WesBanco Announces 20% Increase in Third Quarter Net Income

PR Newswire

WHEELING, W.Va., Oct. 22, 2013 /PRNewswire/ -- 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 and nine month periods ended September 30, 2013.

Diluted earnings per share for the nine month period ended September 30, 2013 were up 20.3% to $1.66 compared to $1.38 for the same period last year, while net income for the 2013 nine month period was $48.6 million compared to $36.9 million for 2012, representing an increase of 31.7%.  For the third quarter of 2013, diluted earnings per share totaled $0.53 compared to $0.48 for the third quarter of last year, representing an increase of 10.4%, while net income for the 2013 third quarter totaled $15.5 million compared to $12.9 million for 2012, representing an increase of 20.4%. The increased net income improved the return on average assets to 1.07% from 0.89% in the first nine months of last year, and the return on average tangible equity (non-GAAP measure) increased to 16.35% from 13.87%. The 2013 results include the effect of the late 2012 acquisition of Fidelity Bancorp, Inc., Pittsburgh, PA (" Fidelity").

Mr. Limbert commented, "The third quarter results reflect a continued ability to pass through to our shareholders increased dividends due to the improvement in profitability through growth from the acquisition and from our ability to increase net revenues.  Loan growth over the last two quarters combined with strategies to reduce funding costs have continued to enhance net interest income. Trust fees, securities brokerage revenue and other components of non-interest income continued to improve.  The provision for credit losses remains significantly lower than the provisions recorded in recent years.  Our shareholders have again benefited from these positive results as the dividend was raised to $0.20 per share in August, the second increase in 2013."

Financial Condition

Total assets at September 30, 2013 increased 10.1% or $561.4 million from September 30, 2012, due to the acquisition of Fidelity and organic loan growth.  Portfolio loans increased $483.6 million or 14.4% from September 30, 2012, with $319.2 million from western Pennsylvania, which includes the Fidelity-acquired loans.  The remaining $164.4 million increase in net loan outstandings, a 4.3% organic growth rate year-over-year, came from other WesBanco markets as loan originations outpaced loan repayments. Total loans grew $148.8 million or 4.0% from December 31, 2012, as a result of a 40.1% growth in loan originations in the first nine months of 2013 compared to originations in the same period in 2012. In addition, total loan commitments increased 10.8% year-to-date in 2013.  Deposits increased $572.2 million or 12.8% from September 30, 2012, with $403.6 million from the western Pennsylvania region.  Total assets at September 30, 2013 increased 1.0% compared to 2012 year-end, as loan growth was funded with maturing securities and increases in deposits.

WesBanco has continued to maintain strong regulatory capital ratios.  At September 30, 2013, tier I leverage was 9.27%, tier I risk-based capital was 13.08%, and total risk-based capital was 14.23%, which were similar to or slightly improved from year end.  Both 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 BASEL III capital standards.  Total tangible equity to tangible assets (non-GAAP measure) was 7.13% at September 30, 2013, about the same as a year ago, and up from 6.77% at year-end, despite lower other comprehensive income ("OCI") from lower securities valuations and increased assets.  Strong earnings and improved total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.20 per share, six times over the last two and a half years, cumulatively representing a 43% increase.

Credit Quality

Credit quality has continued to improve over the past year.  Total non-performing loans at September 30, 2013 were $53.6 million or 1.40% of total loans, which represents a 9.3% decrease from $59.1 million or 1.76% at September 30, 2012.  Criticized and classified loans decreased 28.4% over the last twelve months to $141.3 million, or 3.68% of total loans at September 30, 2013 from $197.4 million and 5.89% last year.  The decreases in non-performing loans and criticized and classified loans included the effect of a third quarter 2013 sale of classified loans with a carrying value of $9.4 million, of which $7.3 million were non-performing.

Net charge-offs for the third quarter of 2013 were $5.8 million, or 0.60% of average portfolio loans, and $11.3 million or 0.30% for the year-to-date period, compared to net charge-offs of $4.6 million or 0.54% for the third quarter of 2012, and $18.0 million or 0.55% for the first nine months of 2012.  The third quarter of 2013 includes charges-offs related to the loan sale of $3.5 million which were mostly covered by existing reserves.

As a result of an improvement in all measures of credit quality, the provision for credit losses was $2.8 million for the third quarter of 2013, compared to $4.5 million for the same quarter in 2012, and $5.9 million year-to-date compared to $16.6 million last year.  The third quarter provision increased $1.8 million from the second quarter of 2013 due primarily to loan growth, increases in one smaller loan specific reserve and the impact on applicable historical loss rates of charge-offs related to the loan sales in the current quarter.  The allowance for loan losses represented 1.23% of total portfolio loans at the end of the third quarter 2013 compared to 1.59% last year.

Net Interest Income

Net interest income increased $4.4 million or 10.6% in the third quarter of 2013 compared to the same quarter for 2012, due to a 9.8% increase in average earning assets, primarily through increased average loan balances, both organic and from the Fidelity acquisition.  Year-to-date, net interest income increased $13.2 million or 10.5% from last year.  In addition, the net interest margin increased slightly to 3.52% in the third quarter of 2013, from 3.51% last year.  Year-to-date the margin was 3.58% compared to 3.53% in 2012. The year-to-date margin improvement was due to lower funding costs resulting from a 37.4% average reduction in higher rate FHLB advances and other borrowings, primarily through maturities, a 12.7% increase in total average deposits, with 85.4% of the increase from lower cost demand, money market or savings accounts and the repricing at lower rates of maturing CDs. Accretion of the purchase accounting adjustments for loans, CDs and borrowings acquired with the Fidelity merger also improved the net interest margin by 10 basis points year-to-date.

Non-Interest Income and Non-Interest Expense

Non-interest income for the quarter ended September 30, 2013 increased $1.2 million or 7.2% compared to the third quarter of 2012, and year-to-date the increase was $5.2 million or 10.9%.  Trust fees increased 10.9% for the quarter and 9.7% year-to-date, as assets under management continued to increase from customer development initiatives and overall market improvements. Total trust assets were up 8.2% year-over-year.  Net securities brokerage revenues increased 33.2% and 39.9%, respectively, for the quarter and year-to-date periods also due to the new business initiatives.  Service charges on deposits and electronic banking fees also continued to grow in the third quarter. Net gains on sales of mortgage loans increased 16.0% year-to-date but decreased in the third quarter due to mortgages being retained during the quarter. Securities gains were lower due to reduced portfolio restructuring compared to prior periods as interest rates increased.

Non-interest expense increased $3.2 million or 8.8% for the 2013 third quarter compared to the third quarter of 2012, and $11.7 million or 10.8% for the first nine months of 2013, partially due to recurring expenses related to operating 13 additional branches acquired in the Fidelity acquisition.  Most of the back-office and other administrative savings targeted to be obtained from the merger were accomplished by the end of the second quarter. Salaries and wages increased 11.7% for the third quarter and year-to-date periods compared to the same periods in 2012, due to routine annual adjustments to compensation, increased commissions on higher loan originations and brokerage revenue and an increase in full-time equivalent employees ("FTEs") of 96, primarily from the Fidelity acquisition.  Employee benefit expenses increased primarily from increased pension expense and payroll taxes. Marketing costs were higher compared to 2012 due to additional marketing initiatives during 2013.  Lower merger-related costs benefited both the quarter and the year-to-date period of 2013.

Financial Results Conference Call

WesBanco, Inc. will host a conference call to discuss the Company's financial results for the third quarter of 2013 on Wednesday, October 23, 2013, at 11:00 a.m. E.D.T.  Callers wishing to participate should access the call by dialing (800) 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 at www.wesbanco.com or by registering at http://www.videonewswire.com/event.asp?id=96267 .  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 $6.1 billion, operating through 118 branch locations and 104 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, 2012 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, 2013 and June 30, 2013, respectively, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com .  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A.  Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, that the businesses of WesBanco and Fidelity may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the merger of WesBanco and Fidelity may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and Fidelity may make it more difficult to maintain relationships with clients, associates, or suppliers; the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; 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 Nine Months Ended

STATEMENT OF INCOME

September 30,


September 30,

Interest and dividend income

2013


2012


% Change


2013


2012


% Change


Loans, including fees

$             43,678


$           41,423


5.44%


$       131,706


$         124,345


5.92%


Interest and dividends on securities:














Taxable

7,226


7,722


(6.42%)


22,015


24,784


(11.17%)



Tax-exempt

3,355


3,113


7.77%


9,748


9,270


5.16%




Total interest and dividends on securities

10,581


10,835


(2.34%)


31,763


34,054


(6.73%)


Other interest income

58


30


93.33%


165


115


43.48%

          Total interest and dividend income

54,317


52,288


3.88%


163,634


158,514


3.23%

Interest expense













Interest bearing demand deposits

369


397


(7.05%)


1,035


1,132


(8.57%)


Money market deposits

345


487


(29.16%)


1,023


1,786


(42.72%)


Savings deposits

128


202


(36.63%)


395


697


(43.33%)


Certificates of deposit

5,597


6,450


(13.22%)


17,626


20,050


(12.09%)




Total interest expense on deposits

6,439


7,536


(14.56%)


20,079


23,665


(15.15%)


Federal Home Loan Bank borrowings

291


1,020


(71.47%)


900


3,684


(75.57%)


Other short-term borrowings

651


1,169


(44.31%)


1,900


3,503


(45.76%)


Junior subordinated debt owed to unconsolidated subsidiary trusts

805


869


(7.36%)


2,506


2,598


(3.54%)




Total interest expense

8,186


10,594


(22.73%)


25,385


33,450


(24.11%)

Net interest income

46,131


41,694


10.64%


138,249


125,064


10.54%


Provision for credit losses

2,819


4,497


(37.31%)


5,942


16,602


(64.21%)

Net interest income after provision for credit losses

43,312


37,197


16.44%


132,307


108,462


21.98%

Non-interest income













Trust fees

4,854


4,379


10.85%


14,694


13,390


9.74%


Service charges on deposits

4,650


4,362


6.60%


13,309


12,574


5.85%


Electronic banking fees

3,124


2,846


9.77%


9,186


8,529


7.70%


Net securities brokerage revenue

1,506


1,131


33.16%


4,644


3,319


39.92%


Bank-owned life insurance

911


891


2.24%


3,739


2,646


41.31%


Net gains on sales of mortgage loans

745


993


(24.97%)


2,157


1,860


15.97%


Net securities (losses) / gains

(15)


316


(104.75%)


687


1,711


(59.85%)


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

8


(48)


116.67%


63


(298)


121.14%


Other income

1,333


1,092


22.07%


3,857


3,447


11.89%




Total non-interest income

17,116


15,962


7.23%


52,336


47,178


10.93%

Non-interest expense













Salaries and wages

16,480


14,758


11.67%


48,079


43,028


11.74%


Employee benefits

5,323


5,000


6.46%


17,481


15,538


12.50%


Net occupancy

2,921


2,654


10.06%


8,943


8,133


9.96%


Equipment

2,692


2,300


17.04%


7,901


6,617


19.40%


Marketing

1,585


795


99.37%


4,015


3,282


22.33%


FDIC insurance

916


951


(3.68%)


2,806


2,962


(5.27%)


Amortization of intangible assets

556


519


7.13%


1,742


1,580


10.25%


Restructuring and merger-related expense

36


1,518


(97.63%)


1,265


1,518


(16.67%)


Other operating expenses 

9,500


8,295


14.53%


28,024


25,880


8.28%




Total non-interest expense

40,009


36,790


8.75%


120,256


108,538


10.80%

Income before provision for income taxes

20,419


16,369


24.74%


64,387


47,102


36.70%


Provision for income taxes

4,884


3,463


41.03%


15,815


10,208


54.93%

Net Income

$             15,535


$           12,906


20.37%


$         48,572


$           36,894


31.65%
















Taxable equivalent net interest income

$            47,938


$         43,370


10.53%


$      143,498


$      130,056


10.34%
















Per common share data












Net income per common share - basic

$                 0.53


$               0.48


10.42%


$              1.66


$               1.38


20.29%

Net income per common share - diluted

$                 0.53


$               0.48


10.42%


$              1.66


$               1.38


20.29%

Dividends declared

$                 0.20


$               0.18


11.11%


$              0.58


$               0.52


11.54%

Book value (period end)







$            25.10


$             24.73


1.50%

Tangible book value (period end) (1)







$            14.13


$             14.17


(0.28%)

Average common shares outstanding - basic

29,325,128


26,664,882


9.98%


29,260,967


26,646,719


9.81%

Average common shares outstanding - diluted

29,412,458


26,672,849


10.27%


29,328,305


26,651,322


10.04%

Period end common shares outstanding

29,350,061


26,665,519


10.07%


29,350,061


26,665,519


10.07%
















(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,




2013


2012


% Change

















Return on average assets

1.07

%

0.89

%

20.22

%





Return on average equity

8.91


7.61


17.08






Return on average tangible equity (1)

16.35


13.87


17.88






Yield on earning assets (2)

4.21


4.44


(5.18)






Cost of interest bearing liabilities

0.77


1.08


(28.70)






Net interest spread (2)

3.44


3.36


2.38






Net interest margin (2)

3.58


3.53


1.42






Efficiency (1) (2)

60.76


60.38


0.63






Average loans to average deposits

75.11


74.07


1.40






Annualized net loan charge-offs/average loans

0.40


0.73


(45.21)






Effective income tax rate

24.56


21.67


13.34












































































For the Quarter Ended








Sept. 30,


June 30,


Mar. 31,


Dec. 31,


Sept. 30,








2013


2013


2013


2012


2012


















Return on average assets





1.01

%

1.12

%

1.07

%

0.87

%

0.92

%

Return on average equity





8.40


9.33


9.00


7.36


7.83


Return on average tangible equity (1)




15.34


17.04


16.72


13.16


14.09


Yield on earning assets (2)





4.13


4.20


4.31


4.27


4.37


Cost of interest bearing liabilities




0.73


0.77


0.81


0.93


1.03


Net interest spread (2)





3.40


3.43


3.50


3.34


3.34


Net interest margin (2)





3.52


3.56


3.64


3.50


3.51


Efficiency (1) (2)






61.45


60.25


60.59


62.67


59.45


Average loans to average deposits




76.16


75.27


73.86


74.40


74.95


Annualized net loan charge-offs/average loans

0.60


0.26


0.34


0.47


0.54


Effective income tax rate





23.92


26.63


22.88


21.09


21.16


Trust assets, market value at period end

$     3,501,873


$        3,440,666


$        3,451,124


$        3,238,556


$        3,236,618













(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, 2012


Assets



2013


2012


% Change


2012

to Sept. 30, 2013


Cash and due from banks


$         140,234


$          97,736


43.48

%

$                91,716

52.90

%

Due from banks - interest bearing


5,405


18,675


(71.06)


33,889

(84.05)


Securities:













Available-for-sale, at fair value


933,455


993,754


(6.07)


1,021,244

(8.60)



Held-to-maturity (fair values of $607,215; $598,854 and $639,273, respectively)


602,588


559,156


7.77


602,509

0.01




Total securities


1,536,043


1,552,910


(1.09)


1,623,753

(5.40)


Loans held for sale


6,601


14,225


(53.60)


21,903

(69.86)


Portfolio loans:












Commercial real estate


1,867,782


1,717,241


8.77


1,858,345

0.51



Commercial and industrial


544,202


447,767


21.54


478,025

13.84



Residential real estate 


879,703


684,016


28.61


793,702

10.84



Home equity


283,488


255,787


10.83


277,226

2.26



Consumer 


261,363


248,155


5.32


280,464

(6.81)


Total portfolio loans, net of unearned income


3,836,538


3,352,966


14.42


3,687,762

4.03


Allowance for loan losses


(47,342)


(53,476)


11.47


(52,699)

10.17




Net portfolio loans


3,789,196


3,299,490


14.84


3,635,063

4.24


Premises and equipment, net


92,696


80,176


15.62


88,866

4.31


Accrued interest receivable


19,903


19,171


3.82


19,354

2.84


Goodwill and other intangible assets, net


321,972


281,570


14.35


324,465

(0.77)


Bank-owned life insurance


120,457


112,720


6.86


119,671

0.66


Other assets


105,853


100,286


5.55


120,037

(11.82)


Total Assets


$    6,138,360


$   5,576,959


10.07

%

$         6,078,717

0.98

%















Liabilities











Deposits:













Non-interest bearing demand


$         917,478


$        760,308


20.67

%

$              874,923

4.86

%


Interest bearing demand


870,319


784,748


10.90


831,368

4.69



Money market


858,422


778,121


10.32


847,805

1.25



Savings deposits


775,776


649,959


19.36


740,568

4.75



Certificates of deposit


1,638,447


1,515,076


8.14


1,649,620

(0.68)




Total deposits


5,060,442


4,488,212


12.75


4,944,284

2.35


Federal Home Loan Bank borrowings


59,918


91,617


(34.60)


111,187

(46.11)


Other short-term borrowings


124,179


186,886


(33.55)


142,971

(13.14)


Junior subordinated debt owed to unconsolidated subsidiary trusts


106,127


106,091


0.03


113,832

(6.77)




Total borrowings


290,224


384,594


(24.54)


367,990

(21.13)


Accrued interest payable


3,535


4,628


(23.62)


3,856

(8.32)


Other liabilities


47,471


40,203


18.08


48,403

(1.93)


Total Liabilities


5,401,672


4,917,637


9.84


5,364,533

0.69
















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;












29,350,061 shares; 26,667,739 shares and 29,214,660 shares issued, respectively; 












29,350,061 shares; 26,665,519 shares and 29,214,660 shares outstanding, respectively


61,144


55,558


10.05


60,863

0.46


Capital surplus


244,352


192,159


27.16


241,672

1.11


Retained earnings


450,833


411,853


9.46


419,246

7.53


Treasury stock (0; 2,220 and 0 shares - at cost, 












respectively)


-


(44)


(100.00)


-

-


Accumulated other comprehensive income (loss)


(18,442)


1,019


(1,909.81)


(6,365)

(189.74)


Deferred benefits for directors


(1,199)


(1,223)


1.96


(1,232)

2.68


Total Shareholders' Equity


736,688


659,322


11.73


714,184

3.15


Total Liabilities and Shareholders' Equity


$    6,138,360


$   5,576,959


10.07

%

$         6,078,717

0.98

%















 

WESBANCO, INC.







Consolidated Selected Financial Highlights





Page 7


(unaudited, dollars in thousands, except shares)







Balance sheets


September 30,


June 30,



Assets




2013


2013

% Change


Cash and due from banks


$         140,234


$            69,645

101.36

%

Due from banks - interest bearing


5,405


8,425

(35.85)


Securities:









Available-for-sale, at fair value


933,455


971,178

(3.88)



Held-to-maturity (fair values of $607,215 and $615,203, respectively)

602,588


608,761

(1.01)




Total securities


1,536,043


1,579,939

(2.78)


Loans held for sale


6,601


14,517

(54.53)


Portfolio Loans:








Commercial real estate


1,867,782


1,881,083

(0.71)



Commercial and industrial


544,202


542,071

0.39



Residential real estate


879,703


831,362

5.81



Home equity


283,488


280,368

1.11



Consumer


261,363


266,498

(1.93)


Total portfolio loans, net of unearned income


3,836,538


3,801,382

0.92


Allowance for loan losses


(47,342)


(50,381)

6.03




Net portfolio loans


3,789,196


3,751,001

1.02


Premises and equipment, net


92,696


91,894

0.87


Accrued interest receivable


19,903


19,248

3.40


Goodwill and other intangible assets, net


321,972


322,478

(0.16)


Bank-owned life insurance


120,457


119,546

0.76


Other assets


105,853


107,318

(1.37)


Total Assets


$   6,138,360


$    6,084,011

0.89

%











Liabilities








Deposits:









Non-interest bearing demand


$         917,478


$          901,559

1.77

%


Interest bearing demand


870,319


840,263

3.58



Money market


858,422


845,294

1.55



Savings deposits


775,776


775,248

0.07



Certificates of deposit


1,638,447


1,576,391

3.94




Total deposits


5,060,441


4,938,755

2.46


Federal Home Loan Bank borrowings


59,918


60,344

(0.71)


Other short-term borrowings


124,179


200,538

(38.08)


Junior subordinated debt owed to unconsolidated subsidiary trusts


106,127


106,118

0.01




Total borrowings


290,224


367,000

(20.92)


Accrued interest payable


3,535


3,516

0.54


Other liabilities


47,471


48,508

(2.14)


Total liabilities


5,401,672


5,357,779

0.82












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;








29,350,061 shares and 29,282,412 shares issued, respectively;







29,350,061 and 29,282,412 shares outstanding, respectively

61,144


61,005

0.23


Capital surplus


244,352


242,640

0.71


Retained earnings


450,833


441,168

2.19


Treasury stock ( 0 and 0 shares - at cost)


-


-

-


Accumulated other comprehensive income (loss)


(18,442)


(17,329)

(6.42)


Deferred benefits for directors


(1,199)


(1,252)

4.23


Total Shareholders' Equity


736,688


726,232

1.44


Total Liabilities and Shareholders' Equity


$   6,138,360


$    6,084,011

0.89

%











 

WESBANCO, INC.












Consolidated Selected Financial Highlights











Page 8

(unaudited, dollars in thousands)












Average balance sheet and













net interest margin analysis


Three Months Ended September 30,



Nine Months Ended September 30,







2013


2012


2013


2012






Average

Average


Average

Average


Average

Average


Average

Average

Assets





Balance

Rate


Balance

Rate


Balance

Rate


Balance

Rate

Due from banks - interest bearing



$            19,132

0.21%


$            23,504

0.17%


$            35,918

0.22%


$            28,407

0.23%

Loans, net of unearned income (1)



3,814,710

4.54%


3,327,666

4.95%


3,742,840

4.70%


3,275,987

5.07%

Securities: (2)
















    Taxable





1,165,023

2.48%


1,226,207

2.52%


1,188,633

2.47%


1,268,739

2.60%

    Tax-exempt (3)





395,705

5.22%


326,722

5.86%


378,684

5.28%


318,210

5.98%

        Total se... curities





1,560,728

3.18%


1,552,929

3.22%


1,567,317

3.15%


1,586,949

3.28%

Other earning assets





12,838

1.50%


18,904

0.42%


16,164

0.88%


20,448

0.44%

         Total earning assets (3)



5,407,408

4.13%


4,923,003

4.37%


5,362,239

4.21%


4,911,791

4.44%

Other assets





710,760



633,380



723,014



642,838


Total Assets





$     6,118,168



$     5,556,383



$     6,085,253



$     5,554,629


















Liabilities and Shareholders' Equity












Interest bearing demand deposits



$          856,745

0.17%


$          753,966

0.21%


$          855,009

0.16%


$          736,144

0.21%

Money market accounts




843,520

0.16%


768,527

0.25%


845,960

0.16%


775,192

0.31%

Savings deposits





773,432

0.07%


649,231

0.12%


766,574

0.07%


633,829

0.15%

Certificates of deposit




1,628,335

1.36%


1,511,330

1.70%


1,625,312

1.45%


1,543,703

1.73%

    Total interest bearing deposits



4,102,032

0.62%


3,683,054

0.81%


4,092,855

0.66%


3,688,868

0.86%

Federal Home Loan Bank borrowings


60,135

1.92%


119,464

3.40%


65,321

1.84%


142,734

3.45%

Other borrowings





157,328

1.64%


195,109

2.38%


146,632

1.73%


195,810

2.39%

Junior subordinated debt




106,123

3.01%


106,087

3.26%


108,181

3.10%


106,079

3.27%

      Total interest bearing liabilities

4,425,618

0.73%


4,103,714

1.03%


4,412,989

0.77%


4,133,491

1.08%

Non-interest bearing demand deposits

906,638



756,782



890,456



734,248


Other liabilities





52,450



40,221



52,564



39,241


Shareholders' equity





733,462



655,666



729,244



647,649


Total Liabilities and Shareholders' Equity

$     6,118,168



$     5,556,383



$     6,085,253



$     5,554,629


Taxable equivalent net interest spread


3.40%



3.34%



3.44%



3.36%

Taxable equivalent net interest margin


3.52%



3.51%



3.58%



3.53%

















(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 $1.0 million and $1.0 million for the three months ended September 30, 2013 and 2012,




     and $3.0 million and $3.1 million for the nine months ended September 30, 2013 and 2012, respectively.







     Additionally, loan accretion included in interest income on acquired Fidelity loans was $0.4 million for the three months





     ended September 30, 2013 and $2.3 million for the nine months ended September 30, 2013, while accretion on acquired Fidelity interest bearing liabilities


     was $0.4 million for the three months ended September 30, 2013 and $1.4 million for the nine months ended September 30, 2013.





(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

2013


2013


2013


2012


2012


Loans, including fees

$          43,678


$                43,753


$              44,276


$                42,311


$              41,423


Interest and dividends on securities:












Taxable

7,226


7,357


7,433


7,677


7,722



Tax-exempt

3,355


3,264


3,127


3,129


3,113




Total interest and dividends on securities

10,581


10,621


10,560


10,806


10,835


Other interest income

58


50


56


55


30

          Total interest and dividend income

54,317


54,424


54,892


53,172


52,288

Interest expense











Interest bearing demand deposits

369


365


301


395


397


Money market deposits

345


338


339


397


487


Savings deposits

128


127


141


168


202


Certificates of deposit

5,597


5,881


6,148


6,321


6,450




Total interest expense on deposits

6,439


6,711


6,929


7,281


7,536


Federal Home Loan Bank borrowings

291


289


319


789


1,020


Other short-term borrowings

651


627


623


976


1,169


Junior subordinated debt owed to unconsolidated subsidiary trusts

805


808


893


840


869




Total interest expense

8,186


8,435


8,764


9,886


10,594

Net interest income

46,131


45,989


46,128


43,286


41,694


Provision for credit losses

2,819


1,021


2,102


3,272


4,497

Net interest income after provision for credit losses

43,312


44,968


44,026


40,014


37,197

Non-interest income











Trust fees

4,854


4,823


5,018


4,655


4,379


Service charges on deposits

4,650


4,462


4,197


4,565


4,362


Electronic banking fees

3,124


3,195


2,866


2,807


2,846


Net securities brokerage revenue

1,506


1,641


1,497


1,284


1,131


Bank-owned life insurance

911


880


1,949


870


891


Net gains on sales of mortgage loans

745


701


712


1,015


993


Net securities (losses) / gains

(15)


686


16


752


316


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

8


101


(46)


(7)


(48)


Other income

1,333


1,235


1,287


1,656


1,092




Total non-interest income

17,116


17,724


17,496


17,597


15,962

Non-interest expense











Salaries and wages

16,480


15,772


15,826


15,885


14,758


Employee benefits

5,323


5,813


6,345


5,924


5,000


Net occupancy

2,921


2,830


3,192


2,771


2,654


Equipment

2,692


2,802


2,407


2,604


2,300


Marketing

1,585


1,624


805


953


795


FDIC insurance

916


919


971


937


951


Amortization of intangible assets

556


561


625


570


519


Restructuring and merger-related expense

36


51


1,178


2,370


1,518


Other operating expenses 

9,500


9,127


9,398


9,567


8,295




Total non-interest expense

40,009


39,499


40,747


41,581


36,790

Income before provision for income taxes

20,419


23,193


20,775


16,030


16,369


Provision for income taxes

4,884


6,176


4,754


3,380


3,463

Net Income

$                      15,535


$                17,017


$              16,021


$                12,650


$              12,906














Taxable equivalent net interest income

$                     47,938


$             47,747


$           47,812


$             44,971


$           43,370














Per common share data










Net income per common share - basic

$                          0.53


$                    0.58


$                  0.55


$                    0.46


$                  0.48

Net income per common share - diluted

$                          0.53


$                    0.58


$                  0.55


$                    0.46


$                  0.48

Dividends declared

$                          0.20


$                    0.19


$                  0.19


$                    0.18


$                  0.18

Book value (period end)

$                        25.10


$                  24.80


$                24.80


$                  24.45


$                24.73

Tangible book value (period end) (1)

$                        14.13


$                  13.79


$                13.74


$                  13.34


$                14.17

Average common shares outstanding - basic

29,325,128


29,245,201


29,211,321


27,523,958


26,664,882

Average common shares outstanding - diluted

29,412,458


29,308,806


29,268,483


27,549,655


26,672,849

Period end common shares outstanding

29,350,061


29,282,412


29,214,018


29,214,660


26,665,519

Full time equivalent employees

1,462


1,478


1,448


1,507


1,366



























(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


2013


2013


2013


2012


2012


Non-performing assets:













Troubled debt restructurings - accruing


$         15,480


$         19,269


$         20,420


$         24,281


$         24,858



Non-accrual loans:














Troubled debt restructurings


12,920


15,655


17,106


15,001


9,449




Other non-accrual loans


25,240


27,414


25,620


24,371


24,841




    Total non-accrual loans


38,160


43,069


42,726


39,372


34,290




    Total non-performing loans


53,640


62,338


63,146


63,653


59,148



Other real estate and repossessed assets


5,184


5,007


5,147


5,988


3,951




Total non-performing assets


$         58,824


$         67,345


$         68,293


$         69,641


$         63,099
















Past due loans (1):













Loans past due 30-89 days


$         15,611


$         15,792


$         14,507


$         22,543


$         17,332



Loans past due 90 days or more


3,043


3,594


4,345


5,294


3,560




Total past due loans


$         18,654


$         19,386


$         18,852


$         27,837


$         20,892
















Criticized and classified loans (2):













Criticized loans


$         76,442


$         78,457


$         84,146


$         86,777


$       102,792



Classified loans


64,857


80,621


83,988


85,960


94,613




Total criticized and classified loans


$       141,299


$       159,078


$       168,134


$       172,737


$       197,405
















Loans past due 30-89 days / total loans


0.41

%

0.42

%

0.39

%

0.61

%

0.52

%

Loans past due 90 days or more / total loans


0.08


0.09


0.12


0.14


0.11


Non-performing loans / total loans


1.40


1.64


1.71


1.73


1.76


Non-performing assets/total loans, other













real estate and repossessed assets


1.53


1.77


1.85


1.89


1.88


Criticized and classified loans / total loans


3.68


4.18


4.56


4.68


5.89
















Allowance for loan losses












Allowance for loan losses


$         47,342


$         50,381


$         51,664


$         52,699


$         53,476


Provision for credit losses


2,819


1,021


2,102


3,272


4,497


Net loan and deposit account overdraft charge-offs

5,804


2,433


3,032


4,124


4,566
















Annualized net loan charge-offs /average loans

0.60

%

0.26

%

0.34

%

0.47

%

0.54

%

Allowance for loan losses / portfolio loans


1.23

%

1.33

%

1.40

%

1.43

%

1.59

%

Allowance for loan losses / non-performing loans

0.88

x

0.81

x

0.82

x

0.83

x

0.90

x

Allowance for loan losses / non-performing loans and












loans past due


0.65

x

0.62

x

0.63

x

0.59

x

0.67

x

































Quarter Ended






Sept. 30,


June 30,


Mar. 31,


Dec. 31,


Sept. 30,






2013


2013


2013


2012


2012


Capital ratios












Tier I leverage capital


9.27

%

9.13

%

8.92

%

9.34

%

9.11

%

Tier I risk-based capital


13.08


12.85


12.88


12.82


13.20


Total risk-based capital


14.23


14.08


14.13


14.07


14.45


Average shareholders' equity to average assets

11.99


12.05


11.91


11.87


11.80


Tangible equity to tangible assets (3)


7.13


7.01


6.97


6.77


7.13






























(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 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)

2013


2013


2013


2012


2012


2013

2012

Return on average tangible equity:














Net income (annualized)


$              61,634


$        68,256


$       64,974


$       50,325


$       51,345


$       64,941

$        49,282


Plus: amortization of intangibles (annualized) (1)

1,434


1,464


1,647


1,473


1,342


1,514

1,372


Net income before amortization of intangibles (annualized)

63,068


69,720


66,621


51,798


52,687


66,455

50,654


















Average total shareholders' equity

733,462


731,935


722,211


683,694


655,666


729,244

647,649


Less: average goodwill and other intangibles

(322,209)


(322,717)


(323,662)


(290,054)


(281,820)


(322,857)

(282,334)


Average tangible equity


411,253


409,218


398,548


393,640


373,846


406,387

365,315

















Return on average tangible equity


15.34%


17.04%


16.72%


13.16%


14.09%


16.35%

13.87%

















Net Income, excluding restructuring and merger-related expenses per diluted share:














Net income



$              15,535


$        17,017


$       16,021


$       12,650


$       12,906


$       48,572

$        36,894


Add: Restructuring and merger-related expenses, net of tax (1)

23


33


766


1,541


987


822

987


Net income, excluding restructuring and merger-related expenses

$              15,558


$        17,050


$       16,787


$       14,191


$       13,893


$       49,394

$        37,881


















Average common shares outstanding - diluted

29,412,458


29,308,806


29,268,483


27,549,655


26,672,849


29,328,305

26,646,719

















Net income, excluding restructuring and merger-related expense per diluted share

$                  0.53


$            0.58


$           0.57


$           0.52


$           0.52


$           1.68

$            1.42





















Period End








Sept. 30,


June 30,


Mar. 31,


Dec. 31,


Sept. 30,








2013


2013


2013


2012


2012




Tangible book value:















Total shareholders' equity


$            736,688


$      726,232


$     724,409


$     714,184


$     659,322





Less:  goodwill and other intangible assets

(321,972)


(322,478)


(323,003)


(324,465)


(281,570)





Tangible equity


414,716


403,754


401,406


389,719


377,752





















Common shares outstanding


29,350,061


29,282,412


29,214,018


29,214,660


26,665,519




















Tangible book value



$                14.13


$          13.79


$         13.74


$         13.34


$         14.17




































Tangible equity to tangible assets:














Total shareholders' equity


$            736,688


$      726,232


$     724,409


$     714,184


$     659,322





Less:  goodwill and other intangible assets

(321,972)


(322,478)


(323,003)


(324,465)


(281,570)





Tangible equity


414,716


403,754


401,406


389,719


377,752





















Total assets



6,138,360


6,084,011


6,085,448


6,078,717


5,576,959





Less:  goodwill and other intangible assets

(321,972)


(322,478)


(323,003)


(324,465)


(281,570)





Tangible assets


5,816,388


5,761,533


5,762,445


5,754,252


5,295,389




















Tangible equity to tangible assets


7.13%


7.01%


6.97%


6.77%


7.13%



















 

Efficiency ratio:















Efficiency ratio is calculated by dividing non-interest expense less restructuring and merger related expenses by the sum of net interest income on a fully taxable equivalent basis plus non-interest income.

















(1) Tax effected at 35%.














 

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