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Investor Relation - Press Release

Investor Relation

Press Release

WesBanco Announces Second Quarter 2019 Net Income

Company Release - 7/23/2019 4:22 PM ET

WHEELING, W.Va., July 23, 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 and six months ended June 30, 2019.  Net income for the three months ended June 30, 2019 was $44.8 million, with diluted earnings per share of $0.82, compared to $33.2 million and $0.71 per diluted share, respectively, for the second quarter of 2018.  For the six months ended June 30, 2019, net income was $85.2 million, or $1.56 per diluted share, compared to $66.7 million, or $1.47 per diluted share, for the 2018 period.  Net income excluding after-tax merger-related expenses for the three months ended June 30, 2019, increased 19.9% year-over-year to $44.9 million, or $0.82 per diluted share as compared to $0.80 per diluted share in the prior year quarter, an increase of 2.6% (non-GAAP measures).  On the same basis, net income for the six months ended June 30, 2019 increased 23.2% year-over-year to $87.7 million, or $1.60 per diluted share, up 1.9% when compared to $1.57 per diluted share in the prior year period (non-GAAP measures).




For the Three Months Ended June 30,


For the Six Months Ended June 30,




2019


2018


2019


2018

(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)


$      44,878


$       0.82


$      37,445


$       0.80


$      87,670


$       1.60


$      71,167


$       1.57

Less: After tax merger-related expenses


(64)


(0.00)


(4,276)


(0.09)


(2,519)


(0.04)


(4,469)


(0.10)

Net income (GAAP)


$      44,814


$       0.82


$      33,169


$       0.71


$      85,151


$       1.56


$      66,698


$       1.47


(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:

  • Strong year-to-date returns on average assets and tangible equity of 1.37% and 16.01%, respectively,  and 1.41% and 16.46%, when excluding merger-related expenses (non-GAAP measures)
  • Solid expense management demonstrated by a year-to-date efficiency ratio of 55.38% (non-GAAP measure)
  • Stable quarterly net interest margin on both a reported basis and when excluding purchase accounting accretion
  • Key credit quality metrics, including non-performing assets, past due loans, provision for credit losses, and net loan charge-offs, continue to remain strong
  • Continued improvement in sequential quarter loan growth in the mid-single digits (annualized)
  • Total year-over-year organic growth in non-interest bearing demand deposits was 4.0%, reflecting the core strength of our legacy footprint

"We are pleased with WesBanco's performance during the second quarter of 2019 as we worked diligently to ensure a strong organization for our shareholders," said Todd F. Clossin, President and Chief Executive Officer of WesBanco.  "We continued to see stabilization across loan categories as we generated loan growth on a sequential quarter basis, saw strong production across our commercial loan categories, and our pipelines remain strong."

Mr. Clossin added, "The successful execution of our growth and diversification plans has enabled WesBanco to transform into an emerging regional financial institution built upon a century-old trust business and 150-year old community bank.  During the last three years, we have significantly diversified our institution into new, higher-growth markets with great demographics while maintaining a critical focus on expense management and credit quality.  We remain well-positioned for continued success and are excited about our growth opportunities for the year."

Balance Sheet
Portfolio loans of $7.7 billion, as of June 30, 2019, increased 13.9% when compared to the prior year period due to the acquisition of FFKT.  Reflecting continued stabilization across loan categories, total portfolio loans increased approximately 1% when compared to both the first quarter of 2019 and the fourth quarter of 2018.  Total deposits increased 13.4% year-over-year to $8.7 billion due to the FFKT acquisition.

Credit Quality
Our underlying credit fundamentals continue to be reflective of our strong legacy of credit and risk management.  During the second quarter of 2019, our credit quality ratios remained strong as we balanced disciplined loan origination in the current environment with our prudent lending standards.  As of June 30, 2019, while non-performing loans and non-performing assets remained relatively flat year-over-year on a dollar basis, they both decreased as a percentage of the portfolio.  Criticized and classified loan balances increased year-over-year during the second quarter of 2019 to $114.2 million, or 1.48% of total portfolio loans, reflecting our normal loan grade review process post-acquisition and in conjunction with two downgraded relationships in our legacy portfolio, as reported last quarter.  Reflecting the overall high quality of the loan portfolio, the provision for credit losses held steady as a percentage of the total loan portfolio, and annualized net loan charge-offs to average loans was five basis points.

Net Interest Margin and Income
The net interest margin for the second quarter of 2019 increased 24 basis points year-over-year to 3.67%.  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.  Lastly, accretion from acquisitions benefited the second quarter net interest margin by 18 basis points, which included 3 basis points related to a prior acquisition impaired loan payment, as compared to 12 basis points in the prior year period.

Net interest income increased $16.1 million, or 19.6%, during the second quarter of 2019, as compared to the same quarter of 2018, due to a 11.5% increase in average total earning assets, primarily driven by the FFKT acquisition and related accretion from purchase accounting, as well as an overall higher net interest margin.  For the six months ended June 30, 2019, net interest income increased $41.3 million, or 26.5%, due to higher average total earning assets and an overall higher net interest margin, as discussed for the three-month period comparison.

Non-Interest Income
For the second quarter of 2019, non-interest income of $31.2 million increased $7.7 million, or 33.1%, from the second quarter of 2018, driven by the FFKT acquisition and net securities gains.  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 higher trust assets from the addition of FFKT's trust business.  Net securities gains reflects a $2.6 million gain from the sale of Visa Class B common stock in the current period, as compared to the prior year period.  Other income increased $1.7 million primarily due to an increase in payment processing fee income and higher commercial customer loan swap income.

For the six months ended June 30, 2019, non-interest income increased $11.4 million, or 24.1%. The primary drivers of this increase were higher net securities gains, service charges on deposits, electronic banking fees, and trust fees, as discussed above, partially offset by lower bank-owned life insurance benefits due to mortality-related proceeds in the prior year period.

Non-Interest Expense
Total operating expenses continued to be well-controlled during both the three- and six-month periods ending June 30, 2019.  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 associated with the FFKT acquisition began after the February branch and data processing conversions, and the majority of the anticipated 2019 cost savings related to personnel have occurred by the end of the second quarter.

Excluding merger-related expenses, non-interest expense for the three months ending June 30, 2019 increased $13.7 million, or 23.6%, compared to the prior year period, reflecting the FFKT acquisition.  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 acquisition, as well as intangibles amortization.  FDIC insurance expense increased $0.3 million, or 33.1%, year-over-year due to now being assessed as a large bank with more than $10 billion in total assets.  On a similar basis, non-interest expense during the first half of 2019 increased $30.7 million, or 27.3%, compared to the prior year period, reflecting the acquisitions of FTSB and FFKT.

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 June 30, 2019, Tier I leverage was 11.09%, Tier I Risk-Based capital was 15.39%, Total Risk-Based capital was 16.32%, and the Common Equity Tier 1 capital ratio ("CET 1") was 13.83%.  Tangible common equity also remained strong, increasing to 10.10% at period-end from 8.43% as of June 30, 2018.

Conference Call and Webcast
WesBanco will host a conference call to discuss the Company's financial results for the second quarter of 2019, and the announced merger with Old Line Bancshares, Inc., at 10:00 a.m. ET on Wednesday, July 24, 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 10126868.  The replay will begin at approximately 12:00 p.m. ET on July 24, and end at 12 a.m. ET on August 7.  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"), including WesBanco's Form 10-Q for the quarter ended March 31, 2019, 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, that the businesses of WesBanco and Old Line Bancshares, Inc. ("Old Line") may not be integrated successfully or such integration may take longer to accomplish than excepted; the expected cost savings and any revenue synergies from the merger of WesBanco and Old Line may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and Old Line may make it more difficult to maintain relationships with clients, associates, or suppliers; 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.

Additional Information About the Merger and Where to Find It
On July 23, 2019, WesBanco and WesBanco Bank, Inc. ("WesBanco Bank") entered into an Agreement and Plan of Merger with Old Line and Old Line Bank, Inc. ("Old Line Bank"), pursuant to which Old Line will be merged with and into WesBanco, with WesBanco being the surviving company (the "Merger"), and Old Line Bank will be merged with and into WesBanco Bank, with WesBanco Bank the surviving bank. In connection with the proposed Merger, WesBanco will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Old Line and WesBanco and a Prospectus of WesBanco, as well as other relevant documents concerning the proposed transaction. SHAREHOLDERS OF WESBANCO, STOCKHOLDERS OF OLD LINE AND OTHER INTERESTED PARTIES ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The Proxy Statement/Prospectus will be mailed to shareholders of WesBanco and stockholders of Old Line prior to the respective shareholder and stockholder meetings, which have not yet been scheduled. In addition, when the Registration Statement on Form S-4, which will include the Proxy Statements/Prospectus, and other related documents are filed by WesBanco with the SEC, they may be obtained for free at the SEC's website at http://www.sec.gov, and from either WesBanco's or Old Line's website at http://www.wesbanco.com or http://www.oldlinebank.com, respectively.

Participants in the Solicitation
WesBanco and Old Line and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of WesBanco and the stockholders of Old Line in connection with the proposed Merger. Information about the directors and executive officers of WesBanco is set forth in the proxy statement for WesBanco's 2019 annual meeting of shareholders, as filed with the SEC on March 13, 2019 and as supplemented on April 5, 2019.  Information about the directors and executive officers of Old Line is set forth in the proxy statement for Old Line's 2019 annual meeting of stockholders, as filed with the SEC on April 26, 2019.  Information about any other persons who may, under the rules of the SEC, be considered participants in the solicitation of WesBanco shareholders or Old Line stockholders in connection with the proposed Merger will be included in the Proxy Statement/Prospectus. You can obtain free copies of these documents from the SEC, WesBanco or Old Line using the website information above.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

WESBANCO SHAREHOLDERS AND OLD LINE STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS WITH RESPECT TO THE PROPOSED MERGER.

About WesBanco, Inc.
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $12.5 billion (as of June 30, 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 June 30, 2019), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 199 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 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

2019


2018


% Change


2019


2018


% Change


Loans, including fees

$             96,415


$               78,538


22.8


$          191,917


$             147,671


30.0


Interest and dividends on securities:














Taxable 

16,444


14,194


15.9


33,175


25,738


28.9



Tax-exempt

5,142


5,055


1.7


10,684


9,890


8.0




Total interest and dividends on securities

21,586


19,249


12.1


43,859


35,628


23.1


Other interest income 

1,542


1,101


40.1


2,820


1,904


48.1

          Total interest and dividend income

119,543


98,888


20.9


238,596


185,203


28.8

Interest expense













Interest bearing demand deposits

4,314


3,150


37.0


8,259


5,673


45.6


Money market deposits

2,009


1,093


83.8


3,908


1,972


98.2


Savings deposits

678


227


198.7


1,200


416


188.5


Certificates of deposit

4,098


2,977


37.7


8,001


5,513


45.1




Total interest expense on deposits

11,099


7,447


49.0


21,368


13,574


57.4


Federal Home Loan Bank borrowings

6,287


5,953


5.6


12,624


10,451


20.8


Other short-term borrowings

1,483


973


52.4


3,039


1,532


98.4


Subordinated debt and junior subordinated debt 

2,214


2,168


2.1


4,743


4,110


15.4




Total interest expense

21,083


16,541


27.5


41,774


29,667


40.8

Net interest income 

98,460


82,347


19.6


196,822


155,536


26.5


Provision for credit losses

2,747


1,708


60.8


5,254


3,876


35.6

Net interest income after provision for credit losses

95,713


80,639


18.7


191,568


151,660


26.3

Non-interest income













Trust fees

6,339


5,752


10.2


13,454


12,255


9.8


Service charges on deposits

6,197


5,146


20.4


12,747


9,969


27.9


Electronic banking fees

7,154


5,728


24.9


13,046


10,558


23.6


Net securities brokerage revenue

1,973


1,809


9.1


3,833


3,479


10.2


Bank-owned life insurance

1,340


1,128


18.8


2,659


3,884


(31.5)


Mortgage banking income

1,618


1,670


(3.1)


2,674


2,776


(3.7)


Net securities gains

2,909


358


712.6


3,566


319


1,017.9


Net gain on other real estate owned and other assets

376


229


64.2


512


491


4.3


Other income

3,250


1,588


104.7


6,438


3,760


71.2




Total non-interest income

31,156


23,408


33.1


58,929


47,491


24.1

Non-interest expense













Salaries and wages

31,646


26,872


17.8


62,585


51,878


20.6


Employee benefits

9,705


7,965


21.8


19,694


14,877


32.4


Net occupancy

5,385


4,103


31.2


10,951


8,759


25.0


Equipment 

4,818


4,095


17.7


9,651


8,044


20.0


Marketing

1,254


1,405


(10.7)


2,497


2,521


(1.0)


FDIC insurance 

1,155


868


33.1


2,508


1,526


64.4


Amortization of intangible assets

2,465


1,312


87.9


4,978


2,397


107.7


Restructuring and merger-related expense

81


5,412


(98.5)


3,188


5,657


(43.6)


Other operating expenses  

15,443


11,511


34.2


30,333


22,455


35.1




Total non-interest expense

71,952


63,543


13.2


146,385


118,114


23.9

Income before provision for income taxes

54,917


40,504


35.6


104,112


81,037


28.5


Provision for income taxes 

10,103


7,335


37.7


18,961


14,339


32.2

Net Income

$             44,814


$               33,169


35.1


$             85,151


$               66,698


27.7
















Taxable equivalent net interest income

$            99,827


$            83,691


19.3


$          199,662


$          158,165


26.2
















Per common share data












Net income per common share - basic

$                 0.82


$                   0.71


15.5


$                 1.56


$                   1.47


6.1

Net income per common share - diluted

0.82


0.71


15.5


1.56


1.47


6.1

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

0.82


0.80


2.5


1.60


1.57


1.9

Dividends declared

0.31


0.29


6.9


0.62


0.58


6.9

Book value (period end)

37.92


32.68


16.0


37.92


32.68


16.0

Tangible book value (period end) (1)

21.40


18.59


15.1


21.40


18.59


15.1

Average common shares outstanding - basic

54,628,029


46,498,305


17.5


54,613,346


45,281,264


20.6

Average common shares outstanding - diluted

54,773,521


46,639,780


17.4


54,724,209


45,417,010


20.5

Period end common shares outstanding

54,697,199


46,643,250


17.3


54,697,199


46,643,250


17.3
















(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 6

(unaudited, dollars in thousands)


































Selected ratios
























For the Six Months Ended









June 30,










2019


2018


% Change


























Return on average assets





1.37

%

1.29

%

6.20

%







Return on average assets, excluding
















    after-tax merger-related expenses




1.41


1.37


2.92








Return on average equity





8.47


9.22


(8.13)








Return on average equity, excluding
















    after-tax merger-related expenses




8.72


9.83


(11.29)








Return on average tangible equity (1)




16.01


16.46


(2.73)








Return on average tangible equity, excluding 
















    after-tax merger-related expenses




16.46


17.53


(6.10)








Yield on earning assets (2) 





4.45


4.05


9.88








Cost of interest bearing liabilities




1.07


0.86


24.42








Net interest spread (2)





3.38


3.19


5.96








Net interest margin (2)





3.68


3.41


7.92








Efficiency (1) (2)






55.38


54.68


1.28








Average loans to average deposits




87.18


88.68


(1.69)








Annualized net loan charge-offs/average loans




0.06


0.05


20.00








Effective income tax rate 





18.21


17.69


2.94






















































































For the Quarter Ended










June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,










2019


2019


2018


2018


2018






















Return on average assets





1.44

%

1.31

%

1.39

%

1.10

%

1.22

%



Return on average assets, excluding
















    after-tax merger-related expenses




1.44


1.39


1.42


1.39


1.38




Return on average equity





8.77


8.17


8.94


7.50


8.77




Return on average equity, excluding
















    after-tax merger-related expenses




8.78


8.67


9.16


9.47


9.90




Return on average tangible equity (1)




16.35


15.65


17.67


14.25


15.87




Return on average tangible equity, excluding 
















    after-tax merger-related expenses




16.38


16.56


18.09


17.85


17.85




Yield on earning assets (2) 





4.45


4.45


4.42


4.21


4.11




Cost of interest bearing liabilities




1.08


1.06


0.97


0.95


0.91




Net interest spread (2)





3.37


3.39


3.45


3.26


3.20




Net interest margin (2)





3.67


3.68


3.72


3.50


3.43




Efficiency (1) (2) 






54.87


55.89


53.62


55.55


54.28




Average loans to average deposits




87.35


87.01


85.94


87.56


88.15




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

0.05


0.07


0.14


(0.02)


0.03




Effective income tax rate 





18.40


18.01


19.37


16.71


18.11




Trust assets, market value at period end




$     4,544,103


$        4,514,013


$        4,269,961


$        4,743,894


$        4,044,207






















(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, 2018

Assets



2019


2018


% Change

2018

to March 31, 2019

Cash and due from banks


$           157,965


$        101,905


55.0

$              124,650

26.7

Due from banks - interest bearing


36,390


53,654


(32.2)

44,536

(18.3)

Securities:










     Equity securities, at fair value


11,817


13,494


(12.4)

11,737

0.7

     Available-for-sale debt securities, at fair value


2,129,284


1,796,571


18.5

2,114,129

0.7

     Held-to-maturity debt securities (fair values of $921,534; $1,016,111 









     and $1,020,743, respectively)


900,605


1,019,746


(11.7)

1,020,934

(11.8)

          Total securities


3,041,706


2,829,811


7.5

3,146,800

(3.3)

Loans held for sale


18,649


12,053


54.7

8,994

107.3

Portfolio loans:









     Commercial real estate


3,877,633


3,189,335


21.6

3,853,695

0.6

     Commercial and industrial


1,300,577


1,294,488


0.5

1,265,460

2.8

     Residential real estate 


1,633,613


1,450,829


12.6

1,611,607

1.4

     Home equity


590,303


535,653


10.2

599,331

(1.5)

     Consumer 


335,728


322,594


4.1

326,188

2.9

Total portfolio loans, net of unearned income


7,737,854


6,792,899


13.9

7,656,281

1.1

Allowance for loan losses


(50,859)


(47,638)


(6.8)

(48,948)

(3.9)

          Net portfolio loans


7,686,995


6,745,261


14.0

7,607,333

1.0

Premises and equipment, net


179,866


131,502


36.8

166,925

7.8

Accrued interest receivable


38,450


33,868


13.5

38,853

(1.0)

Goodwill and other intangible assets, net


914,678


661,616


38.2

918,850

(0.5)

Bank-owned life insurance


227,976


191,701


18.9

225,317

1.2

Other assets


191,978


185,213


3.7

176,374

8.8

Total Assets


$    12,494,653


$ 10,946,584


14.1

$       12,458,632

0.3













Liabilities









Deposits:










     Non-interest bearing demand


$        2,481,065


$      2,046,537


21.2

$           2,441,041

1.6

     Interest bearing demand


2,079,795


1,809,140


15.0

2,146,508

(3.1)

     Money market


1,098,917


1,051,043


4.6

1,142,925

(3.9)

     Savings deposits


1,670,035


1,385,356


20.5

1,645,549

1.5

     Certificates of deposit


1,365,116


1,376,528


(0.8)

1,455,610

(6.2)

          Total deposits


8,694,928


7,668,604


13.4

8,831,633

(1.5)

Federal Home Loan Bank borrowings


1,121,283


1,248,406


(10.2)

1,054,174

6.4

Other short-term borrowings


296,148


258,067


14.8

290,522

1.9

Subordinated debt and junior subordinated debt 


156,534


165,420


(5.4)

189,842

(17.5)

          Total borrowings


1,573,965


1,671,893


(5.9)

1,534,538

2.6

Accrued interest payable


6,559


4,417


48.5

4,627

41.8

Other liabilities


145,085


77,564


87.1

109,007

33.1

Total Liabilities


10,420,537


9,422,478


10.6

10,479,805

(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









          2019 and 2018, respectively; 54,697,251,  44,655,012 and 54,604,294 shares









     issued, respectively; 54,697,199, 46,643,250 and 54,598,134 shares


113,952


97,197


17.2

113,758

0.2

     outstanding, respectively









Capital surplus


1,168,212


789,038


48.1

1,166,701

0.1

Retained earnings


788,900


692,820


13.9

737,581

7.0

Treasury stock ( 52, 11,762 and 6,160 shares - at cost, respectively)


(2)


(555)


99.6

(274)

99.3

Accumulated other comprehensive income/(loss)


4,113


(53,352)


107.7

(37,871)

110.9

Deferred benefits for directors


(1,059)


(1,042)


(1.6)

(1,068)

0.8

Total Shareholders' Equity


2,074,116


1,524,106


36.1

1,978,827

4.8

Total Liabilities and Shareholders' Equity


$    12,494,653


$ 10,946,584


14.1

$       12,458,632

0.3

 

 

WESBANCO, INC.







Consolidated Selected Financial Highlights




Page 8

(unaudited, dollars in thousands, except shares)





Balance sheets



June 30,


March 31,


Assets




2019


2019

% Change

Cash and due from banks


$        157,965


$       159,097

(0.7)

Due from banks - interest bearing


36,390


177,797

(79.5)

Securities:







     Equity securities, at fair value


11,817


11,978

(1.3)

     Available-for-sale debt securities, at fair value

2,129,284


2,145,089

(0.7)

     Held-to-maturity debt securities (fair values of $921,534 and $948,641, respectively)

900,605


936,484

(3.8)

          Total securities


3,041,706


3,093,551

(1.7)

Loans held for sale



18,649


8,358

123.1

Portfolio Loans:







     Commercial real estate


3,877,633


3,842,408

0.9

     Commercial and industrial


1,300,577


1,274,992

2.0

     Residential real estate 


1,633,613


1,628,067

0.3

     Home equity



590,303


590,462

(0.0)

     Consumer 



335,728


330,152

1.7

Total portfolio loans, net of unearned income

7,737,854


7,666,081

0.9

Allowance for loan losses


(50,859)


(48,866)

(4.1)

          Net portfolio loans


7,686,995


7,617,215

0.9

Premises and equipment, net


179,866


180,651

(0.4)

Accrued interest receivable


38,450


39,662

(3.1)

Goodwill and other intangible assets, net


914,678


915,597

(0.1)

Bank-owned life insurance


227,976


226,636

0.6

Other assets



191,978


182,844

5.0

Total Assets



$ 12,494,653


$12,601,408

(0.8)










Liabilities







Deposits:








     Non-interest bearing demand


$     2,481,065


$     2,511,140

(1.2)

     Interest bearing demand


2,079,795


2,159,654

(3.7)

     Money market



1,098,917


1,148,295

(4.3)

     Savings deposits



1,670,035


1,672,967

(0.2)

     Certificates of deposit


1,365,116


1,424,275

(4.2)

          Total deposits


8,694,928


8,916,331

(2.5)

Federal Home Loan Bank borrowings


1,121,283


1,031,796

8.7

Other short-term borrowings


296,148


301,547

(1.8)

Subordinated debt and junior subordinated debt 

156,534


179,632

(12.9)

          Total borrowings


1,573,965


1,512,975

4.0

Accrued interest payable


6,559


6,030

8.8

Other liabilities



145,085


142,933

1.5

Total liabilities



10,420,537


10,578,269

(1.5)










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;





     54,697,251 and 54,604,294 shares issued, respectively;





     54,697,199 and 54,599,127 shares outstanding, respectively

113,952


113,758

0.2

Capital surplus



1,168,212


1,167,761

0.0

Retained earnings



788,900


761,002

3.7

Treasury stock (52 and 5,167 shares - at cost)

(2)


(229)

99.2

Accumulated other comprehensive income / (loss)

4,113


(18,098)

122.7

Deferred benefits for directors


(1,059)


(1,055)

0.4

Total Shareholders' Equity


2,074,116


2,023,139

2.5

Total Liabilities and Shareholders' Equity

$ 12,494,653


$12,601,408

(0.8)

 

 

WESBANCO, INC.



















Consolidated Selected Financial Highlights
















Page 9


(unaudited, dollars in thousands)


















Average balance sheet and



















net interest margin analysis




Three Months Ended June 30,



Six Months Ended June 30,








2019

2018



2019

2018







Average 

Average



Average 

Average



Average 

Average



Average 

Average


Assets





Balance

Rate



Balance

Rate



Balance

Rate



Balance

Rate


Due from banks - interest bearing



$            72,563

3.46

%


$            53,896

2.09

%


$                 74,774

2.55

%


$           31,436

2.08

%

Loans, net of unearned income (1)



7,700,355

5.02



6,785,550

4.64



7,680,062

5.04



6,563,782

4.54


Securities: (2)




















    Taxable





2,336,099

2.82



2,128,446

2.67



2,344,929

2.83



1,959,828

2.63


    Tax-exempt (3)





741,371

3.51



750,138

3.41



775,845

3.49



733,970

3.41


        Total securities





3,077,470

2.98



2,878,584

3.05



3,120,774

2.99



2,693,798

2.84


Other earning assets 





50,555

7.26



57,259

5.72



51,330

7.28



53,843

5.86


         Total earning assets (3)



10,900,943

4.45

%


9,775,289

4.11

%


10,926,940

4.45

%


9,342,859

4.05

%

Other assets





1,588,720




1,143,442




1,572,988




1,115,743



Total Assets





$   12,489,663




$   10,918,731




$        12,499,928




$  10,458,602























Liabilities and Shareholders' Equity


















Interest bearing demand deposits



$        2,139,372

0.81

%


$        1,849,035

0.68

%


$            2,134,514

0.78

%


$      1,773,813

0.64

%

Money market accounts 




1,116,124

0.72



1,035,567

0.42



1,135,237

0.69



1,020,486

0.39


Savings deposits





1,676,477

0.16



1,367,193

0.07



1,668,160

0.15



1,327,875

0.06


Certificates of deposit




1,397,167

1.18



1,415,259

0.84



1,417,703

1.14



1,328,724

0.84


    Total interest bearing deposits



6,329,140

0.70



5,667,054

0.53



6,355,614

0.68



5,450,898

0.50


Federal Home Loan Bank borrowings



1,008,027

2.50



1,180,939

2.02



1,030,396

2.47



1,109,586

1.90


Other borrowings





320,269

1.86



272,208

1.43



324,033

1.89



238,707

1.29


Subordinated debt and junior subordinated debt 



164,108

5.41



172,972

5.03



176,746

5.41



168,677

4.91


      Total interest bearing liabilities 



7,821,544

1.08

%


7,293,173

0.91

%


7,886,789

1.07

%


6,967,868

0.86

%

Non-interest bearing demand deposits



2,486,710




2,030,649




2,453,770




1,950,581



Other liabilities





131,219




77,873




132,657




80,681



Shareholders' equity





2,050,190




1,517,036




2,026,712




1,459,472



Total Liabilities and Shareholders' Equity



$   12,489,663




$   10,918,731




$        12,499,928




$  10,458,602



Taxable equivalent net interest spread




3.37

%



3.20

%



3.38

%



3.19

%

Taxable equivalent net interest margin 




3.67

%



3.43

%



3.68

%



3.41

%









































(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 $0.4 million and $0.7million for the three months ended June 30, 2019 and 2018 and $0.9 million and $1.3 million for






the six months ended June 30, 2019 and 2018, respectively.
















Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $4.7 million and $2.2 million for the three months ended June 30, 2019 and 2018



and $9.6 million and $3.4 million  for the six months ended June 30, 2019 and 2018, respectively.














Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.3 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively, 





and $0.7 million and $0.9 million  for the six months ended June 30, 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 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 and dividend income

2019


2019


2018


2018


2018


Loans, including fees

$                        96,415


$                95,502


$              97,685


$                86,605


$              78,538


Interest and dividends on securities:












Taxable 

16,444


16,733


16,196


14,964


14,194



Tax-exempt

5,142


5,541


5,562


5,326


5,055




Total interest and dividends on securities

21,586


22,274


21,758


20,290


19,249


Other interest income 

1,542


1,277


1,944


1,498


1,101

          Total interest and dividend income

119,543


119,053


121,387


108,393


98,888

Interest expense











Interest bearing demand deposits

4,314


3,946


4,000


3,501


3,150


Money market deposits

2,009


1,899


1,683


1,360


1,093


Savings deposits

678


522


452


352


227


Certificates of deposit

4,098


3,903


3,662


3,276


2,977




Total interest expense on deposits

11,099


10,270


9,797


8,489


7,447


Federal Home Loan Bank borrowings

6,287


6,337


6,191


6,691


5,953


Other short-term borrowings

1,483


1,556


1,221


965


973


Subordinated debt and junior subordinated debt

2,214


2,529


2,411


2,315


2,168




Total interest expense

21,083


20,692


19,620


18,460


16,541

Net interest income 

98,460


98,361


101,767


89,933


82,347


Provision for credit losses

2,747


2,507


2,854


1,035


1,708

Net interest income after provision for credit losses

95,713


95,854


98,913


88,898


80,639

Non-interest income











Trust fees

6,339


7,115


6,103


6,265


5,752


Service charges on deposits

6,197


6,549


7,387


6,313


5,146


Electronic banking fees

7,154


5,892


6,604


6,139


5,728


Net securities brokerage revenue

1,973


1,860


1,871


1,836


1,809


Bank-owned life insurance

1,340


1,319


1,312


1,232


1,128


Mortgage banking income

1,618


1,056


1,543


1,521


1,670


Net securities gains/(losses)

2,909


657


(1,303)


84


358


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

376


136


(117)


150


229


Other income

3,250


3,189


3,161


2,684


1,588




Total non-interest income

31,156


27,773


26,561


26,224


23,408

Non-interest expense











Salaries and wages

31,646


30,940


32,389


30,335


26,872


Employee benefits

9,705


9,989


7,298


7,905


7,965


Net occupancy

5,385


5,566


5,455


4,957


4,103


Equipment 

4,818


4,833


4,667


4,488


4,095


Marketing

1,254


1,243


1,402


1,446


1,405


FDIC insurance 

1,155


1,353


927


789


868


Amortization of intangible assets

2,465


2,514


2,762


1,821


1,312


Restructuring and merger-related expense

81


3,107


1,389


10,811


5,412


Other operating expenses  

15,443


14,887


14,701


13,568


11,511




Total non-interest expense

71,952


74,432


70,990


76,120


63,543

Income before provision for income taxes

54,917


49,195


54,484


39,002


40,504


Provision for income taxes 

10,103


8,858


10,556


6,516


7,335

Net Income

$                        44,814


$                40,337


$              43,928


$                32,486


$              33,169














Taxable equivalent net interest income

$                       99,827


$                99,834


$           103,246


$               91,348


$             83,691














Per common share data










Net income per common share - basic

$                            0.82


$                    0.74


$                  0.80


$                    0.65


$                  0.71

Net income per common share - diluted

0.82


0.74


0.80


0.64


0.71

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

0.82


0.78


0.82


0.81


0.80

Dividends declared

0.31


0.31


0.29


0.29


0.29

Book value (period end)

37.92


37.05


36.24


35.30


32.68

Tangible book value (period end) (1)

21.40


20.49


19.63


18.54


18.59

Average common shares outstanding - basic

54,628,029


54,598,499


54,598,142


50,277,847


46,498,305

Average common shares outstanding - diluted

54,773,521


54,706,337


54,706,691


50,432,112


46,639,780

Period end common shares outstanding

54,697,199


54,599,127


54,598,134


54,603,967


46,643,250

Full time equivalent employees

2,353


2,329


2,388


2,404


2,040



























(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 11 


(unaudited, dollars in thousands)
















Quarter Ended






June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Asset quality data


2019


2019


2018


2018


2018


Non-performing assets:













Troubled debt restructurings - accruing


$           5,487


$           5,481


$           5,744


$           6,338


$           6,460



Non-accrual loans:














Troubled debt restructurings


1,924


2,936


2,855


2,036


2,514




Other non-accrual loans


30,974


27,291


27,845


29,238


29,467




    Total non-accrual loans


32,898


30,227


30,700


31,274


31,981




    Total non-performing loans 


38,385


35,708


36,444


37,612


38,441



Other real estate and repossessed assets


4,973


6,001


7,265


6,877


4,384




Total non-performing assets


$         43,358


$         41,709


$         43,709


$         44,489


$         42,825
















Past due loans (1):













Loans past due 30-89 days


$         15,446


$         21,433


$         19,569


$         18,016


$         13,357



Loans past due 90 days or more


2,634


2,740


4,077


2,451


1,881




Total past due loans


$         18,080


$         24,173


$         23,646


$         20,467


$         15,238
















Criticized and classified loans (2):













Criticized loans


$         73,236


$         69,691


$         51,710


$         46,370


$         34,045



Classified loans


41,004


39,412


31,244


31,437


38,982




Total criticized and classified loans


$       114,240


$       109,103


$         82,954


$         77,807


$         73,027
















Loans past due 30-89 days / total portfolio loans

0.20

%

0.28

%

0.26

%

0.23

%

0.20

%

Loans past due 90 days or more / total portfolio loans

0.03


0.04


0.05


0.03


0.03


Non-performing loans / total portfolio loans


0.50


0.47


0.48


0.49


0.57


Non-performing assets/total portfolio loans, other












real estate and repossessed assets


0.56


0.54


0.57


0.58


0.63


Non-performing assets / total assets


0.35


0.33


0.35


0.35


0.39


Criticized and classified loans / total portfolio loans

1.48


1.42


1.08


1.01


1.08
















Allowance for loan losses












Allowance for loan losses


$         50,859


$         48,866


$         48,948


$         48,902


$         47,638


Provision for credit losses


2,747


2,507


2,854


1,035


1,708


Net loan and deposit account overdraft charge-offs

947


1,370


2,750


(306)


425
















Annualized net loan charge-offs /average loans

0.05

%

0.07

%

0.14

%

(0.02)

%

0.03

%

Allowance for loan losses / total portfolio loans

0.66

%

0.64

%

0.64

%

0.63

%

0.70

%

Allowance for loan losses / non-performing loans

1.32

x

1.37

x

1.34

x

1.30

x

1.24

x

Allowance for loan losses / non-performing loans and












loans past due 


0.90

x

0.82

x

0.81

x

0.84

x

0.89

x

































Quarter Ended






June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,






2019


2019


2018


2018


2018


Capital ratios












Tier I leverage capital


11.09

%

10.98

%

10.74

%

11.22

%

10.21

%

Tier I risk-based capital


15.39


15.31


15.09


14.32


14.26


Total risk-based capital


16.32


16.22


15.99


15.20


15.26


Common equity tier 1 capital ratio (CET 1)


13.83


13.48


13.14


12.41


12.38


Average shareholders' equity to average assets

16.42


16.01


15.51


14.65


13.89


Tangible equity to tangible assets (3)


10.10


9.57


9.28


8.66


8.43






























(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)

2019


2019


2018


2018


2018


2019

2018

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














Net income (annualized)


$             179,748


$         163,589


$         174,280


$         128,886


$         133,039


$         171,713

$      134,501


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

257


9,954


4,353


33,885


17,150


5,079

9,012


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

180,005


173,543


178,633


162,771


150,189


176,792

143,513


















Average total assets


$        12,489,663


$    12,510,032


$    12,565,880


$    11,738,796


$    10,918,731


$    12,499,928

$ 10,458,602

















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

1.44%


1.39%


1.42%


1.39%


1.38%


1.41%

1.37%

















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














Net income (annualized)


$             179,748


$         163,589


$         174,280


$         128,886


$         133,039


$         171,713

$      134,501


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

257


9,954


4,353


33,885


17,150


5,079

9,012


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

180,005


173,543


178,633


162,771


150,189


176,792

143,513


















Average total shareholders' equity

2,050,190


2,002,710


1,949,530


1,719,489


1,517,036


2,026,712

1,459,472

















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

8.78%


8.67%


9.16%


9.47%


9.90%


8.72%

9.83%

















Return on average tangible equity:














Net income (annualized)


$             179,748


$         163,589


$         174,280


$         128,886


$         133,039


$         171,713

$      134,501


Plus: amortization of intangibles (annualized) (1)

7,811


8,055


8,657


5,707


4,156


7,930

3,819