WesBanco Announces First Quarter 2018 Net Income

PRNewswire 17-Apr-2018 4:15 PM

WesBanco Announces First Quarter 2018 Net Income

PR Newswire

WHEELING, W.Va., April 17, 2018 /PRNewswire/ -- WesBanco, Inc. ("WesBanco") (NASDAQ:WSBC), a diversified, multi-state bank holding company, today announced net income for the three months ended March 31, 2018 of $33.5 million, with diluted earnings per share of $0.76, compared to $25.9 million and $0.59 per diluted share, respectively, for the first quarter of 2017.  Excluding after-tax merger-related expenses (non-GAAP measure) in both periods, net income and diluted earnings per share would have increased 28.7% to $33.7 million, or $0.76 per diluted share for the three months ended March 31, 2018, as compared to the prior year quarter.




For the Three Months Ended March 31, 




2018


2017

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


Net Income


Diluted
Earnings
Per Share


Net Income


Diluted
Earnings
Per Share

Net income (Non-GAAP)(1)


$      33,722


$       0.76


$      26,205


$       0.60

Less: After tax merger-related expenses


(193)


(0.00)


(319)


(0.01)

Net income (GAAP)


$      33,529


$       0.76


$      25,886


$       0.59

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

WesBanco Logo (PRNewsfoto/WesBanco, Inc.)

On April 5, 2018, WesBanco consummated the merger with First Sentry Bancshares, Inc. ("FTSB"), a bank holding company headquartered in Huntington, WV with approximately $700 million in assets.  The merger, which was announced on November 13, 2017, was approved by all appropriate regulatory agencies and the shareholders of FTSB during February.  WesBanco's first quarter results excludes the impact of the FTSB acquisition since it closed after the end of the quarter.

Financial and operational highlights:

  • Continued execution of well-defined long-term growth strategies
  • The merger with FTSB has been successfully completed with conversion planned for later this summer
  • Continued benefit from shale energy-related core funding as demonstrated by strong year-over-year growth in total demand deposits
  • Trust assets exceeded $4 billion for the first time
  • Continued strength across key credit quality metrics
  • Solid expense management as demonstrated by a first quarter efficiency ratio of 55.12% (non-GAAP measure), which was flat sequentially and improved 88 basis points compared to the prior year
  • Strong year-over-year organic growth in pre-tax earnings of 11.0%

"We are pleased with WesBanco's performance during the first quarter of 2018," said Todd F. Clossin, President and Chief Executive Officer of WesBanco. "We remain focused on disciplined growth, expense management, and increasing long-term shareholder value through earnings and dividend growth.  Following the record reported earnings during 2017, we reported an 11% year-over-year increase in pre-tax earnings during the first quarter of 2018.  In addition, during February, we announced an 11.5% increase in our quarterly dividend rate to $0.29 per share, representing a 107% increase since 2010."

Mr. Clossin added, "On April 5th, we welcomed the shareholders, customers, and employees of First Sentry into the WesBanco family.  This merger fits perfectly with our strategic growth plans as it combines two institutions with solid credit quality and a strong focus on client service and community banking.  And, most importantly, we are eager to provide our new retail and commercial customers our broad array of products and services while continuing to deliver the exceptional service to which they are accustomed."

Balance Sheet
Portfolio loans of $6.3 billion were flat when compared to the prior year period as targeted reductions in the consumer portfolio to reduce its risk profile offset growth in our strategic focus categories, which, over the past twelve months, grew 1.8% in total commercial loans and 3.0% in home equity loans.  In addition, secondary market loan sales in the residential real estate portfolio continued to increase, which reduced the amount of loans held on the balance sheet.  Reflecting the strength of our legacy footprint, total deposits, excluding CDs, increased 5.1%, driven by 8.0% growth in interest bearing and non-interest bearing demand deposits, which now represent 51.5% of total deposits as of March 31, 2018 as compared to balances as of March 31, 2017.  Further, average loans to average deposits for the first quarter of 2018 remained consistent to prior quarters at 89.3%, which provides ample funding support for future loan growth.

Credit Quality
The continued strength of our credit quality ratios is reflective of our strong legacy of credit and risk management.  As of March 31, 2018, both non-performing assets as a percentage of total assets of 0.42% and non-performing loans as a percentage of total portfolio loans of 0.62% have continued to show improvements and have declined to the lowest levels in at least five quarters.  In addition, net charge-offs as a percentage of average portfolio loans were 0.07%, declining both sequentially and year-over-year.  Further reflecting the consistent high quality of the loan portfolio, the provision for credit losses decreased from $2.7 million in the first quarter of 2017 to $2.2 million in the current quarter.

Net Interest Margin and Income
The net interest margin for the first quarter of 2018 declined four basis points year-over-year to 3.38%, reflecting a six basis point reduction, as mentioned last quarter, related to the lower tax-equivalency of the state and local municipal tax-exempt securities resulting from the "Tax Cuts and Jobs Act".  The net interest margin continues to benefit from increases in the Federal Reserve Board's target federal funds rate over the past year, partially offset by higher funding costs as well as a flattening of the yield curve.  The increase in the cost of interest bearing liabilities is primarily due to higher rates for interest bearing public funds, and certain Federal Home Loan Bank and other borrowings.  Accretion from prior acquisitions benefited the first quarter net interest margin by approximately six basis points, as compared to eight basis points in the prior year period.

Net interest income increased $2.6 million, or 3.6%, during the first quarter of 2018 as compared to the same quarter of 2017 due to a 2.7% increase in average total earning assets.

Non-Interest Income
For the first quarter of 2018, non-interest income of $24.0 million increased $1.1 million, or 4.8%, from the first quarter of 2017, driven by higher bank-owned life insurance, trust fees, and electronic banking fees, which more than offset lower mortgage banking income and other income.  The $1.6 million, or 141.8%, increase in bank-owned life insurance was due to higher death benefits received during the period.  Trust fees grew $0.4 million from the prior year quarter reflecting improvements in the equity markets as well as organic growth in trust assets.  While the volume of residential mortgage originations sold in the secondary market increased 26% year-over-year, mortgage banking income declined $0.4 million due to a $0.5 million reversal in the mark-to-market on mortgage loans held for sale and commitments that benefited the first quarter of 2017.  Lastly, other income decreased $0.9 million due to income in the prior year period from joint ventures, which were previously dissolved, as well as lower commercial customer loan swap income.

Non-Interest Expense
Total operating expenses were well-controlled during the first quarter of 2018, as strong discretionary expense management continues to be demonstrated.  Excluding merger-related expenses in both years, non-interest expense during the first quarter of 2018 increased $0.4 million, or 0.8%, compared to the prior year period.  The slight increase from the prior year quarter is primarily due to higher salaries and wages, which increased $2.0 million, or 8.7%, year-over-year.  This increase was due to the normal compensation adjustments implemented last summer, as well as the reclassification of $0.7 million related to the service cost component of the pension plan from employee benefits due to a new accounting standard, which was adopted as of January 1, 2018.  The remainder of the year-over-year decrease in employee benefits was from lower deferred compensation expense from associated market and participant activity.

Provision for Income Taxes
The effective income tax rate and associated provision for income taxes for the first quarter of 2018 are reflective of the recently enacted "Tax Cuts and Jobs Act", which lowered the Federal income tax rate for corporations to 21%.  During the first quarter, the effective tax rate was 17.28% as compared to 29.09% last year, while the provision for income taxes decreased $3.6 million to $7.0 million, despite higher year-over-year pre-tax income.

Capital
WesBanco continues to maintain strong regulatory capital ratios after the implementation of the BASEL III capital standards.  At March 31, 2018, Tier I leverage was 10.56%, Tier I Risk-Based capital was 14.31%, Total Risk-Based capital was 15.35%%, and the Common Equity Tier 1 capital ratio ("CET 1") was 12.33%.  Both consolidated and bank-level regulatory capital ratios are well above the applicable "well-capitalized" standards promulgated by bank regulators and the BASEL III capital standards.  Record earnings achieved during 2017, strong regulatory capital and liquidity positions, solid execution on well-defined long-term operational and growth strategies, and the recent change in Federal tax law enabled WesBanco to increase the quarterly cash dividend by 11.5% to $0.29 per share during February.  This is the eleventh increase over the last eight years, representing a cumulative increase of 107%.

Conference Call and Webcast
WesBanco will also host a conference call to discuss the Company's financial results for the first quarter of 2018 at 3:00 p.m. ET on Wednesday, April 18, 2018.  Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company's website, www.wesbanco.com.  Participants can also listen to the conference call by dialing 888-347-6607, 855-669-9657 for Canadian callers, or 412-902-4290 for international callers, and asking to be joined into the WesBanco call.  Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

A replay of the conference call will be available by dialing 877-344-7529, 855-669-9658 for Canadian callers, or 412-317-0088 for international callers, and providing the access code of 10115492.  The replay will begin at approximately 5:00 p.m. ET on April 18, and end at 12 a.m. ET on May 2.  An archive of the webcast will be available for one year on the Investor Relations section of the Company's website (www.wesbanco.com).

Forward-Looking Statements
Forward-looking statements in this report relating to WesBanco's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The information contained in this report should be read in conjunction with WesBanco's Form 10-K for the year ended December 31, 2017 and documents subsequently filed by WesBanco with the Securities and Exchange Commission ("SEC"), which are available at the SEC's website, www.sec.gov or at WesBanco's website, www.wesbanco.com.  Investors are cautioned that forward-looking statements, which are not historical fact, involve risks and uncertainties, including those detailed in WesBanco's most recent Annual Report on Form 10-K filed with the SEC under "Risk Factors" in Part I, Item 1A.  Such statements are subject to important factors that could cause actual results to differ materially from those contemplated by such statements, including, without limitation, that the businesses of WesBanco and FTSB may not be integrated successfully or such integration may take longer to accomplish than excepted; the expected cost savings and any revenue synergies from the merger of WesBanco and FTSB may not be fully realized within the expected timeframes; disruption from the merger of WesBanco and FTSB may make it more difficult to maintain relationships with clients, associates, or suppliers; the effects of changing regional and national economic conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and associated interest rate sensitivity; sources of liquidity available to WesBanco and its related subsidiary operations; potential future credit losses and the credit risk of commercial, real estate, and consumer loan customers and their borrowing activities; actions of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the SEC, the Financial Institution Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investors Protection Corporation, and other regulatory bodies; potential legislative and federal and state regulatory actions and reform, including, without limitation, the impact of the implementation of the Dodd-Frank Act; adverse decisions of federal and state courts; fraud, scams and schemes of third parties; internet hacking; competitive conditions in the financial services industry; rapidly changing technology affecting financial services; marketability of debt instruments and corresponding impact on fair value adjustments; and/or other external developments materially impacting WesBanco's operational and financial performance.  WesBanco does not assume any duty to update forward-looking statements.

About WesBanco, Inc.
Founded in 1870, WesBanco, Inc. (www.wesbanco.com) is a multi-state, bank holding company with total assets of approximately $10.2 billion (as of March 31, 2018).  WesBanco is a diversified and well-balanced financial services institution, with a community bank at its core, built upon a strong legacy of credit and risk management.  WesBanco has meaningful market share across its key geographies maintained by its commitment to dedicated customer service and solid fee-based businesses. It also provides wealth management services through a century-old trust and wealth management business, with approximately $4.0 billion of assets under management (as of March 31, 2018), and serves as registered investment advisor to a proprietary mutual fund family, the WesMark Funds.  WesBanco's banking subsidiary, WesBanco Bank, Inc., operates 177 financial centers in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia.  In addition, WesBanco operates an insurance agency, WesBanco Insurance Services, Inc., and a full service broker/dealer, WesBanco Securities, Inc.

WESBANCO, INC.







Consolidated Selected Financial Highlights






Page 4

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






















For the Three Months Ended

STATEMENT OF INCOME


March 31,

Interest and dividend income


2018


2017


% Change


Loans, including fees


$             69,237


$               64,898


6.7


Interest and dividends on securities:









Taxable 


11,543


9,596


20.3



Tax-exempt


4,834


4,891


(1.2)




Total interest and dividends on securities


16,377


14,487


13.0


Other interest income 


803


539


49.0

          Total interest and dividend income


86,417


79,924


8.1

Interest expense








Interest bearing demand deposits


2,524


1,093


130.9


Money market deposits


878


574


53.0


Savings deposits


189


181


4.4


Certificates of deposit


2,536


2,411


5.2




Total interest expense on deposits


6,127


4,259


43.9


Federal Home Loan Bank borrowings


4,498


2,836


58.6


Other short-term borrowings


558


297


87.9


Subordinated debt and junior subordinated debt 


1,942


1,813


7.1




Total interest expense


13,125


9,205


42.6

Net interest income 


73,292


70,719


3.6


Provision for credit losses


2,168


2,711


(20.0)

Net interest income after provision for credit losses


71,124


68,008


4.6

Non-interest income








Trust fees


6,503


6,143


5.9


Service charges on deposits


4,822


4,853


(0.6)


Electronic banking fees


4,829


4,528


6.6


Net securities brokerage revenue


1,670


1,762


(5.2)


Bank-owned life insurance


2,756


1,140


141.8


Mortgage banking income


1,004


1,440


(30.3)


Net securities (losses)/gains


(39)


12


(425.0)


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


262


(76)


444.7


Other income


2,173


3,082


(29.5)




Total non-interest income


23,980


22,884


4.8

Non-interest expense








Salaries and wages


25,006


23,002


8.7


Employee benefits


6,912


8,210


(15.8)


Net occupancy


4,656


4,327


7.6


Equipment 


3,949


4,042


(2.3)


Marketing


1,116


824


35.4


FDIC insurance 


658


827


(20.4)


Amortization of intangible assets


1,086


1,273


(14.7)


Restructuring and merger-related expense


245


491


(50.1)


Other operating expenses  


10,943


11,388


(3.9)




Total non-interest expense


54,571


54,384


0.3

Income before provision for income taxes


40,533


36,508


11.0


Provision for income taxes 


7,004


10,622


(34.1)

Net Income


$             33,529


$               25,886


29.5











Taxable equivalent net interest income


$            74,577


$            73,353


1.7











Per common share data







Net income per common share - basic


$                 0.76


$                   0.59


28.8

Net income per common share - diluted


0.76


0.59


28.8

Net income per common share - diluted, excluding certain items (1)(2)


0.76


0.60


26.7

Dividends declared


0.29


0.26


11.5

Book value (period end)


31.84


30.92


3.0

Tangible book value (period end) (1)


18.56


17.61


5.4

Average common shares outstanding - basic


44,050,701


43,947,563


0.2

Average common shares outstanding - diluted


44,168,242


44,020,765


0.3

Period end common shares outstanding


44,060,957


43,953,051


0.2











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

(2) Certain items excluded from the calculation consist of after-tax merger-related expenses and the net deferred tax asset revaluation.

 

WESBANCO, INC.

















Consolidated Selected Financial Highlights














Page 5

(unaudited, dollars in thousands)


































Selected ratios
























For the Three Months Ended









March 31,










2018


2017


% Change


























Return on average assets





1.36

%

1.07

%

27.10

%







Return on average assets, excluding
















    after-tax merger-related expenses and
















    net deferred tax asset revaluation (1)




1.37


1.09


25.69








Return on average equity





9.70


7.73


25.49








Return on average equity, excluding
















    after-tax merger-related expenses and
















    net deferred tax asset revaluation (1)




9.76


7.83


24.65








Return on average tangible equity (1)




17.10


14.03


21.88








Return on average tangible equity, excluding 
















    after-tax merger-related expenses and
















    net deferred tax asset revaluation (1)




17.20


14.20


21.13








Yield on earning assets (2) 





3.98


3.85


3.38








Cost of interest bearing liabilities




0.80


0.57


40.35








Net interest spread (2)





3.18


3.28


(3.05)








Net interest margin (2)





3.38


3.42


(1.17)








Efficiency (1) (2)






55.12


56.00


(1.57)








Average loans to average deposits




89.26


89.21


0.06








Annualized net loan charge-offs/average loans




0.07


0.15


(53.33)








Effective income tax rate





17.28


29.09


(40.60)






















































































For the Quarter Ended










Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,










2018


2017


2017


2017


2017






















Return on average assets





1.36

%

0.64

%

1.06

%

1.07

%

1.07

%



Return on average assets, excluding
















    after-tax merger-related expenses and
















    net deferred tax asset revaluation (1)




1.37


1.16


1.06


1.07


1.09




Return on average equity





9.70


4.48


7.50


7.67


7.73




Return on average equity, excluding
















    after-tax merger-related expenses and
















    net deferred tax asset revaluation (1)




9.76


8.17


7.50


7.67


7.83




Return on average tangible equity (1)




17.10


8.05


13.31


13.74


14.03




Return on average tangible equity, excluding 
















    after-tax merger-related expenses and
















    net deferred tax asset revaluation (1)




17.20


14.36


13.31


13.74


14.20




Yield on earning assets (2) 





3.98


3.95


3.99


3.91


3.85




Cost of interest bearing liabilities




0.80


0.71


0.67


0.61


0.57




Net interest spread (2)





3.18


3.24


3.32


3.30


3.28




Net interest margin (2)





3.38


3.43


3.48


3.45


3.42




Efficiency (1) (2) 






55.12


55.08


57.03


57.68


56.00




Average loans to average deposits




89.26


90.26


90.43


89.51


89.21




Annualized net loan charge-offs/average loans




0.07


0.16


0.12


0.09


0.15




Effective income tax rate (3)





17.28


59.14


28.54


26.82


29.09




Trust assets, market value at period end




$     4,027,358


$        3,943,519


$        3,908,705


$        3,810,038


$        3,836,107






















(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.












(3) The three months ended December 31, 2017 include a $12.8 million tax expense as a result of the net deferred tax asset revaluation.






 

WESBANCO, INC.









Consolidated Selected Financial Highlights








Page 6

(unaudited, dollars in thousands, except shares)








% Change

Balance sheets


March 31,



December 31,

December 31, 2017

Assets



2018


2017


% Change

2017

to March 31, 2018

Cash and due from banks


$            91,361


$        101,559


(10.0)

$                97,746

(6.5)

Due from banks - interest bearing


9,484


13,525


(29.9)

19,826

(52.2)

Securities:










     Equity securities, at fair value


13,986


13,241


5.6

13,457

3.9

     Available-for-sale debt securities, at fair value


1,728,377


1,219,601


41.7

1,261,865

37.0

     Held-to-maturity debt securities (fair values of $1,005,502; $1,071,009 









     and $1,023,784, respectively)


1,006,042


1,057,753


(4.9)

1,009,500

(0.3)

          Total securities


2,748,405


2,290,595


20.0

2,284,822

20.3

Loans held for sale


12,962


11,480


12.9

20,320

(36.2)

Portfolio loans:









     Commercial real estate


3,015,226


2,952,603


2.1

2,994,448

0.7

     Commercial and industrial


1,118,333


1,106,719


1.0

1,125,327

(0.6)

     Residential real estate 


1,345,993


1,367,132


(1.5)

1,353,301

(0.5)

     Home equity


523,425


508,411


3.0

529,196

(1.1)

     Consumer 


319,561


377,307


(15.3)

339,169

(5.8)

Total portfolio loans, net of unearned income


6,322,538


6,312,172


0.2

6,341,441

(0.3)

Allowance for loan losses


(46,334)


(44,061)


(5.2)

(45,284)

(2.3)

          Net portfolio loans


6,276,204


6,268,111


0.1

6,296,157

(0.3)

Premises and equipment, net


128,583


134,949


(4.7)

130,722

(1.6)

Accrued interest receivable


31,963


28,923


10.5

29,728

7.5

Goodwill and other intangible assets, net


588,339


591,539


(0.5)

589,264

(0.2)

Bank-owned life insurance


191,839


189,286


1.3

192,589

(0.4)

Other assets


166,279


170,914


(2.7)

155,004

7.3

Total Assets


$    10,245,419


$   9,800,881


4.5

$         9,816,178

4.4













Liabilities









Deposits:










     Non-interest bearing demand


$        1,950,619


$      1,844,003


5.8

$           1,846,748

5.6

     Interest bearing demand


1,768,977


1,599,536


10.6

1,625,015

8.9

     Money market


984,429


1,029,440


(4.4)

1,024,856

(3.9)

     Savings deposits


1,314,632


1,253,652


4.9

1,269,912

3.5

     Certificates of deposit


1,207,669


1,419,104


(14.9)

1,277,057

(5.4)

          Total deposits


7,226,326


7,145,735


1.1

7,043,588

2.6

Federal Home Loan Bank borrowings


1,166,939


937,104


24.5

948,203

23.1

Other short-term borrowings


207,653


115,643


79.6

184,805

12.4

Subordinated debt and junior subordinated debt 


164,379


164,177


0.1

164,327

0.0

          Total borrowings


1,538,971


1,216,924


26.5

1,297,335

18.6

Accrued interest payable


4,033


2,422


66.5

3,178

26.9

Other liabilities


73,063


76,647


(4.7)

76,756

(4.8)

Total Liabilities


8,842,393


8,441,728


4.7

8,420,857

5.0













Shareholders' Equity









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









     none outstanding


-


-


-

-

-

Common stock, $2.0833 par value; 100,000,000 shares authorized in









     2018 and 2017, respectively; 44,060,957;  43,953,051 and 44,043,244 shares









     issued, respectively; 44,060,957; 43,953,051 and 44,043,244 shares


91,793


91,568


0.2

91,756

0.0

     outstanding, respectively









Capital surplus


686,169


681,471


0.7

684,730

0.2

Retained earnings


673,174


611,528


10.1

651,357

3.3

Treasury stock (0; 0 and 0 shares - at cost, respectively)


-


-


-

-

-

Accumulated other comprehensive loss


(47,076)


(24,841)


(89.5)

(31,495)

(49.5)

Deferred benefits for directors


(1,034)


(573)


(80.5)

(1,027)

(0.7)

Total Shareholders' Equity


1,403,026


1,359,153


3.2

1,395,321

0.6

Total Liabilities and Shareholders' Equity


$    10,245,419


$   9,800,881


4.5

$         9,816,178

4.4

 

WESBANCO, INC.












Consolidated Selected Financial Highlights








Page 7


(unaudited, dollars in thousands)











Average balance sheet and












net interest margin analysis





For the Three Months Ended March 31,









2018

2017








Average 

Average



Average 

Average


Assets






Balance

Rate



Balance

Rate


Due from banks - interest bearing




$                  8,727

2.06

%


$           13,926

0.52

%

Loans, net of unearned income (1)




6,339,550

4.43



6,278,718

4.19


Securities: (2)













    Taxable






1,789,336

2.58



1,603,337

2.39


    Tax-exempt (3)






717,624

3.41



726,658

4.14


        Total securities






2,506,960

2.82



2,329,995

2.94


Other earning assets 






50,388

6.02



47,025

4.43


         Total earning assets (3)




8,905,625

3.98

%


8,669,664

3.85

%

Other assets






1,087,739




1,111,813



Total Assets






$          9,993,364




$    9,781,477
















Liabilities and Shareholders' Equity











Interest bearing demand deposits




$            1,697,755

0.60

%


$      1,536,282

0.29

%

Money market accounts 





1,005,236

0.35



1,038,584

0.22


Savings deposits






1,288,120

0.06



1,227,190

0.06


Certificates of deposit





1,241,228

0.83



1,454,245

0.67


    Total interest bearing deposits




5,232,339

0.47



5,256,301

0.33


Federal Home Loan Bank borrowings




1,037,441

1.76



949,001

1.21


Other borrowings






204,833

1.10



197,358

0.61


Subordinated debt and junior subordinated debt 



164,334

4.79



163,913

4.49


      Total interest bearing liabilities 




6,638,947

0.80

%


6,566,573

0.57

%

Non-interest bearing demand deposits




1,869,624




1,781,513



Other liabilities






83,522




75,789



Shareholders' equity






1,401,271




1,357,602



Total Liabilities and Shareholders' Equity




$          9,993,364




$    9,781,477



Taxable equivalent net interest spread





3.18

%



3.28

%

Taxable equivalent net interest margin 





3.38

%



3.42

%



























(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 $0.7 million and $0.6 million for the three months ended March 31, 2018 and 2017, respectively. 



Additionally, loan accretion included in interest income on loans acquired from prior acquisitions was $1.2 million and $1.3 million for the three months ended March 31, 2018 and 2017, 

respectively.













Accretion on interest bearing liabilities acquired from the prior acquisitions was $0.2 million and $0.5 million for the three months ended March 31, 2018 and 2017, respectively.

(2) Average yields on available-for-sale debt securities are calculated based on amortized cost.








(3) Taxable equivalent basis is calculated on tax-exempt securities using a rate of 21% for 2018 and 35% for each prior period presented.





 

WESBANCO, INC.










Consolidated Selected Financial Highlights









 Page 8 

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













Quarter Ended

Statement of Income

Mar. 31,


Dec. 31,


Sept.  30,


June 30,


Mar. 31,

Interest income

2018


2017


2017


2017


2017


Loans, including fees

$                        69,237


$                69,408


$              70,342


$                67,360


$              64,898


Interest and dividends on securities:












Taxable 

11,543


9,948


9,711


9,375


9,596



Tax-exempt

4,834


4,872


4,862


4,864


4,891




Total interest and dividends on securities

16,377


14,820


14,573


14,239


14,487


Other interest income 

803


623


574


561


539

          Total interest and dividend income

86,417


84,851


85,489


82,160


79,924

Interest expense











Interest bearing demand deposits

2,524


2,039


1,814


1,506


1,093


Money market deposits

878


805


751


644


574


Savings deposits

189


189


189


185


181


Certificates of deposit

2,536


2,597


2,610


2,491


2,411




Total interest expense on deposits

6,127


5,630


5,364


4,826


4,259


Federal Home Loan Bank borrowings

4,498


3,682


3,628


3,145


2,836


Other short-term borrowings

558


489


394


262


297


Subordinated debt and junior subordinated debt

1,942


1,868


1,849


1,788


1,813




Total interest expense

13,125


11,669


11,235


10,021


9,205

Net interest income 

73,292


73,182


74,254


72,139


70,719


Provision for credit losses

2,168


2,376


2,516


2,383


2,711

Net interest income after provision for credit losses

71,124


70,806


71,738


69,756


68,008

Non-interest income











Trust fees

6,503


5,667


5,358


5,572


6,143


Service charges on deposits

4,822


5,278


5,320


5,081


4,853


Electronic banking fees

4,829


4,788


4,883


4,984


4,528


Net securities brokerage revenue

1,670


1,508


1,721


1,680


1,762


Bank-owned life insurance

2,756


1,123


1,164


1,367


1,140


Mortgage banking income

1,004


1,542


1,103


968


1,440


Net securities (losses)/gains

(39)


56


6


494


12


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

262


649


(298)


342


(76)


Other income

2,173


2,323


1,642


1,634


3,082




Total non-interest income

23,980


22,934


20,899


22,122


22,884

Non-interest expense











Salaries and wages

25,006


25,786


24,957


23,616


23,002


Employee benefits

6,912


6,263


7,728


7,731


8,210


Net occupancy

4,656


4,132


4,132


4,510


4,327


Equipment 

3,949


3,983


3,905


4,097


4,042


Marketing

1,116


1,238


1,599


2,060


824


FDIC insurance 

658


827


945


906


827


Amortization of intangible assets

1,086


1,204


1,223


1,240


1,273


Restructuring and merger-related expense

245


454


-


-


491


Other operating expenses  

10,943


10,950


11,265


11,724


11,388




Total non-interest expense

54,571


54,837


55,754


55,884


54,384

Income before provision for income taxes

40,533


38,903


36,883


35,994


36,508


Provision for income taxes 

7,004


23,006


10,527


9,653


10,622

Net Income

$                        33,529


$                15,897


$              26,356


$                26,341


$              25,886














Taxable equivalent net interest income

$                       74,577


$               75,805


$             76,872


$               74,758


$             73,353














Per common share data










Net income per common share - basic

$                            0.76


$                    0.36


$                  0.60


$                    0.60


$                  0.59

Net income per common share - diluted

$                            0.76


$                    0.36


$                  0.60


$                    0.60


$                  0.59

Net income per common share - diluted, excluding certain items (1)(2)

$                            0.76


$                    0.66


$                  0.60


$                    0.60


$                  0.60

Dividends declared

$                            0.29


$                    0.26


$                  0.26


$                    0.26


$                  0.26

Book value (period end)

$                          31.84


$                  31.68


$                31.67


$                  31.29


$                30.92

Tangible book value (period end) (1)

$                          18.56


$                  18.42


$                18.40


$                  17.99


$                17.61

Average common shares outstanding - basic

44,050,701


44,036,416


44,031,813


43,995,749


43,947,563

Average common shares outstanding - diluted

44,168,242


44,109,767


44,086,881


44,061,421


44,020,765

Period end common shares outstanding

44,060,957


44,043,244


44,033,585


44,031,335


43,953,051

Full time equivalent employees

1,939


1,940


1,944


1,959


1,934



























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









(2) Certain items excluded from the calculation consist of after-tax merger-related expenses and the net deferred tax asset revaluation.





 

WESBANCO, INC.












Consolidated Selected Financial Highlights









 Page 9 


(unaudited, dollars in thousands)
















Quarter Ended






Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,


Asset quality data


2018


2017


2017


2017


2017


Non-performing assets:













Troubled debt restructurings - accruing


$           6,858


$           6,571


$           6,638


$           6,841


$           7,194



Non-accrual loans:














Troubled debt restructurings


2,397


2,865


2,982


3,158


3,273




Other non-accrual loans


29,989


33,960


32,476


33,077


36,054




    Total non-accrual loans


32,386


36,825


35,458


36,235


39,327




    Total non-performing loans 


39,244


43,396


42,096


43,076


46,521



Other real estate and repossessed assets


4,067


5,297


5,782


6,723


8,033




Total non-performing assets


$         43,311


$         48,693


$         47,878


$         49,799


$         54,554
















Past due loans (1):













Loans past due 30-89 days


$         14,536


$         11,172


$         17,292


$         16,605


$         11,426



Loans past due 90 days or more


1,579


2,726


4,856


4,210


2,766




Total past due loans


$         16,115


$         13,898


$         22,148


$         20,815


$         14,192
















Criticized and classified loans (2):













Criticized loans


$         33,785


$         36,092


$         34,784


$         39,234


$         36,900



Classified loans


34,566


37,858


44,303


40,468


48,112




Total criticized and classified loans


$         68,351


$         73,950


$         79,087


$         79,702


$         85,012
















Loans past due 30-89 days / total portfolio loans

0.23

%

0.18

%

0.27

%

0.26

%

0.18

%

Loans past due 90 days or more / total portfolio loans

0.02


0.04


0.08


0.07


0.04


Non-performing loans / total portfolio loans


0.62


0.68


0.66


0.67


0.74


Non-performing assets/total portfolio loans, other












real estate and repossessed assets


0.68


0.77


0.75


0.78


0.86


Non-performing assets / total assets


0.42


0.50


0.48


0.50


0.56


Criticized and classified loans / total portfolio loans

1.08


1.17


1.24


1.25


1.35
















Allowance for loan losses












Allowance for loan losses


$         46,334


$         45,284


$         45,487


$         44,909


$         44,061


Provision for credit losses


2,168


2,376


2,516


2,383


2,711


Net loan and deposit account overdraft charge-offs

1,063


2,652


1,888


1,486


2,347
















Annualized net loan charge-offs /average loans

0.07

%

0.16

%

0.12

%

0.09

%

0.15

%

Allowance for loan losses / total portfolio loans

0.73

%

0.71

%

0.71

%

0.70

%

0.70

%

Allowance for loan losses / non-performing loans

1.18

x

1.04

x

1.08

x

1.04

x

0.95

x

Allowance for loan losses / non-performing loans and












loans past due 


0.84

x

0.79

x

0.71

x

0.70

x

0.73

x

































Quarter Ended






Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,






2018


2017


2017


2017


2017


Capital ratios












Tier I leverage capital


10.56

%

10.39

%

10.21

%

10.10

%

9.97

%

Tier I risk-based capital


14.31


14.12


13.62


13.37


13.21


Total risk-based capital


15.35


15.16


14.65


14.39


14.22


Common equity tier 1 capital ratio (CET 1)


12.33


12.14


11.70


11.45


11.28


Average shareholders' equity to average assets

14.02


14.19


14.08


14.01


13.88


Tangible equity to tangible assets (3)


8.46


8.79


8.68


8.53


8.40






























(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 10


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






Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,


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

2018


2017


2017


2017


2017


Return on average assets, excluding after-tax merger-related expenses and net deferred tax asset revaluation:












Net income (annualized)


$             135,979


$           63,068


$         104,566


$         105,653


$         104,982



Plus: after-tax merger-related expenses (annualized)  (1)

784


1,170


-


-


1,294



Plus: net deferred tax asset revaluation (annualized) 

-


50,703


-


-


-



Net income excluding after-tax merger-related expenses and net deferred tax asset revaluation (annualized)

136,763


114,941


104,566


105,653


106,276

















Average total assets


$          9,993,364


$      9,907,944


$      9,897,487


$      9,828,475


$      9,781,477
















Return on average tangible assets, excluding after-tax merger-related expenses and net deferred tax asset revaluation

1.37%


1.16%


1.06%


1.07%


1.09%
















Return on average equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation:












Net income (annualized)


$             135,979


$           63,068


$         104,566


$         105,653


$         104,982



Plus: after-tax merger-related expenses (annualized)  (1)

784


1,170


-


-


1,294



Plus: net deferred tax asset revaluation (annualized) 

-


50,703


-


-


-



Net income excluding after-tax merger-related expenses and net deferred tax asset revaluation (annualized)

136,763


114,941


104,566


105,653


106,276

















Average total shareholders' equity

1,401,271


1,406,263


1,393,965


1,377,266


1,357,602
















Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation

9.76%


8.17%


7.50%


7.67%


7.83%
















Return on average tangible equity:












Net income (annualized)


$             135,979


$           63,068


$         104,566


$         105,653


$         104,982



Plus: amortization of intangibles (annualized) (1)

3,479


3,104


3,154


3,233


3,356



Net income before amortization of intangibles (annualized)

139,458


66,172


107,720


108,886


108,338

















Average total shareholders' equity

1,401,271


1,406,263


1,393,965


1,377,266


1,357,602



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

(585,711)


(584,227)


(584,903)


(585,057)


(585,365)



Average tangible equity


$             815,560


$         822,036


$         809,062


$         792,209


$         772,237
















Return on average tangible equity


17.10%


8.05%


13.31%


13.74%


14.03%
















Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation:












Net income (annualized)


$             135,979


$           63,068


$         104,566


$         105,653


$         104,982



Plus: after-tax merger-related expenses (annualized)  (1)

784


1,170


-


-


1,294



Plus: net deferred tax asset revaluation (annualized) 

-


50,703


-


-


-



Plus: amortization of intangibles (annualized) (1)

3,479


3,104


3,154


3,233


3,356



Net income before amortization of intangibles and excluding 












    after-tax merger-related expenses and net deferred tax asset revaluation (annualized)

140,242


118,045


107,720


108,886


109,632

















Average total shareholders' equity

1,401,271


1,406,263


1,393,965


1,377,266


1,357,602



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

(585,711)


(584,227)


(584,903)


(585,057)


(585,365)



Average tangible equity


$             815,560


$         822,036


$         809,062


$         792,209


$         772,237
















Return on average tangible equity, excluding after-tax merger-related expenses and net deferred tax asset revaluation

17.20%


14.36%


13.31%


13.74%


14.20%
















Efficiency ratio:














Non-interest expense


$               54,571


$           54,837


$           55,754


$           55,884


$           54,384



Less: restructuring and merger-related expense

(245)


(454)


-


-


(491)



Non-interest expense excluding restructuring and merger-related expense

54,326


54,383


55,754


55,884


53,893

















Net interest income on a fully taxable equivalent basis

74,577


75,805


76,872


74,758


73,353



Non-interest income


23,980


22,934


20,899


22,122


22,884



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

$               98,557


$           98,739


$           97,771


$           96,880


$           96,237



Efficiency Ratio


55.12%


55.08%


57.03%


57.68%


56.00%
















Net income, excluding net deferred tax asset revaluation and  after-tax merger-related expenses:












Net income



$               33,529


$           15,897


$           26,356


$           26,341


$           25,886



Add: Net deferred tax asset revaluation 

-


12,780


-


-


-



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

193


295


-


-


319


Net income, excluding net deferred tax asset revaluation and  after-tax merger-related expenses

$               33,722


$           28,972


$           26,356


$           26,341


$           26,205






























Net Income, excluding net deferred tax asset revaluation and after-tax merger-related expenses per diluted share:












Net income per diluted share


$                   0.76


$               0.36


$               0.60


$               0.60


$               0.59



Add: Net deferred tax asset revaluation per diluted share

-


0.29


-


-


-



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

0.00


0.01


-


-


0.01


Net income, excluding net deferred tax asset revaluation and  after-tax merger-related expenses per diluted share

$                   0.76


$               0.66


$               0.60


$               0.60


$               0.60


































Period End






Mar. 31,


Dec. 31,


Sept. 30,


June 30,


Mar. 31,






2018


2017


2017


2017


2017


Tangible book value per share:













Total shareholders' equity


$          1,403,026


$      1,395,321


$      1,394,558


$      1,377,537


$      1,359,153



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

(585,316)


(583,903)


(584,543)


(585,195)


(585,123)



Tangible equity


817,711


811,418


810,015


792,342


774,030

















Common shares outstanding


44,060,957


44,043,244


44,033,585


44,031,335


43,953,051
















Tangible book value per share


$                 18.56


$             18.42


$             18.40


$             17.99


$             17.61
















Tangible equity to tangible assets:












Total shareholders' equity


$          1,403,026


$      1,395,321


$      1,394,558


$      1,377,537


$      1,359,153



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

(585,316)


(583,903)


(584,543)


(585,195)


(585,123)



Tangible equity


817,711


811,418


810,015


792,342


774,030

















Total assets



10,245,419


9,816,178


9,918,277


9,874,010


9,800,881



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

(585,316)


(583,903)


(584,543)


(585,195)


(585,123)



Tangible assets


$          9,660,103


$      9,232,275


$      9,333,734


$      9,288,815


$      9,215,758
















Tangible equity to tangible assets


8.46%


8.79%


8.68%


8.53%


8.40%






























(1) Tax effected at 21% for the periods in 2018 and 35% for all prior periods.











 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/wesbanco-announces-first-quarter-2018-net-income-300631651.html

SOURCE WesBanco, Inc.

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