WesBanco Inc.

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Press Release $WSBC WesBanco Inc.

0 COMMENTs 23 Jul
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WesBanco Announces Record Second Quarter Earnings

WHEELING, W.Va., July 23, 2014 /PRNewswire/ -- Todd F. Clossin, President and Chief Executive Officer of WesBanco, Inc. (NASDAQ Global Market: WSBC), a Wheeling, West Virginia based multi-state bank holding company, today announced an increase in net income and related earnings per share for the three and six months ended June 30, 2014.

Net income for the three months ended June 30, 2014 was a record at $18.9 million, compared to $16.4 million for the first quarter of 2014, representing an increase of 14.9%, while diluted earnings per share were $0.64, compared to $0.56 per share for the first quarter of 2014, representing an increase of 14.3%.  As compared to the second quarter of 2013, net income increased 10.9% and diluted earnings per share increased by 10.3%.  For the six month period ended June 30, 2014, net income totaled $35.3 million compared to $33.0 million for the first half of last year, representing an increase of 6.8%, while diluted earnings per share totaled $1.20 as compared to $1.13 for 2013, representing an increase of 6.2%.  The increase in net income improved the return on average assets to 1.15% from 1.10% in the first six months of last year.  Return on assets and return on tangible equity for WesBanco remain well above first quarter 2014 peer group averages, the most recent available.

Mr. Clossin commented, "The second quarter was impressive and we are very pleased with the results.  Loan growth improved in the second quarter after a challenging first quarter for much of the economy.  Earning assets increased and, when combined with a steady reduction in the cost of funds, resulted in further increases in net interest income. Trust fees and securities brokerage revenue also grew at a strong rate again this quarter.  Improvement in credit quality continues, reducing charge offs and the credit provision.  Expenses continue to be well managed as we stay disciplined and continue our focus on gaining efficiencies from our infrastructure investments. The management at WesBanco is a team that, while recognizing the successes of this quarter, is prepared to further improve the organization going forward."

Financial Condition

Total assets at June 30, 2014 increased 3.2% or $193.0 million from June 30, 2013, primarily due to loan growth.  Portfolio loans increased $144.7 million or 3.8% over the last year and 1.5% in the second quarter of 2014 compared to the first quarter of this year.  Loan growth was achieved through $1.4 billion in loan originations over the last twelve months. Although somewhat depressed in the first quarter due to the challenging weather and economy, loan originations increased 28.4% in the second quarter compared to the first quarter.  Loan growth was driven by increased business activity in markets impacted by Marcellus and Utica shale gas drilling, additional lending personnel, focused marketing efforts, an expanded presence in our larger urban markets, and continued improvement in loan origination processes.  Loan growth was funded primarily by growth in deposits.  Deposits increased $178.6 million or 3.6% from June 30, 2013, with approximately $260 million of deposits for Marcellus and Utica shale gas payments made over the last twelve months significantly contributing to the increase.  All deposit types increased except certificates of deposit, which decreased $150.6 million due to lower rate offerings for maturing CDs.  However, deposits decreased 1.9% in the second quarter compared to March 31, 2014 due to reduced demand deposits and CDs.  Available deposit funding was also used to reduce higher cost borrowings by 10.6% over the last twelve months, further reducing the cost of funds.  Total assets at June 30, 2014 increased 2.2% compared to 2013 year-end, due to growth in both loans and securities balances.

WesBanco continues to maintain strong regulatory capital ratios.  At June 30, 2014, tier I leverage was 9.64%, tier I risk-based capital was 13.46%, and total risk-based capital was 14.56%, which all improved from June 30, 2013.  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 fully-implemented BASEL III capital standards.  Total tangible equity to tangible assets (non-GAAP measure) was 7.74% at June 30, 2014, up from 7.07% at June 30, 2013.  Strong earnings and improved total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.22 per share, seven times over the last four years, cumulatively representing a 57% increase.  The most recent increase was $0.02 per share in the first quarter of 2014.

Credit Quality

Total non-performing loans, including TDRs, at June 30, 2014 were $49.6 million or 1.26% of total loans, which represents a 2.5% decrease from March 31, 2014 and a 20.4% decrease from $62.3 million or 1.64% of total loans at June 30, 2013.  Criticized and classified loans decreased 6.0% in the second quarter of 2014 compared to March 31, 2014 to $121.5 million, or 3.08% of total loans at June 30, 2014.  This represents a decrease of 23.6% over the last twelve months from $159.1 million or 4.18% of total loans last year.

Net charge-offs for the second quarter of 2014 were $0.6 million or 0.06% of average portfolio loans, compared to $4.1 million or 0.43% for the first quarter of 2014 and $2.4 million or 0.26% for the second quarter of 2013.  Year-to-date, net charge-offs were $4.7 million or 0.25% of average portfolio loans compared to $5.5 million or 0.30% in the same period of 2013. Second quarter 2014 net charge-offs benefitted from higher than normal commercial recoveries on loans charged off in prior periods.  Gross charge-offs for the second quarter of 2014 were $1.9 million or 0.20% of average portfolio loans compared to $4.7 million or 0.50% for the prior quarter and $3.3 million or 0.36% for the same quarter last year.

Lower charge-offs and continued improvement in delinquent, non-performing and classified and criticized loans resulted in the provision for credit losses decreasing to $0.8 million for the second quarter of 2014 compared to $2.2 million for the first quarter of 2014, and $1.0 million in the second quarter of 2013.  For the first half of 2014 the provision was $3.0 million compared to $3.1 million in the same period of 2013. The allowance for loan losses represented 1.16% of total portfolio loans at June 30, 2014, compared to 1.17% at March 31, 2014 and 1.33% at the end of the 2013 second quarter.

Net Interest Income

Net interest income increased $2.3 million or 5.0% in the second quarter of 2014 compared to the second quarter of 2013, due to a 2.8% increase in average earning assets through increased average loan balances and $0.5 million of other interest income related to a refund of federal income taxes.  Year-to-date net interest income increased $3.5 million or 3.8% from last year.  The net interest margin improved by 8 basis points to 3.64% in the second quarter of 2014 compared to 3.56% in the same quarter of 2013, while for the first six months the margin was 3.63% compared to 3.60% in 2013. The interest on the tax refund contributed 3 basis points to the margin in the second quarter and 1 basis point in the year-to-date margin in 2014. Accretion of various purchase accounting adjustments from a 2012 acquisition benefited the net interest margin throughout 2013 and the first half of 2014, but at a decreasing rate. Excluding this benefit from both years, the net interest margin increased by 13 basis points from the second quarter of 2013, from 3.48% to 3.61% and 10 basis points from the first six months of 2013, from 3.49% to 3.59%.  The improved net interest margin in the current low interest rate environment resulted partially from the aforementioned loan growth, as the average rate on loans is higher than the average rate on securities.   In addition, funding costs continued to decrease in the first six months of 2014 as a result of a 33.2% reduction in higher-rate average FHLB and other borrowings, primarily through maturities, and a 9.8% increase in lower-cost demand, money market and savings account deposits, while higher-cost CDs decreased by 9.2%.  Overall average deposits increased by 3.6% year-to-date in 2014 compared to the same period in 2013. 

Non-Interest Income and Non-Interest Expense

For the second quarter of 2014, non-interest income increased $0.5 million or 2.9% compared to the second quarter of 2013.  The increase was due, in part, to a $1.0 million bank-owned life insurance death benefit in the current quarter.  In addition, trust fees increased 8.0% as assets under management continued to increase from customer development initiatives and overall market improvements.  Total trust assets were $3.8 billion at June 30, 2014, representing an increase of 11.7% from $3.4 billion at June 30, 2013.  Net securities brokerage revenues increased 22.1%, due to significant production increases from existing markets, the 2013 deployment of an advisor team in the Pittsburgh market, the addition of support and producing staff in several regions, as well as an increase in referrals and production from a licensed retail banker program.  Service charges on deposits decreased 8.6% compared to the second quarter of 2013, due to lower overdraft fees that are affected by lower seasonal usage patterns, consistent increases in deposit levels and higher average deposits per account.  Mortgage loan sale gains decreased 32.2% as increasing interest rates reduced refinancings resulting in lower mortgage activity, which was also impacted by the recently-adopted Qualified Mortgage and Ability-to-Repay rules, which have somewhat limited the Bank's product offerings.  Net security gains decreased by $0.5 million.  For the first half of 2014, non-interest income increased 0.2% from trends similar to the second quarter; however there was also a $1.1 million bank-owned life insurance death benefit in the first quarter of last year.

Non-interest expense increased $0.8 million or 2.0% for the second quarter compared to the second quarter of 2013.  Salaries and wages increased 7.2%, due to routine annual adjustments to compensation, increased commissions on higher brokerage revenue and incentive and stock-related compensation granted during the quarter.  Employee benefits expense decreased 4.9%, primarily from decreased pension expense.  Other expense decreased 1.1% primarily due to reduced communications expense.  For the first half of 2014, non-interest expense increased $0.2 million or 0.2% compared to the same period in 2013.  Excluding 2013 merger-related expenses of $1.2 million incurred primarily in the first quarter of 2013, total non-interest expense would have increased $1.4 million or 1.7% for the first six months.  Salaries and wages increased 5.6% and employee benefits decreased 7.6% in the year-to-date period.  In addition, net occupancy and equipment expense increased due to higher weather-related expenses, the opening of two branches near the end of 2013, and investment in internal infrastructure in the second half of last year. Other expense decreased 1.2% primarily due to lower communication and other real estate owned expenses.  However, despite the overall increase in non-interest expense, the efficiency ratio improved to 59.7% for the year-to-date period from 60.4% in 2013.

Financial Results Conference Call

WesBanco, Inc. will host a conference call to discuss the Company's financial results for the second quarter of 2014 on Thursday, July 24, 2014 at 11:00 a.m. E.D.T.  Callers wishing to participate should access the call by dialing 1-877-870-4263 or 1-412-317-0790 for international callers.  The call may also be listened to live via Webcast through the "Investor Relations" section of the Company's Web site or by registering at http://www.videonewswire.com/event.asp?id=99933. 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 $6.3 billion, operating through 119 branch locations and 106 ATMs in West Virginia, Ohio, and Pennsylvania.  WesBanco's banking subsidiary is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia.  WesBanco also operates an insurance brokerage company, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

Website: www.wesbanco.com

Forward-looking Statements:

Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2013 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q for the quarter ended March 31, 2014, which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com.  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A.  Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

 

 

WESBANCO, INC.












Consolidated Selected Financial Highlights









Page 4

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
























For the Three Months Ended


For the Six Months Ended

STATEMENT OF INCOME

June 30,


June 30,

Interest and dividend income

2014


2013


% Change


2014


2013


% Change


Loans, including fees

$             42,546


$           43,753


(2.76%)


$         85,291


$           88,029


(3.11%)


Interest and dividends on securities:














Taxable 

7,452


7,357


1.29%


14,676


14,790


(0.77%)



Tax-exempt

3,435


3,264


5.24%


6,821


6,392


6.71%




Total interest and dividends on securities

10,887


10,621


2.50%


21,497


21,182


1.49%


Other interest income 

611


50


1122.00%


713


106


572.64%

          Total interest and dividend income

54,044


54,424


(0.70%)


107,501


109,317


(1.66%)

Interest expense













Interest bearing demand deposits

395


365


8.22%


768


666


15.32%


Money market deposits

466


338


37.87%


907


677


33.97%


Savings deposits

133


127


4.72%


263


268


(1.87%)


Certificates of deposit

3,422


5,881


(41.81%)


7,052


12,029


(41.38%)




Total interest expense on deposits

4,416


6,711


(34.20%)


8,990


13,640


(34.09%)


Federal Home Loan Bank borrowings

175


289


(39.45%)


386


609


(36.62%)


Other short-term borrowings

350


627


(44.18%)


907


1,249


(27.38%)


Junior subordinated debt owed to unconsolidated subsidiary trusts

796


808


(1.49%)


1,587


1,701


(6.70%)




Total interest expense

5,737


8,435


(31.99%)


11,870


17,199


(30.98%)

Net interest income 

48,307


45,989


5.04%


95,631


92,118


3.81%


Provision for credit losses

849


1,021


(16.85%)


3,048


3,123


(2.40%)

Net interest income after provision for credit losses

47,458


44,968


5.54%


92,583


88,995


4.03%

Non-interest income













Trust fees

5,210


4,823


8.02%


10,858


9,840


10.35%


Service charges on deposits

4,078


4,462


(8.61%)


7,937


8,659


(8.34%)


Electronic banking fees

3,267


3,195


2.25%


6,281


6,062


3.61%


Net securities brokerage revenue

2,003


1,641


22.06%


3,832


3,138


22.12%


Bank-owned life insurance

1,821


880


106.93%


2,695


2,829


(4.74%)


Net gains on sales of mortgage loans

475


701


(32.24%)


628


1,413


(55.56%)


Net securities gains

165


686


(75.95%)


175


702


(75.07%)


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

(165)


101


(263.37%)


(52)


55


(194.55%)


Other income

1,387


1,235


12.31%


2,936


2,522


16.42%




Total non-interest income

18,241


17,724


2.92%


35,290


35,220


0.20%

Non-interest expense













Salaries and wages

16,904


15,772


7.18%


33,370


31,599


5.60%


Employee benefits

5,529


5,813


(4.89%)


11,238


12,158


(7.57%)


Net occupancy

2,857


2,830


0.95%


6,348


6,022


5.41%


Equipment 

2,914


2,802


4.00%


5,698


5,209


9.39%


Marketing

1,713


1,624


5.48%


2,716


2,429


11.82%


FDIC insurance 

880


919


(4.24%)


1,757


1,890


(7.04%)


Amortization of intangible assets

482


561


(14.08%)


977


1,186


(17.62%)


Restructuring and merger-related expense

-


51


(100.00%)


-


1,229


(100.00%)


Other operating expenses  

9,025


9,127


(1.12%)


18,294


18,524


(1.24%)




Total non-interest expense

40,304


39,499


2.04%


80,398


80,246


0.19%

Income before provision for income taxes

25,395


23,193


9.49%


47,475


43,969


7.97%


Provision for income taxes 

6,520


6,176


5.57%


12,179


10,932


11.41%

Net Income

$             18,875


$           17,017


10.92%


$         35,296


$           33,037


6.84%
















Taxable equivalent net interest income

$            50,157


$         47,747


5.05%


$         99,304


$         95,560


3.92%
















Per common share data












Net income per common share - basic

$                 0.65


$               0.58


12.07%


$              1.21


$               1.13


7.08%

Net income per common share - diluted

$                 0.64


$               0.58


10.34%


$              1.20


$               1.13


6.19%

Dividends declared

$                 0.22


$               0.19


15.79%


$              0.44


$               0.38


15.79%

Book value (period end)







$            26.59


$             24.80


7.22%

Tangible book value (period end) (1)







$            15.75


$             13.91


13.23%

Average common shares outstanding - basic

29,242,180


29,245,201


(0.01%)


29,212,347


29,228,355


(0.05%)

Average common shares outstanding - diluted

29,321,927


29,308,806


0.04%


29,293,424


29,288,018


0.02%

Period end common shares outstanding

29,278,925


29,282,412


(0.01%)


29,278,925


29,282,412


(0.01%)
















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
























 

 

WESBANCO, INC.













Page 5

Consolidated Selected Financial Highlights









(unaudited, dollars in thousands)


























Selected ratios























For the Six Months Ended








June 30,









2014


2013


% Change
























Return on average assets





1.15

%

1.10

%

4.55

%






Return on average equity





9.29


9.16


1.42







Return on average tangible equity (1)




16.17


16.72


(3.29)







Yield on earning assets (2) 





4.07


4.25


(4.24)







Cost of interest bearing liabilities




0.54


0.79


(31.65)







Net interest spread (2)





3.53


3.46


2.02







Net interest margin (2)





3.63


3.60


0.83







Efficiency (1) (2)






59.73


60.42


(1.14)







Average loans to average deposits




75.46


74.57


1.19







Annualized net loan charge-offs/average loans




0.25


0.30


(16.67)







Effective income tax rate 





25.65


24.86


3.18

















































































For the Quarter Ended









June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,









2014


2014


2013


2013


2013




















Return on average assets





1.22

%

1.08

%

0.99

%

1.01

%

1.12

%


Return on average equity





9.79


8.78


8.17


8.40


9.33



Return on average tangible equity (1)




16.90


15.40


14.60


15.20


16.88



Yield on earning assets (2) 





4.06


4.08


4.09


4.13


4.20



Cost of interest bearing liabilities




0.52


0.56


0.63


0.73


0.77



Net interest spread (2)





3.54


3.52


3.46


3.40


3.43



Net interest margin (2)





3.64


3.63


3.58


3.52


3.56



Efficiency (1) (2) 






58.93


60.57


61.66


61.45


60.25



Average loans to average deposits




75.40


75.52


75.79


76.16


75.27



Annualized net loan charge-offs/average loans




0.06


0.43


0.30


0.60


0.26



Effective income tax rate 





25.67


25.63


24.37


23.92


26.63



Trust assets, market value at period end




$     3,844,116


$        3,752,142


$        3,688,734


$        3,501,873


$        3,440,666




















(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


June 30,




December 31,

December 31, 2013


Assets



2014


2013


% Change


2013

to June 30, 2014


Cash and due from banks


$          81,790


$          69,645


17.44

%

$                80,001

2.24

%

Due from banks - interest bearing


12,698


8,425


50.72


15,550

(18.34)


Securities:













Available-for-sale, at fair value


1,006,079


971,178


3.59


934,386

7.67



Held-to-maturity (fair values of $628,540; $615,204 and $596,308, respectively)


607,695


608,761


(0.18)


598,520

1.53




Total securities


1,613,774


1,579,939


2.14


1,532,906

5.28


Loans held for sale


10,641


14,517


(26.70)


5,855

81.74


Portfolio loans:












Commercial real estate


1,940,872


1,881,083


3.18


1,912,919

1.46



Commercial and industrial


578,665


542,071


6.75


556,249

4.03



Residential real estate 


898,357


831,362


8.06


890,804

0.85



Home equity


295,127


280,368


5.26


284,687

3.67



Consumer 


233,097


266,498


(12.53)


250,258

(6.86)


Total portfolio loans, net of unearned income


3,946,118


3,801,382


3.81


3,894,917

1.31


Allowance for loan losses


(45,741)


(50,381)


9.21


(47,368)

3.43




Net portfolio loans


3,900,377


3,751,001


3.98


3,847,549

1.37


Premises and equipment, net


92,106


91,894


0.23


93,157

(1.13)


Accrued interest receivable


19,087


19,248


(0.84)


18,960

0.67


Goodwill and other intangible assets, net


320,449


322,478


(0.63)


321,426

(0.30)


Bank-owned life insurance


121,878


119,546


1.95


121,390

0.40


Other assets


104,220


107,318


(2.89)


107,979

(3.48)


Total Assets


$    6,277,020


$   6,084,011


3.17

%

$         6,144,773

2.15

%















Liabilities











Deposits:













Non-interest bearing demand


$      1,021,414


$        901,559


13.29

%

$              960,814

6.31

%


Interest bearing demand


871,487


840,263


3.72


857,761

1.60



Money market


969,518


845,294


14.70


942,768

2.84



Savings deposits


829,155


775,248


6.95


789,709

5.00



Certificates of deposit


1,425,829


1,576,391


(9.55)


1,511,478

(5.67)




Total deposits


5,117,403


4,938,755


3.62


5,062,530

1.08


Federal Home Loan Bank borrowings


138,596


60,344


129.68


39,508

250.80


Other short-term borrowings


94,745


200,538


(52.75)


150,536

(37.06)


Junior subordinated debt owed to unconsolidated subsidiary trusts


106,156


106,118


0.04


106,137

0.02




Total borrowings


339,497


367,000


(7.49)


296,181

14.62


Accrued interest payable


2,306


3,516


(34.41)


2,354

(2.04)


Other liabilities


39,189


48,508


(19.21)


37,113

5.59


Total Liabilities


5,498,395


5,357,779


2.62


5,398,178

1.86
















Shareholders' Equity











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












none outstanding


-


-


-


-

-


Common stock, $2.0833 par value; 50,000,000 shares authorized;












29,367,511 shares; 29,282,412 shares and 29,367,511 shares issued, respectively; 












29,278,925 shares; 29,282,412 shares and 29,175,236 shares outstanding, respectively


61,182


61,005


0.29


61,182

-


Capital surplus


244,029


242,640


0.57


244,974

(0.39)


Retained earnings


482,786


441,168


9.43


460,351

4.87


Treasury stock (88,586; 0 and 192,275 shares - at cost, 












respectively)


(2,748)


-


(100.00)


(5,969)

53.96


Accumulated other comprehensive loss


(5,393)


(17,329)


68.88


(12,734)

57.65


Deferred benefits for directors


(1,231)


(1,252)


1.68


(1,209)

(1.82)


Total Shareholders' Equity


778,625


726,232


7.21


746,595

4.29


Total Liabilities and Shareholders' Equity


$    6,277,020


$   6,084,011


3.17

%

$         6,144,773

2.15

%















 

WESBANCO, INC.






Consolidated Selected Financial Highlights





Page 7

(unaudited, dollars in thousands, except shares)






Balance sheets


June 30,


March 31,


Assets




2014


2014

% Change

Cash and due from banks


$          81,790


$        143,315

(42.93%)

Due from banks - interest bearing


12,698


31,881

(60.17%)

Securities:








Available-for-sale, at fair value


1,006,079


959,775

4.82%


Held-to-maturity (fair values of $628,540 and 607,886, respectively)


607,695


597,624

1.69%



Total securities


1,613,774


1,557,399

3.62%

Loans held for sale


10,641


6,300

68.90%

Portfolio Loans:







Commercial real estate


1,940,872


1,915,578

1.32%


Commercial and industrial


578,665


560,511

3.24%


Residential real estate 


898,357


888,666

1.09%


Home equity


295,127


284,879

3.60%


Consumer 


233,097


237,468

(1.84%)

Total portfolio loans, net of unearned income


3,946,118


3,887,102

1.52%

Allowance for loan losses


(45,741)


(45,483)

0.57%



Net portfolio loans


3,900,377


3,841,619

1.53%

Premises and equipment, net


92,106


92,814

(0.76%)

Accrued interest receivable


19,087


20,149

(5.27%)

Goodwill and other intangible assets, net


320,449


320,931

(0.15%)

Bank-owned life insurance


121,878


122,265

(0.32%)

Other assets



104,220


100,904

3.29%

Total Assets


$    6,277,020


$   6,237,577

0.63%










Liabilities







Deposits:








Non-interest bearing demand


$      1,021,414


$      1,022,119

(0.07%)


Interest bearing demand


871,487


918,629

(5.13%)


Money market


969,518


980,890

(1.16%)


Savings deposits


829,155


824,276

0.59%


Certificates of deposit


1,425,829


1,469,804

(2.99%)



Total deposits


5,117,403


5,215,718

(1.88%)

Federal Home Loan Bank borrowings


138,596


23,282

495.29%

Other short-term borrowings


94,745


92,737

2.17%

Junior subordinated debt owed to unconsolidated subsidiary trusts


106,156


106,146

0.01%



Total borrowings


339,497


222,165

52.81%

Accrued interest payable


2,306


2,250

2.49%

Other liabilities


39,189


36,327

7.88%

Total liabilities


5,498,395


5,476,460

0.40%










Shareholders' Equity






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







none outstanding


-


-

-

Common stock, $2.0833 par value; 50,000,000 shares authorized;







29,367,511 shares and 29,367,511 shares issued, respectively;







29,278,925 and 29,212,110 shares outstanding, respectively


61,182


61,182

0.00%

Capital surplus


244,029


245,085

(0.43%)

Retained earnings


482,786


470,352

2.64%

Treasury stock ( 88,586 and 155,401 shares - at cost)


(2,748)


(4,822)

43.01%

Accumulated other comprehensive income (loss)


(5,393)


(9,461)

43.00%

Deferred benefits for directors


(1,231)


(1,219)

(0.98%)

Total Shareholders' Equity


778,625


761,117

2.30%

Total Liabilities and Shareholders' Equity


$    6,277,020


$   6,237,577

0.63%










 

WESBANCO, INC.















Consolidated Selected Financial Highlights










Page 8

(unaudited, dollars in thousands)












Average balance sheet and















net interest margin analysis




Three Months Ended June 30,



For the Six Months Ended June 30,







2014

2013


2014

2013






Average 

Average


Average 

Average


Average 

Average


Average 

Average

Assets





Balance

Rate


Balance

Rate


Balance

Rate


Balance

Rate

Due from banks - interest bearing



$            24,134

0.33%


$            22,520

0.41%


$            37,567

0.22%


$            44,450

0.22%

Loans, net of unearned income (1)



3,898,740

4.38%


3,747,533

4.68%


3,886,334

4.43%


3,706,310

4.79%

Securities: (2)
















    Taxable





1,176,963

2.53%


1,201,552

2.45%


1,159,072

2.53%


1,200,634

2.46%

    Tax-exempt (3)





406,718

5.20%


381,416

5.27%


403,275

5.20%


370,033

5.32%

        Total securities





1,583,681

3.22%


1,582,968

3.13%


1,562,347

3.22%


1,570,667

3.14%

Other earning assets (4)




10,853

21.82%


15,197

0.71%


11,209

11.97%


17,855

0.66%

         Total earning assets (3)



5,517,408

4.06%


5,368,218

4.20%


5,497,457

4.07%


5,339,282

4.25%

Other assets





702,230



704,179



705,703



729,240


Total Assets





$     6,219,638



$     6,072,397



$     6,203,160



$     6,068,522


















Liabilities and Shareholders' Equity














Interest bearing demand deposits



$          905,080

0.18%


$          861,676

0.17%


$          896,347

0.17%


$          854,127

0.16%

Money market accounts 




974,731

0.19%


848,635

0.16%


960,153

0.19%


847,201

0.16%

Savings deposits





824,641

0.06%


775,605

0.07%


816,720

0.06%


763,087

0.07%

Certificates of deposit




1,444,224

0.95%


1,602,726

1.47%


1,474,247

0.96%


1,623,775

1.49%

    Total interest bearing deposits



4,148,676

0.43%


4,088,642

0.66%


4,147,467

0.44%


4,088,190

0.67%

Federal Home Loan Bank borrowings



24,926

2.82%


60,559

1.91%


29,949

2.60%


67,958

1.81%

Other borrowings





104,109

1.35%


142,724

1.76%


109,687

1.67%


141,195

1.78%

Junior subordinated debt




106,151

3.01%


106,114

3.05%


106,146

3.02%


109,228

3.14%

      Total interest bearing liabilities 



4,383,862

0.52%


4,398,039

0.77%


4,393,249

0.54%


4,406,571

0.79%

Non-interest bearing demand deposits



1,022,331



890,295



1,002,822



882,231


Other liabilities





40,393



52,128



41,104



52,620


Shareholders' equity





773,052



731,935



765,985



727,100


Total Liabilities and Shareholders' Equity



$     6,219,638



$     6,072,397



$     6,203,160



$     6,068,522


Taxable equivalent net interest spread




3.54%



3.43%



3.53%



3.46%

Taxable equivalent net interest margin 




3.64%



3.56%



3.63%



3.60%

















(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 $0.8 million and $1.0 million for the three months ended June 30, 2014 and 2013, respectively, and $1.7 million


     and $2.0 million for the six months ended June 30, 2014 and 2013, respectively.    Additionally, loan accretion included in interest income on loans acquired


     from a 2012 acquisition was $0.3 and $0.6 million for the three months ended June 30, 2014 and 2013, respectively, and $0.7 million and $1.9 million for the six


     months ended June 30, 2014 and 2013, respectively, while accretion on interest bearing liabilities acquired from a 2012 acquisition was $0.2 and $0.5 million


     for the three months ended June 30, 2014 and 2013, respectively, and $0.4 million and $1.0 million for the six months ended June 30, 2014 and 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.







(4) Interest income on other earning assets includes $0.5 million of interest on a federal income tax refund for the three and six months ended June 30, 2014.


















 

WESBANCO, INC.










Consolidated Selected Financial Highlights






 Page 9 

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






Quarter Ended

Statement of Income

June 30,


Mar. 31, 


Dec. 31,


Sept. 30,


June 30,

Interest income

2014


2014


2013


2013


2013


Loans, including fees

$            42,546


$                42,746


$              43,617


$                43,678


$              43,753


Interest and dividends on securities:












Taxable 

7,452


7,225


7,178


7,226


7,357



Tax-exempt

3,435


3,385


3,380


3,355


3,264




Total interest and dividends on securities

10,887


10,610


10,558


10,581


10,621


Other interest income 

611


101


82


58


50

          Total interest and dividend income

54,044


53,457


54,257


54,317


54,424

Interest expense











Interest bearing demand deposits

395


374


380


369


365


Money market deposits

466


440


440


345


338


Savings deposits

133


130


130


128


127


Certificates of deposit

3,422


3,630


4,383


5,597


5,881




Total interest expense on deposits

4,416


4,574


5,333


6,439


6,711


Federal Home Loan Bank borrowings

175


211


251


291


289


Other short-term borrowings

350


557


625


651


627


Junior subordinated debt owed to unconsolidated subsidiary trusts

796


790


810


805


808




Total interest expense

5,737


6,132


7,019


8,186


8,435

Net interest income 

48,307


47,325


47,238


46,131


45,989


Provision for credit losses

849


2,199


3,144


2,819


1,021

Net interest income after provision for credit losses

47,458


45,126


44,094


43,312


44,968

Non-interest income











Trust fees

5,210


5,648


4,883


4,854


4,823


Service charges on deposits

4,078


3,860


4,616


4,650


4,462


Electronic banking fees

3,267


3,013


3,012


3,124


3,195


Net securities brokerage revenue

2,003


1,829


1,604


1,506


1,641


Bank-owned life insurance

1,821


875


925


911


880


Net gains on sales of mortgage loans

475


154


456


745


701


Net securities gains / (losses)

165


10


(3)


(15)


686


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

(165)


113


(144)


8


101


Other income

1,387


1,547


1,601


1,333


1,235




Total non-interest income

18,241


17,049


16,950


17,116


17,724














Non-interest expense











Salaries and wages

16,904


16,467


17,352


16,480


15,772


Employee benefits

5,529


5,708


5,774


5,323


5,813


Net occupancy

2,857


3,491


2,866


2,921


2,830


Equipment 

2,914


2,783


2,768


2,692


2,802


Marketing

1,713


1,003


1,159


1,585


1,624


FDIC insurance 

880


877


919


916


919


Amortization of intangible assets

482


495


546


556


561


Restructuring and merger-related expense

-


-


45


36


51


Other operating expenses  

9,025


9,271


9,314


9,500


9,127




Total non-interest expense

40,304


40,095


40,743


40,009


39,499

Income before provision for income taxes

25,395


22,080


20,301


20,419


23,193


Provision for income taxes 

6,520


5,659


4,948


4,884


6,176

Net Income

$                        18,875


$                16,421


$              15,353


$                15,535


$              17,017














Taxable equivalent net interest income

$                       50,157


$               49,148


$             49,058


$               47,938


$             47,747














Per common share data










Net income per common share - basic

$                           0.65


$                    0.56


$                  0.52


$                    0.53


$                  0.58

Net income per common share - diluted

$                           0.64


$                    0.56


$                  0.52


$                    0.53


$                  0.58

Dividends declared

$                           0.22


$                    0.22


$                  0.20


$                    0.20


$                  0.19

Book value (period end)

$                         26.59


$                  26.05


$                25.59


$                  25.10


$                24.80

Tangible book value (period end) (1)

$                         15.75


$                  15.17


$                14.68


$                  14.25


$                13.91

Average common shares outstanding - basic

29,242,180


29,182,183


29,300,463


29,325,128


29,245,201

Average common shares outstanding - diluted

29,321,927


29,262,680


29,387,485


29,412,458


29,308,806

Period end common shares outstanding

29,278,925


29,212,110


29,175,236


29,350,061


29,282,412

Full time equivalent employees

1,456


1,442


1,469


1,462


1,478



























(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






June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Asset quality data


2014


2014


2013


2013


2013


Non-performing assets:













Troubled debt restructurings - accruing


$         13,513


$         14,535


$         14,861


$         15,480


$         19,269



Non-accrual loans:














Troubled debt restructurings


6,281


7,406


9,324


12,920


15,655




Other non-accrual loans


29,837


28,967


27,309


25,240


27,414




    Total non-accrual loans


36,118


36,373


36,633


38,160


43,069




    Total non-performing loans 


49,631


50,908


51,494


53,640


62,338



Other real estate and repossessed assets


5,106


5,382


4,860


5,184


5,007




Total non-performing assets


$         54,737


$         56,290


$         56,354


$         58,824


$         67,345
















Past due loans (1):













Loans past due 30-89 days


$         10,138


$         14,650


$         14,831


$         15,611


$         15,792



Loans past due 90 days or more


2,947


1,833


2,591


3,043


3,594




Total past due loans


$         13,085


$         16,483


$         17,422


$         18,654


$         19,386
















Criticized and classified loans (2):













Criticized loans


$         68,707


$         73,925


$         75,249


$         76,442


$         78,457



Classified loans


52,760


55,341


60,335


64,857


80,621




Total criticized and classified loans


$       121,467


$       129,266


$       135,584


$       141,299


$       159,078
















Loans past due 30-89 days / total portfolio loans

0.26

%

0.38

%

0.38

%

0.41

%

0.42

%

Loans past due 90 days or more / total portfolio loans

0.07


0.05


0.07


0.08


0.09


Non-performing loans / total portfolio loans


1.26


1.31


1.32


1.40


1.64


Non-performing assets/total portfolio loans, other












real estate and repossessed assets


1.39


1.45


1.45


1.53


1.77


Non-performing assets / total assets


0.87


0.90


0.92


0.96


1.11


Criticized and classified loans / total portfolio loans

3.08


3.33


3.48


3.68


4.18
















Allowance for loan losses












Allowance for loan losses


$         45,741


$         45,483


$         47,368


$         47,342


$         50,381


Provision for credit losses


849


2,199


3,144


2,819


1,021


Net loan and deposit account overdraft charge-offs

600


4,141


2,887


5,804


2,433
















Annualized net loan charge-offs /average loans

0.06

%

0.43

%

0.30

%

0.60

%

0.26

%

Allowance for loan losses / total portfolio loans

1.16

%

1.17

%

1.22

%

1.23

%

1.33

%

Allowance for loan losses / non-performing loans

0.92

x

0.89

x

0.92

x

0.88

x

0.81

x

Allowance for loan losses / non-performing loans and












loans past due 


0.73

x

0.67

x

0.69

x

0.65

x

0.62

x

































Quarter Ended






June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,






2014


2014


2013


2013


2013


Capital ratios












Tier I leverage capital


9.64

%

9.45

%

9.27

%

9.27

%

9.13

%

Tier I risk-based capital


13.46


13.29


13.06


13.08


12.85


Total risk-based capital


14.56


14.40


14.19


14.23


14.08


Average shareholders' equity to average assets

12.43


12.27


12.06


11.99


12.05


Tangible equity to tangible assets (3)


7.74


7.49


7.35


7.19


7.07






























(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 





June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,


June 30,

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

2014


2014


2013


2013


2013


2014

2013

Return on average tangible equity:














Net income (annualized)


$              75,708


$        66,596


$       60,911


$       61,634


$       68,256


$       71,177

$        66,622


Plus: amortization of intangibles (annualized) (1)

1,256


1,305


1,408


1,434


1,464


1,281

1,555


Net income before amortization of intangibles (annualized)

76,964


67,901


62,319


63,068


69,720


72,458

68,177


















Average total shareholders' equity

773,052


758,841


745,136


733,462


731,935


765,985

727,100


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

(317,679)


(317,996)


(318,333)


(318,661)


(318,971)


(317,836)

(319,337)


Average tangible equity


455,373


440,845


426,803


414,801


412,964


448,149

407,763

















Return on average tangible equity


16.90%


15.40%


14.60%


15.20%


16.88%


16.17%

16.72%

















Efficiency ratio:
















Non-interest expense


$              40,304


$        40,095


$       40,743


$       40,009


$       39,499


$       80,398

$        80,246


Less: restructuring and merger-related expense

-


-


(45)


(36)


(51)


-

(1,229)


Non-interest expense excluding restructuring and merger-related expense

40,304


40,095


40,698


39,973


39,448


80,398

79,017


















Net interest income on a fully taxable equivalent basis

50,157


49,148


49,058


47,938


47,747


99,304

95,560


Non-interest income


18,241


17,049


16,950


17,116


17,724


35,290

35,220


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

68,398


66,197


66,008


65,054


65,471


134,594

130,780


Efficiency Ratio


58.93%


60.57%


61.66%


61.45%


60.25%


59.73%

60.42%





































Period End








June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,








2014


2014


2013


2013


2013




Tangible book value:















Total shareholders' equity


$            778,625


$      761,117


$     746,595


$     736,688


$     726,232





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

(317,527)


(317,840)


(318,161)


(318,516)


(318,828)





Tangible equity


461,098


443,277


428,434


418,172


407,404





















Common shares outstanding


29,278,925


29,212,110


29,175,236


29,350,061


29,282,412




















Tangible book value



$                15.75


$          15.17


$         14.68


$         14.25


$         13.91




















Tangible equity to tangible assets:














Total shareholders' equity


$            778,625


$      761,117


$     746,595


$     736,688


$     726,232





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

(317,527)


(317,840)


(318,161)


(318,516)


(318,828)





Tangible equity


461,098


443,277


428,434


418,172


407,404





















Total assets



6,277,020


6,237,577


6,144,773


6,138,360


6,084,011





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

(317,527)


(317,840)


(318,161)


(318,516)


(318,828)





Tangible assets


5,959,493


5,919,737


5,826,612


5,819,844


5,765,183




















Tangible equity to tangible assets


7.74%


7.49%


7.35%


7.19%


7.07%



















(1)  Tax effected at 35%.

 

 

SOURCE WesBanco, Inc.

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