NEWS FOR IMMEDIATE RELEASE

John Iannone

Vice President, Investor Relations

(304) 905-7021

NASDAQ Symbol: WSBC

Website: www.wesbanco.com

(Wheeling, WV)… Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ Global Market: WSBC), a Wheeling, West Virginia based multi-state bank holding company, today announced net income and related earnings per share for the three and twelve months ended December 31, 2015.  Net income for 2015 was $80.8 million or $2.15 per diluted share compared to $70.0 million or $2.39 per diluted share for 2014.  Net income for the three months ended December 31, 2015 was $23.0 million, while diluted earnings per share were $0.60, compared to $16.5 million or $0.56 per diluted share for the fourth quarter of 2014.  For the year ended December 31, 2015, net income excluding after-tax merger-related expenses (non-GAAP measure), increased 24.2% to $88.0 million compared to $70.8 million for 2014, while diluted earnings per share, excluding after-tax merger-related expenses (non-GAAP measure), totaled $2.34, compared to $2.41 per share for 2014.

 

	For the Three Months Ended December 31,								For the Twelve Months Ended December 31,
	2015				2014				2015				2014
(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)	$    23,033		$        0.60		$     17,363		$        0.59		$       87,965		$        2.34		$       70,825		$        2.41
Less: After tax merger-related expenses	(31)		-		(851)		(0.03)		(7,203)		(0.19)		(851)		(0.03)
Net income (GAAP)	$    23,002		$        0.60		$     16,512		$        0.56		$       80,762		$        2.15		$       69,974		$        2.39
(1) Non-GAAP net income excludes after-tax merger related expenses.  Non-GAAP measures are defined on page 10 under "Non-GAAP Financial Measures."

 

  WesBanco's results for the three and twelve months ended December 31, 2015 included ESB Financial Corporation's ("ESB") results from February 10, 2015, the date of consummation of the merger.  ESB was a Pennsylvania thrift holding company with approximately $2.0 billion in assets and 23 offices in southwestern Pennsylvania.

"Fiscal 2015 was another successful year for WesBanco.  We grew to $8.5 billion in assets with the completion of our largest acquisition to-date, and subsequently achieved top ten market share in the Pittsburgh metropolitan area.  We delivered positive operating leverage on record earnings of $81 million," said Mr. Clossin.  "During 2015, we realized total loan growth of 24%, including organic loan growth of 7%, while continuing to improve our already strong credit quality ratios.  Our growth during the quarter was supported by diligently managing our cost structure as reflected in further improvement in our efficiency ratio.  In addition, we generated returns on average assets and average tangible equity (non-GAAP measure) of 1.07% and 14.68%, respectively."

Mr. Clossin added, "Our strong regulatory and compliance framework, coupled with our diversification and balanced growth, helped us to once again be named to Forbes Magazine's 2016 list of America's Best Banks.  We are excited about our opportunities for the upcoming year, and look forward to executing on our growth strategies as we provide additional value to our customers and shareholders."

Financial Condition

Total assets at December 31, 2015 increased 34.5% or $2.2 billion compared to December 31, 2014, with approximately $2.0 billion from the acquisition of ESB and $0.2 billion from organic growth exclusive of ESB.  Portfolio loans increased $979.1 million, with $701.0 million from the acquisition and $278.1 million from loan growth exclusive of ESB.  Organic loan growth in 2015 was 6.8%, primarily achieved through $1.8 billion in loan originations compared to $1.4 billion last year. Organic loan growth occurred in all loan categories, with approximately 15.2% of the growth in commercial and industrial loans and 22.0% in home equity loans.  Loan growth was driven by increased business activity, additional commercial and residential lending personnel in our urban markets, focused marketing efforts and continued improvement in loan origination processes. Deposits increased $1.0 billion compared to December 31, 2014, due to the acquisition.  Non-interest bearing deposits, excluding $128.0 million from the acquisition, were up 11.5% over the last year. Excluding certificates of deposit and acquired deposits from ESB, deposits increased $166.8 million or 4.5%

 

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from December 31, 2014, with deposits from Marcellus and Utica shale gas customers contributing $140.9 million to the increase.  Certificates of deposit, excluding $645.1 million from ESB, decreased $392.4 million from December 31, 2014 due to lower rate offerings for single service maturing CDs and customer preferences for other deposit types as we remix our deposits to emphasize multiple relationship customers.

WesBanco continues to maintain strong regulatory capital ratios after the ESB acquisition and implementation of the new BASEL III capital standards.  At December 31, 2015, Tier I leverage was 9.38%, Tier I Risk-Based capital was 13.39%, and Total Risk-Based capital was 14.15%.  Both consolidated and bank-level regulatory capital ratios are well above the applicable, revised "well-capitalized" standards promulgated by bank regulators, as well as the recently finalized BASEL III capital standards.  As required by BASEL III, a new ratio for 2015, Common Equity Tier 1 capital ratio (CET 1), was 11.70% for the fourth quarter of 2015, significantly above the requirement of 4.5%. Total tangible equity to tangible assets (non-GAAP measure) was 7.95% at December 31, 2015, increasing from pre-acquisition 7.88% at December 31, 2014, and improved over each of the first three quarters of 2015. Strong earnings and increased total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.23 per share, eight times over the last five years, cumulatively representing a 64% increase.  The most recent increase was $0.01 per share in the first quarter of 2015.

Credit Quality

The provision for credit losses increased 30.4% due to loan growth in 2015.  Net charge-offs for 2015 as a percentage of average portfolio loans of 0.23% were unchanged from 2014.

Non-performing loans, including TDRs, as well as criticized and classified loans, improved as a percentage of total portfolio loans from their pre-acquisition levels in the fourth quarter of 2014. Total non-performing loans were 1.04% of total loans at December 31, 2015, decreasing from 1.25% of total loans at December 31, 2014. Criticized and classified loans were 1.57% of total loans, improving from 1.99% of total loans a year ago.  Past due loans at December 31, 2015 were 0.28% of total loans, improving slightly from 0.29% at December 31, 2014.

The allowance for loan losses represented 0.82% of total portfolio loans at December 31, 2015.  If the acquired ESB loans (which were recorded at fair value at the date of acquisition of $701.0 million) were excluded from the ratio, the allowance would approximate 0.96% of the adjusted loan total as compared to 1.09% at the end of 2014 before the acquisition.

Net Interest Income

Net interest income increased $43.8 million or 22.6% in 2015 compared to 2014 due to a 29.9% increase in average earning assets, primarily through the acquisition, and through a 6.7% increase in average loan balances, exclusive of ESB, partially offset by a 20 basis point decrease in the net interest margin.

The net interest margin decreased to 3.41% in 2015 compared to 3.61% in 2014. The decrease in the net interest margin is primarily due to a change in the mix of investments to total average earning assets from 28.1% in 2014 to 32.3% in 2015, a 41 basis point decline in the average rate earned on securities due to lower yields from a restructuring of the ESB portfolio and a decrease of 14 basis points for total loans due to repricing of existing loans and competitive pricing on new loans.  The lower rates were due to the low interest rate environment and were somewhat mitigated by a reduction in funding costs of 9 basis points.  In addition, the aforementioned loan growth improves asset yields as the average rate on loans is higher than the average rate on securities. Funding costs continued to decrease in 2015 primarily as a result of a 29 basis point decrease in the average rate on CDs as higher-rate CDs matured, somewhat offset by higher FHLB borrowing costs. Overall, excluding CDs and acquired deposits from ESB, average deposits increased 5.5% in 2015 compared to 2014 with a decrease in total rate of 10 basis points on interest bearing deposits.  For the fourth quarter, net interest income increased by $11.6 million or 23.7% compared to the fourth quarter of 2014, as average earning assets increased by 34.6% including a 5.9% increase in average loans, exclusive of ESB, and the net interest margin decreased by 28 basis points.

Non-Interest Income

For 2015, non-interest income increased $6.0 million or 8.7% compared to 2014. Trust fees increased $0.8 million or 3.9% from customer and revenue development initiatives.  Service charges on deposits increased $0.6 million or 3.8% from the addition of ESB and an overall evaluation of the fee schedule.  Electronic banking fees increased $1.7 million or 13.0% from increases in transaction volume.  Net security brokerage revenue increased by $0.8 million or 11.1% through the addition of support and sales staff in several regions. Net gains on sales of mortgage loans increased $0.5 million or 29.1% from increases in originations and a larger percentage of originations being sold in the secondary market. Net losses on other assets improved by $1.4 million due to a $1.4 million charge in the third quarter of 2014 relating to the prepayment of certain repurchase agreements.  For the fourth quarter of 2015, non-interest income increased by $3.5 million or 20.9%, reflecting similar trends as in the year-to-date period, while bank-owned life insurance increased by $0.6 million or 54.1% due to a death benefit, and net securities gains increased by $0.7 million.

 

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Non-Interest Expense

The following paragraph on non-interest expense excludes annual after-tax merger-related expenses of $7.2 million in 2015 and $0.9 million in 2014.  In 2015, non-interest expense grew 14.0%, compared to 2014, primarily due to the ESB acquisition.  With net revenue growth of 19.0%, the efficiency ratio improved in 2015 to 57.1% from 59.6% in 2014. Overall, non-interest expense increased $22.5 million or 14.0% in 2015, principally from the acquisition which increased assets by $2.0 billion and added 23 offices to our branch network.  Salaries and wages increased $9.9 million or 14.7%, due to a 13.0% increase in average full-time equivalent employees from the merger and routine annual adjustments to compensation, partially offset by increased deferrals of compensation costs on new loan originations. Employee benefits expense increased $5.4 million or 25.0%, primarily from increased pension, health insurance, social security contributions and other benefit plan costs.  Net occupancy increased $1.5 million principally due to increased building-related costs including utilities, lease expense, and depreciation. Equipment costs increased $1.7 million related to continuous improvements in computer system infrastructure, and origination and customer support systems.  Amortization of intangible assets increased $1.2 million from additional ESB intangible assets, related to core deposits and non-compete agreements. In the fourth quarter, non-interest expense increased by $6.2 million or 15.2% compared to the fourth quarter of 2014, reflecting factors similar to the 12 month period.

Financial Results Conference Call

WesBanco will also host a conference call to discuss the Company's financial results for the fourth quarter of 2015 at 10 a.m. ET on Wednesday, January 27, 2016.  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, 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.

WesBanco is a multi-state bank holding company with total assets of approximately $8.5 billion, operating through 141 branch locations and 129 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, 2014 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q for the quarters ended March 31, June 30 and September 30, 2015, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com.  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A.  Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

 

WESBANCO, INC.
Consolidated Selected Financial Highlights														Page 4
(unaudited, dollars in thousands, except shares and per share amounts)
				For the Three Months Ended						For the Year Ended
STATEMENT OF INCOME				December 31,						December 31,
Interest and dividend income				2015		2014		% Change		2015		2014		% Change
	Loans, including fees			$             52,080		$           43,491		19.7		$       203,993		$         172,182		18.5
	Interest and dividends on securities:
		Taxable		10,522		7,181		46.5		39,314		29,233		34.5
		Tax-exempt		4,644		3,356		38.4		16,764		13,589		23.4
			Total interest and dividends on securities	15,166		10,537		43.9		56,078		42,822		31.0
	Other interest income			414		157		163.7		1,641		987		66.3
Total interest and dividend income				67,660		54,185		24.9		261,712		215,991		21.2
Interest expense
	Interest bearing demand deposits			518		400		29.5		1,943		1,568		23.9
	Money market deposits			484		483		0.2		1,914		1,877		2.0
	Savings deposits			165		134		23.1		640		532		20.3
	Certificates of deposit			2,630		2,980		(11.7)		11,033		13,286		(17.0)
			Total interest expense on deposits	3,797		3,997		(5.0)		15,530		17,263		(10.0)
	Federal Home Loan Bank borrowings			2,353		318		639.9		5,510		968		469.2
	Other short-term borrowings			116		78		48.7		370		1,333		(72.2)
	Junior subordinated debt owed to unconsolidated subsidiary trusts			774		806		(4.0)		3,315		3,199		3.6
			Total interest expense	7,040		5,199		35.4		24,725		22,763		8.6
Net interest income				60,620		48,986		23.7		236,987		193,228		22.6
	Provision for credit losses			2,585		1,880		37.5		8,353		6,405		30.4
Net interest income after provision for credit losses				58,035		47,106		23.2		228,634		186,823		22.4
Non-interest income
	Trust fees			5,244		5,115		2.5		21,900		21,069		3.9
	Service charges on deposits			4,401		4,028		9.3		16,743		16,135		3.8
	Electronic banking fees			3,691		3,159		16.8		14,361		12,708		13.0
	Net securities brokerage revenue			1,795		1,389		29.2		7,692		6,922		11.1
	Bank-owned life insurance			1,598		1,037		54.1		4,863		4,614		5.4
	Net gains on sales of mortgage loans			612		426		43.7		2,071		1,604		29.1
	Net securities gains			880		147		498.6		948		903		5.0
	Net gain / (loss) on other real estate owned and other assets			189		212		(10.8)		356		(1,006)		135.4
	Other income			1,616		1,047		54.3		5,532		5,555		(0.4)
			Total non-interest income	20,026		16,560		20.9		74,466		68,504		8.7
Non-interest expense
	Salaries and wages			19,872		16,707		18.9		77,340		67,408		14.7
	Employee benefits			6,745		5,229		29.0		26,896		21,518		25.0
	Net occupancy			3,336		2,857		16.8		13,635		12,122		12.5
	Equipment			3,506		3,008		16.6		13,194		11,542		14.3
	Marketing			1,425		1,250		14.0		5,646		5,242		7.7
	FDIC insurance			1,093		833		31.2		4,107		3,376		21.7
	Amortization of intangible assets			811		466		74.0		3,136		1,920		63.3
	Restructuring and merger-related expense			48		1,309		(96.3)		11,082		1,309		746.6
	Other operating expenses			10,058		10,313		(2.5)		38,887		37,196		4.5
			Total non-interest expense	46,894		41,972		11.7		193,923		161,633		20.0
Income before provision for income taxes				31,167		21,694		43.7		109,177		93,694		16.5
	Provision for income taxes			8,165		5,182		57.6		28,415		23,720		19.8
Net Income				$             23,002		$           16,512		39.3		$         80,762		$           69,974		15.4
Taxable equivalent net interest income				$            63,121		$         50,793		24.3		$      246,014		$      200,545		22.7
Per common share data
Net income per common share - basic				$                 0.60		$               0.56		7.1		$              2.15		$               2.39		(10.0)
Net income per common share - diluted				0.60		0.56		7.1		2.15		2.39		(10.0)
Dividends declared				0.23		0.22		4.5		0.92		0.88		4.5
Book value (period end)										29.18		26.90		8.5
Tangible book value (period end) (1)										16.51		16.09		2.6
Average common shares outstanding - basic				38,507,772		29,291,440		31.5		37,488,331		29,249,499		28.2
Average common shares outstanding - diluted				38,538,771		29,383,506		31.2		37,547,127		29,333,876		28.0
Period end common shares outstanding				38,459,635		29,298,188		31.3		38,459,635		29,298,188		31.3

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