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Investor Relation - Press Release

Investor Relation

Press Release

WesBanco Announces First Quarter 2019 Net Income

Company Release - 4/16/2019 4:15 PM ET

WHEELING, W.Va., April 16, 2019 /PRNewswire/ -- WesBanco, Inc. ("WesBanco") (Nasdaq: WSBC), a diversified, multi-state bank holding company, today announced net income and related earnings per share for the three months ended March 31, 2019.  Net income for the three months ended March 31, 2019 was $40.3 million, with diluted earnings per share of $0.74, compared to $33.5 million and $0.76 per diluted share, respectively, for the first quarter of 2018.  Net income excluding after-tax merger-related expenses for the three months ended March 31, 2019, increased 26.9% year-over-year to $42.8 million, or $0.78 per diluted share as compared to $0.76 per diluted share in the prior year quarter, an increase of 2.6% (non-GAAP measure).  




For the Three Months Ended March 31,




2019


2018

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


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share

Net income (Non-GAAP)(1)


$     42,791


$      0.78


$    33,722


$      0.76

Less: After tax merger-related expenses


(2,454)


(0.04)


(193)


-

Net income (GAAP)


$     40,337


$      0.74


$    33,529


$      0.76


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

WesBanco Logo (PRNewsfoto/WesBanco, Inc.)

On April 5, 2018, WesBanco consummated the merger with First Sentry Bancshares, Inc. ("FTSB"), a bank holding company headquartered in Huntington, WV with $0.7 billion in assets, excluding goodwill.  In addition, on August 20, 2018, WesBanco consummated the merger with Farmers Capital Bank Corporation ("FFKT"), a bank holding company headquartered in Frankfort, KY with approximately $1.6 billion in assets, excluding goodwill.  Financial results for both FTSB and FFKT have been included in WesBanco's results from their respective merger consummation dates.

Financial and operational highlights:

  • Completed the data systems and signage conversion of FFKT, and consolidated six financial centers during the first quarter
  • Strong core returns on average assets and tangible equity of 1.39% and 16.56%, respectively (non-GAAP measures)
  • Sequential and year-over-year improvement in the net interest margin reflects the benefits of the FFKT acquisition and our core deposit funding advantage
  • Continued solid expense management demonstrated by a relatively stable efficiency ratio of 55.89% (non-GAAP measure)
  • Continued strength across key credit quality metrics, including non-performing assets, past due loans, provision for credit losses, and net loan charge-offs
  • Quarterly cash dividend increased 6.9%, or two cents, to $0.31 per share
  • Named to Forbes magazine's inaugural ranking of the World's Best Banks, which was based on customer satisfaction and consumer feedback, earning the #7 ranking in the United States

"We are pleased with WesBanco's performance during the first quarter of 2019 as we successfully completed the integration of Farmers Capital," said Todd F. Clossin, President and Chief Executive Officer of WesBanco.  "We continue to diligently adhere to our core strategies, which have served us well, to ensure a strong organization for our shareholders, customers, and employees.  We remain well-positioned for continued success, and are excited about our growth opportunities for the upcoming year."

Mr. Clossin added, "I am extremely proud that WesBanco has been named one of the ten best banks in America by our customers, as we earned solid scores across the survey, including very high scores for 'general satisfaction', 'trust', and 'customer services'.  WesBanco prides itself on delivering large bank capabilities with a community bank feel, as our customer-centric service culture is focused on building long-term customer relationships."

Balance Sheet
Portfolio loans of $7.7 billion, as of March 31, 2019, increased 21.3% when compared to the prior year period due to the acquisitions of FTSB and FFKT.  Reflecting continued stabilization across loan categories, total portfolio loans were flat when compared to the fourth quarter of 2018.  

Total deposits increased 23.4% year-over-year to $8.9 billion due to the FTSB and FFKT acquisitions and organic growth from the strength of our legacy footprint.  Reflecting this core strength, total organic growth in non-interest bearing demand deposits was 4.8%.

Credit Quality
Our underlying credit fundamentals continue to be reflective of our strong legacy of credit and risk management.  During the first quarter of 2019, our credit quality ratios remained strong as we balanced disciplined loan origination in the current environment with our prudent lending standards.  Most credit quality measures have been at or near historic lows over the last several periods and, as such, variability from quarter to quarter may occur.

As of March 31, 2019, non-performing loans and non-performing assets decreased year-over-year on both an absolute dollar basis and as a percentage of the portfolio.  Criticized and classified loan balances increased during the first quarter of 2019 to $109.3 million, or 1.42% of total portfolio loans, as part of our normal loan grade review process post-acquisition and in conjunction with two downgraded relationships in our legacy portfolio.  The downgraded loans were from different industries, and no trends were evident.

Reflecting the overall high quality of the loan portfolio, the provision for credit losses held steady on an absolute dollar basis and as a percentage of the total loan portfolio.  Annualized net loan charge-offs to average loans were flat at seven basis points year-over-year.

Net Interest Margin and Income
The net interest margin for the first quarter of 2019 increased 30 basis points year-over-year to 3.68%.  The net interest margin benefited from increases in the Federal Reserve Board's target federal funds rate during 2018 and the higher margin on the acquired FFKT net assets, partially offset by higher funding costs as well as a flattening of the yield curve.  The increase in the cost of interest bearing liabilities was primarily due to higher rates for interest bearing public funds, higher tier money market accounts, and Federal Home Loan Bank and other borrowings.  Further, reflecting the benefit of our legacy deposit footprint, the year-to-date deposit beta on the three federal funds rate increases since the year ago quarter was 24%, or only 16% when including the strong growth in non-interest bearing deposits.  Lastly, accretion from acquisitions benefited the first quarter net interest margin by approximately 19 basis points, as compared to 6 basis points in the prior year period, and 23 basis points in the fourth quarter of last year.  Approximately three basis points of accretion in the first quarter was the result of a payoff of a prior acquisition's impaired loan.

Net interest income increased $25.1 million, or 34.2%, during the first quarter of 2019, as compared to the same quarter of 2018, due to a 23.0% increase in average total earning assets, primarily driven by the FTSB and FFKT acquisitions and related accretion from purchase accounting, as well as an overall higher net interest margin.

Non-Interest Income
For the first quarter of 2019, non-interest income of $27.8 million increased $3.8 million, or 15.8%, from the first quarter of 2018, driven mostly by the FTSB and FFKT acquisitions.  The associated larger customer deposit base and higher transaction volumes resulted in the year-over-year increases in electronic banking fees and service charges on deposits.  Trust fees increased year-over-year primarily due to the higher trust assets from the addition of FFKT's trust business and organic growth.  Other income increased $1.0 million primarily due to an increase in payment processing fee income.  BOLI income decreased year-over-year due to mortality-related proceeds in the prior year period.

Non-Interest Expense
Total operating expenses continued to be well controlled during the first quarter of 2019, despite the inclusion of FFKT's operating expenses.  The FFKT cost savings of 35% announced in April 2018 remain on track for 75% of the anticipated savings to be achieved during 2019, and 100% thereafter.  Focused expense savings began shortly after the February branch and data processing conversions.  Excluding merger-related expenses, non-interest expense increased $17.0 million, or 31.3%, compared to the prior year period, reflecting the two acquisitions.  This year-over-year increase is primarily due to higher salaries and wages, employee benefits, net occupancy, and equipment costs associated with additional staffing and financial center locations from the two acquisitions, as well as intangibles amortization.  The employee benefits increase was impacted by a $0.6 million market adjustment in the deferred compensation plan obligation, which is mostly offset in net securities gains, and $0.7 million in higher seasonal payroll taxes, as well as higher health care and pension costs.  FDIC insurance expense increased $0.7 million, or 105.6%, year-over-year due to now being assessed as a large bank with more than $10 billion in total assets.

Provision for Income Taxes
During the first quarter, the effective tax rate was 18.01%, compared to 17.28% last year, while the provision for income taxes increased $1.9 million to $8.9 million due to higher year-over-year pre-tax income.

Capital
WesBanco continues to maintain strong regulatory capital ratios as 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.  At March 31, 2019, Tier I leverage was 10.98%, Tier I Risk-Based capital was 15.31%, Total Risk-Based capital was 16.22%, and the Common Equity Tier 1 capital ratio ("CET 1") was 13.47%.  Tangible common equity also remained strong, increasing to 9.57% at period-end from 8.46% as of March 31, 2018.  Record earnings achieved during 2018, strong regulatory capital and liquidity positions, and solid execution on well-defined long-term operational and growth strategies enabled WesBanco to increase the quarterly cash dividend by 6.9%, or two cents, to $0.31 per share during February 2019.  This was the twelfth increase during the last nine years, representing a cumulative increase of 121%.

Conference Call and Webcast
WesBanco will host a conference call to discuss the Company's financial results for the first quarter of 2019 at 3:00 p.m. ET on Wednesday, April 17, 2019.  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 10126867.  The replay will begin at approximately 5:00 p.m. ET on April 17, and end at 12 a.m. ET on May 1.  An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).

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, 2018 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), 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; cyber-security breaches; 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.

About WesBanco, Inc.
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $12.6 billion (as of March 31, 2019).  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 approximately $4.5 billion of assets under management (as of March 31, 2019), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 203 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.

 

 










WESBANCO, INC.






Consolidated Selected Financial Highlights




Page 4

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
















For the Three Months Ended

STATEMENT OF INCOME

March 31,

Interest and dividend income

2019


2018


% Change


Loans, including fees

$             95,502


$               69,237


37.9


Interest and dividends on securities:








Taxable 

16,733


11,543


45.0



Tax-exempt

5,541


4,834


14.6




Total interest and dividends on securities

22,274


16,377


36.0


Other interest income 

1,277


803


59.0

          Total interest and dividend income

119,053


86,417


37.8

Interest expense







Interest bearing demand deposits

3,946


2,524


56.3


Money market deposits

1,899


878


116.3


Savings deposits

522


189


176.2


Certificates of deposit

3,903


2,536


53.9




Total interest expense on deposits

10,270


6,127


67.6


Federal Home Loan Bank borrowings

6,337


4,498


40.9


Other short-term borrowings

1,556


558


178.9


Subordinated debt and junior subordinated debt 

2,529


1,942


30.2




Total interest expense

20,692


13,125


57.7

Net interest income 

98,361


73,292


34.2


Provision for credit losses

2,507


2,168


15.6

Net interest income after provision for credit losses

95,854


71,124


34.8

Non-interest income







Trust fees

7,115


6,503


9.4


Service charges on deposits

6,549


4,822


35.8


Electronic banking fees

5,892


4,829


22.0


Net securities brokerage revenue

1,860


1,670


11.4


Bank-owned life insurance

1,319


2,756


(52.1)


Mortgage banking income

1,056


1,004


5.2


Net securities gains/(losses)

657


(39)


1,784.6


Net gain on other real estate owned and other assets

136


262


(48.1)


Other income

3,189


2,173


46.8




Total non-interest income

27,773


23,980


15.8

Non-interest expense







Salaries and wages

30,940


25,006


23.7


Employee benefits

9,989


6,912


44.5


Net occupancy

5,566


4,656


19.5


Equipment 

4,833


3,949


22.4


Marketing

1,243


1,116


11.4


FDIC insurance 

1,353


658


105.6


Amortization of intangible assets

2,514


1,086


131.5


Restructuring and merger-related expense

3,107


245


1,168.2


Other operating expenses  

14,887


10,943


36.0




Total non-interest expense

74,432


54,571


36.4

Income before provision for income taxes

49,195


40,533


21.4


Provision for income taxes 

8,858


7,004


26.5

Net Income

$             40,337


$               33,529


20.3










Taxable equivalent net interest income

$            99,834


$            74,577


33.9










Per common share data






Net income per common share - basic

$                 0.74


$                   0.76


(2.6)

Net income per common share - diluted

0.74


0.76


(2.6)

Net income per common share - diluted, excluding certain items (1)(2)

0.78


0.76


2.6

Dividends declared

0.31


0.29


6.9

Book value (period end)

37.05


31.68


17.0

Tangible book value (period end) (1)

20.49


18.56


10.4

Average common shares outstanding - basic

54,598,499


44,050,701


23.9

Average common shares outstanding - diluted

54,706,337


44,168,242


23.9

Period end common shares outstanding

54,599,127


44,060,957


23.9










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



(2) Certain items excluded from the calculation consist of after-tax merger-related expenses.




 

 

WESBANCO, INC.













Consolidated Selected Financial Highlights









Page 5

(unaudited, dollars in thousands)




























Selected ratios





















For the Three Months Ended








March 31,









2019


2018


% Change
























Return on average assets





1.31

%

1.36

%

(3.68)

%






Return on average assets, excluding















    after-tax merger-related expenses




1.39


1.37


1.46







Return on average equity





8.17


9.70


(15.77)







Return on average equity, excluding















    after-tax merger-related expenses




8.67


9.76


(11.17)







Return on average tangible equity (1)




15.65


17.10


(8.48)







Return on average tangible equity, excluding 















    after-tax merger-related expenses




16.56


17.20


(3.72)







Yield on earning assets (2) 





4.45


3.98


11.81







Cost of interest bearing liabilities




1.06


0.80


32.50







Net interest spread (2)





3.39


3.18


6.60







Net interest margin (2)





3.68


3.38


8.88







Efficiency (1) (2)






55.89


55.12


1.40







Average loans to average deposits




87.01


89.26


(2.52)







Annualized net loan charge-offs/average loans




0.07


0.07


-







Effective income tax rate 





18.01


17.28


4.22

















































































For the Quarter Ended









Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,









2019


2018


2018


2018


2018




















Return on average assets





1.31

%

1.39

%

1.10

%

1.22

%

1.36

%


Return on average assets, excluding















    after-tax merger-related expenses




1.39


1.42


1.39


1.38


1.37



Return on average equity





8.17


8.94


7.50


8.77


9.70



Return on average equity, excluding















    after-tax merger-related expenses




8.67


9.16


9.47


9.90


9.76



Return on average tangible equity (1)




15.65


17.67


14.25


15.87


17.10



Return on average tangible equity, excluding 















    after-tax merger-related expenses




16.56


18.09


17.85


17.85


17.20



Yield on earning assets (2) 





4.45


4.42


4.21


4.11


3.98



Cost of interest bearing liabilities




1.06


0.97


0.95


0.91


0.80



Net interest spread (2)





3.39


3.45


3.26


3.20


3.18



Net interest margin (2)





3.68


3.72


3.50


3.43


3.38



Efficiency (1) (2) 






55.89


53.62


55.55


54.28


55.12



Average loans to average deposits




87.01


85.94


87.56


88.15


89.26



Annualized net loan charge-offs (recoveries)/average loans

0.07


0.14


(0.02)


0.03


0.07



Effective income tax rate 





18.01


19.37


16.71


18.11


17.28



Trust assets, market value at period end




$     4,514,013


$        4,269,961


$        4,743,894


$        4,044,207


$        4,027,358




















(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 6

(unaudited, dollars in thousands, except shares)





% Change

Balance sheets


March 31,



December 31,

December 31, 2018

Assets



2019


2018


% Change

2018

to March 31, 2019

Cash and due from banks


$           159,097


$          91,361


74.1

$              124,650

27.6

Due from banks - interest bearing


177,797


9,484


1,774.7

44,536

299.2

Securities:











Equity securities, at fair value


11,978


13,986


(14.4)

11,737

2.1


Available-for-sale debt securities, at fair value


2,145,089


1,728,377


24.1

2,114,129

1.5


Held-to-maturity debt securities (fair values of $948,641; $1,005,502 










and $1,020,743, respectively)


936,484


1,006,042


(6.9)

1,020,934

(8.3)



Total securities


3,093,551


2,748,405


12.6

3,146,800

(1.7)

Loans held for sale


8,358


12,962


(35.5)

8,994

(7.1)

Portfolio loans:










Commercial real estate


3,842,408


3,015,226


27.4

3,853,695

(0.3)


Commercial and industrial


1,274,992


1,118,333


14.0

1,265,460

0.8


Residential real estate 


1,628,067


1,345,993


21.0

1,611,607

1.0


Home equity


590,462


523,425


12.8

599,331

(1.5)


Consumer 


330,152


319,561


3.3

326,188

1.2

Total portfolio loans, net of unearned income


7,666,081


6,322,538


21.3

7,656,281

0.1

Allowance for loan losses


(48,866)


(46,334)


(5.5)

(48,948)

0.2



Net portfolio loans


7,617,215


6,276,204


21.4

7,607,333

0.1

Premises and equipment, net


180,651


128,583


40.5

166,925

8.2

Accrued interest receivable


39,662


31,963


24.1

38,853

2.1

Goodwill and other intangible assets, net


915,597


588,339


55.6

918,850

(0.4)

Bank-owned life insurance


226,636


191,839


18.1

225,317

0.6

Other assets


182,844


166,279


10.0

176,374

3.7

Total Assets


$    12,601,408


$ 10,245,419


23.0

$       12,458,632

1.1













Liabilities









Deposits:











Non-interest bearing demand


$        2,511,140


$      1,950,619


28.7

$           2,441,041

2.9


Interest bearing demand


2,159,654


1,768,977


22.1

2,146,508

0.6


Money market


1,148,295


984,429


16.6

1,142,925

0.5


Savings deposits


1,672,967


1,314,632


27.3

1,645,549

1.7


Certificates of deposit


1,424,275


1,207,669


17.9

1,455,610

(2.2)



Total deposits


8,916,331


7,226,326


23.4

8,831,633

1.0

Federal Home Loan Bank borrowings


1,031,796


1,166,939


(11.6)

1,054,174

(2.1)

Other short-term borrowings


301,547


207,653


45.2

290,522

3.8

Subordinated debt and junior subordinated debt 


179,632


164,379


9.3

189,842

(5.4)



Total borrowings


1,512,975


1,538,971


(1.7)

1,534,538

(1.4)

Accrued interest payable


6,030


4,033


49.5

4,627

30.3

Other liabilities


142,933


73,063


95.6

109,007

31.1

Total Liabilities


10,578,269


8,842,393


19.6

10,479,805

0.9













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











2019 and 2018, respectively; 54,604,294,  44,060,957 and 54,604,294 shares










issued, respectively; 54,599,127, 44,060,957 and 54,598,134 shares


113,758


91,793


23.9

113,758

-


outstanding, respectively









Capital surplus


1,167,761


686,169


70.2

1,166,701

0.1

Retained earnings


761,002


673,174


13.0

737,581

3.2

Treasury stock (5,167,  0 and 6,160 shares - at cost, respectively)


(229)


-


(100.0)

(274)

16.4

Accumulated other comprehensive loss


(18,098)


(47,076)


61.6

(37,871)

52.2

Deferred benefits for directors


(1,055)


(1,034)


(2.0)

(1,068)

1.2

Total Shareholders' Equity


2,023,139


1,403,026


44.2

1,978,827

2.2

Total Liabilities and Shareholders' Equity


$    12,601,408


$ 10,245,419


23.0

$       12,458,632

1.1

 

 

WESBANCO, INC.











Consolidated Selected Financial Highlights





Page 7


(unaudited, dollars in thousands)







Average balance sheet and








net interest margin analysis





Three Months Ended March 31,








2019

2018








Average 

Average



Average 

Average


Assets






Balance

Rate



Balance

Rate


Due from banks - interest bearing




$                 76,731

1.70

%


$            8,727

2.06

%

Loans, net of unearned income (1)




7,659,542

5.06



6,339,550

4.43


Securities: (2)













    Taxable






2,353,856

2.84



1,789,336

2.58


    Tax-exempt (3)






810,702

3.46



717,624

3.41


        Total securities






3,164,558

3.00



2,506,960

2.82


Other earning assets 






52,114

7.30



50,388

6.02


         Total earning assets (3)




10,952,945

4.45

%


8,905,625

3.98

%

Other assets






1,557,087




1,087,739



Total Assets






$        12,510,032




$    9,993,364
















Liabilities and Shareholders' Equity











Interest bearing demand deposits




$            2,129,601

0.75

%


$      1,697,755

0.60

%

Money market accounts 





1,154,563

0.67



1,005,236

0.35


Savings deposits






1,659,751

0.13



1,288,120

0.06


Certificates of deposit





1,438,468

1.10



1,241,228

0.83


    Total interest bearing deposits




6,382,383

0.65



5,232,339

0.47


Federal Home Loan Bank borrowings




1,053,014

2.44



1,037,441

1.76


Other borrowings






327,839

1.92



204,833

1.10


Subordinated debt and junior subordinated debt 




189,524

5.41



164,334

4.79


      Total interest bearing liabilities 




7,952,760

1.06

%


6,638,947

0.80

%

Non-interest bearing demand deposits




2,420,462




1,869,624



Other liabilities






134,100




83,522



Shareholders' equity






2,002,710




1,401,271



Total Liabilities and Shareholders' Equity




$        12,510,032




$    9,993,364



Taxable equivalent net interest spread





3.39

%



3.18

%

Taxable equivalent net interest margin 





3.68

%



3.38

%



























(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 $0.6 million for both the three months ended March 31, 2019 and 2018.



Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $4.9 and $1.2 million 





for the three months ended March 31, 2019 and 2018, respectively. Accretion on interest bearing liabilities acquired from the





 prior acquisitions was $0.4 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively.



(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 21% for each period presented.



 

 

WESBANCO, INC.









Consolidated Selected Financial Highlights






 Page 8 

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









Quarter Ended

Statement of Income

Mar. 31,


Dec. 31,


Sept.  30,


June 30,


Mar. 31,

Interest and dividend income

2019


2018


2018


2018


2018


Loans, including fees

$                        95,502


$                97,685


$              86,605


$                78,538


$              69,237


Interest and dividends on securities:












Taxable 

16,733


16,196


14,964


14,194


11,543



Tax-exempt

5,541


5,562


5,326


5,055


4,834




Total interest and dividends on securities

22,274


21,758


20,290


19,249


16,377


Other interest income 

1,277


1,944


1,498


1,101


803

          Total interest and dividend income

119,053


121,387


108,393


98,888


86,417

Interest expense











Interest bearing demand deposits

3,946


4,000


3,501


3,150


2,524


Money market deposits

1,899


1,683


1,360


1,093


878


Savings deposits

522


452


352


227


189


Certificates of deposit

3,903


3,662


3,276


2,977


2,536




Total interest expense on deposits

10,270


9,797


8,489


7,447


6,127


Federal Home Loan Bank borrowings

6,337


6,191


6,691


5,953


4,498


Other short-term borrowings

1,556


1,221


965


973


558


Subordinated debt and junior subordinated debt

2,529


2,411


2,315


2,168


1,942




Total interest expense

20,692


19,620


18,460


16,541


13,125

Net interest income 

98,361


101,767


89,933


82,347


73,292


Provision for credit losses

2,507


2,854


1,035


1,708


2,168

Net interest income after provision for credit losses

95,854


98,913


88,898


80,639


71,124

Non-interest income











Trust fees

7,115


6,103


6,265


5,752


6,503


Service charges on deposits

6,549


7,387


6,313


5,146


4,822


Electronic banking fees

5,892


6,604


6,139


5,728


4,829


Net securities brokerage revenue

1,860


1,871


1,836


1,809


1,670


Bank-owned life insurance

1,319


1,312


1,232


1,128


2,756


Mortgage banking income

1,056


1,543


1,521


1,670


1,004


Net securities gains/(losses)

657


(1,303)


84


358


(39)


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

136


(117)


150


229


262


Other income

3,189


3,161


2,684


1,588


2,173




Total non-interest income

27,773


26,561


26,224


23,408


23,980

Non-interest expense











Salaries and wages

30,940


32,389


30,335


26,872


25,006


Employee benefits

9,989


7,298


7,905


7,965


6,912


Net occupancy

5,566


5,455


4,957


4,103


4,656


Equipment 

4,833


4,667


4,488


4,095


3,949


Marketing

1,243


1,402


1,446


1,405


1,116


FDIC insurance 

1,353


927


789


868


658


Amortization of intangible assets

2,514


2,762


1,821


1,312


1,086


Restructuring and merger-related expense

3,107


1,389


10,811


5,412


245


Other operating expenses  

14,887


14,701


13,568


11,511


10,943




Total non-interest expense

74,432


70,990


76,120


63,543


54,571

Income before provision for income taxes

49,195


54,484


39,002


40,504


40,533


Provision for income taxes 

8,858


10,556


6,516


7,335


7,004

Net Income

$                        40,337


$                43,928


$              32,486


$                33,169


$              33,529














Taxable equivalent net interest income

$                       99,834


$              103,246


$             91,348


$               83,691


$             74,577














Per common share data










Net income per common share - basic

$                            0.74


$                    0.80


$                  0.65


$                    0.71


$                  0.76

Net income per common share - diluted

0.74


0.80


0.64


0.71


0.76

Net income per common share - diluted, excluding certain items (1)(2)

0.78


0.82


0.81


0.80


0.76

Dividends declared

0.31


0.29


0.29


0.29


0.29

Book value (period end)

37.05


36.24


35.30


32.68


31.84

Tangible book value (period end) (1)

20.49


19.63


18.54


18.59


18.56

Average common shares outstanding - basic

54,598,499


54,598,142


50,277,847


46,498,305


44,050,701

Average common shares outstanding - diluted

54,706,337


54,706,691


50,432,112


46,639,780


44,168,242

Period end common shares outstanding

54,599,127


54,598,134


54,603,967


46,643,250


44,060,957

Full time equivalent employees

2,329


2,388


2,404


2,040


1,939



























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





(2) Certain items excluded from the calculation consist of after-tax merger-related expenses and the net deferred tax asset revaluation.





 

 















WESBANCO, INC.












Consolidated Selected Financial Highlights









 Page 9 


(unaudited, dollars in thousands)
















Quarter Ended






Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,


Asset quality data


2019


2018


2018


2018


2018


Non-performing assets:













Troubled debt restructurings - accruing


$          5,481


$          5,744


$           6,338


$           6,460


$           6,858



Non-accrual loans:














Troubled debt restructurings


2,936


2,855


2,036


2,514


2,397




Other non-accrual loans


27,291


27,845


29,238


29,467


29,989




    Total non-accrual loans


30,227


30,700


31,274


31,981


32,386




    Total non-performing loans 


35,708


36,444


37,612


38,441


39,244



Other real estate and repossessed assets


6,001


7,265


6,877


4,384


4,067




Total non-performing assets


$        41,709


$         43,709


$         44,489


$         42,825


$         43,311
















Past due loans (1):













Loans past due 30-89 days


$         21,433


$         19,569


$         18,016


$         13,357


$         14,536



Loans past due 90 days or more


2,740


4,077


2,451


1,881


1,579




Total past due loans


$         24,173


$         23,646


$         20,467


$         15,238


$         16,115
















Criticized and classified loans (2):













Criticized loans


$        69,691


$         51,710


$         46,370


$         34,045


$         33,785



Classified loans


39,412


31,244


31,437


38,982


34,566




Total criticized and classified loans


$      109,103


$         82,954


$         77,807


$         73,027


$         68,351
















Loans past due 30-89 days / total portfolio loans

0.28

%

0.26

%

0.23

%

0.20

%

0.23

%

Loans past due 90 days or more / total portfolio loans

0.04


0.05


0.03


0.03


0.02


Non-performing loans / total portfolio loans


0.47


0.48


0.49


0.57


0.62


Non-performing assets/total portfolio loans, other












real estate and repossessed assets


0.54


0.57


0.58


0.63


0.68


Non-performing assets / total assets


0.33


0.35


0.35


0.39


0.42


Criticized and classified loans / total portfolio loans

1.42


1.08


1.01


1.08


1.08
















Allowance for loan losses












Allowance for loan losses


$         48,866


$         48,948


$         48,902


$         47,638


$         46,334


Provision for credit losses


2,507


2,854


1,035


1,708


2,168


Net loan and deposit account overdraft charge-offs

1,370


2,750


(306)


425


1,063
















Annualized net loan charge-offs /average loans

0.07

%

0.14

%

(0.02)

%

0.02

%

0.07

%

Allowance for loan losses / total portfolio loans

0.64

%

0.64

%

0.63

%

0.70

%

0.73

%

Allowance for loan losses / non-performing loans

1.37

x

1.34

x

1.30

x

1.24

x

1.18

x

Allowance for loan losses / non-performing loans and












loans past due 


0.82

x

0.81

x

0.84

x

0.89

x

0.84

x

































Quarter Ended






Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,






2019


2018


2018


2018


2018


Capital ratios












Tier I leverage capital


10.98

%

10.74

%

11.22

%

10.21

%

10.56

%

Tier I risk-based capital


15.31


15.09


14.32


14.26


14.31


Total risk-based capital


16.22


15.99


15.20


15.26


15.35


Common equity tier 1 capital ratio (CET 1)


13.47


13.14


12.41


12.38


12.33


Average shareholders' equity to average assets

16.01


15.51


14.65


13.89


14.02


Tangible equity to tangible assets (3)


9.57


9.28


8.66


8.43


8.46






























(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








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





Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,

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

2019


2018


2018


2018


2018

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











Net income (annualized)


$             163,589


$         174,280


$         128,886


$         133,039


$         135,979


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

9,954


4,353


33,885


17,150


784


Net income excluding after-tax merger-related expenses (annualized)

173,543


178,633


162,771


150,189


136,763















Average total assets


$        12,510,032


$    12,565,880


$    11,738,796


$    10,918,731


$      9,993,364














Return on average assets, excluding after-tax merger-related expenses

1.39%


1.42%


1.39%


1.38%


1.37%














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











Net income (annualized)


$             163,589


$         174,280


$         128,886


$         133,039


$         135,979


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

9,954


4,353


33,885


17,150


784


Net income excluding after-tax merger-related expenses (annualized)

173,543


178,633


162,771


150,189


136,763















Average total shareholders' equity

2,002,710


1,949,530


1,719,489


1,517,036


1,401,271














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

8.67%


9.16%


9.47%


9.90%


9.76%














Return on average tangible equity:











Net income (annualized)


$             163,589


$         174,280


$         128,886


$         133,039


$         135,979


Plus: amortization of intangibles (annualized) (1)

8,055


8,657


5,707


4,156


3,479


Net income before amortization of intangibles (annualized)

171,644


182,937


134,593


137,195


139,458















Average total shareholders' equity

2,002,710


1,949,530


1,719,489


1,517,036


1,401,271


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

(906,041)


(914,214)


(775,267)


(652,318)


(585,711)


Average tangible equity


$          1,096,669


$      1,035,316


$         944,222


$         864,718


$         815,560














Return on average tangible equity

15.65%


17.67%


14.25%


15.87%


17.10%














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











Net income (annualized)


$             163,589


$         174,280


$         128,886


$         133,039


$         135,979


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

9,954


4,353


33,885


17,150


784


Plus: amortization of intangibles (annualized) (1)

8,055


8,657


5,707


4,156


3,479


Net income before amortization of intangibles and excluding 











    after-tax merger-related expenses (annualized)

181,598


187,290


168,478


154,345


140,242















Average total shareholders' equity

2,002,710


1,949,530


1,719,489


1,517,036


1,401,271


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

(906,041)


(914,214)


(775,267)


(652,318)


(585,711)


Average tangible equity


$          1,096,669


$      1,035,316


$         944,222


$         864,718


$         815,560














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

16.56%


18.09%


17.85%


17.85%


17.20%














Efficiency ratio:













Non-interest expense


$               74,432


$           70,990


$           76,120


$           63,543


$           54,571


Less: restructuring and merger-related expense

(3,107)


(1,389)


(10,811)


(5,412)


(245)


Non-interest expense excluding restructuring and merger-related expense

71,325


69,601


65,309


58,131


54,326















Net interest income on a fully taxable equivalent basis

99,834


103,246


91,348


83,691


74,577


Non-interest income


27,773


26,561


26,224


23,408


23,980


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

$             127,607


$         129,807


$         117,572


$         107,099


$           98,557


Efficiency Ratio


55.89%


53.62%


55.55%


54.28%


55.12%














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











Net income



$               40,337


$           43,928


$           32,486


$           33,169


$           33,529


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

2,454


1,097


8,541


4,276


193

Net income, excluding after-tax merger-related expenses

$               42,791


$           45,025


$           41,027


$           37,445


$           33,722



























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











Net income per diluted share

$                   0.74


$               0.80


$               0.64


$               0.71


$               0.76


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

0.04


0.02


0.17


0.09


-

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

$                   0.78


$               0.82


$               0.81


$               0.80


$               0.76































Period End





Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,





2019


2018


2018


2018


2018

Tangible book value per share:











Total shareholders' equity

$          2,023,139


$      1,978,827


$      1,927,269


$      1,524,106


$      1,403,026


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

(904,144)


(906,887)


(915,022)


(657,111)


(585,316)


Tangible equity


1,118,995


1,071,940


1,012,247


866,995


817,711















Common shares outstanding

54,599,127


54,598,134


54,603,967


46,643,250


44,060,957














Tangible book value per share


$                 20.49


$             19.63


$             18.54


$             18.59


$             18.56














Tangible equity to tangible assets:











Total shareholders' equity

$          2,023,139


$      1,978,827


$      1,927,269


$      1,524,106


$      1,403,026


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

(904,144)


(906,887)


(915,022)


(657,111)


(585,316)


Tangible equity


1,118,995


1,071,940


1,012,247


866,995


817,711















Total assets



12,601,408


12,458,632


12,599,479


10,946,584


10,245,419


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

(904,144)


(906,887)


(915,022)


(657,111)


(585,316)


Tangible assets


$        11,697,264


$    11,551,745


$    11,684,457


$    10,289,473


$      9,660,103














Tangible equity to tangible assets

9.57%


9.28%


8.66%


8.43%


8.46%



























(1) Tax effected at 21% for all periods presented.










 

 

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