WesBanco Announces Third Quarter 2017 Net Income

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October 18, 2017 4:10 PM UTC

WHEELING, W.Va., Oct. 18, 2017 /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 nine months ended September 30, 2017.  Net income for the three months ended September 30, 2017 increased to $26.4 million, while diluted earnings per share increased to $0.60, compared to $17.4 million and $0.44 per diluted share, respectively, for the third quarter of 2016.  For the nine month period ended September 30, 2017, net income increased to $78.6 million, or $1.78 per diluted share, compared to $62.4 million, or $1.61 per diluted share, for the first nine months of 2016.  Excluding after-tax merger-related expenses (non-GAAP measure), net income for the nine months ended September 30, 2017, increased 13.9% to $78.9 million, or $1.79 per diluted share, compared to $69.3 million, or $1.79 per diluted share, for 2016.  Financial results for Your Community Bankshares, Inc. ("YCB") were included in WesBanco's results after September 9, 2016, the date of the consummation of the merger.

For the Three Months Ended September 30, 

For the Nine Months Ended September 30, 

2017

2016

2017

2016

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

Net Income

Diluted Earnings Per Share

Net Income

Diluted Earnings Per Share

Net Income

Diluted Earnings Per Share

Net Income

Diluted Earnings Per Share

Net income (Non-GAAP)(1)

$      26,356

$       0.60

$      23,859

$       0.60

$      78,903

$       1.79

$      69,292

$       1.79

Less: After tax merger-related expenses

-

-

(6,424)

(0.16)

(319)

(0.01)

(6,875)

(0.18)

Net income (GAAP)

$      26,356

$       0.60

$      17,435

$       0.44

$      78,584

$       1.78

$      62,417

$       1.61

(1)Non-GAAP net income excludes after-tax merger related expenses.  Non-GAAP measures are defined on page 11 under "Non-GAAP Financial Measures."

 Financial and operational highlights for the quarter ending September 30, 2017:

  • Loan growth over the last twelve months was driven by our strategic focus categories
    • 5.5% growth in total commercial loans
    • 4.3% growth in home equity loans
  • Continued strong year-over-year growth in demand deposits
  • Credit quality continues to be strong
  • Net interest margin of 3.48%, increased by 16 basis points compared to the prior year quarter
  • Solid expense management demonstrated by a year-to-date efficiency ratio of 56.91%, as preparations for the $10 billion asset threshold continue to progress well
  • Strong profitability ratios with return on average assets of 1.07% and return on average tangible equity of 13.69%

"WesBanco continues to make good progress on our long-term operational and growth strategies," said Todd F. Clossin, President and Chief Executive Officer of WesBanco.  "We continue to diversify and strengthen the quality of our total loan portfolio.  Our C&I and home equity lending focus provides diversification, and we continue to reduce overall risk through appropriate management of our consumer portfolio.  WesBanco remains well-positioned for success in any type of operating environment.  We have the right teams and products across our geographies for growth during an economic expansion while our history of strong credit quality will help insulate us in a downturn.  We are positioned for rising rates through our asset sensitive balance sheet; however, if the yield curve remains flat, we have continued to demonstrate our ability to manage expenses."

Mr. Clossin added, "Our regulatory preparations for the $10 billion asset threshold have proceeded well and will allow us to cross at the appropriate time.  We continue to be methodical in our plans and anticipate crossing within the next couple of years.  Furthermore, we continue to manage discretionary expenses to help offset the costs of the final preparatory stages for the $10 billion asset threshold."

Balance SheetPortfolio loans, which include $1.0 billion from the YCB acquisition, increased 2.2% over the last twelve months.  Total loan growth was driven by our strategic focus categories with 5.5% growth in total commercial loans and 4.3% growth in home equity loans, which more than offset the targeted reductions in the consumer portfolio as we reduce its risk profile.  In addition, we continued to increase secondary market loan sales in the residential real estate portfolio.  Total deposits, excluding CDs, increased 3.7%, driven by 6.1% growth in interest bearing and non-interest bearing demand deposits.  Further, total demand deposits, as of September 30, 2017, now represent 49.5% of total deposits, an increase from 46.5% a year ago.

Credit QualityThe continued strength of our credit quality ratios is reflective of our strong legacy of credit and risk management.  Compared to the prior year quarter, non-performing assets as a percentage of total assets improved to 0.48% as of September 30, 2017 from 0.50% as of September 30, 2016.  Criticized and classified loans were 1.24% of total loans, improving from 1.42% at September 30, 2016.  Net charge-offs as a percentage of average portfolio loans were 0.12% in the third quarter of 2017, as compared to 0.20% in the third quarter of 2016.  Non-performing loans as a percentage of total portfolio loans remained relatively nominal at 0.66% at September 30, 2017.

The provision for credit losses increased slightly from $2.2 million in the third quarter of 2016 to $2.5 million in the third quarter of 2017 due primarily to loan growth.  The allowance for loan losses of $45.5 million represented 0.71% of total portfolio loans at September 30, 2017, compared to 0.69% in the year ago period.  Included in the ratio are acquired YCB and ESB loans (recorded at fair value at the date of acquisition of $1.7 billion) and the related allowance on YCB and ESB acquired loans of $3.1 million at September 30, 2017.  Excluding these acquired loans and the related allowance required since the acquisition results in a more comparable coverage ratio to prior periods. 

Net Interest Margin and IncomeReflecting the benefit from the increases in the Federal Reserve Board's target federal funds rate over the past year and the higher margin on the acquired YCB net assets, the net interest margin increased to 3.48% during the third quarter of 2017. This represents an increase of 16 basis points from the year ago quarter and an increase of 3 basis points from the second quarter of 2017.  Yields increased on more than 90% of earning assets, which more than offset a 14 basis point increase in the cost of interest bearing liabilities as compared to the third quarter of 2016.  The increase in the cost of interest bearing liabilities is primarily due to higher rates for interest bearing demand deposits, which includes public funds, and certain short term and Federal Home Loan Bank borrowings.  Average interest bearing deposits during the third quarter of 2017 increased 9.4%, compared to the prior year, as all interest bearing deposit balances increased other than CDs.  In addition, the third quarter net interest margin included approximately 12 basis points of accretion from prior acquisitions compared to 6 basis points in the third quarter of 2016, and 8 basis points in the second quarter of 2017.

Net interest income increased $12.2 million, or 19.7%, during the third quarter of 2017 compared to the same quarter of 2016 due to a 17.7% increase in average loan balances and the increase in net interest margin noted above.  For the nine months ended September 30, 2017, net interest income increased $35.5 million, or 19.5%, as average loan balances increased 21.3% and the net interest margin increased 15 basis points to 3.45%.

Non-Interest IncomeFor the third quarter of 2017, non-interest income of $20.9 million was down slightly from the third quarter of 2016.  Reflecting a larger average customer deposit base year-over-year from the addition of YCB, electronic banking fees increased $0.9 million, or 23.8%, and service charges on deposits increased $0.6 million, or 12.4%.  We continued our approach to sell a higher percentage of residential mortgage originations in the secondary market, which increased net gains on sales of mortgage loans by $0.3 million, or 35.5%, year-over-year to $1.1 million.  During the quarter, WesBanco realized a net loss of $0.3 million on other real estate owned and other assets.  Other income decreased $1.2 million due to a decrease in commercial customer loan swap income, primarily related to a larger commercial relationship in the prior year period.

For the nine months ended September 30, 2017, non-interest income increased $5.9 million, or 9.8%, reflecting similar trends compared to the third quarter of 2017 noted above.  In addition, year-to-date trust fees increased $0.9 million, or 5.6%, and trust assets increased 5.8% during the last twelve months, reflecting improvements in equity markets during the last year and organic growth.  Net securities gains decreased $1.8 million year-over-year primarily due to higher gains on sale of securities during 2016.   

Non-Interest ExpenseExcluding merger-related expenses in both years, non-interest expense of $55.8 million in the third quarter of 2017 increased $8.0 million, or 16.8%, compared to the prior year period, principally due to the YCB acquisition.  Salaries and wages increased $3.7 million, or 17.6%, due to higher average staff levels from the YCB acquisition, and the impact of the annual merit adjustments to compensation.  Employee benefits expense increased $1.5 million, or 23.2%, primarily from higher health insurance costs and payroll taxes associated with the additional employees, which more than offset lower pension expense.  When compared to the second quarter of 2017, operating expenses were well-controlled and reflected a sequential decline as marketing costs declined due to the timing of campaigns and WesBanco exhibited discretionary expense control across most categories.

Non-interest expense for the first nine months of 2017, excluding merger-related expenses in both years, increased $25.8 million, or 18.5%, reflecting similar trends compared to the third quarter as noted above.  Reflecting our efforts to control discretionary costs as we continue to prepare for the $10 billion asset threshold, we delivered positive operating leverage for both the three and nine month periods ending September 30, 2017.

Provision for Income TaxesThe provision for income taxes increased $8.2 million, or 36.5%, during the first nine months of 2017, compared to the same period in 2016, due to a 28.7% increase in pre-tax income and the adoption earlier this year of a new accounting standard related to low income housing tax credit investment amortization.  This new standard moved $1.2 million from other operating expense to the provision for income taxes.

CapitalWesBanco continues to maintain strong regulatory capital ratios after the YCB acquisition and implementation of the BASEL III capital standards.  At September 30, 2017, Tier I leverage was 10.21%, Tier I Risk-Based capital was 13.62%, Total Risk-Based capital was 14.65%, and the Common Equity Tier 1 capital ratio ("CET 1") was 11.70%.  Both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards. Total tangible equity to tangible assets (non-GAAP measure) was 8.68% at September 30, 2017, increasing from 8.20% at December 31, 2016, which reflects post-acquisition retained earnings and adjustments to accumulated other comprehensive income.  Further, this ratio returned to the tangible common equity level prior to the acquisition, earning back dilution from the YCB acquisition in less than one year.  Strong earnings and increased total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.26 per share, ten times over the last seven years, a cumulative increase of 86%.  The most recent increase was $0.02 per share per quarter during the first quarter of 2017, which represents an annualized increase of 8.3%.

Conference Call and WebcastWesBanco will also host a conference call to discuss the Company's financial results for the third quarter of 2017 at 10:00 a.m. ET on Thursday, October 19, 2017.  Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com.  Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 412-902-4290 for international callers, and asking to be joined into the WesBanco call.  Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 412-317-0088 for international callers, and providing the access code of 10099584.  The replay will begin at approximately 12:00 p.m. ET October 19, and end at 12 a.m. ET on November 2.  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 StatementsForward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2016 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q for the quarters ended March 31 and June 30, 2017, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com.  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A.  Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

About WesBanco, Inc.Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $9.9 billion as of September 30, 2017.  WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management.  WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with $3.9 billion of assets under management as of September 30, 2017, and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 172 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia.  In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 4

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

For the Three Months Ended

For the Nine Months Ended

STATEMENT OF INCOME

September 30,

September 30,

Interest and dividend income

2017

2016

% Change

2017

2016

% Change

Loans, including fees

$             70,342

$               55,822

26.0

$          202,600

$             160,858

25.9

Interest and dividends on securities:

Taxable 

9,711

9,137

6.3

28,682

29,129

(1.5)

Tax-exempt

4,862

4,559

6.6

14,617

13,620

7.3

Total interest and dividends on securities

14,573

13,696

6.4

43,299

42,749

1.3

Other interest income 

574

574

-

1,674

1,671

0.2

          Total interest and dividend income

85,489

70,092

22.0

247,573

205,278

20.6

Interest expense

Interest bearing demand deposits

1,814

691

162.5

4,413

1,841

139.7

Money market deposits

751

444

69.1

1,970

1,350

45.9

Savings deposits

189

173

9.2

555

502

10.6

Certificates of deposit

2,610

2,592

0.7

7,512

7,835

(4.1)

Total interest expense on deposits

5,364

3,900

37.5

14,450

11,528

25.3

Federal Home Loan Bank borrowings

3,628

3,005

20.7

9,608

9,104

5.5

Other short-term borrowings

394

118

233.9

954

299

219.1

Subordinated debt and junior subordinated debt 

1,849

1,043

77.3

5,449

2,706

101.4

Total interest expense

11,235

8,066

39.3

30,461

23,637

28.9

Net interest income 

74,254

62,026

19.7

217,112

181,641

19.5

Provision for credit losses

2,516

2,214

13.6

7,610

6,350

19.8

Net interest income after provision for credit losses

71,738

59,812

19.9

209,502

175,291

19.5

Non-interest income

Trust fees

5,358

5,413

(1.0)

17,073

16,160

5.6

Service charges on deposits

5,320

4,733

12.4

15,254

12,861

18.6

Electronic banking fees

4,883

3,945

23.8

14,395

11,290

27.5

Net securities brokerage revenue

1,721

1,473

16.8

5,164

5,119

0.9

Bank-owned life insurance

1,164

995

17.0

3,671

2,910

26.2

Net gains on sales of mortgage loans

1,103

814

35.5

3,511

2,045

71.7

Net securities gains

6

598

(99.0)

511

2,293

(77.7)

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

(298)

184

(262.0)

9

380

(97.6)

Other income

1,642

2,862

(42.6)

6,318

6,943

(9.0)

Total non-interest income

20,899

21,017

(0.6)

65,906

60,001

9.8

Non-interest expense

Salaries and wages

24,957

21,225

17.6

71,575

60,136

19.0

Employee benefits

7,728

6,275

23.2

23,670

20,684

14.4

Net occupancy

4,132

3,647

13.3

12,969

10,459

24.0

Equipment 

3,905

3,557

9.8

12,043

10,387

15.9

Marketing

1,599

1,295

23.5

4,482

3,876

15.6

FDIC insurance 

945

961

(1.7)

2,677

3,225

(17.0)

Amortization of intangible assets

1,223

837

46.1

3,736

2,263

65.1

Restructuring and merger-related expense

-

9,883

(100.0)

491

10,577

(95.4)

Other operating expenses  

11,265

9,921

13.5

34,380

28,696

19.8

Total non-interest expense

55,754

57,601

(3.2)

166,023

150,303

10.5

Income before provision for income taxes

36,883

23,228

58.8

109,385

84,989

28.7

Provision for income taxes 

10,527

5,793

81.7

30,801

22,572

36.5

Net Income

$             26,356

$               17,435

51.2

$             78,584

$               62,417

25.9

Taxable equivalent net interest income

$            76,872

$              64,481

19.2

$          224,983

$            188,975

19.1

Per common share data

Net income per common share - basic

$                 0.60

$                   0.44

36.4

$                 1.79

$                   1.61

11.2

Net income per common share - diluted

0.60

0.44

36.4

1.78

1.61

10.6

Dividends declared

0.26

0.24

8.3

0.78

0.72

8.3

Book value (period end)

31.67

30.71

3.1

Tangible book value (period end) (1)

18.40

17.38

5.9

Average common shares outstanding - basic

44,031,813

39,715,516

10.9

43,992,017

38,828,618

13.3

Average common shares outstanding - diluted

44,086,881

39,743,291

10.9

44,059,469

38,855,453

13.4

Period end common shares outstanding

44,033,585

43,860,883

0.4

44,033,585

43,860,883

0.4

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

 

 

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 5

(unaudited, dollars in thousands)

Selected ratios

For the Nine Months Ended

September 30,

2017

2016

% Change

Return on average assets

1.07

%

0.97

%

10.31

%

Return on average equity

7.63

7.12

7.16

Return on average tangible equity (1)

13.69

12.56

9.00

Return on average tangible equity, excluding 

    after-tax merger-related expenses (1)

13.74

13.91

(1.22)

Yield on earning assets (2) 

3.92

3.71

5.66

Cost of interest bearing liabilities

0.62

0.52

19.23

Net interest spread (2)

3.30

3.19

3.45

Net interest margin (2)

3.45

3.30

4.55

Efficiency (1) (2)

56.91

56.12

1.41

Average loans to average deposits

89.72

85.16

5.35

Annualized net loan charge-offs/average loans

0.12

0.14

(14.29)

Effective income tax rate 

28.16

26.56

6.02

For the Quarter Ended

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Sept. 30,

2017

2017

2017

2016

2016

Return on average assets

1.06

%

1.07

%

1.07

%

0.98

%

0.79

%

Return on average equity

7.50

7.67

7.73

7.12

5.71

Return on average tangible equity (1)

13.31

13.74

14.03

13.01

10.02

Return on average tangible equity, excluding 

    after-tax merger-related expenses (1)

13.31

13.74

14.20

13.91

13.60

Yield on earning assets (2) 

3.99

3.91

3.85

3.84

3.73

Cost of interest bearing liabilities

0.67

0.61

0.57

0.55

0.53

Net interest spread (2)

3.32

3.30

3.28

3.29

3.20

Net interest margin (2)

3.48

3.45

3.42

3.42

3.32

Efficiency (1) (2) 

57.03

57.68

56.00

58.13

55.81

Average loans to average deposits

90.43

89.51

89.21

87.63

87.26

Annualized net loan charge-offs/average loans

0.12

0.09

0.15

0.08

0.20

Effective income tax rate 

28.54

26.82

29.09

25.90

24.94

Trust assets, market value at period end

$     3,908,705

$        3,810,038

$        3,836,107

$        3,723,142

$        3,694,405

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

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

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

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

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

 

 

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 6

(unaudited, dollars in thousands, except shares)

% Change

Balance sheets

September 30,

December 31,

December 31, 2016

Assets

2017

2016

% Change

2016

to Sept. 30, 2017

Cash and due from banks

$            96,167

$        106,430

(9.6)

$              106,257

(9.5)

Due from banks - interest bearing

14,704

9,702

51.6

21,913

(32.9)

Securities:

Trading securities, at fair value

7,929

7,070

12.1

7,071

12.1

Available-for-sale, at fair value

1,305,532

1,302,029

0.3

1,241,176

5.2

Held-to-maturity (fair values of $1,044,748; $1,089,227 and $1,076,790, respectively)

1,025,688

1,049,093

(2.2)

1,067,967

(4.0)

Total securities

2,339,149

2,358,192

(0.8)

2,316,214

1.0

Loans held for sale

26,888

20,231

32.9

17,315

55.3

Portfolio loans:

Commercial real estate

3,014,412

2,826,634

6.6

2,873,511

4.9

Commercial and industrial

1,125,693

1,097,788

2.5

1,088,118

3.5

Residential real estate 

1,356,580

1,395,886

(2.8)

1,383,390

(1.9)

Home equity

527,216

505,369

4.3

508,359

3.7

Consumer 

349,148

411,175

(15.1)

396,058

(11.8)

Total portfolio loans, net of unearned income

6,373,049

6,236,852

2.2

6,249,436

2.0

Allowance for loan losses

(45,487)

(42,755)

(6.4)

(43,674)

(4.2)

Net portfolio loans

6,327,562

6,194,097

2.2

6,205,762

2.0

Premises and equipment, net

133,497

138,731

(3.8)

133,297

0.2

Accrued interest receivable

30,152

29,964

0.6

28,299

6.5

Goodwill and other intangible assets, net

590,249

591,866

(0.3)

593,187

(0.5)

Bank-owned life insurance

191,466

186,993

2.4

188,145

1.8

Other assets

168,443

176,178

(4.4)

180,488

(6.7)

Total Assets

$        9,918,277

$      9,812,384

1.1

$           9,790,877

1.3

Liabilities

Deposits:

Non-interest bearing demand

$        1,851,167

$      1,697,476

9.1

$           1,789,522

3.4

Interest bearing demand

1,666,117

1,618,514

2.9

1,546,890

7.7

Money market

990,788

1,016,300

(2.5)

995,477

(0.5)

Savings deposits

1,258,887

1,228,509

2.5

1,213,168

3.8

Certificates of deposit

1,334,066

1,573,712

(15.2)

1,495,822

(10.8)

Total deposits

7,101,025

7,134,511

(0.5)

7,040,879

0.9

Federal Home Loan Bank borrowings

1,015,011

950,847

6.7

968,946

4.8

Other short-term borrowings

165,576

132,497

25.0

199,376

(17.0)

Subordinated debt and junior subordinated debt 

164,278

163,364

0.6

163,598

0.4

Total borrowings

1,344,865

1,246,708

7.9

1,331,920

1.0

Accrued interest payable

3,924

2,898

35.4

2,204

78.0

Other liabilities

73,905

81,116

(8.9)

74,466

(0.8)

Total Liabilities

8,523,719

8,465,233

0.7

8,449,469

0.9

Shareholders' Equity

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

none outstanding

-

-

-

-

-

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

2017 and 2016, respectively; 44,041,572;  43,860,883 and 43,931,715 shares

issued, respectively; 44,033,585; 43,860,883 and 43,931,715 shares

91,753

91,377

0.4

91,524

0.3

outstanding, respectively

Capital surplus

683,348

678,007

0.8

680,507

0.4

Retained earnings

641,329

583,392

9.9

597,071

7.4

Treasury stock (7,987; 0 and 0 shares - at cost, respectively)

(300)

-

(100.0)

-

(100.0)

Accumulated other comprehensive loss

(20,837)

(5,062)

(311.6)

(27,126)

23.2

Deferred benefits for directors

(735)

(563)

(30.6)

(568)

(29.4)

Total Shareholders' Equity

1,394,558

1,347,151

3.5

1,341,408

4.0

Total Liabilities and Shareholders' Equity

$      9,918,277

$   9,812,384

1.1

$         9,790,877

1.3

 

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 7

(unaudited, dollars in thousands, except shares)

Balance sheets

September 30,

June 30,

Assets

2017

2017

% Change

Cash and due from banks

$          96,167

$        104,189

(7.7)

Due from banks - interest bearing

14,704

6,506

126.0

Securities:

Trading securities, at fair value

7,929

7,880

0.6

Available-for-sale, at fair value

1,305,532

1,239,420

5.3

Held-to-maturity (fair values of $1,044,748 and 1,049,374, respectively)

1,025,688

1,030,394

(0.5)

Total securities

2,339,149

2,277,694

2.7

Loans held for sale

26,888

21,677

24.0

Portfolio Loans:

Commercial real estate

3,014,412

3,013,727

0.0

Commercial and industrial

1,125,693

1,136,195

(0.9)

Residential real estate 

1,356,580

1,363,579

(0.5)

Home equity

527,216

516,612

2.1

Consumer 

349,148

360,304

(3.1)

Total portfolio loans, net of unearned income

6,373,049

6,390,417

(0.3)

Allowance for loan losses

(45,487)

(44,909)

(1.3)

Net portfolio loans

6,327,562

6,345,508

(0.3)

Premises and equipment, net

133,497

134,903

(1.0)

Accrued interest receivable

30,152

28,501

5.8

Goodwill and other intangible assets, net

590,249

591,252

(0.2)

Bank-owned life insurance

191,466

190,304

0.6

Other assets

168,443

173,476

(2.9)

Total Assets

$      9,918,277

$     9,874,010

0.4

Liabilities

Deposits:

Non-interest bearing demand

$      1,851,167

$      1,801,423

2.8

Interest bearing demand

1,666,117

1,625,011

2.5

Money market

990,788

1,005,184

(1.4)

Savings deposits

1,258,887

1,255,083

0.3

Certificates of deposit

1,334,066

1,385,772

(3.7)

Total deposits

7,101,025

7,072,473

0.4

Federal Home Loan Bank borrowings

1,015,011

1,021,592

(0.6)

Other short-term borrowings

165,576

167,671

(1.2)

Subordinated debt and junior subordinated debt 

164,278

164,228

0.0

Total borrowings

1,344,865

1,353,491

(0.6)

Accrued interest payable

3,924

2,407

63.0

Other liabilities

73,905

68,102

8.5

Total liabilities

8,523,719

8,496,473

0.3

Shareholders' Equity

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

none outstanding

-

-

-

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

44,041,572 and 44,041,572 shares issued, respectively;

44,033,585 and 44,031,335 shares outstanding, respectively

91,753

91,753

(0.0)

Capital surplus

683,348

682,443

0.1

Retained earnings

641,329

626,421

2.4

Treasury stock (7,987 and 10,237 shares - at cost)

(300)

(385)

(22.0)

Accumulated other comprehensive loss

(20,837)

(22,118)

5.8

Deferred benefits for directors

(735)

(577)

27.3

Total Shareholders' Equity

1,394,558

1,377,537

1.2

Total Liabilities and Shareholders' Equity

$    9,918,277

$   9,874,010

0.4

 

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

Page 8

(unaudited, dollars in thousands)

Average balance sheet and

net interest margin analysis

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2017

2016

2017

2016

Average 

Average

Average 

Average

Average 

Average

Average 

Average

Assets

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

Due from banks - interest bearing

$              9,841

1.26

%

$            17,433

0.80

%

$               12,199

0.80

%

$           31,750

0.52

%

Loans, net of unearned income (1)

6,396,897

4.36

5,436,876

4.08

6,347,626

4.27

5,231,118

4.11

Securities: (2)

    Taxable

1,595,263

2.43

1,590,233

2.30

1,582,875

2.42

1,698,558

2.29

    Tax-exempt (3)

721,343

4.15

655,356

4.28

722,834

4.15

645,522

4.33

        Total securities

2,316,606

2.97

2,245,589

2.88

2,305,709

2.96

2,344,080

2.85

Other earning assets 

48,961

4.44

45,258

4.76

47,511

4.49

45,460

4.54

         Total earning assets (3)

8,772,305

3.99

%

7,745,156

3.73

%

8,713,045

3.92

%

7,652,408

3.71

%

Other assets

1,125,182

989,068

1,123,193

951,530

Total Assets

$       9,897,487

$       8,734,224

$          9,836,238

$      8,603,938

Liabilities and Shareholders' Equity

Interest bearing demand deposits

$       1,635,956

0.44

%

$       1,328,403

0.21

%

$          1,602,546

0.37

%

$      1,250,157

0.20

%

Money market accounts 

994,772

0.30

927,839

0.19

1,015,852

0.26

935,339

0.19

Savings deposits

1,257,785

0.06

1,122,715

0.06

1,246,252

0.06

1,100,094

0.06

Certificates of deposit

1,367,581

0.76

1,426,559

0.72

1,408,231

0.71

1,500,591

0.70

    Total interest bearing deposits

5,256,094

0.40

4,805,516

0.32

5,272,881

0.37

4,786,181

0.32

Federal Home Loan Bank borrowings

1,005,106

1.43

989,585

1.21

967,356

1.33

1,019,696

1.19

Other borrowings

185,051

0.85

114,390

0.41

178,613

0.71

100,054

0.40

Subordinated debt and junior subordinated debt 

164,236

4.47

119,246

3.48

164,112

4.44

110,582

3.27

      Total interest bearing liabilities 

6,610,487

0.67

%

6,028,737

0.53

%

6,582,962

0.62

%

6,016,513

0.52

%

Non-interest bearing demand deposits

1,817,781

1,425,416

1,801,945

1,356,336

Other liabilities

75,254

65,258

74,920

60,290

Shareholders' equity

1,393,965

1,214,813

1,376,411

1,170,799

Total Liabilities and Shareholders' Equity

$       9,897,487

$       8,734,224

$          9,836,238

$      8,603,938

Taxable equivalent net interest spread

3.32

%

3.20

%

3.30

%

3.19

%

Taxable equivalent net interest margin 

3.48

%

3.32

%

3.45

%

3.30

%

(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 were $(0.5) million and $0.8 million for the three months ended September 30, 2017 and 2016, respectively. Loan fees included in interest income on loans

were $1.0 million and $2.3 million for the nine months ended September 30, 2017 and 2016, respectively.

Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $2.4 million and $0.8 million for the three months ended September 30, 2017 and 2016, 

respectively, and loan accretion included in interest income was $4.9 million and $2.3 million  for the nine months ended September 30, 2017 and 2016, respectively.

Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.3 million for both the three months ended September 30, 2017 and 2016 and $1.1 million and $1.2 million for the

nine months ended September 30, 2017 and 2016.

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

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

 

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

 Page 9 

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

Quarter Ended

Statement of Income

Sept.  30,

June 30,

Mar. 31,

Dec. 31,

Sept.  30,

Interest income

2017

2017

2017

2016

2016

Loans, including fees

$                        70,342

$                67,360

$              64,898

$                66,135

$              55,822

Interest and dividends on securities:

Taxable 

9,711

9,375

9,596

9,359

9,137

Tax-exempt

4,862

4,864

4,891

4,770

4,559

Total interest and dividends on securities

14,573

14,239

14,487

14,129

13,696

Other interest income 

574

561

539

555

574

          Total interest and dividend income

85,489

82,160

79,924

80,819

70,092

Interest expense

Interest bearing demand deposits

1,814

1,506

1,093

975

691

Money market deposits

751

644

574

510

444

Savings deposits

189

185

181

194

173

Certificates of deposit

2,610

2,491

2,411

2,585

2,592

Total interest expense on deposits

5,364

4,826

4,259

4,264

3,900

Federal Home Loan Bank borrowings

3,628

3,145

2,836

2,881

3,005

Other short-term borrowings

394

262

297

179

118

Subordinated debt and junior subordinated debt

1,849

1,788

1,813

1,807

1,043

Total interest expense

11,235

10,021

9,205

9,131

8,066

Net interest income 

74,254

72,139

70,719

71,688

62,026

Provision for credit losses

2,516

2,383

2,711

2,128

2,214

Net interest income after provision for credit losses

71,738

69,756

68,008

69,560

59,812

Non-interest income

Trust fees

5,358

5,572

6,143

5,470

5,413

Service charges on deposits

5,320

5,081

4,853

5,474

4,733

Electronic banking fees

4,883

4,984

4,528

4,268

3,945

Net securities brokerage revenue

1,721

1,680

1,762

1,330

1,473

Bank-owned life insurance

1,164

1,367

1,140

1,154

995

Net gains on sales of mortgage loans

1,103

968

1,440

484

814

Net securities gains

6

494

12

63

598

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

(298)

342

(76)

383

184

Other income

1,642

1,634

3,082

2,794

2,862

Total non-interest income

20,899

22,122

22,884

21,420

21,017

Non-interest expense

Salaries and wages

24,957

23,616

23,002

24,145

21,225

Employee benefits

7,728

7,731

8,210

7,267

6,275

Net occupancy

4,132

4,510

4,327

4,272

3,647

Equipment 

3,905

4,097

4,042

4,234

3,557

Marketing

1,599

2,060

824

1,515

1,295

FDIC insurance 

945

906

827

764

961

Amortization of intangible assets

1,223

1,240

1,273

1,334

837

Restructuring and merger-related expense

-

-

491

2,684

9,883

Other operating expenses  

11,265

11,724

11,388

12,083

9,921

Total non-interest expense

55,754

55,884

54,384

58,298

57,601

Income before provision for income taxes

36,883

35,994

36,508

32,682

23,228

Provision for income taxes 

10,527

9,563

10,622

8,464

5,793

Net Income

$                        26,356

$                26,341

$              25,886

$                24,218

$              17,435

Taxable equivalent net interest income

$                       76,872

$               74,758

$             73,353

$               74,256

$             64,481

Per common share data

Net income per common share - basic

$                            0.60

$                    0.60

$                  0.59

$                    0.55

$                  0.44

Net income per common share - diluted

$                            0.60

$                    0.60

$                  0.59

$                    0.55

$                  0.44

Dividends declared

$                            0.26

$                    0.26

$                  0.26

$                    0.24

$                  0.24

Book value (period end)

$                          31.67

$                  31.29

$                30.92

$                  30.53

$                30.71

Tangible book value (period end) (1)

$                          18.40

$                  17.99

$                17.61

$                  17.19

$                17.38

Average common shares outstanding - basic

44,031,813

43,995,749

43,947,563

43,887,781

39,715,516

Average common shares outstanding - diluted

44,086,881

44,061,421

44,020,765

43,935,815

39,743,291

Period end common shares outstanding

44,033,585

44,031,335

43,953,051

43,931,715

43,860,883

Full time equivalent employees

1,944

1,959

1,934

1,928

1,936

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

 

 

WESBANCO, INC.

Consolidated Selected Financial Highlights

 Page 10 

(unaudited, dollars in thousands)

Quarter Ended

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Sept. 30,

Asset quality data

2017

2017

2017

2016

2016

Non-performing assets:

Troubled debt restructurings - accruing

$           6,638

$           6,841

$           7,194

$           7,646

$           8,605

Non-accrual loans:

Troubled debt restructurings

2,982

3,158

3,273

3,546

3,759

Other non-accrual loans

32,476

33,077

36,054

28,238

26,897

    Total non-accrual loans

35,458

36,235

39,327

31,784

30,656

    Total non-performing loans 

42,096

43,076

46,521

39,430

39,261

Other real estate and repossessed assets

5,782

6,723

8,033

8,346

9,794

Total non-performing assets

$         47,878

$         49,799

$         54,554

$         47,776

$         49,055

Past due loans (1):

Loans past due 30-89 days

$         17,292

$         16,605

$         11,426

$         16,029

$         17,569

Loans past due 90 days or more

4,856

4,210

2,766

3,739

2,392

Total past due loans

$         22,148

$         20,815

$         14,192

$         19,768

$         19,961

Criticized and classified loans (2):

Criticized loans

$         34,784

$         39,234

$         36,900

$         24,778

$         35,468

Classified loans

44,303

40,468

48,112

49,965

52,909

Total criticized and classified loans

$         79,087

$         79,702

$         85,012

$         74,743

$         88,377

Loans past due 30-89 days / total portfolio loans

0.27

%

0.26

%

0.18

%

0.26

%

0.28

%

Loans past due 90 days or more / total portfolio loans

0.08

0.07

0.04

0.06

0.04

Non-performing loans / total portfolio loans

0.66

0.67

0.74

0.63

0.63

Non-performing assets/total portfolio loans, other

real estate and repossessed assets

0.75

0.78

0.86

0.76

0.79

Non-performing assets / total assets

0.48

0.50

0.56

0.49

0.50

Criticized and classified loans / total portfolio loans

1.24

1.25

1.35

1.20

1.42

Allowance for loan losses

Allowance for loan losses

$         45,487

$         44,909

$         44,061

$         43,674

$         42,755

Provision for credit losses

2,516

2,383

2,711

2,128

2,214

Net loan and deposit account overdraft charge-offs

1,888

1,486

2,347

1,213

2,798

Annualized net loan charge-offs /average loans

0.12

%

0.09

%

0.15

%

0.08

%

0.20

%

Allowance for loan losses / total portfolio loans

0.71

%

0.70

%

0.70

%

0.70

%

0.69

%

Allowance for loan losses / non-performing loans

1.08

x

1.04

x

0.95

x

1.11

x

1.09

x

Allowance for loan losses / non-performing loans and

loans past due 

0.71

x

0.70

x

0.73

x

0.74

x

0.72

x

Quarter Ended

Sept. 30,

June 30,

Mar. 30,

Dec. 31,

Sept. 30,

2017

2017

2017

2016

2016

Capital ratios

Tier I leverage capital

10.21

%

10.10

%

9.97

%

9.81

%

10.90

%

Tier I risk-based capital

13.62

13.37

13.21

13.16

12.95

Total risk-based capital

14.65

14.39

14.22

14.18

13.95

Common equity tier 1 capital ratio (CET 1)

11.70

11.45

11.28

11.28

11.07

Average shareholders' equity to average assets

14.08

14.01

13.88

13.82

13.91

Tangible equity to tangible assets (3)

8.68

8.53

8.40

8.20

8.26

(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.

 

 

WESBANCO, INC.

NON-GAAP FINANCIAL MEASURES

Page 11

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 

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Sept. 30,

Sept. 30,

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

2017

2017

2017

2016

2016

2017

2016

Return on average tangible equity:

Net income (annualized)

$             104,566

$         105,653

$         104,982

$           96,344

$           69,361

$     105,067

$        83,375

Plus: amortization of intangibles (annualized) (1)

3,154

3,233

3,356

3,451

2,164

3,247

1,965

Net income before amortization of intangibles (annualized)

107,720

108,886

108,338

99,795

71,525

108,314

85,340

Average total shareholders' equity

1,393,965

1,377,266

1,357,602

1,352,813

1,214,813

1,376,411

1,170,799

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

(584,903)

(585,057)

(585,365)

(585,529)

(500,752)

(585,107)

(491,465)

Average tangible equity

$             809,062

$         792,209

$         772,237

$         767,284

$         714,061

$     791,304

$      679,334

Return on average tangible equity

13.31%

13.74%

14.03%

13.01%

10.02%

13.69%

12.56%

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

Net income (annualized)

$             104,566

$         105,653

$         104,982

$           96,346

$           69,361

$     105,067

$        83,375

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

-

-

1,294

6,940

25,556

427

9,183

Plus: amortization of intangibles (annualized) (1)

3,154

3,233

3,356

3,451

2,164

3,247

1,965

Net income before amortization of intangibles and excluding 

    after-tax merger-related expenses (annualized)

107,720

108,886

109,632

106,737

97,081

108,741

94,523

Average total shareholders' equity

1,393,965

1,377,266

1,357,602

1,352,813

1,214,813

1,376,411

1,170,799

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

(584,903)

(585,057)

(585,365)

(585,529)

(500,752)

(585,107)

(491,465)

Average tangible equity

$             809,062

$         792,209

$         772,237

$         767,284

$         714,061

$     791,304

$      679,334

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

13.31%

13.74%

14.20%

13.91%

13.60%

13.74%

13.91%

Efficiency ratio:

Non-interest expense

$               55,754

$           55,884

$           54,384

$           58,298

$           57,601

$     166,023

$      150,303

Less: restructuring and merger-related expense

-

-

(491)

(2,684)

(9,883)

(491)

(10,577)

Non-interest expense excluding restructuring and merger-related expense

55,754

55,884

53,893

55,614

47,718

165,532

139,726

Net interest income on a fully taxable equivalent basis

76,872

74,758

73,353

74,256

64,481

224,983

188,975

Non-interest income

20,899

22,122

22,884

21,420

21,017

65,906

60,001

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

$               97,771

$           96,880

$           96,237

$           95,676

$           85,498

$     290,889

$      248,976

Efficiency Ratio

57.03%

57.68%

56.00%

58.13%

55.81%

56.91%

56.12%

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

Net income 

$               26,356

$           26,341

$           25,886

$           24,218

$           17,435

$       78,584

$        62,417

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

-

-

319

1,745

6,424

319

6,875

Net income, excluding after-tax merger-related expenses

$               26,356

$           26,341

$           26,205

$           25,963

$           23,859

$       78,903

$        69,292

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

Net income per diluted share

$                   0.60

$               0.60

$               0.59

$               0.55

$               0.44

$           1.78

$            1.61

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

-

-

0.01

0.04

0.16

0.01

0.18

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

$                   0.60

$               0.60

$               0.60

$               0.59

$               0.60

$           1.79

$            1.79

Period End

Sept. 30,

June 30,

Mar. 30,

Dec. 31,

Sept. 30,

2017

2017

2017

2016

2016

Tangible book value per share:

Total shareholders' equity

$          1,394,558

$      1,377,537

$      1,359,153

$      1,341,408

$      1,347,151

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

(584,543)

(585,195)

(585,123)

(586,403)

(584,690)

Tangible equity

810,015

792,342

774,030

755,005

762,461

Common shares outstanding

44,033,585

44,031,335

43,953,051

43,931,715

43,860,883

Tangible book value per share

$                 18.40

$             17.99

$             17.61

$             17.19

$             17.38

Tangible equity to tangible assets:

Total shareholders' equity

$          1,394,558

$      1,377,537

$      1,359,153

$      1,341,408

$      1,347,151

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

(584,543)

(585,195)

(585,123)

(586,403)

(584,690)

Tangible equity

810,015

792,342

774,030

755,005

762,461

Total assets

9,918,277

9,874,010

9,800,881

9,790,877

9,812,384

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

(584,543)

(585,195)

(585,123)

(586,403)

(584,690)

Tangible assets

$          9,333,734

$      9,288,815

$      9,215,758

$      9,204,474

$      9,227,694

Tangible equity to tangible assets

8.68%

8.53%

8.40%

8.20%

8.26%

(1) Tax effected at 35%.

 

 

View original content:http://www.prnewswire.com/news-releases/wesbanco-announces-third-quarter-2017-net-income-300539268.html

SOURCE WesBanco, Inc.


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