Attached files
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| 8-K - FORM 8-K ON 1ST QTR 2014 EARNINGS RELEASE - WESBANCO INC | fin8k042214.htm |
NEWS FOR IMMEDIATE RELEASE
April 22, 2014 For Further Information Contact:
Paul M. Limbert
President and Chief Executive Officer
or
Robert H. Young
Executive Vice President and Chief Financial Officer
(304) 234-9000
NASDAQ Symbol: WSBC
Website: www.wesbanco.com
WesBanco Announces Increase in Net Income
Wheeling, WV… Paul M. Limbert, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ Global Market: WSBC), a Wheeling, West Virginia based multi-state bank holding company, today announced an increase in earnings per share and related net income for the three months ended March 31, 2014.
Net income for the three months ended March 31, 2014 was $16.4 million, compared to $15.4 million for the fourth quarter of 2013, representing an increase of 7.0%, while diluted earnings per share were $0.56, compared to $0.52 per share for the fourth quarter of 2013, representing an increase of 7.7%. As compared to the first quarter of 2013, net income increased 2.5% and diluted earnings per share increased by 1.8%. The increase in net income improved the return on average assets to 1.08% in the first quarter compared to 0.99% in the 2013 fourth quarter, and the return on tangible equity (non-GAAP measure) increased to 15.4% compared to 14.6%. Both ratios are above fourth quarter 2013 peer group averages, the most recent available.
Mr. Limbert commented, "We are very pleased with our first quarter results and operating accomplishments, as well as the opportunity to share the success with our shareholders by increasing the quarterly dividend rate $0.02 per share or 10% to $0.22 per share paid on April 1st. The quarterly dividend has increased 16% since April 1st of last year. WesBanco continued to produce strong earnings in the first quarter of 2014 by increasing net interest income through growth in assets and substantial reductions in cost of funds. Significant improvements in trust fees and securities brokerage revenue contributed to revenue growth. Credit quality improvements again reduced non-performing, delinquent, criticized and classified loans. To provide additional opportunity to grow loans and deposits, we opened two new branches in the Columbus market over the past few months and we are currently constructing another branch in the southern portion of the Pittsburgh market. While we were improving our branch network, substantial data processing and other infrastructure improvements completed in 2013 have contributed to our ability to control growth in expenses.”
Financial Condition
Total assets at March 31, 2014 increased 2.7% or $162.1 million from March 31, 2013, primarily due to loan growth. Portfolio loans increased $203.3 million or 5.5% over the last year. Loan growth was achieved through $1.5 billion in loan originations over the last twelve months. This represents an increase of 8.5% in loan originations compared to the previous twelve months. Loan growth was centered in commercial real estate, C&I and residential real estate lending as a result of improved economic conditions, increased business activity in markets impacted by Marcellus and Utica shale gas drilling, expansion into the Pittsburgh market, additional lending personnel and continued improvement in loan origination processes. Loan growth was funded primarily by growth in deposits and by maturing securities. Deposits increased $209.5 million or 4.2% from March 31, 2013, some of which was the result of deposits for Marcellus and Utica shale gas payments. All deposit types increased except certificates of deposit, which decreased $162.6 million due to lower rate offerings for maturing CDs. Available deposit funding and maturities in the investment portfolio were also used to reduce higher cost borrowings by 24.8%, further reducing the cost of funds. Total assets at March 31, 2014 were relatively unchanged compared to 2013 year-end, as were total loans. Loan growth was tempered by weather-related delays in anticipated advances on commercial real estate construction loans, continued prudent underwriting and pricing of new loans, and a focus on achieving greater diversification of the loan portfolio. However, the commercial loan and residential mortgage pipeline has strengthened during the first quarter of 2014.
WesBanco continues to maintain strong regulatory capital ratios. At March 31, 2014, tier I leverage was 9.45%, tier I risk-based capital was 13.30%, and total risk-based capital was 14.40%, which all improved from March 31, 2013. Both
Page 2
consolidated and bank-level regulatory capital ratios are well above the applicable “well-capitalized” standards promulgated by bank regulators, as well as the recently finalized fully-implemented BASEL III capital standards. Total tangible equity to tangible assets (non-GAAP measure) was 7.49% at March 31, 2014, up from 7.04% at March 31, 2013. Strong earnings and improved total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.22 per share, seven times over the last four years, cumulatively representing a 57% increase. The most recent increase was $0.02 per share in the first quarter of 2014.
Credit Quality
Total non-performing loans at March 31, 2014 were $50.9 million or 1.31% of total loans, which represents a 1.1% decrease from December 31, 2013 and a 19.4% decrease from $63.1 million or 1.71% of total loans at March 31, 2013. Criticized and classified loans decreased 4.7% in the first quarter of 2014 compared to December 31, 2013 to $129.3 million, or 3.33% of total loans at March 31, 2014. Over the last twelve months criticized and classified loans decreased 23.1% from $168.1 million and 4.56% of total loans last year.
Net charge-offs for the first quarter of 2014 were 0.43% of average portfolio loans, compared to 0.34% for the first quarter of 2013. The average over the last twelve months was 0.40%. As a result of the continued improvement in delinquent, non-performing and classified and criticized loans, the provision for credit losses decreased to $2.2 million for the first quarter of 2014 as compared to $3.1 million for the fourth quarter of 2013, and it was nearly unchanged from $2.1 million in the first quarter of 2013. The allowance for loan losses represented 1.17% of total portfolio loans at March 31, 2014, compared to 1.22% at December 31, 2013 and 1.40% at the end of the 2013 first quarter.
Net Interest Income
Net interest income increased $1.2 million or 2.6% in the first quarter of 2014 compared to the first quarter of 2013, due to a 3.1% increase in average earning assets through increased average loan balances. The net interest margin was nearly unchanged at 3.63% compared to 3.64% in the first quarter of 2013. Accretion of various purchase accounting adjustments from the 2012 acquisition also benefited the net interest margin throughout 2013 and the first quarter of 2014, but at a decreasing rate. Excluding this benefit from both periods, the net interest margin increased by 8 basis points from the first quarter of 2013, from 3.50% to 3.58%. The improved adjusted net interest margin in the current low interest rate environment was assisted by the aforementioned loan growth, as rates earned on loans are higher than securities. In addition, funding costs continued to decrease as a result of a 30.1% reduction in higher-rate average FHLB and other borrowings, primarily through maturities, and a 9.3% increase in lower-cost demand, money market and savings account deposits, while higher-cost CDs decreased by 8.5%. Overall average deposits increased by 3.4% from last year’s first quarter.
Non-Interest Income and Non-Interest Expense
For the first quarter of 2014, non-interest income decreased $0.4 million or 2.6% compared to the first quarter of 2013. The decrease was due to a $1.1 million bank-owned life insurance death benefit in the first quarter of 2013. Excluding this benefit, non-interest income increased $0.7 million in the first quarter of 2014. Trust fees increased 12.6% as assets under management continued to increase from customer development initiatives and overall market improvements. Total trust assets were $3.8 billion at March 31, 2014, representing an increase of 8.7% from $3.5 billion at March 31, 2013. Net securities brokerage revenues increased 22.2%, due to significant production increases from existing markets, the 2013 deployment of an advisor team in the Pittsburgh market, the addition of support and producing staff in several regions, as well as an increase in referrals and production from a licensed retail banker program. Electronic banking fees continued to grow, up 5.1% for the first quarter of 2014. Service charges on deposits decreased 8.0% compared to the first quarter of 2013, due to lower overdraft fees that are affected by lower seasonal usage patterns, consistent increases in deposit levels and higher average deposits per account. Mortgage loan sale gains decreased 78.4% as increasing interest rates reduced refinancings resulting in lower production and, in addition, the percentage of mortgage loans retained for the portfolio increased. Mortgage activity was also impacted by the recently-adopted Qualified Mortgage and Ability-to-Repay rules, which have somewhat limited our product offerings.
Non-interest expense decreased $0.7 million or 1.6% for the first quarter compared to the first quarter of 2013, partially due to merger-related expenses of $1.2 million incurred in the first quarter of 2013. Total non-interest expense would have only increased $0.5 million or 1.3% for the quarter without these merger-related expenses. Salaries and wages increased 4.1%, due to routine annual adjustments to compensation, increased commissions on higher brokerage revenue and increased incentive and stock-related compensation. Employee benefits expense decreased 10.0%, primarily from
Page 3
decreased pension expense, partially offset by increased health insurance costs. Net occupancy and equipment expense increased due to higher weather-related expenses, the opening of two branches over the last two quarters and improvements in internal infrastructure including data processing, communication and teller equipment in the second half of last year. However, despite these increases, overall efficiency remained at 60.6% for the quarter, the same as last year.
Financial Results Conference Call
WesBanco, Inc. will host a conference call to discuss the Company's financial results for the first quarter of 2014 on Wednesday, April 23, 2014 at 11:00 a.m. E.D.T. Callers wishing to participate should access the call by dialing 1-877-870-4263 or 1-412-317-0790 for international callers. The call may also be listened to live via Webcast through the "Investor Relations" section of the Company's Web site or by registering at http://www.videonewswire.com/event.asp?id=98671. Access to the Webcast will begin approximately 15 minutes prior to the start of the call.
WesBanco is a multi-state bank holding company with total assets of approximately $6.2 billion, operating through 120 branch locations and 106 ATMs in West Virginia, Ohio, and Pennsylvania. WesBanco’s banking subsidiary is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia. WesBanco also operates an insurance brokerage company, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.
Forward-looking Statements:
Forward-looking statements in this report relating to WesBanco’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco’s Form 10-K for the year ended December 31, 2013 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; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco’s operational and financial performance. WesBanco does not assume any duty to update forward-looking statements.
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WESBANCO, INC.
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Consolidated Selected Financial Highlights
|
Page 4
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||||||||
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(unaudited, dollars in thousands, except shares and per share amounts)
|
|||||||||
|
For the Three Months Ended
|
|||||||||
|
STATEMENT OF INCOME
|
March 31,
|
||||||||
|
Interest and dividend income
|
2014
|
2013
|
% Change
|
||||||
|
Loans, including fees
|
$ 42,746
|
$ 44,276
|
(3.46%)
|
||||||
|
Interest and dividends on securities:
|
|||||||||
|
Taxable
|
7,225
|
7,433
|
(2.80%)
|
||||||
|
Tax-exempt
|
3,385
|
3,127
|
8.25%
|
||||||
|
Total interest and dividends on securities
|
10,610
|
10,560
|
0.47%
|
||||||
|
Other interest income
|
101
|
56
|
80.36%
|
||||||
|
Total interest and dividend income
|
53,457
|
54,892
|
(2.61%)
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||||||
|
Interest expense
|
|||||||||
|
Interest bearing demand deposits
|
374
|
301
|
24.25%
|
||||||
|
Money market deposits
|
440
|
339
|
29.79%
|
||||||
|
Savings deposits
|
130
|
141
|
(7.80%)
|
||||||
|
Certificates of deposit
|
3,630
|
6,148
|
(40.96%)
|
||||||
|
Total interest expense on deposits
|
4,574
|
6,929
|
(33.99%)
|
||||||
|
Federal Home Loan Bank borrowings
|
211
|
319
|
(33.86%)
|
||||||
|
Other short-term borrowings
|
557
|
623
|
(10.59%)
|
||||||
|
Junior subordinated debt owed to unconsolidated subsidiary trusts
|
790
|
893
|
(11.53%)
|
||||||
|
Total interest expense
|
6,132
|
8,764
|
(30.03%)
|
||||||
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Net interest income
|
47,325
|
46,128
|
2.59%
|
||||||
|
Provision for credit losses
|
2,199
|
2,102
|
4.61%
|
||||||
|
Net interest income after provision for credit losses
|
45,126
|
44,026
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2.50%
|
||||||
|
Non-interest income
|
|||||||||
|
Trust fees
|
5,648
|
5,018
|
12.55%
|
||||||
|
Service charges on deposits
|
3,860
|
4,197
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(8.03%)
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||||||
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Electronic banking fees
|
3,013
|
2,866
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5.13%
|
||||||
|
Net securities brokerage revenue
|
1,829
|
1,497
|
22.18%
|
||||||
|
Bank-owned life insurance
|
875
|
1,949
|
(55.11%)
|
||||||
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Net gains on sales of mortgage loans
|
154
|
712
|
(78.37%)
|
||||||
|
Net securities gains
|
10
|
16
|
(37.50%)
|
||||||
|
Net gain / (loss) on other real estate owned and other assets
|
113
|
(46)
|
345.65%
|
||||||
|
Other income
|
1,547
|
1,287
|
20.20%
|
||||||
|
Total non-interest income
|
17,049
|
17,496
|
(2.55%)
|
||||||
|
Non-interest expense
|
|||||||||
|
Salaries and wages
|
16,467
|
15,826
|
4.05%
|
||||||
|
Employee benefits
|
5,708
|
6,345
|
(10.04%)
|
||||||
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Net occupancy
|
3,491
|
3,192
|
9.37%
|
||||||
|
Equipment
|
2,783
|
2,407
|
15.62%
|
||||||
|
Marketing
|
1,003
|
805
|
24.60%
|
||||||
|
FDIC insurance
|
877
|
971
|
(9.68%)
|
||||||
|
Amortization of intangible assets
|
495
|
625
|
(20.80%)
|
||||||
|
Restructuring and merger-related expense
|
-
|
1,178
|
(100.00%)
|
||||||
|
Other operating expenses
|
9,271
|
9,398
|
(1.35%)
|
||||||
|
Total non-interest expense
|
40,095
|
40,747
|
(1.60%)
|
||||||
|
Income before provision for income taxes
|
22,080
|
20,775
|
6.28%
|
||||||
|
Provision for income taxes
|
5,659
|
4,754
|
19.04%
|
||||||
|
Net Income
|
$ 16,421
|
$ 16,021
|
2.50%
|
||||||
|
Taxable equivalent net interest income
|
$ 49,148
|
$ 47,812
|
2.79%
|
||||||
|
Per common share data
|
|||||||||
|
Net income per common share - basic
|
$ 0.56
|
$ 0.55
|
1.82%
|
||||||
|
Net income per common share - diluted
|
$ 0.56
|
$ 0.55
|
1.82%
|
||||||
|
Dividends declared
|
$ 0.22
|
$ 0.19
|
15.79%
|
||||||
|
Book value (period end)
|
$ 26.05
|
$ 24.80
|
5.04%
|
||||||
|
Tangible book value (period end) (1)
|
$ 15.17
|
$ 13.87
|
9.37%
|
||||||
|
Average common shares outstanding - basic
|
29,182,183
|
29,211,321
|
(0.10%)
|
||||||
|
Average common shares outstanding - diluted
|
29,262,680
|
29,268,483
|
(0.02%)
|
||||||
|
Period end common shares outstanding
|
29,212,110
|
29,214,018
|
(0.01%)
|
||||||
|
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
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WESBANCO, INC.
|
|||||||||||||||
|
Consolidated Selected Financial Highlights
|
Page 5
|
||||||||||||||
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(unaudited, dollars in thousands)
|
|||||||||||||||
|
Selected ratios
|
|||||||||||||||
| For the Three Months Ended | |||||||||||||||
|
March 31,
|
|||||||||||||||
|
2014
|
2013
|
% Change
|
|||||||||||||
|
Return on average assets
|
1.08
|
%
|
1.07
|
%
|
0.93
|
%
|
|||||||||
|
Return on average equity
|
8.78
|
9.00
|
(2.44)
|
||||||||||||
|
Return on average tangible equity (1)
|
15.40
|
16.55
|
(6.95)
|
||||||||||||
|
Yield on earning assets (2)
|
4.08
|
4.31
|
(5.34)
|
||||||||||||
|
Cost of interest bearing liabilities
|
0.56
|
0.81
|
(30.86)
|
||||||||||||
|
Net interest spread (2)
|
3.52
|
3.50
|
0.57
|
||||||||||||
|
Net interest margin (2)
|
3.63
|
3.64
|
(0.27)
|
||||||||||||
|
Efficiency (1) (2)
|
60.57
|
60.59
|
(0.03)
|
||||||||||||
|
Average loans to average deposits
|
75.52
|
73.86
|
2.25
|
||||||||||||
|
Annualized net loan charge-offs/average loans
|
0.43
|
0.34
|
26.47
|
||||||||||||
|
Effective income tax rate
|
25.63
|
22.88
|
12.02
|
||||||||||||
|
For the Quarter Ended
|
|||||||||||||||
|
Mar. 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
Mar. 31,
|
|||||||||||
|
2014
|
2013
|
2013
|
2013
|
2013
|
|||||||||||
|
Return on average assets
|
1.08
|
%
|
0.99
|
%
|
1.01
|
%
|
1.12
|
%
|
1.07
|
%
|
|||||
|
Return on average equity
|
8.78
|
8.17
|
8.40
|
9.33
|
9.00
|
||||||||||
|
Return on average tangible equity (1)
|
15.40
|
14.60
|
15.20
|
16.88
|
16.55
|
||||||||||
|
Yield on earning assets (2)
|
4.08
|
4.09
|
4.13
|
4.20
|
4.31
|
||||||||||
|
Cost of interest bearing liabilities
|
0.56
|
0.63
|
0.73
|
0.77
|
0.81
|
||||||||||
|
Net interest spread (2)
|
3.52
|
3.46
|
3.40
|
3.43
|
3.50
|
||||||||||
|
Net interest margin (2)
|
3.63
|
3.58
|
3.52
|
3.56
|
3.64
|
||||||||||
|
Efficiency (1) (2)
|
60.57
|
61.66
|
61.45
|
60.25
|
60.59
|
||||||||||
|
Average loans to average deposits
|
75.52
|
75.79
|
76.16
|
75.27
|
73.86
|
||||||||||
|
Annualized net loan charge-offs/average loans
|
0.43
|
0.30
|
0.60
|
0.26
|
0.34
|
||||||||||
|
Effective income tax rate
|
25.63
|
24.37
|
23.92
|
26.63
|
22.88
|
||||||||||
|
Trust assets, market value at period end
|
$ 3,752,142
|
$ 3,688,734
|
$ 3,501,873
|
$ 3,440,666
|
$ 3,451,124
|
||||||||||
|
(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.
|
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|
WESBANCO, INC.
|
||||||||||||
|
Consolidated Selected Financial Highlights
|
Page 6
|
|||||||||||
|
(unaudited, dollars in thousands, except shares)
|
% Change
|
|||||||||||
|
Balance sheets
|
March 31,
|
December 31,
|
December 31, 2013
|
|||||||||
|
Assets
|
2014
|
2013
|
% Change
|
2013
|
to March 31, 2014
|
|||||||
|
Cash and due from banks
|
$ 143,315
|
$ 121,692
|
17.77
|
%
|
$ 80,001
|
79.14
|
%
|
|||||
|
Due from banks - interest bearing
|
31,881
|
56,571
|
(43.64)
|
15,550
|
105.02
|
|||||||
|
Securities:
|
||||||||||||
|
Available-for-sale, at fair value
|
959,775
|
993,270
|
(3.37)
|
934,386
|
2.72
|
|||||||
|
Held-to-maturity (fair values of $607,886; $624,627 and $596,308, respectively)
|
597,624
|
592,033
|
0.94
|
598,520
|
(0.15)
|
|||||||
|
Total securities
|
1,557,399
|
1,585,303
|
(1.76)
|
1,532,906
|
1.60
|
|||||||
|
Loans held for sale
|
6,300
|
14,299
|
(55.94)
|
5,855
|
7.60
|
|||||||
|
Portfolio loans:
|
||||||||||||
|
Commercial real estate
|
1,915,578
|
1,831,754
|
4.58
|
1,912,919
|
0.14
|
|||||||
|
Commercial and industrial
|
560,511
|
495,748
|
13.06
|
556,249
|
0.77
|
|||||||
|
Residential real estate
|
888,666
|
808,528
|
9.91
|
890,804
|
(0.24)
|
|||||||
|
Home equity
|
284,879
|
278,812
|
2.18
|
284,687
|
0.07
|
|||||||
|
Consumer
|
237,468
|
268,959
|
(11.71)
|
250,258
|
(5.11)
|
|||||||
|
Total portfolio loans, net of unearned income
|
3,887,102
|
3,683,801
|
5.52
|
3,894,917
|
(0.20)
|
|||||||
|
Allowance for loan losses
|
(45,483)
|
(51,664)
|
11.96
|
(47,368)
|
3.98
|
|||||||
|
Net portfolio loans
|
3,841,619
|
3,632,137
|
5.77
|
3,847,549
|
(0.15)
|
|||||||
|
Premises and equipment, net
|
92,814
|
90,879
|
2.13
|
93,157
|
(0.37)
|
|||||||
|
Accrued interest receivable
|
20,149
|
19,909
|
1.21
|
18,960
|
6.27
|
|||||||
|
Goodwill and other intangible assets, net
|
320,931
|
323,003
|
(0.64)
|
321,426
|
(0.15)
|
|||||||
|
Bank-owned life insurance
|
122,265
|
118,666
|
3.03
|
121,390
|
0.72
|
|||||||
|
Other assets
|
100,904
|
113,026
|
(10.72)
|
107,979
|
(6.55)
|
|||||||
|
Total Assets
|
$ 6,237,577
|
$ 6,075,485
|
2.67
|
%
|
$ 6,144,773
|
1.51
|
%
|
|||||
|
Liabilities
|
||||||||||||
|
Deposits:
|
||||||||||||
|
Non-interest bearing demand
|
$ 1,022,119
|
$ 888,109
|
15.09
|
%
|
$ 960,814
|
6.38
|
%
|
|||||
|
Interest bearing demand
|
918,629
|
870,067
|
5.58
|
857,761
|
7.10
|
|||||||
|
Money market
|
980,890
|
849,401
|
15.48
|
942,768
|
4.04
|
|||||||
|
Savings deposits
|
824,276
|
766,265
|
7.57
|
789,709
|
4.38
|
|||||||
|
Certificates of deposit
|
1,469,804
|
1,632,360
|
(9.96)
|
1,511,478
|
(2.76)
|
|||||||
|
Total deposits
|
5,215,718
|
5,006,202
|
4.19
|
5,062,530
|
3.03
|
|||||||
|
Federal Home Loan Bank borrowings
|
23,282
|
60,767
|
(61.69)
|
39,508
|
(41.07)
|
|||||||
|
Other short-term borrowings
|
92,737
|
128,372
|
(27.76)
|
150,536
|
(38.40)
|
|||||||
|
Junior subordinated debt owed to unconsolidated subsidiary trusts
|
106,146
|
106,109
|
0.03
|
106,137
|
0.01
|
|||||||
|
Total borrowings
|
222,165
|
295,248
|
(24.75)
|
296,181
|
(24.99)
|
|||||||
|
Accrued interest payable
|
2,250
|
3,620
|
(37.85)
|
2,354
|
(4.42)
|
|||||||
|
Other liabilities
|
36,327
|
46,006
|
(21.04)
|
37,113
|
(2.12)
|
|||||||
|
Total Liabilities
|
5,476,460
|
5,351,076
|
2.34
|
5,398,178
|
1.45
|
|||||||
|
Shareholders' Equity
|
||||||||||||
|
Preferred stock, no par value; 1,000,000 shares authorized;
|
||||||||||||
|
none outstanding
|
-
|
-
|
-
|
-
|
-
|
|||||||
|
Common stock, $2.0833 par value; 50,000,000 shares authorized;
|
||||||||||||
|
29,367,511 shares; 29,214,018 shares and 29,367,511 shares issued, respectively;
|
||||||||||||
|
29,212,110 shares; 29,214,018 shares and 29,175,236 shares outstanding, respectively
|
61,182
|
60,862
|
0.53
|
61,182
|
-
|
|||||||
|
Capital surplus
|
245,085
|
241,880
|
1.33
|
244,974
|
0.05
|
|||||||
|
Retained earnings
|
470,352
|
429,715
|
9.46
|
460,351
|
2.17
|
|||||||
|
Treasury stock (155,401; 0 and 192,275 shares - at cost,
|
||||||||||||
|
respectively)
|
(4,822)
|
-
|
(100.00)
|
(5,969)
|
19.22
|
|||||||
|
Accumulated other comprehensive loss
|
(9,461)
|
(6,806)
|
(39.01)
|
(12,734)
|
25.70
|
|||||||
|
Deferred benefits for directors
|
(1,219)
|
(1,242)
|
1.85
|
(1,209)
|
(0.83)
|
|||||||
|
Total Shareholders' Equity
|
761,117
|
724,409
|
5.07
|
746,595
|
1.95
|
|||||||
|
Total Liabilities and Shareholders' Equity
|
$ 6,237,577
|
$ 6,075,485
|
2.67
|
%
|
$ 6,144,773
|
1.51
|
%
|
|||||
|
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,
|
|||||||
|
2014
|
2013
|
|||||||
|
Average
|
Average
|
Average
|
Average
|
|||||
|
Assets
|
Balance
|
Rate
|
Balance
|
Rate
|
||||
|
Due from banks - interest bearing
|
$ 51,149
|
0.17%
|
$ 66,623
|
0.15%
|
||||
|
Loans, net of unearned income (1)
|
3,873,789
|
4.48%
|
3,664,629
|
4.90%
|
||||
|
Securities: (2)
|
||||||||
|
Taxable
|
1,140,982
|
2.53%
|
1,199,706
|
2.48%
|
||||
|
Tax-exempt (3)
|
399,794
|
5.21%
|
358,524
|
5.37%
|
||||
|
Total securities
|
1,540,776
|
3.23%
|
1,558,230
|
3.14%
|
||||
|
Other earning assets
|
11,568
|
2.73%
|
20,542
|
0.60%
|
||||
|
Total earning assets (3)
|
5,477,282
|
4.08%
|
5,310,024
|
4.31%
|
||||
|
Other assets
|
709,216
|
754,962
|
||||||
|
Total Assets
|
$ 6,186,498
|
$ 6,064,986
|
||||||
|
Liabilities and Shareholders' Equity
|
||||||||
|
Interest bearing demand deposits
|
$ 887,518
|
0.17%
|
$ 846,494
|
0.14%
|
||||
|
Money market accounts
|
945,412
|
0.19%
|
845,751
|
0.16%
|
||||
|
Savings deposits
|
808,710
|
0.07%
|
750,430
|
0.08%
|
||||
|
Certificates of deposit
|
1,504,605
|
0.98%
|
1,645,058
|
1.52%
|
||||
|
Total interest bearing deposits
|
4,146,245
|
0.45%
|
4,087,733
|
0.69%
|
||||
|
Federal Home Loan Bank borrowings
|
35,028
|
2.44%
|
75,438
|
1.72%
|
||||
|
Other borrowings
|
115,326
|
1.96%
|
139,650
|
1.81%
|
||||
|
Junior subordinated debt
|
106,141
|
3.02%
|
112,376
|
3.23%
|
||||
|
Total interest bearing liabilities
|
4,402,740
|
0.56%
|
4,415,197
|
0.81%
|
||||
|
Non-interest bearing demand deposits
|
983,096
|
874,078
|
||||||
|
Other liabilities
|
41,821
|
53,497
|
||||||
|
Shareholders' equity
|
758,841
|
722,214
|
||||||
|
Total Liabilities and Shareholders' Equity
|
$ 6,186,498
|
$ 6,064,986
|
||||||
|
Taxable equivalent net interest spread
|
3.52%
|
3.50%
|
||||||
|
Taxable equivalent net interest margin
|
3.63%
|
3.64%
|
||||||
|
(1) Gross of allowance for loan losses and net of unearned income. Includes non-accrual and loans held for sale.
|
||||||||
|
Loan fees included in interest income on loans are $0.9 million and $1.0 million for the three months ended March 31, 2014 and 2013, respectively.
|
||||||||
|
Additionally, loan accretion included in interest income on acquired Fidelity loans was $0.4 and $1.3 million for the three months
|
||||||||
|
ended March 31, 2014 and 2013, while accretion on acquired Fidelity interest bearing liabilities
|
||||||||
|
was $0.2 and $0.5 million for the three months ended March 31, 2014 and 2013, 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 35% 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,
|
Sep. 30,
|
June 30,
|
Mar. 31,
|
|||||||
|
Interest income
|
2014
|
2013
|
2013
|
2013
|
2013
|
|||||||
|
Loans, including fees
|
$ 42,746
|
$ 43,617
|
$ 43,678
|
$ 43,753
|
$ 44,276
|
|||||||
|
Interest and dividends on securities:
|
||||||||||||
|
Taxable
|
7,225
|
7,178
|
7,226
|
7,357
|
7,433
|
|||||||
|
Tax-exempt
|
3,385
|
3,380
|
3,355
|
3,264
|
3,127
|
|||||||
|
Total interest and dividends on securities
|
10,610
|
10,558
|
10,581
|
10,621
|
10,560
|
|||||||
|
Other interest income
|
101
|
82
|
58
|
50
|
56
|
|||||||
|
Total interest and dividend income
|
53,457
|
54,257
|
54,317
|
54,424
|
54,892
|
|||||||
|
Interest expense
|
||||||||||||
|
Interest bearing demand deposits
|
374
|
380
|
369
|
365
|
301
|
|||||||
|
Money market deposits
|
440
|
440
|
345
|
338
|
339
|
|||||||
|
Savings deposits
|
130
|
130
|
128
|
127
|
141
|
|||||||
|
Certificates of deposit
|
3,630
|
4,383
|
5,597
|
5,881
|
6,148
|
|||||||
|
Total interest expense on deposits
|
4,574
|
5,333
|
6,439
|
6,711
|
6,929
|
|||||||
|
Federal Home Loan Bank borrowings
|
211
|
251
|
291
|
289
|
319
|
|||||||
|
Other short-term borrowings
|
557
|
625
|
651
|
627
|
623
|
|||||||
|
Junior subordinated debt owed to unconsolidated subsidiary trusts
|
790
|
810
|
805
|
808
|
893
|
|||||||
|
Total interest expense
|
6,132
|
7,019
|
8,186
|
8,435
|
8,764
|
|||||||
|
Net interest income
|
47,325
|
47,238
|
46,131
|
45,989
|
46,128
|
|||||||
|
Provision for credit losses
|
2,199
|
3,144
|
2,819
|
1,021
|
2,102
|
|||||||
|
Net interest income after provision for credit losses
|
45,126
|
44,094
|
43,312
|
44,968
|
44,026
|
|||||||
|
Non-interest income
|
||||||||||||
|
Trust fees
|
5,648
|
4,883
|
4,854
|
4,823
|
5,018
|
|||||||
|
Service charges on deposits
|
3,860
|
4,616
|
4,650
|
4,462
|
4,197
|
|||||||
|
Electronic banking fees
|
3,013
|
3,012
|
3,124
|
3,195
|
2,866
|
|||||||
|
Net securities brokerage revenue
|
1,829
|
1,604
|
1,506
|
1,641
|
1,497
|
|||||||
|
Bank-owned life insurance
|
875
|
925
|
911
|
880
|
1,949
|
|||||||
|
Net gains on sales of mortgage loans
|
154
|
456
|
745
|
701
|
712
|
|||||||
|
Net securities gains / (losses)
|
10
|
(3)
|
(15)
|
686
|
16
|
|||||||
|
Net gain / (loss) on other real estate owned and other assets
|
113
|
(144)
|
8
|
101
|
(46)
|
|||||||
|
Other income
|
1,547
|
1,601
|
1,333
|
1,235
|
1,287
|
|||||||
|
Total non-interest income
|
17,049
|
16,950
|
17,116
|
17,724
|
17,496
|
|||||||
|
Non-interest expense
|
||||||||||||
|
Salaries and wages
|
16,467
|
17,352
|
16,480
|
15,772
|
15,826
|
|||||||
|
Employee benefits
|
5,708
|
5,774
|
5,323
|
5,813
|
6,345
|
|||||||
|
Net occupancy
|
3,491
|
2,866
|
2,921
|
2,830
|
3,192
|
|||||||
|
Equipment
|
2,783
|
2,768
|
2,692
|
2,802
|
2,407
|
|||||||
|
Marketing
|
1,003
|
1,159
|
1,585
|
1,624
|
805
|
|||||||
|
FDIC insurance
|
877
|
919
|
916
|
919
|
971
|
|||||||
|
Amortization of intangible assets
|
495
|
546
|
556
|
561
|
625
|
|||||||
|
Restructuring and merger-related expense
|
-
|
45
|
36
|
51
|
1,178
|
|||||||
|
Other operating expenses
|
9,271
|
9,314
|
9,500
|
9,127
|
9,398
|
|||||||
|
Total non-interest expense
|
40,095
|
40,743
|
40,009
|
39,499
|
40,747
|
|||||||
|
Income before provision for income taxes
|
22,080
|
20,301
|
20,419
|
23,193
|
20,775
|
|||||||
|
Provision for income taxes
|
5,659
|
4,948
|
4,884
|
6,176
|
4,754
|
|||||||
|
Net Income
|
$ 16,421
|
$ 15,353
|
$ 15,535
|
$ 17,017
|
$ 16,021
|
|||||||
|
Taxable equivalent net interest income
|
$ 49,148
|
$ 49,058
|
$ 47,938
|
$ 47,747
|
$ 47,812
|
|||||||
|
Per common share data
|
||||||||||||
|
Net income per common share - basic
|
$ 0.56
|
$ 0.52
|
$ 0.53
|
$ 0.58
|
$ 0.55
|
|||||||
|
Net income per common share - diluted
|
$ 0.56
|
$ 0.52
|
$ 0.53
|
$ 0.58
|
$ 0.55
|
|||||||
|
Dividends declared
|
$ 0.22
|
$ 0.20
|
$ 0.20
|
$ 0.19
|
$ 0.19
|
|||||||
|
Book value (period end)
|
$ 26.05
|
$ 25.59
|
$ 25.10
|
$ 24.80
|
$ 24.80
|
|||||||
|
Tangible book value (period end) (1)
|
$ 15.17
|
$ 14.68
|
$ 14.25
|
$ 13.91
|
$ 13.87
|
|||||||
|
Average common shares outstanding - basic
|
29,182,183
|
29,300,463
|
29,325,128
|
29,245,201
|
29,211,321
|
|||||||
|
Average common shares outstanding - diluted
|
29,262,680
|
29,387,485
|
29,412,458
|
29,308,806
|
29,268,483
|
|||||||
|
Period end common shares outstanding
|
29,212,110
|
29,175,236
|
29,350,061
|
29,282,412
|
29,214,018
|
|||||||
|
Full time equivalent employees
|
1,442
|
1,469
|
1,462
|
1,478
|
1,448
|
|||||||
|
(1) See non-GAAP financial measures for additional information relating to the calculation of this item.
|
||||||||||||
|
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
|
2014
|
2013
|
2013
|
2013
|
2013
|
||||||||
|
Non-performing assets:
|
|||||||||||||
|
Troubled debt restructurings - accruing
|
$ 14,535
|
$ 14,861
|
$ 15,480
|
$ 19,269
|
$ 20,420
|
||||||||
|
Non-accrual loans:
|
|||||||||||||
|
Troubled debt restructurings
|
7,406
|
9,324
|
12,920
|
15,655
|
17,106
|
||||||||
|
Other non-accrual loans
|
28,967
|
27,309
|
25,240
|
27,414
|
25,620
|
||||||||
|
Total non-accrual loans
|
36,373
|
36,633
|
38,160
|
43,069
|
42,726
|
||||||||
|
Total non-performing loans
|
50,908
|
51,494
|
53,640
|
62,338
|
63,146
|
||||||||
|
Other real estate and repossessed assets
|
5,382
|
4,860
|
5,184
|
5,007
|
5,147
|
||||||||
|
Total non-performing assets
|
$ 56,290
|
$ 56,354
|
$ 58,824
|
$ 67,345
|
$ 68,293
|
||||||||
|
Past due loans (1):
|
|||||||||||||
|
Loans past due 30-89 days
|
$ 14,650
|
$ 14,831
|
$ 15,611
|
$ 15,792
|
$ 14,507
|
||||||||
|
Loans past due 90 days or more
|
1,833
|
2,591
|
3,043
|
3,594
|
4,345
|
||||||||
|
Total past due loans
|
$ 16,483
|
$ 17,422
|
$ 18,654
|
$ 19,386
|
$ 18,852
|
||||||||
|
Criticized and classified loans (2):
|
|||||||||||||
|
Criticized loans
|
$ 73,925
|
$ 75,249
|
$ 76,442
|
$ 78,457
|
$ 84,146
|
||||||||
|
Classified loans
|
55,341
|
60,335
|
64,857
|
80,621
|
83,988
|
||||||||
|
Total criticized and classified loans
|
$ 129,266
|
$ 135,584
|
$ 141,299
|
$ 159,078
|
$ 168,134
|
||||||||
|
Loans past due 30-89 days / total loans
|
0.38
|
%
|
0.38
|
%
|
0.41
|
%
|
0.42
|
%
|
0.39
|
% | |||
|
Loans past due 90 days or more / total loans
|
0.05
|
0.07
|
0.08
|
0.09
|
0.12
|
||||||||
|
Non-performing loans / total loans
|
1.31
|
1.32
|
1.40
|
1.64
|
1.71
|
||||||||
|
Non-performing assets/total loans, other
|
|||||||||||||
|
real estate and repossessed assets
|
1.45
|
1.45
|
1.53
|
1.77
|
1.85
|
||||||||
|
Non-performing assets / total assets
|
0.90
|
0.92
|
0.96
|
1.11
|
1.12
|
||||||||
|
Criticized and classified loans / total loans
|
3.33
|
3.48
|
3.68
|
4.18
|
4.56
|
||||||||
|
Allowance for loan losses
|
|||||||||||||
|
Allowance for loan losses
|
$ 45,483
|
$ 47,368
|
$ 47,342
|
$ 50,381
|
$ 51,664
|
||||||||
|
Provision for credit losses
|
2,199
|
3,144
|
2,819
|
1,021
|
2,102
|
||||||||
|
Net loan and deposit account overdraft charge-offs
|
4,141
|
2,887
|
5,804
|
2,433
|
3,032
|
||||||||
|
Annualized net loan charge-offs /average loans
|
0.43
|
%
|
0.30
|
%
|
0.60
|
%
|
0.26
|
%
|
0.34
|
% | |||
|
Allowance for loan losses / portfolio loans
|
1.17
|
%
|
1.22
|
%
|
1.23
|
%
|
1.33
|
%
|
1.40
|
% | |||
|
Allowance for loan losses / non-performing loans
|
0.89
|
x
|
0.92
|
x
|
0.88
|
x
|
0.81
|
x
|
0.82
|
x | |||
|
Allowance for loan losses / non-performing loans and
|
|||||||||||||
|
loans past due
|
0.67
|
x
|
0.69
|
x
|
0.65
|
x
|
0.62
|
x
|
0.63
|
x | |||
|
Quarter Ended
|
|||||||||||||
|
Mar. 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
Mar. 31,
|
|||||||||
|
2014
|
2013
|
2013
|
2013
|
2013
|
|||||||||
|
Capital ratios
|
|||||||||||||
|
Tier I leverage capital
|
9.45
|
%
|
9.27
|
%
|
9.27
|
%
|
9.13
|
%
|
8.92
|
% | |||
|
Tier I risk-based capital
|
13.30
|
13.06
|
13.08
|
12.85
|
12.88
|
||||||||
|
Total risk-based capital
|
14.40
|
14.19
|
14.23
|
14.08
|
14.13
|
||||||||
|
Average shareholders' equity to average assets
|
12.27
|
12.06
|
11.99
|
12.05
|
11.91
|
||||||||
|
Tangible equity to tangible assets (3)
|
7.49
|
7.35
|
7.19
|
7.07
|
7.04
|
||||||||
|
(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 10
|
||||||||||||
|
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)
|
2014
|
2013
|
2013
|
2013
|
2013
|
||||||||
|
Return on average tangible equity:
|
|||||||||||||
|
Net income (annualized)
|
$ 66,596
|
$ 60,911
|
$ 61,634
|
$ 68,256
|
$ 64,974
|
||||||||
|
Plus: amortization of intangibles (annualized) (1)
|
1,305
|
1,408
|
1,434
|
1,464
|
1,647
|
||||||||
|
Net income before amortization of intangibles (annualized)
|
67,901
|
62,319
|
63,068
|
69,720
|
66,621
|
||||||||
|
Average total shareholders' equity
|
758,841
|
745,136
|
733,462
|
731,935
|
722,214
|
||||||||
|
Less: average goodwill and other intangibles, net of def. tax liability
|
(317,996)
|
(318,333)
|
(318,661)
|
(318,971)
|
(319,706)
|
||||||||
|
Average tangible equity
|
440,845
|
426,803
|
414,801
|
412,964
|
402,508
|
||||||||
|
Return on average tangible equity
|
15.40%
|
14.60%
|
15.20%
|
16.88%
|
16.55%
|
||||||||
|
Period End
|
|||||||||||||
|
Mar. 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
Mar. 31,
|
|||||||||
|
2014
|
2013
|
2013
|
2013
|
2013
|
|||||||||
|
Tangible book value:
|
|||||||||||||
|
Total shareholders' equity
|
$ 761,117
|
$ 746,595
|
$ 736,688
|
$ 726,232
|
$ 724,409
|
||||||||
|
Less: goodwill and other intangible assets, net of def. tax liability
|
(317,840)
|
(318,161)
|
(318,516)
|
(318,828)
|
(319,156)
|
||||||||
|
Tangible equity
|
443,277
|
428,434
|
418,172
|
407,404
|
405,253
|
||||||||
|
Common shares outstanding
|
29,212,110
|
29,175,236
|
29,350,061
|
29,282,412
|
29,214,018
|
||||||||
|
Tangible book value
|
$ 15.17
|
$ 14.68
|
$ 14.25
|
$ 13.91
|
$ 13.87
|
||||||||
|
Tangible equity to tangible assets:
|
|||||||||||||
|
Total shareholders' equity
|
$ 761,117
|
$ 746,595
|
$ 736,688
|
$ 726,232
|
$ 724,409
|
||||||||
|
Less: goodwill and other intangible assets, net of def. tax liability
|
(317,840)
|
(318,161)
|
(318,516)
|
(318,828)
|
(319,156)
|
||||||||
|
Tangible equity
|
443,277
|
428,434
|
418,172
|
407,404
|
405,253
|
||||||||
|
Total assets
|
6,237,577
|
6,144,773
|
6,138,360
|
6,084,011
|
6,075,485
|
||||||||
|
Less: goodwill and other intangible assets, net of def. tax liability
|
(317,840)
|
(318,161)
|
(318,516)
|
(318,828)
|
(319,156)
|
||||||||
|
Tangible assets
|
5,919,737
|
5,826,612
|
5,819,844
|
5,765,183
|
5,756,329
|
||||||||
|
Tangible equity to tangible assets
|
7.49%
|
7.35%
|
7.19%
|
7.07%
|
7.04%
|
||||||||
|
Efficiency ratio:
|
|||||||||||||
|
Non-interest expense
|
$ 40,095
|
$ 40,743
|
$ 40,009
|
$ 39,499
|
$ 40,747
|
||||||||
|
Less: restructuring and merger-related expense
|
-
|
(45)
|
(36)
|
(51)
|
(1,178)
|
||||||||
|
Non-interest expense excluding restructuring and merger-related expense
|
40,095
|
40,698
|
39,973
|
39,448
|
39,569
|
||||||||
|
Net interest income on a fully taxable equivalent basis
|
49,148
|
49,058
|
47,938
|
47,747
|
47,812
|
||||||||
|
Non-interest income
|
17,049
|
16,950
|
17,116
|
17,724
|
17,496
|
||||||||
|
Net interest income on a fully taxable equivalent basis plus non-interest income
|
66,197
|
66,008
|
65,054
|
65,471
|
65,308
|
||||||||
|
Efficiency Ratio
|
60.57%
|
61.66%
|
61.45%
|
60.25%
|
60.59%
|
||||||||
|
(1) Tax effected at 35%.
|
|||||||||||||