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Investor Relation - Press Release

Investor Relation

Press Release

WesBanco Announces Second Quarter 2017 Net Income

Company Release - 7/19/2017 4:10 PM ET

WHEELING, W.Va., July 19, 2017 /PRNewswire/ -- Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ: WSBC), a multi-state bank holding company based in Wheeling, WV, today announced net income and related earnings per share for the three and six months ended June 30, 2017.  Net income for the three months ended June 30, 2017 increased to $26.3 million, while diluted earnings per share increased to $0.60, compared to $22.1 million or $0.58 per diluted share for the second quarter of 2016.  For the six month period ended June 30, 2017, net income increased to $52.2 million or $1.19 per diluted share compared to $45.0 million or $1.17 per diluted share for the first six months of 2016. Excluding after-tax merger-related expenses (non-GAAP measure), net income for the six months ended June 30, 2017, increased 15.7% to $52.5 million compared to $45.4 million for 2016, while diluted earnings per share improved to $1.19, compared to $1.18 per share for 2016.  Financial results for Your Community Bankshares, Inc. ("YCB") were included in WesBanco's results after September 9, 2016, the date of the consummation of the merger.




For the Three Months Ended June 30, 


For the Six Months Ended June 30,




2017


2016


2017


2016

(unaudited, dollars in thousands,
except per share amounts)


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share

Net income (Non-GAAP)(1)


$      26,341


$       0.60


$      22,560


$       0.59


$      52,547


$       1.19


$      45,433


$       1.18

Less: After tax merger-related expenses


-


-


(451)


(0.01)


(319)


-


(451)


(0.01)

Net income (GAAP)



$      26,341


$       0.60


$      22,109


$       0.58


$      52,228


$       1.19


$      44,982


$       1.17

(1)Non-GAAP net income excludes after-tax merger related expenses.  Non-GAAP measures are defined on page 12 under "Non-GAAP Financial Measures."

 

"We are pleased with our results for the second quarter of 2017, which were supported by year-over-year organic loan growth of 4.1%" said Mr. Clossin. "Our loan growth continues to benefit from our diversification strategy as we expand total commercial lending, which grew organically 8.7% over the last twelve months.  Furthermore, we achieved this growth while maintaining our strong credit culture and underwriting standards, which have allowed us to continue our trend of strong credit quality metrics."

Mr. Clossin added, "Our expansion into the Southern Indiana and Kentucky markets is progressing very well.  We have been able to maintain a very strong team of employees, while also building upon that team through recent hires in the commercial banking and wealth management areas.  In fact, WesBanco recently received the top retail banking customer satisfaction ranking in the Louisville market from a major survey company."

Financial Condition

Total assets at June 30, 2017 increased $1.5 billion, or 17.6%, compared to June 30, 2016. Portfolio loans increased $1.2 billion or 23.6% over the last twelve months with $1.0 billion from the YCB acquisition and $210.1 million, or 4.1%, from organic loan growth. Expanded market areas and additional commercial personnel in our core markets provided the organic loan growth, which occurred primarily in commercial real estate, commercial and industrial, and home equity lending categories. Loan originations during the last twelve months were $2.2 billion, with total business loan originations up approximately 37.6%.  The re-mix in earning assets continued as securities as a percentage of total assets were reduced from 26.8% in the second quarter of 2016 to 23.1% in the 2017 second quarter, while loans increased as a percentage of total assets to 64.7% from 61.6% in the second quarter of 2016.

Total deposits increased $1.1 billion, or 19.3%, during the last twelve months.  Total organic deposits, excluding CDs, increased 5.7%, driven by 11.9% organic growth in interest bearing and non-interest bearing demand deposits.   Total demand deposits, as of June 30, 2017, now represent 48.4% of total deposits, an increase from 42.5% a year ago.

WesBanco continues to maintain strong regulatory capital ratios after the YCB acquisition and implementation of the BASEL III capital standards.  At June 30, 2017, Tier I leverage was 10.09%, Tier I Risk-Based capital was 13.36%, Total Risk-Based capital was 14.38% and the Common Equity Tier 1 capital ratio ("CET 1"), was 11.44%.  Both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards. Total tangible equity to tangible assets (non-GAAP measure) was 8.53% at June 30, 2017, increasing from 8.20% at December 31, 2016, which reflects post-acquisition retained earnings and adjustments to accumulated other comprehensive income.  This ratio has also returned to the tangible common equity level prior to the acquisition, earning back dilution from the YCB acquisition in less than one year.  Strong earnings and increased total capital have enabled WesBanco to increase the quarterly dividend rate $0.02 per share during the first quarter of 2017 to $0.26 per share, reflecting the tenth increase during the last seven years, a cumulative increase of 86%.

Credit Quality

Our credit quality continues to be strong and improved year-over-year on a percentage basis. Non-performing loans (including TDRs), and criticized and classified loans all improved as a percentage of total portfolio loans from June 30, 2016. Non-performing loans were 0.67% of total loans at June 30, 2017, decreasing from 0.80% of total loans at the end of the second quarter of 2016. Criticized and classified loans were 1.25% of total loans, improving from 1.53% at June 30, 2016, a reduction of $5.3 million.  Net charge-offs as a percentage of average portfolio loans were 0.09% in the second quarter of 2017 as compared to 0.08% in the second quarter of 2016.

The allowance for loan losses represented 0.70% of total portfolio loans at June 30, 2017 compared to 0.84% as of June 30, 2016.  Included in the ratio are acquired YCB and ESB loans (recorded at fair value at the date of acquisition of $1.7 billion) and the related allowance on YCB and ESB acquired loans of $3.3 million at June 30, 2017.  Excluding these acquired loans and the related allowance results in a more comparable coverage ratio to prior periods.  The provision for credit losses increased to $2.4 million in the second quarter of 2017 compared to $1.8 million in the second quarter of 2016, due primarily to loan growth. On a linked quarter basis, the provision decreased $0.3 million.

Net Interest Income

The yield on earning assets has increased in each of the last six quarters totaling 22 basis points, with 18 basis points of the increase occurring subsequent to the acquisition of YCB's higher yielding earning assets in September 2016.  Six basis points of the increase occurred in the most recent quarter after the first quarter's Federal Reserve Board's target federal funds rate increased 25 basis points.  As a result, the net interest margin increased by 15 basis points to 3.45% in the second quarter of 2017 compared to 3.30% in the second quarter of 2016.  Yields increased on more than 90% of earning assets, which more than offset an 8 basis point increase in the cost of interest bearing liabilities as compared to the second quarter of 2016.  The increase in the cost of interest bearing liabilities is primarily due to higher rates for certain short term borrowings and interest bearing demand deposits, which includes public funds.  Average interest bearing deposits during the 2017 second quarter increased 12.2%, compared to the second quarter of 2016, as all interest bearing deposit balances increased other than CDs. In addition, the second quarter net interest margin included approximately 8 basis points of accretion from prior acquisitions compared to 7 basis points in the second quarter of 2016, and 8 basis points in the first quarter of 2017.

Net interest income increased $12.4 million, or 20.7%, during the second quarter of 2017 compared to the same quarter of 2016 due to a 23.4% increase in average loan balances and the increase in net interest margin noted above.  Year-to-date, net interest income increased $23.2 million, or 19.4%, as average earning assets increased 14.4% and the net interest margin increased 14 basis points to 3.43%.

Non-Interest Income

For the second quarter of 2017, non-interest income increased $2.5 million, or 12.9%, compared to the second quarter of 2016.  Reflecting improvements in equity markets during the last year, organic growth and higher estate fees, trust fees increased $0.5 million, or 10.6%, and trust assets increased 4.1%. Service charges on deposits increased $0.9 million, or 21.7%, and electronic banking fees increased $1.2 million, or 33.2%, through a larger customer deposit base from the addition of YCB.  Bank-owned life insurance increased $0.4 million primarily due to life insurance benefits accrued in the second quarter of 2017. Other income decreased $0.8 million primarily due to a decrease in commercial customer loan swap income, which was related to a larger commercial project in the prior year period.

For the six month period ending June 30, 2017, non-interest income increased $6.0 million, reflecting similar trends as in the second quarter, while net gains on the sale of mortgage loans increased $1.2 million due to increases in mortgage loans sold into the secondary market, as total mortgage loan volume increased by 15.9% to $188.5 million.  Net securities gains decreased $1.2 million for the six months ended June 30, 2017, primarily due to gains on called securities in 2016 as compared to the six months ended June 30, 2016.   

Non-Interest Expense

Excluding merger-related expenses in both years, non-interest expense in the second quarter of 2017 increased $9.2 million, or 19.8%, compared to the prior year period, principally due to the acquisition.  Salaries and wages increased $3.9 million, or 19.7%, due to an 18.7% increase in full-time equivalent employees primarily from the YCB acquisition, and annual adjustments to compensation effective during the quarter. Employee benefits expense increased $0.4 million, or 5.4%, primarily from higher health insurance costs and payroll taxes associated with the additional employees, which more than offset lower pension expense. Increases in net occupancy and equipment were also primarily related to the additional financial centers from the YCB acquisition. Marketing expense was seasonally higher during the second quarter reflecting advertising campaigns, with the year-over-year increase related to the market expansion from the acquisition.  FDIC insurance decreased 17.6%, even with the acquisition, due to improved risk factors.  Post-conversion cost savings continue to be experienced after the late 2016 branch and system conversions.  Other operating expenses increased $2.1 million, or 22.4%, through increases in miscellaneous taxes, professional fees, postage, and communications primarily due to the YCB acquisition. For the first six months of 2017, non-interest expense increased $17.8 million, or 19.3%, reflecting similar trends as in the second quarter, while payroll taxes were seasonally higher in the first quarter.

Provision for Income Taxes

The provision for income tax increased $3.5 million, or 20.8%, during the first half of 2017 compared to the first half of 2016, due in part to the adoption earlier this year of a new accounting standard related to low income housing investment amortization which, during 2017, moved $0.8 million from other operating expense to the provision for income taxes. In addition, first half of 2017 pre-tax income was 17.4% higher than for the same period of 2016.

Financial Results Conference Call

WesBanco will also host a conference call to discuss the Company's financial results for the second quarter of 2017 at 10:00 a.m. ET on Thursday, July 20, 2017.  Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com. Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 412-902-4290 for international callers, and asking to be joined into the WesBanco call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 412-317-0088 for international callers, and providing the access code of 10099582. The replay will begin at approximately 12:00 p.m. ET on July 20, and end at 12 a.m. ET on August 3. An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).

Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $9.9 billion as of June 30, 2017. WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management. WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with $3.8 billion of assets under management as of June 30, 2017, and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 173 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia. In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

Forward-looking Statements:

Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2016 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q for the quarter ended March 31, 2017, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com.  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A. Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

 

WESBANCO, INC.












Consolidated Selected Financial Highlights



Page 5

(unaudited, dollars in thousands, except shares and per share amounts)

























For the Three Months Ended


For the Six Months Ended

STATEMENT OF INCOME

June 30,


June 30,

Interest and dividend income

2017


2016


% Change


2017


2016


% Change


Loans, including fees

$             67,360


$               52,697


27.8


$          132,258


$             105,035


25.9


Interest and dividends on securities:














Taxable 

9,375


9,775


(4.1)


18,970


19,993


(5.1)



Tax-exempt

4,864


4,540


7.1


9,756


9,061


7.7




Total interest and dividends on securities

14,239


14,315


(0.5)


28,726


29,054


(1.1)


Other interest income 

561


573


(2.1)


1,100


1,097


0.3

          Total interest and dividend income

82,160


67,585


21.6


162,084


135,186


19.9

Interest expense













Interest bearing demand deposits

1,506


643


134.2


2,599


1,150


126.0


Money market deposits

644


450


43.1


1,218


906


34.4


Savings deposits

185


165


12.1


367


330


11.2


Certificates of deposit

2,491


2,583


(3.6)


4,902


5,242


(6.5)




Total interest expense on deposits

4,826


3,841


25.6


9,086


7,628


19.1


Federal Home Loan Bank borrowings

3,145


3,031


3.8


5,980


6,099


(2.0)


Other short-term borrowings

262


99


164.6


560


181


209.4


Subordinated debt and junior subordinated debt 

1,788


840


112.9


3,600


1,663


116.5




Total interest expense

10,021


7,811


28.3


19,226


15,571


23.5

Net interest income 

72,139


59,774


20.7


142,858


119,615


19.4


Provision for credit losses

2,383


1,811


31.6


5,094


4,135


23.2

Net interest income after provision for credit losses

69,756


57,963


20.3


137,764


115,480


19.3

Non-interest income













Trust fees

5,572


5,036


10.6


11,716


10,747


9.0


Service charges on deposits

5,081


4,176


21.7


9,933


8,128


22.2


Electronic banking fees

4,984


3,742


33.2


9,512


7,345


29.5


Net securities brokerage revenue

1,680


1,750


(4.0)


3,442


3,646


(5.6)


Bank-owned life insurance

1,367


942


45.1


2,508


1,915


31.0


Net gains on sales of mortgage loans

968


683


41.7


2,408


1,231


95.6


Net securities gains

494


585


(15.6)


506


1,696


(70.2)


Net gain on other real estate owned and other
assets

342


214


59.8


307


196


56.6


Other income

1,634


2,463


(33.7)


4,674


4,080


14.6




Total non-interest income

22,122


19,591


12.9


45,006


38,984


15.4

Non-interest expense













Salaries and wages

23,616


19,731


19.7


46,618


38,911


19.8


Employee benefits

7,731


7,332


5.4


15,941


14,409


10.6


Net occupancy

4,510


3,220


40.1


8,837


6,811


29.7


Equipment 

4,097


3,402


20.4


8,139


6,830


19.2


Marketing

2,060


1,608


28.1


2,884


2,581


11.7


FDIC insurance 

906


1,099


(17.6)


1,733


2,264


(23.5)


Amortization of intangible assets

1,240


697


77.9


2,513


1,427


76.1


Restructuring and merger-related expense

-


694


(100.0)


491


694


(29.3)


Other operating expenses  

11,724


9,577


22.4


23,112


18,776


23.1




Total non-interest expense

55,884


47,360


18.0


110,268


92,703


18.9

Income before provision for income taxes

35,994


30,194


19.2


72,502


61,761


17.4


Provision for income taxes 

9,653


8,085


19.4


20,274


16,779


20.8

Net Income

$             26,341


$               22,109


19.1


$             52,228


$               44,982


16.1
















Taxable equivalent net interest income

$            74,758


$            62,219


20.2


$          148,111


$          124,494


19.0
















Per common share data












Net income per common share - basic

$                 0.60


$                   0.58


3.4


$                 1.19


$                   1.17


1.7

Net income per common share - diluted

0.60


0.58


3.4


1.19


1.17


1.7

Dividends declared

0.26


0.24


8.3


0.52


0.48


8.3

Book value (period end)







31.29


30.31


3.2

Tangible book value (period end) (1)







17.99


17.64


2.0

Average common shares outstanding - basic

43,995,749


38,373,610


14.7


43,971,789


38,380,296


14.6

Average common shares outstanding - diluted

44,061,421


38,410,393


14.7


44,046,812


38,414,922


14.7

Period end common shares outstanding

44,031,335


38,411,343


14.6


44,031,335


38,411,343


14.6
















(1) See non-GAAP financial measures for additional information relating to the calculation of this item.





 

 

WESBANCO, INC.















Consolidated Selected Financial Highlights









 

Page 6

 

(unaudited, dollars in thousands)




























Selected ratios






















For the Six Months Ended








June 30,









2017


2016


% Change
























Return on average assets





1.07

%

1.06

%

0.94

%






Return on average equity





7.70


7.88


(2.28)







Return on average tangible equity (1)




13.88


13.97


(0.64)







Return on average tangible equity, excluding 















    after-tax merger-related expenses (1)




13.97


14.10


(0.92)







Yield on earning assets (2) 





3.88


3.71


4.58







Cost of interest bearing liabilities




0.59


0.52


13.46







Net interest spread (2)





3.29


3.19


3.13







Net interest margin (2)





3.43


3.29


4.26







Efficiency (1) (2)






56.84


56.28


1.00







Average loans to average deposits




89.36


84.10


6.25







Annualized net loan charge-offs/average loans




0.12


0.10


20.00







Effective income tax rate 





27.96


27.17


2.91

















































































For the Quarter Ended









June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,









2017


2017


2016


2016


2016




















Return on average assets





1.07

%

1.07

%

0.98

%

0.79

%

1.05

%


Return on average equity





7.67


7.73


7.12


5.71


7.69



Return on average tangible equity (1)




13.74


14.03


13.01


10.02


13.55



Return on average tangible equity, excluding 















    after-tax merger-related expenses (1)




13.74


14.20


13.91


13.60


13.82



Yield on earning assets (2) 





3.91


3.85


3.84


3.73


3.71



Cost of interest bearing liabilities




0.61


0.57


0.55


0.53


0.53



Net interest spread (2)





3.30


3.28


3.29


3.20


3.18



Net interest margin (2)





3.45


3.42


3.42


3.32


3.30



Efficiency (1) (2) 






57.68


56.00


58.13


55.81


57.04



Average loans to average deposits




89.51


89.21


87.63


87.26


84.99



Annualized net loan charge-offs/average loans




0.09


0.15


0.08


0.20


0.08



Effective income tax rate 





26.82


29.09


25.90


24.94


26.78



Trust assets, market value at period end




$     3,810,038


$        3,836,107


$        3,723,142


$        3,694,405


$        3,660,736




















(1) See non-GAAP financial measures for additional information relating to the calculation of this item.









(2) The yield on earning assets, net interest margin, net interest spread and efficiency ratios are presented on a fully 







    taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt 







   loans and investments.   WesBanco believes this measure to be the preferred industry measurement of net interest income and






   provides a relevant comparison between taxable and non-taxable amounts.




























 

 

WESBANCO, INC.









Consolidated Selected Financial Highlights





Page 7

(unaudited, dollars in thousands, except shares)





% Change

Balance sheets


June 30,



December 31,

December 31, 2016

Assets



2017


2016


% Change

2016

to June 30, 2017

Cash and due from banks


$           104,189


$          85,788


21.4

$              106,257

(1.9)

Due from banks - interest bearing


6,506


1,838


254.0

21,913

(70.3)

Securities:











Trading securities, at fair value


7,880


6,919


13.9

7,071

11.4


Available-for-sale, at fair value


1,239,420


1,248,016


(0.7)

1,241,176

(0.1)


Held-to-maturity (fair values of $1,049,374; $1,044,644 and $1,076,790, respectively)


1,030,394


997,354


3.3

1,067,967

(3.5)



Total securities


2,277,694


2,252,289


1.1

2,316,214

(1.7)

Loans held for sale


21,677


9,974


117.3

17,315

25.2

Portfolio loans:










Commercial real estate


3,013,727


2,283,198


32.0

2,873,511

4.9


Commercial and industrial


1,136,195


814,055


39.6

1,088,118

4.4


Residential real estate 


1,363,579


1,242,015


9.8

1,383,390

(1.4)


Home equity


516,612


435,187


18.7

508,359

1.6


Consumer 


360,304


395,377


(8.9)

396,058

(9.0)

Total portfolio loans, net of unearned income


6,390,417


5,169,832


23.6

6,249,436

2.3

Allowance for loan losses


(44,909)


(43,328)


(3.6)

(43,674)

(2.8)



Net portfolio loans


6,345,508


5,126,504


23.8

6,205,762

2.3

Premises and equipment, net


134,903


110,611


22.0

133,297

1.2

Accrued interest receivable


28,501


24,588


15.9

28,299

0.7

Goodwill and other intangible assets, net


591,252


490,143


20.6

593,187

(0.3)

Bank-owned life insurance


190,304


152,876


24.5

188,145

1.1

Other assets


173,476


142,813


21.5

180,488

(3.9)

Total Assets


$      9,874,010


$   8,397,424


17.6

$         9,790,877

0.8













Liabilities









Deposits:











Non-interest bearing demand


$        1,801,423


$      1,310,981


37.4

$           1,789,522

0.7


Interest bearing demand


1,625,011


1,208,149


34.5

1,546,890

5.1


Money market


1,005,184


890,584


12.9

995,477

1.0


Savings deposits


1,255,083


1,088,032


15.4

1,213,168

3.5


Certificates of deposit


1,385,772


1,430,353


(3.1)

1,495,822

(7.4)



Total deposits


7,072,473


5,928,099


19.3

7,040,879

0.4

Federal Home Loan Bank borrowings


1,021,592


1,056,970


(3.3)

968,946

5.4

Other short-term borrowings


167,671


79,103


112.0

199,376

(15.9)

Subordinated debt and junior subordinated debt 


164,228


106,196


54.6

163,598

0.4



Total borrowings


1,353,491


1,242,269


9.0

1,331,920

1.6

Accrued interest payable


2,407


2,200


9.4

2,204

9.2

Other liabilities


68,102


60,436


12.7

74,466

(8.5)

Total Liabilities


8,496,473


7,233,004


17.5

8,449,469

0.6













Shareholders' Equity









Preferred stock, no par value; 1,000,000 shares authorized; 










none outstanding


-


-


-

-

-

Common stock, $2.0833 par value; 100,000,000 shares authorized in










2017 and 2016, respectively; 44,041,572;  38,546,042 and 43,931,715 shares










issued, respectively; 44,031,335; 38,411,343 and 43,931,715 shares


91,753


80,304


14.3

91,524

0.3


outstanding, respectively









Capital surplus


682,443


515,156


32.5

680,507

0.3

Retained earnings


626,421


576,483


8.7

597,071

4.9

Treasury stock (10,237; 134,699 and 0 shares - at cost, respectively)


(385)


(3,868)


(90.0)

-

(100.0)

Accumulated other comprehensive loss


(22,118)


(3,097)


(614.2)

(27,126)

18.5

Deferred benefits for directors


(577)


(558)


(3.4)

(568)

(1.6)

Total Shareholders' Equity


1,377,537


1,164,420


18.3

1,341,408

2.7

Total Liabilities and Shareholders' Equity


$      9,874,010


$   8,397,424


17.6

$         9,790,877

0.8

 

 

WESBANCO, INC.






Consolidated Selected Financial Highlights





Page 8

(unaudited, dollars in thousands, except shares)






Balance sheets


June 30,


March 31,


Assets




2017


2017

% Change

Cash and due from banks


$         104,189


$        101,559

2.6

Due from banks - interest bearing


6,506


13,525

(51.9)

Securities:








Trading securities, at fair value


7,880


7,773

1.4


Available-for-sale, at fair value


1,239,420


1,225,069

1.2


Held-to-maturity (fair values of $1,049,374 and 1,071,009, respectively)


1,030,394


1,057,753

(2.6)



Total securities


2,277,694


2,290,595

(0.6)

Loans held for sale


21,677


11,480

88.8

Portfolio Loans:







Commercial real estate


3,013,727


2,952,603

2.1


Commercial and industrial


1,136,195


1,106,719

2.7


Residential real estate 


1,363,579


1,367,132

(0.3)


Home equity


516,612


508,411

1.6


Consumer 


360,304


377,307

(4.5)

Total portfolio loans, net of unearned income


6,390,417


6,312,172

1.2

Allowance for loan losses


(44,909)


(44,061)

(1.9)



Net portfolio loans


6,345,508


6,268,111

1.2

Premises and equipment, net


134,903


134,949

(0.0)

Accrued interest receivable


28,501


28,923

(1.5)

Goodwill and other intangible assets, net


591,252


591,539

(0.0)

Bank-owned life insurance


190,304


189,286

0.5

Other assets



173,476


170,914

1.5

Total Assets


$    9,874,010


$   9,800,881

0.7










Liabilities







Deposits:








Non-interest bearing demand


$      1,801,423


$      1,844,003

(2.3)


Interest bearing demand


1,625,011


1,599,536

1.6


Money market


1,005,184


1,029,440

(2.4)


Savings deposits


1,255,083


1,253,652

0.1


Certificates of deposit


1,385,772


1,419,104

(2.3)



Total deposits


7,072,473


7,145,735

(1.0)

Federal Home Loan Bank borrowings


1,021,592


937,104

9.0

Other short-term borrowings


167,671


115,643

45.0

Subordinated debt and junior subordinated debt 


164,228


164,177

0.0



Total borrowings


1,353,491


1,216,924

11.2

Accrued interest payable


2,407


2,422

(0.6)

Other liabilities


68,102


76,647

(11.1)

Total liabilities


8,496,473


8,441,728

0.6










Shareholders' Equity






Preferred stock, no par value; 1,000,000 shares authorized; 







none outstanding


-


-

-

Common stock, $2.0833 par value; 100,000,000 shares authorized;







44,041,572 and 43,953,051 shares issued, respectively;







44,031,335 and 43,953,051 shares outstanding, respectively


91,753


91,568

0.2

Capital surplus


682,443


681,471

0.1

Retained earnings


626,421


611,528

2.4

Treasury stock (10,237 and 0 shares - at cost)


(385)


-

(100.0)

Accumulated other comprehensive income (loss)


(22,118)


(24,841)

11.0

Deferred benefits for directors


(577)


(573)

0.7

Total Shareholders' Equity


1,377,537


1,359,153

1.4

Total Liabilities and Shareholders' Equity


$    9,874,010


$   9,800,881

0.7

 

 

WESBANCO, INC.


















Consolidated Selected Financial Highlights













Page 9


(unaudited, dollars in thousands)















Average balance sheet and















net interest margin analysis



For the Three Months Ended June 30,




For the Six Months Ended June 30,








2017

2016



2017

2016







Average 

Average



Average 

Average



Average 

Average



Average 

Average


Assets





Balance

Rate



Balance

Rate



Balance

Rate



Balance

Rate


Due from banks - interest bearing



$            12,875

0.75

%


$            20,985

0.72

%


$                 13,398

0.63

%


$           38,805

0.45

%

Loans, net of unearned income (1)



6,365,965

4.24



5,156,789

4.11



6,322,582

4.22



5,124,942

4.12


Securities: (2)




















    Taxable





1,550,114

2.42



1,718,491

2.28



1,576,578

2.41



1,744,438

2.29


    Tax-exempt (3)





720,561

4.15



638,746

4.37



723,593

4.15



635,773

4.39


        Total securities





2,270,675

2.97



2,357,237

2.84



2,300,171

2.95



2,380,211

2.85


Other earning assets 





46,525

4.62



45,354

4.72



46,774

4.52



45,577

4.43


         Total earning assets (3)



8,696,040

3.91

%


7,580,365

3.71

%


8,682,925

3.88

%


7,589,535

3.71

%

Other assets





1,132,435




925,437




1,122,181




939,226



Total Assets





$     9,828,475




$     8,505,802




$          9,805,106




$    8,528,761























Liabilities and Shareholders' Equity


















Interest bearing demand deposits



$        1,634,305

0.37

%


$        1,230,484

0.21

%


$            1,585,564

0.33

%


$      1,209,989

0.19

%

Money market accounts 




1,014,682

0.25



915,879

0.20



1,026,567

0.24



937,846

0.19


Savings deposits





1,253,444

0.06



1,091,950

0.06



1,240,390

0.06



1,088,154

0.06


Certificates of deposit




1,403,818

0.71



1,489,764

0.70



1,428,892

0.69



1,535,061

0.69


    Total interest bearing deposits



5,306,249

0.36



4,728,077

0.33



5,281,413

0.35



4,771,050

0.32


Federal Home Loan Bank borrowings



947,346

1.33



1,021,642

1.19



948,168

1.27



1,031,378

1.19


Other borrowings





153,565

0.68



95,522

0.42



175,341

0.64



91,277

0.40


Subordinated debt and junior subordinated debt 


164,184

4.37



106,196

3.18



164,050

4.43



106,196

3.15


      Total interest bearing liabilities 



6,571,344

0.61

%


5,951,437

0.53

%


6,568,972

0.59

%


5,999,901

0.52

%

Non-interest bearing demand deposits



1,806,144




1,339,436




1,793,897




1,322,853



Other liabilities





73,721




58,006




74,748




57,788



Shareholders' equity





1,377,266




1,156,923




1,367,489




1,148,219



Total Liabilities and Shareholders' Equity



$     9,828,475




$     8,505,802




$          9,805,106




$    8,528,761



Taxable equivalent net interest spread




3.30

%



3.18

%



3.29

%



3.19

%

Taxable equivalent net interest margin 




3.45

%



3.30

%



3.43

%



3.29

%





















(1) Gross of allowance for loan losses and net of unearned income.  Includes non-accrual and loans held for sale.










Loan fees included in interest income on loans are $0.9 million and $0.8 million for the three months ended June 30, 2017 and 2016, respectively. Loan fees included in interest income on loans are

       $1.5 million for both the six months ended June 30, 2017 and 2016.














Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $1.3 million and $0.7 million for the three months ended June 30, 2017 and 2016, respectively, 

      and loan accretion included in interest income was $2.5 million and $1.6 million for the six months ended June 30, 2017 and 2016, respectively.






Accretion on  interest bearing liabilities acquired from the prior acquisitions was $0.4 million for both the three months ended June 30, 2017 and 2016 and $0.9 million for both the six months 


       ended June 30, 2017 and 2016.


















(2) Average yields on available-for-sale securities are calculated based on amortized cost.











(3) Taxable equivalent basis is calculated on tax-exempt securities using a rate of 35% for each period presented.






























 

 

WESBANCO, INC.










Consolidated Selected Financial Highlights






 Page 10 

(unaudited, dollars in thousands, except shares and per share amounts)








Quarter Ended

Statement of Income

June 30,


Mar. 31,


Dec. 31,


Sept.  30,


June 30,

Interest income

2017


2017


2016


2016


2016


Loans, including fees

$                        67,360


$                64,898


$              66,135


$                55,822


$              52,697


Interest and dividends on securities:












Taxable 

9,375


9,596


9,359


9,137


9,775



Tax-exempt

4,864


4,891


4,770


4,559


4,540




Total interest and dividends on securities

14,239


14,488


14,129


13,696


14,315


Other interest income 

561


539


555


574


573

          Total interest and dividend income

82,160


79,924


80,819


70,092


67,585

Interest expense











Interest bearing demand deposits

1,506


1,093


975


691


643


Money market deposits

644


574


510


444


450


Savings deposits

185


181


194


173


165


Certificates of deposit

2,491


2,411


2,585


2,592


2,583




Total interest expense on deposits

4,826


4,259


4,264


3,900


3,841


Federal Home Loan Bank borrowings

3,145


2,836


2,881


3,005


3,031


Other short-term borrowings

262


297


179


118


99


Subordinated debt and junior subordinated debt

1,788


1,813


1,807


1,043


840




Total interest expense

10,021


9,205


9,131


8,066


7,811

Net interest income 

72,139


70,719


71,688


62,026


59,774


Provision for credit losses

2,383


2,711


2,128


2,214


1,811

Net interest income after provision for credit losses

69,756


68,008


69,560


59,812


57,963

Non-interest income











Trust fees

5,572


6,143


5,470


5,413


5,036


Service charges on deposits

5,081


4,853


5,474


4,733


4,176


Electronic banking fees

4,984


4,528


4,268


3,945


3,742


Net securities brokerage revenue

1,680


1,762


1,330


1,473


1,750


Bank-owned life insurance

1,367


1,140


1,154


995


942


Net gains on sales of mortgage loans

968


1,440


484


814


683


Net securities gains

494


12


63


598


585


Net gain / (loss) on other real estate owned and other assets

342


(76)


383


184


214


Other income

1,634


3,082


2,794


2,862


2,463




Total non-interest income

22,122


22,884


21,420


21,017


19,591

Non-interest expense











Salaries and wages

23,616


23,002


24,145


21,225


19,731


Employee benefits

7,731


8,210


7,267


6,275


7,332


Net occupancy

4,510


4,327


4,272


3,647


3,220


Equipment 

4,097


4,042


4,234


3,557


3,402


Marketing

2,060


824


1,515


1,295


1,608


FDIC insurance 

906


827


764


961


1,099


Amortization of intangible assets

1,240


1,273


1,334


837


697


Restructuring and merger-related expense

-


491


2,684


9,883


694


Other operating expenses  

11,724


11,388


12,083


9,921


9,577




Total non-interest expense

55,884


54,384


58,298


57,601


47,360

Income before provision for income taxes

35,994


36,508


32,682


23,228


30,194


Provision for income taxes 

9,653


10,622


8,464


5,793


8,085

Net Income

$                        26,341


$                25,886


$              24,218


$                17,435


$              22,109














Taxable equivalent net interest income

$                       74,758


$               73,353


$             74,256


$               64,481


$             62,219














Per common share data










Net income per common share - basic

$                            0.60


$                    0.59


$                  0.55


$                    0.44


$                  0.58

Net income per common share - diluted

$                            0.60


$                    0.59


$                  0.55


$                    0.44


$                  0.58

Dividends declared

$                            0.26


$                    0.26


$                  0.24


$                    0.24


$                  0.24

Book value (period end)

$                          31.29


$                  30.92


$                30.53


$                  30.71


$                30.31

Tangible book value (period end) (1)

$                          17.99


$                  17.61


$                17.19


$                  17.38


$                17.64

Average common shares outstanding - basic

43,995,749


43,947,563


43,887,781


39,715,516


38,373,610

Average common shares outstanding - diluted

44,061,421


44,020,765


43,935,815


39,743,291


38,410,393

Period end common shares outstanding

44,031,335


43,953,051


43,931,715


43,860,883


38,411,343

Full time equivalent employees

1,959


1,934


1,928


1,936


1,650



























(1) See non-GAAP financial measures for additional information relating to the calculation of this item.





 

 

WESBANCO, INC.












Consolidated Selected Financial Highlights






 Page 11 


(unaudited, dollars in thousands)













Quarter Ended






June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Asset quality data


2017


2017


2016


2016


2016


Non-performing assets:













Troubled debt restructurings - accruing


$           6,841


$           7,194


$           7,646


$           8,605


$           8,979



Non-accrual loans:














Troubled debt restructurings


3,158


3,273


3,546


3,759


4,121




Other non-accrual loans


33,077


36,054


28,238


26,897


28,334




    Total non-accrual loans


36,235


39,327


31,784


30,656


32,455




    Total non-performing loans 


43,076


46,521


39,430


39,261


41,434



Other real estate and repossessed assets


6,723


8,033


8,346


9,794


4,481




Total non-performing assets


$         49,799


$         54,554


$         47,776


$         49,055


$         45,915
















Past due loans (1):













Loans past due 30-89 days


$         16,605


$         11,426


$         16,029


$         17,569


$         10,392



Loans past due 90 days or more


4,210


2,766


3,739


2,392


2,263




Total past due loans


$         20,815


$         14,192


$         19,768


$         19,961


$         12,655
















Criticized and classified loans (2):













Criticized loans


$         39,234


$         36,900


$         24,778


$         35,468


$         26,543



Classified loans


40,468


48,112


49,965


52,909


52,789




Total criticized and classified loans


$         79,702


$         85,012


$         74,743


$         88,377


$         79,332
















Loans past due 30-89 days / total portfolio loans

0.26

%

0.18

%

0.26

%

0.28

%

0.20

%

Loans past due 90 days or more / total portfolio loans

0.07


0.04


0.06


0.04


0.04


Non-performing loans / total portfolio loans


0.67


0.74


0.63


0.63


0.80


Non-performing assets/total portfolio loans, other












real estate and repossessed assets


0.78


0.86


0.76


0.79


0.89


Non-performing assets / total assets


0.50


0.56


0.49


0.50


0.55


Criticized and classified loans / total portfolio loans

1.25


1.35


1.20


1.42


1.53
















Allowance for loan losses












Allowance for loan losses


$         44,909


$         44,061


$         43,674


$         42,755


$         43,328


Provision for credit losses


2,383


2,711


2,128


2,214


1,811


Net loan and deposit account overdraft charge-offs

1,486


2,347


1,213


2,798


1,013
















Annualized net loan charge-offs /average loans

0.09

%

0.15

%

0.08

%

0.20

%

0.08

%

Allowance for loan losses / total portfolio loans

0.70

%

0.70

%

0.70

%

0.69

%

0.84

%

Allowance for loan losses / non-performing loans

1.04

x

0.95

x

1.11

x

1.09

x

1.05

x

Allowance for loan losses / non-performing loans and












loans past due 


0.70

x

0.73

x

0.74

x

0.72

x

0.80

x

































Quarter Ended






June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,






2017


2017


2016


2016


2016


Capital ratios












Tier I leverage capital


10.09

%

9.97

%

9.81

%

10.90

%

9.71

%

Tier I risk-based capital


13.36


13.21


13.16


12.95


13.62


Total risk-based capital


14.38


14.22


14.18


13.95


14.40


Common equity tier 1 capital ratio (CET 1)


11.44


11.28


11.28


11.07


11.88


Average shareholders' equity to average assets

14.01


13.88


13.82


13.91


13.60


Tangible equity to tangible assets (3)


8.53


8.40


8.20


8.26


8.56






























(1) Excludes non-performing loans.












(2) Criticized and classified loans may include loans that are also reported as non-performing or past due.






(3) See non-GAAP financial measures for additional information relating to the calculation of this ratio.




















 

 

NON-GAAP FINANCIAL MEASURES










Page 12

The following non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco's operating performance and trends, and facilitate comparisons with the performance of WesBanco's peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in WesBanco's financial statements.





Three Months Ended


Year to Date 





June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,


June 30,

(unaudited, dollars in thousands, except shares and per share amounts)

2017


2017


2016


2016


2016


2017

2016

Return on average tangible equity:














Net income (annualized)


$             105,653


$         104,982


$           96,344


$           69,361


$           88,922


$     105,322

$        90,458


Plus: amortization of intangibles (annualized) (1)

3,233


3,356


3,451


2,164


1,822


3,294

1,865


Net income before amortization of intangibles (annualized)

108,886


108,338


99,795


71,525


90,744


108,616

92,323


















Average total shareholders' equity

1,377,266


1,357,602


1,352,813


1,214,813


1,156,923


1,367,489

1,148,219


Less: average goodwill and other intangibles, net of def. tax liability

(585,057)


(585,365)


(585,529)


(500,752)


(487,085)


(585,210)

(487,148)


Average tangible equity


$             792,209


$         772,237


$         767,284


$         714,061


$         669,838


$     782,279

$      661,071

















Return on average tangible equity


13.74%


14.03%


13.01%


10.02%


13.55%


13.88%

13.97%

















Return on average tangible equity, excluding after-tax merger-related expenses:














Net income (annualized)


$             105,653


$         104,982


$           96,346


$           69,361


$           88,922


$     105,322

$        90,458


Plus: after-tax merger-related expenses (annualized)  (1)

-


1,294


6,940


25,556


1,814


643

907


Plus: amortization of intangibles (annualized) (1)

3,233


3,356


3,451


2,164


1,822


3,294

1,865


Net income before amortization of intangibles and excluding 














    after-tax merger-related expenses (annualized)

108,886


109,632


106,737


97,081


92,558


109,259

93,230


















Average total shareholders' equity

1,377,266


1,357,602


1,352,813


1,214,813


1,156,923


1,367,489

1,148,219


Less: average goodwill and other intangibles, net of def. tax liability

(585,057)


(585,365)


(585,529)


(500,752)


(487,085)


(585,210)

(487,148)


Average tangible equity


$             792,209


$         772,237


$         767,284


$         714,061


$         669,838


$     782,279

$      661,071

















Return on average tangible equity, excluding after-tax merger-related expenses

13.74%


14.20%


13.91%


13.60%


13.82%


13.97%

14.10%

















Efficiency ratio:
















Non-interest expense


$               55,884


$           54,384


$           58,298


$           57,601


$           47,360


$     110,268

$        92,703


Less: restructuring and merger-related expense

-


(491)


(2,684)


(9,883)


(694)


(491)

(694)


Non-interest expense excluding restructuring and merger-related expense

55,884


53,893


55,614


47,718


46,666


109,777

92,009


















Net interest income on a fully taxable equivalent basis

74,758


73,353


74,256


64,481


62,219


148,111

124,494


Non-interest income


22,122


22,884


21,420


21,017


19,591


45,006

38,984


Net interest income on a fully taxable equivalent basis plus non-interest income

$               96,880


$           96,237


$           95,676


$           85,498


$           81,810


$     193,117

$      163,478


Efficiency Ratio


57.68%


56.00%


58.13%


55.81%


57.04%


56.84%

56.28%

















Net Income, excluding after-tax merger-related expenses:














Net income 



$               26,341


$           25,886


$           24,218


$           17,435


$           22,109


$       52,228

$        44,982


Add: After-tax merger-related expenses (1)

-


319


1,745


6,424


451


319

451

Net income, excluding after-tax merger-related expenses

$               26,341


$           26,205


$           25,963


$           23,859


$           22,560


$       52,547

$        45,433

















Net Income, excluding after-tax merger-related expenses per diluted share:














Net income per diluted share


$                   0.60


$               0.59


$               0.55


$               0.44


$               0.58


$           1.19

$            1.17


Add: After-tax merger-related expenses per diluted share (1)

-


0.01


0.04


0.16


0.01


-

0.01

Net income, excluding after-tax merger-related expenses per diluted share

$                   0.60


$               0.60


$               0.59


$               0.60


$               0.59


$           1.19

$            1.18





































Period End








June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,








2017


2017


2016


2016


2016




Tangible book value per share:















Total shareholders' equity


$          1,377,537


$      1,359,153


$      1,341,408


$      1,347,151


$      1,164,420





Less:  goodwill and other intangible assets, net of def. tax liability

(585,195)


(585,123)


(586,403)


(584,690)


(486,913)





Tangible equity


792,342


774,030


755,005


762,461


677,507





















Common shares outstanding


44,031,335


43,953,051


43,931,715


43,860,883


38,411,343




















Tangible book value per share


$                 17.99


$             17.61


$             17.19


$             17.38


$             17.64




















Tangible equity to tangible assets:














Total shareholders' equity


$          1,377,537


$      1,359,153


$      1,341,408


$      1,347,151


$      1,164,420





Less:  goodwill and other intangible assets, net of def. tax liability

(585,195)


(585,123)


(586,403)


(584,690)


(486,913)





Tangible equity


792,342


774,030


755,005


762,461


677,507





















Total assets



9,874,010


9,800,881


9,790,877


9,812,384


8,397,424





Less:  goodwill and other intangible assets, net of def. tax liability

(585,195)


(585,123)


(586,403)


(584,690)


(486,913)





Tangible assets


$          9,288,815


$      9,215,758


$      9,204,474


$      9,227,694


$      7,910,511




















Tangible equity to tangible assets


8.53%


8.40%


8.20%


8.26%


8.56%




















































































































(1) Tax effected at 35%.














 

View original content:http://www.prnewswire.com/news-releases/wesbanco-announces-second-quarter-2017-net-income-300491026.html

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