Attached files
| file | filename |
|---|---|
| 8-K - 8-K - WESBANCO INC | d416357d8k.htm |
Exhibit 99.1
NEWS FOR IMMEDIATE RELEASE
| July 19, 2017 | For Further Information Contact: | |
| John Iannone | ||
| Vice President, Investor Relations | ||
| (304) 905-7021 | ||
| NASDAQ Symbol: WSBC | ||
| Website: www.wesbanco.com |
WesBanco Announces Second Quarter 2017 Net Income
(Wheeling, WV)… Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ: WSBC), a multi-state bank holding company based in Wheeling, WV, today announced net income and related earnings per share for the three and six months ended June 30, 2017. Net income for the three months ended June 30, 2017 increased to $26.3 million, while diluted earnings per share increased to $0.60, compared to $22.1 million or $0.58 per diluted share for the second quarter of 2016. For the six month period ended June 30, 2017, net income increased to $52.2 million or $1.19 per diluted share compared to $45.0 million or $1.17 per diluted share for the first six months of 2016. Excluding after-tax merger-related expenses (non-GAAP measure), net income for the six months ended June 30, 2017, increased 15.7% to $52.5 million compared to $45.4 million for 2016, while diluted earnings per share improved to $1.19, compared to $1.18 per 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 June 30, | For the Six Months Ended June 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) |
$ | 26,341 | $ | 0.60 | $ | 22,560 | $ | 0.59 | $ | 52,547 | $ | 1.19 | $ | 45,433 | $ | 1.18 | ||||||||||||||||
| Less: After tax merger-related expenses |
— | — | (451 | ) | (0.01 | ) | (319 | ) | — | (451 | ) | (0.01 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income (GAAP) |
$ | 26,341 | $ | 0.60 | $ | 22,109 | $ | 0.58 | $ | 52,228 | $ | 1.19 | $ | 44,982 | $ | 1.17 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (1) | Non-GAAP net income excludes after-tax merger related expenses. Non-GAAP measures are defined on page 12 under “Non-GAAP Financial Measures.” |
“We are pleased with our results for the second quarter of 2017, which were supported by year-over-year organic loan growth of 4.1%” said Mr. Clossin. “Our loan growth continues to benefit from our diversification strategy as we expand total commercial lending, which grew organically 8.7% over the last twelve months. Furthermore, we achieved this growth while maintaining our strong credit culture and underwriting standards, which have allowed us to continue our trend of strong credit quality metrics.”
Mr. Clossin added, “Our expansion into the Southern Indiana and Kentucky markets is progressing very well. We have been able to maintain a very strong team of employees, while also building upon that team through recent hires in the commercial banking and wealth management areas. In fact, WesBanco recently received the top retail banking customer satisfaction ranking in the Louisville market from a major survey company.”
Financial Condition
Total assets at June 30, 2017 increased $1.5 billion, or 17.6%, compared to June 30, 2016. Portfolio loans increased $1.2 billion or 23.6% over the last twelve months with $1.0 billion from the YCB acquisition and $210.1 million, or 4.1%, from organic loan growth. Expanded market areas and additional commercial personnel in our core markets provided the organic loan growth, which occurred primarily in commercial real estate, commercial and industrial, and home equity lending categories. Loan originations during the last twelve months were $2.2 billion, with total business loan originations up approximately 37.6%. The re-mix in earning assets continued as securities as a percentage of total assets were reduced from 26.8% in the second quarter of 2016 to 23.1% in the 2017 second quarter, while loans increased as a percentage of total assets to 64.7% from 61.6% in the second quarter of 2016.
Total deposits increased $1.1 billion, or 19.3%, during the last twelve months. Total organic deposits, excluding CDs, increased 5.7%, driven by 11.9% organic growth in interest bearing and non-interest bearing demand deposits. Total demand deposits, as of June 30, 2017, now represent 48.4% of total deposits, an increase from 42.5% a year ago.
WesBanco continues to maintain strong regulatory capital ratios after the YCB acquisition and implementation of the BASEL III capital standards. At June 30, 2017, Tier I leverage was 10.09%, Tier I Risk-Based capital was 13.36%, Total Risk-Based capital was 14.38% and the Common Equity Tier 1 capital ratio (“CET 1”), was 11.44%. 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 8.53% at June 30, 2017, increasing from 8.20% at December 31, 2016, which reflects post-acquisition retained earnings and adjustments to accumulated other comprehensive income. This ratio has also 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 $0.02 per share during the first quarter of 2017 to $0.26 per share, reflecting the tenth increase during the last seven years, a cumulative increase of 86%.
Credit Quality
Our credit quality continues to be strong and improved year-over-year on a percentage basis. Non-performing loans (including TDRs), and criticized and classified loans all improved as a percentage of total portfolio loans from June 30, 2016. Non-performing loans were 0.67% of total loans at June 30, 2017, decreasing from 0.80% of total loans at the end of the second quarter of 2016. Criticized and classified loans were 1.25% of total loans, improving from 1.53% at June 30, 2016, a reduction of $5.3 million. Net charge-offs as a percentage of average portfolio loans were 0.09% in the second quarter of 2017 as compared to 0.08% in the second quarter of 2016.
The allowance for loan losses represented 0.70% of total portfolio loans at June 30, 2017 compared to 0.84% as of June 30, 2016. 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 $3.3 million at June 30, 2017. Excluding these acquired loans and the related allowance results in a more comparable coverage ratio to prior periods. The provision for credit losses increased to $2.4 million in the second quarter of 2017 compared to $1.8 million in the second quarter of 2016, due primarily to loan growth. On a linked quarter basis, the provision decreased $0.3 million.
Net Interest Income
The yield on earning assets has increased in each of the last six quarters totaling 22 basis points, with 18 basis points of the increase occurring subsequent to the acquisition of YCB’s higher yielding earning assets in September 2016. Six basis points of the increase occurred in the most recent quarter after the first quarter’s Federal Reserve Board’s target federal funds rate increased 25 basis points. As a result, the net interest margin increased by 15 basis points to 3.45% in the second quarter of 2017 compared to 3.30% in the second quarter of 2016. Yields increased on more than 90% of earning assets, which more than offset an 8 basis point increase in the cost of interest bearing liabilities as compared to the second quarter of 2016. The increase in the cost of interest bearing liabilities is primarily due to higher rates for certain short term borrowings and interest bearing demand deposits, which includes public funds. Average interest bearing deposits during the 2017 second quarter increased 12.2%, compared to the second quarter of 2016, as all interest bearing deposit balances increased other than CDs. In addition, the second quarter net interest margin included approximately 8 basis points of accretion from prior acquisitions compared to 7 basis points in the second quarter of 2016, and 8 basis points in the first quarter of 2017.
Net interest income increased $12.4 million, or 20.7%, during the second quarter of 2017 compared to the same quarter of 2016 due to a 23.4% increase in average loan balances and the increase in net interest margin noted above. Year-to-date, net interest income increased $23.2 million, or 19.4%, as average earning assets increased 14.4% and the net interest margin increased 14 basis points to 3.43%.
2
Non-Interest Income
For the second quarter of 2017, non-interest income increased $2.5 million, or 12.9%, compared to the second quarter of 2016. Reflecting improvements in equity markets during the last year, organic growth and higher estate fees, trust fees increased $0.5 million, or 10.6%, and trust assets increased 4.1%. Service charges on deposits increased $0.9 million, or 21.7%, and electronic banking fees increased $1.2 million, or 33.2%, through a larger customer deposit base from the addition of YCB. Bank-owned life insurance increased $0.4 million primarily due to life insurance benefits accrued in the second quarter of 2017. Other income decreased $0.8 million primarily due to a decrease in commercial customer loan swap income, which was related to a larger commercial project in the prior year period.
For the six month period ending June 30, 2017, non-interest income increased $6.0 million, reflecting similar trends as in the second quarter, while net gains on the sale of mortgage loans increased $1.2 million due to increases in mortgage loans sold into the secondary market, as total mortgage loan volume increased by 15.9% to $188.5 million. Net securities gains decreased $1.2 million for the six months ended June 30, 2017, primarily due to gains on called securities in 2016 as compared to the six months ended June 30, 2016.
Non-Interest Expense
Excluding merger-related expenses in both years, non-interest expense in the second quarter of 2017 increased $9.2 million, or 19.8%, compared to the prior year period, principally due to the acquisition. Salaries and wages increased $3.9 million, or 19.7%, due to an 18.7% increase in full-time equivalent employees primarily from the YCB acquisition, and annual adjustments to compensation effective during the quarter. Employee benefits expense increased $0.4 million, or 5.4%, primarily from higher health insurance costs and payroll taxes associated with the additional employees, which more than offset lower pension expense. Increases in net occupancy and equipment were also primarily related to the additional financial centers from the YCB acquisition. Marketing expense was seasonally higher during the second quarter reflecting advertising campaigns, with the year-over-year increase related to the market expansion from the acquisition. FDIC insurance decreased 17.6%, even with the acquisition, due to improved risk factors. Post-conversion cost savings continue to be experienced after the late 2016 branch and system conversions. Other operating expenses increased $2.1 million, or 22.4%, through increases in miscellaneous taxes, professional fees, postage, and communications primarily due to the YCB acquisition. For the first six months of 2017, non-interest expense increased $17.8 million, or 19.3%, reflecting similar trends as in the second quarter, while payroll taxes were seasonally higher in the first quarter.
Provision for Income Taxes
The provision for income tax increased $3.5 million, or 20.8%, during the first half of 2017 compared to the first half of 2016, due in part to the adoption earlier this year of a new accounting standard related to low income housing investment amortization which, during 2017, moved $0.8 million from other operating expense to the provision for income taxes. In addition, first half of 2017 pre-tax income was 17.4% higher than for the same period of 2016.
Financial Results Conference Call
WesBanco will also host a conference call to discuss the Company’s financial results for the second quarter of 2017 at 10:00 a.m. ET on Thursday, July 20, 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 10099582. The replay will begin at approximately 12:00 p.m. ET on July 20, and end at 12 a.m. ET on August 3. An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.wesbanco.com).
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 June 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 $3.8 billion of assets under management as of June 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 173 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.
3
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, 2016 and documents subsequently filed by WesBanco with the Securities and Exchange Commission (“SEC”), including WesBanco’s Form 10-Q for the quarter ended March 31, 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.
4
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands, except shares and per share amounts)
STATEMENT OF INCOME
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||||||||||
| 2017 | 2016 | % Change | 2017 | 2016 | % Change | |||||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||||||
| Loans, including fees |
$ | 67,360 | $ | 52,697 | 27.8 | $ | 132,258 | $ | 105,035 | 25.9 | ||||||||||||||
| Interest and dividends on securities: |
||||||||||||||||||||||||
| Taxable |
9,375 | 9,775 | (4.1 | ) | 18,970 | 19,993 | (5.1 | ) | ||||||||||||||||
| Tax-exempt |
4,864 | 4,540 | 7.1 | 9,756 | 9,061 | 7.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total interest and dividends on securities |
14,239 | 14,315 | (0.5 | ) | 28,726 | 29,054 | (1.1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Other interest income |
561 | 573 | (2.1 | ) | 1,100 | 1,097 | 0.3 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total interest and dividend income |
82,160 | 67,585 | 21.6 | 162,084 | 135,186 | 19.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Interest expense |
||||||||||||||||||||||||
| Interest bearing demand deposits |
1,506 | 643 | 134.2 | 2,599 | 1,150 | 126.0 | ||||||||||||||||||
| Money market deposits |
644 | 450 | 43.1 | 1,218 | 906 | 34.4 | ||||||||||||||||||
| Savings deposits |
185 | 165 | 12.1 | 367 | 330 | 11.2 | ||||||||||||||||||
| Certificates of deposit |
2,491 | 2,583 | (3.6 | ) | 4,902 | 5,242 | (6.5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total interest expense on deposits |
4,826 | 3,841 | 25.6 | 9,086 | 7,628 | 19.1 | ||||||||||||||||||
| Federal Home Loan Bank borrowings |
3,145 | 3,031 | 3.8 | 5,980 | 6,099 | (2.0 | ) | |||||||||||||||||
| Other short-term borrowings |
262 | 99 | 164.6 | 560 | 181 | 209.4 | ||||||||||||||||||
| Subordinated debt and junior subordinated debt |
1,788 | 840 | 112.9 | 3,600 | 1,663 | 116.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total interest expense |
10,021 | 7,811 | 28.3 | 19,226 | 15,571 | 23.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net interest income |
72,139 | 59,774 | 20.7 | 142,858 | 119,615 | 19.4 | ||||||||||||||||||
| Provision for credit losses |
2,383 | 1,811 | 31.6 | 5,094 | 4,135 | 23.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net interest income after provision for credit losses |
69,756 | 57,963 | 20.3 | 137,764 | 115,480 | 19.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Non-interest income |
||||||||||||||||||||||||
| Trust fees |
5,572 | 5,036 | 10.6 | 11,716 | 10,747 | 9.0 | ||||||||||||||||||
| Service charges on deposits |
5,081 | 4,176 | 21.7 | 9,933 | 8,128 | 22.2 | ||||||||||||||||||
| Electronic banking fees |
4,984 | 3,742 | 33.2 | 9,512 | 7,345 | 29.5 | ||||||||||||||||||
| Net securities brokerage revenue |
1,680 | 1,750 | (4.0 | ) | 3,442 | 3,646 | (5.6 | ) | ||||||||||||||||
| Bank-owned life insurance |
1,367 | 942 | 45.1 | 2,508 | 1,915 | 31.0 | ||||||||||||||||||
| Net gains on sales of mortgage loans |
968 | 683 | 41.7 | 2,408 | 1,231 | 95.6 | ||||||||||||||||||
| Net securities gains |
494 | 585 | (15.6 | ) | 506 | 1,696 | (70.2 | ) | ||||||||||||||||
| Net gain on other real estate owned and other assets |
342 | 214 | 59.8 | 307 | 196 | 56.6 | ||||||||||||||||||
| Other income |
1,634 | 2,463 | (33.7 | ) | 4,674 | 4,080 | 14.6 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total non-interest income |
22,122 | 19,591 | 12.9 | 45,006 | 38,984 | 15.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Non-interest expense |
||||||||||||||||||||||||
| Salaries and wages |
23,616 | 19,731 | 19.7 | 46,618 | 38,911 | 19.8 | ||||||||||||||||||
| Employee benefits |
7,731 | 7,332 | 5.4 | 15,941 | 14,409 | 10.6 | ||||||||||||||||||
| Net occupancy |
4,510 | 3,220 | 40.1 | 8,837 | 6,811 | 29.7 | ||||||||||||||||||
| Equipment |
4,097 | 3,402 | 20.4 | 8,139 | 6,830 | 19.2 | ||||||||||||||||||
| Marketing |
2,060 | 1,608 | 28.1 | 2,884 | 2,581 | 11.7 | ||||||||||||||||||
| FDIC insurance |
906 | 1,099 | (17.6 | ) | 1,733 | 2,264 | (23.5 | ) | ||||||||||||||||
| Amortization of intangible assets |
1,240 | 697 | 77.9 | 2,513 | 1,427 | 76.1 | ||||||||||||||||||
| Restructuring and merger-related expense |
— | 694 | (100.0 | ) | 491 | 694 | (29.3 | ) | ||||||||||||||||
| Other operating expenses |
11,724 | 9,577 | 22.4 | 23,112 | 18,776 | 23.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total non-interest expense |
55,884 | 47,360 | 18.0 | 110,268 | 92,703 | 18.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income before provision for income taxes |
35,994 | 30,194 | 19.2 | 72,502 | 61,761 | 17.4 | ||||||||||||||||||
| Provision for income taxes |
9,653 | 8,085 | 19.4 | 20,274 | 16,779 | 20.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Income |
$ | 26,341 | $ | 22,109 | 19.1 | $ | 52,228 | $ | 44,982 | 16.1 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Taxable equivalent net interest income |
$ | 74,758 | $ | 62,219 | 20.2 | $ | 148,111 | $ | 124,494 | 19.0 | ||||||||||||||
| Per common share data |
||||||||||||||||||||||||
| Net income per common share - basic |
$ | 0.60 | $ | 0.58 | 3.4 | $ | 1.19 | $ | 1.17 | 1.7 | ||||||||||||||
| Net income per common share - diluted |
0.60 | 0.58 | 3.4 | 1.19 | 1.17 | 1.7 | ||||||||||||||||||
| Dividends declared |
0.26 | 0.24 | 8.3 | 0.52 | 0.48 | 8.3 | ||||||||||||||||||
| Book value (period end) |
31.29 | 30.31 | 3.2 | |||||||||||||||||||||
| Tangible book value (period end) (1) |
17.99 | 17.64 | 2.0 | |||||||||||||||||||||
| Average common shares outstanding - basic |
43,995,749 | 38,373,610 | 14.7 | 43,971,789 | 38,380,296 | 14.6 | ||||||||||||||||||
| Average common shares outstanding - diluted |
44,061,421 | 38,410,393 | 14.7 | 44,046,812 | 38,414,922 | 14.7 | ||||||||||||||||||
| Period end common shares outstanding |
44,031,335 | 38,411,343 | 14.6 | 44,031,335 | 38,411,343 | 14.6 | ||||||||||||||||||
| (1) | See non-GAAP financial measures for additional information relating to the calculation of this item. |
Page 5
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands)
Selected ratios
| For the Six Months Ended | ||||||||||||
| June 30, | ||||||||||||
| 2017 | 2016 | % Change | ||||||||||
| Return on average assets |
1.07 | % | 1.06 | % | 0.94 | % | ||||||
| Return on average equity |
7.70 | 7.88 | (2.28 | ) | ||||||||
| Return on average tangible equity (1) |
13.88 | 13.97 | (0.64 | ) | ||||||||
| Return on average tangible equity, excluding after-tax merger-related expenses (1) |
13.97 | 14.10 | (0.92 | ) | ||||||||
| Yield on earning assets (2) |
3.88 | 3.71 | 4.58 | |||||||||
| Cost of interest bearing liabilities |
0.59 | 0.52 | 13.46 | |||||||||
| Net interest spread (2) |
3.29 | 3.19 | 3.13 | |||||||||
| Net interest margin (2) |
3.43 | 3.29 | 4.26 | |||||||||
| Efficiency (1) (2) |
56.84 | 56.28 | 1.00 | |||||||||
| Average loans to average deposits |
89.36 | 84.10 | 6.25 | |||||||||
| Annualized net loan charge-offs/average loans |
0.12 | 0.10 | 20.00 | |||||||||
| Effective income tax rate |
27.96 | 27.17 | 2.91 | |||||||||
| For the Quarter Ended | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Return on average assets |
1.07 | % | 1.07 | % | 0.98 | % | 0.79 | % | 1.05 | % | ||||||||||
| Return on average equity |
7.67 | 7.73 | 7.12 | 5.71 | 7.69 | |||||||||||||||
| Return on average tangible equity (1) |
13.74 | 14.03 | 13.01 | 10.02 | 13.55 | |||||||||||||||
| Return on average tangible equity, excluding after-tax merger-related expenses (1) |
13.74 | 14.20 | 13.91 | 13.60 | 13.82 | |||||||||||||||
| Yield on earning assets (2) |
3.91 | 3.85 | 3.84 | 3.73 | 3.71 | |||||||||||||||
| Cost of interest bearing liabilities |
0.61 | 0.57 | 0.55 | 0.53 | 0.53 | |||||||||||||||
| Net interest spread (2) |
3.30 | 3.28 | 3.29 | 3.20 | 3.18 | |||||||||||||||
| Net interest margin (2) |
3.45 | 3.42 | 3.42 | 3.32 | 3.30 | |||||||||||||||
| Efficiency (1) (2) |
57.68 | 56.00 | 58.13 | 55.81 | 57.04 | |||||||||||||||
| Average loans to average deposits |
89.51 | 89.21 | 87.63 | 87.26 | 84.99 | |||||||||||||||
| Annualized net loan charge-offs/average loans |
0.09 | 0.15 | 0.08 | 0.20 | 0.08 | |||||||||||||||
| Effective income tax rate |
26.82 | 29.09 | 25.90 | 24.94 | 26.78 | |||||||||||||||
| Trust assets, market value at period end |
$ | 3,810,038 | $ | 3,836,107 | $ | 3,723,142 | $ | 3,694,405 | $ | 3,660,736 | ||||||||||
| (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. |
Page 6
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands, except shares)
Balance sheets
| June 30, | December 31, | % Change December 31, 2016 |
||||||||||||||||||
| 2017 | 2016 | % Change | 2016 | to June 30, 2017 | ||||||||||||||||
| Assets |
||||||||||||||||||||
| Cash and due from banks |
$ | 104,189 | $ | 85,788 | 21.4 | $ | 106,257 | (1.9 | ) | |||||||||||
| Due from banks - interest bearing |
6,506 | 1,838 | 254.0 | 21,913 | (70.3 | ) | ||||||||||||||
| Securities: |
||||||||||||||||||||
| Trading securities, at fair value |
7,880 | 6,919 | 13.9 | 7,071 | 11.4 | |||||||||||||||
| Available-for-sale, at fair value |
1,239,420 | 1,248,016 | (0.7 | ) | 1,241,176 | (0.1 | ) | |||||||||||||
| Held-to-maturity (fair values of $1,049,374; $1,044,644 and $1,076,790, respectively) |
1,030,394 | 997,354 | 3.3 | 1,067,967 | (3.5 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total securities |
2,277,694 | 2,252,289 | 1.1 | 2,316,214 | (1.7 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Loans held for sale |
21,677 | 9,974 | 117.3 | 17,315 | 25.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Portfolio loans: |
||||||||||||||||||||
| Commercial real estate |
3,013,727 | 2,283,198 | 32.0 | 2,873,511 | 4.9 | |||||||||||||||
| Commercial and industrial |
1,136,195 | 814,055 | 39.6 | 1,088,118 | 4.4 | |||||||||||||||
| Residential real estate |
1,363,579 | 1,242,015 | 9.8 | 1,383,390 | (1.4 | ) | ||||||||||||||
| Home equity |
516,612 | 435,187 | 18.7 | 508,359 | 1.6 | |||||||||||||||
| Consumer |
360,304 | 395,377 | (8.9 | ) | 396,058 | (9.0 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total portfolio loans, net of unearned income |
6,390,417 | 5,169,832 | 23.6 | 6,249,436 | 2.3 | |||||||||||||||
| Allowance for loan losses |
(44,909 | ) | (43,328 | ) | (3.6 | ) | (43,674 | ) | (2.8 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net portfolio loans |
6,345,508 | 5,126,504 | 23.8 | 6,205,762 | 2.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Premises and equipment, net |
134,903 | 110,611 | 22.0 | 133,297 | 1.2 | |||||||||||||||
| Accrued interest receivable |
28,501 | 24,588 | 15.9 | 28,299 | 0.7 | |||||||||||||||
| Goodwill and other intangible assets, net |
591,252 | 490,143 | 20.6 | 593,187 | (0.3 | ) | ||||||||||||||
| Bank-owned life insurance |
190,304 | 152,876 | 24.5 | 188,145 | 1.1 | |||||||||||||||
| Other assets |
173,476 | 142,813 | 21.5 | 180,488 | (3.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Assets |
$ | 9,874,010 | $ | 8,397,424 | 17.6 | $ | 9,790,877 | 0.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Liabilities |
||||||||||||||||||||
| Deposits: |
||||||||||||||||||||
| Non-interest bearing demand |
$ | 1,801,423 | $ | 1,310,981 | 37.4 | $ | 1,789,522 | 0.7 | ||||||||||||
| Interest bearing demand |
1,625,011 | 1,208,149 | 34.5 | 1,546,890 | 5.1 | |||||||||||||||
| Money market |
1,005,184 | 890,584 | 12.9 | 995,477 | 1.0 | |||||||||||||||
| Savings deposits |
1,255,083 | 1,088,032 | 15.4 | 1,213,168 | 3.5 | |||||||||||||||
| Certificates of deposit |
1,385,772 | 1,430,353 | (3.1 | ) | 1,495,822 | (7.4 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
7,072,473 | 5,928,099 | 19.3 | 7,040,879 | 0.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Federal Home Loan Bank borrowings |
1,021,592 | 1,056,970 | (3.3 | ) | 968,946 | 5.4 | ||||||||||||||
| Other short-term borrowings |
167,671 | 79,103 | 112.0 | 199,376 | (15.9 | ) | ||||||||||||||
| Subordinated debt and junior subordinated debt |
164,228 | 106,196 | 54.6 | 163,598 | 0.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total borrowings |
1,353,491 | 1,242,269 | 9.0 | 1,331,920 | 1.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Accrued interest payable |
2,407 | 2,200 | 9.4 | 2,204 | 9.2 | |||||||||||||||
| Other liabilities |
68,102 | 60,436 | 12.7 | 74,466 | (8.5 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Liabilities |
8,496,473 | 7,233,004 | 17.5 | 8,449,469 | 0.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Shareholders’ Equity |
||||||||||||||||||||
| Preferred stock, no par value; 1,000,000 shares authorized; none outstanding |
— | — | — | — | — | |||||||||||||||
| Common stock, $2.0833 par value; 100,000,000 shares authorized in 2017 and 2016, respectively; 44,041,572; 38,546,042 and 43,931,715 shares issued, respectively; 44,031,335; 38,411,343 and 43,931,715 shares outstanding, respectively |
91,753 | 80,304 | 14.3 | 91,524 | 0.3 | |||||||||||||||
| Capital surplus |
682,443 | 515,156 | 32.5 | 680,507 | 0.3 | |||||||||||||||
| Retained earnings |
626,421 | 576,483 | 8.7 | 597,071 | 4.9 | |||||||||||||||
| Treasury stock (10,237; 134,699 and 0 shares - at cost, respectively) |
(385 | ) | (3,868 | ) | (90.0 | ) | — | (100.0 | ) | |||||||||||
| Accumulated other comprehensive loss |
(22,118 | ) | (3,097 | ) | (614.2 | ) | (27,126 | ) | 18.5 | |||||||||||
| Deferred benefits for directors |
(577 | ) | (558 | ) | (3.4 | ) | (568 | ) | (1.6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Shareholders’ Equity |
1,377,537 | 1,164,420 | 18.3 | 1,341,408 | 2.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 9,874,010 | $ | 8,397,424 | 17.6 | $ | 9,790,877 | 0.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Page 7
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands, except shares)
Balance sheets
| June 30, | March 31, | |||||||||||
| 2017 | 2017 | % Change | ||||||||||
| Assets |
||||||||||||
| Cash and due from banks |
$ | 104,189 | $ | 101,559 | 2.6 | |||||||
| Due from banks - interest bearing |
6,506 | 13,525 | (51.9 | ) | ||||||||
| Securities: |
||||||||||||
| Trading securities, at fair value |
7,880 | 7,773 | 1.4 | |||||||||
|
Available-for-sale, at fair value |
1,239,420 | 1,225,069 | 1.2 | |||||||||
| Held-to-maturity (fair values of $1,049,374 and 1,071,009, respectively) |
1,030,394 | 1,057,753 | (2.6 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total securities |
2,277,694 | 2,290,595 | (0.6 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Loans held for sale |
21,677 | 11,480 | 88.8 | |||||||||
|
|
|
|
|
|
|
|||||||
| Portfolio Loans: |
||||||||||||
| Commercial real estate |
3,013,727 | 2,952,603 | 2.1 | |||||||||
| Commercial and industrial |
1,136,195 | 1,106,719 | 2.7 | |||||||||
| Residential real estate |
1,363,579 | 1,367,132 | (0.3 | ) | ||||||||
| Home equity |
516,612 | 508,411 | 1.6 | |||||||||
| Consumer |
360,304 | 377,307 | (4.5 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total portfolio loans, net of unearned income |
6,390,417 | 6,312,172 | 1.2 | |||||||||
| Allowance for loan losses |
(44,909 | ) | (44,061 | ) | (1.9 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net portfolio loans |
6,345,508 | 6,268,111 | 1.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Premises and equipment, net |
134,903 | 134,949 | (0.0 | ) | ||||||||
| Accrued interest receivable |
28,501 | 28,923 | (1.5 | ) | ||||||||
| Goodwill and other intangible assets, net |
591,252 | 591,539 | (0.0 | ) | ||||||||
| Bank-owned life insurance |
190,304 | 189,286 | 0.5 | |||||||||
| Other assets |
173,476 | 170,914 | 1.5 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Assets |
$ | 9,874,010 | $ | 9,800,881 | 0.7 | |||||||
|
|
|
|
|
|
|
|||||||
| Liabilities |
||||||||||||
| Deposits: |
||||||||||||
| Non-interest bearing demand |
$ | 1,801,423 | $ | 1,844,003 | (2.3 | ) | ||||||
| Interest bearing demand |
1,625,011 | 1,599,536 | 1.6 | |||||||||
| Money market |
1,005,184 | 1,029,440 | (2.4 | ) | ||||||||
| Savings deposits |
1,255,083 | 1,253,652 | 0.1 | |||||||||
| Certificates of deposit |
1,385,772 | 1,419,104 | (2.3 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total deposits |
7,072,473 | 7,145,735 | (1.0 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Federal Home Loan Bank borrowings |
1,021,592 | 937,104 | 9.0 | |||||||||
| Other short-term borrowings |
167,671 | 115,643 | 45.0 | |||||||||
| Subordinated debt and junior subordinated debt |
164,228 | 164,177 | 0.0 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total borrowings |
1,353,491 | 1,216,924 | 11.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Accrued interest payable |
2,407 | 2,422 | (0.6 | ) | ||||||||
| Other liabilities |
68,102 | 76,647 | (11.1 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
8,496,473 | 8,441,728 | 0.6 | |||||||||
|
|
|
|
|
|
|
|||||||
| Shareholders’ Equity |
||||||||||||
| Preferred stock, no par value; 1,000,000 shares authorized; none outstanding |
— | — | — | |||||||||
| Common stock, $2.0833 par value; 100,000,000 shares authorized; 44,041,572 and 43,953,051 shares issued, respectively; 44,031,335 and 43,953,051 shares outstanding, respectively |
91,753 | 91,568 | 0.2 | |||||||||
| Capital surplus |
682,443 | 681,471 | 0.1 | |||||||||
| Retained earnings |
626,421 | 611,528 | 2.4 | |||||||||
| Treasury stock (10,237 and 0 shares - at cost) |
(385 | ) | — | (100.0 | ) | |||||||
| Accumulated other comprehensive income (loss) |
(22,118 | ) | (24,841 | ) | 11.0 | |||||||
| Deferred benefits for directors |
(577 | ) | (573 | ) | 0.7 | |||||||
|
|
|
|
|
|
|
|||||||
| Total Shareholders’ Equity |
1,377,537 | 1,359,153 | 1.4 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Liabilities and Shareholders’ Equity |
$ | 9,874,010 | $ | 9,800,881 | 0.7 | |||||||
|
|
|
|
|
|
|
|||||||
Page 8
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands)
Average balance sheet and
net interest margin analysis
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||
| Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||
| Due from banks - interest bearing |
$ | 12,875 | 0.75 | % | $ | 20,985 | 0.72 | % | $ | 13,398 | 0.63 | % | $ | 38,805 | 0.45 | % | ||||||||||||||||
| Loans, net of unearned income (1) |
6,365,965 | 4.24 | 5,156,789 | 4.11 | 6,322,582 | 4.22 | 5,124,942 | 4.12 | ||||||||||||||||||||||||
| Securities: (2) |
||||||||||||||||||||||||||||||||
| Taxable |
1,550,114 | 2.42 | 1,718,491 | 2.28 | 1,576,578 | 2.41 | 1,744,438 | 2.29 | ||||||||||||||||||||||||
| Tax-exempt (3) |
720,561 | 4.15 | 638,746 | 4.37 | 723,593 | 4.15 | 635,773 | 4.39 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total securities |
2,270,675 | 2.97 | 2,357,237 | 2.84 | 2,300,171 | 2.95 | 2,380,211 | 2.85 | ||||||||||||||||||||||||
| Other earning assets |
46,525 | 4.62 | 45,354 | 4.72 | 46,774 | 4.52 | 45,577 | 4.43 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total earning assets (3) |
8,696,040 | 3.91 | % | 7,580,365 | 3.71 | % | 8,682,925 | 3.88 | % | 7,589,535 | 3.71 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Other assets |
1,132,435 | 925,437 | 1,122,181 | 939,226 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total Assets |
$ | 9,828,475 | $ | 8,505,802 | $ | 9,805,106 | $ | 8,528,761 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity |
||||||||||||||||||||||||||||||||
| Interest bearing demand deposits |
$ | 1,634,305 | 0.37 | % | $ | 1,230,484 | 0.21 | % | $ | 1,585,564 | 0.33 | % | $ | 1,209,989 | 0.19 | % | ||||||||||||||||
| Money market accounts |
1,014,682 | 0.25 | 915,879 | 0.20 | 1,026,567 | 0.24 | 937,846 | 0.19 | ||||||||||||||||||||||||
| Savings deposits |
1,253,444 | 0.06 | 1,091,950 | 0.06 | 1,240,390 | 0.06 | 1,088,154 | 0.06 | ||||||||||||||||||||||||
| Certificates of deposit |
1,403,818 | 0.71 | 1,489,764 | 0.70 | 1,428,892 | 0.69 | 1,535,061 | 0.69 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest bearing deposits |
5,306,249 | 0.36 | 4,728,077 | 0.33 | 5,281,413 | 0.35 | 4,771,050 | 0.32 | ||||||||||||||||||||||||
| Federal Home Loan Bank borrowings |
947,346 | 1.33 | 1,021,642 | 1.19 | 948,168 | 1.27 | 1,031,378 | 1.19 | ||||||||||||||||||||||||
| Other borrowings |
153,565 | 0.68 | 95,522 | 0.42 | 175,341 | 0.64 | 91,277 | 0.40 | ||||||||||||||||||||||||
| Subordinated debt and junior subordinated debt |
164,184 | 4.37 | 106,196 | 3.18 | 164,050 | 4.43 | 106,196 | 3.15 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest bearing liabilities |
6,571,344 | 0.61 | % | 5,951,437 | 0.53 | % | 6,568,972 | 0.59 | % | 5,999,901 | 0.52 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Non-interest bearing demand deposits |
1,806,144 | 1,339,436 | 1,793,897 | 1,322,853 | ||||||||||||||||||||||||||||
| Other liabilities |
73,721 | 58,006 | 74,748 | 57,788 | ||||||||||||||||||||||||||||
| Shareholders’ equity |
1,377,266 | 1,156,923 | 1,367,489 | 1,148,219 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 9,828,475 | $ | 8,505,802 | $ | 9,805,106 | $ | 8,528,761 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Taxable equivalent net interest spread |
3.30 | % | 3.18 | % | 3.29 | % | 3.19 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Taxable equivalent net interest margin |
3.45 | % | 3.30 | % | 3.43 | % | 3.29 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| (1) | Gross of allowance for loan losses and net of unearned income. Includes non-accrual and loans held for sale. Loan fees included in interest income on loans are $0.9 million and $0.8 million for the three months ended June 30, 2017 and 2016, respectively. Loan fees included in interest income on loans are $1.5 million for both the six months ended June 30, 2017 and 2016. Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $1.3 million and $0.7 million for the three months ended June 30, 2017 and 2016, respectively, and loan accretion included in interest income was $2.5 million and $1.6 million for the six months ended June 30, 2017 and 2016, respectively. Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.4 million for both the three months ended June 30, 2017 and 2016 and $0.9 million for both the six months ended June 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. |
Page 9
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands, except shares and per share amounts)
Statement of Income
| Quarter Ended | ||||||||||||||||||||
| June 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sept. 30, 2016 |
June 30, 2016 |
||||||||||||||||
| Interest income |
||||||||||||||||||||
| Loans, including fees |
$ | 67,360 | $ | 64,898 | $ | 66,135 | $ | 55,822 | $ | 52,697 | ||||||||||
| Interest and dividends on securities: |
||||||||||||||||||||
| Taxable |
9,375 | 9,596 | 9,359 | 9,137 | 9,775 | |||||||||||||||
| Tax-exempt |
4,864 | 4,891 | 4,770 | 4,559 | 4,540 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest and dividends on securities |
14,239 | 14,488 | 14,129 | 13,696 | 14,315 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Other interest income |
561 | 539 | 555 | 574 | 573 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest and dividend income |
82,160 | 79,924 | 80,819 | 70,092 | 67,585 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest expense |
||||||||||||||||||||
| Interest bearing demand deposits |
1,506 | 1,093 | 975 | 691 | 643 | |||||||||||||||
| Money market deposits |
644 | 574 | 510 | 444 | 450 | |||||||||||||||
| Savings deposits |
185 | 181 | 194 | 173 | 165 | |||||||||||||||
| Certificates of deposit |
2,491 | 2,411 | 2,585 | 2,592 | 2,583 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense on deposits |
4,826 | 4,259 | 4,264 | 3,900 | 3,841 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Federal Home Loan Bank borrowings |
3,145 | 2,836 | 2,881 | 3,005 | 3,031 | |||||||||||||||
| Other short-term borrowings |
262 | 297 | 179 | 118 | 99 | |||||||||||||||
| Subordinated debt and junior subordinated debt |
1,788 | 1,813 | 1,807 | 1,043 | 840 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
10,021 | 9,205 | 9,131 | 8,066 | 7,811 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
72,139 | 70,719 | 71,688 | 62,026 | 59,774 | |||||||||||||||
| Provision for credit losses |
2,383 | 2,711 | 2,128 | 2,214 | 1,811 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for credit losses |
69,756 | 68,008 | 69,560 | 59,812 | 57,963 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-interest income |
||||||||||||||||||||
| Trust fees |
5,572 | 6,143 | 5,470 | 5,413 | 5,036 | |||||||||||||||
| Service charges on deposits |
5,081 | 4,853 | 5,474 | 4,733 | 4,176 | |||||||||||||||
| Electronic banking fees |
4,984 | 4,528 | 4,268 | 3,945 | 3,742 | |||||||||||||||
| Net securities brokerage revenue |
1,680 | 1,762 | 1,330 | 1,473 | 1,750 | |||||||||||||||
| Bank-owned life insurance |
1,367 | 1,140 | 1,154 | 995 | 942 | |||||||||||||||
| Net gains on sales of mortgage loans |
968 | 1,440 | 484 | 814 | 683 | |||||||||||||||
| Net securities gains |
494 | 12 | 63 | 598 | 585 | |||||||||||||||
| Net gain / (loss) on other real estate owned and other assets |
342 | (76 | ) | 383 | 184 | 214 | ||||||||||||||
| Other income |
1,634 | 3,082 | 2,794 | 2,862 | 2,463 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest income |
22,122 | 22,884 | 21,420 | 21,017 | 19,591 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-interest expense |
||||||||||||||||||||
| Salaries and wages |
23,616 | 23,002 | 24,145 | 21,225 | 19,731 | |||||||||||||||
| Employee benefits |
7,731 | 8,210 | 7,267 | 6,275 | 7,332 | |||||||||||||||
| Net occupancy |
4,510 | 4,327 | 4,272 | 3,647 | 3,220 | |||||||||||||||
| Equipment |
4,097 | 4,042 | 4,234 | 3,557 | 3,402 | |||||||||||||||
| Marketing |
2,060 | 824 | 1,515 | 1,295 | 1,608 | |||||||||||||||
| FDIC insurance |
906 | 827 | 764 | 961 | 1,099 | |||||||||||||||
| Amortization of intangible assets |
1,240 | 1,273 | 1,334 | 837 | 697 | |||||||||||||||
| Restructuring and merger-related expense |
— | 491 | 2,684 | 9,883 | 694 | |||||||||||||||
| Other operating expenses |
11,724 | 11,388 | 12,083 | 9,921 | 9,577 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-interest expense |
55,884 | 54,384 | 58,298 | 57,601 | 47,360 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income before provision for income taxes |
35,994 | 36,508 | 32,682 | 23,228 | 30,194 | |||||||||||||||
| Provision for income taxes |
9,653 | 10,622 | 8,464 | 5,793 | 8,085 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net Income |
$ | 26,341 | $ | 25,886 | $ | 24,218 | $ | 17,435 | $ | 22,109 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Taxable equivalent net interest income |
$ | 74,758 | $ | 73,353 | $ | 74,256 | $ | 64,481 | $ | 62,219 | ||||||||||
| Per common share data |
||||||||||||||||||||
| Net income per common share - basic |
$ | 0.60 | $ | 0.59 | $ | 0.55 | $ | 0.44 | $ | 0.58 | ||||||||||
| Net income per common share - diluted |
$ | 0.60 | $ | 0.59 | $ | 0.55 | $ | 0.44 | $ | 0.58 | ||||||||||
| Dividends declared |
$ | 0.26 | $ | 0.26 | $ | 0.24 | $ | 0.24 | $ | 0.24 | ||||||||||
| Book value (period end) |
$ | 31.29 | $ | 30.92 | $ | 30.53 | $ | 30.71 | $ | 30.31 | ||||||||||
| Tangible book value (period end) (1) |
$ | 17.99 | $ | 17.61 | $ | 17.19 | $ | 17.38 | $ | 17.64 | ||||||||||
| Average common shares outstanding - basic |
43,995,749 | 43,947,563 | 43,887,781 | 39,715,516 | 38,373,610 | |||||||||||||||
| Average common shares outstanding - diluted |
44,061,421 | 44,020,765 | 43,935,815 | 39,743,291 | 38,410,393 | |||||||||||||||
| Period end common shares outstanding |
44,031,335 | 43,953,051 | 43,931,715 | 43,860,883 | 38,411,343 | |||||||||||||||
| Full time equivalent employees |
1,959 | 1,934 | 1,928 | 1,936 | 1,650 | |||||||||||||||
| (1) | See non-GAAP financial measures for additional information relating to the calculation of this item. |
Page 10
WESBANCO, INC.
Consolidated Selected Financial Highlights
(unaudited, dollars in thousands)
| Quarter Ended | ||||||||||||||||||||
| Asset quality data |
June 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sept. 30, 2016 |
June 30, 2016 |
|||||||||||||||
| Non-performing assets: |
||||||||||||||||||||
| Troubled debt restructurings - accruing |
$ | 6,841 | $ | 7,194 | $ | 7,646 | $ | 8,605 | $ | 8,979 | ||||||||||
| Non-accrual loans: |
||||||||||||||||||||
| Troubled debt restructurings |
3,158 | 3,273 | 3,546 | 3,759 | 4,121 | |||||||||||||||
| Other non-accrual loans |
33,077 | 36,054 | 28,238 | 26,897 | 28,334 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-accrual loans |
36,235 | 39,327 | 31,784 | 30,656 | 32,455 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-performing loans |
43,076 | 46,521 | 39,430 | 39,261 | 41,434 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Other real estate and repossessed assets |
6,723 | 8,033 | 8,346 | 9,794 | 4,481 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total non-performing assets |
$ | 49,799 | $ | 54,554 | $ | 47,776 | $ | 49,055 | $ | 45,915 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Past due loans (1): |
||||||||||||||||||||
| Loans past due 30-89 days |
$ | 16,605 | $ | 11,426 | $ | 16,029 | $ | 17,569 | $ | 10,392 | ||||||||||
| Loans past due 90 days or more |
4,210 | 2,766 | 3,739 | 2,392 | 2,263 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total past due loans |
$ | 20,815 | $ | 14,192 | $ | 19,768 | $ | 19,961 | $ | 12,655 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Criticized and classified loans (2): |
||||||||||||||||||||
| Criticized loans |
$ | 39,234 | $ | 36,900 | $ | 24,778 | $ | 35,468 | $ | 26,543 | ||||||||||
| Classified loans |
40,468 | 48,112 | 49,965 | 52,909 | 52,789 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total criticized and classified loans |
$ | 79,702 | $ | 85,012 | $ | 74,743 | $ | 88,377 | $ | 79,332 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Loans past due 30-89 days / total portfolio loans |
0.26 | % | 0.18 | % | 0.26 | % | 0.28 | % | 0.20 | % | ||||||||||
| Loans past due 90 days or more / total portfolio loans |
0.07 | 0.04 | 0.06 | 0.04 | 0.04 | |||||||||||||||
| Non-performing loans / total portfolio loans |
0.67 | 0.74 | 0.63 | 0.63 | 0.80 | |||||||||||||||
| Non-performing assets/total portfolio loans, other real estate and repossessed assets |
0.78 | 0.86 | 0.76 | 0.79 | 0.89 | |||||||||||||||
| Non-performing assets / total assets |
0.50 | 0.56 | 0.49 | 0.50 | 0.55 | |||||||||||||||
| Criticized and classified loans / total portfolio loans |
1.25 | 1.35 | 1.20 | 1.42 | 1.53 | |||||||||||||||
| Allowance for loan losses |
||||||||||||||||||||
| Allowance for loan losses |
$ | 44,909 | $ | 44,061 | $ | 43,674 | $ | 42,755 | $ | 43,328 | ||||||||||
| Provision for credit losses |
2,383 | 2,711 | 2,128 | 2,214 | 1,811 | |||||||||||||||
| Net loan and deposit account overdraft charge-offs |
1,486 | 2,347 | 1,213 | 2,798 | 1,013 | |||||||||||||||
| Annualized net loan charge-offs /average loans |
0.09 | % | 0.15 | % | 0.08 | % | 0.20 | % | 0.08 | % | ||||||||||
| Allowance for loan losses / total portfolio loans |
0.70 | % | 0.70 | % | 0.70 | % | 0.69 | % | 0.84 | % | ||||||||||
| Allowance for loan losses / non-performing loans |
1.04 | x | 0.95 | x | 1.11 | x | 1.09 | x | 1.05 | x | ||||||||||
| Allowance for loan losses / non-performing loans and loans past due |
0.70 | x | 0.73 | x | 0.74 | x | 0.72 | x | 0.80 | x | ||||||||||
| Quarter Ended | ||||||||||||||||||||
| June 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sept. 30, 2016 |
June 30, 2016 |
||||||||||||||||
| Capital ratios |
||||||||||||||||||||
| Tier I leverage capital |
10.09 | % | 9.97 | % | 9.81 | % | 10.90 | % | 9.71 | % | ||||||||||
| Tier I risk-based capital |
13.36 | 13.21 | 13.16 | 12.95 | 13.62 | |||||||||||||||
| Total risk-based capital |
14.38 | 14.22 | 14.18 | 13.95 | 14.40 | |||||||||||||||
| Common equity tier 1 capital ratio (CET 1) |
11.44 | 11.28 | 11.28 | 11.07 | 11.88 | |||||||||||||||
| Average shareholders’ equity to average assets |
14.01 | 13.88 | 13.82 | 13.91 | 13.60 | |||||||||||||||
| Tangible equity to tangible assets (3) |
8.53 | 8.40 | 8.20 | 8.26 | 8.56 | |||||||||||||||
| (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. |
Page 11
NON-GAAP FINANCIAL MEASURES
The following non-GAAP financial measures used by WesBanco provide information useful to investors in understanding WesBanco’s operating performance and trends, and facilitate comparisons with the performance of WesBanco’s peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in WesBanco’s financial statements.
| Three Months Ended | Year to Date | |||||||||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | |||||||||||||||||||||||
| (unaudited, dollars in thousands, except shares and per share amounts) |
2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||||
| Return on average tangible equity: |
||||||||||||||||||||||||||||
| Net income (annualized) |
$ | 105,653 | $ | 104,982 | $ | 96,344 | $ | 69,361 | $ | 88,922 | $ | 105,322 | $ | 90,458 | ||||||||||||||
| Plus: amortization of intangibles (annualized) (1) |
3,233 | 3,356 | 3,451 | 2,164 | 1,822 | 3,294 | 1,865 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income before amortization of intangibles (annualized) |
108,886 | 108,338 | 99,795 | 71,525 | 90,744 | 108,616 | 92,323 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average total shareholders’ equity |
1,377,266 | 1,357,602 | 1,352,813 | 1,214,813 | 1,156,923 | 1,367,489 | 1,148,219 | |||||||||||||||||||||
| Less: average goodwill and other intangibles, net of def. tax liability |
(585,057 | ) | (585,365 | ) | (585,529 | ) | (500,752 | ) | (487,085 | ) | (585,210 | ) | (487,148 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average tangible equity |
$ | 792,209 | $ | 772,237 | $ | 767,284 | $ | 714,061 | $ | 669,838 | $ | 782,279 | $ | 661,071 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Return on average tangible equity |
13.74 | % | 14.03 | % | 13.01 | % | 10.02 | % | 13.55 | % | 13.88 | % | 13.97 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Return on average tangible equity, excluding after-tax merger-related expenses: |
||||||||||||||||||||||||||||
| Net income (annualized) |
$ | 105,653 | $ | 104,982 | $ | 96,346 | $ | 69,361 | $ | 88,922 | $ | 105,322 | $ | 90,458 | ||||||||||||||
| Plus: after-tax merger-related expenses (annualized) (1) |
— | 1,294 | 6,940 | 25,556 | 1,814 | 643 | 907 | |||||||||||||||||||||
| Plus: amortization of intangibles (annualized) (1) |
3,233 | 3,356 | 3,451 | 2,164 | 1,822 | 3,294 | 1,865 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income before amortization of intangibles and excluding after-tax merger-related expenses (annualized) |
108,886 | 109,632 | 106,737 | 97,081 | 92,558 | 109,259 | 93,230 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average total shareholders’ equity |
1,377,266 | 1,357,602 | 1,352,813 | 1,214,813 | 1,156,923 | 1,367,489 | 1,148,219 | |||||||||||||||||||||
| Less: average goodwill and other intangibles, net of def. tax liability |
(585,057 | ) | (585,365 | ) | (585,529 | ) | (500,752 | ) | (487,085 | ) | (585,210 | ) | (487,148 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average tangible equity |
$ | 792,209 | $ | 772,237 | $ | 767,284 | $ | 714,061 | $ | 669,838 | $ | 782,279 | $ | 661,071 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Return on average tangible equity, excluding after-tax merger-related expenses |
13.74 | % | 14.20 | % | 13.91 | % | 13.60 | % | 13.82 | % | 13.97 | % | 14.10 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Efficiency ratio: |
||||||||||||||||||||||||||||
| Non-interest expense |
$ | 55,884 | $ | 54,384 | $ | 58,298 | $ | 57,601 | $ | 47,360 | $ | 110,268 | $ | 92,703 | ||||||||||||||
| Less: restructuring and merger-related expense |
— | (491 | ) | (2,684 | ) | (9,883 | ) | (694 | ) | (491 | ) | (694 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Non-interest expense excluding restructuring and merger-related expense |
55,884 | 53,893 | 55,614 | 47,718 | 46,666 | 109,777 | 92,009 | |||||||||||||||||||||
| Net interest income on a fully taxable equivalent basis |
74,758 | 73,353 | 74,256 | 64,481 | 62,219 | 148,111 | 124,494 | |||||||||||||||||||||
| Non-interest income |
22,122 | 22,884 | 21,420 | 21,017 | 19,591 | 45,006 | 38,984 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net interest income on a fully taxable equivalent basis plus non-interest income |
$ | 96,880 | $ | 96,237 | $ | 95,676 | $ | 85,498 | $ | 81,810 | $ | 193,117 | $ | 163,478 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Efficiency Ratio |
57.68 | % | 56.00 | % | 58.13 | % | 55.81 | % | 57.04 | % | 56.84 | % | 56.28 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Income, excluding after-tax merger-related expenses: |
||||||||||||||||||||||||||||
| Net income |
$ | 26,341 | $ | 25,886 | $ | 24,218 | $ | 17,435 | $ | 22,109 | $ | 52,228 | $ | 44,982 | ||||||||||||||
| Add: After-tax merger-related expenses (1) |
— | 319 | 1,745 | 6,424 | 451 | 319 | 451 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income, excluding after-tax merger-related expenses |
$ | 26,341 | $ | 26,205 | $ | 25,963 | $ | 23,859 | $ | 22,560 | $ | 52,547 | $ | 45,433 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Income, excluding after-tax merger-related expenses per diluted share: |
||||||||||||||||||||||||||||
| Net income per diluted share |
$ | 0.60 | $ | 0.59 | $ | 0.55 | $ | 0.44 | $ | 0.58 | $ | 1.19 | $ | 1.17 | ||||||||||||||
| Add: After-tax merger-related expenses per diluted share (1) |
— | 0.01 | 0.04 | 0.16 | 0.01 | — | 0.01 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income, excluding after-tax merger-related expenses per diluted share |
$ | 0.60 | $ | 0.60 | $ | 0.59 | $ | 0.60 | $ | 0.59 | $ | 1.19 | $ | 1.18 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Period End | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Tangible book value per share: |
||||||||||||||||||||
| Total shareholders’ equity |
$ | 1,377,537 | $ | 1,359,153 | $ | 1,341,408 | $ | 1,347,151 | $ | 1,164,420 | ||||||||||
| Less: goodwill and other intangible assets, net of def. tax liability |
(585,195 | ) | (585,123 | ) | (586,403 | ) | (584,690 | ) | (486,913 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible equity |
792,342 | 774,030 | 755,005 | 762,461 | 677,507 | |||||||||||||||
| Common shares outstanding |
44,031,335 | 43,953,051 | 43,931,715 | 43,860,883 | 38,411,343 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible book value per share |
$ | 17.99 | $ | 17.61 | $ | 17.19 | $ | 17.38 | $ | 17.64 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible equity to tangible assets: |
||||||||||||||||||||
| Total shareholders’ equity |
$ | 1,377,537 | $ | 1,359,153 | $ | 1,341,408 | $ | 1,347,151 | $ | 1,164,420 | ||||||||||
| Less: goodwill and other intangible assets, net of def. tax liability |
(585,195 | ) | (585,123 | ) | (586,403 | ) | (584,690 | ) | (486,913 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible equity |
792,342 | 774,030 | 755,005 | 762,461 | 677,507 | |||||||||||||||
| Total assets |
9,874,010 | 9,800,881 | 9,790,877 | 9,812,384 | 8,397,424 | |||||||||||||||
| Less: goodwill and other intangible assets, net of def. tax liability |
(585,195 | ) | (585,123 | ) | (586,403 | ) | (584,690 | ) | (486,913 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible assets |
$ | 9,288,815 | $ | 9,215,758 | $ | 9,204,474 | $ | 9,227,694 | $ | 7,910,511 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible equity to tangible assets |
8.53 | % | 8.40 | % | 8.20 | % | 8.26 | % | 8.56 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Tax effected at 35%. |
Page 12