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WesBanco Announces Results for the Third Quarter and Nine Months of 2009
WHEELING, W.Va., Oct. 21 /PRNewswire-FirstCall/ -- Paul M. Limbert, President and Chief Executive Officer of WesBanco, Inc. (Nasdaq: WSBC), a Wheeling, West Virginia based multi-state bank holding company, today announced earnings for the third quarter and year-to-date periods ended September 30, 2009.
Net income available to common shareholders for the quarter ended September 30, 2009 was $2.3 million while diluted earnings per common share were $0.09, as compared to $11.5 million or $0.43 per common share for the third quarter of 2008, and $4.7 million or $0.18 per share in the prior quarter ended June 30, 2009. Earnings per common share in the third quarter included a charge of $0.09 per common share for the unamortized discount on the repurchase of the Troubled Asset Relief Program ("TARP") preferred stock and an additional $0.03 per share for preferred stock dividends paid in the third quarter. For the nine month period, net income available to common shareholders was $11.4 million or $0.43 per common share, while for the same period in 2008, net income was $32.3 million or $1.22 per common share. Net income before preferred stock dividends and the accounting adjustment for the TARP repayment was $16.6 million year to date.
Highlights for the third quarter and nine months ended September 30, 2009 include the following:
- Net interest income increased 3.0% in the third quarter as compared to the second quarter of 2009 and 6.0% over the first quarter of 2009 as a result of the acquisition of five former AmTrust Bank branches in the Columbus, Ohio metropolitan area on March 27, 2009. WesBanco purchased approximately $600 million of deposits for a total price of $21.1 million and is now operating the acquired branches under the WesBanco Bank name. Also contributing to improved net interest income were lower rates on interest bearing liabilities, particularly for deposits, as a result of decreasing market interest rates, certificate of deposit maturities and WesBanco's focus on improving the net interest margin by reducing higher cost funding sources.
- The provision for credit losses in the third quarter of 2009 increased $9.7 million from the third quarter of 2008. The higher provision expense reflects increased loan charge-offs of $14.0 million. During the quarter WesBanco charged-down two commercial loans by $8.5 million, with $2.0 million of this charge reserved for in the second quarter. One of the charge-offs was caused by a fraudulent equipment leasing scheme which impacted a borrower's equipment leasing activities, and the other loss was on a hotel which was previously identified as impaired. Higher provision expense also reflects the general deterioration of credit quality across all segments of the loan portfolio due to the prolonged recession, which has caused increases in net charge-offs and non-performing assets. The allowance for loan losses increased to 1.74% of total loans at September 30, 2009 as compared to 1.21% at September 30, 2008, and 1.65% at the end of the second quarter.
- On September 9, 2009 WesBanco repurchased from the U.S. Department of the Treasury 75,000 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued under the TARP program, at a purchase price of $75 million plus a final accrued dividend of $250,000. The funds used to redeem the preferred stock were derived from security sales and other internal sources, including a special dividend from the bank paid during the quarter that was previously approved by the bank's regulators. The repurchase of the preferred stock resulted in WesBanco recording a $2.3 million charge in the third quarter representing the unamortized discount on the preferred stock, as well as certain unamortized issuance costs. These charges are reflected on the income statement after net income. WesBanco received approval from regulatory authorities and the U.S. Treasury to redeem the preferred stock. WesBanco's consolidated and bank subsidiary capital ratios continue to be in excess of the "well capitalized" benchmarks for regulatory purposes at September 30, 2009 after repurchase of the preferred stock. WesBanco also issued a warrant to the Treasury Department with the preferred stock in December 2008 and is currently negotiating terms for the repurchase of this warrant.
Mr. Limbert commented, "based on our continued strong capital levels, WesBanco has taken action in the third quarter to repurchase the TARP preferred stock. The full impact of the repurchase of the TARP preferred stock will be recognized beginning in the fourth quarter through the elimination of the charge to earnings per common share. Although the effects of the recession continue to impact the allowance for loan losses, this quarter's results again reflect improvements in net interest income and deposit fee income compared to the previous quarters of 2009 as a result of the acquisition of the former AmTrust branches in March and implementation of successful retail strategies." Mr. Limbert further remarked, "as the equity markets have begun to improve, trust fees have increased from earlier quarter levels. Declines in interest rates have improved our cost of funds, and continued management focus on maintaining a quality investment portfolio has significantly increased the unrealized gain position of the securities available-for-sale portfolio."
Net Interest Income
As compared to the three and nine month periods in 2008, net interest income improved 0.4% in the third quarter of 2009, but slightly decreased 1.6% year to date. Average earning assets increased $483.4 million or 10.6% for the quarter and $416.1 million or 9.1% for the year-to-date period, primarily due to the acquisition of the branches. However, the net interest margin decreased by 35 and 37 basis points in the 2009 third quarter and year-to-date periods, respectively, as compared to the same periods in 2008, primarily due to reinvesting proceeds from the branch deposit acquisition into lower yielding, short duration securities. Also, the continuation of the low interest environment in 2009 has impacted the margin as lower security and loan yields and a reduction of interest income from the increased nonperforming loans have not been fully offset by decreases in deposit and borrowing cost of funds. However, the margin has somewhat benefited from a 5.0% increase in average non-interest bearing deposit balances year to date, the result of marketing campaigns focused on checking account products.
Net interest income for the third quarter increased $1.2 million or 3.0% from the second quarter of 2009, due to the acquisition and a higher net interest margin. The margin increase, totaling 18 basis points resulted from a combination of an increase in the yield in earning assets, reflecting the full benefit of the second quarter investment of the cash received from the branch acquisition, and a 13 basis point decline in the cost of interest bearing liabilities resulting from the lower interest rate environment and re-pricing of higher rate CDs and certain term borrowings. The benefit of the improved rates was partially offset by a 3.3% decline in average earning assets used to fund the previously anticipated third quarter run off of some of AmTrust's former higher rate, single service customer CDs.
Provision for Credit Losses
The provision for credit losses was $16.2 million in the third quarter of 2009, an increase of $9.7 million from the third quarter of 2008. For the year to date period the provision was $36.0 million, as compared to $17.6 million in the same period of 2008. Higher provision expense for the third quarter reflects a $3.8 million charge-off on a loan secured by a hotel, which has been transferred to other real estate owned. Also in the third quarter, an impairment of $4.7 million was determined on a commercial loan to an equipment leasing company, of which $3.6 million was charged off. The charged-off portion of this loss was incurred mostly as a result of fraudulent activities by a major customer of the Bank's borrower. Higher provision expense also reflects the general deterioration of credit quality across all segments of the loan portfolio due to the prolonged recession.
Net charge-offs for the third quarter of 2009 increased $7.9 million compared to the second quarter of 2009 and $9.1 million compared to the third quarter of 2008, with $7.4 million of these increases from the two previously discussed loans. Worsening economic conditions and declining property values have resulted in higher residential and commercial real estate losses while consumer loan losses have been relatively stable. The provision for loan losses exceeded net charge-offs by $2.2 million in the third quarter of 2009 and $11.0 million for the first nine months of 2009, which increased the allowance for loan losses to 1.74% of total loans at September 30, 2009 compared to 1.65% at June 30, 2009 and 1.21% at September 30, 2008.
Non-performing loans increased $0.8 million from the second quarter to $82.4 million at September 30, 2009 or 2.35% as a percent of total loans, and increased $46.1 million from December 31, 2008. The non-performing loan increase from year-end reflects general deterioration of credit quality which has been most prevalent in the commercial and residential real estate portfolios, but migration into non-accrual status and overall new loan delinquencies have slowed since the first quarter. Commercial real estate and residential real estate loans represent approximately 62% and 17%, respectively of non-performing loans at September 30, 2009. Commercial real estate has been impacted by rising vacancy rates and declining property values across all classes of property particularly in the metropolitan markets of central and southwestern Ohio. More residential real estate loans are experiencing extended delinquency that requires them either to be renegotiated to avoid foreclosure whenever possible or placed on non-accrual even if they remain adequately secured. Although categorized as non-performing loans, most renegotiated loans are accruing as they generally continue to perform in accordance with their modified terms.
The allowance for loan losses represented 179% of net charge-offs for the trailing twelve months ended September 30, 2009, and 74% of non-performing loans.
Non-Interest Income
As compared to the third quarter of 2008, non-interest income increased by $3.6 million, due to increased net securities gains of $1.1 million, a bank owned life insurance claim of $1.0 million, a $0.4 million increase in service charges on deposits and higher income from sales of mortgage loans, securities brokerage and ATM fees.
Non-interest income for the first nine months of 2009 increased $2.4 million compared to the same period of 2008 due to higher net gains on the sale of securities of $2.8 million and higher bank owned life insurance due to the death benefit claim, partially offset by lower trust fee income of $1.6 million due to lower market values. The service charge increase is the result of the branch acquisition, an increase in economic activity and recent free checking marketing campaigns, while mortgage loan sale income is up due to increased product demand. Securities brokerage income continues to grow from improved sales, primarily from the central Ohio market as former AmTrust brokerage representatives have transitioned certain maturing deposit customers into non-bank products.
Non-Interest Expense
In the third quarter of 2009, non-interest expense increased by $1.5 million as compared to the third quarter of 2008 due to increases in FDIC insurance, employee health care and pension expenses, partially offset by a decline in merger-related expenses and marketing. For the first nine months of 2009 expenses increased $3.2 million compared to the same period in 2008; however, expenses declined $0.7 million excluding FDIC insurance and merger-related expenses. An increase in FDIC insurance of $6.5 million in the first nine months of 2009 can be attributed to a $2.6 million special assessment in the second quarter, an increase in the FDIC base rate and elimination of certain assessment credits recognized in prior periods and, to a lesser extent, the increase in deposits resulting from the branch acquisition. Salaries and wages declined $0.8 million due to a decrease in full time equivalent employees from September 30, 2008 to September 30, 2009; however, employee benefits increased by $2.1 million due to higher health care costs and higher pension expenses resulting from a decline in the value of pension assets experienced in 2008.
Decreases in net occupancy and equipment, amortization of intangibles and marketing represented a $1.5 million cost reduction from the first nine months of 2008. Miscellaneous taxes decreased by $1.3 million primarily from the termination of a REIT subsidiary in the fourth quarter of 2008. These cost reductions were partially offset by an online customer services contract termination fee of $0.5 million, as a new suite of internet banking products was placed in service in October, increased foreclosure expenses and higher processing fees to service greater customer activity in electronic transactions.
Investments
Total investments at September 30, 2009 increased $552 million or 63.6% from September 30, 2008 due to the investment of cash from the branch acquisition, while decreasing somewhat from the prior quarter as sales at net gains funded the repayment of the TARP, as well as intentional reductions in CDs and certain borrowings. As a result of decreases in market interest rates, net unrealized gains on the available-for-sale portfolio increased $18.4 million to $36.0 million from year end to September 30, 2009.
Loans
Total portfolio loans were $3.5 billion at quarter end, down from year-end's $3.6 billion level, primarily due continued strategic reductions in residential mortgage loan balances, while management focuses on improving overall credit quality. Reduced new loan demand as well as normal pay-downs on both commercial and residential loans contributed to the decreases. The loan to deposit ratio was 87% at September 30, 2009 as compared to 102% at year-end, primarily as a result of the liquidity provided by the branch deposit acquisition.
Deposits
Deposits at September 30, 2009 increased $501.6 million or 14.3% compared to December 31, 2008 due to the branch acquisition. The increase in WesBanco deposits has been partially offset by expected run off of the acquired, higher-cost CDs over the last two quarters. Some of this runoff has contributed to a remix into low cost money market and checking account deposits.
Borrowings
On September 16, 2009, WesBanco renewed a revolving line of credit with a correspondent bank. The line of credit, which accrues interest at an adjusted LIBOR rate, provides for aggregate secured borrowings of up to $25 million, and matures July 31, 2010. The credit facility provides an additional source of liquidity to the parent company. At September 30, 2009 there were no outstanding advances on the line.
FHLB borrowings at September 30, 2009 decreased 4.9% from December 31, 2008 to $568.0 million. Deposit rates now approximate the average cost of new FHLB or other wholesale borrowings, resulting in management's decision to reduce overall balance sheet reliance on such borrowing types. The shift to a more liquid balance sheet with the recent branch deposit acquisition also provides opportunities to reduce borrowings as they mature to further shrink the size of the balance sheet.
Income Taxes
The provision for income taxes decreased $5.4 million in the first nine months of 2009 compared to the same period in 2008 due to a decrease in pre-tax income and a decrease in the effective tax rate. For 2009 the effective tax rate decreased to 2.3% as compared to 15.1% in the first nine months of 2008, due primarily to the decrease in pre-tax income as well as a higher percentage of tax-exempt income to total income, and certain third quarter tax accrual adjustments to filed returns.
Shareholders' Equity
WesBanco continues to maintain strong regulatory capital ratios of 7.55% tier I leverage capital, 10.97% tier I risk-based capital, and 12.23% total risk-based capital, all of which are considerably above the "well capitalized" standards promulgated by bank regulators, after the repayment of $75 million in TARP preferred stock in the 2009 third quarter. Total tangible common equity to tangible assets (non-GAAP measure) improved to 5.75% at September 30, 2009 from the second quarter, primarily due to balance sheet strategies and an increase in other comprehensive income. On August 27, 2009 the Board of Directors of WesBanco declared a third quarter common stock dividend of $0.14 per share, a 50% reduction in the quarterly dividend rate as compared to the prior quarterly rate. The reduction was taken to address the impact of the recession on earnings and to increase capital internally by reducing the payout ratio. The dividend reduction will better match dividends to current earnings opportunities.
WesBanco is a multi-state bank holding company with total assets of approximately $5.6 billion, operating through 114 branch locations and 138 ATMs in West Virginia, Ohio, and Pennsylvania. WesBanco's banking subsidiary is WesBanco Bank, Inc., headquartered in Wheeling, West Virginia. WesBanco also operates an insurance brokerage company, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.
Forward-looking Statements:
Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2008 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), including WesBanco's Form 10-Q as of March 31 and June 30, 2009, 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 Part I, Item 1A. Risk Factors. 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, Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority and other regulatory bodies; potential legislative and federal and state regulatory actions and reform; 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, greater than expected outflows on recent branch acquisition deposits; 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.
NASDAQ Symbol: WSBC
Website: www.wesbanco.com
WESBANCO, INC.
Consolidated Selected Financial Highlights
------------------------------------------
(unaudited, dollars in thousands, except per share amounts)
For the Three Months Ended
September 30,
-------------
Statement of income 2009 2008 % Change
------------------- ---- ---- --------
Interest income $65,212 $68,675 (5.04%)
Interest expense 24,783 28,388 (12.70%)
------ ------ ------
Net interest income 40,429 40,287 0.35%
Provision for credit losses 16,200 6,457 150.89%
------ ----- ------
Net interest income after
provision for
credit losses 24,229 33,830 (28.38%)
------ ------ ------
Non-interest income
Trust fees 3,508 3,639 (3.60%)
Service charges on deposits 6,648 6,280 5.86%
Bank-owned life insurance 1,873 934 100.54%
Net securities gains/(losses) 1,329 276 381.52%
Net gains on sales of
mortgage loans 820 595 37.82%
Other income 4,377 3,246 34.84%
----- ----- -----
Total non-interest income 18,555 14,970 23.95%
Non-interest expense
Salaries and wages 13,920 14,062 (1.01%)
Employee benefits 5,240 3,980 31.66%
Net occupancy 2,572 2,511 2.43%
Equipment 2,888 2,739 5.44%
Marketing 1,486 2,078 (28.49%)
FDIC Insurance 1,528 310 392.90%
Amortization of intangible
assets 806 950 (15.16%)
Restructuring and merger-related
expenses 2 539 (99.63%)
Other operating expenses 9,263 8,996 2.97%
----- ----- ----
Total non-interest expense 37,705 36,165 4.26%
------ ------ ----
Income before provision for
income taxes 5,079 12,635 (59.80%)
Provision for income taxes (363) 1,126 (132.24%)
---- ----- -------
Net income $5,442 $11,509 (52.72%)
====== ======= ======
Preferred dividends 3,121 - 100.00%
----- - ------
Net Income available to Common
Shareholders $2,321 $11,509 (79.83%)
====== ======= ======
Taxable equivalent net
interest income $42,365 $42,220 0.34%
Per common share data
---------------------
Net income available per common
share - basic $0.09 $0.43 (79.07%)
Net income available per common
share - diluted $0.09 $0.43 (79.07%)
Dividends declared $0.14 $0.28 (50.00%)
Book value (period end)
Tangible book value (period end) (2)
Tangible common book value (period
end) (2)
Average common shares outstanding
- basic 26,567,653 26,550,318 0.07%
Average common shares outstanding -
diluted 26,568,081 26,561,874 0.02%
Period end common shares outstanding 26,567,653 26,560,889 0.03%
Period end preferred shares
outstanding - - 0.00%
Selected ratios
---------------
Return on average assets 0.38% 0.88% (56.67%)
Return on average equity 3.35% 7.78% (56.89%)
Return on average tangible equity
(2) 7.48% 16.19% (53.77%)
Yield on earning assets (1) 5.30% 6.18% (14.24%)
Cost of interest bearing liabilities 2.21% 2.80% (21.07%)
Net interest spread (1) 3.09% 3.38% (8.58%)
Net interest margin (1) 3.35% 3.70% (9.46%)
Efficiency (1) 61.89% 63.24% (2.13%)
Average loans to average deposits 87.21% 101.25% (13.87%)
Annualized net loan charge-offs/
average loans 1.58% 0.54% 191.78%
Effective income tax rate (7.15%) 8.91% (180.21%)
For the Nine Months Ended
September 30,
-------------
Statement of income 2009 2008 % Change
------------------- ---- ---- --------
Interest income $194,493 $214,043 (9.13%)
Interest expense 76,686 94,353 (18.72%)
------ ------ ------
Net interest income 117,807 119,690 (1.57%)
Provision for credit losses 36,019 17,605 104.60%
------ ------ ------
Net interest income after provision for
credit losses 81,788 102,085 (19.88%)
------ ------- ------
Non-interest income
Trust fees 10,149 11,702 (13.27%)
Service charges on deposits 17,941 17,903 0.21%
Bank-owned life insurance 3,661 2,696 35.79%
Net securities gains/(losses) 3,933 1,182 232.74%
Net gains on sales of mortgage
loans 1,606 1,059 51.65%
Other income 10,011 10,314 (2.94%)
------ ------ -----
Total non-interest income 47,301 44,856 5.45%
Non-interest expense
Salaries and wages 41,085 41,933 (2.02%)
Employee benefits 15,008 12,899 16.35%
Net occupancy 7,676 8,034 (4.46%)
Equipment 8,117 8,185 (0.83%)
Marketing 3,961 4,458 (11.15%)
FDIC Insurance 7,104 574 1137.63%
Amortization of intangible
assets 2,315 2,872 (19.39%)
Restructuring and merger-related
expenses 623 3,244 (80.80%)
Other operating expenses 26,174 26,696 (1.96%)
------ ------ -----
Total non-interest expense 112,063 108,895 2.91%
------- ------- ----
Income before provision for income
taxes 17,026 38,046 (55.25%)
Provision for income taxes 390 5,750 (93.22%)
--- ----- ------
Net income $16,636 $32,296 (48.49%)
======= ======= ======
Preferred dividends 5,233 - 100.00%
----- - ------
Net Income available to Common
Shareholders $11,403 $32,296 (64.69%)
======= ======= ======
Taxable equivalent net interest
income $123,626 $125,566 (1.55%)
Per common share data
---------------------
Net income available per common
share - basic $0.43 $1.22 (64.75%)
Net income available per common
share - diluted $0.43 $1.22 (64.75%)
Dividends declared $0.70 $0.84 (16.67%)
Book value (period end) $22.30 $22.04 1.16%
Tangible book value (period end) (2) $11.41 $11.91 (4.14%)
Tangible common book value (period
end) (2) $11.41 $11.91 (4.14%)
Average common shares outstanding -
basic 26,565,621 26,548,304 0.07%
Average common shares outstanding -
diluted 26,567,174 26,558,421 0.03%
Period end common shares outstanding 26,567,653 26,560,889 0.03%
Period end preferred shares
outstanding - - 0.00%
Selected ratios
---------------
Return on average assets 0.40% 0.77% (48.44%)
Return on average equity 3.39% 6.57% (48.44%)
Return on average tangible equity (2) 7.22% 15.56% (53.62%)
Yield on earning assets (1) 5.39% 6.46% (16.56%)
Cost of interest bearing liabilities 2.35% 3.07% (23.45%)
Net interest spread (1) 3.04% 3.39% (10.32%)
Net interest margin (1) 3.32% 3.69% (10.03%)
Efficiency (1) 65.56% 63.90% 2.60%
Average loans to average deposits 90.18% 98.81% (8.73%)
Annualized net loan charge-offs/
average loans 0.95% 0.46% 107.50%
Effective income tax rate 2.29% 15.11% (84.84%)
(1) 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.
(2) See non-GAAP financial measures for additional information
relating to the calculation of this item.
WESBANCO, INC.
Consolidated Selected Financial Highlights
------------------------------------------
(unaudited, dollars in thousands)
Balance sheet (period end) September 30,
-------------------------- -------------
Assets 2009 2008 % Change
---- ---- --------
Cash and due from
banks $75,257 $109,182 (31.07)%
Due from banks -
interest bearing 11,999 17,646 (32.00)
Securities 1,419,137 867,414 63.61
Loans held for sale 6,860 5,165 32.82
Portfolio Loans:
Commercial and
commercial real
estate 2,228,739 2,173,073 2.56
Residential real
estate 739,151 881,695 (16.17)
Consumer and home
equity 533,732 543,152 (1.73)
------- ------- -----
Total portfolio
loans 3,501,622 3,597,920 (2.68)
Allowance for loan
losses (60,755) (43,480) 39.73
------- ------- -----
Net portfolio
loans 3,440,867 3,554,440 (3.20)
--------- --------- -----
Premises and
equipment, net 91,411 95,033 (3.81)
Accrued interest
receivable 22,091 21,570 2.42
Goodwill and other
intangible assets,
net 289,087 269,114 7.42
Bank-owned life
insurance 102,670 100,916 1.74
Other assets 101,712 109,457 (7.08)
------- ------- -----
Total Assets $5,561,091 $5,149,937 7.98%
========== ========== ====
Liabilities and Shareholders' Equity
Non-interest
bearing demand
deposits $514,726 $489,309 5.19%
Interest bearing
demand deposits 467,085 442,478 5.56
Money market
accounts 678,099 505,522 34.14
Savings deposits 479,342 429,502 11.60
Certificates of
deposit 1,866,256 1,654,635 12.79
--------- --------- -----
Total deposits 4,005,508 3,521,446 13.75
--------- --------- -----
Federal Home Loan
Bank borrowings 567,939 613,142 (7.37)
Short-term
borrowings 236,884 271,084 (12.62)
Junior
subordinated debt 111,175 111,089 0.08
Accrued interest
payable 10,664 10,618 0.43
Other liabilities 36,586 37,172 (1.58)
Shareholders'
equity (1) 592,335 585,386 1.19
------- ------- ----
Total Liabilities
and Shareholders'
Equity $5,561,091 $5,149,937 7.98%
========== ========== ====
Balance sheet % Change
(period end) Dec. 31 September 30, 2009
------------- -------
Assets 2008 to Dec. 31, 2008
---- ----------------
Cash and due from
banks $76,025 (1.01)%
Due from banks -
interest bearing 65,145 (81.58)
Securities 935,588 51.68
Loans held for sale 3,874 77.08
Portfolio Loans:
Commercial and
commercial real
estate 2,209,925 0.85
Residential real
estate 856,999 (13.75)
Consumer and home
equity 537,385 (0.68)
------- -----
Total portfolio
loans 3,604,309 (2.85)
Allowance for loan
losses (49,803) 21.99
------- -----
Net portfolio
loans 3,554,506 (3.20)
--------- -----
Premises and
equipment, net 93,693 (2.44)
Accrued interest
receivable 19,966 10.64
Goodwill and other
intangible assets,
net 267,883 7.92
Bank-owned life
insurance 101,229 1.42
Other assets 104,132 (2.32)
------- -----
Total Assets $5,222,041 6.49 %
========== ====
Liabilities and Shareholders' Equity
Non-interest
bearing demand
deposits $486,752 5.75 %
Interest bearing
demand deposits 429,414 8.77
Money market
accounts 479,256 41.49
Savings deposits 423,830 13.10
Certificates of
deposit 1,684,664 10.78
--------- -----
Total deposits 3,503,916 14.32
--------- -----
Federal Home Loan
Bank borrowings 596,890 (4.85)
Short-term
borrowings 297,805 (20.46)
Junior
subordinated debt 111,110 0.06
Accrued interest
payable 10,492 1.64
Other liabilities 42,457 (13.83)
Shareholders'
equity (1) 659,371 (10.17)
------- ------
Total Liabilities
and Shareholders'
Equity $5,222,041 6.49 %
========== ====
Average balance sheet and
-------------------------
net interest margin analysis Three months ended September 30,
---------------------------- --------------------------------
2009 2008
---- ----
Average Average Average Average
Assets Balance Rate Balance Rate
------- ---- ------- ----
Due from banks -
interest bearing $38,772 0.19% $18,953 1.15%
Loans, net of
unearned income 3,529,534 5.73% 3,617,444 6.36%
Securities:
Taxable 1,100,345 3.84% 549,070 5.04%
Tax-exempt 337,130 6.56% 335,850 6.58%
------- ---- ------- ----
Total
securities 1,437,475 4.48% 884,920 5.63%
Federal funds sold - 0.00% 598 2.01%
Other earning
assets (2) 31,911 0.83% 32,357 3.91%
------ ---- ------ ----
Total earning
assets 5,037,692 5.30% 4,554,272 6.18%
Other assets 624,391 621,838
------- -------
Total Assets $5,662,083 $5,176,110
========== ==========
Liabilities and Shareholders' Equity
Interest bearing
demand deposits $456,939 0.68% $432,706 0.82%
Money market
accounts 680,008 1.03% 518,629 1.66%
Savings deposits 483,273 0.50% 438,142 0.66%
Certificates of
deposit 1,905,645 2.72% 1,679,159 3.62%
--------- ---- --------- ----
Total interest
bearing
deposits 3,525,865 1.82% 3,068,636 2.47%
Federal Home Loan
Bank borrowings 574,097 3.85% 557,365 3.94%
Other borrowings 228,514 3.09% 302,842 2.75%
Junior
subordinated debt 111,164 4.36% 111,073 6.07%
------- ---- ------- ----
Total interest
bearing
liabilities 4,439,640 2.21% 4,039,916 2.80%
--------- ---- --------- ----
Non-interest
bearing demand
deposits 521,477 504,232
Other liabilities 57,266 43,345
Shareholders'
equity 643,700 588,617
------- -------
Total Liabilities
and Shareholders'
Equity $5,662,083 $5,176,110
========== ==========
Taxable equivalent net
interest spread 3.09% 3.38%
==== ====
Taxable equivalent net
interest margin 3.35% 3.70%
==== ====
Average balance sheet and
-------------------------
net interest margin analysis Nine months ended September 30,
---------------------------- -------------------------------
2009 2008
---- ----
Average Average Average Average
Assets Balance Rate Balance Rate
------- ---- ------- ----
Due from banks -
interest bearing $43,606 0.19% $10,365 2.85%
Loans, net of
unearned income 3,563,632 5.80% 3,664,935 6.58%
Securities:
Taxable 991,584 3.88% 509,108 5.61%
Tax-exempt 336,334 6.59% 325,841 6.87%
------- ---- ------- ----
Total
securities 1,327,918 4.57% 834,949 6.10%
Federal funds sold 2,755 0.24% 13,575 2.65%
Other earning
assets (2) 32,055 0.97% 30,060 3.77%
------ ---- ------ ----
Total earning
assets 4,969,966 5.39% 4,553,884 6.46%
Other assets 620,730 682,845
------- -------
Total Assets $5,590,696 $5,236,729
========== ==========
Liabilities and Shareholders' Equity
Interest bearing
demand deposits $452,836 0.64% $429,623 1.27%
Money market
accounts 604,735 1.07% 466,035 1.92%
Savings deposits 466,819 0.51% 530,890 0.62%
Certificates of
deposit 1,906,149 2.89% 1,786,016 4.06%
--------- ---- --------- ----
Total interest
bearing
deposits 3,430,539 1.95% 3,212,564 2.81%
Federal Home Loan
Bank borrowings 583,837 3.85% 491,989 4.00%
Other borrowings 232,982 3.22% 293,645 3.12%
Junior
subordinated debt 111,143 5.09% 111,051 6.39%
------- ---- ------- ----
Total interest
bearing
liabilities 4,358,501 2.35% 4,109,249 3.07%
--------- ---- --------- ----
Non-interest
bearing demand
deposits 521,157 496,537
Other liabilities 54,407 43,375
Shareholders'
equity 656,631 587,568
------- -------
Total Liabilities
and Shareholders'
Equity $5,590,696 $5,236,729
========== ==========
Taxable equivalent net
interest spread 3.04% 3.39%
==== ====
Taxable equivalent net
interest margin 3.32% 3.69%
==== ====
(1) Shareholders equity at December 31, 2008 includes preferred stock
and warrants issued to the U.S. Treasury in the total amount of
$75.0 million.
(2) Federal Home Loan Bank stock and equity securities that do not have
readily determinable fair market values.
WESBANCO, INC.
Consolidated Selected Financial Highlights
------------------------------------------
(unaudited, dollars in thousands, except per share amounts)
Quarter Ended
-------------
Statement of Sept. 30, June 30, Mar. 31, Dec. 31 Sept. 30,
income 2009 2009 2009 2008 2008
------------ ---- ---- ---- ---- ----
Interest income $65,212 $66,079 $63,201 $67,722 $68,675
Interest expense 24,783 26,828 25,074 26,875 28,388
------ ------ ------ ------ ------
Net interest
income 40,429 39,251 38,127 40,847 40,287
Provision for
credit losses 16,200 10,269 9,550 15,044 6,457
------ ------ ----- ------ -----
Net interest income after provision for
credit
losses 24,229 28,982 28,577 25,803 33,830
------ ------ ------ ------ ------
Non-interest income
Trust fees 3,508 3,288 3,353 3,181 3,639
Service charges
on deposits 6,648 6,076 5,217 6,083 6,280
Bank-owned life
insurance 1,873 897 892 1,111 934
Net securities
gains 1,329 2,462 142 374 276
Net gains on
sales of mortgage
loans 820 297 488 535 595
Other income 4,377 3,289 2,344 1,206 3,246
----- ----- ----- ----- -----
Total non-
interest
income 18,555 16,309 12,436 12,490 14,970
Non-interest expense
Salaries and
wages 13,920 13,998 13,167 13,553 14,062
Employee
benefits 5,240 5,061 4,707 3,739 3,980
Net occupancy 2,572 2,361 2,744 2,428 2,511
Equipment 2,888 2,687 2,542 2,782 2,739
Marketing 1,486 1,720 756 1,210 2,078
FDIC
Insurance 1,528 4,322 1,254 157 310
Amortization of
intangible
assets 806 812 698 939 950
Merger and
restructuring
expenses 2 192 429 701 539
Other operating
expenses 9,263 8,392 8,515 8,220 8,996
----- ----- ----- ----- -----
Total non-
interest
expense 37,705 39,545 34,812 33,729 36,165
------ ------ ------ ------ ------
Income before
provision for
income taxes 5,079 5,746 6,201 4,564 12,635
Provision for
income taxes (363) 2 752 (1,257) 1,126
---- - --- ------ -----
Net income $5,442 $5,744 $5,449 $5,821 $11,509
====== ====== ====== ====== =======
Preferred
dividends 3,121 1,057 1,055 293 -
----- ----- ----- --- -----
Net Income
available to
Common
Shareholders $2,321 $4,687 $4,394 $5,528 $11,509
====== ====== ====== ====== =======
Taxable
equivalent net
interest income $42,365 $41,242 $40,019 $42,792 $42,220
Per common share data
---------------------
Net income per
common share -
basic $0.09 $0.18 $0.17 $0.21 $0.43
Net income per
common share -
diluted $0.09 $0.18 $0.17 $0.21 $0.43
Dividends declared $0.14 $0.28 $0.28 $0.28 $0.28
Book value
(period end) $22.30 $24.61 $24.85 $24.82 $22.04
Tangible book
value (period
end) (2) $11.41 $13.69 $14.00 $14.74 $11.91
Tangible common
book value
(period end) (2) $11.41 $10.96 $11.27 $12.02 $11.91
Average common
shares
outstanding -
basic 26,567,653 26,567,653 26,561,490 26,560,889 26,550,318
Average common
shares
outstanding -
diluted 26,568,081 26,568,752 26,563,945 26,579,724 26,561,874
Period end common
shares
outstanding 26,567,653 26,567,653 26,567,653 26,560,889 26,560,889
Period end
preferred shares
outstanding - 75,000 75,000 75,000 -
Full time
equivalent
employees (3) 1,428 1,473 1,448 1,501 1,519
Selected ratios
---------------
Return on average
assets 0.38% 0.39% 0.42% 0.45% 0.88%
Return on average
equity 3.35% 3.48% 3.33% 3.77% 7.78%
Return on average
tangible equity
(2) 7.48% 7.51% 6.69% 8.39% 16.19%
Yield on earning
assets (1) 5.30% 5.24% 5.65% 6.04% 6.18%
Cost of interest
bearing
liabilities 2.21% 2.34% 2.52% 2.65% 2.80%
Net interest
spread (1) 3.09% 2.90% 3.13% 3.39% 3.38%
Net interest
margin (1) 3.35% 3.17% 3.47% 3.71% 3.70%
Efficiency (1) 61.89% 68.71% 66.37% 61.01% 63.24%
Average loans to
average deposits 87.21% 84.80% 99.94% 101.75% 101.25%
Trust Assets,
market value at
period end $2,579,384 $2,368,578 $2,259,987 $2,400,211 $2,732,514
(1) 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.
(2) See non-GAAP financial measures for additional information relating
to the calculation of this item.
(3) The quarter ended March 31, 2009 excludes AmTrust employees which
were acquired on March 27, 2009.
WESBANCO, INC.
Consolidated Selected Financial Highlights
------------------------------------------
(unaudited, dollars in thousands)
Quarter Ended
-------------
Asset quality Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
data 2009 2009 2009 2008 2008
------------- ---- ---- ---- ---- ----
Non-performing
assets:
Non-accrual
loans $67,355 $70,021 $55,959 $31,737 $34,384
Reneg-
otiated
loans 15,013 11,586 14,580 4,559 -
------ ------ ------ ----- -
Total
non-
per-
forming
loans 82,368 81,607 70,539 36,296 34,384
Other real
estate and
repossessed
assets 8,665 2,892 2,754 2,554 2,800
----- ----- ----- ----- -----
Total
non-
performing
assets $91,033 $84,499 $73,293 $38,850 $37,184
Loans past
due 90 days
or more and
accruing 7,767 10,163 5,655 18,810 12,274
------- ------- ------- ------- -------
Total
non-
performing
assets and
loans
past due
90 days
or
more $98,800 $94,662 $78,948 $57,660 $49,458
======= ======= ======= ======= =======
Loans past
due 30-89
days $24,833 $26,371 $37,178 $35,606 $34,973
======= ======= ======= ======= =======
Loans past
due 90 days
or more and
accruing
/ total
loans 0.22% 0.29% 0.16% 0.52% 0.34%
Non-
performing
loans/total
loans 2.35% 2.30% 1.97% 1.01% 0.96%
---- ---- ---- ---- ----
Non-performing
loans and
loans
past due 90
days or more/
total loans 2.57% 2.59% 2.13% 1.53% 1.30%
==== ==== ==== ==== ====
Non-performing
assets/total
loans, other
real estate
and repossessed
assets 2.59% 2.38% 2.05% 1.08% 1.03%
Loans past
due 30-89
days/total
loans 0.71% 0.74% 1.04% 0.99% 0.97%
Allowance for loan losses
-------------------------
Allowance for
loan losses $60,755 $58,572 $54,252 $49,803 $43,480
Provision for
loan losses 16,200 10,400 9,550 15,000 6,549
Net loan
charge-offs 14,017 6,079 5,102 8,652 4,947
Annualized
net loan
charge-offs /
average loans 1.58% 0.68% 0.57% 0.96% 0.55%
Allowance for
loan losses/
total loans 1.74% 1.65% 1.52% 1.38% 1.21%
Allowance for
loan losses/
non-
performing
loans 0.74 x 0.72 x 0.77 x 1.37 x 1.26 x
Allowance for
loan losses/non-
performing loans
and past due 90
days or more 0.67 x 0.64 x 0.71 x 0.90 x 0.93 x
Quarter Ended
-------------
Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Capital ratios
--------------
Tier I
leverage
capital 7.55% 8.61% 9.72% 10.27% 8.82%
Tier I risk-
based capital 10.97% 12.18% 12.70% 13.21% 11.44%
Total risk-
based capital 12.23% 13.43% 13.95% 14.46% 12.59%
Shareholders'
equity to
assets 11.37% 11.32% 12.64% 11.82% 11.37%
Tangible
equity to
tangible
assets (1) 5.75% 6.68% 6.58% 7.90% 6.48%
Tangible
common equity
to tangible
assets (1) 5.75% 5.35% 5.30% 6.44% 6.48%
(1) See non-GAAP financial measures for additional information relating
to the calculation of this item.
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
------------------
(unaudited, dollars Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
in thousands) 2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Return on average
tangible equity:
Net income
(annualized) $21,591 $23,039 $22,099 $23,157 $45,786
Plus: amortization of
intangibles
(annualized) (1) 4,920 5,011 4,355 5,747 5,814
----- ----- ----- ----- -----
Net income before
amortization of
intangibles
(annualized) 26,511 28,050 26,454 28,904 51,600
------ ------ ------ ------ ------
Average total
shareholder's equity 643,700 662,162 664,277 613,160 588,617
Less: average
goodwill and other
intangibles (289,470) (288,780) (268,662) (268,592) (269,859)
-------- -------- -------- -------- --------
Average tangible
equity 354,230 373,382 395,615 344,568 318,758
------- ------- ------- ------- -------
Return on average
tangible equity 7.48% 7.51% 6.69% 8.39% 16.19%
==== ==== ==== ==== =====
Nine Months Ended
-----------------
Sept. 30,
(unaudited, dollars in
thousands) 2009 2008
---- ----
Return on average
tangible equity:
Net income
(annualized) $22,242 $43,140
Plus: amortization of
intangibles
(annualized) (1) 4,762 5,902
----- -----
Net income before
amortization of
intangibles
(annualized) 27,004 49,042
------ ------
Average total
shareholder's equity 656,631 587,568
Less: average
goodwill and other
intangibles (282,380) (272,338)
-------- --------
Average tangible
equity 374,251 315,230
------- -------
Return on average
tangible equity 7.22% 15.56%
==== =====
Period End
----------
Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Tangible book value:
Total
shareholders'
equity $592,335 $653,720 $660,201 $659,371 $585,386
Less:
goodwill
and
other
intangible
assets (289,087) (289,893) (288,332) (267,883) (269,114)
-------- -------- -------- -------- --------
Tangible
equity 303,248 363,827 371,869 391,488 316,272
Common shares
out-
standing 26,567,653 26,567,653 26,567,653 26,560,889 26,560,889
---------- ---------- ---------- ---------- ----------
Tangible book
value $11.41 $13.69 $14.00 $14.74 $11.91
====== ====== ====== ====== ======
Tangible equity
to tangible
assets:
Total
shareholders'
equity $592,335 $653,720 $660,201 $659,371 $585,386
Less:
goodwill
and
other
intangible
assets (289,087) (289,893) (288,332) (267,883) (269,114)
-------- -------- -------- -------- --------
Tangible
equity 303,248 363,827 371,869 391,488 316,272
Total assets 5,561,091 5,736,941 5,940,073 5,222,041 5,149,937
Less:
goodwill
and
other
intangible
assets (289,087) (289,893) (288,332) (267,883) (269,114)
-------- -------- -------- -------- --------
Tangible
assets 5,272,004 5,447,048 5,651,741 4,954,158 4,880,823
--------- --------- --------- --------- ---------
Tangible
equity
to
tangible
assets 5.75% 6.68% 6.58% 7.90% 6.48%
==== ==== ==== ==== ====
Tangible common
equity to
tangible assets:
Total
shareholders'
equity $592,335 $653,720 $660,201 $659,371 $585,386
Less:
goodwill
and
other
intangible
assets (289,087) (289,893) (288,332) (267,883) (269,114)
Less:
preferred
shareholders'
equity - (72,560) (72,441) (72,332) -
--- ------- ------- ------- ----
Tangible
common
equity 303,248 291,267 299,428 319,156 316,272
Total assets 5,561,091 5,736,941 5,940,073 5,222,041 5,149,937
Less:
goodwill
and other
intangible
assets (289,087) (289,893) (288,332) (267,883) (269,114)
-------- -------- -------- -------- --------
Tangible
assets 5,272,004 5,447,048 5,651,741 4,954,158 4,880,823
--------- --------- --------- --------- ---------
Tangible common
equity
to tangible
assets 5.75% 5.35% 5.30% 6.44% 6.48%
==== ==== ==== ==== ====
Tangible common book value:
Total shareholders'
equity $592,335 $653,720 $660,201 $659,371 $585,386
Less:
goodwill
and
other
intangible
assets (289,087) (289,893) (288,332) (267,883) (269,114)
Less:
preferred
shareholders'
equity - (72,560) (72,441) (72,332) -
--- ------- ------- ------- ----
Tangible
common
equity $303,248 $291,267 $299,428 $319,156 $316,272
Common
shares
outstanding 26,567,653 26,567,653 26,567,653 26,560,889 26,560,889
---------- ---------- ---------- ---------- ----------
Tangible common
book value $11.41 $10.96 $11.27 $12.02 $11.91
====== ====== ====== ====== ======
(1) Tax effected at 35%.
SOURCE WesBanco, Inc.