global (re)insurer, which operates from platforms in Europe, the United States, Bermuda and at Lloyd’s. The group has a good level of diversification by line of business, which is expected to improve further as it executes its business plan.

 

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed, with stable outlooks for the following subsidiaries of SiriusPoint Ltd.:

  • SiriusPoint America Insurance Company
  • SiriusPoint Bermuda Insurance Company Ltd.
  • SiriusPoint International Insurance Corporation (publ)
  • SiriusPoint Specialty Insurance Corporation

 

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

 

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

 

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Ben Diaz-Clegg
Senior Financial Analyst
+44 20 7397 0293
ben.diaz-clegg@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Ghislain Le Cam, CFA, FRM
Senior Director, Analytics
+44 20 7397 0268
ghislain.lecam@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com

Categories
Business Regulations & Security Special/Sponsored Content

KORNIT DEADLINE ALERT: Bragar Eagel & Squire, P.C. reminds investors that a class action lawsuit has been filed against Kornit Digital Ltd. and encourages investors to contact the firm

NEW YORK — (BUSINESS WIRE) — #A — Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, reminds investors that a class action lawsuit has been filed against Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT) in the United States District Court for the District of New Jersey on behalf of all persons and entities who purchased or otherwise acquired Kornit securities between February 17, 2021 and July 5, 2022, both dates inclusive (the “Class Period”).

 

Investors have until April 17, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

Click here to participate in the action.

 

This securities class action is brought on behalf of all persons or entities that purchased or otherwise acquired Kornit ordinary shares between February 17, 2021 and July 5, 2022, inclusive (the “Class Period”). The claims asserted herein are alleged against Kornit and certain of the Company’s current and former senior executives (collectively, “Defendants”), and arise under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, promulgated thereunder.

 

Kornit designs and manufactures industrial digital printing technologies for the garment, apparel, and textile industries. The Company’s digital inkjet printers enable end-users to print both direct-to-garment (“DTG”) and direct-to-fabric (“DTF”). In DTG printing, designs and images are printed directly onto finished textiles such as clothing and apparel. In DTF printing, large rolls of fabric pass through wide inkjet printers that print images and designs directly onto swaths of fabric that are then cut and sewn into a product, and can be used in the fashion and home décor industries. Kornit also produces and sells textile inks and other consumables for use in its digital printers. Through customer support contracts, Kornit also provides customer assistance and equipment services for its printers, including technical support, maintenance, and repair.

 

During the Class Period, the Company also began offering software services to its customers, including a suite of end-to-end fulfillment and production solutions, called KornitX, through which the Company provides, among other things, automated production systems and workflow and inventory management.

 

The Company’s largest customer is multinational e-commerce company, Amazon.com, Inc. (“Amazon”). Among the largest of Kornit’s other customers during the Class Period were Delta Apparel, Inc. (“Delta Apparel”), a leading provider of activewear and lifestyle apparel products, and Fanatics, Inc. (“Fanatics”), a global digital sports platform and leading provider of licensed sports merchandise. Kornit generates more than 60% of its revenues from its ten largest customers. Accordingly, it was critically important for Kornit to maintain those major customers as well as continue to grow its customer base in order to achieve the Company’s ambitious goal of “becoming a $1 billion revenue company in 2026.”

 

Throughout the Class Period, Kornit repeatedly touted the purported competitive advantages provided by its technology and assured investors that it faced virtually no meaningful competition in the “direct-to-garment” printing market. The Company also represented that there was strong demand for its digital printing systems, consumable products, such as textile inks, as well as the services Kornit provided customers to maintain and manage its digital printers, and to manage customer workflow. Kornit further assured investors that the purportedly strong demand for the Company’s products and services would enable it to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.

 

These and similar statements made throughout the Class Period were false. In truth, Kornit and its senior executives knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. As a result of these misrepresentations, Kornit ordinary shares traded at artificially inflated prices throughout the Class Period.

 

Investors began to learn the truth on March 28, 2022, when Delta Apparel and Fanatics—two of Kornit’s major customers—announced that for months they had collaborated with one of Kornit’s principal competitors to develop a new digital printing technology that directly competed with products and services Kornit offered. Delta Apparel revealed that it had already installed this new technology in four of its existing digital print facilities and had plans to expand further. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected the widespread dissatisfaction of Kornit’s major customers with the Company’s product quality and customer service, and meant that Kornit would likely lose revenue from two of its most important customers.

 

On May 11, 2022, despite reporting revenues that exceeded expectations, Kornit reported a net loss of $5.2 million for the first quarter of 2022, compared to a profit of $5.1 million in the prior year period. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts’ expectations. Kornit attributed its disappointing guidance to a slowdown in orders from the Company’s customers in the e-commerce segment. In addition, the Company admitted that, for at least the previous two quarters, Kornit knew that one of its largest customers, Delta Apparel, had acquired digital printing systems from a Kornit competitor. As a result of these disclosures, the price of Kornit ordinary shares declined by $18.78 per share, or 33.3%.

 

Then, on July 5, 2022, after the market closed, Kornit disclosed that it would report a sizeable shortfall in revenue for the second quarter of 2022. Specifically, Kornit expected revenue for the second quarter to be in the range of $56.4 million to $59.4 million, far short of the previous revenue guidance of between $85 million and $95 million that the Company provided less than two months earlier, in May 2022. Kornit attributed the substantial revenue miss to “a significantly slower pace of direct-to-garment (DTG) systems orders in the second quarter as compared to our prior expectations.” As a result of these disclosures, the price of Kornit ordinary shares declined by an additional $8.10 per share, or 25.7%.

 

As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s shares, Plaintiff and other Class members have suffered significant losses and damages.

 

If you purchased or otherwise acquired Kornit shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.

 

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contacts

Bragar Eagel & Squire, P.C.

Brandon Walker, Esq.

Melissa Fortunato, Esq.

(212) 355-4648

investigations@bespc.com
www.bespc.com

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Business Healthcare Lifestyle Science Special/Sponsored Content

Rocket Pharmaceuticals to participate in upcoming Investor Conferences

CRANBURY, N.J. — (BUSINESS WIRE) — Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT), a leading late-stage biotechnology company advancing an integrated and sustainable pipeline of genetic therapies for rare disorders with high unmet need, today announced that Company management will participate in the 22nd Annual Needham Virtual Healthcare Conference and Chardan’s 7th Annual Genetic Medicines and Cell Therapy Manufacturing Summit.

 

Participation details are as follows:

22nd Annual Needham Virtual Healthcare Conference

Fireside Chat Presentation

Date: April 18, 2023

Time: 8:45 a.m. ET

 

Chardan’s 7th Annual Genetic Medicines and Cell Therapy Manufacturing Summit

Fireside Chat Presentation

Date: April 25, 2023

Time: 9:00 a.m. ET

A webcast of both events will be available under “Events” in the Investors section of the Company’s website at https://ir.rocketpharma.com/.

 

About Rocket Pharmaceuticals, Inc.

Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) is advancing an integrated and sustainable pipeline of investigational genetic therapies designed to correct the root cause of complex and rare disorders. The Company’s platform-agnostic approach enables it to design the best therapy for each indication, creating potentially transformative options for patients afflicted with rare genetic diseases. Rocket’s clinical programs using lentiviral vector (LV) based gene therapy are for the treatment of Fanconi Anemia (FA), a difficult to treat genetic disease that leads to bone marrow failure and potentially cancer, Leukocyte Adhesion Deficiency-I (LAD-I), a severe pediatric genetic disorder that causes recurrent and life-threatening infections which are frequently fatal, and Pyruvate Kinase Deficiency (PKD), a rare, monogenic red blood cell disorder resulting in increased red cell destruction and mild to life-threatening anemia. Rocket’s first clinical program using adeno-associated virus (AAV)-based gene therapy is for Danon Disease, a devastating, pediatric heart failure condition. Rocket also has preclinical AAV-based gene therapy programs in PKP2-arrhythmogenic cardiomyopathy (ACM) and BAG3-associated dilated cardiomyopathy (DCM). For more information about Rocket, please visit www.rocketpharma.com.

 

Rocket cautionary statement regarding forward-looking statements

Various statements in this release concerning Rocket’s future expectations, plans and prospects, including without limitation, Rocket’s expectations regarding the safety and effectiveness of product candidates that Rocket is developing to treat Fanconi Anemia (FA), Leukocyte Adhesion Deficiency-I (LAD-I), Pyruvate Kinase Deficiency (PKD), Danon Disease (DD) and other diseases, the expected timing and data readouts of Rocket’s ongoing and planned clinical trials, the expected timing and outcome of Rocket’s regulatory interactions and planned submissions, Rocket’s plans for the advancement of its Danon Disease program, including its planned pivotal trial, and the safety, effectiveness and timing of related pre-clinical studies and clinical trials, may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995 and other federal securities laws and are subject to substantial risks, uncertainties and assumptions. You should not place reliance on these forward-looking statements, which often include words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “will give,” “seek,” “will,” “may,” “suggest” or similar terms, variations of such terms or the negative of those terms. Although Rocket believes that the expectations reflected in the forward-looking statements are reasonable, Rocket cannot guarantee such outcomes. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including, without limitation, Rocket’s ability to monitor the impact of COVID-19 on its business operations and take steps to ensure the safety of patients, families and employees, the interest from patients and families for participation in each of Rocket’s ongoing trials, patient enrollment, trial timelines and data readouts, our expectations regarding our drug supply for our ongoing and anticipated trials, actions of regulatory agencies, which may affect the initiation, timing and progress of pre-clinical studies and clinical trials of its product candidates, our ability to submit regulatory filings with the U.S. Food and Drug Administration (FDA) and to obtain and maintain FDA or other regulatory authority approval of our product candidates, Rocket’s dependence on third parties for development, manufacture, marketing, sales and distribution of product candidates, the outcome of litigation, our competitors’ activities, including decisions as to the timing of competing product launches, pricing and discounting, our integration of an acquired business, which involves a number of risks, including the possibility that the integration process could result in the loss of key employees, the disruption of our ongoing business, or inconsistencies in standards, controls, procedures, or policies, our ability to successfully develop and commercialize any technology that we may in-license or products we may acquire and any unexpected expenditures, as well as those risks more fully discussed in the section entitled “Risk Factors” in Rocket’s Annual Report on Form 10-K for the year ended December 31, 2022, filed February 28, 2023 with the SEC and subsequent filings with the SEC including our Quarterly Reports on Form 10-Q. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and Rocket undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts

Media
Kevin Giordano

kgiordano@rocketpharma.com

Investors
Brooks Rahmer

investors@rocketpharma.com

Categories
Education Environment Lifestyle Science Special/Sponsored Content

Rutgers info on Wild Plant Culture to restore edible and medicinal native plant communities

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Business Special/Sponsored Content

Investor Alert: Bronstein, Gewirtz & Grossman, LLC notifies Target Corporation (TGT) investors of class action and to actively participate

NEW YORK — (BUSINESS WIRE) — $TGT #classaction — Attorney Advertising — Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Target Corporation (“Target” or the “Company”) (NYSE: TGT) and certain of its officers, on behalf of all persons and entities that purchased, or otherwise acquired Target common stock between August 18, 2021 and May 17, 2022, inclusive (the ”Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.com/tgt.

This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws.

 

The complaint alleges that Target made materially false and/or misleading statements and/or failed to disclose: (1) the true extent of Target’s difficulty maintaining a balanced inventory of in-demand goods, despite its insights into changing consumer preferences; (2) that Target was severely impacted by changing consumer preferences; (3) that Target’s inventory mix was significantly more sensitive to changing consumer preferences due to Target’s practice of buying larger quantities ahead of season, and was therefore at significant risk of having to use markdowns to sell out-of-demand goods; and (4) that, as a direct result of these changing preferences, Target’s inventory increasingly became out-of-balance and overweight in bulky and unsellable goods throughout the Class Period forcing Target to markdown its out-of-demand goods, thereby negatively impacting revenue.

 

A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm’s site: www.bgandg.com/tgt or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Target you have until May 30, 2023 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.

 

Bronstein, Gewirtz & Grossman, LLC represents investors in securities fraud class actions and shareholder derivative suits. The firm has recovered hundreds of millions of dollars for investors nationwide. Attorney advertising. Prior results do not guarantee similar outcomes.

Contacts

Bronstein, Gewirtz & Grossman, LLC

Peretz Bronstein or Yael Nathanson

212-697-6484 | info@bgandg.com

Categories
Regulations & Security Special/Sponsored Content

Final deadline alert: Bronstein, Gewirtz & Grossman, LLC notifies Argo Blockchain plc (ARBK; ARBKL) investors of class action and last few hours to actively participate

NEW YORK — (BUSINESS WIRE) — Attorney Advertising — Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Argo Blockchain plc (“Argo” or the “Company”), (NASDAQ: ARBK; ARBKL) and certain of its officers, on behalf of all persons and entities that purchased, or otherwise acquired: (a) Argo American Depository Shares (“ADSs”) pursuant and/or traceable to the Offering Documents (defined below) issued in connection with the Company’s initial public offering conducted on or about September 23, 2021 (the “IPO” or “Offering”); and/or (b) Argo securities between September 23, 2021 and October 10, 2022, both dates inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.com/arbk.

 

This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws.

 

The complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) Argo was highly susceptible to and/or suffered from significant capital constraints, electricity and other costs, and network difficulties; (ii) the foregoing issues hampered, inter alia, Argo’s ability to mine BTC, execute its business strategy, meet its obligations, and operate its Helios facility; (iii) as a result, Argo’s business was less sustainable than Defendants had led investors to believe; (iv) accordingly, Argo’s business and financial prospects were overstated; and (v) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.

 

A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm’s site: www.bgandg.com/arbk or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Argo you have until March 27, 2023 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.

 

Bronstein, Gewirtz & Grossman, LLC represents investors in securities fraud class actions and shareholder derivative suits. The firm has recovered hundreds of millions of dollars for investors nationwide. Attorney advertising. Prior results do not guarantee similar outcomes.

Contacts

Bronstein, Gewirtz & Grossman, LLC

Peretz Bronstein or Yael Nathanson

212-697-6484 | info@bgandg.com