WesBanco Announces Second Quarter 2015 Net Income

Jul 21, 2015, 16:21 ET from WesBanco, Inc.

WHEELING, W.V., July 21, 2015 /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 net income and related earnings per share for the three and six months ended June 30, 2015.  Net income for the three months ended June 30, 2015, excluding after-tax merger-related expenses of $0.7 million, was $22.4 million (non-GAAP measure) compared to $18.9 million for the second quarter of 2014, representing an increase of 18.5%.  Diluted earnings per share, excluding after-tax merger-related expenses, were $0.58 (non-GAAP measure), compared to $0.64 per share for the second quarter of 2014.  For the six month period ending June 30, 2015, net income excluding after-tax merger-related expenses of $7.1 million, was $42.6 million (non-GAAP measure) compared to $35.3 million for the first half of last year, representing an increase of 20.6%.  Diluted earnings per share, excluding after-tax merger-related expenses, totaled $1.17 (non-GAAP measure), compared to $1.20 per share for the first six months of 2014. On a GAAP basis, net income for the three months ended June 30, 2015 was $21.6 million, while diluted earnings per share were $0.56, compared to $18.9 million or $0.64 per diluted share for the second quarter of 2014.  Net income for the first half of 2015 was $35.5 million or $0.97 per diluted share compared to $35.3 million or $1.20 per diluted share for the same period of 2014.  For the three and six month periods, temporary extra operating costs of $0.3 million and $0.8 million, after tax, were incurred between ESB closing and branch systems conversion.




For the Three Months Ended June 30, 


For the Six Months Ended June 30, 




2015


2014


2015


2014

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


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share

Net income (Non-GAAP)(1)


$      22,358


$       0.58


$      18,875


$       0.64


$      42,563


$       1.17


$      35,296


$       1.20

Less: After tax merger-related expenses


(725)


(0.02)


-


-


(7,051)


(0.20)


-


-

Net income (GAAP)


$      21,633


$       0.56


$      18,875


$       0.64


$      35,512


$       0.97


$      35,296


$       1.20

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

 

WesBanco's results for the three and six months ended June 30, 2015 included ESB Financial Corporation's ("ESB") results from February 10, 2015, the date of consummation of the merger.  ESB was a Pennsylvania thrift holding company, headquartered in Ellwood City, Lawrence County, just to the northwest of Pittsburgh, PA, with approximately $1.9 billion in assets and 23 offices in four southwestern PA counties, three of which are in the Pittsburgh Metropolitan Statistical Area ("MSA").  WesBanco now has $8.4 billion in total assets and provides banking services through 142 branch locations and 130 ATMs in three states. The transaction expanded WesBanco's franchise in western Pennsylvania from 16 to 38 offices with approximately $1.7 billion in total deposits at June 30, 2015.

Mr. Clossin commented, "The second quarter reflects continued improvement in financial results achieved from both our legacy markets and from our February merger with ESB.   Net income excluding merger-related expenses increased 18.5% from the second quarter of last year and 10.6% from the first quarter of this year. Our efficiency ratio continues to improve and now stands in the mid 50's. We continue to experience positive operating leverage with revenue growth exceeding expense growth. Our ability to make sound investments and realize the return on those investments is a relentless focus of ours. Net interest income, a reflection of overall success, has improved in each of the last eight quarters, growing 25.8% since the second quarter of last year. This improvement has occurred despite anticipated pressure on the net interest margin from asset mix changes resulting from the acquisition as well as from broader market interest rate declines. Annualized loan growth was 7.2% from December 31, 2014, exclusive of ESB, as total originations increased.  Most credit quality metrics improved in the second quarter, despite an increase in net charge-offs and the provision for credit losses, as total delinquencies and non-performing, criticized and classified loans all decreased as a percentage of loans.  Major components of non-interest income are also improving as trust fees, service charges on deposits and electronic banking fees grew from the second quarter of last year. WesBanco has established a solid record of improvement and achievement."

Financial Condition

Total assets at June 30, 2015 increased 33.4% or $2.1 billion compared to June 30, 2014 due to the acquisition of ESB and organic growth exclusive of ESB.  Portfolio loans increased $987.5 million, with $700.9 million from the acquisition and $286.6 million from loan growth exclusive of ESB.  Organic loan growth from December 31, 2014, annualized, was 7.2%, primarily achieved through $825 million in loan originations for the first half of 2015 compared to $625 million last year. Loan growth occurred in all major loan categories, with approximately 25.1% of the growth in commercial and industrial loans.  Loan growth was driven by increased business activity, additional commercial and residential lending personnel in our urban markets, focused marketing efforts and continued improvement in loan origination processes. Deposits increased $1.1 billion compared to June 30, 2014, primarily due to the acquisition.  Non-interest bearing deposits, excluding the acquisition, were up 7.0% over the last year. Excluding certificates of deposit, deposits increased $149.6 million or 4.1% from June 30, 2014, at an annualized rate of 5.2% for the first half of 2015, with deposits from Marcellus and Utica shale gas customers contributing to the increase.  Certificates of deposit, excluding ESB, decreased $211.2 million due to lower rate offerings for maturing CDs.

WesBanco continues to maintain strong regulatory capital ratios after the ESB acquisition and implementation of the new BASEL III capital standards.  At June 30, 2015, Tier I leverage was 9.29%, Tier I Risk-Based capital was 13.47%, and Total Risk-Based capital was 14.30%.  Both consolidated and bank-level regulatory capital ratios are well above the applicable, revised "well-capitalized" standards promulgated by bank regulators, as well as the recently finalized BASEL III capital standards.  As required by BASEL III, a new ratio for 2015, Common Equity Tier 1 capital ratio (CET 1), was 11.71% for the second quarter of 2015, significantly above the requirement of 4.5%. Total tangible equity to tangible assets (non-GAAP measure) was 7.68% at June 30, 2015, decreasing from 7.74% at June 30, 2014, and from year-end's 7.88% due to accelerating growth in assets, primarily loans, as well as securities and lower accumulated other comprehensive income from unrealized security losses. Strong earnings and improved total capital have enabled WesBanco to increase the quarterly dividend rate, currently at $0.23 per share, eight times over the last five years, cumulatively representing a 64% increase.  The most recent increase was $0.01 per share in the first quarter of 2015.

Credit Quality

The provision for credit losses was $2.7 million in the second quarter of 2015 compared to $0.8 million in the same quarter of 2014.  Year-to-date, the provision was $4.0 million compared to $3.0 million in the first six months of 2014.  Net charge-offs for the first half of 2015 were $4.9 million or 0.21% of average portfolio loans compared to $4.7 million or 0.25% in first half of 2014.  The increase in both the provision and charge-offs were primarily due to one non-energy industry-related commercial credit placed on nonaccrual and charged-down by $1.3 million. Portfolio growth also impacted the provision.  However, other credit quality metrics, including the loans acquired in the ESB acquisition, continue to improve overall. 

Non-performing loans, including TDRs, as well as criticized and classified loans and delinquencies, improved as a percentage of total portfolio loans from their pre-acquisition levels in the fourth quarter of 2014 and from the second quarter of 2014. Total non-performing loans were 1.24% of total loans at June 30, 2015, decreasing from 1.26% of total loans at June 30, 2014. Criticized and classified loans were 1.68% of total loans, improving from 3.08% of total loans a year ago. Past due loans at June 30, 2015 were 0.26% of total loans, decreasing from 0.33% at June 30, 2014.  Non-performing loans were up slightly as of June 30, 2015 as compared to March 31, 2015, primarily due to the aforementioned commercial credit being placed on non-accrual at quarter-end.

The allowance for loan losses represented 0.88% of total portfolio loans at June 30, 2015.  If the acquired ESB loans (which were recorded at fair value at the date of acquisition) were excluded from the ratio, the allowance would approximate 1.03% of the adjusted loan total as compared to 1.16% at the end of the second quarter of 2014.

Net Interest Income

Net interest income increased $12.5 million or 25.8% in the second quarter of 2015 compared to the second quarter of 2014 due to a 33.2% increase in average earning assets, primarily through the acquisition, and through a 7.8% increase in average loan balances, exclusive of ESB, partially offset by a 20 basis point decrease in the net interest margin.  Year-to-date, net interest income increased $20.1 million or 21.0%.  Net interest income has shown consistent growth, increasing in each of the last eight consecutive quarters.

The net interest margin decreased to 3.44% in the second quarter compared to 3.64% in the same quarter of 2014. The decrease in the net interest margin is primarily due to a 51 basis point decline in the average rate earned on securities due to lower yields on ESB's retained securities portfolio and other purchased securities.  The lower securities rates were due to the low interest rate environment and were somewhat mitigated by a significantly smaller decrease in rates on loans of only 10 basis points, and a reduction in funding costs of 11 basis points.  In addition, the aforementioned loan growth improves total asset yields as the average rate on loans is higher than the average rate on securities. Funding costs continued to decrease in 2015 as a result of a 33 basis point decrease in the average rate on CDs as higher-rate CDs matured. Overall, average deposits increased by 23.9% in the second quarter of 2015 compared to the same quarter of 2014 with a rate decrease of 12 basis points.  Increased average FHLB borrowings in the first half of 2015 were generally short to medium-term maturities resulting in a decrease in the second quarter rate by 203 basis points compared to the second quarter of 2014.  In addition, the average rate on other borrowings decreased 98 basis points through the prepayment of a higher-rate $22.0 million repurchase agreement with another bank in the third quarter of 2014, and through maturities.  The decline in the net interest margin is also due to asset and liability mix shifts post-ESB, with a greater percentage of lower-yielding investment securities and a greater percentage of CDs versus lower-cost deposit types. Excluding accretion of various purchase accounting adjustments relating to recent acquisitions and the interest recognized on a tax refund in 2014, the net interest margin would have been 3.32% and 3.38% in the second quarter and year-to-date periods of 2015, respectively, compared to 3.57% and 3.58% for the same periods of 2014.

Non-Interest Income

For the second quarter of 2015, non-interest income was relatively unchanged compared to the second quarter of 2014 primarily due to a $1.0 million bank-owned life insurance death benefit recorded in the second quarter of 2014.  However, excluding such death benefit, non-interest income increased in the second quarter of 2015 by $0.8 million or 4.8%. Trust fees increased $0.3 million or 5.1% for the quarter from higher fees, customer development initiatives and overall market improvements.  Total trust assets of $3.8 billion at June 30, 2015 were unchanged from June 30, 2014. Service charges on deposits increased $0.2 million or 4.2% from the addition of ESB and an overall higher fee schedule.  Electronic banking fees increased $0.2 million or 7.0%. Net gains on sales of other assets improved by $0.3 million due to gains on sales of other real estate in 2015 and decreased losses on other assets.  For the first six months of 2015, non-interest income increased by $1.0 million or 2.7%, reflecting similar trends as in the second quarter, however trust fees and electronic banking fees increased 6.2% and 8.6% respectively, compared to the first half of 2014.

Non-Interest Expense

In the second quarter of 2015, net revenue growth of 18.5% outpaced non-interest expense growth of 12.8%, excluding merger-related expenses, compared to the second quarter of 2014.  As a result, the efficiency ratio (net of merger-related expenses) improved in the current quarter to 56.1% from 58.9% in the second quarter of 2014. Overall non-interest expense from the combined company increased $6.3 million in the second quarter, principally from the acquisition, and $1.1 million of merger-related expenses.  Excluding merger-related expenses, non-interest expense increased $5.2 million or 12.8%. Salaries and wages increased $2.4 million or 14.2%, due to a 17.4% increase in average full-time equivalent employees and routine annual adjustments to compensation, partially offset by increased deferrals of loan costs. Employee benefits expense increased $1.3 million or 23.1%, primarily from increased pension, health insurance, social security contributions and other benefit plan costs.  Net occupancy increased $0.4 million principally due to increased building-related costs including utilities and depreciation. Amortization of intangible assets increased $0.5 million or 95.9% from additional ESB intangible assets, primarily related to core deposits.  For the first half of 2015, non-interest expense for the combined company increased by $8.8 million or 10.9%, excluding merger-related expenses, compared to the first half of 2014. Increases were also primarily from salaries and wages, employee benefits, occupancy and amortization of intangibles.

Financial Results Conference Call

WesBanco will also host a conference call to discuss the Company's financial results for the second quarter of 2015 on Wednesday, July 22, 2015 at 10:00 a.m. E.D.T.  Callers wishing to participate should access the call by dialing 1-888-347-6607 or 1-412-902-4290 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 https://www.webcaster4.com/Webcast/Page/905/9406. 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 $8.4 billion, operating through 142 branch locations and 130 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, 2014 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, 2015, 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

2015


2014


% Change


2015


2014


% Change


Loans, including fees

$       52,316


$      42,546


23.0


$    100,036


$      85,291


17.3


Interest and dividends on securities:














Taxable 

10,043


7,452


34.8


18,542


14,676


26.3



Tax-exempt

4,052


3,435


18.0


7,585


6,821


11.2




Total interest and dividends on securities

14,095


10,887


29.5


26,127


21,497


21.5


Other interest income 

318


611


(48.0)


954


713


33.8

          Total interest and dividend income

66,729


54,044


23.5


127,117


107,501


18.2

Interest expense













Interest bearing demand deposits

485


395


22.8


907


768


18.1


Money market deposits

490


466


5.2


945


907


4.2


Savings deposits

163


133


22.6


311


263


18.3


Certificates of deposit

2,869


3,422


(16.2)


5,741


7,052


(18.6)




Total interest expense on deposits

4,007


4,416


(9.3)


7,904


8,990


(12.1)


Federal Home Loan Bank borrowings

949


175


442.3


1,507


386


290.4


Other short-term borrowings

92


350


(73.7)


165


907


(81.8)


Junior subordinated debt owed to unconsolidated subsidiary trusts

888


796


11.6


1,784


1,587


12.4




Total interest expense

5,936


5,737


3.5


11,360


11,870


(4.3)

Net interest income 

60,793


48,307


25.8


115,757


95,631


21.0


Provision for credit losses

2,681


849


215.8


3,970


3,048


30.2

Net interest income after provision for credit losses

58,112


47,458


22.4


111,787


92,583


20.7

Non-interest income













Trust fees

5,476


5,210


5.1


11,529


10,858


6.2


Service charges on deposits

4,249


4,078


4.2


7,918


7,937


(0.2)


Electronic banking fees

3,496


3,267


7.0


6,821


6,281


8.6


Net securities brokerage revenue

1,842


2,003


(8.0)


3,901


3,832


1.8


Bank-owned life insurance

989


1,821


(45.7)


2,244


2,695


(16.7)


Net gains on sales of mortgage loans

407


475


(14.3)


679


628


8.1


Net securities gains

-


165


(100.0)


22


175


(87.4)


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

152


(165)


192.1


185


(52)


455.8


Other income

1,461


1,387


5.3


2,955


2,936


0.6




Total non-interest income

18,072


18,241


(0.9)


36,254


35,290


2.7

Non-interest expense













Salaries and wages

19,300


16,904


14.2


37,636


33,370


12.8


Employee benefits

6,807


5,529


23.1


14,123


11,238


25.7


Net occupancy

3,243


2,857


13.5


6,765


6,348


6.6


Equipment 

3,017


2,914


3.5


5,958


5,698


4.6


Marketing

1,715


1,713


0.1


2,707


2,716


(0.3)


FDIC insurance 

1,040


880


18.2


1,950


1,757


11.0


Amortization of intangible assets

944


482


95.9


1,510


977


54.6


Restructuring and merger-related expense

1,115


-


100.0


10,848


-


100.0


Other operating expenses  

9,408


9,025


4.2


18,550


18,294


1.4




Total non-interest expense

46,589


40,304


15.6


100,047


80,398


24.4

Income before provision for income taxes

29,595


25,395


16.5


47,994


47,475


1.1


Provision for income taxes 

7,962


6,520


22.1


12,482


12,179


2.5

Net Income

$       21,633


$      18,875


14.6


$      35,512


$      35,296


0.6
















Taxable equivalent net interest income

$      62,975


$   50,157


25.6


$    119,841


$    99,304


20.7
















Per common share data












Net income per common share - basic

$           0.56


$          0.65


(13.8)


$          0.97


$          1.21


(19.8)

Net income per common share - diluted

0.56


0.64


(12.5)


0.97


1.20


(19.2)

Dividends declared

0.23


0.22


4.5


0.46


0.44


4.5

Book value (period end)







28.42


26.59


6.9

Tangible book value (period end) (1)







15.72


15.75


(0.2)

Average common shares outstanding - basic

38,472,229


29,242,180


31.6


36,443,951


29,212,347


24.8

Average common shares outstanding - diluted

38,531,700


29,321,927


31.4


36,504,671


29,293,424


24.6

Period end common shares outstanding

38,519,170


29,278,925


31.6


38,519,170


29,278,925


31.6
















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


 

 

WESBANCO, INC.






Consolidated Selected Financial Highlights


Page 5

(unaudited, dollars in thousands)














Selected ratios












For the Six Months Ended



June 30,




2015


2014


% Change

















Return on average assets

0.92

%

1.15

%

(20.00)

%





Return on average equity

7.15


9.29


(23.04)






Return on average tangible equity (1)

12.14


16.17


(24.92)






Yield on earning assets (2) 

3.82


4.07


(6.14)






Cost of interest bearing liabilities

0.42


0.54


(22.22)






Net interest spread (2)

3.40


3.53


(3.68)






Net interest margin (2)

3.49


3.63


(3.86)






Efficiency (1) (2)

57.14


59.73


(4.34)






Average loans to average deposits

77.53


75.46


2.74






Annualized net loan charge-offs/average loans

0.21


0.25


(16.00)






Effective income tax rate 

26.01


25.65


1.40



















































For the Quarter Ended



June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,



2015


2015


2014


2014


2014













Return on average assets

1.05

%

0.75

%

1.04

%

1.14

%

1.22

%

Return on average equity

7.89


5.89


8.17


9.15


9.79


Return on average tangible equity (1)

13.67


10.62


13.77


15.59


16.90


Yield on earning assets (2) 

3.76


3.93


3.96


3.98


4.06


Cost of interest bearing liabilities

0.41


0.43


0.47


0.51


0.52


Net interest spread (2)

3.35


3.50


3.49


3.47


3.54


Net interest margin (2)

3.44


3.59


3.60


3.58


3.64


Efficiency (1) (2) 

56.11


58.24


60.37


58.51


58.93


Average loans to average deposits

76.52


77.98


79.07


77.52


75.40


Annualized net loan charge-offs/average loans

0.25


0.16


0.23


0.22


0.06


Effective income tax rate 

26.90


24.59


23.89


25.93


25.67


Trust assets, market value at period end

$     3,843,792


$        3,852,165


$        3,840,540


$        3,783,774


$        3,844,116













(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,



Dec. 31,

December 31, 2014

Assets


2015


2014


% Change

2014

to June 30, 2015

Cash and due from banks

$          88,336


$          81,790


8.0

$                85,597

3.2

Due from banks - interest bearing

20,402


12,698


60.7

8,405

142.7

Securities:










Available-for-sale, at fair value

1,594,658


1,006,079


58.5

917,424

73.8


Held-to-maturity (fair values of $864,226; $628,540 and $619,617, respectively)

848,416


607,695


39.6

593,670

42.9



Total securities

2,443,074


1,613,774


51.4

1,511,094

61.7

Loans held for sale

11,160


10,641


4.9

5,865

90.3

Portfolio loans:









Commercial real estate

2,194,113


1,940,872


13.0

1,945,460

12.8


Commercial and industrial

733,478


578,665


26.8

638,410

14.9


Residential real estate 

1,241,470


898,357


38.2

928,770

33.7


Home equity

379,740


295,127


28.7

330,031

15.1


Consumer 

384,844


233,097


65.1

244,095

57.7

Total portfolio loans, net of unearned income

4,933,645


3,946,118


25.0

4,086,766

20.7

Allowance for loan losses

(43,419)


(45,741)


5.1

(44,654)

2.8



Net portfolio loans

4,890,226


3,900,377


25.4

4,042,112

21.0

Premises and equipment, net

111,692


92,106


21.3

93,135

19.9

Accrued interest receivable

24,739


19,087


29.6

18,481

33.9

Goodwill and other intangible assets, net

492,997


320,449


53.8

319,506

54.3

Bank-owned life insurance

154,980


121,878


27.2

123,298

25.7

Other assets

137,813


104,220


32.2

89,072

54.7

Total Assets

$    8,375,419


$   6,277,020


33.4

$         6,296,565

33.0












Liabilities








Deposits:










Non-interest bearing demand

$      1,257,932


$      1,021,414


23.2

$           1,061,075

18.6


Interest bearing demand

1,156,949


871,487


32.8

885,037

30.7


Money market

989,888


969,518


2.1

954,957

3.7


Savings deposits

1,075,711


829,155


29.7

842,818

27.6


Certificates of deposit

1,778,565


1,425,829


24.7

1,305,096

36.3



Total deposits

6,259,045


5,117,403


22.3

5,048,983

24.0

Federal Home Loan Bank borrowings

781,332


138,596


463.7

223,126

250.2

Other short-term borrowings

73,868


94,745


(22.0)

80,690

(8.5)

Junior subordinated debt owed to unconsolidated subsidiary trusts

106,196


106,156


0.0

106,176

0.0



Total borrowings

961,396


339,497


183.2

409,992

134.5

Accrued interest payable

2,542


2,306


10.2

1,620

56.9

Other liabilities

57,783


39,189


47.4

47,780

20.9

Total Liabilities

7,280,766


5,498,395


32.4

5,508,375

32.2












Shareholders' Equity








Preferred stock, no par value; 1,000,000 shares authorized; none outstanding








-


-


-

-

-

Common stock, $2.0833 par value; 100,000,000 and 50,000,000 shares authorized in 2015 and 2014, respectively; 38,546,042; 29,367,511 and 29,367,511 shares issued, respectively; 38,519,170; 29,278,925 and 29,298,188 shares outstanding, respectively















80,304


61,182


31.3

61,182

31.3

Capital surplus

516,990


244,029


111.9

244,661

111.3

Retained earnings

522,388


482,786


8.2

504,578

3.5

Treasury stock (26,872; 88,586 and 69,323 shares - at cost, respectively)

(867)


(2,748)


68.4

(2,151)

59.7

Accumulated other comprehensive loss

(21,702)


(5,393)


(302.4)

(18,825)

(15.3)

Deferred benefits for directors

(2,460)


(1,231)


(99.8)

(1,255)

(96.0)

Total Shareholders' Equity

1,094,653


778,625


40.6

788,190

38.9

Total Liabilities and Shareholders' Equity

$    8,375,419


$   6,277,020


33.4

$         6,296,565

33.0

 

 

WESBANCO, INC.





Consolidated Selected Financial Highlights




Page 7

(unaudited, dollars in thousands, except shares)





Balance sheets

June 30,


March 31,


Assets

2015


2015

% Change

Cash and due from banks

$          88,336


$          75,103

17.6%

Due from banks - interest bearing

20,402


17,871

14.2%

Securities:






Available-for-sale, at fair value

1,594,658


1,654,264

(3.6%)


Held-to-maturity (fair values of $864,226 and 772,843, respectively)

848,416


743,925

14.0%



Total securities

2,443,074


2,398,189

1.9%

Loans held for sale

11,160


6,064

84.0%

Portfolio Loans:






Commercial real estate

2,194,113


2,196,944

(0.1%)


Commercial and industrial

733,478


709,621

3.4%


Residential real estate 

1,241,470


1,239,163

0.2%


Home equity

379,740


362,163

4.9%


Consumer 

384,844


365,830

5.2%

Total portfolio loans, net of unearned income

4,933,645


4,873,721

1.2%

Allowance for loan losses

(43,419)


(44,173)

(1.7%)



Net portfolio loans

4,890,226


4,829,548

1.3%

Premises and equipment, net

111,692


110,900

0.7%

Accrued interest receivable

24,739


25,232

(2.0%)

Goodwill and other intangible assets, net

492,997


493,176

(0.0%)

Bank-owned life insurance

154,980


153,991

0.6%

Other assets

137,813


123,205

11.9%

Total Assets

$    8,375,419


$   8,233,279

1.7%






Liabilities





Deposits:






Non-interest bearing demand

$      1,257,932


$      1,249,521

0.7%


Interest bearing demand

1,156,949


1,199,801

(3.6%)


Money market

989,888


1,018,184

(2.8%)


Savings deposits

1,075,711


1,064,808

1.0%


Certificates of deposit

1,778,565


1,883,888

(5.6%)



Total deposits

6,259,045


6,416,202

(2.4%)

Federal Home Loan Bank borrowings

781,332


432,456

80.7%

Other short-term borrowings

73,868


76,630

(3.6%)

Junior subordinated debt owed to unconsolidated subsidiary trusts

106,196


142,269

(25.4%)



Total borrowings

961,396


651,355

47.6%

Accrued interest payable

2,542


2,297

10.7%

Other liabilities

57,783


72,041

(19.8%)

Total liabilities

7,280,766


7,141,895

1.9%








Shareholders' Equity





Preferred stock, no par value; 1,000,000 shares authorized; none outstanding

-


-

-

Common stock, $2.0833 par value; 100,000,000 and 50,000,000 shares authorized; respectively

38,546,042 and 38,546,042 shares issued, respectively; 38,519,170 and 38,449,812 shares outstanding, respectively

80,304


80,304

-

Capital surplus

516,990


520,596

(0.7%)

Retained earnings

522,388


509,622

2.5%

Treasury stock ( 26,872 and 96,230 shares - at cost)

(867)


(3,061)

71.7%

Accumulated other comprehensive income (loss)

(21,702)


(13,624)

(59.3%)

Deferred benefits for directors

(2,460)


(2,453)

(0.3%)

Total Shareholders' Equity

1,094,653


1,091,384

0.3%

Total Liabilities and Shareholders' Equity

$    8,375,419


$   8,233,279

1.7%

 

 

WESBANCO, INC.













Consolidated Selected Financial Highlights










Page 8


(unaudited, dollars in thousands)












Average balance sheet and












net interest margin analysis

For the Three Months Ended June 30,




For the Six Months Ended June 30,






2015

2014



2015

2014





Average 

Average



Average 

Average



Average 

Average



Average 

Average


Assets



Balance

Rate



Balance

Rate



Balance

Rate



Balance

Rate


Due from banks - interest bearing

$            17,291

0.16

%


$           24,134

0.33

%


$            19,959

0.16

%


$            37,567

0.22

%

Loans, net of unearned income (1)

4,902,309

4.28



3,898,740

4.38



4,725,764

4.27



3,886,334

4.43


Securities: (2)


















    Taxable



1,861,123

2.16



1,176,963

2.53



1,641,531

2.26



1,159,072

2.53


    Tax-exempt (3)



542,654

4.60



406,718

5.20



499,102

4.68



403,275

5.20


        Total securities



2,403,777

2.71



1,583,681

3.22



2,140,633

2.82



1,562,347

3.22


Other earning assets (4)


23,515

5.29



10,853

21.82



19,993

9.38



11,209

11.97


         Total earning assets (3)

7,346,892

3.76

%


5,517,408

4.06

%


6,906,349

3.82

%


5,497,457

4.07

%

Other assets



932,695




702,230




890,051




705,703



Total Assets



$     8,279,587




$     6,219,638




$     7,796,400




$     6,203,160





















Liabilities and Shareholders' Equity
















Interest bearing demand deposits

$      1,175,022

0.17

%


$         905,080

0.18

%


$        1,094,115

0.17

%


$          896,347

0.17

%

Money market accounts 


1,027,245

0.19



974,731

0.19



1,005,218

0.19



960,153

0.19


Savings deposits



1,072,988

0.06



824,641

0.06



1,018,449

0.06



816,720

0.06


Certificates of deposit


1,848,654

0.62



1,444,224

0.95



1,744,271

0.66



1,474,247

0.96


    Total interest bearing deposits

5,123,909

0.31



4,148,676

0.43



4,862,053

0.33



4,147,467

0.44


Federal Home Loan Bank borrowings

484,505

0.79



24,926

2.82



361,427

0.84



29,949

2.60


Other borrowings



100,099

0.37



104,109

1.35



106,647

0.31



109,687

1.67


Junior subordinated debt


129,189

2.76



106,151

3.01



124,128

2.90



106,146

3.02


      Total interest bearing liabilities 

5,837,702

0.41

%


4,383,862

0.52

%


5,454,255

0.42

%


4,393,249

0.54

%

Non-interest bearing demand deposits

1,282,327




1,022,331




1,233,328




1,002,822



Other liabilities



59,256




40,393




107,473




41,104



Shareholders' equity



1,100,302




773,052




1,001,344




765,985



Total Liabilities and Shareholders' Equity

$     8,279,587




$     6,219,638




$     7,796,400




$     6,203,160



Taxable equivalent net interest spread


3.35

%



3.54

%



3.40

%



3.53

%

Taxable equivalent net interest margin 


3.44

%



3.64

%



3.49

%



3.63

%



















(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 $0.3 million and $0.8 million for the three months ended June 30, 2015 and 2014, respectively, and






     $0.7 million and $1.7 million for the six months ended June 30, 2015 and 2014, respectively.











     Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $1.1 million and $0.3 million for the three months






     ended June 30, 2015 and 2014, respectively, and $1.9 million and $0.7 million for the six months ended June 30, 2015 and 2014, respectively, while accretion on  interest bearing liabilities 


     acquired from the prior acquisitions was $1.7 and $0.2 million for the three months ended June 30, 2015 and 2014, respectively, and $1.9 million and $0.4 million for the



     six months ended June 30, 2015 and 2014, respectively.















(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

2015


2015


2014


2014


2014


Loans, including fees

$            52,316


$                47,713


$              43,491


$                43,399


$              42,546


Interest and dividends on securities:












Taxable 

10,043


8,498


7,181


7,375


7,452



Tax-exempt

4,052


3,533


3,356


3,413


3,435




Total interest and dividends on securities

14,095


12,031


10,537


10,788


10,887


Other interest income 

318


635


157


116


611

          Total interest and dividend income

66,729


60,379


54,185


54,303


54,044

Interest expense











Interest bearing demand deposits

485


422


400


399


395


Money market deposits

490


456


483


487


466


Savings deposits

163


148


134


135


133


Certificates of deposit

2,869


2,872


2,980


3,254


3,422




Total interest expense on deposits

4,007


3,898


3,997


4,275


4,416


Federal Home Loan Bank borrowings

949


557


318


264


175


Other short-term borrowings

92


75


78


348


350


Junior subordinated debt owed to unconsolidated subsidiary trusts

888


894


806


805


796




Total interest expense

5,936


5,424


5,199


5,692


5,737

Net interest income 

60,793


54,955


48,986


48,611


48,307


Provision for credit losses

2,681


1,289


1,880


1,478


849

Net interest income after provision for credit losses

58,112


53,666


47,106


47,133


47,458

Non-interest income











Trust fees

5,476


6,053


5,115


5,096


5,210


Service charges on deposits

4,249


3,652


4,028


4,170


4,078


Electronic banking fees

3,496


3,325


3,159


3,268


3,267


Net securities brokerage revenue

1,842


2,059


1,389


1,701


2,003


Bank-owned life insurance

989


1,251


1,037


882


1,821


Net gains on sales of mortgage loans

407


272


426


550


475


Net securities gains

-


22


147


581


165


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

152


122


212


(1,167)


(165)


Other income

1,461


1,434


1,047


1,573


1,387




Total non-interest income

18,072


18,190


16,560


16,654


18,241

Non-interest expense











Salaries and wages

19,300


18,357


16,707


17,331


16,904


Employee benefits

6,807


7,316


5,229


5,051


5,529


Net occupancy

3,243


3,490


2,857


2,916


2,857


Equipment 

3,017


2,973


3,008


2,837


2,914


Marketing

1,715


965


1,250


1,276


1,713


FDIC insurance 

1,040


910


833


786


880


Amortization of intangible assets

944


566


466


477


482


Restructuring and merger-related expense

1,115


9,733


1,309


-


-


Other operating expenses  

9,408


9,131


10,313


8,589


9,025




Total non-interest expense

46,589


53,441


41,972


39,263


40,304

Income before provision for income taxes

29,595


18,415


21,694


24,524


25,395


Provision for income taxes 

7,962


4,528


5,182


6,358


6,520

Net Income

$                        21,633


$                13,887


$              16,512


$                18,166


$              18,875














Taxable equivalent net interest income

$                       62,975


$               56,857


$             50,793


$               50,449


$             50,157














Per common share data










Net income per common share - basic

$                            0.56


$                    0.40


$                  0.56


$                    0.62


$                  0.65

Net income per common share - diluted

$                            0.56


$                    0.40


$                  0.56


$                    0.62


$                  0.64

Dividends declared

$                            0.23


$                    0.23


$                  0.22


$                    0.22


$                  0.22

Book value (period end)

$                          28.42


$                  28.38


$                26.90


$                  26.94


$                26.59

Tangible book value (period end) (1)

$                          15.72


$                  15.67


$                16.09


$                  16.10


$                15.75

Average common shares outstanding - basic

38,472,229


34,393,137


29,291,440


29,280,648


29,242,180

Average common shares outstanding - diluted

38,531,700


34,478,335


29,383,506


29,360,880


29,321,927

Period end common shares outstanding

38,519,170


38,449,812


29,298,188


29,283,675


29,278,925

Full time equivalent employees

1,667


1,713


1,448


1,435


1,456



























(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

2015


2015


2014


2014


2014


Non-performing assets:












Troubled debt restructurings - accruing

$         12,958


$         17,330


$         12,066


$         12,222


$         13,513



Non-accrual loans:













Troubled debt restructurings

13,140


9,224


5,420


5,496


6,281




Other non-accrual loans

35,064


32,150


33,398


31,275


29,837




    Total non-accrual loans

48,204


41,374


38,818


36,771


36,118




    Total non-performing loans 

61,162


58,704


50,884


48,993


49,631



Other real estate and repossessed assets

6,168


6,226


5,082


4,695


5,106




Total non-performing assets

$         67,330


$         64,930


$         55,966


$         53,688


$         54,737















Past due loans (1):












Loans past due 30-89 days

$         10,320


$         12,003


$           9,347


$         10,745


$         10,138



Loans past due 90 days or more

2,471


1,031


2,288


3,147


2,947




Total past due loans

$         12,791


$         13,034


$         11,635


$         13,892


$         13,085















Criticized and classified loans (2):












Criticized loans

$         28,280


$         40,659


$         34,288


$         39,553


$         68,707



Classified loans

54,645


52,295


46,851


48,004


52,760




Total criticized and classified loans

$         82,925


$         92,954


$         81,139


$         87,557


$       121,467















Loans past due 30-89 days / total portfolio loans

0.21

%

0.25

%

0.23

%

0.27

%

0.26

%

Loans past due 90 days or more / total portfolio loans

0.05


0.02


0.06


0.08


0.07


Non-performing loans / total portfolio loans

1.24


1.20


1.25


1.22


1.26


Non-performing assets/total portfolio loans, other












real estate and repossessed assets

1.36


1.33


1.37


1.33


1.39


Non-performing assets / total assets

0.80


0.79


0.89


0.86


0.87


Criticized and classified loans / total portfolio loans

1.68


1.91


1.99


2.17


3.08
















Allowance for loan losses











Allowance for loan losses

$         43,419


$         44,173


$         44,654


$         45,029


$         45,741


Provision for credit losses

2,681


1,289


1,880


1,478


849


Net loan and deposit account overdraft charge-offs

3,108


1,747


2,332


2,193


600
















Annualized net loan charge-offs /average loans

0.25

%

0.16

%

0.23

%

0.22

%

0.06

%

Allowance for loan losses / total portfolio loans

0.88

%

0.91

%

1.09

%

1.12

%

1.16

%

Allowance for loan losses / non-performing loans

0.71

x

0.75

x

0.88

x

0.92

x

0.92

x

Allowance for loan losses / non-performing loans and












loans past due 

0.59

x

0.62

x

0.71

x

0.72

x

0.73

x

































Quarter Ended






June 30,


Mar. 31,


Dec. 31, 


Sept. 30,


June 30,






2015


2015


2014


2014


2014


Capital ratios












Tier I leverage capital


9.29

%

10.62

%

9.88

%

9.70

%

9.64

%

Tier I risk-based capital

13.47


14.09


13.76


13.56


13.46


Total risk-based capital

14.30


14.92


14.81


14.62


14.56


Common equity tier 1 capital ratio (CET 1)

11.71


11.49








Average shareholders' equity to average assets

13.29


12.71


12.73


12.49


12.43


Tangible equity to tangible assets (3)

7.68


7.78


7.88


7.91


7.74






























(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)


2015


2015


2014


2014


2014


2015

2014

Return on average tangible equity:















Net income (annualized)


$              86,770


$        56,319


$        65,510


$        72,072


$        75,708


$       71,612

$        71,177


Plus: amortization of intangibles (annualized) (1)


2,462


1,491


1,202


1,230


1,256


1,979

1,281


Net income before amortization of intangibles (annualized)


89,232


57,810


66,712


73,302


76,964


73,591

72,458

















Average total shareholders' equity


1,100,302


956,836


801,579


787,672


773,052


1,001,344

765,985


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


(447,709)


(412,454)


(317,061)


(317,368)


(317,679)


(394,957)

(317,836)


Average tangible equity


$            652,593


$      544,382


$      484,518


$      470,304


$      455,373


$     606,387

$      448,149
















Return on average tangible equity


13.67%


10.62%


13.77%


15.59%


16.90%


12.14%

16.17%
















Efficiency ratio:















Non-interest expense


$              46,589


$        53,441


$        41,972


$        39,263


$        40,304


$     100,047

$        80,398


Less: restructuring and merger-related expense


(1,115)


(9,733)


(1,309)


-


-


(10,848)

-


Non-interest expense excluding restructuring and merger-related expense


45,474


43,708


40,663


39,263


40,304


89,199

80,398

















Net interest income on a fully taxable equivalent basis


62,975


56,857


50,793


50,449


50,157


119,841

99,304


Non-interest income


18,072


18,190


16,560


16,654


18,241


36,254

35,290


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


$              81,047


$        75,047


$        67,353


$        67,103


$        68,398


$     156,095

$      134,594


Efficiency Ratio


56.11%


58.24%


60.37%


58.51%


58.93%


57.14%

59.73%
















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















Net income 


$              21,633


$        13,887


$        16,512


$        18,166


$        18,875


$       35,512

$        35,296


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


725


6,326


851


-


-


7,051

-

Net income, excluding after-tax merger-related expenses


$              22,358


$        20,213


$        17,363


$        18,166


$        18,875


$       42,563

$        35,296
















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















Net income per diluted share


$                  0.56


$            0.40


$            0.56


$            0.62


$            0.64


$           0.97

$            1.20


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


0.02


0.19


0.03


-


-


0.20

-

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


$                  0.58


$            0.59


$            0.59


$            0.62


$            0.64


$           1.17

$            1.20



















Period End







June 30,


Mar. 31,


Dec. 31,


Sept. 30,


June 30,







2015


2015


2014


2014


2014




Tangible book value:















Total shareholders' equity


$         1,094,653


$   1,091,384


$      788,190


$      788,784


$      778,625





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


(488,949)


(488,911)


(316,914)


(317,217)


(317,527)





Tangible equity


605,704


602,473


471,276


471,567


461,098




















Common shares outstanding


38,519,170


38,449,812


29,298,188


29,283,675


29,278,925



















Tangible book value


$                15.72


$          15.67


$          16.09


$          16.10


$          15.75



















Tangible equity to tangible assets:















Total shareholders' equity


$         1,094,653


$   1,091,384


$      788,190


$      788,784


$      778,625





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


(488,949)


(488,911)


(316,914)


(317,217)


(317,527)





Tangible equity


605,704


602,473


471,276


471,567


461,098




















Total assets


8,375,419


8,233,279


6,296,565


6,278,494


6,277,020





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


(488,949)


(488,911)


(316,914)


(317,217)


(317,527)





Tangible assets


$         7,886,470


$   7,744,368


$   5,979,651


$   5,961,277


$   5,959,493



















Tangible equity to tangible assets


7.68%


7.78%


7.88%


7.91%


7.74%
















































(1) Tax effected at 35%.













 

SOURCE WesBanco, Inc.



RELATED LINKS

http://www.wesbanco.com